Pioneer Power Solutions (PPSI) 10-Q 13 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 13, 2017
Document And Entity Information
Entity Registrant Name	PIONEER POWER SOLUTIONS, INC.
Entity Central Index Key	1,449,792
Document Type	10-Q
Trading Symbol	PPSI
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,726,045
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,017

Consolidated Statements of (Los

Consolidated Statements of (Loss) Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Revenues	$ 29,794	$ 29,389	$ 87,953	$ 85,889
Cost of goods sold
Cost of goods sold	23,475	22,872	69,547	67,248
Restructuring and integration	873		873
Total cost of goods sold	24,348	22,872	70,420	67,248
Gross profit	5,446	6,517	17,533	18,641
Operating expenses
Selling, general and administrative	5,041	5,338	14,455	14,894
Restructuring and integration		19	160	199
Foreign exchange gain	(194)	(52)	(465)	(142)
Total operating expenses	4,847	5,305	14,150	14,951
Operating Income	599	1,212	3,383	3,690
Interest expense	588	556	1,662	1,151
Other expense	245	264	647	554
(Loss) / income before taxes	(234)	392	1,074	1,985
Income tax expense	530	70	396	900
Net (loss) / income	$ (764)	$ 322	$ 678	$ 1,085
Net (loss) / income per common share:
Basic (in dollars per share)	$ (0.09)	$ 0.04	$ 0.08	$ 0.12
Diluted (in dollars per share)	$ (0.09)	$ 0.04	$ 0.08	$ 0.12
Weighted average common shares outstanding:
Basic (in shares)	8,725	8,700	8,713	8,700
Diluted (in shares)	8,725	8,708	8,727	8,708

Consolidated Statements of Comp

Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Net (loss) / income	$ (764)	$ 322	$ 678	$ 1,085
Other comprehensive (loss) / income
Foreign currency translation adjustments		(147)	68	445
Amortization of net prior service costs and net actuarial gains / (losses), net of tax	(42)	32	(15)	(109)
Other comprehensive (loss) / income	(42)	(115)	53	336
Comprehensive (loss) / income	$ (806)	$ 207	$ 731	$ 1,421

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 950	$ 246
Accounts receivable, net	19,255	17,508
Inventories, net	28,324	26,147
Income taxes receivable	546	72
Prepaid expenses and other current assets	2,765	2,215
Total current assets	51,840	46,188
Property, plant and equipment, net	7,025	6,591
Deferred income taxes	5,913	5,659
Other assets	216	830
Intangible assets, net	6,783	8,168
Goodwill	9,972	9,972
Total assets	81,749	77,408
Current liabilities
Bank overdrafts	1,386	1,200
Revolving credit facilities	20,197	17,689
Short term borrowings	5,339	3,973
Accounts payable and accrued liabilities	18,205	18,139
Current maturities of long-term debt	4,926	1,379
Income taxes payable	1,619	1,360
Total current liabilities	51,672	43,740
Long-term debt, net of current maturities		4,005
Pension deficit	173	172
Other long-term liabilities	582	892
Noncurrent deferred income taxes	1,954	2,400
Total liabilities	54,381	51,209
Stockholders' equity
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued
Common stock, $0.001 par value, 30,000,000 shares authorized; 8,726,045 shares issued and outstanding on September 30, 2017 and 8,699,712 shares issued and outstanding on December 31, 2016	9	9
Additional paid-in capital	23,653	23,215
Accumulated other comprehensive loss	(5,810)	(5,863)
Retained earnings	9,516	8,838
Total stockholders' equity	27,368	26,199
Total liabilities and stockholders' equity	$ 81,749	$ 77,408

Consolidated Balance Sheets (U5

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	30,000,000	30,000,000
Common stock, issued	8,726,045	8,699,712
Common stock, outstanding	8,726,045	8,699,712

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities
Net income	$ 678	$ 1,085
Depreciation	956	1,006
Amortization of intangible assets	1,390	1,309
Amortization of debt issuance cost	185	153
Deferred income taxes	(689)	206
Change in receivable reserves	53	250
Change in inventory reserves	38	(435)
Accrued pension	(24)	(68)
Stock-based compensation	319	34
(Gain) / loss on disposition of fixed assets	(5)	77
Foreign currency remeasurement (gain) / loss	(40)	2
Changes in current operating assets and liabilities:
Accounts receivable	(1,434)	(4,188)
Inventories	(1,678)	(8,455)
Prepaid expenses and other assets	76	(378)
Income taxes	(289)	890
Accounts payable and accrued liabilities	(9)	(348)
Net cash used in operating activities	(473)	(8,860)
Investing activities
Additions to property, plant and equipment	(1,245)	(476)
Proceeds from sale of fixed assets	20	7
Net cash used in investing activities	(1,225)	(469)
Financing activities
Increase / (decrease) in bank overdrafts	162	(922)
Increase / (decrease) of short term borrowings	1,365	4,919
Borrowings under debt agreement	31,919	30,413
Repayment of debt	(30,465)	(24,564)
Payment of debt issuance costs	(157)	(226)
Proceeds from the exercise of options for common stock	120
Net cash provided by financing activities	2,944	9,620
Increase in cash and cash equivalents	1,246	291
Effect of foreign exchange on cash and cash equivalents	(542)	(102)
Cash and cash equivalents
Beginning of period	246	648
End of period	$ 950	$ 837

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION Overview Pioneer Power Solutions, Inc. and its wholly-owned subsidiaries (referred to herein as the “Company,” “Pioneer,” “we,” “our” and “us”) manufacture, sell and service a broad range of specialty electrical transmission, distribution and on-site power generation equipment for applications in the utility, industrial, commercial and backup power markets. The Company is headquartered in Fort Lee, New Jersey and operates from thirteen additional locations in the U.S., Canada and Mexico for manufacturing, centralized distribution, engineering, sales and administration. We have two reportable segments as defined in our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2017: Transmission and Distribution Solutions (“T&D Solutions”) and Critical Power Solutions (“Critical Power”). Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared pursuant to the rules of the SEC and reflect the accounts of the Company as of September 30, 2017. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), have been condensed or omitted pursuant to those rules and regulations. We believe that the disclosures made are adequate to make the information presented not misleading to the reader. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim consolidated financial statements have been included. The results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP for a year-end balance sheet. All dollar amounts (except share and per share data) presented in the notes to our unaudited consolidated financial statements are stated in thousands of dollars, unless otherwise noted. Amounts may not foot due to rounding. These unaudited consolidated financial statements include the accounts of Pioneer and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. As further described in the two paragraphs below, certain prior year amounts have been reclassified to conform to the current year presentation. As the Company continues to implement the remediation plans discussed under the heading “Part I – Item 4. Controls and Procedures” of this Quarterly Report on Form 10-Q, the Company has determined that there were inconsistencies in classification of expenses between its business units in the reporting periods prior to December 31, 2016. As a result, the company reclassified certain expenses from operating expenses to cost of goods sold for the year ended December 31, 2016, as previously disclosed in the Annual Report on Form 10-K filed with the SEC on March 29, 2017, and for the three and nine months ended September 30, 2016, resulting in a decrease to gross profit of $18, or negative 0.06% as a percentage of sales for the three months ended September 30, 2016 and, resulting in a decrease to gross profit of $262, or negative 0.30% as a percentage of sales for the nine months ended September 30, 2016, respectively. These unaudited consolidated financial statements should be read in conjunction with the risk factors and the audited consolidated financial statements and notes thereto of the Company and its subsidiaries included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. There have been no significant changes in the Company’s accounting policies during the third quarter of 2017. Recent Accounting Pronouncements Revenue from Contracts with Customers In July 2015, the FASB made a decision to defer the effective date of the new standard for one year and permit early adoption as of the original effective date. The Company is currently reviewing its various revenue streams from its two reportable segments: (i) T&D Solutions and (ii) Critical Power. Concurrently, through the use of various data gathering methods, we are categorizing the types of sales for our business units for the purpose of comparing how we currently recognize revenue and quantifying the impact, if any, that this new standard will have on our consolidated financial statements. The Company plans to elect to apply the modified retrospective approach upon adoption. Additionally, the new guidance requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including revenue recognition policies to identify performance obligations, assets recognized from costs incurred to obtain and fulfill a contract, and significant judgments in measurement and recognition. The Company is determining the impact of adopting Topic 606 on its revenue recognition policies, procedures and control framework and the resulting impact on its consolidated financial position, results of operation and cash flows. The Company is in the process of reviewing revenue sources and evaluating the customer population to determine the appropriate distribution of customer accounts into populations with similar contract terms and performance obligations. We expect to complete this process before the filing of our Form 10-K for the year ended December 31, 2017. Simplifying the Measurement of Inventory. Leases. Leases (Topic 842) Share-Based Compensation The Company adopted ASU No. 2016-09 in 2017. The adoption of the new guidance did not materially affect the Company’s financial position, results of operations or cash flows. Statement of Cash Flows. Statement of Cash Flows : Classification of Certain Cash Receipts and Cash Payments. Simplifying the Test for Goodwill Impairment.

OTHER EXPENSE

OTHER EXPENSE	9 Months Ended
	Sep. 30, 2017
Other Income and Expenses [Abstract]
OTHER EXPENSE	3. OTHER EXPENSE Other expense in the consolidated statements of income for the three and nine months ended September 30, 2017 and 2016, respectively, are as follows: Three Months Ended Nine Months Ending September 30, September 30, 2017 2016 2017 2016 Payroll tax interest and penalties accrued $ 40 $ 68 $ 28 $ 23 Other non-operating expenses 205 196 619 531 Other expense $ 245 $ 264 $ 647 $ 554 The Company continues to record interest on past due and unpaid payroll tax obligations. During the nine months ended September 30, 2017 and 2016, the Company received waivers of certain interest and penalties on these obligations totaling $0.1 million and $0.4 million, respectively.

INVENTORIES

INVENTORIES	9 Months Ended
	Sep. 30, 2017
Inventory Disclosure [Abstract]
INVENTORIES	4. INVENTORIES The components of inventories are summarized below: September 30, 2017 December 31, Raw materials $ 10,116 $ 10,175 Work in process 7,453 6,535 Finished goods 11,152 9,826 Provision for excess and obsolete inventory (397 ) (389 ) Total inventories $ 28,324 $ 26,147 Included in raw materials and finished goods at September 30, 2017 and December 31, 2016 are goods in transit of approximately $3.1 million. At September 30, 2017 and December 31, 2016, raw materials not pledged to our secured creditor were used as collateral to secure short term borrowings under a product financing agreement amounting to $5.3 million and $4.0 million, respectively.

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	9 Months Ended
	Sep. 30, 2017
Property, Plant and Equipment [Abstract]
PROPERTY, PLANT AND EQUIPMENT	5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are summarized below: September 2017 (Unaudited) December 31, 2016 Land $ 50 $ 46 Buildings 2,467 2,293 Machinery and equipment 10,656 9,421 Furniture and fixtures 476 466 Computer hardware and software 1,364 1,289 Leasehold improvements 715 534 Construction in progress 18 18 15,746 14,067 Less: Accumulated depreciation (8,721 ) (7,476 ) Total property, plant and equipment, net $ 7,025 $ 6,591 Depreciation expense was $1.0 million in the nine months ended September 30, 2017 and 2016.

OTHER ASSETS

OTHER ASSETS	9 Months Ended
	Sep. 30, 2017
Other Assets [Abstract]
OTHER ASSETS	6. OTHER ASSETS In December 2011 and January 2012, the Company made two loans, each in the amount of $0.3 million to a developer of a renewable energy project in the U.S. The promissory notes accrue interest at a rate of 4.5% per annum with a final payment of all unpaid principal and interest becoming fully due and payable upon the earlier to occur of (i) the four year anniversary of the issuance date of the promissory notes, or (ii) an event of default. As defined in the promissory notes, an event of default includes, but is not limited to, the following: any bankruptcy, reorganization or similar proceeding involving the borrower, a sale or transfer of substantially all the assets of the borrower, a default by the borrower relating to any indebtedness due to third parties, the incurrence of additional indebtedness by the borrower without the Company’s written consent and failure of the borrower to perform its obligations pursuant to its other agreements with the Company, including its purchase order for pad mount transformers. The principal balance of the loan receivable is outstanding at September 30, 2017 and December 31, 2016. The Company expects to fully recover these amounts. At September 30, 2017, the Company has classified the principal of $0.6 million to other current assets as the Company anticipates the settlement of both notes in the next twelve months based upon negotiations with the debtor. Included in Other Assets at September 30, 2017 and December 31, 2016 is a customer note receivable of $0.2 million.

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND OTHER INTANGIBLE ASSETS	7. GOODWILL AND OTHER INTANGIBLE ASSETS There were no changes in the carrying values of goodwill for the nine months ended September 30, 2017. T&D Critical Power Total Gross Goodwill: Balance as of January 1, 2017 $ 7,978 $ 2,970 $ 10,948 No activity — — — Balance as of September 30, 2017 $ 7,978 $ 2,970 $ 10,948 Accumulated impairment losses: Balance as of January 1, 2017 $ (976 ) $ — $ (976 ) No activity — — — Balance as of September 30, 2017 $ (976 ) $ — $ (976 ) Net Goodwill as of September 30, 2017 $ 7,002 $ 2,970 $ 9,972 Changes in the carrying values of intangible assets for the nine months ended September 30, 2017, were as follows: T&D Critical Power Total Balance as of January 1, 2017 5,565 2,603 8,168 Amortization (312 ) (1,078 ) (1,390 ) Foreign currency translation 5 — 5 Balance as of September 30, 2017 $ 5,258 $ 1,525 $ 6,783 The components of intangible assets as of September 30, 2017 are summarized below: Weighted Average Amortization Years Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Book Value Customer relationships 7 $ 7,201 $ (4,571 ) $ — $ 2,630 Non-compete agreements 6 705 (459 ) — 246 Trademarks Indefinite 1,816 — — 1,816 Distributor territory license 4 474 (474 ) — — Internally developed software 7 289 (114 ) — 175 Developed technology 10 492 (135 ) — 357 Technology-related industry accreditations Indefinite 1,575 — (16 ) 1,559 Total intangible assets $ 12,552 $ (5,753 ) $ (16 ) $ 6,783 The Company accelerated and fully amortized the distributor territory license intangible asset upon the termination of its distribution agreement with a supplier during the quarter ended September 30, 2017.

DEBT

DEBT	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
DEBT	8. DEBT Canadian Credit Facilities Our Canadian subsidiaries have maintained credit facilities with BMO since October 2009. In June 2011, our wholly owned subsidiary Pioneer Electrogroup Canada Inc. entered into a letter loan agreement with BMO (the “Initial Canadian Facilities”) that replaced and superseded all of our businesses’ prior financing arrangements with the bank. Our Initial Canadian Facilities originally provided for up to $22.0 million Canadian dollars (“CAD”) (approximately $15.9 million expressed in U.S. dollars) consisting of a $10.0 million CAD demand revolving credit facility (“Facility A”) to finance ongoing operations, a $2.0 million CAD term credit facility (“Facility B”) that financed a plant expansion, and a $10.0 million CAD term credit facility (“Facility C”) that financed a business acquisition and the purchase and expansion of its manufacturing facilities. The Initial Canadian Facilities required us to comply on a consolidated Canadian basis with various financial covenants, including maintaining a minimum fixed charge coverage ratio, a maximum funded debt to EBITDA ratio and a limitation on funded debt as a percent of capitalization. Facility A was originally subject to margin criteria and borrowings bore interest at BMO’s prime rate plus 0.50% per annum on amounts borrowed in Canadian dollars, or its U.S. base rate plus 0.50% per annum or LIBOR plus 2.00% per annum on amounts borrowed in U.S. dollars. Borrowings under Facility B originally bore interest at BMO’s prime rate plus 1.00% per annum with principal repayments becoming due on a five year amortization schedule. Borrowings under Facility C were repayable according to a five year principal amortization schedule and bore interest at the following rates: if the funded debt to EBITDA ratio is equal to or greater than 2.00, BMO’s prime rate plus 1.25% per annum on amounts borrowed in Canadian dollars, or its U.S. base rate plus 1.25% per annum or LIBOR plus 2.50% per annum on amounts borrowed in U.S. dollars; or, if the funded debt to EBITDA ratio is less than 2.00, BMO’s prime rate plus 1.00% per annum on amounts borrowed in Canadian dollars, or its U.S. base rate plus 1.00% per annum or LIBOR plus 2.25% per annum on amounts borrowed in U.S. dollars. In addition, Facility C was subject to a standby fee which is calculated monthly using the unused portion of the facility at either 0.625% per annum if the funded debt to EBITDA ratio is equal to or greater than 2.00 or 0.5625% per annum if the funded debt to EBITDA ratio is less than 2.00. In the third quarter of 2015, in connection with an amendment to our United States credit facilities, we elected to prepay $5.0 million Canadian dollars (approximately $4.0 million expressed in U.S. dollars) of Facility C with cash available on hand. In April 2016, our wholly owned subsidiary, Pioneer Electrogroup Canada Inc. (“PECI”), entered into an Amended and Restated Credit Agreement (“CAD ARCA”) with BMO with respect to our existing Canadian credit facilities (as amended and restated, the “Canadian Facilities”) that replaced and superseded all of our businesses’ prior financing arrangements with the bank. This CAD ARCA extended the maturity date of our Canadian Facilities to July 31, 2017. Additionally, defaults relating to the breach of certain financial covenants under the prior financing arrangements with the bank were waived by BMO. On March 15, 2017, the CAD ARCA was further amended (the “2017 CAD ARCA Amendment”). Our Canadian Facilities provided for up to $8.2 million CAD (approximately $6.3 million expressed in U.S. dollars) consisting of a revolving $7.0 million CAD Facility A to finance ongoing operations, a $0.5 million CAD Facility B that financed a plant expansion, and a $0.7 million USD Facility C that financed a business acquisition and the purchase and expansion of its manufacturing facilities. The 2017 CAD ARCA Amendment increased the Facility A to $8.0 million CAD, increasing the total amount of loans available under the Canadian Facilities to $9.1 million CAD. Facility A, as amended and restated, is subject to margin criteria and borrowings bear interest at BMO’s prime rate plus 0.75% per annum on amounts borrowed in Canadian dollars, or its U.S. base rate plus 0.75% per annum or LIBOR plus 2.25% per annum on amounts borrowed in U.S. dollars. Pursuant to the 2017 CAD ARCA Amendment, Facility A will mature on July 31, 2018. Borrowings under Facility B, as amended and restated, bear interest at BMO’s prime rate plus 1.25% per annum with principal repayments becoming due on a five year amortization schedule. Pursuant to the CAD ARCA, quarterly principal repayments were reduced to $47 CAD, with a balloon payment of $141 CAD due on July 31, 2017. The 2017 CAD ARCA Amendment amended the payment schedules so that the quarterly principal payments of $47 CAD will continue after July 31, 2017 until our borrowings under the facility is fully paid on April 30, 2018. Borrowings under Facility C, as amended and restated, bear interest at BMO’s prime rate plus 1.50% per annum on amounts borrowed in Canadian dollars, or its U.S. base rate plus 1.50% per annum or LIBOR plus 2.75% per annum on amounts borrowed in U.S. dollars. Pursuant to the CAD ARCA, a principal repayment of $72 USD was due on June 30, 2016, and the reduced quarterly principal repayments of $36 USD was to be made beginning on October 31, 2016, with a balloon payment of $496 USD due on July 31, 2017. The 2017 CAD ARCA Amendment amended the payment schedules so that the quarterly payments of $36 USD will continue until July 31, 2018, with a balloon payment of $352 due on July 31, 2018. The CAD ARCA modified financial covenant testing so that testing will be performed on our consolidated financial statements. The financial covenants were changed pursuant to the CAD 2017 Amendment to require certain minimum working capital ratios, minimum EBITDA levels and effective tangible net worth levels for each fiscal quarter, which were further modified by the 2017 CAD ARCA Amendment. On March 6, 2017, we received a waiver from BMO on a certain financial covenant as of December 31, 2016. We are currently in the process of renegotiating the terms of our credit facilities with BMO. BMO has agreed to suspend testing of the current ratio covenant as of September 30, 2017, due to such ongoing negotiation. We are in compliance with all financial covenants not suspended and required to be tested at September 30, 2017. We anticipate renegotiating our credit facilities on terms that will allow the Company to meet its covenants prospectively. As of September 30, 2017, we had approximately $6.8 million in U.S. dollar equivalents outstanding under our Canadian Credit Facilities. Our borrowings consisted of approximately $6.2 million outstanding under Facility A, $0.1 million outstanding under Facility B and $0.5 million outstanding under Facility C. United States Credit Facilities On December 2, 2014, our existing U.S. credit facilities (the “U.S. Facilities) were amended in order to provide a $5.0 million term loan facility that was used for the acquisition of Titan. The term loan facility had principal repayments becoming due on a five year amortization schedule. The U.S. Facilities initially required us to comply with a two-step test of financial covenants. First, as measured on a consolidated basis, we were required to comply with a maximum funded debt to adjusted EBITDA ratio of (a) 3.15x for the quarter ended December 31, 2014 and the quarter ending March 31, 2015, (b) 3.25x for the quarter ending June 30, 2015, (c) 3.65x for the quarter ending September 30, 2015, and (d) 2.75x for the quarter ending December 31, 2015 and all testing periods thereafter. Secondly, if the funded debt to adjusted EBITDA tests above are met, and our fixed charge coverage ratio is at or above 1.10x for the quarter ended December 31, 2014, and at or above 1.25x for all testing periods thereafter, then no further compliance tests were required. Alternatively, we could comply with the financial covenant requirements of the U.S. Facilities if our U.S. operations maintained a maximum funded debt to capitalization ratio and various minimum fixed charge coverage ratios and maximum funded debt to adjusted EBITDA ratios which were set at different thresholds by time period. Borrowings under the demand revolving credit facility (USD Facility A) bore interest, at our option, at the bank’s prime rate plus 1.00% per annum on U.S. prime rate loans, or an adjusted LIBOR rate plus 2.25% per annum on Eurodollar loans. Borrowings under the term loan facility (USD Facility B) bore interest, at our option, at the bank’s prime rate plus 1.25% per annum on U.S. prime rate loans, or an adjusted LIBOR rate plus 2.50% per annum on Eurodollar loans. In April 2016, we entered into an Amended and Restated Credit Agreement (“US ARCA”) with BMO with respect to our U.S. Facilities that replaced and superseded all of our businesses’ prior financing arrangements with the bank. Additionally, defaults relating to the breach of certain financial covenants under the prior financing arrangements with the bank were waived by BMO. On March 15, 2017, the US ARCA was further amended (the “2017 US ARCA Amendment”). Our U.S. Facilities, as amended and restated, provided for up to $19.1 million consisting of a $14.0 million USD Facility A to finance ongoing operations, a $5.0 million USD Facility B that financed the acquisition of Titan, and a new $0.1 million revolving credit facility provided pursuant to a MasterCard is to be used to pay for and temporarily finance our day-to-day business expenses and for no other purpose. The 2017 US ARCA Amendment increased the USD Facility A to $15.0 million, increasing the total amount of loans available under the U.S. Facilities to $20.1 million USD. USD Facility A continues to bear interest, at our option, at the bank’s prime rate plus 1.00% per annum on U.S. prime rate loans, or an adjusted LIBOR rate plus 2.25% per annum on Eurodollar loans. USD Facility A had a maturity date of July 31, 2017, which was extended to July 31, 2018 pursuant to the 2017 US ARCA Amendment. Borrowings under USD Facility B bear interest, at our option, at U.S. base rate plus 1.25% per annum on U.S. prime loans, or an adjusted LIBOR rate plus 2.50% per annum on Eurodollar loans. Pursuant to the US ARCA, our quarterly principal payments were reduced to $31 USD for calendar year 2016, with the original amortization schedule continuing to apply to all quarterly principal payments made after December 31, 2016, and the final maturity date of December 2, 2019. The 2017 US ARCA Amendment reduced the scheduled quarterly principal payments to $31 USD, commencing March 31, 2017, to continue until July 31, 2018, with a balloon payment of $4,438 on July 31, 2018. The US ARCA modified financial covenant testing so that testing will be performed on our consolidated financial statements. The financial covenants were changed pursuant to the US ARCA to require certain minimum working capital ratios, minimum EBITDA levels and effective tangible net worth levels for each fiscal quarter, which were further modified by the 2017 US ARCA Amendment. On March 6, 2017, we received a waiver from BMO on a certain financial covenant as of December 31, 2016. We are currently in the process of renegotiating the terms of our credit facilities with BMO. BMO has agreed to suspend testing of the current ratio covenant as of September 30, 2017 due to such ongoing negotiation. We are in compliance with all financial covenants not suspended and required to be tested at September 30, 2017. We anticipate renegotiating our credit facilities on terms that will allow the Company to meet its covenants prospectively. Our obligations under the U.S. Facilities are guaranteed by all our wholly-owned U.S. subsidiaries. In addition, we and our wholly-owned U.S. subsidiaries granted a security interest in substantially all of our assets, including 65% of the shares of Pioneer Electrogroup Canada Inc. held by us, to secure our obligations for borrowed money under the U.S. Facilities. The U.S. Facilities also restrict our ability to incur indebtedness, create or incur liens, make investments, make distributions or dividends and enter into merger agreements for the sale of any or all our assets. As of September 30, 2017, we had approximately $18.5 million outstanding under our U.S. Credit Facilities. Our borrowings consisted of approximately $14.0 million outstanding under USD Facility A, and $4.5 million outstanding under USD Facility B. Nexus Promissory Note On July 25, 2012, the Company’s Mexican subsidiary, Nexus Magneticos de Mexico, S. de R.L. de C.V. (“Nexus”), entered into a $1.7 million term loan agreement with GE CF Mexico, S.A. de C.V. (“GE Capital Mexico”). The term loan was payable in 60 consecutive monthly installments and bore interest, payable monthly, at a rate of 6.93% per annum. The obligations of Nexus under the term loan were secured by certain machinery and equipment located in Mexico and by a corporate guaranty by the Company. As of September 30, 2017 the balance of the note has been fully repaid, while at December 31, 2016 there was approximately $185 outstanding under the Nexus Promissory Note. Long-term debt consists of the following: September 30, 2017 December 31, Term credit facilities, net (a) $ 4,923 $ 5,194 Nexus promissory note — 185 Capital lease obligations 3 5 Total debt 4,926 5,384 Less current portion (4,926 ) (1,379 ) Total long-term debt $ — $ 4,005 (a) The balances as of September 30, 2017 and December 31, 2016 are net of debt issuance costs of $218 and $245, respectively.

PENSION PLAN

PENSION PLAN	9 Months Ended
	Sep. 30, 2017
Defined Benefit Plan [Abstract]
PENSION PLAN	9. PENSION PLAN The Company’s Canadian subsidiary sponsors a defined benefit pension plan at one of its locations in which a majority of its employees are members. The subsidiary funds 100% of all contributions to the plan. The benefits, or the rate per year of credit service, are established by the Company and updated at its discretion. The components of the expense the Company incurred under the pension plan are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Current service cost, net of employee contributions $ 10 $ 10 $ 35 $ 33 Interest cost on accrued benefit obligation 27 26 79 76 Expected return on plan assets (44 ) (41 ) (128 ) (121 ) Amortization of transitional obligation 3 3 9 8 Amortization of past service costs 2 3 6 8 Amortization of net actuarial gain 12 10 36 28 Total cost of benefit $ 10 $ 11 $ 37 $ 32 The Company’s policy is to fund the pension plan at or above the minimum level required by law. The Company made $56 and $86 of contributions to its defined benefit pension plan during the nine months ended September 30, 2017 and 2016, respectively. Changes in the discount rate and actual investment returns that are lower than the long-term expected return on plan assets could result in the Company making additional contributions. There were no changes during the current period.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Sep. 30, 2017
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' EQUITY	10. STOCKHOLDERS’ EQUITY Common Stock The Company had 8,726,045 and 8,699,712 shares of common stock, $0.001 par value per share, outstanding as of September 30, 2017 and December 31, 2016, respectively. Warrants As of September 30, 2017 and December 31, 2016, the Company had warrants outstanding to purchase 50,600 shares of common stock with a weighted average exercise price of $7.00 per share. The warrants expire on September 18, 2018. No warrants were exercised during the nine months ended September 30, 2017. Stock-Based Compensation A summary of stock option activity under the 2011 Long-Term Incentive Plan as of September 30, 2017, and changes during the nine months ended September 30, 2017, are presented below: Stock Weighted Weighted Aggregate Outstanding as of January 1, 2017 247,400 $ 8.75 $ Granted 262,000 7.30 Exercised (26,333 ) 4.55 Forfeited (47,267 ) 6.74 Outstanding as of September 30, 2017 435,800 $ 8.35 7.7 $ 238,140 Exercisable as of September 30, 2017 173,800 9.94 5.0 138,580 As of September 30, 2017 there were 237,867 shares available for future grants under the Company’s 2011 Long-Term Incentive Plan. Stock-based compensation expense recorded for the three and nine months ended September 30, 2017 was approximately $148 and $319, respectively, as compared to the expense of $28 and $34, during the three and nine months ended September 30, 2016, respectively. At September 30, 2017, the Company had total stock-based compensation expense remaining to be recognized in the consolidated statements of income of approximately $339. Foreign Currency Translation Foreign assets and liabilities are translated using the exchange rate in effect at the balance sheet date, and results of operations are translated using an average rate for the period. Translation adjustments are accumulated and reported as a component of accumulated other comprehensive income (loss). The Company had foreign currency translation adjustments resulting in a nominal unrealized loss for the three months ended September 30, 2017 and $147 for the three months ended September 30, 2016. For the nine months ended September 30, 2017 and 2016, the Company had foreign currency translation adjustments resulting in unrealized income of $68 and $445, respectively.

BASIC AND DILUTED (LOSS) INCOME

BASIC AND DILUTED (LOSS) INCOME PER COMMON SHARE	9 Months Ended
	Sep. 30, 2017
Earnings Per Share [Abstract]
BASIC AND DILUTED (LOSS) INCOME PER COMMON SHARE	11. BASIC AND DILUTED (LOSS) INCOME PER COMMON SHARE Basic and diluted income per common share is calculated based on the weighted average number of shares outstanding during the period. The Company’s employee and director stock option awards, as well as incremental shares issuable upon exercise of warrants, are not considered in the calculations if the effect would be anti-dilutive. In periods where the company reported a net loss, diluted net loss per common share is the same as basic net loss per common share for those periods. The following table sets forth the computation of basic and diluted (loss) income per share (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net (loss) income $ (764 ) $ 322 $ 678 $ 1,085 Denominator: Weighted average basic shares outstanding 8,725 8,700 8,713 8,700 Effect of dilutive securities - equity based compensation plans — 8 14 8 Net dilutive effect of warrants outstanding — — — — Denominator for diluted net (loss) income per common share 8,725 8,708 8,727 8,708 Net (loss) income per common share: Basic $ (0.09 ) $ 0.04 $ 0.08 $ 0.12 Diluted $ (0.09 ) $ 0.04 $ 0.08 $ 0.12 Anti-dilutive securities (excluded from per share calculation): Equity based compensation plans 397 173 383 173 Warrants 51 51 51 51

BUSINESS SEGMENT AND GEOGRAPHIC

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION	9 Months Ended
	Sep. 30, 2017
Segment Reporting [Abstract]
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION	12. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION The Company follows ASC 280 - Segment Reporting in determining its reportable segments. The Company considered the way its management team, most notably its chief operating decision maker, makes operating decisions and assesses performance and considered which components of the Company’s enterprise have discrete financial information available. As the Company makes decisions using a manufactured products vs. distributed products and services group focus, its analysis resulted in two reportable segments: T&D Solutions and Critical Power. The Critical Power reportable segment is comprised solely of the Company’s Titan Energy Systems Inc. subsidiary. The T&D Solutions reportable segment is an aggregation of all other Company subsidiaries, together with sales and expenses attributable to the strategic sales group for its T&D Solutions marketing activities. The T&D Solutions segment is involved in the design, manufacture and distribution of electrical transformers and switchgear used primarily by utilities, large industrial and commercial operations to manage their electrical power distribution needs. The Critical Power segment provides power generation equipment, and aftermarket field-services primarily to help customers ensure smooth, uninterrupted power to operations during times of emergency. The following tables present information about segment income and loss: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenues T&D Solutions Transformers $ 21,548 $ 21,110 $ 66,198 $ 61,605 Switchgear 4,299 4,268 10,118 10,876 25,847 25,378 76,316 72,481 Critical Power Equipment 1,261 1,741 4,490 7,598 Service 2,686 2,270 7,147 5,810 3,947 4,011 11,637 13,408 Consolidated $ 29,794 $ 29,389 $ 87,953 $ 85,889 Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Depreciation and Amortization T&D Solutions $ 366 $ 450 $ 1,082 $ 1,203 Critical Power 507 355 1,210 1,063 Unallocated Corporate Overhead Expenses 17 17 52 51 Consolidated $ 890 $ 822 $ 2,344 $ 2,317 Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Operating Income (Loss) T&D Solutions $ 1,442 $ 2,002 $ 6,207 $ 6,083 Critical Power 72 (10 ) (277 ) (100 ) Unallocated Corporate Overhead Expenses (915 ) (780 ) (2,547 ) (2,293 ) Consolidated $ 599 $ 1,212 $ 3,383 $ 3,690 Revenues are attributable to countries based on the location of the Company’s customers: Three Months Ended Nine Months Ended September 30 September 30, 2017 2016 2017 2016 United States $ 20,804 $ 20,594 $ 59,790 $ 59,067 Canada 8,990 8,795 28,163 26,758 Others — — — 64 Total $ 29,794 $ 29,389 $ 87,953 $ 85,889

SUMMARY OF SIGNIFICANT ACCOUN19

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements Revenue from Contracts with Customers In July 2015, the FASB made a decision to defer the effective date of the new standard for one year and permit early adoption as of the original effective date. The Company is currently reviewing its various revenue streams from its two reportable segments: (i) T&D Solutions and (ii) Critical Power. Concurrently, through the use of various data gathering methods, we are categorizing the types of sales for our business units for the purpose of comparing how we currently recognize revenue and quantifying the impact, if any, that this new standard will have on our consolidated financial statements. The Company plans to elect to apply the modified retrospective approach upon adoption. Additionally, the new guidance requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including revenue recognition policies to identify performance obligations, assets recognized from costs incurred to obtain and fulfill a contract, and significant judgments in measurement and recognition. The Company is determining the impact of adopting Topic 606 on its revenue recognition policies, procedures and control framework and the resulting impact on its consolidated financial position, results of operation and cash flows. The Company is in the process of reviewing revenue sources and evaluating the customer population to determine the appropriate distribution of customer accounts into populations with similar contract terms and performance obligations. We expect to complete this process before the filing of our Form 10-K for the year ended December 31, 2017. Simplifying the Measurement of Inventory. Leases. Leases (Topic 842) Share-Based Compensation The Company adopted ASU No. 2016-09 in 2017. The adoption of the new guidance did not materially affect the Company’s financial position, results of operations or cash flows. Statement of Cash Flows. Statement of Cash Flows : Classification of Certain Cash Receipts and Cash Payments. Simplifying the Test for Goodwill Impairment.

OTHER EXPENSE (Tables)

OTHER EXPENSE (Tables)	9 Months Ended
	Sep. 30, 2017
Other Income and Expenses [Abstract]
Schedule of other expense	Other expense in the consolidated statements of income for the three and nine months ended September 30, 2017 and 2016, respectively, are as follows: Three Months Ended Nine Months Ending September 30, September 30, 2017 2016 2017 2016 Payroll tax interest and penalties accrued $ 40 $ 68 $ 28 $ 23 Other non-operating expenses 205 196 619 531 Other expense $ 245 $ 264 $ 647 $ 554

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Sep. 30, 2017
Inventory Disclosure [Abstract]
Schedule of the components of inventories	The components of inventories are summarized below: September 30, 2017 December 31, Raw materials $ 10,116 $ 10,175 Work in process 7,453 6,535 Finished goods 11,152 9,826 Provision for excess and obsolete inventory (397 ) (389 ) Total inventories $ 28,324 $ 26,147

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	9 Months Ended
	Sep. 30, 2017
Property, Plant and Equipment [Abstract]
Schedule of property, plant and equipment	Property, plant and equipment are summarized below: September 2017 (Unaudited) December 31, Land $ 50 $ 46 Buildings 2,467 2,293 Machinery and equipment 10,656 9,421 Furniture and fixtures 476 466 Computer hardware and software 1,364 1,289 Leasehold improvements 715 534 Construction in progress 18 18 15,746 14,067 Less: Accumulated depreciation (8,721 ) (7,476 ) Total property, plant and equipment, net $ 7,025 $ 6,591

GOODWILL AND OTHER INTANGIBLE23

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of goodwill by segment	There were no changes in the carrying values of goodwill for the nine months ended September 30, 2017. T&D Critical Power Total Gross Goodwill: Balance as of January 1, 2017 $ 7,978 $ 2,970 $ 10,948 No activity — — — Balance as of September 30, 2017 $ 7,978 $ 2,970 $ 10,948 Accumulated impairment losses: Balance as of January 1, 2017 $ (976 ) $ — $ (976 ) No activity — — — Balance as of September 30, 2017 $ (976 ) $ — $ (976 ) Net Goodwill as of September 30, 2017 $ 7,002 $ 2,970 $ 9,972
Schedule of changes in intangible asset balances	Changes in the carrying values of intangible assets for the nine months ended September 30, 2017, were as follows: T&D Critical Power Total Balance as of January 1, 2017 5,565 2,603 8,168 Amortization (312 ) (1,078 ) (1,390 ) Foreign currency translation 5 — 5 Balance as of September 30, 2017 $ 5,258 $ 1,525 $ 6,783
Schedule of components of intangible assets	The components of intangible assets as of September 30, 2017 are summarized below: Weighted Average Amortization Years Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Book Value Customer relationships 7 $ 7,201 $ (4,571 ) $ — $ 2,630 Non-compete agreements 6 705 (459 ) — 246 Trademarks Indefinite 1,816 — — 1,816 Distributor territory license 4 474 (474 ) — — Internally developed software 7 289 (114 ) — 175 Developed technology 10 492 (135 ) — 357 Technology-related industry accreditations Indefinite 1,575 — (16 ) 1,559 Total intangible assets $ 12,552 $ (5,753 ) $ (16 ) $ 6,783

DEBT (Tables)

DEBT (Tables)	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Schedule of long-term debt	Long-term debt consists of the following: September 30, 2017 December 31, Term credit facilities, net (a) $ 4,923 $ 5,194 Nexus promissory note — 185 Capital lease obligations 3 5 Total debt 4,926 5,384 Less current portion (4,926 ) (1,379 ) Total long-term debt $ — $ 4,005 (a) The balances as of September 30, 2017 and December 31, 2016 are net of debt issuance costs of $218 and $245, respectively.

PENSION PLAN (Tables)

PENSION PLAN (Tables)	9 Months Ended
	Sep. 30, 2017
Defined Benefit Plan [Abstract]
Schedule of pension plan expenses	The components of the expense the Company incurred under the pension plan are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Current service cost, net of employee contributions $ 10 $ 10 $ 35 $ 33 Interest cost on accrued benefit obligation 27 26 79 76 Expected return on plan assets (44 ) (41 ) (128 ) (121 ) Amortization of transitional obligation 3 3 9 8 Amortization of past service costs 2 3 6 8 Amortization of net actuarial gain 12 10 36 28 Total cost of benefit $ 10 $ 11 $ 37 $ 32

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
	Sep. 30, 2017
Stockholders' Equity Note [Abstract]
Schedule of stock option activity	A summary of stock option activity under the 2011 Long-Term Incentive Plan as of September 30, 2017, and changes during the nine months ended September 30, 2017, are presented below: Stock Weighted Weighted Aggregate Outstanding as of January 1, 2017 247,400 $ 8.75 $ Granted 262,000 7.30 Exercised (26,333 ) 4.55 Forfeited (47,267 ) 6.74 Outstanding as of September 30, 2017 435,800 $ 8.35 7.7 $ 238,140 Exercisable as of September 30, 2017 173,800 9.94 5.0 138,580

BASIC AND DILUTED (LOSS) INCO27

BASIC AND DILUTED (LOSS) INCOME PER COMMON SHARE (Tables)	9 Months Ended
	Sep. 30, 2017
Earnings Per Share [Abstract]
Schedule of computation of basic and diluted income per share	The following table sets forth the computation of basic and diluted income per share (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net (loss) income $ (764 ) $ 322 $ 678 $ 1,085 Denominator: Weighted average basic shares outstanding 8,725 8,700 8,713 8,700 Effect of dilutive securities - equity based compensation plans — 8 14 8 Net dilutive effect of warrants outstanding — — — — Denominator for diluted net (loss) income per common share 8,725 8,708 8,727 8,708 Net (loss) income per common share: Basic $ (0.09 ) $ 0.04 $ 0.08 $ 0.12 Diluted $ (0.09 ) $ 0.04 $ 0.08 $ 0.12 Anti-dilutive securities (excluded from per share calculation): Equity based compensation plans 397 173 383 173 Warrants 51 51 51 51

BUSINESS SEGMENT AND GEOGRAPH28

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Tables)	9 Months Ended
	Sep. 30, 2017
Segment Reporting [Abstract]
Schedule of information about segment income and loss	The following tables present information about segment income and loss: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenues T&D Solutions Transformers $ 21,548 $ 21,110 $ 66,198 $ 61,605 Switchgear 4,299 4,268 10,118 10,876 25,847 25,378 76,316 72,481 Critical Power Equipment 1,261 1,741 4,490 7,598 Service 2,686 2,270 7,147 5,810 3,947 4,011 11,637 13,408 Consolidated $ 29,794 $ 29,389 $ 87,953 $ 85,889 Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Depreciation and Amortization T&D Solutions $ 366 $ 450 $ 1,082 $ 1,203 Critical Power 507 355 1,210 1,063 Unallocated Corporate Overhead Expenses 17 17 52 51 Consolidated $ 890 $ 822 $ 2,344 $ 2,317 Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Operating Income (Loss) T&D Solutions $ 1,442 $ 2,002 $ 6,207 $ 6,083 Critical Power 72 (10 ) (277 ) (100 ) Unallocated Corporate Overhead Expenses (915 ) (780 ) (2,547 ) (2,293 ) Consolidated $ 599 $ 1,212 $ 3,383 $ 3,690
Schedule of revenues attributable to countries	Revenues are attributable to countries based on the location of the Company’s customers: Three Months Ended Nine Months Ended September 30 September 30, 2017 2016 2017 2016 United States $ 20,804 $ 20,594 $ 59,790 $ 59,067 Canada 8,990 8,795 28,163 26,758 Others — — — 64 Total $ 29,794 $ 29,389 $ 87,953 $ 85,889

BASIS OF PRESENTATION (Details

BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reclassification - decrease to gross profit	$ (18)	$ (262)
Reclassification adjustment (percent)	(0.06%)	(0.30%)

SUMMARY OF SIGNIFICANT ACCOUN30

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	9 Months Ended
	Sep. 30, 2017Segment
Accounting Policies [Abstract]
Number of reportable segments	2

OTHER EXPENSE (Details)

OTHER EXPENSE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other Income and Expenses [Abstract]
Payroll tax interest and penalties accrued	$ 40	$ 68	$ 28	$ 23
Other non-operating expenses	205	196	619	531
Other expense	$ 245	$ 264	$ 647	$ 554

OTHER EXPENSE (Details Narrativ

OTHER EXPENSE (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Other Income and Expenses [Abstract]
Abatement of penalties	$ 100	$ 400

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Raw materials	$ 10,116	$ 10,175
Work in process	7,453	6,535
Finished goods	11,152	9,826
Provision for excess and obsolete inventory	(397)	(389)
Total inventories	$ 28,324	$ 26,147

INVENTORIES (Details Narrative)

INVENTORIES (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Goods in transit	$ 3,100	$ 3,100
Inventory [Member]
Collateral pledged	$ 5,300	$ 4,000

PROPERTY, PLANT AND EQUIPMENT35

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 15,746	$ 14,067
Less: accumulated depreciation	(8,721)	(7,476)
Total property, plant and equipment, net	7,025	6,591
Land [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment	50	46
Building [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment	2,467	2,293
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment	10,656	9,421
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment	476	466
Computer Hardware And Software [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment	1,364	1,289
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment	715	534
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 18	$ 18

PROPERTY, PLANT AND EQUIPMENT36

PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 956	$ 1,006

OTHER ASSETS (Details Narrative

OTHER ASSETS (Details Narrative) $ in Thousands	Jan. 31, 2012USD ($)loan	Dec. 31, 2011USD ($)loan	Sep. 30, 2017USD ($)	Dec. 31, 2016USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other current assets			$ 600
Customer note receivable			$ 200	$ 200
Notes Receivable - Developer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal amount	$ 300	$ 300
Number of promissory notes | loan	1	1
Accrued interest rate (in percent)	4.50%	4.50%

GOODWILL AND OTHER INTANGIBLE38

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)
Goodwill
Balance, beginning	$ 10,948
No activity
Balance, ending	10,948
Accumulated impairment losses:
Balance, beginning	(976)
Balance, ending	(976)
Net Goodwill	9,972
T And D Segment [Member]
Goodwill
Balance, beginning	7,978
No activity
Balance, ending	7,978
Accumulated impairment losses:
Balance, beginning	(976)
Balance, ending	(976)
Net Goodwill	7,002
Critical Power Segment [Member]
Goodwill
Balance, beginning	2,970
No activity
Balance, ending	2,970
Accumulated impairment losses:
Net Goodwill	$ 2,970

GOODWILL AND OTHER INTANGIBLE39

GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Intangible assets, balance	$ 8,168
Amortization	(1,390)	$ (1,309)
Foreign currency translation	5
Intangible assets, balance	6,783
T And D Segment [Member]
Intangible assets, balance	5,565
Amortization	(312)
Foreign currency translation	5
Intangible assets, balance	5,258
Critical Power Segment [Member]
Intangible assets, balance	2,603
Amortization	(1,078)
Intangible assets, balance	$ 1,525

GOODWILL AND OTHER INTANGIBLE40

GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Gross carrying amount	$ 12,552
Accumulated amortization	(5,753)
Foreign currency translation	(16)
Intangible assets, net	6,783	$ 8,168
Technology Related Industry Accreditations [Member]
Gross carrying amount	1,575
Foreign currency translation	(16)
Intangible assets, net	$ 1,559
Customer Relationships [Member]
Weighted average amortization years	7 years
Gross carrying amount	$ 7,201
Accumulated amortization	(4,571)
Intangible assets, net	$ 2,630
Noncompete Agreements [Member]
Weighted average amortization years	6 years
Gross carrying amount	$ 705
Accumulated amortization	(459)
Intangible assets, net	246
Trademarks [Member]
Gross carrying amount	1,816
Intangible assets, net	$ 1,816
Distributor Territory License [Member]
Weighted average amortization years	4 years
Gross carrying amount	$ 474
Accumulated amortization	$ (474)
Internally Developed Software [Member]
Weighted average amortization years	7 years
Gross carrying amount	$ 289
Accumulated amortization	(114)
Intangible assets, net	$ 175
Developed Technology [Member]
Weighted average amortization years	10 years
Gross carrying amount	$ 492
Accumulated amortization	(135)
Intangible assets, net	$ 357

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Total debt		$ 4,926	$ 5,384
Less current portion		(4,926)	(1,379)
Total long-term debt			4,005
Line of Credit [Member]
Debt Instrument [Line Items]
Total debt	[1]	4,923	5,194
Nexus Promissory Note [Member]
Debt Instrument [Line Items]
Total debt			185
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Total debt		$ 3	$ 5
[1]	The balances as of September 30, 2017 and December 31, 2016 are net of debt issuance costs of $218 and $245, respectively.

DEBT (Details Narrative)

DEBT (Details Narrative) CAD in Thousands, $ in Thousands

Mar. 15, 2017USD ($)

Mar. 15, 2017CAD

Jun. 30, 2016USD ($)

Apr. 30, 2016CAD

Jun. 30, 2011USD ($)

Sep. 30, 2015USD ($)

Sep. 30, 2015CAD

Sep. 30, 2017USD ($)

Mar. 15, 2017CAD

Dec. 31, 2016USD ($)

Apr. 30, 2016USD ($)

Apr. 30, 2016CAD

Jun. 30, 2011CAD

Debt Instrument [Line Items]

Credit facilities amount outstanding

$ 20,197

$ 17,689

Line of Credit [Member]

Debt Instrument [Line Items]

Maximum Credit Facilities Amount to Borrow

$ 15,900

Line of Credit [Member] | Canadian Dollars [Member]

Debt Instrument [Line Items]

Maximum Credit Facilities Amount to Borrow | CAD

CAD 22,000

Canadian Credit Facilities A [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

0.75%

0.50%

Variable rate description

BMO’s prime rate plus

BMO’s prime rate plus

Credit facilities amount outstanding

6,200

Canadian Credit Facilities A [Member] | U.S. Base Rate [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

0.75%

0.50%

Variable rate description

U.S. base rate plus

U.S. base rate plus

Canadian Credit Facilities A [Member] | LIBOR [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

2.25%

2.00%

Variable rate description

LIBOR plus

LIBOR plus

Canadian Credit Facilities A [Member] | Canadian Dollars [Member]

Debt Instrument [Line Items]

Maximum Credit Facilities Amount to Borrow | CAD

CAD 8,000

CAD 7,000

10,000

Canadian Credit Facilities B [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

1.00%

Variable rate description

BMO’s prime rate plus

Debt instrument amortization period

5 years

Credit facilities amount outstanding

100

Canadian Credit Facilities B [Member] | Canadian Dollars [Member]

Debt Instrument [Line Items]

Maximum Credit Facilities Amount to Borrow | CAD

500

2,000

Interest rate spread on variable rate

1.25%

Variable rate description

BMO’s prime rate plus

Frequency of payments

Quarterly

Quarterly

Quarterly

Quarterly principal payment | CAD

CAD 47

CAD 47

Balloon payment | CAD

141

Debt instrument amortization period

5 years

Canadian Credit Facilities C [Member]

Debt Instrument [Line Items]

Maximum Credit Facilities Amount to Borrow

$ 700

Frequency of payments

Quarterly

Quarterly

Quarterly principal payment

$ 36

$ 72

Balloon payment

$ 352

496

Credit facilities amount outstanding

500

Prepayment of debt

$ 4,000

Canadian Credit Facilities C [Member] | EBITDA Equal to or Greater than 2.00 [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

1.25%

Variable rate description

BMO’s prime rate plus

Standby fee percentage

0.625%

Canadian Credit Facilities C [Member] | EBITDA is Less than 2.00 [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

1.00%

Variable rate description

BMO’s prime rate plus

Standby fee percentage

0.5625%

Canadian Credit Facilities C [Member] | U.S. Base Rate [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

1.50%

Variable rate description

U.S. base rate plus

Canadian Credit Facilities C [Member] | U.S. Base Rate [Member] | EBITDA Equal to or Greater than 2.00 [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

1.25%

Variable rate description

U.S. base rate plus

Canadian Credit Facilities C [Member] | U.S. Base Rate [Member] | EBITDA is Less than 2.00 [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

1.00%

Variable rate description

U.S. base rate plus

Canadian Credit Facilities C [Member] | LIBOR [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

2.75%

Variable rate description

LIBOR plus

Canadian Credit Facilities C [Member] | LIBOR [Member] | EBITDA Equal to or Greater than 2.00 [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

2.50%

Variable rate description

LIBOR plus

Canadian Credit Facilities C [Member] | LIBOR [Member] | EBITDA is Less than 2.00 [Member]

Debt Instrument [Line Items]

Interest rate spread on variable rate

2.25%

Variable rate description

LIBOR plus

Canadian Credit Facilities C [Member] | Canadian Dollars [Member]

Debt Instrument [Line Items]

Maximum Credit Facilities Amount to Borrow | CAD

CAD 10,000

Interest rate spread on variable rate

1.50%

Variable rate description

BMO’s prime rate plus

Frequency of payments

Quarterly

Quarterly principal payment | CAD

CAD 36

Prepayment of debt | CAD

CAD 5,000

Canadian Facilities [Member]

Debt Instrument [Line Items]

Maximum Credit Facilities Amount to Borrow

$ 6,300

Credit facilities amount outstanding

$ 6,800

Canadian Facilities [Member] | Canadian Dollars [Member]

Debt Instrument [Line Items]

Maximum Credit Facilities Amount to Borrow | CAD

CAD 9,100

CAD 8,200

DEBT (Details Narrative 1)

DEBT (Details Narrative 1) $ in Thousands	Mar. 15, 2017USD ($)	Dec. 31, 2014	Sep. 30, 2017USD ($)	Dec. 31, 2016USD ($)	Apr. 30, 2016USD ($)	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 02, 2014USD ($)
Line of Credit Facility [Line Items]
Credit facilities amount outstanding			$ 20,197	$ 17,689
U.S. Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Credit Facilities Amount to Borrow	$ 20,100				$ 19,100					$ 5,000
Percentage of subsidiary shares used to secure borrowings in facility			65.00%
Credit facilities amount outstanding			$ 18,500
Minimum fixed charge coverage ratio		1.10
U.S. Credit Facilities [Member] | Scenario, Plan [Member]
Line of Credit Facility [Line Items]
EBITDA benchmark ratio		3.15				2.75	3.65	3.25	3.15
Minimum fixed charge coverage ratio			1.25
U.S. Credit Facilities A [Member]
Line of Credit Facility [Line Items]
Maximum Credit Facilities Amount to Borrow	$ 15,000				14,000
Credit facilities amount outstanding			$ 14,000
U.S. Credit Facilities A [Member] | Bank's Prime Rate [Member]
Line of Credit Facility [Line Items]
Interest rate spread			1.00%
Variable rate description			bank’s prime rate on U.S. prime rate loans
U.S. Credit Facilities A [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Interest rate spread			2.25%
Variable rate description			adjusted LIBOR rate on Eurodollar loans
U.S. Credit Facilities B [Member]
Line of Credit Facility [Line Items]
Maximum Credit Facilities Amount to Borrow					5,000
Frequency of payments			Quarterly
Quarterly principal payment			$ 31
Credit facilities amount outstanding			4,500
Balloon payment			$ 4,438
U.S. Credit Facilities B [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Interest rate spread			2.50%
Variable rate description			adjusted LIBOR rate on Eurodollar loans
U.S. Credit Facilities B [Member] | U.S. Base Rate [Member]
Line of Credit Facility [Line Items]
Interest rate spread			1.25%
Variable rate description			bank’s prime rate on U.S. prime rate loans
U.S. Credit Facility - MasterCard [Member]
Line of Credit Facility [Line Items]
Maximum Credit Facilities Amount to Borrow					$ 100
Credit Facility B [Member]
Line of Credit Facility [Line Items]
Frequency of payments	Quarterly
Quarterly principal payment	$ 31

DEBT (Details Narrative 2)

DEBT (Details Narrative 2) $ in Thousands	Sep. 30, 2017USD ($)	Dec. 31, 2016USD ($)	Jul. 25, 2012USD ($)installments
Debt Instrument [Line Items]
Debt issuance costs	$ 218	$ 245
Nexus Promissory Note [Member]
Debt Instrument [Line Items]
Note amount			$ 1,700
Carrying amount		$ 185
Rate of interest of debt instrument			6.93%
Number of installments | installments			60

PENSION PLAN (Details)

PENSION PLAN (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Defined Benefit Plan [Abstract]
Current service cost, net of employee contributions	$ 10	$ 10	$ 35	$ 33
Interest cost on accrued benefit obligation	27	26	79	76
Expected return on plan assets	(44)	(41)	(128)	(121)
Amortization of transitional obligation	3	3	9	8
Amortization of past service costs	2	3	6	8
Amortization of net actuarial gain	12	10	36	28
Total cost of benefit	$ 10	$ 11	$ 37	$ 32

PENSION PLAN (Details Narrative

PENSION PLAN (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Defined Benefit Plan [Abstract]
Funded contributions by subsidiary (percent)	100.00%
Defined benefit contributions	$ 56	$ 86

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)$ / sharesshares
Stock options
Outstanding at beginning of period | shares	247,400
Granted | shares	262,000
Exercised | shares	(26,333)
Forfeited | shares	(47,267)
Outstanding at end of period | shares	435,800
Exercisable at end of period | shares	173,800
Weighted average exercise price
Outstanding at beginning of period | $ / shares	$ 8.75
Granted | $ / shares	7.30
Exercised | $ / shares	4.55
Forfeited | $ / shares	6.74
Outstanding at end of period | $ / shares	8.35
Exercisable at end of period | $ / shares	$ 9.94
Weighted average remaining contractual term
Outstanding at end of period	7 years 8 months 12 days
Exercisable at the end of period	5 years
Aggregate intrinsic value
Outstanding at end of period | $	$ 238,140
Exercisable at end of period | $	$ 138,580

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Common stock, outstanding shares	8,726,045		8,726,045		8,699,712
Common stock, par value (in dollars per share)	$ 0.001		$ 0.001		$ 0.001
Outstanding purchase of warrants (in shares)	50,600		50,600		50,600
Weighted average exercise price - warrants			$ 7		$ 7
Warrant expiration date range end			Sep. 18, 2018		Sep. 18, 2018
Stock-based compensation	$ 148	$ 28	$ 319	$ 34	$ 28
Recognized stock-based compensation			339
Foreign currency translation adjustments		$ (147)	$ 68	$ 445
Incentive Stock Option [Member]
Number of shares available for future grants	237,867		237,867

BASIC AND DILUTED (LOSS) INCO49

BASIC AND DILUTED (LOSS) INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Numerator:
Net (loss) income	$ (764)	$ 322	$ 678	$ 1,085
Denominator:
Weighted average basic shares outstanding	8,725	8,700	8,713	8,700
Effect of dilutive securities - equity based compensation plans		8	14	8
Denominator for diluted net (loss) income per common share	8,725	8,708	8,727	8,708
Net (loss) income per common share:
Basic	$ (0.09)	$ 0.04	$ 0.08	$ 0.12
Diluted	$ (0.09)	$ 0.04	$ 0.08	$ 0.12
Equity Based Compensation Plans [Member]
Anti-dilutive securities (excluded from per share calculation):
Excluded securities from computation of basic and diluted EPS	397	173	383	173
Warrant [Member]
Anti-dilutive securities (excluded from per share calculation):
Excluded securities from computation of basic and diluted EPS	51	51	51	51

BUSINESS SEGMENT AND GEOGRAPH50

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues
Revenues	$ 29,794	$ 29,389	$ 87,953	$ 85,889
Depreciation and Amortization	890	822	2,344	2,317
Operating Income (Loss)	599	1,212	3,383	3,690
T And D Segment [Member]
Revenues
Transformers	21,548	21,110	66,198	61,605
Switchgear	4,299	4,268	10,118	10,876
Revenues	25,847	25,378	76,316	72,481
Depreciation and Amortization	366	450	1,082	1,203
Operating Income (Loss)	1,442	2,002	6,207	6,083
Critical Power Segment [Member]
Revenues
Equipment	1,261	1,741	4,490	7,598
Service	2,686	2,270	7,147	5,810
Revenues	3,947	4,011	11,637	13,408
Depreciation and Amortization	507	355	1,210	1,063
Operating Income (Loss)	72	(10)	(277)	(100)
Corporate [Member]
Revenues
Depreciation and Amortization	17	17	52	51
Operating Income (Loss)	$ (915)	$ (780)	$ (2,547)	$ (2,293)

BUSINESS SEGMENT AND GEOGRAPH51

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues	$ 29,794	$ 29,389	$ 87,953	$ 85,889
United States [Member]
Revenues	20,804	20,594	59,790	59,067
Canada [Member]
Revenues	$ 8,990	$ 8,795	$ 28,163	26,758
Other Countries [Member]
Revenues				$ 64

BUSINESS SEGMENT AND GEOGRAPH52

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Details Narrative)	9 Months Ended
	Sep. 30, 2017Segment
Segment Reporting [Abstract]
Number of reportable segments	2