Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 26, 2014 | Jun. 28, 2013 | |
Document Document And Entity Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'SCOTTS LIQUID GOLD INC | ' | ' |
Entity Central Index Key | '0000088000 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $3,270,618 |
Entity Common Stock, Shares Outstanding | ' | 11,446,831 | ' |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Statement Consolidated Statements Of Operations Unaudited [Line Items] | ' | ' |
Net sales | $19,292,200 | $16,041,400 |
Operating costs and expenses: | ' | ' |
Cost of sales | 10,469,800 | 9,074,700 |
Advertising | 657,500 | 320,200 |
Selling | 4,598,600 | 4,305,200 |
General and administrative | 2,782,200 | 2,792,200 |
Loss on impairment of long-lived assets | 0 | 286,900 |
Loss on impairment of assets held for sale | 0 | 579,800 |
Total operating costs and expenses | 18,508,100 | 17,359,000 |
Income (loss) from operations | 784,100 | -1,317,600 |
Rental and other income | 34,000 | 240,400 |
Interest expense | -80,000 | -294,600 |
Income (loss) before income taxes | 738,100 | -1,371,800 |
Income tax expense | 94,200 | 0 |
Net income (loss) | $643,900 | ($1,371,800) |
Net income (loss) per common share : | ' | ' |
Basic | $0.06 | ($0.13) |
Diluted | $0.06 | ($0.13) |
Weighted average shares outstanding: | ' | ' |
Basic | 11,251,637 | 10,934,945 |
Diluted | 11,347,418 | 10,934,945 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $3,126,200 | $253,900 |
Trade receivables, net | 1,182,300 | 969,200 |
Inventories, net | 3,211,200 | 1,975,800 |
Prepaid expenses | 269,200 | 139,100 |
Total current assets | 7,788,900 | 3,338,000 |
Property, plant and equipment, net | 518,200 | 467,400 |
Assets held for sale | 0 | 8,907,600 |
Other assets | 51,000 | 82,800 |
Total assets | 8,358,100 | 12,795,800 |
Current liabilities: | ' | ' |
Obligations collateralized by receivables and inventory | 0 | 1,201,400 |
Accounts payable | 860,900 | 1,371,600 |
Accrued payroll and benefits | 553,300 | 509,200 |
Accrued property taxes | 33,400 | 227,900 |
Other accrued expenses | 0 | 19,700 |
Current maturities of long-term debt | 0 | 352,600 |
Total current liabilities | 1,447,600 | 3,682,400 |
Long-term debt, net of current maturities | 0 | 3,010,700 |
Total liabilities | 1,447,600 | 6,693,100 |
Commitments and contingencies | ' | ' |
Shareholders’ equity: | ' | ' |
Common stock; $0.10 par value, authorized 50,000,000 shares; issued and outstanding 11,446,800 shares (2013) and 10,937,000 shares (2012) | 1,144,700 | 1,093,700 |
Capital in excess of par | 5,615,500 | 5,502,600 |
Retained earnings (accumulated deficit) | 150,300 | -493,600 |
Total shareholders’ equity | 6,910,500 | 6,102,700 |
Total liabilities and shareholders’ equity | $8,358,100 | $12,795,800 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Consolidated Balance Sheets Parenthetical [Line Items] | ' | ' |
Common stock par value | $0.10 | $0.10 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 11,446,800 | 10,937,000 |
Common stock, shares outstanding | 11,446,800 | 10,937,000 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholders' Equity (USD $) | Total | Common Stock | Capital in Excess of Par | Retained Earnings (deficit) |
Beginning Balance, Value at Dec. 31, 2011 | $7,415,800 | $1,090,700 | $5,446,900 | $878,200 |
Beginning Balance, Shares at Dec. 31, 2011 | ' | 10,907,000 | ' | ' |
Stock-based compensation, Value | 53,600 | 0 | 53,600 | 0 |
Stock-based compensation, Shares | ' | 0 | ' | ' |
Stock options exercised, Value | 5,100 | 3,000 | 2,100 | 0 |
Stock options exercised, Shares | ' | 30,000 | ' | ' |
Net income (loss) | -1,371,800 | 0 | 0 | -1,371,800 |
Ending Balance, Value at Dec. 31, 2012 | 6,102,700 | 1,093,700 | 5,502,600 | -493,600 |
Ending Balance, Shares at Dec. 31, 2012 | ' | 10,937,000 | ' | ' |
Stock-based compensation, Value | 55,300 | 0 | 55,300 | 0 |
Stock-based compensation, Shares | ' | 0 | ' | ' |
Stock options exercised, Value | 108,600 | 51,000 | 57,600 | 0 |
Stock options exercised, Shares | ' | 509,800 | ' | ' |
Net income (loss) | 643,900 | 0 | 0 | 643,900 |
Ending Balance, Value at Dec. 31, 2013 | $6,910,500 | $1,144,700 | $5,615,500 | $150,300 |
Ending Balance, Shares at Dec. 31, 2013 | ' | 11,446,800 | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income (loss) | $643,900 | ($1,371,800) |
Adjustment to reconcile net income (loss) to net cash (used) provided by operating activities: | ' | ' |
Depreciation and amortization | 135,000 | 420,300 |
Impairment of long-lived assets | 0 | 286,900 |
Impairment on assets held for sale | 0 | 579,800 |
Stock-based compensation | 55,300 | 53,600 |
Loss (gain) on disposal of assets | 7,200 | -25,800 |
Change in operating assets and liabilities: | ' | ' |
Trade receivables | -213,100 | -521,300 |
Inventories | -1,235,400 | 43,400 |
Prepaid expenses and other assets | -98,300 | -20,100 |
Net (payments) proceeds on obligations collateralized by receivables and inventory | -1,201,400 | 924,300 |
Accounts payable and accrued expenses | -680,800 | -351,400 |
Total adjustments to net income (loss) | -3,231,500 | 1,389,700 |
Net Cash (Used) Provided by Operating Activities | -2,587,600 | 17,900 |
Cash flow from investing activities: | ' | ' |
Net proceeds from sale of assets held for sale | 8,922,600 | 0 |
Proceeds from sale of property, plant and equipment | 0 | 26,600 |
Purchase of property, plant and equipment | -208,000 | -30,700 |
Net Cash Provided (Used) by Investing Activities | 8,714,600 | -4,100 |
Cash flow from financing activities: | ' | ' |
Principal payments on long-term debt | -3,363,300 | -340,900 |
Proceeds from exercise of stock options | 108,600 | 5,100 |
Net Cash Used by Financing Activities | -3,254,700 | -335,800 |
Net Increase (Decrease) in Cash and Cash Equivalents | 2,872,300 | -322,000 |
Cash and Cash Equivalents, beginning of year | 253,900 | 575,900 |
Cash and Cash Equivalents, end of year | 3,126,200 | 253,900 |
Supplemental disclosures: | ' | ' |
Cash paid during the period for interest | $48,400 | $294,800 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Organization and Summary of Significant Accounting Policies | ' | |||||||
Note 1. Organization and Summary of Significant Accounting Policies | ||||||||
(a) | Company Background and Management’s Plans | |||||||
Scott’s Liquid Gold-Inc. (a Colorado corporation) was incorporated on February 15, 1954. Scott’s Liquid Gold-Inc. and its wholly-owned subsidiaries (collectively, the “Company”, “we”, “our”, or “us”) develop, manufacture, market and sell quality household and skin and hair care products. We are also an exclusive distributor in the United States of Montagne Jeunesse skin sachets and Batiste Dry Shampoo manufactured by two other companies. Our business is comprised of two segments, household products and skin and hair care products. | ||||||||
Prior to 2013, we experienced significant losses over an extended number of years primarily attributable to sales declines as well as the costs and expenses associated with the ownership of our real estate assets. We used a significant amount of our cash reserves during this time to fund operations and for debt service. Going forward, we are focused on strategies that we believe will enhance our long-term financial health and deliver long-term shareholder value. In order to achieve these objectives, we plan to generate continued growth of our existing brands and products, as well as pursue new opportunities to develop, acquire or distribute new brands and products. We also plan to continue to pursue the following primary goals that we established in 2012: (1) increase sales by strengthening and broadening consumer awareness of our products; (2) add additional products to the mix of products that one or more of our existing major customers already buy from us; (3) add at least one major retailer as a customer; and (4) reduce operating costs and expenses. | ||||||||
We anticipate that our existing cash, especially given the cash proceeds from the sale of our real estate assets on February 1, 2013, and our anticipated cash flow from operations, together with our current borrowing arrangements with Summit Financial Resources, L.P. (“Summit”) and Wells Fargo Bank, National Association (“Wells Fargo”) will be sufficient to meet our cash requirements for the next 12 months. We do not expect to make any significant capital expenditures during 2014. Please see Note 12 for information on the sale of our real estate assets. | ||||||||
(b) | Principles of Consolidation | |||||||
Our consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. | ||||||||
(c) | Use of Estimates | |||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts in our financial statements of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, the realization of deferred tax assets, reserves for slow moving and obsolete inventory, customer returns and allowances, coupon redemptions and stock-based compensation. Actual results could differ from our estimates. | ||||||||
(d) | Cash Equivalents | |||||||
We consider all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. | ||||||||
(e) | Sale of Accounts Receivable | |||||||
On November 3, 2008, effective as of October 31, 2008, we entered into a financing agreement with Summit for the purpose of improving working capital. The financing agreement with Summit was amended on March 12, 2010, March 16, 2011 (effective March 1, 2011) and on June 29, 2012 (effective July 1, 2012). The agreement has a term that expires on January 1, 2015, but it may be renewed for additional 12 month periods unless either party elects to cancel in writing at least 60 days prior to January 1, 2015 and thereafter on the anniversary date of each 12 month period. | ||||||||
The agreement provides for a factoring line up to $1.5 million and is secured primarily by accounts receivable, inventory, any lease in which we are a lessor and all investment property and guarantees by our active subsidiaries. Under the agreement, Summit will make loans at our request and in its discretion based on: (i) its purchases of our receivables, with recourse against us, at an advance rate of 85% (or such other percentage determined by Summit in its discretion) and (ii) our inventory not to exceed certain amounts, including an aggregate maximum of $500,000. Prior to the amendment to the agreement on June 29, 2012, advances under the agreement had an interest rate of 1.5% over the prime rate (as published in The Wall Street Journal) for the accounts receivable portion of the advances and 4.0% over the prime rate for the inventory portion of the borrowings. The amendment on June 29, 2012 reduced these interest rates to 1.0% over the prime rate for the accounts receivable portion and 2.5% over the prime rate for the inventory portion. Consequently, our interest cost adjusts with changes in the prime rate. At December 31, 2013, the prime rate was 3.25%. | ||||||||
In addition, prior to the amendment to the agreement on June 29, 2012, there was an administrative fee of 1.0% per month on the average monthly outstanding loan on the receivable portion of any advance and 1.35% per month on the average monthly outstanding loan on the inventory portion of any advance. The amendment on June 29, 2012 reduced these administrative fees to 0.85% per month on the average monthly outstanding loan on the receivable portion of any advance if the average quarterly loan in the prior quarter was less than or equal to $1,000,000, and to 0.75% if the average quarterly loan in the prior quarter was greater than $1,000,000 and to 1.0% per month on the average monthly outstanding loan on the inventory portion of any advance. | ||||||||
The agreement provides that neither we nor our active subsidiaries may engage in a change in control transaction without the prior written consent of Summit. Events of default include, but are not limited to, our failure to make a payment when due or a default occurring on any of our other indebtedness. | ||||||||
In 2013, we sold approximately $824,200 of our accounts receivables to Summit for approximately $700,600. As the advance rate on these accounts receivables was 85%, we retained an interest equal to 15% of those accounts receivables. On February 4, 2013, we paid $909,778 to Summit to repay the outstanding balance on our credit line and we have maintained a zero loan balance since that time. At December 31, 2013, the entire credit line of $1.5 million was available for future factoring of accounts receivable invoices. | ||||||||
We report these transactions using the authoritative guidance of the Financial Accounting Standards Board (“FASB”) as a secured borrowing rather than as a sale. As a result, affected accounts receivable are reported under the “Current Assets” section within our Consolidated Balance Sheets as “Trade receivables, net.” Similarly, the net liability owing to Summit appears as “Obligations collateralized by receivables and inventory” within the “Current Liabilities” section of our Consolidated Balance Sheets. Net proceeds received on obligations collateralized by receivables and inventory appear as “net cash (used) provided by operating activities” within the “Adjustment to reconcile net income (loss) to net cash used by operating activities” section of our Consolidated Statements of Cash Flow. | ||||||||
On March 16, 2011, with the consent of Summit, we entered into a financing agreement with Wells Fargo for the purpose of further lowering the cost of borrowing associated with the financing of our accounts receivable. Pursuant to this agreement, we may sell accounts receivables from our largest customer, Wal-Mart Stores, Inc. (“Wal-Mart”), at a discount to Wells Fargo; provided, however, that Wells Fargo may reject offers to purchase such receivables in its discretion. These receivables may be purchased by Wells Fargo at a cost to us equal to LIBOR plus 1.15% per annum. The LIBOR rate used depends on the days to maturity of the receivable sold, typically ranging from 102 to 105 days. At December 31, 2013, Wells Fargo used the 104-day LIBOR rate of 0.28%. | ||||||||
The agreement has no fixed termination date, but continues unless terminated by either party giving 30 days prior written notice to the other party. In 2013, we sold approximately $4,098,000 of our relevant accounts receivable to Wells Fargo for approximately $4,080,600. The difference between the invoiced amount of the receivable and the cash that we received from Wells Fargo is a cost to us. This cost is in lieu of any cash discount our customer would have been allowed and, thus, is treated in a manner consistent with standard trade discounts granted to our customers. | ||||||||
The reporting of the sale of accounts receivables to Wells Fargo is treated as a sale rather than as a secured borrowing. As a result, affected accounts receivables are relieved from the Company’s financial statements upon receipt of the cash proceeds. | ||||||||
(f) | Inventories | |||||||
Inventories consist of raw materials and finished goods and are stated at the lower of cost (first-in, first-out method) or market. We record a reserve for slow moving and obsolete products and raw materials. We estimate this reserve based upon historical and anticipated sales. Amounts are stated in Note 2. | ||||||||
(g) | Property, Plant and Equipment | |||||||
Property, plant and equipment are recorded at historical cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets ranging from three to 45 years. Building structures and building improvements are estimated to have useful lives of 35 to 45 years and three to 20 years, respectively. Production equipment and production support equipment are estimated to have useful lives of 15 to 20 years and three to 10 years, respectively. Office furniture and office machines are estimated to have useful lives of 10 to 20 and three to five years, respectively. Carpets, drapes and company vehicles are estimated to have useful lives of five to 10 years. Maintenance and repairs are expensed as incurred. Improvements that extend the useful lives of the asset or provide improved efficiency are capitalized. | ||||||||
(h) | Financial Instruments | |||||||
Financial instruments which potentially subject us to concentrations of credit risk include cash and cash equivalents and trade receivables. We maintain our cash balances in the form of bank demand deposits with financial institutions that we believe are creditworthy. As of the consolidated balance sheet date, and periodically throughout the year, we have maintained balances in various operating accounts in excess of federally insured limits. We establish an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. We have no significant financial instruments with off-balance sheet risk of accounting loss, such as foreign exchange contracts, option contracts or other foreign currency hedging arrangements. | ||||||||
The recorded amounts for cash and cash equivalents, receivables, other current assets, accounts payable and accrued expenses approximate fair value due to the short-term nature of these financial instruments. As of December 31, 2013, we had no long-term debt. Prior to February 1, 2013, our long-term debt bore interest at a fixed rate that adjusted annually to the then prime rate. The carrying value of our long-term debt approximated fair value as of December 31, 2012. | ||||||||
(i) | Long-Lived Assets and Assets Held for Sale | |||||||
We follow FASB authoritative guidance as it relates to the proper accounting treatment for the impairment or disposal of long-lived assets. This guidance requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. | ||||||||
As of September 30, 2012, due to changes in the real estate market in Denver, Colorado, we conducted an evaluation into the fair value of our property, plant and equipment with particular attention to our land and office, warehouse and manufacturing buildings (collectively, the “Property”). We found there to be an impairment of $286,900 in the carrying values of our long-lived assets. We determined the impairment amount after concluding that the low end of the range of fair value estimates at September 30, 2012 should be $9.5 million and the net book value of the Property at September 30, 2012 was approximately $9,786,900. | ||||||||
On November 5, 2012, pursuant to FASB authoritative guidance, we classified the Property as an asset “held for sale.” Upon classification as “held for sale”, the long-lived asset was measured at the lower of its carrying value or fair value less cost to sell, depreciation was ceased and the asset was separately presented on our Consolidated Balance Sheets. | ||||||||
On February 1, 2013, we sold our Property for $9.5 million and received net proceeds of $8.9 million after deducting the expenses for selling the Property. Please see Note 12 for information on the sale of our Property. | ||||||||
(j) | Income Taxes | |||||||
We follow FASB authoritative guidance for the accounting for income taxes which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective income tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which related temporary differences become deductible. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. | ||||||||
Taxes are reported based on tax positions that meet a more-likely-than-not standard and that are measured at the amount that is more-likely-than-not to be realized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits. We classify penalty and interest expense related to income tax liabilities as an income tax expense. There are no interest and penalties recognized in the statement of operations or accrued on the balance sheet. | ||||||||
(k) | Revenue Recognition | |||||||
Our revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. We follow guidance issued by the FASB, which requires that certain criteria be met in order to recognize revenue. If these criteria are not met, then the associated revenue is deferred until it is met. In our case, the criteria generally are met when we have an arrangement to sell a product, we have delivered the product in accordance with that arrangement, the sales price of the product is determinable and we believe that we will be paid for the sale. | ||||||||
We establish reserves for customer returns of our products and customer allowances. We estimate these reserves based upon, among other things, an assessment of historical trends, information from customers and anticipated returns related to current sales activity. These reserves are established in the period of sale and reduce our revenue in that period. | ||||||||
Our reserve for customer allowances includes primarily reserves for trade promotions to support price features, displays and other merchandising of our products to our customers. The actual level of returns and customer allowances are influenced by several factors, including the promotional efforts of our customers, changes in mix of our customers, changes in the mix of the products we sell and the maturity of the product. We may change our estimates based on actual results and consideration of other factors that cause returns and allowances. In the event that actual results differ from our estimates, the results of future periods may be impacted. | ||||||||
We also establish reserves for coupons, rebates and certain other promotional programs for consumers. We estimate these reserves based upon, among other things, an assessment of historical trends and current sales activity. These reserves are recorded as a reduction of revenue at the later of the date at which the revenue is recognized or the date at which the sale incentive is offered. | ||||||||
We have also established an allowance for doubtful accounts. We estimate this allowance based upon, among other things, an assessment of the credit risk of specific customers and historical trends. We believe our allowance for doubtful accounts is adequate to absorb any losses which may arise. In the event that actual losses differ from our estimates, the results of future periods may be impacted. | ||||||||
At December 31, 2013 and December 31, 2012 approximately $821,700 and $468,400, respectively, had been reserved for as a reduction of accounts receivable. Trade promotions to our customers and incentives such as coupons and rebates to the consumer are deducted from gross sales and totaled $2,036,800 and $1,735,700 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
(l) | Advertising Costs | |||||||
Advertising costs are expensed as incurred. | ||||||||
(m) | Stock-based Compensation | |||||||
During 2013, we granted: (i) options to acquire 85,000 shares of our common stock to two executive officers at a price of $0.41 per share; (ii) an option to acquire 30,000 shares of our common stock to a board member at a price of $0.55 per share; (iii) an option to acquire 15,000 shares of our common stock to a regional sales manager at a price of $0.55 per share; (iv) an option to acquire 15,000 shares of our common stock to a regional sales manager at a price of $0.49 per share; and (v) options to acquire 50,000 shares of our common stock to an executive officer at a price of $0.78 per share. These options which vest ratably over 48 months, or upon a change in control, and which expire after five years, were granted at 120% of the market value as of the date of grant. In addition, during 2013, we granted options to acquire 90,000 shares of our common stock to three of our board members. These options which vested upon the date of grant, and which expire after five years, were granted at 120% of the market value as of the date of grant. During 2012, we granted an option to acquire 100,000 shares of our common stock to an executive officer at a price of $0.24 per share. Please see Note 6 for information regarding the 692,830 fewer stock options outstanding at December 31, 2013 than at December 31, 2012. | ||||||||
The weighted average fair market value of the options granted in the years ended December 31, 2013 and 2012 were estimated on the date of grant, using a Black-Scholes option pricing model with the following assumptions: | ||||||||
2013 | 2012 | |||||||
Expected life of options (using the “simplified method”) | 4.5 years | 4.5 years | ||||||
Average risk-free interest rate | 0.8%-1.5 | 0.8 | % | |||||
Average expected volatility of stock | 137%-141% | 143 | % | |||||
Expected dividend rate | None | None | ||||||
Compensation cost related to stock options recognized in operating results (included in general and administrative expenses) under authoritative guidance issued by the FASB was $55,300 and $53,600 in the twelve months ended December 31, 2013 and 2012, respectively. Approximately $128,500 of total unrecognized compensation costs related to non-vested stock options is expected to be recognized over the next forty-eight months. In accordance with this same authoritative guidance, there was no tax benefit from recording the non-cash expense as it relates to the options granted to employees, as these were qualified stock options which are not normally tax deductible. With respect to the non-cash expense associated with the options granted to the non-employee directors, no tax benefit was recognized due to the existence of as yet unutilized net operating losses. At such time as these operating losses have been utilized and a tax benefit is realized from the issuance of non-qualified stock options, a corresponding tax benefit may be recognized. | ||||||||
(n) | Operating Costs and Expenses Classification | |||||||
Cost of sales includes costs associated with manufacturing and distribution including labor, materials, freight-in, purchasing and receiving, quality control, internal transfer costs, repairs, maintenance and other indirect costs, as well as warehousing and distribution costs. We classify shipping and handling costs comprised primarily of freight-out as selling expenses. Other selling expenses consist primarily of wages and benefits for sales and sales support personnel, travel, brokerage commissions and promotional costs, as well as certain other indirect costs. Shipping and handling costs totaled $1,461,700 and $1,487,300, for the years ended December 31, 2013 and 2012, respectively. | ||||||||
General and administrative expenses consist primarily of wages and benefits associated with management and administrative support departments, business insurance costs, professional fees, office facility rent and related expenses and other general support costs. | ||||||||
(o) | Recently Issued Accounting Pronouncements | |||||||
We have considered recently issued accounting pronouncements and do not believe that such pronouncements are of significance or potential significance to us. |
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ' | |||||||
Note 2: Inventories | ||||||||
Inventories, consisting of materials, labor and overhead at December 31 were comprised of the following: | ||||||||
2013 | 2012 | |||||||
Finished goods | $ | 1,636,500 | $ | 959,100 | ||||
Raw materials | 1,621,000 | 1,079,600 | ||||||
Inventory reserve for obsolescence | (46,300 | ) | (62,900 | ) | ||||
$ | 3,211,200 | $ | 1,975,800 | |||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment | ' | |||||||
Note 3: Property, Plant and Equipment | ||||||||
Property, plant and equipment at December 31 were comprised of the following: | ||||||||
2013 | 2012 | |||||||
Production equipment | $ | 4,989,900 | $ | 5,004,900 | ||||
Office furniture and equipment | 794,000 | 1,211,800 | ||||||
Other | 188,200 | 34,200 | ||||||
5,972,100 | 6,250,900 | |||||||
Less accumulated depreciation | (5,453,900 | ) | (5,783,500 | ) | ||||
$ | 518,200 | $ | 467,400 | |||||
Depreciation expense for the years ended December 31, 2013 and 2012 was $135,000 and $420,300, respectively. Please see Note 12 for information on the sale of our Property. |
Debt
Debt | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Debt | ' | |||||||
Note 4: Debt | ||||||||
On June 28, 2006, we entered into a loan with a fifteen year amortization with Citywide Banks (the “Bank”) for $5,156,600 secured by the land, building and fixtures at our Denver, Colorado facilities and repaid the loan in full at the closing on the sale of our real estate assets on February 1, 2013. Interest on the bank loan was at the prime rate as published in The Wall Street Journal, adjusted annually each June. The loan required 180 monthly payments of approximately $38,200 each. The loan agreement contained a number of covenants, including the requirement for us to maintain a current ratio of 1.0:1.0, and a ratio of consolidated long-term debt to consolidated net worth of not more than 1.0:1.0. These ratios were to be calculated in accordance with generally accepted accounting principles in the United States. We could not declare any dividends that would result in a violation of either of these covenants. | ||||||||
With regard to our current ratio, our loan agreement with the Bank was temporarily modified on August 10, 2012, to change our current ratio during the period from April 1, 2012 through November 30, 2012 to 0.9:1.0 from 1.0:1.0. We paid the Bank a one-time modification fee of $17,500. The modification was necessary because our current ratio decreased to below 1.0:1.0 during the second quarter of 2012. The modification enabled us to remain in compliance with the terms of the loan agreement with respect to the ratio through November 30, 2012 and avoid being deemed in default under the loan agreement through such date for failing to comply with the original current ratio requirement. At December 31, 2012, our current ratio was 0.9:1.0 and we were not in compliance with our current ratio covenant. However, our loan with the Bank was repaid in full at the closing of our real estate assets. Please see Note 12 for information on sale of our real estate assets on February 1, 2013. | ||||||||
Affirmative covenants in the loan agreement with the Bank included, among other things, compliance in all material respects with applicable laws and regulations and compliance with our agreements with other parties that materially affect our financial condition. Negative covenants in the loan agreement include, among other things, that without the consent of the Bank, we could not: (1) sell, lease or grant a security interest in our assets; (2) engage in any business activity substantially different than those in which we are presently engaged; (3) sell assets out of the ordinary course of business; or (4) purchase another entity or an interest in another entity. | ||||||||
Long-term debt at December 31 is presented below: | ||||||||
2013 | 2012 | |||||||
Bank loan | $ | 0 | $ | 3,363,300 | ||||
Less current maturities | 0 | 352,600 | ||||||
Long-term debt | $ | 0 | $ | 3,010,700 | ||||
Please see Note 1(e) for a discussion of our financing agreements with Summit and Wells Fargo. Note 1(e) also includes a discussion of the accounting treatment of the funds borrowed pursuant to these agreements. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Taxes | ' | |||||||
Note 5: Income Taxes | ||||||||
The provision for income tax for the years ended December 31 is as follows: | ||||||||
2013 | 2012 | |||||||
Current provision (benefit): | ||||||||
Federal | $ | 32,800 | $ | 0 | ||||
State | 61,400 | 0 | ||||||
Total current provision (benefit) | 94,200 | 0 | ||||||
Deferred provision (benefit): | ||||||||
Federal | 42,600 | (407,800 | ) | |||||
State | 3,800 | (36,600 | ) | |||||
Valuation allowance | (46,400 | ) | 444,400 | |||||
Total deferred provision (benefit) | 0 | 0 | ||||||
Provision (benefit): | ||||||||
Federal | 32,800 | 0 | ||||||
State | 61,400 | 0 | ||||||
Total provision (benefit) | $ | 94,200 | $ | 0 | ||||
Income tax expense (benefit) at the statutory tax rate is reconciled to the overall income tax expense (benefit) as follows: | ||||||||
2013 | 2012 | |||||||
Federal income tax at statutory rates | $ | 251,000 | $ | (466,400 | ) | |||
State income taxes, net of federal tax effect | 22,500 | (41,900 | ) | |||||
Change in unrecognized benefit | (6,300 | ) | 24,900 | |||||
Trade Promotions…………………………………………………………... | (152,700 | ) | 0 | |||||
Other | 26,100 | 39,000 | ||||||
Total | 140,600 | (444,400 | ) | |||||
Change in valuation allowance | (46,400 | ) | 444,400 | |||||
Provision for income taxes | $ | 94,200 | $ | 0 | ||||
Deferred income taxes are based on estimated future tax effects of differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes given the provision of enacted tax laws. The net deferred tax assets and liabilities as of December 31, 2013 and 2012 are comprised of the following: | ||||||||
2013 | 2012 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 3,647,400 | $ | 4,531,300 | ||||
Tax credit and other carryforwards | 302,500 | 255,200 | ||||||
Trade receivables | 160,200 | 20,900 | ||||||
Inventories | 26,900 | 16,600 | ||||||
Accrued vacation | 87,800 | 157,100 | ||||||
Other | 46,100 | 44,300 | ||||||
Total deferred taxes | 4,270,900 | 5,025,400 | ||||||
Deferred tax liability: | ||||||||
Accumulated depreciation for tax purposes | (105,300 | ) | (813,400 | ) | ||||
Total deferred tax liabilities | (105,300 | ) | (813,400 | ) | ||||
Net deferred tax asset, before allowance | 4,165,600 | 4,212,000 | ||||||
Valuation allowance | (4,165,600 | ) | (4,212,000 | ) | ||||
Net deferred tax asset | $ | 0 | $ | 0 | ||||
At December 31, 2013, we had federal net operating loss carryforwards of approximately $9,230,600 and federal tax credit carryforwards related to research and development efforts of approximately $269,800, both of which expire over a period ending in 2033. At December 31, 2013, there was approximately $32,800 of alternative minimum tax credits which have no expiration period. State tax loss carryforwards at December 31, 2013 are approximately $16,655,100 expiring over a period ending in 2033. | ||||||||
A valuation allowance was established due mainly to the uncertainty relating to the future utilization of net operating loss carryforwards. The valuation allowance was decreased by $46,400 for 2013 and increased by $444,400 for 2012, primarily related to uncertainty as to the realization of net operating losses and tax credits for these years. The amount of the deferred tax assets considered realizable could be adjusted in the future based upon changes in circumstances that result in a change in our assessment of our ability to realize those deferred tax assets through the generation of taxable income or other tax events. | ||||||||
We adhere to the authoritative guidance with respect to accounting for uncertainty in income taxes. This guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It requires that we recognize in our consolidated financial statements, only those tax positions that are “more-likely-than-not” of being sustained as of the adoption date, based on the technical merits of the position. As a result of the implementation of this guidance, each year we perform a comprehensive review of our material tax positions. | ||||||||
As a result of this review, we identified certain uncertain tax positions that need to be adjusted. As of December 31, 2013 and December 31, 2012, we identified approximately $395,100 and $412,100 of related tax positions, respectively. | ||||||||
2013 | 2012 | |||||||
Balance at January 1, | $ | 412,100 | $ | 345,000 | ||||
Additions based on tax positions related to current year | 320,000 | 67,100 | ||||||
Reductions for tax positions of prior years or change in valuation | (337,000 | ) | 0 | |||||
Balance at December 31, | $ | 395,100 | $ | 412,100 | ||||
Due to our net operating loss carryforward position and valuation allowance against our net deferred tax assets, the recognition of the unrecognized tax benefits detailed above would not affect our effective tax rate. We do not expect that the amount of unrecognized benefits will change significantly within the next 12 months. | ||||||||
Our policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. As a result of our net operating loss carryforward position, we have no accrued interest or penalties related to uncertain tax positions as of December 31, 2013 or December 31, 2012. | ||||||||
We and our subsidiaries are subject to the following material taxing jurisdictions: United States and Colorado. The tax years that remain open to examination by the Internal Revenue Service are 2010 and years thereafter. However, due to our net operating loss carryforwards from prior periods, the Internal Revenue Service could potentially review the losses back to 2000. The tax years that remain open to examination by the state of Colorado are 2009 and years thereafter. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Shareholders' Equity | ' | |||||||||||||||||
Note 6: Shareholders’ Equity | ||||||||||||||||||
In 1998 and 2005, stock option plans for our employees, officers and directors were adopted. The 1998 plan expired on November 27, 2008. Accordingly, no shares are available for the grant of options under the 1998 plan and no options were outstanding under that plan at December 31, 2013. | ||||||||||||||||||
At the Annual Shareholders’ Meeting in May 2011, shareholders approved an amendment to the 2005 Plan to increase the number of shares issuable under the plan from 1,500,000 shares to a total of 3,000,000 shares. Options granted before May 2011 are granted at not less than current market price of the stock on the date of grant and are exercisable from five to ten years from the grant date. Options granted after May 2011, pursuant to the plan amendment in May, are required to be granted at not less than the higher of (1) 120% of current market price on the date of grant or (2) the average of market price over the prior 30 trading days. Further, pursuant to the amendment the number of options granted to an executive officer or director cannot exceed 200,000, except to the extent such limit had already been exceeded at the time of the amendment. Except for the grant of 90,000 options to three of our directors that vested upon the date of grant, the options granted in 2013 and 2012 are vested each month over a four-year period or upon a change in control. | ||||||||||||||||||
1998 Plan | 2005 Plan | |||||||||||||||||
Number of | Average | Number of | Average | |||||||||||||||
Shares | Option | Shares | Option | |||||||||||||||
Price | Price | |||||||||||||||||
Per | Per | |||||||||||||||||
Share | Share | |||||||||||||||||
Maximum number of shares under the plans | 1,100,000 | 3,000,000 | ||||||||||||||||
Outstanding, December 31, 2011 | 296,900 | $ | 0.71 | 1,417,650 | $ | 0.25 | ||||||||||||
Granted in 2012 | 0 | 0 | 125,000 | 0.23 | ||||||||||||||
Exercised | 0 | 0 | (30,000 | ) | 0.17 | |||||||||||||
Cancelled/Expired | (172,900 | ) | 0 | (249,300 | ) | 0.42 | ||||||||||||
Outstanding, December 31, 2012 | 124,000 | $ | 0.71 | 1,263,350 | $ | 0.22 | ||||||||||||
Granted in 2013 | 0 | 0 | 285,000 | 0.52 | ||||||||||||||
Exercised | 0 | 0 | (509,830 | ) | 0.21 | |||||||||||||
Cancelled/Expired | (124,000 | ) | $ | 0.56 | (344,000 | ) | 0.21 | |||||||||||
Outstanding, December 31, 2013 | 0 | 694,520 | $ | 0.35 | ||||||||||||||
Available for issuance, December 31, 2013 | None | 2,305,480 | ||||||||||||||||
A summary of additional information related to the options outstanding as of December 31, 2013 is as follows: | ||||||||||||||||||
Options Outstanding and Exercisable | ||||||||||||||||||
Weighted Average | ||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Remaining Contractual | Exercise | |||||||||||||||
Life | Price | |||||||||||||||||
$0.17—$0.78 | 694,520 | 3.1 years | $ | 0.35 | ||||||||||||||
Total | 694,520 | 3.1 years | $ | 0.35 | ||||||||||||||
We have an Employee Stock Ownership Plan (“Plan”) to provide retirement benefits for our employees. The Plan is designed to invest primarily in our common stock and is non-contributory on the part of our employees. Contributions to the Plan are discretionary as determined by our Board of Directors. We expense the cost of contributions to the Plan. No contributions were made to the Plan in 2013 or 2012. At December 31, 2013 and 2012, a total of 860,053 and 1,169,540 shares of our common stock, respectively, have been allocated and earned by our employees. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Earnings Per Share | ' | |||||||
Note 7: Earnings per Share | ||||||||
We present basic and diluted earnings or loss per share in accordance with authoritative guidance which establishes standards for computing and presenting basic and diluted earnings per share. Per share data is determined by using the weighted average number of common shares outstanding. Common equivalent shares are considered only for diluted earnings per share, unless considered anti-dilutive. Common equivalent shares, determined using the treasury stock method, result from stock options with exercise prices that are below the average market price of the common stock. | ||||||||
The potentially dilutive securities are comprised of outstanding stock options to acquire 694,520 and 1,387,350 of our shares at December 31, 2013 and 2012, respectively, a decrease of 692,830 or 49.9%. This decrease is due primarily to stock options being exercised as well as stock options expiring. At December 31, 2013 options to acquire 106,778 of our shares had exercise prices that were lower than the average market price of our shares for the year ended December 31, 2013. At December 3, 2012, potentially dilutive securities were excluded from the computation of weighted average shares outstanding due to their anti-dilutive effect. | ||||||||
A reconciliation of the weighted average number of common shares outstanding for the years ended December 31 is as follows: | ||||||||
2013 | 2012 | |||||||
Common shares outstanding, beginning of the year | 10,937,000 | 10,907,000 | ||||||
Weighted average common shares issued | 314,637 | 27,945 | ||||||
Weighted average number of common shares outstanding | 11,251,637 | 10,934,945 | ||||||
Dilutive effect of common share equivalents | 95,781 | 0 | ||||||
Diluted weighted average number of common shares outstanding | 11,347,418 | 10,934,945 | ||||||
We have authorized 20,000,000 shares of preferred stock issuable in one or more series, none of which are issued or outstanding as of December 31, 2013. |
Segment_Information
Segment Information | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Segment Information | ' | |||||||||||||||
Note 8: Segment Information | ||||||||||||||||
We operate in two different segments: household products and skin and hair care products. Our products are sold nationally and internationally (primarily Canada), directly through our sales force and indirectly through independent brokers, to mass merchandisers, drugstores, supermarkets, hardware stores and other retail outlets and to wholesale distributors. Management has chosen to organize our business around these segments based on differences in the products sold. | ||||||||||||||||
Accounting policies for our segments are the same as those described in Note 1. We evaluate segment performance based on segment income or loss before income taxes. | ||||||||||||||||
The following provides information on our segments as of and for the years ended December 31: | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Household | Skin and Hair | Household | Skin and Hair | |||||||||||||
Products | Care Products | Products | Care Products | |||||||||||||
Net sales to external customers | $ | 5,335,500 | $ | 13,956,700 | $ | 4,895,600 | $ | 11,145,800 | ||||||||
(Loss) income before income taxes | $ | (990,900 | ) | $ | 1,729,000 | $ | (1,985,600 | ) | $ | 613,800 | ||||||
Identifiable assets | $ | 3,514,000 | $ | 3,733,800 | $ | 2,388,200 | $ | 3,905,600 | ||||||||
The following is a reconciliation of segment information to consolidated information: | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Net sales to external customers | $ | 19,292,200 | $ | 16,041,400 | ||||||||||||
Income (loss) before income taxes | $ | 738,100 | $ | (1,371,800 | ) | |||||||||||
Consolidated income (loss) before income taxes | $ | 738,100 | $ | (1,371,800 | ) | |||||||||||
Identifiable assets | $ | 7,247,800 | $ | 6,508,800 | ||||||||||||
Corporate assets | 1,110,300 | 6,287,000 | ||||||||||||||
Consolidated total assets | $ | 8,358,100 | $ | 12,795,800 | ||||||||||||
Corporate assets noted above are comprised primarily of our cash and property and equipment not directly associated with manufacturing, warehousing, shipping and receiving activities. | ||||||||||||||||
We attribute our net sales to different geographic areas based on the location of the customer. All of our long-lived assets are located in the United States. For the year ended December 31, revenues for each geographical area are as follows: | ||||||||||||||||
2013 | 2012 | |||||||||||||||
United States | $ | 19,190,300 | $ | 15,975,800 | ||||||||||||
Foreign countries | 101,900 | 65,600 | ||||||||||||||
Total net sales | $ | 19,292,200 | $ | 16,041,400 | ||||||||||||
In 2013 and 2012, Wal-Mart accounted for approximately $4,130,300 and $3,577,800, respectively, of our consolidated net sales, Ulta Salon, Cosmetics & Fragrance, Inc. (“Ulta”) accounted for approximately $3,253,400 and $1,742,000, of our consolidated net sales, respectively and Walgreens Co. (“Walgreens”) accounted for approximately $1,319,800 and $1,110,500 of our consolidated net sales, respectively. We sell both household products and skin and hair care products to Wal-Mart, but we sell only skin and hair care products to Ulta and Walgreens. These customers are not related to us. | ||||||||||||||||
The outstanding trade receivables from Wal-Mart accounted for 13.7% and 8.7% of our total trade receivables at December 31, 2013 and 2012, respectively. The outstanding trade receivables from Ulta accounted for 20.9% and 19.4% of our total trade receivables at December 31, 2013 and 2012, respectively. The outstanding trade receivables from Walgreens accounted for 15.5% and 15.0% of our total trade receivables at December 31, 2013 and 2012, respectively. A loss of one or more of these customers could have a material adverse effect on us because it is uncertain whether our consumer base served by these customers would purchase our products at other retail outlets. No long-term contracts exist between us and these customers or any other customer. |
Retirement_Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2013 | |
Retirement Plans | ' |
Note 9: Retirement Plans | |
We have a 401(k) Profit Sharing Plan (“401(k) Plan”) covering our full-time employees who have completed four months of service as defined in the 401(k) Plan, and are age 18 or older. Participants may defer up to 75% of their compensation up to the maximum limit determined by law. We may make discretionary “matching” contributions up to a maximum of 6% of each participant’s compensation, but only for those employees earning no more than $35,000 annually. Additionally, we can make discretionary “profit sharing” contributions to eligible employees. Participants are always fully vested in their contributions, matching contributions and allocated earnings thereon. Vesting in our profit sharing contribution is based on years of service, with a participant fully vested after five years. Our Company matching contributions totaled $3,500 and $2,500, in 2013 and 2012, respectively. We have made no discretionary profit sharing contributions in 2013 and 2012. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies | ' |
Note 10. Commitments and Contingencies | |
Leases | |
In connection with the sale of our real estate assets on February 1, 2013, we entered into a lease with the purchaser for approximately 16,078 square feet of office space (the “Office Lease”) and approximately 113,620 square feet of manufacturing and warehouse space (the “Warehouse Lease”). Annual rental expense under the Office Lease and Warehouse Lease for 2013 was $191,600 and $338,500, respectively. These leases did not exist in 2012. Minimum annual rental payments under the Office Lease are approximately $214,800, $221,200 and $18,500 for the years ending December 31, 2014, 2015 and 2016 respectively. Minimum annual rental payments under the Warehouse Lease are approximately $379,400, $390,800 and $32,600 for the years ending December 31, 2014, 2015 and 2016 respectively. See Note 12 for information on the terms of the Office Lease and the Warehouse Lease. | |
We have entered into various operating lease agreements, primarily for office equipment. Annual rental expense under these leases totaled $78,500 and $77,400, in 2013 and 2012, respectively. Minimum annual rental payments under noncancellable operating leases are approximately $61,500, $23,700 and $7,000 for the years ending December 31, 2014, 2015 and 2016, respectively. Presently we have no lease commitments beyond 2016. | |
In connection with the sale of our real estate assets on February 1, 2013, we assigned the following leases to the purchaser. In October 2009, we entered into a five-year operating lease agreement for one floor of our five-story office building to an established subsidiary of an international company. We began to receive rent payments in November 2009 that would have continued through October 2014. These rent payments included annual rental escalations of between 3.7% and 4.2%. In September of 2012, we entered into a lease expiring December 31, 2015 for one-half of a floor of our office building. We began to receive rent payments in November 2012. In December of 2012, we entered into a lease expiring March 31, 2016 for one of our warehouse buildings. Rent payments were to start in May 2013. |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Valuation and Qualifying Accounts | ' | |||||||||||||||
Note 11. | ||||||||||||||||
Valuation and Qualifying Accounts | ||||||||||||||||
Balance at | Additions | Deductions | Balance at | |||||||||||||
beginning | charged to | end of | ||||||||||||||
of year | expense | year | ||||||||||||||
Year ended December 31, 2012 | ||||||||||||||||
Returns and allowances and doubtful accounts reserve | $ | 636,500 | $ | 1,978,800 | $ | 2,146,900 | $ | 468,400 | ||||||||
Year ended December 31, 2013 | ||||||||||||||||
Returns and allowances and doubtful accounts reserve | $ | 468,400 | $ | 2,039,300 | $ | 1,686,000 | $ | 821,700 | ||||||||
Sale_of_Property
Sale of Property | 12 Months Ended |
Dec. 31, 2013 | |
Sale of Property | ' |
Note 12. Sale of Property | |
On February 1, 2013, we consummated the sale of our Property located at 4880 Havana Street, Denver, Colorado, consisting of approximately 10.8 acres of land improved with four buildings containing approximately 241,684 square feet of office, warehouse, and manufacturing space, with associated improvements and personal property, and adjacent vacant land of approximately 5.5 acres. We sold the Property for a purchase price of $9,500,000 and incurred selling expenses of $579,800, including $570,000 for real estate brokerage commissions. | |
In connection with the sale, we entered into the Office Lease with purchaser to lease approximately 16,078 square feet of office space and entered into the Warehouse Lease to lease approximately 113,620 square feet of manufacturing and warehouse space currently used by us. Each of the Office Lease and the Warehouse Lease has an initial term of three years, with options to extend the term for two additional terms of three years each. Rent for the Office Lease is $13.00 per square foot per annum, with annual 3% increases. Rent for the Warehouse Lease is $3.25 per square foot per annum, with annual 3% increases, and we will pay an additional $1.25 per square foot per annum as our share of the purchaser’s operating expenses under the Warehouse Lease (including taxes, insurance and common area maintenance charges). If certain uncontrollable operating expenses increase by more than 5% per year, our share of operating expenses under the Warehouse Lease may be increased. | |
As of the date of the closing, the principal and interest balance on our long-term debt secured by the Property with the Bank was $3,373,961. This debt was repaid in full at closing. We also paid approximately $202,000 at closing for real estate property taxes for 2012. In addition, on February 4, 2013, we paid $909,778 to Summit to repay the outstanding balance on our credit line with Summit and we have maintained a zero loan balance since that time. We made this payment to reduce our interest costs. Please see Note 1(e) for a discussion of our financing agreement with Summit. Also, in February 2013, we paid certain other financial obligations to suppliers and vendors in the amount of approximately $960,000 and we incurred approximately $150,000 in capital expenditures as a result of the sale of our Property. |
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Company Background and Management's Plan | ' | |||||||
(a) | Company Background and Management’s Plans | |||||||
Scott’s Liquid Gold-Inc. (a Colorado corporation) was incorporated on February 15, 1954. Scott’s Liquid Gold-Inc. and its wholly-owned subsidiaries (collectively, the “Company”, “we”, “our”, or “us”) develop, manufacture, market and sell quality household and skin and hair care products. We are also an exclusive distributor in the United States of Montagne Jeunesse skin sachets and Batiste Dry Shampoo manufactured by two other companies. Our business is comprised of two segments, household products and skin and hair care products. | ||||||||
Prior to 2013, we experienced significant losses over an extended number of years primarily attributable to sales declines as well as the costs and expenses associated with the ownership of our real estate assets. We used a significant amount of our cash reserves during this time to fund operations and for debt service. Going forward, we are focused on strategies that we believe will enhance our long-term financial health and deliver long-term shareholder value. In order to achieve these objectives, we plan to generate continued growth of our existing brands and products, as well as pursue new opportunities to develop, acquire or distribute new brands and products. We also plan to continue to pursue the following primary goals that we established in 2012: (1) increase sales by strengthening and broadening consumer awareness of our products; (2) add additional products to the mix of products that one or more of our existing major customers already buy from us; (3) add at least one major retailer as a customer; and (4) reduce operating costs and expenses. | ||||||||
We anticipate that our existing cash, especially given the cash proceeds from the sale of our real estate assets on February 1, 2013, and our anticipated cash flow from operations, together with our current borrowing arrangements with Summit Financial Resources, L.P. (“Summit”) and Wells Fargo Bank, National Association (“Wells Fargo”) will be sufficient to meet our cash requirements for the next 12 months. We do not expect to make any significant capital expenditures during 2014. Please see Note 12 for information on the sale of our real estate assets. | ||||||||
Principles of Consolidation | ' | |||||||
(b) | Principles of Consolidation | |||||||
Our consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. | ||||||||
Use of Estimates | ' | |||||||
(c) | Use of Estimates | |||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts in our financial statements of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, the realization of deferred tax assets, reserves for slow moving and obsolete inventory, customer returns and allowances, coupon redemptions and stock-based compensation. Actual results could differ from our estimates. | ||||||||
Cash Equivalents | ' | |||||||
(d) | Cash Equivalents | |||||||
We consider all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. | ||||||||
Sale of Accounts Receivable | ' | |||||||
(e) | Sale of Accounts Receivable | |||||||
On November 3, 2008, effective as of October 31, 2008, we entered into a financing agreement with Summit for the purpose of improving working capital. The financing agreement with Summit was amended on March 12, 2010, March 16, 2011 (effective March 1, 2011) and on June 29, 2012 (effective July 1, 2012). The agreement has a term that expires on January 1, 2015, but it may be renewed for additional 12 month periods unless either party elects to cancel in writing at least 60 days prior to January 1, 2015 and thereafter on the anniversary date of each 12 month period. | ||||||||
The agreement provides for a factoring line up to $1.5 million and is secured primarily by accounts receivable, inventory, any lease in which we are a lessor and all investment property and guarantees by our active subsidiaries. Under the agreement, Summit will make loans at our request and in its discretion based on: (i) its purchases of our receivables, with recourse against us, at an advance rate of 85% (or such other percentage determined by Summit in its discretion) and (ii) our inventory not to exceed certain amounts, including an aggregate maximum of $500,000. Prior to the amendment to the agreement on June 29, 2012, advances under the agreement had an interest rate of 1.5% over the prime rate (as published in The Wall Street Journal) for the accounts receivable portion of the advances and 4.0% over the prime rate for the inventory portion of the borrowings. The amendment on June 29, 2012 reduced these interest rates to 1.0% over the prime rate for the accounts receivable portion and 2.5% over the prime rate for the inventory portion. Consequently, our interest cost adjusts with changes in the prime rate. At December 31, 2013, the prime rate was 3.25%. | ||||||||
In addition, prior to the amendment to the agreement on June 29, 2012, there was an administrative fee of 1.0% per month on the average monthly outstanding loan on the receivable portion of any advance and 1.35% per month on the average monthly outstanding loan on the inventory portion of any advance. The amendment on June 29, 2012 reduced these administrative fees to 0.85% per month on the average monthly outstanding loan on the receivable portion of any advance if the average quarterly loan in the prior quarter was less than or equal to $1,000,000, and to 0.75% if the average quarterly loan in the prior quarter was greater than $1,000,000 and to 1.0% per month on the average monthly outstanding loan on the inventory portion of any advance. | ||||||||
The agreement provides that neither we nor our active subsidiaries may engage in a change in control transaction without the prior written consent of Summit. Events of default include, but are not limited to, our failure to make a payment when due or a default occurring on any of our other indebtedness. | ||||||||
In 2013, we sold approximately $824,200 of our accounts receivables to Summit for approximately $700,600. As the advance rate on these accounts receivables was 85%, we retained an interest equal to 15% of those accounts receivables. On February 4, 2013, we paid $909,778 to Summit to repay the outstanding balance on our credit line and we have maintained a zero loan balance since that time. At December 31, 2013, the entire credit line of $1.5 million was available for future factoring of accounts receivable invoices. | ||||||||
We report these transactions using the authoritative guidance of the Financial Accounting Standards Board (“FASB”) as a secured borrowing rather than as a sale. As a result, affected accounts receivable are reported under the “Current Assets” section within our Consolidated Balance Sheets as “Trade receivables, net.” Similarly, the net liability owing to Summit appears as “Obligations collateralized by receivables and inventory” within the “Current Liabilities” section of our Consolidated Balance Sheets. Net proceeds received on obligations collateralized by receivables and inventory appear as “net cash (used) provided by operating activities” within the “Adjustment to reconcile net income (loss) to net cash used by operating activities” section of our Consolidated Statements of Cash Flow. | ||||||||
On March 16, 2011, with the consent of Summit, we entered into a financing agreement with Wells Fargo for the purpose of further lowering the cost of borrowing associated with the financing of our accounts receivable. Pursuant to this agreement, we may sell accounts receivables from our largest customer, Wal-Mart Stores, Inc. (“Wal-Mart”), at a discount to Wells Fargo; provided, however, that Wells Fargo may reject offers to purchase such receivables in its discretion. These receivables may be purchased by Wells Fargo at a cost to us equal to LIBOR plus 1.15% per annum. The LIBOR rate used depends on the days to maturity of the receivable sold, typically ranging from 102 to 105 days. At December 31, 2013, Wells Fargo used the 104-day LIBOR rate of 0.28%. | ||||||||
The agreement has no fixed termination date, but continues unless terminated by either party giving 30 days prior written notice to the other party. In 2013, we sold approximately $4,098,000 of our relevant accounts receivable to Wells Fargo for approximately $4,080,600. The difference between the invoiced amount of the receivable and the cash that we received from Wells Fargo is a cost to us. This cost is in lieu of any cash discount our customer would have been allowed and, thus, is treated in a manner consistent with standard trade discounts granted to our customers. | ||||||||
The reporting of the sale of accounts receivables to Wells Fargo is treated as a sale rather than as a secured borrowing. As a result, affected accounts receivables are relieved from the Company’s financial statements upon receipt of the cash proceeds. | ||||||||
Inventories | ' | |||||||
(f) | Inventories | |||||||
Inventories consist of raw materials and finished goods and are stated at the lower of cost (first-in, first-out method) or market. We record a reserve for slow moving and obsolete products and raw materials. We estimate this reserve based upon historical and anticipated sales. Amounts are stated in Note 2. | ||||||||
Property, Plant and Equipment | ' | |||||||
(g) | Property, Plant and Equipment | |||||||
Property, plant and equipment are recorded at historical cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets ranging from three to 45 years. Building structures and building improvements are estimated to have useful lives of 35 to 45 years and three to 20 years, respectively. Production equipment and production support equipment are estimated to have useful lives of 15 to 20 years and three to 10 years, respectively. Office furniture and office machines are estimated to have useful lives of 10 to 20 and three to five years, respectively. Carpets, drapes and company vehicles are estimated to have useful lives of five to 10 years. Maintenance and repairs are expensed as incurred. Improvements that extend the useful lives of the asset or provide improved efficiency are capitalized. | ||||||||
Financial Instruments | ' | |||||||
(h) | Financial Instruments | |||||||
Financial instruments which potentially subject us to concentrations of credit risk include cash and cash equivalents and trade receivables. We maintain our cash balances in the form of bank demand deposits with financial institutions that we believe are creditworthy. As of the consolidated balance sheet date, and periodically throughout the year, we have maintained balances in various operating accounts in excess of federally insured limits. We establish an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. We have no significant financial instruments with off-balance sheet risk of accounting loss, such as foreign exchange contracts, option contracts or other foreign currency hedging arrangements. | ||||||||
The recorded amounts for cash and cash equivalents, receivables, other current assets, accounts payable and accrued expenses approximate fair value due to the short-term nature of these financial instruments. As of December 31, 2013, we had no long-term debt. Prior to February 1, 2013, our long-term debt bore interest at a fixed rate that adjusted annually to the then prime rate. The carrying value of our long-term debt approximated fair value as of December 31, 2012. | ||||||||
Long-Lived Assets and Assets Held for Sale | ' | |||||||
(i) | Long-Lived Assets and Assets Held for Sale | |||||||
We follow FASB authoritative guidance as it relates to the proper accounting treatment for the impairment or disposal of long-lived assets. This guidance requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. | ||||||||
As of September 30, 2012, due to changes in the real estate market in Denver, Colorado, we conducted an evaluation into the fair value of our property, plant and equipment with particular attention to our land and office, warehouse and manufacturing buildings (collectively, the “Property”). We found there to be an impairment of $286,900 in the carrying values of our long-lived assets. We determined the impairment amount after concluding that the low end of the range of fair value estimates at September 30, 2012 should be $9.5 million and the net book value of the Property at September 30, 2012 was approximately $9,786,900. | ||||||||
On November 5, 2012, pursuant to FASB authoritative guidance, we classified the Property as an asset “held for sale.” Upon classification as “held for sale”, the long-lived asset was measured at the lower of its carrying value or fair value less cost to sell, depreciation was ceased and the asset was separately presented on our Consolidated Balance Sheets. | ||||||||
On February 1, 2013, we sold our Property for $9.5 million and received net proceeds of $8.9 million after deducting the expenses for selling the Property. Please see Note 12 for information on the sale of our Property. | ||||||||
Income Taxes | ' | |||||||
(j) | Income Taxes | |||||||
We follow FASB authoritative guidance for the accounting for income taxes which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective income tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which related temporary differences become deductible. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. | ||||||||
Taxes are reported based on tax positions that meet a more-likely-than-not standard and that are measured at the amount that is more-likely-than-not to be realized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits. We classify penalty and interest expense related to income tax liabilities as an income tax expense. There are no interest and penalties recognized in the statement of operations or accrued on the balance sheet. | ||||||||
Revenue Recognition | ' | |||||||
(k) | Revenue Recognition | |||||||
Our revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. We follow guidance issued by the FASB, which requires that certain criteria be met in order to recognize revenue. If these criteria are not met, then the associated revenue is deferred until it is met. In our case, the criteria generally are met when we have an arrangement to sell a product, we have delivered the product in accordance with that arrangement, the sales price of the product is determinable and we believe that we will be paid for the sale. | ||||||||
We establish reserves for customer returns of our products and customer allowances. We estimate these reserves based upon, among other things, an assessment of historical trends, information from customers and anticipated returns related to current sales activity. These reserves are established in the period of sale and reduce our revenue in that period. | ||||||||
Our reserve for customer allowances includes primarily reserves for trade promotions to support price features, displays and other merchandising of our products to our customers. The actual level of returns and customer allowances are influenced by several factors, including the promotional efforts of our customers, changes in mix of our customers, changes in the mix of the products we sell and the maturity of the product. We may change our estimates based on actual results and consideration of other factors that cause returns and allowances. In the event that actual results differ from our estimates, the results of future periods may be impacted. | ||||||||
We also establish reserves for coupons, rebates and certain other promotional programs for consumers. We estimate these reserves based upon, among other things, an assessment of historical trends and current sales activity. These reserves are recorded as a reduction of revenue at the later of the date at which the revenue is recognized or the date at which the sale incentive is offered. | ||||||||
We have also established an allowance for doubtful accounts. We estimate this allowance based upon, among other things, an assessment of the credit risk of specific customers and historical trends. We believe our allowance for doubtful accounts is adequate to absorb any losses which may arise. In the event that actual losses differ from our estimates, the results of future periods may be impacted. | ||||||||
At December 31, 2013 and December 31, 2012 approximately $821,700 and $468,400, respectively, had been reserved for as a reduction of accounts receivable. Trade promotions to our customers and incentives such as coupons and rebates to the consumer are deducted from gross sales and totaled $2,036,800 and $1,735,700 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
Advertising Costs | ' | |||||||
(l) | Advertising Costs | |||||||
Advertising costs are expensed as incurred. | ||||||||
Stock-based Compensation | ' | |||||||
(m) | Stock-based Compensation | |||||||
During 2013, we granted: (i) options to acquire 85,000 shares of our common stock to two executive officers at a price of $0.41 per share; (ii) an option to acquire 30,000 shares of our common stock to a board member at a price of $0.55 per share; (iii) an option to acquire 15,000 shares of our common stock to a regional sales manager at a price of $0.55 per share; (iv) an option to acquire 15,000 shares of our common stock to a regional sales manager at a price of $0.49 per share; and (v) options to acquire 50,000 shares of our common stock to an executive officer at a price of $0.78 per share. These options which vest ratably over 48 months, or upon a change in control, and which expire after five years, were granted at 120% of the market value as of the date of grant. In addition, during 2013, we granted options to acquire 90,000 shares of our common stock to three of our board members. These options which vested upon the date of grant, and which expire after five years, were granted at 120% of the market value as of the date of grant. During 2012, we granted an option to acquire 100,000 shares of our common stock to an executive officer at a price of $0.24 per share. Please see Note 6 for information regarding the 692,830 fewer stock options outstanding at December 31, 2013 than at December 31, 2012. | ||||||||
The weighted average fair market value of the options granted in the years ended December 31, 2013 and 2012 were estimated on the date of grant, using a Black-Scholes option pricing model with the following assumptions: | ||||||||
2013 | 2012 | |||||||
Expected life of options (using the “simplified method”) | 4.5 years | 4.5 years | ||||||
Average risk-free interest rate | 0.8%-1.5 | 0.8 | % | |||||
Average expected volatility of stock | 137%-141% | 143 | % | |||||
Expected dividend rate | None | None | ||||||
Compensation cost related to stock options recognized in operating results (included in general and administrative expenses) under authoritative guidance issued by the FASB was $55,300 and $53,600 in the twelve months ended December 31, 2013 and 2012, respectively. Approximately $128,500 of total unrecognized compensation costs related to non-vested stock options is expected to be recognized over the next forty-eight months. In accordance with this same authoritative guidance, there was no tax benefit from recording the non-cash expense as it relates to the options granted to employees, as these were qualified stock options which are not normally tax deductible. With respect to the non-cash expense associated with the options granted to the non-employee directors, no tax benefit was recognized due to the existence of as yet unutilized net operating losses. At such time as these operating losses have been utilized and a tax benefit is realized from the issuance of non-qualified stock options, a corresponding tax benefit may be recognized. | ||||||||
Operating Costs and Expenses Classification | ' | |||||||
(n) | Operating Costs and Expenses Classification | |||||||
Cost of sales includes costs associated with manufacturing and distribution including labor, materials, freight-in, purchasing and receiving, quality control, internal transfer costs, repairs, maintenance and other indirect costs, as well as warehousing and distribution costs. We classify shipping and handling costs comprised primarily of freight-out as selling expenses. Other selling expenses consist primarily of wages and benefits for sales and sales support personnel, travel, brokerage commissions and promotional costs, as well as certain other indirect costs. Shipping and handling costs totaled $1,461,700 and $1,487,300, for the years ended December 31, 2013 and 2012, respectively. | ||||||||
General and administrative expenses consist primarily of wages and benefits associated with management and administrative support departments, business insurance costs, professional fees, office facility rent and related expenses and other general support costs. | ||||||||
Recently Issued Accounting Pronouncements | ' | |||||||
(o) | Recently Issued Accounting Pronouncements | |||||||
We have considered recently issued accounting pronouncements and do not believe that such pronouncements are of significance or potential significance to us. |
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Weighted Average Fair Market Value of the Options Granted Estimated on the Date of Grant Assumptions | ' | |||||||
The weighted average fair market value of the options granted in the years ended December 31, 2013 and 2012 were estimated on the date of grant, using a Black-Scholes option pricing model with the following assumptions: | ||||||||
2013 | 2012 | |||||||
Expected life of options (using the “simplified method”) | 4.5 years | 4.5 years | ||||||
Average risk-free interest rate | 0.8%-1.5 | 0.8 | % | |||||
Average expected volatility of stock | 137%-141% | 143 | % | |||||
Expected dividend rate | None | None | ||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Composition of Inventory | ' | |||||||
Inventories, consisting of materials, labor and overhead at December 31 were comprised of the following: | ||||||||
2013 | 2012 | |||||||
Finished goods | $ | 1,636,500 | $ | 959,100 | ||||
Raw materials | 1,621,000 | 1,079,600 | ||||||
Inventory reserve for obsolescence | (46,300 | ) | (62,900 | ) | ||||
$ | 3,211,200 | $ | 1,975,800 | |||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Schedule of Property, Plant and Equipment | ' | |||||||
Property, plant and equipment at December 31 were comprised of the following: | ||||||||
2013 | 2012 | |||||||
Production equipment | $ | 4,989,900 | $ | 5,004,900 | ||||
Office furniture and equipment | 794,000 | 1,211,800 | ||||||
Other | 188,200 | 34,200 | ||||||
5,972,100 | 6,250,900 | |||||||
Less accumulated depreciation | (5,453,900 | ) | (5,783,500 | ) | ||||
$ | 518,200 | $ | 467,400 | |||||
Debt_Tables
Debt (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Schedule of Long-term debt | ' | |||||||
Long-term debt at December 31 is presented below: | ||||||||
2013 | 2012 | |||||||
Bank loan | $ | 0 | $ | 3,363,300 | ||||
Less current maturities | 0 | 352,600 | ||||||
Long-term debt | $ | 0 | $ | 3,010,700 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Schedule of Provision for Income Tax | ' | |||||||
The provision for income tax for the years ended December 31 is as follows: | ||||||||
2013 | 2012 | |||||||
Current provision (benefit): | ||||||||
Federal | $ | 32,800 | $ | 0 | ||||
State | 61,400 | 0 | ||||||
Total current provision (benefit) | 94,200 | 0 | ||||||
Deferred provision (benefit): | ||||||||
Federal | 42,600 | (407,800 | ) | |||||
State | 3,800 | (36,600 | ) | |||||
Valuation allowance | (46,400 | ) | 444,400 | |||||
Total deferred provision (benefit) | 0 | 0 | ||||||
Provision (benefit): | ||||||||
Federal | 32,800 | 0 | ||||||
State | 61,400 | 0 | ||||||
Total provision (benefit) | $ | 94,200 | $ | 0 | ||||
Schedule of Income Tax Expense (Benefit) at the Statutory Tax Rate | ' | |||||||
Income tax expense (benefit) at the statutory tax rate is reconciled to the overall income tax expense (benefit) as follows: | ||||||||
2013 | 2012 | |||||||
Federal income tax at statutory rates | $ | 251,000 | $ | (466,400 | ) | |||
State income taxes, net of federal tax effect | 22,500 | (41,900 | ) | |||||
Change in unrecognized benefit | (6,300 | ) | 24,900 | |||||
Trade Promotions…………………………………………………………... | (152,700 | ) | 0 | |||||
Other | 26,100 | 39,000 | ||||||
Total | 140,600 | (444,400 | ) | |||||
Change in valuation allowance | (46,400 | ) | 444,400 | |||||
Provision for income taxes | $ | 94,200 | $ | 0 | ||||
Schedule of Net Deferred Tax Assets and Liabilities | ' | |||||||
Deferred income taxes are based on estimated future tax effects of differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes given the provision of enacted tax laws. The net deferred tax assets and liabilities as of December 31, 2013 and 2012 are comprised of the following: | ||||||||
2013 | 2012 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 3,647,400 | $ | 4,531,300 | ||||
Tax credit and other carryforwards | 302,500 | 255,200 | ||||||
Trade receivables | 160,200 | 20,900 | ||||||
Inventories | 26,900 | 16,600 | ||||||
Accrued vacation | 87,800 | 157,100 | ||||||
Other | 46,100 | 44,300 | ||||||
Total deferred taxes | 4,270,900 | 5,025,400 | ||||||
Deferred tax liability: | ||||||||
Accumulated depreciation for tax purposes | (105,300 | ) | (813,400 | ) | ||||
Total deferred tax liabilities | (105,300 | ) | (813,400 | ) | ||||
Net deferred tax asset, before allowance | 4,165,600 | 4,212,000 | ||||||
Valuation allowance | (4,165,600 | ) | (4,212,000 | ) | ||||
Net deferred tax asset | $ | 0 | $ | 0 | ||||
Schedule of Deferred Tax Assets | ' | |||||||
2013 | 2012 | |||||||
Balance at January 1, | $ | 412,100 | $ | 345,000 | ||||
Additions based on tax positions related to current year | 320,000 | 67,100 | ||||||
Reductions for tax positions of prior years or change in valuation | (337,000 | ) | 0 | |||||
Balance at December 31, | $ | 395,100 | $ | 412,100 | ||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Schedule of Options Granted | ' | |||||||||||||||||
1998 Plan | 2005 Plan | |||||||||||||||||
Number of | Average | Number of | Average | |||||||||||||||
Shares | Option | Shares | Option | |||||||||||||||
Price | Price | |||||||||||||||||
Per | Per | |||||||||||||||||
Share | Share | |||||||||||||||||
Maximum number of shares under the plans | 1,100,000 | 3,000,000 | ||||||||||||||||
Outstanding, December 31, 2011 | 296,900 | $ | 0.71 | 1,417,650 | $ | 0.25 | ||||||||||||
Granted in 2012 | 0 | 0 | 125,000 | 0.23 | ||||||||||||||
Exercised | 0 | 0 | (30,000 | ) | 0.17 | |||||||||||||
Cancelled/Expired | (172,900 | ) | 0 | (249,300 | ) | 0.42 | ||||||||||||
Outstanding, December 31, 2012 | 124,000 | $ | 0.71 | 1,263,350 | $ | 0.22 | ||||||||||||
Granted in 2013 | 0 | 0 | 285,000 | 0.52 | ||||||||||||||
Exercised | 0 | 0 | (509,830 | ) | 0.21 | |||||||||||||
Cancelled/Expired | (124,000 | ) | $ | 0.56 | (344,000 | ) | 0.21 | |||||||||||
Outstanding, December 31, 2013 | 0 | 694,520 | $ | 0.35 | ||||||||||||||
Available for issuance, December 31, 2013 | None | 2,305,480 | ||||||||||||||||
Summary of Additional Information Related to the Options Outstanding | ' | |||||||||||||||||
A summary of additional information related to the options outstanding as of December 31, 2013 is as follows: | ||||||||||||||||||
Options Outstanding and Exercisable | ||||||||||||||||||
Weighted Average | ||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Remaining Contractual | Exercise | |||||||||||||||
Life | Price | |||||||||||||||||
$0.17—$0.78 | 694,520 | 3.1 years | $ | 0.35 | ||||||||||||||
Total | 694,520 | 3.1 years | $ | 0.35 | ||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Reconciliation of the Weighted Average Number of Common Shares Outstanding | ' | |||||||
A reconciliation of the weighted average number of common shares outstanding for the years ended December 31 is as follows: | ||||||||
2013 | 2012 | |||||||
Common shares outstanding, beginning of the year | 10,937,000 | 10,907,000 | ||||||
Weighted average common shares issued | 314,637 | 27,945 | ||||||
Weighted average number of common shares outstanding | 11,251,637 | 10,934,945 | ||||||
Dilutive effect of common share equivalents | 95,781 | 0 | ||||||
Diluted weighted average number of common shares outstanding | 11,347,418 | 10,934,945 | ||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Information on Segments | ' | |||||||||||||||
The following provides information on our segments as of and for the years ended December 31: | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Household | Skin and Hair | Household | Skin and Hair | |||||||||||||
Products | Care Products | Products | Care Products | |||||||||||||
Net sales to external customers | $ | 5,335,500 | $ | 13,956,700 | $ | 4,895,600 | $ | 11,145,800 | ||||||||
(Loss) income before income taxes | $ | (990,900 | ) | $ | 1,729,000 | $ | (1,985,600 | ) | $ | 613,800 | ||||||
Identifiable assets | $ | 3,514,000 | $ | 3,733,800 | $ | 2,388,200 | $ | 3,905,600 | ||||||||
Reconciliation of Segment Information | ' | |||||||||||||||
The following is a reconciliation of segment information to consolidated information: | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Net sales to external customers | $ | 19,292,200 | $ | 16,041,400 | ||||||||||||
Income (loss) before income taxes | $ | 738,100 | $ | (1,371,800 | ) | |||||||||||
Consolidated income (loss) before income taxes | $ | 738,100 | $ | (1,371,800 | ) | |||||||||||
Identifiable assets | $ | 7,247,800 | $ | 6,508,800 | ||||||||||||
Corporate assets | 1,110,300 | 6,287,000 | ||||||||||||||
Consolidated total assets | $ | 8,358,100 | $ | 12,795,800 | ||||||||||||
Schedule of Revenues for Each Geographical Areas | ' | |||||||||||||||
We attribute our net sales to different geographic areas based on the location of the customer. All of our long-lived assets are located in the United States. For the year ended December 31, revenues for each geographical area are as follows: | ||||||||||||||||
2013 | 2012 | |||||||||||||||
United States | $ | 19,190,300 | $ | 15,975,800 | ||||||||||||
Foreign countries | 101,900 | 65,600 | ||||||||||||||
Total net sales | $ | 19,292,200 | $ | 16,041,400 | ||||||||||||
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Schedule of Valuation and Qualifying Accounts | ' | |||||||||||||||
Valuation and Qualifying Accounts | ||||||||||||||||
Balance at | Additions | Deductions | Balance at | |||||||||||||
beginning | charged to | end of | ||||||||||||||
of year | expense | year | ||||||||||||||
Year ended December 31, 2012 | ||||||||||||||||
Returns and allowances and doubtful accounts reserve | $ | 636,500 | $ | 1,978,800 | $ | 2,146,900 | $ | 468,400 | ||||||||
Year ended December 31, 2013 | ||||||||||||||||
Returns and allowances and doubtful accounts reserve | $ | 468,400 | $ | 2,039,300 | $ | 1,686,000 | $ | 821,700 | ||||||||
Organization_and_Summary_of_Si3
Organization and Summary of Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure Organization And Summary Of Significant Accounting Policies Details1 [Line Items] | ' | ' |
Expected life of options (using the bsimplified methodb) | '4 years 6 months | '4 years 6 months |
Average risk-free interest rate, minimum | 0.80% | ' |
Average risk-free interest rate | ' | 0.80% |
Average risk-free interest rate, maximum | 1.50% | ' |
Average expected volatility of stock, minimum | 137.00% | ' |
Average expected volatility of stock | ' | 143.00% |
Average expected volatility of stock, maximum | 141.00% | ' |
Expected dividend rate | 0.00% | 0.00% |
Organization_and_Summary_of_Si4
Organization and Summary of Significant Accounting Policies (Details Textual) (USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||
Feb. 04, 2013 | Jun. 28, 2012 | Dec. 31, 2013 | Mar. 31, 2011 | Mar. 31, 2011 | Feb. 04, 2013 | Dec. 31, 2013 | Mar. 16, 2011 | Dec. 31, 2013 | |
Segment | Minimum | Maximum | Summit | Summit | Wells Fargo Bank | Wells Fargo Bank | |||
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of business segment | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Original maturity period of highly liquid investments treated as cash equivalents | ' | ' | 'Three months or less | ' | ' | ' | ' | ' | ' |
Expiration date of financing agreement | ' | ' | 1-Jan-15 | ' | ' | ' | ' | ' | ' |
Renewal period of agreement | ' | ' | '12 months | ' | ' | ' | ' | ' | ' |
Additional renewal Period of agreement | ' | ' | '12 months | ' | ' | ' | ' | ' | ' |
Cancelation period of agreement | ' | ' | 'at least 60 days | ' | ' | ' | ' | ' | ' |
Account receivable | ' | ' | $1,500,000 | ' | ' | ' | ' | ' | ' |
Percentage of advance rate of loan after March 1, 2011 | ' | ' | 85.00% | ' | ' | ' | ' | ' | ' |
Aggregate amount of inventory | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' |
Interest rate of agreement amount | ' | 1.50% | 1.00% | ' | ' | ' | ' | ' | ' |
Prime rate of account receivable | ' | 4.00% | 2.50% | ' | ' | ' | ' | ' | ' |
Prime rate | ' | ' | 3.25% | ' | ' | ' | ' | ' | ' |
Percentage of administrative fees on receivable portion | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' |
Percentage of administrative fees on inventory portion | ' | 1.35% | 1.00% | ' | ' | ' | ' | ' | ' |
Amended Percentage of administrative fees on receivable portion, Less Than or equal to $1000000 | ' | ' | 0.85% | ' | ' | ' | ' | ' | ' |
Amended Percentage of administrative fees on receivable portion, More Than $1000000 | ' | ' | 0.75% | ' | ' | ' | ' | ' | ' |
Computation of administrative fees on receivable portion, Specified Amount for different rates | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' |
Sale of account receivable | ' | ' | ' | ' | ' | ' | 824,200 | ' | 4,098,000 |
Proceeds from sale of account receivable | ' | ' | ' | ' | ' | ' | 700,600 | ' | 4,080,600 |
Credit line available for future factoring of accounts receivable and borrowings secured by inventory | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' |
Repayment of outstanding balance on credit line | 909,778 | ' | ' | ' | ' | 909,778 | ' | ' | ' |
Credit line loan balance | $0 | ' | ' | ' | ' | ' | ' | ' | ' |
Spread on LIBOR rate | ' | ' | ' | ' | ' | ' | ' | 1.15% | ' |
Days to maturity of receivable sold | ' | ' | ' | '102 days | '105 days | ' | ' | ' | ' |
Period of LIBOR rate used | ' | ' | ' | ' | ' | ' | ' | ' | '104 days |
Receivables purchased by Wells Fargo on quarter end at LIBOR plus | ' | ' | ' | ' | ' | ' | ' | ' | 0.28% |
Period of notice for termination of agreement | ' | ' | ' | ' | ' | ' | ' | ' | '30 days |
Organization_and_Summary_of_Si5
Organization and Summary of Significant Accounting Policies (Details Textual 1) (USD $) | 1 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||
Feb. 01, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | |
Commercial Real Estate | Minimum | Maximum | Building Structure | Building Structure | Building Improvements | Building Improvements | Production Equipment | Production Equipment | Production Support Equipment | Production Support Equipment | Furniture and Fixtures | Furniture and Fixtures | Office Equipment | Office Equipment | Carpet, Drapes and Company Vehicles | Carpet, Drapes and Company Vehicles | Facilities | Facilities | ||||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Commercial Real Estate | ||||||||
Organization and summary of significant accounting policies (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Useful life of property, plant and equipment | ' | ' | ' | ' | '3 years | '45 years | '35 years | '45 years | '3 years | '20 years | '15 years | '20 years | '3 years | '10 years | '10 years | '20 years | '3 years | '5 years | '5 years | '10 years | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | $286,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment, net | ' | 518,200 | 467,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,786,900 | ' |
Fair value range of property, plant and equipment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,500,000 |
Sale of facilities, amount | 9,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from sale of assets held for sale | ' | 8,922,600 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reserve for reduction in account receivable | ' | 821,700 | 468,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trade Promotion to Customer | ' | $2,036,800 | $1,735,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Organization_and_Summary_of_Si6
Organization and Summary of Significant Accounting Policies (Details Textual 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Price of option with maximum maturity | 120.00% | ' |
Expiry of options | '5 years | ' |
Unrecognized compensation costs related to non-vested stock options | $128,500 | ' |
Period over which compensation costs related to non-vested stock options recognize | '48 months | ' |
Shipping and handling cost | 1,461,700 | 1,487,300 |
General and Administrative Expense | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Compensation cost related to stock option | $55,300 | $53,600 |
Executive Officer | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Stock options granted | 85,000 | 100,000 |
Price of stock option per share | $0.41 | $0.24 |
Board Member | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Stock options granted | 30,000 | ' |
Price of stock option per share | $0.55 | ' |
Regional Sales Manager | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Stock options granted | 15,000 | ' |
Price of stock option per share | $0.55 | ' |
Regional Sales Manager | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Stock options granted | 15,000 | ' |
Price of stock option per share | $0.49 | ' |
Boards | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Stock options granted | 90,000 | ' |
Executive Officer One | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Stock options granted | 50,000 | ' |
Price of stock option per share | $0.78 | ' |
Stock Options | ' | ' |
Organization and Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' |
Decrease in potentially dilutive securities | 692,830 | ' |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Composition of inventory | ' | ' |
Finished goods | $1,636,500 | $959,100 |
Raw materials | 1,621,000 | 1,079,600 |
Inventory reserve for obsolescence | -46,300 | -62,900 |
Inventories, net | $3,211,200 | $1,975,800 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Property, Plant and Equipment | ' | ' |
Property, Plant and Equipment, gross | $5,972,100 | $6,250,900 |
Less accumulated depreciation | -5,453,900 | -5,783,500 |
Property, Plant and Equipment, Total | 518,200 | 467,400 |
Production Equipment | ' | ' |
Schedule of Property, Plant and Equipment | ' | ' |
Property, Plant and Equipment, gross | 4,989,900 | 5,004,900 |
Office furniture and equipment | ' | ' |
Schedule of Property, Plant and Equipment | ' | ' |
Property, Plant and Equipment, gross | 794,000 | 1,211,800 |
Other | ' | ' |
Schedule of Property, Plant and Equipment | ' | ' |
Property, Plant and Equipment, gross | $188,200 | $34,200 |
Property_Plant_and_Equipment_D1
Property, Plant and Equipment (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment (Textual) [Abstract] | ' | ' |
Depreciation expense | $135,000 | $420,300 |
Debt_Details
Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Long-term debt | ' | ' |
Bank loan | $0 | $3,363,300 |
Less current maturities | 0 | 352,600 |
Long-term debt | $0 | $3,010,700 |
Debt_Details_Textual
Debt (Details Textual) (Secured Debt, USD $) | 1 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Nov. 30, 2012 | Dec. 31, 2013 | Jun. 28, 2006 | |
Payment | ||||
Secured Debt | ' | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' | ' |
Date of entering into loan agreement | ' | ' | 28-Jun-06 | ' |
Loan amortization period | ' | ' | '15 years | ' |
Loan amount, secured by land, building and fixtures | ' | ' | ' | $5,156,600 |
Number of monthly payments | ' | ' | 180 | ' |
Monthly loan payment amount | ' | ' | 38,200 | ' |
Loan agreement covenants | ' | ' | 'The loan agreement contained a number of covenants, including the requirement for us to maintain a current ratio of 1.0:1.0, and a ratio of consolidated long-term debt to consolidated net worth of not more than 1.0:1.0 | ' |
Current ratio | 1 | 0.9 | ' | ' |
Consolidated long-term debt to consolidated net worth Ratio | ' | ' | 1 | ' |
Actual current ratio | ' | ' | 0.9 | ' |
Debt agreement amendment, modification fees paid | ' | ' | $17,500 | ' |
Loan agreement restrictive covenants | ' | ' | 'Negative covenants in the loan agreement include, among other things, that without the consent of the Bank, we could not: (1) sell, lease or grant a security interest in our assets; (2) engage in any business activity substantially different than those in which we are presently engaged; (3) sell assets out of the ordinary course of business; or (4) purchase another entity or an interest in another entity | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Current provision (benefit): | ' | ' |
Federal | $32,800 | $0 |
State | 61,400 | 0 |
Total current provision (benefit) | 94,200 | 0 |
Deferred provision (benefit): | ' | ' |
Federal | 42,600 | -407,800 |
State | 3,800 | -36,600 |
Valuation allowance | -46,400 | 444,400 |
Total deferred provision (benefit) | 0 | 0 |
Provision (benefit): | ' | ' |
Federal | 32,800 | 0 |
State | 61,400 | 0 |
Total provision (benefit) | $94,200 | $0 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of income tax expense (benefit) at the statutory tax rate | ' | ' |
Federal income tax at statutory rates | $251,000 | ($466,400) |
State income taxes, net of federal tax effect | 22,500 | -41,900 |
Change in unrecognized benefit | -6,300 | 24,900 |
Trade Promotions | -152,700 | 0 |
Other | 26,100 | 39,000 |
Total | 140,600 | -444,400 |
Change in valuation allowance | -46,400 | 444,400 |
Total provision (benefit) | $94,200 | $0 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred tax assets: | ' | ' |
Net operating loss carryforwards | $3,647,400 | $4,531,300 |
Tax credit and other carryforwards | 302,500 | 255,200 |
Trade receivables | 160,200 | 20,900 |
Inventories | 26,900 | 16,600 |
Accrued vacation | 87,800 | 157,100 |
Other | 46,100 | 44,300 |
Total deferred taxes | 4,270,900 | 5,025,400 |
Deferred tax liability: | ' | ' |
Accumulated depreciation for tax purposes | -105,300 | -813,400 |
Total deferred tax liabilities | -105,300 | -813,400 |
Net deferred tax asset, before allowance | 4,165,600 | 4,212,000 |
Valuation allowance | -4,165,600 | -4,212,000 |
Net deferred tax asset | $0 | $0 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of deferred tax assets | ' | ' |
Balance at January 1, | $412,100 | $345,000 |
Additions based on tax positions related to current year | 320,000 | 67,100 |
Reductions for tax positions of prior years or change in valuation | -337,000 | 0 |
Balance at December 31, | $395,100 | $412,100 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Deferred tax assets, tax credit carryforwards, alternative minimum tax | $32,800 | ' | ' |
Income Taxes (Additional Textual) [Abstract] | ' | ' | ' |
Change in valuation allowance | 46,400 | 444,400 | ' |
Deferred tax positions unrecognized tax benefit | 395,100 | 412,100 | 345,000 |
Accrued interest or penalties related to uncertain tax positions | 0 | 0 | ' |
Federal Tax Authority | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Operating loss carryforwards | 9,230,600 | ' | ' |
Federal new operating loss carryforwards expiration date | 31-Dec-33 | ' | ' |
State and Local Jurisdiction | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Operating loss carryforwards | 16,655,100 | ' | ' |
Federal new operating loss carryforwards expiration date | 31-Dec-33 | ' | ' |
Research and Development Expense | Federal Tax Authority | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Tax credit carryforward, amount | $269,800 | ' | ' |
Expiration date for tax credit carryforwards | 31-Dec-33 | ' | ' |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | 31-May-11 | |
1998 Plan | ' | ' | ' |
Schedule of options granted | ' | ' | ' |
Maximum number of shares under the plans | 1,100,000 | ' | ' |
Outstanding Number of Shares Beginning Balance | 124,000 | 296,900 | ' |
Number of Shares Granted | 0 | 0 | ' |
Number of Shares Exercised | 0 | 0 | ' |
Number of Shares Cancelled/Expired | -124,000 | -172,900 | ' |
Outstanding Number of Shares Ending Balance | 0 | 124,000 | ' |
Available for Issuance Number of Shares Ending Balance | ' | ' | ' |
Outstanding Average Option Price Per Share Beginning Balance | $0.71 | $0.71 | ' |
Average Option Price Per Share Granted | $0 | $0 | ' |
Average Option Price Per Share Exercised | $0 | $0 | ' |
Average Option Price Per Share Cancelled/Expired | $0.56 | $0 | ' |
Outstanding Average Option Price Per Share Ending Balance | ' | $0.71 | ' |
2005 Plan | ' | ' | ' |
Schedule of options granted | ' | ' | ' |
Maximum number of shares under the plans | 3,000,000 | ' | 1,500,000 |
Outstanding Number of Shares Beginning Balance | 1,263,350 | 1,417,650 | ' |
Number of Shares Granted | 285,000 | 125,000 | ' |
Number of Shares Exercised | -509,830 | -30,000 | ' |
Number of Shares Cancelled/Expired | -344,000 | -249,300 | ' |
Outstanding Number of Shares Ending Balance | 694,520 | 1,263,350 | ' |
Available for Issuance Number of Shares Ending Balance | 2,305,480 | ' | ' |
Outstanding Average Option Price Per Share Beginning Balance | $0.22 | $0.25 | ' |
Average Option Price Per Share Granted | $0.52 | $0.23 | ' |
Average Option Price Per Share Exercised | $0.21 | $0.17 | ' |
Average Option Price Per Share Cancelled/Expired | $0.21 | $0.42 | ' |
Outstanding Average Option Price Per Share Ending Balance | $0.35 | $0.22 | ' |
Shareholders_Equity_Details1
Shareholders' Equity (Details1) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Summary of additional information related to the options outstanding | ' |
Upper range of Exercise prices | $0.78 |
Lower range of Exercise prices | $0.17 |
Exercisable Weighted Average Number of Option Outstanding | 694,520 |
Average Option Price Per share Exercised | '3 years 1 month 6 days |
Options Outstanding and Exercisable Weighted Average Exercise Price | $0.35 |
Range One | ' |
Summary of additional information related to the options outstanding | ' |
Exercisable Weighted Average Number of Option Outstanding | 694,520 |
Average Option Price Per share Exercised | '3 years 1 month 6 days |
Options Outstanding and Exercisable Weighted Average Exercise Price | $0.35 |
Shareholders_Equity_Details_Te
Shareholders' Equity (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-11 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2011 | |
1998 Plan | 1998 Plan | 2005 Plan | 2005 Plan | 2005 Plan | 2005 Plan | 2005 Plan | 2005 Plan | |||
Director | Minimum | Maximum | ||||||||
Shareholders' Equity (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Plan expiration date | ' | ' | 27-Nov-08 | ' | ' | ' | ' | ' | ' | ' |
Number of shares issuable under 2005 Plan | ' | ' | 1,100,000 | ' | 3,000,000 | ' | 1,500,000 | ' | ' | ' |
Amended number of shares issuable under 2005 plan | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' |
Stock exercisable period | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '10 years |
Percentage of current market price for grant value calculation | ' | ' | ' | ' | 120.00% | ' | ' | ' | ' | ' |
Number of trading days for calculation of average market price | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' |
Maximum number of options available for grant for executive officers or director | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' |
Options vesting period | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' |
Shareholders' Equity (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Options grant value calculation description | 'Options granted after May 2011, pursuant to the plan amendment in May, are required to be granted at not less than the higher of (1) 120% of current market price on the date of grant or (2) the average of market price over the prior 30 trading days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Shares Granted | ' | ' | 0 | 0 | 285,000 | 125,000 | ' | 90,000 | ' | ' |
Employer discretionary contribution to defined plan | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares Held in Employee Stock Option Plan, Allocated | 860,053 | 1,169,540 | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Reconciliation of the weighted average number of common shares outstanding | ' | ' | ' |
Common shares outstanding, beginning of the year | 10,937,000 | 10,907,000 | 11,446,800 |
Weighted average common shares issued | 314,637 | 27,945 | ' |
Weighted average number of common shares outstanding | 11,251,637 | 10,934,945 | ' |
Dilutive effect of common share equivalents | 95,781 | 0 | ' |
Diluted weighted average number of common shares outstanding | 11,347,418 | 10,934,945 | ' |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings Per Share Additional Textual [Abstract] | ' | ' |
Preferred stock issuable | 20,000,000 | ' |
Preferred stock issued | 0 | ' |
Preferred stock outstanding | 0 | ' |
Stock Options | ' | ' |
Earnings Per Share Textual [Abstract] | ' | ' |
Decrease in potentially dilutive securities | 692,830 | ' |
Dilutive securities comprised of outstanding stock options | 694,520 | 1,387,350 |
Decrease in percent of potentially dilutive securities | 49.90% | ' |
Potentially dilutive securities exceeding exercise price | 106,778 | ' |
Segment_Information_Details
Segment Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | ' | ' |
(Loss) income before income taxes | $784,100 | ($1,317,600) |
Identifiable assets | 8,358,100 | 12,795,800 |
Operating Segments | Household Products | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
(Loss) income before income taxes | -990,900 | -1,985,600 |
Identifiable assets | 3,514,000 | 2,388,200 |
Operating Segments | Household Products | External Customers | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Net sales to external customers | 5,335,500 | 4,895,600 |
Operating Segments | Skin And Hair Care Products | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
(Loss) income before income taxes | 1,729,000 | 613,800 |
Identifiable assets | 3,733,800 | 3,905,600 |
Operating Segments | Skin And Hair Care Products | External Customers | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Net sales to external customers | $13,956,700 | $11,145,800 |
Segment_Information_Details_1
Segment Information (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of segment information | ' | ' |
Net sales | $19,292,200 | $16,041,400 |
Income (loss) before income taxes | 738,100 | -1,371,800 |
Total assets | 8,358,100 | 12,795,800 |
Operating Segments | ' | ' |
Reconciliation of segment information | ' | ' |
Net sales | 19,292,200 | 16,041,400 |
Income (loss) before income taxes | 738,100 | -1,371,800 |
Consolidated income (loss) before income taxes | 738,100 | -1,371,800 |
Operating Segments | Identifiable | ' | ' |
Reconciliation of segment information | ' | ' |
Total assets | 7,247,800 | 6,508,800 |
Corporate, Non-Segment | ' | ' |
Reconciliation of segment information | ' | ' |
Total assets | $1,110,300 | $6,287,000 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of revenues for each geographical areas | ' | ' |
Net sales | $19,292,200 | $16,041,400 |
United States | ' | ' |
Schedule of revenues for each geographical areas | ' | ' |
Net sales | 19,190,300 | 15,975,800 |
Foreign Countries | ' | ' |
Schedule of revenues for each geographical areas | ' | ' |
Net sales | $101,900 | $65,600 |
Segment_Information_Details_Te
Segment Information (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Information (Textual) [Abstract] | ' | ' |
Number of business segment | 2 | ' |
Wal-Mart | ' | ' |
Segment Information (Textual) [Abstract] | ' | ' |
Entity wide revenue, net sales from major customer | $4,130,300 | $3,577,800 |
Wal-Mart | Accounts Receivable | ' | ' |
Segment Information (Textual) [Abstract] | ' | ' |
Entity wide outstanding trade receivable percentage from major customer | 13.70% | 8.70% |
Ulta | ' | ' |
Segment Information (Textual) [Abstract] | ' | ' |
Entity wide revenue, net sales from major customer | 3,253,400 | 1,742,000 |
Ulta | Accounts Receivable | ' | ' |
Segment Information (Textual) [Abstract] | ' | ' |
Entity wide outstanding trade receivable percentage from major customer | 20.90% | 19.40% |
Walgreens | ' | ' |
Segment Information (Textual) [Abstract] | ' | ' |
Entity wide revenue, net sales from major customer | $1,319,800 | $1,110,500 |
Walgreens | Accounts Receivable | ' | ' |
Segment Information (Textual) [Abstract] | ' | ' |
Entity wide outstanding trade receivable percentage from major customer | 15.50% | 15.00% |
Retirement_Plans_Details
Retirement Plans (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Retirement Plans (Textual) [Abstract] | ' | ' |
Minimum Completed years of service for eligible in plan | '4 months | ' |
Minimum age of employee for becoming eligible in plan | '18 years | ' |
Maximum limit of Employee Compensation Defer percentage | 75.00% | ' |
Percentage of discretionary contributions | 6.00% | ' |
Maximum Annual earnings limit for employer contribution | $35,000 | ' |
Vesting period of service to employee for profit sharing contribution | '5 years | ' |
Amount of matching contribution | 3,500 | 2,500 |
Discretionary profit sharing contribution | $0 | $0 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Feb. 01, 2013 | Dec. 31, 2013 | Feb. 01, 2013 | Oct. 31, 2009 | Sep. 30, 2012 | Dec. 31, 2012 | |
Minimum | Maximum | Office Lease | Office Lease | Warehouse Lease | Warehouse Lease | One Floor of Office Building | One Half Floor of Office Building | Warehouse Buildings | |||
sqft | sqft | ||||||||||
Commitments and Contingencies (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual rental expense under operating lease agreements | $78,500 | $77,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum annual rental payments under noncancellable operating leases for next year | 61,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum annual rental payments under noncancellable operating leases for 3rd year | 23,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum annual rental payments under noncancellable operating leases for 4th year | 7,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum annual rental payments under noncancellable operating leases afterwards | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Area of leased back from the purchaser | ' | ' | ' | ' | ' | 16,078 | ' | 113,620 | ' | ' | ' |
Annual rental expenses under sale leaseback | ' | ' | ' | ' | 191,600 | ' | 338,500 | ' | ' | ' | ' |
Minimum annual rental payments under sale leaseback for next year | ' | ' | ' | ' | 214,800 | ' | 379,400 | ' | ' | ' | ' |
Minimum annual rental payments under sale leaseback for 3rd year | ' | ' | ' | ' | 221,200 | ' | 390,800 | ' | ' | ' | ' |
Minimum annual rental payments under sale leaseback for 4th year | ' | ' | ' | ' | $18,500 | ' | $32,600 | ' | ' | ' | ' |
Commitments and Contingencies (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease Agreement Period | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' |
Percentage of rental escalations of rent payment | ' | ' | 3.70% | 4.20% | ' | ' | ' | ' | ' | ' | ' |
Lease expiration date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31-Dec-15 | 31-Mar-16 |
Valuation_and_Qualifying_Accou2
Valuation and Qualifying Accounts (Details) (Returns And Allowances And Doubtful Accounts Reserve, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Returns And Allowances And Doubtful Accounts Reserve | ' | ' |
Schedule of Valuation and Qualifying Accounts | ' | ' |
Balance at beginning of year | $468,400 | $636,500 |
Additions charged to expense | 2,039,300 | 1,978,800 |
Deductions | 1,686,000 | 2,146,900 |
Balance at end of year | $821,700 | $468,400 |
Sale_of_Property_Details_Textu
Sale of Property (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | |
Feb. 04, 2013 | Feb. 01, 2013 | Dec. 31, 2013 | |
sqft | |||
Property | |||
acre | |||
Sale Leaseback Transaction [Line Items] | ' | ' | ' |
Area of land for which sale was consummated | ' | 10.8 | ' |
Number of buildings improved in land | ' | 4 | ' |
Area of office, warehouse, and manufacturing space | ' | 241,684 | ' |
Area of adjacent vacant land | ' | 5.5 | ' |
Sale of facilities, amount | ' | $9,500,000 | ' |
Selling Expense | ' | ' | 579,800 |
Term of leased back from the purchaser, additional rent per square foot criteria for uncontrolled operating expenses maximum percentage | ' | 5.00% | ' |
Principal and interest balance on long term debt | ' | ' | 3,373,961 |
Real estate property taxes | ' | ' | 202,000 |
Repayment of outstanding balance on credit line | 909,778 | ' | ' |
Financial obligation paid | ' | ' | 960,000 |
Capital expenditures | ' | ' | 150,000 |
Office Lease | ' | ' | ' |
Sale Leaseback Transaction [Line Items] | ' | ' | ' |
Area of leased back from the purchaser | ' | 16,078 | ' |
Term of leased back from the purchaser | ' | '3 years | ' |
Number of extensions allowed for leased back from the purchaser | ' | 2 | ' |
Term of leased back from the purchaser, extension period | ' | '3 years | ' |
Term of leased back from the purchaser, annual rent per square foot | ' | 13 | ' |
Term of leased back from the purchaser, incremental rent percentage annual | ' | 3.00% | ' |
Warehouse Lease | ' | ' | ' |
Sale Leaseback Transaction [Line Items] | ' | ' | ' |
Area of leased back from the purchaser | ' | 113,620 | ' |
Term of leased back from the purchaser | ' | '3 years | ' |
Number of extensions allowed for leased back from the purchaser | ' | 2 | ' |
Term of leased back from the purchaser, extension period | ' | '3 years | ' |
Term of leased back from the purchaser, annual rent per square foot | ' | 3.25 | ' |
Term of leased back from the purchaser, incremental rent percentage annual | ' | 3.00% | ' |
Term of leased back from the purchaser, additional rent Per square foot related to operating expenses | ' | 1.25 | ' |
Real Estate | ' | ' | ' |
Sale Leaseback Transaction [Line Items] | ' | ' | ' |
Real estate brokerage commissions | ' | ' | 570,000 |
Summit | ' | ' | ' |
Sale Leaseback Transaction [Line Items] | ' | ' | ' |
Repayment of outstanding balance on credit line | $909,778 | ' | ' |