NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(In thousands, except per share data)
GENERAL:
This report includes information in a condensed format and should be read in conjunction with the audited consolidated financial statements and footnotes
included in our Annual Report on Form 10-K for the year ended December 31, 2011. The results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of the results expected for the full year or
any other interim period.
The accompanying condensed consolidated financial statements have been prepared in conformity with generally
accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been condensed, or omitted, pursuant to the rules of the Securities and Exchange Commission. In our opinion, the statements include all adjustments necessary (which are of a normal
recurring nature) for the fair presentation of the results of the interim periods presented.
The balance sheet information at
December 31, 2011 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
1. ORGANIZATION:
Young Innovations, Inc. and its subsidiaries (the Company) develops, manufactures and markets supplies and equipment used
by dentists, dental hygienists, dental assistants and consumers. The Companys product offering includes disposable and metal prophylaxis (prophy) angles, prophy cups and brushes, dental micro-applicators, panoramic X-ray machines,
moisture control products, infection control products, dental handpieces (drills) and related components, endodontic systems, orthodontic toothbrushes, flavored examination gloves, childrens toothbrushes, and childrens toothpastes. The
Companys manufacturing and distribution facilities are located in Missouri, Illinois, California, Indiana, Wisconsin and Ireland.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Young Innovations, Inc. and its direct and indirect wholly owned subsidiaries. All significant intercompany accounts and
transactions are eliminated in consolidation.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those
estimates. Some of the more significant estimates include allowances for doubtful accounts, inventory valuation reserves, evaluation of goodwill for impairment, rebate accruals, warranty reserves, liabilities for incentive compensation, and
uncertain income tax positions.
6
Revenue Recognition
Revenue from the sale of products is recorded at the time title passes, generally when the products are shipped, as the Companys shipping terms are customarily FOB shipping point. Revenue from
the rental of equipment to others is recognized on a month-to-month basis as the revenue is earned. The Company generally requires payment within 30 days from the date of invoice and offers cash discounts for early payment. For certain
acquired businesses that offer different terms, the Company migrates these customers to the terms referred above over time.
The Company
offers discounts to its distributors if certain conditions are met. Customer allowances, volume discounts and rebates, and other short-term incentive programs are recorded as a reduction in reported revenues at the time of sale. The
Company reduces product revenue for the estimated redemption of annual rebates on certain current product sales. Customer allowances and rebates are estimated based on historical experience and known trends.
The policy with respect to sales returns generally provides that a customer may not return inventory, except at the Companys option. The Company
generally warrants its products against defects, and its most generous policy provides a two-year parts and labor warranty on X-ray machines. The Company owns X-ray equipment rented on a month-to-month basis to customers.
The Company complies with the disclosure requirements of ASC Topic 605, Revenue Recognition (that is, gross versus net presentation) for tax
receipts on the face of its income statements. The scope of this guidance includes any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not
limited to, sales, use, value added, and some excise taxes (gross receipts taxes are excluded). The Company presents such taxes on a net basis.
Fair Value of Financial Instruments
Financial instruments consist principally of cash, accounts receivable, notes receivable, accounts payable and debt. The estimated fair value of these
instruments approximates their carrying value.
Income Taxes
The Company uses an estimated annual effective income tax rate to compute the quarterly tax provision pursuant to the Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) 270, Interim Reporting, and ASC 740, Income Taxes. Calculation of the estimated annual effective income tax rate requires significant judgment and is affected by, among others, variances in
expected operating income for the year, projections of income earned and taxed in foreign jurisdictions, variances in non-deductible expenses, and changes in tax rates. The year-to-date effect of the change is recorded in the current
period when the Companys estimate of the annual effective income tax rate changes.
The Company accounts for uncertain tax
positions in accordance with the provisions of ASC 740, Income Taxes. The Company had $37 of unrecognized tax benefits for both periods ending September 30, 2012 and December 31, 2011, respectively. The entire amount of
unrecognized tax benefits would favorably impact the effective income tax rate if recognized. Penalties and interest related to unrecognized tax benefits are included in income tax expense. As of September 30, 2012 and December 31, 2011
the Company had accrued $20 and $21, respectively, of penalties and interest related to uncertain tax positions.
The Company is not aware of
any other tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.
The Company has provided a deferred tax liability for United States income taxes on the undistributed earnings of its foreign subsidiary that will not be permanently invested.
7
The Company and its subsidiaries are subject to domestic federal and state income taxes as well as foreign
income taxes. With certain exceptions, the Company is no longer subject to U.S. federal, state, and local or non-U.S. income tax examinations by tax authorities for years prior to 2008.
Interest Expense, net
Interest expense, net includes interest paid related to borrowings on the Companys credit facility and secured borrowing, as well as interest income earned on various investments and notes
receivable. For the three months ended September 30, 2012 and 2011, interest income totaled $4 and $9, respectively, and $10 and $32 for the nine months ended September 30, 2012 and 2011, respectively. For the three months ended
September 30, 2012 and 2011, interest expense totaled $63 and $58, respectively, and $182 and $209 for the nine months ended September 30, 2012 and 2011, respectively.
Other Income, net
Other (income) expense, net includes foreign currency transaction gain/loss and other miscellaneous income, including realized gains on investments, all of which are not directly related to the
Companys primary business.
The Company realized approximately $0 and $52 of other income related to its private equity investment for
the three months ended September 30, 2012 and 2011, respectively, and $694 and $545 for the nine months ended September 30, 2012 and 2011, respectively.
Supplemental Cash Flow Information
Cash flows from operating activities include $6,113 and $4,240 for the payment of federal, state, and foreign income taxes and $94 and $158 for the
payment of interest or loan charges related to borrowings on the Companys credit facility for the nine months ended September 30, 2012 and 2011, respectively.
Foreign Currency Translation
The translation of financial statements into U.S dollars has been performed in accordance with ASC 830 Foreign Currency Matters. The
local currency for all entities included in the condensed consolidated financial statements has been designated as the functional currency. Non-U.S. dollar denominated assets and liabilities have been translated into U.S. dollars at the rate of
exchange prevailing at the balance sheet date. Revenues and expenses have been translated at the weighted average of exchange rates in effect during the quarter. Translation adjustments are recorded in accumulated other comprehensive
loss. Net currency transaction gains (losses) included in Other income, net were $(19) and $21 for the three months ended September 30, 2012 and 2011, respectively and $(20) and $(16) for the nine months ended September 30, 2012 and
2011, respectively.
3. INVESTMENTS:
On February 21, 2006, the Company invested in a private equity investment fund. At September 30, 2012, the Company has
an unfunded capital commitment of up to $300, with a total capital commitment paid by the Company of $1,950. The Company accounts for its investment using the cost method.
During the third quarter of 2012, the Company received no distributions from its private equity investment. The total year-to-date distributions related to the private equity investment, as of
September 30, 2012 includes the receipt of $1,008 of cash, of which $694 was recognized as investment income. The total carrying value of the private equity investment was $727 and $1,386 as of September 30, 2012 and 2011,
respectively. During the third quarter of 2011, the Company recognized other income of approximately $52.
The Company may receive
additional amounts in the future related to excess funds being released from escrow or a potential additional earn-out based on financial performance of the underlying investment.
8
4. INVENTORIES:
Inventories consist of the following:
|
|
|
|
|
|
|
|
|
|
|
September 30,
2012
|
|
|
December 31,
2011
|
|
Finished products
|
|
$
|
9,710
|
|
|
$
|
9,428
|
|
Work in process
|
|
|
2,961
|
|
|
|
2,870
|
|
Raw materials and supplies
|
|
|
4,954
|
|
|
|
4,863
|
|
|
|
|
|
|
|
|
|
|
Total inventories
|
|
$
|
17,625
|
|
|
$
|
17,161
|
|
|
|
|
|
|
|
|
|
|
5. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment consist of the following:
|
|
|
|
|
|
|
|
|
|
|
September 30,
2012
|
|
|
December 31,
2011
|
|
Land
|
|
$
|
3,411
|
|
|
$
|
3,411
|
|
Buildings and improvements
|
|
|
22,632
|
|
|
|
22,635
|
|
Machinery and equipment
|
|
|
30,059
|
|
|
|
30,115
|
|
Equipment rented to others
|
|
|
2,250
|
|
|
|
3,018
|
|
Construction in progress
|
|
|
1,296
|
|
|
|
431
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
59,648
|
|
|
$
|
59,610
|
|
Accumulated depreciation
|
|
|
28,514
|
|
|
|
27,338
|
|
|
|
|
|
|
|
|
|
|
Total property, plant and equipment, net
|
|
$
|
31,134
|
|
|
$
|
32,272
|
|
|
|
|
|
|
|
|
|
|
9
6. GOODWILL AND INTANGIBLE ASSETS:
Goodwill activity is as follows:
|
|
|
|
|
Balance at December 31, 2011
|
|
$
|
80,254
|
|
Foreign currency translation
|
|
|
(6
|
)
|
|
|
|
|
|
Balance at September 30, 2012
|
|
$
|
80,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2012
|
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
Other intangibles consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
License agreements
|
|
$
|
2,944
|
|
|
$
|
670
|
|
|
$
|
2,274
|
|
Core technology
|
|
|
739
|
|
|
|
307
|
|
|
|
432
|
|
Trademarks
|
|
|
50
|
|
|
|
5
|
|
|
|
45
|
|
Patents
|
|
|
2,270
|
|
|
|
1,613
|
|
|
|
657
|
|
Product formulas
|
|
|
430
|
|
|
|
122
|
|
|
|
308
|
|
Customer relationships
|
|
|
813
|
|
|
|
672
|
|
|
|
141
|
|
Non-compete agreements
|
|
|
519
|
|
|
|
416
|
|
|
|
103
|
|
Supplier relationships
|
|
|
399
|
|
|
|
399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,164
|
|
|
$
|
4,204
|
|
|
$
|
3,960
|
|
Intangible assets not subject to amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
$
|
6,857
|
|
|
$
|
|
|
|
$
|
6,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,857
|
|
|
$
|
|
|
|
$
|
6,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangible assets
|
|
$
|
15,021
|
|
|
$
|
4,204
|
|
|
$
|
10,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2011
|
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
Other intangibles consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
License agreements
|
|
$
|
2,944
|
|
|
$
|
587
|
|
|
$
|
2,357
|
|
Core technology
|
|
|
739
|
|
|
|
274
|
|
|
|
465
|
|
Trademarks
|
|
|
50
|
|
|
|
3
|
|
|
|
47
|
|
Patents
|
|
|
2,270
|
|
|
|
1,509
|
|
|
|
761
|
|
Product formulas
|
|
|
430
|
|
|
|
114
|
|
|
|
316
|
|
Customer relationships
|
|
|
813
|
|
|
|
619
|
|
|
|
194
|
|
Non-compete agreements
|
|
|
519
|
|
|
|
386
|
|
|
|
133
|
|
Supplier relationships
|
|
|
399
|
|
|
|
399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,164
|
|
|
$
|
3,891
|
|
|
$
|
4,273
|
|
Intangible assets not subject to amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
$
|
6,857
|
|
|
$
|
|
|
|
$
|
6,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,857
|
|
|
$
|
|
|
|
$
|
6,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangible assets
|
|
$
|
15,021
|
|
|
$
|
3,891
|
|
|
$
|
11,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
The costs of other intangible assets with finite lives are amortized over their expected useful lives using
the straight-line method. The amortization lives are as follows: 10 to 25 years for patents, certain trademarks, licensing agreements and core technology; 40 years for product formulations; and 5 to 8 years for supplier and customer relationships.
Non-compete agreements are amortized over the length of the signed agreement. The weighted average life for amortizable intangible assets is 16 years. Aggregate amortization expense for the three months ended September 30, 2012 and 2011 was
$122 and $124, respectively, and $379 and $426 for the nine months ended September 30, 2012 and 2011, respectively. Estimated amortization expense for each of the next five years is as follows:
|
|
|
|
|
For the year ending 12/31/12
|
|
$
|
505
|
|
For the year ending 12/31/13
|
|
|
505
|
|
For the year ending 12/31/14
|
|
|
416
|
|
For the year ending 12/31/15
|
|
|
290
|
|
For the year ending 12/31/16
|
|
|
289
|
|
7. CREDIT ARRANGEMENTS AND NOTES PAYABLE:
The Company has a credit facility that allows for aggregate borrowings of $70,000 and expires in July 2016. Borrowings under the
arrangement bear interest at rates ranging from LIBOR +1.25% to LIBOR +1.75% or Prime +0% to Prime +.50%, depending on the Companys level of indebtedness. Commitment fees for this arrangement range from 0.175% to 0.275% of the unused balance.
The agreement is unsecured and contains various financial and other covenants. As of September 30, 2012 and December 31, 2011, the Company was in compliance with these covenants. Also, at September 30, 2012, the Company had no
outstanding borrowing under this agreement and $70,000 available for borrowing.
Long-term debt was as follows:
|
|
|
|
|
|
|
|
|
|
|
September 30,
2012
|
|
|
December 31,
2011
|
|
Revolving credit facility due 2012 with a weighted-average interest of 0% and 3.25% at September 30, 2012 and
December 31, 2011, respectively
|
|
$
|
|
|
|
$
|
650
|
|
Lesscurrent portion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
650
|
|
|
|
|
|
|
|
|
|
|
8. SHARE-BASED COMPENSATION:
The Company adopted the 1997 Stock Option Plan (the 1997 Plan) effective in November 1997 and amended the Plan in 1999 and 2001. A
total of 1,725 shares of Common Stock were reserved for issuance under this plan which is administered by the compensation committee of the Board of Directors (Compensation Committee). The Company adopted the 2006 Long-Term Incentive
Plan (the 2006 Plan) effective in May 2006. The 2006 Plan is intended to be a successor to the 1997 Plan. A total of 700 shares were authorized for grant under the 2006 Plan. Awards under the 2006 Plan may be stock options, stock
appreciation rights, restricted stock, restricted stock units, and other equity awards.
Any employee of the Company or its affiliates, any
consultant whom the Compensation Committee determines is significantly responsible for the Companys success and future growth and profitability, and any member of the Board of Directors, may be eligible to receive awards under the 2006 Plan.
The purpose of the 2006 Plan is to: (a) attract and retain highly competent persons as employees, directors, and consultants of the Company; (b) provide additional incentives to such employees, directors, and consultants by aligning their
interests with those of the Companys shareholders; and (c) promote the success of the Company. The Compensation Committee establishes vesting schedules for each option issued under the Plan. Under the 1997 Plan, outstanding options
generally vested over a period of up to four years while non-vested equity shares vested over five years. Under the 2006 Plan, outstanding options generally vest over a period of up to three years while non-vested equity shares vest over one, two,
three, four and five year periods. All outstanding options expire ten years from the date of grant under the 1997 Plan and five years from the date of grant under the 2006 Plan.
11
Stock Options
During the three months ended September 30, 2012 and 2011, the Company recorded no pre-tax compensation expense related to the Companys stock option shares, and $0 and $6 for the nine months
ended September 30, 2012 and 2011, respectively. The total aggregate intrinsic value of options exercised during the three months ended September 30, 2012 and 2011 was $392 and $829, respectively, and $823 and $1,233 for the nine months
ended September 30, 2012 and 2011, respectively. Payments received upon the exercise of stock options for the three months ended September 30, 2012 and 2011 totaled $1,182 and $1,469, respectively, and $3,252 and $2,230 for the nine months
ended September 30, 2012 and 2011, respectively. The related excess tax benefit realized related to these exercises and restricted stock vesting was $28 and $460 for the three months ended September 30, 2012 and 2011, respectively, and $97
and $963 for the nine months ended September 30, 2012 and 2011, respectively. The Company issues shares from treasury upon share option exercises.
The following table summarizes stock option activity for the nine months ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
Shares
(000)
|
|
|
Weighted-Average
Exercise Price
|
|
|
Weighted-Average Remaining
Contractual Term
|
|
|
Aggregate
Intrinsic Value
($000)
|
|
Outstanding at January 1, 2012
|
|
|
407
|
|
|
$
|
33.54
|
|
|
|
2.50
|
|
|
$
|
120
|
|
Granted
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(107
|
)
|
|
$
|
30.48
|
|
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
|
(16
|
)
|
|
$
|
29.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2012
|
|
|
284
|
|
|
$
|
34.93
|
|
|
|
2.28
|
|
|
$
|
1,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at September 30, 2012
|
|
|
284
|
|
|
$
|
34.93
|
|
|
|
2.28
|
|
|
$
|
1,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the
Companys closing stock price on the last trading day of the third quarter of 2012 and the exercise price, multiplied by the number of in-the-money options).
12
Non-Vested Equity Shares
Under the 2006 Plan, non-vested equity share units and restricted stock may be awarded or sold to participants under terms and conditions established by the Compensation Committee. The Company calculates
compensation cost for restricted stock grants to employees and non-employee directors by using the fair value of its Common Stock at the date of grant and the number of shares issued. This compensation cost is amortized over the applicable vesting
period. The Company recorded pre-tax compensation expense of $457 and $463 for the three months ended September 30, 2012 and 2011, respectively, and $1,367 and $1,389 for the nine months ended September 30, 2012 and 2011, respectively
related to the Companys non-vested equity shares. As of September 30, 2012, there was approximately $3,127 of unrecognized compensation cost related to non-vested equity shares which will be amortized over the weighted-average remaining
requisite service period of 2.42 years. The Company issues share grants from treasury.
The following table details the status and changes in
non-vested equity shares for the nine months ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
Shares(000)
|
|
|
Weighted-Average
Grant Date Fair
Value
|
|
Non-vested equity shares, January 1, 2012
|
|
|
176
|
|
|
$
|
23.79
|
|
Granted
|
|
|
67
|
|
|
$
|
29.60
|
|
Vested
|
|
|
(77
|
)
|
|
$
|
24.02
|
|
Forfeited
|
|
|
(2
|
)
|
|
$
|
28.99
|
|
|
|
|
|
|
|
|
|
|
Non-vested equity shares, September 30, 2012
|
|
|
164
|
|
|
$
|
25.97
|
|
|
|
|
|
|
|
|
|
|
9. RELATED-PARTY TRANSACTIONS:
The Company has an employment agreement with George E. Richmond, the Companys Vice Chairman and principal stockholder, which
includes an annual salary of $100. On May 8, 2012, the agreement was modified to decrease his annual salary from $100 to $50. The Company paid him $13 and $25 during the three months ended September 30, 2012 and 2011 and $58 and $75 for
the nine months ended September 30, 2012 and 2011.
10. EARNINGS PER SHARE:
Basic earnings per share (Basic EPS) is computed by dividing net income by the weighted average number of shares of Common Stock
outstanding during the period. Diluted earnings per share (Diluted EPS) includes the dilutive effect of stock options, if any, using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Net income
|
|
$
|
4,297
|
|
|
$
|
4,100
|
|
|
$
|
12,898
|
|
|
$
|
12,138
|
|
Weighted average shares outstanding for basic earnings per share
|
|
|
7,905
|
|
|
|
8,018
|
|
|
|
7,887
|
|
|
|
8,013
|
|
Dilutive effect of stock options
|
|
|
9
|
|
|
|
23
|
|
|
|
4
|
|
|
|
52
|
|
Weighted average shares outstanding for diluted earnings per share
|
|
|
7,914
|
|
|
|
8,041
|
|
|
|
7,891
|
|
|
|
8,065
|
|
Basic earnings per share
|
|
$
|
0.54
|
|
|
$
|
0.51
|
|
|
$
|
1.63
|
|
|
$
|
1.51
|
|
Diluted earnings per share
|
|
$
|
0.54
|
|
|
$
|
0.51
|
|
|
$
|
1.63
|
|
|
$
|
1.51
|
|
13
11. COMMITMENTS AND CONTINGENCIES:
The Company and its subsidiaries from time to time are parties to various legal proceedings arising in the normal course of business.
Management believes that none of these proceedings, if determined adversely, would have a material adverse effect on the Companys financial position, results of operations or liquidity.
The policy with respect to sales returns generally provides that a customer may not return inventory except at the Companys option, with the exception of X-ray machines. Historically, the level of
product returns has not been significant. The Company generally warrants its products against defects, and its most generous policy provides a two-year parts and labor warranty on X-ray machines. The accrual for warranty costs was $378 and $344 at
September 30, 2012 and 2011, respectively. The following is a roll forward of the Companys warranty accrual:
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
|
(unaudited)
|
|
Balance, beginning of period
|
|
$
|
360
|
|
|
$
|
293
|
|
Accruals for warranties issued during the year
|
|
|
200
|
|
|
|
237
|
|
Warranty settlements made during the year
|
|
|
(182
|
)
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$
|
378
|
|
|
$
|
344
|
|
|
|
|
|
|
|
|
|
|
12. SUBSEQUENT EVENTS:
On October 23, 2012, the Board of Directors declared a quarterly dividend of $0.04 per share, payable December 14, 2012 to
shareholders of record on November 15, 2012.
13. NEW ACCOUNTING STANDARDS:
Adopted Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) NO. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This update
eliminated the option for entities to present components of other comprehensive income (OCI) in a statement of stockholders equity, and now, gives entities the option to present components of net income and other comprehensive income in either
a continuous statement of comprehensive income or two separate but consecutive statements. This update was effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The update also included a
requirement for an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from the other comprehensive income to net income in the statement(s) where the components of net income and
the components of the other comprehensive income are presented. This reclassification requirement was subsequently deferred by ASU No. 2011-12. As such, the Company added a separate but consecutive Statement of Comprehensive Income on page 4 of
this Quarterly Report Form 10-Q.
During 2012, there have been no additional issued or newly applicable accounting pronouncements that have a
significant impact on the Companys financial statements.
14