Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 04, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity File Number | 1-5332 | |
Entity Registrant Name | P&F INDUSTRIES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-1657413 | |
Entity Address, Address Line One | 445 Broadhollow Road, Suite 100 | |
Entity Address, City or Town | Melville | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11747 | |
City Area Code | 631 | |
Local Phone Number | 694-9800 | |
Entity Central Index Key | 0000075340 | |
Current Fiscal Year End Date | --12-31 | |
Title of 12(b) Security | Class A common stock, $1.00 par value | |
Trading Symbol | PFIN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 3,181,286 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash | $ 789,000 | $ 904,000 |
Accounts receivable - net | 8,448,000 | 7,468,000 |
Inventories | 21,623,000 | 18,362,000 |
Prepaid expenses and other current assets | 2,608,000 | 2,806,000 |
TOTAL CURRENT ASSETS | 33,468,000 | 29,540,000 |
PROPERTY AND EQUIPMENT | ||
Land | 507,000 | 507,000 |
Buildings and improvements | 3,594,000 | 3,544,000 |
Machinery and equipment | 25,601,000 | 25,673,000 |
Property, Plant and Equipment, Gross | 29,702,000 | 29,724,000 |
Less accumulated depreciation and amortization | 21,423,000 | 20,329,000 |
NET PROPERTY AND EQUIPMENT | 8,279,000 | 9,395,000 |
GOODWILL | 4,446,000 | 4,449,000 |
OTHER INTANGIBLE ASSETS - net | 5,749,000 | 6,226,000 |
DEFERRED INCOME TAXES - net | 496,000 | 226,000 |
RIGHT-OF-USE ASSETS - OPERATING LEASES | 3,031,000 | 3,281,000 |
OTHER ASSETS - net | 80,000 | 250,000 |
TOTAL ASSETS | 55,549,000 | 53,367,000 |
CURRENT LIABILITIES | ||
Short-term borrowings | 3,295,000 | 1,374,000 |
Accounts payable | 3,598,000 | 2,199,000 |
Accrued compensation and benefits | 1,231,000 | 525,000 |
Accrued other liabilities | 1,328,000 | 1,354,000 |
Current leased liabilities - operating leases | 816,000 | 847,000 |
Current maturities of long-term debt (PPP loan) | 1,983,000 | |
TOTAL CURRENT LIABILITIES | 10,268,000 | 8,282,000 |
Noncurrent leased liabilities - operating leases | 2,261,000 | 2,474,000 |
Long-term debt, less current maturities (PPP loan) | 946,000 | |
Other liabilities | 102,000 | 127,000 |
TOTAL LIABILITIES | 12,631,000 | 11,829,000 |
SHAREHOLDERS' EQUITY | ||
Preferred stock - $10 par; authorized - 2,000,000 shares; no shares issued | ||
Additional paid-in capital | 14,158,000 | 14,144,000 |
Retained earnings | 35,139,000 | 33,756,000 |
Treasury stock, at cost - 1,273,000 shares at September 30, 2021 and at December 31, 2020 | (10,213,000) | (10,213,000) |
Accumulated other comprehensive loss | (619,000) | (577,000) |
TOTAL SHAREHOLDERS' EQUITY | 42,918,000 | 41,538,000 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 55,549,000 | 53,367,000 |
Common Class A [Member] | ||
SHAREHOLDERS' EQUITY | ||
Common stock | 4,453,000 | 4,428,000 |
Common Class B [Member] | ||
SHAREHOLDERS' EQUITY | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value (in dollars per share) | $ 10 | $ 10 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Treasury stock, shares | 1,273,000 | 1,273,000 |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 7,000,000 | 7,000,000 |
Common stock, shares issued | 4,453,000 | 4,428,000 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 2,000,000 | 2,000,000 |
Common stock, shares issued | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME | ||||
Net revenue | $ 12,985,000 | $ 12,406,000 | $ 40,520,000 | $ 37,276,000 |
Cost of sales | 9,011,000 | 8,883,000 | 27,062,000 | 26,223,000 |
Gross profit | 3,974,000 | 3,523,000 | 13,458,000 | 11,053,000 |
Selling, general and administrative expenses | 4,734,000 | 4,673,000 | 15,183,000 | 14,983,000 |
Impairment of goodwill and other intangible assets | 0 | 0 | 0 | 1,612,000 |
Operating loss | (760,000) | (1,150,000) | (1,725,000) | (5,542,000) |
Loss on sale of property and equipment | (67,000) | (22,000) | (67,000) | (22,000) |
Other income | 0 | 0 | 2,929,000 | 31,000 |
Interest expense | (14,000) | (21,000) | (21,000) | (118,000) |
(Loss) income before income taxes | (841,000) | (1,193,000) | 1,116,000 | (5,651,000) |
Income tax benefit | (108,000) | (336,000) | (267,000) | (1,655,000) |
Net (loss) income | $ (733,000) | $ (857,000) | $ 1,383,000 | $ (3,996,000) |
Basic (loss) earnings per share | $ (0.23) | $ (0.27) | $ 0.44 | $ (1.27) |
Diluted (loss) earnings per share | $ (0.23) | $ (0.27) | $ 0.43 | $ (1.27) |
Weighted average common shares outstanding: | ||||
Basic | 3,181,000 | 3,151,000 | 3,177,000 | 3,148,000 |
Diluted | 3,181,000 | 3,151,000 | 3,191,000 | 3,148,000 |
Net (loss) income | $ (733,000) | $ (857,000) | $ 1,383,000 | $ (3,996,000) |
Other comprehensive (loss) income - foreign currency translation adjustment | (61,000) | 77,000 | (42,000) | (60,000) |
Total comprehensive (loss) income | $ (794,000) | $ (780,000) | $ 1,341,000 | $ (4,056,000) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Class A [Member]Common Stock [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Treasury stock [Member] | Accumulated other comprehensive loss [Member] | Total |
Balance at Dec. 31, 2019 | $ 4,416,000 | $ 14,056,000 | $ 38,867,000 | $ (10,213,000) | $ (620,000) | $ 46,506,000 |
Balance (in shares) at Dec. 31, 2019 | 4,416,000 | (1,273,000) | ||||
Net (loss) income | $ 0 | 0 | (3,996,000) | $ 0 | 0 | (3,996,000) |
Exercise of stock options | $ 1,000 | 2,000 | 3,000 | |||
Exercise of stock options (in shares) | 1,000 | |||||
Restricted common stock compensation | $ 6,000 | 27,000 | 0 | 0 | 0 | 33,000 |
Restricted common stock compensation (in shares) | 6,000 | |||||
Stock-based compensation | $ 0 | 39,000 | 0 | 0 | 0 | 39,000 |
Dividends | 0 | 0 | (157,000) | 0 | 0 | (157,000) |
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | (60,000) | (60,000) |
Balance at Sep. 30, 2020 | $ 4,423,000 | 14,124,000 | 34,714,000 | $ (10,213,000) | (680,000) | 42,368,000 |
Balance (in shares) at Sep. 30, 2020 | 4,423,000 | (1,273,000) | ||||
Balance at Jun. 30, 2020 | $ 4,423,000 | 14,106,000 | 35,571,000 | $ (10,213,000) | (757,000) | 43,130,000 |
Balance (in shares) at Jun. 30, 2020 | 4,423,000 | (1,273,000) | ||||
Net (loss) income | $ 0 | 0 | (857,000) | $ 0 | 0 | (857,000) |
Restricted common stock compensation | $ 0 | 8,000 | 0 | 0 | 0 | 8,000 |
Restricted common stock compensation (in shares) | 0 | |||||
Stock-based compensation | $ 0 | 10,000 | 0 | 0 | 0 | 10,000 |
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 77,000 | 77,000 |
Balance at Sep. 30, 2020 | $ 4,423,000 | 14,124,000 | 34,714,000 | $ (10,213,000) | (680,000) | 42,368,000 |
Balance (in shares) at Sep. 30, 2020 | 4,423,000 | (1,273,000) | ||||
Balance at Dec. 31, 2020 | $ 4,428,000 | 14,144,000 | 33,756,000 | $ (10,213,000) | (577,000) | 41,538,000 |
Balance (in shares) at Dec. 31, 2020 | 4,428,000 | (1,273,000) | ||||
Net (loss) income | $ 0 | 0 | 1,383,000 | $ 0 | 0 | 1,383,000 |
Restricted common stock compensation | $ 25,000 | 10,000 | 0 | $ 0 | 0 | 35,000 |
Restricted common stock compensation (in shares) | 25,000 | 0 | ||||
Stock-based compensation | $ 0 | 4,000 | 0 | $ 0 | 0 | 4,000 |
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | (42,000) | (42,000) |
Balance at Sep. 30, 2021 | $ 4,453,000 | 14,158,000 | 35,139,000 | $ (10,213,000) | (619,000) | 42,918,000 |
Balance (in shares) at Sep. 30, 2021 | 4,453,000 | (1,273,000) | ||||
Balance at Jun. 30, 2021 | $ 4,453,000 | 14,149,000 | 35,872,000 | $ (10,213,000) | (558,000) | 43,703,000 |
Balance (in shares) at Jun. 30, 2021 | 4,453,000 | (1,273,000) | ||||
Net (loss) income | $ 0 | 0 | (733,000) | $ 0 | 0 | (733,000) |
Restricted common stock compensation | $ 0 | 8,000 | 0 | 0 | 0 | 8,000 |
Restricted common stock compensation (in shares) | 0 | |||||
Stock-based compensation | $ 0 | 1,000 | 0 | 0 | 0 | 1,000 |
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | (61,000) | (61,000) |
Balance at Sep. 30, 2021 | $ 4,453,000 | $ 14,158,000 | $ 35,139,000 | $ (10,213,000) | $ (619,000) | $ 42,918,000 |
Balance (in shares) at Sep. 30, 2021 | 4,453,000 | (1,273,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities: | ||
Net (loss) income | $ 1,383,000 | $ (3,996,000) |
Non-cash and other charges: | ||
Depreciation and amortization | 1,345,000 | 1,339,000 |
Amortization of other intangible assets | 474,000 | 544,000 |
Amortization of operating lease assets | 670,000 | 675,000 |
Amortization of debt issue costs | 12,000 | 12,000 |
Amortization of consideration payable to a customer | 202,000 | 202,000 |
Provision for losses on accounts receivable | 19,000 | 47,000 |
Stock-based compensation | 4,000 | 39,000 |
Restricted stock-based compensation | 35,000 | 33,000 |
Forgiveness of PPP loan | (2,929,000) | 0 |
Deferred income taxes | (267,000) | (771,000) |
Loss on sale or disposal of fixed assets | 33,000 | 22,000 |
Fair value adjustment of assets held for sale | 40,000 | 0 |
Gain on lease obligation settlement | 0 | (31,000) |
Impairment of goodwill and other intangible assets | 0 | 1,612,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,007,000) | 712,000 |
Inventories | (3,274,000) | 3,384,000 |
Prepaid expenses and other current assets | 248,000 | (341,000) |
Other assets | 0 | (32,000) |
Accounts payable | 1,406,000 | 708,000 |
Accrued compensation and benefits | 711,000 | (1,190,000) |
Accrued other liabilities and other current liabilities | (14,000) | (239,000) |
Operating lease liabilities | (665,000) | (702,000) |
Other liabilities | (36,000) | (2,000) |
Total adjustments | (2,993,000) | 6,021,000 |
Net cash (used in) provided by operating activities | (1,610,000) | 2,025,000 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (428,000) | (956,000) |
Proceeds from sale of fixed asset | 28,000 | 1,000 |
Net cash used in investing activities | (400,000) | (955,000) |
Cash Flows from Financing Activities: | ||
Dividend payments | 0 | (157,000) |
Proceeds from exercise of stock options | 0 | 3,000 |
Net proceeds (repayments) from short-term borrowings | 1,921,000 | (3,314,000) |
Proceeds from PPP loan | 0 | 2,929,000 |
Net cash provided by (used in) financing activities | 1,921,000 | (539,000) |
Effect of exchange rate changes on cash | (26,000) | (3,000) |
Net (decrease) increase in cash | (115,000) | 528,000 |
Cash at beginning of period | 904,000 | 380,000 |
Cash at end of period | 789,000 | 908,000 |
Cash paid for: | ||
Interest | 25,000 | 109,000 |
Taxes | 12,000 | 26,000 |
Cash paid for amounts included in the measurement of operating lease liabilities | 6,000 | 5,000 |
Non-cash information: | ||
Right of Use ("ROU") assets recognized for new operating lease liabilities | $ 320,000 | $ 140,000 |
BUSINESS AND SUMMARY OF ACCOUNT
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all normal, recurring adjustments necessary to present fairly the information set forth therein. Results for interim periods are not necessarily indicative of results to be expected for a full year. The consolidated balance sheet information as of December 31, 2020, was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”). The interim consolidated financial statements contained herein should be read in conjunction with the 2020 Form 10-K. The consolidated financial statements have been reported in U.S. dollars by translating asset and liability amounts of a foreign wholly-owned subsidiary at the closing exchange rate, equity amounts at historical rates and the results of operations and cash flow at the average of the prevailing exchange rates during the periods reported. As a result, the Company is exposed to foreign currency translation gains or losses. These gains or losses are presented in the Company’s consolidated financial statements as “Other comprehensive income (loss) - foreign currency translation adjustment.” Principles of Consolidation The unaudited consolidated financial statements contained herein include the accounts of P&F Industries, Inc., and its subsidiaries (“P&F” or the “Company”). All significant intercompany balances and transactions have been eliminated. The Company P&F, a Delaware corporation incorporated in 1963, conducts its business through a wholly-owned subsidiary, Continental Tool Group, Inc. (“Continental”), which in turn operates through its wholly-owned subsidiaries, Florida Pneumatic Manufacturing Corporation (“Florida Pneumatic”) and Hy-Tech Machine, Inc. (“Hy-Tech”). Florida Pneumatic Florida Pneumatic directly, and through its wholly-owned subsidiaries Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”), and Jiffy Air Tool, Inc. (“Jiffy”) imports, manufactures, and markets pneumatic hand tools of its own design, primarily to the retail, industrial, automotive and aerospace markets. Its products include sanders, grinders, drills, saws, and impact wrenches. These tools are similar in appearance and function to electric hand tools, but are powered by compressed air, rather than by electricity or a battery. Air tools, as they are more commonly referred to, generally offer better performance, and weigh less than their electrical counterparts. Florida Pneumatic imports and/or manufactures approximately 75 types of pneumatic hand tools, most of which are sold at prices ranging from $50 to $1,000, under the names “Florida Pneumatic,” “Universal Tool”, “Jiffy Air Tool”, AIRCAT, NITROCAT, as well as under the trade names or trademarks of several private label customers. These products are sold to retailers, distributors, manufacturers and private label customers through in-house sales personnel and manufacturers’ representatives. The AIRCAT and NITROCAT brands of pneumatic tools are sold primarily to the automotive service and repair market (“automotive market”). Users of Florida Pneumatic’s hand tools include industrial maintenance and production staffs, do-it-yourself mechanics, professional automobile mechanics and auto body personnel. Jiffy manufactures and distributes pneumatic tools and components primarily to aerospace manufacturers. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) The Company - Continued Hy-Tech Hy-Tech designs, manufactures, and markets industrial tools, systems, gearing, accessories, and a wide variety of replacement parts under various brands including ATP, NUMATX, and Thaxton. Hy-Tech produces and sells heavy-duty pneumatic impact tools, grinders, air motors, hydro-pneumatic riveters, hydrostatic test plugs, impact sockets and custom gears, with prices ranging from $300 to $42,000. Hy-Tech’s “Engineered Solutions” products are sold directly to Original Equipment Manufacturers (“OEM’s”), and industrial branded products are sold through a broad network of specialized industrial distributors serving the power generation, petrochemical, aerospace, construction, railroad, mining, ship building and fabricated metals industries. Hy-Tech works directly with its industrial customers, designing and manufacturing products from finished components to complete turnkey systems to be sold under their own brand names. Hy-Tech’s Power Transmission Group, or PTG, is a custom gear, gearbox and power transmission system manufacturer. In addition to manufacturing a broad range of standard and custom gears for manufacturers in a wide variety of industries, PTG reverse engineers existing gears as well as designs new gears, utilizing state-of-the-art technologies, including 3D imaging and Gleason Gear modeling software. COVID-19 On March 11, 2020, the World Health Organization designated the novel coronavirus (“COVID-19”) as a global pandemic. The Company continues to actively monitor COVID-19 and its continued impact on its operations and financial results. Further, the negative impact of the world-wide supply-chain crisis due primarily to the global pandemic has adversely affected many of the Company’s product lines, particularly its retail and automotive lines. However, the Company continues to incur delays in container shipments from Asia as well as significant increases in inbound ocean freight costs, which the Company believes is due primarily to the global pandemic. We expect this to continue for the foreseeable future. The Company’s corporate office and business units are continuing to work alongside their external business partners and customers to minimize the continued business constraints caused by COVID-19 on its business. Due in large part to shelter-in-place restrictions that were implemented in late first quarter of 2020, which for many has been lifted during the latter portion of 2020 and early 2021, as well as significant decreases in travel and customer consumption behavior, the Company experienced a reduction in its revenue and earnings per share during 2020 and has continued to a lesser degree during the first nine months of 2021. It is unclear what the financial impacts from COVID-19 will be on the Company’s businesses in the future. Going Concern Assessment Management assesses going concern uncertainty to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period,” as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, it considers various scenarios, forecasts, projections, estimates and makes certain key assumptions, including the timing and nature of projected cash expenditures, its ability to reduce, delay or curtail cash outflows and its ability to raise additional capital, if necessary, among other factors. Management has prepared estimates of operations covering the look-forward period and believes that sufficient funds will be generated from operations, working capital, and its existing credit facility to fund its operations. The Company has contingency plans in which it would further reduce or defer additional expenses and cash outlays, should operations weaken beyond current forecasts. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Going Concern Assessment - Continued The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is unclear what the full impact of COVID-19 will be or when the Company believes a return to more normal operations may occur. Further, as part of the business incentives offered in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Company, on April 20, 2020, received a $2.9 million Paycheck Protection Program (“PPP”) loan. See Note 9 - CARES Act to the Company’s consolidated financial statements for further discussion. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Customer Concentration At September 30, 2021, and December 31, 2020, accounts receivable from The Home Depot (“THD”) was 33.8% and 38.0%, respectively, of total accounts receivable. Accounts receivable attributable to Amazon.Com, Inc., (“Amazon”) at September 30, 2021, and December 31, 2020, was 0.1% and 15.8%, respectively, of total net accounts receivable. Revenue from THD, stated as a percentage of the Company’s total revenue during the three and nine-month periods ended September 30, 2021, was 24.8% and 26.6%, respectively, and 30.0% and 25.7%, respectively, for the same periods in 2020. There were no other customers that accounted for more than 10% of consolidated revenue or accounts receivable during the three and nine-month periods ended September 30, 2021, or 2020. Management Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, goodwill, intangible assets and other long-lived assets, contingent consideration, income taxes and deferred taxes. Descriptions of these policies are discussed in the Company’s 2020 Form 10-K. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. Significant Accounting Policies The Company’s significant accounting policies are described in “Note 1: Summary of Significant Accounting Policies” of our 2020 Form 10-K. Lease Accounting The Company adheres to the standards set forth in Accounting Standards Codification (“ASC”) 842, “Leases NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Lease Accounting - Continued If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The Company’s operating leases include vehicles, office space and the use of real property. The Company has not identified any new material finance leases for the three months ended September 30, 2021. The Company considers any options to extend the term of a lease when measuring the Right-of-Use lease asset. For the three and nine-month periods ended September 30, 2021, and 2020, the Company had $222,000 and $670,000, and $223,000 and $675,000, respectively, in operating lease expense. The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of September 30, 2021: As of September 30, 2021 2021 (excluding the nine months ended September 30, 2021) $ 217,000 2022 843,000 2023 841,000 2024 566,000 2025 296,000 Thereafter 867,000 Total operating lease payments 3,630,000 Less imputed interest (553,000) Total operating lease liabilities $ 3,077,000 Weighted average remaining lease term 5.7 years Weighted average discount rate 6.87 % Revenue Recognition The Company’s revenue recognition policies are detailed in its 2020 Form 10-K. The following tables present the Company’s revenues recognized under ASC Topic 606, “ Revenue from Contracts with Customers”, NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Florida Pneumatic Florida Pneumatic markets its air tool products to four primary sectors within the pneumatic tool market; Retail, Automotive, Industrial and Aerospace. It also generates revenue from its Berkley products line, as well as a line of air filters and other OEM parts are reported as Other. Three months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,168,000 33.0 % $ 3,530,000 36.5 % $ (362,000) (10.3) % Retail 3,222,000 33.5 3,718,000 38.4 (496,000) (13.3) Industrial 1,257,000 13.1 1,044,000 10.8 213,000 20.4 Aerospace 1,832,000 19.1 1,268,000 13.1 564,000 44.5 Other 128,000 1.3 121,000 1.2 7,000 5.8 Total $ 9,607,000 100.0 % $ 9,681,000 100.0 % $ (74,000) (0.8) % Nine months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 11,053,000 35.4 % $ 9,690,000 34.2 % $ 1,363,000 14.1 % Retail 10,775,000 34.5 9,569,000 33.8 1,206,000 12.6 Industrial 3,919,000 12.6 2,383,000 8.4 1,536,000 64.5 Aerospace 5,094,000 16.3 6,341,000 22.4 (1,247,000) (19.7) Other 380,000 1.2 368,000 1.2 12,000 3.3 Total $ 31,221,000 100.0 % $ 28,351,000 100.0 % $ 2,870,000 10.1 % NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Hy-Tech Hy-Tech designs, manufactures, and sells a wide range of industrial products which are categorized as ATP for reporting purposes. In addition to Engineered Solutions, products and components manufactured for other companies under their brands are included in the OEM category in the table below. PTG revenue is comprised of products manufactured and sold by Hy-Tech’s gear business. NUMATX, Thaxton and other peripheral product lines, such as general machining, are reported as Other. Three months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 1,668,000 49.4 % $ 872,000 32.0 % $ 796,000 91.3 % ATP 751,000 22.2 624,000 22.9 127,000 20.4 PTG 882,000 26.1 1,027,000 37.7 (145,000) (14.1) Other 77,000 2.3 202,000 7.4 (125,000) (61.9) Total $ 3,378,000 100.0 % $ 2,725,000 100.0 % $ 653,000 24.0 % Nine months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 4,688,000 50.4 % $ 3,513,000 39.4 % 1,175,000 33.4 % ATP 2,242,000 24.1 2,254,000 25.2 (12,000) (0.5) PTG 2,132,000 22.9 2,783,000 31.2 (651,000) (23.4) Other 237,000 2.6 375,000 4.2 (138,000) (36.8) Total $ 9,299,000 100.0 % $ 8,925,000 100.0 % 374,000 4.2 % Recently Adopted Accounting Pronouncements During the nine-month period ended September 30, 2021, there were no accounting pronouncements or other authoritative guidance issued that the Company adopted. No other new accounting pronouncement issued or effective during the three and nine-month period ended September 30, 2021, has or is expected to have a material impact on our consolidated financial statements or disclosures. |
(LOSS) INCOME PER SHARE
(LOSS) INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
(LOSS) INCOME PER SHARE | |
(LOSS) INCOME PER SHARE | NOTE 2 – (LOSS) INCOME PER SHARE Basic (loss) income per common share is based only on the weighted average number of shares of Common Stock outstanding for the periods. Diluted (loss) income per common share reflects the effect of shares of Common Stock issuable upon the exercise of options unless the effect on earnings is anti-dilutive. Diluted (loss) income per common share is computed using the treasury stock method. Under this method, the aggregate number of shares of Common Stock outstanding reflects the assumed use of proceeds from the hypothetical exercise of any outstanding options to purchase shares of Common Stock. The average market value for the period is used as the assumed purchase price. NOTE 2 – (LOSS) INCOME PER SHARE – (Continued) The following table sets forth the elements of basic and diluted (loss) income per common share: Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Numerator for basic and diluted (loss) income per common share: Net (loss) income $ (733,000) $ (857,000) $ 1,383,000 $ (3,996,000) Denominator: Denominator for basic (loss) earnings per share - weighted average common shares outstanding 3,181,000 3,151,000 3,177,000 3,148,000 Dilutive securities (1) — — 14,000 — Denominator for diluted (loss) income per share - weighted average common shares outstanding 3,181,000 3,151,000 3,191,000 3,148,000 (1) At September 30, 2021, and 2020, there were outstanding stock options whose exercise prices were higher than the average market values of the underlying Common Stock for the period. The weighted average of anti-dilutive stock options outstanding was as follows: Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Weighted average anti-dilutive stock options outstanding 135,000 183,000 138,000 172,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 3 – STOCK-BASED COMPENSATION There were no options granted or issued The following is a summary of the changes in outstanding options during the nine-month period ended September 30, 2021: Weighted Weighted average average remaining Aggregate exercise contractual life Intrinsic Option shares price (years) Value Outstanding, January 1, 2021 200,878 $ 6.59 4.1 $ 85,663 Granted — — — — Exercised — — — — Forfeited 6,180 7.61 — — Expired 16,199 4.37 — — Outstanding, September 30, 2021 178,499 $ 6.76 3.7 $ 83,910 Vested, September 30, 2021 175,831 $ 6.73 3.6 $ 83,910 NOTE 3 – STOCK-BASED COMPENSATION - (Continued) Weighted average grant- Option shares date fair value Non-vested options, January 1, 2021 5,334 $ 4.60 Granted — — Vested (2,666) 4.60 Forfeited — — Non-vested options, September 30, 2021 2,668 $ 4.60 On April 22, 2021, the Company’s Board of Directors (the “Board”) approved the amendment and restatement of the P&F Industries, Inc. 2012 Stock Incentive Plan, (the “2012 Plan”) to be renamed the P&F Industries, Inc. 2021 Stock Incentive Plan (the “2021 Plan”) following the approval and recommendation of the Compensation Committee of the Board (the “Compensation Committee”). The 2021 Plan amends and restates the 2012 Plan in its entirety and, among other things, incorporates the following key changes: (i) it increases the aggregate share reserve by an additional 175,000 shares for a total share reserve of 500,000 shares; (ii) it limits the aggregate amount of stock-based and cash-based awards to any non-employee director with respect to any fiscal year for service to the Board at $300,000 (or $450,000 for a non-employee director serving in a lead role); and (iii) extends the term from April 20, 2022 to April 22, 2031. The amendment and restatement was approved by the Board and was approved by the Company’s shareholders during its 2021 Annual Meeting of Stockholders held on May 26, 2021. As a result of the foregoing, the remaining number of shares of Common Stock available for issuance under the 2021 Plan at September 30, 2021, was 203,037. Restricted Stock On February 16, 2021, the Company granted 25,000 restricted shares of its Common Stock to its Chief Financial Officer. The Company determined that the fair value of these shares was $6.36 per share, which was the closing price of the Company’s Common Stock on the date of the grant. The Company will ratably amortize over a five-year vesting period the total non-cash compensation expense of approximately $159,000, or $32,000 per annum, to selling, general and administrative expenses. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 4 – FAIR VALUE MEASUREMENTS Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company is required to classify certain assets and liabilities based on the following hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets that can be assessed at the measurement date. Level 2: Inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. The guidance requires the use of observable market data if such data is available without undue cost and effort. NOTE 4 – FAIR VALUE MEASUREMENTS - (Continued) As of September 30, 2021, and December 31, 2020, the carrying amounts reflected in the accompanying consolidated balance sheets for current assets and current liabilities approximated fair value due to the short-term nature of these accounts. Assets and liabilities measured at fair value on a non-recurring basis include goodwill and intangible assets. Such assets are reviewed quarterly for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (Level 3). |
ACCOUNTS RECEIVABLE AND ALLOWAN
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | 9 Months Ended |
Sep. 30, 2021 | |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | NOTE 5 – ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable - net consists of: September 30, 2021 December 31, 2020 Accounts receivable $ 8,724,000 $ 7,726,000 Allowance for doubtful accounts, sales discounts and chargebacks (276,000) (258,000) $ 8,448,000 $ 7,468,000 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2021 | |
INVENTORIES | |
INVENTORIES | NOTE 6 – INVENTORIES Inventories consist of: September 30, 2021 December 31, 2020 Raw material $ 1,979,000 $ 2,077,000 Work in process 1,489,000 1,127,000 Finished goods 18,155,000 15,158,000 $ 21,623,000 $ 18,362,000 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill are as follows: Balance, January 1, 2021 $ 4,449,000 Currency translation adjustment (3,000) Balance, September 30, 2021 $ 4,446,000 NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS - (Continued) Other intangible assets September 30, 2021 December 31, 2020 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,498,000 $ 3,416,000 $ 3,082,000 $ 6,502,000 $ 3,034,000 $ 3,468,000 Trademarks and trade names (1) 2,184,000 — 2,184,000 2,187,000 — 2,187,000 Trademarks and trade names 200,000 69,000 131,000 200,000 59,000 141,000 Engineering drawings 330,000 250,000 80,000 330,000 239,000 91,000 Non-compete agreements (1) 333,000 284,000 49,000 335,000 266,000 69,000 Patents 1,286,000 1,063,000 223,000 1,286,000 1,016,000 270,000 Totals $ 10,831,000 $ 5,082,000 $ 5,749,000 $ 10,840,000 $ 4,614,000 $ 6,226,000 (1) A portion of these intangibles are maintained in a foreign currency and are therefore subject to foreign exchange rate fluctuations. The weighted average amortization period for intangible assets was as follows: September 30, 2021 December 31, 2020 Customer relationships 6.9 7.6 Trademarks and trade names 9.8 10.5 Engineering drawings 5.4 6.1 Non-compete agreements 2.3 3.0 Patents 4.7 5.2 Amortization expense of intangible assets subject to amortization was as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 $ 158,000 $ 158,000 $ 474,000 $ 544,000 Amortization expense for the balance of 2021, and for each of the next five years and thereafter is estimated to be as follows: October 1 through December 31, 2021 $ 157,000 2022 629,000 2023 625,000 2024 577,000 2025 548,000 Thereafter 1,029,000 $ 3,565,000 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
DEBT | |
DEBT | NOTE 8 – DEBT In October 2010, the Company entered into a Loan and Security Agreement (“Credit Agreement”) with an affiliate of Capital One, National Association (“Capital One” or the “Bank”). The Credit Agreement, as amended and restated in April 2017 and further amended from time-to-time, among other things, provides the ability to borrow funds under a $16,000,000 revolver line (“Revolver”), subject to certain borrowing base criteria. Additionally, there is a $2,000,000 line for capital expenditures (“Capex Loan”), with $1,600,000 available for future borrowings. Revolver and Capex Loan borrowings are secured by the Company’s accounts receivable, inventory, equipment, and real property, among other things. P&F and certain of its subsidiaries are borrowers under the Credit Agreement, and their obligations are cross guaranteed by certain other subsidiaries. The Credit Agreement expires on February 8, 2024. At the Company’s option, Revolver borrowings bear interest at either London Interbank Offered Rate (“LIBOR”) or the Base Rate, as the term is defined in the Credit Agreement, plus an Applicable Margin, as defined in the Credit Agreement. The Company is subject to limitations on the number of LIBOR borrowings. The Company provides Capital One with monthly borrowing base certificates, and in certain circumstances, it is required to deliver monthly financial statements and certificates of compliance with various financial covenants. Should an event of default occur the interest rate would increase by two percent per annum during the period of default, in addition to other remedies provided to Capital One. At September 30, 2021, short-term or Revolver borrowing was $3,295,000, compared to $1,374,000, at December 31, 2020. Applicable Margin Rates at September 30, 2021, and December 31, 2020, for LIBOR and Base Rates were 1.50% and 0.50%, respectively. Additionally, at September 30, 2021, and December 31, 2020, there was approximately $12,700,000 and $11,971,000, respectively, available to the Company under its Revolver arrangement. The average balances of short-term borrowings from our Bank during the three and nine-month periods ended September 30, 2021, were $2,050,000, and $2,046,000, compared to $2,261,000, and $4,615,000, for the same periods in 2020. |
CARES Act
CARES Act | 9 Months Ended |
Sep. 30, 2021 | |
CARES Act | |
CARES Act | NOTE 9 – CARES Act On April 20, 2020, the Company received a PPP loan in the amount of $2,929,000, as provided pursuant to the CARES Act and administered by the United States Small Business Administration (“SBA”). The PPP loan, which was unsecured and guaranteed by the SBA, was designed to create economic stimulus by providing additional operating capital to small businesses in the U.S., such as P&F. To facilitate the PPP loan, the Company entered into a Promissory Note dated April 17, 2020, with BNB Bank as the lender (the “Lender”) (the “PPP Promissory Note”). Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”), the Company was eligible to apply for and receive forgiveness for all or a portion of the PPP loan. Such forgiveness was determined, subject to limitations, based on the use of the loan proceeds for certain permissible purposes as set forth in the PPP loan, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”) incurred during the 24 weeks subsequent to funding, and on the maintenance of employee compensation levels, as defined, following the funding of the PPP loan. In February 2021, in accordance with the Flexibility Act, the Company filed an application for forgiveness with the Lender, who approved this submission and subsequently submitted the Company’s application to the SBA. On June 9, 2021, the Company was advised that the SBA had approved the Company’s PPP loan forgiveness application and as such, the PPP loan and interest were forgiven in their entirety and recorded as other income during the second quarter of 2021. At December 31, 2020, the current portion of the PPP loan debt was $1,983,000, with $946,000 accounted for as long-term debt. |
DIVIDEND PAYMENTS
DIVIDEND PAYMENTS | 9 Months Ended |
Sep. 30, 2021 | |
DIVIDENDS. | |
DIVIDENDS | NOTE 10 – DIVIDEND PAYMENTS The Company’s Board of Directors has not declared dividends in 2021. On February 11, 2020, the Company’s Board of Directors, in accordance with its dividend policy, declared a quarterly cash dividend of $0.05 per common share, which was paid on February 28, 2020, to shareholders of record at the close of business on February 24, 2020. The total amount of this dividend payment was approximately $157,000. |
BUSINESS AND SUMMARY OF ACCOU_2
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The unaudited consolidated financial statements contained herein include the accounts of P&F Industries, Inc., and its subsidiaries (“P&F” or the “Company”). All significant intercompany balances and transactions have been eliminated. |
The Company | The Company P&F, a Delaware corporation incorporated in 1963, conducts its business through a wholly-owned subsidiary, Continental Tool Group, Inc. (“Continental”), which in turn operates through its wholly-owned subsidiaries, Florida Pneumatic Manufacturing Corporation (“Florida Pneumatic”) and Hy-Tech Machine, Inc. (“Hy-Tech”). Florida Pneumatic Florida Pneumatic directly, and through its wholly-owned subsidiaries Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”), and Jiffy Air Tool, Inc. (“Jiffy”) imports, manufactures, and markets pneumatic hand tools of its own design, primarily to the retail, industrial, automotive and aerospace markets. Its products include sanders, grinders, drills, saws, and impact wrenches. These tools are similar in appearance and function to electric hand tools, but are powered by compressed air, rather than by electricity or a battery. Air tools, as they are more commonly referred to, generally offer better performance, and weigh less than their electrical counterparts. Florida Pneumatic imports and/or manufactures approximately 75 types of pneumatic hand tools, most of which are sold at prices ranging from $50 to $1,000, under the names “Florida Pneumatic,” “Universal Tool”, “Jiffy Air Tool”, AIRCAT, NITROCAT, as well as under the trade names or trademarks of several private label customers. These products are sold to retailers, distributors, manufacturers and private label customers through in-house sales personnel and manufacturers’ representatives. The AIRCAT and NITROCAT brands of pneumatic tools are sold primarily to the automotive service and repair market (“automotive market”). Users of Florida Pneumatic’s hand tools include industrial maintenance and production staffs, do-it-yourself mechanics, professional automobile mechanics and auto body personnel. Jiffy manufactures and distributes pneumatic tools and components primarily to aerospace manufacturers. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) The Company - Continued Hy-Tech Hy-Tech designs, manufactures, and markets industrial tools, systems, gearing, accessories, and a wide variety of replacement parts under various brands including ATP, NUMATX, and Thaxton. Hy-Tech produces and sells heavy-duty pneumatic impact tools, grinders, air motors, hydro-pneumatic riveters, hydrostatic test plugs, impact sockets and custom gears, with prices ranging from $300 to $42,000. Hy-Tech’s “Engineered Solutions” products are sold directly to Original Equipment Manufacturers (“OEM’s”), and industrial branded products are sold through a broad network of specialized industrial distributors serving the power generation, petrochemical, aerospace, construction, railroad, mining, ship building and fabricated metals industries. Hy-Tech works directly with its industrial customers, designing and manufacturing products from finished components to complete turnkey systems to be sold under their own brand names. Hy-Tech’s Power Transmission Group, or PTG, is a custom gear, gearbox and power transmission system manufacturer. In addition to manufacturing a broad range of standard and custom gears for manufacturers in a wide variety of industries, PTG reverse engineers existing gears as well as designs new gears, utilizing state-of-the-art technologies, including 3D imaging and Gleason Gear modeling software. COVID-19 On March 11, 2020, the World Health Organization designated the novel coronavirus (“COVID-19”) as a global pandemic. The Company continues to actively monitor COVID-19 and its continued impact on its operations and financial results. Further, the negative impact of the world-wide supply-chain crisis due primarily to the global pandemic has adversely affected many of the Company’s product lines, particularly its retail and automotive lines. However, the Company continues to incur delays in container shipments from Asia as well as significant increases in inbound ocean freight costs, which the Company believes is due primarily to the global pandemic. We expect this to continue for the foreseeable future. The Company’s corporate office and business units are continuing to work alongside their external business partners and customers to minimize the continued business constraints caused by COVID-19 on its business. Due in large part to shelter-in-place restrictions that were implemented in late first quarter of 2020, which for many has been lifted during the latter portion of 2020 and early 2021, as well as significant decreases in travel and customer consumption behavior, the Company experienced a reduction in its revenue and earnings per share during 2020 and has continued to a lesser degree during the first nine months of 2021. It is unclear what the financial impacts from COVID-19 will be on the Company’s businesses in the future. |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all normal, recurring adjustments necessary to present fairly the information set forth therein. Results for interim periods are not necessarily indicative of results to be expected for a full year. The consolidated balance sheet information as of December 31, 2020, was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”). The interim consolidated financial statements contained herein should be read in conjunction with the 2020 Form 10-K. The consolidated financial statements have been reported in U.S. dollars by translating asset and liability amounts of a foreign wholly-owned subsidiary at the closing exchange rate, equity amounts at historical rates and the results of operations and cash flow at the average of the prevailing exchange rates during the periods reported. As a result, the Company is exposed to foreign currency translation gains or losses. These gains or losses are presented in the Company’s consolidated financial statements as “Other comprehensive income (loss) - foreign currency translation adjustment.” |
Going Concern Assessment | Going Concern Assessment Management assesses going concern uncertainty to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period,” as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, it considers various scenarios, forecasts, projections, estimates and makes certain key assumptions, including the timing and nature of projected cash expenditures, its ability to reduce, delay or curtail cash outflows and its ability to raise additional capital, if necessary, among other factors. Management has prepared estimates of operations covering the look-forward period and believes that sufficient funds will be generated from operations, working capital, and its existing credit facility to fund its operations. The Company has contingency plans in which it would further reduce or defer additional expenses and cash outlays, should operations weaken beyond current forecasts. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Going Concern Assessment - Continued The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is unclear what the full impact of COVID-19 will be or when the Company believes a return to more normal operations may occur. Further, as part of the business incentives offered in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Company, on April 20, 2020, received a $2.9 million Paycheck Protection Program (“PPP”) loan. See Note 9 - CARES Act to the Company’s consolidated financial statements for further discussion. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. |
Revenue recognition | Revenue Recognition The Company’s revenue recognition policies are detailed in its 2020 Form 10-K. The following tables present the Company’s revenues recognized under ASC Topic 606, “ Revenue from Contracts with Customers”, NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Florida Pneumatic Florida Pneumatic markets its air tool products to four primary sectors within the pneumatic tool market; Retail, Automotive, Industrial and Aerospace. It also generates revenue from its Berkley products line, as well as a line of air filters and other OEM parts are reported as Other. Three months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,168,000 33.0 % $ 3,530,000 36.5 % $ (362,000) (10.3) % Retail 3,222,000 33.5 3,718,000 38.4 (496,000) (13.3) Industrial 1,257,000 13.1 1,044,000 10.8 213,000 20.4 Aerospace 1,832,000 19.1 1,268,000 13.1 564,000 44.5 Other 128,000 1.3 121,000 1.2 7,000 5.8 Total $ 9,607,000 100.0 % $ 9,681,000 100.0 % $ (74,000) (0.8) % Nine months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 11,053,000 35.4 % $ 9,690,000 34.2 % $ 1,363,000 14.1 % Retail 10,775,000 34.5 9,569,000 33.8 1,206,000 12.6 Industrial 3,919,000 12.6 2,383,000 8.4 1,536,000 64.5 Aerospace 5,094,000 16.3 6,341,000 22.4 (1,247,000) (19.7) Other 380,000 1.2 368,000 1.2 12,000 3.3 Total $ 31,221,000 100.0 % $ 28,351,000 100.0 % $ 2,870,000 10.1 % NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Hy-Tech Hy-Tech designs, manufactures, and sells a wide range of industrial products which are categorized as ATP for reporting purposes. In addition to Engineered Solutions, products and components manufactured for other companies under their brands are included in the OEM category in the table below. PTG revenue is comprised of products manufactured and sold by Hy-Tech’s gear business. NUMATX, Thaxton and other peripheral product lines, such as general machining, are reported as Other. Three months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 1,668,000 49.4 % $ 872,000 32.0 % $ 796,000 91.3 % ATP 751,000 22.2 624,000 22.9 127,000 20.4 PTG 882,000 26.1 1,027,000 37.7 (145,000) (14.1) Other 77,000 2.3 202,000 7.4 (125,000) (61.9) Total $ 3,378,000 100.0 % $ 2,725,000 100.0 % $ 653,000 24.0 % Nine months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 4,688,000 50.4 % $ 3,513,000 39.4 % 1,175,000 33.4 % ATP 2,242,000 24.1 2,254,000 25.2 (12,000) (0.5) PTG 2,132,000 22.9 2,783,000 31.2 (651,000) (23.4) Other 237,000 2.6 375,000 4.2 (138,000) (36.8) Total $ 9,299,000 100.0 % $ 8,925,000 100.0 % 374,000 4.2 % |
Customer Concentration | Customer Concentration At September 30, 2021, and December 31, 2020, accounts receivable from The Home Depot (“THD”) was 33.8% and 38.0%, respectively, of total accounts receivable. Accounts receivable attributable to Amazon.Com, Inc., (“Amazon”) at September 30, 2021, and December 31, 2020, was 0.1% and 15.8%, respectively, of total net accounts receivable. Revenue from THD, stated as a percentage of the Company’s total revenue during the three and nine-month periods ended September 30, 2021, was 24.8% and 26.6%, respectively, and 30.0% and 25.7%, respectively, for the same periods in 2020. There were no other customers that accounted for more than 10% of consolidated revenue or accounts receivable during the three and nine-month periods ended September 30, 2021, or 2020. |
Lease Accounting | Lease Accounting The Company adheres to the standards set forth in Accounting Standards Codification (“ASC”) 842, “Leases NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Lease Accounting - Continued If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The Company’s operating leases include vehicles, office space and the use of real property. The Company has not identified any new material finance leases for the three months ended September 30, 2021. The Company considers any options to extend the term of a lease when measuring the Right-of-Use lease asset. For the three and nine-month periods ended September 30, 2021, and 2020, the Company had $222,000 and $670,000, and $223,000 and $675,000, respectively, in operating lease expense. The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of September 30, 2021: As of September 30, 2021 2021 (excluding the nine months ended September 30, 2021) $ 217,000 2022 843,000 2023 841,000 2024 566,000 2025 296,000 Thereafter 867,000 Total operating lease payments 3,630,000 Less imputed interest (553,000) Total operating lease liabilities $ 3,077,000 Weighted average remaining lease term 5.7 years Weighted average discount rate 6.87 % |
Management Estimates | Management Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, goodwill, intangible assets and other long-lived assets, contingent consideration, income taxes and deferred taxes. Descriptions of these policies are discussed in the Company’s 2020 Form 10-K. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements During the nine-month period ended September 30, 2021, there were no accounting pronouncements or other authoritative guidance issued that the Company adopted. No other new accounting pronouncement issued or effective during the three and nine-month period ended September 30, 2021, has or is expected to have a material impact on our consolidated financial statements or disclosures. |
BUSINESS AND SUMMARY OF ACCOU_3
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | |
Schedule of operating lease liabilities | The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of September 30, 2021: As of September 30, 2021 2021 (excluding the nine months ended September 30, 2021) $ 217,000 2022 843,000 2023 841,000 2024 566,000 2025 296,000 Thereafter 867,000 Total operating lease payments 3,630,000 Less imputed interest (553,000) Total operating lease liabilities $ 3,077,000 Weighted average remaining lease term 5.7 years Weighted average discount rate 6.87 % |
Schedule of Revenue | NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Florida Pneumatic Nine months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 11,053,000 35.4 % $ 9,690,000 34.2 % $ 1,363,000 14.1 % Retail 10,775,000 34.5 9,569,000 33.8 1,206,000 12.6 Industrial 3,919,000 12.6 2,383,000 8.4 1,536,000 64.5 Aerospace 5,094,000 16.3 6,341,000 22.4 (1,247,000) (19.7) Other 380,000 1.2 368,000 1.2 12,000 3.3 Total $ 31,221,000 100.0 % $ 28,351,000 100.0 % $ 2,870,000 10.1 % NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Hy-Tech Three months ended September 30, 2021 2020 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 1,668,000 49.4 % $ 872,000 32.0 % $ 796,000 91.3 % ATP 751,000 22.2 624,000 22.9 127,000 20.4 PTG 882,000 26.1 1,027,000 37.7 (145,000) (14.1) Other 77,000 2.3 202,000 7.4 (125,000) (61.9) Total $ 3,378,000 100.0 % $ 2,725,000 100.0 % $ 653,000 24.0 % |
(LOSS) INCOME PER SHARE (Tables
(LOSS) INCOME PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
(LOSS) INCOME PER SHARE | |
Schedule of computation of basic and diluted (loss) per common share | NOTE 2 – (LOSS) INCOME PER SHARE – (Continued) The following table sets forth the elements of basic and diluted (loss) income per common share: Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Numerator for basic and diluted (loss) income per common share: Net (loss) income $ (733,000) $ (857,000) $ 1,383,000 $ (3,996,000) Denominator: Denominator for basic (loss) earnings per share - weighted average common shares outstanding 3,181,000 3,151,000 3,177,000 3,148,000 Dilutive securities (1) — — 14,000 — Denominator for diluted (loss) income per share - weighted average common shares outstanding 3,181,000 3,151,000 3,191,000 3,148,000 |
Schedule of weighted average of anti-dilutive stock options | At September 30, 2021, and 2020, there were outstanding stock options whose exercise prices were higher than the average market values of the underlying Common Stock for the period. The weighted average of anti-dilutive stock options outstanding was as follows: Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Weighted average anti-dilutive stock options outstanding 135,000 183,000 138,000 172,000 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
STOCK-BASED COMPENSATION | |
Schedule of share-based compensation stock options | The following is a summary of the changes in outstanding options during the nine-month period ended September 30, 2021: Weighted Weighted average average remaining Aggregate exercise contractual life Intrinsic Option shares price (years) Value Outstanding, January 1, 2021 200,878 $ 6.59 4.1 $ 85,663 Granted — — — — Exercised — — — — Forfeited 6,180 7.61 — — Expired 16,199 4.37 — — Outstanding, September 30, 2021 178,499 $ 6.76 3.7 $ 83,910 Vested, September 30, 2021 175,831 $ 6.73 3.6 $ 83,910 |
Schedule of share-based compensation arrangement by share-based payment award and options vested and expected to vest | Weighted average grant- Option shares date fair value Non-vested options, January 1, 2021 5,334 $ 4.60 Granted — — Vested (2,666) 4.60 Forfeited — — Non-vested options, September 30, 2021 2,668 $ 4.60 |
ACCOUNTS RECEIVABLE AND ALLOW_2
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
Schedule of accounts receivable - net | Accounts receivable - net consists of: September 30, 2021 December 31, 2020 Accounts receivable $ 8,724,000 $ 7,726,000 Allowance for doubtful accounts, sales discounts and chargebacks (276,000) (258,000) $ 8,448,000 $ 7,468,000 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
INVENTORIES | |
Schedule of inventories | Inventories consist of: September 30, 2021 December 31, 2020 Raw material $ 1,979,000 $ 2,077,000 Work in process 1,489,000 1,127,000 Finished goods 18,155,000 15,158,000 $ 21,623,000 $ 18,362,000 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | Changes in the carrying amount of goodwill are as follows: Balance, January 1, 2021 $ 4,449,000 Currency translation adjustment (3,000) Balance, September 30, 2021 $ 4,446,000 |
Schedule of other intangible assets | September 30, 2021 December 31, 2020 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,498,000 $ 3,416,000 $ 3,082,000 $ 6,502,000 $ 3,034,000 $ 3,468,000 Trademarks and trade names (1) 2,184,000 — 2,184,000 2,187,000 — 2,187,000 Trademarks and trade names 200,000 69,000 131,000 200,000 59,000 141,000 Engineering drawings 330,000 250,000 80,000 330,000 239,000 91,000 Non-compete agreements (1) 333,000 284,000 49,000 335,000 266,000 69,000 Patents 1,286,000 1,063,000 223,000 1,286,000 1,016,000 270,000 Totals $ 10,831,000 $ 5,082,000 $ 5,749,000 $ 10,840,000 $ 4,614,000 $ 6,226,000 (1) A portion of these intangibles are maintained in a foreign currency and are therefore subject to foreign exchange rate fluctuations. The weighted average amortization period for intangible assets was as follows: September 30, 2021 December 31, 2020 Customer relationships 6.9 7.6 Trademarks and trade names 9.8 10.5 Engineering drawings 5.4 6.1 Non-compete agreements 2.3 3.0 Patents 4.7 5.2 |
Schedule of amortization expense of intangible assets | Amortization expense of intangible assets subject to amortization was as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 $ 158,000 $ 158,000 $ 474,000 $ 544,000 Amortization expense for the balance of 2021, and for each of the next five years and thereafter is estimated to be as follows: October 1 through December 31, 2021 $ 157,000 2022 629,000 2023 625,000 2024 577,000 2025 548,000 Thereafter 1,029,000 $ 3,565,000 |
BUSINESS AND SUMMARY OF ACCOU_4
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Maturity analysis of the annual undiscounted cash flows (Details) | Sep. 30, 2021USD ($) |
Operating lease liabilities | |
2021 (excluding the nine months ended September 30, 2021) | $ 217,000 |
2022 | 843,000 |
2023 | 841,000 |
2024 | 566,000 |
2025 | 296,000 |
Thereafter | 867,000 |
Total operating lease payments | 3,630,000 |
Less imputed interest | (553,000) |
Total operating lease liabilities | $ 3,077,000 |
Weighted-average remaining lease term | 5 years 8 months 12 days |
Weighted-average discount rate | 6.87% |
BUSINESS AND SUMMARY OF ACCOU_5
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Retail automotive industrial and aerospace (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 12,985,000 | $ 12,406,000 | $ 40,520,000 | $ 37,276,000 |
Florida Pneumatic [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 9,607,000 | $ 9,681,000 | $ 31,221,000 | $ 28,351,000 |
Percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Increase (decrease) | $ (74,000) | $ 2,870,000 | ||
Percentage of Increase (decrease) | (0.80%) | 10.10% | ||
Florida Pneumatic [Member] | Automotive | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 3,168,000 | $ 3,530,000 | $ 11,053,000 | $ 9,690,000 |
Percentage of revenue | 33.00% | 36.50% | 35.40% | 34.20% |
Increase (decrease) | $ (362,000) | $ 1,363,000 | ||
Percentage of Increase (decrease) | (10.30%) | 14.10% | ||
Florida Pneumatic [Member] | Retail | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 3,222,000 | $ 3,718,000 | $ 10,775,000 | $ 9,569,000 |
Percentage of revenue | 33.50% | 38.40% | 34.50% | 33.80% |
Increase (decrease) | $ (496,000) | $ 1,206,000 | ||
Percentage of Increase (decrease) | (13.30%) | 12.60% | ||
Florida Pneumatic [Member] | Aerospace | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 1,832,000 | $ 1,268,000 | $ 5,094,000 | $ 6,341,000 |
Percentage of revenue | 19.10% | 13.10% | 16.30% | 22.40% |
Increase (decrease) | $ 564,000 | $ (1,247,000) | ||
Percentage of Increase (decrease) | 44.50% | (19.70%) | ||
Florida Pneumatic [Member] | Industrial | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 1,257,000 | $ 1,044,000 | $ 3,919,000 | $ 2,383,000 |
Percentage of revenue | 13.10% | 10.80% | 12.60% | 8.40% |
Increase (decrease) | $ 213,000 | $ 1,536,000 | ||
Percentage of Increase (decrease) | 20.40% | 64.50% | ||
Florida Pneumatic [Member] | Other | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 128,000 | $ 121,000 | $ 380,000 | $ 368,000 |
Percentage of revenue | 1.30% | 1.20% | 1.20% | 1.20% |
Increase (decrease) | $ 7,000 | $ 12,000 | ||
Percentage of Increase (decrease) | 5.80% | 3.30% | ||
Hy-Tech [Member] | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 3,378,000 | $ 2,725,000 | $ 9,299,000 | $ 8,925,000 |
Percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Increase (decrease) | $ 653,000 | $ 374,000 | ||
Percentage of Increase (decrease) | 24.00% | 4.20% | ||
Hy-Tech [Member] | OEM | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 1,668,000 | $ 872,000 | $ 4,688,000 | $ 3,513,000 |
Percentage of revenue | 49.40% | 32.00% | 50.40% | 39.40% |
Increase (decrease) | $ 796,000 | $ 1,175,000 | ||
Percentage of Increase (decrease) | 91.30% | 33.40% | ||
Hy-Tech [Member] | ATP | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 751,000 | $ 624,000 | $ 2,242,000 | $ 2,254,000 |
Percentage of revenue | 22.20% | 22.90% | 24.10% | 25.20% |
Increase (decrease) | $ 127,000 | $ (12,000) | ||
Percentage of Increase (decrease) | 20.40% | (0.50%) | ||
Hy-Tech [Member] | PTG | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 882,000 | $ 1,027,000 | $ 2,132,000 | $ 2,783,000 |
Percentage of revenue | 26.10% | 37.70% | 22.90% | 31.20% |
Increase (decrease) | $ (145,000) | $ (651,000) | ||
Percentage of Increase (decrease) | (14.10%) | (23.40%) | ||
Hy-Tech [Member] | Other | ||||
Schedule Of Summary Of Accounting Policies [Line Items] | ||||
Revenues | $ 77,000 | $ 202,000 | $ 237,000 | $ 375,000 |
Percentage of revenue | 2.30% | 7.40% | 2.60% | 4.20% |
Increase (decrease) | $ (125,000) | $ (138,000) | ||
Percentage of Increase (decrease) | (61.90%) | (36.80%) |
BUSINESS AND SUMMARY OF ACCOU_6
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Customer Concentration (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Accounts Receivable [Member] | Home depot | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 33.80% | 38.00% | |||
Accounts Receivable [Member] | Amazon.com | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 0.10% | 15.80% | |||
Sales Revenue, Segment [Member] | Home depot | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 24.80% | 30.00% | 26.60% | 25.70% |
BUSINESS AND SUMMARY OF ACCOU_7
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Additional information (Details) | Apr. 20, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)item$ / product | Sep. 30, 2020USD ($) |
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Operating Lease, Liability | $ | $ 3,077,000 | $ 3,077,000 | |||
Operating Lease, Expense | $ | $ 222,000 | $ 223,000 | $ 670,000 | $ 675,000 | |
Florida Pneumatic [Member] | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Number Of Types Of Pneumatic Hand Tools Imported Or Manufactured | item | 75 | ||||
Florida Pneumatic [Member] | Minimum [Member] | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Sale Price Per Product | 50 | ||||
Florida Pneumatic [Member] | Maximum [Member] | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Sale Price Per Product | 1,000 | ||||
Hy-Tech [Member] | Minimum [Member] | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Sale Price Per Product | 300 | ||||
Hy-Tech [Member] | Maximum [Member] | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Sale Price Per Product | 42,000 | ||||
Payroll Protection Program | |||||
Schedule Of Summary Of Accounting Policies [Line Items] | |||||
Loan received | $ | $ 2,900,000 |
(LOSS) INCOME PER SHARE - (Loss
(LOSS) INCOME PER SHARE - (Loss) income per share basic and diluted (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator for basic and diluted (loss) income per common share: | ||||
Net (loss) income | $ (733,000) | $ (857,000) | $ 1,383,000 | $ (3,996,000) |
Denominator: | ||||
Denominator for basic (loss) earnings per share - weighted average common shares outstanding | 3,181,000 | 3,151,000 | 3,177,000 | 3,148,000 |
Dilutive securities | 14,000 | |||
Denominator for diluted (loss) income per share - weighted average common shares outstanding | 3,181,000 | 3,151,000 | 3,191,000 | 3,148,000 |
(LOSS) INCOME PER SHARE - Weigh
(LOSS) INCOME PER SHARE - Weighted average anti-dilutive stock options (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average antidilutive stock options outstanding | 135,000 | 183,000 | 138,000 | 172,000 |
STOCK-BASED COMPENSATION - Outs
STOCK-BASED COMPENSATION - Outstanding options (Details) - Stock Option [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding | 200,878 | |
Number of Shares, Granted | 0 | |
Number of Shares, Exercised | 0 | |
Number of Shares, Forfeited | 6,180 | |
Number of Shares, Expired | 16,199 | |
Number of Shares, Outstanding | 178,499 | 200,878 |
Number of Shares, Vested | 175,831 | |
Weighted Average Exercise Price per share, Outstanding (in dollars per share) | $ 6.59 | |
Weighted Average Exercise Price per share, Forfeited (in dollars per share) | 7.61 | |
Weighted Average Exercise Price per share, Expired (in dollars per share) | 4.37 | |
Weighted Average Exercise Price per share, Outstanding (in dollars per share) | 6.76 | $ 6.59 |
Weighted Average Exercise Price per share, Vested (in dollars per share) | $ 6.73 | |
Weighted Average Remaining Contractual Life, Outstanding (Years) | 3 years 8 months 12 days | 4 years 1 month 6 days |
Weighted Average Remaining Contractual Life, Vested (Years) | 3 years 7 months 6 days | |
Aggregate Intrinsic Value, Outstanding (in dollars) | $ 83,910 | $ 85,663 |
Aggregate Intrinsic Value, Vested (in dollars) | $ 83,910 |
STOCK-BASED COMPENSATION - Empl
STOCK-BASED COMPENSATION - Employee Stock Option (Details) - Stock Option [Member] | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option Shares, Non-vested shares, beginning of year | 5,334 |
Option Shares, Granted | 0 |
Option Shares, Vested | (2,666) |
Option Shares, Forfeited | 0 |
Option Shares, Non-vested shares, end of year | 2,668 |
Weighted Average Grant-Date Fair Value, Non-vested shares, beginning of year (in dollars per share) | $ / shares | $ 4.60 |
Weighted Average Grant-Date Fair Value, Vested (in dollars per share) | $ / shares | 4.60 |
Weighted Average Grant-Date Fair Value, Forfeited (in dollars per share) | $ / shares | 0 |
Weighted Average Grant-Date Fair Value, Non-vested shares, end of year (in dollars per share) | $ / shares | $ 4.60 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional information (Details) - USD ($) | Feb. 16, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Apr. 22, 2021 |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Restricted stock-based compensation | $ 159,000 | |||
Restricted stock-based compensation per annual | $ 32,000 | |||
Incentive Stock Option Plan 2002 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 450,000 | |||
Incentive Stock Option Plan 2021 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Available for Grant | 175,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 500,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 300,000 | |||
Common Stock, Capital Shares Reserved for Future Issuance | 203,037 | 203,037 | ||
Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |||
Number of options issued | 0 | |||
Chief Financial Officer [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 25,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 6.36 |
ACCOUNTS RECEIVABLE AND ALLOW_3
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ||
Accounts receivable | $ 8,724,000 | $ 7,726,000 |
Allowance for doubtful accounts, sales discounts and chargebacks | (276,000) | (258,000) |
Accounts receivable - net | $ 8,448,000 | $ 7,468,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
INVENTORIES | ||
Raw material | $ 1,979,000 | $ 2,077,000 |
Work in process | 1,489,000 | 1,127,000 |
Finished goods | 18,155,000 | 15,158,000 |
Inventories | $ 21,623,000 | $ 18,362,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying amount of goodwill (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Balance, beginning | $ 4,449,000 |
Currency translation adjustment | (3,000) |
Balance, ending | $ 4,446,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other intangible assets - (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Other intangible assets: | ||
Cost | $ 10,831,000 | $ 10,840,000 |
Accumulated amortization | 5,082,000 | 4,614,000 |
Net book value | 5,749,000 | 6,226,000 |
Customer relationships [Member] | ||
Other intangible assets: | ||
Cost | 6,498,000 | 6,502,000 |
Accumulated amortization | 3,416,000 | 3,034,000 |
Net book value | $ 3,082,000 | $ 3,468,000 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years 10 months 24 days | 7 years 7 months 6 days |
Trademarks and trade names one [Member] | ||
Other intangible assets: | ||
Cost | $ 2,184,000 | $ 2,187,000 |
Accumulated amortization | 0 | 0 |
Net book value | $ 2,184,000 | $ 2,187,000 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years 9 months 18 days | 10 years 6 months |
Trademarks and Trade Names Two [Member] | ||
Other intangible assets: | ||
Cost | $ 200,000 | $ 200,000 |
Accumulated amortization | 69,000 | 59,000 |
Net book value | 131,000 | 141,000 |
Engineering drawings [Member] | ||
Other intangible assets: | ||
Cost | 330,000 | 330,000 |
Accumulated amortization | 250,000 | 239,000 |
Net book value | $ 80,000 | $ 91,000 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years 4 months 24 days | 6 years 1 month 6 days |
Non-compete agreements [Member] | ||
Other intangible assets: | ||
Cost | $ 333,000 | $ 335,000 |
Accumulated amortization | 284,000 | 266,000 |
Net book value | $ 49,000 | $ 69,000 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 3 months 18 days | 3 years |
Patents [Member] | ||
Other intangible assets: | ||
Cost | $ 1,286,000 | $ 1,286,000 |
Accumulated amortization | 1,063,000 | 1,016,000 |
Net book value | $ 223,000 | $ 270,000 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years 8 months 12 days | 5 years 2 months 12 days |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense of intangible assets - (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||||
Amortization of Intangible Assets | $ 158,000 | $ 158,000 | $ 474,000 | $ 544,000 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated amortization expense (Details) | Sep. 30, 2021USD ($) |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
October 1 through December 31, 2021 | $ 157,000 |
2022 | 629,000 |
2023 | 625,000 |
2024 | 577,000 |
2025 | 548,000 |
Thereafter | 1,029,000 |
Total | $ 3,565,000 |
DEBT (Details)
DEBT (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Apr. 30, 2017 | |
Debt Instrument [Line Items] | ||||||
Short-term Debt | $ 3,295,000 | $ 3,295,000 | $ 1,374,000 | |||
Increase in interest rate | 2.00% | |||||
Line of Credit Facility, Average Outstanding Amount | 2,050,000 | $ 2,261,000 | $ 2,046,000 | $ 4,615,000 | ||
Short-term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 12,700,000 | $ 12,700,000 | $ 11,971,000 | |||
Short-term Debt [Member] | Base Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | 0.50% | ||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 16,000,000 | |||||
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases | 2,000,000 | |||||
Capex Borrowing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,600,000 |
CARES Act (Details)
CARES Act (Details) - USD ($) | Apr. 20, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
CARES Act | ||||
Proceeds from Issuance of Other Long-term Debt | $ 2,929,000 | $ 0 | $ 2,929,000 | |
Long-term Debt, Current Maturities | $ 1,983,000 | |||
Long-term Debt, Excluding Current Maturities | $ 946,000 |
DIVIDEND PAYMENTS (Details)
DIVIDEND PAYMENTS (Details) | Feb. 11, 2020USD ($)$ / shares |
DIVIDENDS. | |
Dividends Payable, Amount Per Share | $ / shares | $ 0.05 |
Dividends Payable, Current | $ | $ 157,000 |