Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | PIONEER POWER SOLUTIONS, INC. | |
Entity Central Index Key | 0001449792 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-35212 | |
Entity Incorporation, State or Country Code | DE | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,726,045 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 5,360 | $ 3,877 | $ 8,378 | $ 10,122 |
Cost of goods sold | 4,839 | 3,684 | 7,600 | 8,803 |
Gross profit | 521 | 193 | 778 | 1,319 |
Operating expenses | ||||
Selling, general and administrative | 2,071 | 1,751 | 3,771 | 4,016 |
Total operating expenses | 2,071 | 1,751 | 3,771 | 4,016 |
Loss from continuing operations | (1,550) | (1,558) | (2,993) | (2,697) |
Interest expense | 240 | 229 | 463 | 448 |
Gain on sale of subsidiary | (4,207) | |||
Other expense | 3,807 | 212 | 465 | 349 |
(Loss) income before taxes | (5,597) | (1,999) | 286 | (3,494) |
Income tax (benefit) expense | (1,442) | (341) | 104 | (530) |
Net (loss) income from continuing operations | (4,155) | (1,658) | 182 | (2,964) |
Income from discontinued operations, net of income taxes | 132 | 862 | 1,443 | 1,594 |
Net (loss) income | $ (4,023) | $ (796) | $ 1,625 | $ (1,370) |
Basic | ||||
(Loss) income from continuing operations (in dollars per share) | $ (0.48) | $ (0.19) | $ 0.02 | $ (0.34) |
Income from discontinued operations (in dollars per share) | 0.02 | 0.10 | 0.17 | 0.18 |
Net (loss) income (in dollars per share) | (0.46) | (0.09) | 0.19 | (0.16) |
Diluted | ||||
(Loss) income from continuing operations (in dollars per share) | (0.48) | (0.19) | 0.02 | (0.34) |
Income from discontinued operations (in dollars per share) | 0.02 | 0.10 | 0.17 | 0.18 |
Net (loss) income (in dollars per share) | $ (0.46) | $ (0.09) | $ 0.19 | $ (0.16) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 8,726 | 8,726 | 8,726 | 8,726 |
Diluted (in shares) | 8,726 | 8,726 | 8,730 | 8,726 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net (loss) income | $ (4,023) | $ (796) | $ 1,625 | $ (1,370) |
Other comprehensive (loss) income | ||||
Foreign currency translation adjustments | 374 | (1) | 62 | (167) |
Amortization of net prior service costs and net actuarial losses, net of tax | 20 | (1) | 110 | (16) |
Other comprehensive income (loss) | 394 | (2) | 172 | (183) |
Comprehensive (loss) income | $ (3,629) | $ (798) | $ 1,797 | $ (1,553) |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 490 | $ 200 |
Short term investments | 3,882 | |
Accounts receivable, net | 2,935 | 3,384 |
Insurance receivable | 2,400 | |
Inventories, net | 5,020 | 3,678 |
Prepaid expenses and other current assets | 2,204 | 1,995 |
Current assets of discontinued operations | 51,378 | 37,667 |
Total current assets | 68,309 | 46,924 |
Property, plant and equipment, net | 761 | 878 |
Deferred income taxes | 4,041 | 2,837 |
Other assets | 2,826 | 3,098 |
Intangible assets, net | 103 | 124 |
Goodwill | 2,969 | 2,969 |
Assets of discontinued operations | 15,681 | |
Total assets | 79,009 | 72,511 |
Current liabilities | ||
Bank overdrafts | 885 | 78 |
Revolving credit facilities | 20,982 | 20,755 |
Accounts payable and accrued liabilities | 12,074 | 8,951 |
Current maturities of long-term debt | 3,196 | 1,174 |
Income taxes payable | 102 | 95 |
Current liabilities of discontinued operations | 23,819 | 21,362 |
Total current liabilities | 61,058 | 52,415 |
Long-term debt, net of current maturities | 2,619 | |
Other long-term liabilities | 1,275 | 1,599 |
Deferred income taxes | 2,920 | 1,592 |
Long-term liabilities of discontinued operations | 2,335 | |
Total liabilities | 65,253 | 60,560 |
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 June 30, 2019 and December 31, 2018 | 9 | 9 |
Additional paid-in capital | 23,974 | 23,966 |
Accumulated other comprehensive loss | (5,725) | (5,897) |
Accumulated deficit | (4,502) | (6,127) |
Total stockholders' equity | 13,756 | 11,951 |
Total liabilities and stockholders' equity | $ 79,009 | $ 72,511 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
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 | 8,726,045 |
Common stock, outstanding | 8,726,045 | 8,726,045 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||
Net income (loss) | $ 1,625 | $ (1,370) |
Depreciation | 413 | 616 |
Amortization of intangible assets | 106 | 749 |
Amortization of right-of-use assets | 285 | 265 |
Amortization of debt issuance cost | 14 | 53 |
Deferred income tax expense (benefit) | 184 | (313) |
Change in receivable reserves | (55) | (413) |
Change in inventory reserves | 143 | 182 |
Inventory write off from flood damage | 3,313 | |
Gain on sale of subsidiary | (4,207) | |
Unrealized gain on short term investments | 285 | |
Accrued pension | (1) | |
Stock-based compensation | 7 | 146 |
Other | 10 | |
Foreign currency remeasurement loss | 50 | |
Changes in current operating assets and liabilities: | ||
Accounts receivable | (1,707) | (1,135) |
Inventories | (974) | (4,517) |
Insurance receivable | (2,400) | |
Prepaid expenses and other assets | (284) | (1,677) |
Income taxes | 433 | (120) |
Accounts payable and accrued liabilities | 4,226 | 5,860 |
Net cash provided by (used in) operating activities | 1,407 | (1,615) |
Investing activities | ||
Additions to property, plant and equipment | (122) | (188) |
Net cash used in investing activities | (122) | (188) |
Financing activities | ||
Bank overdrafts | (144) | 1,301 |
Short term borrowings | 6,507 | |
Borrowing under debt agreement | 13,714 | 7,922 |
Repayment of debt | (14,098) | (13,785) |
Payment of debt issuance cost | (28) | |
Principal repayments of financing leases | (244) | (248) |
Net cash (used)/provided by financing activities | (772) | 1,669 |
Increase in cash and cash equivalents | 513 | (134) |
Effect of foreign exchange on cash and cash equivalents | (223) | 231 |
Cash and cash equivalents | ||
Beginning of period | 200 | 218 |
End of period | $ 490 | $ 315 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated other comprehensive income (loss) [Member] | Accumulated deficit [Member] | Total |
Balance Beginning at Dec. 31, 2017 | $ 9 | $ 23,801 | $ (5,798) | $ (463) | $ 17,549 |
Balance Beginning (in shares) at Dec. 31, 2017 | 8,726,045 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (1,370) | (1,370) | |||
Stock-based compensation | 146 | 146 | |||
Foreign currency translation adjustment | (167) | (167) | |||
Pension adjustment, net of taxes | (16) | (16) | |||
Balance Ending at Jun. 30, 2018 | $ 9 | 23,947 | (5,981) | (1,833) | $ 16,142 |
Balance Ending (in shares) at Jun. 30, 2018 | 8,726,045 | 8,726,045 | |||
Balance Beginning at Dec. 31, 2018 | $ 9 | 23,966 | (5,897) | (6,127) | $ 11,951 |
Balance Beginning (in shares) at Dec. 31, 2018 | 8,726,045 | 8,726,045 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 1,625 | $ 1,625 | |||
Stock-based compensation | 7 | 7 | |||
Foreign currency translation adjustment | 62 | 62 | |||
Pension adjustment, net of taxes | 110 | 110 | |||
Balance Ending at Jun. 30, 2019 | $ 9 | $ 23,974 | $ (5,725) | $ (4,502) | $ 13,756 |
Balance Ending (in shares) at Jun. 30, 2019 | 8,726,045 | 8,726,045 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
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 five (5) additional locations in the U.S. 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, 2018, as filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2019: Transmission and Distribution Solutions (“T&D Solutions”) and Critical Power Solutions (“Critical Power”). Recent Developments On June 28, 2019, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”), by and among the Company, Electrogroup Canada, Inc., a wholly owned subsidiary of the Company (“Electrogroup”), Jefferson Electric, Inc., a wholly owned subsidiary of the Company (“Jefferson”), JE Mexican Holdings, Inc., a wholly owned subsidiary of the Company (“JE Mexico,” and together with Electrogroup and Jefferson, the “Disposed Companies”), Nathan Mazurek, Pioneer Transformers L.P. (the “US Buyer”) and Pioneer Acquireco ULC (the “Canadian Buyer,” and together with the US Buyer, the “Buyer”). Pursuant to the terms of the Stock Purchase Agreement, the Company agreed to sell (i) all of the issued and outstanding equity interests of Electrogroup to the Canadian Buyer and (ii) all of the issued and outstanding equity interests of Jefferson and JE Mexico to the US Buyer (the “Equity Transaction”), for an aggregate base cash purchase price of $60.5 million, as well as the issuance by the Buyer of a subordinated promissory note to the Company in the aggregate principal amount of $7.5 million, in each case subject to certain adjustments. If the Equity Transaction is completed, Pioneer Power would sell to the Buyer all of the assets and liabilities associated with its liquid-filled transformer and dry-type transformer manufacturing businesses within the Company’s Transmission & Distribution Solutions segment (the “T&D Segment”). However, Pioneer Power would retain its switchgear manufacturing business within the T&D segment, as well as all of the operations associated with its critical power solutions segment. On June 28, 2019, certain stockholders of the Company holding an aggregate of 4,774,400 shares of the Company’s common stock, which, as of such date, constituted approximately 54.7% of the voting power of the outstanding shares of the Company’s common stock, executed a written consent approving the Stock Purchase Agreement and the transactions contemplated thereby, including the Equity Transaction. 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 June 30, 2019. 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. Operating results of liquid-filled and dry-type transformer manufacturing businesses have been previously included in the T&D Segment, which have now been reclassified as discontinued operations for all periods presented. See Note 6 – Discontinued Operations in Notes to Consolidated Financial Statements in Part I of this Form 10-Q. Unless noted otherwise, discussions in these notes pertain to our continuing operations. These unaudited consolidated financial statements should be read in conjunction with the risk factors under the heading “Part II – Item 1A. Risk Factors” and 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, 2018. Liquidity The accompanying financial statements have been prepared on a basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements as of the six months ended June 30, 2019, the Company has an accumulated deficit of $4.8 million, and has working capital of $6.8 million. As of June 30, 2019, we had total debt of $25.1 million and $490 of cash and cash equivalents on hand. We have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings under our revolving credit facilities. Our cash requirements are generally for operating activities, debt repayment, capital improvements and acquisitions. As further discussed in Note 11 - Debt in Part I of this Form 10-Q our credit facilities’ maturity dates have been extended until April 1, 2020. The financial statements included in this quarterly report have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with our lender will remain available to us and will not need to be replaced. Management believes that its capital resources are adequate to fund operations through the first quarter of 2020, but the availability of the Company’s capital resources is dependent on the Company’s ability to meet the working capital obligations pursuant to the credit agreements with Bank of Montreal (“BMO”), its lender. The Company has certain credit arrangements with BMO that contain subjective acceleration clauses, and the Company has had several instances of non-compliance with certain of the covenants included in such credit agreements. Management has historically been able to obtain from BMO waivers of any non-compliance and management expects to be able to continue to obtain necessary waivers in the event of future non-compliance; however, there can be no assurance that the Company will be able to obtain such waivers, and should BMO refuse to provide a waiver in the future, the outstanding debt under the credit facilities could become due immediately. Additionally, the term of the Company’s agreement with BMO ends in April 2020. Concurrently with the closing of the Equity Transaction, all existing credit facilities granted by Bank of Montreal (BMO) under the Canadian Facilities (as defined below) and the U.S. Facilities (as defined below) will be repaid in full. The operations of the Company are subject to certain risks and uncertainties, including, among others, uncertainty of commercial manufacturing at acceptable margins, marketing or sales acceptance, and dependence on key personnel. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
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, 2018. There have been no significant changes in the Company’s accounting policies during this fiscal quarter of 2019. Recent Accounting Pronouncements There have been no recent accounting pronouncements not yet adopted by the Company which would have a material impact on the Company’s financial statements. Leases. Leases (Topic 842) Stock Compensation. Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Fair Value Measurement. Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement Disclosure Requirements for Defined Benefit Plans. Measurement of Credit Losses on Financial Instrument. Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
DIVESTITURES
DIVESTITURES | 6 Months Ended |
Jun. 30, 2019 | |
Number of promissory notes | |
DIVESTITURES | 3. DIVESTITURES On January 22, 2019, Pioneer Critical Power, Inc., a Delaware corporation (“PCPI”), a wholly-owned subsidiary of the Company within Transmission and Distribution segment, CleanSpark and CleanSpark Acquisition, Inc., a Delaware corporation (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, among other things, Merger Sub merged with and into PCPI, with PCPI becoming a wholly-owned subsidiary of the CleanSpark and the surviving company of the merger (the “Merger”). At the effective date of the Merger, all of the issued and outstanding shares of common stock of PCPI, par value $0.01 per share, were converted into the right to receive (i) 1,750,000 shares of common stock, par value $0.001 per share (“Common Stock”), of CleanSpark, (ii) a five-year warrant to purchase 500,000 shares of Common Stock at an exercise price of $1.60 per share, and (iii) a five-year warrant to purchase 500,000 shares of Common Stock at an exercise price of $2.00 per share. The Merger Agreement also contains representations, warranties and covenants of the parties customary for transactions similar to those contemplated by the Merger Agreement. Such representations and warranties are made solely for purposes of the Merger Agreement and, in some cases, may be subject to qualifications and limitations agreed to by the parties in connection with the negotiated terms of the Merger Agreement and may have been qualified by disclosures that were made in connection with the parties’ entry into the Merger Agreement. In connection with the Merger Agreement, the Company, CleanSpark and PCPI entered into an Indemnity Agreement (the “Indemnity Agreement”), dated January 22, 2019, pursuant to which the Company agreed to assume the liabilities and obligations related to the claims made by Myers Powers Products, Inc. in the case titled Myers Power Products, Inc. v. Pioneer Power Solutions, Inc., Pioneer Custom Electrical Products, Corp., et al. In connection with entry into the Merger Agreement, the Company and CleanSpark entered into a Contract Manufacturing Agreement (the “Contract Manufacturing Agreement”), dated as of January 22, 2019, pursuant to which the Company will manufacture paralleling switchgear, automatic transfer switches and related control and circuit protective equipment (collectively, “Products”) exclusively for purchase by CleanSpark. CleanSpark will purchase the Products via purchase orders issued to the Company at any time and from time to time. The price for the Products payable by CleanSpark to the Company will be negotiated on a case by case basis, but all purchases of Products will have a target price of 91% of the CleanSpark customer’s purchase order price and will not be more than 109% of the Company’s cost. The Contract Manufacturing Agreement has a term of 18 months and may be extended by mutual agreement of the Company and CleanSpark. In connection with entry into the Merger Agreement, the Company and CleanSpark entered into a Non-Competition and Non-Solicitation Agreement (the “Non-Compete Agreement”), dated January 22, 2019, pursuant to which the Company agreed not to, among other things, own, manage, operate, finance, control, advise, render services to or guarantee the obligations of any person or entity that engages in or plans to engage in the design, manufacture, distribution and service of paralleling switchgear, automatic transfer switches, and related products (the “Restricted Business”). The Company agreed not to engage in the Restricted Business within any state or county within the United States in which CleanSpark or the surviving company of the Merger conducts such Restricted Business for a period of four (4) years from the date of the Non-Compete Agreement. In addition, the Company also agreed, for a period of four (4) years from the date of the Non-Compete Agreement, not to, among other things, directly or indirectly (i) solicit, induce, or attempt to induce customers, suppliers, licensees, licensors, franchisees, consultants of the Restricted Business as conducted by the Company, CleanSpark or the surviving company to cease doing business with the surviving company or CleanSpark or (ii) solicit, recruit, or encourage any of the surviving company’s or CleanSpark’s employees, or independent contractors to discontinue their employment or engagement with the surviving company or CleanSpark. The Merger resulted in the deconsolidation of PCPI and a gain of $4.2 million in the first quarter of 2019. The fair value of the investment in the common stock of CleanSpark was determined using quoted market prices and warrants were established using a Black Scholes model. From the date of sale through June 30, 2019, the estimated fair value of the warrants and common stock decreased to $3.9 million and an unrealized mark to market loss of $325 was recognized within other expense for the six months ended June 30, 2019. For the three months ended June 30, 2019, the unrealized mark to market loss recognized within other expense was $3.7 million. |
REVENUES
REVENUES | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | 4. REVENUES On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. Financial Statement Impact of Adopting ASC 606 The Company adopted ASC 606 using the modified retrospective method. There was no adjustment to opening retained earnings due to the impact of adopting Topic 606. Nature of our products and services Our principal products and services include custom-engineered engine-generator sets and controls, complemented by a national field-service network to maintain and repair power generation assets. Products We provide switchgear that help customers effectively and efficiently manage their electrical power distribution systems to desired specifications. We provide customers with an advanced data collection and monitoring platform for power generation equipment which is used to ensure smooth, uninterrupted power to operations during times of emergency. Services Power generation systems represent considerable investments that require proper maintenance and service in order to operate reliably during a time of emergency. Our power maintenance programs provide preventative maintenance, repair and support service for our customers’ power generation systems. Our principal source of revenue is derived from sales of products and fees for services. We measure revenue based upon the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. Customers typically receive the benefit of our products when the risk of loss or control for the product transfers to the customer and for services as they are performed. Under ASC 606, revenue is recognized when a customer obtains control of promised products or services in an amount that reflects the consideration we expect to receive in exchange for those products or services. To achieve this core principal, the Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products or services to be transferred and identifies the payment terms related to these products or services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for products or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products or services, the Company must apply judgment to determine whether promised products or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised products or services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The customer payments are generally due in 30 days. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis or cost of the product or service. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. Substantially all of our revenue is recognized at a point of time, as the promised product passes to the customer. Service revenues include maintenance contracts that are recognized over time based on the contract term and repair services which are recognized as services are delivered. The following table presents our revenues disaggregated by revenue discipline: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Products $ 3,004 $ 1,285 $ 4,249 $ 5,362 Services 2,356 2,592 4,129 4,760 Total Revenue $ 5,360 $ 3,877 $ 8,378 $ 10,122 See Note 15 - Business Segment and Geographic Information in Notes to Consolidated Financial Statements in Part I of this Form 10-Q. |
OTHER EXPENSE
OTHER EXPENSE | 6 Months Ended |
Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | |
OTHER EXPENSE | 5. OTHER EXPENSE Other expense in the consolidated statements of operations reports certain gains and losses associated with activities not directly related to our core operations. For the three months ended June 30, 2019, other non-operating expense was $3.8 million, as compared to $212 during the three months ended June 30, 2018. For the three months ended June 30, 2019, included in other non-operating expense was a loss of $3.7 million related to the mark to market adjustment on the fair value of common stock and warrants received in connection with the Merger of PCPI, CleanSpark and the Merger Sub. See Note 3 - Divestitures. For the six months ended June 30, 2019, other non-operating expense was $465, as compared to $349 during the six months ended June 30, 2018. For the six months ended June 30, 2019, included in other non-operating expense was a loss of $325 related to the mark to market adjustment on the fair value of common stock and warrants received in connection with the Merger of PCPI, CleanSpark and the Merger Sub. See Note 3 - Divestitures. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | 6. DISCONTINUED OPERATIONS A discontinued operation is a component of the Company’s business that represents a separate major line of business that had been disposed of or is held for sale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative Consolidated Statement of Operations, Consolidated Statement of Cash Flows, and Consolidated Balance Sheets are presented as if the operation had been discontinued from the start of the comparative year. Based upon the authoritative guidance, the Company concluded that the operations of the liquid-filled and dry-type transformer business should be presented as discontinued operations as of June 30, 2019. Overview On June 28, 2019, the Company entered into the Stock Purchase Agreement, by and among the Company, the Disposed Companies, Nathan Mazurek, and the Buyer. Pursuant to the terms of the Stock Purchase Agreement, the Company agreed to sell (i) all of the issued and outstanding equity interests of Electrogroup to the Canadian Buyer and (ii) all of the issued and outstanding equity interests of Jefferson and JE Mexico to the US Buyer. If the Equity Transaction is completed, Pioneer Power would sell to the Buyer all of the assets and liabilities associated with its liquid-filled transformer and dry-type transformer manufacturing businesses within the Company’s T&D Segment. However, Pioneer Power would retain its switchgear manufacturing business within the T&D segment, as well as all of the operations associated with its critical power solutions segment. Consideration The consideration payable by the Buyer in the Equity Transaction is a base cash purchase price of $60.5 million, as well as the issuance by the Buyer of a subordinated promissory note to Pioneer Power in the aggregate principal amount of $7.5 million (the “Seller Note”), in each case subject to adjustment pursuant to the terms of the Stock Purchase Agreement. Pursuant to the terms of the Stock Purchase Agreement, the Seller Note will bear interest at an annualized rate of 4.0%, to be paid-in-kind annually, and will have a maturity date of December 31, 2022. In addition, pursuant to the terms of the Stock Purchase Agreement, the Buyer will have the right to set-off amounts owed to Pioneer Power under the Seller Note on a dollar-for-dollar basis by the amount of any indemnifiable losses Buyer suffers as a result of certain actions or omissions by Pioneer Power or the Disposed Companies. Covenants The Company has agreed, subject to the terms of the Stock Purchase Agreement, to various covenants and agreements, including, among others, to conduct the business of the Disposed Companies in the ordinary course during the period between the execution of the Stock Purchase Agreement and the closing of the Equity Transaction in a manner consistent with past practice. The parties have also agreed to use their respective best efforts to take, or cause to be taken, all things necessary, proper or advisable to consummate the transactions contemplated by the Stock Purchase Agreement. In addition, pursuant to the Stock Purchase Agreement, each of Pioneer Power, its affiliates and Nathan Mazurek, Pioneer Power’s President, Chief Executive Officer and Chairman of the Board of Directors, have agreed to a non-solicitation provision that generally prohibits such persons, for a three-year period, from, among other things, soliciting or attempting to hire employees of the Disposed Companies or the Buyer or engaging in the business operated by the Disposed Companies within certain geographic areas, subject to certain limitations and exceptions. Closing Conditions Each party’s obligation to consummate the Stock Purchase Agreement is subject to certain conditions, including, among others: (i) approval of the Stock Purchase Agreement by the holders of a majority of Pioneer Power’s outstanding common stock, which such approval was obtained by the written consent of certain Pioneer Power stockholders on June 28, 2019 (as discussed in more detail below), (ii) 20 days having elapsed since the mailing to the stockholders of the Company of the definitive information statement with respect to the approval and adoption of the Stock Purchase Agreement and (iii) the absence of any order or legal requirement issued or enacted by any court or other governmental authority preventing consummation of the Equity Transaction. In addition, the consummation of the Equity Transaction is subject to a financing condition. Certain lenders have entered into a debt financing commitment letter with the Buyer, and Mill Point Capital LLC entered into an equity commitment letter with the Buyer, in each case committing to provide the Buyer with funding to pay the aggregate consideration to be paid by the Buyer in connection with the Equity Transaction. The Buyer is not obligated to consummate the Equity Transaction unless it receives debt financing on substantially the terms provided for in the debt financing commitment letter or the Buyer is able to obtain alternative financing in amount sufficient to consummate the Equity Transaction. If the Stock Purchase Agreement is terminated by the Buyer after all mutual conditions to closing have been satisfied, except that the Buyer has not obtained sufficient financing to consummate the Equity Transaction, the Buyer would be required to pay a $4.0 million reverse termination fee to Pioneer Power, subject to certain limitations set forth in the Stock Purchase Agreement. The reverse termination fee would also be payable by the Buyer in certain other limited circumstances described in the Stock Purchase Agreement Termination Fee If the Stock Purchase Agreement were to be terminated in connection with or as a result of Pioneer Power’s adoption of a Superior Proposal or entry into an Alternative Acquisition Agreement (as defined in the Stock Purchase Agreement), Pioneer Power would be required to pay a $4.0 million termination fee to the Buyer, subject to certain limitations set forth in the Stock Purchase Agreement. The termination fee would also be payable by Pioneer Power in certain other limited circumstances described in the Stock Purchase Agreement. Indemnification Pursuant to the Stock Purchase Agreement, Pioneer Power and the Buyer have each agreed to indemnify one another for any and all liabilities, losses, damages, claims, demands, suits, actions, judgments, fines, penalties, deficiencies, awards, taxes, assessments, costs or expenses (including reasonable attorney’s or other professional fees and expenses) (“Losses”) resulting from any inaccuracy or breach of the respective party’s representations and warranties or any breach or nonperformance of the respective party’s covenants and agreements in the Stock Purchase Agreement or its related ancillary agreements. In addition, Pioneer Power has agreed to indemnify the Buyer and its affiliated parties for Losses resulting from, among other things, certain pre-closing tax matters, debt held by the Disposed Companies, transaction expenses, breaches of representations and warranties that are not covered by the Buyer’s representation and warranty insurance because the Buyer had knowledge of such breach (only to the extent such Losses would have been covered by the representation and warranty insurance had the Buyer not known of such breach) (“Interim Breaches”), certain matters related to Electrogroup’s operations, certain legal proceedings, certain matters related to Nexus Custom Magnetics, L.L.C., a wholly owned subsidiary of Jefferson, and certain matters concerning end-user software utilized by the Disposed Companies. The indemnification obligations of Pioneer Power with respect to Losses of the Buyer resulting from inaccuracies or breaches of the Company’s representations and warranties, except for breaches of certain fundamental warranties, claims of fraud and breaches of representations, warranties or covenants relating to taxes, and claims for certain specific indemnities, are subject to (i) a true deductible equal to $330,000, (ii) a cap equal to 0.5% of the purchase price, and (iii) a per-claim threshold amount of $50,000. In addition, the indemnification rights of the Buyer with respect to Interim Breaches are subject to a cap equal to $5.0 million, and the indemnification rights of the Buyer with respect to Losses resulting from certain matters related to Electrogroup’s operations are subject to a true deductible equal to $500,000 and a cap equal to $5.0 million. The indemnification obligations of the Buyer, except with respect to breaches of certain fundamental representations and warranties and claims of fraud, are subject to a true deductible equal to $330,000 and a cap equal to $3.3 million. In addition, each party’s total indemnification obligation is subject to a cap equal to the purchase price, except for claims of fraud. The Buyer has obtained a customary representation and warranty insurance policy insuring the Buyer against losses resulting from a breach of representations and warranties by Pioneer Power and the Disposed Companies, and the Buyer is required to use commercially reasonable efforts to utilize the representation and warranty insurance to cover any Losses resulting from such a breach. In addition, in rather than seeking recovery from Pioneer Power, the Buyer is required to setoff amounts owed to Pioneer Power under the Seller Note on a dollar-for-dollar basis by the amount of any indemnifiable losses Buyer suffers as a result of certain actions or omissions by Pioneer Power or the Disposed Companies. Other Provisions The Stock Purchase Agreement also contains customary representations and warranties, certain termination rights of both parties, including termination by mutual written consent of the parties, and provisions governing certain other matters between the parties. The foregoing description of the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, a copy of which is filed as Exhibit 2.1 on Form 8-K filed with the Security and Exchange Commission on July 1, 2019 and is incorporated by reference herein. Operating results of liquid-filled and dry-type transformer manufacturing businesses previously included in the T&D Segment, have now been reclassified as discontinued operations for all periods presented. The components of assets and liabilities that are attributable to discontinued operations are as follows (in thousands): June 30, December 31, 2019 2018 Assets of discontinued operations: Cash and cash equivalents $ 6 $ 11 Accounts receivable - trade, net 15,397 12,944 Inventories, net 20,131 23,632 Income taxes receivable — 566 Prepaid expenses 604 514 Property, plant and equipment, net 4,300 4,406 Right of use asset 1,928 2,124 Deferred income taxes 78 134 Intangible assets, net 3,377 3,460 Goodwill 5,557 5,557 Assets of discontinued operations $ 51,378 $ 53,348 Liabilities of discontinued operations: Bank overdrafts $ 793 $ 1,690 Accounts payable and accrued liabilities 20,278 18,894 Income taxes payable 655 778 Pension deficit 3 148 Other long-term liabilities 2,090 2,187 Liabilities of discontinued operations $ 23,819 $ 23,697 During the quarter ended June 30, 2019 the Company’s Reynosa Facility was damaged by a flood resulting in damages to inventory. While management continues to evaluate the extent of the damaged inventory, as of June 30, 2019 the Company has recognized a loss of $3.3 million based upon an estimate of inventory damaged and unsalable as a result of the flood. This loss has been partially offset by $2.4 million of insurance proceeds that the Company expects to receive. While the net loss on inventory damaged amounting to approximately $913 has been reflected within the Cost of goods sold in discontinued operations, the corresponding insurance receivable of $2.4 million has been recognized as an asset from continuing operations. The amount of damaged inventory and insurance proceeds are based upon the management’s best estimate, and the actual amount of damaged inventory and insurance proceeds may differ from such estimates. The following table presents the discontinued operations of the liquid-filled and dry-type transformer manufacturing businesses in the Consolidated Statement of Operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues $ 19,003 $ 21,599 $ 40,684 $ 42,530 Costs and Expenses Cost of goods sold 16,047 16,874 33,886 33,749 Selling, general and administrative 2,275 2,832 4,715 5,395 Foreign exchange loss (gain) 143 197 (491 ) 272 Interest expense 275 520 550 948 Other expense (income) — (1 ) 48 96 Total costs and expenses 18,740 20,422 38,708 40,460 Income before provision for income taxes 263 1,177 1,976 2,070 Income tax expense 131 315 533 476 Income from discontinued operations, net of income taxes $ 132 $ 862 $ 1,443 $ 1,594 The following table presents the discontinued operations of the liquid-filled and dry-type transformer manufacturing businesses in the Consolidated Statements of Cash Flows (in thousands): Six Months Ended June 30, 2019 2018 Net cash provided by operating activities $ 2,793 $ 1,580 Net cash used in investing activities (97 ) (57 ) Net cash used in financing activities (2,607 ) (1,685 ) Effect of foreign exchange on cash and cash equivalents (94 ) 152 Increase in cash and cash equivalents $ (5 ) $ (10 ) |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 7. INVENTORIES The components of inventories are summarized below: June 30, December 31, 2019 2018 Raw materials $ 2,138 $ 2,049 Work in process 3,377 1,949 Finished goods (88 ) 46 Provision for excess and obsolete inventory (407 ) (366 ) Total inventories $ 5,020 $ 3,678 Inventories are stated at the lower of cost or a net realizable value determined on a FIFO method. Included in raw materials and finished goods at June 30, 2019 and December 31, 2018 are goods in transit of approximately $36 and $120, respectively. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | 8. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are summarized below: June 30, December 31, 2019 2018 Machinery and equipment $ 1,219 $ 1,219 Furniture and fixtures 205 205 Computer hardware and software 682 682 Leasehold improvements 337 312 2,443 2,418 Less: Accumulated depreciation (1,682 ) (1,540 ) Total property, plant and equipment, net $ 761 $ 878 Depreciation expense was $142 and $106 for the period ended June 30, 2019 and 2018, respectively. |
OTHER ASSETS
OTHER ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | |
OTHER ASSETS | 9. OTHER ASSETS Included in other assets at June 30, 2019 and December 31, 2018 are right-of-use asset, net, of $1.9 million and $2.2 million, respectively, related to our lease obligations. In December 2011 and January 2012, the Company made two secured loans, each in the amount of $300 to a developer of a renewable energy project in the U.S, secured by assets of the developer. 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 June 30, 2019 and December 31, 2018. The Company expects to fully recover these amounts. As of June 30, 2019 the Company has classified the principal of $600 as other assets as the Company does not anticipate the settlement of both notes in the next twelve months based upon ongoing negotiations with the debtor. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. GOODWILL AND OTHER INTANGIBLE ASSETS There were no changes in the carrying values of goodwill for the six months ended June 30, 2019. T&D Critical Power Solutions Solutions Total Segment Segment Goodwill Gross Goodwill: Balance as of January 1, 2019 $ — $ 2,969 $ 2,969 No activity — — — Balance as of June 30, 2019 $ — $ 2,969 $ 2,969 Changes in the carrying values of intangible assets for the six months ended June 30, 2019, were as follows: T&D Critical Power Total Solutions Solutions Intangible Segment Segment Assets Balance as of January 1, 2019, net $ — $ 124 $ 124 Amortization — (21 ) (21 ) Balance as of June 30, 2019, net $ — $ 103 $ 103 The components of intangible assets as of June 30, 2019 are summarized below: Weighted Average Amortization Years Gross Carrying Amount Accumulated Amortization Net Book Value Internally developed software 7 $ 289 $ (186 ) $ 103 Total intangible assets $ 289 $ (186 ) $ 103 The amortization of intangible assets expense was $21 for the six months ended June 30, 2019. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | 11. DEBT Canadian Credit Facilities In April 2016, our wholly owned subsidiary, Pioneer Electrogroup Canada Inc. (“PECI”), entered into an Amended and Restated Credit Agreement (“CAD ARCA”) with Bank of Montreal (“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. The CAD ARCA was further amended (the “2017 CAD ARCA Amendment”) on March 15, 2017, and again on March 28, 2018 (the “2018 CAD ARCA Amendment”). The 2018 CAD ARCA Amendment extended the term of our Canadian Facilities to April 1, 2020. On August 8, 2019, BMO agreed to a Temporary Borrowing Base Increase (defined in Note 17 - Subsequent Events), until the earlier of the (i) closing of the Equity Transaction and repayment in full of all amounts owned under the Canadian Facilities and the U.S. Facilities, and (ii) August 31, 2019. Our Canadian Facilities provided for up to $8.2 million Canadian dollars (“CAD”) (approximately $6.3 million expressed in U.S. dollars) consisting of a revolving $7.0 million CAD revolving credit facility (“Facility A”) to finance ongoing operations, a $471 CAD term credit facility (“Facility B”) that financed a plant expansion, and a $712 USD Facility 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 $9.2 million CAD. Facility A, as amended by the 2017 CAD ARCA Amendment and the 2018 CAD ARCA Amendment, is subject to margin criteria. Facility A, as amended by the 2017 CAD ARCA Amendment, bore interest at BMO’s prime rate plus 0.75% per annum on amounts borrowed in Canadian dollars, or BMO’s U.S. base rate plus 0.75% per annum or LIBOR plus 2.25% per annum on amounts borrowed in U.S. dollars. The 2018 CAD ARCA Amendment modified the interest rate on Facility A borrowings to BMO’s prime rate plus 0.50% per annum on amounts borrowed in Canadian dollars, or BMO’s U.S. base rate plus 0.50% per annum or LIBOR plus 2.0% per annum on amounts borrowed in U.S. dollars. Pursuant to the 2017 CAD ARCA Amendment, Facility A was to mature on July 31, 2018. The 2018 CAD ARCA Amendment extended the maturity of borrowings under Facility A to April 1, 2020. Consistent with the terms of the historical Facility A, including both a subjective acceleration clause and lockbox arrangement, will continue to be presented as a current liability. We believe based upon historical experience, that Facility A will remain in place to fund operations through maturity of this facility in April 2020. Borrowings under Facility B, as amended by the 2017 CAD ARCA Amendment, bore 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 was to continue after July 31, 2017 until our borrowings under the facility is fully paid on April 30, 2018. The 2018 CAD ARCA Amendment did not modify the interest rate on Facility B borrowings, which remained at BMO’s prime rate plus 1.25% per annum. Pursuant to the 2018 CAD ARCA Amendment, we made the final principal payment of $47 under Facility B on April 30, 2018. Borrowings under Facility C, as amended by the 2017 CAD ARCA, bore interest at BMO’s prime rate plus 1.50% per annum on amounts borrowed in Canadian dollars, or BMO’s 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 were 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 were to continue until July 31, 2018, with a balloon payment of $352 due on July 31, 2018. Pursuant to the 2018 CAD ARCA Amendment, quarterly principal repayments of $36 were to continue until January 31, 2020, with a balloon payment of $136 due on April 1, 2020. The 2018 CAD ARCA Amendment modified the interest rate on Facility C borrowings to BMO’s prime rate plus 1.25% per annum on amounts borrowed in Canadian dollars, or BMO’s U.S. base rate plus 1.25% per annum or LIBOR plus 2.50% per annum on amounts borrowed in U.S. dollars. In December 2018 we repaid the outstanding principal balance under Facility C of $316 CAD with proceeds received from the sale of the Farnham, Quebec, Canada building. Pursuant to the CAD ARCA, as amended by the 2017 CAD ARCA Amendment and the 2018 CAD ARCA Amendment, financial covenant testing is performed on our consolidated financial statements. We are required to meet certain minimum working capital ratios, minimum EBITDA levels and effective tangible net worth levels for each fiscal quarter, as set forth in the 2017 CAD ARCA Amendment and the 2018 CAD ARCA Amendment. As of June 30, 2019, we had approximately $6.0 million in U.S. dollar equivalents outstanding under our Canadian Facilities. Our borrowings consisted of approximately $6.0 million outstanding under Facility A. As of June 30, 2019, the Company was not in compliance with a financial covenant and on August 8, 2019, the Company received a waiver from BMO on the financial covenant breach existing as of June 30, 2019. Concurrently with the closing of the Equity Transaction, all existing credit facilities granted by BMO under the Canadian Facilities and the U.S. Facilities will be repaid in full. As of December 31, 2018, we had approximately $5.8 million in U.S. dollar equivalents outstanding under our Canadian Facilities. Our borrowings consisted of approximately $5.8 million outstanding under Facility A. As of December 31, 2018, the Company was not in compliance with its financial covenants and on March 25, 2019, the Company received a waiver from BMO on all financial covenant breaches existing as of December 31, 2018. United States Credit Facilities In April 2016, we entered into an Amended and Restated Credit Agreement (“US ARCA”) with BMO with respect to our existing U.S. facilities that replaced and superseded all of our businesses’ prior financing arrangements with the bank (the “U.S. Facilities”).The US ARCA was further amended (the “2017 US ARCA Amendment”) on March 15, 2017, and again on March 28, 2018 (the “2018 US ARCA Amendment”). The 2018 US ARCA Amendment extended the term of our US Facilities to April 1, 2020. Our U.S. Facilities, as amended and restated, provided for up to $19.1 million USD consisting of a $14.0 million USD demand revolving credit facility (“USD Facility A”) to finance ongoing operations, a $5.0 million USD term loan facility (“USD Facility B”) that financed the acquisition of Titan, and a new $100 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, as amended and restated per 2017 US ARCA, bore interest, at our option, at BMO’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. Pursuant to the 2018 US ARCA Amendment, borrowings under Facility A bears interest, at our option, at the BMO’s prime rate plus 0.75% per annum on U.S. prime rate loans, or an adjusted LIBOR rate plus 2.00% 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. The 2018 US ARCA Amendment extended the maturity of borrowings under USD Facility A to April 1, 2020. Consistent with the terms of the historical USD Facility A, including both a subjective acceleration clause and lockbox arrangement, will continue to be presented as a current liability. We believe based upon historical experience, that the USD Facility A will remain in place to fund operations through maturity in April 2020. 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 $4.4 million on July 31, 2018. Pursuant to the 2018 US ARCA Amendment, monthly principal repayments beginning on July 31, 2018 are increased to $100 and will continue until March 31, 2020, with a balloon payment of $2.3 million due on April 1, 2020. The 2018 US ARCA Amendment did not change the USD Facility B interest rate. Pursuant to the US ARCA, as amended by the 2017 US ARCA Amendment and the 2018 US ARCA Amendment, financial covenant testing is performed on our consolidated financial statements. We are required to meet certain minimum working capital ratios, minimum EBITDA levels and effective tangible net worth levels for each fiscal quarter, as set forth in the 2017 US ARCA Amendment and the 2018 US ARCA Amendment. On March 28, 2018, pursuant to the 2018 US ARCA Amendment, BMO waived defaults on all financial covenants existing as of December 31, 2017 for which we were not in compliance. 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 or agreements for the sale of any or all our assets. As of June 30, 2019, we had approximately $18.2 million outstanding under our U.S. Facilities. Our borrowings consisted of approximately $15.0 million outstanding under USD Facility A, and $3.2 million outstanding under USD Facility B. As of June 30, 2019, the Company was not in compliance with a financial covenant and on August 8, 2019, the Company received a waiver from BMO on the financial covenant breach existing as of June 30, 2019. Concurrently with the closing of the Equity Transaction, all existing credit facilities granted by BMO under the Canadian and the U.S. Facilities will be repaid in full. In the event that the Stock Purchase Agreement is terminated prior to closing of the Equity Transaction and if we receive the reverse termination fee as set forth therein, we are required to remit to BMO 50% of such reverse termination fee, which will be applied to permanently reduce the amounts outstanding under our USD Facility B. As of December 31, 2018, we had approximately $18.8 million outstanding under our U.S. Facilities. Our borrowings consisted of approximately $15.0 million outstanding under USD Facility A, and $3.8 million outstanding under USD Facility B. As of December 31, 2018, the Company was not in compliance with its financial covenants and on March 25, 2019, the Company received a waiver from BMO on all financial covenant breaches existing as of December 31, 2018. The Company’s debt consists of the following: June 30, December 31, 2019 2018 Term credit facilities $ 3,196 $ 3,793 Less current portion (3,196 ) (1,174 ) Total long-term debt $ — $ 2,619 (a) The balances as of June 30, 2019 and December 31, 2018 are net of debt issuance costs of $42 and $45, respectively. |
PENSION PLAN
PENSION PLAN | 6 Months Ended |
Jun. 30, 2019 | |
Defined Benefit Plan [Abstract] | |
PENSION PLAN | 12. 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 included in Income from discontinued operations, net of income taxes, in the Consolidated Statements of operations. The components of the expense the Company incurred under the pension plan are as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Current service cost, net of employee contributions $ 14 $ 14 $ 29 $ 31 Interest cost on accrued benefit obligation 26 25 52 50 Expected return on plan assets (42 ) (42 ) (82 ) (85 ) Amortization of transitional obligation 3 1 6 3 Amortization of past service costs 2 — 4 2 Amortization of net actuarial gain 11 14 24 28 Total cost of benefit $ 14 $ 12 $ 33 $ 29 The Company’s policy is to fund the pension plan at or above the minimum level required by law. The Company made $30 and $36 of contributions to its defined benefit pension plan during the six months ended June 30, 2019 and 2018, 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. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | 13. STOCKHOLDERS’ EQUITY Common Stock The Company had 8,726,045 shares of common stock, $0.001 par value per share, outstanding as of June 30, 2019 and December 31, 2018. Stock-Based Compensation A summary of stock option activity under the 2011 Long-Term Incentive Plan as of June 30, 2019, and changes during the six months ended June 30, 2019, are presented below: Stock Weighted average Weighted Aggregate Outstanding as of January 1, 2019 424,800 $ 8.30 6.5 $ 22 Granted — — Exercised — — Forfeited — — Outstanding as of June 30, 2019 424,800 $ 8.30 6.00 $ 14 Exercisable as of June 30, 2019 421,467 $ 8.31 6.00 $ 14 As of June 30, 2019, there were 248,867 shares available for future grants under the Company’s 2011 Long-Term Incentive Plan. Stock-based compensation expense recorded for the three and six months ended June 30, 2019 was approximately $2 and $7, respectively, as compared to the expense of approximately ($2) and $146, during the three and six months ended June 30, 2018, respectively. For the three and six months ended June 30, 2018, the expense reversal was primarily the result of forfeitures of previously expensed awards to a former employee. As of June 30, 2019, the Company had total stock-based compensation expense remaining to be recognized in the consolidated statements of operations of approximately $6. 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 unrealized gain of $374 for the three months ended June 30, 2019 and unrealized loss of $1 for the three months ended June 30, 2018. For the six months ended June 30, 2019 and 2018, the Company had foreign currency translation adjustments resulting in unrealized gain of $62 and unrealized loss of $167, respectively. |
BASIC AND DILUTED INCOME (LOSS)
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED LOSS PER COMMON SHARE | 14. BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE Basic and diluted income (loss) 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. The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except per share data): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net (loss) income $ (4,155 ) $ (1,658 ) $ 182 $ (2,964 ) Income from discontinued operations, net of income taxes 132 862 1,443 1,594 Net (loss) income $ (4,023 ) $ (796 ) $ 1,625 $ (1,370 ) Denominator: Weighted average basic shares outstanding 8,726 8,726 8,726 8,726 Effect of dilutive securities - equity based compensation plans — — 4 — Denominator for diluted net income per common share 8,726 8,726 8,730 8,726 (Loss) earnings per share: Basic (Loss) income from continuing operations $ (0.48 ) $ (0.19 ) $ 0.02 $ (0.34 ) Income from discontinued operations 0.02 0.10 0.17 0.18 Net (loss) income $ (0.46 ) $ (0.09 ) $ 0.19 $ (0.16 ) Diluted (Loss) income from continuing operations $ (0.48 ) $ (0.19 ) $ 0.02 $ (0.34 ) Income from discontinued operations 0.02 0.10 0.17 0.18 Net (loss) income $ (0.46 ) $ (0.09 ) $ 0.19 $ (0.16 ) |
BUSINESS SEGMENT AND GEOGRAPHIC
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION | 15. 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 T&D Solutions reportable segment is our switchgear business unit. The Critical Power reportable segment is the Company’s Titan Energy Systems Inc. business unit. The T&D Segment is involved in the design, manufacture and distribution of 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Revenues T&D Solutions Switchgear $ 2,737 $ 883 $ 3,810 $ 4,585 2,737 883 3,810 4,585 Critical Power Solutions Equipment 267 402 441 784 Service 2,356 2,592 4,127 4,753 2,623 2,994 4,568 5,537 Consolidated $ 5,360 $ 3,877 $ 8,378 $ 10,122 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Depreciation and Amortization T&D Solutions $ 37 $ 90 $ 71 $ 181 Critical Power Solutions 37 374 73 753 Unallocated Corporate Overhead Expenses 14 16 28 32 Consolidated $ 88 $ 480 $ 172 $ 966 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Operating Income (Loss) T&D Solutions $ (542 ) $ (719 ) $ (775 ) $ (565 ) Critical Power Solutions 252 (234 ) (148 ) (673 ) Unallocated Corporate Overhead Expenses (1,260 ) (605 ) (2,070 ) (1,459 ) Consolidated $ (1,550 ) $ (1,558 ) $ (2,993 ) $ (2,697 ) Revenues are attributable to countries based on the location of the Company’s customers: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Revenues United States $ 5,360 $ 3,877 $ 8,378 $ 10,122 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
LEASES | 16. LEASES The Company leases certain offices, facilities and equipment under operating and financing leases. Our leases have remaining terms of 1 year to 4 years. As of June 30, 2019 and 2018, assets recorded under finance leases were $1.0 million and $1.1 million, respectively, and accumulated amortization associated with finance leases were $475 and $397, respectively. As of June 30, 2019 and 2018, assets recorded under operating leases were $2.1 million and $1.5 million, respectively and accumulated amortization associated with operating leases were $748 and $531, respectively. Such amounts are included within other assets. The components of the lease expense were as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Operating lease cost $ 165 $ 135 $ 330 $ 269 Finance lease cost Amortization of right-of-use asset $ 61 $ 45 $ 135 $ 84 Interest on lease liabilities 13 10 27 18 Total finance lease cost $ 74 $ 55 $ 162 $ 102 Other information related to leases was as follows: Supplemental Cash Flows Information June 30, 2019 2018 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 334 $ 292 Operating cash flows from finance leases 27 18 Financing cash flows from finance leases 127 77 Right-of-use assets obtained in exchange for lease obligations: Operating leases 296 249 Finance leases 61 45 Weighted Average Remaining Lease Term June 30, 2019 2018 Operating leases 2 years 3 years Finance leases 2 years 2 years Weighted Average Discount Rate June 30, 2019 2018 Operating leases 5.50 % 5.50 % Finance leases 6.72 % 6.50 % Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as follows: Operating Finance Leases Leases 2019 $ 330 $ 168 2020 676 232 2021 401 280 2022 91 90 2023 — 37 Thereafter — — Total future minmum lease payments 1,498 807 Less imputed interest (97 ) (78 ) Total future minmum lease payments $ 1,401 $ 729 Reported as of June 30, 2019: Operating Finance Leases Leases Accounts payable and accrued liabilities $ 609 $ 246 Other long-term liabilities 792 483 Total $ 1,401 $ 729 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS On August 8, 2019, BMO agreed to a temporary amendment to the borrowing base under the Canadian Facilities, to increase the percentage of the outstanding unpaid amount of eligible receivables from 80% to 90%, up to a maximum of $1 million CAD of additional borrowing base (the “Temporary Borrowing Base Increase”), until the earlier of the (i) closing of the Equity Transaction and repayment in full of all amounts owned under the Canadian Facilities (as defined above) and the U.S. Facilities (as defined above), and (ii) August 31, 2019. In addition, in the event that the Stock Purchase Agreement is terminated prior to closing of the Equity Transaction and if we receive the reverse termination fee as set forth therein, we are required to remit to BMO 50% of such reverse termination fee, which will be applied to permanently reduce the amounts outstanding under our USD Facility B (as defined above). |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There have been no recent accounting pronouncements not yet adopted by the Company which would have a material impact on the Company’s financial statements. Leases. Leases (Topic 842) Stock Compensation. Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Fair Value Measurement. Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement Disclosure Requirements for Defined Benefit Plans. Measurement of Credit Losses on Financial Instrument. Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues disaggregated by revenue discipline | The following table presents our revenues disaggregated by revenue discipline: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Products $ 3,004 $ 1,285 $ 4,249 $ 5,362 Services 2,356 2,592 4,129 4,760 Total Revenue $ 5,360 $ 3,877 $ 8,378 $ 10,122 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of components of assets and liabilities that are attributable to discontinued operations | The components of assets and liabilities that are attributable to discontinued operations are as follows (in thousands): June 30, December 31, 2019 2018 Assets of discontinued operations: Cash and cash equivalents $ 6 $ 11 Accounts receivable - trade, net 15,397 12,944 Inventories, net 20,131 23,632 Income taxes receivable — 566 Prepaid expenses 604 514 Property, plant and equipment, net 4,300 4,406 Right of use asset 1,928 2,124 Deferred income taxes 78 134 Intangible assets, net 3,377 3,460 Goodwill 5,557 5,557 Assets of discontinued operations $ 51,378 $ 53,348 Liabilities of discontinued operations: Bank overdrafts $ 793 $ 1,690 Accounts payable and accrued liabilities 20,278 18,894 Income taxes payable 655 778 Pension deficit 3 148 Other long-term liabilities 2,090 2,187 Liabilities of discontinued operations $ 23,819 $ 23,697 |
Schedule of discontinued operations of the liquid-filled and dry-type transformer manufacturing businesses in the Consolidated Statement of Operations | The following table presents the discontinued operations of the liquid-filled and dry-type transformer manufacturing businesses in the Consolidated Statement of Operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues $ 19,003 $ 21,599 $ 40,684 $ 42,530 Costs and Expenses Cost of goods sold 16,047 16,874 33,886 33,749 Selling, general and administrative 2,275 2,832 4,715 5,395 Foreign exchange loss (gain) 143 197 (491 ) 272 Interest expense 275 520 550 948 Other expense (income) — (1 ) 48 96 Total costs and expenses 18,740 20,422 38,708 40,460 Income before provision for income taxes 263 1,177 1,976 2,070 Income tax expense 131 315 533 476 Income from discontinued operations, net of income taxes $ 132 $ 862 $ 1,443 $ 1,594 |
Schedule of discontinued operations of the liquid-filled and dry-type transformer manufacturing businesses in the Consolidated Statements of Cash Flows | The following table presents the discontinued operations of the liquid-filled and dry-type transformer manufacturing businesses in the Consolidated Statements of Cash Flows (in thousands): Six Months Ended June 30, 2019 2018 Net cash provided by operating activities $ 2,793 $ 1,580 Net cash used in investing activities (97 ) (57 ) Net cash used in financing activities (2,607 ) (1,685 ) Effect of foreign exchange on cash and cash equivalents (94 ) 152 Increase in cash and cash equivalents $ (5 ) $ (10 ) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of the components of inventories | The components of inventories are summarized below: June 30, December 31, 2019 2018 Raw materials $ 2,138 $ 2,049 Work in process 3,377 1,949 Finished goods (88 ) 46 Provision for excess and obsolete inventory (407 ) (366 ) Total inventories $ 5,020 $ 3,678 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Property, plant and equipment are summarized below: June 30, December 31, 2019 2018 Machinery and equipment $ 1,219 $ 1,219 Furniture and fixtures 205 205 Computer hardware and software 682 682 Leasehold improvements 337 312 2,443 2,418 Less: Accumulated depreciation (1,682 ) (1,540 ) Total property, plant and equipment, net $ 761 $ 878 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill by reportable segment | There were no changes in the carrying values of goodwill for the six months ended June 30, 2019. T&D Critical Power Solutions Solutions Total Segment Segment Goodwill Gross Goodwill: Balance as of January 1, 2019 $ — $ 2,969 $ 2,969 No activity — — — Balance as of June 30, 2019 $ — $ 2,969 $ 2,969 |
Schedule of changes in intangible asset balances | Changes in the carrying values of intangible assets for the six months ended June 30, 2019, were as follows: T&D Critical Power Total Solutions Solutions Intangible Segment Segment Assets Balance as of January 1, 2019, net $ — $ 124 $ 124 Amortization — (21 ) (21 ) Balance as of June 30, 2019, net $ — $ 103 $ 103 |
Schedule of components of intangible assets | The components of intangible assets as of June 30, 2019 are summarized below: Weighted Average Amortization Years Gross Carrying Amount Accumulated Amortization Net Book Value Internally developed software 7 $ 289 $ (186 ) $ 103 Total intangible assets $ 289 $ (186 ) $ 103 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The Company’s debt consists of the following: June 30, December 31, 2019 2018 Term credit facilities $ 3,196 $ 3,793 Less current portion (3,196 ) (1,174 ) Total long-term debt $ — $ 2,619 |
PENSION PLAN (Tables)
PENSION PLAN (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Current service cost, net of employee contributions $ 14 $ 14 $ 29 $ 31 Interest cost on accrued benefit obligation 26 25 52 50 Expected return on plan assets (42 ) (42 ) (82 ) (85 ) Amortization of transitional obligation 3 1 6 3 Amortization of past service costs 2 — 4 2 Amortization of net actuarial gain 11 14 24 28 Total cost of benefit $ 14 $ 12 $ 33 $ 29 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock option activity under the 2011 Long-Term Incentive Plan | A summary of stock option activity under the 2011 Long-Term Incentive Plan as of June 30, 2019, and changes during the six months ended June 30, 2019, are presented below: Stock Weighted average Weighted Aggregate Outstanding as of January 1, 2019 424,800 $ 8.30 6.5 $ 22 Granted — — Exercised — — Forfeited — — Outstanding as of June 30, 2019 424,800 $ 8.30 6.00 $ 14 Exercisable as of June 30, 2019 421,467 $ 8.31 6.00 $ 14 |
BASIC AND DILUTED INCOME (LOS_2
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted loss per share | The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except per share data): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net (loss) income $ (4,155 ) $ (1,658 ) $ 182 $ (2,964 ) Income from discontinued operations, net of income taxes 132 862 1,443 1,594 Net (loss) income $ (4,023 ) $ (796 ) $ 1,625 $ (1,370 ) Denominator: Weighted average basic shares outstanding 8,726 8,726 8,726 8,726 Effect of dilutive securities - equity based compensation plans — — 4 — Denominator for diluted net income per common share 8,726 8,726 8,730 8,726 (Loss) earnings per share: Basic (Loss) income from continuing operations $ (0.48 ) $ (0.19 ) $ 0.02 $ (0.34 ) Income from discontinued operations 0.02 0.10 0.17 0.18 Net (loss) income $ (0.46 ) $ (0.09 ) $ 0.19 $ (0.16 ) Diluted (Loss) income from continuing operations $ (0.48 ) $ (0.19 ) $ 0.02 $ (0.34 ) Income from discontinued operations 0.02 0.10 0.17 0.18 Net (loss) income $ (0.46 ) $ (0.09 ) $ 0.19 $ (0.16 ) |
BUSINESS SEGMENT AND GEOGRAPH_2
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of information about segment income and loss | The following tables present information about segment income and loss: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Revenues T&D Solutions Switchgear $ 2,737 $ 883 $ 3,810 $ 4,585 2,737 883 3,810 4,585 Critical Power Solutions Equipment 267 402 441 784 Service 2,356 2,592 4,127 4,753 2,623 2,994 4,568 5,537 Consolidated $ 5,360 $ 3,877 $ 8,378 $ 10,122 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Depreciation and Amortization T&D Solutions $ 37 $ 90 $ 71 $ 181 Critical Power Solutions 37 374 73 753 Unallocated Corporate Overhead Expenses 14 16 28 32 Consolidated $ 88 $ 480 $ 172 $ 966 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Operating Income (Loss) T&D Solutions $ (542 ) $ (719 ) $ (775 ) $ (565 ) Critical Power Solutions 252 (234 ) (148 ) (673 ) Unallocated Corporate Overhead Expenses (1,260 ) (605 ) (2,070 ) (1,459 ) Consolidated $ (1,550 ) $ (1,558 ) $ (2,993 ) $ (2,697 ) |
Schedule of revenues attributable to countries | Revenues are attributable to countries based on the location of the Company’s customers: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Revenues United States $ 5,360 $ 3,877 $ 8,378 $ 10,122 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of component of lease expense | The components of the lease expense were as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Operating lease cost $ 165 $ 135 $ 330 $ 269 Finance lease cost Amortization of right-of-use asset $ 61 $ 45 $ 135 $ 84 Interest on lease liabilities 13 10 27 18 Total finance lease cost $ 74 $ 55 $ 162 $ 102 |
Schedule of other information related to leases | Other information related to leases was as follows: Supplemental Cash Flows Information June 30, 2019 2018 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 334 $ 292 Operating cash flows from finance leases 27 18 Financing cash flows from finance leases 127 77 Right-of-use assets obtained in exchange for lease obligations: Operating leases 296 249 Finance leases 61 45 Weighted Average Remaining Lease Term June 30, 2019 2018 Operating leases 2 years 3 years Finance leases 2 years 2 years Weighted Average Discount Rate June 30, 2019 2018 Operating leases 5.50 % 5.50 % Finance leases 6.72 % 6.50 % |
Schedule of future minimum lease payments | Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as follows: Operating Finance Leases Leases 2019 $ 330 $ 168 2020 676 232 2021 401 280 2022 91 90 2023 — 37 Thereafter — — Total future minmum lease payments 1,498 807 Less imputed interest (97 ) (78 ) Total future minmum lease payments $ 1,401 $ 729 |
Schedule of reported amounts of lease liabilities | Reported as of June 30, 2019: Operating Finance Leases Leases Accounts payable and accrued liabilities $ 609 $ 246 Other long-term liabilities 792 483 Total $ 1,401 $ 729 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) $ in Thousands | Jun. 28, 2019USD ($)shares | Jun. 30, 2019USD ($)NumberSegment | Jun. 30, 2018USD ($)Segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Number of additional location | Number | 5 | ||||
Number of reportable segments | Segment | 2 | 2 | |||
Accumulated deficit | $ (4,502) | $ (6,127) | |||
Working capital | 6,800 | ||||
Debt | 25,100 | ||||
Cash and cash equivalents | $ 490 | $ 315 | $ 200 | $ 218 | |
Stock Purchase Agreement [Member] | |||||
Cash purchase price | $ 60,500 | ||||
Number of shares held by stockholders approving Stock Purchase Agreement | shares | 4,774,400 | ||||
Percentage of voting power of stockholders approving Stock Purchase Agreement | 54.70% | ||||
Stock Purchase Agreement [Member] | Pioneer Power Solutions, Inc. [Member] | Subordinated Promissory Note [Member] | |||||
Principal amount | $ 7,500 |
DIVESTITURES (Details Narrative
DIVESTITURES (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 22, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, issued | 8,726,045 | 8,726,045 | 8,726,045 | ||
PCPI [Member] | |||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Gain on deconsolidation | $ 4,200 | ||||
Nevada corporation (CleanSpark) [Member] | Contract Manufacturing Agreement [Member] | |||||
Description of price | The price for the Products payable by CleanSpark to the Company will be negotiated on a case by case basis, but all purchases of Products will have a target price of 91% of the CleanSpark customer’s purchase order price and will not be more than 109% of the Company’s cost. | ||||
Description of contract agreement term | The Contract Manufacturing Agreement has a term of 18 months and may be extended by mutual agreement of the Company and CleanSpark. | ||||
Nevada corporation (CleanSpark) [Member] | Common Stock [Member] | |||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Number of shares converted | 1,750,000 | ||||
Nevada corporation (CleanSpark) [Member] | Common Stock [Member] | Warrant [Member] | |||||
Number of shares converted | 500,000 | ||||
Share price | $ 1.60 | ||||
Warrant term | 5 years | ||||
Fair value of investment | $ 3,900 | $ 3,900 | |||
Recognized loss | $ 3,700 | $ 325 | |||
Nevada corporation (CleanSpark) [Member] | Common Stock [Member] | Warrant 1 [Member] | |||||
Number of shares converted | 500,000 | ||||
Share price | $ 2 | ||||
Warrant term | 5 years |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Total Revenue | $ 5,360 | $ 3,877 | $ 8,378 | $ 10,122 |
Products [Member] | ||||
Total Revenue | 3,004 | 1,285 | 4,249 | 5,362 |
Services [Member] | ||||
Total Revenue | $ 2,356 | $ 2,592 | $ 4,129 | $ 4,760 |
OTHER EXPENSE (Details Narrativ
OTHER EXPENSE (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Other non-operating expense | $ 3,807 | $ 212 | $ 465 | $ 349 |
Nevada corporation (CleanSpark) [Member] | Common Stock [Member] | Warrant [Member] | ||||
Recognized loss | $ 3,700 | $ 325 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets of discontinued operations: | ||
Cash and cash equivalents | $ 6 | $ 11 |
Accounts receivable - trade, net | 15,397 | 12,944 |
Inventories, net | 20,131 | 23,632 |
Income taxes receivable | 566 | |
Prepaid expenses | 604 | 514 |
Property, plant and equipment, net | 4,300 | 4,406 |
Right of use asset | 1,928 | 2,124 |
Deferred income taxes | 78 | 134 |
Intangible assets, net | 3,377 | 3,460 |
Goodwill | 5,557 | 5,557 |
Assets of discontinued operations | 51,378 | 53,348 |
Liabilities of discontinued operations: | ||
Bank overdrafts | 793 | 1,690 |
Accounts payable and accrued liabilities | 20,278 | 18,894 |
Income taxes payable | 655 | 778 |
Pension deficit | 3 | 148 |
Other long-term liabilities | 2,090 | 2,187 |
Liabilities of discontinued operations | $ 23,819 | $ 23,697 |
DISCONTINUED OPERATIONS (Deta_2
DISCONTINUED OPERATIONS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Revenues | $ 19,003 | $ 21,599 | $ 40,684 | $ 42,530 |
Costs and Expenses | ||||
Cost of goods sold | 16,047 | 16,874 | 33,886 | 33,749 |
Selling, general and administrative | 2,275 | 2,832 | 4,715 | 5,395 |
Foreign exchange loss (gain) | 143 | 197 | (491) | 272 |
Interest expense | 275 | 520 | 550 | 948 |
Other expense (income) | (1) | 48 | 96 | |
Total costs and expenses | 18,740 | 20,422 | 38,708 | 40,460 |
Income before provision for income taxes | 263 | 1,177 | 1,976 | 2,070 |
Income tax expense | 131 | 315 | 533 | 476 |
Income from discontinued operations, net of income taxes | $ 132 | $ 862 | $ 1,443 | $ 1,594 |
DISCONTINUED OPERATIONS (Deta_3
DISCONTINUED OPERATIONS (Details 2) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Net cash provided by operating activities | $ 2,793 | $ 1,580 |
Net cash used in investing activities | (97) | (57) |
Net cash used in financing activities | (2,607) | (1,685) |
Effect of foreign exchange on cash and cash equivalents | (94) | 152 |
Increase in cash and cash equivalents | $ (5) | $ (10) |
DISCONTINUED OPERATIONS (Deta_4
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) $ in Thousands | Jun. 28, 2019 | Jun. 30, 2019 | Jun. 30, 2019 |
Reynosa Facility Flood [Member] | |||
Loss due to inventory damage | $ 3,300 | ||
Insurance proceeds | 2,400 | ||
Reynosa Facility Flood [Member] | Discontinued Operations [Member] | |||
Net loss on inventory damaged | 913 | ||
Reynosa Facility Flood [Member] | Continuing Operations [Member] | |||
Insurance receivable | $ 2,400 | $ 2,400 | |
Stock Purchase Agreement [Member] | |||
Cash purchase price | $ 60,500 | ||
Reverse termination fee | 4,000 | ||
Indemnification obligation deductible | $ 330 | ||
Indemnification obligation cap percentage of purchase price | 0.50% | ||
Indemnification obligation per-claim threshold amount | $ 50 | ||
Indemnification obligation of buyer Interim Breaches cap amount | 5,000 | ||
Indemnification rights of buyer deductible | 500 | ||
Indemnification rights of buyer cap | 5,000 | ||
Indemnification obligation of buyer deductible | 330 | ||
[custom:IndemnificationObligationOfBuyerCap] | 3,300 | ||
Stock Purchase Agreement [Member] | Pioneer Power Solutions, Inc. [Member] | Subordinated Promissory Note [Member] | |||
Principal amount | $ 7,500 | ||
Interest rate | 4.00% | 4.00% | |
Maturity date | Dec. 31, 2022 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,138 | $ 2,049 |
Work in process | 3,377 | 1,949 |
Finished goods | (88) | 46 |
Provision for excess and obsolete inventory | (407) | (366) |
Total inventories | $ 5,020 | $ 3,678 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Goods in transit | $ 36 | $ 120 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 2,443 | $ 2,418 |
Less: Accumulated depreciation | (1,682) | (1,540) |
Total property, plant and equipment, net | 761 | 878 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 1,219 | 1,219 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 205 | 205 |
Computer Hardware And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 682 | 682 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 337 | $ 312 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 142 | $ 106 |
OTHER ASSETS (Details Narrative
OTHER ASSETS (Details Narrative) $ in Thousands | Jan. 31, 2012USD ($)Number | Dec. 31, 2011USD ($)Number | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Other current assets | $ 600 | |||
Right of use assets | $ 1,900 | $ 2,200 | ||
Notes Receivable - Developer [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Principal amount | $ 300 | $ 300 | ||
Number of promissory notes | Number | 2 | 2 | ||
Accrued interest rate (in percent) | 4.50% | 4.50% |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill | |
Balance, beginning | $ 2,969 |
No activity | |
Balance, ending | 2,969 |
Critical Power Segment [Member] | |
Goodwill | |
Balance, beginning | 2,969 |
No activity | |
Balance, ending | $ 2,969 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Intangible assets, balance | $ 124 |
Amortization | (21) |
Intangible assets, balance | 103 |
Critical Power Segment [Member] | |
Intangible assets, balance | 124 |
Amortization | (21) |
Intangible assets, balance | $ 103 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Gross carrying amount | $ 289 | |
Accumulated amortization | (186) | |
Intangible assets, net | $ 103 | $ 124 |
Internally Developed Software [Member] | ||
Weighted average amortization years | 7 years | |
Gross carrying amount | $ 289 | |
Accumulated amortization | (186) | |
Intangible assets, net | $ 103 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense | $ 21 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Total debt | $ 3,196 | $ 3,793 |
Less current portion | $ (3,196) | (1,174) |
Total long-term debt | $ 2,619 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | Mar. 28, 2018 | Mar. 15, 2017 | Jun. 30, 2016 | Apr. 30, 2016 | Dec. 31, 2018 | Jun. 30, 2019 | Mar. 15, 2018 |
Debt Instrument [Line Items] | |||||||
Credit facilities amount outstanding | $ 20,755 | $ 20,982 | |||||
Canadian Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum credit facilities amount to borrow | $ 6,300 | ||||||
Credit facilities amount outstanding | 5,800 | ||||||
Canadian Facilities [Member] | Canada, Dollars | |||||||
Debt Instrument [Line Items] | |||||||
Maximum credit facilities amount to borrow | $ 8,200 | $ 9,200 | |||||
Canadian Credit Facilities A [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facilities amount outstanding | 5,800 | 6,000 | |||||
Canadian Credit Facilities A [Member] | 2017 CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 0.75% | ||||||
Variable rate description | BMO's prime rate plus | ||||||
Canadian Credit Facilities A [Member] | 2017 CAD ARCA Amendment [Member] | U.S. Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 0.75% | ||||||
Variable rate description | U.S. base rate plus | ||||||
Canadian Credit Facilities A [Member] | 2017 CAD ARCA Amendment [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 2.25% | ||||||
Variable rate description | LIBOR plus | ||||||
Canadian Credit Facilities A [Member] | 2018 CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 0.50% | ||||||
Variable rate description | BMO's prime rate plus | ||||||
Canadian Credit Facilities A [Member] | 2018 CAD ARCA Amendment [Member] | U.S. Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 0.50% | ||||||
Variable rate description | U.S. base rate plus | ||||||
Canadian Credit Facilities A [Member] | 2018 CAD ARCA Amendment [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 2.00% | ||||||
Variable rate description | LIBOR plus | ||||||
Canadian Credit Facilities A [Member] | Canada, Dollars | |||||||
Debt Instrument [Line Items] | |||||||
Maximum credit facilities amount to borrow | $ 7,000 | $ 8,000 | |||||
Canadian Credit Facilities B [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facilities amount outstanding | 100 | ||||||
Canadian Credit Facilities B [Member] | Canada, Dollars | |||||||
Debt Instrument [Line Items] | |||||||
Maximum credit facilities amount to borrow | $ 471 | ||||||
Canadian Credit Facilities B [Member] | Canada, Dollars | 2017 CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 1.25% | ||||||
Variable rate description | BMO's prime rate plus | ||||||
Frequency of payments | Quarterly | Quarterly | |||||
Quarterly principal payment | $ 47 | $ 47 | |||||
Balloon payment | $ 141 | ||||||
Debt instrument amortization period | 5 years | ||||||
Canadian Credit Facilities B [Member] | Canada, Dollars | 2018 CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 1.25% | ||||||
Variable rate description | BMO's prime rate plus | ||||||
Frequency of payments | Quarterly | ||||||
Quarterly principal payment | $ 47 | ||||||
Canadian Credit Facilities C [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum credit facilities amount to borrow | $ 712 | ||||||
Credit facilities amount outstanding | 352 | 500 | |||||
Canadian Credit Facilities C [Member] | 2017 CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Frequency of payments | Quarterly | ||||||
Quarterly principal payment | $ 36 | ||||||
Balloon payment | $ 352 | ||||||
Canadian Credit Facilities C [Member] | 2017 CAD ARCA Amendment [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] | 2017 CAD ARCA Amendment [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] | 2018 CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Frequency of payments | Quarterly | ||||||
Quarterly principal payment | $ 36 | ||||||
Balloon payment | $ 136 | ||||||
Canadian Credit Facilities C [Member] | 2018 CAD ARCA Amendment [Member] | U.S. Base Rate [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] | 2018 CAD ARCA Amendment [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 2.50% | ||||||
Variable rate description | LIBOR plus | ||||||
Canadian Credit Facilities C [Member] | CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Quarterly principal payment | $ 72 | ||||||
Balloon payment | $ 496 | ||||||
Canadian Credit Facilities C [Member] | Canada, Dollars | |||||||
Debt Instrument [Line Items] | |||||||
Quarterly principal payment | $ 316 | ||||||
Canadian Credit Facilities C [Member] | Canada, Dollars | 2017 CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 1.50% | ||||||
Variable rate description | BMO's prime rate plus | ||||||
Frequency of payments | Quarterly | ||||||
Quarterly principal payment | $ 36 | ||||||
Canadian Credit Facilities C [Member] | Canada, Dollars | 2018 CAD ARCA Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on variable rate | 1.25% | ||||||
Variable rate description | BMO's prime rate plus | ||||||
Canadian Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facilities amount outstanding | $ 6,000 |
DEBT (Details Narrative 1)
DEBT (Details Narrative 1) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2019 | Dec. 31, 2018 | Mar. 15, 2018 | Apr. 30, 2016 | |
Line of Credit Facility [Line Items] | ||||
Credit facilities amount outstanding | $ 20,982 | $ 20,755 | ||
Debt issuance costs | 47 | |||
Reverse termination fee percentage required to remit | 50.00% | |||
U.S. Credit Facilities [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum Credit Facilities Amount to Borrow | $ 19,100 | |||
Percentage of subsidiary shares used to secure borrowings in facility | 65.00% | |||
Credit facilities amount outstanding | $ 18,200 | 18,800 | ||
U.S. Credit Facilities [Member] | 2017 US ARCA Amendment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum Credit Facilities Amount to Borrow | $ 20,100 | |||
U.S. Credit Facilities A [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum Credit Facilities Amount to Borrow | 14,000 | |||
U.S. Credit Facilities A [Member] | 2017 US ARCA Amendment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum Credit Facilities Amount to Borrow | $ 15,000 | |||
U.S. Credit Facilities A [Member] | 2017 US ARCA Amendment [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] | 2017 US ARCA Amendment [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 A [Member] | 2018 US ARCA Amendment [Member] | Bank's Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate spread | 0.75% | |||
Variable rate description | bank's prime rate on U.S. prime rate loans | |||
U.S. Credit Facilities A [Member] | 2018 US ARCA Amendment [Member] | LIBOR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate spread | 2.00% | |||
Variable rate description | adjusted LIBOR rate on Eurodollar loans | |||
United States Credit Facilities B [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum Credit Facilities Amount to Borrow | 5,000 | |||
United States Credit Facilities B [Member] | 2017 US ARCA Amendment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Frequency of payments | Quarterly | |||
Quarterly principal payment | $ 31 | |||
Balloon payment | $ 4,400 | |||
United States Credit Facilities B [Member] | 2017 US ARCA Amendment [Member] | LIBOR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate spread | 2.50% | |||
Variable rate description | adjusted LIBOR rate on Eurodollar loans | |||
United States Credit Facilities B [Member] | 2017 US ARCA Amendment [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 | |||
United States Credit Facilities B [Member] | 2018 US ARCA Amendment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Frequency of payments | Quarterly | |||
Quarterly principal payment | $ 100 | |||
Balloon payment | $ 2,300 | |||
U.S. Credit Facility - MasterCard [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum Credit Facilities Amount to Borrow | $ 100 | |||
Credit Facility B [Member] | 2017 US ARCA Amendment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Frequency of payments | Quarterly | |||
Quarterly principal payment | $ 31 | |||
U.S. Facilities A [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Credit facilities amount outstanding | 15,000 | 15,000 | ||
USD Facility B [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Credit facilities amount outstanding | $ 3,200 | $ 3,800 |
DEBT (Details Narrative 2)
DEBT (Details Narrative 2) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 47 | |
Nexus Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 42 | $ 45 |
PENSION PLAN (Details)
PENSION PLAN (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Defined Benefit Plan [Abstract] | ||||
Current service cost, net of employee contributions | $ 14 | $ 14 | $ 29 | $ 31 |
Interest cost on accrued benefit obligation | 26 | 25 | 52 | 50 |
Expected return on plan assets | (42) | (42) | (82) | (85) |
Amortization of transitional obligation | 3 | 1 | 6 | 3 |
Amortization of past service costs | 2 | 4 | 2 | |
Amortization of net actuarial gain | 11 | 14 | 24 | 28 |
Total cost of benefit | $ 14 | $ 12 | $ 33 | $ 29 |
PENSION PLAN (Details Narrative
PENSION PLAN (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Defined Benefit Plan [Abstract] | ||
Funded contributions by subsidiary (percent) | 100.00% | |
Defined benefit contributions | $ 30 | $ 36 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning of period | shares | 424,800 |
Outstanding at end of period | shares | 424,800 |
Exercisable at end of period | shares | 421,467 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning of period | $ / shares | $ 8.30 |
Outstanding at end of period | $ / shares | 8.30 |
Exercisable at end of period | $ / shares | $ 8.31 |
Outstanding at beginning of period | 6 years 6 months |
Outstanding at end of period | 6 years |
Exercisable at the end of period | 6 years |
Outstanding at beginning of period | $ | $ 22 |
Outstanding at end of period | $ | 14 |
Exercisable at end of period | $ | $ 14 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Common stock, outstanding shares | 8,726,045 | 8,726,045 | 8,726,045 | 8,726,045 | 8,726,045 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Stock-based compensation not yet recognized | $ 6 | $ 6 | |||
Foreign currency translation adjustments | 374 | $ (1) | 62 | $ (167) | |
Stock-based compensation | $ 2 | $ (2) | $ 7 | $ 146 | |
Incentive Stock Option [Member] | |||||
Number of shares available for future grants | 248,867 | 248,867 |
BASIC AND DILUTED INCOME (LOS_3
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||
Net (loss) income | $ (4,155) | $ (1,658) | $ 182 | $ (2,964) |
(Loss) income from discontinued operations, net of income taxes | 132 | 862 | 1,443 | 1,594 |
Net (loss) income | $ (4,023) | $ (796) | $ 1,625 | $ (1,370) |
Denominator: | ||||
Weighted average basic shares outstanding | 8,726 | 8,726 | 8,726 | 8,726 |
Effect of dilutive securities - equity based compensation plans | 4 | |||
Denominator for diluted net income per common share | 8,726 | 8,726 | 8,730 | 8,726 |
Basic | ||||
(Loss) income from continuing operations | $ (0.48) | $ (0.19) | $ 0.02 | $ (0.34) |
(Loss) income from discontinued operations | 0.02 | 0.10 | 0.17 | 0.18 |
Net (loss) income | (0.46) | (0.09) | 0.19 | (0.16) |
Diluted | ||||
(Loss) income from continuing operations | (0.48) | (0.19) | 0.02 | (0.34) |
(Loss) income from discontinued operations | 0.02 | 0.10 | 0.17 | 0.18 |
Net (loss) income | $ (0.46) | $ (0.09) | $ 0.19 | $ (0.16) |
BUSINESS SEGMENT AND GEOGRAPH_3
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Revenues | $ 5,360 | $ 3,877 | $ 8,378 | $ 10,122 |
Depreciation and Amortization | 88 | 480 | 172 | 966 |
Operating Income | (1,550) | (1,558) | (2,993) | (2,697) |
T And D Segment [Member] | ||||
Revenues | ||||
Switchgear | 2,737 | 883 | 3,810 | 4,585 |
Revenues | 2,737 | 883 | 3,810 | 4,585 |
Depreciation and Amortization | 37 | 90 | 71 | 181 |
Operating Income | (542) | (719) | (775) | (565) |
Critical Power Segment [Member] | ||||
Revenues | ||||
Equipment | 267 | 402 | 441 | 784 |
Service | 2,356 | 2,592 | 4,127 | 4,753 |
Revenues | 2,623 | 2,994 | 4,568 | 5,537 |
Depreciation and Amortization | 37 | 374 | 73 | 753 |
Operating Income | 252 | (234) | (148) | (673) |
Unallocated Corporate Overhead Expenses [Member] | ||||
Revenues | ||||
Depreciation and Amortization | 14 | 16 | 28 | 32 |
Operating Income | $ (1,260) | $ (605) | $ (2,070) | $ (1,459) |
BUSINESS SEGMENT AND GEOGRAPH_4
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | $ 5,360 | $ 3,877 | $ 8,378 | $ 10,122 |
United States [Member] | ||||
Revenues | $ 5,360 | $ 3,877 | $ 8,378 | $ 10,122 |
BUSINESS SEGMENT AND GEOGRAPH_5
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Details Narrative) - Segment | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 2 | 2 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Leases [Abstract] | ||||
Operating lease cost | $ 165 | $ 135 | $ 330 | $ 269 |
Finance lease cost | ||||
Amortization of right-of-use asset | 61 | 45 | 135 | 84 |
Interest on lease liabilities | 13 | 10 | 27 | 18 |
Total finance lease cost | $ 74 | $ 55 | $ 162 | $ 102 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 334 | $ 292 |
Operating cash flows from finance leases | 27 | 18 |
Financing cash flows from finance leases | 127 | 77 |
Right of use assets obtained in exchange for lease obligations | ||
Operating leases | 296 | 249 |
Finance leases | $ 61 | $ 45 |
Operating leases (in years) | 2 years | 3 years |
Finance leases (in years) | 2 years | 2 years |
Operating leases (in percent) | 5.50% | 5.50% |
Finance leases (in percent) | 6.72% | 6.50% |
LEASES (Details 2)
LEASES (Details 2) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 330 |
2020 | 676 |
2021 | 401 |
2022 | 91 |
Total lease commitments | 1,498 |
Less imputed interest | (97) |
Total future minimum lease payments | 1,401 |
Finance Leases | |
2019 | 168 |
2020 | 232 |
2021 | 280 |
2022 | 90 |
2023 | 37 |
Total lease commitments | 807 |
Less imputed interest | (78) |
Total future minimum lease payments | $ 729 |
LEASES (Details 3)
LEASES (Details 3) $ in Thousands | Jun. 30, 2019USD ($) |
Operating leases | $ 1,401 |
Finance leases | 729 |
Accounts Payable and Accrued Liabilities [Member] | |
Operating leases | 609 |
Finance leases | 246 |
Other Long Term Liabilities [Member] | |
Operating leases | 792 |
Finance leases | $ 483 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Assets under finance leases | $ 1,000 | $ 1,100 |
Assets recorded under operating leases | 2,100 | 1,500 |
Financing Leases [Axis] | ||
Accumulated amortization | 475 | 397 |
Operating Leases [Axis] | ||
Accumulated amortization | $ 748 | $ 531 |
Minimum [Member] | ||
Remaining lease term (in years) | 1 year | |
MaximumMember | ||
Remaining lease term (in years) | 4 years |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - CAD ($) $ in Thousands | Aug. 05, 2019 | Aug. 04, 2019 | Jun. 30, 2019 |
Reverse termination fee percentage required to remit | 50.00% | ||
Subsequent Event [Member] | Canadian Facilities [Member] | |||
Percentage of outstanding unpaid amount of eligible receivables | 90.00% | 80.00% | |
Maximum additional borrowing base | $ 1,000 | ||
Reverse termination fee percentage required to remit | 50.00% |