FG (FGH) 10-Q 5 Nov 15 2015 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 02, 2015
Document And Entity Information
Entity Registrant Name	BALLANTYNE STRONG, INC.
Entity Central Index Key	946,454
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		14,163,246
Trading Symbol	BTN
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 24,749	$ 22,491
Accounts receivable (net of allowance for doubtful accounts of $811 and $679, respectively)	13,650	19,220
Inventories:
Finished goods, net	9,241	9,529
Work in process	345	632
Raw materials and components, net	1,151	2,281
Total inventories, net	10,737	12,442
Recoverable income taxes	111	1,255
Deferred income taxes	1,119	3,541
Other current assets	2,712	2,956
Current assets held for sale	638	2,712
Total current assets	53,716	64,617
Property, plant and equipment (net of accumulated depreciation of $6,316 and $5,834, respectively)	12,517	13,914
Intangible assets, net	264	1,168
Goodwill	895	1,029
Notes receivable	$ 1,669	2,985
Deferred income taxes		4,910
Other assets	$ 570	1,447
Total assets	69,631	90,070
Current liabilities:
Accounts payable	7,616	9,039
Accrued expenses	4,738	4,366
Customer deposits/deferred revenue	4,203	5,473
Income tax payable	1,166	1,009
Total current liabilities	17,723	19,887
Deferred revenue	1,525	2,230
Deferred income taxes	2,346	715
Other accrued expenses, net of current portion	1,523	1,776
Total liabilities	$ 23,117	$ 24,608
Stockholders' equity:
Preferred stock, par value $.01 per share; Authorized 1,000 shares, none outstanding
Common stock, par value $.01 per share; Authorized 25,000 shares; issued 16,895 and 16,809 shares at September 30, 2015 and December 31, 2014, respectively; 14,164 and 14,078 shares outstanding at September 30, 2015 and December 31, 2014, respectively	$ 168	$ 168
Additional paid-in capital	38,927	38,657
Accumulated other comprehensive income:
Foreign currency translation	(5,258)	(2,325)
Postretirement benefit obligations	139	139
Retained earnings	30,778	47,062
Stockholders' Equity Before Treasury Stock	64,754	83,701
Less 2,731 of common shares in treasury, at cost at September 30, 2015 and December 31, 2014	(18,240)	(18,239)
Total stockholders' equity	46,514	65,462
Total liabilities and stockholders' equity	$ 69,631	$ 90,070

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 811	$ 679
Property, plant and equipment, accumulated depreciation	$ 6,316	$ 5,834
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares outstanding
Common stock par value	$ 0.01	$ 0.01
Common stock, shares authorized	25,000	25,000
Common stock, shares issued	16,895	16,809
Common stock, shares outstanding	14,164	14,078
Common shares in treasury, shares	2,731	2,731

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Net product sales	$ 17,327	$ 17,396	$ 48,257	$ 48,432
Net service revenues	6,185	5,268	17,442	18,280
Total net revenues	23,512	22,664	65,699	66,712
Cost of products sold	15,271	15,042	42,439	41,676
Cost of services	4,273	3,565	11,362	12,516
Total cost of revenues	19,544	18,607	53,801	54,192
Gross profit	3,968	4,057	11,898	12,520
Selling and administrative expenses:
Selling	1,187	1,843	4,307	4,947
Administrative	4,032	3,066	11,893	9,781
Total selling and administrative expenses	5,219	4,909	16,200	14,728
Gain (loss) on the sale or disposal of assets	(15)	4	(393)	12
Loss from operations	$ (1,266)	$ (848)	(4,695)	(2,196)
Equity income of joint venture			94	95
Other income (expense):
Interest income	$ 21	$ 175	351	534
Interest expense	(7)	$ (15)	(31)	$ (43)
Fair value adjustment to notes receivable	(1,595)		(1,595)
Other income, net	763	$ 255	1,345	$ 341
Total other income (expense)	(818)	415	70	832
Loss before income taxes	(2,084)	(433)	(4,531)	(1,269)
Income tax benefit (expense)	(1,117)	324	(11,753)	947
Net loss	$ (3,201)	$ (109)	$ (16,284)	$ (322)
Basic loss per share	$ (0.23)	$ (0.01)	$ (1.15)	$ (0.02)
Diluted loss per share	$ (0.23)	$ (0.01)	$ (1.15)	$ (0.02)
Weighted average shares outstanding:
Basic	14,164	14,086	14,122	14,052
Diluted	14,164	14,086	14,122	14,052

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net loss	$ (3,201)	$ (109)	$ (16,284)	$ (322)
Currency translation adjustment:
Unrealized net change arising during period	(1,965)	(710)	(2,933)	(1,113)
Other comprehensive loss	(1,965)	(710)	(2,933)	(1,113)
Comprehensive loss	$ (5,166)	$ (819)	$ (19,217)	$ (1,435)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (16,284)	$ (322)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Provision for doubtful accounts	215	9
Provision for obsolete inventory	1,645	(117)
Provision for warranty	583	(191)
Depreciation and amortization	1,646	$ 1,374
Fair value adjustment to notes receivable	1,595
Impairment of intangibles	638
Equity in income of joint venture	$ (94)	$ (95)
Loss on forward contracts		145
(Gain) loss on disposal of assets	$ 393	(12)
Deferred income taxes	8,765	(916)
Share-based compensation expense	269	292
Changes in operating assets and liabilities:
Accounts, unbilled and notes receivable	6,166	5,976
Inventories	1,108	(1,348)
Other current assets	96	(8)
Accounts payable	(1,341)	(2,094)
Accrued expenses	(238)	(2,050)
Customer deposits/deferred revenue	(1,931)	(917)
Current income taxes	1,425	(2,938)
Other assets	(62)	(83)
Net cash provided by (used in) operating activities	4,594	(3,295)
Cash flows from investing activities:
Capital expenditures	(1,051)	(1,057)
Proceeds from sale of assets	38	58
Net cash used in investing activities	(1,013)	(999)
Cash flows from financing activities:
Payments on capital lease obligations	(14)	(14)
Excess tax benefits from share-based arrangements	10	(7)
Net cash used in financing activities	(4)	(21)
Effect of exchange rate changes on cash and cash equivalents	(1,319)	(460)
Net increase (decrease) in cash and cash equivalents	2,258	(4,775)
Cash and cash equivalents at beginning of period	22,491	28,791
Cash and cash equivalents at end of period	24,749	24,016
Supplemental disclosure of non-cash investing and financing activities:
Capital lease obligations for property and equipment	$ 935	$ 158

Nature of Operations

Nature of Operations	9 Months Ended
	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	1. Nature of Operations Ballantyne Strong, Inc. (“Ballantyne” or the “Company”), a Delaware corporation, and its wholly owned subsidiaries Strong Westrex, Inc., Strong Technical Services, Inc., (“STS”) Strong/MDI Screen Systems, Inc., Strong Westrex (Beijing) Trading Inc., Convergent Corporation and Convergent Media Systems Corporation (“CMS”) designs, integrates, and installs technology solutions for a broad range of applications; develops and delivers out-of-home messaging, advertising and communications; manufactures projection screens; and provides managed services including monitoring of networked equipment to our customers. The Company’s products are distributed to the cinema, retail, financial, and government markets throughout the world.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and all majority owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America for annual reporting purposes or those made in the Company’s Annual Report on Form 10-K. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year-ended December 31, 2014. The condensed consolidated balance sheet as of December 31, 2014 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of trends or results expected for a full year. Use of Management Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. Fair Value of Financial and Derivative Instruments The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: ● Level 1 - inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities ● Level 2 - inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly ● Level 3 - inputs to the valuation techniques are unobservable for the assets or liabilities The following table presents the Company’s financial assets and liabilities measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall. Fair Values Measured on a Recurring Basis at September 30, 2015: Level 1 Level 2 Level 3 Total $ in thousands Cash and cash equivalents $ 24,749 $ — $ — $ 24,749 Note Receivable $ — $ — $ 1,669 $ 1,669 Fair Values Measured on a Recurring Basis at December 31, 2014: Level 1 Level 2 Level 3 Total $ in thousands Cash and cash equivalents $ 22,491 $ — $ — $ 22,491 Note Receivable $ — $ — $ 2,985 $ 2,985 Quantitative information about the Company’s level 3 fair value measurements at September 30, 2015 is set forth below: $ in thousands Fair Value at 9/30/2015 Valuation Technique Unobservable input Range Note Receivable $ 1,669 Discounted cash flow Probability of default 47 % Discount rate 18 % The notes receivable are recorded at estimated fair value at September 30, 2015 and accrue interest at a rate of 15% per annum. During the quarter ended September 30, 2015, new information became available regarding the ability of the debtor to repay the interest on the notes receivable which caused the Company to change the probability of default used in the discounted cash flow valuation from 0% to 47%. This resulted in a reduction to the fair value of notes receivable of $1.6 million during the three and nine months ended September 30, 2015. The significant unobservable inputs used in the fair value measurement of the Company’s note receivable are discount rate and probability of default in the event of default. Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) fair value measurement. The following table reconciles the beginning and ending balance of the Company’s Note Receivable fair value: Nine months ended September 30, 2015 2014 $ in thousands Note Receivable balance, beginning of period $ 2,985 $ 2,497 Interest income accrued 279 358 Fair value adjustment (1,595 ) — Note Receivable balance, end of period $ 1,669 $ 2,855 The carrying values of all other financial assets and liabilities including accounts receivable, accounts payable and accrued expenses reported in the consolidated balance sheets equal or approximate their fair values due to the short-term nature of these instruments. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which includes non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). During the nine months ended September 30, 2015 the Company measured a portion of its intangible assets at fair value as discussed further in footnote 5. Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The guidance was originally effective for the Company beginning January 1, 2017. However, in July 2015, the FASB approved a one year deferral of the update, resulting in an effective date of January 1, 2018 for the Company. An entity may adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the ASU. Early adoption is not permitted. The Company is currently evaluating the potential impact of adopting this guidance and has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, “Simplifying the Measurement of Inventory” (“ASU 2015-11”). ASU 2015-11 requires an entity utilizing the FIFO inventory method to change their measurement principle for inventory changes from the lower of cost or market to lower of cost and net realizable value. The guidance is effective for the Company beginning January 1, 2017. An entity must adopt this ASU prospectively and early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance and has not determined the effect of the standard on its ongoing financial reporting.

Loss Per Common Share

Loss Per Common Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Loss Per Common Share	3. Loss Per Common Share Basic loss per share have been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted loss per share has been computed on the basis of the weighted average number of shares of common stock outstanding after giving effect to potential common shares from dilutive stock options and certain non-vested shares of restricted stock. The following table provides the reconciliation between basic and diluted loss per share: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2015 2014 2015 2014 Basic loss per share: Loss applicable to common stock $ (3,201 ) $ (109 ) $ (16,284 ) $ (322 ) Basic weighted average common shares outstanding 14,164 14,086 14,122 14,052 Basic loss per share $ (0.23 ) $ (0.01 ) $ (1.15 ) $ (0.02 ) Diluted loss per share: Loss applicable to common stock $ (3,201 ) $ (109 ) $ (17,344 ) $ (322 ) Basic weighted average common shares outstanding 14,164 14,086 14,122 14,052 Dilutive effect of stock options and restricted stock awards — — — — Dilutive weighted average common shares outstanding 14,164 14,086 14,122 14,052 Diluted loss per share $ (0.23 ) $ (0.01 ) $ (1.15 ) $ (0.02 ) For the three and nine month periods ended September 30, 2015, options to purchase 20,625 and 124,125 shares of common stock respectively were outstanding but were not included in the computation of diluted earnings per share as the option’s exercise price was greater than the average market price of the common shares for the respective periods. For the three and nine month periods ended September 30, 2015, restricted stock units of 56,873 and 88,877, respectively were excluded as their inclusion would be anti-dilutive, thereby decreasing the net loss per share. For the three and nine month periods ended September 30, 2014, options to purchase 196,500 shares of common stock were outstanding but were not included in the computation of diluted earnings per share as the option’s exercise price was greater than the average market price of the common shares for the respective periods. An additional 198,892 and 222,448 restricted stock units were excluded from the three and nine month periods ended September 30, 2014 as their inclusion would be anti-dilutive, thereby decreasing the net loss per share.

Warranty Reserves

Warranty Reserves	9 Months Ended
	Sep. 30, 2015
Product Warranties Disclosures [Abstract]
Warranty Reserves	4. Warranty Reserves Historically, the Company has generally granted a warranty to its customers for a one-year period following the sale of manufactured equipment and on selected repaired equipment for a one-year period. In most instances, the digital products are covered by the manufacturing firm’s OEM warranty; however, there are certain customers where the Company may grant warranties in excess of the manufacturer’s warranty for digital products. The Company accrues for these costs at the time of sale or repair. The following table summarizes warranty activity for the three and nine months ended September 30, 2015 and 2014: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Warranty accrual at beginning of period $ 310 $ 456 $ 423 $ 662 Charged to expense 130 78 468 166 Amounts written off, net of recoveries (144 ) (216 ) (595 ) (505 ) Foreign currency adjustment (15 ) (2 ) (15 ) (7 ) Warranty accrual at end of period $ 281 $ 316 $ 281 $ 316

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	5. Intangible Assets Intangible assets consisted of the following at September 30, 2015: Useful life Gross Accumulated amortization Net (Years) ( in thousands) Intangible assets subject to amortization: Customer relationships 4-9 $ 1,404 $ (1,404 ) $ — Trademarks 3 182 (182 ) — Product Formulation 10 457 (193 ) 264 Total $ 2,043 $ (1,779 ) $ 264 Intangible assets consisted of the following at December 31, 2014: Useful life Gross Accumulated amortization Net (Years) ( in thousands) Intangible assets subject to amortization: Customer relationships 4-9 $ 1,556 $ (1,538 ) $ 18 Trademarks 3 210 (210 ) — Software 3 905 (144 ) 761 Software in development 3 16 — 16 Product Formulation 10 526 (153 ) 373 Total $ 3,213 $ (2,045 ) $ 1,168 The Company recorded amortization expense relating to other identifiable intangible assets of $0.3 million and $0.2 million for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015 the Company determined that the entire carrying amount of the software intangibles would not be recoverable as no future customers would be able to utilize the software and recorded an impairment charge of $0.6 million for these intangibles to measure them at their fair value. The following table shows the Company’s estimated future amortization expense related to intangible assets for the next five years. Amount (in thousands) Remainder 2015 $ 20 2016 65 2017 52 2018 42 2019 31 Thereafter 54

Goodwill

Goodwill	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	6. Goodwill The following represents a summary of changes in the Company’s carrying amount of goodwill for the quarter ended September 30, 2015: (in thousands) Balance as of December 31, 2014 $ 1,029 Foreign currency translation (134 ) Balance as of September 30, 2015 $ 895

Restructuring Activities

Restructuring Activities	9 Months Ended
	Sep. 30, 2015
Restructuring and Related Activities [Abstract]
Restructuring Activities	7. Restructuring Activities In connection with the integration of the 2013 CMS acquisition, as well as the Company’s ongoing plans to improve efficiency and effectiveness of its operations, the Company initiated plans in the fourth quarter of 2013 to reduce headcount and move the Company’s warehouse from Omaha, Nebraska to Georgia. In 2013, the Company recorded $1.5 million in severance costs it expected to incur as part of the integration of CMS and for site closure of the Omaha warehouse. The restructuring initiative was completed in the first quarter of 2015. In connection with its strategic planning process, as well as the Company’s ongoing plans to improve efficiency and effectiveness of its operations, the Company initiated plans in the second quarter of 2015 to reduce headcount and more efficiently utilize real estate assets. Included in administrative expenses for the nine months ended September 30, 2015, are $0.7 million and $0.2 million of severance and lease termination costs the Company expects to incur as part of this restructuring plan. The following table reconciles the beginning and ending restructuring balance for the nine months ended September 30, 2015, which is included in accrued expenses: 2015 Strategic Initiative 2013 Convergent Related Severance Total Restructuring ( in thousands) Accrued liability at beginning of period $ - $ 187 $ 187 Lease termination expense 219 - 219 Lease termination paid (41 ) - (41 ) Severance expense 695 - 695 Severance paid (447 ) (160 ) (607 ) Accrued liability at end of period $ 426 $ 27 $ 453 The following table reconciles the beginning and ending restructuring balance for the three months ended September 30, 2015, which is included in accrued expenses: 2015 Strategic Initiative 2013 Convergent Related Severance Total Restructuring ( in thousands) Accrued liability at beginning of period $ 706 $ 58 $ 764 Lease termination expense (94 ) - (94 ) Lease termination paid (41 ) - (41 ) Severance paid (145 ) (31 ) (176 ) Accrued liability at end of period $ 426 $ 27 $ 453

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Income Taxes	8. Income Taxes In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. A cumulative loss in a particular tax jurisdiction in recent years is a significant piece of evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence including recent updates to the taxing jurisdictions generating income, the Company concluded that a valuation allowance of $7.9 million should be recorded against the Company’s U.S. and China tax jurisdiction deferred tax assets as of September 30, 2015. During the third quarter the valuation allowance decreased $1.3 million. The effective tax rate (calculated as a ratio of income tax expense/(benefit) to pretax earnings, inclusive of equity method investment losses) was approximately 53.6% and 259.4% for the three and nine months ended September 30, 2015, respectively as compared to (74.8%) and (74.6%) for the three and nine months ended September 30, 2014, respectively. The effective tax rate differs from the statutory rates for the three month periods ended September 30, 2015 and 2014 primarily as a result of the increase to the valuation allowance recorded against the Company’s U.S. tax jurisdiction deferred tax assets in 2015 and differing foreign and U.S. tax rates applied to respective pre-tax earnings by tax jurisdiction. The Company’s annual effective rate was higher in the nine month period ended September 30, 2015 compared to the comparable period for 2014 primarily due to the valuation allowance recorded against the Company’s U.S. and China tax jurisdiction deferred tax assets. The Company currently has an exam initiated for Federal purposes for the 2011 fiscal year. The Company has examinations not yet initiated for Federal purposes for fiscal years 2012, 2013, and 2014. In most cases, the Company has examinations open for State or local jurisdictions based on the particular jurisdiction’s statute of limitations.

Stock Compensation

Stock Compensation	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Compensation	9. Stock Compensation The Company recognizes compensation expense for all share-based payment awards made to employees and directors based on their estimated fair values. Share-based compensation expense included in selling and administrative expenses approximated $0.1 million and $0.3 million for the three and nine months ended September 30, 2015 and $0.1 million and $0.3 million for the three and nine months ended September 30, 2014. Long-Term Incentive Plan The Company’s 2010 Long-Term Incentive Plan (“2010 Plan”) provides the Compensation Committee of the Board of Directors with the discretion to grant stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, or performance units. Vesting terms vary with each grant and may be subject to vesting upon a “change in control” of the Company. The total number of shares reserved for issuance under the 2010 Plan is 1,600,000 shares. During the three month and nine months ended September 30, 2015, the Company granted zero and 27,500 restricted stock units, respectively, under the 2010 Plan. Options The following table summarizes the Company’s activities with respect to its stock options for the nine months ended September 30, 2015 as follows: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic (in thousands) Outstanding at December 31, 2014 181,500 $ 5.56 6.77 $ 13 Granted — — Exercised — — Forfeited (99,000 ) 6.53 Outstanding at September 30, 2015 82,500 $ 4.39 6.55 $ 26 Exercisable at September 30, 2015 60,000 $ 4.41 6.52 $ 9 The aggregate intrinsic value in the table above represents the total that would have been received by the option holders if all in-the-money options had been exercised and sold on September 30, 2015. As of September 30, 2015, the total unrecognized compensation cost related to stock option awards was approximately $16,000 which is expected to be recognized over a weighted average period of 0.3 years. The following table summarizes information about stock options outstanding and exercisable at September 30, 2015: Options Outstanding at September 30, 2015 Options Exercisable at September 30, 2015 Range of option exercise price Number of options Weighted average remaining contractual life Weighted average exercise price per option Number of options Weighted average remaining contractual life Weighted average exercise price per option $3.55 to 4.70 82,500 6.55 $ 4.39 60,000 6.52 $ 4.41 Restricted Stock Plans The Ballantyne Strong, Inc. 2014 Non-Employee Directors’ Restricted Stock Plan (the “Non-Employee Plan”) provides for the award of restricted shares to outside directors. A total of 200,000 shares are reserved for issuance under the Non-Employee Plan. During the nine months ended September 30, 2015, the Company granted 53,208 restricted shares under the Non-Employee Plan to the Board of Directors. These shares will vest the day preceding the Company’s 2016 Annual Meeting of Stockholders. In connection with the restricted stock granted to certain employees and non-employee directors, the Company accrues compensation expense based on the estimated number of shares expected to be issued utilizing the most current information available to the Company at the date of the financial statements. The Company estimates the fair value of restricted stock awards based upon the market price of the underlying common stock on the date of grant. As of September 30, 2015, the total unrecognized compensation cost related to non-vested restricted stock awards was approximately $0.5 million which is expected to be recognized over a weighted average period of 2.1 years. The following table summarizes restricted stock activity for the nine months ended September 30, 2015: Number of Restricted Stock Shares Weighted Average Grant Price Fair Value Non-vested at December 31, 2014 264,793 $ 3.93 Granted 80,708 4.42 Shares vested (86,317 ) 4.12 Shares forfeited (110,027 ) 3.84 Non-vested at September 30, 2015 149,158 $ 4.14

Foreign Exchange Contracts

Foreign Exchange Contracts	9 Months Ended
	Sep. 30, 2015
Foreign Currency [Abstract]
Foreign Exchange Contracts	10. Foreign Exchange Contracts The Company’s primary exposure to foreign currency fluctuations pertains to its subsidiaries in Canada and China. In certain instances the Company may enter into foreign exchange forward contracts to manage a portion of this risk. The Company has not designated its foreign exchange forward contracts as hedges. All cash flows related to our foreign currency exchange contracts are classified as operating cash flows. The Company recognized in other income, the following realized and unrealized gains from foreign currency forward exchange contracts: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) Classification 2015 2014 2015 2014 Foreign exchange forward contracts Other Income (Loss) $ — $ — $ — $ (145 )

Commitments, Contingencies and

Commitments, Contingencies and Concentrations	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments, Contingencies and Concentrations	11. Commitments, Contingencies and Concentrations Concentrations The Company’s top ten customers accounted for approximately 47.8% and 46.9% of total consolidated net revenues for the three and nine months ended September 30, 2015, respectively. Trade accounts receivable from these customers represented approximately 36.6% of net consolidated receivables at September 30, 2015. While the Company believes its relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from the Company’s significant customers could have a material adverse effect on the Company’s business, financial condition and results of operations. The Company could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which the Company sells its products and services. Financial instruments that potentially expose the Company to a concentration of credit risk principally consist of accounts receivable. The Company sells product to a large number of customers in many different geographic regions. To minimize credit concentration risk, the Company performs ongoing credit evaluations of its customers’ financial condition. Leases The Company and its subsidiaries lease plant and office facilities, furniture, autos and equipment under operating leases expiring through 2023. These leases generally contain renewal options and the Company expects to renew or replace certain of these leases in the ordinary course of business. The Company’s future minimum lease payments for leases at September 30, 2015 are as follows: Capital Leases Operating Leases (In thousands) Remainder 2015 $ 80 $ 168 2016 319 467 2017 290 356 2018 248 340 2019 130 343 Thereafter — 968 Total minimum lease payments 1,067 $ 2,642 Less: Amount representing interest 58 Present value of minimum lease payments 1,009 Less: Current maturities 303 Capital lease obligations, net of current portion $ 706

Business Segment Information

Business Segment Information	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
Business Segment Information	12. Business Segment Information As of September 30, 2015, the Company’s operations were conducted principally through two business segments: Systems Integration and Managed Services. Systems Integration operations include the sale of digital projection equipment, screens, sound systems in addition to the design, assembly and sale of followspots and other lighting products. Managed Services operations include the delivery of end to end digital signage solutions, video communication solutions, content creation and management and service of digital signage and digital cinema equipment. The Company allocates resources to business segments and evaluates the performance of these segments based upon reported segment operating profit. The Company records intercompany sales at cost and has eliminated all significant intercompany sales in consolidation. Summary by Business Segments Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Net revenue Systems Integration $ 14,814 $ 15,725 $ 42,755 $ 44,500 Managed Services 8,992 7,170 23,836 23,142 Total segment revenue 23,806 22,895 66,591 67,642 Eliminations (294 ) (231 ) (892 ) (930 ) Total net revenue $ 23,512 $ 22,664 $ 65,699 $ 66,712 Operating Income (Loss) Systems Integration $ 2,184 $ 1,488 $ 5,043 $ 3,995 Managed Services (1,120 ) (526 ) (1,717 ) (123 ) Total segment operating income 1,064 962 3,326 3,872 Unallocated general and administrative expenses (2,315 ) (1,814 ) (7,628 ) (6,080 ) Interest, net 14 160 320 491 Gain (loss) on sale of assets (15 ) 4 (393 ) 12 Equity income of joint venture — — 94 95 Fair value adjustment to notes receivable (1,595 ) — (1,595 ) — Other income (loss) 763 255 1,345 341 Loss before income taxes $ (2,084 ) $ (433 ) $ (4,531 ) $ (1,269 ) (In thousands) September 30, 2015 December 31, 2014 Identifiable assets Systems Integration $ 50,567 $ 64,798 Managed Services 19,064 25,272 Total $ 69,631 $ 90,070 Summary by Geographical Area Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Net revenue United States $ 15,442 $ 14,429 $ 43,435 $ 44,627 China 4,936 3,616 11,872 9,627 Latin America 294 1,120 2,739 4,254 Canada 1,499 1,415 3,810 4,305 Mexico 559 793 1,938 2,075 Europe 447 556 1,219 898 Asia (excluding China) 135 677 200 833 Other 200 58 486 93 Total $ 23,512 $ 22,664 $ 65,699 $ 66,712 (In thousands) September 30, 2015 December 31, 2014 Identifiable assets United States $ 38,646 $ 61,159 Canada 23,913 18,849 China 5,100 7,002 Asia (excluding China) 1,972 3,060 Total $ 69,631 $ 90,070 Intersegment sales have been recorded at amounts approximating market. Identifiable assets by geographical area are based on location of facilities. Net sales by geographical area are based on destination of sales.

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and all majority owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America for annual reporting purposes or those made in the Company’s Annual Report on Form 10-K. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year-ended December 31, 2014. The condensed consolidated balance sheet as of December 31, 2014 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of trends or results expected for a full year.
Use of Management Estimates	Use of Management Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods.
Fair Value of Financial and Derivative Instruments	Fair Value of Financial and Derivative Instruments The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: ● Level 1 - inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities ● Level 2 - inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly ● Level 3 - inputs to the valuation techniques are unobservable for the assets or liabilities The following table presents the Company’s financial assets and liabilities measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall. Fair Values Measured on a Recurring Basis at September 30, 2015: Level 1 Level 2 Level 3 Total $ in thousands Cash and cash equivalents $ 24,749 $ — $ — $ 24,749 Note Receivable $ — $ — $ 1,669 $ 1,669 Fair Values Measured on a Recurring Basis at December 31, 2014: Level 1 Level 2 Level 3 Total $ in thousands Cash and cash equivalents $ 22,491 $ — $ — $ 22,491 Note Receivable $ — $ — $ 2,985 $ 2,985 Quantitative information about the Company’s level 3 fair value measurements at September 30, 2015 is set forth below: $ in thousands Fair Value at 9/30/2015 Valuation Technique Unobservable input Range Note Receivable $ 1,669 Discounted cash flow Probability of default 47 % Discount rate 18 % The notes receivable are recorded at estimated fair value at September 30, 2015 and accrue interest at a rate of 15% per annum. During the quarter ended September 30, 2015, new information became available regarding the ability of the debtor to repay the interest on the notes receivable which caused the Company to change the probability of default used in the discounted cash flow valuation from 0% to 47%. This resulted in a reduction to the fair value of notes receivable of $1.6 million during the three and nine months ended September 30, 2015. The significant unobservable inputs used in the fair value measurement of the Company’s note receivable are discount rate and probability of default in the event of default. Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) fair value measurement. The following table reconciles the beginning and ending balance of the Company’s Note Receivable fair value: Nine months ended September 30, 2015 2014 $ in thousands Note Receivable balance, beginning of period $ 2,985 $ 2,497 Interest income accrued 279 358 Fair value adjustment (1,595 ) — Note Receivable balance, end of period $ 1,669 $ 2,855 The carrying values of all other financial assets and liabilities including accounts receivable, accounts payable and accrued expenses reported in the consolidated balance sheets equal or approximate their fair values due to the short-term nature of these instruments. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which includes non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). During the nine months ended September 30, 2015 the Company measured a portion of its intangible assets at fair value as discussed further in footnote 5.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The guidance was originally effective for the Company beginning January 1, 2017. However, in July 2015, the FASB approved a one year deferral of the update, resulting in an effective date of January 1, 2018 for the Company. An entity may adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the ASU. Early adoption is not permitted. The Company is currently evaluating the potential impact of adopting this guidance and has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, “Simplifying the Measurement of Inventory” (“ASU 2015-11”). ASU 2015-11 requires an entity utilizing the FIFO inventory method to change their measurement principle for inventory changes from the lower of cost or market to lower of cost and net realizable value. The guidance is effective for the Company beginning January 1, 2017. An entity must adopt this ASU prospectively and early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance and has not determined the effect of the standard on its ongoing financial reporting.

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Schedule of Fair Value Measured Financial Assets and Liabilities	Fair Values Measured on a Recurring Basis at September 30, 2015: Level 1 Level 2 Level 3 Total $ in thousands Cash and cash equivalents $ 24,749 $ — $ — $ 24,749 Note Receivable $ — $ — $ 1,669 $ 1,669 Fair Values Measured on a Recurring Basis at December 31, 2014: Level 1 Level 2 Level 3 Total $ in thousands Cash and cash equivalents $ 22,491 $ — $ — $ 22,491 Note Receivable $ — $ — $ 2,985 $ 2,985
Summary of Quantitative Information About Company's Level 3 Fair Value Measurements	Quantitative information about the Company’s level 3 fair value measurements at September 30, 2015 is set forth below: $ in thousands Fair Value at 9/30/2015 Valuation Technique Unobservable input Range Note Receivable $ 1,669 Discounted cash flow Probability of default 47 % Discount rate 18 %
Summary of Notes Receivable Reconciliation	The following table reconciles the beginning and ending balance of the Company’s Note Receivable fair value: Nine months ended September 30, 2015 2014 $ in thousands Note Receivable balance, beginning of period $ 2,985 $ 2,497 Interest income accrued 279 358 Fair value adjustment (1,595 ) — Note Receivable balance, end of period $ 1,669 $ 2,855

Loss Per Common Share (Tables)

Loss Per Common Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Schedule of Loss Per Share Basic and Diluted	The following table provides the reconciliation between basic and diluted loss per share: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2015 2014 2015 2014 Basic loss per share: Loss applicable to common stock $ (3,201 ) $ (109 ) $ (16,284 ) $ (322 ) Basic weighted average common shares outstanding 14,164 14,086 14,122 14,052 Basic loss per share $ (0.23 ) $ (0.01 ) $ (1.15 ) $ (0.02 ) Diluted loss per share: Loss applicable to common stock $ (3,201 ) $ (109 ) $ (17,344 ) $ (322 ) Basic weighted average common shares outstanding 14,164 14,086 14,122 14,052 Dilutive effect of stock options and restricted stock awards — — — — Dilutive weighted average common shares outstanding 14,164 14,086 14,122 14,052 Diluted loss per share $ (0.23 ) $ (0.01 ) $ (1.15 ) $ (0.02 )

Warranty Reserves (Tables)

Warranty Reserves (Tables)	9 Months Ended
	Sep. 30, 2015
Product Warranties Disclosures [Abstract]
Schedule of Product Warranty Liability	The following table summarizes warranty activity for the three and nine months ended September 30, 2015 and 2014: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Warranty accrual at beginning of period $ 310 $ 456 $ 423 $ 662 Charged to expense 130 78 468 166 Amounts written off, net of recoveries (144 ) (216 ) (595 ) (505 ) Foreign currency adjustment (15 ) (2 ) (15 ) (7 ) Warranty accrual at end of period $ 281 $ 316 $ 281 $ 316

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	Intangible assets consisted of the following at September 30, 2015: Useful life Gross Accumulated amortization Net (Years) ( in thousands) Intangible assets subject to amortization: Customer relationships 4-9 $ 1,404 $ (1,404 ) $ — Trademarks 3 182 (182 ) — Product Formulation 10 457 (193 ) 264 Total $ 2,043 $ (1,779 ) $ 264 Intangible assets consisted of the following at December 31, 2014: Useful life Gross Accumulated amortization Net (Years) ( in thousands) Intangible assets subject to amortization: Customer relationships 4-9 $ 1,556 $ (1,538 ) $ 18 Trademarks 3 210 (210 ) — Software 3 905 (144 ) 761 Software in development 3 16 — 16 Product Formulation 10 526 (153 ) 373 Total $ 3,213 $ (2,045 ) $ 1,168
Schedule of Intangible Assets Future Amortization Expense	The following table shows the Company’s estimated future amortization expense related to intangible assets for the next five years. Amount (in thousands) Remainder 2015 $ 20 2016 65 2017 52 2018 42 2019 31 Thereafter 54

Goodwill (Tables)

Goodwill (Tables)	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Summary of Changes in Carrying Amount of Goodwill	The following represents a summary of changes in the Company’s carrying amount of goodwill for the quarter ended September 30, 2015: (in thousands) Balance as of December 31, 2014 $ 1,029 Foreign currency translation (134 ) Balance as of September 30, 2015 $ 895

Restructuring Activities (Table

Restructuring Activities (Tables)	9 Months Ended
	Sep. 30, 2015
Restructuring and Related Activities [Abstract]
Schedule of Beginning and Ending Restructuring Balance Included in Accrued Expenses	The following table reconciles the beginning and ending restructuring balance for the nine months ended September 30, 2015, which is included in accrued expenses: 2015 Strategic Initiative 2013 Convergent Related Severance Total Restructuring ( in thousands) Accrued liability at beginning of period $ - $ 187 $ 187 Lease termination expense 219 - 219 Lease termination paid (41 ) - (41 ) Severance expense 695 - 695 Severance paid (447 ) (160 ) (607 ) Accrued liability at end of period $ 426 $ 27 $ 453 The following table reconciles the beginning and ending restructuring balance for the three months ended September 30, 2015, which is included in accrued expenses: 2015 Strategic Initiative 2013 Convergent Related Severance Total Restructuring ( in thousands) Accrued liability at beginning of period $ 706 $ 58 $ 764 Lease termination expense (94 ) - (94 ) Lease termination paid (41 ) - (41 ) Severance paid (145 ) (31 ) (176 ) Accrued liability at end of period $ 426 $ 27 $ 453

Stock Compensation (Tables)

Stock Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Stock Options Activities	The following table summarizes the Company’s activities with respect to its stock options for the nine months ended September 30, 2015 as follows: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic (in thousands) Outstanding at December 31, 2014 181,500 $ 5.56 6.77 $ 13 Granted — — Exercised — — Forfeited (99,000 ) 6.53 Outstanding at September 30, 2015 82,500 $ 4.39 6.55 $ 26 Exercisable at September 30, 2015 60,000 $ 4.41 6.52 $ 9
Summary of Stock Options Outstanding and Exercisable	The following table summarizes information about stock options outstanding and exercisable at September 30, 2015: Options Outstanding at September 30, 2015 Options Exercisable at September 30, 2015 Range of option exercise price Number of options Weighted average remaining contractual life Weighted average exercise price per option Number of options Weighted average remaining contractual life Weighted average exercise price per option $3.55 to 4.70 82,500 6.55 $ 4.39 60,000 6.52 $ 4.41
Summary of Restricted Stock Activity	The following table summarizes restricted stock activity for the nine months ended September 30, 2015: Number of Restricted Stock Shares Weighted Average Grant Price Fair Value Non-vested at December 31, 2014 264,793 $ 3.93 Granted 80,708 4.42 Shares vested (86,317 ) 4.12 Shares forfeited (110,027 ) 3.84 Non-vested at September 30, 2015 149,158 $ 4.14

Foreign Exchange Contracts (Tab

Foreign Exchange Contracts (Tables)	9 Months Ended
	Sep. 30, 2015
Foreign Currency [Abstract]
Schedule of Realized and Unrealized Gains from Foreign Currency Forward Exchange Contracts	The Company recognized in other income, the following realized and unrealized gains from foreign currency forward exchange contracts: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) Classification 2015 2014 2015 2014 Foreign exchange forward contracts Other Income (Loss) $ — $ — $ — $ (145 )

Commitments, Contingencies an28

Commitments, Contingencies and Concentrations (Tables)	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Operating Leases Future Minimium Lease Payments	The Company’s future minimum lease payments for leases at September 30, 2015 are as follows: Capital Leases Operating Leases (In thousands) Remainder 2015 $ 80 $ 168 2016 319 467 2017 290 356 2018 248 340 2019 130 343 Thereafter — 968 Total minimum lease payments 1,067 $ 2,642 Less: Amount representing interest 58 Present value of minimum lease payments 1,009 Less: Current maturities 303 Capital lease obligations, net of current portion $ 706

Business Segment Information (T

Business Segment Information (Tables)	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
Schedule of Segment Reporting Information by Segment	Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Net revenue Systems Integration $ 14,814 $ 15,725 $ 42,755 $ 44,500 Managed Services 8,992 7,170 23,836 23,142 Total segment revenue 23,806 22,895 66,591 67,642 Eliminations (294 ) (231 ) (892 ) (930 ) Total net revenue $ 23,512 $ 22,664 $ 65,699 $ 66,712 Operating Income (Loss) Systems Integration $ 2,184 $ 1,488 $ 5,043 $ 3,995 Managed Services (1,120 ) (526 ) (1,717 ) (123 ) Total segment operating income 1,064 962 3,326 3,872 Unallocated general and administrative expenses (2,315 ) (1,814 ) (7,628 ) (6,080 ) Interest, net 14 160 320 491 Gain (loss) on sale of assets (15 ) 4 (393 ) 12 Equity income of joint venture — — 94 95 Fair value adjustment to notes receivable (1,595 ) — (1,595 ) — Other income (loss) 763 255 1,345 341 Loss before income taxes $ (2,084 ) $ (433 ) $ (4,531 ) $ (1,269 )
Reconciliation of Assets from Segment to Consolidated	(In thousands) September 30, 2015 December 31, 2014 Identifiable assets Systems Integration $ 50,567 $ 64,798 Managed Services 19,064 25,272 Total $ 69,631 $ 90,070
Schedule of Segment Reporting Information by Geographic Area	Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Net revenue United States $ 15,442 $ 14,429 $ 43,435 $ 44,627 China 4,936 3,616 11,872 9,627 Latin America 294 1,120 2,739 4,254 Canada 1,499 1,415 3,810 4,305 Mexico 559 793 1,938 2,075 Europe 447 556 1,219 898 Asia (excluding China) 135 677 200 833 Other 200 58 486 93 Total $ 23,512 $ 22,664 $ 65,699 $ 66,712
Reconciliation of Assets from Geographic Area	(In thousands) September 30, 2015 December 31, 2014 Identifiable assets United States $ 38,646 $ 61,159 Canada 23,913 18,849 China 5,100 7,002 Asia (excluding China) 1,972 3,060 Total $ 69,631 $ 90,070

Summary of Significant Accoun30

Summary of Significant Accounting Policies (Details Narrative) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2015USD ($)	Jun. 30, 2015	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)
Accounting Policies [Abstract]
Notes receivable interest rate				0.15
Fair value of notes receivable	$ 1,595			$ 1,595
Percentage of discounted cash flow valuation	47.00%	0.00%

Summary of Significant Accoun31

Summary of Significant Accounting Policies - Schedule of Fair Value Measured Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Cash and cash equivalents	$ 24,749	$ 22,491
Note receivable	1,669	2,985
Level 1 [Member]
Cash and cash equivalents	$ 24,749	$ 22,491
Note receivable
Level 2 [Member]
Cash and cash equivalents
Note receivable
Level 3 [Member]
Cash and cash equivalents
Note receivable	$ 1,669	$ 2,985

Summary of Significant Accoun32

Summary of Significant Accounting Policies - Summary of Quantitative Information About Company's Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Note receivable	$ 1,669		$ 1,669	$ 2,985
Probability of default	47.00%	0.00%
Level 3 [Member]
Note receivable	$ 1,669		$ 1,669	$ 2,985
Valuation Technique			Discounted cash flow
Probability of default			47.00%
Discount rate			18.00%

Summary of Significant Accoun33

Summary of Significant Accounting Policies - Summary of Notes Receivable Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accounting Policies [Abstract]
Note Receivable balance, beginning of period			$ 2,985	$ 2,497
Interest income accrued			279	$ 358
Fair value adjustment	$ (1,595)		(1,595)
Note Receivable balance, end of period	$ 1,669	$ 2,855	$ 1,669	$ 2,855

Loss Per Common Share (Details

Loss Per Common Share (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock Option [Member]
Anti dilutive securities excluded from computation of earnings per share	20,625	196,500	124,125	196,500
Restricted Stock Units [Member]
Anti dilutive securities excluded from computation of earnings per share	56,873	198,892	88,877	222,448

Loss Per Common Share - Schedul

Loss Per Common Share - Schedule of Loss Per Share Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Loss applicable to common stock	$ (3,201)	$ (109)	$ (16,284)	$ (322)
Basic weighted average common shares outstanding	14,164	14,086	14,122	14,052
Basic loss per share	$ (0.23)	$ (0.01)	$ (1.15)	$ (0.02)
Loss applicable to common stock	$ (3,201)	$ (109)	$ (17,344)	$ (322)
Dilutive effect of stock options and restricted stock awards
Dilutive weighted average common shares outstanding	14,164	14,086	14,122	14,052
Diluted loss per share	$ (0.23)	$ (0.01)	$ (1.15)	$ (0.02)

Warranty Reserves (Details Narr

Warranty Reserves (Details Narrative)	9 Months Ended
	Sep. 30, 2015
Product Warranties Disclosures [Abstract]
Product warranty period for sold equipment	1 year

Warranty Reserves - Schedule of

Warranty Reserves - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Extended Product Warranty Disclosure [Abstract]
Warranty accrual at beginning of period	$ 310	$ 456	$ 423	$ 662
Charged to expense	130	78	468	166
Amounts written off, net of recoveries	(144)	(216)	(595)	(505)
Foreign currency adjustment	(15)	(2)	(15)	(7)
Warranty accrual at end of period	$ 281	$ 316	$ 281	$ 316

Intangible Assets (Details Narr

Intangible Assets (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 300	$ 200
Impairment charge	$ 638

Intangible Assets - Schedule of

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Intangible assets, Gross	$ 2,043	$ 3,213
Intangible assets, Accumulated amortization	(1,779)	(2,045)
Intangible assets, Net	264	1,168
Customer Relationships [Member]
Intangible assets, Gross	1,404	1,556
Intangible assets, Accumulated amortization	$ (1,404)	(1,538)
Intangible assets, Net		$ 18
Customer Relationships [Member] | Minimum [Member]
Intangible assets, Useful life	4 years	4 years
Customer Relationships [Member] | Maximum [Member]
Intangible assets, Useful life	9 years	9 years
Trademarks [Member]
Intangible assets, Useful life	3 years	3 years
Intangible assets, Gross	$ 182	$ 210
Intangible assets, Accumulated amortization	$ (182)	$ (210)
Intangible assets, Net
Production Formulation [Member]
Intangible assets, Useful life	10 years	10 years
Intangible assets, Gross	$ 457	$ 526
Intangible assets, Accumulated amortization	(193)	(153)
Intangible assets, Net	$ 264	$ 373
Software [Member]
Intangible assets, Useful life		3 years
Intangible assets, Gross		$ 905
Intangible assets, Accumulated amortization		(144)
Intangible assets, Net		$ 761
Software Development [Member]
Intangible assets, Useful life		3 years
Intangible assets, Gross		$ 16
Intangible assets, Accumulated amortization
Intangible assets, Net		$ 16

Intangible Assets - Schedule 40

Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) $ in Thousands	Sep. 30, 2015USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder 2,015	$ 20
2,016	65
2,017	52
2,018	42
2,019	31
Thereafter	$ 54

Goodwill - Summary of Changes i

Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Balance	$ 1,029
Foreign currency translation	(134)
Balance	$ 895

Restructuring Activities (Detai

Restructuring Activities (Details Narrative) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2013
Severance costs		$ 695
Lease termination costs	$ (94)	219
2015 Strategic Initiative [Member]
Severance costs		695
Lease termination costs	$ (94)	219
2015 Strategic Initiative [Member] | Administrative Expenses [Member]
Severance costs		700
Lease termination costs		$ 200
Expected To Incur In Relation To Integration [Member] | Convergent Related [Member]
Severance costs			$ 1,500

Restructuring Activities - Sche

Restructuring Activities - Schedule of Beginning and Ending Restructuring Balance Included in Accrued Expenses (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Accrued liability at beginning of period	$ 764	$ 187
Lease termination expense	(94)	219
Lease termination paid	(41)	(41)
Severance expense		695
Severance paid	(176)	(607)
Accrued liability at end of period	453	$ 453
2015 Strategic Initiative [Member]
Accrued liability at beginning of period	706
Lease termination expense	(94)	$ 219
Lease termination paid	(41)	(41)
Severance expense		695
Severance paid	(145)	(447)
Accrued liability at end of period	426	426
2013 Convergent Related Severance [Member]
Accrued liability at beginning of period	$ 58	$ 187
Lease termination expense
Lease termination paid
Severance expense
Severance paid	$ (31)	$ (160)
Accrued liability at end of period	$ 27	$ 27

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Tax Disclosure [Abstract]
Valuation allowance	$ 7,900		$ 7,900
Increase invaluation allowance	$ 1,300
Effective tax rate	53.60%	74.80%	259.40%	74.60%
Income tax examination description			The Company currently has an exam initiated for Federal purposes for the 2011 fiscal year. The Company has examinations not yet initiated for Federal purposes for fiscal years 2012, 2013, and 2014. In most cases, the Company has examinations open for State or local jurisdictions based on the particular jurisdiction’s statute of limitations.

Stock Compensation (Details Nar

Stock Compensation (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based compensation expense			$ 269	$ 292
Number of shares granted
Year 2010 Plan [Member]
Number of shares reserved for issuance	1,600,000		1,600,000
Non-Employee Plan [Member]
Number of shares reserved for issuance	200,000		200,000
Selling, General and Administrative Expenses [Member]
Share-based compensation expense	$ 100	$ 100	$ 300	$ 300
Restricted Stock [Member]
Total unrecognized compensation cost related to stock option awards	$ 500		$ 500
Compensation cost expected to be recognized, weighted average period			2 years 1 month 6 days
Restricted Stock [Member] | Year 2010 Plan [Member]
Number of shares granted	0		27,500
Restricted Stock [Member] | Non-Employee Plan [Member]
Number of shares granted			53,208
Employee Stock Option [Member]
Total unrecognized compensation cost related to stock option awards	$ 16		$ 16
Compensation cost expected to be recognized, weighted average period			3 months 18 days

Stock Compensation - Summary of

Stock Compensation - Summary of Stock Options Activities (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of Options, Outstanding beginning balance	181,500
Number of Options, Granted
Number of Options, Exercised
Number of Options, Forfeited	(99,000)
Number of Options, Outstanding ending balance	82,500
Number of Options, Exercisable	60,000
Weighted Average Exercise Price Per Share, Outstanding beginning balance | $ / shares	$ 5.56
Weighted Average Exercise Price Per Share, Granted | $ / shares
Weighted Average Exercise Price Per Share, Exercised | $ / shares
Weighted Average Exercise Price Per Share, Forfeited | $ / shares	$ 6.53
Weighted Average Exercise Price Per Share, Outstanding ending balance | $ / shares	4.39
Weighted Average Exercise Price Per Share, Exercisable | $ / shares	$ 4.41
Weighted Average Remaining Contractual Term, beginning balance	6 years 9 months 7 days
Weighted Average Remaining Contractual Term, ending balance	6 years 6 months 18 days
Weighted Average Remaining Contractual Term, Exercisable	6 years 6 months 7 days
Aggregate Intrinsic Value, beginning balance | $	$ 13
Aggregate Intrinsic Value, ending balance | $	26
Aggregate Intrinsic Value, Exercisable | $	$ 9

Stock Compensation - Summary 47

Stock Compensation - Summary of Stock Options Outstanding and Exercisable (Details)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Range of option exercise price, lower limit	$ 3.55
Range of option exercise price, upper limit	$ 4.70
Number of Options Outstanding | shares	82,500
Options Outstanding, Weighted average remaining contractual life	6 years 6 months 18 days
Options Outstanding, Weighted average exercise price per option	$ 4.39
Number of Options Exercisable | shares	60,000
Options Exercisable, Weighted average remaining contractual life	6 years 6 months 7 days
Options Exercisable, Weighted average exercise price per option	$ 4.41

Stock Compensation - Summary 48

Stock Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock [Member]	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Number of Restricted Stock Shares, Non-vested beginning balance	264,793
Number of Restricted Stock Shares, Granted	80,708
Number of Restricted Stock Shares, vested	(86,317)
Number of Restricted Stock Shares, forfeited	(110,027)
Number of Restricted Stock Shares, Non-vested beginning balance	149,158
Weighted Average Grant Price Fair Value, Non-vested beginning balance | $ / shares	$ 3.93
Weighted Average Grant Price Fair Value, Granted | $ / shares	4.42
Weighted Average Grant Price Fair Value, Vested | $ / shares	4.12
Weighted Average Grant Price Fair Value, Forfeited | $ / shares	3.84
Weighted Average Grant Price Fair Value, Non-vested ending balance | $ / shares	$ 4.14

Foreign Exchange Contracts - Sc

Foreign Exchange Contracts - Schedule of Realized and Unrealized Gains from Foreign Currency Forward Exchange Contracts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Foreign Currency [Abstract]
Classification			Other Income (Loss)
Foreign exchange forward contracts				$ (145)

Commitments, Contingencies an50

Commitments, Contingencies and Concentrations (Details Narrative)	3 Months Ended	9 Months Ended
	Sep. 30, 2015Customer	Sep. 30, 2015Customer
Concentration risk, number of customers	10	10
Operating Lease Expiration Date		through 2,023
Net Revenue [Member] | Top Ten Customers [Member]
Concentration risk, percentage	47.80%	46.90%
Accounts Receivable [Member] | Top Ten Customers [Member]
Concentration risk, percentage		36.60%

Commitments, Contingencies an51

Commitments, Contingencies and Concentrations - Schedule of Operating Leases Future Minimium Lease Payments (Details) $ in Thousands	Sep. 30, 2015USD ($)
Commitments and Contingencies Disclosure [Abstract]
Capital Leases, Remainder 2015	$ 80
Capital Leases, 2016	319
Capital Leases, 2017	290
Capital Leases, 2018	248
Capital Leases, 2019	$ 130
Capital Leases, Thereafter
Total minimum Capital lease payments	$ 1,067
Less: Amount representing interest	58
Present value of minimum lease payments	1,009
Less: Current maturities	303
Capital lease obligations, net of current portion	706
Operating Leases, Remainder 2015	168
Operating Leases, 2016	467
Operating Leases, 2017	356
Operating Leases, 2018	340
Operating Leases, 2019	343
Operating Leases, Thereafter	968
Total minimum Operationg lease payments	$ 2,642

Business Segment Information (D

Business Segment Information (Details Narrative)	9 Months Ended
	Sep. 30, 2015Segment
Segment Reporting [Abstract]
Number of Operating Segments	2

Business Segment Information -

Business Segment Information - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Total segment revenue	$ 23,512	$ 22,664	$ 65,699	$ 66,712
Net Revenue	23,512	22,664	65,699	66,712
Operating Income (Loss)	(1,266)	(848)	(4,695)	(2,196)
Unallocated general and administrative expenses	$ (4,032)	$ (3,066)	(11,893)	(9,781)
Equity income of joint venture			94	$ 95
Fair value adjustment to notes receivable	$ (1,595)		(1,595)
Other income (loss)	763	$ 255	1,345	$ 341
Loss before income taxes	(2,084)	(433)	(4,531)	(1,269)
Business Segments [Member]
Segment Reporting Information [Line Items]
Total segment revenue	23,806	22,895	66,591	67,642
Net Revenue	23,806	22,895	66,591	67,642
Operating Income (Loss)	1,064	962	3,326	3,872
Interest, net	14	160	320	491
Gain (loss) on sale of assets	$ (15)	$ 4	(393)	12
Equity income of joint venture			94	$ 95
Fair value adjustment to notes receivable	$ (1,595)		(1,595)
Other income (loss)	763	$ 255	1,345	$ 341
Loss before income taxes	(2,084)	(433)	(4,531)	(1,269)
Systems Integration [Member] | Business Segments [Member]
Segment Reporting Information [Line Items]
Total segment revenue	14,814	15,725	42,755	44,500
Net Revenue	14,814	15,725	42,755	44,500
Operating Income (Loss)	2,184	1,488	5,043	3,995
Managed Services [Member] | Business Segments [Member]
Segment Reporting Information [Line Items]
Total segment revenue	8,992	7,170	23,836	23,142
Net Revenue	8,992	7,170	23,836	23,142
Operating Income (Loss)	(1,120)	(526)	(1,717)	(123)
Material Reconciling Items [Member] | Business Segments [Member]
Segment Reporting Information [Line Items]
Eliminations	(294)	(231)	(892)	(930)
Unallocated general and administrative expenses	$ (2,315)	$ (1,814)	$ (7,628)	$ (6,080)

Business Segment Information 54

Business Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Identifiable assets	$ 69,631	$ 90,070
Business Segments [Member]
Identifiable assets	69,631	90,070
Systems Integration [Member] | Business Segments [Member]
Identifiable assets	50,567	64,798
Managed Services [Member] | Business Segments [Member]
Identifiable assets	$ 19,064	$ 25,272

Schedule of Segment Reporting I

Schedule of Segment Reporting Information by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net revenue	$ 23,512	$ 22,664	$ 65,699	$ 66,712
United States [Member]
Net revenue	15,442	14,429	43,435	44,627
China [Member]
Net revenue	4,936	3,616	11,872	9,627
Latin America [Member]
Net revenue	294	1,120	2,739	4,254
Canada [Member]
Net revenue	1,499	1,415	3,810	4,305
Mexico [Member]
Net revenue	559	793	1,938	2,075
Europe [Member]
Net revenue	447	556	1,219	898
Asia Excluding China [Member]
Net revenue	135	677	200	833
Other Countries [Member]
Net revenue	$ 200	$ 58	$ 486	$ 93

Reconciliation of Assets from G

Reconciliation of Assets from Geographic Area (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Identifiable assets	$ 69,631	$ 90,070
United States [Member]
Identifiable assets	38,646	61,159
Canada [Member]
Identifiable assets	23,913	18,849
China [Member]
Identifiable assets	5,100	7,002
Asia Excluding China [Member]
Identifiable assets	$ 1,972	$ 3,060