Atrion (ATRI) 10-Q 5 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 20, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	ATRION CORP
Entity Central Index Key	701,288
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
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		1,820,402
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Revenues	$ 36,215	$ 38,324
Cost of goods sold	18,650	19,800
Gross profit	17,565	18,524
Operating expenses:
Selling	1,735	1,520
General and administrative	3,949	3,958
Research and development	1,416	1,560
Operating Expenses, Total	7,100	7,038
Operating income	10,465	11,486
Interest income	123	177
Other income (expense), net	(345)	0
Nonoperating Income	(222)	177
Income before provision for income taxes	10,243	11,663
Provision for income taxes	(3,298)	(4,061)
Net income	$ 6,945	$ 7,602
Net income per basic share	$ 3.81	$ 4.05
Weighted average basic shares outstanding	1,823	1,875
Net income per diluted share	$ 3.76	$ 4.01
Weighted average diluted shares outstanding	1,849	1,895
Dividends per common share	$ 0.9	$ 0.75

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Statements Of Comprehensive Income
Net Income	$ 6,945	$ 7,602
Other Comprehensive loss: Unrealized income (loss) on investments, net of tax benefit of $37 in 2016 and net of tax expense of $62 in 2015	(68)	114
Comprehensive Income	$ 6,877	$ 7,716

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 27,947	$ 28,346
Short-term investments	39	44
Accounts receivable	21,717	16,620
Inventories	30,468	29,771
Prepaid expenses and other current assets	1,372	2,934
Deferred income taxes	580	580
Total Current Assets	82,123	78,295
Long-term investments	11,092	9,866
Property, plant and equipment	153,660	150,807
Less accumulated depreciation and amortization	89,548	87,493
Property plant and equipment net	64,112	63,314
Other assets and deferred charges:
Patents	2,131	2,193
Goodwill	9,730	9,730
Other	999	938
Prepaid Expense and Other Assets, Noncurrent, Total	12,860	12,861
Total assets	170,187	164,336
Current liabilities:
Accounts payable and accrued liabilities	8,500	8,987
Accrued income and other taxes	2,538	329
Total Current Liabilities	11,038	9,316
Line of credit	0	0
Other non-current liabilities	10,597	10,922
Stockholders' equity:
Common stock, par value $0.10 per share; authorized 10,000 shares, issued 3,420 shares	342	342
Paid-in capital	36,447	35,945
Accumulated other comprehensive income	215	283
Retained earnings	224,810	219,516
Treasury shares, 1,600 at March 31, 2016 and 1,596 at December 31, 2015, at cost	(113,262)	(111,988)
Total stockholders' equity	148,552	144,098
Total liabilities and stockholders' equity	$ 170,187	$ 164,336

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
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	1,600	1,596

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 6,945	$ 7,602
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,212	2,170
Deferred income taxes	(168)	412
Stock-based compensation	491	405
Impairment of investment	345	0
Net change in accrued interest, premiums, and discounts on investments	5	(98)
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities	9,830	10,491
Changes in operating assets and liabilities:
Accounts receivable	(5,097)	(4,445)
Inventories	(697)	1,275
Prepaid expenses	1,562	3,320
Other non-current assets	(62)	(166)
Accounts payable and accrued liabilities	(487)	(3,280)
Accrued income and other taxes	2,209	454
Other non-current liabilities	(120)	96
Net Cash Provided by (Used in) Operating Activities, Continuing Operations, Total	7,138	7,745
Cash flows from investing activities:
Property, plant and equipment additions	(2,947)	(2,661)
Purchase of investments	(1,676)	0
Proceeds from maturities of investments	0	8,400
Net Cash Provided by (Used in) Investing Activities, Continuing Operations, Total	(4,623)	5,739
Cash flows from financing activities:
Purchase of treasury stock	(1,276)	(16,985)
Dividends paid	(1,638)	(1,403)
Net Cash Provided by (Used in) Financing Activities, Continuing Operations, Total	(2,914)	(18,388)
Net change in cash and cash equivalents	(399)	(4,904)
Cash and cash equivalents at beginning of period	28,346	20,775
Cash and cash equivalents at end of period	27,947	28,346
Cash paid for:
Income taxes	$ 104	$ 87

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Other Comprehensive Income (Loss)	Retained Earnings	Total
Beginning Balance, shares at Dec. 31, 2015	1,824	1,596
Beginning Balance, amount at Dec. 31, 2015	$ 342	$ (111,988)	$ 35,945	$ 283	$ 219,516	$ 144,098
Net Income					6,945	6,945
Other comprehensive income				(68)		(68)
Stock-based compensation transactions, amount			502			502
Purchase of treasury stock, shares	(4)	4
Purchase of treasury stock, amount		$ (1,274)				(1,274)
Dividends					(1,651)	(1,651)
Ending Balance, Shares at Mar. 31, 2016	1,820	1,600
Ending Balance, Amount at Mar. 31, 2016	$ 342	$ (113,262)	$ 36,447	$ 215	$ 224,810	$ 148,552

1. Basis of Presentation

1. Basis of Presentation	3 Months Ended
	Mar. 31, 2016
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, 2015 ("2015 Form 10-K"). References herein to "Atrion," the "Company," "we," "our," and "us" refer to Atrion Corporation and its subsidiaries.

2. Inventories

2. Inventories	3 Months Ended
	Mar. 31, 2016
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): March 31, December 31, 2016 2015 Raw materials $ 13,230 $ 12,775 Work in process 7,182 6,557 Finished goods 10,056 10,439 Total inventories $ 30,468 $ 29,771

3. Income per share

3. Income per share	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Income per share	The following is the computation for basic and diluted income per share: Three months ended March 31, 2016 2015 (in thousands, except per share amounts) Net income $ 6,945 $ 7,602 Weighted average basic shares outstanding 1,823 1,875 Add: Effect of dilutive securities 26 20 Weighted average diluted shares outstanding 1,849 1,895 Earnings per share: Basic $ 3.81 $ 4.05 Diluted $ 3.76 $ 4.01 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. No shares of common stock for the quarters ended March 31, 2016 or March 31, 2015 were excluded from the computation of weighted average diluted shares outstanding because their effect would have been anti-dilutive.

4. Investments

4. Investments	3 Months Ended
	Mar. 31, 2016
Investments Schedule [Abstract]
Investments	As of March 31, 2016, 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 March 31, 2016 (in thousands): Gross Unrealized Cost Gains Losses Fair Value Short-term Investments: Corporate bonds $ 39 $ -- $ -- $ 39 Long-term Investments Corporate bonds $ 5,210 $ 1 $ -- $ 5,211 The amortized cost and fair value of our investments, and the related gross unrealized gains and losses, were as follows as of December 31, 2015 (in thousands): Gross Unrealized Cost Gains Losses Fair Value Short-term Investments: Corporate bonds $ 44 $ -- $ -- $ 44 Long-term Investments Corporate bonds $ 5,555 $ -- $ (30 ) $ 5,525 The above long-term corporate bonds represent investments in two issuers at March 31, 2016. One of these bonds experienced a significant decline in market value resulting from a major economic decline in its industry. In the fourth quarter of 2015, we determined based upon disclosures by the issuer that, more likely than not, we would be required to sell or exchange the bond before recovery of its amortized cost. Therefore, we then recorded an impairment loss on this long-term corporate bond reducing the carrying value of the bond to its market value at December 31, 2015. In the first quarter of 2016, this corporate bond experienced further declines. Therefore, we recorded an impairment loss on this bond of $345,000 reducing the carrying value of the bond to its market value at March 31, 2016. This loss is reported as other income (expense) on our income statement. The investment in the other issuer has not been in a loss position since December 31, 2015. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest our investment may not be recoverable. At March 31, 2016, the length of time until maturity of these securities ranged from 32 months to 43 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 March 31, 2016: Long-term Investments: Equity investments $ 5,552 $ 330 $ -- $ 5,882 Gross Unrealized Cost Gains Losses Fair value As of December 31, 2015: Long-term Investments: Equity investments $ 3,876 $ 435 $ -- $ 4,311

5. Recent Accounting Pronouncem

5. Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2016
Accounting Changes and Error Corrections [Abstract]
5. Recent Accounting Pronouncements	In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Stock Compensation (Topic718): Improvements to Employee Share-Based Payment Accounting. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers 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)	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Inventories	March 31, December 31, 2016 2015 Raw materials $ 13,230 $ 12,775 Work in process 7,182 6,557 Finished goods 10,056 10,439 Total inventories $ 30,468 $ 29,771

3. Income per share (Tables)

3. Income per share (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Computation for Basic and Diluted Income Per Share	Three months ended March 31, 2016 2015 (in thousands, except per share amounts) Net income $ 6,945 $ 7,602 Weighted average basic shares outstanding 1,823 1,875 Add: Effect of dilutive securities 26 20 Weighted average diluted shares outstanding 1,849 1,895 Earnings per share: Basic $ 3.81 $ 4.05 Diluted $ 3.76 $ 4.01

4. Investments (Tables)

4. Investments (Tables)	3 Months Ended
	Mar. 31, 2016
Investments Schedule [Abstract]
Investments, Held-to-Maturity Securities	The amortized cost and fair value of our investments, and the related gross unrealized gains and losses, were as follows as of March 31, 2016 (in thousands): Gross Unrealized Cost Gains Losses Fair Value Short-term Investments: Corporate bonds $ 39 $ -- $ -- $ 39 Long-term Investments Corporate bonds $ 5,210 $ 1 $ -- $ 5,211 The amortized cost and fair value of our investments, and the related gross unrealized gains and losses, were as follows as of December 31, 2015 (in thousands): Gross Unrealized Cost Gains Losses Fair Value Short-term Investments: Corporate bonds $ 44 $ -- $ -- $ 44 Long-term Investments Corporate bonds $ 5,555 $ -- $ (30 ) $ 5,525
Investments, Available for sale	Gross Unrealized Cost Gains Losses Fair value As of March 31, 2016: Long-term Investments: Equity investments $ 5,552 $ 330 $ -- $ 5,882 Gross Unrealized Cost Gains Losses Fair value As of December 31, 2015: Long-term Investments: Equity investments $ 3,876 $ 435 $ -- $ 4,311

2. Inventories (Details)

2. Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 13,230	$ 12,775
Work in process	7,182	6,557
Finished goods	10,056	10,439
Total inventories	$ 30,468	$ 29,771

3. Income Per Share (Details)

3. Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Earnings Per Share [Abstract]
Net income	$ 6,945	$ 7,602
Weighted average basic shares outstanding	1,823	1,875
Add: Effect of dilutive securities	26	20
Weighted average diluted shares outstanding	1,849	1,895
Earnings per share:
Basic	$ 3.81	$ 4.05
Diluted	$ 3.76	$ 4.01

3. Income per share (Details Na

3. Income per share (Details Narrative) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Earnings Per Share [Abstract]
Shares Excluded from Computation of Weighted average diluted Shares outstanding	0	0

4. Investments (Details)

4. Investments (Details) - Corporate Bond Securities [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Short Term Investments [Member]
Schedule of Held-to-maturity Securities [Line Items]
Cost	$ 39	$ 44
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	39	44
Long Term Investments [Member]
Schedule of Held-to-maturity Securities [Line Items]
Cost	5,210	5,555
Gross Unrealized Gains	1	0
Gross Unrealized Losses	0	(30)
Fair Value	$ 5,211	$ 5,525

4. Investments (Details 1)

4. Investments (Details 1) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Investments Details 1
Equity investment, cost	$ 5,552	$ 3,876
Equity investments, unrealized gains	330	435
Equity investments, unrealized losses	0	0
Equity investments, fair value	$ 5,882	$ 4,311

4. Investments (Details Narrati

4. Investments (Details Narrative)	3 Months Ended
	Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Securities maturity length	At March 31, 2016, the length of time until maturity of these securities ranged from 32 months to 43 months.