Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Aug. 31, 2018 | Sep. 30, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | SMIT | |
Entity Registrant Name | SCHMITT INDUSTRIES INC | |
Entity Central Index Key | 922,612 | |
Current Fiscal Year End Date | --05-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 3,994,545 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Aug. 31, 2018 | May 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 1,742,786 | $ 2,053,181 |
Restricted cash | 58,040 | 58,352 |
Accounts receivable, net | 1,871,737 | 2,047,032 |
Inventories | 6,134,627 | 5,710,888 |
Prepaid expenses | 119,883 | 148,924 |
Total current assets | 9,927,073 | 10,018,377 |
Property and equipment, net | 754,989 | 770,915 |
Other assets | ||
Intangible assets, net | 470,622 | 496,768 |
TOTAL ASSETS | 11,152,684 | 11,286,060 |
Current liabilities | ||
Accounts payable | 1,008,211 | 1,024,256 |
Accrued commissions | 219,005 | 194,797 |
Accrued payroll liabilities | 167,050 | 188,568 |
Other accrued liabilities | 364,868 | 358,790 |
Income taxes payable | 4,472 | 3,993 |
Total current liabilities | 1,763,606 | 1,770,404 |
Stockholders' equity | ||
Common stock, no par value, 20,000,000 shares authorized, 3,994,545 shares issued and outstanding at August 31, 2018 and May 31, 2018 | 13,091,249 | 13,085,652 |
Accumulated other comprehensive loss | (456,663) | (536,307) |
Accumulated deficit | (3,245,508) | (3,033,689) |
Total stockholders' equity | 9,389,078 | 9,515,656 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 11,152,684 | $ 11,286,060 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Aug. 31, 2018 | May 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | ||
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 3,994,545 | 3,994,545 |
Common stock, shares outstanding | 3,994,545 | 3,994,545 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 3,440,453 | $ 3,083,648 |
Cost of sales | 2,100,655 | 1,684,129 |
Gross profit | 1,339,798 | 1,399,519 |
Operating expenses: | ||
General, administration and sales | 1,405,363 | 1,468,344 |
Research and development | 48,237 | 76,457 |
Total operating expenses | 1,453,600 | 1,544,801 |
Operating loss | (113,802) | (145,282) |
Other income (expense), net | (91,651) | 17,543 |
Loss before income taxes | (205,453) | (127,739) |
Provision for income taxes | 6,366 | 6,359 |
Net loss | $ (211,819) | $ (134,098) |
Net loss per common share: | ||
Basic | $ (0.05) | $ (0.04) |
Weighted average number of common shares, basic | 3,994,545 | 2,995,910 |
Diluted | $ (0.05) | $ (0.04) |
Weighted average number of common shares, diluted | 3,994,545 | 2,995,910 |
Comprehensive loss | ||
Net loss | $ (211,819) | $ (134,098) |
Foreign currency translation adjustment | 79,644 | (14,724) |
Total comprehensive loss | $ (132,175) | $ (148,822) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Cash flows relating to operating activities | ||
Net loss | $ (211,819) | $ (134,098) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 47,217 | 52,750 |
Stock based compensation | 5,597 | 21,367 |
(Increase) decrease in: | ||
Accounts receivable | 164,312 | 258,280 |
Inventories | (434,075) | (339,884) |
Prepaid expenses | 28,447 | (14,150) |
Income taxes receivable | 0 | 4,228 |
Increase (decrease) in: | ||
Accounts payable | (14,346) | (45,308) |
Accrued liabilities and customer deposits | 11,722 | (118,566) |
Income taxes payable | 479 | 0 |
Net cash used in operating activities | (402,466) | (315,381) |
Cash flows relating to investing activities | ||
Purchases of property and equipment | (5,250) | (7,578) |
Net cash used in investing activities | (5,250) | (7,578) |
Effect of foreign exchange translation on cash | 97,009 | (15,285) |
Decrease in cash, cash equivalents and restricted cash | (310,707) | (338,244) |
Cash, cash equivalents and restricted cash, beginning of period | 2,111,533 | 867,607 |
Cash, cash equivalents and restricted cash, end of period | 1,800,826 | 529,363 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for income taxes | 5,887 | 2,131 |
Cash paid during the period for interest | $ 263 | $ 413 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - 3 months ended Aug. 31, 2018 - USD ($) | Total | Common Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Beginning balance at May. 31, 2018 | $ 9,515,656 | $ 13,085,652 | $ (536,307) | $ (3,033,689) |
Beginning balance, shares at May. 31, 2018 | 3,994,545 | 3,994,545 | ||
Stock-based compensation | $ 5,597 | $ 5,597 | 0 | 0 |
Net loss | (211,819) | 0 | 0 | (211,819) |
Other comprehensive loss | 79,644 | 0 | 79,644 | 0 |
Ending balance at Aug. 31, 2018 | $ 9,389,078 | $ 13,091,249 | $ (456,663) | $ (3,245,508) |
Ending balance, shares at Aug. 31, 2018 | 3,994,545 | 3,994,545 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Aug. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial information included herein has been prepared by Schmitt Industries, Inc. (the Company or Schmitt) and its wholly owned subsidiaries. In the opinion of management, the accompanying unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly its financial position as of August 31, 2018 and its results of operations and its cash flows for the periods presented. The consolidated balance sheet at May 31, 2018 has been derived from the Annual Report on Form 10-K 10-K Revenue Recognition On June 1, 2018, the Company adopted Accounting Standards Update (ASU) No. 2014-09, The Company determines the amount of revenue it recognizes associated with the transfer of each product or service using the five-step model provided by Topic 606. For sales of products or delivery of monitoring services to all customers, including manufacturing representatives, distributors or their third-party customers, each transaction is evaluated to determine whether there is approval and commitment from both the Company and the customer for the transaction; whether the rights of each party are specifically identified; whether the transaction has commercial substance; whether collectability from the customer is probable at the inception of the contract and whether the transaction amount is defined. If a transaction to sell products or provide monitoring services meets all of the above criteria, revenue is recognized for the sales of product at the time of shipment or for monitoring services at the completion of the month in which monitoring services are provided. The Company incurs commissions associated with the sales of products, which are accrued and expensed at the time the product is shipped. These amounts are recorded within general, administration and sales expense. The Company also incurs costs related to shipping and handling of its products, the costs of which are expensed as incurred as a component of cost of sales. Shipping and handling fees billed to customers are recognized at the time of shipment as a component of net sales. Financial Instruments The carrying value of all other financial instruments potentially subject to valuation risk (principally consisting of cash and cash equivalents, accounts receivable and accounts payable) also approximates fair value because of their short-term maturities. Restricted Cash Restricted cash consists of an amount received from a customer in December 2017 as part of an on-going The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported within the Consolidated Balance Sheets as of August 31, 2018 and May 31, 2018 to the sum of the same such amounts as shown in the Consolidated Statement of Cash Flows for the three months ended August 31, 2018: August 31, 2018 May 31, 2018 Cash and cash equivalents $ 1,742,786 $ 2,053,181 Restricted cash 58,040 58,352 Total cash, cash equivalents, and restricted cash shown $ 1,800,826 $ 2,111,533 Accounts Receivable The Company maintains credit limits for all customers based upon several factors, including but not limited to financial condition and stability, payment history, published credit reports and use of credit references. Management performs various analyses to evaluate accounts receivable balances to ensure recorded amounts reflect estimated net realizable value. This review includes using accounts receivable agings, other operating trends and relevant business conditions, including general economic factors, as they relate to each of the Company’s domestic and international customers. If these analyses lead management to the conclusion that potential significant accounts are uncollectible, a reserve is provided. The allowance for doubtful accounts was $94,756 and $95,207 as of August 31, 2018 and May 31, 2018, respectively. Inventories Inventories are valued at the lower of cost or net realizable value with cost determined on the average cost basis. Costs included in inventories consist of materials, labor and manufacturing overhead, which are related to the purchase or production of inventories. Write-downs, when required, are made to reduce excess inventories to their net realizable values. Such estimates are based on assumptions regarding future demand and market conditions. If actual conditions become less favorable than the assumptions used, an additional inventory write-down may be required. As of August 31, 2018 and May 31, 2018, inventories consisted of: August 31, 2018 May 31, 2018 Raw materials $ 2,806,360 $ 2,796,691 Work-in-process 1,294,974 1,009,424 Finished goods 2,033,293 1,904,773 $ 6,134,627 $ 5,710,888 Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years for furniture, fixtures and equipment; three years for vehicles; and twenty-five years for buildings and improvements. As of August 31, 2018 and May 31, 2018, property and equipment consisted of: August 31, 2018 May 31, 2018 Land $ 299,000 $ 299,000 Buildings and improvements 1,814,524 1,814,524 Furniture, fixtures and equipment 1,257,518 1,252,598 Vehicles 44,704 44,704 3,415,746 3,410,826 Less accumulated depreciation (2,660,757 ) (2,639,911 ) $ 754,989 $ 770,915 Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, The Company is currently evaluating the impact of this guidance, including reviewing the standard’s provisions and gathering and analyzing data to support further evaluation of all real estate and non-real |
Stock Options and Stock-Based C
Stock Options and Stock-Based Compensation | 3 Months Ended |
Aug. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Stock-Based Compensation | NOTE 2: STOCK OPTIONS AND STOCK-BASED COMPENSATION Stock-based compensation includes expense charges for all stock-based awards to employees and directors granted under the Company’s stock option plan. Stock-based compensation recognized during the period is based on the portion of the grant date fair value of the stock-based award that will vest during the period, adjusted for expected forfeitures. Compensation cost for all stock-based awards is recognized using the straight-line method. The Company uses the Black-Scholes option pricing model as its method of valuation for stock-based awards. The Black-Scholes option pricing model requires the input of highly subjective assumptions, and other reasonable assumptions could provide differing results. These variables include, but are not limited to: • Risk-Free Interest Rate. • Expected Life. pre-vesting • Expected Volatility. • Expected Dividend Yield. • Expected Forfeitures. pre-vesting To determine stock-based compensation expense recognized for those options granted during the three months ended August 31, 2018, the Company has computed the value of all stock options granted using the Black-Scholes option pricing model as prescribed by ASC Topic 718 using the following assumptions: Three Months Ended Risk-free interest rate 3.1% Expected life 6.0 years Expected volatility 46.3% At August 31, 2018, the Company had a total of 329,999 outstanding stock options (279,164 vested and exercisable and 50,835 non-vested) Outstanding Options Exercisable Options Number of Shares Weighted Average Weighted Average Life (yrs) Number of Shares Weighted Average 167,499 $1.70 8.5 131,664 $1.70 30,000 2.49 7.4 15,000 2.53 77,500 2.85 5.6 77,500 2.85 55,000 3.65 2.8 55,000 3.65 329,999 2.37 6.7 279,164 2.45 Options granted, exercised, and forfeited or canceled under the Company’s stock option plan during the three months ended August 31, 2018 are summarized as follows: Three Months Ended Number of Weighted Options outstanding - beginning of period 318,332 $ 2.36 Options granted 15,000 2.45 Options exercised 0 0 Options forfeited/canceled (3,333 ) 1.70 Options outstanding - end of period 329,999 2.37 |
EPS Reconciliation
EPS Reconciliation | 3 Months Ended |
Aug. 31, 2018 | |
Earnings Per Share [Abstract] | |
EPS Reconciliation | NOTE 3: EPS RECONCILIATION Three Months Ended 2018 2017 Weighted average shares (basic) 3,994,545 2,995,910 Effect of dilutive stock options 0 0 Weighted average shares (diluted) 3,994,545 2,995,910 Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding, adjusted for dilutive incremental shares attributed to outstanding options to purchase common stock. Common stock equivalents for stock options are computed using the treasury stock method. In periods in which a net loss is incurred, no common stock equivalents are included since they are antidilutive and as such all stock options outstanding are excluded from the computation of diluted net loss in those periods. |
Income Taxes
Income Taxes | 3 Months Ended |
Aug. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 4: INCOME TAXES The Company accounts for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management continues to review the level of the valuation allowance on a quarterly basis. There can be no assurance that the Company’s future operations will produce sufficient earnings to allow for the deferred tax asset to be fully utilized. The Company currently maintains a full valuation allowance against net deferred tax assets. Each year the Company files income tax returns in the various national, state and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the taxing authorities. Positions challenged by the taxing authorities may be settled or appealed by the Company. As a result, there is an uncertainty in income taxes recognized in the Company’s financial statements in accordance with ASC Topic 740. The Company applies this guidance by defining criteria that an individual income tax position must meet for any part of the benefit of that position to be recognized in an enterprise’s financial statements and provides guidance on measurement, de-recognition, Other long-term liabilities related to tax contingencies were $0 as of both August 31, 2018 and May 31, 2018. Interest and penalties associated with uncertain tax positions are recognized as components of the “Provision for income taxes.” The liability for payment of interest and penalties was $0 as of August 31, 2018 and May 31, 2018. Several tax years are subject to examination by major tax jurisdictions. In the United States, federal tax years ended May 31, 2015 and after are subject to examination. In the United Kingdom, tax years ended May 31, 2013 and after are subject to examination. Effective Tax Rate The effective tax rate on consolidated net loss was 3.1% for the three months ended August 31, 2018. The effective tax rate on consolidated net loss differs from the federal statutory tax rate primarily due to changes in the deferred tax valuation allowance and certain expenses not being deductible for income tax reporting purposes. Management believes the effective tax rate for Fiscal 2019 will be approximately 44.9% due to the items noted above. |
Segment of Business
Segment of Business | 3 Months Ended |
Aug. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment of Business | NOTE 5: SEGMENTS OF BUSINESS The Company has two reportable business segments: dynamic balancing and process control systems for the machine tool industry (Balancer) and laser-based test and measurement systems and ultrasonic measurement products (Measurement). The Company operates in three principal geographic markets: North America, Europe and Asia. Segment Information Three Months Ended August 31, 2018 2017 Balancer Measurement Balancer Measurement Gross sales $ 2,591,304 $ 1,246,121 $ 2,445,486 $ 1,013,251 Intercompany sales (396,972 ) 0 (375,089 ) 0 Net sales $ 2,194,332 $ 1,246,121 $ 2,070,397 $ 1,013,251 Operating income (loss) $ (262,501 ) $ 148,699 $ (211,780 ) $ 66,498 Depreciation expense $ 12,072 $ 8,999 $ 16,982 $ 9,622 Amortization expense $ 0 $ 26,146 $ 0 $ 26,146 Capital expenditures $ 5,250 $ 0 $ 7,578 $ 0 Geographic Information – Net Sales by Geographic Area Three Months Ended August 31, 2018 2017 North America $ 2,200,201 $ 1,791,101 Europe 373,463 517,863 Asia 824,776 749,422 Other markets 42,013 25,262 Total net sales $ 3,440,453 $ 3,083,648 Three Months Ended August 31, 2018 2017 United States Europe United States Europe Operating income (loss) $ (131,190 ) $ 17,388 $ (215,465 ) $ 70,183 Depreciation expense $ 21,071 $ 0 $ 26,604 $ 0 Amortization expense $ 26,146 $ 0 $ 26,146 $ 0 Capital expenditures $ 5,250 $ 0 $ 7,578 $ 0 Note — Europe is defined as the European subsidiary, Schmitt Europe Ltd. Segment and Geographic Assets August 31, 2018 May 31, 2018 Segment assets to total assets Balancer $ 6,433,148 $ 6,461,974 Measurement 2,918,710 2,712,553 Corporate assets 1,800,826 2,111,533 Total assets $ 11,152,684 $ 11,286,060 Geographic assets to long-lived assets United States $ 754,989 $ 770,915 Europe 0 0 Total long-lived assets $ 754,989 $ 770,915 Geographic assets to total assets United States $ 10,070,342 $ 10,110,683 Europe 1,082,342 1,175,377 Total assets $ 11,152,684 $ 11,286,060 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Aug. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial information included herein has been prepared by Schmitt Industries, Inc. (the Company or Schmitt) and its wholly owned subsidiaries. In the opinion of management, the accompanying unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly its financial position as of August 31, 2018 and its results of operations and its cash flows for the periods presented. The consolidated balance sheet at May 31, 2018 has been derived from the Annual Report on Form 10-K 10-K |
Revenue Recognition | Revenue Recognition On June 1, 2018, the Company adopted Accounting Standards Update (ASU) No. 2014-09, The Company determines the amount of revenue it recognizes associated with the transfer of each product or service using the five-step model provided by Topic 606. For sales of products or delivery of monitoring services to all customers, including manufacturing representatives, distributors or their third-party customers, each transaction is evaluated to determine whether there is approval and commitment from both the Company and the customer for the transaction; whether the rights of each party are specifically identified; whether the transaction has commercial substance; whether collectability from the customer is probable at the inception of the contract and whether the transaction amount is defined. If a transaction to sell products or provide monitoring services meets all of the above criteria, revenue is recognized for the sales of product at the time of shipment or for monitoring services at the completion of the month in which monitoring services are provided. The Company incurs commissions associated with the sales of products, which are accrued and expensed at the time the product is shipped. These amounts are recorded within general, administration and sales expense. The Company also incurs costs related to shipping and handling of its products, the costs of which are expensed as incurred as a component of cost of sales. Shipping and handling fees billed to customers are recognized at the time of shipment as a component of net sales. |
Financial Instruments | Financial Instruments The carrying value of all other financial instruments potentially subject to valuation risk (principally consisting of cash and cash equivalents, accounts receivable and accounts payable) also approximates fair value because of their short-term maturities. |
Restricted Cash | Restricted Cash Restricted cash consists of an amount received from a customer in December 2017 as part of an on-going The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported within the Consolidated Balance Sheets as of August 31, 2018 and May 31, 2018 to the sum of the same such amounts as shown in the Consolidated Statement of Cash Flows for the three months ended August 31, 2018: August 31, 2018 May 31, 2018 Cash and cash equivalents $ 1,742,786 $ 2,053,181 Restricted cash 58,040 58,352 Total cash, cash equivalents, and restricted cash shown $ 1,800,826 $ 2,111,533 |
Accounts Receivable | Accounts Receivable The Company maintains credit limits for all customers based upon several factors, including but not limited to financial condition and stability, payment history, published credit reports and use of credit references. Management performs various analyses to evaluate accounts receivable balances to ensure recorded amounts reflect estimated net realizable value. This review includes using accounts receivable agings, other operating trends and relevant business conditions, including general economic factors, as they relate to each of the Company’s domestic and international customers. If these analyses lead management to the conclusion that potential significant accounts are uncollectible, a reserve is provided. The allowance for doubtful accounts was $94,756 and $95,207 as of August 31, 2018 and May 31, 2018, respectively. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value with cost determined on the average cost basis. Costs included in inventories consist of materials, labor and manufacturing overhead, which are related to the purchase or production of inventories. Write-downs, when required, are made to reduce excess inventories to their net realizable values. Such estimates are based on assumptions regarding future demand and market conditions. If actual conditions become less favorable than the assumptions used, an additional inventory write-down may be required. As of August 31, 2018 and May 31, 2018, inventories consisted of: August 31, 2018 May 31, 2018 Raw materials $ 2,806,360 $ 2,796,691 Work-in-process 1,294,974 1,009,424 Finished goods 2,033,293 1,904,773 $ 6,134,627 $ 5,710,888 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years for furniture, fixtures and equipment; three years for vehicles; and twenty-five years for buildings and improvements. As of August 31, 2018 and May 31, 2018, property and equipment consisted of: August 31, 2018 May 31, 2018 Land $ 299,000 $ 299,000 Buildings and improvements 1,814,524 1,814,524 Furniture, fixtures and equipment 1,257,518 1,252,598 Vehicles 44,704 44,704 3,415,746 3,410,826 Less accumulated depreciation (2,660,757 ) (2,639,911 ) $ 754,989 $ 770,915 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, The Company is currently evaluating the impact of this guidance, including reviewing the standard’s provisions and gathering and analyzing data to support further evaluation of all real estate and non-real |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Aug. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported within the Consolidated Balance Sheets as of August 31, 2018 and May 31, 2018 to the sum of the same such amounts as shown in the Consolidated Statement of Cash Flows for the three months ended August 31, 2018: August 31, 2018 May 31, 2018 Cash and cash equivalents $ 1,742,786 $ 2,053,181 Restricted cash 58,040 58,352 Total cash, cash equivalents, and restricted cash shown $ 1,800,826 $ 2,111,533 |
Inventories | As of August 31, 2018 and May 31, 2018, inventories consisted of: August 31, 2018 May 31, 2018 Raw materials $ 2,806,360 $ 2,796,691 Work-in-process 1,294,974 1,009,424 Finished goods 2,033,293 1,904,773 $ 6,134,627 $ 5,710,888 |
Summary of Property and Equipment | As of August 31, 2018 and May 31, 2018, property and equipment consisted of: August 31, 2018 May 31, 2018 Land $ 299,000 $ 299,000 Buildings and improvements 1,814,524 1,814,524 Furniture, fixtures and equipment 1,257,518 1,252,598 Vehicles 44,704 44,704 3,415,746 3,410,826 Less accumulated depreciation (2,660,757 ) (2,639,911 ) $ 754,989 $ 770,915 |
Stock Options and Stock-Based_2
Stock Options and Stock-Based Compensation (Tables) | 3 Months Ended |
Aug. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Fair Value of Options | To determine stock-based compensation expense recognized for those options granted during the three months ended August 31, 2018, the Company has computed the value of all stock options granted using the Black-Scholes option pricing model as prescribed by ASC Topic 718 using the following assumptions: Three Months Ended Risk-free interest rate 3.1% Expected life 6.0 years Expected volatility 46.3% |
Schedule of Outstanding Stock Options | The Company estimates that $23,916 will be recorded as additional stock-based compensation expense over a weighted-average period of 1.5 years for all options that were outstanding as of August 31, 2018, but which were not yet vested. Outstanding Options Exercisable Options Number of Shares Weighted Average Weighted Average Life (yrs) Number of Shares Weighted Average 167,499 $1.70 8.5 131,664 $1.70 30,000 2.49 7.4 15,000 2.53 77,500 2.85 5.6 77,500 2.85 55,000 3.65 2.8 55,000 3.65 329,999 2.37 6.7 279,164 2.45 |
Schedule of Options Granted, Exercised, and Forfeited or Canceled | Options granted, exercised, and forfeited or canceled under the Company’s stock option plan during the three months ended August 31, 2018 are summarized as follows: Three Months Ended Number of Weighted Options outstanding - beginning of period 318,332 $ 2.36 Options granted 15,000 2.45 Options exercised 0 0 Options forfeited/canceled (3,333 ) 1.70 Options outstanding - end of period 329,999 2.37 |
EPS Reconciliation (Tables)
EPS Reconciliation (Tables) | 3 Months Ended |
Aug. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Three Months Ended 2018 2017 Weighted average shares (basic) 3,994,545 2,995,910 Effect of dilutive stock options 0 0 Weighted average shares (diluted) 3,994,545 2,995,910 |
Segment of Business (Tables)
Segment of Business (Tables) | 3 Months Ended |
Aug. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Three Months Ended August 31, 2018 2017 Balancer Measurement Balancer Measurement Gross sales $ 2,591,304 $ 1,246,121 $ 2,445,486 $ 1,013,251 Intercompany sales (396,972 ) 0 (375,089 ) 0 Net sales $ 2,194,332 $ 1,246,121 $ 2,070,397 $ 1,013,251 Operating income (loss) $ (262,501 ) $ 148,699 $ (211,780 ) $ 66,498 Depreciation expense $ 12,072 $ 8,999 $ 16,982 $ 9,622 Amortization expense $ 0 $ 26,146 $ 0 $ 26,146 Capital expenditures $ 5,250 $ 0 $ 7,578 $ 0 |
Geographic Information | Geographic Information – Net Sales by Geographic Area Three Months Ended August 31, 2018 2017 North America $ 2,200,201 $ 1,791,101 Europe 373,463 517,863 Asia 824,776 749,422 Other markets 42,013 25,262 Total net sales $ 3,440,453 $ 3,083,648 |
Segment Information of Operating Income (Loss) and Expenditure by Geographic Areas | Three Months Ended August 31, 2018 2017 United States Europe United States Europe Operating income (loss) $ (131,190 ) $ 17,388 $ (215,465 ) $ 70,183 Depreciation expense $ 21,071 $ 0 $ 26,604 $ 0 Amortization expense $ 26,146 $ 0 $ 26,146 $ 0 Capital expenditures $ 5,250 $ 0 $ 7,578 $ 0 |
Segment and Geographic Assets | Segment and Geographic Assets August 31, 2018 May 31, 2018 Segment assets to total assets Balancer $ 6,433,148 $ 6,461,974 Measurement 2,918,710 2,712,553 Corporate assets 1,800,826 2,111,533 Total assets $ 11,152,684 $ 11,286,060 Geographic assets to long-lived assets United States $ 754,989 $ 770,915 Europe 0 0 Total long-lived assets $ 754,989 $ 770,915 Geographic assets to total assets United States $ 10,070,342 $ 10,110,683 Europe 1,082,342 1,175,377 Total assets $ 11,152,684 $ 11,286,060 |
Significant Accounting Policies
Significant Accounting Policies - Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) | Aug. 31, 2018 | May 31, 2018 | Aug. 31, 2017 | May 31, 2017 |
Restricted Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 1,742,786 | $ 2,053,181 | ||
Restricted cash | 58,040 | 58,352 | ||
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows | $ 1,800,826 | $ 2,111,533 | $ 529,363 | $ 867,607 |
Significant Accounting Polici_2
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Aug. 31, 2018 | May 31, 2018 | |
Significant Accounting Policies [Line Items] | ||
Allowance for doubtful accounts | $ 94,756 | $ 95,207 |
Vehicles [Member] | ||
Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 3 years | |
Building and Improvements [Member] | ||
Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 25 years | |
Minimum [Member] | Furniture, Fixtures and Equipment [Member] | ||
Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 3 years | |
Maximum [Member] | Furniture, Fixtures and Equipment [Member] | ||
Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 7 years |
Significant Accounting Polici_3
Significant Accounting Policies - Schedule of Inventories (Detail) - USD ($) | Aug. 31, 2018 | May 31, 2018 |
Inventory, Net [Abstract] | ||
Raw materials | $ 2,806,360 | $ 2,796,691 |
Work-in-process | 1,294,974 | 1,009,424 |
Finished goods | 2,033,293 | 1,904,773 |
Inventories | $ 6,134,627 | $ 5,710,888 |
Significant Accounting Polici_4
Significant Accounting Policies - Summary of Property and Equipment (Detail) - USD ($) | Aug. 31, 2018 | May 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,415,746 | $ 3,410,826 |
Less accumulated depreciation | (2,660,757) | (2,639,911) |
Property, plant and equipment, net | 754,989 | 770,915 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 299,000 | 299,000 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,814,524 | 1,814,524 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,257,518 | 1,252,598 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 44,704 | $ 44,704 |
Stock Options and Stock Based C
Stock Options and Stock Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Aug. 31, 2018 | May 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected dividend rate | 0.00% | |
Outstanding stock options, total | 329,999 | 318,332 |
Vested and exercisable stock options | 279,164 | |
Non-vested shares | 50,835 | |
Weighted average exercise price | $ 2.37 | $ 2.36 |
Additional stock-based compensation expense | $ 23,916 | |
Weighted average period over which unrecognized compensation is expected to be recognized | 1 year 6 months |
Stock Options and Stock Based_2
Stock Options and Stock Based Compensation - Schedule of Fair Value of Options (Detail) | 3 Months Ended |
Aug. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Risk-free interest rate | 3.10% |
Expected life | 6 years |
Expected volatility | 46.30% |
Stock Options and Stock Based_3
Stock Options and Stock Based Compensation - Schedule of Outstanding Stock Options (Detail) - $ / shares | 3 Months Ended | |
Aug. 31, 2018 | May 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 329,999 | 318,332 |
Weighted Average Exercise Price, Outstanding Options | $ 2.37 | $ 2.36 |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 6 years 8 months 12 days | |
Exercisable Options, Number of Shares | 279,164 | |
Exercisable Options, Weighted Average Exercise Price | $ 2.45 | |
Options 1 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 167,499 | |
Weighted Average Exercise Price, Outstanding Options | $ 1.70 | |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 8 years 6 months | |
Exercisable Options, Number of Shares | 131,664 | |
Exercisable Options, Weighted Average Exercise Price | $ 1.70 | |
Options 2 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 30,000 | |
Weighted Average Exercise Price, Outstanding Options | $ 2.49 | |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 7 years 4 months 24 days | |
Exercisable Options, Number of Shares | 15,000 | |
Exercisable Options, Weighted Average Exercise Price | $ 2.53 | |
Options 3 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 77,500 | |
Weighted Average Exercise Price, Outstanding Options | $ 2.85 | |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 5 years 7 months 6 days | |
Exercisable Options, Number of Shares | 77,500 | |
Exercisable Options, Weighted Average Exercise Price | $ 2.85 | |
Options 4 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 55,000 | |
Weighted Average Exercise Price, Outstanding Options | $ 3.65 | |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 2 years 9 months 18 days | |
Exercisable Options, Number of Shares | 55,000 | |
Exercisable Options, Weighted Average Exercise Price | $ 3.65 |
Stock Options and Stock Based_4
Stock Options and Stock Based Compensation - Schedule of Options Granted, Exercised, and Forfeited or Canceled (Detail) | 3 Months Ended |
Aug. 31, 2018$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Shares, Options outstanding - beginning of period | shares | 318,332 |
Number of Shares, Options granted | shares | 15,000 |
Number of Shares, Options exercised | shares | 0 |
Number of Shares, Options forfeited/canceled | shares | (3,333) |
Number of Shares, Options outstanding - end of period | shares | 329,999 |
Weighted Average Exercise Price, Options outstanding - beginning of period | $ / shares | $ 2.36 |
Weighted Average Exercise Price, Options granted | $ / shares | 2.45 |
Weighted Average Exercise Price, Options exercised | $ / shares | 0 |
Weighted Average Exercise Price, Options forfeited/canceled | $ / shares | 1.70 |
Weighted Average Exercise Price, Options outstanding - end of period | $ / shares | $ 2.37 |
EPS Reconciliation - Schedule o
EPS Reconciliation - Schedule of Earnings Per Share (Detail) - shares | 3 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Weighted average shares (basic) | 3,994,545 | 2,995,910 |
Effect of dilutive stock options | 0 | 0 |
Weighted average shares (diluted) | 3,994,545 | 2,995,910 |
EPS Reconciliation - Additional
EPS Reconciliation - Additional Information (Detail) | 3 Months Ended |
Aug. 31, 2018shares | |
Earnings Per Share [Abstract] | |
Antidilutive common stock equivalents | 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2018 | May 31, 2019 | May 31, 2018 | |
Income Tax Contingency [Line Items] | |||
Other long-term liabilities related to uncertain tax positions | $ 0 | $ 0 | |
Liability for payment of interest and penalties | $ 0 | $ 0 | |
Effective tax rate on consolidated net loss | 3.10% | ||
Forecast [Member] | |||
Income Tax Contingency [Line Items] | |||
Effective tax rate for Fiscal 2019 | 44.90% | ||
Domestic Tax Authority [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax examination period under examination | 2,015 | ||
Foreign Tax Authority [Member] | United Kingdom [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax examination period under examination | 2,013 |
Segment of Business - Additiona
Segment of Business - Additional Information (Detail) | 3 Months Ended |
Aug. 31, 2018SegmentMarkets | |
Segment Reporting [Abstract] | |
Number of reportable business segments | Segment | 2 |
Number of geographic markets in which entity operates | Markets | 3 |
Segment of Business - Segment I
Segment of Business - Segment Information (Detail) - USD ($) | 3 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 3,440,453 | $ 3,083,648 |
Operating income (loss) | (113,802) | (145,282) |
Capital expenditures | 5,250 | 7,578 |
Measurement [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,246,121 | 1,013,251 |
Operating income (loss) | 148,699 | 66,498 |
Depreciation expense | 8,999 | 9,622 |
Amortization expense | 26,146 | 26,146 |
Capital expenditures | 0 | 0 |
Balancer [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 2,194,332 | 2,070,397 |
Operating income (loss) | (262,501) | (211,780) |
Depreciation expense | 12,072 | 16,982 |
Amortization expense | 0 | 0 |
Capital expenditures | 5,250 | 7,578 |
Operating Segments [Member] | Measurement [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,246,121 | 1,013,251 |
Operating Segments [Member] | Balancer [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 2,591,304 | 2,445,486 |
Intersegment Eliminations [Member] | Measurement [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | 0 |
Intersegment Eliminations [Member] | Balancer [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ (396,972) | $ (375,089) |
Segment of Business - Geographi
Segment of Business - Geographic Information (Detail) - USD ($) | 3 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | $ 3,440,453 | $ 3,083,648 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 2,200,201 | 1,791,101 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 373,463 | 517,863 |
Asia [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 824,776 | 749,422 |
Other markets [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | $ 42,013 | $ 25,262 |
Segment of Business - Segment_2
Segment of Business - Segment Information of Operating Income (Loss) and Expenditure by Geographic Areas (Detail) - USD ($) | 3 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Operating income (loss) | $ (113,802) | $ (145,282) | |
Capital expenditures | 5,250 | 7,578 | |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Operating income (loss) | (131,190) | (215,465) | |
Depreciation expense | 21,071 | 26,604 | |
Amortization expense | 26,146 | 26,146 | |
Capital expenditures | 5,250 | 7,578 | |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Operating income (loss) | [1] | 17,388 | 70,183 |
Depreciation expense | [1] | 0 | 0 |
Amortization expense | [1] | 0 | 0 |
Capital expenditures | [1] | $ 0 | $ 0 |
[1] | Note - Europe is defined as the European subsidiary, Schmitt Europe Ltd. |
Segment of Business - Segment a
Segment of Business - Segment and Geographic Assets (Detail) - USD ($) | Aug. 31, 2018 | May 31, 2018 |
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | $ 11,152,684 | $ 11,286,060 |
Geographic assets to long-lived assets | 754,989 | 770,915 |
Segment and geographic assets to total assets | 11,152,684 | 11,286,060 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 10,070,342 | 10,110,683 |
Geographic assets to long-lived assets | 754,989 | 770,915 |
Segment and geographic assets to total assets | 10,070,342 | 10,110,683 |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 1,082,342 | 1,175,377 |
Geographic assets to long-lived assets | 0 | 0 |
Segment and geographic assets to total assets | 1,082,342 | 1,175,377 |
Operating Segments [Member] | Balancer [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 6,433,148 | 6,461,974 |
Segment and geographic assets to total assets | 6,433,148 | 6,461,974 |
Operating Segments [Member] | Measurement [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 2,918,710 | 2,712,553 |
Segment and geographic assets to total assets | 2,918,710 | 2,712,553 |
Corporate Assets [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 1,800,826 | 2,111,533 |
Segment and geographic assets to total assets | $ 1,800,826 | $ 2,111,533 |