Atrion (ATRI) 10-Q 6 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 13, 2015
Document And Entity Information [Abstract]
Entity Registrant Name	ATRION CORP
Entity Central Index Key	701,288
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		1,823,614
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Revenues	$ 37,381	$ 36,625	$ 113,361	$ 108,069
Cost of goods sold	18,997	18,587	57,668	55,234
Gross profit	18,384	18,038	55,693	52,835
Operating expenses:
Selling	1,322	1,440	4,525	4,642
General and administrative	3,926	4,151	12,196	12,465
Research and development	1,563	1,221	4,792	3,545
Operating Expenses, Total	6,811	6,812	21,513	20,652
Operating income	11,573	11,226	34,180	32,183
Interest income	131	240	636	904
Other income, net	0	12	0	13
Nonoperating Income	131	252	636	917
Income before provision for income taxes	11,704	11,478	34,816	33,100
Provision for income taxes	(3,905)	(3,793)	(11,941)	(11,332)
Net income	$ 7,799	$ 7,685	$ 22,875	$ 21,768
Net income per basic share	$ 4.25	$ 3.94	$ 12.34	$ 11.08
Weighted average basic shares outstanding	1,836	1,949	1,853	1,964
Net income per diluted share	$ 4.19	$ 3.91	$ 12.19	$ 10.99
Weighted average diluted shares outstanding	1,860	1,966	1,876	1,980
Dividends per common share	$ 0.9	$ 0.75	$ 2.4	$ 2.03

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statements Of Comprehensive Income
Net Income	$ 7,799	$ 7,685	$ 22,875	$ 21,768
Other Comprehensive loss: Unrealized income on investments, net of tax expense of $59, $0, $238 and $0	109	0	442	0
Comprehensive Income	$ 7,908	$ 7,685	$ 23,317	$ 21,768

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 23,405	$ 20,775
Short-term investments	114	3,084
Accounts receivable	19,604	16,962
Inventories	29,202	28,022
Prepaid expenses and other current assets	2,788	4,720
Deferred income taxes	573	573
Total Current Assets	75,686	74,136
Long-term investments	12,145	21,760
Property, plant and equipment	147,728	142,171
Less accumulated depreciation and amortization	85,486	79,655
Property plant and equipment net	62,242	62,516
Other assets and deferred charges:
Patents	2,256	2,538
Goodwill	9,730	9,730
Other	877	834
Prepaid Expense and Other Assets, Noncurrent, Total	12,863	13,102
Total assets	162,936	171,514
Current liabilities:
Accounts payable and accrued liabilities	9,374	9,479
Accrued income and other taxes	1,294	457
Total Current Liabilities	10,668	9,936
Line of credit	0	0
Other non-current liabilities	13,057	12,008
Stockholders' equity:
Common stock, par value $0.10 per share; authorized 10,000 shares, issued 3,420 shares	342	342
Paid-in capital	35,542	33,940
Accumulated other comprehensive income/(loss)	197	(245)
Retained earnings	215,118	196,706
Treasury shares,1,595 at September 30, 2015 and 1,507 at December 31, 2014, at cost	(111,988)	(81,173)
Total stockholders' equity	139,211	149,570
Total liabilities and stockholders' equity	$ 162,936	$ 171,514

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.10	$ 0.10
Common stock, authorized	10,000	10,000
Common stock, issued	3,420	3,420
Treasury shares, shares	1,595	1,507

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 22,875	$ 21,768
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,663	6,696
Deferred income taxes	66	(1,463)
Stock-based compensation	1,454	1,836
Net change in accrued interest, premiums, and discounts on investments	33	242
Other	17	30
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities	31,108	29,109
Changes in operating assets and liabilities:
Accounts receivable	(2,642)	(4,235)
Inventories	(1,180)	(2,142)
Prepaid expenses	1,932	(371)
Other non-current assets	(212)	(70)
Accounts payable and accrued liabilities	(105)	1,380
Accrued income and other taxes	837	37
Other non-current liabilities	745	(448)
Net Cash Provided by (Used in) Operating Activities, Continuing Operations, Total	30,483	23,260
Cash flows from investing activities:
Property, plant and equipment additions	(6,123)	(8,641)
Purchase of investments	0	(19,375)
Proceeds from maturities of investments	13,400	19,375
Net Cash Provided by (Used in) Investing Activities, Continuing Operations, Total	7,277	(8,641)
Cash flows from financing activities:
Shares tendered for employees' withholding taxes on stock-based compensation	(154)	(377)
Tax benefit related to stock-based compensation	150	160
Purchase of treasury stock	(30,698)	(12,065)
Dividends paid	(4,428)	(3,975)
Net Cash Provided by (Used in) Financing Activities, Continuing Operations, Total	(35,130)	(16,257)
Net change in cash and cash equivalents	2,630	(1,638)
Cash and cash equivalents at beginning of period	20,775	28,559
Cash and cash equivalents at end of period	23,405	26,921
Cash paid for:
Income taxes	$ 8,278	$ 13,393

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Other Comprehensive Income (Loss)	Retained Earnings	Total
Beginning Balance, shares at Dec. 31, 2014	1,913	1,507
Beginning Balance, amount at Dec. 31, 2014	$ 342	$ (81,173)	$ 33,940	$ (245)	$ 196,706	$ 149,570
Net Income					22,875	22,875
Other comprehensive income				442		442
Tax benefit from stock-based compensation			150			150
Stock-based compensation transactions, shares	1	(1)
Stock-based compensation transactions, amount		$ 37	1,452			1,489
Shares surrendered in stock transactions		$ (154)				(154)
Purchase of treasury stock, shares	(89)	89
Purchase of treasury stock, amount		$ (30,698)				(30,698)
Dividends					(4,463)	(4,463)
Ending Balance, Shares at Sep. 30, 2015	1,825	1,595
Ending Balance, Amount at Sep. 30, 2015	$ 342	$ (111,988)	$ 35,542	$ 197	$ 215,118	$ 139,211

1. Basis of Presentation

1. Basis of Presentation	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited consolidated financial statements of Atrion Corporation and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, these statements include all adjustments necessary to present a fair statement of our consolidated results of operations, financial position and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. Preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and notes. Actual results could differ from those estimates. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014 ("2014 Form 10-K"). References herein to "Atrion," the "Company," "we," "our," and "us" refer to Atrion Corporation and its subsidiaries.

2. Inventories

2. Inventories	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Inventories	Inventories are stated at the lower of cost or market. Cost is determined by using the first-in, first-out method. The following table details the major components of inventories (in thousands): September 30, December 31, 2015 2014 Raw materials $ 12,734 $ 12,575 Work in process 7,394 5,600 Finished goods 9,074 9,847 Total inventories $ 29,202 $ 28,022

3. Income per share

3. Income per share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Income per share	The following is the computation for basic and diluted income per share: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands, except per share amounts) Net income $ 7,799 $ 7,685 $ 22,875 $ 21,768 Weighted average basic shares outstanding 1,836 1,949 1,853 1,964 Add: Effect of dilutive securities 24 17 23 16 Weighted average diluted shares outstanding 1,860 1,966 1,876 1,980 Earnings per share: Basic $ 4.25 $ 3.94 $ 12.34 $ 11.08 Diluted $ 4.19 $ 3.91 $ 12.19 $ 10.99 Incremental shares from stock options and restricted stock units were included in the calculation of weighted average diluted shares outstanding using the treasury stock method. There were no dilutive securities representing shares of common stock for the quarters ended September 30, 2015 and 2014 that were excluded from the computation of weighted average diluted shares outstanding because their effect would have been anti-dilutive.

4. Investments

4. Investments	9 Months Ended
	Sep. 30, 2015
Investments Schedule [Abstract]
Investments	As of September 30, 2015, we held certain investments that are required to be measured for disclosure purposes at fair value on a recurring basis. These investments are considered Level 2 investments and are all considered to be held-to-maturity securities. We consider as current assets those investments which will mature in the next 12 months. The remaining investments are considered non-current assets. The amortized cost and fair value of our investments, and the related gross unrealized gains and losses, were as follows as of September 30, 2015 (in thousands): Gross Unrealized Cost Gains Losses Fair Value Short-term Investments: Corporate bonds $ 114 $ -- $ -- $ 114 Long-term Investments Corporate bonds $ 7,966 $ $ (2,186 ) $ 5,780 The above long-term corporate bonds represent investments in two issuers. One of these securities has experienced a decline in value since its acquisition date in the fourth quarter of 2014. This decline relates to a changed outlook due to major economic declines in its industry. The total carrying value of this investment is reviewed quarterly for changes in circumstances or the occurrence of events that suggest our investment may not be recoverable. We currently expect full recovery of our amortized cost in this security based on our assessment of the credit quality of the underlying collateral and credit support available to the issuer. Based on our evaluation of the creditworthiness of the issuer and because we do not intend to sell the investment, nor is it likely that we would be required to sell this investment, before recovery of its amortized cost base, which may be maturity, none of the unrealized loss is considered to be other than temporary. At September 30, 2015, the length of time until maturity of these securities ranged from 39 to 50 months. None of the above investments has been in a loss position for more than twelve months. The cost and fair value of our investments that are being accounted for as available-for-sale securities, and the related gross unrealized gain reflected in accumulated other comprehensive income, were as follows as of the dates shown below (in thousands): Gross Unrealized Cost Gains Losses Fair value As of September 30, 2015: Long-term Investments: Equity investments $ 3,876 $ 303 $ -- $ 4,179

5. Recent Accounting Pronouncem

5. Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2015
Accounting Changes and Error Corrections [Abstract]
5. Recent Accounting Pronouncements	From time to time, new accounting standards updates applicable to us are issued by the Financial Accounting Standards Board, or FASB, which we will adopt as of the specified effective date. Unless otherwise discussed, we believe the impact of recently issued standards updates that are not yet effective will not have a material impact on our consolidated financial statements upon adoption.

2. Inventories (Tables)

2. Inventories (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Inventories	September 30, December 31, 2015 2014 Raw materials $ 12,734 $ 12,575 Work in process 7,394 5,600 Finished goods 9,074 9,847 Total inventories $ 29,202 $ 28,022

3. Income per share (Tables)

3. Income per share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Computation for Basic and Diluted Income Per Share	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands, except per share amounts) Net income $ 7,799 $ 7,685 $ 22,875 $ 21,768 Weighted average basic shares outstanding 1,836 1,949 1,853 1,964 Add: Effect of dilutive securities 24 17 23 16 Weighted average diluted shares outstanding 1,860 1,966 1,876 1,980 Earnings per share: Basic $ 4.25 $ 3.94 $ 12.34 $ 11.08 Diluted $ 4.19 $ 3.91 $ 12.19 $ 10.99

4. Investments (Tables)

4. Investments (Tables)	9 Months Ended
	Sep. 30, 2015
Investments Schedule [Abstract]
Investments, Held-to-Maturity Securities	Gross Unrealized Cost Gains Losses Fair Value Short-term Investments: Corporate bonds $ 114 $ -- $ -- $ 114 Long-term Investments Corporate bonds $ 7,966 $ $ (2,186 ) $ 5,780
Investments, Available for sale	Gross Unrealized Cost Gains Losses Fair value As of September 30, 2015: Long-term Investments: Equity investments $ 3,876 $ 303 $ -- $ 4,179

2. Inventories (Details)

2. Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials	$ 12,734	$ 12,575
Work in process	7,394	5,600
Finished goods	9,074	9,847
Total inventories	$ 29,202	$ 28,022

3. Income Per Share (Details)

3. Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Net income	$ 7,799	$ 7,685	$ 22,875	$ 21,768
Weighted average basic shares outstanding	1,836	1,949	1,853	1,964
Add: Effect of dilutive securities	24	17	23	16
Weighted average diluted shares outstanding	1,860	1,966	1,876	1,980
Earnings per share:
Basic	$ 4.25	$ 3.94	$ 12.34	$ 11.08
Diluted	$ 4.19	$ 3.91	$ 12.19	$ 10.99

3. Income per share (Details Na

3. Income per share (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Shares Excluded from Computation of Weighted average diluted Shares outstanding	0	0	0	0

4. Investments (Details)

4. Investments (Details) - Corporate Bond Securities [Member] $ in Thousands	Sep. 30, 2015USD ($)
Short Term Investments [Member]
Schedule of Held-to-maturity Securities [Line Items]
Cost	$ 114
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Fair Value	114
Long Term Investments [Member]
Schedule of Held-to-maturity Securities [Line Items]
Cost	7,966
Gross Unrealized Gains	0
Gross Unrealized Losses	(2,186)
Fair Value	$ 5,780

4. Investments (Details 1)

4. Investments (Details 1) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Investments Details 1
Equity investment, cost	$ 3,876
Equity investments, unrealized gains	303
Equity investments, unrealized losses	0
Equity investments, fair value	$ 4,179

4. Investments (Details Narrati

4. Investments (Details Narrative)	9 Months Ended
	Sep. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Securities maturity length	39 to 50 months