P&F Industries (PFIN) 10-Q14 Nov 222022 Q3 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Nov. 07, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
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
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 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		3,194,699
Entity Central Index Key	0000075340
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2022	Dec. 31, 2021
CURRENT ASSETS
Cash	$ 410,000	$ 539,000
Accounts receivable - net	9,458,000	7,550,000
Inventories	24,731,000	24,021,000
Prepaid expenses and other current assets	2,600,000	4,566,000
TOTAL CURRENT ASSETS	37,199,000	36,676,000
PROPERTY AND EQUIPMENT
Land	507,000	507,000
Buildings and improvements	4,087,000	3,605,000
Machinery and equipment	27,224,000	25,675,000
Property, Plant and Equipment, Gross	31,818,000	29,787,000
Less accumulated depreciation and amortization	22,972,000	21,707,000
NET PROPERTY AND EQUIPMENT	8,846,000	8,080,000
GOODWILL	4,808,000	4,447,000
OTHER INTANGIBLE ASSETS - net	5,480,000	5,592,000
DEFERRED INCOME TAXES - net	487,000	349,000
RIGHT-OF-USE ASSETS - OPERATING LEASES	3,189,000	2,969,000
OTHER ASSETS - net	65,000	77,000
TOTAL ASSETS	60,074,000	58,190,000
CURRENT LIABILITIES
Short-term borrowings	8,087,000	5,765,000
Accounts payable	3,056,000	2,920,000
Accrued compensation and benefits	1,475,000	1,475,000
Accrued other liabilities	1,630,000	1,078,000
Current lease liabilities - operating leases	826,000	840,000
TOTAL CURRENT LIABILITIES	15,074,000	12,078,000
Noncurrent lease liabilities - operating leases	2,399,000	2,176,000
Other liabilities	76,000	96,000
TOTAL LIABILITIES	17,549,000	14,350,000
SHAREHOLDERS' EQUITY
Preferred stock - $10 par; authorized - 2,000,000 shares; no shares issued
Additional paid-in capital	14,230,000	14,167,000
Retained earnings	35,010,000	36,046,000
Treasury stock, at cost - 1,273,000 shares at September 30, 2022 and December 31, 2021	(10,213,000)	(10,213,000)
Accumulated other comprehensive loss	(969,000)	(613,000)
TOTAL SHAREHOLDERS' EQUITY	42,525,000	43,840,000
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	60,074,000	58,190,000
Class A Common Stock
SHAREHOLDERS' EQUITY
Common stock	4,467,000	4,453,000
Class B Common Stock
SHAREHOLDERS' EQUITY
Common stock	$ 0	$ 0

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
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
Class A Common Stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized	7,000,000	7,000,000
Common stock, shares issued	4,467,000	4,453,000
Class B Common Stock
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, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Net revenue	$ 14,516,000	$ 12,985,000	$ 46,347,000	$ 40,520,000
Cost of sales	9,669,000	9,011,000	31,353,000	27,062,000
Gross profit	4,847,000	3,974,000	14,994,000	13,458,000
Selling, general and administrative expenses	5,084,000	4,734,000	15,736,000	15,183,000
Operating loss	(237,000)	(760,000)	(742,000)	(1,725,000)
Other (expense) income	(3,000)	0	(24,000)	2,929,000
(Loss) gain on sale of property and equipment	0	(67,000)	5,000	(67,000)
Interest expense	(106,000)	(14,000)	(244,000)	(21,000)
(Loss) Income before income taxes	(346,000)	(841,000)	(1,005,000)	1,116,000
Income tax benefit	109,000	108,000	129,000	267,000
Net (loss) income	$ (237,000)	$ (733,000)	$ (876,000)	$ 1,383,000
Basic (loss) earnings per share	$ (0.08)	$ (0.23)	$ (0.28)	$ 0.44
Diluted (loss) earnings per share	$ (0.08)	$ (0.23)	$ (0.28)	$ 0.43
Weighted average common shares outstanding:
Basic	3,195,000	3,181,000	3,183,000	3,177,000
Diluted	3,195,000	3,181,000	3,183,000	3,191,000
Net (loss) income	$ (237,000)	$ (733,000)	$ (876,000)	$ 1,383,000
Other comprehensive loss - foreign currency translation adjustment	(160,000)	(61,000)	(356,000)	(42,000)
Total comprehensive (loss) income	$ (397,000)	$ (794,000)	$ (1,232,000)	$ 1,341,000

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Class A Common Stock Common Stock	Additional paid-in capital	Retained earnings	Treasury stock	Accumulated other comprehensive loss	Total
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
Treasury stock (in shares) at Dec. 31, 2020				(1,273,000)
Increase (Decrease) in Stockholders' Equity
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
Stock-based compensation	$ 0	4,000	0	0	0	4,000
Foreign currency translation adjustment	0	0	0	$ 0	(42,000)	(42,000)
Treasury stock (in shares) at Sep. 30, 2021				(1,273,000)
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
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
Treasury stock (in shares) at Jun. 30, 2021				(1,273,000)
Increase (Decrease) in Stockholders' Equity
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)
Treasury stock (in shares) at Sep. 30, 2021				(1,273,000)
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
Balance at Dec. 31, 2021	$ 4,453,000	14,167,000	36,046,000	$ (10,213,000)	(613,000)	43,840,000
Balance (in shares) at Dec. 31, 2021	4,453,000
Treasury stock (in shares) at Dec. 31, 2021				(1,273,000)
Increase (Decrease) in Stockholders' Equity
Net (loss) income	$ 0	0	(876,000)	$ 0	0	(876,000)
Exercise of stock options	$ 7,000	33,000	0	0	0	$ 40,000
Exercise of stock options (in shares)	7,000					41,809
Restricted common stock compensation	$ 7,000	29,000	0	0	0	$ 36,000
Restricted common stock compensation (in shares)	7,000
Stock-based compensation	$ 0	1,000	0	0	0	1,000
Dividends	0	0	(160,000)	0	0	(160,000)
Foreign currency translation adjustment	0	0	0	$ 0	(356,000)	(356,000)
Treasury stock (in shares) at Sep. 30, 2022				(1,273,000)
Balance at Sep. 30, 2022	$ 4,467,000	14,230,000	35,010,000	$ (10,213,000)	(969,000)	42,525,000
Balance (in shares) at Sep. 30, 2022	4,467,000
Balance at Jun. 30, 2022	$ 4,467,000	14,214,000	35,407,000	$ (10,213,000)	(809,000)	43,066,000
Balance (in shares) at Jun. 30, 2022	4,467,000
Treasury stock (in shares) at Jun. 30, 2022				(1,273,000)
Increase (Decrease) in Stockholders' Equity
Net (loss) income	$ 0	0	(237,000)	$ 0	0	(237,000)
Restricted common stock compensation	$ 0	16,000	0	0	0	16,000
Restricted common stock compensation (in shares)	0
Stock-based compensation	$ 0	0	0	0	0
Dividends	0	0	(160,000)	0	0	(160,000)
Foreign currency translation adjustment	0	0	0	$ 0	(160,000)	(160,000)
Treasury stock (in shares) at Sep. 30, 2022				(1,273,000)
Balance at Sep. 30, 2022	$ 4,467,000	$ 14,230,000	$ 35,010,000	$ (10,213,000)	$ (969,000)	$ 42,525,000
Balance (in shares) at Sep. 30, 2022	4,467,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Sep. 30, 2022	Sep. 30, 2021
Cash Flows from Operating Activities:
Net (loss) income	$ (876,000)	$ 1,383,000
Non-cash and other charges:
Depreciation	1,271,000	1,345,000
Amortization of other intangible assets		474,000
Amortization of operating lease assets	710,000	670,000
Amortization of debt issue costs	12,000	12,000
Amortization of consideration payable to a customer	157,000	202,000
Recovery of provision for losses on accounts receivable	(33,000)	19,000
Stock-based compensation	1,000	4,000
Stock-based compensation-options exercise	38,000	0
Restricted stock-based compensation	35,000	35,000
Deferred income taxes	(129,000)	(267,000)
(Gain) loss on disposal of fixed assets	(5,000)	33,000
Gain on early termination of lease	(19,000)	0
Forgiveness of Paycheck Protection Program loan	0	(2,929,000)
Fair value adjustment of assets held for sale	0	40,000
Changes in operating assets and liabilities, net of effects of acquisition
Accounts receivable	(1,262,000)	(1,007,000)
Inventories	(554,000)	(3,274,000)
Prepaid expenses and other current assets	1,608,000	248,000
Accounts payable	(45,000)	1,406,000
Accrued compensation and benefits	28,000	711,000
Accrued other liabilities and other current liabilities	582,000	(14,000)
Operating lease liabilities	(703,000)	(665,000)
Other liabilities	(25,000)	(36,000)
Total adjustments	2,181,000	(2,993,000)
Net cash provided by (used in) operating activities	1,305,000	(1,610,000)
Cash Flows from Investing Activities:
Capital expenditures	(1,222,000)	(428,000)
Proceeds from sale of fixed asset	0	28,000
Purchase of net assets of the Jackson Gear Company business	(2,300,000)	0
Net cash used in investing activities	(3,522,000)	(400,000)
Cash Flows from Financing Activities:
Dividend Payments	(160,000)	0
Net proceeds from short-term borrowings	2,323,000	1,921,000
Proceeds from exercise of stock options	2,000	0
Net cash provided by financing activities	2,165,000	1,921,000
Effect of exchange rate changes on cash	(77,000)	(26,000)
Net decrease in cash	(129,000)	(115,000)
Cash at beginning of period	539,000	904,000
Cash at end of period	410,000	789,000
Cash paid for:
Interest	213,000	25,000
Taxes	126,000	12,000
Cash paid for amounts included in the measurement of operating lease liabilities	0	6,000
Non-cash information:
Right of Use ("ROU") assets recognized for new operating lease liabilities	987,000	320,000
ROU adjustment due to early termination	$ 359,000	$ 0

BUSINESS AND SUMMARY OF ACCOUNT

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES	9 Months Ended
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES	Sep. 30, 2022
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 (“US 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 US 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, 2021, 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, 2021 (“2021 Form 10-K”). The unaudited consolidated financial statements contained herein should be read in conjunction with the 2021 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, among others. 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”, commonly referred to as “PTG”, produces spiral bevel and straight bevel gears along with a wide variety of other gearing. These products are sold direct to OEMs, end-users and gearbox repair companies. PTG works directly with its customer’s engineering departments to design or redesign gears or gearboxes to optimize a solution for functionality and manufacturability. Nearly all of Hy-Tech brands are manufactured in the United States of America. Hy-Tech markets ATP branded impact sockets, striking wrenches and accessories that are imported from Asia. Please refer to Note 2 for discussion related to the Company’s acquisition of the Jackson Gear Company business (“JGC”). COVID-19 On March 11, 2020, the World Health Organization designated the recent novel coronavirus, or COVID-19, as a global pandemic. COVID-19 was first detected in Wuhan City, Hubei Province, China and continued to spread, significantly impacting various markets around the world, including the United States. Various policies and initiatives have been implemented to reduce the global transmission of COVID-19. The COVID-19 virus and the resultant global economic down-turn had a negative impact on our fiscal 2021 results. The Company believes its year-to-date results during the first half of 2022 were still being negatively impacted by the COVID-19 global pandemic. The economic slow-down and constraints caused by the pandemic began to ease somewhat mid-year. However, the Company further believes that the on-going supply-chain crisis is related to the pandemic. Commencing in mid-2021, although easing somewhat beginning mid-2022, we encountered severe shipping / receiving delays of inventory from our Asian suppliers, which has caused intermittent shortages of product. Further, the Company believes the COVID-19 global pandemic has been and continues to be the primary factor in the significant increases in the cost of international ocean freight, although ocean freight costs have begun to lessen during the third quarter of 2022. The Company believes that until the above issues subside, its business will likely continue to be adversely affected by difficulties caused by the global pandemic. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) 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 US 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 or generate cash from the sale of certain assets, should operations weaken beyond current forecasts. 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 The Company had one customer that accounted for 25.9% and 35.9% of its consolidated accounts receivable at September 30, 2022, and December 31, 2021, respectively. Further, this customer accounted for 19.1% and 22.9%, respectively, of the Company’s consolidated revenue during the three and nine-month periods ended September 30, 2022, and 24.8% and 26.6%, respectively, for the same periods in 2021. There was no other customer that accounted for more than 10% of our consolidated revenue or accounts receivable for all periods presented. Management Estimates The preparation of financial statements and related disclosures in conformity with US 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, accounts receivable reserve, inventory, goodwill, intangible assets and other long-lived assets, contingent consideration, income taxes, deferred taxes, and lease liabilities. Descriptions of these policies are discussed in the Company’s 2021 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 There were no changes to the Company's significant accounting policies during the three and nine-month periods ended September 30, 2022. The Company’s significant accounting policies are described in “Note 1: Summary of Significant Accounting Policies” of our 2021 Form 10-K. NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Lease Accounting The Company adheres to the standards set forth in Accounting Standards Codification (“ASC”) 842, “Leases 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 during the three -month period ended September 30, 2022. 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, 2022, the Company had $239,000 and $710,000, respectively, in operating lease expense, and $222,000 and $670,000, respectively, for the same three and nine-month periods in 2021. Effective March 1, 2022, the Company and the landlord of the facility located in Punxsutawney, PA agreed to modify the lease related to the approximate 42,000 square foot premises that was leased by Hy-Tech. This lease modification among other things, increased the rented space to approximately 62,000 square feet, extended the lease termination date to February 2027, and provided two three During the third quarter 2022, the Company was advised by the landlord of the property it leases in Jupiter, Florida that it was exercising its right to terminate the lease effective July 1, 2023. This lease, which was entered into in June 2019, had an original expiration date of May 31, 2024. The Company accounted for this notice as a modification in accordance with the guidance prescribed in ASC 842 and reduced the fair value of the associated value of the Right-of-Use asset by $359,000 and reduced both Current and Non-current lease liabilities by $104,000, and $274,000, respectively. Lastly, the Company recognized a $19,000 gain in connection with the lease termination. 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, 2022: As of September 30, 2022 2022 (excluding the nine months ended September 30, 2022) $ 237,000 2023 733,000 2024 499,000 2025 383,000 2026 240,000 Thereafter 1,589,000 Total operating lease payments 3,681,000 Less imputed interest (456,000) Total operating lease liabilities $ 3,225,000 Weighted average remaining lease term 7.9 years Weighted average discount rate 3.53 % NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Revenue Recognition The Company’s revenue recognition policies are detailed in its 2021 Form 10-K. The following tables present the Company’s revenues recognized under ASC Topic 606, “Revenue from Contracts with Customers”, for the three and nine-month periods ended September 30, 2022 and 2021. Florida Pneumatic Florida Pneumatic markets its air tool products to four primary sectors within the pneumatic tool market: Automotive, Retail, Industrial and Aerospace. It also generates revenue from its Berkley products line, as well as a line of air filters and other OEM parts, which are reported as Other. Three months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,110,000 31.4 % $ 3,168,000 33.0 % $ (58,000) (1.8) % Retail 2,779,000 28.0 3,222,000 33.5 (443,000) (13.7) Industrial 1,305,000 13.2 1,257,000 13.1 48,000 3.8 Aerospace 2,538,000 25.6 1,832,000 19.1 706,000 38.5 Other 174,000 1.8 128,000 1.3 46,000 35.9 Total $ 9,906,000 100.0 % $ 9,607,000 100.0 % $ 299,000 3.1 % Nine months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 10,845,000 33.0 % $ 11,053,000 35.4 % $ (208,000) (1.9) % Retail 10,625,000 32.3 10,775,000 34.5 (150,000) (1.4) Industrial 4,416,000 13.5 3,919,000 12.6 497,000 12.7 Aerospace 6,531,000 19.9 5,094,000 16.3 1,437,000 28.2 Other 436,000 1.3 380,000 1.2 56,000 14.7 Total $ 32,853,000 100.0 % $ 31,221,000 100.0 % $ 1,632,000 5.2 % NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Revenue Recognition - 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, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 2,187,000 47.4 % $ 1,668,000 49.4 % $ 519,000 31.1 % ATP 490,000 10.6 751,000 22.2 (261,000) (34.8) PTG 1,693,000 36.8 882,000 26.1 811,000 92.0 Other 240,000 5.2 77,000 2.3 163,000 211.7 Total $ 4,610,000 100.0 % $ 3,378,000 100.0 % $ 1,232,000 36.5 % Nine months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 6,693,000 49.6 % $ 4,688,000 50.4 % $ 2,005,000 42.8 % ATP 2,178,000 16.1 2,242,000 24.1 (64,000) (2.9) PTG 4,216,000 31.3 2,132,000 22.9 2,084,000 97.7 Other 407,000 3.0 237,000 2.6 170,000 71.7 Total $ 13,494,000 100.0 % $ 9,299,000 100.0 % $ 4,195,000 45.1 % Recently Adopted Accounting Pronouncements During the nine-month period ended September 30, 2022, there were no accounting pronouncements or other authoritative guidance issued that the Company adopted.

ACQUISITION

ACQUISITION	9 Months Ended
ACQUISITION	Sep. 30, 2022
ACQUISITION
ACQUISITION	NOTE 2 - ACQUISITION Effective January 15, 2022, through a wholly-owned subsidiary of Hy-Tech, the Company acquired (the “Acquisition”) substantially all the non-real estate assets comprising the business of JGC, a Pennsylvania-based corporation that manufactures and distributes custom gears and power transmission gear products. The purchase price consisted of an aggregate of approximately $2.3 million in cash, which was funded by Revolver (as defined in Note 9) borrowings, and the assumption of certain payables. The Company has incorporated this business into its PTG business and believes that the Acquisition will provide added market exposure into the market for larger gears. In connection with the Acquisition, the Company entered into the Consent, Joinder and Amendment No. 9 (“Amendment No. 9”) to the Second Amended and Restated Loan and Security Agreement (the “Credit Agreement”), with Capital One, National Association. Amendment No. 9, among other things, provided consent to the Acquisition. NOTE 2 – ACQUISITION - (Continued) Total Total purchase price $ 2,300,000 The following table presents the purchase price allocation: Accounts receivable $ 489,000 Inventories 359,000 Machinery and equipment 823,000 Customer relationships 450,000 Goodwill 394,000 Liabilities assumed (215,000) Total purchase price $ 2,300,000 The excess of the total purchase price over the fair value of the net assets acquired is being presented as goodwill. Goodwill is amortized over 15 years for tax purposes, but not deductible for financial reporting purposes. All identifiable intangible assets subject to amortization are amortized over their useful lives for book purposes and are amortized over 15 years for tax purposes. The following unaudited pro-forma combined financial information gives effect to the Acquisition as if the transaction was consummated on January 1, 2021. This unaudited pro-forma financial information is presented for information purposes only and is not intended to present actual results that would have been attained had the Acquisition been completed as of January 1, 2021 (the beginning of the earliest period presented) or to project potential operating results as of any future date or for any future periods. For the For the three-month nine-month period ended period ended September 30, 2021 September 30,2021 Revenue $ 13,835,000 $ 42,690,000 Net Income (Loss) $ (629,000) $ 1,514,000 Earnings (loss) per share – basic $ (0.20) $ 0.48 Earnings (loss) per share – diluted $ (0.20) $ 0.47

INCOME (LOSS) PER SHARE

INCOME (LOSS) PER SHARE	9 Months Ended
INCOME (LOSS) PER SHARE	Sep. 30, 2022
INCOME (LOSS) PER SHARE
INCOME (LOSS) PER SHARE	NOTE 3 -INCOME (LOSS) PER SHARE Basic loss per common share is based only on the weighted average number of shares of Common Stock outstanding for the periods. Diluted loss 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 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 3 -INCOME (LOSS) PER SHARE – (Continued) The following table sets forth the elements of basic and diluted loss per common share: Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 Numerator for basic and diluted (loss) income per common share: Net (loss) income $ (237,000) $ (733,000) $ (876,000) $ 1,383,000 Denominator: Denominator for basic (loss) income per share - weighted average common shares outstanding 3,195,000 3,181,000 3,183,000 3,177,000 Dilutive securities (1) — — — 14,000 Denominator for diluted (loss) income per share - weighted average common shares outstanding 3,195,000 3,181,000 3,183,000 3,191,000 (1) Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 Weighted average anti-dilutive stock options outstanding 134,000 135,000 134,000 138,000

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	9 Months Ended
STOCK-BASED COMPENSATION	Sep. 30, 2022
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION	NOTE 4 – STOCK-BASED COMPENSATION Stock Options Weighted Weighted average average remaining Aggregate exercise contractual life Intrinsic Option shares price (years) Value Outstanding, January 1, 2022 178,499 $ 6.76 3.4 $ 60,643 Granted — — — — Exercised 41,809 4.74 — 38,046 Forfeited 500 7.09 — — Expired 2,090 4.29 — — Outstanding, September 30, 2022 134,100 $ 7.42 3.6 $ — Vested, September 30, 2022 134,100 $ 7.42 3.6 $ — On June 21, 2022, the Chief Financial Officer of the Company exercised 41,809 options to purchase the Company’s Common Stock. The exercise price was $4.74 per share and the closing price of the Company’s Common Stock was $5.65. As permitted by the Company’s 2021 Stock Incentive Plan and approved in advance by the Compensation Committee of the Company’s Board of Directors, this transaction was completed by the executive officer remitting $2,000 to the Company and satisfying the remaining portion of his exercise price and tax withholding and remittance obligations through the net settlement of options. The above resulted in the executive officer receiving 7,163 shares of Common Stock. NOTE 4 – STOCK-BASED COMPENSATION – (Continued) Restricted Stock On May 25, 2022, the Company granted 1,250 restricted shares of its Common Stock to each non-employee member of its Board of Directors, totaling 6,250 restricted shares. The Company determined that the fair value of these shares was $5.50 per share, which was the closing price of the Company’s Common Stock on the date of the grant. These shares cannot be traded earlier than the first anniversary of the grant date. The Company ratably amortizes the total non-cash compensation expense of approximately $34,000 to selling, general and administrative expenses through May 2023. 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 ratably amortizes 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
FAIR VALUE MEASUREMENTS	Sep. 30, 2022
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	NOTE 5 – 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. As of September 30, 2022, and December 31, 2021, 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
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	Sep. 30, 2022
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	NOTE 6 – ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable - net consists of: September 30, 2022 December 31, 2021 Accounts receivable $ 9,691,000 $ 7,817,000 Allowance for doubtful accounts, sales discounts and chargebacks (233,000) (267,000) $ 9,458,000 $ 7,550,000

INVENTORIES

INVENTORIES	9 Months Ended
INVENTORIES	Sep. 30, 2022
INVENTORIES
INVENTORIES	NOTE 7 – INVENTORIES Inventories consist of: September 30, 2022 December 31, 2021 Raw material $ 2,033,000 $ 2,166,000 Work in process 2,170,000 1,360,000 Finished goods 20,528,000 20,495,000 $ 24,731,000 $ 24,021,000

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	9 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS	Sep. 30, 2022
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS	NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill are as follows: Balance, January 1, 2022 $ 4,447,000 Goodwill attributable to the acquisition of JGC business (See Note 2) 394,000 Currency translation adjustment (33,000) Balance, September 30, 2022 $ 4,808,000 Other intangible assets September 30, 2022 December 31, 2021 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,902,000 $ 3,942,000 $ 2,960,000 $ 6,495,000 $ 3,545,000 $ 2,950,000 Trademarks and trade names (1) 2,153,000 — 2,153,000 2,187,000 — 2,187,000 Trademarks and trade names 200,000 83,000 117,000 200,000 73,000 127,000 Engineering drawings 330,000 265,000 65,000 330,000 254,000 76,000 Non-compete agreements (1) 315,000 289,000 26,000 335,000 290,000 45,000 Patents 1,286,000 1,127,000 159,000 1,286,000 1,079,000 207,000 Totals $ 11,186,000 $ 5,706,000 $ 5,480,000 $ 10,833,000 $ 5,241,000 $ 5,592,000 (1) The weighted average amortization period in years for intangible assets was as follows: September 30, 2022 December 31, 2021 Customer relationships 6.1 6.7 Trademarks and trade names 8.8 9.5 Engineering drawings 4.4 5.1 Non-compete agreements 1.3 2.0 Patents 4.2 4.5 NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS – (Continued ) Amortization expense of intangible assets subject to amortization was as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 $ 151,000 $ 158,000 $ 469,000 $ 474,000 Amortization expense for the balance of 2022, and for each of the next four years and thereafter is estimated to be as follows: October 1, 2022 through December 31, 2022 $ 173,000 2023 686,000 2024 637,000 2025 608,000 2026 410,000 Thereafter 813,000 $ 3,327,000

DEBT

DEBT	9 Months Ended
DEBT	Sep. 30, 2022
DEBT
DEBT	NOTE 9 – 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 of credit 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. On April 12, 2022, we entered into Amendment No. 10 (“Amendment No. 10”) to the Credit Agreement, which among other things: ● Increased the Revolving Commitment by $2,000,000 , to $18,000,000 through June 30, 2022; ● Removed a $10,000,000 cap on inventory availability through June 30, 2022; ● Prohibited any Capex Loans through June 30, 2022; and ● Implemented Secured Overnight Financing Rate (“SOFR”) as the new benchmark interest rate immediately, in lieu of London Interbank Offered Rate (“LIBOR”). Until the effective date of Amendment No. 10, at the Company’s option, Revolver borrowings bore interest at either LIBOR or the Base Rate, as the terms are defined in the Credit Agreement, plus an Applicable Margin, as defined in the Credit Agreement. Additionally, the Company was subject to limitations on the number of LIBOR borrowings. As noted above, effective April 12, 2022, the Company began applying SOFR rates instead of LIBOR. The Company continues to have the option to borrow funds at either SOFR or Base Rate. The change from LIBOR to SOFR did not have a significant effect on the Company’s consolidated financial statements. The Company provides Capital One with monthly borrowing base certificates, and in certain circumstances, 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. NOTE 9 – DEBT – (Continued) At September 30, 2022, short-term or Revolver borrowing was $8,087,000, compared to $5,765,000 at December 31, 2021. (See Note 2 for further discussion related to this increase). Applicable Margin Rates at September 30, 2022, were 2.10% and 1.10%, respectively, for SOFR and Base Rate borrowings. At December 31, 2021, these rates were 1.50% and 0.50%, respectively, for LIBOR and Base Rate borrowings. Additionally, at September 30, 2022, and December 31, 2021, there was $7,200,000 and $9,578,000, respectively, available to the Company under its Revolver arrangement. The average balances of short-term borrowings from our Bank for the three and nine-month periods ended September 30, 2022, were $9,499,000 and $10,403,000, respectively, and $2,050,000 and $2,046,000, respectively, for the same periods in 2021.

DIVIDENDS

DIVIDENDS	9 Months Ended
DIVIDENDS	Sep. 30, 2022
Dividends.
DIVIDENDS	NOTE 10 – DIVIDENDS On August 9, 2022, the Company’s Board of Directors declared a $0.05 special dividend. This special dividend was paid on August 29, 2022, to all shareholders of record as of the close of business on August 22, 2022. The total cash outlay was approximately $160,000.

SUBSEQUENT EVENT

SUBSEQUENT EVENT	9 Months Ended
SUBSEQUENT EVENT	Sep. 30, 2022
SUBSEQUENT EVENT
SUBSEQUENT EVENT	NOTE 11 – SUBSEQUENT EVENT On November 8, 2022, the Company’s Board of Directors declared a $0.05 special dividend. This special dividend will be paid on or about November 30, 2022, to all shareholders of record as of the close of business on November 18, 2022. The total cash outlay is estimated to be $160,000.

BUSINESS AND SUMMARY OF ACCOU_2

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies)	9 Months Ended
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies)	Sep. 30, 2022
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
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 (“US 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 US 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, 2021, 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, 2021 (“2021 Form 10-K”). The unaudited consolidated financial statements contained herein should be read in conjunction with the 2021 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	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, among others. 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”, commonly referred to as “PTG”, produces spiral bevel and straight bevel gears along with a wide variety of other gearing. These products are sold direct to OEMs, end-users and gearbox repair companies. PTG works directly with its customer’s engineering departments to design or redesign gears or gearboxes to optimize a solution for functionality and manufacturability. Nearly all of Hy-Tech brands are manufactured in the United States of America. Hy-Tech markets ATP branded impact sockets, striking wrenches and accessories that are imported from Asia. Please refer to Note 2 for discussion related to the Company’s acquisition of the Jackson Gear Company business (“JGC”). COVID-19 On March 11, 2020, the World Health Organization designated the recent novel coronavirus, or COVID-19, as a global pandemic. COVID-19 was first detected in Wuhan City, Hubei Province, China and continued to spread, significantly impacting various markets around the world, including the United States. Various policies and initiatives have been implemented to reduce the global transmission of COVID-19. The COVID-19 virus and the resultant global economic down-turn had a negative impact on our fiscal 2021 results. The Company believes its year-to-date results during the first half of 2022 were still being negatively impacted by the COVID-19 global pandemic. The economic slow-down and constraints caused by the pandemic began to ease somewhat mid-year. However, the Company further believes that the on-going supply-chain crisis is related to the pandemic. Commencing in mid-2021, although easing somewhat beginning mid-2022, we encountered severe shipping / receiving delays of inventory from our Asian suppliers, which has caused intermittent shortages of product. Further, the Company believes the COVID-19 global pandemic has been and continues to be the primary factor in the significant increases in the cost of international ocean freight, although ocean freight costs have begun to lessen during the third quarter of 2022. The Company believes that until the above issues subside, its business will likely continue to be adversely affected by difficulties caused by the global pandemic.
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 US 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 or generate cash from the sale of certain assets, should operations weaken beyond current forecasts. 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	Customer Concentration The Company had one customer that accounted for 25.9% and 35.9% of its consolidated accounts receivable at September 30, 2022, and December 31, 2021, respectively. Further, this customer accounted for 19.1% and 22.9%, respectively, of the Company’s consolidated revenue during the three and nine-month periods ended September 30, 2022, and 24.8% and 26.6%, respectively, for the same periods in 2021. There was no other customer that accounted for more than 10% of our consolidated revenue or accounts receivable for all periods presented.
Management Estimates	Management Estimates The preparation of financial statements and related disclosures in conformity with US 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, accounts receivable reserve, inventory, goodwill, intangible assets and other long-lived assets, contingent consideration, income taxes, deferred taxes, and lease liabilities. Descriptions of these policies are discussed in the Company’s 2021 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 There were no changes to the Company's significant accounting policies during the three and nine-month periods ended September 30, 2022. The Company’s significant accounting policies are described in “Note 1: Summary of Significant Accounting Policies” of our 2021 Form 10-K.
Lease Accounting	Lease Accounting The Company adheres to the standards set forth in Accounting Standards Codification (“ASC”) 842, “Leases 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 during the three -month period ended September 30, 2022. 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, 2022, the Company had $239,000 and $710,000, respectively, in operating lease expense, and $222,000 and $670,000, respectively, for the same three and nine-month periods in 2021. Effective March 1, 2022, the Company and the landlord of the facility located in Punxsutawney, PA agreed to modify the lease related to the approximate 42,000 square foot premises that was leased by Hy-Tech. This lease modification among other things, increased the rented space to approximately 62,000 square feet, extended the lease termination date to February 2027, and provided two three During the third quarter 2022, the Company was advised by the landlord of the property it leases in Jupiter, Florida that it was exercising its right to terminate the lease effective July 1, 2023. This lease, which was entered into in June 2019, had an original expiration date of May 31, 2024. The Company accounted for this notice as a modification in accordance with the guidance prescribed in ASC 842 and reduced the fair value of the associated value of the Right-of-Use asset by $359,000 and reduced both Current and Non-current lease liabilities by $104,000, and $274,000, respectively. Lastly, the Company recognized a $19,000 gain in connection with the lease termination. 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, 2022: As of September 30, 2022 2022 (excluding the nine months ended September 30, 2022) $ 237,000 2023 733,000 2024 499,000 2025 383,000 2026 240,000 Thereafter 1,589,000 Total operating lease payments 3,681,000 Less imputed interest (456,000) Total operating lease liabilities $ 3,225,000 Weighted average remaining lease term 7.9 years Weighted average discount rate 3.53 %
Revenue Recognition	Revenue Recognition The Company’s revenue recognition policies are detailed in its 2021 Form 10-K. The following tables present the Company’s revenues recognized under ASC Topic 606, “Revenue from Contracts with Customers”, for the three and nine-month periods ended September 30, 2022 and 2021. Florida Pneumatic Florida Pneumatic markets its air tool products to four primary sectors within the pneumatic tool market: Automotive, Retail, Industrial and Aerospace. It also generates revenue from its Berkley products line, as well as a line of air filters and other OEM parts, which are reported as Other. Three months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,110,000 31.4 % $ 3,168,000 33.0 % $ (58,000) (1.8) % Retail 2,779,000 28.0 3,222,000 33.5 (443,000) (13.7) Industrial 1,305,000 13.2 1,257,000 13.1 48,000 3.8 Aerospace 2,538,000 25.6 1,832,000 19.1 706,000 38.5 Other 174,000 1.8 128,000 1.3 46,000 35.9 Total $ 9,906,000 100.0 % $ 9,607,000 100.0 % $ 299,000 3.1 % Nine months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 10,845,000 33.0 % $ 11,053,000 35.4 % $ (208,000) (1.9) % Retail 10,625,000 32.3 10,775,000 34.5 (150,000) (1.4) Industrial 4,416,000 13.5 3,919,000 12.6 497,000 12.7 Aerospace 6,531,000 19.9 5,094,000 16.3 1,437,000 28.2 Other 436,000 1.3 380,000 1.2 56,000 14.7 Total $ 32,853,000 100.0 % $ 31,221,000 100.0 % $ 1,632,000 5.2 % NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Revenue Recognition - 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, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 2,187,000 47.4 % $ 1,668,000 49.4 % $ 519,000 31.1 % ATP 490,000 10.6 751,000 22.2 (261,000) (34.8) PTG 1,693,000 36.8 882,000 26.1 811,000 92.0 Other 240,000 5.2 77,000 2.3 163,000 211.7 Total $ 4,610,000 100.0 % $ 3,378,000 100.0 % $ 1,232,000 36.5 % Nine months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 6,693,000 49.6 % $ 4,688,000 50.4 % $ 2,005,000 42.8 % ATP 2,178,000 16.1 2,242,000 24.1 (64,000) (2.9) PTG 4,216,000 31.3 2,132,000 22.9 2,084,000 97.7 Other 407,000 3.0 237,000 2.6 170,000 71.7 Total $ 13,494,000 100.0 % $ 9,299,000 100.0 % $ 4,195,000 45.1 %
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements During the nine-month period ended September 30, 2022, there were no accounting pronouncements or other authoritative guidance issued that the Company adopted.

BUSINESS AND SUMMARY OF ACCOU_3

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Tables)	9 Months Ended
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Tables)	Sep. 30, 2022
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, 2022: As of September 30, 2022 2022 (excluding the nine months ended September 30, 2022) $ 237,000 2023 733,000 2024 499,000 2025 383,000 2026 240,000 Thereafter 1,589,000 Total operating lease payments 3,681,000 Less imputed interest (456,000) Total operating lease liabilities $ 3,225,000 Weighted average remaining lease term 7.9 years Weighted average discount rate 3.53 %
Schedule of Revenue	Three months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,110,000 31.4 % $ 3,168,000 33.0 % $ (58,000) (1.8) % Retail 2,779,000 28.0 3,222,000 33.5 (443,000) (13.7) Industrial 1,305,000 13.2 1,257,000 13.1 48,000 3.8 Aerospace 2,538,000 25.6 1,832,000 19.1 706,000 38.5 Other 174,000 1.8 128,000 1.3 46,000 35.9 Total $ 9,906,000 100.0 % $ 9,607,000 100.0 % $ 299,000 3.1 % Nine months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 10,845,000 33.0 % $ 11,053,000 35.4 % $ (208,000) (1.9) % Retail 10,625,000 32.3 10,775,000 34.5 (150,000) (1.4) Industrial 4,416,000 13.5 3,919,000 12.6 497,000 12.7 Aerospace 6,531,000 19.9 5,094,000 16.3 1,437,000 28.2 Other 436,000 1.3 380,000 1.2 56,000 14.7 Total $ 32,853,000 100.0 % $ 31,221,000 100.0 % $ 1,632,000 5.2 % Three months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 2,187,000 47.4 % $ 1,668,000 49.4 % $ 519,000 31.1 % ATP 490,000 10.6 751,000 22.2 (261,000) (34.8) PTG 1,693,000 36.8 882,000 26.1 811,000 92.0 Other 240,000 5.2 77,000 2.3 163,000 211.7 Total $ 4,610,000 100.0 % $ 3,378,000 100.0 % $ 1,232,000 36.5 % Nine months ended September 30, 2022 2021 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 6,693,000 49.6 % $ 4,688,000 50.4 % $ 2,005,000 42.8 % ATP 2,178,000 16.1 2,242,000 24.1 (64,000) (2.9) PTG 4,216,000 31.3 2,132,000 22.9 2,084,000 97.7 Other 407,000 3.0 237,000 2.6 170,000 71.7 Total $ 13,494,000 100.0 % $ 9,299,000 100.0 % $ 4,195,000 45.1 %

ACQUISITION (Tables)

ACQUISITION (Tables)	9 Months Ended
ACQUISITION (Tables)	Sep. 30, 2022
ACQUISITION
Schedule of estimated purchase price of fair value of cash paid contingent consideration	NOTE 2 – ACQUISITION - (Continued) Total Total purchase price $ 2,300,000
Schedule of purchase price allocation	The following table presents the purchase price allocation: Accounts receivable $ 489,000 Inventories 359,000 Machinery and equipment 823,000 Customer relationships 450,000 Goodwill 394,000 Liabilities assumed (215,000) Total purchase price $ 2,300,000
Schedule of unaudited pro-forma combined financial information	For the For the three-month nine-month period ended period ended September 30, 2021 September 30,2021 Revenue $ 13,835,000 $ 42,690,000 Net Income (Loss) $ (629,000) $ 1,514,000 Earnings (loss) per share – basic $ (0.20) $ 0.48 Earnings (loss) per share – diluted $ (0.20) $ 0.47

INCOME (LOSS) PER SHARE (Tables

INCOME (LOSS) PER SHARE (Tables)	9 Months Ended
INCOME (LOSS) PER SHARE (Tables)	Sep. 30, 2022
INCOME (LOSS) PER SHARE
Schedule of computation of basic and diluted (loss) per common share	The following table sets forth the elements of basic and diluted loss per common share: Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 Numerator for basic and diluted (loss) income per common share: Net (loss) income $ (237,000) $ (733,000) $ (876,000) $ 1,383,000 Denominator: Denominator for basic (loss) income per share - weighted average common shares outstanding 3,195,000 3,181,000 3,183,000 3,177,000 Dilutive securities (1) — — — 14,000 Denominator for diluted (loss) income per share - weighted average common shares outstanding 3,195,000 3,181,000 3,183,000 3,191,000 (1)
Schedule of weighted average of anti-dilutive stock options	Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 Weighted average anti-dilutive stock options outstanding 134,000 135,000 134,000 138,000

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	9 Months Ended
STOCK-BASED COMPENSATION (Tables)	Sep. 30, 2022
STOCK-BASED COMPENSATION
Schedule of share-based compensation stock options	Weighted Weighted average average remaining Aggregate exercise contractual life Intrinsic Option shares price (years) Value Outstanding, January 1, 2022 178,499 $ 6.76 3.4 $ 60,643 Granted — — — — Exercised 41,809 4.74 — 38,046 Forfeited 500 7.09 — — Expired 2,090 4.29 — — Outstanding, September 30, 2022 134,100 $ 7.42 3.6 $ — Vested, September 30, 2022 134,100 $ 7.42 3.6 $ —

ACCOUNTS RECEIVABLE AND ALLOW_2

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables)	9 Months Ended
	Sep. 30, 2022
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Schedule of accounts receivable - net	Accounts receivable - net consists of: September 30, 2022 December 31, 2021 Accounts receivable $ 9,691,000 $ 7,817,000 Allowance for doubtful accounts, sales discounts and chargebacks (233,000) (267,000) $ 9,458,000 $ 7,550,000

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
INVENTORIES (Tables)	Sep. 30, 2022
INVENTORIES
Schedule of inventories	Inventories consist of: September 30, 2022 December 31, 2021 Raw material $ 2,033,000 $ 2,166,000 Work in process 2,170,000 1,360,000 Finished goods 20,528,000 20,495,000 $ 24,731,000 $ 24,021,000

GOODWILL AND OTHER INTANGIBLE_2

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	9 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	Sep. 30, 2022
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, 2022 $ 4,447,000 Goodwill attributable to the acquisition of JGC business (See Note 2) 394,000 Currency translation adjustment (33,000) Balance, September 30, 2022 $ 4,808,000
Schedule of other intangible assets	September 30, 2022 December 31, 2021 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,902,000 $ 3,942,000 $ 2,960,000 $ 6,495,000 $ 3,545,000 $ 2,950,000 Trademarks and trade names (1) 2,153,000 — 2,153,000 2,187,000 — 2,187,000 Trademarks and trade names 200,000 83,000 117,000 200,000 73,000 127,000 Engineering drawings 330,000 265,000 65,000 330,000 254,000 76,000 Non-compete agreements (1) 315,000 289,000 26,000 335,000 290,000 45,000 Patents 1,286,000 1,127,000 159,000 1,286,000 1,079,000 207,000 Totals $ 11,186,000 $ 5,706,000 $ 5,480,000 $ 10,833,000 $ 5,241,000 $ 5,592,000 (1) The weighted average amortization period in years for intangible assets was as follows: September 30, 2022 December 31, 2021 Customer relationships 6.1 6.7 Trademarks and trade names 8.8 9.5 Engineering drawings 4.4 5.1 Non-compete agreements 1.3 2.0 Patents 4.2 4.5
Schedule of amortization expense of intangible assets	Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 $ 151,000 $ 158,000 $ 469,000 $ 474,000 Amortization expense for the balance of 2022, and for each of the next four years and thereafter is estimated to be as follows: October 1, 2022 through December 31, 2022 $ 173,000 2023 686,000 2024 637,000 2025 608,000 2026 410,000 Thereafter 813,000 $ 3,327,000

BUSINESS AND SUMMARY OF ACCOU_4

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Additional information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) ft²	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) ft² item $ / product	Sep. 30, 2021 USD ($)
Schedule Of Summary Of Accounting Policies
Area of land \| ft²	42,000		42,000
Number of renewal options			62,000
Renewal term (in years)	3 years		3 years
Reduction in right of use assets			$ 359,000
Reduction in current lease liabilities			104,000
Reduction in non-current lease liabilities			274,000
Gain on lease termination			19,000
Operating lease expense	$ 239,000	$ 222,000	$ 710,000	$ 670,000
Florida Pneumatic
Schedule Of Summary Of Accounting Policies
Number of types of pneumatic hand tools imported or manufactured \| item			75
Florida Pneumatic \| Minimum
Schedule Of Summary Of Accounting Policies
Sale price per product \| $ / product			50
Florida Pneumatic \| Maximum
Schedule Of Summary Of Accounting Policies
Sale price per product \| $ / product			1,000
Hy-Tech \| Minimum
Schedule Of Summary Of Accounting Policies
Sale price per product \| $ / product			300
Hy-Tech \| Maximum
Schedule Of Summary Of Accounting Policies
Sale price per product \| $ / product			42,000

BUSINESS AND SUMMARY OF ACCOU_5

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Customer Concentration (Details) - Accounts Receivable - Customer Concentration Risk	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Home depot
Schedule Of Summary Of Accounting Policies
Concentration risk, percentage			25.90%		35.90%
Amazon.com
Schedule Of Summary Of Accounting Policies
Concentration risk, percentage	19.10%	24.80%	22.90%	26.60%

BUSINESS AND SUMMARY OF ACCOU_6

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Maturity analysis of the annual undiscounted cash flows (Details)	Sep. 30, 2022 USD ($)
Operating lease liabilities
2022 (excluding the six months ended June 30, 2022)	$ 237,000
2023	733,000
2024	499,000
2025	383,000
2026	240,000
Thereafter	1,589,000
Total operating lease payments	3,681,000
Less imputed interest	(456,000)
Total operating lease liabilities	$ 3,225,000
Weighted average remaining lease term	7 years 10 months 24 days
Weighted average discount rate	3.53%

BUSINESS AND SUMMARY OF ACCOU_7

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Retail automotive industrial and aerospace (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 14,516,000	$ 12,985,000	$ 46,347,000	$ 40,520,000
Florida Pneumatic
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 9,906,000	$ 9,607,000	$ 32,853,000	$ 31,221,000
Percentage of revenue	100%	100%	100%	100%
Increase (decrease)		$ 299,000		$ 1,632,000
Percentage of Increase (decrease)		3.10%		5.20%
Florida Pneumatic \| Automotive
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 3,110,000	$ 3,168,000	$ 10,845,000	$ 11,053,000
Percentage of revenue	31.40%	33%	33%	35.40%
Increase (decrease)		$ (58,000)		$ (208,000)
Percentage of Increase (decrease)		(1.80%)		(1.90%)
Florida Pneumatic \| Retail
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 2,779,000	$ 3,222,000	$ 10,625,000	$ 10,775,000
Percentage of revenue	28%	33.50%	32.30%	34.50%
Increase (decrease)		$ (443,000)		$ (150,000)
Percentage of Increase (decrease)		(13.70%)		(1.40%)
Florida Pneumatic \| Industrial
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 1,305,000	$ 1,257,000	$ 4,416,000	$ 3,919,000
Percentage of revenue	13.20%	13.10%	13.50%	12.60%
Increase (decrease)		$ 48,000		$ 497,000
Percentage of Increase (decrease)		3.80%		12.70%
Florida Pneumatic \| Aerospace
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 2,538,000	$ 1,832,000	$ 6,531,000	$ 5,094,000
Percentage of revenue	25.60%	19.10%	19.90%	16.30%
Increase (decrease)		$ 706,000		$ 1,437,000
Percentage of Increase (decrease)		38.50%		28.20%
Florida Pneumatic \| Other
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 174,000	$ 128,000	$ 436,000	$ 380,000
Percentage of revenue	1.80%	1.30%	1.30%	1.20%
Increase (decrease)		$ 46,000		$ 56,000
Percentage of Increase (decrease)		35.90%		14.70%
Hy-Tech
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 4,610,000	$ 3,378,000	$ 13,494,000	$ 9,299,000
Percentage of revenue	100%	100%	100%	100%
Increase (decrease)		$ 1,232,000		$ 4,195,000
Percentage of Increase (decrease)		36.50%		45.10%
Hy-Tech \| OEM
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 2,187,000	$ 1,668,000	$ 6,693,000	$ 4,688,000
Percentage of revenue	47.40%	49.40%	49.60%	50.40%
Increase (decrease)		$ 519,000		$ 2,005,000
Percentage of Increase (decrease)		31.10%		42.80%
Hy-Tech \| ATP
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 490,000	$ 751,000	$ 2,178,000	$ 2,242,000
Percentage of revenue	10.60%	22.20%	16.10%	24.10%
Increase (decrease)		$ (261,000)		$ (64,000)
Percentage of Increase (decrease)		(34.80%)		(2.90%)
Hy-Tech \| PTG
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 1,693,000	$ 882,000	$ 4,216,000	$ 2,132,000
Percentage of revenue	36.80%	26.10%	31.30%	22.90%
Increase (decrease)		$ 811,000		$ 2,084,000
Percentage of Increase (decrease)		92%		97.70%
Hy-Tech \| Other
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 240,000	$ 77,000	$ 407,000	$ 237,000
Percentage of revenue	5.20%	2.30%	3%	2.60%
Increase (decrease)		$ 163,000		$ 170,000
Percentage of Increase (decrease)		211.70%		71.70%

ACQUISITION - (Details)

ACQUISITION - (Details)	9 Months Ended
ACQUISITION - (Details)	Sep. 30, 2022 USD ($)
Business of Jackson Gear Company
ACQUISITION
Total purchase price	$ 2,300,000

ACQUISITION - Purchase price al

ACQUISITION - Purchase price allocation (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill	$ 4,808,000	$ 4,447,000
Business of Jackson Gear Company
Business Acquisition [Line Items]
Accounts receivable	489,000
Inventories	359,000
Machinery and equipment	823,000
Customer relationships	450,000
Goodwill	394,000
Liabilities assumed	(215,000)
Total purchase price	$ 2,300,000

ACQUISITION - Unaudited pro-for

ACQUISITION - Unaudited pro-forma combined financial information (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
ACQUISITION
Revenue	$ 13,835,000	$ 42,690,000
Net income	$ (629,000)	$ 1,514,000
Earnings (loss) per share - basic	$ (0.20)	$ 0.48
Earnings (loss) per share - diluted	$ (0.20)	$ 0.47

ACQUISITION - Additional inform

ACQUISITION - Additional information (Details) - USD ($)	9 Months Ended
ACQUISITION - Additional information (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021
Business Acquisition [Line Items]
Goodwill amortization period (in years)	15 years
Acquired finite-lived intangible assets, weighted average useful life	15 years
Payments to acquire businesses, gross	$ 2,300,000	$ 0
Business of Jackson Gear Company
Business Acquisition [Line Items]
Payments to acquire businesses, gross	$ 2,300,000

INCOME (LOSS) PER SHARE - Loss

INCOME (LOSS) PER SHARE - Loss per share basic and diluted (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator for basic and diluted (loss) income per common share:
Net (loss) income	$ (237,000)	$ (733,000)	$ (876,000)	$ 1,383,000
Denominator:
Denominator for basic (loss) income per share - weighted average common shares outstanding	3,195,000	3,181,000	3,183,000	3,177,000
Dilutive securities (1)	0	0	0	14,000
Denominator for diluted (loss) income per share - weighted average common shares outstanding	3,195,000	3,181,000	3,183,000	3,191,000

INCOME (LOSS) PER SHARE - Weigh

INCOME (LOSS) PER SHARE - Weighted average anti-dilutive stock options (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Equity Option
Antidilutive Securities Excluded from Computation of Earnings Per Share
Weighted average antidilutive stock options outstanding	134,000	135,000	134,000	138,000

STOCK-BASED COMPENSATION - Outs

STOCK-BASED COMPENSATION - Outstanding options (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
STOCK-BASED COMPENSATION
Number of Shares, Outstanding	178,499
Number of Shares, Granted	0
Number of Shares, Exercised	41,809
Number of Shares, Forfeited	500
Number of Shares, Expired	2,090
Number of Shares, Outstanding	134,100	178,499
Number of Shares, Vested	134,100
Weighted Average Exercise Price per share, Outstanding (in dollars per share)	$ 6.76
Weighted Average Exercise Price per share, Granted (in dollars per share)	0
Weighted Average Exercise Price per share, Exercised (in dollars per share)	4.74
Weighted Average Exercise Price per share, Forfeited (in dollars per share)	7.09
Weighted Average Exercise Price per share, Expired (in dollars per share)	4.29
Weighted Average Exercise Price per share, Outstanding (in dollars per share)	7.42	$ 6.76
Weighted Average Exercise Price per share, Vested (in dollars per share)	$ 7.42
Weighted Average Remaining Contractual Life, Outstanding (Years)	3 years 7 months 6 days	3 years 4 months 24 days
Weighted Average Remaining Contractual Life, Vested (Years)	3 years 7 months 6 days
Aggregate Intrinsic Value, Outstanding (in dollars)		$ 60,643
Aggregate Intrinsic Value, Exercised (in dollars)	$ 38,046

STOCK OPTIONS - STOCK COMPENSAT

STOCK OPTIONS - STOCK COMPENSATION - Additional information (Details) - USD ($)				9 Months Ended
	Jun. 21, 2022	May 25, 2022	Feb. 16, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				0
Stock-based compensation				$ 1,000	$ 4,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance				134,100		178,499
Number of Shares, Exercised				41,809
Exercise price per share				$ 4.74
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		1,250
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance		6,250
Weighted average fair value of options granted		$ 5.50
Vesting period			5 years
Restricted stock-based compensation		$ 34,000	$ 159,000
Restricted stock-based compensation per annual			$ 32,000
Chief Financial Officer
Share-based Compensation Arrangement by Share-based Payment Award
Number of Shares, Exercised	41,809
Exercise price per share	$ 4.74
Closing price of common stock	$ 5.65
Remittance for common stock	$ 2,000
Number of shares issued	7,163
Chief Financial Officer \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Available for Grant			25,000
Weighted average fair value of options granted			$ 6.36

ACCOUNTS RECEIVABLE AND ALLOW_3

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable	$ 9,691,000	$ 7,817,000
Allowance for doubtful accounts, sales discounts and chargebacks	(233,000)	(267,000)
Accounts receivable - net	$ 9,458,000	$ 7,550,000

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
INVENTORIES
Raw material	$ 2,033,000	$ 2,166,000
Work in process	2,170,000	1,360,000
Finished goods	20,528,000	20,495,000
Inventories	$ 24,731,000	$ 24,021,000

GOODWILL AND OTHER INTANGIBLE_3

GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying amount of goodwill (Details)	9 Months Ended
	Sep. 30, 2022 USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
Balance, beginning	$ 4,447,000
Goodwill attributable to the acquisition of JGC business	394,000
Currency translation adjustment	(33,000)
Balance, ending	$ 4,808,000

GOODWILL AND OTHER INTANGIBLE_4

GOODWILL AND OTHER INTANGIBLE ASSETS - Other intangible assets - (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Other intangible assets:
Cost	$ 11,186,000	$ 10,833,000
Accumulated amortization	5,706,000	5,241,000
Net book value	$ 5,480,000	5,592,000
Acquired finite-lived intangible assets, weighted average useful life	15 years
Customer relationships
Other intangible assets:
Cost	$ 6,902,000	6,495,000
Accumulated amortization	3,942,000	3,545,000
Net book value	$ 2,960,000	$ 2,950,000
Acquired finite-lived intangible assets, weighted average useful life	6 years 1 month 6 days	6 years 8 months 12 days
Trademarks and trade names one
Other intangible assets:
Cost	$ 2,153,000	$ 2,187,000
Accumulated amortization	0	0
Net book value	$ 2,153,000	$ 2,187,000
Acquired finite-lived intangible assets, weighted average useful life	8 years 9 months 18 days	9 years 6 months
Trademarks and Trade Names Two
Other intangible assets:
Cost	$ 200,000	$ 200,000
Accumulated amortization	83,000	73,000
Net book value	117,000	127,000
Engineering drawings
Other intangible assets:
Cost	330,000	330,000
Accumulated amortization	265,000	254,000
Net book value	$ 65,000	$ 76,000
Acquired finite-lived intangible assets, weighted average useful life	4 years 4 months 24 days	5 years 1 month 6 days
Non-compete agreements
Other intangible assets:
Cost	$ 315,000	$ 335,000
Accumulated amortization	289,000	290,000
Net book value	$ 26,000	$ 45,000
Acquired finite-lived intangible assets, weighted average useful life	1 year 3 months 18 days	2 years
Patents
Other intangible assets:
Cost	$ 1,286,000	$ 1,286,000
Accumulated amortization	1,127,000	1,079,000
Net book value	$ 159,000	$ 207,000
Acquired finite-lived intangible assets, weighted average useful life	4 years 2 months 12 days	4 years 6 months

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, 2022	Sep. 30, 2021	Sep. 30, 2021
GOODWILL AND OTHER INTANGIBLE ASSETS
Amortization expense of intangible assets	$ 151,000	$ 158,000	$ 474,000

GOODWILL AND OTHER INTANGIBLE_6

GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated amortization expense (Details)	Sep. 30, 2022 USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
October 1, 2022 through December 31, 2022	$ 173,000
2023	686,000
2024	637,000
2025	608,000
2026	410,000
Thereafter	813,000
Total	$ 3,327,000

DEBT (Details)

DEBT (Details) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
DEBT (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Jun. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Apr. 30, 2017
Debt Instrument
Short-term Debt	$ 8,087,000			$ 8,087,000		$ 5,765,000
Increase in interest rate				2%
Average balances of short-term borrowings	9,499,000	$ 2,050,000		$ 10,403,000	$ 2,046,000
Short-term Debt
Debt Instrument
Remaining borrowing capacity	$ 7,200,000			$ 7,200,000		$ 9,578,000
Short-term Debt \| Base Rate
Debt Instrument
Variable rate				1.10%		0.50%
Short-term Debt \| London Interbank Offered Rate (LIBOR)
Debt Instrument
Variable rate				2.10%		1.50%
Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity			$ 18,000,000				$ 16,000,000
Line of credit for capital expenditures							2,000,000
Increase in revolving commitment			2,000,000
Amount of cap on inventory availability			$ 10,000,000
Capex Borrowing
Debt Instrument
Maximum borrowing capacity							$ 1,600,000

DIVIDENDS (Details)

DIVIDENDS (Details) - USD ($)		9 Months Ended
DIVIDENDS (Details) - USD ($)	Aug. 09, 2022	Sep. 30, 2022	Sep. 30, 2021
Dividends.
Special dividends declared per share	$ 0.05
Total cash outlay for dividends	$ 160,000	$ 160,000	$ 0

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) - USD ($)	Nov. 08, 2022	Aug. 09, 2022
Subsequent Event
Dividends per share		$ 0.05
Subsequent Event
Subsequent Event
Dividends per share	$ 0.05
Dividend cash outlays	$ 160,000