Property, Plant and Equipment

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

5. Property, Plant and Equipment

	June 30,			December 31,
	2013			2012
	($000’s omitted)
Land	$	21		$	21
Buildings		7,260			7,256
Machinery, equipment and tooling		13,354			12,370
		20,635			19,647
Less accumulated depreciation and amortization		(14,009	)		(13,701	)
Total property, plant and equipment	$	6,626		$	5,946

Property, plant and equipment includes land and building in Elma, New York, under a $5,000,000 capital lease which can be purchased for a nominal amount at the end of the lease term. As of June 30, 2013 and December 31, 2012, accumulated amortization on the building amounted to approximately $2,617,000 and $2,552,000, respectively. Amortization expense amounted to $33,000 for the three month periods ended June 30, 2013 and 2012, respectively, and amounted to $65,000 for the six month periods ended June 30, 2013 and 2012, respectively. The associated current and long-term liabilities are discussed in Note 6, Long-Term Debt, of the accompanying consolidated financial statements.

On July 23, 2012, the Company gave notice of termination of a capital lease for machinery and equipment previously reported under a $588,000 capital lease with a related party. Due to the termination, beginning in July 2012, this lease is accounted for as an operating lease rather than a capital lease for the remaining term and the related assets and liabilities were removed from the consolidated balance sheet. See also, Note 7, Capital Lease – Related Party, of the accompanying consolidated financial statements for more information. Amortization expense related to the capital lease related party, included in the loss from operations of a discontinued component, net of tax, amounted to zero and approximately $21,000 for the three month periods ended June 30, 2013 and 2012, respectively, and amounted to approximately zero and $42,000 for the six month periods ended June 30, 2013 and 2012, respectively.

Depreciation expense from continuing operations amounted to $119,000 and $114,000 for the three month periods ended June 30, 2013 and 2012, respectively, and amounted to $238,000 and $227,000 for the six month periods ended June 30, 2013 and 2012, respectively. The combined depreciation and amortization expense from continuing operations amounted to $155,000 and $149,000 for the three month periods ended June 30, 2013 and 2012, respectively, and amounted to $308,000 and $296,000 for the six month periods ended June 30, 2013 and 2012, respectively. The Company believes that it maintains property and casualty insurance in amounts adequate for the risk and nature of its assets and operations and which are generally customary in its industry.

Included in the machinery, equipment and tooling is approximately $947,000 of construction in progress, of which approximately $792,000 relates to the facility expansion and related equipment in Elma, New York, not yet placed in service at June 30, 2013. There was approximately $290,000 of construction in progress at December 31, 2012, all related to this facility expansion and related equipment.