Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2020shares | |
Document And Entity Information | |
Entity Registrant Name | Omega Flex, Inc. |
Entity Central Index Key | 0001317945 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Small Business Flag | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 10,094,322 |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and Cash Equivalents | $ 13,834 | $ 16,098 |
Accounts Receivable - less allowances of $1,103 and $1,433, respectively | 15,524 | 17,047 |
Inventories - Net | 11,222 | 11,078 |
Other Current Assets | 1,503 | 2,097 |
Total Current Assets | 42,083 | 46,320 |
Right-Of-Use Assets - Operating | 664 | 771 |
Property and Equipment - Net | 8,830 | 8,909 |
Goodwill - Net | 3,526 | 3,526 |
Deferred Taxes | 4 | 4 |
Other Long Term Assets | 1,411 | 1,454 |
Total Assets | 56,518 | 60,984 |
Current Liabilities: | ||
Accounts Payable | 2,156 | 2,383 |
Accrued Compensation | 1,422 | 4,618 |
Accrued Commissions and Sales Incentives | 3,006 | 4,461 |
Dividends Payable | 2,826 | 2,826 |
Taxes Payable | 1,534 | 423 |
Lease Liability - Operating | 355 | 369 |
Other Liabilities | 3,551 | 5,404 |
Total Current Liabilities | 14,850 | 20,484 |
Lease Liability - Operating, net of current portion | 323 | 418 |
Deferred Taxes | 542 | 331 |
Long Term Taxes Payable | 559 | |
Other Long Term Liabilities | 1,304 | 2,175 |
Total Liabilities | 17,578 | 23,408 |
Commitments and Contingencies (Note 5) | ||
Omega Flex, Inc. Shareholders' Equity: | ||
Common Stock - par value $0.01 share: authorized 20,000,000 shares: 10,153,633 shares issued and 10,094,322 outstanding at both March 31, 2020 and December 31, 2019 | 102 | 102 |
Treasury Stock | (1) | (1) |
Paid-in Capital | 11,025 | 11,025 |
Retained Earnings | 28,683 | 27,165 |
Accumulated Other Comprehensive Loss | (1,073) | (909) |
Total Omega Flex, Inc. Shareholders' Equity | 38,736 | 37,382 |
Noncontrolling Interest | 204 | 194 |
Total Shareholders' Equity | 38,940 | 37,576 |
Total Liabilities and Shareholders' Equity | $ 56,518 | $ 60,984 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 03, 2020 | Dec. 31, 2019 | Dec. 30, 2019 | Oct. 02, 2019 | Jul. 02, 2019 | Apr. 29, 2019 | Jan. 03, 2019 |
Statement of Financial Position [Abstract] | ||||||||
Allowance for doubtful accounts receivable | $ 1,103 | $ 1,433 | ||||||
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 | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,091,822 | 10,091,822 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net Sales | $ 25,266 | $ 26,788 |
Cost of Goods Sold | 9,497 | 9,842 |
Gross Profit | 15,769 | 16,946 |
Selling Expense | 4,551 | 4,510 |
General and Administrative Expense | 4,253 | 5,504 |
Engineering Expense | 1,120 | 1,341 |
Operating Profit | 5,845 | 5,591 |
Interest Income | 45 | 220 |
Other Income (Loss) | (108) | 38 |
Income Before Income Taxes | 5,782 | 5,849 |
Income Tax Expense | 1,416 | 1,418 |
Net Income | 4,366 | 4,431 |
Less: Net Income attributable to the Noncontrolling Interest, Net of Tax | (22) | (49) |
Net Income attributable to Omega Flex, Inc. | $ 4,344 | $ 4,382 |
Basic and Diluted Earnings per Common Share | $ 0.43 | $ 0.43 |
Basic and Diluted Weighted-Average Shares Outstanding | 10,094 | 10,092 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net Income | $ 4,366 | $ 4,431 |
Other Comprehensive Income (Loss): | ||
Foreign Currency Translation Adjustment | (176) | 88 |
Other Comprehensive Income (Loss) | (176) | 88 |
Comprehensive Income | 4,190 | 4,519 |
Less: Comprehensive Income Attributable to the Noncontrolling Interest | (10) | (55) |
Total Other Comprehensive Income | $ 4,180 | $ 4,464 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Paid In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2018 | $ 102 | $ (1) | $ 10,808 | $ 56,110 | $ (950) | $ 252 | $ 66,321 |
Balance, shares at Dec. 31, 2018 | 10,091,822 | ||||||
Net Income | 4,382 | 49 | 4,431 | ||||
Cumulative Translation Adjustment | 82 | 6 | 88 | ||||
Balance at Mar. 31, 2019 | $ 102 | (1) | 10,808 | 60,492 | (868) | 307 | 70,840 |
Balance, shares at Mar. 31, 2019 | 10,091,822 | ||||||
Balance at Dec. 31, 2019 | $ 102 | (1) | 11,025 | 27,165 | (909) | 194 | 37,576 |
Balance, shares at Dec. 31, 2019 | 10,094,322 | ||||||
Net Income | 4,344 | 22 | 4,366 | ||||
Cumulative Translation Adjustment | (164) | (12) | (176) | ||||
Dividends Declared | (2,826) | (2,826) | |||||
Balance at Mar. 31, 2020 | $ 102 | $ (1) | $ 11,025 | $ 28,683 | $ (1,073) | $ 204 | $ 38,940 |
Balance, shares at Mar. 31, 2020 | 10,094,322 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net Income | $ 4,366 | $ 4,431 |
Adjustments to Reconcile Net Income to Net Cash Provided By (Used In) Operating Activities: | ||
Non-Cash Compensation | (467) | 746 |
Depreciation and Amortization | 211 | 150 |
Provision for Losses on Accounts Receivable, net of write-offs and recoveries | (320) | (13) |
Deferred Taxes | 211 | (145) |
Provision for Inventory Reserves | (127) | (70) |
Changes in Assets and Liabilities: | ||
Accounts Receivable | 1,733 | (503) |
Inventories | (112) | (764) |
Right-Of-Use Assets | 89 | (666) |
Other Assets | 634 | 362 |
Accounts Payable | (206) | (762) |
Accrued Compensation | (3,177) | (4,007) |
Accrued Commissions and Sales Incentives | (1,444) | (1,293) |
Lease Liabilities | (91) | 686 |
Other Liabilities | (549) | 892 |
Net Cash Provided By (Used In) Operating Activities | 751 | (956) |
Cash Flows from Investing Activities: | ||
Purchase of Investments | (22,816) | |
Net Proceeds from Sale of Investments | 15,000 | |
Capital Expenditures | (145) | (299) |
Net Cash Used in Investing Activities | (145) | (8,115) |
Cash Flows from Financing Activities: | ||
Dividends Paid | (2,826) | (2,422) |
Net Cash Used in Financing Activities | (2,826) | (2,422) |
Net Decrease in Cash and Cash Equivalents | (2,220) | (11,493) |
Translation effect on cash | (44) | 52 |
Cash and Cash Equivalents - Beginning of Period | 16,098 | 32,392 |
Cash and Cash Equivalents - End of Period | 13,834 | 20,951 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for Income Taxes | 207 | 245 |
Declared Dividend | $ 2,826 |
Basis of Presentation and Descr
Basis of Presentation and Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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 Company’s unaudited condensed consolidated financial statements for the quarter ended March 31, 2020 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 Company’s latest shareholders’ annual report (Form 10-K). All material inter-company accounts and transactions have been eliminated in consolidation. It is Management’s 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’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal hose (also described as corrugated tubing), as well as the sale of the Company’s related proprietary fittings and a vast array of accessories. The Company is a leading manufacturer of flexible metal hose, which is used in a variety of applications to carry gases and liquids within their particular applications. The Company’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal hose and accessories. These applications include carrying liquefied gases in certain processing applications, fuel gases within residential and commercial buildings, medical gases in health care facilities, and vibration absorbers in high vibration applications. The Company’s flexible metal piping is also used to carry other types of gases and fluids in a number of industrial applications where the customer requires the piping to have both a degree of flexibility and/or an ability to carry corrosive compounds or mixtures, or to carry at both very high and very low (cryogenic) temperatures. The Company manufactures flexible metal hose at its facilities in Exton, Pennsylvania and Houston, Texas, in the United States, and in Banbury, Oxfordshire in the UK, and sells its products through distributors, wholesalers and to original equipment manufacturers (“OEMs”) throughout North America, and in certain European markets. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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, investment valuations, 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 According to Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) The principle of Topic 606 is achieved through applying the following five-step approach: ● Identification of the contract, or contracts, with a customer — ● Identification of the performance obligations in the contract — ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, the Company satisfies a performance obligation ● The Company has a present right to payment ● The customer has legal title to the goods ● The Company has transferred physical possession of the goods ● The customer has the significant risks and rewards of ownership of the goods ● The customer has accepted the goods It is important to note that the indicators are not a set of conditions that must be met before the Company can conclude that control of the goods has transferred to the customer. The indicators are a list of factors that are often present if a customer has control of the goods. The Company has typical, unmodified FOB shipping point terms. As the seller, the Company can determine that the shipped goods meet the agreed-upon specifications in the contract or customer purchase order (e.g. items, quantities, and prices) with the buyer, so customer acceptance would be deemed a formality, as noted in ASC 606-10-55-86. As a result, the Company has a legal right to payment upon shipment of the goods. Based upon the above, the Company has concluded that transfer of control substantively transfers to the customer upon shipment. Other considerations of Topic 606 include the following: ● Contract Costs - ● Warranties ● Returned Goods ● Volume Rebates (Promotional Incentives) ● The amount of consideration is highly susceptible to factors outside the Company’s influence. ● The uncertainty about the amount of consideration is not expected to be resolved for a long period of time. ● The Company’s experience with similar types of contracts is limited. ● The contract has a large number and broad range of possible consideration amounts. If it was concluded that the above factors were in place for the Company, it would support the probability of a significant reversal of revenue. However, as none of the four factors apply to the Company, promotional incentives are recorded as a reduction of revenue based upon estimates of the eligible products expected to be sold. Regarding disaggregated revenue disclosures, as previously noted, the Company’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal hose. Most of the Company’s transactions are very similar in nature, contract, terms, timing, and transfer of control of goods. As indicated within Note 2, under the caption “Significant Concentration”, the majority of the Company’s sales were geographically contained within North America, with the remainder scattered internationally. All performance assessments and resource allocations are generally based upon the review of the results of the Company as a whole. 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 Credit Losses All accounts receivables are stated at amortized cost, net of allowances for credit losses, and adjusted for any write-offs. The Company maintains allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in its receivable portfolio. For accounts receivables, the Company uses historical loss experience rates and applies them to a related aging analysis while also considering customer and/or economic risk where appropriate. Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowances consider numerous quantitative and qualitative factors that include receivable type, historical loss experience, delinquency trends, collection experience, current economic conditions, estimates for supportable forecasts, when appropriate, and credit risk characteristics. The reserve for credit losses, which include future credits, discounts, and doubtful accounts, was $1,103,000 and $1,433,000 as of March 31, 2020 and December 31, 2019, respectively. Investments The Company invests excess funds in liquid interest earning instruments including U.S. Treasury bills and bank time deposits, with maturities typically of one year or less. These investments are stated at fair value, which approximates amortized cost, and are classified as available-for-sale in accordance with ASC 320, Investments – Debt and Equity Securities Inventories Inventories are valued at the lower of cost or net realizable value. 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 initially recorded 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 However, the duration and severity of the COVID-19 pandemic could result in future goodwill impairment charges. While we have concluded that a triggering event did not occur during the quarter ended March 31, 2020, a prolonged pandemic could impact the Company’s results of operations in a manner significant enough to trigger an interim impairment test. 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 Company’s 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, Compensation - Stock Compensation Product Liability Reserves Product liability reserves represent the estimated unpaid amounts under the Company’s 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 Company’s 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 $1,000,000 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. Leases Effective January 1, 2019, the Company adopted the requirements of FASB ASU 2016-02, Leases 1. The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. 2. The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. 3. The lease term is for the major part of the remaining economic life of the underlying asset. 4. The present value of the sum of lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. 5. The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. For any leases that do not meet the criteria identified above for finance leases, the Company treats such leases as operating leases. As of March 31, 2020, each of the Company’s leases are classified as operating leases. Both finance and operating leases are reflected on the balance sheet as lease or “right-of-use” assets and lease liabilities. There are some exceptions, which the Company has elected in its accounting policies. For leases with terms of twelve months or less, or below the Company’s general capitalization policy threshold, the Company has elected an accounting policy to not recognize lease assets and lease liabilities for all asset classes. The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain to be exercised. Certain leases contain non-lease components, such as common area maintenance, which are generally accounted for separately. In general, the Company will assess if non-lease components are fixed and determinable, or variable, when determining if the component should be included in the lease liability. For purposes of calculating the present value of the lease obligations, the Company utilizes the implicit interest rate within the lease agreement when known and/or determinable, and otherwise utilizes its incremental borrowing rate at the time of the lease agreement. As permitted under ASU 2018-11, the Company elected the optional transition method to adopt the new leases standard. Under this new transition method, the Company initially applied the new leases standard at the adoption date of January 1, 2019 and would have recognized a cumulative-effect adjustment, if appropriate, to the opening balance of retained earnings in the period of adoption. No cumulative-effect adjustment was recognized. The impact of the adoption of this new standard resulted in an increase to the Company’s operating lease assets and liabilities on January 1, 2019 of approximately $800,000. The implementation did not have a material impact on our consolidated statements of income and statements of cash flows. Fair Value of Financial and Nonfinancial Instruments The Company measures financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures 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 the Company’s 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 recorded 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 company’s 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. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law making several changes to the Internal Revenue Code. The changes include, but are not limited to: increasing the limitation on the amount of deductible interest expense, allowing companies to carryback certain net operating losses, and increasing the amount of net operating loss carryforwards that corporations can use to offset taxable income. The tax law changes in the Act have not had an effect on the Company’s income tax provision for the quarter ended March 31, 2020. Other Comprehensive Income For the quarters ended March 31, 2020 and 2019, respectively, the components of other comprehensive income consisted solely of foreign currency translation adjustments. Significant Concentration The Company has one significant customer which represented more than 10% of the Company’s Accounts Receivable at March 31, 2020 and December 31, 2019. That same customer represented more than 10% of the Company’s total Net Sales for the first quarter of 2020 and 2019. Geographically, the Company has a significant amount of sales in the United States versus internationally. These concentrations are consistent with those discussed in detail in the Company’s December 31, 2019 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 10 of the condensed consolidated financial statements. Recent Accounting Pronouncements In January 2017, the FASB amended ASC Topic 350, Intangibles – Goodwill and Other In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaced the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Adoption of the standard requires using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. ASU 2019-11 requires entities that did not adopt the amendments in ASU 2016-13 as of November 2019 to adopt ASU 2019-11. This ASU contains the same effective dates and transition requirements as ASU 2016-13. We adopted ASU 2016-13 and ASU 2019-11 effective January 1, 2020. The impact of adoption of these standards on our condensed consolidated financial statements was not material. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. INVENTORIES Inventories, net of reserves of $217,000 and $355,000 at March 31, 2020 and December 31, 2019, respectively, consisted of the following: March 31, December 31, 2020 2019 (dollars in thousands) Finished Goods $ 5,625 $ 5,409 Raw Materials 5,597 5,669 Inventories - Net $ 11,222 $ 11,078 |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | 4. LINE OF CREDIT On December 1, 2017, the Company agreed to a new Amended and Restated Revolving Line of Credit Note and Third Amendment to the Loan Agreement with Santander Bank, N.A. (the “Bank”). The Company established a line of credit facility in the maximum amount of $15,000,000, maturing on December 1, 2022, with funds available for working capital purposes and other cash needs. The loan is unsecured. The loan agreement provides for the payment of any borrowings under the agreement at an interest rate range of either LIBOR plus 0.75% to plus 1.75% (for borrowings with a fixed term of 30, 60, or 90 days), or, Prime Rate up to Prime Rate plus 0.50% (for borrowings with no fixed term other than the December 1, 2022 maturity date), depending upon the Company’s then existing financial ratios. Currently, the Company’s ratio would allow for the most favorable rate under the agreement’s range, which would be a rate of 1.74%. The Company is also required to pay on a quarterly basis an unused facility fee of 10 basis points of the average unused balance of the note. The Company may terminate the line at any time during the five-year term, as long as there are no amounts outstanding. As of March 31, 2020 and December 31, 2019, the Company had no outstanding borrowings on its line of credit, and was in compliance with all debt covenants. Subsequent to March 31, 2020, in an effort to ensure liquidity and secure all available resources during the COVID-19 crisis, the Company borrowed the full amount of its capacity on the line of $15,000,000 at the prime rate of 3.50%. Repayment of the line will depend upon future developments, which are highly uncertain and unpredictable, including new information concerning the severity of the coronavirus and actions to contain or treat its impact, among others, as well as the Company’s own operational needs. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 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. The Company has salary continuation agreements with current and/or past employees. 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. 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 $500,000 at March 31, 2020, of which $488,000 is included in Other Long Term Liabilities, and the remaining current portion of $12,000 is included in Other Liabilities, associated with a retired employee who is now receiving benefit payments. The December 31, 2019 liability of $492,000 had $480,000 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 life insurance policies with respect to current and/or past employees. The cash surrender value of such policies (included in Other Long Term Assets) amounts to $1,362,000 at March 31, 2020 and $1,417,000 at December 31, 2019. In addition to the above, the Company has other contractual employment and or change of control agreements in place with key employees, as previously disclosed and noted in the Exhibit Index to the Company’s December 31, 2019 Form 10-K. There are no current payment obligations related to these arrangements, and any future obligations are currently indeterminable due to the variable nature and timing of possible events required to incur such obligations. As disclosed in detail in Note 7, Leases, the Company has several lease obligations in place that will be paid out over time. Lastly, as provided in Item 7 of the Company’s December 31, 2019 Form 10-K, under the “Tabular Disclosure of Contractual Obligations and Off-Balance Sheet Arrangements”, the Company has numerous purchase obligations in place for the forthcoming year, largely related to the Company’s core material inventory components. Contingencies: In the ordinary and normal conduct of the Company’s business, it is subject to periodic lawsuits, investigations and claims (collectively, the “Claims”). Most of the Claims, including a putative class-action claim, relate to potential lightning damage to our flexible gas piping products, which impact legal and product liability related expenses. The Company does not believe the Claims have legal merit, and therefore has commenced a vigorous defense in response to the Claims. It is possible that the Company may incur increased litigation costs in the future due to a variety of factors, including a higher number of Claims, higher legal costs, and higher insurance deductibles or retentions. In March 2017, a putative class action case was re-filed against the Company and other parties in Missouri state court after the predecessor case was dismissed without prejudice by the federal court. The Company successfully removed the case to federal court and is currently vigorously defending the case. In February 2020, the Company was made aware of a potential legal liability regarding a legal dispute in the United Kingdom, in which the Company was the claimant. After reviewing currently available information and a range of possible scenarios, the potential loss, if any, is estimated to be between $200,000 and $500,000. No amounts have been recorded for the potential liability at this time, as the ultimate outcome could potentially result in the Company being awarded some amount of money if successful, and the potential loss is not deemed probable. The Company has in place commercial general liability insurance policies that cover most Claims, which are subject to deductibles or retentions, ranging primarily from $25,000 to $1,000,000 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 $1,000,000, 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, excluding the Missouri class action case, as of March 31, 2020 is estimated to not exceed approximately $3,500,000, 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 Company’s 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 or anticipated settlements for Claims. The liabilities recorded on the Company’s books at March 31, 2020 and December 31, 2019 were $175,000 and $215,000, respectively, and are included in Other Liabilities. |
Stock Based Plans
Stock Based Plans | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
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 Company’s common stock The Units are granted to participants upon the recommendation of the Company’s 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 Company’s 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 and therefore are stated as liabilities in accordance with Topic 718. 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 participant’s 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 participant’s 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. Topic 718 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 Company’s 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 Company’s 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, 2020. The total Phantom Stock related liability as of March 31, 2020 was $1,766,000 of which $949,000 is included in Other Liabilities, as it is expected to be paid within the next twelve months, and the balance of $817,000 is included in Other Long Term Liabilities. At December 31, 2019, the total Phantom Stock liability was $3,201,000, with $1,508,000 in Other Liabilities, and $1,693,000 included in Other Long Term Liabilities. Related to the Phantom Stock Plan, in accordance with Topic 718, the Company recorded compensation income of approximately $467,000 for the three months ended March 31, 2020, and compensation expense of $746,000 for the first quarter of 2019. Compensation income or expense for a given period largely depends upon fluctuations in the Company’s stock price. The following table summarizes information about the Company’s nonvested phantom stock Units at March 31, 2020: Units Weighted Average Grant Date Fair Value Number of Phantom Stock Unit Awards: Nonvested at December 31, 2019 15,493 $ 59.65 Granted 4,875 $ 74.52 Vested (6,750 ) $ 52.38 Forfeited — — Canceled — — Nonvested at March 31, 2020 13,618 $ 68.58 Phantom Stock Unit Awards Expected to Vest 13,618 $ 68.58 The total unrecognized compensation costs calculated at March 31, 2020 are $995,000 which will be recognized through February of 2023. The Company will recognize the related expense over the weighted average period of 1.7 years. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 7. LEASES In the United States, the Company owns its two main operating facilities located in Exton, PA, which provide manufacturing, warehousing and distribution space. In addition to the owned facilities, the Company also has operations in other locations that are leased, as well as other leased assets. With regards to leased facilities within the United States, the Company leases its corporate office space in Middletown, CT, with the lease term expiring in 2022. Additionally, the Company leases a warehousing and distribution center in Houston, Texas, which currently provides manufacturing, stocking and sales operations, with a 5-year lease term running through October 2024. In the United Kingdom, the Company leases a facility in Banbury, England, which serves sales, warehousing and operational functions. The lease in Banbury has a 15-year term ending in March 2021. In addition to property rentals, the Company also has lease agreements in place for various fleet vehicles and equipment with various lease terms. In the March 31, 2020 condensed consolidated balance sheet, the Company has recorded right-of-use assets of $664,000, and a lease liability of $678,000, of which $355,000 is reported as a current liability. The respective weighted average remaining lease term and discount rate are approximately 2.58 years and 3.43%. Future minimum lease payments under non-cancellable leases as of March 31, 2020, are as follows: Twelve Months Ending March 31, Operating Leases (in thousands) 2021 $ 355 2022 163 2023 89 2024 44 2025 27 Thereafter — Total Minimum Lease Payments $ 678 A similar description of the lease obligations for the previous year is disclosed in the Company’s December 31, 2019 Form 10-K. Lease expense for the operating leases was approximately $75,000 for the first quarters ended March 31, 2020 and 2019. Lease expense is allocated to each portion of the business generally based upon use, with the majority absorbed by manufacturing (cost of goods sold), and the remainder apportioned to selling, administrative and engineering. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | 8. SHAREHOLDERS’ EQUITY As of March 31, 2020 and December 31, 2019, the Company had authorized 20,000,000 common stock shares with par value of $0.01 per share. For both periods, the total number of outstanding shares was 10,094,322, shares held in Treasury was 59,311, and total shares issued was 10,153,633. During 2020 and 2019, upon approval of the Board of Directors (the “Board”) the Company has declared and paid regular quarterly dividends, as well as special dividends, as set forth in the following table: Dividend Declared Dividend Paid Date Price Per Share Date Amount March 31, 2020 $ 0.28 April 17, 2020* $ 2,826,000 December 16, 2019 (S) $ 3.50 December 30, 2019* $ 35,330,000 December 14, 2019 $ 0.28 January 3, 2020* $ 2,826,000 September 6, 2019 $ 0.28 October 2, 2019* $ 2,826,000 June 13, 2019 $ 0.28 July 2, 2019* $ 2,826,000 April 9, 2019 $ 0.24 April 29, 2019** $ 2,422,000 December 13, 2018 $ 0.24 January 3, 2019** $ 2,422,000 The number of shares outstanding on the dividend payment date was *10,094,322 and **10,091,822. (S) In addition to the above dividend amounts, there were dividends approved by the Company’s foreign subsidiary during July and December of 2019, with the cash distribution to the noncontrolling interest of $137,000 and $65,000, respectively, paid during those respective months. It should be noted that from time to time, the Board may elect to pay special dividends, in addition to or in lieu of the regular quarterly dividends, depending upon the financial condition of the Company. Special dividends are indicated in the above schedule as (S) The Board approved and granted a total of 2,500 restricted stock unit awards (the “Awards”) to be allocated to the existing non-employee directors of the Company. The Awards were approved by the shareholders of the Company at the annual meeting on June 11, 2019, and distributed on June 20, 2019. A Form S-8 registration statement, and the restricted stock unit award agreements, were filed with the SEC on December 13, 2018 (2,000 units) and May 24, 2019 (500 units). The related director compensation cost of approximately $217,000 was recognized during June 2019. On April 4, 2014, the Board 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 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, which were held as treasury shares. The Company has not made any stock repurchases since 2014; however, as stated above, there were 2,500 shares distributed from treasury to non-employee directors during June 2019. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. RELATED PARTY TRANSACTIONS From time to time the Company may have related party transactions (“RPTs”). In short, RPTs represent any transaction between the Company and any Company employee, director or officer, or any related entity, or relative, etc. The Company performs a review of transactions each year to determine if any RPTs exist, and if so, determines if the related parties act independently of each other in a fair transaction. Through this investigation the Company noted a limited number of RPTs which are disclosed hereto. Legal services were performed by a firm which formerly employed one member of the board. On occasion the Company shares a small amount of services with its former parent Mestek, Inc., mostly related to board meeting expenses. The Company is aware of transactions between a few service providers which employ individuals indirectly associated to Omega Flex employees. In all cases, these transactions have been determined to be independent transactions with no indication that they are influenced by the related relationships. During the first quarter of 2020, the Company had both provided and subsequently collected $5,000 of note agreement assets with related parties. Other than as disclosed above, the Company is currently not aware of any RPTs between the Company and any of its current directors or officers outside the scope of their normal business functions or expected contractual duties. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. SUBSEQUENT EVENTS The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States. On April 7, 2020, the Company received a loan from the U.S. Small Business Administration (“SBA”) to fund the Company’s request for a loan under the SBA’s Paycheck Protection Program (“PPP” and “PPP Loan”) created as part of the recently enacted CARES Act administered by the SBA. In connection with the PPP Loan, the Company entered into the promissory note attached as Exhibit 10.2 to this Form 10-Q. Pursuant to the terms of the PPP Loan, the Company received total proceeds of $2,453,000 from the Bank. After the issuance of the PPP Loan, the U.S. Treasury Department issued new guidance on the PPP program, and advised that publicly traded companies that had access to other sources of financing may not be appropriate candidates for the PPP Loans, and provided a grace period until May 7, 2020 for such companies to repay the previously issued PPP Loans. Accordingly, in light of this new guidance, the Company intends to repay the PPP Loan by May 7, 2020. The Company evaluated all events or transactions that occurred through the date of this filing. No events other than as discussed above came to the Company’s attention that would impact the condensed consolidated financial statements for the quarter ended March 31, 2020. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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, investment valuations, 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 | Revenue Recognition According to Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) The principle of Topic 606 is achieved through applying the following five-step approach: ● Identification of the contract, or contracts, with a customer — ● Identification of the performance obligations in the contract — ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, the Company satisfies a performance obligation ● The Company has a present right to payment ● The customer has legal title to the goods ● The Company has transferred physical possession of the goods ● The customer has the significant risks and rewards of ownership of the goods ● The customer has accepted the goods It is important to note that the indicators are not a set of conditions that must be met before the Company can conclude that control of the goods has transferred to the customer. The indicators are a list of factors that are often present if a customer has control of the goods. The Company has typical, unmodified FOB shipping point terms. As the seller, the Company can determine that the shipped goods meet the agreed-upon specifications in the contract or customer purchase order (e.g. items, quantities, and prices) with the buyer, so customer acceptance would be deemed a formality, as noted in ASC 606-10-55-86. As a result, the Company has a legal right to payment upon shipment of the goods. Based upon the above, the Company has concluded that transfer of control substantively transfers to the customer upon shipment. Other considerations of Topic 606 include the following: ● Contract Costs - ● Warranties ● Returned Goods ● Volume Rebates (Promotional Incentives) ● The amount of consideration is highly susceptible to factors outside the Company’s influence. ● The uncertainty about the amount of consideration is not expected to be resolved for a long period of time. ● The Company’s experience with similar types of contracts is limited. ● The contract has a large number and broad range of possible consideration amounts. If it was concluded that the above factors were in place for the Company, it would support the probability of a significant reversal of revenue. However, as none of the four factors apply to the Company, promotional incentives are recorded as a reduction of revenue based upon estimates of the eligible products expected to be sold. Regarding disaggregated revenue disclosures, as previously noted, the Company’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal hose. Most of the Company’s transactions are very similar in nature, contract, terms, timing, and transfer of control of goods. As indicated within Note 2, under the caption “Significant Concentration”, the majority of the Company’s sales were geographically contained within North America, with the remainder scattered internationally. All performance assessments and resource allocations are generally based upon the review of the results of the Company as a whole. |
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. |
Accounts Receivable and Provision for Credit Losses | Accounts Receivable and Provision for Credit Losses All accounts receivables are stated at amortized cost, net of allowances for credit losses, and adjusted for any write-offs. The Company maintains allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in its receivable portfolio. For accounts receivables, the Company uses historical loss experience rates and applies them to a related aging analysis while also considering customer and/or economic risk where appropriate. Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowances consider numerous quantitative and qualitative factors that include receivable type, historical loss experience, delinquency trends, collection experience, current economic conditions, estimates for supportable forecasts, when appropriate, and credit risk characteristics. The reserve for credit losses, which include future credits, discounts, and doubtful accounts, was $1,103,000 and $1,433,000 as of March 31, 2020 and December 31, 2019, respectively. |
Investments | Investments The Company invests excess funds in liquid interest earning instruments including U.S. Treasury bills and bank time deposits, with maturities typically of one year or less. These investments are stated at fair value, which approximates amortized cost, and are classified as available-for-sale in accordance with ASC 320, Investments – Debt and Equity Securities |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. 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 Property and equipment are initially recorded 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 | Goodwill In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 350, Intangibles – Goodwill and Other However, the duration and severity of the COVID-19 pandemic could result in future goodwill impairment charges. While we have concluded that a triggering event did not occur during the quarter ended March 31, 2020, a prolonged pandemic could impact the Company’s results of operations in a manner significant enough to trigger an interim impairment test. |
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 Company’s 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, Compensation - Stock Compensation |
Product Liability Reserves | Product Liability Reserves Product liability reserves represent the estimated unpaid amounts under the Company’s 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 Company’s 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 $1,000,000 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. |
Leases | Leases Effective January 1, 2019, the Company adopted the requirements of FASB ASU 2016-02, Leases 1. The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. 2. The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. 3. The lease term is for the major part of the remaining economic life of the underlying asset. 4. The present value of the sum of lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. 5. The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. For any leases that do not meet the criteria identified above for finance leases, the Company treats such leases as operating leases. As of March 31, 2020, each of the Company’s leases are classified as operating leases. Both finance and operating leases are reflected on the balance sheet as lease or “right-of-use” assets and lease liabilities. There are some exceptions, which the Company has elected in its accounting policies. For leases with terms of twelve months or less, or below the Company’s general capitalization policy threshold, the Company has elected an accounting policy to not recognize lease assets and lease liabilities for all asset classes. The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain to be exercised. Certain leases contain non-lease components, such as common area maintenance, which are generally accounted for separately. In general, the Company will assess if non-lease components are fixed and determinable, or variable, when determining if the component should be included in the lease liability. For purposes of calculating the present value of the lease obligations, the Company utilizes the implicit interest rate within the lease agreement when known and/or determinable, and otherwise utilizes its incremental borrowing rate at the time of the lease agreement. As permitted under ASU 2018-11, the Company elected the optional transition method to adopt the new leases standard. Under this new transition method, the Company initially applied the new leases standard at the adoption date of January 1, 2019 and would have recognized a cumulative-effect adjustment, if appropriate, to the opening balance of retained earnings in the period of adoption. No cumulative-effect adjustment was recognized. The impact of the adoption of this new standard resulted in an increase to the Company’s operating lease assets and liabilities on January 1, 2019 of approximately $800,000. The implementation did not have a material impact on our consolidated statements of income and statements of cash flows. |
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 Intangibles - Goodwill and Other |
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. |
Currency Translation | Currency Translation Assets and liabilities denominated in foreign currencies, most of which relate to the Company’s 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 | Income Taxes The Company accounts for tax liabilities in accordance with the FASB ASC Topic 740, Income Taxes. Under this method the Company recorded 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 company’s 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. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law making several changes to the Internal Revenue Code. The changes include, but are not limited to: increasing the limitation on the amount of deductible interest expense, allowing companies to carryback certain net operating losses, and increasing the amount of net operating loss carryforwards that corporations can use to offset taxable income. The tax law changes in the Act have not had an effect on the Company’s income tax provision for the quarter ended March 31, 2020. |
Other Comprehensive Income | Other Comprehensive Income For the quarters ended March 31, 2020 and 2019, respectively, the components of other comprehensive income consisted solely of foreign currency translation adjustments. |
Significant Concentration | Significant Concentration The Company has one significant customer which represented more than 10% of the Company’s Accounts Receivable at March 31, 2020 and December 31, 2019. That same customer represented more than 10% of the Company’s total Net Sales for the first quarter of 2020 and 2019. Geographically, the Company has a significant amount of sales in the United States versus internationally. These concentrations are consistent with those discussed in detail in the Company’s December 31, 2019 Form 10-K. |
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 10 of the condensed consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB amended ASC Topic 350, Intangibles – Goodwill and Other In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaced the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Adoption of the standard requires using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. ASU 2019-11 requires entities that did not adopt the amendments in ASU 2016-13 as of November 2019 to adopt ASU 2019-11. This ASU contains the same effective dates and transition requirements as ASU 2016-13. We adopted ASU 2016-13 and ASU 2019-11 effective January 1, 2020. The impact of adoption of these standards on our condensed consolidated financial statements was not material. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net of Reserves | Inventories, net of reserves of $217,000 and $355,000 at March 31, 2020 and December 31, 2019, respectively, consisted of the following: March 31, December 31, 2020 2019 (dollars in thousands) Finished Goods $ 5,625 $ 5,409 Raw Materials 5,597 5,669 Inventories - Net $ 11,222 $ 11,078 |
Stock Based Plans (Tables)
Stock Based Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Nonvested Phantom Stock Units | The following table summarizes information about the Company’s nonvested phantom stock Units at March 31, 2020: Units Weighted Average Grant Date Fair Value Number of Phantom Stock Unit Awards: Nonvested at December 31, 2019 15,493 $ 59.65 Granted 4,875 $ 74.52 Vested (6,750 ) $ 52.38 Forfeited — — Canceled — — Nonvested at March 31, 2020 13,618 $ 68.58 Phantom Stock Unit Awards Expected to Vest 13,618 $ 68.58 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancellable leases as of March 31, 2020, are as follows: Twelve Months Ending March 31, Operating Leases (in thousands) 2021 $ 355 2022 163 2023 89 2024 44 2025 27 Thereafter — Total Minimum Lease Payments $ 678 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Regular Quarter Dividend Payments | During 2020 and 2019, upon approval of the Board of Directors (the “Board”) the Company has declared and paid regular quarterly dividends, as well as special dividends, as set forth in the following table: Dividend Declared Dividend Paid Date Price Per Share Date Amount March 31, 2020 $ 0.28 April 17, 2020* $ 2,826,000 December 16, 2019 (S) $ 3.50 December 30, 2019* $ 35,330,000 December 14, 2019 $ 0.28 January 3, 2020* $ 2,826,000 September 6, 2019 $ 0.28 October 2, 2019* $ 2,826,000 June 13, 2019 $ 0.28 July 2, 2019* $ 2,826,000 April 9, 2019 $ 0.24 April 29, 2019** $ 2,422,000 December 13, 2018 $ 0.24 January 3, 2019** $ 2,422,000 The number of shares outstanding on the dividend payment date was *10,094,322 and **10,091,822. |
Significant Accounting Polici_3
Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jan. 02, 2019 | |
Allowance for doubtful accounts receivable | $ 1,103 | $ 1,433 | ||
Investments | ||||
Operating lease assets | 664 | $ 771 | $ 800 | |
Operating lease liabilities | $ 678 | $ 800 | ||
One Significant Customer [Member] | Accounts Receivable [Member] | ||||
Concentration risk, percent | 10.00% | 10.00% | ||
One Significant Customer [Member] | Sales Revenue Net [Member] | ||||
Concentration risk, percent | 10.00% | 10.00% | ||
Minimum [Member] | ||||
Defense costs per claim | $ 25 | |||
Maximum [Member] | ||||
Defense costs per claim | $ 1,000 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 217 | $ 355 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories, Net of Reserves (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 5,625 | $ 5,409 |
Raw Materials | 5,597 | 5,669 |
Inventories - Net | $ 11,222 | $ 11,078 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) $ in Thousands | May 04, 2020 | Dec. 01, 2017 | Mar. 31, 2020 | Dec. 31, 2019 |
Line of credit interest rate percentage | 1.74% | |||
Line of credit facility | ||||
Subsequent Event [Member] | ||||
Line of credit facility | $ 15,000 | |||
Prime Rate Plus [Member] | Subsequent Event [Member] | ||||
Line of credit interest rate percentage | 3.50% | |||
Loan Agreement [Member] | ||||
Line of credit facility, description | The Company agreed to a new Amended and Restated Revolving Line of Credit Note and Third Amendment to the Loan Agreement with Santander Bank, N.A. (the "Bank"). | |||
Line of credit facility, maximum borrowing capacity | $ 15,000 | |||
Line of credit facility, expiration date | Dec. 1, 2022 | |||
Line of credit facility, interest rate description | The loan agreement provides for the payment of any borrowings under the agreement at an interest rate range of either LIBOR plus 0.75% to plus 1.75% (for borrowings with a fixed term of 30, 60, or 90 days), or, Prime Rate up to Prime Rate plus 0.50% (for borrowings with no fixed term other than the December 1, 2022 maturity date), depending upon the Company's then existing financial ratios. | |||
Line of credit facility, commitment fee description | The Company is also required to pay on a quarterly basis an unused facility fee of 10 basis points of the average unused balance of the note. The Company may terminate the line at any time during the five-year term, as long as there are no amounts outstanding. | |||
Line of credit period | 5 years | |||
Loan Agreement [Member] | LIBOR plus [Member] | ||||
Line of credit interest rate percentage | 0.75% | |||
Loan Agreement [Member] | LIBOR plus One [Member] | ||||
Line of credit interest rate percentage | 1.75% | |||
Loan Agreement [Member] | Prime Rate Plus [Member] | ||||
Line of credit interest rate percentage | 0.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | |
Employee benefit payment term description | 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. | ||
Other compensation liabilities | $ 500 | $ 492 | |
Other compensation liabilities, noncurrent | 488 | 480 | |
Other compensation liabilities, current | 12 | 12 | |
Cash surrender value of life insurance | 1,362 | 1,417 | |
Maximum aggregate claim amount | 3,500 | ||
Liabilities recorded | 175 | $ 215 | |
Minimum [Member] | |||
Payment benefit to employee's | 1 | ||
Loss contingencies, range of possible losses | $ 200 | ||
Deductibles per claim | 25 | ||
Minimum [Member] | Insurance Claims [Member] | |||
Potential liability per claim | 0 | ||
Maximum [Member] | |||
Payment benefit to employee's | 3 | ||
Loss contingencies, range of possible losses | $ 500 | ||
Deductibles per claim | 1,000 | ||
Maximum [Member] | Insurance Claims [Member] | |||
Potential liability per claim | $ 1,000 |
Stock Based Plans (Details Narr
Stock Based Plans (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2020 | Feb. 29, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Share based compensation, description | through February of 2023 | ||||
Unvested units outstanding | 13,618 | 15,493 | |||
Share based compensation weighted average grant date fair value | $ 74.52 | ||||
Share based compensation paid in period | $ 968 | ||||
Share based compensation vested shares | 10,460 | ||||
Forfeiture rate of plan | 0.00% | ||||
Share based compensation liability | $ 1,766 | $ 3,201 | |||
Share based compensation liability, current | 949 | 1,508 | |||
Share based compensation liability, non-current | 817 | $ 1,693 | |||
Compensation income | 467 | $ (746) | |||
Compensation expense | $ 746 | ||||
Unrecognized compensation costs | $ 995 | ||||
Compensation expense, weighted average recognize period | 1 year 8 months 12 days | ||||
Phantom Stock Plan [Member] | |||||
Share based compensation, description | On April 1, 2006, the Company adopted the Omega Flex, Inc. 2006 Phantom Stock Plan (the "Plan"). The Plan authorizes the grant of up to one million units of phantom stock to employees, officers or directors of the Company. The phantom stock units ("Units") each represent a contractual right to payment of compensation in the future based on the market value of the Company's common stock. | ||||
Share based compensation number of shares authorized | 1,000,000 | ||||
Share based compensation vesting rights | The Units are granted to participants upon the recommendation of the Company's 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 Company's 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 and therefore are stated as liabilities in accordance with Topic 718. | ||||
Full Value Units [Member] | |||||
Share based compensation grants in period | 4,875 | ||||
Share based compensation weighted average grant date fair value | $ 74.52 |
Stock Based Plans - Summary of
Stock Based Plans - Summary of Nonvested Phantom Stock Units (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Nonvested Units, Beginning balance | shares | 15,493 |
Nonvested Units, Granted | shares | 4,875 |
Nonvested Units, Vested | shares | (6,750) |
Nonvested Units, Forfeited | shares | |
Nonvested Units, Canceled | shares | |
Nonvested Units, Ending Balance | shares | 13,618 |
Phantom Stock Unit Awards Expected to Vest, Units | shares | 13,618 |
Nonvested Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | $ 59.65 |
Nonvested Weighted Average Grant Date Fair Value, Granted | $ / shares | 74.52 |
Nonvested Weighted Average Grant Date Fair Value, Vested | $ / shares | 52.38 |
Nonvested Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Nonvested Weighted Average Grant Date Fair Value, Canceled | $ / shares | |
Nonvested Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | 68.58 |
Phantom Stock Unit Awards Expected to Vest, Weighted Average Grant Date Fair Value | $ / shares | $ 68.58 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jan. 02, 2019 | |
Right-of-use assets | $ 664 | $ 771 | $ 800 | |
Lease liability | 678 | $ 800 | ||
Lease liability, current | $ 355 | $ 369 | ||
Weighted average remaining lease term | 2 years 6 months 29 days | |||
Discount rate | 3.43% | |||
Operating lease expense | $ 75 | $ 75 | ||
Middletown [Member] | ||||
Operating leases term, description | Lease term expiring in 2022 | |||
Houston [Member] | ||||
Operating leases term, description | 5-year lease term running through October 2024 | |||
Lease term | 5 years | |||
Banbury [Member] | ||||
Operating leases term, description | 15-year term ending in March 2021. | |||
Lease term | 15 years |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 355 |
2022 | 163 |
2023 | 89 |
2024 | 44 |
2025 | 27 |
Thereafter | |
Total Minimum Lease Payments | $ 678 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | May 24, 2019 | Dec. 13, 2018 | Dec. 31, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2017 | Mar. 31, 2020 | Jan. 03, 2020 | Dec. 30, 2019 | Oct. 02, 2019 | Jul. 02, 2019 | Apr. 29, 2019 | Jan. 03, 2019 | Apr. 04, 2014 | Dec. 31, 2007 |
Common stock, shares authorized | 20,000,000 | 20,000,000 | |||||||||||||
Common stock, par value | $ 0.01 | $ 0.01 | |||||||||||||
Common stock, shares outstanding | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,091,822 | 10,091,822 | |||||||
Treasury stock, common, shares | 59,311 | 59,311 | |||||||||||||
Common stock, shares issued | 10,153,633 | 10,153,633 | |||||||||||||
Stock repurchase program, authorized amount | $ 1,000 | $ 5,000 | |||||||||||||
Non-Employee Directors [Member] | |||||||||||||||
Share based payment award, distributed | 2,500 | ||||||||||||||
Since Inception [Member] | |||||||||||||||
Stock repurchased during period, shares | 61,811 | ||||||||||||||
Stock repurchased during period, value | $ 932 | ||||||||||||||
Stock repurchased during period, value per share | $ 15 | ||||||||||||||
Restricted Stock Unit Awards [Member] | |||||||||||||||
Share based payment award, granted | 500 | 2,000 | |||||||||||||
Compensation cost | $ 217 | ||||||||||||||
Foreign Subsidiary's [Member] | |||||||||||||||
Payments of noncontrolling interest | $ 65 | $ 137 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Regular Quarter Dividend Payments (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2020 | Dec. 16, 2019 | Dec. 14, 2019 | Sep. 06, 2019 | Jun. 13, 2019 | Apr. 09, 2019 | Dec. 13, 2018 | |||||||
Equity [Abstract] | ||||||||||||||
Dividend Declared, Date | Mar. 31, 2020 | Dec. 16, 2019 | [1] | Dec. 14, 2019 | Sep. 6, 2019 | Jun. 13, 2019 | Apr. 9, 2019 | Dec. 13, 2018 | ||||||
Dividend Declared, Price Per Share | $ 0.28 | $ 3.50 | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.24 | $ 0.24 | |||||||
Dividend Paid on or Before Date | Apr. 17, 2020 | [2] | Dec. 30, 2019 | [2] | Jan. 3, 2020 | [2] | Oct. 2, 2019 | [2] | Jul. 2, 2019 | [2] | Apr. 29, 2019 | [3] | Jan. 3, 2019 | [3] |
Dividend Paid on or Before Date, Amount | $ 2,826 | $ 35,330 | $ 2,826 | $ 2,826 | $ 2,826 | $ 2,422 | $ 2,422 | |||||||
[1] | indicates special dividend | |||||||||||||
[2] | The number of shares outstanding on the dividend payment date was 10,094,322. | |||||||||||||
[3] | The number of shares outstanding on the dividend payment date was 10,091,822. |
Shareholders' Equity - Schedu_2
Shareholders' Equity - Schedule of Regular Quarter Dividend Payments (Details) (Parenthetical) - shares | Apr. 17, 2020 | Mar. 31, 2020 | Jan. 03, 2020 | Dec. 31, 2019 | Dec. 30, 2019 | Oct. 02, 2019 | Jul. 02, 2019 | Apr. 29, 2019 | Jan. 03, 2019 |
Common stock, shares outstanding | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,094,322 | 10,091,822 | 10,091,822 | |
Subsequent Event [Member] | |||||||||
Common stock, shares outstanding | 10,094,322 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Related Party Transactions [Abstract] | |
Amount collected from related party | $ 5 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - U.S. Small Business Administration [Member] - PPP Loan [Member] $ in Thousands | Apr. 07, 2020USD ($) |
Proceeds from loan | $ 2,453 |
Repayment of loan, description | Accordingly, in light of this new guidance, the Company intends to repay the PPP Loan by May 7, 2020. |