Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 30, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | SCOTTS LIQUID GOLD INC | ||
Entity Central Index Key | 88,000 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SLGD | ||
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 | $ 4,358,654 | ||
Entity Common Stock, Shares Outstanding | 11,857,026 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 35,228,400 | $ 29,188,400 |
Operating costs and expenses: | ||
Cost of sales | 20,036,700 | 16,808,600 |
Advertising | 1,567,200 | 1,532,600 |
Selling | 5,838,000 | 5,311,200 |
General and administrative | 4,571,700 | 3,258,200 |
Total operating costs and expenses | 32,013,600 | 26,910,600 |
Income from operations | 3,214,800 | 2,277,800 |
Other income | 12,600 | 26,900 |
Interest expense | (124,800) | (29,300) |
Income before income taxes | 3,102,600 | 2,275,400 |
Income tax (expense) benefit | (1,248,100) | 2,504,500 |
Net income | $ 1,854,500 | $ 4,779,900 |
Net income per common share: | ||
Basic | $ 0.16 | $ 0.41 |
Diluted | $ 0.15 | $ 0.40 |
Weighted average shares outstanding: | ||
Basic | 11,735,202 | 11,634,515 |
Diluted | 11,971,249 | 11,916,038 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 2,097,300 | $ 7,165,100 |
Accounts receivable, net | 3,456,400 | 1,014,700 |
Inventories, net | 5,641,300 | 4,698,600 |
Income taxes receivable | 7,000 | 0 |
Prepaid expenses | 319,600 | 227,200 |
Total current assets | 11,521,600 | 13,105,600 |
Property, plant and equipment, net | 578,400 | 430,000 |
Deferred tax asset | 1,392,600 | 2,556,200 |
Goodwill | 1,520,600 | 0 |
Intangible assets, net | 6,769,100 | 0 |
Other assets | 51,000 | 51,000 |
Total assets | 21,833,300 | 16,142,800 |
Current liabilities: | ||
Accounts payable | 1,939,400 | 1,238,000 |
Accrued expenses | 964,800 | 803,700 |
Income taxes payable | 0 | 5,300 |
Current maturities of long-term debt | 800,000 | 0 |
Total current liabilities | 3,704,200 | 2,047,000 |
Line-of-credit | 750,000 | 0 |
Long-term debt, net of current maturities and debt issuance costs | 1,137,300 | 0 |
Total liabilities | 5,591,500 | 2,047,000 |
Shareholders’ equity: | ||
Common stock; $0.10 par value, authorized 50,000,000 shares; issued and outstanding 11,749,589 shares (2016) and 11,710,745 shares (2015) | 1,175,000 | 1,171,100 |
Capital in excess of par | 6,177,800 | 5,901,100 |
Retained earnings | 8,889,000 | 7,023,600 |
Total shareholders’ equity | 16,241,800 | 14,095,800 |
Total liabilities and shareholders’ equity | $ 21,833,300 | $ 16,142,800 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Common stock par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 11,749,589 | 11,710,745 |
Common stock, shares outstanding | 11,749,589 | 11,710,745 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Total | Common Stock | Capital in Excess of Par | Retained Earnings |
Beginning Balance, Value at Dec. 31, 2014 | $ 9,112,500 | $ 1,155,000 | $ 5,713,800 | $ 2,243,700 |
Beginning Balance, Shares at Dec. 31, 2014 | 11,549,789 | 11,549,789 | ||
Stock-based compensation, Value | $ 162,200 | $ 0 | 162,200 | 0 |
Stock options exercised, Value | 41,200 | $ 16,100 | 25,100 | 0 |
Stock options exercised, Shares | 160,956 | |||
Net income | 4,779,900 | $ 0 | 0 | 4,779,900 |
Ending Balance, Value at Dec. 31, 2015 | $ 14,095,800 | $ 1,171,100 | 5,901,100 | 7,023,600 |
Ending Balance, Shares at Dec. 31, 2015 | 11,710,745 | 11,710,745 | ||
Excess tax benefit, Value | $ 10,900 | $ 0 | 0 | 10,900 |
Stock-based compensation, Value | 248,600 | 0 | 248,600 | 0 |
Stock options exercised, Value | 32,000 | $ 3,900 | 28,100 | 0 |
Stock options exercised, Shares | 38,844 | |||
Net income | 1,854,500 | $ 0 | 0 | 1,854,500 |
Ending Balance, Value at Dec. 31, 2016 | $ 16,241,800 | $ 1,175,000 | $ 6,177,800 | $ 8,889,000 |
Ending Balance, Shares at Dec. 31, 2016 | 11,749,589 | 11,749,589 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 1,854,500 | $ 4,779,900 |
Adjustment to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 458,000 | 160,800 |
Stock-based compensation | 248,600 | 162,200 |
Excess tax benefit | 10,900 | 0 |
Deferred income taxes | 1,163,600 | (2,556,200) |
Change in operating assets and liabilities: | ||
Accounts receivables | (2,441,700) | 26,400 |
Inventories | (542,700) | (2,008,900) |
Prepaid expenses and other assets | (92,400) | 118,800 |
Income taxes (receivable) payable | (12,300) | 9,000 |
Accounts payable and accrued expenses | 862,500 | 725,300 |
Total adjustments to net income | (345,500) | (3,362,600) |
Net Cash Provided by Operating Activities | 1,509,000 | 1,417,300 |
Cash flows from investing activities: | ||
Cash paid for Acquisition | (9,000,000) | 0 |
Purchase of property, plant and equipment | (283,600) | (190,000) |
Net Cash Used by Investing Activities | (9,283,600) | (190,000) |
Cash flows from financing activities: | ||
Borrowing under line-of-credit | 3,694,100 | 0 |
Repayments under line-of-credit | (2,944,100) | 0 |
Proceeds from issuance of long-term debt | 2,400,000 | 0 |
Repayments of long-term debt | (400,000) | 0 |
Debt issuance costs | (75,200) | 0 |
Proceeds from exercise of stock options | 32,000 | 41,200 |
Net Cash Provided by Financing Activities | 2,706,800 | 41,200 |
Net (Decrease) Increase in Cash and Cash Equivalents | (5,067,800) | 1,268,500 |
Cash and Cash Equivalents, beginning of year | 7,165,100 | 5,896,600 |
Cash and Cash Equivalents, end of year | 2,097,300 | 7,165,100 |
Supplemental disclosures: | ||
Cash paid during the period for interest | $ 112,300 | $ 29,300 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows - (Parenthetical) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Supplemental disclosure of non-cash activity: | |
Inventory | $ 400,000 |
Intangible assets | 7,079,400 |
Goodwill | 1,520,600 |
Total assets acquired | $ 9,000,000 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Note 1. Organization and Summary of Significant Accounting Policies (a) Company Background 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 a 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. (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, stock-based compensation and purchase price allocation. 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 Financial Resources, L.P. (“Summit”) for the purpose of providing working capital. The financing agreement with Summit was amended on March 12, 2009, March 16, 2011 (effective March 1, 2011) and on June 29, 2012 (effective July 1, 2012) and terminated on June 30, 2016. The financing agreement with Summit provided for a factoring line up to $1.5 million and was secured primarily by accounts receivables, inventory, any lease in which we are a lessor and all investment property and guarantees by our active subsidiaries. There was also an administrative fee of 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 0.75% per month if the average quarterly loan in the prior quarter was greater than $1,000,000 and of 1.0% per month on the average monthly outstanding loan on the inventory portion of any advance. In 2016 and 2015, we did not sell any of our accounts receivable to Summit. On March 16, 2011, with the consent of Summit, we entered into a financing agreement with Wells Fargo Bank, National Association (“Wells Fargo”) for the purpose of further lowering the cost of borrowing associated with the financing of our accounts receivable and on January 29, 2016 we terminated our agreement with Wells Fargo due to Walmart changing its accounts payable policy. Pursuant to this agreement with Wells Fargo, we were able to sell accounts receivable from Wal-Mart at a discount to Wells Fargo; provided, however, that Wells Fargo could reject offers to purchase such receivables in its discretion. These receivables could 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 receivables sold, typically ranging from 102 to 105 days. In 2016 and 2015, we sold approximately $306,800 and $4,672,888, respectively, of our relevant accounts receivables to Wells Fargo for approximately $305,200 and $4,652,359, respectively. The difference between the invoiced amount of the receivable and the cash that we received from Wells Fargo was a cost to us. This cost was in lieu of any cash discount our customer would have been allowed and, thus, was treated in a manner consistent with standard trade discounts granted to our customers. The reporting of the sale of accounts receivable to Wells Fargo was treated as a sale rather than as a secured borrowing. As a result, affected accounts receivables were relieved from the Company’s financial statements upon receipt of the cash proceeds. (f) Inventories Valuation and Reserves Inventories consist of raw materials and finished goods and are stated at the lower of cost (first-in, first-out method) or market. We estimate an inventory reserve for slow moving and obsolete products and raw materials based upon, among other things, an assessment of historical and anticipated sales of our products. In the event that actual results differ from our estimates, the results of future periods may be impacted. We record a reserve for slow moving and obsolete products and raw materials. We estimate this reserve based upon historical and anticipated sales. (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 20 years. 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. Maintenance and repairs are expensed as incurred. Improvements that extend the useful lives of the asset or provide improved efficiency are capitalized. (h) Intangible Assets Intangible assets consist of customer relationships, trade names, formulas and batching processes and a non-compete agreement. The fair value of the intangible assets is amortized over their estimated useful lives and range from a period of five to 15 years and are reviewed for impairment when changes in market circumstances occur and written down to fair value if impaired. (i) Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired in the Acquisition discussed in Notes 4 and 5. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests, and in certain circumstances these assets are written down to fair value if impaired. (j) Financial Instruments Financial instruments which potentially subject us to concentrations of credit risk include cash and cash equivalents and accounts receivable. We maintain our cash balances in the form of bank demand deposits with financial institutions that we believe are creditworthy. As of December 31, 2016, 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, accrued expenses, long-term debt and line-of-credit approximate fair value due to the short-term nature of these financial instruments. At December 31, 2016 we had long-term debt of $2,000,000 and a $750,000 outstanding balance on our line-of-credit. At December 31, 2015 we had no long-term debt nor an outstanding balance on a line-of-credit. (k) Income Taxes Income taxes reflect the tax effects of transactions reported in the financial statements and consist of taxes currently payable plus deferred income taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred income tax assets and liabilities are recognized for the future income tax consequences attributable to differences between the financial statement carrying amounts of existing 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 or expense. We classify penalty and interest expense related to income tax liabilities as an income tax expense. There are no significant interest and penalties recognized in the statement of operations or accrued on the balance sheet. (l) Revenue Recognition Our revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. Certain criteria are required to 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, slotting fees 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 the 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. In the event that actual results differ from our estimates, the results of future periods may be impacted. 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, 2016 and December 31, 2015 approximately $1,184,700 and $1,179,700, 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 $2,574,800 and $2,517,500 for the years ended December 31, 2016 and 2015, respectively. (m) Advertising Costs Advertising costs are expensed as incurred. (n) Stock-based Compensation During 2016, we granted options to acquire: (1) 3,000 shares of our common stock to one of our production personnel at a price of $1.20 per share, which vest ratably over 48 months, or upon a change in control under certain circumstances, and which expire after 10 years; (2) 42,576 shares of our common stock to two of our management and administrative personnel at a price of $1.26 per share, which vest ratably over 48 months, or upon a change in control under certain circumstances, and which expire after 10 years; and (3) 90,072 shares of our common stock to our three non-employee board members at a price of $1.26 per share, which vest ratably over 36 months, or upon a change in control under certain circumstances, and which expire after five years. All of the foregoing options were granted at the market value as of the date of grant. The fair value of options is determined at the grant date and the related expense is recognized over the period in which the options vest. The Company recognizes the forfeitures of options as they occur. During 2015, we granted options to acquire: (1) 326,500 shares of our common stock to 40 of our management and administrative personnel at a price of $1.25 per share, which vest ratably over 48 months, or upon a change in control under certain circumstances, and which expire after 10 years; (2) 200,000 shares of our common stock to one of our executive officers at a price of $1.25 per share, which vest ratably over 60 months, or upon a change in control under certain circumstances, and which expire after 10 years; and (3) 90,000 shares of our common stock to our three non-employee board members at a price of $1.25 per share, half of which vested on the date of grant and the other half of which will vest on the first anniversary of the date of grant, or upon a change in control under certain circumstances, and which expire after five years. All of the foregoing options were granted at the market value as of the date of grant. We also granted options to acquire 100,000 shares of our common stock to one of our executive officers at a price of $1.375 per share, which vest ratably over 48 months, or upon a change in control under certain circumstances, and which expire after five years. Such options were granted at 110% of the market value as of the date of grant. The weighted average fair market value of the options granted in the years ended December 31, 2016 and 2015 were estimated on the date of grant, using a Black-Scholes option pricing model with the following assumptions: 2016 2015 Expected life of options (using the “simplified method”) 4.3 years 5.3 years Average risk-free interest rate 1.1% 1.4% Average expected volatility of stock 87% 133% Expected dividend rate None None Fair value of options granted $ 104,935 $ 755,105 Compensation cost related to stock options recognized in operating results (included in general and administrative expenses) was $248,600 and $162,200 for the years ended December 31, 2016 and 2015, respectively. Approximately $690,300 of total unrecognized compensation costs related to non-vested stock options is expected to be recognized over the next 12-60 months, depending on the vesting provisions of the options. There was no tax benefit from recording the non-cash expense as it relates to the options granted to our employees, as these were qualified stock options which are not normally tax deductible. (o) 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 $1,799,900 and $1,462,600, for the years ended December 31, 2016 and 2015, 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. (p) Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “ Leases (Topic 842) In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” In June 2016, FASB issued ASU No. 2016-13, “ Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” . In July 2015, the FASB issued ASU 2015-11, “ Simplifying the Measurement of Inventory In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows: Classification of Certain Cash Receipts and Payments (q) Recently Adopted Accounting Standards In April 2015, the FASB issued ASU No. 2015-03, “ Interest — Imputation of Interest (Subtopic 835-30) — Simplifying the Presentation of Debt Issuance Costs” Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting” In September 2015, FASB issued ASU No. 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments” The Company adopted ASU 2015-16 as of June 30, 2016, and the adoption of this standard did not have a material effect on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “ Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting adoption of this guidance using the modified retrospective method in a $ 10,900 increase to beginning retained earnings with a corresponding increase in deferred tax assets representing the excess tax benefits generated in years prior to adoption of ASU 2016-09. Prior to the adoption of , . |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 2: Inventories Inventories, consisting of materials, labor and overhead at December 31 were comprised of the following: 2016 2015 Finished goods $ 2,668,700 $ 2,101,300 Raw materials 3,035,000 2,717,300 Inventory reserve for obsolescence (62,400 ) (120,000 ) $ 5,641,300 $ 4,698,600 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note 3: Property, Plant and Equipment Property, plant and equipment at December 31 were comprised of the following: 2016 2015 Production equipment $ 4,995,600 $ 4,726,200 Office furniture and equipment 674,600 674,600 Other 202,400 188,200 5,872,600 5,589,000 Less accumulated depreciation (5,294,200 ) (5,159,000 ) $ 578,400 $ 430,000 Depreciation expense for the years ended December 31, 2016 and 2015 was $135,200 and $160,800, respectively. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition | Note 4. Acquisition On June 30, 2016, Neoteric Cosmetics, Inc. (“Neoteric”), a wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Ultimark Products, Inc. (“Ultimark”) and consummated the transaction contemplated thereby (the “Acquisition”), pursuant to which Neoteric purchased from Ultimark all intellectual property assets and certain related assets owned by Ultimark as well as inventory of finished goods owned by Ultimark and used in connection with the manufacture, sale and distribution of the Prell®, Denorex® and Zincon® brands of hair and scalp care products (collectively, the “Brands”). The total consideration Neoteric paid for the Brands was approximately $9.1 million, plus or minus any inventory adjustment based on the value of the inventory of finished goods as of the closing compared to the target inventory of $493,034, plus the assumption by Neoteric of certain specific liabilities of Ultimark related to the performance of certain purchase orders and contracts following June 30, 2016. Subsequently, the inventory adjustment of $93,000 reduced the total consideration paid by Neoteric to approximately $9.0 million. The Company incurred $721,600 of transaction costs related to the Acquisition for the year ended December 31, 2016. These expenses were recorded in general and administrative expense in the consolidated statement of operations. (a) Purchase Price Allocation The following summarizes the aggregate fair values of the assets acquired during 2016 as of the date of the Acquisition: Inventories $ 400,000 Intangible assets 7,079,400 Goodwill 1,520,600 Total assets acquired $ 9,000,000 Intangible assets in the table above consist of customer relationships of $4,022,100, trade names of $2,362,400, formulas and batching processes of $668,600, and a non-compete agreement of $26,300, and will be amortized over their estimated useful lives of approximately 10 years, 15 years, 12 years and five years, respectively. Goodwill recorded in connection with the Acquisition represents, among other things, future economic benefits expected to be recognized from the Company’s expansion of the products it offers to the skin and hair care segment, as well as expected future synergies and operating efficiencies from combining the acquired products to the brands we manufacture and distribute. All of the recorded goodwill is tax-deductible. (b) Pro Forma Results of Operations (Unaudited ) The following table summarizes selected unaudited pro forma condensed consolidated statements of operations data for the years ended December 31, 2016 and 2015 as if the Acquisition had been completed on January 1, 2015. Pro Forma for the Year Ended December 31, 2016 2015 Net sales $ 38,632,500 $ 36,446,200 Net income $ 1,867,800 $ 4,838,400 This selected unaudited pro forma condensed consolidated financial data is included only for the purpose of illustration and does not necessarily indicate what the operating results would have been if the Acquisition had been completed on that date. Moreover, this information does not indicate what our future operating results will be. The information for 2015 and 2016 prior to the Acquisition from Ultimark is included based on prior accounting records maintained by Ultimark. In some cases, Ultimark’s accounting policies may differ materially from accounting policies adopted by the Company following the Acquisition. For 2016, this information includes actual operating results recorded in the financial statements for the period subsequent to the date of the Acquisition on June 30, 2016. The Company’s consolidated statements of operations for the year ended December 31, 2016 includes net sales and net income of $3,412,700 and $482,800, respectively, attributable to the Acquisition. The pro forma amounts included in the table above reflect the application of accounting policies and adjustment of the results of the Acquisition to reflect: (1) the additional amortization that would have been charged to the acquired intangible assets; (2) additional interest expense relating to the borrowings on the term loan and line-of credit, including amortization of debt issuance costs; and (3) the tax impacts. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets Intangible assets consisted of the following: As of December 31, 2016 Gross Carrying Accumulated Net Carrying Intangible assets Customer relationships $ 4,022,100 $ 201,100 $ 3,821,000 Trade names 2,362,400 78,700 2,283,700 Formulas and batching processes 668,600 27,900 640,700 Non-compete agreement 26,300 2,600 23,700 7,079,400 310,300 6,769,100 Goodwill 1,520,600 Total intangible assets $ 8,289,700 The amortization expense for the year ended December 31, 2016 was $310,300. There was no amortization expense for the year ended December 31, 2015. Estimated amortization expense for 2017 and subsequent years is as follows: 2017 $ 620,700 2018 620,700 2019 620,700 2020 620,700 2021 617,600 Thereafter 3,668,700 Total $ 6,769,100 |
Long-Term Debt and Line-of-Cred
Long-Term Debt and Line-of-Credit | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Line-of-Credit | Note 6: Long-Term Debt and Line-of- Credit On June 30, 2016, Neoteric and the Company, as borrowers, entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“Chase”), as lender, pursuant to which Chase provided a term loan and a revolving credit facility that was used to finance a portion of the Acquisition and for the Company’s general corporate purposes and working capital. The term loan amount is $2.4 million with quarterly payments fully amortized over three years and interest of (i) the LIBO Rate + 3.75% or (ii) the Prime Rate + 1.00%, with a floor of the one month LIBO Rate + 2.5%. At December 31, 2016, our rate was 4.51%. The revolving credit facility amount is $4 million with interest of (i) the LIBO Rate + 3.00% or (ii) the Prime Rate + 0.25%, with a floor of the one month LIBO Rate + 2.5%. At December 31, 2016, our rate was 3.76%. The revolving credit facility will terminate on June 30, 2019 or any earlier date on which the revolving commitment is otherwise terminated pursuant to the Credit Agreement. Under the Credit Agreement we are obligated to pay quarterly an unused commitment fee equal to 0.5% per annum on the daily amount of the undrawn portion of the revolving line-of-credit. The loans are secured by all of the assets of the Company and all of its subsidiaries. The Credit Agreement requires, among other things, that beginning on December 31, 2016, the Company maintain a Debt Service Coverage Ratio of no less than 1.25 to 1.0 and a Funded Indebtedness to Adjusted EBITDA Ratio of no greater than 3.0 to 1.0. The Credit Agreement also contains covenants typical of transactions of this type, including among others, limitations on the Company’s ability to: create, incur or assume any indebtedness or lien on our assets; pay dividends or make other distributions; redeem, retire or acquire the Company’s outstanding common stock, options, warrants or other rights; make fundamental changes to its corporate structure or business; make investments or asset sales; or engage in certain other activities as set forth in the Credit Agreement. The Company was in compliance with the covenants in the Credit Agreement as of December 31, 2016. Capitalized terms used but not defined shall have the meanings provided in the Credit Agreement. Maturities of long-term debt and line-of-credit are as follows as of December 31, 2016: 2017 $ 800,000 2018 800,000 2019 1,150,000 2,750,000 Less unamortized debt issuance costs (62,700 ) Total $ 2,687,300 We recognized $12,500 as a component of interest expense for the year ended December 31, 2016. As of December 31, 2016, the Company had unamortized debt issuance costs of $62,700. Debt issuance costs are amortized using the effective interest method. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7: Income Taxes The provision for income tax for the years ended December 31 is as follows: 2016 2015 Current provision (benefit): Federal $ 71,100 $ 60,300 State 2,400 (8,600 ) Total current provision (benefit) 73,500 51,700 Deferred provision (benefit): Federal 1,071,300 741,700 State 103,300 81,200 Valuation allowance 0 (3,379,100 ) Total deferred provision (benefit) 1,174,600 (2,556,200 ) Provision (benefit): Federal 1,142,400 (2,115,700 ) State 105,700 (388,800 ) Total provision (benefit) $ 1,248,100 $ (2,504,500 ) Income tax expense (benefit) at the statutory tax rate is reconciled to the overall income tax expense (benefit) as follows: 2016 2015 Federal income tax at statutory rates $ 1,054,900 $ 773,700 State income taxes, net of federal tax effect 94,800 69,300 Permanent differences 12,900 13,400 Nondeductible stock-based compensation 81,800 41,400 Other 3,700 (23,200 ) Total 1,248,100 874,600 Change in valuation allowance 0 (3,379,100 ) Provision (benefit) for income taxes $ 1,248,100 $ (2,504,500 ) 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, 2016 and 2015 are comprised of the following: 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 611,800 $ 1,833,100 Tax credit and other carryforwards 491,700 413,800 Trade receivables 80,000 205,200 Inventories 60,800 70,600 Accrued vacation 32,600 38,800 Intangibles and Goodwill 113,800 0 Other 23,500 20,800 Total deferred taxes 1,414,200 2,582,300 Deferred tax liability: Accumulated depreciation for tax purposes (21,600 ) (26,100 ) Total deferred tax liabilities (21,600 ) (26,100 ) Net deferred tax asset, before allowance 1,392,600 2,556,200 Valuation allowance 0 0 Net deferred tax asset $ 1,392,600 $ 2,556,200 The Company has early adopted ASU 2016-9 relating to stock compensation and appropriately recorded the cumulative effect adjustment to retained earnings. At December 31, 2016, the Company had net operating loss carryforwards of approximately $1,050,000 for federal income tax purposes. The Company also had federal tax credit carryforwards related to research and development efforts of approximately $298,000. The net operating loss carryforwards and the research and development credits will expire over a period ending in 2032 and 2036 respectively. At December 31, 2016, there was approximately $193,000 of alternative minimum tax credits which have no expiration period. State tax loss carryforwards at December 31, 2016 are approximately $8,310,000 expiring over a period ending in 2032. As of December 31, 2014 the Company had a full valuation allowance against deferred income tax assets. During the year ended December 31, 2015, the Company determined in its judgement, based upon all available evidence (both positive and negative), that it is more-likely-than-not that the net deferred tax assets will be realized. Hence, all deferred tax benefits were recognized and the full valuation allowance was removed as part of the effective tax rate. Accounting for uncertainty in income taxes is based on 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. 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. Each year we perform a comprehensive review of our material tax positions. Our policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. As we had no uncertain tax benefits during 2016 and 2015, we had no accrued interest or penalties related to uncertain tax positions in either year. 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 2013 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 2012 and years thereafter. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Shareholders' Equity | Note 8: Shareholders’ Equity In 2005, we adopted a stock option plan for our employees, officers and directors (the “2005 Plan”). 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 were granted at not less than current market price of the stock on the date of grant and were exercisable from five to ten years from the grant date. Options granted after May 2011, pursuant to the plan amendment in May 2011, were 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. In 2015, we adopted a stock option plan for our employees, officers and directors (the “2015 Plan”) to replace the 2005 Plan, which expired on March 31, 2015. At the Annual Shareholders’ Meeting in June 2015, shareholders approved the adoption of the 2015 Plan. Stock option activity under the 2005 and 2015 Plans are as follows: Number of Weighted Average Weighted Average Remaining Contractual Aggregate Intrinsic Value 2005 Plan Maximum number of shares under the plan 3,000,000 Outstanding, December 31, 2014 918,969 $ 0.53 4.4 years $ 374,600 Granted in 2015 0 0.00 Exercised in 2015 (160,956 ) 0.26 Cancelled/Expired in 2015 (81,500 ) 0.24 Outstanding, December 31, 2015 676,513 $ 0.63 4.7 years $ 525,300 Exercisable, December 31, 2015 351,832 $ 0.51 3.3 years $ 317,000 Available for issuance, December 31, 2015 0 Granted in 2016 0 0.00 Exercised in 2016 (27,051 ) 0.64 Cancelled/Expired in 2016 (21,149 ) 0.78 Outstanding, December 31, 2016 628,313 $ 0.63 3.8 years $ 510,000 Exercisable, December 31, 2016 445,818 $ 0.55 2.8 years $ 398,200 Available for issuance, December 31, 2016 0 2015 Plan Maximum number of shares under the plan 2,000,000 Outstanding, December 31, 2014 0 $ 0.00 Granted in 2015 716,500 1.27 Exercised in 2015 0 0.00 Cancelled/Expired in 2015 0 0.00 Outstanding, December 31, 2015 716,500 $ 1.27 8.4 years $ 102,100 Exercisable, December 31, 2015 93,972 $ 1.26 6.8 years $ 14,000 Available for issuance, December 31, 2015 1,283,500 Granted in 2016 135,648 1.26 Exercised in 2016 (11,793) 1.25 Cancelled/Expired in 2016 (52,740) 1.25 Outstanding, December 31, 2016 787,615 $ 1.27 7.2 years $ 136,000 Exercisable, December 31, 2016 261,293 $ 1.27 6.5 years $ 45,500 Available for issuance, December 31, 2016 1,212,385 A summary of additional information related to the options outstanding as of December 31, 2016 under the 2005 and 2015 Plans are as follows: 2005 Plan Range of Exercise Prices Number of Options Weighted Average Remaining Contractual Weighted Average Exercise $0.17-$0.39 125,000 0.3 years 1.2 years $ 0.23 $0.40-$0.62 140,813 1.4 years $ 0.44 $0.63-$0.86 362,500 6.0 years $ 0.84 Total 628,313 3.8 years $ 0.63 2015 Plan Range of Exercise Prices $1.20 3,000 9.1 years $ 1.20 $1.25 551,967 8.0 years $ 1.25 $1.26-1.38 232,648 5.3 years $ 1.31 Total 787,615 7.2 years $ 1.27 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 2016 or 2015. At December 31, 2016 and 2015, a total of 633,426 and 670,675 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, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 9: 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. Basic earnings per share include no dilution and are computed by dividing income available to common shareholders by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential of securities that could share in our earnings. There were common stock equivalents of 787,615 and 1,064,000 shares outstanding at December 31, 2016 and 2015, respectively, consisting of stock options that were not included in the calculation of earnings per share because they would have been anti-dilutive. A reconciliation of the weighted average number of common shares outstanding for the years ended December 31 is as follows: 2016 2015 Common shares outstanding, beginning of the year 11,710,745 11,549,789 Weighted average common shares issued 24,457 84,726 Weighted average number of common shares outstanding 11,735,202 11,634,515 Dilutive effect of common share equivalents 236,047 281,523 Diluted weighted average number of common shares outstanding 11,971,249 11,916,038 We have authorized 20,000,000 shares of preferred stock issuable in one or more series, none of which were issued or outstanding as of December 31, 2016 and 2015. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Note 10: 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 and manufacturer’s representatives, 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: 2016 2015 Household Skin and Hair Household Skin and Hair Net sales $ 5,992,600 $ 29,235,800 $ 6,359,100 $ 22,829,300 Cost of Sales 2,993,700 17,043,000 2,988,500 13,820,100 Advertising expenses 961,100 606,100 1,004,300 528,300 Selling expenses 1,520,800 4,317,200 1,650,000 3,661,200 General and administrative expenses 1,559,100 3,012,600 1,435,400 1,822,800 Total operating costs and expenses 7,034,700 24,978,900 7,078,200 19,832,400 (Loss) income from operations (1,042,100 ) 4,256,900 (719,100 ) 2,996,900 Other (expense) income 2,800 9,800 5,000 21,900 Interest expense (4,000 ) (120,800 ) (6,400 ) (22,900 ) (Loss) income before income taxes $ (1,043,300 ) 4,145,900 $ (720,500 ) $ 2,995,900 The following is a reconciliation of segment information to consolidated information: 2016 2015 Net sales $ 35,228,400 $ 29,188,400 Consolidated income before income taxes $ 3,102,600 $ 2,275,400 Assets: 2016 2015 Household Products $ 1,850,000 $ 7,585,800 Skin and Hair Care Products 18,371,500 5,073,200 Corporate 1,611,800 3,483,800 Consolidated Total Assets $ 21,833,300 $ 16,142,800 Corporate assets noted above are comprised primarily of our cash and investments, and property and equipment not directly associated with manufacturing, warehousing, shipping and receiving activities. In 2016 and 2015, Ulta accounted for approximately $8,479,800 and $6,956,500, respectively, of our consolidated net sales, Wal-Mart accounted for approximately $7,221,400 and $4,494,800, respectively, of our consolidated net sales and TJ Maxx and Marshalls (collectively, “TJ Maxx”) together accounted for approximately $4,137,200 and $4,769,000, respectively, of our consolidated net sales. 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 TJ Maxx. These customers are not related to us. The outstanding accounts receivable from Ulta accounted for 9.7% and 1.8% of our total accounts receivable at December 31, 2016 and 2015, respectively. The outstanding accounts receivable from Wal-Mart accounted for 48.9% and 9.8% of our total accounts receivable at December 31, 2016 and 2015, respectively. The outstanding accounts receivable from TJ Maxx accounted for 16.3% and 70.3% of our total accounts receivable at December 31, 2016 and 2015, respectively. A loss of one or any 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, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 11: 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 $50,000 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 $7,000 and $3,700, in 2016 and 2015, respectively. We made no discretionary profit sharing contributions in 2016 or 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Leases On February 1, 2013, we entered into a lease with an unrelated third party 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”). Each of the Office Lease and the Warehouse Lease had an initial term of three years, with options to extend the term for two additional terms of three years each. Effective February 1, 2016, we exercised our first option to extend the term of the Office Lease and Warehouse Lease for three years. The initial rent for the Office Lease was $13.00 per square foot per annum, with annual 3% increases. The initial rent for the Warehouse Lease was $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. On March 25, 2016, we entered into a lease with an unrelated third party for approximately 53,440 square feet of warehouse space that connects to our current warehouse space (the “Expansion Lease”). The initial rent for Expansion Lease is $4.90 per square foot per annum, with annual increases ranging from 7% in the second year of the lease to 3% in the last two years of the lease. The term of the Expansion Lease will be co-terminous with the Warehouse Lease and will be subject to all of the terms and conditions for the Warehouse Lease. Annual rental expense under the Office Lease and Warehouse Lease for 2016 was $227,900 and $555,300, respectively. Annual rental expense under the Office Lease and Warehouse Lease for 2015 was $221,200 and $390,800, respectively. Minimum annual rental payments under the Office Lease are approximately $234,700, $241,700, and $20,200 for the years ending December 31, 2017, 2018, and 2019, respectively. Minimum annual rental payments under the Warehouse Lease are approximately $693,600, $719,800 , and $60,200 for the years ending December 31, 2017, 2018, and 2019, respectively. We have entered into various operating lease agreements, primarily for office equipment. Annual rental expense under these leases totaled $42,300 and $47,200 in 2016 and 2015, respectively. Minimum annual rental payments under noncancellable operating leases are approximately $37,100, $20,900, $6,900 and for the years ending December 31, 2017, 2018, and 2019 respectively. Contingencies We are subject to lawsuits from time to time in the ordinary course of business. While we expect those lawsuits not to have a material effect on us, an adverse development in any such lawsuit or the insurance coverage for a lawsuit could materially and adversely affect our financial condition and cash flow. We regularly review all pending litigation matters in which we might be involved and establish accruals deemed appropriate by us for these litigation matters when a probable loss estimate can be made. As of December 31, 2016 there were no pending litigation matters that required an accrual. |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
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, stock-based compensation and purchase price allocation. 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 Financial Resources, L.P. (“Summit”) for the purpose of providing working capital. The financing agreement with Summit was amended on March 12, 2009, March 16, 2011 (effective March 1, 2011) and on June 29, 2012 (effective July 1, 2012) and terminated on June 30, 2016. The financing agreement with Summit provided for a factoring line up to $1.5 million and was secured primarily by accounts receivables, inventory, any lease in which we are a lessor and all investment property and guarantees by our active subsidiaries. There was also an administrative fee of 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 0.75% per month if the average quarterly loan in the prior quarter was greater than $1,000,000 and of 1.0% per month on the average monthly outstanding loan on the inventory portion of any advance. In 2016 and 2015, we did not sell any of our accounts receivable to Summit. On March 16, 2011, with the consent of Summit, we entered into a financing agreement with Wells Fargo Bank, National Association (“Wells Fargo”) for the purpose of further lowering the cost of borrowing associated with the financing of our accounts receivable and on January 29, 2016 we terminated our agreement with Wells Fargo due to Walmart changing its accounts payable policy. Pursuant to this agreement with Wells Fargo, we were able to sell accounts receivable from Wal-Mart at a discount to Wells Fargo; provided, however, that Wells Fargo could reject offers to purchase such receivables in its discretion. These receivables could 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 receivables sold, typically ranging from 102 to 105 days. In 2016 and 2015, we sold approximately $306,800 and $4,672,888, respectively, of our relevant accounts receivables to Wells Fargo for approximately $305,200 and $4,652,359, respectively. The difference between the invoiced amount of the receivable and the cash that we received from Wells Fargo was a cost to us. This cost was in lieu of any cash discount our customer would have been allowed and, thus, was treated in a manner consistent with standard trade discounts granted to our customers. The reporting of the sale of accounts receivable to Wells Fargo was treated as a sale rather than as a secured borrowing. As a result, affected accounts receivables were relieved from the Company’s financial statements upon receipt of the cash proceeds. |
Inventories Valuation and Reserves | (f) Inventories Valuation and Reserves Inventories consist of raw materials and finished goods and are stated at the lower of cost (first-in, first-out method) or market. We estimate an inventory reserve for slow moving and obsolete products and raw materials based upon, among other things, an assessment of historical and anticipated sales of our products. In the event that actual results differ from our estimates, the results of future periods may be impacted. We record a reserve for slow moving and obsolete products and raw materials. We estimate this reserve based upon historical and anticipated sales. |
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 20 years. 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. Maintenance and repairs are expensed as incurred. Improvements that extend the useful lives of the asset or provide improved efficiency are capitalized. |
Intangible Assets | (h) Intangible Assets Intangible assets consist of customer relationships, trade names, formulas and batching processes and a non-compete agreement. The fair value of the intangible assets is amortized over their estimated useful lives and range from a period of five to 15 years and are reviewed for impairment when changes in market circumstances occur and written down to fair value if impaired. |
Goodwill | (i) Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired in the Acquisition discussed in Notes 4 and 5. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests, and in certain circumstances these assets are written down to fair value if impaired. |
Financial Instruments | (j) Financial Instruments Financial instruments which potentially subject us to concentrations of credit risk include cash and cash equivalents and accounts receivable. We maintain our cash balances in the form of bank demand deposits with financial institutions that we believe are creditworthy. As of December 31, 2016, 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, accrued expenses, long-term debt and line-of-credit approximate fair value due to the short-term nature of these financial instruments. At December 31, 2016 we had long-term debt of $2,000,000 and a $750,000 outstanding balance on our line-of-credit. At December 31, 2015 we had no long-term debt nor an outstanding balance on a line-of-credit. |
Income Taxes | (k) Income Taxes Income taxes reflect the tax effects of transactions reported in the financial statements and consist of taxes currently payable plus deferred income taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred income tax assets and liabilities are recognized for the future income tax consequences attributable to differences between the financial statement carrying amounts of existing 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 or expense. We classify penalty and interest expense related to income tax liabilities as an income tax expense. There are no significant interest and penalties recognized in the statement of operations or accrued on the balance sheet. |
Revenue Recognition | (l) Revenue Recognition Our revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. Certain criteria are required to 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, slotting fees 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 the 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. In the event that actual results differ from our estimates, the results of future periods may be impacted. 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, 2016 and December 31, 2015 approximately $1,184,700 and $1,179,700, 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 $2,574,800 and $2,517,500 for the years ended December 31, 2016 and 2015, respectively. |
Advertising Costs | (m) Advertising Costs Advertising costs are expensed as incurred. |
Stock-based Compensation | (n) Stock-based Compensation During 2016, we granted options to acquire: (1) 3,000 shares of our common stock to one of our production personnel at a price of $1.20 per share, which vest ratably over 48 months, or upon a change in control under certain circumstances, and which expire after 10 years; (2) 42,576 shares of our common stock to two of our management and administrative personnel at a price of $1.26 per share, which vest ratably over 48 months, or upon a change in control under certain circumstances, and which expire after 10 years; and (3) 90,072 shares of our common stock to our three non-employee board members at a price of $1.26 per share, which vest ratably over 36 months, or upon a change in control under certain circumstances, and which expire after five years. All of the foregoing options were granted at the market value as of the date of grant. The fair value of options is determined at the grant date and the related expense is recognized over the period in which the options vest. The Company recognizes the forfeitures of options as they occur. During 2015, we granted options to acquire: (1) 326,500 shares of our common stock to 40 of our management and administrative personnel at a price of $1.25 per share, which vest ratably over 48 months, or upon a change in control under certain circumstances, and which expire after 10 years; (2) 200,000 shares of our common stock to one of our executive officers at a price of $1.25 per share, which vest ratably over 60 months, or upon a change in control under certain circumstances, and which expire after 10 years; and (3) 90,000 shares of our common stock to our three non-employee board members at a price of $1.25 per share, half of which vested on the date of grant and the other half of which will vest on the first anniversary of the date of grant, or upon a change in control under certain circumstances, and which expire after five years. All of the foregoing options were granted at the market value as of the date of grant. We also granted options to acquire 100,000 shares of our common stock to one of our executive officers at a price of $1.375 per share, which vest ratably over 48 months, or upon a change in control under certain circumstances, and which expire after five years. Such options were granted at 110% of the market value as of the date of grant. The weighted average fair market value of the options granted in the years ended December 31, 2016 and 2015 were estimated on the date of grant, using a Black-Scholes option pricing model with the following assumptions: 2016 2015 Expected life of options (using the “simplified method”) 4.3 years 5.3 years Average risk-free interest rate 1.1% 1.4% Average expected volatility of stock 87% 133% Expected dividend rate None None Fair value of options granted $ 104,935 $ 755,105 Compensation cost related to stock options recognized in operating results (included in general and administrative expenses) was $248,600 and $162,200 for the years ended December 31, 2016 and 2015, respectively. Approximately $690,300 of total unrecognized compensation costs related to non-vested stock options is expected to be recognized over the next 12-60 months, depending on the vesting provisions of the options. There was no tax benefit from recording the non-cash expense as it relates to the options granted to our employees, as these were qualified stock options which are not normally tax deductible. |
Operating Costs and Expenses Classification | (o) 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 $1,799,900 and $1,462,600, for the years ended December 31, 2016 and 2015, 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 Standards | (p) Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “ Leases (Topic 842) In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” In June 2016, FASB issued ASU No. 2016-13, “ Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” . In July 2015, the FASB issued ASU 2015-11, “ Simplifying the Measurement of Inventory In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows: Classification of Certain Cash Receipts and Payments |
Recently Adopted Accounting Standards | (q) Recently Adopted Accounting Standards In April 2015, the FASB issued ASU No. 2015-03, “ Interest — Imputation of Interest (Subtopic 835-30) — Simplifying the Presentation of Debt Issuance Costs” Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting” In September 2015, FASB issued ASU No. 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments” The Company adopted ASU 2015-16 as of June 30, 2016, and the adoption of this standard did not have a material effect on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “ Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting adoption of this guidance using the modified retrospective method in a $ 10,900 increase to beginning retained earnings with a corresponding increase in deferred tax assets representing the excess tax benefits generated in years prior to adoption of ASU 2016-09. Prior to the adoption of , . |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
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, 2016 and 2015 were estimated on the date of grant, using a Black-Scholes option pricing model with the following assumptions: 2016 2015 Expected life of options (using the “simplified method”) 4.3 years 5.3 years Average risk-free interest rate 1.1% 1.4% Average expected volatility of stock 87% 133% Expected dividend rate None None Fair value of options granted $ 104,935 $ 755,105 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Composition of Inventory | Inventories, consisting of materials, labor and overhead at December 31 were comprised of the following: 2016 2015 Finished goods $ 2,668,700 $ 2,101,300 Raw materials 3,035,000 2,717,300 Inventory reserve for obsolescence (62,400 ) (120,000 ) $ 5,641,300 $ 4,698,600 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment at December 31 were comprised of the following: 2016 2015 Production equipment $ 4,995,600 $ 4,726,200 Office furniture and equipment 674,600 674,600 Other 202,400 188,200 5,872,600 5,589,000 Less accumulated depreciation (5,294,200 ) (5,159,000 ) $ 578,400 $ 430,000 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of Aggregate Fair Values of Assets Acquired | The following summarizes the aggregate fair values of the assets acquired during 2016 as of the date of the Acquisition: Inventories $ 400,000 Intangible assets 7,079,400 Goodwill 1,520,600 Total assets acquired $ 9,000,000 |
Summary of Selected Unaudited Pro Forma Condensed Consolidated Statements of Operations | The following table summarizes selected unaudited pro forma condensed consolidated statements of operations data for the years ended December 31, 2016 and 2015 as if the Acquisition had been completed on January 1, 2015. Pro Forma for the Year Ended December 31, 2016 2015 Net sales $ 38,632,500 $ 36,446,200 Net income $ 1,867,800 $ 4,838,400 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: As of December 31, 2016 Gross Carrying Accumulated Net Carrying Intangible assets Customer relationships $ 4,022,100 $ 201,100 $ 3,821,000 Trade names 2,362,400 78,700 2,283,700 Formulas and batching processes 668,600 27,900 640,700 Non-compete agreement 26,300 2,600 23,700 7,079,400 310,300 6,769,100 Goodwill 1,520,600 Total intangible assets $ 8,289,700 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for 2017 and subsequent years is as follows: 2017 $ 620,700 2018 620,700 2019 620,700 2020 620,700 2021 617,600 Thereafter 3,668,700 Total $ 6,769,100 |
Long-Term Debt and Line-of-Cr26
Long-Term Debt and Line-of-Credit (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-Term Debt and Line-of-Credit | Maturities of long-term debt and line-of-credit are as follows as of December 31, 2016: 2017 $ 800,000 2018 800,000 2019 1,150,000 2,750,000 Less unamortized debt issuance costs (62,700 ) Total $ 2,687,300 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Tax | The provision for income tax for the years ended December 31 is as follows: 2016 2015 Current provision (benefit): Federal $ 71,100 $ 60,300 State 2,400 (8,600 ) Total current provision (benefit) 73,500 51,700 Deferred provision (benefit): Federal 1,071,300 741,700 State 103,300 81,200 Valuation allowance 0 (3,379,100 ) Total deferred provision (benefit) 1,174,600 (2,556,200 ) Provision (benefit): Federal 1,142,400 (2,115,700 ) State 105,700 (388,800 ) Total provision (benefit) $ 1,248,100 $ (2,504,500 ) |
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: 2016 2015 Federal income tax at statutory rates $ 1,054,900 $ 773,700 State income taxes, net of federal tax effect 94,800 69,300 Permanent differences 12,900 13,400 Nondeductible stock-based compensation 81,800 41,400 Other 3,700 (23,200 ) Total 1,248,100 874,600 Change in valuation allowance 0 (3,379,100 ) Provision (benefit) for income taxes $ 1,248,100 $ (2,504,500 ) |
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, 2016 and 2015 are comprised of the following: 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 611,800 $ 1,833,100 Tax credit and other carryforwards 491,700 413,800 Trade receivables 80,000 205,200 Inventories 60,800 70,600 Accrued vacation 32,600 38,800 Intangibles and Goodwill 113,800 0 Other 23,500 20,800 Total deferred taxes 1,414,200 2,582,300 Deferred tax liability: Accumulated depreciation for tax purposes (21,600 ) (26,100 ) Total deferred tax liabilities (21,600 ) (26,100 ) Net deferred tax asset, before allowance 1,392,600 2,556,200 Valuation allowance 0 0 Net deferred tax asset $ 1,392,600 $ 2,556,200 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Options Granted | Stock option activity under the 2005 and 2015 Plans are as follows: Number of Weighted Average Weighted Average Remaining Contractual Aggregate Intrinsic Value 2005 Plan Maximum number of shares under the plan 3,000,000 Outstanding, December 31, 2014 918,969 $ 0.53 4.4 years $ 374,600 Granted in 2015 0 0.00 Exercised in 2015 (160,956 ) 0.26 Cancelled/Expired in 2015 (81,500 ) 0.24 Outstanding, December 31, 2015 676,513 $ 0.63 4.7 years $ 525,300 Exercisable, December 31, 2015 351,832 $ 0.51 3.3 years $ 317,000 Available for issuance, December 31, 2015 0 Granted in 2016 0 0.00 Exercised in 2016 (27,051 ) 0.64 Cancelled/Expired in 2016 (21,149 ) 0.78 Outstanding, December 31, 2016 628,313 $ 0.63 3.8 years $ 510,000 Exercisable, December 31, 2016 445,818 $ 0.55 2.8 years $ 398,200 Available for issuance, December 31, 2016 0 2015 Plan Maximum number of shares under the plan 2,000,000 Outstanding, December 31, 2014 0 $ 0.00 Granted in 2015 716,500 1.27 Exercised in 2015 0 0.00 Cancelled/Expired in 2015 0 0.00 Outstanding, December 31, 2015 716,500 $ 1.27 8.4 years $ 102,100 Exercisable, December 31, 2015 93,972 $ 1.26 6.8 years $ 14,000 Available for issuance, December 31, 2015 1,283,500 Granted in 2016 135,648 1.26 Exercised in 2016 (11,793) 1.25 Cancelled/Expired in 2016 (52,740) 1.25 Outstanding, December 31, 2016 787,615 $ 1.27 7.2 years $ 136,000 Exercisable, December 31, 2016 261,293 $ 1.27 6.5 years $ 45,500 Available for issuance, December 31, 2016 1,212,385 |
Summary of Additional Information Related to the Options Outstanding | A summary of additional information related to the options outstanding as of December 31, 2016 under the 2005 and 2015 Plans are as follows: 2005 Plan Range of Exercise Prices Number of Options Weighted Average Remaining Contractual Weighted Average Exercise $0.17-$0.39 125,000 0.3 years 1.2 years $ 0.23 $0.40-$0.62 140,813 1.4 years $ 0.44 $0.63-$0.86 362,500 6.0 years $ 0.84 Total 628,313 3.8 years $ 0.63 2015 Plan Range of Exercise Prices $1.20 3,000 9.1 years $ 1.20 $1.25 551,967 8.0 years $ 1.25 $1.26-1.38 232,648 5.3 years $ 1.31 Total 787,615 7.2 years $ 1.27 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
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: 2016 2015 Common shares outstanding, beginning of the year 11,710,745 11,549,789 Weighted average common shares issued 24,457 84,726 Weighted average number of common shares outstanding 11,735,202 11,634,515 Dilutive effect of common share equivalents 236,047 281,523 Diluted weighted average number of common shares outstanding 11,971,249 11,916,038 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Information on Segments | The following provides information on our segments as of and for the years ended December 31: 2016 2015 Household Skin and Hair Household Skin and Hair Net sales $ 5,992,600 $ 29,235,800 $ 6,359,100 $ 22,829,300 Cost of Sales 2,993,700 17,043,000 2,988,500 13,820,100 Advertising expenses 961,100 606,100 1,004,300 528,300 Selling expenses 1,520,800 4,317,200 1,650,000 3,661,200 General and administrative expenses 1,559,100 3,012,600 1,435,400 1,822,800 Total operating costs and expenses 7,034,700 24,978,900 7,078,200 19,832,400 (Loss) income from operations (1,042,100 ) 4,256,900 (719,100 ) 2,996,900 Other (expense) income 2,800 9,800 5,000 21,900 Interest expense (4,000 ) (120,800 ) (6,400 ) (22,900 ) (Loss) income before income taxes $ (1,043,300 ) 4,145,900 $ (720,500 ) $ 2,995,900 |
Reconciliation of Segment Information | The following is a reconciliation of segment information to consolidated information: 2016 2015 Net sales $ 35,228,400 $ 29,188,400 Consolidated income before income taxes $ 3,102,600 $ 2,275,400 Assets: 2016 2015 Household Products $ 1,850,000 $ 7,585,800 Skin and Hair Care Products 18,371,500 5,073,200 Corporate 1,611,800 3,483,800 Consolidated Total Assets $ 21,833,300 $ 16,142,800 |
Organization and Summary of S31
Organization and Summary of Significant Accounting Policies - Additional Information (Details) | Mar. 16, 2011 | Mar. 31, 2011 | Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) |
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||||
Number of business segment | Segment | 2 | |||
Account receivables | $ 1,500,000 | |||
Percentage of administrative fees on receivable portion, Less Than or equal to $1000000 | 0.85% | |||
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 | |||
Percentage of administrative fees on inventory portion | 1.00% | |||
Wells Fargo Bank | ||||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||||
Sale of account receivables | $ 306,800 | $ 4,672,888 | ||
Proceeds from sale of account receivables | 305,200 | 4,652,359 | ||
LIBOR | Wells Fargo Bank | ||||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||||
Interest rate of agreement amount | 1.15% | |||
Minimum | ||||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||||
Period to maturity of receivables sold | 102 days | |||
Maximum | ||||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||||
Period to maturity of receivables sold | 105 days | |||
Summit | ||||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||||
Sale of account receivables | $ 0 | $ 0 |
Organization and Summary of S32
Organization and Summary of Significant Accounting Policies - Additional Information 1 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Significant financial instruments with off-balance sheet risk | $ 0 | |
Long-term debt | 2,000,000 | $ 0 |
Line-of-credit outstanding balance | 750,000 | 0 |
Interest and penalties recognized in statement of operations | 0 | |
Accrued interest or penalties related to uncertain tax positions | 0 | 0 |
Reserve for reduction in account receivable | 1,184,700 | 1,179,700 |
Trade promotions to customers | $ 2,574,800 | $ 2,517,500 |
Minimum | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 3 years | |
Useful lives of intangible assets | 5 years | |
Minimum | Production Equipment | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 15 years | |
Minimum | Production Support Equipment | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 3 years | |
Minimum | Office Furniture and Equipment | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 10 years | |
Minimum | Office Equipment | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 3 years | |
Maximum | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 20 years | |
Useful lives of intangible assets | 15 years | |
Maximum | Production Equipment | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 20 years | |
Maximum | Production Support Equipment | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 10 years | |
Maximum | Office Furniture and Equipment | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 20 years | |
Maximum | Office Equipment | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Useful life of property, plant and equipment | 5 years |
Organization and Summary of S33
Organization and Summary of Significant Accounting Policies - Additional Information 2 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Price of option with maximum maturity | 110.00% | |
Stock-based compensation | $ 248,600 | $ 162,200 |
Unrecognized compensation costs related to non-vested stock options | 690,300 | |
Tax benefit from recording non-cash expense relates to options granted to employees | 0 | |
Shipping and handling costs | 1,799,900 | 1,462,600 |
ASU 2016-09 | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
New accounting pronouncement or change in accounting principle, cumulative effect of adoption | $ 10,900 | |
Minimum | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Period over which compensation costs related to non-vested stock options recognize | 12 months | |
Maximum | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Period over which compensation costs related to non-vested stock options recognize | 60 months | |
General and Administrative Expense | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Stock-based compensation | $ 248,600 | $ 162,200 |
One of Production Personnel | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Number of shares granted | 3,000 | |
Weighted average exercise price granted | $ 1.20 | |
Options vesting period | 48 months | |
Expiry of options | 10 years | |
Two of Management and Administrative Personnel | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Number of shares granted | 42,576 | |
Weighted average exercise price granted | $ 1.26 | |
Options vesting period | 48 months | |
Expiry of options | 10 years | |
Three Non-Employee Board Member | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Number of shares granted | 90,072 | 90,000 |
Weighted average exercise price granted | $ 1.26 | $ 1.25 |
Options vesting period | 36 months | |
Expiry of options | 5 years | 5 years |
Vesting description of options | 90,000 shares of our common stock to our three non-employee board members at a price of $1.25 per share, half of which vested on the date of grant and the other half of which will vest on the first anniversary of the date of grant, or upon a change in control under certain circumstances, and which expire after five years. | |
40 of Management and Administrative Personnel | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Number of shares granted | 326,500 | |
Weighted average exercise price granted | $ 1.25 | |
Options vesting period | 48 months | |
Expiry of options | 10 years | |
Executive Officer | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Number of shares granted | 200,000 | |
Weighted average exercise price granted | $ 1.25 | |
Options vesting period | 60 months | |
Expiry of options | 10 years | |
Executive Officer One | ||
Schedule Of Organization And Presentation Of Financial Statements [Line Items] | ||
Number of shares granted | 100,000 | |
Weighted average exercise price granted | $ 1.375 | |
Options vesting period | 48 months | |
Expiry of options | 5 years |
Organization and Summary of S34
Organization and Summary of Significant Accounting Policies - Weighted Average Fair Market Value of the Options Granted Estimated on the Date of Grant Assumptions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Expected life of options (using the “simplified method”) | 4 years 3 months 18 days | 5 years 3 months 18 days |
Average risk-free interest rate | 1.10% | 1.40% |
Average expected volatility of stock | 87.00% | 133.00% |
Expected dividend rate | 0.00% | 0.00% |
Fair value of options granted | $ 104,935 | $ 755,105 |
Inventories - Composition of In
Inventories - Composition of Inventory (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 2,668,700 | $ 2,101,300 |
Raw materials | 3,035,000 | 2,717,300 |
Inventory reserve for obsolescence | (62,400) | (120,000) |
Inventories, net | $ 5,641,300 | $ 4,698,600 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Property, Plant and Equipment | ||
Property, Plant and Equipment, gross | $ 5,872,600 | $ 5,589,000 |
Less accumulated depreciation | (5,294,200) | (5,159,000) |
Property, Plant and Equipment, Total | 578,400 | 430,000 |
Production Equipment | ||
Schedule of Property, Plant and Equipment | ||
Property, Plant and Equipment, gross | 4,995,600 | 4,726,200 |
Office Furniture and Equipment | ||
Schedule of Property, Plant and Equipment | ||
Property, Plant and Equipment, gross | 674,600 | 674,600 |
Other | ||
Schedule of Property, Plant and Equipment | ||
Property, Plant and Equipment, gross | $ 202,400 | $ 188,200 |
Property, Plant and Equipment37
Property, Plant and Equipment - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 135,200 | $ 160,800 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Net sales | $ 35,228,400 | $ 29,188,400 | ||
Net income | $ 1,854,500 | $ 4,779,900 | ||
Ultimark Products, Inc | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, pro forma information, description | The pro forma amounts included in the table above reflect the application of accounting policies and adjustment of the results of the Acquisition to reflect: (1) the additional amortization that would have been charged to the acquired intangible assets; (2) additional interest expense relating to the borrowings on the term loan and line-of credit, including amortization of debt issuance costs; and (3) the tax impacts | |||
Neoteric Cosmetics, Inc | Ultimark Products, Inc | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, date of asset purchase agreement | Jun. 30, 2016 | |||
Total consideration paid for acquisition | $ 9,100,000 | $ 9,000,000 | ||
Target inventory in acquisition | $ 493,034 | |||
Inventory adjustment | 93,000 | |||
Transaction costs related to acquisition | $ 721,600 | |||
Intangible assets | 7,079,400 | 7,079,400 | ||
Net sales | 3,412,700 | |||
Net income | 482,800 | |||
Neoteric Cosmetics, Inc | Ultimark Products, Inc | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 4,022,100 | $ 4,022,100 | ||
Useful lives of intangible assets | 10 years | |||
Neoteric Cosmetics, Inc | Ultimark Products, Inc | Trade names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 2,362,400 | $ 2,362,400 | ||
Useful lives of intangible assets | 15 years | |||
Neoteric Cosmetics, Inc | Ultimark Products, Inc | Formulas and Batching Processes | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 668,600 | $ 668,600 | ||
Useful lives of intangible assets | 12 years | |||
Neoteric Cosmetics, Inc | Ultimark Products, Inc | Non-compete Agreement | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 26,300 | $ 26,300 | ||
Useful lives of intangible assets | 5 years |
Acquisition - Summary of Aggreg
Acquisition - Summary of Aggregate Fair Values of Assets Acquired (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||
Goodwill | $ 1,520,600 | $ 0 |
Neoteric Cosmetics, Inc | Ultimark Products, Inc | ||
Business Acquisition [Line Items] | ||
Inventories | 400,000 | |
Intangible assets | 7,079,400 | |
Goodwill | 1,520,600 | |
Total assets acquired | $ 9,000,000 |
Acquisition - Summary of Select
Acquisition - Summary of Selected Unaudited Pro Forma Condensed Consolidated Statements of Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Net sales | $ 38,632,500 | $ 36,446,200 |
Net income | $ 1,867,800 | $ 4,838,400 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 7,079,400 | |
Accumulated Amortization | 310,300 | |
Net Carrying Value | 6,769,100 | |
Goodwill | 1,520,600 | $ 0 |
Total intangible assets | 8,289,700 | |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,022,100 | |
Accumulated Amortization | 201,100 | |
Net Carrying Value | 3,821,000 | |
Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,362,400 | |
Accumulated Amortization | 78,700 | |
Net Carrying Value | 2,283,700 | |
Formulas and Batching Processes | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 668,600 | |
Accumulated Amortization | 27,900 | |
Net Carrying Value | 640,700 | |
Non-compete Agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 26,300 | |
Accumulated Amortization | 2,600 | |
Net Carrying Value | $ 23,700 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense of intangible assets | $ 310,300 | $ 0 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Schedule of Estimated Amortization Expense (Details) | Dec. 31, 2016USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,017 | $ 620,700 |
2,018 | 620,700 |
2,019 | 620,700 |
2,020 | 620,700 |
2,021 | 617,600 |
Thereafter | 3,668,700 |
Net Carrying Value | $ 6,769,100 |
Long-Term Debt and Line-of-Cr44
Long-Term Debt and Line-of-Credit - Additional Information (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Component of interest expense | $ 12,500 | |
Unamortized debt issuance costs | $ 62,700 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility, frequency of commitment fee payment | quarterly | |
Unused commitment fee percentage | 0.50% | |
Credit Agreement | ||
Debt Instrument [Line Items] | ||
Minimum debt service coverage ratio | 125.00% | |
Maximum funded indebtedness to adjusted EBITDA ratio | 300.00% | |
JPMorgan Chase Bank, N. A. | Credit Agreement | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, effective interest rate | 3.76% | |
Credit facility amount | $ 4,000,000 | |
Credit facility, terminate date | Jun. 30, 2019 | |
JPMorgan Chase Bank, N. A. | Term Loan | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt instrument, amount | $ 2,400,000 | |
Debt instrument, periodic payment | quarterly payments | |
Debt instrument, term | 3 years | |
Debt instrument, effective interest rate | 4.51% | |
JPMorgan Chase Bank, N. A. | LIBO Rate | Credit Agreement | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 3.00% | |
JPMorgan Chase Bank, N. A. | LIBO Rate | Term Loan | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 3.75% | |
JPMorgan Chase Bank, N. A. | Prime Rate | Credit Agreement | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 0.25% | |
JPMorgan Chase Bank, N. A. | Prime Rate | Term Loan | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 1.00% | |
JPMorgan Chase Bank, N. A. | Floor Rate | Credit Agreement | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 2.50% | |
JPMorgan Chase Bank, N. A. | Floor Rate | Term Loan | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 2.50% |
Long-Term Debt and Line-of-Cr45
Long-Term Debt and Line-of-Credit - Schedule of Maturities of Long-Term Debt and Line-of-Credit (Details) | Dec. 31, 2016USD ($) |
Long Term Debt By Maturity [Abstract] | |
2,017 | $ 800,000 |
2,018 | 800,000 |
2,019 | 1,150,000 |
Long-term debt and line-of-credit, gross | 2,750,000 |
Less unamortized debt issuance costs | (62,700) |
Total | $ 2,687,300 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Current provision (benefit): | ||
Federal | $ 71,100 | $ 60,300 |
State | 2,400 | (8,600) |
Total current provision (benefit) | 73,500 | 51,700 |
Deferred provision (benefit): | ||
Federal | 1,071,300 | 741,700 |
State | 103,300 | 81,200 |
Valuation allowance | 0 | (3,379,100) |
Total deferred provision (benefit) | 1,174,600 | (2,556,200) |
Provision (benefit): | ||
Federal | 1,142,400 | (2,115,700) |
State | 105,700 | (388,800) |
Total provision (benefit) | $ 1,248,100 | $ (2,504,500) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Benefit) at the Statutory Tax Rate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of income tax expense (benefit) at the statutory tax rate | ||
Federal income tax at statutory rates | $ 1,054,900 | $ 773,700 |
State income taxes, net of federal tax effect | 94,800 | 69,300 |
Permanent differences | 12,900 | 13,400 |
Nondeductible stock-based compensation | 81,800 | 41,400 |
Other | 3,700 | (23,200) |
Total | 1,248,100 | 874,600 |
Change in valuation allowance | 0 | (3,379,100) |
Total provision (benefit) | $ 1,248,100 | $ (2,504,500) |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 611,800 | $ 1,833,100 |
Tax credit and other carryforwards | 491,700 | 413,800 |
Trade receivables | 80,000 | 205,200 |
Inventories | 60,800 | 70,600 |
Accrued vacation | 32,600 | 38,800 |
Intangibles and Goodwill | 113,800 | 0 |
Other | 23,500 | 20,800 |
Total deferred taxes | 1,414,200 | 2,582,300 |
Deferred tax liability: | ||
Accumulated depreciation for tax purposes | (21,600) | (26,100) |
Total deferred tax liabilities | (21,600) | (26,100) |
Net deferred tax asset, before allowance | 1,392,600 | 2,556,200 |
Valuation allowance | 0 | 0 |
Net deferred tax asset | $ 1,392,600 | $ 2,556,200 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||
Deferred tax assets, tax credit carryforwards, alternative minimum tax | $ 193,000 | |
Uncertain tax benefits | 0 | $ 0 |
Accrued interest or penalties related to uncertain tax positions | 0 | $ 0 |
State and Local Jurisdiction | ||
Income Tax [Line Items] | ||
Operating loss carryforwards | $ 8,310,000 | |
Federal new operating loss carryforwards expiration date | Dec. 31, 2032 | |
Income tax year open to examination | 2,012 | |
Domestic Tax Authority | ||
Income Tax [Line Items] | ||
Income tax year open to examination | 2,013 | |
Internal Revenue Service (IRS) | ||
Income Tax [Line Items] | ||
Operating loss carryforwards | $ 1,050,000 | |
Federal new operating loss carryforwards expiration date | Dec. 31, 2032 | |
Research and Development Expense | Internal Revenue Service (IRS) | ||
Income Tax [Line Items] | ||
Tax credit carryforward, amount | $ 298,000 | |
Expiration date for tax credit carryforwards | Dec. 31, 2036 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 | May 31, 2011 | Dec. 31, 2005 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares issuable under 2005 Plan | 3,000,000 | ||||
Percentage of current market price for grant value calculation | 110.00% | ||||
Options grant value calculation description | Options granted after May 2011, pursuant to the plan amendment in May 2011, were 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 | ||||
Employer discretionary contribution to defined plan | $ 0 | $ 0 | |||
Shares Held in Employee Stock Option Plan, Allocated | 633,426 | 670,675 | |||
2005 Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares issuable under 2005 Plan | 3,000,000 | 1,500,000 | |||
Percentage of current market price for grant value calculation | 120.00% | ||||
Number of trading days for calculation of average market price | 30 days | ||||
Stock option plan expiry date | Mar. 31, 2015 | ||||
2005 Plan | Minimum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock exercisable period | 5 years | ||||
2005 Plan | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock exercisable period | 10 years |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Options Granted (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 31, 2011 | Dec. 31, 2005 | |
Schedule of options granted | |||||
Maximum number of shares under the plan | 3,000,000 | ||||
2005 Plan | |||||
Schedule of options granted | |||||
Maximum number of shares under the plan | 3,000,000 | 1,500,000 | |||
Outstanding Number of Options Beginning Balance | 676,513 | 918,969 | |||
Number of Options Granted | 0 | 0 | |||
Number of Options Exercised | (27,051) | (160,956) | |||
Number of Options Cancelled/Expired | (21,149) | (81,500) | |||
Outstanding Number of Options Ending Balance | 628,313 | 676,513 | 918,969 | ||
Exercisable Number of Options Ending Balance | 445,818 | 351,832 | |||
Available for Issuance Number of Options Ending Balance | 0 | 0 | |||
Weighted Average Exercise Price | |||||
Outstanding Weighted Average Exercise Price Beginning Balance | $ 0.63 | $ 0.53 | |||
Weighted Average Exercise Price Granted | 0 | 0 | |||
Weighted Average Exercise Price Exercised | 0.64 | 0.26 | |||
Weighted Average Exercise Price Cancelled/Expired | 0.78 | 0.24 | |||
Outstanding Weighted Average Exercise Price Ending Balance | 0.63 | 0.63 | $ 0.53 | ||
Weighted Average Exercise Price Exercisable Ending Balance | $ 0.55 | $ 0.51 | |||
Weighted Average Remaining Contractual Life | |||||
Weighted Average Remaining Contractual Life Options Outstanding | 3 years 9 months 18 days | 4 years 8 months 12 days | 4 years 4 months 24 days | ||
Weighted Average Remaining Contractual Life Options Exercisable | 2 years 9 months 18 days | 3 years 3 months 18 days | |||
Aggregate Intrinsic Value | |||||
Outstanding Aggregate Intrinsic Value | $ 510,000 | $ 525,300 | $ 374,600 | ||
Aggregate Intrinsic Value Exercisable | $ 398,200 | $ 317,000 | |||
2015 Plan | |||||
Schedule of options granted | |||||
Maximum number of shares under the plan | 2,000,000 | ||||
Outstanding Number of Options Beginning Balance | 716,500 | 0 | |||
Number of Options Granted | 135,648 | 716,500 | |||
Number of Options Exercised | (11,793) | 0 | |||
Number of Options Cancelled/Expired | (52,740) | 0 | |||
Outstanding Number of Options Ending Balance | 787,615 | 716,500 | 0 | ||
Exercisable Number of Options Ending Balance | 261,293 | 93,972 | |||
Available for Issuance Number of Options Ending Balance | 1,212,385 | 1,283,500 | |||
Weighted Average Exercise Price | |||||
Outstanding Weighted Average Exercise Price Beginning Balance | $ 1.27 | $ 0 | |||
Weighted Average Exercise Price Granted | 1.26 | 1.27 | |||
Weighted Average Exercise Price Exercised | 1.25 | 0 | |||
Weighted Average Exercise Price Cancelled/Expired | 1.25 | 0 | |||
Outstanding Weighted Average Exercise Price Ending Balance | 1.27 | 1.27 | $ 0 | ||
Weighted Average Exercise Price Exercisable Ending Balance | $ 1.27 | $ 1.26 | |||
Weighted Average Remaining Contractual Life | |||||
Weighted Average Remaining Contractual Life Options Outstanding | 7 years 2 months 12 days | 8 years 4 months 24 days | |||
Weighted Average Remaining Contractual Life Options Exercisable | 6 years 6 months | 6 years 9 months 18 days | |||
Aggregate Intrinsic Value | |||||
Outstanding Aggregate Intrinsic Value | $ 136,000 | $ 102,100 | |||
Aggregate Intrinsic Value Exercisable | $ 45,500 | $ 14,000 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Additional Information Related to the Options Outstanding (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
2005 Plan | |
Summary of additional information related to the options outstanding | |
Exercisable Weighted Average Number of Option Outstanding | shares | 628,313 |
Average Option Price Per share Exercised | 3 years 9 months 18 days |
Options Outstanding and Exercisable Weighted Average Exercise Price | $ 0.63 |
2005 Plan | Range One | |
Summary of additional information related to the options outstanding | |
Upper range of Exercise prices | 0.39 |
Lower range of Exercise prices | $ 0.17 |
Exercisable Weighted Average Number of Option Outstanding | shares | 125,000 |
Average Option Price Per share Exercised | 3 months 18 days |
Options Outstanding and Exercisable Weighted Average Exercise Price | $ 0.23 |
2005 Plan | Range Two | |
Summary of additional information related to the options outstanding | |
Upper range of Exercise prices | 0.62 |
Lower range of Exercise prices | $ 0.40 |
Exercisable Weighted Average Number of Option Outstanding | shares | 140,813 |
Average Option Price Per share Exercised | 1 year 4 months 24 days |
Options Outstanding and Exercisable Weighted Average Exercise Price | $ 0.44 |
2005 Plan | Range Three | |
Summary of additional information related to the options outstanding | |
Upper range of Exercise prices | 0.86 |
Lower range of Exercise prices | $ 0.63 |
Exercisable Weighted Average Number of Option Outstanding | shares | 362,500 |
Average Option Price Per share Exercised | 6 years |
Options Outstanding and Exercisable Weighted Average Exercise Price | $ 0.84 |
2015 Plan | |
Summary of additional information related to the options outstanding | |
Exercisable Weighted Average Number of Option Outstanding | shares | 787,615 |
Average Option Price Per share Exercised | 7 years 2 months 12 days |
Options Outstanding and Exercisable Weighted Average Exercise Price | $ 1.27 |
2015 Plan | Exercise Price One | |
Summary of additional information related to the options outstanding | |
Exercise price | $ 1.20 |
Exercisable Weighted Average Number of Option Outstanding | shares | 3,000 |
Average Option Price Per share Exercised | 9 years 1 month 6 days |
Options Outstanding and Exercisable Weighted Average Exercise Price | $ 1.20 |
2015 Plan | Exercise Price Two | |
Summary of additional information related to the options outstanding | |
Exercise price | $ 1.25 |
Exercisable Weighted Average Number of Option Outstanding | shares | 551,967 |
Average Option Price Per share Exercised | 8 years |
Options Outstanding and Exercisable Weighted Average Exercise Price | $ 1.25 |
2015 Plan | Range Four | |
Summary of additional information related to the options outstanding | |
Upper range of Exercise prices | 1.38 |
Lower range of Exercise prices | $ 1.26 |
Exercisable Weighted Average Number of Option Outstanding | shares | 232,648 |
Average Option Price Per share Exercised | 5 years 3 months 18 days |
Options Outstanding and Exercisable Weighted Average Exercise Price | $ 1.31 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Preferred stock issuable | 20,000,000 | 20,000,000 |
Preferred stock issued | 0 | 0 |
Preferred stock outstanding | 0 | 0 |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities comprised of outstanding stock options | 787,615 | 1,064,000 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of the Weighted Average Number of Common Shares Outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Beginning Balance, Shares | 11,710,745 | 11,549,789 |
Weighted average common shares issued | 24,457 | 84,726 |
Weighted average number of common shares outstanding | 11,735,202 | 11,634,515 |
Dilutive effect of common share equivalents | 236,047 | 281,523 |
Diluted weighted average number of common shares outstanding | 11,971,249 | 11,916,038 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of business segment | Segment | 2 | |
Ulta | ||
Segment Reporting Information [Line Items] | ||
Entity wide revenue, net sales from major customer | $ 8,479,800 | $ 6,956,500 |
Ulta | Customer Concentration Risk | Accounts Receivable | ||
Segment Reporting Information [Line Items] | ||
Entity wide outstanding accounts receivable percentage from major customer | 9.70% | 1.80% |
Wal-Mart | ||
Segment Reporting Information [Line Items] | ||
Entity wide revenue, net sales from major customer | $ 7,221,400 | $ 4,494,800 |
Wal-Mart | Customer Concentration Risk | Accounts Receivable | ||
Segment Reporting Information [Line Items] | ||
Entity wide outstanding accounts receivable percentage from major customer | 48.90% | 9.80% |
TJ Maxx | ||
Segment Reporting Information [Line Items] | ||
Entity wide revenue, net sales from major customer | $ 4,137,200 | $ 4,769,000 |
TJ Maxx | Customer Concentration Risk | Accounts Receivable | ||
Segment Reporting Information [Line Items] | ||
Entity wide outstanding accounts receivable percentage from major customer | 16.30% | 70.30% |
Segment Information - Informati
Segment Information - Information on Segments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 35,228,400 | $ 29,188,400 |
Cost of Sales | 20,036,700 | 16,808,600 |
Advertising expenses | 1,567,200 | 1,532,600 |
Selling expenses | 5,838,000 | 5,311,200 |
General and administrative expenses | 4,571,700 | 3,258,200 |
Total operating costs and expenses | 32,013,600 | 26,910,600 |
Income from operations | 3,214,800 | 2,277,800 |
Interest expense | (124,800) | (29,300) |
Income before income taxes | 3,102,600 | 2,275,400 |
Household Products | ||
Segment Reporting Information [Line Items] | ||
Net sales | 5,992,600 | 6,359,100 |
Cost of Sales | 2,993,700 | 2,988,500 |
Advertising expenses | 961,100 | 1,004,300 |
Selling expenses | 1,520,800 | 1,650,000 |
General and administrative expenses | 1,559,100 | 1,435,400 |
Total operating costs and expenses | 7,034,700 | 7,078,200 |
Income from operations | (1,042,100) | (719,100) |
Other (expense) income | 2,800 | 5,000 |
Interest expense | (4,000) | (6,400) |
Income before income taxes | (1,043,300) | (720,500) |
Skin And Hair Care Products | ||
Segment Reporting Information [Line Items] | ||
Net sales | 29,235,800 | 22,829,300 |
Cost of Sales | 17,043,000 | 13,820,100 |
Advertising expenses | 606,100 | 528,300 |
Selling expenses | 4,317,200 | 3,661,200 |
General and administrative expenses | 3,012,600 | 1,822,800 |
Total operating costs and expenses | 24,978,900 | 19,832,400 |
Income from operations | 4,256,900 | 2,996,900 |
Other (expense) income | 9,800 | 21,900 |
Interest expense | (120,800) | (22,900) |
Income before income taxes | $ 4,145,900 | $ 2,995,900 |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of segment information | ||
Net sales | $ 35,228,400 | $ 29,188,400 |
Consolidated income before income taxes | 3,102,600 | 2,275,400 |
Assets: | ||
Consolidated Total Assets | 21,833,300 | 16,142,800 |
Household Products | ||
Reconciliation of segment information | ||
Net sales | 5,992,600 | 6,359,100 |
Skin And Hair Care Products | ||
Reconciliation of segment information | ||
Net sales | 29,235,800 | 22,829,300 |
Operating Segments | Household Products | ||
Assets: | ||
Consolidated Total Assets | 1,850,000 | 7,585,800 |
Operating Segments | Skin And Hair Care Products | ||
Assets: | ||
Consolidated Total Assets | 18,371,500 | 5,073,200 |
Corporate, Non-Segment | ||
Assets: | ||
Consolidated Total Assets | $ 1,611,800 | $ 3,483,800 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [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 | $ 50,000 | |
Vesting period of service to employee for profit sharing contribution | 5 years | |
Amount of matching contribution | $ 7,000 | $ 3,700 |
Discretionary profit sharing contribution | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Feb. 01, 2013ft²Extension$ / ft² | Dec. 31, 2016USD ($)Litigation | Dec. 31, 2015USD ($) | Mar. 25, 2016ft²$ / ft² |
Property Subject To Or Available For Operating Lease [Line Items] | ||||
Term of operating lease, additional rent per square foot criteria for uncontrolled operating expenses increase minimum percentage | 5.00% | |||
Minimum annual rental payments under operating lease for next year | $ 37,100 | |||
Minimum annual rental payments under operating lease for 2nd year | 20,900 | |||
Minimum annual rental payments under operating lease for 3rd year | 6,900 | |||
Annual rental expense under operating lease agreements | $ 42,300 | $ 47,200 | ||
Number of pending litigation | Litigation | 0 | |||
Office Lease | ||||
Property Subject To Or Available For Operating Lease [Line Items] | ||||
Area of lease | ft² | 16,078 | |||
Operating leases term of contract | 3 years | |||
Operating lease term, number of additional extensions allowed | Extension | 2 | |||
Operating lease extension period | 3 years | |||
Operating lease initial rent per square foot per annum | $ / ft² | 13 | |||
Operating lease incremental rent percentage per annum | 3.00% | |||
Annual rent expenses under operation lease | $ 227,900 | 221,200 | ||
Minimum annual rental payments under operating lease for next year | 234,700 | |||
Minimum annual rental payments under operating lease for 2nd year | 241,700 | |||
Minimum annual rental payments under operating lease for 3rd year | 20,200 | |||
Warehouse Lease | ||||
Property Subject To Or Available For Operating Lease [Line Items] | ||||
Area of lease | ft² | 113,620 | 53,440 | ||
Operating leases term of contract | 3 years | |||
Operating lease term, number of additional extensions allowed | Extension | 2 | |||
Operating lease extension period | 3 years | |||
Operating lease initial rent per square foot per annum | $ / ft² | 3.25 | 4.90 | ||
Operating lease incremental rent percentage per annum | 3.00% | |||
Additional rent per square foot related to operating expenses | $ / ft² | 1.25 | |||
Percentage of operating lease annual increase from second year | 7.00% | |||
Percentage of operating lease annual increase in last two years | 3.00% | |||
Annual rent expenses under operation lease | 555,300 | $ 390,800 | ||
Minimum annual rental payments under operating lease for next year | 693,600 | |||
Minimum annual rental payments under operating lease for 2nd year | 719,800 | |||
Minimum annual rental payments under operating lease for 3rd year | $ 60,200 |