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].
P&F Industries(PFIN) - 2021 Q4 - Annual Report