Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2016shares | |
Document and Entity Information: | |
Entity Registrant Name | Omega Flex, Inc. |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2016 |
Trading Symbol | oflx |
Amendment Flag | false |
Entity Central Index Key | 1,317,945 |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 10,091,822 |
Entity Filer Category | Accelerated Filer |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (March 31, 2016 unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | |||
Current Assets | |||||
Cash and Cash Equivalents | $ 23,522 | $ 30,152 | |||
Accounts Receivable | 13,108 | [1] | 16,605 | [2] | |
Inventories - Net | 7,784 | 8,287 | |||
Other Current Assets | 1,369 | 1,647 | |||
Total Current Assets | 45,783 | 56,691 | |||
Property and Equipment - Net | 4,547 | 4,638 | |||
Goodwill-Net | 3,526 | 3,526 | |||
Deferred Taxes | 114 | 114 | |||
Other Long Term Assets | 1,323 | 1,305 | |||
Total Assets | 55,293 | 66,274 | |||
Current Liabilities: | |||||
Accounts Payable | 2,115 | 2,489 | |||
Accrued Compensation | 896 | 4,669 | |||
Accrued Commissions and Sales Incentives | 2,500 | 4,333 | |||
Dividends Payable | 8,578 | ||||
Taxes Payable | 1,081 | 433 | |||
Other Liabilities | 3,201 | 3,050 | |||
Total Current Liabilities | 9,793 | 23,552 | |||
Deferred Taxes | 446 | 368 | |||
Other Long Term Liabilities | 1,335 | 1,200 | |||
Total Liabilities | $ 11,574 | $ 25,120 | |||
Commitments and Contingencies | [3] | ||||
Omega Flex, Inc. Shareholders' Equity: | |||||
Common Stock | $ 102 | $ 102 | |||
Treasury Stock | (1) | (1) | |||
Paid-in Capital | 10,808 | 10,808 | |||
Retained Earnings | 33,300 | 30,656 | |||
Accumulated Other Comprehensive Loss | (798) | (683) | |||
Total Omega Flex, Inc. Shareholders' Equity | 43,411 | 40,882 | |||
Noncontrolling Interest | 308 | 272 | |||
Total Shareholders' Equity | 43,719 | 41,154 | |||
Total Liabilities and Shareholders' Equity | $ 55,293 | $ 66,274 | |||
[1] | Less allowance of $687. | ||||
[2] | Less allowance of $882. | ||||
[3] | See Note 5. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS - PARENTHETICAL (March 31, 2016 unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful Accounts Receivable | $ 687 | $ 882 |
Common Stock, Par Value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Common Stock, Shares Issued | 10,153,633 | 10,153,633 |
Common Stock, Shares Outstanding | 10,091,822 | 10,091,822 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||
Net Sales | $ 20,626 | $ 20,973 |
Cost of Goods Sold | 8,134 | 8,583 |
Gross Profit | 12,492 | 12,390 |
Selling Expense | 3,853 | 3,775 |
General and Administrative Expense | 3,906 | 3,277 |
Engineering Expense | 712 | 631 |
Operating Profit | 4,021 | 4,707 |
Interest Income (Expense), Net | 20 | 16 |
Other Income (Expense), Net | (46) | (46) |
Income Before Income Taxes | 3,995 | 4,677 |
Income Tax Expense | 1,308 | 1,491 |
Net Income | 2,687 | 3,186 |
Net (Income) Loss attributable to the Noncontrolling Interest, net of tax | (44) | (43) |
Net Income attributable to Omega Flex, Inc. | $ 2,643 | $ 3,143 |
Basic and Diluted Earnings per Common Share | $ 0.26 | $ 0.31 |
Basic and Diluted Weighted-Average Shares Outstanding | 10,092 | 10,092 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net Income | $ 2,687 | $ 3,186 |
Other Comprehensive Income (Loss), Net of Tax: | ||
Foreign Currency Translation Adjustment, Net of Taxes | (122) | (99) |
Other Comprehensive Income | (122) | (99) |
Comprehensive Income | 2,565 | 3,087 |
Less: Comprehensive Income (Loss) Attributable to the Noncontrolling Interest | (36) | (36) |
Total Comprehensive Income | $ 2,529 | $ 3,051 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows from Operating Activities: | ||
Net Income | $ 2,687 | $ 3,186 |
Adjustments to Reconcile Net Income to Net Cash Provided By (Used In) Operating Activities: | ||
Non-Cash Compensation Expense | 130 | (213) |
Depreciation and Amortization | 122 | 100 |
Provision for Losses on Accounts Receivable, net of write-offs and recoveries | (195) | (60) |
Deferred Taxes | 74 | (458) |
Provision for Inventory Reserves | (300) | 42 |
Changes in Assets and Liabilities | ||
Accounts Receivable Change | 3,639 | 849 |
Inventory Change | 777 | (506) |
Other Assets Change | 256 | 312 |
Accounts Payable Change | (366) | (928) |
Accrued Compensation Change | (3,760) | (3,049) |
Accrued Commissions and Sales Incentives Change | (1,830) | (613) |
Other Liabilities Change | 825 | 499 |
Net Cash Provided by (Used In) Operating Activities | 2,059 | (839) |
Cash Flows from Investing Activities: | ||
Capital Expenditures | (33) | (197) |
Net Cash Provided By (Used In) Investing Activities | (33) | (197) |
Cash Flows from Financing Activities: | ||
Dividend Paid | (8,578) | (4,945) |
Net Cash Provided by (Used In) Financing Activities | (8,578) | (4,945) |
Net Increase (Decrease) in Cash and Cash Equivalents | (6,552) | (5,981) |
Translation effect on cash | (78) | (78) |
Cash and Cash Equivalents - Beginning of Period | 30,152 | 22,585 |
Cash and Cash Equivalents - End of Period | 23,522 | 16,526 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for Income Taxes | $ 575 | $ 937 |
1. Basis of Presentation and De
1. Basis of Presentation and Description of Business | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
1. Basis of Presentation and Description of Business | 1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Omega Flex, Inc. (Omega) and its subsidiaries (collectively the Company). The Companys unaudited condensed consolidated financial statements for the quarter ended March 31, 2016 have been prepared in accordance with accounting principles generally accepted in the United States (GAAP), and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Companys latest shareholders annual report (Form 10-K). All material inter-company accounts and transactions have been eliminated in consolidation. Certain amounts from prior years have been reclassified to conform to current year presentation. It is Managements opinion that all adjustments necessary for a fair statement of the results for the interim periods have been made, and that all adjustments are of a normal recurring nature or a description is provided for any adjustments that are not of a normal recurring nature. Description of Business The Company is a leading manufacturer of flexible metal hose, and is currently engaged in a number of different markets, including construction, manufacturing, petrochemical transfer, pharmaceutical and other industries. The Companys business is managed as a single operating segment that consists of the manufacture and sale of flexible metal hose and accessories. The Companys products are concentrated in residential and commercial construction, and general industrial markets, with a comprehensive portfolio of intellectual property and patents issued in various countries around the world. The Companys primary product, flexible gas piping, is used for gas piping within residential and commercial buildings. Through its flexibility and ease of use, the Companys TracPipe ® ® ® ® ® |
2. Significant Accounting Polic
2. Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
2. Significant Accounting Policies | 2. SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant estimates and assumptions relate to revenue recognition and related sales incentives, accounts receivable allowances, inventory valuations, goodwill valuation, product liability reserve, stock-based compensation valuations and accounting for income taxes. Actual amounts could differ significantly from these estimates. Revenue Recognition The Companys revenue recognition activities relate almost entirely to the manufacture and sale of flexible metal hose and pipe. Under GAAP, revenues are considered to have been earned when the Company has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. The following criteria represent preconditions to the recognition of revenue: Persuasive evidence of an arrangement for the sale of product or services must exist. Delivery has occurred or services rendered. The sales price to the customer is fixed or determinable. Collection is reasonably assured. The Company recognizes revenue upon shipment in accordance with the above principles. Gross sales are reduced for all consideration paid to customers for which no identifiable benefit is received by the Company. This includes promotional incentives, which includes various programs including year-end rebates, and payment term discounts. The amounts of certain incentives are known with reasonable certainty at the time of sale, while others are projected based upon the most reliable information available at the reporting date. Commissions are accounted for as a selling expense. Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents include investments in an institutional money market fund, which invests in U.S. Treasury bills, notes and bonds, and/or repurchase agreements, backed by such obligations. Carrying value approximates fair value. Cash and cash equivalents are deposited at various area banks, which at times may exceed federally insured limits. The Company monitors the viability of the banking institutions carrying its assets on a regular basis, and has the ability to transfer cash to various institutions during times of risk. The Company has not experienced any losses related to these cash balances, and believes its credit risk to be minimal. Accounts Receivable and Provision for Doubtful Accounts Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future. The estimated allowance for uncollectible amounts is based primarily on specific analysis of accounts in the receivable portfolio and historical write-off experience. While management believes the allowance to be adequate, if the financial condition of the Companys customers were to deteriorate, resulting in their inability to make payments, additional allowances may be required. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on any known collection issues, historical experience, and other currently available evidence. The reserve for future credits, discounts, and doubtful accounts was $687,000 and $882,000 as of March 31, 2016 and December 31, 2015, respectively. In regards to identifying uncollectible accounts, the Company reviews an aging report on a consistent basis to determine past due accounts, and utilizes a well established credit rating agency. The Company charges off those accounts that are deemed uncollectible once all collection efforts have been exhausted. Inventories Inventories are valued at the lower of cost or market. The cost of inventories is determined by the first-in, first-out (FIFO) method. The Company generally considers inventory quantities beyond two-years usage, measured on a historical usage basis, to be excess inventory and reduces the carrying value of inventory accordingly. Property and Equipment Property and equipment are carried at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or, for leasehold improvements, the life of the lease, if shorter. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in other income or expense for the period. The cost of maintenance and repairs is expensed as incurred; significant improvements are capitalized. Goodwill In accordance with Financial Accounting Standards Board (FASB) ASC Topic 350, Intangibles Goodwill and Other, the Company performed an annual impairment test in accordance with this guidance as of December 31, 2015. This analyses did not indicate any impairment of goodwill. There were no circumstances that indicate that goodwill might be impaired at March 31, 2016. Stock-Based Compensation Plans In 2006, the Company adopted a Phantom Stock Plan (the Plan), which allows the Company to grant phantom stock units (Units) to certain key employees, officers or directors. The Units each represent a contractual right to payment of compensation in the future based upon the market value of the Companys common stock. The Units follow a vesting schedule of three years from the grant date, and are then paid upon maturity. In accordance with FASB ASC Topic 718, Stock Compensation, the Company uses the Black-Scholes option pricing model as its method for determining the fair value of the Units. Further details of the Plan are provided in Note 6. Product Liability Reserves Product liability reserves represent the estimated unpaid amounts under the Companys insurance policies with respect to existing claims. The Company uses the most current available data to estimate claims. As explained more fully under Note 5, Commitments and Contingencies, for various product liability claims covered under the Companys general liability insurance policies, the Company must pay certain defense and settlement costs within its deductible or self-insured retention limits, ranging primarily from $25,000 to $250,000 per claim, depending on the terms of the policy in the applicable policy year, up to an aggregate amount. The Company is vigorously defending against all known claims. Fair Value of Financial and Nonfinancial Instruments The Company measures financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures. The accounting standard defines fair value, establishes a framework for measuring fair value under GAAP, and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard creates a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Companys own assumptions about the assumptions market participants would use in pricing the asset or liability. The Company relies on its actively traded share value a Level 1 input in determining the fair value of the reporting unit in its annual impairment test as described in the FASB ASC Topic 350, Intangibles - Goodwill and Other. Earnings per Common Share Basic earnings per share have been computed using the weighted-average number of common shares outstanding. For the periods presented, there are no dilutive securities. Consequently, basic and dilutive earnings per share are the same. Currency Translation Assets and liabilities denominated in foreign currencies, most of which relate to our United Kingdom subsidiary whose functional currency is British pound sterling, are translated into U.S. dollars at exchange rates prevailing on the balance sheet dates. The statements of income are translated into U.S. dollars at average exchange rates for the period. Adjustments resulting from the translation of financial statements are excluded from the determination of income and are accumulated in a separate component of shareholders equity. Exchange gains and losses resulting from foreign currency transactions are included in the statements of income (other expense) in the period in which they occur. Income Taxes The Company accounts for tax liabilities in accordance with the FASB ASC Topic 740, Income Taxes. Under this method the Company records tax expense, related deferred taxes and tax benefits, and uncertainties in tax positions. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain. The FASB ASC Topic 740, Income Taxes, clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a companys financial statements. This guidance prescribes a recognition threshold of more-likely than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company follows the provisions of ASC 740-10 relative to accounting for uncertainties in tax positions. These provisions provide guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions. The Company elected to recognize interest and penalties related to income tax matters as a component of the income tax provision in the consolidated statements of income. For additional information regarding ASC 740-10, see Note 8 of the Companys December 31, 2015 Form 10-K. The FASB ASU 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments of ASU 2015-17 apply to all organizations that present a classified balance sheet. For public companies, the amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the Company adopted this ASU prospectively in the calendar year ended December 31, 2015. As a result, the Company has presented all deferred tax assets and liabilities as noncurrent on its consolidated balance sheet starting with the year ended December 31, 2015. There was no impact on operations as a result of adoption of the FASB ASU 2015-17. Other Comprehensive Income For the quarters ended March 31, 2016 and 2015, respectively, the components of other comprehensive income consisted solely of foreign currency translation adjustments. Significant Concentration At March 31, 2016, the Company has one significant customer who represented more than 10% of the Companys Accounts Receivable, but that same customer was less than 10% of the Companys total Net Sales for the quarter ending March 31, 2016. At December 31, 2015, that same customer represented more than 10% of the Companys Accounts Receivable balance, and was also more than 10% of Net Sales for the first quarter of 2015. Geographically, the Company has a significant amount of sales in the United States versus internationally. These concentrations are discussed in detail in the Companys December 31, 2015 Form 10-K. Subsequent Events The Company evaluates all events or transactions through the date of the related filing that may have a material impact on its condensed consolidated financial statements. Refer to Note 9 of the condensed consolidated financial statements. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) lessees are required to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases. By definition, a short-term lease is one in which: (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which right-of-use assets and lease liabilities are not recognized and lease payments are generally recognized as expense over the lease term on a straight-line basis. This change will result in lessees recognizing right-of-use assets and lease liabilities for most leases currently accounted for as operating leases under the legacy lease accounting guidance. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. |
3. Inventories
3. Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
3. Inventories | 3. INVENTORIES Inventories, net of reserves of $664,000 and $969,000 at March 31, 2016 and December 31, 2015, respectively, consisted of the following: March 31, December 31, 2016 2015 (dollars in thousands) Finished Goods $ 5,625 $ 6,082 Raw Materials 2,159 2,205 Inventories - Net $ 7,784 $ 8,287 |
4. Line of Credit
4. Line of Credit | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
4. Line of Credit | 4. LINE OF CREDIT On December 29, 2014, the Company entered into to an Amended and Restated Committed Revolving Line of Credit Note (the Line) and a Second Amendment to the Loan Agreement with Santander Bank, N.A. (Santander). The Line facility in the maximum amount of $15,000,000, has a five year term maturing on December 31, 2019, with funds available for working capital purposes and to fund dividends, and is unsecured. The Line provides for the payment of any borrowings at an interest rate of either LIBOR plus 1.00% to plus 1.35% (for borrowings with a fixed term of 30, 60, or 90 days), or Prime from 0.00% to plus 0.10%, depending upon the Companys then existing financial ratios. At March 31, 2016, the Companys financial ratios would allow for the most favorable rate under the agreements range, which would be a rate of 1.63%. Under the terms of the agreement, the Company is required to pay on a quarterly basis an unused facility fee equal to 10 basis points of the average unused balance of the total Line commitment. As of March 31, 2016 and December 31, 2015, the Company had no outstanding borrowings on its line of credit, and was in compliance with all debt covenants. |
5. Commitments and Contingencie
5. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
5. Commitments and Contingencies | 5. COMMITMENTS AND CONTINGENCIES Commitments: Under a number of indemnity agreements between the Company and each of its officers and directors, the Company has agreed to indemnify each of its officers and directors against any liability asserted against them in their capacity as an officer or director, or both. The Companys indemnity obligations under the indemnity agreements are subject to certain conditions and limitations set forth in each of the agreements. Under the terms of the Agreement, the Company is contingently liable for costs which may be incurred by the officers and directors in connection with claims arising by reason of these individuals roles as officers and directors. The Company has obtained directors and officers insurance policies to fund certain obligations under the indemnity agreements. The Company has salary continuation agreements with one current employee, and one former employee who retired at the end of 2010. These agreements provide for monthly payments to each of the employees or their designated beneficiary upon the employees retirement or death. The payment benefits range from $1,000 per month to $3,000 per month with the term of such payments limited to 15 years after the employees retirement at age 65. The agreements also provide for survivorship benefits if the employee dies before attaining age 65, and severance payments if the employee is terminated without cause; the amount of which is dependent on the length of company service at the date of termination. The net present value of the retirement payments associated with these agreements is $518,000 at March 31, 2016, of which $497,000 is included in Other Long Term Liabilities, and the remaining current portion of $21,000 is included in Other Liabilities, associated with each of the individuals as our current employee is expected to meet retirement age by the end of the year. The December 31, 2015 liability of $508,000, had $496,000 reported in Other Long Term Liabilities, and a current portion of $12,000 in Other Liabilities. The Company has obtained and is the beneficiary of three whole life insurance policies with respect to the two employees discussed above, and one other employee policy. The cash surrender value of such policies (included in Other Long Term Assets) amounts to $1,110,000 at March 31, 2016 and $1,091,000 at December 31, 2015. As disclosed in detail in Note 9 of the Companys December 31, 2015 Form 10-K, under the caption Leases, the Company has several lease obligations in place that will be paid out over time. Most notably, the Company leases facilities in Banbury, England, and Exton, Pennsylvania in the United States that both serve the manufacturing, warehousing and distribution functions. Contingencies: In the ordinary and normal conduct of the Companys business, it is subject to periodic lawsuits, investigations and claims (collectively, the Claims). Beginning in 2010, the Company experienced an increase in the number of Claims related to lightning subrogation, which increased legal and product liability related expenses. The Company did not believe the Claims had legal merit, and therefore commenced a vigorous defense in response to the Claims. Due to the Companys success over the years in defending itself, and success in several cases that went to trial, the pace of new Claims has decreased over the last couple of years. Although the pace of new Claims has decreased, expenses during 2015 and in the first quarter of 2016 have increased over comparable periods due to the Companys heightened and vigorous defense of certain cases. The increased level of spending may continue further into 2016. To reiterate, the Company does not believe that the Claims have legal merit, and is therefore vigorously defending against those Claims. In 2013, the Company won two of the Claims at two separate trials, both of which were held in U.S. District Court; one in St. Louis, Missouri and the other in Bridgeport, Connecticut. In both cases, the jury unanimously found that the Company was not negligent in designing its TracPipe ® ® The Company has in place commercial general liability insurance policies that cover the Claims, which are subject to deductibles or retentions, ranging primarily from $25,000 to $250,000 per claim (depending on the terms of the policy and the applicable policy year), up to an aggregate amount. Litigation is subject to many uncertainties and management is unable to predict the outcome of the pending suits and claims. The potential liability for a given claim could range from zero to a maximum of $250,000, depending upon the circumstances, and insurance deductible or retention in place for the respective claim year. The aggregate maximum exposure for all current open Claims is estimated to not exceed approximately $3,200,000, which represents the potential costs that may be incurred over time for the Claims within the applicable insurance policy deductibles or retentions. From time to time, depending upon the nature of a particular case, the Company may decide to spend in excess of a deductible or retention to enable more discretion regarding the defense, although this is not common. It is possible that the results of operations or liquidity of the Company, as well as the Companys ability to procure reasonably priced insurance, could be adversely affected by the pending litigation, potentially materially. The Company is currently unable to estimate the ultimate liability, if any, that may result from the pending litigation, or potential litigation from future claims or claims that have not yet come to our attention, and accordingly, the liability in the consolidated financial statements primarily represents an accrual for legal costs for services previously rendered and outstanding settlements for existing claims. The liabilities recorded on the Companys books at March 31, 2016 and December 31, 2015 were $299,000 and $249,000, respectively, and are included in Other Liabilities. Finally, in February of 2012, the Company was made aware of a fraud perpetrated by an outside party involving insurance related premiums that the Company had prepaid for umbrella coverage. The assets are currently secured by a governmental agency which investigated the case, and held in a custodial account. In June of 2015, utilizing the secured funds, the court has approved restitution to all victims including the Company. It is not clear however at this point what amount will eventually be received by the Company. The value of the assets on the books amount to $213,000 at March 31, 2016 and December 31, 2015, and are included in Other Long Term Assets. It is possible that not all of those funds will be returned to the Company, or the Company may need to incur additional costs to procure collection. The Company is currently pursuing all avenues in an effort to bring closure to the event, and reclaim the assets, and has since replaced the aforementioned insurance coverage. |
6. Stock Based Plans
6. Stock Based Plans | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
6. Stock Based Plans | 6. STOCK BASED PLANS Phantom Stock Plan Plan Description. does not ownership interest in the Company shareholder voting rights other incidents of ownership to the Companys common stock The Units are granted to participants upon the recommendation of the Companys CEO, and the approval of the Compensation Committee. Each of the Units that are granted to a participant will be initially valued by the Compensation Committee, at an amount equal to the closing price of the Companys common stock on the grant date, but are recorded at fair value using the Black-Sholes method as described below. The Units follow a vesting schedule, with a maximum vesting of three years after the grant date. Upon vesting, the Units represent a contractual right of payment for the value of the Unit. The Units will be paid on their maturity date, one year after all of the Units granted in a particular award have fully vested, unless an acceptable event occurs under the terms of the Plan prior to one year, which would allow for earlier payment. The amount to be paid to the participant on the maturity date is dependent on the type of Unit granted to the participant. The Units may be Full Value, Appreciation Only minus On December 9, 2009, the Board of Directors authorized an amendment to the Plan to pay an amount equal to the value of any cash or stock dividend declared by the Company on its common stock to be accrued to the phantom stock units outstanding as of the record date of the common stock dividend. The dividend equivalent will be paid at the same time the underlying phantom stock units are paid to the participant. In certain circumstances, the Units may be immediately vested upon the participants death or disability. All Units granted to a participant are forfeited if the participant is terminated from his relationship with the Company or its subsidiary for cause, which is defined under the Plan. If a participants employment or relationship with the Company is terminated for reasons other than for cause, then any vested Units will be paid to the participant upon termination. However, Units granted to certain specified employees as defined in Section 409A of the Internal Revenue Code will be paid approximately 181 days after termination. Grants of Phantom Stock Units. Full Value Full Value The Company uses the Black-Scholes option pricing model as its method for determining fair value of the Units. The Company uses the straight-line method of attributing the value of the stock-based compensation expense relating to the Units. The compensation expense (including adjustment of the liability to its fair value) from the Units is recognized over the vesting period of each grant or award. The FASB ASC Topic 718, Stock Compensation, requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates in order to derive the Companys best estimate of awards ultimately to vest. Forfeitures represent only the unvested portion of a surrendered Unit and are typically estimated based on historical experience. Based on an analysis of the Companys historical data, which has limited experience related to any stock-based plan forfeitures, the Company applied a 0% forfeiture rate to Plan Units outstanding in determining its Plan Unit compensation expense as of March 31, 2016. The total Phantom Stock related liability as of March 31, 2016 was $724,000 which is included in Other Long Term Liabilities. At December 31, 2015, the total Phantom Stock liability was $905,000, with $310,000 in Other Liabilities, and $595,000 included in Other Long Term Liabilities. In accordance with FASB ASC Topic 718, Stock Compensation, the Company recorded compensation expense of approximately $130,000 for the three months ended March 31, 2016, and compensation income of approximately $213,000 related to the Phantom Stock Plan for the three months ended March 31, 2015. The following table summarizes information about the Companys nonvested phantom stock Units at March 31, 2016: Units Weighted Average Grant Date Fair Value Number of Phantom Stock Unit Awards: Nonvested at December 31, 2015 20,335 $ 22.74 Granted 10,460 $ 30.57 Vested (6,973) $ 23.31 Forfeited --- --- Canceled --- --- Nonvested at March 31, 2016 23,822 $ 26.01 Phantom Stock Unit Awards Expected to Vest 23,822 $ 26.01 The total unrecognized compensation costs calculated at March 31, 2016 are $647,000 which will be recognized through February of 2019. The Company will recognize the related expense over the weighted average period of 1.9 years. |
7. Noncontrolling Interests
7. Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
7. Noncontrolling Interests | 7. NONCONTROLLING INTERESTS The Company owns 100% of all subsidiaries, except for a small portion of one, which is owned by a Noncontrolling Interest. At December 31, 2015, total Shareholders Equity was $41,154,000, and the Noncontrolling Interest was $272,000. For the three month period ended March 31, 2016, the Noncontrolling Interests portion of Net Income was approximately $44,000, and their portion of Other Comprehensive Income was a loss of $8,000. At March 31, 2016, total Shareholders Equity was $43,719,000, of which the Noncontrolling Interest held a value of $308,000. |
8. Shareholders' Equity
8. Shareholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
8. Shareholders' Equity | 8. SHAREHOLDERS EQUITY As of March 31, 2016 and December 31, 2015, the Company had authorized 20,000,000 common stock shares with par value of $0.01 per share. At both dates, the number of shares issued was 10,153,633, and the total number of outstanding shares was 10,091,822, with the 61,811 variance representing shares held in Treasury. On December 10, 2015, the Board declared a special dividend of $0.85 per share to all Shareholders of record as of December 21, 2015, and payable on or before January 6, 2016. The Company paid its transfer agent $8,578,000 on January 5, 2016, and the transfer agent paid the shareholders on January 6, 2016. On December 10, 2014, the Board declared a special dividend of $0.49 per share to all Shareholders of record as of December 22, 2014, which was paid on January 5, 2015, in the amount of $4,945,000. On April 4, 2014, the Companys Board of Directors authorized an extension of its stock repurchase program without expiration, up to a maximum amount of $1,000,000. The original program established in December of 2007 authorized the purchase of up to $5,000,000 of its common stock. The purchases may be made from time-to-time in the open market or in privately negotiated transactions, depending on market and business conditions. The Board retained the right to cancel, extend, or expand the share buyback program, at any time and from time-to-time. Since inception, the Company has purchased a total of 61,811 shares for approximately $932,000, or approximately $15 per share. The Company did not make any stock repurchases during the first quarter of 2016, or for the year ended December 31, 2015. |
9. Subsequent Events
9. Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
9. Subsequent Events | 9. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred through the date of this filing. During this period, the Company did not have any material subsequent events that impacted its condensed consolidated financial statements that are not disclosed. |
1. Basis of Presentation and 16
1. Basis of Presentation and Description of Business: Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Omega Flex, Inc. (Omega) and its subsidiaries (collectively the Company). The Companys unaudited condensed consolidated financial statements for the quarter ended March 31, 2016 have been prepared in accordance with accounting principles generally accepted in the United States (GAAP), and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Companys latest shareholders annual report (Form 10-K). All material inter-company accounts and transactions have been eliminated in consolidation. Certain amounts from prior years have been reclassified to conform to current year presentation. It is Managements opinion that all adjustments necessary for a fair statement of the results for the interim periods have been made, and that all adjustments are of a normal recurring nature or a description is provided for any adjustments that are not of a normal recurring nature. |
2. Significant Accounting Pol17
2. Significant Accounting Policies: Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant estimates and assumptions relate to revenue recognition and related sales incentives, accounts receivable allowances, inventory valuations, goodwill valuation, product liability reserve, stock-based compensation valuations and accounting for income taxes. Actual amounts could differ significantly from these estimates. |
2. Significant Accounting Pol18
2. Significant Accounting Policies: Revenue Recognition (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Revenue Recognition | Revenue Recognition The Companys revenue recognition activities relate almost entirely to the manufacture and sale of flexible metal hose and pipe. Under GAAP, revenues are considered to have been earned when the Company has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. The following criteria represent preconditions to the recognition of revenue: Persuasive evidence of an arrangement for the sale of product or services must exist. Delivery has occurred or services rendered. The sales price to the customer is fixed or determinable. Collection is reasonably assured. The Company recognizes revenue upon shipment in accordance with the above principles. Gross sales are reduced for all consideration paid to customers for which no identifiable benefit is received by the Company. This includes promotional incentives, which includes various programs including year-end rebates, and payment term discounts. The amounts of certain incentives are known with reasonable certainty at the time of sale, while others are projected based upon the most reliable information available at the reporting date. Commissions are accounted for as a selling expense. |
2. Significant Accounting Pol19
2. Significant Accounting Policies: Cash Equivalents (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents include investments in an institutional money market fund, which invests in U.S. Treasury bills, notes and bonds, and/or repurchase agreements, backed by such obligations. Carrying value approximates fair value. Cash and cash equivalents are deposited at various area banks, which at times may exceed federally insured limits. The Company monitors the viability of the banking institutions carrying its assets on a regular basis, and has the ability to transfer cash to various institutions during times of risk. The Company has not experienced any losses related to these cash balances, and believes its credit risk to be minimal. |
2. Significant Accounting Pol20
2. Significant Accounting Policies: Accounts Receivable and Provision For Doubtful Accounts (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Accounts Receivable and Provision For Doubtful Accounts | Accounts Receivable and Provision for Doubtful Accounts Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future. The estimated allowance for uncollectible amounts is based primarily on specific analysis of accounts in the receivable portfolio and historical write-off experience. While management believes the allowance to be adequate, if the financial condition of the Companys customers were to deteriorate, resulting in their inability to make payments, additional allowances may be required. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on any known collection issues, historical experience, and other currently available evidence. The reserve for future credits, discounts, and doubtful accounts was $687,000 and $882,000 as of March 31, 2016 and December 31, 2015, respectively. In regards to identifying uncollectible accounts, the Company reviews an aging report on a consistent basis to determine past due accounts, and utilizes a well established credit rating agency. The Company charges off those accounts that are deemed uncollectible once all collection efforts have been exhausted. |
2. Significant Accounting Pol21
2. Significant Accounting Policies: Inventories (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Inventories | Inventories Inventories are valued at the lower of cost or market. The cost of inventories is determined by the first-in, first-out (FIFO) method. The Company generally considers inventory quantities beyond two-years usage, measured on a historical usage basis, to be excess inventory and reduces the carrying value of inventory accordingly. |
2. Significant Accounting Pol22
2. Significant Accounting Policies: Property and Equipment (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Property and Equipment | Property and Equipment Property and equipment are carried at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or, for leasehold improvements, the life of the lease, if shorter. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in other income or expense for the period. The cost of maintenance and repairs is expensed as incurred; significant improvements are capitalized. |
2. Significant Accounting Pol23
2. Significant Accounting Policies: Goodwill (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Goodwill | Goodwill In accordance with Financial Accounting Standards Board (FASB) ASC Topic 350, Intangibles Goodwill and Other, the Company performed an annual impairment test in accordance with this guidance as of December 31, 2015. This analyses did not indicate any impairment of goodwill. There were no circumstances that indicate that goodwill might be impaired at March 31, 2016. |
2. Significant Accounting Pol24
2. Significant Accounting Policies: Stock-based Compensation Plans (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Stock-based Compensation Plans | Stock-Based Compensation Plans In 2006, the Company adopted a Phantom Stock Plan (the Plan), which allows the Company to grant phantom stock units (Units) to certain key employees, officers or directors. The Units each represent a contractual right to payment of compensation in the future based upon the market value of the Companys common stock. The Units follow a vesting schedule of three years from the grant date, and are then paid upon maturity. In accordance with FASB ASC Topic 718, Stock Compensation, the Company uses the Black-Scholes option pricing model as its method for determining the fair value of the Units. Further details of the Plan are provided in Note 6. |
2. Significant Accounting Pol25
2. Significant Accounting Policies: Product Liability Reserves (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Product Liability Reserves | Product Liability Reserves Product liability reserves represent the estimated unpaid amounts under the Companys insurance policies with respect to existing claims. The Company uses the most current available data to estimate claims. As explained more fully under Note 5, Commitments and Contingencies, for various product liability claims covered under the Companys general liability insurance policies, the Company must pay certain defense and settlement costs within its deductible or self-insured retention limits, ranging primarily from $25,000 to $250,000 per claim, depending on the terms of the policy in the applicable policy year, up to an aggregate amount. The Company is vigorously defending against all known claims. |
2. Significant Accounting Pol26
2. Significant Accounting Policies: Fair Value of Financial and Nonfinancial Instruments (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Fair Value of Financial and Nonfinancial Instruments | Fair Value of Financial and Nonfinancial Instruments The Company measures financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures. The accounting standard defines fair value, establishes a framework for measuring fair value under GAAP, and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard creates a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Companys own assumptions about the assumptions market participants would use in pricing the asset or liability. The Company relies on its actively traded share value a Level 1 input in determining the fair value of the reporting unit in its annual impairment test as described in the FASB ASC Topic 350, Intangibles - Goodwill and Other. |
2. Significant Accounting Pol27
2. Significant Accounting Policies: Earnings Per Common Share (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Earnings Per Common Share | Earnings per Common Share Basic earnings per share have been computed using the weighted-average number of common shares outstanding. For the periods presented, there are no dilutive securities. Consequently, basic and dilutive earnings per share are the same. |
2. Significant Accounting Pol28
2. Significant Accounting Policies: Currency Translation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Currency Translation | Currency Translation Assets and liabilities denominated in foreign currencies, most of which relate to our United Kingdom subsidiary whose functional currency is British pound sterling, are translated into U.S. dollars at exchange rates prevailing on the balance sheet dates. The statements of income are translated into U.S. dollars at average exchange rates for the period. Adjustments resulting from the translation of financial statements are excluded from the determination of income and are accumulated in a separate component of shareholders equity. Exchange gains and losses resulting from foreign currency transactions are included in the statements of income (other expense) in the period in which they occur. |
2. Significant Accounting Pol29
2. Significant Accounting Policies: Income Taxes (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Income Taxes | Income Taxes The Company accounts for tax liabilities in accordance with the FASB ASC Topic 740, Income Taxes. Under this method the Company records tax expense, related deferred taxes and tax benefits, and uncertainties in tax positions. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain. The FASB ASC Topic 740, Income Taxes, clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a companys financial statements. This guidance prescribes a recognition threshold of more-likely than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company follows the provisions of ASC 740-10 relative to accounting for uncertainties in tax positions. These provisions provide guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions. The Company elected to recognize interest and penalties related to income tax matters as a component of the income tax provision in the consolidated statements of income. For additional information regarding ASC 740-10, see Note 8 of the Companys December 31, 2015 Form 10-K. The FASB ASU 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments of ASU 2015-17 apply to all organizations that present a classified balance sheet. For public companies, the amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the Company adopted this ASU prospectively in the calendar year ended December 31, 2015. As a result, the Company has presented all deferred tax assets and liabilities as noncurrent on its consolidated balance sheet starting with the year ended December 31, 2015. There was no impact on operations as a result of adoption of the FASB ASU 2015-17. |
2. Significant Accounting Pol30
2. Significant Accounting Policies: Other Comprehensive Income (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Other Comprehensive Income | Other Comprehensive Income For the quarters ended March 31, 2016 and 2015, respectively, the components of other comprehensive income consisted solely of foreign currency translation adjustments. |
2. Significant Accounting Pol31
2. Significant Accounting Policies: Significant Concentration (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Significant Concentration | Significant Concentration At March 31, 2016, the Company has one significant customer who represented more than 10% of the Companys Accounts Receivable, but that same customer was less than 10% of the Companys total Net Sales for the quarter ending March 31, 2016. At December 31, 2015, that same customer represented more than 10% of the Companys Accounts Receivable balance, and was also more than 10% of Net Sales for the first quarter of 2015. Geographically, the Company has a significant amount of sales in the United States versus internationally. These concentrations are discussed in detail in the Companys December 31, 2015 Form 10-K. |
2. Significant Accounting Pol32
2. Significant Accounting Policies: Subsequent Events (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Subsequent Events | Subsequent Events The Company evaluates all events or transactions through the date of the related filing that may have a material impact on its condensed consolidated financial statements. Refer to Note 9 of the condensed consolidated financial statements. |
2. Significant Accounting Pol33
2. Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) lessees are required to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases. By definition, a short-term lease is one in which: (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which right-of-use assets and lease liabilities are not recognized and lease payments are generally recognized as expense over the lease term on a straight-line basis. This change will result in lessees recognizing right-of-use assets and lease liabilities for most leases currently accounted for as operating leases under the legacy lease accounting guidance. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. |
3. Inventories_ Schedule of Inv
3. Inventories: Schedule of Inventory, Current (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Inventory, Current | March 31, December 31, 2016 2015 (dollars in thousands) Finished Goods $ 5,625 $ 6,082 Raw Materials 2,159 2,205 Inventories - Net $ 7,784 $ 8,287 |
6. Stock Based Plans_ Schedule
6. Stock Based Plans: Schedule of nonvested phantom stock units (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of nonvested phantom stock units | Units Weighted Average Grant Date Fair Value Number of Phantom Stock Unit Awards: Nonvested at December 31, 2015 20,335 $ 22.74 Granted 10,460 $ 30.57 Vested (6,973) $ 23.31 Forfeited --- --- Canceled --- --- Nonvested at March 31, 2016 23,822 $ 26.01 Phantom Stock Unit Awards Expected to Vest 23,822 $ 26.01 |
2. Significant Accounting Pol36
2. Significant Accounting Policies: Accounts Receivable and Provision For Doubtful Accounts (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Details | ||
Allowance for doubtful Accounts Receivable | $ 687 | $ 882 |
3. Inventories_ Schedule of I37
3. Inventories: Schedule of Inventory, Current (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Details | ||
Inventory, Finished Goods, Net | $ 5,625 | $ 6,082 |
Inventory, Raw Materials, Net | 2,159 | 2,205 |
Inventories - Net | $ 7,784 | $ 8,287 |
4. Line of Credit (Details)
4. Line of Credit (Details) - Santander Bank, N.A. - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Line of Credit Facility, Description | On December 29, 2014, the Company entered into to an Amended and Restated Committed Revolving Line of Credit Note (“the Line”) and a Second Amendment to the Loan Agreement with Santander Bank, N.A. (“Santander”). | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 15,000 | |
Line of Credit Facility, Interest Rate Description | The Line provides for the payment of any borrowings at an interest rate of either LIBOR plus 1.00% to plus 1.35% (for borrowings with a fixed term of 30, 60, or 90 days), or Prime from 0.00% to plus 0.10%, depending upon the Company’s then existing financial ratios. At March 31, 2016, the Company’s financial ratios would allow for the most favorable rate under the agreement’s range, which would be a rate of 1.63%. | |
Line of Credit Facility, Commitment Fee Description | the Company is required to pay on a quarterly basis an unused facility fee equal to 10 basis points of the average unused balance of the total Line commitment. | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | $ 0 |
5. Commitments and Contingenc39
5. Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Loss Contingency, Management's Assessment and Process | Under a number of indemnity agreements between the Company and each of its officers and directors, the Company has agreed to indemnify each of its officers and directors against any liability asserted against them in their capacity as an officer or director, or both. The Company’s indemnity obligations under the indemnity agreements are subject to certain conditions and limitations set forth in each of the agreements. Under the terms of the Agreement, the Company is contingently liable for costs which may be incurred by the officers and directors in connection with claims arising by reason of these individuals’ roles as officers and directors. The Company has obtained directors’ and officers’ insurance policies to fund certain obligations under the indemnity agreements. | |
Deferred Compensation Arrangements, Overall, Description | The Company has salary continuation agreements with one current employee, and one former employee who retired at the end of 2010. These agreements provide for monthly payments to each of the employees or their designated beneficiary upon the employee’s retirement or death. The payment benefits range from $1,000 per month to $3,000 per month with the term of such payments limited to 15 years after the employee’s retirement at age 65. The agreements also provide for survivorship benefits if the employee dies before attaining age 65, and severance payments if the employee is terminated without cause; the amount of which is dependent on the length of company service at the date of termination. | |
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent | $ 518 | $ 508 |
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent | 497 | 496 |
Other Deferred Compensation Arrangements, Liability, Current | 21 | 12 |
Cash Surrender Value of Life Insurance | $ 1,110 | $ 1,091 |
5. Commitments and Contingenc40
5. Commitments and Contingencies: Contingencies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Positive Outcome of Litigation | ||
Loss Contingency, Range of Possible Loss, Maximum | $ 213,000 | $ 213,000 |
Loss Contingency, Balance Sheet Caption | Other Long Term Assets | |
Insurance Claims | ||
Product Liability Inurance Deductible - Range, minimum | $ 25,000 | |
Product Liability Inurance Deductible - Range, maximum | $ 250,000 |
6. Stock Based Plans (Details)
6. Stock Based Plans (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Details | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 10 months 24 days |
7. Noncontrolling Interests (De
7. Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Details | |||
Total Shareholders' Equity | $ 43,719 | $ 41,154 | |
Shareholders' Equity attributable to non-controlling interest | 308 | $ 272 | |
Net (Income) Loss attributable to the Noncontrolling Interest, net of tax | (44) | $ (43) | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | $ 8 |
8. Shareholders' Equity (Detail
8. Shareholders' Equity (Details) - USD ($) | 103 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | Dec. 10, 2015 | Dec. 10, 2014 | |
Details | ||||
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 | ||
Common Stock, Par Value | $ 0.01 | $ 0.01 | ||
Common Stock, Shares Issued | 10,153,633 | 10,153,633 | ||
Common Stock, Shares Outstanding | 10,091,822 | 10,091,822 | ||
Treasury Stock, Number of Shares Held | 61,811 | 61,811 | ||
Dividends Payable, Amount Per Share | $ 0.85 | $ 0.49 | ||
Stock Repurchase Program, Authorized Amount | $ 5,000,000 | |||
Stock Repurchased During Period, Shares | 61,811 | |||
Stock Repurchased During Period, Value | $ 932,000 |