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CRAWFORD UNITED Corp - Quarter Report: 2019 March (Form 10-Q)

hicka20190331_10q.htm
 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q 

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

 

For the quarterly period ended March 31, 2019

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

 

For the transition period from Not Applicable to Not Applicable

Commission file number: 0-147

 

HICKOK INCORPORATED 

(Exact name of registrant as specified in its charter)

 

Ohio

34-0288470

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

  

  

10514 Dupont Avenue, Cleveland, Ohio

44108

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number (216) 541-8060

 

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. Yes [X] 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). Yes [X] 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 [ ]      

Non-accelerated filer   [ ]

Smaller reporting company [X]

  

Emerging growth company [ ]

 

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

As of April 30, 2019, 2,158,806 shares of Class A Common Stock and 596,848 shares of Class B Common Stock were outstanding.

 

1

 

 

 

PART I

 

ITEM 1. FINANCIAL STATEMENTS

 

HICKOK INCORPORATED

CONSOLIDATED BALANCE SHEET

 

   

(Unaudited)

         
   

March 31,

2019

   

December 31,

2018

 

ASSETS

               

CURRENT ASSETS:

               

Cash and Cash Equivalents

  $ 2,692,129     $ 5,057,626  

Accounts receivable less allowance for doubtful accounts

    11,167,985       9,835,262  

Costs and estimated earnings in excess of billing

    2,481,632       2,083,349  

Inventories-less allowance for obsolete inventory

    5,334,994       5,497,982  

Prepaid Expenses and other current assets

    767,465       818,609  

Total Current Assets

    22,444,205       23,292,828  
                 

PROPERTY, PLANT AND EQUIPMENT:

               

Land and Improvements

    257,205       257,205  

Buildings and Leasehold Improvements

    1,816,376       1,709,165  

Machinery and Equipment

    13,560,114       13,343,878  

Total Property, Plant and Equipment

    15,633,695       15,310,248  

Less accumulated depreciation

    2,406,734       2,006,133  

Property, Plant and Equipment, Net

    13,226,961       13,304,115  
                 

Operating Right of Use Asset, Net

    9,725,871       -  
                 

OTHER ASSETS:

               

Goodwill

    9,582,202       9,582,202  

Intangibles, net of accumulated amortization

    4,238,611       4,332,202  

Other non-current assets

    95,263       95,263  

Total Non-Current Other Assets

    13,916,076       14,009,667  

Total Assets

  $ 59,313,113     $ 50,606,610  

       

See accompanying notes to consolidated financial statements

 

2

 

 

HICKOK INCORPORATED

CONSOLIDATED BALANCE SHEET

       

   

(Unaudited)

         
   

March 31,

2019

   

December 31,

2018

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

CURRENT LIABILITIES:

               

Convertible notes payable

  $ 200,000     $ 200,000  

Notes payable

    2,124,892       1,555,663  

Bank Debt

    1,333,333       1,333,333  

Leases payable

    671,991       13,800  

Accounts payable

    4,242,459       5,169,819  

Unearned revenue

    2,972,412       5,257,797  

Accrued payroll and related expenses

    892,712       1,358,669  

Accrued expenses

    2,324,532       1,606,429  

Accrued income taxes

    1,054,719       360,239  

Total Current Liabilities

    15,817,050       16,855,749  
                 

LONG-TERM LIABILITIES:

               

Notes payable

    10,411,998       11,086,402  

Bank Debt

    7,563,061       8,194,679  

Deferred Income Taxes

    1,701,653       1,701,653  

Leases payable

    9,157,675       2,642  

Total Long-Term Liabilities

    28,834,387       20,985,376  

STOCKHOLDERS' EQUITY

               

Preferred shares, no par value - 1,000,000 shares authorized, no shares issued and outstanding

               

Common shares, no par value

    -       -  

Class A common shares - 10,000,000 shares authorized, 2,158,806 and 2,123,809 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively

    2,865,159       2,641,300  

Class B common shares - 2,500,000 shares authorized, 596,848 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively

    710,272       710,272  

Contributed capital

    1,741,901       1,741,901  

Treasury shares

    (1,905,780

)

    (1,905,780

)

Class A common shares - 37,208 shares held at March 31, 2019 and December 31, 2018

               

Class B common shares – 182,435 shares held at March 31, 2019 and December 31, 2018

               

Retained earnings

    11,250,124       9,577,792  

Total Stockholders' Equity

    14,661,676       12,765,485  
                 

Total Liabilities and Stockholders' Equity

  $ 59,313,113     $ 50,606,610  

       

See accompanying notes to consolidated financial statements

 

3

 

 

 

HICKOK INCORPORATED

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

 

   

Three Months Ended

March 31,

 
   

2019

   

2018

 
                 

Total Sales

  $ 21,836,087     $ 11,878,700  

Cost of Sales

    17,006,199       8,860,259  

Gross Profit

    4,829,888       3,018,441  
                 

Operating Expenses:

               

Product development costs

    -       123,029  

Selling, general and administrative expenses

    2,258,817       2,252,327  

Operating Income

    2,571,071       643,085  
                 

Other (Income) and Expenses:

               

Interest charges

    266,073       85,933  

Other (income) expense, net

    (23,874

)

    58,816  

Total Other (Income) and Expenses

    242,199       144,749  

Income before Provision for Income Taxes

    2,328,872       498,336  
                 

Provision for Income Taxes

    583,414       124,584  

Net Income

  $ 1,745,458     $ 373,752  
                 

Net Income Per Common Share - Basic

  $ 0.63     $ 0.13  
                 

Net Income Per Common Share - Diluted

  $ 0.55     $ 0.11  
                 

Weighted Average Shares of Common Stock Outstanding

               

Basic

    2,755,265       2,911,057  

Diluted

    3,178,420       3,269,853  

 

See accompanying notes to consolidated financial statements

 

4

 

 

 

HICKOK INCORPORATED 

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, 2017

  $ 2,246,367     $ 710,272     $ 1,741,901     $ (264,841

)

  $ 5,964,082     $ 10,397,781  

Share-based compensation expense

    394,933       -       -       -       -       394,933  

Proceeds from sale of business

    -       -       -       (1,640,939

)

            (1,640,939

)

Net Income

    -       -       -       -       3,613,710       3,613,710  

Balance at December 31, 2018

  $ 2,641,300     $ 710,272     $ 1,741,901     $ (1,905,780

)

  $ 9,577,792     $ 12,765,485  

Share-based compensation expense

    223,859       -       -       -       -       223,859  

Cumulative effect of accounting change

    -       -       -       -       (73,126 )     (73,126

)

Net Income

    -       -       -       -       1,745,458       1,745,458  

Balance at March 31, 2019

  $ 2,865,159     $ 710,272     $ 1,741,901     $ (1,905,780

)

  $ 11,250,124     $ 14,661,676  

 

5

 

 

 

HICKOK INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)

 

   

Three Months Ended March 31,

 
   

2019

   

2018

 
                 

Cash Flows from Operating Activities

               

Net Income

  $ 1,745,458     $ 373,752  

Adjustments to reconcile net income to net cash provided by operating activities:

               

Depreciation and amortization

    494,192       359,981  

Non-cash share-based compensation expense

    223,859       236,167  

Changes in assets and liabilities:

               

Decrease (Increase) in accounts receivable

    (1,332,723

)

    493,837  

Decrease (Increase) in inventories

    162,988       (2,460

)

Decrease (Increase) in costs and estimated earnings in excess of billings

    (398,283

)

    (787,440

)

Decrease (Increase) in prepaid expenses & other assets

    51,144       (120,791

)

Increase (Decrease) in accounts payable

    (927,360

)

    (41,352

)

Increase (Decrease) in accrued payroll and related expenses

    (465,957

)

    (74,152

)

Increase (Decrease) in accrued expenses

    733,969       (131,060

)

Increase (Decrease) in accrued income taxes

    694,480       45,228  

Increase (Decrease) in unearned revenue

    (2,285,385

)

    (32,754

)

Total adjustments

    (3,049,076

)

    (54,796

)

Net Cash Provided (Used) by Operating Activities

  $ (1,303,618

)

  $ 318,956  
                 

Cash Flows from Investing Activities

               

Capital expenditures

    (323,447

)

    (62,586

)

Net Cash (Used in) Investing Activities

  $ (323,447

)

  $ (62,586

)

                 

Cash Flows from Financing Activities

               

Payments on notes

    (105,175

)

    (37,434

)

Payments on bank debt

    (1,083,334

)

    (1,975,000

)

Borrowings on bank debt

    451,716       173,614  

Payments on finance lease

    (1,639

)

    (13,514

)

                 
Net Cash Provided by (Used in) Financing Activities   $ (738,432

)

  $ (1,852,334

)

Net Increase (decrease) in cash and cash equivalents

    (2,365,497

)

    (1,595,964

)

Cash and cash equivalents at beginning of quarter     5,057,626       2,444,110  
Cash and cash equivalents at end of quarter   $ 2,692,129     $ 848,146  
                 

Supplemental disclosures of cash flow information

               

Interest Paid

  $ 190,462     $ 156,413  

Income Taxes Paid

  $ -     $ 74,560  

 

See accompanying notes to consolidated financial statements

 

6

 

 

HICKOK INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

MARCH 31, 2019

 

 

 

 

1.  BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include the accounts of Hickok Incorporated and its wholly-owned subsidiaries (the “Company”). Significant intercompany transactions and balances have been eliminated in the financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ended December 31, 2019. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. 

 

During the three-month period ended March 31, 2019, there have been no changes to our significant accounting policies other than the adoption of the new standard for leases, as discussed in Note 2 below.

 

Reclassifications

Certain prior year amounts were reclassified to conform to the current year presentation, including transaction costs related to acquisitions that were reclassified from selling, general and administrative to other (income) expenses as these costs are not considered as operating costs. These reclassifications have no effect on the financial position or results of operations reported as of and for the periods presented.

  

  

 

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The Company’s Summary of Significant Accounting Policies is provided with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

Recently Adopted Accounting Standards
The Company did not incur any material impact to its results of operations due to the adoption of any new accounting standards during the periods reported. The adoption of the new standard for leases did have a material impact on consolidated balance sheets as disclosed below and in Note 9.

 

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842),” a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet. Most prominent among the amendments is the recognition of assets and liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The new standard requires a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements, but it does not require transition accounting for leases that expire prior to the date of initial application. The new standard is effective for fiscal years and interim periods within those years, beginning on or after December 15, 2018, with early adoption permitted. The adoption of this new standard on January 1, 2019 resulted in assets of $9.7 million recorded as Operating Right of Use Assets, net, and additional lease liabilities of $9.8 million.  The Company also recorded an adjustment to retained earnings resulting from the cumulative effect of the change in accounting of ($0.1) million.  See Note 9 for further information.

 

7

 

 

Recently Issued Accounting Standards

 

In January 2017, FASB issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The standard, which should be applied prospectively, is effective for fiscal years and interim periods within those years beginning on or after December 15, 2019. Early adoption is permitted. We are evaluating the impact the adoption of this standard could have on our consolidated financial statements.

 

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 is effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2019 with early adoption permitted. We are evaluating the impact the adoption of this standard could have on our consolidated financial statements.

 

   

 

 3.  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. The reserve for doubtful accounts was $35,750 and $35,000 at March 31, 2019 and December 31, 2018, respectively.

 

 

 

 

4.  INVENTORY


Inventory is valued at the lower of cost (first-in, first-out) or net realizable value and consists of:

 

   

March 31,

2019

   

December 31,

2018

 
                 

Raw materials and component parts

  $ 1,987,221     $ 2,313,664  

Work-in-process

    1,736,430       1,209,117  

Finished products

    1,893,087       2,201,693  

Total inventory

  $ 5,616,738       5,724,474  

Less: inventory reserves

    281,744       226,492  

Net inventory

  $ 5,334,994     $ 5,497,982  

 

8

 

 

 

5. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

 

Intangible assets relate to the purchase of businesses. Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is not amortized but is reviewed on an annual basis for impairment. Amortization of intangibles is being amortized on a straight-line basis over period ranging from one year to 15 years. Intangible assets are as follows:

 

   

March 31,

2019

   

December 31,

2018

 

Customer list intangibles

  $ 4,970,000     $ 4,970,000  

Non-compete agreements

    200,000       200,000  

Trademarks

    340,000       340,000  

Total intangible assets

    5,510,000       5,510,000  

Less: accumulated amortization

    1,271,389       1,177,798  

Intangible assets, net

  $ 4,238,611     $ 4,332,202  

  

Amortization of intangibles assets was: $93,591 and $217,257 for the three months ended March 31, 2019 and 2018, respectively.

                               

 

 

 

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:

 

   

March 31,

2019

   

December 31,

2018

 
                 

Land

  $ 257,205     $ 257,205  

Buildings and improvements

    1,816,376       1,709,165  

Machinery & equipment

    13,560,114       13,343,879  

Total property, plant & equipment

    15,633,695       15,310,248  

Less: accumulated depreciation

    2,406,734       2,006,133  

Property plant & equipment, net

  $ 13,226,961     $ 13,304,115  

 

Depreciation expense was $400,601 and $139,746 for the three months ended March 31, 2019 and 2018, respectively.

 

 

 

 

7.  BANK DEBT 

 

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 $12,000,000, subject to a borrowing base (determined based on 80% of Eligible Accounts, plus 50% of Eligible Progress Billing Accounts, plus 50% of Eligible Inventory, minus Reserves, each as defined in the Credit Agreement) and a term A loan in the amount of $6,000,000. Outstanding borrowings on the term A loan are payable in consecutive monthly installments, which currently amount to $111,111 per month.  

 

The revolving facility under the Credit Agreement includes a $3 million sublimit for the issuance of letters of credit thereunder.  The Credit Agreement also provides for a separate credit line for borrowings of up to an aggregate of $1,000,000 for capital expenditures until July 5, 2019, at which time any outstanding capital expenditure borrowings will be converted into a term loan maturing at the earlier of five years after such conversion or the termination of the revolving credit facility.  Interest for borrowings under the revolving facility accrues at a per annum rate equal to Prime Rate or LIBOR plus applicable margins of (i) 0.00% for Prime Rate loans and (ii) 2.00% for LIBOR loans. The maturity date of the revolving facility is June 1, 2020. 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) 0.25% for Prime Rate loans and (ii) 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 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.

 

9

 

 

 

Bank debt balances consist of the following: 

 

   

March 31,

2018

   

December 31,

2018

 
                 

Term debt

  $ 5,111,111     $ 5,444,444  

Revolving debt

    3,879,452       4,184,158  

Total Bank debt

    8,990,563       9,628,602  

Less: current portion

    1,333,333       1,333,333  

Non-current bank debt

    7,657,230       8,295,269  

Less: unamortized debt costs

    94,169       100,590  

Net non-current bank debt

  $ 7,563,061     $ 8,194,679  

 

 

 

 

8. NOTES PAYABLE

 

Convertible Notes Payable - Related Party

The Company is party to a Convertible Loan Agreement (as amended, “Convertible Loan”) with Roundball, LLC (“Roundball”). The Convertible Loan provides approximately $467,000 of liquidity to meet  working capital requirements of the Company and allows $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.34%.  Borrowings under the Convertible Loan mature December 30, 2019.  Roundball, a major shareholder of the Company, is an affiliate of Steven Rosen and Matthew Crawford, who serve on the Board of Directors of the Company.

 

The Convertible Loan provides Roundball with the option to elect to convert amounts outstanding under the Convertible Loan into Class A Common Shares at a conversion price of $1.43 per Class A Common Share. In December 2018, the Convertible Loan was amended to provide Roundball with the option to elect to convert, subject to shareholder approval which was obtained on May 10, 2019, a portion of the indebtedness into Class B Common Shares at a conversion price of $1.43 per Class B Common Share, up to a maximum amount of 75,000 Class B Common Shares.

 

The outstanding balance on the Convertible Loan as of March 31, 2019 and December 31, 2018, respectively was $200,000.

 

In connection with the Convertible Loan, the Company issued a warrant to Roundball to purchase, at its option, up to 100,000 shares of Class A Common Stock of the Company at an exercise price of $2.50 per share, subject to certain anti-dilution and other adjustments. The warrant expires on December 30, 2019.

 

Notes Payable – Related Party

The Company has 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 $2,000,000, and the second was issued with original principal in the amount of $2,768,662. The promissory notes each have an interest rate of 6.25% per annum, which was increased from 4.0% per annum as part of the July 2018 amendments. In addition, the promissory note with original principal amount of $2,768,662 was amended in July 2018 to provide for a conversion option commencing July 5, 2019 which allows First Francis to convert the promissory note, in whole in part with respect to a maximum amount of $648,000, into shares of the Company’s Class B common stock at the price of $6.48 per share (subject to adjustment), subject to shareholder approval which was obtained on May 10, 2019. First Francis is owned by Edward Crawford and Matthew Crawford, who serve on the Board of Directors of the Company. 

 

10

 

 

Notes Payable – Seller Note

Effective July 1, 2018, the Company completed the acquisition of CAD for an aggregate purchase price of $21 million, $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 (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 the Company.   Interest accrued on the original principal amount became due and payable in arrears beginning September 30, 2018, and subsequent interest is due on the first day of each calendar quarter thereafter up to and including the quarter ending June 30, 2019.  The Company is required to make quarterly principal payments, the amount of which will be calculated based on a four (4) year amortization schedule, beginning on September 30, 2019 and continuing on the last day of each calendar quarter thereafter up to and including the Maturity Date.

  

 

Notes payable consists of the following:

 

   

March 31,

2019

   

December 31,

2018

 
                 

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. The remaining balance of the note shall be payable in full on July 1, 2022.

  $ 1,440,544     $ 1,485,061  
                 

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. The remaining balance of the note shall be payable in full on July 1, 2022.

    2,096,346       2,157,004  
                 

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. No principal payments will be made until September 2019.

    9,000,000       9,000,000  
                 

Total notes payable – related party

    12,536,890       12,642,065  
                 

Less current portion

    2,124,892       1,555,663  
                 

Notes payable – related party non-current portion

  $ 10,411,998     $ 11,086,402  

 

 

 

9. LEASES

 

On January 1, 2019, the Company adopted ASU 2016-02 “Leases (Topic 842),” a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet. Most prominent among the amendments is the recognition of assets and liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP.

 

The Company has operating and finance leases for facilities, vehicles and equipment. These leases have remaining terms of 2 years to 15 years, some of which include options to extended the leases for up to 10 years.

 

11

 

 

 

 

Supplemental balance sheet information related to leases:

 

   

March 31,

2019

   

December 31,

2018

 

Operating leases:

               

Operating lease right-of-use assets

  $ 9,725,871     $ -  
                 
                 

Other current liabilities

    659,830       -  

Operating lease liabilities

    9,157,675       -  

Total operating lease liabilities

  $ 9,817,505     $ -  
                 
                 
                 
Weighted Average Remaining Lease Term                

Operating Leases (in years)

    11.5 years       -  
                 
Weighted Average Discount Rate                

Operating Leases

    5.0 %     -  

 

 

12

 

 

 

10. EARNINGS PER COMMON SHARE 

 

The following table sets forth the computation of basic and diluted earnings per share.

 

   

Three Months Ended

March 31,

 
                 
   

2019

   

2018

 
                 

Earnings Per Share - Basic

               

Net Income

  $ 1,745,458     $ 373,752  

Weighted average shares of common stock outstanding - Basic

    2,755,265       2,911,057  

Earnings Per Share - Basic

  $ 0.63     $ 0.13  
                 

Earnings Per Share - Diluted

               

Weighted average shares of common stock outstanding - Basic

    2,755,265       2,911,057  

Warrants, Options and Convertible Notes

    423,155       358,796  

Weighted average shares of common stock -Diluted

    3,178,420       3,269,853  

Earnings Per Share - Diluted

  $ 0.55     $ 0.11  

 

 

 

11. ACQUISITIONS

 

Effective July 1, 2018, the Company completed the acquisition of all of the issued and outstanding shares of capital stock of CAD, pursuant to the Share Purchase Agreement.  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 $21 million, $12 million of which was payable in cash at closing, with the remainder paid in the form of 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. 

 

CAD manufactures high end components for the aerospace industry and has one operating location in Phoenix, Arizona. The 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:

 

Cash

  $ 790,417  

Accounts Receivable

    2,221,635  

Inventory

    2,098,732  

Fixed Assets

    10,867,500  

Prepaid and Other Assets

    35,264  

Intangibles Assets

    3,000,000  

Goodwill

    7,326,289  

Total Assets Acquired

  $ 26,339,837  
         

Accounts Payable

  $ 1,846,247  

Accrued Payroll and related expenses

    224,139  

Accrued Expense

    518,816  

Deferred Income Taxes

    2,750,635  

Total Liabilities Assumed

  $ 5,339,837  
         

Net Assets Acquired

  $ 21,000,000  

 

 

 

12. DISPOSITIONS  

 

Effective June 1, 2018, the Company completed the sale (the “Sale”) of certain assets comprising its Test and Measurement business segment (the “Test and Measurement Segment”) to Hickok Waekon, LLC, an Ohio limited liability company (“Buyer”), pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) by and among Buyer, the Company, Supreme Electronics Corp., a Mississippi corporation and wholly-owned subsidiary of the Company (“Supreme”), Waekon Corporation, an Ohio corporation and wholly-owned subsidiary of the Company (“Waekon Corporation”), and Robert L. Bauman, who was a director of the Company. Prior to the effectiveness of the Sale, Supreme and Waekon Corporation owned certain of the assets used in the operation of the Test and Measurement Segment and were primarily responsible for the operation thereof.

 

13

 

 

Upon the closing of the Sale, all of the issued and outstanding shares of capital stock of the Company then-owned, directly or indirectly, by Mr. Bauman or his affiliate, equaling approximately 21,413 shares of Class A Common Stock of the Company and 176,768 shares of Class B Common Stock of the Company, were transferred and assigned to the Company. The shares constituted the consideration received by the Company in the Sale.  Based upon the share price at closing, the value of the proceeds received was approximately $1.6 million.  The net assets sold were approximately $2.7 million.  The Company recorded a loss on sale of approximately $1.2 million in the second quarter of 2018.

  

 


13. SEGMENT AND RELATED INFORMATION  

 

The Company operates three reportable business segments: (1) Aerospace Components, (2) Commercial Air Handling, (3) and Industrial Hose.  The Company operated the Test and Measurement business segment through June 1, 2018, at which time it was sold to Hickok Waekon, LLC. 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.

 

Aerospace Components:
The Aerospace Components segment was added July 1, 2018, when the Company purchased all of the issued and outstanding shares of capital stock of CAD Enterprises, Inc. (“CAD”) in Phoenix, Arizona. This segment manufactures precision components primarily for customers in the aerospace industry.  This segment 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.  Our quality certifications include ISO 9001:2015/AS9100D, as well as Nadcap accreditation for Fluorescent Penetrant Inspection (FPI), Heat Treating/Braze, Non-Conventional Machining EDM, TIG/E-Beam welding.

 

Commercial Air Handling:
The Commercial Air Handling 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 Hose: 

The Industrial Hose segment was added July 1, 2016, when the Company purchased the assets of the Federal Hose Manufacturing, LLC in 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.

 

Test and Measurement: 

The Test and Measurement segment is the legacy business that was started in 1910 when the Company was founded, and was sold June 1, 2018. This business segment included electronic testing products designed and manufactured for the automotive and trucking industries and includes indicators and gauges for the locomotive and aircraft industries. The automotive diagnostic products are sold to original equipment manufacturers and to the aftermarket under several brand names and through a variety of distribution methods. In the aircraft industry, primary customers are manufacturers of commercial, military and personal airplanes. In the locomotive industry, indicators and gauges are sold to manufacturers and servicers of railroad equipment and locomotives.

 

14

 

 

Information by industry segment is set forth below: 

 

   

Three Months Ended

 
   

March 31

 
   

2019

   

2018

 
                 

Sales

               

Commercial Air Handling

  $ 11,744,561     $ 9,115,937  

Test and Measurement

    274,032       1,071,847  

Industrial Hose

    1,797,091       1,690,916  

Aerospace Components

    8,020,403       -  

Total Sales

  $ 21,836,087     $ 11,878,700  
                 

Gross Profit

               

Commercial Air Handling

  $ 3,001,933     $ 2,147,125  

Test and Measurement

    45,214       475,026  

Industrial Hose

    525,735       396,290  

Aerospace Components

    1,257,006       -  

Total Gross Profit

  $ 4,829,888     $ 3,018,441  
                 

Operating Income

               

Commercial Air Handling

  $ 1,782,987     $ 880,106  

Test and Measurement

    45,214       (110,031

)

Industrial Hose

    248,291       140,012  

Aerospace Components

    759,609       -  

Unallocated Corporate General

    (265,030

)

    (267,002

)

Total Operating Income

  $ 2,571,071     $ 643,085  
                 

Income Before Provision for Income Taxes

               

Commercial Air Handling

  $ 1,782,696     $ 865,205  

Test and Measurement

    45,214       (128,949

)

Industrial Hose

    192,479       100,189  

Aerospace Components

    562,956       -  

Loss on sale of business

    -       -  

Unallocated Corporate General & Other

    (254,473

)

    (338,109

)

Income Before Provision for Income Taxes

  $ 2,328,872     $ 498,336  

 

  

 

 

14. SUBSEQUENT EVENTS

 

On April 19, 2019, the Company, completed the acquisition of substantially all of the assets of Data Genomix, Inc., an Ohio corporation (“DG”), pursuant to the terms of an Asset Purchase Agreement (the “Asset Purchase Agreement”) entered into by and between Hickok Operating LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company (“Hickok Operating”), and DG on the date thereof. DG is in the business of developing and commercializing marketing and data analytic technology applications, which applications include, but are not limited to, anglrjobs, topplr, anglrlegal and anglrads.

 

On May 10, 2019, the shareholders approved the issuance of shares of Class B Common Stock of the Company in connection with the conversion of indebtedness outstanding under loan agreements with First Francis Company Inc. and Roundball LLC.  See Note 8, Notes Payable.

 

15

 

 

 

RESULTS OF OPERATIONS.

 

The following discussion is intended to assist in the understanding of the Company's financial position at March 31, 2019 and December 31, 2018, results of operations for the three months ended March 31, 2019 and 2018, and cash flows for the three months ended March 31, 2019 and 2018, and should be read in conjunction with the consolidated financial statements and related notes included elsewhere this Quarterly Report on Form 10-Q and with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. 

 

Items Affecting the Comparability of our Financial Results

Effective June 1, 2018, Hickok Incorporated completed the sale of certain assets comprising its Test and Measurement business segment to Hickok Waekon, LLC, an Ohio limited liability company (“Buyer”). In connection with the transaction, the Company agreed to take commercially reasonable efforts to change its name to one or more names that do not include “Hickok” or “Waekon” or any derivation thereof. The Company is in the process of changing its name and ticker symbol and expects this process to be complete in the near future. The Company does not expect the name change to have an impact on the trading of the stock.

 

Effective July 1, 2018, the Company completed the acquisition of all of the issued and outstanding shares of capital stock of CAD Enterprises, Inc., (“CAD”). The results of this acquisition are reported under the Aerospace Components segment.

 

Accordingly, in light of the timing of these transactions, the Company’s results for the quarter ended on March 31, 2019 include operations in the Aerospace Components segment, but not the Test and Measurement segment. Conversely, our results for the quarter ended March 31, 2018 include operations in the Test and Measurement segment, but not the Aerospace Components segment.

 

 

Results of Operations – Three Months Ended March 31, 2019 and 2018

Sales for the quarter ended March 31, 2019 (“current quarter”) increased to $21.8 million, an increase of approximately $9.9 million or 84% from sales of $11.9 million during the same quarter of the prior year. This increase in sales was primarily attributable to results from the Aerospace Components segment acquired on July 1, 2018, as well as stronger sales in the Commercial Air Handling segment.

 

Cost of sales for the current quarter was $17.0 million compared to $8.9 million, an increase of $8.1 million or 92% from the same quarter of the prior year.  Gross profit was $4.8 million in the current quarter compared to $3.0 million, an increase of $1.8 million from the same quarter of the prior year.  The increase in cost of sales and gross profit was attributable to the addition of the Aerospace Components segment and stronger performance in the Commercial Air Handling segment.

 

There were no product development expenditures during the current quarter as those expenditures historically were related to the Test and Measurement segment which was divested in June 2018. The company had $0.1 million of product and development expenditures in the first quarter of 2018.

 

Selling, general and administrative expenses (SG&A) in the current quarter were $2.3 million, or 10% of sales, compared to $2.3 million, or 19% of sales in the first quarter of last year. Selling, general and administrative expenses decreased as a percentage of sales due to the sale of the Test and Measurement segment.

 

Interest charges in the current quarter were approximately $0.3 million compared to $0.1 million in the same quarter of the prior year. The increase in interest expense was primarily related to the increase in outstanding debt for the quarter resulting from the acquisition of the Aerospace Components segment.

 

Other income, net was $24 thousand in the current quarter compared to $58 thousand other expense, net in the same quarter of the prior year.  Other (income) expense, net was comprised of rental income, gains and losses on the disposal of assets, legal settlements and other miscellaneous charges.

 

Income tax expense in the current quarter was $0.6 million compared to $0.1 million in the same quarter of the prior year. Tax expense in the current period is recorded at the Company’s expected effective tax rate of 25%.

 

Net income in the current quarter was $1.7 million or $0.55 per diluted share as compared to the net income of $0.4 million or $0.11 per diluted share for the same quarter of the prior year.

  

16

 

 

Liquidity and Capital Resources

As described further in Note 11 to our consolidated financial statements, effective July 1, 2018, we completed the CAD acquisition for an aggregate purchase price of $21 million, $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, which is subject to certain post-closing adjustments based on working capital, indebtedness and selling expenses.  In connection with that transaction, we amended our credit agreement to, among other things, increase the maximum availability under our revolving credit facility to $12 million, and to increase the amount of our term loan to $6 million. We also amended our promissory notes payable to First Francis to increase the interest rate payable from 4.0% to 6.25%, and to provide First Francis with the right to convert up to $648,000 principal amount of one note into shares of Class B Common shares at a conversion price of $6.48 per share, subject to shareholder approval which was obtained on May 10, 2019. Subsequently, we also amended our outstanding convertible loan with Roundball to provide Roundball with the option to convert, subject to shareholder approval which was obtained on May 10, 2019, a portion of the indebtedness into Class B Common Shares at a conversion price of $1.43 per Class B Common Share, up to a maximum amount of 75,000 Class B Common Shares.

 

Total current assets at March 31, 2019 decreased to $22.4 million from $23.3 million at December 31, 2018, a decrease of $0.9 million. The decrease in current assets is comprised of the following: a decrease in cash of $2.4 million and a decrease in inventories of $0.2 million, offset by an increase in accounts receivable of $1.3 million and an increase in costs in excess of billings of $0.4 million. Fluctuations in accounts receivable and costs and estimated earnings in excess of billing related to the Commercial Air Handling division are dependent upon progress billing milestones for contracts.

 

Total current liabilities at March 31, 2019 decreased to $15.8 million from $16.9 million at December 31, 2018, a decrease of $1.1 million.  The decrease in current liabilities is comprised of the following: the decrease in billings in excess of costs and earnings (included in unearned revenue on the balance sheet) of $2.2 million; decrease in accounts payable of $0.9 million; and a decrease in accrued payroll of $0.5 million, offset by an increase in current in current portion of notes payable of $0.6 million; an increase accrued income tax payable of $0.7 million; and an increase in leases payable of $0.7 million.  The increase in leases payable is related to the adoption of the new lease accounting standard adopted January 1, 2019 as discussed in Note 1 and Note 9 of the notes to the consolidated financial statements. 

  

Cash used by operating activities for the three months ended March 31, 2019 was approximately $1.3 million, compared to cash provided by operating activities of $0.3 million in the same period a year ago. Cash used by operating activities for the current quarter is comprised of the following: net income of $1.7 million and adjustments for non-cash items of $0.7 million, offset by cash used for working capital adjustments of $3.7 million.  The primary uses of working capital were the increase in accounts receivable of $1.3 million and the decrease in billings in excess of costs and earnings (included in unearned revenue) of $2.2 million. Fluctuations in accounts receivable and costs and estimated earnings in excess of billing related to the Commercial Air Handling division are dependent upon progress billing milestones for contracts.

 

Cash used in investing activities for the three months ended March 31, 2019 of $0.3 million, compared to cash used in investing activities of $0.1 million in the same period a year ago. Cash used in investing activities was for capital expenditures in the normal course of business.

 

Cash used by financing activities was approximately $0.7 million for the three months ended March 31, 2019, compared to cash used by financing activities of $1.9 million in the same period a year ago. Cash used by financing activities for the current quarter was primarily related to: $0.1 million payments against notes and $0.6 million net payments against bank debt.

 

The Company expects positive cash flow from operations to be sufficient to fund working capital needs and service principal and interest payments due related to the bank debt and notes payable. In addition, the Company had $7.9 million available to borrow on the revolving credit facility at March 31, 2019. See Note 7 of the notes to the consolidated financial statements. Management believes the Company has adequate liquidity for debt service, working capital, capital expenditures and other strategic initiatives.

 

Off-Balance Sheet Arrangements

The Company has a secured performance and payment bond in the amount of $1.6 million as surety on completion of the requirements of a commercial air handling contract. 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 expenditures or capital resources.

 

Critical Accounting Policies

The Company’s critical accounting policies are as presented in Notes to Consolidated Financial Statements and Management’s Discuss and Analysis of Financial Condition and Results of Operations in our Annual Report Form 10-K for the year ended December 31, 2018.

 

17

 

 

Forward-Looking Statements

The foregoing discussion includes forward-looking statements relating to the business of the Company. 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:  the Company's ability to effectively integrate acquisitions and manage the larger operations of the combined businesses, the Company's dependence upon a limited number of customers and the aerospace industry, the highly competitive industries in which the Company operates, which includes several competitors with greater financial resources and larger sales organizations, the Company's ability to capitalize on market opportunities in certain sectors,  the Company's ability to obtain cost effective financing and the Company's ability to satisfy obligations under its financing arrangements, as well as the risks described from time to time in the Company’s reports as filed with the Securities and Exchange Commission. Except to the extent required by law, the Company does not undertake and specifically declines any obligation to review or update any forward-looking statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments or otherwise. 

 

ITEM 3. MARKET RISK

 

Not required.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

As of March 31, 2019, 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 Vice President, Finance and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Company's management, including the Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, concluded that the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act") were effective as of March 31, 2019 to ensure that information required to be disclosed by the Company in reports that it files and submits under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and (2) is accumulated and communicated to the Company's management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

There were no changes in the Company's internal control over financial reporting during the quarter ended March 31, 2019 that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

 

 

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS. 

Hickok AE LLC (dba Air Enterprises), a wholly owned subsidiary of Hickok Incorporated, was named as a defendant in a lawsuit filed in Superior Court in Quebec, Canada by Carmichael Engineering Ltd. of Quebec (“Carmichael”). Carmichael’s lawsuit seeks payment of invoices for materials and services it allegedly provided to Air Enterprises prior to the Company’s acquisition and relating to a third-party cooling system. A trial date has been set for April 2020. The Company believes the claims have been improperly brought against Hickok. The Company denies the allegations and will vigorously defend the claims asserted against it. The Company cannot predict the outcome of the above matters or estimate the possible loss or range of loss, if any. Management believes that the allegations are without merit and that the ultimate resolution of these matters will not have a material adverse effect on the consolidated financial condition, results of operations or cash flow of the Company.

 

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

 

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

 

ITEM 5. OTHER INFORMATION

Not applicable.

 

18

 

 

ITEM 6. EXHIBITS

 

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

Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*

XBRL Instance

101.SCH*

XBRL Taxonomy Extension Schema

101.CAL*

XBRL Taxonomy Extension Calculation

101.DEF*

XBRL Extension Definition

101.LAB*

XBRL Taxonomy Extension Labels

101.PRE*

XBRL Taxonomy Extension Presentation

 

*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.

 

19

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned as of the 14th day of May 2019, thereunto duly authorized.

  

  

SIGNATURE:

TITLE

/s/ Brian E. Powers

Chairman, President and Chief

Brian E. Powers

Executive Officer

  

(Principal Executive Officer)

  

  

 

 

 

 

/s/ Kelly J. Marek

Vice President and Chief Financial

Kelly J. Marek

Officer (Principal Accounting and Financial Officer)

  

  

 

20