Torotel (TTLO) 10-K 28 Jul 17 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Apr. 30, 2017	Jul. 28, 2017	Oct. 30, 2016
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-K
Document Period End Date	Apr. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		5,995,750
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float			$ 4,188,481.50

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Apr. 30, 2017	Apr. 30, 2016
Current assets:
Cash	$ 298,000	$ 1,846,000
Trade receivables, net	2,007,000	1,902,000
Inventories	2,739,000	1,703,000
Prepaid expenses and other current assets	217,000	202,000
Property held for sale	688,000
Assets, Current	5,949,000	5,653,000
Land		265,000
Buildings and improvements	532,000	1,049,000
Equipment	3,718,000	3,145,000
Property, Plant and Equipment, Gross, Total	4,250,000	4,459,000
Less accumulated depreciation	2,937,000	3,139,000
Property, plant and equipment, net	1,313,000	1,320,000
Deferred income taxes	747,000	592,000
Other assets	256,000	115,000
Total Assets	8,265,000	7,680,000
Current liabilities:
Current maturities of long-term debt	603,000	90,000
Trade accounts payable	1,204,000	764,000
Accrued liabilities	319,000	468,000
Customer deposits	33,000	29,000
Liabilities, Current	2,159,000	1,351,000
Long-term debt, less current maturities	445,000	468,000
Stockholders' equity:
Common stock; par value $0.01; 6,000,000 shares authorized; as of April 30, 2017, there were 5,995,750 shares issued and outstanding; as of April 30, 2016, there were 5,983,545 shares issued and 5,615,750 shares outstanding	60,000	60,000
Capital in excess of par value	12,329,000	12,277,000
Accumulated deficit	(6,728,000)	(6,467,000)
Treasury stock, at cost		(9,000)
Stockholders' Equity	5,661,000	5,861,000
Total Liabilities and Stockholders' Equity	$ 8,265,000	$ 7,680,000

CONSOLIDATED BALANCE SHEETS (PA

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares	Apr. 30, 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	5,983,545
Common stock, shares outstanding	5,995,750	5,615,750

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 16,302,000	$ 16,194,000
Cost of goods sold	11,047,000	10,883,000
Gross profit	5,255,000	5,311,000
Operating expenses:
Engineering	906,000	811,000
Selling, general and administrative	4,738,000	3,643,000
Operating expenses	5,644,000	4,454,000
Earnings (loss) from operations	(389,000)	857,000
Other expense:
Interest expense, net	24,000	25,000
Earnings (loss) before provision (credit) for income taxes	(413,000)	832,000
Provision (benefit) for income taxes	(152,000)	328,000
Net earnings (loss)	$ (261,000)	$ 504,000
Basic earnings (loss) per share	$ (0.05)	$ 0.10

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Excess of Par Value	Accumulated Deficit	Treasury Stock, at cost	Total
Balance beginning of year at Apr. 30, 2015	$ 60,000	$ 12,342,000	$ (6,971,000)	$ (9,000)	$ 5,422,000
Balance beginning of year (in shares) at Apr. 30, 2015	5,983,545				5,615,750
Stock compensation credit		(65,000)			$ (65,000)
Net earnings (loss)			504,000		504,000
Balance end of year at Apr. 30, 2016	$ 60,000	12,277,000	(6,467,000)	$ (9,000)	$ 5,861,000
Balance end of year (in shares) at Apr. 30, 2016	5,983,545				5,615,750
Stock compensation credit		$ 61,000			$ 61,000
Shares reverted	(350,000)				350,000
Net earnings (loss)			(261,000)		$ (261,000)
Shares released and issued	362,205	(9,000)		9,000
Balance end of year at Apr. 30, 2017	$ 60,000	$ 12,329,000	$ (6,728,000)		$ 5,661,000
Balance end of year (in shares) at Apr. 30, 2017	5,995,750				5,995,750

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
Cash flows from operating activities:
Net earnings (loss)	$ (261,000)	$ 504,000
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Stock compensation cost amortized (credited)	61,000	(65,000)
Depreciation	265,000	291,000
Deferred income taxes	(155,000)	244,000
Increase (decrease) in cash flows from operations resulting from changes in:
Trade receivables	(105,000)	(317,000)
Inventories	(1,036,000)	(27,000)
Prepaid expenses and other assets	(156,000)	(90,000)
Trade accounts payable	440,000	38,000
Accrued liabilities	(149,000)	(111,000)
Customer deposits	4,000	(38,000)
Net cash provided by (used in) operating activities	(1,092,000)	429,000
Cash flows from investing activities:
Capital expenditures	(946,000)	(324,000)
Purchase of investments		(28,000)
Net cash used in investing activities	(946,000)	(352,000)
Cash flows from financing activities:
Principal payments on long-term debt		(123,000)
Proceeds from principal payments of long term debt	(99,000)
Proceeds from long-term debt	124,000
Proceeds from line of credit	465,000
Net cash provided by (used in) financing activities	490,000	(123,000)
Net decrease in cash	(1,548,000)	(46,000)
Cash, beginning of period	1,846,000	1,892,000
Cash, end of period	298,000	1,846,000
Cash paid during the year for:
Interest	24,000	25,000
Income taxes	101,000	$ 78,000
Non-cash investing and financing activities:
Property, plant and equipment reclassified as held for sale	$ 688,000

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Apr. 30, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Torotel, Inc. ("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 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 aerospace, industrial and military electronics. Principles of Consolidation The consolidated financial statements include the accounts of Torotel, Inc. and its wholly owned subsidiaries, Torotel Products, Torotel Manufacturing Corporation, and Electronika (through Electronika’s date of dissolution). All significant inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these consolidated financial statements include those assumed in computing the valuation allowance of inventory, the allowance for doubtful accounts receivable, the valuation allowance on deferred income tax assets, and the reserve for warranty costs. Accordingly, actual results could differ from those estimates. Any changes in estimates are recorded in the period in which they become known. 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 April 30, 2017 and 2016, cash balances exceeded federally insured limits. We have not experienced any losses in the cash accounts and we do not believe we are exposed to any significant credit risk with respect to our cash. Fair Value of Financial Instruments We determine fair value by utilizing a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels as follows:  Level 1. Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.  Level 2. Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.  Level 3. Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in the assessment of fair value. The carrying amounts of certain financial instruments, including cash, trade receivables and trade accounts payable approximate fair value due to their short maturities. As of April 30, 2017 and 2016, the amount of our long-term debt approximates fair value based on the present value of estimated future cash flows using a discount rate commensurate with a borrowing rate available to us. The inputs used to estimate the fair value of long-term debt are considered Level 2 inputs. Treasury Stock We utilize the weighted average cost method in accounting for treasury stock transactions. Revenue Recognition Revenue is recognized when a fixed price contract or purchase order exists; delivery has occurred; and collection is reasonably assured. Selling terms are generally FOB Shipping Point so we consider our products delivered once they have been shipped and title and risk of loss have been transferred. Allowance for Doubtful Accounts Gross trade accounts receivable are offset with an allowance for doubtful accounts. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We review the allowance for doubtful accounts on a regular basis, and all past due balances are reviewed individually for collectability. Account balances are charged against the allowance when placed for collection. Recoveries of receivables previously written off are recorded when received. The majority of the customer accounts are considered past due after the invoice becomes older than the customer's credit terms. Interest is not charged on past due accounts. The allowance for doubtful accounts as of April 30, 2017 and 2016 was $12,000 and $12,000, respectively. Inventories Inventories are stated at the lower of cost or market. Cost is determined using a FIFO approximated weighted average cost method of valuation. Our industry is characterized by short-term customer commitments and changes in demand, as well as other market considerations. Provisions for obsolete and excess inventory are based on reviews of inventory usage, quantities on hand and latest product demand information from customers. Inventories are reviewed in detail utilizing a 12-month time horizon. Individual part numbers that have not had any usage or purchases in a 12-month time period and do not have any known usage requirements are categorized as obsolete; individual part numbers having more than a 12-month supply based on the current year's usage are categorized as excess. Once specific inventory has been identified as excess or obsolete, the cost of the identified inventory is fully reserved and the cost of the inventory is not recovered until it is sold. The reserve balance is analyzed for adequacy as part of the inventory review each quarter. The reserve for inventory as of April 30, 2017 and 2016 was $261,000 and $379,000, respectively. Property, Plant and Equipment Property, plant and equipment are carried at cost. Depreciation and amortization are provided in amounts sufficient to relate the costs of depreciable assets to operations primarily using the straight-line method over estimated useful lives of three to five years for equipment and three and a half to twenty years for buildings and improvements. Cash For purposes of the consolidated statements of cash flows, we consider all short-term investments and demand deposits purchased with original maturity dates of three months or less to be cash. Income Taxes Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. An estimated effective tax rate for a year is applied to our quarterly operating results. In the event there is a significant or unusual item recognized in our quarterly operating results, the tax attributable to that item is separately calculated and recorded at the same time as that item. Tax law requires items to be included in our tax returns at different times than the items are reflected in our financial statements. As a result, our annual tax rate reflected in our financial statements is different than that reported in our tax returns (our cash tax rate). Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years for which we have already recorded the tax benefit in our statement of operations. We establish valuation allowances for our deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax liabilities generally represent tax expense recognized in our financial statements for which payment has been deferred, or expense for which we have already taken a deduction in our tax return but have not yet recognized as expense in our financial statements. The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. If necessary, we record a liability for the difference between the benefit recognized and measured for financial statement purposes and the tax position taken or expected to be taken on our tax return. To the extent that our assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. If applicable in a given year, tax-related interest and penalties are classified as a component of income tax expense. Advertising Costs Advertising costs are expensed as incurred. For the years ended April 30, 2017 and 2016 advertising costs were $6,000 and $1,000, respectively. Warranty Costs We maintain a reserve for estimated warranty costs associated with products returned from customers. A limited warranty is provided for a period of one year which requires us to repair or replace defective products at no cost to the customer. The warranty reserve is based on historical experience and reflects management's best estimate of probable liability under the product warranties. Share-Based Compensation We have a share-based compensation plan that includes restricted stock, which is described more fully in Note 7 of the Notes to the Consolidated Financial Statements. We account for the share-based compensation plan in accordance with authoritative guidance under which the estimated fair value of share-based awards granted under our share-based compensation plan is recognized as compensation expense over the vesting period of the award. New Accounting Guidance 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 reporting periods beginning after December 15, 2017 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 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. The status of the implementation effort is in the preliminary stage. No significant implementation matters have been identified as needing to be addressed. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. The standard is effective for reporting periods beginning December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. Torotel early adopted the standard during the third quarter of fiscal year 2016 on a retrospective basis. 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 for reporting periods beginning after December 15, 2018, due to the building lease amendment executed on October 31, 2016. The status of the implementation effort is in the preliminary stage. No significant implementation matters have been identified as needing to be addressed.

INVENTORIES

INVENTORIES	12 Months Ended
	Apr. 30, 2017
INVENTORIES
INVENTORIES	NOTE 2—INVENTORIES The following table summarizes the components of inventories, as of April 30 of each year: 2017 2016 Raw materials $ 1,305,000 $ 1,051,000 Work in process 826,000 400,000 Finished goods 608,000 252,000 $ 2,739,000 $ 1,703,000

FINANCING AGREEMENTS

FINANCING AGREEMENTS	12 Months Ended
	Apr. 30, 2017
FINANCING AGREEMENTS
FINANCING AGREEMENTS	NOTE 3—FINANCING AGREEMENTS On September 27, 2010, Torotel Products entered into a new financing agreement (the “agreement”) with Commerce Bank, N.A (the “Bank”). The 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 issued under the agreement are provided below: 2017 2016 4.05% mortgage note payable in monthly installments of $4,873, including interest, with final payment of $349,000 due January 27, 2019 $ 415,000 $ 456,000 4.00% line of credit with a maturity date of September 20, 2018 465,000 - 4.00% building line of credit with a maturity date of March 31, 2018 - - 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 28,000 53,000 3.75% note payable in monthly installments of $2,112, including interest, with final payment due April 10, 2018 25,000 49,000 4.05% note payable in monthly installments of $3,680, including interest, with final payment due January 10, 2020 115,000 - Total long-term debt 1,048,000 558,000 Less current installments 603,000 90,000 Long-term debt, excluding current installments $ 445,000 $ 468,000 The working capital revolving line of credit, which is available for working capital purposes, is renewable annually. The associated interest rate is equal to the greater of the floating Commerce Bank Prime Rate (currently 4.00%) 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 facility is cross collateralized and cross defaulted with all other facilities and is secured by a first lien on all business assets of Torotel Products. On February 21, 2014, Torotel Products refinanced its mortgage note under the agreement with the Bank. No cash proceeds were received as a result of the refinancing. Prepayment of the new note up to $100,000 per year is allowed without penalty so long as these funds are generated through internal cash flow and not borrowed from a separate financial institution. The new note is cross collateralized and cross defaulted with all other facilities of Torotel Products and is secured by a first real estate mortgage on the property located at 620 North Lindenwood Drive in Olathe, Kansas. 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 facility is cross collateralized and cross defaulted with all other facilities of Torotel Products 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. On March 31, 2017, we entered into a $500,000 building revolving line of credit, which is available for working capital purposes and is renewable annually. The associated interest rate is equal to the greater of the floating Commerce Bank Prime Rate (currently 4.00%) 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 facility is cross collateralized and cross defaulted with all other facilities and is secured by a first lien on the building located at 620 North Lindenwood Drive in Olathe, Kansas. Torotel Products is also required to comply with specified financial covenants and as of April 30, 2017, Torotel Products was in compliance with these covenants. The amount of long-term debt maturities by year is as follows: Year Ending April 30, Amount 2018 $ 603,000 2019 415,000 2020 30,000 $ 1,048,000 Irrevocable Standby Letter of Credit Under the terms of a lease amendment for its building located at 520 N. Rogers Road in Olathe, Kansas (see Note 5), 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 $ 75,000 $ 275,000 January 1, 2021 75,000 200,000 January 1, 2022 75,000 125,000 January 1, 2023 75,000 50,000 January 1, 2024 50,000 -

INCOME TAXES

INCOME TAXES	12 Months Ended
	Apr. 30, 2017
INCOME TAXES
INCOME TAXES	NOTE 4—INCOME TAXES The components of the provision (benefit) for income taxes are as follows: 2017 2016 Current tax expense (benefit) Federal $ 2,000 $ 9,000 State 1,000 75,000 3,000 84,000 Deferred tax expense (benefit) Federal (137,000) 254,000 State (18,000) (10,000) (155,000) 244,000 Total income tax provision $ (152,000) $ 328,000 The provision for income taxes reflected in the consolidated statements of operations differs from the amounts computed at the federal statutory tax rates. The principal differences between our statutory income tax expense and the effective provision for income taxes are summarized as follows: 2017 2016 Computed tax expense at statutory rates $ (144,000) $ 283,000 Permanent differences 6,000 8,000 State tax and credits (18,000) 37,000 Provision to Return Adjustment 4,000 (2,000) Increase in valuation allowance — 2,000 $ (152,000) $ 328,000 We have available as benefits to reduce future income taxes, subject to applicable limitations, estimated federal net operating loss carryforward amounts as described below. In addition, we have available to us federal and state tax credits that carry forward indefinitely. NOL Year of Expiration Carryforwards 2027 $ 82,000 2030 28,000 2032 298,000 2037 726,000 $ 1,134,000 The following table summarizes the components of the net deferred income tax asset: 2017 2016 Net operating loss carryforwards $ 420,000 $ 139,000 Inventory valuation reserve 101,000 147,000 Loss on equity and impairment in investee 437,000 437,000 Tax credit carryforward 68,000 68,000 Other 158,000 238,000 1,184,000 1,029,000 Less: valuation allowance (437,000) (437,000) $ 747,000 $ 592,000 We record deferred income tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. As of April 30, 2017, we do not anticipate the realization of a portion of our deferred income tax assets. The valuation allowance is specifically related to impairment on an investment that would result in a capital loss for tax purposes that we do not anticipate realizing due to the absence of offsetting capital gain income. We evaluate the appropriateness of our deferred income tax asset valuation allowance on a quarterly basis and continue to consider positive and negative trends in our industry that could affect our determination. We believe that our current valuation allowance is appropriate due to anticipated demand over the next few fiscal years related to continuing business in the aerospace and defense markets. We also believe that this demand should generate sufficient taxable earnings to enable us to realize our net deferred tax assets except as discussed above, thus outweighing any negative evidence concerning the cyclical and competitive nature of our industry. Also, we have achieved consistent taxable earnings in recent fiscal years, we have established a recent history of utilizing our net deferred tax asset, our available carryforward periods of our net operating losses are of sufficient length and are at minimum risk of expiring unused, and our products are included in applications that generally have a longer lifecycle. As of April 30, 2017, the federal tax returns for the fiscal years ended 2012 through 2016 are open to audit until the statute of limitations closes for the years in which the net operating losses are utilized. We recognize interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense. As of April 30, 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.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Apr. 30, 2017
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	NOTE 5—COMMITMENTS AND CONTINGENCIES As part of our ongoing operations, we enter into arrangements that obligate us to make future payments to various parties. Some of these contractual obligations are not reflected on the accompanying consolidated balance sheets due to the nature of the obligations. Such obligations include operating leases for production space and for equipment. On July 10, 2014, we entered into a real estate lease agreement in Hatfield, Pennsylvania to lease approximately 5,000 square feet for manufacturing electromechanical assemblies and other transformers. This agreement commenced on August 1, 2014 and continues through July 31, 2019. On October 31, 2016, Torotel entered into a Second Amendment (“Amendment”) to the lease for its Rogers Road facility located in Olathe, Kansas. The Amendment became effective as of April 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 operating leases are as follows: Years Ending April 30, 2018 $ 413,000 2019 413,000 2020 407,000 2021 402,000 2022 427,000 2023 442,000 2024 452,000 2025 456,000 2026 467,000 2027 350,000 Total $ 4,229,000 Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease including any periods free of rent. Total rent expense for all operating leases for the years ended April 30, 2017 and 2016 was $246,000 and $193,000, respectively. As of April 30, 2017, the property owned by Torotel at 620 N. Lindenwood in Olathe, Kansas had a net carrying value of approximately $688,000, and is listed on the market for immediate sale. The property is currently accounted for as a capital asset at historical cost less depreciation. Torotel is subject to legal proceedings and claims that arise in the normal course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position or results of operations of Torotel.

EMPLOYEE INCENTIVE PLANS

EMPLOYEE INCENTIVE PLANS	12 Months Ended
	Apr. 30, 2017
EMPLOYEE INCENTIVE PLANS
EMPLOYEE INCENTIVE PLANS	NOTE 6—EMPLOYEE INCENTIVE PLANS Short-term Cash Incentive Plan The Short-term Cash Incentive Plan ("STIP") became effective for fiscal year 2008. The purpose of the STIP is to promote the long-term financial performance of Torotel by providing key employees with the opportunity to earn cash awards for accomplishing annual goals for Return on Capital Employed ("ROCE") as defined in the STIP. For the years ended April 30, 2017 and 2016, total short-term cash incentive plan expense was $0 and $0, respectively. Long-term Incentive Plans The Long-term Incentive Plans ("LTIPs"), which consist of a Stock Award Plan and a Long-term Cash Incentive Plan, also became effective for fiscal year 2008. The purpose of the LTIPs is to provide incentives that will attract and retain highly competent persons as key employees to promote the long-term financial performance of Torotel by providing key employees an opportunity to earn stock and cash awards for accomplishing long-range goals for sales growth, earnings growth, ROCE and debt to equity, as defined and measured in each of the Stock Award Plan and the Long-term Cash Incentive Plan. Stock Award Plan The Stock Award Plan ("SAP"), which did not require shareholder approval, provides key employees the opportunity to acquire common stock of Torotel pursuant to awards earned for accomplishing goals that promote the long-term financial performance of Torotel. Under the terms of the SAP, stock awards are in the form of restricted stock having a 5-year restriction period, which shall lapse, based on certain conditions as outlined in the SAP. All stock awards are represented by a Restricted Stock Agreement, which 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. Long-term Cash Incentive Plan The Long-term Cash Incentive Plan ("LTCIP") provides key employees with the opportunity to earn cash awards for accomplishing plan goals based on predetermined targets for average annual sales and earnings growth, ROCE and debt to equity. Under the terms of the LTCIP, awards will not be paid if Torotel's performance on any LTCIP metric is less than the threshold level of performance defined for that LTCIP metric. For the years ended April 30, 2017 and 2016, total long-term cash incentive plan expense was $0 for both years. Performance Bonus We provided discretionary performance bonuses for employees not participating in the above incentive plans. Total expense for these bonuses was $0 and $176,000 for the years ended April 30, 2017 and 2016. 401(k) Retirement Plan We have a 401(k) Retirement Plan for Torotel Products' employees. Employer contributions to that plan are at the discretion of the Board of Directors. Employer contributions to the plan for the years ended April 30, 2017 and 2016 were $86,000 and $35,000, respectively.

RESTRICTED STOCK AGREEMENTS

RESTRICTED STOCK AGREEMENTS	12 Months Ended
	Apr. 30, 2017
RESTRICTED STOCK AGREEMENTS
RESTRICTED STOCK AGREEMENTS	NOTE 7—RESTRICTED STOCK AGREEMENTS Restricted Stock Agreements, and stock awards thereunder, are authorized by the Compensation and Nominating Committee ("Committee") and the Board of Directors of Torotel. 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 agreements further provide, subject to certain conditions, that if prior to all of the restricted shares having been released, we undergo a change in control, then all of the restricted shares shall be released and no longer subject to restrictions under the 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 SAP. 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 aggregate 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 (5) year restriction period, (1) Torotel's cumulative annual growth in earnings before interest and taxes ("EBIT") 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 (or a subsidiary thereof) 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 SAP 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 each Restricted Stock Agreement was 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 Agreements dated June 17, 2013 were reverted to treasury shares during the fiscal year 2017. 2016 Restricted Stock Grants On September 21, 2016, we entered into Restricted Stock Agreements (“2016 Agreements”) with three key employees for the grant of an aggregate total of 730,000 restricted shares of the Company’s common stock (the “Shares”). The Shares were granted, and the 2016 Agreements were entered into, pursuant to the Plan. The award of the Shares was authorized by both the Committee and the Board as a whole on September 19, 2016. Except for the number of shares granted to each recipient, the terms of each of the 2016 Agreements are identical. 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. Total stock compensation cost for the years ended April 30, 2017 and 2016 was an expense of $61,000 and a credit of $65,000, respectively. Restricted stock activity for each period through April 30, 2017 and 2016 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 1 350,000 $ 0.500 350,000 $ 0.500 Granted 730,000 0.740 — — Vested — — — — Forfeited (350,000) 0.500 — — Outstanding at April 30 730,000 $ 0.740 350,000 $ 0.500

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	12 Months Ended
	Apr. 30, 2017
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE 8—STOCKHOLDERS' EQUITY The changes in shares of common stock outstanding as of April 30 of each year are summarized as follows: 2017 2016 Balance, May 1 $ 5,615,750 $ 5,615,750 Shares released from treasury for restricted stock grants 717,795 — Newly issued shares for restricted stock grants 12,205 — Shares reverted to treasury for restricted stock forfeitures (350,000) — Balance, April 30 $ 5,995,750 $ 5,615,750

EARNINGS PER SHARE

EARNINGS PER SHARE	12 Months Ended
	Apr. 30, 2017
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE 9—EARNINGS PER SHARE 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: Year Ended 2017 2016 Net earnings (loss) $ (261,000) $ 504,000 Amounts allocated to participating securities (nonvested restricted shares) — (2,000) Net income attributable to common shareholders $ (261,000) $ 502,000 Basic weighted average common shares 5,123,000 5,266,000 Earnings per share attributable to common shareholders: Basic earnings per share $ (0.05) $ 0.10 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.

ACCRUED LIABILITIES

ACCRUED LIABILITIES	12 Months Ended
	Apr. 30, 2017
ACCRUED LIABILITIES
ACCRUED LIABILITIES	NOTE 10—ACCRUED LIABILITIES Accrued liabilities as of April 30 of each year consist of the following: 2017 2016 Employee related expenses: Accrued payroll $ 68,000 $ 236,000 Accrued payroll taxes 5,000 19,000 Accrued employee benefits 136,000 115,000 $ 209,000 $ 370,000 Other, including interest: Warranty reserve $ 24,000 $ 67,000 Property taxes 20,000 31,000 Other 66,000 — $ 110,000 $ 98,000 $ 319,000 $ 468,000 The changes in warranty reserve as of April 30 of each year are summarized as follows: 2017 2016 Balance, May 1 $ 67,000 $ 75,000 Credit memos issued (161,000) (165,000) Provision for warranty accrual 118,000 157,000 Balance, April 30 $ 24,000 $ 67,000

CUSTOMER DEPOSITS

CUSTOMER DEPOSITS	12 Months Ended
	Apr. 30, 2017
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS	NOTE 11—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 April 30, 2017 and April 30, 2016 we had approximately $33,000 and $29,000, respectively in customer deposits related to this arrangement.

SELF-INSURANCE CAPTIVE

SELF-INSURANCE CAPTIVE	12 Months Ended
	Apr. 30, 2017
SELF-INSURANCE CAPTIVE
SELF-INSURANCE CAPTIVE	NOTE 12—SELF-INSURANCE CAPTIVE We are a member of a limited liability company formed as an insurance association captive (the "captive") in order to provide partially self-insured health benefits to our employees that elect coverage under the plan. Our membership percentage in this captive is approximately 0.5% and represents an investment of $87,000. Therefore, our investment is accounted for utilizing the cost method of accounting. Our risk of loss is limited to our investment in the captive and we are not required to fund additional capital to the captive in the event of negative capital accounts. Our share of net income from the captive is based on our ratio of contribution to the captive. No income has been allocated in either fiscal year 2016 or 2017. We maintain a reserve for incurred but not reported medical claims and claim development. Our reserve is an estimate based on historical experience and other assumptions, some of which are subjective. We adjust our self-insured medical benefits reserve as we experience changes due to medical inflation, changes in the number of plan participants and changes to specific cases. Our total reserve for these claims for the fiscal years ended April 30, 2017 and 2016 was $28,000 and $32,000 respectively.

SEGMENT INFORMATION

SEGMENT INFORMATION	12 Months Ended
	Apr. 30, 2017
SEGMENT INFORMATION
SEGMENT INFORMATION	NOTE 13—SEGMENT INFORMATION Torotel reports the manufacturing, marketing, selling and distribution of precision magnetic components, consisting of transformers, inductors, reactors, chokes, toroidal coils, high voltage transformers, dry-type transformers, and electro-mechanical assemblies as one operating and one reportable segment. Torotel's chief operating decision maker is its Chief Executive Officer, who reviews financial information on a consolidated basis for purposes of making operating decisions and assessing financial performance. Torotel’s net sales by product line and geography for the periods presented were as follows: Years ended April 30 2017 2016 Torotel Products: Magnetic components $ 7,924,000 $ 8,339,000 Potted coil assembly 5,268,000 4,989,000 Electro-mechanical assemblies 3,098,000 2,716,000 Large Transformers 12,000 150,000 Total Torotel Products $ 16,302,000 $ 16,194,000 Years ended April 30, 2017 2016 Domestic $ 14,755,000 $ 15,022,000 Foreign 1,547,000 1,172,000 Total consolidated net sales $ 16,302,000 $ 16,194,000 Torotel Products currently has a primary base of approximately 18 customers that provide nearly 90% of its annual sales volume. Sales to two major customers as a percentage of consolidated net sales for the year ended April 30, 2017 was 34% and 23% respectively. Sales to two major customers as a percentage of consolidated net sales for the year ended April 30, 2016 was 35% and 28% respectively.

RELOCATION AND NEW FACILITY COS

RELOCATION AND NEW FACILITY COSTS	12 Months Ended
	Apr. 30, 2017
SEGMENT INFORMATION
RELOCATION AND NEW FACILITY COSTS	NOTE 14—RELOCATION AND NEW FACILITY COSTS Torotel incurred $609,000 in costs related to the move to the new facility over the last six months of fiscal 2017. $401,000 of the costs were capitalized as leasehold improvements and equipment related to the new space, including reconfiguration of support rooms, electrical, ventilation, and exhaust work. $208,000 of the costs were expensed as a period cost, including furniture, IT and office equipment below the company capitalization rate and payments to the moving company.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Apr. 30, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Torotel, Inc. and its wholly owned subsidiaries, Torotel Products, Torotel Manufacturing Corporation, and Electronika (through Electronika’s date of dissolution). All significant inter-company accounts and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these consolidated financial statements include those assumed in computing the valuation allowance of inventory, the allowance for doubtful accounts receivable, the valuation allowance on deferred income tax assets, and the reserve for warranty costs. Accordingly, actual results could differ from those estimates. Any changes in estimates are recorded in the period in which they become known.
Credit Risk	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 April 30, 2017 and 2016, cash balances exceeded federally insured limits. We have not experienced any losses in the cash accounts and we do not believe we are exposed to any significant credit risk with respect to our cash.
Fair Value of Financial Instruments	Fair Value of Financial Instruments We determine fair value by utilizing a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels as follows:  Level 1. Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.  Level 2. Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.  Level 3. Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in the assessment of fair value. The carrying amounts of certain financial instruments, including cash, trade receivables and trade accounts payable approximate fair value due to their short maturities. As of April 30, 2017 and 2016, the amount of our long-term debt approximates fair value based on the present value of estimated future cash flows using a discount rate commensurate with a borrowing rate available to us. The inputs used to estimate the fair value of long-term debt are considered Level 2 inputs.
Treasury Stock	Treasury Stock We utilize the weighted average cost method in accounting for treasury stock transactions.
Revenue Recognition	Revenue Recognition Revenue is recognized when a fixed price contract or purchase order exists; delivery has occurred; and collection is reasonably assured. Selling terms are generally FOB Shipping Point so we consider our products delivered once they have been shipped and title and risk of loss have been transferred.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts Gross trade accounts receivable are offset with an allowance for doubtful accounts. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We review the allowance for doubtful accounts on a regular basis, and all past due balances are reviewed individually for collectability. Account balances are charged against the allowance when placed for collection. Recoveries of receivables previously written off are recorded when received. The majority of the customer accounts are considered past due after the invoice becomes older than the customer's credit terms. Interest is not charged on past due accounts. The allowance for doubtful accounts as of April 30, 2017 and 2016 was $12,000 and $12,000, respectively.
Inventories	Inventories Inventories are stated at the lower of cost or market. Cost is determined using a FIFO approximated weighted average cost method of valuation. Our industry is characterized by short-term customer commitments and changes in demand, as well as other market considerations. Provisions for obsolete and excess inventory are based on reviews of inventory usage, quantities on hand and latest product demand information from customers. Inventories are reviewed in detail utilizing a 12-month time horizon. Individual part numbers that have not had any usage or purchases in a 12-month time period and do not have any known usage requirements are categorized as obsolete; individual part numbers having more than a 12-month supply based on the current year's usage are categorized as excess. Once specific inventory has been identified as excess or obsolete, the cost of the identified inventory is fully reserved and the cost of the inventory is not recovered until it is sold. The reserve balance is analyzed for adequacy as part of the inventory review each quarter. The reserve for inventory as of April 30, 2017 and 2016 was $261,000 and $379,000, respectively.
Property, Plant and Equipment	Property, Plant and Equipment Property, plant and equipment are carried at cost. Depreciation and amortization are provided in amounts sufficient to relate the costs of depreciable assets to operations primarily using the straight-line method over estimated useful lives of three to five years for equipment and three and a half to twenty years for buildings and improvements.
Cash and Cash Equivalents	Cash For purposes of the consolidated statements of cash flows, we consider all short-term investments and demand deposits purchased with original maturity dates of three months or less to be cash.
Income Taxes	Income Taxes Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. An estimated effective tax rate for a year is applied to our quarterly operating results. In the event there is a significant or unusual item recognized in our quarterly operating results, the tax attributable to that item is separately calculated and recorded at the same time as that item. Tax law requires items to be included in our tax returns at different times than the items are reflected in our financial statements. As a result, our annual tax rate reflected in our financial statements is different than that reported in our tax returns (our cash tax rate). Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years for which we have already recorded the tax benefit in our statement of operations. We establish valuation allowances for our deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax liabilities generally represent tax expense recognized in our financial statements for which payment has been deferred, or expense for which we have already taken a deduction in our tax return but have not yet recognized as expense in our financial statements. The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. If necessary, we record a liability for the difference between the benefit recognized and measured for financial statement purposes and the tax position taken or expected to be taken on our tax return. To the extent that our assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. If applicable in a given year, tax-related interest and penalties are classified as a component of income tax expense.
Advertising Costs	Advertising Costs Advertising costs are expensed as incurred. For the years ended April 30, 2017 and 2016 advertising costs were $6,000 and $1,000, respectively.
Warranty Costs	Warranty Costs We maintain a reserve for estimated warranty costs associated with products returned from customers. A limited warranty is provided for a period of one year which requires us to repair or replace defective products at no cost to the customer. The warranty reserve is based on historical experience and reflects management's best estimate of probable liability under the product warranties
Share-Based Compensation	Share-Based Compensation We have a share-based compensation plan that includes restricted stock, which is described more fully in Note 7 of the Notes to the Consolidated Financial Statements. We account for the share-based compensation plan in accordance with authoritative guidance under which the estimated fair value of share-based awards granted under our share-based compensation plan is recognized as compensation expense over the vesting period of the award.
New Accounting Guidance	New Accounting Guidance 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 reporting periods beginning after December 15, 2017 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 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. The status of the implementation effort is in the preliminary stage. No significant implementation matters have been identified as needing to be addressed. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. The standard is effective for reporting periods beginning December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. Torotel early adopted the standard during the third quarter of fiscal year 2016 on a retrospective basis. 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 for reporting periods beginning after December 15, 2018, due to the building lease amendment executed on October 31, 2016. The status of the implementation effort is in the preliminary stage. No significant implementation matters have been identified as needing to be addressed.

INVENTORIES (Tables)

INVENTORIES (Tables)	12 Months Ended
	Apr. 30, 2017
INVENTORIES
Table summarizing the components of inventories	2017 2016 Raw materials $ 1,305,000 $ 1,051,000 Work in process 826,000 400,000 Finished goods 608,000 252,000 $ 2,739,000 $ 1,703,000

FINANCING AGREEMENTS (Tables)

FINANCING AGREEMENTS (Tables)	12 Months Ended
	Apr. 30, 2017
FINANCING AGREEMENTS
Summary of the notes within the financing agreement	2017 2016 4.05% mortgage note payable in monthly installments of $4,873, including interest, with final payment of $349,000 due January 27, 2019 $ 415,000 $ 456,000 4.00% line of credit with a maturity date of September 20, 2018 465,000 - 4.00% building line of credit with a maturity date of March 31, 2018 - - 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 28,000 53,000 3.75% note payable in monthly installments of $2,112, including interest, with final payment due April 10, 2018 25,000 49,000 4.05% note payable in monthly installments of $3,680, including interest, with final payment due January 10, 2020 115,000 - Total long-term debt 1,048,000 558,000 Less current installments 603,000 90,000 Long-term debt, excluding current installments $ 445,000 $ 468,000
Long-term debt maturities by year	Year Ending April 30, Amount 2018 $ 603,000 2019 415,000 2020 30,000 $ 1,048,000
Schedule of letter of credit outstanding balance	Date of Reduction Amount of Reduction Balance of Letter of Credit January 1, 2020 $ 75,000 $ 275,000 January 1, 2021 75,000 200,000 January 1, 2022 75,000 125,000 January 1, 2023 75,000 50,000 January 1, 2024 50,000 -

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Apr. 30, 2017
INCOME TAXES
Components of the provision (benefit) for income taxes	2017 2016 Current tax expense (benefit) Federal $ 2,000 $ 9,000 State 1,000 75,000 3,000 84,000 Deferred tax expense (benefit) Federal (137,000) 254,000 State (18,000) (10,000) (155,000) 244,000 Total income tax provision $ (152,000) $ 328,000
Summary of the principal differences between statutory income tax expense and effective provision for income taxes	2017 2016 Computed tax expense at statutory rates $ (144,000) $ 283,000 Permanent differences 6,000 8,000 State tax and credits (18,000) 37,000 Provision to Return Adjustment 4,000 (2,000) Increase in valuation allowance — 2,000 $ (152,000) $ 328,000
Summary of net operating loss carryforwards	NOL Year of Expiration Carryforwards 2027 $ 82,000 2030 28,000 2032 298,000 2037 726,000 $ 1,134,000
Summary of the components of the net deferred income tax asset	2017 2016 Net operating loss carryforwards $ 420,000 $ 139,000 Inventory valuation reserve 101,000 147,000 Loss on equity and impairment in investee 437,000 437,000 Tax credit carryforward 68,000 68,000 Other 158,000 238,000 1,184,000 1,029,000 Less: valuation allowance (437,000) (437,000) $ 747,000 $ 592,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Apr. 30, 2017
COMMITMENTS AND CONTINGENCIES.
Future minimum lease payments under non-cancellable operating leases	Future minimum lease payments on operating leases are as follows: Years Ending April 30, 2018 $ 413,000 2019 413,000 2020 407,000 2021 402,000 2022 427,000 2023 442,000 2024 452,000 2025 456,000 2026 467,000 2027 350,000 Total $ 4,229,000

RESTRICTED STOCK AGREEMENTS (Ta

RESTRICTED STOCK AGREEMENTS (Tables)	12 Months Ended
	Apr. 30, 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 1 350,000 $ 0.500 350,000 $ 0.500 Granted 730,000 0.740 — — Vested — — — — Forfeited (350,000) 0.500 — — Outstanding at April 30 730,000 $ 0.740 350,000 $ 0.500

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	12 Months Ended
	Apr. 30, 2017
STOCKHOLDERS' EQUITY
Summary of changes in shares of common stock outstanding	2017 2016 Balance, May 1 $ 5,615,750 $ 5,615,750 Shares released from treasury for restricted stock grants 717,795 — Newly issued shares for restricted stock grants 12,205 — Shares reverted to treasury for restricted stock forfeitures (350,000) — Balance, April 30 $ 5,995,750 $ 5,615,750

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	12 Months Ended
	Apr. 30, 2017
EARNINGS PER SHARE
Computation of earnings per common share	Year Ended 2017 2016 Net earnings (loss) $ (261,000) $ 504,000 Amounts allocated to participating securities (nonvested restricted shares) — (2,000) Net income attributable to common shareholders $ (261,000) $ 502,000 Basic weighted average common shares 5,123,000 5,266,000 Earnings per share attributable to common shareholders: Basic earnings per share $ (0.05) $ 0.10

ACCRUED LIABILITIES (Tables)

ACCRUED LIABILITIES (Tables)	12 Months Ended
	Apr. 30, 2017
ACCRUED LIABILITIES
Accrued liabilities as of year end	2017 2016 Employee related expenses: Accrued payroll $ 68,000 $ 236,000 Accrued payroll taxes 5,000 19,000 Accrued employee benefits 136,000 115,000 $ 209,000 $ 370,000 Other, including interest: Warranty reserve $ 24,000 $ 67,000 Property taxes 20,000 31,000 Other 66,000 — $ 110,000 $ 98,000 $ 319,000 $ 468,000
Schedule of changes in warranty reserve	2017 2016 Balance, May 1 $ 67,000 $ 75,000 Credit memos issued (161,000) (165,000) Provision for warranty accrual 118,000 157,000 Balance, April 30 $ 24,000 $ 67,000

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	12 Months Ended
	Apr. 30, 2017
SEGMENT INFORMATION
Schedule of net sales by product line	Years ended April 30 2017 2016 Torotel Products: Magnetic components $ 7,924,000 $ 8,339,000 Potted coil assembly 5,268,000 4,989,000 Electro-mechanical assemblies 3,098,000 2,716,000 Large Transformers 12,000 150,000 Total Torotel Products $ 16,302,000 $ 16,194,000
Schedule of net sales by geography	Years ended April 30, 2017 2016 Domestic $ 14,755,000 $ 15,022,000 Foreign 1,547,000 1,172,000 Total consolidated net sales $ 16,302,000 $ 16,194,000

SUMMARY OF SIGNIFICANT ACCOUN31

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
Significant accounting policies and useful lives
Allowance for doubtful accounts	$ 12,000	$ 12,000
Inventory time horizon for excess and obsolete review	12 months
Individual parts time horizon to review for obsolete inventory	12 months
Individual parts time horizon to review for excess inventory	12 months
Inventory Reserves	$ 261,000	379,000
Advertising costs	$ 6,000	1,000
Provided limited warranty period	1 year
Noncurrent deferred income tax asset	$ 747,000	$ 592,000
Equipment | Minimum
Significant accounting policies and useful lives
Estimated useful lives	3 years
Equipment | Maximum
Significant accounting policies and useful lives
Estimated useful lives	5 years
Buildings and improvements | Minimum
Significant accounting policies and useful lives
Estimated useful lives	3 years 6 months
Buildings and improvements | Maximum
Significant accounting policies and useful lives
Estimated useful lives	20 years

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Apr. 30, 2017	Apr. 30, 2016
INVENTORIES
Raw materials	$ 1,305,000	$ 1,051,000
Work in process	826,000	400,000
Finished goods	608,000	252,000
Inventories	$ 2,739,000	$ 1,703,000

FINANCING AGREEMENTS (Details)

FINANCING AGREEMENTS (Details) - USD ($)	Feb. 21, 2014	Apr. 30, 2017	Apr. 30, 2016
Long-term indebtedness
Total long-term debt		$ 1,048,000	$ 558,000
Less current installments		603,000	90,000
Long-term debt, excluding current installments		445,000	468,000
Mortgage note payable
Long-term indebtedness
Proceeds Received	$ 0
Annual prepayment limit	$ 100,000
Line of Credit
Long-term indebtedness
Maximum borrowing		500,000
Note payable 4.05 percent | Mortgage note payable
Long-term indebtedness
Total long-term debt		$ 415,000	$ 456,000
Rate		4.05%	4.05%
Monthly installments		$ 4,873	$ 4,873
Final payment		349,000	349,000
Line of credit 4.0 percent | Line of Credit
Long-term indebtedness
Total long-term debt		$ 465,000
Rate		4.00%
Note payable 4.00 percent | Line of Credit
Long-term indebtedness
Rate		4.00%
Note payable 4.75 percent | Note Payable
Long-term indebtedness
Total long-term debt		$ 28,000	$ 53,000
Rate		4.75%	4.75%
Monthly installments		$ 2,269	$ 2,269
Note payable 3.75 percent | Note Payable
Long-term indebtedness
Total long-term debt		$ 25,000	$ 49,000
Rate		3.75%	3.75%
Monthly installments		$ 2,112	$ 2,112
Note payable 4.05 percent | Note Payable
Long-term indebtedness
Total long-term debt		$ 115,000
Rate		4.05%
Monthly installments		$ 3,680
Equipment Line Of Credit | Line of Credit
Long-term indebtedness
Maximum borrowing		$ 500,000
Working line of credit 4.00 percent | Line of Credit | Minimum
Long-term indebtedness
Rate		4.00%
Working line of credit 4.00 percent | Line of Credit | Prime Rate
Long-term indebtedness
Rate		4.00%
Building line of credit 4.00 percent | Line of Credit
Long-term indebtedness
Maximum borrowing		$ 500,000
Building line of credit 4.00 percent | Line of Credit | Minimum
Long-term indebtedness
Rate		4.00%
Building line of credit 4.00 percent | Line of Credit | Prime Rate
Long-term indebtedness
Rate		4.00%

FINANCING AGREEMENTS (MATURITIE

FINANCING AGREEMENTS (MATURITIES OF LONG-TERM DEBT (Details) - USD ($)	Apr. 30, 2017	Apr. 30, 2016
Long-term debt maturities by year
2,018	$ 603,000
2,019	415,000
2,020	30,000
Total long-term debt	$ 1,048,000	$ 558,000

FINANCING AGREEMENTS (IRREVOCAB

FINANCING AGREEMENTS (IRREVOCABLE STANDBY LETTER OF CREDIT (Details) - Irrevocable Standby Letter of Credit - USD ($)	Jan. 01, 2024	Jan. 01, 2023	Jan. 01, 2022	Jan. 01, 2021	Jan. 01, 2020	Apr. 30, 2017
Long-term indebtedness
Principal amount						$ 350,000
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

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
Current tax expense (benefit)
Federal	$ 2,000	$ 9,000
State	1,000	75,000
Current tax expense (benefit)	3,000	84,000
Deferred tax expense (benefit)
Federal	(137,000)	254,000
State	(18,000)	(10,000)
Deferred tax expense	(155,000)	244,000
Total income tax provision	$ (152,000)	$ 328,000

INCOME TAXES (STATUTORY RATE RE

INCOME TAXES (STATUTORY RATE RECONCILIATION) (Details) - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
Income Tax Reconciliation
Computed tax expense at statutory rates	$ (144,000)	$ 283,000
Permanent differences	6,000	8,000
State tax and credits	(18,000)	37,000
Provision to Return Adjustment	4,000	(2,000)
Increase in valuation allowance		2,000
Total income tax provision	$ (152,000)	$ 328,000

INCOME TAXES (NET OPERATING LOS

INCOME TAXES (NET OPERATING LOSS CARRYFORWARDS) (Details) - Federal	12 Months Ended
	Apr. 30, 2017USD ($)
Estimated federal net operating
NOL Carryforwards	$ 1,134,000
Tax Year 2027
Estimated federal net operating
Year of Expiration	Apr. 30, 2027
NOL Carryforwards	$ 82,000
Tax Year 2030
Estimated federal net operating
Year of Expiration	Apr. 30, 2030
NOL Carryforwards	$ 28,000
Tax Year 2032
Estimated federal net operating
Year of Expiration	Apr. 30, 2032
NOL Carryforwards	$ 298,000
Tax Year 2037
Estimated federal net operating
Year of Expiration	Apr. 30, 2037
NOL Carryforwards	$ 726,000

INCOME TAXES (COMPONENTS OF DEF

INCOME TAXES (COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES) (Details) - USD ($)	Apr. 30, 2017	Apr. 30, 2016
INCOME TAXES
Net operating loss carryforwards	$ 420,000	$ 139,000
Inventory valuation reserve	101,000	147,000
Loss on equity and impairment in investee	437,000	437,000
Tax credit carryforward	68,000	68,000
Other	158,000	238,000
Gross deferred income tax asset	1,184,000	1,029,000
Less: valuation allowance	(437,000)	(437,000)
Net deferred income tax assets	747,000	$ 592,000
Income Tax Uncertainties
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

COMMITMENTS AND CONTINGENCIES40

COMMITMENTS AND CONTINGENCIES (Details)	Jan. 01, 2017USD ($)ft²	Oct. 31, 2016USD ($)ft²Option	Jul. 10, 2014ft²	Apr. 30, 2017USD ($)	Apr. 30, 2016USD ($)
Commitments and contingencies
Real estate lease agreement (in square feet) | ft²	72,388	14,137
Number Options To Extend Lease | Option		2
Monthly base rate in first two years of extended lease		$ 26,844
Property held for sale				$ 688,000
Security deposit	$ 55,000	$ 12,750
Future minimum lease payments under non-cancellable operating leases
2,018				413,000
2,019				413,000
2,020				407,000
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				4,229,000
Bergey Road Associates
Commitments and contingencies
Real estate lease agreement (in square feet) | ft²			5,000
Operating Leases
Commitments and contingencies
Operating Leases, Rent Expense, Net				$ 246,000	$ 193,000

EMPLOYEE INCENTIVE PLANS (Detai

EMPLOYEE INCENTIVE PLANS (Details) - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
Performance Bonus
Employee incentive plans
Discretionary bonus expense	$ 0	$ 176,000
Short Term Cash Incentive Plan
Employee incentive plans
Incentive plan expense	$ 0	0
Stock Award Plan | Restricted Stock
Employee incentive plans
Restriction period of awards	5 years
Long Term Cash Incentive Plan
Employee incentive plans
Incentive plan expense	$ 0	0
401(k) Retirement Plan
Employee incentive plans
Employer contributions	$ 86,000	$ 35,000

RESTRICTED STOCK AGREEMENTS (De

RESTRICTED STOCK AGREEMENTS (Details)	Sep. 21, 2015employeeshares	Jun. 17, 2013USD ($)employee$ / sharesshares	Jan. 31, 2016USD ($)	Apr. 30, 2017USD ($)$ / sharesshares	Apr. 30, 2016USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award
Stock compensation cost amortized | $				$ 61,000
Stock compensation cost amortized | $					$ (65,000)
Restricted Shares Under Option
Outstanding at beginning of period				350,000	350,000
Granted				730,000
Forfeited				(350,000)
Outstanding at end of period				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				0.500
Outstanding at end of period, Weighted Average Grant Price (in dollars per share) | $ / shares				$ 0.740	$ 0.500
2013 Restricted Stock Grants | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award
Restriction period of awards				5 years
Restricted Stock Forfeiture Recovery | $			$ 88,000
2013 Restricted Stock Grants | Restricted Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Cumulative annual growth in EBIT (as a percentage) | $				$ 10
Average return on capital employed (as a percentage)				25.00%
2013 Restricted Stock Grants | Restricted Stock | Three Key Employees
Share-based Compensation Arrangement by Share-based Payment Award
Number of key employees receiving award under plan | employee		3
Aggregate amount of restricted stock awards authorized		400,000
Share Price | $ / shares		$ 0.50
Fair value on grant date | $		$ 200,000
2016 Restricted Stock Grants | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award
Restriction period of awards	5 years
2016 Restricted Stock Grants | Restricted Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Cumulative annual growth in revenue (as a percentage)	10.00%
Average economic value added as percentage of revenue (as a percentage)	2.00%
2016 Restricted Stock Grants | Restricted Stock | Three Key Employees
Share-based Compensation Arrangement by Share-based Payment Award
Number of key employees receiving award under plan | employee	3
Aggregate amount of restricted stock awards authorized	730,000
Stock Award Plan | Restricted Stock
Restricted Shares Under Option
Outstanding at end of period		350,000

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	12 Months Ended
	Apr. 30, 2017shares
Increase (Decrease) in Stockholders' Equity
Balance beginning of year (in shares)	5,615,750
Shares released from treasury for restricted stock grants	717,795
Newly issued shares for restricted stock grants	12,205
Shares reverted to treasury for restricted stock forfeitures	(350,000)
Balance end of year (in shares)	5,995,750

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
EARNINGS PER SHARE
Net earnings (loss)	$ (261,000)	$ 504,000
Amounts allocated to participating securities (nonvested restricted shares)		(2,000)
Net income attributable to common shareholders	$ (261,000)	$ 502,000
Basic weighted average common shares	5,123,000	5,266,000
Earnings per share attributable to common shareholders:
Basic earnings (loss) per share	$ (0.05)	$ 0.10

ACCRUED LIABILITIES (Details)

ACCRUED LIABILITIES (Details) - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
Employee related expenses:
Accrued payroll	$ 68,000	$ 236,000
Accrued payroll taxes	5,000	19,000
Accrued employee benefits	136,000	115,000
Total employee related expenses	209,000	370,000
Other, including interest:
Warranty reserve	24,000	67,000
Property taxes	20,000	31,000
Other	66,000
Total other	110,000	98,000
Total accrued liabilities	319,000	468,000
Changes in warranty reserve
Balance, May 1	67,000	75,000
Credit memos issued	(161,000)	(165,000)
Provision for warranty accrual	118,000	157,000
Balance, April 30	$ 24,000	$ 67,000

CUSTOMER DEPOSITS (Details)

CUSTOMER DEPOSITS (Details) - USD ($)	Apr. 30, 2017	Apr. 30, 2016
CUSTOMER DEPOSITS
Customer Advances, Current	$ 33,000	$ 29,000

SELF-INSURANCE CAPTIVE (Details

SELF-INSURANCE CAPTIVE (Details) - Captive Insurance LLC - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016
Self-insurance captive
Membership percentage	0.50%
Investment	$ 87,000
Investment income	0	$ 0
Self-insured medical benefits reserve	$ 28,000	$ 32,000

SEGMENT INFORMATION (PRODUCT) (

SEGMENT INFORMATION (PRODUCT) (Details)	12 Months Ended
	Apr. 30, 2017USD ($)segment	Apr. 30, 2016USD ($)
Revenue from External Customer
Net sales	$ 16,302,000	$ 16,194,000
Segment Information
Number of operating segments | segment	1
Number of reportable segments | segment	1
Magnetic components
Revenue from External Customer
Net sales	$ 7,924,000	8,339,000
Potted coil assembly
Revenue from External Customer
Net sales	5,268,000	4,989,000
Electro-mechanical assemblies
Revenue from External Customer
Net sales	3,098,000	2,716,000
Large Transformers
Revenue from External Customer
Net sales	12,000	150,000
Total Torotel products
Revenue from External Customer
Net sales	$ 16,302,000	$ 16,194,000

SEGMENT INFORMATION (GEOGRAPHY)

SEGMENT INFORMATION (GEOGRAPHY) (Details)	12 Months Ended
	Apr. 30, 2017USD ($)customer	Apr. 30, 2016USD ($)customer
Revenue from External Customer
Net sales	$ 16,302,000	$ 16,194,000
Number of customers for given percentage annual sales volume | customer	18
Annual sales volume percentage	90.00%
Number of major customers for given percentage consolidated net sales | customer	2	2
Major Customer One
Revenue from External Customer
Consolidated net sales percentage	34.00%	35.00%
Major Customer Two
Revenue from External Customer
Consolidated net sales percentage	23.00%	28.00%
Domestic
Revenue from External Customer
Net sales	$ 14,755,000	$ 15,022,000
Foreign
Revenue from External Customer
Net sales	$ 1,547,000	$ 1,172,000

RELOCATION AND NEW FACILITY C50

RELOCATION AND NEW FACILITY COSTS (Details)	6 Months Ended
	Apr. 30, 2017USD ($)
SEGMENT INFORMATION
Cost incurred to relocation of business	$ 609,000
Costs incurred for movement of furniture, IT and office equipment	208,000
Capitalized costs for movement of Leasehold improvements and equipment	$ 401,000