Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 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 | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 14,442,924 | |
Trading Symbol | BTN | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 5,659 | $ 4,870 |
Restricted cash | 350 | |
Accounts receivable (net of allowance for doubtful accounts of $2,215 and $1,877, respectively) | 14,523 | 10,766 |
Inventories: | ||
Raw materials and components, net | 1,330 | 1,376 |
Work in process | 419 | 362 |
Finished goods, net | 2,194 | 3,083 |
Total inventories, net | 3,943 | 4,821 |
Income tax receivable | 330 | 495 |
Other current assets | 1,852 | 1,290 |
Total current assets | 26,657 | 22,242 |
Property, plant and equipment (net of accumulated depreciation of $9,379 and $8,780 respectively) | 14,244 | 10,826 |
Equity method investments | 12,017 | 18,053 |
Intangible assets, net | 1,818 | 3,972 |
Goodwill | 922 | 952 |
Notes receivable | 3,768 | 2,815 |
Other assets | 405 | 154 |
Total assets | 59,831 | 59,014 |
Current liabilities: | ||
Accounts payable | 3,558 | 3,425 |
Accrued expenses | 3,562 | 3,071 |
Short-term debt | 2,607 | 500 |
Current portion of long-term debt | 983 | 65 |
Deferred revenue and customer deposits | 2,993 | 1,619 |
Income tax payable | 22 | |
Total current liabilities | 13,725 | 8,680 |
Long-term debt, net of current portion and debt issuance costs | 9,721 | 1,870 |
Deferred revenue and customer deposits, net of current portion | 1,182 | 1,207 |
Deferred income taxes | 2,636 | 2,816 |
Other accrued expenses, net of current portion | 184 | 319 |
Total liabilities | 27,448 | 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 17,237 and 17,216 shares at September 30, 2018 and December 31, 2017, respectively; outstanding 14,443 and 14,422 shares at September 30, 2018 and December 31, 2017, respectively | 169 | 169 |
Additional paid-in capital | 41,285 | 40,565 |
Accumulated other comprehensive loss: | ||
Foreign currency translation | (4,633) | (4,048) |
Postretirement benefit obligations | 114 | 99 |
Unrealized gain on available-for-sale securities of equity method investments | 150 | 353 |
Retained earnings | 13,884 | 25,570 |
Stockholders' equity before treasury stock | 50,969 | 62,708 |
Less 2,794 of common shares in treasury, at cost | (18,586) | (18,586) |
Total stockholders' equity | 32,383 | 44,122 |
Total liabilities and stockholders' equity | $ 59,831 | $ 59,014 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 2,215 | $ 1,877 |
Property, plant and equipment, accumulated depreciation | $ 9,379 | $ 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 | 17,237,000 | 17,216,000 |
Common stock, shares outstanding | 14,443,000 | 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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total net revenues | $ 16,453 | $ 19,559 | $ 46,458 | $ 56,885 |
Total cost of revenues | 12,923 | 14,240 | 38,788 | 41,852 |
Gross profit | 3,530 | 5,319 | 7,670 | 15,033 |
Selling and administrative expenses: | ||||
Selling | 1,139 | 1,298 | 3,638 | 4,207 |
Administrative | 3,384 | 3,473 | 12,301 | 11,706 |
Total selling and administrative expenses | 4,523 | 4,771 | 15,939 | 15,913 |
Loss on disposal of assets | (799) | (2,130) | ||
(Loss) income from operations | (1,792) | 548 | (10,399) | (880) |
Other income (expense): | ||||
Interest income | 18 | |||
Interest expense | (180) | (51) | (267) | (84) |
Foreign currency transaction (loss) gain | (67) | (306) | 41 | (410) |
Fair value adjustment to notes receivable | 802 | 953 | ||
Other income (expense), net | 6 | (35) | (9) | (24) |
Total other income (expense) | 561 | (392) | 718 | (500) |
(Loss) income before income taxes and equity method investment income (loss) | (1,231) | 156 | (9,681) | (1,380) |
Income tax expense | 497 | 440 | 1,837 | 2,709 |
Equity method investment income (loss) | 507 | (753) | (244) | 1,516 |
Net loss from continuing operations | (1,221) | (1,037) | (11,762) | (2,573) |
Net loss from discontinued operations, net of tax | (49) | |||
Net loss | $ (1,221) | $ (1,037) | $ (11,762) | $ (2,622) |
Net loss per share - basic | ||||
Net loss from continuing operations | $ (0.08) | $ (0.07) | $ (0.82) | $ (0.18) |
Net loss from discontinued operations | 0 | |||
Net loss | (0.08) | (0.07) | (0.82) | (0.18) |
Net loss per share - diluted | ||||
Net loss from continuing operations | (0.08) | (0.07) | (0.82) | (0.18) |
Net loss from discontinued operations | 0 | |||
Net loss | $ (0.08) | $ (0.07) | $ (0.82) | $ (0.18) |
Product [Member] | ||||
Total net revenues | $ 8,401 | $ 12,808 | $ 24,490 | $ 38,302 |
Total cost of revenues | 5,076 | 10,112 | 16,308 | 30,929 |
Service [Member] | ||||
Total net revenues | 8,052 | 6,751 | 21,968 | 18,583 |
Total cost of revenues | $ 7,847 | $ 4,128 | $ 22,480 | $ 10,923 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (1,221) | $ (1,037) | $ (11,762) | $ (2,622) |
Adjustment to postretirement benefits | 6 | 15 | ||
Currency translation adjustment: | ||||
Unrealized net change arising during period | 245 | 689 | (585) | 1,507 |
Unrealized (loss) gain on available-for-sale securities of equity method investments, net of tax | (33) | 34 | (203) | 215 |
Total other comprehensive income (loss) | 218 | 723 | (773) | 1,722 |
Comprehensive loss | $ (1,003) | $ (314) | $ (12,535) | $ (900) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (11,762) | $ (2,622) |
Net loss from discontinued operations, net of tax | (49) | |
Net loss from continuing operations | (11,762) | (2,573) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Provision for doubtful accounts | 381 | 712 |
Provision for obsolete inventory | 412 | (160) |
Provision for warranty | 83 | 319 |
Depreciation and amortization | 1,953 | 1,563 |
Equity method investment loss (income) | 244 | (1,516) |
Fair value adjustment to notes receivable | (953) | |
Deferred income taxes | (146) | 715 |
Amortization of contract acquisition costs | 29 | |
Impairment of contract acquisition costs | 59 | |
Stock-based compensation expense | 648 | 498 |
Impairment of operating lease | 209 | |
Loss on disposal of assets | 2,130 | |
Dividends received from investee | 817 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,244) | 385 |
Inventories | 413 | (134) |
Other current assets | (629) | (41) |
Other assets | (392) | (85) |
Accounts payable | 171 | 1,197 |
Accrued expenses | 244 | (763) |
Deferred revenue and customer deposits | 1,359 | (1,204) |
Current income taxes | 178 | 174 |
Net cash flows used in operating activities - continuing operations | (8,796) | (913) |
Net cash flows used in operating activities - discontinued operations | (147) | |
Net cash used in operating activities | (8,796) | (1,060) |
Cash flows from investing activities: | ||
Proceeds from sale of equity securities | 4,531 | |
Purchase of equity securities | (2,525) | |
Dividends received from investee in excess of cumulative earnings | 69 | 230 |
Capital expenditures | (1,220) | (2,949) |
Proceeds from sale of business | 60 | |
Net cash provided by (used in) investing activities | 3,380 | (5,184) |
Cash flows from financing activities: | ||
Proceeds from sale-leaseback financing | 7,000 | |
Proceeds from issuance of short-term debt | 3,205 | 500 |
Proceeds from issuance of long-term debt | 2,000 | |
Principal payments on long-term debt | (2,278) | (17) |
Principal payments on short-term debt | (1,097) | |
Payment of debt issuance costs | (22) | (46) |
Payments on capital lease obligations | (147) | (188) |
Purchase of treasury stock | (102) | |
Proceeds from exercise of stock options | 71 | |
Other | (8) | |
Net cash provided by financing activities | 6,653 | 2,218 |
Effect of exchange rate changes on cash and cash equivalents | (98) | 304 |
Net increase (decrease) in cash and cash equivalents and restricted cash | 1,139 | (3,722) |
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 | ||
Cash and cash equivalents and restricted cash at beginning of period | 4,870 | 7,596 |
Cash and cash equivalents and restricted cash at end of period | 6,009 | 4,049 |
Components of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents | 5,659 | 4,049 |
Restricted cash | 350 | |
Total cash and cash equivalents and restricted cash | 6,009 | 4,049 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Term loan borrowings to finance equipment purchases | $ 4,121 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 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 (“Convergent”) 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 | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2017 were as follows (in thousands): Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Total net revenues $ - $ 24 Total cost of revenues - 48 Total selling and administrative expenses - 53 Loss from operations of discontinued operations - (77 ) Loss before income taxes - (49 ) Income tax expense - - Net loss from discontinued operations, net of tax $ - $ (49 ) There was no depreciation and amortization related to discontinued operations recorded for the three and nine month periods ended September 30, 2017. There were no capital expenditures related to discontinued operations during the three and nine month periods ended September 30, 2017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 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 (also referred to as “GAAP”) 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. Restricted Cash Restricted cash represents amounts held in a collateral account for the Company’s corporate travel and purchasing credit card program. Accounts and Notes Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and bad debt expense to be adjusted accordingly. 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 income (loss)” 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 recorded an other-than-temporary impairment charge related to its equity method investments of $0.7 million in equity method investment loss on its condensed consolidated statements of operations during the nine month period ended September 30, 2018. The Company did not record any impairments related to its equity method investments during the three month period ended September 30, 2018 or three and nine month periods ended September 30, 2017. Note 6 contains additional information on our equity method investments. 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 are classified, as of September 30, 2018 and December 31, 2017. Fair values measured on a recurring basis at September 30, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 5,659 $ - $ - $ 5,659 Restricted cash 350 - - 350 Notes receivable - - 3,768 3,768 Total $ 6,009 $ - $ 3,768 $ 9,777 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 September 30, 2018 is set forth below: Fair value at 9/30/18 Valuation technique Unobservable input Range Notes receivable $ 3,768 Discounted cash flow Default percentage 15 % 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 on a quarterly basis. During 2018, the Company updated its estimated future cash flow assumptions. This resulted in an increase to the fair value of the notes receivable of approximately $1.0 million recorded in other income in the Company’s condensed consolidated statement of operations during the nine months ended September 30, 2018. There was no adjustment to the estimated fair value of the notes receivable during the nine months ended September 30, 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 September 30, 2018, the Company’s long-term debt, including current maturities, had a carrying value of $10.7 million. Based on discounted cash flows using current quoted interest rates (Level 2 of the fair value hierarchy), the estimated fair value at September 30, 2018 was $10.7 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 and nine months ended September 30, 2018, the Company recorded impairment charges of $0.8 million and $2.1 million, respectively, related to the abandonment of internally developed software intangible assets as a loss on disposal of assets in the condensed consolidated statement of operations. Other than the intangible asset impairment, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities during the three and nine months ended September 30, 2018 and 2017. 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),” which was further clarified by ASU 2018-11, “Leases – Targeted Improvements,” issued in July 2018. 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 initially required a modified retrospective transition method under which entities would initially apply Topic 842 at the beginning of the earliest period presented in the financial statements. ASU 2018-11 added an additional optional transition method allowing entities to apply Topic 842 as of the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to adopt ASU 2016-02 using the optional transition method from ASU 2018-11 on January 1, 2019. The Company is evaluating the requirements of Topic 842 and its potential impact on its 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 adopting 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. In addition, the Company expects that the sale-leaseback of Convergent’s Alpharetta, Georgia office facility described in Note 10, which did not qualify for sale-leaseback accounting under the current lease accounting standard, will qualify for sale-leaseback accounting under Topic 842, as Topic 842 eliminates the concept of continuing involvement by the seller-lessee precluding sale-leaseback accounting. 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. In August 2018, the Securities and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule is effective for all filings made on and after November 5, 2018. Given the effective date and proximity to most filers’ quarterly reports, the SEC is not objecting to filers deferring the presentation of changes in stockholders’ equity in their quarterly reports on Forms 10-Q until the quarter that begins after November 5, 2018. The Company anticipates its first presentation of changes in stockholders’ equity will be included in its quarterly report on Form 10-Q for the quarter ended March 31, 2019. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 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 is used when observable prices are 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 nine months ended September 30, 2018 (in thousands): Deferred contract acquisition costs as of January 1, 2018 $ 76 Costs capitalized 12 Amortization (29 ) Impairment (59 ) Deferred contract acquisition costs as of September 30, 2018 $ - During the three months ended September 30, 2018, the Company recorded an impairment charge of $59 thousand for the remaining deferred contract acquisition costs, as they are no longer considered recoverable based on the customer’s recent credit history. 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 September 30, 2018 Adjustments Balances without adoption of ASC 606 Total current assets $ 26,657 $ 68 $ 26,725 Total noncurrent assets 33,174 - 33,174 Total assets $ 59,831 $ 68 $ 59,899 Total current liabilities $ 13,725 $ 83 $ 13,808 Total noncurrent liabilities 13,723 - 13,723 Total liabilities 27,448 83 27,531 Retained earnings 13,884 (15 ) 13,869 Other stockholders’ equity 18,499 - 18,499 Total stockholders’ equity 32,383 (15 ) 32,368 Total liabilities and stockholders’ equity $ 59,831 $ 68 $ 59,899 Condensed Consolidated Statements of Operations: As reported for the three months ended September 30, 2018 Adjustments Balances without adoption of ASC 606 Total net revenues $ 16,453 $ 102 $ 16,555 Total cost of revenues 12,923 81 13,004 Gross profit 3,530 21 3,551 Total selling and administrative expenses 4,523 (60 ) 4,463 Loss on disposal of assets (799 ) - (799 ) Loss from operations (1,792 ) 81 (1,711 ) Other income 561 - 561 Loss before income taxes and equity method investment income (1,231 ) 81 (1,150 ) Income tax expense 497 - 497 Equity method investment income 507 - 507 Net loss $ (1,221 ) $ 81 $ (1,140 ) Net loss per share of common stock: Basic $ (0.08 ) $ (0.08 ) Diluted $ (0.08 ) $ (0.08 ) As reported for the nine months ended September 30, 2018 Adjustments Balances without adoption of ASC 606 Total net revenues $ 46,458 $ 187 $ 46,645 Total cost of revenues 38,788 204 38,992 Gross profit 7,670 (17 ) 7,653 Total selling and administrative expenses 15,939 (78 ) 15,861 Loss on disposal of assets (2,130 ) - (2,130 ) Loss from operations (10,399 ) 61 (10,338 ) Other income 718 - 718 Loss before income taxes and equity method investment loss (9,681 ) 61 (9,620 ) Income tax expense 1,837 - 1,837 Equity method investment loss (244 ) - (244 ) Net loss $ (11,762 ) $ 61 $ (11,701 ) Net loss per share of common stock: Basic $ (0.82 ) $ (0.81 ) Diluted $ (0.82 ) $ (0.81 ) 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 September 30, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Screen system sales $ 5,005 $ - $ - $ - $ 5,005 Digital equipment sales 2,134 630 - (44 ) 2,720 Field maintenance and monitoring services 2,966 1,372 - (129 ) 4,209 Installation services 712 1,069 - - 1,781 Extended warranty sales 213 - - - 213 Advertising - 1,480 - - 1,480 Other 530 499 16 - 1,045 Total $ 11,560 $ 5,050 $ 16 $ (173 ) $ 16,453 The following table disaggregates the Company’s revenue by major source for the nine months ended September 30, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Screen system sales $ 13,240 $ - $ - $ - $ 13,240 Digital equipment sales 7,228 2,020 - (278 ) 8,970 Field maintenance and monitoring services 9,011 5,193 - (344 ) 13,860 Installation services 1,420 3,057 - - 4,477 Extended warranty sales 804 - - - 804 Advertising - 1,948 - - 1,948 Other 1,735 1,375 49 - 3,159 Total $ 33,438 $ 13,593 $ 49 $ (622 ) $ 46,458 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 nine months ended September 30, 2018, substantially all of this balance was earned and recognized as revenue. At September 30, 2018, the unearned revenue amount was $0.6 million. The Company expects to recognize $0.3 million of unearned revenue amounts throughout the rest of 2018, $0.3 million in 2019 and immaterial amounts each year from 2020 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 September 30, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Point in time $ 9,872 $ 3,399 $ - $ (173 ) $ 13,098 Over time 1,688 1,651 16 - 3,355 Total $ 11,560 $ 5,050 $ 16 $ (173 ) $ 16,453 The following table disaggregates the Company’s revenue by the timing of transfer of goods or services to the customer for the nine months ended September 30, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Point in time $ 28,159 $ 7,935 $ - $ (622 ) $ 35,472 Over time 5,279 5,658 49 - 10,986 Total $ 33,438 $ 13,593 $ 49 $ (622 ) $ 46,458 |
Loss Per Common Share
Loss Per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Loss Per Common Share | 5. Loss Per Common Share Basic loss per share has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted loss 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 summarizes the average shares used to compute basic and diluted loss per share: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Weighted average shares outstanding (in thousands): Basic weighted average shares outstanding 14,392 14,310 14,366 14,279 Dilutive effect of stock options and certain non-vested shares of restricted stock - - - - Diluted weighted average shares outstanding 14,392 14,310 14,366 14,279 For the three and nine month periods ended September 30, 2018, options to purchase 330,000 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 63,398 and 166,391 common stock equivalents related to options and restricted stock awards were excluded for the three and nine months ended September 30, 2018, respectively, as their inclusion would be anti-dilutive, thereby decreasing the net losses per share. For the three and nine month periods ended September 30, 2017, options to purchase 470,000 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. An additional 115,754 and 154,161 common stock equivalents related to options and restricted stock awards were excluded for the three and nine months ended September 30, 2017, respectively, as their inclusion would be anti-dilutive, thereby decreasing the net losses per share. |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 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): September 30, 2018 December 31, 2017 Entity Carrying Amount Economic Interest Carrying Amount Economic Interest BK Technologies, Inc. $ - 0.0 % $ 4,473 8.3 % Itasca Capital, Ltd. 3,890 32.3 % 5,870 32.3 % 1347 Property Insurance Holdings, Inc. 8,127 17.4 % 7,710 17.4 % Total $ 12,017 $ 18,053 The following summarizes the income (loss) of equity method investees reflected in the condensed consolidated statements of operations (in thousands): Three months ended September 30, Nine months ended September 30, Entity 2018 2017 2018 2017 BK Technologies, Inc. $ 512 $ 109 $ 120 $ 12 Itasca Capital, Ltd. (28 ) (1,023 ) (967 ) 1,289 1347 Property Insurance Holdings, Inc. 23 161 603 215 Total $ 507 $ (753 ) $ (244 ) $ 1,516 BK Technologies, Inc. (formerly known as RELM Wireless Corporation) (“BKTI”) is a publicly traded company that designs, manufactures and markets two-way land mobile radios, repeaters, base stations and related components and subsystems. Due to the Company’s significant influence, but not controlling interest, in BKTI, the Company’s investment in BKTI was accounted for using the equity method. On September 9, 2018, the Company entered into an agreement with Fundamental Global Investors, LLC (“FGI”), a related party, where the Company sold 1,147,087 shares of common stock of BKTI to FGI for a price of $3.95 per share and total proceeds of approximately $4.5 million. The per share transaction price of $3.95 represented the immediately preceding closing price on the NYSE American stock exchange, and the transaction was approved by the Company’s Audit Committee, comprised of only independent directors. The Company recorded a gain on the sale of the equity method investment of $0.4 million within equity method investment income on the condensed consolidated statement of operations for the three and nine month periods ended September 30, 2018. Prior to the sale of the BKTI common stock, the Company received dividends of $23 thousand and $0.1 million during the three month periods ended September 30, 2018 and 2017, respectively, and received dividends of $0.1 million and $0.2 million during the nine month periods ended September 30, 2018 and 2017, respectively. 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 chairman 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 received a dividend of $0.8 million from Itasca during the three and nine month periods ended September 30, 2018. The Company did not receive any dividends from Itasca during the three and nine month periods ended September 30, 2017. Based on quoted market prices, the market value of the Company’s ownership in Itasca was $2.4 million at September 30, 2018. A $0.7 million other-than-temporary impairment charge for Itasca is included in equity method investment loss on the condensed consolidated statements of operations for the nine month period ended September 30, 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 chairman 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 or nine month periods ended September 30, 2018 and 2017. Based on quoted market prices, the market value of the Company’s ownership in PIH was $7.0 million at September 30, 2018. As of September 30, 2018, the Company’s retained earnings included undistributed earnings from its equity method investees of $1.3 million. The summarized financial information presented below reflects the financial information of the Company’s equity method investees as of September 30, 2018 for the nine months ended June 30, 2018 and 2017, consistent with the Company’s recognition of the results of its equity method investments on a one-quarter lag. For the nine months ended June 30, 2018 2017 (in thousands) Revenue $ 38,977 $ 25,227 Operating income from continuing operations $ 5,489 $ 4,074 Net income $ 2,500 $ 7,012 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets Intangible assets consisted of the following at September 30, 2018 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 79 $ - $ 79 Intangible assets subject to amortization: Software in service 5 2,123 (482 ) 1,641 Product formulation 10 472 (374 ) 98 Total $ 2,674 $ (856 ) $ 1,818 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 $0.5 million and $0.4 million for the nine months ended September 30, 2018 and 2017, respectively. During the three and nine months ended September 30, 2018, the Company also recorded impairment charges of $0.8 million and $2.1 million, respectively, related to abandoned software in service as a loss on disposal of assets in the condensed consolidated statement of operations. 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): Remainder 2018 $ 120 2019 468 2020 459 2021 420 2022 215 Thereafter 57 Total $ 1,739 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 2018 (in thousands): Balance as of December 31, 2017 $ 952 Foreign currency translation (30 ) Balance as of September 30, 2018 $ 922 |
Warranty Reserves
Warranty Reserves | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Warranty accrual at beginning of period $ 449 $ 457 $ 521 $ 645 Charged to expense 18 144 83 319 Claims paid, net of recoveries (26 ) (20 ) (142 ) (392 ) Foreign currency adjustment 8 3 (13 ) 12 Warranty accrual at end of period $ 449 $ 584 $ 449 $ 584 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt The Company’s debt consists of the following (in thousands): September 30, 2018 December 31, 2017 Short-term debt: Strong/MDI installment loan $ 2,607 $ - Revolving line of credit - 500 Current portion of long-term debt 983 65 Total short-term debt 3,590 565 Long-term debt: Sale-leaseback financing 6,827 - Equipment term loans 3,897 - $2 million term loan - 1,968 Total principal balance of long-term debt 10,724 1,968 Less: current portion (983 ) (65 ) Less: unamortized debt issuance costs (20 ) (33 ) Total long-term debt 9,721 1,870 Total short-term and long-term debt $ 13,311 $ 2,435 On May 22, 2018, the Company’s subsidiary, Convergent, entered into an installment payment agreement with an equipment financing company in order to purchase media players and related equipment in an aggregate amount of up to approximately $4.4 million. Installment payments under each contract for purchase of the equipment are due monthly for a period of 60 months. The financing provided in the agreement is secured by the equipment. The borrowings under the agreement are recorded as long-term debt on the Company’s condensed consolidated balance sheet and bear interest at a fixed rate based on the three-year U.S. Treasury Note yield plus a spread at the time of funding. The obligations under the agreement are guaranteed by the Company. At September 30, 2018, the Company had $3.9 million of outstanding borrowings under the agreement, which bear interest at a weighted-average fixed rate of 5.8%. On June 29, 2018, the Company and Convergent completed a sale-leaseback of Convergent’s Alpharetta, Georgia office facility. Convergent sold the Alpharetta facility for $7.0 million in cash and the Company simultaneously entered 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. Due to the Company’s continuing involvement in the building, the transaction was accounted for as a financing rather than a normal leaseback. The net proceeds from the transaction were recorded as a financing liability in long-term debt on the Company’s condensed consolidated balance sheet. Upon closing, the Company’s term loan and revolving line of credit that previously were secured by the Alpharetta facility were repaid, and the related debt agreement was terminated. In addition, the Company issued warrants to the buyer to purchase up to 100,000 shares of Company stock, consisting of warrants to purchase 25,000 shares at each of $10, $12, $14, and $16 purchase prices per share. The warrants have a 10-year maturity. The Company recorded the aggregate $81 thousand fair value of the warrants as additional paid-in capital. The warrants are recorded at grant date fair value, which was calculated based on a Black-Scholes valuation model using the following assumptions: Expected dividend yield at date of grant 0.00 % Risk-free interest rate 2.81 % Expected stock price volatility 37.01 % Expected life of warrants (in years) 7.0 The risk-free interest rate assumption was based on the U.S. Treasury yield curve in effect at the warrant issuance date. The expected volatility was based on historical daily price changes of the Company’s stock for the seven years prior to the warrant issuance date. The expected life of the warrants is the Company’s estimate of the number of years the warrants will be outstanding. 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 lender’s 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. On April 24, 2018, the Company borrowed CDN$3.5 million on the 20-year installment loan. There was CDN$3.38 million of principal outstanding on the 20-year installment loan as of September 30, 2018, which bears variable interest at 4.28%. Strong/MDI was in compliance with its debt covenants as of September 30, 2018. Scheduled repayments are as follows for the Company’s long-term debt outstanding as of September 30, 2018 (in thousands): Remainder of 2018 $ 172 2019 996 2020 1,066 2021 1,141 2022 1,221 Thereafter 6,128 Total $ 10,724 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 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 September 30, 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 2015 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 | 9 Months Ended |
Sep. 30, 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 $0.2 million for each of the three month periods ended September 30, 2018 and 2017, and $0.6 million and $0.5 million for the nine month periods ended September 30, 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 1,121,654 shares remaining available for grant at September 30, 2018. Options The Company granted a total of 387,500 and 435,000 options during the nine month periods ended September 30, 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 nine month periods ended September 30, 2018 and 2017 was $1.82 and $2.42, 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 % 1.99 % Expected stock price volatility 35.65 % 34.85 % 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 nine months ended September 30, 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 (249,000 ) 5.72 Expired (144,300 ) 4.84 Outstanding at September 30, 2018 924,500 $ 5.26 8.5 $ - Exercisable at September 30, 2018 163,000 $ 5.23 7.7 $ - 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 September 30, 2018, 761,500 stock option awards were non-vested. Unrecognized compensation cost related to stock option awards was approximately $1.3 million, which is expected to be recognized over a weighted average period of 3.7 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 September 30, 2018, the total unrecognized compensation cost related to non-vested restricted stock awards was approximately $0.8 million, which is expected to be recognized over a weighted average period of 2.1 years. The following table summarizes restricted stock share activity for the nine months ended September 30, 2018: Number of Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2017 85,000 $ 6.50 Granted - - Shares vested (28,333 ) 6.50 Shares forfeited (10,000 ) 6.50 Non-vested at September 30, 2018 46,667 $ 6.50 The following table summarizes restricted stock unit activity for the nine months ended September 30, 2018: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2017 35,835 $ 6.45 Granted 147,500 4.70 Shares vested (35,835 ) 6.45 Shares forfeited - - Non-vested at September 30, 2018 147,500 $ 4.70 |
Commitments, Contingencies and
Commitments, Contingencies and Concentrations | 9 Months Ended |
Sep. 30, 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 53% and 45% of total consolidated net revenues for the three and nine months ended September 30, 2018, respectively. Trade accounts receivable from these customers represented approximately 45% of net consolidated receivables at September 30, 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 September 30, 2018 are as follows: Capital Leases Operating Leases (in thousands) Remainder 2018 $ 62 $ 450 2019 116 1,770 2020 - 1,545 2021 - 1,416 2022 - 1,081 Thereafter - - Total minimum lease payments $ 178 $ 6,262 Less: Amount representing interest (4 ) Present value of minimum lease payments 174 Less: Current maturities (174 ) Capital lease obligations, net of current portion $ - |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Business Segment Information | 14. Business Segment Information As of September 30, 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 September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Net revenues Cinema $ 11,560 $ 12,290 $ 33,438 $ 38,153 Digital Media 5,050 7,595 13,593 19,277 Other 16 13 49 22 Total segment net revenues 16,626 19,898 47,080 57,452 Eliminations (173 ) (339 ) (622 ) (567 ) Total net revenues 16,453 19,559 46,458 56,885 Gross profit (loss) Cinema 4,415 3,934 11,015 11,565 Digital Media (901 ) 1,372 (3,394 ) 3,445 Other 16 13 49 23 Total gross profit 3,530 5,319 7,670 15,033 Operating (loss) income Cinema 3,383 3,028 7,681 8,593 Digital Media (2,563 ) (84 ) (10,042 ) (2,094 ) Other (82 ) (98 ) (281 ) (289 ) Total segment operating (loss) income 738 2,846 (2,642 ) 6,210 Unallocated general and administrative expenses (1,712 ) (2,298 ) (6,939 ) (7,090 ) Unallocated loss on disposal of assets (818 ) - (818 ) - (Loss) income from operations (1,792 ) 548 (10,399 ) (880 ) Other income (expense) 561 (392 ) 718 (500 ) (Loss) income before income taxes and equity method investment (loss) income $ (1,231 ) $ 156 $ (9,681 ) $ (1,380 ) (In thousands) September 30, 2018 December 31, 2017 Identifiable assets Cinema $ 29,515 $ 27,358 Digital Media 14,274 13,603 Corporate 16,042 18,053 Total $ 59,831 $ 59,014 Summary by Geographical Area Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Net revenue United States $ 12,495 $ 15,349 $ 36,196 $ 44,648 Canada 1,234 1,365 4,148 4,372 Mexico 206 425 1,293 1,164 China 1,581 1,646 2,867 4,543 Latin America 256 461 659 1,263 Europe 456 250 809 427 Asia (excluding China) 160 - 337 216 Other 65 63 149 252 Total $ 16,453 $ 19,559 $ 46,458 $ 56,885 (In thousands) September 30, 2018 December 31, 2017 Identifiable assets United States $ 42,094 $ 37,230 Canada 17,737 21,784 Total $ 59,831 $ 59,014 Net revenues by business segment are to unaffiliated customers. Net sales by geographical area are based on destination of sales. Identifiable assets by geographical area are based on location of facilities. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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 (also referred to as “GAAP”) 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. |
Restricted Cash | Restricted Cash Restricted cash represents amounts held in a collateral account for the Company’s corporate travel and purchasing credit card program. |
Accounts and Notes Receivable | Accounts and Notes Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and bad debt expense to be adjusted accordingly. |
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 income (loss)” 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 recorded an other-than-temporary impairment charge related to its equity method investments of $0.7 million in equity method investment loss on its condensed consolidated statements of operations during the nine month period ended September 30, 2018. The Company did not record any impairments related to its equity method investments during the three month period ended September 30, 2018 or three and nine month periods ended September 30, 2017. Note 6 contains additional information on our equity method investments. |
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 are classified, as of September 30, 2018 and December 31, 2017. Fair values measured on a recurring basis at September 30, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 5,659 $ - $ - $ 5,659 Restricted cash 350 - - 350 Notes receivable - - 3,768 3,768 Total $ 6,009 $ - $ 3,768 $ 9,777 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 September 30, 2018 is set forth below: Fair value at 9/30/18 Valuation technique Unobservable input Range Notes receivable $ 3,768 Discounted cash flow Default percentage 15 % 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 on a quarterly basis. During 2018, the Company updated its estimated future cash flow assumptions. This resulted in an increase to the fair value of the notes receivable of approximately $1.0 million recorded in other income in the Company’s condensed consolidated statement of operations during the nine months ended September 30, 2018. There was no adjustment to the estimated fair value of the notes receivable during the nine months ended September 30, 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 September 30, 2018, the Company’s long-term debt, including current maturities, had a carrying value of $10.7 million. Based on discounted cash flows using current quoted interest rates (Level 2 of the fair value hierarchy), the estimated fair value at September 30, 2018 was $10.7 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 and nine months ended September 30, 2018, the Company recorded impairment charges of $0.8 million and $2.1 million, respectively, related to the abandonment of internally developed software intangible assets as a loss on disposal of assets in the condensed consolidated statement of operations. Other than the intangible asset impairment, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities during the three and nine months ended September 30, 2018 and 2017. |
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),” which was further clarified by ASU 2018-11, “Leases – Targeted Improvements,” issued in July 2018. 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 initially required a modified retrospective transition method under which entities would initially apply Topic 842 at the beginning of the earliest period presented in the financial statements. ASU 2018-11 added an additional optional transition method allowing entities to apply Topic 842 as of the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to adopt ASU 2016-02 using the optional transition method from ASU 2018-11 on January 1, 2019. The Company is evaluating the requirements of Topic 842 and its potential impact on its 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 adopting 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. In addition, the Company expects that the sale-leaseback of Convergent’s Alpharetta, Georgia office facility described in Note 10, which did not qualify for sale-leaseback accounting under the current lease accounting standard, will qualify for sale-leaseback accounting under Topic 842, as Topic 842 eliminates the concept of continuing involvement by the seller-lessee precluding sale-leaseback accounting. 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. In August 2018, the Securities and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule is effective for all filings made on and after November 5, 2018. Given the effective date and proximity to most filers’ quarterly reports, the SEC is not objecting to filers deferring the presentation of changes in stockholders’ equity in their quarterly reports on Forms 10-Q until the quarter that begins after November 5, 2018. The Company anticipates its first presentation of changes in stockholders’ equity will be included in its quarterly report on Form 10-Q for the quarter ended March 31, 2019. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Financial Results of Discontinued Operations | The summary financial results of discontinued operations for the three and nine months ended September 30, 2017 were as follows (in thousands): Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Total net revenues $ - $ 24 Total cost of revenues - 48 Total selling and administrative expenses - 53 Loss from operations of discontinued operations - (77 ) Loss before income taxes - (49 ) Income tax expense - - Net loss from discontinued operations, net of tax $ - $ (49 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Measured Financial Assets and Liabilities | Fair values measured on a recurring basis at September 30, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 5,659 $ - $ - $ 5,659 Restricted cash 350 - - 350 Notes receivable - - 3,768 3,768 Total $ 6,009 $ - $ 3,768 $ 9,777 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 September 30, 2018 is set forth below: Fair value at 9/30/18 Valuation technique Unobservable input Range Notes receivable $ 3,768 Discounted cash flow Default percentage 15 % Discount rate 18 % |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of Changes in Contract Cost | The following table summarizes the changes in the Company’s contract asset balance during the nine months ended September 30, 2018 (in thousands): Deferred contract acquisition costs as of January 1, 2018 $ 76 Costs capitalized 12 Amortization (29 ) Impairment (59 ) Deferred contract acquisition costs as of September 30, 2018 $ - |
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 September 30, 2018 Adjustments Balances without adoption of ASC 606 Total current assets $ 26,657 $ 68 $ 26,725 Total noncurrent assets 33,174 - 33,174 Total assets $ 59,831 $ 68 $ 59,899 Total current liabilities $ 13,725 $ 83 $ 13,808 Total noncurrent liabilities 13,723 - 13,723 Total liabilities 27,448 83 27,531 Retained earnings 13,884 (15 ) 13,869 Other stockholders’ equity 18,499 - 18,499 Total stockholders’ equity 32,383 (15 ) 32,368 Total liabilities and stockholders’ equity $ 59,831 $ 68 $ 59,899 Condensed Consolidated Statements of Operations: As reported for the three months ended September 30, 2018 Adjustments Balances without adoption of ASC 606 Total net revenues $ 16,453 $ 102 $ 16,555 Total cost of revenues 12,923 81 13,004 Gross profit 3,530 21 3,551 Total selling and administrative expenses 4,523 (60 ) 4,463 Loss on disposal of assets (799 ) - (799 ) Loss from operations (1,792 ) 81 (1,711 ) Other income 561 - 561 Loss before income taxes and equity method investment income (1,231 ) 81 (1,150 ) Income tax expense 497 - 497 Equity method investment income 507 - 507 Net loss $ (1,221 ) $ 81 $ (1,140 ) Net loss per share of common stock: Basic $ (0.08 ) $ (0.08 ) Diluted $ (0.08 ) $ (0.08 ) As reported for the nine months ended September 30, 2018 Adjustments Balances without adoption of ASC 606 Total net revenues $ 46,458 $ 187 $ 46,645 Total cost of revenues 38,788 204 38,992 Gross profit 7,670 (17 ) 7,653 Total selling and administrative expenses 15,939 (78 ) 15,861 Loss on disposal of assets (2,130 ) - (2,130 ) Loss from operations (10,399 ) 61 (10,338 ) Other income 718 - 718 Loss before income taxes and equity method investment loss (9,681 ) 61 (9,620 ) Income tax expense 1,837 - 1,837 Equity method investment loss (244 ) - (244 ) Net loss $ (11,762 ) $ 61 $ (11,701 ) Net loss per share of common stock: Basic $ (0.82 ) $ (0.81 ) Diluted $ (0.82 ) $ (0.81 ) |
Major Source [Member] | |
Schedule of Disaggregation of Revenue | The following table disaggregates the Company’s revenue by major source for the three months ended September 30, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Screen system sales $ 5,005 $ - $ - $ - $ 5,005 Digital equipment sales 2,134 630 - (44 ) 2,720 Field maintenance and monitoring services 2,966 1,372 - (129 ) 4,209 Installation services 712 1,069 - - 1,781 Extended warranty sales 213 - - - 213 Advertising - 1,480 - - 1,480 Other 530 499 16 - 1,045 Total $ 11,560 $ 5,050 $ 16 $ (173 ) $ 16,453 The following table disaggregates the Company’s revenue by major source for the nine months ended September 30, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Screen system sales $ 13,240 $ - $ - $ - $ 13,240 Digital equipment sales 7,228 2,020 - (278 ) 8,970 Field maintenance and monitoring services 9,011 5,193 - (344 ) 13,860 Installation services 1,420 3,057 - - 4,477 Extended warranty sales 804 - - - 804 Advertising - 1,948 - - 1,948 Other 1,735 1,375 49 - 3,159 Total $ 33,438 $ 13,593 $ 49 $ (622 ) $ 46,458 |
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 September 30, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Point in time $ 9,872 $ 3,399 $ - $ (173 ) $ 13,098 Over time 1,688 1,651 16 - 3,355 Total $ 11,560 $ 5,050 $ 16 $ (173 ) $ 16,453 The following table disaggregates the Company’s revenue by the timing of transfer of goods or services to the customer for the nine months ended September 30, 2018 (in thousands): Cinema Digital Media Other Eliminations Total Point in time $ 28,159 $ 7,935 $ - $ (622 ) $ 35,472 Over time 5,279 5,658 49 - 10,986 Total $ 33,438 $ 13,593 $ 49 $ (622 ) $ 46,458 |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation Between Basic and Diluted Earnings Per Share | The following table summarizes the average shares used to compute basic and diluted loss per share: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Weighted average shares outstanding (in thousands): Basic weighted average shares outstanding 14,392 14,310 14,366 14,279 Dilutive effect of stock options and certain non-vested shares of restricted stock - - - - Diluted weighted average shares outstanding 14,392 14,310 14,366 14,279 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Equity Method Investments | The following summarizes our equity method investments (dollars in thousands): September 30, 2018 December 31, 2017 Entity Carrying Amount Economic Interest Carrying Amount Economic Interest BK Technologies, Inc. $ - 0.0 % $ 4,473 8.3 % Itasca Capital, Ltd. 3,890 32.3 % 5,870 32.3 % 1347 Property Insurance Holdings, Inc. 8,127 17.4 % 7,710 17.4 % Total $ 12,017 $ 18,053 |
Summary of Income (Loss) of Equity Method Investees | The following summarizes the income (loss) of equity method investees reflected in the condensed consolidated statements of operations (in thousands): Three months ended September 30, Nine months ended September 30, Entity 2018 2017 2018 2017 BK Technologies, Inc. $ 512 $ 109 $ 120 $ 12 Itasca Capital, Ltd. (28 ) (1,023 ) (967 ) 1,289 1347 Property Insurance Holdings, Inc. 23 161 603 215 Total $ 507 $ (753 ) $ (244 ) $ 1,516 |
Summarized Financial Information | For the nine months ended June 30, 2018 2017 (in thousands) Revenue $ 38,977 $ 25,227 Operating income from continuing operations $ 5,489 $ 4,074 Net income $ 2,500 $ 7,012 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following at September 30, 2018 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 79 $ - $ 79 Intangible assets subject to amortization: Software in service 5 2,123 (482 ) 1,641 Product formulation 10 472 (374 ) 98 Total $ 2,674 $ (856 ) $ 1,818 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): Remainder 2018 $ 120 2019 468 2020 459 2021 420 2022 215 Thereafter 57 Total $ 1,739 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 2018 (in thousands): Balance as of December 31, 2017 $ 952 Foreign currency translation (30 ) Balance as of September 30, 2018 $ 922 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Product Warranty Liability | The following table summarizes warranty activity for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Warranty accrual at beginning of period $ 449 $ 457 $ 521 $ 645 Charged to expense 18 144 83 319 Claims paid, net of recoveries (26 ) (20 ) (142 ) (392 ) Foreign currency adjustment 8 3 (13 ) 12 Warranty accrual at end of period $ 449 $ 584 $ 449 $ 584 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt consists of the following (in thousands): September 30, 2018 December 31, 2017 Short-term debt: Strong/MDI installment loan $ 2,607 $ - Revolving line of credit - 500 Current portion of long-term debt 983 65 Total short-term debt 3,590 565 Long-term debt: Sale-leaseback financing 6,827 - Equipment term loans 3,897 - $2 million term loan - 1,968 Total principal balance of long-term debt 10,724 1,968 Less: current portion (983 ) (65 ) Less: unamortized debt issuance costs (20 ) (33 ) Total long-term debt 9,721 1,870 Total short-term and long-term debt $ 13,311 $ 2,435 |
Schedule of Warrants Issued, Fair Value Assumptions, Method Used | The warrants are recorded at grant date fair value, which was calculated based on a Black-Scholes valuation model using the following assumptions: Expected dividend yield at date of grant 0.00 % Risk-free interest rate 2.81 % Expected stock price volatility 37.01 % Expected life of warrants (in years) 7.0 |
Schedule of Long-term Debt Maturities | Scheduled repayments are as follows for the Company’s long-term debt outstanding as of September 30, 2018 (in thousands): Remainder of 2018 $ 172 2019 996 2020 1,066 2021 1,141 2022 1,221 Thereafter 6,128 Total $ 10,724 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 9 Months Ended |
Sep. 30, 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 % 1.99 % Expected stock price volatility 35.65 % 34.85 % Expected life of options (in years) 6.0 6.0 |
Summary of Stock Options Activities | The following table summarizes stock option activity for the nine months ended September 30, 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 (249,000 ) 5.72 Expired (144,300 ) 4.84 Outstanding at September 30, 2018 924,500 $ 5.26 8.5 $ - Exercisable at September 30, 2018 163,000 $ 5.23 7.7 $ - |
Summary of Restricted Stock Activity | The following table summarizes restricted stock share activity for the nine months ended September 30, 2018: Number of Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2017 85,000 $ 6.50 Granted - - Shares vested (28,333 ) 6.50 Shares forfeited (10,000 ) 6.50 Non-vested at September 30, 2018 46,667 $ 6.50 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes restricted stock unit activity for the nine months ended September 30, 2018: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2017 35,835 $ 6.45 Granted 147,500 4.70 Shares vested (35,835 ) 6.45 Shares forfeited - - Non-vested at September 30, 2018 147,500 $ 4.70 |
Commitments, Contingencies an_2
Commitments, Contingencies and Concentrations (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2018 are as follows: Capital Leases Operating Leases (in thousands) Remainder 2018 $ 62 $ 450 2019 116 1,770 2020 - 1,545 2021 - 1,416 2022 - 1,081 Thereafter - - Total minimum lease payments $ 178 $ 6,262 Less: Amount representing interest (4 ) Present value of minimum lease payments 174 Less: Current maturities (174 ) Capital lease obligations, net of current portion $ - |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Summary by Business Segments Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Net revenues Cinema $ 11,560 $ 12,290 $ 33,438 $ 38,153 Digital Media 5,050 7,595 13,593 19,277 Other 16 13 49 22 Total segment net revenues 16,626 19,898 47,080 57,452 Eliminations (173 ) (339 ) (622 ) (567 ) Total net revenues 16,453 19,559 46,458 56,885 Gross profit (loss) Cinema 4,415 3,934 11,015 11,565 Digital Media (901 ) 1,372 (3,394 ) 3,445 Other 16 13 49 23 Total gross profit 3,530 5,319 7,670 15,033 Operating (loss) income Cinema 3,383 3,028 7,681 8,593 Digital Media (2,563 ) (84 ) (10,042 ) (2,094 ) Other (82 ) (98 ) (281 ) (289 ) Total segment operating (loss) income 738 2,846 (2,642 ) 6,210 Unallocated general and administrative expenses (1,712 ) (2,298 ) (6,939 ) (7,090 ) Unallocated loss on disposal of assets (818 ) - (818 ) - (Loss) income from operations (1,792 ) 548 (10,399 ) (880 ) Other income (expense) 561 (392 ) 718 (500 ) (Loss) income before income taxes and equity method investment (loss) income $ (1,231 ) $ 156 $ (9,681 ) $ (1,380 ) |
Reconciliation of Assets from Segment to Consolidated | (In thousands) September 30, 2018 December 31, 2017 Identifiable assets Cinema $ 29,515 $ 27,358 Digital Media 14,274 13,603 Corporate 16,042 18,053 Total $ 59,831 $ 59,014 |
Schedule of Segment Reporting Information by Geographic Area | Summary by Geographical Area Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Net revenue United States $ 12,495 $ 15,349 $ 36,196 $ 44,648 Canada 1,234 1,365 4,148 4,372 Mexico 206 425 1,293 1,164 China 1,581 1,646 2,867 4,543 Latin America 256 461 659 1,263 Europe 456 250 809 427 Asia (excluding China) 160 - 337 216 Other 65 63 149 252 Total $ 16,453 $ 19,559 $ 46,458 $ 56,885 |
Summary of Identifiable Assets by Geographical Area | (In thousands) September 30, 2018 December 31, 2017 Identifiable assets United States $ 42,094 $ 37,230 Canada 17,737 21,784 Total $ 59,831 $ 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) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Total net revenues | $ 24 | |
Total cost of revenues | 48 | |
Total selling and administrative expenses | 53 | |
Loss from operations of discontinued operations | (77) | |
Loss before income taxes | (49) | |
Income tax expense | ||
Net loss from discontinued operations, net of tax | $ (49) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Other than temporary impairment | $ 700 | ||||
Fair value adjustment of notes receivable | $ 802 | 953 | |||
Long-term debt | 10,724 | 10,724 | $ 1,968 | ||
Impairment charges on intangible asset | 800 | 2,100 | |||
Adjustment to Retained Earnings - Deferred Contract Acquisition Costs [Member] | |||||
Change in accounting principle effect of adoption quantification | 76 | ||||
Level 2 [Member] | |||||
Estimated fair value of long term debt | $ 10,700 | $ 10,700 | |||
Unsecured Notes Receivable Arrangements [Member] | CDF2 Holdings, LLC [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 Accoun_5
Summary of Significant Accounting Policies - Schedule of Fair Value Measured Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Cash and cash equivalents | $ 5,659 | $ 4,870 | |
Restricted cash | 350 | ||
Notes receivable | 3,768 | 2,815 | |
Total | 9,777 | 7,685 | |
Level 1 [Member] | |||
Cash and cash equivalents | 5,659 | 4,870 | |
Restricted cash | 350 | ||
Notes receivable | |||
Total | 6,009 | 4,870 | |
Level 2 [Member] | |||
Cash and cash equivalents | |||
Restricted cash | |||
Notes receivable | |||
Total | |||
Level 3 [Member] | |||
Cash and cash equivalents | |||
Restricted cash | |||
Notes receivable | 3,768 | 2,815 | |
Total | $ 3,768 | $ 2,815 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Quantitative Information About Company's Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Note receivable | $ 3,768 | $ 2,815 |
Valuation Technique | Discounted cash flow | |
Default Percentage [Member] | ||
Unobservable input | 15.00% | |
Discount Rate [Member] | ||
Unobservable input | 18.00% |
Revenue (Details Narrative)
Revenue (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Impairment | $ 59 | $ (59) |
Contract liability (or deferred revenue) | 600 | 600 |
January 1, 2018 [Member] | ||
Contract liability (or deferred revenue) | $ 800 | 800 |
2018 [Member] | ||
Unearned revenue reported in deferred revenue and customer deposits | 300 | |
2019 [Member] | ||
Unearned revenue reported in deferred revenue and customer deposits | $ 300 | |
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 | |
Minimum [Member] | ||
Capitalized contract cost, amortization period | 1 year | 1 year |
Maximum [Member] | ||
Capitalized contract cost, amortization period | 5 years | 5 years |
Revenue - Schedule of Changes i
Revenue - Schedule of Changes in Contract Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred contract acquisition costs, beginning balance | $ 76 | |
Costs capitalized | 12 | |
Amortization | (29) | |
Impairment | $ 59 | (59) |
Deferred contract acquisition costs, ending balance |
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 | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Total current assets | $ 26,657 | $ 26,657 | $ 22,242 | ||
Total noncurrent assets | 33,174 | 33,174 | |||
Total assets | 59,831 | 59,831 | 59,014 | ||
Total current liabilities | 13,725 | 13,725 | 8,680 | ||
Total noncurrent liabilities | 13,723 | 13,723 | |||
Total liabilities | 27,448 | 27,448 | 14,892 | ||
Retained earnings | 13,884 | 13,884 | 25,570 | ||
Other stockholders' equity | 18,499 | 18,499 | |||
Total stockholders’ equity | 32,383 | 32,383 | 44,122 | ||
Total liabilities and stockholders’ equity | 59,831 | 59,831 | $ 59,014 | ||
Total net revenues | 16,453 | $ 19,559 | 46,458 | $ 56,885 | |
Total cost of revenues | 12,923 | 14,240 | 38,788 | 41,852 | |
Gross profit | 3,530 | 5,319 | 7,670 | 15,033 | |
Total selling and administrative expenses | 4,523 | 4,771 | 15,939 | 15,913 | |
Loss on disposal of assets | (799) | (2,130) | |||
Loss from operations | (1,792) | 548 | (10,399) | (880) | |
Other income | 561 | (392) | 718 | (500) | |
Loss before income taxes and equity method investment loss | (1,231) | 156 | (9,681) | (1,380) | |
Income tax expense | 497 | 440 | 1,837 | 2,709 | |
Equity method investment loss | 507 | (753) | (244) | 1,516 | |
Net loss | $ (1,221) | $ (1,037) | $ (11,762) | $ (2,622) | |
Net loss per share of common stock: Basic | $ (0.08) | $ (0.07) | $ (0.82) | $ (0.18) | |
Net loss per share of common stock: Diluted | $ (0.08) | $ (0.07) | $ (0.82) | $ (0.18) | |
Balances without Adoption of ASC 606 [Member] | |||||
Total current assets | $ 26,725 | $ 26,725 | |||
Total noncurrent assets | 33,174 | 33,174 | |||
Total assets | 59,899 | 59,899 | |||
Total current liabilities | 13,808 | 13,808 | |||
Total noncurrent liabilities | 13,723 | 13,723 | |||
Total liabilities | 27,531 | 27,531 | |||
Retained earnings | 13,869 | 13,869 | |||
Other stockholders' equity | 18,499 | 18,499 | |||
Total stockholders’ equity | 32,368 | 32,368 | |||
Total liabilities and stockholders’ equity | 59,899 | 59,899 | |||
Total net revenues | 16,555 | 46,645 | |||
Total cost of revenues | 13,004 | 38,992 | |||
Gross profit | 3,551 | 7,653 | |||
Total selling and administrative expenses | 4,463 | 15,861 | |||
Loss on disposal of assets | (799) | (2,130) | |||
Loss from operations | (1,711) | (10,338) | |||
Other income | 561 | 718 | |||
Loss before income taxes and equity method investment loss | (1,150) | (9,620) | |||
Income tax expense | 497 | 1,837 | |||
Equity method investment loss | 507 | (244) | |||
Net loss | $ (1,140) | $ (11,701) | |||
Net loss per share of common stock: Basic | $ (0.08) | $ (0.81) | |||
Net loss per share of common stock: Diluted | $ (0.08) | $ (0.81) | |||
Difference Between Revenue Guidance in Effect Before and After Topic 606 [Member] | Adjustments for New Accounting Pronouncement [Member] | |||||
Total current assets | $ 68 | $ 68 | |||
Total noncurrent assets | |||||
Total assets | 68 | 68 | |||
Total current liabilities | 83 | 83 | |||
Total noncurrent liabilities | |||||
Total liabilities | 83 | 83 | |||
Retained earnings | (15) | (15) | |||
Other stockholders' equity | |||||
Total stockholders’ equity | (15) | (15) | |||
Total liabilities and stockholders’ equity | 68 | 68 | |||
Total net revenues | 102 | 187 | |||
Total cost of revenues | 81 | 204 | |||
Gross profit | 21 | (17) | |||
Total selling and administrative expenses | (60) | (78) | |||
Loss on disposal of assets | |||||
Loss from operations | 81 | 61 | |||
Other income | |||||
Loss before income taxes and equity method investment loss | 81 | 61 | |||
Income tax expense | |||||
Equity method investment loss | |||||
Net loss | $ 81 | $ 61 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Major Source) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total net revenues | $ 16,453 | $ 19,559 | $ 46,458 | $ 56,885 |
Screen System Sales [Member] | ||||
Total net revenues | 5,005 | 13,240 | ||
Digital Equipment Sales [Member] | ||||
Total net revenues | 2,720 | 8,970 | ||
Field Maintenance and Monitoring Services [Member] | ||||
Total net revenues | 4,209 | 13,860 | ||
Installation Services [Member] | ||||
Total net revenues | 1,781 | 4,477 | ||
Extended Warranty Sales [Member] | ||||
Total net revenues | 213 | 804 | ||
Advertising [Member] | ||||
Total net revenues | 1,480 | 1,948 | ||
Other [Member] | ||||
Total net revenues | 1,045 | 3,159 | ||
Cinema [Member] | ||||
Total net revenues | 11,560 | 33,438 | ||
Cinema [Member] | Screen System Sales [Member] | ||||
Total net revenues | 5,005 | 13,240 | ||
Cinema [Member] | Digital Equipment Sales [Member] | ||||
Total net revenues | 2,134 | 7,228 | ||
Cinema [Member] | Field Maintenance and Monitoring Services [Member] | ||||
Total net revenues | 2,966 | 9,011 | ||
Cinema [Member] | Installation Services [Member] | ||||
Total net revenues | 712 | 1,420 | ||
Cinema [Member] | Extended Warranty Sales [Member] | ||||
Total net revenues | 213 | 804 | ||
Cinema [Member] | Advertising [Member] | ||||
Total net revenues | ||||
Cinema [Member] | Other [Member] | ||||
Total net revenues | 530 | 1,735 | ||
Digital Media [Member] | ||||
Total net revenues | 5,050 | 13,593 | ||
Digital Media [Member] | Screen System Sales [Member] | ||||
Total net revenues | ||||
Digital Media [Member] | Digital Equipment Sales [Member] | ||||
Total net revenues | 630 | 2,020 | ||
Digital Media [Member] | Field Maintenance and Monitoring Services [Member] | ||||
Total net revenues | 1,372 | 5,193 | ||
Digital Media [Member] | Installation Services [Member] | ||||
Total net revenues | 1,069 | 3,057 | ||
Digital Media [Member] | Extended Warranty Sales [Member] | ||||
Total net revenues | ||||
Digital Media [Member] | Advertising [Member] | ||||
Total net revenues | 1,480 | 1,948 | ||
Digital Media [Member] | Other [Member] | ||||
Total net revenues | 499 | 1,375 | ||
Other [Member] | ||||
Total net revenues | 16 | 49 | ||
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 | ||||
Other [Member] | Advertising [Member] | ||||
Total net revenues | ||||
Other [Member] | Other Revenue [Member] | ||||
Total net revenues | 16 | 49 | ||
Eliminations [Member] | ||||
Total net revenues | (173) | (622) | ||
Eliminations [Member] | Screen System Sales [Member] | ||||
Total net revenues | ||||
Eliminations [Member] | Digital Equipment Sales [Member] | ||||
Total net revenues | (44) | (278) | ||
Eliminations [Member] | Field Maintenance and Monitoring Services [Member] | ||||
Total net revenues | (129) | (344) | ||
Eliminations [Member] | Installation Services [Member] | ||||
Total net revenues | ||||
Eliminations [Member] | Extended Warranty Sales [Member] | ||||
Total net revenues | ||||
Eliminations [Member] | Advertising [Member] | ||||
Total net revenues | ||||
Eliminations [Member] | Other [Member] | ||||
Total net revenues |
Revenue - Schedule of Disaggr_2
Revenue - Schedule of Disaggregation of Revenue (Timing of Transfer) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total net revenues | $ 16,453 | $ 19,559 | $ 46,458 | $ 56,885 |
Transferred at Point in Time [Member] | ||||
Total net revenues | 13,098 | 35,472 | ||
Transferred Over Time [Member] | ||||
Total net revenues | 3,355 | 10,986 | ||
Cinema [Member] | ||||
Total net revenues | 11,560 | 33,438 | ||
Cinema [Member] | Transferred at Point in Time [Member] | ||||
Total net revenues | 9,872 | 28,159 | ||
Cinema [Member] | Transferred Over Time [Member] | ||||
Total net revenues | 1,688 | 5,279 | ||
Digital Media [Member] | ||||
Total net revenues | 5,050 | 13,593 | ||
Digital Media [Member] | Transferred at Point in Time [Member] | ||||
Total net revenues | 3,399 | 7,935 | ||
Digital Media [Member] | Transferred Over Time [Member] | ||||
Total net revenues | 1,651 | 5,658 | ||
Other [Member] | ||||
Total net revenues | 16 | 49 | ||
Other [Member] | Transferred at Point in Time [Member] | ||||
Total net revenues | ||||
Other [Member] | Transferred Over Time [Member] | ||||
Total net revenues | 16 | 49 | ||
Eliminations [Member] | ||||
Total net revenues | (173) | (622) | ||
Eliminations [Member] | Transferred at Point in Time [Member] | ||||
Total net revenues | (173) | (622) | ||
Eliminations [Member] | Transferred Over Time [Member] | ||||
Total net revenues |
Loss Per Common Share (Details
Loss Per Common Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 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 | 330,000 | 470,000 | 330,000 | 470,000 |
Common Stock Equivalents [Member] | ||||
Anti dilutive securities excluded from computation of earnings per share | 63,398 | 115,754 | 166,391 | 154,161 |
Loss Per Common Share - Schedul
Loss Per Common Share - Schedule of Reconciliation Between Basic and Diluted Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding | 14,392,000 | 14,310,000 | 14,366,000 | 14,279,000 |
Dilutive effect of stock options and certain non-vested shares of restricted stock | ||||
Diluted weighted average shares outstanding | 14,392,000 | 14,310,000 | 14,366,000 | 14,279,000 |
Equity Method Investments (Deta
Equity Method Investments (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Sep. 09, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Proceeds from sale of equity method investments | $ 4,531 | |||||
Gain on sale of equity method investment | $ 400 | 400 | ||||
Other than temporary impairment charge | 700 | |||||
Retained earnings undistributed earnings from our equity method investees | 1,300 | 1,300 | ||||
BK Technologies, Inc. [Member] | ||||||
Number of common stock sold | 1,147,087 | |||||
Sale of stock price per share | $ 3.95 | |||||
Proceeds from sale of equity method investments | $ 4,500 | |||||
Dividend received | $ 23 | $ 100 | $ 100 | $ 200 | ||
Equity method ownership percentage | 0.00% | 0.00% | 8.30% | |||
Itasca Capital Ltd [Member] | ||||||
Dividend received | $ 800 | $ 800 | ||||
Equity method ownership percentage | 32.30% | 32.30% | 32.30% | |||
Quoted market value of the company's ownership | $ 2,400 | $ 2,400 | ||||
Other than temporary impairment charge | $ 700 | |||||
1347 Property Insurance Holdings Inc [Member] | ||||||
Equity method ownership percentage | 17.40% | 17.40% | 17.40% | |||
Quoted market value of the company's ownership | $ 7,000 | $ 7,000 | ||||
1347 Property Insurance Holdings Inc [Member] | Minimum [Member] | ||||||
Combined equity ownership percentage | 20.00% | 20.00% |
Equity Method Investments - Sum
Equity Method Investments - Summary of Equity Method Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Equity investment, Carrying Amount | $ 12,017 | $ 18,053 |
BK Technologies, Inc. [Member] | ||
Equity investment, Carrying Amount | $ 4,473 | |
Equity investment, Economic Interest | 0.00% | 8.30% |
Itasca Capital Ltd [Member] | ||
Equity investment, Carrying Amount | $ 3,890 | $ 5,870 |
Equity investment, Economic Interest | 32.30% | 32.30% |
1347 Property Insurance Holdings Inc [Member] | ||
Equity investment, Carrying Amount | $ 8,127 | $ 7,710 |
Equity investment, Economic Interest | 17.40% | 17.40% |
Equity Method Investments - S_2
Equity Method Investments - Summary of Income (Loss) of Equity Method Investees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Equity method investment income | $ 507 | $ (753) | $ (244) | $ 1,516 |
Equity Method Investments [Member] | ||||
Equity method investment income | 507 | (753) | (244) | 1,516 |
BK Technologies, Inc. [Member] | Equity Method Investments [Member] | ||||
Equity method investment income | 512 | 109 | 120 | 12 |
Itasca Capital Ltd [Member] | Equity Method Investments [Member] | ||||
Equity method investment income | (28) | (1,023) | (967) | 1,289 |
1347 Property Insurance Holdings Inc [Member] | Equity Method Investments [Member] | ||||
Equity method investment income | $ 23 | $ 161 | $ 603 | $ 215 |
Equity Method Investments - S_3
Equity Method Investments - Summarized Financial Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Revenue | $ 38,977 | $ 25,227 |
Operating income from continuing operations | 5,489 | 4,074 |
Net income | $ 2,500 | $ 7,012 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 500 | $ 400 | |
Impairment charges on intangible asset | $ 800 | $ 2,100 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Intangible assets, Gross | $ 2,674 | $ 4,920 |
Intangible assets, Accumulated amortization | (856) | (948) |
Intangible assets, Net | $ 1,818 | $ 3,972 |
Software in Service [Member] | ||
Intangible assets, Useful life | 5 years | 5 years |
Intangible assets, Gross | $ 2,123 | $ 3,191 |
Intangible assets, Accumulated amortization | (482) | (597) |
Intangible assets, Net | $ 1,641 | $ 2,594 |
Product Formulation [Member] | ||
Intangible assets, Useful life | 10 years | 10 years |
Intangible assets, Gross | $ 472 | $ 486 |
Intangible assets, Accumulated amortization | (374) | (351) |
Intangible assets, Net | 98 | 135 |
Software in Development [Member] | ||
Intangible assets, Gross | 79 | 1,243 |
Intangible assets, Accumulated amortization | ||
Intangible assets, Net | $ 79 | $ 1,243 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Total | $ 1,818 | $ 3,972 |
Intangible Assets [Member] | ||
Remainder 2,018 | 120 | |
2,019 | 468 | |
2,020 | 459 | |
2,021 | 420 | |
2,022 | 215 | |
Thereafter | 57 | |
Total | $ 1,739 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance | $ 952 |
Foreign currency translation | (30) |
Balance | $ 922 |
Warranty Reserves - Schedule of
Warranty Reserves - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Extended Product Warranty Disclosure [Abstract] | ||||
Warranty accrual at beginning of period | $ 449 | $ 457 | $ 521 | $ 645 |
Charged to expense | 18 | 144 | 83 | 319 |
Claims paid, net of recoveries | (26) | (20) | (142) | (392) |
Foreign currency adjustment | 8 | 3 | (13) | 12 |
Warranty accrual at end of period | $ 449 | $ 584 | $ 449 | $ 584 |
Debt (Details Narrative)
Debt (Details Narrative) $ / shares in Units, $ in Thousands, $ in Thousands | Jun. 29, 2018USD ($)$ / sharesshares | May 22, 2018USD ($) | Apr. 24, 2018CAD ($) | Sep. 05, 2017CAD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018CAD ($) | Dec. 31, 2017USD ($) |
Long-term debt | $ 10,724 | $ 1,968 | ||||||
Agreed to sale leaseback in cash | 7,000 | |||||||
Warrant maturity term | 10 years | |||||||
Fair value of warrants | $ 81 | |||||||
Short term debt | $ 2,607 | $ 500 | ||||||
20-year Installment Loan [Member] | ||||||||
Loan term | 20 years | 20 years | ||||||
Debt bearing interest fixed rate | 4.28% | 4.28% | ||||||
Canadian Dollar [Member] | 20-year Installment Loan [Member] | ||||||||
Short term debt | $ 3,500 | $ 3,380 | ||||||
Buyer [Member] | Maximum [Member] | ||||||||
Number of warrants to purchase shares | shares | 100,000 | |||||||
Tranche One [Member] | ||||||||
Number of warrants to purchase shares | shares | 25,000 | |||||||
Warrants to purchase price, per share | $ / shares | $ 10 | |||||||
Tranche Two [Member] | ||||||||
Number of warrants to purchase shares | shares | 25,000 | |||||||
Warrants to purchase price, per share | $ / shares | $ 12 | |||||||
Tranche Three [Member] | ||||||||
Number of warrants to purchase shares | shares | 25,000 | |||||||
Warrants to purchase price, per share | $ / shares | $ 14 | |||||||
Tranche Four [Member] | ||||||||
Number of warrants to purchase shares | shares | 25,000 | |||||||
Warrants to purchase price, per share | $ / shares | $ 16 | |||||||
Alpharetta Facility [Member] | ||||||||
Agreed to sale leaseback in cash | $ 7,000 | |||||||
Sale leaseback term | P10Y | |||||||
Sale leaseback transaction, annual rental payments | $ 600 | |||||||
Sale leaseback escalating rate | 2.00% | |||||||
Installment Payment Agreement [Member] | ||||||||
Line of credit Facility, maximum borrowing capacity | $ 4,400 | |||||||
Debt description | The borrowings under the agreement are recorded as long-term debt on the Company's condensed consolidated balance sheet and bear interest at a fixed rate based on the three-year U.S. Treasury Note yield plus a spread at the time of funding. | |||||||
Long-term debt | $ 3,900 | |||||||
Weighted average fixed rate | 5.80% | 5.80% | ||||||
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] | 20-year Installment Loan [Member] | ||||||||
Loan term | 20 years | |||||||
Demand Credit Agreement [Member] | 20-year Installment Loan [Member] | Prime Rate [Member] | ||||||||
Interest rate on lender of installment loans | 0.50% | |||||||
Demand Credit Agreement [Member] | 5-year Installment Loan [Member] | ||||||||
Loan term | 5 years | |||||||
Demand Credit Agreement [Member] | 5-year Installment Loan [Member] | Prime Rate [Member] | ||||||||
Interest rate on lender of installment loans | 0.50% | |||||||
Demand Credit Agreement [Member] | Canadian Dollar [Member] | ||||||||
Minimum effective equity | $ 8,000 | |||||||
Demand Credit Agreement [Member] | Canadian Dollar [Member] | 20-year Installment Loan [Member] | ||||||||
Line of credit Facility, maximum borrowing capacity | 6,000 | |||||||
Demand Credit Agreement [Member] | Canadian Dollar [Member] | 5-year Installment Loan [Member] | ||||||||
Line of credit Facility, maximum borrowing capacity | 500 | |||||||
Demand Credit Agreement [Member] | Line of Credit [Member] | Canadian Dollar [Member] | ||||||||
Line of credit Facility, maximum borrowing capacity | $ 3,500 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Strong/MDI installment loan | $ 2,607 | |
Revolving line of credit | 500 | |
Current portion of long-term debt | 983 | 65 |
Total short-term debt | 3,590 | 565 |
Total principal balance of long-term debt | 10,724 | 1,968 |
Less: current portion | (983) | (65) |
Less: unamortized debt issuance costs | (20) | (33) |
Total long-term debt | 9,721 | 1,870 |
Total short-term and long-term debt | 13,311 | 2,435 |
Sale-leaseback Financing [Member] | ||
Total principal balance of long-term debt | 6,827 | |
Equipment Term Loans [Member] | ||
Total principal balance of long-term debt | 3,897 | |
$2 Million Term Loan [Member] | ||
Total principal balance of long-term debt | $ 1,968 |
Debt - Schedule of Debt (Deta_2
Debt - Schedule of Debt (Details) (Parenthetical) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
Debt instrument, face amount | $ 2,000 |
Debt - Schedule of Warrants Iss
Debt - Schedule of Warrants Issued, Fair Value Assumptions, Method Used (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Expected Dividend Yield at Date of Grant [Member] | |
Fair value assumptions, measurement input, percentages | 0.00% |
Risk - Free Interest Rate [Member] | |
Fair value assumptions, measurement input, percentages | 2.81% |
Expected Stock Price Volatility [Member] | |
Fair value assumptions, measurement input, percentages | 37.01% |
Expected Life of Warrants [Member] | |
Fair value assumptions, measurement input, term | 7 years |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Remainder of 2018 | $ 172 | |
2,019 | 996 | |
2,020 | 1,066 | |
2,021 | 1,141 | |
2,022 | 1,221 | |
Thereafter | 6,128 | |
Total | $ 10,724 | $ 1,968 |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Number of shares granted | 387,500 | |||
Restricted Stock [Member] | ||||
Compensation cost expected to be recognized, weighted average period | 2 years 1 month 6 days | |||
Unrecognized for restricted stock, value | $ 800 | $ 800 | ||
Stock Options [Member] | ||||
Number of shares granted | 387,500 | 435,000 | ||
Share based compensation arrangement by share based payment award options grants in period weighted average grant date fair value | $ 1.82 | $ 2.42 | ||
Period used to calculated expected volatility | 6 years | |||
Share-based compensation arrangement by share-based payment award, options, non-vested, number | 761,500 | 761,500 | ||
Total unrecognized compensation cost related to stock option awards | $ 1,300 | $ 1,300 | ||
Compensation cost expected to be recognized, weighted average period | 3 years 8 months 12 days | |||
Year 2017 Plan [Member] | ||||
Number of shares authorized for issuance | 1,371,189 | 1,371,189 | ||
Share based compensation arrangement by share based payment award number of shares available for grant | 1,121,654 | 1,121,654 | ||
Selling, General and Administrative Expenses [Member] | ||||
Share based compensation expense | $ 200 | $ 200 | $ 600 | $ 500 |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Weighted Average Assumptions for Fair Value of Stock Options Granted During the Period (Details) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 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% | 1.99% |
Expected stock price volatility | 35.65% | 34.85% |
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 | 9 Months Ended |
Sep. 30, 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 | (249,000) |
Number of Options, Expired | shares | (144,300) |
Number of Options, Outstanding Ending Balance | shares | 924,500 |
Number of Options, Exercisable | shares | 163,000 |
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 | 5.72 |
Weighted Average Exercise Price Per Share, Expired | $ / shares | 4.84 |
Weighted Average Exercise Price Per Share, Outstanding Ending Balance | $ / shares | 5.26 |
Weighted Average Exercise Price Per Share, Exercisable | $ / shares | $ 5.23 |
Weighted Average Remaining Contractual Term, Beginning Balance | 8 years 8 months 12 days |
Weighted Average Remaining Contractual Term, Ending Balance | 8 years 6 months |
Weighted Average Remaining Contractual Term, Exercisable | 7 years 8 months 12 days |
Aggregate Intrinsic Value, Beginning Balance | $ | $ 150 |
Aggregate Intrinsic Value, Ending Balance | $ | |
Aggregate Intrinsic Value, Exercisable | $ |
Stock Compensation - Summary _2
Stock Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock Shares [Member] | 9 Months Ended |
Sep. 30, 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 | (10,000) |
Number of Restricted Stock, Non-vested ending balance | shares | 46,667 |
Weighted Average Grant Date Fair Value, Non-vested Beginning Balance | $ / shares | $ 6.50 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 6.50 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 6.50 |
Weighted Average Grant Date Fair Value, Non-vested Ending Balance | $ / shares | $ 6.50 |
Stock Compensation - Schedule_2
Stock Compensation - Schedule of Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Restricted Stock, Non-vested beginning balance | shares | 35,835 |
Number of Restricted Stock, Granted | shares | 147,500 |
Number of Restricted Stock, vested | shares | (35,835) |
Number of Restricted Stock, forfeited | shares | |
Number of Restricted Stock, Non-vested ending balance | shares | 147,500 |
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 | 6.45 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant Date Fair Value, Non-vested ending balance | $ / shares | $ 4.70 |
Commitments, Contingencies an_3
Commitments, Contingencies and Concentrations (Details Narrative) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Operating lease expire, term | expiring through 2022 | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
Concentration risk, percentage | 53.00% | 45.00% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||
Concentration risk, percentage | 45.00% |
Commitments, Contingencies an_4
Commitments, Contingencies and Concentrations - Schedule of Capital and Operating Leases Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Capital Leases, Remainder 2018 | $ 62 |
Capital Leases, 2019 | 116 |
Capital Leases, 2020 | |
Capital Leases, 2021 | |
Capital Leases, 2022 | |
Capital Leases, Thereafter | |
Total minimum Capital lease payments | 178 |
Less: Amount representing interest | (4) |
Present value of minimum lease payments | 174 |
Less: Current maturities | (174) |
Capital lease obligations, net of current portion | |
Operating Leases, Remainder 2018 | 450 |
Operating Leases, 2019 | 1,770 |
Operating Leases, 2020 | 1,545 |
Operating Leases, 2021 | 1,416 |
Operating Leases, 2022 | 1,081 |
Operating Leases, Thereafter | |
Total minimum Operating lease payments | $ 6,262 |
Business Segment Information (D
Business Segment Information (Details Narrative) | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 16,453 | $ 19,559 | $ 46,458 | $ 56,885 |
Total gross profit | 3,530 | 5,319 | 7,670 | 15,033 |
Loss from operations | 1,792 | (548) | 10,399 | 880 |
Other income (expense) | 6 | (35) | (9) | (24) |
Loss before taxes and equity method investment (loss) income | 1,231 | (156) | 9,681 | 1,380 |
Business Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total segment net revenue | 16,626 | 19,898 | 47,080 | 57,452 |
Eliminations | (173) | (339) | (622) | (567) |
Total net revenue | 16,453 | 19,559 | 46,458 | 56,885 |
Total gross profit | 3,530 | 5,319 | 7,670 | 15,033 |
Total segment operating (loss) income | 738 | 2,846 | (2,642) | 6,210 |
Unallocated general and administrative expenses | (1,712) | (2,298) | (6,939) | (7,090) |
Unallocated loss on disposal of assets | (818) | (818) | ||
Loss from operations | (1,792) | 548 | (10,399) | (880) |
Other income (expense) | 561 | (392) | 718 | (500) |
Loss before taxes and equity method investment (loss) income | (1,231) | 156 | (9,681) | (1,380) |
Business Segments [Member] | Cinema [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total segment net revenue | 11,560 | 12,290 | 33,438 | 38,153 |
Total gross profit | 4,415 | 3,934 | 11,015 | 11,565 |
Total segment operating (loss) income | 3,383 | 3,028 | 7,681 | 8,593 |
Business Segments [Member] | Digital Media [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total segment net revenue | 5,050 | 7,595 | 13,593 | 19,277 |
Total gross profit | (901) | 1,372 | (3,394) | 3,445 |
Total segment operating (loss) income | (2,563) | (84) | (10,042) | (2,094) |
Business Segments [Member] | Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total segment net revenue | 16 | 13 | 49 | 22 |
Total gross profit | 16 | 13 | 49 | 23 |
Total segment operating (loss) income | $ (82) | $ (98) | $ (281) | $ (289) |
Business Segment Information _2
Business Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Identifiable assets | $ 59,831 | $ 59,014 |
Business Segments [Member] | Cinema [Member] | ||
Identifiable assets | 29,515 | 27,358 |
Business Segments [Member] | Digital Media [Member] | ||
Identifiable assets | 14,274 | 13,603 |
Business Segments [Member] | Corporate Assets [Member] | ||
Identifiable assets | $ 16,042 | $ 18,053 |
Business Segment Information _3
Business Segment Information - Schedule of Segment Reporting Information by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net revenue | $ 16,453 | $ 19,559 | $ 46,458 | $ 56,885 |
United States [Member] | ||||
Net revenue | 12,495 | 15,349 | 36,196 | 44,658 |
Canada [Member] | ||||
Net revenue | 1,234 | 1,365 | 4,148 | 4,372 |
Mexico [Member] | ||||
Net revenue | 206 | 425 | 1,293 | 1,164 |
China [Member] | ||||
Net revenue | 1,581 | 1,646 | 2,867 | 4,543 |
Latin America [Member] | ||||
Net revenue | 256 | 461 | 659 | 1,263 |
Europe [Member] | ||||
Net revenue | 456 | 250 | 809 | 427 |
Asia (Excluding China) [Member] | ||||
Net revenue | 160 | 337 | 216 | |
Other [Member] | ||||
Net revenue | $ 65 | $ 63 | $ 149 | $ 252 |
Business Segment Information _4
Business Segment Information - Summary of Identifiable Assets by Geographical Area (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Identifiable assets | $ 59,831 | $ 59,014 |
United States [Member] | ||
Identifiable assets | 42,094 | 37,230 |
Canada [Member] | ||
Identifiable assets | $ 17,737 | $ 21,784 |