Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SERVOTRONICS INC /DE/ | |
Entity Central Index Key | 0000089140 | |
Trading Symbol | svt | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 2,580,880 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 2,152 | $ 2,598 |
Accounts receivable, net | 10,874 | 10,586 |
Inventories, net | 15,665 | 15,150 |
Prepaid income taxes | 331 | 314 |
Other current assets | 658 | 496 |
Total current assets | 29,680 | 29,144 |
Property, plant and equipment, net | 12,243 | 11,875 |
Deferred income taxes | 295 | 295 |
Other non-current assets | 433 | 371 |
Total Assets | 42,651 | 41,685 |
Current liabilities: | ||
Current portion of long-term debt | 548 | 548 |
Current portion of capitalized lease obligations | 175 | 175 |
Dividend payable | 9 | 13 |
Accounts payable | 3,427 | 2,494 |
Accrued employee compensation and benefits costs | 1,910 | 1,908 |
Other accrued liabilities | 1,028 | 865 |
Total current liabilities | 7,097 | 6,003 |
Long-term debt | 2,229 | 2,410 |
Post retirement obligation | 1,784 | 1,759 |
Shareholders' equity: | ||
Common stock, par value $0.20; authorized 4,000,000 shares; issued 2,614,506 shares; outstanding 2,483,998 (2,392,207 - 2018) shares | 523 | 523 |
Capital in excess of par value | 14,264 | 14,250 |
Retained earnings | 18,886 | 18,788 |
Accumulated other comprehensive income | 35 | 35 |
Employee stock ownership trust commitment | (561) | (561) |
Treasury stock, at cost 130,508 (117,979 - 2018) shares | (1,606) | (1,522) |
Total shareholders' equity | 31,541 | 31,513 |
Total Liabilities and Shareholders' Equity | $ 42,651 | $ 41,685 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.20 | $ 0.20 |
Common stock, shares authorized | 4,000,000 | 4,000,000 |
Common stock, shares issued | 2,614,506 | 2,614,506 |
Common stock, shares outstanding | 2,483,998 | 2,392,207 |
Treasury stock, shares | 130,508 | 117,979 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 12,003 | $ 10,559 |
Cost of goods sold, inclusive of depreciation and amortization | 9,930 | 8,510 |
Gross margin | 2,073 | 2,049 |
Operating Expenses: | ||
Selling, general and administrative | 1,927 | 1,627 |
Interest expense | 27 | 25 |
Total operating expenses | 1,954 | 1,652 |
Income before income tax provision | 119 | 397 |
Income tax provision | 21 | 66 |
Net income | $ 98 | $ 331 |
Basic | ||
Net income per share (in dollars per share) | $ 0.04 | $ 0.14 |
Diluted | ||
Net income per share (in dollars per share) | $ 0.04 | $ 0.14 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows related to operating activities: | ||
Net Income | $ 98 | $ 331 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||
Depreciation and amortization | 274 | 244 |
Loss on disposal of property | 1 | |
Stock based compensation | 58 | |
(Decrease) increase in inventory reserve | (78) | 21 |
Increase in allowance for doubtful accounts | 10 | |
Increase in warranty reserve | 39 | 112 |
Change in assets and liabilities: | ||
Accounts receivable | (298) | (706) |
Inventories | (437) | (350) |
Prepaid income taxes | (17) | |
Other current assets | (162) | (170) |
Other non-current assets | (62) | 4 |
Accounts payable | 933 | 648 |
Accrued employee compensation and benefit costs | 27 | (250) |
Accrued income taxes | 64 | |
Other accrued liabilities | 120 | (62) |
Net cash provided (used) by operating activities | 505 | (113) |
Cash flows related to investing activities: | ||
Capital expenditures - property, plant and equipment | (642) | (511) |
Net cash used in investing activities | (642) | (511) |
Cash flows related to financing activities: | ||
Proceeds from lease line of credit | 92 | |
Principal payments on long-term debt | (136) | (137) |
Principal payments on equipment financing obligations | (45) | (35) |
Purchase of treasury shares | (128) | (117) |
Net cash used in financing activities | (309) | (197) |
Net decrease in cash and cash equivalents | (446) | (821) |
Cash and cash equivalents at beginning of period | 2,598 | 4,707 |
Cash and cash equivalents at end of period | $ 2,152 | $ 3,886 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The consolidated financial statements should be read in conjunction with the 2018 annual report and the notes thereto. |
Business Description and Summar
Business Description and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Business Description and Summary of Significant Accounting Policies | 2. Business Description and Summary of Significant Accounting Policies Business Description Servotronics, Inc. and its subsidiaries design, manufacture and market advanced technology products consisting primarily of control components, and consumer products consisting of knives and various types of cutlery and other edged products. Principles of Consolidation The consolidated financial statements include the accounts of Servotronics, Inc. and its wholly-owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated upon consolidation. Cash and Cash Equivalents The Company considers cash and cash equivalents to include all cash accounts and short-term investments purchased with an original maturity of three months or less. Accounts Receivable The Company grants credit to substantially all of its customers and carries its accounts receivable at original invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on history of past write-offs, collections, and current credit conditions. The allowance for doubtful accounts amounted to approximately $180,000 at March 31, 2019 and $170,000 at December 31, 2018. The Company does not accrue interest on past due receivables. Revenue Recognition Revenues are recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under-industry-specific guidance. Purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase. Service sales, principally representing repair, are recognized at the time of shipment of goods. The costs incurred for nonrecurring engineering, development and repair activities of our products under agreements with commercial customers are expensed as incurred. Subsequently, the revenue is recognized as products are delivered to the customers with the approval by the customers. Inventories Inventories are stated at the lower of cost or net realizable value. Cost includes all costs incurred to bring each product to its present location and condition. Market provisions in respect of lower of cost or market adjustments and inventory expected to be used in greater than one year are applied to the gross value of the inventory through a reserve of approximately $1,465,000 and $1,543,000 at March 31, 2019 and December 31, 2018, respectively. Pre-production and start-up costs are expensed as incurred. The purchase of suppliers’ minimum economic quantities of material such as steel, etc. may result in a purchase of quantities exceeding one year of customer requirements. Also, in order to maintain a reasonable and/or agreed to lead time, certain larger quantities of other product support items may have to be purchased and may result in over one year’s supply. These amounts are not included in the inventory reserve discussed above. Shipping and Handling Costs Shipping and handling costs are classified as a component of cost of goods sold. Property, Plant and Equipment Property, plant and equipment is carried at cost; expenditures for new facilities and equipment and expenditures which substantially increase the useful lives of existing plant and equipment are capitalized; expenditures for maintenance and repairs are expensed as incurred. Upon disposal of properties, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is included in income. Depreciation is provided on the basis of estimated useful lives of depreciable properties, primarily by the straight-line method for financial statement purposes and by accelerated methods for income tax purposes. Depreciation expense includes the amortization of capital lease assets. The estimated useful lives of depreciable properties are generally as follows: Buildings and improvements 5-40 years Machinery and equipment 5-20 years Tooling 3-5 years Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities, as well as operating loss and credit carryforwards. The Company and its subsidiaries file a consolidated federal income tax return, combined New York and Texas state income tax returns and separate Pennsylvania and Arkansas income tax returns. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at March 31, 2019 or December 31, 2018, and did not recognize any interest and/or penalties in its consolidated statements of income during the three months ended March 31, 2019 and 2018. The Company did not have any material uncertain tax positions or unrecognized tax benefits or obligations as of March 31, 2019 and December 31, 2018. The 2015 through 2017 federal and state tax returns remain subject to examination. Supplemental Cash Flow Information There were no income taxes paid during the three months ended March 31, 2019 and 2018. Interest paid amounted to approximately $ , respectively, during the three months ended March 31, 2019 and 2018. Employee Stock Ownership Plan Contributions to the employee stock ownership plan are determined annually by the Company according to plan formula. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment annually or whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable based on undiscounted future operating cash flow analyses. If an impairment is determined to exist, any related impairment loss is calculated based on fair value. Due to the losses incurred by our CPG segment, we performed a test for recoverability of the long-lived assets by comparing its carrying value to the future undiscounted cash flows that we expect will be generated by the asset group. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. The Company has determined that no impairment of long-lived assets existed at March 31, 2019 and December 31, 2018. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain balances, as previously reported, were reclassified to conform with classifications adopted in the current period. Research and Development Costs Research and development costs are expensed as incurred. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentration of credit risks principally consist of cash accounts in financial institutions. Although the accounts exceed the federally insured deposit amount, management does not anticipate nonperformance by the financial institutions. Fair Value of Financial Instruments The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. Based on variable interest rates and the borrowing rates currently available to the Company for loans similar to its long-term debt, the fair value approximates its carrying amount. Revenue Recognition Revenues are recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under industry-specific guidance. Purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase. Service sales, principally representing repair, are recognized at the time of shipment of goods. The costs incurred for nonrecurring engineering, development and repair activities of our products under agreements with commercial customers are expensed as incurred. Subsequently, the revenue is recognized as products are delivered to the customers with the approval by the customers. Revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods and services to a customer. The Company determines revenue recognition using the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when the company satisfies a performance obligation. Revenue excludes taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (e.g., sales and use taxes). Revenue includes payments for shipping activities that are reimbursed by the customer to the Company. Revenue on a significant portion of our contracts is currently recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under industry-specific guidance. Performance obligations are satisfied as of a point in time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. As a significant portion of the Company’s revenue are recognized at the time of shipment, transfer of title and customer acceptance, there is no significant judgment applied to determine the timing of the satisfaction of performance obligations or transaction price. The timing of satisfaction of our performance obligations does not significantly vary from the typical timing of payment. The Company generally receives payment for these contracts within the payment terms negotiated and agreed upon by each customer contract. Warranty and repair obligations are assessed on all returns. Revenue is not recorded on any warranty returns. The Company warrants its products against design, materials and workmanship based on an average of twenty-seven months. The Company determines warranty reserves needed based on actual average costs of warranty units shipped and current facts and circumstances. As of March 31, 2019 and December 31, 2018 under the guidance of ASC460 the Company has recorded a warranty reserve of approximately $467,000 and $428,000, respectively. This amount is reflected in other accrued expenses in the accompanying balance sheet. Revenue is recognized on repair returns, covered under a customer contract, at the contractual price upon shipment to the customer. Recent Accounting Pronouncements Adopted |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories March 31, December 31, 2019 2018 ($000's omitted) Raw material and common parts $ 9,956 $ 9,088 Work-in-process 5,211 5,123 Finished goods 1,963 2,482 17,130 16,693 Less inventory reserve (1,465 ) (1,543 ) Total inventories $ 15,665 $ 15,150 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 4. Property, Plant and Equipment March 31, December 31, 2019 2018 ($000's ommitted) Land $ 7 $ 7 Buildings 10,515 10,452 Machinery, equipment and tooling 18,802 18,345 Construction in progress (CIP) 1,378 1,258 30,702 30,062 Less accumulated depreciation (18,459 ) (18,187 ) $ 12,243 $ 11,875 Depreciation and amortization expense amounted to approximately $274,000 and $ for the three months ended March 31, 2019 and 2018, respectively. Amortization expense primarily related to capital leases amounted to approximately $20,000 and $17,000 for the three months ended March 31, 2019 and 2018, respectively. The Company maintains property and casualty insurance in amounts adequate for the risk and nature of its assets and operations and which are generally customary in its industry. As of March 31, 2019, there is approximately $1,378,000 ($1,258,000 – December 31, 2018) of construction in progress (CIP) included in property, plant and equipment all of which is related to capital projects. There is approximately $683,000 in CIP for the implementation costs for the enterprise resource planning software that will be used as an integral part of the product process at the Advanced Technology Group (“ATG”) and the Consumer Products Group (“CPG”). In addition, there is approximately $405,000 primarily for IT equipment and software and the remainder of approximately $290,000 for machinery & equipment and self-constructed assets, not yet put into service. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 5. Long-Term Debt March 31, December 31, 2019 2018 ($000's omitted) Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly prinicipal payments of $21,833 through 2021 with a balloon payment of $786,000 due December 1, 2021 $ 1,507 $ 1,572 Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly prinicipal payments of $23,810 through December 1, 2021 786 857 Lease line of credit for equipment; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor 1.822758% - 1.869304% at time of funding), monthly principle payments of $12,675 through April 10, 2023 659 704 2,952 3,133 Less current portion (723 ) (723 ) $ 2,229 $ 2,410 Principal maturities of long-term debt are as follows: remainder 2019 - $542,000, 2020 - $723,000, 2021 - $1,509,000, 2022 - $165,000, and 2023 - $13,000. The term loans are secured by all personal property of the Company with the exception of certain equipment that was purchased from proceeds of government grants. Certain lenders require the Company to comply with debt covenants as described in the specific loan documents, including a debt service ratio. At March 31, 2019 and December 31, 2018 the Company was in compliance with these covenants. The Company established a lease line of credit for equipment financing in the amount of $1,000,000 available until June 28, 2019. This line is non-revolving and non-renewable. The lease term for equipment covered by the lease line of credit is 60 months. Monthly payments will be fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. There was approximately $659,000 outstanding at March 31, 2019. March 31, December 31, 2019 2018 ($000's omitted) 2019 145 193 2020 193 193 2021 193 193 2022 193 193 2023 4 4 Total principal and interest payments 728 776 Less amount representing interest (69 ) (72 ) Present value of net minimum lease payments 659 704 Less current portion (175 ) (175 ) Long term principle payments $ 484 $ 529 The Company established equipment financing in the amount of $2,500,000 available until November 30, 2019. This line is non-revolving and non-renewable. The financing term for the equipment covered by the loan is 60 months. Monthly payments will be fixed for the term of each funding based upon the Lender’s rate in effect at the time of such funding. There was no balance outstanding at March 31, 2019 and December 31, 2018. The Company has a $2,000,000 line of credit on which there was no balance outstanding at March 31, 2019 and December 31, 2018. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | 6. Shareholders’ Equity Common Stock ($000's omitted except for share data) Accumulated Number Capital in Other Total of shares excess of Retained Treasury Comprehensive shareholders' issued Amount par value earnings ESOT stock Loss equity Balance at December 31, 2018 2,614,506 $ 523 $ 14,250 $ 18,788 $ (561 ) $ (1,522 ) $ 35 $ 31,513 Net income - - - 98 - - - 98 Purchase of treasury shares - - - - - (128 ) (128 ) Stock based compensation net of tax benefit - - 14 - - 44 - 58 Balance at March 31, 2019 2,614,506 $ 523 $ 14,264 $ 18,886 $ (561 ) $ (1,606 ) $ 35 $ 31,541 Common Stock ($000's omitted except for share data) Accumulated Number Capital in Other Total of shares excess of Retained Treasury Comprehensive shareholders' issued Amount par value earnings ESOT stock Loss equity Balance at December 31, 2017 2,614,506 $ 523 $ 14,171 $ 15,709 $ (662 ) $ (1,544 ) $ (32 ) $ 28,165 Net income - - - 331 - - - 331 Purchase of treasury shares - - - - - (117 ) - (117 ) Balance at March 31, 2018 2,614,506 $ 523 $ 14,171 $ 16,040 $ (662 ) $ (1,661 ) $ (32 ) $ 28,379 The Company’s Board of Directors authorized the purchase of up to 450,000 shares of its common stock in the open market or in privately negotiated transactions. As of March 31, 2019, the Company has purchased 357,423 shares and there remains 92,577 shares available to purchase under this program. There were 2,400 shares purchased by the Company during the three month period ended March 31, 2019. On January 1, 2019, 26,250 shares of restricted stock vested of which shares were withheld by the Company for approximately $99,000 to satisfy statutory minimum withholding tax requirements for those participants who elected this option as permitted under the Company’s 2012 Long-Term Incentive Plan. On May 25, 2018, the Company issued 78,750 shares of restricted stock to Executive Officers and certain key management of the Company under the Company’s 2012 Long-Term Incentive Plan. The restricted share awards have varying vesting periods between January 2019 and January 2021; however, these shares have voting rights and accrue dividends prior to vesting. The accrued dividends are paid upon vesting of the restricted shares. The aggregate amount of expense to the Company, measured based on grant date fair value is expected to be approximately $735,000 and will be recognized over the requisite service period. On May 25, 2018, the Company revised its director compensation policy pursuant to which non-employee directors receive a portion of their annual retainer in the form of restricted stock under the Company’s 2012 Long-Term Incentive Plan. An aggregate of 4,288 restricted shares were issued that vest quarterly over a twelve month service period. These shares have voting rights and accrue dividends that are paid upon vesting. The aggregate amount of expense for awards granted in 2018 was $40,000 and was recognized over the service period. On April 26, 2019, the Company increased its director compensation policy pursuant to which non-employee directors receive a portion of their annual retainer in the form of restricted stock from $10,000 to $25,000 under the Company’s 2012 Long-Term Incentive Plan. An aggregate of 7,836 restricted shares were issued that vest quarterly over a twelve month service period. These shares have voting rights and accrue dividends that are paid upon vesting. The aggregate amount of expense to the Company, measured based on the grant date fair value is expected to be approximately $100,000 and will be recognized over the requisite service period. Earnings Per Share Basic earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding during the period. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding during the period plus the number of shares of common stock that would be issued assuming all contingently issuable shares having a dilutive effect on the earnings per share that were outstanding for the period. Incremental shares from assumed conversions are calculated as the number of shares that would be issued, net of the number of shares that could be purchased in the marketplace with the cash received upon stock option exercise. The dilutive effect of unvested restrictive stock is determined using the treasury stock method. Three Months Ended March 31, 2019 2018 ($000's omitted except per share data) Net Income $ 98 $ 331 Weighted average common shares outstanding (basic) 2,328 2,297 Unvested restricted stock 53 - Weighted average common shares outstanding (diluted) 2,381 2,297 Basic Net income per share $ 0.04 $ 0.14 Diluted Net income per share $ 0.04 $ 0.14 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Post retirement obligation. Employment Agreements. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2019 | |
Litigation [Abstract] | |
Litigation | 8. Litigation Litigation. There are no other legal proceedings currently pending by or against the Company other than litigation incidental to the business which is not expected to have a material adverse effect on the business or earnings of the Company. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions The Company paid legal fees and disbursements of approximately $19,000 and $47,000 in the three month periods ended March 31, 2019 and 2018, respectively, for services provided by a law firm that is owned by a member of the Company’s Board of Directors. Additionally, the Company did not have any unpaid legal expenses for this law firm as of March 31, 2019 and had approximately $40,000 accrued at March 31, 2018. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Business Segments | 10. Business Segments The Company operates in two business segments, ATG and CPG. The Company’s reportable segments are strategic business units that offer different products and services. The segments are comprised of separate corporations and are managed separately. Operations in ATG primarily involve the design, manufacture, and marketing of servo-control components (i.e., torque motors, control valves, actuators, etc.) for government, commercial and industrial applications. CPG’s operations involve the design, manufacture and marketing of a variety of cutlery products for use by consumers and government agencies. The Company derives its primary sales revenue from domestic customers, although a portion of finished products are for foreign end use. As of March 31, 2019, the Company had identifiable assets of approximately $42,651,000 ($41,685,000 – December 31, 2018) of which approximately $32,580,000 ($31,639,000 – December 31, 2018) was for ATG and approximately $10,071,000 ($10,046,000 – December 31, 2018) was for CPG. Information regarding the Company’s operations in these segments is summarized as follows: ($000's omitted except per share data) ATG CPG Consolidated Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, 2019 2018 2019 2018 2019 2018 Revenues from unaffiliated customers $ 10,595 $ 9,115 $ 1,408 $ 1,444 $ 12,003 $ 10,559 Cost of goods sold, inclusive of depreciation (8,467 ) (7,084 ) (1,463 ) (1,426 ) (9,930 ) $ (8,510 ) Gross margin (loss) 2,128 2,031 (55 ) 18 2,073 2,049 Gross margin % 20.1 % 22.3 % -3.9 % 1.2 % 17.3 % 19.4 % Selling, general and administrative (1,280 ) (1,228 ) (647 ) (399 ) (1,927 ) (1,627 ) Interest (19 ) (17 ) (8 ) (8 ) (27 ) (25 ) Total costs and expenses (9,766 ) (8,329 ) (2,118 ) (1,833 ) (11,884 ) (10,162 ) Income/(loss) before income tax provision 829 786 (710 ) (389 ) 119 397 Income tax provision (benefit) 145 130 (124 ) (64 ) 21 66 Net income/(loss) $ 684 $ 656 $ (586 ) $ (325 ) $ 98 $ 331 Capital expenditures $ 599 $ 405 $ 43 $ 106 $ 642 $ 511 |
Business Description and Summ_2
Business Description and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Servotronics, Inc. and its wholly-owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated upon consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash and cash equivalents to include all cash accounts and short-term investments purchased with an original maturity of three months or less. |
Accounts Receivable | Accounts Receivable The Company grants credit to substantially all of its customers and carries its accounts receivable at original invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on history of past write-offs, collections, and current credit conditions. The allowance for doubtful accounts amounted to approximately $180,000 at March 31, 2019 and $170,000 at December 31, 2018. The Company does not accrue interest on past due receivables. |
Revenue Recognition | Revenue Recognition Revenues are recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under-industry-specific guidance. Purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase. Service sales, principally representing repair, are recognized at the time of shipment of goods. The costs incurred for nonrecurring engineering, development and repair activities of our products under agreements with commercial customers are expensed as incurred. Subsequently, the revenue is recognized as products are delivered to the customers with the approval by the customers. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost includes all costs incurred to bring each product to its present location and condition. Market provisions in respect of lower of cost or market adjustments and inventory expected to be used in greater than one year are applied to the gross value of the inventory through a reserve of approximately $1,465,000 and $1,543,000 at March 31, 2019 and December 31, 2018, respectively. Pre-production and start-up costs are expensed as incurred. The purchase of suppliers’ minimum economic quantities of material such as steel, etc. may result in a purchase of quantities exceeding one year of customer requirements. Also, in order to maintain a reasonable and/or agreed to lead time, certain larger quantities of other product support items may have to be purchased and may result in over one year’s supply. These amounts are not included in the inventory reserve discussed above. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are classified as a component of cost of goods sold. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is carried at cost; expenditures for new facilities and equipment and expenditures which substantially increase the useful lives of existing plant and equipment are capitalized; expenditures for maintenance and repairs are expensed as incurred. Upon disposal of properties, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is included in income. Depreciation is provided on the basis of estimated useful lives of depreciable properties, primarily by the straight-line method for financial statement purposes and by accelerated methods for income tax purposes. Depreciation expense includes the amortization of capital lease assets. The estimated useful lives of depreciable properties are generally as follows: Buildings and improvements 5-40 years Machinery and equipment 5-20 years Tooling 3-5 years |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities, as well as operating loss and credit carryforwards. The Company and its subsidiaries file a consolidated federal income tax return, combined New York and Texas state income tax returns and separate Pennsylvania and Arkansas income tax returns. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at March 31, 2019 or December 31, 2018, and did not recognize any interest and/or penalties in its consolidated statements of income during the three months ended March 31, 2019 and 2018. The Company did not have any material uncertain tax positions or unrecognized tax benefits or obligations as of March 31, 2019 and December 31, 2018. The 2015 through 2017 federal and state tax returns remain subject to examination. |
Supplemental Cash Flow Information | Supplemental Cash Flow Information There were no income taxes paid during the three months ended March 31, 2019 and 2018. Interest paid amounted to approximately $ , respectively, during the three months ended March 31, 2019 and 2018. |
Employee Stock Ownership Plan | Employee Stock Ownership Plan Contributions to the employee stock ownership plan are determined annually by the Company according to plan formula. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment annually or whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable based on undiscounted future operating cash flow analyses. If an impairment is determined to exist, any related impairment loss is calculated based on fair value. Due to the losses incurred by our CPG segment, we performed a test for recoverability of the long-lived assets by comparing its carrying value to the future undiscounted cash flows that we expect will be generated by the asset group. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. The Company has determined that no impairment of long-lived assets existed at March 31, 2019 and December 31, 2018. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain balances, as previously reported, were reclassified to conform with classifications adopted in the current period. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. |
Concentration of Credit Risks | Concentration of Credit Risks Financial instruments that potentially subject the Company to concentration of credit risks principally consist of cash accounts in financial institutions. Although the accounts exceed the federally insured deposit amount, management does not anticipate nonperformance by the financial institutions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. Based on variable interest rates and the borrowing rates currently available to the Company for loans similar to its long-term debt, the fair value approximates its carrying amount. |
Revenue Recognition | Revenue Recognition Revenues are recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under industry-specific guidance. Purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase. Service sales, principally representing repair, are recognized at the time of shipment of goods. The costs incurred for nonrecurring engineering, development and repair activities of our products under agreements with commercial customers are expensed as incurred. Subsequently, the revenue is recognized as products are delivered to the customers with the approval by the customers. Revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods and services to a customer. The Company determines revenue recognition using the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when the company satisfies a performance obligation. Revenue excludes taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (e.g., sales and use taxes). Revenue includes payments for shipping activities that are reimbursed by the customer to the Company. Revenue on a significant portion of our contracts is currently recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under industry-specific guidance. Performance obligations are satisfied as of a point in time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. As a significant portion of the Company’s revenue are recognized at the time of shipment, transfer of title and customer acceptance, there is no significant judgment applied to determine the timing of the satisfaction of performance obligations or transaction price. The timing of satisfaction of our performance obligations does not significantly vary from the typical timing of payment. The Company generally receives payment for these contracts within the payment terms negotiated and agreed upon by each customer contract. Warranty and repair obligations are assessed on all returns. Revenue is not recorded on any warranty returns. The Company warrants its products against design, materials and workmanship based on an average of twenty-seven months. The Company determines warranty reserves needed based on actual average costs of warranty units shipped and current facts and circumstances. As of March 31, 2019 and December 31, 2018 under the guidance of ASC460 the Company has recorded a warranty reserve of approximately $467,000 and $428,000, respectively. This amount is reflected in other accrued expenses in the accompanying balance sheet. Revenue is recognized on repair returns, covered under a customer contract, at the contractual price upon shipment to the customer. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted |
Business Description and Summ_3
Business Description and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of property, plant and equipment | Buildings and improvements 5-40 years Machinery and equipment 5-20 years Tooling 3-5 years |
Inventories (Table)
Inventories (Table) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | March 31, December 31, 2019 2018 ($000's omitted) Raw material and common parts $ 9,956 $ 9,088 Work-in-process 5,211 5,123 Finished goods 1,963 2,482 17,130 16,693 Less inventory reserve (1,465 ) (1,543 ) Total inventories $ 15,665 $ 15,150 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | March 31, December 31, 2019 2018 ($000's ommitted) Land $ 7 $ 7 Buildings 10,515 10,452 Machinery, equipment and tooling 18,802 18,345 Construction in progress (CIP) 1,378 1,258 30,702 30,062 Less accumulated depreciation (18,459 ) (18,187 ) $ 12,243 $ 11,875 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | March 31, December 31, 2019 2018 ($000's omitted) Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly prinicipal payments of $21,833 through 2021 with a balloon payment of $786,000 due December 1, 2021 $ 1,507 $ 1,572 Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly prinicipal payments of $23,810 through December 1, 2021 786 857 Lease line of credit for equipment; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor 1.822758% - 1.869304% at time of funding), monthly principle payments of $12,675 through April 10, 2023 659 704 2,952 3,133 Less current portion (723 ) (723 ) $ 2,229 $ 2,410 |
schedule of payments for capital lease obligations | March 31, December 31, 2019 2018 ($000's omitted) 2019 145 193 2020 193 193 2021 193 193 2022 193 193 2023 4 4 Total principal and interest payments 728 776 Less amount representing interest (69 ) (72 ) Present value of net minimum lease payments 659 704 Less current portion (175 ) (175 ) Long term principle payments $ 484 $ 529 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of stockholders equity | Common Stock ($000's omitted except for share data) Accumulated Number Capital in Other Total of shares excess of Retained Treasury Comprehensive shareholders' issued Amount par value earnings ESOT stock Loss equity Balance at December 31, 2018 2,614,506 $ 523 $ 14,250 $ 18,788 $ (561 ) $ (1,522 ) $ 35 $ 31,513 Net income - - - 98 - - - 98 Purchase of treasury shares - - - - - (128 ) (128 ) Stock based compensation net of tax benefit - - 14 - - 44 - 58 Balance at March 31, 2019 2,614,506 $ 523 $ 14,264 $ 18,886 $ (561 ) $ (1,606 ) $ 35 $ 31,541 Common Stock ($000's omitted except for share data) Accumulated Number Capital in Other Total of shares excess of Retained Treasury Comprehensive shareholders' issued Amount par value earnings ESOT stock Loss equity Balance at December 31, 2017 2,614,506 $ 523 $ 14,171 $ 15,709 $ (662 ) $ (1,544 ) $ (32 ) $ 28,165 Net income - - - 331 - - - 331 Purchase of treasury shares - - - - - (117 ) - (117 ) Balance at March 31, 2018 2,614,506 $ 523 $ 14,171 $ 16,040 $ (662 ) $ (1,661 ) $ (32 ) $ 28,379 |
Schedule of earnings per share | Three Months Ended March 31, 2019 2018 ($000's omitted except per share data) Net Income $ 98 $ 331 Weighted average common shares outstanding (basic) 2,328 2,297 Unvested restricted stock 53 - Weighted average common shares outstanding (diluted) 2,381 2,297 Basic Net income per share $ 0.04 $ 0.14 Diluted Net income per share $ 0.04 $ 0.14 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of information regarding operations in business segment | ($000's omitted except per share data) ATG CPG Consolidated Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, 2019 2018 2019 2018 2019 2018 Revenues from unaffiliated customers $ 10,595 $ 9,115 $ 1,408 $ 1,444 $ 12,003 $ 10,559 Cost of goods sold, inclusive of depreciation (8,467 ) (7,084 ) (1,463 ) (1,426 ) (9,930 ) $ (8,510 ) Gross margin (loss) 2,128 2,031 (55 ) 18 2,073 2,049 Gross margin % 20.1 % 22.3 % -3.9 % 1.2 % 17.3 % 19.4 % Selling, general and administrative (1,280 ) (1,228 ) (647 ) (399 ) (1,927 ) (1,627 ) Interest (19 ) (17 ) (8 ) (8 ) (27 ) (25 ) Total costs and expenses (9,766 ) (8,329 ) (2,118 ) (1,833 ) (11,884 ) (10,162 ) Income/(loss) before income tax provision 829 786 (710 ) (389 ) 119 397 Income tax provision (benefit) 145 130 (124 ) (64 ) 21 66 Net income/(loss) $ 684 $ 656 $ (586 ) $ (325 ) $ 98 $ 331 Capital expenditures $ 599 $ 405 $ 43 $ 106 $ 642 $ 511 |
Business Description and Summ_4
Business Description and Summary of Significant Accounting Policies - Estimated useful lives of depreciable properties (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of depreciable properties | 5 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of depreciable properties | 40 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of depreciable properties | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of depreciable properties | 20 years |
Tooling | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of depreciable properties | 3 years |
Tooling | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of depreciable properties | 5 years |
Business Description and Summ_5
Business Description and Summary of Significant Accounting Policies (Detail Textuals) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Allowance for doubtful accounts | $ 180,000 | $ 170,000 | |
Inventory reserve | 1,465,000 | 1,543,000 | |
Interest paid | 27,000 | $ 25,000 | |
Warranty reserve | $ 467,000 | $ 428,000 | |
Accounting standards update 2016-02 (Topic 842) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Description of one lease of equipment at annual payment | Company has one lease of equipment at an annual payment of less than $2,000 | ||
Threshold limit of annual payment of one lease equipment | $ 2,000 |
Inventories - Summary of invent
Inventories - Summary of inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw material and common parts | $ 9,956 | $ 9,088 |
Work-in-process | 5,211 | 5,123 |
Finished goods | 1,963 | 2,482 |
Inventory, Gross | 17,130 | 16,693 |
Less inventory reserve | (1,465) | (1,543) |
Total inventories | $ 15,665 | $ 15,150 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of property, plant and equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | $ 30,702 | $ 30,062 |
Less accumulated depreciation and amortization | (18,459) | (18,187) |
Total property, plant and equipment | 12,243 | 11,875 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 7 | 7 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 10,515 | 10,452 |
Machinery, equipment and tooling | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 18,802 | 18,345 |
Construction in progress (CIP) | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | $ 1,378 | $ 1,258 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Detail Textuals) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 274,000 | $ 244,000 | |
Amortization | 20,000 | $ 17,000 | |
Property, plant and equipment, Gross | 30,702,000 | $ 30,062,000 | |
Advanced Technology Group ("ATG") and the Consumer Products Group ("CPG") | |||
Property, Plant and Equipment [Line Items] | |||
Construction in progress | 1,378,000 | $ 1,258,000 | |
Advanced Technology Group ("ATG") and the Consumer Products Group ("CPG") | Construction in progress (CIP) implementation costs | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, Gross | 683,000 | ||
Advanced Technology Group ("ATG") and the Consumer Products Group ("CPG") | Construction in progress (CIP) IT equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, Gross | 405,000 | ||
Advanced Technology Group ("ATG") and the Consumer Products Group ("CPG") | Construction in progress (CIP) machinery & equipment and self-constructed assets | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, Gross | $ 290,000 |
Long-Term Debt - Summary of lon
Long-Term Debt - Summary of long term debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,952 | $ 3,133 |
Less current portion | (723) | (723) |
Long-term debt, Noncurrent | 2,229 | 2,410 |
Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly principal payments of $21,833 through 2021 with a balloon payment of $786,000 due December 1, 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,507 | 1,572 |
Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly principal payments of $23,810 through December 1, 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 786 | 857 |
Lease line of credit for equipment; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor 1.822758% - 1.869304% at time of funding), monthly principle payments of $12,675 through April 10, 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 659 | $ 704 |
Long-Term Debt - Summary of l_2
Long-Term Debt - Summary of long term debt (Parentheticals) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly principal payments of $21,833 through 2021 with a balloon payment of $786,000 due December 1, 2021 | |
Debt Instrument [Line Items] | |
Description of rate basis | Libor |
Percentage of floating interest rate payable | 1.40% |
Percentage of fixed interest rate payable | 3.909% |
Frequency of principal payments | Monthly |
Monthly principal payments | $ 21,833 |
Balloon payment due December 1, 2021 | $ 786,000 |
Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly principal payments of $23,810 through December 1, 2021 | |
Debt Instrument [Line Items] | |
Description of rate basis | Libor |
Percentage of floating interest rate payable | 1.40% |
Percentage of fixed interest rate payable | 3.909% |
Frequency of principal payments | Monthly |
Monthly principal payments | $ 23,810 |
Lease line of credit for equipment; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor 1.822758% - 1.869304% at time of funding), monthly principle payments of $12,675 through April 10, 2023 | |
Debt Instrument [Line Items] | |
Description of rate basis | Interest rate/factor |
Frequency of principal payments | Monthly |
Monthly principal payments | $ 12,675 |
Lease line of credit for equipment; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor 1.822758% - 1.869304% at time of funding), monthly principle payments of $12,675 through April 10, 2023 | Minimum | |
Debt Instrument [Line Items] | |
Percentage of floating interest rate payable | 1.82276% |
Lease line of credit for equipment; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor 1.822758% - 1.869304% at time of funding), monthly principle payments of $12,675 through April 10, 2023 | Maximum | |
Debt Instrument [Line Items] | |
Percentage of floating interest rate payable | 1.8693% |
Long-Term Debt (Details 1)
Long-Term Debt (Details 1) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
2019 | $ 145 | $ 193 |
2020 | 193 | 193 |
2021 | 193 | 193 |
2022 | 193 | 193 |
2023 | 4 | 4 |
Total principal and interest payments | 728 | 776 |
Less amount representing interest | (69) | (72) |
Present value of net minimum lease payments | 659 | 704 |
Less current portion | (175) | (175) |
Long term principle payments | $ 484 | $ 529 |
Long-Term Debt (Detail Textuals
Long-Term Debt (Detail Textuals) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Debt Disclosure [Abstract] | |
Principal maturities of long-term debt for 2019 | $ 542,000 |
Principal maturities of long-term debt for 2020 | 723,000 |
Principal maturities of long-term debt for 2021 | 1,509,000 |
Principal maturities of long-term debt for 2022 | 165,000 |
Principal maturities of long-term debt for 2023 | 13,000 |
Lease line of credit | $ 1,000,000 |
Lease term for equipment covered by lease line of credit | 60 months |
Leases line of credit outstanding | $ 659,000 |
Loan line of credit | $ 2,500,000 |
Loan term for equipment covered by loan | 60 months |
Line of credit | $ 2,000,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of common shareholders' equity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | $ 31,513 | $ 28,165 |
Balance (shares) | 2,614,506 | |
Net income | $ 98 | 331 |
Purchase of treasury shares | (128) | (117) |
Stock based compensation, net of tax benefit | 58 | |
Balance | $ 31,541 | 28,379 |
Balance (shares) | 2,614,506 | |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | $ 523 | $ 523 |
Balance (shares) | 2,614,506 | 2,614,506 |
Net income | $ 0 | $ 0 |
Purchase of treasury shares | 0 | 0 |
Stock based compensation, net of tax benefit | 0 | |
Balance | $ 523 | $ 523 |
Balance (shares) | 2,614,506 | 2,614,506 |
Capital in excess of par value | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | $ 14,250 | $ 14,171 |
Net income | 0 | 0 |
Purchase of treasury shares | 0 | 0 |
Stock based compensation, net of tax benefit | 14 | |
Balance | 14,264 | 14,171 |
Retained earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | 18,788 | 15,709 |
Net income | 98 | 331 |
Purchase of treasury shares | 0 | 0 |
Stock based compensation, net of tax benefit | 0 | |
Balance | 18,886 | 16,040 |
ESOT | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | (561) | (662) |
Net income | 0 | 0 |
Purchase of treasury shares | 0 | 0 |
Stock based compensation, net of tax benefit | 0 | |
Balance | (561) | (662) |
Treasury stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | (1,522) | (1,544) |
Net income | 0 | 0 |
Purchase of treasury shares | (128) | (117) |
Stock based compensation, net of tax benefit | 44 | |
Balance | (1,606) | (1,661) |
Accumulated Other Comprehensive Income (Loss) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | 35 | (32) |
Net income | 0 | 0 |
Purchase of treasury shares | 0 | 0 |
Stock based compensation, net of tax benefit | 0 | |
Balance | $ 35 | $ (32) |
Shareholders' Equity - Calculat
Shareholders' Equity - Calculation of earning per share (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity [Abstract] | ||
Net Income | $ 98 | $ 331 |
Weighted average common shares outstanding (basic) (in shares) | 2,328 | 2,297 |
Unvested restricted stock (in shares) | 53 | 0 |
Weighted average common shares outstanding (diluted) (in shares) | 2,381 | 2,297 |
Basic | ||
Net income per share (in dollars per share) | $ 0.04 | $ 0.14 |
Diluted | ||
Net income per share (in dollars per share) | $ 0.04 | $ 0.14 |
Shareholders' Equity (Detail Te
Shareholders' Equity (Detail Textuals) | 3 Months Ended |
Mar. 31, 2019shares | |
Equity, Class of Treasury Stock [Line Items] | |
Shares purchased during period | 2,400 |
Share Repurchase Program | |
Equity, Class of Treasury Stock [Line Items] | |
Number of common shares authorized to be purchased | 450,000 |
Shares purchased during period | 357,423 |
Remaining number of shares authorized to be purchased | 92,577 |
Shareholders' Equity (Detail _2
Shareholders' Equity (Detail Textuals 1) - 2012 Long-Term Incentive Plan - USD ($) | 1 Months Ended | ||
Apr. 26, 2019 | Jan. 31, 2019 | May 25, 2018 | |
Executive Officers | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Number of restricted stock issued | 78,750 | ||
Compensation expense not yet recognized | $ 735,000 | ||
Number of restricted stock shares vested | 26,250 | ||
Number of shares withheld and repurchased | 9,729 | ||
Value of shares withheld and repurchased | $ 99,000 | ||
Non-employee directors | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Number of restricted stock issued | 4,288 | ||
Compensation expense not yet recognized | $ 40,000 | ||
Service period | 12 months | ||
Non-employee directors | Subsequent Event | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Number of restricted stock issued | 7,836 | ||
Annual retainer | $ 10,000 | ||
Increase annual retainer | 25,000 | ||
Compensation expense not yet recognized | $ 100,000 | ||
Service period | 12 months |
Commitments and Contingencies (
Commitments and Contingencies (Detail Textuals) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | ||
Post retirement obligation | $ 1,115,000 | $ 1,115,000 |
Arbitration-related expense | 367,000 | |
Legal fees pursuant to arbitration award | 304,000 | |
Health Related Costs pursuant to arbitration award | 54,000 | |
Interest costs pursuant to arbitration award | 9,000 | |
Employment Agreement | Kenneth Trbovich | ||
Loss Contingencies [Line Items] | ||
Post retirement obligation | $ 669,000 | $ 644,000 |
Minimum age limit | 65 years |
Litigation (Detail Textuals)
Litigation (Detail Textuals) - Aero, Inc. | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Litigation [Line Items] | |
Amount of alleged damages | $ 3,000,000 |
Amount of counter claim | $ 3,191,000 |
Related Party Transactions (Det
Related Party Transactions (Detail Textuals) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Legal fees and disbursements | $ 19,000 | $ 47,000 |
Accrued additional legal fees | $ 40,000 |
Business Segments - Summary of
Business Segments - Summary of company's operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenues from unaffiliated customers | $ 12,003 | $ 10,559 |
Cost of goods sold, inclusive of depreciation | (9,930) | (8,510) |
Gross margin (loss) | 2,073 | 2,049 |
Selling, general and administrative | (1,927) | (1,627) |
Interest | (27) | (25) |
Total costs and expenses | (1,954) | (1,652) |
Income/(loss) before income tax provision | 119 | 397 |
Income tax provision (benefit) | 21 | 66 |
Net income/(loss) | 98 | 331 |
Capital expenditures | 642 | 511 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues from unaffiliated customers | 12,003 | 10,559 |
Cost of goods sold, inclusive of depreciation | (9,930) | (8,510) |
Gross margin (loss) | $ 2,073 | $ 2,049 |
Gross margin % | 17.30% | 19.40% |
Selling, general and administrative | $ (1,927) | $ (1,627) |
Interest | (27) | (25) |
Total costs and expenses | (11,884) | (10,162) |
Income/(loss) before income tax provision | 119 | 397 |
Income tax provision (benefit) | 21 | 66 |
Net income/(loss) | 98 | 331 |
Capital expenditures | 642 | 511 |
Operating Segments | ATG | ||
Segment Reporting Information [Line Items] | ||
Revenues from unaffiliated customers | 10,595 | 9,115 |
Cost of goods sold, inclusive of depreciation | (8,467) | (7,084) |
Gross margin (loss) | $ 2,128 | $ 2,031 |
Gross margin % | 20.10% | 22.30% |
Selling, general and administrative | $ (1,280) | $ (1,228) |
Interest | (19) | (17) |
Total costs and expenses | (9,766) | (8,329) |
Income/(loss) before income tax provision | 829 | 786 |
Income tax provision (benefit) | 145 | 130 |
Net income/(loss) | 684 | 656 |
Capital expenditures | 599 | 405 |
Operating Segments | CPG | ||
Segment Reporting Information [Line Items] | ||
Revenues from unaffiliated customers | 1,408 | 1,444 |
Cost of goods sold, inclusive of depreciation | (1,463) | (1,426) |
Gross margin (loss) | $ (55) | $ 18 |
Gross margin % | (3.90%) | 1.20% |
Selling, general and administrative | $ (647) | $ (399) |
Interest | (8) | (8) |
Total costs and expenses | (2,118) | (1,833) |
Income/(loss) before income tax provision | (710) | (389) |
Income tax provision (benefit) | (124) | (64) |
Net income/(loss) | (586) | (325) |
Capital expenditures | $ 43 | $ 106 |
Business Segments (Detail Textu
Business Segments (Detail Textuals) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($)Segment | |
Segment Reporting Information [Line Items] | ||
Total identifiable assets | $ 42,651,000 | $ 41,685,000 |
Number of operating segments | Segment | 2 | 2 |
Operating Segments | ATG | ||
Segment Reporting Information [Line Items] | ||
Total identifiable assets | $ 32,580,000 | $ 31,639,000 |
Operating Segments | CPG | ||
Segment Reporting Information [Line Items] | ||
Total identifiable assets | $ 10,071,000 | $ 10,046,000 |