Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 10, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | BALLANTYNE STRONG, INC. | ||
Entity Central Index Key | 946,454 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Public Float | $ 58,560,498 | ||
Entity Common Stock, Shares Outstanding | 14,261,395 | ||
Trading Symbol | BTN | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 7,596 | $ 17,862 |
Accounts receivable (less allowance for doubtful accounts of $1,097 in 2016 and $1,207 in 2015) | 16,793 | 11,032 |
Inventories, net | 6,563 | 7,192 |
Recoverable income taxes | 656 | 85 |
Other current assets | 1,746 | 2,556 |
Current assets held for sale | 188 | 7,219 |
Total current assets | 33,542 | 45,946 |
Property, plant and equipment, net | 11,695 | 11,703 |
Marketable securities | 2,101 | |
Equity method investments | 13,098 | 4,001 |
Intangible assets, net | 1,849 | 235 |
Goodwill | 889 | 863 |
Notes receivable | 1,669 | 1,669 |
Deferred income taxes | 84 | |
Other assets | 74 | 281 |
Noncurrent assets held for sale | 65 | |
Total assets | 62,900 | 66,864 |
Current liabilities: | ||
Accounts payable | 5,175 | 4,948 |
Accrued expenses | 4,097 | 3,583 |
Customer deposits/deferred revenue | 4,211 | 3,550 |
Income tax payable | 108 | 1,291 |
Current liabilities held for sale | 57 | 4,395 |
Total current liabilities | 13,648 | 17,767 |
Deferred revenue | 1,226 | 1,288 |
Deferred income taxes | 1,604 | 1,716 |
Other accrued expenses, net of current portion | 570 | 1,581 |
Total liabilities | 17,048 | 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 17,047 and 16,925 shares at December 31, 2016 and December 31, 2015, respectively; 14,268 and 14,191 shares outstanding at December 31, 2016 and 2015, respectively | 169 | 169 |
Additional paid-in capital | 39,758 | 39,157 |
Accumulated other comprehensive income: | ||
Foreign currency translation | (5,709) | (6,229) |
Postretirement benefit obligation | 97 | 74 |
Unrealized gain on available-for-sale securities of equity method investment | 136 | |
Retained earnings | 29,885 | 29,595 |
Stockholders' Equity Before Treasury Stock | 64,336 | 62,766 |
Less 2,779 and 2,734 of common shares in treasury, at December 31, 2016 and 2015, respectively, at cost | (18,484) | (18,254) |
Total stockholders' equity | 45,852 | 44,512 |
Total liabilities and stockholders' equity | $ 62,900 | $ 66,864 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,097 | $ 1,207 |
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 | 17,047,000 | 16,925,000 |
Common stock, shares outstanding | 14,268,000 | 14,191,000 |
Common shares in treasury, shares | 2,779,000 | 2,734,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net product sales | $ 54,391 | $ 55,166 | $ 58,897 |
Net service revenues | 22,340 | 22,893 | 24,268 |
Total net revenues | 76,731 | 78,059 | 83,165 |
Cost of products sold | 42,338 | 46,517 | 49,851 |
Cost of services | 12,760 | 14,830 | 16,225 |
Total cost of revenues | 55,098 | 61,347 | 66,076 |
Gross profit | 21,633 | 16,712 | 17,089 |
Selling and administrative expenses: | |||
Selling | 4,612 | 4,913 | 6,587 |
Administrative | 12,262 | 15,582 | 11,991 |
Total selling and administrative expenses | 16,874 | 20,495 | 18,578 |
Gain (loss) on sale or disposal of assets | (118) | (424) | 12 |
Income (loss) from operations | 4,641 | (4,207) | (1,477) |
Other income (expense): | |||
Interest income | 70 | 368 | 653 |
Interest expense | (47) | (56) | (48) |
Fair value adjustment for notes receivable | (1,595) | ||
Foreign currency transaction gain (loss) | (1,002) | 1,612 | 611 |
Excess distribution from joint venture | 502 | ||
Change in value of marketable securities | (34) | 117 | |
Other income (expense), net | 118 | (21) | (63) |
Total other income (expense) | (393) | 425 | 1,153 |
Earnings (loss) before income taxes and equity method investment income | 4,248 | (3,782) | (324) |
Income tax expense (benefit) | 2,798 | 13,038 | (388) |
Equity method investment income | 117 | 96 | 78 |
Income (loss) from continuing operations | 1,567 | (16,724) | 142 |
Net earnings (loss) from discontinued operations, net of tax | (1,277) | (743) | (146) |
Net earnings (loss) | $ 290 | $ (17,467) | $ (4) |
Net earnings (loss) per share - basic | |||
Net earnings (loss) from continuing operations | $ 0.11 | $ (1.19) | $ 0.01 |
Net loss from discontinued operations | (0.09) | (0.05) | (0.01) |
Net earnings (loss) | 0.02 | (1.24) | 0 |
Net earnings (loss) per share - diluted | |||
Net earnings (loss) from continuing operations | 0.11 | (1.19) | 0.01 |
Net loss from discontinued operations | (0.09) | (0.05) | (0.01) |
Net earnings (loss) | $ 0.02 | $ (1.24) | $ 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings (loss) | $ 290 | $ (17,467) | $ (4) |
Adjustment to postretirement benefit obligation: | |||
Prior service credit | (24) | (24) | (24) |
Net actuarial gain (loss) | 47 | (41) | (27) |
Total adjustment to postretirement benefit obligation | 23 | (65) | (51) |
Unrealized gain on available-for-sale securities of equity method investment | 136 | ||
Currency translation adjustment: | |||
Unrealized net change arising during period | 849 | (3,904) | (1,366) |
Reclassification adjustment for sale of foreign subsidiary | (329) | ||
Other comprehensive income (loss) | 679 | (3,969) | (1,417) |
Comprehensive income (loss) | $ 969 | $ (21,436) | $ (1,421) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2013 | $ 167 | $ 38,231 | $ 47,066 | $ (18,239) | $ (769) | $ 66,456 |
Net income loss | (4) | (4) | ||||
Net other comprehensive loss | (1,417) | (1,417) | ||||
Issuance of 68-116-43 shares of common stock under the restricted stock plans | 1 | (1) | ||||
Share-based compensation expense | 427 | 427 | ||||
Proceeds from exercise of stock options | ||||||
Balance at Dec. 31, 2014 | 168 | 38,657 | 47,062 | (18,239) | (2,186) | 65,462 |
Net income loss | (17,467) | (17,467) | ||||
Net other comprehensive loss | (3,969) | (3,969) | ||||
Issuance of 68-116-43 shares of common stock under the restricted stock plans | 1 | (1) | ||||
Share-based compensation expense | 501 | 501 | ||||
Treasury share purchase of 3-45 shares | (15) | (15) | ||||
Proceeds from exercise of stock options | ||||||
Balance at Dec. 31, 2015 | 169 | 39,157 | 29,595 | (18,254) | (6,155) | 44,512 |
Net income loss | 290 | 290 | ||||
Net other comprehensive loss | 679 | 679 | ||||
Issuance of 68-116-43 shares of common stock under the restricted stock plans | ||||||
Share-based compensation expense | 466 | 466 | ||||
Treasury share purchase of 3-45 shares | (230) | (230) | ||||
Proceeds from exercise of stock options | 135 | 135 | ||||
Balance at Dec. 31, 2016 | $ 169 | $ 39,758 | $ 29,885 | $ (18,484) | $ (5,476) | $ 45,852 |
Consolidated Statements of Sto7
Consolidated Statements of Stockholders' Equity (Parenthetical) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Common Stock [Member] | |||
Issuance of common stock under the restricted stock plans, shares issued | 43,000 | 116,000 | 68,000 |
Treasury Stock [Member] | |||
Treasury share purchase, shares | 45,000 | 3,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net earnings (loss) | $ 290 | $ (17,467) | $ (4) |
Net loss from discontinued operations, net of tax | (1,277) | (743) | (146) |
Net earnings (loss) from continuing operations | 1,567 | (16,724) | 142 |
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||
Provision for doubtful accounts | 6 | 1,065 | 92 |
Provision for obsolete inventory | (48) | 1,713 | (200) |
Provision for warranty | 325 | 562 | 310 |
Depreciation and amortization | 2,187 | 2,303 | 1,876 |
Impairment of intangible assets | 638 | ||
Fair value adjustment to notes receivable | 1,595 | ||
Excess distribution from joint venture | 502 | ||
Equity income loss of equity method investments | (117) | (96) | (78) |
Unrealized gain on marketable securities | (34) | (117) | |
Loss on forward contracts | 145 | ||
Loss (gain) on disposal or transfer of assets | 118 | 424 | (12) |
Deferred income taxes | (213) | 8,817 | (4,557) |
Share-based compensation expense | 466 | 501 | 427 |
Dividends received | 207 | ||
Changes in operating assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (4,220) | 7,876 | (8) |
Inventories | 718 | 1,687 | 1,518 |
Other current assets | (378) | (325) | 5 |
Accounts payable | 931 | (3,085) | (2,805) |
Accrued expenses | (1,083) | (221) | 679 |
Customer deposits/deferred revenue | 599 | (1,670) | 872 |
Current income taxes | (1,810) | 1,620 | 1,123 |
Other assets | 185 | (136) | (87) |
Net cash flows from operating activities - continuing operations | (92) | 6,427 | (558) |
Net cash flows from operating activities - discontinued operations | (3,370) | 1,554 | (3,114) |
Net cash (used in) provided by operating activities | (3,462) | 7,981 | (3,672) |
Cash flows from investing activities: | |||
Purchase of equity securities | (7,048) | (5,983) | |
Capital expenditures | (3,762) | (458) | (2,043) |
Proceeds from sale of assets | 220 | 8 | |
Net cash flows from investing activities - continuing operations | (10,810) | (6,222) | (2,035) |
Net cash flows from investing activities - discontinued operations | 297 | 17 | 110 |
Net cash used in investing activities | (10,513) | (6,205) | (1,925) |
Cash flows from financing activities: | |||
Purchase of treasury stock | (230) | (15) | |
Proceeds from exercise of stock options | 135 | ||
Payments on capital lease obligations | (268) | (200) | (14) |
Excess tax benefits from share-based arrangements | 45 | 12 | (7) |
Net cash used in financing activities | (318) | (203) | (21) |
Effect of exchange rate changes on cash and cash equivalents - continuing operations | 583 | (1,867) | (630) |
Effect of exchange rate changes on cash and cash equivalents - discontinued operations | (589) | (127) | (51) |
Net decrease in cash and cash equivalents | (14,299) | (421) | (6,299) |
Discontinued operations cash activity included above: | |||
Add: Cash balance included in assets held for sale at beginning of period | 4,208 | 3,190 | 6,352 |
Less: Cash balance included in assets held for sale at end of period | (175) | (4,208) | (3,190) |
Cash and cash equivalents at beginning of year | 17,862 | 19,301 | 22,438 |
Cash and cash equivalents at end of year | 7,596 | 17,862 | 19,301 |
Supplemental disclosure of cash paid for: | |||
Interest | 46 | 45 | 34 |
Income Taxes | 3,378 | 2,272 | 1,724 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Capital lease obligations for property and equipment | $ 752 | $ 310 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation Business Description 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., Convergent Corporation and Convergent Media Systems Corporation (“Convergent” or “CMS”) 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. On November 4, 2016, Strong Westrex (Beijing) Technology Inc. (“SWBTI”) was sold (see Note 2). The Company’s products are distributed to the retail, financial, government and cinema markets throughout the world. Principles of Consolidation The 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. Use of Management Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 2. Discontinued Operations On June 23, 2016, the Company’s Board of Directors approved a plan to pursue a sale of the operations conducted by its subsidiaries SWBTI and SWI (the “China Operations”) which have historically been included in the Cinema segment. The purpose of the plan was 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 total charges of $1.5 million in 2016, which are included in the net 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 a result of this sale the Company recorded a loss on disposal of discontinued operations of approximately $0.6 million in the fourth quarter of 2016, which is included in net income from discontinued operations. We expect to complete the sale of SWI within the next nine months. The summary comparative financial results of discontinued operations were as follows (in thousands): Years ended December 31, 2016 2015 2014 Total net revenues $ 6,864 $ 14,769 $ 11,922 Total cost of revenues 6,351 13,896 10,850 Total selling and administrative expenses 1,131 1,621 1,397 Loss from operations of discontinued operations (618 ) (749 ) (325 ) Loss before income taxes $ (1,162 ) $ (781 ) $ (222 ) Income tax expense (benefit) 114 (37 ) (77 ) Net loss from discontinued operations, net of tax $ (1,277 ) $ (743 ) $ (146 ) The assets and liabilities classified as held for sale reflected in the condensed consolidated balance sheets were as follows (in thousands): December 31, 2016 December 31, 2015 Current assets: Cash and cash equivalents $ 175 $ 4,208 Accounts receivable, net — 327 Total inventories, net — 2,500 Other current assets 13 184 Total current assets held for sale $ 188 $ 7,219 Property, plant and equipment, net $ — $ 65 Total noncurrent assets held for sale $ — $ 65 Current liabilities: Accounts payable $ 33 $ 2,421 Accrued expenses 11 516 Customer deposits/deferred revenue 13 1,458 Total current liabilities $ 57 $ 4,395 Depreciation and amortization related to discontinued operations was inconsequential in 2016, 2015, and 2014. Capital expenditures related to discontinued operations were inconsequential in 2016, 2015, and 2014. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Revenue Recognition The Company recognizes revenue when all of the following circumstances are satisfied: ● Persuasive evidence of an arrangement exists; ● Delivery has occurred or services have been rendered; ● The seller’s price to the buyer is fixed or determinable; and ● Collectability is reasonably assured. Within the Digital Media segment, if an arrangement involves multiple deliverables, the items are analyzed to determine the separate units of accounting, whether the items have value on a stand-alone basis and whether there is objective and reliable evidence of their fair values. Within the Digital Media segment, sales are derived from highly customized design integration, and installation of digital media technology solutions for a broad range of applications. The deliverables and timing depend upon the customer’s needs. Because the sales are so highly customized, separate sales are too infrequent to establish vendor specific objective evidence (VSOE). As a result, the Company uses third party evidence for products and best estimate of selling prices for other contract features. For services performed in the Digital Media segment, revenue is recognized when the products have been installed and services have been rendered. Revenues from maintenance support or managed services contracts are deferred and recognized as earned ratably over the service coverage periods. Unbilled revenue represents revenue recognized in accordance with the Company’s revenue recognition policy for which the invoice had not been processed and sent to the customer. Within the Cinema segment, revenue is generally recognized upon shipment of the product; however, there are certain instances where revenue is deferred and recognized upon delivery or customer acceptance of the product as the Company legally retains the risk of loss on these transactions until such time. Costs related to revenues are recognized in the same period in which the specific revenues are recorded. Shipping and handling fees billed to customers are reported in revenue. Shipping and handling costs incurred by the Company are included in cost of sales. Estimates used in the recognition of revenues and cost of revenues include, but are not limited to, estimates for product warranties, price allowances and product returns. Cash and Cash Equivalents All short-term, highly liquid financial instruments are classified as cash equivalents in the consolidated balance sheets and statements of cash flows. Generally, these instruments have maturities of three months or less from date of purchase. As of December 31, 2016, $6.1 million of the $7.6 million in cash and cash equivalents was held by our foreign subsidiaries. Marketable Securities The Company’s marketable securities were comprised of its investment in the common stock of a publicly traded company, 1347 Property Insurance Holdings, Ltd. (“PIH”), prior to additional investments and representation on the board of directors in 2016, resulting in the Company changing to the equity method of accounting (see Note 10). Changes in fair value, based on the market price of the investee’s stock, were recognized in other income in the consolidated statement of operations. The Company elected the fair value option to account for the investment to more appropriately recognize the value of this investment in the consolidated financial statements. The Company had no marketable securities as of December 31, 2016 and gross unrealized losses were insignificant. Marketable securities at fair value were as follows: December 31, 2015 Cost Gross Unrealized Gains Gross Unrealized Losses Book Value (in thousands) Marketable Securities $ 1,983 $ 118 $ — $ 2,101 Equity Method Investments We apply the equity method of accounting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments are reported under the line item captioned equity method investment income in our Consolidated Statements of Operations. The carrying value of our equity method investments is reported in equity method investments in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one quarter lag for all equity method investments. The Company classifies distributions received from equity-method investments using the cumulative earnings approach on the Consolidated Statements of Cash Flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. The Company did not record any impairments related to its investments in 2016, 2015 or 2014. Note 10 contains additional information on our equity method investments, which are held by our Cinema segment. Accounts, Financing and Notes Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the reserve level and bad debt expense to adjust accordingly. Notes receivable are recorded at estimated fair value at December 31, 2016 and accrue interest at 15%. The Company estimates allowances for doubtful accounts based on the Company’s best estimates of the amount of probable credit losses pertaining to the trade accounts receivables, based on ongoing monitoring of the counterparty’s financial position and results of operations. Past due accounts are written off for accounts, financing and notes receivable when our efforts have been unsuccessful in collecting amounts due. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and include appropriate elements of material, labor and manufacturing overhead. Inventory balances are net of reserves of slow moving or obsolete inventory based on management’s review of inventories on hand compared to estimated future usage and sales, technological changes and product pricing. Business Combinations The Company uses the acquisition method in accounting for acquired businesses. Under the acquisition method, the financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. As a result, in the case of significant acquisitions the Company normally obtains the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets. The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. Intangible Assets The Company’s amortizable intangibles consist of trademarks, customer relationships, software, and product formulation. The Company evaluates its intangible assets for impairment when there is evidence that events or circumstances indicate that the carrying amount of these assets may not be recoverable. Intangible assets with definite lives are amortized over their respective estimated useful lives to their estimated residual values. Significant judgments and assumptions are required in the impairment evaluations. See Note 7 for further information regarding impairment on intangible assets taken in 2015. Goodwill Goodwill is not amortized and is tested for impairment at least annually, or whenever events or changes in circumstances indicate the carrying amount of the asset may be impaired. Significant judgment is involved in determining if an indicator of impairment has occurred. The Company may consider indicators such as deterioration in general economic conditions, adverse changes in the markets in which the reporting unit operates, increases in input costs that have negative effects on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill. The Company may first review for goodwill impairment by assessing qualitative factors to determine whether any impairment may exist. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative two-step test is required; otherwise, no further testing is required. However, the Company also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test. Under the first step of the quantitative test, the fair value of each reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, step two is not performed. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and step two of the quantitative impairment test (measurement) is performed. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the fair value of that goodwill. The fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the fair value of the reporting unit goodwill. Goodwill at December 31, 2016 was recorded in connection with the acquisition of Peintures Elite, Inc. in 2013. A qualitative assessment was performed for the year ended December 31, 2016 and it was determined no events had occurred since the acquisition that would indicate an impairment was more likely than not. Property, Plant and Equipment Significant expenditures for the replacement or expansion of property, plant and equipment are capitalized. Depreciation of property, plant and equipment is provided over the estimated useful lives of the respective assets using the straight-line method. For financial reporting purposes, assets are depreciated over the estimated useful lives of 20 years for buildings and improvements, life of the related lease for leasehold improvements, 3 to 10 years for machinery and equipment, 7 years for furniture and fixtures and 3 years for computers and accessories. The Company generally uses accelerated methods of depreciation for income tax purposes. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of property, plant and equipment is based on management’s estimates of future undiscounted cash flows and these estimates may vary due to a number of factors, some of which may be outside of management’s control. To the extent that the Company is unable to achieve management’s forecasts of future income, it may become necessary to record impairment losses for any excess of the net book value of property, plant and equipment over their fair value. The Company did not record any impairments related to property, plant and equipment in 2016, 2015, or 2014. The Company incurs maintenance costs on all of its major equipment. Repair and maintenance costs are expensed as incurred. Income Taxes Income taxes are accounted for under the asset and liability method. The Company uses an estimate of its annual effective rate at each interim period based on the facts and circumstances at the time while the actual effective rate is calculated at year-end. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing whether the deferred tax assets are realizable management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s uncertain tax positions are evaluated in a two-step process, whereby 1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and 2) for those tax positions that meet the more likely than not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority. The Company accrues interest and penalties related to uncertain tax positions in the statements of income as income tax expense. Other Taxes Sales taxes assessed by governmental authorities, including sales, use, and excise taxes, are recorded on a net basis and therefore the presentation of these taxes is excluded from revenues and are shown as a liability on the balance sheet until remitted to the appropriate taxing authorities. Research and Development Research and development related costs are charged to operations in the period incurred. Such costs were inconsequential for the year ended December 31, 2016 and amounted to approximately $0.1 million and $0.2 million for the years ended December 31, 2015 and 2014, respectively. Advertising Costs Advertising and promotional costs are expensed as incurred and amounted to approximately $0.6 million, $0.6 million and $0.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. Fair Value of Financial and Derivative Instruments Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. 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 Company’s financial assets and liabilities measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall, as of December 31, 2016 and 2015. Fair Values Measured on a Recurring Basis at December 31, 2016: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 7,596 $ — $ — $ 7,596 Notes receivable $ — $ — $ 1,669 $ 1,669 Total $ 7,596 $ — $ 1,669 $ 9,265 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 Total $ 19,963 $ — $ 1,669 $ 21,632 Quantitative information about the Company’s level 3 fair value measurements at December 31, 2016 is set forth below: $ in thousands Fair Value Valuation Technique Unobservable input Range Note receivable $ 1,669 Discounted cash flow Probability of default Discount rate 57% 18% The notes receivable are recorded at estimated fair value at December 31, 2016 and accrue interest at a rate of 15% per annum. In order to help determine the estimated fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes receivable. During 2016, the probability of default used in the discounted cash flow analysis increased from 55% to 57%. During 2015, new information became available regarding the ability of the debtor to repay the interest on the notes receivable, which caused the Company to change the probability of default used in the discounted cash flow valuation from 0% to 55%. This resulted in a reduction to the fair value of notes receivable of $1.6 million during the year ended December 31, 2015. The significant unobservable inputs used in the fair value measurement of the Company’s 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 Company’s notes receivable fair value: 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 include non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). During 2016, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities. Based on quoted market prices, the market value of the Company’s equity method investments was $14.7 million at December 31, 2016 (see Note 10). Earnings (Loss) Per Common Share Basic earnings per share have been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted earnings per share have 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 reconciliation between basic and diluted earnings per share for the three years ended December 31: 2016 2015 2014 (in thousands) Weighted average common shares outstanding 14,233 14,135 14,061 Assuming conversion of options and restricted stock awards outstanding 95 — — Weighted average common shares outstanding, as adjusted 14,328 14,135 14,061 Grants and options to purchase 407,000, 419,025 and 181,500 shares of common stock were outstanding as of December 31, 2016, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per share as the option’s exercise price was greater than the average market price of the common shares for the respective periods. An additional 95,244 and 126,148 options and restricted stock units were excluded for the year ended December 31, 2016 and 2015, respectively, as their inclusion would be anti-dilutive, thereby increasing or decreasing the net income or loss, respectively, per share. Stock Compensation Plans The Company recognizes compensation expense for all share-based payment awards made to employees and directors based on estimated values on the date of grant. The Company uses the straight-line amortization method over the vesting period of the awards. The Company has historically issued shares upon exercise of stock options or vesting of restricted stock from new stock issuances. 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. The fair value of stock options granted is calculated using the Black-Scholes option pricing model. No share-based compensation cost was capitalized as a part of inventory as of December 31, 2016 and 2015. Post-Retirement Benefits The Company recognizes the overfunded or underfunded position of a defined benefit postretirement plan as an asset or liability in the balance sheet, measures the plan’s assets and its obligations that determine its funded status as of December 31, 2016 and recognizes the changes in the funded status through comprehensive income (loss) in the year in which the changes occur. Foreign Currency Translation For foreign subsidiaries, the environment in which the business conducts operations is considered the functional currency, generally the local currency. The assets and liabilities of foreign subsidiaries are translated into the United States dollar at the foreign exchange rates in effect at the end of the period. Revenue and expenses of foreign subsidiaries are translated using an average of the foreign exchange rates in effect during the period. Translation adjustments are not included in determining net earnings but are presented in comprehensive income (loss) within the consolidated statements of comprehensive income (loss). Transaction gains and losses that arise from foreign exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated statement of operations as incurred. If the Company disposes of its investment in a foreign entity, any gain or loss on currency translation balance recorded in accumulated other comprehensive income is recognized as part of the gain or loss on disposition. Undistributed earnings of the Company’s foreign subsidiaries totaling $22.8 million are considered to not be permanently reinvested and the applicable portion of accumulated other comprehensive income (loss) has been tax effected. The components of accumulated other comprehensive income (loss) related to the earnings of foreign subsidiaries that are considered to be indefinitely reinvested have not been tax effected. Warranty Reserves Historically, the Company has generally granted a warranty to its customers for a one-year period following the sale of manufactured film projection equipment and on selected repaired equipment for a one-year period. In most instances, the digital products are covered by the manufacturing firm’s OEM warranty; however, there are certain customers where the Company may grant warranties in excess of the manufacturer’s warranty for digital products. The Company accrues for these costs at the time of sale. The following table summarizes warranty activity for the three years ended December 31, 2016. 2016 2015 2014 (in thousands) Warranty accrual at beginning of period $ 310 $ 355 $ 244 Charged to expense 933 583 332 Amounts written off, net of recoveries (600 ) (592 ) (211 ) Foreign currency translation adjustment 2 (36 ) (10 ) Warranty accrual at end of period $ 645 $ 310 $ 355 Contingencies The Company accrues for contingencies when its assessments indicate that it is probable that a liability has been incurred and an amount can be reasonably estimated. The Company’s estimates are based on currently available facts and its estimates of the ultimate outcome or resolution. Actual results may differ from the Company’s estimates resulting in an impact, positive or negative, on earnings. 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. The Company has obtained an understanding of ASU 2014-09 and has begun to analyze the impact of the new standard on its financial results. The Company has completed a high-level assessment of the attributes within its contracts for its major products and services, and has started assessing potential impacts to its internal processes, control environment, and disclosures. While the Company has not yet determined the method of adoption, it will elect or quantified the impact of the adoption of ASU 2014-09 will have on the consolidated financial statements, the Company is continuing to evaluate the impact of the new standard on our financial results and other possible impacts. The Company will continue to provide enhanced disclosures as we continue our assessment. 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 Company’s 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 entity’s 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 Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months, on its balance sheet. This ASU is effective in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method. The Company is evaluating the requirements of ASU 2016-02 and its potential impact on the Company’s financial statements. The Company has leases primarily for property and equipment and is in the process of identifying and evaluating these leases in relation to the requirements of ASU 2016-02. For each of these leases, the term will be evaluated, including extension and renewal options as well as the lease payments associated with the leases. While the Company has not yet quantified the impact of the adoption of ASU 2016-02 will have on its consolidated financial statements, the Company expects to record assets and liabilities on its balance sheet upon adoption of this standard, which may be material. The Company will continue to provide enhanced disclosures as it continues its assessment. In March 2016, the FASB issued ASU 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): 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 adopted ASU 2016-07 in 2016. As a result, the Company did not restate prior periods in its consolidated financial statements when the accounting for the investment in PIH changed from fair value to the equity method in the fourth quarter of 2016 due to additional investments and Company representation on PIH’s board of directors. In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“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, and 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 Company’s consolidated financial statements due to the lack of significant exercises of Company stock options. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This ASU will require the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. The Company believes its adoption will not significantly impact the Company’s results of operations and financial position. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which eliminates the diversity in practice related to eight cash flow classification issues. This ASU is effective for the Company on January 1, 2018 with early adoption permitted. The Company believes its adoption will not significantly impact the Company’s results of operations and financial position. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (“ASU 2016-16” |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories consist of the following: December 31, 2016 December 31, 2015 (in thousands) Raw materials and components $ 1,341 $ 1,351 Work in process 247 190 Finished goods 4,975 5,651 $ 6,563 $ 7,192 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 5. Property, Plant and Equipment Property, plant and equipment include the following: December 31, 2016 December 31, 2015 (in thousands) Land $ 1,596 $ 1,596 Buildings and improvements 8,728 8,989 Machinery and equipment 3,884 3,692 Office furniture and fixtures 4,045 4,011 Software 508 — Total properties cost 18,761 18,288 Less accumulated depreciation (7,066 ) (6,585 ) Net property, plant and equipment $ 11,695 $ 11,703 Depreciation expense approximated $2.0 million, $2.1 million and $1.6 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | 6. Restructuring Activities 2015 Corporate-wide Strategic Initiative In connection with its strategic planning process, as well as the Company’s ongoing plans to improve efficiency and effectiveness of its operations, the Company initiated plans in the second quarter of 2015 to reduce headcount and more efficiently utilize real estate assets. Included in administrative expenses for year ended December 31, 2015, are $0.6 million and $0.2 million of severance and lease termination costs, respectively, that the Company incurred as part of this restructuring plan. The corporate-wide strategic initiative was completed in the third quarter of 2016. 2013 Convergent Related Restructuring In connection with the integration of the 2013 CMS acquisition, as well as the Company’s ongoing plans to improve efficiency and effectiveness of its operations, the Company initiated plans in the fourth quarter of 2013 to reduce headcount and move the Company’s warehouse from Omaha, Nebraska to Georgia. In 2013, the Company recorded $1.5 million in severance costs that it expected to incur as part of the integration of CMS and for site closure of the Omaha warehouse. The restructuring initiative was completed during the first quarter of 2015. The following reconciles the activity in the restructuring related severance accruals for the years ended December 31, 2016, 2015, and 2014, which are included in accrued expenses: 2015 Strategic Initiative 2013 Convergent related restructuring Total Restructuring (in thousands) Balance, restructuring liability at December 31, 2013 $ — $ 896 $ 896 Severance paid — (709 ) (709 ) Balance, restructuring liability at December 31, 2014 — 187 187 Lease termination expense 219 — 219 Lease termination paid (219 ) — (219 ) Severance expense 559 — 559 Severance paid (486 ) (187 ) (673 ) Balance, restructuring liability at December 31, 2015 73 — 73 Severance paid (73 ) — (73 ) Balance, restructuring liability at December 31, 2016 $ — $ — $ — |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets Intangible assets consisted of the following at December 31, 2016: Useful life Gross Accumulated amortization Net (Years) (in thousands) Intangible assets subject to amortization: Product formulation 10 $ 454 $ (276 ) $ 178 Software 5 1,764 (93 ) 1,671 $ 2,218 $ (369 ) $ 1,849 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 Intangible assets, other than goodwill, with definitive lives are amortized over their useful lives. The Company recorded amortization expense relating to other identifiable intangible assets of $0.2 million, $0.3 million and $0.3 million during each of the years ended December 31, 2016, 2015 and 2014, respectively. During 2015, the Company determined that the future undiscounted cash flows from the software intangibles were significantly less than carrying amount of the software intangibles and recorded an impairment charge of $0.6 million for these intangibles to measure them at their fair value. During 2015, gross intangibles were reduced by $0.9 million due to this impairment. Any other change in the cost and accumulated amortization of the identifiable assets was due to certain intangibles recorded in a foreign currency and therefore affected by fluctuations in the exchange rate. The following table shows the Company’s estimated future amortization expense related to intangible assets for the next five years. Amount (in thousands) 2017 $ 404 2018 395 2019 383 2020 375 2021 280 Thereafter 12 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 8. Goodwill All of the Company’s goodwill is related to the Cinema segment. The following represents a summary of changes in the Company’s carrying amount of goodwill (in thousands): Balance as of December 31, 2014 $ 1,029 Foreign currency translation (166 ) Balance as of December 31, 2015 $ 863 Foreign currency translation 26 Balance as of December 31, 2016 $ 889 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 9. Accrued Expenses The major components of current accrued expenses are as follows: December 31, 2016 December 31, 2015 (in thousands) Employee related $ 1,785 $ 1,448 Legal and professional fees 295 158 Lease expenses 267 281 Warranty obligation 645 310 Joint venture excess distributions — 502 Interest and taxes 967 521 Post-retirement benefit obligation 13 27 Severance and benefits 4 245 Other 121 91 Total $ 4,097 $ 3,583 The major components of long-term accrued expenses are as follows: December 31, 2016 December 31, 2015 (in thousands) Post-retirement benefit obligation $ 131 $ 318 Rent and leasehold improvements 439 1,263 Total $ 570 $ 1,581 |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | 10. Equity Method Investments The following summarizes our equity method investments: December 31, 2016 December 31, 2015 (in thousands) Entity Carrying Amount Economic Interest Carrying Amount Economic Interest RELM Wireless Corporation $ 4,382 8.3 % $ 4,001 7.8 % Itasca Capital, Ltd. 5,348 32.3 % — — 1347 Property Insurance Holdings, Inc. 3,368 12.1 % — — Total $ 13,098 $ 4,001 The following summarizes the income (loss) of equity method investees reflected in the Statement of Operations: Equity in income (loss) of investee 2016 2015 2014 Entity (in thousands) RELM Wireless Corporation $ 216 $ 1 $ — Itasca Capital, Ltd. (99 ) — — 1347 Property Insurance Holdings, Inc. — — — Total $ 117 $ 1 $ — 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 year ended December 31, 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 Company’s Chief Executive Officer is member of the board of directors of RELM, and controls entities that, when combined with the Company’s ownership in RELM, own greater than 20% of RELM, providing the Company with significant influence over RELM, but not controlling interest. The Company received dividends of $0.2 million, $0, and $0 from RELM in 2016, 2015, and 2014, respectively. Based on quoted market prices, the market value of the Company’s ownership in RELM was $5.4 million at December 31, 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 year ended December 31, 2016 for an additional $0.2 million. Itasca is a publicly traded Canadian company that is an investment vehicle seeking transformative strategic investments. The Company’s Chief Executive Officer is a member of the board of directors of Itasca. This board seat, combined with the Company’s 32.3% ownership of Itasca, provide the Company with significant influence over Itasca, but not controlling interest. The Company did not receive dividends from Itasca in 2016, 2015, or 2014. Based on quoted market prices, the market value of the Company’s ownership in Itasca was $3.7 million at December 31, 2016. In December 2015, the Company acquired 4.4% ownership in 1347 Property Insurance Holdings Inc. (“PIH”) for $2.1 million and increased its ownership to 12.1% during the year ended December 31, 2016 for an additional $3.1 million. PIH is a publicly traded company that provides property and casualty insurance in the States of Louisiana and Texas. The Company’s Chief Executive Officer was named to the board of directors of PIH on December 27, 2016. This board seat and the Chief Executive Officer’s control of other entities that own shares of PIH, combined with the Company’s 12.1% ownership of PIH, provide the Company with significant influence over PIH, but not controlling interest. Prior to the Company’s additional 2016 investment and board seat at PIH, the Company did not have significant influence over PIH and the investment was included in marketable securities and carried at fair value in the balance sheet. The Company did not receive dividends from PIH in 2016, 2015, or 2014. Based on quoted market prices, the market value of the Company’s ownership in PIH was $5.6 million at December 31, 2016. The summarized financial information presented below reflects the aggregated financial information of all significant equity method investees as of and for the twelve months ended September 30 of each year or portion of those twelve months the Company owned its investment, consistent with the Company’s recognition of the results of its equity method investments on a one quarter lag. The summarized financial information is presented only for the periods when the Company owned its investment. For the twelve months ended September 30, 2016 (in thousands) Revenue $ 44,621 Gross profit $ 14,514 Operating income $ 3,204 Net income $ 235 As of September 30, 2016 (in thousands) Current assets $ 30,217 Non-current assets $ 23,274 Current liabilities $ 5,709 Non-current liabilities $ 394 Redeemable stock $ — Non-controlling interests $ — Company’s share of equity in net assets $ 6,244 The difference between our share of equity in net assets as shown in the above table and the investment in non-consolidated companies as shown on the Consolidated Balance Sheets is due to an excess amount paid over the book value of the investment and is accounted for as equity method goodwill. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes Income (loss) before income taxes consists of: 2016 2015 2014 (in thousands) United States $ (5,351 ) $ (16,630 ) $ (9,773 ) Foreign 9,716 12,944 9,527 $ 4,365 $ (3,686 ) $ (246 ) Income tax expense (benefit) attributable to income from continuing operations consists of: 2016 2015 2014 (in thousands) Federal: Current $ 10 $ 1,575 $ 688 Deferred (34 ) 7,348 (3,357 ) Total (24 ) 8,923 (2,669 ) State: Current 173 (1,301 ) 321 Deferred 28 635 (589 ) Total 201 (666 ) (268 ) Foreign: Current 2,810 3,597 3,196 Deferred (189 ) 1,184 (647 ) Total 2,621 4,781 2,549 $ 2,798 $ 13,038 $ (388 ) Income tax expense attributable to income (loss) from continuing operations differed from the amounts computed by applying the U.S. Federal income tax rate to pretax income from continuing operations as follows: 2016 2015 2014 Amount % Amount % Amount % (in thousands) Expected federal income tax expense (benefit) $ 1,484 34.0 $ (1,253 ) (34.0 ) $ (84 ) (34.0 ) State income taxes, net of federal benefit 200 4.6 (324 ) (8.8 ) (148 ) (59.9 ) Foreign tax rates varying from 34% (638 ) (14.6 ) (871 ) (23.6 ) (622 ) (251.8 ) Change in foreign reinvestment strategy 309 7.1 6,650 180.4 429 173.6 Valuation Allowance (51 ) (1.2 ) 8,856 240.2 — — Section 956 Inclusion 1,615 37.0 — — — — Return to provision (193 ) (4.4 ) (8 ) (0.2 ) 22 8.9 Other 72 1.7 (12 ) (0.3 ) 15 6.1 Total $ 2,798 64.1 $ 13,038 353.7 $ (388 ) (157.1 ) Deferred tax assets and liabilities were comprised of the following: December 31, 2016 2015 Deferred tax assets: (in thousands) Deferred revenue $ 1,672 $ 1,567 Non-deductible accruals 187 261 Inventory reserves 567 480 Stock compensation expense 281 215 Warranty reserves 204 107 Uncollectible receivable reserves 409 459 Accrued group health insurance claims (66 ) 137 Restructuring reserves — 90 Net operating losses 6,240 6,641 Fair value adjustment to notes receivable 633 637 Foreign tax credits 2,960 2,868 Depreciation and amortization 671 448 Equity in income (loss) of equity method investments 163 47 Accumulated other comprehensive income 1,685 1,745 Net deferred tax assets 15,606 15,702 Valuation allowance (8,393 ) (8,457 ) Net deferred tax assets after valuation allowance 7,213 7,245 Deferred tax liabilities: Depreciation and amortization 6 487 Cash repatriation 8,721 8,472 Other 6 2 Net deferred tax assets (liabilities) $ (1,520 ) $ (1,716 ) 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 $8.4 million and $8.5 million, respectively, should be recorded against the Company’s U.S. tax jurisdiction deferred tax assets as of December 31, 2016 and 2015, respectively. No valuation allowance was recorded in 2014. The tax effect of the Company’s net operating loss carryforwards for Federal and state tax purposes total approximately $6.2 million at December 31, 2016, expiring at various times in 2023 through 2025. The Company has foreign tax credit carryforwards of approximately $3.0 million at December 31, 2016 that expire in 2024. The Company has recorded income taxes of $8.7 million on accumulated but undistributed earnings for foreign subsidiaries aggregating approximately $22.8 million at December 31, 2016, resulting in a deferred tax liability of $8.7 million. These earnings are not considered permanently reinvested in the business and will be transferred to the United States as required by business needs. 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 jurisdiction’s statute of limitations. Estimated amounts related to underpayment of income taxes, including interest and penalties, are classified as a component of tax expense in the consolidated statements of operations and were not material for the years ended December 31, 2016, 2015 and 2014. Amounts accrued for estimated underpayment of income taxes were zero as of December 31, 2016 and December 31, 2015. |
Financing Receivable
Financing Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Financing Receivable | 12. Financing Receivable The following table presents sales-type lease receivables. December 31, 2016 December 31, 2015 (in thousands) Investment in sales-type leases Current $ 198 $ 1,185 Noncurrent — 198 At December 31, 2016 and 2015, there are no sales-type lease receivables that are past due. Scheduled maturities of minimum lease payments outstanding at December 31, 2016, are as follows: Years ending: Scheduled Payments (in thousands) December 31, 2017 $ 198 |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Notes Receivable | 13. Notes Receivable During 2011, the Company entered into certain unsecured notes receivable arrangements with CDF2 Holdings, LLC pertaining to the sale and installation of digital projection equipment. The notes receivable accrue interest at a rate of 15% per annum. Interest not paid in any particular year is added to the principal and accrues interest at 15%. The Company has recorded the notes receivable at their fair value. See Note 3 for additional information on the fair value of the notes. |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue | 14. Deferred Revenue The Company deferred revenue associated with extended warranties provided to a third party exhibitor in 2011. The Company does not expect to recognize any of the related revenue in 2017, and expects to recognize the remainder no earlier than in 2022 when all conditions of revenue recognition have been met. The following summarizes the amounts included in deferred revenue related to extended warranties. December 31, 2016 December 31, 2015 (in thousands) Extended warranty deferrals expected to be recognized within one year $ — $ 895 Extended warranty deferrals expected to be recognized after one year 1,108 1,108 Total revenue deferred for extended warranty $ 1,108 $ 2,003 |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation | 15. Stock Compensation The Company recognizes compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. Share-based compensation expense included in selling and administrative expenses approximates the following: 2016 2015 2014 (in thousands) Share based compensation expense $ 466 $ 501 $ 427 Long-Term Incentive Plan The Company’s 2010 Long-Term Incentive Plan (“2010 Plan”) provides the Compensation Committee of the Board of Directors with the discretion to grant stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, or performance units. Vesting terms vary with each grant and may be subject to vesting upon a “change in control” of the Company. The total number of shares reserved for issuance under the 2010 Plan is 1,600,000 shares. During 2016, the Company awarded 200,000 stock options and no restricted stock units under the 2010 Plan. During 2015, the Company awarded 383,300 stock options and 87,500 restricted shares under the 2010 Plan. During 2014, the Company awarded no stock options and 172,500 restricted stock units under the 2010 Plan. At December 31, 2016, 852,492 shares remained available for issuance under the 2010 Plan. Options As noted above, under the 2010 Plan, the Company granted options to purchase 200,000 shares and 383,300 shares of the Company’s common stock during 2016 and 2015, respectively. 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 over a five-year period. The weighted average grant date fair value of stock options granted in 2016 and 2015 was $1.81 and $1.44, respectively. 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 2015 Expected dividend yield at date of grant 0.00% 0.00% Risk-free interest rate 1.42% 1.87% Expected stock price volatility 31.36% 32.06% Expected life of options (in years) 6.0 6.0 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 Company’s stock for one year prior to the date of grant. The expected life of options is the average number of years that 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 Company’s activities with respect to its stock options: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) (in thousands) Outstanding at December 31, 2015 450,800 $ 4.48 9.21 $ 131 Granted 200,000 5.53 Exercised (33,000 ) 4.09 Forfeited (72,500 ) 4.50 Outstanding at December 31, 2016 545,300 $ 4.78 9.68 $ 1,757 Exercisable at December 31, 2016 140,300 $ 4.37 8.30 $ 1,218 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 on the date indicated. As of December 31, 2016, 405,000 stock option awards were non-vested. Unrecognized compensation costs related to all stock options outstanding amounted to $0.6 million at December 31, 2016, which is expected to be recognized over a weighted-average period of 4.2 years. Restricted Stock Plans The Ballantyne Strong, Inc. Non-Employee Directors’ Restricted Stock Plan (the “Non-Employee Plan”) and the Ballantyne Strong, Inc. 2014 Non-Employee Directors’ Restricted Stock Plan (the “2014 Non-Employee Plan”) provide for the award of restricted shares to outside directors. Shares issued under the Non-Employee Plan and the 2014 Non-Employee Plan vest the day preceding the Company’s Annual Meeting of Stockholders in the year following issuance. A total of 250,000 shares are reserved for issuance under the Non-Employee Plan and the 2014 Non-Employee Plan. During 2016, 2015, and 2014, 45,555, 53,208 and 41,760 shares, respectively, were granted under the 2014 Non-Employee Plan. The Company awarded a total of 45,555, 140,708, and 214,260 restricted stock units and restricted shares under the 2010 Plan and the 2014 Non-Employee Plan during 2016, 2015 and 2014, respectively. The weighted average grant date fair value of restricted stock awarded in 2016, 2015 and 2014 was $4.89, $4.38, and $3.86 respectively. 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 the restricted stock awards based upon the market price of the underlying common stock on the date of grant. As of December 31, 2016, the total unrecognized compensation cost related to non-vested restricted stock awarded was approximately $0.2 million which is expected to be recognized over a weighted average period of 0.9 years. The following table summarizes restricted stock activity: Number of Restricted Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2015 130,358 $ 4.30 Granted 45,555 4.89 Shares vested (88,243 ) 4.40 Shares forfeited (15,625 ) 3.75 Nonvested at December 31, 2016 72,045 $ 4.67 |
Foreign Exchange Contracts
Foreign Exchange Contracts | 12 Months Ended |
Dec. 31, 2016 | |
Foreign Currency [Abstract] | |
Foreign Exchange Contracts | 16. Foreign Exchange Contracts The Company’s primary exposure to foreign currency fluctuations pertains to its subsidiaries in Canada. In certain instances the Company may enter into foreign exchange forward contracts to manage a portion of this risk. The Company has not designated its foreign exchange forward contracts as hedges. The Company’s foreign exchange forward contracts expired in 2014 and no new contracts were entered into in 2015 or 2016. All cash flows related to our foreign currency exchange contracts are classified as operating cash flows. The Company recognized the following realized and unrealized gains from foreign currency forward exchange contracts in other income: (in thousands) Classification 2016 2015 2014 Foreign exchange forward contracts Other Income (Loss) $ — $ — $ (145 ) |
Compensation and Benefit Plans
Compensation and Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Compensation and Benefit Plans | 17. Compensation and Benefit Plans Retirement Plan The Company sponsors a defined contribution 401(k) plan (the “Plan”) for all eligible employees. Pursuant to the provisions of the Plan, employees may defer up to 100% of their compensation. The Company will match 50% of the amount deferred up to 6% of their compensation. The contributions made to the Plan by the Company were approximately $0.4 million, $0.4 million and $0.3 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | 18. Leases The Company and its subsidiaries lease plant and office facilities, 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. Rent expense under operating lease agreements amounted to approximately $0.4 million, $0.6 million and $0.7 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company also has capital leases for computer equipment. The capital lease obligations related to accrued expenses are included in accrued expenses on the balance sheet. The Company’s future minimum lease payments are as follows: Year Ending December 31, Capital Leases Operating Leases (In thousands) 2017 $ 290 $ 375 2018 248 324 2019 131 292 2020 — 262 2021 — 152 Thereafter — — Total minimum lease payments $ 669 $ 1,405 Less: Amount representing interest 39 Present value of minimum lease payments 630 Less: Current maturities 274 Capital lease obligations, net of current portion $ 356 |
Contingencies and Concentration
Contingencies and Concentrations | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Concentrations | 19. Contingencies and Concentrations Concentrations The Company’s top ten customers accounted for approximately 54% of 2016 consolidated net revenues. Trade accounts receivable from these customers represented approximately 36% of net consolidated receivables at December 31, 2016. Sales to Regal Cinemas in fiscal 2016 amounted to $9.6 million, representing 12.6% of revenues from continuing operations. Litigation The Company is involved, from time to time, in certain legal disputes in the ordinary course of business. No such disputes, individually or in the aggregate, are expected to have a material effect on its business or financial condition at December 31, 2016. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Information | 20. Business Segment Information The Company has two primary operating segments: Cinema and Digital Media. There was no impact on current or prior years to the individual components of these segments. The Cinema segment provides a full range of product solutions primarily for the theatre exhibition industry, including a wide spectrum of premier audio-visual products and accessories such as digital projectors, state of the art projection screens, servers, library management systems, menu boards, flat panel displays, and sound systems. The Digital Media segment delivers solutions and services across two primary markets: digital out-of-home and cinema. While there is digital signage and cinema equipment sold within this segment, the primary focus of this segment is providing solutions and services to our customers. Summary by Business Segments Year ended December 31, 2016 2015 2014 (in thousands) Net Revenue: Cinema $ 41,522 $ 47,430 $ 51,859 Digital Media 36,486 31,837 32,494 Total segment net revenue 78,008 79,267 84,353 Eliminations (1,277 ) (1,208 ) (1,188 ) Total net revenue 76,731 78,059 83,165 Operating income (loss): Cinema 10,572 8,066 6,444 Digital Media 1,798 (1,025 ) (24 ) Total segment operating income 12,370 7,041 6,420 Unallocated general and administrative expenses (7,612 ) (10,824 ) (7,909 ) Gain (loss) on sale or disposal of assets: Cinema (70 ) (370 ) (1 ) Digital Media (21 ) (54 ) 13 Corporate overhead (28 ) — — Total gain (loss) on sale or disposal of assets (118 ) (424 ) 12 Income (loss) from operations 4,641 (4,207 ) (1,477 ) Other income (expense) Cinema 87 262 693 Cinema – fair value adjustment to notes receivable — (1,595 ) — Cinema – excess distribution from joint venture 502 — — Cinema – foreign currency transaction gain (loss) (917 ) 1,875 511 Digital Media – foreign currency transaction gain (loss) (85 ) (263 ) (214 ) Digital Media (14 ) 29 163 Change in value of marketable securities – corporate asset 34 117 — Total other income (393 ) 425 1,153 Income (loss) before taxes and equity method investment income $ 4,248 $ (3,782 ) $ (324 ) Year ended December 31, 2016 2015 2014 (in thousands) Expenditures on capital equipment: Cinema $ 1,996 $ 158 $ 503 Digital Media 1,766 300 1,540 Total expenditures on capital equipment $ 3,762 $ 458 $ 2,043 Depreciation, amortization and impairment: Cinema $ 1,339 $ 1,516 $ 1,160 Digital Media 848 1,425 716 Total depreciation, amortization and impairment $ 2,187 $ 2,941 $ 1,876 December 31, 2016 2015 (in thousands) Identifiable assets, excluding assets held for sale Cinema $ 29,820 $ 38,159 Digital Media 19,794 15,319 Corporate assets 13,098 6,102 Total $ 62,712 $ 59,580 Summary by Geographical Area 2016 2015 2014 (in thousands) Net revenue United States $ 60,394 $ 60,754 $ 62,096 China 5,885 3,654 2,759 Canada 4,616 5,074 5,661 South America 1,681 3,540 8,288 Mexico 2,125 2,870 2,718 Europe 1,148 1,569 1,189 Asia (excluding China) 697 91 294 Other 185 507 160 Total $ 76,731 $ 78,059 $ 83,165 December 31 2016 2015 (in thousands) Identifiable assets, excluding assets held for sale United States $ 30,979 $ 33,882 Canada 31,733 25,698 Total $ 62,712 $ 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. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | 21. Quarterly Financial Data (Unaudited) The following is a summary of the unaudited quarterly results of continuing operations for 2016 and 2015. 2016 2015 First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share data) Net revenue $ 17,114 $ 20,558 $ 18,668 $ 20,391 $ 19,150 $ 17,831 $ 19,746 $ 21,332 Gross profit 5,236 6,149 4,377 5,871 4,255 3,495 3,780 5,181 Net earnings (loss) (613 ) 833 (470 ) 540 (10,164 ) (2,919 ) (3,201 ) (1,183 ) Basic and diluted earnings (loss) per share from continuing operations: Basic (1) (0.05 ) 0.12 (0.03 ) 0.08 (0.72 ) (0.21 ) (0.23 ) (0.08 ) Diluted (1) (0.05 ) 0.12 (0.03 ) 0.08 (0.72 ) (0.21 ) (0.23 ) (0.08 ) Stock price: High 4.77 5.99 7.01 8.00 5.05 5.13 4.88 4.87 Low 4.00 4.21 5.09 6.10 4.01 4.00 3.42 4.24 (1) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 22. Related Party Transactions Pursuant to the proxy contest settlement agreement entered into with Fundamental Global Investors, LLC and certain of its affiliates on April 21, 2015, the Company expanded its Board of Directors to nine directors and nominated five director candidates from Fundamental Global’s slate of directors, who were elected at the 2015 Annual Meeting. Fundamental Global Investors, LLC and its affiliates hold approximately 24.4% of the Company’s outstanding shares of common stock as of December 31, 2016. Mr. D. Kyle Cerminara, the Chief Executive Officer, Co-Founder and Partner of Fundamental Global Investors, LLC, serves as the Company’s Chairman and Chief Executive Officer. The Company reimbursed Fundamental Global for its expenses incurred in connection with the proxy contest and settlement agreement in the amount of $178,415 in 2015. The independent members of the Board of Directors approved the reimbursement. The Company’s purchase of the equity securities that comprise its marketable securities and equity method investments were made in companies in which Fundamental Global has an ownership interest. The independent members of the Board of Directors approved these purchases and the Company made no payments to Fundamental Global related to these purchases. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 23. Subsequent Events There were no subsequent events following the balance sheet date for which accounting and disclosure in these financial statements is required. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | Schedule II Ballantyne Strong, Inc. and Subsidiaries Valuation and Qualifying Accounts (in thousands) Balance at beginning of year Charged to costs and expenses Amounts Written off(1) Foreign Exchange Translation Balance at end of year Allowance for doubtful accounts (continuing operations): Year ended December 31, 2016 $ 1,207 21 (131 ) — $ 1,097 Year ended December 31, 2015 $ 252 1,065 (110 ) — $ 1,207 Year ended December 31, 2014 $ 273 90 (111 ) — $ 252 Inventory reserves (continuing operations): Year ended December 31, 2016 $ 1,233 341 (16 ) — $ 1,558 Year ended December 31, 2015 $ 1,674 1,743 (2,181 ) (3 ) $ 1,233 Year ended December 31, 2014 $ 1,312 434 (71 ) (1 ) $ 1,674 (1) |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when all of the following circumstances are satisfied: ● Persuasive evidence of an arrangement exists; ● Delivery has occurred or services have been rendered; ● The seller’s price to the buyer is fixed or determinable; and ● Collectability is reasonably assured. Within the Digital Media segment, if an arrangement involves multiple deliverables, the items are analyzed to determine the separate units of accounting, whether the items have value on a stand-alone basis and whether there is objective and reliable evidence of their fair values. Within the Digital Media segment, sales are derived from highly customized design integration, and installation of digital media technology solutions for a broad range of applications. The deliverables and timing depend upon the customer’s needs. Because the sales are so highly customized, separate sales are too infrequent to establish vendor specific objective evidence (VSOE). As a result, the Company uses third party evidence for products and best estimate of selling prices for other contract features. For services performed in the Digital Media segment, revenue is recognized when the products have been installed and services have been rendered. Revenues from maintenance support or managed services contracts are deferred and recognized as earned ratably over the service coverage periods. Unbilled revenue represents revenue recognized in accordance with the Company’s revenue recognition policy for which the invoice had not been processed and sent to the customer. Within the Cinema segment, revenue is generally recognized upon shipment of the product; however, there are certain instances where revenue is deferred and recognized upon delivery or customer acceptance of the product as the Company legally retains the risk of loss on these transactions until such time. Costs related to revenues are recognized in the same period in which the specific revenues are recorded. Shipping and handling fees billed to customers are reported in revenue. Shipping and handling costs incurred by the Company are included in cost of sales. Estimates used in the recognition of revenues and cost of revenues include, but are not limited to, estimates for product warranties, price allowances and product returns. |
Cash and Cash Equivalents | Cash and Cash Equivalents All short-term, highly liquid financial instruments are classified as cash equivalents in the consolidated balance sheets and statements of cash flows. Generally, these instruments have maturities of three months or less from date of purchase. As of December 31, 2016, $6.1 million of the $7.6 million in cash and cash equivalents was held by our foreign subsidiaries. |
Marketable Securities | Marketable Securities The Company’s marketable securities were comprised of its investment in the common stock of a publicly traded company, 1347 Property Insurance Holdings, Ltd. (“PIH”), prior to additional investments and representation on the board of directors in 2016, resulting in the Company changing to the equity method of accounting (see Note 10). Changes in fair value, based on the market price of the investee’s stock, were recognized in other income in the consolidated statement of operations. The Company elected the fair value option to account for the investment to more appropriately recognize the value of this investment in the consolidated financial statements. The Company had no marketable securities as of December 31, 2016 and gross unrealized losses were insignificant. Marketable securities at fair value were as follows: December 31, 2015 Cost Gross Unrealized Gains Gross Unrealized Losses Book Value (in thousands) Marketable Securities $ 1,983 $ 118 $ — $ 2,101 |
Equity Method Investments | Equity Method Investments We apply the equity method of accounting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments are reported under the line item captioned equity method investment income in our Consolidated Statements of Operations. The carrying value of our equity method investments is reported in equity method investments in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one quarter lag for all equity method investments. The Company classifies distributions received from equity-method investments using the cumulative earnings approach on the Consolidated Statements of Cash Flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. The Company did not record any impairments related to its investments in 2016, 2015 or 2014. Note 10 contains additional information on our equity method investments, which are held by our Cinema segment. |
Accounts, Financing and Notes Receivable | Accounts, Financing and Notes Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the reserve level and bad debt expense to adjust accordingly. Notes receivable are recorded at estimated fair value at December 31, 2016 and accrue interest at 15%. The Company estimates allowances for doubtful accounts based on the Company’s best estimates of the amount of probable credit losses pertaining to the trade accounts receivables, based on ongoing monitoring of the counterparty’s financial position and results of operations. Past due accounts are written off for accounts, financing and notes receivable when our efforts have been unsuccessful in collecting amounts due. |
Inventories | Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and include appropriate elements of material, labor and manufacturing overhead. Inventory balances are net of reserves of slow moving or obsolete inventory based on management’s review of inventories on hand compared to estimated future usage and sales, technological changes and product pricing. |
Business Combinations | Business Combinations The Company uses the acquisition method in accounting for acquired businesses. Under the acquisition method, the financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. As a result, in the case of significant acquisitions the Company normally obtains the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets. The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. |
Intangible Assets | Intangible Assets The Company’s amortizable intangibles consist of trademarks, customer relationships, software, and product formulation. The Company evaluates its intangible assets for impairment when there is evidence that events or circumstances indicate that the carrying amount of these assets may not be recoverable. Intangible assets with definite lives are amortized over their respective estimated useful lives to their estimated residual values. Significant judgments and assumptions are required in the impairment evaluations. See Note 7 for further information regarding impairment on intangible assets taken in 2015. |
Goodwill | Goodwill Goodwill is not amortized and is tested for impairment at least annually, or whenever events or changes in circumstances indicate the carrying amount of the asset may be impaired. Significant judgment is involved in determining if an indicator of impairment has occurred. The Company may consider indicators such as deterioration in general economic conditions, adverse changes in the markets in which the reporting unit operates, increases in input costs that have negative effects on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill. The Company may first review for goodwill impairment by assessing qualitative factors to determine whether any impairment may exist. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative two-step test is required; otherwise, no further testing is required. However, the Company also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test. Under the first step of the quantitative test, the fair value of each reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, step two is not performed. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and step two of the quantitative impairment test (measurement) is performed. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the fair value of that goodwill. The fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the fair value of the reporting unit goodwill. Goodwill at December 31, 2016 was recorded in connection with the acquisition of Peintures Elite, Inc. in 2013. A qualitative assessment was performed for the year ended December 31, 2016 and it was determined no events had occurred since the acquisition that would indicate an impairment was more likely than not. |
Property, Plant and Equipment | Property, Plant and Equipment Significant expenditures for the replacement or expansion of property, plant and equipment are capitalized. Depreciation of property, plant and equipment is provided over the estimated useful lives of the respective assets using the straight-line method. For financial reporting purposes, assets are depreciated over the estimated useful lives of 20 years for buildings and improvements, life of the related lease for leasehold improvements, 3 to 10 years for machinery and equipment, 7 years for furniture and fixtures and 3 years for computers and accessories. The Company generally uses accelerated methods of depreciation for income tax purposes. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of property, plant and equipment is based on management’s estimates of future undiscounted cash flows and these estimates may vary due to a number of factors, some of which may be outside of management’s control. To the extent that the Company is unable to achieve management’s forecasts of future income, it may become necessary to record impairment losses for any excess of the net book value of property, plant and equipment over their fair value. The Company did not record any impairments related to property, plant and equipment in 2016, 2015, or 2014. The Company incurs maintenance costs on all of its major equipment. Repair and maintenance costs are expensed as incurred. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. The Company uses an estimate of its annual effective rate at each interim period based on the facts and circumstances at the time while the actual effective rate is calculated at year-end. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing whether the deferred tax assets are realizable management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s uncertain tax positions are evaluated in a two-step process, whereby 1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and 2) for those tax positions that meet the more likely than not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority. The Company accrues interest and penalties related to uncertain tax positions in the statements of income as income tax expense. |
Other Taxes | Other Taxes Sales taxes assessed by governmental authorities, including sales, use, and excise taxes, are recorded on a net basis and therefore the presentation of these taxes is excluded from revenues and are shown as a liability on the balance sheet until remitted to the appropriate taxing authorities. |
Research and Development | Research and Development Research and development related costs are charged to operations in the period incurred. Such costs were inconsequential for the year ended December 31, 2016 and amounted to approximately $0.1 million and $0.2 million for the years ended December 31, 2015 and 2014, respectively. |
Advertising Costs | Advertising Costs Advertising and promotional costs are expensed as incurred and amounted to approximately $0.6 million, $0.6 million and $0.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Fair Value of Financial and Derivative Instruments | Fair Value of Financial and Derivative Instruments Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. 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 Company’s financial assets and liabilities measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall, as of December 31, 2016 and 2015. Fair Values Measured on a Recurring Basis at December 31, 2016: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 7,596 $ — $ — $ 7,596 Notes receivable $ — $ — $ 1,669 $ 1,669 Total $ 7,596 $ — $ 1,669 $ 9,265 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 Total $ 19,963 $ — $ 1,669 $ 21,632 Quantitative information about the Company’s level 3 fair value measurements at December 31, 2016 is set forth below: $ in thousands Fair Value Valuation Technique Unobservable input Range Note receivable $ 1,669 Discounted cash flow Probability of default Discount rate 57% 18% The notes receivable are recorded at estimated fair value at December 31, 2016 and accrue interest at a rate of 15% per annum. In order to help determine the estimated fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes receivable. During 2016, the probability of default used in the discounted cash flow analysis increased from 55% to 57%. During 2015, new information became available regarding the ability of the debtor to repay the interest on the notes receivable, which caused the Company to change the probability of default used in the discounted cash flow valuation from 0% to 55%. This resulted in a reduction to the fair value of notes receivable of $1.6 million during the year ended December 31, 2015. The significant unobservable inputs used in the fair value measurement of the Company’s 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 Company’s notes receivable fair value: 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 include non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). During 2016, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities. Based on quoted market prices, the market value of the Company’s equity method investments was $14.7 million at December 31, 2016 (see Note 10). |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share Basic earnings per share have been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted earnings per share have 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 reconciliation between basic and diluted earnings per share for the three years ended December 31: 2016 2015 2014 (in thousands) Weighted average common shares outstanding 14,233 14,135 14,061 Assuming conversion of options and restricted stock awards outstanding 95 — — Weighted average common shares outstanding, as adjusted 14,328 14,135 14,061 Grants and options to purchase 407,000, 419,025 and 181,500 shares of common stock were outstanding as of December 31, 2016, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per share as the option’s exercise price was greater than the average market price of the common shares for the respective periods. An additional 95,244 and 126,148 options and restricted stock units were excluded for the year ended December 31, 2016 and 2015, respectively, as their inclusion would be anti-dilutive, thereby increasing or decreasing the net income or loss, respectively, per share. |
Stock Compensation Plans | Stock Compensation Plans The Company recognizes compensation expense for all share-based payment awards made to employees and directors based on estimated values on the date of grant. The Company uses the straight-line amortization method over the vesting period of the awards. The Company has historically issued shares upon exercise of stock options or vesting of restricted stock from new stock issuances. 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. The fair value of stock options granted is calculated using the Black-Scholes option pricing model. No share-based compensation cost was capitalized as a part of inventory as of December 31, 2016 and 2015. |
Post-Retirement Benefits | Post-Retirement Benefits The Company recognizes the overfunded or underfunded position of a defined benefit postretirement plan as an asset or liability in the balance sheet, measures the plan’s assets and its obligations that determine its funded status as of December 31, 2016 and recognizes the changes in the funded status through comprehensive income (loss) in the year in which the changes occur. |
Foreign Currency Translation | Foreign Currency Translation For foreign subsidiaries, the environment in which the business conducts operations is considered the functional currency, generally the local currency. The assets and liabilities of foreign subsidiaries are translated into the United States dollar at the foreign exchange rates in effect at the end of the period. Revenue and expenses of foreign subsidiaries are translated using an average of the foreign exchange rates in effect during the period. Translation adjustments are not included in determining net earnings but are presented in comprehensive income (loss) within the consolidated statements of comprehensive income (loss). Transaction gains and losses that arise from foreign exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated statement of operations as incurred. If the Company disposes of its investment in a foreign entity, any gain or loss on currency translation balance recorded in accumulated other comprehensive income is recognized as part of the gain or loss on disposition. Undistributed earnings of the Company’s foreign subsidiaries totaling $22.8 million are considered to not be permanently reinvested and the applicable portion of accumulated other comprehensive income (loss) has been tax effected. The components of accumulated other comprehensive income (loss) related to the earnings of foreign subsidiaries that are considered to be indefinitely reinvested have not been tax effected. |
Warranty Reserves | Warranty Reserves Historically, the Company has generally granted a warranty to its customers for a one-year period following the sale of manufactured film projection equipment and on selected repaired equipment for a one-year period. In most instances, the digital products are covered by the manufacturing firm’s OEM warranty; however, there are certain customers where the Company may grant warranties in excess of the manufacturer’s warranty for digital products. The Company accrues for these costs at the time of sale. The following table summarizes warranty activity for the three years ended December 31, 2016. 2016 2015 2014 (in thousands) Warranty accrual at beginning of period $ 310 $ 355 $ 244 Charged to expense 933 583 332 Amounts written off, net of recoveries (600 ) (592 ) (211 ) Foreign currency translation adjustment 2 (36 ) (10 ) Warranty accrual at end of period $ 645 $ 310 $ 355 |
Contingencies | Contingencies The Company accrues for contingencies when its assessments indicate that it is probable that a liability has been incurred and an amount can be reasonably estimated. The Company’s estimates are based on currently available facts and its estimates of the ultimate outcome or resolution. Actual results may differ from the Company’s estimates resulting in an impact, positive or negative, on earnings. |
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. The Company has obtained an understanding of ASU 2014-09 and has begun to analyze the impact of the new standard on its financial results. The Company has completed a high-level assessment of the attributes within its contracts for its major products and services, and has started assessing potential impacts to its internal processes, control environment, and disclosures. While the Company has not yet determined the method of adoption, it will elect or quantified the impact of the adoption of ASU 2014-09 will have on the consolidated financial statements, the Company is continuing to evaluate the impact of the new standard on our financial results and other possible impacts. The Company will continue to provide enhanced disclosures as we continue our assessment. 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 Company’s 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 entity’s 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 Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months, on its balance sheet. This ASU is effective in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method. The Company is evaluating the requirements of ASU 2016-02 and its potential impact on the Company’s financial statements. The Company has leases primarily for property and equipment and is in the process of identifying and evaluating these leases in relation to the requirements of ASU 2016-02. For each of these leases, the term will be evaluated, including extension and renewal options as well as the lease payments associated with the leases. While the Company has not yet quantified the impact of the adoption of ASU 2016-02 will have on its consolidated financial statements, the Company expects to record assets and liabilities on its balance sheet upon adoption of this standard, which may be material. The Company will continue to provide enhanced disclosures as it continues its assessment. In March 2016, the FASB issued ASU 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): 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 adopted ASU 2016-07 in 2016. As a result, the Company did not restate prior periods in its consolidated financial statements when the accounting for the investment in PIH changed from fair value to the equity method in the fourth quarter of 2016 due to additional investments and Company representation on PIH’s board of directors. In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“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, and 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 Company’s consolidated financial statements due to the lack of significant exercises of Company stock options. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This ASU will require the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. The Company believes its adoption will not significantly impact the Company’s results of operations and financial position. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which eliminates the diversity in practice related to eight cash flow classification issues. This ASU is effective for the Company on January 1, 2018 with early adoption permitted. The Company believes its adoption will not significantly impact the Company’s results of operations and financial position. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (“ASU 2016-16”), which requires entities to recognize the tax consequences of intercompany asset transfers other than inventory transfers in the period in which the transfer takes place. ASU 2016-16 is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017. ASU 2016-16 is to be adopted using a modified retrospective approach with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The cumulative effect adjustment will include recognition of the income tax consequences of intra-entity transfers of assets other than inventory that occur before the adoption date. Early adoption is permitted at the beginning of an annual period. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”), which requires that the amounts generally described as restricted cash or restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-the period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 does not provide a definition of restricted cash or restricted cash equivalents. ASU 2016-18 is effective for fiscal years and interim periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2016-18 to have any impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The new guidance eliminates Step 2 of the goodwill impairment testing which requires the fair value of individual assets and liabilities of a reporting unit to be determined when measuring goodwill impairment. The new guidance may result in different amounts of impairment that could be recognized compared to existing guidance. In addition, failing step 1 of the impairment test may not result in impairment under existing guidance. However, under the revised guidance, failing step 1 will always result in a goodwill impairment. ASU 2017-04 is to be applied prospectively for goodwill impairment testing performed in years beginning after December 15, 2019. The Company does not believe the adoption will significantly impact the Company’s results of operations or financial position. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 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): Years ended December 31, 2016 2015 2014 Total net revenues $ 6,864 $ 14,769 $ 11,922 Total cost of revenues 6,351 13,896 10,850 Total selling and administrative expenses 1,131 1,621 1,397 Loss from operations of discontinued operations (618 ) (749 ) (325 ) Loss before income taxes $ (1,162 ) $ (781 ) $ (222 ) Income tax expense (benefit) 114 (37 ) (77 ) Net loss from discontinued operations, net of tax $ (1,277 ) $ (743 ) $ (146 ) The assets and liabilities classified as held for sale reflected in the condensed consolidated balance sheets were as follows (in thousands): December 31, 2016 December 31, 2015 Current assets: Cash and cash equivalents $ 175 $ 4,208 Accounts receivable, net — 327 Total inventories, net — 2,500 Other current assets 13 184 Total current assets held for sale $ 188 $ 7,219 Property, plant and equipment, net $ — $ 65 Total noncurrent assets held for sale $ — $ 65 Current liabilities: Accounts payable $ 33 $ 2,421 Accrued expenses 11 516 Customer deposits/deferred revenue 13 1,458 Total current liabilities $ 57 $ 4,395 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Marketable Securities | Marketable securities at fair value were as follows: December 31, 2015 Cost Gross Unrealized Gains Gross Unrealized Losses Book Value (in thousands) Marketable Securities $ 1,983 $ 118 $ — $ 2,101 |
Schedule of Fair Value Measured Financial Assets and Liabilities | Fair Values Measured on a Recurring Basis at December 31, 2016: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 7,596 $ — $ — $ 7,596 Notes receivable $ — $ — $ 1,669 $ 1,669 Total $ 7,596 $ — $ 1,669 $ 9,265 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 Total $ 19,963 $ — $ 1,669 $ 21,632 |
Summary of Quantitative Information About Company's Level 3 Fair Value Measurements | Quantitative information about the Company’s level 3 fair value measurements at December 31, 2016 is set forth below: $ in thousands Fair Value Valuation Technique Unobservable input Range Note receivable $ 1,669 Discounted cash flow Probability of default Discount rate 57% 18% |
Summary of Notes Receivable Reconciliation | The following table reconciles the beginning and ending balance of the Company’s notes receivable fair value: 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 |
Schedule of Reconciliation Between Basic and Diluted Earnings Per Share | The following table provides reconciliation between basic and diluted earnings per share for the three years ended December 31: 2016 2015 2014 (in thousands) Weighted average common shares outstanding 14,233 14,135 14,061 Assuming conversion of options and restricted stock awards outstanding 95 — — Weighted average common shares outstanding, as adjusted 14,328 14,135 14,061 |
Schedule of Product Warranty Liability | The Company accrues for these costs at the time of sale. The following table summarizes warranty activity for the three years ended December 31, 2016. 2016 2015 2014 (in thousands) Warranty accrual at beginning of period $ 310 $ 355 $ 244 Charged to expense 933 583 332 Amounts written off, net of recoveries (600 ) (592 ) (211 ) Foreign currency translation adjustment 2 (36 ) (10 ) Warranty accrual at end of period $ 645 $ 310 $ 355 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: December 31, 2016 December 31, 2015 (in thousands) Raw materials and components $ 1,341 $ 1,351 Work in process 247 190 Finished goods 4,975 5,651 $ 6,563 $ 7,192 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment include the following: December 31, 2016 December 31, 2015 (in thousands) Land $ 1,596 $ 1,596 Buildings and improvements 8,728 8,989 Machinery and equipment 3,884 3,692 Office furniture and fixtures 4,045 4,011 Software 508 — Total properties cost 18,761 18,288 Less accumulated depreciation (7,066 ) (6,585 ) Net property, plant and equipment $ 11,695 $ 11,703 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Beginning and Ending Restructuring Balance Included in Accrued Expenses | The following reconciles the activity in the restructuring related severance accruals for the years ended December 31, 2016, 2015, and 2014, which are included in accrued expenses: 2015 Strategic Initiative 2013 Convergent related restructuring Total Restructuring (in thousands) Balance, restructuring liability at December 31, 2013 $ — $ 896 $ 896 Severance paid — (709 ) (709 ) Balance, restructuring liability at December 31, 2014 — 187 187 Lease termination expense 219 — 219 Lease termination paid (219 ) — (219 ) Severance expense 559 — 559 Severance paid (486 ) (187 ) (673 ) Balance, restructuring liability at December 31, 2015 73 — 73 Severance paid (73 ) — (73 ) Balance, restructuring liability at December 31, 2016 $ — $ — $ — |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following at December 31, 2016: Useful life Gross Accumulated amortization Net (Years) (in thousands) Intangible assets subject to amortization: Product formulation 10 $ 454 $ (276 ) $ 178 Software 5 1,764 (93 ) 1,671 $ 2,218 $ (369 ) $ 1,849 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 Company’s estimated future amortization expense related to intangible assets for the next five years. Amount (in thousands) 2017 $ 404 2018 395 2019 383 2020 375 2021 280 Thereafter 12 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | All of the Company’s goodwill is related to the Cinema segment. The following represents a summary of changes in the Company’s carrying amount of goodwill (in thousands): Balance as of December 31, 2014 $ 1,029 Foreign currency translation (166 ) Balance as of December 31, 2015 $ 863 Foreign currency translation 26 Balance as of December 31, 2016 $ 889 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | The major components of current accrued expenses are as follows: December 31, 2016 December 31, 2015 (in thousands) Employee related $ 1,785 $ 1,448 Legal and professional fees 295 158 Lease expenses 267 281 Warranty obligation 645 310 Joint venture excess distributions — 502 Interest and taxes 967 521 Post-retirement benefit obligation 13 27 Severance and benefits 4 245 Other 121 91 Total $ 4,097 $ 3,583 |
Schedule of Long Term Accrued Liabilities | The major components of long-term accrued expenses are as follows: December 31, 2016 December 31, 2015 (in thousands) Post-retirement benefit obligation $ 131 $ 318 Rent and leasehold improvements 439 1,263 Total $ 570 $ 1,581 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Equity Method Investments | The following summarizes our equity method investments: December 31, 2016 December 31, 2015 (in thousands) Entity Carrying Amount Economic Interest Carrying Amount Economic Interest RELM Wireless Corporation $ 4,382 8.3 % $ 4,001 7.8 % Itasca Capital, Ltd. 5,348 32.3 % — — 1347 Property Insurance Holdings, Inc. 3,368 12.1 % — — Total $ 13,098 $ 4,001 |
Summary of Income (Loss) of Equity Method Investees | The following summarizes the income (loss) of equity method investees reflected in the Statement of Operations: Equity in income (loss) of investee 2016 2015 2014 Entity (in thousands) RELM Wireless Corporation $ 216 $ 1 $ — Itasca Capital, Ltd. (99 ) — — 1347 Property Insurance Holdings, Inc. — — — Total $ 117 $ 1 $ — |
Summarized Financial Information | The summarized financial information is presented only for the periods when the Company owned its investment. For the twelve months ended September 30, 2016 (in thousands) Revenue $ 44,621 Gross profit $ 14,514 Operating income $ 3,204 Net income $ 235 As of September 30, 2016 (in thousands) Current assets $ 30,217 Non-current assets $ 23,274 Current liabilities $ 5,709 Non-current liabilities $ 394 Redeemable stock $ — Non-controlling interests $ — Company’s share of equity in net assets $ 6,244 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income (loss) before income taxes consists of: 2016 2015 2014 (in thousands) United States $ (5,351 ) $ (16,630 ) $ (9,773 ) Foreign 9,716 12,944 9,527 $ 4,365 $ (3,686 ) $ (246 ) |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) attributable to income from continuing operations consists of: 2016 2015 2014 (in thousands) Federal: Current $ 10 $ 1,575 $ 688 Deferred (34 ) 7,348 (3,357 ) Total (24 ) 8,923 (2,669 ) State: Current 173 (1,301 ) 321 Deferred 28 635 (589 ) Total 201 (666 ) (268 ) Foreign: Current 2,810 3,597 3,196 Deferred (189 ) 1,184 (647 ) Total 2,621 4,781 2,549 $ 2,798 $ 13,038 $ (388 ) |
Schedule of Effective Income Tax Rate Reconciliation | Income tax expense attributable to income (loss) from continuing operations differed from the amounts computed by applying the U.S. Federal income tax rate to pretax income from continuing operations as follows: 2016 2015 2014 Amount % Amount % Amount % (in thousands) Expected federal income tax expense (benefit) $ 1,484 34.0 $ (1,253 ) (34.0 ) $ (84 ) (34.0 ) State income taxes, net of federal benefit 200 4.6 (324 ) (8.8 ) (148 ) (59.9 ) Foreign tax rates varying from 34% (638 ) (14.6 ) (871 ) (23.6 ) (622 ) (251.8 ) Change in foreign reinvestment strategy 309 7.1 6,650 180.4 429 173.6 Valuation Allowance (51 ) (1.2 ) 8,856 240.2 — — Section 956 Inclusion 1,615 37.0 — — — — Return to provision (193 ) (4.4 ) (8 ) (0.2 ) 22 8.9 Other 72 1.7 (12 ) (0.3 ) 15 6.1 Total $ 2,798 64.1 $ 13,038 353.7 $ (388 ) (157.1 ) |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities were comprised of the following: December 31, 2016 2015 Deferred tax assets: (in thousands) Deferred revenue $ 1,672 $ 1,567 Non-deductible accruals 187 261 Inventory reserves 567 480 Stock compensation expense 281 215 Warranty reserves 204 107 Uncollectible receivable reserves 409 459 Accrued group health insurance claims (66 ) 137 Restructuring reserves — 90 Net operating losses 6,240 6,641 Fair value adjustment to notes receivable 633 637 Foreign tax credits 2,960 2,868 Depreciation and amortization 671 448 Equity in income (loss) of equity method investments 163 47 Accumulated other comprehensive income 1,685 1,745 Net deferred tax assets 15,606 15,702 Valuation allowance (8,393 ) (8,457 ) Net deferred tax assets after valuation allowance 7,213 7,245 Deferred tax liabilities: Depreciation and amortization 6 487 Cash repatriation 8,721 8,472 Other 6 2 Net deferred tax assets (liabilities) $ (1,520 ) $ (1,716 ) |
Financing Receivable (Tables)
Financing Receivable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Sales-type Lease Receivables | The following table presents sales-type lease receivables. December 31, 2016 December 31, 2015 (in thousands) Investment in sales-type leases Current $ 198 $ 1,185 Noncurrent — 198 |
Schedule of Maturities of Minimum Lease Payments Outstanding | Scheduled maturities of minimum lease payments outstanding at December 31, 2016, are as follows: Years ending: Scheduled Payments (in thousands) December 31, 2017 $ 198 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of Amounts Included in Deferred Revenue Related to Extended Warranties | The following summarizes the amounts included in deferred revenue related to extended warranties. December 31, 2016 December 31, 2015 (in thousands) Extended warranty deferrals expected to be recognized within one year $ — $ 895 Extended warranty deferrals expected to be recognized after one year 1,108 1,108 Total revenue deferred for extended warranty $ 1,108 $ 2,003 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Share-based compensation expense included in selling and administrative expenses approximates the following: 2016 2015 2014 (in thousands) Share based compensation expense $ 466 $ 501 $ 427 |
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 2015 Expected dividend yield at date of grant 0.00% 0.00% Risk-free interest rate 1.42% 1.87% Expected stock price volatility 31.36% 32.06% Expected life of options (in years) 6.0 6.0 |
Summary of Stock Options Activities | The following table summarizes the Company’s activities with respect to its stock options: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) (in thousands) Outstanding at December 31, 2015 450,800 $ 4.48 9.21 $ 131 Granted 200,000 5.53 Exercised (33,000 ) 4.09 Forfeited (72,500 ) 4.50 Outstanding at December 31, 2016 545,300 $ 4.78 9.68 $ 1,757 Exercisable at December 31, 2016 140,300 $ 4.37 8.30 $ 1,218 |
Summary of Restricted Stock Activity | The following table summarizes restricted stock activity: Number of Restricted Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2015 130,358 $ 4.30 Granted 45,555 4.89 Shares vested (88,243 ) 4.40 Shares forfeited (15,625 ) 3.75 Nonvested at December 31, 2016 72,045 $ 4.67 |
Foreign Exchange Contracts (Tab
Foreign Exchange Contracts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments Not Designated as Hedging Instruments [Abstract] | |
Schedule of Realized and Unrealized Gains from Foreign Currency Forward Exchange Contracts | The Company recognized the following realized and unrealized gains from foreign currency forward exchange contracts in other income: (in thousands) Classification 2016 2015 2014 Foreign exchange forward contracts Other Income (Loss) $ — $ — $ (145 ) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Operating Leases Future Minimum Lease Payments | The Company’s future minimum lease payments are as follows: Year Ending December 31, Capital Leases Operating Leases (In thousands) 2017 $ 290 $ 375 2018 248 324 2019 131 292 2020 — 262 2021 — 152 Thereafter — — Total minimum lease payments $ 669 $ 1,405 Less: Amount representing interest 39 Present value of minimum lease payments 630 Less: Current maturities 274 Capital lease obligations, net of current portion $ 356 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Summary by Business Segments Year ended December 31, 2016 2015 2014 (in thousands) Net Revenue: Cinema $ 41,522 $ 47,430 $ 51,859 Digital Media 36,486 31,837 32,494 Total segment net revenue 78,008 79,267 84,353 Eliminations (1,277 ) (1,208 ) (1,188 ) Total net revenue 76,731 78,059 83,165 Operating income (loss): Cinema 10,572 8,066 6,444 Digital Media 1,798 (1,025 ) (24 ) Total segment operating income 12,370 7,041 6,420 Unallocated general and administrative expenses (7,612 ) (10,824 ) (7,909 ) Gain (loss) on sale or disposal of assets: Cinema (70 ) (370 ) (1 ) Digital Media (21 ) (54 ) 13 Corporate overhead (28 ) — — Total gain (loss) on sale or disposal of assets (118 ) (424 ) 12 Income (loss) from operations 4,641 (4,207 ) (1,477 ) Other income (expense) Cinema 87 262 693 Cinema – fair value adjustment to notes receivable — (1,595 ) — Cinema – excess distribution from joint venture 502 — — Cinema – foreign currency transaction gain (loss) (917 ) 1,875 511 Digital Media – foreign currency transaction gain (loss) (85 ) (263 ) (214 ) Digital Media (14 ) 29 163 Change in value of marketable securities – corporate asset 34 117 — Total other income (393 ) 425 1,153 Income (loss) before taxes and equity method investment income $ 4,248 $ (3,782 ) $ (324 ) Year ended December 31, 2016 2015 2014 (in thousands) Expenditures on capital equipment: Cinema $ 1,996 $ 158 $ 503 Digital Media 1,766 300 1,540 Total expenditures on capital equipment $ 3,762 $ 458 $ 2,043 Depreciation, amortization and impairment: Cinema $ 1,339 $ 1,516 $ 1,160 Digital Media 848 1,425 716 Total depreciation, amortization and impairment $ 2,187 $ 2,941 $ 1,876 |
Reconciliation of Assets from Segment to Consolidated | December 31, 2016 2015 (in thousands) Identifiable assets, excluding assets held for sale Cinema $ 29,820 $ 38,159 Digital Media 19,794 15,319 Corporate assets 13,098 6,102 Total $ 62,712 $ 59,580 |
Schedule of Segment Reporting Information by Geographic Area | Summary by Geographical Area 2016 2015 2014 (in thousands) Net revenue United States $ 60,394 $ 60,754 $ 62,096 China 5,885 3,654 2,759 Canada 4,616 5,074 5,661 South America 1,681 3,540 8,288 Mexico 2,125 2,870 2,718 Europe 1,148 1,569 1,189 Asia (excluding China) 697 91 294 Other 185 507 160 Total $ 76,731 $ 78,059 $ 83,165 |
Summary of Identifiable Assets by Geographical Area | December 31 2016 2015 (in thousands) Identifiable assets, excluding assets held for sale United States $ 30,979 $ 33,882 Canada 31,733 25,698 Total $ 62,712 $ 59,580 |
Quarterly Financial Data (Una50
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of the Unaudited Quarterly Results of Operations | The following is a summary of the unaudited quarterly results of continuing operations for 2016 and 2015. 2016 2015 First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share data) Net revenue $ 17,114 $ 20,558 $ 18,668 $ 20,391 $ 19,150 $ 17,831 $ 19,746 $ 21,332 Gross profit 5,236 6,149 4,377 5,871 4,255 3,495 3,780 5,181 Net earnings (loss) (613 ) 833 (470 ) 540 (10,164 ) (2,919 ) (3,201 ) (1,183 ) Basic and diluted earnings (loss) per share from continuing operations: Basic (1) (0.05 ) 0.12 (0.03 ) 0.08 (0.72 ) (0.21 ) (0.23 ) (0.08 ) Diluted (1) (0.05 ) 0.12 (0.03 ) 0.08 (0.72 ) (0.21 ) (0.23 ) (0.08 ) Stock price: High 4.77 5.99 7.01 8.00 5.05 5.13 4.88 4.87 Low 4.00 4.21 5.09 6.10 4.01 4.00 3.42 4.24 (1) |
Schedule II Valuation and Qua51
Schedule II Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation Allowance Accounts for Inventory and Receivables | Schedule II Ballantyne Strong, Inc. and Subsidiaries Valuation and Qualifying Accounts (in thousands) Balance at beginning of year Charged to costs and expenses Amounts Written off(1) Foreign Exchange Translation Balance at end of year Allowance for doubtful accounts (continuing operations): Year ended December 31, 2016 $ 1,207 21 (131 ) — $ 1,097 Year ended December 31, 2015 $ 252 1,065 (110 ) — $ 1,207 Year ended December 31, 2014 $ 273 90 (111 ) — $ 252 Inventory reserves (continuing operations): Year ended December 31, 2016 $ 1,233 341 (16 ) — $ 1,558 Year ended December 31, 2015 $ 1,674 1,743 (2,181 ) (3 ) $ 1,233 Year ended December 31, 2014 $ 1,312 434 (71 ) (1 ) $ 1,674 (1) |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) $ in Thousands | Nov. 04, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Net loss from discontinued operations | $ (1,277) | $ (743) | $ (146) | |
Fourth Quarter of 2016 [Member] | ||||
Loss on disposal of discontinued operations | 600 | |||
SWBTI [Member] | ||||
Proceeds from sale of subsidiaries | $ 400 | |||
China Operations [Member] | ||||
Net loss from discontinued operations | $ 1,500 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Comparative Financial Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Total net revenues | $ 6,864 | $ 14,769 | $ 11,922 | |
Total cost of revenues | 6,351 | 13,896 | 10,850 | |
Total selling and administrative expenses | 1,131 | 1,621 | 1,397 | |
Loss from operations of discontinued operations | (618) | (749) | (325) | |
Loss before income taxes | (1,162) | (781) | (222) | |
Income tax expense (benefit) | 114 | (37) | (77) | |
Net loss from discontinued operations, net of tax | (1,277) | (743) | (146) | |
Cash and cash equivalents | 175 | 4,208 | $ 3,190 | $ 6,352 |
Accounts receivable, net | 327 | |||
Total inventories, net | 2,500 | |||
Other current assets | 13 | 184 | ||
Total current assets held for sale | 188 | 7,219 | ||
Property, plant and equipment, net | 65 | |||
Total noncurrent assets held for sale | 65 | |||
Accounts payable | 33 | 2,421 | ||
Accrued expenses | 11 | 516 | ||
Customer deposits/deferred revenue | 13 | 1,458 | ||
Total current liabilities | $ 57 | $ 4,395 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | |
Cash held in foreign subsidiaries | $ 6,100 | ||||
Cash and cash equivalents | 7,596 | $ 17,862 | $ 19,301 | $ 22,438 | |
Marketable securities | 2,101 | ||||
Time Sharing Transactions, Weighted Average of Stated Interest Rates for Notes Receivable | 15.00% | 15.00% | |||
Research and Development Expense | 100 | 200 | |||
Advertising Expense | $ 600 | 600 | 500 | ||
Percentage of discounted cash flow valuation | 57.00% | ||||
Fair value adjustment | (1,595) | ||||
Share-based compensation cost | |||||
Quoted market value of the company's ownership | $ 14,700 | ||||
Number of options granted not included in the computation of diluted earnings per share | 407,000 | 419,025 | 181,500 | ||
Undistributed earnings of the foreign subsidiaries | $ 22,800 | ||||
Restricted Stock Units [Member] | |||||
Number of options granted not included in the computation of diluted earnings per share | 95,244 | 126,148 | |||
Minimum [Member] | |||||
Percentage of discounted cash flow valuation | 57.00% | 55.00% | |||
Maximum [Member] | |||||
Percentage of discounted cash flow valuation | 55.00% | 0.00% | |||
Machinery and Equipment [Member] | Minimum [Member] | |||||
Property plant and equipment, useful life | 3 years | ||||
Machinery and Equipment [Member] | Maximum [Member] | |||||
Property plant and equipment, useful life | 10 years | ||||
Building and Building Improvements [Member] | |||||
Property plant and equipment, useful life | 20 years | ||||
Office Furniture and Fixtures [Member] | |||||
Property plant and equipment, useful life | 7 years | ||||
Computers And Accessories [Member] | |||||
Property plant and equipment, useful life | 3 years |
Summary of Signficant Accountin
Summary of Signficant Accounting Policies - Schedule of Marketable Securities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Marketable securities, Cost | $ 1,983 |
Marketable securities, Estimated Fair Value | 2,101 |
Marketable Securities [Member] | Gross Unrealized Gains [Member] | |
Marketable securities, Gross Unrealized Gains Loss | 118 |
Marketable Securities [Member] | Gross Unrealized Losses [Member] | |
Marketable securities, Gross Unrealized Gains Loss |
Summary of Significant Accoun56
Summary of Significant Accounting Policies - Schedule of Fair Value Measured Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and cash equivalents | $ 7,596 | $ 17,862 |
Marketable securities | 2,101 | |
Notes receivable | 1,669 | 1,669 |
Total | 9,265 | 21,632 |
Level 1 [Member] | ||
Cash and cash equivalents | 7,596 | 17,862 |
Marketable securities | 2,101 | |
Notes receivable | ||
Total | 7,596 | 19,963 |
Level 2 [Member] | ||
Cash and cash equivalents | ||
Marketable securities | ||
Notes receivable | ||
Total | ||
Level 3 [Member] | ||
Cash and cash equivalents | ||
Marketable securities | ||
Notes receivable | 1,669 | 1,669 |
Total | $ 1,669 | $ 1,669 |
Summary of Significant Accoun57
Summary of Significant Accounting Policies - Summary of Quantitative Information About Company's Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Note receivable | $ 1,669 | $ 1,669 |
Valuation Technique | Discounted cash flow | |
Probability of default | 57.00% | |
Discount rate | 18.00% |
Summary of Significant Accoun58
Summary of Significant Accounting Policies - Summary of Notes Receivable Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Note receivable balance, beginning of period | $ 1,669 | $ 2,985 | |
Interest income accrued | 279 | ||
Fair value adjustment | (1,595) | ||
Note receivable balance, end of period | $ 1,669 | $ 1,669 | $ 2,985 |
Summary of Significant Accoun59
Summary of Significant Accounting Policies - Schedule of Reconciliation Between Basic and Diluted Earnings Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Weighted average common shares outstanding | 14,233,000 | 14,135,000 | 14,061,000 |
Assuming conversion of options and restricted stock awards outstanding | 95,000 | ||
Weighted average common shares outstanding, as adjusted | 14,328,000 | 14,135,000 | 14,061,000 |
Summary of Significant Accoun60
Summary of Significant Accounting Policies - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Warranty accrual at beginning of period | $ 310 | $ 355 | $ 244 |
Charged to expense | 933 | 583 | 332 |
Amounts written off, net of recoveries | (600) | (592) | (211) |
Foreign currency translation adjustment | 2 | (36) | (10) |
Warranty accrual at end of period | $ 645 | $ 310 | $ 355 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 1,700 | $ 1,200 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials and components | $ 1,341 | $ 1,351 |
Work in process | 247 | 190 |
Finished goods | 4,975 | 5,651 |
Inventories net | $ 6,563 | $ 7,192 |
Property, Plant and Equipment63
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 2,000 | $ 2,100 | $ 1,600 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, plant and equipment, gross | $ 18,761 | $ 18,288 |
Less accumulated depreciation | (7,066) | (6,585) |
Net property, plant and equipment | 11,695 | 11,703 |
Land [Member] | ||
Property, plant and equipment, gross | 1,596 | 1,596 |
Buildings and improvements [Member] | ||
Property, plant and equipment, gross | 8,728 | 8,989 |
Machinery and Equipment [Member] | ||
Property, plant and equipment, gross | 3,884 | 3,692 |
Office Furniture and Fixtures [Member] | ||
Property, plant and equipment, gross | 4,045 | 4,011 |
Software [Member] | ||
Property, plant and equipment, gross | $ 508 |
Restructuring Activities (Detai
Restructuring Activities (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2013 | |
Severance costs | $ 559 | |
Lease termination costs | 219 | |
2015 Corporate-wide Strategic Initiative [Member] | Administrative Expenses [Member] | ||
Severance costs | 600 | |
Lease termination costs | $ 200 | |
2013 Convergent Related Restructuring [Member] | Expected To Incur In Relation To Integration [Member] | ||
Severance costs | $ 1,500 |
Restructuring Activities - Sche
Restructuring Activities - Schedule of Beginning and Ending Restructuring Balance Included in Accrued Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accrued liability at beginning of period | $ 73 | $ 187 | $ 896 |
Lease termination expense | 219 | ||
Lease termination paid | (219) | ||
Severance expense | 559 | ||
Severance paid | (73) | (673) | (709) |
Accrued liability at end of period | 73 | 187 | |
2015 Strategic Initiative [Member] | |||
Accrued liability at beginning of period | 73 | ||
Lease termination expense | 219 | ||
Lease termination paid | (219) | ||
Severance expense | 559 | ||
Severance paid | (73) | (486) | |
Accrued liability at end of period | 73 | ||
2013 Convergent Related Restructuring [Member] | |||
Accrued liability at beginning of period | 187 | 896 | |
Lease termination expense | |||
Lease termination paid | |||
Severance expense | |||
Severance paid | (187) | (709) | |
Accrued liability at end of period | $ 187 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 200 | $ 300 | $ 300 |
Assets impairment charges | $ 638 | ||
Gross amount of intangible assets impaired, before considering accumulated amortization | $ 900 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets, Gross | $ 2,218 | |
Intangible assets, Accumulated amortization | (369) | |
Intangible assets, Net | $ 1,849 | |
Production Formulation [Member] | ||
Intangible assets, Useful life | 10 years | 10 years |
Intangible assets, Gross | $ 454 | $ 440 |
Intangible assets, Accumulated amortization | (276) | (205) |
Intangible assets, Net | $ 178 | $ 235 |
Software [Member] | ||
Intangible assets, Useful life | 5 years | |
Intangible assets, Gross | $ 1,764 | |
Intangible assets, Accumulated amortization | (93) | |
Intangible assets, Net | $ 1,671 |
Intangible Assets - Schedule 69
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 404 |
2,018 | 395 |
2,019 | 383 |
2,020 | 375 |
2,021 | 280 |
Thereafter | $ 12 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance | $ 863 | $ 1,029 |
Foreign currency translation | 26 | (166) |
Balance | $ 889 | $ 863 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Employee related | $ 1,785 | $ 1,448 |
Legal and professional fees | 295 | 158 |
Lease expenses | 267 | 281 |
Warranty obligation | 645 | 310 |
Joint venture excess distributions | 502 | |
Interest and taxes | 967 | 521 |
Post-retirement benefit obligation | 13 | 27 |
Severance and benefits | 4 | 245 |
Other | 121 | 91 |
Total | $ 4,097 | $ 3,583 |
Accrued Expenses - Schedule o72
Accrued Expenses - Schedule of Long Term Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Post-retirement benefit obligation | $ 131 | $ 318 |
Rent and leasehold improvements | 439 | 1,263 |
Total | $ 570 | $ 1,581 |
Equity Method Investments (Deta
Equity Method Investments (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 31, 2016 | |
Payments to acquire equity method investments. | $ 7,048,000 | $ 5,983,000 | ||
Quoted market value of the company's ownership | $ 14,700,000 | |||
Relm Wireless Corp [Member] | ||||
Equity method ownership percentage | 8.30% | 7.80% | ||
Equity method investments amount | $ 4,000,000 | |||
Payments to acquire equity method investments. | $ 300,000 | |||
Dividend received | 200,000 | $ 0 | $ 0 | |
Quoted market value of the company's ownership | $ 5,400,000 | |||
Relm Wireless Corp [Member] | Chief Executive Officer [Member] | Minimum [Member] | ||||
Combined equity ownership percentage | 20.00% | |||
Itasca Capital Ltd [Member] | ||||
Equity method ownership percentage | 32.30% | 31.20% | ||
Equity method investments amount | $ 200,000 | $ 3,500,000 | ||
Quoted market value of the company's ownership | $ 3,700,000 | |||
1347 Property Insurance Holdings Inc [Member] | ||||
Equity method ownership percentage | 12.10% | 4.40% | ||
Equity method investments amount | $ 3,100,000 | $ 2,100,000 | ||
Quoted market value of the company's ownership | $ 5,600,000 |
Equity Method Investments - Sum
Equity Method Investments - Summary of Equity Method Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | May 31, 2016 | Dec. 31, 2015 |
Equity investment, Carrying Amount | $ 13,098 | $ 4,001 | |
Relm Wireless Corp [Member] | |||
Equity investment, Carrying Amount | $ 4,382 | $ 4,001 | |
Equity investment, Economic Interest | 8.30% | 7.80% | |
Itasca Capital Ltd [Member] | |||
Equity investment, Carrying Amount | $ 5,348 | ||
Equity investment, Economic Interest | 32.30% | 31.20% | |
1347 Property Insurance Holdings Inc [Member] | |||
Equity investment, Carrying Amount | $ 3,368 | ||
Equity investment, Economic Interest | 12.10% | 4.40% |
Equity Method Investments - S75
Equity Method Investments - Summary of Income (Loss) of Equity Method Investees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity method investment income | $ 117 | $ 96 | $ 78 |
Equity Method Investments [Member] | |||
Equity method investment income | 117 | 1 | |
Relm Wireless Corp [Member] | Equity Method Investments [Member] | |||
Equity method investment income | 216 | 1 | |
Itasca Capital Ltd [Member] | Equity Method Investments [Member] | |||
Equity method investment income | (99) | ||
1347 Property Insurance Holdings Ltd [Member] | Equity Method Investments [Member] | |||
Equity method investment income |
Equity Method Investments - S76
Equity Method Investments - Summarized Financial Information (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Equity Method Investments and Joint Ventures [Abstract] | |
Revenue | $ 44,621 |
Gross profit | 14,514 |
Operating income | 3,204 |
Net income | 235 |
Current assets | 30,217 |
Non-current assets | 23,274 |
Current liabilities | 5,709 |
Non-current liabilities | 394 |
Redeemable stock | |
Non-controlling interests | |
Company's share of equity in net assets | $ 6,244 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation allowance | $ (8,393) | $ (8,457) | |
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. | ||
Deferred tax assets, operating loss carryforwards | $ 6,240 | 6,641 | |
Income Taxes on Accumulated by Undistributed Earnings for Foreign Subsidiaries | 8,700 | ||
Undistributed earnings of foreign subsidiaries, not to be permanently reinvested | 22,800 | ||
Deferred tax assets undistributed foreign earnings | 8,700 | ||
Estimated underpayment of income taxes accrued | 0 | $ 0 | |
Federal and State Tax Purposes [Member] | |||
Deferred tax assets, operating loss carryforwards | $ 6,200 | ||
Operating loss carryforwards expiration descriptions | expiring at various times in 2023 through 2025 | ||
Foreign Tax Authority [Member] | |||
Tax credit carryforward, amount | $ 3,000 | ||
Income tax expiration term | 2,024 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income before Income Tax, Domestic and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (5,351) | $ (16,630) | $ (9,773) |
Foreign | 9,716 | 12,944 | 9,527 |
Total | $ 4,365 | $ (3,686) | $ (246) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal: Current | $ 10 | $ 1,575 | $ 688 |
Federal: Deferred | (34) | 7,348 | (3,357) |
Federal: Total | (24) | 8,923 | (2,669) |
State: Current | 173 | (1,301) | 321 |
State: Deferred | 28 | 635 | (589) |
State: Total | 201 | (666) | (268) |
Foreign: Current | 2,810 | 3,597 | 3,196 |
Foreign: Deferred | (189) | 1,184 | (647) |
Foreign: Total | 2,621 | 4,781 | 2,549 |
Income tax expense (benefit) | $ 2,798 | $ 13,038 | $ (388) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Expected federal income tax expense (benefit) | $ 1,484 | $ (1,253) | $ (84) |
State income taxes, net of federal benefit | 200 | (324) | (148) |
Foreign tax rates varying from 34% | (638) | (871) | (622) |
Change in foreign reinvestment strategy | 309 | 6,650 | 429 |
Valuation allowance | (51) | 8,856 | |
Section 956 Inclusion | 1,615 | ||
Return to provision | (193) | (8) | 22 |
Other | 72 | (12) | 15 |
Total | $ 2,798 | $ 13,038 | $ (388) |
Expected federal income tax expense (benefit) | 34.00% | (34.00%) | (34.00%) |
State income taxes, net of federal benefit | 4.60% | (8.80%) | (59.90%) |
Foreign tax rates varying from 34% | (14.60%) | (23.60%) | (251.80%) |
Change in foreign reinvestment strategy | 7.10% | 180.40% | 173.60% |
Valuation allowance | (1.20%) | 240.20% | |
Section 956 Inclusion | 37.00% | ||
Return to provision | (4.40%) | (0.20%) | 8.90% |
Other | 1.70% | (0.30%) | 6.10% |
Total | 64.10% | 353.70% | (157.10%) |
Income Taxes - Schedule of Ef81
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) (Parenthetical) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Foreign tax rate, differential | 34.00% | (34.00%) | (34.00%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | |||
Deferred revenue | $ 1,672 | $ 1,567 | |
Non-deductible accruals | 187 | 261 | |
Inventory reserves | 567 | 480 | |
Stock compensation expense | 281 | 215 | |
Warranty reserves | 204 | 107 | |
Uncollectible receivable reserves | 409 | 459 | |
Accrued group health insurance claims | (66) | 137 | |
Restructuring reserves | 90 | ||
Net operating losses | 6,240 | 6,641 | |
Fair value adjustment to notes receivable | 633 | 637 | |
Foreign tax credits | 2,960 | 2,868 | |
Depreciation and amortization | 671 | 448 | |
Equity in income (loss) of equity method investments | 163 | 47 | |
Accumulated other comprehensive income | 1,685 | 1,745 | |
Net deferred tax assets | 15,606 | 15,702 | |
Valuation allowance | (8,393) | (8,457) | |
Net deferred tax assets after valuation allowance | 7,213 | 7,245 | |
Depreciation and amortization | 6 | 487 | |
Cash repatriation | 8,721 | 8,472 | |
Other | 6 | 2 | |
Net deferred tax liabilities | $ (1,520) | $ (1,716) |
Financing Receivable - Schedule
Financing Receivable - Schedule of Sales-type Lease Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Investment in sales-type leases, Current | $ 198 | $ 1,185 |
Investment in sales-type leases, Noncurrent | $ 198 |
Financing Receivable - Schedu84
Financing Receivable - Schedule of Maturities of Minimum Lease Payments Outstanding (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Receivables [Abstract] | |
December 31, 2017 | $ 198 |
Total | $ 198 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) | Dec. 31, 2016 | Dec. 31, 2011 |
Time Sharing Transactions, Weighted Average of Stated Interest Rates for Notes Receivable | 15.00% | 15.00% |
Unpaid Interest Accrual Rate [Member] | ||
Time Sharing Transactions, Weighted Average of Stated Interest Rates for Notes Receivable | 15.00% |
Deferred Revenue - Schedule of
Deferred Revenue - Schedule of Amounts Included in Deferred Revenue Related to Extended Warranties (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Revenue Disclosure [Abstract] | ||
Extended warranty deferrals expected to be recognized within one year | $ 895 | |
Extended warranty deferrals expected to be recognized after one year | 1,108 | 1,108 |
Total revenue deferred for extended warranty | $ 1,108 | $ 2,003 |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of shares granted | 200,000 | ||
Share based compensation arrangement by share based payment award options grants in period weighted average grant date fair valu | $ 1.81 | $ 1.44 | |
Restricted Stock [Member] | |||
Unrecognized for restricted stock, value | $ 200 | ||
Compensation cost expected to be recognized, weighted average period | 10 months 24 days | ||
Stock Option [Member] | |||
Share-based compensation arrangement by share-based payment award, options, non-vested, number | 405,000 | ||
Total unrecognized compensation cost related to stock option awards | $ 600 | ||
Compensation cost expected to be recognized, weighted average period | 4 years 2 months 12 days | ||
Restricted Stock [Member] | |||
Number of shares awarded | 45,555 | ||
Weighted average grant date fair value of restricted stock awarded | $ 4.89 | ||
Year 2010 Plan [Member] | |||
Number of shares reserved for issuance | 1,600,000 | ||
Number of shares granted | 200,000 | ||
Share based compensation arrangement by share based payment award number of shares available for grant | 852,492 | ||
Year 2010 Plan [Member] | Restricted Stock Units [Member] | |||
Number of shares granted | |||
2010 Long-Term Incentive Plan [Member] | Restricted Stock Units [Member] | |||
Number of shares granted | 87,500 | 172,500 | |
2010 Long-Term Incentive Plan [Member] | Stock Option [Member] | |||
Number of shares granted | 383,300 | ||
2010 Plan [Member] | Common Stock [Member] | |||
Option vesting period | 5 years | ||
2014 Non-Employee Plan [Member] | Restricted Stock [Member] | |||
Number of shares awarded | 45,555 | 53,208 | 41,760 |
2014 Non-Employee Plan [Member] | Restricted Stock [Member] | |||
Number of shares reserved for issuance | 250,000 | ||
2010 and 2014 Combined Plan [Member] | |||
Number of shares awarded | 45,555 | 140,708 | 214,260 |
Weighted average grant date fair value of restricted stock awarded | $ 4.89 | $ 4.38 | $ 3.86 |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share based compensation expense | |||
Selling, General and Administrative Expenses [Member] | |||
Share based compensation expense | $ 466 | $ 501 | $ 427 |
Stock Compensation - Schedule89
Stock Compensation - Schedule of Weighted Average Fair Value Assumptions Used in Grant Date Fair Value of Purchase Rights Outstanding (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected dividend yield at date of grant | 0.00% | 0.00% |
Risk-free interest rate | 1.42% | 1.87% |
Expected stock price volatility | 31.36% | 32.06% |
Expected life of options (in years) | 6 years | 6 years |
Stock Compensation - Summary of
Stock Compensation - Summary of Stock Options Activities (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 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 | 200,000 |
Number of Options, Exercised | shares | (33,000) |
Number of Options, Forfeited | shares | (72,500) |
Number of Options, Outstanding ending balance | shares | 545,300 |
Number of Options, Exercisable | shares | 140,300 |
Weighted Average Exercise Price Per Share, Outstanding beginning balance | $ / shares | $ 4.48 |
Weighted Average Exercise Price Per Share, Granted | $ / shares | 5.53 |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | 4.09 |
Weighted Average Exercise Price Per Share, Forfeited | $ / shares | 4.50 |
Weighted Average Exercise Price Per Share, Outstanding ending balance | $ / shares | 4.78 |
Weighted Average Exercise Price Per Share, Exercisable | $ / shares | $ 4.37 |
Weighted Average Remaining Contractual Term, beginning balance | 9 years 2 months 16 days |
Weighted Average Remaining Contractual Term, ending balance | 9 years 8 months 5 days |
Weighted Average Remaining Contractual Term, Exercisable | 8 years 3 months 18 days |
Aggregate Intrinsic Value, beginning balance | $ | $ 131 |
Aggregate Intrinsic Value, ending balance | $ | 1,757 |
Aggregate Intrinsic Value, Exercisable | $ | $ 1,218 |
Stock Compensation - Summary 91
Stock Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 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 | (88,243) |
Number of Restricted Stock Shares, forfeited | shares | (15,625) |
Number of Restricted Stock Shares, Non-vested beginning balance | shares | 72,045 |
Weighted Average Grant Date Fair Value, Non-vested beginning balance | $ / shares | $ 4.30 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 4.89 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 4.40 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 3.75 |
Weighted Average Grant Date Fair Value, Non-vested ending balance | $ / shares | $ 4.67 |
Foreign Exchange Contracts - Sc
Foreign Exchange Contracts - Schedule of Realized and Unrealized Gains from Foreign Currency Forward Exchange Contracts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Foreign Currency [Abstract] | |||
Classification | Other Income (Loss) | ||
Foreign exchange forward contracts | $ (145) |
Compensation and Benefit Plans
Compensation and Benefit Plans (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Defined contribution plan, maximum annual contributions per employee, percent | 100.00% | ||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 50.00% | ||
Defined contribution employee deferral percent employer match applies | 6.00% | ||
Defined contribution employer contributions | $ 400 | $ 400 | $ 300 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Leases [Abstract] | |||
Operating Leases, Rent Expense | $ 400 | $ 600 | $ 700 |
Leases -Schedule of Operating L
Leases -Schedule of Operating Leases Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
Capital Leases, 2017 | $ 290 |
Capital Leases, 2018 | 248 |
Capital Leases, 2019 | 131 |
Capital Leases, 2020 | |
Capital Leases, 2021 | |
Capital Leases, Thereafter | |
Total minimum Capital lease payments | 669 |
Less: Amount representing interest | 39 |
Present value of minimum lease payments | 630 |
Less: Current maturities | 274 |
Capital lease obligations, net of current portion | 356 |
Operating Leases, 2016 | 375 |
Operating Leases, 2017 | 324 |
Operating Leases, 2018 | 292 |
Operating Leases, 2019 | 262 |
Operating Leases, 2020 | 152 |
Operating Leases, Thereafter | |
Total minimum Operating lease payments | $ 1,405 |
Contingencies and Concentrati96
Contingencies and Concentrations (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)Customer | |
Concentration risk, number of customers | Customer | 10 |
Regal Cinemas [Member] | |
Revenues | $ | $ 9,600 |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |
Concentration risk, percentage | 54.00% |
Sales Revenue, Net [Member] | Regal Cinemas [Member] | |
Concentration risk, percentage | 12.60% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |
Concentration risk, percentage | 36.00% |
Business Segment Information (D
Business Segment Information (Details Narrative) | 12 Months Ended |
Dec. 31, 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 | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Total segment revenue | $ 20,391 | $ 18,668 | $ 20,558 | $ 17,114 | $ 21,332 | $ 19,746 | $ 17,831 | $ 19,150 | $ 76,731 | $ 78,059 | $ 83,165 |
Operating income (Loss) | 4,641 | (4,207) | (1,477) | ||||||||
Income (loss) from operations | 4,248 | (3,782) | (324) | ||||||||
Other income (expense) Interest, net | 118 | (21) | (63) | ||||||||
Cinema - fair value adjustment to notes receivable | (1,595) | ||||||||||
Cinema - excess distribution from joint venture | 502 | ||||||||||
Cinema - foreign currency transaction (loss) gain | (1,002) | 1,612 | 611 | ||||||||
Change in value of marketable securities - Corporate asset | (34) | 117 | |||||||||
Total other income (loss) | (393) | 425 | 1,153 | ||||||||
Income (loss) before taxes and equity method investment income | 4,365 | (3,686) | (246) | ||||||||
Depreciation, amortization and impairment | 2,187 | 2,303 | 1,876 | ||||||||
Business Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total segment revenue | 78,008 | 79,267 | 84,353 | ||||||||
Eliminations | (1,277) | (1,208) | (1,188) | ||||||||
Total net revenue | 76,731 | 78,059 | 83,165 | ||||||||
Operating income (Loss) | 12,370 | 7,041 | 6,420 | ||||||||
Unallocated general and administrative expenses | (7,612) | (10,824) | (7,909) | ||||||||
Gain (loss) on sale or disposal of assets | (118) | (424) | 12 | ||||||||
Income (loss) from operations | 4,641 | (4,207) | (1,477) | ||||||||
Change in value of marketable securities - Corporate asset | 34 | 117 | |||||||||
Total other income (loss) | (393) | 425 | 1,153 | ||||||||
Income (loss) before taxes and equity method investment income | 4,248 | (3,782) | (324) | ||||||||
Expenditures on capital equipment | 3,762 | 458 | 2,043 | ||||||||
Depreciation, amortization and impairment | 2,187 | 2,941 | 1,876 | ||||||||
Business Segments [Member] | Cinema [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total segment revenue | 41,522 | 47,430 | 51,859 | ||||||||
Operating income (Loss) | 10,572 | 8,066 | 6,444 | ||||||||
Gain (loss) on sale or disposal of assets | (70) | (370) | (1) | ||||||||
Other income (expense) Interest, net | 87 | 262 | 693 | ||||||||
Cinema - fair value adjustment to notes receivable | (1,595) | ||||||||||
Cinema - excess distribution from joint venture | 502 | ||||||||||
Cinema - foreign currency transaction (loss) gain | (917) | 1,875 | 511 | ||||||||
Expenditures on capital equipment | 1,996 | 158 | 503 | ||||||||
Depreciation, amortization and impairment | 1,339 | 1,516 | 1,160 | ||||||||
Business Segments [Member] | Digital Media [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total segment revenue | 36,486 | 31,837 | 32,494 | ||||||||
Operating income (Loss) | 1,798 | (1,025) | (24) | ||||||||
Gain (loss) on sale or disposal of assets | (21) | (54) | 13 | ||||||||
Other income (expense) Interest, net | (14) | 29 | 163 | ||||||||
Cinema - foreign currency transaction (loss) gain | (85) | (263) | (214) | ||||||||
Expenditures on capital equipment | 1,766 | 300 | 1,540 | ||||||||
Depreciation, amortization and impairment | 848 | 1,425 | 716 | ||||||||
Business Segments [Member] | Corporate Overhead [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gain (loss) on sale or disposal of assets | $ (28) |
Business Segment Information 99
Business Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Identifiable assets | $ 62,712 | $ 59,580 |
Cinema [Member] | Business Segments [Member] | ||
Identifiable assets | 29,820 | 38,159 |
Digital Media [Member] | Business Segments [Member] | ||
Identifiable assets | 19,794 | 15,319 |
Corporate Assets [Member] | Business Segments [Member] | ||
Identifiable assets | $ 13,098 | $ 6,102 |
Business Segment Information100
Business Segment Information - Schedule of Segment Reporting Information by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net revenue | $ 20,391 | $ 18,668 | $ 20,558 | $ 17,114 | $ 21,332 | $ 19,746 | $ 17,831 | $ 19,150 | $ 76,731 | $ 78,059 | $ 83,165 |
United States [Member] | |||||||||||
Net revenue | 60,394 | 60,754 | 62,096 | ||||||||
China [Member] | |||||||||||
Net revenue | 5,885 | 3,654 | 2,759 | ||||||||
Canada [Member] | |||||||||||
Net revenue | 4,616 | 5,074 | 5,661 | ||||||||
South America [Member] | |||||||||||
Net revenue | 1,681 | 3,540 | 8,288 | ||||||||
Mexico [Member] | |||||||||||
Net revenue | 2,125 | 2,870 | 2,718 | ||||||||
Europe [Member] | |||||||||||
Net revenue | 1,148 | 1,569 | 1,189 | ||||||||
Asia (Excluding China) [Member] | |||||||||||
Net revenue | 697 | 91 | 294 | ||||||||
Other [Member] | |||||||||||
Net revenue | $ 185 | $ 507 | $ 160 |
Business Segment Information101
Business Segment Information - Summary of Identifiable Assets by Geographical Area (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Identifiable assets | $ 62,712 | $ 59,580 |
United States [Member] | ||
Identifiable assets | 30,979 | 33,882 |
Canada [Member] | ||
Identifiable assets | $ 31,733 | $ 25,698 |
Quarterly Financial Data (Un102
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||||||
Net revenue | $ 20,391 | $ 18,668 | $ 20,558 | $ 17,114 | $ 21,332 | $ 19,746 | $ 17,831 | $ 19,150 | $ 76,731 | $ 78,059 | $ 83,165 | ||||||||
Gross profit | 5,871 | 4,377 | 6,149 | 5,236 | 5,181 | 3,780 | 3,495 | 4,255 | 21,633 | 16,712 | 17,089 | ||||||||
Net earnings (loss) | $ 540 | $ (470) | $ 833 | $ (613) | $ (1,183) | $ (3,201) | $ (2,919) | $ (10,164) | $ 290 | $ (17,467) | $ (4) | ||||||||
Earnings (loss) per share, Basic | $ 0.08 | [1] | $ (0.03) | [1] | $ 0.12 | [1] | $ (0.05) | [1] | $ (0.08) | [1] | $ (0.23) | [1] | $ (0.21) | [1] | $ (0.72) | [1] | $ 0.02 | $ (1.24) | $ 0 |
Earnings (loss) per share, Diluted | 0.08 | [1] | (0.03) | [1] | 0.12 | [1] | (0.05) | [1] | (0.08) | [1] | (0.23) | [1] | (0.21) | [1] | (0.72) | [1] | 0.02 | (1.24) | $ 0 |
Maximum [Member] | |||||||||||||||||||
Stock price | 8 | 7.01 | 5.99 | 4.77 | 4.87 | 4.88 | 5.13 | 5.05 | 8 | 4.87 | |||||||||
Minimum [Member] | |||||||||||||||||||
Stock price | $ 6.10 | $ 5.09 | $ 4.21 | $ 4 | $ 4.24 | $ 3.42 | $ 4 | $ 4.01 | $ 6.10 | $ 4.24 | |||||||||
[1] | Earnings per share is computed independently for each of the quarters. Therefore, the sum of the quarterly earnings per share may not equal the total for the year. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | ||
Percentage of affiliates hold outstanding shares of common stock approximately | 24.40% | |
Expenses incurred in connection with proxy contest and settlement agreement amount | $ 178,415 |
Schedule II Valuation and Qu104
Schedule II Valuation and Qualifying Accounts - Schedule of Valuation Allowance Accounts for Inventory and Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Allowance for Doubtful Accounts [Member] | ||||
Balance, beginning | $ 1,207 | $ 252 | $ 273 | |
Charged to costs and expenses | 21 | 1,065 | 90 | |
Amounts written off | [1] | (131) | (110) | (111) |
Foreign exchange translation | ||||
Balance, ending | 1,097 | 1,207 | 252 | |
Inventory Valuation Reserve [Member] | ||||
Balance, beginning | 1,233 | 1,674 | 1,312 | |
Charged to costs and expenses | 341 | 1,743 | 434 | |
Amounts written off | [1] | (16) | (2,181) | (71) |
Foreign exchange translation | (3) | (1) | ||
Balance, ending | $ 1,558 | $ 1,233 | $ 1,674 | |
[1] | The deductions from reserves are net of recoveries. |