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Related Party Transactions
12 Months Ended
Dec. 31, 2014
Related Party Transactions [Abstract]  
Related party transactions:

Note 9 – Related party transactions:

 

During 2014, as in previous years, the Company sold products to companies affiliated with its Chairman, President and Chief Executive Officer. The affiliated companies distribute the products outside of the United States and Canada. The Company also provides administrative services to these companies. Sales to the affiliated companies aggregated approximately $1,956,000 and $1,834,000 during the years ended December 31, 2014 and 2013, respectively, and administrative fees aggregated approximately $478,000 and $406,000 during the years ended December 31, 2014 and 2013, respectively.  The Company had accounts receivable from the affiliated companies in connection with the product sales and administrative services aggregating approximately $715,000 and $536,000 at December 31, 2014 and 2013, respectively.

 

Transactions with the affiliated companies were made in the ordinary course of business. While the terms of the sales to the affiliated companies differed from the terms of sale to other customers, the affiliated companies bear their own warehousing, distribution, advertising, selling and marketing costs, as well as their own freight charges (the Company pays freight charges in connection with sales to its domestic customers on all but small orders).  Moreover, the Company does not pay sales commissions with respect to products sold to the affiliated companies.  As a result, the Company believes its profit margins with respect to sales to the affiliated companies are similar to the profit margins it realizes with respect to sales to its larger domestic customers. Management believes that the sales transactions did not involve more than normal credit risk or present other unfavorable features.

 

A subsidiary of the Company currently uses the services of an entity that is owned by the Chairman, President and Chief Executive Officer of the Company to conduct product research and development and to assist in the production of television commercials.  The Company paid the entity $42,000 for research and development services in each of the years ended December 31, 2014 and 2013. In addition, for the year ended December 31, 2014, the Company made a $40,000 prepayment, and for the year ended December 31, 2013, the Company paid $50,000, in each case to the affiliated company for the production of television commercials.

 

The Company leases office and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer.  The Company believes that its rental payments are below market rates.  See Note 10 for a description of the lease terms.

 

A director of the Company is Regional Executive Vice President of an entity from which the Company sources most of its commercial insurance needs at an arm’s length competitive basis.  The Company paid in aggregate approximately $811,000 and $678,000 to the entity during the years ended December 31, 2014 and 2013, respectively.