Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 15-May-15 | |
Document And Entity Information | ||
Entity Registrant Name | EMRISE Corp | |
Entity Central Index Key | 854852 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 10,822,337 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $288 | $248 |
Prepaid and other current assets | 26 | 27 |
Current assets held for sale (note 2) | 13,510 | 14,727 |
Total current assets | 13,824 | 15,002 |
Non-current assets held for sale (note 2) | 9,307 | 9,853 |
Total assets | 23,131 | 24,855 |
Current liabilities: | ||
Accounts payable | 304 | 115 |
Accrued expenses | 562 | 235 |
Current liabilities held for sale (note 2) | 8,712 | 9,464 |
Total current liabilities | 9,578 | 9,814 |
Long-term liabilities held for sale (note 2) | 3,595 | 4,000 |
Total liabilities | 13,173 | 13,814 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value. Authorized 10,000,000 shares, no shares issued or outstanding | ||
Common stock, $0.0033 par value. Authorized 75,000,000 shares; 10,816,337 and 10,810,337 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 128 | 128 |
Additional paid-in capital | 44,277 | 44,265 |
Accumulated deficit | -31,223 | -31,047 |
Accumulated other comprehensive loss | -3,224 | -2,305 |
Total stockholders' equity | 9,958 | 11,041 |
Total liabilities and stockholders' equity | $23,131 | $24,855 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 10,816,337 | 10,810,337 |
Common stock, shares outstanding | 10,816,337 | 10,810,337 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Selling, general and administrative | ($694) | ($780) |
Loss arising from continuing operations | -694 | -780 |
Discontinued operations (Note 2) | ||
Income from operations of discontinued segments | 831 | 22 |
Income tax charge of discontinued segments | -313 | -27 |
Income/(loss) from discontinued operations | 518 | -5 |
Net Loss | -176 | -785 |
Foreign currency translation adjustment | -919 | 98 |
Comprehensive loss | ($1,095) | ($687) |
Basic and diluted | 10,813 | 10,715 |
Earnings / (Loss) per share: | ||
Discontinued operations | $0.05 | |
Continuing Operations | ($0.06) | ($0.07) |
Total | ($0.01) | ($0.07) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($176) | ($785) |
Adjustments to arrive at net loss from continuing operations | -518 | 5 |
Net loss from continuing operations | -694 | -780 |
Reconciliation to net cash provided by operating activities: | ||
Stock-based expense | 11 | 5 |
Changes in assets and liabilities: | ||
Prepaid and other assets | 2 | 14 |
Accounts payable and accrued expenses | 721 | -172 |
Total adjustments | 734 | -153 |
Operating cash flow used in continuing operations | 40 | -933 |
Operating cash flow provided by discontinued operations | 405 | 815 |
Net cash provided by/(used in) operating activities | 445 | -118 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Investing cash flow provided by/(used in) discontinued activities | 13 | -148 |
Net cash provided by/(used in) investing activities | 13 | -148 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of current portion of long-term debt from continuing operations | -300 | |
Movements to continuing operations from discontinued operations | 2,730 | |
Movements from discontinuing operations to continuing operations | -2,730 | |
Financing cash flow provided by/(used in) financing activities in discontinued activities | -726 | 2,045 |
Net cash provided by/(used in) financing activities | -726 | 1,745 |
Effect of exchange rate changes on cash for discontinued operations | -405 | 36 |
Net increase/(decrease) in cash for discontinued operations | -713 | 18 |
Net increase in cash for continuing operations | 40 | 1,497 |
Net increase (decrease) in cash and cash equivalents | -673 | 1,515 |
Cash at beginning of period for discontinued operations | 2,109 | 476 |
Cash at beginning of period for continuing operations | 248 | 694 |
Cash, beginining | 2,357 | 1,170 |
Cash at end of period for discontinued operations | 1,396 | 694 |
Cash at end of period for continuing operations | 288 | 2,191 |
Cash, ending | 1,684 | 2,685 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Interest | 61 | 136 |
Income taxes | 136 | 148 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Acquisition of equipment through capital leases | $410 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Significant Accounting Policies | NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Organization and Business | |||||||||
EMRISE Corporation (the “Company”) designs, manufactures and markets proprietary electronic devices and communications equipment for aerospace, defense, industrial, and communications applications. The Company has operations in the United States, England and France. The Company conducts its business through two operating segments: electronic devices and communications equipment. The subsidiaries within the electronic devices segment design, develop, manufacture and market electronic devices for defense, aerospace and industrial markets and operate out of facilities located in England. The subsidiaries within the communications equipment segment design, develop, manufacture and market network access equipment, including network timing and synchronization products and operated in the year out of facilities located in the United States and France. | |||||||||
Discontinued Operations, Planned Dissolution and Liquidation | |||||||||
In October 2014, the Company disposed of its communication equipment business in the United States. On March 22, 2015, after a lengthy and extensive examination of all available strategies to maximize shareholder value, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with DDC (United Kingdom) Ltd., a subsidiary of Data Device Corporation (“DDC” or the “Purchaser’’), to sell all of the issued and outstanding shares of the common stock of the Company’s wholly owned subsidiary, EMRISE Electronics Ltd. (“EEL”), for a gross purchase price of $22 million, net of debt and transaction expenses and subject to a working capital adjustment (the “Transaction”). | |||||||||
In connection with the Purchase Agreement, the Company and Purchaser have agreed to deposit $1,300,000 of the purchase price into escrow at the closing of the Transaction (the “Closing”) to secure certain indemnification obligations of the Company under the Purchase Agreement. This escrow amount will remain available for satisfaction of any indemnification claims until twelve months following the Closing, at which time any remaining balance not subject to outstanding and unresolved claims will be distributed to the Company. | |||||||||
In connection with the Company’s entry into the Purchase Agreement, certain individuals specified in the Purchase Agreement, including Graham Jefferies, our President and Chief Operating Officer, have entered into employment agreements with the Purchaser which shall become effective at Closing. The sale has been unanimously approved by the Board but will be subject to shareholder approval with a vote through a proxy process. Full details of the proposed transaction are contained in the Current Report on Form 8-K filed by the Company with the SEC on May 1, 2015. The proposed sale followed a strategic review carried out by the Company over the preceding year. The Board also determined that, assuming the transaction receives shareholder approval, the Company’s communications business should also be sold and Emrise Corporation should be dissolved and liquidated completely after the consummation of the transaction. In this respect, the Board approved a Plan of Liquidation and Dissolution (the “Plan of Dissolution”). The Company intends to file a Certificate of Dissolution with the Delaware Secretary of State, cease all of the Company’s business activities except those related to winding up and liquidating the Company’s business and to preserve the value of its assets, complete the liquidation of its remaining assets, satisfy or make provision for its remaining claims and obligations in accordance with Delaware law, and make distributions to its stockholders of available liquidation proceeds, if any. It is anticipated that under Delaware law that the execution of the Plan of Dissolution may take up to three years. | |||||||||
In addition, if the Company’s stockholders approve the sale of EEL, the dissolution and liquidation of the Company pursuant to the Plan of Dissolution, the Company will also initiate a process to delist its common stock. A delisting will limit trading activity and liquidity in the Company’s common stock, among other matters. | |||||||||
As a result of these agreements, the Company’s operating subsidiaries are classified as held for sale as of March 31, 2015. The results of the Operating Companies are presented as discontinued operations for all periods as we do not expect to have any continuing involvement with these entities following the disposal. See Note 2, Discontinued Operations, for further information. | |||||||||
Going Concern and Basis of Presentation | |||||||||
As noted above, the Company’s Board of Directors approved a dissolution and liquidation of the Company, pursuant to its Plan of Dissolution, which is subject to stockholder approval. If this proposal is approved by the Company’s stockholders, the Company intends to distribute to its stockholders available cash other than as may be required to pay or make reasonable provision for known and potential claims and obligations of the Company. The dissolution proposal also contemplates a further, orderly wind-up of the Company’s business and operations and the filing of a Certificate of Dissolution, among other matters. | |||||||||
The Financial Accounting Standards Board Accounting Standards Update (ASU) No. 2013-07, Presentation of Financial Statements (Topic 205) – Liquidation Basis of Accounting, clarifies when an entity should apply the liquidation basis of accounting. In addition, the guidance provides principles for recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. ASU 2013-07 requires an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). ASU 2013-07 requires financial statements prepared using the liquidation basis of accounting to present relevant information about the entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under GAAP but that it expects to either sell in liquidation or use in settling liabilities. An entity should recognize and measure its liabilities in accordance with GAAP that otherwise applies to those liabilities. The entity should not anticipate that it will be legally released from being the primary obligor under those liabilities, either judicially or by creditors. The entity is also required to accrue and separately present the costs that it expects to incur and the income it expects to earn during the expected duration of the liquidation, including any costs associated with sale or settlement of those assets and liabilities. ASU 2013-07 also requires disclosure about an entity’s plan for liquidation, the methods and significant assumptions used to measure assets and liabilities, the type and amount of costs and income accrued, and the expected duration of the liquidation process. | |||||||||
These financial statements have been prepared on a going concern basis, as required by accounting principles generally accepted in the United States of America (“GAAP”). As noted above liquidation basis of accounting is only appropriate to the extent liquidation is imminent. In order to meet this criteria, among other factors, the plan for dissolving the Company, which would be followed by liquidation must be approved by the person or persons with the authority to make such a plan effective, which in this instance, is the Company’s stockholders. ASU 2013-07 is not applicable to the Company’s financial statements, as the Company’s proposed dissolution and liquidation, discussed above, requires the affirmative vote from the holders of a majority of its outstanding stock. Therefore liquidation is not imminent as of March 31, 2015 or the date of this filing. | |||||||||
If the plan of dissolution is approved by Company stockholders at the Stockholders Meeting, currently scheduled for June 25, 2015, the Company would then prospectively prepare its financial statements on a liquidation basis of accounting. | |||||||||
Basis of Presentation | |||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and therefore do not include all information and footnotes necessary for a complete presentation of the financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). The year-end balance sheet was derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements do, however, reflect all adjustments, consisting of only normal recurring adjustments, which are, in the opinion of management, necessary to state fairly the financial position as of March 31, 2015 and the results of operations and cash flows for the related interim periods ended March 31, 2015, and 2014. However, these results are not necessarily indicative of results for any other interim period or for the year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on March 31, 2015. As noted above the Company’s operating Companies are classified as held for sale as of March 31, 2015. The results of the Operating Companies are presented as discontinued operations for all periods. Unless otherwise noted, all footnote disclosures relate to discontinued operations. | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. | |||||||||
Assets Held for Sale | |||||||||
The Company considers a disposal group to be an asset held for sale when all of the following criteria are met: | |||||||||
● | management commits to a plan to sell the property; | ||||||||
● | it is unlikely that the disposal plan will be significantly modified or discontinued; | ||||||||
● | the property is available for immediate sale in its present condition | ||||||||
● | actions required to complete the sale of the property have been initiated; | ||||||||
● | sale of the property is probable, we expect the completed sale will occur within one year; and | ||||||||
● | the property is actively being marketed for sale at a price that is reasonable given its current market value. | ||||||||
Upon designation as an asset held for sale, we record the carrying value of the disposal group at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and cease depreciation. | |||||||||
Comprehensive Loss | |||||||||
Comprehensive loss includes all changes in equity during a period except those that resulted from investments by or distributions to the Company’s stockholders. Other comprehensive income (loss) refers to revenues, expenses, gains and losses that, under GAAP, are included in comprehensive loss, but excluded from net income (loss), as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income (loss) consists of foreign currency translation adjustments. | |||||||||
Product Warranty Liabilities | |||||||||
Generally, the Company’s products carry a standard one-year, limited parts and labor warranty. In certain circumstances, the Company provides a two-year, limited parts and labor warranty on communications test instruments and network access products. The Company offers extended warranties beyond two years for an additional cost to its customers. Products returned under warranty typically are tested and repaired or replaced at the Company’s option. Historically, the Company has not experienced significant warranty costs or returns. | |||||||||
The Company records a liability for estimated costs that it expects to incur under the basic limited warranties when product revenue is recognized. Factors affecting the warranty liability include the number of units sold, historical and anticipated rates of claim and costs per claim. The Company periodically assesses the adequacy of its warranty liability accrual based on changes in these factors. | |||||||||
Loss per Share from Discontinued and Continuing Operations | |||||||||
Basic loss per share from continuing operations is computed by dividing net loss from continuing operations by the weighted average common shares outstanding during a period. Diluted loss per share from continuing operations is based on the treasury stock method and includes the dilutive effect of stock options and warrants outstanding during the period. Common share equivalents have been excluded where their inclusion would be anti-dilutive. As a result of the losses from continuing operations incurred by the Company for the three months ended March 31, 2015 and 2014, the potentially dilutive common shares have been excluded from the loss per share computation because their inclusion would have been anti-dilutive. The following table illustrates the computation of basic and diluted loss per share from continuing operations (in thousands, except per share amounts): | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
NUMERATOR: | |||||||||
Net income/(loss) from discontinued operations | $ | 518 | $ | (5 | ) | ||||
Net loss from continuing operations | (694 | ) | (780 | ) | |||||
Net loss | $ | (176 | ) | $ | (785 | ) | |||
DENOMINATOR: | |||||||||
Basic weighted average common shares outstanding | 10,813 | 10,715 | |||||||
Diluted weighted average common shares outstanding | 10,813 | 10,715 | |||||||
Earnings/(Loss) per share: | |||||||||
Basic and Diluted | |||||||||
Discontinued operations | $ | 0.05 | $ | - | |||||
Continuing Operations | $ | (0.06 | ) | $ | (0.07 | ) | |||
Total | $ | (0.01 | ) | $ | (0.07 | ) | |||
The following table shows the common stock equivalents that were outstanding as of March 31, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per share because the options’ or warrants’ exercise price was greater than the average market price of the common shares, and therefore, the effect would have been anti-dilutive: | |||||||||
Number of | Range of | ||||||||
Shares | Exercise Price | ||||||||
Per Share | |||||||||
Anti-dilutive common stock options: | |||||||||
As of March 31, 2015 | 304,008 | $0.55 – $7.50 | |||||||
As of March 31, 2014 | 309,342 | $0.55 – $7.50 | |||||||
Only 50,000 of the options in issue at March 31, 2015 and March 31, 2014 were at an issue price below $1.50. | |||||||||
Revenue Recognition | |||||||||
The Company derives revenues from sales of electronic devices and communications equipment products. The Company’s sales are based upon written agreements or purchase orders that identify the type and quantity of the items being purchased and the purchase price. | |||||||||
Communications Equipment- The Company recognizes revenues from its communications equipment business segment based in France at the point of shipment of those products. An estimate of warranty cost is recorded at the time the revenue is recognized. Customer discounts are included in the product price list provided to the customer. Product returns are infrequent and require prior authorization because sales are final and the Company tests its products for quality prior to shipment to ensure products meet the specifications of the binding purchase orders under which those products are shipped. Normally, when a customer requests and receives authorization to return a product, the request is accompanied by a purchase order for a repair or for a replacement product for which the customer pays. | |||||||||
Electronic Devices- The Company’s subsidiaries in England comprise the electronic devices segment of the business. Revenue recognition for products and services provided by the Company’s subsidiaries in England depends upon the type of contract involved. Engineering/design services contracts generally entail design and production of a prototype over a term of up to several years, with revenue recognized over the term of the contract on a percentage of completion basis. Production contracts provide for a specific quantity of products to be produced over a specific period of time. Customers issue binding purchase orders or enter into binding agreements for the products to be produced. The Company recognizes revenues on these orders as the products are shipped. Returns are infrequent and permitted only with prior authorization because these products are custom made to order based on binding purchase orders and are quality tested prior to shipment. An estimate of warranty cost is recorded at the time revenue is recognized. The Company offers extended warranty contracts for an additional cost to its customers, which are recognized ratably over the term of the extended warranty contract. | |||||||||
Revenues from services such as repairs and modifications are recognized when the service is completed and invoiced. For repairs that involve shipment of a repaired product, the Company recognizes repair revenues when the product is shipped back to the customer. Service revenues contribute less than 5% of total revenue and, therefore, are considered to be immaterial to overall financial results. | |||||||||
Foreign Currency Instruments | |||||||||
The Company evaluates the impact of currency fluctuations on a periodic basis and, from time to time, participates in currency hedging activities when the need arises. The Company currently uses foreign currency forward contracts, which do not meet hedge accounting requirements, to manage currency exposures related to foreign operation sales in U.S. dollars. These instruments are generally short-term in nature, with typical maturities of less than one year, and are subject to fluctuations in foreign exchange rates. The Company adjusts the value of the hedging instruments at the end of the reporting period to reflect the market value of the instrument. |
Discontinued_Operations_And_As
Discontinued Operations And Assets Held For Sale | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Discontinued Operations And Assets Held For Sale | NOTE 2 — DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | ||||||||
As noted above at March 31, 2015 the Company had announced that it intended to dispose of both its operating segments. In accordance with the criteria specified in ASC 360 these assets and the operations are reported as discontinued operations and are classified as assets held for sale. | |||||||||
The table below sets out the assets which are held for sale at March 31, 2015 and the comparable amounts at December 31, 2014. | |||||||||
Reconciliation of major classes of assets included as held for sale (in thousands) is as follows: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
ASSETS HELD FOR SALE | |||||||||
Carrying amounts of major classes of assets included as part of discontinued operations | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 1,396 | $ | 2,109 | |||||
Accounts receivable, net of allowances for doubtful accounts of $99 at March 31, 2015 and $109 at December 31, 2014 | 4,629 | 5,772 | |||||||
Inventories, net | 6,505 | 6,039 | |||||||
Deferred income taxes | 16 | 30 | |||||||
Prepaid and other current assets | 964 | 777 | |||||||
Total current assets in operations held for sale as discontinued operations | 13,510 | 14,727 | |||||||
Property, plant and equipment, net | 4,050 | 4,385 | |||||||
Goodwill | 4,744 | 4,980 | |||||||
Intangible assets other than goodwill, net | 349 | 367 | |||||||
Deferred tax assets | 39 | 25 | |||||||
Other assets | 125 | 96 | |||||||
Total assets of the disposal group held for sale in the balance sheet | $ | 22,817 | $ | 24,580 | |||||
Carrying amounts of major classes of liabilities included as part of discontinued operations | |||||||||
LIABILITIES | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 2,214 | $ | 3,549 | |||||
Accrued expenses | 5,250 | 4,189 | |||||||
Lines of credit | 135 | 709 | |||||||
Current portion of long-term debt | 743 | 776 | |||||||
Income taxes payable | 370 | 241 | |||||||
Other current liabilities | - | - | |||||||
Total current liabilities held for sale included as part of discontinued operations | 8,712 | 9,464 | |||||||
Long-term debt | 3,058 | 3,423 | |||||||
Deferred income taxes | 28 | - | |||||||
Other liabilities | 509 | 577 | |||||||
Total liabilities of the disposal group classified as held for sale in the balance sheet | 12,307 | 13,464 | |||||||
The following table summarizes the results of discontinued operations for the periods indicated (in thousands). | |||||||||
Major classes of line items constituting pretax profit of discontinued operations | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales | $ | 8,380 | $ | 7,757 | |||||
Cost of sales | 5,570 | 5,758 | |||||||
Gross profit | 2,810 | 1,999 | |||||||
Operating expenses: | |||||||||
Selling, general and administrative | 1,806 | 1,575 | |||||||
Engineering and product development | 283 | 316 | |||||||
Total operating expenses of discontinued operations | 2,089 | 1,891 | |||||||
Income from discontinued operations | 721 | 108 | |||||||
Other income (expense) of discontinued operations: | |||||||||
Interest expense | (62 | ) | (77 | ) | |||||
Other, net | 172 | (9 | ) | ||||||
Total other expense, net | 110 | (86 | ) | ||||||
Income before income taxes on discontinued operations | 831 | 22 | |||||||
Income tax expense | 313 | 27 | |||||||
Net profit/(loss) on discontinued operations, presented in the statement of comprehensive loss | 518 | (5 | ) |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2015 | |
Liquidity | |
Liquidity | NOTE 3 — LIQUIDITY |
The Company’s liquidity is closely monitored by management. The Company uses cash flow forecasting linked to production forecasts and existing and projected credit and bank facilities, to ensure there are sufficient resources to fulfil its short term needs and strategic plans. At March 31, 2015, the Company had a three-year term loan in the U.K. with Lloyds Bank on which the balance reduces each month until it is extinguished in April 2017. The original loan was for $1.8 million and at March 31, 2015, the balance outstanding was $1.1 million. This loan has a covenant that links to the net worth of the UK holding company. The Company was in compliance with the covenants existing at both March 31, 2015 and December 31, 2014. | |
Short-term credit facilities are heavily dependent upon the sales and underlying profitability of the Company’s subsidiaries. Credit facilities for the operating subsidiaries are a function of accounts receivable. There are no major capital expenditure plans which will absorb working capital and management considers that the current level of working capital is adequate for the Company’s current requirements. The majority of the Company’s cash is held by its foreign subsidiaries. The net worth covenant which pertains to the Lloyds Bank loan, described above, imposes practical limitations on the amounts that may be repatriated for use in paying corporate expenses and paying corporate debt. The overseas companies pay management charges to the parent Company for management services and brand name use and also pay dividends if and when appropriate. | |
As a result of the combination of forecasted cash flows from operations and existing financing arrangements, the Company believes that as a stand-alone business it has sufficient funding to support its working capital requirements during the next 12 months. The Company has a substantial backlog as of March 31, 2015 and May 12, 2015 and the Company continues to experience good booking levels to support future shipments. In order to support future expected growth, the Company plans to reinvest a substantial amount of cash from operations back into the business for inventory purchases, engineering and product development. The Company recognizes the need to closely manage cash from operations to meet the operational needs of the business and satisfy near-term debt service obligations. The Company’s ability to support its business plan is dependent upon its ability to achieve profitable operations, manage costs and satisfy long-term debt service obligations. Taking these factors into consideration, management believes the Company will be able to satisfy its long-term debt service obligations for the next twelve months from the date of issuance of these financial statements, and meet its short term obligations and commitments. As explained above, since the year end the Company has agreed to sell its electronic devices segment for a gross sale price of $22 million. These proceeds will be reduced by the requirement to repay debt and settle other liabilities. This sale and plan for a subsequent liquidation dividend to shareholders requires shareholder approval. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | ||
Mar. 31, 2015 | |||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock-Based Compensation | NOTE 4 — STOCK-BASED COMPENSATION | ||
The Company has two stock option plans which, continue to be available and these are described more fully in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014: | |||
● | Amended and Restated 2000 Stock Option Plan; and | ||
● | 2007 Stock Incentive Plan. | ||
The Company’s board of directors (the “Board”) does not intend to issue any additional options under the Amended and Restated 2000 Stock Option Plan. | |||
Total stock-based compensation expense included in wages, salaries and related costs was $5,000 for the three months ended March 31, 2015 and $5,000 for the three months ended March 31, 2014. These compensation expenses were charged to selling, general and administrative expenses. As of March 31, 2015 and 2014, the Company had no unrecognized compensation expense related to stock option grants. 6,000 units of restricted stock were awarded under the 2007 Stock Incentive Plan to the members of the Board during the three months ended March 31, 2015. |
Operating_Segments
Operating Segments | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Operating Segments | NOTE 5 — OPERATING SEGMENTS | ||||||||
The Company has two operating segments: electronic devices and communications equipment, both of which are included within discontinued operations. The electronic devices segment manufactures and markets electronic power supplies, radio frequency (’“RF”’) and microwave devices and subsystem assemblies. The electronic devices segment consists of the Company’s two electronic device subsidiaries located in England, Pascall Electronics Limited (“Pascall”) and XCEL Power Systems Limited (“XCEL”), both of which offer the same or similar products to the same or similar customers. The communications equipment segment designs, manufactures and distributes network access products and timing and synchronization products. The communications equipment segment consists of CXR Anderson Jacobson (“CXR AJ”), which is located in France. Both segments sell primarily in the U.S. and European markets, but they have distinctly different customers, design and manufacturing processes and marketing strategies. Each segment has discrete financial information and a separate management structure. | |||||||||
The Company evaluates performance based upon contribution margin of the segments and also upon profit or loss from operations before income taxes exclusive of nonrecurring gains and losses. The Company accounts for inter-segment sales at pre-determined prices negotiated between the individual segments. | |||||||||
Selected financial data for each of the Company’s two operating segments, both of which are held for sale at March 31, 2015, reconciled to the consolidated totals is shown below (in thousands): | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales | |||||||||
Electronic devices | $ | 6,285 | $ | 5,162 | |||||
Communications equipment | 2,095 | 2,595 | |||||||
Total net sales | $ | 8,380 | $ | 7,757 |
Accounts_Receivable
Accounts Receivable | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Accounts Receivable | NOTE 6 — ACCOUNTS RECEIVABLE | ||||||||
The Company’s accounts receivable result from sales to a broad customer base. The Company extends credit to its customers based upon an evaluation of the customer’s financial condition and credit history and generally does not require collateral. Accounts receivable are generally due within 30 days in the Company’s U.S. and France operations and 60 days in its England operations and are stated net of an allowance for doubtful accounts. Provisions for uncollectible accounts are made based on the Company’s specific assessment of the collectability of all past due accounts. Credit losses are provided for in the financial statements and consistently have been within management’s expectations. The Company carries insurance to cover accounts receivable derived from export sales from the United Kingdom. There was one customer which accounted for 12% of total sales in the quarter to March 31, 2015, and this customer accounted for $288,000 of accounts receivable at the period end. At May 8, 2015 $59,000 of this sum remained unpaid; this payment schedule is in accordance with the Company’s normal terms of business with this customer. The same customer represented ten percent or more of the Company’s total net sales during three months ended March 31, 2014. | |||||||||
The activity in the allowance for bad debts and doubtful accounts was as follows: | |||||||||
2015 | 2014 | ||||||||
Opening balance at December 31, | $ | 109 | $ | 70 | |||||
Additional provision for bad debts in three months | 1 | 12 | |||||||
Amounts written off | - | (14 | ) | ||||||
Amounts subsequently recovered | (3 | ) | - | ||||||
Translation adjustment | (8 | ) | - | ||||||
Closing balance at March 31 | $ | 99 | $ | 68 | |||||
All of the balances and movements in the above table relate to the segments and components held for sale at March 31, 2015 and March 31, 2014. |
Inventories
Inventories | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | NOTE 7 — INVENTORIES | ||||||||
Inventories are stated at the lower of cost (first-in, first-out method) or market (net realizable value) and consisted of the following (in thousands): | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Gross Inventory | |||||||||
Raw materials | $ | 5,520 | $ | 5,896 | |||||
Work-in-process | 2,054 | 1,703 | |||||||
Finished goods | 2,279 | 1,839 | |||||||
Total gross inventories | $ | 9,853 | $ | 9,438 | |||||
Inventory Reserve | |||||||||
Raw materials | $ | 2,554 | $ | 2,582 | |||||
Work-in-process | 438 | 435 | |||||||
Finished goods | 356 | 382 | |||||||
Total reserve | $ | 3,348 | $ | 3,399 | |||||
Net Inventory | |||||||||
Raw materials | $ | 2,966 | $ | 3,314 | |||||
Work-in-process | 1,616 | 1,268 | |||||||
Finished goods | 1,923 | 1,457 | |||||||
Total net inventories | $ | 6,505 | $ | 6,039 | |||||
All of the balances in the above table relate to the segments and components held for sale at March 31, 2015. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, Plant and Equipment | NOTE 8 — PROPERTY, PLANT AND EQUIPMENT | ||||||||
Property, plant and equipment consisted of the following, (in thousands): | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Land and buildings | $ | 2,872 | $ | 3,172 | |||||
Machinery, equipment and fixtures | 2,698 | 2,969 | |||||||
Leasehold improvements | 761 | 740 | |||||||
6,331 | 6,881 | ||||||||
Accumulated depreciation and amortization | (2,281 | ) | (2,496 | ) | |||||
Total property, plant and equipment | $ | 4,050 | $ | 4,385 | |||||
The Company recorded depreciation expense associated with its property, plant and equipment of $0.1 million and $0.1 million for the three months ended March 31, 2015 and 2014, respectively. | |||||||||
All of the balances in the above table relate to the segments and components held for sale at March 31, 2015. |
Goodwill
Goodwill | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill | |||||||||
Goodwill | NOTE 9 — GOODWILL | ||||||||
The following table reflects changes in goodwill balances for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||||
2015 | 2014 | ||||||||
Balance at December 31, | $ | 4,980 | 5,283 | ||||||
Foreign currency translation | (236 | ) | 42 | ||||||
Balance at March 31, | $ | 4,744 | 5,325 | ||||||
The goodwill all relates to the electronic devices segment of the business. This segment is being held for sale at March 31, 2015. |
Intangible_Assets_Other_Than_G
Intangible Assets Other Than Goodwill | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Intangible Assets Other Than Goodwill | NOTE 10 — Intangible Assets Other Than Goodwill | ||||||||
The following table reflects changes in intangible assets (other than goodwill), balances for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||||
2015 | 2014 | ||||||||
Balance at December 31, | $ | 367 | 457 | ||||||
Amortization | - | (34 | ) | ||||||
Foreign currency translation | (18 | ) | 3 | ||||||
Balance at March 31 | $ | 349 | 426 | ||||||
The intangible assets constitute trademarks, trade names and technology acquired. At March 31, 2015 all the intangible assets were considered to have indefinite lives. | |||||||||
All of the balances and movements in the above table relate to the segments and components held for sale at March 31, 2015. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11— INCOME TAXES |
The Company files a consolidated U.S. federal income tax return. State tax returns in the state jurisdictions of California, Texas, Pennsylvania and New Jersey are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its domestic subsidiaries. Additionally, the Company’s subsidiaries file tax returns in England and France. The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate adjusted for certain discreet items for the full fiscal year. Cumulative adjustments to the Company’s estimate are recorded in the interim period in which a change in the estimated annual effective rate is determined. | |
The effective tax rate is subject to significant volatility on a consolidated basis, because the profits of the Company’s subsidiaries in England are subject to income tax at the local statutory rate of 23% and the Company’s subsidiary in France is subject to income tax at the local statutory rate of 33%. The tax loss carry-forwards of the U.S. entities are not available for offset against the profits of the overseas subsidiaries. The Company has minimal tax liabilities in the U.S. because it has not generated taxable profits in the United States in the period. The tax charges in the three months ended March 31, 2015 and the three months ended March 31, 2014, are entirely attributable to the taxable profits generated by the Company’s U.K. subsidiaries. In the three months ended March 31, 2015 the UK subsidiaries generated a profit after interest of $1.3 million. The first quarter profits generated in the UK in 2014 were less than $0.1 million. | |
The Company’s business is subject to regulation under a wide variety of United States federal, state and foreign tax laws, regulations and policies. The majority of the Company’s foreign subsidiaries have earnings and profits that are reinvested indefinitely. However, the foreign subsidiaries have previously issued guarantees on a financing agreement held by the Company and, as a result, under Internal Revenue Code Section 956, have been deemed to have distributed these earnings to fund U.S. operations. This has resulted in U.S. federal taxable income and an increase in U.S. tax liability, which has been reduced through utilization of available net operating loss carry-forwards and foreign tax credits. The Company has utilized a significant portion of its net operating losses available to be carried forward into future periods and, as a result, income from operations and/or gain on sales of assets could result in tax obligations. | |
As of March 31, 2015, the Company had not recorded any net unrecognized tax benefits. The Company currently has no open matters with tax authorities nor is it engaged in an examination by any tax authority. The Company recognizes interest and penalties related to uncertain tax positions in interest expense and selling, general and administrative expense, respectively, in the condensed consolidated statements of operations and comprehensive income. No interest or penalties were recognized during the three months ended March 31, 2015. As of March 31, 2015, the Company had no accrual for interest or penalties. | |
The Company is no longer subject to United States federal and state tax examinations for years before 2010 and 2009 respectively, and is no longer subject to tax examinations for the United Kingdom for years prior to 2010, and for France for years prior to 2010. |
Financing_Arrangements
Financing Arrangements | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Financing Arrangements | NOTE 12 — FINANCING ARRANGEMENTS | ||||||||
The Company has a variety of debt and credit facilities to satisfy the financing requirements of its operations and the countries within which it operates. These arrangements are tabulated below. | |||||||||
All amounts are in $ thousands | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Lines of credit | |||||||||
Lloyds TSB Commercial Finance | 135 | 328 | |||||||
FACTOCIC | - | 381 | |||||||
Lines of credit | $ | 135 | $ | 709 | |||||
31-Mar-15 | 31-Dec-14 | ||||||||
Long-term debt | |||||||||
Lloyds term loan | 1,123 | 1,316 | |||||||
Lloyds Mortgage | 1,942 | 2,056 | |||||||
BPIFrance loan | 217 | 243 | |||||||
Capital lease obligations | 519 | 584 | |||||||
3,801 | 4,199 | ||||||||
Current portion of long-term debt | (743 | ) | (776 | ) | |||||
Long-term debt | $ | 3,058 | $ | 3,423 | |||||
All of the balances in the above table relate to the segments and components held for sale at March 31, 2015. Under the terms of the agreement for the sale of the electronic devices segment, all debt in the UK subsidiaries will be repaid prior to the closing of the transaction. | |||||||||
Details of the borrowings set out in the table above are explained below. | |||||||||
Lloyds TSB Commercial Finance | |||||||||
On August 31, 2010, two of the Company’s UK subsidiaries, Pascall and XCEL, each entered into a Receivables Finance Agreement with Lloyds TSB Commercial Finance (“Lloyds”) (each, a “Receivables Finance Agreement” and, collectively, the “Receivables Finance Agreements”), pursuant to which Lloyds agreed to provide Pascall and XCEL a credit facility to support their UK operations in the aggregate principal amount of £2.75 million ($4.1 million based on the exchange rate on March 31, 2015), in each case at an advance rate of 88%, a discount charge of 2.5% above the base rate, and a service fee of 0.2%. The Receivables Finance Agreement between Pascall and Lloyds is secured by the All Assets Debenture, dated August 31, 2010, given by Pascall in favor of Lloyds (the “Pascall Debenture”) and the Receivables Finance Agreement between XCEL and Lloyds is secured by the All Assets Debenture, dated August 31, 2010, given by XCEL in favor of Lloyds (the “XCEL Debenture”). The Receivables Finance Agreements bear interest at the prevailing London interbank lending rate (currently 0.5%) plus 2.5% on the outstanding balance which is paid monthly. As of March 31, 2015, outstanding borrowings under the Receivable Finance Agreements were $135,000. | |||||||||
FACTOCIC | |||||||||
On September 20, 2010, the Company’s French subsidiary, CXR AJ, entered into an accounts receivable financing arrangement with FACTOCIC S.A., a subsidiary of CIC Group (“CIC”) (the “CIC Agreement”), pursuant to which CIC agreed to provide CXR AJ a financing arrangement to support its French operations at an advance rate of 90% of presented receivables. The CIC Agreement bears interest at the three month EURIBOR (currently 0.5%) plus 1.4%. As of March 31, 2015, CXR AJ had no outstanding borrowings under the CIC Agreement. | |||||||||
Lloyds TSB Term Loan | |||||||||
On April 1, 2014, the Company’s UK subsidiary, EEL, entered a three year loan agreement with Lloyds Bank of £1.1 million (approximately $1.6 million, using the exchange rate at March 31, 2015). The loan carries a fixed rate of interest of 6.6% per annum and includes a covenant which requires the net worth of EEL, after deducting inter-company balances, to not fall below £2 million (approximately $3.0 million using the exchange rate at March 31, 2015). The value of this net worth covenant increases by approximately $400,000 each calendar year. The Company was in compliance with this loan covenant at December 31, 2014 and at March 31, 2015. As of March 31, 2015, outstanding borrowings under the Lloyds TSB term loan were $1.1 million. | |||||||||
BPIFrance Loan | |||||||||
In March 2014 CXR AJ, the Company’s French operating subsidiary was granted an innovation loan by BPIFrance. The loan was for 200,000 euros (approximately $217,000 using the exchange rate at March 31, 2015) and is specifically for the development of new products and processes. The loan is repayable in 20 quarterly instalments of $10,850 starting in December 2016. The loan is interest free. | |||||||||
Lloyds TSB Property loan secured by Mortgage | |||||||||
On March 4, 2013, the Company’s UK subsidiary, Pascall, entered into a loan agreement with Lloyds Bank for the sum of £1.4 million (approximately $2.1 million at the rate of exchange on March 31, 2015) to purchase the property occupied by Pascall. This loan, which is secured by a mortgage over the property, is repayable over 20 years. Interest is fixed at an annual rate of 4.8% for 15 years. Thereafter the interest reverts to a rate linked to the London Inter-bank lending rate. The loan is secured by a fixed lien over the property and any fixed plant and machinery within the building. The loan agreement contains financial covenants (assessed annually), requiring the loan to value ratio to be a minimum of 80%, the net worth of EEL, the immediate parent company of Pascall, to be at least £4,776,000 and annual retained profits not to fall below £300,000 (approximately $7.1 million and $0.4 million using the exchange rate at March 31, 2015). At December 31, 2014, the Company was in compliance with these covenants as the net worth of EEL, as defined by the loan agreement, was £7.8 million (approximately $11.6 million using the exchange rate at March 31, 3015) and the profit for the year ended December 31, 2014 was £1.5 million (approximately $1.7 million using the exchange rate at March 31, 2015). As at March 31, 2015, the loan balance outstanding was $1.9 million and the property had a carrying value of $2.8 million. At December 31, 2014 the loan balance was $2.1 million and the carrying value of the property was $3.0 million. | |||||||||
Capital Leases | |||||||||
The Company’s UK subsidiaries, Pascall and XCEL, have capital leases relating to capital equipment. The leases generally contain purchase options and expire at various dates through January 31, 2019. Capitalized lease obligations are calculated using interest rates appropriate at the inception of the lease and range from 5% to 8%. Leases are amortized over the lease term using the effective interest method. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 13 — FAIR VALUE MEASUREMENTS |
FASB guidance for fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between three levels of inputs that may be utilized when measuring fair value as follows: | |
Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. | |
Level 2 — Inputs are unadjusted 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, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. | |
Level 3 — Inputs that are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. | |
Cash, accounts receivable, accounts payable and accrued expenses reflected in the unaudited condensed consolidated balance sheets are a reasonable estimate of their fair value due to the short term nature of these instruments. The carrying value of the Company’s borrowings is a reasonable estimate of its fair value as borrowings under the Company’s financing arrangements have variable rates that reflect currently available terms and conditions for similar debt. As of March 31, 2015, the Company did not have any financial assets and liabilities measured at fair value on a recurring basis that would be subject to the disclosure provisions of FASB guidance noted above. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Going Concern and Basis of Presentation | Going Concern and Basis of Presentation | ||||||||
As noted above, the Company’s Board of Directors approved a dissolution and liquidation of the Company, pursuant to its Plan of Dissolution, which is subject to stockholder approval. If this proposal is approved by the Company’s stockholders, the Company intends to distribute to its stockholders available cash other than as may be required to pay or make reasonable provision for known and potential claims and obligations of the Company. The dissolution proposal also contemplates a further, orderly wind-up of the Company’s business and operations and the filing of a Certificate of Dissolution, among other matters. | |||||||||
The Financial Accounting Standards Board Accounting Standards Update (ASU) No. 2013-07, Presentation of Financial Statements (Topic 205) – Liquidation Basis of Accounting, clarifies when an entity should apply the liquidation basis of accounting. In addition, the guidance provides principles for recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. ASU 2013-07 requires an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). ASU 2013-07 requires financial statements prepared using the liquidation basis of accounting to present relevant information about the entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under GAAP but that it expects to either sell in liquidation or use in settling liabilities. An entity should recognize and measure its liabilities in accordance with GAAP that otherwise applies to those liabilities. The entity should not anticipate that it will be legally released from being the primary obligor under those liabilities, either judicially or by creditors. The entity is also required to accrue and separately present the costs that it expects to incur and the income it expects to earn during the expected duration of the liquidation, including any costs associated with sale or settlement of those assets and liabilities. ASU 2013-07 also requires disclosure about an entity’s plan for liquidation, the methods and significant assumptions used to measure assets and liabilities, the type and amount of costs and income accrued, and the expected duration of the liquidation process. | |||||||||
These financial statements have been prepared on a going concern basis, as required by accounting principles generally accepted in the United States of America (“GAAP”). As noted above liquidation basis of accounting is only appropriate to the extent liquidation is imminent. In order to meet this criteria, among other factors, the plan for dissolving the Company, which would be followed by liquidation must be approved by the person or persons with the authority to make such a plan effective, which in this instance, is the Company’s stockholders. ASU 2013-07 is not applicable to the Company’s financial statements, as the Company’s proposed dissolution and liquidation, discussed above, requires the affirmative vote from the holders of a majority of its outstanding stock. Therefore liquidation is not imminent as of March 31, 2015 or the date of this filing. | |||||||||
If the plan of dissolution is approved by Company stockholders at the Stockholders Meeting, currently scheduled for June 25, 2015, the Company would then prospectively prepare its financial statements on a liquidation basis of accounting. | |||||||||
Assets Held for Sale | Assets Held for Sale | ||||||||
The Company considers a disposal group to be an asset held for sale when all of the following criteria are met: | |||||||||
● | management commits to a plan to sell the property; | ||||||||
● | it is unlikely that the disposal plan will be significantly modified or discontinued; | ||||||||
● | the property is available for immediate sale in its present condition | ||||||||
● | actions required to complete the sale of the property have been initiated; | ||||||||
● | sale of the property is probable, we expect the completed sale will occur within one year; and | ||||||||
● | the property is actively being marketed for sale at a price that is reasonable given its current market value. | ||||||||
Upon designation as an asset held for sale, we record the carrying value of the disposal group at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and cease depreciation. | |||||||||
Comprehensive Loss | Comprehensive Loss | ||||||||
Comprehensive loss includes all changes in equity during a period except those that resulted from investments by or distributions to the Company’s stockholders. Other comprehensive income (loss) refers to revenues, expenses, gains and losses that, under GAAP, are included in comprehensive loss, but excluded from net income (loss), as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income (loss) consists of foreign currency translation adjustments. | |||||||||
Product Warranty Liabilities | Product Warranty Liabilities | ||||||||
Generally, the Company’s products carry a standard one-year, limited parts and labor warranty. In certain circumstances, the Company provides a two-year, limited parts and labor warranty on communications test instruments and network access products. The Company offers extended warranties beyond two years for an additional cost to its customers. Products returned under warranty typically are tested and repaired or replaced at the Company’s option. Historically, the Company has not experienced significant warranty costs or returns. | |||||||||
The Company records a liability for estimated costs that it expects to incur under the basic limited warranties when product revenue is recognized. Factors affecting the warranty liability include the number of units sold, historical and anticipated rates of claim and costs per claim. The Company periodically assesses the adequacy of its warranty liability accrual based on changes in these factors. | |||||||||
Loss per Share from Discontinued and Continuing Operations | Loss per Share from Discontinued and Continuing Operations | ||||||||
Basic loss per share from continuing operations is computed by dividing net loss from continuing operations by the weighted average common shares outstanding during a period. Diluted loss per share from continuing operations is based on the treasury stock method and includes the dilutive effect of stock options and warrants outstanding during the period. Common share equivalents have been excluded where their inclusion would be anti-dilutive. As a result of the losses from continuing operations incurred by the Company for the three months ended March 31, 2015 and 2014, the potentially dilutive common shares have been excluded from the loss per share computation because their inclusion would have been anti-dilutive. The following table illustrates the computation of basic and diluted loss per share from continuing operations (in thousands, except per share amounts): | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
NUMERATOR: | |||||||||
Net income/(loss) from discontinued operations | $ | 518 | $ | (5 | ) | ||||
Net loss from continuing operations | (694 | ) | (780 | ) | |||||
Net loss | $ | (176 | ) | $ | (785 | ) | |||
DENOMINATOR: | |||||||||
Basic weighted average common shares outstanding | 10,813 | 10,715 | |||||||
Diluted weighted average common shares outstanding | 10,813 | 10,715 | |||||||
Earnings/(Loss) per share: | |||||||||
Basic and Diluted | |||||||||
Discontinued operations | $ | 0.05 | $ | - | |||||
Continuing Operations | $ | (0.06 | ) | $ | (0.07 | ) | |||
Total | $ | (0.01 | ) | $ | (0.07 | ) | |||
The following table shows the common stock equivalents that were outstanding as of March 31, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per share because the options’ or warrants’ exercise price was greater than the average market price of the common shares, and therefore, the effect would have been anti-dilutive: | |||||||||
Number of | Range of | ||||||||
Shares | Exercise Price | ||||||||
Per Share | |||||||||
Anti-dilutive common stock options: | |||||||||
As of March 31, 2015 | 304,008 | $0.55 – $7.50 | |||||||
As of March 31, 2014 | 309,342 | $0.55 – $7.50 | |||||||
Only 50,000 of the options in issue at March 31, 2015 and March 31, 2014 were at an issue price below $1.50. | |||||||||
Revenue Recognition | Revenue Recognition | ||||||||
The Company derives revenues from sales of electronic devices and communications equipment products. The Company’s sales are based upon written agreements or purchase orders that identify the type and quantity of the items being purchased and the purchase price. | |||||||||
Communications Equipment- The Company recognizes revenues from its communications equipment business segment based in France at the point of shipment of those products. An estimate of warranty cost is recorded at the time the revenue is recognized. Customer discounts are included in the product price list provided to the customer. Product returns are infrequent and require prior authorization because sales are final and the Company tests its products for quality prior to shipment to ensure products meet the specifications of the binding purchase orders under which those products are shipped. Normally, when a customer requests and receives authorization to return a product, the request is accompanied by a purchase order for a repair or for a replacement product for which the customer pays. | |||||||||
Electronic Devices- The Company’s subsidiaries in England comprise the electronic devices segment of the business. Revenue recognition for products and services provided by the Company’s subsidiaries in England depends upon the type of contract involved. Engineering/design services contracts generally entail design and production of a prototype over a term of up to several years, with revenue recognized over the term of the contract on a percentage of completion basis. Production contracts provide for a specific quantity of products to be produced over a specific period of time. Customers issue binding purchase orders or enter into binding agreements for the products to be produced. The Company recognizes revenues on these orders as the products are shipped. Returns are infrequent and permitted only with prior authorization because these products are custom made to order based on binding purchase orders and are quality tested prior to shipment. An estimate of warranty cost is recorded at the time revenue is recognized. The Company offers extended warranty contracts for an additional cost to its customers, which are recognized ratably over the term of the extended warranty contract. | |||||||||
Revenues from services such as repairs and modifications are recognized when the service is completed and invoiced. For repairs that involve shipment of a repaired product, the Company recognizes repair revenues when the product is shipped back to the customer. Service revenues contribute less than 5% of total revenue and, therefore, are considered to be immaterial to overall financial results. | |||||||||
Foreign Currency Transactions | Foreign Currency Instruments | ||||||||
The Company evaluates the impact of currency fluctuations on a periodic basis and, from time to time, participates in currency hedging activities when the need arises. The Company currently uses foreign currency forward contracts, which do not meet hedge accounting requirements, to manage currency exposures related to foreign operation sales in U.S. dollars. These instruments are generally short-term in nature, with typical maturities of less than one year, and are subject to fluctuations in foreign exchange rates. The Company adjusts the value of the hedging instruments at the end of the reporting period to reflect the market value of the instrument. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of Basic and Diluted Loss Per Share From Continuing Operations | The following table illustrates the computation of basic and diluted loss per share from continuing operations (in thousands, except per share amounts): | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
NUMERATOR: | |||||||||
Net income/(loss) from discontinued operations | $ | 518 | $ | (5 | ) | ||||
Net loss from continuing operations | (694 | ) | (780 | ) | |||||
Net loss | $ | (176 | ) | $ | (785 | ) | |||
DENOMINATOR: | |||||||||
Basic weighted average common shares outstanding | 10,813 | 10,715 | |||||||
Diluted weighted average common shares outstanding | 10,813 | 10,715 | |||||||
Earnings/(Loss) per share: | |||||||||
Basic and Diluted | |||||||||
Discontinued operations | $ | 0.05 | $ | - | |||||
Continuing Operations | $ | (0.06 | ) | $ | (0.07 | ) | |||
Total | $ | (0.01 | ) | $ | (0.07 | ) | |||
Computation of Diluted Earnings Per Share | the effect would have been anti-dilutive: | ||||||||
Number of | Range of | ||||||||
Shares | Exercise Price | ||||||||
Per Share | |||||||||
Anti-dilutive common stock options: | |||||||||
As of March 31, 2015 | 304,008 | $0.55 – $7.50 | |||||||
As of March 31, 2014 | 309,342 | $0.55 – $7.50 |
Discontinued_Operations_And_As1
Discontinued Operations And Assets Held For Sale (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Discontinued Operations And Assets Held For Sale Tables | |||||||||
Reconciliation of Major Classes of Assets Incluted Held for Sale Balance Sheet | Reconciliation of major classes of assets included as held for sale (in thousands) is as follows: | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
ASSETS HELD FOR SALE | |||||||||
Carrying amounts of major classes of assets included as part of discontinued operations | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 1,396 | $ | 2,109 | |||||
Accounts receivable, net of allowances for doubtful accounts of $99 at March 31, 2015 and $109 at December 31, 2014 | 4,629 | 5,772 | |||||||
Inventories, net | 6,505 | 6,039 | |||||||
Deferred income taxes | 16 | 30 | |||||||
Prepaid and other current assets | 964 | 777 | |||||||
Total current assets in operations held for sale as discontinued operations | 13,510 | 14,727 | |||||||
Property, plant and equipment, net | 4,050 | 4,385 | |||||||
Goodwill | 4,744 | 4,980 | |||||||
Intangible assets other than goodwill, net | 349 | 367 | |||||||
Deferred tax assets | 39 | 25 | |||||||
Other assets | 125 | 96 | |||||||
Total assets of the disposal group held for sale in the balance sheet | $ | 22,817 | $ | 24,580 | |||||
Carrying amounts of major classes of liabilities included as part of discontinued operations | |||||||||
LIABILITIES | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 2,214 | $ | 3,549 | |||||
Accrued expenses | 5,250 | 4,189 | |||||||
Lines of credit | 135 | 709 | |||||||
Current portion of long-term debt | 743 | 776 | |||||||
Income taxes payable | 370 | 241 | |||||||
Other current liabilities | - | - | |||||||
Total current liabilities held for sale included as part of discontinued operations | 8,712 | 9,464 | |||||||
Long-term debt | 3,058 | 3,423 | |||||||
Deferred income taxes | 28 | - | |||||||
Other liabilities | 509 | 577 | |||||||
Total liabilities of the disposal group classified as held for sale in the balance sheet | 12,307 | 13,464 | |||||||
Reconciliation of Major Classes of Assets Incluted Held for Sale Operations | Major classes of line items constituting pretax profit of discontinued operations | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales | $ | 8,380 | $ | 7,757 | |||||
Cost of sales | 5,570 | 5,758 | |||||||
Gross profit | 2,810 | 1,999 | |||||||
Operating expenses: | |||||||||
Selling, general and administrative | 1,806 | 1,575 | |||||||
Engineering and product development | 283 | 316 | |||||||
Total operating expenses of discontinued operations | 2,089 | 1,891 | |||||||
Income from discontinued operations | 721 | 108 | |||||||
Other income (expense) of discontinued operations: | |||||||||
Interest expense | (62 | ) | (77 | ) | |||||
Other, net | 172 | (9 | ) | ||||||
Total other expense, net | 110 | (86 | ) | ||||||
Income before income taxes on discontinued operations | 831 | 22 | |||||||
Income tax expense | 313 | 27 | |||||||
Net profit/(loss) on discontinued operations, presented in the statement of comprehensive loss | 518 | (5 | ) |
Operating_Segments_Tables
Operating Segments (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Summary of Net Sales by Geographic Area | Three Months Ended | ||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales | |||||||||
Electronic devices | $ | 6,285 | $ | 5,162 | |||||
Communications equipment | 2,095 | 2,595 | |||||||
Total net sales | $ | 8,380 | $ | 7,757 |
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounts Receivable Tables | |||||||||
Schedule of Allowance for Bad Debts and Doubtful Accounts | The activity in the allowance for bad debts and doubtful accounts was as follows: | ||||||||
2015 | 2014 | ||||||||
Opening balance at December 31, | $ | 109 | $ | 70 | |||||
Additional provision for bad debts in three months | 1 | 12 | |||||||
Amounts written off | - | (14 | ) | ||||||
Amounts subsequently recovered | (3 | ) | - | ||||||
Translation adjustment | (8 | ) | - | ||||||
Closing balance at March 31 | $ | 99 | $ | 68 |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventories | Inventories are stated at the lower of cost (first-in, first-out method) or market (net realizable value) and consisted of the following (in thousands): | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Gross Inventory | |||||||||
Raw materials | $ | 5,520 | $ | 5,896 | |||||
Work-in-process | 2,054 | 1,703 | |||||||
Finished goods | 2,279 | 1,839 | |||||||
Total gross inventories | $ | 9,853 | $ | 9,438 | |||||
Inventory Reserve | |||||||||
Raw materials | $ | 2,554 | $ | 2,582 | |||||
Work-in-process | 438 | 435 | |||||||
Finished goods | 356 | 382 | |||||||
Total reserve | $ | 3,348 | $ | 3,399 | |||||
Net Inventory | |||||||||
Raw materials | $ | 2,966 | $ | 3,314 | |||||
Work-in-process | 1,616 | 1,268 | |||||||
Finished goods | 1,923 | 1,457 | |||||||
Total net inventories | $ | 6,505 | $ | 6,039 |
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Summary of Property, Plant and Equipment | Property, plant and equipment consisted of the following, (in thousands): | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Land and buildings | $ | 2,872 | $ | 3,172 | |||||
Machinery, equipment and fixtures | 2,698 | 2,969 | |||||||
Leasehold improvements | 761 | 740 | |||||||
6,331 | 6,881 | ||||||||
Accumulated depreciation and amortization | (2,281 | ) | (2,496 | ) | |||||
Total property, plant and equipment | $ | 4,050 | $ | 4,385 |
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill Tables | |||||||||
Schedule of Goodwill | The following table reflects changes in goodwill balances for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||
2015 | 2014 | ||||||||
Balance at December 31, | $ | 4,980 | 5,283 | ||||||
Foreign currency translation | (236 | ) | 42 | ||||||
Balance at March 31, | $ | 4,744 | 5,325 |
Intangible_Assets_Other_Than_G1
Intangible Assets Other Than Goodwill (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Schedule of Intangibale Assets | The following table reflects changes in intangible assets (other than goodwill), balances for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||
2015 | 2014 | ||||||||
Balance at December 31, | $ | 367 | 457 | ||||||
Amortization | - | (34 | ) | ||||||
Foreign currency translation | (18 | ) | 3 | ||||||
Balance at March 31 | $ | 349 | 426 |
Financing_Arrangements_Tables
Financing Arrangements (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Line of credit | All amounts are in $ thousands | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Lines of credit | |||||||||
Lloyds TSB Commercial Finance | 135 | 328 | |||||||
FACTOCIC | - | 381 | |||||||
Lines of credit | $ | 135 | $ | 709 | |||||
Schedule of Long-Term Debt | 31-Mar-15 | 31-Dec-14 | |||||||
Long-term debt | |||||||||
Lloyds term loan | 1,123 | 1,316 | |||||||
Lloyds Mortgage | 1,942 | 2,056 | |||||||
BPIFrance loan | 217 | 243 | |||||||
Capital lease obligations | 519 | 584 | |||||||
3,801 | 4,199 | ||||||||
Current portion of long-term debt | (743 | ) | (776 | ) | |||||
Long-term debt | $ | 3,058 | $ | 3,423 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Stock options issue | |||
Stock options price per share | $1.50 | $1.50 | |
Service revenue contributed, percentage | 5.00% | ||
EMRISE Electronics Ltd [Member] | |||
Gross pucrchase price | $22,000 | ||
Deposit | $1,300 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Loss Per Share From Continuing Operations (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accounting Policies [Abstract] | ||
Net income/(loss) from discontinued operations | $518 | ($5) |
Net loss from continuing operations | -694 | -780 |
Net loss | ($176) | ($785) |
Basic weighted average common shares outstanding | 10,813 | 10,715 |
Diluted weighted average common shares outstanding | 10,813 | 10,715 |
Discontinued operations | $0.05 | |
Continuing Operations | ($0.06) | ($0.07) |
Total | ($0.01) | ($0.07) |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Computation of Diluted Earnings Per Share (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Anti-dilutive common stock options, Number of Shares | 304,008 | 309,342 |
Maximum [Member] | ||
Anti-dilutive common stock options, Range of Exercise Price Per Share | 0.55 | 7.5 |
Minimum [Member] | ||
Anti-dilutive common stock options, Range of Exercise Price Per Share | 7.5 | 0.55 |
Discountinued_Operations_and_A
Discountinued Operations and Assets Held For Sale - Reconciliation of Major Classes of Assets Incluted Held for Sale Balance Sheet (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Discountinued Operations And Assets Held For Sale - Reconciliation Of Major Classes Of Assets Incluted Held For Sale Balance Sheet Details | ||
Cash and cash equivalents | $1,396 | $2,109 |
Accounts receivable, net of allowances for doubtful accounts of $99 at March 31, 2015 and $109 at December 31, 2014 | 4,629 | 5,772 |
Inventories, net | 6,505 | 6,039 |
Deferred income taxes | 16 | 30 |
Prepaid and other current assets | 964 | 777 |
Total current assets in operations held for sale as discontinued operations | 13,510 | 14,727 |
Property, plant and equipment, net | 4,050 | 4,385 |
Goodwill | 4,744 | 4,980 |
Intangible assets other than goodwill, net | 349 | 367 |
Deferred tax assets | 39 | 25 |
Other assets | 125 | 96 |
Total assets of the disposal group held for sale in the balance sheet | 22,817 | 24,580 |
Accounts payable | 2,214 | 3,549 |
Accrued expenses | 5,250 | 4,189 |
Lines of credit | 135 | 709 |
Current portion of long-term debt | 743 | 776 |
Income taxes payable | 370 | 241 |
Other current liabilities | ||
Total current liabilities held for sale included as part of discontinued operations | 8,712 | 9,464 |
Long-term debt | 3,058 | 3,423 |
Deferred income taxes | 28 | |
Other liabilities | 509 | 577 |
Total liabilities of the disposal group classified as held for sale in the balance sheet | $12,307 | $13,464 |
Discountinued_Operations_and_A1
Discountinued Operations and Assets Held For Sale - Reconciliation of Major Classes of Assets Incluted Held for Sale Operations (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Discountinued Operations And Assets Held For Sale - Reconciliation Of Major Classes Of Assets Incluted Held For Sale Operations Details | ||
Net sales | $8,380 | $7,757 |
Cost of sales | 5,570 | 5,758 |
Gross profit | 2,810 | 1,999 |
Selling, general and administrative | 1,806 | 1,575 |
Engineering and product development | 283 | 316 |
Total operating expenses of discontinued operations | 2,089 | 1,891 |
Income from discontinued operations | 721 | 108 |
Interest expense | -62 | -77 |
Other, net | 172 | -9 |
Total other expense, net | 110 | -86 |
Income before income taxes on discontinued operations | 518 | -5 |
Income tax expense | 313 | 27 |
Net profit/(loss) on discontinued operations, presented in the statement of comprehensive loss | $518 | ($5) |
Liquidity_Details_Narrative
Liquidity (Details Narrative) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
EMRISE Electronics Ltd [Member] | |
Gross pucrchase price | $22,000 |
EMRISE Electronics Ltd [Member] | Electronic Devices Segment [Member] | |
Gross pucrchase price | 22,000 |
Lloyds TSB [Member] | |
Loan term | 3 years |
Long term bank facility | 1,800 |
Long term bank facility, extension period | 2017-04 |
Lloyds TSB [Member] | United Kingdom, Pounds [Member] | |
Long term bank facility | $1,100 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details Narrative) (USD $) | 3 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Stock based compensation expense | $11 | $5 | |
Compensation expense | |||
2007 Stock Incentive Plan [Member] | |||
Restricted stock award number of shares | 6,000 |
Operating_Segments_Summary_of_
Operating Segments - Summary of Net Sales by Geographic Area (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Total Net sales | $8,380 | $7,757 |
Electronic Devices [Member] | ||
Total Net sales | 6,285 | 5,162 |
Communications Equipment [Member] | ||
Total Net sales | $2,095 | $2,595 |
Accounts_Receivable_Details_Na
Accounts Receivable (Details Narrative) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Percentage of sale accounted | 10.00% |
Sum remained unpaid | $59 |
Customer [Member] | |
Percentage of sale accounted | 12.00% |
Accounts receivable | $288 |
Accounts_Receivable_Schedule_o
Accounts Receivable - Schedule of Allowance for Bad Debts and Doubtful Accounts (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accounts Receivable - Schedule Of Allowance For Bad Debts And Doubtful Accounts Details | ||
Opening balance | $109 | $70 |
Additional provision for bad debts in three months | 1 | 12 |
Amounts written off | -14 | |
Amounts subsequently recovered | -3 | |
Translation adjustment | -8 | |
Closing balance | $99 | $68 |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventory (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $5,520 | $5,896 |
Work-in-process | 2,054 | 1,703 |
Finished goods | 2,279 | 1,839 |
Total gross inventories | 9,853 | 9,438 |
Raw materials | 2,554 | 2,582 |
Work-in-process | 438 | 435 |
Finished goods | 356 | 382 |
Total reserve | 3,348 | 3,399 |
Raw materials | 2,966 | 3,314 |
Work-in-process | 1,616 | 1,268 |
Finished goods | 1,923 | 1,457 |
Total net inventories | $6,505 | $6,039 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details Narrative) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $100 | $100 |
Property_Plant_and_Equipment_S
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Abstract] | ||
Land and buildings | $2,872 | $3,172 |
Machinery, equipment and fixtures | 2,698 | 2,969 |
Leasehold improvements | 761 | 740 |
Property, plant and equipment, gross | 6,331 | 6,881 |
Accumulated depreciation and amortization | -2,281 | -2,496 |
Total property, plant and equipment | $4,050 | $4,385 |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets - Schedule of Goodwill (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance at December 31, | $4,980 | $5,283 |
Foreign currency translation | -236 | 42 |
Balance at March 31, | $4,744 | $5,325 |
Intangible_Assets_Other_Than_G2
Intangible Assets Other Than Goodwill - Schedule of Intangibale Assets (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Intangible Assets Other Than Goodwill - Schedule Of Intangibale Assets Details | ||
Balance at December 31, | $457 | $367 |
Amortization | -34 | |
Foreign currency translation | 3 | -18 |
Balance at March 31 | $426 | $349 |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Income tax penalties and interest expense | $0 |
Income tax accrual interest penalties | 0 |
United Kingdom [Member] | |
Income tax, federal statutory rate | 23.00% |
Generated a profit after interest | 1,300 |
Profit generated | $100 |
France [Member] | |
Income tax, federal statutory rate | 33.00% |
Financing_Arrangements_Details
Financing Arrangements (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | |||||
In Thousands, unless otherwise specified | Aug. 31, 2010 | Sep. 20, 2010 | Mar. 31, 2015 | Dec. 31, 2014 | Apr. 01, 2014 | Mar. 31, 2014 | Mar. 04, 2013 |
Minimum capital lease range percentage | 5.00% | ||||||
Maximum capital lease range percentage | 8.00% | ||||||
Receivable Finance Agreements [Member] | |||||||
Outstanding borrowings | $135 | $381 | |||||
Lloyds TSB Commercial Finance [Member] | |||||||
Service fees percentage for line of credit | 0.20% | ||||||
Discount percentage on line of credit | 2.50% | ||||||
Lloyds TSB Commercial Finance [Member] | United Kingdom [Member] | |||||||
Percentage of advance rate for line of credit | 88.00% | ||||||
Lloyds TSB Commercial Finance [Member] | Receivable Finance Agreements [Member] | |||||||
Line of credit facility | 4,100 | ||||||
Lloyds TSB Commercial Finance [Member] | Receivable Finance Agreements [Member] | United Kingdom, Pounds [Member] | |||||||
Line of credit facility | 2,750 | ||||||
FACTOCIC [Member] | |||||||
Percentage of advance rate for line of credit | 90.00% | ||||||
Debt interest percentage | 1.40% | ||||||
FACTOCIC [Member] | Eurodollar [Member] | |||||||
Debt interest percentage | 0.50% | ||||||
Lloyds TSB Term Loan [Member] | |||||||
Line of credit facility | 1,600 | ||||||
Outstanding borrowings | 1,100 | ||||||
Covenant deducting intercompany balance value | 3,000 | ||||||
Debt interest percentage | 6.60% | ||||||
Increase in loan covenant value | 400,000 | ||||||
Lloyds TSB Term Loan [Member] | Eurodollar [Member] | |||||||
Line of credit facility | 1,100 | ||||||
Covenant deducting intercompany balance value | 2,000 | ||||||
BPI France Loan [Member] | |||||||
Line of credit facility | 217 | ||||||
BPI France Loan [Member] | Eurodollar [Member] | |||||||
Line of credit facility | 200 | ||||||
Loan payable | 10,850 | ||||||
Lloyds TSB Property Loan Secured by Mortgage [Member] | |||||||
Outstanding borrowings | 2,100 | ||||||
Property carry value | 3,000 | ||||||
Lloyds TSB Property Loan Secured by Mortgage [Member] | Eurodollar [Member] | |||||||
Line of credit facility | 1,400 | ||||||
Loan payable | 7,800 | ||||||
Parent company least value | 4,776 | ||||||
Annual retained profits | 3,000 | ||||||
Profit | 1,500 | ||||||
Lloyds TSB Property Loan Secured By Mortgage [Member] | |||||||
Line of credit facility | 2,100 | ||||||
Outstanding borrowings | 1,900 | ||||||
Debt interest percentage | 48.00% | ||||||
Loan payable | 11,600 | ||||||
Minimum percentage of loan value ratio | 80.00% | ||||||
Annual retained profits | 7,100 | ||||||
Minimum annual retained profits exchange rate | 400 | ||||||
Profit | 1,700 | ||||||
Property carry value | $2,800 |
Financing_Arrangements_Schedul
Financing Arrangements - Schedule of Line of credit (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Lines of credit | $135 | $709 |
Lloyds TSB Commerical Finance [Member] | ||
Lines of credit | 135 | 328 |
FACTOCIC [Member] | ||
Lines of credit | $381 |
Financing_Arrangements_Schedul1
Financing Arrangements - Schedule of Long-Term Debt (Details) | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | USD ($) | EUR (€) | USD ($) | EUR (€) | Lloyds TSB Term Loan [Member] | Lloyds TSB Term Loan [Member] | Lloyds Mortagage [Member] | Lloyds Mortagage [Member] | BPI France Loan [Member] | BPI France Loan [Member] |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||
Capital lease obligations | € 519 | € 4,199 | $1,123 | $1,316 | $1,942 | $2,056 | $217 | $243 | ||
Current portion of long-term debt | -743 | -776 | ||||||||
Long-term debt | $3,058 | $3,423 | $1,316 |