Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 05, 2019 | |
Cover page. | ||
Entity Registrant Name | PROFIRE ENERGY, INC. | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Trading Symbol | PFIE | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Common Stock, Shares Outstanding | 47,395,453 | |
Entity Filer Category | Accelerated Filer | |
Amendment Flag | false | |
Entity Central Index Key | 0001289636 | |
Current Fiscal Year End Date | --12-31 | |
Title of 12(b) Security | Common, $0.001 Par Value | |
Security Exchange Name | NASDAQ | |
Entity Tax Identification Number | 20-0019425 | |
Entity Address, Postal Zip Code | 84042 | |
Entity Address, Address Line One | 321 South 1250 West, Suite 1 | |
Entity Incorporation, State or Country Code | NV | |
Document Quarterly Report | true | |
Document Transition Report | false | |
City Area Code | 801 | |
Local Phone Number | 796-5127 | |
Entity File Number | 001-36378 | |
Entity Address, City or Town | Lindon | |
Entity Address, State or Province | UT | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 9,944,128 | $ 10,101,932 |
Short-term investments | 864,629 | 961,256 |
Short-term investments - other | 2,000,000 | 3,596,484 |
Accounts receivable, net | 6,568,599 | 6,885,296 |
Inventories, net (note 3) | 9,782,643 | 9,659,571 |
Prepaid expenses & other current assets | 1,076,138 | 473,726 |
Income tax receivable | 524,695 | 173,124 |
Total Current Assets | 30,760,832 | 31,851,389 |
LONG-TERM ASSETS | ||
Net deferred tax asset | 0 | 85,092 |
Long-term investments | 7,319,099 | 7,978,380 |
Financing right-of-use asset | 128,738 | 0 |
Property and equipment, net | 10,896,855 | 8,020,462 |
Intangible assets, net | 3,934,727 | 429,956 |
Goodwill | 1,120,381 | 997,701 |
Total Long-Term Assets | 23,399,800 | 17,511,591 |
TOTAL ASSETS | 54,160,632 | 49,362,980 |
CURRENT LIABILITIES | ||
Accounts payable | 2,181,592 | 1,177,985 |
Accrued vacation | 446,451 | 311,435 |
Accrued liabilities | 2,209,303 | 1,445,510 |
Current financing lease liability (note 8) | 67,984 | 0 |
Income taxes payable | 627,010 | 1,172,191 |
Total Current Liabilities | 5,532,340 | 4,107,121 |
LONG-TERM LIABILITIES | ||
Net deferred income tax liability | 134,046 | 0 |
Long-term financing lease liability | 63,951 | 0 |
TOTAL LIABILITIES | 5,730,337 | 4,107,121 |
STOCKHOLDERS' EQUITY (note 4) | ||
Preferred stock: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding | 0 | 0 |
Common stock: $0.001 par value, 100,000,000 shares authorized: 50,761,491 issued and 47,618,604 outstanding at September 30, 2019, and 49,707,805 issued and 47,932,305 outstanding at December 31, 2018 | 50,762 | 49,708 |
Treasury stock, at cost | (4,859,230) | (2,609,485) |
Additional paid-in capital | 29,608,685 | 28,027,742 |
Accumulated other comprehensive loss | (2,629,369) | (2,895,683) |
Retained earnings | 26,259,447 | 22,683,577 |
TOTAL STOCKHOLDERS' EQUITY | 48,430,295 | 45,255,859 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 54,160,632 | $ 49,362,980 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 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) | 50,761,491 | 49,707,805 |
Common stock, shares outstanding (shares) | 47,618,604 | 47,932,305 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
REVENUES (note 6) | ||||
Total Revenues | $ 9,905,761 | $ 11,499,902 | $ 30,862,850 | $ 35,009,380 |
COST OF SALES | ||||
Total Cost of Goods Sold | 4,736,465 | 5,401,776 | 14,741,644 | 16,872,447 |
GROSS PROFIT | 5,169,296 | 6,098,126 | 16,121,206 | 18,136,933 |
OPERATING EXPENSES | ||||
General and administrative expenses | 3,256,023 | 3,180,725 | 9,984,251 | 9,887,451 |
Research and development | 641,716 | 377,676 | 1,503,645 | 1,097,897 |
Depreciation and amortization expense | 130,105 | 143,327 | 357,238 | 401,114 |
Total Operating Expenses | 4,027,844 | 3,701,728 | 11,845,134 | 11,386,462 |
INCOME FROM OPERATIONS | 1,141,452 | 2,396,398 | 4,276,072 | 6,750,471 |
OTHER INCOME (EXPENSE) | ||||
Gain on sale of fixed assets | 34,826 | 43,904 | 73,166 | 129,989 |
Other expense | (2,065) | (1,506) | (3,029) | (7,462) |
Interest income | 38,478 | 85,167 | 216,068 | 310,646 |
Total Other Income | 71,239 | 127,565 | 286,205 | 433,173 |
INCOME BEFORE INCOME TAXES | 1,212,691 | 2,523,963 | 4,562,277 | 7,183,644 |
INCOME TAX EXPENSE | 290,943 | 864,874 | 986,407 | 1,934,057 |
NET INCOME | 921,748 | 1,659,089 | 3,575,870 | 5,249,587 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation gain (loss) | (91,397) | 170,641 | 160,453 | (223,431) |
Unrealized gains (losses) on investments | (12,386) | (11,963) | 105,861 | (35,972) |
Total Other Comprehensive Income (Loss) | (103,783) | 158,678 | 266,314 | (259,403) |
COMPREHENSIVE INCOME | $ 817,965 | $ 1,817,767 | $ 3,842,184 | $ 4,990,184 |
BASIC EARNINGS PER SHARE (dollars per share) | $ 0.02 | $ 0.03 | $ 0.08 | $ 0.11 |
FULLY DILUTED EARNINGS PER SHARE (dollars per share) | $ 0.02 | $ 0.03 | $ 0.07 | $ 0.11 |
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (shares) | 47,739,192 | 48,082,506 | 47,509,357 | 48,337,517 |
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (shares) | 48,469,246 | 48,852,167 | 48,259,900 | 49,107,178 |
Product | ||||
REVENUES (note 6) | ||||
Total Revenues | $ 9,251,947 | $ 10,830,592 | $ 29,009,837 | $ 33,009,616 |
COST OF SALES | ||||
Total Cost of Goods Sold | 4,326,335 | 4,917,449 | 13,465,989 | 15,434,698 |
Service | ||||
REVENUES (note 6) | ||||
Total Revenues | 653,814 | 669,310 | 1,853,013 | 1,999,764 |
COST OF SALES | ||||
Total Cost of Goods Sold | $ 410,130 | $ 484,327 | $ 1,275,655 | $ 1,437,749 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 3,575,870 | $ 5,249,587 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 732,396 | 667,085 |
Gain on sale of fixed assets | (73,166) | (120,825) |
Bad debt expense | 255,943 | 134,901 |
Stock awards issued for services | 358,270 | 916,795 |
Changes in operating assets and liabilities: | ||
Changes in accounts receivable | 1,244,104 | (184,951) |
Changes in income taxes receivable/payable | (890,523) | (432,575) |
Changes in inventories | 1,711,446 | (3,863,287) |
Changes in prepaid expenses | (586,576) | (172,497) |
Changes in deferred tax asset/liability | 219,138 | 22,564 |
Changes in accounts payable and accrued liabilities | 855,207 | 1,506,396 |
Net Cash Provided by Operating Activities | 7,402,109 | 3,723,193 |
INVESTING ACTIVITIES | ||
Proceeds from sale of equipment | 75,310 | 219,269 |
Sale (purchase) of investments | 2,476,227 | (876,463) |
Purchase of fixed assets | (3,309,191) | (1,271,997) |
Payments for acquisitions | (4,322,722) | 0 |
Net Cash Used in Investing Activities | (5,080,376) | (1,929,191) |
FINANCING ACTIVITIES | ||
Value of equity awards surrendered by employees for tax liability | (185,004) | (737,024) |
Cash received in exercise of stock options | 8,870 | 174,002 |
Purchase of treasury stock | (2,249,745) | (4,000,000) |
Principal paid towards lease liability | (53,190) | 0 |
Net Cash Used in Financing Activities | (2,479,069) | (4,563,022) |
Effect of exchange rate changes on cash | (468) | (38,941) |
NET DECREASE IN CASH | (157,804) | (2,807,961) |
CASH AT BEGINNING OF PERIOD | 10,101,932 | 11,445,799 |
CASH AT END OF PERIOD | 9,944,128 | 8,637,838 |
CASH PAID FOR: | ||
Interest | 4,469 | 0 |
Income taxes | 1,793,281 | 2,164,149 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Issuance of common stock - Midflow acquisition | $ 1,020,000 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings |
Balance, beginning of period (shares) at Dec. 31, 2017 | 48,606,425 | |||||
Balance, beginning of period at Dec. 31, 2017 | $ 44,047,424 | $ 53,931 | $ 27,535,469 | $ (2,200,462) | $ (6,890,349) | $ 25,548,835 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 575,235 | 575,235 | ||||
Stock issued in exercise of stock options (shares) | 81,213 | |||||
Stock issued in exercise of stock options | 74,242 | $ 81 | 74,161 | |||
Stock issued in settlement of RSUs (shares) | 118,778 | |||||
Stock issued in settlement of RSUs | 0 | $ 119 | (119) | |||
Tax withholdings paid related to stock based compensation | (83,600) | (83,600) | ||||
Foreign currency translation | (239,129) | (239,129) | ||||
Unrealized gains on investments | (33,235) | (33,235) | ||||
Net income | 1,876,228 | 1,876,228 | ||||
Balance, end of period (shares) at Mar. 31, 2018 | 48,806,416 | |||||
Balance, end of period at Mar. 31, 2018 | 46,217,165 | $ 54,131 | 28,101,146 | (2,472,826) | (6,890,349) | 27,425,063 |
Balance, beginning of period (shares) at Dec. 31, 2017 | 48,606,425 | |||||
Balance, beginning of period at Dec. 31, 2017 | 44,047,424 | $ 53,931 | 27,535,469 | (2,200,462) | (6,890,349) | 25,548,835 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 5,249,587 | |||||
Balance, end of period (shares) at Sep. 30, 2018 | 48,083,063 | |||||
Balance, end of period at Sep. 30, 2018 | 45,393,065 | $ 54,686 | 27,890,171 | (2,459,865) | (10,890,349) | 30,798,422 |
Balance, beginning of period (shares) at Mar. 31, 2018 | 48,806,416 | |||||
Balance, beginning of period at Mar. 31, 2018 | 46,217,165 | $ 54,131 | 28,101,146 | (2,472,826) | (6,890,349) | 27,425,063 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 281,012 | 281,012 | ||||
Stock issued in exercise of stock options (shares) | 410,421 | |||||
Stock issued in exercise of stock options | 99,760 | $ 410 | 99,350 | |||
Stock issued in settlement of RSUs (shares) | 143,540 | |||||
Stock issued in settlement of RSUs | 0 | $ 144 | (144) | |||
Tax withholdings paid related to stock based compensation | (652,560) | (652,560) | ||||
Treasury stock repurchased (shares) | (1,277,954) | |||||
Treasury stock repurchased | (4,000,000) | (4,000,000) | ||||
Foreign currency translation | (154,943) | (154,943) | ||||
Unrealized gains on investments | 9,226 | 9,226 | ||||
Net income | 1,714,270 | 1,714,270 | ||||
Balance, end of period (shares) at Jun. 30, 2018 | 48,082,423 | |||||
Balance, end of period at Jun. 30, 2018 | 43,513,930 | $ 54,685 | 27,828,804 | (2,618,543) | (10,890,349) | 29,139,333 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 62,232 | 62,232 | ||||
Stock issued in settlement of RSUs (shares) | 640 | |||||
Stock issued in settlement of RSUs | 0 | $ 1 | (1) | |||
Tax withholdings paid related to stock based compensation | (864) | (864) | ||||
Foreign currency translation | 170,641 | 170,641 | ||||
Unrealized gains on investments | (11,963) | (11,963) | ||||
Net income | 1,659,089 | 1,659,089 | ||||
Balance, end of period (shares) at Sep. 30, 2018 | 48,083,063 | |||||
Balance, end of period at Sep. 30, 2018 | 45,393,065 | $ 54,686 | 27,890,171 | (2,459,865) | (10,890,349) | 30,798,422 |
Balance, beginning of period (shares) at Dec. 31, 2018 | 47,932,305 | |||||
Balance, beginning of period at Dec. 31, 2018 | 45,255,859 | $ 49,708 | 28,027,742 | (2,895,683) | (2,609,485) | 22,683,577 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 66,714 | 66,714 | ||||
Stock issued in exercise of stock options (shares) | 2,483 | |||||
Stock issued in exercise of stock options | 0 | $ 2 | (2) | |||
Stock issued in settlement of RSUs (shares) | 148,723 | |||||
Stock issued in settlement of RSUs | 379,861 | $ 149 | 379,712 | |||
Tax withholdings paid related to stock based compensation | (143,022) | (143,022) | ||||
Treasury stock repurchased (shares) | (775,287) | |||||
Treasury stock repurchased | (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, end of period (shares) at Mar. 31, 2019 | 47,308,224 | |||||
Balance, end of period at Mar. 31, 2019 | 46,112,619 | $ 49,859 | 28,331,144 | (2,677,516) | (3,943,063) | 24,352,195 |
Balance, beginning of period (shares) at Dec. 31, 2018 | 47,932,305 | |||||
Balance, beginning of period at Dec. 31, 2018 | 45,255,859 | $ 49,708 | 28,027,742 | (2,895,683) | (2,609,485) | 22,683,577 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 3,575,870 | |||||
Balance, end of period (shares) at Sep. 30, 2019 | 47,618,604 | |||||
Balance, end of period at Sep. 30, 2019 | 48,430,295 | $ 50,762 | 29,608,685 | (2,629,369) | (4,859,230) | 26,259,447 |
Balance, beginning of period (shares) at Mar. 31, 2019 | 47,308,224 | |||||
Balance, beginning of period at Mar. 31, 2019 | 46,112,619 | $ 49,859 | 28,331,144 | (2,677,516) | (3,943,063) | 24,352,195 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 297,127 | 297,127 | ||||
Stock issued in exercise of stock options (shares) | 9,174 | |||||
Stock issued in exercise of stock options | 6,850 | $ 9 | 6,841 | |||
Stock issued in settlement of RSUs (shares) | 148,794 | |||||
Stock issued in settlement of RSUs | 0 | $ 149 | (149) | |||
Tax withholdings paid related to stock based compensation | (41,411) | (41,411) | ||||
Foreign currency translation | 102,435 | 102,435 | ||||
Unrealized gains on investments | 49,495 | 49,495 | ||||
Net income | 985,504 | 985,504 | ||||
Balance, end of period (shares) at Jun. 30, 2019 | 47,466,192 | |||||
Balance, end of period at Jun. 30, 2019 | 47,512,619 | $ 50,017 | 28,593,552 | (2,525,586) | (3,943,063) | 25,337,699 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | (5,571) | (5,571) | ||||
Stock issued in exercise of stock options (shares) | 4,836 | |||||
Stock issued in exercise of stock options | 2,020 | $ 5 | 2,015 | |||
Stock issued in settlement of RSUs (shares) | 546 | |||||
Stock issued in settlement of RSUs | 0 | $ 1 | (1) | |||
Stock issued in acquisition (note 9) (shares) | 739,130 | |||||
Stock issued in acquisition (note 9) | 1,020,000 | $ 739 | 1,019,261 | |||
Tax withholdings paid related to stock based compensation | (571) | (571) | ||||
Treasury stock repurchased (shares) | (592,100) | |||||
Treasury stock repurchased | (916,167) | (916,167) | ||||
Foreign currency translation | (91,397) | (91,397) | ||||
Unrealized gains on investments | (12,386) | (12,386) | ||||
Net income | 921,748 | 921,748 | ||||
Balance, end of period (shares) at Sep. 30, 2019 | 47,618,604 | |||||
Balance, end of period at Sep. 30, 2019 | $ 48,430,295 | $ 50,762 | $ 29,608,685 | $ (2,629,369) | $ (4,859,230) | $ 26,259,447 |
CONDENSED FINANCIAL STATEMENTS
CONDENSED FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information 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 September 30, 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 and nine month periods ended September 30, 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 | 9 Months Ended |
Sep. 30, 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 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 simple 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. Reclassification Certain balances in previously issued consolidated financial statements have been reclassified to be consistent with the current period presentation. The reclassification had no impact on financial position, net income, or stockholders' equity. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventories consisted of the following at each balance sheet date: As of September 30, 2019 December 31, 2018 Raw materials $ 457,549 $ 76,319 Finished goods 10,168,955 10,474,522 Work in process — — Subtotal 10,626,504 10,550,841 Reserve for obsolescence (843,861) (891,270) Total $ 9,782,643 $ 9,659,571 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY As of September 30, 2019, and December 31, 2018, the Company held 3,142,887 and 1,775,500 shares of its common stock in treasury at a total cost of $4,859,230 and $2,609,485, respectively. On April 22, 2019, the Board of Directors (the “Board”) of 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 year 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 the grants of 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 target bonus amount assigned to such participant. 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 agreement covers 33% of each award recipient’s Units that are subject to time-based vesting, and the other agreement covers 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. On March 14, 2019, the Board approved a grant of 85,000 restricted stock units ("RSUs") to various employees. The awards vest annually over five years and will result in a total compensation expense of $149,600 to be recognized over the vesting period. On June 12, 2019, the Board approved a grant of 183,942 RSUs to Independent Directors. Half of the RSUs vest immediately on the date of grant and the remaining 50% of the RSUs will vest on the first anniversary of the grant date or at the Company's next Annual Meeting of Stockholders, whichever is earlier. The awards will result in total compensation expense of $252,000 to be recognized over the vesting period. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 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 September 30, For the Nine Months Ended September 30, Sales 2019 2018 2019 2018 Canada $ 1,890,592 $ 1,803,957 $ 3,883,010 $ 4,374,844 United States 8,015,169 9,695,945 26,979,840 30,634,536 Total Consolidated $ 9,905,761 $ 11,499,902 $ 30,862,850 $ 35,009,380 For the Three Months Ended September 30, For the Nine Months Ended September 30, Profit (Loss) 2019 2018 2019 2018 Canada $ (242,182) $ 24,224 $ (1,171,424) $ (676,268) United States 1,163,930 1,634,865 4,747,294 5,925,855 Total Consolidated $ 921,748 $ 1,659,089 $ 3,575,870 $ 5,249,587 As of Long-Lived Assets September 30, 2019 December 31, 2018 Canada $ 5,281,869 $ 2,509,129 United States 18,117,931 15,002,462 Total Consolidated $ 23,399,800 $ 17,511,591 |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 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 applicable sales contract or service 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 contract) for costs related to contracts that are estimated to be completed within one year. All of our current sales contracts and service 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 | 9 Months Ended |
Sep. 30, 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 September 30, 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 $ 921,748 47,739,192 $ 0.02 $ 1,659,089 48,082,506 $ 0.03 Effect of Dilutive Securities Stock options & RSUs — 730,054 — 769,661 Diluted EPS Net income available to common stockholders + assumed conversions $ 921,748 48,469,246 $ 0.02 $ 1,659,089 48,852,167 $ 0.03 Options to purchase 244,600 and 251,600 shares of common stock at a weighted average price of $3.88 and $3.89 per share were outstanding during the three months ended September 30, 2019, and 2018, 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 September 30, 2019. For the Nine Months Ended September 30, 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 $ 3,575,870 47,509,357 $ 0.08 $ 5,249,587 48,337,517 $ 0.11 Effect of Dilutive Securities Stock options & RSUs — 750,543 — 769,661 Diluted EPS Net income available to common stockholders + assumed conversions $ 3,575,870 48,259,900 $ 0.07 $ 5,249,587 49,107,178 $ 0.11 |
LEASES (Notes)
LEASES (Notes) | 9 Months Ended |
Sep. 30, 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 have used our incremental borrowing rate to determine the discount rate to be applied to our financing leases. The weighted average discount rate applied to our financing leases is 4.50% and the weighted average remaining lease term is 25.3 months. The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2019 Amortization of right-of-use assets $ 20,746 $ 56,387 Interest on lease liabilities 1,627 4,459 Total financing lease cost $ 22,373 $ 60,846 The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2019 - remaining $ 21,847 2020 62,995 2021 40,921 2022 12,803 2023 — Thereafter — Total future minimum lease payments $ 138,566 Less: Amount representing interest 6,631 Present value of future payments $ 131,935 Current portion $ 67,984 Long-term portion $ 63,951 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 and nine months ended September 30, 2019, we recognized $18,779 and $41,097, respectively in short-term lease costs associated with office space leases. |
ACQUISITION (Notes)
ACQUISITION (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITION | ACQUISITIONS Millstream Energy Products On June 18, 2019, our wholly-owned subsidiary, Profire Combustion, Inc., acquired substantially all the assets from Millstream Energy Products, LTD., a Canadian corporation ("MEP"). MEP is a privately-held Canadian company that develops a line of high-performance burners, economy burners, flame arrestor housings, secondary air control plates, and other related combustion components. MEP’s full line of products became available for sale by Profire’s existing sales team immediately after closing of the transaction. These products complement our burner-management system (BMS) product offerings and should enable us to supply a larger portion of the total BMS package sale to our customers. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations . The purchase accounting process has not been completed primarily because the valuation of acquired assets has not been finalized. We expect to complete the purchase accounting as soon as practicable but no later than one year from the acquisition date. We do not believe there will be material adjustments. The purchase price of $2,325,846 USD was funded through existing cash. Of this cash purchase amount $246,322 USD has been held back for 6 months pending satisfaction of seller obligations under the purchase agreement. MEP will also receive a 4.5% royalty on proprietary MEP product revenue generated during the next five years. Based on the estimated fair value at the time of purchase, the Company recorded an estimate of intangible assets in the amount of $885,000 USD and estimated goodwill of $122,680 USD pending completion of the final valuation analysis. The purchase price calculation is a follows: Cash $ 2,079,524 Liabilities 246,322 $ 2,325,846 The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Accounts receivable $ 308,431 Inventory 1,123,922 Intangibles assets 885,000 Goodwill 122,680 Accounts payable (114,187) $ 2,325,846 Transaction and related costs directly related to the acquisition of MEP, consisting primarily of professional fees and integration expenses, have amounted to approximately $66,430, were expensed as incurred and are included in general and administrative expenses. Midflow Services On August 5, 2019, we acquired all of the outstanding membership interests of Midflow Services, LLC ("Midflow"). Midflow is based in Millersburg, Ohio. Midflow provides packaged combustion solutions and services to the upstream and midstream oil and gas industry. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations . The purchase accounting process has not been completed primarily because the valuation of the acquired assets has not been finalized. We expect to complete the purchase accounting as soon as practicable but no later than one year from the acquisition date. We do not believe there will be material adjustments. The purchase price of $3,419,617 was funded through a combination of existing cash and shares of the Company's common stock. The cash portion of the purchase price includes $500,000 placed in an escrow account for 12 months pending satisfaction of certain obligations under the purchase agreement. Based on the estimated fair value at the time of purchase, the Company recorded an estimate of intangible assets in the amount of $2,648,808 which may include goodwill once the final valuation analysis is completed. The purchase price calculation is as follows: Cash $ 2,399,617 Stock 1,020,000 $ 3,419,617 The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Cash $ 172,850 Accounts receivable 324,989 Inventory 264,986 Prepaid expenses 14,878 Property and equipment 134,500 Intangibles and goodwill 2,648,808 Accounts payable (134,956) Accrual liabilities (6,438) $ 3,419,617 Transaction costs directly related to the acquisition of Midflow, consisting primarily of professional fees and integration expenses, amounted to approximately $44,087. All of these costs were expensed as incurred and are included in general and administrative expenses. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSIn accordance with ASC 855 "Subsequent Events," Company Management reviewed all material events through the date this report was issued and there were no subsequent events to report. |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 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. |
Reclassification | Reclassification Certain balances in previously issued consolidated financial statements have been reclassified to be consistent with the current period presentation. The reclassification had no impact on financial position, net income, or stockholders' equity. |
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 applicable sales contract or service 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 contract) for costs related to contracts that are estimated to be completed within one year. All of our current sales contracts and service 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) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following at each balance sheet date: As of September 30, 2019 December 31, 2018 Raw materials $ 457,549 $ 76,319 Finished goods 10,168,955 10,474,522 Work in process — — Subtotal 10,626,504 10,550,841 Reserve for obsolescence (843,861) (891,270) Total $ 9,782,643 $ 9,659,571 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, For the Nine Months Ended September 30, Sales 2019 2018 2019 2018 Canada $ 1,890,592 $ 1,803,957 $ 3,883,010 $ 4,374,844 United States 8,015,169 9,695,945 26,979,840 30,634,536 Total Consolidated $ 9,905,761 $ 11,499,902 $ 30,862,850 $ 35,009,380 For the Three Months Ended September 30, For the Nine Months Ended September 30, Profit (Loss) 2019 2018 2019 2018 Canada $ (242,182) $ 24,224 $ (1,171,424) $ (676,268) United States 1,163,930 1,634,865 4,747,294 5,925,855 Total Consolidated $ 921,748 $ 1,659,089 $ 3,575,870 $ 5,249,587 As of Long-Lived Assets September 30, 2019 December 31, 2018 Canada $ 5,281,869 $ 2,509,129 United States 18,117,931 15,002,462 Total Consolidated $ 23,399,800 $ 17,511,591 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Electronics $ 3,880,542 $ 4,988,293 $ 12,632,170 $ 14,208,867 Manufactured 519,990 599,951 1,456,789 2,369,461 Re-Sell 4,851,415 5,242,348 14,920,878 16,431,288 Service 653,814 669,310 1,853,013 1,999,764 Total Revenue $ 9,905,761 $ 11,499,902 $ 30,862,850 $ 35,009,380 |
BASIC AND DILUTED EARNINGS PE_2
BASIC AND DILUTED EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 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 $ 921,748 47,739,192 $ 0.02 $ 1,659,089 48,082,506 $ 0.03 Effect of Dilutive Securities Stock options & RSUs — 730,054 — 769,661 Diluted EPS Net income available to common stockholders + assumed conversions $ 921,748 48,469,246 $ 0.02 $ 1,659,089 48,852,167 $ 0.03 Options to purchase 244,600 and 251,600 shares of common stock at a weighted average price of $3.88 and $3.89 per share were outstanding during the three months ended September 30, 2019, and 2018, 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 September 30, 2019. For the Nine Months Ended September 30, 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 $ 3,575,870 47,509,357 $ 0.08 $ 5,249,587 48,337,517 $ 0.11 Effect of Dilutive Securities Stock options & RSUs — 750,543 — 769,661 Diluted EPS Net income available to common stockholders + assumed conversions $ 3,575,870 48,259,900 $ 0.07 $ 5,249,587 49,107,178 $ 0.11 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2019 For the Nine Months Ended September 30, 2019 Amortization of right-of-use assets $ 20,746 $ 56,387 Interest on lease liabilities 1,627 4,459 Total financing lease cost $ 22,373 $ 60,846 |
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 - remaining $ 21,847 2020 62,995 2021 40,921 2022 12,803 2023 — Thereafter — Total future minimum lease payments $ 138,566 Less: Amount representing interest 6,631 Present value of future payments $ 131,935 Current portion $ 67,984 Long-term portion $ 63,951 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | The purchase price calculation is as follows: Cash $ 2,399,617 Stock 1,020,000 $ 3,419,617 The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Cash $ 172,850 Accounts receivable 324,989 Inventory 264,986 Prepaid expenses 14,878 Property and equipment 134,500 Intangibles and goodwill 2,648,808 Accounts payable (134,956) Accrual liabilities (6,438) $ 3,419,617 |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | |||
Financing right-of-use asset | $ 128,738 | $ 132,488 | $ 0 |
Finance lease liability | $ 131,935 | $ 132,488 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 457,549 | $ 76,319 |
Finished goods | 10,168,955 | 10,474,522 |
Work in process | 0 | 0 |
Subtotal | 10,626,504 | 10,550,841 |
Reserve for obsolescence | (843,861) | (891,270) |
Total | $ 9,782,643 | $ 9,659,571 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | Jun. 12, 2019USD ($)shares | Apr. 22, 2019CAD ($)shares | Mar. 14, 2019USD ($)shares | Sep. 30, 2019USD ($)shares | Apr. 22, 2019USD ($) | Dec. 31, 2018USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Treasury stock (in shares) | shares | 3,142,887 | 1,775,500 | ||||
Treasury stock, at cost | $ 4,859,230 | $ 2,609,485 | ||||
2019 EIP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [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 LTIP | Time-based | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of award covered by metric | 33.00% | 33.00% | ||||
2019 LTIP | Performance-based | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of award covered by metric | 67.00% | 67.00% | ||||
2019 LTIP | Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (shares) | shares | 183,942 | 85,000 | ||||
Award vesting period | 5 years | |||||
Unrecognized compensation cost | $ 252,000 | $ 149,600 | ||||
Award vesting percentage | 50.00% | |||||
Chief Executive Officer | 2019 EIP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Executive compensation target bonus payout | $ 412,000 | |||||
Chief Business Development Officer | 2019 EIP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Executive compensation target bonus payout | 84,357 | |||||
Chief Business Development Officer | 2019 LTIP | Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (shares) | shares | 51,646 | |||||
Chief Financial Officer | 2019 EIP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Executive compensation target bonus payout | 90,125 | |||||
Chief Financial Officer | 2019 LTIP | Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (shares) | shares | 66,213 | |||||
Vice President of Operations | 2019 EIP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Executive compensation target bonus payout | $ 41,200 | |||||
Vice President of Operations | 2019 LTIP | Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (shares) | shares | 35,313 | |||||
Vice President of Product Development | 2019 EIP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Executive compensation target bonus payout | $ 38,750 | |||||
Vice President of Product Development | 2019 LTIP | Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (shares) | shares | 24,862 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||
Sales | $ 9,905,761 | $ 11,499,902 | $ 30,862,850 | $ 35,009,380 | |||||
Net income | 921,748 | $ 985,504 | $ 1,668,618 | 1,659,089 | $ 1,714,270 | $ 1,876,228 | 3,575,870 | 5,249,587 | |
Long-lived assets | 23,399,800 | 23,399,800 | $ 17,511,591 | ||||||
Canada | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Sales | 1,890,592 | 1,803,957 | 3,883,010 | 4,374,844 | |||||
Net income | (242,182) | 24,224 | (1,171,424) | (676,268) | |||||
Long-lived assets | 5,281,869 | 5,281,869 | 2,509,129 | ||||||
United States | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Sales | 8,015,169 | 9,695,945 | 26,979,840 | 30,634,536 | |||||
Net income | 1,163,930 | $ 1,634,865 | 4,747,294 | $ 5,925,855 | |||||
Long-lived assets | $ 18,117,931 | $ 18,117,931 | $ 15,002,462 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Timing of satisfaction, performance obligation | All of our current sales contracts and service 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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized in the income statement by product line | $ 9,905,761 | $ 11,499,902 | $ 30,862,850 | $ 35,009,380 |
Electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized in the income statement by product line | 3,880,542 | 4,988,293 | 12,632,170 | 14,208,867 |
Manufactured | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized in the income statement by product line | 519,990 | 599,951 | 1,456,789 | 2,369,461 |
Re-Sell | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized in the income statement by product line | 4,851,415 | 5,242,348 | 14,920,878 | 16,431,288 |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized in the income statement by product line | $ 653,814 | $ 669,310 | $ 1,853,013 | $ 1,999,764 |
BASIC AND DILUTED EARNINGS PE_3
BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income (Numerator) | ||||||||
Net income available to common stockholders | $ 921,748 | $ 985,504 | $ 1,668,618 | $ 1,659,089 | $ 1,714,270 | $ 1,876,228 | $ 3,575,870 | $ 5,249,587 |
Stock options & RSUs | 0 | 0 | 0 | 0 | ||||
Net income available to common stockholders assumed conversions | $ 921,748 | $ 1,659,089 | $ 3,575,870 | $ 5,249,587 | ||||
Weighted Average Shares (Denominator) | ||||||||
Weighted average basic shares outstanding (shares) | 47,739,192 | 48,082,506 | 47,509,357 | 48,337,517 | ||||
Effect of Dilutive Securities, Stock options & RSUs (shares) | 730,054 | 769,661 | 750,543 | 769,661 | ||||
Weighted average diluted shares outstanding (shares) | 48,469,246 | 48,852,167 | 48,259,900 | 49,107,178 | ||||
Per-Share Amount | ||||||||
Basic earnings per share (dollars per share) | $ 0.02 | $ 0.03 | $ 0.08 | $ 0.11 | ||||
Diluted earnings per share (dollars per share) | $ 0.02 | $ 0.03 | $ 0.07 | $ 0.11 | ||||
Antidilutive securities excluded from computation of earnings per share (shares) | 244,600 | 251,600 | 244,600 | 251,600 | ||||
Weighted average (dollars per share) | $ 3.88 | $ 3.89 | $ 3.88 | $ 3.89 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Leases [Abstract] | ||
Lease term | 36 months | 36 months |
Weighted average discount rate | 4.50% | 4.50% |
Weighted average remaining lease term | 2 years 3 months 10 days | 2 years 3 months 10 days |
Short-term lease cost | $ 18,779 | $ 41,097 |
LEASES - Components of Financin
LEASES - Components of Financing Lease Cost (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Amortization of right-of-use assets | $ 20,746 | $ 56,387 |
Interest on lease liabilities | 1,627 | 4,459 |
Total financing lease cost | $ 22,373 | $ 60,846 |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments to Discounted Finance Lease Liability (Details) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Years ending December 31, | |||
2019 - remaining | $ 21,847 | ||
2020 | 62,995 | ||
2021 | 40,921 | ||
2022 | 12,803 | ||
2023 | 0 | ||
Thereafter | 0 | ||
Total future minimum lease payments | 138,566 | ||
Less: Amount representing interest | 6,631 | ||
Present value of future payments | 131,935 | $ 132,488 | |
Current portion | 67,984 | $ 0 | |
Long-term portion | $ 63,951 | $ 0 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | Aug. 05, 2019 | Jun. 18, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,120,381 | $ 997,701 | ||
MEP | ||||
Business Acquisition [Line Items] | ||||
Acquisition purchase price | $ 2,325,846 | |||
Royalty percentage | 4.50% | |||
Cash | $ 2,079,524 | |||
Stock | 246,322 | |||
Accounts receivable | 308,431 | |||
Inventory | 1,123,922 | |||
Intangibles assets | 885,000 | |||
Goodwill | 122,680 | |||
Accounts payable | (114,187) | |||
Net | 2,325,846 | |||
Acquisition related costs | $ 66,430 | |||
Midflow Services, LLC | ||||
Business Acquisition [Line Items] | ||||
Acquisition purchase price | $ 3,419,617 | |||
Cash | 2,399,617 | |||
Stock | 1,020,000 | |||
Cash | 172,850 | |||
Accounts receivable | 324,989 | |||
Inventory | 264,986 | |||
Prepaid expenses | 14,878 | |||
Property and equipment | 134,500 | |||
Intangibles and goodwill | 2,648,808 | |||
Accounts payable | (134,956) | |||
Accrual liabilities | (6,438) | |||
Net | 3,419,617 | |||
Escrow deposit | 500,000 | |||
Acquisition related costs | $ 44,087 |