Document And Entity Information
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Document And Entity Information
 3 Months Ended
Mar. 31, 2013
May 01, 2013
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2013  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2013  
Entity Registrant Name COMMUNICATIONS SYSTEMS INC  
Entity Central Index Key 0000022701  
Current Fiscal Year End Date --03-31  
Entity Filer Category Accelerated Filer  
Entity Common Stock, Shares Outstanding   8,529,037

Condensed Consolidated Balance Sheets
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Condensed Consolidated Balance Sheets (USD $)
Mar. 31, 2013
Dec. 31, 2012
CURRENT ASSETS:    
Cash and cash equivalents $ 10,824,540 $ 17,869,712
Investments 10,679,437 12,701,538
Trade accounts receivable, less allowance for doubtful accounts of $55,000 and $69,000, respectively 18,358,611 14,683,227
Inventories 36,980,325 33,752,710
Prepaid income taxes 2,015,128 2,113,926
Other current assets 922,561 783,352
Deferred income taxes 4,144,404 4,013,628
TOTAL CURRENT ASSETS 83,925,006 85,918,093
PROPERTY, PLANT AND EQUIPMENT, net 14,403,000 14,474,913
OTHER ASSETS:    
Investments 6,203,992 5,376,397
Goodwill 5,797,671 5,956,934
Other assets 739,931 808,308
TOTAL OTHER ASSETS 12,741,594 12,141,639
TOTAL ASSETS 111,069,600 112,534,645
CURRENT LIABILITIES:    
Current portion of long-term debt 465,320 457,464
Accounts payable 7,990,304 9,237,233
Accrued compensation and benefits 2,536,366 3,044,864
Accrued consideration 581,750 770,041
Other accrued liabilities 1,955,024 1,670,009
Dividends payable 1,453,035 61,833
TOTAL CURRENT LIABILITIES 14,981,799 15,241,444
LONG TERM LIABILITIES:    
Long-term compensation plans 42,069 350,457
Uncertain tax positions 327,221 320,426
Deferred income taxes 1,423,459 1,381,785
Pension liabilities 325,810 127,611
Long term debt - mortgage payable 998,211 1,117,529
TOTAL LONG-TERM LIABILITIES 3,116,770 3,297,808
COMMITMENTS AND CONTINGENCIES (Footnote 7)      
STOCKHOLDERS' EQUITY    
Preferred stock, par value $1.00 per share; 3,000,000 shares authorized; none issued      
Common stock, par value $.05 per share; 30,000,000 shares authorized; 8,523,719 and 8,474,896 shares issued and outstanding, respectively 426,186 423,745
Additional paid-in capital 37,087,003 36,404,518
Retained earnings 56,606,937 57,755,178
Accumulated other comprehensive loss (1,149,095) (588,048)
TOTAL STOCKHOLDERS' EQUITY 92,971,031 93,995,393
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 111,069,600 $ 112,534,645

Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Mar. 31, 2013
Dec. 31, 2012
Condensed Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 55,000 $ 69,000
Preferred stock, par value $ 1.00 $ 1.00
Preferred stock, shares authorized 3,000,000 3,000,000
Preferred stock, shares issued 0 0
Common stock, par value $ 0.05 $ 0.05
Common stock, shares authorized 30,000,000 30,000,000
Common stock, shares issued 8,523,719 8,474,896
Common stock, shares outstanding 8,523,719 8,474,896

Condensed Consolidated Statements Of Income And Comprehensive Income
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Condensed Consolidated Statements Of Income And Comprehensive Income (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Condensed Consolidated Statements Of Income And Comprehensive Income [Abstract]    
Sales $ 27,452,731 $ 24,243,922
Costs and expenses:    
Cost of sales 17,676,804 14,295,294
Selling, general and administrative expenses 9,405,150 9,818,182
Total costs and expenses 27,081,954 24,113,476
Operating income 370,777 130,446
Other income and (expenses):    
Investment and other income (expense) 87,291 (20,698)
(Loss)/gain on sale of assets (47,262) 20,572
Interest and other expense (29,386) (36,759)
Other income (loss), net 10,643 (36,885)
Income from operations before income taxes 381,420 93,561
Income tax expense 139,061 38,483
Net income 242,359 55,078
Other comprehensive income (loss), net of tax:    
Additional minimum pension liability adjustments (205,815) 135,892
Unrealized gains/(losses) on available-for-sale securities (12,078) 12,052
Foreign currency translation adjustment (343,154) 138,017
Total other comprehensive (loss) income (561,047) 285,961
Comprehensive (loss) income $ (318,688) $ 341,039
Basic net income per share: $ 0.03 $ 0.01
Diluted net income per share: $ 0.03 $ 0.01
Weighted Average Basic Shares Outstanding 8,486,533 8,473,774
Weighted Average Dilutive Shares Outstanding 8,496,318 8,510,345
Dividends declared per share $ 0.16 $ 0.16

Condensed Consolidated Statements Of Changes In Stockholders' Equity
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Condensed Consolidated Statements Of Changes In Stockholders' Equity (USD $)
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Loss [Member]
Total
BALANCE at Dec. 31, 2012 $ 423,745 $ 36,404,518 $ 57,755,178 $ (588,048) $ 93,995,393
BALANCE, Shares at Dec. 31, 2012 8,474,896        
Net income     242,359   242,359
Issuance of common stock under Employee Stock Purchase Plan 211 43,729     43,940
Issuance of common stock under Employee Stock Purchase Plan, Shares 4,225        
Issuance of common stock to Employee Stock Ownership Plan 2,230 461,589     463,819
Issuance of common stock to Employee Stock Ownership Plan, Shares 44,598        
Share-based compensation   177,167     177,167
Shareholder dividends     (1,390,600)   (1,390,600)
Other comprehensive loss       (561,047) (561,047)
BALANCE at Mar. 31, 2013 $ 426,186 $ 37,087,003 $ 56,606,937 $ (1,149,095) $ 92,971,031
BALANCE, Shares at Mar. 31, 2013 8,523,719        

Condensed Consolidated Statements Of Cash Flows
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Condensed Consolidated Statements Of Cash Flows (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 242,359 $ 55,078
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 485,793 584,690
Share-based compensation 177,167 111,044
Deferred taxes (89,101) 55,533
Change in fair value of acquisition-related contingent consideration 27,231  
Loss/(gain) on sale of assets 47,262 (20,572)
Changes in assets and liabilities:    
Trade receivables (3,707,328) 148,107
Inventories (3,309,289) (1,082,165)
Prepaid income taxes 111,201 (76,842)
Other assets (137,257) 132,159
Accounts payable (1,229,882) 9,451
Accrued compensation and benefits (350,808) (3,136,397)
Other accrued liabilities 255,243 (235,703)
Income taxes payable (5,499) 8,287
Net cash used in operating activities (7,482,908) (3,447,330)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Capital expenditures (479,129) (681,099)
Purchases of investments (2,932,571) (2,007,701)
Acquisition of business   (43,639)
Proceeds from the sale of fixed assets 24,971 74,372
Proceeds from the sale of investments 4,115,000 4,359,039
Net cash provided by investing activities 728,271 1,700,972
CASH FLOWS FROM FINANCING ACTIVITIES:    
Cash dividends paid   (1,269,737)
Mortgage principal payments (111,462) (104,123)
Proceeds from issuance of common stock 43,940 54,409
Payment of contingent consideration related to acquisition (161,060)  
Net cash used in financing activities (228,582) (1,319,451)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH (61,953) 25,584
NET DECREASE IN CASH AND CASH EQUIVALENTS (7,045,172) (3,040,225)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 17,869,712 22,515,710
CASH AND CASH EQUIVALENTS AT END OF YEAR 10,824,540 19,475,485
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Income taxes paid 116,297 62,934
Interest paid 26,261 35,822
Dividends declared not paid $ 1,363,795 $ 1,355,294

Summary Of Significant Accounting Policies
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Summary Of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2013
Summary Of Significant Accounting Policies [Abstract]  
Summary Of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Description of Business

 

Communications Systems, Inc. (herein collectively called “CSI” or the “Company”) is a Minnesota corporation organized in 1969 which operates directly and through its subsidiaries located in the United States, Costa Rica, the United Kingdom and China. CSI is principally engaged through its Suttle business unit in the manufacture and sale of modular connecting and wiring devices for voice and data communications, digital subscriber line filters, and structured wiring systems and through its Transition Networks business unit in the manufacture of media and rate conversion products for telecommunications networks. CSI also provides through its JDL Technologies (“JDL”) business unit IT solutions including network design, computer infrastructure installations, IT service management, change management, network security and network operations services.

 

Financial Statement Presentation

 

The condensed consolidated balance sheets and condensed consolidated statement of changes in stockholders’ equity as of March 31, 2013 and the related condensed consolidated statements of income and comprehensive income, and the condensed consolidated statements of cash flows for the periods ended March 31, 2013 and 2012 have been prepared by Company management.  In the opinion of management, all adjustments (which include only normal recurring adjustments, except where noted) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2013 and 2012 and for the periods then ended have been made.

 

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted.  We recommend these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2012 Annual Report to Shareholders on Form 10-K.  The results of operations for the periods ended March 31, 2013 are not necessarily indicative of operating results for the entire year.

 

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

 

Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, appropriately represent, in all material respects, the current status of accounting policies, and are incorporated herein by reference.

 

 

Revenue Recognition

 

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

 

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

 

Accumulated Other Comprehensive Income

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

 

December 31

 

 

 

2013

 

 

2012

Foreign currency translation

 

$
(2,713,628)

 

$
(2,370,474)

Unrealized gain on available-for-sale investments

 

 
11,512 

 

 
23,590 

Minimum pension liability

 

 
1,553,021 

 

 
1,758,836 

 

 

$
(1,149,095)

 

$
(588,048)

 

 


Summary Of Significant Accounting Policies (Policy)
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Summary Of Significant Accounting Policies (Policy)
 3 Months Ended
Mar. 31, 2013
Summary Of Significant Accounting Policies [Abstract]  
Financial Statement Presentation

Financial Statement Presentation

 

The condensed consolidated balance sheets and condensed consolidated statement of changes in stockholders’ equity as of March 31, 2013 and the related condensed consolidated statements of income and comprehensive income, and the condensed consolidated statements of cash flows for the periods ended March 31, 2013 and 2012 have been prepared by Company management.  In the opinion of management, all adjustments (which include only normal recurring adjustments, except where noted) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2013 and 2012 and for the periods then ended have been made.

 

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted.  We recommend these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2012 Annual Report to Shareholders on Form 10-K.  The results of operations for the periods ended March 31, 2013 are not necessarily indicative of operating results for the entire year.

 

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

 

Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, appropriately represent, in all material respects, the current status of accounting policies, and are incorporated herein by reference.

Revenue Recognition

Revenue Recognition

 

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

 

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

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

 

December 31

 

 

 

2013

 

 

2012

Foreign currency translation

 

$
(2,713,628)

 

$
(2,370,474)

Unrealized gain on available-for-sale investments

 

 
11,512 

 

 
23,590 

Minimum pension liability

 

 
1,553,021 

 

 
1,758,836 

 

 

$
(1,149,095)

 

$
(588,048)

 


Summary Of Significant Accounting Policies (Tables)
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Summary Of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2013
Summary Of Significant Accounting Policies [Abstract]  
Components Of Accumulated Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

 

December 31

 

 

 

2013

 

 

2012

Foreign currency translation

 

$
(2,713,628)

 

$
(2,370,474)

Unrealized gain on available-for-sale investments

 

 
11,512 

 

 
23,590 

Minimum pension liability

 

 
1,553,021 

 

 
1,758,836 

 

 

$
(1,149,095)

 

$
(588,048)

 


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 $)
Mar. 31, 2013
Dec. 31, 2012
Summary Of Significant Accounting Policies [Abstract]    
Foreign currency translation $ (2,713,628) $ (2,370,474)
Unrealized gain on available-for-sale investments 11,512 23,590
Minimum pension liability 1,553,021 1,758,836
Accumulated other comprehensive (loss) income, net of tax $ (1,149,095) $ (588,048)

Cash Equivalents And Investments
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Cash Equivalents And Investments
 3 Months Ended
Mar. 31, 2013
Cash Equivalents And Investments [Abstract]  
Cash Equivalents And Investments

NOTE 2 – CASH EQUIVALENTS AND INVESTMENTS

 

The following tables show the Company’s cash equivalents and available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short and long term investments as of March 31, 2013 and December 31, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2013

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
3,211,661 

 

$

 -

 

$

 -

 

$
3,211,661 

 

$
3,211,661 

 

$

 

 

$

 

Subtotal

 
3,211,661 

 

 

 -

 

 

 -

 

 
3,211,661 

 

 
3,211,661 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 
5,438,166 

 

 
2,442 

 

 
(3,860)

 

 
5,436,748 

 

 

 -

 

 
4,477,193 

 

 
959,555 

Corporate Notes/Bonds

 
9,774,853 

 

 
30,959 

 

 
(3,458)

 

 
9,802,354 

 

 

 -

 

 
4,557,917 

 

 
5,244,437 

Commercial Paper

 
1,642,521 

 

 
1,806 

 

 

 -

 

 
1,644,327 

 

 

 -

 

 
1,644,327 

 

 

 -

Subtotal

 
16,855,540 

 

 
35,207 

 

 
(7,318)

 

 
16,883,429 

 

 

 -

 

 
10,679,437 

 

 
6,203,992 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
20,067,201 

 

$
35,207 

 

$
(7,318)

 

$
20,095,090 

 

$
3,211,661 

 

$
10,679,437 

 

$
6,203,992 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

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 these recoveries to occur prior to the contractual maturities.  All unrealized losses as of March 31, 2013 were in a continuous unrealized loss position for less than twelve months and are not deemed to be other than temporarily impaired as of March 31, 2013.

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 March 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Estimated Market Value

 

 

 

 

 

Due within one year

 

$  
10,673,829 

 

$
10,679,437 

Due after one year through five years

 

 
6,181,711 

 

 
6,203,992 

 

 

$ 

16,855,540 

 

$
16,883,429 

 

The Company did not recognize any gross realized gains, and gross realized losses were immaterial, during the three-month periods ending March 31, 2013 and 2012, 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 Equivalents And Investments (Tables)
v0.0.0.0
Cash Equivalents And Investments (Tables)
 3 Months Ended
Mar. 31, 2013
Cash Equivalents And Investments [Abstract]  
Schedule Of Cash And Available-For-Sale Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2013

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Cash Equivalents

 

Short-Term Investments

 

Long-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
3,211,661 

 

$

 -

 

$

 -

 

$
3,211,661 

 

$
3,211,661 

 

$

 

 

$

 

Subtotal

 
3,211,661 

 

 

 -

 

 

 -

 

 
3,211,661 

 

 
3,211,661 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 
5,438,166 

 

 
2,442 

 

 
(3,860)

 

 
5,436,748 

 

 

 -

 

 
4,477,193 

 

 
959,555 

Corporate Notes/Bonds

 
9,774,853 

 

 
30,959 

 

 
(3,458)

 

 
9,802,354 

 

 

 -

 

 
4,557,917 

 

 
5,244,437 

Commercial Paper

 
1,642,521 

 

 
1,806 

 

 

 -

 

 
1,644,327 

 

 

 -

 

 
1,644,327 

 

 

 -

Subtotal

 
16,855,540 

 

 
35,207 

 

 
(7,318)

 

 
16,883,429 

 

 

 -

 

 
10,679,437 

 

 
6,203,992 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
20,067,201 

 

$
35,207 

 

$
(7,318)

 

$
20,095,090 

 

$
3,211,661 

 

$
10,679,437 

 

$
6,203,992 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Estimated Market Value

 

 

 

 

 

Due within one year

 

$  
10,673,829 

 

$
10,679,437 

Due after one year through five years

 

 
6,181,711 

 

 
6,203,992 

 

 

$ 

16,855,540 

 

$
16,883,429 

 


Cash, Cash Equivalents And Investments (Narrative) (Details)
v0.0.0.0
Cash, Cash Equivalents And Investments (Narrative) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Cash Equivalents And Investments [Abstract]    
Gross realized gains (losses) $ 0 $ 0

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 $)
Mar. 31, 2013
Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 20,067,201 $ 23,535,756
Gross Unrealized Gains 35,207 42,826
Gross Unrealized Losses (7,318) (2,859)
Fair Value 20,095,090 23,575,723
Cash Equivalents 3,211,661 5,497,788
Short-Term Investments 10,679,437 12,701,538
Long-Term Investments 6,203,992 5,376,397
Cash And Cash Equivalents [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 3,211,661 5,497,788
Fair Value 3,211,661 5,497,788
Cash Equivalents 3,211,661 5,497,788
Cash And Cash Equivalents [Member] | Money Market Funds [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 3,211,661 5,497,788
Fair Value 3,211,661 5,497,788
Cash Equivalents 3,211,661 5,497,788
Investments [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 16,855,540 18,037,968
Gross Unrealized Gains 35,207 42,826
Gross Unrealized Losses (7,318) (2,859)
Fair Value 16,883,429 18,077,935
Short-Term Investments 10,679,437 12,701,538
Long-Term Investments 6,203,992 5,376,397
Investments [Member] | Certificates Of Deposit [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 5,438,166 8,157,749
Gross Unrealized Gains 2,442 3,727
Gross Unrealized Losses (3,860) (1,945)
Fair Value 5,436,748 8,159,531
Short-Term Investments 4,477,193 7,258,768
Long-Term Investments 959,555 900,763
Investments [Member] | Corporate Notes And Bonds [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 9,774,853 8,241,327
Gross Unrealized Gains 30,959 35,364
Gross Unrealized Losses (3,458) (914)
Fair Value 9,802,354 8,275,777
Short-Term Investments 4,557,917 3,800,143
Long-Term Investments 5,244,437 4,475,634
Investments [Member] | Commercial Paper [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 1,642,521 1,638,892
Gross Unrealized Gains 1,806 3,735
Fair Value 1,644,327 1,642,627
Short-Term Investments $ 1,644,327 $ 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 $)
Mar. 31, 2013
Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]    
Fair Value $ 20,095,090 $ 23,575,723
Investments [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
Due within one year, Amortized Cost 10,673,829  
Due after one year through five years, Amortized Cost 6,181,711  
Amortized Cost 16,855,540  
Due within one year, Fair Value 10,679,437  
Due after one year through five years, Fair Value 6,203,992  
Fair Value $ 16,883,429 $ 18,077,935

Stock-Based Compensation
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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2013
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

NOTE 3 - STOCK-BASED COMPENSATION

 

Employee Stock Purchase Plan

 

Under the Company’s Employee Stock Purchase Plan (“ESPP”), employees are able to acquire shares of common stock at 90% of the price at the end of each current quarterly plan term.  The most recent term ended March 31, 2013.  The ESPP is considered compensatory under current Internal Revenue Service rules.  At March 31, 2013, after giving effect to the shares issued as of that date, 48,339 shares remain available for purchase under the ESPP.

 

2011 Executive Incentive Compensation Plan

 

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

 

During the first quarter of 2013, stock options covering 160,302 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 177,532 shares to key employees during the first quarter under the Company’s long-term incentive plan for performance over the 2013 to 2015 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, 2015 and the shares earned will be issued in the first quarter of 2016 to those key employees still with the Company at that time. The Company also granted deferred stock awards of up to 11,576 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 2014.

 

At March 31, 2013, 425,879 shares remained available for future issuance under the 2011 Incentive Plan.

 

 

Stock Option Plan for Directors

 

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

 

No options were granted under the Director Plan in 2012 or 2013.  The Director Plan was amended as of May 19, 2011 to prohibit option grants in 2011 and future years.

 

1992 Stock Plan

 

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

 

At March 31, 2013, after reserving for stock options and deferred stock awards granted in prior years and adjusting for forfeitures and issuances during the year, there were 154,430 shares reserved for issuance under the Stock Plan. The Company has not awarded stock options or deferred stock under this plan in 2013.

 

Changes in Stock Options Outstanding

 

The following table summarizes changes in the number of outstanding stock options under the 2011 Incentive Plan, the Director Plan and Stock Plan over the period December 31, 2012 to March 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average

 

Weighted average

 

 

 

exercise price

 

remaining

 

Options

 

per share

 

contractual term

Outstanding – December 31, 2012
311,153 

 

$

 
12.05 

 
4.98 

Awarded
160,302 

 

 

 
10.10 

 

 

Exercised

 -

 

 

 

 -

 

 

Forfeited

 -

 

 

 

 -

 

 

Outstanding – March 31, 2013
471,455 

 

 

 
11.39 

 
5.50 

 

 

 

 

 

 

 

 

Excercisable at March 31, 2013
214,496 

 

$

 
11.43 

 
4.33 

Expected to vest March 31, 2013
465,701 

 

 

 
11.38 

 
5.49 

 

The aggregate intrinsic value of all options (the amount by which the market price of the stock on the last day of the period exceeded the market price of the stock on the date of grant) outstanding at March 31, 2013 was $65,000.  The intrinsic value of all options exercised during the three months ended March 31, 2013 was $0. Net cash proceeds from the exercise of all stock options were $0 and $0 for the three months ended March 31, 2013 and 2012, respectively.

 

Changes in Deferred Stock Outstanding

 

The following table summarizes the changes in the number of deferred stock shares under the Stock Plan and 2011 Incentive Plan over the period December 31, 2012 to March 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

 

 

 

Grant Date

 

 

 

Shares

 

Fair Value

Outstanding – December 31, 2012

 

 
160,790 

 

$
14.16 

Granted

 

 
190,108 

 

 
9.83 

Vested

 

 

 -

 

 

 -

Forfeited

 

 
(3,263)

 

 
12.18 

Outstanding – March 31, 2013

 

 
347,635 

 

 
11.81 

 

Compensation Expense

 

Share-based compensation expense recognized for the three-month period ended March 31, 2013 was $177,000 before income taxes and $115,000 after income taxes. Share-based compensation expense recognized for the three-month period ended March 31, 2012 was $111,000 before income taxes and $72,000 after income taxes.  Unrecognized compensation expense for the Company’s plans was $1,396,000 at March 31, 2013.  Excess tax benefits from the exercise of stock options and issuance of restricted stock included in financing cash flows for the three month periods ended March 31, 2013 and 2012 were $0 and $0, respectively. Share-based compensation expense is recorded as a part of selling, general and administrative expenses.


Stock-Based Compensation (Tables)
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Stock-Based Compensation (Tables)
 3 Months Ended
Mar. 31, 2013
Stock-Based 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, 2012
311,153 

 

$

 
12.05 

 
4.98 

Awarded
160,302 

 

 

 
10.10 

 

 

Exercised

 -

 

 

 

 -

 

 

Forfeited

 -

 

 

 

 -

 

 

Outstanding – March 31, 2013
471,455 

 

 

 
11.39 

 
5.50 

 

 

 

 

 

 

 

 

Excercisable at March 31, 2013
214,496 

 

$

 
11.43 

 
4.33 

Expected to vest March 31, 2013
465,701 

 

 

 
11.38 

 
5.49 

 

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, 2012

 

 
160,790 

 

$
14.16 

Granted

 

 
190,108 

 

 
9.83 

Vested

 

 

 -

 

 

 -

Forfeited

 

 
(3,263)

 

 
12.18 

Outstanding – March 31, 2013

 

 
347,635 

 

 
11.81 

 


Stock-Based Compensation (Narrative) (Details)
v0.0.0.0
Stock-Based Compensation (Narrative) (Details) (USD $)
 3 Months Ended 12 Months Ended 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2013
Employee Stock Purchase Plan [Member]
Mar. 31, 2013
2011 Executive Incentive Compensation Plan [Member]
Mar. 31, 2013
Stock Option Plan For Directors [Member]
Dec. 31, 2012
Stock Option Plan For Directors [Member]
Mar. 31, 2013
1992 Stock Plan [Member]
Mar. 31, 2013
Key Employees [Member]
2011 Executive Incentive Compensation Plan [Member]
Mar. 31, 2013
Key Executive Employees [Member]
2011 Executive Incentive Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                  
Percentage of price of common stock at which employees are able to acquire     90.00%            
Shares available     48,339 425,879     154,430    
Number of awards authorized       1,000,000          
Number of options granted         0 0 0   160,302
Award expiration period         10 years       7 years
Award vesting percentage       25.00%          
Awards granted 190,108                
Deferred stock awards granted       11,576     0 177,532  
Minimum percentage of revenue growth required to earn deferred stock       150.00%          
Aggregate intrinsic value of options outstanding $ 65,000                
Intrinsic value of all options exercised 0                
Net cash proceeds from exercise of stock options 0 0              
Share based compensation expense before income taxes 177,000 111,000              
Share based compensation expense after income taxes 115,000 72,000              
Unrecognized compensation expense related to deferred stock shares 1,396,000                
Excess tax benefits from exercise of stock options $ 0 $ 0              

Stock-Based Compensation (Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan) (Details)
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Stock-Based Compensation (Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan) (Details) (USD $)
 3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Stock-Based Compensation [Abstract]    
Options, Outstanding 311,153  
Options, Awarded 160,302  
Options, Outstanding 471,455 311,153
Options, Exercisable at March 31, 2013 214,496  
Options, Expected to vest March 31, 2013 465,701  
Weighted average exercise price per share, Outstanding $ 12.05  
Weighted average exercise price per share, Awarded $ 10.10  
Weighted average exercise price per share, Outstanding $ 11.39 $ 12.05
Weighted average exercise price per share, Exercisable at March 31, 2013 $ 11.43  
Weighted average exercise price per share, Expected to vest March 31, 2013 $ 11.38  
Options, Outstanding - Weighted average remaining contractual term 5 years 6 months 4 years 11 months 23 days
Options, Exercisable at March 31, 2013 - Weighted average remaining contractual term 4 years 3 months 29 days  
Options, Expected to vest March 31, 2013 - Weighted average remaining contractual term 5 years 5 months 27 days  

Stock-Based Compensation (Schedule Of Changes In The Number Of Deferred Stock Shares Under The Stock Plan And Incentive Plan) (Details)
v0.0.0.0
Stock-Based Compensation (Schedule Of Changes In The Number Of Deferred Stock Shares Under The Stock Plan And Incentive Plan) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Stock-Based Compensation [Abstract]  
Shares, Outstanding 160,790
Shares, Granted 190,108
Shares, Forfeited (3,263)
Shares, Outstanding 347,635
Weighted Average Grant Date Fair Value, Outstanding $ 14.16
Weighted Average Grant Date Fair Value, Granted $ 9.83
Weighted Average Grant Date Fair Value, Forfeited $ 12.18
Weighted Average Grant Date Fair Value, Outstanding $ 11.81

Inventories
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Inventories
 3 Months Ended
Mar. 31, 2013
Inventories [Abstract]  
Inventories

NOTE 4 - INVENTORIES

 

Inventories summarized below are priced at the lower of first-in, first-out cost or market:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

December 31

 

 

2013

 

2012

Finished goods

 

$         

24,776,340 

 

$
21,252,143 

Raw and processed materials

 

 
12,203,985 

 

 
12,500,567 

 

 

$
36,980,325 

 

$
33,752,710 

 


Inventories (Tables)
v0.0.0.0
Inventories (Tables)
 3 Months Ended
Mar. 31, 2013
Inventories [Abstract]  
Schedule Of Inventories

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

December 31

 

 

2013

 

2012

Finished goods

 

$         

24,776,340 

 

$
21,252,143 

Raw and processed materials

 

 
12,203,985 

 

 
12,500,567 

 

 

$
36,980,325 

 

$
33,752,710 

 


Inventories (Schedule Of Inventories) (Details)
v0.0.0.0
Inventories (Schedule Of Inventories) (Details) (USD $)
Mar. 31, 2013
Dec. 31, 2012
Inventories [Abstract]    
Finished goods $ 24,776,340 $ 21,252,143
Raw and processed materials 12,203,985 12,500,567
Total $ 36,980,325 $ 33,752,710

Goodwill And Other Intangible Assets
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Goodwill And Other Intangible Assets
 3 Months Ended
Mar. 31, 2013
Goodwill And Other Intangible Assets [Abstract]  
Goodwill And Other Intangible Assets

NOTE 5 – GOODWILL AND OTHER INTANGIBLE ASSETS

 

Goodwill is required to be evaluated for impairment on an annual basis and between annual tests upon the occurrence of certain events or circumstances. A two-step process is performed to analyze whether or not goodwill has been impaired. Step one is to test for potential impairment, and requires that the fair value of the reporting unit be compared to its book value including goodwill. If the fair value is higher than the book value, no impairment is recognized. If the fair value is lower than the book value, a second step must be performed. The second step is to measure the amount of impairment loss, if any, and requires that a hypothetical purchase price allocation be done to determine the implied fair value of goodwill. This fair value is then compared to the carrying value of goodwill. If the implied fair value is lower than the carrying value, an impairment adjustment must be recorded.

The changes in the carrying amount of goodwill for the three months ended March 31, 2013 and 2012 by segment is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

Transition Networks

Total

 

 

 

 

 

 

 

 

January 1, 2012

 

$

 -

$
5,990,571 

$
5,990,571 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

March 31, 2012

 

$

 -

$
5,990,571 

$
5,990,571 

 

 

 

 

 

 

 

 

January 1, 2013

 

$

 -

$
5,956,934 

$
5,956,934 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 -

 
(159,263)

 
(159,263)

 

 

 

 

 

 

 

 

March 31, 2013

 

$

 -

$
5,797,671 

$
5,797,671 

 

 

 

 

 

 

 

 

Gross goodwill

 

 
1,271,986 

$
5,797,671 

$
7,069,657 

Accumulated impairment loss

 

 
(1,271,986)

 

 -

 
(1,271,986)

Balance at March 31, 2013

 

$

 -

$
5,797,671 

$
5,797,671 

 

The Company’s identifiable intangible assets with finite lives are being amortized over their estimated useful lives and were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2013

 

 

Gross Carrying Amount

Accumulated Amortization

Foreign Currency Translation

Net

 

 

 

 

 

 

Trademarks

 
81,785 
(18,045)
(5,839)
57,901 

Customer relationships

 
490,707 
(75,792)
(35,028)
379,887 

Technology

 
228,996 
(70,734)
(16,345)
141,917 

 

 
801,488 
(164,571)
(57,212)
579,705 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

Amortization expense on these identifiable intangible assets was $25,000 and $26,000 in 2013 and 2012, respectively. The amortization expense is included in selling, general and administrative expenses.


Goodwill And Other Intangible Assets (Tables)
v0.0.0.0
Goodwill And Other Intangible Assets (Tables)
 3 Months Ended
Mar. 31, 2013
Goodwill And Other Intangible Assets [Abstract]  
Schedule Of Changes In Carrying Value Of Goodwill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

Transition Networks

Total

 

 

 

 

 

 

 

 

January 1, 2012

 

$

 -

$
5,990,571 

$
5,990,571 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

March 31, 2012

 

$

 -

$
5,990,571 

$
5,990,571 

 

 

 

 

 

 

 

 

January 1, 2013

 

$

 -

$
5,956,934 

$
5,956,934 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 -

 
(159,263)

 
(159,263)

 

 

 

 

 

 

 

 

March 31, 2013

 

$

 -

$
5,797,671 

$
5,797,671 

 

 

 

 

 

 

 

 

Gross goodwill

 

 
1,271,986 

$
5,797,671 

$
7,069,657 

Accumulated impairment loss

 

 
(1,271,986)

 

 -

 
(1,271,986)

Balance at March 31, 2013

 

$

 -

$
5,797,671 

$
5,797,671 

 

Schedule Of Finite-Lived Intangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2013

 

 

Gross Carrying Amount

Accumulated Amortization

Foreign Currency Translation

Net

 

 

 

 

 

 

Trademarks

 
81,785 
(18,045)
(5,839)
57,901 

Customer relationships

 
490,707 
(75,792)
(35,028)
379,887 

Technology

 
228,996 
(70,734)
(16,345)
141,917 

 

 
801,488 
(164,571)
(57,212)
579,705 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 


Goodwill And Other Intangible Assets (Narrative) (Details)
v0.0.0.0
Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Goodwill And Other Intangible Assets [Abstract]    
Amortization expense $ 25,000 $ 26,000

Goodwill And Other Intangible Assets (Schedule Of Changes In Carrying Value Of Goodwill) (Details)
v0.0.0.0
Goodwill And Other Intangible Assets (Schedule Of Changes In Carrying Value Of Goodwill) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2011
Goodwill [Line Items]      
Goodwill, beginning balance $ 5,956,934 $ 5,990,571 $ 5,990,571
Foreign currency translation (159,263)    
Goodwill, ending balance 5,797,671 5,990,571 5,990,571
Gross goodwill 7,069,657    
Accumulated impairment loss (1,271,986)    
Balance at March 31, 2013 5,797,671 5,990,571 5,990,571
Suttle [Member]
      
Goodwill [Line Items]      
Gross goodwill 1,271,986    
Accumulated impairment loss (1,271,986)    
Transition Networks [Member]
      
Goodwill [Line Items]      
Goodwill, beginning balance 5,956,934 5,990,571 5,990,571
Foreign currency translation (159,263)    
Goodwill, ending balance 5,797,671 5,990,571 5,990,571
Gross goodwill 5,797,671    
Balance at March 31, 2013 $ 5,797,671 $ 5,990,571 $ 5,990,571

Goodwill And Other Intangible Assets (Schedule Of Finite-Lived Intangible Assets) (Details)
v0.0.0.0
Goodwill And Other Intangible Assets (Schedule Of Finite-Lived Intangible Assets) (Details) (USD $)
Mar. 31, 2013
Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 801,488 $ 801,488
Accumulated Amortization (164,571) (149,073)
Foreign Currency Translation (57,212) (9,976)
Net 579,705 642,439
Trademarks [Member]
    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 81,785 81,785
Accumulated Amortization (18,045) (16,346)
Foreign Currency Translation (5,839) (1,018)
Net 57,901 64,421
Customer Relationships [Member]
    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 490,707 490,707
Accumulated Amortization (75,792) (68,652)
Foreign Currency Translation (35,028) (6,108)
Net 379,887 415,947
Technology [Member]
    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 228,996 228,996
Accumulated Amortization (70,734) (64,075)
Foreign Currency Translation (16,345) (2,850)
Net $ 141,917 $ 162,071

Warranty
v0.0.0.0
Warranty
 3 Months Ended
Mar. 31, 2013
Warranty [Abstract]  
Warranty

NOTE 6 – WARRANTY

 

We provide 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 actual warranty expense could differ from the estimates made by the Company based on product performance.

 

The following table presents the changes in the Company’s warranty liability for the three-month periods ended March 31, 2013 and 2012, respectively, the majority of which relates to a five-year obligation to provide for potential future liabilities for network equipment sales.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

 

2012

Beginning balance

 

$
590,000 

 

$
634,000 

Amounts charged to expense

 

 
90,000 

 

 
87,000 

Actual warranty costs paid

 

 
(123,000)

 

 
(97,000)

Ending balance

 

$
557,000 

 

$
623,000 

 


Warranty (Tables)
v0.0.0.0
Warranty (Tables)
 3 Months Ended
Mar. 31, 2013
Warranty [Abstract]  
Schedule Of Warranty

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

 

2012

Beginning balance

 

$
590,000 

 

$
634,000 

Amounts charged to expense

 

 
90,000 

 

 
87,000 

Actual warranty costs paid

 

 
(123,000)

 

 
(97,000)

Ending balance

 

$
557,000 

 

$
623,000 

 


Warranty (Schedule Of Warranty) (Details)
v0.0.0.0
Warranty (Schedule Of Warranty) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Warranty [Abstract]    
Beginning Balance $ 590,000 $ 634,000
Amounts charged to expense 90,000 87,000
Actual warranty costs paid (123,000) (97,000)
Ending balance $ 557,000 $ 623,000

Contingencies
v0.0.0.0
Contingencies
 3 Months Ended
Mar. 31, 2013
Contingencies [Abstract]  
Contingencies

NOTE 7 – CONTINGENCIES

 

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


Income Taxes
v0.0.0.0
Income Taxes
 3 Months Ended
Mar. 31, 2013
Income Taxes [Abstract]  
Income Taxes

NOTE 8 – INCOME TAXES

 

In the preparation of the Company’s consolidated financial statements, management calculates income taxes based upon the estimated effective rate applicable to operating results for the full fiscal year. This includes estimating the current tax liability as well as assessing differences resulting from different treatment of items for tax and book accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded on the balance sheet. These assets and liabilities are analyzed regularly and management assesses the likelihood that deferred tax assets will be recovered from future taxable income.

  

At March 31, 2013 there was $256,000 of net uncertain tax benefit positions that would reduce the effective income tax rate if recognized.  The Company records interest and penalties related to income taxes as income tax expense in the Condensed Consolidated Statements of Income.

 

The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. The tax years 2009-2011 remain open to examination by the Internal Revenue Service and the years 2008-2011 remain open to examination by various state tax departments. The tax years from 2009-2011 remain open in Costa Rica.

 

The Company’s effective income tax rate was 36.5% for the first three months of 2013. The effective tax rate differs from the federal tax rate of 35% due to state income taxes, foreign losses not deductible for U.S. income tax purposes, provisions for interest charges, and the effect of operations conducted in lower foreign tax rate jurisdictions. The effect of the foreign operations is an overall rate decrease of approximately 2.6% for the three months ended March 31, 2013.  There were no additional uncertain tax positions identified in the first quarter of 2013.  The Company's effective income tax rate for the three months ended March 31, 2012 was 41.1%, and differed from the federal tax rate due to state income taxes, foreign losses not deductible for U.S. income tax purposes, provisions for interest charges, and settlement of uncertain tax positions.


Income Taxes (Narrative) (Details)
v0.0.0.0
Income Taxes (Narrative) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Income Taxes [Abstract]    
Uncertain tax benefit positions that would reduce the effective income tax rate if recognized $ 256,000  
Effective income tax rate 36.50% 41.10%
Federal tax rate 35.00%  
Decrease in income tax rate due to the effect of foreign operations 2.60%  

Segment Information
v0.0.0.0
Segment Information
 3 Months Ended
Mar. 31, 2013
Segment Information [Abstract]  
Segment Information

NOTE 9 – SEGMENT INFORMATION

 

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.

 

Our 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 our products and services. There are no material inter-segment revenues.

 

Information concerning the Company’s continuing operations in the various segments for the three-month periods ended March 31, 2013 and 2012 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

Three Months Ended March 31, 2013

 

 

 

 

 

 

 

 

 

 

Sales

$
12,412,188 

$
10,813,121 

$
4,227,422 

$

 -

$
27,452,731 

Cost of sales

 
9,096,683 

 
5,092,291 

 
3,487,830 

 

 -

 
17,676,804 

Gross profit

 
3,315,505 

 
5,720,830 

 
739,592 

 

 -

 
9,775,927 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
2,357,941 

 
5,495,179 

 
559,132 

 
992,898 

 
9,405,150 

Operating income (loss)

$
957,564 

$
225,651 

$
180,460 

$
(992,898)

$
370,777 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
216,749 

$
179,866 

$
14,447 

$
74,731 

$
485,793 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
164,402 

$
131,354 

$
15,361 

$
168,012 

$
479,129 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
26,834,977 

$
31,484,025 

$
14,551,382 

$
38,199,216 

$
111,069,600 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

Three Months Ended March 31, 2012

 

 

 

 

 

 

 

 

 

 

Sales

$
10,577,304 

$
12,938,193 

$
728,425 

$

 -

$
24,243,922 

Cost of sales

 
7,675,962 

 
6,128,836 

 
490,496 

 

 -

 
14,295,294 

Gross profit

 
2,901,342 

 
6,809,357 

 
237,929 

 

 -

 
9,948,628 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
2,368,441 

 
5,622,237 

 
584,968 

 
1,242,536 

 
9,818,182 

Operating income (loss)

$
532,901 

$
1,187,120 

$
(347,039)

$
(1,242,536)

$
130,446 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
244,025 

$
241,436 

$
27,091 

$
72,138 

$
584,690 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
402,899 

$
82,451 

$
10,096 

$
185,653 

$
681,099 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
28,172,970 

$
34,646,429 

$
1,629,899 

$
47,998,048 

$
112,447,346 

 

 


Segment Information (Tables)
v0.0.0.0
Segment Information (Tables)
 3 Months Ended
Mar. 31, 2013
Segment Information [Abstract]  
Schedule Of Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

Three Months Ended March 31, 2013

 

 

 

 

 

 

 

 

 

 

Sales

$
12,412,188 

$
10,813,121 

$
4,227,422 

$

 -

$
27,452,731 

Cost of sales

 
9,096,683 

 
5,092,291 

 
3,487,830 

 

 -

 
17,676,804 

Gross profit

 
3,315,505 

 
5,720,830 

 
739,592 

 

 -

 
9,775,927 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
2,357,941 

 
5,495,179 

 
559,132 

 
992,898 

 
9,405,150 

Operating income (loss)

$
957,564 

$
225,651 

$
180,460 

$
(992,898)

$
370,777 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
216,749 

$
179,866 

$
14,447 

$
74,731 

$
485,793 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
164,402 

$
131,354 

$
15,361 

$
168,012 

$
479,129 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
26,834,977 

$
31,484,025 

$
14,551,382 

$
38,199,216 

$
111,069,600 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transition

 

JDL

 

 

 

 

 

 

Suttle

 

Networks

 

Technologies

 

Other

 

Total

Three Months Ended March 31, 2012

 

 

 

 

 

 

 

 

 

 

Sales

$
10,577,304 

$
12,938,193 

$
728,425 

$

 -

$
24,243,922 

Cost of sales

 
7,675,962 

 
6,128,836 

 
490,496 

 

 -

 
14,295,294 

Gross profit

 
2,901,342 

 
6,809,357 

 
237,929 

 

 -

 
9,948,628 

Selling, general and

 

 

 

 

 

 

 

 

 

 

 administrative expenses

 
2,368,441 

 
5,622,237 

 
584,968 

 
1,242,536 

 
9,818,182 

Operating income (loss)

$
532,901 

$
1,187,120 

$
(347,039)

$
(1,242,536)

$
130,446 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$
244,025 

$
241,436 

$
27,091 

$
72,138 

$
584,690 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$
402,899 

$
82,451 

$
10,096 

$
185,653 

$
681,099 

 

 

 

 

 

 

 

 

 

 

 

Assets

$
28,172,970 

$
34,646,429 

$
1,629,899 

$
47,998,048 

$
112,447,346 

 


Segment Information (Narrative) (Details)
v0.0.0.0
Segment Information (Narrative) (Details)
 3 Months Ended
Mar. 31, 2013
segment
Segment Information [Abstract]  
Number of segments 3

Segment Information (Schedule Of Segment Information) (Details)
v0.0.0.0
Segment Information (Schedule Of Segment Information) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Segment Reporting Information [Line Items]      
Sales $ 27,452,731 $ 24,243,922  
Cost of sales 17,676,804 14,295,294  
Gross profit 9,775,927 9,948,628  
Selling, general and administrative expenses 9,405,150 9,818,182  
Operating income 370,777 130,446  
Depreciation and amortization 485,793 584,690  
Capital expenditures 479,129 681,099  
Assets 111,069,600 112,447,346 112,534,645
Suttle [Member]
      
Segment Reporting Information [Line Items]      
Sales 12,412,188 10,577,304  
Cost of sales 9,096,683 7,675,962  
Gross profit 3,315,505 2,901,342  
Selling, general and administrative expenses 2,357,941 2,368,441  
Operating income 957,564 532,901  
Depreciation and amortization 216,749 244,025  
Capital expenditures 164,402 402,899  
Assets 26,834,977 28,172,970  
Transition Networks [Member]
      
Segment Reporting Information [Line Items]      
Sales 10,813,121 12,938,193  
Cost of sales 5,092,291 6,128,836  
Gross profit 5,720,830 6,809,357  
Selling, general and administrative expenses 5,495,179 5,622,237  
Operating income 225,651 1,187,120  
Depreciation and amortization 179,866 241,436  
Capital expenditures 131,354 82,451  
Assets 31,484,025 34,646,429  
JDL Technologies [Member]
      
Segment Reporting Information [Line Items]      
Sales 4,227,422 728,425  
Cost of sales 3,487,830 490,496  
Gross profit 739,592 237,929  
Selling, general and administrative expenses 559,132 584,968  
Operating income 180,460 (347,039)  
Depreciation and amortization 14,447 27,091  
Capital expenditures 15,361 10,096  
Assets 14,551,382 1,629,899  
Other [Member]
      
Segment Reporting Information [Line Items]      
Selling, general and administrative expenses 992,898 1,242,536  
Operating income (992,898) (1,242,536)  
Depreciation and amortization 74,731 72,138  
Capital expenditures 168,012 185,653  
Assets $ 38,199,216 $ 47,998,048  

Pensions
v0.0.0.0
Pensions
 3 Months Ended
Mar. 31, 2013
Pensions [Abstract]  
Pensions

NOTE 10 – PENSIONS

 

The Company’s U.K. based subsidiary Austin Taylor maintains defined benefit pension plans.  The Company does not provide any other post-retirement benefits to its employees.  Components of net periodic benefit cost of the pension plans for the three months ended March 31, 2013 and 2012 were:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31

 

 

 

2013

 

 

2012

Service cost

 

$
65,000 

 

$
9,000 

Interest cost

 

 
57,000 

 

 
62,000 

Expected return on assets

 

 
(62,000)

 

 
(69,000)

Amortization of prior service cost

 

 

 -

 

 
12,000 

Net periodic pension cost

 

$
60,000 

 

$
14,000 

 

 


Pensions (Tables)
v0.0.0.0
Pensions (Tables)
 3 Months Ended
Mar. 31, 2013
Pensions [Abstract]  
Summary Of Components Of Net Periodic Benefit Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31

 

 

 

2013

 

 

2012

Service cost

 

$
65,000 

 

$
9,000 

Interest cost

 

 
57,000 

 

 
62,000 

Expected return on assets

 

 
(62,000)

 

 
(69,000)

Amortization of prior service cost

 

 

 -

 

 
12,000 

Net periodic pension cost

 

$
60,000 

 

$
14,000 

 


Pensions (Summary Of Components Of Net Periodic Benefit Cost) (Details)
v0.0.0.0
Pensions (Summary Of Components Of Net Periodic Benefit Cost) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Pensions [Abstract]    
Service cost $ 65,000 $ 9,000
Interest cost 57,000 62,000
Expected return on plan assets (62,000) (69,000)
Amortization of prior service cost   12,000
Net periodic pension cost $ 60,000 $ 14,000

Net Income Per Share
v0.0.0.0
Net Income Per Share
 3 Months Ended
Mar. 31, 2013
Net Income Per Share [Abstract]  
Net Income Per Share

NOTE 11 – 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 takes into effect the dilutive effect of potential common shares outstanding.  The Company’s only potential common shares outstanding are stock options and shares associated with the long-term incentive compensation plans, which resulted in a dilutive effect of 9,785 and 36,571 shares for the three month periods ended March 31, 2013 and 2012, respectively. The Company calculates the dilutive effect of outstanding options using the treasury stock method. Options totaling 116,290 were excluded from the calculation of diluted earnings per share for the three-months ended March 31, 2013 because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 323,236 shares were not included for the three-months ended March 31, 2013 because of unmet performance conditions.  All options were included for the three-month period ended March 31, 2012 because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 149,470 shares were not included for the three-month period ended March 31, 2012 because of unmet performance conditions.


Net Income Per Share (Details)
v0.0.0.0
Net Income Per Share (Details)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Dilutive effect of outstanding stock options and shares associated with long-term incentive compensation plans 9,785 36,571
Options [Member]
    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares not included in the computation of diluted earnings per share 116,290  
Deferred Stock [Member]
    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares not included in the computation of diluted earnings per share 323,236 149,470

Fair Value Measurements
v0.0.0.0
Fair Value Measurements
 3 Months Ended
Mar. 31, 2013
Fair Value Measurements [Abstract]  
Fair Value Measurements

NOTE 12 – FAIR VALUE MEASUREMENTS

The accounting guidance establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

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 March 31, 2013 and December 31, 2012, are summarized below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
3,211,661 

 

$

 -

 

$

 -

 

$
3,211,661 

Subtotal

 
3,211,661 

 

 

 -

 

 

 -

 

 
3,211,661 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
4,477,193 

 

 

 -

 

 
4,477,193 

Corporate Notes/Bonds

 

 -

 

 
4,557,917 

 

 

 -

 

 
4,557,917 

Commercial Paper

 

 -

 

 
1,644,327 

 

 

 -

 

 
1,644,327 

Subtotal

 

 -

 

 
10,679,437 

 

 

 -

 

 
10,679,437 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
959,555 

 

 

 -

 

 
959,555 

Corporate Notes/Bonds

 

 -

 

 
5,244,437 

 

 

 -

 

 
5,244,437 

Subtotal

 

 -

 

 
6,203,992 

 

 

 -

 

 
6,203,992 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accrued Consideration

 

 -

 

 

 -

 

 
(581,750)

 

 
(581,750)

Subtotal

 

 -

 

 

 -

 

 
(581,750)

 

 
(581,750)

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
3,211,661 

 

$
16,883,429 

 

$
(581,750)

 

$
19,513,339 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

The estimated fair value of remaining contingent consideration as of March 31, 2013 was $581,750, 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 the three months was due to $161,060 in payments and $27,231 in foreign currency gains. 

 

There were no transfers between levels during the three months ended March 31, 2013.


Fair Value Measurements (Tables)
v0.0.0.0
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2013
Fair Value Measurements [Abstract]  
Schedule Of Financial Assets And Liabilities Measured At Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

$
3,211,661 

 

$

 -

 

$

 -

 

$
3,211,661 

Subtotal

 
3,211,661 

 

 

 -

 

 

 -

 

 
3,211,661 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
4,477,193 

 

 

 -

 

 
4,477,193 

Corporate Notes/Bonds

 

 -

 

 
4,557,917 

 

 

 -

 

 
4,557,917 

Commercial Paper

 

 -

 

 
1,644,327 

 

 

 -

 

 
1,644,327 

Subtotal

 

 -

 

 
10,679,437 

 

 

 -

 

 
10,679,437 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 -

 

 
959,555 

 

 

 -

 

 
959,555 

Corporate Notes/Bonds

 

 -

 

 
5,244,437 

 

 

 -

 

 
5,244,437 

Subtotal

 

 -

 

 
6,203,992 

 

 

 -

 

 
6,203,992 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accrued Consideration

 

 -

 

 

 -

 

 
(581,750)

 

 
(581,750)

Subtotal

 

 -

 

 

 -

 

 
(581,750)

 

 
(581,750)

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
3,211,661 

 

$
16,883,429 

 

$
(581,750)

 

$
19,513,339 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 


Fair Value Measurements (Narrative) (Details)
v0.0.0.0
Fair Value Measurements (Narrative) (Details) (USD $)
 3 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration $ 581,750 $ 770,041
Change in fair value of acquisition-related contingent consideration (27,231)  
Payments [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Change in fair value of acquisition-related contingent consideration 161,060  
Foreign Currency Gain (Loss) [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Change in fair value of acquisition-related contingent consideration 27,231  
Level 3 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration 581,750 770,041
Accrued Consideration [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration 581,750 770,041
Accrued Consideration [Member] | Level 3 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration $ 581,750 $ 770,041

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 $)
Mar. 31, 2013
Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents $ 3,211,661 $ 5,497,788
Current Liabilities, fair value (581,750) (770,041)
Assets (Liabilities) Net, fair value 19,513,339 22,805,682
Level 1 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 3,211,661 5,497,788
Assets (Liabilities) Net, fair value 3,211,661 5,497,788
Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets (Liabilities) Net, fair value 16,883,429 18,077,935
Level 3 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current Liabilities, fair value (581,750) (770,041)
Assets (Liabilities) Net, fair value (581,750) (770,041)
Money Market Funds [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 3,211,661 5,497,788
Money Market Funds [Member] | Level 1 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 3,211,661 5,497,788
Accrued Consideration [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current Liabilities, fair value (581,750) (770,041)
Accrued Consideration [Member] | Level 3 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current Liabilities, fair value (581,750) (770,041)
Short-Term Investments [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 10,679,437 12,701,538
Short-Term Investments [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 10,679,437 12,701,538
Short-Term Investments [Member] | Certificates Of Deposit [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 4,477,193 7,258,768
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 4,477,193 7,258,768
Short-Term Investments [Member] | Corporate Notes And Bonds [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 4,557,917 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 4,557,917 3,800,143
Short-Term Investments [Member] | Commercial Paper [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 1,644,327 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 1,644,327 1,642,627
Long Term Investments [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 6,203,992 5,376,397
Long Term Investments [Member] | Level 2 [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 6,203,992 5,376,397
Long Term Investments [Member] | Certificates Of Deposit [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 959,555 900,763
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 959,555 900,763
Long Term Investments [Member] | Corporate Notes And Bonds [Member]
    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments 5,244,437 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 $ 5,244,437 $ 4,475,634

Subsequent Events
v0.0.0.0
Subsequent Events
 3 Months Ended
Mar. 31, 2013
Subsequent Events [Abstract]  
Subsequent Events

NOTE 13 – 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.