Document And Entity Information
v3.3.0.814
Document And Entity Information - shares
9 Months Ended
Sep. 30, 2016
Nov. 01, 2016
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2016  
Document Fiscal Period Focus Q3  
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   8,862,408

Condensed Consolidated Balance Sheets
v3.3.0.814
Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2016
Dec. 31, 2015
CURRENT ASSETS:    
Cash and cash equivalents $ 3,233,390 $ 9,812,737
Investments 8,815,960 5,228,668
Trade accounts receivable, less allowance for doubtful accounts of $46,000 and $123,000, respectively 16,372,514 17,849,207
Inventories 24,560,477 24,985,560
Prepaid income taxes 3,113,837 2,972,271
Other current assets 1,166,929 1,041,303
TOTAL CURRENT ASSETS 57,263,107 61,889,746
PROPERTY, PLANT AND EQUIPMENT, net 16,294,720 17,468,420
OTHER ASSETS:    
Investments 727,764 6,293,505
Goodwill 1,462,503 1,462,503
Other assets 723,421 802,056
TOTAL OTHER ASSETS 2,913,688 8,558,064
TOTAL ASSETS 76,471,515 87,916,230
CURRENT LIABILITIES:    
Current portion of long-term debt   103,603
Accounts payable 6,998,059 8,373,292
Accrued compensation and benefits 2,786,226 3,050,822
Accrued consideration 6,918 442,234
Other accrued liabilities 2,324,617 1,996,609
Dividends payable 413,966 1,474,892
TOTAL CURRENT LIABILITIES 12,529,786 15,441,452
LONG TERM LIABILITIES:    
Long-term compensation plans 14,968  
Uncertain tax positions 116,280 102,633
Deferred income taxes 50,371 61,453
Pension liabilities   126,001
TOTAL LONG-TERM LIABILITIES $ 181,619 $ 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; 8,862,408 and 8,754,550 shares issued and outstanding, respectively $ 443,120 $ 437,727
Additional paid-in capital 41,134,822 40,129,285
Retained earnings 22,792,222 32,284,061
Accumulated other comprehensive loss (610,054) (666,382)
TOTAL STOCKHOLDERS' EQUITY 63,760,110 72,184,691
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 76,471,515 $ 87,916,230

Condensed Consolidated Balance Sheets (Parenthetical)
v3.3.0.814
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2016
Dec. 31, 2015
Condensed Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 46 $ 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 8,862,408 8,754,550
Common stock, shares outstanding 8,862,408 8,754,550

Condensed Consolidated Statements Of (Loss) Income And Comprehensive (Loss) Income
v3.3.0.814
Condensed Consolidated Statements Of (Loss) Income And Comprehensive (Loss) Income - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Condensed Consolidated Statements Of (Loss) Income And Comprehensive (Loss) Income [Abstract]        
Sales $ 25,616,640 $ 32,246,166 $ 76,594,526 $ 79,988,763
Costs and expenses:        
Cost of sales 18,926,042 21,822,331 55,759,167 56,139,121
Selling, general and administrative expenses 7,866,009 9,992,444 27,550,271 30,827,158
Pension liability adjustment gains     (4,147,836)  
Total costs and expenses 26,792,051 31,814,775 79,161,602 86,966,279
Operating (loss) income (1,175,411) 431,391 (2,567,076) (6,977,516)
Other income (expenses):        
Investment and other income 19,259 105,700 119,395 172,555
(Loss) Gain on sale of assets (60,088) 5,035 748,234 9,408
Interest and other expense (44,228) (27,828) (94,375) (102,090)
Foreign currency translation loss     (4,238,497)  
Other (expense) income, net (85,057) 82,907 (3,465,243) 79,873
Loss from operations before income taxes (1,260,468) 514,298 (6,032,319) (6,897,643)
Income tax expense (benefit) 3,301 (769,656) 242,617 (2,989,951)
Net (loss) income (1,263,769) 1,283,954 (6,274,936) (3,907,692)
Other comprehensive income (loss), net of tax:        
Additional minimum pension liability adjustments   (11,985) (4,147,836) (38,783)
Unrealized gain on available-for-sale securities (2,729) (1,010) 35,574 48,916
Foreign currency translation adjustment 15,465 (130,569) 4,168,590 (156,776)
Total other comprehensive income (loss) 12,736 (143,564) 56,328 (146,643)
Comprehensive (loss) income $ (1,251,033) $ 1,140,390 $ (6,218,608) $ (4,054,335)
Basic net (loss) income per share: $ (0.14) $ 0.15 $ (0.71) $ (0.45)
Diluted net (loss) income per share: $ (0.14) $ 0.15 $ (0.71) $ (0.45)
Weighted Average Basic Shares Outstanding 8,849,236 8,707,564 8,816,042 8,692,154
Weighted Average Dilutive Shares Outstanding 8,849,236 8,743,179 8,816,042 8,692,154
Dividends declared per share $ 0.04 $ 0.16 $ 0.36 $ 0.48

Condensed Consolidated Statement Of Changes In Stockholders' Equity
v3.3.0.814
Condensed Consolidated Statement Of Changes In Stockholders' Equity - 9 months ended Sep. 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     (6,274,936)   (6,274,936)
Issuance of common stock under Employee Stock Purchase Plan $ 783 115,157     115,940
Issuance of common stock under Employee Stock Purchase Plan, Shares 15,671        
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 $ 1,779 0     1,779
Issuance of common stock under Executive Stock Plan, Shares 35,570        
Tax benefit from stock based payments   (63,304)     (63,304)
Share-based compensation   505,306     505,306
Purchase of common stock $ (183) (16,968) (8,377)   (25,528)
Purchase of common stock, Shares (3,661)        
Shareholder dividends     (3,208,526)   (3,208,526)
Other comprehensive income       56,328 56,328
BALANCE at Sep. 30, 2016 $ 443,120 $ 41,134,822 $ 22,792,222 $ (610,054) $ 63,760,110
BALANCE, Shares at Sep. 30, 2016 8,862,408        

Condensed Consolidated Statements Of Cash Flows
v3.3.0.814
Condensed Consolidated Statements Of Cash Flows - USD ($)
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (6,274,936) $ (3,907,692)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 2,754,189 2,476,244
Share based compensation 505,306 701,204
Deferred taxes (11,083) (311,424)
Change in fair value of acquisition-related contingent consideration (135,316) (28,574)
Gain on sale of assets (748,234) (9,408)
Excess tax benefits from share-based payments 63,304 (87,842)
Changes in assets and liabilities:    
Trade receivables 1,443,908 (9,155,151)
Inventories 352,653 5,177,573
Prepaid income taxes (141,566) (1,465,114)
Other assets (148,010) (1,363,057)
Accounts payable (1,188,066) 1,865,964
Accrued compensation and benefits 224,713 130,096
Other accrued liabilities 352,789 (27,998)
Income taxes payable (49,657) 146,493
Other 58,001 (58,295)
Net cash used in operating activities (2,942,005) (5,916,981)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Capital expenditures (1,889,283) (1,782,717)
Acquisition of business, net of cash aquired   (917,363)
Proceeds from the sale of fixed assets 972,595 56,471
Proceeds from the sale of investments 2,014,023 3,449,207
Net cash provided by investing activities 1,097,335 805,598
CASH FLOWS FROM FINANCING ACTIVITIES:    
Borrowings on line of credit 4,894,046 3,900,000
Payments against line of credit (4,894,046)  
Cash dividends paid (4,269,451) (4,220,716)
Mortgage principal payments (103,603) (389,799)
Proceeds from issuance of common stock, net of shares withheld 92,191 92,607
Excess tax benefit from share-based payments (63,304) 87,842
Payment of deferred consideration related to acquisition (300,000)  
Net cash used in financing activities (4,644,167) (530,066)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH (90,510) (67,767)
NET DECREASE IN CASH AND CASH EQUIVALENTS (6,579,347) (5,709,216)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,812,737 13,736,857
CASH AND CASH EQUIVALENTS AT END OF PERIOD 3,233,390 8,027,641
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Income taxes paid (refunded) 443,106 (1,447,021)
Interest paid 43,630 34,503
Dividends declared not paid 413,966 1,464,332
Capital expenditures in accounts payable 57,181 91,808
Acquisition costs in accrued consideration $ 6,918 $ 434,286

Summary Of Significant Accounting Policies
v3.3.0.814
Summary Of Significant Accounting Policies
9 Months Ended
Sep. 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 enables telecommunications 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 September 30, 2016 and the related condensed consolidated statements of (loss) income and comprehensive (loss) income, and the condensed consolidated statements of cash flows for the periods ended September 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 September 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 September 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

 

 

(70,000)

 

 

36,000 

 

 

 

 

 

(34,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2016

 

$

(633,000)

 

$

23,000 

 

$

 -

 

$

(610,000)



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)
9 Months Ended
Sep. 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 enables telecommunications 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 September 30, 2016 and the related condensed consolidated statements of (loss) income and comprehensive (loss) income, and the condensed consolidated statements of cash flows for the periods ended September 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 September 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 September 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

 

 

(70,000)

 

 

36,000 

 

 

 

 

 

(34,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2016

 

$

(633,000)

 

$

23,000 

 

$

 -

 

$

(610,000)



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)
9 Months Ended
Sep. 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

 

 

(70,000)

 

 

36,000 

 

 

 

 

 

(34,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2016

 

$

(633,000)

 

$

23,000 

 

$

 -

 

$

(610,000)




Summary Of Significant Accounting Policies (Narrative) (Details)
v3.3.0.814
Summary Of Significant Accounting Policies (Narrative) (Details)
9 Months Ended
Sep. 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)
9 Months Ended
Sep. 30, 2016
USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE $ 72,184,691
BALANCE 63,760,110
Foreign Currency Translation [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (4,801,000)
Net current period change (70,000)
Reclassification adjustments into income 4,238,000
BALANCE (633,000)
Unrealized (Loss)/Gain On Securities [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (13,000)
Net current period change $ 36,000
Reclassification adjustments into income
BALANCE $ 23,000
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 (34,000)
Reclassification adjustments into income 90,000
BALANCE $ (610,054)

Cash Equivalents And Investments
v3.3.0.814
Cash Equivalents And Investments
9 Months Ended
Sep. 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 September 30, 2016 and December 31, 2015:  







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 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

$

98,000 

 

$

 -

 

$

 -

 

$

98,000 

 

$

98,000 

 

$

 

 

$

 

Subtotal

 

98,000 

 

 

 -

 

 

 -

 

 

98,000 

 

 

98,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

5,011,000 

 

 

10,000 

 

 

(1,000)

 

 

5,020,000 

 

 

 -

 

 

4,292,000 

 

 

728,000 

Corporate Notes/Bonds

 

4,524,000 

 

 

1,000 

 

 

(1,000)

 

 

4,524,000 

 

 

 -

 

 

4,524,000 

 

 

 -

Subtotal

 

9,535,000 

 

 

11,000 

 

 

(2,000)

 

 

9,544,000 

 

 

 -

 

 

8,816,000 

 

 

728,000 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

9,633,000 

 

$

11,000 

 

$

(2,000)

 

$

9,642,000 

 

$

98,000 

 

$

8,816,000 

 

$

728,000 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 



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 September 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 September 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 September 30, 2016:  





 

 

 

 

 

 



 

 

 

 

 

 



 

Amortized Cost

 

Estimated Market Value



 

 

 

 

Due within one year

 

$  

8,810,000 

 

$

8,816,000 

Due after one year through five years

 

 

725,000 

 

 

728,000 



 

9,535,000 

 

$

9,544,000 



The Company did not recognize any gross realized gains, and gross realized losses were immaterial, during the three-month periods ending September 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)
9 Months Ended
Sep. 30, 2016
Cash Equivalents And Investments [Abstract]  
Schedule Of Cash And Available-For-Sale Securities



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 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

$

98,000 

 

$

 -

 

$

 -

 

$

98,000 

 

$

98,000 

 

$

 

 

$

 

Subtotal

 

98,000 

 

 

 -

 

 

 -

 

 

98,000 

 

 

98,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

5,011,000 

 

 

10,000 

 

 

(1,000)

 

 

5,020,000 

 

 

 -

 

 

4,292,000 

 

 

728,000 

Corporate Notes/Bonds

 

4,524,000 

 

 

1,000 

 

 

(1,000)

 

 

4,524,000 

 

 

 -

 

 

4,524,000 

 

 

 -

Subtotal

 

9,535,000 

 

 

11,000 

 

 

(2,000)

 

 

9,544,000 

 

 

 -

 

 

8,816,000 

 

 

728,000 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

9,633,000 

 

$

11,000 

 

$

(2,000)

 

$

9,642,000 

 

$

98,000 

 

$

8,816,000 

 

$

728,000 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$  

8,810,000 

 

$

8,816,000 

Due after one year through five years

 

 

725,000 

 

 

728,000 



 

9,535,000 

 

$

9,544,000 




Cash Equivalents And Investments (Narrative) (Details)
v3.3.0.814
Cash Equivalents And Investments (Narrative) (Details) - USD ($)
3 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Cash Equivalents And Investments [Abstract]    
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 ($)
Sep. 30, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 9,633,000 $ 13,493,000
Gross Unrealized Gains 11,000 3,000
Gross Unrealized Losses (2,000) (30,000)
Fair Value 9,642,000 13,466,000
Cash Equivalents 98,000 1,944,000
Short-Term Investments 8,815,960 5,228,668
Long-Term Investments 727,764 6,293,505
Cash Equivalents [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 98,000 1,944,000
Fair Value 98,000 1,944,000
Cash Equivalents 98,000 1,944,000
Cash Equivalents [Member] | Money Market Funds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 98,000 1,944,000
Fair Value 98,000 1,944,000
Cash Equivalents 98,000 1,944,000
Investments [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 9,535,000 11,549,000
Gross Unrealized Gains 11,000 3,000
Gross Unrealized Losses (2,000) (30,000)
Fair Value 9,544,000 11,522,000
Short-Term Investments 8,816,000 5,229,000
Long-Term Investments 728,000 6,293,000
Investments [Member] | Certificates Of Deposit [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 5,011,000 5,493,000
Gross Unrealized Gains 10,000 3,000
Gross Unrealized Losses (1,000) (8,000)
Fair Value 5,020,000 5,488,000
Short-Term Investments 4,292,000 1,202,000
Long-Term Investments 728,000 4,286,000
Investments [Member] | Corporate Notes/Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 4,524,000 6,056,000
Gross Unrealized Gains 1,000  
Gross Unrealized Losses (1,000) (22,000)
Fair Value 4,524,000 6,034,000
Short-Term Investments $ 4,524,000 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 ($)
Sep. 30, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]    
Fair Value $ 9,642,000 $ 13,466,000
Investments [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost, Due within one year 8,810,000  
Amortized Cost, Due after one year through five years 725,000  
Amortized Cost 9,535,000  
Fair Value, Due within one year 8,816,000  
Fair Value, Due after one year through five years 728,000  
Fair Value $ 9,544,000 $ 11,522,000

Stock-Based Compensation
v3.3.0.814
Stock-Based Compensation
9 Months Ended
Sep. 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 September 30, 2016.  The ESPP is considered compensatory under current Internal Revenue Service rules.  At September 30, 2016, after giving effect to the shares issued as of that date, 85,569 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 325,968 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 102,161 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 September 30, 2016,  131,035 shares have been issued under the 2011 Incentive Plan, 1,121,153 shares are subject to currently outstanding options, deferred stock awards, and unvested restricted stock units, and 747,812 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 September 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 September 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 10,230 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 September 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

325,968 

 

 

 

6.66 

 

 

Exercised

 -

 

 

 

 -

 

 

Forfeited

(63,329)

 

 

 

11.82 

 

 

Outstanding – September 30, 2016

984,563 

 

 

 

10.02 

 

5.19 



 

 

 

 

 

 

 

Exercisable at September 30, 2016

446,275 

 

$

 

11.54 

 

4.27 

Expected to vest September 30, 2016

984,563 

 

 

 

10.02 

 

5.19 



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 September 30, 2016 was $0.  The intrinsic value of all options exercised during the nine months ended September 30, 2016 was $0. Net cash proceeds from the exercise of all stock options were $0 for the nine months ended September 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 September 30, 2016:





 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

Weighted Average



 

 

 

 

Grant Date



 

 

Shares

 

Fair Value

Outstanding – December 31, 2015

 

 

126,427 

 

$

11.73 

Granted

 

 

102,161 

 

 

7.28 

Vested

 

 

(16,547)

 

 

12.41 

Forfeited

 

 

(29,807)

 

 

11.00 

Outstanding – September 30, 2016

 

 

182,234 

 

 

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 September 30, 2016:





 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

Weighted Average



 

 

 

 

Grant Date



 

 

Shares

 

Fair Value