Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 04, 2022 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0000722313 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity Registrant Name | NORTECH SYSTEMS INCORPORATED | |
Entity File Number | 0-13257 | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-1681094 | |
Entity Address, Address Line One | 7550 Meridian Circle N., Suite # 150 | |
Entity Address, City or Town | Maple Grove | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55369 | |
City Area Code | (952) | |
Local Phone Number | 345-2244 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | NSYS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,690,634 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net Sales | $ 35,276 | $ 29,452 | $ 98,505 | $ 81,706 |
Cost of Goods Sold | 28,948 | 21,411 | 83,129 | 68,519 |
Gross Profit | 6,328 | 8,041 | 15,376 | 13,187 |
Operating Expenses | ||||
Selling Expenses | 959 | 449 | 2,752 | 1,741 |
General and Administrative Expenses | 2,949 | 2,045 | 8,346 | 7,247 |
Research and Development Expenses | 475 | 141 | 1,154 | 348 |
Restructuring Charges | 0 | 23 | 0 | 319 |
Loss on Abandonment of Intangible Assets | 0 | 560 | 0 | 560 |
Gain on Sale of Assets | 0 | (93) | (15) | (176) |
Total Operating Expenses | 4,383 | 3,125 | 12,237 | 10,039 |
Income From Operations | 1,945 | 4,916 | 3,139 | 3,148 |
Other Expense | ||||
Interest Expense | (122) | (112) | (337) | (314) |
Income Before Income Taxes | 1,823 | 4,804 | 2,802 | 2,834 |
Income Tax Expense | 289 | 1,247 | 411 | 646 |
Net Income | $ 1,534 | $ 3,557 | $ 2,391 | $ 2,188 |
Net Income Per Common Share: | ||||
Basic (in dollars per share) (in dollars per share) | $ 0.57 | $ 1.33 | $ 0.89 | $ 0.82 |
Weighted Average Number of Common Shares Outstanding - Basic (in shares) (in shares) | 2,686,884 | 2,665,682 | 2,683,594 | 2,662,066 |
Diluted (in dollars per share) (in dollars per share) | $ 0.53 | $ 1.24 | $ 0.83 | $ 0.78 |
Weighted Average Number of Common Shares Outstanding - Diluted (in shares) (in shares) | 2,899,526 | 2,880,073 | 2,886,073 | 2,806,958 |
Other comprehensive income | ||||
Foreign currency translation | $ (365) | $ (5) | $ (604) | $ 20 |
Comprehensive income, net of tax | $ 1,169 | $ 3,552 | $ 1,787 | $ 2,208 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
Current Assets | |||
Cash | $ 1,300 | $ 643 | [1] |
Restricted Cash | 792 | 1,582 | [1] |
Accounts Receivable, less allowances of $257 and $328 | 15,497 | 14,548 | [1] |
Employee Retention Credit Receivable | 5,209 | 5,209 | [1] |
Inventories, Net | 23,610 | 19,434 | [1] |
Contract Assets | 9,886 | 8,698 | [1] |
Prepaid Expenses and Other Current Assets | 1,851 | 1,660 | [1] |
Total Current Assets | 58,145 | 51,774 | [1] |
Property and Equipment, Net | 6,457 | 5,833 | [1] |
Operating Lease Assets | 8,079 | 8,983 | [1] |
Other Intangible Assets, Net | 433 | 501 | [1] |
Total Assets | 73,114 | 67,091 | [1] |
Current Liabilities | |||
Current Portion of Finance Lease Obligations | 390 | 601 | [1] |
Current Portion of Operating Lease Obligations | 1,113 | 1,043 | [1] |
Accounts Payable | 14,701 | 12,710 | [1] |
Accrued Payroll and Commissions | 5,116 | 4,045 | [1] |
Customer Deposits | 3,870 | 2,936 | [1] |
Other Accrued Liabilities | 1,380 | 971 | [1] |
Total Current Liabilities | 26,570 | 22,306 | [1] |
Long-Term Liabilities | |||
Long Term Line of Credit | 9,826 | 8,959 | [1] |
Long Term Finance Lease Obligations, Net | 639 | 916 | [1] |
Long-Term Operating Lease Obligations, Net | 7,797 | 8,695 | [1] |
Other Long-Term Liabilities | 99 | 104 | [1] |
Total Long-Term Liabilities | 18,361 | 18,674 | [1] |
Total Liabilities | 44,931 | 40,980 | [1] |
Commitments and contingencies | |||
Shareholders' Equity | |||
Preferred Stock, $1 par value; 1,000,000 Shares Authorized: 250,000 Shares Issued and Outstanding | 250 | 250 | [1] |
Common Stock - $0.01 par value; 9,000,000 Shares Authorized: 2,683,513 and 2,672,064 Shares Issued and Outstanding, respectively | 27 | 27 | [1] |
Additional Paid-In Capital | 16,247 | 15,962 | [1] |
Accumulated Other Comprehensive (Income) Loss | (548) | 56 | [1] |
Retained Earnings | 12,207 | 9,816 | [1] |
Total Shareholders' Equity | 28,183 | 26,111 | [1] |
Total Liabilities and Shareholders' Equity | $ 73,114 | $ 67,091 | [1] |
[1]The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited)-parentheticals (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts receivable allowance | $ 257 | $ 328 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, Shares Authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 250,000 | 250,000 |
Preferred Stock, Shares Issued (in shares) | 250,000 | 250,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 9,000,000 | 9,000,000 |
Common stock, shares outstanding (in shares) | 2,683,513 | 2,672,064 |
Common stock, shares issued (in shares) | 2,683,513 | 2,672,064 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $ 2,391 | $ 2,188 |
Adjustments to Reconcile Net Income to Net Cash | ||
Depreciation and Amortization | 1,440 | 1,506 |
Compensation on Stock-Based Awards | 234 | 201 |
Change in Accounts Receivable Allowance | (71) | 18 |
Change in Inventory Reserves | (54) | (959) |
Loss on Abandonment of Intangible Assets | 0 | 560 |
Gain on Disposal of Property and Equipment | (15) | (176) |
Changes in Current Operating Items | ||
Accounts Receivable | (1,115) | 1,686 |
Employee Retention Credit Receivable | 0 | (5,209) |
Inventories | (4,402) | (5,755) |
Contract Assets | (1,188) | (2,246) |
Prepaid Expenses and other Curent Assets | (213) | (276) |
Income Taxes | (67) | 708 |
Accounts Payable | 1,659 | 2,901 |
Accrued Payroll and Commissions | 1,071 | 1,537 |
Other Accrued Liabilities | 1,330 | 464 |
Net Cash Provided By (Used In) Operating Activities | 1,000 | (2,852) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from Sale of Property and Equipment | 15 | 626 |
Purchase of Intangible Asset | (43) | (49) |
Purchases of Property and Equipment | (1,687) | (1,198) |
Net Cash Used In Investing Activities | (1,715) | (621) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net Change in Line of Credit | 857 | 2,681 |
Principal Payments on Long-Term Debt | 0 | (873) |
Principal Payments on Financing Leases | (336) | (492) |
Debt Issuance Costs | 10 | 0 |
Stock Option Excercises | 51 | 36 |
Net Cash Provided By Financing Activities | 582 | 1,352 |
Net Change in Cash and Cash Equivalents | (133) | (2,121) |
Cash and Cash Equivalents - Beginning of Period | 2,225 | 3,564 |
Cash and Cash Equivalents - End of Period | 2,092 | 1,443 |
Reconciliation of cash and restricted cash reported within the consolidated balance sheets | ||
Cash | 1,300 | 444 |
Restricted Cash | 792 | 999 |
Total Cash and restricted cash reported in the consolidated statements of cash flows | 2,092 | 1,443 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash Paid During the Period for Interest | 328 | 220 |
Cash Paid (Refunded) During the Period for Income Taxes | 122 | (114) |
Supplemental Noncash Investing and Financing Activities: | ||
Property and Equipment Purchases in Accounts Payable | 332 | 0 |
Property Acquired Under Operating Lease | $ 0 | $ 858 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total | |
BALANCE JUNE 30, 2021 at Dec. 31, 2020 | $ 250 | $ 27 | $ 15,816 | $ (37) | $ 2,662 | $ 18,718 | |
Net Income | 0 | 0 | 0 | 0 | 2,188 | 2,188 | |
Foreign currency translation adjustment | 0 | 0 | 0 | 20 | 0 | 20 | |
Stock option exercises | 36 | 36 | |||||
Compensation on stock-based awards | 0 | 0 | 74 | 0 | 0 | 74 | |
BALANCE SEPTEMBER 30, 2021 at Sep. 30, 2021 | 250 | 27 | 15,926 | (17) | 4,850 | 21,036 | |
BALANCE JUNE 30, 2021 at Jun. 30, 2021 | 250 | 27 | 15,862 | (12) | 1,293 | 17,420 | |
Net Income | 0 | 0 | 0 | 0 | 3,557 | 3,557 | |
Foreign currency translation adjustment | 0 | 0 | 0 | (5) | 0 | (5) | |
Stock option exercises | 36 | 36 | |||||
Compensation on stock-based awards | 0 | 0 | 28 | 0 | 0 | 28 | |
BALANCE SEPTEMBER 30, 2021 at Sep. 30, 2021 | 250 | 27 | 15,926 | (17) | 4,850 | 21,036 | |
BALANCE JUNE 30, 2021 at Dec. 31, 2021 | 250 | 27 | 15,962 | 56 | 9,816 | 26,111 | [1] |
Net Income | 0 | 0 | 0 | 0 | 2,391 | 2,391 | |
Foreign currency translation adjustment | 0 | 0 | 0 | (604) | 0 | (604) | |
Stock option exercises | 0 | 0 | 51 | 0 | 0 | 51 | |
Compensation on stock-based awards | 0 | 0 | 234 | 0 | 0 | 234 | |
BALANCE SEPTEMBER 30, 2021 at Sep. 30, 2022 | 250 | 27 | 16,247 | (548) | 12,207 | 28,183 | |
BALANCE JUNE 30, 2021 at Jun. 30, 2022 | 250 | 27 | 16,136 | (183) | 10,673 | 26,903 | |
Net Income | 0 | 0 | 0 | 0 | 1,534 | 1,534 | |
Foreign currency translation adjustment | 0 | 0 | 0 | (365) | 0 | (365) | |
Stock option exercises | 0 | 0 | 18 | 0 | 0 | 18 | |
Compensation on stock-based awards | 0 | 0 | 93 | 0 | 0 | 93 | |
BALANCE SEPTEMBER 30, 2021 at Sep. 30, 2022 | $ 250 | $ 27 | $ 16,247 | $ (548) | $ 12,207 | $ 28,183 | |
[1]The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date |
Note 1 - Summary of Significant
Note 1 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Basis of Presentation and Significant Accounting Policies [Text Block] | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements for the interim periods have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the financial information and footnotes required by GAAP for complete financial statements, although we believe the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year or for any other interim period. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In preparing these condensed consolidated financial statements, we have made our best estimates and judgments of certain amounts included in the condensed consolidated financial statements, giving due consideration to materiality. Changes in the estimates and assumptions used by us could have a significant impact on our financial results, since actual results could differ from those estimates. Principles of Consolidation The condensed consolidated financial statements include the accounts of Nortech Systems Incorporated and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Revenue Recognition Our revenue is comprised of product, engineering services and repair services. All revenue is recognized when the Company satisfies its performance obligation(s) under the contract by transferring the promised product or service to our customer either when (or as) our customer obtains control of the product or service, with the majority of our revenue being recognized over time including goods produced under contract manufacturing agreements and services revenue. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. The majority of our contracts have a single performance obligation. Revenue is recorded net of returns, allowances and customer discounts. Our net sales for services were less than 10% of our total sales for all periods presented, and accordingly, are included in net sales in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis. Shipping and handling costs charged to our customers are included in net sales, while the corresponding shipping expenses are included in cost of goods sold. Customer deposits represent cash received in advance of revenue earned. Stock-Based Awards Stock Options In May 2017, the shareholders approved the 2017 Stock Incentive Plan which authorized the issuance of 350,000 shares. An additional 50,000 and 175,000 shares were authorized by the shareholders in March 2020 and May 2022, respectively. We granted 0 and 21,000 market condition options to our Chief Executive Officer during the three and nine months ended September 30, 2022, respectively. The market condition options vest if certain stock prices are exceeded between February 27, 2024 and February 27, 2028. We granted 3,000 and 69,000 service-based options during the three and nine months ended September 30, 2022, respectively. Total option grants for the three and nine months ended September 30, 2022 were 3,000 and 90,000, respectively. There were 27,000 stock options granted during the nine months ended September 30, 2021. Total compensation expense related to stock options was $62 and $168 for the three and nine months ended September 30, 2022, respectively. Total compensation expense related to stock options was $28 and $74 for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, there was $810 of unrecognized compensation which will vest over the next 3.86 years. Following is the status of all stock options as of September 30, 2022: Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding - January 1, 2022 387,500 $ 4.57 Granted 90,000 11.13 Exercised (19,800 ) 3.40 Cancelled (8,000 ) 3.38 Outstanding - September 30, 2022 449,700 $ 5.93 7.10 $ 2,137 Exercisable - September 30, 2022 213,500 $ 3.95 5.90 $ 1,407 Restricted Stock Units During the three and nine months ended September 30, 2022, we granted 0 and 21,000 restricted stock units (“RSUs”), respectively, under our 2017 Stock Incentive Plan to non-employee directors which vest over two no No Equity Appreciation Rights Plan In November 2010, the Board of Directors adopted the Nortech Systems Incorporated Equity Appreciation Rights Plan (“2010 Plan”). The total number of Equity Appreciation Right Units (“Units”) that can be issued under the 2010 Plan shall not exceed an aggregate of 1,000,000 Units as amended and restated on March 11, 2015. There were no The 100,000 units outstanding at December 31, 2021 were paid on March 29, 2022. There are no Net Income per Common Share Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted net income per common share assumes the exercise and issuance of all potential common stock equivalents in computing the weighted-average number of common shares outstanding, unless their effect is antidilutive. All stock options and restricted stock units, while outstanding, are considered common stock equivalents. For the three and nine months ended September 30, 2022, stock options of 212,643 and 202,479, respectively were included in the computation of diluted net income per common share as their impact were dilutive. For the three and nine months ended September 30, 2021, stock options of 214,391 and 144,892, respectively, were included in the computation of diluted income per common share amount as their impact were dilutive. We had outstanding stock options totaling 34,211 that are not considered in the computation of diluted net income per share as their effect would have been anti-dilutive for the three months ended September 30, 2022. We had average outstanding stock options totaling 44,070 that are not considered in the computation of diluted net income per share as their effect would have been anti-dilutive for the nine months ended September 30, 2022. Outstanding stock options totaling 0 and 221 are not considered in the computation of diluted net income per share for the three and nine months ended September 30, 2021, respectively. Restricted Cash Cash and cash equivalents classified as restricted cash on our consolidated balance sheets are restricted as to withdrawal or use under the terms of certain contractual agreements. As of September 30, 2022, we had outstanding letters of credit for $400. Restricted cash as of September 30, 2022 was $792, which includes lockbox deposits that are temporarily restricted due to timing at the period end. The lockbox deposits are applied against our line of credit the next business day. Accounts Receivable and Allowance for Doubtful Accounts Credit is extended based upon an evaluation of the customer’s financial condition and, while collateral is not required, the Company periodically receives surety bonds that guarantee payment. Credit terms are consistent with industry standards and practices. Trade accounts receivable have been reduced by an allowance for doubtful accounts of $257 at September 30, 2022 and $328 at December 31, 2021. Inventories Inventories are stated at the lower of average cost (which approximates first-in, first out) or net realizable value. Costs include material, labor, and overhead required in the warehousing and production of our products. Inventory reserves are maintained for the estimated value of the inventories that may have a lower value than stated or quantities in excess of future production needs. Inventories are as follows: September 30, December 31, 2022 2021 Raw Materials $ 22,520 $ 18,492 Work in Process 1,719 1,678 Finished Goods 615 562 Reserves (1,244 ) (1,298 ) Total $ 23,610 $ 19,434 Other Intangible Assets Other intangible assets at September 30, 2022 and December 31, 2021 are as follows: Customer Relationships Trade Names Patents Total Balance at January 1, 2021 $ 507 $ 589 $ 77 $ 1,173 Additions - - 64 64 Amortization 147 29 - 176 Abandonment Loss - 560 - 560 Balance at December 31, 2021 360 - 141 501 Additions - - 43 43 Amortization 108 - 3 111 Balance at September 30, 2022 $ 252 $ - $ 181 $ 433 Intangible assets are amortized on a straight-line basis over their estimated useful lives. The weighted-average remaining amortization period of our in-use intangible asset is 2.1 years. In-process patents are not amortized until the patent is received. At September 30, 2022, patents totaling $96 had been received while $85 of patents were in-process. Amortization expense of finite life intangible assets for the three and nine months ended September 30, 2022 was $40 and $111, respectively. Amortization expense for the three and nine months ended September 30, 2021 was $45 and $139, respectively. Estimated future annual amortization expense (not including patents in process) related to these assets is approximately as follows: Year Amount Remainder of 2022 $ 40 2023 159 2024 86 2025 14 Thereafter 49 Total $ 348 Accounting Pronouncements Issued But Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. This guidance introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The ASU also provides updated guidance regarding the impairment of available-for-sale debt securities and includes additional disclosure requirements. The new guidance is effective for public business entities that meet the definition of a Smaller Reporting Company as defined by the SEC for interim and annual periods beginning after December 15, 2022. Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. |
Note 2 - Concentration of Credi
Note 2 - Concentration of Credit Risk and Major Customers | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | NOTE 2. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and accounts receivable. With regard to cash, we maintain our excess cash balances in checking accounts at primarily two one one We have certain customers whose revenue individually represented 10% or more of net sales, or whose accounts receivable balances individually represented 10% or more of total accounts receivable. One two one At September 30, 2022, two one Export sales represented approximately 4% of net sales for both the three and nine months ended September 30, 2022. Export sales represented approximately 3% of net sales for the three and nine months ended September 30, 2021 respectively. |
Note 3 - Revenue
Note 3 - Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Revenue from Contract with Customer [Text Block] | NOTE 3. REVENUE Revenue recognition Our revenue is comprised of product, engineering services and repair services. All revenue is recognized when the Company satisfies its performance obligation(s) under the contract by transferring the promised product or service to our customer either when (or as) our customer obtains control of the product or service, with the majority of our revenue being recognized over time including goods produced under contract manufacturing agreements and services revenue. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. The majority of our contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances and customer discounts. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis. Shipping and handling costs are included in cost of goods sold. The majority of our revenue is derived from the transfer of goods produced under contract manufacturing agreements which have no alternative use and we have an enforceable right to payment for our performance completed to date. Our performance obligations within our contract manufacturing agreements are generally satisfied over time as the goods are produced based on customer specifications and we have an enforceable right to payment for the goods produced. If these requirements are not met, the revenue is recognized at a point in time, generally upon shipment. Revenue under contract manufacturing agreements that was recognized over time accounted for approximately 74% of our revenue for both the three and nine months ended September 30, 2022 and 82% and 80% of our revenue for the three and nine months ended September 30, 2021, respectively. Revenues under these agreements are generally recognized over time using an input measure based upon the proportion of actual costs incurred. Accounting for contract manufacturing agreements involves the use of various techniques to estimate total revenue and costs. We estimate profit on these agreements as the difference between total estimated revenue and expected costs to complete the performance obligation within the terms of the agreement and recognize the respective profit as the goods are produced. The estimates to determine the profit earned on the performance obligation are based on anticipated selling prices and historical cost of goods sold and represent our best judgement at the time. Changes in judgements on these above estimates could impact the timing and amount of revenue recognized with a resulting impact on the timing and amount of associated profit. On occasion our customers provide materials to be used in the manufacturing process and the fair value of the materials is included in revenue as noncash consideration at the point in time when the manufacturing process commences along with the same corresponding amount recorded as cost of goods sold. The inclusion of noncash consideration has no impact on overall profitability. Contract Assets Contract assets, recorded as such in the Condensed Consolidated Balance Sheets, consist of unbilled amounts related to revenue recognized over time. Significant changes in the contract assets balance during the nine months ended September 30, 2022 was as follows (in thousands): Balance outstanding at December 31, 2021 $ 8,698 Increase (decrease) attributed to: Amounts transferred over time to contract assets 72,536 Amounts invoiced during the period (71,348 ) Balance outstanding at September 30, 2022 $ 9,886 We expect substantially all the remaining performance obligations for the contract assets recorded as of September 30, 2022 to be transferred to receivables within 90 days, with the majority of any remaining amounts to be transferred within 180 days. We bill our customers upon shipment with payment terms of up to 120 days. The following tables summarize our net sales by timing of transfer of goods and services by market: Three Months Ended September 30, 2022 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 14,753 $ 5,366 $ 420 $ 20,539 Industrial 8,104 2,314 420 10,838 Aerospace and Defense 3,202 493 204 3,899 Total net sales $ 26,059 $ 8,173 $ 1,044 $ 35,276 Nine Months Ended September 30, 2022 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 37,725 $ 15,044 $ 1,574 $ 54,343 Industrial 21,563 6,301 1,095 28,959 Aerospace and Defense 13,248 1,254 701 15,203 Total net sales $ 72,536 $ 22,599 $ 3,370 $ 98,505 Three Months Ended September 30, 2021 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 13,762 $ 2,933 $ 282 $ 16,977 Industrial 7,468 1,757 158 9,383 Aerospace and Defense 2,883 144 65 3,092 Total net sales $ 24,113 $ 4,834 $ 505 $ 29,452 Nine Months Ended September 30, 2021 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 35,497 $ 8,876 $ 1,017 $ 45,390 Industrial 20,385 4,832 560 25,777 Aerospace and Defense 9,685 527 327 10,539 Total net sales $ 65,567 $ 14,235 $ 1,904 $ 81,706 |
Note 4 - Financing Arrangements
Note 4 - Financing Arrangements | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | NOTE 4. FINANCING ARRANGEMENTS We have a credit agreement with Bank of America which was entered into on June 15, 2017 and provides for a line of credit arrangement of $16,000 that expires on June 15, 2026. Under the amended Bank of America credit agreement signed December 31, 2021, the line of credit is subject to variations in the Bloomberg Short-Term Bank Yield (BSBY) index rate. Our line of credit bears interest at a weighted-average interest rate of 4.1% and 3.5% as of September 30, 2022 and December 31, 2021, respectively. We had borrowings on our line of credit of $9,873 and $9,016 as of September 30, 2022 and December 31, 2021, respectively. There are no subjective acceleration clauses under the credit agreement that would accelerate the maturity of our outstanding borrowings. The line of credit is shown net of debt issuance costs of $48 and $58 on the consolidated balance sheet for the periods ended September 30, 2022 and December 31, 2021, respectively. The line of credit with Bank of America contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures. The Bank of America Credit Agreement provides for, among other things, a Fixed Charge Coverage Ratio of not less than 1.0 to 1.0 for the twelve months ended at each Fiscal Quarter end subject only during a trigger period commencing when our availability under our line is less than $2,000 until availability is above that amount for 30 days. As of September 30, 2022 the Company was in compliance with its covenants. At September 30, 2022, we had unused availability under our line of credit of $5,827 supported by our borrowing base. The line is secured by substantially all of our assets. In the first quarter of 2022, we amended our credit agreement to include the Employee Retention Credit Receivable as security in our line of credit which improved our unused availability. In the third quarter of 2022, we amended our credit agreement to extend the inclusion of the Employee Retention Credit Receivable through December 31, 2022. |
Note 5 - Leases
Note 5 - Leases | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Lease Disclosure [Text Block] | NOTE 5. LEASES We have operating leases for certain manufacturing sites, office space, and equipment. Most leases include the option to renew, with renewal terms that can extend the lease term from one five The components of lease expense were as follows: Three Months Ended September 30, Three Months Ended September 30, Lease Cost 2022 2021 Operating lease cost $ 572 $ 576 Finance lease interest cost 14 18 Finance lease amortization expense 182 163 Total lease cost $ 768 $ 757 Nine Months Ended September 30, Nine Months ended September 30, Lease Cost 2022 2021 Operating lease cost $ 1,731 $ 1,696 Finance lease interest cost 50 61 Finance lease amortization expense 547 489 Total lease cost $ 2,328 $ 2,246 Supplemental balance sheet information related to leases was as follows: Balance Sheet Location September 30, 2022 December 31, 2021 Assets Operating lease assets Operating lease assets $ 8,079 $ 8,983 Finance lease assets Property, plant and equipment 1,505 2,052 Total leased assets $ 9,584 $ 11,035 Supplemental cash flow information related to leases was as follows: September 30, September 30, 2022 2021 Operating leases Cash paid for amounts included in the measurement of lease liabilities $ 1,279 $ 861 Right-of-use assets obtained in exchange for lease obligations $ - $ 858 Maturities of lease liabilities were as follows: Operating Leases Finance Leases Total Remaining 2022 $ 430 $ 126 $ 556 2023 1,765 409 2,175 2024 1,505 357 1,861 2025 1,255 103 1,358 2026 1,217 108 1,332 Thereafter 7,066 - 7,066 Total lease payments $ 13,238 $ 1,103 $ 14,341 Less: Interest (4,328 ) (74 ) (4,402 ) Present value of lease liabilities $ 8,910 $ 1,029 $ 9,939 The lease term and discount rate at September 30, 2022 were as follows: Weighted-average remaining lease term (years) Operating leases 9.1 Finance leases 2.8 Weighted-average discount rate Operating leases 7.7 % Finance leases 5.2 % |
Note 6 - Income Taxes
Note 6 - Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | NOTE 6. INCOME TAXES On a quarterly basis, we estimate what our effective tax rate will be for the full fiscal year and record a quarterly income tax provision based on the anticipated rate. As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction. Our effective tax rate for the three and nine months ended September 30, 2022 was 16% and 15%, respectively. The effective tax rate for the three and nine months ended September 30, 2021 was 26% and 23%, respectively. The primary drivers of the change in effective tax rate are due to a change in the federal valuation allowance, a discrete item of non-qualified options exercised over book value, and the amount due from the IRS exam conclusion. |
Note 7 - Restructuring Charges
Note 7 - Restructuring Charges | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Restructuring and Related Activities Disclosure [Text Block] | NOTE 7. RESTRUCTURING CHARGES During the first nine months of 2021, we recorded restructuring charges of $319 related to the consolidation of our production facilities and closure of our Merrifield, Minnesota facility. We recognized a gain on the sale of assets related to the restructure of $93 and $176 for the three and nine months ended September 30, 2021, respectively. There were no restructuring charges or amounts accrued in the nine months ended September 30, 2022. |
Note 8 - Employee Retention Cre
Note 8 - Employee Retention Credit | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Employee Retention Credit [Text Block] | NOTE 8. EMPLOYEE RETENTION CREDIT On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law providing numerous tax provisions and other stimulus measures, including an employee retention credit (“ERC”), which is a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC. At September 30, 2022 and December 31, 2021, the Company has ERC benefits of $5,209 within Employee Retention Credits Receivable on the condensed consolidated balance sheet. |
Note 9 - Related Party Transact
Note 9 - Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | NOTE 9. RELATED PARTY TRANSACTIONS David Kunin, our Chairman, is a minority owner of Abilitech Medical, Inc. Mr. Kunin also was a consultant to Abilitech, which relationship ended on March 1, 2021. In the three and nine months ended September 30, 2022, Abilitech paid the Company $0 and $217, respectively, for delivery of medical products. In the three and nine months ended September 30, 2021, Abilitech paid the Company $316 and $1,056, respectively for the delivery of medical products. The Company believes that transactions with Abilitech are on terms comparable to those that the Company could reasonably expect in an arm's length transaction with an unrelated third party. David Kunin, our Chairman, is a minority owner (less than 10 500 |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation |
Revenue [Policy Text Block] | Revenue Recognition |
Share-Based Payment Arrangement [Policy Text Block] | Stock-Based Awards Stock Options Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding - January 1, 2022 387,500 $ 4.57 Granted 90,000 11.13 Exercised (19,800 ) 3.40 Cancelled (8,000 ) 3.38 Outstanding - September 30, 2022 449,700 $ 5.93 7.10 $ 2,137 Exercisable - September 30, 2022 213,500 $ 3.95 5.90 $ 1,407 Restricted Stock Units two no No Equity Appreciation Rights Plan no no |
Earnings Per Share, Policy [Policy Text Block] | Net Income per Common Share |
Cash and Cash Equivalents, Unrestricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash |
Accounts Receivable [Policy Text Block] | Accounts Receivable and Allowance for Doubtful Accounts |
Inventory, Policy [Policy Text Block] | Inventories September 30, December 31, 2022 2021 Raw Materials $ 22,520 $ 18,492 Work in Process 1,719 1,678 Finished Goods 615 562 Reserves (1,244 ) (1,298 ) Total $ 23,610 $ 19,434 |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Other Intangible Assets Customer Relationships Trade Names Patents Total Balance at January 1, 2021 $ 507 $ 589 $ 77 $ 1,173 Additions - - 64 64 Amortization 147 29 - 176 Abandonment Loss - 560 - 560 Balance at December 31, 2021 360 - 141 501 Additions - - 43 43 Amortization 108 - 3 111 Balance at September 30, 2022 $ 252 $ - $ 181 $ 433 Year Amount Remainder of 2022 $ 40 2023 159 2024 86 2025 14 Thereafter 49 Total $ 348 |
New Accounting Pronouncements, Policy [Policy Text Block] | Accounting Pronouncements Issued But Not Yet Adopted |
Note 1 - Summary of Significa_2
Note 1 - Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Notes Tables | |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding - January 1, 2022 387,500 $ 4.57 Granted 90,000 11.13 Exercised (19,800 ) 3.40 Cancelled (8,000 ) 3.38 Outstanding - September 30, 2022 449,700 $ 5.93 7.10 $ 2,137 Exercisable - September 30, 2022 213,500 $ 3.95 5.90 $ 1,407 |
Schedule of Inventory, Current [Table Text Block] | September 30, December 31, 2022 2021 Raw Materials $ 22,520 $ 18,492 Work in Process 1,719 1,678 Finished Goods 615 562 Reserves (1,244 ) (1,298 ) Total $ 23,610 $ 19,434 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Customer Relationships Trade Names Patents Total Balance at January 1, 2021 $ 507 $ 589 $ 77 $ 1,173 Additions - - 64 64 Amortization 147 29 - 176 Abandonment Loss - 560 - 560 Balance at December 31, 2021 360 - 141 501 Additions - - 43 43 Amortization 108 - 3 111 Balance at September 30, 2022 $ 252 $ - $ 181 $ 433 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Year Amount Remainder of 2022 $ 40 2023 159 2024 86 2025 14 Thereafter 49 Total $ 348 |
Note 3 - Revenue (Tables)
Note 3 - Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Notes Tables | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] | Balance outstanding at December 31, 2021 $ 8,698 Increase (decrease) attributed to: Amounts transferred over time to contract assets 72,536 Amounts invoiced during the period (71,348 ) Balance outstanding at September 30, 2022 $ 9,886 |
Disaggregation of Revenue [Table Text Block] | Three Months Ended September 30, 2022 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 14,753 $ 5,366 $ 420 $ 20,539 Industrial 8,104 2,314 420 10,838 Aerospace and Defense 3,202 493 204 3,899 Total net sales $ 26,059 $ 8,173 $ 1,044 $ 35,276 Nine Months Ended September 30, 2022 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 37,725 $ 15,044 $ 1,574 $ 54,343 Industrial 21,563 6,301 1,095 28,959 Aerospace and Defense 13,248 1,254 701 15,203 Total net sales $ 72,536 $ 22,599 $ 3,370 $ 98,505 Three Months Ended September 30, 2021 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 13,762 $ 2,933 $ 282 $ 16,977 Industrial 7,468 1,757 158 9,383 Aerospace and Defense 2,883 144 65 3,092 Total net sales $ 24,113 $ 4,834 $ 505 $ 29,452 Nine Months Ended September 30, 2021 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 35,497 $ 8,876 $ 1,017 $ 45,390 Industrial 20,385 4,832 560 25,777 Aerospace and Defense 9,685 527 327 10,539 Total net sales $ 65,567 $ 14,235 $ 1,904 $ 81,706 |
Note 5 - Leases (Tables)
Note 5 - Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Notes Tables | |
Lease, Cost [Table Text Block] | Three Months Ended September 30, Three Months Ended September 30, Lease Cost 2022 2021 Operating lease cost $ 572 $ 576 Finance lease interest cost 14 18 Finance lease amortization expense 182 163 Total lease cost $ 768 $ 757 Nine Months Ended September 30, Nine Months ended September 30, Lease Cost 2022 2021 Operating lease cost $ 1,731 $ 1,696 Finance lease interest cost 50 61 Finance lease amortization expense 547 489 Total lease cost $ 2,328 $ 2,246 September 30, September 30, 2022 2021 Operating leases Cash paid for amounts included in the measurement of lease liabilities $ 1,279 $ 861 Right-of-use assets obtained in exchange for lease obligations $ - $ 858 Weighted-average remaining lease term (years) Operating leases 9.1 Finance leases 2.8 Weighted-average discount rate Operating leases 7.7 % Finance leases 5.2 % |
Schedule of Supplemental Balance Sheet Information Related to Leases [Table Text Block] | Balance Sheet Location September 30, 2022 December 31, 2021 Assets Operating lease assets Operating lease assets $ 8,079 $ 8,983 Finance lease assets Property, plant and equipment 1,505 2,052 Total leased assets $ 9,584 $ 11,035 |
Schedule of Lease Liability Maturity [Table Text Block] | Operating Leases Finance Leases Total Remaining 2022 $ 430 $ 126 $ 556 2023 1,765 409 2,175 2024 1,505 357 1,861 2025 1,255 103 1,358 2026 1,217 108 1,332 Thereafter 7,066 - 7,066 Total lease payments $ 13,238 $ 1,103 $ 14,341 Less: Interest (4,328 ) (74 ) (4,402 ) Present value of lease liabilities $ 8,910 $ 1,029 $ 9,939 |
Note 1 - Summary of Significa_3
Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
May 31, 2022 | Mar. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | May 31, 2017 | Dec. 31, 2012 | Nov. 30, 2010 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) | 90,000 | |||||||||||
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 11.13 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years 1 month 6 days | |||||||||||
Share-Based Payment Arrangement, Expense (in shares) | 212,643 | 214,391 | 202,479 | 144,892 | ||||||||
Letters of Credit Outstanding, Amount | $ 400 | $ 400 | ||||||||||
Restricted Cash and Cash Equivalents, Current, Total | 792 | $ 999 | 792 | $ 999 | $ 1,582 | [1] | ||||||
Accounts Receivable, Allowance for Credit Loss, Current | 257 | $ 257 | 328 | |||||||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 2 years 1 month 6 days | |||||||||||
Finite-Lived Intangible Assets, Net, Ending Balance | 433 | $ 433 | 501 | [1] | $ 1,173 | |||||||
Amortization of Intangible Assets | 40 | 45 | 111 | $ 139 | $ 176 | |||||||
Patents Received [Member] | ||||||||||||
Finite-Lived Intangible Assets, Net, Ending Balance | 96 | 96 | ||||||||||
Patents In Process [Member] | ||||||||||||
Finite-Lived Intangible Assets, Net, Ending Balance | $ 85 | $ 85 | ||||||||||
Employee Market Condition Options [Member] | ||||||||||||
Accounts Receivable, Allowance for Credit Loss, Current (in shares) | 0 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) | 21,000 | |||||||||||
Employee Service-based Options [Member] | ||||||||||||
Accounts Receivable, Allowance for Credit Loss, Current (in shares) | 3,000 | 69,000 | ||||||||||
Share-Based Payment Arrangement, Option [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) | 3,000 | 90,000 | 27,000 | |||||||||
Share-Based Payment Arrangement, Expense | $ 62 | $ 28 | $ 168 | $ 74 | ||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 810 | $ 810 | ||||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 10 months 9 days | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 34,211 | 0 | 44,070 | 221 | ||||||||
Stock Appreciation Rights (SARs) [Member] | ||||||||||||
Accounts Receivable, Allowance for Credit Loss, Current (in shares) | 0 | 0 | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance | 0 | 0 | 100,000 | |||||||||
Equity Appreciation Right Units [Member] | ||||||||||||
Share-Based Payment Arrangement, Expense | $ 13 | $ 127 | ||||||||||
Stock Incentive Plan 2017 [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 350,000 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized (in shares) | 175,000 | 50,000 | ||||||||||
Stock Incentive Plan 2017 [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||||
Share-Based Payment Arrangement, Expense | $ 0 | $ 0 | ||||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 186 | $ 186 | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 1 year 5 months 26 days | |||||||||||
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 12 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 9 years 5 months 23 days | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 0 | |||||||||||
Stock Incentive Plan 2017 [Member] | Restricted Stock Units (RSUs) [Member] | Non-employee Directors [Member] | ||||||||||||
Accounts Receivable, Allowance for Credit Loss, Current (in shares) | 0 | 21,000 | ||||||||||
Share-Based Payment Arrangement, Expense | $ 31 | $ 66 | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 2 years | |||||||||||
Equity Appreciation Rights Plan 2010 [Member] | Stock Appreciation Rights (SARs) [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 1,000,000 | |||||||||||
[1]The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date |
Note 1 - Summary of Significa_4
Note 1 - Summary of Significant Accounting Policies - Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Ending Balance (in shares) | shares | 387,500 | |
Outstanding, weighted average exercise price (in dollars per share) | $ / shares | $ 4.57 | |
Granted (in shares) | shares | 90,000 | |
Granted, weighted average exercise price (in dollars per share) | $ / shares | $ 11.13 | |
Exercised (in shares) | shares | (19,800) | |
Exercised, weighted average exercise price (in dollars per share) | $ / shares | $ 3.40 | |
Cancelled (in shares) | shares | (8,000) | |
Cancelled, weighted average exercise price (in dollars per share) | $ / shares | $ 3.38 | |
Outstanding (in shares) | shares | 449,700 | |
Outstanding, weighted average exercise price (in dollars per share) | $ / shares | $ 5.93 | |
Outstanding, weighted average remaining contractual term (Year) | 7 years 1 month 6 days | |
Outstanding, aggregate intrinsic value | $ | $ 2,137 | |
Exercisable (in shares) | shares | 213,500 | |
Exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 3.95 | |
Exercisable, weighted average remaining contractual term (Year) | 5 years 10 months 24 days | |
Exercisable, aggregate intrinsic value | $ | $ 1,407 |
Note 1 - Summary of Significa_5
Note 1 - Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
Raw Materials | $ 22,520 | $ 18,492 | |
Work in Process | 1,719 | 1,678 | |
Finished Goods | 615 | 562 | |
Reserves | (1,244) | (1,298) | |
Total | $ 23,610 | $ 19,434 | [1] |
[1]The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date |
Note 1 - Summary of Significa_6
Note 1 - Summary of Significant Accounting Policies - Finite Lived Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |||
Finite-Lived Intangible Assets, Net, Ending Balance | $ 501,000 | [1] | $ 1,173,000 | $ 1,173,000 | |||
Additions | 43,000 | 64,000 | |||||
Amortization | $ 40,000 | $ 45,000 | 111,000 | 139,000 | 176,000 | ||
Abandonment Loss | 560,000 | ||||||
Balance at December 31, 2021 | 433,000 | 433,000 | 501,000 | [1] | |||
Customer Relationships [Member] | |||||||
Finite-Lived Intangible Assets, Net, Ending Balance | 360,000 | 507,000 | 507,000 | ||||
Additions | 0 | 0 | |||||
Amortization | 108,000 | 147,000 | |||||
Abandonment Loss | 0 | ||||||
Balance at December 31, 2021 | 252,000 | 252,000 | 360,000 | ||||
Trade Names [Member] | |||||||
Finite-Lived Intangible Assets, Net, Ending Balance | 0 | 589,000 | 589,000 | ||||
Additions | 0 | 0 | |||||
Amortization | 0 | 29,000 | |||||
Abandonment Loss | 560,000 | ||||||
Balance at December 31, 2021 | 0 | 0 | 0 | ||||
Patents [Member] | |||||||
Finite-Lived Intangible Assets, Net, Ending Balance | 141,000 | $ 77,000 | 77,000 | ||||
Additions | 43,000 | 64,000 | |||||
Amortization | 3,000 | 0 | |||||
Abandonment Loss | 0 | ||||||
Balance at December 31, 2021 | $ 181,000 | $ 181,000 | $ 141,000 | ||||
[1]The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date |
Note 1 - Summary of Significa_7
Note 1 - Summary of Significant Accounting Policies - Estimated Future Annual Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | [1] | Dec. 31, 2020 |
2025 | $ 14 | |||
Thereafter | 49 | |||
Total | 433 | $ 501 | $ 1,173 | |
Finite-lived Intangible Assets, Excluding Projects in Process [Member] | ||||
Remainder of 2022 | 40 | |||
2023 | 159 | |||
2024 | 86 | |||
Total | $ 348 | |||
[1]The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date |
Note 2 - Concentration of Cre_2
Note 2 - Concentration of Credit Risk and Major Customers (Details Textual) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 | Sep. 30, 2022 USD ($) | Sep. 30, 2021 | Dec. 31, 2021 | |
Excess Cash Balances, Number of High Credit Quality Financial Institutions | 2 | ||||
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | One Customer [Member] | |||||
Concentration Risk Number of Customers | 1 | 1 | |||
Concentration Risk, Percentage | 28% | 26% | 26% | ||
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | Two Customers [Member] | |||||
Concentration Risk Number of Customers | 2 | ||||
Concentration Risk, Percentage | 36% | ||||
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | Largest Customer [Member] | |||||
Concentration Risk, Percentage | 3% | 4% | 3% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | |||||
Concentration Risk Number of Customers | 1 | ||||
Concentration Risk, Percentage | 19% | ||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Two Customers [Member] | |||||
Concentration Risk Number of Customers | 2 | ||||
Concentration Risk, Percentage | 43% | ||||
UNITED STATES | |||||
Excess Cash Balances, Number of High Credit Quality Financial Institutions | 1,000 | ||||
Cash | $ 2,092 | $ 2,092 | |||
CHINA | |||||
Excess Cash Balances, Number of High Credit Quality Financial Institutions | 1 | ||||
Cash | 561 | $ 561 | |||
MEXICO | |||||
Cash | $ 11 | $ 11 |
Note 3 - Revenue 1 (Details Tex
Note 3 - Revenue 1 (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Percentage of Revenue Transferred to Customers | 74% | 82% | 74% | 80% |
Revenue Remaining Performance Obligation, Customers Upon Shipment With Payment Terms | 120 days |
Note 3 - Revenue 2 (Details Tex
Note 3 - Revenue 2 (Details Textual) | Sep. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 180 days |
Note 3 - Revenue - Contract Ass
Note 3 - Revenue - Contract Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Outstanding | $ 8,698 |
Transferred to receivables from contract assets recognized | 72,536 |
Product transferred over time | (71,348) |
Outstanding | $ 9,886 |
Note 3 - Revenue - Disaggregati
Note 3 - Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net Sales | $ 35,276 | $ 29,452 | $ 98,505 | $ 81,706 |
Medical [Member] | ||||
Net Sales | 20,539 | 16,977 | 54,343 | 45,390 |
Industrial [Member] | ||||
Net Sales | 10,838 | 9,383 | 28,959 | 25,777 |
Aerospace and Defense [Member] | ||||
Net Sales | 3,899 | 3,092 | 15,203 | 10,539 |
Transferred over Time [Member] | ||||
Net Sales | 26,059 | 24,113 | 72,536 | 65,567 |
Transferred over Time [Member] | Medical [Member] | ||||
Net Sales | 14,753 | 13,762 | 37,725 | 35,497 |
Transferred over Time [Member] | Industrial [Member] | ||||
Net Sales | 8,104 | 7,468 | 21,563 | 20,385 |
Transferred over Time [Member] | Aerospace and Defense [Member] | ||||
Net Sales | 3,202 | 2,883 | 13,248 | 9,685 |
Transferred at Point in Time [Member] | ||||
Net Sales | 8,173 | 4,834 | 22,599 | 14,235 |
Transferred at Point in Time [Member] | Medical [Member] | ||||
Net Sales | 5,366 | 2,933 | 15,044 | 8,876 |
Transferred at Point in Time [Member] | Industrial [Member] | ||||
Net Sales | 2,314 | 1,757 | 6,301 | 4,832 |
Transferred at Point in Time [Member] | Aerospace and Defense [Member] | ||||
Net Sales | 493 | 144 | 1,254 | 527 |
Noncash Consideration [Member] | ||||
Net Sales | 1,044 | 505 | 3,370 | 1,904 |
Noncash Consideration [Member] | Medical [Member] | ||||
Net Sales | 420 | 282 | 1,574 | 1,017 |
Noncash Consideration [Member] | Industrial [Member] | ||||
Net Sales | 420 | 158 | 1,095 | 560 |
Noncash Consideration [Member] | Aerospace and Defense [Member] | ||||
Net Sales | $ 204 | $ 65 | $ 701 | $ 327 |
Note 4 - Financing Arrangemen_2
Note 4 - Financing Arrangements (Details Textual) - Credit Agreement [Member] - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Jun. 15, 2017 | |
Bank of America [Member] | |||
Debt Issuance Costs, Net, Total | $ 48 | $ 58 | |
Bank of America [Member] | |||
Long-Term Line of Credit, Total | $ 9,873 | $ 9,016 | |
Line of Credit, Minimum Fixed Charge Coverage Ratio During the Period | 1 | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 5,827 | ||
Bank of America [Member] | Line of Credit [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 16,000 | ||
Debt Instrument, Interest Rate During Period | 4.10% | 3.50% |
Note 5 - Leases (Details Textua
Note 5 - Leases (Details Textual) | Sep. 30, 2022 |
Minimum [Member] | |
Lessee, Operating Lease, Renewal Term | 1 year |
Maximum [Member] | |
Lessee, Operating Lease, Renewal Term | 5 years |
Note 5 - Leases - Lease Cost (D
Note 5 - Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating lease cost | $ 572 | $ 576 | $ 1,731 | $ 1,696 |
Cash paid for amounts included in the measurement of lease liabilities | $ 1,279 | 861 | ||
Operating leases (Year) | 9 years 1 month 6 days | 9 years 1 month 6 days | ||
Finance leases (Year) | 2 years 9 months 18 days | 2 years 9 months 18 days | ||
Finance lease interest cost | $ 14 | 18 | $ 50 | 61 |
Property Acquired Under Operating Lease | $ 0 | 858 | ||
Operating leases | 7.70% | 7.70% | ||
Finance leases | 5.20% | 5.20% | ||
Finance lease amortization expense | $ 182 | 163 | $ 547 | 489 |
Total lease cost | $ 768 | $ 757 | $ 2,328 | $ 2,246 |
Note 5 - Leases - Supplemental
Note 5 - Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
Operating lease assets | $ 8,079 | $ 8,983 | [1] |
Total leased assets | 9,584 | 11,035 | |
Property and Equipment [Member] | |||
Finance lease assets | $ 1,505 | $ 2,052 | |
[1]The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date |
Note 5 - Leases - Maturity of L
Note 5 - Leases - Maturity of Lease Liabilities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Operating leases, Remaining 2022 | $ 430 |
Finance leases, Remaining 2022 | 126 |
Total, Remaining 2022 | 556 |
Operating leases, 2023 | 1,765 |
Finance leases, 2023 | 409 |
Total, 2023 | 2,175 |
Operating leases, 2024 | 1,505 |
Finance leases, 2024 | 357 |
Total, 2024 | 1,861 |
Operating leases, 2025 | 1,255 |
Finance leases, 2025 | 103 |
Total, 2025 | 1,358 |
Operating leases, 2026 | 1,217 |
Finance leases, 2026 | 108 |
Total, 2026 | 1,332 |
Operating leases, Thereafter | 7,066 |
Finance leases, Thereafter | 0 |
Total, Thereafter | 7,066 |
Operating leases, total lease payments | 13,238 |
Finance leases, total lease payments | 1,103 |
Total, total lease payments | 14,341 |
Operating leases, less: Interest | (4,328) |
Finance leases, less: Interest | (74) |
Total, less: Interest | (4,402) |
Operating leases, present value of lease liabilities | 8,910 |
Finance leases, present value of lease liabilities | 1,029 |
Total, present value of lease liabilities | $ 9,939 |
Note 6 - Income Taxes (Details
Note 6 - Income Taxes (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Effective Income Tax Rate Reconciliation, Percent, Total | 16% | 26% | 15% | 23% |
Note 7 - Restructuring Charges
Note 7 - Restructuring Charges (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Charges, Total | $ 0 | $ 23 | $ 0 | $ 319 |
Consolidation of our Production Facilities and Closure of our Merrifield, Minnesota Facility [Member] | ||||
Restructuring Charges, Total | 319 | |||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 93 | $ 176 |
Note 8 - Employee Retention C_2
Note 8 - Employee Retention Credit (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Employee Retention Credit Benefits, CARES Act | $ 5,209 | $ 5,209 |
Note 9 - Related Party Transa_2
Note 9 - Related Party Transactions (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Agreement Between the BIRD Foundation, the Company, and MARPE Technologies, LTD [Member] | ||||
Agreement, Conditional Grant | $ 1,000 | $ 1,000 | ||
Agreement, Exclusive Manufacturing Rights, Term (Year) | 10 years | |||
Abilitech Medical, Inc [Member] | Payments Received for Delivery of EMS Products [Member] | ||||
Related Party Transaction, Amounts of Transaction | $ 0 | $ 316 | $ 217 | $ 1,056 |
David Kunin [Member] | Marpe Technologies, LTD [Member] | Maximum [Member] | ||||
Ownership, Percent | 10% | 10% | ||
Marpe Technologies, LTD [Member] | Agreement Between the BIRD Foundation, the Company, and MARPE Technologies, LTD [Member] | ||||
Agreement, Conditional Grant Matching Amount | $ 500 | $ 500 | ||
Agreement, Contribution Amount | 226 | 226 | ||
Revenue from Related Parties | $ 66 | $ 78 | $ 182 | $ 78 |