Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 01, 2016 | |
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, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 14,250,970 | |
Trading Symbol | BTN | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 13,834 | $ 17,862 |
Accounts receivable (net of allowance for doubtful accounts of $1,117 and $1,207, respectively) | 12,501 | 11,032 |
Inventories: | ||
Finished goods, net | 6,307 | 5,651 |
Work in process | 669 | 190 |
Raw materials and components, net | 1,127 | 1,351 |
Total inventories, net | 8,103 | 7,192 |
Recoverable income taxes | 539 | 85 |
Other current assets | 1,757 | 2,556 |
Current assets held for sale | 1,684 | 7,219 |
Total current assets | 38,418 | 45,946 |
Property, plant and equipment (net of accumulated depreciation of $8,326 and $6,578, respectively) | 11,284 | 11,703 |
Marketable securities | 1,967 | 2,101 |
Equity method investments | 7,811 | 4,001 |
Intangible assets, net | 847 | 235 |
Goodwill | 910 | 863 |
Notes receivable | 1,669 | 1,669 |
Other assets | 68 | 281 |
Noncurrent assets held for sale | 65 | |
Total assets | 62,974 | 66,864 |
Current liabilities: | ||
Accounts payable | 5,236 | 4,948 |
Accrued expenses | 4,131 | 3,583 |
Customer deposits/deferred revenue | 3,375 | 3,550 |
Income tax payable | 82 | 1,291 |
Current liabilities held for sale | 606 | 4,395 |
Total current liabilities | 13,430 | 17,767 |
Deferred revenue | 1,231 | 1,288 |
Deferred income taxes | 1,548 | 1,716 |
Other accrued expenses, net of current portion | 811 | 1,581 |
Total liabilities | 17,020 | 22,352 |
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 17,023 and 16,925 shares at September 30, 2016 and December 31, 2015, respectively; 14,255 and 14,191 shares outstanding at September 30, 2016 and December 31, 2015, respectively | 169 | 169 |
Additional paid-in capital | 39,614 | 39,157 |
Accumulated other comprehensive income: | ||
Foreign currency translation | (4,901) | (6,229) |
Postretirement benefit obligations | 74 | 74 |
Unrealized gain on available-for-sale securities of equity method investment | 62 | |
Retained earnings | 29,345 | 29,595 |
Stockholders' Equity Before Treasury Stock | 64,363 | 62,766 |
Less 2,768 and 2,734 of common shares in treasury, at cost at September 30, 2016 and December 31, 2015 | (18,409) | (18,254) |
Total stockholders' equity | 45,954 | 44,512 |
Total liabilities and stockholders' equity | $ 62,974 | $ 66,864 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,117 | $ 1,207 |
Property, plant and equipment, accumulated depreciation | $ 8,326 | $ 6,578 |
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | ||
Common stock par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 17,023,000 | 16,925,000 |
Common stock, shares outstanding | 14,255,000 | 14,191,000 |
Common shares in treasury, shares | 2,768,000 | 2,734,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Net product sales | $ 13,071 | $ 13,732 | $ 39,668 | $ 39,750 |
Net service revenues | 5,597 | 6,014 | 16,672 | 16,976 |
Total net revenues | 18,668 | 19,746 | 56,340 | 56,726 |
Cost of products sold | 11,172 | 11,693 | 31,210 | 33,834 |
Cost of services | 3,119 | 4,273 | 9,368 | 11,362 |
Total cost of revenues | 14,291 | 15,966 | 40,578 | 45,196 |
Gross profit | 4,377 | 3,780 | 15,762 | 11,530 |
Selling and administrative expenses: | ||||
Selling | 1,128 | 1,015 | 3,302 | 3,948 |
Administrative | 2,992 | 3,739 | 9,128 | 11,194 |
Total selling and administrative expenses | 4,120 | 4,754 | 12,430 | 15,142 |
Gain (loss) on the sale or disposal of assets | (14) | 1 | (392) | |
Income (loss) from operations | 257 | (988) | 3,333 | (4,004) |
Other income (expense): | ||||
Interest income | 59 | 21 | 99 | 351 |
Interest expense | (41) | (12) | (81) | (43) |
Foreign currency transaction gain (expense) | 23 | 765 | (982) | 1,321 |
Change in value of marketable securities | (34) | (400) | ||
Excess distribution from joint venture | 502 | |||
Fair value adjustment to notes receivable | (1,595) | (1,595) | ||
Other income (expense), net | (7) | (2) | 36 | 22 |
Total other income (expense) | (823) | (826) | 56 | |
Earnings (loss) before income taxes and equity method investment income | 257 | (1,811) | 2,507 | (3,948) |
Income tax expense | (748) | (669) | (2,085) | (11,365) |
Equity method investment income | 29 | 70 | 94 | |
Net earnings (loss) from continuing operations | (462) | (2,480) | 492 | (15,219) |
Net loss from discontinued operations, net of tax | (8) | (721) | (742) | (1,065) |
Net loss | $ (470) | $ (3,201) | $ (250) | $ (16,284) |
Net earnings (loss) per share - basic | ||||
Net earnings (loss) from continuing operations | $ (0.03) | $ (0.18) | $ 0.03 | $ (1.08) |
Net loss from discontinued operations | 0 | (0.05) | (0.05) | (0.07) |
Net loss | (0.03) | (0.23) | (0.02) | (1.15) |
Net earnings (loss) per share - diluted | ||||
Net earnings (loss) from continuing operations | (0.03) | (0.18) | 0.03 | (1.08) |
Net loss from discontinued operations | 0 | (0.05) | (0.05) | (0.07) |
Net loss | $ (0.03) | $ (0.23) | $ (0.02) | $ (1.15) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (470) | $ (3,201) | $ (250) | $ (16,284) |
Currency translation adjustment: | ||||
Unrealized net change arising during period | (297) | (1,965) | 1,328 | (2,933) |
Unrealized gain on available-for-sale securities of equity method investment | 41 | 62 | ||
Other comprehensive gain (loss) | (256) | (1,965) | 1,390 | (2,933) |
Comprehensive income (loss) | $ (726) | $ (5,166) | $ 1,140 | $ (19,217) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (250) | $ (16,284) |
Net loss from discontinued operations, net of tax | (742) | (1,065) |
Net earnings (loss) from continuing operations | 492 | (15,219) |
Adjustments to reconcile net earnings (loss) from continuing operations to net cash (used in) provided by operating activities: | ||
Provision for doubtful accounts | 1 | 92 |
Provision for obsolete inventory | (101) | 1,645 |
Provision for warranty | 260 | 434 |
Depreciation and amortization | 1,658 | 1,622 |
Fair value adjustment to notes receivable | 1,595 | |
Impairment of intangibles | 638 | |
Excess distribution from joint venture | (502) | |
Equity method investment income | (70) | (94) |
Change in value of marketable securities | 400 | |
(Gain) loss on disposal or transfer of assets | (1) | 392 |
Deferred income taxes | (195) | 8,374 |
Share-based compensation expense | 357 | 269 |
Changes in operating assets and liabilities: | ||
Accounts, unbilled and notes receivable | (439) | 6,074 |
Inventories | (733) | (81) |
Other current assets | 113 | (62) |
Accounts payable | (205) | (1,009) |
Accrued expenses | 348 | (644) |
Customer deposits/deferred revenue | (233) | (438) |
Income taxes payable | (1,708) | 1,425 |
Other assets | 33 | (62) |
Net cash flows from operating activities - continuing operations | (525) | 4,951 |
Net cash flows from operating activities - discontinued operations | (1,624) | (359) |
Net cash (used in) provided by operating activities | (2,149) | 4,592 |
Cash flows from investing activities: | ||
Purchase of equity securities | (4,107) | |
Dividend from equity method investment | 206 | |
Capital expenditures | (1,102) | (1,051) |
Proceeds from sale of assets | 38 | |
Net cash used in investing activities - continuing operations | (5,003) | (1,013) |
Cash flows from financing activities: | ||
Purchase of treasury stock | (155) | |
Proceeds from exercise of stock options | 100 | |
Payments on capital lease obligations | (239) | (14) |
Excess tax benefits from share-based arrangements | 6 | 10 |
Net cash used in financing activities - continuing operations | (288) | (4) |
Effect of exchange rate changes on cash and cash equivalents -continuing operations | 763 | (1,241) |
Effect of exchange rate changes on cash and cash equivalents – discontinued operations | (120) | (78) |
Net (decrease) increase in cash and cash equivalents | (6,797) | 2,256 |
Discontinued operations cash activity included above: | ||
Add: Cash balance included in assets held for sale at beginning of period | 4,208 | 3,190 |
Less: Cash balance included in assets held for sale at end of period | (1,439) | (2,772) |
Cash and cash equivalents at beginning of period | 17,862 | 19,301 |
Cash and cash equivalents at end of period | 13,834 | 21,975 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Capital lease obligations for property and equipment | $ 935 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2016 | |
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, is a holding company with diverse business activities focused on serving the cinema, retail, financial, and government markets. The Company and its wholly owned subsidiaries Strong Westrex, Inc. (SWI), Strong Technical Services, Inc., Strong/MDI Screen Systems, Inc., Strong Westrex (Beijing) Technology Inc. (SWBTI), Convergent Corporation and Convergent Media Systems Corporation (Convergent) design, integrate, and install technology solutions for a broad range of applications; develop and deliver out-of-home messaging, advertising and communications; manufacture projection screens; and provide managed services including monitoring of networked equipment to our customers. The Companys products are distributed to the cinema, retail, financial, and government markets throughout the world. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 2. Discontinued Operations On June 21, 2016, the Company’s Board of Directors approved a plan under which the Company will pursue a sale of the operations conducted by its subsidiaries SWBTI and SWI (the “China Operations”) which has historically been included in the Cinema segment. We expect to complete the sale within the next twelve months. The purpose of the plan is to focus the efforts of the Company on the business units that have opportunities for higher return on invested capital. As part of this plan, the Company incurred charges of $0.9 million in the second quarter of 2016 and zero in the third quarter of 2016, which are included in loss from discontinued operations in the condensed consolidated statements of operations. We reflected the results of the China Operations as discontinued operations for all periods presented. The assets and liabilities of the China Operations have been reclassified as assets and liabilities held for sale in the condensed consolidated balance sheets for all periods presented. On November 4, 2016, the Company sold SWBTI to GABO Filter, Inc. for total proceeds of $0.4 million. As part of this sale the Company expects to record a loss on discontinued operations of approximately $0.3 million in the fourth quarter of 2016. The final loss from discontinued operations related to this sale may differ from this estimate depending on the actual proceeds received and the actual disposition costs incurred. In addition, the Company expects to incur charges of $0.3 million in the fourth quarter related to severance for discontinued operations in conjunction with the sale of SWBTI. The summary comparative financial results of discontinued operations were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Total net revenues 583 3,766 6,440 8,973 Total cost of revenues 436 3,578 6,227 8,605 Total selling and administrative expenses 157 465 863 1,058 Loss from operations of discontinued operations (10 ) (277 ) (650 ) (690 ) Loss before income taxes (8 ) (273 ) (628 ) (677 ) Income tax expense — (448 ) (114 ) (388 ) Net loss from discontinued operations, net of tax $ (8 ) $ (721 ) $ (742 ) $ (1,065 ) The assets and liabilities classified as held for sale reflected in the condensed consolidated balance sheets were as follows (in thousands): September 30, 2016 December 31, 2015 (Unaudited) Current assets: Cash and cash equivalents $ 1,439 $ 4,208 Accounts receivable, net — 327 Total inventories, net — 2,500 Other current assets 245 184 Total current assets held for sale $ 1,684 $ 7,219 Property, plant and equipment, net $ — $ 65 Total noncurrent assets held for sale $ — $ 65 Current liabilities: Accounts payable $ 78 $ 2,421 Accrued expenses 256 516 Customer deposits/deferred revenue 272 1,458 Total current liabilities $ 606 $ 4,395 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. 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 Companys 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 Companys Annual Report on Form 10-K for the fiscal year-ended December 31, 2015. The condensed consolidated balance sheet as of December 31, 2015 was derived from the Companys 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 (U.S. GAAP) 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. Marketable Securities The Companys marketable securities are comprised of investments in the common stock of a publicly traded company. Changes in fair value, based on the market price of the investees stock are recognized in other income in the consolidated statement of operations. The Company uses the fair value option to account for the investment to more appropriately recognize the value of this investment in our consolidated financial statements since the Company does not exert significant influence over the investment, in which case the equity method of accounting has been applied. Marketable securities at fair value were as follows: September 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Marketable securities $ 2,464 $ $ 497 $ 1,967 Equity Method Investments In December 2015, the Company acquired 7.8% ownership in RELM Wireless Corporation (RELM) for $4.0 million and increased its ownership to 8.3% during the nine months ended September 30, 2016 for an additional $0.3 million. RELM is a publicly traded company that designs, manufactures and markets two-way land mobile radios, repeaters, base stations, and related components and subsystems. The Companys Chief Executive Officer is a member of the board of directors of RELM, and controls entities that, when combined with the Companys ownership in RELM, own greater than 20% of RELM, providing the Company with significant influence over RELM, but not controlling interest. As a result of this significant influence, the Company accounts for its investment in RELM under the equity method. The Companys carrying value for RELM was $4.3 million as of September 30, 2016 and the Companys equity method investment income of RELM was $0.2 million during the nine months ended September 30, 2016. Based on quoted market prices, the market value of the Companys ownership in RELM was $6.1 million at September 30, 2016. In May 2016, the Company acquired 31.2% ownership in Itasca Capital Ltd. (Itasca) for $3.5 million and increased its ownership to 32.3% during the nine months ended September 30, 2016 for an additional $0.2 million. Itasca is a publicly traded Canadian company that is an investment vehicle seeking transformative strategic investments. The Companys Chief Executive Officer is a member of the board of directors of Itasca. This board seat, combined with the Companys 32.3% ownership of Itasca, provide the Company with significant influence over Itasca, but not controlling interest. As a result of this significant influence, the Company accounts for its investment in Itasca under the equity method. The Companys carrying value for Itasca was $3.5 million as of September 30, 2016 and the Companys equity method investment loss in Itasca was $0.1 million during the nine months ended September 30, 2016. Based on quoted market prices, the market value of the Companys ownership in Itasca was $4.4 million at September 30, 2016. Fair Value of Financial 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 will be 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 tables present the Companys financial assets 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, 2016: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 13,834 $ $ $ 13,834 Marketable securities $ 1,967 $ $ $ 1,967 Notes receivable $ $ $ 1,669 $ 1,669 Fair values measured on a recurring basis at December 31, 2015: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 17,862 $ $ $ 17,862 Marketable securities $ 2,101 $ $ $ 2,101 Notes receivable $ $ $ 1,669 $ 1,669 Quantitative information about the Companys level 3 fair value measurements at September 30, 2016 is set forth below: Fair Value at 9/30/2016 (in thousands) Valuation Technique Unobservable input Range Notes receivable $ 1,669 Discounted cash flow Probability of default 55 % Discount rate 21 % The notes receivable are recorded at estimated fair value at September 30, 2016. The significant unobservable inputs used in the fair value measurement of the Companys note receivable are discount rate and probability 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 Companys notes receivable fair value: Nine months ended September 30, 2016 2015 (in thousands) Notes receivable balance, beginning of period $ 1,669 $ 2,985 Interest income accrued 279 Fair value adjustment (1,595 ) Notes receivable balance, end of period $ 1,669 $ 1,669 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, 2016, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 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 is effective for the Company beginning January 1, 2018. 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. While the Company has not yet completed its analysis of ASU 2014-09, the Company anticipates a more significant impact on its Digital Media segment, primarily due to the nature of that segments contracts with customers. The Company is currently evaluating adoption methods and the impact of adopting ASU 2014-09 on its consolidated financial statements. The Company anticipates that the adoption may have a material impact on the consolidated financial statements. 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 first in-first out 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 adoption of ASU 2015-11 is not expected to have a material effect on the Companys consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 requires equity investments that do not result in consolidation and are not accounted under the equity method to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entitys other deferred tax assets and modifies certain fair value disclosure requirements. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is not permitted. The adoption of ASU 2016-01 is not expected to have a material effect on the Companys consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases In March 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting, (ASU 2016-07). ASU 2016-07 eliminates the requirement for the Company to retroactively apply the equity method when its increase in ownership interests (or degree of influence) in an investee triggers equity method accounting. This ASU is effective for the Company on January 1, 2017 with early adoption permitted. The Company has adopted ASU 2016-07 and there was no impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation (Topic 718) (ASU 2016-09). ASU 2016-09 simplifies accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This ASU is effective for the Company on January 1, 2017 with early adoption permitted. While the Company has not yet completed its analysis, the adoption of ASU 2016-09 is not expected to have a material effect on the Companys consolidated financial statements. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | 4. Earnings (Loss) Per Common Share Basic earnings (loss) per share has 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 average shares used to compute both basic and diluted earnings (loss) per share: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Weighted average shares outstanding (in thousands): Basic weighted average shares outstanding 14,249 14,164 14,225 14,122 Dilutive effect of stock options and certain non-vested shares of restricted stock Diluted weighted average shares outstanding 14,249 14,164 14,225 14,122 For the three and nine month periods ended September 30, 2016, grants and options to purchase 350,000 and 363,700 shares of common stock respectively were outstanding but were not included in the computation of diluted earnings per share as the options 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, 2016, options and restricted stock units of 65,937 and 85,618, 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, 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 options 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, options and 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. |
Warranty Reserves
Warranty Reserves | 9 Months Ended |
Sep. 30, 2016 | |
Product Warranties Disclosures [Abstract] | |
Warranty Reserves | 5. Warranty Reserves In most instances, the Companys digital products are covered by the original equipment manufacturing firms warranty; however, there are certain customers where the Company may grant warranties in excess of the manufacturers warranty for digital products which can be for up to three years. The Company accrues for these costs at the time of sale. The following table summarizes warranty activity for the three and nine months ended September 30, 2016 and 2015: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Warranty accrual at beginning of period $ 380 $ 271 $ 310 $ 355 Charged to expense 430 128 778 487 Amounts written off, net of recoveries (194 ) (125 ) (475 ) (568 ) Foreign currency adjustment 1 (11 ) 4 (11 ) Warranty accrual at end of period $ 617 $ 263 $ 617 $ 263 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets consisted of the following at September 30, 2016: Useful life Gross Accumulated amortization Net (Years) ( in thousands) Intangible assets subject to amortization: Software 3 $ 648 $ — $ 648 Product Formulation 10 $ 465 $ (266 ) $ 199 Total $ 1,113 $ (266 ) $ 847 Intangible assets consisted of the following at December 31, 2015: Useful life Gross Accumulated amortization Net (Years) (in thousands) Intangible assets subject to amortization: Product formulation 10 $ 440 $ (205 ) $ 235 Amortization expense relating to other identifiable intangible assets was insignificant for the nine months ended September 30, 2016 and $0.3 million for the nine months ended September 30, 2015. The following table shows the Company’s estimated future amortization expense related to intangible assets for the next five years. Amount (in thousands) Remainder 2016 $ 16 2017 54 2018 43 2019 31 2020 23 Thereafter 32 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill The following represents a summary of changes in the Companys carrying amount of goodwill for the quarter ended September 30, 2016 (in thousands): Balance as of December 31, 2015 $ 863 Foreign currency translation 47 Balance as of September 30, 2016 $ 910 |
Restructuring Activities
Restructuring Activities | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | 8. Restructuring Activities In connection with its strategic planning process, as well as the Companys 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. These plans were completed in the first quarter of 2016 and no expense was recorded in 2016. In connection with the integration of the 2013 Convergent acquisition, as well as the Companys 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 Companys warehouse from Omaha, Nebraska to Georgia. The restructuring initiative was completed in the first quarter of 2015. The following table reconciles the beginning and ending restructuring balance for the nine months ended September 30, 2016, which is included in accrued expenses: (in thousands) Accrued liability at beginning of period $ 73 Severance paid (73 ) Accrued liability at end of period $ 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 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. 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 $8.3 million should be recorded against the Companys U.S. tax jurisdiction deferred tax assets as of September 30, 2016. During the third quarter the valuation allowance decreased $0.4 million. The Company has completed the examination for Federal purposes for the 2011 fiscal year with no changes. The Company has examinations not yet initiated for Federal purposes for fiscal years 2013, 2014, and 2015. In most cases, the Company has examinations open for state or local jurisdictions based on the particular jurisdictions statute of limitations. |
Stock Compensation
Stock Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation | 10. 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 for the three months ended September 30, 2016 and 2015, respectively, and $0.4 million and $0.3 million for the nine months ended September 30, 2016 and 2015, respectively. Long-Term Incentive Plan The Companys 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, and 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 months ended September 30, 2016, the Company granted no restricted stock units or stock options and during the nine months ended September 30, 2016, the Company granted no restricted stock units and 100,000 stock options under the 2010 Plan. Options As noted above, under the 2010 Plan, the Company granted options to purchase 100,000 shares during the nine month period ended September 30, 2016. Options to purchase shares of common stock were granted with exercise prices equal to the fair value of the common stock on the date of grant and vest immediately or over a five-year period. The weighted average grant date fair value of stock options granted during the nine month period ended September 30, 2016 was $4.20. There were no stock options granted during the three month period ended September 30, 2016 or during the three and nine month period ended September 30, 2015. The fair value of each stock option granted is estimated on the date of grant using a Black-Scholes valuation model with the following weighted average assumptions: 2016 Expected dividend yield at date of grant 0.00 % Risk-free interest rate 1.35 % Expected stock price volatility 32.26 % Expected life of options (in years) 5.7 The risk-free interest rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant. The expected volatility was based on historical daily price changes of the Companys stock for one year prior to the date of grant. The expected life of options is the average number of years the Company estimates that options will be outstanding. The Company considers groups of associates that have similar historical exercise behavior separately for valuation purposes. The following table summarizes the Companys activities with respect to its stock options for the nine months ended September 30, 2016 as follows: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2015 450,800 $ 4.48 9.21 $ 131 Granted 100,000 4.20 Exercised (25,000 ) 4.01 Forfeited (32,500 ) 4.71 Outstanding at September 30, 2016 493,300 $ 4.31 8.97 $ 1,327 Exercisable at September 30, 2016 73,300 $ 4.41 8.07 $ 190 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, 2016. As of September 30, 2016, 420,000 stock option awards were non-vested. Unrecognized compensation cost related to stock option awards was approximately $0.5 million, which is expected to be recognized over a weighted average period of 4.2 years. Restricted Stock Plans The Ballantyne Strong, Inc. 2014 Non-Employee Directors Restricted Stock Plan (the 2014 Non-Employee Plan) provides for the award of restricted shares to outside directors. Shares issued under the 2014 Non-Employee Plan vest the day preceding the Companys Annual Meeting of Stockholders in the year following issuance. During the nine months ended September 30, 2016, the Company granted 45,555 restricted shares with a weighted average grant date fair value of $4.89 under the Non-Employee Plan. 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, 2016, the total unrecognized compensation cost related to non-vested restricted stock awards was approximately $0.3 million, which is expected to be recognized over a weighted average period of 1.1 years. The following table summarizes restricted stock activity for the nine months ended September 30, 2016: Number of Restricted Stock Shares Weighted Average Grant Price Fair Value Non-vested at December 31, 2015 130,358 $ 4.30 Granted 45,555 4.89 Shares vested (73,243 ) 4.42 Shares forfeited (5,625 ) 3.75 Non-vested at September 30, 2016 97,045 $ 4.52 |
Commitments, Contingencies and
Commitments, Contingencies and Concentrations | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Concentrations | 11. Commitments, Contingencies and Concentrations Concentrations The Companys top ten customers accounted for approximately 53.3% and 49.8% of total consolidated net revenues for the three and nine months ended September 30, 2016, respectively. Trade accounts receivable from these customers represented approximately 35.5% of net consolidated receivables at September 30, 2016. 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 Companys significant customers could have a material adverse effect on the Companys 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. 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 2021. 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 Companys future minimum lease payments for leases at September 30, 2016 are as follows: Capital Leases Operating Leases (In thousands) Remainder 2016 $ 85 $ 272 2017 290 413 2018 248 329 2019 131 294 2020 264 Thereafter 152 Total minimum lease payments 754 $ 1,724 Less: Amount representing interest 26 Present value of minimum lease payments 728 Less: Current maturities 305 Capital lease obligations, net of current portion $ 423 |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Information | 12. Business Segment Information As of September 30, 2016 the Company’s operations were conducted principally through two business segments: Cinema and Digital Media. Cinema operations include the sale of digital projection equipment, screens, and sound systems. Digital Media 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. The results of discontinued operations are excluded from the Cinema segment information below. Summary by Business Segments Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 Net revenue Cinema $ 11,070 $ 11,048 $ 32,085 $ 33,782 Digital Media 7,911 8,992 25,411 23,836 Total segment net revenue 18,981 20,040 57,496 57,618 Eliminations (313 ) (294 ) (1,156 ) (892 ) Total net revenue $ 18,668 $ 19,746 $ 56,340 $ 56,726 Operating income (loss) Cinema $ 2,205 $ 2,462 $ 8,318 $ 5,733 Digital Media (61 ) (1,120 ) 884 (1,717 ) Total segment operating income 2,144 1,342 9,202 4,016 Unallocated general and administrative expenses (1,887 ) (2,316 ) (5,870 ) (7,628 ) (Loss) gain on sale of assets — (14 ) 1 (392 ) Other income (expense) Interest, net 18 9 18 308 Cinema – foreign currency transaction gain (loss) 82 846 (958 ) 1,521 Digital Media – foreign currency transaction loss (59 ) (81 ) (24 ) (200 ) Cinema - excess distribution from joint venture — — 502 — Cinema – fair value adjustment to notes receivable — (1,595 ) — (1,595 ) Cinema - other (5 ) (2 ) 45 22 Digital Media - other (2 ) — (9 ) — Change in value of marketable securities – Corporate asset (34 ) — (400 ) — Total other income (loss) — (823 ) (826 ) 56 Earnings (loss) before income taxes and equity method investment income $ 257 $ (1,811 ) $ 2,507 $ (3,948 ) (In thousands) September 30, 2016 December 31, 2015 Identifiable assets, excluding assets held for sale Cinema $ 34,510 $ 38,159 Digital Media 17,002 15,319 Corporate assets 9,778 6,102 Total $ 61,290 $ 59,580 Summary by Geographical Area Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 Net revenue United States $ 14,643 $ 15,442 $ 44,184 $ 43,435 China 1,518 1,244 4,316 2,911 Latin America 377 294 1,352 2,739 Canada 1,399 1,499 3,676 3,878 Mexico 472 559 1,816 1,938 Europe 196 448 788 1,219 Asia (excluding China) 45 61 70 106 Other 18 199 138 500 Total $ 18,668 $ 19,746 $ 56,340 $ 56,726 (In thousands) September 30, 2016 December 31, 2015 Identifiable assets, excluding assets held for sale United States $ 29,916 $ 33,882 Canada 31,374 25,698 Total $ 61,290 $ 59,580 Net revenues by business segment are to unaffiliated customers. 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, 2016 | |
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 Companys 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 Companys Annual Report on Form 10-K for the fiscal year-ended December 31, 2015. The condensed consolidated balance sheet as of December 31, 2015 was derived from the Companys 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 (U.S. GAAP) 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. |
Marketable Securities | Marketable Securities The Companys marketable securities are comprised of investments in the common stock of a publicly traded company. Changes in fair value, based on the market price of the investees stock are recognized in other income in the consolidated statement of operations. The Company uses the fair value option to account for the investment to more appropriately recognize the value of this investment in our consolidated financial statements since the Company does not exert significant influence over the investment, in which case the equity method of accounting has been applied. Marketable securities at fair value were as follows: September 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Marketable securities $ 2,464 $ $ 497 $ 1,967 |
Equity Method Investments | Equity Method Investments In December 2015, the Company acquired 7.8% ownership in RELM Wireless Corporation (RELM) for $4.0 million and increased its ownership to 8.3% during the nine months ended September 30, 2016 for an additional $0.3 million. RELM is a publicly traded company that designs, manufactures and markets two-way land mobile radios, repeaters, base stations, and related components and subsystems. The Companys Chief Executive Officer is a member of the board of directors of RELM, and controls entities that, when combined with the Companys ownership in RELM, own greater than 20% of RELM, providing the Company with significant influence over RELM, but not controlling interest. As a result of this significant influence, the Company accounts for its investment in RELM under the equity method. The Companys carrying value for RELM was $4.3 million as of September 30, 2016 and the Companys equity method investment income of RELM was $0.2 million during the nine months ended September 30, 2016. Based on quoted market prices, the market value of the Companys ownership in RELM was $6.1 million at September 30, 2016. In May 2016, the Company acquired 31.2% ownership in Itasca Capital Ltd. (Itasca) for $3.5 million and increased its ownership to 32.3% during the nine months ended September 30, 2016 for an additional $0.2 million. Itasca is a publicly traded Canadian company that is an investment vehicle seeking transformative strategic investments. The Companys Chief Executive Officer is a member of the board of directors of Itasca. This board seat, combined with the Companys 32.3% ownership of Itasca, provide the Company with significant influence over Itasca, but not controlling interest. As a result of this significant influence, the Company accounts for its investment in Itasca under the equity method. The Companys carrying value for Itasca was $3.5 million as of September 30, 2016 and the Companys equity method investment loss in Itasca was $0.1 million during the nine months ended September 30, 2016. Based on quoted market prices, the market value of the Companys ownership in Itasca was $4.4 million at September 30, 2016. |
Fair Value of Financial Instruments | Fair Value of Financial 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 will be 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 tables present the Companys financial assets 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, 2016: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 13,834 $ $ $ 13,834 Marketable securities $ 1,967 $ $ $ 1,967 Notes receivable $ $ $ 1,669 $ 1,669 Fair values measured on a recurring basis at December 31, 2015: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 17,862 $ $ $ 17,862 Marketable securities $ 2,101 $ $ $ 2,101 Notes receivable $ $ $ 1,669 $ 1,669 Quantitative information about the Companys level 3 fair value measurements at September 30, 2016 is set forth below: Fair Value at 9/30/2016 (in thousands) Valuation Technique Unobservable input Range Notes receivable $ 1,669 Discounted cash flow Probability of default 55 % Discount rate 21 % The notes receivable are recorded at estimated fair value at September 30, 2016. The significant unobservable inputs used in the fair value measurement of the Companys note receivable are discount rate and probability 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 Companys notes receivable fair value: Nine months ended September 30, 2016 2015 (in thousands) Notes receivable balance, beginning of period $ 1,669 $ 2,985 Interest income accrued 279 Fair value adjustment (1,595 ) Notes receivable balance, end of period $ 1,669 $ 1,669 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, 2016, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 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 is effective for the Company beginning January 1, 2018. 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. While the Company has not yet completed its analysis of ASU 2014-09, the Company anticipates a more significant impact on its Digital Media segment, primarily due to the nature of that segments contracts with customers. The Company is currently evaluating adoption methods and the impact of adopting ASU 2014-09 on its consolidated financial statements. The Company anticipates that the adoption may have a material impact on the consolidated financial statements. 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 first in-first out 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 adoption of ASU 2015-11 is not expected to have a material effect on the Companys consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 requires equity investments that do not result in consolidation and are not accounted under the equity method to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entitys other deferred tax assets and modifies certain fair value disclosure requirements. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is not permitted. The adoption of ASU 2016-01 is not expected to have a material effect on the Companys consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases In March 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting, (ASU 2016-07). ASU 2016-07 eliminates the requirement for the Company to retroactively apply the equity method when its increase in ownership interests (or degree of influence) in an investee triggers equity method accounting. This ASU is effective for the Company on January 1, 2017 with early adoption permitted. The Company has adopted ASU 2016-07 and there was no impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation (Topic 718) (ASU 2016-09). ASU 2016-09 simplifies accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This ASU is effective for the Company on January 1, 2017 with early adoption permitted. While the Company has not yet completed its analysis, the adoption of ASU 2016-09 is not expected to have a material effect on the Companys consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Comparative Financial Results of Discontinued Operations | The summary comparative financial results of discontinued operations were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Total net revenues 583 3,766 6,440 8,973 Total cost of revenues 436 3,578 6,227 8,605 Total selling and administrative expenses 157 465 863 1,058 Loss from operations of discontinued operations (10 ) (277 ) (650 ) (690 ) Loss before income taxes (8 ) (273 ) (628 ) (677 ) Income tax expense (448 ) (114 ) (388 ) Net loss from discontinued operations, net of tax $ (8 ) $ (721 ) $ (742 ) $ (1,065 ) |
Schedule of Assets and Liabilities Held for Sale of Condensed Consolidated Balance Sheets | The assets and liabilities classified as held for sale reflected in the condensed consolidated balance sheets were as follows (in thousands): September 30, 2016 December 31, 2015 (Unaudited) Current assets: Cash and cash equivalents $ 1,439 $ 4,208 Accounts receivable, net 327 Total inventories, net 2,500 Other current assets 245 184 Total current assets held for sale $ 1,684 $ 7,219 Property, plant and equipment, net $ $ 65 Total noncurrent assets held for sale $ $ 65 Current liabilities: Accounts payable $ 78 $ 2,421 Accrued expenses 256 516 Customer deposits/deferred revenue 272 1,458 Total current liabilities $ 606 $ 4,395 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Marketable Securities | September 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Marketable securities $ 2,464 $ $ 497 $ 1,967 |
Schedule of Fair Value Measured Financial Assets and Liabilities | Fair Values Measured on a Recurring Basis at September 30, 2016: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 13,834 $ $ $ 13,834 Marketable securities $ 1,967 $ $ $ 1,967 Notes receivable $ $ $ 1,669 $ 1,669 Fair values measured on a recurring basis at December 31, 2015: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 17,862 $ $ $ 17,862 Marketable securities $ 2,101 $ $ $ 2,101 Notes receivable $ $ $ 1,669 $ 1,669 |
Summary of Quantitative Information About Company's Level 3 Fair Value Measurements | Quantitative information about the Companys level 3 fair value measurements at September 30, 2016 is set forth below: Fair Value at 9/30/2016 (in thousands) Valuation Technique Unobservable input Range Notes receivable $ 1,669 Discounted cash flow Probability of default 55 % Discount rate 21 % |
Summary of Notes Receivable Reconciliation | The following table reconciles the beginning and ending balance of the Companys notes receivable fair value: Nine months ended September 30, 2016 2015 (in thousands) Notes receivable balance, beginning of period $ 1,669 $ 2,985 Interest income accrued 279 Fair value adjustment (1,595 ) Notes receivable balance, end of period $ 1,669 $ 1,669 |
Earnings (Loss) Per Common Sh22
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Share Basic and Diluted | The following table provides the reconciliation between average shares used to compute both basic and diluted earnings (loss) per share: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Weighted average shares outstanding (in thousands): Basic weighted average shares outstanding 14,249 14,164 14,225 14,122 Dilutive effect of stock options and certain non-vested shares of restricted stock Diluted weighted average shares outstanding 14,249 14,164 14,225 14,122 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | The following table summarizes warranty activity for the three and nine months ended September 30, 2016 and 2015: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Warranty accrual at beginning of period $ 380 $ 271 $ 310 $ 355 Charged to expense 430 128 778 487 Amounts written off, net of recoveries (194 ) (125 ) (475 ) (568 ) Foreign currency adjustment 1 (11 ) 4 (11 ) Warranty accrual at end of period $ 617 $ 263 $ 617 $ 263 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following at September 30, 2016: Useful life Gross Accumulated amortization Net (Years) ( in thousands) Intangible assets subject to amortization: Software 3 $ 648 $ $ 648 Product Formulation 10 $ 465 $ (266 ) $ 199 Total $ 1,113 $ (266 ) $ 847 Intangible assets consisted of the following at December 31, 2015: Useful life Gross Accumulated amortization Net (Years) (in thousands) Intangible assets subject to amortization: Product formulation 10 $ 440 $ (205 ) $ 235 |
Schedule of Intangible Assets Future Amortization Expense | The following table shows the Companys estimated future amortization expense related to intangible assets for the next five years. Amount (in thousands) Remainder 2016 $ 16 2017 54 2018 43 2019 31 2020 23 Thereafter 32 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The following represents a summary of changes in the Companys carrying amount of goodwill for the quarter ended September 30, 2016 (in thousands): Balance as of December 31, 2015 $ 863 Foreign currency translation 47 Balance as of September 30, 2016 $ 910 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016, which is included in accrued expenses: (in thousands) Accrued liability at beginning of period $ 73 Severance paid (73 ) Accrued liability at end of period $ 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 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Weighted Average Fair Value Assumptions Used in Grant Date Fair Value of Purchase Rights Outstanding | The fair value of each stock option granted is estimated on the date of grant using a Black-Scholes valuation model with the following weighted average assumptions: 2016 Expected dividend yield at date of grant 0.00 % Risk-free interest rate 1.35 % Expected stock price volatility 32.26 % Expected life of options (in years) 5.7 |
Summary of Stock Options Activities | The following table summarizes the Companys activities with respect to its stock options for the nine months ended September 30, 2016 as follows: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2015 450,800 $ 4.48 9.21 $ 131 Granted 100,000 4.20 Exercised (25,000 ) 4.01 Forfeited (32,500 ) 4.71 Outstanding at September 30, 2016 493,300 $ 4.31 8.97 $ 1,327 Exercisable at September 30, 2016 73,300 $ 4.41 8.07 $ 190 |
Summary of Restricted Stock Activity | The following table summarizes restricted stock activity for the nine months ended September 30, 2016: Number of Restricted Stock Shares Weighted Average Grant Price Fair Value Non-vested at December 31, 2015 130,358 $ 4.30 Granted 45,555 4.89 Shares vested (73,243 ) 4.42 Shares forfeited (5,625 ) 3.75 Non-vested at September 30, 2016 97,045 $ 4.52 |
Commitments, Contingencies an28
Commitments, Contingencies and Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Leases Future Minimum Lease Payments | The Companys future minimum lease payments for leases at September 30, 2016 are as follows: Capital Leases Operating Leases (In thousands) Remainder 2016 $ 85 $ 272 2017 290 413 2018 248 329 2019 131 294 2020 264 Thereafter 152 Total minimum lease payments 754 $ 1,724 Less: Amount representing interest 26 Present value of minimum lease payments 728 Less: Current maturities 305 Capital lease obligations, net of current portion $ 423 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Summary by Business Segments Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 Net revenue Cinema $ 11,070 $ 11,048 $ 32,085 $ 33,782 Digital Media 7,911 8,992 25,411 23,836 Total segment net revenue 18,981 20,040 57,496 57,618 Eliminations (313 ) (294 ) (1,156 ) (892 ) Total net revenue $ 18,668 $ 19,746 $ 56,340 $ 56,726 Operating income (loss) Cinema $ 2,205 $ 2,462 $ 8,318 $ 5,733 Digital Media (61 ) (1,120 ) 884 (1,717 ) Total segment operating income 2,144 1,342 9,202 4,016 Unallocated general and administrative expenses (1,887 ) (2,316 ) (5,870 ) (7,628 ) (Loss) gain on sale of assets (14 ) 1 (392 ) Other income (expense) Interest, net 18 9 18 308 Cinema foreign currency transaction gain (loss) 82 846 (958 ) 1,521 Digital Media foreign currency transaction loss (59 ) (81 ) (24 ) (200 ) Cinema - excess distribution from joint venture 502 Cinema fair value adjustment to notes receivable (1,595 ) (1,595 ) Cinema - other (5 ) (2 ) 45 22 Digital Media - other (2 ) (9 ) Change in value of marketable securities Corporate asset (34 ) (400 ) Total other income (loss) (823 ) (826 ) 56 Earnings (loss) before income taxes and equity method investment income $ 257 $ (1,811 ) $ 2,507 $ (3,948 ) |
Reconciliation of Assets from Segment to Consolidated | (In thousands) September 30, 2016 December 31, 2015 Identifiable assets, excluding assets held for sale Cinema $ 34,510 $ 38,159 Digital Media 17,002 15,319 Corporate assets 9,778 6,102 Total $ 61,290 $ 59,580 |
Schedule of Segment Reporting Information by Geographic Area | Summary by Geographical Area Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 Net revenue United States $ 14,643 $ 15,442 $ 44,184 $ 43,435 China 1,518 1,244 4,316 2,911 Latin America 377 294 1,352 2,739 Canada 1,399 1,499 3,676 3,878 Mexico 472 559 1,816 1,938 Europe 196 448 788 1,219 Asia (excluding China) 45 61 70 106 Other 18 199 138 500 Total $ 18,668 $ 19,746 $ 56,340 $ 56,726 |
Summary of Identifiable Assets by Geographical Area | (In thousands) September 30, 2016 December 31, 2015 Identifiable assets, excluding assets held for sale United States $ 29,916 $ 33,882 Canada 31,374 25,698 Total $ 61,290 $ 59,580 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Disposal of discontinued operating expenses | $ 0 | $ 900 | ||
Severance charges | $ 695 | |||
Fourth Quarter of 2016 [Member] | ||||
Severance charges | $ 300 | |||
SWBTI [Member] | November 4, 2016 [Member] | ||||
Proceeds from sale of subsidiaries | 400 | |||
SWBTI [Member] | Fourth Quarter of 2016 [Member] | ||||
Gain loss on change of assets | $ 300 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Comparative Financial Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Total net revenues | $ 583 | $ 3,766 | $ 6,440 | $ 8,973 |
Total cost of revenues | 436 | 3,578 | 6,227 | 8,605 |
Total selling and administrative expenses | 157 | 465 | 863 | 1,058 |
Loss from operations of discontinued operations | (10) | (277) | (650) | (690) |
Loss before income taxes | (8) | (273) | (628) | (677) |
Income tax expense | (448) | (114) | (388) | |
Net loss from discontinued operations, net of tax | $ (8) | $ (721) | $ (742) | $ (1,065) |
Discontinued Operations - Sch32
Discontinued Operations - Schedule of Assets and Liabilities Held for Sale of Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Cash and cash equivalents | $ 1,439 | $ 4,208 | $ 2,772 | $ 3,190 |
Accounts receivable, net | 327 | |||
Total inventories, net | 2,500 | |||
Other current assets | 245 | 184 | ||
Total current assets held for sale | 1,684 | 7,219 | ||
Property, plant and equipment, net | 65 | |||
Total noncurrent assets held for sale | 65 | |||
Accounts payable | 78 | 2,421 | ||
Accrued expenses | 256 | 516 | ||
Customer deposits/deferred revenue | 272 | 1,458 | ||
Total current liabilities | $ 606 | $ 4,395 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
May 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity method investment, aggregate cost | $ 4,001 | $ 7,811 | $ 7,811 | |||
Income (loss) from equity method investment | $ 29 | $ 70 | $ 94 | |||
Relm Wireless Corp [Member] | ||||||
Equity ownership interest rate percentage | 7.80% | 8.30% | 8.30% | |||
Equity method investments amount | $ 4,000 | |||||
Equity method investment, aggregate cost | $ 4,300 | $ 4,300 | ||||
Quoted market value of the company's ownership | $ 6,100 | 6,100 | ||||
Income (loss) from equity method investment | 200 | |||||
Relm Wireless Corp [Member] | Maximum [Member] | ||||||
Equity method investments amount | $ 300 | |||||
Relm Wireless Corp [Member] | Chief Executive Officer [Member] | Minimum [Member] | ||||||
Minimum combined ownership interest | 20.00% | 20.00% | ||||
Itasca Capital Ltd [Member] | ||||||
Equity ownership interest rate percentage | 31.20% | |||||
Equity method investments amount | $ 3,500 | |||||
Equity method investment, aggregate cost | $ 3,500 | $ 3,500 | ||||
Quoted market value of the company's ownership | $ 4,400 | 4,400 | ||||
Income (loss) from equity method investment | $ 100 | |||||
Itasca Capital Ltd [Member] | Maximum [Member] | ||||||
Equity ownership interest rate percentage | 32.30% | 32.30% | ||||
Equity method investments amount | $ 200 |
Summary of Signficant Accountin
Summary of Signficant Accounting Policies - Schedule of Marketable Securities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Marketable securities, Cost | $ 2,464 |
Marketable securities, Estimated Fair Value | 1,967 |
Marketable Securities [Member] | Unrealized Gains [Member] | |
Marketable securities, Gross Unrealized Gains Loss | |
Marketable Securities [Member] | Unrealized Losses [Member] | |
Marketable securities, Gross Unrealized Gains Loss | $ 497 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Schedule of Fair Value Measured Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Cash and cash equivalents | $ 13,834 | $ 17,862 |
Marketable securities | 1,967 | 2,101 |
Notes receivable | 1,669 | 1,669 |
Level 1 [Member] | ||
Cash and cash equivalents | 13,834 | 17,862 |
Marketable securities | 1,967 | 2,101 |
Notes receivable | ||
Level 2 [Member] | ||
Cash and cash equivalents | ||
Marketable securities | ||
Notes receivable | ||
Level 3 [Member] | ||
Cash and cash equivalents | ||
Marketable securities | ||
Notes receivable | $ 1,669 | $ 1,669 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Summary of Quantitative Information About Company's Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Note receivable | $ 1,669 | $ 1,669 |
Valuation Technique | Discounted cash flow | |
Probability of default | 55.00% | |
Discount rate | 21.00% |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Summary of Notes Receivable Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounting Policies [Abstract] | ||||
Note receivable balance, beginning of period | $ 1,669 | $ 2,985 | ||
Interest income accrued | 279 | |||
Fair value adjustment | $ (1,595) | (1,595) | ||
Note receivable balance, end of period | $ 1,669 | $ 1,669 | $ 1,669 | $ 1,669 |
Earnings (Loss) Per Common Sh38
Earnings (Loss) Per Common Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock Option In Which Exercise Price Exceeds The Average Market Price Of Common Shares [Member] | ||||
Anti dilutive securities excluded from computation of earnings per share | 350,000 | 20,625 | 363,700 | 124,125 |
Restricted Stock Units And Stock Options In Which Exercise Price Is Less Than The Average Market Price Of Common Shares [Member] | ||||
Anti dilutive securities excluded from computation of earnings per share | 65,937 | 56,873 | 85,618 | 88,877 |
Earnings (Loss) Per Common Sh39
Earnings (Loss) Per Common Share - Schedule of Loss Per Share Basic and Diluted (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding | 14,249,000 | 14,164,000 | 14,225,000 | 14,122,000 |
Dilutive effect of stock options and certain non-vested shares of restricted stock | ||||
Diluted weighted average shares outstanding | 14,249,000 | 14,164,000 | 14,225,000 | 14,122,000 |
Warranty Reserves - Schedule of
Warranty Reserves - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Product Warranties Disclosures [Abstract] | ||||
Warranty accrual at beginning of period | $ 380 | $ 271 | $ 310 | $ 355 |
Charged to expense | 430 | 128 | 778 | 487 |
Amounts written off, net of recoveries | (194) | (125) | (475) | (568) |
Foreign currency adjustment | 1 | (11) | 4 | (11) |
Warranty accrual at end of period | $ 617 | $ 263 | $ 617 | $ 263 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense | $ 300 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Intangible assets, Gross | $ 1,113 | |
Intangible assets, Accumulated amortization | (266) | |
Intangible assets, Net | $ 847 | |
Software [Member] | ||
Intangible assets, Useful life | 3 years | |
Intangible assets, Gross | $ 648 | |
Intangible assets, Accumulated amortization | ||
Intangible assets, Net | $ 648 | |
Production Formulation [Member] | ||
Intangible assets, Useful life | 10 years | 10 years |
Intangible assets, Gross | $ 465 | $ 440 |
Intangible assets, Accumulated amortization | (266) | (205) |
Intangible assets, Net | $ 199 | $ 235 |
Intangible Assets - Schedule 43
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder 2,016 | $ 16 |
2,017 | 54 |
2,018 | 43 |
2,019 | 31 |
2,020 | 23 |
Thereafter | $ 32 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance | $ 863 |
Foreign currency translation | 47 |
Balance | $ 910 |
Restructuring Activities - Sche
Restructuring Activities - Schedule of Beginning and Ending Restructuring Balance Included in Accrued Expenses (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Accrued liability at beginning of period | $ 73 | $ 187 |
Lease termination expense | 219 | |
Lease termination paid | (41) | |
Severance expense | 695 | |
Severance paid | (73) | (607) |
Accrued liability at end of period | 453 | |
2015 Strategic Initiative [Member] | ||
Accrued liability at beginning of period | ||
Lease termination expense | 219 | |
Lease termination paid | (41) | |
Severance expense | 695 | |
Severance paid | (447) | |
Accrued liability at end of period | 426 | |
2013 Convergent Related Severance [Member] | ||
Accrued liability at beginning of period | 187 | |
Lease termination expense | ||
Lease termination paid | ||
Severance expense | ||
Severance paid | (160) | |
Accrued liability at end of period | $ 27 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ 8,300 | $ 8,300 |
Decrease in valuation allowance | $ 400 | |
Income tax examination description | The Company has completed the examination for Federal purposes for the 2011 fiscal year with no changes. The Company has examinations not yet initiated for Federal purposes for fiscal years 2013, 2014, and 2015. In most cases, the Company has examinations open for state or local jurisdictions based on the particular jurisdictions statute of limitations. |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based compensation expense | $ 357 | $ 269 | ||
Number of shares granted | 100,000 | |||
Stock Option [Member] | ||||
Number of shares granted | 0 | 0 | 0 | |
Share-based compensation arrangement by share-based payment award, options, nonvested, number | 420,000 | 420,000 | ||
Total unrecognized compensation cost related to stock option awards | $ 500 | $ 500 | ||
Compensation cost expected to be recognized, weighted average period | 4 years 2 months 12 days | |||
Year 2010 Plan [Member] | ||||
Number of shares reserved for issuance | 1,600,000 | 1,600,000 | ||
Number of shares granted | 100,000 | |||
Year 2010 Plan [Member] | Restricted Stock [Member] | ||||
Number of shares granted | 0 | |||
Year 2010 Plan [Member] | Stock Option [Member] | ||||
Number of shares granted | 100,000 | |||
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value | $ 4.20 | |||
Year 2010 Plan [Member] | Stock Option [Member] | Minimum [Member] | ||||
Option vesting period | 0 years | |||
Year 2010 Plan [Member] | Stock Option [Member] | Maximum [Member] | ||||
Option vesting period | 5 years | |||
Non-Employee Plan [Member] | Restricted Stock [Member] | ||||
Number of shares granted | 45,555 | |||
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value | $ 4.89 | |||
Compensation cost expected to be recognized, weighted average period | 1 year 1 month 6 days | |||
Unrecognized compensation cost | $ 300 | $ 300 | ||
Selling, General and Administrative Expenses [Member] | ||||
Share-based compensation expense | $ 100 | $ 100 | $ 400 | $ 300 |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Weighted Average Fair Value Assumptions Used in Grant Date Fair Value of Purchase Rights Outstanding (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected dividend yield at date of grant | 0.00% |
Risk-free interest rate | 1.35% |
Expected stock price volatility | 32.26% |
Expected life of options (in years) | 5 years 8 months 12 days |
Stock Compensation - Summary of
Stock Compensation - Summary of Stock Options Activities (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Options, Outstanding beginning balance | shares | 450,800 |
Number of Options, Granted | shares | 100,000 |
Number of Options, Exercised | shares | (25,000) |
Number of Options, Forfeited | shares | (32,500) |
Number of Options, Outstanding ending balance | shares | 493,300 |
Number of Options, Exercisable | shares | 73,300 |
Weighted Average Exercise Price Per Share, Outstanding beginning balance | $ / shares | $ 4.48 |
Weighted Average Exercise Price Per Share, Granted | $ / shares | 4.20 |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | 4.01 |
Weighted Average Exercise Price Per Share, Forfeited | $ / shares | 4.71 |
Weighted Average Exercise Price Per Share, Outstanding ending balance | $ / shares | 4.31 |
Weighted Average Exercise Price Per Share, Exercisable | $ / shares | $ 4.41 |
Weighted Average Remaining Contractual Term, beginning balance | 9 years 2 months 16 days |
Weighted Average Remaining Contractual Term, ending balance | 8 years 11 months 19 days |
Weighted Average Remaining Contractual Term, Exercisable | 8 years 26 days |
Aggregate Intrinsic Value, beginning balance | $ | $ 131 |
Aggregate Intrinsic Value, ending balance | $ | 1,327 |
Aggregate Intrinsic Value, Exercisable | $ | $ 190 |
Stock Compensation - Summary 50
Stock Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Number of Restricted Stock Shares, Non-vested beginning balance | shares | 130,358 |
Number of Restricted Stock Shares, Granted | shares | 45,555 |
Number of Restricted Stock Shares, vested | shares | (73,243) |
Number of Restricted Stock Shares, forfeited | shares | (5,625) |
Number of Restricted Stock Shares, Non-vested beginning balance | shares | 97,045 |
Weighted Average Grant Price Fair Value, Non-vested beginning balance | $ / shares | $ 4.30 |
Weighted Average Grant Price Fair Value, Granted | $ / shares | 4.89 |
Weighted Average Grant Price Fair Value, Vested | $ / shares | 4.42 |
Weighted Average Grant Price Fair Value, Forfeited | $ / shares | 3.75 |
Weighted Average Grant Price Fair Value, Non-vested ending balance | $ / shares | $ 4.52 |
Commitments, Contingencies an51
Commitments, Contingencies and Concentrations (Details Narrative) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016Customer | Sep. 30, 2016Customer | |
Concentration risk, number of customers | 10 | 10 |
Operating lease expiration date | through 2,021 | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
Concentration risk, percentage | 53.30% | 49.80% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||
Concentration risk, percentage | 35.50% |
Commitments, Contingencies an52
Commitments, Contingencies and Concentrations - Schedule of Leases Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Capital Leases, Remainder 2016 | $ 85 |
Capital Leases, 2017 | 290 |
Capital Leases, 2018 | 248 |
Capital Leases, 2019 | 131 |
Capital Leases, 2020 | |
Capital Leases, Thereafter | |
Total minimum Capital lease payments | 754 |
Less: Amount representing interest | 26 |
Present value of minimum lease payments | 728 |
Less: Current maturities | 305 |
Capital lease obligations, net of current portion | 423 |
Operating Leases, Remainder 2016 | 272 |
Operating Leases, 2017 | 413 |
Operating Leases, 2018 | 329 |
Operating Leases, 2019 | 294 |
Operating Leases, 2020 | 264 |
Operating Leases, Thereafter | 152 |
Total minimum Operating lease payments | $ 1,724 |
Business Segment Information (D
Business Segment Information (Details Narrative) | 9 Months Ended |
Sep. 30, 2016Segments | |
Segment Reporting [Abstract] | |
Number of business segment | 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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Total segment revenue | $ 18,668 | $ 19,746 | $ 56,340 | $ 56,726 |
Operating income (Loss) | 257 | (988) | 3,333 | (4,004) |
Other income (expense) - foreign currency transaction (loss) gain | 23 | 765 | (982) | 1,321 |
Cinema - excess distribution from joint venture | 502 | |||
Cinema – fair value adjustment to notes receivable | (1,595) | (1,595) | ||
Other income (expense) | (7) | (2) | 36 | 22 |
Change in value of marketable securities - Corporate asset | (34) | (400) | ||
Total other income (loss) | (823) | (826) | 56 | |
Earnings (loss) before income taxes and equity method investment income | 257 | (1,811) | 2,507 | (3,948) |
Business Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total segment revenue | 18,981 | 20,040 | 57,496 | 57,618 |
Eliminations | (313) | (294) | (1,156) | (892) |
Total net revenue | 18,668 | 19,746 | 56,340 | 56,726 |
Operating income (Loss) | 2,144 | 1,342 | 9,202 | 4,016 |
Unallocated general and administrative expenses | (1,887) | (2,316) | (5,870) | (7,628) |
(Loss) gain on sale of assets | (14) | 1 | (392) | |
Other income (expense) Interest, net | 18 | 9 | 18 | 308 |
Change in value of marketable securities - Corporate asset | (34) | (400) | ||
Total other income (loss) | (823) | (826) | 56 | |
Earnings (loss) before income taxes and equity method investment income | 257 | (1,811) | 2,507 | (3,948) |
Business Segments [Member] | Cinema [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total segment revenue | 11,070 | 11,048 | 32,085 | 33,782 |
Operating income (Loss) | 2,205 | 2,462 | 8,318 | 5,733 |
Other income (expense) - foreign currency transaction (loss) gain | 82 | 846 | (958) | 1,521 |
Cinema - excess distribution from joint venture | 502 | |||
Cinema – fair value adjustment to notes receivable | (1,595) | (1,595) | ||
Other income (expense) | (5) | (2) | 45 | 22 |
Business Segments [Member] | Digital Media [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total segment revenue | 7,911 | 8,992 | 25,411 | 23,836 |
Operating income (Loss) | (61) | (1,120) | 884 | (1,717) |
Other income (expense) - foreign currency transaction (loss) gain | (59) | (81) | (24) | (200) |
Other income (expense) | $ (2) | $ (9) |
Business Segment Information 55
Business Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Identifiable assets | $ 61,290 | $ 59,580 |
Cinema [Member] | Business Segments [Member] | ||
Identifiable assets | 34,510 | 38,159 |
Digital Media [Member] | Business Segments [Member] | ||
Identifiable assets | 17,002 | 15,319 |
Corporate Assets [Member] | Business Segments [Member] | ||
Identifiable assets | $ 9,778 | $ 6,102 |
Business Segment Information 56
Business Segment Information - Schedule of Segment Reporting Information by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net revenue | $ 18,668 | $ 19,746 | $ 56,340 | $ 56,726 |
United States [Member] | ||||
Net revenue | 14,643 | 15,442 | 44,184 | 43,435 |
China [Member] | ||||
Net revenue | 1,518 | 1,244 | 4,316 | 2,911 |
Latin America [Member] | ||||
Net revenue | 377 | 294 | 1,352 | 2,739 |
Canada [Member] | ||||
Net revenue | 1,399 | 1,499 | 3,676 | 3,878 |
Mexico [Member] | ||||
Net revenue | 472 | 559 | 1,816 | 1,938 |
Europe [Member] | ||||
Net revenue | 196 | 448 | 788 | 1,219 |
Asia (Excluding China) [Member] | ||||
Net revenue | 45 | 61 | 70 | 106 |
Other [Member] | ||||
Net revenue | $ 18 | $ 199 | $ 138 | $ 500 |
Business Segment Information 57
Business Segment Information - Summary of Identifiable Assets by Geographical Area (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Identifiable assets | $ 61,290 | $ 59,580 |
United States [Member] | ||
Identifiable assets | 29,916 | 33,882 |
Canada [Member] | ||
Identifiable assets | $ 31,374 | $ 25,698 |