TORONTO, Dec. 16, 2025 (GLOBE NEWSWIRE) -- (TSX: PFIN) Picton Mahoney Asset Management announced today that it has declared the December 2025 quarterly cash distribution of $0.1180 per unit for the ETF units (“ETF Units”) of the PICTON Income Fund. Unitholders of record of the ETF Units, at the close of business on December 22, 2025, will receive a per-unit cash distribution payable on December 31, 2025. About Picton Mahoney Asset Management Picton Mahoney Asset Management specializes in differentiated inve ...

Group 1 - Picton Mahoney Asset Management declared a monthly cash distribution of $0.0981 per unit for the ETF units of the PICTON Income Fund, payable on September 30, 2025, to unitholders of record as of September 22, 2025 [1] - The firm specializes in differentiated investment solutions and rules-based volatility management, helping clients strengthen their portfolios through various market cycles [2] - Founded in 2004 and 100% employee-owned, Picton Mahoney manages over $15.7 billion in assets as of August 31, 2025, and offers a full suite of investment solutions including mutual and alternative funds [3]

Revenue Performance - Third quarter 2023 revenue decreased by 0.8% to $14.404 million compared to $14.516 million in the same quarter of 2022[108] - Florida Pneumatic's revenue declined by 2.3% to $9.682 million, while Hy-Tech's revenue increased by 2.4% to $4.722 million in the same period[108] - For the nine months ended September 30, 2023, consolidated revenue was $46.309 million, a slight decrease of 0.1% from $46.347 million in 2022[108] - Florida Pneumatic's nine-month revenue fell by 7.3% to $30.451 million, while Hy-Tech's revenue rose by 17.5% to $15.858 million[108] - Automotive revenue for Q3 2023 decreased by 16.0% to $2,613,000 compared to $3,110,000 in Q3 2022, primarily due to a price increase strategy that led to a decline in unit sales[110] - Aerospace revenue increased by 12.8% in Q3 2023, reaching $2,864,000, driven by higher demand for new consumable parts and improved market conditions in both commercial and military aviation[112] - Retail revenue showed a modest increase of 1.7% in Q3 2023, totaling $2,825,000, despite challenges from The Home Depot's inventory reduction efforts[112] - For the nine-month period ended September 30, 2023, total revenue decreased by 7.3% to $30,451,000 compared to $32,853,000 in the same period of 2022[111] - Hy-Tech's total revenue for Q3 2023 increased by 2.4% to $4,722,000, with OEM revenue growing by 19.6% to $2,616,000[116] - Hy-Tech's nine-month revenue increased by 17.5% to $15,858,000, driven by a 25.0% increase in OEM revenue and a 17.9% increase in PTG revenue[117] Financial Metrics - Gross margins increased slightly during the third quarter of 2023[92] - Gross margin for Florida Pneumatic improved by 0.3 percentage points to 41.8% in Q3 2023, attributed to a shift towards higher margin product lines[119] - Hy-Tech's gross margin increased by 1.9 percentage points to 17.8% in Q3 2023, primarily due to product/customer mix and cost reductions[120] - Selling, general and administrative expenses (SG&A) for Q3 2023 rose to $5,785,000, up from $5,084,000 in Q3 2022[124] - Interest expense for short-term borrowings decreased by 39.7% to $334,000 for the nine-month period ended September 30, 2023, compared to $239,000 in the prior year[126] - The effective tax rate for the nine-month period ended September 30, 2023, was approximately 14.1%, compared to an income tax benefit of 12.8% for the same period in 2022[130] - Total debt to total book capitalization was 6.1% at September 30, 2023, down from 15.3% at December 31, 2022[135] - The current ratio improved to 3.03 to 1 as of September 30, 2023, compared to 2.44 to 1 at December 31, 2022[132] Operational Developments - The company entered into a merger agreement for an all-cash transaction valued at $13.00 per share[92] - The company continues to face inventory shortages due to delays from Asian suppliers, although less severe than in previous periods[101] - The company has developed a new cordless installation tool for the aerospace market, with orders already being taken and an additional version expected in early 2024[105] - The company is analyzing the practicality of incorporating newer technologies into its tool platforms for various markets[105] - Higher professional fees were incurred in connection with the merger agreement[92] - Compensation expenses increased by $215,000, driven by base salaries, performance-based bonuses, and associated payroll taxes[125] - Professional fees and expenses rose by $471,000, primarily due to $515,000 in legal and consulting costs related to a transaction announced on October 13, 2023[125] - The company recognized a gain on the sale of equipment amounting to $23,000 during Q3 2023[124] - The company recorded a gain of $15,000 from the final resolution of Employee Retention Tax Credit filings[125] Capital Expenditures - Capital expenditures for the nine-month period were $1,909,000, an increase from $1,222,000 in the same period last year[135] - Planned capital expenditures for the remainder of 2023 are approximately $600,000, expected to be financed through the Credit Facility[135]

Revenue Performance - Florida Pneumatic's revenue decreased by 14.4% to $10,845,000 for the three months ended June 30, 2023, compared to $12,666,000 in the same period of 2022[103]. - Hy-Tech's revenue increased by 3.4% to $5,318,000 for the three months ended June 30, 2023, compared to $5,144,000 in the same period of 2022[103]. - Consolidated revenue for the three months ended June 30, 2023, was $16,163,000, a decrease of 9.2% from $17,810,000 in the same period of 2022[103]. - For the six months ended June 30, 2023, Florida Pneumatic's revenue was $20,769,000, down 9.5% from $22,947,000 in the same period of 2022[103]. - Hy-Tech's revenue for the six months ended June 30, 2023, increased by 25.4% to $11,137,000 from $8,884,000 in the same period of 2022[103]. - Consolidated revenue for the six months ended June 30, 2023, was $31,906,000, a slight increase of 0.2% from $31,831,000 in the same period of 2022[103]. - Automotive revenue for Q2 2023 was $3,503,000, a decrease of 9.1% compared to $3,853,000 in Q2 2022[105]. - Retail revenue declined significantly by 39.5% to $2,920,000 in Q2 2023 from $4,826,000 in Q2 2022[105]. - Aerospace revenue increased by 36.0% to $2,963,000 in Q2 2023, up from $2,179,000 in Q2 2022[105]. - Total revenue for the six months ended June 30, 2023, was $20,769,000, a decrease of 9.5% from $22,947,000 in the same period of 2022[106]. - Hy-Tech's total revenue for the six months ended June 30, 2023, increased by 25.4% to $11,137,000 compared to $8,884,000 in the same period of 2022[110]. Gross Margin and Expenses - The company experienced significant improvement in gross margin at both Hy-Tech and Florida Pneumatic[84]. - Gross margin for Florida Pneumatic improved to 41.6% in Q2 2023 from 37.7% in Q2 2022, reflecting a shift to higher margin product lines[111]. - Hy-Tech's gross margin increased by 8.1 percentage points to 24.9% in Q2 2023 compared to 16.8% in Q2 2022[112]. - SG&A expenses for Q2 2023 were $5,368,000, a slight decrease from $5,479,000 in Q2 2022[117]. Financial Position and Cash Flow - The net expense for the three-month period ended June 30, 2023, was $4,000, primarily due to a loss on equipment disposal[119]. - Interest expense for short-term borrowings increased by 25.8% to $112,000 in Q2 2023 from $89,000 in Q2 2022[121]. - Total interest expense for the first half of 2023 was $216,000, a 56.5% increase compared to $138,000 in the same period of 2022[121]. - The average balance of short-term borrowings decreased to $7,060,000 in Q2 2023 from $11,544,000 in Q2 2022[124]. - The effective tax rate for Q2 2023 was approximately 33.4%, compared to a tax expense of 138.2% in Q2 2022[126]. - Working capital increased to $21,245,000 as of June 30, 2023, from $20,838,000 at the end of 2022[127]. - The current ratio improved to 2.86:1 as of June 30, 2023, compared to 2.44:1 at the end of 2022[127]. - Cash provided by operating activities for the first half of 2023 was $4,234,000, compared to cash used of $1,154,000 in the same period of 2022[130]. - Total debt to total book capitalization decreased to 11.2% as of June 30, 2023, from 15.3% at the end of 2022[131]. Future Outlook and Challenges - The company is developing a cordless installation tool for the aerospace market, with orders expected to increase later in 2023[100]. - The company continues to face challenges with inventory delays from Asian suppliers, although freight costs are approaching pre-pandemic levels[93]. - The company is monitoring the impact of inflation and geopolitical issues on manufacturing and operating costs, with no current estimates available[96]. - Planned capital expenditures for the remainder of 2023 are approximately $1,300,000, primarily for new metal cutting equipment and IT hardware/software[132]. - The company has approximately $9,324,000 available under the Revolver arrangement as of June 30, 2023[129]. Aerospace Revenue - Aerospace revenue for the six-month period ended June 30, 2023, increased by 34.6% compared to the same period in 2022, driven by demand for new consumable parts[106].

Revenue Performance - Consolidated revenue for the three months ended March 31, 2023, was $15,742,000, an increase of 12.3% compared to $14,021,000 in the same period of 2022[96] - Florida Pneumatic's revenue decreased by 3.5% to $9,924,000 from $10,281,000 year-over-year[96] - Hy-Tech's revenue increased significantly by 55.6%, reaching $5,818,000 compared to $3,740,000 in the prior year[96] - Total revenue for the first quarter of 2023 was $9,924,000, a decrease of 3.5% compared to $10,281,000 in the same period of 2022[98] - Automotive revenue declined by 16.0% to $3,259,000, primarily due to price increases leading to a reduction in unit sales[98] - Aerospace revenue increased by 35.7% to $2,411,000, driven by higher demand for new parts and tools[98] - Hy-Tech's total revenue rose by 55.6% to $5,818,000, with OEM revenue increasing by 56.4% to $3,073,000[101] Gross Margin and Expenses - The company experienced a significant improvement in Hy-Tech's revenue and gross margins, alongside a stronger gross margin at Florida Pneumatic[80] - Gross margin for the company improved to 36.5% in Q1 2023, up from 32.2% in Q1 2022, attributed to a shift towards higher-margin product lines[102] - Selling, general and administrative expenses remained stable at $5,175,000, with a slight increase in compensation expenses[105] Cash Flow and Capital Expenditures - Cash provided by operating activities was $790,000 in Q1 2023, compared to cash used of $3,972,000 in Q1 2022[113] - Capital expenditures for Q1 2023 were $905,000, with planned expenditures for the remainder of 2023 estimated at $2,400,000[114] Tax and Liquidity - The effective tax rate for Q1 2023 was approximately 31.8%, compared to a tax benefit rate of 13.4% in Q1 2022[109] - The company had a current ratio of 2.57 to 1 as of March 31, 2023, indicating strong liquidity[110] Operational Developments - The company is developing a cordless installation tool for the aerospace market, with orders expected to be fulfilled later in 2023[93] - The acquisition of Jackson Gear Company has been consolidated into Hy-Tech, enhancing market exposure in the larger gears market[80] - The company plans to analyze the practicality of incorporating newer technologies into its tool platforms for various markets[93] Supply Chain and Economic Factors - Supply chain disruptions from Asian suppliers continue to impact inventory availability, although ocean freight costs have returned to pre-pandemic levels[88] - Domestic transportation costs have decreased due to improved supply chain conditions, despite rising fuel costs tempering rate reductions[89] - The company is monitoring inflation and geopolitical issues, which may affect manufacturing and operating costs in the foreseeable future[90] Internal Controls and Legal Proceedings - As of March 31, 2023, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective[122] - There were no changes in internal control over financial reporting during the fiscal quarter ended March 31, 2023, that materially affected the internal control[123] - There have been no material changes to the legal proceedings' disclosure since the 2022 Form 10-K[125]

Financial Performance - Net revenue for the year ended December 31, 2022, was $59,041,000, an increase of 10.3% compared to $53,554,000 in 2021[130] - Gross profit for 2022 was $18,939,000, representing a gross margin of 32.1%, compared to a gross profit of $17,347,000 in 2021[130] - Operating loss for 2022 was $(1,482,000), an improvement from a loss of $(2,597,000) in 2021[130] - Net loss for 2022 was $(1,476,000), compared to a net income of $2,290,000 in 2021, resulting in a basic and diluted loss per share of $(0.46)[130] - The company reported a net loss of $1,476,000 for the year ended December 31, 2022, compared to a net income of $2,290,000 in 2021[201] Assets and Liabilities - Total assets as of December 31, 2022, were $61,004,000, an increase from $58,190,000 in 2021[124] - Total liabilities increased to $19,048,000 in 2022 from $14,350,000 in 2021, primarily due to an increase in short-term borrowings[126] - Cash and cash equivalents at the end of 2022 were $667,000, up from $539,000 at the end of 2021[124] - The company’s goodwill increased to $4,822,000 in 2022 from $4,447,000 in 2021, reflecting ongoing investments[124] - Total cash provided by operating activities was $3,288,000 in 2022, a recovery from a cash used of $4,149,000 in 2021, indicating improved operational cash flow[134] Operational Costs - Selling, general and administrative expenses rose to $20,373,000 in 2022, compared to $19,856,000 in 2021, indicating increased operational costs[130] - The company experienced a decrease in inventories by $223,000 in 2022, contrasting with a significant decrease of $5,671,000 in 2021, indicating improved inventory management[134] - Advertising expenses decreased to $884,000 in 2022 from $1,276,000 in 2021, reflecting a reduction of approximately 30.8%[198] Strategic Moves and Investments - The company acquired the net assets of the Jackson Gear Company for $2,300,000, indicating a strategic move for expansion[137] - Capital expenditures increased to $2,374,000 in 2022 from $642,000 in 2021, highlighting a focus on investment in assets[137] - The Company acquired JGC for approximately $2.3 million in cash, funded by Revolver borrowings, enhancing market exposure in larger gears[214] Revenue Breakdown - Total revenue for the year ended December 31, 2022, was $41,398,000, a slight decrease of 0.2% compared to $41,488,000 in 2021[161] - Revenue from the Automotive segment decreased by 5.8% to $13,699,000, while Aerospace revenue increased by 20.5% to $8,658,000[161] - Revenue generated at Hy-Tech increased by 46.2% to $17,643,000 in 2022, driven by a significant rise in OEM sales[165] Cash Flow and Financing - The Company had borrowing availability on its bank facility of $7,678,000 as of December 31, 2022, and is not in default on any bank covenant[154] - The Company has a $16,000,000 revolver line of credit, with $7,678,000 available under the Revolver portion as of December 31, 2022[237] - The average balance of short-term borrowings from the bank rose significantly to $9,845,000 in 2022 compared to $2,686,000 in 2021[238] Tax and Compliance - The effective tax rate for 2022 was (20.3)%, a significant decrease from (0.1)% in 2021, primarily due to changes in state and local taxes and the impact of the CARES Act[275] - The Company recognized a total income tax benefit of $376,000 for the year ended December 31, 2022, compared to a benefit of $2,000 in 2021[267] Future Outlook - Management believes that sufficient funds will be generated from operations and existing credit facilities to fund its operations for at least one year[154] - The company has contingency plans to reduce or defer expenses and cash outlays if operations weaken beyond current forecasts[154] - The Company intends to declare a cash dividend of $0.20 per share per annum, with a quarterly cash dividend of $0.05 per share declared for stockholders of record on March 31, 2023[279]

Revenue Performance - Consolidated revenue for the three months ended September 30, 2022, was $14,516,000, an increase of 11.8% compared to $12,985,000 in the same period of 2021[115] - Florida Pneumatic's revenue for the three months ended September 30, 2022, was $9,906,000, reflecting a 3.1% increase from $9,607,000 in the prior year[115] - Hy-Tech's revenue for the three months ended September 30, 2022, was $4,610,000, a significant increase of 36.5% from $3,378,000 in the same period of 2021[115] - For the nine months ended September 30, 2022, consolidated revenue reached $46,347,000, up 14.4% from $40,520,000 in the same period of 2021[115] - Florida Pneumatic's nine-month revenue was $32,853,000, a 5.2% increase from $31,221,000 in the previous year[115] - Hy-Tech's nine-month revenue surged to $13,494,000, marking a 45.1% increase from $9,299,000 in the same period of 2021[115] - Total revenue for the three months ended September 30, 2022, was $9,906,000, a 3.1% increase from $9,607,000 in the same period of 2021[117] - Aerospace revenue increased by 38.5% to $2,538,000 in Q3 2022 compared to $1,832,000 in Q3 2021, driven by both commercial and defense-related customers[119] - Automotive revenue declined by 1.8% to $3,110,000 in Q3 2022, attributed to economic and competitive factors[119] - For the nine months ended September 30, 2022, total revenue was $32,853,000, up 5.2% from $31,221,000 in the same period of 2021[118] - Hy-Tech's total revenue for Q3 2022 was $4,610,000, a 36.5% increase from $3,378,000 in Q3 2021, largely due to the acquisition of the JGC business[124] Operational Challenges - Ongoing global supply chain issues have negatively impacted revenue and income, with significant delays and increased costs observed[93][105] - Inflation and geopolitical issues, particularly in freight and raw material costs, have materially affected operating results during the three and nine-month periods ended September 30, 2022[109] Acquisitions and Market Strategy - The acquisition of Jackson Gear Company in early 2022 is expected to enhance market exposure in the larger gears market[97] - The company is exploring the development of cordless tools for the automotive aftermarket, responding to market trends towards advanced cordless operated tools[111] - The integration of the JGC business acquisition is expected to improve manufacturing productivity and gross margin for Hy-Tech in 2023[130] - The company completed the acquisition of JGC for $2,300,000, which included additional legal and accounting expenses[146] Financial Metrics - Gross profit for Florida Pneumatic increased by 21.7% to $4,113,000 in Q3 2022, with a gross margin improvement of 6.3 percentage points to 41.5%[126] - Hy-Tech's gross profit declined by 1.7 percentage points to 15.9% in Q3 2022, primarily due to low margin customers and product mix[127] - Selling, general and administrative expenses (SG&A) for Q3 2022 were $5,084,000, an increase from $4,734,000 in Q3 2021, driven by higher compensation expenses[132] - Interest expense for short-term borrowings increased significantly, with a three-month increase of 920.0% to $102,000 in 2022 from $10,000 in 2021, and a nine-month increase of 753.6% to $239,000 from $28,000[136] - Total interest expense for the nine-month period ended September 30, 2022, was $244,000, a 1,061.9% increase from $21,000 in the same period of 2021[136] Cash Flow and Capital Structure - Cash provided by operating activities for the nine-month period ended September 30, 2022, was $1,305,000, compared to cash used of $1,610,000 in the same period of 2021[145] - The company's working capital decreased to $22,125,000 as of September 30, 2022, from $24,598,000 at December 31, 2021[142] - The current ratio declined to 2.47:1 as of September 30, 2022, compared to 3.04:1 at December 31, 2021[142] - Capital expenditures for the nine-month period ended September 30, 2022, were $1,222,000, up from $428,000 in the same period of the previous year[147] - The company's total debt to total book capitalization increased to 16% as of September 30, 2022, from 11.6% at December 31, 2021[146] Taxation - The effective tax rates for the three and nine-month periods ended September 30, 2022, were an income tax benefit of 31.5% and 12.8%, respectively, compared to 12.8% and 23.9% in the same periods of 2021[141]

Revenue Performance - Consolidated revenue for Q2 2022 was $17,810,000, an increase of 31.1% compared to $13,589,000 in Q2 2021[108] - Florida Pneumatic's revenue for Q2 2022 was $12,666,000, up 18.2% from $10,712,000 in Q2 2021[108] - Hy-Tech's revenue for Q2 2022 reached $5,144,000, a significant increase of 78.8% from $2,877,000 in Q2 2021[108] - For the six-month period ended June 30, 2022, consolidated revenue was $31,831,000, reflecting a 15.6% increase from $27,535,000 in the same period of 2021[108] - Florida Pneumatic's six-month revenue was $22,947,000, a 6.2% increase from $21,614,000 in the prior year[108] - Hy-Tech's six-month revenue was $8,884,000, marking a 50.0% increase from $5,921,000 in the same period of 2021[108] - Total revenue for the three months ended June 30, 2022, was $12,666,000, an increase of 18.2% compared to $10,712,000 in the same period of 2021[110] - Retail sector revenue increased by 28.2% to $4,826,000, driven by a stocking rollout to The Home Depot[111] - Aerospace revenue grew by 25.7% to $2,179,000, primarily due to increased orders from commercial and defense customers[111] - Automotive revenue saw a modest increase of 1.9% to $3,853,000, but future revenue may decline due to changes in distribution strategy[111] - Hy-Tech's OEM product line revenue surged by 80.5% to $2,542,000, attributed to increased orders and improved economic conditions[116] - Hy-Tech's PTG product line revenue increased by 162.1% to $1,583,000, significantly impacted by the acquisition of the JGC business[116] Cost and Expenses - The ongoing supply chain crisis, exacerbated by COVID-19, has led to increased costs and inventory shortages[100] - The company is monitoring the impact of inflation on operating costs, particularly in freight, raw materials, and labor[103] - Selling, general and administrative expenses (SG&A) for the second quarter of 2022 were $5,479,000, slightly up from $5,458,000 in the same period in 2021[122] Profitability - Total gross profit for the three months ended June 30, 2022, was $5,636,000, a 16.3% increase from $4,848,000 in the prior year[118] - Florida Pneumatic's gross margin declined by 1.2 percentage points to 37.7%, influenced by a higher mix of lower-margin Retail revenue[118] Financing and Capital Structure - Interest expense for short-term borrowings increased significantly to $89,000 in Q2 2022 from $8,000 in Q2 2021, representing a 1,012.5% increase[126] - Total interest expense for the six-month period ended June 30, 2022, was $138,000, compared to $7,000 in the same period in 2021, marking an increase of 1,871.4%[126] - The total debt to total book capitalization ratio increased to 18.9% as of June 30, 2022, from 11.6% at December 31, 2021[135] - The company had $7,000,000 available under its Revolver arrangement as of June 30, 2022[133] Working Capital and Liquidity - Working capital decreased to $22,407,000 as of June 30, 2022, from $24,598,000 at the end of 2021[131] - The current ratio declined to 2.40:1 as of June 30, 2022, compared to 3.04:1 at December 31, 2021[131] Acquisitions and Investments - The acquisition of Jackson Gear Company is expected to enhance market exposure in the larger gears market[91] - The company completed the acquisition of JGC for a total purchase price of $2,300,000 during the six-month period ended June 30, 2022[136] - Capital expenditures for the six-month period ended June 30, 2022, were $923,000, up from $247,000 in the same period in 2021, with an additional $700,000 planned for the remainder of 2022[137] Taxation - The effective tax rate for the three-month period ended June 30, 2022, was a tax expense of 138.2%, compared to a tax benefit of 3.8% in the same period in 2021[130] Government Assistance - The company received a Paycheck Protection Program (PPP) loan of $2,929,000, which was fully forgiven by the SBA in June 2021, resulting in the recognition of this amount as Other Income in 2021[125]

Inventory and Supply Chain - Inventory increased to $27,548,000 as of March 31, 2022, up from $24,021,000 at December 31, 2021, primarily due to increased safety stock levels and inventory for a large retail order[97]. - The ongoing COVID-19 pandemic has negatively impacted revenue, income, and supply chain, with significant shipping delays from Asian suppliers affecting inventory availability[92]. - The company has experienced severe delays in receiving inventory and increased ocean freight costs, which are anticipated to continue throughout 2022[96]. - The increase in inventory levels is also a strategic move to return to pre-pandemic safety stock levels to support growth[98]. - The company aims to maintain satisfactory relationships with key customers and suppliers despite ongoing supply chain challenges[101]. Financial Performance - Consolidated revenue for the three months ended March 31, 2022, was $14,021,000, a slight increase of 0.5% compared to $13,945,000 in the same period of 2021[102]. - Florida Pneumatic's revenue decreased by 5.7% to $10,281,000, primarily due to a significant decline in the Retail sector, which fell by 20.2%[104]. - Hy-Tech's revenue increased by 22.9% to $3,740,000, driven by growth in the OEM product line and the acquisition of Jackson Gear Company[106]. - Gross margin for Florida Pneumatic was $3,949,000, a decrease of 6.0% from $4,200,000 in the prior year, attributed to increased ocean freight costs[107]. - Hy-Tech's gross margin improved by 28.9% to $562,000, reflecting a favorable product/customer mix despite integration challenges from the Jackson Gear acquisition[108]. Acquisitions and Investments - The acquisition of Jackson Gear Company on January 15, 2022, is expected to enhance market exposure in the larger gears market[83]. - The company completed the acquisition of Jackson Gear Company for $2,300,000, which included additional acquisition expenses[120]. - Planned capital expenditures for 2022 are approximately $800,000, primarily for new equipment and facility expansion, expected to be financed through the Credit Facility[121]. Economic and Market Conditions - The production of Boeing's 737 MAX aircraft remains below pre-pandemic levels, adversely affecting revenue from aerospace customers[95]. - The cost of raw materials, particularly metals like steel and aluminum, is a key economic measure impacting overall results[85]. - The company is monitoring the impact of tariffs on imported products, which significantly affect costs[86]. - Inflationary pressures, particularly in freight and raw materials, are anticipated to impact the company's operations throughout 2022[125]. Management and Compliance - The company's management, including the CEO and CFO, concluded that the disclosure controls and procedures were effective as of March 31, 2022[128]. - There were no changes in internal control over financial reporting that materially affected or are likely to materially affect the company's internal control over financial reporting during the fiscal quarter ended March 31, 2022[129]. - No new accounting standards or pronouncements were issued during the three-month period ended March 31, 2022, that were applicable to the company[126]. - There have been no material changes to the legal proceedings' disclosure described in the 2021 Form 10-K[131]. Expenses and Debt - Selling, general and administrative expenses rose to $5,173,000, an increase of 3.6% from $4,991,000, mainly due to higher compensation and professional fees related to acquisitions[110]. - Total debt to total book capitalization increased to 22.5% as of March 31, 2022, compared to 11.6% at the end of 2021, indicating a rise in leverage[119]. Technology and Development - The company is analyzing the practicality of developing advanced technologies for pneumatic tools in response to market trends towards cordless operated hand tools[99].

Financial Performance - Net revenue for 2021 was $53.55 million, an increase of 9.8% from $49.14 million in 2020[139]. - Gross profit rose to $17.35 million in 2021, up 22.5% from $14.19 million in 2020[139]. - The company reported a net income of $2.29 million in 2021, compared to a net loss of $4.95 million in 2020[139]. - Basic earnings per share improved to $0.72 in 2021 from a loss of $1.57 per share in 2020[139]. - The company had a total comprehensive income of $2.25 million in 2021, compared to a loss of $4.91 million in 2020[139]. - For the year ended December 31, 2021, the company reported a net income of $2,290,000 compared to a net loss of $4,954,000 in 2020[212]. - The Company reported income before income taxes of $2,288,000 for 2021, a significant improvement from a loss of $6,855,000 in 2020[281]. - The effective tax rate for 2021 was (0.1)%, compared to (27.7)% in 2020, reflecting changes in federal and state tax impacts[281]. Assets and Liabilities - Total assets increased to $58.19 million as of December 31, 2021, compared to $53.37 million in 2020, reflecting a growth of approximately 9.4%[133]. - Current assets rose to $36.68 million in 2021, up from $29.54 million in 2020, marking an increase of about 24%[133]. - Total liabilities grew to $14.35 million in 2021, up from $11.83 million in 2020, indicating an increase of around 21.3%[136]. - Shareholders' equity reached $43.84 million in 2021, compared to $41.54 million in 2020, reflecting an increase of about 5.5%[136]. - The company had working capital of $24,598,000 and availability on its bank facility of approximately $9,578,000 as of December 31, 2021[168]. - As of December 31, 2021, accounts receivable net amounted to $7,550,000, an increase of 1.1% from $7,468,000 in 2020[228]. - The total net book value of other intangible assets was $5,592,000 as of December 31, 2021, down from $6,226,000 in 2020[238]. Cash Flow and Expenditures - Cash flows from operating activities showed a net cash used of $4.15 million in 2021, compared to a net cash provided of $3.05 million in 2020[146]. - Capital expenditures for 2021 were $642,000, a decrease from $1.10 million in 2020[149]. - Total adjustments in cash flows from operating activities were $(6.44) million in 2021, contrasting with $8.00 million in 2020[146]. - The company ended 2021 with cash of $539,000, down from $904,000 at the beginning of the year[149]. Inventory and Revenue Segments - Inventories increased significantly to $24.02 million in 2021, compared to $18.36 million in 2020, representing a growth of approximately 30.9%[133]. - Total revenue for 2021 was $41,488,000, representing an increase of 8.4% from $38,276,000 in 2020[173]. - Automotive segment revenue increased by 9.6% to $14,543,000, while aerospace segment revenue decreased by 11.2% to $7,184,000[173]. - The company recorded a total of $12,066,000 in revenue from Hy-Tech, an 11.1% increase from $10,860,000 in 2020[176]. Borrowings and Debt - The company reported a short-term borrowing of $5.77 million in 2021, a significant rise from $1.37 million in 2020, which is an increase of approximately 320%[136]. - As of December 31, 2021, short-term borrowings under the Revolver were $5,765,000, compared to $1,374,000 in 2020, reflecting a significant increase[246]. - The average balances of short-term borrowings were $2,686,000 in 2021, down from $4,042,000 in 2020, indicating a 33.5% decrease[248]. Operational Challenges and Risks - The company experienced severe shipping delays and increased international freight costs due to the COVID-19 pandemic, impacting inventory availability[162]. - The company’s management expressed concerns regarding potential risks that could adversely impact business operations and financial condition due to unidentified risks and uncertainties[40]. - Management believes that sufficient funds will be generated from operations and existing credit facilities to fund operations for at least one year[163]. Tax and Compliance - The effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits, which are adjusted periodically[199]. - The company evaluates the likelihood of realizing deferred tax assets based on future taxable income sources, with a valuation allowance applied if realization is not likely[200]. - The Company maintains a valuation allowance against certain state net operating losses, indicating uncertainty in realizing tax benefits[280]. Stock and Compensation - Stock-based compensation expense for the year ended December 31, 2021, was approximately $5,000, a significant decrease from $41,000 in 2020[268]. - The Company had approximately $1,000 of total unrecognized compensation costs related to non-vested awards as of December 31, 2021, expected to be recognized over a weighted average period of 0.2 years[268]. - The 2021 Stock Incentive Plan allows for the issuance of up to 500,000 shares of Common Stock, with a maximum of 100,000 shares per type of award to any eligible employee or consultant per fiscal year[258]. Acquisitions - The Company acquired Jackson Gear Company for approximately $2.3 million in cash, funded by Revolver borrowings, to enhance market exposure in larger gears[287]. - The purchase price allocation for Jackson Gear Company includes $490,000 in accounts receivable, $292,000 in inventories, and $851,000 in machinery and equipment, with goodwill estimated at $805,000[289].