Document And Entity Information
v0.0.0.0
Document And Entity Information (USD $)
 12 Months Ended
Dec. 31, 2012
Mar. 01, 2013
Jun. 30, 2012
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2012    
Document Fiscal Period Focus FY    
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   8,479,121  
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    
Entity Public Float     $ 74,909,000

Consolidated Balance Sheets
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Consolidated Balance Sheets (USD $)
Dec. 31, 2012
Dec. 31, 2011
CURRENT ASSETS:    
Cash and cash equivalents $ 17,869,712 $ 22,515,710
Investments 12,701,538 18,635,601
Trade accounts receivable, less allowance for doubtful accounts of $69,000 and $175,000, respectively 14,683,227 14,461,168
Inventories 33,752,710 25,986,003
Prepaid income taxes 2,113,926 3,893,003
Other current assets 783,352 999,863
Deferred income taxes 4,013,628 3,455,047
TOTAL CURRENT ASSETS 85,918,093 89,946,395
PROPERTY, PLANT AND EQUIPMENT, net 14,474,913 14,019,019
OTHER ASSETS:    
Investments 5,376,397 4,883,510
Goodwill 5,956,934 5,990,571
Funded pension assets   905,552
Other assets 808,308 913,869
TOTAL OTHER ASSETS 12,141,639 12,693,502
TOTAL ASSETS 112,534,645 116,658,916
CURRENT LIABILITIES:    
Current portion of long-term debt 457,464 427,345
Accounts payable 9,237,233 4,398,848
Accrued compensation and benefits 3,044,864 5,870,000
Accrued consideration 770,041 1,002,623
Other accrued liabilities 1,670,009 2,388,867
Dividends payable 61,833 1,299,963
TOTAL CURRENT LIABILITIES 15,241,444 15,387,646
LONG TERM LIABILITIES:    
Long-term compensation plans 350,457 283,075
Uncertain tax positions 320,426 405,673
Deferred income taxes 1,381,785 1,476,969
Pension liabilities 127,611  
Long term debt - mortgage payable 1,117,529 1,574,993
TOTAL LONG-TERM LIABILITIES 3,297,808 3,740,710
COMMITMENTS AND CONTINGENCIES (Footnote 8)      
STOCKHOLDERS' EQUITY    
Common stock, par value $.05 per share; 30,000,000 shares authorized; 8,474,896 and 8,466,774 shares issued and outstanding, respectively 423,745 423,339
Additional paid-in capital 36,404,518 35,533,273
Retained earnings 57,755,178 61,466,342
Accumulated other comprehensive (loss) income (588,048) 107,606
TOTAL STOCKHOLDERS' EQUITY 93,995,393 97,530,560
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 112,534,645 $ 116,658,916

Consolidated Balance Sheets (Parenthetical)
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Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 69,000 $ 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 8,474,896 8,466,774
Common stock, shares outstanding 8,474,896 8,466,774

Consolidated Statements Of Income And Comprehensive Income
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Consolidated Statements Of Income And Comprehensive Income (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Consolidated Statements Of Income And Comprehensive Income [Abstract]      
Sales $ 104,249,654 $ 143,775,051 $ 120,072,310
Costs and expenses:      
Cost of sales 62,752,763 84,879,924 68,871,678
Selling, general and administrative expenses 38,100,773 40,108,221 35,586,248
Impairment loss   1,271,986  
Total costs and expenses 100,853,536 126,260,131 104,457,926
Operating income 3,396,118 17,514,920 15,614,384
Other income and (expenses):      
Investment and other income 75,187 313,544 251,002
Gain/(loss) on sale of assets 62,630 (27,081) (9,238)
Interest and other expense (136,255) (181,393) (221,611)
Other income, net 1,562 105,070 20,153
Income from operations before income taxes 3,397,680 17,619,990 15,634,537
Income tax expense 1,159,566 7,822,124 5,919,104
Net income 2,238,114 9,797,866 9,715,433
Other comprehensive income (loss), net of tax:      
Additional minimum pension liability adjustments 1,311,000 (525,000) 43,999
Unrealized gains/(losses) on available-for-sale securities 26,223 (16,691) (19,744)
Foreign currency translation adjustment (2,032,877) 934,934 (182,770)
Total other comprehensive (loss) income (695,654) 393,243 (158,515)
Comprehensive income $ 1,542,460 $ 10,191,109 $ 9,556,918
Basic net income per share: $ 0.26 $ 1.16 $ 1.16
Diluted net income per share: $ 0.26 $ 1.15 $ 1.15
Weighted Average Basic Shares Outstanding 8,508,497 8,448,612 8,384,242
Weighted Average Dilutive Shares Outstanding 8,518,613 8,495,873 8,414,566
Dividends declared per share $ 0.64 $ 0.60 $ 0.59

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, 2009 $ 417,644 $ 33,641,510 $ 52,007,261 $ (127,122) $ 85,939,293
BALANCE, Shares at Dec. 31, 2009 8,352,883        
Net income     9,715,433   9,715,433
Issuance of common stock under Employee Stock Purchase Plan 555 124,579     125,134
Issuance of common stock under Employee Stock Purchase Plan, Shares 11,107        
Issuance of common stock to Employee Stock Ownership Plan 1,895 469,581     471,476
Issuance of common stock to Employee Stock Ownership Plan, Shares 37,900       22,493
Issuance of common stock under Employee Stock Option Plan 1,050 181,626     182,676
Issuance of common stock under Employee Stock Option Plan, Shares 21,000        
Tax benefit from non-qualified employee stock options   34,981     34,981
Share-based compensation   39,093     39,093
Shareholder dividends     (4,952,878)   (4,952,878)
Other comprehensive (loss) income       (158,515) (158,515)
BALANCE at Dec. 31, 2010 421,144 34,491,370 56,769,816 (285,637) 91,396,693
BALANCE, Shares at Dec. 31, 2010 8,422,890        
Net income     9,797,866   9,797,866
Issuance of common stock under Employee Stock Purchase Plan 515 151,761     152,276
Issuance of common stock under Employee Stock Purchase Plan, Shares 10,308        
Issuance of common stock to Employee Stock Ownership Plan 1,125 314,902     316,027
Issuance of common stock to Employee Stock Ownership Plan, Shares 22,493       36,145
Issuance of common stock under Non-Employee Stock Option Plan 450 72,450     72,900
Issuance of common stock under Non-Employee Stock Option Plan, Shares 9,000        
Issuance of common stock under Executive Stock Plan 105 31,974     32,079
Issuance of common stock under Executive Stock Plan, Shares 2,083        
Tax benefit from non-qualified employee stock options   21,920     21,920
Share-based compensation   448,896     448,896
Shareholder dividends     (5,101,340)   (5,101,340)
Other comprehensive (loss) income       393,243 393,243
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     2,238,114   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 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 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     (5,496,336)   (5,496,336)
Other comprehensive (loss) income       (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        

Consolidated Statements Of Cash Flows
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Consolidated Statements Of Cash Flows (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net income $ 2,238,114 $ 9,797,866 $ 9,715,433
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 2,133,511 2,100,735 1,858,881
Share-based compensation 302,964 448,896 39,093
Deferred taxes (631,626) 1,695,595 (518,234)
Impairment loss   1,271,986  
Change in fair value of acquisition-related contingent consideration 85,501    
(Gain)/loss on sale of assets (62,630) 27,081 9,238
Excess tax benefit from stock based payments (67,835) (21,920) (34,981)
Changes in assets and liabilities net of effects from acquisitions:      
Trade receivables (189,775) 3,273,730 (2,521,012)
Inventories (7,705,772) (602,414) 69,693
Prepaid income taxes 1,776,601 (3,600,652) 40,688
Other assets 252,378 (78,349) (52,913)
Accounts payable 4,819,481 (1,025,703) 407,757
Accrued compensation and benefits (2,250,647) 751,925 417,873
Other accrued liabilities (680,171) 395,133 301,376
Income taxes payable (15,168) (335,374) (10,158)
Other 195,244 (32,022) 3,092
Net cash provided by operating activities 200,170 14,066,513 9,725,826
CASH FLOWS FROM INVESTING ACTIVITIES:      
Capital expenditures (2,607,958) (2,755,991) (1,794,422)
Purchases of investments (15,010,778) (20,884,014) (20,339,715)
Acquisition of business   (3,138,367)  
Proceeds from the sale of fixed assets 198,109 22,555 27,783
Proceeds from the sale of investments 20,456,039 23,635,385 12,808,642
Net cash provided by (used in) investing activities 3,035,412 (3,120,432) (9,297,712)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Cash dividends paid (6,734,466) (5,064,811) (4,858,484)
Mortgage principal payments (427,345) (399,209) (372,926)
Proceeds from issuance of common stock 297,664 257,255 307,810
Excess tax benefit from stock based payments 67,835 21,920 34,981
Payment of contingent consideration related to acquisition (370,096)    
Purchase of common stock (757,951)    
Net cash used in financing activities (7,924,359) (5,184,845) (4,888,619)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH 42,779 (33,084) (45,385)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (4,645,998) 5,728,152 (4,505,890)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 22,515,710 16,787,558 21,293,448
CASH AND CASH EQUIVALENTS AT END OF YEAR 17,869,712 22,515,710 16,787,558
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:      
Income taxes paid 87,343 10,037,938 6,315,827
Interest paid 138,477 165,514 201,191
Dividends declared not paid   1,270,016 1,263,434
Acquisition costs in accrued liabilities   $ 1,002,623  

Summary Of Significant Accounting Policies
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Summary Of Significant Accounting Policies
 12 Months Ended
Dec. 31, 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,” “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, 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 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;  non-allocated general and administrative expenses are separately accounted for as “Other” in the Company’s segment reporting. 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, 2012,  the Company had $17.9 million in cash and cash equivalents. Of this amount, $5.5 million 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, 2012. 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 Comprehensive income 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 $2,030,000, $2,058,000 and $1,859,000 for 2012,  2011 and 2010, 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.

 

Goodwill and Other Intangible Assets: Goodwill represents the amount by which the purchase prices (including liabilities assumed) of acquired businesses exceed the estimated fair value of the net tangible assets and separately identifiable assets of these businesses. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested at least annually for impairment. The Company reassesses the value of our reporting units and related goodwill balances at the end of each fiscal year and at other times if events have occurred or circumstances exist that indicate the carrying amount of goodwill may not be recoverable.

 

Recoverability of long-lived assets: The Company reviews its long-lived assets periodically to determine potential impairment 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, 2012 and 2011, 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

 

 

 

2012

 

 

2011

Beginning balance

 

$
634,000 

 

$
616,000 

Amounts charged to expense

 

 
217,000 

 

 
258,000 

Actual warranty costs paid

 

 
(261,000)

 

 
(240,000)

Ending balance

 

$
590,000 

 

$
634,000 

 

Accumulated Other Comprehensive income: The components of accumulated other comprehensive income are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31

 

 

 

2012

 

 

2011

Foreign currency translation

 

$
(2,370,474)

 

$
(337,597)

Unrealized gain on available-for-sale investments

 

 
23,590 

 

 
(2,633)

Minimum pension liability

 

 
1,758,836 

 

 
447,836 

 

 

$
(588,048)

 

$
107,606 

 

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 $2,304,000 in 2012, $2,045,000 in 2011 and $2,127,000 in 2010.  

 

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 10,116 shares, 47,261 shares and 30,324 shares in 2012,  2011 and 2010, 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 2012,  2011, and 2010 was 80,290,  0 and 0, respectively.

 

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.   


Summary Of Significant Accounting Policies (Policy)
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Summary Of Significant Accounting Policies (Policy)
 12 Months Ended
Dec. 31, 2012
Summary Of Significant Accounting Policies [Abstract]  
Principles Of Consolidation

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

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

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, 2012,  the Company had $17.9 million in cash and cash equivalents. Of this amount, $5.5 million 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, commercial paper, and corporate notes and bonds that are traded on the open market and are classified as available-for-sale at December 31, 2012. 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 Comprehensive income below).

Inventories

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

Property, Plant And Equipment

Property, plant and equipment: Property, plant and equipment are recorded at cost.  Depreciation is computed using the straight-line method.  Depreciation included in cost of sales and selling, general and administrative expenses for continuing operations was $2,030,000, $2,058,000 and $1,859,000 for 2012,  2011 and 2010, 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.

Goodwill And Other Intangible Assets

Goodwill and Other Intangible Assets: Goodwill represents the amount by which the purchase prices (including liabilities assumed) of acquired businesses exceed the estimated fair value of the net tangible assets and separately identifiable assets of these businesses. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested at least annually for impairment. The Company reassesses the value of our reporting units and related goodwill balances at the end of each fiscal year and at other times if events have occurred or circumstances exist that indicate the carrying amount of goodwill may not be recoverable.

Recoverability Of Long-Lived Assets

Recoverability of long-lived assets: The Company reviews its long-lived assets periodically to determine potential impairment 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, 2012 and 2011, 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

 

 

 

2012

 

 

2011

Beginning balance

 

$
634,000 

 

$
616,000 

Amounts charged to expense

 

 
217,000 

 

 
258,000 

Actual warranty costs paid

 

 
(261,000)

 

 
(240,000)

Ending balance

 

$
590,000 

 

$
634,000 

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive income: The components of accumulated other comprehensive income are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31

 

 

 

2012

 

 

2011

Foreign currency translation

 

$
(2,370,474)

 

$
(337,597)

Unrealized gain on available-for-sale investments

 

 
23,590 

 

 
(2,633)

Minimum pension liability

 

 
1,758,836 

 

 
447,836 

 

 

$
(588,048)

 

$
107,606 

 

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

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: 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 $2,304,000 in 2012, $2,045,000 in 2011 and $2,127,000 in 2010.  

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 unvested shares, which resulted in a dilutive effect of 10,116 shares, 47,261 shares and 30,324 shares in 2012,  2011 and 2010, 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 2012,  2011, and 2010 was 80,290,  0 and 0, respectively.

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.


Summary Of Significant Accounting Policies (Tables)
v0.0.0.0
Summary Of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2012
Summary Of Significant Accounting Policies [Abstract]  
Schedule Of Warranty

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

 

 

2012

 

 

2011

Beginning balance

 

$
634,000 

 

$
616,000 

Amounts charged to expense

 

 
217,000 

 

 
258,000 

Actual warranty costs paid

 

 
(261,000)

 

 
(240,000)

Ending balance

 

$
590,000 

 

$
634,000 

 

Components Of Accumulated Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31

 

 

 

2012

 

 

2011

Foreign currency translation

 

$
(2,370,474)

 

$
(337,597)

Unrealized gain on available-for-sale investments

 

 
23,590 

 

 
(2,633)

Minimum pension liability

 

 
1,758,836 

 

 
447,836 

 

 

$
(588,048)

 

$
107,606 

 


Summary Of Significant Accounting Policies (Narrative) (Details)
v0.0.0.0
Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
segment
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Summary Of Significant Accounting Policies [Abstract]        
Number of segments 3      
Cash and cash equivalents $ 17,869,712 $ 22,515,710 $ 16,787,558 $ 21,293,448
Money market funds 5,500,000      
Value of the investment in short-term money market funds sought to be preserved (in dollars per share) $ 1.00      
Depreciation 2,030,000 2,058,000 1,859,000  
Warranty liability period 5 years      
Research and development costs $ 2,304,000 $ 2,045,000 $ 2,127,000  
Dilutive shares 10,116 47,261 30,324  
Shares not included in the computation of diluted earnings per share 80,290 0 0  

Summary Of Significant Accounting Policies (Schedule Of Warranty) (Details)
v0.0.0.0
Summary Of Significant Accounting Policies (Schedule Of Warranty) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Summary Of Significant Accounting Policies [Abstract]    
Beginning Balance $ 634,000 $ 616,000
Amounts charged to expense 217,000 258,000
Actual warranty costs paid (261,000) (240,000)
Ending balance $ 590,000 $ 634,000

Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income) (Details)
v0.0.0.0
Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income) (Details) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Summary Of Significant Accounting Policies [Abstract]    
Foreign currency translation $ (2,370,474) $ (337,597)
Unrealized gain on available-for-sale investments 23,590 (2,633)
Minimum pension liability 1,758,836 447,836
Accumulated other comprehensive (loss) income, net of tax $ (588,048) $ 107,606

Cash, Cash Equivalents And Investments
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Cash, Cash Equivalents And Investments
 12 Months Ended
Dec. 31, 2012
Cash, Cash Equivalents And Investments [Abstract]  
Cash, Cash Equivalents And Investments

NOTE 2 –CASH EQUIVALENTS AND INVESTMENTS

 

The following tables show the Company’s 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 equivalents or short and long term investments as of December 31, 2012 and December 31, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
5,497,788 

 

$

 -

 

$

 -

 

$
5,497,788 

 

$
5,497,788 

 

$

 

 

$

 

Subtotal

 
5,497,788 

 

 

 -

 

 

 -

 

 
5,497,788 

 

 
5,497,788 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 
8,157,749 

 

 
3,727 

 

 
(1,945)

 

 
8,159,531 

 

 

 -

 

 
7,258,768 

 

 
900,763 

Corporate Notes/Bonds

 
8,241,327 

 

 
35,364 

 

 
(914)

 

 
8,275,777 

 

 

 -

 

 
3,800,143 

 

 
4,475,634 

Commercial Paper

 
1,638,892 

 

 
3,735 

 

 

 -

 

 
1,642,627 

 

 

 -

 

 
1,642,627 

 

 

 -

Subtotal

 
18,037,968 

 

 
42,826 

 

 
(2,859)

 

 
18,077,935 

 

 

 -

 

 
12,701,538 

 

 
5,376,397 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
23,535,756 

 

$
42,826 

 

$
(2,859)

 

$
23,575,723 

 

$
5,497,788 

 

$
12,701,538 

 

$
5,376,397 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
829,881 

 

$

 -

 

$

 -

 

$
829,881 

 

$
829,881 

 

$

 

 

$

 

Subtotal

 
829,881 

 

 

 -

 

 

 -

 

 
829,881 

 

 
829,881 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 
23,527,506 

 

 
8,213 

 

 
(16,608)

 

 
23,519,111 

 

 

 -

 

 
18,635,601 

 

 
4,883,510 

Subtotal

 
23,527,506 

 

 
8,213 

 

 
(16,608)

 

 
23,519,111 

 

 

 -

 

 
18,635,601 

 

 
4,883,510 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
24,357,387 

 

$
8,213 

 

$
(16,608)

 

$
24,348,992 

 

$
829,881 

 

$
18,635,601 

 

$
4,883,510 

 

 

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, 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 December 31, 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 December 31, 2012:  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Estimated Market Value

 

 

 

 

 

Due within one year

 

$  
12,687,866 

 

$
12,701,538 

Due after one year through five years

 

 
5,350,102 

 

 
5,376,397 

 

 

$ 

18,037,968 

 

$
18,077,935 

 

The Company did not recognize any gross realized gains and gross realized losses were immaterial during the years ending December 31, 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)
 12 Months Ended
Dec. 31, 2012
Cash, Cash Equivalents And Investments [Abstract]  
Schedule Of Cash And Available-For-Sale Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
5,497,788 

 

$

 -

 

$

 -

 

$
5,497,788 

 

$
5,497,788 

 

$

 

 

$

 

Subtotal

 
5,497,788 

 

 

 -

 

 

 -

 

 
5,497,788 

 

 
5,497,788 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 
8,157,749 

 

 
3,727 

 

 
(1,945)

 

 
8,159,531 

 

 

 -

 

 
7,258,768 

 

 
900,763 

Corporate Notes/Bonds

 
8,241,327 

 

 
35,364 

 

 
(914)

 

 
8,275,777 

 

 

 -

 

 
3,800,143 

 

 
4,475,634 

Commercial Paper

 
1,638,892 

 

 
3,735 

 

 

 -

 

 
1,642,627 

 

 

 -

 

 
1,642,627 

 

 

 -

Subtotal

 
18,037,968 

 

 
42,826 

 

 
(2,859)

 

 
18,077,935 

 

 

 -

 

 
12,701,538 

 

 
5,376,397 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
23,535,756 

 

$
42,826 

 

$
(2,859)

 

$
23,575,723 

 

$
5,497,788 

 

$
12,701,538 

 

$
5,376,397 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
829,881 

 

$

 -

 

$

 -

 

$
829,881 

 

$
829,881 

 

$

 

 

$

 

Subtotal

 
829,881 

 

 

 -

 

 

 -

 

 
829,881 

 

 
829,881 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 
23,527,506 

 

 
8,213 

 

 
(16,608)

 

 
23,519,111 

 

 

 -

 

 
18,635,601 

 

 
4,883,510 

Subtotal

 
23,527,506 

 

 
8,213 

 

 
(16,608)

 

 
23,519,111 

 

 

 -

 

 
18,635,601 

 

 
4,883,510 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
24,357,387 

 

$
8,213 

 

$
(16,608)

 

$
24,348,992 

 

$
829,881 

 

$
18,635,601 

 

$
4,883,510 

 

Schedule Of Estimated Fair Value Of Available-For-Sale Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Estimated Market Value

 

 

 

 

 

Due within one year

 

$  
12,687,866 

 

$
12,701,538 

Due after one year through five years

 

 
5,350,102 

 

 
5,376,397 

 

 

$ 

18,037,968 

 

$
18,077,935 

 


Cash, Cash Equivalents And Investments (Schedule Of Available-For-Sale Securities) (Details)
v0.0.0.0
Cash, Cash Equivalents And Investments (Schedule Of Available-For-Sale Securities) (Details) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost $ 23,535,756 $ 24,357,387    
Gross Unrealized Gains 42,826 8,213    
Gross Unrealized Losses (2,859) (16,608)    
Fair Value 23,575,723 24,348,992    
Cash Equivalents 5,497,788 829,881    
Cash & Cash Equivalents 17,869,712 22,515,710 16,787,558 21,293,448
Short-Term Investments 12,701,538 18,635,601    
Long-Term Investments 5,376,397 4,883,510    
Cash And Cash Equivalents [Member]
        
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 5,497,788 829,881    
Fair Value 5,497,788 829,881    
Cash Equivalents 5,497,788 829,881    
Cash And Cash Equivalents [Member] | Money Market Funds [Member]
        
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 5,497,788 829,881    
Fair Value 5,497,788 829,881    
Cash Equivalents 5,497,788 829,881    
Investments [Member]
        
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 18,037,968 23,527,506    
Gross Unrealized Gains 42,826 8,213    
Gross Unrealized Losses (2,859) (16,608)    
Fair Value 18,077,935 23,519,111    
Short-Term Investments 12,701,538 18,635,601    
Long-Term Investments 5,376,397 4,883,510    
Investments [Member] | Certificates Of Deposit [Member]
        
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 8,157,749 23,527,506    
Gross Unrealized Gains 3,727 8,213    
Gross Unrealized Losses (1,945) (16,608)    
Fair Value 8,159,531 23,519,111    
Short-Term Investments 7,258,768 18,635,601    
Long-Term Investments 900,763 4,883,510    
Investments [Member] | Corporate Notes And Bonds [Member]
        
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 8,241,327      
Gross Unrealized Gains 35,364      
Gross Unrealized Losses (914)      
Fair Value 8,275,777      
Short-Term Investments 3,800,143      
Long-Term Investments 4,475,634      
Investments [Member] | Commercial Paper [Member]
        
Schedule of Available-for-sale Securities [Line Items]        
Amortized Cost 1,638,892      
Gross Unrealized Gains 3,735      
Fair Value 1,642,627      
Short-Term Investments $ 1,642,627      

Cash, Cash Equivalents And Investments (Schedule Of Estimated Fair Value Of Available-For-Sale Securities) (Details)
v0.0.0.0
Cash, Cash Equivalents And Investments (Schedule Of Estimated Fair Value Of Available-For-Sale Securities) (Details) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]    
Fair Value $ 23,575,723 $ 24,348,992
Investments [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
Due within on year, Amortized Cost 12,687,866  
Due after one year through five years, Amortized Cost 5,350,102  
Amortized Cost 18,037,968  
Due in 1 Year 12,701,538  
Due in 1 Year through 5 Years 5,376,397  
Fair Value $ 18,077,935 $ 23,519,111

Inventories
v0.0.0.0
Inventories
 12 Months Ended
Dec. 31, 2012
Inventories [Abstract]  
Inventories

NOTE 3 - INVENTORIES

 

Inventories consist of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31

 

 

2012

 

2011

Finished goods

 

$         

21,252,143 

 

$
14,010,071 

Raw and processed materials

 

 
12,500,567 

 

 
11,975,932 

 

 

$
33,752,710 

 

$
25,986,003 

 


Inventories (Tables)
v0.0.0.0
Inventories (Tables)
 12 Months Ended
Dec. 31, 2012
Inventories [Abstract]  
Schedule Of Inventories

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31

 

 

2012

 

2011

Finished goods

 

$         

21,252,143 

 

$
14,010,071 

Raw and processed materials

 

 
12,500,567 

 

 
11,975,932 

 

 

$
33,752,710 

 

$
25,986,003 

 


Inventories (Schedule Of Inventories) (Details)
v0.0.0.0
Inventories (Schedule Of Inventories) (Details) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Inventories [Abstract]    
Finished goods $ 21,252,143 $ 14,010,071
Raw and processed materials 12,500,567 11,975,932
Total $ 33,752,710 $ 25,986,003

Property, Plant And Equipment
v0.0.0.0
Property, Plant And Equipment
 12 Months Ended
Dec. 31, 2012
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

 

2012

 

2011

Land

 

 

 

 

 

$
3,135,351 

 

$
3,114,330 

Buildings and improvements

7-40 years

 

 
8,858,976 

 

 
8,779,969 

Machinery and equipment

3-15 years

 

 
23,247,888 

 

 
23,266,325 

Furniture and fixtures

5-10 years

 

 
3,644,306 

 

 
3,966,579 

Construction in progress

 

 

 

 

 

 
1,546,732 

 

 
515,095 

 

 

 

 

 

 

 
40,433,253 

 

 
39,642,298 

Less accumulated depreciation

 

 

 

 

 

 
(25,958,340)

 

 
(25,623,279)

 

 

 

 

 

 

$
14,474,913 

 

$
14,019,019 

 


Property, Plant And Equipment (Tables)
v0.0.0.0
Property, Plant And Equipment (Tables)
 12 Months Ended
Dec. 31, 2012
Property, Plant And Equipment [Abstract]  
Schedule Of Property, Plant And Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated

 

December 31

 

useful life

 

2012

 

2011

Land

 

 

 

 

 

$
3,135,351 

 

$
3,114,330 

Buildings and improvements

7-40 years

 

 
8,858,976 

 

 
8,779,969 

Machinery and equipment

3-15 years

 

 
23,247,888 

 

 
23,266,325 

Furniture and fixtures

5-10 years

 

 
3,644,306 

 

 
3,966,579 

Construction in progress

 

 

 

 

 

 
1,546,732 

 

 
515,095 

 

 

 

 

 

 

 
40,433,253 

 

 
39,642,298 

Less accumulated depreciation

 

 

 

 

 

 
(25,958,340)

 

 
(25,623,279)

 

 

 

 

 

 

$
14,474,913 

 

$
14,019,019 

 


Property, Plant And Equipment (Schedule Of Property, Plant And Equipment) (Details)
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Property, Plant And Equipment (Schedule Of Property, Plant And Equipment) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Land [Member]
Dec. 31, 2011
Land [Member]
Dec. 31, 2012
Building And Improvements [Member]
Dec. 31, 2011
Building And Improvements [Member]
Dec. 31, 2012
Machinery And Equipment [Member]
Dec. 31, 2011
Machinery And Equipment [Member]
Dec. 31, 2012
Furniture And Fixtures [Member]
Dec. 31, 2011
Furniture And Fixtures [Member]
Dec. 31, 2012
Construction In Progress [Member]
Dec. 31, 2011
Construction In Progress [Member]
Dec. 31, 2012
Minimum [Member]
Building And Improvements [Member]
Dec. 31, 2012
Minimum [Member]
Machinery And Equipment [Member]
Dec. 31, 2012
Minimum [Member]
Furniture And Fixtures [Member]
Dec. 31, 2012
Maximum [Member]
Building And Improvements [Member]
Dec. 31, 2012
Maximum [Member]
Machinery And Equipment [Member]
Dec. 31, 2012
Maximum [Member]
Furniture And Fixtures [Member]
Property, Plant and Equipment [Line Items]                                    
Total property, plant and equipment $ 40,433,253 $ 39,642,298 $ 3,135,351 $ 3,114,330 $ 8,858,976 $ 8,779,969 $ 23,247,888 $ 23,266,325 $ 3,644,306 $ 3,966,579 $ 1,546,732 $ 515,095            
Less accumulated depreciation (25,958,340) (25,623,279)                                
Property, plant and equipment, net $ 14,474,913 $ 14,019,019                                
Estimated useful life                         7 years 3 years 5 years 40 years 15 years 10 years

Acquisition
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Acquisition
 12 Months Ended
Dec. 31, 2012
Acquisition [Abstract]  
Acquisition

NOTE 5 – ACQUISITION

 

On July 27, 2011, the Company acquired Patapsco Designs Limited of the UK (“Patapsco”). The purchase price totals $5,094,000, with cash acquired totaling $862,000.  The purchase price included initial consideration of $3,271,000, deferred consideration of $466,000 to be paid out no later than 18 months from the acquisition date, $656,000 in working capital adjustments, and $701,000 in contingent consideration.  The Company agreed to pay consideration up to $818,000 contingent upon the Patapsco business meeting gross margin and other non-financial targets, with the consideration to be paid out no later than two years from the acquisition date.  Although the maximum contingent consideration was $818,000, the Company had recognized $701,000 as the estimated fair value of the contingent consideration at the date of acquisition.  This contingent consideration was calculated based on the exchange rate at the date of acquisition and actual payments may differ based on fluctuations in the exchange rate between the dollar and the pound. At December 31,  2012, the Company has estimated liabilities of $770,000 related to outstanding consideration payments.


Acquisition (Narrative) (Details)
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Acquisition (Narrative) (Details) (USD $)
Dec. 31, 2012
Jul. 27, 2011
Acquisition [Abstract]    
Total purchase price of acquired entity   $ 5,094,000
Cash acquired in acquisition   862,000
Business acquisition, initial cash consideration paid   3,271,000
Business acquisition, deferred consideration   466,000
Business acquisition, working capital adjustment   656,000
Contingent consideration at fair value   701,000
Contingent consideration, maximum amount   818,000
Contingent consideration, estimated liabilities $ 770,000  

Goodwill And Other Intangible Assets
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Goodwill And Other Intangible Assets
 12 Months Ended
Dec. 31, 2012
Goodwill And Other Intangible Assets [Abstract]  
Goodwill And Other Intangible Assets

NOTE 6 – GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the years ended December 31, 2012 and 2011 by segment are as follows:

 

 

 

 

 

 

 

 

 

 

Suttle

Transition Networks

Total

 

 

 

 

 

 

 

 

January 1, 2011

 

$
1,271,986 

$
3,288,231 

$
4,560,217 

 

 

 

 

 

 

 

 

Impairment loss

 

 
(1,271,986)

 

 -

 
(1,271,986)

Acquisition

 

 

 -

 
2,702,340 

 
2,702,340 

 

 

 

 

 

 

 

 -

December 31, 2011

 

 

 -

 
5,990,571 

 
5,990,571 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 -

 
(33,637)

 
(33,637)

 

 

 

 

 

 

 

 

December 31, 2012

 

$

 -

$
5,956,934 

$
5,956,934 

 

 

 

 

 

 

 

 

Gross goodwill

 

 
1,271,986 

$
5,956,934 

$
7,228,920 

Accumulated impairment loss

 

 
(1,271,986)

 

 -

 
(1,271,986)

Balance at December 31, 2012

 

$

 -

$
5,956,934 

$
5,956,934 

 

During our fiscal quarter ended June 30, 2011, based on greater than expected decline in actual and forecasted profitability of legacy products in our Suttle business unit, as well as, significant project delays that occurred related to Suttle’s new technologies, we concluded that that these events and circumstances were indicators to require us to perform an interim goodwill impairment analysis of our Suttle business unit. This analysis included the determination of the reporting unit’s fair value primarily using discounted cash flows modeling. Based on the step one and step two analysis, considering Suttle’s reduced earnings and cash flow forecasts, the Company determined that Suttle’s goodwill was fully impaired and recorded a goodwill impairment for the Suttle segment of $1,272,000.  This non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described in Note 13.  There was no goodwill impairment recognized in 2012.

 

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, 2012

 

 

Gross Carrying Amount

Accumulated Amortization

Foreign Currency Translation

Net

 

 

 

 

 

 

Trademarks

 
81,785 
(16,346)
(1,018)
64,421 

Customer relationships

 
490,707 
(68,652)
(6,108)
415,947 

Technology

 
228,996 
(64,075)
(2,850)
162,071 

 

 
801,488 
(149,073)
(9,976)
642,439 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

Gross Carrying Amount

Accumulated Amortization

Foreign Currency Translation

Net

 

 

 

 

 

 

Trademarks

 
81,785 
(4,599)
(4,520)
72,666 

Customer relationships

 
490,707 
(19,316)
(27,114)
444,277 

Technology

 
228,996 
(18,029)
(12,652)
198,315 

 

 
801,488 
(41,944)
(44,286)
715,258 

 

 

 

 

 

 

 

Amortization expense on these identifiable intangible assets was $103,000 and $42,000 in 2012 and 2011, respectively. The amortization expense is included in selling, general and administrative expenses.


Goodwill And Other Intangible Assets (Tables)
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Goodwill And Other Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2012
Goodwill And Other Intangible Assets [Abstract]  
Schedule Of Changes In Carrying Value Of Goodwill

 

 

 

 

 

 

 

 

 

 

Suttle

Transition Networks

Total

 

 

 

 

 

 

 

 

January 1, 2011

 

$
1,271,986 

$
3,288,231 

$
4,560,217 

 

 

 

 

 

 

 

 

Impairment loss

 

 
(1,271,986)

 

 -

 
(1,271,986)

Acquisition

 

 

 -

 
2,702,340 

 
2,702,340 

 

 

 

 

 

 

 

 -

December 31, 2011

 

 

 -

 
5,990,571 

 
5,990,571 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 -

 
(33,637)

 
(33,637)

 

 

 

 

 

 

 

 

December 31, 2012

 

$

 -

$
5,956,934 

$
5,956,934 

 

 

 

 

 

 

 

 

Gross goodwill

 

 
1,271,986 

$
5,956,934 

$
7,228,920 

Accumulated impairment loss

 

 
(1,271,986)

 

 -

 
(1,271,986)

Balance at December 31, 2012

 

$

 -

$
5,956,934 

$
5,956,934 

 

Schedule Of Finite-Lived Intangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

 

Gross Carrying Amount

Accumulated Amortization

Foreign Currency Translation

Net

 

 

 

 

 

 

Trademarks

 
81,785 
(16,346)
(1,018)
64,421 

Customer relationships

 
490,707 
(68,652)
(6,108)
415,947 

Technology

 
228,996 
(64,075)
(2,850)
162,071 

 

 
801,488 
(149,073)
(9,976)
642,439 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

Gross Carrying Amount

Accumulated Amortization

Foreign Currency Translation

Net

 

 

 

 

 

 

Trademarks

 
81,785 
(4,599)
(4,520)
72,666 

Customer relationships

 
490,707 
(19,316)
(27,114)
444,277 

Technology

 
228,996 
(18,029)
(12,652)
198,315 

 

 
801,488 
(41,944)
(44,286)
715,258 

 

 

 

 

 

 

 


Goodwill And Other Intangible Assets (Narrative) (Details)
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Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Goodwill And Intangible Assets [Line Items]    
Impairment loss   $ 1,271,986
Amortization expense 103,000 42,000
Suttle [Member]
    
Goodwill And Intangible Assets [Line Items]    
Impairment loss   $ 1,271,986

Goodwill And Other Intangible Assets (Schedule Of Changes In Carrying Value Of Goodwill) (Details)
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Goodwill And Other Intangible Assets (Schedule Of Changes In Carrying Value Of Goodwill) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Goodwill [Line Items]    
Goodwill, beginning balance $ 5,990,571 $ 4,560,217
Impairment loss   (1,271,986)
Acquisition   2,702,340
Foreign currency translation (33,637)  
Goodwill, ending balance 5,956,934 5,990,571
Gross goodwill 7,228,920  
Accumulated impairment loss (1,271,986)  
Balance at December 31, 2012 5,956,934 5,990,571
Suttle [Member]
    
Goodwill [Line Items]    
Goodwill, beginning balance   1,271,986
Impairment loss   (1,271,986)
Gross goodwill 1,271,986  
Accumulated impairment loss (1,271,986)  
Transition Networks [Member]
    
Goodwill [Line Items]    
Goodwill, beginning balance 5,990,571 3,288,231
Acquisition   2,702,340
Foreign currency translation (33,637)  
Goodwill, ending balance 5,956,934 5,990,571
Gross goodwill 5,956,934  
Balance at December 31, 2012 $ 5,956,934 $ 5,990,571

Goodwill And Other Intangible Assets (Schedule Of Finite-Lived Intangible Assets) (Details)
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Goodwill And Other Intangible Assets (Schedule Of Finite-Lived Intangible Assets) (Details) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 801,488 $ 801,488
Accumulated Amortization (149,073) (41,944)
Foreign Currency Translation (9,976) (44,286)
Net 642,439 715,258
Trademarks [Member]
    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 81,785 81,785
Accumulated Amortization (16,346) (4,599)
Foreign Currency Translation (1,018) (4,520)
Net 64,421 72,666
Customer Relationships [Member]
    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 490,707 490,707
Accumulated Amortization (68,652) (19,316)
Foreign Currency Translation (6,108) (27,114)
Net 415,947 444,277
Technology [Member]
    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 228,996 228,996
Accumulated Amortization (64,075) (18,029)
Foreign Currency Translation (2,850) (12,652)
Net $ 162,071 $ 198,315

Employee Retirement Benefits
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Employee Retirement Benefits
 12 Months Ended
Dec. 31, 2012
Employee Benefit Plans [Abstract]  
Employment Retirement Benefits

NOTE 7 - 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 2012,  2011 and 2010 were $471,000, $479,000, and $456,000, respectively.

 

The Company’s U.K.-based subsidiary Austin Taylor maintains defined benefit pension plans that cover approximately seven 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, 2012 and 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

2011

Change in benefit obligation:

 

 

 

 

 

 

Benefit obligation at the beginning of the year

 

$         

5,150,000 

 

$
4,919,000 

Service cost

 

 
275,000 

 

 
36,000 

Interest cost

 

 
244,000 

 

 
240,000 

Participant contributions

 

 
0 

 

 
15,000 

Augmentations

 

 
0 

 

 
45,000 

Actuarial (gains)/losses

 

 
325,000 

 

 
62,000 

Benefits paid

 

 
(552,000)

 

 
(162,000)

Foreign currency gains

 

 
233,000 

 

 
(5,000)

Benefit obligation at the end of the year

 

 
5,675,000 

 

 
5,150,000 

 

 

 

 

 

 

 

Change in plan assets:

 

 

 

 

 

 

Fair value of plan assets at beginning of year

 

 
6,056,000 

 

 
5,269,000 

Actual return on plan assets

 

 
(289,000)

 

 
892,000 

Employer contributions

 

 
58,000 

 

 
48,000 

Participant contributions

 

 
0 

 

 
15,000 

Benefits paid

 

 
(552,000)

 

 
(162,000)

Foreign currency losses

 

 
274,000 

 

 
(6,000)

Fair value of plan assets at end of year

 

 
5,547,000 

 

 
6,056,000 

 

 

 

 

 

 

 

Funded status at end of year – net asset /(liability)

 

$
(128,000)

 

$
906,000 

 

 

Weighted average assumptions used to determine net periodic pension costs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 
4.3% 

 

 
4.7% 

Expected return on assets

 

 
5.1% 

 

 
4.2% 

 

The plans are funded through UK government gilts and an insurance contract both recorded in the financial statements at fair value. The related amounts for each of these investments were $3,517,000 and $2,030,000 as of December 31, 2012 and were determined to be level 2 and level 3 investments, respectively. The related amounts for each of these investments were $3,193,000 and $2,864,000 as of December 31, 2011 and were determined to be level 2 and level 3 investments, respectively. Level 2 investments are valued based on observable inputs such as quoted prices for similar instruments and quoted prices in markets that are not active. Level 3 investments are valued based on significant unobservable inputs.

 

The Company does not expect any plan assets to be returned to the Company during the twelve months subsequent to December 31, 2012.

 

The Company expects to make contributions of $50,000 to the plan in 2013.    

 

The Company estimates its future pension benefit payments will be as follows:

 

 

 

 

 

 

 

2013

$
462,000 

2014

 
494,000 

2015

 
262,000 

2016

 
234,000 

2017

 
489,000 

2018 thru 2022

 
1,998,000 

 

Components of the Company’s net periodic pension costs are:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

2011

 

 

2010

Service cost

 

$
275,000 

 

$
36,000 

 

$
46,000 

Interest cost

 

 
244,000 

 

 
240,000 

 

 
258,000 

Expected return on assets

 

 
(262,000)

 

 
(267,000)

 

 
(244,000)

Amortization of prior service cost

 

 

 -

 

 
46,000 

 

 

 

Net periodic pension cost

 

$
257,000 

 

$
55,000 

 

$
60,000 

 


Employee Benefit Plans (Tables)
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Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2012
Employee Benefit Plans [Abstract]  
Summary Of The Balance Sheet Impact, Including Benefit Obligations, Assets And Funded Status Of The Pension Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

2011

Change in benefit obligation:

 

 

 

 

 

 

Benefit obligation at the beginning of the year

 

$         

5,150,000 

 

$
4,919,000 

Service cost

 

 
275,000 

 

 
36,000 

Interest cost

 

 
244,000 

 

 
240,000 

Participant contributions

 

 
0 

 

 
15,000 

Augmentations

 

 
0 

 

 
45,000 

Actuarial (gains)/losses

 

 
325,000 

 

 
62,000 

Benefits paid

 

 
(552,000)

 

 
(162,000)

Foreign currency gains

 

 
233,000 

 

 
(5,000)

Benefit obligation at the end of the year

 

 
5,675,000 

 

 
5,150,000 

 

 

 

 

 

 

 

Change in plan assets:

 

 

 

 

 

 

Fair value of plan assets at beginning of year

 

 
6,056,000 

 

 
5,269,000 

Actual return on plan assets

 

 
(289,000)

 

 
892,000 

Employer contributions

 

 
58,000 

 

 
48,000 

Participant contributions

 

 
0 

 

 
15,000 

Benefits paid

 

 
(552,000)

 

 
(162,000)

Foreign currency losses

 

 
274,000 

 

 
(6,000)

Fair value of plan assets at end of year

 

 
5,547,000 

 

 
6,056,000 

 

 

 

 

 

 

 

Funded status at end of year – net asset /(liability)

 

$
(128,000)

 

$
906,000 

 

Weighted Average Assumptions Used To Determine Net Periodic Pension Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 
4.3% 

 

 
4.7% 

Expected return on assets

 

 
5.1% 

 

 
4.2% 

 

Summary Of Estimated Future Pension Benefit Payments

 

 

 

 

 

 

2013

$
462,000 

2014

 
494,000 

2015

 
262,000 

2016

 
234,000 

2017

 
489,000 

2018 thru 2022

 
1,998,000 

 

Summary Of Components Of Net Periodic Benefit Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

2011

 

 

2010

Service cost

 

$
275,000 

 

$
36,000 

 

$
46,000 

Interest cost

 

 
244,000 

 

 
240,000 

 

 
258,000 

Expected return on assets

 

 
(262,000)

 

 
(267,000)

 

 
(244,000)

Amortization of prior service cost

 

 

 -

 

 
46,000 

 

 

 

Net periodic pension cost

 

$
257,000 

 

$
55,000 

 

$
60,000 

 


Employee Benefit Plans (Narrative) (Details)
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Employee Benefit Plans (Narrative) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]      
Maximum matching percentage by employer 6.00%    
Contributions to the plan $ 471,000 $ 479,000 $ 456,000
Expected contributions in 2013 50,000    
Level 2 [Member]
      
Defined Benefit Plan Disclosure [Line Items]      
Investments used to fund the plan 3,517,000 3,193,000  
Level 3 [Member]
      
Defined Benefit Plan Disclosure [Line Items]      
Investments used to fund the plan $ 2,030,000 $ 2,864,000  

Employee Benefit Plans (Summary Of The Balance Sheet Impact, Including Benefit Obligations, Assets And Funded Status Of The Pension Plan) (Details)
v0.0.0.0
Employee Benefit Plans (Summary Of The Balance Sheet Impact, Including Benefit Obligations, Assets And Funded Status Of The Pension Plan) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Employee Benefit Plans [Abstract]      
Benefit obligation at the beginning of the year $ 5,150,000 $ 4,919,000  
Service cost 275,000 36,000 46,000
Interest cost 244,000 240,000 258,000
Participant contributions 0 15,000  
Augmentations 0 45,000  
Actuarial (gains)/losses 325,000 62,000  
Benefits paid (552,000) (162,000)  
Foreign currency gains 233,000 (5,000)  
Benefit obligation at the end of the year 5,675,000 5,150,000 4,919,000
Fair value of plan assets at beginning of year 6,056,000 5,269,000  
Actual return on plan assets (289,000) 892,000  
Employer contributions 58,000 48,000  
Participant contributions 0 15,000  
Benefits paid (552,000) (162,000)  
Foreign currency losses 274,000 (6,000)  
Fair value of plan assets at end of year 5,547,000 6,056,000 5,269,000
Funded status at end of year - net asset /(liability) $ (128,000) $ 906,000  

Employee Benefit Plans (Weighted Average Assumptions Used To Determine Net Periodic Pension Costs) (Details)
v0.0.0.0
Employee Benefit Plans (Weighted Average Assumptions Used To Determine Net Periodic Pension Costs) (Details)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Employee Benefit Plans [Abstract]    
Discount rate 4.30% 4.70%
Expected return on plan assets 5.10% 4.20%

Employee Benefit Plans (Summary Of Estimated Future Pension Benefit Payments) (Details)
v0.0.0.0
Employee Benefit Plans (Summary Of Estimated Future Pension Benefit Payments) (Details) (USD $)
Dec. 31, 2012
Employee Benefit Plans [Abstract]  
2013 $ 462,000
2014 494,000
2015 262,000
2016 234,000
2017 489,000
2018 thru 2022 $ 1,998,000

Employee Benefit Plans (Summary Of Components Of Net Periodic Benefit Cost) (Details)
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Employee Benefit Plans (Summary Of Components Of Net Periodic Benefit Cost) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Employee Benefit Plans [Abstract]      
Service cost $ 275,000 $ 36,000 $ 46,000
Interest cost 244,000 240,000 258,000
Expected return on plan assets (262,000) (267,000) (244,000)
Amortization of prior service cost   46,000  
Net periodic pension cost $ 257,000 $ 55,000 $ 60,000

Commitments And Contingencies
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Commitments And Contingencies
 12 Months Ended
Dec. 31, 2012
Commitments And Contingencies [Abstract]  
Commitments And Contingencies

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

Operating leases:  The Company leases land, buildings and equipment under operating leases with original terms from 1 to 5 years.  Total rent expense was $443,000, $421,000 and $402,000 in 2012,  2011 and 2010 respectively.   Sublease income received was  $0,  $0 and $8,000 in 2012,  2011 and 2010 respectively.   At December 31, 2012, the Company was obligated under noncancelable operating leases to make minimum annual future lease payments as follows:

 

 

 

 

 

 

 

 

 

Year Ending December 31:

 

 

 

2013

 

$  
305,000 

2014

 

 
238,000 

2015

 

 
232,000 

2016

 

 
83,000 

 

 

$ 

858,000 

 

Long-term debt:  The mortgage on the Company’s headquarters building is payable in monthly installments and carries an interest rate of 6.83%.  The mortgage matures on March 1, 2016.  The outstanding balance on the mortgage was $1,575,000 at December 31, 2012. The mortgage is secured by the building.

 

The annual requirements for principal payments on the mortgage are as follows:

 

 

 

 

 
2013 
457,000 
2014 
490,000 
2015 
524,000 
2016 
104,000 

Line of credit:    The Company has a $10,000,000 line of credit from Wells Fargo Bank.  The Company had no outstanding borrowings against the line of credit at December 31, 2012 and 2011 and the entire credit line is available for use.  Interest on borrowings on the credit line is at LIBOR plus 1.1% (1.4% at December 31, 2012). The credit agreement expires October 31, 2014 and is secured by assets of the Company.  Our credit agreement contains financial covenants including current ratio, net income, and tangible net worth minimums.  The Company was in compliance with all financial covenants as of December 31, 2012.

As of December 31, 2012, the Company had no other material commitments (either cancelable or non-cancelable) for capital expenditures or other purchase commitments related to ongoing operations.

 

Long-term compensation plans:    The Company has a long term incentive plan.  The plan provides long-term competitive compensation to enable the Company to attract and retain qualified executive talent and to reward employees for achieving goals and improving company performance. The plan provides grants of “performance units” made at the beginning of performance periods and paid at the end of the period if performance goals are met. Awards were previously made every other year and are paid following the end of the cycle with annual vesting.  Payment in the case of retirement, disability or death will be on a pro rata basis.  The Company accrued (income)/expense of $ (16,000), $286,000 and $926,000 in 2012,  2011 and 2010, respectively.  Accrual balances for long-term compensation plans at December 31, 2012 and 2011  were  $350,000 and $2,024,000, respectively. Awards paid were $1,657,000 in 2012, $0 in 2011 and $1,332,000 in 2010.  Awards for the 2010 to 2013 and the 2011 to 2013 cycles will be paid out 50% in cash and 50% in stock and awards for the 2012 to 2014 cycles will be paid out 25% in cash and 75% in stock.  The stock portion of these awards are treated as equity plans and included within the Stock Compensation footnote below.

 

Other contingencies:  In the ordinary course of business, the Company is exposed to legal actions and claims and incurs costs to defend against such actions and claims.  Company management is not aware of any outstanding or pending legal actions or claims that would materially affect the Company’s financial position, results of operations, or cash flows.


Commitments And Contingencies (Tables)
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Commitments And Contingencies (Tables)
 12 Months Ended
Dec. 31, 2012
Commitments And Contingencies [Abstract]  
Minimum Future Lease Payments

 

 

 

 

 

 

 

 

Year Ending December 31:

 

 

 

2013

 

$  
305,000 

2014

 

 
238,000 

2015

 

 
232,000 

2016

 

 
83,000 

 

 

$ 

858,000 

 

Annual Requirements For Principal Payments On The Mortgage

 

 

 

 
2013 
457,000 
2014 
490,000 
2015 
524,000 
2016 
104,000 

 


Commitments And Contingencies (Narrative) (Details)
v0.0.0.0
Commitments And Contingencies (Narrative) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Rent expense $ 443,000 $ 421,000 $ 402,000
Sublease income 0 0 8,000
Interest rate 6.83%    
Outstanding balance on the mortgage 1,575,000    
Line of credit 10,000,000    
Line of credit, basis spread on variable rate 1.10%    
Line of credit facility, interest rate at period end 1.40%    
Accrued (income)/expense for long-term compensation plans (16,000) 286,000 926,000
Accrual for long-term compensation plans 350,000 2,024,000  
Long-term compensation plan, payments for awards $ 1,657,000 $ 0 $ 1,332,000
Long-term compensation plan, percentage paid out in cash, cycle 1 50.00%    
Long-term compensation plan, percentage paid out in stock, cycle 1 50.00%    
Long-term compensation plan, percentage paid out in cash, cycle 2 25.00%    
Long-term compensation plan, percentage paid out in stock, cycle 2 75.00%    
Maximum [Member]
      
Operating lease terms 5 years    
Minimum [Member]
      
Operating lease terms 1 year    

Commitments And Contingencies (Minimum Future Lease Payments) (Details)
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Commitments And Contingencies (Minimum Future Lease Payments) (Details) (USD $)
Dec. 31, 2012
Commitments And Contingencies [Abstract]  
2013 $ 305,000
2014 238,000
2015 232,000
2016 83,000
Total minimum future lease payments $ 858,000

Commitments And Contingencies (Annual Requirements For Principal Payments On The Mortgage) (Details)
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Commitments And Contingencies (Annual Requirements For Principal Payments On The Mortgage) (Details) (USD $)
Dec. 31, 2012
Commitments And Contingencies [Abstract]  
2013 $ 457,000
2014 490,000
2015 524,000
2016 $ 104,000

Stock Compensation
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Stock Compensation
 12 Months Ended
Dec. 31, 2012
Stock Compensation [Abstract]  
Stock Compensation

NOTE 9 – STOCK COMPENSATION

 

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 December  31,  2012,  773,026 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 3,000 shares of common stock were automatically granted to each non-employee director concurrent with annual meetings of shareholders in 2010 and earlier years and vested immediately. The exercise price of options granted was 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.   

 

The Director Plan was suspended as of May 19, 2011 to prohibit automatic option grants in 2011 in connection with seeking and receiving shareholder approval of the 2011 Incentive Plan,  at the 2011 Annual Meeting of Shareholders. As shareholder approval was received, the Board amended the Director Plan to prohibit any future option awards under that plan on August 11, 2011. Stock options were granted to non-employee directors for 0,  0, and 18,000 shares in 2012,  2011 and 2010, respectively.

 

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 Shareholders Meeting, 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. 

 

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 paid out 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 number of shares earned will be paid 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 number of shares earned by the respective executive employees were issued in the first quarter of 2012.

 

At December 31,  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 154,430 shares reserved for issuance under the Stock Plan. The Company did not award stock options or deferred stock under this plan in 2012.

 

Stock Options Outstanding

 

The following table summarizes changes in the number of outstanding stock options under the Director Plan and Stock Plan during the three years ended December 31, 2012. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average

 

Weighted average

 

 

 

exercise price

 

remaining

 

Options

 

per share

 

contractual term

Outstanding – December 31, 2009
189,000 

 

$

 
9.77 

 

4.75 years

Awarded
18,000 

 

 

 
11.82 

 

 

Exercised
(21,000)

 

 

 
8.70 

 

 

Forfeited
(24,000)

 

 

 
14.13 

 

 

Outstanding – December 31, 2010
162,000 

 

$

 
9.49 

 

5.33 years

Awarded
96,250 

 

 

 
14.16 

 

 

Exercised
(9,000)

 

 

 
8.10 

 

 

Forfeited
(12,430)

 

 

 
11.23 

 

 

Outstanding – December 31, 2011
236,820 

 

$

 
11.35 

 

5.18 years

Awarded
92,223 

 

 

 
13.10 

 

 

Exercised
(12,000)

 

 

 
7.13 

 

 

Forfeited
(5,890)

 

 

 
10.58 

 

 

Outstanding – December 31, 2012
311,153 

 

 

 
12.05 

 

4.99 years

 

 

 

 

 

 

 

 

Excercisable at December 31, 2012
180,185 

 

$

 
11.05 

 

4.33 years

Expected to vest December 31, 2012
308,405 

 

 

 
12.03 

 

4.98 years

 

The fair value of awards issued under the Company’s stock option plan is estimated at grant date using the Black-Scholes option-pricing model.  The following table displays the assumptions used in the model.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

2012

 

2011

 

2010

Expected volatility
31.2% 

 
27.7% 

 
27.3% 

Risk free interest rate
2.3% 

 
3.4% 

 
3.7% 

Expected holding period

6 years

 

6 years

 

7 years

Dividend yield
4.6% 

 
4.2% 

 
4.7% 

 

Total unrecognized compensation expense was $161,000, $102,000, and $0 for the years ending December 31, 2012,  2011 and 2010, respectively, which is expected to be recognized over the next 3.0 years.  The aggregate intrinsic value of all outstanding options, exercisable options, and options expected to vest (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) was $108,000 based on the Company’s stock price at December 31, 2012.  The intrinsic value of options exercised during the year was $59,000, $61,000 and $183,000 in 2012,  2011 and 2010, respectively.  Net cash proceeds from the exercise of all stock options were $86,000,  $73,000 and $0 for 2012, 2011 and 2010, respectively.  The following table summarizes the status of stock options outstanding at December 31, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

Weighted

 

 

 

 

Remaining

 

Average

Range of Exercise Prices

 

Shares

 

Option Life

 

Exercise Price

$7.13 to $8.64

 
30,000 

 

0.9 years

 

$
7.82 

$8.65 to $9.99

 
33,000 

 

5 years

 

 
9.67 

$10.00 to $12.00

 
69,000 

 

4.9 years

 

 
10.95 

$12.01 to $14.50

 
179,153 

 

5.7 years

 

 
13.61 

 

The Company receives an income tax benefit related to the gains received by officers and key employees who make disqualifying dispositions of stock received on exercise of qualified incentive stock options and on non-qualified options.  The amount of tax benefit received by the Company was $21,000, $22,000 and $35,000 in 2012,  2011 and 2010 respectively.  The tax benefit amounts have been credited to additional paid-in capital.

 

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, 2010 to December 31,  2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

 

 

 

Grant Date

 

 

 

Shares

 

Fair Value

Outstanding – December 31, 2010

 

 

 -

 

$

 -

Granted

 

 
105,836 

 

 
15.15 

Vested

 

 
(2,657)

 

 
15.40 

Forfeited

 

 
(31,330)

 

 
15.27 

Outstanding – December 31, 2011

 

 
71,849 

 

 
15.14 

Granted

 

 
105,698 

 

 
13.49 

Vested

 

 

 -

 

 

 -

Forfeited

 

 
(16,757)

 

 
13.95 

Outstanding – December 31, 2012

 

 
160,790 

 

 
14.16 

 

The grant date fair value is calculated based on the Company’s closing stock price as of the grant date. As of December 31, 2012 and 2011, the total unrecognized compensation expense related to the deferred stock shares was $297,000 and $302,000, respectively and is expected to be recognized over a weighted-average period of 1.7 years.

 

Compensation Expense

 

Share-based compensation expense is recognized based on the fair value of awards granted over the vesting period of the award.  Share-based compensation expense recognized for 2012,  2011 and 2010 was $303,000, $449,000 and $39,000 before income taxes and $197,000, $292,000 and $25,000 after income taxes, respectively. Share-based compensation expense is recorded as a part of selling, general and administrative expenses.

 

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 December 31,  2012.  The ESPP is considered compensatory under current rules.  At December 31,  2012, after giving effect to the shares issued as of that date, 52,564 shares remain available for purchase under the ESPP.

 

Employee  Stock  Ownership  Plan (ESOP)

 

All eligible employees of the Company participate in the ESOP after completing one year of service.  Contributions are allocated to each participant based on compensation and vest 30% after three years of service and incrementally thereafter, with full vesting after seven years.  At December 31, 2012, the ESOP held 601,281 shares of the Company’s common stock, all of which have been allocated to the accounts of eligible employees.  Contributions to the plan are determined by the Board of Directors and can be made in cash or shares of the Company’s stock. The 2012 ESOP contribution was $463,819 for which the Company issued 44,598 shares in March 2013.  The 2011 ESOP contribution was $508,198 for which the Company issued 36,145 shares in 2012.  The Company’s 2010 ESOP contribution was $316,027 for which the Company issued 22,493 shares of common stock to the ESOP in 2011. 


Stock Compensation (Tables)
v0.0.0.0
Stock Compensation (Tables)
 12 Months Ended
Dec. 31, 2012
Stock Compensation [Abstract]  
Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average

 

Weighted average

 

 

 

exercise price

 

remaining

 

Options

 

per share

 

contractual term

Outstanding – December 31, 2009
189,000 

 

$

 
9.77 

 

4.75 years

Awarded
18,000 

 

 

 
11.82 

 

 

Exercised
(21,000)

 

 

 
8.70 

 

 

Forfeited
(24,000)

 

 

 
14.13 

 

 

Outstanding – December 31, 2010
162,000 

 

$

 
9.49 

 

5.33 years

Awarded
96,250 

 

 

 
14.16 

 

 

Exercised
(9,000)

 

 

 
8.10 

 

 

Forfeited
(12,430)

 

 

 
11.23 

 

 

Outstanding – December 31, 2011
236,820 

 

$

 
11.35 

 

5.18 years

Awarded
92,223 

 

 

 
13.10 

 

 

Exercised
(12,000)

 

 

 
7.13 

 

 

Forfeited
(5,890)

 

 

 
10.58 

 

 

Outstanding – December 31, 2012
311,153 

 

 

 
12.05 

 

4.99 years

 

 

 

 

 

 

 

 

Excercisable at December 31, 2012
180,185 

 

$

 
11.05 

 

4.33 years

Expected to vest December 31, 2012
308,405 

 

 

 
12.03 

 

4.98 years

 

Valuation Assumptions Of Stock Option Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

2012

 

2011

 

2010

Expected volatility
31.2% 

 
27.7% 

 
27.3% 

Risk free interest rate
2.3% 

 
3.4% 

 
3.7% 

Expected holding period

6 years

 

6 years

 

7 years

Dividend yield
4.6% 

 
4.2% 

 
4.7% 

 

Summary Of The Status Of Stock Options Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

Weighted

 

 

 

 

Remaining

 

Average

Range of Exercise Prices

 

Shares

 

Option Life

 

Exercise Price

$7.13 to $8.64

 
30,000 

 

0.9 years

 

$
7.82 

$8.65 to $9.99

 
33,000 

 

5 years

 

 
9.67 

$10.00 to $12.00

 
69,000 

 

4.9 years

 

 
10.95 

$12.01 to $14.50

 
179,153 

 

5.7 years

 

 
13.61 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

 

 

 

Grant Date

 

 

 

Shares

 

Fair Value

Outstanding – December 31, 2010

 

 

 -

 

$

 -

Granted

 

 
105,836 

 

 
15.15 

Vested

 

 
(2,657)

 

 
15.40 

Forfeited

 

 
(31,330)

 

 
15.27 

Outstanding – December 31, 2011

 

 
71,849 

 

 
15.14 

Granted

 

 
105,698 

 

 
13.49 

Vested

 

 

 -

 

 

 -

Forfeited

 

 
(16,757)

 

 
13.95 

Outstanding – December 31, 2012

 

 
160,790 

 

 
14.16 

 


Stock Compensation (Narrative) (Details)
v0.0.0.0
Stock Compensation (Narrative) (Details) (USD $)
 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Mar. 31, 2012
2011 Executive Incentive Compensation Plan [Member]
Dec. 31, 2012
2011 Executive Incentive Compensation Plan [Member]
Mar. 25, 2011
2011 Executive Incentive Compensation Plan [Member]
Dec. 31, 2012
1992 Stock Plan [Member]
Dec. 31, 2012
Employee Stock Purchase Plan [Member]
Dec. 31, 2012
Employee Stock Ownership Plan [Member]
Dec. 31, 2011
Key Executive Employees [Member]
1992 Stock Plan [Member]
Jun. 30, 2012
Non-Employee Directors [Member]
2011 Executive Incentive Compensation Plan [Member]
item
Dec. 31, 2012
Non-Employee Directors [Member]
Stock Option Plan For Directors [Member]
Dec. 31, 2011
Non-Employee Directors [Member]
Stock Option Plan For Directors [Member]
Dec. 31, 2010
Non-Employee Directors [Member]
Stock Option Plan For Directors [Member]
Dec. 31, 2012
Deferred Stock [Member]
Dec. 31, 2011
Deferred Stock [Member]
Mar. 31, 2012
Deferred Stock [Member]
Key Employees [Member]
2011 Executive Incentive Compensation Plan [Member]
Mar. 31, 2012
Deferred Stock [Member]
Key Executive Employees [Member]
2011 Executive Incentive Compensation Plan [Member]
Dec. 31, 2011
Deferred Stock [Member]
Key Executive Employees [Member]
1992 Stock Plan [Member]
Dec. 31, 2011
Deferred Stock [Member]
Tied To Achievement Of 2010 Performance Goals [Member]
Key Employees [Member]
1992 Stock Plan [Member]
Dec. 31, 2011
Deferred Stock [Member]
Tied To Achievement Of 2011 To 2013 Performance Goals [Member]
Key Employees [Member]
1992 Stock Plan [Member]
Jun. 30, 2012
Restricted Stock Units (RSUs) [Member]
2011 Executive Incentive Compensation Plan [Member]
Jun. 30, 2012
Restricted Stock Units (RSUs) [Member]
Non-Employee Directors [Member]
2011 Executive Incentive Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                              
Number of awards authorized           1,000,000                                  
Awards granted       92,223               0 0 18,000 105,698 105,836 94,242 9,456 12,156 16,092 77,588 25,879  
Award expiration period       7 years           7 years       10 years                  
Award vesting percentage       25.00%         30.00% 25.00%                          
Minimum percentage of revenue growth required to earn deferred stock       150.00%           150.00%                          
Number of employees receiving awards                     7                        
Value of awards granted                                             $ 40,000
Award vesting period                 7 years                           1 year
Inital award vesting period                 3 years                            
Awards avaliable for grant         773,026   154,430 52,564                              
Number of options granted                   96,250                          
Number of shares automatically granted                           3,000                  
Unrecognized compensation expense related to stock options 161,000 102,000 0                                        
Recognition period for unrecognized compensation expense 3 years                           1 year 8 months 12 days                
Aggregate intrinsic value of options outstanding 108,000                                            
Unrecognized compensation expense related to deferred stock shares                             297,000 302,000              
Excess tax benefits from exercise of stock options 21,000 22,000 35,000                                        
Net cash proceeds from exercise of stock options 86,000 73,000 0                                        
Intrinsic value of all options exercised 59,000 61,000 183,000                                        
Share based compensation expense before income taxes 303,000 449,000 39,000                                        
Share based compensation expense after income taxes 197,000 292,000 25,000                                        
Percentage of price of common stock at which employees are able to acquire               90.00%                              
Requisite service period                 1 year                            
Shares of ESOP allocated to accounts of eligible employees 601,281                                            
ESOP contributions $ 463,819 $ 508,198 $ 316,027                                        
Issuance of common stock to Employee Stock Ownership Plan, Shares 44,598 36,145 22,493                                        

Stock Compensation (Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan) (Details)
v0.0.0.0
Stock Compensation (Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Stock Compensation [Abstract]        
Options, Outstanding 236,820 162,000 189,000  
Options, Awarded 92,223 96,250 18,000  
Options, Exercised (12,000) (9,000) (21,000)  
Options, Forfeited (5,890) (12,430) (24,000)  
Options, Outstanding 311,153 236,820 162,000 189,000
Options, Exercisable at December 31, 2012 180,185      
Options, Expected to vest at December 31, 2012 308,405      
Weighted average exercise price per share, Outstanding $ 11.35 $ 9.49 $ 9.77  
Weighted average exercise price per share, Awarded $ 13.10 $ 14.16 $ 11.82  
Weighted average exercise price per share, Exercised $ 7.13 $ 8.10 $ 8.70  
Weighted average exercise price per share, Forfeited $ 10.58 $ 11.23 $ 14.13  
Weighted average exercise price per share, Outstanding $ 12.05 $ 11.35 $ 9.49 $ 9.77
Weighted average exercise price per share, Exercisable at December 31, 2012 $ 11.05      
Weighted average exercise price per share, Expected to vest at December 31, 2012 $ 12.03      
Options, Outstanding - Weighted average remaining contractual term 4 years 11 months 27 days 5 years 2 months 5 days 5 years 3 months 29 days 4 years 9 months
Options, Excercisable at December 31, 2012 - Weighted average remaining contractual term 4 years 3 months 29 days      
Options, Expected to vest December 31, 2012 - Weighted average remaining contractual term 4 years 11 months 23 days      

Stock Compensation (Valuation Assumptions Of Stock Option Plan) (Details)
v0.0.0.0
Stock Compensation (Valuation Assumptions Of Stock Option Plan) (Details)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Stock Compensation [Abstract]      
Expected volatility rate 31.20% 27.70% 27.30%
Risk free interest rate 2.30% 3.40% 3.70%
Expected holding period 6 years 6 years 7 years
Dividend yield 4.60% 4.20% 4.70%

Stock Compensation (Summary Of The Status Of Stock Options Outstanding) (Details)
v0.0.0.0
Stock Compensation (Summary Of The Status Of Stock Options Outstanding) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
$7.13 to $8.64 [Member]
  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Range of Exercise Prices, lower limit $ 7.13
Range of Exercise Prices, upper limit $ 8.64
Shares 30,000
Weighted Average Remaining Option Life 10 months 24 days
Weighted Average Exercise Price $ 7.82
$8.65 to $9.99 [Member]
  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Range of Exercise Prices, lower limit $ 8.65
Range of Exercise Prices, upper limit $ 9.99
Shares 33,000
Weighted Average Remaining Option Life 5 years
Weighted Average Exercise Price $ 9.67
$10.00 to $12.00 [Member]
  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Range of Exercise Prices, lower limit $ 10.00
Range of Exercise Prices, upper limit $ 12.00
Shares 69,000
Weighted Average Remaining Option Life 4 years 10 months 24 days
Weighted Average Exercise Price $ 10.95
$12.01 to $14.50 [Member]
  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Range of Exercise Prices, lower limit $ 12.01
Range of Exercise Prices, upper limit $ 14.50
Shares 179,153
Weighted Average Remaining Option Life 5 years 8 months 12 days
Weighted Average Exercise Price $ 13.61

Stock Compensation (Schedule Of Changes In The Number Of Deferred Stock Shares Under The Stock Plan And Incentive Plan) (Details)
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Stock Compensation (Schedule Of Changes In The Number Of Deferred Stock Shares Under The Stock Plan And Incentive Plan) (Details) (Deferred Stock [Member], USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Deferred Stock [Member]
    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Shares, Outstanding 71,849  
Shares, Granted 105,698 105,836
Shares, Vested   (2,657)
Shares, Forfeited (16,757) (31,330)
Shares, Outstanding 160,790 71,849
Weighted Average Grant Date Fair Value, Outstanding $ 15.14  
Weighted Average Grant Date Fair Value, Granted $ 13.49 $ 15.15
Weighted Average Grant Date Fair Value, Vested   $ 15.40
Weighted Average Grant Date Fair Value, Forfeited $ 13.95 $ 15.27
Weighted Average Grant Date Fair Value, Outstanding $ 14.16 $ 15.14

Common Stock
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Common Stock
 12 Months Ended
Dec. 31, 2012
Common Stock [Abstract]  
Common Stock

NOTE 10 – COMMON STOCK

 

PURCHASES OF COMMUNICATIONS SYSTEMS, INC. COMMON STOCK

 

In October 2008, the Company’s Board of Directors authorized the repurchase of shares of the Company’s stock pursuant to Exchange Act Rule 10b-18 on the open market, in block trades or in private transactions. In 2012, the Company purchased and retired 70,028 shares at a cost of $758,000.  At December 31, 2012,  411,910 additional shares could be repurchased under outstanding Board authorizations.

 

SHAREHOLDER RIGHTS PLAN

 

On December 23, 2009 the Board of Directors adopted a shareholders’ rights plan.  Under this plan, the Board of Directors declared a distribution of one right per share of common stock.  Each right entitles the holder to purchase 1/100th of a share of a new series of Junior Participating Preferred Stock of the Company at an initial exercise price of $41.  The rights expire on December 23, 2019.  The rights will become exercisable only following the acquisition by a person or group, without the prior consent of the Board of Directors, of 16.5% or more of the Company’s voting stock, or following the announcement of a tender offer or exchange offer to acquire an interest of 16.5% or more.  If the rights become exercisable, each rightholder will be entitled to purchase, at the exercise price, common stock with a market value equal to twice the exercise price.  Should the Company be acquired, each right would entitle the holder to purchase, at the exercise price, common stock of the acquiring company with a market value equal to twice the exercise price.  Any rights owned by the acquiring person or group would become void.


Common Stock (Details)
v0.0.0.0
Common Stock (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 23, 2009
Common Stock [Abstract]    
Number of shares purchased and retired 70,028  
Cost of shares repurchased and retired $ 758,000  
Remaining number of shares authorized to be repurchased 411,910  
Number of rights distributed for each share of common stock   1
Number of securities into which each right may be converted   0.01
Exercise price of right   41
Percentage of common stock required to be purchased for rights to become exercisable   16.50%

Income Taxes
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Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Taxes [Abstract]  
Income Taxes

NOTE 11 - INCOME TAXES

 

Income tax expense from continuing operations consists of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

 

2012

 

2011

 

2010

Currently payable income taxes:

 

 

 

 

 

 

 

 

 

Federal

 

$
1,669,000 

 

$
5,609,000 

 

$
5,906,000 

State

 

 
141,000 

 

 
414,000 

 

 
581,000 

Foreign

 

 
(18,000)

 

 
103,000 

 

 
(50,000)

 

 

 
1,792,000 

 

 
6,126,000 

 

$
6,437,000 

 

 

 

 

 

 

 

 

 

 

Deferred income taxes (benefit):

 

 

 

 

 

 

 

 

 

Federal

 

$
(542,000)

 

$
1,204,000 

 

$
(522,000)

State

 

 
(33,000)

 

 
72,000 

 

 
(10,000)

Foreign

 

 
(57,000)

 

 
420,000 

 

 
14,000 

 

 

 
(632,000)

 

 
1,696,000 

 

 
(518,000)

 

 

 

 

 

 

 

 

 

 

 

 

$
1,160,000 

 

$
7,822,000 

 

$
5,919,000 

 

Austin Taylor Communications, Ltd. operates in the United Kingdom (U.K.) and is subject to U.K. rather than U.S. income taxes.  Austin Taylor had pretax losses of $419,000,  $1,474,000 and $1,119,000 in 2012,  2011 and 2010 respectively.  At the end of 2012, Austin Taylor’s net operating loss carry-forward was $6,140,000.  $419,000 of the 2012 pretax loss will provide group relief to Patapsco, a U.K. company acquired by Communications Systems, Inc. during 2011.  The Company remains uncertain that it will be able to generate the future income needed to realize the tax benefit of the carry-forward.  Accordingly, the Company has continued to maintain its deferred tax valuation allowance against the potential carry-forward benefit.

 

In 2007 Transition Networks China began operations in China and is subject to Chinese taxes rather than U.S. income taxes.  Transition Networks China had pretax income of $36,000 and $24,000 in 2012 and 2011 respectively and pretax losses of $115,000 in 2010.  At the end of 2012, Transition Networks China's net operating loss carry-forward was $1,558,000.  Due to the history of losses in China the Company remains uncertain that it will be able to generate the future income needed to realize the tax benefit of the carry-forward.  Accordingly, the Company has continued to maintain its deferred tax valuation reserve against the potential carry-forward benefit. 

 

Suttle Costa Rica, S.A. operates in Costa Rica and is subject to Costa Rica income taxes. In 2005, the Board of Directors of Suttle Costa Rica S. A. declared a dividend in the amount of $3,500,000 payable to the Company. The dividend and related “dividend reinvestment plan” qualify under Internal Revenue Code Sec. 965, which allows the Company to receive an 85% dividend received deduction if the amount of the dividend is reinvested in the United States pursuant to a domestic reinvestment plan.  The Company made the required qualified capital expenditures in 2006.  It is the Company’s intention to maintain the remaining undistributed earnings in its Costa Rica subsidiary to support continued operations there. No deferred taxes have been provided for the undistributed earnings.    

 

Suttle Costa Rica had pretax income of $168,000, $155,000 and $80,000 in 2012,  2011 and 2010 respectively.  At the end of 2012, Suttle Costa Rica’s net operating loss carry-forward was $0. 

 

The provision for income taxes for continuing operations varied from the federal statutory tax rate as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

 

2012

 

2011

 

2010

Tax at U.S. statutory rate

 
35.0% 

 
35.0% 

 
35.0% 

Surtax exemption

 
(1.5)

 
(0.3)

 
(0.6)

State income taxes, net of federal benefit

 
1.7 

 
1.9 

 
2.4 

Foreign income taxes, net of

 

 

 

 

 

 

 foreign tax credits

 
(0.2)

 
4.7 

 
2.7 

Impairment of goodwill

 

 -

 
2.5 

 

 -

Other

 
(0.9)

 
0.6 

 
(1.6)

Effective tax rate

 
34.1% 

 
44.4% 

 
37.9% 

 

 

Deferred tax assets and liabilities as of December 31 related to the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

2011

Deferred tax assets:

 

 

 

 

 

Allowance for doubtful accounts

$
25,000 

 

$
58,000 

Inventory

 
3,393,000 

 

 
2,611,000 

Accrued and prepaid expenses

 
530,000 

 

 
762,000 

Domestic net operating loss carry-forward

 
106,000 

 

 
186,000 

Long-term compensation plans

 
330,000 

 

 
298,000 

Nonemployee director stock compensation

 
200,000 

 

 
128,000 

Other stock compensation

 
176,000 

 

 
122,000 

State income taxes

 
69,000 

 

 
63,000 

Foreign net operating loss carry-forwards and credits

 
2,092,000 

 

 
2,625,000 

 

 

 

 

 

 

 

 

 

 

 

 

Gross deferred tax assets

 
6,921,000 

 

 
6,853,000 

Valuation allowance

 
(2,091,000)

 

 
(2,624,000)

 

 

 

 

 

 

Net deferred tax assets

 
4,830,000 

 

 
4,229,000 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

Depreciation

 
(1,439,000)

 

 
(1,577,000)

Intangible assets

 
(759,000)

 

 
(674,000)

 

 

 

 

 

 

Gross deferred tax liability

 
(2,198,000)

 

 
(2,251,000)

 

 

 

 

 

 

Total net deferred tax asset

$
2,632,000 

 

$
1,978,000 

 

 

 

 

 

 

 

As part of previous acquisitions, the Company purchased net operating loss carry-forwards in the amount of $3,790,000.  At December 31, 2012, the Company had  $303,000 remaining net operating loss carry-forwards for income tax purposes which expire in 2014. Utilization of net operating loss carry-forwards is limited to $228,000 per year in future years.

 

The Company assesses uncertain tax positions in accordance with ASC 740. Under this method, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such uncertain tax positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense.

Changes in the Company’s unrecognized tax benefits are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2011

 

2010

Unrecognized tax benefits – January 1

$
234,000 

$
270,000 

$
349,000 

Gross increases - tax positions in prior period

 
0 

 
0 

 
0 

Gross decreases - tax positions in prior period

 
0 

 
0 

 
0 

Gross increases - current period tax positions

 
0 

 
7,000 

 
7,000 

Expiration of statute of limitations

 
(81,000)

 
(43,000)

 
(86,000)

Unrecognized tax benefits – December 31, 2012

$
153,000 

$
234,000 

$
270,000 

 

Included in the balance of unrecognized tax benefits at December 31, 2012 are $251,000 of tax benefits that if recognized would affect the tax rate.  The Company’s unrecognized tax benefits could be reduced by $66,000 in the next twelve months due to statute of limitations expirations.  The Company’s income tax liability accounts included accruals for interest and penalties of $168,000 at December 31, 2012.  The Company’s 2012 income tax expense decreased by $4,000 due to net decreases for accrued interest and penalties.

 

The Company’s federal and state tax returns and tax returns it has filed in Costa Rica and the United Kingdom are open for review going back to the 2009 tax year.


Income Taxes (Tables)
v0.0.0.0
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2012
Income Taxes [Abstract]  
Income Tax Expense By Jurisdiction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

 

2012

 

2011

 

2010

Currently payable income taxes:

 

 

 

 

 

 

 

 

 

Federal

 

$
1,669,000 

 

$
5,609,000 

 

$
5,906,000 

State

 

 
141,000 

 

 
414,000 

 

 
581,000 

Foreign

 

 
(18,000)

 

 
103,000 

 

 
(50,000)

 

 

 
1,792,000 

 

 
6,126,000 

 

$
6,437,000 

 

 

 

 

 

 

 

 

 

 

Deferred income taxes (benefit):

 

 

 

 

 

 

 

 

 

Federal

 

$
(542,000)

 

$
1,204,000 

 

$
(522,000)

State

 

 
(33,000)

 

 
72,000 

 

 
(10,000)

Foreign

 

 
(57,000)

 

 
420,000 

 

 
14,000 

 

 

 
(632,000)

 

 
1,696,000 

 

 
(518,000)

 

 

 

 

 

 

 

 

 

 

 

 

$
1,160,000 

 

$
7,822,000 

 

$
5,919,000 

 

Reconciliation Of Effective Tax Rate, By Percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31

 

 

2012

 

2011

 

2010

Tax at U.S. statutory rate

 
35.0% 

 
35.0% 

 
35.0% 

Surtax exemption

 
(1.5)

 
(0.3)

 
(0.6)

State income taxes, net of federal benefit

 
1.7 

 
1.9 

 
2.4 

Foreign income taxes, net of

 

 

 

 

 

 

 foreign tax credits

 
(0.2)

 
4.7 

 
2.7 

Impairment of goodwill

 

 -

 
2.5 

 

 -

Other

 
(0.9)

 
0.6 

 
(1.6)

Effective tax rate

 
34.1% 

 
44.4% 

 
37.9% 

 

Schedule Of Deferred Tax Assets And Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

2011

Deferred tax assets:

 

 

 

 

 

Allowance for doubtful accounts

$
25,000 

 

$
58,000 

Inventory

 
3,393,000 

 

 
2,611,000 

Accrued and prepaid expenses

 
530,000 

 

 
762,000 

Domestic net operating loss carry-forward

 
106,000 

 

 
186,000 

Long-term compensation plans

 
330,000 

 

 
298,000 

Nonemployee director stock compensation

 
200,000 

 

 
128,000 

Other stock compensation

 
176,000 

 

 
122,000 

State income taxes

 
69,000 

 

 
63,000 

Foreign net operating loss carry-forwards and credits

 
2,092,000 

 

 
2,625,000 

 

 

 

 

 

 

 

 

 

 

 

 

Gross deferred tax assets

 
6,921,000 

 

 
6,853,000 

Valuation allowance

 
(2,091,000)

 

 
(2,624,000)

 

 

 

 

 

 

Net deferred tax assets

 
4,830,000 

 

 
4,229,000 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

Depreciation

 
(1,439,000)

 

 
(1,577,000)

Intangible assets

 
(759,000)

 

 
(674,000)

 

 

 

 

 

 

Gross deferred tax liability

 
(2,198,000)

 

 
(2,251,000)

 

 

 

 

 

 

Total net deferred tax asset

$
2,632,000 

 

$
1,978,000 

 

 

 

 

 

 

 

Schedule Of Unrecognized Tax Benefits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2011

 

2010

Unrecognized tax benefits – January 1

$
234,000 

$
270,000 

$
349,000 

Gross increases - tax positions in prior period

 
0 

 
0 

 
0 

Gross decreases - tax positions in prior period

 
0 

 
0 

 
0 

Gross increases - current period tax positions

 
0 

 
7,000 

 
7,000 

Expiration of statute of limitations

 
(81,000)

 
(43,000)

 
(86,000)

Unrecognized tax benefits – December 31, 2012

$
153,000 

$
234,000 

$
270,000 

 


Income Taxes (Narrative) (Details)
v0.0.0.0
Income Taxes (Narrative) (Details) (USD $)
 12 Months Ended 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2013
Scenario, Forecast [Member]
Dec. 31, 2012
Austin Taylor Communications, Ltd. [Member]
Dec. 31, 2011
Austin Taylor Communications, Ltd. [Member]
Dec. 31, 2010
Austin Taylor Communications, Ltd. [Member]
Dec. 31, 2012
Patapsco [Member]
Dec. 31, 2012
Transition Networks China [Member]
Dec. 31, 2011
Transition Networks China [Member]
Dec. 31, 2010
Transition Networks China [Member]
Dec. 31, 2012
Suttle Costa Rica, S.A. [Member]
Dec. 31, 2011
Suttle Costa Rica, S.A. [Member]
Dec. 31, 2010
Suttle Costa Rica, S.A. [Member]
Dec. 31, 2005
Suttle Costa Rica, S.A. [Member]
Income Taxes [Line Items]                              
Pretax income (losses)         $ 419,000 $ 1,474,000 $ 1,119,000   $ 36,000 $ 24,000 $ (115,000) $ 168,000 $ 155,000 $ 80,000  
Net operating loss carryforwards 303,000       6,140,000     419,000 1,558,000     0      
Dividend payable   1,270,016 1,263,434                       3,500,000
Net operating loss carryforwards acquired in acquisition 3,790,000                            
Net operating loss carryforwards, limitations on use 228,000                            
Uncertain tax benefit positions that would reduce the effective income tax rate if recognized 251,000                            
Expiration of statute of limitations 81,000 43,000 86,000 66,000                      
Accrual for interest and penalties 168,000                            
Net increase (decrease) in accrued interest and penalties $ (4,000)                            

Income Taxes (Income Tax Expense By Jurisdiction) (Details)
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Income Taxes (Income Tax Expense By Jurisdiction) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Taxes [Abstract]      
Currently payable income taxes: Federal $ 1,669,000 $ 5,609,000 $ 5,906,000
Currently payable income taxes: State 141,000 414,000 581,000
Currently payable income taxes: Foreign (18,000) 103,000 (50,000)
Currently payable income taxes 1,792,000 6,126,000 6,437,000
Deferred income taxes (benefit): Federal (542,000) 1,204,000 (522,000)
Deferred income taxes (benefit): State (33,000) 72,000 (10,000)
Deferred income taxes (benefit): Foreign (57,000) 420,000 14,000
Deferred income taxes (benefit) (631,626) 1,695,595 (518,234)
Income taxes (benefit) $ 1,159,566 $ 7,822,124 $ 5,919,104

Income Taxes (Reconciliation Of Effective Tax Rate, By Percentage) (Details)
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Income Taxes (Reconciliation Of Effective Tax Rate, By Percentage) (Details)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Taxes [Abstract]      
Tax at U.S. statutory rate 35.00% 35.00% 35.00%
Surtax exemption (1.50%) (0.30%) (0.60%)
State income taxes, net of federal benefit 1.70% 1.90% 2.40%
Foreign income taxes, net of foreign tax credits (0.20%) 4.70% 2.70%
Impairment of goodwill   2.50%  
Other (0.90%) 0.60% (1.60%)
Effective tax rate 34.10% 44.40% 37.90%

Income Taxes (Schedule Of Deferred Tax Assets And Liabilities) (Details)
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Income Taxes (Schedule Of Deferred Tax Assets And Liabilities) (Details) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Income Taxes [Abstract]    
Allowance for doubtful accounts $ 25,000 $ 58,000
Inventory 3,393,000 2,611,000
Accrued and prepaid expenses 530,000 762,000
Domestic net operating loss carry-forward 106,000 186,000
Long-term compensation plans 330,000 298,000
Nonemployee director stock compensation 200,000 128,000
Other stock compensation 176,000 122,000
State income taxes 69,000 63,000
Foreign net operating loss carry-forwards and credits 2,092,000 2,625,000
Gross deferred tax assets 6,921,000 6,853,000
Valuation allowance (2,091,000) (2,624,000)
Net deferred tax assets 4,830,000 4,229,000
Depreciation (1,439,000) (1,577,000)
Intangible assets (759,000) (674,000)
Gross deferred tax liability (2,198,000) (2,251,000)
Total net deferred tax asset $ 2,632,000 $ 1,978,000

Income Taxes (Schedule Of Unrecognized Tax Benefits) (Details)
v0.0.0.0
Income Taxes (Schedule Of Unrecognized Tax Benefits) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Taxes [Abstract]      
Unrecognized tax benefits - January 1 $ 234,000 $ 270,000 $ 349,000
Gross increases - tax positions in prior period 0 0 0
Gross decreases - tax positions in prior period 0 0 0
Gross increases - current period tax positions 0 7,000 7,000
Expiration of statute of limitations (81,000) (43,000) (86,000)
Unrecognized tax benefits - December 31, 2012 $ 153,000 $ 234,000 $ 270,000

Information Concerning Industry Segments And Major Customers
v0.0.0.0
Information Concerning Industry Segments And Major Customers
 12 Months Ended
Dec. 31, 2012
Information Concerning Industry Segments And Major Customers [Abstract]  
Information Concerning Industry Segments And Major Customers

NOTE 12- INFORMATION CONCERNING INDUSTRY SEGMENTS AND MAJOR CUSTOMERS

 

Effective January 1, 2012, the Company realigned its business operations. As a result of the realignment, the Company consolidated the Austin Taylor operations within its Suttle business unit. Following this realignment, the Company classifies its businesses into three segments as follows:

·

Suttle manufactures and markets copper and fiber connectivity systems, enclosure systems, xDSL filters and splitters, and active technologies for voice, data and video communications;

·

Transition Networks manufactures network interface devices (NIDs), media converters, network interface cards (NICs), Ethernet switches and other connectivity products that offer the ability to affordably integrate the benefits of fiber optics into any data network; and

·

JDL Technologies provides technology solutions including virtualization, managed services, wired and wireless network design and implementation services, and converged infrastructure configuration and deployment.

 

Non-allocated corporate general and administrative expenses are categorized as “Other” in the Company’s segment reporting. Management has chosen to organize the enterprise and disclose reportable segments based on products and services. There are no material intersegment revenues. To conform to the 2012 presentation, the Company has reclassified 2011 and 2010 segment information to present the Austin Taylor operations within Suttle’s business unit.

 

Suttle products are sold principally to U.S. customers.  Suttle operates manufacturing facilities in the U.S. and Costa Rica.  Net long-lived assets held in foreign countries were approximately $1,067,000 and $831,000 at December 31, 2012 and 2011, respectively.    Transition Networks manufactures its products in the United States and makes sales in both the U.S. and international markets.   JDL Technologies operates in the U.S. and makes sales in the U.S.  Consolidated sales to U.S. customers were approximately 83%,  85% and 81% of sales from continuing operations in 2012,  2011 and 2010 respectively.  In 2012, sales to one of Transition Networks’ customers accounted for 10.6% of consolidated sales and one of Suttle’s customers accounted for 16.6% of consolidated sales. In 2011, sales to one of Transition Networks’ customers accounted for 22.8% of consolidated sales. In 2010,  sales to two of Transition Networks’ customers accounted for 15.1% and 12.0% of consolidated sales and one of JDL Technologies’ customers accounted for 10.3% of consolidated sales.  

 

Information concerning the Company’s operations in the various segments for the twelve-month periods ended December 31, 2012,  2011 and 2010 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

2012

 

 

 

 

 

 

 

 

 

 

Sales

$
45,030,184 

$
53,842,940 

$
5,376,530 

$

 -

$
104,249,654 

Cost of sales

 
33,056,579 

 
25,848,307 

 
3,847,877 

 

 -

 
62,752,763 

Gross profit

 
11,973,605 

 
27,994,633 

 
1,528,653 

 

 -

 
41,496,891 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
9,370,737 

 
22,106,199 

 
2,183,798 

 
4,440,039 

 
38,100,773 

Operating income (loss)

$
2,602,868 

$
5,888,434 

$
(655,145)

$
(4,440,039)

$
3,396,118 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
925,149 

$
815,259 

$
103,109 

$
289,994 

$
2,133,511 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
1,167,495 

$
412,568 

$
36,891 

$
991,004 

$
2,607,958 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
26,148,148 

$
35,851,189 

$
8,385,337 

$
42,149,971 

$
112,534,645 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

2011

 

 

 

 

 

 

 

 

 

 

Sales

$
39,924,484 

$
91,450,014 

$
12,400,553 

$

 -

$
143,775,051 

Cost of sales

 
30,792,769 

 
46,825,149 

 
7,262,006 

 

 -

 
84,879,924 

Gross profit

 
9,131,715 

 
44,624,865 

 
5,138,547 

 

 -

 
58,895,127 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
8,217,766 

 
23,730,729 

 
1,982,353 

 
6,177,373 

 
40,108,221 

Impairment

 
1,271,986 

 

 

 

 

 

 

 
1,271,986 

Operating income (loss)

$
(358,037)

$
20,894,136 

$
3,156,194 

$
(6,177,373)

$
17,514,920 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
946,256 

$
755,789 

$
106,622 

$
292,068 

$
2,100,735 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
935,030 

$
1,028,941 

$
51,789 

$
740,231 

$
2,755,991 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
27,914,301 

$
33,589,083 

$
1,844,572 

$
53,310,960 

$
116,658,916 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

2010

 

 

 

 

 

 

 

 

 

 

Sales

$
39,577,584 

$
67,782,482 

$
12,712,244 

$

 -

$
120,072,310 

Cost of sales

 
29,913,246 

 
31,826,169 

 
7,132,263 

 

 -

 
68,871,678 

Gross profit

 
9,664,338 

 
35,956,313 

 
5,579,981 

 

 -

 
51,200,632 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
7,722,508 

 
21,459,214 

 
1,470,086 

 
4,934,440 

 
35,586,248 

Impairment

 

 

 

 

 

 

 

 

 

 -

Operating income (loss)

$
1,941,830 

$
14,497,099 

$
4,109,895 

$
(4,934,440)

$
15,614,384 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
856,180 

$
604,873 

$
102,850 

$
294,978 

$
1,858,881 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
751,674 

$
680,819 

$
197,784 

$
164,145 

$
1,794,422 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
21,764,508 

$
32,383,709 

$
3,493,717 

$
51,428,293 

$
109,070,227 

 


Information Concerning Industry Segments And Major Customers (Tables)
v0.0.0.0
Information Concerning Industry Segments And Major Customers (Tables)
 12 Months Ended
Dec. 31, 2012
Information Concerning Industry Segments And Major Customers [Abstract]  
Schedule Of Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

2012

 

 

 

 

 

 

 

 

 

 

Sales

$
45,030,184 

$
53,842,940 

$
5,376,530 

$

 -

$
104,249,654 

Cost of sales

 
33,056,579 

 
25,848,307 

 
3,847,877 

 

 -

 
62,752,763 

Gross profit

 
11,973,605 

 
27,994,633 

 
1,528,653 

 

 -

 
41,496,891 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
9,370,737 

 
22,106,199 

 
2,183,798 

 
4,440,039 

 
38,100,773 

Operating income (loss)

$
2,602,868 

$
5,888,434 

$
(655,145)

$
(4,440,039)

$
3,396,118 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
925,149 

$
815,259 

$
103,109 

$
289,994 

$
2,133,511 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
1,167,495 

$
412,568 

$
36,891 

$
991,004 

$
2,607,958 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
26,148,148 

$
35,851,189 

$
8,385,337 

$
42,149,971 

$
112,534,645 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

2011

 

 

 

 

 

 

 

 

 

 

Sales

$
39,924,484 

$
91,450,014 

$
12,400,553 

$

 -

$
143,775,051 

Cost of sales

 
30,792,769 

 
46,825,149 

 
7,262,006 

 

 -

 
84,879,924 

Gross profit

 
9,131,715 

 
44,624,865 

 
5,138,547 

 

 -

 
58,895,127 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
8,217,766 

 
23,730,729 

 
1,982,353 

 
6,177,373 

 
40,108,221 

Impairment

 
1,271,986 

 

 

 

 

 

 

 
1,271,986 

Operating income (loss)

$
(358,037)

$
20,894,136 

$
3,156,194 

$
(6,177,373)

$
17,514,920 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
946,256 

$
755,789 

$
106,622 

$
292,068 

$
2,100,735 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
935,030 

$
1,028,941 

$
51,789 

$
740,231 

$
2,755,991 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
27,914,301 

$
33,589,083 

$
1,844,572 

$
53,310,960 

$
116,658,916 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

2010

 

 

 

 

 

 

 

 

 

 

Sales

$
39,577,584 

$
67,782,482 

$
12,712,244 

$

 -

$
120,072,310 

Cost of sales

 
29,913,246 

 
31,826,169 

 
7,132,263 

 

 -

 
68,871,678 

Gross profit

 
9,664,338 

 
35,956,313 

 
5,579,981 

 

 -

 
51,200,632 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
7,722,508 

 
21,459,214 

 
1,470,086 

 
4,934,440 

 
35,586,248 

Impairment

 

 

 

 

 

 

 

 

 

 -

Operating income (loss)

$
1,941,830 

$
14,497,099 

$
4,109,895 

$
(4,934,440)

$
15,614,384 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
856,180 

$
604,873 

$
102,850 

$
294,978 

$
1,858,881 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
751,674 

$
680,819 

$
197,784 

$
164,145 

$
1,794,422 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
21,764,508 

$
32,383,709 

$
3,493,717 

$
51,428,293 

$
109,070,227 

 


Information Concerning Industry Segments And Major Customers (Narrative) (Details)
v0.0.0.0
Information Concerning Industry Segments And Major Customers (Narrative) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Segment Reporting Information [Line Items]      
Number of segments 3    
Sales [Member] | Suttle [Member]
      
Segment Reporting Information [Line Items]      
Concentration risk percentage 16.60%    
Sales [Member] | Transition Networks [Member]
      
Segment Reporting Information [Line Items]      
Concentration risk percentage 10.60% 22.80%  
Sales [Member] | JDL Technologies [Member]
      
Segment Reporting Information [Line Items]      
Concentration risk percentage     10.30%
Foreign [Member] | Suttle [Member]
      
Segment Reporting Information [Line Items]      
Long-lived assets $ 1,067,000 $ 831,000  
United States [Member] | Sales [Member]
      
Segment Reporting Information [Line Items]      
Concentration risk percentage 83.00% 85.00% 81.00%
Customer 1 [Member] | Sales [Member] | Transition Networks [Member]
      
Segment Reporting Information [Line Items]      
Concentration risk percentage     15.10%
Customer 2 [Member] | Sales [Member] | Transition Networks [Member]
      
Segment Reporting Information [Line Items]      
Concentration risk percentage     12.00%

Information Concerning Industry Segments And Major Customers (Schedule Of Segment Information) (Details)
v0.0.0.0
Information Concerning Industry Segments And Major Customers (Schedule Of Segment Information) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Segment Reporting Information [Line Items]      
Sales $ 104,249,654 $ 143,775,051 $ 120,072,310
Cost of sales 62,752,763 84,879,924 68,871,678
Gross profit 41,496,891 58,895,127 51,200,632
Selling, general and administrative expenses 38,100,773 40,108,221 35,586,248
Impairment   1,271,986  
Operating income 3,396,118 17,514,920 15,614,384
Depreciation and amortization 2,133,511 2,100,735 1,858,881
Capital expenditures 2,607,958 2,755,991 1,794,422
Assets 112,534,645 116,658,916 109,070,227
Suttle [Member]
      
Segment Reporting Information [Line Items]      
Sales 45,030,184 39,924,484 39,577,584
Cost of sales 33,056,579 30,792,769 29,913,246
Gross profit 11,973,605 9,131,715 9,664,338
Selling, general and administrative expenses 9,370,737 8,217,766 7,722,508
Impairment   1,271,986  
Operating income 2,602,868 (358,037) 1,941,830
Depreciation and amortization 925,149 946,256 856,180
Capital expenditures 1,167,495 935,030 751,674
Assets 26,148,148 27,914,301 21,764,508
Transition Networks [Member]
      
Segment Reporting Information [Line Items]      
Sales 53,842,940 91,450,014 67,782,482
Cost of sales 25,848,307 46,825,149 31,826,169
Gross profit 27,994,633 44,624,865 35,956,313
Selling, general and administrative expenses 22,106,199 23,730,729 21,459,214
Operating income 5,888,434 20,894,136 14,497,099
Depreciation and amortization 815,259 755,789 604,873
Capital expenditures 412,568 1,028,941 680,819
Assets 35,851,189 33,589,083 32,383,709
JDL Technologies [Member]
      
Segment Reporting Information [Line Items]      
Sales 5,376,530 12,400,553 12,712,244
Cost of sales 3,847,877 7,262,006 7,132,263
Gross profit 1,528,653 5,138,547 5,579,981
Selling, general and administrative expenses 2,183,798 1,982,353 1,470,086
Operating income (655,145) 3,156,194 4,109,895
Depreciation and amortization 103,109 106,622 102,850
Capital expenditures 36,891 51,789 197,784
Assets 8,385,337 1,844,572 3,493,717
Other [Member]
      
Segment Reporting Information [Line Items]      
Selling, general and administrative expenses 4,440,039 6,177,373 4,934,440
Operating income (4,440,039) (6,177,373) (4,934,440)
Depreciation and amortization 289,994 292,068 294,978
Capital expenditures 991,004 740,231 164,145
Assets $ 42,149,971 $ 53,310,960 $ 51,428,293

Fair Value Measurements
v0.0.0.0
Fair Value Measurements
 12 Months Ended
Dec. 31, 2012
Fair Value Measurements [Abstract]  
Fair Value Measurements

NOTE 13 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date: 

Level 1 – Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date.

Level 2 – Observable inputs such as quoted prices for similar instruments and quoted prices in markets that are not active, and inputs that are directly observable or can be corroborated by observable market data. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts, such as treasury securities with pricing interpolated from recent trades of similar securities, or priced with models using highly observable inputs, such as commodity options priced using observable forward prices and volatilities.

Level 3 – Significant inputs to pricing that have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as the complex and subjective models and forecasts used to determine the fair value of financial instruments.

Financial assets and liabilities measured at fair value as of December 31,  2012 and December 31, 2011, are summarized below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
5,497,788 

 

$

 -

 

$

 -

 

$
5,497,788 

Subtotal

 
5,497,788 

 

 

 -

 

 

 -

 

 
5,497,788 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
7,258,768 

 

 

 -

 

 
7,258,768 

Corporate Notes/Bonds

 

 -

 

 
3,800,143 

 

 

 -

 

 
3,800,143 

Commercial Paper

 

 -

 

 
1,642,627 

 

 

 -

 

 
1,642,627 

Subtotal

 

 -

 

 
12,701,538 

 

 

 -

 

 
12,701,538 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
900,763 

 

 

 -

 

 
900,763 

Corporate Notes/Bonds

 

 -

 

 
4,475,634 

 

 

 -

 

 
4,475,634 

Subtotal

 

 -

 

 
5,376,397 

 

 

 -

 

 
5,376,397 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 -

 

 

 

 

 

 

 

 

 

Accrued Consideration

 

 -

 

 

 -

 

 
(770,041)

 

 
(770,041)

Subtotal

 

 -

 

 

 -

 

 
(770,041)

 

 
(770,041)

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
5,497,788 

 

$
18,077,935 

 

$
(770,041)

 

$
22,805,682 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
829,881 

 

$

 -

 

$

 -

 

$
829,881 

Subtotal

 
829,881 

 

 

 -

 

 

 -

 

 
829,881 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
18,635,601 

 

 

 -

 

 
18,635,601 

Subtotal

 

 -

 

 
18,635,601 

 

 

 -

 

 
18,635,601 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
4,883,510 

 

 

 -

 

 
4,883,510 

Subtotal

 

 -

 

 
4,883,510 

 

 

 -

 

 
4,883,510 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accrued Consideration

 

 -

 

 

 -

 

 
(1,002,623)

 

 
(1,002,623)

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal

 

 -

 

 

 -

 

 
(1,002,623)

 

 
(1,002,623)

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
829,881 

 

$
23,519,111 

 

$
(1,002,623)

 

$
23,346,369 

 

The estimated fair value of remaining contingent consideration as of December 31,  2012 was $770,041, as noted above. The estimated fair value is considered a level 3 measurement because the probability weighted discounted cash flow methodology used to estimate fair value includes the use of significant unobservable inputs, primarily the contractual contingent consideration gross margin targets and assumed probabilities. The change in the estimated contingent consideration during 2012 was due to $370,096 in payments, $52,013 in foreign currency losses, and $85,501 in losses included in operating income.  The gains were the result of a change in future assumptions related to the contingent consideration. 

There were no transfers between levels during 2012 and 2011.


Fair Value Measurements (Tables)
v0.0.0.0
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2012
Fair Value Measurements [Abstract]  
Schedule Of Financial Assets And Liabilities Measured At Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
5,497,788 

 

$

 -

 

$

 -

 

$
5,497,788 

Subtotal

 
5,497,788 

 

 

 -

 

 

 -

 

 
5,497,788 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
7,258,768 

 

 

 -

 

 
7,258,768 

Corporate Notes/Bonds

 

 -

 

 
3,800,143 

 

 

 -

 

 
3,800,143 

Commercial Paper

 

 -

 

 
1,642,627 

 

 

 -

 

 
1,642,627 

Subtotal

 

 -

 

 
12,701,538 

 

 

 -

 

 
12,701,538 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
900,763 

 

 

 -

 

 
900,763 

Corporate Notes/Bonds

 

 -

 

 
4,475,634 

 

 

 -

 

 
4,475,634 

Subtotal

 

 -

 

 
5,376,397 

 

 

 -

 

 
5,376,397 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 -

 

 

 

 

 

 

 

 

 

Accrued Consideration

 

 -

 

 

 -

 

 
(770,041)

 

 
(770,041)

Subtotal

 

 -

 

 

 -

 

 
(770,041)

 

 
(770,041)

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
5,497,788 

 

$
18,077,935 

 

$
(770,041)

 

$
22,805,682 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
829,881 

 

$

 -

 

$

 -

 

$
829,881 

Subtotal

 
829,881 

 

 

 -

 

 

 -

 

 
829,881 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
18,635,601 

 

 

 -

 

 
18,635,601 

Subtotal

 

 -

 

 
18,635,601 

 

 

 -

 

 
18,635,601 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
4,883,510 

 

 

 -

 

 
4,883,510 

Subtotal

 

 -

 

 
4,883,510 

 

 

 -

 

 
4,883,510 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accrued Consideration

 

 -

 

 

 -

 

 
(1,002,623)

 

 
(1,002,623)

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal

 

 -

 

 

 -

 

 
(1,002,623)

 

 
(1,002,623)

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
829,881 

 

$
23,519,111 

 

$
(1,002,623)

 

$
23,346,369 

 


Fair Value Measurements (Narrative) (Details)
v0.0.0.0
Fair Value Measurements (Narrative) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration $ 770,041 $ 1,002,623
Change in fair value of acquisition-related contingent consideration (85,501)  
Payments [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Change in fair value of acquisition-related contingent consideration 370,096  
Foreign Currency Gain (Loss) [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Change in fair value of acquisition-related contingent consideration 52,013  
Operating Income (Loss) [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Change in fair value of acquisition-related contingent consideration 85,501  
Level 3 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration 770,041 1,002,623
Accrued Consideration [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration 770,041 1,002,623
Accrued Consideration [Member] | Level 3 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration $ 770,041 $ 1,002,623

Fair Value Measurements (Schedule Of Financial Assets And Liabilities Measured At Fair Value) (Details)
v0.0.0.0
Fair Value Measurements (Schedule Of Financial Assets And Liabilities Measured At Fair Value) (Details) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents $ 5,497,788 $ 829,881
Current Liabilities, fair value (770,041) (1,002,623)
Assets (Liabilities) Net, fair value 22,805,682 23,346,369
Level 1 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 5,497,788 829,881
Assets (Liabilities) Net, fair value 5,497,788 829,881
Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets (Liabilities) Net, fair value 18,077,935 23,519,111
Level 3 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current Liabilities, fair value (770,041) (1,002,623)
Assets (Liabilities) Net, fair value (770,041) (1,002,623)
Money Market Funds [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 5,497,788 829,881
Money Market Funds [Member] | Level 1 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 5,497,788 829,881
Accrued Consideration [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current Liabilities, fair value (770,041) (1,002,623)
Accrued Consideration [Member] | Level 3 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current Liabilities, fair value (770,041) (1,002,623)
Short-Term Investments [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 12,701,538 18,635,601
Short-Term Investments [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 12,701,538 18,635,601
Short-Term Investments [Member] | Certificates Of Deposit [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 7,258,768 18,635,601
Short-Term Investments [Member] | Certificates Of Deposit [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 7,258,768 18,635,601
Short-Term Investments [Member] | Corporate Notes And Bonds [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 3,800,143  
Short-Term Investments [Member] | Corporate Notes And Bonds [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 3,800,143  
Short-Term Investments [Member] | Commercial Paper [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 1,642,627  
Short-Term Investments [Member] | Commercial Paper [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 1,642,627  
Long Term Investments [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 5,376,397 4,883,510
Long Term Investments [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 5,376,397 4,883,510
Long Term Investments [Member] | Certificates Of Deposit [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 900,763 4,883,510
Long Term Investments [Member] | Certificates Of Deposit [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 900,763 4,883,510
Long Term Investments [Member] | Corporate Notes And Bonds [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 4,475,634  
Long Term Investments [Member] | Corporate Notes And Bonds [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments $ 4,475,634  

Subsequent Events
v0.0.0.0
Subsequent Events
 12 Months Ended
Dec. 31, 2012
Subsequent Events [Abstract]  
Subsequent Events

NOTE 14 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of this filing. We do not believe there are any material subsequent events which would require further disclosure.


Valuation And Qualifying Accounts And Reserves
v0.0.0.0
Valuation And Qualifying Accounts And Reserves
 12 Months Ended
Dec. 31, 2012
Valuation And Qualifying Accounts And Reserves [Abstract]  
Valuation And Qualifying Accounts And Reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES

Schedule II - Valuation and Qualifying Accounts and Reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

 

Additions

 

Deductions

 

Other

 

Balance

 

Beginning of

 

Charged to Cost

 

from

 

Changes

 

at End

Description

Period

 

and Expenses

 

Reserves

 

Add (Deduct)

 

of Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for doubtful accounts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

$
175,000 

 

$
30,000 

 

$
(136,000)

(A)

$

 

 

$
69,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

$
500,000 

 

$
91,000 

 

$
(416,000)

(A)

$

 

 

$
175,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010

$
505,000 

 

$
105,000 

 

$
(110,000)

(A)

$

 

 

$
500,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(A)  Accounts determined to be uncollectible and charged off against reserve.

 


Valuation And Qualifying Accounts And Reserves (Details)
v0.0.0.0
Valuation And Qualifying Accounts And Reserves (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Valuation And Qualifying Accounts And Reserves [Abstract]      
Balance at Beginning of Period $ 175,000 $ 500,000 $ 505,000
Additions Charged to Cost and Expenses 30,000 91,000 105,000
Deductions from Reserves (136,000) (416,000) (110,000)
Balance at End of Period $ 69,000 $ 175,000 $ 500,000