Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 $.01 per share | |
Trading Symbol | NSYS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 2,700,633 | |
Entity Central Index Key | 0000722313 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net Sales | $ 34,888 | $ 30,711 |
Cost of Goods Sold | 29,404 | 26,667 |
Gross Profit | 5,484 | 4,044 |
Operating Expenses | ||
Selling Expenses | 890 | 833 |
General and Administrative Expenses | 3,265 | 2,729 |
Research and Development Expenses | 276 | 328 |
Gain on Sale of Assets | 0 | (15) |
Total Operating Expenses | 4,431 | 3,875 |
Income From Operations | 1,053 | 169 |
Other Expense | ||
Interest Expense | (110) | (98) |
Income Before Income Taxes | 943 | 71 |
Income Tax Expense (Benefit) | 262 | (67) |
Net Income | $ 681 | $ 138 |
Net Income Per Common Share: | ||
Basic (in dollars per share) (in dollars per share) | $ 0.25 | $ 0.05 |
Weighted Average Number of Common Shares Outstanding - Basic (in shares) (in shares) | 2,692,033 | 2,680,731 |
Diluted (in dollars per share) (in dollars per share) | $ 0.23 | $ 0.05 |
Weighted Average Number of Common Shares Outstanding - Diluted (in shares) (in shares) | 2,903,635 | 2,871,901 |
Other comprehensive income | ||
Foreign currency translation | $ 40 | $ 5 |
Comprehensive income, net of tax | $ 721 | $ 143 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Current Period Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash | $ 1,267 | $ 1,027 |
Restricted Cash | 1,366 | 1,454 |
Accounts Receivable, less allowances of $303 and $334 | 16,219 | 15,975 |
Employee Retention Credit Receivable | 2,650 | 2,650 |
Inventories, Net | 21,344 | 22,438 |
Contract Assets, less allowances of $20 and $0 | 10,790 | 9,982 |
Prepaid Expenses | 1,933 | 1,334 |
Total Current Assets | 55,569 | 54,860 |
Property and Equipment, Net | 6,543 | 6,408 |
Operating Lease Assets | 7,561 | 7,850 |
Other Intangible Assets, Net | 382 | 422 |
Total Assets | 70,055 | 69,540 |
Current Liabilities | ||
Current Portion of Finance Lease Obligations | 394 | 390 |
Current Portion of Operating Lease Obligations | 1,130 | 1,155 |
Accounts Payable | 13,082 | 14,792 |
Accrued Payroll and Commissions | 6,048 | 4,803 |
Income Taxes Payable | 837 | 733 |
Customer Deposits | 4,830 | 3,515 |
Other Accrued Liabilities | 1,128 | 1,010 |
Total Current Liabilities | 27,449 | 26,398 |
Long-Term Liabilities | ||
Long Term Line of Credit | 5,845 | 6,853 |
Long Term Finance Lease Obligations, Net | 465 | 565 |
Long-Term Operating Lease Obligations, Net | 7,297 | 7,549 |
Other Long-Term Liabilities | 94 | 95 |
Total Long-Term Liabilities | 13,701 | 15,062 |
Total Liabilities | 41,150 | 41,460 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Preferred Stock, $1 par value; 1,000,000 Shares Authorized: 250,000 Shares Issued and Outstanding | 250 | 250 |
Common Stock - $0.01 par value; 9,000,000 Shares Authorized: 2,700,633 and 2,690,633 Shares Issued and Outstanding, respectively | 27 | 27 |
Additional Paid-In Capital | 16,481 | 16,347 |
Accumulated Other Comprehensive Loss | (330) | (370) |
Retained Earnings | 12,477 | 11,826 |
Total Shareholders' Equity | 28,905 | 28,080 |
Total Liabilities and Shareholders' Equity | $ 70,055 | $ 69,540 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts receivable allowance | $ 303 | |
Contract with Customer, Asset, Allowance for Credit Loss, Current | $ 20 | $ 0 |
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 issued (in shares) | 250,000 | 250,000 |
Preferred stock, shares outstanding (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) | 2,700,633 | 2,690,633 |
Common stock, shares issued (in shares) | 2,700,633 | 2,690,633 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES | ||
Net Income | $ 681 | $ 138 |
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: | ||
Depreciation and Amortization | 505 | 486 |
Compensation on Stock-Based Awards | 99 | 48 |
Change in Inventory Reserves | 32 | 97 |
Other, Net | (47) | 23 |
Changes in Current Operating Items | ||
Accounts Receivable | (206) | (188) |
Inventories | 1,075 | (1,852) |
Contract Assets | (823) | 585 |
Prepaid Expenses and other Curent Assets | (600) | (263) |
Income Taxes | 113 | (168) |
Accounts Payable | (1,799) | 1,302 |
Accrued Payroll and Commissions | 1,244 | 845 |
Customer Deposits | 1,315 | 456 |
Other Accrued Liabilities | 129 | (18) |
Net Cash Provided By Operating Activities | 1,718 | 1,491 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from Sale of Property and Equipment | 0 | 15 |
Purchases of Property and Equipment | (496) | (529) |
Net Cash Used In Investing Activities | (496) | (514) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Line of Credit | 31,133 | 26,986 |
Payments to Line of Credit | (32,145) | (28,420) |
Principal Payments on Financing Leases | (96) | (184) |
Stock Option Excercises | 35 | 33 |
Net Cash Used In Financing Activities | (1,073) | (1,585) |
Effect of Exchange Rate Changes on Cash | 3 | 0 |
Net Change in Cash and Cash Equivalents | 152 | (608) |
Cash and Cash Equivalents - Beginning of Year | 2,481 | 2,225 |
Cash and Cash Equivalents - End of Year | 2,633 | 1,617 |
Reconciliation of cash and restricted cash reported within the consolidated balance sheets | ||
Cash | 1,267 | 841 |
Restricted Cash | 1,366 | 776 |
Total Cash and restricted cash reported in the consolidated statements of cash flows | 2,633 | 1,617 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash Paid During the Period for Interest | 129 | 94 |
Cash Paid During the Period for Income Taxes | 112 | 0 |
Supplemental Noncash Investing and Financing Activities: | ||
Property and Equipment Purchases in Accounts Payable | $ 78 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Preferred Stock [Member] | Common Stock [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Total |
BALANCE DECEMBER 31, 2021 at Dec. 31, 2021 | $ 250 | $ 27 | $ 15,962 | $ 56 | $ 9,816 | $ 26,111 | ||||||
Net Income | 0 | 0 | 0 | 0 | 138 | 138 | ||||||
Foreign currency translation adjustment | 0 | 0 | 0 | 5 | 0 | 5 | ||||||
Stock option exercises | 33 | 0 | 33 | |||||||||
Compensation on stock-based awards | 0 | 0 | 48 | 0 | 0 | 48 | ||||||
BALANCE MARCH 31, 2022 at Mar. 31, 2022 | 250 | 27 | 16,043 | 61 | 9,954 | 26,335 | ||||||
BALANCE DECEMBER 31, 2021 at Dec. 31, 2022 | $ 0 | 250 | $ 0 | 27 | $ 0 | 16,347 | $ 0 | (370) | $ (30) | 11,826 | $ (30) | 28,080 |
Net Income | 0 | 0 | 0 | 0 | 681 | 681 | ||||||
Foreign currency translation adjustment | 0 | 0 | 0 | 40 | 0 | 40 | ||||||
Stock option exercises | 35 | 35 | ||||||||||
Compensation on stock-based awards | 0 | 0 | 99 | 0 | 0 | 99 | ||||||
BALANCE MARCH 31, 2022 at Mar. 31, 2023 | $ 250 | $ 27 | $ 16,481 | $ (330) | $ 12,477 | $ 28,905 |
Note 1 - Summary of Significant
Note 1 - Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
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, 2022. 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. 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. 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. There were no service-based or market-based stock options granted during the three months ended March 31, 2023. There was 53,000 service-based and 21,000 market-based stock options granted during the three months ended March 31, 2022.The market condition options vest if certain stock prices are exceeded between February 27, 2024 and February 27, 2028. Total compensation expense related to stock options was $68 and $43 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, there was $694 of unrecognized compensation which will vest over the next 3.45 years. Following is the status of all stock options as of March 31, 2023: Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding - January 1, 2023 452,700 $ 5.97 Granted - - Exercised (10,000 ) 3.43 Cancelled (1,600 ) 7.18 Outstanding - March 31, 2023 441,100 $ 6.02 6.68 $ 2,100 Exercisable - March 31, 2023 247,700 $ 4.38 5.72 $ 1,556 Restricted Stock Units During the three months ended March 31, 2022, we granted 21,000 restricted stock units (“RSUs”) under our 2017 Stock Incentive Plan to non-employee directors which vest over two years. There were no RSUs granted for the three months ended March 31, 2023. Total compensation expense related to the RSUs was $31 and $5 for the three months ended March 31, 2023 and 2022, respectively. Total unrecognized compensation expense related to the RSUs was $124, which will vest over the next 12 months. 9,000 RSUs vested during the three months ended March 31, 2023 but were not yet transferred to the directors as of March 31, 2023. 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. Dilutive 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 months ended March 31, 2023 and 2022, stock options of 211,602 and 191,170, respectively, were included in the computation for diluted income per common share as their impact were dilutive. We had outstanding stock options totaling 20,518 and RSUs totaling 8,118 that are not included in the computation of diluted net income per share as their effect would have been anti-dilutive for the three months ended March 31, 2023. 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 March 31, 2023, we had outstanding letters of credit for $300. Restricted cash as of March 31, 2023 was $1,366. The March 31, 2023 and December 31, 2022 restricted cash balance included 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 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. Allowance for Credit Losses When we record customer receivables and contract assets arising from revenue transactions, we record an allowance for credit losses for the current expected credit losses (CECL) inherent in the asset over its expected life. The allowance for credit losses is a valuation account deducted from the cost basis of the assets to present their net carrying value at the amount expected to be collected. Each period, the allowance for credit losses is adjusted through earnings to reflect expected credit losses over the remaining lives of the assets. We estimate expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. When measuring expected credit losses, we pool assets with similar country risk and credit risk characteristics. Changes in the relevant information may significantly affect the estimates of expected credit losses. Assets are written off when we determine them to be uncollectible. Write-offs are recognized as a deduction from the allowance for credit losses. 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: March 31, December 31, 2023 2022 Raw Materials $ 20,983 $ 21,673 Work in Process 865 1,238 Finished Goods 672 671 Reserves (1,176 ) (1,144 ) Total $ 21,344 $ 22,438 Other Intangible Assets Other intangible assets at March 31, 2023 and December 31, 2022 are as follows: Customer Relationships Patents Total Balance at January 1, 2022 $ 360 $ 141 $ 501 Additions - 71 71 Amortization 144 6 150 Balance at December 31, 2022 216 206 422 Amortization 36 4 40 Balance at March 31, 2023 $ 180 $ 202 $ 382 Intangible assets are amortized on a straight-line basis over their estimated useful lives. The weighted-average remaining amortization period of our intangible assets is 1.6 years. Of the patents value at March 31, 2023, $95 are being amortized and $111 are in process and a patent has not yet been received. Amortization expense of finite life intangible assets for the three months ended March 31, 2023 and 2022 was $40 and $36, respectively. Estimated future annual amortization expense (not including patents in process of $111) related to these assets is approximately as follows: Year Amount Remainder of 2023 $ 119 2024 87 2025 14 2026 14 Thereafter 37 Total $ 271 Adoption of New Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326). The ASU introduces a new credit loss methodology, Current Expected Credit Losses (CECL), which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity securities and other receivables at the time the financial asses is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. On January 1, 2023, we adopted the guidance prospectively with a cumulative adjustment to retained earnings. We have not restated comparative information for 2022 and, therefore, the comparative information for 2022 is reported under the old model and is not comparable to the information presented for 2023. At adoption, we recognized an allowance for credit losses related to accounts receivable and contract assets of $30, net of tax, and a decrease in retained earnings of $30 associated with the increased estimated credit losses. Revision and Immaterial Correction of an Error in Previously Issued Financial Statements The Company identified an error related to the classification of the activity on our line of credit facility with Bank of America at December 31, 2022 as reported on Form 10-K. In our March 31, 2022 condensed consolidated financial statements, we incorrectly classified borrowings and payments on our line of credit facility on a net basis within the financing section of the condensed consolidated cash flow statement; this activity should be shown on a gross basis. This change in presentation to the condensed consolidated cash flow statement does not impact total operating, investing, or financing cash flows. There was no change to the condensed consolidated statement of income or condensed consolidated balance sheet. In accordance with ASC 250, Accounting Changes and Error Corrections, we evaluated the materiality of the errors from quantitative and qualitative perspectives and concluded that the errors were immaterial to the Company’s 2022 audited financial statements. Since these revisions were not material to any prior period financial statements, no amendments to previously filed financial statements are required. Consequently, the Company has corrected these immaterial errors by revising the March 31, 2022 consolidated financial statements presented herein. The tables below present the effect of the financial statement adjustments related to the revision discussed above of the Company’s previously reported financial statements as of and for the period ended March 31, 2022: Condensed Consolidated Statements of Cash Flows March 31, 2022 CASH FLOWS FROM FINANCING ACTIVITIES As reported Adjustment As revised Net Proceeds from Line of Credit (1,434 ) 1,434 - Proceeds from Line of Credit - 26,986 26,986 Payments to Line of Credit - (28,420 ) (28,420 ) Principal Payments on Long-Term Debt - - Principal Payments on Financing Leases (184 ) (184 ) Stock Option Exercises 33 33 Net Cash Provided by Financing Activities (1,585 ) - (1,585 ) |
Note 2 - Concentration of Credi
Note 2 - Concentration of Credit Risk and Major Customers | 3 Months Ended |
Mar. 31, 2023 | |
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, accounts receivable, and contract asset. With regard to cash, we maintain our excess cash balances in checking accounts at primarily two financial institutions, one in the United States and one in China. The account in the United States may at times exceed federally insured limits. Of the $2,633 in cash and restricted cash at March 31, 2023, approximately $1,229 and $13 was held at banks located in China and Mexico, respectively. We grant credit to customers in the normal course of business and do not require collateral on our accounts receivable. We have certain customers whose revenue individually represented 10% or more of net sales, whose accounts receivable balances individually represented 10% or more of gross accounts receivable, or whose contract asset balances individually represetend 10% or more of contract assets. One Export sales represented approximately 4% and 5% of net sales for the three months ended March 31, 2023 and 2022, respectively. |
Note 3 - Revenue
Note 3 - Revenue | 3 Months Ended |
Mar. 31, 2023 | |
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. Revenues under these agreements are generally recognized over time using an input measure based upon the proportion of actual costs incurred. 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% and 73% of our revenue for the three months ended March 31, 2023 and 2022, respectively. 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 Consolidated Balance Sheet, consist of unbilled amounts related to revenue recognized over time. Significant changes in the contract assets balance during the three months ended March 31, 2023 was as follows (in thousands): Balance outstanding at December 31, 2022 $ 9,982 Increase (decrease) attributed to: Amounts transferred over time to contract assets 25,730 Allowance for current expected credit losses (20 ) Amounts invoiced during the period (24,902 ) Balance outstanding at March 31, 2023 $ 10,790 We expect substantially all of the remaining performance obligations for the contract assets recorded as of March 31, 2023, to be transferred to receivables within 90 days, with 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 market for the three ended March 31, 2023 and 2022, respectively: Three Months Ended March 31, 2023 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 15,725 $ 5,061 $ 586 $ 21,372 Industrial 6,590 2,408 474 9,472 Aerospace and Defense 3,415 550 79 4,044 Total net sales $ 25,730 $ 8,019 $ 1,139 $ 34,888 Three Months Ended March 31, 2022 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 9,807 $ 4,915 $ 544 $ 15,266 Industrial 6,529 1,791 347 8,667 Aerospace and Defense 6,057 425 296 6,778 Total net sales $ 22,393 $ 7,131 $ 1,187 $ 30,711 |
Note 5 - Financing Arrangements
Note 5 - Financing Arrangements | 3 Months Ended |
Mar. 31, 2023 | |
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 7.3% and 5.2% as of March 31, 2023 and December 31, 2022, respectively. We had borrowings on our line of credit of $5,886 and $6,897 outstanding as of March 31, 2023 and December 31, 2022, respectively. There are no subjective acceleration clauses under the credit agreement that would accelerate the maturity of our outstanding borrowings. In addition, the credit agreement does not expire within one year, the Company is not in violation of the covenants and the Company expects Bank of America to be capable of honoring the financing arrangement. The line of credit is shown net of debt issuance costs of $41 and $44 on the condensed consolidated balance sheet for the periods ended March 31, 2023 and December 31, 2022, 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 ending December 31, 2020 and each Fiscal Quarter end thereafter 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. The Company met the covenants for the period ended March 31, 2023. At March 31, 2023, we had unused availability under our line of credit of $5,934 supported by our borrowing base. The line is secured by substantially all of our assets. |
Note 5 - Leases
Note 5 - Leases | 3 Months Ended |
Mar. 31, 2023 | |
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: March 31, March 31, Lease Cost 2023 2022 Operating lease cost $ 567 $ 581 Finance lease interest cost 12 19 Finance lease amortization expense 182 182 Total lease cost $ 761 $ 782 Supplemental balance sheet information related to leases was as follows: Balance Sheet Location March 31, 2023 December 31, 2022 Assets Operating lease assets Operating lease assets $ 7,561 $ 7,850 Finance lease assets Property, Plant and Equipment 1,181 1,363 Total leased assets $ 8,742 $ 9,213 Supplemental cash flow information related to leases was as follows: March 31, March 31, 2023 2022 Operating leases Cash paid for amounts included in the measurement of lease liabilities $ 493 $ 434 Maturities of lease liabilities were as follows: Operating Leases Finance Leases Total Remaining 2023 $ 1,343 $ 325 $ 1,668 2024 1,516 379 1,895 2025 1,265 103 1,368 2026 1,227 109 1,336 2027 1,256 - 1,256 Therafter 5,818 - 5,818 Total lease payments $ 12,425 $ 916 $ 13,341 Less: Interest (3,998 ) (57 ) (4,055 ) Present value of lease liabilities $ 8,427 $ 859 $ 9,286 The lease term and discount rate at March 31, 2023 were as follows: Weighted-average remaining lease term (years) Operating leases 8.8 Finance leases 2.4 Weighted-average discount rate Operating leases 7.7 % Finance leases 5.2 % |
Note 6 - Income Taxes
Note 6 - Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31, 2023 and 2022 was 28% and (94) |
Note 7 - Employee Retention Cre
Note 7 - Employee Retention Credit | 3 Months Ended |
Mar. 31, 2023 | |
Notes to Financial Statements | |
Employee Retention Credit [Text Block] | NOTE 7. 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. During the year ended December 31, 2022, we received payment on the Employee Retention Credit for the first quarter of 2021 of $2,559. At March 31, 2023 and December 31, 2022, the Company has ERC benefits of $2,650 within Employee Retention Credits Receivable on the condensed consolidated balance sheet. The company received payment on this remaining receivable on May 1, 2023. |
Note 8 - Related Party Transact
Note 8 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | NOTE 8. RELATED PARTY TRANSACTIONS David Kunin, our Chairman, is a minority owner of Abilitech Medical, Inc. Mr. Kunin also was a consultant to Abilitech through March 1, 2021. In the three months ended March 31, 2023 and 2022, Abilitech paid the Company $0 and $54, respectively, for delivery of medical products. We have assets recorded related to Abilitech including $226 of accounts receivable and inventory. We do not believe that Abilitech will pay the Company for outstanding accounts receivable or for inventory and we have recorded a full reserve against the gross amounts. 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) | 3 Months Ended |
Mar. 31, 2023 | |
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 Outstanding - January 1, 2023 452,700 $ 5.97 Granted - - Exercised (10,000 ) 3.43 Cancelled (1,600 ) 7.18 Outstanding - March 31, 2023 441,100 $ 6.02 6.68 $ 2,100 Exercisable - March 31, 2023 247,700 $ 4.38 5.72 $ 1,556 Restricted Stock Units |
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 Allowance for Credit Losses |
Inventory, Policy [Policy Text Block] | Inventories March 31, December 31, 2023 2022 Raw Materials $ 20,983 $ 21,673 Work in Process 865 1,238 Finished Goods 672 671 Reserves (1,176 ) (1,144 ) Total $ 21,344 $ 22,438 |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Other Intangible Assets Customer Relationships Patents Total Balance at January 1, 2022 $ 360 $ 141 $ 501 Additions - 71 71 Amortization 144 6 150 Balance at December 31, 2022 216 206 422 Amortization 36 4 40 Balance at March 31, 2023 $ 180 $ 202 $ 382 Year Amount Remainder of 2023 $ 119 2024 87 2025 14 2026 14 Thereafter 37 Total $ 271 |
New Accounting Pronouncements, Policy [Policy Text Block] | Adoption of New Accounting Standards |
Reclassification, Comparability Adjustment [Policy Text Block] | Revision and Immaterial Correction of an Error in Previously Issued Financial Statements Condensed Consolidated Statements of Cash Flows March 31, 2022 CASH FLOWS FROM FINANCING ACTIVITIES As reported Adjustment As revised Net Proceeds from Line of Credit (1,434 ) 1,434 - Proceeds from Line of Credit - 26,986 26,986 Payments to Line of Credit - (28,420 ) (28,420 ) Principal Payments on Long-Term Debt - - Principal Payments on Financing Leases (184 ) (184 ) Stock Option Exercises 33 33 Net Cash Provided by Financing Activities (1,585 ) - (1,585 ) |
Note 1 - Summary of Significa_2
Note 1 - Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 Outstanding - January 1, 2023 452,700 $ 5.97 Granted - - Exercised (10,000 ) 3.43 Cancelled (1,600 ) 7.18 Outstanding - March 31, 2023 441,100 $ 6.02 6.68 $ 2,100 Exercisable - March 31, 2023 247,700 $ 4.38 5.72 $ 1,556 |
Schedule of Inventory, Current [Table Text Block] | March 31, December 31, 2023 2022 Raw Materials $ 20,983 $ 21,673 Work in Process 865 1,238 Finished Goods 672 671 Reserves (1,176 ) (1,144 ) Total $ 21,344 $ 22,438 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Customer Relationships Patents Total Balance at January 1, 2022 $ 360 $ 141 $ 501 Additions - 71 71 Amortization 144 6 150 Balance at December 31, 2022 216 206 422 Amortization 36 4 40 Balance at March 31, 2023 $ 180 $ 202 $ 382 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Year Amount Remainder of 2023 $ 119 2024 87 2025 14 2026 14 Thereafter 37 Total $ 271 |
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | Condensed Consolidated Statements of Cash Flows March 31, 2022 CASH FLOWS FROM FINANCING ACTIVITIES As reported Adjustment As revised Net Proceeds from Line of Credit (1,434 ) 1,434 - Proceeds from Line of Credit - 26,986 26,986 Payments to Line of Credit - (28,420 ) (28,420 ) Principal Payments on Long-Term Debt - - Principal Payments on Financing Leases (184 ) (184 ) Stock Option Exercises 33 33 Net Cash Provided by Financing Activities (1,585 ) - (1,585 ) |
Note 3 - Revenue (Tables)
Note 3 - Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Notes Tables | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] | Balance outstanding at December 31, 2022 $ 9,982 Increase (decrease) attributed to: Amounts transferred over time to contract assets 25,730 Allowance for current expected credit losses (20 ) Amounts invoiced during the period (24,902 ) Balance outstanding at March 31, 2023 $ 10,790 |
Disaggregation of Revenue [Table Text Block] | Three Months Ended March 31, 2023 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 15,725 $ 5,061 $ 586 $ 21,372 Industrial 6,590 2,408 474 9,472 Aerospace and Defense 3,415 550 79 4,044 Total net sales $ 25,730 $ 8,019 $ 1,139 $ 34,888 Three Months Ended March 31, 2022 Product/ Service Transferred Over Time Product Transferred at Point in Time Noncash Consideration Total Net Sales by Market Medical $ 9,807 $ 4,915 $ 544 $ 15,266 Industrial 6,529 1,791 347 8,667 Aerospace and Defense 6,057 425 296 6,778 Total net sales $ 22,393 $ 7,131 $ 1,187 $ 30,711 |
Note 5 - Leases (Tables)
Note 5 - Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Notes Tables | |
Lease, Cost [Table Text Block] | March 31, March 31, Lease Cost 2023 2022 Operating lease cost $ 567 $ 581 Finance lease interest cost 12 19 Finance lease amortization expense 182 182 Total lease cost $ 761 $ 782 March 31, March 31, 2023 2022 Operating leases Cash paid for amounts included in the measurement of lease liabilities $ 493 $ 434 Weighted-average remaining lease term (years) Operating leases 8.8 Finance leases 2.4 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 March 31, 2023 December 31, 2022 Assets Operating lease assets Operating lease assets $ 7,561 $ 7,850 Finance lease assets Property, Plant and Equipment 1,181 1,363 Total leased assets $ 8,742 $ 9,213 |
Schedule of Lease Liability Maturity [Table Text Block] | Operating Leases Finance Leases Total Remaining 2023 $ 1,343 $ 325 $ 1,668 2024 1,516 379 1,895 2025 1,265 103 1,368 2026 1,227 109 1,336 2027 1,256 - 1,256 Therafter 5,818 - 5,818 Total lease payments $ 12,425 $ 916 $ 13,341 Less: Interest (3,998 ) (57 ) (4,055 ) Present value of lease liabilities $ 8,427 $ 859 $ 9,286 |
Note 1 - Summary of Significa_3
Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
May 31, 2022 | Mar. 31, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jan. 01, 2023 | Dec. 31, 2021 | May 31, 2017 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 0 | |||||||
Weighted Average Number of Shares Outstanding, Diluted, Adjustment | 211,602 | 191,170 | ||||||
Letters of Credit Outstanding, Amount | $ 300 | |||||||
Restricted Cash and Cash Equivalents, Current | $ 1,366 | $ 776 | $ 1,454 | |||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 1 year 7 months 6 days | |||||||
Finite-Lived Intangible Assets, Net | $ 382 | 422 | $ 501 | |||||
Amortization of Intangible Assets | 40 | 36 | 150 | |||||
Accounts Receivable, Allowance for Credit Loss, Current | 303 | $ 334 | ||||||
Retained Earnings (Accumulated Deficit) | (12,477) | $ (11,826) | ||||||
Accounting Standards Update 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||||
Accounts Receivable, Allowance for Credit Loss, Current | $ 30 | |||||||
Retained Earnings (Accumulated Deficit) | $ 30 | |||||||
Patents Received [Member] | ||||||||
Finite-Lived Intangible Assets, Net | 95 | |||||||
Patents In Process [Member] | ||||||||
Finite-Lived Intangible Assets, Net | $ 111 | |||||||
Service-based Options [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 53,000 | |||||||
Market Condition Options [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 21,000 | |||||||
Share-Based Payment Arrangement, Option [Member] | ||||||||
Share-Based Payment Arrangement, Expense | $ 68 | 43 | ||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 694 | |||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 5 months 12 days | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 20,518 | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-Based Payment Arrangement, Expense | $ 31 | $ 5 | ||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 124 | |||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 12 months | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period | 9,000 | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,118 | |||||||
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 | 175,000 | 50,000 | ||||||
Stock Incentive Plan 2017 [Member] | Restricted Stock Units (RSUs) [Member] | Non-employee Directors [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 21,000 |
Note 1 - Summary of Significa_4
Note 1 - Summary of Significant Accounting Policies -Schedule of Option Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Outstanding - January 1, 2023 (in shares) | shares | 452,700 |
Outstanding - January 1, 2023 (in dollars per share) | $ / shares | $ 5.97 |
Granted (in shares) | shares | 0 |
Granted (in dollars per share) | $ / shares | $ 0 |
Exercised (in shares) | shares | (10,000) |
Exercised (in dollars per share) | $ / shares | $ 3.43 |
Cancelled (in shares) | shares | (1,600) |
Cancelled (in dollars per share) | $ / shares | $ 7.18 |
Outstanding - March 31, 2023 (in shares) | shares | 441,100 |
Outstanding - March 31, 2023 (in dollars per share) | $ / shares | $ 6.02 |
Outstanding - March 31, 2023 (Year) | 6 years 8 months 4 days |
Outstanding - March 31, 2023 | $ | $ 2,100 |
Exercisable - March 31, 2023 (in shares) | shares | 247,700 |
Exercisable - March 31, 2023 (in dollars per share) | $ / shares | $ 4.38 |
Exercisable - March 31, 2023 (Year) | 5 years 8 months 19 days |
Exercisable - March 31, 2023 | $ | $ 1,556 |
Note 1 - Summary of Significa_5
Note 1 - Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Raw Materials | $ 20,983 | $ 21,673 |
Work in Process | 865 | 1,238 |
Finished Goods | 672 | 671 |
Reserves | (1,176) | (1,144) |
Total | $ 21,344 | $ 22,438 |
Note 1 - Summary of Significa_6
Note 1 - Summary of Significant Accounting Policies - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Balance | $ 422 | $ 501 | $ 501 |
Additions | 71 | ||
Amortization | 40 | 36 | 150 |
Balance | 382 | 422 | |
Customer Relationships [Member] | |||
Balance | 216 | 360 | 360 |
Additions | 0 | ||
Amortization | 36 | 144 | |
Balance | 180 | 216 | |
Patents [Member] | |||
Balance | 206 | $ 141 | 141 |
Additions | 71 | ||
Amortization | 4 | 6 | |
Balance | $ 202 | $ 206 |
Note 1 - Summary of Significa_7
Note 1 - Summary of Significant Accounting Policies - Estimated Future Annual Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Total | $ 382 | $ 422 | $ 501 |
Finite-lived Intangible Assets, Excluding Projects in Process [Member] | |||
Remainder of 2023 | 119 | ||
2024 | 87 | ||
2025 | 14 | ||
2026 | 14 | ||
Thereafter | 37 | ||
Total | $ 271 |
Note 1 - Summary of Signifacnt
Note 1 - Summary of Signifacnt Accounting Policies - Error Corrections and Prior Period Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net Proceeds from Line of Credit | $ 0 | |
Proceeds from Line of Credit | 31,133 | $ 26,986 |
Payments to Line of Credit | 32,145 | 28,420 |
Payments to Line of Credit | (32,145) | (28,420) |
Principal Payments on Long-Term Debt | 0 | |
Principal Payments on Financing Leases | (96) | (184) |
Stock Option Excercises | 35 | 33 |
Net Cash Provided by Financing Activities | $ (1,073) | (1,585) |
Previously Reported [Member] | ||
Net Proceeds from Line of Credit | (1,434) | |
Proceeds from Line of Credit | 0 | |
Payments to Line of Credit | 0 | |
Payments to Line of Credit | 0 | |
Principal Payments on Long-Term Debt | 0 | |
Principal Payments on Financing Leases | (184) | |
Stock Option Excercises | 33 | |
Net Cash Provided by Financing Activities | (1,585) | |
Revision of Prior Period, Adjustment [Member] | ||
Net Proceeds from Line of Credit | 1,434 | |
Proceeds from Line of Credit | 26,986 | |
Payments to Line of Credit | 28,420 | |
Payments to Line of Credit | $ (28,420) |
Note 2 - Concentration of Cre_2
Note 2 - Concentration of Credit Risk and Major Customers (Details Textual) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 | |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | $ 2,633 | $ 1,617 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member] | |||
Concentration Risk Number of Customers | 1 | ||
Concentration Risk, Percentage | 29% | 23% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | |||
Concentration Risk, Percentage | 24% | 21% | |
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | One Customer [Member] | |||
Concentration Risk, Percentage | 20% | 22% | |
CHINA | |||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | $ 1,229 | ||
MEXICO | |||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | $ 13 | ||
Non-US [Member] | Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | |||
Concentration Risk, Percentage | 4% | 5% |
Note 3 - Revenue 1 (Details Tex
Note 3 - Revenue 1 (Details Textual) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Percentage of Revenue Transferred to Customers | 74% | 73% |
Revenue Remaining Performance Obligation, Customers Upon Shipment With Payment Terms | 120 days |
Note 3 - Revenue 2 (Details Tex
Note 3 - Revenue 2 (Details Textual) | Mar. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 180 days |
Note 3 - Revenue - Contract Ass
Note 3 - Revenue - Contract Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Balance outstanding at December 31, 2022 | $ 9,982 | |
Amounts transferred over time to contract assets | $ 25,730 | |
Allowance for current expected credit losses | (20) | |
Amounts invoiced during the period | (24,902) | |
Balance outstanding at March 31, 2023 | $ 10,790 |
Note 3 - Revenue - Disaggregati
Note 3 - Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net Sales | $ 34,888 | $ 30,711 |
Medical [Member] | ||
Net Sales | 21,372 | 15,266 |
Industrial [Member] | ||
Net Sales | 9,472 | 8,667 |
Aerospace and Defense [Member] | ||
Net Sales | 4,044 | 6,778 |
Transferred over Time [Member] | ||
Net Sales | 25,730 | 22,393 |
Transferred over Time [Member] | Medical [Member] | ||
Net Sales | 15,725 | 9,807 |
Transferred over Time [Member] | Industrial [Member] | ||
Net Sales | 6,590 | 6,529 |
Transferred over Time [Member] | Aerospace and Defense [Member] | ||
Net Sales | 3,415 | 6,057 |
Transferred at Point in Time [Member] | ||
Net Sales | 8,019 | 7,131 |
Transferred at Point in Time [Member] | Medical [Member] | ||
Net Sales | 5,061 | 4,915 |
Transferred at Point in Time [Member] | Industrial [Member] | ||
Net Sales | 2,408 | 1,791 |
Transferred at Point in Time [Member] | Aerospace and Defense [Member] | ||
Net Sales | 550 | 425 |
Noncash Consideration [Member] | ||
Net Sales | 1,139 | 1,187 |
Noncash Consideration [Member] | Medical [Member] | ||
Net Sales | 586 | 544 |
Noncash Consideration [Member] | Industrial [Member] | ||
Net Sales | 474 | 347 |
Noncash Consideration [Member] | Aerospace and Defense [Member] | ||
Net Sales | $ 79 | $ 296 |
Note 5 - Financing Arrangemen_2
Note 5 - Financing Arrangements (Details Textual) - Credit Agreement [Member] $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2020 | Jun. 15, 2017 USD ($) | |
Bank of America [Member] | ||||
Debt Issuance Costs, Net | $ 41 | $ 44 | ||
Bank of America [Member] | ||||
Long-Term Line of Credit | 5,886 | $ 6,897 | ||
Line of Credit, Minimum Fixed Charge Coverage Ratio During the Period | 1 | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 5,934 | |||
Bank of America [Member] | Line of Credit [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 16,000 | |||
Debt Instrument, Interest Rate During Period | 7.30% | 5.20% |
Note 5 - Leases (Details Textua
Note 5 - Leases (Details Textual) | Mar. 31, 2023 |
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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating lease cost | $ 567 | $ 581 |
Cash paid for amounts included in the measurement of lease liabilities | $ 493 | 434 |
Operating leases (Year) | 8 years 9 months 18 days | |
Finance lease interest cost | $ 12 | 19 |
Finance leases (Year) | 2 years 4 months 24 days | |
Finance lease amortization expense | $ 182 | 182 |
Operating leases | 7.70% | |
Finance leases | 5.20% | |
Total lease cost | $ 761 | $ 782 |
Note 5 - Leases - Supplemental
Note 5 - Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating lease assets | $ 7,561 | $ 7,850 |
Total leased assets | 8,742 | 9,213 |
Property and Equipment [Member] | ||
Finance lease assets | $ 1,181 | $ 1,363 |
Note 6 - Leases - Maturity of L
Note 6 - Leases - Maturity of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Remaining 2023 | $ 1,343 |
Remaining 2023 | 325 |
Remaining 2023 | 1,668 |
2024 | 1,516 |
2024 | 379 |
2024 | 1,895 |
2025 | 1,265 |
2025 | 103 |
2025 | 1,368 |
2026 | 1,227 |
2026 | 109 |
2026 | 1,336 |
2027 | 1,256 |
2027 | 0 |
2027 | 1,256 |
Therafter | 5,818 |
Therafter | 0 |
Therafter | 5,818 |
Total lease payments | 12,425 |
Total lease payments | 916 |
Total lease payments | 13,341 |
Less: Interest | (3,998) |
Less: Interest | (57) |
Less: Interest | (4,055) |
Present value of lease liabilities | 8,427 |
Present value of lease liabilities | 859 |
Present value of lease liabilities | $ 9,286 |
Note 6 - Income Taxes (Details
Note 6 - Income Taxes (Details Textual) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Effective Income Tax Rate Reconciliation, Percent | 2,800% | 9,400% |
Note 7 - Employee Retention C_2
Note 7 - Employee Retention Credit (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Mar. 31, 2023 | |
Proceeds from Employee Retention Credit, CARES Act | $ 2,559 | |
Employee Retention Credit Receivable | $ 2,650 | $ 2,650 |
Note 8 - Related Party Transa_2
Note 8 - Related Party Transactions (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Agreement Between the BIRD Foundation, the Company, and MARPE Technologies, LTD [Member] | ||
Agreement, Conditional Grant | $ 1,000 | |
Agreement, Exclusive Manufacturing Rights, Term (Year) | 10 years | |
Abilitech Medical, Inc [Member] | Loss on Long-Term Purchase Commitment [Member] | ||
Accounts Receivable, after Allowance for Credit Loss | $ 226 | |
Abilitech Medical, Inc [Member] | Payments Received for Delivery of EMS Products [Member] | ||
Related Party Transaction, Amounts of Transaction | $ 0 | $ 54 |
David Kunin [Member] | Marpe Technologies, LTD [Member] | Maximum [Member] | ||
Ownership, Percent | 10% | |
Marpe Technologies, LTD [Member] | Agreement Between the BIRD Foundation, the Company, and MARPE Technologies, LTD [Member] | ||
Agreement, Conditional Grant Matching Amount | $ 500 | |
Marpe Technologies, LTD [Member] | Agreement Between the BIRD Foundation, the Company, and MARPE Technologies, LTD [Member] | Related Party [Member] | ||
Revenue from Related Parties | $ 67 | $ 169 |