Document And Entity Information
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Document And Entity Information
 6 Months Ended
Jun. 30, 2012
Aug. 01, 2012
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2012  
Document Fiscal Period Focus Q2  
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   8,521,438

Condensed Consolidated Balance Sheets
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Condensed Consolidated Balance Sheets (USD $)
Jun. 30, 2012
Dec. 31, 2011
CURRENT ASSETS:    
Cash and cash equivalents $ 14,465,348 $ 22,515,710
Investments 17,814,117 18,635,601
Trade accounts receivable, less allowance for doubtful accounts of $190,000 and $175,000, respectively 15,260,418 14,461,168
Inventories 31,059,932 25,986,003
Prepaid income taxes 3,579,839 3,893,003
Other current assets 649,514 999,863
Deferred income taxes 3,435,233 3,455,047
TOTAL CURRENT ASSETS 86,264,401 89,946,395
PROPERTY, PLANT AND EQUIPMENT, net 14,155,239 14,019,019
OTHER ASSETS:    
Investments 5,005,523 4,883,510
Goodwill 5,990,571 5,990,571
Prepaid pensions 1,047,753 905,552
Other assets 853,381 913,869
TOTAL OTHER ASSETS 12,897,228 12,693,502
TOTAL ASSETS 113,316,868 116,658,916
CURRENT LIABILITIES:    
Current portion of long-term debt 442,148 427,345
Accounts payable 5,222,815 4,398,848
Accrued compensation and benefits 2,737,715 5,870,000
Accrued consideration 971,681 1,002,623
Other accrued liabilities 2,055,503 2,388,867
Dividends payable 1,431,803 1,299,963
TOTAL CURRENT LIABILITIES 12,861,665 15,387,646
LONG TERM LIABILITIES:    
Long-term compensation plans 380,424 283,075
Income taxes payable 422,451 405,673
Deferred income taxes 1,525,531 1,476,969
Long term debt - mortgage payable 1,350,155 1,574,993
TOTAL LONG-TERM LIABILITIES 3,678,561 3,740,710
COMMITMENTS AND CONTINGENCIES (Footnote 7)      
STOCKHOLDERS' EQUITY    
Preferred stock, par value $1.00 per share; 3,000,000 shares authorized; none issued      
Common stock, par value $.05 per share; 30,000,000 shares authorized; 8,518,764 and 8,466,774 shares issued and outstanding, respectively 425,938 423,339
Additional paid-in capital 36,466,644 35,533,273
Retained earnings 59,598,212 61,466,342
Accumulated other comprehensive income, net of tax 285,848 107,606
TOTAL STOCKHOLDERS' EQUITY 96,776,642 97,530,560
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 113,316,868 $ 116,658,916

Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Jun. 30, 2011
Dec. 31, 2010
Condensed Consolidated Balance Sheets [Abstract]    
Trade accounts receivable, allowance for doubtful accounts $ 190,000 $ 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 8,518,764 8,466,774
Common stock, shares outstanding 8,518,764 8,466,774

Condensed Consolidated Statements Of Income And Comprehensive Income
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Condensed Consolidated Statements Of Income And Comprehensive Income (USD $)
 3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Condensed Consolidated Statements Of Income And Comprehensive Income [Abstract]        
Sales from operations $ 25,561,258 $ 45,429,684 $ 49,805,179 $ 76,452,487
Costs and expenses:        
Cost of sales 14,905,375 26,974,099 29,200,669 44,668,413
Selling, general and administrative expenses 9,298,281 9,930,760 19,116,463 19,117,970
Goodwill impairment 0 1,271,986 0 1,271,986
Total costs and expenses 24,203,656 38,176,845 48,317,132 65,058,369
Operating income 1,357,602 7,252,839 1,488,047 11,394,118
Other income and (expenses):        
Investment and other income 53,870 57,440 33,172 136,862
Gain (loss) on sale of assets 68,969 2,236 89,542 (9,984)
Interest and other expense (34,971) (47,809) (71,730) (95,851)
Other income, net 87,868 11,867 50,984 31,027
Income before income taxes 1,445,470 7,264,706 1,539,031 11,425,145
Income tax expense 473,735 3,180,041 512,218 4,782,641
Net income 971,735 4,084,665 1,026,813 6,642,504
Other comprehensive income, net of tax:        
Additional minimum pension liability adjustments (3,166) (9,201) 132,726 (18,419)
Unrealized gains (losses) on available-for-sale securities (6,419) (10,088) 5,633 (25,416)
Foreign currency translation adjustment (98,134) 44 39,883 68,101
Total other comprehensive income (loss), net of tax (107,719) (19,245) 178,242 24,266
Comprehensive net income $ 864,016 $ 4,065,420 $ 1,205,055 $ 6,666,770
Basic net income per share: $ 0.11 $ 0.48 $ 0.12 $ 0.79
Diluted net income per share: $ 0.11 $ 0.48 $ 0.12 $ 0.78
Average Basic Shares Outstanding 8,522,307 8,442,416 8,498,040 8,433,758
Average Dilutive Shares Outstanding 8,562,148 8,519,679 8,526,048 8,489,499
Dividends per share $ 0.16 $ 0.15 $ 0.32 $ 0.30

Condensed Consolidated Statement Of Changes In Stockholders' Equity
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Condensed Consolidated Statement Of Changes In Stockholders' Equity (USD $)
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income [Member]
Total
BALANCE at Dec. 31, 2011 $ 423,339 $ 35,533,273 $ 61,466,342 $ 107,606 $ 97,530,560
BALANCE, Shares at Dec. 31, 2011 8,466,774        
Net income     1,026,813   1,026,813
Issuance of common stock under Employee Stock Purchase Plan 347 93,737     94,084
Issuance of common stock under Employee Stock Purchase Plan, Shares 6,936        
Issuance of common stock to Employee Stock Ownership Plan 36,145 506,392     508,198
Issuance of common stock to Employee Stock Ownership Plan, Shares 1,806        
Issuance of common stock under Non-Employee Stock Option Plan 600 84,983     85,583
Issuance of common stock under Non-Employee Stock Option Plan, Shares 12,000        
Issuance of common stock under Executive Stock Plan 808 39,503     40,311
Issuance of common stock under Executive Stock Plan, shares 16,156        
Tax benefit from non-qualified stock options and restricted stock   67,932     67,932
Share-based compensation   223,062     223,062
Purchase of common stock (962) (82,238) (123,902)   (207,102)
Purchase of common stock, shares (19,247)        
Shareholder dividends     (2,771,041)   (2,771,041)
Other comprehensive income       178,242 178,242
BALANCE at Jun. 30, 2012 $ 425,938 $ 36,466,644 $ 59,598,212 $ 285,848 $ 96,776,642
BALANCE, Shares at Jun. 30, 2012 8,518,764        

Condensed Consolidated Statements Of Cash Flows
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Condensed Consolidated Statements Of Cash Flows (USD $)
 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 1,026,813 $ 6,642,504
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation and amortization 1,124,254 1,034,140
Share-based compensation 223,062 249,316
Deferred income taxes 68,375 661,389
Goodwill impairment 0 1,271,986
(Gain) loss on sale of assets (89,542) 9,984
Excess tax benefit from stock based payments (67,932) (23,227)
Changes in assets and liabilities:    
Trade receivables (790,154) (14,682,075)
Inventories (5,060,313) (2,208,145)
Prepaid income taxes 313,120 296,586
Other assets 368,680 101,517
Accounts payable 818,696 2,521,963
Accrued compensation and benefits (2,526,956) (165,456)
Other accrued expenses (323,490) (296,517)
Income taxes payable 84,710 568,899
Net cash used in operating activities (4,830,677) (4,017,136)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Capital expenditures (1,213,458) (968,912)
Purchases of investments (8,734,935) (10,575,526)
Proceeds from the sale of fixed assets 97,222 2,745
Proceeds from the sale of investments 9,440,039 11,950,000
Net cash (used in) provided by investing activities (411,132) 408,307
CASH FLOWS FROM FINANCING ACTIVITIES:    
Cash dividends paid (2,639,201) (2,527,555)
Mortgage principal payments (210,035) (196,206)
Proceeds from issuance of common stock 219,978 125,953
Excess tax benefit from stock based payments 67,932 23,227
Payment of contingent consideration related to acquisition (43,639)  
Purchase of common stock (207,102)  
Net cash used in financing activities (2,812,067) (2,574,581)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH 3,514 7,232
NET DECREASE IN CASH AND CASH EQUIVALENTS (8,050,362) (6,176,178)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 22,515,710 16,787,558
CASH AND CASH EQUIVALENTS AT END OF PERIOD 14,465,348 10,611,380
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Income taxes paid 54,171 3,255,766
Interest paid 70,793 78,210
Dividends declared not paid $ 1,366,082 $ 1,268,723

Summary Of Significant Accounting Policies
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Summary Of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2012
Summary Of Significant Accounting Policies [Abstract]  
Summary Of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

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

Financial Statement Presentation

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

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

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

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

 

Cash Equivalents and Investments

For purposes of the condensed consolidated balance sheets and statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. As of June 30, 2012, the Company had $14.5 million in cash and cash equivalents. Of this amount, $0.6 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 Corporation ("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 of the Company's cash and cash equivalents is deposited at banks. The FDIC insures deposits at banks up to $250,000 per account. The Company's cash and cash equivalents are held at large, well-established financial institutions and the Company believes any risk associated with uninsured balances is remote.

The Company had $22.8 million in investments, which consist of certificates of deposit, commercial paper, corporate notes and bonds, and municipal bonds that were purchased in the public markets and are classified as available-for-sale at June 30, 2012. Of the $22.8 million in investments, $17.8 million mature in 12 months or less and are classified as current assets. Available-for-sale investments are reported at fair value with unrealized gains and losses net of tax excluded from operations and reported as a separate component of stockholders' equity (See Accumulated Other Comprehensive Income below).

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:

 

 

 

 

 

 

 

 

 

 

June 30
2012

 

December 31
2011

 

Foreign currency translation

 

$

(297,714

)

$

(337,597

)

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

 

 

3,000

 

 

(2,633

)

Minimum pension liability

 

 

580,562

 

 

447,836

 

 

 

$

285,848

 

$

107,606

 

 

 

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

Financial Statement Presentation

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

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

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

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

 

Cash Equivalents and Investments

For purposes of the condensed consolidated balance sheets and statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. As of June 30, 2012, the Company had $14.5 million in cash and cash equivalents. Of this amount, $0.6 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 Corporation ("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 of the Company's cash and cash equivalents is deposited at banks. The FDIC insures deposits at banks up to $250,000 per account. The Company's cash and cash equivalents are held at large, well-established financial institutions and the Company believes any risk associated with uninsured balances is remote.

The Company had $22.8 million in investments, which consist of certificates of deposit, commercial paper, corporate notes and bonds, and municipal bonds that were purchased in the public markets and are classified as available-for-sale at June 30, 2012. Of the $22.8 million in investments, $17.8 million mature in 12 months or less and are classified as current assets. Available-for-sale investments are reported at fair value with unrealized gains and losses net of tax excluded from operations and reported as a separate component of stockholders' equity (See Accumulated Other Comprehensive Income below).
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:

 

 

 

 

 

 

 

 

 

 

June 30
2012

 

December 31
2011

 

Foreign currency translation

 

$

(297,714

)

$

(337,597

)

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

 

 

3,000

 

 

(2,633

)

Minimum pension liability

 

 

580,562

 

 

447,836

 

 

 

$

285,848

 

$

107,606

 

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

 

 

 

 

 

 

 

 

 

 

June 30
2012

 

December 31
2011

 

Foreign currency translation

 

$

(297,714

)

$

(337,597

)

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

 

 

3,000

 

 

(2,633

)

Minimum pension liability

 

 

580,562

 

 

447,836

 

 

 

$

285,848

 

$

107,606

 

Summary Of Significant Accounting Policies (Narrative) (Details)
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Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
 6 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2011
Dec. 31, 2010
Summary Of Significant Accounting Policies [Abstract]        
Cash and cash equivalents $ 14,465,348 $ 22,515,710 $ 10,611,380 $ 16,787,558
Short-term money market funds 600,000      
Money market funds, preserved value of investment per share $ 1.00      
Investments 22,800,000      
Available-for-sale securities classified as current assets $ 17,800,000      

Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income, Net Of Tax) (Details)
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Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income, Net Of Tax) (Details) (USD $)
Jun. 30, 2012
Dec. 31, 2011
Summary Of Significant Accounting Policies [Abstract]    
Foreign currency translation $ (297,714) $ (337,597)
Unrealized gain (loss) on available-for-sale investments 3,000 (2,633)
Minimum pension liability 580,562 447,836
Accumulated other comprehensive income, net of tax $ 285,848 $ 107,606

Stock-Based Compensation
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Stock-Based Compensation
 6 Months Ended
Jun. 30, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

NOTE 2 - 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 June 30, 2012. The ESPP is considered compensatory under current rules. At June 30, 2012, after giving effect to the shares issued as of that date, 59,477 shares remain available for purchase under the ESPP.

2011 Executive Incentive Compensation Plan

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

During the first quarter of 2012, stock options were awarded covering 92,223 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. 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 earned by the respective employees, if any, will be determined based on achievement against cumulative performance goals for the three years ending December 31, 2014 and the number of shares earned will be paid 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 number of shares earned by the respective executive employees will be paid out 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 June 30, 2012, 765,008 shares remained available for future issuance under the 2011 Incentive Plan.

Stock Option Plan for Directors

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

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

1992 Stock Plan

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

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

In addition, during 2011, prior to amending the Stock Plan to prohibit future awards, key employees were granted deferred stock awards covering 16,092 shares tied to achievement against performance goals in 2010 under the Company's long term incentive plan. To the extent earned, the deferred stock will be 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 was paid out in the first quarter of 2012.

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

Changes in Stock Options Outstanding

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

Weighted average
exercise price
per share

 

Weighted average
remaining
contractual term

 

Outstanding – December 31, 2011

 

 

236,820

 

$

11.35

 

 

5.18 years

 

Awarded

 

 

92,223

 

 

13.10

 

 

 

 

Exercised

 

 

(12,000

)

 

7.13

 

 

 

 

Canceled

 

 

(5,890

)

 

10.58

 

 

 

 

Outstanding – June 30, 2012

 

 

311,153

 

 

12.05

 

 

5.49 years

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2012

 

 

162,550

 

$

10.71

 

 

4.75 years

 

Expected to vest at June 30, 2012

 

 

308,405

 

 

12.04

 

 

5.49 years

 

The aggregate intrinsic value of all options (the amount by which the market price of the stock on the last day of the period exceeded the market price of the stock on the date of grant) outstanding at June 30, 2012 was $182,000. The intrinsic value of all options exercised during the six months ended June 30, 2012 was $59,000. Net cash proceeds from the exercise of all stock options were $86,000 and $73,000 for the six months ended June 30, 2012 and 2011, respectively.

Changes in Deferred Stock Outstanding

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

 

 

 

 

 

 

 

 

 

 

Shares

 

Weighted Average
Grant Date
Fair Value

 

Outstanding – December 31, 2011

 

 

71,849

 

$

15.14

 

Granted

 

 

103,698

 

 

13.53

 

Vested

 

 

—

 

 

—

 

Canceled

 

 

(5,221

)

 

14.41

 

Outstanding – June 30, 2012

 

 

170,326

 

 

14.17

 

Compensation Expense

Share-based compensation expense recognized for the six-month period ended June 30, 2012 was $223,000 before income taxes and $145,000 after income taxes. Share-based compensation expense recognized for the six month period ended June 30, 2011 was $249,000 before income taxes and $162,000 after income taxes. Unrecognized compensation expense for the Company's plans was $1,011,000 at June 30, 2012. Excess tax benefits from the exercise of stock options and issuance of restricted stock included in financing cash flows for the six month periods ended June 30, 2012 and 2011 were $68,000 and $23,000, respectively. Share-based compensation expense is recorded as a part of selling, general and administrative expenses.

Stock-Based Compensation (Tables)
v0.0.0.0
Stock-Based Compensation (Tables)
 6 Months Ended
Jun. 30, 2012
Stock-Based Compensation [Abstract]  
Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

Weighted average
exercise price
per share

 

Weighted average
remaining
contractual term

 

Outstanding – December 31, 2011

 

 

236,820

 

$

11.35

 

 

5.18 years

 

Awarded

 

 

92,223

 

 

13.10

 

 

 

 

Exercised

 

 

(12,000

)

 

7.13

 

 

 

 

Canceled

 

 

(5,890

)

 

10.58

 

 

 

 

Outstanding – June 30, 2012

 

 

311,153

 

 

12.05

 

 

5.49 years

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2012

 

 

162,550

 

$

10.71

 

 

4.75 years

 

Expected to vest at June 30, 2012

 

 

308,405

 

 

12.04

 

 

5.49 years

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

 

 

 

 

 

 

 

 

 

 

Shares

 

Weighted Average
Grant Date
Fair Value

 

Outstanding – December 31, 2011

 

 

71,849

 

$

15.14

 

Granted

 

 

103,698

 

 

13.53

 

Vested

 

 

—

 

 

—

 

Canceled

 

 

(5,221

)

 

14.41

 

Outstanding – June 30, 2012

 

 

170,326

 

 

14.17

 

Stock-Based Compensation (Narrative) (Details)
v0.0.0.0
Stock-Based Compensation (Narrative) (Details) (USD $)
 6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 6 Months Ended 3 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Mar. 31, 2012
Executive Incentive Compensation Plan [Member]
Jun. 30, 2012
Executive Incentive Compensation Plan [Member]
Mar. 28, 2011
Executive Incentive Compensation Plan [Member]
Jun. 30, 2012
1992 Stock Plan [Member]
Dec. 31, 2011
1992 Stock Plan [Member]
Jun. 30, 2012
Stock Option Plan For Directors [Member]
Mar. 31, 2012
Key Executive Employees [Member]
Executive Incentive Compensation Plan [Member]
Mar. 31, 2012
Key Employees [Member]
Executive Incentive Compensation Plan [Member]
Dec. 31, 2011
Tied To Achievement Of 2010 Performance Goals [Member]
1992 Stock Plan [Member]
Dec. 31, 2011
Tied To Achievement Of 2011 To 2013 Performance Goals [Member]
1992 Stock Plan [Member]
Jun. 30, 2012
Employee Stock Purchase Plan [Member]
Jun. 30, 2012
Restricted Stock [Member]
Executive Incentive Compensation Plan [Member]
Jun. 30, 2012
Restricted Stock [Member]
Non-Employee Directors [Member]
Executive Incentive Compensation Plan [Member]
employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                
Percentage of price of common stock at which employees are able to acquire                           90.00%    
Awards avaliable for grant         765,008   155,948             59,477    
Awards granted                             25,879  
Value of awards granted                             $ 40,000  
Share-based compensation arrangement by share-based payment, vesting period         1 year                      
Number of awards authorized           1,000,000                    
Number of employees receiving awards                               7
Number of options granted       92,223       96,250                
Options expiration period, years 5 years 5 months 27 days   5 years 2 months 5 days   7 years   7 years   10 years              
Percentage of options vest each year       25.00%       25.00%                
Granted deferred stock awards to employees               12,156   9,456 94,242 16,092 77,588      
Minimum percentage of revenue growth required to earn deferred stock       150.00%       150.00%                
Aggregate intrinsic value of options outstanding 182,000                              
Intrinsic value of all options exercised 59,000                              
Net cash proceeds from exercise of stock options 86,000 73,000                            
Share based compensation expense before income taxes 223,000 249,000                            
Share based compensation expense after income taxes 145,000 162,000                            
Unrecognized compensation expense 1,011,000                              
Excess tax benefits from exercise of stock options $ 68,000 $ 23,000                            

Stock-Based Compensation (Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan) (Details)
v0.0.0.0
Stock-Based Compensation (Schedule Of Changes In Number Of Outstanding Stock Options Under Director Plan And Stock Plan) (Details) (USD $)
 6 Months Ended 12 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Stock-Based Compensation [Abstract]    
Options, Outstanding - December 31, 2011 236,820  
Options, Awarded 92,223  
Options, Exercised (12,000)  
Options, Canceled (5,890)  
Options, Outstanding - June 30, 2012 311,153 236,820
Options, Exercisable at June 30, 2012 162,550  
Options, Expected to vest at June 30, 2012 308,405  
Weighted average exercise price per share, Outstanding - December 31, 2011 $ 11.35  
Weighted average exercise price per share, Awarded $ 13.10  
Weighted average exercise price per share, Exercised $ 7.13  
Weighted average exercise price per share, Canceled $ 10.58  
Weighted average exercise price per share, Outstanding - June 30, 2012 $ 12.05 $ 11.35
Weighted average exercise price per share, Exercisable at June 30, 2012 $ 10.71  
Weighted average exercise price per share, Expected to vest at June 30, 2012 $ 12.04  
Options, Outstanding - Weighted average remaining contractual term 5 years 5 months 27 days 5 years 2 months 5 days
Options, Exercisable at June 30, 2012 - Weighted average remaining contractual term 4 years 9 months  
Options, Expected to vest at June 30, 2012 - 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) (Deferred Stock [Member], USD $)
 6 Months Ended
Jun. 30, 2012
Deferred Stock [Member]
  
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]  
Shares, Outstanding - December 31, 2011 71,849
Shares, Granted 103,698
Shares, Vested   
Shares, Canceled (5,221)
Shares, Outstanding - June 30, 2012 170,326
Weighted Average Grant Date Fair Value, Outstanding - December 31, 2011 $ 15.14
Weighted Average Grant Date Fair Value, Granted $ 13.53
Weighted Average Grant Date Fair Value, Vested   
Weighted Average Grant Date Fair Value, Canceled $ 14.41
Weighted Average Grant Date Fair Value, Outstanding - June 30, 2012 $ 14.17

Inventories
v0.0.0.0
Inventories
 6 Months Ended
Jun. 30, 2012
Inventories [Abstract]  
Inventories

NOTE 3 - INVENTORIES

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

 

 

 

 

 

 

 

 

 

 

June 30
2012

 

December 31
2011

 

Finished goods

 

$

18,122,027

 

$

14,010,071

 

Raw and processed materials

 

 

12,937,905

 

 

11,975,932

 

Total

 

$

31,059,932

 

$

25,986,003

 

 

Inventories (Tables)
v0.0.0.0
Inventories (Tables)
 6 Months Ended
Jun. 30, 2012
Inventories [Abstract]  
Schedule Of Inventories Priced At Lower Of First- In, First- Out Cost Or Market

 

 

 

 

 

 

 

 

 

 

June 30
2012

 

December 31
2011

 

Finished goods

 

$

18,122,027

 

$

14,010,071

 

Raw and processed materials

 

 

12,937,905

 

 

11,975,932

 

Total

 

$

31,059,932

 

$

25,986,003

 

Inventories (Schedule Of Inventories Priced At Lower Of First- In, First- Out Cost Or Market) (Details)
v0.0.0.0
Inventories (Schedule Of Inventories Priced At Lower Of First- In, First- Out Cost Or Market) (Details) (USD $)
Jun. 30, 2012
Dec. 31, 2011
Inventories [Abstract]    
Finished goods $ 18,122,027 $ 14,010,071
Raw and processed materials 12,937,905 11,975,932
Total $ 31,059,932 $ 25,986,003

Acquisition
v0.0.0.0
Acquisition
 6 Months Ended
Jun. 30, 2012
Acquisition [Abstract]  
Acquisition

NOTE 4 – 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 includes initial consideration of $3,271,000, deferred consideration of $466,000 to be paid out no later than two years from the acquisition date, $656,000 in working capital adjustments, and $701,000 in contingent consideration. The Company has 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 paid out no later than two years from the acquisition date. Although the maximum contingent consideration is $818,000, the Company has recognized $701,000 as the estimated fair value of the contingent consideration at the date of acquisition. This contingent consideration has been 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 June 30, 2012, the Company had estimated liabilities of $972,000 related to outstanding consideration payments.

The assets and liabilities of Patapsco were recorded at their respective fair values in the consolidated balance sheet within the Transition Networks segment as of the acquisition date. The purchase price allocation is based on the estimated fair value of assets acquired and liabilities assumed and has been allocated as follows:

 

 

 

 

 

 

 

July 27, 2011

 

Current assets

 

$

2,052,149

 

Property, plant, and equipment

 

 

163,671

 

Intangible assets

 

 

801,488

 

Goodwill

 

 

2,702,340

 

Total assets

 

 

5,719,648

 

 

 

 

 

 

Current liabilities

 

$

414,735

 

Long-term deferred tax liabilities

 

 

210,952

 

Total liabilities

 

 

625,687

 

 

 

 

 

 

Net assets acquired

 

$

5,093,961

 

Identifiable intangible assets are definite-lived assets. These assets include customer relationships, trademarks, and technology intangible assets, and have a weighted average amortization period of 8 years, which matches the weighted average useful life of the assets. Goodwill recorded as part of the purchase price allocation is not tax deductible.


Acquisition (Tables)
v0.0.0.0
Acquisition (Tables)
 6 Months Ended
Jun. 30, 2012
Acquisition [Abstract]  
Schedule Of Assets Acquired And Liabilities Assumed

 

 

 

 

 

 

 

July 27, 2011

 

Current assets

 

$

2,052,149

 

Property, plant, and equipment

 

 

163,671

 

Intangible assets

 

 

801,488

 

Goodwill

 

 

2,702,340

 

Total assets

 

 

5,719,648

 

 

 

 

 

 

Current liabilities

 

$

414,735

 

Long-term deferred tax liabilities

 

 

210,952

 

Total liabilities

 

 

625,687

 

 

 

 

 

 

Net assets acquired

 

$

5,093,961

 

Acquisition (Narrative) (Details)
v0.0.0.0
Acquisition (Narrative) (Details) (USD $)
 0 Months Ended
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
Weighted average amortization period of acquired intangible assets 8 years

Acquisition (Schedule Of Assets Acquired And Liabilities Assumed) (Details)
v0.0.0.0
Acquisition (Schedule Of Assets Acquired And Liabilities Assumed) (Details) (USD $)
Jul. 27, 2011
Acquisition [Abstract]  
Current assets $ 2,052,149
Property, plant and equipment 163,671
Intangible assets 801,488
Goodwill 2,702,340
Total assets 5,719,648
Current liabilities 414,735
Long-term deferred tax liabilities 210,952
Total liabilities 625,687
Net assets acquired $ 5,093,961

Goodwill And Other Intangible Assets
v0.0.0.0
Goodwill And Other Intangible Assets
 6 Months Ended
Jun. 30, 2012
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.

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.

The changes in the carrying amount of goodwill for the six months ended June 30, 2012 and 2011 by segment is 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

 

 

 

 

 

 

 

 

 

 

—

 

June 30, 2011

 

$

—

 

$

5,990,571

 

$

5,990,571

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2012

 

$

—

 

$

5,990,571

 

$

5,990,571

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2012

 

$

—

 

$

5,990,571

 

$

5,990,571

 

 

 

 

 

 

 

 

 

 

 

 

Gross goodwill

 

$

1,271,986

 

$

5,990,571

 

$

7,262,557

 

Accumulated impairment loss

 

$

(1,271,986

)

 

 

 

 

(1,271,986

)

Balance at June 30, 2012

 

$

—

 

$

5,990,571

 

$

5,990,571

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2012

 

 

 

Gross Carrying
Amount

 

Accumulated
Amortization

 

Foreign Currency
Translation

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

 

81,785

 

 

(10,224

)

 

(3,711

)

 

67,850

 

Customer relationships

 

 

490,707

 

 

(42,941

)

 

(22,263

)

 

425,503

 

Technology

 

 

228,996

 

 

(40,078

)

 

(10,389

)

 

178,529

 

 

 

 

801,488

 

 

(93,243

)

 

(36,363

)

 

671,882

 

Amortization expense on these identifiable intangible assets was $51,000 in 2012. 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)
 6 Months Ended
Jun. 30, 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

 

 

 

 

 

 

 

 

 

 

—

 

June 30, 2011

 

$

—

 

$

5,990,571

 

$

5,990,571

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2012

 

$

—

 

$

5,990,571

 

$

5,990,571

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2012

 

$

—

 

$

5,990,571

 

$

5,990,571

 

 

 

 

 

 

 

 

 

 

 

 

Gross goodwill

 

$

1,271,986

 

$

5,990,571

 

$

7,262,557

 

Accumulated impairment loss

 

$

(1,271,986

)

 

 

 

 

(1,271,986

)

Balance at June 30, 2012

 

$

—

 

$

5,990,571

 

$

5,990,571

 
Schedule Of Finite-Lived Intangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2012

 

 

 

Gross Carrying
Amount

 

Accumulated
Amortization

 

Foreign Currency
Translation

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

 

81,785

 

 

(10,224

)

 

(3,711

)

 

67,850

 

Customer relationships

 

 

490,707

 

 

(42,941

)

 

(22,263

)

 

425,503

 

Technology

 

 

228,996

 

 

(40,078

)

 

(10,389

)

 

178,529

 

 

 

 

801,488

 

 

(93,243

)

 

(36,363

)

 

671,882

 

Goodwill And Other Intangible Assets (Narrative) (Details)
v0.0.0.0
Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)
 3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Goodwill And Intangible Assets [Line Items]        
Goodwill impairment $ 0 $ 1,271,986 $ 0 $ 1,271,986
Amortization expense     51,000  
Suttle [Member]
        
Goodwill And Intangible Assets [Line Items]        
Goodwill impairment   $ 1,271,986   $ 1,271,986

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 6 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2011
Suttle [Member]
Jun. 30, 2011
Suttle [Member]
Jun. 30, 2012
Suttle [Member]
Jun. 30, 2011
Transition Networks [Member]
Jun. 30, 2012
Transition Networks [Member]
Dec. 31, 2011
Transition Networks [Member]
Goodwill [Line Items]                    
Goodwill, beginning balance     $ 5,990,571 $ 4,560,217   $ 1,271,986   $ 3,288,231 $ 5,990,571 $ 5,990,571
Impairment loss 0 (1,271,986) 0 (1,271,986) (1,271,986) (1,271,986)        
Acquisition       2,702,340       2,702,340    
Goodwill, ending balance 5,990,571 5,990,571 5,990,571 5,990,571       5,990,571 5,990,571 5,990,571
Gross goodwill 7,262,557   7,262,557       1,271,986   5,990,571  
Accumulated impairment loss (1,271,986)   (1,271,986)       (1,271,986)      
Balance at June 30, 2012 $ 5,990,571 $ 5,990,571 $ 5,990,571 $ 5,990,571       $ 5,990,571 $ 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 $)
Jun. 30, 2012
Finite-Lived Intangible Assets [Line Items]  
Gross Carrying Amount $ 801,488
Accumulated Amortization (93,243)
Foreign Currency Translation (36,363)
Net 671,882
Trademarks [Member]
  
Finite-Lived Intangible Assets [Line Items]  
Gross Carrying Amount 81,785
Accumulated Amortization (10,224)
Foreign Currency Translation (3,711)
Net 67,850
Customer Relationships [Member]
  
Finite-Lived Intangible Assets [Line Items]  
Gross Carrying Amount 490,707
Accumulated Amortization (42,941)
Foreign Currency Translation (22,263)
Net 425,503
Technology [Member]
  
Finite-Lived Intangible Assets [Line Items]  
Gross Carrying Amount 228,996
Accumulated Amortization (40,078)
Foreign Currency Translation (10,389)
Net $ 178,529

Warranty
v0.0.0.0
Warranty
 6 Months Ended
Jun. 30, 2012
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 six-month periods ended June 30, 2012 and 2011, respectively, the majority of which relates to a five-year obligation to provide for potential future liabilities for network equipment sales.

 

 

 

 

 

 

 

 

 

 

2012

 

2011

 

Beginning Balance

 

$

634,000

 

$

616,000

 

Actual warranty costs paid

 

 

(145,000

)

 

(124,000

)

Amounts charged to expense

 

 

98,000

 

 

93,000

 

Ending balance

 

$

587,000

 

$

585,000

 

Warranty (Tables)
v0.0.0.0
Warranty (Tables)
 6 Months Ended
Jun. 30, 2012
Warranty [Abstract]  
Schedule Of Warranty

 

 

 

 

 

 

 

 

 

 

2012

 

2011

 

Beginning Balance

 

$

634,000

 

$

616,000

 

Actual warranty costs paid

 

 

(145,000

)

 

(124,000

)

Amounts charged to expense

 

 

98,000

 

 

93,000

 

Ending balance

 

$

587,000

 

$

585,000

 

Warranty (Schedule Of Warranty) (Details)
v0.0.0.0
Warranty (Schedule Of Warranty) (Details) (USD $)
 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Warranty [Abstract]    
Beginning Balance $ 634,000 $ 616,000
Actual warranty costs paid (145,000) (124,000)
Amounts charged to expense 98,000 93,000
Ending balance $ 587,000 $ 585,000
Warranty liability period 5 years  

Contingencies
v0.0.0.0
Contingencies
 6 Months Ended
Jun. 30, 2012
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 would materially affect the Company's financial position or results of operations.


Income Taxes
v0.0.0.0
Income Taxes
 6 Months Ended
Jun. 30, 2012
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 June 30, 2012 there was $355,000 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 2008-2010 remain open to examination by the Internal Revenue Service and the years 2007-2010 remain open to examination by various state tax departments. The tax years from 2008-2010 remain open in Costa Rica.

The Company's effective income tax rate was 33.3% for the first six months of 2012. The effective tax rate differs from the federal tax rate of 35% due to state income taxes, provisions for interest charges, the release of valuation allowance placed on foreign net operating losses, 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 (3.9%) for the six months ended June 30, 2012. There were no additional uncertain tax positions identified in the second quarter of 2012. There were no additional uncertain tax positions identified in the second quarter of 2012. The Company's effective income tax rate for the six months ended June 30, 2011 was 42%, 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 goodwill impairment not deductible for U.S. income tax purposes.


Income Taxes (Details)
v0.0.0.0
Income Taxes (Details) (USD $)
 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Income Taxes [Abstract]    
Uncertain tax benefit positions that would reduce the effective income tax rate if recognized $ 355,000  
Effective income tax rate 33.30% 42.00%
Federal tax rate 35.00%  
Decrease in income tax rate due to the effect of foreign operations 3.90%  

Segment Information
v0.0.0.0
Segment Information
 6 Months Ended
Jun. 30, 2012
Segment Information [Abstract]  
Segment Information

NOTE 9 – SEGMENT INFORMATION

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.

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. To conform to the 2012 presentation, the Company has reclassified 2011 segment information to present the Austin Taylor operations within Suttle's business unit.

Information concerning the Company's continuing operations in the various segments for the three and six month periods ended June 30, 2012 and 2011 is as follows:

SEGMENT INFORMATION - THREE MONTHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

 

Transition
Networks

 

JDL
Technologies

 

Other

 

Total

 

Three months ended June 30, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

10,347,556

 

$

14,029,507

 

$

1,184,195

 

$

—

 

$

25,561,258

 

Cost of sales

 

 

7,850,557

 

 

6,228,019

 

 

826,799

 

 

—

 

$

14,905,375

 

Gross profit

 

 

2,496,999

 

 

7,801,488

 

 

357,396

 

 

—

 

 

10,655,883

 

Selling, general and
administrative expenses

 

 

2,205,227

 

$

5,569,837

 

 

529,147

 

 

994,070

 

$

9,298,281

 

Operating income (loss)

 

$

291,772

 

$

2,231,651

 

$

(171,751

)

$

(994,070

)

$

1,357,602

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

239,636

 

$

199,060

 

$

27,836

 

$

73,032

 

$

539,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

262,689

 

$

77,194

 

$

4,595

 

$

187,881

 

$

532,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets at June 30, 2012

 

$

28,333,064

 

$

35,613,341

 

$

2,356,158

 

$

47,014,305

 

$

113,316,868

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

 

Transition
Networks

 

JDL
Technologies

 

Other

 

Total

 

Three months ended June 30, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

9,049,714

 

$

32,377,988

 

$

4,001,982

 

$

—

 

$

45,429,684

 

Cost of sales

 

 

7,009,544

 

 

17,839,905

 

 

2,124,650

 

 

—

 

 

26,974,099

 

Gross profit

 

 

2,040,170

 

 

14,538,083

 

 

1,877,332

 

 

—

 

 

18,455,585

 

Selling, general and
administrative expenses

 

 

1,922,708

 

 

5,896,959

 

 

488,125

 

 

1,622,968

 

 

9,930,760

 

Goodwill impairment

 

 

1,271,986

 

 

—

 

 

—

 

 

—

 

 

1,271,986

 

Operating income (loss)

 

$

(1,154,524

)

$

8,641,124

 

$

1,389,207

 

$

(1,622,968

)

$

7,252,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

256,880

 

$

174,606

 

$

28,818

 

$

74,614

 

$

534,918

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

355,388

 

$

159,554

 

$

1,324

 

$

9,043

 

$

525,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets at June 30, 2011

 

$

23,207,387

 

$

46,946,405

 

$

3,936,889

 

$

41,940,702

 

$

116,031,383

 

 

SEGMENT INFORMATION - SIX MONTHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

 

Transition
Networks

 

JDL
Technologies

 

Other

 

Total

 

Six months ended June 30, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

20,924,860

 

$

26,967,699

 

$

1,912,620

 

$

—

 

$

49,805,179

 

Cost of sales

 

 

15,526,519

 

 

12,356,855

 

 

1,317,295

 

 

—

 

$

29,200,669

 

Gross profit

 

 

5,398,341

 

 

14,610,844

 

 

595,325

 

 

—

 

 

20,604,510

 

Selling, general and
administrative expenses

 

 

4,573,668

 

 

11,192,074

 

 

1,114,115

 

 

2,236,606

 

$

19,116,463

 

Operating income (loss)

 

$

824,673

 

$

3,418,770

 

$

(518,790

)

$

(2,236,606

)

$

1,488,047

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

483,661

 

$

440,496

 

$

54,927

 

$

145,170

 

$

1,124,254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

665,588

 

$

159,645

 

$

14,691

 

$

373,534

 

$

1,213,458

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

 

Transition
Networks

 

JDL
Technologies

 

Other

 

Total

 

Six months ended June 30, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

19,736,896

 

$

48,933,885

 

$

7,781,706

 

$

—

 

$

76,452,487

 

Cost of sales

 

 

14,972,262

 

 

25,419,133

 

 

4,277,018

 

 

—

 

$

44,668,413

 

Gross profit

 

 

4,764,634

 

 

23,514,752

 

 

3,504,688

 

 

—

 

 

31,784,074

 

Selling, general and
administrative expenses

 

 

4,042,899

 

 

11,229,352

 

 

1,000,945

 

 

2,844,774

 

$

19,117,970

 

Goodwill impairment

 

 

1,271,986

 

 

 

 

 

 

 

 

—

 

 

1,271,986

 

Operating income (loss)

 

$

(550,251

)

$

12,285,400

 

$

2,503,743

 

$

(2,844,774

)

$

11,394,118

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

485,794

 

$

341,761

 

$

57,306

 

$

149,279

 

$

1,034,140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

597,389

 

$

351,105

 

$

11,375

 

$

9,043

 

$

968,912

Segment Information (Tables)
v0.0.0.0
Segment Information (Tables)
 6 Months Ended
Jun. 30, 2012
Segment Information [Abstract]  
Schedule Of Segment Information

SEGMENT INFORMATION - THREE MONTHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

 

Transition
Networks

 

JDL
Technologies

 

Other

 

Total

 

Three months ended June 30, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

10,347,556

 

$

14,029,507

 

$

1,184,195

 

$

—

 

$

25,561,258

 

Cost of sales

 

 

7,850,557

 

 

6,228,019

 

 

826,799

 

 

—

 

$

14,905,375

 

Gross profit

 

 

2,496,999

 

 

7,801,488

 

 

357,396

 

 

—

 

 

10,655,883

 

Selling, general and
administrative expenses

 

 

2,205,227

 

$

5,569,837

 

 

529,147

 

 

994,070

 

$

9,298,281

 

Operating income (loss)

 

$

291,772

 

$

2,231,651

 

$

(171,751

)

$

(994,070

)

$

1,357,602

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

239,636

 

$

199,060

 

$

27,836

 

$

73,032

 

$

539,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

262,689

 

$

77,194

 

$

4,595

 

$

187,881

 

$

532,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets at June 30, 2012

 

$

28,333,064

 

$

35,613,341

 

$

2,356,158

 

$

47,014,305

 

$

113,316,868

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

 

Transition
Networks

 

JDL
Technologies

 

Other

 

Total

 

Three months ended June 30, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

9,049,714

 

$

32,377,988

 

$

4,001,982

 

$

—

 

$

45,429,684

 

Cost of sales

 

 

7,009,544

 

 

17,839,905

 

 

2,124,650

 

 

—

 

 

26,974,099

 

Gross profit

 

 

2,040,170

 

 

14,538,083

 

 

1,877,332

 

 

—

 

 

18,455,585

 

Selling, general and
administrative expenses

 

 

1,922,708

 

 

5,896,959

 

 

488,125

 

 

1,622,968

 

 

9,930,760

 

Goodwill impairment

 

 

1,271,986

 

 

—

 

 

—

 

 

—

 

 

1,271,986

 

Operating income (loss)

 

$

(1,154,524

)

$

8,641,124

 

$

1,389,207

 

$

(1,622,968

)

$

7,252,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

256,880

 

$

174,606

 

$

28,818

 

$

74,614

 

$

534,918

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

355,388

 

$

159,554

 

$

1,324

 

$

9,043

 

$

525,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets at June 30, 2011

 

$

23,207,387

 

$

46,946,405

 

$

3,936,889

 

$

41,940,702

 

$

116,031,383

 

 

SEGMENT INFORMATION - SIX MONTHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

 

Transition
Networks

 

JDL
Technologies

 

Other

 

Total

 

Six months ended June 30, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

20,924,860

 

$

26,967,699

 

$

1,912,620

 

$

—

 

$

49,805,179

 

Cost of sales

 

 

15,526,519

 

 

12,356,855

 

 

1,317,295

 

 

—

 

$

29,200,669

 

Gross profit

 

 

5,398,341

 

 

14,610,844

 

 

595,325

 

 

—

 

 

20,604,510

 

Selling, general and
administrative expenses

 

 

4,573,668

 

 

11,192,074

 

 

1,114,115

 

 

2,236,606

 

$

19,116,463

 

Operating income (loss)

 

$

824,673

 

$

3,418,770

 

$

(518,790

)

$

(2,236,606

)

$

1,488,047

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

483,661

 

$

440,496

 

$

54,927

 

$

145,170

 

$

1,124,254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

665,588

 

$

159,645

 

$

14,691

 

$

373,534

 

$

1,213,458

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suttle

 

Transition
Networks

 

JDL
Technologies

 

Other

 

Total

 

Six months ended June 30, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

19,736,896

 

$

48,933,885

 

$

7,781,706

 

$

—

 

$

76,452,487

 

Cost of sales

 

 

14,972,262

 

 

25,419,133

 

 

4,277,018

 

 

—

 

$

44,668,413

 

Gross profit

 

 

4,764,634

 

 

23,514,752

 

 

3,504,688

 

 

—

 

 

31,784,074

 

Selling, general and
administrative expenses

 

 

4,042,899

 

 

11,229,352

 

 

1,000,945

 

 

2,844,774

 

$

19,117,970

 

Goodwill impairment

 

 

1,271,986

 

 

 

 

 

 

 

 

—

 

 

1,271,986

 

Operating income (loss)

 

$

(550,251

)

$

12,285,400

 

$

2,503,743

 

$

(2,844,774

)

$

11,394,118

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

485,794

 

$

341,761

 

$

57,306

 

$

149,279

 

$

1,034,140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

597,389

 

$

351,105

 

$

11,375

 

$

9,043

 

$

968,912

Segment Information (Schedule Of Segment Information) (Details)
v0.0.0.0
Segment Information (Schedule Of Segment Information) (Details) (USD $)
 3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Segment Reporting Information [Line Items]          
Sales $ 25,561,258 $ 45,429,684 $ 49,805,179 $ 76,452,487  
Cost of sales 14,905,375 26,974,099 29,200,669 44,668,413  
Gross profit 10,655,883 18,455,585 20,604,510 31,784,074  
Selling, general and administrative expenses 9,298,281 9,930,760 19,116,463 19,117,970  
Goodwill impairment 0 1,271,986 0 1,271,986  
Operating income (loss) 1,357,602 7,252,839 1,488,047 11,394,118  
Depreciation and amortization 539,564 534,918 1,124,254 1,034,140  
Capital expenditures 532,359 525,309 1,213,458 968,912  
Assets 113,316,868 116,031,383 113,316,868 116,031,383 116,658,916
Suttle [Member]
          
Segment Reporting Information [Line Items]          
Sales 10,347,556 9,049,714 20,924,860 19,736,896  
Cost of sales 7,850,557 7,009,544 15,526,519 14,972,262  
Gross profit 2,496,999 2,040,170 5,398,341 4,764,634  
Selling, general and administrative expenses 2,205,227 1,922,708 4,573,668 4,042,899  
Goodwill impairment   1,271,986   1,271,986  
Operating income (loss) 291,772 (1,154,524) 824,673 (550,251)  
Depreciation and amortization 239,636 256,880 483,661 485,794  
Capital expenditures 262,689 355,388 665,588 597,389  
Assets 28,333,064 23,207,387 28,333,064 23,207,387  
Transition Networks [Member]
          
Segment Reporting Information [Line Items]          
Sales 14,029,507 32,377,988 26,967,699 48,933,885  
Cost of sales 6,228,019 17,839,905 12,356,855 25,419,133  
Gross profit 7,801,488 14,538,083 14,610,844 23,514,752  
Selling, general and administrative expenses 5,569,837 5,896,959 11,192,074 11,229,352  
Operating income (loss) 2,231,651 8,641,124 3,418,770 12,285,400  
Depreciation and amortization 199,060 174,606 440,496 341,761  
Capital expenditures 77,194 159,554 159,645 351,105  
Assets 35,613,341 46,946,405 35,613,341 46,946,405  
JDL Technologies [Member]
          
Segment Reporting Information [Line Items]          
Sales 1,184,195 4,001,982 1,912,620 7,781,706  
Cost of sales 826,799 2,124,650 1,317,295 4,277,018  
Gross profit 357,396 1,877,332 595,325 3,504,688  
Selling, general and administrative expenses 529,147 488,125 1,114,115 1,000,945  
Operating income (loss) (171,751) 1,389,207 (518,790) 2,503,743  
Depreciation and amortization 27,836 28,818 54,927 57,306  
Capital expenditures 4,595 1,324 14,691 11,375  
Assets 2,356,158 3,936,889 2,356,158 3,936,889  
Other [Member]
          
Segment Reporting Information [Line Items]          
Selling, general and administrative expenses 994,070 1,622,968 2,236,606 2,844,774  
Operating income (loss) (994,070) (1,622,968) (2,236,606) (2,844,774)  
Depreciation and amortization 73,032 74,614 145,170 149,279  
Capital expenditures 187,881 9,043 373,534 9,043  
Assets $ 47,014,305 $ 41,940,702 $ 47,014,305 $ 41,940,702  

Pensions
v0.0.0.0
Pensions
 6 Months Ended
Jun. 30, 2012
Pensions [Abstract]  
Pensions

NOTE 10 – PENSIONS

The Company's U.K. based subsidiary Austin Taylor maintains defined benefit pension plans that cover seven active employees. The Company does not provide any other post-retirement benefits to its employees. Components of net periodic benefit cost of the pension plans were:

 

 

 

 

 

 

 

 

 

 

Six months Ended June 30

 

 

 

2012

 

2011

 

Service cost

 

$

18,000

 

 

24,000

 

Interest cost

 

 

121,000

 

 

134,000

 

Expected return on plan assets

 

 

(135,000

)

 

(127,000

)

Amortization of prior service cost

 

 

23,000

 

 

—

 

 

 

$

27,000

 

$

31,000

 

Pensions (Tables)
v0.0.0.0
Pensions (Tables)
 6 Months Ended
Jun. 30, 2012
Pensions [Abstract]  
Schedule Of Components Of Net Periodic Benefit Cost Of Pension Plans

 

 

 

 

 

 

 

 

 

 

Six months Ended June 30

 

 

 

2012

 

2011

 

Service cost

 

$

18,000

 

 

24,000

 

Interest cost

 

 

121,000

 

 

134,000

 

Expected return on plan assets

 

 

(135,000

)

 

(127,000

)

Amortization of prior service cost

 

 

23,000

 

 

—

 

 

 

$

27,000

 

$

31,000

 

Pensions (Schedule Of Components Of Net Periodic Benefit Cost Of Pension Plans) (Details)
v0.0.0.0
Pensions (Schedule Of Components Of Net Periodic Benefit Cost Of Pension Plans) (Details) (USD $)
 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Pensions [Abstract]    
Service cost $ 18,000 $ 24,000
Interest cost 121,000 134,000
Expected return on plan assets (135,000) (127,000)
Amortization of prior service cost 23,000  
Total net periodic benefit cost $ 27,000 $ 31,000

Net Income Per Share
v0.0.0.0
Net Income Per Share
 6 Months Ended
Jun. 30, 2012
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 39,841 and 28,008 shares for the three and six month periods ended June 30, 2012. The dilutive effect of stock options for the three and six month periods ended June 30, 2011 was 77,263 shares and 55,741 shares, respectively. The Company calculates the dilutive effect of outstanding options using the treasury stock method. All options were included because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 148,748 shares were not included because of unmet performance conditions.


Net Income Per Share (Details)
v0.0.0.0
Net Income Per Share (Details)
 3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Net Income Per Share [Abstract]        
Dilutive effect of outstanding stock options and shares associated with long-term incentive compensation plans 39,841 77,263 28,008 55,741
Deferred stock awards excluded from calculation of earnings per share     148,748  

Fair Value Measurements
v0.0.0.0
Fair Value Measurements
 6 Months Ended
Jun. 30, 2012
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 June 30, 2012 and December 31, 2011, are summarized below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

 

$

643,246

 

$

—

 

$

—

 

$

643,246

 

Subtotal

 

 

643,246

 

 

—

 

 

—

 

 

643,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

—

 

 

15,181,788

 

 

—

 

 

15,181,788

 

Municipal Notes/Bonds

 

 

—

 

 

1,000,794

 

 

—

 

 

1,000,794

 

Commercial Paper

 

 

—

 

 

1,631,535

 

 

—

 

 

1,631,535

 

Subtotal

 

 

—

 

 

17,814,117

 

 

—

 

 

17,814,117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

—

 

 

933,589

 

 

—

 

 

933,589

 

Corporate Notes/Bonds

 

 

—

 

 

4,071,934

 

 

—

 

 

4,071,934

 

Subtotal

 

 

—

 

 

5,005,523

 

 

—

 

 

5,005,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued Consideration

 

 

 

 

 

 

 

 

(971,681

)

 

(971,681

)

Subtotal

 

 

—

 

 

—

 

 

(971,681

)

 

(971,681

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

643,246

 

$

22,819,641

 

$

(971,681

)

$

22,491,206

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 June 30, 2012 was approximately $972,000, 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. There was not a significant change in either the estimated contingent consideration fair value or the fair value inputs during the first half of 2012. Any change in our estimated liability for contingent consideration will increase or decrease operating income in future periods.

There were no transfers between levels during the six months ended June 30, 2012.


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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market funds

 

$

643,246

 

$

—

 

$

—

 

$

643,246

 

Subtotal

 

 

643,246

 

 

—

 

 

—

 

 

643,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

—

 

 

15,181,788

 

 

—

 

 

15,181,788

 

Municipal Notes/Bonds

 

 

—

 

 

1,000,794

 

 

—

 

 

1,000,794

 

Commercial Paper

 

 

—

 

 

1,631,535

 

 

—

 

 

1,631,535

 

Subtotal

 

 

—

 

 

17,814,117

 

 

—

 

 

17,814,117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

—

 

 

933,589

 

 

—

 

 

933,589

 

Corporate Notes/Bonds

 

 

—

 

 

4,071,934

 

 

—

 

 

4,071,934

 

Subtotal

 

 

—

 

 

5,005,523

 

 

—

 

 

5,005,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued Consideration

 

 

 

 

 

 

 

 

(971,681

)

 

(971,681

)

Subtotal

 

 

—

 

 

—

 

 

(971,681

)

 

(971,681

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

643,246

 

$

22,819,641

 

$

(971,681

)

$

22,491,206

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 $)
Jun. 30, 2012
Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration $ 971,681 $ 1,002,623
Accrued Consideration [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair value of accrued consideration $ 971,681 $ 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 $)
Jun. 30, 2012
Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents, fair value $ 643,246 $ 829,881
Current Liabilities, fair value (971,681) (1,002,623)
Assets (Liabilities) Net, fair value 22,491,206 23,346,369
Level 1 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents, fair value 643,246 829,881
Assets (Liabilities) Net, fair value 643,246 829,881
Level 2 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Assets (Liabilities) Net, fair value 22,819,641 23,519,111
Level 3 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Current Liabilities, fair value (971,681) (1,002,623)
Assets (Liabilities) Net, fair value (971,681) (1,002,623)
Money Market Funds [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents, fair value 643,246 829,881
Money Market Funds [Member] | Level 1 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents, fair value 643,246 829,881
Accrued Consideration [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Current Liabilities, fair value (971,681) (1,002,623)
Accrued Consideration [Member] | Level 3 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Current Liabilities, fair value (971,681) (1,002,623)
Short-Term Investments [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 17,814,117 18,635,601
Short-Term Investments [Member] | Level 2 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 17,814,117 18,635,601
Short-Term Investments [Member] | Certificate Of Deposits [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 15,181,788 18,635,601
Short-Term Investments [Member] | Certificate Of Deposits [Member] | Level 2 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 15,181,788 18,635,601
Short-Term Investments [Member] | Municipal Notes/Bonds [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 1,000,794  
Short-Term Investments [Member] | Municipal Notes/Bonds [Member] | Level 2 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 1,000,794  
Short-Term Investments [Member] | Commercial Paper [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 1,631,535  
Short-Term Investments [Member] | Commercial Paper [Member] | Level 2 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 1,631,535  
Long-Term Investments [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 5,005,523 4,883,510
Long-Term Investments [Member] | Level 2 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 5,005,523 4,883,510
Long-Term Investments [Member] | Certificate Of Deposits [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 933,589 4,883,510
Long-Term Investments [Member] | Certificate Of Deposits [Member] | Level 2 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 933,589 4,883,510
Long-Term Investments [Member] | Corporate Notes/Bonds [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value 4,071,934  
Long-Term Investments [Member] | Corporate Notes/Bonds [Member] | Level 2 [Member]
    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, fair value $ 4,071,934  

Subsequent Events
v0.0.0.0
Subsequent Events
 6 Months Ended
Jun. 30, 2012
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.