10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the quarterly period ended June 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the transition period from Not Applicable to Not Applicable

Commission file number: 000-000147

CRAWFORD UNITED CORPORATION 

(Exact name of registrant as specified in its charter)

Ohio	34-0288470
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10514 Dupont Avenue, Suite 200, Cleveland, Ohio	44108
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number (216) 243-2614

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2020, 2,552,902 shares of Class A Common Stock and 771,848 shares of Class B Common Stock were outstanding.

1

PART I

ITEM 1. FINANCIAL STATEMENTS

CRAWFORD UNITED CORPORATION

CONSOLIDATED BALANCE SHEET

	(Unaudited)
	June 30, 2020		December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,927,438	$	2,232,499
Accounts receivable less allowance for doubtful accounts		12,522,216		14,001,795
Contract assets		4,727,753		2,422,379
Inventory, net of reserves		11,057,037		7,678,690
Prepaid expenses and other current assets		680,131		703,002
Total Current Assets		35,914,575		27,038,365
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements		228,872		228,872
Buildings and leasehold improvements		1,949,370		1,837,009
Machinery and equipment		14,060,723		13,950,444
Total property, plant and equipment		16,238,965		16,016,325
Less accumulated depreciation		4,482,606		3,622,153
Property, Plant and Equipment, Net		11,756,359		12,394,172
Operating right of use asset, net		8,778,901		9,224,840
OTHER ASSETS:
Goodwill		11,505,852		9,791,745
Intangibles, net of accumulated amortization		7,912,156		3,950,838
Other non-current assets		106,804		88,046
Total Non-Current Other Assets		19,524,812		13,830,629
Total Assets	$	75,974,647	$	62,488,006

See accompanying notes to consolidated financial statements

2

CRAWFORD UNITED CORPORATION

CONSOLIDATED BALANCE SHEET

	(Unaudited)
	June 30, 2020			December 31, 2019
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Notes payable – current		2,766,221			2,749,459
Bank debt – current		1,333,333			1,333,333
Leases payable - current		826,936			850,664
Accounts payable		9,311,886			6,071,522
Unearned revenue		722,062			1,998,578
Accrued expenses		4,136,392			3,281,445
Total Current Liabilities		19,096,830			16,285,001
LONG-TERM LIABILITIES:
Notes payable – long-term		8,306,832			7,676,697
Bank debt – long-term		14,283,417			6,376,594
Leases payable – long term		8,109,118			8,513,448
Deferred income taxes		2,207,735			2,207,734
Total Long-Term Liabilities		32,907,102			24,774,473
STOCKHOLDERS' EQUITY
Preferred shares, no par value - 1,000,000 shares authorized, no shares issued and outstanding
Common shares, no par value		-			-
Class A common shares - 10,000,000 shares authorized, 2,591,837 and 2,576,837 shares issued at June 30, 2020 and December 31, 2019, respectively		3,866,614			3,599,806
Class B common shares - 2,500,000 shares authorized, 954,283 shares issued at June 30, 2020 and December 31, 2019, respectively		1,465,522			1,465,522
Contributed capital		1,741,901			1,741,901
Treasury shares		(1,934,812	)		(1,905,780	)
Class A common shares - 38,935 and 37,208 shares held at June 30, 2020 and December 31, 2019
Class B common shares – 182,435 shares held at June 30, 2020 and December 31, 2019
Retained earnings		18,831,490			16,527,083
Total Stockholders' Equity		23,970,715			21,428,532
Total Liabilities and Stockholders' Equity	$	75,974,647		$	62,488,006

See accompanying notes to consolidated financial statements

3

CRAWFORD UNITED CORPORATION

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020		2019
Total Sales	$	18,576,588		$	24,514,636	$	43,858,162	$	46,350,723
Cost of Sales		15,077,549			19,287,703		34,150,980		36,293,902
Gross Profit		3,499,039			5,226,933		9,707,182		10,056,821
Operating Expenses:
Selling, general and administrative expenses		2,968,519			2,435,380		6,038,513		4,694,197
Operating Income		530,520			2,791,553		3,668,669		5,362,624
Other (Income) and Expenses:
Interest charges		235,289			284,579		532,710		550,652
Other (income) expense, net		(12,394	)		25,535		58,967		1,661
Total Other (Income) and Expenses		222,895			310,114		591,677		552,313
Income before Provision for Income Taxes		307,625			2,481,439		3,076,992		4,810,311
Provision for Income Taxes		78,788			649,960		772,585		1,233,374
Net Income	$	228,837		$	1,831,479	$	2,304,407	$	3,576,937
Net Income Per Common Share - Basic	$	0.07		$	0.66	$	0.70	$	1.30
Net Income Per Common Share - Diluted	$	0.07		$	0.57	$	0.69	$	1.12
Weighted Average Shares of Common Stock Outstanding
Basic		3,317,665			2,755,916		3,314,573		2,755,764
Diluted		3,319,264			3,212,798		3,316,217		3,196,151

See accompanying notes to consolidated financial statements

4

CRAWFORD UNITED CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three Months Ended June 30, 2020 and 2019

	COMMON SHARES - NO PAR VALUE
	CLASS A		CLASS B		CONTRIBUTED CAPITAL		TREASURY SHARES			RETAINED EARNINGS		TOTAL
Balance at March 31, 2020	$	3,636,272	$	1,465,522	$	1,741,901	$	(1,905,780	)	$	18,602,653	$	23,540,568
Share-based compensation expense		19,292		-		-		-			-		19,292
Stock awards		211,050		-		-		-			-		211,050
Repurchase of shares		-		-		-		(29,032	)		-		(29,032	)
Net Income		-		-		-		-			228,837		228,837
Balance at June 30, 2020	$	3,866,614	$	1,465,522	$	1,741,901	$	(1,934,812	)	$	18,831,490	$	23,970,715

	COMMON SHARES ISSUED				TREASURY SHARES				COMMON SHARES OUTSTANDING
	CLASS A		CLASS B		CLASS A		CLASS B		CLASS A			CLASS B
Balance at March 31, 2020		2,576,837		954,283		37,208		182,435		2,539,629			771,848
Stock awards		15,000		-		-		-		15,000			-
Repurchase of shares		-		-		1,727		-		(1,727	)		-
Balance at June 30, 2020		2,591,837		954,283		38,935		182,435		2,552,902			771,848

	COMMON SHARES - NO PAR VALUE
	CLASS A		CLASS B		CONTRIBUTED CAPITAL		TREASURY SHARES			RETAINED EARNINGS		TOTAL
Balance at March 31, 2019	$	2,865,159	$	710,272	$	1,741,901	$	(1,905,780	)	$	11,250,124	$	14,661,676
Share-based compensation expense		42,183		-		-		-			-		42,183
Stock awards		-		-		-		-			-		-
Repurchase of shares		-		-		-		-			-		-
Net Income		-		-		-		-			1,831,479		1,831,479
Balance at June 30, 2019	$	2,907,342	$	710,272	$	1,741,901	$	(1,905,780	)	$	13,081,603	$	16,535,338

	COMMON SHARES ISSUED				TREASURY SHARES				COMMON SHARES OUTSTANDING
	CLASS A		CLASS B		CLASS A		CLASS B		CLASS A		CLASS B
Balance at March 31, 2019		2,196,014		779,283		37,208		182,435		2,158,806		596,848
Stock awards		4,000		-		-		-		4,000		-
Repurchase of shares		-		-		-		-		-		-
Balance at June 30, 2019		2,200,014		779,283		37,208		182,435		2,162,806		596,848

5

CRAWFORD UNITED CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Six Months Ended June 30, 2020 and 2019

	COMMON SHARES - NO PAR VALUE
	CLASS A		CLASS B		CONTRIBUTED CAPITAL		TREASURY SHARES			RETAINED EARNINGS		TOTAL
Balance at December 31, 2019	$	3,599,806	$	1,465,522	$	1,741,901	$	(1,905,780	)	$	16,527,083	$	21,428,532
Share-based compensation expense		55,758		-		-		-			-		55,758
Stock awards		211,050		-		-		-			-		211,050
Repurchase of shares		-		-		-		(29,032	)		-		(29,032	)
Net Income		-		-		-		-			2,304,407		2,304,407
Balance at June 30, 2020	$	3,866,614	$	1,465,522	$	1,741,901	$	(1,934,812	)	$	18,831,490	$	23,970,715

	COMMON SHARES ISSUED				TREASURY SHARES				COMMON SHARES OUTSTANDING
	CLASS A		CLASS B		CLASS A		CLASS B		CLASS A			CLASS B
Balance at December 31, 2019		2,576,837		954,283		37,208		182,435		2,539,629			771,848
Stock awards		15,000		-		-		-		15,000			-
Repurchase of shares		-		-		1,727		-		(1,727	)		-
Balance at June 30, 2020		2,591,837		954,283		38,935		182,435		2,552,902			771,848

	COMMON SHARES - NO PAR VALUE
	CLASS A		CLASS B		CONTRIBUTED CAPITAL		TREASURY SHARES			RETAINED EARNINGS			TOTAL
Balance at December 31, 2018	$	2,641,300	$	710,272	$	1,741,901	$	(1,905,780	)	$	9,577,792		$	12,765,485
Share-based compensation expense		61,342		-		-		-			-			61,342
Stock awards		204,700		-		-		-			-			204,700
Cumulative effect of accounting change		-		-		-		-			(73,126	)		(73,126	)
Net Income		-		-		-		-			3,576,937			3,576,937
Balance at June 30, 2019	$	2,907,342	$	710,272	$	1,741,901	$	(1,905,780	)	$	13,081,603		$	16,535,338

	COMMON SHARES ISSUED				TREASURY SHARES				COMMON SHARES OUTSTANDING
	CLASS A		CLASS B		CLASS A		CLASS B		CLASS A		CLASS B
Balance at December 31, 2018		2,161,014		779,283		37,208		182,435		2,123,806		596,848
Stock awards		39,000		-		-		-		39,000		-
Repurchase of shares		-		-				-				-
Balance at June 30, 2019		2,200,014		779,283		37,208		182,435		2,162,806		596,848

6

CRAWFORD UNITED CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)

	Six Months Ended June 30,
	2020			2019
Cash Flows from Operating Activities
Net Income	$	2,304,407		$	3,576,937
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,237,997			976,612
Loss (gain) on sale of assets		-			4,294
Non-cash share-based compensation expense		266,808			266,042
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable		2,250,667			(6,130,441	)
Decrease (Increase) in inventory		(460,092	)		(666,130	)
Decrease (Increase) in contract assets		(2,305,374	)		(782,054	)
Decrease (Increase) in prepaid expenses & other assets		57,510			148,599
Increase (Decrease) in accounts payable		2,427,507			1,997,175
Increase (Decrease) in accrued expenses		1,281,168			773,854
Increase (Decrease) in unearned revenue		(1,276,516	)		(2,688,679	)
Total adjustments		3,479,675			(6,100,728	)
Net Cash Provided by (Used in) Operating Activities	$	5,784,082		$	(2,523,791	)
Cash Flows from Investing Activities
Cash paid for acquisition		(9,400,000	)		(50,001	)
Capital expenditures		(193,059	)		(418,934	)
Net Cash (Used in) Investing Activities	$	(9,593,059	)	$	(468,935	)
Cash Flows from Financing Activities
Payments on notes		(808,850	)		(223,993	)
Borrowings on notes		1,453,837			-
Payments on bank debt		(3,427,080	)		(2,537,663	)
Borrowings on bank debt		11,315,041			1,442,445
Share repurchase		(29,032	)		-
Payments on finance lease		-			(6,011	)
Net Cash Provided by (Used in) Financing Activities	$	8,503,916		$	(1,325,222	)
Net Increase (decrease) in cash and cash equivalents		4,694,939			(4,317,948	)
Cash and cash equivalents at beginning of period		2,232,499			5,057,626
Cash and cash equivalents at end of period	$	6,927,438		$	739,678
Supplemental disclosures of cash flow information
Interest paid	$	477,332		$	439,572
Income Taxes paid	$	-		$	1,161,400

See accompanying notes to consolidated financial statements

7

CRAWFORD UNITED CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
JUNE 30, 2020

1.  BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include the accounts of Crawford United Corporation and its wholly-owned subsidiaries (the “Company”). Significant intercompany transactions and balances have been eliminated in the financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2020. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. 

During the three and six months ended June 30, 2020, there have been no changes to our significant accounting policies.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s Summary of Significant Accounting Policies is provided with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Recently Adopted Accounting Standards

In January 2017, FASB issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The standard, which should be applied prospectively, is effective for fiscal years and interim periods within those years beginning on or after December 15, 2019. Early adoption is permitted. The adoption of this standard did not have a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses. The standard requires a financial asset (including trade receivables) measured at amortized cost basis to be presented at the net amount expected to be collected. Thus, the income statement will reflect the measurement of credit losses for newly-recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. This standard is effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2019 with early adoption permitted. The adoption of this standard did not have a material impact on our consolidated financial statements.

8

3.  ACCOUNTS RECEIVABLE 

The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. The reserve for doubtful accounts was $16,875 and $18,325 at June 30, 2020 and December 31, 2019, respectively.

4.  INVENTORY

Inventory is valued at the lower of cost (first-in, first-out) or net realizable value and consists of:

	June 30, 2020		December 31, 2019
Raw materials and component parts	$	3,351,443	$	2,945,427
Work-in-process		3,366,209		2,800,699
Finished products		4,589,223		2,183,170
Total inventory	$	11,306,875		7,929,296
Less: inventory reserves		249,838		250,606
Net inventory	$	11,057,037	$	7,678,690

5. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Intangible assets relate to the purchase of businesses. Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is not amortized but is reviewed on an annual basis for impairment. Amortization of intangibles is being amortized on a straight-line basis over period ranging from one year to 15 years. Intangible assets are as follows:

	June 30, 2020		December 31, 2019
Customer list intangibles	$	7,700,000	$	4,970,000
Non-compete agreements		200,000		200,000
Trademarks		1,930,000		340,000
Total intangible assets		9,830,000		5,510,000
Less: accumulated amortization		1,917,844		1,559,162
Intangible assets, net	$	7,912,156	$	3,950,838

Amortization of intangibles assets was: $179,342 and $93,592 for the three months ended June 30, 2020 and 2019, respectively, and $358,682 and $187,183 for the six months ended June 30, 2020 and 2019, respectively.                               

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6.  PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment are recorded at cost and depreciated over their useful lives. Maintenance and repair costs are expenses as incurred. Property, plant and equipment are as follows:

	June 30, 2020		December 31, 2019
Land	$	228,872	$	228,872
Buildings and improvements		1,949,370		1,837,009
Machinery & equipment		14,060,723		13,950,444
Total property, plant & equipment		16,238,965		16,016,325
Less: accumulated depreciation		4,482,606		3,622,153
Property plant & equipment, net	$	11,756,359	$	12,394,172

Depreciation expense was $425,769 and $375,987 for the three months ended June 30, 2020 and 2019, respectively, $860,453 and $804,765 for the six months ended June 30, 2020 and 2019, respectively.

7.  BANK DEBT 

The Company entered into a Credit Agreement on June 1, 2017 with JPMorgan Chase Bank, N.A. as lender, which was subsequently amended in connection with funding the acquisition of CAD Enterprises, Inc. (“CAD”) on July 5, 2018 (as amended, the “Credit Agreement"). The Credit Agreement was amended on September 30, 2019 to expand the revolving loan amount from $12,000,000 to $20,000,000, subject to a borrowing base, and to extend the maturity of revolving facility from June 1, 2021 to June 1, 2024. The Credit Agreement was further amended on December 30, 2019 to eliminate the borrowing base. As amended, the Credit Agreement is comprised of a revolving facility in the amount of $20,000,000 and a term A loan in the amount of $6,000,000. Outstanding borrowings on the term A loan are payable in consecutive monthly installments, which currently amount to $111,111 per month.

The revolving facility under the Credit Agreement includes a $3 million sublimit for the issuance of letters of credit thereunder. Interest for borrowings under the revolving facility accrues at a per annum rate equal to Prime Rate or LIBOR plus applicable margins of (i) 0.25% for Prime Rate loans and (ii) 1.75% for LIBOR loans. The maturity date of the revolving facility is June 1, 2024. Interest for borrowings under the term A loan accrues at a per annum rate equal to Prime Rate or LIBOR plus applicable margins of (i) 0.25% for Prime Rate loans and (ii) 2.25% for LIBOR loans. The maturity date of the term A loan is December 1, 2022. The Credit Agreement includes a commitment fee on the unused portion of the revolving facility of 0.25% per annum payable quarterly. The obligations of the Company and other borrowers under the Credit Agreement are secured by a blanket lien on all the assets of the Company and its subsidiaries. The Credit Agreement also includes customary representations and warranties and applicable reporting requirements and covenants. The financial covenants under the Credit Agreement include a minimum fixed charge coverage ratio, a maximum senior funded debt to EBITDA ratio and a maximum total funded debt to EBITDA ratio.

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Bank debt balances consist of the following:

	June 30, 2020		December 31, 2019
Term debt	$	3,444,444	$	4,111,111
Revolving debt		12,288,036		3,722,995
Total Bank debt		15,732,480		7,834,106
Less: current portion		1,333,333		1,333,333
Non-current bank debt		14,399,147		6,500,773
Less: unamortized debt costs		115,730		124,179
Net non-current bank debt	$	14,283,417	$	6,376,594

The Company had $7.7 million and $16.3 million available to borrow on the revolving credit facility at June 30, 2020 and December 31, 2019, respectively.   

8. NOTES PAYABLE 

Convertible Notes Payable

The Company converted all of the convertible notes payable in fiscal year 2019 and no longer is party to any agreements of this nature.

Notes Payable – Related Party

The Company has two separate outstanding promissory notes with First Francis Company Inc. (“First Francis”), which were originally issued in July 2016 in connection with the acquisition of Federal Hose Manufacturing (“Federal Hose”) and which were amended in July 2018 in connection with acquisition of CAD. The first promissory note was issued with original principal in the amount of $2,000,000, and the second was issued with original principal in the amount of $2,768,662. The promissory notes each have an interest rate of 6.25% per annum, which was increased from 4.0% per annum as part of the July 2018 amendments to the Credit Agreement. In addition, the promissory note with original principal amount of $2,768,662 was amended in July 2018 to provide for a conversion option commencing July 5, 2019 which allows First Francis to convert the promissory note, in whole in part with respect to a maximum amount of $648,000, into shares of the Company’s Class B common stock at the price of $6.48 per share (subject to adjustment), subject to shareholder approval which was obtained on May 10, 2019.  On July 9, 2019, First Francis exercised its option to convert $648,000 of existing indebtedness into 100,000 Class B Common Shares of the Company. First Francis is owned by Matthew Crawford, who serves on the Board of Directors of the Company, and Edward Crawford, who served on the Board of Directors of the Company until June 17, 2019.  

Notes Payable – Seller Note

Effective July 1, 2018, the Company completed the acquisition of all of the issued and outstanding shares of capital stock of CAD.  Upon the closing of the transaction, the CAD shares were transferred and assigned to the Company in consideration of the payment by the Company of an aggregate purchase price of $21 million, $12 million of which was payable in cash at closing, with the remainder paid in the form of a subordinated promissory note issued by the Company in favor of a Seller (the “Seller Note), which is subject to certain post-closing adjustments based on working capital, indebtedness and selling expenses, as specified in the Share Purchase Agreement entered into in connection with the acquisition (the “Share Purchase Agreement”).   The Seller Note bears interest at a rate of four percent (4%) per annum and is payable in full no later than June 30, 2023 (the “Maturity Date”).  The Maturity Date, with respect to any then-outstanding portion of the original principal amount which is subject to an indemnification claim by the Company (asserted in accordance with the terms of the Share Purchase Agreement) pending as of the date thereof, will be automatically extended until such time as any claim relating to such disputed amount is no longer pending, pursuant to the terms of the Seller Note and subject to additional conditions set forth therein and in the Share Purchase Agreement. The Company is not permitted to prepay any amounts due and owing under the Seller Note.  Payment of the Seller Note is secured by a second-priority security interest in the assets of CAD.   Interest accrued on the original principal amount becomes due and payable in arrears beginning September 30, 2018, and subsequent interest is due on the first day of each calendar quarter thereafter up to and including June 30, 2019.  The Company is required to make quarterly principal payments, the amount of which will be calculated based on a four (4) year amortization schedule, beginning on September 30, 2019 and continuing on the last day of each calendar quarter thereafter up to and including the Maturity Date. The holders of the Seller Note and the Company agreed to defer the quarterly principal payment due June 30, 2020; quarterly interest was paid on the Seller Note.

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Paycheck Protection Program Notes

On June 4, 2020, each of Federal Hose and CAD entered into unsecured loans with First Federal Savings and Loan Association of Lakewood, pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), in the amounts of $253,071 and $1,200,766, respectively (the “PPP Loans”).

The PPP Loans each have a two-year term and bear interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred until seven months after the date of the loan, and will begin January 4, 2021, in monthly installments based on the principal balance of the PPP Loan outstanding following the deferral period and taking into consideration any remaining unforgiven portion of the PPP Loan. The PPP Loans may be prepaid at any time prior to maturity with no prepayment penalties. The loans contain events of default and other provisions customary for a loan of this type. The PPP Loans may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. Federal Hose and CAD each intend to use their entire respective PPP Loan amounts for qualifying expenses and to apply for forgiveness of the loans in accordance with the terms of the CARES Act. The PPP Loans may be forgivable, partially or in full, if certain conditions are met, principally based on having been disbursed for permissible purposes and on maintaining certain average levels of employment and payroll as required by the CARES Act. Federal Hose and CAD intend to use the loan proceeds only for permissible purposes, and as of June 30,2020 have used all proceeds from the PPP Loans to retain employees and maintain payroll; however, the Company can provide no assurances that the amounts borrowed by Federal Hose and CAD under the PPP Loans will be eligible for forgiveness, in whole or in part. The PPP Loans are unsecured and guaranteed by the U.S. Small Business Administration.

Notes payable consists of the following:

	June 30, 2020		December 31, 2019
In connection with the Federal Hose acquisition, the Company entered into a promissory note on July 1, 2016 for a $2,000,000 loan due to First Francis Company, payable in quarterly installments beginning October 31, 2016	$	1,208,046	$	1,302,776
In connection with the Federal Hose acquisition, the Company entered into a promissory note on July 1, 2016 for a $2,768,662 loan due to First Francis Company, payable in quarterly installments beginning October 31, 2016.		1,098,670		1,248,380
In connection with the CARES Act, Federal Hose entered into a promissory note on June 4, 2020 for a $253,071 loan due to First Federal Savings and Loan Association of Lakewood, with monthly principal and interest installments to begin January 4, 2021. Any unforgiven portion of the note is payable on or before June 4, 2022.		253,071		-
In connection with the CARES Act, CAD entered into a promissory note on June 4, 2020 for a $1,200,766 loan due to First Federal Savings and Loan Association of Lakewood, with monthly principal and interest installment to begin January 4, 2021. Any unforgiven portion of the note is payable on or before June 4, 2022.		1,200,766		-
In connection with the CAD acquisition, the Company entered into a promissory note on July 1, 2018 for a $9,000,000 loan due to the Loudermilks, payable in quarterly installments beginning September 30, 2018.		7,312,500		7,875,000
Total notes payable		11,073,053		10,426,156
Less current portion		2,766,221		2,749,459
Notes payable – non-current portion	$	8,306,832	$	7,676,697

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9. LEASES

On January 1, 2019, the Company adopted ASU 2016-02 “Leases (Topic 842),” a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet. Most prominent among the amendments is the recognition of assets and liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP.

The Company has operating and finance leases for facilities, vehicles and equipment. These leases have remaining terms of 2 years to 15 years, some of which include options to extended the leases for up to 10 years.

Supplemental balance sheet information related to leases:

	June 30, 2020			December 31, 2019
Operating leases:
Operating lease right-of-use assets, net	$	8,778,901		$	9,224,840
Other current liabilities		826,936			850,664
Operating lease liabilities		8,109,118			8,513,448
Total operating lease liabilities	$	8,936,054		$	9,364,112
Weighted Average Remaining Lease Term
Operating Leases (in years)		11.0			11.0
Weighted Average Discount Rate
Operating Leases		5.0	%		5.0	%

10. EARNINGS PER COMMON SHARE 

The following table sets forth the computation of basic and diluted earnings per share.

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Earnings Per Share - Basic
Net Income	$	228,837	$	1,831,479	$	2,304,407	$	3,576,937
Weighted average shares of common stock outstanding - Basic		3,317,665		2,755,916		3,314,573		2,755,764
Earnings Per Share - Basic	$	0.07	$	0.66	$	0.70	$	1.30
Earnings Per Share - Diluted
Weighted average shares of common stock outstanding - Basic		3,317,665		2,755,916		3,314,573		2,755,764
Warrants, Options and Convertible Notes		1,599		456,882		1,644		440,387
Weighted average shares of common stock -Diluted		3,319,264		3,212,798		3,316,217		3,196,151
Earnings Per Share - Diluted	$	0.07	$	0.57	$	0.69	$	1.12

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11. ACQUISITIONS

Effective January 2, 2020, the Company completed the acquisition of substantially all of the assets of MPI Products, Inc. (dba Marine Products International) (“MPI”), pursuant to the Asset Purchase Agreement entered into by and between Crawford United Acquisition Company LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company, and MPI. Upon closing of the agreement, the assets were transferred to the Company in consideration of a purchase price of $9.4 million in cash, which was subject to post-closing adjustments based on working capital.

MPI manufactures and distributes industrial hoses used by the recreational boating industry and has one operating location in Cleveland, Ohio. Purchase price was assigned to the book value of the net assets acquired with the excess over the book value assigned to intangible assets and goodwill and has been allocated to the following accounts:

Accounts Receivable	$	771,088
Inventory		2,918,255
Fixed Assets		29,581
Prepaid and Other Assets		53,397
Intangibles Assets		4,320,000
Goodwill		1,714,108
Total Assets Acquired	$	9,806,429
Accrued Expense		406,429
Total Liabilities Assumed	$	406,429
Net Assets Acquired	$	9,400,000

On April 19, 2019, the Company, completed the acquisition of substantially all of the assets of Data Genomix, Inc., an Ohio corporation (“DG”), pursuant to the terms of an Asset Purchase Agreement entered into by and between Hickok Operating LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company, and DG on the date thereof. DG is in the business of developing and commercializing marketing and data analytic technology applications.

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12. SEGMENT AND RELATED INFORMATION  

The Company operates three reportable business segments: (1) Aerospace Components, (2) Commercial Air Handling, (3) and Industrial Hose. The Company's management evaluates segment performance based primarily on operating income. Certain corporate costs are allocated to the segments and interest expense directly related to financing the acquisition of a business is allocated to that segment, respectively.  Intangible assets are allocated to each segment and the related amortization of these assets are recorded in selling, general and administrative expenses.

Aerospace Components:
The Aerospace Components segment was added July 1, 2018, when the Company purchased all of the issued and outstanding shares of capital stock of CAD Enterprises, Inc. in Phoenix, Arizona. This segment manufactures precision components primarily for customers in the aerospace industry.  This segment provides complete end-to-end engineering, machining, grinding, welding, brazing, heat treat and assembly solutions.  Utilizing state-of-the-art machining and welding technologies, this segment is an industry leader in providing complex components produced from nickel-based superalloys and stainless steels.  Our quality certifications include ISO 9001:2015/AS9100D, as well as Nadcap accreditation for Fluorescent Penetrant Inspection (FPI), Heat Treating/Braze, Non-Conventional Machining EDM, TIG/E-Beam welding.

Commercial Air Handling:
The Commercial Air Handling segment was added June 1, 2017, when the Company purchased certain assets and assumed certain liabilities of Air Enterprises Acquisition LLC in Akron, Ohio. The acquired business, which operates under the name Air Enterprises, is an industry leader in designing, manufacturing and installing large-scale commercial, institutional, and industrial custom air handling solutions. Its customers are typically in the health care, education, pharmaceutical and industrial manufacturing markets in the United States. This segment also sells to select international markets. The custom air handling units are constructed of non-corrosive aluminum, resulting in sustainable, long-lasting, and energy efficient solutions with life expectancies of 50 years or more. These products are distributed through a network of sales representatives, based on relationships with health care networks, building contractors and engineering firms. The custom air handling equipment is designed, manufactured and installed under the brand names FactoryBilt® and SiteBilt®. FactoryBilt® air handling solutions are designed, fabricated and assembled in a vertically integrated process entirely within the Akron, Ohio facility. SiteBilt® air handling solutions are designed and fabricated in Akron, but are then crated and shipped to the field and assembled on-site.

Industrial Hose: 

The Industrial Hose segment was added July 1, 2016, when the Company purchased the assets of the Federal Hose Manufacturing, LLC of Painesville, Ohio. This business segment includes the manufacture of flexible interlocking metal hoses and the distribution of silicone and hydraulic hoses. Metal hoses are sold primarily to major heavy-duty truck manufacturers and major aftermarket suppliers in North America. Metal hoses are also sold into the agricultural, industrial and petrochemical markets. Silicone hoses are distributed to a number of industries in North America, including agriculture and general industrial markets. The Company added the distribution of marine hose for recreational boating to this segment through the acquisition of the assets of MPI Products on January 2, 2020.

Corporate and Other: 

Corporate costs not allocated to the three primary business segments are aggregated with the results of DG, acquired in April 2019.

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Information by industry segment is set forth below: 

	Three Months Ended June 30, 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	11,848,816	$	2,587,421		$	4,046,814	$	93,537		$	18,576,588
Gross Profit		2,893,541		(499,569	)		1,088,811		16,256			3,499,039
Operating Income		1,565,482		(991,953	)		227,498		(270,507	)		530,520
Pretax Income		1,565,482		(1,134,193	)		88,290		(211,954	)		307,625
Net Income		1,174,113		(850,645	)		62,082		(156,713	)		228,837

	Three Months Ended June 30, 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales	$	14,880,504	$	7,457,377	$	1,933,725	$	243,030		$	24,514,636
Gross Profit		3,549,109		1,038,395		592,245		47,184			5,226,933
Operating Income		2,244,680		414,464		295,701		(163,292	)		2,791,553
Pretax Income		2,244,481		231,296		214,536		(208,874	)		2,481,439
Net Income		1,683,361		169,377		159,385		(180,644	)		1,831,479

	Six Months Ended June 30, 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	23,302,590	$	9,843,247		$	10,296,535	$	415,790		$	43,858,162
Gross Profit		5,941,342		771,191			2,851,178		143,471			9,707,182
Operating Income		3,185,251		(251,705	)		893,081		(157,958	)		3,668,669
Pretax Income		3,160,286		(548,265	)		614,816		(149,845	)		3,076,992
Net Income		2,370,215		(411,199	)		455,552		(110,161	)		2,304,407

	Six Months Ended June 30, 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales	$	26,625,065	$	15,477,780	$	3,730,816	$	517,062		$	46,350,723
Gross Profit		6,551,042		2,295,400		1,117,979		92,400			10,056,821
Operating Income		4,027,667		1,174,074		543,989		(383,106	)		5,362,624
Pretax Income		4,027,177		794,253		407,013		(418,132	)		4,810,311
Net Income		3,020,384		593,097		302,456		(339,000	)		3,576,937

13. UNCERTAINTIES

The coronavirus (COVID-19) pandemic had a material adverse effect on the Company’s reported results for the three and six months ended June 30, 2020. The Company will continue to actively monitor the impact of the coronavirus pandemic, which is expected to negatively impact the Company’s business and results of operations for the remainder of fiscal year 2020 and possibly beyond. The extent to which the Company’s business and operations will be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact, among other things.

14. SUBSEQUENT EVENTS

None

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RESULTS OF OPERATIONS.

The following discussion is intended to assist in the understanding of the Company's financial position at June 30, 2020 and December 31, 2019, results of operations for the three and six months ended June 30, 2020 and 2019, and cash flows for the six months ended June 30, 2020 and 2019, and should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The coronavirus (COVID-19) pandemic had a material adverse effect on the Company’s reported results for the three and six months ended June 30, 2020. The Company will continue to actively monitor the impact of the coronavirus pandemic, which is expected to negatively impact the Company’s business and results of operations for the remainder of fiscal year 2020 and possibly beyond. Many of our customers are considered “essential” and have remained operational during the pandemic, although in some cases in a limited capacity. This, together with the overall economic downturn that has resulted from the pandemic, slowed demand in the second quarter and into the second half of 2020. Nearly all of the Company’s facilities have remained operational. While there are some restrictions to the supply of materials and products and those restrictions may continue or expand, our supply chain has remained largely intact.The extent to which the Company’s business and operations will continue to be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the pandemic and actions by government authorities to contain the pandemic or treat its impact, among other things.

Items Affecting the Comparability of our Financial Results

Effective January 2, 2020, the Company completed the acquisition of certain assets of MPI Products, Inc., (“MPI”). The results of this acquisition are reported under the Industrial Hose segment.

Effective April 19, 2019, the Company, completed the acquisition of substantially all of the assets of Data Genomix, Inc., an Ohio corporation (“DG”). DG is in the business of developing and commercializing marketing and data analytic technology applications. The results of this acquisition are reported under the Corporate and Other segment.

Accordingly, in light of the timing of these transactions, the Company’s results for the quarter ended on June 30, 2020 include the added results of operations of MPI in the Industrial Hose segment and DG in the Corporate and Other segment. Conversely, our results for the quarter ended June 30, 2019 do not include the results of operation of MPI in the Industrial Hose segment.

Results of Operations – Three Months Ended June 30, 2020 and 2019

Sales for the quarter ended June 30, 2020 (“current quarter”) were $18.6 million, a decrease of approximately $5.9 million or 24% from sales of $24.5 million during the same quarter of the prior year. This decrease in sales was primarily attributable to lower demand resulting from the impact of the COVID-19 pandemic, including temporary closures by certain customers.

Cost of sales for the current quarter was $15.1 million compared to $19.3 million, a decrease of $4.2 million or 22% from the same quarter of the prior year.  Gross profit was $0.5 million in the current quarter compared to $2.8 million, a decrease of $2.3 million from the same quarter of the prior year.  The decrease in cost of sales and gross profit was attributable lower sales resulting from decreased demand due to the COVID-19 pandemic. The Company took a number of steps to reduce costs during the quarter in response to lower sales levels, including staff reductions, shortened work weeks, and compensation decreases for certain salaried employees.

Selling, general and administrative expenses (SG&A) in the current quarter were $3.0 million, compared to $2.4 million, in the same quarter of the prior year. Selling, general and administrative expenses increased by $0.6 million due the acquisition of MPI, which includes approximately $0.1 million of intangible amortization expense. In addition, stock compensation was approximately $0.2 million in the current quarter resulting from director stock awards that are typically granted during the first fiscal quarter. These expense increases were partially offset by the cost reduction actions taken during the quarter, as described above.

Interest charges in the current quarter were approximately $0.2 million compared to $0.3 million in the same quarter of the prior year. The interest expense decreased due to lower average interest rates on the Company’s floating rate bank debt. Average total debt (including notes) and average interest rates for the current quarter were $25.7 million and 3.4%, compared to $21.0 million and 4.6% in the same quarter of the prior year.

Other income, net was $12 thousand in the current quarter compared to $25 thousand other expense, net in the same quarter of the prior year.  Other (income) expense, net was comprised of rental income, gains and losses on the disposal of assets, legal settlements, acquisition expenditures and other miscellaneous charges.

Income tax expense in the current quarter was $0.1 million compared to $0.7 million in the same quarter of the prior year. Tax expense in the current quarter was recorded at the Company’s expected effective tax rate of 25%.

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Net income in the current quarter was $0.2 million or $0.07 per diluted share as compared to the net income of $1.8 million or $0.57 per diluted share for the same quarter of the prior year.  

Results of Operations – Six Months Ended June 30, 2020 and 2019

Sales for the six months ended June 30, 2020 (“current year to date”) were $43.9 million, a decrease of approximately $2.5 million or 5% from sales of $46.4 million during the same period of the prior year. This decrease in sales was primarily attributable to lower demand resulting from the impact of the COVID-19 pandemic, including temporary closures by certain customers.

Cost of sales for the current year to date was $34.2 million compared to $36.3 million, a decrease of $2.1 million or 6% from the same period of the prior year.  Gross profit was $9.7 million in the current year to date compared to $10.1 million, a decrease of $0.3 million from the same period of the prior year.  The decrease in cost of sales and gross profit was attributable lower sales resulting from decreased demand due to the COVID-19 pandemic. The Company took a number of steps during the second quarter to reduce costs in response to lower sales levels, including staff reductions, shortened work weeks, and compensation decreases for certain salaried employees.

Selling, general and administrative expenses (SG&A) in the current year to date were $6.0 million, compared to $4.7 million, in the same period of the prior year. Selling, general and administrative expenses increased by $1.4 million due the acquisition of MPI, which includes approximately $0.2 million of intangible amortization expense. These expense increases were partially offset by the cost reduction actions taken during the quarter, as described above.

Interest charges in the current year to date were approximately $0.5 million compared to $0.6 million in the same period of the prior year. The interest expense decreased due to lower average interest rates on the Company’s floating rate bank debt. Average total debt (including notes) and average interest rates for the current year to date were $26.2 million and 3.5%, compared to $21.4 million and 4.4% in the same period of the prior year.

Other expense, net was $59 thousand in the current year to date compared to $2 thousand other expense, net in the same period of the prior year.  Other (income) expense, net was comprised of rental income, gains and losses on the disposal of assets, legal settlements, acquisition expenditures and other miscellaneous charges.

Income tax expense in the current year to date was $0.8 million compared to $1.2 million in the same period of the prior year. Tax expense in the current year to date is recorded at the Company’s expected effective tax rate of 25%.

Net income in the current year to date was $2.3 million or $0.69 per diluted share as compared to the net income of $3.6 million or $1.12 per diluted share for the same period of the prior year.  

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Liquidity and Capital Resources

As described further in Note 11 to the Company’s consolidated financial statements, effective January 2, 2020, the Company completed the MPI acquisition for a purchase price of $9.4 million cash, which is subject to certain post-closing adjustments based on working capital. 

The Company’s credit agreement, dated as of June 1, 2017, by and between the Company and JPMorgan Chase Bank, N.A. as lender (as amended, the “Credit Agreement”), provides availability under our revolving credit facility of $20 million, which matures June 1, 2024, of which approximately $12.3 million was outstanding at June 30, 2020. Management believes the amount of the revolving credit facility and the terms of the loan agreement provide the flexibility to fund acquisitions, working capital and other strategic initiatives. 

Total current assets at June 30, 2020 increased to $35.9 million from $27.0 million at December 31, 2019, an increase of $8.9 million. The increase in current assets is comprised of the following: an increase in cash of $4.7 million; an increase in inventory of $3.4 million; and an increase in contract assets of $2.3 million, offset by a decrease in accounts receivable of $1.5 million. Fluctuations in accounts receivable and costs and estimated earnings in excess of billing related to the Commercial Air Handling division are dependent upon progress billing milestones for contracts. The increase in inventory is related to the expansion of our Industrial Hose division through the acquisition of MPI. The Company is carrying higher cash balances due to the uncertainty of future economic conditions directly related to the COVID-19 pandemic.

Total current liabilities at June 30, 2020 increased to $19.1 million from $16.3 million at December 31, 2019, an increase of $2.8 million.  The increase in current liabilities is comprised of the following: the increase in accounts payable of $3.2 million; and an increase in accrued expenses of $0.8 million, offset by a decrease in contract liabilities (included in the unearned revenue item on the balance sheet) $1.2 million. The increases in accounts payable and accrued expenses are primarily attributable to the Company’s extension of payment timeframes for certain payables and expenses.

Cash provided by operating activities for the six months ended June 30, 2020 was approximately $5.8 million, compared to cash used by operating activities of $2.5 million in the same period a year ago. Cash used by operating activities for the current year is comprised of the following: net income of $2.3 million; adjustments for non-cash items of $1.5 million; and cash provided by working capital adjustments of $2.0 million. The primary drivers of increased working capital during the current year were the decrease in accounts receivable of $2.3 million and the increase in accounts payable of $2.4 million.

Cash used in investing activities for the six months ended June 30, 2020 of $9.6 million, compared to cash used in investing activities of $0.5 million in the same period a year ago. The increase in cash used in investing activities was largely due to the acquisition of MPI in the Industrial Hose segment and capital expenditures in the normal course of business.

Cash provided by financing activities was approximately $8.5 million for the six months ended June 30, 2020, compared to cash used by financing activities of $1.3 million in the same period a year ago. Cash provided by financing activities for the current year was primarily related to: $11.3 million borrowings on the revolving credit facility related to the acquisition of MPI and $1.5 million of borrowings under the PPP Loans described below; offset by cash used for $3.4 million in payments on bank debt; and $0.8 in payments on notes.

The Company is actively managing its business to maintain cash flow and liquidity. We believe that cash and availability on our revolving credit facility to be sufficient to fund working capital needs and service principal and interest payments due related to the bank debt and notes payable. The Company had $7.7 million available to borrow on the revolving credit facility at June 30, 2020. Notwithstanding the Company's expectations, if the Company's operating results decrease as the result of pressures on the business due to, for example, the impact of the COVID-19 pandemic, currency fluctuations, regulatory issues, or the Company's failure to execute its business plans, the Company may require additional financing, or may be unable to comply with its obligations under the credit facility, and its lenders could demand repayment of any amounts outstanding under the Company’s credit facility. As the company cannot predict the duration or scope of the COVID-19 pandemic and its impact on the Company’s customers and suppliers, the negative financial impact to the Company’s results cannot be reasonably estimated, but could be material. In addition, see Note 7 of the notes to the consolidated financial statements.

The Company applied for and was approved for a loan in the amount of $3,679,383 on April 10, 2020 pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”); however, on May 5, 2020, the Company opted to return all of the proceeds and repay the loan in full. On June 4, 2020, each of Federal Hose and CAD entered into unsecured loans with First Federal Savings and Loan Association of Lakewood, pursuant to the Paycheck Protection Program under the CARES Act, in the amounts of $253,071 and $1,200,766, respectively (the “PPP Loans”).

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The PPP Loans each have a two-year term and bear interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement, and will begin in January 4, 2021, in monthly installments based on the principal balance of the PPP Loan outstanding following the deferral period and taking into consideration any portion of the PPP Loan that may be forgiven prior to that time. The PPP Loans may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. Federal Hose and CAD each intend to use their entire respective PPP Loan amounts for qualifying expenses and to apply for forgiveness of the loans in accordance with the terms of the CARES Act. The PPP Loans may be forgivable, partially or in full, if certain conditions are met, principally based on having been disbursed for permissible purposes and on maintaining certain average levels of employment and payroll as required by the CARES Act. Federal Hose and CAD each intend to use the loan proceeds only for permissible purposes, and to date have used all proceeds from the PPP Loans to retain employees and maintain payroll; however, the Company can provide no assurances that the amounts borrowed by Federal Hose and CAD under the PPP Loans will be eligible for forgiveness, in whole or in part. The PPP Loans are unsecured and guaranteed by the U.S. Small Business Administration. See Note 8 of the notes to the consolidated financial statements for a further description of the PPP Loans.

Due to the uncertainty of future economic conditions directly related to the COVID-19 pandemic, management has decided to carry higher cash balances and levels of liquidity, rather than focus on debt reduction goals. Management believes the Company has adequate liquidity for debt service, working capital, capital expenditures and other strategic initiatives. However, because the Company cannot predict the duration or scope of the COVID-19 pandemic and its impact on the Company, the pandemic may adversely impact the Company’s available liquidity for debt service, working capital, or cause delay or curtailment of the Company’s planned capital expenditures or other strategic initiatives.

Off-Balance Sheet Arrangements

The Company has secured performance and payment bonds in the amount of $8.2 million as surety on completion of the requirements of certain commercial air handling contracts. The Company has no other off-balance sheet arrangements (as defined in Regulation S-K Item 303 paragraph (a)(4)(ii)) that have or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The Company’s critical accounting policies are as presented in Notes to Consolidated Financial Statements and Management’s Discuss and Analysis of Financial Condition and Results of Operations in our Annual Report Form 10-K for the year ended December 31, 2019.

Forward-Looking Statements

The foregoing discussion includes forward-looking statements relating to the business of the Company. Generally, these statements can be identified by the use of words such as “guidance,” “outlook,” “believes,” “estimates,” “anticipates,” “expects,” “forecasts,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could,” “would” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements, or other statements made by the Company, are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors (including, but not limited to, those specified below) which are difficult to predict and, in many instances, are beyond the control of the Company. As a result, actual results of the Company could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) the Company's ability to effectively integrate acquisitions, including the acquisition of MPI Products, Inc. (dba Marine Products International), and manage the larger operations of the combined businesses, (b) the Company's dependence upon a limited number of customers and the aerospace industry, (c) the highly competitive industry in which the Company operates, which includes several competitors with greater financial resources and larger sales organizations, (d) the Company's ability to capitalize on market opportunities in certain sectors, (e) the Company's ability to obtain cost effective financing (f) the Company's ability to satisfy obligations under its financing arrangements, (g) statements related to the expected effects on the Company’s business of the COVID-19 pandemic, (h) the duration and scope of the COVID-19 pandemic and impact on the demand for the Company’s products, (i) actions that governments, businesses and individuals take in response to the pandemic, including mandatory business closures and restrictions on onsite commercial interactions, (j) the impact of the pandemic and actions taken in response to the pandemic on global and regional economies and economic activity, (k) the restoration of operations of the Company’s customers and suppliers, the lifting of public health measures and the pace of recovery when the COVID-19 pandemic subsides, (l) general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth, and the other risks described in “Item 1A. Risk Factors” in this Annual Report on Form 10-K and the Company’s subsequent filings with the SEC. 

ITEM 3. MARKET RISK

This item is not applicable to the Company as a smaller reporting company.

20

ITEM 4. CONTROLS AND PROCEDURES

As of June 30, 2020, an evaluation was performed, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Company's management, including the Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, concluded that the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act") were effective as of June 30, 2020 to ensure that information required to be disclosed by the Company in reports that it files and submits under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and (2) is accumulated and communicated to the Company's management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2020 that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

21

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS. 

At the time of filing this Quarterly Report on Form 10-Q, there were no material legal proceedings pending or threatened against the Company.

ITEM 1A. RISK FACTORS. 

The COVID-19 pandemic has disrupted the company’s operations and could have a material adverse effect on the company’s business, financial condition and liquidity. 

The Company’s business could be further materially and adversely affected by the outbreak of a widespread health epidemic. The present coronavirus (or COVID-19) pandemic has affected the Company’s operations including government authorities imposing mandatory closures, work-from-home orders and social distancing protocols, and imposing other restrictions that could materially adversely affect the Company’s ability to maintain its operations. Specifically, the Company may experience, in the future, temporary facility closures in response to government mandates in certain jurisdictions in which the Company operates and in response to positive diagnoses for COVID-19 in certain facilities for the safety of the Company’s employees. The COVID-19 outbreak could also disrupt the Company’s supply chain and may materially adversely impact its ability to secure supplies for its facilities, which could materially adversely affect the Company’s operations. There may also be long-term effects on the Company’s customers in and the economies of affected countries.

New and changing government actions to address the COVID-19 pandemic continue to occur on a regular basis. As a result, the jurisdictions in which the Company’s products are manufactured and distributed are in varying stages of restrictions. Certain jurisdictions have had to re-establish restrictions due to a resurgence in COVID-19 cases. Additionally, although the operations of many of the company’s customers have begun to be restored or increased, such operations may be forced to be limited or closed as any new COVID-19 outbreaks occur. Even as government restrictions are lifted and economies gradually reopen, the shape of the economic recovery is uncertain and may continue to negatively impact the Company's results of operations, cash flows and financial position in subsequent quarters. Given this current level of economic and operational uncertainty over the impacts of COVID-19, the ultimate financial impact cannot be reasonably estimated at this time.

The COVID-19 pandemic and similar issues in the future could have a material adverse effect on the Company’s ability to operate, results of operations, financial condition and liquidity. In addition, preventive measures the Company may voluntarily put in place, may have a material adverse effect on its business for an indefinite period of time, such as the potential shut down of certain locations, decreased employee availability, potential border closures and others. The Company’s suppliers and customers may also face these and other challenges, which could lead to disruption in the company’s supply chain, as well as decreased customer demand for the company’s products. These issues may also materially affect the Company’s future access to its sources of liquidity, particularly its cash flows from operations, financial condition and capitalization. Although these disruptions may continue to occur, the long-term economic impact and near-term financial impacts of such issues, may not be reasonably estimated due to the uncertainty of future developments.

In addition to the foregoing risk factor and the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020.

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None

22

ITEM 6. EXHIBITS

10.1	Promissory Note dated June 4, 2020, between CAD and First Federal Savings and Loan Association of Lakewood (incorporated by reference to the appropriate exhibit to the Company’s Form 8-K as filed with the Commission on June 10, 2020).
10.2	Promissory Note dated June 4, 2020, between Federal Hose and First Federal Savings and Loan Association of Lakewood (incorporated by reference to the appropriate exhibit to the Company’s Form 8-K as filed with the Commission on June 10, 2020).
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer.
32.1	Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation
101.DEF*	XBRL Extension Definition
101.LAB*	XBRL Taxonomy Extension Labels
101.PRE*	XBRL Taxonomy Extension Presentation

*XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned as of the 14th day of August 2020, thereunto duly authorized.

SIGNATURE:	TITLE
/s/ Brian E. Powers	Chairman, President and Chief
Brian E. Powers	Executive Officer
	(Principal Executive Officer)
/s/ Kelly J. Marek	Vice President and Chief Financial
Kelly J. Marek	Officer (Principal Accounting and Financial Officer)

24

EX-31.1

Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Brian E. Powers, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Crawford United Corporation (the "registrant");
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:

/s/ Brian E. Powers

Brian E. Powers

President and Chief Executive Officer

August 14, 2020

EX-31.2

 Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Kelly J. Marek, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Crawford United Corporation (the "registrant");
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:

/s/ Kelly J, Marek

Kelly J. Marek

Vice President and Chief Financial Officer

August 14, 2020

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Crawford United Corporation (the "Company") on Form 10-Q for the period ending June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brian Powers, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Brian E. Powers

Brian E. Powers

President and Chief Executive Officer

August 14, 2020

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Crawford United Corporation (the "Company") on Form 10-Q for the period ending June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kelly J. Marek, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kelly J. Marek

Kelly J. Marek

Vice President and Chief Financial Officer

August 14, 2020

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 31, 2020
Document Information [Line Items]
Entity Registrant Name	CRAWFORD UNITED Corp
Entity Central Index Key	0000047307
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		771,848
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		2,552,902

XML

Consolidated Balance Sheet (Current Period Unaudited) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 6,927,438	$ 2,232,499
Accounts receivable less allowance for doubtful accounts	12,522,216	14,001,795
Contract assets	4,727,753	2,422,379
Inventory, net of reserves	11,057,037	7,678,690
Prepaid expenses and other current assets	680,131	703,002
Total Current Assets	35,914,575	27,038,365
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements	228,872	228,872
Buildings and leasehold improvements	1,949,370	1,837,009
Machinery and equipment	14,060,723	13,950,444
Total property, plant and equipment	16,238,965	16,016,325
Less accumulated depreciation	4,482,606	3,622,153
Property, Plant and Equipment, Net	11,756,359	12,394,172
Operating right of use asset, net	8,778,901	9,224,840
OTHER ASSETS:
Goodwill	11,505,852	9,791,745
Intangibles, net of accumulated amortization	7,912,156	3,950,838
Other non-current assets	106,804	88,046
Total Non-Current Other Assets	19,524,812	13,830,629
Total Assets	75,974,647	62,488,006
CURRENT LIABILITIES:
Notes payable – current	2,766,221	2,749,459
Bank debt – current	1,333,333	1,333,333
Leases payable - current	826,936	850,664
Accounts payable	9,311,886	6,071,522
Unearned revenue	722,062	1,998,578
Accrued expenses	4,136,392	3,281,445
Total Current Liabilities	19,096,830	16,285,001
LONG-TERM LIABILITIES:
Notes payable – long-term	8,306,832	7,676,697
Bank debt – long-term	14,283,417	6,376,594
Leases payable – long term	8,109,118	8,513,448
Deferred income taxes	2,207,735	2,207,734
Total Long-Term Liabilities	32,907,102	24,774,473
STOCKHOLDERS' EQUITY
Preferred shares, no par value - 1,000,000 shares authorized, no shares issued and outstanding
Contributed capital	1,741,901	1,741,901
Treasury shares	(1,934,812)	(1,905,780)
Retained earnings	18,831,490	16,527,083
Total Stockholders' Equity	23,970,715	21,428,532
Total Liabilities and Stockholders' Equity	75,974,647	62,488,006
Common Class A [Member]
STOCKHOLDERS' EQUITY
Common stock	3,866,614	3,599,806
Common Class B [Member]
STOCKHOLDERS' EQUITY
Common stock	$ 1,465,522	$ 1,465,522

XML

Consolidated Balance Sheet (Current Period Unaudited) (Parentheticals) - $ / shares $ / shares in Thousands	Jun. 30, 2020	Dec. 31, 2019
Common Class A [Member]
Class of common stock, par value (in dollars per share)	$ 0	$ 0
Class of common stock, shares authorized (in shares)	10,000,000	10,000,000
Class of common stock, shares issued (in shares)	2,591,837	2,576,837
Treasury shares, issued (in shares)	38,935	37,208
Common Class B [Member]
Class of common stock, par value (in dollars per share)	$ 0	$ 0
Class of common stock, shares authorized (in shares)	2,500,000	2,500,000
Class of common stock, shares issued (in shares)	954,283	954,283
Treasury shares, issued (in shares)	182,435	182,435

XML

Consolidated Statement of Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Total sales	$ 18,576,588	$ 24,514,636	$ 43,858,162	$ 46,350,723
Cost of Sales	15,077,549	19,287,703	34,150,980	36,293,902
Gross Profit	3,499,039	5,226,933	9,707,182	10,056,821
Operating Expenses:
Selling, general and administrative expenses	2,968,519	2,435,380	6,038,513	4,694,197
Operating Income	530,520	2,791,553	3,668,669	5,362,624
Other (Income) and Expenses:
Interest charges	235,289	284,579	532,710	550,652
Other (income) expense, net	(12,394)	25,535	58,967	1,661
Total Other (Income) and Expenses	222,895	310,114	591,677	552,313
Income before Provision for Income Taxes	307,625	2,481,439	3,076,992	4,810,311
Provision for Income Taxes	78,788	649,960	772,585	1,233,374
Net Income	$ 228,837	$ 1,831,479	$ 2,304,407	$ 3,576,937
Net Income Per Common Share - Basic (in dollars per share)	$ 0.07	$ 0.66	$ 0.70	$ 1.30
Net Income Per Common Share - Diluted (in dollars per share)	$ 0.07	$ 0.57	$ 0.69	$ 1.12
Weighted Average Shares of Common Stock Outstanding
Basic (in shares)	3,317,665	2,755,916	3,314,573	2,755,764
Diluted (in shares)	3,319,264	3,212,798	3,316,217	3,196,151

XML

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member] Common Class A [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Common Stock [Member] Common Class A [Member]	Common Stock [Member] Common Class B [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Common Stock [Member] Common Class B [Member]	Additional Paid-in Capital [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member] Common Class A [Member]	Treasury Stock [Member] Common Class B [Member]	Treasury Stock [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Treasury Stock [Member]	Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Retained Earnings [Member]	Common Stock Including Additional Paid in Capital [Member] Common Class A [Member]	Common Stock Including Additional Paid in Capital [Member] Common Class B [Member]	Common Stock Outstanding [Member] Common Class A [Member]	Common Stock Outstanding [Member] Common Class B [Member]	Cumulative Effect, Period of Adoption, Adjustment [Member]	Total
Balance at Dec. 31, 2018		$ 2,641,300		$ 710,272		$ 1,741,901				$ (1,905,780)	$ (73,126)	$ 9,577,792					$ (73,126)	$ 12,765,485
Share-based compensation expense		61,342																61,342
Stock awards		204,700																204,700
Net Income												3,576,937						3,576,937
Balance (in shares) at Dec. 31, 2018							37,208	182,435					2,161,014	779,283	2,123,806	596,848
Stock awards (in shares)													39,000		39,000
Repurchase of shares (in shares)
Balance at Jun. 30, 2019		2,907,342		710,272		1,741,901				(1,905,780)		13,081,603						16,535,338
Balance (in shares) at Jun. 30, 2019							37,208	182,435					2,200,014	779,283	2,162,806	596,848
Balance at Mar. 31, 2019		2,865,159		710,272		1,741,901				(1,905,780)		11,250,124						14,661,676
Share-based compensation expense		42,183																42,183
Stock awards
Repurchase of shares
Net Income												1,831,479						1,831,479
Balance (in shares) at Mar. 31, 2019							37,208	182,435					2,196,014	779,283	2,158,806	596,848
Stock awards (in shares)													4,000		4,000
Repurchase of shares (in shares)
Balance at Jun. 30, 2019		2,907,342		710,272		1,741,901				(1,905,780)		13,081,603						16,535,338
Balance (in shares) at Jun. 30, 2019							37,208	182,435					2,200,014	779,283	2,162,806	596,848
Balance at Dec. 31, 2019		3,599,806		1,465,522		1,741,901				(1,905,780)		16,527,083						21,428,532
Share-based compensation expense		55,758																55,758
Stock awards		211,050																211,050
Repurchase of shares										(29,032)								(29,032)
Net Income												2,304,407						2,304,407
Balance (in shares) at Dec. 31, 2019							37,208	182,435					2,576,837	954,283	2,539,629	771,848
Stock awards (in shares)													15,000		15,000
Repurchase of shares (in shares)							1,727								(1,727)
Balance at Jun. 30, 2020		3,866,614		1,465,522		1,741,901				(1,934,812)		18,831,490						23,970,715
Balance (in shares) at Jun. 30, 2020							38,935	182,435					2,591,837	954,283	2,552,902	771,848
Balance at Mar. 31, 2020		3,636,272		1,465,522		1,741,901				(1,905,780)		18,602,653						23,540,568
Share-based compensation expense		19,292																19,292
Stock awards		211,050																211,050
Repurchase of shares										(29,032)								(29,032)
Net Income												228,837						228,837
Balance (in shares) at Mar. 31, 2020							37,208	182,435					2,576,837	954,283	2,539,629	771,848
Stock awards (in shares)													15,000		15,000
Repurchase of shares (in shares)							1,727								(1,727)
Balance at Jun. 30, 2020		$ 3,866,614		$ 1,465,522		$ 1,741,901				$ (1,934,812)		$ 18,831,490						$ 23,970,715
Balance (in shares) at Jun. 30, 2020							38,935	182,435					2,591,837	954,283	2,552,902	771,848

XML

Consolidated Statement of Cash Flow (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows from Operating Activities
Net Income	$ 2,304,407	$ 3,576,937
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,237,997	976,612
Loss (gain) on sale of assets		4,294
Non-cash share-based compensation expense	266,808	266,042
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable	2,250,667	(6,130,441)
Decrease (Increase) in inventory	(460,092)	(666,130)
Decrease (Increase) in contract assets	(2,305,374)	(782,054)
Decrease (Increase) in prepaid expenses & other assets	57,510	148,599
Increase (Decrease) in accounts payable	2,427,507	1,997,175
Increase (Decrease) in accrued expenses	1,281,168	773,854
Increase (Decrease) in unearned revenue	(1,276,516)	(2,688,679)
Total adjustments	3,479,675	(6,100,728)
Net Cash Provided by (Used in) Operating Activities	5,784,082	(2,523,791)
Cash Flows from Investing Activities
Cash paid for acquisition	(9,400,000)	(50,001)
Capital expenditures	(193,059)	(418,934)
Net Cash (Used in) Investing Activities	(9,593,059)	(468,935)
Cash Flows from Financing Activities
Payments on notes	(808,850)	(223,993)
Borrowings on notes	1,453,837
Payments on bank debt	(3,427,080)	(2,537,663)
Borrowings on bank debt	11,315,041	1,442,445
Share repurchase	(29,032)
Payments on finance lease		(6,011)
Net Cash Provided by (Used in) Financing Activities	8,503,916	(1,325,222)
Net Increase (decrease) in cash and cash equivalents	4,694,939	(4,317,948)
Cash and cash equivalents at beginning of period	2,232,499	5,057,626
Cash and cash equivalents at end of period	6,927,438	739,678
Supplemental disclosures of cash flow information
Interest paid	477,332	439,572
Income Taxes paid		$ 1,161,400

XML

Note 1 - Basis of Presentation

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Basis of Accounting [Text Block]

1.

  BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form

10

-Q and Article

8

of Regulation S-

X.

Accordingly, they do

not

include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include the accounts of Crawford United Corporation and its wholly-owned subsidiaries (the “Company”). Significant intercompany transactions and balances have been eliminated in the financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the

three

and

six

months ended

June 30, 2020

are

not

necessarily indicative of the results that

may

be expected for the fiscal year ended

December 31, 2020.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form

10

-K for the fiscal year ended

December 31, 2019. 

During the

three

and

six

months ended

June 30, 2020,

there have been

no

changes to our significant accounting policies.

XML

Note 2 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2.

  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company's Summary of Significant Accounting Policies is provided with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form

10

-K for the fiscal year ended

December 31, 2019.

Recently Adopted Accounting Standards

In

January 2017,

FASB issued ASU

2017

-

04,

"Intangibles-Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment." ASU

2017

-

04

eliminates the

second

step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit's goodwill. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value,

not

to exceed the total amount of goodwill allocated to the reporting unit. The standard, which should be applied prospectively, is effective for fiscal years and interim periods within those years beginning on or after

December 15, 2019.

Early adoption is permitted. The adoption of this standard did

not

have a material impact on our consolidated financial statements.

In

June 2016,

the FASB issued ASU

2016

-

13,

Financial Instruments-Credit Losses. The standard requires a financial asset (including trade receivables) measured at amortized cost basis to be presented at the net amount expected to be collected. Thus, the income statement will reflect the measurement of credit losses for newly-recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. This standard is effective for fiscal years and interim periods within those fiscal years beginning on or after

December 15, 2019

with early adoption permitted. The adoption of this standard did

not

have a material impact on our consolidated financial statements.

XML

Note 3 - Accounts Receivable

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3.

  ACCOUNTS RECEIVABLE

 

The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. The reserve for doubtful accounts was

$16,875

and

$18,325

at

June 30, 2020

and

December 31, 2019,

respectively.

XML

Note 4 - Inventory

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Inventory Disclosure [Text Block]

4.

  INVENTORY

Inventory is valued at the lower of cost (

first

-in,

first

-out) or net realizable value and consists of:

	June 3 0 , 2020		December 31, 2019
Raw materials and component parts	$	3,351,443	$	2,945,427
Work-in-process		3,366,209		2,800,699
Finished products		4,589,223		2,183,170
Total inventory	$	11,306,875		7,929,296
Less: inventory reserves		249,838		250,606
Net inventory	$	11,057,037	$	7,678,690

XML

Note 5 - Goodwill and Other Intangible Assets, Net

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

5.

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Intangible assets relate to the purchase of businesses. Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is

not

amortized but is reviewed on an annual basis for impairment. Amortization of intangibles is being amortized on a straight-line basis over period ranging from

one

year to

15

years. Intangible assets are as follows:

	June 3 0 , 2020		December 31, 2019
Customer list intangibles	$	7,700,000	$	4,970,000
Non-compete agreements		200,000		200,000
Trademarks		1,930,000		340,000
Total intangible assets		9,830,000		5,510,000
Less: accumulated amortization		1,917,844		1,559,162
Intangible assets, net	$	7,912,156	$	3,950,838

Amortization of intangibles assets was:

$179,342

 and 

$93,592

for the

three

months ended

June 30, 2020

and

2019,

respectively, and

$358,682

 and 

$187,183

for the

six

months ended

June 30, 2020

and

2019,

respectively.    

XML

Note 6 - Property, Plant and Equipment, Net

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

6.

  PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment are recorded at cost and depreciated over their useful lives. Maintenance and repair costs are expenses as incurred. Property, plant and equipment are as follows:

	June 3 0 , 2020		December 31, 2019
Land	$	228,872	$	228,872
Buildings and improvements		1,949,370		1,837,009
Machinery & equipment		14,060,723		13,950,444
Total property, plant & equipment		16,238,965		16,016,325
Less: accumulated depreciation		4,482,606		3,622,153
Property plant & equipment, net	$	11,756,359	$	12,394,172

Depreciation expense was

$425,769

 and

$375,987

for the

three

months ended

June 30, 2020

and

2019,

respectively,

$860,453

and 

$804,765

for the

six

months ended

June 30, 2020

and

2019,

respectively.

XML

Note 7 - Bank Debt

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Long-term Debt [Text Block]

7.

  BANK DEBT 

The Company entered into a Credit Agreement on

June 1, 2017

with JPMorgan Chase Bank, N.A. as lender, which was subsequently amended in connection with funding the acquisition of CAD Enterprises, Inc. (“CAD”) on

July 5, 2018 (

as amended, the “Credit Agreement"). The Credit Agreement was amended on

September 30, 2019

to expand the revolving loan amount from

$12,000,000

to

$20,000,000,

subject to a borrowing base, and to extend the maturity of revolving facility from

June 1, 2021

to

June 1, 2024.

The Credit Agreement was further amended on

December 30, 2019

to eliminate the borrowing base. As amended, the Credit Agreement is comprised of a revolving facility in the amount of

$20,000,000

and a term A loan in the amount of

$6,000,000.

Outstanding borrowings on the term A loan are payable in consecutive monthly installments, which currently amount to

$111,111

per month.

The revolving facility under the Credit Agreement includes a

$3

million sublimit for the issuance of letters of credit thereunder. Interest for borrowings under the revolving facility accrues at a per annum rate equal to Prime Rate or LIBOR plus applicable margins of (i)

0.25%

for Prime Rate loans and (ii)

1.75%

for LIBOR loans. The maturity date of the revolving facility is

June 1, 2024.

Interest for borrowings under the term A loan accrues at a per annum rate equal to Prime Rate or LIBOR plus applicable margins of (i)

0.25%

for Prime Rate loans and (ii)

2.25%

for LIBOR loans. The maturity date of the term A loan is

December 1, 2022.

The Credit Agreement includes a commitment fee on the unused portion of the revolving facility of

0.25%

per annum payable quarterly. The obligations of the Company and other borrowers under the Credit Agreement are secured by a blanket lien on all the assets of the Company and its subsidiaries. The Credit Agreement also includes customary representations and warranties and applicable reporting requirements and covenants. The financial covenants under the Credit Agreement include a minimum fixed charge coverage ratio, a maximum senior funded debt to EBITDA ratio and a maximum total funded debt to EBITDA ratio.

Bank debt balances consist of the following:

	June 3 0 , 2020		December 31, 2019
Term debt	$	3,444,444	$	4,111,111
Revolving debt		12,288,036		3,722,995
Total Bank debt		15,732,480		7,834,106
Less: current portion		1,333,333		1,333,333
Non-current bank debt		14,399,147		6,500,773
Less: unamortized debt costs		115,730		124,179
Net non-current bank debt	$	14,283,417	$	6,376,594

The Company had

$7.7

million and

$16.3

million available to borrow on the revolving credit facility at

June 30, 2020

and

December 31, 2019,

respectively.   

XML

Note 8 - Notes Payable

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

8.

NOTES PAYABLE

Convertible Notes Payable

The Company converted all of the convertible notes payable in fiscal year

2019

and

no

longer is party to any agreements of this nature.

Notes Payable – Related Party

The Company has

two

separate outstanding promissory notes with First Francis Company Inc. (“First Francis”), which were originally issued in

July 2016

in connection with the acquisition of Federal Hose Manufacturing (“Federal Hose”) and which were amended in

July 2018

in connection with acquisition of CAD. The

first

promissory note was issued with original principal in the amount of

$2,000,000,

and the

second

was issued with original principal in the amount of

$2,768,662.

The promissory notes each have an interest rate of

6.25%

per annum, which was increased from

4.0%

per annum as part of the

July 2018

amendments to the Credit Agreement. In addition, the promissory note with original principal amount of

$2,768,662

was amended in

July 2018

to provide for a conversion option commencing

July 5, 2019

which allows First Francis to convert the promissory note, in whole in part with respect to a maximum amount of

$648,000,

into shares of the Company's Class B common stock at the price of

$6.48

per share (subject to adjustment), subject to shareholder approval which was obtained on

May 10, 2019. 

On

July 9, 2019,

First Francis exercised its option to convert

$648,000

of existing indebtedness into

100,000

Class B Common Shares of the Company. First Francis is owned by Matthew Crawford, who serves on the Board of Directors of the Company, and Edward Crawford, who served on the Board of Directors of the Company until

June 17, 2019.  

Notes Payable – Seller Note

Effective

July 1, 2018,

the Company completed the acquisition of all of the issued and outstanding shares of capital stock of CAD.  Upon the closing of the transaction, the CAD shares were transferred and assigned to the Company in consideration of the payment by the Company of an aggregate purchase price of

$21

million,

$12

million of which was payable in cash at closing, with the remainder paid in the form of a subordinated promissory note issued by the Company in favor of a Seller (the “Seller Note), which is subject to certain post-closing adjustments based on working capital, indebtedness and selling expenses, as specified in the Share Purchase Agreement entered into in connection with the acquisition (the “Share Purchase Agreement”).   The Seller Note bears interest at a rate of

four

percent (

4%

) per annum and is payable in full

no

later than

June 30, 2023 (

the “Maturity Date”).  The Maturity Date, with respect to any then-outstanding portion of the original principal amount which is subject to an indemnification claim by the Company (asserted in accordance with the terms of the Share Purchase Agreement) pending as of the date thereof, will be automatically extended until such time as any claim relating to such disputed amount is

no

longer pending, pursuant to the terms of the Seller Note and subject to additional conditions set forth therein and in the Share Purchase Agreement. The Company is

not

permitted to prepay any amounts due and owing under the Seller Note.  Payment of the Seller Note is secured by a

second

-priority security interest in the assets of CAD.   Interest accrued on the original principal amount becomes due and payable in arrears beginning

September 30, 2018,

and subsequent interest is due on the

first

day of each calendar quarter thereafter up to and including

June 30, 2019. 

The Company is required to make quarterly principal payments, the amount of which will be calculated based on a

four

(

4

) year amortization schedule, beginning on

September 30, 2019

and continuing on the last day of each calendar quarter thereafter up to and including the Maturity Date. The holders of the Seller Note and the Company agreed to defer the quarterly principal payment due

June 30, 2020;

quarterly interest was paid on the Seller Note.

Paycheck Protection Program

Notes

On

June 4, 2020,

each of Federal Hose and CAD entered into unsecured loans with First Federal Savings and Loan Association of Lakewood, pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), in the amounts of

$253,071

and

$1,200,766,

respectively (the “PPP Loans”).

The PPP Loans each have a

two

-year term and bear interest at a rate of

1.00%

per annum. Monthly principal and interest payments are deferred until

seven

months after the date of the loan, and will begin

January 4, 2021,

in monthly installments based on the principal balance of the PPP Loan outstanding following the deferral period and taking into consideration any remaining unforgiven portion of the PPP Loan. The PPP Loans

may

be prepaid at any time prior to maturity with

no

prepayment penalties. The loans contain events of default and other provisions customary for a loan of this type. The PPP Loans

may

be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. Federal Hose and CAD each intend to use their entire respective PPP Loan amounts for qualifying expenses and to apply for forgiveness of the loans in accordance with the terms of the CARES Act. The PPP Loans

may

be forgivable, partially or in full, if certain conditions are met, principally based on having been disbursed for permissible purposes and on maintaining certain average levels of employment and payroll as required by the CARES Act. Federal Hose and CAD intend to use the loan proceeds only for permissible purposes, and as of

June

30,2020

have used all proceeds from the PPP Loans to retain employees and maintain payroll; however, the Company can provide

no

assurances that the amounts borrowed by Federal Hose and CAD under the PPP Loans will be eligible for forgiveness, in whole or in part. The PPP Loans are unsecured and guaranteed by the U.S. Small Business Administration.

Notes payable consists of the following:

	June 3 0 , 2020		December 31, 2019
In connection with the Federal Hose acquisition, the Company entered into a promissory note on July 1, 2016 for a $2,000,000 loan due to First Francis Company, payable in quarterly installments beginning October 31, 2016	$	1,208,046	$	1,302,776
In connection with the Federal Hose acquisition, the Company entered into a promissory note on July 1, 2016 for a $2,768,662 loan due to First Francis Company, payable in quarterly installments beginning October 31, 2016.		1,098,670		1,248,380
In connection with the CARES Act, Federal Hose entered into a promissory note on June 4, 2020 for a $253,071 loan due to First Federal Savings and Loan Association of Lakewood, with monthly principal and interest installments to begin January 4, 2021. Any unforgiven portion of the note is payable on or before June 4, 2022.		253,071		-
In connection with the CARES Act, CAD entered into a promissory note on June 4, 2020 for a $1,200,766 loan due to First Federal Savings and Loan Association of Lakewood, with monthly principal and interest installment to begin January 4, 2021. Any unforgiven portion of the note is payable on or before June 4, 2022.		1,200,766		-
In connection with the CAD acquisition, the Company entered into a promissory note on July 1, 2018 for a $9,000,000 loan due to the Loudermilks, payable in quarterly installments beginning September 30, 2018.		7,312,500		7,875,000
Total notes payable		11,073,053		10,426,156
Less current portion		2,766,221		2,749,459
Notes payable – non-current portion	$	8,306,832	$	7,676,697

XML

Note 9 - Leases

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

9.

LEASES

On

January 1, 2019,

the Company adopted ASU

2016

-

02

“Leases (Topic

842

),” a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet. Most prominent among the amendments is the recognition of assets and liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP.

The Company has operating and finance leases for facilities, vehicles and equipment. These leases have remaining terms of

2

years to

15

years, some of which include options to extended the leases for up to

10

years.

Supplemental balance sheet information related to leases:

	June 3 0 , 2020			December 31, 2019
Operating leases:
Operating lease right-of-use assets, net	$	8,778,901		$	9,224,840
Other current liabilities		826,936			850,664
Operating lease liabilities		8,109,118			8,513,448
Total operating lease liabilities	$	8,936,054		$	9,364,112
Weighted Average Remaining Lease Term
Operating Leases (in years)		11.0			11.0
Weighted Average Discount Rate
Operating Leases		5.0	%		5.0	%

XML

Note 10 - Earnings Per Common Share

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

10.

EARNINGS PER COMMON SHARE

 

The following table sets forth the computation of basic and diluted earnings per share.

	Three Months Ended June 30,				Six Months Ended June 30,
	20 20		201 9		20 20		201 9
Earnings Per Share - Basic
Net Income	$	228,837	$	1,831,479	$	2,304,407	$	3,576,937
Weighted average shares of common stock outstanding - Basic		3,317,665		2,755,916		3,314,573		2,755,764
Earnings Per Share - Basic	$	0.07	$	0.66	$	0.70	$	1.30
Earnings Per Share - Diluted
Weighted average shares of common stock outstanding - Basic		3,317,665		2,755,916		3,314,573		2,755,764
Warrants, Options and Convertible Notes		1,599		456,882		1,644		440,387
Weighted average shares of common stock -Diluted		3,319,264		3,212,798		3,316,217		3,196,151
Earnings Per Share - Diluted	$	0.07	$	0.57	$	0.69	$	1.12

XML

Note 11 - Acquisitions

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

11.

ACQUISITIONS

Effective

January 2, 2020,

the Company completed the acquisition of substantially all of the assets of MPI Products, Inc. (dba Marine Products International) (“MPI”), pursuant to the Asset Purchase Agreement entered into by and between Crawford United Acquisition Company LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company, and MPI. Upon closing of the agreement, the assets were transferred to the Company in consideration of a purchase price of

$9.4

million in cash, which was subject to post-closing adjustments based on working capital.

MPI manufactures and distributes industrial hoses used by the recreational boating industry and has

one

operating location in Cleveland, Ohio. Purchase price was assigned to the book value of the net assets acquired with the excess over the book value assigned to intangible assets and goodwill and has been allocated to the following accounts:

Accounts Receivable	$	771,088
Inventory		2,918,255
Fixed Assets		29,581
Prepaid and Other Assets		53,397
Intangibles Assets		4,320,000
Goodwill		1,714,108
Total Assets Acquired	$	9,806,429
Accrued Expense		406,429
Total Liabilities Assumed	$	406,429
Net Assets Acquired	$	9,400,000

On

April 19, 2019,

the Company, completed the acquisition of substantially all of the assets of Data Genomix, Inc., an Ohio corporation (“DG”), pursuant to the terms of an Asset Purchase Agreement entered into by and between Hickok Operating LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company, and DG on the date thereof. DG is in the business of developing and commercializing marketing and data analytic technology applications.

XML

Note 12 - Segment and Related Information

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

12.

SEGMENT AND RELATED INFORMATION

  

The Company operates

three

reportable business segments: (

1

) Aerospace Components, (

2

) Commercial Air Handling, (

3

) and Industrial Hose. The Company's management evaluates segment performance based primarily on operating income. Certain corporate costs are allocated to the segments and interest expense directly related to financing the acquisition of a business is allocated to that segment, respectively.  Intangible assets are allocated to each segment and the related amortization of these assets are recorded in selling, general and administrative expenses.

Aerospace Components:

The Aerospace Components segment was added

July 1, 2018,

when the Company purchased all of the issued and outstanding shares of capital stock of CAD Enterprises, Inc. in Phoenix, Arizona. This segment manufactures precision components primarily for customers in the aerospace industry.  This segment provides complete end-to-end engineering, machining, grinding, welding, brazing, heat treat and assembly solutions.  Utilizing state-of-the-art machining and welding technologies, this segment is an industry leader in providing complex components produced from nickel-based superalloys and stainless steels.  Our quality certifications include ISO

9001:2015/AS9100D,

as well as Nadcap accreditation for Fluorescent Penetrant Inspection (FPI), Heat Treating/Braze, Non-Conventional Machining EDM, TIG/E-Beam welding.

Commercial Air Handling:

The Commercial Air Handling segment was added

June 1, 2017,

when the Company purchased certain assets and assumed certain liabilities of Air Enterprises Acquisition LLC in Akron, Ohio. The acquired business, which operates under the name Air Enterprises, is an industry leader in designing, manufacturing and installing large-scale commercial, institutional, and industrial custom air handling solutions. Its customers are typically in the health care, education, pharmaceutical and industrial manufacturing markets in the United States. This segment also sells to select international markets. The custom air handling units are constructed of non-corrosive aluminum, resulting in sustainable, long-lasting, and energy efficient solutions with life expectancies of

50

years or more. These products are distributed through a network of sales representatives, based on relationships with health care networks, building contractors and engineering firms. The custom air handling equipment is designed, manufactured and installed under the brand names FactoryBilt® and SiteBilt®. FactoryBilt® air handling solutions are designed, fabricated and assembled in a vertically integrated process entirely within the Akron, Ohio facility. SiteBilt® air handling solutions are designed and fabricated in Akron, but are then crated and shipped to the field and assembled on-site.

Industrial Hose:

 

The Industrial Hose segment was added

July 1, 2016,

when the Company purchased the assets of the Federal Hose Manufacturing, LLC of Painesville, Ohio. This business segment includes the manufacture of flexible interlocking metal hoses and the distribution of silicone and hydraulic hoses. Metal hoses are sold primarily to major heavy-duty truck manufacturers and major aftermarket suppliers in North America. Metal hoses are also sold into the agricultural, industrial and petrochemical markets. Silicone hoses are distributed to a number of industries in North America, including agriculture and general industrial markets. The Company added the distribution of marine hose for recreational boating to this segment through the acquisition of the assets of MPI Products on

January 2, 2020.

Corporate and Other:

 

Corporate costs

not

allocated to the

three

primary business segments are aggregated with the results of DG, acquired in

April 2019.

Information by industry segment is set forth below:

 

	Three Months Ended June 3 0 , 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	11,848,816	$	2,587,421		$	4,046,814	$	93,537		$	18,576,588
Gross Profit		2,893,541		(499,569	)		1,088,811		16,256			3,499,039
Operating Income		1,565,482		(991,953	)		227,498		(270,507	)		530,520
Pretax Income		1,565,482		(1,134,193	)		88,290		(211,954	)		307,625
Net Income		1,174,113		(850,645	)		62,082		(156,713	)		228,837

	Three Months Ended June 3 0 , 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales	$	14,880,504	$	7,457,377	$	1,933,725	$	243,030		$	24,514,636
Gross Profit		3,549,109		1,038,395		592,245		47,184			5,226,933
Operating Income		2,244,680		414,464		295,701		(163,292	)		2,791,553
Pretax Income		2,244,481		231,296		214,536		(208,874	)		2,481,439
Net Income		1,683,361		169,377		159,385		(180,644	)		1,831,479

	Six Months Ended June 30, 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	23,302,590	$	9,843,247		$	10,296,535	$	415,790		$	43,858,162
Gross Profit		5,941,342		771,191			2,851,178		143,471			9,707,182
Operating Income		3,185,251		(251,705	)		893,081		(157,958	)		3,668,669
Pretax Income		3,160,286		(548,265	)		614,816		(149,845	)		3,076,992
Net Income		2,370,215		(411,199	)		455,552		(110,161	)		2,304,407

	Six Months Ended June 30, 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales	$	26,625,065	$	15,477,780	$	3,730,816	$	517,062		$	46,350,723
Gross Profit		6,551,042		2,295,400		1,117,979		92,400			10,056,821
Operating Income		4,027,667		1,174,074		543,989		(383,106	)		5,362,624
Pretax Income		4,027,177		794,253		407,013		(418,132	)		4,810,311
Net Income		3,020,384		593,097		302,456		(339,000	)		3,576,937

XML

Note 13 - Uncertainties

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Effect of Covid19 Pandemic [Text Block]

13.

UNCERTAINTIES

The coronavirus (COVID-

19

) pandemic had a material adverse effect on the Company's reported results for the

three

and

six

months ended

June 30, 2020.

The Company will continue to actively monitor the impact of the coronavirus pandemic, which is expected to negatively impact the Company's business and results of operations for the remainder of fiscal year

2020

and possibly beyond. The extent to which the Company's business and operations will be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which

may

emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact, among other things.

XML

Note 14 - Subsequent Events

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

14.

SUBSEQUENT EVENTS

None

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Standards

In

January 2017,

FASB issued ASU

2017

-

04,

"Intangibles-Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment." ASU

2017

-

04

eliminates the

second

step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit's goodwill. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value,

not

to exceed the total amount of goodwill allocated to the reporting unit. The standard, which should be applied prospectively, is effective for fiscal years and interim periods within those years beginning on or after

December 15, 2019.

Early adoption is permitted. The adoption of this standard did

not

have a material impact on our consolidated financial statements.

In

June 2016,

the FASB issued ASU

2016

-

13,

Financial Instruments-Credit Losses. The standard requires a financial asset (including trade receivables) measured at amortized cost basis to be presented at the net amount expected to be collected. Thus, the income statement will reflect the measurement of credit losses for newly-recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. This standard is effective for fiscal years and interim periods within those fiscal years beginning on or after

December 15, 2019

with early adoption permitted. The adoption of this standard did

not

have a material impact on our consolidated financial statements.

XML

Note 4 - Inventory (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	June 3 0 , 2020		December 31, 2019
Raw materials and component parts	$	3,351,443	$	2,945,427
Work-in-process		3,366,209		2,800,699
Finished products		4,589,223		2,183,170
Total inventory	$	11,306,875		7,929,296
Less: inventory reserves		249,838		250,606
Net inventory	$	11,057,037	$	7,678,690

XML

Note 5 - Goodwill and Other Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	June 3 0 , 2020		December 31, 2019
Customer list intangibles	$	7,700,000	$	4,970,000
Non-compete agreements		200,000		200,000
Trademarks		1,930,000		340,000
Total intangible assets		9,830,000		5,510,000
Less: accumulated amortization		1,917,844		1,559,162
Intangible assets, net	$	7,912,156	$	3,950,838

XML

Note 6 - Property, Plant and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Property, Plant and Equipment [Table Text Block]

	June 3 0 , 2020		December 31, 2019
Land	$	228,872	$	228,872
Buildings and improvements		1,949,370		1,837,009
Machinery & equipment		14,060,723		13,950,444
Total property, plant & equipment		16,238,965		16,016,325
Less: accumulated depreciation		4,482,606		3,622,153
Property plant & equipment, net	$	11,756,359	$	12,394,172

XML

Note 7 - Bank Debt (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Schedule of Debt [Table Text Block]

	June 3 0 , 2020		December 31, 2019
Term debt	$	3,444,444	$	4,111,111
Revolving debt		12,288,036		3,722,995
Total Bank debt		15,732,480		7,834,106
Less: current portion		1,333,333		1,333,333
Non-current bank debt		14,399,147		6,500,773
Less: unamortized debt costs		115,730		124,179
Net non-current bank debt	$	14,283,417	$	6,376,594

XML

Note 8 - Notes Payable (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	June 3 0 , 2020		December 31, 2019
In connection with the Federal Hose acquisition, the Company entered into a promissory note on July 1, 2016 for a $2,000,000 loan due to First Francis Company, payable in quarterly installments beginning October 31, 2016	$	1,208,046	$	1,302,776
In connection with the Federal Hose acquisition, the Company entered into a promissory note on July 1, 2016 for a $2,768,662 loan due to First Francis Company, payable in quarterly installments beginning October 31, 2016.		1,098,670		1,248,380
In connection with the CARES Act, Federal Hose entered into a promissory note on June 4, 2020 for a $253,071 loan due to First Federal Savings and Loan Association of Lakewood, with monthly principal and interest installments to begin January 4, 2021. Any unforgiven portion of the note is payable on or before June 4, 2022.		253,071		-
In connection with the CARES Act, CAD entered into a promissory note on June 4, 2020 for a $1,200,766 loan due to First Federal Savings and Loan Association of Lakewood, with monthly principal and interest installment to begin January 4, 2021. Any unforgiven portion of the note is payable on or before June 4, 2022.		1,200,766		-
In connection with the CAD acquisition, the Company entered into a promissory note on July 1, 2018 for a $9,000,000 loan due to the Loudermilks, payable in quarterly installments beginning September 30, 2018.		7,312,500		7,875,000
Total notes payable		11,073,053		10,426,156
Less current portion		2,766,221		2,749,459
Notes payable – non-current portion	$	8,306,832	$	7,676,697

XML

Note 9 - Leases (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Lessee, Operating and Finance Lease, Assets and Liabilities [Table Text Block]

	June 3 0 , 2020			December 31, 2019
Operating leases:
Operating lease right-of-use assets, net	$	8,778,901		$	9,224,840
Other current liabilities		826,936			850,664
Operating lease liabilities		8,109,118			8,513,448
Total operating lease liabilities	$	8,936,054		$	9,364,112
Weighted Average Remaining Lease Term
Operating Leases (in years)		11.0			11.0
Weighted Average Discount Rate
Operating Leases		5.0	%		5.0	%

XML

Note 10 - Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	20 20		201 9		20 20		201 9
Earnings Per Share - Basic
Net Income	$	228,837	$	1,831,479	$	2,304,407	$	3,576,937
Weighted average shares of common stock outstanding - Basic		3,317,665		2,755,916		3,314,573		2,755,764
Earnings Per Share - Basic	$	0.07	$	0.66	$	0.70	$	1.30
Earnings Per Share - Diluted
Weighted average shares of common stock outstanding - Basic		3,317,665		2,755,916		3,314,573		2,755,764
Warrants, Options and Convertible Notes		1,599		456,882		1,644		440,387
Weighted average shares of common stock -Diluted		3,319,264		3,212,798		3,316,217		3,196,151
Earnings Per Share - Diluted	$	0.07	$	0.57	$	0.69	$	1.12

XML

Note 11 - Acquisitions (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Accounts Receivable	$	771,088
Inventory		2,918,255
Fixed Assets		29,581
Prepaid and Other Assets		53,397
Intangibles Assets		4,320,000
Goodwill		1,714,108
Total Assets Acquired	$	9,806,429
Accrued Expense		406,429
Total Liabilities Assumed	$	406,429
Net Assets Acquired	$	9,400,000

XML

Note 12 - Segment and Related Information (Tables)

6 Months Ended

Jun. 30, 2020

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended June 3 0 , 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	11,848,816	$	2,587,421		$	4,046,814	$	93,537		$	18,576,588
Gross Profit		2,893,541		(499,569	)		1,088,811		16,256			3,499,039
Operating Income		1,565,482		(991,953	)		227,498		(270,507	)		530,520
Pretax Income		1,565,482		(1,134,193	)		88,290		(211,954	)		307,625
Net Income		1,174,113		(850,645	)		62,082		(156,713	)		228,837

	Three Months Ended June 3 0 , 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales	$	14,880,504	$	7,457,377	$	1,933,725	$	243,030		$	24,514,636
Gross Profit		3,549,109		1,038,395		592,245		47,184			5,226,933
Operating Income		2,244,680		414,464		295,701		(163,292	)		2,791,553
Pretax Income		2,244,481		231,296		214,536		(208,874	)		2,481,439
Net Income		1,683,361		169,377		159,385		(180,644	)		1,831,479

	Six Months Ended June 30, 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	23,302,590	$	9,843,247		$	10,296,535	$	415,790		$	43,858,162
Gross Profit		5,941,342		771,191			2,851,178		143,471			9,707,182
Operating Income		3,185,251		(251,705	)		893,081		(157,958	)		3,668,669
Pretax Income		3,160,286		(548,265	)		614,816		(149,845	)		3,076,992
Net Income		2,370,215		(411,199	)		455,552		(110,161	)		2,304,407

	Six Months Ended June 30, 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales	$	26,625,065	$	15,477,780	$	3,730,816	$	517,062		$	46,350,723
Gross Profit		6,551,042		2,295,400		1,117,979		92,400			10,056,821
Operating Income		4,027,667		1,174,074		543,989		(383,106	)		5,362,624
Pretax Income		4,027,177		794,253		407,013		(418,132	)		4,810,311
Net Income		3,020,384		593,097		302,456		(339,000	)		3,576,937

XML

Note 3 - Accounts Receivable (Details Textual) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Accounts Receivable, Allowance for Credit Loss, Ending Balance	$ 16,875	$ 18,325

XML

Note 4 - Inventory - Inventory (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Raw materials and component parts	$ 3,351,443	$ 2,945,427
Work-in-process	3,366,209	2,800,699
Finished products	4,589,223	2,183,170
Total inventory	11,306,875	7,929,296
Less: inventory reserves	249,838	250,606
Net inventory	$ 11,057,037	$ 7,678,690

XML

Note 5 - Goodwill and Other Intangible Assets, Net (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Amortization of Intangible Assets, Total	$ 179,342	$ 93,592	$ 358,682	$ 187,183
Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)			1 year
Maximum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)			15 years

XML

Note 5 - Goodwill and Other Intangible Assets, Net - Summary of Intangible Assets (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Other intangibles, gross	$ 9,830,000	$ 5,510,000
Less: accumulated amortization	1,917,844	1,559,162
Intangible assets, net	7,912,156	3,950,838
Customer-Related Intangible Assets [Member]
Other intangibles, gross	7,700,000	4,970,000
Noncompete Agreements [Member]
Other intangibles, gross	200,000	200,000
Trademarks [Member]
Other intangibles, gross	$ 1,930,000	$ 340,000

XML

Note 6 - Property, Plant and Equipment, Net (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Depreciation, Total	$ 425,769	$ 375,987	$ 860,453	$ 804,765

XML

Note 6 - Property, Plant and Equipment, Net - Schedule of Property, Plant, and Equipment (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Property Plant and Equipment, Gross	$ 16,238,965	$ 16,016,325
Less: accumulated depreciation	4,482,606	3,622,153
Property plant & equipment, net	11,756,359	12,394,172
Land [Member]
Property Plant and Equipment, Gross	228,872	228,872
Building and Building Improvements [Member]
Property Plant and Equipment, Gross	1,949,370	1,837,009
Machinery and Equipment [Member]
Property Plant and Equipment, Gross	$ 14,060,723	$ 13,950,444

XML

Note 7 - Bank Debt (Details Textual) - USD ($)	Dec. 30, 2019	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jul. 05, 2018
Line of Credit Facility, Remaining Borrowing Capacity		$ 7,700,000	$ 16,300,000
J P Morgan Chase Bank [Member] | Term Debt [Member]
Long-term Debt, Total	$ 6,000,000
Debt Instrument, Periodic Payment, Total	$ 111,111
J P Morgan Chase Bank [Member] | Term Debt [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	0.25%
J P Morgan Chase Bank [Member] | Term Debt [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	2.25%
J P Morgan Chase Bank [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 20,000,000			$ 20,000,000	$ 12,000,000
Line of Credit Facility, Commitment Fee Percentage	0.25%
J P Morgan Chase Bank [Member] | Revolving Credit Facility [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	0.25%
J P Morgan Chase Bank [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	1.75%
J P Morgan Chase Bank [Member] | Letter of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 3,000,000

XML

Note 7 - Bank Debt - Summary of Loan Balances (Details) - Bank Debt [Member] - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Total Bank Debt	$ 15,732,480	$ 7,834,106
Less: current portion	1,333,333	1,333,333
Non-current bank debt	14,399,147	6,500,773
Less: unamortized debt costs	115,730	124,179
Net non-current bank debt	14,283,417	6,376,594
Term Debt [Member]
Total Bank Debt	3,444,444	4,111,111
Line of Credit [Member]
Total Bank Debt	$ 12,288,036	$ 3,722,995

XML

Note 8 - Notes Payable (Details Textual) - USD ($)					6 Months Ended
	Jul. 09, 2019	Jul. 05, 2018	Jul. 01, 2018	Jun. 03, 2016	Jun. 30, 2020	Jun. 30, 2019	Jun. 04, 2020	Dec. 31, 2019	Jul. 01, 2016
Payments to Acquire Businesses, Gross					$ 9,400,000	$ 50,001
CAD Enterprises, Inc. [Member]
Business Combination, Consideration Transferred, Total			$ 21,000,000
Payments to Acquire Businesses, Gross			$ 12,000,000
Conversion of Promissory Note 2 Due to First Francis into Class B Common Stock [Member]
Debt Conversion, Original Debt, Amount	$ 648,000
Debt Conversion, Converted Instrument, Shares Issued (in shares)	100,000
Seller Note [Member] | CAD Enterprises, Inc. [Member]
Debt Instrument, Interest Rate, Stated Percentage		4.00%
Seller Note [Member] | Notes Payable [Member]
Debt Instrument, Face Amount					9,000,000			$ 9,000,000
Paycheck Protection Program CARES Act [Member] | Notes Payable [Member] | Federal Hose [Member]
Debt Instrument, Face Amount					253,071		$ 253,071
Paycheck Protection Program CARES Act [Member] | Notes Payable [Member] | CAD Enterprises, Inc. [Member]
Debt Instrument, Face Amount					1,200,766		$ 1,200,766
First Francis [Member] | Related Party Notes, One [Member] | Notes Payable [Member]
Debt Instrument, Face Amount					2,000,000			2,000,000	$ 2,000,000
First Francis [Member] | Related Party Notes, Two [Member] | Notes Payable [Member]
Debt Instrument, Face Amount					$ 2,768,662			$ 2,768,662	$ 2,768,662
First Francis [Member] | Related Party Notes [Member] | Notes Payable [Member]
Debt Instrument, Interest Rate, Stated Percentage		6.25%
Line of Credit Facility, Interest Rate During Period				4.00%
Debt Instrument, Convertible Option, Maximum Debt Convertible		$ 648,000
Debt Instrument, Convertible, Stock Price Trigger (in dollars per share)		$ 6.48

XML

Note 8 - Notes Payable - Notes Payable (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Less current portion	$ 2,766,221	$ 2,749,459
Notes payable – non-current portion	8,306,832	7,676,697
Notes Payable [Member]
Notes payable	11,073,053	10,426,156
Notes payable	11,073,053	10,426,156
Less current portion	2,766,221	2,749,459
Notes payable – non-current portion	8,306,832	7,676,697
Notes Payable [Member] | Related Party Notes, One [Member] | First Francis [Member]
Notes payable	1,208,046	1,302,776
Notes payable	1,208,046	1,302,776
Notes Payable [Member] | Related Party Notes, Two [Member] | First Francis [Member]
Notes payable	1,098,670	1,248,380
Notes payable	1,098,670	1,248,380
Notes Payable [Member] | Paycheck Protection Program CARES Act [Member] | Federal Hose [Member]
Notes payable	253,071
Notes payable	253,071
Notes Payable [Member] | Paycheck Protection Program CARES Act [Member] | CAD Enterprises, Inc. [Member]
Notes payable	1,200,766
Notes payable	1,200,766
Notes Payable [Member] | Seller Note [Member]
Notes payable	7,312,500	7,875,000
Notes payable	$ 7,312,500	$ 7,875,000

XML

Note 8 - Notes Payable - Notes Payable (Details) (Parentheticals) - Notes Payable [Member] - USD ($)	Jun. 30, 2020	Jun. 04, 2020	Dec. 31, 2019	Jul. 01, 2016
Related Party Notes, One [Member] | First Francis [Member]
Notes payable, face value	$ 2,000,000		$ 2,000,000	$ 2,000,000
Related Party Notes, Two [Member] | First Francis [Member]
Notes payable, face value	2,768,662		2,768,662	$ 2,768,662
Paycheck Protection Program CARES Act [Member] | Federal Hose [Member]
Notes payable, face value	253,071	$ 253,071
Paycheck Protection Program CARES Act [Member] | CAD Enterprises, Inc. [Member]
Notes payable, face value	1,200,766	$ 1,200,766
Seller Note [Member]
Notes payable, face value	$ 9,000,000		$ 9,000,000

XML

Note 9 - Leases (Details Textual)	6 Months Ended
	Jun. 30, 2020
Lessee, Operating and Finance Lease, Renewal Term (Year)	10 years
Minimum [Member]
Operating and Finance Lease, Remaining Term (Year)	2 years
Maximum [Member]
Operating and Finance Lease, Remaining Term (Year)	15 years

XML

Note 9 - Leases - Lease Assets and Liabilities (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Operating lease right-of-use assets, net	$ 8,778,901	$ 9,224,840
Operating Leases (in years) (Year)	11 years	11 years
Operating Leases	5.00%	5.00%
Other Current Liabilities [Member]
Other current liabilities	$ 826,936	$ 850,664
Operating Lease Liabilities [Member]
Operating lease liabilities	8,109,118	8,513,448
Other Current Liabilities and Operating Lease Liabilities [Member]
Total operating lease liabilities	$ 8,936,054	$ 9,364,112

XML

Note 10 - Earnings Per Common Share - Summary of Earnings Per Share Calculation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net Income	$ 228,837	$ 1,831,479	$ 2,304,407	$ 3,576,937
Weighted average shares of common stock outstanding - Basic (in shares)	3,317,665	2,755,916	3,314,573	2,755,764
Earnings Per Share - Basic (in dollars per share)	$ 0.07	$ 0.66	$ 0.70	$ 1.30
Warrants, Options and Convertible Notes (in shares)	1,599	456,882	1,644	440,387
Weighted average shares of common stock -Diluted (in shares)	3,319,264	3,212,798	3,316,217	3,196,151
Earnings Per Share - Diluted (in dollars per share)	$ 0.07	$ 0.57	$ 0.69	$ 1.12

XML

Note 11 - Acquisitions (Details Textual) $ in Millions	Jan. 02, 2020 USD ($)
Assets Acquisition of MPI Products, Inc. [Member]
Business Combination, Consideration Transferred, Total	$ 9.4

XML

Note 11 - Acquisitions - Summary Assets Acquired and Liabilities Assumed of MPI Products (Details) - USD ($)	Jun. 30, 2020	Jan. 02, 2020	Dec. 31, 2019
Goodwill	$ 11,505,852		$ 9,791,745
Assets Acquisition of MPI Products, Inc. [Member]
Accounts Receivable		$ 771,088
Inventory		2,918,255
Fixed Assets		29,581
Prepaid and Other Assets		53,397
Intangibles Assets		4,320,000
Goodwill		1,714,108
Total Assets Acquired		9,806,429
Accrued Expense		406,429
Total Liabilities Assumed		406,429
Net Assets Acquired		$ 9,400,000

XML

Note 12 - Segment and Related Information (Details Textual)	6 Months Ended
	Jun. 30, 2020
Number of Reportable Segments	3

XML

Note 12 - Segment and Related Information - Information by Industry Segment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Sales	$ 18,576,588	$ 24,514,636	$ 43,858,162	$ 46,350,723
Gross Profit	3,499,039	5,226,933	9,707,182	10,056,821
Operating Income	530,520	2,791,553	3,668,669	5,362,624
Pretax Income	307,625	2,481,439	3,076,992	4,810,311
Net Income	228,837	1,831,479	2,304,407	3,576,937
Commercial Air Handling [Member]
Sales	11,848,816	14,880,504	23,302,590	26,625,065
Gross Profit	2,893,541	3,549,109	5,941,342	6,551,042
Operating Income	1,565,482	2,244,680	3,185,251	4,027,667
Pretax Income	1,565,482	2,244,481	3,160,286	4,027,177
Net Income	1,174,113	1,683,361	2,370,215	3,020,384
Aerospace [Member]
Sales	2,587,421	7,457,377	9,843,247	15,477,780
Gross Profit	(499,569)	1,038,395	771,191	2,295,400
Operating Income	(991,953)	414,464	(251,705)	1,174,074
Pretax Income	(1,134,193)	231,296	(548,265)	794,253
Net Income	(850,645)	169,377	(411,199)	593,097
Industrial Hose [Member]
Sales	4,046,814	1,933,725	10,296,535	3,730,816
Gross Profit	1,088,811	592,245	2,851,178	1,117,979
Operating Income	227,498	295,701	893,081	543,989
Pretax Income	88,290	214,536	614,816	407,013
Net Income	62,082	159,385	455,552	302,456
Corporate and Other [Member]
Sales	93,537	243,030	415,790	517,062
Gross Profit	16,256	47,184	143,471	92,400
Operating Income	(270,507)	(163,292)	(157,958)	(383,106)
Pretax Income	(211,954)	(208,874)	(149,845)	(418,132)
Net Income	$ (156,713)	$ (180,644)	$ (110,161)	$ (339,000)