Espey Mfg. & Electronics (ESP) 10-Q17 May 212021 Q3 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	May 13, 2021
Document And Entity Information [Abstract]
Entity Registrant Name	ESPEY MFG & ELECTRONICS CORP
Entity Central Index Key	0000033533
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2021
Entity Common Stock, Shares Outstanding		2,702,633
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity File Number	1-4383
Entity Incorportion, State or Country Code	NY
Entity Shell Company	false

Balance Sheets

Balance Sheets - USD ($)	Mar. 31, 2021	Jun. 30, 2020
ASSETS:
Cash and cash equivalents	$ 8,488,936	$ 5,402,122
Investment securities	3,008,456	5,141,520
Trade accounts receivable, net of allowance of $3,000	2,257,441	9,013,405
Income tax receivable	168,201
Inventories:
Raw materials	2,070,313	2,057,778
Work-in-process	272,446	614,521
Costs related to contracts in process	16,920,015	12,115,756
Total inventories	19,262,774	14,788,055
Prepaid expenses and other current assets	452,451	396,886
Total current assets	33,638,259	34,741,988
Property, plant and equipment, net	3,101,918	3,466,778
Total assets	36,740,177	38,208,766
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable	2,860,165	2,861,696
Accrued expenses:
Salaries and wages	351,342	469,201
Vacation	773,264	689,834
ESOP payable	143,750
Other	157,644	318,322
Payroll and other taxes withheld	465,345	186,970
Contract liabilities	2,737,963	2,175,235
Income taxes payable		47,707
Total current liabilities	7,489,473	6,748,965
Deferred tax liabilities	179,312	232,953
Total liabilities	7,668,785	6,981,918
Commitments and contingencies (see Note 5)
Common stock, par value $.33-1/3 per share Authorized 10,000,000 shares; Issued 3,129,874 and 3,029,874 shares as of March 31, 2021 and June 30, 2020, respectively. Outstanding 2,702,633 and 2,402,633 as of March 31, 2021 and June 30, 2020, respectively (includes 288,245 and 0 Unearned ESOP shares, respectively)	1,043,291	1,009,958
Capital in excess of par value	23,021,052	19,073,213
Accumulated other comprehensive loss	(2,236)	(3,107)
Retained earnings	16,534,976	18,797,589
Total stockholders equity before ESOP	40,597,083	38,877,653
Less: Unearned ESOP shares	(5,487,000)
Less: Cost of 427,241 and 627,241 shares of common stock in treasury as of March 31, 2021 and June 30, 2020, respectively	(6,038,691)	(7,650,805)
Total stockholders' equity	29,071,392	31,226,848
Total liabilities and stockholders' equity	$ 36,740,177	$ 38,208,766

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance	$ 3,000	$ 3,000
Common stock, par value	$ 0.3333	$ 0.3333
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	3,129,874	3,029,874
Common stock, shares outstanding	2,702,633	2,402,633
Unearned ESOP, shares	288,245	0
Treasury stock, shares	427,241	627,241

Statements of Comprehensive (Lo

Statements of Comprehensive (Loss) Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Net sales	$ 4,205,068	$ 6,191,300	$ 18,432,648	$ 19,401,793
Cost of sales	4,392,222	5,280,367	16,778,967	15,874,364
Gross (loss) profit	(187,154)	910,933	1,653,681	3,527,429
Selling, general and administrative expenses	990,311	1,057,034	2,850,415	3,390,988
Operating (loss) income	(1,177,465)	(146,101)	(1,196,734)	136,441
Other income
Interest income	2,486	20,127	19,456	86,203
Other	4,589	3,391	21,450	23,568
Total other income	7,075	23,518	40,906	109,771
(Loss) income before provision for income taxes	(1,170,390)	(122,583)	(1,155,828)	246,212
(Benefit) provision for income taxes	(100,276)	(18,818)	(94,531)	39,237
Net (loss) income	(1,070,114)	(103,765)	(1,061,297)	206,975
Other comprehensive (loss) income, net of tax:
Unrealized (loss) gain on investment securities	(167)	1,130	871	972
Total comprehensive (loss) income	$ (1,070,281)	$ (102,635)	$ (1,060,426)	$ 207,947
Net (loss) income per share:
Basic	$ (0.44)	$ (0.04)	$ (0.44)	$ 0.09
Diluted	$ (0.44)	$ (0.04)	$ (0.44)	$ 0.09
Weighted average number of shares outstanding:
Basic	2,405,670	2,394,727	2,403,641	2,391,247
Diluted	2,405,670	2,394,727	2,403,641	2,395,787
Dividends per share:	$ 0	$ 0.25	$ 0.50	$ 0.75

Statements of Changes in Stockh

Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Capital in Excess of Par Value [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Unearned ESOP Shares [Member]	Total
Balance, beginning at Jun. 30, 2019	$ 1,009,958	$ 18,731,975	$ (1,299)	$ 20,022,132	$ (7,632,556)	$ (204,706)	$ 31,925,504
Balance, beginning, shares at Jun. 30, 2019	2,401,213				628,661
Comprehensive income (loss):
Net income (loss)				206,975			206,975
Other comprehensive income (loss), net of tax			972				972
Total comprehensive income (loss)							207,947
Stock options exercised		51,300			$ 29,700		81,000
Stock options exercised, shares	3,600				(3,600)
Stock-based compensation		141,450					141,450
Dividends paid on common stock per share				(1,791,094)			(1,791,094)
Purchase of treasury stock					$ (47,949)		(47,949)
Purchase of treasury stock, shares	(2,180)				2,180
Balance, ending at Mar. 31, 2020	$ 1,009,958	18,924,725	(327)	18,438,013	$ (7,650,805)	(204,706)	30,516,858
Balance, ending, common shares at Mar. 31, 2020	2,402,633				627,241
Balance, beginning at Dec. 31, 2019	$ 1,009,958	18,858,202	(1,457)	19,138,895	$ (7,664,005)	(204,706)	31,136,887
Balance, beginning, shares at Dec. 31, 2019	2,401,033				628,841
Comprehensive income (loss):
Net income (loss)				(103,765)			(103,765)
Other comprehensive income (loss), net of tax			1,130				1,130
Total comprehensive income (loss)							(102,635)
Stock options exercised		17,520			$ 13,200		30,720
Stock options exercised, shares	1,600				(1,600)
Stock-based compensation		49,003					49,003
Dividends paid on common stock per share				(597,117)			(597,117)
Purchase of treasury stock
Balance, ending at Mar. 31, 2020	$ 1,009,958	18,924,725	(327)	18,438,013	$ (7,650,805)	(204,706)	30,516,858
Balance, ending, common shares at Mar. 31, 2020	2,402,633				627,241
Balance, beginning at Jun. 30, 2020	$ 1,009,958	19,073,213	(3,107)	18,797,589	$ (7,650,805)		$ 31,226,848
Balance, beginning, shares at Jun. 30, 2020	2,402,633				627,241		2,402,633
Comprehensive income (loss):
Net income (loss)				(1,061,297)			$ (1,061,297)
Other comprehensive income (loss), net of tax			871				871
Total comprehensive income (loss)							$ (1,060,426)
Stock options exercised, shares
Stock-based compensation		106,286					$ 106,286
Dividends paid on common stock per share				(1,201,316)			(1,201,316)
Sale of stock to ESOP	$ 33,333	3,841,553			$ 1,612,114	(5,487,000)
Sale of stock to ESOP, shares	300,000				(200,000)
Balance, ending at Mar. 31, 2021	$ 1,043,291	23,021,052	(2,236)	16,534,976	$ (6,038,691)	(5,487,000)	$ 29,071,392
Balance, ending, common shares at Mar. 31, 2021	2,702,633				427,241		2,702,633
Balance, beginning at Dec. 31, 2020	$ 1,043,291	22,995,640	(2,069)	17,605,090	$ (6,038,691)	(5,487,000)	$ 30,116,261
Balance, beginning, shares at Dec. 31, 2020	2,702,633				427,241		2,702,633
Comprehensive income (loss):
Net income (loss)				(1,070,114)			$ (1,070,114)
Other comprehensive income (loss), net of tax			(167)				(167)
Total comprehensive income (loss)							(1,070,281)
Stock-based compensation		25,412					25,412
Balance, ending at Mar. 31, 2021	$ 1,043,291	$ 23,021,052	$ (2,236)	$ 16,534,976	$ (6,038,691)	$ (5,487,000)	$ 29,071,392
Balance, ending, common shares at Mar. 31, 2021	2,702,633				427,241		2,702,633

Statements of Changes in Stoc_2

Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Statement of Stockholders' Equity [Abstract]
Other comprehensive income (loss), tax portion	$ (44)	$ 217	$ 232	$ 259
Dividends paid per share		$ 0.25	$ 0.50	$ 0.75

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
Statements of Cash Flows (Unaudited) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Cash Flows from Operating Activities:
Net (loss) income	$ (1,061,297)	$ 206,975
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Stock-based compensation	106,286	141,450
Depreciation	399,197	429,543
ESOP compensation expense	218,750	239,061
Loss on disposal of assets		3,757
Deferred income tax benefit	(53,873)	(22,533)
Changes in assets and liabilities:
Decrease in trade accounts receivable	6,755,964	5,888,644
Increase in income taxes receivable	(168,201)	(79,469)
Increase in inventories	(4,474,719)	(3,871,109)
Increase in prepaid expenses and other current assets	(55,565)	(264,460)
Decrease in accounts payable	(1,531)	(624,350)
(Decrease) increase in accrued salaries and wages	(117,859)	62,523
Increase (decrease) in vacation accrual	83,430	(1,064)
Decrease in ESOP payable	(75,000)	(10,625)
(Decrease) increase in other accrued expenses	(160,678)	81,851
Increase (decrease) in payroll and other taxes withheld	278,375	(1,323)
Increase in contract liabilities	562,728	2,785,721
Decrease in income taxes payable	(47,707)	(30,481)
Net cash provided by operating activities	2,188,300	4,934,111
Cash Flows from Investing Activities:
Additions to property, plant and equipment	(34,337)	(210,527)
Purchase of investment securities	(4,294,897)	(7,981,580)
Proceeds from sale/maturity of investment securities	6,429,064	7,943,837
Net cash provided by (used in) investing activities	2,099,830	(248,270)
Cash Flows from Financing Activities:
Dividends on common stock	(1,201,316)	(1,791,094)
Purchase of treasury stock		(47,949)
Proceeds from exercise of stock options		81,000
Net cash used in financing activities	(1,201,316)	(1,758,043)
Increase in cash and cash equivalents	3,086,814	2,927,798
Cash and cash equivalents, beginning of period	5,402,122	1,462,761
Cash and cash equivalents, end of period	8,488,936	4,390,559
Supplemental Schedule of Cash Flow Information:
Income taxes paid	$ 175,250	$ 171,720

Basis of Presentation

Basis of Presentation	9 Months Ended
Basis of Presentation	Mar. 31, 2021
Basis of Presentation [Abstract]
Basis of Presentation	Note 1. Basis of Presentation In the opinion of management the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for such periods. The results for any interim period are not necessarily indicative of the results to be expected for the full fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, inventories, income taxes, and stock-based compensation. Specific to inventories, including work-in-process and contracts in process, management evaluates, quarterly, those estimates used in determining the cost to complete for each contract on Espey Mfg. & Electronics Corp. (the “Company”) sales backlog. In the current fiscal year, due to the pandemic and its impact on the airline industry, the Company received notice from a customer to cancel an in-process contract. As of March 31, 2021, the Company recorded a write-off of inventory to cost of sales reducing the net realizable value of this inventory to zero. The change in estimates may affect the reported amount of inventories and gross profit in the current or a future period. Management bases its estimates on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. These financial statements should be read in conjunction with the Company's most recent audited financial statements included in its report on Form 10-K for the year ended June 30, 2020. Certain reclassifications may have been made to the prior year financial statements to conform to the current year presentation.

Investment Securities

Investment Securities	9 Months Ended
Investment Securities	Mar. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Investment Securities	Note 2. Investment Securities Accounting Standards Codification (“ASC”) 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: § Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. § Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. § Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The carrying amounts of financial instruments, including cash and cash equivalents, short term investment securities, accounts receivable, accounts payable and accrued expenses, approximated fair value as of March 31, 2021 and June 30, 2020 because of the immediate or short-term maturity of these financial instruments. Investment securities at March 31, 2021 and June 30, 2020 consist of certificates of deposit and municipal bonds which are classified as available-for-sale securities and have been determined to be level 1 assets. The cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities by major security type at March 31, 2021 and June 30, 2020 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value March 31, 2021 Certificates of deposit $ 2,938,000 $ — $ — $ 2,938,000 Municipal bonds 70,298 158 — 70,456 Total investment securities $ 3,008,298 $ 158 $ — $ 3,008,456 June 30, 2020 Certificates of deposit $ 4,679,847 $ — $ — $ 4,679,847 Municipal bonds 462,618 1,243 (2,188 ) 461,673 Total investment securities $ 5,142,465 $ 1,243 $ (2,188 ) $ 5,141,520 The portfolio is diversified and highly liquid. At March 31, 2021, the Company did not have any investments in individual securities that have been in a continuous loss position considered to be other than temporary. As of March 31, 2021 and June 30, 2020, the remaining contractual maturities of available-for-sale securities were as follows: Years to Maturity Less than One to One Year Five Years Total March 31, 2021 Available-for-sale $ 3,008,456 $ — $ 3,008,456 June 30, 2020 Available-for-sale $ 5,141,520 $ — $ 5,141,520

Net (Loss) Income per Share

Net (Loss) Income per Share	9 Months Ended
Net (Loss) Income per Share	Mar. 31, 2021
Net Income per Share [Abstract]
Net (Loss) Income per Share	Note 3. Net (Loss) Income per Share Basic net (loss) income per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net (loss) income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. The computation of diluted net (loss) income per share, excluded options to purchase 312,187 shares of our common stock for the three and nine months ended March 31, 2021 and 283,437 shares for the three and nine months ended March 31, 2020, as the effect of including them would be anti-dilutive. As unearned shares owned by the Company’s sponsored leveraged employee stock ownership plan (the “ESOP”) are released or committed-to-be-released, the shares become outstanding for earnings-per-share computations.

Stock Based Compensation

Stock Based Compensation	9 Months Ended
Stock Based Compensation	Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Stock Based Compensation	Note 4. Stock Based Compensation The Company follows ASC 718 in establishing standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, as well as transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements based on the fair value of the share-based payment. ASC 718 establishes fair value as the measurement objective in accounting for share-based payment transactions with employees, except for equity instruments held by employee share ownership plans. Total stock-based compensation expense recognized in the statements of comprehensive (loss) income for the three-month periods ended March 31, 2021 and 2020 was $25,412 and $49,003, respectively, before income taxes. The related total deferred tax benefits were $1,547 and $2,727 for the same periods. Total stock-based compensation expense recognized in the statements of comprehensive (loss) income for the nine-month periods ended March 31, 2021 and 2020, was $106,286 and $141,450, respectively, before income taxes. The related total deferred tax benefits were $5,354 and $7,788 for the same periods. As of March 31, 2021, there was $112,312 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the next 1.75 years. The total deferred tax benefit related to these awards is expected to be $6,166. The Company has one employee stock option plan under which options or stock awards may be granted, the 2017 Stock Option and Restricted Stock Plan (the "2017 Plan"). The Board of Directors may grant options to acquire shares of common stock to employees and non-employee directors of the Company at the fair market value of the common stock on the date of grant. The maximum aggregate number of shares of Common Stock subject to options or awards to non-employee directors is 133,000 and the maximum aggregate number of shares of Common Stock subject to options or awards granted to non-employee directors during any single fiscal year is the lesser of 13,300 and 33 1/3% of the total number of shares subject to options or awards granted in such fiscal year. The maximum number of shares subject to options or awards granted to any individual employee may not exceed 15,000 in a fiscal year. Generally, options granted have a two-year vesting period based on two years of continuous service and have a ten-year contractual life. Option grants provide for accelerated vesting if there is a change in control. Shares issued upon the exercise of options are from those held in Treasury. Options covering 400,000 shares are authorized for issuance under the 2017 Plan, of which 226,354 have been granted as of March 31, 2021. While no further grants of options may be made under the Company’s 2007 Stock Option and Restricted Stock Plan, as of March 31, 2021, 118,250 options were outstanding under such plan of which all are vested and exercisable. ASC 718 requires the use of a valuation model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option valuation model, which incorporates various assumptions including those for dividend yield, volatility, expected life and interest rates. The table below outlines the weighted average assumptions that the Company used to calculate the fair value of each option award for the nine months ended March 31, 2021 and 2020. March 31, 2021 March 31, 2020 Dividend yield 5.54% 4.88% Company’s expected volatility 23.41% 27.81% Risk-free interest rate 0.36% 1.67% Expected term 5.4 yrs 5.3 yrs Weighted average fair value per share of options granted during the period $1.59 $3.03 Effective March 9, 2021, the Company suspended the payment of its regular quarterly dividend. For the nine months ended March 31, 2021 and 2020, the Company paid regular cash dividends of $0.50 and $0.75 per share, respectively. Expected stock price volatility is based on the historical volatility of the Company’s stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options. The expected option term (in years) represents the estimated period of time until exercise and is based on actual historical experience. The following table summarizes stock option activity during the nine months ended March 31, 2021: Employee Stock Options Plan Number of Weighted Weighted Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic to Option Price Term Value Balance at July 1, 2020 276,712 $ 24.30 6.10 Granted 62,025 $ 18.05 9.56 Exercised — — — Forfeited or expired (26,550 ) $ 21.43 — Outstanding at March 31, 2021 312,187 $ 23.30 6.36 $ 0 Vested or expected to vest at March 31, 2021 294,318 $ 23.56 6.19 $ 0 Exercisable at March 31, 2021 202,937 $ 25.55 4.84 $ 0 The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing sale price of the Company’s common stock as reported on the NYSE American on March 31, 2021 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders if all option holders had exercised their options on March 31, 2021. This amount changes based on the fair market value of the Company’s common stock. The total intrinsic values of the options exercised during the nine months ended March 31, 2021 and 2020 were $0 and $263, respectively. The following table summarizes changes in non-vested stock options during the nine months ended March 31, 2021: Weighted Number Average of Shares Grant Date Subject Fair Value to Option (per Option) Non-vested at July 1, 2020 97,192 $ 4.034 Granted 62,025 $ 1.590 Vested (44,667 ) $ 5.140 Forfeited or expired (5,300 ) $ 3.531 Non-vested at March 31, 2021 109,250 $ 2.219

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 5. Commitments and Contingencies The Company from time to time, enters into standby letters of credit agreements with financial institutions primarily relating to the guarantee of future performance on certain contracts. Contingent liabilities on outstanding standby letters of credit agreements aggregated to zero at March 31, 2021 and June 30, 2020. The Company, as a U.S. Government contractor, is subject to audits, reviews, and investigations by the U.S. Government related to its negotiation and performance of government contracts and its accounting for such contracts. Failure to comply with applicable U.S. Government standards by a contractor may result in suspension from eligibility for award of any new government contract and a guilty plea or conviction may result in debarment from eligibility for awards. The government may, in certain cases, also terminate existing contracts, recover damages, and impose other sanctions and penalties. As a result of contract audits the Company will determine a range of possible outcomes and in accordance with ASC 450 “Contingencies” the Company will accrue amounts within a range that appears to be its best estimate of a possible outcome. Adjustments are made to accruals, if any, periodically based on current information. We are party to various litigation matters and claims arising from time to time in the ordinary course of business. While the results of such matters cannot be predicted with certainty, we believe that the final outcome of such matters will not have a material adverse effect on our business, financial condition, results of operations or cash flows. Currently, there are no matters pending.

Revenue

Revenue	9 Months Ended
Revenue	Mar. 31, 2021
Revenue from Contract with Customer [Abstract]
Revenue	Note 6. Revenue The Company follows ASC 606 “Revenue from Contracts with Customers” to determine the recognition of revenue. This standard requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenues. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or services. Significant judgment is required in determining the satisfaction of performance obligations. Revenues from our performance obligations are satisfied over time using the output method which considers the appraisal of results achieved and milestones reached or units delivered based on contractual shipment terms, typically shipping point. Revenue is recognized when, or as, the customer takes control of the product or services. The output method best depicts the transfer of control to the customer as the output method represents work completed. Control is typically transferred to the customer at the shipping point as the Company has a present right to payment, the customer has legal title to the asset, the customer has the significant risks and rewards of ownership of the asset, and in most instances the customer has accepted the asset. Total revenue recognized for the three and nine months ended March 31, 2021 based on units delivered totaled $3,754,628 and $15,479,212, respectively, compared to $4,985,926 and $15,806,805 for the same periods in fiscal year 2020. Total revenue recognized for the three and nine months ended March 31, 2021 based on milestones achieved totaled $450,440 and $2,953,436, respectively, compared to $1,205,374 and $3,594,988 for the same periods in fiscal year 2020. The Company offers a standard one-year product warranty. Product warranties offered by the Company are classified as assurance-type warranties, which means, the warranty only guarantees that the good or service functions as promised. Based on this, the provided warranty is not considered to be a distinct performance obligation. The impact of variable consideration has been considered but none identified which would be required to be allocated to the transaction price as of March 31, 2021. Our payment terms are generally 30-60 days. Contract liabilities were $2,737,963 and $2,175,235 as of March 31, 2021 and June 30, 2020, respectively. The increase in contract liabilities is primarily due to the advance collection of cash on specific contracts, offset in part, by revenue recognized. The company used the practical expedient to expense incremental costs incurred to obtain a contract when the contract term is less than one year. The Company’s backlog at March 31, 2021 totaling $67.3 million is expected, based on expected due dates, to be recognized in the following fiscal years: 19.1% in 2021; 50.6% in 2022; 19.1% in 2023, and 11.2% thereafter.

Recently Issued Accounting Stan

Recently Issued Accounting Standards	9 Months Ended
Recently Issued Accounting Standards	Mar. 31, 2021
Recently Issued Accounting Standards [Abstract]
Recently Issued Accounting Standards	Note 7. Recently Issued Accounting Standards Recent Accounting Pronouncements Adopted In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU is part of the FASB’s larger disclosure framework project intended to improve the effectiveness of financial statement footnote disclosure. ASU 2018-13 modifies required fair value disclosures related primarily to level 3 investments. This ASU is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The adoption of ASU 2018-13 does not have a material effect on the Company’s financial position, results of operations, and cash flows as our investments are currently Level 1. We will, however, continue to evaluate going forward should we obtain any Level 3 investments. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued guidance (ASU 2019-12) intended to simplify the accounting for income taxes. The amendments in this guidance are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 (the Company’s fiscal year beginning July 1, 2021). The Company did not elect early adoption of this guidance and is currently unable to predict the potential impact of this guidance on the Company’s disclosures.

Employee Stock Ownership Plan

Employee Stock Ownership Plan	9 Months Ended
Employee Stock Ownership Plan	Mar. 31, 2021
Employee Stock Ownership Plan [Abstract]
Employee Stock Ownership Plan	Note 8. Employee Stock Ownership Plan The Company ESOP covers all nonunion employees who work 1,000 or more hours per year and are employed on June 30. Prior to December 1, 2020, the ESOP owned 469,119 shares, all of which were allocated to employees. On December 1, 2020, pursuant to a Stock Purchase Agreement dated as of such date, the Company, by selling 300,000 shares of its common stock, par value $0.33 1/3 per share, to the Espey Mfg. & Electronics Corp. Employee Stock Ownership Plan Trust, provided more shares to be allocated to employees for services rendered over the next 15 years. The ESOP paid $18.29 per share, for an aggregate purchase price of $5,487,000. The determination of the purchase price was based on a fairness opinion obtained by an independent valuation firm. The ESOP borrowed from the Corporation an amount equal to the purchase price. The loan will be repaid in fifteen (15) equal annual installments of principal. The Board of Directors has fixed the interest rate and the unpaid balance will bear interest at a fixed rate of 3.00% per annum. The Board of Directors of the Company had approved a purchase price per share equal to the lesser of the trading value on the day of closing or the lowest price listed in the valuation established by the independent valuation firm plus $0.25. The valuation identified a range of $18.04 - $19.43 per share. In making the sale, the Company relied on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, because the shares sold were offered only to the ESOP. After giving effect to the transaction, the ESOP owned 769,119 shares of the Company's 2,702,633 outstanding shares of common stock as of December 1, 2020. The Company makes annual contributions to the ESOP equal to the ESOP's debt service less dividends on unallocated shares received by the ESOP. Any dividends on unallocated shares received by the ESOP are used to pay debt service. Any dividends on allocated ESOP shares are recorded as a reduction of retained earnings. As the debt is repaid, shares are released and allocated to active employees, based on the proportion of debt service paid in the year. The Company accounts for its ESOP in accordance with FASB ASC 718-40. Accordingly, the shares purchased by the ESOP are reported as Unearned ESOP shares in the balance sheets and the statements of changes in stockholders’ equity. As shares are released or committed-to-be-released, the Company reports compensation expense equal to the current average market price of the shares, and the shares become outstanding for earnings-per-share (EPS) computations. ESOP compensation expense was $162,476 and $73,241 for the three-month periods ended March 31, 2021 and 2020, respectively. ESOP compensation expense was $218,750 and $239,061 for the nine-month periods ended March 31, 2021 and 2020, respectively. The ESOP shares as of March 31, 2021 and 2020 were as follows: March 31, 2021 March 31, 2020 Allocated shares 467,104 452,763 Committed-to-be-released shares 11,755 10,625 Unreleased shares 288,245 3,541 Total shares held by the ESOP 767,104 466,929 Fair value of unreleased shares $ 4,381,324 $ 65,544 The Company may at times be required to repurchase shares at the ESOP participants’ request at the fair market value. During the three and nine months ended March 31, 2021 the Company did not repurchase shares previously held by the ESOP. During the three and nine months ended March 31, 2020 the Company repurchased 0 and 2,180 shares previously held by the ESOP for $0 and $47,949, respectively. The ESOP allows for eligible participants to take whole share distributions from the Plan on specific dates in accordance with the provision of the Plan. Share distributions from the ESOP during the nine months ended March 31, 2021 and 2020 totaled 2,015 and 2,180 shares, respectively.

Investment Securities (Tables)

Investment Securities (Tables)	9 Months Ended
Investment Securities (Tables)	Mar. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-Sale Securities	Investment securities at March 31, 2021 and June 30, 2020 consist of certificates of deposit and municipal bonds which are classified as available-for-sale securities and have been determined to be level 1 assets. The cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities by major security type at March 31, 2021 and June 30, 2020 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value March 31, 2021 Certificates of deposit $ 2,938,000 $ — $ — $ 2,938,000 Municipal bonds 70,298 158 — 70,456 Total investment securities $ 3,008,298 $ 158 $ — $ 3,008,456 June 30, 2020 Certificates of deposit $ 4,679,847 $ — $ — $ 4,679,847 Municipal bonds 462,618 1,243 (2,188 ) 461,673 Total investment securities $ 5,142,465 $ 1,243 $ (2,188 ) $ 5,141,520
Schedule of Contractual Maturities	As of March 31, 2021 and June 30, 2020, the remaining contractual maturities of available-for-sale securities were as follows: Years to Maturity Less than One to One Year Five Years Total March 31, 2021 Available-for-sale $ 3,008,456 $ — $ 3,008,456 June 30, 2020 Available-for-sale $ 5,141,520 $ — $ 5,141,520

Stock Based Compensation (Table

Stock Based Compensation (Tables)	9 Months Ended
Stock Based Compensation (Tables)	Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Schedule of Fair Value Assumptions	The table below outlines the weighted average assumptions that the Company used to calculate the fair value of each option award for the nine months ended March 31, 2021 and 2020. March 31, 2021 March 31, 2020 Dividend yield 5.54% 4.88% Company’s expected volatility 23.41% 27.81% Risk-free interest rate 0.36% 1.67% Expected term 5.4 yrs 5.3 yrs Weighted average fair value per share of options granted during the period $1.59 $3.03
Schedule of Stock Option Activity	The following table summarizes stock option activity during the nine months ended March 31, 2021: Employee Stock Options Plan Number of Weighted Weighted Shares Average Remaining Aggregate Subject Exercise Contractual Intrinsic to Option Price Term Value Balance at July 1, 2020 276,712 $ 24.30 6.10 Granted 62,025 $ 18.05 9.56 Exercised — — — Forfeited or expired (26,550 ) $ 21.43 — Outstanding at March 31, 2021 312,187 $ 23.30 6.36 $ 0 Vested or expected to vest at March 31, 2021 294,318 $ 23.56 6.19 $ 0 Exercisable at March 31, 2021 202,937 $ 25.55 4.84 $ 0
Schedule of Changes in Non-Vested Stock Options	The following table summarizes changes in non-vested stock options during the nine months ended March 31, 2021: Weighted Number Average of Shares Grant Date Subject Fair Value to Option (per Option) Non-vested at July 1, 2020 97,192 $ 4.034 Granted 62,025 $ 1.590 Vested (44,667 ) $ 5.140 Forfeited or expired (5,300 ) $ 3.531 Non-vested at March 31, 2021 109,250 $ 2.219

Employee Stock Ownership Plan (

Employee Stock Ownership Plan (Tables)	9 Months Ended
Employee Stock Ownership Plan (Tables)	Mar. 31, 2021
Employee Stock Ownership Plan [Abstract]
Schedule of ESOP shares	The ESOP shares as of March 31, 2021 and 2020 were as follows: March 31, 2021 March 31, 2020 Allocated shares 467,104 452,763 Committed-to-be-released shares 11,755 10,625 Unreleased shares 288,245 3,541 Total shares held by the ESOP 767,104 466,929 Fair value of unreleased shares $ 4,381,324 $ 65,544

Investment Securities (Schedule

Investment Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 3,008,298	$ 5,142,465
Gross Unrealized Gains	158	1,243
Gross Unrealized Losses		(2,188)
Fair Value	3,008,456	5,141,520
Certificates of Deposit [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,938,000	4,679,847
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	2,938,000	4,679,847
Municipal Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	70,298	462,618
Gross Unrealized Gains	158	1,243
Gross Unrealized Losses		(2,188)
Fair Value	$ 70,456	$ 461,673

Investment Securities (Schedu_2

Investment Securities (Schedule of Contractual Maturities) (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Contractual maturities of available-for-sale securities
Less than One Year	$ 3,008,456	$ 5,141,520
One to Five Years
Fair Value	$ 3,008,456	$ 5,141,520

Net (Loss) Income per Share (De

Net (Loss) Income per Share (Details) - shares	3 Months Ended		9 Months Ended
Net (Loss) Income per Share (Details) - shares	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Net Income per Share [Abstract]
Anti-dilutive securities	312,187	283,437	312,187	283,437

Stock Based Compensation (Narra

Stock Based Compensation (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
Stock Based Compensation (Narrative) (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 25,412	$ 49,003	$ 106,286	$ 141,450
Deferred tax benefit related to stock based compensation	1,547	$ 2,727	5,354	$ 7,788
Unrecognized compensation costs	112,312		$ 112,312
Period in which compensation cost will be recognized			1 year 9 months
Deferred tax benefit related to unrecognized compensation costs	$ 6,166		$ 6,166
Granted			62,025
Outstanding	312,187		312,187		276,712
Cash divided paid		$ 0.25	$ 0.50	$ 0.75
Total intrinsic values of the options exercised			$ 0	$ 263
2017 Plan [Member] \| Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			2 years
Expiration period			10 years
Authorized shares under plan	400,000		400,000
Granted			226,354
2017 Plan [Member] \| Non employee directors [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized shares under plan	133,000		133,000
Percentage of total number of shares subject to options or awards, single fiscal year			33.33%
Number of shares subject to option or award, single fiscal year	13,300		13,300
2017 Plan [Member] \| Individual Employee [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares subject to option or award, single fiscal year	15,000		15,000
2007 Plan [Member] \| Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding	118,250		118,250

Stock Based Compensation (Sched

Stock Based Compensation (Schedule of Fair Value Assumptions) (Details) - $ / shares	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Weighted average assumptions to calculation option fair value
Dividend yield	5.54%	4.88%
Company's expected volatility	23.41%	27.81%
Risk-free interest rate	0.36%	1.67%
Expected term	5 years 4 months 24 days	5 years 3 months 19 days
Weighted average fair value per share of options granted during the period	$ 1.59	$ 3.03

Stock Based Compensation (Sch_2

Stock Based Compensation (Schedule of Stock Option Activity) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020
Number of Shares Subject To Option
Balance at July 1, 2020	276,712
Granted	62,025
Exercised
Forfeited or expired	(26,550)
Outstanding at March 31, 2021	312,187	276,712
Vested or expected to vest at March 31, 2021	294,318
Exercisable at March 31, 2021	202,937
Weighted Average Exercise Price
Balance at July 1, 2020	$ 24.30
Granted	18.05
Exercised
Forfeited or expired	21.43
Outstanding at March 31, 2021	23.30	$ 24.30
Vested or expected to vest at March 31, 2021	23.56
Exercisable at March 31, 2021	$ 25.55
Weighted Average Remaining Contractual Term
Outstanding	6 years 4 months 9 days	6 years 1 month 6 days
Granted	9 years 6 months 21 days
Vested or expected to vest at March 31, 2021	6 years 2 months 8 days
Exercisable at March 31, 2021	4 years 10 months 3 days
Aggregate Intrinsic Value
Outstanding at March 31, 2021	$ 0
Vested or expected to vest at March 31, 2021	0
Exercisable at March 31, 2021	$ 0

Stock Based Compensation (Sch_3

Stock Based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details)	9 Months Ended
	Mar. 31, 2021$ / sharesshares
Number of Shares Subject to Option
Non-vested at July 1, 2020 \| shares	97,192
Granted \| shares	62,025
Vested \| shares	(44,667)
Forfeited or expired \| shares	(5,300)
Non-vested at March 31, 2021 \| shares	109,250
Weighted Average Grant Date Fair Value (per Option)
Non-vested at July 1, 2020 \| $ / shares	$ 4.034
Granted \| $ / shares	1.590
Vested \| $ / shares	5.140
Forfeited or expired \| $ / shares	3.531
Non-vested at March 31, 2021 \| $ / shares	$ 2.219

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Standby Letters of Credit [Member]
Contingent liabilities	$ 0	$ 0

Revenue (Details)

Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
Revenue (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue	$ 4,205,068	$ 6,191,300	$ 18,432,648	$ 19,401,793
ASC 606 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract liabilities	2,737,963		2,737,963		$ 2,175,235
ASC 606 [Member] \| Units Delivered [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue	3,754,628	4,985,926	15,479,212	15,806,805
ASC 606 [Member] \| Milestones Achieved [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue	450,440	$ 1,205,374	2,953,436	$ 3,594,988
ASC 606 [Member] \| Backlog [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Intangible assets	$ 67,300,000		$ 67,300,000
Percentage of estimated shipments			19.1% in 2021; 50.6% in 2022; 19.1% in 2023, and 11.2% thereafter

Employee Stock Ownership Plan_2

Employee Stock Ownership Plan (Narrative) (Details)	Dec. 01, 2020$ / sharesshares	Mar. 31, 2021USD ($)$ / sharesshares	Mar. 31, 2020USD ($)shares	Mar. 31, 2021USD ($)h$ / sharesshares	Mar. 31, 2020USD ($)shares	Dec. 31, 2020shares	Jun. 30, 2020shares	Dec. 31, 2019shares	Jun. 30, 2019shares
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of shares allocated to employees		467,104	452,763	467,104	452,763
Number of shares owned		767,104	466,929	767,104	466,929
Common stock, shares outstanding		2,702,633		2,702,633		2,702,633	2,402,633
ESOP compensation expense \| $		$ 162,476	$ 73,241	$ 218,750	$ 239,061
Value of shares repurchased \| $					$ 47,949
Common Stock [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Common stock, shares outstanding		2,702,633	2,402,633	2,702,633	2,402,633	2,702,633	2,402,633	2,401,033	2,401,213
Shares repurchased					(2,180)
Shares distributed				300,000
Employee Stock Ownership Plan [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of hours worked per year to quality for the plan \| h				1,000
Number of shares allocated to employees	469,119
Period of services rendered				15 years
Price per share \| $ / shares		$ 18.29		$ 18.29
Aggregate purchase price \| $				$ 5,487,000
Loan, frequency of periodic payment				annual
Number of loan repayment annual installments		15		15
Interest rate on loan		3.00%		3.00%
Purchase price per share, lower range limit \| $ / shares				$ 18.04
Purchase price per share, upper range limit \| $ / shares				$ 19.43
Number of shares owned	769,119
Common stock, shares outstanding	2,702,633
Shares repurchased				0	2,180
Value of shares repurchased \| $				$ 0	$ 47,949
Shares distributed				2,015	2,180
Employee Stock Ownership Plan [Member] \| Common Stock [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of shares sold	300,000
Sale of stock, price per share \| $ / shares	$ 0.3333

Employee Stock Ownership Plan_3

Employee Stock Ownership Plan (Schedule of ESOP shares) (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Employee Stock Ownership Plan [Abstract]
Allocated shares	467,104	452,763
Committed-to-be-released shares	11,755	10,625
Unreleased shares	288,245	3,541
Total shares held by the ESOP	767,104	466,929
Fair value of unreleased shares	$ 4,381,324	$ 65,544