Document And Entity Information
v3.6.0.2
Document And Entity Information - USD ($)
12 Months Ended
Dec. 31, 2016
Mar. 01, 2017
Jun. 30, 2016
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2016    
Document Fiscal Period Focus FY    
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 Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    
Entity Public Float     $ 48,934,000
Entity Common Stock, Shares Outstanding   8,883,535  

Consolidated Balance Sheets
v3.6.0.2
Consolidated Balance Sheets - USD ($)
Dec. 31, 2016
Dec. 31, 2015
CURRENT ASSETS:    
Cash and cash equivalents $ 10,443,274 $ 9,812,737
Investments 5,805,276 5,228,668
Trade accounts receivable, less allowance for doubtful accounts of $77,000 and $123,000, respectively 14,552,191 17,849,207
Inventories 22,204,902 24,985,560
Prepaid income taxes 1,400,118 2,972,271
Other current assets 967,332 1,041,303
TOTAL CURRENT ASSETS 55,373,093 61,889,746
PROPERTY, PLANT AND EQUIPMENT, net 15,719,403 17,468,420
OTHER ASSETS:    
Investments   6,293,505
Goodwill 1,462,503 1,462,503
Other assets 622,017 802,056
TOTAL OTHER ASSETS 2,084,520 8,558,064
TOTAL ASSETS 73,177,016 87,916,230
CURRENT LIABILITIES:    
Current portion of long-term debt   103,603
Accounts payable 6,953,710 8,373,292
Accrued compensation and benefits 2,149,973 3,050,822
Accrued consideration   442,234
Other accrued liabilities 1,851,938 1,996,609
Dividends payable 412,542 1,474,892
TOTAL CURRENT LIABILITIES 11,368,163 15,441,452
LONG TERM LIABILITIES:    
Long-term compensation plans 16,299  
Uncertain tax positions 106,864 102,633
Deferred income taxes 52,998 61,453
Pension liabilities   126,001
TOTAL LONG-TERM LIABILITIES 176,161 290,087
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; 8,877,379 and 8,754,550 shares issued and outstanding, respectively 443,869 437,727
Additional paid-in capital 41,279,281 40,129,285
Retained earnings 20,596,203 32,284,061
Accumulated other comprehensive loss (686,661) (666,382)
TOTAL STOCKHOLDERS' EQUITY 61,632,692 72,184,691
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 73,177,016 $ 87,916,230

Consolidated Balance Sheets (Parenthetical)
v3.6.0.2
Consolidated Balance Sheets (Parenthetical) - USD ($)
Dec. 31, 2016
Dec. 31, 2015
Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 77,000 $ 123,000
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 8,877,379 8,754,550
Common stock, shares outstanding 8,877,379 8,754,550

Consolidated Statements Of (Loss) Income And Comprehensive (Loss) Income
v3.6.0.2
Consolidated Statements Of (Loss) Income And Comprehensive (Loss) Income - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Consolidated Statements Of (Loss) Income And Comprehensive (Loss) Income [Abstract]      
Sales $ 99,352,934 $ 107,669,524 $ 119,071,439
Costs and expenses:      
Cost of sales 72,771,393 76,123,362 76,912,881
Selling, general and administrative expenses 35,185,924 40,829,755 38,627,801
Additional minimum pension liability adjustments (4,147,836)    
Plan settlement costs   1,222,276  
Restructuring expense 0 0 237,838
Total costs and expenses 103,809,481 118,175,393 115,778,520
Operating (loss) income (4,456,547) (10,505,869) 3,292,919
Other (expenses) and income:      
Investment and other income 208,564 216,491 80,392
Gain (loss) on sale of assets 749,509 8,090 (112,242)
Interest and other expense (119,627) (120,435) (79,841)
Foreign currency translation loss (4,238,497)    
Other (expense) income, net (3,400,051) 104,146 (111,691)
(Loss) income from operations before income taxes (7,856,598) (10,401,723) 3,181,228
Income tax expense (benefit) 256,950 (753,415) 1,219,355
Net (loss) income (8,113,548) (9,648,308) 1,961,873
Other comprehensive (loss) income, net of tax:      
Additional minimum pension liability adjustments (4,147,836) 2,197,000 155,000
Unrealized gains/(losses) on available-for-sale securities 29,736 28,161 (42,666)
Foreign currency translation adjustment 4,097,821 (2,196,385) (567,480)
Total other comprehensive (loss) income (20,279) 28,776 (455,146)
Comprehensive (loss) income $ (8,133,827) $ (9,619,532) $ 1,506,727
Basic net (loss) income per share: $ (0.92) $ (1.11) $ 0.23
Diluted net (loss) income per share: $ (0.92) $ (1.11) $ 0.23
Weighted Average Basic Shares Outstanding 8,831,782 8,720,225 8,622,032
Weighted Average Dilutive Shares Outstanding 8,831,782 8,720,225 8,640,416

Consolidated Statements Of Changes In Stockholders' Equity
v3.6.0.2
Consolidated Statements Of Changes In Stockholders' Equity - USD ($)
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Total
BALANCE at Dec. 31, 2013 $ 427,666 $ 37,110,671 $ 51,323,718 $ (240,012) $ 88,622,043
BALANCE, Shares at Dec. 31, 2013 8,553,320        
Net (loss) income     1,961,873   1,961,873
Issuance of common stock under Employee Stock Purchase Plan $ 705 166,637     167,342
Issuance of common stock under Employee Stock Purchase Plan, Shares 14,104        
Issuance of common stock to Employee Stock Ownership Plan $ 1,626 360,647     362,273
Issuance of common stock to Employee Stock Ownership Plan, Shares 32,520        
Issuance of common stock under Employee Stock Option Plan $ 600 98,760     99,360
Issuance of common stock under Employee Stock Option Plan, Shares 12,000        
Issuance of common stock under Executive Stock Plan $ 2,239 0     2,239
Issuance of common stock under Executive Stock Plan, Shares 44,769        
Tax benefit from non-qualified stock options   80,402     80,402
Share based compensation   784,785     784,785
Purchase of common stock $ (98) (8,672) (14,052)   (22,822)
Purchase of common stock, Shares (1,957)        
Shareholder dividends     (5,581,851)   (5,581,851)
Other comprehensive income       (455,146) (455,146)
BALANCE at Dec. 31, 2014 $ 432,738 38,593,230 47,689,688 (695,158) 86,020,498
BALANCE, Shares at Dec. 31, 2014 8,654,756        
Net (loss) income     (9,648,308)   (9,648,308)
Issuance of common stock under Employee Stock Purchase Plan $ 1,012 201,552     202,564
Issuance of common stock under Employee Stock Purchase Plan, Shares 20,243        
Issuance of common stock to Employee Stock Ownership Plan $ 1,882 393,338     $ 395,220
Issuance of common stock to Employee Stock Ownership Plan, Shares 37,640       37,640
Issuance of common stock under Non-Employee Stock Option Plan $ 600 121,920     $ 122,520
Issuance of common stock under Non-Employee Stock Option Plan, Shares 12,000        
Issuance of common stock under Executive Stock Plan $ 2,313 0     2,313
Issuance of common stock under Executive Stock Plan, Shares 46,254        
Tax benefit from non-qualified stock options   (5,712)     (5,712)
Share based compensation   898,760     898,760
Other share retirements, Shares (16,343)        
Other share retirements $ (818) (73,803) (107,260)   (181,881)
Shareholder dividends     (5,650,059)   (5,650,059)
Other comprehensive income       28,776 28,776
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) income     (8,113,548)   (8,113,548)
Issuance of common stock under Employee Stock Purchase Plan $ 1,219 156,153     157,372
Issuance of common stock under Employee Stock Purchase Plan, Shares 24,375        
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       60,197
Issuance of common stock under Executive Stock Plan $ 2,106 0     $ 2,106
Issuance of common stock under Executive Stock Plan, Shares 42,118        
Tax benefit from non-qualified stock options   (85,102)     (85,102)
Share based compensation   631,875     631,875
Other share retirements, Shares (3,942)        
Other share retirements $ (197) (18,276) (8,258)   (26,731)
Shareholder dividends     (3,566,052)   (3,566,052)
Other comprehensive income       (20,279) (20,279)
BALANCE at Dec. 31, 2016 $ 443,869 $ 41,279,281 $ 20,596,203 $ (686,661) $ 61,632,692
BALANCE, Shares at Dec. 31, 2016 8,877,379        

Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical)
v3.6.0.2
Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical) - $ / shares
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Retained Earnings [Member]      
Shareholder dividends per share $ 0.40 $ 0.64 $ 0.64

Consolidated Statements Of Cash Flows
v3.6.0.2
Consolidated Statements Of Cash Flows
12 Months Ended
Dec. 31, 2016
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net (loss) income $ (8,113,548) $ (9,648,308) $ 1,961,873
Adjustments to reconcile net (loss) income to net cash provided by operating activities:      
Depreciation and amortization 3,683,009 3,312,587 2,482,300
Share based compensation 631,875 898,760 784,785
Deferred taxes (8,456) 2,220,623 790,402
Change in fair value of acquisition-related contingent consideration (142,234) (20,636)  
(Gain)/loss on sale of assets (749,509) (8,090) 112,242
Excess tax benefits from share-based payments   5,712 (80,402)
Changes in assets and liabilities:      
Trade receivables 3,249,449 (3,979,435) 9,057,078
Inventories 2,682,835 6,097,476 (2,039,599)
Prepaid income taxes 1,567,676 (654,583) (936,186)
Other assets 126,031 (393,105) (282,456)
Accounts payable (1,178,120) 2,941,322 105,602
Accrued compensation and benefits (406,608) (246,464) 139,698
Other accrued liabilities (107,726) (191,676) 405,424
Income taxes payable (80,871) 19,642 (243,165)
Other 61,558 486,467 (85,519)
Net cash used in operating activities 1,215,361 840,292 12,172,077
CASH FLOWS FROM INVESTING ACTIVITIES:      
Capital expenditures (2,286,027) (2,394,261) (5,577,039)
Purchases of investments     (12,682,351)
Acquisition of business   (917,363)  
Proceeds from the sale of fixed assets 974,860 57,924 51,073
Proceeds from the sale of investments 5,746,633 4,648,965 6,160,000
Net cash provided by (used in) investing activities 4,435,466 1,395,265 (12,048,317)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Borrowings against line of credit 4,894,046 3,900,000  
Payments against line of credit (4,894,046) (3,900,000)  
Cash dividends paid (4,628,402) (5,621,665) (5,571,672)
Mortgage principal payments (103,603) (524,220) (489,706)
Proceeds from issuance of common stock, net of shares withheld 132,747 145,516 246,119
Excess tax benefit from stock based payments   (5,712) 80,402
Payment of deferred consideration related to acquisition (300,000)   (565,647)
Net cash used in financing activities (4,899,258) (6,006,081) (6,300,504)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH (121,032) (153,596) (145,519)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 630,537 (3,924,120) (6,322,263)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 9,812,737 13,736,857 20,059,120
CASH AND CASH EQUIVALENTS AT END OF YEAR 10,443,274 9,812,737 13,736,857
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:      
Income taxes (refunded) paid (1,232,979) (2,364,994) 1,591,257
Interest paid 43,630 77,801 73,860
Dividends declared not paid 412,542 1,474,892 1,446,498
Capital expenditures in accounts payable $ 6,621 190,888 $ 188,564
Acquisition costs in accrued consideration   $ 442,234  

Summary Of Significant Accounting Policies
v3.6.0.2
Summary Of Significant Accounting Policies
12 Months Ended
Dec. 31, 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,” “our” or the “Company”) is a Minnesota corporation organized in 1969 that operates directly and through its subsidiaries located in the United States, Costa Rica, and the United Kingdom. CSI is principally engaged through its Suttle business unit in the manufacture and sale of connectivity infrastructure products for broadband and voice communications and through its Transition Networks business unit in the manufacture of core media conversion products, Ethernet switches, and other connectivity and data transmission products. 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.



The Company classifies its businesses into four segments: Suttle, which manufactures connectivity infrastructure products for broadband and voice communications; Transition Networks, which designs and markets media conversion products, Ethernet switches, and other connectivity and data transmission products; JDL Technologies, which is an IT managed services provider and value-added reseller; and Net2Edge, which develops products to connect legacy networks to high-speed services. Non-allocated general and administrative expenses are separately accounted for as “Other” in the Company’s segment reporting. Intersegment revenues are eliminated upon consolidation.



Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and accounts have been eliminated.



Use of estimates: The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company uses estimates based on the best information available in recording transactions and balances resulting from operations.  Actual results could differ from those estimates. The Company’s estimates consist principally of reserves for doubtful accounts, sales returns, warranty costs, asset impairment evaluations, accruals for compensation plans, self-insured medical and dental accruals, lower of cost or market inventory adjustments, provisions for income taxes and deferred taxes and depreciable lives of fixed assets.

 

Cash equivalents: For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. As of December 31, 2016, the Company had $10,443,000 in cash and cash equivalents. Of this amount, $3,851,000 was invested in short-term money market funds that are not considered to be bank deposits and are not insured or guaranteed by the federal deposit insurance company (FDIC) or other government agency. These money market funds seek to preserve the value of the investment at $1.00 per share; however, it is possible to lose money investing in these funds. The remainder is operating cash and certificates of deposit which are fully insured through the FDIC.



Investments: Investments consist of certificates of deposit and corporate notes and bonds that are traded on the open market and are classified as available-for-sale at December 31, 2016. Available-for-sale investments are reported at fair value with unrealized gains and losses excluded from operations and reported as a separate component of stockholders’ equity, net of tax (see Accumulated other comprehensive loss below).



Inventories: Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Provision to reduce inventories to the lower of cost or market is made based on a review of excess and obsolete inventories, estimates of future sales, examination of historical consumption rates and the related value of component parts.



Property, plant and equipment: Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method. Depreciation included in cost of sales and selling, general and administrative expenses for continuing operations was $3,609,000, $3,212,000 and $2,375,000 for 2016,  2015 and 2014, respectively. Maintenance and repairs are charged to operations and additions or improvements are capitalized. Items of property sold, retired or otherwise disposed of are removed from the asset and accumulated depreciation accounts and any gains or losses on disposal are reflected in operations.



Intangible Assets: Intangible assets with indefinite useful lives are not amortized, but are tested at least annually for impairment.



Recoverability of long-lived assets: The Company reviews its long-lived assets periodically when impairment indicators exist as required under generally accepted accounting principles. Potential impairment is determined by comparing the carrying value of the assets with expected net cash flows expected to be provided by operating activities of the business or related products.  If the sum of the expected future net cash flows is less than the carrying value, an impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the asset.



Warranty:  The Company reserves for the estimated cost of product warranties at the time revenue is recognized.  We estimate the costs of our warranty obligations based on our warranty policy or applicable contractual warranty, historical experience of known product failure rates, and use of materials and service delivery costs incurred in correcting product failures. Management reviews the estimated warranty liability on a quarterly basis to determine its adequacy. 



The following table presents the changes in the Company’s warranty liability for the years ended December 31, 2016 and 2015, which relate to normal product warranties and a five-year obligation to provide for potential future liabilities for certain network equipment sales:





 

 

 

 

 

 



 

 

 

 

 

 



 

Year Ended December 31



 

 

2016

 

 

2015

Beginning balance

 

$

554,000 

 

$

434,000 

Amounts charged to expense

 

 

147,000 

 

 

231,000 

Actual warranty costs paid

 

 

(101,000)

 

 

(111,000)

Ending balance

 

$

600,000 

 

$

554,000 



Accumulated other comprehensive loss: The components of accumulated other comprehensive loss 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

 

 

(141,000)

 

 

30,000 

 

 

 

 

 

(111,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

$

(704,000)

 

$

17,000 

 

$

 -

 

$

(687,000)



 

 

 

 

 

 

 

 

 

 

 

 



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 subsidiary in the U.K. Refer to Note 7 for further information regarding the pension liability adjustment recognized in income in the first quarter of 2016. The functional currency of Austin Taylor and Net2Edge is the British pound. Assets and liabilities denominated in this foreign currency were translated into U.S. dollars at year-end exchange rates. Revenue and expense transactions were translated using average exchange rates. Suttle Costa Rica uses the U.S. dollar as their functional currency. 



Revenue recognition: The Company’s manufacturing operations (Suttle, Transition Networks and Net2Edge) recognize revenue when the earnings process is complete, evidenced by persuasive evidence of an agreement, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured.  Revenue is recognized for domestic and international sales at the shipping point or delivery to customers, based on the related shipping terms. Risk of loss transfers at the point of shipment or delivery to customers, and the Company has no further obligation after such time. Sales are made directly to customers and through distributors. Payment terms for distributors are consistent with the terms of the Company’s direct customers. The Company records a provision for sales returns, sales incentives and warranty costs at the time of the sale based on historical experience and current trends.


JDL generally records revenue on hardware, software and related equipment sales and installation contracts when the revenue recognition criteria are met and products are installed and accepted by the customer.  JDL records revenue on service contracts on a straight-line basis over the contract period, unless evidence suggests the revenue is earned in a different pattern. Each contract is individually reviewed to determine when the earnings process is complete.



Research and development: Research and development costs consist of outside testing services, equipment and supplies associated with enhancing existing products and developing new products.  Research and development costs are expensed when incurred and totaled $5,366,000 in 2016, $8,291,000 in 2015 and $7,835,000 in 2014.  



Net income per share: Basic net income per common share is based on the weighted average number of common shares outstanding during each year. Diluted net income per common share adjusts for the dilutive effect of potential common shares outstanding. The Company’s only potential common shares outstanding are stock options and shares associated with the long-term incentive compensation plans, which resulted in no dilutive effect for 2016 and 2015 and a dilutive effect of 18,384 shares in 2014. The Company calculates the dilutive effect of outstanding options and unvested shares using the treasury stock method. Due to the net loss in 2016 and 2015, there was no dilutive impact from outstanding stock options or unvested shares. The number of shares not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of common stock during the year for 2014 was 243,427. Options totaling 902,930 would have been excluded from the calculation of diluted earnings per share for year ended December 31, 2016, because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 133,982 shares would not have been included because of unmet performance conditions. Options totaling 691,924 would have been excluded from the calculation of diluted earnings per share for year ended December 31, 2015, because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 95,668 shares would not have been included because of unmet performance conditions.



Share based compensation: The Company accounts for share based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized in income over the requisite service period (generally the vesting period). The estimated fair value of each option is calculated using the Black-Scholes option-pricing model.   



Accounting standards issued:

In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard update on revenue recognition from contracts with customers. The new guidance will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. According to the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. As a result of the FASBs July 2015 deferral of the standards required implementation date, the guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We plan to adopt the modified retrospective approach. We are still evaluating the impact of this adoption and anticipate that the most significant impact will be within our JDL Technologies segment.



In July 2015, the FASB issued an accounting standard on inventory, which simplifies the subsequent measurement of inventory by requiring entities to measure inventory at the lower of cost or net realizable value, except for inventory measured using the last-in, first-out (LIFO) or the retail inventory methods. This standard requires entities to compare the cost of inventory to one measure – net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard is effective for the annual period beginning after December 15, 2016 and interim periods within those annual periods, with early adoption permitted, and is to be applied prospectively. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.



In November 2015, the FASB issued an accounting standard on deferred taxes, which removes the requirement to present deferred tax assets and liabilities as current and noncurrent on the balance sheet based on the classification of the related asset or liability, and instead requires classification of all deferred tax assets and liabilities as noncurrent. This guidance will be effective for interim and annual reporting periods beginning after December 15, 2016, and early adoption is permitted. Other than the prescribed classification of all deferred tax assets and liabilities as noncurrent, the Company does not expect the implementation of this standard to have a material impact on its consolidated financial statements.



In February 2016, the FASB issued new accounting requirements regarding accounting for leases, which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period, and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.



In March 2016, the FASB issued a new accounting standard that will change certain aspects of accounting for share-based payments to employees, including the accounting for income taxes, forfeitures and statutory withholding requirements, as well as classification in the statement of cash flows. The new standard is effective for annual and interim periods beginning after December 15, 2016. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.



In August 2016, the FASB issued new accounting guidance regarding the classification of cash receipts and payments in the Statement of Cash Flows.  This guidance is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the Consolidated Statement of Cash Flows by providing guidance on eight specific cash flow issues.  The new standard is effective retrospectively on January 1, 2018, with early adoption permitted. We have not yet determined the impact this standard will have on our financial condition or results of operations.



Accounting standards adopted:

In April 2015, the FASB issued accounting guidance that changes the presentation of debt issuance costs. The core principle of this revised accounting guidance is that debt issuance costs are not assets, but adjustments to the carrying cost of debt. The Company adopted this guidance in the first quarter of 2016 with no material impact on its consolidated financial statements.



In August 2014, the FASB issued accounting guidance that amended the existing requirements for disclosing information about an entity’s ability to continue as a going concern and explicitly requires management to assess an entity’s  ability to continue as a going concern and to provide related footnote disclosure in certain circumstances. This guidance was effective for annual periods ending after December 15, 2016, and annual and interim periods thereafter. The Company adopted this guidance in 2016 and management does not believe there is substantial doubt about the entity’s ability to continue as a going concern.




Summary Of Significant Accounting Policies (Policy)
v3.6.0.2
Summary Of Significant Accounting Policies (Policy)
12 Months Ended
Dec. 31, 2016
Summary Of Significant Accounting Policies [Abstract]  
Description Of Business

Description of business: Communications Systems, Inc. (herein collectively called “CSI,” “our” or the “Company”) is a Minnesota corporation organized in 1969 that operates directly and through its subsidiaries located in the United States, Costa Rica, and the United Kingdom. CSI is principally engaged through its Suttle business unit in the manufacture and sale of connectivity infrastructure products for broadband and voice communications and through its Transition Networks business unit in the manufacture of core media conversion products, Ethernet switches, and other connectivity and data transmission products. 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.



The Company classifies its businesses into four segments: Suttle, which manufactures connectivity infrastructure products for broadband and voice communications; Transition Networks, which designs and markets media conversion products, Ethernet switches, and other connectivity and data transmission products; JDL Technologies, which is an IT managed services provider and value-added reseller; and Net2Edge, which develops products to connect legacy networks to high-speed services. Non-allocated general and administrative expenses are separately accounted for as “Other” in the Company’s segment reporting. Intersegment revenues are eliminated upon consolidation.

Principles Of Consolidation

Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and accounts have been eliminated.

Use Of Estimates

Use of estimates: The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company uses estimates based on the best information available in recording transactions and balances resulting from operations.  Actual results could differ from those estimates. The Company’s estimates consist principally of reserves for doubtful accounts, sales returns, warranty costs, asset impairment evaluations, accruals for compensation plans, self-insured medical and dental accruals, lower of cost or market inventory adjustments, provisions for income taxes and deferred taxes and depreciable lives of fixed assets.

Cash Equivalents

Cash equivalents: For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. As of December 31, 2016, the Company had $10,443,000 in cash and cash equivalents. Of this amount, $3,851,000 was invested in short-term money market funds that are not considered to be bank deposits and are not insured or guaranteed by the federal deposit insurance company (FDIC) or other government agency. These money market funds seek to preserve the value of the investment at $1.00 per share; however, it is possible to lose money investing in these funds. The remainder is operating cash and certificates of deposit which are fully insured through the FDIC.

Investments

Investments: Investments consist of certificates of deposit and corporate notes and bonds that are traded on the open market and are classified as available-for-sale at December 31, 2016. Available-for-sale investments are reported at fair value with unrealized gains and losses excluded from operations and reported as a separate component of stockholders’ equity, net of tax (see Accumulated other comprehensive loss below).

Inventories

Inventories: Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Provision to reduce inventories to the lower of cost or market is made based on a review of excess and obsolete inventories, estimates of future sales, examination of historical consumption rates and the related value of component parts.

Property, Plant And Equipment

Property, plant and equipment: Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method. Depreciation included in cost of sales and selling, general and administrative expenses for continuing operations was $3,609,000, $3,212,000 and $2,375,000 for 2016,  2015 and 2014, respectively. Maintenance and repairs are charged to operations and additions or improvements are capitalized. Items of property sold, retired or otherwise disposed of are removed from the asset and accumulated depreciation accounts and any gains or losses on disposal are reflected in operations.

Intangible Assets

Intangible Assets: Intangible assets with indefinite useful lives are not amortized, but are tested at least annually for impairment.

Recoverability Of Long-Lived Assets

Recoverability of long-lived assets: The Company reviews its long-lived assets periodically when impairment indicators exist as required under generally accepted accounting principles. Potential impairment is determined by comparing the carrying value of the assets with expected net cash flows expected to be provided by operating activities of the business or related products.  If the sum of the expected future net cash flows is less than the carrying value, an impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the asset.

Warranty

Warranty:  The Company reserves for the estimated cost of product warranties at the time revenue is recognized.  We estimate the costs of our warranty obligations based on our warranty policy or applicable contractual warranty, historical experience of known product failure rates, and use of materials and service delivery costs incurred in correcting product failures. Management reviews the estimated warranty liability on a quarterly basis to determine its adequacy. 



The following table presents the changes in the Company’s warranty liability for the years ended December 31, 2016 and 2015, which relate to normal product warranties and a five-year obligation to provide for potential future liabilities for certain network equipment sales:





 

 

 

 

 

 



 

 

 

 

 

 



 

Year Ended December 31



 

 

2016

 

 

2015

Beginning balance

 

$

554,000 

 

$

434,000 

Amounts charged to expense

 

 

147,000 

 

 

231,000 

Actual warranty costs paid

 

 

(101,000)

 

 

(111,000)

Ending balance

 

$

600,000 

 

$

554,000 

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss: The components of accumulated other comprehensive loss 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

 

 

(141,000)

 

 

30,000 

 

 

 

 

 

(111,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

$

(704,000)

 

$

17,000 

 

$

 -

 

$

(687,000)



 

 

 

 

 

 

 

 

 

 

 

 



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 subsidiary in the U.K. Refer to Note 7 for further information regarding the pension liability adjustment recognized in income in the first quarter of 2016. The functional currency of Austin Taylor and Net2Edge is the British pound. Assets and liabilities denominated in this foreign currency were translated into U.S. dollars at year-end exchange rates. Revenue and expense transactions were translated using average exchange rates. Suttle Costa Rica uses the U.S. dollar as their functional currency. 

Revenue Recognition

Revenue recognition: The Company’s manufacturing operations (Suttle, Transition Networks and Net2Edge) recognize revenue when the earnings process is complete, evidenced by persuasive evidence of an agreement, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured.  Revenue is recognized for domestic and international sales at the shipping point or delivery to customers, based on the related shipping terms. Risk of loss transfers at the point of shipment or delivery to customers, and the Company has no further obligation after such time. Sales are made directly to customers and through distributors. Payment terms for distributors are consistent with the terms of the Company’s direct customers. The Company records a provision for sales returns, sales incentives and warranty costs at the time of the sale based on historical experience and current trends.


JDL generally records revenue on hardware, software and related equipment sales and installation contracts when the revenue recognition criteria are met and products are installed and accepted by the customer.  JDL records revenue on service contracts on a straight-line basis over the contract period, unless evidence suggests the revenue is earned in a different pattern. Each contract is individually reviewed to determine when the earnings process is complete.

Research And Development

Research and development: Research and development costs consist of outside testing services, equipment and supplies associated with enhancing existing products and developing new products.  Research and development costs are expensed when incurred and totaled $5,366,000 in 2016, $8,291,000 in 2015 and $7,835,000 in 2014.  

Net Income Per Share

Net income per share: Basic net income per common share is based on the weighted average number of common shares outstanding during each year. Diluted net income per common share adjusts for the dilutive effect of potential common shares outstanding. The Company’s only potential common shares outstanding are stock options and shares associated with the long-term incentive compensation plans, which resulted in no dilutive effect for 2016 and 2015 and a dilutive effect of 18,384 shares in 2014. The Company calculates the dilutive effect of outstanding options and unvested shares using the treasury stock method. Due to the net loss in 2016 and 2015, there was no dilutive impact from outstanding stock options or unvested shares. The number of shares not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of common stock during the year for 2014 was 243,427. Options totaling 902,930 would have been excluded from the calculation of diluted earnings per share for year ended December 31, 2016, because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 133,982 shares would not have been included because of unmet performance conditions. Options totaling 691,924 would have been excluded from the calculation of diluted earnings per share for year ended December 31, 2015, because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 95,668 shares would not have been included because of unmet performance conditions.

Share Based Compensation

Share based compensation: The Company accounts for share based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized in income over the requisite service period (generally the vesting period). The estimated fair value of each option is calculated using the Black-Scholes option-pricing model.

Accounting Standards Issued

Accounting standards issued:

In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard update on revenue recognition from contracts with customers. The new guidance will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. According to the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. As a result of the FASBs July 2015 deferral of the standards required implementation date, the guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We plan to adopt the modified retrospective approach. We are still evaluating the impact of this adoption and anticipate that the most significant impact will be within our JDL Technologies segment.



In July 2015, the FASB issued an accounting standard on inventory, which simplifies the subsequent measurement of inventory by requiring entities to measure inventory at the lower of cost or net realizable value, except for inventory measured using the last-in, first-out (LIFO) or the retail inventory methods. This standard requires entities to compare the cost of inventory to one measure – net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard is effective for the annual period beginning after December 15, 2016 and interim periods within those annual periods, with early adoption permitted, and is to be applied prospectively. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.



In November 2015, the FASB issued an accounting standard on deferred taxes, which removes the requirement to present deferred tax assets and liabilities as current and noncurrent on the balance sheet based on the classification of the related asset or liability, and instead requires classification of all deferred tax assets and liabilities as noncurrent. This guidance will be effective for interim and annual reporting periods beginning after December 15, 2016, and early adoption is permitted. Other than the prescribed classification of all deferred tax assets and liabilities as noncurrent, the Company does not expect the implementation of this standard to have a material impact on its consolidated financial statements.



In February 2016, the FASB issued new accounting requirements regarding accounting for leases, which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period, and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.



In March 2016, the FASB issued a new accounting standard that will change certain aspects of accounting for share-based payments to employees, including the accounting for income taxes, forfeitures and statutory withholding requirements, as well as classification in the statement of cash flows. The new standard is effective for annual and interim periods beginning after December 15, 2016. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.



In August 2016, the FASB issued new accounting guidance regarding the classification of cash receipts and payments in the Statement of Cash Flows.  This guidance is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the Consolidated Statement of Cash Flows by providing guidance on eight specific cash flow issues.  The new standard is effective retrospectively on January 1, 2018, with early adoption permitted. We have not yet determined the impact this standard will have on our financial condition or results of operations.

Accounting Standards Adopted

Accounting standards adopted:

In April 2015, the FASB issued accounting guidance that changes the presentation of debt issuance costs. The core principle of this revised accounting guidance is that debt issuance costs are not assets, but adjustments to the carrying cost of debt. The Company adopted this guidance in the first quarter of 2016 with no material impact on its consolidated financial statements.



In August 2014, the FASB issued accounting guidance that amended the existing requirements for disclosing information about an entity’s ability to continue as a going concern and explicitly requires management to assess an entity’s  ability to continue as a going concern and to provide related footnote disclosure in certain circumstances. This guidance was effective for annual periods ending after December 15, 2016, and annual and interim periods thereafter. The Company adopted this guidance in 2016 and management does not believe there is substantial doubt about the entity’s ability to continue as a going concern.


Summary Of Significant Accounting Policies (Tables)
v3.6.0.2
Summary Of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2016
Summary Of Significant Accounting Policies [Abstract]  
Schedule Of Warranty



 

 

 

 

 

 



 

 

 

 

 

 



 

Year Ended December 31



 

 

2016

 

 

2015

Beginning balance

 

$

554,000 

 

$

434,000 

Amounts charged to expense

 

 

147,000 

 

 

231,000 

Actual warranty costs paid

 

 

(101,000)

 

 

(111,000)

Ending balance

 

$

600,000 

 

$

554,000 



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

 

 

(141,000)

 

 

30,000 

 

 

 

 

 

(111,000)

Reclassification adjustments into income

 

 

4,238,000 

 

 

 

 

 

(4,148,000)

 

 

90,000 



 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

$

(704,000)

 

$

17,000 

 

$

 -

 

$

(687,000)



 

 

 

 

 

 

 

 

 

 

 

 




Summary Of Significant Accounting Policies (Narrative) (Details)
v3.6.0.2
Summary Of Significant Accounting Policies (Narrative) (Details)
12 Months Ended
Dec. 31, 2016
USD ($)
segment
$ / shares
shares
Dec. 31, 2015
USD ($)
shares
Dec. 31, 2014
USD ($)
shares
Dec. 31, 2013
USD ($)
Summary Of Significant Accounting Policies [Line Items]        
Number of segments | segment 4      
Cash and cash equivalents $ 10,443,274 $ 9,812,737 $ 13,736,857 $ 20,059,120
Money market funds $ 3,851,000      
Value of the investment in short-term money market funds sought to be preserved (in dollars per share) | $ / shares $ 1.00      
Depreciation $ 3,609,000 3,212,000 2,375,000  
Product warranty period 5 years      
Foreign currency translation loss $ 4,238,497      
Research and development costs $ 5,366,000 $ 8,291,000 $ 7,835,000  
Dilutive shares | shares     18,384  
Shares not included in the computation of diluted earnings per share | shares     243,427  
Employee Stock Option [Member]        
Summary Of Significant Accounting Policies [Line Items]        
Shares not included in the computation of diluted earnings per share | shares 902,930 691,924    
Deferred Stock Awards [Member]        
Summary Of Significant Accounting Policies [Line Items]        
Shares not included in the computation of diluted earnings per share | shares 133,982 95,668    

Summary Of Significant Accounting Policies (Schedule Of Warranty) (Details)
v3.6.0.2
Summary Of Significant Accounting Policies (Schedule Of Warranty) (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Summary Of Significant Accounting Policies [Abstract]    
Beginning Balance $ 554 $ 434
Amounts charged to expense 147 231
Actual warranty costs paid (101) (111)
Ending balance $ 600 $ 554

Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Loss) (Details)
v3.6.0.2
Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Loss) (Details)
12 Months Ended
Dec. 31, 2016
USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE $ 72,184,691
BALANCE 61,632,692
Foreign Currency Translation [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (4,801,000)
Net current period change (141,000)
Reclassification adjustments into income 4,238,000
BALANCE (704,000)
Unrealized (Loss)/Gain On Securities [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (13,000)
Net current period change 30,000
Reclassification adjustments into income
BALANCE 17,000
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 Income (Loss) [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (666,382)
Net current period change (111,000)
Reclassification adjustments into income 90,000
BALANCE $ (686,661)

Cash Equivalents And Investments
v3.6.0.2
Cash Equivalents And Investments
12 Months Ended
Dec. 31, 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 equivalents or short and long term investments as of December 31, 2016 and December 31, 2015:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016



Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

3,851,000 

 

$

 -

 

$

 -

 

$

3,851,000 

 

$

3,851,000 

 

$

 

 

$

 

Subtotal

 

3,851,000 

 

 

 -

 

 

 -

 

 

3,851,000 

 

 

3,851,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

4,291,000 

 

 

4,000 

 

 

(1,000)

 

 

4,294,000 

 

 

 -

 

 

4,294,000 

 

 

 -

Corporate Notes/Bonds

 

1,511,000 

 

 

 -

 

 

 -

 

 

1,511,000 

 

 

 -

 

 

1,511,000 

 

 

 -

Subtotal

 

5,802,000 

 

 

4,000 

 

 

(1,000)

 

 

5,805,000 

 

 

 -

 

 

5,805,000 

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

9,653,000 

 

$

4,000 

 

$

(1,000)

 

$

9,656,000 

 

$

3,851,000 

 

$

5,805,000 

 

$

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 indicated above to be temporary in nature. The Company intends to hold the investments until it can recover the full principal amount and has the ability to do so based on other sources of liquidity. The Company expects such recoveries to occur prior to the contractual maturities.  All unrealized losses as of December 31, 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 December 31, 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 December 31, 2016:  





 

 

 

 

 

 



 

 

 

 

 

 



 

Amortized Cost

 

Estimated Market Value



 

 

 

 

Due within one year

 

$  

5,802,000 

 

$

5,805,000 

Due after one year through five years

 

 

 

 



 

5,802,000 

 

$

5,805,000 



The Company did not recognize any gross realized gains or gross realized losses during the years ending December 31, 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 statements of income.


Cash Equivalents And Investments (Tables)
v3.6.0.2
Cash Equivalents And Investments (Tables)
12 Months Ended
Dec. 31, 2016
Cash Equivalents And Investments [Abstract]  
Schedule Of Cash And Available-For-Sale Securities



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016