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Note 7 - Investment in Foreign Joint Venture | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | 7. INVESTMENTS IN FOREIGN JOINT VENTURES BOMAY We hold a 40% interest in BOMAY Electric Industries Company, Ltd. (“BOMAY”), which builds electrical systems for sale in China. The majority partner in this foreign joint venture is Baoji Oilfield Machinery Co., Ltd. (a subsidiary of China National Petroleum Corporation), who owns 51%. The remaining 9% is owned by AA Energies, Inc. The Company made no sales to its joint venture during 2024 and 2023. We account for our investment in BOMAY using the equity method of accounting. Under the equity method, the Company’s share of the joint venture operations earnings or losses is recognized in the Consolidated Statements of Operations as equity income (loss) from foreign joint venture operations. Joint venture income increases the carrying value of the joint venture and joint venture losses reduce the carrying value. Dividends received from the joint venture reduce the carrying value. The Company considers dividend distributions received from its equity method investments which do not exceed cumulative equity in earnings subsequent to the date of investment to be a return on investment and classifies these distributions as operating activities in the accompanying Consolidated Statements of Cash Flows. The tables below present a summary of BOMAY's assets and liabilities and its operational results as of and for the years ended December 31, 2024 and 2023 in U.S. dollars (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Revenues |  | $ | 117,459 |  |  | $ | 102,981 |
Gross profit |  |  | 14,458 |  |  |  | 12,544 |
Earnings |  |  | 4,101 |  |  |  | 4,418 |
|  | December 31, |
|  | 2024 |  |  | 2023 |
Assets: |  |  |  |  |  |  |  |
Total current assets |  | $ | 124,253 |  |  | $ | 135,217 |
Total non-current assets |  |  | 9,496 |  |  |  | 3,003 |
Total assets |  | $ | 133,749 |  |  | $ | 138,220 |
Liabilities and equity: |  |  |  |  |  |  |  |
Total liabilities |  | $ | 101,562 |  |  | $ | 104,760 |
Total joint ventures’ equity |  |  | 32,187 |  |  |  | 33,460 |
Total liabilities and equity |  | $ | 133,749 |  |  | $ | 138,220 |
The following is a summary of activity in our investment in BOMAY for the years ended December 31, 2024 and 2023 in U.S. dollars (in thousands):
|  | Initial Investment at Merger (1), (2) |  |  | Undistributed Earnings |  |  | Cumulative Foreign Exchange Translation Adj |  |  | Investment in BOMAY |
Balance at December 31, 2022 |  | $ | 9,333 |  |  | $ | 2,295 |  |  | $ | (22 | ) |  | $ | 11,606 |
Equity in earnings |  |  | — |  |  |  | 1,897 |  |  |  | — |  |  |  | 1,897 |
Less: dividend distributions |  |  | — |  |  |  | (1,225 | ) |  |  | — |  |  |  | (1,225 | )
Foreign currency translation loss |  |  | — |  |  |  | — |  |  |  | (269 | ) |  |  | (269 | )
Balance at December 31, 2023 |  |  | 9,333 |  |  |  | 2,967 |  |  |  | (291 | ) |  |  | 12,009 |
Equity in earnings |  |  | — |  |  |  | 1,770 |  |  |  | — |  |  |  | 1,770 |
Less: dividend distributions |  |  | — |  |  |  | (1,716 | ) |  |  | — |  |  |  | (1,716 | )
Foreign currency translation loss |  |  | — |  |  |  | — |  |  |  | (404 | ) |  |  | (404 | )
Balance at December 31, 2024 |  | $ | 9,333 |  |  | $ | 3,021 |  |  | $ | (695 | ) |  | $ | 11,659 |
| (1) | Accumulated statutory reserves in equity method investments of $2.66 million at December 31, 2024 and 2023 is included in our investment in BOMAY. In accordance with the People’s Republic of China, (“PRC”), regulations on enterprises with foreign ownership, an enterprise established in the PRC with foreign ownership is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A non-wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board of directors. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.
| (2) | The Company’s initial investment in BOMAY differed from the Company’s 40% share of BOMAY’s equity as a result of applying fair value accounting pursuant to ASC 805. The basis difference is being accreted over eight years (the expected life of the joint venture). The Company's accretion during the years ended December 31, 2024 and 2023 were both approximately $0.1 million, and is included in income from equity investments in foreign joint ventures in the accompanying Consolidated Statements of Operations. The remaining basis difference is summarized in the following table at December 31, 2024 and 2023 (amounts in thousands):
|  | December 31, |
|  | 2024 |  |  | 2023 |
Original basis difference |  | $ | 1,165 |  |  | $ | 1,165 |
Less accumulated accretion |  |  | (702 | ) |  |  | (573 | )
Net remaining basis difference, net at end of period |  | $ | 463 |  |  | $ | 592 |
In accordance with our long-lived asset policy, when events or circumstances indicate the carrying amount of an asset may not be recoverable, management tests long-lived assets for impairment. If the estimated future cash flows are projected to be less than the carrying amount, an impairment write-down (representing the carrying amount of the long-lived asset which exceeds the present value of estimated expected future cash flows) would be recorded as a period expense. In making this evaluation, a variety of quantitative and qualitative factors are considered including national and local economic, political and market conditions, industry trends and prospects, liquidity and capital resources and other pertinent factors. There were no impairments recognized in the years ended December 31, 2024 and 2023.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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