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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 4/13/22 Crawford United Corp. 10-K 12/31/21 108:8.3M RDG Filings/FA |
Document/Exhibit Description Pages Size
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM i 10-K
i ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended i December 31, 2021
OR
i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: i 000-000147
CRAWFORD UNITED CORPORATION
(Exact name of registrant as specified in its charter)
i
| Ohio |
| i 34-0288470 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| i 10514 Dupont Avenue, i Cleveland, i Ohio | i 44108 |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number ( i 216) i 243-2614
Securities registered pursuant to
Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
i Class A Common Shares, without par value
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes ☐ i No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ i No ☒
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. i 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). i 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 ☐ |
| i Non-accelerated filer ☒ | Smaller reporting company i ☒ |
| Emerging growth company i ☐ |
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 has filed a report on and attestation to its management’s access of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. (b)) by the registered public accounting firm that prepared or issued its audit report. i ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes i ☐ No ☒
As of June 30, 2021, the Registrant had 2,677,058 voting Class A Common Shares outstanding and 731,848 voting Class B Common Shares outstanding. As of such date, non-affiliates held 1,019,355 Class A Common Shares and 40,056 Class B Common Shares. As of June 30, 2021, based on the closing price of $29.75 per Class A Common Share on the OTC Pik Open Market, the aggregate market value of the Class A Common Shares held by such non-affiliates was approximately $ i 30,325,811. There is no trading market in the Class B Common Shares.
As of March 18, 2022, i 2,708,777 Class A Common Shares and i 731,848 Class B Common Shares were outstanding.
Documents Incorporated by Reference:
Portions of the Registrant’s Definitive Proxy Statement to be filed in connection with its 2022 Annual Meeting of Shareholders are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) of this report.
Except as otherwise stated, the information contained in this Form 10-K is as of December 31, 2021.
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| ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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| ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
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| CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY |
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| ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
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| ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 50 |
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General Development of Business
Crawford United was founded in 1910 and organized in 1915 as an Ohio corporation, and first offered its securities to the public in 1959. Except as otherwise stated, the terms "Company" or "Crawford United" as used herein mean Crawford United and its wholly-owned subsidiaries, CAD Enterprises Inc., Data Genomix LLC, Federal Hose Manufacturing LLC, Crawford AE LLC doing business as Air Enterprises, Marine Products International LLC, Komtek Forge LLC, Global-Tek-Manufacturing LLC, Global-Tek Colorado LLC and Emergency Hydraulics LLC. Crawford United Corporation is a growth-oriented holding company providing specialty industrial products to diverse markets, including healthcare, aerospace, defense, education, transportation, and petrochemical.
The Company operates two reportable business segments: (1) Commercial Air Handling Equipment and (2) Industrial & Transportation Products. 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. Beginning in 2022, the Company will cease allocating corporate costs to the respective segments.
Commercial Air Handling Equipment:
The Commercial Air Handling Equipment 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 and Transportation Products:
The Industrial and Transportation Products 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 purchased all of the issued and outstanding shares of capital stock of CAD Enterprises, Inc.(“CAD”) in Phoenix, Arizona on July 1, 2018. CAD 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. CAD’s quality certifications include ISO 9001:2015/AS9100D, as well as Nadcap accreditation for Fluorescent Penetrant Inspection (FPI), Heat Treating/Braze, Non-Conventional Machining EDM, and TIG/E-Beam welding. The Company added the distribution of marine hose to this segment through the acquisition of the assets of MPI Products, Inc. (“MPI”) on January 2, 2020. MPI specializes in rubber and plastic marine hose for the recreational boating industry. MPI offers certified products that meet marine industry standards and regulations. 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 Company purchased all of the issued and outstanding membership interests of KT Acquisition LLC (name later changed to Komtek Forge LLC), in Worcester, Massachusetts on January 15, 2021. Komtek Forge LLC is a supplier of highly engineered forgings for the aerospace, industrial gas turbine, medical prosthetics, alternative energy, petrochemical and defense industries. The Company purchased all of the membership interests of Global-Tek-Manufacturing LLC (“Global-Tek”), in Ceiba, Puerto Rico and substantially all of the assets of Machining Technology LLC (name later changed to Global-Tek Colorado LLC or “Global-Tek Colorado”) in Longmont, Colorado on March 2, 2021. Global-Tek and Global-Tek Colorado specialize in providing customers with highly engineered manufacturing solutions, including CNC machining, anodizing, electro polishing and laser marking for customers in the defense, aerospace and medical device markets. The Company purchased substantially all of the assets of Emergency Hydraulics LLC (“Emergency Hydraulics”), in Ocala, Florida on July 1, 2021. Emergency Hydraulics provides hydraulic hoses, air tank assemblies and related products to manufacturers of firefighting trucks and other emergency vehicles.
Corporate and Other:
Corporate costs not allocated to the two primary business segments are aggregated here.
Sources and Availability of Raw Materials
Raw materials essential to the business segments are acquired from a large number of domestic manufacturers and some materials are purchased from European and Southeast Asian sources.
The Industrial and Transportation Products segment uses various materials in the manufacture of its products. These include forgings and castings, steel fittings and hose packing consisting of silicone, cotton and copper wire. 5 suppliers provide over 35% of inventory purchases in this segment. If any one of these sources of supply were interrupted for any reason, the Company would need to devote additional time and expense in obtaining the same volume of supply from its other qualified sources.
Aluminum, the major raw material used in construction of the Commercial Air Handling units, is sourced from two major suppliers but is generally readily available from other sources. Copper is used by suppliers of a major component used in the product and the Company maintains relationships with three suppliers of these components to limit vulnerability. The Company maintains relationships with multiple suppliers for most of the other componentry used in assembly of the product, in order to maintain best costs for material and competitive lead times. The majority of materials for this segment are sourced domestically or from Canada.
The Company believes it has adequate sources of supply for its primary raw materials and components and has not had difficulty in obtaining the raw materials, component parts or finished goods from its suppliers.
Importance of Patents, Licenses, Franchises, Trademarks and Concessions
The Company’s Data Genomix LLC subsidiary holds a patent on technology used to facilitate highly targeted advertising to identified audience members across social media channels. Other than the names “Federal Hose”, “Marine Products International”, “CAD Enterprises”, “Global-Tek”, “Komtek Forge”, "Emergency Hydraulics", “Reverso Pumps”, and “Air Enterprises” and the FactoryBilt® and SiteBilt® registered trademarks, the Company does not have any material licenses, franchises or concessions.
Seasonality
In light of the markets served by its products, the Company does not believe that its Commercial Air Handling, Industrial and Transportation Products businesses are seasonal in nature.
Dependence on Customers
For the year ended December 31, 2021, sales to nine customers in the Commercial Air Handling Equipment segment were 14% of consolidated sales of the Company, while sales to nine customers in the Industrial and Transportation Products segment accounted for 34% of consolidated sales of the Company. For the year ended December 31, 2020, sales to three customers in the Commercial Air Handling Equipment segment were 15% of consolidated sales of the Company, while one customer in the Industrial and Transportation Products segment accounted for 33% of consolidated sales of the Company. The Company has long-term contractual relationships with a large customer in the Industrial and Transportation Products segment.
Competitive Conditions
The Company is engaged in highly competitive industries and faces competition from domestic and international firms. Competition in the Industrial and Transportation Products segment comes from domestic and international suppliers. The Company believes that it has a strong competitive position due to its expertise, certifications, long term customer contracts, and reputation for excellent quality. Competition in the Commercial Air Handling segment comes from both custom and non-custom air handling solution manufacturers. The Company believes that it has a strong competitive position due to the high quality and long life of the Company’s customized aluminum air handling solutions.
Number of Persons Employed
Total employment by the Company was 451 full-time employees at December 31, 2021, compared to 260 full-time employees at December 31, 2020.
Available Information
The Company's Internet address is http://www.crawfordunited.com/. Crawford United makes available free of charge on or through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and information statements and amendments and supplements to those reports and statements filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company electronically files such materials with, or furnishes them to, the Securities and Exchange Commission (the "SEC"). The SEC maintains an Internet site that contains these documents at www.sec.gov.
You should carefully consider the risks and uncertainties described below, together with the information included elsewhere in this Annual Report on Form 10-K and other documents we file with the SEC. The risks and uncertainties described below are those that we have identified as material, but are not the only risks and uncertainties facing us. Our business is also subject to general risks and uncertainties that affect many other companies, such as market conditions, economic conditions, geopolitical events, changes in laws, regulations or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected business conditions. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results of operations, liquidity and financial condition.
Company Risk Factors
The COVID-19 pandemic has disrupted our operations and may continue to have a material adverse effect on our business, financial condition and liquidity.
Our business has been, and may continue to be, materially and adversely affected by the COVID-19 pandemic. The pandemic has disrupted our operations and affected our business, and may continue to do so, due to many factors, including imposition by government authorities of mandatory closures, work-from-home orders and social distancing protocols, increased employee absenteeism due to illness and/or quarantine requirements, and other restrictions that could materially adversely affect our ability to adequately staff and maintain our operations. We may experience, in the future, temporary facility closures in response to government mandates in certain jurisdictions in which we operate and in response to positive diagnoses for COVID-19 in certain facilities for the safety of our employees.
The COVID-19 pandemic has also disrupted, and may continue to disrupt, our operations and the operations of our suppliers and may materially adversely impact our ability to secure raw materials, components and supplies for our facilities and to provide personal protective equipment for our employees. There may also be long-term negative effects on the economic well-being of our customers and in the economies of affected countries.
Government actions in response to the COVID-19 pandemic continue to change and evolve. As a result, the jurisdictions in which our products are manufactured and distributed are in varying stages of restrictions. Certain jurisdictions have had to, or may in the future have to, re-establish restrictions due to a resurgence in COVID-19 cases or the development of new strains of COVID-19. Additionally, although the operations of many of our customers have been at least partially restored or increased, such operations may again be limited or closed if a resurgence of COVID-19 cases occurs, new strains of COVID-19 develop, or if efforts to combat COVID-19, including vaccine development or distribution, are ineffective or prolonged. Even as government restrictions have been lifted and economies gradually reopened, the shape of the economic recovery remains uncertain and may continue to negatively impact our 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 or similar outbreak of widespread disease in the future could have a material adverse effect on our ability to operate, results of operations, financial condition and liquidity. In addition, public health restrictions and preventative measures we may voluntarily put in place, may have a material adverse effect on our business for an indefinite period of time, such as the potential shut down of certain locations, decreased employee availability and border closures, among others. The pandemic could cause an increasingly competitive labor market due to sustained labor shortages or increased turnover rates within our employee base. Our suppliers and customers may also face these and other challenges, which could lead to continued disruption in our supply chain, as well as decreased customer demand for our products. These issues may also materially affect our future access to our sources of liquidity, particularly our 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.
The impact of COVID-19 may also exacerbate many of the other risks discussed in this Risk Factors section and throughout this report.
Conditions in the global economy, the particular markets we serve and the financial markets may adversely affect our business and results of operations.
We may experience substantial increases and decreases in business volume throughout economic cycles. Industries we serve, including the heavy-duty truck, industrial equipment, aircraft, health care, education, pharmaceutical, industrial manufacturing, agricultural, marine, and petrochemical industries are sensitive to general economic conditions. Slower global economic growth, inflationary economic conditions, volatility in the currency and credit markets, high levels of unemployment or underemployment, reduced levels of capital expenditures, changes or anticipation of potential changes in government trade, fiscal, tax and monetary policies, public health crises, changes in capital requirements for financial institutions, government deficit reduction and budget negotiation dynamics, sequestration, austerity measures and other challenges that affect the global economy may adversely affect us and our distributors, customers and suppliers, including having the effect of:
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reducing demand for our products, limiting the financing available to our customers and suppliers, increasing order cancellations and resulting in longer sales cycles and slower adoption of new technologies; |
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increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories; |
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increasing price competition in our served markets; |
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Increasing supply, freight and labor costs; |
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supply interruptions, which could disrupt our ability to produce our products; |
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increasing the risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations; and |
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adversely impacting market sizes and growth rates. |
If growth in the global economy or in any of the markets we serve slows for a significant period, if there is significant deterioration in the global economy or such markets or if improvements in the global economy do not benefit the markets we serve, it could have a material adverse effect on our financial condition, liquidity and results of operations.
Significant developments or uncertainties stemming from U.S. laws and policies, including changes in U.S. trade policies, tariffs and the reaction of other countries thereto, could have an adverse effect on our business.
Changes, potential changes or uncertainties in U.S. social, political, regulatory and economic conditions or laws and policies governing foreign trade, manufacturing, and development and investment in the territories and countries where we or our customers operate, could adversely affect our business and financial results. For example, increases in tariffs on certain goods imported into the United States, and substantial changes to the trade agreements, have adversely affected, and in the future could further adversely affect, our business and results of operations. Furthermore, retaliatory tariffs or other trade restrictions on products and materials that we or our customers and suppliers export or import could affect demand for our products. Direct or indirect consequences of tariffs, retaliatory tariffs or other trade restrictions may also alter the competitive landscape of our products in one or more regions of the world. Trade tensions or other governmental action related to tariffs or international trade agreements or policies has the potential to negatively impact our business, financial condition and results of operations.
As a result of Russia’s invasion of Ukraine, the United States, the United Kingdom and the European Union governments, among others, have developed coordinated sanctions packages. As the invasion of Ukraine continues, there can be no certainty regarding whether such governments or other governments will impose additional sanctions or other economic or military measures against Russia. The impact of the invasion of Ukraine, including economic sanctions or additional war or military conflict, as well as potential responses to them by Russia, is currently unknown and they could adversely affect our business, supply chain, suppliers or customers.
Decreased availability or increased costs of materials could increase our costs of producing our products.
We purchase raw materials, fabricated components, some finished goods and services from a variety of suppliers. Where appropriate, we employ contracts with our suppliers, both domestic and international. From time to time, however, the prices, availability, or quality of these materials fluctuate due to global market demands, import duties and tariffs, freight and labor availability and costs, economic conditions, or other conditions such as public health crises, which could impair our ability to procure necessary materials or increase the cost of these materials. Further, inflationary and other increases in costs of materials have occurred and may persist or recur from time to time. In addition, freight costs associated with shipping products and receiving materials are impacted by fluctuations in the cost of oil and gas, shipping capacity and labor shortages. A reduction in the supply, further increases in the cost or changes in quality of those materials could impact our ability to manufacture our products and could increase the cost of production, which could negatively impact our revenues and profitability.
Our growth could suffer if the markets into which we sell our products decline, do not grow as anticipated or experience cyclicality.
Our growth depends in part on the growth of the markets which we serve. Our quarterly sales and profits depend substantially on the volume and timing of orders received during the fiscal quarter, which are difficult to forecast. Any decline or lower than expected growth in our served markets could diminish demand for our products and services, which would adversely affect our financial results. Certain of our businesses operate in industries that may experience seasonality or other periodic, cyclical downturns. Demand for our products is also sensitive to changes in customer order patterns, which may be affected by announced price changes, marketing, new product introductions, changes in distributor or customer inventory levels due to distributor or customer management thereof or other factors. Any of these factors could adversely affect our growth and results of operations in any given period.
Our revolving credit facility contains various covenants limiting the discretion of our management in operating our business, including requiring us to maintain a maximum fixed charge coverage ratio.
Our revolving credit facility contains various restrictive covenants and restrictions, including financial covenants that limit management’s discretion in operating our business. In particular, these instruments limit our ability to, among other things:
| ● |
incur additional debt; |
| ● |
grant liens on assets; |
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make investments, including capital expenditures; |
| ● |
sell or acquire assets outside the ordinary course of business; |
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engage in transactions with affiliates; and |
| ● |
make fundamental business changes. |
The revolving credit facility also requires us to maintain a fixed charge coverage ratio of 1.20 to 1.00. If we fail to comply with the restrictions in the revolving credit facility or any other current or future financing agreements, a default may allow the creditors under the relevant agreements to accelerate the related debts and to exercise their remedies under these agreements, which typically will include the right to declare the principal amount of that debt, together with accrued and unpaid interest, and other related amounts, immediately due and payable, to exercise any remedies the creditors may have to foreclose on assets that are subject to liens securing that debt, and to terminate any commitments they had made to supply further funds. The exercise of any default remedies by our creditors would have a material adverse effect on our ability to finance working capital needs and capital expenditures.
We are dependent on key customers.
We rely on several key customers. For the twelve months ended December 31, 2021, our ten largest customers accounted for approximately 38% of our net sales. For the twelve months ended December 31, 2020, our ten largest customers accounted for approximately 55% of our net sales. Due to competitive issues, we have lost key customers in the past and may again in the future. Customer orders are dependent upon their markets and may be subject to delays or cancellations. As a result of dependence on our key customers, we could experience a material adverse effect on our business and results of operations if any of the following were to occur:
| ● |
the loss of any key customer, in whole or in part; |
| ● |
the insolvency or bankruptcy of any key customer; |
| ● |
a declining market in which customers reduce orders or demand reduced prices; or |
| ● |
a strike or work stoppage at a key customer facility, which could affect both their suppliers and customers. |
If any of our key customers become insolvent or file for bankruptcy, our ability to recover accounts receivable from that customer would be adversely affected and any payments we received in the preference period prior to a bankruptcy filing may be potentially forfeitable, which could adversely impact our results of operations.
Our acquisition of businesses could negatively impact our financial results.
As part of our business strategy we acquire businesses. Acquisitions involve a number of financial, accounting, managerial, operational, legal, compliance and other risks and challenges, including the following, any of which could adversely affect our business and our financial results:
| ● |
any business that we acquire could under-perform relative to our expectations and the price that we paid or not perform in accordance with our anticipated timetable, or we could fail to operate any such business profitably; |
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acquisitions could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term; |
| ● |
pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period-to-period; |
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acquisitions could create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address; |
| ● |
we could experience difficulty in integrating personnel, operations and financial and other controls and systems and retaining key employees and customers; |
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we may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition; or |
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we may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated or internal control deficiencies from the acquired company’s activities and the realization of any of these liabilities or deficiencies may increase our expenses or adversely affect our financial position. |
Future claims, litigation and regulatory actions could adversely affect our financial condition and our ability to conduct our business.
While we strive to ensure that our products comply with applicable government regulatory standards and internal requirements and that our products perform effectively and safely, customers from time to time could claim that our products do not meet contractual requirements, and users could be harmed by use or misuse of our products. This could give rise to breach of contract, warranty or recall claims, or claims for negligence, product liability, strict liability, personal injury or property damage. Product liability insurance coverage may not be available or adequate in all circumstances. In addition, claims may arise related to patent infringement, environmental liabilities, distributor terminations, commercial contracts, antitrust or competition law, employment law and employee benefits issues and other regulatory matters. While we have in place processes and policies to mitigate these risks and to investigate and address such claims as they arise, we cannot predict the underlying costs to defend or resolve such claims.
Our business operations could be significantly disrupted by the loss of any members of our senior management team and segment leaders.
Our success depends to a significant degree upon the continued contributions of our senior management team and segment leaders. Our senior management team has extensive marketing, sales, manufacturing, finance and engineering experience, and we believe that the depth of our management team is instrumental to our continued success. The loss of any of our key managers in the future could significantly impede our ability to successfully implement our business strategy, financial plans, expansion of services, marketing and other objectives.
A significant disruption in, or breach in security of, our information technology systems or data could adversely affect our business, reputation and results of operations.
We rely on information technology systems to process, transmit and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees and customers), and to manage or support a variety of critical business processes and activities (such as receiving and fulfilling orders, billing, collecting and making payments, shipping products and fulfilling contractual obligations). These systems may be damaged, disrupted or shut down due to attacks by computer hackers, computer viruses, ransomware, human error or malfeasance, power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate. Security breaches could result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, customers or suppliers. Our information technology systems may be exposed to computer viruses, malicious codes, unauthorized access and other cyber-attacks and we expect the sophistication and frequency of such attacks to continue to increase. Any of the attacks, breaches or other disruptions or damage described above could interrupt our operations or the operations of our customers, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer and employee relationships and our reputation or result in defective products, legal claims and proceedings, liability and penalties under privacy laws and increased costs for security and remediation, each of which could adversely affect our business, reputation and results of operations.
General Risk Factors
We are engaged in highly competitive industries and if we are unable to compete effectively, we may experience decreased demand and decreased market share.
Our businesses operate in industries that are highly competitive. In order to compete effectively, we must retain longstanding relationships with major customers and continue to grow our business by establishing relationships with new customers, continually developing new products to maintain and expand our brand recognition and position in various product categories and penetrating new markets, including high-growth markets. Our failure to compete effectively and/or pricing pressures resulting from competition may adversely impact our financial results.
Adverse credit market conditions may significantly affect our access to capital, cost of capital and ability to meet liquidity needs.
Disruptions, uncertainty or volatility in the credit markets may adversely impact our ability to access credit already arranged and the availability and cost of credit to us in the future. These market conditions may limit our ability to replace, in a timely manner, maturing liabilities and access the capital necessary to grow and maintain our business. Accordingly, we may be forced to delay raising capital or pay unattractive interest rates, which could increase our interest expense, decrease our profitability and significantly reduce our financial flexibility. Longer-term disruptions in the capital and credit markets as a result of the uncertainty, changing or increased regulation, reduced alternatives or failures of significant financial institutions could adversely affect our access to liquidity needed for our business. Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. Such measures include deferring capital expenditures or other discretionary uses of cash. Overall, our results of operations, financial condition and cash flows could be materially adversely affected by disruptions in the credit markets.
Our business is subject to a variety of domestic and international laws, rules, policies and other obligations regarding data protection.
The processing and storage of certain information is increasingly subject to privacy and data security regulations and many such regulations are country-specific. The interpretation and application of data protection laws in the U.S., Europe and elsewhere, including but not limited to the California Consumer Privacy Act and the General Data Protection Regulation (the “GDPR”), are uncertain, evolving and may be inconsistent among jurisdictions. Complying with these various laws may be difficult and could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. We may be required to expend additional resources to continue to enhance our information privacy and security measures, investigate and remediate any information security vulnerabilities and/or comply with regulatory requirements.
Changes in foreign, cultural, political and financial market conditions could impair the Company’s operations and financial performance.
The economies of foreign countries important to the Company’s operations could suffer slower economic growth or economic, social and/or political instability or hyperinflation in the future. The Company’s international operations, including sourcing operations (and the international operations of the Company’s customers), are subject to inherent risks which could adversely affect the Company, including, among other things:
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protectionist policies restricting or impairing the manufacturing, sales or import and export of the Company’s products, including tariffs and countermeasures; |
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new restrictions on access to markets; |
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lack of developed infrastructure; |
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inflation (including hyperinflation) or recession; |
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devaluations or fluctuations in the value of currencies; |
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changes in and the burdens and costs of compliance with a variety of laws and regulations, including the Foreign Corrupt Practices Act, tax laws, accounting standards, trade protection measures and import and export licensing requirements, environmental laws and occupational health and safety laws; |
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social, political or economic instability; |
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acts of war and terrorism, military conflict and international hostilities, and changes in diplomatic or trade relationships including any retaliatory measures, sanctions, tariffs or other restrictions on commercial activity imposed in response to any acts of war, terrorism or military conflicts; |
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natural disasters or other crises; |
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reduced protection of intellectual property rights; and |
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increases in duties and taxation; |
The foregoing could create uncertainty surrounding the Company’s business and the business of existing and future customers and suppliers, which could increase the cost of some of the Company’s products, thereby reducing its margins. Further, the foregoing risks could have a significant adverse impact on the Company’s ability to commercialize its products on a competitive basis in the international markets and may have a material adverse effect on its business, financial condition, and results of operations. The Company’s small sales volume in some countries, relative to some multinational and local competitors, could exacerbate such risks.
Should any of these risks occur, the Company’s ability to sell or export its products could be impaired; the Company could experience a loss of sales and profitability from its international operations; and/or the Company could experience a substantial impairment or loss of assets, any of which could have a material adverse impact on the Company’s business.
In February 2022, armed conflict escalated between Russia and Ukraine. The sanctions announced by the U.S. and other countries following Russia’s invasion of Ukraine against Russia to date include restrictions on selling or importing goods, services or technology in or from affected regions and travel bans and asset freezes impacting connected individuals and political, military, business and financial organizations in Russia. The U.S. and other countries could impose wider sanctions and take other actions should the conflict further escalate. The current sanctions have had no impact on business operations. It is not possible to predict the broader consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, currency exchange rates and financial markets, all of which could impact our business, financial condition and results of operations.
The elimination of or change in the London Interbank Offered Rate (LIBOR) may adversely affect the interest rates on and value of certain floating rate securities and other instruments that we hold.
LIBOR was a common benchmark interest rate (or reference rate) used to set and make adjustments to interest rates for certain floating rate securities and other financial instruments. Financial institutions are discontinuing the use of LIBOR and adopting alternative reference rates including the Federal Reserve Bank of New York’s Secured Overnight Financing Rate (SOFR), but the acceptance of such alternative rates and their applicability to existing instruments continues to develop. Any uncertainty regarding the continued use and reliability of SOFR and other alternative reference rates as benchmark interest rates could also adversely affect the value of certain floating rate securities, loans and other instruments. The consequences of these cannot be entirely predicted but could result in an increase in the cost of our variable rate indebtedness causing a negative impact on our financial position, liquidity and results of operations. Specifically, the use of an alternative reference rate could result in increased costs, including increased interest expense on our borrowings, and increased borrowing costs in the future.
Unforeseen future events may negatively impact our economic condition.
Future events may occur that would adversely affect the reported value of our assets. Such events may include, but are not limited to, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on our customer base, or a material adverse change in our relationship with significant customers.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not Applicable.
The Company operates facilities in the United States of America and Puerto Rico as shown below:
| LOCATION |
SIZE |
DESCRIPTION |
OWNED OR LEASED |
|||
| Akron, OH |
100,000 Sq. Ft. |
Used for design and manufacturing air handling units and administration |
Leased through 2024, with renewal options extending through 2034. |
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| Ceiba, Puerto Rico |
11,467 Sq. Ft. |
Used for manufacturing and precision machining of industrial components. |
Leased through 2026. |
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| Cleveland, Ohio |
37,000 Sq. Ft. |
Used for corporate administrative headquarters. |
Owned |
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| Eastlake, Ohio |
51,520 Sq. Ft. |
Used for the storage and distribution of marine hose and administration |
Leased through 2022. |
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| Longmont, Colorado |
2,400 Sq. Ft. |
Used for manufacturing and precision machining of industrial components. |
Leased, through 2023. |
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| Ocala, Florida |
7,500 Sq. Ft. |
Used for the storage of hydraulic hose. |
Leased, through 2023. |
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| Ocala, Florida |
3,600 Sq. Ft. |
Used for the storage of hydraulic hose. |
Leased, through 2022. |
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| Davie, Florida |
7,010 Sq. Ft. |
Used for the manufacturing, storage and distribution of fuel pump products and administration. |
Leased, through 2022. |
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| Painesville, Ohio |
50,000 Sq. Ft. |
Used for manufacturing flexible metal hose and administration. |
Leased, through 2026. |
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| Phoenix, Arizona |
71,000 Sq. Ft. |
Used for manufacturing and precision machining of aerospace components. |
Leased through 2022, with renewal options extending through 2026. |
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| Worcester, Massachusetts | 56,706 Sq. Ft. | Used for manufacturing of highly engineered forgings. | Leased through 2033. |
The Company's headquarters and executive offices are located in Cleveland, Ohio. The Company's Industrial and Transportation Products segment utilizes the Phoenix, Arizona, Worcester, Massachusetts, Longmont, Colorado, Ceiba, Puerto Rico, Painesville, Ohio, Eastlake, Ohio, Ocala, Florida and Davie, Florida properties. The Company’s Commercial Air Handling Equipment segment utilizes the Akron, Ohio property.
At the time of filing this Annual Report on Form 10-K, there were no material legal proceedings pending or threatened against the Company.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.
EXECUTIVE OFFICERS OF THE REGISTANT.*
The following is a list of the executive officers of the Company. The executive officers are elected each year and serve at the pleasure of the Board of Directors.
Mr. Brian E. Powers was elected to the Company’s Board of Directors in February 2014. He was appointed Chief Executive Officer on September 1, 2016.
Mr. John P. Daly became Chief Financial Officer on September 8, 2020. Prior to joining the Company, Mr. Daly served as the Director of Financial Planning and Analysis for Park Place Technologies from 2017 to 2020 and as Senior Finance Manager for Beam Suntory from 2012 to 2017.
| OFFICE |
OFFICER |
AGE |
| Chief Executive Officer |
59 |
|
| Chief Financial Officer |
44 |
| ● |
The description of Executive Officers called for in this Item is included pursuant to the instructions to Item 401 of Regulation S-K. |
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
a) MARKET INFORMATION
The Company’s Class A Common Shares are traded on the OTC Pink Open Market under the symbol “CRAWA”. There is no market for the Company’s Class B Common Shares.
The following table sets forth the per share range of high and low bids for the Company’s Class A Common Shares for the periods indicated, as reported by the OTC Pink Open Market. These prices reflect inter-dealer prices without retail mark-up, mark-down or commissions and may not represent actual transactions. Trading on the OTC Pink Open Market is limited and the prices quoted by brokers are not a reliable indication of the value of our common stock.
| Fiscal year ended |
Fiscal year ended |
|||||||||||||||
| HIGH |
LOW |
HIGH |
LOW |
|||||||||||||
| First Quarter |
$ | 30.15 | $ | 17.65 | $ | 22.25 | $ | 10.65 | ||||||||
| Second Quarter |
30.00 | 25.13 | 15.88 | 12.22 | ||||||||||||
| Third Quarter |
35.70 | 29.68 | 15.76 | 14.75 | ||||||||||||
| Fourth Quarter |
35.00 | 28.65 | 23.00 | 14.50 | ||||||||||||
b) HOLDERS
As of March 18, 2022, there were approximately 154 shareholders of record of the Company's outstanding Class A Common Shares and 7 holders of record of the Company's outstanding Class B Common Shares.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Items Affecting the Comparability of our Financial Results
The Company purchased all of the issued and outstanding membership interests of KT Acquisition LLC (name later changed to Komtek Forge LLC “Komtek”), in Worcester, Massachusetts on January 15, 2021.
The Company purchased all of the membership interests of Global-Tek Manufacturing LLC (“Global-Tek”) in Ceiba, Puerto Rico and substantially all of the assets of Machining Technology L.L.C. (name later changed to Global-Tek Colorado LLC or “Global-Tek Colorado”), in Longmont, Colorado on March 2, 2021.
The Company purchased substantially all of the assets of Emergency Hydraulics LLC (“Emergency Hydraulics”) in Ocala, Florida on July 1, 2021.
Accordingly, in light of the timing of these transactions, the Company’s results for the three month and twelve month periods ended on December 31, 2021 include the added results of operations of Komtek, Global-Tek, Global-Tek Colorado and Emergency Hydraulics in the Industrial and Transportation Products segment. Conversely, our results for the three month and twelve-month periods ended December 31, 2020 do not include the results of operations of Komtek, Global-Tek, Global-Tek Colorado and Emergency Hydraulics in the Industrial and Transportation Products segment.
Reportable Segment Information
As of January 1, 2021, the Company elected to report operations for two business segments: (1) Commercial Air Handling Equipment, and (2) Industrial and Transportation Products. The decision to change from three to two reportable business segments was the result of a board-level discussion and was deemed appropriate given the size of the Company. 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.
Commercial Air Handling Equipment:
The Commercial Air Handling Equipment 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 and Transportation Products:
The Industrial and Transportation Products 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 purchased all of the issued and outstanding shares of capital stock of CAD Enterprises, Inc.(“CAD”) in Phoenix, Arizona on July 1, 2018. CAD 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. CAD’s quality certifications include ISO 9001:2015/AS9100D, as well as Nadcap accreditation for Fluorescent Penetrant Inspection (FPI), Heat Treating/Braze, Non-Conventional Machining EDM, and TIG/E-Beam welding. The Company added the distribution of marine hose to this segment through the acquisition of the assets of MPI Products, Inc. (“MPI”) on January 2, 2020. MPI specializes in rubber and plastic marine hose for the recreational boating industry. MPI offers certified products that meet marine industry standards and regulations. 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 Company purchased all of the issued and outstanding membership interests of KT Acquisition LLC (name later changed to Komtek Forge LLC), in Worcester, Massachusetts on January 15, 2021. Komtek Forge LLC is a supplier of highly engineered forgings for the aerospace, industrial gas turbine, medical prosthetics, alternative energy, petrochemical and defense industries. The Company purchased all of the membership interests of Global-Tek-Manufacturing LLC (“Global-Tek”), in Ceiba, Puerto Rico and substantially all of the assets of Machining Technology LLC (name later changed to Global-Tek Colorado LLC or “Global-Tek Colorado”) in Longmont, Colorado on March 2, 2021. Global-Tek and Global-Tek Colorado specialize in providing customers with highly engineered manufacturing solutions, including CNC machining, anodizing, electro polishing and laser marking for customers in the defense, aerospace and medical device markets. The Company purchased substantially all of the assets of Emergency Hydraulics LLC (“Emergency Hydraulics”), in Ocala, Florida on July 1, 2021. Emergency Hydraulics provides hydraulic hoses, air tank assemblies and related products to manufacturers of firefighting trucks and other emergency vehicles.
Corporate and Other:
Corporate costs not allocated to the two primary business segments are aggregated here.
Results of Operations
Year Ended December 31, 2021 Compared with Year ended December 31, 2020
Sales for the year ended December 31, 2021 (“current year”) increased to $104.2 million, an increase of approximately $19.1 million or 22.5% from sales of $85.1 million during the year ended December 31, 2020 (“prior year”). This increase in sales was primarily attributable to a recovery in demand as COVID-19 pandemic-related restrictions loosened and commercial activity increased, in addition to the acquisitions of Komtek, Global-Tek, Global-Tek Colorado and Emergency Hydraulics.
Cost of sales for the current year was $82.2 million compared to $66.1 million in the prior year, an increase of $16.1 million or 24.4%. Gross profit was $21.9 million in the current year compared to $18.9 million in the prior year, an increase of $3.0 million. The increase in cost of sales and gross profit was attributable to a recovery in demand as the COVID-19 pandemic eased, in addition to the acquisitions of Komtek, Global-Tek, Global-Tek Colorado and Emergency Hydraulics. Cost of sales as a percentage of sales was 79.0% in the current year compared to 77.7% in the prior year.
Selling, general and administrative expenses (SG&A) in the current year were $14.9 million, or 14.0% of sales, compared to $11.5 million, or 13.5% of sales, in the prior year. Selling, general and administrative expenses increased as a percentage of sales due primarily as a result of the acquisitions of Komtek, Global-Tek, Global-Tek Colorado and Emergency Hydraulics.
Interest charges in the current year were approximately $0.9 million compared to $1.0 million in 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 were $26.4 million and 2.9% compared to $26.4 million and 3.2% in the same period of last year.
Other income, net was $1.3 million in the current year compared to $1.0 million of other expense, net in the prior year. The increase in other income is primarily driven by the forgiveness in full during the first quarter of 2021 of the $1.5 million in aggregate Payroll Protection Program Loans (“PPP Loans”) accepted by two of the Company’s subsidiaries, in accordance with the terms of the CARES Act. The forgiveness of the PPP loans is treated as income. This increase in other income included $0.2 million of realized gains related to investments in marketable securities partially offset by unrealized losses of $0.2 million related to investments in marketable securities.
Income tax expense in the current year was $1.7 million compared to $1.6 million in the prior year. Income tax expense increased in the current year as a result of adjustments to the state tax rate to more accurately reflect the true state tax expense of the Company on a state by state basis.
Net income for the current year was $5.7 million, or $1.66 per diluted share compared to net income of $5.8 million, or $1.76 per diluted share in the prior year.
Liquidity and Capital Resources
The Company was granted forgiveness in full during the first quarter of 2021 of the $1.5 million in aggregate Payroll Protection Program Loans (“PPP Loans”) accepted by two of the Company’s subsidiaries, in accordance with the terms of the CARES Act.
As described further in Note 16 to the Company’s consolidated financial statements, effective January 15, 2021, the Company completed the Komtek acquisition for a purchase price of $3.6 million, which included the assumption of $1.7 million of debt and the issuance of $1.1 million of Class A common shares.
As described further in Note 16 to the Company’s consolidated financial statements, effective March 1, 2021, the Company completed the Global-Tek and Machining Technology acquisition for a purchase price of $6.4 million, subject to certain post-closing adjustments based on working capital and the achievement of future performance milestones.
As described further in Note 16 to the Company’s consolidated financial statements, effective July 1, 2021, the Company completed the Emergency Hydraulics acquisition for a purchase price of $0.3 million.
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 for a revolving credit facility. On March 2, 2021, the Company amended its Credit Agreement to increase availability under the revolving credit facility to $30.0 million from $20.0 million. The amendment to the loan agreement provided additional flexibility to fund acquisitions, working capital and other strategic initiatives.
Total current assets at December 31, 2021 increased to $42.5 million from $35.2 million at December 31, 2020, an increase of $7.4 million. The increase in current assets is comprised of the following: an increase of accounts receivable of $6.4 million; an increase in inventory of $5.6 million; an increase in refundable tax asset of $1.3 million; an increase in prepaid expenses and other assets of $0.5 million; partially offset by a decrease in cash of $4.7 million; and a decrease in contract assets of $1.6 million. The increases in inventory and accounts receivable were driven primarily by the recent acquisitions of Komtek, Global-Tek, Global-Tek Colorado and Emergency Hydraulics. The Company’s cash balances at December 31, 2021 were lower due to funding those acquisitions.
Total current liabilities at December 31, 2021 increased to $23.9 million from $17.5 million at December 31, 2020, an increase of $6.3 million. The increase in current liabilities is comprised of the following: an increase in accounts payable of $2.2 million; an increase in unearned revenue of $2.1 million; an increase in accrued expenses of $1.2 million; and an increase in contingent liabilities of $0.8 million.
Cash provided by operating activities for the year ending December 31, 2021 was approximately $1.8 million, compared to cash provided by operating activities of $9.9 million in the same period a year ago. Cash provided by operating activities for the year is comprised of the following: net income of $5.7 million; cash provided by adjustments for non-cash items of $2.3 million; and cash used in working capital adjustments of $6.2 million. The primary drivers of decreased working capital for the year were the increase in accounts receivable of $5.3 million, the increase of inventories of $5.4 million in an effort to mitigate recent supply chain disruptions, the increase in prepaid expenses and other assets of $1.8 million and the decrease in accrued income taxes of $0.4 million, all partially offset by the increase in deferred revenue of $2.1 million, the decrease in contract assets of $1.6 million, the increase in accounts payable of $1.8 million and the increase in accrued expenses of $1.0 million.
Cash used in investing activities for the twelve months ended December 31, 2021 was $9.5 million, compared to cash used in investing activities of $10.9 million in the same period a year ago. Cash used in investing activities was for the acquisitions of Komtek, Global-Tek, Global-Tek Colorado and Emergency Hydraulics in the Industrial and Transportation Products segment and capital expenditures in the normal course of business.
Cash provided by financing activities was approximately $3.0 million for the twelve months ended December 31, 2021, compared to cash used by financing activities of $5.0 million in the same period a year ago. Cash provided by financing activities for the year-to-date period was primarily related to: $5.5 million borrowings on bank debt related to the acquisitions of Global-Tek, Machining Technology and Emergency Hydraulics; $1.7 million borrowings related to the acquisition of Komtek; offset by cash used for $1.4 million in payments on bank debt and $2.7 million 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 $13.7 million available to borrow on the revolving credit facility at December 31, 2021. 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, supply chain disruptions, increased costs of supplies and materials, inflationary market conditions, 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.
Off-Balance Sheet Arrangements
From time to time, the Company enters into performance and payment bonds in the ordinary course of business. These bonds are secured by certain assets of the Company by the surety until the Company’s completion of the requirements of the commercial air handling contract. At December 31, 2021, 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 expenditure or capital resources.
Impact of Inflation
Inflationary economic conditions have increased, and may continue to increase, the Company’s costs of producing its products. The Company’s products are manufactured using various metals and other commodity-based materials including steel, aluminum, rubber and silicone. Freight and labor costs also re significant elements of the Company’s production costs. Inflationary economic conditions increase these various costs. If the Company is unable to mitigate inflationary increases through customer pricing actions, alternative supply arrangements or other cost reduction initiatives, its profitability may be adversely affected.
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 duration and scope of the COVID-19 pandemic, the resumption of operations by the Company’s customers, loosening of public health restrictions, or an reimposed restrictions or tightening of public health restrictions which could impact the demand for the Company’s products; (b) shortages in supply or increased costs of necessary products, components or raw materials from the Company’s supplier; (c) availability shortages or increased costs of freight and labor for the Company and/or its suppliers; (d) actions that governments, businesses and individuals take in response to the pandemic, including mandatory business closures and restrictions on onsite commercial interactions; (e) the impact of the pandemic and actions taken in response to the pandemic on global and regional economies and economic activity; (f) the pace of recovery when the COVID-19 pandemic subsides; (g) the Company's ability to effectively integrate acquisitions, and manage the larger operations of the combined businesses, (h) the Company's dependence upon a limited number of customers and the aerospace industry, (i) the highly competitive industry in which the Company operates, which includes several competitors with greater financial resources and larger sales organizations, (j) the Company's ability to capitalize on market opportunities in certain sectors, (k) the Company's ability to obtain cost effective financing and (k) the Company's ability to satisfy obligations under its financing arrangements, 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 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
This item is not applicable to the Company as a smaller reporting company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following pages contain the Financial Statements and Supplementary Data as specified for Item 8 of Part II of Form 10-K.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Crawford United Corporation
Cleveland, Ohio
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Crawford United Corporation (the "Company") as of December 31, 2021 and 2020, and the related consolidated statements of income, stockholders' equity, and cash flows, for the years then ended, and the related notes and schedules (collectively referred to as the "financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Goodwill Impairment Assessment
As described in Note 5 to the consolidated financial statements, the Company’s consolidated goodwill balance was approximately $14.4 million and $11.5 million at December 31, 2021 and 2020, respectively, which is allocated to the Company’s reporting units. Goodwill is tested for impairment at least annually at the reporting unit level. The determination of the fair value requires management to make significant estimates and assumptions related to forecasts of future revenues and operating margins and discount rates. As disclosed by management, changes in these assumptions could have a significant impact on either the fair value of the reporting units, the amount of any goodwill impairment charge, or both.
We identified the goodwill impairment assessment as a critical audit matter. The primary procedures we performed to address this critical audit matter included: a) Testing the effectiveness of controls related to management’s goodwill impairment tests, including controls over the determination of fair value; b) Testing management’s process for determining the fair value; c) Evaluating whether the assumptions used were reasonable by considering past performance and whether such assumptions were consistent with evidence obtained in other areas of the audit.
We are uncertain as to the year we began servicing consecutively as the auditor of the Company’s financial statements; however, we are aware that we have been the Company’s auditor consecutively since at least 1979.
Cleveland, Ohio
CONSOLIDATED BALANCE SHEETS
ASSETS
| 2020 |
||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ | i 1,494,415 | $ | i 6,194,276 | ||||
| Accounts receivable less allowance for doubtful accounts |
i 18,387,744 | i 12,021,692 | ||||||
| Contract assets |
i 2,111,057 | i 3,735,557 | ||||||
| Inventory less allowance for obsolete inventory |
i 16,585,437 | i 11,030,960 | ||||||
| Investments |
i 1,518,244 | i 1,534,400 | ||||||
| Refundable tax asset | i 1,316,595 | i - | ||||||
| Prepaid expenses and other current assets |
i 1,112,068 | i 657,496 | ||||||
| Total Current Assets |
i 42,525,560 | i 35,174,381 | ||||||
| Property, plant and equipment, net |
i 15,609,202 | i 11,290,783 | ||||||
| Operating right of use assets, net |
i 8,998,776 | i 8,856,820 | ||||||
| OTHER ASSETS: |
||||||||
| Goodwill |
i 14,404,618 | i 11,505,852 | ||||||
| Intangibles, net of accumulated amortization |
i 9,336,564 | i 7,558,309 | ||||||
| Other non-current assets |
i 88,591 | i 106,638 | ||||||
| Total Non-Current Other Assets |
i 23,829,773 | i 19,170,799 | ||||||
| Total Assets |
$ | i 90,963,311 | $ | i 74,492,783 | ||||
See accompanying notes to consolidated financial statements
CRAWFORD UNITED CORPORATION
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
| 2020 |
||||||||
| CURRENT LIABILITIES: |
||||||||
| Notes payable - current |
$ | i 2,946,885 | $ | i 2,782,479 | ||||
| Bank debt - current |
i 1,444,444 | i 1,333,333 | ||||||
| Leases payable |
i 1,241,681 | i 1,136,300 | ||||||
| Accounts payable |
i 11,460,364 | i 9,230,032 | ||||||
| Unearned revenue |
i 2,881,535 | i 820,002 | ||||||
| Contingent liability – short term |
i 750,000 | i - | ||||||
| Accrued expenses |
i 3,136,690 | i 2,242,924 | ||||||
| Total Current Liabilities |
i 23,861,599 | i 17,545,070 | ||||||
| LONG-TERM LIABILITIES: |
||||||||
| Notes payable |
i 4,275,377 | i 5,455,717 | ||||||
| Bank debt |
i 16,175,436 | i 12,174,428 | ||||||
| PPP loans |
i - | i 1,453,837 | ||||||
| Leases payable |
i 7,985,628 | i 7,901,357 | ||||||
| Contingent liability – long term |
i 750,000 | i - | ||||||
| Deferred income taxes |
i 3,275,370 | i 2,429,828 | ||||||
| Total Long-Term Liabilities |
i 32,461,811 | i 29,415,167 | ||||||
| STOCKHOLDERS' EQUITY |
||||||||
| Class A 10,000,000 shares authorized, 2,720,787 issued at December 31, 2021 and 2,595,087 issued at December 31, 2020 |
i 5,393,823 | i 3,896,705 | ||||||
| Class B 2,500,000 shares authorized, 914,283 shares issued at December 31, 2021 and 954,283 issues at December 31, 2020 |
i 1,465,522 | i 1,465,522 | ||||||
| Contributed capital |
i 1,741,901 | i 1,741,901 | ||||||
| Treasury shares |
( i 1,981,113 | ) |
( i 1,938,052 | ) |
||||
| Class A – 41,844 shares issued at December 31, 2021 and 39,467 shares issued at December 31, 2020 |
||||||||
| Class B -182,435 shares issued at December 31, 2021 and 182,435 shares issued at December 31, 2020 |
||||||||
| Retained earnings |
i 28,019,768 | i 22,366,470 | ||||||
| Total Stockholders' Equity |
i 34,639,901 | i 27,532,546 | ||||||
| Total Liabilities and Stockholders' Equity |
$ | i 90,963,311 | $ | i 74,492,783 | ||||
See accompanying notes to consolidated financial statements.
CRAWFORD UNITED CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
| Years Ended | ||||||||
| Total Sales | $ | i 104,162,227 | $ | i 85,069,900 | ||||
| Cost of Sales | i 82,249,762 | i 66,138,610 | ||||||
| Gross Profit | i 21,912,465 | i 18,931,290 | ||||||
| Operating Expenses: | ||||||||
| Selling, general and administrative expenses | i 14,922,213 | i 11,478,837 | ||||||
| Operating Income | i 6,990,252 | i 7,452,453 | ||||||
| Other (Income) and Expenses: | ||||||||
| Interest charges | i 881,741 | i 952,192 | ||||||
| PPP loan forgiveness | ( i 1,453,837 | ) | i - | |||||
| Unrealized (gain) loss on investments | i 188,615 | ( i 585,107 |
) | |||||
| Realized gain on investments | ( i 152,761 | ) | i - | |||||
| Other (income) expense, net | i 163,552 | ( i 389,873 |
) | |||||
| Total Other (Income) and Expenses | ( i 372,690 | ) | ( i 22,788 |
) | ||||
| Income before Provision for Income Taxes | i 7,362,942 | i 7,475,241 | ||||||
| Provision for Income Taxes: | ||||||||
| Current | i 1,183,145 | i 1,443,761 | ||||||
| Deferred | i 526,499 | i 192,093 | ||||||
| Total Provision for Income Taxes | i 1,709,644 | i 1,635,854 | ||||||
| Net Income | $ | i 5,653,298 | $ | i 5,839,387 | ||||
| Net Income per Common Share - Basic | $ | i 1.66 | $ | i 1.76 | ||||
| Net Income per Common Share - Diluted | $ | i 1.66 | $ | i 1.76 | ||||
| Weighted Average Shares of Common Stock Outstanding – Basic | i 3,405,061 | i 3,319,731 | ||||||
| Weighted Average Shares of Common Stock Outstanding - Diluted | i 3,405,061 | i 3,320,553 |
| |||||
See accompanying notes to consolidated financial statements
CRAWFORD UNITED CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| COMMON SHARES - NO PAR VALUE | ||||||||||||||||||||||||
| CLASS A | CLASS B | CONTRIBUTED CAPITAL | TREASURY SHARES | RETAINED EARNINGS | TOTAL | |||||||||||||||||||
| Balance at December 31, 2019 | $ | i 3,599,806 | $ | i 1,465,522 | $ | i 1,741,901 | $ | ( i 1,905,780 |
) | $ | i 16,527,083 | $ | i 21,428,532 | |||||||||||
| Share-based compensation expense | i 70,849 | - | - | - | - | i 70,849 | ||||||||||||||||||
| Stock awards | i 226,050 | - | - | - | - | i 226,050 | ||||||||||||||||||
| Repurchase of shares | i - | i - | i - | ( i 32,272 |
) | i - | ( i 32,272 |
) | ||||||||||||||||
| Net income | - | - | - | - | i 5,839,387 | i 5,839,387 | ||||||||||||||||||
| Balance at December 31, 2020 | $ | i 3,896,705 | $ | i 1,465,522 | $ | i 1,741,901 | $ | ( i 1,938,052 |
) | $ | i 22,366,470 | $ | i 27,532,546 | |||||||||||
| Share-based compensation expense | i 46,725 | i - | i - | i - | i - | i 46,725 | ||||||||||||||||||
| Stock awards | i 382,619 | i - | i - | i - | i - | i 382,619 | ||||||||||||||||||
| Stock option exercise | i 8,774 | i - | i | i - | i - | i 8,774 | ||||||||||||||||||
| Acquisition | i 1,059,000 | i - | i | i - | i - | i 1,059,000 | ||||||||||||||||||
| Repurchase of shares | i - | i - | i - | ( i 43,061 |
) | i - | ( i 43,061 |
) | ||||||||||||||||
| Net income | i - | i - | i - | i - | i 5,653,298 | i 5,653,298 | ||||||||||||||||||
| Balance at December 31, 2021 | $ | i 5,393,823 | $ | i 1,465,522 | $ | i 1,741,901 | $ | ( i 1,981,113 |
) | $ | i 28,019,768 | $ | i 34,639,901 | |||||||||||
| 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 | i 2,576,837 | i 954,283 | i 37,208 | i 182,435 | i 2,539,629 | i 771,848 | ||||||||||||||||||
| Stock Awards | i 17,250 | i - | i - | i - | i 17,250 | i - | ||||||||||||||||||
| Stock option exercise | i 1,000 | i - | i - | i - | i 1,000 | i - | ||||||||||||||||||
| Share repurchase | i - | i - | i 2,259 | i - | ( i 2,259 |
) | i - | |||||||||||||||||
| Balance at December 31, 2020 | i 2,595,087 | i 954,283 | i 39,467 | i 182,435 | i 2,555,620 | i 771,848 | ||||||||||||||||||
| Stock Awards | i 23,700 | i - | i - | i - | i 23,700 | i - | ||||||||||||||||||
| Stock option exercise | i 2,000 | i - | i - | i - | i 2,000 | i - | ||||||||||||||||||
| Acquisition | i 60,000 | i - | i - | i - | i 60,000 | i - | ||||||||||||||||||
| Stock conversion | i 40,000 | ( i 40,000 |
) | i - | i - | i 40,000 | ( i 40,000 |
) | ||||||||||||||||
| Share repurchase | i - | i - | i 2,377 | i - | ( i 2,377 |
) | i - | |||||||||||||||||
| Balance at December 31, 2021 | i 2,720,787 | i 914,283 | i 41,844 | i 182,435 | i 2,678,943 | i 731,848 | ||||||||||||||||||
See accompanying notes to consolidated financial statements
CRAWFORD UNITED CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
| Years Ended | ||||||||
| Cash Flows from Operating Activities | ||||||||
| Net Income | $ | i 5,653,298 | $ | i 5,839,387 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | i 2,986,599 | i 2,458,593 | ||||||
| Non-cash share-based compensation expense | i 429,344 | i 296,899 | ||||||
| Non-cash acquisition of intangibles | ( i 481,046 | ) | i - | |||||
| Unrealized (gain) loss on investments in equity securities | i 188,615 | ( i 585,107 | ) | |||||
| Forgiveness of PPP loan | ( i 1,453,837 | ) | i - | |||||
| Deferred income taxes | i 702,061 | i 222,094 | ||||||
| Changes in assets and liabilities: | ||||||||
| Decrease (Increase) in accounts receivable | ( i 5,307,593 | ) | i 2,751,191 | |||||
| Decrease (Increase) in inventories | ( i 5,381,275 | ) | ( i 434,014 |
) | ||||
| Decrease (Increase) in contract assets | i 1,624,500 | ( i 1,313,178 |
) | |||||
| Decrease (Increase) in prepaid expenses & other assets | ( i 1,752,084 | ) | i 80,311 | |||||
| Decrease (Increase) in right of use asset | ( i 141,956 | ) | i 368,020 | |||||
| Increase (Decrease) in accounts payable | i 1,757,213 | i 2,752,081 | ||||||
| Increase (Decrease) in lease liability | i 189,652 | i | ||||||
| Increase (Decrease) in accrued expenses | i 705,576 | ( i 1,364,976 |
) | |||||
| Increase (Decrease) in unearned revenue | i 2,061,533 | ( i 1,178,576 |
) | |||||
| Total adjustments | ( i 3,872,698 | ) | i 4,053,338 | |||||
| Net Cash Provided by Operating Cash Activities | $ | i 1,780,600 | $ | i 9,892,725 | ||||
| Cash Flows from Investing Activities | ||||||||
| Consideration paid for acquisitions | $ | ( i 6,138,102 | ) | $ | ( i 9,400,000 |
) | ||
| Capital expenditures | ( i 3,144,503 | ) | ( i 574,315 |
) | ||||
| Purchase of equity securities | ( i 295,528 | ) | ( i 949,293 | ) | ||||
| Sale of equity securities | i 123,069 | i - | ||||||
| Net Cash Used in Investing Activities | ( i 9,455,064 | ) | ( i 10,923,608 |
) | ||||
| Cash Flows from Financing Activities | ||||||||
| Borrowings on PPP loans | i - | i 5,133,220 | ||||||
| Payments on related party notes | ( i 2,745,023 | ) | ( i 2,187,960 |
) | ||||
| Borrowings on related party notes | i 1,702,400 | i - | ||||||
| Repayment of PPP loans | i - | ( i 3,679,383 |
) | |||||
| Borrowings on bank debt | i 5,485,697 | i 12,152,802 | ||||||
| Payments on bank debt | ( i 1,434,184 | ) | ( i 6,393,747 |
) | ||||
| Share repurchase | ( i 43,061 | ) | ( i 32,272 |
) | ||||
| Proceeds from options and warrants | i 8,774 | i - | ||||||
| Net Cash Provided by Financing Activities | i 2,974,603 | i 4,992,660 | ||||||
| Net Increase (Decrease) in cash and cash equivalents | ( i 4,699,861 | ) | i 3,961,777 | |||||
| Cash and cash equivalents at beginning of year | i 6,194,276 | i 2,232,499 | ||||||
| Cash and cash equivalents at end of year | $ | i 1,494,415 | $ | i 6,194,276 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Interest paid | $ | i 743,901 | $ | i 831,654 | ||||
| Income taxes paid | $ | i 2,582,700 | $ | i 956,246 | ||||
| Supplemental disclosures of noncash financing activity | ||||||||
| Forgiveness of PPP loan | $ | i 1,453,837 | $ | i - | ||||
| Supplemental disclosures of noncash investing activity | ||||||||
| Issuance of Class A common shares in business acquisitions | $ | i 1,059,000 | $ | i - | ||||
| Assets, net of liabilities assumed in business acquisitions | $ | i 2,752,404 | i - | |||||
| Assumption of debt for business acquisitions | $ | i 2,041,116 | i - | |||||
See accompanying notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CRAWFORD UNITED CORPORATION
DECEMBER 31, 2021 AND 2020
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for financial information and with the instructions to Form 10-K and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Principles of Consolidation
The consolidated financial statements include the accounts of Crawford United and its wholly-owned domestic subsidiaries. Significant intercompany transactions and balances have been eliminated in the financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
New Accounting Standards Adopted
None.
New Accounting Standards Not Yet Adopted
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 will be effective for smaller reporting companies beginning after December 15, 2022.
Concentration of Credit Risk
The Company sells its products and services primarily to customers in the United States of America and to a lesser extent overseas. All sales are made in U.S. dollars. The Company extends normal credit terms to its customers. For the year ended December 31, 2021, sales to nine customers in the Commercial Air Handling Equipment segment were i 14%
of consolidated sales of the Company, while sales to nine customers in the Industrial and Transportation Products segment accounted for i 34% of consolidated sales. For the year ended December 31, 2020, sales to three
customers in the Commercial Air Handling Equipment segment were i 15% of consolidated sales of the Company, while one customer in the Industrial and Transportation Products segment accounted for i 33%
of consolidated sales.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that may affect the reported amounts of certain assets and liabilities and disclosure of contingencies at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments
Accounting for "Financial Instruments" requires the Company to disclose estimated fair values of financial instruments. Financial instruments held by the Company include, among others, accounts receivable, accounts payable, and notes payable. The carrying amounts reported in the consolidated balance sheet for assets and liabilities qualifying as financial instruments is a reasonable estimate of fair value.
Fair Value Measurements
As defined in FASB ASC 820, "Fair Value Measurements", fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable firm inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the examination of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
| * | Level 1: Quoted market prices in active markets for identical assets or liabilities. |
| * | Level 2: Inputs to the valuation methodology include: * Quoted prices for similar assets or liabilities in active markets; |
| * | Quoted prices for identical assets or similar assets or liabilities in inactive markets; |
| * | Inputs other than quoted prices that are observable for the asset or liability; |
| * | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. * Level 3: Unobservable inputs that are not corroborated by market data. |
| * | Level 3: Unobservable inputs that are not corroborated by market data. |
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.
Stock: The stock market value is based on valuation of market quotes from independent active market sources, and is considered a level 1 investment.
Revenue Recognition
The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers”. The core principle of the revenue standard is that a company should recognize revenue by analyzing the following five steps; (1) Identify the contract with the customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue when (or as) each performance obligation is satisfied. The Company primarily receives fixed consideration for sales of product. The Company does not have any significant financing components as payment is received at or shortly after the point of sale. Costs incurred to obtain a contract will be expensed as incurred when the amortization period is less than a year. Shipping and handling amounts paid by customers are included in revenue. Sales tax and other similar taxes are excluded from revenue.
Contract Performance Obligations:
To determine proper revenue recognition, the Company evaluates whether two or more contracts should be combined and accounted for as a single contract and whether a combined or single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment, and the decision to combine contracts or separate a combined or single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. Contracts are considered to contain a single performance obligation if the promise to transfer individual goods or services is not separately identifiable from other promises in the contracts primarily because the Company provides a significant service of integrating a complex set of tasks and components into a single project or capability. Contracts that cover multiple performance phases of the product lifecycle (development, construction, maintenance and support) are typically considered to have multiple performance obligations even when they are part of a single contract.
The Company provides warranties, as well as limited workmanship warranties, to customers. These warranties are included in the sale, and do not provide customers with a service in addition to assurance of compliance with agreed upon specifications. The Company does not consider these assurance-type warranties to be separate performance obligations.
Construction Contracts
The Company recognizes revenue on construction contracts over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. The customer typically controls the work in process, as evidenced by the contract. The Company’s construction contracts are generally accounted for as a single performance obligation, since the Company is providing a significant service of integrating components into a single project. The Company recognizes revenue using a cost-based input method, by which actual costs incurred relative to total estimated contract costs determine, as a percentage, progress toward contract completion. This percentage is applied to the transaction price to determine the amount of revenue to recognize. The Company believes the cost-based input method is the best depiction of performance, because it directly measures the value of the services transferred to the customer. Revenues on uninstalled materials are recognized when control is transferred to the customer, which does not necessarily equate to when the cost is incurred.
If based on a lack of reliable information, progress cannot be reasonably measured, recognition of revenues (but not costs) is deferred until progress can be reliably measured. If, however, the Company expects that total costs will be recovered, revenues are recognized equal to costs incurred until the Company can reliably measure progress. There were no contracts that were unable to be reasonably measured at December 31, 2021 and 2020.
Revenues on uninstalled materials are recognized when control is transferred to the customer, which does not necessarily equate to when the cost is incurred. Under limited circumstances (e.g., transfer of control occurs significantly after services are provided, the cost of the materials is significant), revenue is recognized, but no profit is recognized, on certain uninstalled third-party materials when the cost is incurred.
Because the Company almost always acts as a principal in contracts, revenues are recognized gross. The Company is considered the principal because the Company controls the contractually specified goods and services before they are transferred to the customer. The payment terms of the Company’s construction contracts from time to time require the customer to make advance payments as well as interim payments as work progresses. The advance payment generally is not considered a significant financing component as the Company expects to recognize those amounts in revenue within a year of receipt as work progresses on the related performance obligation.
The payment terms of the Company’s construction contracts from time to time require the customer to make advance payments as well as interim payments as work progresses. The advance payment generally is not considered a significant financing component as the Company expect to recognize those amounts in revenue within a year of receipt as work progresses on the related performance obligation.
Contract Assets
Contract assets are related to the Commercial Air Handling segment. A contract asset is recorded when revenue is recognized in advance of the right to receive consideration (i.e., the Company must perform additional services in order to receive consideration). Amounts are recorded as receivables when the right to consideration is unconditional. When consideration is received, or the Company has an unconditional right to consideration in advance of delivery of goods or services, a contract liability would be recorded.
Contract Estimates
Due to the nature of the Company’s performance obligations, the estimation of total revenue and cost at completion is subject to many variables and requires significant judgment. Since a significant change in one or more of these variables could affect the profitability of contracts, the Company reviews and updates contract-related estimates regularly through a review process in which the Company reviews the progress and execution of performance obligations and the estimated cost at completion.
The Company recognizes adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, a provision for the entire loss is recognized in the period it is identified.
Contract Modifications
Contract modifications are routine in the performance of the Company’s contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.
Variable Consideration
The nature of the Company’s contracts can give rise to several types of variable consideration, including claims, unpriced change orders, and liquidated damages and penalties. The Company recognizes revenue for variable consideration when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company estimates the amount of revenue to be recognized on variable consideration using the expected value (i.e., the sum of a probability-weighted amount) or the most likely amount method, whichever is expected to better predict the amount.
Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on assessment of legal enforceability, past performance, and all information (historical, current, and forecasted) that is reasonably available to the Company.
Cost and Expense Recognition
Contract costs include all direct labor, materials, subcontractor, and equipment costs, and those indirect costs related to contract performance, such as indirect labor, tools and supplies. For construction contracts, costs are generally recognized as incurred. Under certain circumstances, costs incurred in the period related to future activity on contracts may be capitalized.
Costs incurred that do not contribute to satisfying performance obligations are excluded from the cost input calculation for revenue recognition. Excluded costs include both uninstalled materials and abnormal costs. Abnormal costs comprise wasted materials, wasted or rework labor and other resources to fulfill a contract that were not reflected in the price of the contract. A limited allowance for material overages and labor inefficiencies is typically included in our contract costs estimates (and by extension in the contract price).
For construction contracts, when it is probable that the total contract costs will exceed total contract revenues, a provision for the estimated expected loss is recorded. As long-term contracts extend over one or more years, revisions in costs and profits estimated during the course of the work are reflected in the accounting period in which the facts requiring the changes become known. Contracts which are substantially complete are considered closed for financial statement purposes.
Unearned Revenue
Unearned revenue consists of customer deposits and contract liabilities related to the Commercial Air Handling Equipment segment.
Disaggregation of Revenue
Revenue earned over time compared to at a point in time is as follows for the years ended December 31, 2021 and 2020.
i
| 2020 | ||||||||
| Earned over time | $ | i 39,786,609 | $ | i 43,391,176 | ||||
| Point in time | i 64,375,618 | i 41,678,724 | ||||||
| Total revenue | i 104,162,227 | $ | i 85,069,900 | |||||
Deferred Commissions
Commissions are earned based on the status of the contract. Commissions are paid upon receipt of payment for units shipped.
Product Warranties
The Company provides a warranty for its custom air handling business covering parts for 12 months from startup or 18 months from shipment, whichever comes first. The warranty reserve is maintained at a level which, in management’s judgment, is adequate to absorb potential warranties incurred. The amount of the reserve is based on management’s knowledge of the contracts and historical trends. Because of the uncertainties involved in the contracts, it is reasonably possible that management’s estimates may change in the near term. However, the amount of change that is reasonably possible cannot be precisely estimated at this time.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. From time to time the Company maintains cash balances in excess of the FDIC limits.
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.
Inventory
Inventory is valued at the lower of cost (first-in, first-out) or net realizable value. The Company establishes reserves for excess and obsolete inventory based upon historical inventory usage trends and other information.
Property, Plant and Equipment
Property, plant and equipment are carried at cost. Maintenance and repair costs are expensed as incurred. Additions and betterments are capitalized. The depreciation policy of the Company is generally as follows:
i
| Class | Method | Estimated Useful Lives (years) | |||||
| Buildings & Improvements | Straight-line | 10 | to | 40 | |||
| Machinery and equipment | Straight-line | 3 | to | 20 | |||
Valuation of Long-Lived Assets
Long-lived assets such as property, plant and equipment and software are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected future undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying value of the asset.
Shipping and Handling Costs
Shipping and handling costs are classified as cost of product sold.
Income Taxes
The provision for income taxes is computed on domestic financial statement income. Where transactions are included in the determination of taxable income in a different year, deferred income tax accounting is used.
The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus any change in deferred taxes during the year. Deferred taxes result from differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The company is currently undergoing an IRS audit of the 2018 tax return and there are only two remaining analysis items pending in order for the IRS to conclude the audit.
Income per Common Share
Income per common share information is computed on the weighted average number of shares outstanding during each period.
Reclassifications:
Certain 2020 financial information has been reclassified to conform to the 2021 presentation.
/
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 $ i 75,930 and $ i 19,973 at December 31, 2021 and 2020, respectively.
/
Inventory is valued at the lower of cost (first-in, first-out) or net realizable value and consist of the following:
i
| 2021 | 2020 | |||||||
| Raw materials and component parts | $ | i 3,904,865 | $ | i 3,897,133 | ||||
| Work-in-process | i 3,949,647 | i 3,449,252 | ||||||
| Finished products | i 9,183,532 | i 3,999,920 | ||||||
| Total Inventory | i 17,038,044 | i 11,346,305 | ||||||
| Less: Inventory reserves | i 452,607 | i 315,345 | ||||||
| Net Inventory | $ | i 16,585,437 | $ | i 11,030,960 | ||||
5. GOODWILL AND OTHER INTANGIBLE ASSETS
Impairment testing
U.S. GAAP requires that both indefinite-lived intangible assets and goodwill are tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not (i.e., a likelihood greater than 50%) that the intangible asset or the reporting unit is impaired. During interim periods, ASC 350 requires companies to focus on those events and circumstances that affect the significant inputs used to determine the fair value of the asset group or reporting unit to determine whether an interim quantitative impairment test is requires.
The Company performed its annual impairment test for goodwill and intangible assets as of the last day of the fourth quarter. The Company first assessed certain qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible assets is less than its carrying amount, and whether it is therefore necessary to perform the quantitative impairment test. For CAD Enterprises, the Company performed a quantitative impairment test, including a discounted cash flow model and peer comparison. As a result of the impairment testing, it was determined that no indefinite-lived intangible assets or goodwill was impaired.
Intangible assets relate to the purchase of businesses. Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill increased related to acquisitions by approximately $ i 2.9 million and $ i 1.7 million, during 2021 and 2020, respectively (see note 15). Goodwill is not amortized, but is reviewed on an annual basis for impairment. Amortization of other intangible assets is calculated on a straight-line basis over periods ranging from one year to i 15 years. Intangible assets consist of the following:
i
| 2021 | 2020 | |||||||
| Customer Intangibles | $ | i 8,741,000 | $ | i 7,700,000 | ||||
| Non-Compete Agreements | i 200,000 | i 200,000 | ||||||
| Trademarks | i 3,599,149 | i 1,930,000 | ||||||
| Total Other Intangibles | i 12,540,149 | i 9,830,000 | ||||||
| Less: Accumulated Amortization | i 3,203,585 | i 2,271,691 | ||||||
| Other Intangibles, Net | $ | i 9,336,564 | $ | i 7,558,309 | ||||
Intangible amortization expense was as follows:
i
| 2021 | 2020 | |||||||
| Accumulated amortization at the beginning of the period | $ | i 2,271,691 | $ | i 1,559,162 | ||||
| Amortization expense | i 931,894 | i 712,529 | ||||||
| Accumulated amortization at end of period | $ | i 3,203,585 | $ | i 2,271,691 | ||||
Intangible amortization for the next five years is as follows:
i
| Amortization in future periods | ||||
| 2022 | i 993,581 | |||
| 2023 | i 976,915 | |||
| 2024 | i 976,915 | |||
| 2025 | i 976,915 | |||
| 2026 | i 902,900 | |||
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:
i
| 2021 | 2020 | |||||||
| Land | $ | i 231,034 | $ | i 228,872 | ||||
| Buildings and Improvements | i 2,961,431 | i 2,061,887 | ||||||
| Machinery & Equipment | i 21,612,759 | i 14,329,462 | ||||||
| Total Property, Plant & Equipment | i 24,805,224 | i 16,620,221 | ||||||
| Less: Accumulated Depreciation | i 9,196,022 | i 5,329,438 | ||||||
| Property Plant & Equipment, Net | $ | i 15,609,202 | $ | i 11,290,783 | ||||
Depreciation expense for the years ended December 31, 2021 and 2020 was $ i 2,059,157 and $ i 1,707,285, respectively.
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7. INVESTMENTS IN EQUITY SECURITIES
Investments in equity securities as of December 31, 2021 and 2020 are summarized in the table below:
i
| BALANCE AT BEGINNING OF YEAR | ACQUISITIONS, DISPOSITIONS AND SETTLEMENTS | UNREALIZED GAINS INCLUDED IN EARNINGS | REALIZED GAINS INCLUDED IN EARNINGS | BALANCE AT DECEMBER 31 | |||||||||||||||
| 2020 | $ | i - | $ | i 949,293 | $ | i 585,107 | $ | i - |
| $ | i 1,534,400 | ||||||||
|
| |||||||||||||||||||
| 2021 | $ | i 1,534,400 | $ | i 19,698 | $ | ( i 188,615 | ) | $ | i 152,761 | $ | i 1,518,244 | ||||||||
Unrealized gains (losses) on equity securities were ($ i 188,615) and $ i 585,107 for the years ending December 31, 2021 and December 31, 2020 respectively. Realized gains (losses) on equity securities were $ i 152,761 and $ i 0 for the years ending December 31, 2021 and December 31, 2020 respectively.
Investments by fair value level in the hierarchy as of December 31, 2021 are as follows:
i
| Quoted Market Prices in Attractive Markets (Level 1) | Models with Significant Observable Market Parameters (Level 2) | Unobservable Inputs that are not Corroborated by Market Data (Level 3) | Total Carrying Value in the Balance Sheet | |||||||||||||
| Common stock | $ | i 1,518,244 | $ | i - | $ | i - | $ | i 1,518,244 | ||||||||
Investments by fair value level in the hierarchy as of December 31, 2020 are as follows:
| Quoted Market Prices in Attractive Markets (Level 1) | Models with Significant Observable Market Parameters (Level 2) | Unobservable Inputs that are not Corroborated by Market Data (Level 3) | Total Carrying Value in the Balance Sheet | |||||||||||||
| Common stock | $ | i 1,534,400 | $ | i - | $ | i - | $ | i 1,534,400 | ||||||||
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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”). As amended, the Credit Agreement is comprised of a revolving facility in the amount of $ i 12,000,000, subject to a borrowing base (determined based on i 80% of Eligible Accounts, plus i 50% of Eligible Progress Billing Accounts, plus i 50% of Eligible Inventory, minus Reserves, each as defined in the Credit Agreement) and a term A loan in the amount of $ i 6,000,000. Outstanding borrowings on the term A loan are payable in consecutive monthly installments, which currently amount to $ i 111,111 per month. The Credit Agreement was amended on September 30, 2019 to expand the revolving loan amount from $ i 12,000,000 to $ i 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 amended on December 30, 2019 to eliminate the borrowing base. The Credit Agreement was amended on March 2, 2021 to expand the revolving loan amount from $ i 20,000,000 to $ i 30,000,000.
The revolving facility under the Credit Agreement includes a $ i 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) ( i 0.25%) for Prime Rate loans and (ii) i 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) i 0.25% for Prime Rate loans and (ii) i 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 i 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:
i
| 2021 | 2020 | |||||||
| Term Debt | $ | i 1,444,444 | $ | i 2,777,778 | ||||
| Revolving Debt | i 16,311,493 | i 10,825,797 | ||||||
| Total Bank Debt | i 17,755,937 | i 13,603,575 | ||||||
| Less: Current Portion | i 1,444,444 | i 1,333,333 | ||||||
| Non-Current Bank Debt | i 16,311,493 | i 12,270,242 | ||||||
| Less: Unamortized Debt Costs | i 136,057 | i 95,814 | ||||||
| Net Non-Current Bank Debt | $ | i 16,175,436 | $ | i 12,174,428 | ||||
Minimum principal payments due on the term loan until maturity are:
i
| Term Loan | ||||
| 2022 | i 1,444,444 | |||
| Total principal payments | $ | i 1,444,444 | ||
The Company had $ i 13.7 million and $ i 9.2 million available to borrow on the revolving credit facility at December 31, 2021 and 2020, respectively.
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Notes Payable – Related Party
The Company had 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 $ i 2,000,000, and the second was issued with original principal in the amount of $ i 2,768,662. The promissory notes each had an interest rate of i 6.25% per annum, which was increased from i 4.0% per annum as part of the July 2018 amendments to the Credit Agreement.
In connection with the Komtek Forge acquisition, on January 15, 2021, the Company refinanced the outstanding First Francis promissory notes in the aggregate amount of $ i 2,077,384, including accrued interest payable through the refinance date and combined this amount with an existing First Francis promissory note carried by Komtek Forge in the amount of $ i 1,702,400 into one note for a combined $ i 3,779,784 loan due to First Francis Company, payable in quarterly installments beginning April 15, 2021. The interest rate on the refinanced loan remained at i 6.25% per annum. First Francis is owned by Edward Crawford and Matthew Crawford, both of whom serve on the Board of Directors of the Company.
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 $ i 21 million, $ i 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 ( i 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 is due and payable in arrears on the first day of each calendar quarter up to and including June 30, 2023. The Company is required to make quarterly principal payments, the amount of which is calculated based on a four (4) year amortization schedule, on the last day of each calendar quarter 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 until June 30, 2023; quarterly interest was paid on the Seller Note.
Paycheck Protection Program Notes
The Company applied for and was approved for a loan in the amount of $ i 3,679,383 (the “PPP Loan”) on April 10, 2020 pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). On May 5, 2020, the Company instructed JPMorgan to repay in full the Promissory Note pursuant to the Paycheck Protection Program under the CARES Act. On June 4, 2020, Federal Hose and CAD each 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 $ i 253,071 and $ i 1,200,766, respectively (the “PPP Loans”). The Company received notice of forgiveness from First Federal Savings and Loan Association of Lakewood of 100% of the CAD and Federal Hose PPP loans on January 22, 2021 and January 29, 2021 respectively.
Notes Payable
Notes payable consist of the following:
i
| 2021 | 2020 | |||||||
| 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. | $ | i - | $ | i 1,108,829 | ||||
| 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. | i - | i 941,867 | ||||||
| In connection with the Komtek Forge acquisition, the Company refinanced the outstanding First Francis promissory notes, accrued interest payable through the refinance date and the assumed First Francis promissory note into one note on January 15, 2021 for a $3,779,784 loan due to First Francis Company, payable in quarterly installments beginning April 15, 2021. | i 3,284,762 | - | ||||||
| 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. This loan was forgiven in 2021. | i - | i 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. This loan was forgiven in 2021. | i - | i 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. | i 3,937,500 | i 6,187,500 | ||||||
| Total notes payable | i 7,222,262 | i 9,692,033 | ||||||
| Less current portion | i 2,946,885 | i 2,782,479 | ||||||
| Notes payable – non-current portion | $ | i 4,275,377 | $ | i 6,909,554 | ||||
Principal payments on the notes payable are as follows for the years ended December 31:
i
| Related Party Notes | Seller Note | Total Principal Payments | ||||||||||
| 2022 | i 696,885 | i 2,250,000 | i 2,946,885 | |||||||||
| 2023 | i 741,472 | i 1,687,500 | i 2,428,972 | |||||||||
| 2024 | i 788,911 | i - | i 788,911 | |||||||||
| 2025 | i 839,387 | i - | i 839,387 | |||||||||
| 2026 | i 218,107 | i - | i 218,107 | |||||||||
| Total principal payments | $ | i 3,284,762 | $ | i 3,937,500 | $ | i 7,222,262 | ||||||
/
The Company has operating leases for facilities, vehicles and equipment. These leases have remaining terms of i 2 years to i 15 years, some of which include options to extend the leases for up to i 10 years. Lease expense for the years ended December 31, 2021 and 2020 was approximately $ i 1.6 million and $ i 1.5 million, respectively.
Supplemental balance sheet information related to leases:
i
| 2021 | 2020 | |||||||
| Operating leases: | ||||||||
| Operating lease right-of-use assets, net | $ | i 8,998,776 | $ | i 8,856,820 | ||||
| Other current liabilities | i 1,241,681 | i 1,136,300 | ||||||
| Operating lease liabilities | i 7,985,628 | i 7,901,357 | ||||||
| Total operating lease liabilities | $ | i 9,227,309 | $ | i 9,037,657 | ||||
| Weighted Average Remaining Lease Term | ||||||||
| Operating Leases (in years) | i 9.0 | i 9.0 | ||||||
| Weighted Average Discount Rate | ||||||||
| Operating Leases | i 5.0 | % | i 5.0 |
% | ||||
Future minimum lease payments at December 31, 2021 were as follows:
i
| Operating Leases | ||||
| Year Ending December 31, | ||||
| $ | i 1,803,919 | |||
| 2023 | i 1,615,989 | |||
| 2024 | i 1,529,993 | |||
| 2025 | i 1,461,121 | |||
| 2026 | i 1,016,937 | |||
| Thereafter | i 4,235,844 | |||
| Total future minimum lease payments | $ | i 11,663,803 | ||
| Less: imputed interest | ( i 2,257,098 | ) | ||
| Total | $ | i 9,406,705 | ||
Commitments and Contingencies
From time to time, the Company is involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, will not have an adverse effect on its business, financial condition or results of operations.
There are i 10,000,000 Class A Shares and i 2,500,000 Class B Shares authorized, as well as i 1,000,000 Serial Preferred Shares.
Unissued shares of Class A common stock ( i 1,002,848 and i 1,042,848 shares at December 31, 2021 and 2020, respectively) are reserved for the share-for-share conversion rights of the Class B common stock, stock options under the Directors Plans, conversion rights of the Convertible Promissory Note and available warrants. The Class A shares have i one vote per share and the Class B shares have i three votes per share, except under certain circumstances such as voting on voluntary liquidation, sale of substantially all the assets, etc. Dividends up to $ i 0.10 per year, noncumulative, must be paid on Class A shares before any dividends are paid on Class B shares.
/
The Company's 2013 Omnibus Equity Plan (the “Plan”) was approved and adopted by an affirmative vote of a majority of the Company's Class A and Class B Shareholders and provides for the grant of the following types of incentive awards: stock options, stock appreciation rights, restricted shares, restricted share units, performance shares and Class A Common Shares. Those who will be eligible for awards under the Plan include employees who provide services to the Company and its affiliates, executive officers, non-employee Directors and consultants designated by the Compensation Committee. Under the Plan, i 150,000 Class A Common Shares were initially reserved for issuance. The Plan was materially revised in 2019 to increase the maximum number of the Company’s Class A Common Shares, without par value, available for issuance to i 400,000, providing an additional i 250,000 Class A Common Shares under the Plan. This change to the Plan was approved in connection with the Company’s 2019 Annual Meeting of Shareholders. The Class A Common Shares may be either authorized, but unissued, common shares or treasury shares. The Company granted i 23,700 and i 17,250 restricted stock awards under the Plan during the fiscal years ended December 31, 2021 and December 31, 2020, respectively. Approximately i 271,000 Class A Common Shares remain available for issuance under the Plan.
The Company's expired Outside Directors Stock Option Plans (collectively the "Directors Plans"), provided for the automatic grant of options to purchase up to i 5,000 shares of Class A Common Stock over a three-year period to members of the Board of Directors who were not employees of the Company, at the fair market value on the date of grant. The options are exercisable for up to i 10 years. All options granted under the Directors Plans were fully exercised as of December 31, 2021. Non-cash compensation expense related to stock option plans was $ i 8,775 and $ i 0 for the years ended December 31, 2021 and December 31, 2020, respectively.
A summary of the Company's stock option activity for the years ended December 31, 2020 and December 31, 2021 is as follows:
i
| CLASS A STOCK OPTIONS | ||||||||
| SHARES | EXERCISE PRICE | |||||||
| Balance as January 1, 2020 | i 3,000 | |||||||
| Options exercised | i 1,000 |
| $ | i 0.00 |
| |||
| Balance at December 31, 2020 | i 2,000 | |||||||
| Options exercised | i 2,000 | $ | i 4.39 | |||||
| Balance at December 31, 2021 | i - | |||||||
Non-cash compensation expense related to stock option plans was $ i 429,344 and $ i 296,899 for the years ended December 31, 2021 and December 31, 2020, respectively.
i
| Year 2021 | Year 2020 | |||||||
| Class A shares issued to Directors and employees related to stock compensation plans | i 23,700 | i 17,250 | ||||||
| Non-cash stock compensation expense | $ | i 429,344 | $ | i 296,899 | ||||
A summary of the Company's Treasury stock acquired for the years ended December 31, 2020 and December 31, 2021 is as follows:
i
| TREASURY SHARES | ||||||||
| CLASS A | CLASS B | |||||||
| Balance as January 1, 2020 | i 37,208 | i 182,435 | ||||||
| Share repurchase | i 2,259 |
| i - |
| ||||
| Balance at December 31, 2020 | i 39,467 | i 182,435 | ||||||
| Share repurchase | i 2,377 | i - | ||||||
| Balance at December 31, 2021 | i 41,844 | i 182,435 | ||||||
/
A reconciliation of the provision of income taxes to the statutory federal income tax rate is as follows:
i
| Year 2021 | Year 2020 | |||||||
| Income Before Provision for Income Taxes | $ | i 7,362,942 | $ | i 7,475,241 | ||||
| Statutory rate | i 21 | % | i 21 |
% | ||||
| Tax at statutory rate | i 1,546,218 | i 1,569,801 | ||||||
| State taxes, net of federal benefit | i 560,080 | i 336,654 | ||||||
| Permanent differences | ( i 397,016 | ) | i 18,715 | |||||
| Return to Provision Adjustments | i 362 |
| ( i 289,316 |
) | ||||
| Provision for income taxes | $ | i 1,709,644 | $ | i 1,635,854 | ||||
Deferred tax assets (liabilities) consist of the following:
i
| 2021 | 2020 | |||||||
| Inventories | $ | i 190,588 | $ | i 179,171 | ||||
| Bad debts | i 5,549 | i 5,009 | ||||||
| Accrued liabilities | i 373,932 | i 48,812 | ||||||
| Prepaid expense | ( i 210,244 | ) | ( i 92,571 |
) | ||||
| Depreciation and amortization | ( i 3,638,314 | ) | ( i 2,757,740 |
) | ||||
| Research and development and other credit carryforwards | i 450,377 | i 451,247 | ||||||
| Right of use lease accounting | i 4,860 | i 47,351 | ||||||
| Directors stock option plan | i 185,201 | i 161,212 | ||||||
| Total deferred tax liability | ( i 2,638,051 | ) | ( i 1,957,509 |
) | ||||
| Valuation allowance | ( i 47,319 | ) | ( i 47,319 |
) | ||||
| Reserve for uncertain tax positions | ( i 590,000 | ) | ( i 425,000 |
) | ||||
| Total reserves & allowances | ( i 637,319 | ) | ( i 472,319 |
) | ||||
| Net deferred tax liability, net of reserves | $ | ( i 3,275,370 | ) | $ | ( i 2,429,828 |
) | ||
Valuation Allowance
The Company has a valuation allowance for deferred tax assets based upon certain credits that may not be fully utilized in the future. The Company believes the valuation allowance of $ i 47 thousand and $ i 47
thouand at December 31, 2021 and 2020, respectively, is adequate.
Reserve for Uncertain Tax Positions
The Company has a reserve of unrecognized tax benefits related to exposures in accordance with ASC 740. The Company believes the valuation allowance of $ i 0.6 million and $ i 0.4
million at December 31, 2021 and 2020, respectively, is adequate. Due to the uncertainties involved with this significant estimate, it is reasonably possible that the Company’s estimate may change in the near term.
Tax Credits and Net Operating losses:
At December 31, 2021, the Company has state net operating losses (NOLs) and research and development (R&D) and other credit carryforwards for tax purposes which expire as follows:
i
| Tax Year Expires | State NOLs | R& D & Other Credits | ||||||
| 2022 | i - | i 3,000 | ||||||
| 2023 | i - | i 3,000 | ||||||
| 2024 | i - | i 3,000 | ||||||
| 2025 | i - | i 3,000 | ||||||
| 2026 | i - | i 3,000 | ||||||
| 2027 | i - | i 3,000 | ||||||
| 2028 | i - | i 3,000 | ||||||
| 2029 | i 191,519 | i 3,000 | ||||||
| 2030 | i 414,231 | i 3,000 | ||||||
| 2031 | i 641,229 | i 3,000 | ||||||
| 2032 | i - | i 3,000 | ||||||
| 2033 | i 532,837 | i 3,000 | ||||||
| 2034 | i 285,607 | i 3,000 | ||||||
| 2035 | i - | i - | ||||||
| 2036 | i - | i - | ||||||
| 2037 and beyond | i - | i - | ||||||
| $ | i 2,065,423 | $ | i 39,000 | |||||
/
The following table sets forth the computation of basic and diluted earnings per share.
i
| Years Ended | ||||||||
| 2021 | 2020 | |||||||
| Net Income Per Common Share - Basic | ||||||||
| Income available to common stockholders | $ | i 5,653,298 | $ | i 5,839,387 | ||||
| Weighted Average Shares of Common Stock Outstanding | i 3,405,061 | i 3,319,731 | ||||||
| Net Income Per Common Share - Basic | $ | i 1.66 | $ | i 1.76 | ||||
| Effect of Dilutive Securities | ||||||||
| Weighted Average Shares of Common Stock Outstanding - Basic | i 3,405,061 | i 3,319,731 | ||||||
| Options and warrants under convertible note | i - | i 822 | ||||||
| Weighted Average Shares of Common Stock Outstanding - Diluted | i 3,405,061 | i 3,320,553 | ||||||
| Net Income Per Common Share – Diluted | ||||||||
| Income available to common stockholders | $ | i 5,653,298 | $ | i 5,839,387 | ||||
| Weighted Average Shares of Common Stock Outstanding - Diluted | i 3,405,061 | i 3,320,553 | ||||||
| Net Income Per Common Share - Diluted | $ | i 1.66 | $ | i 1.76 | ||||
Included in the computation of diluted earnings for the year ended December 31, 2020 were options of i 1,000 shares Class A common stock. There were i no options included in the computation of diluted earnings for the year ended December 31, 2021.
The Company has a 401(k) Savings and Retirement Plans covering all full-time employees. Company contributions for each of these plans, including matching of employee contributions, are at the Company's discretion.
For the years ended December 31, 2021 and December 31, 2020, the Company made matching contributions to the plans in the amount of $ i 86,541 and $ i 97,322 respectively. Komtek Forge makes pension contributions to the United Steelworkers pension fund on behalf of its employees. These contributions amounted to $ i 80,331 for the year ended December 31, 2021. The Company does not provide any other postretirement benefits to its employees.
/
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 $ i 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:
i
| Cash Consideration Transferred | $ | 9,400,000 | |||
| Accounts Receivable | $ | i 771,088 | |||
| Inventory | i 2,918,255 | ||||
| Fixed Assets | i 29,581 | ||||
| Prepaid and Other Assets | i 53,397 | ||||
| Intangible Asset: Trademark | i 1,590,000 | ||||
| Intangibles Asset: Customer List | i 2,730,000 | ||||
| Goodwill | i 1,714,108 | ||||
| Total Assets Acquired | $ | i 9,806,429 | |||
| Accrued Expense | i 406,429 | ||||
| Total Liabilities Assumed | $ | i 406,429 | |||
| Total Fair Value | $ | i 9,400,000 | |||
| Acquisition transaction costs incurred were: | $ | i 110,548 |
Goodwill and Intangible Assets
Goodwill has an assigned value of $ i 1.7 million and represents the expected synergies generated by combining the operations of MPI and the Company. The Company sells hoses to customers in the Industrial and Transportation Products segment and the acquisition of MPI allows the Company to expand into a new hose market segment. Intangible asset, trademark has an assigned value of $ i 1.6 million which represents the expected value of the MPI trade name in the market. Intangible asset, customer list has an assigned value of $ i 2.7 million which represents the expected value of the list of the customers of MPI to the Company.
Effective January 15, 2021, the Company completed the acquisition of all of the issued and outstanding membership interests of KT Acquisition LLC (dba Komtek Forge, “Komtek”), a Massachusetts limited liability company and supplier of highly engineered forgings for the aerospace, industrial gas turbine, medical prosthetics. alternative energy, petrochemical, and defense industries, pursuant to a Membership Interest Purchase Agreement entered into as of January 15, 2021. The Company acquired Komtek in consideration of the payment by the Company of an aggregate purchase price of $ i 3.6 million, subject to certain post-closing adjustments based on working capital, indebtedness and selling expenses, as specified in the Membership Interest Purchase Agreement, which was comprised of cash, the issuance of i 60,000 Class A common shares of the Company and the assumption of certain specified liabilities of the seller.
i
| Cash Consideration Transferred | $ | 840,551 | ||
| Assumed Debt | 1,753,757 | |||
| Fair Value of Stock Consideration | 1,059,000 | |||
| Total Consideration | $ | 3,653,308 | ||
| Cash | $ | i 75,701 | ||
| Accounts Receivable | i 1,502,713 | |||
| Inventory | i 1,595,859 | |||
| Fixed Assets | i 434,197 | |||
| Prepaid and Other Assets | i 280,258 | |||
| Goodwill | i 832,306 | |||
| Total Assets Acquired | $ | i 4,721,034 | ||
| Accounts Payable | $ | i 843,817 | ||
| Accrued Expense | i 223,909 | |||
| Total Liabilities Assumed | $ | i 1,067,726 | ||
| Total Fair Value | $ | i 3,653,308 | ||
| Acquisition transaction costs incurred were: | $ | i 147,400 |
Goodwill
Goodwill has an assigned value of $ i 0.8 million and represents the expected synergies generated by combining the operations of Komtek and the Company. The Company purchases forgings to manufacture products for customers in the Industrial and Transportation Products segment and the Komtek acquisition strengthens the Company’s supply chain.
Effective March 1, 2021, MTA Acquisition Company, LLC, a Delaware limited liability company (“Global-Tek Colorado”) and indirect wholly-owned subsidiary of Crawford United Corporation, completed the acquisition of all of the membership interests of Global-Tek-Manufacturing LLC, a Puerto Rico limited liability company and specialist in machining parts from wrought, rounds, castings or extrusions and providing in house anodizing and other finishing and assembly operations and substantially all of the assets of Machining Technology L.L.C., a Colorado limited liability company with CNC machining capability, pursuant to a Membership Interest and Asset Purchase Agreement entered into March 2, 2021 and effective as of March 1, 2021. The stock and assets were transferred and assigned to MTA in exchange for approximately $ i 4.9 million in cash and the repayment of remaining outstanding indebtedness and transaction costs totaling $ i 1.5 million, subject to customary post-closing adjustments. The Purchase Agreement also includes a post-closing “earnout” that provides for up to an aggregate of $ i 1.5 million in additional consideration to the certain sellers (up to $ i 750,000 per year) if specified performance targets are met in the two years following closing. If earned, the additional consideration is payable in cash or, at the election of each such seller, in Company common shares up to a maximum aggregate amount of i 61,475 shares.
i
| Cash Consideration Transferred | $ | 4,913,530 | ||
| Seller Transaction Costs and Repayment of Indebtedness | 1,490,222 | |||
| Total Consideration | $ | 6,403,752 | ||
| Accounts Receivable | $ | i 1,058,459 | ||
| Inventory | i 173,202 | |||
| Fixed Assets | i 3,233,073 | |||
| Prepaid and Other Assets | i 1,036 | |||
| Intangible Asset: Trademark | i 1,162,000 | |||
| Intangibles Asset: Customer List | i 1,041,000 | |||
| Goodwill | i 2,066,461 | |||
| Total Assets Acquired | $ | i 8,735,231 | ||
| Accounts Payable | $ | i 473,119 | ||
| Accrued Payroll and Other Expense | i 214,879 | |||
| Deferred Tax Liability | i 143,481 | |||
| Contingent Liability | i 1,500,000 | |||
| Total Liabilities Assumed | $ | i 2,331,479 | ||
| Total Fair Value | $ | i 6,403,752 | ||
| Acquisition transaction costs incurred were: | $ | i 190,007 |
Goodwill and Intangible Assets
Goodwill has an assigned value of $ i 2.1 million and represents the expected synergies generated by combining the operations of Global-Tek Colorado, Global-Tek-Manufacturing LLC and the Company. The Company utilizes machined parts for customers in the Industrial and Transportation Products segment and the acquisition of Global-Tek Colorado and Global-Tek-Manufacturing allows the Company to strengthen its supply chain. Intangible asset, trademark has an assigned value of $ i 1.2 million which represents the expected value of the Global-Tek trade name in the market. Intangible asset, customer list has an assigned value of $ i 1.0 million which represents the expected value of the list of the customers of Global-Tek to the Company.
Contingent Consideration
Global-Tek has a contingent consideration of $1.5 million as of the acquisition date which represents $750 thousand of additional consideration per year for a period of two years following the acquisition date if specified performance targets are met. The additional consideration will be earned if Global-Tek achieves specified profitability targets and is payable either in cash or in common shares of the Company up to an aggregate maximum amount of 61,475 shares. The range of estimates for the outcome of the contingent consideration is between $ i 0 and approximately $ i 1.5 million. The maximum amount of the payment is the greater of the value of 61,475 common shares of the Company and $1.5 million.
Effective July 1, 2021, Crawford EH Acquisition Company, LLC, a Delaware limited liability company and indirect wholly-owned subsidiary of Crawford United Corporation, completed the acquisition of all of the operating assets of Emergency Hydraulics LLC, (“Emergency Hydraulics”) a Florida limited liability company and provider of hydraulic hoses, air tank assemblies and related products to manufacturers of firefighting trucks and other emergency vehicles, pursuant to an Asset Purchase Agreement entered into July 1, 2021. The acquired business is strategically important to the Company’s growing industrial hose platform and will expand its offerings and diversify its customer base in this important market segment. The assets were transferred and assigned to Emergency Hydraulics in exchange for approximately $ i 0.3 million of repayment of remaining outstanding indebtedness and transaction costs.
i
| Assumption of Indebtedness | $ | 287,359 | ||
| Accounts Receivable | $ | i 79,843 | ||
| Inventory | i 67,254 | |||
| Intangible Assets: Customer List | i 413,589 | |||
| Total Assets Acquired | $ | i 560,686 | ||
| Accounts Payable | $ | i 273,327 | ||
| Total Liabilities Assumed | $ | i 273,327 | ||
| Total Fair Value | $ | i 287,359 | ||
| Acquisition transaction costs incurred were: | $ | i 36,204 |
Intangible Assets
Intangible asset, customer list has an assigned value of $ i 0.4 million which represents the expected value of the list of the customers of Emergency Hydraulics to the Company.
The following includes the revenue and net income of the acquired entities, as though each of the business combinations that occured during the current year had occured as of January 1, 2020.
i
| Twelve Months Ended December 31, 2021 | ||||||||||||||
| Acquired Entities | All Other Entites | Consolidated Pro Forma | ||||||||||||
| Sales | $ | i 41,776,303 | $ | i 65,156,011 | $ | i 106,932,314 | ||||||||
| Net Income | $ | i 3,567,944 | $ | i 2,358,752 | $ | i 5,926,696 | ||||||||
| Twelve Months Ended December 31, 2020 | ||||||||||||||
| Acquired Entities | All Other Entities | Consolidated Pro Forma | ||||||||||||
| Sales | $ | i 32,893,573 | $ | i 68,675,624 | $ | i 101,569,197 | ||||||||
| Net Income | $ | i 1,927,056 | $ | i 4,739,740 | $ | i 6,666,796 | ||||||||
/
17. SEGMENT AND RELATED INFORMATION
As of January 1, 2021, the Company elected to report operations for two business segments: (1) Commercial Air Handling Equipment, and (2) Industrial and Transportation Products. The decision to change from three to two reportable business segments was the result of a board-level discussion and was deemed appropriate given the size of the Company. 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.
Commercial Air Handling Equipment:
The Commercial Air Handling Equipment 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 and Transportation Products:
The Industrial and Transportation Products 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 purchased all of the issued and outstanding shares of capital stock of CAD Enterprises, Inc.(“CAD”) in Phoenix, Arizona on July 1, 2018. CAD 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. CAD’s quality certifications include ISO 9001:2015/AS9100D, as well as Nadcap accreditation for Fluorescent Penetrant Inspection (FPI), Heat Treating/Braze, Non-Conventional Machining EDM, and TIG/E-Beam welding. The Company added the distribution of marine hose to this segment through the acquisition of the assets of MPI Products, Inc. (“MPI”) on January 2, 2020. MPI specializes in rubber and plastic marine hose for the recreational boating industry. MPI offers certified products that meet marine industry standards and regulations. 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 Company purchased all of the issued and outstanding membership interests of KT Acquisition LLC (name later changed to Komtek Forge LLC), in Worcester, Massachusetts on January 15, 2021. Komtek Forge LLC is a supplier of highly engineered forgings for the aerospace, industrial gas turbine, medical prosthetics, alternative energy, petrochemical and defense industries. The Company purchased all of the membership interests of Global-Tek-Manufacturing LLC (“Global-Tek”), in Ceiba, Puerto Rico and substantially all of the assets of Machining Technology LLC (name later changed to Global-Tek Colorado LLC or “Global-Tek Colorado”) in Longmont, Colorado on March 2, 2021. Global-Tek and Global-Tek Colorado specialize in providing customers with highly engineered manufacturing solutions, including CNC machining, anodizing, electro polishing and laser marking for customers in the defense, aerospace and medical device markets. The Company purchased substantially all of the assets of Emergency Hydraulics LLC (“Emergency Hydraulics”), in Ocala, Florida on July 1, 2021. Emergency Hydraulics provides hydraulic hoses, air tank assemblies and related products to manufacturers of firefighting trucks and other emergency vehicles.
Corporate and Other:
Corporate costs not allocated to the two primary business segments are aggregated here.
Information by industry segment is set forth below:
i
| Twelve Months Ended December 31, 2021 | ||||||||||||||||
| Commercial Air Handling Equipment | Industrial And Transportation Products | Corporate and Other | Consolidated | |||||||||||||
| Sales | $ | i 38,018,412 | $ | i 66,143,815 | $ | - | $ | i 104,162,227 | ||||||||
| Gross Profit | $ | i 7,749,628 | $ | i 14,162,131 | $ | i 706 | $ | i 21,912,465 | ||||||||
| Operating Income | $ | i 3,065,156 | $ | i 4,519,290 | $ | ( i 594,194 |
) | $ | i 6,990,252 | |||||||
| Pretax Income | $ | i 3,071,119 | $ | i 4,209,308 | $ | i 82,515 | $ | i 7,362,942 | ||||||||
| Net Income (Loss) | $ | i 2,303,339 | $ | i 3,468,366 | $ | ( i 118,407 | ) | $ | i 5,653,298 | |||||||
| Twelve Months Ended December 31, 2020 (1) | ||||||||||||||||
| Commercial Air Handling Equipment | Industrial And Transportation Products | Corporate and Other | Consolidated | |||||||||||||
| Sales | $ | i 41,243,413 | $ | i 43,826,487 | $ | i - | $ | i 85,069,900 | ||||||||
| Gross Profit | $ | i 10,216,587 | $ | i 8,714,703 | $ | i - | $ | i 18,931,290 | ||||||||
| Operating Income | $ | i 5,313,487 | $ | i 2,008,958 | $ | i 130,008 | $ | i 7,452,453 | ||||||||
| Pretax Income | $ | i 5,750,226 | $ | i 1,298,632 | $ | i 696,383 | $ | i 7,745,241 | ||||||||
| Net Income | $ | i 4,312,669 | $ | i 1,004,430 | $ | i 522,288 | $ | i 5,839,387 | ||||||||
(1) Segment information for the twelve months ended December 31, 2020 has been restated to reflect the change in reportable segments.
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographic locations:
i
| Year Ended | Year Ended | |||||||
| United States of America | $ | i 102,678,670 | $ | i 83,992,635 | ||||
| Puerto Rico | i 619,625 | i 601,232 | ||||||
| Mexico | i 309,978 | i - | ||||||
| Canada | i 292,927 | i 388,531 | ||||||
| Other | i 261,027 | i 87,502 | ||||||
| $ | i 104,162,227 | $ | i 85,069,900 | |||||
All export sales to foreign countries are made in US Dollars.
/
18. QUARTERLY DATA (UNAUDITED)
The following table presents the Company’s unaudited quarterly consolidated income statement data for the years ended December 31, 2021 and 2020. These quarterly results include all adjustments consisting of normal recurring adjustments that the Company considers necessary for the fair presentation for the quarters presented and are not necessarily indicative of the operating results for any future period.
i
| Year Ended December 31, 2021 | ||||||||||||||||
| March 31, | June 30, | September 30, | ||||||||||||||
| 2021 | 2021 | 2021 | ||||||||||||||
| Sales | $ | i 23,994,004 | $ | i 26,449,885 | $ | i 26,397,857 | $ | i 27,320,481 | ||||||||
| Gross Profit | i 6,002,921 | i 5,780,290 | i 5,397,709 | i 4,371,546 | ||||||||||||
| Operating Income | i 2,325,460 | i 2,119,797 | i 1,868,781 | i 676,214 | ||||||||||||
| Net Income | i 3,143,417 | i 1,247,305 | i 1,197,877 | i 64,698 | ||||||||||||
| Net Income per Common Share: | ||||||||||||||||
| Basic | $ | i 0.93 | $ | i 0.37 | $ | i 0.35 | $ | i 0.02 | ||||||||
| Diluted | $ | i 0.93 | $ | i 0.37 | $ | i 0.35 | $ | i 0.02 | ||||||||
| Year Ended December 31, 2020 | ||||||||||||||||
| March 31, | June 30, | September 30, | ||||||||||||||
| 2020 | 2020 | 2020 | ||||||||||||||
| Sales | $ | i 25,281,574 | $ | i 18,576,588 | $ | i 21,277,797 | $ | i 19,933,941 | ||||||||
| Gross Profit | i 6,208,143 | i 3,499,039 | i 4,852,417 | i 4,371,691 | ||||||||||||
| Operating Income | i 3,138,149 | i 530,520 | i 2,126,417 | i 1,657,368 | ||||||||||||
| Net Income | i 2,075,570 | i 228,837 | i 1,426,090 | i 2,108,890 | ||||||||||||
| Net Income per Common Share: | ||||||||||||||||
| Basic | $ | i 0.63 | $ | i 0.07 | $ | i 0.43 | $ | i 0.63 | ||||||||
| Diluted | $ | i 0.63 | $ | i 0.07 | $ | i 0.43 | $ | i 0.63 | ||||||||
/
Effective January 10, 2022, Crawford REV Acquisition Company LLC (name later changed to Reverso Pumps LLC or “Reverso Pumps”), a Delaware limited liability company and indirect wholly-owned subsidiary of Crawford United Corporation (the “Company”), completed the acquisition (the “Reverso Transaction”) of substantially all the assets of Reverso Pumps, Inc., a Florida corporation and developer, designer, manufacturer, seller and distributor of oil change systems, fuel and oil transfer pumps, fuel primers, fuel polishing systems and engine flushing systems (“Reverso”), pursuant to an Asset Purchase Agreement (the “Reverso Asset Purchase Agreement”) entered into and effective January 10, 2022 by and among Reverso Pumps, the Seller, the seller parties named therein and the Seller Parties’ representatives named therein. Upon the closing of the Transaction, the assets were transferred and assigned to Reverso Pumps in exchange for approximately $ i 2.5 million in cash, subject to customary post-closing adjustments.
Additionally, effective on January 10, 2022, Crawford SEP Acquisition Company LLC (name later changed to Separ America LLC or “Separ America”), a Delaware limited liability company and indirect wholly-owned subsidiary of the Company, completed the acquisition (the “Separ Transaction,” and with the Reverso Transaction, the “Transactions”) of substantially all the assets of Separ of the Americas, LLC, a Florida limited liability company and developer, designer, manufacturer, seller and distributor of oil change systems, fuel and oil transfer pumps, fuel primers, fuel polishing systems and engine flushing systems (“Separ”) pursuant to an Asset Purchase Agreement (the “Separ Asset Purchase Agreement,” and together with the Reverso Asset Purchase Agreement, the “Purchase Agreements”) by and among Separ America, the Seller, the seller parties named therein and the Seller Parties’ representative named therein. Upon the closing of the Transaction, the assets were transferred and assigned to Separ America in exchange for approximately $ i 1.5 million in cash, subject to customary post-closing adjustments.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The Company has established disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and, as such, is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, to allow timely decisions regarding required disclosure.
The Company does not expect that its disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
As of December 31, 2021, 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 Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2021 due to the material weakness described below.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed 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.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its financial statements would not be prevented or detected on a timely basis.
Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, we conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, as required by Rule 13a-15(c) of the Exchange Act. In making this evaluation, we used the criteria set forth in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the following material weakness in internal control over financial reporting at the Company’s subsidiary CAD Enterprises Inc. (“CAD”) existed as of December 31, 2020 and continued to exist as of December 31, 2021:
| ● |
CAD did not maintain effective controls over the costing of its work-in-process inventory. Specifically, CAD did not consistently assign, input and record raw material costs and direct labor time with respect to work-in-process jobs. Also, CAD’s accounting systems are not designed to readily determine work-in-process inventory balances or variances between finished goods pricing and manufacturing costs. |
In addition, management concluded that the following material weakness in internal control over financial reporting at the Company’s subsidiaries MPI Products, Inc. (“MPI”) and Federal Hose Manufacturing LLC (“Federal Hose”) existed as of December 31, 2021:
| ● |
MPI and Federal Hose did not maintain effective controls over the reconciliation of cash. Specifically, MPI and Federal Hose did not perform bank reconciliations on a regular basis. |
These control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis, and therefore we conclude that the deficiencies represent a material weakness in internal control over financial reporting and the Company’s internal control over financial reporting is not effective as of December 31, 2021.
This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
/s/ B. E. Powers
B. E. Powers
Chief Executive Officer
/s/ J. P. Daly
J. P. Daly
Chief Financial Officer
REMEDIATION OF THE MATERIAL WEAKNESS
The Company is in the process of remediating the material weakness in order to strengthen internal controls at CAD, MPI and Federal Hose. The remediation plan includes the following:
• Hiring and training additional qualified personnel, including a new controller of CAD and a new controller of MPI and Federal Hose;
• Enhancing the timeliness, formality and rigor of CAD’s process for costing work-in-process inventory, including its process for assigning, inputting, recording and reviewing raw material costs and other standard costs;
• Enhancing CAD’s training of employees with respect to appropriately and consistently recording direct labor time;
• Implementing a new accounting system at CAD that has certain built-in internal controls; and
• Enhancing the training of financial personnel at MPI and Federal Hose, and the timeliness, formality and rigor of processes at MPI and Federal Hose with respect to regular reconciliation of cash accounts with bank statements.
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Information required by this Item as to the Audit Committee, the Audit Committee financial expert, the procedures for recommending nominees to the Board of Directors and compliance with Section 16(a) of the Exchange Act is incorporated herein by reference to the information set forth under the captions "Information Regarding Meetings and Committees of the Board of Directors" and "Delinquent Section 16(a) Reports" in the Company's definitive Proxy Statement for the 2022 Annual Meeting of Shareholders.
The Company has historically operated under informal ethical guidelines, under which the Company's principal executive, financial, and accounting officers, are held accountable. In accordance with these guidelines, the Company has always promoted honest, ethical and lawful conduct throughout the organization and has adopted a written Code of Ethics for the Chief Executive Officer and Chief Financial Officer. In addition, the Company adopted and the Board of Directors approved a written Code of Ethics and Business Conduct for all officers and employees, which is available on the Company’s website at www.crawfordunited.com under “Investor Relations”. The Company also implemented a system to address the "Whistle Blower" provision of the Sarbanes-Oxley Act of 2002.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item 11 is incorporated by reference to the information set forth under the caption "Executive Compensation" in the Company's definitive Proxy Statement for the 2022 Annual Meeting of Shareholders, since such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year pursuant to Regulation 14A.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The information required by this Item 12 is incorporated by reference to the information set forth under the captions "Principal Shareholders," "Share Ownership of Directors and Officers" and “Equity Compensation Plan Information” in the Company's definitive Proxy Statement for the 2022 Annual Meeting of Shareholders, since such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year pursuant to Regulation 14A.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required by this Item 13 is incorporated by reference to the information set forth under the caption "Transactions with Management" in the Company's definitive Proxy Statement for the 2022 Annual Meeting of Shareholders, since such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year pursuant to Regulation 14A.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The information required by this Item 14, which includes the fees of the Company’s principal accountants, i Meaden & Moore, Ltd. (PCAOB ID 00 i 314), located in i Cleveland, Ohio, is incorporated by reference to the information set forth under the caption "Independent Public Accountants" in the Company's definitive Proxy Statement for the 2022 Annual Meeting of Shareholders, since such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year pursuant to Regulation 14A.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) (1) FINANCIAL STATEMENTS
The following Consolidated Financial Statements of the Registrant and its subsidiaries are included in Part II, Item 8:
(a) (2) FINANCIAL STATEMENT SCHEDULES
The following Consolidated Financial Statement Schedules of the Registrant and its subsidiaries are included in Item 15 hereof.
None
SEQUENTIAL PAGE
Schedule II - Valuation and Qualifying Accounts
All other Schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
(a) (3) EXHIBITS
Reference is made to the Exhibit Index set forth herein.
| EXHIBIT NO.: |
DOCUMENT |
| 2.1 |
|
| 2.1(a) |
|
| 2.1(b) |
|
| 2.1(c) |
|
| 2.1(d) |
|
| 2.1(e) |
|
| 2.1(f) |
|
| 2.1(g) |
|
| 2.1(h) |
|
| 2.1(h) |
|
| 3.1 |
|
| 3.2 |
|
| 3.3 |
|
| 10(a) |
| 10(b) |
|
| 10(c) |
|
| 10(d) |
|
| 10(e) |
|
| 10(f) |
|
| 10(g) |
|
| 10(h) |
|
| 11 |
|
| 14 |
|
| 21 |
|
| 23 |
|
| 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 |
|
| 32.2 |
|
| 101.INS* |
Inline XBRL Instance |
| 101.SCH* |
Inline XBRL Taxonomy Extension Schema |
| 101.CAL* |
Inline XBRL Taxonomy Extension Calculation |
| 101.DEF* |
Inline XBRL Extension Definition |
| 101.LAB* |
Inline XBRL Taxonomy Extension Labels |
| 101.PRE* 104 |
Inline XBRL Taxonomy Extension Presentation Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| *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. |
|
| **Management contract, compensation plan or arrangement. |
The following pages contain the Consolidated Financial Statement Schedules as specified for Item 8 of Part II of Form 10-K.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CRAWFORD UNITED CORPORATION |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the 13th day of April 2022:
| SIGNATURE: |
TITLE |
|
| /s/ Brian E. Powers |
President and Chief |
|
| Executive Officer |
||
| (Principal Executive Officer) |
||
| /s/ John P. Daly |
Vice President and Chief Financial Officer |
|
| (Principal Financial and Accounting Officer) |
||
| Chairman |
||
| Director |
||
| /s/ Steven H. Rosen |
Director |
|
| /s/ Kirin M. Smith |
Director |
|
| /s/ James W. Wert |
Director |
|
| /s/ Luis E. Jimenez |
Director |
|
CRAWFORD UNITED CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
i
| Additions | ||||||||||||||||
| Description | Balance at Beginning of Period | Charged to Costs and Expenses | Deductions | Balance at End of Period | ||||||||||||
| Year Ended December 31, 2020 | ||||||||||||||||
| Reserve for doubtful accounts | $ | i 18,325 | $ | i 1,648 | i - | $ | i 19,973 | |||||||||
| Reserve for inventory obsolescence | i 250,606 | i 64,739 | i - | i 315,345 | ||||||||||||
| Reserve for product warranty | i 302,486 | i 253,461 | ( i 350,947 |
) | i 205,000 | |||||||||||
| Valuation allowance for deferred taxes | i 47,319 | i - | i - | i 47,319 | ||||||||||||
| Reserve for uncertain tax positions | $ | i 395,000 | $ | i 30,000 | $ | i - | $ | i 425,000 | ||||||||
| Year Ended December 31, 2021 | ||||||||||||||||
| Reserve for doubtful accounts | $ | i 19,973 | $ | i 55,957 | i - | $ | i 75,930 | |||||||||
| Reserve for inventory obsolescence | i 315,345 | i 137,262 | i - | i 452,607 | ||||||||||||
| Reserve for product warranty | i 205,000 | i 190,097 | ( i 364,714 |
) | i 30,383 | |||||||||||
| Valuation allowance for deferred taxes | i 47,319 | i - | i - | i 47,319 | ||||||||||||
| Reserve for uncertain tax positions | $ | i 425,000 | $ | i 165,000 | $ | i - | $ | i 590,000 | ||||||||
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| This ‘10-K’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 6/1/24 | ||||
| 6/30/23 | ||||
| 12/31/22 | ||||
| 12/15/22 | ||||
| 12/1/22 | ||||
| Filed on: | 4/13/22 | 8-K | ||
| 4/12/22 | ||||
| 3/18/22 | ||||
| 1/10/22 | 8-K | |||
| For Period end: | 12/31/21 | NT 10-K | ||
| 7/1/21 | 8-K | |||
| 6/30/21 | 10-Q | |||
| 6/1/21 | 8-K, SD | |||
| 4/15/21 | DEF 14A | |||
| 3/2/21 | ||||
| 3/1/21 | 8-K | |||
| 1/29/21 | ||||
| 1/22/21 | ||||
| 1/15/21 | 4, 8-K | |||
| 1/4/21 | 4 | |||
| 1/1/21 | ||||
| 12/31/20 | 10-K, SD | |||
| 9/8/20 | 3, 8-K | |||
| 6/30/20 | 10-Q, 8-K, DEF 14A | |||
| 6/4/20 | 8-K | |||
| 5/5/20 | 8-K | |||
| 4/10/20 | 8-K | |||
| 1/2/20 | ||||
| 1/1/20 | 8-K, 8-K/A | |||
| 12/31/19 | 10-K, 10-K/A, 4 | |||
| 12/30/19 | ||||
| 9/30/19 | 10-Q, 8-K | |||
| 4/19/19 | 8-K | |||
| 9/30/18 | 10-Q | |||
| 7/5/18 | 8-K | |||
| 7/1/18 | 8-K, 8-K/A | |||
| 6/1/17 | 8-K, 8-K/A | |||
| 10/31/16 | ||||
| 9/1/16 | ||||
| 7/1/16 | 4, 4/A, 8-K/A | |||
| List all Filings | ||||