Document And Entity Information
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Document And Entity Information (USD $)
12 Months Ended
Dec. 31, 2014
Mar. 01, 2015
Jun. 30, 2014
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2014    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2014    
Entity Registrant Name COMMUNICATIONS SYSTEMS INC    
Entity Central Index Key 0000022701    
Current Fiscal Year End Date --12-31    
Entity Filer Category Accelerated Filer    
Entity Common Stock, Shares Outstanding   8,658,784  
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    
Entity Public Float     $ 84,159,000

Consolidated Balance Sheets
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Consolidated Balance Sheets (USD $)
Dec. 31, 2014
Dec. 31, 2013
CURRENT ASSETS:    
Cash and cash equivalents $ 13,736,857 $ 20,059,120
Investments 4,602,717 5,742,314
Trade accounts receivable, less allowance for doubtful accounts of $22,000 and $69,000, respectively 13,839,662 22,902,323
Inventories 31,109,653 29,111,656
Prepaid income taxes 2,317,688 1,381,502
Other current assets 1,050,000 716,784
Deferred income taxes 3,249,164 3,758,750
TOTAL CURRENT ASSETS 69,905,741 83,672,449
PROPERTY, PLANT AND EQUIPMENT, net 18,153,152 14,941,492
OTHER ASSETS:    
Investments 11,540,261 3,920,978
Funded pension assets 172,405 305,028
Other assets 514,676 692,794
TOTAL OTHER ASSETS 12,227,342 4,918,800
TOTAL ASSETS 100,286,235 103,532,741
CURRENT LIABILITIES:    
Current portion of long-term debt 524,220 489,706
Accounts payable 5,180,631 4,894,869
Accrued compensation and benefits 3,696,930 3,927,728
Accrued consideration   558,801
Other accrued liabilities 2,146,582 1,765,428
Dividends payable 1,446,498 1,436,318
TOTAL CURRENT LIABILITIES 12,994,861 13,072,850
LONG TERM LIABILITIES:    
Uncertain tax positions 77,279 400,846
Deferred income taxes 1,089,994 809,179
Long term debt - mortgage payable 103,603 627,823
TOTAL LONG-TERM LIABILITIES 1,270,876 1,837,848
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 shares authorized; 8,654,756 and 8,553,320 shares issued and outstanding, respectively 432,738 427,666
Additional paid-in capital 38,593,230 37,110,671
Retained earnings 47,689,688 51,323,718
Accumulated other comprehensive loss (695,158) (240,012)
TOTAL STOCKHOLDERS' EQUITY 86,020,498 88,622,043
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 100,286,235 $ 103,532,741

Consolidated Balance Sheets (Parenthetical)
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Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 22,000 $ 69,000
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 8,654,756 8,553,320
Common stock, shares outstanding 8,654,756 8,553,320

Consolidated Statements Of Income (Loss) And Comprehensive Income (Loss)
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Consolidated Statements Of Income (Loss) And Comprehensive Income (Loss) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Consolidated Statements Of Income (Loss) And Comprehensive Income (Loss) [Abstract]      
Sales $ 119,071,439 $ 131,319,510 $ 104,249,654
Costs and expenses:      
Cost of sales 76,912,881 86,420,982 62,752,763
Selling, general and administrative expenses 38,627,801 36,742,869 38,100,773
Impairment loss   5,849,853  
Restructuring expense 237,838 1,149,439  
Total costs and expenses 115,778,520 130,163,143 100,853,536
Operating income 3,292,919 1,156,367 3,396,118
Other income and (expenses):      
Investment and other income 80,392 125,985 75,187
(Loss)/gain on sale of assets (112,242) (73,126) 62,630
Interest and other expense (79,841) (106,101) (136,255)
Other (expense) income, net (111,691) (53,242) 1,562
Income from operations before income taxes 3,181,228 1,103,125 3,397,680
Income tax expense 1,219,355 2,061,013 1,159,566
Net income (loss) 1,961,873 (957,888) 2,238,114
Other comprehensive (loss) income, net of tax:      
Additional minimum pension liability adjustments 155,000 37,000 1,311,000
Unrealized (losses)/gains on available-for-sale securities (42,666) (21,964) 26,223
Foreign currency translation adjustment (567,480) 333,000 (2,032,877)
Total other comprehensive (loss) income (455,146) 348,036 (695,654)
Comprehensive income (loss) $ 1,506,727 $ (609,852) $ 1,542,460
Basic net income (loss) per share: $ 0.23 $ (0.11) $ 0.26
Diluted net income (loss) per share: $ 0.23 $ (0.11) $ 0.26
Weighted Average Basic Shares Outstanding 8,622,032 8,531,073 8,508,497
Weighted Average Dilutive Shares Outstanding 8,640,416 8,531,073 8,518,613

Consolidated Statements Of Changes In Stockholders' Equity
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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, 2011 $ 423,339 $ 35,533,273 $ 61,466,342 $ 107,606 $ 97,530,560
BALANCE, Shares at Dec. 31, 2011 8,466,774        
Net income (loss)     2,238,114   2,238,114
Issuance of common stock under Employee Stock Purchase Plan 692 171,078     171,770
Issuance of common stock under Employee Stock Purchase Plan, Shares 13,849        
Issuance of common stock to Employee Stock Ownership Plan 1,807 506,391     508,198
Issuance of common stock to Employee Stock Ownership Plan, Shares 36,145       44,598
Issuance of common stock under Employee Stock Option Plan 600 84,983     85,583
Issuance of common stock under Employee Stock Option Plan, Shares 12,000        
Issuance of common stock under Executive Stock Plan 808 39,503     40,311
Issuance of common stock under Executive Stock Plan, Shares 16,156        
Tax benefit from non-qualified employee stock options   67,835     67,835
Share-based compensation   302,964     302,964
Purchase of common stock (3,501) (301,509) (452,941)   (757,951)
Purchase of common stock, Shares (70,028)        
Shareholder dividends ($0.64 per share)     (5,496,336)   (5,496,336)
Other comprehensive loss       (695,654) (695,654)
BALANCE at Dec. 31, 2012 423,745 36,404,518 57,755,178 (588,048) 93,995,393
BALANCE, Shares at Dec. 31, 2012 8,474,896        
Net income (loss)     (957,888)   (957,888)
Issuance of common stock under Employee Stock Purchase Plan 849 172,354     173,203
Issuance of common stock under Employee Stock Purchase Plan, Shares 16,977        
Issuance of common stock to Employee Stock Ownership Plan 2,230 461,589     463,819
Issuance of common stock to Employee Stock Ownership Plan, Shares 44,598       32,520
Issuance of common stock under Non-Employee Stock Option Plan 750 109,500     110,250
Issuance of common stock under Non-Employee Stock Option Plan, Shares 15,000        
Issuance of common stock under Executive Stock Plan 92 27,312     27,404
Issuance of common stock under Executive Stock Plan, Shares 1,849        
Tax benefit from non-qualified employee stock options   16,284     16,284
Share-based compensation   (80,886)     (80,886)
Shareholder dividends ($0.64 per share)     (5,473,572)   (5,473,572)
Other comprehensive loss       348,036 348,036
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 income (loss)     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 Non-Employee Stock Option Plan 600 98,760     99,360
Issuance of common stock under Non-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 employee stock options   80,402     80,402
Share-based compensation   784,785     784,785
Other share retirements, Shares (1,957)        
Other share retirements (98) (8,672) (14,052)   (22,822)
Shareholder dividends ($0.64 per share)     (5,581,851)   (5,581,851)
Other comprehensive loss       (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        

Consolidated Statements Of Cash Flows
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Consolidated Statements Of Cash Flows (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net income (loss) $ 1,961,873 $ (957,888) $ 2,238,114
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 2,482,300 2,184,830 2,133,511
Share based compensation 784,785 (80,886) 302,964
Deferred taxes 790,402 (317,727) (631,626)
Impairment loss   5,849,853  
Change in fair value of acquisition-related contingent consideration   (43,898) 85,501
Loss/(gain) on sale of assets 112,242 73,126 (62,630)
Excess tax benefit from share-based payments (80,402) (16,284) (67,835)
Changes in assets and liabilities:      
Trade receivables 9,057,078 (8,207,253) (189,775)
Inventories (2,039,599) 4,647,916 (7,705,772)
Prepaid income taxes (936,186) 732,618 1,776,601
Other assets (282,456) 89,533 252,378
Accounts payable 105,602 (4,342,626) 4,819,481
Accrued compensation and benefits 139,698 994,012 (2,250,647)
Other accrued liabilities 405,424 71,293 (680,171)
Income taxes payable (243,165) 96,704 (15,168)
Other (85,519)   195,244
Net cash provided by operating activities 12,172,077 773,323 200,170
CASH FLOWS FROM INVESTING ACTIVITIES:      
Capital expenditures (5,577,039) (2,699,347) (2,607,958)
Purchases of investments (12,682,351) (4,401,321) (15,010,778)
Proceeds from the sale of fixed assets 51,073 82,078 198,109
Proceeds from the sale of investments 6,160,000 12,794,000 20,456,039
Net cash (used in) provided by investing activities (12,048,317) 5,775,410 3,035,412
CASH FLOWS FROM FINANCING ACTIVITIES:      
Cash dividends paid (5,571,672) (4,099,087) (6,734,466)
Mortgage principal payments (489,706) (457,464) (427,345)
Proceeds from issuance of common stock net of shares withheld 246,119 310,857 297,664
Excess tax benefit from stock-based payments 80,402 16,284 67,835
Payment of contingent consideration related to acquisition (565,647) (161,060) (370,096)
Purchase of common stock     (757,951)
Net cash used in financing activities (6,300,504) (4,390,470) (7,924,359)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH (145,519) 31,145 42,779
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (6,322,263) 2,189,408 (4,645,998)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 20,059,120 17,869,712 22,515,710
CASH AND CASH EQUIVALENTS AT END OF YEAR 13,736,857 20,059,120 17,869,712
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:      
Income taxes paid 1,591,257 1,556,590 87,343
Interest paid 73,860 106,101 138,477
Dividends declared not paid 1,446,498 1,436,318  
Capital expenditures in accounts payable $ 188,564    

Summary Of Significant Accounting Policies
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Summary Of Significant Accounting Policies
12 Months Ended
Dec. 31, 2014
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 modular connecting and wiring devices for voice and data communications, digital subscriber line filters, and structured wiring systems and through its Transition Networks business unit in the manufacture of media and rate conversion products for telecommunications networks. CSI also provides through its JDL Technologies business unit IT solutions including network design, computer infrastructure installations, IT service management, change management, network security and network operations services.

 

The Company classifies its businesses into three segments: Suttle, which manufactures U.S. standard modular connecting and wiring devices for voice and data communications; Transition Networks, which designs and markets media conversion products, ethernet switches, and other connectivity and data transmission products; and JDL Technologies, (JDL), which provides IT services. Effective January 1, 2014, the Company realigned the financial reporting for its business units.  As a result of this realignment, all corporate general and administrative expenses that were previously categorized as “Other” are now included within the three business units as fully allocated costs. There are no material intersegment revenues.

 

Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries.  All material 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, pension liabilities, 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, 2014, the Company had $13,737,000 in cash and cash equivalents. Of this amount, $1,073,000 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, commercial paper, and corporate notes and bonds that are traded on the open market and are classified as available-for-sale at December 31, 2014. 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 $2,375,000, $2,030,000 and $2,058,000 for 2014,  2013 and 2012, 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, 2014 and 2013, 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

 

 

 

2014

 

 

2013

Beginning balance

 

$

564,000 

 

$

590,000 

Amounts charged to expense

 

 

(14,000)

 

 

237,000 

Actual warranty costs paid

 

 

(116,000)

 

 

(263,000)

Ending balance

 

$

434,000 

 

$

564,000 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31

 

 

 

2014

 

 

2013

Minimum pension liability

 

$

1,951,000 

 

$

1,796,000 

Unrealized (loss) gain on available-for-sale investments

 

 

(41,000)

 

 

2,000 

Foreign currency translation

 

 

(2,605,000)

 

 

(2,038,000)

 

 

$

(695,000)

 

$

(240,000)

 

The functional currency of Austin Taylor and Patapsco 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 and Transition China use the U.S. dollar as their functional currency. 

 

Revenue recognition: The Company’s manufacturing operations (Suttle and Transition Networks) 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 $7,835,000 in 2014, $2,760,000 in 2013 and $2,304,000 in 2012.  

 

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 unvested shares, which resulted in a dilutive effect of 18,384 shares, 0 shares and 10,116 shares in 2014,  2013 and 2012, respectively.  The Company calculates the dilutive effect of outstanding options and unvested shares using the treasury stock method. 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,  2013, and 2012 was 243,427,  0 and 80,290, respectively. Due to the net loss in 2013, there was no dilutive impact from outstanding stock options or unvested shares.

 

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. This guidance will be effective for the Company beginning January 1, 2017 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company has not yet selected a transition method and is evaluating the impact of adopting this new accounting standard update on the financial statements and related disclosures.

 

In January 2015, the FASB issued guidance that eliminates from GAAP the concept of an extraordinary item. As a result, an entity will no longer (1) segregate an extraordinary item from the results of ordinary operations; (2) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; and (3) disclose income taxes and earnings-per-share data applicable to an extraordinary item. The new guidance will be effective for us in our first quarter of 2016 and early adoption is permitted. We do not expect the adoption of this standard to have a material effect on our reporting and disclosure.

 

Accounting standards adopted:

There have been no new accounting pronouncements or changes in accounting pronouncements adopted during the period that are of significance or potential significance to the Company.


Cash Equivalents And Investments
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Cash Equivalents And Investments
12 Months Ended
Dec. 31, 2014
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, 2014 and December 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

1,073,000 

 

$

 -

 

$

 -

 

$

1,073,000 

 

$

1,073,000 

 

$

 

 

$

 

Subtotal

 

1,073,000 

 

 

 -

 

 

 -

 

 

1,073,000 

 

 

1,073,000 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

7,414,000 

 

 

1,000 

 

 

(32,000)

 

 

7,383,000 

 

 

 -

 

 

1,920,000 

 

 

5,463,000 

Corporate Notes/Bonds

 

8,777,000 

 

 

6,000 

 

 

(23,000)

 

 

8,760,000 

 

 

 -

 

 

2,683,000 

 

 

6,077,000 

Subtotal

 

16,191,000 

 

 

7,000 

 

 

(55,000)

 

 

16,143,000 

 

 

 -

 

 

4,603,000 

 

 

11,540,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

17,264,000 

 

$

7,000 

 

$

(55,000)

 

$

17,216,000 

 

$

1,073,000 

 

$

4,603,000 

 

$

11,540,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$

5,752,000 

 

$

 -

 

$

 -

 

$

5,752,000 

 

$

5,752,000 

 

$

 

 

$

 

Subtotal

 

5,752,000 

 

 

 -

 

 

 -

 

 

5,752,000 

 

 

5,752,000 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

4,024,000 

 

 

1,000 

 

 

(5,000)

 

 

4,020,000 

 

 

240,000 

 

 

2,583,000 

 

 

1,197,000 

Corporate Notes/Bonds

 

5,861,000 

 

 

23,000 

 

 

(1,000)

 

 

5,883,000 

 

 

 -

 

 

3,159,000 

 

 

2,724,000 

Subtotal

 

9,885,000 

 

 

24,000 

 

 

(6,000)

 

 

9,903,000 

 

 

240,000 

 

 

5,742,000 

 

 

3,921,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

15,637,000 

 

$

24,000 

 

$

(6,000)

 

$

15,655,000 

 

$

5,992,000 

 

$

5,742,000 

 

$

3,921,000 

 

 

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, 2014 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, 2014.

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, 2014:  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Estimated Market Value

 

 

 

 

 

Due within one year

 

$  

4,598,000 

 

$

4,603,000 

Due after one year through five years

 

 

11,593,000 

 

 

11,540,000 

 

 

16,191,000 

 

$

16,143,000 

 

The Company did not recognize any gross realized gains and gross realized losses were immaterial during the years ending December 31, 2014 and 2013, 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.


Inventories
v0.0.0.0
Inventories
12 Months Ended
Dec. 31, 2014
Inventories [Abstract]  
Inventories

NOTE 3 - INVENTORIES

 

Inventories consist of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31

 

 

2014

 

2013

Finished goods

 

$         

19,208,000 

 

$

18,734,000 

Raw and processed materials

 

 

11,902,000 

 

 

10,378,000 

 

 

$

31,110,000 

 

$

29,112,000 

 


Property, Plant And Equipment
v0.0.0.0
Property, Plant And Equipment
12 Months Ended
Dec. 31, 2014
Property, Plant And Equipment [Abstract]  
Property, Plant And Equipment

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment and the estimated useful lives are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated

 

December 31

 

useful life

 

2014

 

2013

Land

 

 

 

 

 

$

3,107,000 

 

$

3,116,000 

Buildings and improvements

7-40 years

 

 

8,523,000 

 

 

8,528,000 

Machinery and equipment

3-15 years

 

 

28,728,000 

 

 

25,408,000 

Furniture and fixtures

5-10 years

 

 

3,490,000 

 

 

4,042,000 

Construction in progress

 

 

 

 

 

 

1,925,000 

 

 

617,000 

 

 

 

 

 

 

 

45,773,000 

 

 

41,711,000 

Less accumulated depreciation

 

 

 

 

 

 

(27,620,000)

 

 

(26,770,000)

 

 

 

 

 

 

$

18,153,000 

 

$

14,941,000 

 


Intangible Assets
v0.0.0.0
Intangible Assets
12 Months Ended
Dec. 31, 2014
Intangible Assets [Abstract]  
Intangible Assets

NOTE 5 –INTANGIBLE ASSETS

The Company’s identifiable intangible assets with finite lives are being amortized over their estimated useful lives and are included within other assets in the consolidated balance sheets and were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

 

Gross Carrying Amount

Accumulated Amortization

Foreign Currency Translation

Net

 

 

 

 

 

 

Trademarks

 

91,000 
(38,000)
(4,000)
49,000 

Customer relationships

 

491,000 
(159,000)
(26,000)
306,000 

Technology

 

229,000 
(149,000)
(11,000)
69,000 

 

 

811,000 
(346,000)
(41,000)
424,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

Gross Carrying Amount

Accumulated Amortization

Foreign Currency Translation

Net

 

 

 

 

 

 

Trademarks

 

82,000 
(17,000)
(11,000)
54,000 

Customer relationships

 

491,000 
(73,000)
(43,000)
375,000 

Technology

 

229,000 
(68,000)
(42,000)
119,000 

 

 

802,000 
(158,000)
(96,000)
548,000 

 

 

 

 

 

 

 

Amortization expense on these identifiable intangible assets was $107,000, $102,000, and $103,000 in 2014, 2013 and 2012 respectively. The amortization expense is included in selling, general and administrative expenses. The estimated future amortization expense for identifiable intangible assets during the next five fiscal years is as follows:

 

 

 

 

 

 

 

 

 

 

Year Ending December 31:

 

 

 

2015

 

$  

101,000 

2016

 

 

83,000 

2017

 

 

58,000 

2018

 

 

53,000 

2019

 

 

47,000 

 


Employee Retirement Benefits
v0.0.0.0
Employee Retirement Benefits
12 Months Ended
Dec. 31, 2014
Employee Retirement Benefits [Abstract]  
Employee Retirement Benefits

NOTE 6 - EMPLOYEE RETIREMENT BENEFITS

 

The Company has an Employee Savings Plan (401(k)) and matches a percentage of employee contributions up to six percent of compensation.  Contributions to the plan in 2014,  2013 and 2012 were $528,000, $457,000, and $471,000, respectively.

 

The Company’s U.K.-based subsidiary Austin Taylor maintains defined benefit pension plans that cover two active employees.  The Company does not provide any other post-retirement benefits to its employees.  The following table summarizes the balance sheet impact, including benefit obligations, assets and funded status of Austin Taylor’s pension plans at December 31, 2014 and 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

 

2013

Change in benefit obligation:

 

 

 

 

 

 

Benefit obligation at the beginning of the year

 

$         

3,340,000 

 

$

5,675,000 

Service cost

 

 

8,000 

 

 

5,000 

Interest cost

 

 

143,000 

 

 

186,000 

Augmentations

 

 

 -

 

 

211,000 

Actuarial losses/(gains)

 

 

363,000 

 

 

(198,000)

Benefits paid

 

 

(78,000)

 

 

(293,000)

Changes due to plan settlement

 

 

 -

 

 

(2,363,000)

Foreign currency (losses)/gains

 

 

(192,000)

 

 

117,000 

Benefit obligation at the end of the year

 

 

3,584,000 

 

 

3,340,000 

 

 

 

 

 

 

 

Change in plan assets:

 

 

 

 

 

 

Fair value of plan assets at beginning of year

 

 

3,645,000 

 

 

5,547,000 

Actual return on plan assets

 

 

340,000 

 

 

343,000 

Employer contributions

 

 

59,000 

 

 

297,000 

Benefits paid

 

 

(78,000)

 

 

(293,000)

Changes due to plan settlement

 

 

 -

 

 

(2,363,000)

Foreign currency (gains)/losses

 

 

(210,000)

 

 

114,000 

Fair value of plan assets at end of year

 

 

3,756,000 

 

 

3,645,000 

 

 

 

 

 

 

 

Funded status at end of year – net asset

 

$

172,000 

 

$

305,000 

 

 

Weighted average assumptions used to determine net periodic pension costs: