CRAWFORD UNITED Corp - Quarter Report: 2020 March (Form 10-Q)

 

 

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

 

FORM 10-Q 

 

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

 

For the quarterly period ended March 31, 2020

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: 000-000147

 

CRAWFORD UNITED CORPORATION 

(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, Suite 200, Cleveland, Ohio	44108
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number (216) 243-2614

 

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 ☒ 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 ☒ 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 ☒
	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 ☒

 

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

 

As of April 30, 2020, 2,539,629 shares of Class A Common Stock and 771,848 shares of Class B Common Stock were outstanding.

 

 

 

		(Unaudited)
		March 31, 2020				December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents		$	5,418,534			$	2,232,499
Accounts receivable less allowance for doubtful accounts			12,716,637				14,001,795
Contract assets			4,197,918				2,422,379
Inventories-less allowance for obsolete inventory			10,936,788				7,678,690
Prepaid expenses and other current assets			795,907				703,002
Total Current Assets			34,065,784				27,038,365
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements			228,872				228,872
Buildings and leasehold improvements			1,890,494				1,837,009
Machinery and equipment			14,049,260				13,950,444
Total property, plant and equipment			16,168,626				16,016,325
Less accumulated depreciation			4,056,837				3,622,153
Property, Plant and Equipment, Net			12,111,789				12,394,172
Operating Right of Use Asset, Net			9,007,314				9,224,840
OTHER ASSETS:
Goodwill			11,425,853				9,791,745
Intangibles, net of accumulated amortization			8,171,498				3,950,838
Other non-current assets			106,637				88,046
Total Non-Current Other Assets			19,703,988				13,830,629
Total Assets		$	74,888,875			$	62,488,006

		(Unaudited)
		March 31, 2020				December 31, 2019
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Notes payable – current			2,752,449				2,749,459
Bank debt – current			1,333,333				1,333,333
Leases payable - current			727,961				850,664
Accounts payable			8,783,148				6,071,522
Unearned revenue			1,451,613				1,998,578
Accrued expenses			4,514,338				3,281,445
Total Current Liabilities			19,562,842				16,285,001
LONG-TERM LIABILITIES:
Notes payable – long-term			6,988,987				7,676,697
Bank debt – long-term			14,163,181				6,376,594
Deferred income taxes			2,207,734				2,207,734
Leases payable – long term			8,425,563				8,513,448
Total Long-Term Liabilities			31,785,465				24,774,473
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, 2,576,837 shares issued at March 31, 2020 and December 31, 2019, respectively			3,636,272				3,599,806
Class B common shares - 2,500,000 shares authorized, 954,283 shares issued at March 31, 2020 and December 31, 2019, respectively			1,465,522				1,465,522
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, 2020 and December 31, 2019
Class B common shares – 182,435 shares held at March 31, 2020 and December 31, 2019
Retained earnings			18,602,653				16,527,083
Total Stockholders' Equity			23,540,568				21,428,532
Total Liabilities and Stockholders' Equity		$	74,888,875			$	62,488,006

 

		Three Months Ended March 31,
		2020				2019
Total Sales		$	25,281,574			$	21,836,087
Cost of Sales			19,073,431				17,006,199
Gross Profit			6,208,143				4,829,888
Operating Expenses:
Selling, General and administrative expenses			3,069,994				2,258,817
Operating Income			3,138,149				2,571,071
Other (Income) and Expenses:
Interest charges			297,421				266,073
Other (income) expense, net			71,361				(23,874	)
Total Other (Income) and Expenses			368,782				242,199
Income before Provision for Income Taxes			2,769,367				2,328,872
Provision for Income Taxes			693,797				583,414
Net Income		$	2,075,570			$	1,745,458
Net Income Per Common Share - Basic		$	0.63			$	0.63
Net Income Per Common Share - Diluted		$	0.63			$	0.55
Weighted Average Shares of Common Stock Outstanding
Basic			3,311,477				2,755,265
Diluted			3,313,157				3,178,420

 

		COMMON SHARES - NO PAR VALUE
		CLASS A				CLASS B				CONTRIBUTED CAPITAL				TREASURY SHARES				RETAINED EARNINGS				TOTAL
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			348,877				-				-				-				-				348,877
Warrant exercise			250,000				-				-				-				-				250,000
Note conversion			359,629				755,250				-				-				-				1,114,879
Cumulative effect of accounting change related to lease standard			-				-				-				-				(30,572	)			(30,572	)
Net Income			-				-				-				-				6,979,863				6,979,863
Balance at December 31, 2019		$	3,599,806			$	1,465,522			$	1,741,901			$	(1,905,780	)		$	16,527,083			$	21,428,532
Share-based compensation expense			36,466				-				-				-				-				36,466
Net Income			-				-				-				-				2,075,570				2,075,570
Balance at March 31, 2020		$	3,636,272			$	1,465,522			$	1,741,901			$	(1,905,780	)		$	18,602,653			$	23,540,568

		COMMON SHARES ISSUED								TREASURY SHARES								COMMON SHARES OUTSTANDING
		CLASS A				CLASS B				CLASS A				CLASS B				CLASS A				CLASS B
Balance at December 31, 2018			2,161,014				779,283				37,208				182,435				2,123,806				596,848
Stock Awards			64,334				-				-				-				64,334				-
Warrant exercise			100,000				-				-				-				100,000				-
Note conversion			251,489				175,000				-				-				251,489				175,000
Balance at December 31, 2019			2,576,837				954,283				37,208				182,435				2,539,629				771,848
Stock Awards			-				-				-				-				-				-
Warrant exercise			-				-				-				-				-				-
Note conversion			-				-				-				-				-				-
Balance at March 31, 2020			2,576,837				954,283				37,208				182,435				2,539,629				771,848

 

		Three Months Ended March 31,
		2020				2019
Cash Flows from Operating Activities
Net Income		$	2,075,570			$	1,745,458
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			623,465				494,192
Non-cash share-based compensation expense			36,466				223,859
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable			2,056,246				(1,332,723	)
Decrease (Increase) in inventories			(339,843	)			162,988
Decrease (Increase) in contract assets			(1,775,539	)			(398,283	)
Decrease (Increase) in prepaid expenses & other assets			(58,099	)			51,144
Increase (Decrease) in accounts payable			2,305,197				(927,360	)
Increase (Decrease) in accrued expenses			1,239,831				962,492
Increase (Decrease) in unearned revenue			(546,965	)			(2,285,385	)
Total adjustments			3,540,759				(3,049,076	)
Net Cash Provided (Used) by Operating Activities		$	5,616,329			$	(1,303,618	)
Cash Flows from Investing Activities
Cash paid for acquisition			(9,400,000	)			-
Capital expenditures			(122,720	)			(323,447	)
Net Cash (Used in) Investing Activities		$	(9,522,720	)		$	(323,447	)
Cash Flows from Financing Activities
Payments on notes			(684,720	)			(105,175	)
Payments on bank debt			(3,093,747	)			(1,083,334	)
Borrowings on bank debt			10,870,893				451,716
Payments on finance lease			-				(1,639	)
Net Cash Provided by (Used in) Financing Activities		$	7,092,426			$	(738,432	)
Net Increase (decrease) in cash and cash equivalents			3,186,035				(2,365,497	)
Cash and cash equivalents at beginning of period			2,232,499				5,057,626
Cash and cash equivalents at end of period		$	5,418,534			$	2,692,129
Supplemental disclosures of cash flow information
Interest Paid		$	255,742			$	190,462

 

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 Crawford United Corporation 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, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2020. 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 fiscal year ended December 31, 2019. 

 

During the three-month period ended March 31, 2020, there have been no changes to our significant accounting policies.

 

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 fiscal year ended December 31, 2019.

 

Recently Adopted 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. The adoption of this standard did not have a material impact 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. The adoption of this standard did not have a material impact 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 $18,783 and $18,325 at March 31, 2020 and December 31, 2019, respectively.

 

 

 

 

4.  INVENTORY

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

 

 

 

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:

 

  

Amortization of intangibles assets was: $179,340 and $93,591 for the three months ended March 31, 2020 and 2019, 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:

 

 

Depreciation expense was $434,684 and $400,601 for the three months ended March 31, 2020 and 2019, 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 Credit Agreement was amended on September 30, 2019 to expand the revolving loan amount from $12,000,000 to $20,000,000, subject to a borrowing base, and to extend the maturity of revolving facility from June 1, 2021 to June 1, 2024. The Credit Agreement was further amended on December 30, 2019 to eliminate the borrowing base.

 

The revolving facility under the Credit Agreement includes a $3 million sublimit for the issuance of letters of credit thereunder. Interest for borrowings under the revolving facility accrues at a per annum rate equal to Prime Rate or LIBOR plus applicable margins of (i) (0.25%) for Prime Rate loans and (ii) 1.75% for LIBOR loans. The maturity date of the revolving facility is June 1, 2024. Interest for borrowings under the term A loan accrues at a per annum rate equal to Prime Rate or LIBOR plus applicable margins of (i) 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.

 

 

Bank debt balances consist of the following:

 

 

The Company had $8.2 million and $16.3 million available to borrow on the revolving credit facility at March 31, 2020 and December 31, 2019, respectively.   

 

8. NOTES PAYABLE

 

Convertible Notes Payable

The Company converted all of the convertible notes payable in fiscal year 2019 and no longer is party to any agreements of this nature. Interest expense related to convertible notes was $0 and $34 thousand for the three months ended March 31, 2020 and 2019, respectively.

 

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 to the Credit Agreement. 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.  On July 9, 2019, First Francis exercised its option to convert $648,000 of existing indebtedness into 100,000 Class B Common Shares of the Company. First Francis is owned by Matthew Crawford, who serves on the Board of Directors of the Company, and Edward Crawford, who served on the Board of Directors of the Company until June 17, 2019.  

 

Notes Payable – Seller Note

Effective July 1, 2018, the Company completed the acquisition of all of the issued and outstanding shares of capital stock of CAD.  Upon the closing of the transaction, the CAD shares were transferred and assigned to the Company in consideration of the payment by the Company of an aggregate purchase price of $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 CAD.   Interest accrued on the original principal amount becomes 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 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:

 

 

 

 

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.

 

Supplemental balance sheet information related to leases:

 

 

 

 

10. EARNINGS PER COMMON SHARE 

 

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

 

 

 

 

11. ACQUISITIONS

 

Effective January 2, 2020, the Company completed the acquisition of substantially all of the assets of MPI Products, Inc. (dba Marine Products International) (“MPI”), pursuant to the Asset Purchase Agreement entered into by and between Crawford United Acquisition Company LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company, and MPI. Upon closing of the agreement, the assets were transferred to the Company in consideration of a purchase price of $9.4 million in cash, which was subject to post-closing adjustments based on working capital.

 

MPI manufactures and distributes industrial hoses used by the recreational boating industry and has one operating location in Cleveland, Ohio. Purchase price was assigned to the book value of the net assets acquired with the excess over the book value assigned to intangible assets and goodwill and has been allocated to the following accounts:

 

 

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 entered into by and between Hickok Operating LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company, 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 topplr, anglrjobs, anglrlegal and anglrads.

 

 

12. SEGMENT AND RELATED INFORMATION  

 

The Company operates three reportable business segments: (1) Aerospace Components, (2) Commercial Air Handling, (3) and Industrial Hose. 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. 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 of Painesville, Ohio. This business segment includes the manufacture of flexible interlocking metal hoses and the distribution of silicone and hydraulic hoses. Metal hoses are sold primarily to major heavy-duty truck manufacturers and major aftermarket suppliers in North America. Metal hoses are also sold into the agricultural, industrial and petrochemical markets. Silicone hoses are distributed to a number of industries in North America, including agriculture and general industrial markets. The Company added the distribution of flexible hose for recreational boating to this segment through the acquisition of the assets of MPI Products on January 2, 2020.

 

Corporate and Other: 

Corporate costs not allocated to the three primary business segments are aggregated with the results of DG, acquired in April 2019.

 

 

Information by industry segment is set forth below: 

 

 

 

  

 

13. UNCERTAINTIES

 

 While the recent outbreak of the coronavirus (COVID-19) did not have a material adverse effect on the Company’s reported results for the three months ended March 31, 2020, the Company is actively monitoring the impact of the coronavirus outbreak, which is expected to negatively impact the Company’s business and results of operations for the second quarter and likely beyond. The extent to which the Company’s business and operations will be impacted by the outbreak will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact, among other things.

 

 

 

14. SUBSEQUENT EVENTS

 

On April 10, 2020, Crawford United Corporation (the “Company”) entered into a promissory note (the “Promissory Note”) with JP Morgan Chase Bank, N.A., which provides for a loan in the amount of $3,679,383 (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). On May 5, 2020, the Company instructed JPMorgan to repay in full the Promissory Note pursuant to the Paycheck Protection Program under the CARES Act.