Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 22, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | WIRELESS TELECOM GROUP INC | |
Entity Central Index Key | 0000878828 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,300,252 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash & Cash Equivalents | $ 2,735 | $ 5,015 |
Accounts Receivable - net of reserves of $64 and $44, respectively | 8,023 | 8,638 |
Inventories - net of reserves of $998 and $1,910, respectively | 8,309 | 6,884 |
Prepaid Expenses and Other Current Assets | 890 | 1,689 |
TOTAL CURRENT ASSETS | 19,957 | 22,226 |
PROPERTY PLANT AND EQUIPMENT - NET | 2,260 | 2,578 |
OTHER ASSETS | ||
Goodwill | 9,482 | 9,778 |
Acquired Intangible Assets, net | 2,325 | 3,206 |
Deferred Income Taxes | 5,901 | 5,592 |
Right Of Use Assets | 1,548 | |
Other | 621 | 787 |
TOTAL OTHER ASSETS | 19,877 | 19,363 |
TOTAL ASSETS | 42,094 | 44,167 |
CURRENT LIABILITIES | ||
Short Term Debt | 2,977 | 2,016 |
Accounts Payable | 2,634 | 3,252 |
Short Term Leases | 441 | |
Accrued Expenses and Other Current Liabilities | 2,804 | 6,083 |
Deferred Revenue | 110 | 103 |
TOTAL CURRENT LIABILITIES | 8,966 | 11,454 |
LONG TERM LIABILITIES | ||
Long Term Leases | 1,124 | |
Other Long Term Liabilities | 83 | 115 |
Deferred Tax Liability | 594 | 616 |
TOTAL LONG TERM LIABILITIES | 1,801 | 731 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Preferred Stock, $.01 par value, 2,000,000 shares authorized, none issued | ||
Common Stock, $.01 par value, 75,000,000 shares authorized, 34,488,252 and 34,393,252 shares issued, 21,300,252 and 21,205,251 shares outstanding | 345 | 344 |
Additional Paid in Capital | 49,038 | 48,479 |
Retained Earnings | 6,907 | 7,556 |
Treasury Stock at Cost, 13,188,000 shares | (24,509) | (24,509) |
Accumulated Other Comprehensive Income/(Loss) | (454) | 112 |
TOTAL SHAREHOLDERS' EQUITY | 31,327 | 31,982 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 42,094 | $ 44,167 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, reserves | $ 64 | $ 44 |
Inventories, reserves | $ 998 | $ 1,910 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 34,488,252 | 34,393,252 |
Common stock, shares outstanding | 21,300,252 | 21,205,251 |
Treasury stock, shares | 13,188,000 | 13,188,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
NET REVENUES | $ 10,812 | $ 14,019 | $ 37,353 | $ 40,697 |
COST OF REVENUES | 5,987 | 7,555 | 20,668 | 21,794 |
GROSS PROFIT | 4,825 | 6,464 | 16,685 | 18,903 |
Operating Expenses | ||||
Research and Development | 1,343 | 1,191 | 4,556 | 3,660 |
Sales and Marketing | 1,753 | 1,795 | 5,718 | 5,639 |
General and Administrative | 2,407 | 2,559 | 7,341 | 7,870 |
Loss on Change in Fair Value of Contingent Consideration | 213 | |||
Total Operating Expenses | 5,503 | 5,545 | 17,615 | 17,382 |
Operating Income/(Loss) | (678) | 919 | (930) | 1,521 |
Other Income/(Expense) | 108 | (60) | 273 | (73) |
Interest Expense | (60) | (115) | (248) | (349) |
Income/(Loss) Before Taxes | (630) | 744 | (905) | 1,099 |
Tax Provision/(Benefit) | (169) | 186 | (256) | 347 |
Net Income/(Loss) | (461) | 558 | (649) | 752 |
Other Comprehensive Income/(Loss): | ||||
Foreign Currency Translation Adjustments | (491) | (217) | (566) | (601) |
Comprehensive Income/(Loss) | $ (952) | $ 341 | $ (1,215) | $ 151 |
Earnings/(Loss) Per Share: | ||||
Basic | $ (0.02) | $ 0.03 | $ (0.03) | $ 0.04 |
Diluted | $ (0.02) | $ 0.03 | $ (0.03) | $ 0.03 |
Weighted Average Shares Outstanding: | ||||
Basic | 20,866,000 | 20,972,000 | 20,854,000 | 20,820,000 |
Diluted | 20,866,000 | 21,555,000 | 20,854,000 | 21,582,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS PROVIDED/(USED) BY OPERATING ACTIVITIES | ||
Net Income/(Loss) | $ (649) | $ 752 |
Adjustments to reconcile net income/(loss) to net cash provided/(used) by operating activities: | ||
Depreciation and Amortization | 1,671 | 1,773 |
Amortization of Debt Issuance Fees | 47 | 59 |
Share-based Compensation Expense | 560 | 505 |
Deferred Rent | (18) | 9 |
Deferred Income Taxes | (309) | 34 |
Provision for Doubtful Accounts | 20 | 23 |
Inventory Reserves | 139 | 204 |
Changes in Assets and Liabilities: | ||
Accounts Receivable | 520 | (2,552) |
Inventories | (1,627) | (1,154) |
Prepaid Expenses and Other Assets | 993 | (99) |
Accounts Payable | (567) | (487) |
Payment of Contingent Consideration | (772) | |
Accrued Expenses and Other Current Liabilities | (1,635) | 2,284 |
Net Cash Provided/(Used) by Operating Activities | (1,627) | 1,351 |
CASH FLOWS USED BY INVESTING ACTIVITIES | ||
Capital Expenditures | (339) | (633) |
Acquisition of Business | (426) | (805) |
Net Cash Used by Investing Activities | (765) | (1,438) |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | ||
Revolver Borrowings | 27,408 | 29,046 |
Revolver Repayments | (26,333) | (27,681) |
Term Loan Repayments | (114) | (114) |
Payment of Contingent Consideration | (782) | |
Proceeds from Exercise of Stock Options | 288 | |
Net Cash Provided by Financing Activities | 179 | 1,539 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (67) | (136) |
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | (2,280) | 1,316 |
Cash and Cash Equivalents, at Beginning of Period | 5,015 | 2,458 |
CASH AND CASH EQUIVALENTS, AT END OF PERIOD | 2,735 | 3,774 |
SUPPLEMENTAL INFORMATION: | ||
Cash Paid During the Period for Interest | 143 | 128 |
Cash Paid During the Period for Income Taxes | $ 69 | $ 33 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income/(Loss) [Member] | Total |
Balance at Dec. 31, 2017 | $ 339 | $ 47,494 | $ 7,176 | $ (20,910) | $ 1,004 | $ 35,103 |
Balance, shares at Dec. 31, 2017 | 33,868,252 | |||||
Adoption of Accounting Standard | 345 | 345 | ||||
Balance at Jan. 02, 2018 | $ 339 | 47,494 | 7,521 | (20,910) | 1,004 | 35,448 |
Balance, shares at Jan. 02, 2018 | 33,868,252 | |||||
Balance at Dec. 31, 2017 | $ 339 | 47,494 | 7,176 | (20,910) | 1,004 | 35,103 |
Balance, shares at Dec. 31, 2017 | 33,868,252 | |||||
Net Income/(Loss) | 752 | |||||
Balance at Sep. 30, 2018 | $ 343 | 48,283 | 8,273 | (24,509) | 403 | 32,793 |
Balance, shares at Sep. 30, 2018 | 34,243,252 | |||||
Balance at Jan. 02, 2018 | $ 339 | 47,494 | 7,521 | (20,910) | 1,004 | 35,448 |
Balance, shares at Jan. 02, 2018 | 33,868,252 | |||||
Net Income/(Loss) | 374 | 374 | ||||
Issuance of Shares in Connection with Stock Options Exercised | $ 3 | 285 | 288 | |||
Issuance of Shares in Connection with Stock Options Exercised, shares | 300,000 | |||||
Forfeiture of Shares Issued in Connection with CommAgility Acquisition | (3,599) | (3,599) | ||||
Share-based Compensation Expense | 188 | 188 | ||||
Cumulative Translation Adjustment | 579 | 579 | ||||
Balance at Mar. 31, 2018 | $ 342 | 47,967 | 7,895 | (24,509) | 1,583 | 33,278 |
Balance, shares at Mar. 31, 2018 | 34,168,252 | |||||
Net Income/(Loss) | (180) | (180) | ||||
Share-based Compensation Expense | 160 | 160 | ||||
Cumulative Translation Adjustment | (962) | (962) | ||||
Balance at Jun. 30, 2018 | $ 342 | 48,127 | 7,715 | (24,509) | 621 | 32,296 |
Balance, shares at Jun. 30, 2018 | 34,168,252 | |||||
Net Income/(Loss) | 558 | 558 | ||||
Issuance of Restricted Stock | $ 1 | (1) | ||||
Issuance of Restricted Stock, shares | 75,000 | |||||
Share-based Compensation Expense | 157 | 157 | ||||
Cumulative Translation Adjustment | (218) | (218) | ||||
Balance at Sep. 30, 2018 | $ 343 | 48,283 | 8,273 | (24,509) | 403 | 32,793 |
Balance, shares at Sep. 30, 2018 | 34,243,252 | |||||
Balance at Dec. 31, 2018 | $ 344 | 48,479 | 7,556 | (24,509) | 112 | 31,982 |
Balance, shares at Dec. 31, 2018 | 34,393,252 | |||||
Net Income/(Loss) | (344) | (344) | ||||
Issuance of Restricted Stock | $ 1 | (1) | ||||
Issuance of Restricted Stock, shares | 95,000 | |||||
Share-based Compensation Expense | 209 | 209 | ||||
Cumulative Translation Adjustment | 305 | 305 | ||||
Balance at Mar. 31, 2019 | $ 345 | 48,687 | 7,212 | (24,509) | 417 | 32,152 |
Balance, shares at Mar. 31, 2019 | 34,488,252 | |||||
Balance at Dec. 31, 2018 | $ 344 | 48,479 | 7,556 | (24,509) | 112 | 31,982 |
Balance, shares at Dec. 31, 2018 | 34,393,252 | |||||
Net Income/(Loss) | (649) | |||||
Balance at Sep. 30, 2019 | $ 345 | 49,038 | 6,907 | (24,509) | (454) | 31,327 |
Balance, shares at Sep. 30, 2019 | 34,488,252 | |||||
Balance at Mar. 31, 2019 | $ 345 | 48,687 | 7,212 | (24,509) | 417 | 32,152 |
Balance, shares at Mar. 31, 2019 | 34,488,252 | |||||
Net Income/(Loss) | 156 | 156 | ||||
Share-based Compensation Expense | 191 | 191 | ||||
Cumulative Translation Adjustment | (380) | (380) | ||||
Balance at Jun. 30, 2019 | $ 345 | 48,878 | 7,368 | (24,509) | 37 | 32,119 |
Balance, shares at Jun. 30, 2019 | 34,488,252 | |||||
Net Income/(Loss) | (461) | (461) | ||||
Share-based Compensation Expense | 160 | 160 | ||||
Cumulative Translation Adjustment | (491) | (491) | ||||
Balance at Sep. 30, 2019 | $ 345 | $ 49,038 | $ 6,907 | $ (24,509) | $ (454) | $ 31,327 |
Balance, shares at Sep. 30, 2019 | 34,488,252 |
Summary of Significant Accounti
Summary of Significant Accounting Principles and Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Principles and Policies | NOTE 1 - Summary of Significant Accounting Principles and Policies Basis of Presentation and Preparation Wireless Telecom Group, Inc., a New Jersey corporation, together with its subsidiaries (“we”, “us”, “our” or the “Company”), is a global designer and manufacturer of advanced radio frequency (“RF”) and microwave components, modules, systems and instruments and currently markets its products and services worldwide under the Boonton, Microlab, Noisecom and CommAgility brands. Serving the wireless, telecommunication, satellite, military, aerospace, and semiconductor industries, Wireless Telecom Group products enable innovation across a wide range of traditional and emerging wireless technologies. With a unique set of high-performance products including peak power meters, signal analyzers, signal processing modules, long-term evolution (“LTE”) physical layer (“PHY”) and stack software, power splitters and combiners, global positioning system (“GPS”) splitters and repeaters, public safety monitors, noise sources, and programmable noise generators, Wireless Telecom Group supports the development, testing, and deployment of wireless technologies around the globe. The consolidated balance sheet as of September 30, 2019, the consolidated statements of operations and comprehensive income/(loss) for the three and nine months ended September 30, 2019 and 2018, the consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018 and the consolidated statement of shareholders’ equity for the three and nine months ended September 30, 2019 and 2018 have been prepared by the Company without audit. The consolidated financial statements include the accounts of Wireless Telecom Group, Inc., doing business as and operating under the trade name, Noisecom, and its wholly owned subsidiaries including Boonton Electronics Corporation (“Boonton”), Microlab/FXR LLC (“Microlab”), Wireless Telecommunications Ltd. and CommAgility Limited (“CommAgility”). All intercompany transactions and balances have been eliminated in consolidation. The Company presents its operations in three reportable segments: (1) Network Solutions, (2) Test and Measurement and (3) Embedded Solutions. The Network Solutions segment is comprised of the operations of Microlab. The Test and Measurement segment is comprised of the operations of Boonton and Noisecom. The Embedded Solutions segment is comprised of the operations of CommAgility. It is suggested that these interim consolidated financial statements be read in conjunction with the audited consolidated financial statements, and the notes thereto, included in the Company’s latest annual report (Form 10-K). The Company’s fiscal periods are based on the calendar year. Except as otherwise specified, references to “third quarter(s)” or “three months” indicate the Company’s fiscal periods ending September 30, 2019 and September 30, 2018, and references to “year-end” indicate the fiscal year ended December 31, 2018. Consolidated Financial Statements In the opinion of management, the accompanying consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries, which are necessary to fairly present the Company’s results for the interim periods being presented. The accounting policies followed by the Company are set forth in Note 1 to the Company’s consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2018. Specific reference is made to that report since certain information and footnote disclosures normally included in financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been reduced for interim periods in accordance with SEC rules. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019. Reclassification Certain prior period amounts have been reclassified to conform with the current period presentation. Concentration Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The majority of the Company’s cash balance is held outside of the United States. Credit evaluations are performed on customers requiring credit over a certain amount. Credit risk is mitigated to a lesser extent through collateral such as letters of credit, bank guarantees or payment terms like cash in advance. For the three and nine months ended September 30, 2019, one customer accounted for approximately 19% and 29% of the Company’s consolidated revenues, respectively. For the three and nine months ended September 30, 2018, one customer accounted for approximately 23% and 21% of the Company’s consolidated revenues, respectively. At September 30, 2019 and December 31, 2018, one customer accounted for 18% and 32% of consolidated gross accounts receivable, respectively. Subsequent Events Management has evaluated subsequent events and determined that there were no subsequent events or transactions requiring recognition or disclosure in the consolidated financial statements, and the notes thereto, through the date the financial statements were issued. |
Accounting Pronouncements
Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Pronouncements | NOTE 2 – Accounting Pronouncements Recently Adopted Accounting Standards In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) The Company adopted the requirements of the new standard effective January 1, 2019 using the modified retrospective transition method, which applies the provisions of the standard at the effective date without adjustment to the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard: ● Carry forward of historical lease classifications and accounting treatment; ● Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and ● The option to not separate lease and non-lease components for certain equipment lease categories such as office printers and copiers. Adoption of this standard resulted in the recognition of operating lease right-of-use assets and corresponding lease liabilities of $1.9 million on the consolidated balance sheet as of January 1, 2019. The standard did not materially impact operating results or liquidity. Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included in Note 3. On June 20, 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Compensation - Stock Compensation Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees Except for the change in accounting policies for leases as a result of adopting Topic 842, there have been no other changes to our significant accounting policies as described in the 2018 Form 10-K that had a material impact on our consolidated financial statements and related notes. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | NOTE 3 – Leases The Company’s lease agreements consist of building leases for its operating locations and office equipment leases for printers and copiers with lease terms that range from less than 12 months to 8 years. At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. The Company’s leases for office equipment such as printers and copiers contain lease and non-lease components (i.e. maintenance). The Company accounts for lease and non-lease components of office equipment as a single lease component. All of the Company’s leases are operating leases and are presented as right of use lease asset, short term lease liability and long term lease liability on the consolidated balance sheet as of September 30, 2019. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rate. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the lease term and is included in cost of revenues and general and administrative expenses on the consolidated statement of operations and comprehensive income/(loss). An initial right-of-use asset of $1.9 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard. Subsequent to adoption of the new standard there were no new right-of-use assets recognized during the nine months ended September 30, 2019. Cash paid for amounts included in the present value of operating lease liabilities was $0.4 million during the nine months ended September 30, 2019 and is included in operating cash flows. Operating lease costs were $0.2 million and $0.6 million during the three and nine months ended September 2019, respectively. The following table presents information about the amount and timing of cash flows arising from the Company’s operating leases as of September 30, 2019. (in thousands) September 30, 2019 Maturity of Lease Liabilities 2019 (remaining) $ 128 2020 511 2021 474 2022 488 2023 123 Thereafter - Total Undiscounted operating lease payments 1,724 Less: imputed interest (159 ) Present Value of operating lease liabilities $ 1,565 Other information Weighted-average remaining lease term for operating leases 41 Weighted-average discount rate for operating leases 5.74 % |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 4 – Revenue Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company’s performance obligations are satisfied either over time or at a point in time. Revenue from performance obligations that transferred at a point in time accounted for approximately 99% of the Company’s total revenue for the three and nine months ended September 30, 2019. Revenue from performance obligations that transferred at a point in time accounted for approximately 95% of the Company’s total revenue for both the three and nine months ended September 30, 2018. Nature of Products and Services Hardware The Company generally has one performance obligation in its arrangements involving the sales of radio frequency solutions in the Network Solutions segment, digital signal processing hardware in the Embedded Solutions segment and noise generators and components and power meter and analyzers in the Test and Measurement segment. When the terms of a contract include the transfer of multiple products, each distinct product is identified as a separate performance obligation. Generally, satisfaction occurs when control of the promised goods is transferred to the customer in exchange for consideration in an amount for which we expect to be entitled. Generally, control is transferred when legal title of the asset moves from the Company to the customer. We sell our products to a customer based on a purchase order, and the shipping terms per each individual order are primarily used to satisfy the single performance obligation. However, in order to determine control has transferred to the customer, the Company also considers: ● when the Company has a present right to payment for the asset ● when the Company has transferred physical possession of the asset to the customer ● when the customer has the significant risks and rewards of ownership of the asset ● when the customer has accepted the asset Software Arrangements involving licenses of software in the Embedded Solutions segment may involve multiple performance obligations, most notably subsequent releases of the software. The Company has concluded that each software release in a multiple deliverable arrangement in the Embedded Solutions segment is a distinct performance obligation and, accordingly, transaction price is allocated to each release when the customer obtains control of the software. Performance obligations that are not distinct at contract inception are combined. Specifically, with the Company’s sales of software, contracts that include customization may result in the combination of the customization services with the license as one distinct performance obligation and recognized over time. The duration of these performance obligations are typically one year or less. Services Arrangements involving calibration and repair services in the Company’s Test and Measurement segment are generally considered a single performance obligation and are recognized as the services are rendered. Shipping and Handling Shipping and handling activities performed after the customer obtains control are accounted for as fulfillment activities and recognized as cost of revenues. Significant Judgments For the Company’s more complex software and services arrangements significant judgment is required in determining whether licenses and services are distinct performance obligations that should be accounted for separately, or are not distinct, and thus accounted for together. Further, in cases where we determine that performance obligations should be accounted for separately, judgment is required to determine the standalone selling price for each distinct performance obligation. Certain of the Company’s shipments include a limited return right. In those cases the Company recognizes revenue net of expected returns. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract assets or contract liabilities (deferred revenue) on the Company’s consolidated balance sheet. The Company records a contract asset when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Contract assets are recorded in prepaid expenses and other current assets. There were no contract assets as of September 30, 2019 and $0.3 million as of December 31, 2018. Deferred revenue is $0.1 million as of September 30, 2019 and December 31, 2018. Disaggregated Revenue We disaggregate our revenue from contracts with customers by product family and geographic location for each of our segments as we believe it best depicts how the nature, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below (in thousands). Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Network Test & Embedded Total Network Test & Embedded Total Net Revenues by Revenue Type Passive RF Components $ 5,185 $ - $ - $ 5,185 $ 16,518 $ - $ - $ 16,518 Noise Generators and Components - 1,337 - 1,337 - 4,362 - 4,362 Power Meters and Analyzers - 1,323 - 1,323 - 3,946 - 3,946 Signal Processing Hardware - - 2,506 2,506 - - 11,154 11,154 Software Licenses - - 5 5 - - 11 11 Services - 336 120 456 - 911 451 1,362 Total Net Revenue $ 5,185 $ 2,996 $ 2,631 $ 10,812 $ 16,518 $ 9,219 $ 11,616 $ 37,353 Net Revenues by Geographic Areas Americas $ 4,429 $ 2,153 $ 595 $ 7,177 $ 14,485 $ 6,220 $ 918 $ 21,623 EMEA 699 474 2,011 3,184 1,872 1,579 10,652 14,103 APAC 57 369 25 451 161 1,420 46 1,627 Total Net Revenue $ 5,185 $ 2,996 $ 2,631 $ 10,812 $ 16,518 $ 9,219 $ 11,616 $ 37,353 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Network Test & Embedded Total Network Test & Embedded Total Net Revenues by Revenue Type Passive RF Components $ 6,034 $ - $ - $ 6,034 $ 17,181 $ - $ - $ 17,181 Noise Generators and Components - 1,549 - 1,549 - 4,636 - 4,636 Power Meters and Analyzers - 1,795 - 1,795 - 5,349 - 5,349 Signal Processing Hardware - - 3,357 3,357 - - 9,818 9,818 Software Licenses - - 192 192 - - 703 703 Services - 339 753 1,092 - 995 2,015 3,010 Total Net Revenue $ 6,034 $ 3,683 $ 4,302 $ 14,019 $ 17,181 $ 10,980 $ 12,536 $ 40,697 Net Revenues by Geographic Areas Americas $ 5,232 $ 2,949 $ 795 $ 8,976 $ 14,369 $ 7,706 $ 2,980 $ 25,055 EMEA 612 305 3,269 4,186 2,044 1,268 9,119 12,431 APAC 190 429 238 857 768 2,006 437 3,211 Total Net Revenue $ 6,034 $ 3,683 $ 4,302 $ 14,019 $ 17,181 $ 10,980 $ 12,536 $ 40,697 |
Acquisition of CommAgility
Acquisition of CommAgility | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisition of CommAgility | NOTE 5 – Acquisition of CommAgility On February 17, 2017, Wireless Telecommunications, Ltd. (the “Acquisition Subsidiary”), a company incorporated in England and Wales which is a wholly owned subsidiary of Wireless Telecom Group, Inc., completed the acquisition of all the issued shares in CommAgility from CommAgility’s founders. The Acquisition was completed pursuant to the terms of a Share Purchase Agreement, dated February 17, 2017, and entered into by and among the Company, the Acquisition Subsidiary and the founders. The Company paid $11.3 million in cash on acquisition date and issued 3,487,528 shares of newly issued Company common stock (“Consideration Shares”) with an acquisition date fair value of $6.0 million. In addition to the acquisition date cash purchase price, the sellers were paid an additional $2.5 million in the form of deferred purchase price installments beginning in March 2017 through January 2019 and were paid an additional purchase price adjustment based on working capital and cash levels of $1.4 million. Lastly, the sellers earned $1.5 million in contingent consideration as a result of meeting certain financial targets for the year ended December 31, 2018. The contingent consideration was paid in March 2019. Approximately $0.7 million of the contingent consideration payment is classified as cash used by operating activities in the consolidated statement of cash flows for the nine months ended September 2019 and approximately $0.8 million is classified as cash used for financing activities in the consolidated statement of cash flows for the nine months ended September 2019 in accordance with ASU 2016-15 Classification of Certain Cash Receipts and Cash Payments Pursuant to the Share Purchase Agreement, 2,092,516 of the Consideration Shares were subject to forfeiture and return to the Company if (a) 2017 Adjusted EBITDA, as defined, generated by CommAgility was less than £2.4 million; or (b) 2018 Adjusted EBITDA, as defined, generated by CommAgility was less than £2.4 million (in each case as determined by an audit of CommAgility conducted by the accountants of the Acquisition Subsidiary in accordance with the terms of the Share Purchase Agreement). In March 2018 all consideration shares, which are valued at $3.6 million, were forfeited as the 2017 EBITDA threshold was not achieved. The forfeited shares are recorded as treasury stock in the consolidated statement of shareholders’ equity as of September 30, 2019 and December 31, 2018. The total purchase price for the CommAgility acquisition, including the final contingent consideration payment, is $14.6 million which is net of cash acquired. There are no further purchase price obligations under the Stock Purchase Agreement as of September 30, 2019. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 6 – Income Taxes The Company records deferred taxes in accordance with ASC 740, “ Accounting for Income Taxes Realization of the Company’s deferred tax assets is dependent upon the Company generating sufficient taxable income in the appropriate tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of net operating losses. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed. As of September 30, 2019 the Company’s net deferred tax asset of $5.3 million is net of a valuation allowance of $6.7 million which is associated with the Company’s foreign net operating loss carryforward from an inactive foreign entity, state net operating loss carryforward and a state research and development credit. The effective rate of income tax benefit of 28.3% for the nine months ended September 30, 2019 was higher than the statutory rates in the United States and United Kingdom primarily due to the impact of research and development deductions in the UK. The effective rate of income tax provision of 31.5% for the nine months ended September 30, 2018 was higher than the statutory rates in the United States and United Kingdom primarily due to the impact of global intangible low-taxed income or “GILTI” related to our controlled foreign corporation offset by research and development deductions in the UK and non-qualified stock option deductions in the U.S. Due to the Company’s federal and state net operating loss carryforwards the impact of GILTI did not result in a cash tax charge. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings/(Loss) Per Share: | |
Earnings (Loss) Per Share | NOTE 7 – Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding for the period and, when dilutive, potential shares from stock options using the treasury stock method, unvested restricted shares and the weighted-average number of restricted stock units outstanding for the period. Shares from stock options are included in the diluted earnings per share calculation only when options exercise prices are lower than the average market value of the common shares for the period presented. In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation because they are anti-dilutive. In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding. For the Three Months For the Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Weighted average common shares outstanding 20,865,751 20,972,092 20,854,244 20,819,773 Potentially dilutive equity awards 655,351 582,913 654,239 762,585 Weighted average common shares outstanding, assuming dilution 21,521,102 21,555,005 21,508,483 21,582,358 For the three and nine months ended September 30, 2019 the weighted-average number of options to purchase common stock not included in diluted loss per share because the effects are anti-dilutive or the performance condition was not met was 1,445,000 and 1,275,000, respectively. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 8 – Inventories Inventory carrying value is net of inventory reserves of $1.0 million and $1.9 million at September 30, 2019 and December 31, 2018, respectively. Inventories consist of (in thousands): September 30, December 31, 2019 2018 Raw materials $ 4,586 $ 3,248 Work-in-process 439 557 Finished goods 3,284 3,079 $ 8,309 $ 6,884 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9 – Debt Debt consists of the following (in thousands): September 30, 2019 Revolver at LIBOR Plus Margin $ 2,597 Term Loan at LIBOR Plus Margin 380 Total Debt 2,977 Debt Maturing within one year (2,977 ) Non-current portion of long term debt $ - In connection with the acquisition of CommAgility, the Company entered into a Credit Agreement with Bank of America, N.A. (the “Lender”) on February 16, 2017 (the “Credit Facility”), which provided for a term loan in the aggregate principal amount of $0.8 million (the “Term Loan”) and an asset based revolving loan (the “Revolver”), which is subject to a Borrowing Base Calculation (as defined in the Credit Facility), of up to a maximum availability of $9.0 million (“Revolver Commitment Amount”). The borrowing base is calculated as 85% of eligible accounts receivable and inventory, as defined, subject to certain caps and limits. The borrowing base is calculated on a monthly basis. The proceeds of the term loan and revolver were used to finance the acquisition of CommAgility. In connection with the issuance of the Credit Facility, the Company paid lender and legal fees of $0.2 million which were primarily related to the Revolver and are capitalized and presented as other current and non-current assets in the consolidated balance sheets. These costs are recognized as additional interest expense over the term of the related debt instrument using the straight line method which approximates the effective interest method. The Company must repay the Term Loan in installments of $38,000 per quarter due on the first day of each fiscal quarter beginning April 1, 2017 and continuing until the term loan maturity date, on which the remaining balance is due in a final installment. The Term Loan and Revolver were both scheduled to mature on November 16, 2019. On February 26, 2019, the Company entered into Amendment No. 3 to the Credit Facility which extends the termination date of the Revolver from November 16, 2019 to March 31, 2020. The Term and Revolver Loans bear interest at the LIBOR rate plus a margin. The margin on the outstanding balance of the Company’s Term Loans and Revolver Loans were fixed at 3.50% and 3.00% per annum, respectively, through September 30, 2017. Thereafter, the margins were subject to increase or decrease by Lender on the first day of each of the Borrowers’ fiscal quarters based upon the Fixed Charge Coverage Ratio (as defined in the Credit Facility) as of the most recently ended fiscal quarter falling into one of three levels. If the Company’s Fixed Charge Coverage Ratio is greater than or equal to 1.25 to 1.00, a margin of 3.25% and 2.75%, respectively, is added to LIBOR rate for the term loan and revolver with a step up to 3.50% and 3.00%, respectively, if the ratio is greater than or equal 1.00 to 1.00 but less than 1.25 to 1.00 and another step up to 3.75% and 3.25%, respectively, if the ratio is less than 1.00 to 1.00. The Company is also required to pay a commitment fee on the unused commitments under the Revolver at a rate equal to 0.50% per annum and early termination fee of (a) 2% of the Revolver Commitment Amount and Term Loan if termination occurs before the first anniversary of the Credit Facility or (b) 1% of the Revolver Commitment Amount and Term Loan if termination occurs after the first anniversary of the Credit Facility but before the second anniversary of the Credit Facility. The Company’s interest rate plus margin as of September 30, 2019 on the Credit Facility was 4.88% and 5.38% for the Revolver and Term Loan, respectively. The Company’s interest rate plus margin as of December 31, 2018 on the Credit Facility was 5.38% and 5.88% for the Revolver and Term Loan, respectively. The Credit Facility is secured by liens on substantially all of the Company’s and its domestic subsidiaries’ assets including a pledge of 66 1/3% of the equity interests in the Company’s Foreign Subsidiaries (as defined in the Credit Facility). The Credit Facility contains customary affirmative and negative covenants for a transaction of this type, including, among others, the provision of annual, quarterly and monthly financial statements and compliance certificates, maintenance of property, insurance, compliance with laws and environmental matters, restrictions on incurrence of indebtedness, granting of liens, making investments and acquisitions, paying dividends, entering into affiliate transactions and asset sales. Events of default under the Credit Facility include but are not limited to: failure to pay obligations when due, breach or failure of any covenant, insolvency or bankruptcy, materially misleading representations or warranties, occurrence of a Change in Control (as defined in the Credit Facility) or occurrence of conditions that have a Material Adverse Effect (as defined in the Credit Facility). As of September 30, 2019, and the date hereof, the Company is in compliance with the covenants of the Credit Facility. |
Accounting for Stock Based Comp
Accounting for Stock Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Accounting for Stock Based Compensation | NOTE 10 - Accounting for Stock Based Compensation The Company’s results for the three and nine month period ended September 30, 2019 includes $0.2 million and $0.6 million, respectively, related to stock based compensation expense. Such amounts have been included in the consolidated statement of operations and comprehensive income/(loss) within general and administrative expenses in operating expenses. The Company accounts for forfeitures when they occur. Incentive Compensation Plan In 2012, the Company’s Board of Directors and shareholders approved the 2012 Incentive Compensation Plan (the “Initial 2012 Plan”), which provides for the grant of equity, including restricted stock awards, restricted stock units, non-qualified stock options and incentive stock options in compliance with the Internal Revenue Code of 1986, as amended, to employees, officers, directors, consultants and advisors of the Company who are expected to contribute to the Company’s future growth and success. When originally approved, the Initial 2012 Plan provided for the grant of awards relating to 2 million shares of common stock, plus those shares subject to awards previously issued under the Company’s 2000 Stock Option Plan that expire, are canceled or are terminated after adoption of the Initial 2012 Plan without having been exercised in full and would have been available for subsequent grants under the 2000 Stock Option Plan. In June 2014, the Company’s shareholders approved the Amended and Restated 2012 Incentive Compensation Plan (the “2012 Plan”) allowing for an additional 1.6 million shares of the Company’s common stock to be available for future grants under the 2012 Plan. The 2012 Plan provides that if awards are forfeited, expire or otherwise terminate without issuance of the shares underlying the awards, or if the award does not result in issuance of all or part of the shares underlying the award, the unissued shares are again available for awards under the 2012 Plan. As a result of certain award forfeitures and cancellations, as of September 30, 2019, there are approximately 1.5 million shares available for issuance under the 2012 Plan. All service-based (time vesting) options granted have ten-year terms from the date of grant and typically vest annually and become fully exercisable after a maximum of five years. However, vesting conditions are determined on a grant by grant basis. Performance-based options granted have ten-year terms and vest and become fully exercisable when determinable performance targets are achieved. Performance targets are approved by the Company’s compensation committee of the Board of Directors. Under the 2012 Plan, options may be granted to purchase shares of the Company’s common stock exercisable only at prices equal to or above the fair market value on the date of the grant. Restricted Common Stock Awards On January 11, 2019 the Company granted 95,000 restricted stock awards to employees under the 2012 Plan. The awards vest in equal annual installments over a three year period or upon a change in control, as defined in the 2012 Plan, as long as the grantee continues to provide service to the Company until the applicable vesting date. The grant date fair value of the restricted stock awards was $1.56 per share. Service-Based Stock Option Awards On January 11, 2019 the Company granted 15,000 incentive stock options. The stock options vest in equal annual installments over a three year period or upon a change in control, as defined in the 2012 Plan, as long as the grantee continues to provide service to the Company until the applicable vesting date. The following table presents the assumptions used to estimate the fair value of the stock option award granted in the first quarter of 2019 under the Black Scholes model: Number of Option Term Exercise Price Risk Free Interest Rate Expected Volatility Fair Value at Grant Date Expected Dividend Yield January 11, 2019 - Service 15,000 3 $ 1.56 2.52 % 49.80 % $ 0.56 $ 0.00 Restricted Stock Units On May 30, 2019 the Company granted 25,000 Restricted Stock Units (“RSU”) to each of our five independent board members under the 2012 Plan. On July 8, 2019 the Company granted 22,917 RSU’s to our newly appointed board member. Each RSU represents the Company’s obligation to issue one share of the Company’s common stock subject to the RSU award agreement and 2012 Plan. The grant date fair value of the RSU’s issued on May 30, 2019 was $1.55 per share and the grant date fair value of the RSU’s issued on July 8, 2019 was $1.58 per share. The RSU’s vest on the day before the first anniversary of the grant date or, if earlier, the effective date of a separation of service due to death or disability, provided the board member has rendered continuous service to the Company as a member of the board of directors from grant date to vesting date. Once vested the RSU will be settled by delivery of shares to the board member no later than 30 days following: 1) the third anniversary of the grant date, 2) separation from service following, or coincident with, a vesting date, or 3) a change in control. Outstanding Stock Options and Unvested Restricted Awards As of September 30, 2019 there were 1,950,000 service based stock options outstanding and 305,000 performance based stock options outstanding. The range of exercise prices of outstanding stock options is $0.78 to $1.92. The number of potentially dilutive common shares from stock options (options with exercise prices that are lower than the average market value of common shares for the nine months ended September 30, 2019) is 148,343 and have an average exercise price of 1.35 per share. Additionally, as of September 30, 2019, there were 300,561 unvested restricted shares, 147,917 unvested restricted stock units and 125,000 vested restricted stock units outstanding. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 11 – SEGMENT INFORMATION The operating businesses of the Company are segregated into three reportable segments: (1) Network Solutions, (2) Test and Measurement and (3) Embedded Solutions. Network Solutions The Network Solutions segment is comprised primarily of the operations of the Company’s subsidiary, Microlab. Network Solutions designs and manufactures a wide selection of RF passive components and integrated subsystems for signal conditioning and distribution in the wireless infrastructure markets, particularly for small cell deployments, distributed antenna systems (“DAS”), the in-building wireless solutions industry and radio base-station market. Network Solutions also offers active solution sets to assist in network timing for tunnels and in-building wireless signaling. Network Solutions customers include telecommunications service providers, systems integrators, neutral host operators and distributors. Test and Measurement The Test and Measurement segment is comprised primarily of the Company’s operations of the Noisecom product line and the operations of its subsidiary, Boonton. Noisecom designs and produces noise generation equipment and instruments, calibrated noise sources, noise modules and diodes. Noise components and instruments are used as a method to provide wide band signals for sophisticated telecommunication and defense applications, and as a stable reference standard for instruments and systems, including radar and satellite communications. Boonton products are also used to test terrestrial and satellite communications, radar and telemetry. Certain power meter products are designed for measuring signals based on wideband modulation formats, allowing a variety of measurements to be made, including maximum power, peak power, average power and minimum power. Customers of the Test and Measurement segment include large defense contractors and the U.S. and foreign governments. Embedded Solutions The Embedded Solutions segment is comprised of the operations of CommAgility. Embedded Solutions supplies signal processing technology for network validation systems supporting LTE and emerging 5G networks. Additionally, this segment licenses, implements and configures LTE PHY layer and stack software for private LTE networks supporting satellite communications, the military and aerospace industries. Customers include wireless communication test equipment companies, defense subcontractors and global technology and services companies. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. The Company allocates resources and evaluates the performance of segments based on income or loss from operations, excluding interest, corporate expenses and other income (expenses). Financial information by reportable segment for the respective periods is set forth below (in thousands): For the Three Months For the Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Net sales by segment: Network Solutions $ 5,185 $ 6,034 $ 16,518 $ 17,181 Test and Measurement 2,996 3,683 9,219 10,980 Embedded Solutions 2,631 4,302 11,616 12,536 Total consolidated net sales of reportable segments 10,812 14,019 37,353 40,697 Segment income (loss): Network Solutions 594 1,229 2,141 2,799 Test and Measurement 361 590 973 1,515 Embedded Solutions (284 ) 565 (287 ) 1,448 Income (loss) from reportable segments 671 2,384 2,827 5,762 Other unallocated amounts: Corporate expenses (1,349 ) (1,465 ) (3,757 ) (4,242 ) Other (expenses) income - net 48 (175 ) 25 (421 ) Consolidated income/(loss) before Income tax provision/(benefit) $ (630 ) $ 744 $ (905 ) $ 1,099 Depreciation and amortization by segment: Network Solutions $ 91 $ 115 $ 305 $ 424 Test and Measurement 84 115 447 412 Embedded Solutions 299 307 919 937 Total depreciation and amortization for reportable segments 474 537 1,671 1,773 Capital expenditures by segment: Network Solutions 12 28 75 311 Test and Measurement 32 2 125 131 Embedded Solutions 35 19 139 191 Total consolidated capital expenditures by reportable segment $ 79 $ 49 $ 339 $ 633 September 30, December 31, Total assets by segment: Network Solutions $ 10,193 $ 10,088 Test and Measurement 7,364 5,943 Embedded Solutions 15,191 16,804 Total assets for reportable segments 32,748 32,835 Corporate assets, principally cash and cash equivalents and deferred income taxes 9,346 11,332 Total consolidated assets $ 42,094 $ 44,167 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12 – COMMITMENTS AND CONTINGENCIES Legal Proceeding As previously disclosed, on June 5, 2019 Harris Corporation (“Harris”) filed a request for arbitration before the American Arbitration Association in accordance with the terms of an executed purchase order, statement of work and software license agreement (collectively referred to as “Agreements”) with CommAgility entered into in 2014. Harris claims that CommAgility breached the Agreements and infringed Harris’ copyrighted Work Product by offering for sale, marketing, and promoting techniques, capabilities, products and services that incorporate Work Product, as defined in the Agreements, owned by Harris. Harris claims that CommAgility has caused Harris significant monetary damages, the sum of which cannot be determined until such time as discovery has been conducted, but is estimated by Harris to be less than $250,000. Harris is also seeking an injunction against CommAgility’s use of the Work Product which includes rights to certain technology used for air-to-ground communications. The Company believes the claims are without merit and intends to defend all of the claims vigorously. The Company has not accrued any amounts in respect of this matter and cannot estimate the possible loss, if any, that the Company may incur with respect to it. The ultimate outcome of this matter is unknown but, in the opinion of management, we do not believe this proceeding will have a material adverse effect upon our financial condition, cash flows or future results of operations. The Company expects a portion of the legal expenses and monetary damages, if any, to be covered by our professional indemnity insurance policy. There have been no other material changes in our commitments and contingencies and risks and uncertainties as of September 30, 2019 from that previously disclosed in our annual report on Form 10-K for the year ended December 31, 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles and Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Preparation | Basis of Presentation and Preparation Wireless Telecom Group, Inc., a New Jersey corporation, together with its subsidiaries (“we”, “us”, “our” or the “Company”), is a global designer and manufacturer of advanced radio frequency (“RF”) and microwave components, modules, systems and instruments and currently markets its products and services worldwide under the Boonton, Microlab, Noisecom and CommAgility brands. Serving the wireless, telecommunication, satellite, military, aerospace, and semiconductor industries, Wireless Telecom Group products enable innovation across a wide range of traditional and emerging wireless technologies. With a unique set of high-performance products including peak power meters, signal analyzers, signal processing modules, long-term evolution (“LTE”) physical layer (“PHY”) and stack software, power splitters and combiners, global positioning system (“GPS”) splitters and repeaters, public safety monitors, noise sources, and programmable noise generators, Wireless Telecom Group supports the development, testing, and deployment of wireless technologies around the globe. The consolidated balance sheet as of September 30, 2019, the consolidated statements of operations and comprehensive income/(loss) for the three and nine months ended September 30, 2019 and 2018, the consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018 and the consolidated statement of shareholders’ equity for the three and nine months ended September 30, 2019 and 2018 have been prepared by the Company without audit. The consolidated financial statements include the accounts of Wireless Telecom Group, Inc., doing business as and operating under the trade name, Noisecom, and its wholly owned subsidiaries including Boonton Electronics Corporation (“Boonton”), Microlab/FXR LLC (“Microlab”), Wireless Telecommunications Ltd. and CommAgility Limited (“CommAgility”). All intercompany transactions and balances have been eliminated in consolidation. The Company presents its operations in three reportable segments: (1) Network Solutions, (2) Test and Measurement and (3) Embedded Solutions. The Network Solutions segment is comprised of the operations of Microlab. The Test and Measurement segment is comprised of the operations of Boonton and Noisecom. The Embedded Solutions segment is comprised of the operations of CommAgility. It is suggested that these interim consolidated financial statements be read in conjunction with the audited consolidated financial statements, and the notes thereto, included in the Company’s latest annual report (Form 10-K). The Company’s fiscal periods are based on the calendar year. Except as otherwise specified, references to “third quarter(s)” or “three months” indicate the Company’s fiscal periods ending September 30, 2019 and September 30, 2018, and references to “year-end” indicate the fiscal year ended December 31, 2018. |
Consolidated Financial Statements | Consolidated Financial Statements In the opinion of management, the accompanying consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries, which are necessary to fairly present the Company’s results for the interim periods being presented. The accounting policies followed by the Company are set forth in Note 1 to the Company’s consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2018. Specific reference is made to that report since certain information and footnote disclosures normally included in financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been reduced for interim periods in accordance with SEC rules. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform with the current period presentation. |
Concentration Risk | Concentration Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The majority of the Company’s cash balance is held outside of the United States. Credit evaluations are performed on customers requiring credit over a certain amount. Credit risk is mitigated to a lesser extent through collateral such as letters of credit, bank guarantees or payment terms like cash in advance. For the three and nine months ended September 30, 2019, one customer accounted for approximately 19% and 29% of the Company’s consolidated revenues, respectively. For the three and nine months ended September 30, 2018, one customer accounted for approximately 23% and 21% of the Company’s consolidated revenues, respectively. At September 30, 2019 and December 31, 2018, one customer accounted for 18% and 32% of consolidated gross accounts receivable, respectively. |
Subsequent Events | Subsequent Events Management has evaluated subsequent events and determined that there were no subsequent events or transactions requiring recognition or disclosure in the consolidated financial statements, and the notes thereto, through the date the financial statements were issued. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Maturity of Operating Lease Liabilities | The following table presents information about the amount and timing of cash flows arising from the Company’s operating leases as of September 30, 2019. (in thousands) September 30, 2019 Maturity of Lease Liabilities 2019 (remaining) $ 128 2020 511 2021 474 2022 488 2023 123 Thereafter - Total Undiscounted operating lease payments 1,724 Less: imputed interest (159 ) Present Value of operating lease liabilities $ 1,565 Other information Weighted-average remaining lease term for operating leases 41 Weighted-average discount rate for operating leases 5.74 % |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | See details in the tables below (in thousands). Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Network Test & Embedded Total Network Test & Embedded Total Net Revenues by Revenue Type Passive RF Components $ 5,185 $ - $ - $ 5,185 $ 16,518 $ - $ - $ 16,518 Noise Generators and Components - 1,337 - 1,337 - 4,362 - 4,362 Power Meters and Analyzers - 1,323 - 1,323 - 3,946 - 3,946 Signal Processing Hardware - - 2,506 2,506 - - 11,154 11,154 Software Licenses - - 5 5 - - 11 11 Services - 336 120 456 - 911 451 1,362 Total Net Revenue $ 5,185 $ 2,996 $ 2,631 $ 10,812 $ 16,518 $ 9,219 $ 11,616 $ 37,353 Net Revenues by Geographic Areas Americas $ 4,429 $ 2,153 $ 595 $ 7,177 $ 14,485 $ 6,220 $ 918 $ 21,623 EMEA 699 474 2,011 3,184 1,872 1,579 10,652 14,103 APAC 57 369 25 451 161 1,420 46 1,627 Total Net Revenue $ 5,185 $ 2,996 $ 2,631 $ 10,812 $ 16,518 $ 9,219 $ 11,616 $ 37,353 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Network Test & Embedded Total Network Test & Embedded Total Net Revenues by Revenue Type Passive RF Components $ 6,034 $ - $ - $ 6,034 $ 17,181 $ - $ - $ 17,181 Noise Generators and Components - 1,549 - 1,549 - 4,636 - 4,636 Power Meters and Analyzers - 1,795 - 1,795 - 5,349 - 5,349 Signal Processing Hardware - - 3,357 3,357 - - 9,818 9,818 Software Licenses - - 192 192 - - 703 703 Services - 339 753 1,092 - 995 2,015 3,010 Total Net Revenue $ 6,034 $ 3,683 $ 4,302 $ 14,019 $ 17,181 $ 10,980 $ 12,536 $ 40,697 Net Revenues by Geographic Areas Americas $ 5,232 $ 2,949 $ 795 $ 8,976 $ 14,369 $ 7,706 $ 2,980 $ 25,055 EMEA 612 305 3,269 4,186 2,044 1,268 9,119 12,431 APAC 190 429 238 857 768 2,006 437 3,211 Total Net Revenue $ 6,034 $ 3,683 $ 4,302 $ 14,019 $ 17,181 $ 10,980 $ 12,536 $ 40,697 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings/(Loss) Per Share: | |
Schedule of Weighted Average Common Shares Outstanding | In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding. For the Three Months For the Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Weighted average common shares outstanding 20,865,751 20,972,092 20,854,244 20,819,773 Potentially dilutive equity awards 655,351 582,913 654,239 762,585 Weighted average common shares outstanding, assuming dilution 21,521,102 21,555,005 21,508,483 21,582,358 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of (in thousands): September 30, December 31, 2019 2018 Raw materials $ 4,586 $ 3,248 Work-in-process 439 557 Finished goods 3,284 3,079 $ 8,309 $ 6,884 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following (in thousands): September 30, 2019 Revolver at LIBOR Plus Margin $ 2,597 Term Loan at LIBOR Plus Margin 380 Total Debt 2,977 Debt Maturing within one year (2,977 ) Non-current portion of long term debt $ - |
Accounting for Stock Based Co_2
Accounting for Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Fair Value Assumptions of Stock Options | The following table presents the assumptions used to estimate the fair value of the stock option award granted in the first quarter of 2019 under the Black Scholes model: Number of Option Term Exercise Price Risk Free Interest Rate Expected Volatility Fair Value at Grant Date Expected Dividend Yield January 11, 2019 - Service 15,000 3 $ 1.56 2.52 % 49.80 % $ 0.56 $ 0.00 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Reportable Segment | Financial information by reportable segment for the respective periods is set forth below (in thousands): For the Three Months For the Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Net sales by segment: Network Solutions $ 5,185 $ 6,034 $ 16,518 $ 17,181 Test and Measurement 2,996 3,683 9,219 10,980 Embedded Solutions 2,631 4,302 11,616 12,536 Total consolidated net sales of reportable segments 10,812 14,019 37,353 40,697 Segment income (loss): Network Solutions 594 1,229 2,141 2,799 Test and Measurement 361 590 973 1,515 Embedded Solutions (284 ) 565 (287 ) 1,448 Income (loss) from reportable segments 671 2,384 2,827 5,762 Other unallocated amounts: Corporate expenses (1,349 ) (1,465 ) (3,757 ) (4,242 ) Other (expenses) income - net 48 (175 ) 25 (421 ) Consolidated income/(loss) before Income tax provision/(benefit) $ (630 ) $ 744 $ (905 ) $ 1,099 Depreciation and amortization by segment: Network Solutions $ 91 $ 115 $ 305 $ 424 Test and Measurement 84 115 447 412 Embedded Solutions 299 307 919 937 Total depreciation and amortization for reportable segments 474 537 1,671 1,773 Capital expenditures by segment: Network Solutions 12 28 75 311 Test and Measurement 32 2 125 131 Embedded Solutions 35 19 139 191 Total consolidated capital expenditures by reportable segment $ 79 $ 49 $ 339 $ 633 September 30, December 31, Total assets by segment: Network Solutions $ 10,193 $ 10,088 Test and Measurement 7,364 5,943 Embedded Solutions 15,191 16,804 Total assets for reportable segments 32,748 32,835 Corporate assets, principally cash and cash equivalents and deferred income taxes 9,346 11,332 Total consolidated assets $ 42,094 $ 44,167 |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles and Policies (Details Narrative) - Integer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Number of reportable segments | 3 | ||||
One Customer [Member] | Revenues [Member] | |||||
Concentration credit risk, percentage | 19.00% | 23.00% | 29.00% | 21.00% | |
One Customer [Member] | Accounts Receivable [Member] | |||||
Concentration credit risk, percentage | 18.00% | 32.00% |
Accounting Pronouncements (Deta
Accounting Pronouncements (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Operating lease, right-of-use asset | $ 1,548 | ||
Operating lease, liability | $ 1,565 | ||
ASU 2016-02 [Member] | |||
Operating lease, right-of-use asset | $ 1,900 | ||
Operating lease, liability | $ 1,900 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Operating lease, right-of-use asset | $ 1,548 | $ 1,548 | ||
Operating lease, payments | 400 | |||
Operating lease, costs | $ 200 | $ 600 | ||
ASU 2016-02 [Member] | ||||
Operating lease, right-of-use asset | $ 1,900 | |||
Short Term Lease [Member] | ||||
Operating lease, term | 12 months | 12 months | ||
Minimum [Member] | ||||
Operating lease, term | 12 months | 12 months | ||
Maximum [Member] | ||||
Operating lease, term | 8 years | 8 years |
Leases - Schedule of Maturity o
Leases - Schedule of Maturity of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (remaining) | $ 128 |
2020 | 511 |
2021 | 474 |
2022 | 488 |
2023 | 123 |
Thereafter | |
Total Undiscounted operating lease payments | 1,724 |
Less: imputed interest | (159) |
Present Value of operating lease liabilities | $ 1,565 |
Weighted-average remaining lease term for operating leases | 41 months |
Weighted-average discount rate for operating leases | 5.74% |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Prepaid expenses and other current assets | $ 890 | $ 890 | $ 1,689 | ||
Deferred revenue | 110 | 110 | 103 | ||
Contract Assets [Member] | |||||
Prepaid expenses and other current assets | 300 | ||||
Contract Liabilities [Member] | |||||
Deferred revenue | $ 100 | $ 100 | $ 100 | ||
Revenue from Rights Concentration Risk [Member] | |||||
Concentration risk, percentage | 99.00% | 95.00% | 99.00% | 95.00% |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total Net Revenue | $ 10,812 | $ 14,019 | $ 37,353 | $ 40,697 |
Americas [Member] | ||||
Total Net Revenue | 7,177 | 8,976 | 21,623 | 25,055 |
EMEA [Member] | ||||
Total Net Revenue | 3,184 | 4,186 | 14,103 | 12,431 |
APAC [Member] | ||||
Total Net Revenue | 451 | 857 | 1,627 | 3,211 |
Passive RF Components [Member] | ||||
Total Net Revenue | 5,185 | 6,034 | 16,518 | 17,181 |
Noise Generators and Components [Member] | ||||
Total Net Revenue | 1,337 | 1,549 | 4,362 | 4,636 |
Power Meters and Analyzers [Member] | ||||
Total Net Revenue | 1,323 | 1,795 | 3,946 | 5,349 |
Signal Processing Hardware [Member] | ||||
Total Net Revenue | 2,506 | 3,357 | 11,154 | 9,818 |
Software Licenses [Member] | ||||
Total Net Revenue | 5 | 192 | 11 | 703 |
Services [Member] | ||||
Total Net Revenue | 456 | 1,092 | 1,362 | 3,010 |
Network Solutions [Member] | ||||
Total Net Revenue | 5,185 | 6,034 | 16,518 | 17,181 |
Network Solutions [Member] | Americas [Member] | ||||
Total Net Revenue | 4,429 | 5,232 | 14,485 | 14,369 |
Network Solutions [Member] | EMEA [Member] | ||||
Total Net Revenue | 699 | 612 | 1,872 | 2,044 |
Network Solutions [Member] | APAC [Member] | ||||
Total Net Revenue | 57 | 190 | 161 | 768 |
Network Solutions [Member] | Passive RF Components [Member] | ||||
Total Net Revenue | 5,185 | 6,034 | 16,518 | 17,181 |
Network Solutions [Member] | Noise Generators and Components [Member] | ||||
Total Net Revenue | ||||
Network Solutions [Member] | Power Meters and Analyzers [Member] | ||||
Total Net Revenue | ||||
Network Solutions [Member] | Signal Processing Hardware [Member] | ||||
Total Net Revenue | ||||
Network Solutions [Member] | Software Licenses [Member] | ||||
Total Net Revenue | ||||
Network Solutions [Member] | Services [Member] | ||||
Total Net Revenue | ||||
Test and Measurement [Member] | ||||
Total Net Revenue | 2,996 | 3,683 | 9,219 | 10,980 |
Test and Measurement [Member] | Americas [Member] | ||||
Total Net Revenue | 2,153 | 2,949 | 6,220 | 7,706 |
Test and Measurement [Member] | EMEA [Member] | ||||
Total Net Revenue | 474 | 305 | 1,579 | 1,268 |
Test and Measurement [Member] | APAC [Member] | ||||
Total Net Revenue | 369 | 429 | 1,420 | 2,006 |
Test and Measurement [Member] | Passive RF Components [Member] | ||||
Total Net Revenue | ||||
Test and Measurement [Member] | Noise Generators and Components [Member] | ||||
Total Net Revenue | 1,337 | 1,549 | 4,362 | 4,636 |
Test and Measurement [Member] | Power Meters and Analyzers [Member] | ||||
Total Net Revenue | 1,323 | 1,795 | 3,946 | 5,349 |
Test and Measurement [Member] | Signal Processing Hardware [Member] | ||||
Total Net Revenue | ||||
Test and Measurement [Member] | Software Licenses [Member] | ||||
Total Net Revenue | ||||
Test and Measurement [Member] | Services [Member] | ||||
Total Net Revenue | 336 | 339 | 911 | 995 |
Embedded Solutions [Member] | ||||
Total Net Revenue | 2,631 | 4,302 | 11,616 | 12,536 |
Embedded Solutions [Member] | Americas [Member] | ||||
Total Net Revenue | 595 | 795 | 918 | 2,980 |
Embedded Solutions [Member] | EMEA [Member] | ||||
Total Net Revenue | 2,011 | 3,269 | 10,652 | 9,119 |
Embedded Solutions [Member] | APAC [Member] | ||||
Total Net Revenue | 25 | 238 | 46 | 437 |
Embedded Solutions [Member] | Passive RF Components [Member] | ||||
Total Net Revenue | ||||
Embedded Solutions [Member] | Noise Generators and Components [Member] | ||||
Total Net Revenue | ||||
Embedded Solutions [Member] | Power Meters and Analyzers [Member] | ||||
Total Net Revenue | ||||
Embedded Solutions [Member] | Signal Processing Hardware [Member] | ||||
Total Net Revenue | 2,506 | 3,357 | 11,154 | 9,818 |
Embedded Solutions [Member] | Software Licenses [Member] | ||||
Total Net Revenue | 5 | 192 | 11 | 703 |
Embedded Solutions [Member] | Services [Member] | ||||
Total Net Revenue | $ 120 | $ 753 | $ 451 | $ 2,015 |
Acquisition of CommAgility (Det
Acquisition of CommAgility (Details Narrative) £ in Thousands, $ in Thousands | Feb. 17, 2017USD ($)shares | Feb. 17, 2017GBP (£)shares | Mar. 31, 2018USD ($)shares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Payment for contingent consideration liability, operating activities | $ 772 | ||||||||
Payment for contingent consideration liability, financing activities | 782 | ||||||||
Income (Loss) from continuing operations before income taxes | $ (630) | $ 744 | $ (905) | $ 1,099 | |||||
Business acquisition, shares forfeited value | $ (3,599) | ||||||||
CommAgility [Member] | |||||||||
Business acquisition, date of acquisition agreement | Feb. 17, 2017 | ||||||||
Payments to acquire businesses, gross | $ 11,300 | ||||||||
Business acquisition, number of shares issued | shares | 3,487,528 | 3,487,528 | |||||||
Business acquisition, number of shares issued, value | $ 6,000 | ||||||||
Business combination deferred purchase price payable | 2,500 | ||||||||
Business combination working capital additional purchase price adjustment | $ 1,400 | ||||||||
Business combination, contingent consideration, result of meeting certain financial targets | $ 1,500 | ||||||||
Payment for contingent consideration liability, operating activities | $ 700 | ||||||||
Payment for contingent consideration liability, financing activities | 800 | ||||||||
Business acquisition, shares forfeited description | The Consideration Shares were subject to forfeiture and return to the Company if (a) 2017 Adjusted EBITDA, as defined, generated by CommAgility was less than £2.4 million; or (b) 2018 Adjusted EBITDA, as defined, generated by CommAgility was less than £2.4 million (in each case as determined by an audit of CommAgility conducted by the accountants of the Acquisition Subsidiary in accordance with the terms of the Share Purchase Agreement). | The Consideration Shares were subject to forfeiture and return to the Company if (a) 2017 Adjusted EBITDA, as defined, generated by CommAgility was less than £2.4 million; or (b) 2018 Adjusted EBITDA, as defined, generated by CommAgility was less than £2.4 million (in each case as determined by an audit of CommAgility conducted by the accountants of the Acquisition Subsidiary in accordance with the terms of the Share Purchase Agreement). | |||||||
Business combination, consideration transferred | $ 14,600 | ||||||||
CommAgility [Member] | 2017 Adjusted EBITDA [Member] | |||||||||
Business acquisition, number of shares forfeited | shares | 2,092,516 | ||||||||
Business acquisition, shares forfeited value | $ 3,600 | ||||||||
CommAgility [Member] | 2017 Adjusted EBITDA [Member] | Maximum [Member] | GBP [Member] | |||||||||
Income (Loss) from continuing operations before income taxes | £ | £ 2,400 | ||||||||
CommAgility [Member] | 2018 Adjusted EBITDA [Member] | Maximum [Member] | GBP [Member] | |||||||||
Income (Loss) from continuing operations before income taxes | £ | £ 2,400 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets, net | $ 5,300 | |
Deferred tax assets, valuation allowance | $ 6,700 | |
Effective income tax rate, percent | 28.30% | 31.50% |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Earnings/(Loss) Per Share: | ||
Antidilutive securities excluded from computation of earnings per share | 1,445,000 | 1,275,000 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Weighted Average Common Shares Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Weighted average common shares outstanding | 20,866,000 | 20,972,000 | 20,854,000 | 20,820,000 |
Weighted average common shares outstanding, assuming dilution | 20,866,000 | 21,555,000 | 20,854,000 | 21,582,000 |
ASC 260 [Member] | ||||
Weighted average common shares outstanding | 20,865,751 | 20,972,092 | 20,854,244 | 20,819,773 |
Potentially dilutive equity awards | 655,351 | 582,913 | 654,239 | 762,585 |
Weighted average common shares outstanding, assuming dilution | 21,521,102 | 21,555,005 | 21,508,483 | 21,582,358 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 998 | $ 1,910 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,586 | $ 3,248 |
Work-in-process | 439 | 557 |
Finished goods | 3,284 | 3,079 |
Inventories, net | $ 8,309 | $ 6,884 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | Feb. 26, 2019 | Sep. 30, 2017 | Feb. 16, 2017 | Sep. 30, 2019 | Dec. 31, 2018 |
Borrowing base eligibility percentage | 85.00% | ||||
Debt Instrument, covenant description | If the Company's Fixed Charge Coverage Ratio is greater than or equal to 1.25 to 1.00, a margin of 3.25% and 2.75%, respectively, is added to LIBOR rate with a step up to 3.50% and 3.00%, respectively, if the ratio is greater than or equal 1.00 to 1.00 but less than 1.25 to 1.00 and another step up to 3.75% and 3.25%, respectively, if the ratio is less than 1.00 to 1.00. | ||||
Line of credit facility, collateral | The Credit Facility is secured by liens on substantially all of the Company's and its domestic subsidiaries' assets including a pledge of 66 1/3% of the equity interests in the Company's Foreign Subsidiaries (as defined in the Credit Facility). | ||||
Foreign subsidiary holding pledged for new credit facility percentage | 66.33% | ||||
Penalty For Earlier Contractual Termination in One Year [Member] | |||||
Line of credit facility early termination fee percentage | 2.00% | ||||
Penalty For Earlier Contractual Termination in Two Year [Member] | |||||
Line of credit facility early termination fee percentage | 1.00% | ||||
Revolving Loan [Member] | |||||
Line of credit facility, maximum borrowing capacity | $ 9,000 | ||||
Payment of Legal Fees | 200 | ||||
Line of credit facility, expiration date | Nov. 16, 2019 | ||||
Line of credit facility extended expiration date | Mar. 31, 2020 | ||||
Debt instrument, basis spread on variable rate | 3.00% | ||||
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | ||||
Debt instrument, interest rate, effective percentage | 4.88% | 5.38% | |||
Revolving Loan [Member] | Coverage Ratio Greater Than 1.25 To 1.00 [Member] | |||||
Debt instrument, basis spread on variable rate | 2.75% | ||||
Revolving Loan [Member] | Coverage Ratio Greater Than 1.00 To 1.00 Less Than 1.25 To 1.00 [Member] | |||||
Debt instrument, basis spread on variable rate | 3.00% | ||||
Revolving Loan [Member] | Coverage Ratio Less Than 1.00 To 1.00 [Member] | |||||
Debt instrument, basis spread on variable rate | 3.25% | ||||
Term Loan [Member] | Coverage Ratio Greater Than 1.25 To 1.00 [Member] | |||||
Debt instrument, basis spread on variable rate | 3.25% | ||||
Term Loan [Member] | Coverage Ratio Greater Than 1.00 To 1.00 Less Than 1.25 To 1.00 [Member] | |||||
Debt instrument, basis spread on variable rate | 3.50% | ||||
Term Loan [Member] | Coverage Ratio Less Than 1.00 To 1.00 [Member] | |||||
Debt instrument, basis spread on variable rate | 3.75% | ||||
Term Loan [Member] | |||||
Debt instrument, face amount | 800 | ||||
Debt instrument, periodic payment | $ 38 | ||||
Debt instrument, date of first required payment | Apr. 1, 2017 | ||||
Debt instrument, maturity date | Nov. 16, 2019 | ||||
Debt instrument, basis spread on variable rate | 3.50% | ||||
Debt instrument, interest rate, effective percentage | 5.38% | 5.88% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Total Debt | $ 2,977 |
Debt Maturing within one year | (2,977) |
Non-current portion of long term debt | |
Revolving Loan [Member] | |
Total Debt | 2,597 |
Term Loan [Member] | |
Total Debt | $ 380 |
Accounting for Stock Based Co_3
Accounting for Stock Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jul. 08, 2019 | May 30, 2019 | Jan. 11, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2012 | Jun. 30, 2014 |
Stock based compensation Expense | $ 200 | $ 560 | $ 505 | |||||
Exercise price range, lower range limit | $ 0.78 | |||||||
Exercise price range, upper range limit | $ 1.92 | |||||||
Service Based Stock Options [Member] | ||||||||
Share-based compensation, expiration period | 10 years | |||||||
Share based compensation, maximum period consider for option fully exercisable | 5 years | |||||||
Stock options, outstanding | 1,950,000 | 1,950,000 | ||||||
Performance Based Stock Options [Member] | ||||||||
Share-based compensation, expiration period | 10 years | |||||||
Stock options, outstanding | 305,000 | 305,000 | ||||||
Restricted Stock Award [Member] | ||||||||
Unvested shares, outstanding | 300,561 | 300,561 | ||||||
Vested shares, outstanding | 125,000 | 125,000 | ||||||
Restricted Stock Units [Member] | ||||||||
Unvested shares, outstanding | 147,917 | 147,917 | ||||||
Stock Options [Member] | ||||||||
Potentially dilutive common shares | 148,343 | |||||||
Stock options, exercise price | $ 1.35 | $ 1.35 | ||||||
Initial 2012 Plan [Member] | ||||||||
Stock options granted | 2,000,000 | |||||||
2012 Plan [Member] | ||||||||
Shares available for future grants | 1,500,000 | 1,500,000 | 1,600,000 | |||||
2012 Plan [Member] | Service Based Stock Options [Member] | ||||||||
Stock options granted | 15,000 | |||||||
Vesting period | 3 years | |||||||
2012 Plan [Member] | Restricted Stock Award [Member] | Employees [Member] | ||||||||
Stock awards, granted | 95,000 | |||||||
Vesting period | 3 years | |||||||
Stock awards, grant date fair value | $ 1.56 | |||||||
2012 Plan [Member] | Restricted Stock Units [Member] | Five Independent Board Members [Member] | ||||||||
Stock awards, granted | 22,917 | 25,000 | ||||||
Stock awards, grant date fair value | $ 1.58 | $ 1.55 | ||||||
Vesting period, description | Once vested the RSU will be settled by delivery of shares to the board member no later than 30 days following: 1) the third anniversary of the grant date, 2) separation from service following, or coincident with, a vesting date, or 3) a change in control. |
Accounting for Stock Based Co_4
Accounting for Stock Based Compensation - Schedule of Fair Value Assumptions of Stock Options (Details) - Service-Based Stock Option Awards [Member] | Jan. 11, 2019$ / sharesshares |
Number of options | shares | 15,000 |
Option term | 3 years |
Exercise price | $ 1.56 |
Risk Free interest rate | 2.52% |
Expected volatility | 49.80% |
Fair Value at grant date | $ 0.56 |
Expected dividend yield | 0.00% |
Segment Information (Details Na
Segment Information (Details Narrative) | 9 Months Ended |
Sep. 30, 2019Integer | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Net revenue by segment | $ 10,812 | $ 14,019 | $ 37,353 | $ 40,697 | |
Segment income (loss) | 671 | 2,384 | 2,827 | 5,762 | |
Corporate expenses | (1,349) | (1,465) | (3,757) | (4,242) | |
Other (expenses) income - net | 48 | (175) | 25 | (421) | |
Consolidated income/(loss) before Income tax provision/(benefit) | (630) | 744 | (905) | 1,099 | |
Depreciation and amortization by segment | 474 | 537 | 1,671 | 1,773 | |
Capital expenditures by segment | 79 | 49 | 339 | 633 | |
Total assets by segment | 32,748 | 32,748 | $ 32,835 | ||
Corporate assets, principally cash and cash equivalents and deferred income taxes | 9,346 | 9,346 | 11,332 | ||
Total consolidated assets | 42,094 | 42,094 | 44,167 | ||
Network Solutions [Member] | |||||
Net revenue by segment | 5,185 | 6,034 | 16,518 | 17,181 | |
Segment income (loss) | 594 | 1,229 | 2,141 | 2,799 | |
Depreciation and amortization by segment | 91 | 115 | 305 | 424 | |
Capital expenditures by segment | 12 | 28 | 75 | 311 | |
Total assets by segment | 10,193 | 10,193 | 10,088 | ||
Test and Measurement [Member] | |||||
Net revenue by segment | 2,996 | 3,683 | 9,219 | 10,980 | |
Segment income (loss) | 361 | 590 | 973 | 1,515 | |
Depreciation and amortization by segment | 84 | 115 | 447 | 412 | |
Capital expenditures by segment | 32 | 2 | 125 | 131 | |
Total assets by segment | 7,364 | 7,364 | 5,943 | ||
Embedded Solution [Member] | |||||
Net revenue by segment | 2,631 | 4,302 | 11,616 | 12,536 | |
Segment income (loss) | (284) | 565 | (287) | 1,448 | |
Depreciation and amortization by segment | 299 | 307 | 919 | 937 | |
Capital expenditures by segment | 35 | $ 19 | 139 | $ 191 | |
Total assets by segment | $ 15,191 | $ 15,191 | $ 16,804 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | Jun. 05, 2019USD ($) |
Harris Corporation [Member] | Maximum [Member] | |
Estimated possible loss | $ 250 |