Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TRANSACT TECHNOLOGIES INC | ||
Entity Central Index Key | 1,017,303 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 58,800,000 | ||
Entity Common Stock, Shares Outstanding | 7,478,064 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 5,507 | $ 2,503 |
Accounts receivable, net | 10,948 | 10,585 |
Inventories | 8,875 | 9,707 |
Prepaid income taxes | 514 | 0 |
Other current assets | 517 | 372 |
Total current assets | 26,361 | 23,167 |
Fixed assets, net | 2,169 | 2,241 |
Goodwill | 2,621 | 2,621 |
Deferred tax assets | 2,308 | 3,432 |
Intangible assets, net of accumulated amortization of $2,779 and $2,326, respectively | 458 | 545 |
Other assets | 33 | 36 |
Total noncurrent assets | 7,589 | 8,875 |
Total assets | 33,950 | 32,042 |
Current liabilities: | ||
Accounts payable | 3,841 | 4,894 |
Accrued liabilities | 3,339 | 2,394 |
Income taxes payable | 0 | 19 |
Deferred revenue | 169 | 117 |
Total current liabilities | 7,349 | 7,424 |
Deferred revenue, net of current portion | 69 | 67 |
Deferred rent, net of current portion | 271 | 178 |
Other liabilities | 247 | 264 |
Total noncurrent liabilities | 587 | 509 |
Total liabilities | 7,936 | 7,933 |
Shareholders' equity: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common Stock, Value, Issued | 114 | 112 |
Additional paid-in capital | 31,353 | 29,701 |
Retained earnings | 24,756 | 24,157 |
Treasury stock, 3,851,967 and 3,388,589 shares, at cost | (99) | (109) |
Treasury stock, 3,388,589 and 3,222,036 shares, at cost | (30,110) | (29,752) |
Total shareholders' equity | 26,014 | 24,109 |
Total liabilities and shareholders' equity | 33,950 | 32,042 |
Series A Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred Stock, Value, Issued | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Intangible assets, accumulated amortization | $ 3,359 | $ 3,122 |
Shareholders' equity: | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 4,800,000 | 4,800,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 11,366,526 | 11,185,331 |
Common stock, shares outstanding (in shares) | 7,478,094 | 7,333,364 |
Treasury stock (in shares) | 3,888,432 | 3,851,967 |
Series A Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 200,000 | 200,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | |||
Net sales | $ 56,311 | $ 57,235 | $ 59,676 |
Cost of sales | 29,649 | 33,436 | 34,698 |
Gross profit | 26,662 | 23,799 | 24,978 |
Operating expenses: | |||
Engineering, design and product development | 4,303 | 4,425 | 3,599 |
Selling and marketing | 7,561 | 6,907 | 7,806 |
General and administrative | 7,984 | 7,267 | 7,367 |
Legal fees and settlement expenses associated with lawsuit (Note 10) | 0 | 0 | 1,738 |
Operating expenses | 19,848 | 18,599 | 20,510 |
Operating income (loss) | 6,814 | 5,200 | 4,468 |
Interest and other income (expense): | |||
Interest expense | (33) | (33) | (37) |
Interest income | 0 | 7 | 9 |
Other, net | (9) | (4) | 2 |
Interest and other income (expense) | (42) | (30) | (26) |
Income (loss) before income taxes | 6,772 | 5,170 | 4,442 |
Income tax provision (benefit) | 3,561 | 1,553 | 1,350 |
Net income (loss) | $ 3,211 | $ 3,617 | $ 3,092 |
Net income (loss) per common share: | |||
Basic (in dollars per share) | $ 0.43 | $ 0.48 | $ 0.40 |
Diluted (in dollars per share) | $ 0.42 | $ 0.47 | $ 0.39 |
Shares used in per-share calculation: | |||
Basic (in shares) | 7,423 | 7,610 | 7,818 |
Diluted (in shares) | 7,592 | 7,655 | 7,854 |
Dividends declared and paid per common share (in dollars per share) | $ 0.35 | $ 0.32 | $ 0.32 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | |||
Net income (loss) | $ 3,211 | $ 3,617 | $ 3,092 |
Foreign currency translation adjustment, net of tax | 10 | (29) | (8) |
Comprehensive income (loss) | $ 3,221 | $ 3,588 | $ 3,084 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning balance at Dec. 31, 2014 | $ 111 | $ 28,167 | $ 22,349 | $ (25,161) | $ (72) | $ 25,394 |
Beginning balance (in shares) at Dec. 31, 2014 | 7,900,257 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of shares from exercise of stock options | $ 1 | 262 | 0 | 0 | 0 | 263 |
Issuance of shares from exercise of stock options (in shares) | 34,600 | |||||
Issuance of deferred stock units | $ 0 | 160 | 0 | 0 | 0 | 160 |
Issuance of common stock on deferred stock units, net of relinquishments | $ 0 | (39) | 0 | 0 | 0 | (39) |
Issuance of common stock on deferred stock units, net of relinquishments (in shares) | 13,988 | |||||
Relinquishments of stock options and deferred stock units to pay withholding taxes | $ 0 | (48) | 0 | 0 | 0 | (48) |
Purchase of treasury stock | $ 0 | 0 | 0 | (1,020) | 0 | (1,020) |
Purchase of treasury stock (in shares) | (166,553) | |||||
Dividends declared and paid on common stock | $ 0 | 0 | (2,485) | 0 | 0 | (2,485) |
Share-based compensation expense | 0 | 488 | 0 | 0 | 0 | 488 |
ASU 2016-09 Adjustment | 0 | (69) | 0 | 0 | 0 | (69) |
Foreign currency translation adjustment, net of tax | 0 | 0 | 0 | 0 | (8) | (8) |
Net income (loss) | 0 | 0 | 3,092 | 0 | 0 | 3,092 |
Balance at December 31, 2017 at Dec. 31, 2015 | $ 112 | 28,921 | 22,956 | (26,181) | (80) | 25,728 |
Ending balance (in shares) at Dec. 31, 2015 | 7,782,292 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of shares from exercise of stock options | $ 0 | 23 | 0 | 0 | 0 | 23 |
Issuance of shares from exercise of stock options (in shares) | 3,750 | |||||
Issuance of deferred stock units | $ 0 | 202 | 0 | 0 | 0 | 202 |
Issuance of common stock on deferred stock units, net of relinquishments | $ 0 | (51) | 0 | 0 | 0 | (51) |
Issuance of common stock on deferred stock units, net of relinquishments (in shares) | 10,700 | |||||
Relinquishments of stock options and deferred stock units to pay withholding taxes | $ 0 | 1 | 0 | 0 | 0 | 1 |
Purchase of treasury stock | $ 0 | 0 | 0 | (3,571) | 0 | (3,571) |
Purchase of treasury stock (in shares) | (463,378) | |||||
Dividends declared and paid on common stock | $ 0 | 0 | (2,416) | 0 | 0 | (2,416) |
Share-based compensation expense | 0 | 611 | 0 | 0 | 0 | 611 |
ASU 2016-09 Adjustment | 0 | (6) | 0 | 0 | 0 | (6) |
Foreign currency translation adjustment, net of tax | 0 | 0 | 0 | 0 | (29) | (29) |
Net income (loss) | 0 | 0 | 3,617 | 0 | 0 | 3,617 |
Balance at December 31, 2017 at Dec. 31, 2016 | $ 112 | 29,701 | 24,157 | (29,752) | (109) | $ 24,109 |
Ending balance (in shares) at Dec. 31, 2016 | 7,333,364 | 11,185,331 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of shares from exercise of stock options | $ 2 | 1,041 | 0 | 0 | 0 | $ 1,043 |
Issuance of shares from exercise of stock options (in shares) | 166,600 | |||||
Issuance of deferred stock units | $ 0 | 0 | 0 | 0 | 0 | 0 |
Issuance of common stock on deferred stock units, net of relinquishments | $ 0 | 0 | 0 | 0 | 0 | 0 |
Issuance of common stock on deferred stock units, net of relinquishments (in shares) | 8,663 | |||||
Relinquishments of stock options and deferred stock units to pay withholding taxes | $ 0 | (29) | 0 | 0 | 0 | (29) |
Purchase of treasury stock | $ 0 | 0 | 0 | (358) | 0 | (358) |
Purchase of treasury stock (in shares) | (36,465) | |||||
Dividends declared and paid on common stock | $ 0 | 0 | (2,581) | 0 | 0 | (2,581) |
Share-based compensation expense | 0 | 609 | 0 | 0 | 0 | 609 |
ASU 2016-09 Adjustment | 0 | 31 | (31) | 0 | 0 | 0 |
Foreign currency translation adjustment, net of tax | 0 | 0 | 0 | 0 | 10 | 10 |
Net income (loss) | 0 | 0 | 3,211 | 0 | 0 | 3,211 |
Balance at December 31, 2017 at Dec. 31, 2017 | $ 114 | $ 31,353 | $ 24,756 | $ (30,110) | $ (99) | $ 26,014 |
Ending balance (in shares) at Dec. 31, 2017 | 7,478,094 | 11,366,526 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 3,211 | $ 3,617 | $ 3,092 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Share-based compensation expense | 609 | 611 | 488 |
Depreciation and amortization | 1,081 | 1,331 | 1,426 |
Deferred income tax provision (benefit) | 1,117 | (295) | 878 |
Provision for Doubtful Accounts | 50 | 0 | 7 |
(Gain) loss on sale of fixed assets | 0 | (5) | (4) |
Foreign currency transaction (gains) losses | 11 | 4 | (1) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (405) | (3,434) | 1,909 |
Inventories | 834 | 1,580 | 509 |
Prepaid income taxes | (518) | (5) | 407 |
Other current and long term assets | (137) | 53 | 50 |
Accounts payable | (988) | 2,255 | 277 |
Accrued lawsuit settlement expenses | 0 | 0 | (3,625) |
Accrued liabilities and other liabilities | 1,053 | (1,088) | 138 |
Net cash provided by operating activities | 5,918 | 4,624 | 5,551 |
Cash flows from investing activities: | |||
Capital expenditures | (835) | (608) | (959) |
Additions to capitalized software | (150) | 0 | 0 |
Proceeds from sale of fixed assets | 0 | 8 | 4 |
Net cash used in investing activities | (985) | (600) | (955) |
Cash flows from financing activities: | |||
Revolving credit line borrowings | 0 | 0 | 2,500 |
Revolving credit line payments | 0 | 0 | (2,500) |
Proceeds from stock option exercises | 1,043 | 23 | 263 |
Purchases of common stock for treasury | (358) | (3,571) | (1,020) |
Payment of dividends on common stock | (2,581) | (2,416) | (2,485) |
Payment of deferred financing costs | (23) | 0 | 0 |
Net cash used in financing activities | (1,919) | (5,964) | (3,242) |
Effect of exchange rate changes on cash and cash equivalents | (10) | (30) | (12) |
Increase (decrease) in cash and cash equivalents | 3,004 | (1,970) | 1,342 |
Cash and cash equivalents, beginning of period | 2,503 | 4,473 | 3,131 |
Cash and cash equivalents, end of period | 5,507 | 2,503 | 4,473 |
Supplemental cash flow information: | |||
Interest paid | 30 | 31 | 34 |
Income taxes paid | 2,991 | 2,065 | 130 |
Non-cash capital expenditure items | $ 44 | $ 113 | $ 84 |
Description of business
Description of business | 12 Months Ended |
Dec. 31, 2017 | |
Description of business [Abstract] | |
Description of business | 1. Description of business TransAct Technologies Incorporated ("TransAct" or the "Company"), which has its headquarters in Hamden, CT and its primary operating facility in Ithaca, NY, operates in one operating segment: software-driven technology and printing solutions for high growth markets including restaurant solutions, casino and gaming, lottery, POS automation and banking, oil and gas and mobile markets. Our solutions are designed based on market-specific requirements and are sold under the AccuDate™ Ithaca®, RESPONDER®, Epic, EPICENTRAL TM TM TM |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies [Abstract] | |
Accounting policies | 2. Summary of significant accounting policies Principles of consolidation: Use of estimates : Segment reporting : Cash and cash equivalents : Allowance for doubtful accounts : The following table summarizes the activity recorded in the valuation account for accounts receivable: Year ended December 31, (In thousands) 2017 2016 2015 Balance, beginning of period $ 50 $ 50 $ 100 Additions charged to costs and expenses 50 - 7 Write-offs - - (57 ) Balance, end of period $ 100 $ 50 $ 50 Inventories: Fixed assets: Leases: Goodwill and Intangible assets : Revenue recognition: We also sell a software solution, EPICENTRALâ„¢, that enables casino operators to create promotional coupons and marketing messages and to print them in real-time at the slot machine. Revenue arrangements for EPICENTRAL TM TM Revenue, inclusive of software license fees, is generally recognized upon installation and formal acceptance by the customer with the exception of any amount allocated to free maintenance which is deferred and recognized over the initial maintenance period, generally one year. For EPICENTRAL TM Revenue related to extended warranty and product maintenance contracts is recognized pursuant to ASC 605-20-25, "Separately Priced Extended Warranty and Product Maintenance Contracts." Pursuant to this provision, revenue related to separately priced product maintenance contracts is deferred and recognized over the term of the maintenance period. We record deferred revenue for advance payments received from customers for maintenance contracts. Our customers have the right to return products that do not function properly within a limited time after delivery. We monitor and track product returns and record a provision for the estimated future returns based on historical experience. Returns have historically been within expectations and the provisions established. We offer some of our customers price protection as an incentive to carry inventory of our product. These price protection plans provide that if we lower prices, we will credit them for the price decrease on inventory they hold. Our customers typically carry limited amounts of inventory, and we infrequently lower prices on current products. As a result, the amounts paid under these plans have not been material. We charge our customers for shipping and handling services. The amounts billed to customers are recorded as revenue when the product ships. Any costs incurred related to these services are included in cost of sales. Concentration of credit risk: Accounts receivable from customers representing 10% or more of total accounts receivable were as follows: December 31, 2017 2016 International Gaming Technology ("IGT") 48 % 34 % Suzo-Happ 13 % 18 % Sales to customers representing 10% or more of total net sales were as follows: Year ended December 31, 2017 2016 2015 IGT 35 % 26 % 29 % Suzo-Happ 8 % 15 % 14 % Warranty: The following table summarizes the activity recorded in the accrued product warranty liability: Year ended December 31, (In thousands) 2017 2016 2015 Balance, beginning of period $ 267 $ 277 $ 287 Warranties issued 259 254 267 Warranty settlements (259 ) (264 ) (277 ) Balance, end of period $ 267 $ 267 $ 277 $186,000 and $169,000 of the accrued product warranty liability were classified as current in Accrued liabilities at December 31, 2017 and 2016, respectively. The remaining $81,000 and $98,000 of the accrued product warranty liability is classified as long-term in Other liabilities. Engineering, design and product development: Costs incurred in researching and developing a computer software product are charged to expense until technological feasibility has been established at which point all material software costs are capitalized within Intangible assets in our Consolidated Balance Sheet until the product is available for general release to customers. While judgment is required in determining when technological feasibility of a product is established, we have determined that it is reached after all high-risk development issues have been documented in a formal detailed plan design. The amortization of these costs have been included in cost of sales over the estimated life of the product. During 2010, we began the development of EPICENTRAL TM Advertising: Income taxes: Foreign currency translation: Share-based payments: We use the Black-Scholes option-pricing model to calculate the fair value of share based awards. The key assumptions for this valuation method include the expected term of the option, stock price volatility, risk-free interest rate, dividend yield, market price of our underlying stock and exercise price. Many of these assumptions are judgmental and highly sensitive in the determination of compensation expense. Beginning in the first quarter of 2017, we recognize forfeitures as they occur. Net income and loss per share: |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
Inventories | 3. Inventories, net The components of inventories are: December 31, (In thousands) 2017 2016 Raw materials and purchased component parts $ 6,322 $ 6,298 Work-in-process - 8 Finished goods 2,553 3,401 $ 8,875 $ 9,707 |
Fixed assets
Fixed assets | 12 Months Ended |
Dec. 31, 2017 | |
Fixed assets [Abstract] | |
Fixed assets | 4. Fixed assets The components of fixed assets, net are: December 31, (In thousands) 2017 2016 Tooling, machinery and equipment $ 11,019 $ 11,035 Furniture and office equipment 1,651 1,630 Computer software and equipment 6,503 6,260 Leasehold improvements 2,475 2,361 21,648 21,286 Less: Accumulated depreciation and amortization (19,752 ) (19,215 ) 1,896 2,071 Construction in-process 273 170 $ 2,169 $ 2,241 |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets [Abstract] | |
Intangible assets | 5. Intangible assets Identifiable intangible assets are recorded in Intangible assets in the accompanying Consolidated Balance Sheets and are comprised of the following: December 31, 2017 2016 (In thousands) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Purchased technology $ 1,754 $ (1,481 ) $ 1,604 $ (1,433 ) Customer relationships 1,300 (1,300 ) 1,300 (1,163 ) Trademark 480 (306 ) 480 (257 ) Covenant not to compete 146 (146 ) 146 (146 ) Patents 57 (46 ) 57 (43 ) Other 80 (80 ) 80 (80 ) Total $ 3,817 $ (3,359 ) $ 3,667 $ (3,122 ) Amortization expense was $237,000, $343,000 and $454,000 in 2017, 2016 and 2015, respectively. Amortization expense for each of the next five years ending December 31 is expected to be as follows: $128,000 in 2018; $127,000 in 2019; $112,000 in 2020; $61,000 in 2021; and $30,000 in 2022. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued liabilities [Abstract] | |
Accrued liabilities | 6. Accrued liabilities The components of accrued liabilities are: December 31, (In thousands) 2017 2016 Salaries and compensation related $ 2,288 $ 1,722 Warranty 186 169 Professional and consulting 209 153 Other 656 350 $ 3,339 $ 2,394 |
Retirement savings plan
Retirement savings plan | 12 Months Ended |
Dec. 31, 2017 | |
Retirement savings plan [Abstract] | |
Retirement savings plan | 7. Retirement savings plan We maintain a 401(k) plan under which all full-time employees are eligible to participate at the beginning of each month immediately following their date of hire. We match employees' contributions at a rate of 50% of employees' contributions up to the first 6% of the employees' compensation contributed to the 401(k) plan. Our matching contributions were $264,000, $295,000 and $197,000 in 2017, 2016, and 2015, respectively. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2017 | |
Borrowings [Abstract] | |
Borrowings | 8. Borrowings We maintain a credit facility (the "TD Bank Credit Facility") with TD Bank N.A. ("TD Bank) which provides for a $20,000,000 revolving credit line. On November 21, 2017, we signed an amendment extending the term to the TD Bank Credit Facility through November 28, 2022. Borrowings under the revolving credit line bear a floating rate of interest at the prime rate minus one percent and are secured by a lien on all of our assets. We also pay a fee of 0.125% on unused borrowings under the revolving credit line. The amendment increased the amount of revolving credit loans we may use to fund future cash dividend payments or treasury share buybacks to $12,500,000 from $10,000,000. The TD Bank Credit Facility imposes certain quarterly financial covenants on us and restricts, among other things, our ability to incur additional indebtedness and the creation of other liens. We were in compliance with all financial covenants of the TD Bank Credit Facility at December 31, 2017. As of December 31, 2017, undrawn commitments under the TD Bank Credit facility were $20,000,000. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and contingencies [Abstract] | |
Commitments and contingencies | 9. Commitments and contingencies On June 8, 2012, Avery Dennison Corporation ("AD") filed a civil complaint against us and a former employee of ours and of AD, in the Court of Common Pleas (the "Court") in Lake County, Ohio. The complaint alleged that we and this former employee misappropriated unspecified trade secrets and confidential information from AD related to the design of our restaurant solutions terminals. The complaint requested a preliminary and permanent injunction against us from manufacturing and selling our Ithaca® 9700 and 9800 restaurant solutions terminals. After more than two years of legal proceedings, on March 25, 2015 the parties executed a confidential settlement agreement and release (the "Settlement Agreement") in which the parties mutually agreed to resolve the dispute to the parties' mutual satisfaction. Under the terms of the Settlement Agreement, we agreed to pay AD $3,600,000 payable on or before April 8, 2015 and also to qualify certain AD labels for use on our restaurant solutions terminals at an estimated cost of $25,000. We recorded the total expense of $3,625,000 in the fourth quarter 2014 as an operating expense included in the line item "Legal fees and settlement expenses associated with lawsuit" on the Consolidated Statement of Operations and as a current liability included in the line item "Accrued lawsuit settlement expenses" on the Consolidated Balance Sheet. In the second quarter of 2015 we reversed $25,000 of this expense because AD did not provide the label testing information by the due date required per the settlement agreement. At December 31, 2017, we were the lessee on operating leases for equipment and real property. Rent expense was $1,142,000, $1,046,000 and $932,000 in 2017, 2016, and 2015, respectively. Minimum aggregate rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2017 are as follows: $1,000,000 in 2018; $1,015,000 in 2019; $1,014,000 in 2020; $692,000 in 2021, $429,000 in 2022 and $1,155,000 thereafter. |
Stock incentive plans
Stock incentive plans | 12 Months Ended |
Dec. 31, 2017 | |
Stock incentive plans [Abstract] | |
Stock incentive plans | 10. Stock incentive plans Stock incentive plans . Under the assumptions indicated below, the weighted-average per share fair value of stock option grants for 2017, 2016, and 2015 was $1.95, $1.70 and $6.73, respectively. In 2017 and 2016, we also issued restricted share units for certain executives and directors that vest over a specified period of time, and in some instances require achieving certain performance metrics. The weighted-average per share fair value of these restricted share units was $7.53 and $7.31 in 2017 and 2016, respectively. No restricted share units were issued in 2015. The table below indicates the key assumptions used in the option valuation calculations for options granted in 2017, 2016, and 2015 and a discussion of our methodology for developing each of the assumptions used in the valuation model: Year ended December 31, 2017 2016 2015 Expected option term (in years) 6.8 6.9 6.8 Expected volatility 36.2 % 38.8 % 50.4 % Risk-free interest rate 2.1 % 1.2 % 1.6 % Dividend yield 4.3 % 4.5 % 4.7 % Expected Option Term Expected Volatility Risk-Free Interest Rate Dividend Yield For 2017, 2016, and 2015, we recorded $609,000, $611,000, and $488,000 of share-based compensation expense, respectively, included primarily in general and administrative expense in our Consolidated Statements of Income. We also recorded income tax benefits of $134,000, $184,000, and $148,000 in 2017, 2016, and 2015 respectively, related to such share-based compensation. At December 31, 2017, these benefits are recorded as a deferred tax asset in the Consolidated Balance Sheets. Option activity in the 2005 Equity Incentive Plan and 2014 Equity Incentive Plan is summarized below: Stock Options Restricted Share Units Number of Shares Average Price* Number of Units Average Price** Outstanding at December 31, 2016 1,073,900 $ 7.83 57,400 $ 7.94 Granted 169,500 8.30 65,600 8.30 Exercised (182,811 ) 6.42 (8,300 ) 7.44 Forfeited (80,763 ) 7.50 (13,425 ) 7.98 Expired (60,187 ) 9.32 - - Outstanding at December 31, 2017 919,639 $ 8.13 101,275 $ 8.21 * weighted-average exercise price per share ** weighted-average grant stock price per share The following summarizes information about equity awards outstanding that are vested and expect to vest and equity awards that are exercisable at December 31, 2017: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable Awards Average Price* Aggregate Intrinsic Value Remaining Term** Awards Average Price* Aggregate Intrinsic Value Remaining Term** Stock Options 919,639 $ 8.13 $ 4,709,000 6.4 483,224 $ 8.29 $ 2,396,000 4.8 Restricted stock units 95,135 - 1,261,000 2.0 - - - - * weighted-average exercise price per share ** weighted-average contractual remaining term in years Shares that are issued upon exercise of employee stock awards are newly issued shares and not issued from treasury stock. As of December 31, 2017, unrecognized compensation cost related to non-vested equity awards granted under our stock incentive plans is approximately $899,000, which is expected to be recognized over a weighted average period of 2.6 years The total fair value of awards vested during the years ended December 31, 2017, 2016, and 2015 was $1,104,000, $961,000, and $944,000, respectively. The total intrinsic value (which is the amount by which the stock price exceeded the exercise price on the date of exercise) of stock options exercised during the years ended December 31, 2017, 2016, and 2015 was $958,000, $6,000 and $32,000, respectively. Cash received from option exercises was $1,043,000, $23,000 and $263,000 for 2017, 2016, and 2015, respectively. We recorded a realized tax benefit in 2017, 2016, and 2015 from equity-based awards of $150,000, $1,000 and $4,000, respectively, related to options exercised. Upon adoption of ASU 2016-09 in 2017 tax benefits realized on stock options exercises are included in income tax expense and are no longer included as a component of cash flows. See Footnote 16 Accounting Pronouncements for further details regarding the adoption of ASU 2016-09. Restricted stock: We paid a portion of the 2015 and 2014 incentive bonus for the chief executive officer and chief financial officer in the form of 28,231 and 23,578 deferred stock units, respectively, with a corresponding credit recorded to Additional Paid in Capital (net of share relinquishments) in the amounts of $151,000 and $121,000 in 2016, and 2015, respectively. Such deferred stock units were granted in February 2016 and February 2015, respectively, and were fully vested at the time of grant. These units will be converted three years from the grant date to shares of the Company's common stock on a one-for-one basis. The weighted average exercise price of the deferred stock units was $6.98. Starting with the 2016 incentive bonus program, all incentive bonus payments are made in cash with no portion of the award paid in deferred stock units. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income taxes [Abstract] | |
Income taxes | 11. Income taxes The components of the income tax provision are as follows: Year Ended December 31, (In thousands) 2017 2016 2015 Current: Federal $ 2,379 $ 1,776 $ 450 State 114 70 22 Foreign (49 ) 2 - 2,444 1,848 472 Deferred: Federal 1,097 (257 ) 843 State 20 (38 ) 35 Foreign - - - 1,117 (295 ) 878 Income tax provision $ 3,561 $ 1,553 $ 1,350 On December 22, 2017, the United States enacted significant changes to U.S. tax law following the passage and signing of the Tax Reform Act. The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a one-time repatriation tax on undistributed foreign earnings. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. Income tax effects resulting from changes in tax laws are accounted for by the Company in accordance with authoritative guidance, which requires that these tax effects be recognized in the period in which the law is enacted. On December 22, 2017, the Securities and Exchange Commission ("SEC") staff issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of U.S. GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. SAB 118 provides a measurement period, not to exceed one year from the enactment of the Tax Reform Act. In accordance with SAB 118, the Company is required to reflect the income tax effects of those aspects of the Tax Reform Act for which the accounting is complete. To the extent there are areas that are incomplete, but are capable of reasonable estimates, a provisional amount is required to be recorded by the Company. If a reasonable estimate is unable to be calculated, the Company is required to disclose why. The Company has recognized provisional tax impacts related to the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions, additional regulatory guidance from Treasury, the Internal Revenue Service and State Governments, and actions the Company may take as a result of the Tax Reform Act. The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction of TransAct's U.S. corporate income tax rate from 34% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax assets at December 31, 2017 and recognized a provisional $1,315,000 charge to income tax expense in the Company's consolidated statement of income for the year ended December 31, 2017. The Tax Reform Act also provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits ("E&P") through the year ended December 31, 2017. The Company has no undistributed foreign E&P subject to the one-time mandatory repatriation and therefore has not recognized any income tax expense related to undistributed foreign subsidiary E&P for the year ended December 31, 2017. While the Tax Reform Act provides for a territorial tax system, beginning in 2018, it includes two new U.S. tax base erosion provisions, the global intangible low-taxed income ("GILTI") provisions and the base-erosion and anti-abuse tax ("BEAT") provisions. The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. The BEAT provisions in the Tax Reform Act eliminate the deduction of certain base-erosion payments made to related foreign corporations, and impose a minimum tax if greater than regular tax. The Company does not expect it will be subject to these taxes and therefore has not included any tax impacts of GILTI or BEAT in its consolidated financial statements for the year ended December 31, 2017. Starting January 1, 2018, the Company will account for GILIT and BEAT in the period in which it is incurred to the extent these expectations change. Our effective tax rates were 52.6%, 30.0%, and 30.4% for 2017, 2016, and 2015, respectively. The effective tax rate in 2017 was unusually high due to the impact of the Tax Reform Act. As explained above we recognized a provisional $1,315,000 charge to income tax expense for the year ended December 31, 2017 as a result of revaluing our net deferred tax assets using the new U.S. corporate tax rate of 21%. At December 31, 2017, we have no federal or state net operating loss carryforwards and no R&D credit carryforwards or state tax credit carryforwards as of December 31, 2017. Foreign loss before taxes was $563,000, $235,000, and $174,000 in 2017, 2016, and 2015, respectively. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements. Our deferred tax assets and liabilities were comprised of the following: December 31, (In thousands) 2017 2016 Deferred tax assets: Foreign net operating losses $ 328 $ 423 Depreciation 107 88 Inventory reserves 845 1,264 Deferred revenue 16 31 Warranty reserve 59 93 Stock compensation expense 694 1,273 Other accrued compensation 363 387 Other liabilities and reserves 246 329 Gross deferred tax assets 2,658 3,888 Valuation allowance (328 ) (423 ) Net deferred tax assets 2,330 3,465 Deferred tax liabilities: Other 22 33 Net deferred tax liabilities 22 33 Total net deferred tax assets $ 2,308 $ 3,432 As of December 31, 2017 a valuation allowance of $328,000 has been established for foreign net operating loss carryforwards that are not expected to be used. The following table summarizes the activity recorded in the valuation allowance on the deferred tax assets: Year ended December 31, (In thousands) 2017 2016 2015 Balance, beginning of period $ 423 $ 340 $ 282 Additions charged to income tax provision 67 83 58 Reductions credited to income tax provision (162 ) - - Balance, end of period $ 328 $ 423 $ 340 Differences between the U.S. statutory federal income tax rate and our effective income tax rate are analyzed below: Year Ended December 31, 2017 2016 2015 Federal statutory tax rate 34.0 % 34.0 % 34.0 % U.S. corporate tax rate change 19.4 0.0 0.0 Stock option cancellations 1.7 0.0 0.0 Valuation allowance and tax accruals 1.6 1.6 1.3 State income taxes, net of federal income taxes 1.3 0.4 0.8 Uncertain tax positions (0.1 ) (0.1 ) (0.3 ) Miscellaneous permanent items (1.9 ) (1.2 ) (0.7 ) R&D credit (3.3 ) (4.6 ) (4.9 ) Other (0.1 ) (0.1 ) 0.2 Effective tax rate 52.6 % 30.0 % 30.4 % At December 31, 2017 and 2016, we had $104,000 and $111,000 of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. We are not aware of any events that could occur within the next twelve months that could cause a significant change in the total amount of unrecognized tax benefits. A tabular reconciliation of the gross amounts of unrecognized tax benefits at the beginning and end of the year is as follows: December 31, (In thousands) 2017 2016 Unrecognized tax benefits as of January 1 $ 111 $ 114 Tax positions taken during the current period 24 27 Lapse of statute of limitations (31 ) (30 ) Unrecognized tax benefits as of December 31 $ 104 $ 111 We expect $28,000 of the $104,000 of unrecognized tax benefits will reverse in 2018 upon the expiration of the statute of limitations. We recognize interest and penalties related to uncertain tax positions in the income tax provision. As of December 31, 2017 and 2016, we have $17,000 and $18,000, respectively, of accrued interest and penalties related to uncertain tax positions. We are subject to U.S. federal income tax as well as income tax of certain state and foreign jurisdictions. We have substantially concluded all U.S. federal income tax, state and local, and foreign tax matters through 2013. However, our federal tax returns for the years 2014 through 2016 remain open to examination. Various state and foreign tax jurisdiction tax years remain open to examination as well, though we believe that any additional assessment would be immaterial to the Consolidated Financial Statements. 12. Earnings per share |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per share [Abstract] | |
Earnings per share | For 2017, 2016, and 2015, earnings per share was computed as follows (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Net income $ 3,211 $ 3,617 $ 3,092 Shares: Basic: Weighted average common shares outstanding 7,423 7,610 7,818 Add: Dilutive effect of outstanding options as determined by the treasury stock method 169 45 36 Diluted: Weighted average common and common equivalent shares outstanding 7,592 7,655 7,854 Net income per common share: Basic $ 0.43 $ 0.48 $ 0.40 Diluted 0.42 0.47 0.39 The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, restricted stock units and performance stock awards, when the average market price of the common stock is lower than the exercise price of the related stock award during the period. These outstanding stock awards are not included in the computation of diluted earnings per share because the effect would be anti-dilutive. Anti-dilutive stock awards excluded from the computation of earnings per dilutive share were 341,000, and 831,000, at December 31, 2017 and 2016 respectively. |
Stock repurchase program
Stock repurchase program | 12 Months Ended |
Dec. 31, 2017 | |
Stock repurchase program [Abstract] | |
Stock repurchase program | 13. Stock repurchase program Prior to its expiration on December 31, 2017, we maintained a stock repurchase program (the "Stock Repurchase Program") whereby we were authorized to repurchase up to $5,000,000 of our outstanding shares of common stock from time to time in the open market at prevailing market prices based on market conditions, share price and other factors. We use the cost method to account for treasury stock purchases, under which the price paid for the stock is charged to the treasury stock account. Repurchases of our common stock are accounted for as of the settlement date. From January 1, 2017 through the expiration date of the Stock Repurchase Program, we purchased 36,465 shares of our common stock for $358,000 at an average price of $9.84 per share. From the start of the Stock Repurchase Program on February 25, 2016 through December 31, 2017, we purchased 499,843 shares of our common stock for $3,929,000 at an average price of $7.86 per share. In 2015, under a prior repurchase program, we purchased 166,553 shares of our common stock for $1,020,000 at an average price of $6.12 per share. From January 1, 2005 through December 31, 2017, we repurchased a total of 3,888,432 shares of common stock for $30,110,000, at an average price of $7.74 per share. |
Geographic area information
Geographic area information | 12 Months Ended |
Dec. 31, 2017 | |
Geographic area information [Abstract] | |
Geographic area information | 14. Geographic area information Information regarding our operations by geographic area is contained in the following table. These amounts in the geographic area table are based on the location of the customer and asset. Year Ended December 31, (In thousands) 2017 2016 2015 Net sales: United States $ 48,720 $ 45,542 $ 45,730 International 7,591 11,693 13,946 Total $ 56,311 $ 57,235 $ 59,676 Fixed assets, net: United States $ 1,548 $ 1,581 $ 1,769 International 621 660 738 Total $ 2,169 $ 2,241 $ 2,507 Sales to international customers were 14%, 20%, and 23% of total sales in 2017, 2016, and 2015 respectively. Sales to Europe represented 44%, 56%, and 56%, sales to the Pacific Rim (which includes Australia and Asia) represented 32%, 34%, and 34%, and sales to Canada represented 18%, 8%, and 8% of total international sales in 2017, 2016, and 2015 respectively. International long-lived assets consist of net fixed assets located at our foreign subsidiary in the United Kingdom as well as our contract manufacturers in China, Thailand, Malaysia and Mexico. |
Quarterly results of operations
Quarterly results of operations (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly results of operations (unaudited) [Abstract] | |
Quarterly results of operations (unaudited) | 15. Quarterly results of operations (unaudited) Our quarterly results of operations for 2017 and 2016 are as follows: Quarter Ended (In thousands, except per share amounts) March 31 June 30 September 30 December 31 2017: Net sales $ 13,997 $ 13,596 $ 15,524 $ 13,194 Gross profit 6,093 6,430 7,519 6,620 Net income (loss) 943 867 1,813 (412 ) Net income (loss) per common share: Basic 0.13 0.12 0.24 (0.06 ) Diluted 0.13 0.12 0.24 (0.06 ) 2016: Net sales $ 14,357 $ 14,801 $ 14,474 $ 13,603 Gross profit 5,885 5,983 5,915 6,016 Net income 625 753 883 1,356 Net income per common share: Basic 0.08 0.10 0.12 0.18 Diluted 0.08 0.10 0.12 0.18 |
Accounting pronouncements
Accounting pronouncements | 12 Months Ended |
Dec. 31, 2017 | |
Accounting pronouncements [Abstract] | |
Accounting pronouncements | 16. Accounting pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers." This ASU is intended to clarify the principles for recognizing revenue by removing inconsistencies in revenue requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. In applying the amended guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract's performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Entities have the option of using either a full retrospective approach or modified retrospective approach to adopt the amended guidance. The amended guidance applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification. In the first quarter of 2018, the Company will complete its adoption activities, including the integration of the standard update into our financial reporting process and systems. The Company will adopt the amended guidance using the modified retrospective transition approach, with any cumulative effect of initially adopting this standard recognized through retained earnings at the date of adoption. The provisions of this standard are effective for interim and annual periods beginning after December 15, 2017. We will adopt the amended guidance on January 1, 2018, at which time it becomes effective for the Company. The new standard will change revenue practices for testing service contracts reported as part of our TSG market. Revenue will now be recognized at a point in time as our performance obligation is completed as opposed to our current practice of recognizing based on percentage-of-completion. As of Decemeber 31, 2017 we have no open testing service contracts that will require adjustment to retained earnings. While we are still finalizing our evaluation of the impact of the new revenue standard, the impact is not expected to be material. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842 Leases In May 2017, the FASB issued ASU No. 2017-09, "Compensation-Stock Compensation: Scope of modification accounting". ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU No. 2017-09 is effective for fiscal years beginning after December 15, 2017, with early adoption permitted, including during an interim period for which financial statements have not yet been made available for issuance. The amendments should be applied prospectively to an award modified on or after the adoption date. We will adopt ASU 2017-09 in our consolidated financial statements in the first quarter of 2018 and the adoption is not expected to have an impact on our financial statements. The following accounting pronouncements were adopted during 2017: In July 2015, FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory." This ASU changes the measurement principle for inventory from the lower of cost or market to lower of cost or net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. The provisions of this ASU became effective for years beginning after December 15, 2016. We adopted this guidance in the first quarter of 2017 and the adoption has not resulted in a change to the value of inventory. In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting." This ASU is intended to simplify several aspects of the accounting for share based payment transactions. The amended guidance requires that all tax effects related to share-based payments are recorded at settlement (or expiration) through the income statement, rather than through equity. Cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The amended guidance also allows for an employer to repurchase additional employee shares for tax withholding purposes without requiring liability accounting and clarifies that all cash payments made to tax authorities on an employee's behalf for withheld shares should be presented as a financing activity on the Consolidated Statements of Cash Flows. This ASU became effective for years beginning after December 15, 2016, and interim periods within those fiscal years, beginning after December 15, 2016. We adopted ASU 2016-09 in the first quarter of 2017. This adoption required us to reflect any adjustments as of January 1, 2017, the beginning of the annual period that includes the interim period of adoption. In 2017, there were 166,600 options exercised that required $150,000 of excess tax benefits to be recorded in the provision for income taxes. In 2016, there were 3,750 options exercised that required $1,000 of excess tax benefits to be recorded in additional paid-in-capital, as was required pursuant to the prior accounting guidance. In connection with the adoption of ASU 2016-09, in the first quarter of 2017, we made an accounting policy election to no longer estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. This election required the cumulative effect of the change to be recorded to retained earnings. As of January 1, 2017, we recorded $31,000 to decrease retained earnings and increase additional paid-in capital for the difference between the amount of compensation cost previously recorded and the amount that would have been recorded without assuming forfeitures. The presentation requirements for cash flows related to excess tax benefits and employee taxes paid for withheld shares were applied retrospectively to all periods presented. This resulted in an increase in both net cash provided by operating activities and net cash used by financing activities of $23,000 for 2017. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment 17. Subsequent event |
Subsequent event
Subsequent event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent event [Abstract] | |
Subsequent event | On March 1, 2018, our Board of Directors approved a new stock repurchase program (the "2018 Stock Repurchase Program") substantially similar to the 2016 Stock Repurchase Program disclosed in Note 13-Stock repurchase program , whereby we are authorized to repurchase up to $5,000,000 of our outstanding shares of common stock from time to time in the open market at prevailing market prices based on market conditions, share price and other factors. The 2018 Stock Repurchase Program expires on December 31, 2019, if we do not discontinue it prior to such time. |
Summary of significant accoun25
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies [Abstract] | |
Principles of consolidation | Principles of consolidation: |
Use of estimates | Use of estimates : |
Segment reporting | Segment reporting : |
Cash and cash equivalents | Cash and cash equivalents : |
Allowance for doubtful accounts | Allowance for doubtful accounts : The following table summarizes the activity recorded in the valuation account for accounts receivable: Year ended December 31, (In thousands) 2017 2016 2015 Balance, beginning of period $ 50 $ 50 $ 100 Additions charged to costs and expenses 50 - 7 Write-offs - - (57 ) Balance, end of period $ 100 $ 50 $ 50 |
Inventories | Inventories: |
Fixed assets | Fixed assets: Leases: |
Leases | Leases: |
Goodwill and Intangible assets | Goodwill and Intangible assets : |
Revenue recognition | Revenue recognition: We also sell a software solution, EPICENTRALâ„¢, that enables casino operators to create promotional coupons and marketing messages and to print them in real-time at the slot machine. Revenue arrangements for EPICENTRAL TM TM Revenue, inclusive of software license fees, is generally recognized upon installation and formal acceptance by the customer with the exception of any amount allocated to free maintenance which is deferred and recognized over the initial maintenance period, generally one year. For EPICENTRAL TM Revenue related to extended warranty and product maintenance contracts is recognized pursuant to ASC 605-20-25, "Separately Priced Extended Warranty and Product Maintenance Contracts." Pursuant to this provision, revenue related to separately priced product maintenance contracts is deferred and recognized over the term of the maintenance period. We record deferred revenue for advance payments received from customers for maintenance contracts. Our customers have the right to return products that do not function properly within a limited time after delivery. We monitor and track product returns and record a provision for the estimated future returns based on historical experience. Returns have historically been within expectations and the provisions established. We offer some of our customers price protection as an incentive to carry inventory of our product. These price protection plans provide that if we lower prices, we will credit them for the price decrease on inventory they hold. Our customers typically carry limited amounts of inventory, and we infrequently lower prices on current products. As a result, the amounts paid under these plans have not been material. We charge our customers for shipping and handling services. The amounts billed to customers are recorded as revenue when the product ships. Any costs incurred related to these services are included in cost of sales. |
Concentration of credit risk | Concentration of credit risk: Accounts receivable from customers representing 10% or more of total accounts receivable were as follows: December 31, 2017 2016 International Gaming Technology ("IGT") 48 % 34 % Suzo-Happ 13 % 18 % Sales to customers representing 10% or more of total net sales were as follows: Year ended December 31, 2017 2016 2015 IGT 35 % 26 % 29 % Suzo-Happ 8 % 15 % 14 % |
Warranty | Warranty: The following table summarizes the activity recorded in the accrued product warranty liability: Year ended December 31, (In thousands) 2017 2016 2015 Balance, beginning of period $ 267 $ 277 $ 287 Warranties issued 259 254 267 Warranty settlements (259 ) (264 ) (277 ) Balance, end of period $ 267 $ 267 $ 277 $186,000 and $169,000 of the accrued product warranty liability were classified as current in Accrued liabilities at December 31, 2017 and 2016, respectively. The remaining $81,000 and $98,000 of the accrued product warranty liability is classified as long-term in Other liabilities. |
Engineering, design and product development | Engineering, design and product development: Costs incurred in researching and developing a computer software product are charged to expense until technological feasibility has been established at which point all material software costs are capitalized within Intangible assets in our Consolidated Balance Sheet until the product is available for general release to customers. While judgment is required in determining when technological feasibility of a product is established, we have determined that it is reached after all high-risk development issues have been documented in a formal detailed plan design. The amortization of these costs have been included in cost of sales over the estimated life of the product. During 2010, we began the development of EPICENTRAL TM |
Advertising | Advertising: |
Income taxes | Income taxes: |
Foreign currency translation | Foreign currency translation: |
Share-based payments | Share-based payments: We use the Black-Scholes option-pricing model to calculate the fair value of share based awards. The key assumptions for this valuation method include the expected term of the option, stock price volatility, risk-free interest rate, dividend yield, market price of our underlying stock and exercise price. Many of these assumptions are judgmental and highly sensitive in the determination of compensation expense. Beginning in the first quarter of 2017, we recognize forfeitures as they occur. |
Net income and loss per share | Net income and loss per share: |
Summary of significant accoun26
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies [Abstract] | |
Allowance for doubtful accounts | The following table summarizes the activity recorded in the valuation account for accounts receivable: Year ended December 31, (In thousands) 2017 2016 2015 Balance, beginning of period $ 50 $ 50 $ 100 Additions charged to costs and expenses 50 - 7 Write-offs - - (57 ) Balance, end of period $ 100 $ 50 $ 50 |
Concentration of risk | Accounts receivable from customers representing 10% or more of total accounts receivable were as follows: December 31, 2017 2016 International Gaming Technology ("IGT") 48 % 34 % Suzo-Happ 13 % 18 % Sales to customers representing 10% or more of total net sales were as follows: Year ended December 31, 2017 2016 2015 IGT 35 % 26 % 29 % Suzo-Happ 8 % 15 % 14 % |
Product warranty liability | The following table summarizes the activity recorded in the accrued product warranty liability: Year ended December 31, (In thousands) 2017 2016 2015 Balance, beginning of period $ 267 $ 277 $ 287 Warranties issued 259 254 267 Warranty settlements (259 ) (264 ) (277 ) Balance, end of period $ 267 $ 267 $ 277 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
Components of inventories | The components of inventories are: December 31, (In thousands) 2017 2016 Raw materials and purchased component parts $ 6,322 $ 6,298 Work-in-process - 8 Finished goods 2,553 3,401 $ 8,875 $ 9,707 |
Fixed assets (Tables)
Fixed assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fixed assets [Abstract] | |
Components of fixed assets | The components of fixed assets, net are: December 31, (In thousands) 2017 2016 Tooling, machinery and equipment $ 11,019 $ 11,035 Furniture and office equipment 1,651 1,630 Computer software and equipment 6,503 6,260 Leasehold improvements 2,475 2,361 21,648 21,286 Less: Accumulated depreciation and amortization (19,752 ) (19,215 ) 1,896 2,071 Construction in-process 273 170 $ 2,169 $ 2,241 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets [Abstract] | |
Identifiable intangible assets | Identifiable intangible assets are recorded in Intangible assets in the accompanying Consolidated Balance Sheets and are comprised of the following: December 31, 2017 2016 (In thousands) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Purchased technology $ 1,754 $ (1,481 ) $ 1,604 $ (1,433 ) Customer relationships 1,300 (1,300 ) 1,300 (1,163 ) Trademark 480 (306 ) 480 (257 ) Covenant not to compete 146 (146 ) 146 (146 ) Patents 57 (46 ) 57 (43 ) Other 80 (80 ) 80 (80 ) Total $ 3,817 $ (3,359 ) $ 3,667 $ (3,122 ) |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued liabilities [Abstract] | |
Components of accrued liabilities | The components of accrued liabilities are: December 31, (In thousands) 2017 2016 Salaries and compensation related $ 2,288 $ 1,722 Warranty 186 169 Professional and consulting 209 153 Other 656 350 $ 3,339 $ 2,394 |
Stock incentive plans (Tables)
Stock incentive plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock incentive plans [Abstract] | |
Assumptions used in option valuation calculations | Under the assumptions indicated below, the weighted-average per share fair value of stock option grants for 2017, 2016, and 2015 was $1.95, $1.70 and $6.73, respectively. In 2017 and 2016, we also issued restricted share units for certain executives and directors that vest over a specified period of time, and in some instances require achieving certain performance metrics. The weighted-average per share fair value of these restricted share units was $7.53 and $7.31 in 2017 and 2016, respectively. No restricted share units were issued in 2015. The table below indicates the key assumptions used in the option valuation calculations for options granted in 2017, 2016, and 2015 and a discussion of our methodology for developing each of the assumptions used in the valuation model: Year ended December 31, 2017 2016 2015 Expected option term (in years) 6.8 6.9 6.8 Expected volatility 36.2 % 38.8 % 50.4 % Risk-free interest rate 2.1 % 1.2 % 1.6 % Dividend yield 4.3 % 4.5 % 4.7 % Expected Option Term Expected Volatility Risk-Free Interest Rate Dividend Yield |
Stock option activity | Option activity in the 2005 Equity Incentive Plan and 2014 Equity Incentive Plan is summarized below: Stock Options Restricted Share Units Number of Shares Average Price* Number of Units Average Price** Outstanding at December 31, 2016 1,073,900 $ 7.83 57,400 $ 7.94 Granted 169,500 8.30 65,600 8.30 Exercised (182,811 ) 6.42 (8,300 ) 7.44 Forfeited (80,763 ) 7.50 (13,425 ) 7.98 Expired (60,187 ) 9.32 - - Outstanding at December 31, 2017 919,639 $ 8.13 101,275 $ 8.21 * weighted-average exercise price per share ** weighted-average grant stock price per share |
Equity awards vested and expected to vest | The following summarizes information about equity awards outstanding that are vested and expect to vest and equity awards that are exercisable at December 31, 2017: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable Awards Average Price* Aggregate Intrinsic Value Remaining Term** Awards Average Price* Aggregate Intrinsic Value Remaining Term** Stock Options 919,639 $ 8.13 $ 4,709,000 6.4 483,224 $ 8.29 $ 2,396,000 4.8 Restricted stock units 95,135 - 1,261,000 2.0 - - - - * weighted-average exercise price per share ** weighted-average contractual remaining term in years Shares that are issued upon exercise of employee stock awards are newly issued shares and not issued from treasury stock. As of December 31, 2017, unrecognized compensation cost related to non-vested equity awards granted under our stock incentive plans is approximately $899,000, which is expected to be recognized over a weighted average period of 2.6 years |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income taxes [Abstract] | |
Components of income tax provision | The components of the income tax provision are as follows: Year Ended December 31, (In thousands) 2017 2016 2015 Current: Federal $ 2,379 $ 1,776 $ 450 State 114 70 22 Foreign (49 ) 2 - 2,444 1,848 472 Deferred: Federal 1,097 (257 ) 843 State 20 (38 ) 35 Foreign - - - 1,117 (295 ) 878 Income tax provision $ 3,561 $ 1,553 $ 1,350 |
Deferred tax assets and liabilities | Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements. Our deferred tax assets and liabilities were comprised of the following: December 31, (In thousands) 2017 2016 Deferred tax assets: Foreign net operating losses $ 328 $ 423 Depreciation 107 88 Inventory reserves 845 1,264 Deferred revenue 16 31 Warranty reserve 59 93 Stock compensation expense 694 1,273 Other accrued compensation 363 387 Other liabilities and reserves 246 329 Gross deferred tax assets 2,658 3,888 Valuation allowance (328 ) (423 ) Net deferred tax assets 2,330 3,465 Deferred tax liabilities: Other 22 33 Net deferred tax liabilities 22 33 Total net deferred tax assets $ 2,308 $ 3,432 |
Valuation allowance on deferred tax assets | As of December 31, 2017 a valuation allowance of $328,000 has been established for foreign net operating loss carryforwards that are not expected to be used. The following table summarizes the activity recorded in the valuation allowance on the deferred tax assets: Year ended December 31, (In thousands) 2017 2016 2015 Balance, beginning of period $ 423 $ 340 $ 282 Additions charged to income tax provision 67 83 58 Reductions credited to income tax provision (162 ) - - Balance, end of period $ 328 $ 423 $ 340 |
Effective tax rate reconciliation | Differences between the U.S. statutory federal income tax rate and our effective income tax rate are analyzed below: Year Ended December 31, 2017 2016 2015 Federal statutory tax rate 34.0 % 34.0 % 34.0 % U.S. corporate tax rate change 19.4 0.0 0.0 Stock option cancellations 1.7 0.0 0.0 Valuation allowance and tax accruals 1.6 1.6 1.3 State income taxes, net of federal income taxes 1.3 0.4 0.8 Uncertain tax positions (0.1 ) (0.1 ) (0.3 ) Miscellaneous permanent items (1.9 ) (1.2 ) (0.7 ) R&D credit (3.3 ) (4.6 ) (4.9 ) Other (0.1 ) (0.1 ) 0.2 Effective tax rate 52.6 % 30.0 % 30.4 % |
Unrecognized tax benefits | At December 31, 2017 and 2016, we had $104,000 and $111,000 of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. We are not aware of any events that could occur within the next twelve months that could cause a significant change in the total amount of unrecognized tax benefits. A tabular reconciliation of the gross amounts of unrecognized tax benefits at the beginning and end of the year is as follows: December 31, (In thousands) 2017 2016 Unrecognized tax benefits as of January 1 $ 111 $ 114 Tax positions taken during the current period 24 27 Lapse of statute of limitations (31 ) (30 ) Unrecognized tax benefits as of December 31 $ 104 $ 111 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per share [Abstract] | |
Earnings per share | For 2017, 2016, and 2015, earnings per share was computed as follows (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Net income $ 3,211 $ 3,617 $ 3,092 Shares: Basic: Weighted average common shares outstanding 7,423 7,610 7,818 Add: Dilutive effect of outstanding options as determined by the treasury stock method 169 45 36 Diluted: Weighted average common and common equivalent shares outstanding 7,592 7,655 7,854 Net income per common share: Basic $ 0.43 $ 0.48 $ 0.40 Diluted 0.42 0.47 0.39 |
Geographic area information (Ta
Geographic area information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Geographic area information [Abstract] | |
Net sales and fixed assets by geographic area | Information regarding our operations by geographic area is contained in the following table. These amounts in the geographic area table are based on the location of the customer and asset. Year Ended December 31, (In thousands) 2017 2016 2015 Net sales: United States $ 48,720 $ 45,542 $ 45,730 International 7,591 11,693 13,946 Total $ 56,311 $ 57,235 $ 59,676 Fixed assets, net: United States $ 1,548 $ 1,581 $ 1,769 International 621 660 738 Total $ 2,169 $ 2,241 $ 2,507 |
Quarterly results of operatio35
Quarterly results of operations (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly results of operations (unaudited) [Abstract] | |
Quarterly results of operations | Our quarterly results of operations for 2017 and 2016 are as follows: Quarter Ended (In thousands, except per share amounts) March 31 June 30 September 30 December 31 2017: Net sales $ 13,997 $ 13,596 $ 15,524 $ 13,194 Gross profit 6,093 6,430 7,519 6,620 Net income (loss) 943 867 1,813 (412 ) Net income (loss) per common share: Basic 0.13 0.12 0.24 (0.06 ) Diluted 0.13 0.12 0.24 (0.06 ) 2016: Net sales $ 14,357 $ 14,801 $ 14,474 $ 13,603 Gross profit 5,885 5,983 5,915 6,016 Net income 625 753 883 1,356 Net income per common share: Basic 0.08 0.10 0.12 0.18 Diluted 0.08 0.10 0.12 0.18 |
Description of business (Detail
Description of business (Details) | 12 Months Ended |
Dec. 31, 2017Segment | |
Description of business [Abstract] | |
Number of operating segments | 1 |
Summary of significant accoun37
Summary of significant accounting policies, Segment reporting (Details) | 12 Months Ended |
Dec. 31, 2017Segment | |
Segment reporting [Abstract] | |
Number of business segments | 1 |
Summary of significant accoun38
Summary of significant accounting policies, Allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts [Roll Forward] | |||
Balance, beginning of period | $ 50 | $ 50 | $ 100 |
Additions charged to costs and expenses | 50 | 0 | 7 |
Write-offs | 0 | 0 | (57) |
Balance, end of period | $ 100 | $ 50 | $ 50 |
Summary of significant accoun39
Summary of significant accounting policies, Fixed assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fixed assets [Abstract] | |||
Depreciation expense | $ 844 | $ 987 | $ 972 |
Tooling [Member] | |||
Fixed assets [Abstract] | |||
Estimated useful life | 5 years | ||
Machinery and Equipment [Member] | |||
Fixed assets [Abstract] | |||
Estimated useful life | 10 years | ||
Furniture and Office Equipment [Member] | Minimum [Member] | |||
Fixed assets [Abstract] | |||
Estimated useful life | 5 years | ||
Furniture and Office Equipment [Member] | Maximum [Member] | |||
Fixed assets [Abstract] | |||
Estimated useful life | 10 years | ||
Computer Software and Equipment [Member] | Minimum [Member] | |||
Fixed assets [Abstract] | |||
Estimated useful life | 3 years | ||
Computer Software and Equipment [Member] | Maximum [Member] | |||
Fixed assets [Abstract] | |||
Estimated useful life | 7 years |
Summary of significant accoun40
Summary of significant accounting policies, Concentration of credit risk (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable [Member] | IGT [Member] | |||
Concentration of credit risk [Abstract] | |||
Concentration risk percentage | 48.00% | 34.00% | |
Accounts Receivable [Member] | Suzo-Happ [Member] | |||
Concentration of credit risk [Abstract] | |||
Concentration risk percentage | 13.00% | 18.00% | |
Sales [Member] | IGT [Member] | |||
Concentration of credit risk [Abstract] | |||
Concentration risk percentage | 35.00% | 26.00% | 29.00% |
Sales [Member] | Suzo-Happ [Member] | |||
Concentration of credit risk [Abstract] | |||
Concentration risk percentage | 8.00% | 15.00% | 14.00% |
Summary of significant accoun41
Summary of significant accounting policies, Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accrued product warranty liability [Roll Forward] | |||
Balance, beginning of period | $ 267 | $ 277 | $ 287 |
Warranties issued | 259 | 254 | 267 |
Warranty settlements | (259) | (264) | (277) |
Balance, end of period | 267 | 267 | $ 277 |
Accrued product warranty liability, current | 186 | 169 | |
Accrued product warranty liability, long-term | $ 81 | $ 98 | |
Maximum [Member] | |||
Warranty [Abstract] | |||
Product warranty period | 36 months |
Summary of significant accoun42
Summary of significant accounting policies, Engineering, design and product development (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Engineering, design and product development [Abstract] | |||
Research and development expense | $ 4,303 | $ 4,425 | $ 3,599 |
Unamortized development costs of software | 0 | 2 | |
Capitalized computer software, amortization | $ 2 | $ 29 | $ 138 |
Summary of significant accoun43
Summary of significant accounting policies, Advertising (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Advertising [Abstract] | |||
Advertising expense | $ 974 | $ 703 | $ 858 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories [Abstract] | ||
Raw materials and purchased component parts | $ 6,322 | $ 6,298 |
Work-in-process | 0 | 8 |
Finished goods | 2,553 | 3,401 |
Inventories | $ 8,875 | $ 9,707 |
Fixed assets (Details)
Fixed assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fixed assets [Abstract] | |||
Fixed assets | $ 21,648 | $ 21,286 | |
Less: Accumulated depreciation and amortization | (19,752) | (19,215) | |
Fixed assets, net | 2,169 | 2,241 | $ 2,507 |
Tooling, Machinery and Equipment [Member] | |||
Fixed assets [Abstract] | |||
Fixed assets | 11,019 | 11,035 | |
Furniture and Office Equipment [Member] | |||
Fixed assets [Abstract] | |||
Fixed assets | 1,651 | 1,630 | |
Computer Software and Equipment [Member] | |||
Fixed assets [Abstract] | |||
Fixed assets | 6,503 | 6,260 | |
Leasehold Improvements [Member] | |||
Fixed assets [Abstract] | |||
Fixed assets | 2,475 | 2,361 | |
Fixed Assets, Excluding Construction in-Process [Member] | |||
Fixed assets [Abstract] | |||
Fixed assets, net | 1,896 | 2,071 | |
Construction in-Process [Member] | |||
Fixed assets [Abstract] | |||
Fixed assets | $ 273 | $ 170 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Identifiable intangible assets [Abstract] | |||
Gross amount | $ 3,817 | $ 3,667 | |
Accumulated amortization | (3,359) | (3,122) | |
Amortization expense | 237 | 343 | $ 454 |
Future amortization expense [Abstract] | |||
2,016 | 128 | ||
2,017 | 127 | ||
2,018 | 112 | ||
2,019 | 61 | ||
2,020 | 30 | ||
Purchased Technology [Member] | |||
Identifiable intangible assets [Abstract] | |||
Gross amount | 1,754 | 1,604 | |
Accumulated amortization | (1,481) | (1,433) | |
Customer Relationships [Member] | |||
Identifiable intangible assets [Abstract] | |||
Gross amount | 1,300 | 1,300 | |
Accumulated amortization | (1,300) | (1,163) | |
Trademarks [Member] | |||
Identifiable intangible assets [Abstract] | |||
Gross amount | 480 | 480 | |
Accumulated amortization | (306) | (257) | |
Covenant Not to Compete [Member] | |||
Identifiable intangible assets [Abstract] | |||
Gross amount | 146 | 146 | |
Accumulated amortization | (146) | (146) | |
Patents [Member] | |||
Identifiable intangible assets [Abstract] | |||
Gross amount | 57 | 57 | |
Accumulated amortization | (46) | (43) | |
Other [Member] | |||
Identifiable intangible assets [Abstract] | |||
Gross amount | 80 | 80 | |
Accumulated amortization | $ (80) | $ (80) |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued liabilities [Abstract] | ||
Salaries and compensation related | $ 2,288 | $ 1,722 |
Warranty | 186 | 169 |
Professional and consulting | 209 | 153 |
Other | 656 | 350 |
Accrued liabilities | $ 3,339 | $ 2,394 |
Retirement savings plan (Detail
Retirement savings plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement savings plan [Abstract] | |||
Employer matching contribution percentage | 50.00% | ||
Employee's contribution percentage for match | 6.00% | ||
Amount of matching contribution | $ 264 | $ 295 | $ 197 |
Borrowings (Details)
Borrowings (Details) - TD Bank [Member] - Revolving Credit Facility [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Nov. 22, 2017 | Nov. 26, 2014 | |
Credit Facility [Abstract] | |||
Maximum borrowing capacity | $ 20,000 | ||
Maturity date | Nov. 28, 2022 | ||
Percentage fee on unused borrowings | 0.125% | ||
Loans used to fund future cash dividend payments or treasury share buybacks | $ 12,500 | $ 10,000 | |
Undrawn commitments | $ 20,000 | ||
Prime Rate [Member] | |||
Credit Facility [Abstract] | |||
Basis spread on variable rate | 1.00% |
Commitments and contingencies (
Commitments and contingencies (Details) - USD ($) $ in Thousands | Apr. 08, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Litigation settlement [Abstract] | ||||||
Revolving credit line borrowings | $ 0 | $ 0 | $ 2,500 | |||
Settlement expenses associated with lawsuit | 0 | 0 | 1,738 | |||
Equipment and Real Property [Member] | ||||||
Rent expense under operating leases [Abstract] | ||||||
Rent expense under operating leases | 1,142 | $ 1,046 | $ 932 | |||
Future minimum rental payments under operating leases [Abstract] | ||||||
2,016 | 1,000 | |||||
2,017 | 1,015 | |||||
2,018 | 1,014 | |||||
2,019 | 692 | |||||
2,020 | 429 | |||||
Thereafter | $ 1,155 | |||||
Civil Complaint filed by Avery Dennison Corporation [Member] | Settled Litigation [Member] | ||||||
Litigation settlement [Abstract] | ||||||
Payment for litigation settlement | $ 3,600 | |||||
Settlement expenses associated with lawsuit | $ (25) | $ 3,625 |
Stock incentive plans, Stock in
Stock incentive plans, Stock incentive plans (Details) | 12 Months Ended | ||
Dec. 31, 2017Incentive$ / sharesshares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares | |
Stock incentive plans [Abstract] | |||
Number of primary stock incentive plans | Incentive | 2 | ||
Stock Options [Member] | |||
Stock incentive plans [Abstract] | |||
Exercise prices of options granted equals percentage of fair market value of common stock | 100.00% | ||
Term of award | 10 years | ||
Weighted average fair value of stock option grants (in dollars per share) | $ / shares | $ 1.95 | $ 1.70 | $ 6.73 |
Assumptions used in valuation model [Abstract] | |||
Expected option term | 6 years 9 months 18 days | 6 years 10 months 24 days | 6 years 9 months 18 days |
Expected volatility | 36.20% | 38.80% | 50.40% |
Risk-free interest rate | 2.10% | 1.20% | 1.60% |
Dividend yield | 4.30% | 4.50% | 4.70% |
Stock Options [Member] | Minimum [Member] | |||
Stock incentive plans [Abstract] | |||
Vesting period | 2 years | ||
Stock Options [Member] | Maximum [Member] | |||
Stock incentive plans [Abstract] | |||
Vesting period | 5 years | ||
Restricted Stock Units (RSUs) [Member] | |||
Stock incentive plans [Abstract] | |||
Weighted average fair value of stock option grants (in dollars per share) | $ / shares | $ 7.53 | $ 7.31 | |
2014 Equity Incentive Plan [Member] | |||
Stock incentive plans [Abstract] | |||
Number of shares authorized (in shares) | shares | 1,400,000 | ||
Number of shares available for grant (in shares) | shares | 665,991 |
Stock incentive plans, Share-ba
Stock incentive plans, Share-based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation [Abstract] | |||
Income tax benefit from share-based compensation expense | $ 134 | $ 184 | $ 148 |
General and Administrative Expense [Member] | |||
Share-based compensation [Abstract] | |||
Share-based compensation expense | $ 609 | $ 611 | $ 488 |
Stock incentive plans, Stock op
Stock incentive plans, Stock options (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of shares [Roll Forward] | |||
Options vested or expected to vest (in shares) | 95,135 | ||
Weighted average remaining contractual term [Abstract] | |||
Options vested or expected to vest | 2 years | ||
Aggregate intrinsic value [Abstract] | |||
Unrecognized compensation cost related to stock options | $ 899,000 | ||
Weighted average period to recognize compensation cost not yet recognized | 2 years 7 months 6 days | ||
Intrinsic value of stock options exercised | $ 958,000 | $ 6,000 | $ 32,000 |
Fair value of all awards vested | 1,104,000 | 961,000 | 944,000 |
Cash received from exercise of stock options | 1,043,000 | 23,000 | 263,000 |
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | $ 150,000 | $ 1,000 | $ 4,000 |
Stock Options [Member] | |||
Number of shares [Roll Forward] | |||
Options exercisable, end of period (in shares) | 483,224 | ||
Options vested or expected to vest (in shares) | 919,639 | ||
2005 Equity Incentive Plan and 2014 Equity Incentive Plan [Member] | |||
Number of shares [Roll Forward] | |||
Outstanding, beginning of period (in shares) | 57,400 | ||
Granted (in shares) | 65,600 | ||
Exercised (in shares) | (8,300) | ||
Forfeited (in shares) | (13,425) | ||
Expired (in shares) | 0 | ||
Outstanding, end of period (in shares) | 101,275 | 57,400 | |
Weighted average exercise price [Abstract] | |||
Outstanding, beginning of period (in dollars per share) | $ 7.94 | ||
Granted (in dollars per share) | 8.30 | ||
Exercised (in dollars per share) | 7.44 | ||
Forfeited (in dollars per share) | 7.98 | ||
Expired (in dollars per share) | 0 | ||
Outstanding, end of period (in dollars per share) | $ 8.21 | $ 7.94 | |
Options vested or expected to vest (in dollars per share) | $ 0 | ||
Aggregate intrinsic value [Abstract] | |||
Options vested or expected to vest | $ 1,261,000 | ||
2005 Equity Incentive Plan and 2014 Equity Incentive Plan [Member] | Stock Options [Member] | |||
Number of shares [Roll Forward] | |||
Outstanding, beginning of period (in shares) | 1,073,900 | ||
Granted (in shares) | 169,500 | ||
Exercised (in shares) | (182,811) | ||
Forfeited (in shares) | (80,763) | ||
Expired (in shares) | (60,187) | ||
Outstanding, end of period (in shares) | 919,639 | 1,073,900 | |
Weighted average exercise price [Abstract] | |||
Outstanding, beginning of period (in dollars per share) | $ 7.83 | ||
Granted (in dollars per share) | 8.30 | ||
Exercised (in dollars per share) | 6.42 | ||
Forfeited (in dollars per share) | 7.50 | ||
Expired (in dollars per share) | 9.32 | ||
Outstanding, end of period (in dollars per share) | 8.13 | $ 7.83 | |
Options exercisable, end of period (in dollars per share) | $ 8.29 | ||
Options vested or expected to vest (in dollars per share) | $ 8.13 | ||
Weighted average remaining contractual term [Abstract] | |||
Options exercisable, end of period | 4 years 9 months 18 days | ||
Options vested or expected to vest | 6 years 4 months 24 days | ||
Aggregate intrinsic value [Abstract] | |||
Options exercisable, end of period | $ 2,396,000 | ||
Options vested or expected to vest | $ 4,709,000 |
Stock incentive plans, Restrict
Stock incentive plans, Restricted stock (Details) - Restricted Stock [Member] - CEO and CFO [Member] - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted stock [Abstract] | |||||
Deferred stock units issued for incentive bonus (in shares) | 28,231 | 23,578 | |||
Deferred compensation expense | $ 151 | $ 121 | |||
Term of award | 3 years | ||||
Weighted average exercise price of deferred stock units (in dollars per share) | $ 6.98 |
Income taxes, Components of inc
Income taxes, Components of income tax provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current [Abstract] | |||
Federal | $ 2,379 | $ 1,776 | $ 450 |
State | 114 | 70 | 22 |
Foreign | (49) | 2 | 0 |
Income taxes current | 2,444 | 1,848 | 472 |
Deferred [Abstract] | |||
Federal | 1,097 | (257) | 843 |
State | 20 | (38) | 35 |
Foreign | 0 | 0 | 0 |
Income taxes deferred | 1,117 | (295) | 878 |
Income tax (benefit) provision | 3,561 | 1,553 | 1,350 |
Income taxes [Abstract] | |||
Foreign loss before taxes | 563 | $ 235 | $ (174) |
Federal [Member] | |||
Income taxes [Abstract] | |||
Net operating loss carryforward | 0 | ||
State [Member] | |||
Income taxes [Abstract] | |||
Net operating loss carryforward | 0 | ||
Tax credit carryforward | 0 | ||
R&D Credit [Member] | |||
Income taxes [Abstract] | |||
Tax credit carryforward | $ 0 |
Income taxes, Deferred tax asse
Income taxes, Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets [Abstract] | ||
Foreign net operating losses | $ 328 | $ 423 |
Depreciation | 107 | 88 |
Inventory reserves | 845 | 1,264 |
Deferred revenue | 16 | 31 |
Warranty reserve | 59 | 93 |
Stock compensation expense | 694 | 1,273 |
Other accrued compensation | 363 | 387 |
Other liabilities and reserves | 246 | 329 |
Gross deferred tax assets | 2,658 | 3,888 |
Valuation allowance | (328) | (423) |
Net deferred tax assets | 2,330 | 3,465 |
Deferred tax liabilities [Abstract] | ||
Other | 22 | 33 |
Net deferred tax liabilities | 22 | 33 |
Total net deferred tax assets | $ 2,308 | $ 3,432 |
Income taxes, Valuation allowan
Income taxes, Valuation allowance on deferred tax assets (Details) - Foreign Net Operating Loss Carryforwards [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation allowance [Roll Forward] | |||
Balance, beginning of period | $ 423 | $ 340 | $ 282 |
Additions charged to income tax provision | 67 | 83 | 58 |
Reductions credited to income tax provision | (162) | 0 | 0 |
Balance, end of period | $ 328 | $ 423 | $ 340 |
Income taxes, Effective tax rat
Income taxes, Effective tax rate reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective tax rate reconciliation [Abstract] | |||
Federal statutory tax rate | 34.00% | 34.00% | 34.00% |
U.S. corporate tax rate change | 19.40% | 0.00% | 0.00% |
Stock option cancellations | 1.70% | 0.00% | 0.00% |
Valuation allowance and tax accruals | 1.60% | 1.60% | 1.30% |
State income taxes, net of federal income taxes | 1.30% | 0.40% | 0.80% |
Uncertain tax positions | (0.10%) | (0.10%) | (0.30%) |
Miscellaneous permanent items | (1.90%) | (1.20%) | (0.70%) |
R&D credit | (3.30%) | (4.60%) | (4.90%) |
Other | (0.10%) | (0.10%) | 0.20% |
Effective tax rate | 52.60% | 30.00% | 30.40% |
Income taxes, Unrecognized tax
Income taxes, Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Unrecognized tax benefits [Roll Forward] | ||
Unrecognized tax benefits, beginning of period | $ 111 | $ 114 |
Tax positions taken during the current period | 24 | 27 |
Lapse of statute of limitations | (31) | (30) |
Unrecognized tax benefits, end of period | 104 | 111 |
Accrued interest and penalties related to uncertain tax positions | $ 17 | $ 18 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings per share [Abstract] | |||||||||||
Net income (loss) | $ (412) | $ 1,813 | $ 867 | $ 943 | $ 1,356 | $ 883 | $ 753 | $ 625 | $ 3,211 | $ 3,617 | $ 3,092 |
Shares [Abstract] | |||||||||||
Basic: Weighted average common shares outstanding (in shares) | 7,423 | 7,610 | 7,818 | ||||||||
Add: Dilutive effect of outstanding options as determined by the treasury stock method (in shares) | 169 | 45 | 36 | ||||||||
Diluted: Weighted average common and common equivalent shares outstanding (in shares) | 7,592 | 7,655 | 7,854 | ||||||||
Net income (loss) per common share: | |||||||||||
Basic (in dollars per share) | $ (0.06) | $ 0.24 | $ 0.12 | $ 0.13 | $ 0.18 | $ 0.12 | $ 0.10 | $ 0.08 | $ 0.43 | $ 0.48 | $ 0.40 |
Diluted (in dollars per share) | $ (0.06) | $ 0.24 | $ 0.12 | $ 0.13 | $ 0.18 | $ 0.12 | $ 0.10 | $ 0.08 | $ 0.42 | $ 0.47 | $ 0.39 |
Earnings per share [Abstract] | |||||||||||
Anti-dilutive securities excluded from computation of earnings per dilutive share (in shares) | 341 | 831 |
Stock repurchase program (Detai
Stock repurchase program (Details) - USD ($) $ / shares in Units, $ in Thousands | 7 Months Ended | 12 Months Ended | 22 Months Ended | 156 Months Ended | |
Jul. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Feb. 25, 2016 | |
Stock Repurchase Program [Member] | |||||
Stock repurchase program [Abstract] | |||||
Common stock repurchased (in shares) | 166,553 | 36,465 | 499,843 | 3,888,432 | |
Value of common stock repurchased | $ 1,020 | $ 358 | $ 3,929 | $ 30,110 | |
Average purchase price of common stock repurchased (in dollars per share) | $ 6.12 | $ 9.84 | $ 7.86 | $ 7.74 | |
New Stock Repurchase Program [Member] | Maximum [Member] | |||||
Stock repurchase program [Abstract] | |||||
Authorized value of common stock to be repurchased | $ 5,000 |
Geographic area information (De
Geographic area information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net sales [Abstract] | |||||||||||
Net sales | $ 13,194 | $ 15,524 | $ 13,596 | $ 13,997 | $ 13,603 | $ 14,474 | $ 14,801 | $ 14,357 | $ 56,311 | $ 57,235 | $ 59,676 |
Fixed assets, net [Abstract] | |||||||||||
Fixed assets, net | 2,169 | 2,241 | $ 2,169 | $ 2,241 | $ 2,507 | ||||||
International [Member] | |||||||||||
Fixed assets, net [Abstract] | |||||||||||
Concentration risk percentage | 14.00% | 20.00% | 23.00% | ||||||||
Europe [Member] | |||||||||||
Fixed assets, net [Abstract] | |||||||||||
Concentration risk percentage | 44.00% | 56.00% | 56.00% | ||||||||
Pacific Rim [Member] | |||||||||||
Fixed assets, net [Abstract] | |||||||||||
Concentration risk percentage | 32.00% | 34.00% | 34.00% | ||||||||
Canada [Member] | |||||||||||
Fixed assets, net [Abstract] | |||||||||||
Concentration risk percentage | 18.00% | 8.00% | 8.00% | ||||||||
Reportable Geographical Components [Member] | United States [Member] | |||||||||||
Net sales [Abstract] | |||||||||||
Net sales | $ 48,720 | $ 45,542 | $ 45,730 | ||||||||
Fixed assets, net [Abstract] | |||||||||||
Fixed assets, net | 1,548 | 1,581 | 1,548 | 1,581 | 1,769 | ||||||
Reportable Geographical Components [Member] | International [Member] | |||||||||||
Net sales [Abstract] | |||||||||||
Net sales | 7,591 | 11,693 | 13,946 | ||||||||
Fixed assets, net [Abstract] | |||||||||||
Fixed assets, net | $ 621 | $ 660 | $ 621 | $ 660 | $ 738 |
Quarterly results of operatio63
Quarterly results of operations (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly results of operations (unaudited) [Abstract] | |||||||||||
Net sales | $ 13,194 | $ 15,524 | $ 13,596 | $ 13,997 | $ 13,603 | $ 14,474 | $ 14,801 | $ 14,357 | $ 56,311 | $ 57,235 | $ 59,676 |
Gross profit | 6,620 | 7,519 | 6,430 | 6,093 | 6,016 | 5,915 | 5,983 | 5,885 | 26,662 | 23,799 | 24,978 |
Net income (loss) | $ (412) | $ 1,813 | $ 867 | $ 943 | $ 1,356 | $ 883 | $ 753 | $ 625 | $ 3,211 | $ 3,617 | $ 3,092 |
Net income (loss) per common share: | |||||||||||
Basic (in dollars per share) | $ (0.06) | $ 0.24 | $ 0.12 | $ 0.13 | $ 0.18 | $ 0.12 | $ 0.10 | $ 0.08 | $ 0.43 | $ 0.48 | $ 0.40 |
Diluted (in dollars per share) | $ (0.06) | $ 0.24 | $ 0.12 | $ 0.13 | $ 0.18 | $ 0.12 | $ 0.10 | $ 0.08 | $ 0.42 | $ 0.47 | $ 0.39 |
Subsequent event (Details)
Subsequent event (Details) $ in Thousands | Mar. 01, 2018USD ($) |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Authorized value of common stock to be repurchased | $ 5,000 |