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font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: justify; line-height: 10.25pt;">2. 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font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 10.25pt;"><font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; font-style: italic;">Fixed assets:</font>&#160;&#160;Fixed assets are stated at cost.&#160;&#160;Depreciation is recorded using the straight-line method over the estimated useful lives.&#160;&#160;The estimated useful life of tooling is five years; machinery and equipment is ten years; furniture and office equipment is five to ten years; and computer software and equipment is three to seven years.&#160;&#160;Leasehold improvements are amortized over the shorter of the term of the lease or the useful life of the asset.&#160;&#160;Costs related to repairs and maintenance are expensed as incurred.&#160;&#160;The costs of sold or retired assets are removed from the related asset and accumulated depreciation accounts and any gain or loss is recognized.&#160;&#160;Depreciation expense was $987,000, $972,000 and $925,000 in 2016, 2015, and 2014, respectively.</div><div style="line-height: 10.25pt;"><br style="line-height: 10.25pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 10.25pt;"><font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; font-style: italic;">Leases:</font>&#160;&#160;Rent expense under non-cancelable operating leases with scheduled rent increases or free rent periods are accounted for on a straight-line basis over the lease term, beginning on the date of control of physical use of the asset or of initial possession.&#160;&#160;The amount of the excess of straight-line rent expense over scheduled payments is recorded as a deferred liability.&#160;&#160;Construction allowances and other such lease incentives are recorded as deferred credits, and are amortized on a straight-line basis as a reduction of rent expense beginning in the period they are deemed to be earned, which generally coincides with the occupancy date.</div><div style="line-height: 10.25pt;"><br style="line-height: 10.25pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 10.25pt;"><font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; font-style: italic;">Goodwill and Intangible assets</font><font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold;">:</font>&#160;We acquire businesses in purchase transactions that result in the recognition of goodwill and intangible assets. The determination of the value of intangible assets requires management to make estimates and assumptions. In accordance with ASC 350-20 "Goodwill", acquired goodwill is not amortized but is subject to impairment testing at least annually and when an event occurs or circumstances change, that indicate it is more likely than not an impairment exists. Factors considered that may trigger an impairment review of either acquired goodwill or intangible assets are: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of use of acquired assets or the strategy for the overall business; significant negative industry or economic trends; and significant decline in market capitalization relative to net book value. Finite lived intangible assets are amortized and are tested for impairment when appropriate. 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font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: justify; line-height: 10.25pt;">14. Stock repurchase program</div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 10.25pt;">&#160;</div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 10.25pt;">On February 25, 2016, our Board of Directors approved a new stock repurchase program (the "Stock Repurchase Program"). Under the Stock Repurchase Program, we are authorized to repurchase up to $5,000,000 of our outstanding shares of common stock from time to time in the open market through December 31, 2017 at prevailing market prices based on market conditions, share price and other factors.&#160; We use the cost method to account for treasury stock purchases, under which the price paid for the stock is charged to the treasury stock account.&#160; Repurchases of our common stock are accounted for as of the settlement date.&#160; From the start of the Stock Repurchase Program on February 25, 2016 through December 31, 2016, we purchased 463,378 shares of our common stock for $3,571,000 at an average price of $7.71 per share.</div><div style="line-height: 10.25pt;"><br style="line-height: 10.25pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 10.25pt;">In 2015 and 2014, under a prior repurchase program, we purchased 166,553 and 434,998 shares of our common stock for $1,020,000 and $2,634,000 at an average price of $6.12 and $6.06 per share, respectively.&#160;&#160;&#160;From January 1, 2005 through December 31, 2016, we repurchased a total of 3,851,967 shares of common stock for $29,752,000, at an average price of $7.72 per share.</div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 10.25pt;">&#160;</div></div> 1020000 2634000 0 3571000 0 0 3571000 0 0 1020000 0 0 0 0 0 0 0 2634000 26181000 29752000 35000 30000 25000 27000 114000 124000 111000 <div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 10.25pt;"><font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; font-style: italic;">Use of estimates</font><font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold;">:</font>&#160;&#160;The accompanying Consolidated Financial Statements were prepared using estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.</div><div style="line-height: 10.25pt;"><br style="line-height: 10.25pt;" /></div></div> 340000 282000 242000 423000 40000 58000 83000 7655000 8307000 7854000 7610000 8307000 7818000 -30000 -26000 -82000 0 -3625000 3625000 1 2 0 0.3 P3Y 5000000 10000000 P36M P1Y