Espey Mfg. & Electronics (ESP) 10-Q 16 Feb 21 2021 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2020	Feb. 12, 2021
Document And Entity Information [Abstract]
Entity Registrant Name	ESPEY MFG & ELECTRONICS CORP
Entity Central Index Key	0000033533
Document Type	10-Q
Document Period End Date	Dec. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity Common Stock, Shares Outstanding		2,702,633
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity File Number	1-4383
Entity Incorportion, State or Country Code	NY
Entity Shell Company	false

Balance Sheets

Balance Sheets - USD ($)	Dec. 31, 2020	Jun. 30, 2020
ASSETS:
Cash and cash equivalents	$ 9,040,393	$ 5,402,122
Investment securities	3,203,113	5,141,520
Trade accounts receivable, net of allowance of $3,000	4,207,602	9,013,405
Income tax receivable	86,274
ESOP receivable due to dividends on unallocated shares	18,726
Inventories:
Raw materials	2,076,391	2,057,778
Work-in-process	362,494	614,521
Costs related to contracts in process	14,055,905	12,115,756
Total inventories	16,494,790	14,788,055
Prepaid expenses and other current assets	506,501	396,886
Total current assets	33,557,399	34,741,988
Property, plant and equipment, net	3,224,610	3,466,778
Total assets	36,782,009	38,208,766
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable	3,253,983	2,861,696
Accrued expenses:
Salaries and wages	344,141	469,201
Vacation	666,160	689,834
Other	90,186	318,322
Payroll and other taxes withheld	463,285	186,970
Contract liabilities	1,650,288	2,175,235
Income taxes payable		47,707
Total current liabilities	6,468,043	6,748,965
Deferred tax liabilities	197,705	232,953
Total liabilities	6,665,748	6,981,918
Commitments and contingencies (see Note 5)
Common stock, par value $.33-1/3 per share Authorized 10,000,000 shares; Issued 3,129,874 and 3,029,874 shares as of December 31, 2020 and June 30, 2020, respectively. Outstanding 2,702,633 and 2,402,633 as of December 31, 2020 And June 30, 2020, respectively (includes 297,061 and 0 Unearned ESOP shares, respectively)	1,043,291	1,009,958
Capital in excess of par value	22,995,640	19,073,213
Accumulated other comprehensive loss	(2,069)	(3,107)
Retained earnings	17,605,090	18,797,589
Total stockholders equity before ESOP	41,641,952	38,877,653
Less: Unearned ESOP shares	(5,487,000)
Less: Cost of 427,241 and 627,241 shares of common stock in treasury as of December 31, 2020 and June 30, 2020, respectively	(6,038,691)	(7,650,805)
Total stockholders' equity	30,116,261	31,226,848
Total liabilities and stockholders' equity	$ 36,782,009	$ 38,208,766

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance	$ 3,000	$ 3,000
Common stock, par value	$ 0.3333	$ 0.3333
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	3,129,874	3,029,874
Common stock, shares outstanding	2,702,633	2,402,633
Unearned ESOP, shares	297,061	0
Treasury stock, shares	427,241	627,241

Statements of Comprehensive Inc

Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Net sales	$ 6,962,065	$ 7,286,674	$ 14,227,580	$ 13,210,493
Cost of sales	6,248,604	5,806,526	12,386,745	10,593,997
Gross profit	713,461	1,480,148	1,840,835	2,616,496
Selling, general and administrative expenses	945,478	1,249,742	1,860,104	2,333,954
Operating (loss) income	(232,017)	230,406	(19,269)	282,542
Other income
Interest income	1,753	33,915	16,970	66,076
Other	13,734	4,849	16,861	20,177
Total other income	15,487	38,764	33,831	86,253
(Loss) income before provision for income taxes	(216,530)	269,170	14,562	368,795
(Benefit) provision for income taxes	(35,524)	40,206	5,745	58,055
Net (loss) income	(181,006)	228,964	8,817	310,740
Other comprehensive (loss) income, net of tax:
Unrealized gain (loss) on investment securities	2,712	(355)	1,038	(158)
Total comprehensive (loss) income	$ (178,294)	$ 228,609	$ 9,855	$ 310,582
Net (loss) income per share:
Basic	$ (0.08)	$ 0.10	$ 0	$ 0.13
Diluted	$ (0.08)	$ 0.10	$ 0	$ 0.13
Weighted average number of shares outstanding:
Basic	2,402,665	2,391,643	2,402,649	2,389,526
Diluted	2,402,665	2,395,020	2,404,043	2,395,638
Dividends per share:	$ 0.25	$ 0.25	$ 0.50	$ 0.50

Statements of Changes in Stockh

Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Capital in Excess of Par Value [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Unearned ESOP Shares [Member]	Total
Balance, beginning at Jun. 30, 2019	$ 1,009,958	$ 18,731,975	$ (1,299)	$ 20,022,132	$ (7,632,556)	$ (204,706)	$ 31,925,504
Balance, beginning, shares at Jun. 30, 2019	2,401,213				628,661
Comprehensive income (loss):
Net income (loss)				310,740			310,740
Other comprehensive income (loss), net of tax			(158)				(158)
Total comprehensive income (loss)							310,582
Stock options exercised		33,780			$ 16,500		50,280
Stock options exercised, shares	2,000				(2,000)
Stock-based compensation		92,447					92,447
Dividends paid on common stock per share				(1,193,977)			(1,193,977)
Purchase of treasury stock					$ (47,949)		(47,949)
Purchase of treasury stock, shares	(2,180)				2,180
Balance, ending at Dec. 31, 2019	$ 1,009,958	18,858,202	(1,457)	19,138,895	$ (7,664,005)	(204,706)	31,136,887
Balance, ending, common shares at Dec. 31, 2019	2,401,033				628,841
Balance, beginning at Sep. 30, 2019	$ 1,009,958	18,812,931	(1,102)	19,506,648	$ (7,624,347)	(204,706)	31,499,382
Balance, beginning, shares at Sep. 30, 2019	2,402,880				626,994
Comprehensive income (loss):
Net income (loss)				228,964			228,964
Other comprehensive income (loss), net of tax			(355)				(355)
Total comprehensive income (loss)							228,609
Stock-based compensation		45,271					45,271
Dividends paid on common stock per share				(596,717)			(596,717)
Purchase of treasury stock					$ (39,658)		(39,658)
Purchase of treasury stock, shares	(1,847)				1,847
Balance, ending at Dec. 31, 2019	$ 1,009,958	18,858,202	(1,457)	19,138,895	$ (7,664,005)	(204,706)	31,136,887
Balance, ending, common shares at Dec. 31, 2019	2,401,033				628,841
Balance, beginning at Jun. 30, 2020	$ 1,009,958	19,073,213	(3,107)	18,797,589	$ (7,650,805)		$ 31,226,848
Balance, beginning, shares at Jun. 30, 2020	2,402,633				627,241		2,402,633
Comprehensive income (loss):
Net income (loss)				8,817			$ 8,817
Other comprehensive income (loss), net of tax			1,038				1,038
Total comprehensive income (loss)							$ 9,855
Stock options exercised, shares
Stock-based compensation		80,874					$ 80,874
Dividends paid on common stock per share				(1,201,316)			(1,201,316)
Sale of stock to ESOP	$ 33,333	3,841,553			$ 1,612,114	(5,487,000)
Sale of stock to ESOP, shares	300,000				(200,000)
Balance, ending at Dec. 31, 2020	$ 1,043,291	22,995,640	(2,069)	17,605,090	$ (6,038,691)	(5,487,000)	$ 30,116,261
Balance, ending, common shares at Dec. 31, 2020	2,702,633				427,241		2,702,633
Balance, beginning at Sep. 30, 2020	$ 1,009,958	19,120,380	(4,781)	18,386,755	$ (7,650,805)		$ 30,861,507
Balance, beginning, shares at Sep. 30, 2020	2,402,633				627,241
Comprehensive income (loss):
Net income (loss)				(181,006)			(181,006)
Other comprehensive income (loss), net of tax			2,712				2,712
Total comprehensive income (loss)							(178,294)
Stock-based compensation		33,707					33,707
Dividends paid on common stock per share				(600,659)			(600,659)
Sale of stock to ESOP	$ 33,333	3,841,553			$ 1,612,114	(5,487,000)
Sale of stock to ESOP, shares	300,000				(200,000)
Balance, ending at Dec. 31, 2020	$ 1,043,291	$ 22,995,640	$ (2,069)	$ 17,605,090	$ (6,038,691)	$ (5,487,000)	$ 30,116,261
Balance, ending, common shares at Dec. 31, 2020	2,702,633				427,241		2,702,633

Statements of Changes in Stoc_2

Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Statement of Stockholders' Equity [Abstract]
Other comprehensive income (loss), tax portion	$ 721	$ (94)	$ 276	$ (42)
Dividends paid per share	$ 0.25	$ 0.25	$ 0.50	$ 0.50

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash Flows from Operating Activities:
Net income	$ 8,817	$ 310,740
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	80,874	92,447
Depreciation	271,341	286,549
ESOP compensation expense	56,274	165,820
Deferred income tax benefit	(35,524)	(18,561)
Changes in assets and liabilities:
Decrease in trade accounts receivable	4,805,803	6,574,172
Increase in income taxes receivable	(86,274)	(43,903)
Increase in ESOP receivable due to dividends on unallocated shares	(18,726)
Increase in inventories	(1,706,735)	(2,363,114)
Increase in prepaid expenses and other current assets	(109,615)	(512,667)
Increase (decrease) increase in accounts payable	392,287	(246,984)
(Decrease) increase in accrued salaries and wages	(125,060)	54,249
Decrease in vacation accrual	(23,674)	(72,161)
Decrease in ESOP payable	(56,274)	(7,084)
(Decrease) increase in other accrued expenses	(228,136)	76,001
Increase (decrease) in payroll and other taxes withheld	276,315	(60,941)
(Decrease) increase in contract liabilities	(524,947)	1,797,286
Decrease in income taxes payable	(47,707)	(30,481)
Net cash provided by operating activities	2,929,039	6,001,368
Cash Flows from Investing Activities:
Additions to property, plant and equipment	(29,173)	(177,826)
Purchase of investment securities	(2,391,686)	(6,063,558)
Proceeds from sale/maturity of investment securities	4,331,407	6,079,747
Net cash provided by (used in) investing activities	1,910,548	(161,637)
Cash Flows from Financing Activities:
Dividends on common stock	(1,201,316)	(1,193,977)
Purchase of treasury stock		(47,949)
Proceeds from exercise of stock options		50,280
Net cash used in financing activities	(1,201,316)	(1,191,646)
Increase in cash and cash equivalents	3,638,271	4,648,085
Cash and cash equivalents, beginning of period	5,402,122	1,462,761
Cash and cash equivalents, end of period	9,040,393	6,110,846
Supplemental Schedule of Cash Flow Information:
Income taxes paid	$ 175,250	$ 151,000

Basis of Presentation

Basis of Presentation	6 Months Ended
	Dec. 31, 2020
Basis of Presentation [Abstract]
Basis of Presentation	Note 1. Basis of Presentation In the opinion of management the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for such periods. The results for any interim period are not necessarily indicative of the results to be expected for the full fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, inventories, income taxes, and stock-based compensation. Specific to inventories, including work-in-process and contracts in process, management evaluates, quarterly, those estimates used in determining the cost to complete for each contract on Espey Mfg. & Electronics Corp. (the Company's) sales backlog. During the quarter ended December 31, 2020 the Company, related to the pandemic, received notice from a customer to cancel an in-process contract. The Company recorded a write-off of inventory to cost of sales to the net realizable value of the inventory based on the terms of the contract. The change in estimates may affect the reported amount of inventories and gross profit in the current or a future period. Management bases its estimates on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. These financial statements should be read in conjunction with the Company's most recent audited financial statements included in its report on Form 10-K for the year ended June 30, 2020. Certain reclassifications may have been made to the prior year financial statements to conform to the current year presentation.

Investment Securities

Investment Securities	6 Months Ended
	Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Investment Securities	Note 2. Investment Securities Accounting Standards Codification (“ASC”) 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: § Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. § Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. § Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The carrying amounts of financial instruments, including cash and cash equivalents, short term investment securities, accounts receivable, accounts payable and accrued expenses, approximated fair value as of December 31, 2020 and June 30, 2020 because of the immediate or short-term maturity of these financial instruments. Investment securities at December 31, 2020 and June 30, 2020 consist of certificates of deposit and municipal bonds which are classified as available-for-sale securities and have been determined to be level 1 assets. The cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities by major security type at December 31, 2020 and June 30, 2020 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2020 Certificates of deposit $ 3,132,000 $ — $ — $ 3,132,000 Municipal bonds 70,744 369 — 71,113 Total investment securities $ 3,202,744 $ 369 $ — $ 3,203,113 June 30, 2020 Certificates of deposit $ 4,679,847 $ — $ — $ 4,679,847 Municipal bonds 462,618 1,243 (2,188 ) 461,673 Total investment securities $ 5,142,465 $ 1,243 $ (2,188 ) $ 5,141,520 The portfolio is diversified and highly liquid. At December 31, 2020, the Company did not have any investments in individual securities that have been in a continuous loss position considered to be other than temporary. As of December 31, 2020 and June 30, 2020, the remaining contractual maturities of available-for-sale securities were as follows: Years to Maturity Less than One to One Year Five Years Total December 31, 2020 Available-for-sale $ 3,203,113 $ — $ 3,203,113 June 30, 2020 Available-for-sale $ 5,141,520 $ — $ 5,141,520

Net (Loss) Income per Share

Net (Loss) Income per Share	6 Months Ended
	Dec. 31, 2020
Net Income per Share [Abstract]
Net (Loss) Income per Share	Note 3. Net (Loss) Income per Share Basic net (loss) income per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. The computation of diluted net (loss) income per share, excluded options to purchase 315,337 and 253,312 shares for the three and six months ended December 31, 2020 and 184,342 shares of our common stock for the three and six months ended December 31, 2019, as the effect of including them would be anti-dilutive. As unearned ESOP shares are released or committed-to-be-released the shares become outstanding for earnings-per-share computations.

Stock Based Compensation

Stock Based Compensation	6 Months Ended
	Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Stock Based Compensation	Note 4. Stock Based Compensation The Company follows ASC 718 in establishing standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, as well as transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements based on the fair value of the share-based payment. ASC 718 establishes fair value as the measurement objective in accounting for share-based payment transactions with employees, except for equity instruments held by employee share ownership plans. Total stock-based compensation expense recognized in the statements of comprehensive income (loss) for the three-month periods ended December 31, 2020 and 2019 was $33,707 and $45,271, respectively, before income taxes. The related total deferred tax benefits were $1,080 and $2,483 for the same periods. Total stock-based compensation expense recognized in the statements of comprehensive income (loss) for the six-month periods ended December 31, 2020 and 2019, was $80,874 and $92,447, respectively, before income taxes. The related total deferred tax benefits were $3,808 and $5,061 for the same periods. As of December 31, 2020, there was $139,818 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the next 2 years. The total deferred tax benefit related to these awards is expected to be $ 7,712. The Company has one employee stock option plan under which options or stock awards may be granted, the 2017 Stock Option and Restricted Stock Plan (the "2017 Plan"). The Board of Directors may grant options to acquire shares of common stock to employees and non-employee directors of the Company at the fair market value of the common stock on the date of grant. The maximum aggregate number of shares of Common Stock subject to options or awards to non-employee directors is 133,000 and the maximum aggregate number of shares of Common Stock subject to options or awards granted to non-employee directors during any single fiscal year is the lesser of 13,300 and 33 1/3% of the total number of shares subject to options or awards granted in such fiscal year. The maximum number of shares subject to options or awards granted to any individual employee may not exceed 15,000 in a fiscal year. Generally, options granted have a two-year vesting period based on two years of continuous service and have a ten-year contractual life. Option grants provide for accelerated vesting if there is a change in control. Shares issued upon the exercise of options are from those held in Treasury. Options covering 400,000 shares are authorized for issuance under the 2017 Plan, of which 226,354 have been granted as of December 31, 2020. While no further grants of options may be made under the Company’s 2007 Stock Option and Restricted Stock Plan, as of December 31, 2020, 119,750 options were outstanding under such plan of which all are vested and exercisable. ASC 718 requires the use of a valuation model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option valuation model, which incorporates various assumptions including those for dividend yield, volatility, expected life and interest rates. The table below outlines the weighted average assumptions that the Company used to calculate the fair value of each option award for the six months ended December 31, 2020 and 2019. December 31, 2020 December 31, 2019 Dividend yield 5.54 % 4.88% Company’s expected volatility 23.41% 27.81% Risk-free interest rate 0.36 % 1.67% Expected term 5.4 yrs 5.3 yrs Weighted average fair value per share of options granted during the period $1.59 $3.03 The Company declares regular dividends quarterly and declared and paid regular cash dividends of $0.50 per share for the six months ended December 31, 2020. The Company declared regular cash dividends of $0.50 per share for the six months ended December 31, 2019. Expected stock price volatility is based on the historical volatility of the Company’s stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options. The expected option term (in years) represents the estimated period of time until exercise and is based on actual historical experience. The following table summarizes stock option activity during the six months ended December 31, 2020: Employee Stock Options Plan Weighted Number of Weighted Average Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic to Option Price Term Value Balance at July 1, 2020 276,712 $ 24.30 $ 6.10 Granted 62,025 $ 18.05 9.81 Exercised — — — Forfeited or expired (23,400 ) $ 21.20 — Outstanding at December 31, 2020 315,337 $ 23.30 6.60 $ 53,962 Vested or expected to vest at December 31, 2020 297,286 $ 23.55 6.43 $ 44,882 Exercisable at December 31, 2020 205,187 $ 25.54 5.08 $ 0 The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing sale price of the Company’s common stock as reported on the NYSE American on December 31, 2020 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders if all option holders had exercised their options on December 31, 2020. This amount changes based on the fair market value of the Company’s common stock. The total intrinsic values of the options exercised during the six months ended December 31, 2020 and 2019 were $0 and $263, respectively. The following table summarizes changes in non-vested stock options during the six months ended December 31, 2020: Weighted Number Average of Shares Grant Date Subject Fair Value to Option (per Option) Non-vested at July 1, 2020 97,192 $ 4.034 Granted 62,025 $ 1.590 Vested (44,667 ) $ 5.140 Forfeited or expired (4,400 ) $ 3.797 Non-vested at December 31, 2020 110,150 $ 2.219

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 5. Commitments and Contingencies The Company from time to time, enters into standby letters of credit agreements with financial institutions primarily relating to the guarantee of future performance on certain contracts. Contingent liabilities on outstanding standby letters of credit agreements aggregated to zero at December 31, 2020 and June 30, 2020. The Company, as a U.S. Government contractor, is subject to audits, reviews, and investigations by the U.S. Government related to its negotiation and performance of government contracts and its accounting for such contracts. Failure to comply with applicable U.S. Government standards by a contractor may result in suspension from eligibility for award of any new government contract and a guilty plea or conviction may result in debarment from eligibility for awards. The government may, in certain cases, also terminate existing contracts, recover damages, and impose other sanctions and penalties. As a result of contract audits the Company will determine a range of possible outcomes and in accordance with ASC 450 “Contingencies” the Company will accrue amounts within a range that appears to be its best estimate of a possible outcome. Adjustments are made to accruals, if any, periodically based on current information. We are party to various litigation matters and claims arising from time to time in the ordinary course of business. While the results of such matters cannot be predicted with certainty, we believe that the final outcome of such matters will not have a material adverse effect on our business, financial condition, results of operations or cash flows. Currently, there are no matters pending.

Revenue

Revenue	6 Months Ended
	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Revenue	Note 6. Revenue The company follows ASC 606 “Revenue from Contracts with Customers” to determine the recognition of revenue. This standard requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenues. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or services. Significant judgment is required in determining the satisfaction of performance obligations. Revenues from our performance obligations are satisfied over time using the output method which considers the appraisal of results achieved and milestones reached or units delivered based on contractual shipment terms, typically shipping point. Revenue is recognized when the customer takes control of the product or services. The output method best depicts the transfer of control to the customer as the output method represents work completed. Control is typically transferred to the customer at the shipping point as the company has a present right to payment, the customer has legal title to the asset, the customer has the significant risks and rewards of ownership of the asset, and in most instances the customer has accepted the asset. Total revenue recognized for the three and six months ended December 31, 2020 based on units delivered totaled $5,865,878 and $11,724,584, respectively, compared to $5,702,565 and $10,820,879 for the same periods in fiscal year 2020. Total revenue recognized for the three and six months ended December 31, 2020 based on milestones achieved totaled $1,096,187 and $2,502,996, respectively, compared to $1,584,109 and $2,389,614 for the same periods in fiscal year 2020. The Company offers a standard one-year product warranty. Product warranties offered by the Company are classified as assurance-type warranties, which means, the warranty only guarantees that the good or service functions as promised. Based on this, the provided warranty is not considered to be a distinct performance obligation. The impact of variable consideration has been considered but none identified which would be required to be allocated to the transaction price as of December 31, 2020. Our payment terms are generally 30-60 days. Contract liabilities were $1,650,288 and $2,175,235 as of December 31, 2020 and June 30, 2020, respectively. The decrease in contract liabilities is primarily due to revenue recognized, offset, in part, by the advance collection of cash on specific contracts. The company used the practical expedient to expense incremental costs incurred to obtain a contract when the contract term is less than one year. The Company’s backlog at December 31, 2020 totaling $60.1 million is expected, based on expected due dates, to be recognized in the following fiscal years: 27% in 2021; 51% in 2022; 12% in 2023, and 10% thereafter.

Recently Issued Accounting Stan

Recently Issued Accounting Standards	6 Months Ended
	Dec. 31, 2020
Recently Issued Accounting Standards [Abstract]
Recently Issued Accounting Standards	Note 7. Recently Issued Accounting Standards Recent Accounting Pronouncements Adopted In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU is part of the FASB’s larger disclosure framework project intended to improve the effectiveness of financial statement footnote disclosure. ASU 2018-13 modifies required fair value disclosures related primarily to level 3 investments. This ASU is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The adoption of ASU 2018-13 does not have a material effect on the Company’s financial position, results of operations, and cash flows as our investments are currently Level 1. We will, however, continue to evaluate going forward should we obtain any Level 3 investments. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued guidance (ASU 2019-12) intended to simplify the accounting for income taxes. The amendments in this guidance are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 (the Company’s fiscal 2021), with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on the Company’s disclosures.

Employee Stock Ownership Plan

Employee Stock Ownership Plan	6 Months Ended
	Dec. 31, 2020
Employee Stock Ownership Plan [Abstract]
Employee Stock Ownership Plan	Note 8. Employee Stock Ownership Plan The Company sponsors a leveraged employee stock ownership plan (the "ESOP") that covers all nonunion employees who work 1,000 or more hours per year and are employed on June 30. Prior to December 1, 2020, the ESOP owned 469,119 shares, all of which were allocated to employees. On December 1, 2020, pursuant to a Stock Purchase Agreement dated as of such date, the Company, by selling 300,000 shares of its common stock, par value $0.33 1/3 per share, to the Espey Mfg. & Electronics Corp. Employee Stock Ownership Plan Trust, provided more shares to be allocated to employees for services rendered over the next 15 years. The ESOP paid $18.29 per share, for an aggregate purchase price of $5,487,000. The determination of the purchase price was based on a fairness opinion obtained by an independent valuation firm. The ESOP borrowed from the Corporation an amount equal to the purchase price. The loan will be repaid in fifteen (15) equal annual installments of principal. The Board of Directors has fixed the interest rate and the unpaid balance will bear interest at a fixed rate of 3.00% per annum. The Board of Directors of the Company had approved a purchase price per share equal to the lesser of the trading value on the day of closing or the lowest price listed in the valuation established by the independent valuation firm plus $0.25. The valuation identified a range of $18.04 - $19.43 per share. In making the sale, the Company relied on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, because the shares sold were offered only to the ESOP. After giving effect to the transaction, the ESOP owned 769,119 shares of the Company's 2,702,633 outstanding shares of common stock as of December 1, 2020. The Company makes annual contributions to the ESOP equal to the ESOP's debt service less dividends on unallocated shares received by the ESOP. All dividends on unallocated shares received by the ESOP are used to pay debt service. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings. As the debt is repaid, shares are released and allocated to active employees, based on the proportion of debt service paid in the year. The Company accounts for its ESOP in accordance with FASB ASC 718-40. Accordingly, the shares purchased by the ESOP are reported as Unearned ESOP shares in the balance sheets and the statements of changes in stockholders’ equity. As shares are released or committed-to-be-released, the Company reports compensation expense equal to the current average market price of the shares, and the shares become outstanding for earnings-per-share (EPS) computations. ESOP compensation expense was $56,274 and $77,987 for the three-month periods ended December 31, 2020 and 2019, respectively. ESOP compensation expense was $56,274 and $165,820 for the six-month periods ended December 31, 2020 and 2019, respectively. The ESOP shares as of December 31, 2020 and 2019 were as follows: December 31, 2020 December 31, 2019 Allocated shares 468,663 452,763 Committed-to-be-released shares 2,939 7,083 Unreleased shares 297,061 7,083 Total shares held by the ESOP 768,663 466,929 Fair value of unreleased shares $ 5,620,394 $ 152,993 The Company may at times be required to repurchase shares at the ESOP participants’ request at the fair market value. During the three and six months ended December 31, 2020 the Company did not repurchase shares previously held by the ESOP. During the three and six months ended December 31, 2019 the Company repurchased 1,847 and 2,180 shares previously held by the ESOP for $39,658 and $47,949, respectively. The ESOP allows for eligible participants to take whole share distributions from the Plan on specific dates in accordance with the provision of the Plan. Share distributions from the ESOP during the six months ended December 31, 2020 and 2019 totaled 456 and 2,180, respectively.

Investment Securities (Tables)

Investment Securities (Tables)	6 Months Ended
	Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-Sale Securities	The cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities by major security type at December 31, 2020 and June 30, 2020 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2020 Certificates of deposit $ 3,132,000 $ — $ — $ 3,132,000 Municipal bonds 70,744 369 — 71,113 Total investment securities $ 3,202,744 $ 369 $ — $ 3,203,113 June 30, 2020 Certificates of deposit $ 4,679,847 $ — $ — $ 4,679,847 Municipal bonds 462,618 1,243 (2,188 ) 461,673 Total investment securities $ 5,142,465 $ 1,243 $ (2,188 ) $ 5,141,520
Schedule of Contractual Maturities	As of December 31, 2020 and June 30, 2020, the remaining contractual maturities of available-for-sale securities were as follows: Years to Maturity Less than One to One Year Five Years Total December 31, 2020 Available-for-sale $ 3,203,113 $ — $ 3,203,113 June 30, 2020 Available-for-sale $ 5,141,520 $ — $ 5,141,520

Stock Based Compensation (Table

Stock Based Compensation (Tables)	6 Months Ended
	Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Schedule of Fair Value Assumptions	The table below outlines the weighted average assumptions that the Company used to calculate the fair value of each option award for the six months ended December 31, 2020 and 2019. December 31, 2020 December 31, 2019 Dividend yield 5.54 % 4.88% Company’s expected volatility 23.41% 27.81% Risk-free interest rate 0.36 % 1.67% Expected term 5.4 yrs 5.3 yrs Weighted average fair value per share of options granted during the period $1.59 $3.03
Schedule of Stock Option Activity	The following table summarizes stock option activity during the six months ended December 31, 2020: Employee Stock Options Plan Weighted Number of Weighted Average Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic to Option Price Term Value Balance at July 1, 2020 276,712 $ 24.30 $ 6.10 Granted 62,025 $ 18.05 9.81 Exercised — — — Forfeited or expired (23,400 ) $ 21.20 — Outstanding at December 31, 2020 315,337 $ 23.30 6.60 $ 53,962 Vested or expected to vest at December 31, 2020 297,286 $ 23.55 6.43 $ 44,882 Exercisable at December 31, 2020 205,187 $ 25.54 5.08 $ 0
Schedule of Changes in Non-Vested Stock Options	The following table summarizes changes in non-vested stock options during the six months ended December 31, 2020: Weighted Number Average of Shares Grant Date Subject Fair Value to Option (per Option) Non-vested at July 1, 2020 97,192 $ 4.034 Granted 62,025 $ 1.590 Vested (44,667 ) $ 5.140 Forfeited or expired (4,400 ) $ 3.797 Non-vested at December 31, 2020 110,150 $ 2.219

Employee Stock Ownership Plan (

Employee Stock Ownership Plan (Tables)	6 Months Ended
	Dec. 31, 2020
Employee Stock Ownership Plan [Abstract]
Schedule of ESOP shares	The ESOP shares as of December 31, 2020 and 2019 were as follows: December 31, 2020 December 31, 2019 Allocated shares 468,663 452,763 Committed-to-be-released shares 2,939 7,083 Unreleased shares 297,061 7,083 Total shares held by the ESOP 768,663 466,929 Fair value of unreleased shares $ 5,620,394 $ 152,993

Investment Securities (Schedule

Investment Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 3,202,744	$ 5,142,465
Gross Unrealized Gains	369	1,243
Gross Unrealized Losses		(2,188)
Fair Value	3,203,113	5,141,520
Certificates of Deposit [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	3,132,000	4,679,847
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	3,132,000	4,679,847
Municipal Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	70,744	462,618
Gross Unrealized Gains	369	1,243
Gross Unrealized Losses		(2,188)
Fair Value	$ 71,113	$ 461,673

Investment Securities (Schedu_2

Investment Securities (Schedule of Contractual Maturities) (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Contractual maturities of available-for-sale securities
Less than One Year	$ 3,203,113	$ 5,141,520
One to Five Years
Fair Value	$ 3,203,113	$ 5,141,520

Net (Loss) Income per Share (De

Net (Loss) Income per Share (Details) - shares	3 Months Ended		6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Net Income per Share [Abstract]
Anti-dilutive securities	315,337	184,342	253,312	184,342

Stock Based Compensation (Narra

Stock Based Compensation (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 33,707	$ 45,271	$ 80,874	$ 92,447
Deferred tax benefit related to stock based compensation	1,080	$ 2,483	3,808	$ 5,061
Unrecognized compensation costs	139,818		$ 139,818
Period in which compensation cost will be recognized			2 years
Deferred tax benefit related to unrecognized compensation costs	$ 7,712		$ 7,712
Granted			62,025
Outstanding	315,337		315,337		276,712
Cash divided paid	$ 0.25	$ 0.25	$ 0.50	$ 0.50
Total intrinsic values of the options exercised			$ 0	$ 263
2017 Plan [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			2 years
Expiration period			10 years
Authorized shares under plan	400,000		400,000
Granted			226,354
2017 Plan [Member] | Non employee directors [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized shares under plan	133,000		133,000
Percentage of total number of shares subject to options or awards, single fiscal year			33.33%
Number of shares subject to option or award, single fiscal year	13,300		13,300
2017 Plan [Member] | Individual Employee [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares subject to option or award, single fiscal year	15,000		15,000
2007 Plan [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding	119,750		119,750

Stock Based Compensation (Sched

Stock Based Compensation (Schedule of Fair Value Assumptions) (Details) - $ / shares	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Weighted average assumptions to calculation option fair value
Dividend yield	5.54%	4.88%
Company's expected volatility	23.41%	27.81%
Risk-free interest rate	0.36%	1.67%
Expected term	5 years 4 months 24 days	5 years 3 months 19 days
Weighted average fair value per share of options granted during the period	$ 1.59	$ 3.03

Stock Based Compensation (Sch_2

Stock Based Compensation (Schedule of Stock Option Activity) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2020	Jun. 30, 2020
Number of Shares Subject To Option
Balance at July 1, 2020	276,712
Granted	62,025
Exercised
Forfeited or expired	(23,400)
Outstanding at December 31, 2020	315,337	276,712
Vested or expected to vest at December 31, 2020	297,286
Exercisable at December 31, 2020	205,187
Weighted Average Exercise Price
Balance at July 1, 2020	$ 24.30
Granted	18.05
Exercised
Forfeited or expired	21.20
Outstanding at December 31, 2020	23.30	$ 24.30
Vested or expected to vest at December 31, 2020	23.55
Exercisable at December 31, 2020	$ 25.54
Weighted Average Remaining Contractual Term
Outstanding	6 years 7 months 6 days	6 years 1 month 6 days
Granted	9 years 9 months 22 days
Vested or expected to vest at December 31, 2020	6 years 5 months 5 days
Exercisable at December 31, 2020	5 years 29 days
Aggregate Intrinsic Value
Outstanding at December 31, 2020	$ 53,962
Vested or expected to vest at December 31, 2020	44,882
Exercisable at December 31, 2020	$ 0

Stock Based Compensation (Sch_3

Stock Based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details)	6 Months Ended
	Dec. 31, 2020$ / sharesshares
Number of Shares Subject to Option
Non-vested at July 1, 2020 | shares	97,192
Granted | shares	62,025
Vested | shares	(44,667)
Forfeited or expired | shares	(4,400)
Non-vested at December 31, 2020 | shares	110,150
Weighted Average Grant Date Fair Value (per Option)
Non-vested at July 1, 2020 | $ / shares	$ 4.034
Granted | $ / shares	1.590
Vested | $ / shares	5.140
Forfeited or expired | $ / shares	3.797
Non-vested at December 31, 2020 | $ / shares	$ 2.219

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Standby Letters of Credit [Member]
Contingent liabilities	$ 0	$ 0

Revenue (Details)

Revenue (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Jun. 30, 2020
Item Effected [Line Items]
Revenue	$ 6,962,065	$ 7,286,674	$ 14,227,580	$ 13,210,493
ASC 606 [Member]
Item Effected [Line Items]
Contract liabilities	1,650,288		1,650,288		$ 2,175,235
ASC 606 [Member] | Units Delivered [Member]
Item Effected [Line Items]
Revenue	5,865,878	5,702,565	11,724,584	10,820,879
ASC 606 [Member] | Milestones Achieved [Member]
Item Effected [Line Items]
Revenue	1,096,187	$ 1,584,109	2,502,996	$ 2,389,614
ASC 606 [Member] | Backlog [Member]
Item Effected [Line Items]
Intangible assets	$ 60,100,000		$ 60,100,000
Percentage of estimated shipments			27% in 2021; 51% in 2022; 12% in 2023, and 10% thereafter.

Employee Stock Ownership Plan_2

Employee Stock Ownership Plan (Narrative) (Details)	Dec. 01, 2020$ / sharesshares	Dec. 31, 2020USD ($)$ / sharesshares	Dec. 31, 2019USD ($)shares	Dec. 31, 2020USD ($)h$ / sharesshares	Dec. 31, 2019USD ($)shares	Sep. 30, 2020shares	Jun. 30, 2020shares	Sep. 30, 2019shares	Jun. 30, 2019shares
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of shares allocated to employees		468,663	452,763	468,663	452,763
Number of shares owned		768,663	466,929	768,663	466,929
Common stock, shares outstanding		2,702,633		2,702,633			2,402,633
ESOP compensation expense | $		$ 56,274	$ 77,987	$ 56,274	$ 165,820
Value of shares repurchased | $			$ 39,658		$ 47,949
Common Stock [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Common stock, shares outstanding		2,702,633	2,401,033	2,702,633	2,401,033	2,402,633	2,402,633	2,402,880	2,401,213
Shares repurchased			(1,847)		(2,180)
Shares distributed		300,000		300,000
Employee Stock Ownership Plan [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of hours worked per year to quality for the plan | h				1,000
Number of shares allocated to employees	469,119
Period of services rendered				15 years
Price per share | $ / shares		$ 18.29		$ 18.29
Aggregate purchase price | $				$ 5,487,000
Loan, frequency of periodic payment				annual
Number of loan repayment annual installments		15		15
Interest rate on loan		3.00%		3.00%
Purchase price per share, lower range limit | $ / shares				$ 18.04
Purchase price per share, upper range limit | $ / shares				$ 19.43
Number of shares owned	769,119
Common stock, shares outstanding	2,702,633
Shares repurchased			1,847		2,180
Value of shares repurchased | $			$ 39,658		$ 47,949
Shares distributed				456	2,180
Employee Stock Ownership Plan [Member] | Common Stock [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of shares sold	300,000
Sale of stock, price per share | $ / shares	$ 0.3333

Employee Stock Ownership Plan_3

Employee Stock Ownership Plan (Schedule of ESOP shares) (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Employee Stock Ownership Plan [Abstract]
Allocated shares	468,663	452,763
Committed-to-be-released shares	2,939	7,083
Unreleased shares	297,061	7,083
Total shares held by the ESOP	768,663	466,929
Fair value of unreleased shares	$ 5,620,394	$ 152,993