Torotel (TTLO) 10-Q 13 Mar 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Jan. 31, 2017	Mar. 13, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	TOROTEL INC
Entity Central Index Key	98,752
Current Fiscal Year End Date	--04-30
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Jan. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		5,995,750

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jan. 31, 2017	Apr. 30, 2016
Current assets:
Cash	$ 875,000	$ 1,846,000
Trade receivables, net	1,683,000	1,902,000
Inventories	2,642,000	1,703,000
Prepaid expenses and other current assets	222,000	202,000
Assets, Current	5,422,000	5,653,000
Land	265,000	265,000
Buildings and improvements	1,085,000	1,049,000
Equipment	3,447,000	3,145,000
Property, Plant and Equipment, Gross, Total	4,797,000	4,459,000
Less accumulated depreciation	3,333,000	3,139,000
Property, plant and equipment, net	1,464,000	1,320,000
Deferred income taxes	710,000	592,000
Other assets	170,000	115,000
Total Assets	7,766,000	7,680,000
Current liabilities:
Current maturities of long-term debt	137,000	90,000
Trade accounts payable	904,000	764,000
Accrued liabilities	514,000	468,000
Customer deposits	14,000	29,000
Liabilities, Current	1,569,000	1,351,000
Long-term debt, less current maturities	479,000	468,000
Stockholders' equity:
Common stock; par value $0.01; 6,000,000 shares authorized; as of January 31, 2017, there were 5,995,750 shares issued and outstanding; as of April 30, 2016, there were 5,615,750 shares issued and outstanding	60,000	60,000
Capital in excess of par value	12,301,000	12,277,000
Accumulated deficit	(6,643,000)	(6,467,000)
Treasury stock, at cost		(9,000)
Stockholders' Equity	5,718,000	5,861,000
Total Liabilities and Stockholders' Equity	$ 7,766,000	$ 7,680,000

CONSOLIDATED BALANCE SHEETS (PA

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares	Jan. 31, 2017	Apr. 30, 2016
Stockholders' equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	6,000,000	6,000,000
Common stock, shares issued	5,995,750	5,615,750
Common stock, shares outstanding	5,995,750	5,615,750

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 3,702,000	$ 3,622,000	$ 11,657,000	$ 11,831,000
Cost of goods sold	2,657,000	2,443,000	7,920,000	7,879,000
Gross profit	1,045,000	1,179,000	3,737,000	3,952,000
Operating expenses:
Engineering	215,000	195,000	662,000	572,000
Selling, general and administrative	1,146,000	811,000	3,353,000	2,714,000
Operating expenses	1,361,000	1,006,000	4,015,000	3,286,000
Earnings (loss) from operations	(316,000)	173,000	(278,000)	666,000
Other expense:
Interest expense, net	5,000	6,000	16,000	19,000
Earnings (loss) before provision (credit) for income taxes	(321,000)	167,000	(294,000)	647,000
Provision (credit) for income taxes	(130,000)	66,000	(118,000)	251,000
Net earnings (loss)	$ (191,000)	$ 101,000	$ (176,000)	$ 396,000
Basic earnings (loss) per share	$ (0.04)	$ 0.02	$ (0.03)	$ 0.07

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Cash flows from operating activities:
Net earnings (loss)	$ (176,000)	$ 396,000
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Stock compensation cost amortized	33,000	(68,000)
Depreciation	194,000	311,000
Deferred income taxes	(118,000)	231,000
Increase (decrease) in cash flows from operations resulting from changes in:
Trade receivables	219,000	79,000
Inventories	(939,000)	(351,000)
Prepaid expenses and other assets	(75,000)	(74,000)
Trade accounts payable	140,000	(258,000)
Accrued liabilities	46,000	(204,000)
Customer deposits	(15,000)	(41,000)
Net cash provided by (used in) operating activities	(691,000)	21,000
Cash flows from investing activities:
Capital expenditures	(338,000)	(331,000)
Net cash used in investing activities	(338,000)	(331,000)
Cash flows from financing activities:
Principal payments on long-term debt	(66,000)	(101,000)
Proceeds from long-term debt	124,000
Net cash provided by (used in) financing activities	58,000	(101,000)
Net decrease in cash	(971,000)	(411,000)
Cash, beginning of period	1,846,000	1,892,000
Cash, end of period	875,000	1,481,000
Cash paid during the year for:
Interest	16,000	19,000
Income taxes	$ 87,000	$ 69,000

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Jan. 31, 2017
BASIS OF PRESENTATION
BASIS OF PRESENTATION	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE The consolidated condensed balance sheet as of April 30, 2016, which has been derived from the audited financial statements of Torotel, Inc. ("Torotel"), is accompanied by the unaudited interim consolidated condensed financial statements, which reflect the normal recurring adjustments that in the opinion of management are necessary to present fairly Torotel’s consolidated financial position at January 31, 2017, and the consolidated results of operations and cash flows for the three and nine months ended January 31, 2017, and 2016, respectively. The unaudited interim consolidated condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although management believes the disclosures made are adequate to make the information not misleading. The financial statements contained herein should be read in conjunction with Torotel’s consolidated financial statements and related notes filed on Torotel's Form 10-K for the year ended April 30, 2016 as filed with the SEC on June 30, 2016. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The standard is effective for annual reporting periods beginning after December 15, 2017 including interim periods within that reporting period and early adoption permitted for reporting periods beginning after December 15, 2016. The standard will supersede existing revenue recognition guidance, including industry-specific guidance, and will provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The provisions of this new guidance are effective as of the beginning of Torotel’s first fiscal quarter of 2019. Torotel is currently evaluating the transition method to be used and the impact of adoption of this standard on its consolidated financial statements. Torotel does not anticipate the impact to be material to the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 requires expanded disclosures about the nature and terms of lease agreements and is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. Torotel is currently evaluating the potential impact of this standard on its consolidated financial statements. Torotel anticipates the impact will be material to the consolidated financial statements due to the building lease that went into effect January 1, 2017.

NATURE OF OPERATIONS

NATURE OF OPERATIONS	9 Months Ended
	Jan. 31, 2017
NATURE OF OPERATIONS
NATURE OF OPERATIONS	NOTE Torotel conducts business primarily through its wholly owned subsidiary, Torotel Products, Inc. (“Torotel Products”), and until early in the fourth quarter of the fiscal year ended April 30, 2016 also operated another wholly owned subsidiary, Electronika, Inc. (“Electronika”) that licensed, marketed, and sold ballast transformers to the airline industry. Electronika was dissolved and its affairs wound up as of February 8, 2016. As a result of the dissolution of Electronika, Torotel no longer sells ballast transformers. Torotel Products specializes in the custom design and manufacture of a wide variety of precision magnetic components, consisting of transformers, inductors, reactors, chokes, toroidal coils, high voltage transformers, dry-type transformers and electro-mechanical assemblies, for use in commercial, industrial and military electronics.

INVENTORIES

INVENTORIES	9 Months Ended
	Jan. 31, 2017
INVENTORIES
INVENTORIES	NOTE The following table summarizes the components of inventories: January 31, 2017 April 30, 2016 Raw materials $ $ Work in process Finished goods $ $

FINANCING AGREEMENTS

FINANCING AGREEMENTS	9 Months Ended
	Jan. 31, 2017
FINANCING AGREEMENTS
FINANCING AGREEMENTS	NOTE Torotel Products has a financing agreement (the “financing agreement”) with Commerce Bank, N.A. (the “Bank”). The financing agreement provides for a revolving line of credit, a guidance line of credit, and a real estate term loan. Torotel serves as an additional guarantor to all notes described below. A summary of the notes outstanding under the financing agreement is provided below: January 31, 2017 April 30, 2016 4.05% mortgage note payable in monthly installments of $4,873, including interest, with final payment of $349,000 due January 27, 2019 $ $ 4.00% line of credit with a maturity date of September 20, 2017 - - Borrowings under an equipment financing line of credit: 4.75% note payable in monthly installments of $2,269, including interest, with final payment due May 27, 2018 3.75% note payable in monthly installments of $2,112, including interest, with final payment due April 10, 2018 4.05% note payable in monthly installments of $3,680, including interest, with final payment due January 10, 2020 - Total long-term debt Less current installments Long-term debt, excluding current installments $ $ The revolving line of credit, to be used for working capital purposes, is renewable annually. The associated interest rate is equal to the greater of the floating Commerce Bank Prime Rate (currently 3.75%) or a floor of 4% (as listed above). Monthly repayments of interest only are required with the principal due at maturity. The maximum borrowing of this line of credit is $500,000. This revolving line of credit is cross collateralized and cross defaulted with all other credit facilities and arrangements of Torotel Products with the Bank and is secured by a first lien on all business assets of Torotel Products. The mortgage note requires monthly payments consisting of both interest and principal. This obligation is cross collateralized and cross defaulted with all other credit facilities and arrangements of Torotel Products with the Bank and is secured by a first real estate mortgage on the property located at 620 North Lindenwood Drive in Olathe, Kansas. This loan was refinanced on February 21, 2014 with a principal amount of $542,000 at that date. The equipment note is a guidance line of credit to be used for equipment purchases. Monthly repayments consisting of both interest and principal are required. This note is cross collateralized and cross defaulted with all other credit facilities and arrangements of Torotel Products with the Bank and is secured by a purchase money security interest in the assets purchased as well as a first lien on all business assets of Torotel Products. The maximum borrowing of this line of credit is $500,000. Torotel obtained an equipment note on January 10, 2017 for $124,000. The note is under the same guidance as previous notes and is below the maximum borrowing of $500,000. Torotel is also required to comply with specified financial covenants in its guaranty of the financing agreement. As of January 31, 2017, Torotel was in compliance with these covenants. Irrevocable Standby Letter of Credit Under the terms of a lease amendment for its manufacturing facility located in Olathe, Kansas (see Note 11), Torotel provided the landlord an irrevocable standby letter of credit in the amount of $350,000 as additional security. The balance under the letter of credit will automatically reduce in accordance with the below schedule if not drawn upon: Date of Reduction Amount of Reduction Balance of Letter of Credit January 1, 2020 January 1, 2021 January 1, 2022 January 1, 2023 January 1, 2024 -

INCOME TAXES

INCOME TAXES	9 Months Ended
	Jan. 31, 2017
INCOME TAXES
INCOME TAXES	NOTE As of January 31, 2017, the federal tax returns for the fiscal years ended 2014 through 2016 are open to audit until the statute of limitations closes for the years in which our net operating losses are utilized. We would recognize interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense. As of January 31, 2017, we recorded no accrued interest or penalties related to uncertain tax positions. We expect no significant change in the amount of unrecognized tax benefit, accrued interest or penalties within the next twelve months.

RESTRICTED STOCK AGREEMENTS

RESTRICTED STOCK AGREEMENTS	9 Months Ended
	Jan. 31, 2017
RESTRICTED STOCK AGREEMENTS
RESTRICTED STOCK AGREEMENTS	NOTE Restricted Stock Agreements, and stock awards thereunder, are authorized by the Compensation and Nominating Committee (the "Committee") and the Board of Directors of Torotel (the "Board"). The terms of the Restricted Stock Agreements afford the grantees all of the rights of a stockholder with respect to the award shares, including the right to vote such shares and to receive dividends and other distributions payable with respect to such shares since the date of award. Under the terms of each agreement, the non-vested shares are restricted as to disposition and subject to forfeiture under certain circumstances. The Restricted Stock Agreements further provide, subject to certain conditions, that if prior to all of the restricted shares having vested, we undergo a change in control, then all of the restricted shares shall be vested and no longer subject to restrictions under the Restricted Stock Agreements. The restricted shares are treated as non-vested stock; accordingly, the fair value of the restricted stock at the date of award is offset against capital in excess of par value in the accompanying consolidated balance sheets under stockholders' equity. 2013 Restricted Stock Grants On June 17, 2013, we entered into Restricted Stock Agreements with three key employees pursuant to the Company’s Stock Award Plan (the “Plan”). The aggregate amount of the restricted stock awards was 400,000 shares of common stock. These shares were transferred from treasury shares. Based on the market price of $0.50 for our common stock as of June 17, 2013, the fair value of the restricted stock at the date of award was $200,000. The shares issued pursuant to the Restricted Stock Agreements on June 17, 2013 are restricted and may not be sold, assigned, pledged or otherwise disposed of until the restrictions lapse. The restrictions will lapse on the fifth anniversary of the date of grant if during the five year restriction period, (1) Torotel's cumulative annual growth in earnings before interest and taxes is at least 10% and (2) Torotel's average return on capital employed ("ROCE") is at least 25%. The restrictions will also lapse, if prior to the fifth anniversary of the date of grant, (1) the grantee's employment with Torotel is terminated by reason of disability, (2) the grantee dies, or (3) the Committee, in its sole discretion, terminates the restrictions. If the restrictions on such shares have not lapsed by the fifth anniversary of the date of grant, such shares will be forfeited to Torotel. Stock compensation cost net of an appropriate pre-vesting forfeiture rate is recorded per quarter for the remainder of the vesting period provided the financial performance metrics as outlined in the Stock Award Plan are likely to be attained. However, due to updated projections developed in the third quarter of fiscal year 2016, the likelihood of achieving the financial performance metrics as outlined in the Restricted Stock Agreements were classified as not probable. As a result, we stopped amortizing the stock compensation cost associated with the restricted stock awarded on July 17, 2013 and recovered the previously amortized stock compensation cost of $88,000 in the third quarter ended January 31, 2016. The 350,000 shares associated with the restricted stock awards dated June 17, 2013, were reverted to treasury shares during the fiscal year 2017. 2016 Restricted Stock Grants The Shares were granted subject to restrictions that prohibit them from being sold, assigned, pledged or otherwise disposed of until the restrictions lapse. The restrictions will lapse on the fifth anniversary of the date of grant if during the five year restriction period, (1) the Company's cumulative annual growth in revenue is at least 10%, and (2) the average economic value added as a percentage of revenue is at least 2%. The economic value added, which attempts to capture the true economic profit, will be calculated as the operating profit less the cost of capital with adjustments made for taxes. The restrictions will also lapse, if prior to the fifth anniversary of the date of grant, (1) the grantee's employment with the Company is terminated by reason of disability, (2) the grantee dies, or (3) the Committee, in its sole discretion, terminates the restrictions. If the restrictions on the Shares have not lapsed by the fifth anniversary of the date of grant, the Shares will be forfeited to the Company. Stock Compensation Costs and Restricted Stock Activity Total stock compensation cost for the nine months ended January 31, 2017 and 2016 was an expense of $33,000 and a credit of $68,000, respectively. Restricted stock activity for each nine month period through January 31 is summarized as follows: 2017 2016 Restricted Weighted Restricted Weighted Shares Average Shares Average Under Grant Under Grant Option Price Option Price Outstanding at May 1 $ $ Granted — — Vested — — — — Forfeited — — Outstanding at January 31 $ $

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Jan. 31, 2017
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE The shares of common stock outstanding as of January 31 of each year are summarized as follows: 2017 2016 Balance, May 1 Restricted stock activity — Treasury stock activity — Balance, January 31

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Jan. 31, 2017
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE Basic and diluted earnings per share are computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during each period. The basic earnings per common share were computed as follows: Three Months Ended Nine Months Ended January 31, 2017 January 31, 2016 January 31, 2017 January 31, 2016 Net earnings (loss) $ $ $ $ Amounts allocated to participating securities (nonvested restricted shares) — — Net income attributable to common shareholders $ $ $ $ Basic weighted average common shares Earnings per share attributable to common shareholders: Basic earnings per share $ $ $ $ ASC 260, Earnings per Share, provides that unvested share-based payment awards that contain non-forfeitable rights to dividends are considered to be participating securities and must be included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per share is not presented as we do not have any shares considered incremental and dilutive.

CUSTOMER DEPOSITS

CUSTOMER DEPOSITS	9 Months Ended
	Jan. 31, 2017
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS	NOTE 9—CUSTOMER DEPOSITS For certain customers, we collect payment at the time the order is placed. These deposits are classified as a liability and will be recognized as revenue at the time of shipment in accordance with our revenue recognition policy. As of January 31, 2017 we had approximately $14,000 in customer deposits related to these arrangements.

CONCENTRATIONS OF CREDIT RISK

CONCENTRATIONS OF CREDIT RISK	9 Months Ended
	Jan. 31, 2017
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK	NOTE 10 — CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and accounts receivable. We grant unsecured credit to most of our customers. We do not believe that we are exposed to any extraordinary credit risk as a result of this policy. At various times, and at January 31, 2017, cash balances exceeded federally insured limits. However, we have incurred no losses in the cash accounts and we do not believe we are exposed to any significant credit risk with respect to our cash.

OPERATING LEASE

OPERATING LEASE	9 Months Ended
	Jan. 31, 2017
OPERATING LEASE
OPERATING LEASE	NOTE 11 — OPERATING LEASE On October 31, 2016, Torotel entered into a Second Amendment (“Amendment”) to the lease for one of its manufacturing facility located in Olathe, Kansas. The Amendment became effective as of January 1, 2017, and served to extend the lease term through December 31, 2026 and expand the leased space from approximately 14,137 square feet to approximately 72,388 square feet. The Amendment provides that the monthly base rate in the first two years of the extended term is $26,844, escalating thereafter. The Amendment required Torotel to increase its security deposit from $12,750 to $55,000 and provide a letter of credit as additional security. Additionally, the Amendment addresses other terms and conditions by which Torotel may continue to lease the facility or terminate the lease, and provides Torotel two separate options to extend the lease term for additional five year periods. Future minimum lease payments on this operating lease are as follows: Years Ending April 30, 2017 $ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total $

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Jan. 31, 2017
INVENTORIES
Table summarizing the components of inventories	January 31, 2017 April 30, 2016 Raw materials $ $ Work in process Finished goods $ $

FINANCING AGREEMENTS (Tables)

FINANCING AGREEMENTS (Tables)	9 Months Ended
	Jan. 31, 2017
FINANCING AGREEMENTS
Summary of the notes within the financing agreement	January 31, 2017 April 30, 2016 4.05% mortgage note payable in monthly installments of $4,873, including interest, with final payment of $349,000 due January 27, 2019 $ $ 4.00% line of credit with a maturity date of September 20, 2017 - - Borrowings under an equipment financing line of credit: 4.75% note payable in monthly installments of $2,269, including interest, with final payment due May 27, 2018 3.75% note payable in monthly installments of $2,112, including interest, with final payment due April 10, 2018 4.05% note payable in monthly installments of $3,680, including interest, with final payment due January 10, 2020 - Total long-term debt Less current installments Long-term debt, excluding current installments $ $
Schedule of letter of credit outstanding balance	Date of Reduction Amount of Reduction Balance of Letter of Credit January 1, 2020 January 1, 2021 January 1, 2022 January 1, 2023 January 1, 2024 -

RESTRICTED STOCK AGREEMENTS (Ta

RESTRICTED STOCK AGREEMENTS (Tables)	9 Months Ended
	Jan. 31, 2017
RESTRICTED STOCK AGREEMENTS
Summary of restricted stock activity	2017 2016 Restricted Weighted Restricted Weighted Shares Average Shares Average Under Grant Under Grant Option Price Option Price Outstanding at May 1 $ $ Granted — — Vested — — — — Forfeited — — Outstanding at January 31 $ $

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
	Jan. 31, 2017
STOCKHOLDERS' EQUITY
Summary of changes in shares of common stock outstanding	2017 2016 Balance, May 1 Restricted stock activity — Treasury stock activity — Balance, January 31

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Jan. 31, 2017
EARNINGS PER SHARE
Computation of earnings per common share	Three Months Ended Nine Months Ended January 31, 2017 January 31, 2016 January 31, 2017 January 31, 2016 Net earnings (loss) $ $ $ $ Amounts allocated to participating securities (nonvested restricted shares) — — Net income attributable to common shareholders $ $ $ $ Basic weighted average common shares Earnings per share attributable to common shareholders: Basic earnings per share $ $ $ $

OPERATING LEASE (Tables)

OPERATING LEASE (Tables)	9 Months Ended
	Jan. 31, 2017
OPERATING LEASE
Schedule of future minimum lease payments	Years Ending April 30, 2017 $ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total $

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Jan. 31, 2017	Apr. 30, 2016
INVENTORIES
Raw materials	$ 1,335,000	$ 1,051,000
Work in process	704,000	400,000
Finished goods	603,000	252,000
Inventories	$ 2,642,000	$ 1,703,000

FINANCING AGREEMENTS (Details)

FINANCING AGREEMENTS (Details) - USD ($)	Jan. 01, 2024	Jan. 01, 2023	Jan. 01, 2022	Jan. 01, 2021	Jan. 01, 2020	Jan. 31, 2017	Jan. 10, 2017	Apr. 30, 2016	Feb. 21, 2014
Long-term indebtedness
Total long-term debt						$ 616,000		$ 558,000
Less current installments						137,000		90,000
Long-term debt, excluding current installments						$ 479,000		468,000
Prime Rate | Minimum
Long-term indebtedness
Rate						4.00%
Mortgage note payable
Long-term indebtedness
Total long-term debt						$ 425,000		456,000
Principal amount									$ 542,000
Rate						4.05%
Monthly installments						$ 4,873
Final payment						349,000
Line of Credit
Long-term indebtedness
Principal amount							$ 124,000
Maximum borrowing						$ 500,000
Line of Credit | Minimum
Long-term indebtedness
Rate						4.00%
Line of Credit | Prime Rate
Long-term indebtedness
Rate						3.75%
Note Payable
Long-term indebtedness
Equipment financing maximum borrowing						$ 500,000
Irrevocable Standby Letter of Credit
Long-term indebtedness
Principal amount						350,000
Irrevocable Standby Letter of Credit | Forecast
Long-term indebtedness
Amount of Reduction	$ 50,000	$ 75,000	$ 75,000	$ 75,000	$ 75,000
Balance of Letter of Credit		$ 50,000	$ 125,000	$ 200,000	$ 275,000
Note payable 4.75 percent
Long-term indebtedness
Total long-term debt						$ 36,000		53,000
Rate						4.75%
Monthly installments						$ 2,269
Note payable 3.75 percent
Long-term indebtedness
Total long-term debt						$ 31,000		$ 49,000
Rate						3.75%
Monthly installments						$ 2,112
Note payable 4.05 percent
Long-term indebtedness
Total long-term debt						$ 124,000
Rate						4.05%
Monthly installments						$ 3,680

INCOME TAXES (Details)

INCOME TAXES (Details)	Jan. 31, 2017USD ($)
INCOME TAXES
Accrued interest or penalties related to uncertain tax positions	$ 0
Expected change in the amount of unrecognized tax benefit, accrued interest or penalties within the next twelve months	$ 0

RESTRICTED STOCK AGREEMENTS (De

RESTRICTED STOCK AGREEMENTS (Details)	Sep. 21, 2016employeeshares	Jun. 17, 2013USD ($)employee$ / sharesshares	Jan. 31, 2016USD ($)$ / sharesshares	Jan. 31, 2017USD ($)$ / sharesshares	Jan. 31, 2016USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award
Stock compensation cost amortized | $				$ 33,000	$ (68,000)
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award
Restricted Stock Forfeiture Recovery | $			$ 88,000
Stock compensation cost amortized | $				$ 33,000	$ (68,000)
Restricted Shares Under Option
Outstanding at beginning of period				350,000	350,000
Granted				730,000
Forfeited				(350,000)
Outstanding at end of period			350,000	730,000	350,000
Weighted Average Grant Price
Outstanding at beginning of period, Weighted Average Grant Price (in dollars per share) | $ / shares				$ 0.500	$ 0.500
Granted, Weighted Average Grant Price (in dollars per share) | $ / shares				0.740
Forfeited, Weighted Average Grant Price (in dollars per share) | $ / shares				0.5
Outstanding at end of period, Weighted Average Grant Price (in dollars per share) | $ / shares			$ 0.500	$ 0.740	$ 0.500
Stock Award Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award
Restriction period of awards	5 years	5 years
Minimum cumulative annual growth in EBIT necessary for lapsing of	10.00%	10.00%
Minimum average return on capital employed necessary for lapsing of	2.00%	25.00%
Stock Award Plan | Restricted Stock | Three Key Employees
Share-based Compensation Arrangement by Share-based Payment Award
Number of key employees receiving award under plan | employee	3	3
Aggregate amount of restricted stock awards authorized	730,000	400,000
Number of shares expected to revert during fiscal year				350,000
Share Price | $ / shares		$ 0.50
Fair value on grant date | $		$ 200,000

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	9 Months Ended
	Jan. 31, 2017shares
Increase (Decrease) in Stockholders' Equity
Balance beginning of year (in shares)	5,615,750
Restricted Stock Activity	730,000
Treasury stock activity	(350,000)
Balance end of year (in shares)	5,995,750

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
EARNINGS PER SHARE
Net earnings (loss)	$ (191,000)	$ 101,000	$ (176,000)	$ 396,000
Amounts allocated to participating securities (nonvested restricted shares)		(6,000)		(25,000)
Net income attributable to common shareholders	$ (191,000)	$ 95,000	$ (176,000)	$ 371,000
Basic weighted average common shares	4,915,750	5,265,750	5,077,171	5,265,750
Earnings per share attributable to common shareholders:
Basic earnings (loss) per share	$ (0.04)	$ 0.02	$ (0.03)	$ 0.07

CUSTOMER DEPOSITS (Details)

CUSTOMER DEPOSITS (Details) - USD ($)	Jan. 31, 2017	Apr. 30, 2016
CUSTOMER DEPOSITS
Customer Advances, Current	$ 14,000	$ 29,000

CONCENTRATIONS OF CREDIT RISK (

CONCENTRATIONS OF CREDIT RISK (Details)	9 Months Ended
	Jan. 31, 2017USD ($)
CONCENTRATIONS OF CREDIT RISK
Losses in the cash accounts	$ 0

OPERATING LEASE (Details)

OPERATING LEASE (Details)	Oct. 31, 2016USD ($)ft²Option	Oct. 30, 2016USD ($)ft²
OPERATING LEASE
Square feet (in area) | ft²	72,388	14,137
Monthly base rate in first two years of extended lease	$ 26,844
Number of years for which monthly base rate is fixed	2 years
Security deposit	$ 55,000	$ 12,750
Number of separate options to extend the lease term | Option	2
Extension of lease term	5 years
Future minimum lease payments
2,017	$ 53,000
2,018	322,000
2,019	329,000
2,020	362,000
2,021	402,000
2,022	427,000
2,023	442,000
2,024	452,000
2,025	456,000
2,026	467,000
2,027	350,000
Total	$ 4,062,000