Document And Entity Information
v3.3.0.814
Document And Entity Information - shares
6 Months Ended
Jun. 30, 2016
Aug. 01, 2016
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2016  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2016  
Entity Registrant Name COMMUNICATIONS SYSTEMS INC  
Entity Central Index Key 0000022701  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   8,861,856

Condensed Consolidated Balance Sheets
v3.3.0.814
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2016
Dec. 31, 2015
CURRENT ASSETS:    
Cash and cash equivalents $ 8,254,456 $ 9,812,737
Investments 8,605,825 5,228,668
Trade accounts receivable, less allowance for doubtful accounts of $80,000 and $123,000, respectively 17,195,626 17,849,207
Inventories 26,776,642 24,985,560
Prepaid income taxes 2,997,161 2,972,271
Other current assets 1,764,435 1,041,303
TOTAL CURRENT ASSETS 65,594,145 61,889,746
PROPERTY, PLANT AND EQUIPMENT, net 16,615,954 17,468,420
OTHER ASSETS:    
Investments 1,449,790 6,293,505
Goodwill 1,462,503 1,462,503
Other assets 823,992 802,056
TOTAL OTHER ASSETS 3,736,285 8,558,064
TOTAL ASSETS 85,946,384 87,916,230
CURRENT LIABILITIES:    
Current portion of long-term debt   103,603
Line of credit borrowings 3,100,000  
Accounts payable 9,942,953 8,373,292
Accrued compensation and benefits 3,693,954 3,050,822
Accrued consideration 122,005 442,234
Other accrued liabilities 2,089,874 1,996,609
Dividends payable 1,503,034 1,474,892
TOTAL CURRENT LIABILITIES 20,451,820 15,441,452
LONG TERM LIABILITIES:    
Long-term compensation plans 69,719  
Uncertain tax positions 113,566 102,633
Deferred income taxes 40,926 61,453
Pension liabilities   126,001
TOTAL LONG-TERM LIABILITIES $ 224,211 $ 290,087
COMMITMENTS AND CONTINGENCIES (Footnote 8)
STOCKHOLDERS' EQUITY    
Preferred stock, par value $1.00 per share; 3,000,000 shares authorized; none issued
Common stock, par value $.05 per share; 30,000,000 shares authorized; 8,849,236 and 8,754,550 shares issued and outstanding, respectively $ 442,462 $ 437,727
Additional paid-in capital 41,058,680 40,129,285
Retained earnings 24,392,000 32,284,061
Accumulated other comprehensive loss (622,789) (666,382)
TOTAL STOCKHOLDERS' EQUITY 65,270,353 72,184,691
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 85,946,384 $ 87,916,230

Condensed Consolidated Balance Sheets (Parenthetical)
v3.3.0.814
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2016
Dec. 31, 2015
Condensed Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 80 $ 123
Preferred stock, par value $ 1.00 $ 1.00
Preferred stock, shares authorized 3,000,000 3,000,000
Preferred stock, shares issued 0 0
Common stock, par value $ 0.05 $ 0.05
Common stock, shares authorized 30,000,000 30,000,000
Common stock, shares issued 8,849,236 8,754,550
Common stock, shares outstanding 8,849,236 8,754,550

Condensed Consolidated Statements Of Loss And Comprehensive Loss
v3.3.0.814
Condensed Consolidated Statements Of Loss And Comprehensive Loss - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Condensed Consolidated Statements Of Loss And Comprehensive Loss [Abstract]        
Sales $ 26,311,442 $ 28,197,661 $ 50,977,886 $ 47,742,597
Costs and expenses:        
Cost of sales 18,935,699 19,658,792 36,833,125 34,316,789
Selling, general and administrative expenses 10,047,201 10,256,538 19,684,262 20,834,714
Pension liability adjustment gains     (4,147,836)  
Total costs and expenses 28,982,900 29,915,330 52,369,551 55,151,503
Operating loss (2,671,458) (1,717,669) (1,391,665) (7,408,906)
Other income (expenses):        
Investment and other income 72,484 3,897 100,136 66,857
Gain on sale of assets   88 808,322 4,373
Interest and other expense (41,074) (61,044) (50,146) (74,262)
Foreign currency translation loss     (4,238,497)  
Other income (expense), net 31,410 (57,059) (3,380,185) (3,032)
Loss from operations before income taxes (2,640,048) (1,774,728) (4,771,850) (7,411,938)
Income tax (benefit) expense (95,550) (746,562) 239,316 (2,220,294)
Net loss (2,544,498) (1,028,166) (5,011,166) (5,191,644)
Other comprehensive (loss) income, net of tax:        
Additional minimum pension liability adjustments   (14,152) (4,147,836) (26,798)
Unrealized gain on available-for-sale securities 1,300 (5,193) 38,304 49,926
Foreign currency translation adjustment (171,841) 104,109 4,153,125 (26,208)
Total other comprehensive (loss) income (170,541) 84,764 43,593 (3,080)
Comprehensive loss $ (2,715,039) $ (943,402) $ (4,967,573) $ (5,194,724)
Basic net loss per share: $ (0.29) $ (0.12) $ (0.56) $ (0.60)
Diluted net loss per share: $ (0.29) $ (0.12) $ (0.56) $ (0.60)
Weighted Average Basic Shares Outstanding 8,849,236 8,707,564 8,899,056 8,684,321
Weighted Average Dilutive Shares Outstanding 8,849,236 8,707,564 8,899,056 8,684,321
Dividends declared per share $ 0.16 $ 0.16 $ 0.32 $ 0.32

Condensed Consolidated Statement Of Changes In Stockholders' Equity
v3.3.0.814
Condensed Consolidated Statement Of Changes In Stockholders' Equity - 6 months ended Jun. 30, 2016 - USD ($)
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Loss [Member]
Total
BALANCE at Dec. 31, 2015 $ 437,727 $ 40,129,285 $ 32,284,061 $ (666,382) $ 72,184,691
BALANCE, Shares at Dec. 31, 2015 8,754,550        
Net loss     (5,011,166)   (5,011,166)
Issuance of common stock under Employee Stock Purchase Plan $ 527 79,644     80,171
Issuance of common stock under Employee Stock Purchase Plan, Shares 10,539        
Issuance of common stock to Employee Stock Ownership Plan $ 3,014 465,346     468,360
Issuance of common stock to Employee Stock Ownership Plan, Shares 60,278        
Issuance of common stock under Executive Stock Plan $ 1,367 0     1,367
Issuance of common stock under Executive Stock Plan, Shares 27,332        
Tax benefit from stock based payments   (49,543)     (49,543)
Share-based compensation   449,997     449,997
Purchase of common stock $ (173) (16,049) (7,948)   (24,170)
Purchase of common stock, Shares (3,463)        
Shareholder dividends     (2,872,947)   (2,872,947)
Other comprehensive income       43,593 43,593
BALANCE at Jun. 30, 2016 $ 442,462 $ 41,058,680 $ 24,392,000 $ (622,789) $ 65,270,353
BALANCE, Shares at Jun. 30, 2016 8,849,236        

Condensed Consolidated Statements Of Cash Flows
v3.3.0.814
Condensed Consolidated Statements Of Cash Flows - USD ($)
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (5,011,166) $ (5,191,644)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 1,833,848 1,633,260
Share based compensation 449,997 499,475
Deferred taxes (20,528) 22,772
Change in fair value of acquisition-related contingent consideration (20,229)  
Gain on sale of assets (808,322) (4,373)
Excess tax benefits from share-based payments 49,543 (85,399)
Changes in assets and liabilities:    
Trade receivables 631,205 (3,475,720)
Inventories (1,843,034) 1,797,692
Prepaid income taxes (24,889) (2,495,449)
Other assets (821,584) (130,430)
Accounts payable 1,763,436 1,304,217
Accrued compensation and benefits 1,185,587 273,601
Other accrued liabilities 120,537 (297,840)
Income taxes payable (38,610) 86,492
Other 52,402 (58,224)
Net cash used in operating activities (2,501,807) (6,121,570)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Capital expenditures (1,271,190) (1,654,960)
Acquisition of business, net of cash aquired   (917,363)
Proceeds from the sale of fixed assets 969,114 22,941
Proceeds from the sale of investments 1,504,862 2,731,718
Net cash provided by investing activities 1,202,786 182,336
CASH FLOWS FROM FINANCING ACTIVITIES:    
Borrowings on line of credit 3,100,000 3,100,000
Cash dividends paid (2,844,805) (2,819,784)
Mortgage principal payments (103,603) (257,648)
Proceeds from issuance of common stock, net of shares withheld 57,368 46,066
Excess tax benefit from share-based payments (49,543) 85,399
Payment of deferred consideration related to acquisition (300,000)  
Net cash (used in) provided by financing activities (140,583) 154,033
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH (118,677) 20,751
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,558,281) (5,764,450)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,812,737 13,736,857
CASH AND CASH EQUIVALENTS AT END OF PERIOD 8,254,456 7,972,407
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Income taxes paid 274,918 52,979
Interest paid 23,327 28,931
Dividends declared not paid 1,503,034 1,455,216
Capital expenditures in accounts payable 26,418 6,000
Acquisition costs in accrued consideration $ 122,005 $ 462,870

Summary Of Significant Accounting Policies
v3.3.0.814
Summary Of Significant Accounting Policies
6 Months Ended
Jun. 30, 2016
Summary Of Significant Accounting Policies [Abstract]  
Summary Of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Description of Business



Communications Systems, Inc. (herein collectively called “CSI” or the “Company”) is a Minnesota corporation organized in 1969 that operates primarily as a holding company conducting its business through four business units having operations in the United States, Costa Rica, and the United Kingdom. Through its Suttle business unit, the Company manufactures and sells copper and fiber connectivity systems, enclosure systems, and active technologies for voice, data and video communications. Through its Transition Networks business unit, the Company manufactures and sells media converters, network interface devices, network interface cards, Ethernet switches and other connectivity products that offer the ability to affordably integrate the benefits of fiber optics into any data network. Through its JDL Technologies business unit, the Company provides technology solutions including virtualization, managed services, wired and wireless network design and implementation, HIPAA-compliant IT services, and converged infrastructure configuration and deployment. Through its Net2Edge business unit, the Company provides business-critical systems for customers worldwide with a sharp focus on the telecommunications carrier and enables carriers to connect legacy networks to high-speed services.



Financial Statement Presentation



The condensed consolidated balance sheets and condensed consolidated statement of changes in stockholders’ equity as of June 30, 2016 and the related condensed consolidated statements of loss and comprehensive loss, and the condensed consolidated statements of cash flows for the periods ended June 30, 2016 and 2015 have been prepared by Company management.  In the opinion of management, all adjustments (which include only normal recurring adjustments, except where noted) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2016 and 2015 and for the periods then ended have been made.



Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted.  We recommend these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2015 Annual Report to Shareholders on Form 10-K.  The results of operations for the period ended June 30, 2016 are not necessarily indicative of operating results for the entire year.



The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses during the reporting period.  The estimates and assumptions used in the accompanying condensed consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the time of the financial statements.  Actual results could differ from those estimates.



Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, appropriately represent, in all material respects, the current status of accounting policies, and are incorporated herein by reference.



Accumulated Other Comprehensive Loss



The components of accumulated other comprehensive loss, net of tax, are as follows:







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Foreign Currency Translation

 

Unrealized (loss)/gain on securities

 

Pension liability adjustment

 

Accumulated Other Comprehensive Loss

December 31, 2015

 

$

(4,801,000)

 

$

(13,000)

 

$

4,148,000 

 

$

(666,000)



 

 

 

 

 

 

 

 

 

 

 

 

Net current period change

 

 

(85,000)

 

 

38,000 

 

 

 

 

 

(47,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2016

 

$

(648,000)

 

$

25,000 

 

$

 -

 

$

(623,000)



The Company recognized $4,238,000 in foreign currency translation losses within the income statement during the first quarter due to the substantial liquidation of our Austin Taylor facility in the U.K.  Refer to Note 12 for further information regarding the pension liability adjustment recognized in income in the first quarter of 2016.

 


Summary Of Significant Accounting Policies (Policy)
v3.3.0.814
Summary Of Significant Accounting Policies (Policy)
6 Months Ended
Jun. 30, 2016
Summary Of Significant Accounting Policies [Abstract]  
Description Of Business

Description of Business



Communications Systems, Inc. (herein collectively called “CSI” or the “Company”) is a Minnesota corporation organized in 1969 that operates primarily as a holding company conducting its business through four business units having operations in the United States, Costa Rica, and the United Kingdom. Through its Suttle business unit, the Company manufactures and sells copper and fiber connectivity systems, enclosure systems, and active technologies for voice, data and video communications. Through its Transition Networks business unit, the Company manufactures and sells media converters, network interface devices, network interface cards, Ethernet switches and other connectivity products that offer the ability to affordably integrate the benefits of fiber optics into any data network. Through its JDL Technologies business unit, the Company provides technology solutions including virtualization, managed services, wired and wireless network design and implementation, HIPAA-compliant IT services, and converged infrastructure configuration and deployment. Through its Net2Edge business unit, the Company provides business-critical systems for customers worldwide with a sharp focus on the telecommunications carrier and enables carriers to connect legacy networks to high-speed services.

Financial Statement Presentation

Financial Statement Presentation



The condensed consolidated balance sheets and condensed consolidated statement of changes in stockholders’ equity as of June 30, 2016 and the related condensed consolidated statements of loss and comprehensive loss, and the condensed consolidated statements of cash flows for the periods ended June 30, 2016 and 2015 have been prepared by Company management.  In the opinion of management, all adjustments (which include only normal recurring adjustments, except where noted) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2016 and 2015 and for the periods then ended have been made.



Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted.  We recommend these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2015 Annual Report to Shareholders on Form 10-K.  The results of operations for the period ended June 30, 2016 are not necessarily indicative of operating results for the entire year.



The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses during the reporting period.  The estimates and assumptions used in the accompanying condensed consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the time of the financial statements.  Actual results could differ from those estimates.



Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, appropriately represent, in all material respects, the current status of accounting policies, and are incorporated herein by reference.

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss



The components of accumulated other comprehensive loss, net of tax, are as follows:







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Foreign Currency Translation

 

Unrealized (loss)/gain on securities

 

Pension liability adjustment

 

Accumulated Other Comprehensive Loss

December 31, 2015

 

$

(4,801,000)

 

$

(13,000)

 

$

4,148,000 

 

$

(666,000)



 

 

 

 

 

 

 

 

 

 

 

 

Net current period change

 

 

(85,000)

 

 

38,000 

 

 

 

 

 

(47,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2016

 

$

(648,000)

 

$

25,000 

 

$

 -

 

$

(623,000)



The Company recognized $4,238,000 in foreign currency translation losses within the income statement during the first quarter due to the substantial liquidation of our Austin Taylor facility in the U.K.  Refer to Note 12 for further information regarding the pension liability adjustment recognized in income in the first quarter of 2016.


Summary Of Significant Accounting Policies (Tables)
v3.3.0.814
Summary Of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2016
Summary Of Significant Accounting Policies [Abstract]  
Components Of Accumulated Other Comprehensive Loss



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Foreign Currency Translation

 

Unrealized (loss)/gain on securities

 

Pension liability adjustment

 

Accumulated Other Comprehensive Loss

December 31, 2015

 

$

(4,801,000)

 

$

(13,000)

 

$

4,148,000 

 

$

(666,000)



 

 

 

 

 

 

 

 

 

 

 

 

Net current period change

 

 

(85,000)

 

 

38,000 

 

 

 

 

 

(47,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2016

 

$

(648,000)

 

$

25,000 

 

$

 -

 

$

(623,000)




Summary Of Significant Accounting Policies (Narrative) (Details)
v3.3.0.814
Summary Of Significant Accounting Policies (Narrative) (Details)
6 Months Ended
Jun. 30, 2016
USD ($)
segment
Summary Of Significant Accounting Policies [Abstract]  
Number of segments | segment 4
Foreign currency translation loss $ (4,238,497)

Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Loss) (Details)
v3.3.0.814
Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Loss) (Details)
6 Months Ended
Jun. 30, 2016
USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE $ 72,184,691
BALANCE 65,270,353
Foreign Currency Translation [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (4,801,000)
Net current period change (85,000)
Reclassification adjustments into income 4,238,000
BALANCE (648,000)
Unrealized (Loss)/Gain On Securities [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (13,000)
Net current period change $ 38,000
Reclassification adjustments into income
BALANCE $ 25,000
Pension Liability Adjustment [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE $ 4,148,000
Net current period change
Reclassification adjustments into income $ (4,148,000)
BALANCE
Accumulated Other Comprehensive Loss [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE $ (666,382)
Net current period change (47,000)
Reclassification adjustments into income 90,000
BALANCE $ (622,789)

Cash Equivalents And Investments
v3.3.0.814
Cash Equivalents And Investments
6 Months Ended
Jun. 30, 2016
Cash Equivalents And Investments [Abstract]  
Cash Equivalents And Investments

NOTE 2 – CASH EQUIVALENTS AND INVESTMENTS



The following tables show the Company’s cash equivalents and available-for-sale securities’ amortized cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short and long term investments as of June 30, 2016 and December 31, 2015:  







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2016



Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

2,255,000 

 

$

 -

 

$

 -

 

$

2,255,000 

 

$

2,255,000 

 

$

 

 

$

 

Subtotal

 

2,255,000 

 

 

 -

 

 

 -

 

 

2,255,000 

 

 

2,255,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

5,012,000 

 

 

13,000 

 

 

(1,000)

 

 

5,024,000 

 

 

 -

 

 

3,574,000 

 

 

1,450,000 

Corporate Notes/Bonds

 

5,032,000 

 

 

1,000 

 

 

(1,000)

 

 

5,032,000 

 

 

 -

 

 

5,032,000 

 

 

 -

Subtotal

 

10,044,000 

 

 

14,000 

 

 

(2,000)

 

 

10,056,000 

 

 

 -

 

 

8,606,000 

 

 

1,450,000 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

12,299,000 

 

$

14,000 

 

$

(2,000)

 

$

12,311,000 

 

$

2,255,000 

 

$

8,606,000 

 

$

1,450,000 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015



Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

1,944,000 

 

$

 -

 

$

 -

 

$

1,944,000 

 

$

1,944,000 

 

$

 

 

$

 

Subtotal

 

1,944,000 

 

 

 -

 

 

 -

 

 

1,944,000 

 

 

1,944,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

5,493,000 

 

 

3,000 

 

 

(8,000)

 

 

5,488,000 

 

 

 -

 

 

1,202,000 

 

 

4,286,000 

Corporate Notes/Bonds

 

6,056,000 

 

 

 -

 

 

(22,000)

 

 

6,034,000 

 

 

 -

 

 

4,027,000 

 

 

2,007,000 

Subtotal

 

11,549,000 

 

 

3,000 

 

 

(30,000)

 

 

11,522,000 

 

 

 -

 

 

5,229,000 

 

 

6,293,000 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

13,493,000 

 

$

3,000 

 

$

(30,000)

 

$

13,466,000 

 

$

1,944,000 

 

$

5,229,000 

 

$

6,293,000 



As part of the Company’s amended credit agreement with Wells Fargo Bank, the Company has pledged $5.0 million in long term investments against the line of credit. The Company tests for other-than-temporary losses on a quarterly basis and has considered the unrealized losses shown above to be temporary in nature. The Company intends to hold these investments until it can recover the full principal amount and has the ability to do so based on its other sources of liquidity. The Company expects these recoveries to occur prior to the contractual maturities.  All unrealized losses as of June 30, 2016 were in a continuous unrealized loss position for less than twelve months and are not deemed to be other than temporarily impaired as of June 30, 2016.



The following table summarizes the estimated fair value of our investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of June 30, 2016:  





 

 

 

 

 

 



 

 

 

 

 

 



 

Amortized Cost

 

Estimated Market Value



 

 

 

 

Due within one year

 

$  

8,600,000 

 

$

8,606,000 

Due after one year through five years

 

 

1,444,000 

 

 

1,450,000 



 

10,044,000 

 

$

10,056,000 



The Company did not recognize any gross realized gains, and gross realized losses were immaterial, during the three-month periods ending June 30, 2016 and 2015, respectively. If the Company had realized gains or losses, they would be included within investment and other income in the accompanying consolidated results of operations.

 


Cash Equivalents And Investments (Tables)
v3.3.0.814
Cash Equivalents And Investments (Tables)
6 Months Ended
Jun. 30, 2016
Cash Equivalents And Investments [Abstract]  
Schedule Of Cash And Available-For-Sale Securities



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2016



Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

2,255,000 

 

$

 -

 

$

 -

 

$

2,255,000 

 

$

2,255,000 

 

$

 

 

$

 

Subtotal

 

2,255,000 

 

 

 -

 

 

 -

 

 

2,255,000 

 

 

2,255,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

5,012,000 

 

 

13,000 

 

 

(1,000)

 

 

5,024,000 

 

 

 -

 

 

3,574,000 

 

 

1,450,000 

Corporate Notes/Bonds

 

5,032,000 

 

 

1,000 

 

 

(1,000)

 

 

5,032,000 

 

 

 -

 

 

5,032,000 

 

 

 -

Subtotal

 

10,044,000 

 

 

14,000 

 

 

(2,000)

 

 

10,056,000 

 

 

 -

 

 

8,606,000 

 

 

1,450,000 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

12,299,000 

 

$

14,000 

 

$

(2,000)

 

$

12,311,000 

 

$

2,255,000 

 

$

8,606,000 

 

$

1,450,000 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015



Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

1,944,000 

 

$

 -

 

$

 -

 

$

1,944,000 

 

$

1,944,000 

 

$

 

 

$

 

Subtotal

 

1,944,000 

 

 

 -

 

 

 -

 

 

1,944,000 

 

 

1,944,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

5,493,000 

 

 

3,000 

 

 

(8,000)

 

 

5,488,000 

 

 

 -

 

 

1,202,000 

 

 

4,286,000 

Corporate Notes/Bonds

 

6,056,000 

 

 

 -

 

 

(22,000)

 

 

6,034,000 

 

 

 -

 

 

4,027,000 

 

 

2,007,000 

Subtotal

 

11,549,000 

 

 

3,000 

 

 

(30,000)

 

 

11,522,000 

 

 

 -

 

 

5,229,000 

 

 

6,293,000 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

13,493,000 

 

$

3,000 

 

$

(30,000)

 

$

13,466,000 

 

$

1,944,000 

 

$

5,229,000 

 

$

6,293,000 



Schedule Of Estimated Fair Value Of Available-For-Sale Securities



 

 

 

 

 

 



 

 

 

 

 

 



 

Amortized Cost

 

Estimated Market Value



 

 

 

 

Due within one year

 

$  

8,600,000 

 

$

8,606,000 

Due after one year through five years

 

 

1,444,000 

 

 

1,450,000 



 

10,044,000 

 

$

10,056,000 




Cash Equivalents And Investments (Narrative) (Details)
v3.3.0.814
Cash Equivalents And Investments (Narrative) (Details) - USD ($)
3 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Cash Equivalents And Investments [Abstract]    
Long-term investments pledged against line of credit $ 5,000,000  
Gross realized gains (losses) $ 0 $ 0

Cash Equivalents And Investments (Schedule Of Cash And Available-For-Sale Securities) (Details)
v3.3.0.814
Cash Equivalents And Investments (Schedule Of Cash And Available-For-Sale Securities) (Details) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 12,299,000 $ 13,493,000
Gross Unrealized Gains 14,000 3,000
Gross Unrealized Losses (2,000) (30,000)
Fair Value 12,311,000 13,466,000
Cash Equivalents 2,255,000 1,944,000
Short-Term Investments 8,605,825 5,228,668
Long-Term Investments 1,449,790 6,293,505
Cash Equivalents [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 2,255,000 1,944,000
Fair Value 2,255,000 1,944,000
Cash Equivalents 2,255,000 1,944,000
Cash Equivalents [Member] | Money Market Funds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 2,255,000 1,944,000
Fair Value 2,255,000 1,944,000
Cash Equivalents 2,255,000 1,944,000
Investments [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 10,044,000 11,549,000
Gross Unrealized Gains 14,000 3,000
Gross Unrealized Losses (2,000) (30,000)
Fair Value 10,056,000 11,522,000
Short-Term Investments 8,606,000 5,229,000
Long-Term Investments 1,450,000 6,293,000
Investments [Member] | Certificates Of Deposit [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 5,012,000 5,493,000
Gross Unrealized Gains 13,000 3,000
Gross Unrealized Losses (1,000) (8,000)
Fair Value 5,024,000 5,488,000
Short-Term Investments 3,574,000 1,202,000
Long-Term Investments 1,450,000 4,286,000
Investments [Member] | Corporate Notes/Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 5,032,000 6,056,000
Gross Unrealized Gains 1,000  
Gross Unrealized Losses (1,000) (22,000)
Fair Value 5,032,000 6,034,000
Short-Term Investments $ 5,032,000 4,027,000
Long-Term Investments   $ 2,007,000

Cash Equivalents And Investments (Schedule Of Estimated Fair Value Of Available-For-Sale Securities) (Details)
v3.3.0.814
Cash Equivalents And Investments (Schedule Of Estimated Fair Value Of Available-For-Sale Securities) (Details) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]    
Fair Value $ 12,311,000 $ 13,466,000
Investments [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost, Due within one year 8,600,000  
Amortized Cost, Due after one year through five years 1,444,000  
Amortized Cost 10,044,000  
Fair Value, Due within one year 8,606,000  
Fair Value, Due after one year through five years 1,450,000  
Fair Value $ 10,056,000 $ 11,522,000

Stock-Based Compensation
v3.3.0.814
Stock-Based Compensation
6 Months Ended
Jun. 30, 2016
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

NOTE 3 - STOCK-BASED COMPENSATION



Employee Stock Purchase Plan



Under the Company’s Employee Stock Purchase Plan (“ESPP”), employees are able to acquire shares of common stock at 85% of the price at the end of each current quarterly plan term.  The most recent term ended June 30, 2016.  The ESPP is considered compensatory under current Internal Revenue Service rules.  At June 30, 2016, after giving effect to the shares issued as of that date, 90,701 shares remain available for purchase under the ESPP.



2011 Executive Incentive Compensation Plan



On March 28, 2011 the Board adopted and on May 19, 2011 the Company’s shareholders approved the Company’s 2011 Executive Incentive Compensation Plan (“2011 Incentive Plan”).  The 2011 Incentive Plan authorizes incentive awards to officers, key employees and non-employee directors in the form of options (incentive and non-qualified), stock appreciation rights, restricted stock, restricted stock units, performance stock units (“deferred stock”), performance cash units, and other awards in stock, cash, or a combination of stock and cash.  The 2011 Incentive Plan, as amended, allows the issuance of up to 2,000,000 shares of common stock. 



During 2016, stock options covering 305,968 shares have been awarded to key executive employees and directors. These options expire seven years from the date of award and vest 25% each year beginning one year after the date of award.  The Company also granted deferred stock awards of 93,828 shares to key employees during the first quarter of 2016 under the Company’s long-term incentive plan for performance over the 2016 to 2018 period. The actual number of shares of deferred stock, if any, that are ultimately earned by the respective employees will be determined based on achievement against performance goals at the end of the three year period ending December 31, 2018 and any shares earned will be issued in the first quarter of 2019 to those key employees still with the Company at that time. 



At June 30, 2016,  122,797 shares have been issued under the 2011 Incentive Plan, 1,147,221 shares are subject to currently outstanding options, deferred stock awards, and unvested restricted stock units, and 729,982 shares are eligible for grant under future awards.





Stock Option Plan for Directors



Shares of common stock are reserved for issuance to non-employee directors under options granted by the Company prior to 2011 under its Stock Option Plan for Non-Employee Directors (the “Director Plan”).  Under the Director Plan nonqualified stock options to acquire shares of common stock were automatically granted to each non-employee director concurrent with annual meetings of shareholders in 2010 and earlier years, with the exercise price of options granted being the fair market value of the common stock on the date of the respective shareholder meetings.  Options granted under the Director Plan expire 10 years from date of grant. No options were granted under the Director Plan in 2014 or 2015.  The Company amended the Director Plan in May 2011 to prohibit future option grants.  As of June 30, 2016, there were 63,000 shares subject to outstanding options under the Director Plan.



1992 Stock Plan



Under the Company’s 1992 Stock Plan (“the Stock Plan”), shares of common stock may be issued pursuant to stock options, restricted stock or deferred stock grants to officers and key employees.  Exercise prices of stock options under the Stock Plan cannot be less than fair market value of the stock on the date of grant.  Rules and conditions governing awards of stock options, restricted stock and deferred stock are determined by the Compensation Committee of the Board of Directors, subject to limitations in the Stock PlanThe Company amended the Stock Plan in 2011 to prohibit future stock options or other equity awards.



At June 30, 2016, after reserving for stock options and deferred stock awards granted in prior years and adjusting for forfeitures and issuances during the year, there were 22,008 shares reserved for issuance under the Stock Plan. The Company has not awarded stock options or deferred stock under the Stock Plan since 2011.



Changes in Stock Options Outstanding



The following table summarizes changes in the number of outstanding stock options under the 2011 Incentive Plan, the Director Plan and Stock Plan over the period December 31, 2015 to June 30, 2016:  





 

 

 

 

 

 

 



 

 

 

 

 

 

 



 

 

Weighted average

 

Weighted average



 

 

exercise price

 

remaining



Options

 

per share

 

contractual term

Outstanding – December 31, 2015

721,924 

 

$

 

11.70 

 

4.89 

Awarded

305,968 

 

 

 

6.72 

 

 

Exercised

 -

 

 

 

 -

 

 

Forfeited

(13,721)

 

 

 

10.02 

 

 

Outstanding – June 30, 2016

1,014,171 

 

 

 

10.22 

 

5.16 



 

 

 

 

 

 

 

Exercisable at June 30, 2016

477,271 

 

$

 

11.67 

 

4.11 

Expected to vest June 30, 2016

1,014,171 

 

 

 

10.22 

 

5.16 



The aggregate intrinsic value of all options (the amount by which the market price of the stock on the last day of the period exceeded the market price of the stock on the date of grant) outstanding at June 30, 2016 was $89,000.  The intrinsic value of all options exercised during the six months ended June 30, 2016 was $0. Net cash proceeds from the exercise of all stock options were $0 for the six months ended June 30, 2016 and 2015.



Changes in Deferred Stock Outstanding



The following table summarizes the changes in the number of deferred stock shares under the Stock Plan and 2011 Incentive Plan over the period December 31, 2015 to June 30, 2016:





 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

Weighted Average



 

 

 

 

Grant Date



 

 

Shares

 

Fair Value

Outstanding – December 31, 2015

 

 

126,427 

 

$

11.73 

Granted

 

 

102,161 

 

 

7.28 

Vested

 

 

(15,797)

 

 

12.52 

Forfeited

 

 

(29,807)

 

 

11.00 

Outstanding – June 30, 2016

 

 

182,984 

 

 

9.30 



Changes in Restricted Stock Units Outstanding



The following table summarizes the changes in the number of restricted stock units under the 2011 Incentive Plan over the period December 31, 2015 to June 30, 2016:





 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

Weighted Average



 

 

 

 

Grant Date



 

 

Shares

 

Fair Value