Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Sep. 05, 2019 | Dec. 31, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | ALLIED HEALTHCARE PRODUCTS INC | ||
Entity Central Index Key | 0000874710 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Filer Category | Non-accelerated Filer | ||
Trading Symbol | AHPI | ||
Entity Common Stock, Shares Outstanding | 4,013,537 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 4,075,176 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No |
STATEMENT OF OPERATIONS
STATEMENT OF OPERATIONS - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
STATEMENT OF OPERATIONS | |||
Net sales | $ 31,381,521 | $ 33,759,953 | $ 33,512,030 |
Cost of sales | 26,342,894 | 27,309,511 | 26,956,340 |
Gross profit | 5,038,627 | 6,450,442 | 6,555,690 |
Selling, general and administrative expenses | 7,812,649 | 8,446,056 | 8,607,584 |
Loss from operations | (2,774,022) | (1,995,614) | (2,051,894) |
Other (income) expenses: | |||
Interest expense | 56,223 | 23,569 | 0 |
Interest income | (138) | (288) | (1,445) |
Legal Settlement | (750,000) | 0 | 0 |
Other, net | 130 | 237 | 1,717 |
Nonoperating Income (Expense) | (693,785) | 23,518 | 272 |
Loss before provision for income taxes | (2,080,237) | (2,019,132) | (2,052,166) |
Provision for income taxes | 29,448 | 173,038 | 36,500 |
Net loss | $ (2,109,685) | $ (2,192,170) | $ (2,088,666) |
Basic loss per share: | $ (0.53) | $ (0.55) | $ (0.52) |
Diluted loss per share: | $ (0.53) | $ (0.55) | $ (0.52) |
Weighted average shares outstanding - Basic | 4,013,537 | 4,013,537 | 4,013,537 |
Weighted average shares outstanding - Diluted | 4,013,537 | 4,013,537 | 4,013,537 |
BALANCE SHEET
BALANCE SHEET - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 195,454 | $ 136,112 |
Accounts receivable, net of allowances of $170,000 | 3,165,289 | 3,747,993 |
Inventories, net | 7,333,095 | 7,830,541 |
Income tax receivable | 12,178 | 12,178 |
Other current assets | 244,908 | 250,605 |
Total current assets | 10,950,924 | 11,977,429 |
Property, plant and equipment, net | 4,001,081 | 4,823,149 |
Deferred income taxes | 501,891 | 520,663 |
Total assets | 15,453,896 | 17,321,241 |
Current liabilities: | ||
Accounts payable | 1,469,232 | 1,473,618 |
Other accrued liabilities | 2,094,312 | 1,850,683 |
Total current liabilities | 3,563,544 | 3,324,301 |
Commitments and contingencies (Notes 4 and 9) | ||
Stockholders' equity: | ||
Preferred stock | 0 | 0 |
Common stock; $0.01 par value; 30,000,000 shares authorized; 5,213,902 shares issued at June 30, 2019 and June 30, 2018; 4,013,537 shares outstanding at June 30, 2019 and June 30, 2018 | 52,139 | 52,139 |
Additional paid-in capital | 48,491,317 | 48,488,220 |
Accumulated deficit | (15,672,316) | (13,562,631) |
Less: treasury stock, at cost; 1,200,365 shares at June 30, 2019 and 2018 | (20,980,788) | (20,980,788) |
Total stockholders' equity | 11,890,352 | 13,996,940 |
Total liabilities and stockholders' equity | 15,453,896 | 17,321,241 |
Series A Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock | $ 0 | $ 0 |
BALANCE SHEET (Parenthetical)
BALANCE SHEET (Parenthetical) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Allowances for accounts receivable (in dollars) | $ 170,000 | $ 170,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 5,213,902 | 5,213,902 |
Common stock, shares outstanding | 4,013,537 | 4,013,537 |
Treasury stock, at cost | 1,200,365 | 1,200,365 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
STATEMENT OF CHANGES IN STOCKHO
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Total |
Beginning Balance at Jun. 30, 2016 | $ 52,139 | $ 48,482,899 | $ (9,281,795) | $ (20,980,788) | $ 18,272,455 |
Stock based compensation | 0 | 2,491 | 0 | 0 | 2,491 |
Net loss | 0 | 0 | (2,088,666) | 0 | (2,088,666) |
Ending Balance at Jun. 30, 2017 | 52,139 | 48,485,390 | (11,370,461) | (20,980,788) | 16,186,280 |
Stock based compensation | 0 | 2,830 | 0 | 0 | 2,830 |
Net loss | 0 | 0 | (2,192,170) | 0 | (2,192,170) |
Ending Balance at Jun. 30, 2018 | 52,139 | 48,488,220 | (13,562,631) | (20,980,788) | 13,996,940 |
Stock based compensation | 0 | 3,097 | 0 | 0 | 3,097 |
Net loss | 0 | 0 | (2,109,685) | 0 | (2,109,685) |
Ending Balance at Jun. 30, 2019 | $ 52,139 | $ 48,491,317 | $ (15,672,316) | $ (20,980,788) | $ 11,890,352 |
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (2,109,685) | $ (2,192,170) | $ (2,088,666) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 822,068 | 931,408 | 1,090,126 |
Stock based compensation | 3,097 | 2,830 | 2,491 |
Provision for doubtful accounts and sales returns and allowances | 19,649 | (12,118) | 10,538 |
Deferred tax provision | 18,772 | 163,100 | 29,201 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 563,055 | (373,437) | 721,486 |
Inventories | 497,446 | 681,413 | 363,316 |
Income tax receivable | 0 | 377 | 0 |
Other current assets | 5,697 | 65,073 | (59,967) |
Accounts payable | (4,386) | 33,215 | (424,200) |
Other accrued liabilities | 243,629 | (159,283) | (331,236) |
Net cash provided by (used in) operating activities | 59,342 | (859,592) | (686,911) |
Cash flows from investing activities: | |||
Capital expenditures | 0 | 0 | (21,048) |
Net cash used in investing activities | 0 | 0 | (21,048) |
Cash flows from financing activities: | |||
Borrowings under revolving credit agreement | 32,176,067 | 14,774,091 | 0 |
Payments under revolving credit agreement | (32,176,067) | (14,774,091) | 0 |
Net cash provided by financing activities | 0 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 59,342 | (859,592) | (707,959) |
Cash and cash equivalents at beginning of year | 136,112 | 995,704 | 1,703,663 |
Cash and cash equivalents at end of year | 195,454 | 136,112 | 995,704 |
Supplemental disclosures of cash flow information: | |||
Income taxes | 10,675 | 9,561 | 7,298 |
Interest | $ 56,223 | $ 23,569 | $ 0 |
Organization
Organization | 12 Months Ended |
Jun. 30, 2019 | |
Organization | |
Organization | 1. Organization Allied Healthcare Products, Inc. (the “Company” or “Allied”) is a manufacturer of respiratory products used in the health care industry in a wide range of hospital and alternate site settings, including post-acute care facilities, home health care and trauma care. The Company’s product lines include respiratory care products, medical gas equipment and emergency medical products. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The significant accounting policies followed by Allied are described below. Use of estimates The policies utilized by the Company in the preparation of the financial statements conform to accounting principles generally accepted in the United States of America, and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. Adoption of new revenue recognition standard In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards require an entity to recognize revenue when control of promised goods or services is transferred to the customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this new standard as of July 1, 2018, by applying the modified-retrospective method to those contracts that were not completed as of that date. The results for reporting periods beginning after July 1, 2018, are presented in accordance with the new standard, although comparative information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. The adoption of this standard did not have a material impact on the amount of revenue recognized by the Company as it sells finished products and recognizes revenue at the point of sale or delivery and the timing of revenue recognition has not changed with the adoption of the new standard. The cumulative impact on accumulated deficit as a result of the adoption of this standard did not have a material impact on the Company’s historical net losses and, therefore, no adjustment was made to the opening balance of accumulated deficit. In addition, the impact on reported total revenues and operating income as compared to what reported amounts would have been under the prior standard was also immaterial. The Company expects the impact of adoption in future periods to also be immaterial. The accounting policies under the new standard were applied prospectively and are described below. See Note 2, Revenues. Revenue recognition The Company’s revenues are derived primarily from the sales of respiratory products, medical gas equipment and emergency medical products. The products are generally sold directly to distributors, customers affiliated with buying groups, individual customers and construction contractors, throughout the world. The Company recognizes revenue from product sales upon satisfaction of its performance obligation which occurs on the transfer of control of the product, which is generally upon shipment or delivery, depending on the delivery terms set forth in the customer contract. Payment terms between Allied and its customers vary by the type of customer, country of sale, and the products offered. The term between invoicing and the payment due date is not significant. Management exercises judgment in estimating variable consideration. Provisions for early payment discounts, rebates and returns and other adjustments are provided for in the period the related sales are recorded. Historical data is readily available and reliable, and is used for estimating the amount of the reduction in gross sales. The Company provides rebates to wholesalers. Rebate amounts are based upon purchases using contractual amount for each product sold. Factors used in the rebate calculations include the identification of which products have been sold subject to a rebate and the customer or price terms that apply. Using known contractual allowances, the Company estimates the amount of the rebate that will be paid, and records the liability as a reduction of gross sales when it records the sale of the product. Settlement of the rebate generally occurs in the month following the sale. The Company regularly analyzes the historical rebate trends and adjusts reserves for changes in trends and terms of rebate programs. Historically, adjustments to prior years’ rebate accruals have not been material to net income. Other allowances charged against gross sales include cash discounts and returns, which are not significant. Cash discounts are known within 15 to 30 days of sale, and therefore can be reliably estimated. Returns can be reliably estimated because the Company’s historical returns are low, and because sales return terms and other sales terms have remained relatively unchanged for several periods. Product warranties are also not significant. The Company does not allocate transaction price as the Company has only one performance obligation and its contracts do not span multiple periods. All taxes imposed on and concurrent with revenue producing transactions and collected by the Company are excluded from the measurement of transaction price. Marketing and Advertising Costs Promotional and advertising costs are expensed as incurred and are included in selling, general and administrative expenses in the Statement of Operations. Advertising expenses for the years ended June 30, 2019, 2018 and 2017 were $000, $2,000, and $5,550, respectively. Cash and cash equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company maintains funds in bank accounts that, at times, may exceed the limit insured by the Federal Deposit Insurance Corporation. The risk of loss attributable to these uninsured balances is mitigated by depositing funds only in high credit quality financial institutions. The Company has not experienced any losses in such accounts. Foreign currency transactions Allied has international sales which are denominated in U.S. dollars, the functional currency for these transactions. Accounts receivable and concentrations of credit risk Accounts receivable are recorded at the invoiced amount. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains reserves for potential credit losses based on past experience and an analysis of current amounts due, and historically such losses have been within management’s expectations. The Company maintains an allowance for doubtful accounts to reflect the uncollectibility of accounts receivable based on past collection history and specific risks indentified among uncollected accounts. Accounts receivable are charged to the allowance for doubtful accounts when the Company determines that the receivable will not be collected and/or when the account has been referred to a third party collection agency. The Company’s customers can be grouped into three main categories: medical equipment distributors, construction contractors and health care institutions. At June 30, 2019, the Company believes that it has no significant concentration of credit risk. Inventories Inventories are stated at the lower of cost, determined using the last-in, first-out (“LIFO”) method, or market. If the first-in, first-out method (which approximates replacement cost) had been used in determining cost, inventories would have been $2,308,377 and $2,376,537 higher at June 30, 2019 and 2018, respectively. Changes in the LIFO reserve are included in cost of sales. Cost of sales was reduced by $120,965, $242,885, and $90,510 in fiscal 2019, 2018, and 2017 respectively, as a result of LIFO liquidations. Costs in inventory include raw materials, direct labor and manufacturing overhead. Inventory is recorded net of a reserve for obsolete and excess inventory which is determined based on an analysis of inventory items with no usage in the preceding year and for inventory items for which there is greater than two years’ usage on hand. The reserve for obsolete and excess inventory was $1,800,935 and $1,619,417 at June 30, 2019 and 2018, respectively. Property, plant and equipment Property, plant and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 35 years. Expenditures for repairs, maintenance and renewals are charged to income as incurred. Expenditures, which improve an asset or extend its estimated useful life, are capitalized. When properties are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Impairment of long-lived assets The Company evaluates impairment of long-lived assets under the provisions of ASC Topic 360: “Property, Plant and Equipment.” ASC 360 provides a single accounting model for long-lived assets to be disposed of and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Under ASC 360, if the sum of the expected future cash flows (undiscounted and without interest charges) of the long-lived assets is less than the carrying amount of such assets, an impairment loss will be recognized. No impairment losses of long-lived assets or identifiable intangibles were recorded by the Company for fiscal years ended June 30, 2019, 2018, and 2017. Collective Bargaining Agreement At June 30, 2019, the Company had approximately 181 full-time employees. Approximately 108 employees in the Company’s principal manufacturing facility located in St. Louis, Missouri, are covered by a collective bargaining agreement that will expire on May 31, 2021. Self-insurance The Company maintains a self-insurance program for a portion of its health care costs. Self-insurance costs are accrued based upon the aggregate of the liability for reported claims and the estimated liability for claims incurred but not reported. As of June 30, 2019 and 2018, the Company had $210,000 and $180,000 respectively, of accrued liabilities related to health care claims. In order to establish the self-insurance reserves, the Company utilized actuarial estimates of expected claims based on analyses of historical data. Fair value of financial instruments The Company’s financial instruments include cash, accounts receivable and accounts payable. The carrying amounts for cash, accounts receivable and accounts payable approximate their fair value due to the short maturity of these instruments. Income taxes The Company accounts for income taxes under ASC Topic 740: “Income Taxes.” Under ASC 740, the deferred tax provision is determined using the liability method, whereby deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates that are expected to apply to taxable income when such assets and liabilities are anticipated to be settled or realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as tax expense or benefit in the period that includes the enactment date of the change. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance the Company first considers the reversals of existing temporary deferred tax liabilities and available tax planning strategies. To the extent these items are not sufficient to cause the realization of deferred tax assets, the Company considers the availability of future taxable income to the extent such income is considered likely to occur based on the Company’s earnings history, current income trends and projections. In light of its history of operating losses the Company does not rely on the existence of future taxable income as it currently cannot conclude future taxable income is likely to occur. The Company does rely on reversals of existing temporary deferred tax liabilities and tax planning strategies to the extent available to support the value of its existing deferred tax assets. To the extent the Company’s deferred tax assets exceeded the amount supportable through reversals of existing deferred tax liabilities and tax planning strategies a valuation allowance is recorded against the excess deferred tax assets. The Company recognizes tax liabilities when, despite the Company’s belief that its tax return positions are supportable, the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. To the extent the Company deems it necessary to record a liability for its tax positions, the current portion of the liability is included in income taxes payable and the noncurrent portion is included in other liabilities on the balance sheet. If upon the final tax outcome of these matters the ultimate liability is different than the amounts recorded, such differences are reflected in income tax expense in the period in which such determination is made. The Company files a federal and multiple state income tax returns. With few exceptions the Company’s federal and state income tax returns are open for fiscal years ending after June 30, 2016. The Company classifies interest expenses on taxes payable as interest expense. Penalties are classified as a component of other expenses. Research and development costs Research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses for the years ended June 30, 2019, 2018 and 2017 were $459,455, $472,077, and $410,458, respectively. Earnings per share Basic earnings per share are based on the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share are based on the sum of the weighted average number of shares of common stock and common stock equivalents outstanding during the year. The weighted average number of basic and diluted shares outstanding for the years ended June 30, 2019, 2018 and 2017 was 4,013,537 shares. The dilutive effect of the Company’s employee and director stock option plans are determined by use of the treasury stock method. There are no potential common shares excluded from the calculation of net loss per share, as their effect would be anti-dilutive for the years ended June 30, 2019, 2018 and 2017 respectively. The following information is necessary to calculate earnings per share for the periods presented: Year ended June 30, 2019 2018 2017 Net loss, as reported $ (2,109,685) $ (2,192,170) $ (2,088,666) Weighted average common shares outstanding 4,013,537 4,013,537 4,013,537 Effect of dilutive stock options — — — Weighted average diluted common shares outstanding 4,013,537 4,013,537 4,013,537 Net loss per common share Basic $ (0.53) $ (0.55) $ (0.52) Diluted $ (0.53) $ (0.55) $ (0.52) Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive — — — Employee stock-based compensation The company follows the provisions of ASC Topic 718: “Compensation – Stock Compensation”, which sets accounting requirements for “share-based” compensation to employees, including employee stock purchase plans, and requires companies to recognize in the statement of operations the grant-date fair value of the stock options and other equity-based compensation. The fair value of options granted is estimated on the date of grant using the Black-Scholes option-pricing model. The following table summarizes the weighted average assumptions utilized in the Black-Scholes option pricing model for options granted during the fiscal years ended June 30, 2019, 2018 and 2017. 2019 2018 2017 Weighted-average fair value $ 1.06 $ 0.99 $ 0.86 Weighted-average volatility 48 % 44 % 37 % Weighted-average expected life (in years) 6.0 6.0 6.0 Weighted-average risk-free interest rate 3.03 % 2.11 % 1.74 % Dividend yield — % — % — % Expected volatility is based on the historical volatility of the Company’s common stock to estimate future volatility. The risk-free rates are taken from rates as published by the Federal Reserve and represent the yields on actively traded treasury securities for terms equal or approximately equal to the expected terms of the options. The expected term is calculated using the SEC Staff Accounting Bulletin 107 (ASC 718‑10‑S99) simplified method. Forfeitures are recognized as they occur. The dividend yield is zero based on the fact that the Company has no intention of paying dividends in the near term. Share-based compensation expense included in the Statement of Operations for the fiscal years ended June 30, 2019, 2018 and 2017 was approximately $3,000, $3,000 and $2,000, respectively. Unrecognized shared-based compensation cost related to unvested stock options as of June 30, 2019 amounts to approximately $1,000. The cost is expected to be recognized over the next fiscal year. The Company recognized an income tax benefit for share-based compensation arrangements of approximately $1,000 for the years ended June 30, 2017, 2018 and 2019, all of which were fully offset by an increase in the deferred tax asset valuation allowance. No stock options were exercised during fiscal years 2019, 2018 and 2017. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016‑02, “Leases (Topic 842)” (“ASU 2016‑02”), which requires lessees to recognize assets and liabilities for leases with lease terms of more than 12 months and disclose key information about leasing arrangements. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. The update is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company will apply the new guidance effective July 1, 2019. The Company has substantially completed its assessment of the new guidance and the adoption of this guidance, including the cumulative effect of any adjustment to the opening balance of retained earnings and does not believe it will have a material impact to its financial statements. |
Financing
Financing | 12 Months Ended |
Jun. 30, 2019 | |
Financing | |
Financing | 3. Financing The Company is party to a Loan and Security Agreement with North Mill Capital, LLC ("North Mill"), as successor in interest to Summit Financial Resources, L.P., dated effective February 27, 2017, as amended April 16, 2018 and April 24, 2019 (as amended, the “Credit Agreement”). Pursuant to the Credit Agreement, the Company obtained a secured revolving credit facility (the “Credit Facility”). The Company’s obligations under the Credit Facility are secured by all of the Company’s personal property, both tangible and intangible, pursuant to the terms and subject to the conditions set forth in the Credit Agreement. Availability of funds under the Credit Agreement is based on the Company’s accounts receivable and inventory but will not exceed $2,000,000. At June 30, 2019 availability under the agreement was $1.6 million. The Credit Facility will be available, subject to its terms, on a revolving basis until it expires on February 27, 2021, at which time all amounts outstanding under the Credit Facility will be due and payable. Advances will bear interest at a rate equal to 2.00% in excess of the prime rate as reported in the Wall Street Journal. Interest is computed based on the actual number of days elapsed over a year of 360 days. In addition to interest, the Credit facility requires that the Company pay the lender a monthly administration fee in an amount equal to forty-seven hundredths percent (0.47%) of the average outstanding daily principal amount of loan advances for the each calendar month, or portion thereof. Regardless of the amount borrowed under the Credit Facility, the Company will pay a minimum amount of .25% (25 basis points) per month on the maximum availability ($5,000 per month). In the event the Company prepays or terminates the Credit Facility prior to February 27, 2021, the Company will be obligated to pay an amount equal to the minimum monthly payment multiplied by the number of months remaining between February 27, 2021 and the date of such prepayment or termination. Under the Credit Agreement, advances are generally subject to customary borrowing conditions and to North Mill's sole discretion to fund the advances. The Credit Agreement also contains covenants with which the Company must comply during the term of the Credit Facility. Among other things, such covenants require the Company to maintain insurance on the collateral, operate in the ordinary course and not engage in a change of control, dissolve or wind up the Company. The Credit Agreement also contains certain events of default including, without limitation: the failure to make payments when due; the material breach of representations or warranties contained in the Credit Agreement or other loan documents; cross-default with other indebtedness of the Company; the entry of judgments or fines that may have a material adverse effect on the Company; failure to comply with the observance or performance of covenants contained in the Credit Agreement or other loan documents; insolvency of the Company, appointment of a receiver, commencement of bankruptcy or other insolvency proceedings; dissolution of the Company; the attachment of any state or federal tax lien; attachment or levy upon or seizure of the Company’s property; or any change in the Company’s condition that may have a material adverse effect. After an event of default, and upon the continuation thereof, the principal amount of all loans made under the Credit Facility would bear interest at a rate per annum equal to 20.00% above the otherwise applicable interest rate (provided, that the interest rate may not exceed the highest rate permissible under law), and would have the option to accelerate maturity and payment of the Company’s obligations under the Credit Facility. At June 30, 2019 and 2018, the Company had no aggregate indebtedness, including capital lease obligations, short-term debt and long term debt. The prime rate as reported in the Wall Street Journal was 5.50% on June 30, 2019. The Company was in compliance with all of the covenants associated with the Credit Facility at June 30, 2019. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Jun. 30, 2019 | |
Lease Commitments | |
Lease Commitments | 4. Lease Commitments The Company leases certain of its equipment under non-cancelable operating lease agreements. Minimum lease payments under operating leases at June 30, 2019 are as follows: Operating Fiscal Year Leases 2020 74,532 Total minimum lease payments $ 74,532 Rental expense incurred on operating leases in fiscal 2019, 2018, and 2017 totaled $109,160, $131,764 and $132,657, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Taxes | |
Income Taxes | 5. Income Taxes The provision for income taxes consists of the following: 2019 2018 2017 Current: Federal $ — $ — $ — State 10,676 9,938 7,299 Total current 10,676 9,938 7,299 Deferred: Federal (451,591) 424,038 (625,953) State (65,877) 91,789 (84,424) Valuation Allowance 536,240 (352,727) 739,578 Total deferred 18,772 163,100 29,201 $ 29,448 $ 173,038 $ 36,500 A reconciliation of income taxes, with the amounts computed at the statutory federal rate is as follows: 2019 2018 2017 Computed tax at federal statutory rate $ (436,850) $ (555,261) $ (697,736) State income taxes, net of federal tax (benefit) provision (61,974) (54,471) (49,124) Non deductible expenses 7,699 9,775 15,491 Federal research credit (22,906) (16,880) (9,661) Net operating loss carryforward adjustment — 131,244 — State NOLs 6,772 (39,979) 39,697 Stock Options - Expired 2,536 4,424 15,308 Changes resulting from the TCJA — 1,080,362 — Other, net (2,069) (33,449) (17,053) Valuation Allowance 536,240 (352,727) 739,578 Total $ 29,448 $ 173,038 $ 36,500 On December 22, 2017, President Trump signed into law tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “TCJA”), which became effective on that date. The TCJA significantly revised U.S. tax law by lowering the U.S. federal statutory income tax rate from 35% to 21% effective January 1, 2018. ASC Topic 740, requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. Accordingly, in the second quarter of fiscal 2018, the Company recorded a one-time charge of $136,386 within its income tax provision in connection with the TCJA. The net expense of $136,386 relates to revaluation of the Company’s valuation allowance. The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of June 30, 2019 and 2018 are as follows: 2019 2018 Deferred tax assets Bad debts $ 25,500 $ 25,500 Intangible assets 1,935 2,530 Accrued liabilities 262,970 257,692 Stock options 28,568 30,411 Net operating loss and credit carryforwards 3,914,655 3,511,943 Total Assets 4,233,628 3,828,076 Deferred tax liabilities Prepaid expenses 10,937 11,606 Inventory 652,251 697,669 Depreciation 233,142 317,360 Other 99,575 81,186 Total Liabilities 995,905 1,107,821 Valuation Allowance (2,735,832) (2,199,592) Total deferred taxes $ 501,891 $ 520,663 At June 30, 2019, there were $13.2 million dollars of federal net operating loss carryforwards which will expire in 2031 through 2038 and $1.5 million is subject to indefinite carryforward. In addition, the Company has state tax net operating losses of approximately $9.5 million that expire in varying years from 2019 through 2038. The Company files a federal and multiple state income tax returns. With few exceptions the Company’s federal and state income tax returns are open for fiscal years ending after June 30, 2016. The Company has not taken any uncertain tax positions on its federal or state income tax filings for open tax years. |
Employee Retirement Benefits
Employee Retirement Benefits | 12 Months Ended |
Jun. 30, 2019 | |
Employee Retirement Benefits | |
Employee Retirement Benefits | 6. Employee Retirement Benefits The Company offers a retirement savings plan under Section 401(k) of the Internal Revenue Code to certain eligible salaried employees. Each employee may elect to enter a written salary deferral agreement under which a portion of such employee’s pre-tax earnings may be contributed to the plan. During the fiscal years ended June 30, 2019, 2018 and 2017, the Company made contributions of $190,965, $197,999, and $204,951, respectively, to the retirement savings plan. The Company contributes 2% of eligible salaried employee’s annual income to the plan. In addition, the Company provides a 25% match on the first 8% of employee deferrals for eligible employees. The risk of participating in multi-employer pension plan is different from single-employer plans. Assets contributed to a multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. The Company’s participation in a multi-employer pension plan for the year ended June 30, 2019, is outlined in the table below. The “EIN/PN” column provides the Employee Identification Number (EIN) and the three-digit plan number (PN). The most recent Pension Protection Act (PPA) zone status for 2018 and 2017 is for the plan year-ends as indicated below. The zone status is based on information that the Company obtained from the annual funding notice for District No. 9 International Association of Machinists and Aerospace Workers Pension Trust. Among other factors, plans in the red zone are less than 65 percent funded, plans in the yellow zone are between 65 and 80 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. In addition to regular plan contributions, the Company may be subject to a surcharge if the plan is in the red zone. The “Surcharge Imposed” column indicates whether a surcharge has been imposed on contributions to the plan. The last column lists the expiration date(s) of the collective-bargaining agreement (CBA) to which the plan is subject. PPA Zone Status Contributions by the Company FIP/RP Status Pending/ Surcharge Expiration Pension Trust Fund EIN/PN 2018 2017 Implemented 2019 2018 2017 Imposed Date of CBA District No. 9 51‑0138317/001 Green Green International Association of Machinist and Aerospace Workers Pension Plan 12/31/2018 12/31/2017 N/A $ 236,256 $ 269,928 $ 277,127 No 5/31/2021 The Company was not listed in the Form 5500 for the above plan as of the plan year ends as providing more than 5 percent of total contributions. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Jun. 30, 2019 | |
Stock Based Compensation | |
Stock Based Compensation | 7. Stock Based Compensation The Company has established a 2009 Incentive Stock Plan. The Employee Plan provides for the granting of options to the Company’s executive officers and key employees to purchase shares of common stock at prices equal to the fair market value of the stock on the date of grant. Options to purchase up to 300,000 shares of common stock may be granted under the Employee Plan. Options generally become exercisable ratably over a four year period or one-fourth of the shares covered thereby on each anniversary of the date of grant, commencing on the first or second anniversary of the date granted. The right to exercise the options generally expires in ten years from the date of grant, or earlier if an option holder ceases to be employed by the Company. In addition, the Company has established a 2005 Directors Non-Qualified Stock Option Plan and a 2013 Incentive Plan for Non-Employee Directors (collectively the “Directors Plans”). The Directors Plans provide for the granting of options to the Company’s directors who are not employees of the Company to purchase shares of common stock at prices equal to the fair market value of the stock on the date of grant. Options to purchase up to 75,000 shares of common stock may be granted under the Directors Plans. Options shall become exercisable with respect to one-fourth of the shares covered thereby on each anniversary of the date of grant, commencing on the second anniversary of the date granted, except for certain options which become exercisable with respect to all of the shares covered thereby one year after the grant date. The right to exercise the options expires in ten years from the date of grant, or earlier if an option holder ceases to be a director of the Company. Upon stock-settled compensation exercises and awards, the Company issues new shares of common stock. A summary of stock option transactions in fiscal 2017, 2018 and 2019, respectively, pursuant to the Employee Plans and the Directors Plans is as follows: Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term (years) Value June 30, 2016 50,000 $ 7.56 Options Granted 3,000 $ 2.26 Options Exercised — $ — Options Forfeited or Expired (8,000) $ 10.59 June 30, 2017 45,000 $ 6.67 4.6 $ — Options Granted 3,000 $ 2.22 Options Exercised — $ — Options Forfeited or Expired (3,000) $ 13.46 June 30, 2018 45,000 $ 5.92 4.3 $ — Options Granted 3,000 $ 2.13 Options Exercised — $ — Options Forfeited or Expired (3,000) $ 8.10 June 30, 2019 45,000 $ 5.52 4.0 $ — Exercisable at June 30, 2019 42,000 $ 5.76 3.6 $ — The following table provides additional information for options outstanding and exercisable at June 30, 2019: Options Outstanding Weighted Average Weighted Average Range of Exercise Prices Number Remaining Life Exercise Price $2.13 - 6.99 21,000 6.4 years $ 3.13 $7.00 15,000 2.2 years $ 7.00 $7.01 - 10.08 9,000 1.4 years $ 8.62 $2.13 - 10.08 45,000 4.0 years $ 5.52 Options Exercisable Weighted Average Range of Exercise Prices Number Exercise Price $2.13 - 6.99 18,000 $ 3.30 $7.00 15,000 $ 7.00 $7.01 -10.08 9,000 $ 8.62 $2.13 - 10.08 42,000 $ 5.76 See Note 2 for discussion of accounting for stock awards and related fair value disclosures. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Jun. 30, 2019 | |
Supplemental Balance Sheet Information | |
Supplemental Balance Sheet Information | 8. Supplemental Balance Sheet Information June 30, 2019 2018 Inventories Work in progress $ 288,828 $ 388,252 Component parts 7,151,228 6,775,870 Finished goods 1,693,974 2,285,836 Reserve for obsolete and excess inventory (1,800,935) (1,619,417) $ 7,333,095 $ 7,830,541 Estimated Useful Life (years) Property, plant and equipment Machinery and equipment 3‑10 $ 18,073,352 $ 18,073,352 Buildings 28‑35 13,055,628 13,055,628 Land and land improvements 5‑7 919,566 919,566 Total property, plant and equipment at cost 32,048,546 32,048,546 Less accumulated depreciation and amortization (28,047,465) (27,225,397) $ 4,001,081 $ 4,823,149 Depreciation and amortization expense was approximately $0.8 million, $0.9 million, and $1.0 million for the fiscal years ended June 30, 2019, 2018 and 2017, respectively. Other accrued liabilities Accrued compensation expense $ 1,149,210 $ 1,060,777 Customer deposits 562,905 370,885 Other 382,197 419,021 $ 2,094,312 $ 1,850,683 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Legal Claims The Company is subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities. The Company intends to continue to conduct business in such a manner as to avert any FDA action seeking to interrupt or suspend manufacturing or require any recall or modification of products. The Company has recognized the costs and associated liabilities only for those investigations, claims and legal proceedings for which, in its view, it is probable that liabilities have been incurred and the related amounts are estimable. Based upon information currently available, management believes that existing accrued liabilities are sufficient. Stuyvesant Falls Power Litigation. The Company has been involved in litigation with Niagara Mohawk Power Corporation d/b/a National Grid (“Niagara”), which provides electrical power to the Company’s facility in Stuyvesant Falls, New York, and one other party. The Company maintained in its defense of the lawsuit that it is entitled to a certain amount of free electricity based on covenants running with the land which have been honored for more than a century. After the commencement of the litigation, Niagara began sending invoices to the Company for electricity used at the Company’s Stuyvesant Falls plant. Niagara’s attempts to collect such invoices were stopped in December 2010 by a temporary restraining order. Among other things, Niagara sought as damages the value of electricity received by the Company without charge. The total value of electricity at issue in the litigation was not known with certainty and Niagara alleged different amounts of damages. Niagara alleged in its Second Amended Verified Complaint, dated February 6, 2012, damages of approximately $469,000 in free electricity from May 2003 through May 2010. Niagara also alleged in its Motion For Summary Judgment, filed on March 14, 2014, damages of approximately $492,000 in free electricity from May 2010 through the date of the filing. In April 2015, Allied received an invoice for electrical power at the Stuyvesant Falls plant with an “Amount Due” balance of $696,000 as of March 31, 2015 without any description as to the period of time covered by the invoice. The Company filed a Motion for Summary Judgment on March 14, 2014, seeking dismissal of Niagara’s claims and oral arguments on the motions were held on June 13, 2014. On October 1, 2014, the Court granted the Company’s motion, denied Niagara’s motion and ruled that the Company is entitled to receive electrical power pursuant to the power covenants. On October 26 and October 30, 2014, Niagara and the other party filed separate notices of appeal of the Court’s decision. On March 31, 2016 the Supreme Court of New York, Appellate Division, Third Department reversed the trial court decision and held that the free power covenants are no longer enforceable. The Company’s application for leave to appeal this ruling was dismissed as premature by the New York Court of Appeals on September 20, 2016. On May 26, 2017 the Company again moved for leave to appeal the March 31, 2016 decision. That motion was granted on October 7, 2017 by the New York State Court of Appeals. The Company filed its brief and record on January 26, 2018. Niagara and the other party to the lawsuit, Albany Engineering Corporation, filed their responses on July 16, 2018 and the Company filed its reply on August 14, 2018. On February 20, 2019, the Company, Niagara and Albany entered into a Final Settlement Agreement pursuant to which the Company agreed, among other things, to cancel and forgo its rights to free power from either Niagara or Albany under the power covenants. The New York State Court of Appeals granted a request of all parties to withdraw the appeal on March 5, 2019 and all parties entered a Stipulation of Discontinuance on March 7, 2019 which discontinued the litigation. By separate agreement, Niagara paid the Company $750,000 as consideration for the Company’s agreements pursuant to the settlement. On March 15, 2019 the Appellate Division of the Supreme Court of New York granted Niagara’s request to withdraw its pending appeal. The matter is now fully concluded. Employment Contract In March 2007, the Company entered into a three year employment contract with its chief executive officer. The contract is subject to automatic annual renewals after the initial term unless notification is given. The contract was amended and restated in December 2009 without extending its term. The contract includes termination without cause and change of control provisions, under which the chief executive officer is entitled to receive specified severance payments generally equal to two times ending annual salary if the Company terminates his employment without cause or he voluntarily terminates his employment with “good reason.” “Good Reason” generally includes changes in the scope of his duties or location of employment but also includes (i) the Company’s written election not to renew the Employment Agreement and (ii) certain voluntary resignations by the chief executive officer following a “Change of Control” as defined in the Agreement. |
Segment Information
Segment Information | 12 Months Ended |
Jun. 30, 2019 | |
Segment Information | |
Segment Information | 10. Segment Information The Company operates in one segment consisting of the manufacturing, marketing and distribution of a variety of respiratory products used in the health care industry to hospitals, hospital equipment dealers, hospital construction contractors, home health care dealers and emergency medical product dealers. The Company’s product lines include respiratory care products, medical gas equipment and emergency medical products. The Company does not have any one single customer that represents more than 10 percent of total sales. Disaggregation information of sales by region, and by product, are as follows: Sales by Region 2019 2018 2017 Domestic United States $ 23,541,614 $ 25,711,912 $ 26,258,439 Europe 877,308 1,428,245 951,441 Canada 758,145 795,357 690,010 Latin America 2,450,969 1,855,013 2,087,670 Middle East 464,470 857,066 694,387 Far East 3,259,905 3,107,339 2,821,895 Other International 29,110 5,021 8,188 $ 31,381,521 $ 33,759,953 $ 33,512,030 Sales by Product 2019 2018 2017 Respiratory care products $ 8,993,216 $ 9,037,704 $ 9,105,694 Medical gas equipment 16,031,109 17,645,413 17,660,524 Emergency medical products 6,357,196 7,076,836 6,745,812 $ 31,381,521 $ 33,759,953 $ 33,512,030 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Jun. 30, 2019 | |
Quarterly Financial Data (unaudited) | |
Quarterly Financial Data (unaudited) | 11. Quarterly Financial Data (unaudited) Summarized quarterly financial data for fiscal 2019 and 2018 appears below (all amounts in thousands except per share amounts): June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Three months ended, 2019 2019 2018 2018 2018 2018 2017 2017 Net sales $ 7,690 $ 8,316 $ 8,107 $ 7,269 $ 8,677 $ 8,467 $ 8,719 $ 7,897 Gross profit 1,405 1,550 1,205 879 1,951 1,233 1,909 1,357 Loss from operations (433) (353) (762) (1,226) (97) (888) (244) (767) Net income (loss) (474) 378 (779) (1,235) (143) (901) (381) (767) Basic earnings (loss) per share (0.12) 0.09 (0.19) (0.31) (0.04) (0.22) (0.09) (0.19) Diluted earnings (loss) per share (0.12) 0.09 (0.19) (0.31) (0.04) (0.22) (0.09) (0.19) Earnings per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly amounts will not necessarily equal the total for the year. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Use of estimates | Use of estimates The policies utilized by the Company in the preparation of the financial statements conform to accounting principles generally accepted in the United States of America, and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. |
Adoption of new revenue recognition standard | Adoption of new revenue recognition standard In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards require an entity to recognize revenue when control of promised goods or services is transferred to the customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this new standard as of July 1, 2018, by applying the modified-retrospective method to those contracts that were not completed as of that date. The results for reporting periods beginning after July 1, 2018, are presented in accordance with the new standard, although comparative information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. The adoption of this standard did not have a material impact on the amount of revenue recognized by the Company as it sells finished products and recognizes revenue at the point of sale or delivery and the timing of revenue recognition has not changed with the adoption of the new standard. The cumulative impact on accumulated deficit as a result of the adoption of this standard did not have a material impact on the Company’s historical net losses and, therefore, no adjustment was made to the opening balance of accumulated deficit. In addition, the impact on reported total revenues and operating income as compared to what reported amounts would have been under the prior standard was also immaterial. The Company expects the impact of adoption in future periods to also be immaterial. The accounting policies under the new standard were applied prospectively and are described below. See Note 2, Revenues. Revenue recognition The Company’s revenues are derived primarily from the sales of respiratory products, medical gas equipment and emergency medical products. The products are generally sold directly to distributors, customers affiliated with buying groups, individual customers and construction contractors, throughout the world. The Company recognizes revenue from product sales upon satisfaction of its performance obligation which occurs on the transfer of control of the product, which is generally upon shipment or delivery, depending on the delivery terms set forth in the customer contract. Payment terms between Allied and its customers vary by the type of customer, country of sale, and the products offered. The term between invoicing and the payment due date is not significant. Management exercises judgment in estimating variable consideration. Provisions for early payment discounts, rebates and returns and other adjustments are provided for in the period the related sales are recorded. Historical data is readily available and reliable, and is used for estimating the amount of the reduction in gross sales. The Company provides rebates to wholesalers. Rebate amounts are based upon purchases using contractual amount for each product sold. Factors used in the rebate calculations include the identification of which products have been sold subject to a rebate and the customer or price terms that apply. Using known contractual allowances, the Company estimates the amount of the rebate that will be paid, and records the liability as a reduction of gross sales when it records the sale of the product. Settlement of the rebate generally occurs in the month following the sale. The Company regularly analyzes the historical rebate trends and adjusts reserves for changes in trends and terms of rebate programs. Historically, adjustments to prior years’ rebate accruals have not been material to net income. Other allowances charged against gross sales include cash discounts and returns, which are not significant. Cash discounts are known within 15 to 30 days of sale, and therefore can be reliably estimated. Returns can be reliably estimated because the Company’s historical returns are low, and because sales return terms and other sales terms have remained relatively unchanged for several periods. Product warranties are also not significant. The Company does not allocate transaction price as the Company has only one performance obligation and its contracts do not span multiple periods. All taxes imposed on and concurrent with revenue producing transactions and collected by the Company are excluded from the measurement of transaction price. |
Marketing and Advertising Costs | Marketing and Advertising Costs Promotional and advertising costs are expensed as incurred and are included in selling, general and administrative expenses in the Statement of Operations. Advertising expenses for the years ended June 30, 2019, 2018 and 2017 were $000, $2,000, and $5,550, respectively. |
Cash and cash equivalents | Cash and cash equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company maintains funds in bank accounts that, at times, may exceed the limit insured by the Federal Deposit Insurance Corporation. The risk of loss attributable to these uninsured balances is mitigated by depositing funds only in high credit quality financial institutions. The Company has not experienced any losses in such accounts. |
Foreign currency transactions | Foreign currency transactions Allied has international sales which are denominated in U.S. dollars, the functional currency for these transactions. |
Accounts receivable and concentrations of credit risk | Accounts receivable and concentrations of credit risk Accounts receivable are recorded at the invoiced amount. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains reserves for potential credit losses based on past experience and an analysis of current amounts due, and historically such losses have been within management’s expectations. The Company maintains an allowance for doubtful accounts to reflect the uncollectibility of accounts receivable based on past collection history and specific risks indentified among uncollected accounts. Accounts receivable are charged to the allowance for doubtful accounts when the Company determines that the receivable will not be collected and/or when the account has been referred to a third party collection agency. The Company’s customers can be grouped into three main categories: medical equipment distributors, construction contractors and health care institutions. At June 30, 2019, the Company believes that it has no significant concentration of credit risk. |
Inventories | Inventories Inventories are stated at the lower of cost, determined using the last-in, first-out (“LIFO”) method, or market. If the first-in, first-out method (which approximates replacement cost) had been used in determining cost, inventories would have been $2,308,377 and $2,376,537 higher at June 30, 2019 and 2018, respectively. Changes in the LIFO reserve are included in cost of sales. Cost of sales was reduced by $120,965, $242,885, and $90,510 in fiscal 2019, 2018, and 2017 respectively, as a result of LIFO liquidations. Costs in inventory include raw materials, direct labor and manufacturing overhead. Inventory is recorded net of a reserve for obsolete and excess inventory which is determined based on an analysis of inventory items with no usage in the preceding year and for inventory items for which there is greater than two years’ usage on hand. The reserve for obsolete and excess inventory was $1,800,935 and $1,619,417 at June 30, 2019 and 2018, respectively. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 35 years. Expenditures for repairs, maintenance and renewals are charged to income as incurred. Expenditures, which improve an asset or extend its estimated useful life, are capitalized. When properties are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in income. |
Impairment of long-lived assets | Impairment of long-lived assets The Company evaluates impairment of long-lived assets under the provisions of ASC Topic 360: “Property, Plant and Equipment.” ASC 360 provides a single accounting model for long-lived assets to be disposed of and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Under ASC 360, if the sum of the expected future cash flows (undiscounted and without interest charges) of the long-lived assets is less than the carrying amount of such assets, an impairment loss will be recognized. No impairment losses of long-lived assets or identifiable intangibles were recorded by the Company for fiscal years ended June 30, 2019, 2018, and 2017. |
Collective Bargaining Agreement | Collective Bargaining Agreement At June 30, 2019, the Company had approximately 181 full-time employees. Approximately 108 employees in the Company’s principal manufacturing facility located in St. Louis, Missouri, are covered by a collective bargaining agreement that will expire on May 31, 2021. |
Self-insurance | Self-insurance The Company maintains a self-insurance program for a portion of its health care costs. Self-insurance costs are accrued based upon the aggregate of the liability for reported claims and the estimated liability for claims incurred but not reported. As of June 30, 2019 and 2018, the Company had $210,000 and $180,000 respectively, of accrued liabilities related to health care claims. In order to establish the self-insurance reserves, the Company utilized actuarial estimates of expected claims based on analyses of historical data. |
Fair value of financial instruments | Fair value of financial instruments The Company’s financial instruments include cash, accounts receivable and accounts payable. The carrying amounts for cash, accounts receivable and accounts payable approximate their fair value due to the short maturity of these instruments. |
Income taxes | Income taxes The Company accounts for income taxes under ASC Topic 740: “Income Taxes.” Under ASC 740, the deferred tax provision is determined using the liability method, whereby deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates that are expected to apply to taxable income when such assets and liabilities are anticipated to be settled or realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as tax expense or benefit in the period that includes the enactment date of the change. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance the Company first considers the reversals of existing temporary deferred tax liabilities and available tax planning strategies. To the extent these items are not sufficient to cause the realization of deferred tax assets, the Company considers the availability of future taxable income to the extent such income is considered likely to occur based on the Company’s earnings history, current income trends and projections. In light of its history of operating losses the Company does not rely on the existence of future taxable income as it currently cannot conclude future taxable income is likely to occur. The Company does rely on reversals of existing temporary deferred tax liabilities and tax planning strategies to the extent available to support the value of its existing deferred tax assets. To the extent the Company’s deferred tax assets exceeded the amount supportable through reversals of existing deferred tax liabilities and tax planning strategies a valuation allowance is recorded against the excess deferred tax assets. The Company recognizes tax liabilities when, despite the Company’s belief that its tax return positions are supportable, the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. To the extent the Company deems it necessary to record a liability for its tax positions, the current portion of the liability is included in income taxes payable and the noncurrent portion is included in other liabilities on the balance sheet. If upon the final tax outcome of these matters the ultimate liability is different than the amounts recorded, such differences are reflected in income tax expense in the period in which such determination is made. The Company files a federal and multiple state income tax returns. With few exceptions the Company’s federal and state income tax returns are open for fiscal years ending after June 30, 2016. The Company classifies interest expenses on taxes payable as interest expense. Penalties are classified as a component of other expenses. |
Research and development costs | Research and development costs Research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses for the years ended June 30, 2019, 2018 and 2017 were $459,455, $472,077, and $410,458, respectively. |
Earnings per share | Earnings per share Basic earnings per share are based on the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share are based on the sum of the weighted average number of shares of common stock and common stock equivalents outstanding during the year. The weighted average number of basic and diluted shares outstanding for the years ended June 30, 2019, 2018 and 2017 was 4,013,537 shares. The dilutive effect of the Company’s employee and director stock option plans are determined by use of the treasury stock method. There are no potential common shares excluded from the calculation of net loss per share, as their effect would be anti-dilutive for the years ended June 30, 2019, 2018 and 2017 respectively. The following information is necessary to calculate earnings per share for the periods presented: Year ended June 30, 2019 2018 2017 Net loss, as reported $ (2,109,685) $ (2,192,170) $ (2,088,666) Weighted average common shares outstanding 4,013,537 4,013,537 4,013,537 Effect of dilutive stock options — — — Weighted average diluted common shares outstanding 4,013,537 4,013,537 4,013,537 Net loss per common share Basic $ (0.53) $ (0.55) $ (0.52) Diluted $ (0.53) $ (0.55) $ (0.52) Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive — — — |
Employee stock-based compensation | Employee stock-based compensation The company follows the provisions of ASC Topic 718: “Compensation – Stock Compensation”, which sets accounting requirements for “share-based” compensation to employees, including employee stock purchase plans, and requires companies to recognize in the statement of operations the grant-date fair value of the stock options and other equity-based compensation. The fair value of options granted is estimated on the date of grant using the Black-Scholes option-pricing model. The following table summarizes the weighted average assumptions utilized in the Black-Scholes option pricing model for options granted during the fiscal years ended June 30, 2019, 2018 and 2017. 2019 2018 2017 Weighted-average fair value $ 1.06 $ 0.99 $ 0.86 Weighted-average volatility 48 % 44 % 37 % Weighted-average expected life (in years) 6.0 6.0 6.0 Weighted-average risk-free interest rate 3.03 % 2.11 % 1.74 % Dividend yield — % — % — % Expected volatility is based on the historical volatility of the Company’s common stock to estimate future volatility. The risk-free rates are taken from rates as published by the Federal Reserve and represent the yields on actively traded treasury securities for terms equal or approximately equal to the expected terms of the options. The expected term is calculated using the SEC Staff Accounting Bulletin 107 (ASC 718‑10‑S99) simplified method. Forfeitures are recognized as they occur. The dividend yield is zero based on the fact that the Company has no intention of paying dividends in the near term. Share-based compensation expense included in the Statement of Operations for the fiscal years ended June 30, 2019, 2018 and 2017 was approximately $3,000, $3,000 and $2,000, respectively. Unrecognized shared-based compensation cost related to unvested stock options as of June 30, 2019 amounts to approximately $1,000. The cost is expected to be recognized over the next fiscal year. The Company recognized an income tax benefit for share-based compensation arrangements of approximately $1,000 for the years ended June 30, 2017, 2018 and 2019, all of which were fully offset by an increase in the deferred tax asset valuation allowance. No stock options were exercised during fiscal years 2019, 2018 and 2017. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016‑02, “Leases (Topic 842)” (“ASU 2016‑02”), which requires lessees to recognize assets and liabilities for leases with lease terms of more than 12 months and disclose key information about leasing arrangements. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. The update is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company will apply the new guidance effective July 1, 2019. The Company has substantially completed its assessment of the new guidance and the adoption of this guidance, including the cumulative effect of any adjustment to the opening balance of retained earnings and does not believe it will have a material impact to its financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of information is necessary to calculate earnings per share | The following information is necessary to calculate earnings per share for the periods presented: Year ended June 30, 2019 2018 2017 Net loss, as reported $ (2,109,685) $ (2,192,170) $ (2,088,666) Weighted average common shares outstanding 4,013,537 4,013,537 4,013,537 Effect of dilutive stock options — — — Weighted average diluted common shares outstanding 4,013,537 4,013,537 4,013,537 Net loss per common share Basic $ (0.53) $ (0.55) $ (0.52) Diluted $ (0.53) $ (0.55) $ (0.52) Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive — — — |
Schedule of the weighted average assumptions utilized in the Black-Scholes option pricing model for options granted | The following table summarizes the weighted average assumptions utilized in the Black-Scholes option pricing model for options granted during the fiscal years ended June 30, 2019, 2018 and 2017. 2019 2018 2017 Weighted-average fair value $ 1.06 $ 0.99 $ 0.86 Weighted-average volatility 48 % 44 % 37 % Weighted-average expected life (in years) 6.0 6.0 6.0 Weighted-average risk-free interest rate 3.03 % 2.11 % 1.74 % Dividend yield — % — % — % |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Lease Commitments | |
Schedule of Minimum lease payments under operating leases | The Company leases certain of its equipment under non-cancelable operating lease agreements. Minimum lease payments under operating leases at June 30, 2019 are as follows: Operating Fiscal Year Leases 2020 74,532 Total minimum lease payments $ 74,532 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Income Taxes | |
Schedule of provision for income taxes | The provision for income taxes consists of the following: 2019 2018 2017 Current: Federal $ — $ — $ — State 10,676 9,938 7,299 Total current 10,676 9,938 7,299 Deferred: Federal (451,591) 424,038 (625,953) State (65,877) 91,789 (84,424) Valuation Allowance 536,240 (352,727) 739,578 Total deferred 18,772 163,100 29,201 $ 29,448 $ 173,038 $ 36,500 |
Schedule of reconciliation of income taxes, with the amounts computed at the statutory federal rate | A reconciliation of income taxes, with the amounts computed at the statutory federal rate is as follows: 2019 2018 2017 Computed tax at federal statutory rate $ (436,850) $ (555,261) $ (697,736) State income taxes, net of federal tax (benefit) provision (61,974) (54,471) (49,124) Non deductible expenses 7,699 9,775 15,491 Federal research credit (22,906) (16,880) (9,661) Net operating loss carryforward adjustment — 131,244 — State NOLs 6,772 (39,979) 39,697 Stock Options - Expired 2,536 4,424 15,308 Changes resulting from the TCJA — 1,080,362 — Other, net (2,069) (33,449) (17,053) Valuation Allowance 536,240 (352,727) 739,578 Total $ 29,448 $ 173,038 $ 36,500 |
Schedule of deferred tax assets and liabilities recorded on the balance sheet | The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of June 30, 2019 and 2018 are as follows: 2019 2018 Deferred tax assets Bad debts $ 25,500 $ 25,500 Intangible assets 1,935 2,530 Accrued liabilities 262,970 257,692 Stock options 28,568 30,411 Net operating loss and credit carryforwards 3,914,655 3,511,943 Total Assets 4,233,628 3,828,076 Deferred tax liabilities Prepaid expenses 10,937 11,606 Inventory 652,251 697,669 Depreciation 233,142 317,360 Other 99,575 81,186 Total Liabilities 995,905 1,107,821 Valuation Allowance (2,735,832) (2,199,592) Total deferred taxes $ 501,891 $ 520,663 |
Employee Retirement Benefits (T
Employee Retirement Benefits (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Employee Retirement Benefits | |
Schedule of multi-employer pension plan | PPA Zone Status Contributions by the Company FIP/RP Status Pending/ Surcharge Expiration Pension Trust Fund EIN/PN 2018 2017 Implemented 2019 2018 2017 Imposed Date of CBA District No. 9 51‑0138317/001 Green Green International Association of Machinist and Aerospace Workers Pension Plan 12/31/2018 12/31/2017 N/A $ 236,256 $ 269,928 $ 277,127 No 5/31/2021 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Stock Based Compensation | |
Schedule of stock option plan activity under employee plans and the directors plans | A summary of stock option transactions in fiscal 2017, 2018 and 2019, respectively, pursuant to the Employee Plans and the Directors Plans is as follows: Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term (years) Value June 30, 2016 50,000 $ 7.56 Options Granted 3,000 $ 2.26 Options Exercised — $ — Options Forfeited or Expired (8,000) $ 10.59 June 30, 2017 45,000 $ 6.67 4.6 $ — Options Granted 3,000 $ 2.22 Options Exercised — $ — Options Forfeited or Expired (3,000) $ 13.46 June 30, 2018 45,000 $ 5.92 4.3 $ — Options Granted 3,000 $ 2.13 Options Exercised — $ — Options Forfeited or Expired (3,000) $ 8.10 June 30, 2019 45,000 $ 5.52 4.0 $ — Exercisable at June 30, 2019 42,000 $ 5.76 3.6 $ — |
Schedule of additional information for options outstanding and exercisable | The following table provides additional information for options outstanding and exercisable at June 30, 2019: Options Outstanding Weighted Average Weighted Average Range of Exercise Prices Number Remaining Life Exercise Price $2.13 - 6.99 21,000 6.4 years $ 3.13 $7.00 15,000 2.2 years $ 7.00 $7.01 - 10.08 9,000 1.4 years $ 8.62 $2.13 - 10.08 45,000 4.0 years $ 5.52 Options Exercisable Weighted Average Range of Exercise Prices Number Exercise Price $2.13 - 6.99 18,000 $ 3.30 $7.00 15,000 $ 7.00 $7.01 -10.08 9,000 $ 8.62 $2.13 - 10.08 42,000 $ 5.76 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Supplemental Balance Sheet Information | |
Schedule of supplemental balance sheet information | June 30, 2019 2018 Inventories Work in progress $ 288,828 $ 388,252 Component parts 7,151,228 6,775,870 Finished goods 1,693,974 2,285,836 Reserve for obsolete and excess inventory (1,800,935) (1,619,417) $ 7,333,095 $ 7,830,541 Estimated Useful Life (years) Property, plant and equipment Machinery and equipment 3‑10 $ 18,073,352 $ 18,073,352 Buildings 28‑35 13,055,628 13,055,628 Land and land improvements 5‑7 919,566 919,566 Total property, plant and equipment at cost 32,048,546 32,048,546 Less accumulated depreciation and amortization (28,047,465) (27,225,397) $ 4,001,081 $ 4,823,149 Depreciation and amortization expense was approximately $0.8 million, $0.9 million, and $1.0 million for the fiscal years ended June 30, 2019, 2018 and 2017, respectively. Other accrued liabilities Accrued compensation expense $ 1,149,210 $ 1,060,777 Customer deposits 562,905 370,885 Other 382,197 419,021 $ 2,094,312 $ 1,850,683 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Segment Information | |
Schedule of Disaggregation information of sales by region, and by product | Disaggregation information of sales by region, and by product, are as follows: Sales by Region 2019 2018 2017 Domestic United States $ 23,541,614 $ 25,711,912 $ 26,258,439 Europe 877,308 1,428,245 951,441 Canada 758,145 795,357 690,010 Latin America 2,450,969 1,855,013 2,087,670 Middle East 464,470 857,066 694,387 Far East 3,259,905 3,107,339 2,821,895 Other International 29,110 5,021 8,188 $ 31,381,521 $ 33,759,953 $ 33,512,030 Sales by Product 2019 2018 2017 Respiratory care products $ 8,993,216 $ 9,037,704 $ 9,105,694 Medical gas equipment 16,031,109 17,645,413 17,660,524 Emergency medical products 6,357,196 7,076,836 6,745,812 $ 31,381,521 $ 33,759,953 $ 33,512,030 |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Quarterly Financial Data (unaudited) | |
Schedule of quarterly financial data | Summarized quarterly financial data for fiscal 2019 and 2018 appears below (all amounts in thousands except per share amounts): June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Three months ended, 2019 2019 2018 2018 2018 2018 2017 2017 Net sales $ 7,690 $ 8,316 $ 8,107 $ 7,269 $ 8,677 $ 8,467 $ 8,719 $ 7,897 Gross profit 1,405 1,550 1,205 879 1,951 1,233 1,909 1,357 Loss from operations (433) (353) (762) (1,226) (97) (888) (244) (767) Net income (loss) (474) 378 (779) (1,235) (143) (901) (381) (767) Basic earnings (loss) per share (0.12) 0.09 (0.19) (0.31) (0.04) (0.22) (0.09) (0.19) Diluted earnings (loss) per share (0.12) 0.09 (0.19) (0.31) (0.04) (0.22) (0.09) (0.19) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of information is necessary to calculate earnings per share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |||||||||||
Net loss, as reported | $ (474,000) | $ 378,000 | $ (779,000) | $ (1,235,000) | $ (143,000) | $ (901,000) | $ (381,000) | $ (767,000) | $ (2,109,685) | $ (2,192,170) | $ (2,088,666) |
Weighted average common shares outstanding | 4,013,537 | 4,013,537 | 4,013,537 | ||||||||
Effect of dilutive stock options | 0 | 0 | 0 | ||||||||
Weighted average diluted common shares outstanding | 4,013,537 | 4,013,537 | 4,013,537 | ||||||||
Net loss per common share | |||||||||||
Basic (in dollars per share) | $ (0.12) | $ 0.09 | $ (0.19) | $ (0.31) | $ (0.04) | $ (0.22) | $ (0.09) | $ (0.19) | $ (0.53) | $ (0.55) | $ (0.52) |
Diluted (in dollars per share) | $ (0.12) | $ 0.09 | $ (0.19) | $ (0.31) | $ (0.04) | $ (0.22) | $ (0.09) | $ (0.19) | $ (0.53) | $ (0.55) | $ (0.52) |
Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive | 0 | 0 | 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of the weighted average assumptions utilized in the Black-Scholes option pricing model for options granted (Details) - $ / shares | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |||
Weighted-average fair value | $ 1.06 | $ 0.99 | $ 0.86 |
Weighted-average volatility | 48.00% | 44.00% | 37.00% |
Weighted-average expected life (in years) | 6 years | 6 years | 6 years |
Weighted-average risk-free interest rate | 3.03% | 2.11% | 1.74% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($)shares | |
Advertising Expense | $ 0 | $ 2,000 | $ 5,550 |
FIFO Inventory Amount | 2,308,377 | 2,376,537 | |
Decreases In Cost Of Goods Sold | 120,965 | 242,885 | 90,510 |
Inventory Valuation Reserves | $ 1,800,935 | 1,619,417 | |
Entity Number of Employees | 181 | ||
Collective Bargaining Period Expiry Date | May 31, 2021 | ||
Health Care Insurance Accrued Liabilities | $ 210,000 | 180,000 | |
Research and Development Expense | 459,455 | 472,077 | 410,458 |
Share-based Compensation | 3,097 | $ 2,830 | $ 2,491 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 1,000 | ||
Weighted Average Number of Shares Outstanding, Basic and Diluted | shares | 4,013,537 | 4,013,537 | 4,013,537 |
Effective Income Tax Rate Reconciliation, Share-based Compensation, Excess Tax Benefit, Amount | $ 1,000 | $ 1,000 | $ 1,000 |
Minimum [Member] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Maximum [Member] | |||
Property, Plant and Equipment, Useful Life | 35 years | ||
Collective Bargaining Agreement [Member] | |||
Entity Number of Employees | 108 |
Financing (Details)
Financing (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Feb. 27, 2017 | Jun. 30, 2019 | |
Debt Instrument [Line Items] | ||
Line of Credit Facility, Expiration Date | Feb. 27, 2021 | |
Line of Credit Facility, Frequency of Payment and Payment Terms | pay a minimum amount of .25% (25 basis points) per month on the maximum availability ($5,000 per month). | |
Debt Instrument, Interest Rate, Stated Percentage | 20.00% | |
Summit Financial Resources Lp [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line Of Credit Facility, Maximum Borrowing Capacity | $ 2,000,000 | |
Debt Instrument, Basis Spread on Variable Rate | 2.00% | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,600,000 | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.47% | |
Summit Financial Resources Lp [Member] | Revolving Credit Facility [Member] | Prime Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Effective Percentage | 5.50% |
Lease Commitments - Summary of
Lease Commitments - Summary of Minimum lease payments under operating leases (Details) | Jun. 30, 2019USD ($) |
Lease Commitments | |
2020 | $ 74,532 |
Total minimum lease payments | $ 74,532 |
Lease Commitments - Additional
Lease Commitments - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Lease Commitments | |||
Operating Leases, Rent Expense, Net | $ 109,160 | $ 131,764 | $ 132,657 |
Income Taxes - Summary of provi
Income Taxes - Summary of provision for income taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Current: | ||||
Federal | $ 0 | $ 0 | $ 0 | |
State | 10,676 | 9,938 | 7,299 | |
Total current | 10,676 | 9,938 | 7,299 | |
Deferred: | ||||
Federal | (451,591) | 424,038 | (625,953) | |
State | (65,877) | 91,789 | (84,424) | |
Valuation Allowance | 536,240 | (352,727) | 739,578 | |
Total deferred | 18,772 | 163,100 | 29,201 | |
Total | $ 136,386 | $ 29,448 | $ 173,038 | $ 36,500 |
Income Taxes - Summary of recon
Income Taxes - Summary of reconciliation of income taxes, with the amounts computed at the statutory federal rate (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Taxes | ||||
Computed tax at federal statutory rate | $ (436,850) | $ (555,261) | $ (697,736) | |
State income taxes, net of federal tax (benefit) provision | (61,974) | (54,471) | (49,124) | |
Non deductible expenses | 7,699 | 9,775 | 15,491 | |
Federal research credit | (22,906) | (16,880) | (9,661) | |
Net operating loss carryforward adjustment | 0 | 131,244 | 0 | |
State NOLs | 6,772 | (39,979) | 39,697 | |
Stock Options - Expired | 2,536 | 4,424 | 15,308 | |
Changes resulting from the TCJA | 0 | 1,080,362 | 0 | |
Other, net | (2,069) | (33,449) | (17,053) | |
Valuation Allowance | 536,240 | (352,727) | 739,578 | |
Total | $ 136,386 | $ 29,448 | $ 173,038 | $ 36,500 |
Income Taxes - Summary of defer
Income Taxes - Summary of deferred tax assets and liabilities recorded on the balance sheet (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Deferred tax assets | ||
Bad debts | $ 25,500 | $ 25,500 |
Intangible assets | 1,935 | 2,530 |
Accrued liabilities | 262,970 | 257,692 |
Stock options | 28,568 | 30,411 |
Net operating loss and credit carryforwards | 3,914,655 | 3,511,943 |
Total Assets | 4,233,628 | 3,828,076 |
Deferred tax liabilities | ||
Prepaid expenses | 10,937 | 11,606 |
Inventory | 652,251 | 697,669 |
Depreciation | 233,142 | 317,360 |
Other | 99,575 | 81,186 |
Total Liabilities | 995,905 | 1,107,821 |
Valuation Allowance | (2,735,832) | (2,199,592) |
Total deferred taxes | $ 501,891 | $ 520,663 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Schedule Of Income Tax Disclosure [Line Items] | ||||||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $ 13,200,000 | $ 13,200,000 | ||||
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $ 9,500,000 | 9,500,000 | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | ||||
Income Tax Expense (Benefit) | $ 136,386 | 29,448 | $ 173,038 | $ 36,500 | ||
Revaluation Of Valuation Allowance | $ 136,386 | |||||
Maximum [Member] | ||||||
Schedule Of Income Tax Disclosure [Line Items] | ||||||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $ 1,500,000 | $ 1,500,000 | ||||
Domestic Tax Authority [Member] | Minimum [Member] | ||||||
Schedule Of Income Tax Disclosure [Line Items] | ||||||
Operating Loss Carryforward Expiration Date | 2031 | |||||
Domestic Tax Authority [Member] | Maximum [Member] | ||||||
Schedule Of Income Tax Disclosure [Line Items] | ||||||
Operating Loss Carryforward Expiration Date | 2038 | |||||
State and Local Jurisdiction [Member] | Minimum [Member] | ||||||
Schedule Of Income Tax Disclosure [Line Items] | ||||||
Operating Loss Carryforward Expiration Date | 2019 | |||||
State and Local Jurisdiction [Member] | Maximum [Member] | ||||||
Schedule Of Income Tax Disclosure [Line Items] | ||||||
Operating Loss Carryforward Expiration Date | 2038 |
Employee Retirement Benefits -
Employee Retirement Benefits - Summary of multi-employer pension plan (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Employee Retirement Benefits | |||
Contributions by the Company | $ 236,256 | $ 269,928 | $ 277,127 |
Expiration Date of CBA | May 31, 2021 | ||
Surcharge Imposed | No |
Employee Retirement Benefits _2
Employee Retirement Benefits - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Employee Retirement Benefits | |||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 190,965 | $ 197,999 | $ 204,951 |
Percentage Of Eligible Salaried Employees Annual Income | 2.00% | ||
Percentage Of Annual Income To Plan | 25.00% | ||
Percentage Of Employee Deferrals | 8.00% |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of stock option plan activity under employee plans and the directors plans (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock Based Compensation | |||
Beginning Balance, Shares | 45,000 | 45,000 | 50,000 |
Options Granted, Shares | 3,000 | 3,000 | 3,000 |
Options Exercised, Shares | 0 | 0 | 0 |
Options Forfeited or Expired, Shares | (3,000) | (3,000) | (8,000) |
Ending Balance, Shares | 45,000 | 45,000 | 45,000 |
Exercisable, Shares | 42,000 | ||
Beginning Balance, Weighted Average Exercise Price | $ 5.92 | $ 6.67 | $ 7.56 |
Options Granted, Weighted Average Exercise Price | 2.13 | 2.22 | 2.26 |
Options Exercised, Weighted Average Exercise Price | 0 | 0 | 0 |
Options Forfeited or Expired, Weighted Average Exercise Price | 8.10 | 13.46 | 10.59 |
Ending Balance, Weighted Average Exercise Price | 5.52 | $ 5.92 | $ 6.67 |
Exercisable, Weighted Average Exercise Price | $ 5.76 | ||
Options, Weighted Average Remaining Contractual Terms (years) | 4 years | 4 years 3 months 18 days | 4 years 7 months 6 days |
Exercisable, Weighted Average Remaining Contractual Terms (years) | 3 years 7 months 6 days | ||
Options, Aggregate Intrinsic Value | $ 0 | $ 0 | $ 0 |
Exercisable, Aggregate Intrinsic Value | $ 0 |
Stock Based Compensation - Su_2
Stock Based Compensation - Summary of additional information for options outstanding and exercisable (Details) | 12 Months Ended |
Jun. 30, 2019$ / sharesshares | |
2.22 - 6.99 Exercise Prices | |
Schedule Of Share Based Compensation Stock Options Activity [Line Items] | |
Options Outstanding, Number | shares | 21,000 |
Options Outstanding, Weighted Average Remaining Life | 6 years 4 months 24 days |
Option Outstanding, Weighted Average Exercise Price | $ / shares | $ 3.13 |
Options Exercisable, Number | shares | 18,000 |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 3.30 |
7.0 Exercise Prices | |
Schedule Of Share Based Compensation Stock Options Activity [Line Items] | |
Options Outstanding, Number | shares | 15,000 |
Options Outstanding, Weighted Average Remaining Life | 2 years 2 months 12 days |
Option Outstanding, Weighted Average Exercise Price | $ / shares | $ 7 |
Options Exercisable, Number | shares | 15,000 |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 7 |
7.01 - 10.08 Exercise Prices | |
Schedule Of Share Based Compensation Stock Options Activity [Line Items] | |
Options Outstanding, Number | shares | 9,000 |
Options Outstanding, Weighted Average Remaining Life | 1 year 4 months 24 days |
Option Outstanding, Weighted Average Exercise Price | $ / shares | $ 8.62 |
Options Exercisable, Number | shares | 9,000 |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 8.62 |
2.13 - 10.08 Exercise Prices | |
Schedule Of Share Based Compensation Stock Options Activity [Line Items] | |
Options Outstanding, Number | shares | 45,000 |
Options Outstanding, Weighted Average Remaining Life | 4 years |
Option Outstanding, Weighted Average Exercise Price | $ / shares | $ 5.52 |
Options Exercisable, Number | shares | 42,000 |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 5.76 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) | 12 Months Ended |
Jun. 30, 2019shares | |
Employee Plan [Member] | |
Schedule Of Share Based Compensation Stock Options Activity [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 300,000 |
Director Plan [Member] | |
Schedule Of Share Based Compensation Stock Options Activity [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 75,000 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information - Summary of inventories and property plant and equipment (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Inventories | ||
Work in progress | $ 288,828 | $ 388,252 |
Component parts | 7,151,228 | 6,775,870 |
Finished goods | 1,693,974 | 2,285,836 |
Reserve for obsolete and excess inventory | (1,800,935) | (1,619,417) |
Inventory, Net | 7,333,095 | 7,830,541 |
Property, plant and equipment | ||
Total property, plant and equipment at cost | 32,048,546 | 32,048,546 |
Less accumulated depreciation and amortization | (28,047,465) | (27,225,397) |
Property, Plant and Equipment, Net, Total | 4,001,081 | 4,823,149 |
Other accrued liabilities | ||
Accrued compensation expense | 1,149,210 | 1,060,777 |
Customer deposits | 562,905 | 370,885 |
Other | 382,197 | 419,021 |
Accrued Liabilities, Current, Total | $ 2,094,312 | 1,850,683 |
Minimum [Member] | ||
Property, plant and equipment | ||
Estimated Useful Life | 3 years | |
Maximum [Member] | ||
Property, plant and equipment | ||
Estimated Useful Life | 35 years | |
Machinery and equipment [Member] | ||
Property, plant and equipment | ||
Total property, plant and equipment at cost | $ 18,073,352 | 18,073,352 |
Machinery and equipment [Member] | Minimum [Member] | ||
Property, plant and equipment | ||
Estimated Useful Life | 3 years | |
Machinery and equipment [Member] | Maximum [Member] | ||
Property, plant and equipment | ||
Estimated Useful Life | 10 years | |
Buildings [Member] | ||
Property, plant and equipment | ||
Total property, plant and equipment at cost | $ 13,055,628 | 13,055,628 |
Buildings [Member] | Minimum [Member] | ||
Property, plant and equipment | ||
Estimated Useful Life | 28 years | |
Buildings [Member] | Maximum [Member] | ||
Property, plant and equipment | ||
Estimated Useful Life | 35 years | |
Land and Land improvements [Member] | ||
Property, plant and equipment | ||
Total property, plant and equipment at cost | $ 919,566 | $ 919,566 |
Land and Land improvements [Member] | Minimum [Member] | ||
Property, plant and equipment | ||
Estimated Useful Life | 5 years | |
Land and Land improvements [Member] | Maximum [Member] | ||
Property, plant and equipment | ||
Estimated Useful Life | 7 years |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Supplemental Balance Sheet Information | |||
Depreciation and amortization | $ 0.8 | $ 0.9 | $ 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 07, 2019 | Mar. 14, 2014 | Feb. 06, 2012 | Mar. 31, 2015 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Commitments and Contingencies | |||||||
Loss Contingency, Damages Sought, Value | $ 492,000 | $ 469,000 | $ 696,000 | ||||
Gain (Loss) Related to Litigation Settlement | $ 750,000 | $ 750,000 | $ 0 | $ 0 |
Segment Information - Summary o
Segment Information - Summary of Disaggregation information of sales by region (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 7,690,000 | $ 8,316,000 | $ 8,107,000 | $ 7,269,000 | $ 8,677,000 | $ 8,467,000 | $ 8,719,000 | $ 7,897,000 | $ 31,381,521 | $ 33,759,953 | $ 33,512,030 |
Domestic United States [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 23,541,614 | 25,711,912 | 26,258,439 | ||||||||
Europe [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 877,308 | 1,428,245 | 951,441 | ||||||||
Canada [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 758,145 | 795,357 | 690,010 | ||||||||
Latin America [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 2,450,969 | 1,855,013 | 2,087,670 | ||||||||
Middle East [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 464,470 | 857,066 | 694,387 | ||||||||
Far East [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 3,259,905 | 3,107,339 | 2,821,895 | ||||||||
Other International [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 29,110 | $ 5,021 | $ 8,188 |
Segment Information - Disaggreg
Segment Information - Disaggregation information of sales by product (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 7,690,000 | $ 8,316,000 | $ 8,107,000 | $ 7,269,000 | $ 8,677,000 | $ 8,467,000 | $ 8,719,000 | $ 7,897,000 | $ 31,381,521 | $ 33,759,953 | $ 33,512,030 |
Respiratory Care Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 8,993,216 | 9,037,704 | 9,105,694 | ||||||||
Medical Gas Equipment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 16,031,109 | 17,645,413 | 17,660,524 | ||||||||
Emergency Medical Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 6,357,196 | $ 7,076,836 | $ 6,745,812 |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) - Summary of quarterly financial data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Quarterly Financial Data (unaudited) | |||||||||||
Net sales | $ 7,690,000 | $ 8,316,000 | $ 8,107,000 | $ 7,269,000 | $ 8,677,000 | $ 8,467,000 | $ 8,719,000 | $ 7,897,000 | $ 31,381,521 | $ 33,759,953 | $ 33,512,030 |
Gross profit | 1,405,000 | 1,550,000 | 1,205,000 | 879,000 | 1,951,000 | 1,233,000 | 1,909,000 | 1,357,000 | 5,038,627 | 6,450,442 | 6,555,690 |
Loss from operations | (433,000) | (353,000) | (762,000) | (1,226,000) | (97,000) | (888,000) | (244,000) | (767,000) | (2,774,022) | (1,995,614) | (2,051,894) |
Net income (loss) | $ (474,000) | $ 378,000 | $ (779,000) | $ (1,235,000) | $ (143,000) | $ (901,000) | $ (381,000) | $ (767,000) | $ (2,109,685) | $ (2,192,170) | $ (2,088,666) |
Basic earnings (loss) per share | $ (0.12) | $ 0.09 | $ (0.19) | $ (0.31) | $ (0.04) | $ (0.22) | $ (0.09) | $ (0.19) | $ (0.53) | $ (0.55) | $ (0.52) |
Diluted earnings (loss) per share | $ (0.12) | $ 0.09 | $ (0.19) | $ (0.31) | $ (0.04) | $ (0.22) | $ (0.09) | $ (0.19) | $ (0.53) | $ (0.55) | $ (0.52) |