Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | TAITRON COMPONENTS INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 942,126 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 762,612 | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4,843,235 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 3,277,000 | $ 3,250,000 |
Accounts receivable, less allowances of $43,000 and $40,000, respectively | 1,359,000 | 978,000 |
Inventories, less reserves for obsolescence of $7,946,000, and $7,848,000, respectively (Note 2) | 4,546,000 | 4,990,000 |
Prepaid expenses and other current assets | 110,000 | 80,000 |
Total current assets | 9,292,000 | 9,298,000 |
Property and equipment, net | 3,790,000 | 3,866,000 |
Other assets (Note 3) | 258,000 | 403,000 |
Total assets | 13,340,000 | 13,567,000 |
Current Liabilities: | ||
Accounts payable | 986,000 | 848,000 |
Accrued liabilities | 290,000 | 358,000 |
Total current liabilities | 1,276,000 | 1,206,000 |
Long-term debt from related party (Note 4) | 0 | 500,000 |
Total Liabilities | 1,276,000 | 1,706,000 |
Commitments and contingencies (Notes 5 and 7) | ||
Shareholders’ Equity: | ||
Preferred stock, $0.001 par value. Authorized 5,000,000 shares; None issued or outstanding | 0 | 0 |
Additional paid-in capital | 10,764,000 | 10,744,000 |
Accumulated other comprehensive income | 146,000 | 144,000 |
Retained earnings | 1,051,000 | 867,000 |
Total Shareholders’ Equity - Taitron Components Inc | 11,967,000 | 11,761,000 |
Noncontrolling interest in subsidiary | 97,000 | 100,000 |
Total Shareholders’ Equity | 12,064,000 | 11,861,000 |
Total Liabilities and Shareholders’ Equity | 13,340,000 | 13,567,000 |
Common Class A [Member] | ||
Shareholders’ Equity: | ||
Common Stock, value, issued | 5,000 | 5,000 |
Common Class B [Member] | ||
Shareholders’ Equity: | ||
Common Stock, value, issued | $ 1,000 | $ 1,000 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts receivable, allowances (in Dollars) | $ 43,000 | $ 40,000 |
Inventories, reserves for obsolescence (in Dollars) | $ 7,946,000 | $ 7,848,000 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 4,828,235 | 4,808,235 |
Common stock, shares outstanding | 4,828,235 | 4,808,235 |
Common Class B [Member] | ||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 762,612 | 762,612 |
Common stock, shares issued | 762,612 | 762,612 |
Common stock, shares outstanding | 762,612 | 762,612 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net product revenue | $ 2,150,000 | $ 1,773,000 | $ 3,805,000 | $ 3,940,000 |
Cost of products sold | 1,171,000 | 1,016,000 | 2,172,000 | 2,310,000 |
Gross profit | 979,000 | 757,000 | 1,633,000 | 1,630,000 |
Selling, general and administrative expenses | 550,000 | 542,000 | 1,110,000 | 1,082,000 |
Operating income | 429,000 | 215,000 | 523,000 | 548,000 |
Interest income (expense), net | 2,000 | (11,000) | (4,000) | (20,000) |
Loss on investments (Note 3) | (60,000) | (19,000) | (135,000) | (73,000) |
Other income, net | 29,000 | 31,000 | 77,000 | 60,000 |
Income before income taxes | 400,000 | 216,000 | 461,000 | 515,000 |
Income tax provision | (1,000) | (1,000) | (3,000) | (1,000) |
Net income | 399,000 | 215,000 | 458,000 | 514,000 |
Net loss attributable to noncontrolling interest in subsidiary | (2,000) | (2,000) | (4,000) | (3,000) |
Net income attributable to Taitron Components Inc. | $ 401,000 | $ 217,000 | $ 462,000 | $ 517,000 |
Net income per share: Basic (in Dollars per share) | $ 0.07 | $ 0.04 | $ 0.08 | $ 0.09 |
Net income per share: Diluted (in Dollars per share) | 0.07 | 0.04 | 0.08 | 0.09 |
Cash dividends declared per common share (in Dollars per share) | $ 0.025 | $ 0.025 | $ 0.050 | $ 0.050 |
Weighted average common shares outstanding: Basic (in Shares) | 5,574,180 | 5,540,847 | 5,572,514 | 5,550,847 |
Weighted average common shares outstanding: Diluted (in Shares) | 5,665,847 | 5,841,847 | 5,669,181 | 5,907,847 |
Net income | $ 399,000 | $ 215,000 | $ 458,000 | $ 514,000 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | 9,000 | (9,000) | 2,000 | (27,000) |
Comprehensive income | 408,000 | 206,000 | 460,000 | 487,000 |
Comprehensive loss attributable to noncontrolling interests | (2,000) | (2,000) | (3,000) | (2,000) |
Comprehensive income attributable to Taitron Components Inc. | $ 410,000 | $ 208,000 | $ 463,000 | $ 489,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities: | ||
Net income | $ 458,000 | $ 514,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 76,000 | 118,000 |
Provision for sales returns and doubtful accounts | 3,000 | 148,000 |
Stock based compensation | 2,000 | 2,000 |
Loss on investments | 135,000 | 73,000 |
Changes in assets and liabilities: | ||
Accounts receivable | (384,000) | (652,000) |
Inventories | 444,000 | (114,000) |
Prepaid expenses and other current assets | (30,000) | (99,000) |
Accounts payable | 138,000 | 90,000 |
Accrued liabilities | (68,000) | (8,000) |
Other assets and liabilities | 11,000 | (2,000) |
Total adjustments | 327,000 | (444,000) |
Net cash provided by operating activities | 785,000 | 70,000 |
Investing activities: | ||
Acquisition of property & equipment | 0 | (25,000) |
Investment in securities | 0 | (93,000) |
Net cash used for investing activities | 0 | (118,000) |
Financing activities: | ||
Payments on notes payable | (500,000) | 0 |
Dividend payments | (278,000) | (276,000) |
Proceeds from stock options exercised | 18,000 | 40,000 |
Net cash used for financing activities | (760,000) | (236,000) |
Impact of exchange rates on cash | 2,000 | (27,000) |
Net increase (decrease) in cash and cash equivalents | 27,000 | (311,000) |
Cash and cash equivalents, beginning of period | 3,250,000 | 4,018,000 |
Cash and cash equivalents, end of period | 3,277,000 | 3,707,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 9,000 | 20,000 |
Cash paid for income taxes, net | $ 3,000 | $ 3,000 |
1 - SUMMARY OF SIGNIFICANT ACCO
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview of B usiness In 1989, we were formed and incorporated in California. We maintain a majority-owned subsidiary in Mexico (since 1998) and two divisions in each of Taiwan (since 1998) and China (since 2005). Our Mexico location closed all operations in May 2013 (final closure is pending sale of our local 15,000 sq. ft. office and warehouse facility) and our Taiwan and China locations are for supporting overseas customers, inventory sourcing, purchases and coordinating the manufacture of our products. Our China location also serves as the engineering designs support center responsible for arranging pre-production scheduling and mass production runs with joint venture partners for our projects, making component datasheets and test specifications, preparing samples, monitoring quality of shipments and performing failure analysis reports. Basis of Presentation The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its 60% majority-owned subsidiary, Taitron Components Mexico, S.A. de C.V. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited condensed consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the allowance for sales returns, doubtful accounts, inventory reserves, accrued liabilities and deferred income taxes. Certain amounts in the prior year condensed consolidated financial statements have been reclassified to conform to the current year presentation. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard on leasing. The new standard will require companies to record most leased assets and liabilities on the balance sheet, and also proposes a dual model for recognizing expense. This guidance will be effective in the first quarter of 2019 with early adoption permitted. We have evaluated the impact of adopting this guidance and we are preparing for the changes to be made to our consolidated financial statements. We expect the adoption of these accounting changes will not impact our assets and liabilities nor our net income or equity, as we currently do not lease any assets. In January 2017, the FASB issued a new accounting standard which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. This guidance will be effective for the Company for the year ending December 31, 2019 and interim reporting periods within that year. Early adoption is permitted for transactions that have not been reported in financial statements that have been issued or made available for issuance. We are currently evaluating the effect of the adoption of this guidance on our consolidated financial statements. In May 2017, the FASB issued a new accounting standard which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This guidance will be effective for the year ending December 31, 2019 and interim reporting periods within that year. Early adoption is permitted. We expect the adoption of this guidance will not have a material effect on our consolidated financial statements. Impact of Recently Issued Accounting Standards On January 1, 2018, we adopted Topic 606 (ASU 2014-09) applying the modified retrospective method. The primary impact of adoption relates to additional disclosures and presentation of revenue by primary geographical market, major product line and the timing of revenue recognition. Revenue recognition Revenue is recognized at the point at which control of the underlying products are transferred to the customer. Satisfaction of our performance obligations occur upon the transfer of control of products, either from our facilities or directly from suppliers to customers. We consider customer purchase orders to be the contracts with a customer. All revenue is generated from contracts with customers. In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to receive. Taxes assessed by a governmental authority on revenue-producing transactions are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment costs and are included in cost of products sold. Based upon the nature of our contracts with customers and our performance obligations within those contracts, we have no contract assets or liabilities as of June 30, 2018 and December 31, 2017. Nature of products We are primarily a supplier of original designed and manufactured (ODM) products that include value-added engineering and turn-key solutions. The following is a description of major products lines from which we generate our revenue: ODM Projects ODM Components Distribution Components Disaggregation of revenue In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Primary geographical markets: United States $ 1,940,000 $ 1,543,000 $ 3,386,000 $ 3,519,000 Asia 179,000 204,000 369,000 370,000 Other 31,000 26,000 50,000 51,000 2,150,000 1,773,000 3,805,000 3,940,000 Major product lines: ODM projects $ 1,231,000 $ 801,000 $ 2,075,000 $ 2,071,000 ODM components 711,000 794,000 1,428,000 1,525,000 Distribution components 208,000 178,000 302,000 344,000 2,150,000 1,773,000 3,805,000 3,940,000 Timing of revenue recognition: Products transferred at a point in time $ 2,150,000 $ 1,773,000 $ 3,805,000 $ 3,940,000 |
2 - INVENTORY
2 - INVENTORY | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | 2 – INVENTORY Inventory – Inventory, consisting principally of products held for resale, is recorded at the lower of cost (determined using the first in-first out method) or net realizable value. We had inventory balances in the amount of $4,546,000 and $4,990,000 at June 30, 2018 and December 31, 2017, respectively, which is presented net of valuation allowances of $7,946,000 and $7,848,000, respectively. We evaluate inventories to identify excess, high-cost, slow-moving or other factors rendering inventories as unmarketable at normal profit margins. Due to the complexity of managing and maintaining a large inventory of product offerings, estimates are made regarding adjustments to the cost of inventories. Based on our assumptions about future demand and market conditions, inventories are carried at the lower of cost or net realizable value. If our assumptions about future demand change, or market conditions are less favorable than those projected, additional write-downs of inventories may be required. In any case, actual amounts could be different from those estimated. |
3 - OTHER ASSETS
3 - OTHER ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Other Assets Disclosure [Text Block] | 3 – OTHER ASSETS June 30, December 31, 2018 2017 (Unaudited) Investment in securities - Zowie Technology $ 193,000 $ 193,000 Investment in joint venture - Grand Shine Mgmt 50,000 185,000 Other 15,000 25,000 Other Assets $ 258,000 $ 403,000 Our $193,000 investment in securities as of June 30, 2018 relates to our ownership of 1,322,552 common shares of Zowie Technology Corporation (New Taipei City, Taiwan), a supplier of electronic component products. Our investment relates to approximately 8.9% of their total outstanding shares although we do not have significant influence or control. This investment is accounted for under the cost method basis of accounting. Our $50,000 investment in joint venture as of June 30, 2018, relates to our 49% ownership of Grand Shine Management Limited (Dong Guan, China), an electronic device contract manufacturer, and joint venture with its 51% owner, Teamforce Company Limited. Our investment is accounted for under the equity method basis of accounting. As of June 30, 2018 and December 31, 2017, we have recorded our 49% share of cumulative unrealized losses from the inception of our investment in Grand Shine Management of $1,126,000 and $991,000, respectively. |
4 - LONG-TERM DEBT FROM RELATED
4 - LONG-TERM DEBT FROM RELATED PARTY | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 4 – LONG-TERM DEBT FROM RELATED PARTY On April 21, 2008 we entered into a $3,000,000 credit facility, collateralized by real property, from K.S. Best International Co. Ltd., a company controlled by the brother of our Chief Executive Officer. Credit is available in $500,000 advances, each advance is payable in monthly interest only installments, at the rate of Prime + 0.25% per annum. As of June 30, 2018 and December 31, 2017, the aggregate outstanding balance on this credit facility was $0 and $500,000, respectively. |
5 - RELATED PARTY TRANSACTIONS
5 - RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 5 – RELATED PARTY TRANSACTIONS We made payments to K.S. Best International Co. Ltd., a company controlled by the brother of our Chief Executive Officer of approximately $6,000 for both of the three and six months ended June 30, 2018 and 2017. These payments were for professional fees related to the operational management of our Taiwan office. In addition, we also made interest expense payments on our credit facility of approximately $3,000 and $11,000 for the three months ended June 30, 2018 and 2017, respectively and $9,000 and $21,000 for the six months ended June 30, 2018 and 2017, respectively. See Note 4. We had a $3,000,000 credit facility, collateralized by real property, from K.S. Best International Co. Ltd., a company controlled by the brother of our Chief Executive Officer. See Note 4. |
6 - SHARE BASED COMPENSATION
6 - SHARE BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 6 – SHARE BASED COMPENSATION Accounting for stock options issued to employees measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. Outstanding options to purchase Class A common stock (“the Options”) vest in three equal annual installments beginning one year from the date of grant and are subject to termination provisions as defined in our 2005 Stock Incentive Plan. The Options activity during the six months ended June 30, 2018 is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Years Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2017 331,000 $ 1.08 3.5 $ 204,000 Exercised (20,000 ) 0.92 Forfeited (34,000 ) 1.48 Outstanding at June 30, 2018 277,000 1.04 3.4 $ 190,000 Exercisable at June 30, 2018 275,333 $ 1.04 3.4 $ 160,000 At June 30, 2018, the range of individual outstanding weighted average exercise prices was $0.98 to $1.16. |
7 - COMMITMENTS AND CONTINGENCI
7 - COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 7 – COMMITMENTS AND CONTINGENCIES Inventory Purchasing Outstanding commitments to purchase inventory from suppliers aggregated $1,320,000 as of June 30, 2018. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its 60% majority-owned subsidiary, Taitron Components Mexico, S.A. de C.V. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited condensed consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the allowance for sales returns, doubtful accounts, inventory reserves, accrued liabilities and deferred income taxes. Certain amounts in the prior year condensed consolidated financial statements have been reclassified to conform to the current year presentation. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard on leasing. The new standard will require companies to record most leased assets and liabilities on the balance sheet, and also proposes a dual model for recognizing expense. This guidance will be effective in the first quarter of 2019 with early adoption permitted. We have evaluated the impact of adopting this guidance and we are preparing for the changes to be made to our consolidated financial statements. We expect the adoption of these accounting changes will not impact our assets and liabilities nor our net income or equity, as we currently do not lease any assets. In January 2017, the FASB issued a new accounting standard which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. This guidance will be effective for the Company for the year ending December 31, 2019 and interim reporting periods within that year. Early adoption is permitted for transactions that have not been reported in financial statements that have been issued or made available for issuance. We are currently evaluating the effect of the adoption of this guidance on our consolidated financial statements. In May 2017, the FASB issued a new accounting standard which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This guidance will be effective for the year ending December 31, 2019 and interim reporting periods within that year. Early adoption is permitted. We expect the adoption of this guidance will not have a material effect on our consolidated financial statements. Impact of Recently Issued Accounting Standards On January 1, 2018, we adopted Topic 606 (ASU 2014-09) applying the modified retrospective method. The primary impact of adoption relates to additional disclosures and presentation of revenue by primary geographical market, major product line and the timing of revenue recognition. |
Revenue Recognition Accounting Policy, Gross and Net Revenue Disclosure [Policy Text Block] | Revenue recognition Revenue is recognized at the point at which control of the underlying products are transferred to the customer. Satisfaction of our performance obligations occur upon the transfer of control of products, either from our facilities or directly from suppliers to customers. We consider customer purchase orders to be the contracts with a customer. All revenue is generated from contracts with customers. In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to receive. Taxes assessed by a governmental authority on revenue-producing transactions are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment costs and are included in cost of products sold. Based upon the nature of our contracts with customers and our performance obligations within those contracts, we have no contract assets or liabilities as of June 30, 2018 and December 31, 2017. Nature of products We are primarily a supplier of original designed and manufactured (ODM) products that include value-added engineering and turn-key solutions. The following is a description of major products lines from which we generate our revenue: ODM Projects ODM Components Distribution Components Disaggregation of revenue In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Primary geographical markets: United States $ 1,940,000 $ 1,543,000 $ 3,386,000 $ 3,519,000 Asia 179,000 204,000 369,000 370,000 Other 31,000 26,000 50,000 51,000 2,150,000 1,773,000 3,805,000 3,940,000 Major product lines: ODM projects $ 1,231,000 $ 801,000 $ 2,075,000 $ 2,071,000 ODM components 711,000 794,000 1,428,000 1,525,000 Distribution components 208,000 178,000 302,000 344,000 2,150,000 1,773,000 3,805,000 3,940,000 Timing of revenue recognition: Products transferred at a point in time $ 2,150,000 $ 1,773,000 $ 3,805,000 $ 3,940,000 |
1 - SUMMARY OF SIGNIFICANT AC14
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Primary geographical markets: United States $ 1,940,000 $ 1,543,000 $ 3,386,000 $ 3,519,000 Asia 179,000 204,000 369,000 370,000 Other 31,000 26,000 50,000 51,000 2,150,000 1,773,000 3,805,000 3,940,000 Major product lines: ODM projects $ 1,231,000 $ 801,000 $ 2,075,000 $ 2,071,000 ODM components 711,000 794,000 1,428,000 1,525,000 Distribution components 208,000 178,000 302,000 344,000 2,150,000 1,773,000 3,805,000 3,940,000 Timing of revenue recognition: Products transferred at a point in time $ 2,150,000 $ 1,773,000 $ 3,805,000 $ 3,940,000 |
3 - OTHER ASSETS (Tables)
3 - OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Other Assets [Table Text Block] | June 30, December 31, 2018 2017 (Unaudited) Investment in securities - Zowie Technology $ 193,000 $ 193,000 Investment in joint venture - Grand Shine Mgmt 50,000 185,000 Other 15,000 25,000 Other Assets $ 258,000 $ 403,000 |
6 - SHARE BASED COMPENSATION (T
6 - SHARE BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | The Options activity during the six months ended June 30, 2018 is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Years Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2017 331,000 $ 1.08 3.5 $ 204,000 Exercised (20,000 ) 0.92 Forfeited (34,000 ) 1.48 Outstanding at June 30, 2018 277,000 1.04 3.4 $ 190,000 Exercisable at June 30, 2018 275,333 $ 1.04 3.4 $ 160,000 |
1 - SUMMARY OF SIGNIFICANT AC17
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Jun. 30, 2018 |
Taitron Components Mexico [Member] | |
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 60.00% |
1 - SUMMARY OF SIGNIFICANT AC18
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of New Accounting Pronouncements and Changes in Accounting Principles - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | $ 2,150,000 | $ 1,773,000 | $ 3,805,000 | $ 3,940,000 |
Products Transferred at a Point in Time [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 2,150,000 | 1,773,000 | 3,805,000 | 3,940,000 |
UNITED STATES | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 1,940,000 | 1,543,000 | 3,386,000 | 3,519,000 |
Asia [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 179,000 | 204,000 | 369,000 | 370,000 |
Other [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 31,000 | 26,000 | 50,000 | 51,000 |
ODM Projects [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 1,231,000 | 801,000 | 2,075,000 | 2,071,000 |
ODM Components [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 711,000 | 794,000 | 1,428,000 | 1,525,000 |
Distribution Components [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | $ 208,000 | $ 178,000 | $ 302,000 | $ 344,000 |
2 - INVENTORY (Details)
2 - INVENTORY (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Inventory, Net | $ 4,546,000 | $ 4,990,000 |
Inventory Valuation Reserves | $ 7,946,000 | $ 7,848,000 |
3 - OTHER ASSETS (Details)
3 - OTHER ASSETS (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Zowie Technology [Member] | ||
3 - OTHER ASSETS (Details) [Line Items] | ||
Equity Method Investments | $ 193,000 | $ 193,000 |
Equity Method Investment, Ownership Percentage | 8.90% | |
Grand Shine Management Limited [Member] | ||
3 - OTHER ASSETS (Details) [Line Items] | ||
Equity Method Investments | $ 50,000 | 185,000 |
Equity Method Investment, Ownership Percentage | 49.00% | |
Unrealized Gain (Loss) on Investments | $ (1,126,000) | $ (991,000) |
Common Stock [Member] | Zowie Technology [Member] | ||
3 - OTHER ASSETS (Details) [Line Items] | ||
Investment Owned, Balance, Shares (in Shares) | 1,322,552 | |
Teamforce Company Limited [Member] | Grand Shine Management Limited [Member] | ||
3 - OTHER ASSETS (Details) [Line Items] | ||
Equity Method Investment, Ownership Percentage | 51.00% |
3 - OTHER ASSETS (Details) - Sc
3 - OTHER ASSETS (Details) - Schedule of Other Assets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
3 - OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Other Investment | $ 15,000 | $ 25,000 |
Other Assets | 258,000 | 403,000 |
Zowie Technology [Member] | ||
3 - OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Investments | 193,000 | 193,000 |
Grand Shine Management Limited [Member] | ||
3 - OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Investments | $ 50,000 | $ 185,000 |
4 - LONG-TERM DEBT FROM RELAT22
4 - LONG-TERM DEBT FROM RELATED PARTY (Details) - Line of Credit [Member] - Immediate Family Member of Management or Principal Owner [Member] - USD ($) | Apr. 21, 2008 | Jun. 30, 2018 | Dec. 31, 2017 |
4 - LONG-TERM DEBT FROM RELATED PARTY (Details) [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,000,000 | $ 3,000,000 | |
Line of Credit Facility, Collateral | collateralized by real property, from K.S. Best International Co. | ||
Line of Credit Facility, Description | Credit is available in $500,000 advances | ||
Line of Credit Facility, Frequency of Payment and Payment Terms | each advance is payable in monthly interest only installments | ||
Long-term Line of Credit | $ 0 | $ 500,000 | |
Prime Rate [Member] | |||
4 - LONG-TERM DEBT FROM RELATED PARTY (Details) [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.25% |
5 - RELATED PARTY TRANSACTIONS
5 - RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | Apr. 21, 2008 | |
5 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 9,000 | $ 20,000 | ||||
Immediate Family Member of Management or Principal Owner [Member] | ||||||
5 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||
Costs and Expenses, Related Party | $ 6,000 | $ 6,000 | $ 6,000 | $ 6,000 | ||
Related Party Transaction, Description of Transaction | professional fees related to the operational management of our Taiwan office | professional fees related to the operational management of our Taiwan office | ||||
Line of Credit [Member] | Immediate Family Member of Management or Principal Owner [Member] | ||||||
5 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 3,000 | $ 9,000 | $ 21,000 | $ 11,000 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 |
6 - SHARE BASED COMPENSATION (D
6 - SHARE BASED COMPENSATION (Details) | 6 Months Ended |
Jun. 30, 2018$ / shares | |
Minimum [Member] | |
6 - SHARE BASED COMPENSATION (Details) [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $ 0.98 |
Maximum [Member] | |
6 - SHARE BASED COMPENSATION (Details) [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $ 1.16 |
2005 Stock Incentive Plan [Member] | |
6 - SHARE BASED COMPENSATION (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | vest in three equal annual installments beginning one year from the date of grant and are subject to termination provisions as defined in our 2005 Stock Incentive Plan. |
6 - SHARE BASED COMPENSATION 25
6 - SHARE BASED COMPENSATION (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | ||
Number of Options Outstanding | 277,000 | 331,000 |
Weighted Average Exercise Price of Options Outstanding | $ 1.04 | $ 1.08 |
Weighted Average Years Remaining Contractual Term of Options Outstanding | 3 years 146 days | 3 years 6 months |
Aggregate Intrinsic Value of Options Outstanding | $ 190,000 | $ 204,000 |
Number of Options Exercisable | 275,333 | |
Weighted Average Exercise Price of Options Excercisable | $ 1.04 | |
Weighted Average Years Remaining Contractual Term of Options Exercisable | 3 years 146 days | |
Aggregate Intrinsic Value of Options Exercisable | $ 160,000 | |
Number of Options Exercised | (20,000) | |
Weighted Average Exercise Price of Options Exercised | $ 0.92 | |
Number of Options Forfeited | (34,000) | |
Weighted Average Exercise Price | $ 1.48 |
7 - COMMITMENTS AND CONTINGEN26
7 - COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Commitment, Remaining Minimum Amount Committed | $ 1,320,000 |