Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Jul. 01, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | ATRM Holdings, Inc. | |
Entity Central Index Key | 0000908598 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | No | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,576,219 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 87 | $ 187 |
Restricted cash | 556 | 501 |
Accounts receivable, net | 2,654 | 3,289 |
Inventories | 1,569 | 1,790 |
Fair value of contingent earn-out receivable, current | 0 | 63 |
Other current assets | 250 | 343 |
Total current assets | 5,116 | 6,173 |
Property, plant and equipment, net | 4,079 | 4,131 |
Intangible assets, net | 1,195 | 1,274 |
Right of use asset | 604 | |
Total assets | 10,994 | 11,578 |
Current liabilities: | ||
Notes payable | 6,311 | 6,513 |
Current portion of long-term debt | 3,069 | 3,048 |
Current portion of lease liability | 221 | |
Trade accounts payable | 5,340 | 6,240 |
Customer deposits | 166 | 184 |
Accrued compensation | 611 | 492 |
Other accrued liabilities | 2,696 | 2,697 |
Total current liabilities | 18,414 | 19,174 |
Long-term debt | 2,128 | 2,113 |
Lease liability | 385 | |
Deferred income taxes | 10 | 10 |
Total long-term liabilities | 2,523 | 2,123 |
Total liabilities | 20,937 | 21,297 |
Commitments and contingencies | ||
Shareholders' deficit: | ||
Preferred stock, $.001 par value; 2,000,000 shares authorized; 597,139 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 1 | 1 |
Common stock, $.001 par value; 7,500,000 shares authorized, and 2,466,219 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 2 | 2 |
Additional paid-in capital | 82,203 | 82,646 |
Noncontrolling interest | 1,000 | 0 |
Accumulated deficit | (93,149) | (92,368) |
Total shareholders' deficit | (9,943) | (9,719) |
Total liabilities and shareholders' deficit | $ 10,994 | $ 11,578 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred sock, authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, issued (in shares) | 597,139 | 597,139 |
Preferred stock, outstanding (in shares) | 597,139 | 597,139 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 7,500,000 | 7,500,000 |
Common stock, shares issued (in shares) | 2,466,219 | 2,466,219 |
Common stock, shares outstanding (in shares) | 2,466,219 | 2,466,219 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 7,335 | $ 7,684 |
Costs and expenses: | ||
Cost of sales | 6,354 | 7,044 |
Selling, general, and administrative expenses | 1,496 | 1,411 |
Total costs and expenses | 7,850 | 8,455 |
Operating loss | (515) | (771) |
Other (expense) income: | ||
Interest expense, net | (263) | (237) |
Change in fair value of contingent earn-outs, net | 0 | 2 |
Loss before income taxes | (778) | (1,006) |
Income tax expense | (3) | (4) |
Net loss | (781) | (1,010) |
Accrued preferred stock dividend | (448) | (410) |
Net loss attributable to common shareholders | $ (1,229) | $ (1,420) |
Net loss per share, basic and diluted (in usd per share) | $ (0.51) | $ (0.59) |
Weighted average common shares outstanding, basic and diluted (in shares) | 2,407 | 2,396 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders’ Deficit Statement - USD ($) $ in Thousands | Total | Common Stock | Preferred Stock | Additional Paid-in Capital | Noncontrolling Interest | Accumulated Deficit |
Beginning preferred stock balance (in shares) | 547,000 | |||||
Beginning common stock balance (in shares) at Dec. 31, 2017 | 2,396,000 | |||||
Shareholders' equity beginning balance at Dec. 31, 2017 | $ (5,836) | $ 2 | $ 0 | $ 83,014 | $ 0 | $ (88,852) |
Beginning preferred stock balance (in shares) | 563,000 | |||||
Share-based compensation expense | 20 | 20 | ||||
Net loss | (1,010) | (1,010) | ||||
Dividend on preferred stock accrued | (410) | (410) | ||||
Preferred dividend PIK (paid) (in shares) | 16,000 | |||||
Preferred dividend (PIK) paid | 411 | $ 1 | 410 | |||
Ending common stock balance (in shares) at Mar. 31, 2018 | 2,396,000 | |||||
Ending preferred stock balance (in shares) at Mar. 31, 2018 | 563,000 | |||||
Shareholders' equity ending balance at Mar. 31, 2018 | $ (6,825) | $ 2 | $ 1 | 83,034 | 0 | (89,862) |
Beginning preferred stock balance (in shares) | 563,000 | |||||
Beginning preferred stock balance (in shares) | 597,139 | 597,000 | ||||
Beginning common stock balance (in shares) at Dec. 31, 2018 | 2,466,219 | 2,466,000 | ||||
Shareholders' equity beginning balance at Dec. 31, 2018 | $ (9,719) | $ 2 | $ 1 | 82,646 | 0 | (92,368) |
Beginning preferred stock balance (in shares) | 597,139 | 597,000 | ||||
Share-based compensation expense | $ 5 | 5 | ||||
Net loss | (781) | (781) | ||||
Noncontrolling interest | 1,000 | 1,000 | ||||
Dividend on preferred stock accrued | (448) | (448) | ||||
Preferred dividend (PIK) paid | $ 0 | |||||
Ending common stock balance (in shares) at Mar. 31, 2019 | 2,466,219 | 2,466,000 | ||||
Ending preferred stock balance (in shares) at Mar. 31, 2019 | 597,139 | 597,000 | ||||
Shareholders' equity ending balance at Mar. 31, 2019 | $ (9,943) | $ 2 | $ 1 | $ 82,203 | $ 1,000 | $ (93,149) |
Beginning preferred stock balance (in shares) | 597,139 | 597,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (781) | $ (1,010) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 190 | 180 |
Amortization expense, deferred financing costs | 0 | 29 |
Share-based compensation expense | 5 | 20 |
Provision for (recovery of) bad debts | 163 | 0 |
Gain on sale of equipment | 0 | (3) |
Unrealized loss (gain) on lumber derivatives | 21 | (62) |
Change in fair value of contingent earn-out receivable | 0 | (2) |
Accrued interest | (448) | 0 |
Imputed interest on seller deferred payment obligations | 0 | 32 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,275 | 1,601 |
Costs and estimated profit in excess of billings | 0 | 565 |
Inventories | 222 | (847) |
Other current assets | 73 | (92) |
Trade accounts payable | (900) | 608 |
Customer deposits | (822) | 1,078 |
Billings in excess of costs and estimated profit | 0 | (983) |
Accrued compensation | 119 | (37) |
Other accrued liabilities | 1 | (490) |
Net cash (used in) provided by operating activities | (882) | 587 |
Cash flows from investing activities: | ||
Proceeds from earn-out consideration | 63 | 166 |
Purchase of property and equipment | (15) | (17) |
Proceeds from sale of equipment | 0 | 5 |
Net cash provided by investing activities | 48 | 154 |
Cash flows from financing activities: | ||
Proceeds from long-term borrowings and finance lease obligations | 0 | 500 |
Proceeds from revolving line of credit | 5,481 | 8,295 |
Principal payments on revolving line of credit | (5,668) | (9,117) |
Payment of deferred financing costs | (15) | 0 |
Cash received from Joint Venture partner | 1,000 | 0 |
Principal payments on long-term debt and finance lease obligations | (9) | (306) |
Net cash provided by (used in) financing activities | 789 | (628) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (45) | 113 |
Cash, cash equivalents and restricted cash at beginning of period | 688 | 530 |
Cash, cash equivalents and restricted cash at end of period | 643 | 643 |
Supplemental cash flow information | ||
Cash paid for interest expense | 151 | 206 |
PIK payment of preferred stock dividend | $ 0 | $ 411 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | 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 Glenbrook Building Supply, Inc. (“Glenbrook”), a retail supplier of lumber and other building supplies, and EdgeBuilder, Inc. (“EdgeBuilder”), a manufacturer of structural wall panels, permanent wood foundation systems and other engineered wood products. 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 residential and commercial buildings in a production facility located in Prescott, Wisconsin. 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, 2018 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, 2019 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, 2018 . |
GOING CONCERN, LIQUIDITY AND CA
GOING CONCERN, LIQUIDITY AND CAPITAL RESOURCES | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN, LIQUIDITY AND CAPITAL RESOURCES | GOING CONCERN, LIQUIDITY AND CAPITAL RESOURCES We acknowledge that the Company continues to face a challenging operating environment, and we continue to focus on improving our overall profitability, we reported an operating loss for March 31, 2019. We have incurred significant operating losses in recent years and, as of March 31, 2019 , we had an accumulated deficit of approximately $93.1 million . Working capital has remained negative over the past several years. Cash used in operating activities, remains negative which has required us to generate funds from investing and financing activities. At March 31, 2019 , we had outstanding debt of approximately $11.5 million . These factors raise substantial doubt about the Company's ability to continue as a going concern. 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, 2019 , we had outstanding debt totaling approximately $11.5 million . Our debt primarily included (i) $3.4 million principal outstanding on KBS’s $4.0 million revolving credit facility under a loan and security agreement (as amended, the "KBS Loan Agreement") with Gerber Finance Inc. ("Gerber Finance"), and $3.0 million principal outstanding under a loan and security agreement with Gerber Finance used to finance the acquisition of EBGL (as amended, the “Acquisition Loan Agreement”), and (ii) $2.9 million principal outstanding on EBGL’s $3.0 million revolving credit facility under a revolving credit loan agreement with Premier Bank (the "Premier Loan Agreement"). We also have debt with related parties which includes (i) $1.5 million of unsecured promissory notes with Lone Star Value Co-Invest I, LP (" LSV Co-Invest I "), with interest payable semi-annually at a rate of 10.0% per annum (LSV Co-Invest I may elect to receive interest in-kind at a rate of 12.0% per annum), with any unpaid principal and interest due on January 12, 2020 ("LSVI Co-Invest I Notes Payable", otherwise referred to herein and defined below as the LSV Co-Invest I January Note and LSV Co-Invest I June Note) (ii) $0.3 million of unsecured promissory notes with to Lone Star Value Management, LLC ("LSVM"), with interest payable annually at a rate of 10.0% per annum (LSVM may elect to receive any interest payment entirely in-kind at a rate of 12.0% per annum), with any unpaid principal and interest due on November 30, 2020 ("LSVM Note"), and (iii) a $0.3 million unsecured promissory note with Digirad Corporation ("Digirad") (NASDAQ: DRAD) , a related party, with interest payable at 10.0% per annum for the first 12 months of its term, and at 12.0% per annum for the remaining 12 months , with any unpaid principal and interest due on December 14, 2020. At the applicable test dates, we were not in compliance with the following financial covenants under our loan agreements: (i) a requirement for KBS to maintain a minimum leverage ratio of 7 :1 for the fiscal year ended December 31, 2017 , 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, 2017 was $1.9 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, 2017 . In August 2017 , Gerber Finance provided us with a waiver for these events. As of December 31, 2018, KBS was not in compliance with the financial covenants under the KBS Loan Agreement requiring no net annual post-tax loss for KBS or the minimum leverage ratio covenant as of these test dates. Additionally, KBS was not in compliance with the 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, 2018. 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. In April 2019 and June 2019, we obtained a waiver from Gerber Finance for these events. In addition, the Company and Gerber Finance agreed to eliminate the minimum leverage ratio covenant for years after 2018. As of December 31, 2018, EBGL was not in compliance with the following covenants under the Premier Loan Agreement: (i) requirement to maintain a Debt Service Coverage Ratio for the calendar year of at least 1.0 ; and (ii) a requirement to deliver the Company's fiscal year-end audited financial statements within 120 days of the end of each calendar year. The occurrence of any event of default under the Premier Loan Agreement may result in EBGL’s obligations under the Premier Loan Agreement becoming immediately due and payable. In April 2019, we obtained a waiver from Premier Bank for these events through August 1, 2019 (the current maturity date of the Premier Loan Agreement). If the Company fails to comply with any financial covenants under our loan agreements with Gerber Finance or Premier Bank going forward, the applicable lender(s) may demand the repayment of the credit facilities amount outstanding and any unpaid interest thereon. We have 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 implemented a new dynamic pricing model for 2018 , which was designed to determine its bid price quoted to customers on the most current cost information to better ensure full recovery of its manufacturing costs and improve overall gross margins; • In November 2018, EBGL made the final payment due to the sellers of EBGL, freeing up $0.1 million per month of cash flows to be used for operations; As discussed in Note 15 , in January 2018 and in June 2018 , the Company issued unsecured promissory notes in the principal amounts of $0.5 million and $0.9 million , respectively, to LSV Co-Invest I to provide additional working capital for the Company; • In April 2019, KBS and EBGL executed sale leasebacks of several of their real estate properties (see further discussion in Note 20); and • We continue to look for opportunities to refinance our remaining debt on more favorable terms. On September 10, 2018, ATRM entered into a non-binding letter of intent (the “ LOI ”) relating to the acquisition of ATRM (the "ATRM Acquisition") by Digirad Corporation ("Digirad") (NASDAQ: DRAD) . Under the terms contemplated in the LOI, ATRM stockholders would have received consideration consisting of 0.4 shares of Digirad common stock for each share of outstanding ATRM common stock acquired by the Company in the ATRM Acquisition (see Note 4 for additional information). Although the LOI expired by its terms on December 31, 2018, Digirad and ATRM have had additional discussions regarding the terms and conditions of a proposed transaction and the consideration to be paid for ATRM shares. The parties are currently discussing that the consideration would not be Digirad shares of common stock, but some other form of security. In addition, on May 15, 2019, Digirad and ATRM entered into an Agreement which provides that, in the event the ATRM Acquisition does not close on or prior to December 31, 2019, ATRM will reimburse Digirad of certain consulting and related fees paid by Digirad on behalf of ATRM. We anticipate the ATRM Acquisition to close in the third quarter of 2019; however, the parties have not reached any definitive agreement, and there can be no assurance regarding timing of completion of regulatory approvals, which could delay timing of the closing, and any ATRM Acquisition would remain subject to the satisfaction of customary closing conditions. Our historical operating results indicate substantial doubt exists related to the Company’s ability to continue as a going concern. We cannot predict with certainty the outcome of our actions to generate liquidity, including the availability of additional debt financing, or whether such actions would generate the expected liquidity as currently planned. If we continue to experience operating losses, and we are not able to generate additional liquidity through the mechanisms described above or through some combination of other actions, we may not be able to continue operations. Additionally, a failure to generate additional liquidity could negatively impact our access to materials or services that are important to the operation of our business. In addition, these losses could further trigger violations of covenants under our debt agreements, resulting in accelerated payment of these loans. 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. 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. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02, Leases . This standard requires the recognition of lease assets and liabilities for all leases, with certain exceptions, on the balance sheet. This ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted ASU 2016-02 on January 1, 2019, and used the effective date as its date of initial application. As such, the Company did not adjust prior period amounts. The Company also elected to adopt the package of practical expedients upon transition, which permit companies to not reassess lease identification, classification, and initial direct costs under ASU 2016-02 for leases that commenced prior to the effective date. Upon adoption, the Company recorded a cumulative effect of initially applying this new standard resulting in the addition of $0.7 million of right of use assets and $0.7 million of corresponding short-term and long-term lease liabilities. For additional information on the required disclosures related to the impact of adopting this standard, see Note 12 to the Condensed Consolidated Financial Statements. In April 2019, the FASB issued ASU 2019-04 ("ASU 2019-04"), Codification Improvements to Topics 326, Financial Instruments - Credit Losses ("Topics 326"), Topic 815 Derivatives and Hedging ("Topic 815") and Topic 825, Financial Instruments ("Topic 825"). This guidance clarifies areas of guidance related to the recently issued standards on credit losses (Topic 326), derivatives and hedging (Topic 815), and recognition and measurement of financial instruments (Topic 825). The new guidance will be effective for the Company beginning in the first quarter of fiscal 2021. The Company is evaluating the impact of the adoption of ASU 2019-04 on its Consolidated Financial Statements. |
JOINT VENTURE
JOINT VENTURE | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
JOINT VENTURE | JOINT VENTURE Digirad Joint Venture and Services Agreement On December 14, 2018, the Company entered into a Joint Venture Agreement with Digirad (the "Joint Venture Agreement"), forming Star Procurement, LLC ("Star Procurement"), with each of ATRM and Digirad holding a 50% interest. The purpose of the joint venture is for Star Procurement to purchase building materials and related goods from third parties and sell to KBS Builders, Inc., the Company's wholly owned subsidiary. Star Procurement entered into a Services Agreement (the "Services Agreement") on January 2, 2019 with KBS in connection with the joint venture. Digirad's initial capital contribution to the joint venture was $1.0 million . ATRM did not make an initial capital contribution. The Company manages the Joint Venture and is deemed to have decision making power over this joint venture. Thus, the Company has consolidated its operations from the date of the start of the joint venture; January 2, 2019. Digirad’s contribution to the joint venture is considered noncontrolling interest and recorded as such in the Statement of Changes in Deficit. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company adopted ASC Topic 606 Revenue from Contracts with Customers ("ASC 606") as of January 1, 2018. The underlying principle of this new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration that the entity expects to be entitled to receive in exchange for those goods or services. In accordance with the new guidance, the Company recognizes revenue at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company's policy is to record revenue when control of the goods transfers to the customer. Net sales are comprised of gross revenues from sales of products less trade discounts and rebates. The Company’s contracts do not offer a right to return any of the products sold unless covered under the assurance-type warranty offered. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation. The Company does not offer additional service-type warranties for its products. Costs incurred to obtain a customer contract are not material to the Company for the KBS or EBGL revenue streams. The Company elected to apply the practical expedient to not capitalize costs to obtain contracts with a duration of one year or less, which are expensed and included within Cost of sales in the Condensed Consolidated Statements of Operations. The Company generally requires deposits prior to the start of production of customer orders. The Company will not finance any part of the sale. The full balance is due upon delivery. Below is a summary of deposits utilized during the year by operating segment: Modular Home Manufacturing Structured Wall Panel Manufacturing Total (in thousands) December 31, 2018 $ (181 ) $ (4 ) $ (184 ) Revenue recognized that was included in deposit at beginning of period 181 4 184 Increase due to cash received, excluding amounts recognized as revenue during the period (133 ) (33 ) (166 ) March 31, 2019 $ (133 ) $ (33 ) $ (166 ) The Company has expanded its financial statement disclosures as required by this new standard. See Note 19 , "Operating Segments" for additional disclosures provided as a result of this ASU. |
CASH, CASH EQUIVALENTS AND REST
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | CASH, CASH EQUIVALENTS AND 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 (unaudited)(in thousands): March 31, 2019 December 31, 2018 Cash and cash equivalents $ 87 $ 187 Restricted cash 556 501 Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows $ 643 $ 688 Amounts included in restricted cash represent $0.5 million on deposit with Gerber Finance from time-to-time as additional collateral to support borrowing under the KBS loan agreement and an additional $86.1 thousand on deposit with INTL FC Stone related to our lumber commodity hedging program. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Financial assets reported at fair value on a recurring basis included the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 Lumber derivative contracts (Level 1) (1) $ (14 ) $ 5 Contingent earn-out receivable, current (based on Level 3 inputs): (2) $ — $ 63 (1) Our Level 1 assets (lumber derivative contracts) fair value is based upon quoted market prices. (2) The contingent earn-out receivable related to the transfer of our test handler product line to Boston Semi Automation LLC ("BSA") in April 2014. As of December 31, 2018, all payments by BSA had been made. Quantitative information about Level 3 fair value measurements on a recurring basis at December 31, 2018 is summarized in the table below: Fair Value Asset Valuation Technique Unobservable Input Unobservable Input Amount Contingent earn-out receivable related to transfer of test handler product line Discounted cash flow Total revenue for the remaining royalty period $6.9 million Discount rate 2.41% |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company occasionally enters into lumber derivative contracts in order to protect its gross profit margins from fluctuations caused by volatility in lumber prices. At March 31, 2019 , the Company had a net long (buying) position of 660,000 board feet under six lumber derivatives contracts and had a short position of 660,000 board feet under six lumber derivative contracts with a net fair value of $(14.1) thousand , which is included in other current assets. The Company had restricted cash on deposit with the broker totaling $86.1 thousand at March 31, 2019 . At March 31, 2018, the Company had a net long (buying) position of 330,000 board feet under three lumber derivatives contracts with a fair value of $33.1 thousand , which is included in other current assets. In addition, at March 31, 2018, the Company had a long position of 1,320,000 board feet under twelve different lumber derivative call contracts and had a short position of 330,000 board feet under three different lumber derivative put contracts, with a net fair value of $55.2 thousand , which is also included in other current assets. The Company had restricted cash on deposit with the broker totaling $26.7 thousand at March 31, 2018. Gains and losses from derivative instruments, none of which are designated as hedging instruments, are recorded in cost of sales in the Company’s statements of operations and included the following (unaudited)(in thousands): Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Realized gain (loss), net $ 57 $ 42 Unrealized (loss) gain, net (21 ) 62 Total $ 36 $ 104 |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | ACCOUNTS RECEIVABLE, NET Accounts receivable consists of the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 Contract billings $ 2,966 $ 3,094 Retainage — 308 Subtotal 2,966 3,402 Less – allowance for doubtful accounts (312 ) (113 ) Accounts receivable, net $ 2,654 $ 3,289 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventory is comprised of the following (in thousands): March 31, 2019 December 31, 2018 Raw materials $ 1,048 $ 1,438 Work-in-process 331 352 Finished goods 190 — Inventories, net $ 1,569 $ 1,790 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | INTANGIBLE ASSETS, NET Intangible assets are comprised of the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Indefinite-lived intangible assets: Tradenames $ 394 $ — $ 394 $ 394 $ — $ 394 Finite-lived intangible assets: Customer relationships 2,097 (1,296 ) 801 2,097 (1,217 ) 880 Total intangible assets $ 2,491 $ (1,296 ) $ 1,195 $ 2,491 $ (1,217 ) $ 1,274 Amortization expense amounted to approximately $79.0 thousand for each of the three months ended March 31, 2019 and 2018 . Estimated amortization of purchased intangible assets over the next five years is as follows (unaudited)(in thousands): 2019 (nine months) $ 238 2020 316 2021 163 2022 84 2023 — Thereafter — Total $ 801 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES In February 2016, the FASB issued ASU 2016-02, Leases , or ASU 2016-02, to enhance the transparency and comparability of financial reporting related to leasing arrangements. The Company adopted ASU 2016-02 on January 1, 2019, or the effective date, and used the effective date as its date of initial application. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the facts and circumstances present. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining fixed lease term. Certain adjustments to the right-of-use asset may be required for items such as incentives received. In calculating the present value of future lease payments, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company has elected to utilize a single blended interest rate based on geographies and lease terms that comprise the lease portfolio. Although separation of lease and non-lease components is required, certain practical expedients are available. Entities may elect the practical expedient to not separate lease and non-lease components. The Company has elected to account for the lease and non-lease components of each of its operating leases as a single lease component and allocate all of the contract consideration to the lease component only. The lease component results in an operating right-of-use asset being recorded on the balance sheet and amortized on a straight-line basis as lease expense. Many of the Company’s leases contain options to renew and extend lease terms and options to terminate leases early. The Company does not recognize the right-of-use asset or lease liability for renewal or termination periods unless the Company is reasonably certain to exercise the option at lease inception. The Company has operating leases for real estate and non-real estate in Minnesota, Wisconsin and Maine. The Company has finance leases for some equipment that is immaterial. The Company has lease arrangements with lease and non-lease components and has elected to account for the lease and non-lease component as a single lease component. and has allocated all of the contract consideration to the lease component only. The Company has existing net leases in which the non-lease components (e.g. common area maintenance, maintenance, consumables, etc.) are paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. As of March 31, 2019, a right-of-use asset of $0.6 million and lease liability of $0.6 million are reflected on the balance sheet. The elements of lease expense were as follows (dollars in thousands)(unaudited): Three Months Ended March 31, 2019 Lease Cost Operating lease cost $ 68 Variable lease cost 34 Total lease cost $ 102 Other Information Operating cash flows used for operating leases $ 67 Operating Leases Weighted average discount rate 10.0 % Weighted average remaining lease term (years) 2.75 Future lease payments under non-cancelable leases as of March 31, 2019 were as detailed below(in thousands)(unaudited): 2019 (nine months) $ 201 2020 273 2021 207 2022 — 2023 — Total lease payments 681 Less: imputed interest 76 Total operating liabilities $ 605 |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES Other accrued liabilities are comprised of the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 Accrued taxes (1) $ 1,313 $ 1,815 Accrued interest expense 633 148 Accrued dividend payable 448 449 Accrued sales rebates 152 141 Accrued health insurance costs 67 67 Accrued warranty 58 56 Other 25 21 Total other accrued liabilities $ 2,696 $ 2,697 (1) Primarily includes accrued sales and use taxes. Changes in accrued warranty are summarized below (unaudited)(in thousands): Three Months Ended March 31, 2019 2018 Accrual balance, beginning of period $ 56 $ 50 Accruals for warranties 2 2 Accrual balance, end of period $ 58 $ 52 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE As of March 31, 2019 , we had outstanding revolving lines of credit of approximately $6.3 million . Our notes payable primarily included (i) $3.4 million principal outstanding on KBS’s $4.0 million revolving credit facility under the KBS Loan Agreement and (ii) $2.9 million principal outstanding on EBGL’s $3.0 million revolving credit facility under the Premier Loan Agreement, net of an immaterial amount of unamortized financing fees. KBS 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 . Under the terms of the agreement, the KBS Loan Agreement was extended automatically for an additional one -year period ending on February 22, 2020. 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, 2019 , approximately $3.4 million was outstanding under the KBS Loan Agreement, which, after offset of an immaterial amount of unamortized deferred financing costs, is presented at a net amount of approximately $3.4 million on the Condensed Consolidated Balance Sheet. The parties to the Acquisition Loan Agreement have amended 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. The parties to the KBS Loan Agreement have amended the KBS Loan Agreement to provide for increased availability under the KBS Loan Agreement to KBS under certain circumstances, including for new equipment additions, and certain other changes, as well as a waiver of certain covenants. On September 29, 2017, the parties to both the KBS Loan Agreement and the Acquisition Loan Agreement amended the respective loan agreements in conjunction with the Exchange with Lone Star Value Investors, LP ("LSVI") and LSV Co-Invest I (see discussion below). In connection with amending the KBS Loan Agreement, Jeffrey E. Eberwein, Chairman of the Company’s Board of Directors (the “Board”), executed a guaranty dated November 20, 2017 in favor of Gerber Finance unconditionally guaranteeing up to $0.5 million of KBS’s obligations under the KBS Loan Agreement arising from certain permitted over advances. 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. Through a series of correspondence between KBS and Gerber Finance, on or about January 15, 2018, which the parties to the KBS Loan Agreement deemed to be the Seventh Agreement of Amendment to the Loan and Security Agreement, the parties clarified certain definitions in the KBS Loan Agreement. On October 1, 2018, the parties to the KBS Loan Agreement entered into an Eighth Agreement of Amendment to the Loan and Security Agreement to extend the availability of up to $0.6 million of over advances to KBS above the borrowing base in order to provide KBS with additional working capital. The overadvance was scheduled to be paid down by $75.0 thousand per week beginning January 4, 2019 in order to be fully repaid on or before February 23, 2019 to coincide with the expiration date of the line of credit. As the line was automatically renewed through February 23, 2020, Gerber Finance has subsequently agreed to begin the scheduled pay down of $75.0 thousand per week to begin on February 15, 2019 for eight weeks with final repayment scheduled for April 8, 2019. The $0.6 million overadvance was paid in full on April 3, 2019. As of December 31, 2018 and 2017, KBS was not in compliance with the financial covenants requiring no net annual post-tax loss for KBS or the minimum leverage ratio covenant as of these test dates. Additionally, KBS was not in compliance with the 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, 2017. 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. In April 2019 and June 2019, we obtained a waiver from Gerber Finance for these events. In addition obtaining a waiver for these covenants, the Company and Gerber Finance agreed to eliminate the minimum leverage ratio covenant for fiscal years after 2018 (see Note 20). If the Company fails to comply with any financial covenants under our loan agreements with Gerber Finance going forward, Gerber Finance may demand the repayment of the credit facilities amount outstanding and any unpaid interest thereon. Promissory Note Sale to Digirad On December 14, 2018, the Company issued to Digirad an unsecured promissory note in the principal amount of $0.3 million in exchange for the same amount in cash (the “Digirad Note”). The Digirad Note bears interest at 10.0% per annum for the first 12 months of its term, and at 12.0% per annum for the remaining 12 months. All unpaid principal and interest under the Digirad Note is due on December 14, 2020. The Company may prepay the Digirad Note at any time after a specified amount of advance notice to Digirad (subject to certain restrictions under the Company’s existing loan agreements). The Digirad 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. EBGL Line of Credit On October 4, 2016, concurrently with the EBGL Acquisition, the Company entered the EBGL Loan Agreement with Gerber Finance providing EBGL with a revolving working capital line of credit of up to $3.0 million . Availability under the EBGL Loan Agreement was based on a formula tied to the borrowers’ eligible accounts receivable, inventory and equipment. The initial term of the EBGL Loan Agreement was set to expire on October 3, 2018, but extended 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 was 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 $0.5 million upon the request of the borrowers and in the discretion of Gerber Finance. 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 contained representations, warranties, affirmative and negative covenants, events of default and other provisions customary for financings of this type. Financial covenants required that EBGL maintained a minimum tangible net worth and a minimum debt service coverage ratio. The Company refinanced the EBGL Loan Agreement through a new $3.0 million revolving working capital line of credit with Premier on June 30, 2017. On June 30, 2017, EBGL entered into the Premier Loan Agreement with 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 was scheduled to expire on June 30, 2018, but was extended by Premier until February 1, 2019. In February 2019, the Premier Loan Agreement was extended further by Premier until August 1, 2019. The Premier Loan Agreement may be further 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. As of December 31, 2017 and 2018, EBGL was not in compliance with the following covenants under the Premier Loan Agreement: (i) requirement to maintain a Debt Service Coverage Ratio for the calendar year of at least 1.0 ; and (ii) a requirement to deliver the Company's fiscal year-end audited financial statements within 120 days of the end of each calendar year. The occurrence of any event of default under the Premier Loan Agreement may result in EBGL’s obligations under the Premier Loan Agreement becoming immediately due and payable. In April 2019, we obtained a waiver from Premier for these events through August 1, 2019 (the current maturity date of the Premier Loan Agreement). If the Company fails to comply with any financial covenants under our loan agreements with Gerber Finance or Premier going forward, the applicable lender(s) may demand the repayment of the credit facilities amount outstanding and any unpaid interest thereon. 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, Chairman of the Company's Board, 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. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt is comprised of the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 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 (automatically extended to December 31, 2019 as neither party elected to terminate), supported by pledge agreement between LSVI and Gerber Finance of up to $3.0 million plus additional fees $ 3,000 $ 3,000 Promissory note 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 January 12, 2020 909 909 Promissory note 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 January 12, 2020 528 528 Promissory note payable to LSVM (a Related Party), unsecured, interest of 10.0% per annum (12% per annum PIK Interest) payable annually, with any unpaid principal and interest due on November 30, 2020 300 300 Digirad (a Related Party) unsecured promissory note, interest at 10.0% per annum for the first 12 months of its term, and at 12.0% per annum for the remaining 12 months. All unpaid principal and interest under the Digirad Note is due on December 14, 2020 275 275 Vehicle financing, interest at 5.9% per annum, due June 20, 2023 76 79 Equipment financing, interest at 10.0% per annum, due November 26, 2020 44 — EBGL computer equipment and software financing, secured by underlying assets, interest at 9.0% per annum, payable in monthly installments of $1,105 per month, through May 2022 36 39 KBS software installment payment agreement, unsecured, interest at 8.0% per annum, payable in monthly installments of $1,199 through September 2020 20 21 Revolving equipment credit line, unsecured 9 10 Total long-term debt 5,197 5,161 Current portion (3,069 ) (3,048 ) Noncurrent portion $ 2,128 $ 2,113 As of December 31, 2018, the Company was not in compliance with certain covenants with its Gerber promissory note totaling $3.0 million . These covenant breaches include: debt service coverage ratio and timely reporting of financial statements. The Company received a waiver, dated as of June 25, 2019, for these covenant breaches through December 31, 2018. Amendments to Gerber Finance Loan Agreements On February 22, 2019, the Company entered into a Ninth Agreement of Amendment to Loan and Security Agreement (the “Ninth KBS Loan Amendment”) to amend the terms of the KBS Loan Agreement to extend the availability of up to $0.6 million of over advances through no later than February 23, 2020 in order to provide KBS with additional working capital. The overadvance was paid in full in April 2019. In connection with the Ninth KBS Loan Amendment, Mr. Eberwein executed a reaffirmation of guaranty in favor of Gerber Finance relating to his unconditional guaranty of $0.6 million of KBS’s obligations under the KBS Loan Agreement arising from the $0.6 million of over advances permitted under the Ninth KBS Loan Amendment. |
STOCK INCENTIVE PLAN AND SHARE-
STOCK INCENTIVE PLAN AND SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK INCENTIVE PLAN AND SHARE-BASED COMPENSATION | 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. On December 18, 2017, ATRM granted 70,000 restricted shares of the Company's common stock to its directors and its 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 $1.18 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants amount to approximately $20.4 thousand for the three months ended March 31, 2018 and is included in the caption "Selling, general and administrative expenses" in our Condensed Consolidated Statement of Operations. The remaining compensation expense was recognized in full in 2018. On December 12, 2018, ATRM granted 70,000 shares of the Company's common stock to its directors, its Chief Executive Officer and Chief Financial Officer ( 10,000 shares each) and granted an additional 40,000 shares of the Company's common stock to each member of the Board of Director's Special Committee ( 10,000 shares each). The shares vest one year after the grant date and the fair value of the awards was determined to be $0.20 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants was $5.4 thousand for the three months ended March 31, 2019 and is included in the caption "Selling, general and administrative expenses" in our Condensed Consolidated Statement of Operations. The remaining compensation expense of approximately $15.9 thousand will be recognized on a straight-line basis through December 12, 2019, subject to forfeitures. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 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. As of March 31, 2019 , we have a net deferred tax liability of $10.0 thousand 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, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | LEGAL PROCEEDINGS From time to time, in the ordinary course of ATRM’s business, the Company is party to various 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 condensed consolidated financial statements. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS 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, 2018 . 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 (unaudited)(in thousands): Modular Home Manufacturing Structural Wall Panel Manufacturing Total March 31, 2019 2018 2019 2018 2019 2018 Segment net sales $ 2,378 $ 4,849 $ 4,957 $ 2,835 $ 7,335 $ 7,684 Depreciation and amortization expense 135 132 55 48 190 180 Interest expense, net 76 90 125 134 201 224 Segment net (loss) income (797 ) (284 ) 387 (281 ) (410 ) (565 ) Total segment assets 5,166 7,095 4,348 3,563 9,514 10,658 Expenditures for segment assets — 12 60 5 60 17 Reconciliation of Segment Information (unaudited)(in thousands) The following table presents the reconciliation of revenues (in thousands): March 31, 2019 2018 Total net sales for reportable segments $ 7,335 $ 7,684 Consolidated net sales $ 7,335 $ 7,684 The following table presents the reconciliation of net loss (unaudited)(in thousands): March 31, 2019 2018 Total net loss for reportable segments $ (410 ) $ (565 ) Unallocated amounts: Other corporate expenses (306 ) (430 ) Interest expense (62 ) (13 ) Change in fair value of contingent earn-out — 2 Provision for income taxes (3 ) (4 ) Consolidated net loss $ (781 ) $ (1,010 ) The following table presents the reconciliation of assets (unaudited)(in thousands): March 31, December 31, 2019 2018 Total assets for reportable segments 9,514 $ 10,937 Other assets 1,480 641 Consolidated assets $ 10,994 $ 11,578 The following table presents the reconciliation other significant adjustments (unaudited)(in thousands): Segment Totals Unallocated Amount Consolidated Totals March 31, 2019 2018 2019 2018 2019 2018 Depreciation and amortization expense $ 190 $ 180 $ — $ — $ 190 $ 180 Interest expense 201 224 62 13 263 237 The unallocated amounts of interest expense is the amount of interest incurred by the Company at the parent level, but not allocated to the operating segments. The unallocated amounts 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, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Merger with Digirad Corporation On September 10, 2018, Digirad announced that its board of directors had approved the conversion of Digirad into a diversified holding company and in conjunction with that new structure, that it would be acquiring the Company. Under the terms contemplated in the LOI, ATRM shareholders of the Company would have received consideration consisting of 0.4 shares of Digirad common stock for each share of outstanding ATRM common stock acquired by the Company in the ATRM Acquisition. Although the LOI expired by its terms on December 31, 2018, Digirad and ATRM have had additional discussions regarding the terms and conditions of a proposed transaction and the consideration to be paid for ATRM shares. The parties are currently discussing that the consideration would not be Digirad shares of common stock, but some other form of security. In addition, on May 15, 2019, Digirad and ATRM entered into an Agreement which provides that, in the event the ATRM Acquisition does not close on or prior to December 31, 2019, ATRM will reimburse Digirad of certain consulting and related fees paid by Digirad on behalf of ATRM. We anticipate the ATRM Acquisition to close in the third quarter of 2019; however, the parties have not reached any definitive agreement, and there can be no assurance regarding timing of completion of regulatory approvals, which could delay timing of the closing and any ATRM Acquisition would remain subject to the satisfaction of customary closing conditions. As of July 1, 2019 , Jeffrey E. Eberwein, the Chairman of the Company’s Board, owns approximately 17.4% of the outstanding common stock of ATRM. Mr. Eberwein also is the Chairman of the Board of Digirad and beneficially owns 869,152 shares of Digirad's common stock, or approximately 4.3% of the shares outstanding. Mr. Eberwein is also the Chief Executive Officer of Lone Star Value Management, LLC ("LSVM"), which is the investment manager of LSVI, and LSVI owns 222,577 shares of the Company’s Series B Stock and another 374,562 shares of Series B Stock are owned directly by LSV Co-Invest I. Through these relationships and other relationships with affiliated entities, Mr. Eberwein may be deemed the beneficial owner of the securities owned by LSVI and LSV Co-Invest I. Mr. Eberwein disclaims beneficial ownership of Series B Stock, except to the extent of his pecuniary interest therein. LSV Co-Invest I also holds unsecured promissory notes of the Company in the principal amount totaling $1.4 million , the LSV Co-Invest I Notes Payable, and LSVM holds an unsecured note with a principal amount totaling $0.3 million , the LSVM Note. In addition, LSVI has pledged up to $3.0 million plus additional fees as collateral for a current debt of ATRM. Amendments to Gerber Finance Loan Agreements On April 1, 2019, the Company entered into a Tenth Agreement of Amendment to Loan and Security Agreement (the “Tenth KBS Loan Amendment”) to amend the terms of the KBS Loan Agreement, and a Fifth Agreement of Amendment to Loan and Security Agreement (the “Fifth EBGL Loan Amendment”) to amend the terms of the Acquisition Loan Agreement. The Tenth KBS Loan Amendment and the Fifth EBGL Loan Amendment amended the terms of the KBS Loan Agreement and the Acquisition Loan Agreement, respectively, to permit the Company’s acquisition of LSVM and to clarify the parties’ rights and duties in connection therewith, among other things. In connection with the Tenth KBS Loan Amendment, Mr. Eberwein executed a reaffirmation of guaranty in favor of Gerber Finance relating to his unconditional guaranty of $0.6 million of KBS’s obligations under the KBS Loan Agreement arising from the $0.6 million of over advances permitted under the Ninth KBS Loan Amendment. On April 15, 2019, the Company entered into an Eleventh Agreement of Amendment to Loan and Security Agreement (the “Eleventh KBS Loan Amendment”) to amend the terms of the KBS Loan Agreement to (i) provide for increased borrowing capability; (ii) to eliminate the Leverage Ratio financial covenant required by Schedule III (Financial Covenants); and (iii) to amend the Net Loss covenant required by Schedule III (Financial Covenants). In addition, the Eleventh KBS Loan Amendment provided a waiver for certain covenants for the 2017 and 2018 fiscal years. In connection with the Eleventh KBS Loan Amendment, Mr. Eberwein executed a reaffirmation of agreements in favor of Gerber Finance relating to his unconditional guaranty as described above and any other documents related to KBS. Acquisition of Lone Star Value Management On April 1, 2019, the Company entered into a Membership Interest Purchase Agreement (the “LSVM Purchase Agreement”) with LSVM and Mr. Eberwein. Pursuant to the terms of the LSVM Purchase Agreement, Mr. Eberwein sold all of the issued and outstanding membership interests of LSVM to the Company (the “LSVM Acquisition”) for a purchase price of $100 , subject to a working capital adjustment provision. The LSVM Acquisition closed simultaneously with the execution and delivery of the LSVM Purchase Agreement, with working capital adjusted to January 1, 2019, as a result of which LSVM became a wholly-owned subsidiary of ATRM. Pursuant to the LSVM Purchase Agreement, the current assets (as well as the $0.3 million LSVM December 2018 Note issued by the Company) and current liabilities existing prior to January 1, 2019 remain with Mr. Eberwein. The LSVM Purchase Agreement contains representations, warranties, covenants and indemnification provisions customary for transactions of this type. The Company's entry into the LSVM Purchase Agreement and the LSVM Acquisition were unanimously approved by a special committee of the Board comprised solely of independent directors. As of the date of these condensed consolidated financial statements, the initial accounting for the LSVM Acquisition was incomplete, as the Company continues to determine the fair value of the acquired assets and liabilities. As of the date of these condensed consolidated financial statements, the initial accounting for this acquisition was incomplete as the Company is currently working to determine the fair value of the acquired assets and liabilities. Sale of Maine Facilities On April 3, 2019, 947 Waterford Road, LLC (“947 Waterford,” a wholly-owned indirect subsidiary of Digirad) entered into a Purchase and Sale Agreement (the “Waterford Purchase Agreement”) with KBS, pursuant to which 947 Waterford purchased certain real property and related improvements (including buildings) located in Waterford, Maine (the “Waterford Facility”) from KBS (the “Waterford Transaction”), and acquired the Waterford Facility. The Waterford Purchase Agreement contains representations, warranties and covenants of KBS and 947 Waterford that are customary for a transaction of this nature. The purchase price of the Waterford Facility is $1.0 million , subject to adjustment for taxes and other charges and assessments. 947 Waterford is a wholly-owned indirect subsidiary of Digirad, formed for the purpose of acquiring and holding the Waterford Facility. On April 3, 2019, 300 Park Street, LLC (“300 Park,” a wholly-owned indirect subsidiary of Digirad) entered into a Purchase and Sale Agreement (the “Park Purchase Agreement”) with KBS, pursuant to which 300 Park purchased certain real property and related improvements and personal property (including buildings, machinery and equipment) located in Paris, Maine (the “Park Facility”) from KBS (the “Park Transaction”), and acquired the Park Facility. The Park Purchase Agreement contains representations, warranties and covenants of KBS and 300 Park that are customary for a transaction of this nature. The purchase price of the Park Facility is $2.9 million , subject to adjustment for taxes and other charges and assessments. On April 3, 2019, KBS entered into a separate lease agreement with each of 947 Waterford (the “Waterford Lease”) and 300 Park (the “Park Lease”). The Waterford Lease has an initial term of 120 months , which is subject to extension. The base rental payments associated with the initial term under the Waterford Lease are estimated to be between $1.2 million and $1.3 million in the aggregate. The Park Lease has an initial term of 120 months , which is subject to extension. The base rental payments associated with the initial term under the Park Lease are estimated to be between $3.3 million and $3.6 million in the aggregate. On April 3, 2019, KBS entered into a lease agreement (the “Oxford Lease”) with 56 Mechanic Falls Road, LLC (“56 Mechanic,” a wholly-owned indirect subsidiary of Digirad), in connection with that certain real property and related improvements and personal property owned by RJF – Keiser Real Estate, LLC (“RJF”) (including buildings, fixtures, and other improvements on the land, and all machinery and equipment and other personal property, if any, owned by RJF and located on the property) located in Oxford, Maine (the “Oxford Premises”). The Oxford Lease was amended as of April 18, 2019 (the “Oxford Lease Amendment”) to provide that the commencement date will be the later of the closing of the sale of the Oxford Premises (the "Oxford Transaction"), which occurred on March 27, 2019, and the date that possession of the leased premises is able to be delivered to KBS, which is anticipated to occur on or prior to June 30, 2019. The Oxford Transaction is pursuant to that certain Purchase and Sale Agreement between 56 Mechanic and RJF. The Oxford Lease has an initial term of 120 months , which is subject to extension. The base rental payments associated with the initial term under the Oxford Lease are estimated to be between $1.4 million and $1.6 million in the aggregate. ATRM has unconditionally guaranteed the performance of all obligations under each of the Leases to be performed by KBS, including, without limitation, the payment of all required rent. |
RECENTLY ISSUED ACCOUNTING PR_2
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | In February 2016, the FASB issued ASU 2016-02, Leases . This standard requires the recognition of lease assets and liabilities for all leases, with certain exceptions, on the balance sheet. This ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted ASU 2016-02 on January 1, 2019, and used the effective date as its date of initial application. As such, the Company did not adjust prior period amounts. The Company also elected to adopt the package of practical expedients upon transition, which permit companies to not reassess lease identification, classification, and initial direct costs under ASU 2016-02 for leases that commenced prior to the effective date. Upon adoption, the Company recorded a cumulative effect of initially applying this new standard resulting in the addition of $0.7 million of right of use assets and $0.7 million of corresponding short-term and long-term lease liabilities. For additional information on the required disclosures related to the impact of adopting this standard, see Note 12 to the Condensed Consolidated Financial Statements. In April 2019, the FASB issued ASU 2019-04 ("ASU 2019-04"), Codification Improvements to Topics 326, Financial Instruments - Credit Losses ("Topics 326"), Topic 815 Derivatives and Hedging ("Topic 815") and Topic 825, Financial Instruments ("Topic 825"). This guidance clarifies areas of guidance related to the recently issued standards on credit losses (Topic 326), derivatives and hedging (Topic 815), and recognition and measurement of financial instruments (Topic 825). The new guidance will be effective for the Company beginning in the first quarter of fiscal 2021. The Company is evaluating the impact of the adoption of ASU 2019-04 on its Consolidated Financial Statements. |
REVENUE RECOGNITION | The Company adopted ASC Topic 606 Revenue from Contracts with Customers ("ASC 606") as of January 1, 2018. The underlying principle of this new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration that the entity expects to be entitled to receive in exchange for those goods or services. In accordance with the new guidance, the Company recognizes revenue at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company's policy is to record revenue when control of the goods transfers to the customer. Net sales are comprised of gross revenues from sales of products less trade discounts and rebates. The Company’s contracts do not offer a right to return any of the products sold unless covered under the assurance-type warranty offered. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation. The Company does not offer additional service-type warranties for its products. Costs incurred to obtain a customer contract are not material to the Company for the KBS or EBGL revenue streams. The Company elected to apply the practical expedient to not capitalize costs to obtain contracts with a duration of one year or less, which are expensed and included within Cost of sales in the Condensed Consolidated Statements of Operations. The Company generally requires deposits prior to the start of production of customer orders. The Company will not finance any part of the sale. The full balance is due upon delivery. Below is a summary of deposits utilized during the year by operating segment: Modular Home Manufacturing Structured Wall Panel Manufacturing Total (in thousands) December 31, 2018 $ (181 ) $ (4 ) $ (184 ) Revenue recognized that was included in deposit at beginning of period 181 4 184 Increase due to cash received, excluding amounts recognized as revenue during the period (133 ) (33 ) (166 ) March 31, 2019 $ (133 ) $ (33 ) $ (166 ) |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Deposits Utilized | Below is a summary of deposits utilized during the year by operating segment: Modular Home Manufacturing Structured Wall Panel Manufacturing Total (in thousands) December 31, 2018 $ (181 ) $ (4 ) $ (184 ) Revenue recognized that was included in deposit at beginning of period 181 4 184 Increase due to cash received, excluding amounts recognized as revenue during the period (133 ) (33 ) (166 ) March 31, 2019 $ (133 ) $ (33 ) $ (166 ) |
CASH, CASH EQUIVALENTS AND RE_2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents, and 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 (unaudited)(in thousands): March 31, 2019 December 31, 2018 Cash and cash equivalents $ 87 $ 187 Restricted cash 556 501 Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows $ 643 $ 688 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 (unaudited)(in thousands): March 31, 2019 December 31, 2018 Lumber derivative contracts (Level 1) (1) $ (14 ) $ 5 Contingent earn-out receivable, current (based on Level 3 inputs): (2) $ — $ 63 (1) Our Level 1 assets (lumber derivative contracts) fair value is based upon quoted market prices. (2) The contingent earn-out receivable related to the transfer of our test handler product line to Boston Semi Automation LLC ("BSA") in April 2014. As of December 31, 2018, all payments by BSA had been made. |
Schedule of Quantitative Information Level 3 Fair Value Assets and Liabilities | Quantitative information about Level 3 fair value measurements on a recurring basis at December 31, 2018 is summarized in the table below: Fair Value Asset Valuation Technique Unobservable Input Unobservable Input Amount Contingent earn-out receivable related to transfer of test handler product line Discounted cash flow Total revenue for the remaining royalty period $6.9 million Discount rate 2.41% |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | Gains and losses from derivative instruments, none of which are designated as hedging instruments, are recorded in cost of sales in the Company’s statements of operations and included the following (unaudited)(in thousands): Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Realized gain (loss), net $ 57 $ 42 Unrealized (loss) gain, net (21 ) 62 Total $ 36 $ 104 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable consists of the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 Contract billings $ 2,966 $ 3,094 Retainage — 308 Subtotal 2,966 3,402 Less – allowance for doubtful accounts (312 ) (113 ) Accounts receivable, net $ 2,654 $ 3,289 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory is comprised of the following (in thousands): March 31, 2019 December 31, 2018 Raw materials $ 1,048 $ 1,438 Work-in-process 331 352 Finished goods 190 — Inventories, net $ 1,569 $ 1,790 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets are comprised of the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Indefinite-lived intangible assets: Tradenames $ 394 $ — $ 394 $ 394 $ — $ 394 Finite-lived intangible assets: Customer relationships 2,097 (1,296 ) 801 2,097 (1,217 ) 880 Total intangible assets $ 2,491 $ (1,296 ) $ 1,195 $ 2,491 $ (1,217 ) $ 1,274 |
Schedule of Estimated Amortization of Intangible Assets | Estimated amortization of purchased intangible assets over the next five years is as follows (unaudited)(in thousands): 2019 (nine months) $ 238 2020 316 2021 163 2022 84 2023 — Thereafter — Total $ 801 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Costs | The elements of lease expense were as follows (dollars in thousands)(unaudited): Three Months Ended March 31, 2019 Lease Cost Operating lease cost $ 68 Variable lease cost 34 Total lease cost $ 102 Other Information Operating cash flows used for operating leases $ 67 Operating Leases Weighted average discount rate 10.0 % Weighted average remaining lease term (years) 2.75 |
Schedule of Future Lease Payments | Future lease payments under non-cancelable leases as of March 31, 2019 were as detailed below(in thousands)(unaudited): 2019 (nine months) $ 201 2020 273 2021 207 2022 — 2023 — Total lease payments 681 Less: imputed interest 76 Total operating liabilities $ 605 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities are comprised of the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 Accrued taxes (1) $ 1,313 $ 1,815 Accrued interest expense 633 148 Accrued dividend payable 448 449 Accrued sales rebates 152 141 Accrued health insurance costs 67 67 Accrued warranty 58 56 Other 25 21 Total other accrued liabilities $ 2,696 $ 2,697 (1) Primarily includes accrued sales and use taxes. |
Schedule of Changes in Accrued Warranty | Changes in accrued warranty are summarized below (unaudited)(in thousands): Three Months Ended March 31, 2019 2018 Accrual balance, beginning of period $ 56 $ 50 Accruals for warranties 2 2 Accrual balance, end of period $ 58 $ 52 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt is comprised of the following (unaudited)(in thousands): March 31, 2019 December 31, 2018 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 (automatically extended to December 31, 2019 as neither party elected to terminate), supported by pledge agreement between LSVI and Gerber Finance of up to $3.0 million plus additional fees $ 3,000 $ 3,000 Promissory note 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 January 12, 2020 909 909 Promissory note 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 January 12, 2020 528 528 Promissory note payable to LSVM (a Related Party), unsecured, interest of 10.0% per annum (12% per annum PIK Interest) payable annually, with any unpaid principal and interest due on November 30, 2020 300 300 Digirad (a Related Party) unsecured promissory note, interest at 10.0% per annum for the first 12 months of its term, and at 12.0% per annum for the remaining 12 months. All unpaid principal and interest under the Digirad Note is due on December 14, 2020 275 275 Vehicle financing, interest at 5.9% per annum, due June 20, 2023 76 79 Equipment financing, interest at 10.0% per annum, due November 26, 2020 44 — EBGL computer equipment and software financing, secured by underlying assets, interest at 9.0% per annum, payable in monthly installments of $1,105 per month, through May 2022 36 39 KBS software installment payment agreement, unsecured, interest at 8.0% per annum, payable in monthly installments of $1,199 through September 2020 20 21 Revolving equipment credit line, unsecured 9 10 Total long-term debt 5,197 5,161 Current portion (3,069 ) (3,048 ) Noncurrent portion $ 2,128 $ 2,113 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information of Reportable Segment | The following table presents certain financial information regarding each reportable segment (unaudited)(in thousands): Modular Home Manufacturing Structural Wall Panel Manufacturing Total March 31, 2019 2018 2019 2018 2019 2018 Segment net sales $ 2,378 $ 4,849 $ 4,957 $ 2,835 $ 7,335 $ 7,684 Depreciation and amortization expense 135 132 55 48 190 180 Interest expense, net 76 90 125 134 201 224 Segment net (loss) income (797 ) (284 ) 387 (281 ) (410 ) (565 ) Total segment assets 5,166 7,095 4,348 3,563 9,514 10,658 Expenditures for segment assets — 12 60 5 60 17 |
Schedule of Reconciliation of Operating Segment Information | The following table presents the reconciliation of revenues (in thousands): March 31, 2019 2018 Total net sales for reportable segments $ 7,335 $ 7,684 Consolidated net sales $ 7,335 $ 7,684 The following table presents the reconciliation of net loss (unaudited)(in thousands): March 31, 2019 2018 Total net loss for reportable segments $ (410 ) $ (565 ) Unallocated amounts: Other corporate expenses (306 ) (430 ) Interest expense (62 ) (13 ) Change in fair value of contingent earn-out — 2 Provision for income taxes (3 ) (4 ) Consolidated net loss $ (781 ) $ (1,010 ) The following table presents the reconciliation of assets (unaudited)(in thousands): March 31, December 31, 2019 2018 Total assets for reportable segments 9,514 $ 10,937 Other assets 1,480 641 Consolidated assets $ 10,994 $ 11,578 |
Schedule of Other Operating Segment Adjustments | The following table presents the reconciliation other significant adjustments (unaudited)(in thousands): Segment Totals Unallocated Amount Consolidated Totals March 31, 2019 2018 2019 2018 2019 2018 Depreciation and amortization expense $ 190 $ 180 $ — $ — $ 190 $ 180 Interest expense 201 224 62 13 263 237 |
GOING CONCERN, LIQUIDITY AND _2
GOING CONCERN, LIQUIDITY AND CAPITAL RESOURCES - Narrative (Details) | Sep. 10, 2018 | Nov. 30, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 17, 2018USD ($) | Dec. 14, 2018USD ($) | Jun. 30, 2018USD ($) | Jan. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Oct. 04, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||
Accumulated deficit | $ 93,149,000 | $ 92,368,000 | ||||||||||
Principal outstanding | 11,500,000 | |||||||||||
Notes payable | 6,311,000 | 6,513,000 | ||||||||||
Total long-term debt | 5,197,000 | $ 5,161,000 | ||||||||||
Net annual post tax loss | 781,000 | $ 1,010,000 | ||||||||||
Annual review delivery period | 105 days | 105 days | ||||||||||
KBS Loan Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Notes payable, net | 3,400,000 | |||||||||||
Line of credit with maximum borrowing availability | 4,000,000 | |||||||||||
EBGL Loan Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit with maximum borrowing availability | $ 3,000,000 | $ 3,000,000 | ||||||||||
Notes payable | 2,900,000 | |||||||||||
Minimum debt service coverage ratio | 100.00% | 100.00% | ||||||||||
Audited financial statements delivery period | 120 days | 120 days | ||||||||||
Additional monthly cash available after final payment for acquisition | $ 100,000 | |||||||||||
KBS Builders, Inc. | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Minimum fixed leverage ratio | 700.00% | |||||||||||
Net annual post tax loss | $ 1,900,000 | |||||||||||
Gerber Finance Inc | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit with maximum borrowing availability | 4,000,000 | |||||||||||
Gerber Finance Inc | EBGL Acquisition | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal outstanding | 3,000,000 | |||||||||||
Unsecured Promissory Note | Promissory Note | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt principal amount | $ 900,000 | $ 500,000 | ||||||||||
LSV Co-Invest I Promissory Notes | Promissory Note | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Total long-term debt | 1,500,000 | |||||||||||
LSV Co-Invest I Promissory Note, Issued January 12, 2018 | Promissory Note | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Total long-term debt | $ 528,000 | $ 528,000 | ||||||||||
Debt interest rate | 10.00% | |||||||||||
Paid-in kind interest rate | 12.00% | |||||||||||
Lone Star Value Management, Unsecured Promissory Note, Issued December 17, 2018 | Promissory Note | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Total long-term debt | $ 300,000 | 300,000 | ||||||||||
Debt principal amount | $ 300,000 | $ 300,000 | ||||||||||
Debt interest rate | 10.00% | |||||||||||
Paid-in kind interest rate | 12.00% | |||||||||||
Digirad Unsecured Promissory Note, Issued December 12, 2018 | Promissory Note | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Total long-term debt | $ 275,000 | $ 275,000 | ||||||||||
Debt principal amount | $ 300,000 | $ 300,000 | ||||||||||
Debt interest rate | 10.00% | |||||||||||
Paid-in kind interest rate | 12.00% | |||||||||||
Premier Banks | Premier Loan Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit with maximum borrowing availability | $ 3,000,000 | |||||||||||
ATRM Holdings, Inc. | Digirad Corporation | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Consideration issue in business acquisition, number of shares issued per share of common stock owned | 0.4 | |||||||||||
Minimum | Digirad Unsecured Promissory Note, Issued December 12, 2018 | Promissory Note | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt interest rate | 10.00% | 10.00% | ||||||||||
Maximum | Digirad Unsecured Promissory Note, Issued December 12, 2018 | Promissory Note | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt interest rate | 12.00% | 12.00% |
RECENTLY ISSUED ACCOUNTING PR_3
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Accounting Policies [Abstract] | ||
Right of use asset | $ 604 | $ 700 |
Lease liabilities | $ 605 | $ 700 |
JOINT VENTURE (Details)
JOINT VENTURE (Details) - USD ($) $ in Thousands | Dec. 14, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Noncontrolling Interest [Line Items] | |||
Cash received from Joint Venture partner | $ 1,000 | $ 1,000 | $ 0 |
Star Procurement, LLC | |||
Noncontrolling Interest [Line Items] | |||
Joint venture ownership percentage | 50.00% |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Changes in Customer Deposits (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Change In Contract With Customer, Liability [Roll Forward] | |
Revenue recognized that was included in deposit at beginning of period | $ 184 |
Increase due to cash received, excluding amounts recognized as revenue during the period | (166) |
Ending balance | (166) |
Modular Home Manufacturing | |
Change In Contract With Customer, Liability [Roll Forward] | |
Revenue recognized that was included in deposit at beginning of period | 181 |
Increase due to cash received, excluding amounts recognized as revenue during the period | (133) |
Ending balance | (133) |
Structural Wall Panel Manufacturing | |
Change In Contract With Customer, Liability [Roll Forward] | |
Revenue recognized that was included in deposit at beginning of period | 4 |
Increase due to cash received, excluding amounts recognized as revenue during the period | (33) |
Ending balance | $ (33) |
CASH, CASH EQUIVALENTS AND RE_3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 87,000 | $ 187,000 | ||
Restricted cash | 556,000 | 501,000 | ||
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows | 643,000 | $ 688,000 | $ 643,000 | $ 530,000 |
Gerber Finance | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | 500,000 | |||
INTL FC Stone | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 86,100 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Fair Value of Financial Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Contingent earn-out receivable, current (based on Level 3 inputs): | $ 0 | $ 63 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Lumber derivative contracts (Level 1) | (14) | 5 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Contingent earn-out receivable, current (based on Level 3 inputs): | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Quantitative Information Level 3 Fair Value Assets and Liabilities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Contingent Earn-Out Receivable | Level 3 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Unobservable input projected revenue | $ 6.9 |
Measurement Input, Discount Rate | Fair Value, Measurements, Recurring | Minimum | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Contingent earn out receivable, measurement input | 0.0241 |
Measurement Input, Discount Rate | Fair Value, Measurements, Recurring | Maximum | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | |
Contingent earn out receivable, measurement input | 0.0264 |
DERIVATIVES - Additional Inform
DERIVATIVES - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2019USD ($)derivative_contractboard_foot | Mar. 31, 2018USD ($)derivative_contractboard_foot | |
Derivative [Line Items] | ||
Restricted cash on deposit | $ | $ 86,100 | $ 26,700 |
Net Long (Buying) | ||
Derivative [Line Items] | ||
Buying position | board_foot | 660,000 | 330,000 |
Number of lumber derivative contract | derivative_contract | 6 | 3 |
Short | ||
Derivative [Line Items] | ||
Buying position | board_foot | 660,000 | 330,000 |
Number of lumber derivative contract | derivative_contract | 6 | 3 |
Long | ||
Derivative [Line Items] | ||
Buying position | board_foot | 1,320,000 | |
Number of lumber derivative contract | derivative_contract | 12 | |
Other Current Assets | ||
Derivative [Line Items] | ||
Fair value of lumber contracts | $ | $ (14,100) | $ 55,200 |
Other Current Assets | Net Long (Buying) | ||
Derivative [Line Items] | ||
Fair value of lumber contracts | $ | $ 33,100 |
DERIVATIVES - Schedule of Deriv
DERIVATIVES - Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Realized gain (loss), net | $ 57 | $ 42 |
Unrealized (loss) gain, net | (21) | 62 |
Total | $ 36 | $ 104 |
ACCOUNTS RECEIVABLE, NET - Sche
ACCOUNTS RECEIVABLE, NET - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Contract billings | $ 2,966 | $ 3,094 |
Retainage | 0 | 308 |
Subtotal | 2,966 | 3,402 |
Less – allowance for doubtful accounts | (312) | (113) |
Accounts receivable, net | $ 2,654 | $ 3,289 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,048 | $ 1,438 |
Work-in-process | 331 | 352 |
Finished goods | 190 | 0 |
Inventories, net | $ 1,569 | $ 1,790 |
INTANGIBLE ASSETS, NET - Schedu
INTANGIBLE ASSETS, NET - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (1,296) | $ (1,217) |
Total | 801 | |
Gross Carrying Amount | 2,491 | 2,491 |
Net Carrying Value | 1,195 | 1,274 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carying amount | 2,097 | 2,097 |
Finite-lived intangible assets, accumulated amortization | (1,296) | (1,217) |
Total | 801 | 880 |
Tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Tradenames | $ 394 | $ 394 |
INTANGIBLE ASSETS, NET - Narrat
INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 79,000 | $ 79,000 |
INTANGIBLE ASSETS, NET - Sche_2
INTANGIBLE ASSETS, NET - Schedule of Estimated Amortization of Intangible Assets (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 (nine months) | $ 238 |
2020 | 316 |
2021 | 163 |
2022 | 84 |
2023 | 0 |
Thereafter | 0 |
Total | $ 801 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Right of use asset | $ 604 | $ 700 |
Lease liabilities | $ 605 | $ 700 |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease Cost | |
Operating lease cost | $ 68 |
Variable lease cost | 34 |
Total lease cost | 102 |
Other Information | |
Operating cash flows used for operating leases | $ 67 |
Operating Leases | |
Weighted average discount rate | 10.00% |
Weighted average remaining lease term (years) | 2 years 9 months |
LEASES - Schedule of Future Lea
LEASES - Schedule of Future Lease Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2019 (nine months) | $ 201 | |
2020 | 273 | |
2021 | 207 | |
2022 | 0 | |
2023 | 0 | |
Total lease payments | 681 | |
Less: imputed interest | 76 | |
Total operating liabilities | $ 605 | $ 700 |
OTHER ACCRUED LIABILITIES - Sch
OTHER ACCRUED LIABILITIES - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued taxes | $ 1,313 | $ 1,815 |
Accrued interest expense | 633 | 148 |
Accrued dividend payable | 448 | 449 |
Accrued sales rebates | 152 | 141 |
Accrued health insurance costs | 67 | 67 |
Accrued warranty | 58 | 56 |
Other | 25 | 21 |
Total other accrued liabilities | $ 2,696 | $ 2,697 |
OTHER ACCRUED LIABILITIES - S_2
OTHER ACCRUED LIABILITIES - Schedule of Changes in Accrued Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Accrual balance, beginning of period | $ 56 | $ 50 |
Accruals for warranties | 2 | 2 |
Accrual balance, end of period | $ 58 | $ 52 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Apr. 03, 2019 | Oct. 04, 2016 | Apr. 08, 2019 | Feb. 23, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 01, 2019 | Dec. 14, 2018 | Oct. 01, 2018 | Nov. 20, 2017 | Jun. 30, 2017 |
Line of Credit Facility [Line Items] | |||||||||||||
Notes payable | $ 6,311,000 | $ 6,513,000 | |||||||||||
Payment of overadvance | 5,668,000 | $ 9,117,000 | |||||||||||
Annual review delivery period | 105 days | 105 days | |||||||||||
Gerber Finance Inc | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit with maximum borrowing availability | 4,000,000 | ||||||||||||
KBS Loan Agreement | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Notes payable, net | 3,400,000 | ||||||||||||
Revolving line of credit | 4,000,000 | ||||||||||||
Line of credit with maximum borrowing availability | $ 4,000,000 | ||||||||||||
KBS Loan Agreement | Gerber Finance Inc | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Annual facilities fee percentage | 1.50% | ||||||||||||
Monthly collateral monitoring fee percentage | 0.10% | ||||||||||||
KBS Loan Agreement | Prime Rate | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt interest rate | 2.75% | ||||||||||||
EBGL Loan Agreement | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Notes payable | $ 2,900,000 | ||||||||||||
Revolving line of credit | $ 3,000,000 | ||||||||||||
Line of credit with maximum borrowing availability | $ 3,000,000 | $ 3,000,000 | |||||||||||
Automatic extension period | 1 year | ||||||||||||
Initial line of credit availability | $ 1,000,000 | ||||||||||||
Increase in EBGL Loan Agreement | 3,000,000 | ||||||||||||
Amount of line of credit increment | $ 500,000 | ||||||||||||
Minimum debt service coverage ratio | 100.00% | 100.00% | |||||||||||
Audited financial statements delivery period | 120 days | 120 days | |||||||||||
EBGL Loan Agreement | Prime Rate | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt interest rate | 1.50% | ||||||||||||
Basis spread on variable rate | 2.75% | ||||||||||||
KBS Loan Agreement, Maturing February 22, 2019 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Automatic extension period | 1 year | ||||||||||||
KBS Loan Agreement, Maturing February 22, 2020 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Automatic extension period | 1 year | ||||||||||||
Director | Payment Guarantee | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Guarantor obligation | $ 500,000 | ||||||||||||
Eight Amendment To Loan And Security Agreement | KBS Loan Agreement | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit with maximum borrowing availability | $ 600,000 | ||||||||||||
Debt instrument periodic payment | $ 75,000 | ||||||||||||
Subsequent Event | Director | Payment Guarantee | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Guarantor obligation | $ 600,000 | ||||||||||||
Subsequent Event | Eight Amendment To Loan And Security Agreement | KBS Loan Agreement | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Payment of overadvance | $ 600,000 | ||||||||||||
Promissory note payable to Gerber Finance | Subsequent Event | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt instrument periodic payment | $ 75,000 | ||||||||||||
Promissory Note | Digirad Unsecured Promissory Note, Issued December 12, 2018 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt interest rate | 10.00% | ||||||||||||
Debt principal amount | $ 300,000 | $ 300,000 | |||||||||||
Minimum | Promissory Note | Digirad Unsecured Promissory Note, Issued December 12, 2018 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt interest rate | 10.00% | 10.00% | |||||||||||
Maximum | Promissory Note | Digirad Unsecured Promissory Note, Issued December 12, 2018 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt interest rate | 12.00% | 12.00% |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 5,197 | $ 5,161 |
Current portion | (3,069) | (3,048) |
Noncurrent portion | 2,128 | 2,113 |
Promissory note payable to Gerber Finance | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 3,000 | 3,000 |
Pledge agreement amount, plus fees | 3,000 | |
KBS software installment payment agreement, unsecured, interest at 8.0% per annum, payable in monthly installments of $1,199 through September 2020 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 20 | 21 |
Debt interest rate | 8.00% | |
Debt instrument periodic payment | $ 1,199 | |
Revolving equipment credit line, unsecured | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 9 | 10 |
Prime Rate | Promissory note payable to Gerber Finance | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.00% | |
LSV Co-Invest I Promissory Note, Issued June 01, 2018 | Promissory Note | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 909 | 909 |
Debt interest rate | 10.00% | |
Paid-in kind interest rate | 12.00% | |
LSV Co-Invest I Promissory Note, Issued January 12, 2018 | Promissory Note | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 528 | 528 |
Debt interest rate | 10.00% | |
Paid-in kind interest rate | 12.00% | |
Lone Star Value Management, Unsecured Promissory Note, Issued December 17, 2018 | Promissory Note | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 300 | 300 |
Debt interest rate | 10.00% | |
Paid-in kind interest rate | 12.00% | |
Digirad Unsecured Promissory Note, Issued December 12, 2018 | Promissory Note | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 275 | 275 |
Debt interest rate | 10.00% | |
Paid-in kind interest rate | 12.00% | |
Vehicle Financing | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 76 | 79 |
Debt interest rate | 5.90% | |
EBGL Capital Lease Computer Equipment | Capital Lease Obligations | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 36 | 39 |
Debt interest rate | 9.00% | |
Debt instrument periodic payment | $ 1,105 | |
Equipment Financing | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 44 | $ 0 |
Debt interest rate | 10.00% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2019 | Jul. 01, 2019 | Apr. 01, 2019 | Feb. 22, 2019 | Dec. 31, 2018 | Nov. 20, 2017 | |
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 11,500,000 | |||||
Common stock, shares outstanding (in shares) | 2,466,219 | 2,466,219 | ||||
LSV Co-Invest I Promissory Note, Issued January 12, 2018 | Promissory Note | ||||||
Debt Instrument [Line Items] | ||||||
Debt interest rate | 10.00% | |||||
Paid-in kind interest rate | 12.00% | |||||
LSV Co-Invest I Promissory Note, Issued June 01, 2018 | Promissory Note | ||||||
Debt Instrument [Line Items] | ||||||
Debt interest rate | 10.00% | |||||
Paid-in kind interest rate | 12.00% | |||||
KBS Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit with maximum borrowing availability | $ 4,000,000 | |||||
KBS Loan Agreement | Ninth Amendment To Loan And Security Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit with maximum borrowing availability | $ 600,000 | |||||
Subsequent Event | ATRM Holdings, Inc. | LSV Co-Invest I | Series B Cumulative Preferred Stock | ||||||
Debt Instrument [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 374,562 | |||||
Subsequent Event | ATRM Holdings, Inc. | LSVI | Series B Cumulative Preferred Stock | ||||||
Debt Instrument [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 222,577 | |||||
Subsequent Event | Jeffrey E. Eberwein | ATRM Holdings, Inc. | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of outstanding shares | 17.40% | |||||
Payment Guarantee | Director | ||||||
Debt Instrument [Line Items] | ||||||
Guarantor obligation | $ 500,000 | |||||
Payment Guarantee | Subsequent Event | Director | ||||||
Debt Instrument [Line Items] | ||||||
Guarantor obligation | $ 600,000 | |||||
Gerber Finance Inc | EBGL Acquisition | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 3,000,000 |
STOCK INCENTIVE PLAN AND SHAR_2
STOCK INCENTIVE PLAN AND SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) | Dec. 12, 2018 | Dec. 18, 2017 | Mar. 31, 2019 | Mar. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5,000 | $ 20,000 | ||
2014 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 20,400 | |||
Directors And Chief Financial Officer | 2014 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards (in shares) | 10,000 | |||
Vesting period | 1 year | |||
Fair value of stock awards (in usd per share) | $ 1.18 | |||
Directors And Chief Financial Officer | 2014 Incentive Plan | Prior to January 1, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards (in shares) | 70,000 | |||
Directors, Chief Executive Officer and Chief Financial Officer | 2014 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards (in shares) | 10,000 | |||
Fair value of stock awards (in usd per share) | $ 0.20 | |||
Share-based compensation expense | 5,400 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 15,900 | |||
Directors, Chief Executive Officer and Chief Financial Officer | 2014 Incentive Plan | Prior to January 1, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards (in shares) | 70,000 | |||
Board of Director's Special Committee | 2014 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards (in shares) | 10,000 | |||
Board of Director's Special Committee | 2014 Incentive Plan | Prior to January 1, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards (in shares) | 40,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | Mar. 31, 2019USD ($) |
Income Tax Disclosure [Abstract] | |
Deferred tax liability | $ 10,000 |
OPERATING SEGMENTS - Narrative
OPERATING SEGMENTS - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019segments | |
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, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Segment net sales | $ 7,335 | $ 7,684 | |
Depreciation and amortization expense | 190 | 180 | |
Interest expense, net | 263 | 237 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment net sales | 7,335 | 7,684 | |
Depreciation and amortization expense | 190 | 180 | |
Interest expense, net | 201 | 224 | |
Segment net (loss) income | (410) | (565) | |
Total segment assets | 9,514 | 10,658 | $ 10,937 |
Expenditures for segment assets | 60 | 17 | |
Operating Segments | Modular Home Manufacturing | |||
Segment Reporting Information [Line Items] | |||
Segment net sales | 2,378 | 4,849 | |
Depreciation and amortization expense | 135 | 132 | |
Interest expense, net | 76 | 90 | |
Segment net (loss) income | (797) | (284) | |
Total segment assets | 5,166 | 7,095 | |
Expenditures for segment assets | 0 | 12 | |
Operating Segments | Structural Wall Panel Manufacturing | |||
Segment Reporting Information [Line Items] | |||
Segment net sales | 4,957 | 2,835 | |
Depreciation and amortization expense | 55 | 48 | |
Interest expense, net | 125 | 134 | |
Segment net (loss) income | 387 | (281) | |
Total segment assets | 4,348 | 3,563 | |
Expenditures for segment assets | $ 60 | $ 5 |
OPERATING SEGMENTS - Schedule_2
OPERATING SEGMENTS - Schedule of Reconciliation of Operating Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 7,335 | $ 7,684 | |
Interest expense | (263) | (237) | |
Change in fair value of contingent earn-outs, net | 0 | 2 | |
Provision for income taxes | 3 | 4 | |
Consolidated net loss | (781) | (1,010) | |
Total assets | 10,994 | $ 11,578 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 7,335 | 7,684 | |
Segment net (loss) income | (410) | (565) | |
Total assets for reportable segments | 9,514 | 10,658 | 10,937 |
Other assets | 1,480 | $ 641 | |
Segment Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Other corporate expenses | (306) | (430) | |
Interest expense | (62) | (13) | |
Change in fair value of contingent earn-outs, net | 0 | 2 | |
Provision for income taxes | $ (3) | $ (4) |
OPERATING SEGMENTS - Schedule_3
OPERATING SEGMENTS - Schedule of Other Operating Segment Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | $ 190 | $ 180 |
Interest expense, net | 263 | 237 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | 190 | 180 |
Interest expense, net | 201 | 224 |
Adjustments | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | 0 | 0 |
Interest expense, net | $ 62 | $ 13 |
SUBSEQUENT EVENTS - Merger with
SUBSEQUENT EVENTS - Merger with Digirad Corporation (Details) | Sep. 10, 2018 | Jul. 01, 2019USD ($)shares | Mar. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 17, 2018USD ($) |
Subsequent Event [Line Items] | |||||
Common stock, shares outstanding (in shares) | shares | 2,466,219 | 2,466,219 | |||
Total long-term debt | $ 5,197,000 | $ 5,161,000 | |||
ATRM Holdings, Inc. | Jeffrey E. Eberwein | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Percentage of outstanding shares | 17.40% | ||||
Digirad Corporation | Jeffrey E. Eberwein | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Percentage of outstanding shares | 4.30% | ||||
Common stock, shares outstanding (in shares) | shares | 869,152 | ||||
LSVI | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Pledge as collateral | $ 3,000,000 | ||||
Series B Cumulative Preferred Stock | LSVI | ATRM Holdings, Inc. | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Common stock, shares outstanding (in shares) | shares | 222,577 | ||||
Series B Cumulative Preferred Stock | LSV Co-Invest I | ATRM Holdings, Inc. | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Common stock, shares outstanding (in shares) | shares | 374,562 | ||||
LSV Co-Invest I Promissory Notes | Promissory Note | |||||
Subsequent Event [Line Items] | |||||
Total long-term debt | 1,500,000 | ||||
LSV Co-Invest I Promissory Notes | Promissory Note | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Total long-term debt | $ 1,400,000 | ||||
Lone Star Value Management, Unsecured Promissory Note, Issued December 17, 2018 | Promissory Note | |||||
Subsequent Event [Line Items] | |||||
Total long-term debt | 300,000 | $ 300,000 | |||
Debt principal amount | $ 300,000 | $ 300,000 | |||
Lone Star Value Management, Unsecured Promissory Note, Issued December 17, 2018 | Promissory Note | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Debt principal amount | $ 300,000 | ||||
ATRM Holdings, Inc. | Digirad Corporation | |||||
Subsequent Event [Line Items] | |||||
Consideration issue in business acquisition, number of shares issued per share of common stock owned | 0.4 |
SUBSEQUENT EVENTS - Amendments
SUBSEQUENT EVENTS - Amendments to Gerber Finance Loan Agreements (Details) - USD ($) | Apr. 01, 2019 | Mar. 31, 2019 | Feb. 22, 2019 | Nov. 20, 2017 |
KBS Loan Agreement | ||||
Subsequent Event [Line Items] | ||||
Line of credit with maximum borrowing availability | $ 4,000,000 | |||
Payment Guarantee | Director | ||||
Subsequent Event [Line Items] | ||||
Guarantor obligation | $ 500,000 | |||
Payment Guarantee | Director | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Guarantor obligation | $ 600,000 | |||
Ninth Amendment To Loan And Security Agreement | KBS Loan Agreement | ||||
Subsequent Event [Line Items] | ||||
Line of credit with maximum borrowing availability | $ 600,000 |
SUBSEQUENT EVENTS - Acquisition
SUBSEQUENT EVENTS - Acquisition of Lone Star Value Management (Details) - USD ($) | Apr. 01, 2019 | Jul. 01, 2019 | Mar. 31, 2019 | Dec. 17, 2018 |
LSVM | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Purchase price of LSVM Purchase Agreement | $ 100 | |||
Lone Star Value Management, Unsecured Promissory Note, Issued December 17, 2018 | Promissory Note | ||||
Subsequent Event [Line Items] | ||||
Debt principal amount | $ 300,000 | $ 300,000 | ||
Lone Star Value Management, Unsecured Promissory Note, Issued December 17, 2018 | Promissory Note | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Debt principal amount | $ 300,000 |
SUBSEQUENT EVENTS - Sale of Mai
SUBSEQUENT EVENTS - Sale of Maine Facilities (Details) - Subsequent Event $ in Millions | Apr. 03, 2019USD ($) |
947 Waterford Road, LLC | |
Subsequent Event [Line Items] | |
Purchase price of sale leaseback | $ 1 |
Initial term of sale leaseback | 120 months |
300 Park Street, LLC | |
Subsequent Event [Line Items] | |
Purchase price of sale leaseback | $ 2.9 |
Initial term of sale leaseback | 120 months |
Oxford Lease | |
Subsequent Event [Line Items] | |
Initial term of sale leaseback | 120 months |
Minimum | 947 Waterford Road, LLC | |
Subsequent Event [Line Items] | |
Base rental payments of sale leaseback | $ 1.2 |
Minimum | 300 Park Street, LLC | |
Subsequent Event [Line Items] | |
Base rental payments of sale leaseback | 3.3 |
Minimum | Oxford Lease | |
Subsequent Event [Line Items] | |
Base rental payments of sale leaseback | 1.4 |
Maximum | 947 Waterford Road, LLC | |
Subsequent Event [Line Items] | |
Base rental payments of sale leaseback | 1.3 |
Maximum | 300 Park Street, LLC | |
Subsequent Event [Line Items] | |
Base rental payments of sale leaseback | 3.6 |
Maximum | Oxford Lease | |
Subsequent Event [Line Items] | |
Base rental payments of sale leaseback | $ 1.6 |
Uncategorized Items - atrm-2019
Label | Element | Value |
Structural Wall Panel Manufacturing [Member] | ||
Contract with Customer, Liability, Current | us-gaap_ContractWithCustomerLiabilityCurrent | $ (4,000) |
Modular Home Manufacturing [Member] | ||
Contract with Customer, Liability, Current | us-gaap_ContractWithCustomerLiabilityCurrent | $ (181,000) |