Profire Energy (PFIE) 10-Q 8 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 06, 2019
Document and Entity Information:
Entity Registrant Name	Profire Energy Inc
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Trading Symbol	pfie
Amendment Flag	false
Entity Central Index Key	0001289636
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		47,326,774
Entity Filer Category	Smaller Reporting Company
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 11,456,878	$ 10,101,932
Short-term investments	806,941	961,256
Short-term investments - other	3,063,843	3,596,484
Accounts receivable, net	6,444,792	6,885,296
Inventories, net	9,062,616	9,659,571
Prepaid expenses & other current assets	719,296	473,726
Income tax receivable	284,805	173,124
Total Current Assets	31,839,171	31,851,389
LONG-TERM ASSETS
Net deferred tax asset	0	85,092
Long-term investments	8,099,852	7,978,380
Financing right-of-use asset	116,128	0
Property and equipment, net	8,276,796	8,020,462
Goodwill	997,701	997,701
Intangible assets, net	430,776	429,956
Total Long-Term Assets	17,921,253	17,511,591
TOTAL ASSETS	49,760,424	49,362,980
CURRENT LIABILITIES
Accounts payable	1,067,595	1,177,985
Accrued vacation	373,995	311,435
Accrued liabilities	1,003,913	1,445,510
Current financing lease liability	65,098	0
Income taxes payable	1,046,858	1,172,191
Total Current Liabilities	3,557,459	4,107,121
LONG-TERM LIABILITIES
Net deferred income tax liability	38,672	0
Long-term financing lease liability	51,674	0
TOTAL LIABILITIES	3,647,805	4,107,121
STOCKHOLDERS' EQUITY
Preferred shares: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding	0	0
Common shares: $0.001 par value, 100,000,000 shares authorized: 49,859,011 issued and 47,308,224 outstanding at March 31, 2019, and 49,707,805 issued and 47,932,305 outstanding at December 31, 2018	49,859	49,708
Treasury stock, at cost	(3,943,063)	(2,609,485)
Additional paid-in capital	28,331,144	28,027,742
Accumulated other comprehensive loss	(2,677,516)	(2,895,683)
Retained earnings	24,352,195	22,683,577
TOTAL STOCKHOLDERS' EQUITY	46,112,619	45,255,859
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 49,760,424	$ 49,362,980

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Stock Transactions, Parenthetical Disclosures [Abstract]
Preferred stock, par value (dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (shares)	10,000,000	10,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (shares)	100,000,000	100,000,000
Common stock, shares issued (shares)	49,859,011	49,707,805
Common stock, shares outstanding (shares)	47,308,224	47,932,305

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Other Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
REVENUES
Total Revenues	$ 10,833,058	$ 12,169,718
COST OF SALES
Total Cost of Goods Sold	5,068,186	6,039,577
GROSS PROFIT	5,764,872	6,130,141
OPERATING EXPENSES
General and administrative expenses	3,161,530	3,341,903
Research and development	349,058	403,220
Depreciation and amortization expense	116,223	128,717
Total Operating Expenses	3,626,811	3,873,840
INCOME FROM OPERATIONS	2,138,061	2,256,301
OTHER INCOME (EXPENSE)
Gain on sale of fixed assets	16,930	64,831
Other income (expense)	(551)	(1,792)
Interest income	91,703	50,708
Total Other Income	108,082	113,747
INCOME BEFORE INCOME TAXES	2,246,143	2,370,048
INCOME TAX EXPENSE	577,525	493,820
NET INCOME	1,668,618	1,876,228
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)	149,415	(239,129)
Unrealized gains (losses) on investments	68,752	(33,235)
Total Other Comprehensive Income (Loss)	218,167	(272,364)
COMPREHENSIVE INCOME	$ 1,886,785	$ 1,603,864
BASIC EARNINGS PER SHARE (dollars per share)	$ 0.04	$ 0.04
FULLY DILUTED EARNINGS PER SHARE (dollars per share)	$ 0.03	$ 0.04
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (shares)	47,437,424	48,670,305
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (shares)	48,084,390	49,744,101
Product
REVENUES
Total Revenues	$ 10,198,635	$ 11,454,615
COST OF SALES
Total Cost of Goods Sold	4,570,988	5,557,710
Service
REVENUES
Total Revenues	634,423	715,103
COST OF SALES
Total Cost of Goods Sold	$ 497,198	$ 481,867

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
OPERATING ACTIVITIES
Net income	$ 1,668,618	$ 1,876,228
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	249,889	220,245
Gain on sale of fixed assets	(16,930)	(64,731)
Bad debt expense	177,906	63,566
Stock awards issued for services	445,984	581,619
Changes in operating assets and liabilities:
Changes in accounts receivable	275,440	(746,179)
Changes in income taxes receivable/payable	(234,042)	591,277
Changes in inventories	656,988	(863,148)
Changes in prepaid expenses	(239,395)	104,008
Changes in deferred tax asset/liability	123,764	(111,406)
Changes in accounts payable and accrued liabilities	(499,721)	(198,540)
Net Cash Provided by Operating Activities	2,608,501	1,452,939
INVESTING ACTIVITIES
Proceeds from sale of equipment	18,400	139,763
Sale (Purchase) of investments	647,739	(484,142)
Purchase of fixed assets	(443,883)	(234,778)
Net Cash Provided by (Used in) Investing Activities	222,256	(579,157)
FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability	(143,022)	(83,600)
Cash received in exercise of stock options	0	74,241
Purchase of Treasury stock	(1,333,579)	0
Principal paid towards lease liability	(15,717)	0
Net Cash Used in Financing Activities	(1,492,318)	(9,359)
Effect of exchange rate changes on cash	16,507	(113,644)
NET INCREASE IN CASH	1,354,946	750,779
CASH AT BEGINNING OF PERIOD	10,101,932	11,445,799
CASH AT END OF PERIOD	11,456,878	12,196,578
CASH PAID FOR:
Interest	1,411	0
Income taxes	$ 711,524	$ 0

CONDENSED FINANCIAL STATEMENTS

CONDENSED FINANCIAL STATEMENTS	3 Months Ended
	Mar. 31, 2019
Condensed Financial Information of Parent Company Only Disclosure [Abstract]
CONDENSED FINANCIAL STATEMENTS	CONDENSED FINANCIAL STATEMENTS Except where the context otherwise requires, all references herein to the "Company," "Profire," "we," "us," "our," or similar words and phrases are to Profire Energy, Inc. and its wholly owned subsidiary, taken together. The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2019 and for all periods presented herein have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements contained in its annual report on Form 10-K for the year ended December 31, 2018 ("Form 10-K"). The results of operations for the three month periods ended March 31, 2019 and 2018 are not necessarily indicative of the operating results for the full years.

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Line of Business This Organization and Summary of Significant Accounting Policies of Profire Energy, Inc. and its subsidiary (the "Company") is presented to assist in understanding the Company's condensed consolidated financial statements. The Company's accounting policies conform to accounting principles generally accepted in the United States of America ("US GAAP"). The Company provides burner- and chemical-management products and services for the oil and gas industry primarily in the US and Canadian markets. Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 1 of the Notes to the Consolidated Financial Statements in the Company's most recent Form 10-K, except as discussed below. Leases In February of 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02 - Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January 1, 2019 using the modified retrospective transition method. Prior periods have not been restated. Upon implementation, the Company recognized an initial right-of-use asset of $132,488 and lease liability of $132,488. Due to the simplistic nature of the Company's leases, no change to retained earnings was required. See Note 8 for further details. Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's financial position, results of operations or cash flows.

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2019
Inventory Disclosure [Abstract]
INVENTORY	INVENTORY Inventories consisted of the following at each balance sheet date: As of March 31, 2019 December 31, 2018 Raw materials $ 436,494 $ 76,319 Finished goods 9,484,787 10,474,522 Work in process — — Subtotal 9,921,281 10,550,841 Reserve for obsolescence (858,665) (891,270) Total $ 9,062,616 $ 9,659,571

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2019
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY As of March 31, 2019, and December 31, 2018, the Company held 2,550,787 and 1,775,500 shares of its common stock in treasury at a total cost of $3,943,063 and $2,609,485, respectively. A reconciliation of the changes in stockholders' equity during the three months ended March 31, 2019, and 2018, is shown below: Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Treasury Stock Retained Earnings Total Stockholders' Equity Shares Amount Balance, December 31, 2018 47,932,305 $ 49,708 $ 28,027,742 $ (2,895,683) $ (2,609,485) $ 22,683,577 $ 45,255,859 Stock based compensation 66,714 66,714 Stock issued in exercise of stock options 2,483 2 (2) — Stock issued in settlement of RSUs 13,604 14 (14) — Stock issued related to AIP 135,119 135 379,726 379,861 Tax withholdings paid related to stock based compensation (143,022) (143,022) Treasury stock repurchased (775,287) (1,333,578) (1,333,578) Foreign currency translation 149,415 149,415 Unrealized gains on investments 68,752 68,752 Net income 1,668,618 1,668,618 Balance, March 31, 2019 47,308,224 $ 49,859 $ 28,331,144 $ (2,677,516) $ (3,943,063) $ 24,352,195 $ 46,112,619 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Treasury Stock Retained Earnings Total Stockholders' Equity Shares Amount Balance, December 31, 2017 48,606,425 $ 53,931 $ 27,535,469 $ (2,200,462) $ (6,890,349) $ 25,548,835 $ 44,047,424 Stock based compensation 390,585 390,585 Stock issued in exercise of stock options 81,229 81 258,811 258,892 Stock issued in settlement of RSUs 118,762 119 (119) — Tax withholdings related to stock based compensation (83,600) (83,600) Treasury stock repurchased — — Foreign currency translation (239,129) (239,129) Unrealized losses on investments (33,235) (33,235) Net income 1,876,228 1,876,228 Balance, March 31, 2018 48,806,416 $ 54,131 $ 28,101,146 $ (2,472,826) $ (6,890,349) $ 27,425,063 $ 46,217,165

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2019
Segment Reporting [Abstract]
SEGMENT INFORMATION	SEGMENT INFORMATION The Company operates in the United States and Canada. Segment information for these geographic areas is as follows: For the Three Months Ended March 31, Sales 2019 2018 Canada $ 935,638 $ 1,298,832 United States 9,897,420 10,870,886 Total Consolidated $ 10,833,058 $ 12,169,718 For the Three Months Ended March 31, Profit (Loss) 2019 2018 Canada $ (382,040) $ (434,667) United States 2,050,658 2,310,895 Total Consolidated $ 1,668,618 $ 1,876,228 As of Long-Lived Assets March 31, 2019 December 31, 2018 Canada $ 2,410,736 $ 2,079,173 United States 5,866,060 5,941,289 Total Consolidated $ 8,276,796 $ 8,020,462

REVENUE

REVENUE	3 Months Ended
	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
REVENUE	REVENUE Performance Obligations Our performance obligations include providing product and servicing our product. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the contract. Contract Balances We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contact) for costs related to contracts that are estimated to be completed within one year. All of the current contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. We also did not have any material contract liabilities because we typically do not receive payments in advance of recognizing revenue. Disaggregation of Revenue All revenue recognized in the income statement is considered to be revenue from contracts with customers. The table below shows revenue by category:

BASIC AND DILUTED EARNINGS PER

BASIC AND DILUTED EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
BASIC AND DILUTED EARNINGS PER SHARE	BASIC AND DILUTED EARNINGS PER SHARE The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation: For the Three Months Ended March 31, 2019 2018 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income available to common stockholders 1,668,618 47,437,424 $ 0.04 1,876,228 48,670,305 $ 0.04 Effect of Dilutive Securities Stock options & RSUs — 646,966 — 1,073,796 Diluted EPS Net income available to common stockholders + assumed conversions 1,668,618 48,084,390 $ 0.03 1,876,228 49,744,101 $ 0.04 Options to purchase 245,600 and 266,000 shares of common stock at a weighted average price of $3.88 and $3.89 per share were outstanding during the three months ended March 31, 2019, and 2018, respectively, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These options, which expire between November 2019 and May 2020, were still outstanding at March 31, 2019.

LEASES (Notes)

LEASES (Notes)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
LEASES	LEASES We have leases for office equipment and office space. The leases for office equipment are classified as financing leases and the typical term is 36 months. We have the option to extend most office equipment leases, but we do not intend to do so. Accordingly, no extensions have been recognized in the right-of-use asset or lease liability. The office equipment lease payments are not variable and the lease agreements do not include any non-lease components, residual value guarantees, or restrictions. There are no interest rates implicit in the office equipment lease agreements, so we used our incremental borrowing rate as the discount rate. Our weighted average discount rate is 4.50% and the weighted average remaining lease term is 26 months. The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended March 31, 2019 Amortization of right-of-use assets $ 16,360 Interest on lease liabilities $ 1,411 Total financing lease cost $ 17,771 The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2019 $ 51,449 2020 44,204 2021 22,131 2022 4,973 2023 — Thereafter — Total future minimum lease payments $ 122,757 Less: Amount representing interest 5,985 Present value of future payments $ 116,772 Current portion 65,098 Long-term portion 51,674 Because our office space leases are short-term, we have elected not to recognize them on our balance sheet under the short-term recognition exemption. During the three months ended March 31, 2019, we recognized $8,906 in short-term lease costs associated with office space leases.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS In accordance with ASC 855 "Subsequent Events," Company Management reviewed all material events through the date this report was issued and the following subsequent events occurred: On April 22, 2019, the Board of Directors (the “Board”) of Profire Energy, Inc. (the “Company”) approved the 2019 Executive Incentive Plan (the “EIP”) for Brenton W. Hatch, the Company’s President and Chief Executive Officer, Ryan W. Oviatt, the Company’s Chief Financial Officer, Cameron M. Tidball the Company’s Chief Business Development Officer, Jay G. Fugal, the Company’s Vice President of Operations, and Patrick D. Fisher, the Company’s Vice President of Product development. The EIP provides for the potential award of bonuses to the participants based on the Company’s financial performance in fiscal 2019. If earned, the bonuses will be payable in cash and stock, and the stock portion of the bonuses is intended to constitute an award under the Company’s 2014 Equity Incentive Plan, as amended (the “Plan”). In addition to the EIP, the Board also approved as a long term incentive plan the grants of a restricted stock unit awards to Messrs. Oviatt, Tidball, Fugal, and Fisher pursuant to the Plan (the “2019 LTIP”). 2019 EIP Under the terms of the EIP, each participating executive officer has been assigned a target bonus amount for fiscal 2019. The target bonus amount for Mr. Hatch is $412,000, the target bonus amount for Mr. Oviatt is $90,125, the target bonus amount for Mr. Tidball is $84,357, the target bonus for Mr. Fugal is $41,200, and the target bonus for Mr. Fisher is $38,750 CAD. Under no circumstance can the participants receive more than two times the assigned target bonus. Participants will be eligible to receive bonuses based upon reaching or exceeding performance goals established by the Board or its Compensation Committee for fiscal 2019. The performance goals in the EIP are based on the Company’s total revenue, net income, free cash flow, and product development milestones. Each of these performance goals will be weighted 25% in calculating bonus amounts. The bonus amounts earned under the EIP, if any, will be paid 50% in cash and 50% in shares of Restricted Stock under the Plan. In no event shall the total award exceed 200% of the target bonus amount for each participant, or exceed any limitations otherwise set forth in the Plan. The actual bonus amounts, if any, will be determined by the Compensation Committee of the Board upon the completion of fiscal 2019 and paid by March 15, 2020, subject to all applicable tax withholding. 2019 LTIP The 2019 LTIP consists of total awards of up to 66,213 restricted stock units (“Units”) to Mr. Oviatt, up to 51,646 Units to Mr. Tidball, up to 35,313 Units to Mr. Fugal, and up to 24,862 Units to Mr. Fisher pursuant to two separate Restricted Stock Unit Award Agreements to be entered between the Company and each participant. One such agreement will cover 33% of each award recipient’s Units that are subject to time-based vesting, and the other such agreement will cover the remaining 67% of such award recipient’s Units that may vest based on performance metrics. Upon vesting, the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested Unit. The vesting period of the 2019 LTIP began on January 1, 2019 and terminates on December 31, 2021 (the “Performance Vesting Date”). The Units subject to time-based vesting, including 22,071 Units to Mr. Oviatt, 17,215 Units for Mr. Tidball, 11,771 Units to Mr. Fugal, and 8,287 Units to Mr. Fisher, will vest in three equal and annual installments beginning December 31, 2019 and ending on December 31, 2021 if the award recipients’ employment continues with the Company through such dates. The performance-vesting Units, including up to 44,142 Units to Mr. Oviatt, 34,431 Units for Mr. Tidball, 23,542 Units to Mr. Fugal, and 16,575 Units to Mr. Fisher, may vest based upon the following Company performance metrics: Performance Metric Weight Target Above Target Outstanding Three Year Average Revenue Growth Rate 1/3 8 % 10 % 13 % Operating Income as a Percentage of Revenue (Three Year Target) 1/3 8 % 10 % 12 % Return on Invested Capital (Three Year Target) 1/3 12 % 17 % 21 % One-third of such performance-vesting Units, consisting of 14,714 Units for Mr. Oviatt, 11,477 Units for Mr. Tidball, approximately 7,847 Units for Mr. Fugal, and 5,525 Units for Mr. Fisher, may vest for each of the three performance metrics identified in the table above. The number of Units that will vest for each performance metric on the Performance Vesting Date shall be determined as follows: • if the “Target” level for such performance metric is not achieved, none o f the Units relating to such performance metric will vest; • if the “Target” level (but no higher level) for such performance metric is achieved, 50% of the Units relating to such performance metric will vest; • if the “Above Target” level (but no higher level) for such performance metric is achieved, 75% of the Units relating to such performance metric will vest; and • if the “Outstanding” level for such performance metric is achieved, 100% of the Units relating to such performance metric will vest. The foregoing summary of the 2019 Executive Incentive Plan and the Restricted Stock Unit Award Agreements is qualified in its entirety by the text of the 2019 Executive Incentive Plan and each of the Restricted Stock Unit Award Agreements, which the Company intends to file as exhibits to its Quarterly Report on Form 10-Q for the quarter ending June 30, 2019.

ORGANIZATION AND SUMMARY OF S_2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Leases	LeasesIn February of 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02 - Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January 1, 2019 using the modified retrospective transition method. Prior periods have not been restated
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's financial position, results of operations or cash flows.
Revenue From Contract With Customer	Performance Obligations Our performance obligations include providing product and servicing our product. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the contract. Contract Balances We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contact) for costs related to contracts that are estimated to be completed within one year. All of the current contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. We also did not have any material contract liabilities because we typically do not receive payments in advance of recognizing revenue.

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2019
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventories consisted of the following at each balance sheet date: As of March 31, 2019 December 31, 2018 Raw materials $ 436,494 $ 76,319 Finished goods 9,484,787 10,474,522 Work in process — — Subtotal 9,921,281 10,550,841 Reserve for obsolescence (858,665) (891,270) Total $ 9,062,616 $ 9,659,571

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	3 Months Ended
	Mar. 31, 2019
Stockholders' Equity Note [Abstract]
Schedule of Stockholders Equity	A reconciliation of the changes in stockholders' equity during the three months ended March 31, 2019, and 2018, is shown below: Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Treasury Stock Retained Earnings Total Stockholders' Equity Shares Amount Balance, December 31, 2018 47,932,305 $ 49,708 $ 28,027,742 $ (2,895,683) $ (2,609,485) $ 22,683,577 $ 45,255,859 Stock based compensation 66,714 66,714 Stock issued in exercise of stock options 2,483 2 (2) — Stock issued in settlement of RSUs 13,604 14 (14) — Stock issued related to AIP 135,119 135 379,726 379,861 Tax withholdings paid related to stock based compensation (143,022) (143,022) Treasury stock repurchased (775,287) (1,333,578) (1,333,578) Foreign currency translation 149,415 149,415 Unrealized gains on investments 68,752 68,752 Net income 1,668,618 1,668,618 Balance, March 31, 2019 47,308,224 $ 49,859 $ 28,331,144 $ (2,677,516) $ (3,943,063) $ 24,352,195 $ 46,112,619 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Treasury Stock Retained Earnings Total Stockholders' Equity Shares Amount Balance, December 31, 2017 48,606,425 $ 53,931 $ 27,535,469 $ (2,200,462) $ (6,890,349) $ 25,548,835 $ 44,047,424 Stock based compensation 390,585 390,585 Stock issued in exercise of stock options 81,229 81 258,811 258,892 Stock issued in settlement of RSUs 118,762 119 (119) — Tax withholdings related to stock based compensation (83,600) (83,600) Treasury stock repurchased — — Foreign currency translation (239,129) (239,129) Unrealized losses on investments (33,235) (33,235) Net income 1,876,228 1,876,228 Balance, March 31, 2018 48,806,416 $ 54,131 $ 28,101,146 $ (2,472,826) $ (6,890,349) $ 27,425,063 $ 46,217,165

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2019
Segment Reporting [Abstract]
Schedule of Segment Information for Geographic Areas	Segment information for these geographic areas is as follows: For the Three Months Ended March 31, Sales 2019 2018 Canada $ 935,638 $ 1,298,832 United States 9,897,420 10,870,886 Total Consolidated $ 10,833,058 $ 12,169,718 For the Three Months Ended March 31, Profit (Loss) 2019 2018 Canada $ (382,040) $ (434,667) United States 2,050,658 2,310,895 Total Consolidated $ 1,668,618 $ 1,876,228 As of Long-Lived Assets March 31, 2019 December 31, 2018 Canada $ 2,410,736 $ 2,079,173 United States 5,866,060 5,941,289 Total Consolidated $ 8,276,796 $ 8,020,462

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue by Product Line	The table below shows revenue by category: For the Three Months Ended March 31, 2019 2018 Electronics $ 4,646,597 $ 4,807,030 Manufactured 430,593 954,779 Re-Sell 5,121,445 5,692,806 Service 634,423 715,103 Total Revenue $ 10,833,058 $ 12,169,718

BASIC AND DILUTED EARNINGS PE_2

BASIC AND DILUTED EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation: For the Three Months Ended March 31, 2019 2018 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income available to common stockholders 1,668,618 47,437,424 $ 0.04 1,876,228 48,670,305 $ 0.04 Effect of Dilutive Securities Stock options & RSUs — 646,966 — 1,073,796 Diluted EPS Net income available to common stockholders + assumed conversions 1,668,618 48,084,390 $ 0.03 1,876,228 49,744,101 $ 0.04

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Components of Financing Lease Cost	The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended March 31, 2019 Amortization of right-of-use assets $ 16,360 Interest on lease liabilities $ 1,411 Total financing lease cost $ 17,771
Future Minimum Lease Payments to Discounted Finance Lease Liability	The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2019 $ 51,449 2020 44,204 2021 22,131 2022 4,973 2023 — Thereafter — Total future minimum lease payments $ 122,757 Less: Amount representing interest 5,985 Present value of future payments $ 116,772 Current portion 65,098 Long-term portion 51,674

SUBSEQUENT EVENTS (Tables)

SUBSEQUENT EVENTS (Tables)	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
Schedule of Subsequent Events	The performance-vesting Units, including up to 44,142 Units to Mr. Oviatt, 34,431 Units for Mr. Tidball, 23,542 Units to Mr. Fugal, and 16,575 Units to Mr. Fisher, may vest based upon the following Company performance metrics: Performance Metric Weight Target Above Target Outstanding Three Year Average Revenue Growth Rate 1/3 8 % 10 % 13 % Operating Income as a Percentage of Revenue (Three Year Target) 1/3 8 % 10 % 12 % Return on Invested Capital (Three Year Target) 1/3 12 % 17 % 21 %

ORGANIZATION AND SUMMARY OF S_3

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Financing right-of-use asset	$ 116,128	$ 132,488	$ 0
Finance lease liability	$ 116,772	$ 132,488

INVENTORY (Details)

INVENTORY (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 436,494	$ 76,319
Finished goods	9,484,787	10,474,522
Work in process	0	0
Subtotal	9,921,281	10,550,841
Reserve for Obsolescence	(858,665)	(891,270)
Total	$ 9,062,616	$ 9,659,571

STOCKHOLDERS' EQUITY - Narrativ

STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Stockholders' Equity Note [Abstract]
Treasury stock (in shares)	2,550,787	1,775,500
Treasury stock, at cost	$ 3,943,063	$ 2,609,485

STOCKHOLDERS' EQUITY - Reconcil

STOCKHOLDERS' EQUITY - Reconciliation of Changes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	$ 45,255,859	$ 44,047,424
Stock based compensation	66,714	390,585
Stock issued in exercise of stock options	0	258,892
Stock issued in settlement of RSUs	0	0
Stock issued related to AIP	379,861
Tax withholdings paid related to stock based compensation	(143,022)	(83,600)
Treasury stock repurchased	(1,333,578)	0
Foreign currency translation gain (loss)	149,415	(239,129)
Unrealized gains on investments	68,752	(33,235)
Net income	1,668,618	1,876,228
Balance, end of period	$ 46,112,619	$ 46,217,165
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period (shares)	47,932,305	48,606,425
Balance, beginning of period	$ 49,708	$ 53,931
Stock issued in exercise of stock options (shares)	2,483	81,229
Stock issued in exercise of stock options	$ 2	$ 81
Stock issued in settlement of RSUs (shares)	13,604	118,762
Stock issued in settlement of RSUs	$ 14	$ 119
Stock issued related to AIP (shares)	135,119
Stock issued related to AIP	$ 135
Treasury stock repurchased (shares)	(775,287)
Balance, end of period (shares)	47,308,224	48,806,416
Balance, end of period	$ 49,859	$ 54,131
Additional Paid-In Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	28,027,742	27,535,469
Stock based compensation	66,714	390,585
Stock issued in exercise of stock options	(2)	258,811
Stock issued in settlement of RSUs	(14)	(119)
Stock issued related to AIP	379,726
Tax withholdings paid related to stock based compensation	(143,022)	(83,600)
Balance, end of period	28,331,144	28,101,146
Accumulated Other Comprehensive Income (Loss)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	(2,895,683)	(2,200,462)
Foreign currency translation gain (loss)	149,415	(239,129)
Unrealized gains on investments	68,752	(33,235)
Balance, end of period	(2,677,516)	(2,472,826)
Treasury Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	(2,609,485)	(6,890,349)
Treasury stock repurchased	(1,333,578)
Balance, end of period	(3,943,063)	(6,890,349)
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	22,683,577	25,548,835
Net income	1,668,618	1,876,228
Balance, end of period	$ 24,352,195	$ 27,425,063

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Sales	$ 10,833,058	$ 12,169,718
Net income	1,668,618	1,876,228
Long-lived assets	8,276,796		$ 8,020,462
Canada
Segment Reporting Information [Line Items]
Sales	935,638	1,298,832
Net income	(382,040)	(434,667)
Long-lived assets	2,410,736		2,079,173
United States
Segment Reporting Information [Line Items]
Sales	9,897,420	10,870,886
Net income	2,050,658	$ 2,310,895
Long-lived assets	$ 5,866,060		$ 5,941,289

REVENUE - Narrative (Details)

REVENUE - Narrative (Details)	3 Months Ended
	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Timing of satisfaction, performance obligation	All of the current contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account.

REVENUE - Disaggregation of Rev

REVENUE - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	$ 10,833,058	$ 12,169,718
Electronics
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	4,646,597	4,807,030
Manufactured
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	430,593	954,779
Re-Sell
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	5,121,445	5,692,806
Service
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	$ 634,423	$ 715,103

BASIC AND DILUTED EARNINGS PE_3

BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income (Numerator)
Net income available to common stockholders	$ 1,668,618	$ 1,876,228
Stock options & RSUs	0	0
Net income available to common stockholders assumed conversions	$ 1,668,618	$ 1,876,228
Weighted Average Shares (Denominator)
Weighted average basic shares outstanding (shares)	47,437,424	48,670,305
Effect of Dilutive Securities, Stock options & RSUs (shares)	646,966	1,073,796
Weighted average diluted shares outstanding (shares)	48,084,390	49,744,101
Per-Share Amount
Basic earnings per share (dollars per share)	$ 0.04	$ 0.04
Diluted earnings per share (dollars per share)	$ 0.03	$ 0.04
Antidilutive securities excluded from computation of earnings per share (shares)	245,600	266,000
Weighted average (dollars per share)	$ 3.88	$ 3.89

LEASES - Narrative (Details)

LEASES - Narrative (Details)	3 Months Ended
	Mar. 31, 2019USD ($)
Leases [Abstract]
Lease term	36 months
Weighted average discount rate	4.50%
Weighted average remaining lease term	26 months
Short-term lease cost	$ 8,906

LEASES - Components of Financin

LEASES - Components of Financing Lease Cost (Details)	3 Months Ended
	Mar. 31, 2019USD ($)
Leases [Abstract]
Amortization of right-of-use assets	$ 16,360
Interest on lease liabilities	1,411
Total financing lease cost	$ 17,771

LEASES - Future Minimum Lease P

LEASES - Future Minimum Lease Payments to Discounted Finance Lease Liability (Details) - USD ($)	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Years ending December 31,
2019	$ 51,449
2020	44,204
2021	22,131
2022	4,973
2023	0
Thereafter	0
Total future minimum lease payments	122,757
Less: Amount representing interest	5,985
Present value of future payments	116,772	$ 132,488
Current financing lease liability	65,098		$ 0
Long-term financing lease liability	$ 51,674		$ 0

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Apr. 22, 2019 - Subsequent Event	CAD ($)shares	USD ($)shares
2019 EIP
Subsequent Event [Line Items]
Performance goal weight	25.00%	25.00%
Percentage of bonus paid in cash	50.00%	50.00%
Percentage of bonus paid in stock	50.00%	50.00%
Maximum percentage of target bonus	200.00%	200.00%
2019 EIP | Chief Executive Officer
Subsequent Event [Line Items]
Executive compensation target bonus payout | $		$ 412,000
2019 EIP | Chief Financial Officer
Subsequent Event [Line Items]
Executive compensation target bonus payout | $		90,125
2019 EIP | Chief Business Development Officer
Subsequent Event [Line Items]
Executive compensation target bonus payout | $		84,357
2019 EIP | Vice President of Operations
Subsequent Event [Line Items]
Executive compensation target bonus payout | $		$ 41,200
2019 EIP | Vice President of Product Development
Subsequent Event [Line Items]
Executive compensation target bonus payout | $	$ 38,750
2019 LTIP
Subsequent Event [Line Items]
Award vesting period	3 years
Target payout percentage	50.00%	50.00%
Target payout percentage, above target	75.00%	75.00%
Target payout percentage, outstanding	100.00%	100.00%
Three Year Average Revenue Growth Rate, Performance Metric Weight	33.33%	33.33%
Operating Income as a Percentage of Revenue, Three Year Target, Performance Metric Weight	33.33%	33.33%
Return On Invested Capital, Three Year Target, Performance Metric Weight	33.33%	33.33%
2019 LTIP | Target
Subsequent Event [Line Items]
Three Year Average Revenue Growth Rate	8.00%	8.00%
Operating Income As A Percentage Of Revenue, Three Year Target	8.00%	8.00%
Return on Invested Capital, Three Year Target	12.00%	12.00%
2019 LTIP | Above Target
Subsequent Event [Line Items]
Three Year Average Revenue Growth Rate	10.00%	10.00%
Operating Income As A Percentage Of Revenue, Three Year Target	10.00%	10.00%
Return on Invested Capital, Three Year Target	17.00%	17.00%
2019 LTIP | Outstanding
Subsequent Event [Line Items]
Three Year Average Revenue Growth Rate	13.00%	13.00%
Operating Income As A Percentage Of Revenue, Three Year Target	12.00%	12.00%
Return on Invested Capital, Three Year Target	21.00%	21.00%
2019 LTIP | Time-based
Subsequent Event [Line Items]
Percentage of award covered by metric	33.00%	33.00%
2019 LTIP | Performance-based
Subsequent Event [Line Items]
Percentage of award covered by metric	67.00%	67.00%
2019 LTIP | Chief Financial Officer | Time-based
Subsequent Event [Line Items]
Number of shares granted (shares)	22,071
2019 LTIP | Chief Financial Officer | Performance-based
Subsequent Event [Line Items]
Number of shares granted (shares)	44,142
2019 LTIP | Chief Financial Officer | One-third performance based
Subsequent Event [Line Items]
Number of shares granted (shares)	14,714
2019 LTIP | Chief Financial Officer | Restricted Stock Units
Subsequent Event [Line Items]
Shares authorized (shares)	66,213	66,213
2019 LTIP | Chief Business Development Officer | Time-based
Subsequent Event [Line Items]
Number of shares granted (shares)	17,215
2019 LTIP | Chief Business Development Officer | Performance-based
Subsequent Event [Line Items]
Number of shares granted (shares)	34,431
2019 LTIP | Chief Business Development Officer | One-third performance based
Subsequent Event [Line Items]
Number of shares granted (shares)	11,477
2019 LTIP | Chief Business Development Officer | Restricted Stock Units
Subsequent Event [Line Items]
Shares authorized (shares)	51,646	51,646
2019 LTIP | Vice President of Operations | Time-based
Subsequent Event [Line Items]
Number of shares granted (shares)	11,771
2019 LTIP | Vice President of Operations | Performance-based
Subsequent Event [Line Items]
Number of shares granted (shares)	23,542
2019 LTIP | Vice President of Operations | One-third performance based
Subsequent Event [Line Items]
Number of shares granted (shares)	7,847
2019 LTIP | Vice President of Operations | Restricted Stock Units
Subsequent Event [Line Items]
Shares authorized (shares)	35,313	35,313
2019 LTIP | Vice President of Product Development | Time-based
Subsequent Event [Line Items]
Number of shares granted (shares)	8,287
2019 LTIP | Vice President of Product Development | Performance-based
Subsequent Event [Line Items]
Number of shares granted (shares)	16,575
2019 LTIP | Vice President of Product Development | One-third performance based
Subsequent Event [Line Items]
Number of shares granted (shares)	5,525
2019 LTIP | Vice President of Product Development | Restricted Stock Units
Subsequent Event [Line Items]
Shares authorized (shares)	24,862	24,862