Document And Entity Information
v3.8.0.1
Document And Entity Information - USD ($)
12 Months Ended
Dec. 31, 2017
Mar. 01, 2018
Jun. 30, 2017
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2017    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2017    
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     $ 30,627,000
Entity Common Stock, Shares Outstanding   8,982,169  

Consolidated Balance Sheets
v3.8.0.1
Consolidated Balance Sheets - USD ($)
Dec. 31, 2017
Dec. 31, 2016
CURRENT ASSETS:    
Cash and cash equivalents $ 12,453,663 $ 10,443,274
Investments 5,540,744 5,805,276
Trade accounts receivable, less allowance for doubtful accounts of $106,000 and $77,000, respectively 12,183,217 14,552,191
Inventories 13,984,428 22,204,902
Prepaid income taxes 493,834 1,400,118
Other current assets 810,532 967,332
TOTAL CURRENT ASSETS 45,466,418 55,373,093
PROPERTY, PLANT AND EQUIPMENT, net 12,624,730 15,719,403
OTHER ASSETS:    
Goodwill   1,462,503
Deferred income taxes 38,136  
Other assets 16,977 622,017
TOTAL OTHER ASSETS 55,113 2,084,520
TOTAL ASSETS 58,146,261 73,177,016
CURRENT LIABILITIES:    
Accounts payable 4,554,683 6,953,710
Accrued compensation and benefits 2,422,083 2,149,973
Other accrued liabilities 1,586,473 1,851,938
Dividends payable 397,151 412,542
TOTAL CURRENT LIABILITIES 8,960,390 11,368,163
LONG TERM LIABILITIES:    
Long-term compensation plans 11,079 16,299
Uncertain tax positions 4,065 106,864
Deferred income taxes   52,998
TOTAL LONG-TERM LIABILITIES 15,144 176,161
COMMITMENTS AND CONTINGENCIES (Footnote 7)
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 share authorized; 8,973,708 and 8,877,379 shares issued and outstanding, respectively 448,685 443,869
Additional paid-in capital 42,006,750 41,279,281
Retained earnings 7,328,671 20,596,203
Accumulated other comprehensive loss (613,379) (686,661)
TOTAL STOCKHOLDERS' EQUITY 49,170,727 61,632,692
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 58,146,261 $ 73,177,016

Consolidated Balance Sheets (Parenthetical)
v3.8.0.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
Dec. 31, 2017
Dec. 31, 2016
Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 106,000 $ 77,000
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 8,973,708 8,877,379
Common stock, shares outstanding 8,973,708 8,877,379

Consolidated Statements Of Loss And Comprehensive Loss
v3.8.0.1
Consolidated Statements Of Loss And Comprehensive Loss - USD ($)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Consolidated Statements Of Loss And Comprehensive Loss [Abstract]    
Sales $ 82,322,618 $ 99,352,934
Cost of sales 61,486,379 72,771,393
Gross profit 20,836,239 26,581,541
Operating expenses:    
Selling, general and administrative expenses 28,699,138 35,185,924
Additional minimum pension liability adjustments   (4,147,836)
Impairment loss 1,617,389  
Restructuring expense 2,284,541  
Total operating expenses 32,601,068 31,038,088
Operating loss (11,764,829) (4,456,547)
Other (expenses) income:    
Investment and other income 52,992 208,564
Gain (Loss) on sale of assets (76,870) 749,509
Interest and other expense (71,428) (119,627)
Foreign currency translation loss   (4,238,497)
Other (expense) income, net (95,306) (3,400,051)
Loss from operations before income taxes (11,860,135) (7,856,598)
Income tax (benefit) expense (34,503) 256,950
Net loss (11,825,632) (8,113,548)
Other comprehensive income (loss), net of tax:    
Additional minimum pension liability adjustments   (4,147,836)
Unrealized (losses)/gains on available-for-sale securities (4,566) 29,736
Foreign currency translation adjustment 77,848 4,097,821
Total other comprehensive income (loss) 73,282 (20,279)
Comprehensive loss $ (11,752,350) $ (8,133,827)
Basic net loss per share: $ (1.32) $ (0.92)
Diluted net loss per share: $ (1.32) $ (0.92)
Weighted Average Basic Shares Outstanding 8,942,523 8,831,782
Weighted Average Dilutive Shares Outstanding 8,942,523 8,831,782

Consolidated Statements Of Changes In Stockholders' Equity
v3.8.0.1
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, 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     (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        
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 $ (197) (18,276) (8,258)   (26,731)
Other share retirements, Shares (3,942)        
Shareholder dividends     (3,566,052)   (3,566,052)
Other comprehensive income (loss)       (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        
Net loss     (11,825,632)   (11,825,632)
Issuance of common stock under Employee Stock Purchase Plan $ 1,183 103,100     104,283
Issuance of common stock under Employee Stock Purchase Plan, Shares 23,660        
Issuance of common stock to Employee Stock Ownership Plan $ 2,362 216,396     218,758
Issuance of common stock to Employee Stock Ownership Plan, Shares 47,248        
Issuance of common stock under Executive Stock Plan $ 1,374 0     1,374
Issuance of common stock under Executive Stock Plan, Shares 27,471        
Share based compensation   417,489     417,489
Other share retirements $ (103) (9,516) 1,007   (8,612)
Other share retirements, Shares (2,050)        
Shareholder dividends     (1,442,907)   (1,442,907)
Other comprehensive income (loss)       73,282 73,282
BALANCE at Dec. 31, 2017 $ 448,685 $ 42,006,750 $ 7,328,671 $ (613,379) $ 49,170,727
BALANCE, Shares at Dec. 31, 2017 8,973,708        

Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical)
v3.8.0.1
Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical) - $ / shares
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Retained Earnings [Member]    
Shareholder dividends per share $ 0.16 $ 0.40

Consolidated Statements Of Cash Flows
v3.8.0.1
Consolidated Statements Of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (11,825,632) $ (8,113,548)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 3,186,458 3,683,009
Share based compensation 417,489 631,875
Deferred taxes (91,134) (8,456)
Impairment loss 1,617,389  
Change in fair value of acquisition-related contingent consideration   (142,234)
Loss/(gain) on sale of assets 582,317 (749,509)
Changes in assets and liabilities:    
Trade accounts receivables 2,393,310 3,249,449
Inventories 8,268,676 2,682,835
Prepaid income taxes 908,513 1,567,676
Other assets 595,869 126,031
Accounts payable (2,499,232) (1,178,120)
Accrued compensation and benefits 482,324 (406,608)
Other accrued liabilities (283,628) (107,726)
Income taxes payable (102,799) (80,871)
Other   61,558
Net cash provided by operating activities 3,649,920 1,215,361
CASH FLOWS FROM INVESTING ACTIVITIES:    
Capital expenditures (773,367) (2,286,027)
Purchases of investments (6,043,715)  
Proceeds from the sale of fixed assets 219,888 974,860
Proceeds from the sale of investments 6,303,681 5,746,633
Net cash (used in) provided by investing activities (293,513) 4,435,466
CASH FLOWS FROM FINANCING ACTIVITIES:    
Borrowing against line of credit   4,894,046
Payments against line of credit   (4,894,046)
Cash dividends paid (1,458,298) (4,628,402)
Mortgage principal payments   (103,603)
Proceeds from issuance of common stock, net of shares withheld 97,045 132,747
Payment of contingent consideration related to acquisition   (300,000)
Net cash used in financing activities (1,361,253) (4,899,258)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH 15,235 (121,032)
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,010,389 630,537
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 10,443,274 9,812,737
CASH AND CASH EQUIVALENTS AT END OF YEAR 12,453,663 10,443,274
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Income taxes refunded (693,113) (1,232,979)
Interest paid 38,851 43,630
Dividends declared not paid 397,151 412,542
Capital expenditures in accounts payable $ 90,623 $ 6,621

Summary Of Significant Accounting Policies
v3.8.0.1
Summary Of Significant Accounting Policies
12 Months Ended
Dec. 31, 2017
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 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 and sale 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 networks and services.



The Company classifies its businesses into four segments that correspond to these four business units. 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, 2017, the Company had $12,454,000 in cash and cash equivalents. Of this amount, $6,193,000 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, corporate notes and bonds, and commercial paper that are traded on the open market and are classified as available-for-sale at December 31, 2017. 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 net realizable value. Cost is determined by the first-in, first-out method. Provision to reduce inventories to the lower of cost or net realizable value 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 $3,156,000 and  $3,609,000 for 2017 and 2016, 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, 2017 and 2016, 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



 

 

2017

 

 

2016

Beginning balance

 

$

600,000 

 

$

554,000 

Amounts charged to expense

 

 

93,000 

 

 

147,000 

Actual warranty costs paid

 

 

(90,000)

 

 

(101,000)

Ending balance

 

$

603,000 

 

$

600,000 



Accumulated other comprehensive loss: The components of accumulated other comprehensive loss are as follows:





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Foreign Currency Translation

 

Unrealized (loss)/gain on securities

 

Accumulated Other Comprehensive Loss

December 31, 2016

 

$

(704,000)

 

$

17,000 

 

$

(687,000)



 

 

 

 

 

 

 

 

 

Net current period change

 

 

79,000 

 

 

(5,000)

 

 

74,000 



 

 

 

 

 

 

 

 

 

December 31, 2017

 

$

(625,000)

 

$

12,000 

 

$

(613,000)



 

 

 

 

 

 

 

 

 



The Company recognized $4,238,000 in foreign currency translation losses within the income statement during the first quarter of 2016 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 used 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 $3,639,000 in 2017 and  $5,366,000 in 2016.  



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 2017 and 2016. The Company calculates the dilutive effect of outstanding options and unvested shares using the treasury stock method. Due to the net loss in 2017 and 2016, there was no dilutive impact from outstanding stock options or unvested shares. Options totaling 1,144,159 would have been excluded from the calculation of diluted earnings per share for year ended December 31, 2017, because the exercise price was greater than the average market price of common stock during the year and deferred stock awards totaling 181,224 shares would not have been included because of unmet performance conditions. 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 year and deferred stock awards totaling 133,982 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. Under 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 these goods or services. Due to the FASB’s July 2015 deferral of the standard’s required implementation date, the guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The Company will adopt the accounting standard using the modified retrospective transition approach. The modified retrospective transition approach will recognize any changes from the beginning of the year of initial application (2018) through retained earnings with no restatement of comparative periods.

The Company established an implementation team and engaged a third-party consultant to assist with our assessment of the impact of the new revenue guidance on our operations, consolidated financial statements and related disclosures and our implementation of the new standard. The Company completed an implementation plan that included (i) analyzing the new standard’s impact on the Company's contract portfolio; (ii) surveying the Company's businesses and various revenue streams; (iii) completing contract reviews; (iv) comparing its historical accounting policies and practices to the requirements of the new guidance; (v) identifying potential differences from applying the requirements of the new guidance to its contracts; and (vi) updating its accounting policy. The Company has completed the process of evaluating controls and new disclosure requirements and identifying and implementing appropriate changes to its business processes and systems to support recognition and disclosure under the new guidance.

Based on the Company’s analysis of open contracts as of the adoption date, there are no material impacts on the timing or amount of revenue recognized for product sales, which are primarily included within the Company’s Suttle and Transition Networks business units, because these contracts include only point-in-time performance obligations which are fully satisfied within the same reporting period, consistent with current revenue recognition. To the extent that future contracts include multiple performance obligations that are not fully satisfied and one or more were not priced at its standalone selling price (“SSP”), the Company will be required to perform an allocation of the transaction price which may result in a difference in the amount of revenue recognized in any period. There will also be no material change in the timing and amount of revenue recognized for service-related performance obligations that are satisfied over time within the Company’s JDL Technologies business unit. The Company also determined that the nature of its promise to its customers in certain contracts within its JDL Technologies business unit is to arrange for a third party to provide underlying goods or services (i.e., the Company is the agent in the transaction). Revenue allocated to these performance obligations will be recognized on a net basis, however, no such contracts were open as of the adoption date.



The Company adopted various practical expedients and policy elections related to the accounting for significant finance components, sales taxes, shipping and handling, costs to obtain a contract and immaterial promised goods or services, which will mitigate certain impacts of adopting this new standard.



The new standard requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows from customer contracts, specifically related to disaggregated revenue, contract balances and performance obligations. Additionally, as part of the Company’s implementation of the new standard, the Company implemented new internal controls to address risks associated with applying the five-step model, specifically related to judgments made in connection to performance obligations, estimated standalone selling prices and estimating variable consideration. The Company has also established monitoring controls to identify new sales arrangements and changes in its business environment that could potentially impact its current accounting assessment.



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 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.



Accounting standards adopted:

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 adopted this standard in the first quarter of 2017 with no 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. The Company adopted this guidance in the first quarter of 2017 and other than the prescribed classification of all deferred tax assets and liabilities as noncurrent, there was no material impact on its consolidated financial statements.



In March 2016, the FASB issued a new accounting standard that changed 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 adopted this standard during the first quarter of 2017 with no material impact on our financial condition or results of operations.



In January 2017, the FASB issued new accounting guidance regarding the simplification of the test for goodwill impairment. The new standard eliminates the quantitative goodwill impairment analysis requirement to determine the fair value of individual assets and liabilities of a reporting unit to determine the amount of any goodwill impairment and instead permits an entity to recognize goodwill impairment loss as the excess of a reporting unit’s carrying value over the estimated fair value of the reporting unit, to the extent this amount does not exceed the carrying amount of goodwill. The new guidance continues to allow an entity to perform a qualitative assessment over goodwill impairment indicators in lieu of a quantitative assessment in certain situations. The standard will be effective for annual and interim periods beginning January 1, 2020, with early adoption permitted. The Company adopted this standard during 2017. As noted below in Note 5, the Company analyzed the reporting unit that had the goodwill and also analyzed the Company as a whole, including the Company’s four separate reporting units. Based on this analysis, the Company determined that the book value exceeded the overall fair value of the reporting units and the Company’s overall market value. As a result, the Company recorded a goodwill impairment charge totaling $1,463,000 during the second quarter of 2017.


Summary Of Significant Accounting Policies (Policy)
v3.8.0.1
Summary Of Significant Accounting Policies (Policy)
12 Months Ended
Dec. 31, 2017
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 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 and sale 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 networks and services.



The Company classifies its businesses into four segments that correspond to these four business units. 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, 2017, the Company had $12,454,000 in cash and cash equivalents. Of this amount, $6,193,000 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, corporate notes and bonds, and commercial paper that are traded on the open market and are classified as available-for-sale at December 31, 2017. 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 net realizable value. Cost is determined by the first-in, first-out method. Provision to reduce inventories to the lower of cost or net realizable value 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 $3,156,000 and  $3,609,000 for 2017 and 2016, 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, 2017 and 2016, 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



 

 

2017

 

 

2016

Beginning balance

 

$

600,000 

 

$

554,000 

Amounts charged to expense

 

 

93,000 

 

 

147,000 

Actual warranty costs paid

 

 

(90,000)

 

 

(101,000)

Ending balance

 

$

603,000 

 

$

600,000 

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

 

Accumulated Other Comprehensive Loss

December 31, 2016

 

$

(704,000)

 

$

17,000 

 

$

(687,000)



 

 

 

 

 

 

 

 

 

Net current period change

 

 

79,000 

 

 

(5,000)

 

 

74,000 



 

 

 

 

 

 

 

 

 

December 31, 2017

 

$

(625,000)

 

$

12,000 

 

$

(613,000)



 

 

 

 

 

 

 

 

 



The Company recognized $4,238,000 in foreign currency translation losses within the income statement during the first quarter of 2016 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 used 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 $3,639,000 in 2017 and  $5,366,000 in 2016.  

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 2017 and 2016. The Company calculates the dilutive effect of outstanding options and unvested shares using the treasury stock method. Due to the net loss in 2017 and 2016, there was no dilutive impact from outstanding stock options or unvested shares. Options totaling 1,144,159 would have been excluded from the calculation of diluted earnings per share for year ended December 31, 2017, because the exercise price was greater than the average market price of common stock during the year and deferred stock awards totaling 181,224 shares would not have been included because of unmet performance conditions. 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 year and deferred stock awards totaling 133,982 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. Under 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 these goods or services. Due to the FASB’s July 2015 deferral of the standard’s required implementation date, the guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The Company will adopt the accounting standard using the modified retrospective transition approach. The modified retrospective transition approach will recognize any changes from the beginning of the year of initial application (2018) through retained earnings with no restatement of comparative periods.

The Company established an implementation team and engaged a third-party consultant to assist with our assessment of the impact of the new revenue guidance on our operations, consolidated financial statements and related disclosures and our implementation of the new standard. The Company completed an implementation plan that included (i) analyzing the new standard’s impact on the Company's contract portfolio; (ii) surveying the Company's businesses and various revenue streams; (iii) completing contract reviews; (iv) comparing its historical accounting policies and practices to the requirements of the new guidance; (v) identifying potential differences from applying the requirements of the new guidance to its contracts; and (vi) updating its accounting policy. The Company has completed the process of evaluating controls and new disclosure requirements and identifying and implementing appropriate changes to its business processes and systems to support recognition and disclosure under the new guidance.

Based on the Company’s analysis of open contracts as of the adoption date, there are no material impacts on the timing or amount of revenue recognized for product sales, which are primarily included within the Company’s Suttle and Transition Networks business units, because these contracts include only point-in-time performance obligations which are fully satisfied within the same reporting period, consistent with current revenue recognition. To the extent that future contracts include multiple performance obligations that are not fully satisfied and one or more were not priced at its standalone selling price (“SSP”), the Company will be required to perform an allocation of the transaction price which may result in a difference in the amount of revenue recognized in any period. There will also be no material change in the timing and amount of revenue recognized for service-related performance obligations that are satisfied over time within the Company’s JDL Technologies business unit. The Company also determined that the nature of its promise to its customers in certain contracts within its JDL Technologies business unit is to arrange for a third party to provide underlying goods or services (i.e., the Company is the agent in the transaction). Revenue allocated to these performance obligations will be recognized on a net basis, however, no such contracts were open as of the adoption date.



The Company adopted various practical expedients and policy elections related to the accounting for significant finance components, sales taxes, shipping and handling, costs to obtain a contract and immaterial promised goods or services, which will mitigate certain impacts of adopting this new standard.



The new standard requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows from customer contracts, specifically related to disaggregated revenue, contract balances and performance obligations. Additionally, as part of the Company’s implementation of the new standard, the Company implemented new internal controls to address risks associated with applying the five-step model, specifically related to judgments made in connection to performance obligations, estimated standalone selling prices and estimating variable consideration. The Company has also established monitoring controls to identify new sales arrangements and changes in its business environment that could potentially impact its current accounting assessment.



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 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.

Accounting Standards Adopted

Accounting standards adopted:

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 adopted this standard in the first quarter of 2017 with no 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. The Company adopted this guidance in the first quarter of 2017 and other than the prescribed classification of all deferred tax assets and liabilities as noncurrent, there was no material impact on its consolidated financial statements.



In March 2016, the FASB issued a new accounting standard that changed 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 adopted this standard during the first quarter of 2017 with no material impact on our financial condition or results of operations.



In January 2017, the FASB issued new accounting guidance regarding the simplification of the test for goodwill impairment. The new standard eliminates the quantitative goodwill impairment analysis requirement to determine the fair value of individual assets and liabilities of a reporting unit to determine the amount of any goodwill impairment and instead permits an entity to recognize goodwill impairment loss as the excess of a reporting unit’s carrying value over the estimated fair value of the reporting unit, to the extent this amount does not exceed the carrying amount of goodwill. The new guidance continues to allow an entity to perform a qualitative assessment over goodwill impairment indicators in lieu of a quantitative assessment in certain situations. The standard will be effective for annual and interim periods beginning January 1, 2020, with early adoption permitted. The Company adopted this standard during 2017. As noted below in Note 5, the Company analyzed the reporting unit that had the goodwill and also analyzed the Company as a whole, including the Company’s four separate reporting units. Based on this analysis, the Company determined that the book value exceeded the overall fair value of the reporting units and the Company’s overall market value. As a result, the Company recorded a goodwill impairment charge totaling $1,463,000 during the second quarter of 2017.


Summary Of Significant Accounting Policies (Tables)
v3.8.0.1
Summary Of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2017
Summary Of Significant Accounting Policies [Abstract]  
Schedule Of Warranty



 

 

 

 

 

 



 

 

 

 

 

 



 

Year Ended December 31



 

 

2017

 

 

2016

Beginning balance

 

$

600,000 

 

$

554,000 

Amounts charged to expense

 

 

93,000 

 

 

147,000 

Actual warranty costs paid

 

 

(90,000)

 

 

(101,000)

Ending balance

 

$

603,000 

 

$

600,000 



Components Of Accumulated Other Comprehensive Loss



 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Foreign Currency Translation

 

Unrealized (loss)/gain on securities

 

Accumulated Other Comprehensive Loss

December 31, 2016

 

$

(704,000)

 

$

17,000 

 

$

(687,000)



 

 

 

 

 

 

 

 

 

Net current period change

 

 

79,000 

 

 

(5,000)

 

 

74,000 



 

 

 

 

 

 

 

 

 

December 31, 2017

 

$

(625,000)

 

$

12,000 

 

$

(613,000)



 

 

 

 

 

 

 

 

 




Summary Of Significant Accounting Policies (Narrative) (Details)
v3.8.0.1
Summary Of Significant Accounting Policies (Narrative) (Details)
3 Months Ended 12 Months Ended
Jun. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
segment
$ / shares
shares
Dec. 31, 2016
USD ($)
shares
Summary Of Significant Accounting Policies [Line Items]      
Number of segments | segment   4  
Money market funds   $ 6,193,000  
Value of the investment in short-term money market funds sought to be preserved (in dollars per share) | $ / shares   $ 1.00  
Depreciation   $ 3,156,000 $ 3,609,000
Product warranty period   5 years  
Foreign currency translation loss     4,238,497
Research and development costs   $ 3,639,000 5,366,000
Dilutive effect   0 $ 0
Impairment charge $ 1,463,000 $ 1,617,389  
Employee Stock Option [Member]      
Summary Of Significant Accounting Policies [Line Items]      
Shares not included in the computation of diluted earnings per share | shares   1,144,159 902,930
Deferred Stock Awards [Member]      
Summary Of Significant Accounting Policies [Line Items]      
Shares not included in the computation of diluted earnings per share | shares   181,224 133,982

Summary Of Significant Accounting Policies (Schedule Of Warranty) (Details)
v3.8.0.1
Summary Of Significant Accounting Policies (Schedule Of Warranty) (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Summary Of Significant Accounting Policies [Abstract]    
Beginning balance $ 600 $ 554
Amounts charged to expense 93 147
Actual warranty costs paid (90) (101)
Ending balance $ 603 $ 600

Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Loss) (Details)
v3.8.0.1
Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Loss) (Details)
12 Months Ended
Dec. 31, 2017
USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE $ 61,632,692
BALANCE 49,170,727
Foreign Currency Translation [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (704,000)
Net current period change 79,000
BALANCE (625,000)
Unrealized (Loss)/Gain On Securities [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE 17,000
Net current period change (5,000)
BALANCE 12,000
Accumulated Other Comprehensive Income (Loss) [Member]  
Accumulated Other Comprehensive Income (Loss) [Line Items]  
BALANCE (686,661)
Net current period change 74,000
BALANCE $ (613,379)

Cash Equivalents And Investments
v3.8.0.1
Cash Equivalents And Investments
12 Months Ended
Dec. 31, 2017
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, 2017 and December 31, 2016:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017



Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

6,193,000 

 

$

 -

 

$

 -

 

$

6,193,000 

 

$

6,193,000 

 

$

 -

 

$

 -

Subtotal

 

6,193,000 

 

 

 -

 

 

 -

 

 

6,193,000 

 

 

6,193,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Paper

 

997,000 

 

 

 -

 

 

 -

 

 

997,000 

 

 

 -

 

 

997,000 

 

 

 -

Corporate Notes/Bonds

 

4,545,000 

 

 

 -

 

 

(1,000)

 

 

4,544,000 

 

 

 -

 

 

4,544,000 

 

 

 -

Subtotal

 

5,542,000 

 

 

 -

 

 

(1,000)

 

 

5,541,000 

 

 

 -

 

 

5,541,000 

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

11,735,000 

 

$

 -

 

$

(1,000)

 

$

11,734,000 

 

$

6,193,000 

 

$

5,541,000 

 

$

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

$

 -





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, 2017 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, 2017.

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, 2017:  





 

 

 

 

 

 



 

 

 

 

 

 



 

Amortized Cost

 

Estimated Market Value



 

 

 

 

Due within one year

 

$  

5,542,000 

 

$

5,541,000 

Due after one year through five years

 

 

 

 



 

5,542,000 

 

$

5,541,000 



The Company did not recognize any gross realized gains or gross realized losses during the years ending December 31, 2017 and 2016, respectively. If the Company had realized gains or losses, they would be included within investment and other income in the accompanying consolidated statements of loss.


Cash Equivalents And Investments (Tables)
v3.8.0.1
Cash Equivalents And Investments (Tables)
12 Months Ended
Dec. 31, 2017
Cash Equivalents And Investments [Abstract]  
Schedule Of Cash Equivalents And Available-For-Sale Securities



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017



Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

6,193,000 

 

$

 -

 

$

 -

 

$

6,193,000 

 

$

6,193,000 

 

$

 -

 

$

 -

Subtotal

 

6,193,000 

 

 

 -

 

 

 -

 

 

6,193,000 

 

 

6,193,000 

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Paper

 

997,000 

 

 

 -

 

 

 -

 

 

997,000 

 

 

 -

 

 

997,000 

 

 

 -

Corporate Notes/Bonds

 

4,545,000 

 

 

 -

 

 

(1,000)

 

 

4,544,000 

 

 

 -

 

 

4,544,000 

 

 

 -

Subtotal

 

5,542,000 

 

 

 -

 

 

(1,000)

 

 

5,541,000 

 

 

 -

 

 

5,541,000 

 

 

 -