P&F Industries (PFIN) 10-Q12 May 232023 Q1 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 05, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	1-5332
Entity Registrant Name	P&F INDUSTRIES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	22-1657413
Entity Address, Address Line One	445 Broadhollow Road, Suite 100
Entity Address, City or Town	Melville
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11747
City Area Code	631
Local Phone Number	694-9800
Title of 12(b) Security	Class A common stock, $1.00 par value
Trading Symbol	PFIN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		3,194,699
Entity Central Index Key	0000075340
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash	$ 561,000	$ 667,000
Accounts receivable - net	9,139,000	7,370,000
Inventories	23,654,000	24,491,000
Prepaid expenses and other current assets	1,112,000	2,753,000
TOTAL CURRENT ASSETS	34,466,000	35,281,000
PROPERTY AND EQUIPMENT
Land	507,000	507,000
Buildings and improvements	4,087,000	4,087,000
Machinery and equipment	28,964,000	28,057,000
Property and Equipment, Gross	33,558,000	32,651,000
Less accumulated depreciation and amortization	23,800,000	23,288,000
NET PROPERTY AND EQUIPMENT	9,758,000	9,363,000
GOODWILL	4,825,000	4,822,000
OTHER INTANGIBLE ASSETS - net	5,158,000	5,326,000
DEFERRED INCOME TAXES - net	472,000	629,000
RIGHT-OF-USE ASSETS - OPERATING LEASES	5,309,000	5,521,000
OTHER ASSETS - net	78,000	62,000
TOTAL ASSETS	60,066,000	61,004,000
CURRENT LIABILITIES
Short-term borrowings	7,602,000	7,570,000
Accounts payable	2,219,000	3,094,000
Accrued compensation and benefits	1,009,000	1,757,000
Accrued other liabilities	1,647,000	1,002,000
Current leased liabilities - operating leases	916,000	1,020,000
TOTAL CURRENT LIABILITIES	13,393,000	14,443,000
Noncurrent leased liabilities - operating leases	4,426,000	4,535,000
Other liabilities	63,000	70,000
TOTAL LIABILITIES	17,882,000	19,048,000
SHAREHOLDERS' EQUITY
Preferred stock - $10 par; authorized - 2,000,000 shares; no shares issued
Additional paid-in capital	14,263,000	14,246,000
Retained earnings	34,428,000	34,251,000
Treasury stock, at cost - 1,273,000 shares at March 31, 2023, and December 31, 2022	(10,213,000)	(10,213,000)
Accumulated other comprehensive loss	(761,000)	(795,000)
TOTAL SHAREHOLDERS' EQUITY	42,184,000	41,956,000
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	60,066,000	61,004,000
Class A Common Stock
SHAREHOLDERS' EQUITY
Common stock	$ 4,467,000	$ 4,467,000

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Preferred stock, par value (in dollars per share)	$ 10	$ 10
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Treasury stock, shares	1,273,000	1,273,000
Class A Common Stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized	7,000,000	7,000,000
Common stock, shares issued	4,467,000	4,467,000
Class B Common Stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized	2,000,000	2,000,000
Common stock, shares issued	0	0

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Net revenue	$ 15,742,000	$ 14,021,000
Cost of sales	10,000,000	9,510,000
Gross profit	5,742,000	4,511,000
Selling, general and administrative expenses	5,175,000	5,173,000
Operating income (loss)	567,000	(662,000)
Other income	36,000
Interest expense-net	(109,000)	(52,000)
Income (loss) before income taxes	494,000	(714,000)
Income tax (expense) benefit	(157,000)	96,000
Net income (loss)	$ 337,000	$ (618,000)
Basic income (loss) per share	$ 0.11	$ (0.19)
Diluted income (loss) per share	$ 0.11	$ (0.19)
Weighted average common shares outstanding:
Basic	3,195,000	3,169,000
Diluted	3,195,000	3,169,000
Net income (loss)	$ 337,000	$ (618,000)
Other comprehensive income (loss) - foreign currency translation adjustment	34,000	(50,000)
Total comprehensive income (loss)	$ 371,000	$ (668,000)

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Class A Common Stock Class A Common Stock, $1 Par	Additional paid-in capital	Retained earnings	Treasury stock	Accumulated other comprehensive loss	Total
Balance at Dec. 31, 2021	$ 4,453,000	$ 14,167,000	$ 36,046,000	$ (10,213,000)	$ (613,000)	$ 43,840,000
Balance (in shares) at Dec. 31, 2021	4,453,000
Treasury stock (in shares) at Dec. 31, 2021				(1,273,000)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	$ 0	0	(618,000)	$ 0	0	(618,000)
Restricted common stock-based compensation	$ 0	8,000	0	0	0	8,000
Restricted common stock-based compensation (in shares)	0
Stock - based compensation	$ 0	1,000	0	0	0	1,000
Foreign currency translation adjustment	0	0	0	$ 0	(50,000)	(50,000)
Treasury stock (in shares) at Mar. 31, 2022				(1,273,000)
Balance at Mar. 31, 2022	$ 4,453,000	14,176,000	35,428,000	$ (10,213,000)	(663,000)	43,181,000
Balance (in shares) at Mar. 31, 2022	4,453,000
Balance at Dec. 31, 2022	$ 4,467,000	14,246,000	34,251,000	$ (10,213,000)	(795,000)	41,956,000
Balance (in shares) at Dec. 31, 2022	4,467,000
Treasury stock (in shares) at Dec. 31, 2022				(1,273,000)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	$ 0	0	337,000	$ 0	0	337,000
Restricted common stock-based compensation	$ 0	9,000	0	0	0	9,000
Restricted common stock-based compensation (in shares)	0
Stock - based compensation	$ 0	8,000	0	0	0	8,000
Dividends	0	0	(160,000)	0	0	(160,000)
Foreign currency translation adjustment	0	0	0	$ 0	34,000	34,000
Treasury stock (in shares) at Mar. 31, 2023				(1,273,000)
Balance at Mar. 31, 2023	$ 4,467,000	$ 14,263,000	$ 34,428,000	$ (10,213,000)	$ (761,000)	$ 42,184,000
Balance (in shares) at Mar. 31, 2023	4,467,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Mar. 31, 2023	Mar. 31, 2022
Cash Flows from Operating Activities:
Net income (loss)	$ 337,000	$ (618,000)
Non-cash and other charges:
Depreciation	511,000	443,000
Amortization of other intangible assets	173,000	157,000
Amortization of operating lease assets	237,000	232,000
Amortization of debt issue costs	19,000	4,000
Amortization of consideration payable to a customer		67,000
Provision for (recovery of) losses on accounts receivable	23,000	(12,000)
Stock-based compensation	8,000	1,000
Restricted stock-based compensation	9,000	8,000
Deferred income taxes	168,000	(102,000)
Gain on disposal of fixed assets	(21,000)
Dividends declared but not paid	(160,000)
Changes in operating assets and liabilities:
Accounts receivable	(1,783,000)	(844,000)
Inventories	861,000	(3,243,000)
Prepaid expenses and other current assets	1,640,000	(144,000)
Accounts payable	(876,000)	716,000
Accrued compensation and benefits	(749,000)	270,000
Accrued other liabilities and other current liabilities	639,000	(672,000)
Operating lease liabilities	(239,000)	(226,000)
Other liabilities	(7,000)	(9,000)
Total adjustments	453,000	(3,354,000)
Net cash provided by (used in) operating activities	790,000	(3,972,000)
Cash Flows from Investing Activities:
Capital expenditures	(905,000)	(380,000)
Proceeds from the sale of fixed assets	21,000
Purchase of net assets of the Jackson Gear Company business		(2,300,000)
Net cash used in investing activities	(884,000)	(2,680,000)
Cash Flows from Financing Activities:
Bank financing costs	(35,000)
Net proceeds from short-term borrowings	33,000	6,757,000
Net cash (used in) provided by financing activities	(2,000)	6,757,000
Effect of exchange rate changes on cash	(10,000)	(2,000)
Net (decrease) increase in cash	(106,000)	103,000
Cash at beginning of period	667,000	539,000
Cash at end of period	561,000	642,000
Cash paid for:
Interest	$ 119,000	36,000
Non-cash information:
Right of Use ("ROU") assets recognized for new operating lease liabilities		$ 987,000

BUSINESS AND SUMMARY OF ACCOUNT

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES	3 Months Ended
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES	Mar. 31, 2023
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES	NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all normal, recurring adjustments necessary to present fairly the information set forth therein. Results for interim periods are not necessarily indicative of results to be expected for a full year. The consolidated balance sheet information as of December 31, 2022, was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). The unaudited consolidated financial statements contained herein should be read in conjunction with the 2022 Form 10-K. The consolidated financial statements have been reported in U.S. dollars by translating asset and liability amounts of a foreign wholly-owned subsidiary at the closing exchange rate, equity amounts at historical rates and the results of operations and cash flow at the average of the prevailing exchange rates during the periods reported. As a result, the Company is exposed to foreign currency translation gains or losses. These gains or losses are presented in the Company’s consolidated financial statements as “Other comprehensive income (loss) - foreign currency translation adjustment.” Principles of Consolidation The unaudited consolidated financial statements contained herein include the accounts of P&F Industries, Inc., and its subsidiaries (“P&F” or the “Company”). All significant intercompany balances and transactions have been eliminated. The Company P&F, a Delaware corporation incorporated in 1963, conducts its business through a wholly-owned subsidiary, Continental Tool Group, Inc. (“Continental”), which in turn operates through its wholly-owned subsidiaries, Florida Pneumatic Manufacturing Corporation (“Florida Pneumatic”) and Hy-Tech Machine, Inc. (“Hy-Tech”). Florida Pneumatic Florida Pneumatic directly, and through its wholly-owned subsidiaries Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”), and Jiffy Air Tool, Inc. (“Jiffy”) imports, manufactures, and markets pneumatic hand tools of its own design, primarily to the retail, industrial, automotive and aerospace markets. Its products include sanders, grinders, drills, saws, and impact wrenches. These tools are similar in appearance and function to electric hand tools, but are powered by compressed air, rather than by electricity or a battery. Air tools, as they are more commonly referred to, generally offer a better power-to-weight ratio than their electrical counterparts. Florida Pneumatic imports and/or manufactures approximately 75 types of pneumatic hand tools, most of which are sold at prices ranging from $50 to $1,000, under the names “Florida Pneumatic,” “Universal Tool”, “Jiffy Air Tool”, AIRCAT, NITROCAT, as well as under the trade names or trademarks of several private label customers. These products are sold to retailers, distributors, manufacturers and private label customers through in-house sales personnel and manufacturers’ representatives. The AIRCAT and NITROCAT brands of pneumatic tools are sold primarily to the automotive service and repair market (“automotive market”). Users of Florida Pneumatic’s hand tools include industrial maintenance and production personnel, do-it-yourself mechanics, professional automobile mechanics and auto body personnel. Jiffy manufactures and distributes pneumatic tools and components primarily to aerospace manufacturers. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) The Company - Continued Hy-Tech Hy-Tech designs, manufactures, and markets industrial tools, systems, gearing, accessories, and a wide variety of replacement parts under various brands including ATP, NUMATX, and Thaxton. Hy-Tech produces and sells heavy-duty pneumatic impact tools, grinders, air motors, hydro-pneumatic riveters, hydrostatic test plugs, impact sockets and custom gears, with prices ranging from $300 to $62,000. Hy-Tech’s “Engineered Solutions” products are sold directly to Original Equipment Manufacturers (“OEM’s”), and industrial branded products are sold through a broad network of specialized industrial distributors serving the power generation, petrochemical, aerospace, construction, railroad, mining, ship building and fabricated metals industries, among others. Hy-Tech works directly with its industrial customers, designing and manufacturing products from finished components to complete turnkey systems to be sold under their own brand names. Hy-Tech’s “Power Transmission Group”, commonly referred to as “PTG”, produces spiral bevel and straight bevel gears along with a wide variety of other gearing. These products are sold direct to OEMs, end-users and gearbox repair companies. PTG works directly with its customers’ engineering departments to design or redesign gears or gearboxes to optimize a solution for functionality and manufacturability. Effective January 15, 2022, through a wholly-owned subsidiary of Hy-Tech, we acquired substantially all the non-real estate assets comprising the business of Jackson Gear Company (“JGC”), a Pennsylvania-based corporation that manufactures and distributes custom gears and power transmission gear products. This business was consolidated into PTG. and provides added market exposure into the larger gears market. Nearly all of Hy-Tech brands are manufactured in the United States of America. Hy-Tech markets ATP branded impact sockets, striking wrenches and accessories that are imported from Asia. COVID-19 The adverse effects of the COVID-19 global pandemic on the Company’s results of operations and financial condition during the three-month period ended March 31, 2023, have decreased significantly, compared to the adverse effects the pandemic caused during the prior two years. The Company, however, continues to encounter supply-chain issues, most notably it continues to encounter some shipping / receiving delays of inventory from its Asian suppliers, in turn causing intermittent shortages of inventory. Additionally, while costs associated with international freight have returned to approximately pre-pandemic levels, domestic freight costs remain high. While the negative effects of the COVID-19 pandemic have eased, the Company believes certain adverse effects of the COVID-19 pandemic will continue to some extent. The fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions, and, as a result, present material uncertainty and risk with respect to the Company’s results of operations. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Going Concern Assessment Management assesses going concern uncertainty to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period,” as defined in US GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, it considers various scenarios, forecasts, projections, estimates and makes certain key assumptions, including the timing and nature of projected cash expenditures, its ability to reduce, delay or curtail cash outflows and its ability to raise additional capital, if necessary, among other factors. Management has prepared estimates of operations covering the look-forward period and believes that sufficient funds will be generated from operations, working capital, and its existing credit facility to fund its operations. The Company has contingency plans in which it would further reduce or defer additional expenses and cash outlays, should operations weaken beyond current forecasts. The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is unclear what the full impact of COVID-19 will be in the future or when the Company believes a return to more normal operations may occur. As of March 31, 2023, the Company had borrowing availability on its bank facility of $7,800,000. Lastly, the Company is not in default on any bank covenant and believes its relationship with the bank is good. See Note 8 – Debt, for further discussion. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Customer Concentration The Company had one customer that accounted for 22.9% and 24.3% of its consolidated accounts receivable at March 31, 2023, and December 31, 2022, respectively. Further, this customer accounted for 16.2% and 21.5% of the Company’s consolidated revenue during the three -month periods ended March 31, 2023, and 2022, respectively. There was no other customer that accounted for more than 10% of our consolidated revenue during these three-month periods. Management Estimates The preparation of financial statements and related disclosures in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, goodwill, intangible assets and other long-lived assets, income taxes, deferred taxes and lease liabilities. Descriptions of these policies are discussed in the Company’s 2022 Form 10-K. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. Significant Accounting Policies The Company’s significant accounting policies are described in “Note 1: Summary of Significant Accounting Policies” to the Company’s 2022 Form 10-K. NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Lease Accounting The Company adheres to the standards set forth in Accounting Standards Codification No. 842, Leases As permitted under ASC Topic 842, if the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The Company’s operating leases include vehicles, office space and the use of real property. The Company has not identified any new material finance leases during the three -month period ended March 31, 2023. The Company considers any options to extend the term of a lease when measuring the Right-of-Use lease asset. For the three -month periods ended March 31, 2023, and 2022, the Company had $237,000 and $232,000, respectively, in operating lease expense. The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities: As of March 31, 2023 2023 (excluding the three months ended March 31, 2023) $ 602,000 2024 918,000 2025 816,000 2026 691,000 2027 719,000 Thereafter 2,728,000 Total operating lease payments 6,474,000 Less imputed interest (1,132,000) Total operating lease liabilities $ 5,342,000 Weighted average remaining lease term 7.7 years Weighted average discount rate 5.0 % Revenue Recognition The Company’s revenue recognition policies are detailed in its 2022 Form 10-K. The following tables present the Company’s revenues recognized under ASC Topic 606, “Revenue from Contracts with Customers”, for the three -month periods ended March 31, 2023, and 2022. NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Florida Pneumatic Florida Pneumatic markets its air tool products to four primary sectors within the pneumatic tool market: Retail, Automotive, Industrial and Aerospace. It also generates revenue from its Berkley products line, as well as a line of air filters and other OEM parts, which are reported as Other. Three months ended March 31, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,259,000 32.8 % $ 3,881,000 37.7 % $ (622,000) (16.0) % Retail 2,550,000 25.7 3,020,000 29.5 (470,000) (15.6) Industrial 1,578,000 15.9 1,444,000 14.0 134,000 9.3 Aerospace 2,411,000 24.3 1,777,000 17.3 634,000 35.7 Other 126,000 1.3 159,000 1.5 (33,000) (20.8) Total $ 9,924,000 100.0 % $ 10,281,000 100.0 % $ (357,000) (3.5) % Hy-Tech Hy-Tech designs, manufactures, and sells a wide range of industrial products which are categorized as ATP for reporting purposes. In addition to Engineered Solutions, products and components manufactured for other companies under their brands are included in the OEM category in the table below. PTG revenue is comprised of products manufactured and sold by Hy-Tech’s gear business. NUMATX, Thaxton and other peripheral product lines, such as general machining, are reported as Other. Three months ended March 31, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 3,073,000 52.8 % $ 1,965,000 52.6 % $ 1,108,000 56.4 % PTG 1,933,000 33.2 940,000 25.1 993,000 105.6 ATP 697,000 12.0 742,000 19.8 (45,000) (6.1) Other 115,000 2.0 93,000 2.5 22,000 23.7 Total $ 5,818,000 100.0 % $ 3,740,000 100.0 % $ 2,078,000 55.6 % Recently Adopted Accounting Pronouncements During the three-month period ended March 31, 2023, there were no accounting pronouncements or other authoritative guidance issued or that became effective, that had, or is expected to have, a material impact on the Company’s Consolidated financial statements.

EARNINGS _(LOSS) PER SHARE

EARNINGS /(LOSS) PER SHARE	3 Months Ended
EARNINGS /(LOSS) PER SHARE	Mar. 31, 2023
EARNINGS /(LOSS) PER SHARE
EARNINGS /(LOSS) PER SHARE	NOTE 2 - EARNINGS /(LOSS) PER SHARE Basic earnings (loss) per common share is based only on the weighted average number of shares of Common Stock outstanding for the periods. Diluted earnings (loss) per common share reflects the effect of shares of Common Stock issuable upon the exercise of options unless the effect on earnings is anti-dilutive. Diluted earnings (loss) per common share is computed using the treasury stock method. Under this method, the aggregate number of shares of Common Stock outstanding reflects the assumed use of proceeds from the hypothetical exercise of any outstanding options to purchase shares of Common Stock. The average market value for the period is used as the assumed purchase price. The following table sets forth the elements of basic and diluted earnings (loss) income per common share: Three months ended March 31, 2023 2022 Numerator for basic and diluted earnings (loss) per common share: Net income (loss) $ 337,000 $ (618,000) Denominator: Denominator for basic earnings (loss) per share - weighted average common shares outstanding 3,195,000 3,169,000 Dilutive securities (1) — — Denominator for diluted earnings (loss) per share - weighted average common shares outstanding 3,195,000 3,169,000 (1)

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
STOCK-BASED COMPENSATION	Mar. 31, 2023
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION	NOTE 3 – STOCK-BASED COMPENSATION There were no options or shares of the Company's common stock granted or issued during the three-month period ended March 31, 2023. Weighted Weighted average average remaining Aggregate exercise contractual life Intrinsic Option shares price (years) Value Outstanding, January 1, 2023 127,600 $ 7.41 3.3 $ — Granted — — — — Exercised — — — — Forfeited (5,000) — — — Expired — — — — Outstanding, March 31, 2023 122,600 7.39 2.9 $ — Vested, March 31, 2023 122,600 7.39 2.9 $ — Restricted Stock On May 25, 2022, the Company granted 1,250 restricted shares of its Common Stock to each non-employee member of its Board of Directors, totaling 6,250 restricted shares. The Company determined that the fair value of these shares was $5.50 per share, which was the closing price of the Company’s Common Stock on the date of the grant. These shares cannot be traded earlier than the first anniversary of the grant date. The Company ratably amortizes the total non-cash compensation expense of approximately $34,000 to selling, general and administrative expenses during the period beginning May 2022 through May 2023.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
FAIR VALUE MEASUREMENTS	Mar. 31, 2023
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	NOTE 4 – FAIR VALUE MEASUREMENTS Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company is required to classify certain assets and liabilities based on the following hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets that can be assessed at the measurement date. Level 2: Inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. The guidance requires the use of observable market data if such data is available without undue cost and effort. As of March 31, 2023, and December 31, 2022, the carrying amounts reflected in the accompanying consolidated balance sheets for current assets and current liabilities approximated fair value due to the short-term nature of these accounts. Assets and liabilities measured at fair value on a non-recurring basis include goodwill and intangible assets. Such assets are reviewed quarterly for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (Level 3).

ACCOUNTS RECEIVABLE AND ALLOWAN

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	3 Months Ended
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	Mar. 31, 2023
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	NOTE 5 – ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable - net consists of: March 31, 2023 December 31, 2022 Accounts receivable $ 9,475,000 $ 7,683,000 Allowance for doubtful accounts, sales discounts and chargebacks (336,000) (313,000) $ 9,139,000 $ 7,370,000 Net accounts receivable at January 1, 2022, was $ 7,550,000.

INVENTORIES

INVENTORIES	3 Months Ended
INVENTORIES	Mar. 31, 2023
INVENTORIES
INVENTORIES	NOTE 6 – INVENTORIES Inventories consist of: March 31, 2023 December 31, 2022 Raw material $ 2,058,000 $ 2,000,000 Work in process 2,487,000 2,242,000 Finished goods 19,109,000 20,249,000 $ 23,654,000 $ 24,491,000

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	3 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS	Mar. 31, 2023
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS	NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill are as follows: Balance, January 1, 2023 $ 4,822,000 Currency translation adjustment 3,000 Balance, March 31, 2023 $ 4,825,000 Other intangible assets March 31, 2023 December 31, 2022 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,926,000 $ 4,247,000 $ 2,679,000 $ 6,921,000 $ 4,099,000 $ 2,822,000 Trademarks and trade names (1) 2,170,000 — 2,170,000 2,166,000 — 2,166,000 Trademarks and trade names 200,000 89,000 111,000 200,000 86,000 114,000 Engineering drawings 330,000 272,000 58,000 330,000 268,000 62,000 Non-compete agreements (1) 324,000 311,000 13,000 322,000 303,000 19,000 Patents 1,286,000 1,159,000 127,000 1,286,000 1,143,000 143,000 Totals $ 11,236,000 $ 6,078,000 $ 5,158,000 $ 11,225,000 $ 5,899,000 $ 5,326,000 (1) Amortization expense of intangible assets subject to amortization was as follows: Three months ended March 31, 2023 2022 $ 173,000 $ 157,000 Amortization expense for the balance of 2023, and for each of the next four years and thereafter is estimated to be as follows: April 1 through December 31, 2023 $ 514,000 2024 639,000 2025 610,000 2026 412,000 2027 198,000 Thereafter 615,000 $ 2,988,000 The weighted average amortization period for intangible assets was as follows: March 31, 2023 December 31, 2022 Customer relationships 5.8 5.9 Trademarks and trade names 8.3 8.5 Engineering drawings 3.9 4.1 Non-compete agreements 0.8 1.0 Patents 4.1 4.1

DEBT

DEBT	3 Months Ended
DEBT	Mar. 31, 2023
DEBT
DEBT	NOTE 8 – DEBT In October 2010, the Company entered into a Loan and Security Agreement (“Credit Agreement”) with an affiliate of Capital One, National Association (“Capital One” or the “Bank”). The Credit Agreement, as amended and restated in April 2017, and further amended from time-to-time, among other things, provides the ability to borrow funds under a $16,000,000 revolver line (“Revolver”), subject to certain borrowing base criteria. Revolver borrowings are secured by the Company’s accounts receivable, inventory, equipment, and real property, among other things. P&F and certain of its subsidiaries are borrowers under the Credit Agreement, and their obligations are cross guaranteed by certain other subsidiaries. On March 24, 2023, the Company and the Bank entered into Amendment No. 11 (“Amendment 11”) to the Credit Agreement, which among other things: ● revised the expiration date to February 8, 2027; and ● eliminated a $1,600,000 Capex Loan line of credit. Until the effective date of Amendment No. 10, to the Credit Agreement April 12, 2022, at the Company’s option, Revolver borrowings would bear interest at either LIBOR or the Base Rate, as the terms are defined in the Credit Agreement, plus an Applicable Margin, as defined in the Credit Agreement. Additionally, the Company was subject to limitations on the number of LIBOR borrowings. Under the terms Amendment No. 10, the Company began applying SOFR rates instead of LIBOR. The Company will continue to be subject to the number of SOFR borrowings. The change from LIBOR to SOFR did not have a significant effect on the Company’s consolidated financial statements. At March 31, 2023, short-term or Revolver borrowing was $7,602,000, compared to $7,570,000 at December 31, 2022. The average balance of short-term borrowings during the three-month periods ended March 31, 2023, and 2022, were $7,287,000, and $10,157,000, respectively. The Company provides Capital One with monthly borrowing base certificates, and in certain circumstances, it is required to deliver monthly financial statements and certificates of compliance with various financial covenants. Should an event of default occur the interest rate would increase by two percent per annum during the period of default, in addition to other remedies provided to Capital One. During the three-month periods ended March 31, 2023, and at December 31, 2022, Applicable Margin Rates, as defined in the Credit Agreement were 2.10% and 1.10%, respectively for SOFR and Base Rate borrowings. Additionally, at March 31, 2023, and December 31, 2022, there was approximately $7,800,000 and $7,687,000, respectively, available to the Company under its Revolver arrangement.

DIVIDENDS

DIVIDENDS	3 Months Ended
DIVIDENDS	Mar. 31, 2023
DIVIDENDS
DIVIDENDS	NOTE 9 – DIVIDENDS On March 20, 2023, the Company’s Board of Directors approved a dividend policy under which the Company intends to declare a cash dividend to the Company’s stockholders in the amount of $0.20 per share per annum, payable in equal quarterly installments. In conjunction therewith, the Company’s Board of Directors declared a quarterly cash dividend of $0.05 per share to stockholders of record at the close of business on March 31, 2023. This dividend was paid on April 6, 2023.

BUSINESS AND SUMMARY OF ACCOU_2

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies)	3 Months Ended
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies)	Mar. 31, 2023
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Basis of Financial Statement Presentation	Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all normal, recurring adjustments necessary to present fairly the information set forth therein. Results for interim periods are not necessarily indicative of results to be expected for a full year. The consolidated balance sheet information as of December 31, 2022, was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). The unaudited consolidated financial statements contained herein should be read in conjunction with the 2022 Form 10-K. The consolidated financial statements have been reported in U.S. dollars by translating asset and liability amounts of a foreign wholly-owned subsidiary at the closing exchange rate, equity amounts at historical rates and the results of operations and cash flow at the average of the prevailing exchange rates during the periods reported. As a result, the Company is exposed to foreign currency translation gains or losses. These gains or losses are presented in the Company’s consolidated financial statements as “Other comprehensive income (loss) - foreign currency translation adjustment.”
Principles of Consolidation	Principles of Consolidation The unaudited consolidated financial statements contained herein include the accounts of P&F Industries, Inc., and its subsidiaries (“P&F” or the “Company”). All significant intercompany balances and transactions have been eliminated.
The Company	The Company P&F, a Delaware corporation incorporated in 1963, conducts its business through a wholly-owned subsidiary, Continental Tool Group, Inc. (“Continental”), which in turn operates through its wholly-owned subsidiaries, Florida Pneumatic Manufacturing Corporation (“Florida Pneumatic”) and Hy-Tech Machine, Inc. (“Hy-Tech”). Florida Pneumatic Florida Pneumatic directly, and through its wholly-owned subsidiaries Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”), and Jiffy Air Tool, Inc. (“Jiffy”) imports, manufactures, and markets pneumatic hand tools of its own design, primarily to the retail, industrial, automotive and aerospace markets. Its products include sanders, grinders, drills, saws, and impact wrenches. These tools are similar in appearance and function to electric hand tools, but are powered by compressed air, rather than by electricity or a battery. Air tools, as they are more commonly referred to, generally offer a better power-to-weight ratio than their electrical counterparts. Florida Pneumatic imports and/or manufactures approximately 75 types of pneumatic hand tools, most of which are sold at prices ranging from $50 to $1,000, under the names “Florida Pneumatic,” “Universal Tool”, “Jiffy Air Tool”, AIRCAT, NITROCAT, as well as under the trade names or trademarks of several private label customers. These products are sold to retailers, distributors, manufacturers and private label customers through in-house sales personnel and manufacturers’ representatives. The AIRCAT and NITROCAT brands of pneumatic tools are sold primarily to the automotive service and repair market (“automotive market”). Users of Florida Pneumatic’s hand tools include industrial maintenance and production personnel, do-it-yourself mechanics, professional automobile mechanics and auto body personnel. Jiffy manufactures and distributes pneumatic tools and components primarily to aerospace manufacturers. NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) The Company - Continued Hy-Tech Hy-Tech designs, manufactures, and markets industrial tools, systems, gearing, accessories, and a wide variety of replacement parts under various brands including ATP, NUMATX, and Thaxton. Hy-Tech produces and sells heavy-duty pneumatic impact tools, grinders, air motors, hydro-pneumatic riveters, hydrostatic test plugs, impact sockets and custom gears, with prices ranging from $300 to $62,000. Hy-Tech’s “Engineered Solutions” products are sold directly to Original Equipment Manufacturers (“OEM’s”), and industrial branded products are sold through a broad network of specialized industrial distributors serving the power generation, petrochemical, aerospace, construction, railroad, mining, ship building and fabricated metals industries, among others. Hy-Tech works directly with its industrial customers, designing and manufacturing products from finished components to complete turnkey systems to be sold under their own brand names. Hy-Tech’s “Power Transmission Group”, commonly referred to as “PTG”, produces spiral bevel and straight bevel gears along with a wide variety of other gearing. These products are sold direct to OEMs, end-users and gearbox repair companies. PTG works directly with its customers’ engineering departments to design or redesign gears or gearboxes to optimize a solution for functionality and manufacturability. Effective January 15, 2022, through a wholly-owned subsidiary of Hy-Tech, we acquired substantially all the non-real estate assets comprising the business of Jackson Gear Company (“JGC”), a Pennsylvania-based corporation that manufactures and distributes custom gears and power transmission gear products. This business was consolidated into PTG. and provides added market exposure into the larger gears market. Nearly all of Hy-Tech brands are manufactured in the United States of America. Hy-Tech markets ATP branded impact sockets, striking wrenches and accessories that are imported from Asia. COVID-19 The adverse effects of the COVID-19 global pandemic on the Company’s results of operations and financial condition during the three-month period ended March 31, 2023, have decreased significantly, compared to the adverse effects the pandemic caused during the prior two years. The Company, however, continues to encounter supply-chain issues, most notably it continues to encounter some shipping / receiving delays of inventory from its Asian suppliers, in turn causing intermittent shortages of inventory. Additionally, while costs associated with international freight have returned to approximately pre-pandemic levels, domestic freight costs remain high. While the negative effects of the COVID-19 pandemic have eased, the Company believes certain adverse effects of the COVID-19 pandemic will continue to some extent. The fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions, and, as a result, present material uncertainty and risk with respect to the Company’s results of operations.
Going Concern Assessment	Going Concern Assessment Management assesses going concern uncertainty to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period,” as defined in US GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, it considers various scenarios, forecasts, projections, estimates and makes certain key assumptions, including the timing and nature of projected cash expenditures, its ability to reduce, delay or curtail cash outflows and its ability to raise additional capital, if necessary, among other factors. Management has prepared estimates of operations covering the look-forward period and believes that sufficient funds will be generated from operations, working capital, and its existing credit facility to fund its operations. The Company has contingency plans in which it would further reduce or defer additional expenses and cash outlays, should operations weaken beyond current forecasts. The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is unclear what the full impact of COVID-19 will be in the future or when the Company believes a return to more normal operations may occur. As of March 31, 2023, the Company had borrowing availability on its bank facility of $7,800,000. Lastly, the Company is not in default on any bank covenant and believes its relationship with the bank is good. See Note 8 – Debt, for further discussion. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business.
Customer Concentration	Customer Concentration The Company had one customer that accounted for 22.9% and 24.3% of its consolidated accounts receivable at March 31, 2023, and December 31, 2022, respectively. Further, this customer accounted for 16.2% and 21.5% of the Company’s consolidated revenue during the three -month periods ended March 31, 2023, and 2022, respectively. There was no other customer that accounted for more than 10% of our consolidated revenue during these three-month periods.
Management Estimates	Management Estimates The preparation of financial statements and related disclosures in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, goodwill, intangible assets and other long-lived assets, income taxes, deferred taxes and lease liabilities. Descriptions of these policies are discussed in the Company’s 2022 Form 10-K. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. Significant Accounting Policies The Company’s significant accounting policies are described in “Note 1: Summary of Significant Accounting Policies” to the Company’s 2022 Form 10-K.
Lease Accounting	Lease Accounting The Company adheres to the standards set forth in Accounting Standards Codification No. 842, Leases As permitted under ASC Topic 842, if the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The Company’s operating leases include vehicles, office space and the use of real property. The Company has not identified any new material finance leases during the three -month period ended March 31, 2023. The Company considers any options to extend the term of a lease when measuring the Right-of-Use lease asset. For the three -month periods ended March 31, 2023, and 2022, the Company had $237,000 and $232,000, respectively, in operating lease expense. The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities: As of March 31, 2023 2023 (excluding the three months ended March 31, 2023) $ 602,000 2024 918,000 2025 816,000 2026 691,000 2027 719,000 Thereafter 2,728,000 Total operating lease payments 6,474,000 Less imputed interest (1,132,000) Total operating lease liabilities $ 5,342,000 Weighted average remaining lease term 7.7 years Weighted average discount rate 5.0 %
Revenue Recognition	Revenue Recognition The Company’s revenue recognition policies are detailed in its 2022 Form 10-K. The following tables present the Company’s revenues recognized under ASC Topic 606, “Revenue from Contracts with Customers”, for the three -month periods ended March 31, 2023, and 2022. NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - (Continued) Florida Pneumatic Florida Pneumatic markets its air tool products to four primary sectors within the pneumatic tool market: Retail, Automotive, Industrial and Aerospace. It also generates revenue from its Berkley products line, as well as a line of air filters and other OEM parts, which are reported as Other. Three months ended March 31, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,259,000 32.8 % $ 3,881,000 37.7 % $ (622,000) (16.0) % Retail 2,550,000 25.7 3,020,000 29.5 (470,000) (15.6) Industrial 1,578,000 15.9 1,444,000 14.0 134,000 9.3 Aerospace 2,411,000 24.3 1,777,000 17.3 634,000 35.7 Other 126,000 1.3 159,000 1.5 (33,000) (20.8) Total $ 9,924,000 100.0 % $ 10,281,000 100.0 % $ (357,000) (3.5) % Hy-Tech Hy-Tech designs, manufactures, and sells a wide range of industrial products which are categorized as ATP for reporting purposes. In addition to Engineered Solutions, products and components manufactured for other companies under their brands are included in the OEM category in the table below. PTG revenue is comprised of products manufactured and sold by Hy-Tech’s gear business. NUMATX, Thaxton and other peripheral product lines, such as general machining, are reported as Other. Three months ended March 31, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 3,073,000 52.8 % $ 1,965,000 52.6 % $ 1,108,000 56.4 % PTG 1,933,000 33.2 940,000 25.1 993,000 105.6 ATP 697,000 12.0 742,000 19.8 (45,000) (6.1) Other 115,000 2.0 93,000 2.5 22,000 23.7 Total $ 5,818,000 100.0 % $ 3,740,000 100.0 % $ 2,078,000 55.6 %
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements During the three-month period ended March 31, 2023, there were no accounting pronouncements or other authoritative guidance issued or that became effective, that had, or is expected to have, a material impact on the Company’s Consolidated financial statements.

BUSINESS AND SUMMARY OF ACCOU_3

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Tables)	3 Months Ended
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Tables)	Mar. 31, 2023
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Schedule of operating lease liabilities	As of March 31, 2023 2023 (excluding the three months ended March 31, 2023) $ 602,000 2024 918,000 2025 816,000 2026 691,000 2027 719,000 Thereafter 2,728,000 Total operating lease payments 6,474,000 Less imputed interest (1,132,000) Total operating lease liabilities $ 5,342,000 Weighted average remaining lease term 7.7 years Weighted average discount rate 5.0 %
Schedule of Revenue	Three months ended March 31, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 3,259,000 32.8 % $ 3,881,000 37.7 % $ (622,000) (16.0) % Retail 2,550,000 25.7 3,020,000 29.5 (470,000) (15.6) Industrial 1,578,000 15.9 1,444,000 14.0 134,000 9.3 Aerospace 2,411,000 24.3 1,777,000 17.3 634,000 35.7 Other 126,000 1.3 159,000 1.5 (33,000) (20.8) Total $ 9,924,000 100.0 % $ 10,281,000 100.0 % $ (357,000) (3.5) % Three months ended March 31, 2023 2022 Increase (decrease) Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 3,073,000 52.8 % $ 1,965,000 52.6 % $ 1,108,000 56.4 % PTG 1,933,000 33.2 940,000 25.1 993,000 105.6 ATP 697,000 12.0 742,000 19.8 (45,000) (6.1) Other 115,000 2.0 93,000 2.5 22,000 23.7 Total $ 5,818,000 100.0 % $ 3,740,000 100.0 % $ 2,078,000 55.6 %

EARNINGS _(LOSS) PER SHARE (Tab

EARNINGS /(LOSS) PER SHARE (Tables)	3 Months Ended
EARNINGS /(LOSS) PER SHARE (Tables)	Mar. 31, 2023
EARNINGS /(LOSS) PER SHARE
Schedule of computation of basic and diluted earnings (loss) income per common share	Three months ended March 31, 2023 2022 Numerator for basic and diluted earnings (loss) per common share: Net income (loss) $ 337,000 $ (618,000) Denominator: Denominator for basic earnings (loss) per share - weighted average common shares outstanding 3,195,000 3,169,000 Dilutive securities (1) — — Denominator for diluted earnings (loss) per share - weighted average common shares outstanding 3,195,000 3,169,000 (1)

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
STOCK-BASED COMPENSATION (Tables)	Mar. 31, 2023
STOCK-BASED COMPENSATION
Schedule of share-based compensation stock options	Weighted Weighted average average remaining Aggregate exercise contractual life Intrinsic Option shares price (years) Value Outstanding, January 1, 2023 127,600 $ 7.41 3.3 $ — Granted — — — — Exercised — — — — Forfeited (5,000) — — — Expired — — — — Outstanding, March 31, 2023 122,600 7.39 2.9 $ — Vested, March 31, 2023 122,600 7.39 2.9 $ —

ACCOUNTS RECEIVABLE AND ALLOW_2

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables)	3 Months Ended
	Mar. 31, 2023
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Schedule of accounts receivable - net	March 31, 2023 December 31, 2022 Accounts receivable $ 9,475,000 $ 7,683,000 Allowance for doubtful accounts, sales discounts and chargebacks (336,000) (313,000) $ 9,139,000 $ 7,370,000

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
INVENTORIES (Tables)	Mar. 31, 2023
INVENTORIES
Schedule of inventories	March 31, 2023 December 31, 2022 Raw material $ 2,058,000 $ 2,000,000 Work in process 2,487,000 2,242,000 Finished goods 19,109,000 20,249,000 $ 23,654,000 $ 24,491,000

GOODWILL AND OTHER INTANGIBLE_2

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	3 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	Mar. 31, 2023
GOODWILL AND OTHER INTANGIBLE ASSETS
Schedule of changes in the carrying amount of goodwill	Balance, January 1, 2023 $ 4,822,000 Currency translation adjustment 3,000 Balance, March 31, 2023 $ 4,825,000
Schedule of other intangible assets	March 31, 2023 December 31, 2022 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,926,000 $ 4,247,000 $ 2,679,000 $ 6,921,000 $ 4,099,000 $ 2,822,000 Trademarks and trade names (1) 2,170,000 — 2,170,000 2,166,000 — 2,166,000 Trademarks and trade names 200,000 89,000 111,000 200,000 86,000 114,000 Engineering drawings 330,000 272,000 58,000 330,000 268,000 62,000 Non-compete agreements (1) 324,000 311,000 13,000 322,000 303,000 19,000 Patents 1,286,000 1,159,000 127,000 1,286,000 1,143,000 143,000 Totals $ 11,236,000 $ 6,078,000 $ 5,158,000 $ 11,225,000 $ 5,899,000 $ 5,326,000 (1) March 31, 2023 December 31, 2022 Customer relationships 5.8 5.9 Trademarks and trade names 8.3 8.5 Engineering drawings 3.9 4.1 Non-compete agreements 0.8 1.0 Patents 4.1 4.1
Schedule of amortization expense of intangible assets	Three months ended March 31, 2023 2022 $ 173,000 $ 157,000 April 1 through December 31, 2023 $ 514,000 2024 639,000 2025 610,000 2026 412,000 2027 198,000 Thereafter 615,000 $ 2,988,000

BUSINESS AND SUMMARY OF ACCOU_4

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Retail automotive industrial and aerospace (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 15,742,000	$ 14,021,000
Florida Pneumatic
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 9,924,000	$ 10,281,000
Percentage of revenue	100%	100%
Increase (decrease)		$ (357,000)
Percentage of Increase (decrease)		(3.50%)
Florida Pneumatic \| Automotive
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 3,259,000	$ 3,881,000
Percentage of revenue	32.80%	37.70%
Increase (decrease)		$ (622,000)
Percentage of Increase (decrease)		(16.00%)
Florida Pneumatic \| Retail
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 2,550,000	$ 3,020,000
Percentage of revenue	25.70%	29.50%
Increase (decrease)		$ (470,000)
Percentage of Increase (decrease)		(15.60%)
Florida Pneumatic \| Industrial
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 1,578,000	$ 1,444,000
Percentage of revenue	15.90%	14%
Increase (decrease)		$ 134,000
Percentage of Increase (decrease)		9.30%
Florida Pneumatic \| Aerospace
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 2,411,000	$ 1,777,000
Percentage of revenue	24.30%	17.30%
Increase (decrease)		$ 634,000
Percentage of Increase (decrease)		35.70%
Florida Pneumatic \| Other
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 126,000	$ 159,000
Percentage of revenue	1.30%	1.50%
Increase (decrease)		$ (33,000)
Percentage of Increase (decrease)		(20.80%)
Hy-Tech
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 5,818,000	$ 3,740,000
Percentage of revenue	100%	100%
Increase (decrease)		$ 2,078,000
Percentage of Increase (decrease)		55.60%
Hy-Tech \| Other
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 115,000	$ 93,000
Percentage of revenue	2%	2.50%
Increase (decrease)		$ 22,000
Percentage of Increase (decrease)		23.70%
Hy-Tech \| OEM
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 3,073,000	$ 1,965,000
Percentage of revenue	52.80%	52.60%
Increase (decrease)		$ 1,108,000
Percentage of Increase (decrease)		56.40%
Hy-Tech \| PTG
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 1,933,000	$ 940,000
Percentage of revenue	33.20%	25.10%
Increase (decrease)		$ 993,000
Percentage of Increase (decrease)		105.60%
Hy-Tech \| ATP
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Revenues	$ 697,000	$ 742,000
Percentage of revenue	12%	19.80%
Increase (decrease)		$ (45,000)
Percentage of Increase (decrease)		(6.10%)

BUSINESS AND SUMMARY OF ACCOU_5

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Maturity analysis of the annual undiscounted cash flows (Details)	Mar. 31, 2023 USD ($)
Operating lease liabilities
2023 (excluding the three months ended March 31, 2023)	$ 602,000
2024	918,000
2025	816,000
2026	691,000
2027	719,000
Thereafter	2,728,000
Total operating lease payments	6,474,000
Less imputed interest	(1,132,000)
Total operating lease liabilities	$ 5,342,000
Weighted average remaining lease term	7 years 8 months 12 days
Weighted average discount rate	5%

BUSINESS AND SUMMARY OF ACCOU_6

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Customer Concentration (Details) - Accounts Receivable - Customer Concentration Risk	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Home depot
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Concentration risk, percentage	22.90%		24.30%
Amazon.com
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Concentration risk, percentage	16.20%	21.50%

BUSINESS AND SUMMARY OF ACCOU_7

BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - Additional information (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) item $ / product	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Operating lease expense \| $	$ 237,000	$ 232,000
Short-term Debt
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Remaining borrowing capacity \| $	$ 7,800,000		$ 7,687,000
Florida Pneumatic
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Number of types of pneumatic hand tools imported or manufactured \| item	75
Florida Pneumatic \| Minimum
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Sale price per product	50
Florida Pneumatic \| Maximum
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Sale price per product	1,000
Hy-Tech \| Minimum
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Sale price per product	300
Hy-Tech \| Maximum
BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Sale price per product	62,000

EARNINGS _(LOSS) PER SHARE- Los

EARNINGS /(LOSS) PER SHARE- Loss per share basic and diluted (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator for basic and diluted (loss) income per common share:
Net income (loss)	$ 337,000	$ (618,000)
Denominator:
Denominator for basic earnings (loss) per share - weighted average common shares outstanding	3,195,000	3,169,000
Dilutive securities	0	0
Denominator for diluted earnings (loss) per share - weighted average common shares outstanding	3,195,000	3,169,000

STOCK-BASED COMPENSATION - Outs

STOCK-BASED COMPENSATION - Outstanding options (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
STOCK-BASED COMPENSATION
Number of Shares, Outstanding	127,600
Number of Shares, Forfeited	(5,000)
Number of Shares, Outstanding	122,600	127,600
Number of Shares, Vested	122,600
Weighted Average Exercise Price per share, Outstanding (in dollars per share)	$ 7.41
Weighted Average Exercise Price per share, Outstanding (in dollars per share)	7.39	$ 7.41
Weighted Average Exercise Price per share, Vested (in dollars per share)	$ 7.39
Weighted Average Remaining Contractual Life, Vested (Years)	2 years 10 months 24 days
Weighted Average Remaining Contractual Life, Outstanding (Years)	2 years 10 months 24 days	3 years 3 months 18 days

STOCK-BASED COMPENSATION - Rest

STOCK-BASED COMPENSATION - Restricted Stock (Details) - USD ($)	May 25, 2022	Mar. 31, 2023	Dec. 31, 2022
STOCK-BASED COMPENSATION
Share-based compensation arrangement by share-based payment award, options, outstanding, number, beginning balance		122,600	127,600
Restricted Stock
STOCK-BASED COMPENSATION
Share-based compensation arrangement by share-based payment award, number of shares available for grant	1,250
Share-based compensation arrangement by share-based payment award, options, outstanding, number, beginning balance	6,250
Weighted average fair value of options granted	$ 5.50
Restricted stock-based compensation	$ 34,000

ACCOUNTS RECEIVABLE AND ALLOW_3

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Jan. 01, 2022
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable	$ 9,475,000	$ 7,683,000
Allowance for doubtful accounts, sales discounts and chargebacks	(336,000)	(313,000)
Accounts receivable - net	$ 9,139,000	$ 7,370,000	$ 7,550,000

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
INVENTORIES
Raw materials	$ 2,058,000	$ 2,000,000
Work in process	2,487,000	2,242,000
Finished goods	19,109,000	20,249,000
INVENTORIES	$ 23,654,000	$ 24,491,000

GOODWILL AND OTHER INTANGIBLE_3

GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying amount of goodwill (Details)	3 Months Ended
	Mar. 31, 2023 USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
Balance, beginning	$ 4,822,000
Currency translation adjustment	3,000
Balance, ending	$ 4,825,000

GOODWILL AND OTHER INTANGIBLE_4

GOODWILL AND OTHER INTANGIBLE ASSETS - Other intangible assets - (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Other intangible assets:
Cost	$ 11,236,000	$ 11,225,000
Accumulated amortization	6,078,000	5,899,000
Net book value	5,158,000	5,326,000
Customer relationships
Other intangible assets:
Cost	6,926,000	6,921,000
Accumulated amortization	4,247,000	4,099,000
Net book value	$ 2,679,000	$ 2,822,000
Acquired finite-lived intangible assets, weighted average useful life	5 years 9 months 18 days	5 years 10 months 24 days
Trademarks and trade names
Other intangible assets:
Cost	$ 2,170,000	$ 2,166,000
Accumulated amortization	0	0
Net book value	$ 2,170,000	$ 2,166,000
Acquired finite-lived intangible assets, weighted average useful life	8 years 3 months 18 days	8 years 6 months
Trademarks and trade names
Other intangible assets:
Cost	$ 200,000	$ 200,000
Accumulated amortization	89,000	86,000
Net book value	111,000	114,000
Engineering drawings
Other intangible assets:
Cost	330,000	330,000
Accumulated amortization	272,000	268,000
Net book value	$ 58,000	$ 62,000
Acquired finite-lived intangible assets, weighted average useful life	3 years 10 months 24 days	4 years 1 month 6 days
Non-compete agreements
Other intangible assets:
Cost	$ 324,000	$ 322,000
Accumulated amortization	311,000	303,000
Net book value	$ 13,000	$ 19,000
Acquired finite-lived intangible assets, weighted average useful life	9 months 18 days	1 year
Patents
Other intangible assets:
Cost	$ 1,286,000	$ 1,286,000
Accumulated amortization	1,159,000	1,143,000
Net book value	$ 127,000	$ 143,000
Acquired finite-lived intangible assets, weighted average useful life	4 years 1 month 6 days	4 years 1 month 6 days

GOODWILL AND OTHER INTANGIBLE_5

GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense of intangible assets - (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
GOODWILL AND OTHER INTANGIBLE ASSETS
Amortization expense of intangible assets	$ 173,000	$ 157,000

GOODWILL AND OTHER INTANGIBLE_6

GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated amortization expense (Details)	Mar. 31, 2023 USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
April 1 through December 31, 2023	$ 514,000
2024	639,000
2025	610,000
2026	412,000
2027	198,000
Thereafter	615,000
Total	$ 2,988,000

DEBT (Details)

DEBT (Details) - USD ($)	3 Months Ended		12 Months Ended
DEBT (Details) - USD ($)	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Mar. 24, 2023	Apr. 30, 2017
DEBT
Short-term or Revolver borrowings	$ 7,602,000		$ 7,570,000
Increase in interest rate	2%
Short-term Debt
DEBT
Average balances of short-term borrowings	$ 7,287,000	$ 10,157,000
Remaining borrowing capacity	$ 7,800,000		$ 7,687,000
Short-term Debt \| Base Rate
DEBT
Variable rate	1.10%		1.10%
Short-term Debt \| SOFR
DEBT
Variable rate	2.10%		2.10%
Revolving Credit Facility
DEBT
Maximum borrowing capacity					$ 16,000,000
Short-term or Revolver borrowings	$ 7,602,000		$ 7,570,000
Capex Borrowing
DEBT
Eliminated loan				$ 1,600,000

DIVIDENDS (Details)

DIVIDENDS (Details) - $ / shares	Apr. 07, 2023	Mar. 20, 2023
DIVIDENDS
Dividends per share		$ 0.20
Subsequent event
DIVIDENDS
Dividends per share	$ 0.05