Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 22, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | ATRM Holdings, Inc. | |
Entity Central Index Key | 908,598 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,396,219 | |
Trading Symbol | ATRM | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 569 | $ 1,247 |
Restricted cash | 280 | 150 |
Accounts receivable, net | 4,448 | 2,604 |
Costs and estimated profit in excess of billings | 866 | 1,045 |
Inventories | 1,304 | 1,404 |
Fair value of contingent earn-out receivable, current | 548 | 359 |
Other current assets | 409 | 237 |
Total current assets | 8,424 | 7,046 |
Property, plant and equipment, net | 4,335 | 4,393 |
Fair value of contingent earn-out receivable, noncurrent | 150 | 202 |
Goodwill | 3,020 | 3,020 |
Intangible assets, net | 1,925 | 2,117 |
Total assets | 17,854 | 16,778 |
Current liabilities: | ||
Notes payable – revolving lines of credit | 4,114 | 3,420 |
Current portion of long-term debt | 1,132 | 1,675 |
Trade accounts payable | 4,719 | 3,776 |
Billings in excess of costs and estimated profit | 813 | 652 |
Accrued compensation | 440 | 407 |
Fair value of contingent earn-out payable | 991 | 967 |
Other accrued liabilities | 1,727 | 2,264 |
Total current liabilities | 13,936 | 13,161 |
Long-term debt, less current portion | 15,212 | 14,069 |
Deferred income taxes | 21 | 19 |
Commitments and contingencies | ||
Shareholders’ deficit: | ||
Common stock, $.001 par value; 3,000,000 shares authorized; 2,366,219 shares issued and outstanding at March 31, 2017 and December 31, 2016 | 2 | 2 |
Additional paid-in capital | 69,719 | 69,702 |
Accumulated deficit | (81,036) | (80,175) |
Total shareholders’ deficit | (11,315) | (10,471) |
Total liabilities and shareholders’ deficit | $ 17,854 | $ 16,778 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ .001 | $ .001 |
Common stock, shares authorized | 3,000,000 | 3,000,000 |
Common stock, shares issued | 2,366,219 | 2,366,219 |
Common stock, shares outstanding | 2,366,219 | 2,366,219 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Net sales | $ 9,404 | $ 5,051 |
Costs and expenses: | ||
Cost of sales | 8,183 | 5,434 |
Selling, general and administrative expenses | 1,703 | 1,027 |
Total costs and expenses | 9,886 | 6,461 |
Operating loss | (482) | (1,410) |
Other (expense) income: | ||
Interest expense | (563) | (301) |
Change in fair value of contingent earn-outs, net | 188 | 1 |
Loss before income taxes | (857) | (1,710) |
Income tax expense | (4) | (4) |
Net loss | $ (861) | $ (1,714) |
Net loss per share, basic and diluted | $ (0.36) | $ (0.78) |
Weighted average common shares outstanding, basic and diluted | 2,366,000 | 2,206,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (861) | $ (1,714) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 88 | 80 |
Amortization expense, intangible assets | 192 | 51 |
Amortization expense, deferred financing costs | 52 | 9 |
Share-based compensation expense | 17 | 67 |
Loss on sale of equipment | 9 | |
Deferred income taxes | 2 | 2 |
Change in fair value of contingent earn-out receivable | (213) | (1) |
Change in fair value of contingent earn-out payable | 24 | |
Imputed interest on seller deferred payment obligations | 18 | |
Paid-in-kind Interest (“PIK Interest”) | 613 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,844) | 1,492 |
Costs and estimated profit in excess of billings | 179 | (274) |
Inventories | 100 | 297 |
Other current assets | (172) | (7) |
Trade accounts payable | 943 | (1,127) |
Billings in excess of costs and estimated profit | 161 | (225) |
Accrued compensation | 33 | 156 |
Other accrued liabilities | (537) | (669) |
Net cash used in operating activities | (1,205) | (1,854) |
Cash flows from investing activities: | ||
Proceeds from earn-out consideration | 76 | 38 |
Purchase of property and equipment | (42) | (48) |
Sale of equipment | 11 | 1 |
Net cash generated by (used in) investing activities | 45 | (9) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt | 500 | |
Proceeds from revolving line of credit | 9,029 | 3,683 |
Principal payments on revolving line of credit | (8,386) | (749) |
Payment of deferred financing costs | (155) | |
Principal payments on long-term debt | (531) | (1,299) |
Net cash generated by financing activities | 612 | 1,480 |
Net decrease in cash, cash equivalents and restricted cash | (548) | (383) |
Cash, cash equivalents and restricted cash at beginning of period | 1,397 | 624 |
Cash, cash equivalents and restricted cash at end of period | 849 | 241 |
Supplemental cash flow information: | ||
Cash paid for interest expense | 213 | 635 |
Deferred financing costs recorded in accounts payable | $ 55 | $ 55 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of ATRM Holdings, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Unless the context otherwise requires, references in the Notes to Condensed Consolidated Financial Statements to (i) “ATRM,” the “Company,” “we,” “us” and “our,” refer to ATRM Holdings, Inc. and its consolidated subsidiaries, (ii) “KBS” refers to our Maine-based modular housing manufacturing business operated by our wholly-owned subsidiary KBS Builders, Inc. and (iii) “EBGL” refers to our Minnesota-based operations including EdgeBuilder, Inc. (“EdgeBuilder”), a manufacturer of structural wall panels, permanent wood foundation systems and other engineered wood products, and Glenbrook Building Supply, Inc. (“Glenbrook”), a retail supplier of lumber and other building supplies. Through our wholly-owned subsidiaries, KBS, Glenbrook and EdgeBuilder, we manufacture modular buildings for commercial and residential applications in production facilities located in South Paris and Waterford, Maine, operate a retail lumber yard located in Oakdale, Minnesota, and manufacture structural wall panels, permanent wood foundation systems and other engineered wood products for use in construction of commercial and residential buildings in a production facility located in Prescott, Wisconsin. Our previous wholly-owned subsidiary, Maine Modular Haulers, Inc. (“MMH”) was used to provide transportation, logistics and other related services for the transportation of KBS’s completed modular buildings. In 2016, the Company decided that the shipping of KBS’s modular buildings could be done more efficiently and more economically on an outsourced basis. Under the outsourced model, KBS now directly coordinates the transportation and logistics of the delivery of its modular buildings and contracts with third-party hauling companies to transport the modules. As part of the decision to move to an outsourced transportation model, we disposed of MMH’s trucks to an unrelated third party and the frames (trailers) were transferred (at book value) to KBS from MMH. MMH was officially dissolved on March 21, 2017. The Company’s corporate headquarters is located at Glenbrook’s offices in Oakdale, Minnesota, a suburb of St. Paul. The Condensed Consolidated Balance Sheet at December 31, 2016, has been derived from our audited financial statements. In the opinion of management, the unaudited interim Condensed Consolidated Financial Statements include all adjustments (consisting only of normal, recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the operating results to be expected for the full year or any future period. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted, pursuant to such rules and regulations. Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2016. |
Financial Position, Liquidity a
Financial Position, Liquidity and Capital Resources | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Position, Liquidity and Capital Resources | 2. FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES We acknowledge that the Company continues to face a challenging operating environment, and while we continue to focus on improving our overall profitability, we reported an operating loss for the quarter ended March 31, 2017. We have incurred significant operating losses in recent years and, as of March 31, 2017, we had an accumulated deficit of approximately $81 million. Working capital has remained negative over the past several years. Cash used in operating activities, while improved as compared to the quarter ended March 31, 2016, remains negative for the quarter ended March 31, 2017. This has required us to generate funds from investing and financing activities. At March 31, 2017, we had outstanding debt of approximately $20.5 million. We have issued various promissory notes to finance our acquisitions of KBS and EBGL and to provide for our general working capital needs. As of March 31, 2017, we had outstanding debt totaling approximately $20.5 million. Our debt included: (i) $2.3 million principal outstanding on KBS’s $4.0 million revolving credit facility under a loan and security agreement with Gerber Finance Inc. (“Gerber Finance”) (the “KBS Loan Agreement”), $1.8 million principal outstanding on EBGL’s $3.0 million revolving credit facility under a loan and security agreement with Gerber Finance (the “EBGL Loan Agreement”) and $3.0 million principal outstanding under a loan and security agreement with Gerber Finance used to finance the acquisition of EBGL (the “Acquisition Loan Agreement”); (ii) $4.5 million principal amount of unsecured promissory notes issued to Lone Star Value Investors, LP (“LSVI”) and $7.6 million principal amount of unsecured promissory notes issued to Lone Star Value Co-Invest I, LP (“LSV Co-Invest I”), with interest payable semiannually and any unpaid principal and interest due on April 1, 2019 (as noted in Note 19, the promissory notes issued to LSVI and LSV Co-Invest I were exchanged for preferred stock on September 29, 2017); and (iii) $0.4 million principal amount outstanding under an unsecured promissory note issued to the primary sellers of KBS, payable in monthly installments of $100,000, inclusive of interest, through July 1, 2017, which have since been paid in full, with the final payment made as scheduled in July 2017. We also had obligations to make $0.75 million in deferred cash payments to the sellers of EBGL, payable in quarterly installments of $250,000, inclusive of interest, through October 1, 2017. As noted in Note 19, the deferred payments to the sellers of EBGL were restructured in June 2017. Jeffrey E. Eberwein, Chairman of the Company’s Board of Directors (the “Board”), is the manager of Lone Star Value Investors GP, LLC (“LSVGP”), the general partner of LSVI and LSV Co-Invest I, and the sole member of Lone Star Value Management, LLC (“LSVM”), the investment manager of LSVI. At the applicable test dates, we were not in compliance with the following financial covenants under our loan agreements with Gerber Finance: (i) a requirement for KBS to maintain a minimum leverage ratio of 7:1 for the fiscal year ended December 31, 2016, as its actual leverage ratio for such period was negative; (ii) a requirement for KBS not to incur a net annual post-tax loss in any fiscal year of the loan agreements, as KBS’s net annual post-tax loss for the fiscal year ended December 31, 2016 was $3.2 million; and (iii) a requirement to deliver the Company’s fiscal year-end financial statements reviewed by an independent certified accounting firm acceptable to Gerber Finance within 105 days from the fiscal year ended December 31, 2016. In August 2017, Gerber Finance provided us with a waiver for these events. As of December 31, 2017, KBS was not in compliance with the financial covenant requiring no net annual post-tax loss for KBS or the minimum leverage ratio covenant as of the next test date, December 31, 2017. We have begun discussions with Gerber Finance as to obtaining a waiver for these events. If we fail to obtain a waiver from Gerber Finance, Gerber Finance may demand the repayment of the credit facilities amount outstanding and any unpaid interest thereon. There can be no assurance that our existing cash reserves, together with funds generated by our operations and any future financings, will be sufficient to satisfy our debt payment obligations, to avoid liquidity issues and/or fund operations beyond this fiscal year. Our inability to generate funds from our operations and/or obtain financing sufficient to satisfy our payment obligations may result in our obligations being accelerated by our lenders, which would likely have a material adverse effect on our business, financial condition and results of operations. In addition, continued operating losses could further trigger violations of covenants under our debt agreements, resulting in accelerated payment of these loans. Given these uncertainties, there can be no assurance that our existing cash reserves will be sufficient to avoid liquidity issues and/or fund operations beyond this fiscal year. During 2016 and 2017, we implemented several strategic initiatives, effected certain actions and continued to consider additional actions to improve the Company’s overall profitability and increase cash flows, including: ● KBS’s strategic shift away from large commercial projects with significant site work to focus on its core competency of manufacturing modular buildings; ● KBS’s efforts to improve operating efficiencies, including reconfiguring the South Paris factory to increase production, investments in automated equipment to reduce labor costs, implementing lean manufacturing techniques, and elimination of duplicate overhead costs through the shut-down of the Waterford factory; ● Reduction in KBS workforce including manufacturing, sales, engineering and front-office staff; ● KBS increased pricing on its base ranch model in 2017, and in November 2017, instituted a 6% lumber surcharge on all new orders to help offset the significant rise in lumber and other raw materials costs; ● KBS has implemented a new dynamic pricing model for 2018, which is designed to determine its bid price quoted to customers using the most current cost information; ● KBS is exploring opportunities to monetize the Waterford facility, including a potential sale or lease to a third party; ● In July 2017, KBS made the final payment due to the primary seller of KBS, freeing up $100,000 per month of cash flows to be used for operations; ● In October 2016, the Company acquired the EBGL businesses, which we believe that, after a transitional period, will generate net income and positive cash flows for the Company; ● In 2017, we instituted a lumber hedging program for EBGL to assist in preserving existing margins against the potential large fluctuations in lumber raw material prices; ● In August 2016, we amended certain of our debt agreements to allow the Company to pay PIK Interest on approximately $11 million of our debt, reducing strain on current cash flows; ● As disclosed in Note 19, in June 2017, we refinanced EBGL’s revolving credit facility and amended the terms of our agreement with EdgeBuilder Wall Panels, Inc. and Glenbrook Lumber & Supply, Inc. (collectively, the “EBGL Sellers”) providing for deferred payments to obtain more favorable lending and payment terms and reduce total fees paid under these agreements; ● As disclosed in Note 19, in September 2017, we converted $13.3 million of the Company’s outstanding debt, including accrued interest, to preferred stock; ● As disclosed in Note 19, in January 2018, the Company issued an unsecured promissory note in the principal amount of $0.5 million to LSV Co-Invest I to provide additional working capital for the Company; and ● We continue to look for opportunities to refinance our remaining debt on more favorable terms. Although we cannot predict with certainty the outcome of any individual action to generate liquidity, including the availability of additional debt financing, or whether such actions would generate the expected liquidity as currently planned, we believe that through these actions taken as a whole, and management’s continued efforts to improve operating results and find additional liquidity resources, we can satisfy our estimated liquidity needs for the next twelve months. In addition to the above actions, although not a binding commitment, LSVM has advised us of its present intention to continue to financially support the Company in the event that additional financing is required. From 2014 through 2017, and again in 2018, LSVM has provided financial support in the form of financing through various debt agreements disclosed in Note 14 and Note 19. Based on LSVM’s historical support of the Company, management believes that additional financing may be provided by LSVM or its affiliates, if necessary, in the future. Our historical operating results indicate substantial doubt exists related to the Company’s ability to continue as a going concern. We believe that the actions discussed above have either already occurred or are probable of occurring, and mitigate the substantial doubt raised by our historical operating results, as well as satisfy our estimated liquidity needs for the twelve months from the issuance of the Condensed Consolidated Financial Statements. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combination | 3. BUSINESS COMBINATION On October 4, 2016, the Company acquired certain assets of the EBGL Sellers through the Company’s wholly-owned subsidiaries EdgeBuilder and Glenbrook, respectively, pursuant to the terms of an Asset Purchase Agreement, dated as of the same date, by and among the Company, EdgeBuilder, Glenbrook, the EBGL Sellers and the individual owners of the EBGL Sellers (the “EBGL Acquisition”). The Company operates the businesses of EdgeBuilder and Glenbrook on a combined basis, and such businesses are referred to on a combined basis as EBGL. EBGL’s results are included in our consolidated statement of operations since October 4, 2016, the date of the EBGL Acquisition. The following unaudited pro forma financial information presents the combined results of ATRM and the EBGL Sellers for the three-month period ended March 31, 2016 as if the EBGL Acquisition had occurred on January 1, 2016 (in thousands, except per share amount): 2016 Pro forma net sales $ 10,080 Pro forma net loss (1,111 ) Pro forma loss per share – basic and diluted (0.48 ) The above unaudited pro forma financial information is not necessarily indicative of what our consolidated results of operations actually would have been or what results may be expected in the future. |
Recently Adopted Accounting Pro
Recently Adopted Accounting Pronouncement | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Pronouncement | 4. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENT In November 2015, the Financial Accounting Standards Board issued ASU No. 2015-17, Income Taxes (Topic 740 : Balance Sheet Classification of Deferred Taxes |
Restricted Cash
Restricted Cash | 3 Months Ended |
Mar. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | 5. RESTRICTED CASH The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same such amounts shown in the condensed consolidated statement of cash flows. 3/31/2017 Cash and cash equivalents $ 569 Restricted cash 280 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated balance sheet $ 849 Amounts included in restricted cash represent those on deposit with Gerber Finance from time-to-time as additional collateral to support borrowing under the KBS revolving line of credit facility. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. FAIR VALUE MEASUREMENTS Financial assets reported at fair value on a recurring basis included the following at March 31, 2017 (in thousands): Level 1 Level 2 Level 3 Contingent earn-out receivable related to the transfer of test handler product line: Current portion $ — $ — $ 548 Noncurrent portion — 150 Total $ — $ — $ 698 Contingent earn-out payable related to the EBGL Acquisition $ — $ — $ (991 ) The following table summarizes the activity for our Level 3 assets and liabilities measured on a recurring basis (in thousands): Earn-out Receivable (1) Earn-out Payable (2) Balance at December 31, 2016 $ 561 $ (967 ) Add – adjustment based on re-assessments 213 — Add – net increase based on re-assessments — (24 ) Subtract – settlements (76 ) — Balance at March 31, 2017 $ 698 $ (991 ) (1) Earn-out receivable related to the transfer of our test handler product line in 2014. (2) Earn-out payable related to the EBGL Acquisition. Quantitative information about Level 3 fair value measurements on a recurring basis at March 31, 2017, is summarized in the table below: Fair Value Asset Valuation Technique Unobservable Input Amount Earn-out receivable related to transfer of test handler product line Discounted cash flow Total projected revenue Performance weighted average Discount rate $11.3 million 60% to 125% 10 % Contingent earn-out payable Discounted cash flow Estimated gross profit for earn-out period Discount rate $3.4 million 10 % |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable, Net | 7. ACCOUNTS RECEIVABLE, NET Accounts receivable consists of the following (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Contract billings $ 4,294 $ 2,330 Retainage 158 370 Subtotal 4,452 2,700 Less – allowance for doubtful accounts (4 ) (96 ) Accounts receivable, net $ 4,448 $ 2,604 Retainage balances are expected to be collected within the next twelve months. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | 8. INVENTORIES At March 31, 2017 and December 31, 2016, inventories totaling approximately $1.3 million and $1.4 million, respectively, consisted of raw materials inventory. There are no finished goods or work-in-process inventory included in the inventory balances as of March 31, 2017 or December 31, 2016. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 9. GOODWILL AND INTANGIBLE ASSETS, NET Intangible assets are comprised of the following (in thousands): March 31, 2017 (unaudited) December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 3,020 $ — $ 3,020 $ 3,020 $ — $ 3,020 Trademarks 394 — 394 394 — 394 Total 3,414 — 3,414 3,414 — 3,414 Finite-lived intangible assets: Customer relationships 2,097 (665 ) 1,432 2,097 (586 ) 1,511 Purchased backlog 1,290 (1,191 ) 99 1,290 (1,078 ) 212 Total 3,387 (1,856 ) 1,531 3,387 (1,664 ) 1,723 Total intangible assets $ 6,801 $ (1,856 ) $ 4,945 $ 6,801 $ (1,664 ) $ 5,137 Amortization expense amounted to approximately $192,000 for the three months ended March 31, 2017, and approximately $51,000 for the three months ended March 31, 2016. Estimated amortization of purchased intangible assets over the next five years is as follows (in thousands): 2017 (nine months) $ 336 2018 315 2019 315 2020 315 2021 164 Thereafter 86 Total $ 1,531 |
Uncompleted Construction Contra
Uncompleted Construction Contracts | 3 Months Ended |
Mar. 31, 2017 | |
Contractors [Abstract] | |
Uncompleted Construction Contracts | 10. UNCOMPLETED CONSTRUCTION CONTRACTS The status of uncompleted construction contracts is as follows (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Costs incurred on uncompleted contracts $ 9,899 $ 6,575 Inventory purchased for specific contracts 780 837 Estimated profit 1,667 1,150 Subtotal 12,346 8,562 Less billings to date (12,293 ) (8,169 ) Total $ 53 $ 393 Included in the following balance sheet captions: Costs and estimated profit in excess of billings $ 866 $ 1,045 Billings in excess of costs and estimated profit (813 ) (652 ) Total $ 53 $ 393 The Company had approximately $10.4 million of work under contract remaining to be recognized at March 31, 2017. |
Accounts Payable Retainage
Accounts Payable Retainage | 3 Months Ended |
Mar. 31, 2017 | |
Accounts Payable Retainage | |
Accounts Payable Retainage | 11. ACCOUNTS PAYABLE RETAINAGE Accounts payable of approximately $4.7 million at March 31, 2017, included retainage amounts due to subcontractors of approximately $0.2 million. Accounts payable of approximately $3.8 million at December 31, 2016 included retainage amounts due to subcontractors totaling approximately $0.4 million. Retainage balances at March 31, 2017, are expected to be settled within the next 12 months. |
Other Accrued Liabilities
Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | 12. OTHER ACCRUED LIABILITIES Other accrued liabilities are comprised of the following (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Accrued interest expense $ 374 $ 637 Accrued sales taxes 892 739 Accrued health insurance costs 108 96 Accrued sales rebates 213 327 Accrued warranty 50 49 Other 90 416 Total other accrued liabilities $ 1,727 $ 2,264 Changes in accrued warranty are summarized below (in thousands): Three months ended March 31, 2017 2016 (unaudited) Accrual balance, beginning of period $ 49 $ 39 Accruals for warranties 1 29 Settlements made — (29 ) Accrual balance, end of period $ 50 $ 39 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | 13. NOTES PAYABLE As of March 31, 2017, we had outstanding notes payable of approximately $4.1 million. Our notes payable included (i) $2.3 million principal outstanding on KBS’s $4.0 million revolving credit facility under the KBS Loan Agreement and (ii) $1.8 million principal outstanding on EBGL’s $3.0 million revolving credit facility under the EBGL Loan Agreement. The KBS Loan Agreement provides KBS with a revolving line of credit with borrowing availability of up to $4.0 million. Availability under the line of credit is based on a formula tied to KBS’s eligible accounts receivable, inventory, real estate and other collateral. The KBS Loan Agreement was scheduled to expire on February 22, 2018, but, under the terms of the agreement, was extended automatically for an additional one-year period ending on February 22, 2019. The KBS Loan Agreement will extend again automatically for an additional one-year period unless a party provides prior written notice of termination. Upon the final expiration of the term of the KBS Loan Agreement, the outstanding principal balance is payable in full. Borrowings bear interest at the prime rate plus 2.75%, with interest payable monthly. The KBS Loan Agreement also provides for certain fees payable to Gerber Finance during its term, including a 1.5% annual facilities fee and a 0.10% monthly collateral monitoring fee. KBS’s obligations under the KBS Loan Agreement are secured by all of its property and assets and are guaranteed by ATRM. Unsecured promissory notes issued by KBS and ATRM are subordinate to KBS’s obligations under the KBS Loan Agreement. The KBS Loan Agreement contains representations, warranties, affirmative and negative covenants, events of default and other provisions customary for financings of this type. Financial covenants require that KBS maintain a maximum leverage ratio (as defined in the KBS Loan Agreement) and KBS not incur a net annual post-tax loss in any fiscal year during the term of the KBS Loan Agreement. At March 31, 2017, approximately $2.4 million was outstanding under the KBS Loan Agreement, which, after offset of approximately $0.1 million of unamortized deferred financing costs, is presented at a net amount of approximately $2.3 million on the Condensed Consolidated Balance Sheet. As of December 31, 2017, KBS was not in compliance with the financial covenant requiring no net annual post-tax loss for KBS or the minimum leverage ratio covenant as of the next test date, December 31, 2017. We have begun discussions with Gerber Finance as to obtaining a waiver for these events. Should the Company be unable to obtain a waiver from Gerber Finance, it would become an event of default. The occurrence of any event of default under the KBS Loan Agreement may result in KBS’s obligations under the KBS Loan Agreement becoming immediately due and payable. The EBGL Loan Agreement provides EBGL with a revolving working capital line of credit of up to $3.0 million. Availability under the EBGL Loan Agreement is based on a formula tied to the borrowers’ eligible accounts receivable, inventory and equipment. The initial term of the EBGL Loan Agreement is set to expire on October 3, 2018, but extends automatically for additional one-year periods unless a party provided prior written notice of termination. Borrowings bear interest at the prime rate plus 2.75%, with interest payable monthly and the outstanding principal balance is payable upon the expiration of the term of the EBGL Loan Agreement. Initially, availability under the EBGL Loan Agreement was limited to $1.0 million, which amount could be increased to up to $3.0 million in increments of $500,000 upon the request of the borrowers and in the discretion of Gerber Finance. As of March 31, 2017, maximum availability was set at $2.0 million under the EBGL Loan Agreement. Obligations under the EBGL Loan Agreement were secured by all of the borrowers’ assets and were guaranteed by the Company and its other subsidiaries. The EBGL Loan Agreement contains representations, warranties, affirmative and negative covenants, events of default and other provisions customary for financings of this type. Financial covenants require that EBGL maintains a minimum tangible net worth and a minimum debt service coverage ratio. As of March 31, 2017, the Company expected that it would be in compliance with these financial covenants at the next test date, December 31, 2017; however, as discussed in Note 19, the EBGL Loan Agreement was replaced by a new working capital line of credit with a new lender. At March 31, 2017, approximately $2.0 million was outstanding under the EBGL Loan Agreement, which, after offset of approximately $0.2 million of unamortized deferred financing costs, is presented at a net amount of approximately $1.8 million on the Condensed Consolidated Balance Sheet. As disclosed in Note 19, the Company refinanced the EBGL Loan Agreement through a new $3.0 million revolving working capital line of credit with Premier Bank on June 30, 2017. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 14. LONG-TERM DEBT Long-term debt is comprised of the following (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Promissory note payable to LSVI, a related party, unsecured, interest of 10% per annum (12% per annum PIK Interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 $ 4,522 $ 4,261 Promissory notes payable to LSV Co-Invest I, a related party, unsecured, interest of 10% per annum (12% per annum PIK Interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 7,625 6,773 Promissory note payable to KBS, sellers, unsecured, interest imputed at 9.5%, payable in monthly installments of $100,000 (principal and interest) through July 2017 392 678 Software installment payment agreement, unsecured, interest at 8.0% per annum, payable in monthly installments of $1,199 through September 2020 43 46 Notes payable, secured by equipment, interest at 6.6% to 9.5% per annum, with varying maturity dates through September 2018 16 22 Promissory note payable to Gerber Finance, secured, interest at the current prime rate plus 3.0% payable monthly with any unpaid principal and interest due on December 31, 2018 3,000 3,000 Revolving equipment credit line, unsecured 15 — Deferred payments to EBGL Sellers, secured, interest imputed at 10.0%, quarterly payments of principal and interest of $250,000 beginning April 1, 2017 through October 1, 2017; as disclosed in Note 19, the Company amended the terms of the deferred payments to EBGL Sellers on June 30, 2017 731 964 Total long-term debt 16,344 15,744 Current portion (1,132 ) (1,675 ) Noncurrent portion $ 15,212 $ 14,069 Under the terms of the amended LSVI and LSV Co-Invest I promissory notes, the Company, at its sole option, may elect to make any interest payment in PIK Interest at an effective rate of 12% per annum (versus the 10% interest rate applied to cash payments) for that period. The Company elected the PIK Interest option for its interest payments in 2016 and recorded approximately $1.1 million of PIK Interest as part of the principal balance of the LSVI and LSV Co-Invest I promissory notes at December 31, 2016 and March 31, 2017. Subsequently, the Company has elected the PIK Interest option for its interest payments in 2017. On March 31, 2017, ATRM entered into an additional Securities Purchase Agreement with LSV Co-Invest I. Pursuant to this agreement, LSV Co-Invest I purchased for $0.5 million in cash, an unsecured promissory note dated March 31, 2017, made by ATRM in the principal amount of $0.5 million. The note bears interest at 10.0% per annum, with interest payable semiannually in January and July; provided, however, LSV Co-Invest I may elect to receive any PIK Interest at an annual rate of 12.0%, so long as any such interest payment is made either (x) entirely in PIK Interest or (y) 50% cash and 50% PIK Interest. Except for the principal amount and the PIK Interest feature, the terms of this promissory note are identical to the terms of the previous LSVI and LSV Co-Invest I promissory notes. As disclosed in Note 19, subsequent to March 31, 2017, the Company, LSVI, and LSV Co-Invest I entered into an exchange agreement whereby the outstanding LSVI and LSV Co-Invest I promissory notes, along with accrued interest, were exchanged for 132,548 shares of the Company’s 10.0% Series B Cumulative Preferred Stock. The Company is party to a Registration Rights Agreement with LSVI, providing LSVI with certain demand and piggyback registration rights, effective at any time after July 30, 2014, with respect to the 107,297 shares of our common stock issued upon the conversion of a convertible promissory note held by LSVI in 2014. As of March 31, 2017, LSVI owned 1,067,885 shares of our common stock, or approximately 45.1% of our outstanding shares, including 900,000 shares purchased in a common stock rights offering we completed in September 2015. Jeffrey E. Eberwein, ATRM’s Chairman of the Board, is the manager of LSVGP, the general partner of LSVI and LSV Co-Invest I, and the sole member of LSVM, the investment manager of LSVI. ATRM’s entry into the securities purchase agreements with LSVI and LSV Co-Invest I was approved by a Special Committee of our Board consisting solely of independent directors. |
Stock Incentive Plans and Share
Stock Incentive Plans and Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plan and Share-Based Compensation | 15. STOCK INCENTIVE PLAN AND SHARE-BASED COMPENSATION ATRM uses the fair value method to measure and recognize share-based compensation. We determine the fair value of stock options on the grant date using the Black-Scholes option valuation model. We determine the fair value of restricted stock awards based on the quoted market price of our common stock on the grant date. We recognize the compensation expense for stock options and restricted stock awards on a straight-line basis over the vesting period of the applicable awards. 2014 Incentive Plan The Company has a stock incentive plan that was approved by the Board and became effective on December 4, 2014 (the “2014 Plan”) upon approval by shareholders. The 2014 Plan is administered by the Compensation Committee of the Board. The purpose of the 2014 Plan is to provide employees, consultants and Board members the opportunity to acquire an equity interest in the Company through the issuance of various stock-based awards such as stock options and restricted stock. Under the 2014 Plan, prior to January 1, 2016, 60,000 restricted shares of the Company’s common stock were granted to its directors and its then Chief Financial Officer. The shares vested one year after the grant date and the fair value of the awards was determined to be $4.48 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants amounted to approximately $67,000 for the three months ended March 31, 2016 and is included in the caption “Selling, general and administrative expenses” in our Condensed Consolidated Statement of Operations. On October 19, 2016, ATRM granted 30,000 restricted shares of the Company’s common stock to its Chief Executive Officer, Chief Financial Officer and former Chief Financial Officer (10,000 shares each). The shares vest one year after the grant date and the fair value of the awards was determined to be $2.25 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants amounted to approximately $17,000 for the three months ended March 31, 2017, and is included in the caption “Selling, general and administrative expenses” in our Condensed Consolidated Statement of Operations. The remaining compensation expense of approximately $37,000 has been recognized on a straight-line basis through October 19, 2017. 2003 Stock Incentive Plan A stock incentive plan approved by our shareholders and adopted in May 2003 (the “2003 Plan”) terminated in February 2013. Stock options granted under the 2003 Plan continue to be exercisable according to their individual terms. The following table summarizes stock option activity under the 2003 Plan for the three months ended March 31, 2017: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value (in thousands) Outstanding, January 1, 2017 27,500 $ 6.88 Options expired during the three months ended March 31, 2017 (16,200 ) $ 7.75 Outstanding, March 31, 2017 11,300 $ 5.64 0.62 years $ 0 Exercisable, March 31, 2017 11,300 $ 5.64 0.62 years $ 0 All stock options outstanding at March 31, 2017, March 31 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16. INCOME TAXES We record the benefit we will derive in future accounting periods from tax losses and credits and deductible temporary differences as “deferred tax assets.” We record a valuation allowance to reduce the carrying value of our net deferred tax assets if, based on all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Since 2009, we have maintained a valuation allowance to fully reserve our deferred tax assets. We recorded a full valuation allowance in 2009 because we determined there was not sufficient positive evidence regarding our potential for future profits to outweigh the negative evidence of our three-year cumulative loss position at that time. We expect to continue to maintain a full valuation allowance until we determine that we can sustain a level of profitability that demonstrates our ability to realize these assets. To the extent we determine that the realization of some or all of these benefits is more likely than not based upon expected future taxable income, a portion or all of the valuation allowance will be reversed. Such a reversal would be recorded as an income tax benefit and, for some portion related to deductions for stock option exercises, an increase in shareholders’ equity. At March 31, 2017, we have recorded a deferred tax liability of $20,700 for the taxable differences related to our indefinite-lived intangible assets when calculating our valuation allowance due to the unpredictability of the reversal of these differences. |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | 17. LEGAL PROCEEDINGS The Company is and may become involved in various lawsuits as well as other certain legal proceedings that arise in the ordinary course of business. Information regarding certain material proceedings is provided below. UTHE Technology Corporation v. Aetrium Incorporated Since December 1993, an action brought by UTHE Technology Corporation (“UTHE”) against ATRM and its then sales manager for Southeast Asia (“Sales Manager”), asserting federal securities claims, a RICO claim, and certain state law claims, had been stayed in the United States District Court for the Northern District of California. UTHE’s claims were based on its allegations that four former employees of a Singapore company, which UTHE formerly owned, conspired to and did divert business from the subsidiary, and in turn UTHE, and directed that business to themselves and a secret company they had formed, which forced UTHE to sell its subsidiary shares to the former employee defendants at a distressed price. The complaint alleged that ATRM and the Sales Manager participated in the conspiracy carried out by the former employee defendants. In December 1993, the case was dismissed as to the former employee defendants because of a contract requiring UTHE and them to arbitrate their claims in Singapore. The district court stayed the case against ATRM and the Sales Manager pending the resolution of arbitration in Singapore involving UTHE and three of the former employee defendants, but not involving ATRM or the Sales Manager. ATRM received notice in March 2012 that awards were made in the Singapore arbitration against one or more of the former employee defendants who were parties to the arbitration. In June 2012, UTHE filed a motion to reopen the case against ATRM and the Sales Manager and to lift the stay, which the court granted. On September 13, 2013, the court entered final judgment dismissing all remaining claims UTHE asserted against ATRM in the litigation. On September 23, 2013, UTHE appealed the district court judgment to the United States Court of Appeal for the Ninth Circuit only as to the dismissal of UTHE’s RICO claim. The appeal was argued in a court hearing on November 19, 2015. On December 11, 2015, the court of appeal issued an order reversing the district court’s grant of summary judgment of UTHE’s RICO claim and remanded the case back to the district court for further proceedings. On April 20, 2016, the district court stayed the case pending a decision in the Supreme Court case RJR Nabisco, Inc. v. The European Community RJR Nabisco RJR Nabisco KBE Building Corporation v. KBS Builders, Inc., and ATRM Holdings, Inc., et al. At the time of the KBS acquisition in April 2014, KBS purchased receivables for a construction project known as the Nelton Court Housing Project (“Nelton Court”) in Hartford, CT, and also performed certain “punch-list” and warranty work. Modular units for Nelton Court were supplied by KBS Building Systems, Inc. (“KBS-BSI”) pursuant to a contract with KBE Building Corporation (“KBE”). KBE has asserted claims against KBS-BSI, KBS and ATRM arising out of alleged delays, and for the repair of certain alleged defects in the modular units supplied to the project. KBE’s claim seeks an unspecified amount of damages. The action has been transferred to the complex litigation docket of the Hartford Superior Court. The Hartford Superior Court has set a trial date for February 2018, but that date will likely be continued because all of the parties have participated in mediation and settlement negotiations are ongoing, so no depositions have yet been conducted. On December 18, 2017, KBS was notified that a global settlement had been reached between all defendants and the plaintiff. Under the settlement, KBS’s insurance carriers have agreed to pay $300,000 to the plaintiff. From time to time, in the ordinary course of ATRM’s business, it is party to various other disputes, claims and legal proceedings. In the opinion of management, based on information available at this time, such disputes, claims and proceedings will not have a material effect on ATRM’s consolidated financial statements. |
Operating Segments
Operating Segments | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Operating Segments | 18. OPERATING SEGMENTS Prior to the EBGL Acquisition in October 2016, the Company’s operating results reflected the operating results of KBS, along with certain corporate overhead and corporate borrowing activity. Since the EBGL Acquisition, the Company manages and organizes its business in two distinct reportable segments: (i) modular building manufacturing and (ii) structural wall panel and wood foundation manufacturing, including building supply retail operations. The modular building manufacturing segment, through KBS, manufactures modular buildings for both single-family residential homes and larger, commercial building projects. The structural wall panel and wood foundation manufacturing segment (which also includes the building supply retail operations) manufactures structural wall panels for both residential and commercial projects as well as permanent wood foundation systems for residential homes, through the EdgeBuilder subsidiary, in addition to operating a local building supply retail operation, through the Glenbrook subsidiary. The Company also has corporate level activities and expenditures which are not considered a reportable segment. Each segments’ accounting policies are the same as those described in the summary of significant accounting policies, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. There are no intersegment sales. The Company’s reportable business segments are strategic business units that offer different products and services. Each segment is managed separately because they have different manufacturing processes and market to different customer bases, in geographically different markets. The following table presents certain financial information regarding each reportable segment as of and for the three months ended March 31, 2017 (in thousands): Modular Home Manufacturing Structural Wall Panel Manufacturing Total Segment net sales $ 5,608 $ 3,796 $ 9,404 Depreciation and amortization expense 123 156 279 Interest expense, net 85 129 214 Segment net income (loss) 35 (279 ) (244 ) Total segment assets 7,867 8,463 16,330 Expenditures for segment assets 19 23 42 Reconciliation of Segment Information (in thousands) Revenues Total net sales for reportable segments $ 9,404 Other net sales — Consolidated net sales $ 9,404 Net loss Total net loss for reportable segments $ 244 Other net sales — Unallocated amounts: Other corporate expenses 477 Interest expense 349 Change in fair value of contingent earn-out receivable (213 ) Provision for income taxes 4 Consolidated net loss $ 861 Assets Total assets for reportable segments $ 16,330 Other assets 1,524 Consolidated assets $ 17,854 Other Significant Adjustments Segment Totals Adjustments Consolidated Totals Depreciation and amortization expense $ 280 $ — $ 280 Interest expense $ 214 $ 349 $ 563 The adjustment to interest expense is the amount of interest incurred by the Company at the parent level, but not allocated to the operating segments. The other adjustments reflect amounts incurred at the parent not allocated to the operating segments. None of the other adjustments are considered significant. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. SUBSEQUENT EVENTS EBGL Line of Credit On June 30, 2017, EBGL entered into a Revolving Credit Loan Agreement (the “Premier Loan Agreement”) with Premier Bank (“Premier”) providing EBGL with a working capital line of credit of up to $3.0 million. The Premier Loan Agreement replaced the EBGL Loan Agreement with Gerber Finance, which was terminated on the same date. Availability under the Premier Loan Agreement is based on a formula tied to EBGL’s eligible accounts receivable, inventory and equipment, and borrowings bear interest at the prime rate plus 1.50%, with interest payable monthly and the outstanding principal balance payable upon expiration of the term of the Premier Loan Agreement. The Premier Loan Agreement also provides for certain fees payable to Premier during its term. The initial term of the Premier Loan Agreement expires on June 30, 2018, but may be extended from time to time at our request, subject to approval by Premier. EBGL’s obligations under the Premier Loan Agreement are secured by all of their inventory, equipment, accounts and other intangibles, fixtures and all proceeds of the foregoing. The Premier Loan Agreement contains representations, warranties, affirmative and negative covenants, events of default and other provisions customary for financings of this type. The occurrence of any event of default under the Premier Loan Agreement may result in the obligations of EBGL becoming immediately due and payable. As a condition to closing the Premier Loan Agreement, each of the Company and Jeffrey E. Eberwein, a director of the Company, executed a guaranty, dated as of the same date, in favor of Premier, absolutely and unconditionally guaranteeing all of EBGL’s obligations under the Premier Loan Agreement. In connection with EBGL’s entry into the Premier Loan Agreement, and on the same date, EBGL repaid in full all of their obligations under and terminated the EBGL Loan Agreement. Pursuant to the termination of the EBGL Loan Agreement, all obligations of the Company in favor of Gerber Finance in connection with the EBGL Loan Agreement were extinguished. Amended Asset Purchase Agreement On June 30, 2017, the Company and the EBGL Sellers agreed to amend that certain Asset Purchase Agreement, dated as of October 4, 2016 (as amended, the “EBGL Asset Purchase Agreement”). Under the terms of this amendment, EBGL’s obligations to pay certain deferred payments to the EBGL Sellers ($0.75 million) and the contingent earn-out payment ($1.0 million) were replaced with set monthly payments totaling $1.8 million, payable with an initial $0.2 million payment made on or about July 3, 2017, and 16 monthly installments of $0.1 million beginning August 1, 2017, and ending on November 1, 2018. Amendments to Gerber Finance Loan Agreements On June 30, 2017, the parties to the KBS Loan Agreement entered into a Third Agreement of Amendment to Loan and Security Agreement providing for increased availability under the KBS Loan Agreement to KBS under certain circumstances, and certain other changes, as well as a waiver of certain covenants. On June 30, 2017, the Company entered into a Second Agreement of Amendment to Loan and Security Agreement to amend the Acquisition Loan Agreement to waive certain covenants and to make certain amendments in connection with the termination of the EBGL Loan Agreement and refinancing under the Premier Loan Agreement. On July 20, 2017, the parties to the KBS Loan Agreement entered into a Fourth Agreement of Amendment to Loan and Security Agreement providing for increased availability under the KBS Loan Agreement to KBS for new equipment additions, as well as a waiver for certain covenants. On September 29, 2017, the parties to the KBS Loan Agreement entered into a Fifth Agreement of Amendment to Loan and Security Agreement and the parties to the Acquisition Loan Agreement entered into a Third Agreement of Amendment to Loan and Security Agreement in conjunction with the Exchange with LSVI and LSV Co-Invest (see discussion below). On December 22, 2017, the parties to the KBS Loan Agreement entered into a Sixth Agreement of Amendment to Loan and Security Agreement providing for increased availability under the KBS Loan Agreement to KBS under certain circumstances, and certain other changes. In connection with this amendment to the KBS Loan Agreement, Jeffrey E. Eberwein, a director of the Company, executed a guaranty dated November 20, 2017 in favor of Gerber Finance unconditionally guaranteeing up to $500,000 of KBS’s obligations under the KBS Loan Agreement arising from certain permitted overadvances. On December 22, 2017, the Company also entered into a Fourth Agreement of Amendment to Loan and Security Agreement to amend the terms of the Acquisition Loan Agreement to reflect certain changes made to the KBS Loan Agreement. Preferred Stock Exchange On September 29, 2017, the Company, LSVI and LSV Co-Invest I entered into an Exchange Agreement, dated as of the same date (the “Exchange Agreement”), pursuant to which the Company issued to LSVI and LSV Co-Invest I a total of 132,548 shares of a new class of 10.00% Series B Cumulative Preferred Stock, par value $0.001 per share (the “Series B Stock”), of the Company in exchange for the return and cancellation of all of the unsecured promissory notes of the Company (the “Notes”) held by LSVI and LSV Co-Invest I (the “Exchange”). The Notes had an aggregate of $13.3 million unpaid principal and accrued and unpaid interest outstanding at the time of their cancellation. The material terms of the Series B Stock are described in the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2017. On September 29, 2017, in connection with the Exchange, the Company entered into a Registration Rights Agreement, dated as of the same date (the “Registration Rights Agreement”), with LSVI and LSV Co-Invest I. The Registration Rights Agreement provides that at any time after October 15, 2018, upon the written request of the holders of at least 66 2/3% of the shares of Series B Stock issued in the Exchange that qualify as registrable securities as defined therein, the Company will prepare and file with the SEC a registration statement covering the resale of those shares by their holders. At the time of the Exchange, LSVI also owned 1,067,885 shares of the Company’s common stock, or approximately 45% of the shares outstanding. Additionally, 10,000 shares of the Company’s common stock were held in an account managed by LSVM, an affiliate of LSVI and LSV Co-Invest I. Jeffrey E. Eberwein, Chairman of the Board, is the manager of LSVGP, the general partner of LSVI and LSV Co-Invest I, and the sole member of LSVM, the investment manager of LSVI, and therefore may be deemed to beneficially own the securities owned by LSVI and the securities held in the account managed by LSVM. The terms of the Exchange Agreement and the Series B Stock were negotiated and approved by a special committee of the Board consisting solely of disinterested and independent directors. On September 29, 2017, in connection with the Exchange, the Company entered into amendments to its two Loan and Security Agreements (as amended, the “Loan Agreements”) with Gerber Finance to permit the Exchange and the Company’s payment of dividends on the Series B Stock in-kind, by the issuance of additional shares of Series B Stock, in accordance with the terms of the Series B Stock (as described below). Under the Loan Agreements, the Company is not permitted to pay dividends on the Series B Stock in cash without the consent of Gerber Finance. Additionally, in connection with the Exchange, the subordination agreements by and among the Company, LSVI, LSV Co-Invest I and Gerber Finance, providing for the subordination of the Company’s obligations under the Notes to its obligations to Gerber Finance, were terminated. Charter Amendments At the Company’s 2017 Annual Meeting of Shareholders held on December 4, 2017, shareholders approved amendments to its Amended and Restated Articles of Incorporation (the “Existing Charter”) to: (i) increase the number of authorized shares of the Company’s capital stock from 3,200,000 to 10,000,000, and make corresponding changes to the number of authorized shares of the Company’s common stock and preferred stock; (ii) effect a 4-for-1 forward stock split of the Series B Stock; and (iii) effect an extension to December 5, 2020 of the provisions of the Existing Charter designed to protect the tax benefits of the Company’s net operating loss carryforwards by generally restricting any direct or indirect transfers of the Company’s common stock that increase the direct or indirect ownership of the Company’s common stock by any Person (as defined in the Existing Charter) from less than 4.99% to 4.99% or more of the Company’s common stock, or increase the percentage of the Company’s common stock owned directly or indirectly by a Person owning or deemed to own 4.99% or more of the Company’s common stock (the “Extended Protective Amendment”). On December 4, 2017, the Company filed Articles of Amendment with the Office of the Secretary of State of the State of Minnesota to effect these amendments. Promissory Note Sale to LSV Co-Invest I On January 12, 2018, the Company issued to LSV Co-Invest I an unsecured promissory note in the principal amount of $0.5 million in exchange for the same amount in cash (the “LSV Co-Invest I Note”). The LSV Co-Invest I Note was issued pursuant to a securities purchase agreement by and between the Company and LSV Co-Invest I dated as of the same date. The LSV Co-Invest I Note bears interest at 10.0% per annum, with interest payable semiannually; provided, however, LSV Co-Invest I may elect to receive any interest as PIK Interest at an annual rate of 12.0%, so long as any such interest payment is made either (x) entirely in PIK Interest or (y) 50% cash and 50% PIK Interest. Any unpaid principal and interest under the LSV Co-Invest I Note is due on January 12, 2020. The Company may prepay the LSV Co-Invest I Note at any time after a specified amount of advance notice to LSV Co-Invest I (subject to certain restrictions under the Company’s existing loan agreements). The LSV Co-Invest I Note provides for customary events of default, the occurrence of any of which may result in the principal and unpaid interest then outstanding becoming immediately due and payable. As of January 12, 2018, LSVI owned 1,067,885 shares of our common stock, or approximately 45.1% of our outstanding shares, including 900,000 shares purchased in a common stock rights offering we completed in September 2015. Jeffrey E. Eberwein, ATRM’s Chairman of the Board, is the manager of LSVGP, the general partner of LSVI and LSV Co-Invest I, and the sole member of LSVM, the investment manager of LSVI. ATRM’s entry into the securities purchase agreement with LSV Co-Invest I was approved by a Special Committee of our Board consisting solely of independent directors. |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents the combined results of ATRM and the EBGL Sellers for the three-month period ended March 31, 2016 as if the EBGL Acquisition had occurred on January 1, 2016 (in thousands, except per share amount): 2016 Pro forma net sales $ 10,080 Pro forma net loss (1,111 ) Pro forma loss per share – basic and diluted (0.48 ) |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash | 3/31/2017 Cash and cash equivalents $ 569 Restricted cash 280 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated balance sheet $ 849 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Assets Measured on Recurring Basis | Financial assets reported at fair value on a recurring basis included the following at March 31, 2017 (in thousands): Level 1 Level 2 Level 3 Contingent earn-out receivable related to the transfer of test handler product line: Current portion $ — $ — $ 548 Noncurrent portion — 150 Total $ — $ — $ 698 Contingent earn-out payable related to the EBGL Acquisition $ — $ — $ (991 ) |
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table summarizes the activity for our Level 3 assets and liabilities measured on a recurring basis (in thousands): Earn-out Receivable (1) Earn-out Payable (2) Balance at December 31, 2016 $ 561 $ (967 ) Add – adjustment based on re-assessments 213 — Add – net increase based on re-assessments — (24 ) Subtract – settlements (76 ) — Balance at March 31, 2017 $ 698 $ (991 ) (1) Earn-out receivable related to the transfer of our test handler product line in 2014. (2) Earn-out payable related to the EBGL Acquisition. |
Schedule of Quantitative Information Level 3 Fair Value Assets and Liabilities | Quantitative information about Level 3 fair value measurements on a recurring basis at March 31, 2017, is summarized in the table below: Fair Value Asset Valuation Technique Unobservable Input Amount Earn-out receivable related to transfer of test handler product line Discounted cash flow Total projected revenue Performance weighted average Discount rate $11.3 million 60% to 125% 10 % Contingent earn-out payable Discounted cash flow Estimated gross profit for earn-out period Discount rate $3.4 million 10 % |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable consists of the following (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Contract billings $ 4,294 $ 2,330 Retainage 158 370 Subtotal 4,452 2,700 Less – allowance for doubtful accounts (4 ) (96 ) Accounts receivable, net $ 4,448 $ 2,604 |
Goodwill and Intangible Asset29
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets are comprised of the following (in thousands): March 31, 2017 (unaudited) December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 3,020 $ — $ 3,020 $ 3,020 $ — $ 3,020 Trademarks 394 — 394 394 — 394 Total 3,414 — 3,414 3,414 — 3,414 Finite-lived intangible assets: Customer relationships 2,097 (665 ) 1,432 2,097 (586 ) 1,511 Purchased backlog 1,290 (1,191 ) 99 1,290 (1,078 ) 212 Total 3,387 (1,856 ) 1,531 3,387 (1,664 ) 1,723 Total intangible assets $ 6,801 $ (1,856 ) $ 4,945 $ 6,801 $ (1,664 ) $ 5,137 |
Schedule of Estimated Amortization of Intangible Assets | Estimated amortization of purchased intangible assets over the next five years is as follows (in thousands): 2017 (nine months) $ 336 2018 315 2019 315 2020 315 2021 164 Thereafter 86 Total $ 1,531 |
Uncompleted Construction Cont30
Uncompleted Construction Contracts (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Contractors [Abstract] | |
Schedule of Uncompleted Construction Contracts | The status of uncompleted construction contracts is as follows (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Costs incurred on uncompleted contracts $ 9,899 $ 6,575 Inventory purchased for specific contracts 780 837 Estimated profit 1,667 1,150 Subtotal 12,346 8,562 Less billings to date (12,293 ) (8,169 ) Total $ 53 $ 393 Included in the following balance sheet captions: Costs and estimated profit in excess of billings $ 866 $ 1,045 Billings in excess of costs and estimated profit (813 ) (652 ) Total $ 53 $ 393 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities are comprised of the following (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Accrued interest expense $ 374 $ 637 Accrued sales taxes 892 739 Accrued health insurance costs 108 96 Accrued sales rebates 213 327 Accrued warranty 50 49 Other 90 416 Total other accrued liabilities $ 1,727 $ 2,264 |
Schedule of Changes in Accrued Warranty | Changes in accrued warranty are summarized below (in thousands): Three months ended March 31, 2017 2016 (unaudited) Accrual balance, beginning of period $ 49 $ 39 Accruals for warranties 1 29 Settlements made — (29 ) Accrual balance, end of period $ 50 $ 39 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt is comprised of the following (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Promissory note payable to LSVI, a related party, unsecured, interest of 10% per annum (12% per annum PIK Interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 $ 4,522 $ 4,261 Promissory notes payable to LSV Co-Invest I, a related party, unsecured, interest of 10% per annum (12% per annum PIK Interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 7,625 6,773 Promissory note payable to KBS, sellers, unsecured, interest imputed at 9.5%, payable in monthly installments of $100,000 (principal and interest) through July 2017 392 678 Software installment payment agreement, unsecured, interest at 8.0% per annum, payable in monthly installments of $1,199 through September 2020 43 46 Notes payable, secured by equipment, interest at 6.6% to 9.5% per annum, with varying maturity dates through September 2018 16 22 Promissory note payable to Gerber Finance, secured, interest at the current prime rate plus 3.0% payable monthly with any unpaid principal and interest due on December 31, 2018 3,000 3,000 Revolving equipment credit line, unsecured 15 — Deferred payments to EBGL Sellers, secured, interest imputed at 10.0%, quarterly payments of principal and interest of $250,000 beginning April 1, 2017 through October 1, 2017; as disclosed in Note 19, the Company amended the terms of the deferred payments to EBGL Sellers on June 30, 2017 731 964 Total long-term debt 16,344 15,744 Current portion (1,132 ) (1,675 ) Noncurrent portion $ 15,212 $ 14,069 |
Stock Incentive Plans and Sha33
Stock Incentive Plans and Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-Based Compensation, Stock Options, Activity | The following table summarizes stock option activity under the 2003 Plan for the three months ended March 31, 2017: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value (in thousands) Outstanding, January 1, 2017 27,500 $ 6.88 Options expired during the three months ended March 31, 2017 (16,200 ) $ 7.75 Outstanding, March 31, 2017 11,300 $ 5.64 0.62 years $ 0 Exercisable, March 31, 2017 11,300 $ 5.64 0.62 years $ 0 |
Operating Segments (Tables)
Operating Segments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information of Reportable Segment | The following table presents certain financial information regarding each reportable segment as of and for the three months ended March 31, 2017 (in thousands): Modular Home Manufacturing Structural Wall Panel Manufacturing Total Segment net sales $ 5,608 $ 3,796 $ 9,404 Depreciation and amortization expense 123 156 279 Interest expense, net 85 129 214 Segment net income (loss) 35 (279 ) (244 ) Total segment assets 7,867 8,463 16,330 Expenditures for segment assets 19 23 42 |
Schedule of Reconciliation of Operating Segment Information | Reconciliation of Segment Information (in thousands) Revenues Total net sales for reportable segments $ 9,404 Other net sales — Consolidated net sales $ 9,404 Net loss Total net loss for reportable segments $ 244 Other net sales — Unallocated amounts: Other corporate expenses 477 Interest expense 349 Change in fair value of contingent earn-out receivable (213 ) Provision for income taxes 4 Consolidated net loss $ 861 Assets Total assets for reportable segments $ 16,330 Other assets 1,524 Consolidated assets $ 17,854 |
Schedule of Other Operating Segment Adjustments | Other Significant Adjustments Segment Totals Adjustments Consolidated Totals Depreciation and amortization expense $ 280 $ — $ 280 Interest expense $ 214 $ 349 $ 563 |
Financial Position, Liquidity35
Financial Position, Liquidity and Capital Resources (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Accumulated deficit | $ (81,036) | $ (80,175) | |
Outstanding debt | 20,500 | ||
Paid-in-kind Interest (“PIK Interest”) | 613 | ||
September 2017 [Member] | |||
Debt convension of converted amount | 13,300 | ||
KBS Loan Agreement [Member] | |||
Debt principal amount | 2,300 | ||
Line of credit with maximum borrowing availability | $ 4,000 | ||
Debt due date | Feb. 22, 2018 | ||
Acquisition Loan Agreement [Member] | |||
Debt principal amount | $ 3,000 | ||
Debt Agreement [Member] | August 2017 [Member] | |||
Paid-in-kind Interest (“PIK Interest”) | 11,000 | ||
Gerber Finance Inc [Member] | KBS Loan Agreement [Member] | |||
Debt principal amount | 1,800 | ||
Line of credit with maximum borrowing availability | $ 3,000 | ||
KBS Builders [Member] | |||
Minimum leverage ratio | 7:1 | ||
KBS Builders [Member] | November 2017 [Member] | |||
Lumber surcharge percentage | 6.00% | ||
KBS Builders [Member] | July 2017 [Member] | |||
Notes payable monthly installment | $ 100 | ||
KBS Builders [Member] | Unsecured Promissory Note [Member] | |||
Debt principal amount | 400 | ||
Notes payable monthly installment | 100 | ||
KBS Builders [Member] | KBS Loan Agreement [Member] | |||
Net annual post tax loss | $ 3,200 | ||
KBS Builders [Member] | Gerber Finance Inc [Member] | |||
Debt principal amount | 2,300 | ||
Line of credit with maximum borrowing availability | 4,000 | ||
Lone Star Value Investors, LP [Member] | |||
Debt principal amount | 4,500 | ||
Lone Star Value Co-Invest I. LP [Member] | |||
Debt principal amount | $ 7,600 | ||
Debt due date | Apr. 1, 2019 | ||
EBGL [Member] | Unsecured Promissory Note [Member] | |||
Notes payable monthly installment | $ 250 | ||
Deferred payments payable | 750 | ||
LSV Co-Invest I [Member] | Unsecured Promissory Note [Member] | January 2018 [Member] | |||
Debt principal amount | $ 500 |
Business Combination - Schedule
Business Combination - Schedule of Business Acquisition, Pro Forma Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($)$ / shares | |
Business Combinations [Abstract] | |
Pro forma net sales | $ 10,080 |
Pro forma net loss | $ (1,111) |
Pro forma loss per share - basic and diluted | $ / shares | $ (.48) |
Restricted Cash - Schedule of R
Restricted Cash - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 569 | $ 1,247 | ||
Restricted cash | 280 | 150 | ||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated balance sheet | $ 849 | $ 1,397 | $ 241 | $ 624 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Financial Assets Measured on Recurring Basis (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Level 1 [Member] | |
Contingent earn-out receivable, Current portion | |
Contingent earn-out receivable, Noncurrent portion | |
Contingent earn out receivable, Total | |
Level 1 [Member] | EBGL Acquisition [Member] | |
Contingent earn-out payable | |
Level 2 [Member] | |
Contingent earn-out receivable, Current portion | |
Contingent earn-out receivable, Noncurrent portion | |
Contingent earn out receivable, Total | |
Level 2 [Member] | EBGL Acquisition [Member] | |
Contingent earn-out payable | |
Level 3 [Member] | |
Contingent earn-out receivable, Current portion | 548 |
Contingent earn-out receivable, Noncurrent portion | 150 |
Contingent earn out receivable, Total | 698 |
Level 3 [Member] | EBGL Acquisition [Member] | |
Contingent earn-out payable | $ (991) |
Fair Value Measurements - Sch39
Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($) | ||
Earn-Out Receivable [Member] | ||
Balance, beginning | $ 561 | [1] |
Add – adjustment based on re-assessments | 213 | [1] |
Add – net increase based on re-assessments | [1] | |
Subtract - settlements | (76) | [1] |
Balance, ending | 698 | [1] |
Earn-Out Payable [Member] | ||
Balance, beginning | (967) | [2] |
Add – adjustment based on re-assessments | [2] | |
Add – net increase based on re-assessments | (24) | [2] |
Subtract - settlements | [2] | |
Balance, ending | $ (991) | [2] |
[1] | Earn-out receivable related to the transfer of our test handler product line in 2014. | |
[2] | Earn-out payable related to the EBGL Acquisition. |
Fair Value Measurements - Sch40
Fair Value Measurements - Schedule of Quantitative Information Level 3 Fair Value Assets and Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value, Measurements, Recurring [Member] | |
Fair value asset | Earn-out receivable related to transfer of test handler product line |
Fair value of assets, valuation technique | Discounted cash flow |
Unobservable input projected revenue | $ 11,300 |
Unobservable input performance weighted average, minimum | 60.00% |
Unobservable input performance weighted average, maximum | 125.00% |
Unobservable input discount rate | 10.00% |
Fair Value, Measurements, Recurring One [Member] | |
Fair value asset | Contingent earn-out payable |
Fair value of assets, valuation technique | Discounted cash flow |
Unobservable input, gross profit | $ 3,400 |
Unobservable input discount rate | 10.00% |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Contract billings | $ 4,294 | $ 2,330 |
Retainage | 158 | 370 |
Subtotal | 4,452 | 2,700 |
Less - allowance for doubtful accounts | (4) | (96) |
Accounts receivable, net | $ 4,448 | $ 2,604 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Inventories | $ 1,304 | $ 1,404 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets, Net (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 192 | $ 51 |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Total finite-lived intangible assets Net Carrying Value | $ 1,531 | $ 1,723 |
Gross Carrying Amount | 6,801 | 6,801 |
Accumulated Amortization | (1,856) | (1,664) |
Net Carrying Value | 4,945 | 5,137 |
Indefinite Lived Intangible Assets [Member] | ||
Indefinite-lived intangible assets Gross Carrying Amount | 3,414 | 3,414 |
Indefinite-lived intangible assets Gross Accumulated Amortization | ||
Indefinite-lived intangible assets Gross Net Carrying Value | 3,414 | 3,414 |
Indefinite Lived Intangible Assets [Member] | Trademarks [Member] | ||
Indefinite-lived intangible assets Gross Carrying Amount | 394 | 394 |
Indefinite-lived intangible assets Gross Accumulated Amortization | ||
Indefinite-lived intangible assets Gross Net Carrying Value | 394 | 394 |
Finite Lived Intangible Assets [Member] | ||
Finite lived intangible assets Gross Carrying Amount | 3,387 | 3,387 |
Finite lived intangible assets Accumulated Amortization | (1,856) | (1,664) |
Total finite-lived intangible assets Net Carrying Value | 1,531 | 1,723 |
Finite Lived Intangible Assets [Member] | Customer Relationships [Member] | ||
Finite lived intangible assets Gross Carrying Amount | 2,097 | 2,097 |
Finite lived intangible assets Accumulated Amortization | (665) | (586) |
Total finite-lived intangible assets Net Carrying Value | 1,432 | 1,511 |
Finite Lived Intangible Assets [Member] | Purchased Backlog [Member] | ||
Finite lived intangible assets Gross Carrying Amount | 1,290 | 1,290 |
Finite lived intangible assets Accumulated Amortization | (1,191) | (1,078) |
Total finite-lived intangible assets Net Carrying Value | 99 | 212 |
Goodwill [Member] | Indefinite Lived Intangible Assets [Member] | ||
Indefinite-lived intangible assets Gross Carrying Amount | 3,020 | 3,020 |
Indefinite-lived intangible assets Gross Accumulated Amortization | ||
Indefinite-lived intangible assets Gross Net Carrying Value | $ 3,020 | $ 3,020 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets, Net - Schedule of Estimated Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2017(nine months) | $ 336 | |
2,018 | 315 | |
2,019 | 315 | |
2,020 | 315 | |
2,021 | 164 | |
Thereafter | 86 | |
Total finite-lived intangible assets | $ 1,531 | $ 1,723 |
Uncompleted Construction Cont46
Uncompleted Construction Contracts (Details Narrative) $ in Thousands | Mar. 31, 2017USD ($) |
Contractors [Abstract] | |
Amount of remaining contract | $ 10,400 |
Uncompleted Construction Cont47
Uncompleted Construction Contracts - Schedule of Uncompleted Construction Contracts (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Contractors [Abstract] | ||
Costs incurred on uncompleted contracts | $ 9,899 | $ 6,575 |
Inventory purchased for specific contracts | 780 | 837 |
Estimated profit | 1,667 | 1,150 |
Subtotal | 12,346 | 8,562 |
Less billings to date | (12,293) | (8,169) |
Total | 53 | 393 |
Costs and estimated profit in excess of billings | 866 | 1,045 |
Billings in excess of costs and estimated profit | (813) | (652) |
Total | $ 53 | $ 393 |
Accounts Payable Retainage (Det
Accounts Payable Retainage (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts payable | $ 4,719 | $ 3,776 | |
Subcontractors [Member] | |||
Accounts payable retainage | $ 200 | $ 400 |
Other Accrued Liabilities - Sch
Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued interest expense | $ 374 | $ 637 |
Accrued sales taxes | 892 | 739 |
Accrued health insurance costs | 108 | 96 |
Accrued sales rebates | 213 | 327 |
Accrued warranty | 50 | 49 |
Other | 90 | 416 |
Total other accrued liabilities | $ 1,727 | $ 2,264 |
Other Accrued Liabilities - S50
Other Accrued Liabilities - Schedule of Changes in Accrued Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Payables and Accruals [Abstract] | ||
Accrual balance, beginning of period | $ 49 | $ 39 |
Accruals for warranties | 1 | 29 |
Settlements made | (29) | |
Accrual balance, end of period | $ 50 | $ 39 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Notes payable | $ 4,114 | $ 3,420 |
KBS Loan Agreement [Member] | ||
Notes payable | 2,400 | |
Debt principal amount | 2,300 | |
Revolving line of credit | 4,000 | |
Line of credit with maximum borrowing availability | $ 4,000 | |
Notes payable maturity date | Feb. 22, 2018 | |
Notes payable maturity date, description | The KBS Loan Agreement was scheduled to expire on February 22, 2018, but, under the terms of the agreement, was extended automatically for an additional one-year period ending on February 22, 2019. | |
Debt issuance costs | $ 100 | |
Notes payable, net | $ 2,300 | |
KBS Loan Agreement [Member] | Gerber Finance Inc [Member] | ||
Annual facilities fee percentage | 1.50% | |
Monthly collateral monitoring fee percentage | 0.10% | |
KBS Loan Agreement [Member] | Prime Rate [Member] | ||
Debt interest rate | 2.75% | |
EBGL Loan Agreement [Member] | ||
Notes payable | $ 1,800 | |
Debt principal amount | 1,800 | |
Revolving line of credit | 3,000 | |
Line of credit with maximum borrowing availability | $ 3,000 | |
Notes payable maturity date | Oct. 3, 2018 | |
Initial line of credit availability | $ 1,000 | |
Maximum increased amount of line of credit | 3,000 | |
Amount of line of credit increment | 500 | |
Line of credit | 2,000 | |
Line of credit, current, net deferred financing costs | 200 | |
EBGL Loan Agreement [Member] | Premier Bank [Member] | ||
Line of credit with maximum borrowing availability | $ 3,000 | |
EBGL Loan Agreement [Member] | Prime Rate [Member] | ||
Debt interest rate | 2.75% |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2015 | Mar. 31, 2017 | Dec. 31, 2016 | |
LSVI and LSV Co-Invest I [Member] | Series B Cumulative Preferred Stock [Member] | |||
Debt interest rate | 10.00% | ||
Number of common stock shares exchange | 132,548 | ||
Lone Star Value Co-Invest I. LP [Member] | |||
Debt principal amount | $ 7,600 | ||
Securities Purchase Agreement [Member] | Lone Star Value Co-Invest I. LP [Member] | |||
Debt interest rate | 10.00% | ||
Debt principal amount | $ 500 | ||
Unsecured promissory note | $ 500 | ||
Debt interest rate description | 50% cash and 50% PIK Interest | ||
Registration Rights Agreement [Member] | LSVI [Member] | |||
Converted into common stock, shares | 107,297 | ||
Payment In-Kind [Member] | Securities Purchase Agreement [Member] | Lone Star Value Co-Invest I. LP [Member] | |||
Debt interest rate | 12.00% | ||
LSVI [Member] | |||
Number of shares owned | 1,067,885 | ||
Percentage of outstanding shares | 45.10% | ||
Number of shares purchased | 900,000 | ||
LSVI and LSV Co-Invest I Promissory Notes [Member] | |||
Debt interest rate | 10.00% | ||
LSVI and LSV Co-Invest I Promissory Notes [Member] | Payment In-Kind [Member] | |||
Debt effective rate | 12.00% | ||
Debt principal amount | $ 1,100 | $ 1,100 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Total long-term debt | $ 16,344 | $ 15,744 |
Current portion | (1,132) | (1,675) |
Noncurrent portion | 15,212 | 14,069 |
Promissory note payable to LSVI, a related party, unsecured, interest of 10% per annum (12% per annum PIK Interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 [Member] | ||
Total long-term debt | 4,522 | 4,261 |
Promissory Notes Payable to LSV Co-Invest I, a Related Party, Unsecured, Interest of 10% Per Annum (12% Per Annum PIK Interest) Payable Semi-annually in July and January, with Any Unpaid Principal and Interest Due On April 1, 2019 [Member] | ||
Total long-term debt | 7,625 | 6,773 |
Promissory note payable to KBS, sellers, unsecured, interest imputed at 9.5%, payable in monthly installments of $100,000 (principal and interest) through July 2017 [Member] | ||
Total long-term debt | 392 | 678 |
Software installment payment agreement, unsecured, interest at 8.0% per annum, payable in monthly installments of $1,199 through September 2020 [Member] | ||
Total long-term debt | 43 | 46 |
Notes payable, secured by equipment, interest at 6.6% to 9.5% per annum, with varying maturity dates through September 2018 [Member] | ||
Total long-term debt | 16 | 22 |
Promissory note payable to Gerber Finance, secured, interest at the current prime rate plus 3.0% payable monthly with any unpaid principal and interest due on December 31, 2018 [Member] | ||
Total long-term debt | 3,000 | 3,000 |
Revolving equipment credit line, unsecured [Member] | ||
Total long-term debt | 15 | |
Deferred payments to EBGL Sellers, secured, interest imputed at 10.0%, quarterly payments of principal and interest of $250,000 beginning April 1, 2017 through October 1, 2017; as disclosed in Note 19, the Company amended the terms of the deferred payment [Member] | ||
Total long-term debt | $ 731 | $ 964 |
Long-Term Debt - Schedule of 54
Long-Term Debt - Schedule of Long-Term Debt (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Promissory note payable to LSVI, a related party, unsecured, interest of 10% per annum (12% per annum PIK Interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 [Member] | ||
Long-term debt, interest percentage, per annum | 10.00% | 10.00% |
Pay in kind interest | 12.00% | 12.00% |
Notes payable maturity date | Apr. 1, 2019 | Apr. 1, 2019 |
Promissory Notes Payable to LSV Co-Invest I, a Related Party, Unsecured, Interest of 10% Per Annum (12% Per Annum PIK Interest) Payable Semi-annually in July and January, with Any Unpaid Principal and Interest Due On April 1, 2019 [Member] | ||
Long-term debt, interest percentage, per annum | 10.00% | 10.00% |
Pay in kind interest | 12.00% | 12.00% |
Notes payable maturity date | Apr. 1, 2019 | Apr. 1, 2019 |
Promissory note payable to KBS, sellers, unsecured, interest imputed at 9.5%, payable in monthly installments of $100,000 (principal and interest) through July 2017 [Member] | ||
Long-term debt, interest percentage, per annum | 9.50% | 9.50% |
Notes payable maturity date | Jul. 30, 2017 | Jul. 30, 2017 |
Promissory note, payable in monthly installments | $ 100,000 | $ 100,000 |
Software installment payment agreement, unsecured, interest at 8.0% per annum, payable in monthly installments of $1,199 through September 2020 [Member] | ||
Long-term debt, interest percentage, per annum | 8.00% | 8.00% |
Notes payable maturity date | Sep. 30, 2020 | Sep. 30, 2020 |
Promissory note, payable in monthly installments | $ 1,199 | $ 1,199 |
Notes payable, secured by equipment, interest at 6.6% to 9.5% per annum, with varying maturity dates through September 2018 [Member] | ||
Notes payable maturity date | Sep. 30, 2018 | Sep. 30, 2018 |
Notes payable, secured by equipment, interest at 6.6% to 9.5% per annum, with varying maturity dates through September 2018 [Member] | Minimum [Member] | ||
Long-term debt, interest percentage, per annum | 6.60% | 6.60% |
Notes payable, secured by equipment, interest at 6.6% to 9.5% per annum, with varying maturity dates through September 2018 [Member] | Maximum [Member] | ||
Long-term debt, interest percentage, per annum | 9.50% | 9.50% |
Promissory note payable to Gerber Finance, secured, interest at the current prime rate plus 3.0% payable monthly with any unpaid principal and interest due on December 31, 2018 [Member] | ||
Long-term debt, interest percentage, per annum | 3.00% | 3.00% |
Notes payable maturity date | Dec. 31, 2018 | Dec. 31, 2018 |
Deferred payments to EBGL Sellers, secured, interest imputed at 10.0%, quarterly payments of principal and interest of $250,000 beginning April 1, 2017 through October 1, 2017; as disclosed in Note 19, the Company amended the terms of the deferred payment [Member] | ||
Long-term debt, interest percentage, per annum | 10.00% | 10.00% |
Promissory note, payable in monthly installments | $ 250,000 | $ 250,000 |
Stock Incentive Plans and Sha55
Stock Incentive Plans and Share-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Oct. 19, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Share-based compensation expense | $ 17 | $ 67 | |
Remaining shares-based compensation expense | $ 37 | ||
2014 Incentive Plan [Member] | |||
Restricted stock awards | 30,000 | ||
Vesting period | 1 year | ||
Fair value of stock awards | $ 2.25 | ||
2014 Incentive Plan [Member] | Chief Executive Officer [Member] | |||
Restricted stock awards | 10,000 | ||
2014 Incentive Plan [Member] | Chief Financial Officer [Member] | |||
Restricted stock awards | 10,000 | ||
2014 Incentive Plan [Member] | Former Chief Financial Officer [Member] | |||
Restricted stock awards | 10,000 | ||
2014 Incentive Plan [Member] | Directors And Chief Financial Officer [Member] | Prior to January 1, 2016 [Member] | |||
Restricted stock awards | 60,000 | ||
Vesting period | 1 year | ||
Fair value of stock awards | $ 4.48 | ||
Share-based compensation expense | $ 67 |
Stock Incentive Plans and Sha56
Stock Incentive Plans and Share-Based Compensation - Schedule of Share-Based Compensation, Stock Options, Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Shares, Outstanding, Beginning balance | shares | 27,500 |
Number of Shares, Expired | shares | (16,200) |
Number of Shares, Outstanding, Ending balance | shares | 11,300 |
Number of Shares, Exercisable, Balance | shares | 11,300 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ / shares | $ 6.88 |
Weighted Average Exercise Price, Expired | $ / shares | 7.75 |
Weighted Average Exercise Price, Outstanding, Ending balance | $ / shares | 5.64 |
Weighted Average Exercise Price, Exercisable, Balance | $ / shares | $ 5.64 |
Weighted Average Remaining Contract Term, Outstanding, Balance | 7 months 13 days |
Weighted Average Remaining Contract Term, Exercisable, Balance | 7 months 13 days |
Aggregate Intrinsic Value, Outstanding, Balance | $ | $ 0 |
Aggregate Intrinsic Value, Exercisable, Balance | $ | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) $ in Thousands | Mar. 31, 2017USD ($) |
Income Tax Disclosure [Abstract] | |
Deferred tax liability | $ 20,700 |
Legal Proceedings (Details Narr
Legal Proceedings (Details Narrative) $ in Thousands | Dec. 18, 2017USD ($) |
KBS Builders [Member] | |
Amount paid to plaintiff | $ 300 |
Operating Segments (Details Nar
Operating Segments (Details Narrative) | 3 Months Ended |
Mar. 31, 2017segments | |
Segment Reporting [Abstract] | |
Number of operating segment | 2 |
Operating Segments - Schedule o
Operating Segments - Schedule of Financial Information of Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment net sales | $ 9,404 | $ 5,051 |
Depreciation and amortization expense | 279 | |
Interest expense, net | 214 | |
Segment net income (loss) | (244) | |
Total segment assets | 16,330 | |
Expenditures for segment assets | 42 | |
Operating Segments [Member] | ||
Segment net sales | 9,404 | |
Depreciation and amortization expense | 280 | |
Total segment assets | 16,330 | |
Operating Segments [Member] | Modular Home Manufacturing [Member] | ||
Segment net sales | 5,608 | |
Depreciation and amortization expense | 123 | |
Interest expense, net | 85 | |
Segment net income (loss) | 35 | |
Total segment assets | 7,867 | |
Expenditures for segment assets | 19 | |
Operating Segments [Member] | Structural Wall Panel Manufacturing [Member] | ||
Segment net sales | 3,796 | |
Depreciation and amortization expense | 156 | |
Interest expense, net | 129 | |
Segment net income (loss) | (279) | |
Total segment assets | 8,463 | |
Expenditures for segment assets | $ 23 |
Operating Segments - Schedule61
Operating Segments - Schedule of Reconciliation of Operating Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Consolidated net sales | $ 9,404 | $ 5,051 | |
Change in fair value of contingent earn-out | (213) | (1) | |
Provision for income taxes | 4 | 4 | |
Consolidated net loss | 861 | $ 1,714 | |
Total assets for reportable segments | 16,330 | ||
Consolidated assets | 17,854 | $ 16,778 | |
Operating Segments [Member] | |||
Total net sales for reportable segments | 9,404 | ||
Other net sales | |||
Consolidated net sales | 9,404 | ||
Total net loss for reportable segments | 244 | ||
Other net sales | |||
Other corporate expenses | 477 | ||
Interest expense | 349 | ||
Change in fair value of contingent earn-out | (213) | ||
Provision for income taxes | 4 | ||
Consolidated net loss | 861 | ||
Total assets for reportable segments | 16,330 | ||
Other assets | 1,524 | ||
Consolidated assets | $ 17,854 |
Operating Segments - Schedule62
Operating Segments - Schedule of Other Operating Segment Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Depreciation and amortization expense | $ 279 | |
Interest expense | 563 | $ 301 |
Operating Segments [Member] | ||
Depreciation and amortization expense | 280 | |
Interest expense | 563 | |
Operating Segments [Member] | Segment Totals [Member] | ||
Depreciation and amortization expense | 280 | |
Interest expense | 214 | |
Operating Segments [Member] | Adjustments [Member] | ||
Depreciation and amortization expense | ||
Interest expense | $ 349 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jan. 12, 2018 | Dec. 04, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 22, 2017 | Jul. 03, 2017 |
Series B Cumulative Preferred Stock [Member] | LSVI and LSV Co-Invest I [Member] | |||||||
Debt interest rate | 10.00% | ||||||
KBS Loan Agreement [Member] | |||||||
Working capital line of credit | $ 4,000 | ||||||
Debt principal amount | $ 2,300 | ||||||
Debt maturity date | Feb. 22, 2018 | ||||||
KBS Loan Agreement [Member] | Prime Rate [Member] | |||||||
Debt interest rate | 2.75% | ||||||
Subsequent Event [Member] | |||||||
Ownership percentage | 4.99% | ||||||
Subsequent Event [Member] | Minimum [Member] | |||||||
Capital stock authorized | 3,200,000 | ||||||
Subsequent Event [Member] | Maximum [Member] | |||||||
Capital stock authorized | 10,000,000 | ||||||
Subsequent Event [Member] | LSVI [Member] | |||||||
Number of shares owned | 1,067,885 | ||||||
Percentage of outstanding shares | 45.10% | ||||||
Number of shares purchased | 900,000 | ||||||
Subsequent Event [Member] | Series B Preferred Stock [Member] | |||||||
Stockholders equity stock split | effect a 4-for-1 forward stock split | ||||||
Subsequent Event [Member] | LSV Co-Invest I Unsecured Promissory Notes [Member] | |||||||
Debt interest rate | 10.00% | ||||||
Debt principal amount | $ 500 | ||||||
Debt interest rate description | 50% cash and 50% PIK Interest | ||||||
Debt maturity date | Jan. 12, 2020 | ||||||
Subsequent Event [Member] | LSV Co-Invest I Unsecured Promissory Notes [Member] | Payment In-Kind [Member] | |||||||
Debt interest rate | 12.00% | ||||||
Subsequent Event [Member] | Revolving Credit Loan Agreement [Member] | |||||||
Working capital line of credit | $ 3,000 | ||||||
Loan agreement expiry date | Jun. 30, 2018 | ||||||
Subsequent Event [Member] | Revolving Credit Loan Agreement [Member] | Prime Rate [Member] | |||||||
Debt interest rate | 1.50% | ||||||
Subsequent Event [Member] | Amended Asset Purchase Agreement [Member] | EBGL [Member] | |||||||
Debt obligation | $ 750 | ||||||
Contingent earn-out payment | 1,000 | ||||||
Debt instrument periodic payment | $ 1,800 | ||||||
Contingent earn-out initial payment | $ 200 | ||||||
Subsequent Event [Member] | Amended Asset Purchase Agreement [Member] | EBGL [Member] | August 1, 2017 To November 1, 2018 [Member] | |||||||
Debt instrument periodic payment | $ 100 | ||||||
Subsequent Event [Member] | KBS Loan Agreement [Member] | Jeffrey E. Eberwein [Member] | |||||||
Debt obligation | $ 500 | ||||||
Subsequent Event [Member] | Exchange Agreement [Member] | LSVI [Member] | |||||||
Number of shares owned | 1,067,885 | ||||||
Percentage of outstanding shares | 45.00% | ||||||
Subsequent Event [Member] | Exchange Agreement [Member] | LSVM [Member] | |||||||
Number of shares owned | 10,000 | ||||||
Subsequent Event [Member] | Exchange Agreement [Member] | Series B Cumulative Preferred Stock [Member] | LSVI and LSV Co-Invest I [Member] | |||||||
Number of common stock shares issued | 132,548 | ||||||
Common stock shares issued percentage | 10.00% | ||||||
Preferred stock, par value | $ 0.001 | ||||||
Number of common stock shares cancellation | $ 13,300 |