UNIVERSAL POWER GROUP INC.

CIK:0001372000|SEC Filings

DISCONTINUED OPERATIONS	6 Months Ended
DISCONTINUED OPERATIONS	Jun. 30, 2013
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	NOTE K — DISCONTINUED OPERATIONS On May 4, 2012, pursuant to a Securities Purchase Agreement, dated as of May 4, 2012 (the “Agreement”), the Company sold all of the issued and outstanding membership interests of Monarch for $130,000. Of the purchase price, $50,000 was paid in cash at closing and $80,000 was evidenced by a 6% secured promissory note maturing May 1, 2014. The principal amount of the note and all accrued interest thereon is payable in 24 equal monthly installments of $3,692 beginning on June 1, 2012. The note is secured by a pledge of all of the membership interests in Monarch as well as a lien on all of Monarch’s assets. The purchasers also agreed to sublet from the Company for a minimum term of two years the premises used by Monarch at an annual rental of $42,000. The Agreement contains representations and warranties, covenants and indemnification provisions typical of those in these types of transactions. UPG realized a pre-tax loss of approximately $600,000 related to the sale of Monarch including lease obligations retained for the manufacturing facility.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 210	$ 195
Items not requiring (providing) cash:
Depreciation and amortization	219	239
Provision for bad debts	338	38
Provision for obsolete inventory	208	320
Deferred income taxes	(60)	(249)
Loss on disposal of Monarch		616
Loss on disposal of property and equipment	44
Stock-based compensation	6	6
Changes in operating assets and liabilities
Accounts receivable - trade	(3,836)	(192)
Accounts receivable - other	319	44
Inventories	2,372	(15,120)
Income taxes receivable	196	413
Prepaid expenses and other assets	(508)	(210)
Accounts payable	(569)	6,317
Accrued liabilities	489	(4)
Settlement accrual		(241)
Deferred rent	197	(14)
Net cash used in operating activities	(375)	(7,842)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash received on Monarch sale		40
Purchases of property and equipment	(172)	(51)
Proceeds from sales of property and equipment	8
Net cash used in investing activities	(164)	(11)
CASH FLOWS FROM FINANCING ACTIVITIES
Net activity on line of credit	(219)	7,928
Payments on capital lease and note obligations	(310)	(56)
Net cash provided by (used in) financing activities	(529)	7,872
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(1,068)	19
Cash and cash equivalents at beginning of period	2,069	283
Cash and cash equivalents at end of period	1,001	302
SUPPLEMENTAL DISCLOSURES
Income taxes paid	50	65
Interest paid	200	297
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Acquisition of property and equipment through landlord incentives	932
Acquisition of property and equipment through capital lease	$ 345

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
CURRENT ASSETS
Cash and cash equivalents	$ 1,001	$ 2,069
Accounts receivable:
Trade, net of allowance for doubtful accounts of $403 (unaudited) and $324	12,345	8,847
Other	141	455
Inventories - finished goods, net of allowance for obsolescence of $538 (unaudited) and $423	27,816	30,396
Current deferred tax assets	978	838
Income tax receivable	316	512
Prepaid expenses and other current assets	1,468	970
Total current assets	44,065	44,087
PROPERTY AND EQUIPMENT
Logistics and distribution systems	1,877	1,908
Machinery and equipment	484	709
Furniture and fixtures	911	518
Leasehold improvements	954	395
Vehicles	1	111
Total property and equipment	4,227	3,641
Less accumulated depreciation and amortization	(2,513)	(3,173)
Net property and equipment	1,714	468
GOODWILL	1,387	1,387
INTANGIBLES, net	504	593
OTHER ASSETS	165	155
NON-CURRENT DEFERRED TAX ASSET	277	357
Total noncurrent assets	2,333	2,492
TOTAL ASSETS	48,112	47,047
CURRENT LIABILITIES
Line of credit	11,969	12,188
Accounts payable	6,662	7,231
Accrued liabilities	875	386
Current portion of capital lease and note obligations	730	620
Deferred rent	313
Total current liabilities	20,549	20,425
LONG-TERM LIABILITIES
Capital lease and note obligations, less current portion	3,517	3,608
Deferred rent, less current portion	816
Total long-term liabilities	4,333	3,608
TOTAL LIABILITIES	24,882	24,033
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock - $0.01 par value, 50,000,000 shares authorized, 5,020,000 shares issued and outstanding	50	50
Additional paid-in capital	16,396	16,390
Retained earnings	6,784	6,574
Total shareholders' equity	23,230	23,014
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 48,112	$ 47,047