Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 29, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 1-07109 | ||
Entity Registrant Name | SERVOTRONICS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 16-0837866 | ||
Entity Address, Address Line One | 1110 Maple Street | ||
Entity Address, City or Town | Elma | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 14059 - 9573 | ||
City Area Code | 716 | ||
Local Phone Number | 655-5990 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | SVT | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 29,511,666 | ||
Entity Common Stock, Shares Outstanding | 2,543,313 | ||
Entity Central Index Key | 0000089140 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Auditor Name | Freed Maxick CPAs, P.C. | ||
Auditor Firm ID | 317 | ||
Auditor Location | Buffalo, New York |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 95,000 | $ 3,812,000 |
Cash, restricted | 150,000 | 0 |
Accounts receivable, net | 12,065,000 | 8,453,000 |
Inventories, net | 14,198,000 | 14,286,000 |
Prepaid and other current assets | 1,507,000 | 615,000 |
Assets related to discontinued operation | 1,552,000 | 6,112,000 |
Total current assets | 29,567,000 | 33,278,000 |
Property, plant and equipment, net | 6,978,000 | 7,355,000 |
Deferred income taxes, net | 1,048,000 | |
Other non-current assets | 42,000 | 173,000 |
Noncurrent assets related to discontinued operation | 3,440,000 | |
Total Assets | 36,587,000 | 45,294,000 |
Current liabilities: | ||
Line of credit | 2,103,000 | |
Current portion of equipment financing and capital leases | 501,000 | |
Current portion of postretirement obligation | 97,000 | 87,000 |
Accounts payable | 2,061,000 | 1,840,000 |
Accrued employee compensation and benefits costs | 1,003,000 | 1,057,000 |
Accrued warranty | 542,000 | 581,000 |
Other accrued liabilities | 1,909,000 | 396,000 |
Liabilites related to discontinued operation | 213,000 | 1,745,000 |
Total current liabilities | 7,928,000 | 6,207,000 |
Post retirement obligation | 4,165,000 | 3,975,000 |
Shareholders' equity: | ||
Common stock, par value $0.20; authorized 4,000,000 shares; issued 2,629,052 shares; outstanding 2,514,775 (2,483,318 - 2022) shares | 525,000 | 523,000 |
Capital in excess of par value | 14,617,000 | 14,556,000 |
Retained earnings | 12,954,000 | 23,741,000 |
Accumulated other comprehensive loss | (2,389,000) | (2,337,000) |
Employee stock ownership trust commitment | (56,000) | (157,000) |
Treasury stock, at cost 87,525 (104,464 - 2022) shares | (1,157,000) | (1,214,000) |
Total shareholders' equity | 24,494,000 | 35,112,000 |
Total Liabilities and Shareholders' Equity | $ 36,587,000 | $ 45,294,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
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 | 2,629,052 | 2,629,052 |
Common stock, shares outstanding | 2,514,775 | 2,483,318 |
Treasury stock, shares | 87,525 | 104,464 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 43,629 | $ 35,185 |
Costs and expenses: | ||
Costs of goods sold, inclusive of depreciation and amortization | 35,824 | 29,616 |
Gross profit | 7,805 | 5,569 |
Operating expenses: | ||
Selling, general and administrative | 9,918 | 8,067 |
Operating loss | (2,113) | (2,498) |
Other (expense)/income: | ||
Interest expense, net | (336) | (203) |
Gain on sale of equipment | 36 | |
Total other (expense)/income, net | (336) | (167) |
Loss from continuing operations before income taxes | (2,449) | (2,665) |
Income tax (expense)/benefit | 1,098 | (565) |
Loss from continuing operations, net of tax | (3,547) | (2,100) |
Loss from discontinued operation before income taxes | (7,240) | (22) |
Income tax (expense)/benefit | 5 | |
Loss from discontinued operation, net of tax (see Note 2) | (7,240) | (17) |
Net loss | $ (10,787) | $ (2,117) |
Basic | ||
Continuing operations | $ (1.44) | $ (0.87) |
Discontinued operation | (2.93) | (0.01) |
Net loss per share | (4.37) | (0.88) |
Diluted | ||
Continuing operations | (1.44) | (0.87) |
Discontinued operation | (2.93) | (0.01) |
Net loss per share | $ (4.37) | $ (0.88) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net loss | $ (10,787) | $ (2,117) |
Other comprehensive income items: | ||
Actuarial (losses)/gains | (153) | 1,838 |
Income tax benefit/(expense) on actuarial losses | 32 | (386) |
Reclassification adjustment for amortization of net actuarial losses | 87 | 151 |
Income tax (expense)/benefit on reclassification adjustment | (18) | (32) |
Other comprehensive income: | ||
Retirement benefits adjustments, net of income taxes | (52) | 1,571 |
Total comprehensive loss | $ (10,839) | $ (546) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows related to operating activities: | ||
Loss from continuing operations | $ (3,547,000) | $ (2,100,000) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 1,083,000 | 951,000 |
Stock based compensation | 120,000 | 191,000 |
Increase (decrease) in allowance for credit losses | 5,000 | (8,000) |
Decrease in inventory reserve | (15,000) | (28,000) |
(Decrease) increase in warranty reserve | (39,000) | 70,000 |
Deferred income taxes | 1,072,000 | (589,000) |
Gain on sale of equipment | (36,000) | |
Change in assets and liabilities: | ||
Accounts receivable | (3,617,000) | (2,239,000) |
Inventories | 103,000 | 1,411,000 |
Prepaid and other current assets | (909,000) | 741,000 |
Accounts payable | 221,000 | 1,410,000 |
Accrued employee compensation and benefit costs | (54,000) | (473,000) |
Post retirement obligations | 148,000 | 186,000 |
Employee stock ownership trust commitment | 101,000 | 101,000 |
Other accrued liabilities | 1,513,000 | 61,000 |
Net cash used in operating activities from continuing operations | (3,815,000) | (351,000) |
Cash flows related to investing activities: | ||
Capital expenditures - property, plant and equipment | (689,000) | (1,234,000) |
Proceeds from sale of assets | 38,000 | |
Net cash used in investing activities from continuing operations | (689,000) | (1,196,000) |
Cash flows related to financing activities: | ||
Advances on line of credit, net of payments | 2,103,000 | |
Principal payments on long-term debt | (4,250,000) | |
Principal payments on equipment financing lease obligations | (501,000) | (275,000) |
Net cash provided by (used in) financing activities from continuing operations | 1,602,000 | (4,525,000) |
Discontinued Operation | ||
Cash (used in) provided by operating activites | (2,823,000) | 536,000 |
Cash provided by (used in) investing activities | 2,158,000 | (85,000) |
Net cash (used in) provided by operating and investing activities from discontinued operation | (665,000) | 451,000 |
Net decrease in cash and restricted cash | (3,567,000) | (5,621,000) |
Cash and restricted cash at beginning of year | 3,812,000 | 9,433,000 |
Cash and restricted cash at end of year | $ 245,000 | $ 3,812,000 |
Business Description and Summar
Business Description and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Business Description and Summary of Significant Accounting Policies | |
Business Description and Summary of Significant Accounting Policies | 1. Business Description and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation Servotronics, Inc. and its subsidiaries (the “Company”) design, manufacture and market servo-control components and other advanced technology products for aerospace, military and medical applications. The Company was incorporated in New York in 1959. In 1972, the Company was merged into a wholly owned subsidiary organized under the laws of the State of Delaware, thereby changing the Company’s state of incorporation from New York to Delaware. The Company’s shares currently trade on the New York Stock Exchange (NYSE) American under the symbol SVT. Until 2023, the Company had operated historically under two business segments: Advanced Technology Group (“ATG”) and Consumer Products Group (“CPG”), which had been strategic business segments that offered different products and services. Operations in ATG include the servo-control components (i.e., torque motors, control valves, etc.), and the CPG operations included the design, manufacture and marketing of a variety of cutlery products for use by consumers and government agencies. During 2023, the Company’s Management made the strategic decision to sell certain assets of The Ontario Knife Company (“OKC”) and divest the CPG business segment. This divestiture represented a strategic shift, as the Company has realigned its corporate and management reporting structure to focus soley on aerospace and now organizes its business in a single The consolidated financial statements include the accounts of Servotronics, Inc. (the active legal entity under the ATG segment), OKC, (the legal entity under the CPG business segment) and other, inactive, wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. The Company derives its primary sales revenue from domestic customers, although a portion of finished products are for foreign end use. As communicated in the June 30, 2023 10-Q filing, the Company executed an Asset Purchase Agreement (“APA”) with a third party to sell certain assets of OKC, which closed on August 1, 2023. Accordingly, the sale of assets and results of operations for OKC are presented as a “Loss from Discontinued Operation, net of tax” on the Consolidated Statements of Operations, and assets and liabilities are reflected as “Assets and Liabilities related to Discontinued Operation” in the Consolidated Balance Sheets. The “Loss from Discontinued Operation, net of tax” is included in the “net loss” on the Consolidated Statements of Comprehensive Loss, and the cash used in operating activities and provided by investing activities from the discontinued operation are included in the “Discontinued Operation” section of the Consolidated Statements of Cash Flows. The 2022 financial information included in the aforementioned Consolidated Balance Sheets and Consolidated Statements of Operations were reclassified to conform with the discontinued operation presentation. Amounts for all periods discussed below reflect the results of operations, financial condition and cash flows from the Company’s continuing operations, unless otherwise noted. Refer to Note 2 “Discontinued Operation and Assets and Liabilities Related to Discontinued Operation”, for further discussion. Cash and Restricted Cash The following table provides a reconciliation of cash and restricted cash to the amounts in the statement of cash flows: Years Ended December 31, (in thousands) 2023 2022 Cash $ 95 $ 3,812 Restricted cash 150 — Total cash and restricted cash $ 245 $ 3,812 The Company considers cash to include all currency and coin owned by the Company as well as all deposits in the bank including checking and savings accounts. The restricted cash of $150,000 as of December 31, 2023 (no outstanding balance as of December 31, 2022) represents collateral with a financial institution. 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 credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based on history of past write-offs, collections, and current credit conditions. The allowance for credit losses amounted to approximately $121,000 and $116,000 as of December 31, 2023 and December 31, 2022,respectively. 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. 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 revenue, principally representing repairs, are recognized at the time of shipment of goods. 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. 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 is 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. Shipping and handling activities that occur after the customer obtains control of the promised goods are considered fulfillment activities. The timing of satisfaction of the Company’s 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 December 31, 2023 and December 31, 2022 under the guidance of Accounting Standards Codification (“ASC”) 460-1-50 Product Warranties 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 net realizable value adjustments and inventory determined to be slow moving are applied to the gross value of the inventory through a reserve of approximately $587,000 and $602,000 at December 31, 2023 and December 31, 2022, 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 two years of customer requirements. Also, in order to maintain a reasonable and/or agreed to lead time or minimum stocking requirements, 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 right-of-use (“ROU”) assets accounted for as finance leases. 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 returns, combined New York, Texas, California and Connecticut state income tax returns and a separate Arkansas state income tax return. The Company’s practice is to recognize interest and/or penalties related to uncertain tax positions and income tax matters in income tax expense. The Company did not have any accrued interest or penalties included in its Consolidated Balance Sheets at December 31, 2023 or December 31, 2022, and did not recognize any interest and/or penalties in its Consolidated Statements of Operations during the years ended December 31, 2023 and 2022. The Company did not have any material uncertain tax positions or unrecognized tax benefits or obligations as of December 31, 2023 and December 31, 2022. The 2020 through 2023 federal and 2019 through 2023 state tax returns remain subject to examination by the respective taxing authorities. Supplemental Cash Flow Information Income tax refunded for the years ended December 31, 2023 and 2022 amounted to approximately $146,000 and $811,000, respectively. Income taxes paid were approximately $2,000 and $175,000 for the years ended December 31, 2023 and 2022, respectively. Interest paid was approximately $366,000 and $240,000 for the years ended December 31, 2023 and 2022, respectively. 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. 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’s strategic decision to sell certain assets of OKC in 2023 resulted in the classification of a discontinued operation and triggered an impairment of OKC’s real property in accordance with ASC 360 - 10 - 45 - 9 Impairment or Disposal of Long - Lived Assets 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 classifications adopted in the current period. Effective January 1, 2023, research and development costs, certain insurance expenses and other costs of approximately $1,892,000 were reclassed primarily from cost of goods sold to selling, general and administrative expenses. Accordingly, approximately $1,475,000 for the year ended December 31, 2022 was reclassified from cost of goods sold to selling, general and administrative expenses. There was no impact to the Consolidated Statement of Operations due to the reclassification. Research and Development Costs Research and development costs are expensed as incurred and are included in selling, general and administrative on the Consolidated Statements of Operations. 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 assesses the risk of nonperformance by the financial institutions to be low. Fair Value of Financial Instruments The carrying amount of cash, 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 asset - based line of credit the fair value approximates its carrying amount. Recent Accounting Pronouncements Effective January 1, 2023, the Company adopted the Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the Financial Accounting Standards Board (“FASB”) which creates a new credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost (including loans, trade receivables and held-to-maturity debt securities) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The measurement of credit losses for newly recognized financial assets (other than certain purchased assets) and subsequent changes in the allowance for credit losses are recorded in the statement of operations as the amounts expected to be collected change. The Company evaluated the accounting standards update related to the ASU 2016 - 13 Current Expected Credit Loss (“CECL”) and determined that the pronouncement does not have a material effect on the financial position, results of operations or cash flows for the Company. In December 2023, the FASB issued ASU 2023 - 09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023 - 09 is effective for the Company's annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures. |
Discontinued Operation and Asse
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation | |
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation | 2. Discontinued Operation and Assets and Liabilities Related to Discontinued Operation The Company’s decision to sell certain assets and wind down the operations of OKC met the “held for sale” under ASC 205-20-45-9 Discontinued Operations Under the terms of the Asset Purchase Agreement, the Company sold inventory, machinery & equipment and intellectual property (patents & trademarks/tradenames) to a buyer for approximately $2,158,000. The sale transaction closed on August 1, 2023, and in accordance with the sale, the Company evaluated whether the fair value of OKC assets sold, less estimated costs to sell, exceeded the net carrying values. The Company concluded that the net carrying values exceeded the fair value, less estimated costs to sell, resulting in a loss on the sale of assets of approximately $3,162,000 for the twelve-month year ended December 31, 2023. Also, as a direct result of Management’s decision to sell OKC’s assets, divest the operations, and exit the CPG segment, the Company incurred an impairment charge on its long-lived asset (building) of approximately $1,219,000 for the year ended December 31, 2023. This charge was based on two independent, third party real property appraisals (less estimated costs to sell). In addition, divestiture costs of approximately $807,000 were incurred for the year ended December 31, 2023 related to key employee retention agreements, employee severance agreements, and supplier open purchase order obligations. The aggregate total of the impairment charge and divestiture costs resulted in a loss of approximately $2,026,000 for the year ended December 31, 2023. Finally, OKC’s operating loss of approximately $2,052,000 for the year ended December 31, 2023 are also included in the Loss from Discontinued Operation (loss of $22,000 for the year ended December 31, 2022, as reclassified). In summary, the Discontinued Operation, net of tax, resulted in a loss of approximately $7,240,000 for the year ended December 31, 2023 (loss of $22,000 for the year ended December 31, 2022, as reclassified). Discontinued Operation Financial Information Consolidated Statements of Operations are as follows: Years Ended December 31, (in thousands) 2023 2022 Net Sales $ 3,410 $ 8,636 Operating costs (5,462) (8,658) Loss from discontinued operation (2,052) (22) Loss from discontinued operation - impairment and divestiture costs (2,026) — Loss on sale of assets (3,162) — Loss from discontinued operation before income taxes (7,240) (22) Income tax benefit — 5 Loss from discontinued operation, net of tax $ (7,240) $ (17) Assets & Liabilities Related to Discontinued Operation Financial Information A summary of the carrying amounts of major classes of assets and liabilities, which are included in assets and liabilities related to discontinued operation in the Consolidated Balance Sheets, are as follows: Years Ending December 31, (in thousands) 2023 2022 Accounts receivable, net $ 38 $ 1,016 Prepaid and other assets 31 338 Inventories, net 55 4,758 Building and improvements, net 1,428 — Assets related to discontinued operation $ 1,552 $ 6,112 Noncurrent assets related to discontinued operation $ — $ 3,440 Accounts payable $ 197 $ 1,272 Accrued employee compensation and other costs 16 473 Liabilities related to discontinued operation $ 213 $ 1,745 The Company plans to actively market and sell the building in 2024, as well as the inventory (steel) acquired from suppliers that was not part of the sale of assets sold to a third party. The majority of the remaining assets and liabilities are expected to be settled in early 2024. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Inventories | 3. Inventories Years Ended December 31, (in thousands) 2023 2022 Raw material and common parts $ 7,828 $ 7,199 Work-in-process 6,466 6,490 Finished goods 491 1,199 14,785 14,888 Less inventory reserve (587) (602) Total inventories $ 14,198 $ 14,286 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 4. Property, Plant and Equipment Years Ended December 31, (in thousands) 2023 2022 Buildings and building improvements $ 8,447 $ 7,838 Machinery, equipment and tooling 15,503 14,526 Construction in progress 106 1,002 24,056 23,366 Less accumulated depreciation and amortization (17,078) (16,011) Property, plant and equipment, net $ 6,978 $ 7,355 Depreciation and amortization expense amounted to approximately $1,083,000 and $951,000 for the years ended December 31, 2023 and 2022, respectively. Depreciation expense amounted to approximately $1,042,000 and $927,000 for the years ended December 31, 2023 and 2022, respectively. Amortization expense primarily related to equipment financing amounted to approximately $41,000 and $24,000 for years ended December 31, 2023 and 2022, respectively. The Company’s Right of Use (‘ROU’) assets included in machinery, equipment and tooling had a net book value of approximately $160,000 as of December 31, 2023 ($185,000 as of December 31, 2022). As of December 31, 2023, there is approximately $106,000 ($1,002,000 as of December 31, 2022) of construction in progress (CIP) included in property, plant and equipment all of which is related to capital projects. There is approximately $93,000 in CIP for machinery and approximately $13,000 for building improvements. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Debt. | |
Long-Term Debt | 5. Long-Term Debt Years Ending December 31, (in thousands) 2023 2022 Line of credit payable to a financial institution: Interest rate is equal to the greater of 8.0% or Prime Rate plus 1.0%. (Interest rate 9.5% as of December 31, 2023) (A) $ 2,103 $ — Equipment note obligations; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor factor 1.79553% - 1.869304% at time of funding) (B) — 491 Equipment financing lease obligations; 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) (C) — 10 2,103 501 Less current portion (2,103) (501) Long term debt $ — $ — A. On June 27, 2023, the Company replaced its line of credit ($0 balance outstanding as of December 31, 2022) by entering into a three-year financing agreement with a new financial lending institution for an asset-based line of credit (the “Credit Facility”) with a maximum revolving credit of $7,000,000. The borrowing base under the Credit Facility is determined using 85% of eligible domestic and foreign accounts receivable balances, less any amounts above foreign credit insurance limits and other specific reserves. In general terms, ineligible receivables are defined as invoices unpaid over 90 days. The balance outstanding on the Credit Facility is approximately $2,103,000 as of December 31, 2023, and availability on the Credit Facility is approximately $4,897,000 based on the borrowing base calculations as of December 31, 2023. The Company capitalized approximately $104,000 of loan origination costs amortizing over three years through June 2026 (the expiration of the Credit Facility), and it is collateralized by the Company’s assets. In accordance with ASC 470-10-45-5 Classification of Revolving Credit Agreements Subject to Lock-Box Arrangements and Subjective Acceleration Clauses, borrowings outstanding under the Credit Facility that includes both a subjective acceleration clause and requirement to maintain a lock-box arrangement must be considered short-term obligations. As the Credit Facility includes both of the provisions, the outstanding balance of $2,103,000 is classified as a current liability on the Consolidated Balance Sheet as of December 31, 2023. The Credit Facility contains two financial covenants required to be maintained by the Company at the end of each of its fiscal quarters. The Tangible Net Worth covenant requires the Company to maintain tangible net worth not less than $20,000,000. The Working Capital covenant requires the Company to maintain working capital not less than $10,000,000. The Company has met both covenant requirements as of December 31, 2023. B. The Company had an equipment loan facility in the amount of $1,000,000 available until July 9, 2021. This line was non-revolving and non-renewable. The loan term for the equipment covered by the agreement was 60 months. Monthly payments were fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. The equipment loan was paid off in 2023, so there is no balance outstanding as of December 31, 2023 ($491,000 outstanding as of December 31, 2022). C. The Company had a lease line of credit for equipment financing in the amount of $1,000,000 available until June 28, 2018. This line was non-revolving and non-renewable. The lease term for equipment covered by the lease line of credit was 60 months. Monthly payments were fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. The line of credit was paid off in 2023, so there is no balance outstanding as of December 31, 2023 ($10,000 outstanding as of December 31, 2022). |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefit Plans | |
Employee Benefit Plans | 6. Employee Benefit Plans Employee Stock Ownership Plan (ESOP) In 1985, the Company established an employee stock ownership plan (ESOP or the Plan) for the benefit of employees who meet certain minimum age and service requirements. Upon inception of the ESOP, the Company borrowed $2,000,000 from a bank and lent the proceeds to the Plan in accordance with the Trust Agreement (the Trust) established under the ESOP to purchase shares of the Company’s common stock. The Company’s original loan to the Trust is at interest rates approximating the prime rate and is repayable to the Company over a 40-year term ending in December 2024. During 1987 and 1988, the Company loaned an additional amount of $1,942,000 to the Trust under terms similar to those under the original loan, with term ending in December 2028. Company shares are held by the Plan’s trustees (per Trust Agreement) in a suspense account until allocated to participant accounts in the Plan. Contributions are determined annually by the Company according to the ESOP plan formula. Each year the Company makes contributions to the Trust sufficient to enable the Trust to repay the principal and interest due to the Company under the terms of the Trust. As the loans are repaid, shares are released from the suspense account pro rata based on the portion of the aggregate loan payments that are paid during the year. The Plan allows dividends (if applicable) on unallocated shares to be distributed to participants in cash, unless otherwise directed. Shares released from the suspense account are allocated to participants in the ESOP based on their relative taxable compensation in the year of allocation and/or on the participants’ account balances. If the Company’s shares are not readily tradeable on an established securities market when an ESOP participant’s termination of employment or retirement occurs, and if such ESOP participant requests that his/her ESOP distributed shares be repurchased by the Company, the Company is obligated to do so. The Company’s shares currently trade on NYSE American. There were no outstanding ESOP shares subject to the repurchase obligation at December 31, 2023. Since inception of the Plan, 321,141 shares have been allocated to participant accounts, exclusive of shares distributed to participants and no longer in the Plan. As of December 31, 2023 and 2022, 26,752 and 41,270 shares, respectively, remain unallocated in the suspense account. Related compensation expense associated with the Plan, which is equal to the principal reduction on the loans receivable from the trust, amounted to approximately $101,000 for the years ended December 31, 2023 and 2022. Included as a reduction to Company’s shareholders’ equity is the ESOP trust commitment which represents the remaining indebtedness of the Trust to the Company. ESOP participants are entitled to vote allocated shares and the Trust is entitled to vote unallocated shares and any allocated shares not voted by the participants. Other Postretirement Benefit Plans The Company provides certain postretirement health and life insurance benefits for two former executives (retirees) of the Company (the Plan). Upon ceasing employment with the Company, the Company pays the annual cost of health insurance coverage and provides continuing life insurance at the same level of coverage at the time of terminating employment with the Company. The Plan also provides a benefit to reimburse the retirees for certain out-of-pocket medical and/or health-related costs. The retirees’ benefits cease upon their death. The Plan is unfunded and the actuarially-determined projected postretirement benefit obligation was approximately $4,262,000 and $4,062,000 as of December 31, 2023 and 2022, respectively. Amounts recognized in the Consolidated Balance Sheets as of December 31, 2023 and 2022 consist of the following: Years Ended December 31, (in thousands) 2023 2022 Current portion - retirement benefits and other $ 97 $ 87 Long-term liabilities - retirement benefits and other 4,165 3,975 Postretirement Benefit Obligation $ 4,262 $ 4,062 Accumulated other comprehensive loss, before income taxes: Net actuarial loss $ 3,024 $ 2,958 The estimated net loss to be amortized from AOCI to benefit cost during 2024 is approximately $97,000. The increase in the projected postretirement benefit obligation was due to changes in actuarial assumptions. The actuarial loss is being amortized based on the expected lifetimes of the two former executives. A reconciliation of the beginning and ending balances of accumulated postretirement benefit obligations as of December 31, 2023 and 2022 is as follows: Years Ended December 31, (in thousands) 2023 2022 Accumulated postretirement benefit obligations at the beginning of the year $ 4,062 $ 5,865 Interest cost 192 157 Actuarial loss/(gain) 152 (1,838) Benefits paid (144) (122) Accumulated postretirement benefit obligations at the end of the year $ 4,262 $ 4,062 Financial information for this Plan for the years ended December 31, 2023 and 2022 are as follows: Years Ended December 31, (in thousands) 2023 2022 Interest Cost $ 192 $ 157 Recognized actuarial loss 87 151 Pension cost $ 279 $ 308 Benefits Paid $ 144 $ 122 As actuarially – determined, the Company estimates it will make contributions to the Plan to fund the benefits of approximately $147,000 in 2024. Actuarial assumptions used as of and for the years ended December 31, 2023 and 2022 are as follows: Years Ended December 31, 2023 2022 Discount rate used in determining: Benefit obligation 5.250 % 4.875 % Pension cost 4.875 % 2.750 % Assumed healthcare cost trend rate is estimated at 10% for the first year and then grading down by 0.5% for each year subsequent until a floor of 5% is reached. The actuarial assumptions for mortality include the use of PriH – 2012 mortality tables with generational mortality improvement scale 2024 and adjusted scale MP 2021. The effect of a one-percentage-point increase and a one-percentage-point decrease in the assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic postretirement health care benefit costs and the accumulated postretirement benefit obligation for health care benefits are as follows: Years Ended December 31, (dollars in thousands) 2023 2022 Effect of 1% increase in health care trend rates: Change in benefit obligation $ 543 $ 636 Change in combined service and interest cost $ 31 $ 30 Effect of 1% decrease of health care trend rates: Change in benefit obligation $ (450) $ (515) Change in combined service and interest cost $ (25) $ (23) Based on actuarial assumptions, the Company is expected to make benefit payments for the next ten years ending December 31, as follows (in thousands): Years Ending December 31, Amount 2024 $ 147 2025 161 2026 172 2027 184 2028 196 2029-2033 $ 1,147 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Shareholders' Equity | |
Shareholders' Equity | 7. Shareholders’ Equity Years Ended December 31, 2022 and 2023 (in thousands) Retained Earnings Accumulated Common Stock Capital in excess ESOT Treasury Stock Total Other of par value shareholders' Comprehensive equity Loss December 31, 2021 $ 25,858 $ (3,908) $ 523 $ 14,500 $ (258) $ (1,349) $ 35,366 Retirement benefits adjustment — 1,571 — — 101 — 1,672 Stock based compensation — — — 56 — 135 191 Net Loss (2,117) — — — — — (2,117) December 31, 2022 $ 23,741 $ (2,337) $ 523 $ 14,556 $ (157) $ (1,214) $ 35,112 Retirement benefits adjustment — (52) — — 101 — 49 Stock based compensation — — 2 61 — 57 120 Net Loss (10,787) — — — — — (10,787) December 31, 2023 $ 12,954 $ (2,389) $ 525 $ 14,617 $ (56) $ (1,157) $ 24,494 Earnings Per Share Basic earnings per share is computed by dividing net income (loss) 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 income (loss) 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. The dilutive effect of unvested restrictive stock is determined using the treasury stock method. However, if the assumed common shares are anti-dilutive, basic and diluted earnings per share are the same. As a result of the net losses generated in 2023, all outstanding common shares would be antidilutive. As of the year ended December 31, 2023 and 2022, there were 24,110 and 27,010 common shares, respectively, that could potentially dilute basic earnings per share in the future. 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. Years Ended December 31, (in thousands except per share data) 2023 2022 Loss from continuing operations $ (3,547) $ (2,100) Loss from discontinued operation, net of tax (7,240) (17) Net loss $ (10,787) $ (2,117) Weighted average common shares outstanding (basic) 2,470 2,422 Unvested restricted stock 24 27 Weighted average common shares outstanding (diluted) 2,494 2,449 Basic and diluted loss per share — — Continuing operations $ (1.44) $ (0.87) Discontinued operation (2.93) (0.01) Basic and diluted loss per share $ (4.37) $ (0.88) Common Stock Buyback In January 2006, the Company’s Board of Directors (Board) authorized the purchase of up to 450,000 shares of its common stock in the open market or in privately negotiated transactions. As of December 31, 2023, the Company has purchased 360,615 shares and there remain 89,385 shares available to purchase under this program. There were no shares purchased by the Company in 2023 or 2022. In March 2024, the Board formally approved the termination of the share repurchase authorization under this program. Stock-Based Compensation The Company’s 2022 Equity Incentive Plan (“the Equity Plan”) was approved by the shareholders at the 2022 Annual Meeting of Shareholders. The Equity Plan allows for various types of awards (rights) to be granted, including incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards, or any other equity-based awards. The total number of awards under the Equity Plan are limited to a maximum of 200,000 authorized shares. The Company’s executive compensation program established by the Board of Directors determines the type of awards available to the Company’s executives. The program consists of an annual (cash) incentive plan (“AIP”) and a long-term (equity) incentive plan (“LTIP”). The LTIP includes service-based awards that vest annually over three years , and performance-based awards that cliff-vest based on the achievement of a financial metric over a specific three-year time period. On December 13, 2023, 5,793 service-based (restricted) shares were granted to Company executives under the 2023-2025 LTIP Stock Award (“the 2023-2025 Award”). Additionally, on May 1, 2023, the Board of Directors granted 1,759 service-based restricted shares in connection with the hiring of an executive officer. Those shares vest after a one-year service period. The Company’s director compensation policy provides that non-employee directors receive a portion of their annual retainer in the form of shares under the Equity Plan. These shares vest quarterly over a twelve-month service period, have voting rights, and any dividends declared and paid during the restricted period accrue and are paid upon vesting. The aggregate amount of expense to the Company, measured based on the grant date fair value, is recognized over the requisite service period. An aggregate of 10,410 shares were issued on June 9, 2023 with a grant date fair value of approximately $125,000 . A summary of the status of restricted share awards granted under all employee plans is presented below: Weighted Average Grant Restricted Share Activity: Shares Date Fair Value Unvested at December 31, 2021 6,576 $ 7.60 Granted in 2022 32,921 $ 11.07 Vested in 2022 12,487 $ 9.22 Unvested at December 31, 2022 27,010 $ 11.09 Granted in 2023 18,687 $ 11.74 Vested in 2023 23,249 $ 11.26 Unvested at December 31, 2023 22,448 $ 11.45 Of the 23,249 shares vested in 2023, 1,748 shares were withheld by the Company for approximately $22,000 to sastisfy statutory minimum withholding tax requirements as permitted under the Equity Plan. Included in the years ended December 31, 2023 and 2022 is approximately $120,000 and $191,000, respectively, of stock-based compensation expense related to the restricted share awards. The Company has approximately $276,000 of stock-based compensation expense related to unvested service-based shares to be recognized over the requisite service periods. Performance share awards represent a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the performance period. Performance share awards granted to executives vest at the end of a three-year period and vested and issued amounts may range from 0% to a maximum of 200% of targeted amounts depending on the achievement of performance measures at the end of a three-year period. The expected cost of the shares is based on the Company’s assessment of the probability that the performance condition will be achieved. Any related compensation expense is recognized when the probability of the event is likely and performance criteria are met. Forfeitures are recognized as they occur. These awards may be settled in cash or shares of common stock at the election of the Company on the date of grant. It is the Company’s intent to settle these awards with shares of common stock. On December 13, 2023, 17,381 performance-based shares were granted to Company executives under the 2023-2025 Award at a grant date fair value of $11.50 per share. These shares are not issued until the performance period is complete and the metrics are achieved. The maximum potential stock-based compensation expense for these performance-based shares under the 2023-2025 Award is approximately $400,000. However, no expense has been recorded in 2023 due to the low probability of achievement. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | 8. Income Taxes The income tax (expense)/benefit included in the Consolidated Statements of Operations consists of the following: Years Ended December 31, (in thousands) 2023 2022 Continuing Operations: Current: Federal $ (24) $ (61) State (2) — Total Current (26) (61) Deferred: Federal (1,072) 626 State — — Total Deferred (1,072) 626 Total Continuing Operations $ (1,098) $ 565 Discontinued Operation: Current: Federal $ — $ 42 State — — Total Current — 42 Deferred: Federal — (37) State — — Total Deferred — (37) Total Discontinued Operation $ — $ 5 Total Income Tax (Expense)/Benefit $ (1,098) $ 570 The reconciliation of the federal statutory income tax rate to the Company’s effective tax rate based upon the total income tax provision from continuing operations is as follows: Years Ended December 31, 2023 2022 Federal statutory rate 21.0 % 21.0 % Permanent non-taxable income 0.2 % (0.1) % Business credits 2.8 % 0.1 % Foreign-derived intangible income deduction 0.0 % 0.0 % State taxes, net of federal benefit (0.1) % (0.1) % Valuation allowance (68.6) % 0.0 % Other (0.1) % 0.3 % (44.8) % 21.2 % At December 31, 2023 and 2022, the deferred tax assets (liabilities) from continuing operations were comprised of the following: Years Ended December 31, (in thousands) 2023 2022 Deferred Tax Assets: Inventories $ 254 $ 110 Accrued employees compensation and benefits costs 362 399 Postretirement adjustment (accumulated other comprehensive loss) 635 621 Accrued arbitration award and related liability — — State credit carryforwards 177 173 Federal Net operating loss carryforward 1,493 — Bad debt reserve 26 25 Warranty reserve 114 122 Research and experimentation expenses 751 615 Customer accruals 344 — Sec 163(j) disallowed interest 83 — Other 40 — Minimum pension liability — — Total deferred tax assets 4,279 2,065 Valuation allowance (3,145) (173) Net deferred tax assets 1,134 1,892 Deferred tax liabilities: Prepaid expenses (71) (70) Property, plant and equipment (853) (774) Other receivable - insurance proceeds (210) — Total deferred tax liabilities (1,134) (844) Net deferred tax assets $ — $ 1,048 In assessing the ability of the Company to realize the benefit of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based upon the level of historical pre-tax income, as well as projections of future taxable income over the periods which deferred tax assets are deductible, management determined that it is more likely than not that the Company may not realize the net deferred tax assts recorded as of December 31, 2023. Accordingly, a valuation allowance of $3,145,000, an increase of approximately $2,972,000 from the valuation allowance of $173,000 at December 31, 2022, was recorded against net deferred tax assets at December 31, 2023. At December 31, 2023, the federal net operating loss carryforward amount is approximately $7,100,000 and has no expiration date. The Company has a New York state tax credit carryforward of approximately $219,000 at December 31, 2023 ($173,000 at December 31, 2022), which begins to expire in 2024. There are no uncertain tax positions or unrecognized tax benefits for 2023 and 2022. The Company is subject to routine audits of its tax returns by the Internal Revenue Service and various state taxing authorities. The 2020 through 2023 federal and 2019 through 2023 state tax returns remain subject to examination. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies In the course of its business, the Company is subject to a variety of claims and lawsuits that are inherently subject to many uncertainties regarding the possibility of a loss to the Company. Because litigation outcomes are inherently unpredictable, the Company’s evaluation of legal proceedings often involves a series of complex assessments by management, after consulting with legal counsel, about future events and can rely heavily on estimates and assumptions. The Company carries liability insurance, subject to certain deductibles and policy limits, for such claims as they arise and may from time to time establish reserves for litigation that is considered probable of a loss. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. During the year ended December 31, 2023, the Company entered into further discussions with a particular customer regarding product liability costs and customer damages (the claim) resulting from non-conforming product shipped to the customer in prior years. Prior to 2023, the Company considered the risk of loss to be remote, however, a final claim was received from the customer and submitted to the Company’s insurance carrier. Subsequent to 2023, the insurance carrier determined the claim is covered by insurance for approximately $1,000,000. The claim liability of $1,000,000 is included in other accrued liabilities and the insurance proceeds anticipated in the amount of approximately $1,000,000 are included in other current assets in the Consolidated Balance Sheet as of December 31, 2023. The claim has no year-end impact on earnings. On December 21, 2021, the Company’s former Chief Executive Officer (“Former CEO”) delivered his Notice of Termination and alleged that the Company breached the terms of the Employment Agreement between the Company and the Former CEO by, among others, placing the Former CEO on paid administrative leave in June 2021 pending an internal investigation. On December 22, 2021, the Board of Directors accepted the Former CEO’s resignation from the Company but rejected his request to treat his resignation as resignation for good reason under Paragraph 10 of his Employment Agreement. The Board also determined, based on the findings of its investigation that the Former CEO committed willful malfeasance in violation of his Employment Agreement, and that such willful malfeasance would have justified termination of employment pursuant to Paragraph 9 of the Employment Agreement, but for his earlier resignation. The Former CEO claims that he is entitled to a severance payment equal to 2.99 times his average annual compensation as set forth in the Employment Agreement, plus the reimbursement of certain expenses and the value of any lost benefits. As noted above, the Board of Directors rejected the Former CEO’s claim that the Company breached the Employment Agreement. Accordingly, the Company is classifying the Former CEO’s termination as a voluntary resignation for which no severance is due. The Employment Agreement provides that disputes arising thereunder shall be settled by arbitration. To date, neither party has commenced an arbitration proceeding with respect to these matters. Based on the information known by the Company as of the date of this filing, if a claim is ultimately asserted, the Company does not consider the risk of loss to be probable and is unable to reasonably or accurately estimate the likelihood and amount of any liability that may be realized with respect to this matter. On June 7, 2021, a Summons and Complaint was filed by an employee in the Supreme Court of the State of New York, County of Erie, against Servotronics, Inc., the Servotronics Board of Directors, The Ontario Knife Company and Kenneth D. Trbovich (collectively, the “Defendants”). The Complaint alleges certain violations under the New York Human Rights Law by the Defendants relating to the employee’s employment by the Company as well as intentional and negligent infliction of emotional distress. The Complaint also alleges certain purported derivative causes of action against all Defendants, including breach of fiduciary duties, fraud and corporate waste. The Complaint seeks monetary damages in an amount not less than $5,000,000 with respect to the direct causes of action and equitable relief with respect to the purported derivative causes of action. The Defendants filed a motion to dismiss the Complaint on August 6, 2021. On January 13, 2022, the Defendants’ motion to dismiss was granted, in part, and denied, in part. This litigation is still in its earliest stages. The Company is insured for such matters in the amount of $3 million with a retention of $250,000 for defense costs. During 2023, the Company met the retention amount, so subsequent defense costs are covered by insurance. Additionally, there is an excess coverage policy for $3 million that considers the retention payment from the primary insurance policy as the excess $3 million retention. Based on the information known by the Company as of the date of this filing, the Company does not consider the risk of loss to be probable and is unable to reasonably or accurately estimate the likelihood and amount of any liability that may be realized as a result of this litigation. Accordingly, no loss has been recognized in the accompanying financials statements related to this litigation. The Company intends to vigorously defend against this litigation. There are no other legal proceedings currently pending by or against the Company that would have a material adverse effect on the business, cash flow, or earnings of the Company. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | 10. Related Party Transactions The Company paid legal fees and disbursements of approximately $8,000 and $51,000 in the years ended December 31, 2023 and 2022, respectively, for services provided by a law firm owned by a member of the Company’s Board of Directors. Additionally, as the Company no longer utilizes this firm, no accrued unbilled legal fees exist as of December 31, 2023 ($13,000 as of December 31, 2022). |
Customer and Supplier Concentra
Customer and Supplier Concentration | 12 Months Ended |
Dec. 31, 2023 | |
Customer and Supplier Concentration | |
Customer and Supplier Concentration | 11. Customer and Supplier Concentration The Company’s revenues include significant concentration from a limited number of customers. Customer concentration for the years ended December 31, 2023 and 2022 included customers A, B, C, and D, which collectively accounted for approximately 90% and 85% of revenues, respectively. While the Company continues to pursue diversification of its customer base, the loss of, or significant reduction in business from, any of these major customers could have a material adverse effect on the Company’s financial condition, results of operations, and cash flows. The Company routinely assesses its relationships with major customers, including creditworthiness, market conditions, and competitive pressures, to mitigate risks associated with customer concentration. Despite these efforts, there can be no assurance that the Company will successfully reduce its dependence on any single customer in the future. The Company's foreign sales for the years ended December 31, 2023 and 2022 were approximately $12,129,000 and $10,541,000, respectively, and constitute a substantial part of the Company’s revenue. The Company relies on a variety of suppliers for the procurement of raw materials, components, and services necessary for its operations. Supplier concentration for the years ended December 31, 2023, and 2022 included purchases from one supplier, accounting for approximately 10% and 12% of purchases, respectively. While the Company actively manages its relationships with suppliers and seeks to diversify its supplier base, a disruption in the supply of goods or services from this major supplier could have a material adverse effect on the Company's operations and financial results. To mitigate the risks associated with supplier concentration, the Company engages in ongoing efforts to identify alternative sources of supply, assess supplier reliability and performance, and negotiate favorable contractual terms where feasible. However, there can be no assurance that the Company will be successful in reducing its dependence on any single supplier or mitigating the impact of supplier-related risks in the future. |
Business Description and Summ_2
Business Description and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Business Description and Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Servotronics, Inc. and its subsidiaries (the “Company”) design, manufacture and market servo-control components and other advanced technology products for aerospace, military and medical applications. The Company was incorporated in New York in 1959. In 1972, the Company was merged into a wholly owned subsidiary organized under the laws of the State of Delaware, thereby changing the Company’s state of incorporation from New York to Delaware. The Company’s shares currently trade on the New York Stock Exchange (NYSE) American under the symbol SVT. Until 2023, the Company had operated historically under two business segments: Advanced Technology Group (“ATG”) and Consumer Products Group (“CPG”), which had been strategic business segments that offered different products and services. Operations in ATG include the servo-control components (i.e., torque motors, control valves, etc.), and the CPG operations included the design, manufacture and marketing of a variety of cutlery products for use by consumers and government agencies. During 2023, the Company’s Management made the strategic decision to sell certain assets of The Ontario Knife Company (“OKC”) and divest the CPG business segment. This divestiture represented a strategic shift, as the Company has realigned its corporate and management reporting structure to focus soley on aerospace and now organizes its business in a single The consolidated financial statements include the accounts of Servotronics, Inc. (the active legal entity under the ATG segment), OKC, (the legal entity under the CPG business segment) and other, inactive, wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. The Company derives its primary sales revenue from domestic customers, although a portion of finished products are for foreign end use. As communicated in the June 30, 2023 10-Q filing, the Company executed an Asset Purchase Agreement (“APA”) with a third party to sell certain assets of OKC, which closed on August 1, 2023. Accordingly, the sale of assets and results of operations for OKC are presented as a “Loss from Discontinued Operation, net of tax” on the Consolidated Statements of Operations, and assets and liabilities are reflected as “Assets and Liabilities related to Discontinued Operation” in the Consolidated Balance Sheets. The “Loss from Discontinued Operation, net of tax” is included in the “net loss” on the Consolidated Statements of Comprehensive Loss, and the cash used in operating activities and provided by investing activities from the discontinued operation are included in the “Discontinued Operation” section of the Consolidated Statements of Cash Flows. The 2022 financial information included in the aforementioned Consolidated Balance Sheets and Consolidated Statements of Operations were reclassified to conform with the discontinued operation presentation. Amounts for all periods discussed below reflect the results of operations, financial condition and cash flows from the Company’s continuing operations, unless otherwise noted. Refer to Note 2 “Discontinued Operation and Assets and Liabilities Related to Discontinued Operation”, for further discussion. |
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. |
Cash and Restricted Cash | Cash and Restricted Cash The following table provides a reconciliation of cash and restricted cash to the amounts in the statement of cash flows: Years Ended December 31, (in thousands) 2023 2022 Cash $ 95 $ 3,812 Restricted cash 150 — Total cash and restricted cash $ 245 $ 3,812 The Company considers cash to include all currency and coin owned by the Company as well as all deposits in the bank including checking and savings accounts. The restricted cash of $150,000 as of December 31, 2023 (no outstanding balance as of December 31, 2022) represents collateral with a financial institution. |
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 credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based on history of past write-offs, collections, and current credit conditions. The allowance for credit losses amounted to approximately $121,000 and $116,000 as of December 31, 2023 and December 31, 2022,respectively. 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. 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 revenue, principally representing repairs, are recognized at the time of shipment of goods. 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. 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 is 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. Shipping and handling activities that occur after the customer obtains control of the promised goods are considered fulfillment activities. The timing of satisfaction of the Company’s 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 December 31, 2023 and December 31, 2022 under the guidance of Accounting Standards Codification (“ASC”) 460-1-50 Product Warranties |
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 net realizable value adjustments and inventory determined to be slow moving are applied to the gross value of the inventory through a reserve of approximately $587,000 and $602,000 at December 31, 2023 and December 31, 2022, 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 two years of customer requirements. Also, in order to maintain a reasonable and/or agreed to lead time or minimum stocking requirements, 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 right-of-use (“ROU”) assets accounted for as finance leases. 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 returns, combined New York, Texas, California and Connecticut state income tax returns and a separate Arkansas state income tax return. The Company’s practice is to recognize interest and/or penalties related to uncertain tax positions and income tax matters in income tax expense. The Company did not have any accrued interest or penalties included in its Consolidated Balance Sheets at December 31, 2023 or December 31, 2022, and did not recognize any interest and/or penalties in its Consolidated Statements of Operations during the years ended December 31, 2023 and 2022. The Company did not have any material uncertain tax positions or unrecognized tax benefits or obligations as of December 31, 2023 and December 31, 2022. The 2020 through 2023 federal and 2019 through 2023 state tax returns remain subject to examination by the respective taxing authorities. |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Income tax refunded for the years ended December 31, 2023 and 2022 amounted to approximately $146,000 and $811,000, respectively. Income taxes paid were approximately $2,000 and $175,000 for the years ended December 31, 2023 and 2022, respectively. Interest paid was approximately $366,000 and $240,000 for the years ended December 31, 2023 and 2022, respectively. 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. 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’s strategic decision to sell certain assets of OKC in 2023 resulted in the classification of a discontinued operation and triggered an impairment of OKC’s real property in accordance with ASC 360 - 10 - 45 - 9 Impairment or Disposal of Long - Lived Assets |
Reclassifications | Reclassifications Certain balances, as previously reported, were reclassified to classifications adopted in the current period. Effective January 1, 2023, research and development costs, certain insurance expenses and other costs of approximately $1,892,000 were reclassed primarily from cost of goods sold to selling, general and administrative expenses. Accordingly, approximately $1,475,000 for the year ended December 31, 2022 was reclassified from cost of goods sold to selling, general and administrative expenses. There was no impact to the Consolidated Statement of Operations due to the reclassification. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred and are included in selling, general and administrative on the Consolidated Statements of Operations. |
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 assesses the risk of nonperformance by the financial institutions to be low. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amount of cash, 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 asset - based line of credit the fair value approximates its carrying amount. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Effective January 1, 2023, the Company adopted the Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the Financial Accounting Standards Board (“FASB”) which creates a new credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost (including loans, trade receivables and held-to-maturity debt securities) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The measurement of credit losses for newly recognized financial assets (other than certain purchased assets) and subsequent changes in the allowance for credit losses are recorded in the statement of operations as the amounts expected to be collected change. The Company evaluated the accounting standards update related to the ASU 2016 - 13 Current Expected Credit Loss (“CECL”) and determined that the pronouncement does not have a material effect on the financial position, results of operations or cash flows for the Company. In December 2023, the FASB issued ASU 2023 - 09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023 - 09 is effective for the Company's annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures. |
Business Description and Summ_3
Business Description and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Description and Summary of Significant Accounting Policies | |
Schedule of reconciliation of cash and restricted cash to the amounts in the statement of cash flow | Years Ended December 31, (in thousands) 2023 2022 Cash $ 95 $ 3,812 Restricted cash 150 — Total cash and restricted cash $ 245 $ 3,812 |
Schedule of estimated useful lives of depreciable properties | Buildings and improvements 5-40 years Machinery and equipment 5-20 years Tooling 3-5 years |
Discontinued Operation and As_2
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation | |
Summary of the results of operations classified as a discontinued operation, net of tax and carrying amounts of major classes of assets and liabilities, which are included in assets and liabilities related to discontinued operation | Years Ended December 31, (in thousands) 2023 2022 Net Sales $ 3,410 $ 8,636 Operating costs (5,462) (8,658) Loss from discontinued operation (2,052) (22) Loss from discontinued operation - impairment and divestiture costs (2,026) — Loss on sale of assets (3,162) — Loss from discontinued operation before income taxes (7,240) (22) Income tax benefit — 5 Loss from discontinued operation, net of tax $ (7,240) $ (17) Years Ending December 31, (in thousands) 2023 2022 Accounts receivable, net $ 38 $ 1,016 Prepaid and other assets 31 338 Inventories, net 55 4,758 Building and improvements, net 1,428 — Assets related to discontinued operation $ 1,552 $ 6,112 Noncurrent assets related to discontinued operation $ — $ 3,440 Accounts payable $ 197 $ 1,272 Accrued employee compensation and other costs 16 473 Liabilities related to discontinued operation $ 213 $ 1,745 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Schedule of inventories | Years Ended December 31, (in thousands) 2023 2022 Raw material and common parts $ 7,828 $ 7,199 Work-in-process 6,466 6,490 Finished goods 491 1,199 14,785 14,888 Less inventory reserve (587) (602) Total inventories $ 14,198 $ 14,286 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment | Years Ended December 31, (in thousands) 2023 2022 Buildings and building improvements $ 8,447 $ 7,838 Machinery, equipment and tooling 15,503 14,526 Construction in progress 106 1,002 24,056 23,366 Less accumulated depreciation and amortization (17,078) (16,011) Property, plant and equipment, net $ 6,978 $ 7,355 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Debt. | |
Schedule of long-term debt | Years Ending December 31, (in thousands) 2023 2022 Line of credit payable to a financial institution: Interest rate is equal to the greater of 8.0% or Prime Rate plus 1.0%. (Interest rate 9.5% as of December 31, 2023) (A) $ 2,103 $ — Equipment note obligations; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor factor 1.79553% - 1.869304% at time of funding) (B) — 491 Equipment financing lease obligations; 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) (C) — 10 2,103 501 Less current portion (2,103) (501) Long term debt $ — $ — A. On June 27, 2023, the Company replaced its line of credit ($0 balance outstanding as of December 31, 2022) by entering into a three-year financing agreement with a new financial lending institution for an asset-based line of credit (the “Credit Facility”) with a maximum revolving credit of $7,000,000. The borrowing base under the Credit Facility is determined using 85% of eligible domestic and foreign accounts receivable balances, less any amounts above foreign credit insurance limits and other specific reserves. In general terms, ineligible receivables are defined as invoices unpaid over 90 days. The balance outstanding on the Credit Facility is approximately $2,103,000 as of December 31, 2023, and availability on the Credit Facility is approximately $4,897,000 based on the borrowing base calculations as of December 31, 2023. The Company capitalized approximately $104,000 of loan origination costs amortizing over three years through June 2026 (the expiration of the Credit Facility), and it is collateralized by the Company’s assets. In accordance with ASC 470-10-45-5 Classification of Revolving Credit Agreements Subject to Lock-Box Arrangements and Subjective Acceleration Clauses, borrowings outstanding under the Credit Facility that includes both a subjective acceleration clause and requirement to maintain a lock-box arrangement must be considered short-term obligations. As the Credit Facility includes both of the provisions, the outstanding balance of $2,103,000 is classified as a current liability on the Consolidated Balance Sheet as of December 31, 2023. The Credit Facility contains two financial covenants required to be maintained by the Company at the end of each of its fiscal quarters. The Tangible Net Worth covenant requires the Company to maintain tangible net worth not less than $20,000,000. The Working Capital covenant requires the Company to maintain working capital not less than $10,000,000. The Company has met both covenant requirements as of December 31, 2023. B. The Company had an equipment loan facility in the amount of $1,000,000 available until July 9, 2021. This line was non-revolving and non-renewable. The loan term for the equipment covered by the agreement was 60 months. Monthly payments were fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. The equipment loan was paid off in 2023, so there is no balance outstanding as of December 31, 2023 ($491,000 outstanding as of December 31, 2022). C. The Company had a lease line of credit for equipment financing in the amount of $1,000,000 available until June 28, 2018. This line was non-revolving and non-renewable. The lease term for equipment covered by the lease line of credit was 60 months. Monthly payments were fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. The line of credit was paid off in 2023, so there is no balance outstanding as of December 31, 2023 ($10,000 outstanding as of December 31, 2022). |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefit Plans | |
Schedule of amounts recognized in the balances sheets | Years Ended December 31, (in thousands) 2023 2022 Current portion - retirement benefits and other $ 97 $ 87 Long-term liabilities - retirement benefits and other 4,165 3,975 Postretirement Benefit Obligation $ 4,262 $ 4,062 Accumulated other comprehensive loss, before income taxes: Net actuarial loss $ 3,024 $ 2,958 |
Schedule of beginning and ending balances of accumulated postretirement benefit obligations | Years Ended December 31, (in thousands) 2023 2022 Accumulated postretirement benefit obligations at the beginning of the year $ 4,062 $ 5,865 Interest cost 192 157 Actuarial loss/(gain) 152 (1,838) Benefits paid (144) (122) Accumulated postretirement benefit obligations at the end of the year $ 4,262 $ 4,062 |
Schedule of financial information for this Plan | Years Ended December 31, (in thousands) 2023 2022 Interest Cost $ 192 $ 157 Recognized actuarial loss 87 151 Pension cost $ 279 $ 308 Benefits Paid $ 144 $ 122 |
Schedule of assumptions used as of and for the years | Years Ended December 31, 2023 2022 Discount rate used in determining: Benefit obligation 5.250 % 4.875 % Pension cost 4.875 % 2.750 % |
Schedule of one-percentage-point increase and a one-percentage-point decrease in the assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic postretirement health care benefit costs and the accumulated postretirement benefit obligation for health care benefits | Years Ended December 31, (dollars in thousands) 2023 2022 Effect of 1% increase in health care trend rates: Change in benefit obligation $ 543 $ 636 Change in combined service and interest cost $ 31 $ 30 Effect of 1% decrease of health care trend rates: Change in benefit obligation $ (450) $ (515) Change in combined service and interest cost $ (25) $ (23) |
Schedule of benefit payments | Years Ending December 31, Amount 2024 $ 147 2025 161 2026 172 2027 184 2028 196 2029-2033 $ 1,147 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Shareholders' Equity | |
Schedule of stockholders equity | Years Ended December 31, 2022 and 2023 (in thousands) Retained Earnings Accumulated Common Stock Capital in excess ESOT Treasury Stock Total Other of par value shareholders' Comprehensive equity Loss December 31, 2021 $ 25,858 $ (3,908) $ 523 $ 14,500 $ (258) $ (1,349) $ 35,366 Retirement benefits adjustment — 1,571 — — 101 — 1,672 Stock based compensation — — — 56 — 135 191 Net Loss (2,117) — — — — — (2,117) December 31, 2022 $ 23,741 $ (2,337) $ 523 $ 14,556 $ (157) $ (1,214) $ 35,112 Retirement benefits adjustment — (52) — — 101 — 49 Stock based compensation — — 2 61 — 57 120 Net Loss (10,787) — — — — — (10,787) December 31, 2023 $ 12,954 $ (2,389) $ 525 $ 14,617 $ (56) $ (1,157) $ 24,494 |
Schedule of earnings per share | Years Ended December 31, (in thousands except per share data) 2023 2022 Loss from continuing operations $ (3,547) $ (2,100) Loss from discontinued operation, net of tax (7,240) (17) Net loss $ (10,787) $ (2,117) Weighted average common shares outstanding (basic) 2,470 2,422 Unvested restricted stock 24 27 Weighted average common shares outstanding (diluted) 2,494 2,449 Basic and diluted loss per share — — Continuing operations $ (1.44) $ (0.87) Discontinued operation (2.93) (0.01) Basic and diluted loss per share $ (4.37) $ (0.88) |
Summary of restricted stock activity | Weighted Average Grant Restricted Share Activity: Shares Date Fair Value Unvested at December 31, 2021 6,576 $ 7.60 Granted in 2022 32,921 $ 11.07 Vested in 2022 12,487 $ 9.22 Unvested at December 31, 2022 27,010 $ 11.09 Granted in 2023 18,687 $ 11.74 Vested in 2023 23,249 $ 11.26 Unvested at December 31, 2023 22,448 $ 11.45 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of income tax provision for income taxes from continuing operations | Years Ended December 31, (in thousands) 2023 2022 Continuing Operations: Current: Federal $ (24) $ (61) State (2) — Total Current (26) (61) Deferred: Federal (1,072) 626 State — — Total Deferred (1,072) 626 Total Continuing Operations $ (1,098) $ 565 Discontinued Operation: Current: Federal $ — $ 42 State — — Total Current — 42 Deferred: Federal — (37) State — — Total Deferred — (37) Total Discontinued Operation $ — $ 5 Total Income Tax (Expense)/Benefit $ (1,098) $ 570 |
Schedule of the reconciliation of effective tax rate from continuing operations and the federal statutory income tax rate | Years Ended December 31, 2023 2022 Federal statutory rate 21.0 % 21.0 % Permanent non-taxable income 0.2 % (0.1) % Business credits 2.8 % 0.1 % Foreign-derived intangible income deduction 0.0 % 0.0 % State taxes, net of federal benefit (0.1) % (0.1) % Valuation allowance (68.6) % 0.0 % Other (0.1) % 0.3 % (44.8) % 21.2 % |
Schedule of deferred tax assets (liabilities) | Years Ended December 31, (in thousands) 2023 2022 Deferred Tax Assets: Inventories $ 254 $ 110 Accrued employees compensation and benefits costs 362 399 Postretirement adjustment (accumulated other comprehensive loss) 635 621 Accrued arbitration award and related liability — — State credit carryforwards 177 173 Federal Net operating loss carryforward 1,493 — Bad debt reserve 26 25 Warranty reserve 114 122 Research and experimentation expenses 751 615 Customer accruals 344 — Sec 163(j) disallowed interest 83 — Other 40 — Minimum pension liability — — Total deferred tax assets 4,279 2,065 Valuation allowance (3,145) (173) Net deferred tax assets 1,134 1,892 Deferred tax liabilities: Prepaid expenses (71) (70) Property, plant and equipment (853) (774) Other receivable - insurance proceeds (210) — Total deferred tax liabilities (1,134) (844) Net deferred tax assets $ — $ 1,048 |
Business Description and Summ_4
Business Description and Summary of Significant Accounting Policies - Cash and Restricted Cash (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Reconciliation of cash and restricted cash to the amounts in the statement of cash flow | |||
Cash | $ 95,000 | $ 3,812,000 | |
Restricted cash | 150,000 | 0 | |
Total cash and restricted cash | $ 245,000 | $ 3,812,000 | $ 9,433,000 |
Business Description and Summ_5
Business Description and Summary of Significant Accounting Policies - Estimated useful lives of depreciable properties (Details) | Dec. 31, 2023 |
Buildings and building improvements | Minimum | |
Business Description and Summary of Significant Accounting Policies | |
Estimated useful lives of depreciable properties | 5 years |
Buildings and building improvements | Maximum | |
Business Description and Summary of Significant Accounting Policies | |
Estimated useful lives of depreciable properties | 40 years |
Machinery and equipment | Minimum | |
Business Description and Summary of Significant Accounting Policies | |
Estimated useful lives of depreciable properties | 5 years |
Machinery and equipment | Maximum | |
Business Description and Summary of Significant Accounting Policies | |
Estimated useful lives of depreciable properties | 20 years |
Tooling | Minimum | |
Business Description and Summary of Significant Accounting Policies | |
Estimated useful lives of depreciable properties | 3 years |
Tooling | Maximum | |
Business Description and Summary of Significant Accounting Policies | |
Estimated useful lives of depreciable properties | 5 years |
Business Description and Summ_6
Business Description and Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2023 USD ($) segment Y | Dec. 31, 2022 USD ($) | |
Business Description and Summary of Significant Accounting Policies | ||
Number of operating segments | segment | 1 | |
Allowance for credit losses | $ 121,000 | $ 116,000 |
Warranty period | 27 months | |
Warranty reserve | $ 542,000 | 581,000 |
Inventory reserve | 587,000 | 602,000 |
Income taxes refunds received | 146,000 | 811,000 |
Income taxes paid | 2,000 | 175,000 |
Interest paid | 366,000 | 240,000 |
Impairment of long-lived assets | 0 | |
ATG Research and development expenditures | ||
Business Description and Summary of Significant Accounting Policies | ||
Research and Development Costs | $ 1,892,000 | $ 1,475,000 |
Minimum | ||
Business Description and Summary of Significant Accounting Policies | ||
Number of years of customer requirements | Y | 2 | |
Number of year's supply | Y | 1 |
Discontinued Operation and As_3
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation (Details) - USD ($) | 12 Months Ended | ||
Aug. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation | |||
Loss from discontinued operation, net of tax | $ (7,240,000) | $ (17,000) | |
OKC | |||
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation | |||
Consideration of expenses | $ 2,158,000 | ||
Loss on sale of assets | (3,162,000) | ||
Held for sale | OKC | |||
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation | |||
Loss on sale of assets | (3,162,000) | ||
Loss from discontinued operation | (2,052,000) | (22,000) | |
Loss from discontinued operation, net of tax | (7,240,000) | (17,000) | |
Held for sale | OKC | CPG segment | |||
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation | |||
Loss from discontinued operation | (2,052,000) | ||
Loss from discontinued operation, net of tax | $ (22,000) | ||
Impairment charge on long-lived assets | (1,219,000) | ||
Divestiture cost | (807,000) | ||
Impairment charge related to the real property | $ (2,026,000) |
Discontinued Operation and As_4
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation - Results of operations classified as a discontinued operation, net of tax, in the Condensed Consolidated Statements of Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Results of operations classified as a discontinued operation, net of tax | ||
Loss from discontinued operation before income taxes | $ (7,240,000) | $ (22,000) |
Income tax benefit | 5,000 | |
Loss from discontinued operation, net of tax | (7,240,000) | (17,000) |
OKC | ||
Results of operations classified as a discontinued operation, net of tax | ||
Loss on sale of assets | (3,162,000) | |
Held for sale | OKC | ||
Results of operations classified as a discontinued operation, net of tax | ||
Net Sales | 3,410,000 | 8,636,000 |
Operating costs | (5,462,000) | (8,658,000) |
Loss from discontinued operation | (2,052,000) | (22,000) |
Loss from discontinued operation - impairment and divestiture costs | (2,026,000) | |
Loss on sale of assets | (3,162,000) | |
Loss from discontinued operation before income taxes | (7,240,000) | (22,000) |
Income tax benefit | 5,000 | |
Loss from discontinued operation, net of tax | $ (7,240,000) | $ (17,000) |
Discontinued Operation and As_5
Discontinued Operation and Assets and Liabilities Related to Discontinued Operation - Discontinued operation in the Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying amounts of major classes of assets and liabilities, which are included in assets and liabilities related to discontinued operation in the Condensed Consolidated Balance Sheets | ||
Noncurrent assets related to discontinued operation | $ 3,440 | |
Liabilities related to discontinued operation | $ 213 | 1,745 |
Held for sale | OKC | ||
Carrying amounts of major classes of assets and liabilities, which are included in assets and liabilities related to discontinued operation in the Condensed Consolidated Balance Sheets | ||
Accounts receivable, net | 38 | 1,016 |
Prepaid and other assets | 31 | 338 |
Inventories, net | 55 | 4,758 |
Building and improvements, net | 1,428 | |
Assets related to discontinued operation | 1,552 | 6,112 |
Noncurrent assets related to discontinued operation | 3,440 | |
Accounts payable | 197 | 1,272 |
Accrued employee compensation and other costs | 16 | 473 |
Liabilities related to discontinued operation | $ 213 | $ 1,745 |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventories | ||
Raw material and common parts | $ 7,828,000 | $ 7,199,000 |
Work-in-process | 6,466,000 | 6,490,000 |
Finished goods | 491,000 | 1,199,000 |
Inventory, Gross | 14,785,000 | 14,888,000 |
Less inventory reserve | (587,000) | (602,000) |
Total inventories | $ 14,198,000 | $ 14,286,000 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of property, plant and equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment | ||
Property, plant and equipment, Gross | $ 24,056 | $ 23,366 |
Less accumulated depreciation and amortization | (17,078) | (16,011) |
Property, plant and equipment, net | 6,978 | 7,355 |
Buildings and building improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, Gross | 8,447 | 7,838 |
Machinery, equipment and tooling | ||
Property, Plant and Equipment | ||
Property, plant and equipment, Gross | 15,503 | 14,526 |
Construction in progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, Gross | $ 106 | $ 1,002 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment | ||
Depreciation and amortization expense | $ 1,083,000 | $ 951,000 |
Depreciation | 1,042,000 | 927,000 |
Amortization expense | 41,000 | 24,000 |
Property, plant and equipment, Gross | 24,056,000 | 23,366,000 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
ROU assets | 160,000 | 185,000 |
Property, plant and equipment, Gross | 15,503,000 | 14,526,000 |
Construction in progress | ||
Property, Plant and Equipment | ||
Construction in progress | 106,000 | 1,002,000 |
Property, plant and equipment, Gross | 106,000 | $ 1,002,000 |
Construction in progress (CIP) machinery & equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, Gross | 93,000 | |
Construction in progress (CIP) building improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, Gross | $ 13,000 |
Long-Term Debt - Summary of lon
Long-Term Debt - Summary of long term debt (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Long-Term Debt | ||
Long-term debt, Total | $ 2,103,000 | $ 501,000 |
Less current portion | (2,103,000) | (501,000) |
Long term debt | 0 | |
Line of credit payable to a financial institution: Interest rate is equal to the greater of 8.0% or Prime Rate plus 1.0%. (Interest rate 9.5% as of December 31, 2023) | ||
Long-Term Debt | ||
Long-term debt, Total | 2,103,000 | 0 |
Equipment note obligations; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor factor 1.79553% - 1.869304% at time of funding) | ||
Long-Term Debt | ||
Long-term debt, Total | 0 | 491,000 |
Equipment financing lease obligations; 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) | ||
Long-Term Debt | ||
Long-term debt, Total | $ 0 | $ 10,000 |
Long-Term Debt - Summary of l_2
Long-Term Debt - Summary of long term debt information (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Line of credit (LOC) | |
Long-Term Debt | |
Percentage of fixed interest rate payable | 9.50% |
Percentage of floating interest rate payable | 8% |
Equipment note obligations; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor factor 1.79553% - 1.869304% at time of funding) | Minimum | |
Long-Term Debt | |
Percentage of floating interest rate payable | 1.79553% |
Equipment note obligations; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor factor 1.79553% - 1.869304% at time of funding) | Maximum | |
Long-Term Debt | |
Percentage of floating interest rate payable | 1.8693% |
Equipment financing lease obligations; 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) | Minimum | |
Long-Term Debt | |
Percentage of floating interest rate payable | 1.82276% |
Equipment financing lease obligations; 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) | Maximum | |
Long-Term Debt | |
Percentage of floating interest rate payable | 1.8693% |
Prime Rate | Line of credit (LOC) | |
Long-Term Debt | |
Percentage of spread on interest rate | 1.0% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | 12 Months Ended | |||||
Jun. 27, 2023 USD ($) | Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Jan. 11, 2022 USD ($) | Jul. 09, 2021 USD ($) | Jun. 28, 2018 USD ($) | |
Long-Term Debt | ||||||
Line of credit | $ 2,103,000 | $ 0 | ||||
Outstanding balance | $ 2,103,000 | 501,000 | ||||
Revolving credit facility | ||||||
Long-Term Debt | ||||||
Term of agreement | 3 years | |||||
Maximum availability | $ 7,000,000 | |||||
Term of invoices unpaid defined as ineligible receivables | 90 days | |||||
Loan origination costs capitalized | $ 104,000 | |||||
Balance outstanding | $ 2,103,000 | |||||
Number of financial covenants | item | 2 | |||||
Minimum tangible net worth | $ 20,000,000 | |||||
Minimum working capital | $ 10,000,000 | |||||
Line of credit (LOC) | ||||||
Long-Term Debt | ||||||
Percentage of fixed interest rate payable | 9.50% | |||||
Outstanding balance | $ 2,103,000 | 0 | ||||
Borrowings base amount | $ 4,897,000 | |||||
Line of credit (LOC) | ATG | ||||||
Long-Term Debt | ||||||
Borrowing base as percentage of eligible domestic and international accounts receivable balances | 85% | |||||
Equipment note obligations; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor factor 1.79553% - 1.869304% at time of funding) | ||||||
Long-Term Debt | ||||||
Term of agreement | 60 months | |||||
Outstanding balance | $ 0 | 491,000 | ||||
Reduced borrowing capacity | $ 1,000,000 | |||||
Equipment financing lease obligations; 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) | ||||||
Long-Term Debt | ||||||
Term of agreement | 60 months | |||||
Maximum availability | $ 1,000,000 | |||||
Outstanding balance | $ 0 | $ 10,000 |
Employee Benefit Plans - Employ
Employee Benefit Plans - Employee Stock Ownership Plan (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 1988 | Dec. 31, 1987 | Dec. 31, 1985 | |
Postretirement Benefit Plan | ||||||
Amount borrowed | $ 2,000,000 | |||||
Outstanding shares subject to repurchase obligation | 0 | |||||
Employee stock ownership plan, term of loan | 40 years | |||||
Employee stock ownership plan, amount of additional loan | $ 1,942,000 | $ 1,942,000 | ||||
Employee stock ownership plan debt structure interest rate description | prime rate | |||||
ESOP, number of allocated shares since inception | 321,141 | |||||
ESOP, number of unallocated shares | 26,752 | 41,270 | ||||
ESOP, compensation expenses | $ 101,000 | $ 101,000 | ||||
Other Postretirement Benefit Plans | ||||||
Postretirement Benefit Plan | ||||||
Grading down percentage foe each year | 0.50% | |||||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed, Next Fiscal Year | 10% | |||||
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate | 5% | |||||
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, before Tax | $ 97,000 | |||||
Future obligation of benefits | 4,262,000 | $ 4,062,000 | $ 5,865,000 | |||
Employer contribution | $ 147,000 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of amounts recognized in the balances sheets (Details) - Other Postretirement Benefit Plans - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Amounts recognized in the balances sheets | ||
Current portion - retirement benefits and other | $ 97 | $ 87 |
Long-term liabilities - retirement benefits and other | 4,165 | 3,975 |
Postretirement benefit obligation | 4,262 | 4,062 |
Accumulated other comprehensive loss, before income taxes: | ||
Net actuarial loss | $ 3,024 | $ 2,958 |
Employee Benefit Plans - Sche_2
Employee Benefit Plans - Schedule of beginning and ending balances of accumulated postretirement benefit obligations (Details) - Other Postretirement Benefit Plans - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Benefit Plans | ||
Accumulated postretirement benefit obligations at the beginning of the year | $ 4,062,000 | $ 5,865,000 |
Interest Cost | 192,000 | 157,000 |
Actuarial loss/(gain) | 152,000 | (1,838,000) |
Benefits paid | (144,000) | (122,000) |
Accumulated postretirement benefit obligations at the end of the year | $ 4,262,000 | $ 4,062,000 |
Employee Benefit Plans - Sche_3
Employee Benefit Plans - Schedule of financial information for this Plan (Details) - Other Postretirement Benefit Plans - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Postretirement Benefit Plan | ||
Interest Cost | $ 192 | $ 157 |
Recognized actuarial loss | 87 | 151 |
Pension cost | 279 | 308 |
Benefits Paid | $ 144 | $ 122 |
Employee Benefit Plans - Sche_4
Employee Benefit Plans - Schedule of assumptions used as of and for the years (Details) - Other Postretirement Benefit Plans | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Postretirement Benefit Plan | ||
Benefit obligation | 5.25% | 4.875% |
Pension cost | 4.875% | 2.75% |
Employee Benefit Plans - Sche_5
Employee Benefit Plans - Schedule of postretirement health care benefits costs and obligation (Details) - Other Postretirement Benefit Plans - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Postretirement Benefit Plan | ||
Benefit obligation | $ 543 | $ 636 |
Aggregate of service and interest cost | 31 | 30 |
Benefit obligation | (450) | (515) |
Aggregate of service and interest cost | $ (25) | $ (23) |
Employee Benefit Plans - Sche_6
Employee Benefit Plans - Schedule of benefit payments (Details) - Other Postretirement Benefit Plans $ in Thousands | Dec. 31, 2023 USD ($) |
Employee Benefit Plans | |
2024 | $ 147 |
2025 | 161 |
2026 | 172 |
2027 | 184 |
2028 | 196 |
2029 - 2033 | $ 1,147 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of common shareholders' equity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Shareholders' Equity | ||
Beginning balance | $ 35,112 | $ 35,366 |
Retirement benefits adjustment | 49 | 1,672 |
Stock based compensation | 120 | 191 |
Net Income (Loss) | (10,787) | (2,117) |
Ending balance | 24,494 | 35,112 |
Retained earnings | ||
Shareholders' Equity | ||
Beginning balance | 23,741 | 25,858 |
Net Income (Loss) | (10,787) | (2,117) |
Ending balance | 12,954 | 23,741 |
Accumulated Other Comprehensive Loss | ||
Shareholders' Equity | ||
Beginning balance | (2,337) | (3,908) |
Retirement benefits adjustment | (52) | 1,571 |
Ending balance | (2,389) | (2,337) |
Common Stock | ||
Shareholders' Equity | ||
Beginning balance | 523 | 523 |
Stock based compensation | 2 | |
Ending balance | 525 | 523 |
Capital in excess of par value | ||
Shareholders' Equity | ||
Beginning balance | 14,556 | 14,500 |
Stock based compensation | 61 | 56 |
Ending balance | 14,617 | 14,556 |
ESOT | ||
Shareholders' Equity | ||
Beginning balance | (157) | (258) |
Retirement benefits adjustment | 101 | 101 |
Ending balance | (56) | (157) |
Treasury stock | ||
Shareholders' Equity | ||
Beginning balance | (1,214) | (1,349) |
Stock based compensation | 57 | 135 |
Ending balance | $ (1,157) | $ (1,214) |
Shareholders' Equity - Calculat
Shareholders' Equity - Calculation of earning per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Shareholders' Equity | ||
Common shares that could potentially dilute basic earnings per share | 24,110 | 27,010 |
Loss from continuing operations | $ (3,547) | $ (2,100) |
Loss from discontinued operation, net of tax | (7,240) | (17) |
Net loss | $ (10,787) | $ (2,117) |
Weighted average common shares outstanding (basic) | 2,470,000 | 2,422,000 |
Unvested restricted stock | 24,000 | 27,000 |
Weighted average common shares outstanding (diluted) | 2,494,000 | 2,449,000 |
Basic | ||
Continuing operations | $ (1.44) | $ (0.87) |
Discontinued operation | (2.93) | (0.01) |
Basic earnings per share | (4.37) | (0.88) |
Diluted | ||
Continuing operations | (1.44) | (0.87) |
Discontinued operation | (2.93) | (0.01) |
Diluted earnings per share | $ (4.37) | $ (0.88) |
Shareholders' Equity - Share Re
Shareholders' Equity - Share Repurchase Program (Details) - Share Repurchase Program - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Jan. 31, 2006 | |
Shareholders' Equity | |||
Number of common shares authorized to be purchased | 450,000 | ||
Number of shares purchased | 360,615 | ||
Remaining number of shares authorized to be purchased | 89,385 | ||
Shares purchased | 0 | 0 |
Shareholders' Equity - 2022 Equ
Shareholders' Equity - 2022 Equity Incentive Plan (Details) - USD ($) | 12 Months Ended | ||||
Jun. 09, 2023 | May 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 13, 2023 | |
Shareholders' Equity | |||||
Granted | 17,381 | ||||
Stock-based compensation expense related to the restrictive share awards | $ 0 | $ 191,000 | |||
Decrease for tax withholding obligation | $ 22,000 | ||||
Fair value of granted date | $ 11.50 | ||||
Maximum potential stock-based compensation expense | $ 400,000 | ||||
Restricted share awards | |||||
Shareholders' Equity | |||||
Granted | 18,687 | 32,921 | |||
Stock-based compensation expense related to the restrictive share awards | $ 120,000 | ||||
Fair value of granted date | $ 11.74 | $ 11.07 | |||
Service-based awards | |||||
Shareholders' Equity | |||||
Compensation expense not yet recognized | $ 276,000 | ||||
Executive officer | Performance shares | Minimum [Member] | |||||
Shareholders' Equity | |||||
Percentage of targeted amount for issue of shares | 0% | ||||
Executive officer | Performance shares | Maximum [Member] | |||||
Shareholders' Equity | |||||
Percentage of targeted amount for issue of shares | 200% | ||||
2022 Equity Incentive Plan | |||||
Shareholders' Equity | |||||
Share-based payment award, number of shares authorized | 200,000 | ||||
Number of restricted stock issued | 23,249 | ||||
Shares withheld for tax withholding obligation | 1,748 | ||||
2022 Equity Incentive Plan | Non-employee directors | |||||
Shareholders' Equity | |||||
Vest offer service period | 12 months | ||||
Number of restricted stock issued | 10,410 | ||||
Compensation expense not yet recognized | $ 125,000 | ||||
Long-term incentive plan | |||||
Shareholders' Equity | |||||
Share-Based Payment Arrangement, Grantee Status [Extensible Enumeration] | Executive officer | ||||
Long-term incentive plan | Service-based awards | |||||
Shareholders' Equity | |||||
Share-based payment award, award vesting period | 3 years | ||||
Granted | 1,759 | ||||
Long-term incentive plan | Performance shares | |||||
Shareholders' Equity | |||||
Share -based compensation arrangement by share based payment award time period for achievement of financial metrics. | 5,793 | ||||
Long-term incentive plan | Executive officer | Service-based awards | |||||
Shareholders' Equity | |||||
Vest offer service period | 1 year |
Shareholders' Equity - Summar_2
Shareholders' Equity - Summary of restricted share awards (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Shares | ||
Granted | 17,381 | |
Weighted Average Grant Date Fair Value | ||
Granted | $ 11.50 | |
Restricted Stock [Member] | ||
Shares | ||
Unvested at the beginning | 27,010 | 6,576 |
Granted | 18,687 | 32,921 |
Vested | 23,249 | 12,487 |
Unvested at the end | 22,448 | 27,010 |
Weighted Average Grant Date Fair Value | ||
Unvested, beginning balance | $ 11.09 | $ 7.60 |
Granted | 11.74 | 11.07 |
Vested | 11.26 | 9.22 |
Unvested, ending balance | $ 11.45 | $ 11.09 |
Income Taxes - Income tax provi
Income Taxes - Income tax provision from operations included in consolidated statements of operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ (24) | $ (61) |
State | (2) | |
Total current tax | (26) | (61) |
Deferred: | ||
Federal | (1,072) | 626 |
State | 0 | 0 |
Total deferred | (1,072) | 626 |
Income tax (expense)/benefit | (1,098) | 565 |
Current: | ||
Federal | 42 | |
Total Current | 42 | |
Deferred: | ||
Federal | (37) | |
Total Deferred | (37) | |
Total Discontinued Operation | 5 | |
Total Income Tax (Expense)/Benefit | $ (1,098) | $ 570 |
Income Taxes - Effective tax ra
Income Taxes - Effective tax rate based upon total income tax provision (benefit) from continuing operations (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Federal statutory rate | 21% | 21% |
Permanent non-taxable income | 0.20% | (0.10%) |
Business credits | 2.80% | 0.10% |
Foreign-derived intangible income deduction | 0% | 0% |
State taxes, net of federal benefit | (0.10%) | (0.10%) |
Valuation allowance | (68.60%) | 0% |
Other | (0.10%) | 0.30% |
Effective tax rate | (44.80%) | 21.20% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (liabilities) (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Tax Assets: | ||
Inventories | $ 254,000 | $ 110,000 |
Accrued employees compensation and benefits costs | 362,000 | 399,000 |
Postretirement obligation (accumulated other comprehensive income) | 635,000 | 621,000 |
State credit carryforwards | 177,000 | 173,000 |
Federal Net operating loss carryforward | 1,493,000 | |
Bad debt reserve | 26,000 | 25,000 |
Warranty reserve | 114,000 | 122,000 |
Research and experimental expenses | 751,000 | 615,000 |
Customer accruals | 344,000 | |
Sec 163(j) disallowed interest | 83,000 | |
Other | 40,000 | |
Total deferred tax assets | 4,279,000 | 2,065,000 |
Valuation allowance | (3,145,000) | (173,000) |
Net deferred tax assets | 1,134,000 | 1,892,000 |
Deferred tax liabilities: | ||
Prepaid expenses | (71,000) | (70,000) |
Property, plant and equipment | (853,000) | (774,000) |
Other receivable - insurance proceeds | (210,000) | |
Total deferred tax liabilities | $ (1,134,000) | (844,000) |
Net deferred tax asset | $ 1,048,000 |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
State net operating loss carryforwards, state tax credit carryforwards and other state net deferred tax assets valuation allowance | $ 2,972,000 | $ 173,000 |
Valuation allowance | 3,145,000 | 173,000 |
Tax credit carryforward | 7,100,000 | |
Uncertain tax positions or unrecognized tax benefits | 0 | 0 |
Domestic Tax Authority | New York | ||
Income Taxes | ||
Tax credit carryforward | $ 219,000 | $ 173,000 |
Tax credit carryforward expiration date in years | 2024 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 12 Months Ended | |||
Jan. 13, 2022 USD ($) | Dec. 22, 2021 | Jun. 07, 2021 USD ($) | Dec. 31, 2023 USD ($) | |
Commitments and Contingencies | ||||
Claim covered | $ 1,000,000 | |||
Claim liability | 1,000,000 | |||
Proceeds from insurance | 1,000,000 | |||
Damages sought value | $ 5,000,000 | |||
Insured amount | $ 3,000,000 | |||
Retention amount | $ 250,000 | |||
Excess coverage policy | 3,000,000 | |||
Payment as retention from excess coverage policy | 3,000,000 | |||
Gain or loss on litigation | $ 0 | |||
Former CEO | Minimum | ||||
Commitments and Contingencies | ||||
Multiplier of severance payment with average annual compensation | 2.99 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transactions | ||
Legal fees | $ 8,000 | $ 51,000 |
Accrued unbilled legal fees | $ 0 | $ 13,000 |
Customer and Supplier Concent_2
Customer and Supplier Concentration (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Customer and Supplier Concentration | ||
Revenues | $ 12,129,000 | $ 10,541,000 |
Sale | Customer concentration | ATG | ||
Customer and Supplier Concentration | ||
Concentration of risk (as a percent) | 90% | 85% |
Purchases | Supplier concentration | ATG | ||
Customer and Supplier Concentration | ||
Concentration of risk (as a percent) | 10% | 12% |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (10,787) | $ (2,117) |
Insider Trading Arrangements
Insider Trading Arrangements | 12 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |