DELAWARE | 39-1168275 | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
incorporation or organization) |
4129 North Port Washington Avenue, Milwaukee, Wisconsin | 53212 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company þ | |
(Do not check if a smaller reporting company) |
Page | ||||
1 | ||||
Item 1. | Financial Statements |
Three Months Ended | Six Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net sales | $ | 7,229,341 | $ | 7,040,150 | $ | 12,760,603 | $ | 12,509,636 | ||||||||
Cost of goods sold | 4,566,518 | 4,629,843 | 8,451,445 | 8,256,612 | ||||||||||||
Gross profit | 2,662,823 | 2,410,307 | 4,309,158 | 4,253,024 | ||||||||||||
Selling, general and administrative expenses | 2,026,589 | 2,094,746 | 3,829,810 | 4,086,231 | ||||||||||||
Interest expense | 757 | 8,480 | 6,075 | 12,813 | ||||||||||||
Income before income tax | 635,477 | 307,081 | 473,273 | 153,980 | ||||||||||||
Income tax | 248,845 | 141,495 | 187,445 | 83,392 | ||||||||||||
Net income | $ | 386,632 | $ | 165,586 | $ | 285,828 | $ | 70,588 | ||||||||
Income per common share: | ||||||||||||||||
Basic | $ | 0.05 | $ | 0.02 | $ | 0.04 | $ | 0.01 | ||||||||
Diluted | $ | 0.05 | $ | 0.02 | $ | 0.04 | $ | 0.01 | ||||||||
(Unaudited) | ||||||||
December 31, 2015 | June 30, 2015 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,131,411 | $ | 1,000,266 | ||||
Accounts receivable, less allowance for doubtful accounts of $12,929 and $26,052, respectively | 2,514,127 | 2,823,980 | ||||||
Inventories | 7,040,253 | 7,182,440 | ||||||
Prepaid expenses and other current assets | 388,338 | 348,044 | ||||||
Income taxes receivable | 65,055 | 205,531 | ||||||
Deferred income taxes | 1,929,757 | 2,045,316 | ||||||
Total current assets | 14,068,941 | 13,605,577 | ||||||
Equipment and leasehold improvements, net | 1,595,259 | 1,592,520 | ||||||
Other assets: | ||||||||
Deferred income taxes | 1,937,843 | 1,869,253 | ||||||
Cash surrender value of life insurance | 5,621,337 | 5,359,663 | ||||||
Total other assets | 7,559,180 | 7,228,916 | ||||||
Total assets | $ | 23,223,380 | $ | 22,427,013 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,626,636 | $ | 2,172,254 | ||||
Accrued liabilities | 2,440,045 | 1,575,027 | ||||||
Total current liabilities | 4,066,681 | 3,747,281 | ||||||
Long-term liabilities: | ||||||||
Deferred compensation | 2,080,023 | 2,107,486 | ||||||
Other liabilities | 192,421 | 219,227 | ||||||
Total long-term liabilities | 2,272,444 | 2,326,713 | ||||||
Total liabilities | 6,339,125 | 6,073,994 | ||||||
Stockholders' equity: | ||||||||
Common stock, $0.005 par value, authorized 20,000,000 shares; issued and outstanding 7,382,706 shares | 36,914 | 36,914 | ||||||
Paid in capital | 4,872,189 | 4,626,781 | ||||||
Retained earnings | 11,975,152 | 11,689,324 | ||||||
Total stockholders' equity | 16,884,255 | 16,353,019 | ||||||
Total liabilities and stockholders' equity | $ | 23,223,380 | $ | 22,427,013 | ||||
Six Months Ended | ||||||||
December 31 | ||||||||
2015 | 2014 | |||||||
Operating activities: | ||||||||
Net income | $ | 285,828 | $ | 70,588 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
(Recoveries of previously written off) provision for doubtful accounts | (14,179 | ) | 29,304 | |||||
Loss on disposal of fixed assets | 4,987 | 3,359 | ||||||
Depreciation of equipment and leasehold improvements | 251,936 | 328,800 | ||||||
Stock-based compensation expense | 245,408 | 318,491 | ||||||
Deferred income taxes | 46,969 | 138,799 | ||||||
Change in cash surrender value of life insurance | (132,293 | ) | (105,185 | ) | ||||
Change in deferred compensation accrual | 47,537 | 735 | ||||||
Deferred compensation paid | (75,000 | ) | — | |||||
Net changes in operating assets and liabilities (see note 8) | 858,995 | (1,478,298 | ) | |||||
Cash provided by (used in) operating activities | 1,520,188 | (693,407 | ) | |||||
Investing activities: | ||||||||
Life insurance premiums paid | (129,381 | ) | (231,620 | ) | ||||
Purchase of equipment and leasehold improvements | (259,662 | ) | (223,230 | ) | ||||
Cash (used in) investing activities | (389,043 | ) | (454,850 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 1,131,145 | (1,148,257 | ) | |||||
Cash and cash equivalents at beginning of period | 1,000,266 | 1,899,411 | ||||||
Cash and cash equivalents at end of period | $ | 2,131,411 | $ | 751,154 |
December 31, 2015 | June 30, 2015 | |||||||
Raw materials | $ | 5,024,629 | $ | 5,374,333 | ||||
Work-in process | 4,894 | — | ||||||
Finished goods | 6,165,218 | 6,246,072 | ||||||
11,194,741 | 11,620,405 | |||||||
Allowance for obsolete inventory | (4,154,488 | ) | (4,437,965 | ) | ||||
Total inventories | $ | 7,040,253 | $ | 7,182,440 |
December 31, 2015 | June 30, 2015 | |||||||
Cooperative advertising and promotion allowances | $ | 509,836 | $ | 400,114 | ||||
Product warranty obligations | 311,404 | 312,664 | ||||||
Customer credit balances | 1,044,701 | 261,977 | ||||||
Current deferred compensation | 150,000 | 150,000 | ||||||
Accrued returns | 129,009 | 97,026 | ||||||
Employee benefits | 77,501 | 93,568 | ||||||
Legal and professional fees | 61,500 | 70,000 | ||||||
Management bonuses and profit-sharing | 85,837 | 71,381 | ||||||
Sales commissions and bonuses | 52,429 | 68,890 | ||||||
Other | 17,828 | 49,407 | ||||||
$ | 2,440,045 | $ | 1,575,027 |
Six Months Ended | ||||||||
December 31 | ||||||||
2015 | 2014 | |||||||
Accounts receivable | $ | 324,032 | $ | 146,035 | ||||
Inventories | 142,187 | 796,090 | ||||||
Income taxes receivable | 140,476 | 943,945 | ||||||
Prepaid expenses and other current assets | (40,294 | ) | (463,906 | ) | ||||
Accounts payable | (545,618 | ) | (1,240,639 | ) | ||||
Accrued liabilities | 865,018 | (1,578,131 | ) | |||||
Other liabilities | (26,806 | ) | (81,692 | ) | ||||
Net change | $ | 858,995 | $ | (1,478,298 | ) | |||
Net cash paid (refunded) during the period for: | ||||||||
Income taxes | $ | 800 | $ | (988,835 | ) | |||
Interest | $ | 6,075 | $ | 11,821 |
Six Months Ended | ||||||||
December 31 | ||||||||
2015 | 2014 | |||||||
Net income | $ | 285,828 | $ | 70,588 | ||||
Stock-based compensation expense | 245,408 | 318,491 | ||||||
Increase in stockholders' equity | $ | 531,236 | $ | 389,079 |
• | On February 18, 2010, the Company filed an action against American Express Company, American Express Travel Related Services Company, Inc., AMEX Card Services Company, Decision Science, and Pamela S. Hopkins in Superior Court of Maricopa County, Arizona, case no. CV2010-006631. The claims alleged include aiding and abetting breach of fiduciary duty, aiding and abetting fraud, and conversion relating to the unauthorized transactions, as previously reported. The case is proceeding in the Superior Court with respect to those claims. |
• | On December 17, 2010, the Company filed an action against Park Bank in Circuit Court of Milwaukee County, Wisconsin alleging a claim of breach of the Uniform Fiduciaries Act relating to the unauthorized transactions, as previously reported. In 2015, Park Bank filed third party claims based on contribution and subrogation against Grant Thornton LLP and Michael Koss. The Court granted motions to dismiss the contribution claims against Grant Thornton LLP and Michael Koss, but determined that it was premature to decide the subrogation claims at this stage of the proceedings. The case is proceeding in the Circuit Court. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Net sales for the quarter ended December 31, 2015 increased 2.7%, to $7,229,341, compared to the same quarter last year. For the six months ended December 31, 2015, net sales were $12,760,603 compared to $12,509,636 for the same period last year for an increase of 2.0%. Increased sales in certain export markets and one domestic retailer were the primary causes of this improvement. |
• | Gross profit as a percent of sales increased to 36.8% for the three months ended December 31, 2015, compared to 34.2% for the three months ended December 31, 2014, but decreased from 34.0% to 33.8% for the six months ended December 31, 2014 and 2015, respectively. These fluctuations were primarily due to the change in the mix of business by customer and sales channels. |
• | Selling, general and administrative spending was lower primarily due to reduced headcount and lower stock-based compensation expense. |
Three Months Ended | Six Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
Financial Performance Summary | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Net sales | $ | 7,229,341 | $ | 7,040,150 | $ | 12,760,603 | $ | 12,509,636 | ||||||||
Net sales increase (decrease) % | 2.7 | % | 7.9 | % | 2.0 | % | (6.3 | )% | ||||||||
Gross profit | $ | 2,662,823 | $ | 2,410,307 | $ | 4,309,158 | $ | 4,253,024 | ||||||||
Gross profit as % of net sales | 36.8 | % | 34.2 | % | 33.8 | % | 34.0 | % | ||||||||
Selling, general and administrative expenses | $ | 2,026,589 | $ | 2,094,746 | $ | 3,829,810 | $ | 4,086,231 | ||||||||
Selling, general and administrative expenses as % of net sales | 28.0 | % | 29.8 | % | 30.0 | % | 32.7 | % | ||||||||
Interest expense | $ | 757 | $ | 8,480 | $ | 6,075 | $ | 12,813 | ||||||||
Income before income tax | $ | 635,477 | $ | 307,081 | $ | 473,273 | $ | 153,980 | ||||||||
Income before income tax as % of net sales | 8.8 | % | 4.4 | % | 3.7 | % | 1.2 | % | ||||||||
Income tax | $ | 248,845 | $ | 141,495 | $ | 187,445 | $ | 83,392 | ||||||||
Income tax as % of income before income tax | 39.2 | % | 46.1 | % | 39.6 | % | 54.2 | % |
Three Months Ended | Six Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income | $ | 386,632 | $ | 165,586 | $ | 285,828 | $ | 70,588 | ||||||||
Interest expense | 757 | 8,480 | 6,075 | 12,813 | ||||||||||||
Income tax | 248,845 | 141,495 | 187,445 | 83,392 | ||||||||||||
Unauthorized transaction related costs, net | 37,475 | 25,000 | 74,950 | 77,492 | ||||||||||||
Depreciation of equipment and leasehold improvements | 128,431 | 167,147 | 251,936 | 328,800 | ||||||||||||
Stock-based compensation expense | 129,404 | 155,904 | 245,408 | 318,491 | ||||||||||||
EBITDA from operations | $ | 931,544 | $ | 663,612 | $ | 1,051,642 | $ | 891,576 |
Total cash provided by (used in): | 2015 | 2014 | ||||||
Operating activities | $ | 1,520,188 | $ | (693,407 | ) | |||
Investing activities | (389,043 | ) | (454,850 | ) | ||||
Financing activities | — | — | ||||||
Net increase (decrease) in cash and cash equivalents | $ | 1,131,145 | $ | (1,148,257 | ) |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period (2015) | Total # of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan (1) | Approximate Dollar Value of Shares Available under Repurchase Plan | ||||||||||
October 1 - December 31 | — | $ | — | — | $ | 2,139,753 |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
KOSS CORPORATION | ||
/s/ Michael J. Koss | January 29, 2016 | |
Michael J. Koss | ||
Chairman | ||
Chief Executive Officer | ||
/s/ David D. Smith | January 29, 2016 | |
David D. Smith | ||
Executive Vice President | ||
Chief Financial Officer | ||
(Principal Financial and Principal Accounting Officer) | ||
Secretary |
Exhibit No. | Exhibit Description |
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer * |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer * |
32.1 | Section 1350 Certification of Chief Executive Officer ** |
32.2 | Section 1350 Certification of Chief Financial Officer ** |
101 | The following financial information from Koss Corporation's Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Income (Unaudited) for the three and six months ended December 31, 2015 and 2014, (ii) Condensed Consolidated Balance Sheets as of December 31, 2015 (Unaudited) and June 30, 2015 (iii) Condensed Consolidated Statements of Cash Flows (Unaudited) for the three and six months ended December 31, 2015 and 2014 and (iv) the Notes to Condensed Consolidated Financial Statements (Unaudited). * |
* | Filed herewith |
** | Furnished herewith |
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 condensed 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. | I am 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: |
Dated: January 29, 2016 | |
/s/ Michael J. Koss | |
Michael J. Koss | |
Chairman and Chief Executive Officer |
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 condensed 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. | I am 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: |
Dated: January 29, 2016 | |
/s/ David D. Smith | |
David D. Smith | |
Executive Vice President and | |
Chief Financial Officer |
/s/ Michael J. Koss | |
Michael J. Koss | |
Chairman and Chief Executive Officer | |
Dated: January 29, 2016 |
/s/ David D. Smith | |
David D. Smith | |
Executive Vice President and | |
Chief Financial Officer | |
Dated: January 29, 2016 |
Document and Entity Information Document - USD ($) |
6 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Jan. 25, 2016 |
Dec. 31, 2014 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | KOSS CORP | ||
Entity Central Index Key | 0000056701 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-Q | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | Q2 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 7,382,706 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 4,566,606 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Net sales | $ 7,229,341 | $ 7,040,150 | $ 12,760,603 | $ 12,509,636 |
Cost of goods sold | 4,566,518 | 4,629,843 | 8,451,445 | 8,256,612 |
Gross profit | 2,662,823 | 2,410,307 | 4,309,158 | 4,253,024 |
Operating expenses: | ||||
Selling, general and administrative expenses | 2,026,589 | 2,094,746 | 3,829,810 | 4,086,231 |
Interest expense | 757 | 8,480 | 6,075 | 12,813 |
Income before income tax | 635,477 | 307,081 | 473,273 | 153,980 |
Income tax | 248,845 | 141,495 | 187,445 | 83,392 |
Net income | $ 386,632 | $ 165,586 | $ 285,828 | $ 70,588 |
Income (loss) per common share: | ||||
Basic | $ 0.05 | $ 0.02 | $ 0.04 | $ 0.01 |
Diluted | $ 0.05 | $ 0.02 | $ 0.04 | $ 0.01 |
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|
Allowance for doubtful accounts | $ 12,929 | $ 26,052 |
Common stock, par value | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 7,382,706 | 7,382,706 |
Common stock, shares outstanding | 7,382,706 | 7,382,706 |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Notes) |
6 Months Ended |
---|---|
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidated Financial Statements | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated balance sheet of Koss Corporation (the "Company") as of June 30, 2015 have been derived from audited financial statements. The unaudited condensed consolidated financial statements presented herein are based on interim amounts. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made. The operating results for the six months ended December 31, 2015 are not necessarily indicative of the operating results that may be experienced for the full fiscal year ending June 30, 2016. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015. |
INVENTORIES (Notes) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES The components of inventories at December 31, 2015 and June 30, 2015 were as follows:
|
INCOME TAXES (Notes) |
6 Months Ended |
---|---|
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company files income tax returns in the United States federal jurisdiction and in several state jurisdictions. The Company’s federal tax returns for tax years beginning July 1, 2011 or later are open. For states in which the Company files state income tax returns, the statute of limitations is generally open for tax years ended June 30, 2011 and forward. For the six months ended December 31, 2015, the Company recorded an income tax expense of $187,445, compared to an income tax expense of $83,392 for the six months ended December 31, 2014. The Company does not believe it has any unrecognized tax benefits as of December 31, 2015 and as of June 30, 2015. Any changes to the Company’s unrecognized tax benefits as of December 31, 2015, if recognized, would impact the effective tax rate. |
CREDIT FACILITY (Notes) |
6 Months Ended |
---|---|
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Credit Facility | CREDIT FACILITY On May 12, 2010, the Company entered into a secured credit facility (“Credit Agreement”) with JPMorgan Chase Bank, N.A. (“Lender”). The Credit Agreement provided for an $8,000,000 revolving secured credit facility with interest rates either ranging from 0.0% to 0.75% over the Lender’s most recently publicly announced prime rate or 2.0% to 3.0% over LIBOR, depending on the Company’s leverage ratio. The Company pays a fee of 0.3% to 0.45% for unused amounts committed in the credit facility. On July 23, 2014, the Credit Agreement was amended to reduce the facility to $5,000,000, subject to a borrowing base calculation as defined in the Credit Agreement, and to amend certain financial covenants. On July 29, 2015, the Credit Agreement was amended to extend the expiration to July 31, 2016, and to amend certain financial covenants. In addition to the revolving loans, the Credit Agreement also provides that the Company may, from time to time, request the Lender to issue letters of credit for the benefit of the Company of up to a sublimit of $2,000,000 and subject to certain other limitations. The loan may be used only for general corporate purposes of the Company. The Credit Agreement contains certain affirmative, negative and financial covenants customary for financings of this type. The negative covenants include restrictions on other indebtedness, liens, fundamental changes, certain investments, asset sales, sale and leaseback transactions and transactions with affiliates, among other restrictions. The financial covenants include minimum EBITDA and minimum tangible net worth requirements. The Company and the Lender also entered into the Pledge and Security Agreement dated May 12, 2010, under which the Company granted the Lender a security interest in substantially all of the Company’s assets in connection with the Company’s obligations under the Credit Agreement. The Company is currently in compliance with all covenants related to the Credit Facility. As of December 31, 2015, there were no outstanding borrowings on the facility. There were no outstanding borrowings as of June 30, 2015. The Company incurs interest expense primarily related to its secured credit facility. Interest expense was $757 and $6,075 for the three and six months ended December 31, 2015, respectively. Interest expense was $8,480 and $12,813 for the three and six months ended December 31, 2014, respectively. |
ACCRUED LIABILITIES (Notes) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities [Text Block] | ACCRUED LIABILITIES Accrued liabilities for December 31, 2015 and June 30, 2015 were as follows:
|
INCOME (LOSS) PER COMMON AND COMMON STOCK EQUIVALENT SHARE (Notes) |
6 Months Ended |
---|---|
Dec. 31, 2015 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Income (Loss) Per Common and Common Stock Equivalent Share | INCOME PER COMMON AND COMMON STOCK EQUIVALENT SHARE Basic income per share is computed based on the weighted-average number of common shares outstanding. The weighted-average number of common shares outstanding was 7,382,706 for the periods ended December 31, 2015 and 2014. When dilutive, stock options are included in income per share as share equivalents using the treasury stock method. For the periods ended December 31, 2015 and 2014, there were no common stock equivalents related to stock option grants that were included in the computation of the weighted-average number of shares outstanding for diluted income per share. Shares issuable upon the exercise of outstanding options of 2,355,000 and 2,376,555 were excluded from the diluted weighted-average common shares outstanding for the periods ended December 31, 2015 and 2014, respectively, as they would be anti-dilutive. |
STOCK OPTIONS (Notes) |
6 Months Ended |
---|---|
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options | STOCK OPTIONS The Company recognizes stock-based compensation expense for options granted under both the 1990 Flexible Incentive Plan and the 2012 Omnibus Incentive Plan. The stock-based compensation relates to stock options granted to employees, non-employee directors and non-employee consultants. In the six months ended December 31, 2015, options to purchase 410,000 shares were granted under the 2012 Omnibus Incentive Plan at a weighted average exercise price of $2.72. In the six months ended December 31, 2014, options to purchase 445,000 shares were granted under the 2012 Omnibus Incentive Plan at a weighted average exercise price of $3.19. Stock-based compensation expense during the three and six months ended December 31, 2015 was $129,404 and $245,408, respectively. Stock-based compensation expense during the three and six months ended December 31, 2014 was $155,904 and $318,491, respectively. |
ADDITIONAL CASH FLOW INFORMATION (Notes) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Cash Flow Information | ADDITIONAL CASH FLOW INFORMATION The net changes in cash as a result of changes in operating assets and liabilities consist of the following:
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STOCKHOLDERS' EQUITY (Notes) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | STOCKHOLDERS' EQUITY The following table summarizes the changes in stockholders’ equity for the six months ended December 31, 2015 and 2014:
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LEGAL MATTERS (Notes) |
6 Months Ended | ||||||||
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Dec. 31, 2015 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||
Legal Matters | LEGAL MATTERS As of December 31, 2015, the Company is party to the matters described below:
The ultimate resolution of these matters is not determinable unless otherwise noted. |
INVENTORIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | The components of inventories at December 31, 2015 and June 30, 2015 were as follows:
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ACCRUED LIABILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities for December 31, 2015 and June 30, 2015 were as follows:
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ADDITIONAL CASH FLOW INFORMATION (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Cash Flow Information | The net changes in cash as a result of changes in operating assets and liabilities consist of the following:
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STOCKHOLDERS' EQUITY (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | The following table summarizes the changes in stockholders’ equity for the six months ended December 31, 2015 and 2014:
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INVENTORIES (Details) - USD ($) |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,024,629 | $ 5,374,333 |
Work-in process | 4,894 | 0 |
Finished goods | 6,165,218 | 6,246,072 |
Gross inventory | 11,194,741 | 11,620,405 |
Allowance for obsolete inventory | (4,154,488) | (4,437,965) |
Total inventories | $ 7,040,253 | $ 7,182,440 |
INCOME TAXES (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Jun. 30, 2015 |
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Income Tax Disclosure [Abstract] | |||||
Income tax | $ 248,845 | $ 141,495 | $ 187,445 | $ 83,392 | |
Unrecognized tax benefits | 0 | 0 | $ 0 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 0 | $ 0 |
ACCRUED LIABILITIES (Details) - USD ($) |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|
Accrued Liabilities [Abstract] | ||
Cooperative advertising and promotion allowances | $ 509,836 | $ 400,114 |
Product warranty obligations | 311,404 | 312,664 |
Customer credit balances | 1,044,701 | 261,977 |
Current deferred compensation | 150,000 | 150,000 |
Accrued returns | 129,009 | 97,026 |
Employee benefits | 77,501 | 93,568 |
Legal and professional fees | 61,500 | 70,000 |
Management bonuses and profit-sharing | 85,837 | 71,381 |
Sales commissions and bonuses | 52,429 | 68,890 |
Other | 17,828 | 49,407 |
Accrued Liabilities, Current | $ 2,440,045 | $ 1,575,027 |
INCOME (LOSS) PER COMMON AND COMMON STOCK EQUIVALENT SHARE (Details) - shares |
6 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Earnings Per Share, Basic and Diluted [Abstract] | ||
Weighted average number of shares outstanding | 7,382,706 | 7,382,706 |
Common stock equivalents related to stock option grants that were included in the computation of the weighted-average number of shares outstanding | 0 | 0 |
Shares issuable upon the exercise of outstanding options, excluded from the diluted weighted-average common shares outstanding as they would be anti-dilutive | 2,355,000 | 2,376,555 |
STOCK OPTIONS (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Granted (in shares) | 410,000 | 445,000 | ||
Weighted average exercise price of shares granted in period | $ 2.72 | $ 3.19 | ||
Stock-based compensation expense | $ 129,404 | $ 155,904 | $ 245,408 | $ 318,491 |
ADDITIONAL CASH FLOW INFORMATION (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Supplemental Cash Flow Elements [Abstract] | ||
Accounts receivable | $ 324,032 | $ 146,035 |
Inventories | 142,187 | 796,090 |
Income taxes receivable | 140,476 | 943,945 |
Prepaid expenses and other current assets | (40,294) | (463,906) |
Accounts payable | (545,618) | (1,240,639) |
Accrued liabilities | 865,018 | (1,578,131) |
Other liabilities | (26,806) | (81,692) |
Net change | (858,995) | 1,478,298 |
Net cash (refunded) paid during the period for: | ||
Income taxes | 800 | (988,835) |
Interest | $ 6,075 | $ 11,821 |
STOCKHOLDERS' EQUITY (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Stockholders' Equity Attributable to Parent [Abstract] | ||||
Net income | $ 386,632 | $ 165,586 | $ 285,828 | $ 70,588 |
Stock-based compensation expense | $ 129,404 | $ 155,904 | 245,408 | 318,491 |
Increase in stockholders' equity | $ 531,236 | $ 389,079 |
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