Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 23, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | BALLANTYNE STRONG, INC. | |
Entity Central Index Key | 946,454 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 14,252,595 | |
Trading Symbol | BTN | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 4,529 | $ 7,596 |
Accounts receivable (net of allowance for doubtful accounts of $1,092 and $1,097, respectively) | 16,634 | 16,316 |
Inventories: | ||
Finished goods, net | 1,314 | 1,341 |
Work in process | 433 | 247 |
Raw materials and components, net | 5,277 | 4,975 |
Total inventories, net | 7,024 | 6,563 |
Recoverable income taxes | 880 | 672 |
Other current assets | 1,952 | 1,746 |
Current assets held for sale | 160 | 188 |
Total current assets | 31,179 | 33,081 |
Property, plant and equipment (net of accumulated depreciation of $7,461 and $7,066, respectively) | 12,429 | 11,695 |
Equity method investments | 18,037 | 13,098 |
Intangible assets, net | 1,805 | 1,849 |
Goodwill | 898 | 889 |
Notes receivable | 1,669 | 1,669 |
Deferred income taxes | 84 | |
Other assets | 67 | 74 |
Total assets | 66,084 | 62,439 |
Current liabilities: | ||
Accounts payable | 7,402 | 5,175 |
Accrued expenses | 4,251 | 4,097 |
Customer deposits/deferred revenue | 4,130 | 4,211 |
Income tax payable | 153 | 108 |
Current liabilities held for sale | 52 | 57 |
Total current liabilities | 15,988 | 13,648 |
Deferred revenue | 1,223 | 1,226 |
Deferred income taxes | 2,629 | 1,841 |
Other accrued expenses, net of current portion | 527 | 570 |
Total liabilities | 20,367 | 17,285 |
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 17,203 and 17,047 shares at March 31, 2017 and December 31, 2016, respectively; 14,415 and 14,268 shares outstanding at March 31, 2017 and December 31, 2016, respectively | 169 | 169 |
Additional paid-in capital | 39,892 | 39,758 |
Accumulated other comprehensive income: | ||
Foreign currency translation | (5,600) | (5,709) |
Postretirement benefit obligations | 97 | 97 |
Unrealized gain on available-for-sale securities of equity method investment | 134 | 136 |
Retained earnings | 29,574 | 29,187 |
Treasury stock before, cost | 64,266 | 63,638 |
Less 2,789 and 2,779 of common shares in treasury, at cost at March 31, 2017 and December 31, 2016, respectively | (18,549) | (18,484) |
Total stockholders’ equity | 45,717 | 45,154 |
Total liabilities and stockholders’ equity | $ 66,084 | $ 62,439 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,092 | $ 1,097 |
Property, plant and equipment, accumulated depreciation | $ 7,461 | $ 7,066 |
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 | 17,203,000 | 17,047,000 |
Common stock, shares outstanding | 14,415,000 | 14,268,000 |
Common shares in treasury, shares | 2,789,000 | 2,779,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Net product sales | $ 12,456 | $ 11,735 |
Net service revenues | 5,470 | 5,379 |
Total net revenues | 17,926 | 17,114 |
Cost of products sold | 10,308 | 8,758 |
Cost of services | 3,179 | 3,120 |
Total cost of revenues | 13,487 | 11,878 |
Gross profit | 4,439 | 5,236 |
Selling and administrative expenses: | ||
Selling | 1,490 | 1,025 |
Administrative | 3,547 | 3,098 |
Total selling and administrative expenses | 5,037 | 4,123 |
Income (loss) from operations | (598) | 1,113 |
Other income (expense): | ||
Interest income | 22 | 13 |
Interest expense | (10) | (13) |
Foreign currency transaction gain (loss) | 3 | (825) |
Change in value of marketable securities | (483) | |
Other income (expense), net | 5 | 38 |
Total other income (expense) | 20 | (1,270) |
Loss before income taxes and equity method investment income | (578) | (157) |
Income tax expense | 1,493 | 684 |
Equity method investment income | 2,481 | 41 |
Net earnings (loss) from continuing operations | 410 | (800) |
Net earnings (loss) from discontinued operations, net of tax | (23) | 187 |
Net earnings (loss) | $ 387 | $ (613) |
Net earnings (loss) per share - basic | ||
Net earnings (loss) from continuing operations | $ 0.03 | $ (0.05) |
Net earnings (loss) from discontinued operations | 0 | 0.01 |
Net earnings (loss) | 0.03 | (0.04) |
Net earnings (loss) per share - diluted | ||
Net earnings (loss) from continuing operations | 0.03 | (0.05) |
Net earnings (loss) from discontinued operations | 0 | 0.01 |
Net earnings (loss) | $ 0.03 | $ (0.04) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings (loss) Pre-Tax Amount | $ 1,880 | $ 71 |
Net earnings (loss) Tax (Expense) Benefit | (1,493) | (684) |
Net earnings (loss) After-Tax Amount | 387 | (613) |
Currency translation adjustment: | ||
Unrealized net change arising during period Pre-Tax Amount | 109 | 1,592 |
Unrealized net change arising during period Tax (Expense) Benefit | ||
Unrealized net change arising during period After-Tax Amount | 109 | 1,592 |
Other comprehensive gain Pre-Tax Amount | 109 | 1,592 |
Other comprehensive gain Tax (Expense) Benefit | ||
Other comprehensive gain After-Tax Amount | 109 | 1,592 |
Comprehensive income Pre-Tax Amount | 1,989 | 1,663 |
Comprehensive income Tax (Expense) Benefit | (1,493) | (684) |
Comprehensive income After-Tax Amount | $ 496 | $ 979 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ 387 | $ (613) |
Net earnings (loss) from discontinued operations, net of tax | (23) | 187 |
Net earnings (loss) from continuing operations | 410 | (800) |
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: | ||
Provision for doubtful accounts | 3 | (22) |
Provision for obsolete inventory | 68 | (6) |
Provision for warranty | 18 | 96 |
Depreciation and amortization | 482 | 597 |
Equity method investment income | (2,481) | (41) |
Unrealized loss on marketable securities | 483 | |
Deferred income taxes | 867 | 88 |
Share-based compensation expense | 136 | 130 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (282) | 955 |
Inventories | (514) | (1,334) |
Other current assets | (102) | 153 |
Accounts payable | 2,321 | 1,164 |
Accrued expenses | 154 | (249) |
Customer deposits/deferred revenue | (86) | (322) |
Current income taxes | (156) | (1,357) |
Other assets | (271) | (40) |
Net cash flows provided by (used in) operating activities – continuing operations | 567 | (505) |
Net cash flows used in operating activities – discontinued operations | (24) | (1,060) |
Net cash provided by (used in) operating activities | 543 | (1,565) |
Cash flows from investing activities: | ||
Purchase of equity securities | (2,525) | (406) |
Capital expenditures | (1,120) | (165) |
Dividends received from investee in excess of cumulative earnings | 103 | |
Net cash flows from investing activities – continuing operations | (3,542) | (571) |
Net cash used in investing activities | (3,542) | (571) |
Cash flows from financing activities: | ||
Purchase of treasury stock | (65) | (31) |
Proceeds from exercise of stock options | 53 | |
Payments on capital lease obligations | (67) | (78) |
Excess tax benefits from share-based arrangements | 6 | |
Net cash used in financing activities | (132) | (50) |
Effect of exchange rate changes on cash and cash equivalents – continuing operations | 39 | 934 |
Effect of exchange rate changes on cash and cash equivalents – discontinued operations | 8 | |
Net decrease in cash and cash equivalents | (3,092) | (1,244) |
Discontinued operations cash activity included above: | ||
Add: Cash balance included in assets held for sale at beginning of period | 175 | 4,208 |
Less: Cash balance included in assets held for sale at end of period | 150 | 3,157 |
Cash and cash equivalents at beginning of period | 7,596 | 17,862 |
Cash and cash equivalents at end of period | $ 4,529 | $ 17,669 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. Nature of Operations Ballantyne Strong, Inc. (“Ballantyne” or the “Company”), a Delaware corporation, is a holding company with diverse business activities focused on serving the cinema, retail, financial, and government markets. The Company, and its wholly owned subsidiaries Strong Technical Services, Inc., Strong/MDI Screen Systems, Inc., Convergent Corporation, Convergent Media Systems Corporation (“Convergent” or “CMS”), and Strong Westrex, Inc. (“SWI”), 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”), a subsidiary of SWI, was sold (see Note 2). The Company’s products are distributed to the retail, financial, government and cinema markets throughout the world. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2017 | |
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. 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. We expect to complete the sale of SWI within the next six months, but cannot provide assurance we will be able to complete the sale on terms favorable to us, or at all. The summary comparative financial results of discontinued operations were as follows (in thousands): Three Months Ended March 31, 2017 2016 Total net revenues $ 12 $ 3,422 Total cost of revenues 26 2,892 Total selling and administrative expenses 9 360 Earnings (loss) from operations of discontinued operations $ (23 ) $ 170 Earnings (loss) before income taxes $ (23 ) $ 187 Income tax expense — — Net earnings (loss) from discontinued operations, net of tax $ (23 ) $ 187 The assets and liabilities classified as held for sale reflected in the condensed consolidated balance sheets were as follows (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Current assets: Cash and cash equivalents $ 150 $ 175 Total inventories, net 7 — Other current assets 3 13 Total current assets held for sale $ 160 $ 188 Current liabilities: Accounts payable $ 24 $ 33 Accrued expenses 14 11 Customer deposits/deferred revenue 14 13 Total current liabilities $ 52 $ 57 Depreciation and amortization related to discontinued operations was immaterial for the three months ended March 31, 2017 and 2016. There were no capital expenditures related to discontinued operations for the three months ended March 31, 2017 and 2016. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and all majority owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America for annual reporting purposes or those made in the Company’s Annual Report on Form 10-K/A. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2016. The condensed consolidated balance sheet as of December 31, 2016 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of trends or results expected for a full year. Use of Management Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. Marketable Securities The Company’s marketable securities were comprised of investments in the common stock of a publicly traded company. 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 used the fair value option to account for the investment to more appropriately recognize the value of this investment in our consolidated financial statements since the Company did not exert significant influence over the investment, in which case the equity method of accounting would have been applied. The Company did not own any marketable securities during the three months ended March 31, 2017, except for equity method investments. The Company recognized an unrealized loss of $0.5 million for the three months ended March 31, 2016 in other income in the condensed consolidated statement of operations. 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 condensed consolidated statements of operations. The carrying value of our equity method investments is reported in equity method investments in the condensed consolidated balance sheets. The Company’s equity method investments are reported initially 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 condensed 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 during the three month periods ended March 31, 2017 or 2016. Note 8 contains additional information on our equity method investments, which are held by the Company’s Cinema segment. Fair Value of Financial Instruments Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the observability 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 measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 31, 2017 and December 31, 2016. Fair values measured on a recurring basis at March 31, 2017: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 4,529 $ — $ — $ 4,529 Notes receivable — — 1,669 1,669 Total $ 4,529 $ — $ 1,669 $ 6,198 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 Quantitative information about the Company’s level 3 fair value measurements at March 31, 2017 is set forth below: Fair Value at March 31, 2017 (in thousands) Valuation Technique Unobservable input Range Notes receivable $ 1,669 Discounted cash flow Probability of default Discount rate 57% 18% The notes receivable are recorded at estimated fair value at March 31, 2017. The significant unobservable inputs used in the fair value measurement of the Company’s notes 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. There were no changes in the fair value of the Company’s notes receivable recorded during the three months ended March 31, 2017 or 2016. Based on quoted market prices, the market value of the Company’s equity method investments was $18.4 million at March 31, 2017. The carrying values of all other financial assets and liabilities including accounts receivable, accounts payable and accrued expenses reported in the consolidated balance sheets equal or approximate their fair values due to the short-term nature of these instruments. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which includes non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). During the three months ended March 31, 2017 and 2016, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The guidance is effective for the Company beginning January 1, 2018. An entity may adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the ASU. 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 that 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 or net realizable value. The Company prospectively adopted the guidance effective January 1, 2017. The adoption of ASU 2015-11 did not 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 for purposes 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. While the Company has not yet quantified the impact that 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 2016-09, “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. The Company adopted the guidance effective January 1, 2017 on a prospective basis. Additionally, as required by ASU 2016-09, when calculating diluted earnings per share, excess tax benefits were excluded from the calculation of assumed proceeds since such amounts are recognized in the income statement. The Company applied the cash flow presentation requirements prospectively, and the 2016 statement of cash flows was not adjusted. ASU 2016-09 also allows an entity to elect as an accounting policy either to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures for service-based awards as they occur. The Company has elected to account for forfeitures as they occur. 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. The Company adopted this ASU in the first quarter of 2017 on a prospective basis. Adoption affected the classification of dividends received from equity method investees on the statement of cash flows, but did not have any other impact. 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, where the carrying value of a reporting unit is compared to its fair value, 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. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | 4. Earnings (Loss) Per Common Share Basic earnings (loss) per share has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted loss per share has been computed on the basis of the weighted average number of shares of common stock outstanding after giving effect to potential common shares from dilutive stock options and certain non-vested shares of restricted stock. The following table provides the reconciliation between average shares used to compute basic and diluted earnings (loss) per share: Three Months Ended March 31, 2017 2016 Weighted average shares outstanding (in thousands): Basic weighted average shares outstanding 14,264 14,203 Dilutive effect of stock options and certain non-vested shares of restricted stock 156 56 Diluted weighted average shares outstanding 14,420 14,259 For the three month periods ended March 31, 2017 and 2016, options to purchase 385,000 and 482,500 shares of common stock, respectively, were outstanding but were not included in the computation of diluted earnings per share as the option’s exercise price was greater than the average market price of the common shares for the respective periods. An additional 155,638 and 56,034 options and restricted stock units were excluded for the three months ended March 31, 2017 and 2016, respectively, as their inclusion would be anti-dilutive, thereby decreasing any net losses per share. |
Warranty Reserves
Warranty Reserves | 3 Months Ended |
Mar. 31, 2017 | |
Guarantees and Product Warranties [Abstract] | |
Warranty Reserves | 5. Warranty Reserves Historically, the Company has generally granted a warranty to its customer 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 original warranty; however, for certain customers the Company may grant warranties in excess of the manufacturer’s warranty for digital products. In addition, the Company provides warranty coverage on screens it manufactures. The Company accrues for these costs at the time of sale. The following table summarizes warranty activity for the three months ended March 31, 2017 and 2016: Three Months Ended March 31, 2017 2016 (in thousands) Warranty accrual at beginning of period $ 645 $ 310 Charged to expense 47 158 Amounts written off, net of recoveries (231 ) (158 ) Foreign currency adjustment 1 4 Warranty accrual at end of period $ 462 $ 314 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets consisted of the following at March 31, 2017: Useful life Gross Accumulated amortization Net (Years) ( in thousands) Intangible assets subject to amortization: Software 5 $ 1,821 $ (182 ) $ 1,639 Product Formulation 10 459 (293 ) 166 Total $ 2,280 $ (475 ) $ 1,805 Intangible assets consisted of the following at December 31, 2016: Useful life Gross Accumulated amortization Net (Years) (in thousands) Intangible assets subject to amortization: Software 5 $ 1,764 $ (93 ) $ 1,671 Product formulation 10 454 (276 ) 178 Total $ 2,218 $ (369 ) $ 1,849 Amortization expense relating to identifiable intangible assets was $0.1 million for the three months ended March 31, 2017 and insignificant for the three months ended March 31, 2016. The following table shows the Company’s estimated future amortization expense related to intangible assets for the next five years. Amount (in thousands) Remainder of 2017 $ 313 2018 407 2019 395 2020 386 2021 286 Thereafter 18 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill The following represents a summary of changes in the Company’s carrying amount of goodwill for the quarter ended March 31, 2017 (in thousands): Balance as of December 31, 2016 $ 889 Foreign currency translation 9 Balance as of March 31, 2017 $ 898 |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | 8. Equity Method Investments The following summarizes our equity method investments: March 31, 2017 December 31, 2016 (in thousands) Entity Carrying Amount Economic Interest Carrying Amount Economic Interest RELM Wireless Corporation $ 4,276 8.3 % $ 4,382 8.3 % Itasca Capital, Ltd. 5,878 32.3 % 3,368 32.3 % 1347 Property Insurance Holdings, Inc. 7,883 17.4 % 5,348 12.1 % Total $ 18,037 $ 13,098 The following summarizes the income of equity method investees reflected in the Statement of Operations: Three Months Ended March 31, 2017 2016 Entity (in thousands) RELM Wireless Corporation $ 8 $ 41 Itasca Capital, Ltd. 2,461 — 1347 Property Insurance Holdings, Inc. 12 — Total $ 2,481 $ 41 As of March 31, 2017 and December 31, 2016, the Company owned 8.3% of RELM Wireless Corporation (“RELM”). 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 chairman 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 $0.1 million and $0 for the three month periods ended March 31, 2017 and 2016, respectively. Based on quoted market prices, the market value of the Company’s ownership in RELM was $5.7 million at March 31, 2017. As of March 31, 2017 and December 31, 2016, the Company owned 32.3% of Itasca Capital, Ltd. (“Itasca”). 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 during the three month periods ended March 31, 2017 or 2016. Based on quoted market prices, the market value of the Company’s ownership in Itasca was $4.3 million at March 31, 2017. As of December 31, 2016, the Company owned 12.1% of 1347 Property Insurance Holdings, Inc. (“PIH”) and purchased shares increasing its ownership to 17.4% during the quarter ended March 31, 2017 for an additional $2.5 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 in December 2016. This board seat and the Chief Executive Officer’s control of other entities that own shares of PIH, combined with the Company’s 17.4% ownership of PIH, provide the Company with significant influence over PIH, but not controlling interest. The Company did not receive dividends from PIH during the three month periods ended March 31, 2017 or 2016. Based on quoted market prices, the market value of the Company’s ownership in PIH was $8.4 million at March 31, 2017. As of March 31, 2017, our retained earnings included undistributed earnings from our equity method investees of $2.2 million. The summarized financial information presented below reflects the financial information of the Company’s significant equity method investee, Itasca, for the three months ended December 31, 2016, 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 three months ended December 31, 2016 (in thousands) Revenue $ — Gross profit $ — Operating income from continuing operations $ (59 ) Net income $ 7,667 (1) (1) Net income primarily related to unrealized gains on investments. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. A cumulative loss in a particular tax jurisdiction in recent years is a significant piece of evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence, including recent updates to the taxing jurisdictions generating income, the Company concluded that a valuation allowance should be recorded against all of the Company’s U.S. tax jurisdiction deferred tax assets as of March 31, 2017 and December 31, 2016. The Company has completed the examination for Federal purposes for the 2011 fiscal year with no changes. The Company is subject to examination for Federal purposes for fiscal years 2013, 2014, 2015, and 2016. In most cases, the Company is subject to examinations by state or local jurisdictions based on the particular jurisdiction’s statute of limitations. |
Stock Compensation
Stock Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation | 10. Stock Compensation The Company recognizes compensation expense for all share-based payment awards made to employees and directors based on their estimated grant date fair values. Share-based compensation expense included in selling and administrative expenses approximated $0.1 million for each of the three month periods ended March 31, 2017 and 2016. 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, and performance units. Vesting terms vary with each grant and may be subject to vesting upon a “change in control” of the Company. The total number of shares reserved for issuance under the 2010 Plan is 1,600,000 shares. During the three months ended March 31, 2017, the Company granted 85,000 restricted shares and 285,000 stock options. Options As noted above, under the 2010 Plan, the Company granted options to purchase 285,000 shares during the three month period ended March 31, 2017. 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 during the three month period ended March 31, 2017 was $2.41. There were 100,000 stock options granted during the three month period ended March 31, 2016 at a weighted average grant date fair value of $1.42. 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: 2017 2016 Expected dividend yield at date of grant 0.00 % 0.00 % Risk-free interest rate 2.04 % 1.35 % Expected stock price volatility 34.71 % 32.26 % Expected life of options (in years) 6.0 5.7 The risk-free interest rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant. The expected volatility was based on historical daily price changes of the Company’s stock for six years prior to the date of grant. During 2016, the Company used a one year period to calculate volatility but updated this assumption in the current year to align the expected volatility with the expected life of the options. The expected life of options is the average number of years the Company estimates that options will be outstanding. The Company considers groups of associates that have similar historical exercise behavior separately for valuation purposes. The following table summarizes the Company’s stock option activity for the three months ended March 31, 2017: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 545,300 $ 4.78 9.68 $ 1,757 Granted 285,000 6.50 Exercised — — Forfeited — — Outstanding at March 31, 2017 830,300 $ 5.37 9.17 $ 245 Exercisable at March 31, 2017 148,300 $ 4.35 8.11 $ 245 The aggregate intrinsic value in the table above represents the total that would have been received by the option holders if all in-the-money options had been exercised and sold on March 31, 2017. As of March 31, 2017, 682,000 stock option awards were non-vested. Unrecognized compensation cost related to stock option awards was approximately $1.3 million, which is expected to be recognized over a weighted average period of 4.5 years. Restricted Stock Plans The Ballantyne Strong, Inc. 2014 Non-Employee Directors’ Restricted Stock Plan (the “2014 Non-Employee Plan”) provides for the award of restricted shares to outside directors. Shares issued under the 2014 Non-Employee Plan vest the day preceding the Company’s Annual Meeting of Stockholders in the year following issuance. During the three months ended March 31, 2017, the Company granted 85,000 restricted shares under the 2010 Plan and zero restricted shares under the 2014 Non-Employee Plan. In connection with the restricted stock granted to certain employees and non-employee directors, the Company accrues compensation expense based on the fair value of the grants. The Company estimates the fair value of restricted stock awards based upon the market price of the underlying common stock on the date of grant. As of March 31, 2017, the total unrecognized compensation cost related to non-vested restricted stock awards was approximately $0.6 million, which is expected to be recognized over a weighted average period of 2.5 years. The following table summarizes restricted share activity for the three months ended March 31, 2017: Number of Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2016 58,295 $ 5.80 Granted 85,000 6.50 Shares vested — — Shares forfeited — — Non-vested at March 31, 2017 143,295 $ 6.21 There was no activity related to restricted stock units during the three months ended March 31, 2017. |
Commitments, Contingencies and
Commitments, Contingencies and Concentrations | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Concentrations | 11. Commitments, Contingencies and Concentrations Litigation In the ordinary course of business operations, we are involved, from time to time, in certain legal disputes. No such disputes, individually or in the aggregate, are expected to have a material effect on our business or financial condition. Concentrations The Company’s top ten customers accounted for approximately 51.1% of total consolidated net revenues for the three months ended March 31, 2017. Trade accounts receivable from these customers represented approximately 37.9% of net consolidated receivables at March 31, 2017. While the Company believes its relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from the Company’s significant customers could have a material adverse effect on the Company’s business, financial condition and results of operations. The Company could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which the Company sells its products. Financial instruments that potentially expose the Company to a concentration of credit risk principally consist of accounts receivable. The Company sells product to a large number of customers in many different geographic regions. To minimize credit concentration risk, the Company performs ongoing credit evaluations of its customers’ financial condition. Leases The Company and its subsidiaries lease plant and office facilities, furniture, autos and equipment under operating leases expiring through 2021. These leases generally contain renewal options and the Company expects to renew or replace certain of these leases in the ordinary course of business. The Company’s future minimum lease payments for leases at March 31, 2017 are as follows: Capital Leases Operating Leases (In thousands) Remainder 2017 $ 225 $ 255 2018 248 309 2019 130 277 2020 — 263 2021 — 152 Thereafter — — Total minimum lease payments $ 603 $ 1,256 Less: Amount representing interest (31 ) Present value of minimum lease payments 572 Less: Current maturities (260 ) Capital lease obligations, net of current portion $ 312 |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Information | 12. Business Segment Information As of March 31, 2017, the Company’s operations were conducted principally through two business segments: Cinema and Digital Media. Cinema operations include the sale of digital projection equipment, screens, and sound systems. Digital Media operations include the delivery of end to end digital signage solutions, video communication solutions, content creation and management and service of digital signage and digital cinema equipment. The Company allocates resources to business segments and evaluates the performance of these segments based upon reported segment operating profit. The Company records intercompany sales at cost and has eliminated all significant intercompany sales in consolidation. The results of discontinued operations are excluded from the Cinema segment information below. Summary by Business Segments Three Months Ended March 31, (In thousands) 2017 2016 Net revenue Cinema $ 9,292 $ 9,727 Digital Media 8,663 7,746 Total segment net revenue 17,955 17,473 Eliminations (29 ) (359 ) Total net revenue $ 17,926 $ 17,114 Operating income (loss) Cinema $ 2,031 $ 3,047 Digital Media (464 ) 114 Total segment operating income 1,567 3,161 Unallocated general and administrative expenses 2,165 2,048 Other income (expense) Interest, net 12 — Cinema – foreign currency transaction gain (loss) (85 ) (885 ) Digital Media – foreign currency transaction gain (loss) 88 60 Cinema - other 5 42 Digital Media - other — (4 ) Change in value of marketable securities – Corporate asset — (483 ) Total other income (loss) 20 (1,270 ) Loss before income taxes and equity method investment income $ (578 ) $ (157 ) (In thousands) March 31, 2017 December 31, 2016 Identifiable assets, excluding assets held for sale Cinema $ 28,347 $ 29,881 Digital Media 19,540 19,272 Corporate assets 18,037 13,098 Total $ 65,924 $ 62,251 Summary by Geographical Area Three Months Ended March 31, (In thousands) 2017 2016 Net revenue United States $ 14,393 $ 13,232 China 1,466 955 Latin America 284 382 Canada 1,220 1,105 Mexico 356 897 Europe 116 473 Asia (excluding China) 72 8 Other 19 62 Total $ 17,926 $ 17,114 (In thousands) March 31, 2017 December 31, 2016 Identifiable assets, excluding assets held for sale United States $ 44,744 $ 40,255 Canada 21,180 21,996 Total $ 65,924 $ 62,251 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. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 13. Subsequent Event On April 27, 2017, the Company entered into a debt agreement with a bank consisting of 1) a $2 million five-year term loan secured by a first lien deed of trust on the Company’s Alpharetta, GA facility, bearing interest at a fixed rate of 4.5% and payable in equal monthly installments of principal and interest calculated based on a 20-year amortization schedule with a final balloon payment of approximately $1.67 million on due May 10, 2022 and 2) a line of credit of up to $1 million secured by a second lien deed of trust on the Company’s Alpharetta, GA facility, bearing interest at the Prime Rate published in the Wall Street Journal plus 0.25% and with a term ending May 10, 2018. The Company’s Chairman and Chief Executive Officer is also a member of the bank’s board of directors. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and all majority owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America for annual reporting purposes or those made in the Company’s Annual Report on Form 10-K/A. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2016. The condensed consolidated balance sheet as of December 31, 2016 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of trends or results expected for a full year. |
Use of Management Estimates | Use of Management Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. |
Marketable Securities | Marketable Securities The Company’s marketable securities were comprised of investments in the common stock of a publicly traded company. 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 used the fair value option to account for the investment to more appropriately recognize the value of this investment in our consolidated financial statements since the Company did not exert significant influence over the investment, in which case the equity method of accounting would have been applied. The Company did not own any marketable securities during the three months ended March 31, 2017, except for equity method investments. The Company recognized an unrealized loss of $0.5 million for the three months ended March 31, 2016 in other income in the condensed consolidated statement of operations. |
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 condensed consolidated statements of operations. The carrying value of our equity method investments is reported in equity method investments in the condensed consolidated balance sheets. The Company’s equity method investments are reported initially 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 condensed 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 during the three month periods ended March 31, 2017 or 2016. Note 8 contains additional information on our equity method investments, which are held by the Company’s Cinema segment. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the observability 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 measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 31, 2017 and December 31, 2016. Fair values measured on a recurring basis at March 31, 2017: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 4,529 $ — $ — $ 4,529 Notes receivable — — 1,669 1,669 Total $ 4,529 $ — $ 1,669 $ 6,198 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 Quantitative information about the Company’s level 3 fair value measurements at March 31, 2017 is set forth below: Fair Value at March 31, 2017 (in thousands) Valuation Technique Unobservable input Range Notes receivable $ 1,669 Discounted cash flow Probability of default Discount rate 57% 18% The notes receivable are recorded at estimated fair value at March 31, 2017. The significant unobservable inputs used in the fair value measurement of the Company’s notes 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. There were no changes in the fair value of the Company’s notes receivable recorded during the three months ended March 31, 2017 or 2016. Based on quoted market prices, the market value of the Company’s equity method investments was $18.4 million at March 31, 2017. The carrying values of all other financial assets and liabilities including accounts receivable, accounts payable and accrued expenses reported in the consolidated balance sheets equal or approximate their fair values due to the short-term nature of these instruments. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which includes non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). During the three months ended March 31, 2017 and 2016, the Company did not have any significant non-recurring measurements of non-financial assets or liabilities. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The guidance is effective for the Company beginning January 1, 2018. An entity may adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the ASU. 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 that 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 or net realizable value. The Company prospectively adopted the guidance effective January 1, 2017. The adoption of ASU 2015-11 did not 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 for purposes 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. While the Company has not yet quantified the impact that 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 2016-09, “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. The Company adopted the guidance effective January 1, 2017 on a prospective basis. Additionally, as required by ASU 2016-09, when calculating diluted earnings per share, excess tax benefits were excluded from the calculation of assumed proceeds since such amounts are recognized in the income statement. The Company applied the cash flow presentation requirements prospectively, and the 2016 statement of cash flows was not adjusted. ASU 2016-09 also allows an entity to elect as an accounting policy either to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures for service-based awards as they occur. The Company has elected to account for forfeitures as they occur. 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. The Company adopted this ASU in the first quarter of 2017 on a prospective basis. Adoption affected the classification of dividends received from equity method investees on the statement of cash flows, but did not have any other impact. 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, where the carrying value of a reporting unit is compared to its fair value, 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) | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Comparative Financial Results of Discontinued Operations | The summary comparative financial results of discontinued operations were as follows (in thousands): Three Months Ended March 31, 2017 2016 Total net revenues $ 12 $ 3,422 Total cost of revenues 26 2,892 Total selling and administrative expenses 9 360 Earnings (loss) from operations of discontinued operations $ (23 ) $ 170 Earnings (loss) before income taxes $ (23 ) $ 187 Income tax expense — — Net earnings (loss) from discontinued operations, net of tax $ (23 ) $ 187 The assets and liabilities classified as held for sale reflected in the condensed consolidated balance sheets were as follows (in thousands): March 31, 2017 December 31, 2016 (Unaudited) Current assets: Cash and cash equivalents $ 150 $ 175 Total inventories, net 7 — Other current assets 3 13 Total current assets held for sale $ 160 $ 188 Current liabilities: Accounts payable $ 24 $ 33 Accrued expenses 14 11 Customer deposits/deferred revenue 14 13 Total current liabilities $ 52 $ 57 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Measured Financial Assets and Liabilities | Fair values measured on a recurring basis at March 31, 2017: Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 4,529 $ — $ — $ 4,529 Notes receivable — — 1,669 1,669 Total $ 4,529 $ — $ 1,669 $ 6,198 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 |
Summary of Quantitative Information About Company's Level 3 Fair Value Measurements | Quantitative information about the Company’s level 3 fair value measurements at March 31, 2017 is set forth below: Fair Value at March 31, 2017 (in thousands) Valuation Technique Unobservable input Range Notes receivable $ 1,669 Discounted cash flow Probability of default Discount rate 57% 18% |
Earnings (Loss) Per Common Sh23
Earnings (Loss) Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation Between Basic and Diluted Earnings Per Share | The following table provides the reconciliation between average shares used to compute basic and diluted earnings (loss) per share: Three Months Ended March 31, 2017 2016 Weighted average shares outstanding (in thousands): Basic weighted average shares outstanding 14,264 14,203 Dilutive effect of stock options and certain non-vested shares of restricted stock 156 56 Diluted weighted average shares outstanding 14,420 14,259 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | The following table summarizes warranty activity for the three months ended March 31, 2017 and 2016: Three Months Ended March 31, 2017 2016 (in thousands) Warranty accrual at beginning of period $ 645 $ 310 Charged to expense 47 158 Amounts written off, net of recoveries (231 ) (158 ) Foreign currency adjustment 1 4 Warranty accrual at end of period $ 462 $ 314 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following at March 31, 2017: Useful life Gross Accumulated amortization Net (Years) ( in thousands) Intangible assets subject to amortization: Software 5 $ 1,821 $ (182 ) $ 1,639 Product Formulation 10 459 (293 ) 166 Total $ 2,280 $ (475 ) $ 1,805 Intangible assets consisted of the following at December 31, 2016: Useful life Gross Accumulated amortization Net (Years) (in thousands) Intangible assets subject to amortization: Software 5 $ 1,764 $ (93 ) $ 1,671 Product formulation 10 454 (276 ) 178 Total $ 2,218 $ (369 ) $ 1,849 |
Schedule of Intangible Assets Future Amortization Expense | The following table shows the Company’s estimated future amortization expense related to intangible assets for the next five years. Amount (in thousands) Remainder of 2017 $ 313 2018 407 2019 395 2020 386 2021 286 Thereafter 18 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The following represents a summary of changes in the Company’s carrying amount of goodwill for the quarter ended March 31, 2017 (in thousands): Balance as of December 31, 2016 $ 889 Foreign currency translation 9 Balance as of March 31, 2017 $ 898 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Equity Method Investments | The following summarizes our equity method investments: March 31, 2017 December 31, 2016 (in thousands) Entity Carrying Amount Economic Interest Carrying Amount Economic Interest RELM Wireless Corporation $ 4,276 8.3 % $ 4,382 8.3 % Itasca Capital, Ltd. 5,878 32.3 % 3,368 32.3 % 1347 Property Insurance Holdings, Inc. 7,883 17.4 % 5,348 12.1 % Total $ 18,037 $ 13,098 |
Summary of Income (Loss) of Equity Method Investees | The following summarizes the income of equity method investees reflected in the Statement of Operations: Three Months Ended March 31, 2017 2016 Entity (in thousands) RELM Wireless Corporation $ 8 $ 41 Itasca Capital, Ltd. 2,461 — 1347 Property Insurance Holdings, Inc. 12 — Total $ 2,481 $ 41 |
Summarized Financial Information | The summarized financial information is presented only for the periods when the Company owned its investment. For the three months ended December 31, 2016 (in thousands) Revenue $ — Gross profit $ — Operating income from continuing operations $ (59 ) Net income $ 7,667 (1) (1) Net income primarily related to unrealized gains on investments. |
Stock Compensation (Tables)
Stock Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Weighted Average Assumptions for Fair Value of Stock Options Granted During the Period | 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: 2017 2016 Expected dividend yield at date of grant 0.00 % 0.00 % Risk-free interest rate 2.04 % 1.35 % Expected stock price volatility 34.71 % 32.26 % Expected life of options (in years) 6.0 5.7 |
Summary of Stock Options Activities | The following table summarizes the Company’s stock option activity for the three months ended March 31, 2017: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 545,300 $ 4.78 9.68 $ 1,757 Granted 285,000 6.50 Exercised — — Forfeited — — Outstanding at March 31, 2017 830,300 $ 5.37 9.17 $ 245 Exercisable at March 31, 2017 148,300 $ 4.35 8.11 $ 245 |
Summary of Restricted Stock Activity | The following table summarizes restricted share activity for the three months ended March 31, 2017: Number of Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2016 58,295 $ 5.80 Granted 85,000 6.50 Shares vested — — Shares forfeited — — Non-vested at March 31, 2017 143,295 $ 6.21 |
Commitments, Contingencies an29
Commitments, Contingencies and Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Leases Future Minimum Lease Payments | The Company’s future minimum lease payments for leases at March 31, 2017 are as follows: Capital Leases Operating Leases (In thousands) Remainder 2017 $ 225 $ 255 2018 248 309 2019 130 277 2020 — 263 2021 — 152 Thereafter — — Total minimum lease payments $ 603 $ 1,256 Less: Amount representing interest (31 ) Present value of minimum lease payments 572 Less: Current maturities (260 ) Capital lease obligations, net of current portion $ 312 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Three Months Ended March 31, (In thousands) 2017 2016 Net revenue Cinema $ 9,292 $ 9,727 Digital Media 8,663 7,746 Total segment net revenue 17,955 17,473 Eliminations (29 ) (359 ) Total net revenue $ 17,926 $ 17,114 Operating income (loss) Cinema $ 2,031 $ 3,047 Digital Media (464 ) 114 Total segment operating income 1,567 3,161 Unallocated general and administrative expenses 2,165 2,048 Other income (expense) Interest, net 12 — Cinema – foreign currency transaction gain (loss) (85 ) (885 ) Digital Media – foreign currency transaction gain (loss) 88 60 Cinema - other 5 42 Digital Media - other — (4 ) Change in value of marketable securities – Corporate asset — (483 ) Total other income (loss) 20 (1,270 ) Loss before income taxes and equity method investment income $ (578 ) $ (157 ) (In thousands) March 31, 2017 December 31, 2016 Identifiable assets, excluding assets held for sale Cinema $ 28,347 $ 29,881 Digital Media 19,540 19,272 Corporate assets 18,037 13,098 Total $ 65,924 $ 62,251 |
Schedule of Segment Reporting Information by Geographic Area | Summary by Geographical Area Three Months Ended March 31, (In thousands) 2017 2016 Net revenue United States $ 14,393 $ 13,232 China 1,466 955 Latin America 284 382 Canada 1,220 1,105 Mexico 356 897 Europe 116 473 Asia (excluding China) 72 8 Other 19 62 Total $ 17,926 $ 17,114 |
Summary of Identifiable Assets by Geographical Area | (In thousands) March 31, 2017 December 31, 2016 Identifiable assets, excluding assets held for sale United States $ 44,744 $ 40,255 Canada 21,180 21,996 Total $ 65,924 $ 62,251 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) $ in Thousands | Nov. 04, 2016USD ($) |
SWBTI [Member] | |
Proceeds from sale of subsidiaries | $ 400 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Comparative Financial Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Total net revenues | $ 12 | $ 3,422 | ||
Total cost of revenues | 26 | 2,892 | ||
Total selling and administrative expenses | 9 | 360 | ||
Earnings (loss) from operations of discontinued operations | (23) | 170 | ||
Earnings (loss) before income taxes | (23) | 187 | ||
Income tax expense | ||||
Net earnings (loss) from discontinued operations, net of tax | (23) | 187 | ||
Cash and cash equivalents | 150 | $ 3,157 | $ 175 | $ 4,208 |
Total inventories, net | 7 | |||
Other current assets | 3 | 13 | ||
Total current assets held for sale | 160 | 188 | ||
Accounts payable | 24 | 33 | ||
Accrued expenses | 14 | 11 | ||
Customer deposits/deferred revenue | 14 | 13 | ||
Total current liabilities | $ 52 | $ 57 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accounting Policies [Abstract] | ||
Unrealized loss on marketable securities | $ 483 | |
Fair value of equity method investments | $ 18,400 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Fair Value Measured Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | $ 4,529 | $ 7,596 |
Notes receivable | 1,669 | 1,669 |
Total | 6,198 | 9,265 |
Level 1 [Member] | ||
Cash and cash equivalents | 4,529 | 7,596 |
Notes receivable | ||
Total | 4,529 | 7,596 |
Level 2 [Member] | ||
Cash and cash equivalents | ||
Notes receivable | ||
Total | ||
Level 3 [Member] | ||
Cash and cash equivalents | ||
Notes receivable | 1,669 | 1,669 |
Total | $ 1,669 | $ 1,669 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Summary of Quantitative Information About Company's Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Note receivable | $ 1,669 | $ 1,669 |
Valuation Technique | Discounted cash flow | |
Probability of default | 57.00% | |
Discount rate | 18.00% |
Earnings (Loss) Per Common Sh36
Earnings (Loss) Per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Option In Which Exercise Price Exceeds The Average Market Price Of Common Shares [Member] | ||
Anti dilutive securities excluded from computation of earnings per share | 385,000 | 482,500 |
Restricted Stock Units And Stock Options In Which Exercise Price Is Less Than The Average Market Price Of Common Shares [Member] | ||
Anti dilutive securities excluded from computation of earnings per share | 155,638 | 56,034 |
Earnings (Loss) Per Common Sh37
Earnings (Loss) Per Common Share - Schedule of Reconciliation Between Basic and Diluted Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Basic weighted average shares outstanding | 14,264,000 | 14,203,000 |
Dilutive effect of stock options and certain non-vested shares of restricted stock | 156,000 | 56,000 |
Diluted weighted average shares outstanding | 14,420,000 | 14,259,000 |
Warranty Reserves - Schedule of
Warranty Reserves - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Extended Product Warranty Disclosure [Abstract] | ||
Warranty accrual at beginning of period | $ 645 | $ 310 |
Charged to expense | 47 | 158 |
Amounts written off, net of recoveries | (231) | (158) |
Foreign currency adjustment | 1 | 4 |
Warranty accrual at end of period | $ 462 | $ 314 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 100 | $ 100 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Intangible assets, Gross | $ 2,280 | $ 2,218 |
Intangible assets, Accumulated amortization | (475) | (369) |
Intangible assets, Net | $ 1,805 | $ 1,849 |
Software [Member] | ||
Intangible assets, Useful life | 5 years | 5 years |
Intangible assets, Gross | $ 1,821 | $ 1,764 |
Intangible assets, Accumulated amortization | (182) | (93) |
Intangible assets, Net | $ 1,639 | $ 1,671 |
Production Formulation [Member] | ||
Intangible assets, Useful life | 10 years | 10 years |
Intangible assets, Gross | $ 459 | $ 454 |
Intangible assets, Accumulated amortization | (293) | (276) |
Intangible assets, Net | $ 166 | $ 178 |
Intangible Assets - Schedule 41
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2017 | $ 313 |
2,018 | 407 |
2,019 | 395 |
2,020 | 386 |
2,021 | 286 |
Thereafter | $ 18 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance | $ 889 |
Foreign currency translation | 9 |
Balance | $ 898 |
Equity Method Investments (Deta
Equity Method Investments (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Quoted market value of the company's ownership | $ 18,400 | ||
Retained earnings undistributed earnings from our equity method investees | $ 2,200 | ||
Relm Wireless Corp [Member] | |||
Equity method ownership percentage | 8.30% | 8.30% | |
Dividend received | $ 100 | $ 0 | |
Quoted market value of the company's ownership | $ 5,700 | ||
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% | 32.30% | |
Quoted market value of the company's ownership | $ 4,300 | ||
1347 Property Insurance Holdings Inc [Member] | |||
Equity method ownership percentage | 17.40% | 12.10% | |
Quoted market value of the company's ownership | $ 8,400 | ||
Equity method investments amount | $ 2,500 |
Equity Method Investments - Sum
Equity Method Investments - Summary of Equity Method Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Equity investment, Carrying Amount | $ 18,037 | $ 13,098 |
Relm Wireless Corp [Member] | ||
Equity investment, Carrying Amount | $ 4,276 | $ 4,382 |
Equity investment, Economic Interest | 8.30% | 8.30% |
Itasca Capital Ltd [Member] | ||
Equity investment, Carrying Amount | $ 5,878 | $ 3,368 |
Equity investment, Economic Interest | 32.30% | 32.30% |
1347 Property Insurance Holdings Inc [Member] | ||
Equity investment, Carrying Amount | $ 7,883 | $ 5,348 |
Equity investment, Economic Interest | 17.40% | 12.10% |
Equity Method Investments - S45
Equity Method Investments - Summary of Income (Loss) of Equity Method Investees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Equity method investment income | $ 2,481 | $ 41 |
Equity Method Investments [Member] | ||
Equity method investment income | 2,481 | 41 |
Relm Wireless Corp [Member] | Equity Method Investments [Member] | ||
Equity method investment income | 8 | 41 |
Itasca Capital Ltd [Member] | Equity Method Investments [Member] | ||
Equity method investment income | 2,461 | |
1347 Property Insurance Holdings Ltd [Member] | Equity Method Investments [Member] | ||
Equity method investment income | $ 12 |
Equity Method Investments - S46
Equity Method Investments - Summarized Financial Information (Details) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016USD ($) | ||
Equity Method Investments and Joint Ventures [Abstract] | ||
Revenue | ||
Gross profit | ||
Operating income from continuing operations | (59) | |
Net income | $ 7,667 | [1] |
[1] | Net income primarily related to unrealized gains on investments. |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income tax examination description | The Company has completed the examination for Federal purposes for the 2011 fiscal year with no changes. The Company is subject to examination for Federal purposes for fiscal years 2013, 2014, 2015, and 2016. In most cases, the Company is subject to examinations by state or local jurisdictions based on the particular jurisdictions statute of limitations. |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based compensation expense | $ 136 | $ 130 |
Restricted Stock [Member] | ||
Compensation cost expected to be recognized, weighted average period | 2 years 6 months | |
Unrecognized for restricted stock, value | $ 600 | |
Stock Option [Member] | ||
Number of shares granted | 100,000 | |
Share based compensation arrangement by share based payment award options grants in period weighted average grant date fair valu | $ 1.42 | |
Share-based compensation arrangement by share-based payment award, options, non-vested, number | 682,000 | |
Total unrecognized compensation cost related to stock option awards | $ 1,300 | |
Compensation cost expected to be recognized, weighted average period | 4 years 6 months | |
2010 Long-Term Incentive Plan [Member] | ||
Number of shares reserved for issuance | 1,600,000 | |
2010 Long-Term Incentive Plan [Member] | Restricted Stock [Member] | ||
Number of shares granted | 85,000 | |
2010 Long-Term Incentive Plan [Member] | Stock Option [Member] | ||
Number of shares granted | 285,000 | |
Option vesting period | 5 years | |
Share based compensation arrangement by share based payment award options grants in period weighted average grant date fair valu | $ 2.41 | |
2014 Non-Employee Plan [Member] | Restricted Stock [Member] | ||
Number of shares granted | 0 | |
Selling, General and Administrative Expenses [Member] | ||
Share-based compensation expense | $ 100 | $ 100 |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Weighted Average Fair Value Assumptions Used in Grant Date Fair Value of Purchase Rights Outstanding (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected dividend yield at date of grant | 0.00% | 0.00% |
Risk-free interest rate | 2.04% | 1.35% |
Expected stock price volatility | 34.71% | 32.26% |
Expected life of options (in years) | 6 years | 5 years 8 months 12 days |
Stock Compensation - Summary of
Stock Compensation - Summary of Stock Options Activities (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Options, Outstanding beginning balance | shares | 545,300 |
Number of Options, Granted | shares | 285,000 |
Number of Options, Exercised | shares | |
Number of Options, Forfeited | shares | |
Number of Options, Outstanding ending balance | shares | 830,300 |
Number of Options, Exercisable | shares | 148,300 |
Weighted Average Exercise Price Per Share, Outstanding beginning balance | $ / shares | $ 4.78 |
Weighted Average Exercise Price Per Share, Granted | $ / shares | 6.50 |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | |
Weighted Average Exercise Price Per Share, Forfeited | $ / shares | |
Weighted Average Exercise Price Per Share, Outstanding ending balance | $ / shares | 5.37 |
Weighted Average Exercise Price Per Share, Exercisable | $ / shares | $ 4.35 |
Weighted Average Remaining Contractual Term, beginning balance | 9 years 8 months 5 days |
Weighted Average Remaining Contractual Term, ending balance | 9 years 2 months 1 day |
Weighted Average Remaining Contractual Term, Exercisable | 8 years 1 month 10 days |
Aggregate Intrinsic Value, beginning balance | $ | $ 1,757 |
Aggregate Intrinsic Value, ending balance | $ | 245 |
Aggregate Intrinsic Value, Exercisable | $ | $ 245 |
Stock Compensation - Summary 51
Stock Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock [Member] | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Number of Restricted Stock Shares, Non-vested beginning balance | shares | 58,295 |
Number of Restricted Stock Shares, Granted | shares | 85,000 |
Number of Restricted Stock Shares, vested | shares | |
Number of Restricted Stock Shares, forfeited | shares | |
Number of Restricted Stock Shares, Non-vested beginning balance | shares | 143,295 |
Weighted Average Grant Date Fair Value, Non-vested beginning balance | $ / shares | $ 5.80 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 6.50 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant Date Fair Value, Non-vested ending balance | $ / shares | $ 6.21 |
Commitments, Contingencies an52
Commitments, Contingencies and Concentrations (Details Narrative) | 3 Months Ended |
Mar. 31, 2017Segments | |
Concentration risk, number of customers | 10 |
Operating lease expiration date | expiring through 2021 |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |
Concentration risk, percentage | 51.10% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |
Concentration risk, percentage | 37.90% |
Commitments, Contingencies an53
Commitments, Contingencies and Concentrations - Schedule of Leases Future Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Leases [Abstract] | |
Capital Leases, Remainder 2017 | $ 225 |
Capital Leases, 2018 | 248 |
Capital Leases, 2019 | 130 |
Capital Leases, 2020 | |
Capital Leases, 2021 | |
Capital Leases, Thereafter | |
Total minimum Capital lease payments | 603 |
Less: Amount representing interest | (31) |
Present value of minimum lease payments | 572 |
Less: Current maturities | (260) |
Capital lease obligations, net of current portion | 312 |
Operating Leases, Remainder 2017 | 255 |
Operating Leases, 2018 | 309 |
Operating Leases, 2019 | 277 |
Operating Leases, 2020 | 263 |
Operating Leases, 2021 | 152 |
Operating Leases, Thereafter | |
Total minimum Operating lease payments | $ 1,256 |
Business Segment Information (D
Business Segment Information (Details Narrative) | 3 Months Ended |
Mar. 31, 2017Segments | |
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 | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total segment revenue | $ 17,926 | $ 17,114 |
Operating income (Loss) | (598) | 1,113 |
Other income (expense) - foreign currency transaction gain (loss) | 3 | (825) |
Other income (expense) | 5 | 38 |
Change in value of marketable securities - Corporate asset | (483) | |
Total other income (loss) | 20 | (1,270) |
Business Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total segment revenue | 17,955 | 17,473 |
Eliminations | (29) | (359) |
Total net revenue | 17,926 | 17,114 |
Operating income (Loss) | 1,567 | 3,161 |
Unallocated general and administrative expenses | 2,165 | 2,048 |
Other income (expense) Interest, net | 12 | |
Change in value of marketable securities - Corporate asset | (483) | |
Total other income (loss) | 20 | (1,270) |
Income (loss) before taxes and equity method investment income | (578) | (157) |
Business Segments [Member] | Cinema [Member] | ||
Segment Reporting Information [Line Items] | ||
Total segment revenue | 9,292 | 9,727 |
Operating income (Loss) | 2,031 | 3,047 |
Other income (expense) - foreign currency transaction gain (loss) | (85) | (885) |
Other income (expense) | 5 | 42 |
Business Segments [Member] | Digital Media [Member] | ||
Segment Reporting Information [Line Items] | ||
Total segment revenue | 8,663 | 7,746 |
Operating income (Loss) | (464) | 114 |
Other income (expense) - foreign currency transaction gain (loss) | 88 | 60 |
Other income (expense) | $ (4) |
Business Segment Information 56
Business Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Identifiable assets, excluding assets held for sale | $ 65,924 | $ 62,251 |
Cinema [Member] | Business Segments [Member] | ||
Identifiable assets, excluding assets held for sale | 28,347 | 29,881 |
Digital Media [Member] | Business Segments [Member] | ||
Identifiable assets, excluding assets held for sale | 19,540 | 19,272 |
Corporate Assets [Member] | Business Segments [Member] | ||
Identifiable assets, excluding assets held for sale | $ 18,037 | $ 13,098 |
Business Segment Information 57
Business Segment Information - Schedule of Segment Reporting Information by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net revenue | $ 17,926 | $ 17,114 |
United States [Member] | ||
Net revenue | 14,393 | 13,232 |
China [Member] | ||
Net revenue | 1,466 | 955 |
South America [Member] | ||
Net revenue | 284 | 382 |
Canada [Member] | ||
Net revenue | 1,220 | 1,105 |
Mexico [Member] | ||
Net revenue | 356 | 897 |
Europe [Member] | ||
Net revenue | 116 | 473 |
Asia (Excluding China) [Member] | ||
Net revenue | 72 | 8 |
Other [Member] | ||
Net revenue | $ 19 | $ 62 |
Business Segment Information 58
Business Segment Information - Summary of Identifiable Assets by Geographical Area (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Identifiable assets, excluding assets held for sale | $ 65,924 | $ 62,251 |
United States [Member] | ||
Identifiable assets, excluding assets held for sale | 44,744 | 40,255 |
Canada [Member] | ||
Identifiable assets, excluding assets held for sale | $ 21,180 | $ 21,996 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) $ in Thousands | Apr. 27, 2017USD ($) |
Line of Credit [Member] | |
Debt maturity date | May 10, 2018 |
Subsequent Event [Member] | Line of Credit [Member] | |
Line of credit maximum borrowing capacity | $ 1,000 |
Subsequent Event [Member] | Line of Credit [Member] | Prime Rate [Member] | |
Line of credit bearing interest rate | 0.25% |
Subsequent Event [Member] | Long-term Debt [Member] | |
Secured loan | $ 2,000 |
Loan term | 5 years |
Debt bearing interest fixed rate | 4.50% |
Debt installment determination period | 20 years |
Debt balloon payment amount | $ 1,670 |
Debt maturity date | May 10, 2022 |