Document And Entity Information
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Document And Entity Information
9 Months Ended
Sep. 30, 2012
Nov. 01, 2012
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2012  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2012  
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   8,474,896

Condensed Consolidated Balance Sheets
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Condensed Consolidated Balance Sheets (USD $)
Sep. 30, 2012
Dec. 31, 2011
CURRENT ASSETS:    
Cash and cash equivalents $ 14,764,399 $ 22,515,710
Investments 14,539,329 18,635,601
Trade accounts receivable, less allowance for doubtful accounts of $127,000 and $175,000, respectively 16,595,830 14,461,168
Inventories 28,545,543 25,986,003
Prepaid income taxes 3,002,741 3,893,003
Other current assets 1,031,610 999,863
Deferred income taxes 3,408,446 3,455,047
TOTAL CURRENT ASSETS 81,887,898 89,946,395
PROPERTY, PLANT AND EQUIPMENT, net 14,447,206 14,019,019
OTHER ASSETS:    
Investments 7,063,147 4,883,510
Goodwill 5,958,768 5,990,571
Prepaid pensions 1,084,631 905,552
Other assets 841,978 913,869
TOTAL OTHER ASSETS 14,948,524 12,693,502
TOTAL ASSETS 111,283,628 116,658,916
CURRENT LIABILITIES:    
Current portion of long-term debt 449,741 427,345
Accounts payable 3,621,047 4,398,848
Accrued compensation and benefits 2,657,401 5,870,000
Accrued consideration 535,378 1,002,623
Other accrued liabilities 2,244,214 2,388,867
Dividends payable 1,448,145 1,299,963
TOTAL CURRENT LIABILITIES 10,955,926 15,387,646
LONG TERM LIABILITIES:    
Long-term compensation plans 434,304 283,075
Income taxes payable 314,266 405,673
Deferred income taxes 1,560,286 1,476,969
Long term debt - mortgage payable 1,234,832 1,574,993
TOTAL LONG-TERM LIABILITIES 3,543,688 3,740,710
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; 8,517,212 and 8,466,774 shares issued and outstanding, respectively 425,861 423,339
Additional paid-in capital 36,621,705 35,533,273
Retained earnings 59,308,260 61,466,342
Accumulated other comprehensive income, net of tax 428,188 107,606
TOTAL STOCKHOLDERS' EQUITY 96,784,014 97,530,560
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 111,283,628 $ 116,658,916

Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 127,000 $ 175,000
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 8,517,212 8,466,774
Common stock, shares outstanding 8,517,212 8,466,774

Condensed Consolidated Statements Of Income And Comprehensive Income
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Condensed Consolidated Statements Of Income And Comprehensive Income (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Condensed Consolidated Statements Of Income And Comprehensive Income [Abstract]        
Sales from operations $ 28,687,687 $ 41,984,570 $ 78,492,866 $ 118,437,057
Costs and expenses:        
Cost of sales 17,927,814 25,429,300 47,128,483 70,097,713
Selling, general and administrative expenses 9,053,164 10,071,408 28,169,627 29,189,378
Goodwill impairment 0 0 0 1,271,986
Total costs and expenses 26,980,978 35,500,708 75,298,110 100,559,077
Operating income 1,706,709 6,483,862 3,194,756 17,877,980
Other income (expense):        
Investment and other income (8,342) 138,990 24,830 275,852
Gain (loss) on sale of assets (1,740) 5,310 87,801 (4,674)
Interest and other expense (33,187) (53,256) (104,918) (149,107)
Other income (expense), net (43,269) 91,044 7,713 122,071
Income before income taxes 1,663,440 6,574,906 3,202,469 18,000,051
Income tax expense 544,098 2,845,269 1,056,316 7,627,910
Net income 1,119,342 3,729,637 2,146,153 10,372,141
Other comprehensive income, net of tax:        
Additional minimum pension liability adjustments 4,671 (8,534) 137,397 (26,952)
Unrealized gains (losses) on available-for-sale securities 33,855 (5,094) 39,488 (30,510)
Foreign currency translation adjustment 103,814 (112,581) 143,697 (44,480)
Total other comprehensive income (loss), net of tax 142,340 (126,209) 320,582 (101,942)
Comprehensive net income $ 1,261,682 $ 3,603,428 $ 2,466,735 $ 10,270,199
Basic net income per share: $ 0.13 $ 0.44 $ 0.25 $ 1.23
Diluted net income per share: $ 0.13 $ 0.44 $ 0.25 $ 1.22
Average Basic Shares Outstanding 8,520,469 8,460,625 8,505,571 8,442,812
Average Dilutive Shares Outstanding 8,532,534 8,530,187 8,528,523 8,500,022
Dividends per share $ 0.16 $ 0.15 $ 0.48 $ 0.45

Condensed Consolidated Statement Of Changes In Stockholders' Equity
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Condensed Consolidated Statement Of Changes In Stockholders' Equity (USD $)
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income [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     2,146,153   2,146,153
Issuance of common stock under Employee Stock Purchase Plan 481 123,472     123,953
Issuance of common stock under Employee Stock Purchase Plan, Shares 9,610        
Issuance of common stock to Employee Stock Ownership Plan 36,145 506,391     508,198
Issuance of common stock to Employee Stock Ownership Plan, Shares 1,807        
Issuance of common stock under Non-Employee Stock Option Plan 600 84,983     85,583
Issuance of common stock under Non-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 stock options and restricted stock   67,932     67,932
Share-based compensation   366,574     366,574
Purchase of common stock (1,174) (100,423) (151,050)   (252,647)
Purchase of common stock, Shares (23,473)        
Shareholder dividends     (4,153,185)   (4,153,185)
Other comprehensive income       320,582 320,582
BALANCE at Sep. 30, 2012 $ 425,861 $ 36,621,705 $ 59,308,260 $ 428,188 $ 96,784,014
BALANCE, Shares at Sep. 30, 2012 8,517,212        

Condensed Consolidated Statements Of Cash Flows
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Condensed Consolidated Statements Of Cash Flows (USD $)
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 2,146,153 $ 10,372,141
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation and amortization 1,636,887 1,571,423
Share-based compensation 366,574 413,332
Deferred income taxes 129,918 973,817
Goodwill impairment 0 1,271,986
Change in fair value of acquisition-related contingent consideration (161,644)  
(Gain) loss on sale of assets (87,801) 4,674
Excess tax benefit from stock based payments (67,932) (23,227)
Changes in assets and liabilities:    
Trade receivables (2,101,517) (3,664,939)
Inventories (2,493,891) (609,224)
Prepaid income taxes 890,067 (273,981)
Other assets (2,815) 21,595
Accounts payable (797,081) (1,357,506)
Accrued compensation and benefits (2,554,475) (99,861)
Other accrued expenses (109,789) (288,821)
Income taxes payable (23,475) (59,368)
Net cash (used in) provided by operating activities (3,230,821) 8,252,041
CASH FLOWS FROM INVESTING ACTIVITIES:    
Capital expenditures (2,047,771) (1,635,893)
Purchases of investments (13,599,917) (16,156,015)
Acquisition of business, net of cash acquired   (2,408,910)
Proceeds from the sale of fixed assets 161,663 8,055
Proceeds from the sale of investments 15,556,039 19,174,385
Net cash provided by (used in) investing activities 70,014 (1,018,378)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Cash dividends paid (4,005,003) (3,795,989)
Mortgage principal payments (317,765) (296,844)
Proceeds from issuance of common stock 249,847 177,609
Excess tax benefit from stock based payments 67,932 23,227
Payment of contingent consideration related to acquisition (357,879)   
Purchase of common stock (252,647)   
Net cash used in financing activities (4,615,515) (3,891,997)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH 25,011 (44,619)
NET DECREASE IN CASH AND CASH EQUIVALENTS (7,751,311) 3,297,047
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 22,515,710 16,787,558
CASH AND CASH EQUIVALENTS AT END OF PERIOD 14,764,399 20,084,605
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Income taxes paid 74,508 6,996,908
Interest paid 103,945 121,615
Dividends declared not paid 1,363,430 1,269,155
Acquisition costs in accrued expenses   $ 1,681,367

Summary Of Significant Accounting Policies
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Summary Of Significant Accounting Policies
9 Months Ended
Sep. 30, 2012
Summary Of Significant Accounting Policies [Abstract]  
Summary Of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Communications Systems, Inc. (herein collectively called "CSI" or the "Company") is a Minnesota corporation organized in 1969 which operates directly and through its subsidiaries located in the United States, Costa Rica, the United Kingdom and China. 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 ("JDL") business unit IT solutions including network design, computer infrastructure installations, IT service management, change management, network security and network operations services

Financial Statement Presentation

The condensed consolidated balance sheets and condensed consolidated statement of changes in stockholders' equity as of September 30, 2012 and the related condensed consolidated statements of income and comprehensive income, and the condensed consolidated statements of cash flows for the periods ended September 30, 2012 and 2011 have been prepared by Company management. In the opinion of management, all adjustments (which include only normal recurring adjustments except where noted) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2012 and 2011 and for the periods then ended have been made.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted. We recommend these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2011 Annual Report to Shareholders on Form 10-K. The results of operations for the periods ended September 30, 2012 are not necessarily indicative of operating results for the entire year.

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

Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, appropriately represent, in all material respects, the current status of accounting policies, and are incorporated herein by reference.

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 this 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.

Accumulated Other Comprehensive Income

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

 

 

 

 

 

 

 

 

 

 

September 30
2012

 

December 31
2011

 

Foreign currency translation

 

$

(193,900

)

$

(337,597

)

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

 

 

36,855

 

 

(2,633

)

Minimum pension liability

 

 

585,233

 

 

447,836

 

 

 

$

428,188

 

$

107,606

 

Summary Of Significant Accounting Policies (Policy)
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Summary Of Significant Accounting Policies (Policy)
9 Months Ended
Sep. 30, 2012
Summary Of Significant Accounting Policies [Abstract]  
Financial Statement Presentation

Financial Statement Presentation

The condensed consolidated balance sheets and condensed consolidated statement of changes in stockholders' equity as of September 30, 2012 and the related condensed consolidated statements of income and comprehensive income, and the condensed consolidated statements of cash flows for the periods ended September 30, 2012 and 2011 have been prepared by Company management. In the opinion of management, all adjustments (which include only normal recurring adjustments except where noted) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2012 and 2011 and for the periods then ended have been made.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted. We recommend these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2011 Annual Report to Shareholders on Form 10-K. The results of operations for the periods ended September 30, 2012 are not necessarily indicative of operating results for the entire year.

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

Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, appropriately represent, in all material respects, the current status of accounting policies, and are incorporated herein by reference.

Revenue Recognition

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 this 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.

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

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

 

 

 

 

 

 

 

 

 

 

September 30
2012

 

December 31
2011

 

Foreign currency translation

 

$

(193,900

)

$

(337,597

)

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

 

 

36,855

 

 

(2,633

)

Minimum pension liability

 

 

585,233

 

 

447,836

 

 

 

$

428,188

 

$

107,606


Summary Of Significant Accounting Policies (Tables)
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Summary Of Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2012
Summary Of Significant Accounting Policies [Abstract]  
Components Of Accumulated Other Comprehensive Income, Net Of Tax

 

 

 

 

 

 

 

 

 

 

September 30
2012

 

December 31
2011

 

Foreign currency translation

 

$

(193,900

)

$

(337,597

)

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

 

 

36,855

 

 

(2,633

)

Minimum pension liability

 

 

585,233

 

 

447,836

 

 

 

$

428,188

 

$

107,606


Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income, Net Of Tax) (Details)
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Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income, Net Of Tax) (Details) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Summary Of Significant Accounting Policies [Abstract]    
Foreign currency translation $ (193,900) $ (337,597)
Unrealized gain (loss) on available-for-sale investments 36,855 (2,633)
Minimum pension liability 585,233 447,836
Accumulated other comprehensive income, net of tax $ 428,188 $ 107,606

Cash, Cash Equivalents And Investments
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Cash, Cash Equivalents And Investments
9 Months Ended
Sep. 30, 2012
Cash, Cash Equivalents And Investments [Abstract]  
Cash, Cash Equivalents And Investments

NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS

The following tables show the Company's cash, cash equivalents and available-for-sale securities' adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short and long term investments as of September 30, 2012 and December 31, 2011:

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 September 30, 2012 were in a continuous unrealized loss position for less than twelve months and are not deemed to be other than temporarily impaired as of September 30, 2012.

The following table summarizes the estimated fair value of our investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of September 30, 2012:

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Estimated Market Value

 

 

Due within one year

 

$

14,533,198

 

$

14,539,329

 

Due after one year through five years

 

 

7,038,187

 

 

7,063,147

 

 

 

$

21,571,385

 

$

21,602,476

 

The Company did not recognize any gross realized gains and gross realized losses were immaterial during the nine-month periods ending September 30, 2012 and 2011, respectively. If the Company had realized gains or losses, they would be included within investment and other income in the accompanying consolidated results of operations.



Cash, Cash Equivalents And Investments (Tables)
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Cash, Cash Equivalents And Investments (Tables)
9 Months Ended
Sep. 30, 2012
Cash, Cash Equivalents And Investments [Abstract]  
Schedule Of Cash And Available-For-Sale Securities
Schedule Of Estimated Fair Value Of Available-For-Sale Securities

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Estimated Market Value

 

 

Due within one year

 

$

14,533,198

 

$

14,539,329

 

Due after one year through five years

 

 

7,038,187

 

 

7,063,147

 

 

 

$

21,571,385

 

$

21,602,476

 


Cash, Cash Equivalents And Investments (Details) (Schedule Of Available-For-Sale Securities)
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Cash, Cash Equivalents And Investments (Details) (Schedule Of Available-For-Sale Securities) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Sep. 30, 2011
Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost $ 36,335,784 $ 46,043,216    
Gross Unrealized Gains 37,706 8,213    
Gross Unrealized Losses (6,615) (16,608)    
Fair Value 36,366,875 46,034,821    
Cash & Cash Equivalents 14,764,399 22,515,710 20,084,605 16,787,558
Short-Term Investments 14,539,329 18,635,601    
Long-Term Investments 7,063,147 4,883,510    
Cash And Cash Equivalents [Member]
       
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 14,764,399 22,515,710    
Fair Value 14,764,399 22,515,710    
Cash & Cash Equivalents 14,764,399 22,515,710    
Cash And Cash Equivalents [Member] | Cash [Member]
       
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 12,832,100 21,685,829    
Fair Value 12,832,100 21,685,829    
Cash & Cash Equivalents 12,832,100 21,685,829    
Cash And Cash Equivalents [Member] | Money Market Funds [Member]
       
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 1,932,299 829,881    
Fair Value 1,932,299 829,881    
Cash & Cash Equivalents 1,932,299 829,881    
Investments [Member]
       
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 21,571,385 23,527,506    
Gross Unrealized Gains 37,706 8,213    
Gross Unrealized Losses (6,615) (16,608)    
Fair Value 21,602,476 23,519,111    
Short-Term Investments 14,539,329 18,635,601    
Long-Term Investments 7,063,147 4,883,510    
Investments [Member] | Certificates Of Deposit [Member]
       
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 12,064,679 23,527,506    
Gross Unrealized Gains 4,720 8,213    
Gross Unrealized Losses (3,573) (16,608)    
Fair Value 12,065,826 23,519,111    
Short-Term Investments 11,166,760 18,635,601    
Long-Term Investments 899,066 4,883,510    
Investments [Member] | Corporate Notes/Bonds [Member]
       
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 6,868,754      
Gross Unrealized Gains 27,956      
Gross Unrealized Losses (703)      
Fair Value 6,896,007      
Short-Term Investments 731,926      
Long-Term Investments 6,164,081      
Investments [Member] | Municipal Notes/Bonds [Member]
       
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 1,002,769      
Gross Unrealized Losses (2,339)      
Fair Value 1,000,430      
Short-Term Investments 1,000,430      
Investments [Member] | Commercial Paper [Member]
       
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 1,635,183      
Gross Unrealized Gains 5,030      
Fair Value 1,640,213      
Short-Term Investments $ 1,640,213      

Cash, Cash Equivalents And Investments (Details) (Schedule Of Estimated Fair Value Of Available-For-Sale Securities)
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Cash, Cash Equivalents And Investments (Details) (Schedule Of Estimated Fair Value Of Available-For-Sale Securities) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]    
Fair Value $ 36,366,875 $ 46,034,821
Investments [Member]
   
Schedule of Available-for-sale Securities [Line Items]    
Due within on year, Amortized Cost 14,533,198  
Due after one year through five years, Amortized Cost 7,038,187  
Amortized Cost 21,571,385  
Due within one year, Estimated Market Value 14,539,329  
Due after one year through five years, Estimated Market Value 7,063,147  
Fair Value $ 21,602,476 $ 23,519,111

Stock-Based Compensation
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Stock-Based Compensation
9 Months Ended
Sep. 30, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

NOTE 3 - STOCK-BASED COMPENSATION

Employee Stock Purchase Plan

Under the Company's Employee Stock Purchase Plan ("ESPP"), employees are able to acquire shares of common stock at 90% of the price at the end of each current quarterly plan term. The most recent term ended September 30, 2012. The ESPP is considered compensatory under current rules. At September 30, 2012, after giving effect to the shares issued as of that date, 56,803 shares remain available for purchase under the ESPP.

2011 Executive Incentive Compensation Plan

On March 28, 2011 the Board adopted and on May 19, 2011 the Company's shareholders approved the Company's 2011 Executive Incentive Compensation Plan ("2011 Incentive Plan"). The 2011 Incentive Plan authorizes incentive awards to officers, key employees and non-employee directors in the form of options (incentive and non-qualified), stock appreciation rights, restricted stock, restricted stock units, performance stock units ("deferred stock"), performance cash units, and other awards in stock, cash, or a combination of stock and cash. Up to 1,000,000 shares of our Common Stock may be issued pursuant to awards under the 2011 Incentive Plan.

During the first quarter of 2012, stock options covering 92,223 shares were awarded to key executive employees, which options expire seven years from the date of award and vest 25% each year beginning one year after the date of award. The Company also granted deferred stock awards of 94,242 shares to key employees during the first quarter under the Company's long-term incentive plan for performance over the 2012 to 2014 period. The actual number of shares of deferred stock, if any, that are earned by the respective employees will be determined based on achievement against cumulative performance goals for the three years ending December 31, 2014 and the shares earned will be issued in the first quarter of 2015 to those key employees still with the Company at that time. The Company also granted deferred stock awards of up to 9,456 shares to executive employees that could be earned under the Company's short-term incentive plan if actual revenue equaled or exceeded 150% of 2012 quarterly or annual revenue targets. The shares earned by the respective executive employees will be issued no later than the first quarter of 2013.

During the second quarter of 2012, the Company granted restricted stock units totaling 25,879 units to the Company's seven non-employee directors with the restricted stock units issued to each director having a value of $40,000 based on the closing price of the Company's stock on May 22, 2012. These restricted stock units vest after one year and are issued as stock after another year.

At September 30, 2012, 764,721 shares remained available for future issuance under the 2011 Incentive Plan.

Stock Option Plan for Directors

Shares of common stock are reserved for issuance to non-employee directors under options granted by the Company prior to 2011 under its Stock Option Plan for Non-Employee Directors (the "Director Plan"). Under the Director Plan nonqualified stock options to acquire shares of common stock were automatically granted to each non-employee director concurrent with annual meetings of shareholders in 2010 and earlier years, with the exercise price of options granted being the fair market value of the common stock on the date of the respective shareholder meetings. Options granted under the Director Plan expire 10 years from date of grant.

No options were granted under the Director Plan in 2011 or 2012. The Director Plan was amended as of May 19, 2011 to prohibit option grants in 2011 and future years to fulfill a commitment made by the Company in connection with seeking shareholder approval of the 2011 Incentive Plan at the 2011 Annual Meeting of Shareholders that, if shareholder approval was received, it would amend the Director Plan to prohibit any future option awards under that plan.

1992 Stock Plan

Under the Company's 1992 Stock Plan ("the Stock Plan"), shares of common stock may be issued pursuant to stock options, restricted stock or deferred stock grants to officers and key employees. Exercise prices of stock options under the Stock Plan cannot be less than fair market value of the stock on the date of grant. Rules and conditions governing awards of stock options, restricted stock and deferred stock are determined by the Compensation Committee of the Board of Directors, subject to certain limitations in the Stock Plan. When seeking approval of the 2011 Incentive Plan at the 2011 Annual Meeting of Shareholders, the Company committed to amending the Stock Plan to prohibit the issuance of future equity awards if such approval was given. Effective August 11, 2011, the amendment to prohibit future stock options or other equity awards was approved.

During 2011, prior to amending the Stock Plan to prohibit future awards, stock options were awarded covering 96,250 shares to key executive employees, which options expire seven years from the date of award and vest 25% each year beginning one year after the date of award.

In addition, during 2011, prior to amending the Stock Plan to prohibit future awards, key employees were granted deferred stock awards covering 16,092 shares tied to achievement against performance goals in 2010 under the Company's long term incentive plan. To the extent earned, the deferred stock will be issued in the first quarter of 2014 to key employees still employed by the Company at that time. The Company also granted deferred stock awards covering 77,588 shares to key employees under the Company's long term incentive plan tied to achievement against performance over the 2011 to 2013 period. The actual number of shares of deferred stock earned by the respective employees, if any, will be determined based on achievement against cumulative performance goals for the three years ending December 31, 2013 and the shares earned will be issued in the first quarter of 2014 to those key employees still employed by the Company at that time. During 2011, the Company also granted deferred stock awards of up to 12,156 shares to executive employees that could be earned under the Company's short-term incentive plan if actual revenue equaled or exceeded 150% of 2011 quarterly or annual revenue targets. The shares earned by the respective executive employees were issued in the first quarter of 2012.

At September 30, 2012, after reserving for stock options and deferred stock awards described in the two preceding paragraphs and adjusting for forfeitures and issuances during the year, there were 155,948 shares reserved for issuance under the Stock Plan. The Company has not awarded stock options or deferred stock under this plan in 2012.

Changes in Stock Options Outstanding

The following table summarizes changes in the number of outstanding stock options under the 2011 Incentive Plan, the Director Plan and Stock Plan over the period December 31, 2011 to September 30, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

Weighted average
exercise price
per share

 

Weighted average
remaining
contractual term

 

Outstanding – December 31, 2011

 

 

236,820

 

$

11.35

 

 

5.18 years

 

Awarded

 

 

92,223

 

 

13.10

 

 

 

 

Exercised

 

 

(12,000

)

 

7.13

 

 

 

 

Canceled

 

 

(5,890

)

 

10.58

 

 

 

 

Outstanding – September 30, 2012

 

 

311,153

 

 

12.05

 

 

5.24 years

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at September 30, 2012

 

 

162,550

 

$

10.71

 

 

4.49 years

 

Expected to vest at September 30, 2012

 

 

308,405

 

 

12.04

 

 

5.24 years

 

The aggregate intrinsic value of all options (the amount by which the market price of the stock on the last day of the period exceeded the market price of the stock on the date of grant) outstanding at September 30, 2012 was $192,000. The intrinsic value of all options exercised during the nine months ended September 30, 2012 was $59,000. Net cash proceeds from the exercise of all stock options were $86,000 and $73,000 for the nine months ended September 30, 2012 and 2011, respectively.

Changes in Deferred Stock Outstanding

The following table summarizes the changes in the number of deferred stock shares under the Stock Plan and 2011 Incentive Plan over the period December 31, 2011 to September 30, 2012:

 

 

 

 

 

 

 

 

 

 

Shares

 

Weighted Average
Grant Date
Fair Value

 

Outstanding – December 31, 2011

 

 

71,849

 

$

15.14

 

Granted

 

 

105,698

 

 

13.49

 

Vested

 

 

 

 

 

Canceled

 

 

(6,934

)

 

14.19

 

Outstanding – September 30, 2012

 

 

170,613

 

 

14.14

 

Compensation Expense

Share-based compensation expense recognized for the nine-month period ended September 30, 2012 was $367,000 before income taxes and $238,000 after income taxes. Share-based compensation expense recognized for the nine-month period ended September 30, 2011 was $413,000 before income taxes and $269,000 after income taxes. Unrecognized compensation expense for the Company's plans was $891,000 at September 30, 2012. Excess tax benefits from the exercise of stock options and issuance of restricted stock included in financing cash flows for the nine month periods ended September 30, 2012 and 2011 were $68,000 and $23,000, respectively. Share-based compensation expense is recorded as a part of selling, general and administrative expenses.


Stock-Based Compensation (Tables)
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Stock-Based Compensation (Tables)
9 Months Ended
Sep. 30, 2012
Stock-Based Compensation [Abstract]  
Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

Weighted average
exercise price
per share

 

Weighted average
remaining
contractual term

 

Outstanding – December 31, 2011

 

 

236,820

 

$

11.35

 

 

5.18 years

 

Awarded

 

 

92,223

 

 

13.10

 

 

 

 

Exercised

 

 

(12,000

)

 

7.13

 

 

 

 

Canceled

 

 

(5,890

)

 

10.58

 

 

 

 

Outstanding – September 30, 2012

 

 

311,153

 

 

12.05

 

 

5.24 years

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at September 30, 2012

 

 

162,550

 

$

10.71

 

 

4.49 years

 

Expected to vest at September 30, 2012

 

 

308,405

 

 

12.04

 

 

5.24 years

 

Schedule Of Changes In The Number Of Deferred Stock Shares Under The Stock Plan And Incentive Plan

 

 

 

 

 

 

 

 

 

 

Shares

 

Weighted Average
Grant Date
Fair Value

 

Outstanding – December 31, 2011

 

 

71,849

 

$

15.14

 

Granted

 

 

105,698

 

 

13.49

 

Vested

 

 

 

 

 

Canceled

 

 

(6,934

)

 

14.19

 

Outstanding – September 30, 2012

 

 

170,613

 

 

14.14

 


Stock-Based Compensation (Narrative) (Details)
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Stock-Based Compensation (Narrative) (Details) (USD $)
9 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 9 Months Ended 9 Months Ended 3 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Mar. 31, 2012
Executive Incentive Compensation Plan [Member]
Sep. 30, 2012
Executive Incentive Compensation Plan [Member]
Mar. 28, 2011
Executive Incentive Compensation Plan [Member]
Mar. 31, 2012
1992 Stock Plan [Member]
Dec. 31, 2011
1992 Stock Plan [Member]
Sep. 30, 2012
1992 Stock Plan [Member]
Sep. 30, 2012
Stock Option Plan For Directors [Member]
Mar. 31, 2012
Key Executive Employees [Member]
Executive Incentive Compensation Plan [Member]
Mar. 31, 2012
Key Employees [Member]
Executive Incentive Compensation Plan [Member]
Dec. 31, 2011
Tied To Achievement Of 2010 Performance Goals [Member]
1992 Stock Plan [Member]
Dec. 31, 2011
Tied To Achievement Of 2011 To 2013 Performance Goals [Member]
1992 Stock Plan [Member]
Sep. 30, 2012
Employee Stock Purchase Plan [Member]
Jun. 30, 2012
Restricted Stock [Member]
Executive Incentive Compensation Plan [Member]
Jun. 30, 2012
Restricted Stock [Member]
Non-Employee Directors [Member]
Executive Incentive Compensation Plan [Member]
employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                  
Percentage of price of common stock at which employees are able to acquire                             90.00%    
Awards avaliable for grant         764,721       155,948           56,803    
Awards granted                               25,879  
Value of awards granted                               $ 40,000  
Share-based compensation arrangement by share-based payment, vesting period       1 year                          
Number of awards authorized           1,000,000                      
Number of employees receiving awards                                 7
Number of options granted       92,223       96,250                  
Options expiration period, years 5 years 2 months 27 days   5 years 2 months 5 days 7 years     7 years     10 years              
Percentage of options vest each year       25.00%       25.00%                  
Granted deferred stock awards to employees               12,156     9,456 94,242 16,092 77,588      
Minimum percentage of revenue growth required to earn deferred stock       150.00%       150.00%                  
Aggregate intrinsic value of options outstanding 192,000                                
Intrinsic value of all options exercised 59,000                                
Net cash proceeds from exercise of stock options 86,000 73,000                              
Share based compensation expense before income taxes 367,000 413,000                              
Share based compensation expense after income taxes 238,000 269,000                              
Unrecognized compensation expense 891,000                                
Excess tax benefits from exercise of stock options $ 68,000 $ 23,000                              

Stock-Based Compensation (Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan) (Details)
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Stock-Based Compensation (Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan) (Details) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2012
Dec. 31, 2011
Stock-Based Compensation [Abstract]    
Options, Outstanding - December 31, 2011 236,820  
Options, Awarded 92,223  
Options, Exercised (12,000)  
Options, Canceled (5,890)  
Options, Outstanding - September 30, 2012 311,153 236,820
Options, Exercisable at September 30, 2012 162,550  
Options, Expected to vest at September 30, 2012 308,405  
Weighted average exercise price per share, Outstanding - December 31, 2011 $ 11.35  
Weighted average exercise price per share, Awarded $ 13.10  
Weighted average exercise price per share, Exercised $ 7.13  
Weighted average exercise price per share, Canceled $ 10.58  
Weighted average exercise price per share, Outstanding - September 30, 2012 $ 12.05 $ 11.35
Weighted average exercise price per share, Exercisable at September 30, 2012 $ 10.71  
Weighted average exercise price per share, Expected to vest at September 30, 2012 $ 12.04  
Options, Outstanding - Weighted average remaining contractual term 5 years 2 months 27 days 5 years 2 months 5 days
Options, Exercisable at September 30, 2012 - Weighted average remaining contractual term 4 years 5 months 27 days  
Options, Expected to vest at September 30, 2012 - Weighted average remaining contractual term 5 years 2 months 27 days  

Stock-Based Compensation (Schedule Of Changes In The Number Of Deferred Stock Shares Under The Stock Plan And Incentive Plan) (Details)
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Stock-Based Compensation (Schedule Of Changes In The Number Of Deferred Stock Shares Under The Stock Plan And Incentive Plan) (Details) (Deferred Stock [Member], USD $)
9 Months Ended
Sep. 30, 2012
Deferred Stock [Member]
 
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]  
Shares, Outstanding - December 31, 2011 71,849
Shares, Granted 105,698
Shares, Vested   
Shares, Canceled (6,934)
Shares, Outstanding - September 30, 2012 170,613
Weighted Average Grant Date Fair Value, Outstanding - December 31, 2011 $ 15.14
Weighted Average Grant Date Fair Value, Granted $ 13.49
Weighted Average Grant Date Fair Value, Vested   
Weighted Average Grant Date Fair Value, Canceled $ 14.19
Weighted Average Grant Date Fair Value, Outstanding - September 30, 2012 $ 14.14