Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 01, 2018 | Aug. 01, 2018 | |
Entity Registrant Name | UNIROYAL GLOBAL ENGINEERED PRODUCTS, INC. | |
Entity Trading Symbol | UNIR | |
Document Type | 10-Q | |
Document Period End Date | Jul. 1, 2018 | |
Amendment Flag | false | |
Entity Central Index Key | 1,172,706 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Ordinary Common Stock [Member] | ||
Entity Common Stock, Shares Outstanding | 17,070,928 | |
Common Class B [Member] | ||
Entity Common Stock, Shares Outstanding | 1,619,102 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 903,082 | $ 1,267,319 |
Accounts receivable, net | 16,011,212 | 15,167,468 |
Inventories, net | 19,368,331 | 19,769,662 |
Other current assets | 877,091 | 846,362 |
Related party receivable | 2,073 | 37,116 |
Total Current Assets | 37,161,789 | 37,087,927 |
PROPERTY AND EQUIPMENT, NET | 18,043,816 | 17,289,058 |
OTHER ASSETS | ||
Intangible assets | 3,231,439 | 3,295,896 |
Goodwill | 1,079,175 | 1,079,175 |
Other long-term assets | 3,921,695 | 3,902,246 |
Total Other Assets | 8,232,309 | 8,277,317 |
TOTAL ASSETS | 63,437,914 | 62,654,302 |
CURRENT LIABILITIES | ||
Checks issued in excess of bank balance | 705,321 | 686,640 |
Lines of credit | 19,650,799 | 19,340,468 |
Current maturities of long-term debt | 1,187,384 | 1,155,490 |
Current maturities of capital lease obligations | 416,588 | 408,425 |
Accounts payable | 10,363,209 | 10,358,761 |
Accrued expenses and other liabilities | 3,894,980 | 3,594,684 |
Related party obligation | 768,036 | 286,955 |
Current portion of postretirement benefit liability - health and life | 143,287 | 143,287 |
Total Current Liabilities | 37,129,604 | 35,974,710 |
LONG-TERM LIABILITIES | ||
Long-term debt, less current portion | 2,684,591 | 2,467,433 |
Capital lease obligations, less current portion | 301,787 | 531,218 |
Related party lease financing obligation | 2,468,248 | 2,153,327 |
Long-term debt to related parties | 2,459,393 | 2,765,655 |
Postretirement benefit liability - health and life, less current portion | 2,522,261 | 2,547,076 |
Other long-term liabilities | 785,129 | 822,492 |
Total Long-Term Liabilities | 11,221,409 | 11,287,201 |
Total Liabilities | 48,351,013 | 47,261,911 |
STOCKHOLDERS' EQUITY | ||
Preferred units, Series A UEP Holdings, LLC, 200,000 units issued and outstanding ($100 issue price) | 617,571 | 617,571 |
Preferred units, Series B UEP Holdings, LLC, 150,000 units issued and outstanding ($100 issue price) | 463,179 | 463,179 |
Preferred stock, Uniroyal Global (Europe) Limited, 50 shares issued and outstanding ($1.51 stated value) | 75 | 75 |
Common stock, 95,000,000 shares authorized ($.001 par value) 18,690,030 shares issued and outstanding as of both July 1, 2018 and December 31, 2017 | 18,690 | 18,690 |
Additional paid-in capital | 35,138,353 | 34,944,972 |
Accumulated deficit | (20,423,375) | (20,276,944) |
Accumulated other comprehensive loss | (727,592) | (375,152) |
Total Stockholders' Equity | 15,086,901 | 15,392,391 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 63,437,914 | $ 62,654,302 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 01, 2018 | Dec. 31, 2017 |
Assets [Abstract] | ||
Series A UEP Holdings LLC par value | $ 100 | $ 100 |
Series A UEP Holdings LLC shares issued | 200,000 | 200,000 |
Series A UEP Holdings LLC shares outstanding | 200,000 | 200,000 |
Series B UEP Holdings LLC par value | $ 100 | $ 100 |
Series B UEP Holdings LLC shares issued | 150,000 | 150,000 |
Series B UEP Holdings LLC shares outstanding | 150,000 | 150,000 |
Preferred stock, Uniroyal Global (Europe) Limited shares Par value | $ 1.51 | $ 1.51 |
Preferred stock, Uniroyal Global (Europe) Limited shares issued | 50 | 50 |
Preferred stock, Uniroyal Global (Europe) Limited shares outstanding | 50 | 50 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 95,000,000 | 95,000,000 |
Common Stock, shares issued | 18,690,030 | 18,690,030 |
Common Stock, shares outstanding | 18,690,030 | 18,690,030 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2018 | Jul. 02, 2017 | Jul. 01, 2018 | Jul. 02, 2017 | |
Revenues [Abstract] | ||||
NET SALES | $ 26,023,233 | $ 26,077,549 | $ 52,452,920 | $ 51,835,978 |
COST OF GOODS SOLD | 21,259,055 | 20,740,966 | 43,071,248 | 41,123,248 |
Gross Profit | 4,764,178 | 5,336,583 | 9,381,672 | 10,712,730 |
OPERATING EXPENSES: | ||||
Selling | 1,200,051 | 1,325,397 | 2,549,081 | 2,610,344 |
General and administrative | 1,658,665 | 1,929,780 | 3,606,966 | 3,751,246 |
Research and development | 430,565 | 437,104 | 852,528 | 970,958 |
OPERATING EXPENSES | 3,289,281 | 3,692,281 | 7,008,575 | 7,332,548 |
Operating Income | 1,474,897 | 1,644,302 | 2,373,097 | 3,380,182 |
OTHER INCOME (EXPENSE): | ||||
Interest and other debt related expense | (473,663) | (408,794) | (930,027) | (798,650) |
Other income (expense) | (19,220) | (92,379) | 14,062 | 6,875 |
Net Other Expense | (492,883) | (501,173) | (915,965) | (791,775) |
INCOME BEFORE TAX PROVISION | 982,014 | 1,143,129 | 1,457,132 | 2,588,407 |
TAX PROVISION | 57,521 | 191,343 | 43,000 | 425,929 |
NET INCOME | 924,493 | 951,786 | 1,414,132 | 2,162,478 |
Preferred stock dividend | (776,104) | (737,320) | (1,560,563) | (1,477,236) |
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ 148,389 | $ 214,466 | $ (146,431) | $ 685,242 |
EARNINGS (LOSS) PER COMMON SHARE: | ||||
Basic | $ 0.01 | $ 0.01 | $ (0.01) | $ 0.04 |
Diluted | $ 0.01 | $ 0.01 | $ (0.01) | $ 0.04 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic | 18,690,030 | 18,704,024 | 18,690,030 | 18,713,625 |
Diluted | 18,690,030 | 18,809,598 | 18,690,030 | 18,810,191 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2018 | Jul. 02, 2017 | Jul. 01, 2018 | Jul. 02, 2017 | |
COMPREHENSIVE INCOME | ||||
NET INCOME | $ 924,493 | $ 951,786 | $ 1,414,132 | $ 2,162,478 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Minimum benefit liability adjustment | (29,931) | (59,462) | ||
Foreign currency translation adjustment | (776,546) | 397,035 | (292,978) | 542,154 |
OTHER COMPREHENSIVE INCOME (LOSS) | (806,477) | 397,035 | (352,440) | 542,154 |
COMPREHENSIVE INCOME | 118,016 | 1,348,821 | 1,061,692 | 2,704,632 |
Preferred stock dividend | (776,104) | (737,320) | (1,560,563) | (1,477,236) |
COMPREHENSIVE INCOME (LOSS) TO COMMON SHAREHOLDERS | $ (658,088) | $ 611,501 | $ (498,871) | $ 1,227,396 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 6 months ended Jul. 01, 2018 - USD ($) | UEPH Series A Units [Member] | UEPH Series B Units [Member] | UGEL Preferred Shares [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accmulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2017 | $ 617,571 | $ 463,179 | $ 75 | $ 18,690 | $ 34,944,972 | $ (20,276,944) | $ (375,152) | $ 15,392,391 |
Balance, shares at Dec. 31, 2017 | 200,000 | 150,000 | 50 | 18,690,030 | ||||
Net Income | 1,414,132 | 1,414,132 | ||||||
Other comprehensive income | (352,440) | (352,440) | ||||||
Stock-based compensation expense | 193,381 | 193,381 | ||||||
Preferred stock dividend | (1,560,563) | (1,560,563) | ||||||
Balance at Jul. 01, 2018 | $ 617,571 | $ 463,179 | $ 75 | $ 18,690 | $ 35,138,353 | $ (20,423,375) | $ (727,592) | $ 15,086,901 |
Balance, shares at Jul. 01, 2018 | 200,000 | 150,000 | 50 | 18,690,030 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jul. 01, 2018 | Jul. 02, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 1,414,132 | $ 2,162,478 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation | 1,063,767 | 849,968 |
Stock-based compensation expense | 193,381 | 206,645 |
Amortization of intangible assets | 10,002 | 10,002 |
Loss on disposal of property and equipment | 6,523 | 835 |
Noncash postemployment health and life benefit | (59,462) | |
Changes in assets and liabilities: | ||
Accounts receivable | (1,160,237) | (2,059,187) |
Inventories | 144,368 | (1,854,617) |
Other current assets | (47,082) | (118,244) |
Related party receivable | 35,043 | 28,507 |
Other long-term assets | (40,223) | (10,387) |
Accounts payable | 187,557 | 2,609,639 |
Accrued expenses and other liabilities | 361,493 | 666,371 |
Postretirement benefit liability - health and life | (24,815) | (5,605) |
Other long-term liabilities | (16,541) | (38,380) |
Cash provided by Operating Activities | 2,067,906 | 2,448,025 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (1,277,121) | (955,496) |
Payments on life insurance policies, net of proceeds from sale of life insurance policy | (106,163) | (223,761) |
Cash used in Investing Activities | (1,383,284) | (1,179,257) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net change in checks issued in excess of bank balance | 18,681 | 37,726 |
Net advances on lines of credit | 389,712 | 622,911 |
Payments on long-term debt | (436,276) | (259,569) |
Proceeds from issuance of long-term debt and capital lease obligations | 486,067 | |
Payments on capital lease obligations | (205,199) | (194,782) |
Net change in related party obligation | 259,740 | (185,209) |
Payment of preferred stock dividends | (1,553,806) | (1,455,942) |
Purchase and retirement of treasury stock | (99,840) | |
Cash used in Financing Activities | (1,041,081) | (1,534,705) |
Net Change in Cash and Cash equivalents | (356,459) | (265,937) |
Cash and Cash equivalents - beginning of Period | 1,267,319 | 1,321,586 |
Effects of currency translation on cash and cash equivalents | (7,778) | 48,112 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 903,082 | $ 1,103,761 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jul. 01, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared based upon U.S. Securities and Exchange Commission rules that permit reduced disclosure for interim periods. Therefore, they do not include all information and footnote disclosures necessary for a complete presentation of Uniroyal Global Engineered Products, Inc.’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. Uniroyal Global Engineered Products, Inc. (the “Company,” “Uniroyal Global,” “we,” or “us”) filed audited consolidated financial statements as of and for the fiscal years ended December 31, 2017 and January 1, 2017 which included all information and notes necessary for such complete presentation in conjunction with its 2017 Annual Report on Form 10-K. The results of operations for the interim period ended July 1, 2018 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017, which are contained in the Company’s 2017 Annual Report on Form 10-K. The Company owns all of the ownership interests in Uniroyal Engineered Products, LLC (“Uniroyal”) and its holding company UEP Holdings, LLC (“UEPH”), a U.S. manufacturer of textured coatings, and all of the ordinary common stock of Uniroyal Global (Europe) Limited (“UGEL”) formerly known as Engineered Products Acquisition Limited (“EPAL”), the holding company for Uniroyal Global Limited (“UGL”) formerly Wardle Storeys (Earby) Limited (“Wardle Storeys”), a European manufacturer of textured coatings and polymer films. The Company and its subsidiaries have adopted a 52/53-week fiscal year ending on the Sunday nearest to December 31. The current year ending December 30, 2018 and the prior year ended December 31, 2017 are 52-week years. The accompanying unaudited interim consolidated financial statements contain all adjustments (consisting of normal recurring items) which are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of July 1, 2018 and the results of operations, comprehensive income and cash flows for the interim periods ended July 1, 2018 and July 2, 2017. The unaudited interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company uses the U.S. dollar as the reporting currency for financial reporting. The financial position and results of operations of the Company’s U.K.-based operations are measured using the British Pound Sterling as the functional currency. See Note 5, Foreign Currency Translation. |
Noncash Transactions and Supple
Noncash Transactions and Supplemental Disclosure of Cash Flow Information | 6 Months Ended |
Jul. 01, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Noncash Transactions and Supplemental Disclosure of Cash Flow Information | 2. Noncash Transactions and Supplemental Disclosure of Cash Flow Information During the six months ended July 1, 2018 and July 2, 2017, the Company paid down $203,173 and $198,518, respectively, of its term loans using available borrowings on its various lines of credit. During the six months ended July 1, 2018 and July 2, 2017, the Company entered into several equipment financing obligations with fair values of $793,001 and $678,148, respectively, which are accounted for as capital assets. The fair values were added to property and equipment and a corresponding amount to capital lease or financing obligations. On April 1, 2018, the Company’s majority shareholder purchased the company owned life insurance policy on his life. The policy had a net value of $128,399 based on the cash surrender value of $578,490 and a policy loan outstanding in the amount of $450,091. After his assumption of a related party demand note payable in the amount of $125,000, the balance due of $3,399 was paid on April 17, 2018. Supplemental disclosure of cash paid for the six months ended : July 1, 2018 July 2, 2017 Interest expense $ 892,641 $ 808,983 Income taxes $ - $ - |
Derivatives
Derivatives | 6 Months Ended |
Jul. 01, 2018 | |
Derivatives | |
Derivatives | 3. Derivatives The Company recognizes all of its derivative instruments as either assets or liabilities in the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, as to whether the hedge is a cash flow hedge or a fair value hedge. The Company incurs foreign currency risk on sales and purchases denominated in other currencies, primarily the British Pound Sterling and the Euro. Foreign currency exchange contracts are used by the Company principally to limit the exchange rate fluctuations of the Euro. The Euro risk is partially limited due to natural cash flow offsets. Currency exchange contracts are purchased for approximately 25% of the net risk. These contracts are not designated as cash flow hedges for accounting purposes. Changes in fair value of these contracts are reported in net earnings as part of other expense. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jul. 01, 2018 | |
Fair Value Of Financial Instruments | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The Company’s short-term financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and lines of credit. The Company adjusts the carrying value of financial instruments denominated in other currencies such as cash, receivables, accounts payable and lines of credit using the appropriate exchange rates at the balance sheet date. The Company believes that the carrying values of these short-term financial instruments approximate their estimated fair values. The fair value of the Company’s long-term debt is estimated based on current rates for similar instruments with the same remaining maturities. In determining the current interest rates for similar instruments, the Company takes into account its risk of nonperformance. The Company believes that the carrying value of its long-term debt approximates its estimated fair value. The Company uses foreign currency exchange contracts which are recorded at their estimated fair values in the accompanying Consolidated Balance Sheets. The fair values of the contracts at July 1, 2018 and December 31, 2017 were a net liability of $12,402 included in other current liabilities and a net asset of $13,292 included in other current assets, respectively. The fair values of the currency exchange contracts are based upon observable market transactions of spot and forward rates. For the six months ended July 1, 2018, there have been no changes in the application of valuation methods applied to similar assets and liabilities. |
Foreign Currency Translation
Foreign Currency Translation | 6 Months Ended |
Jul. 01, 2018 | |
Foreign Currency Translation [Abstract] | |
Foreign Currency Translation | 5. Foreign Currency Translation The financial position and results of operations of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of operations denominated in foreign currencies are translated into U.S. dollars at exchange rates in effect at the balance sheet date, while the capital accounts are translated at the historical rate for the date they were recognized. Revenues and expenses are translated at the weighted average exchange rates during the reporting period. The resulting translation gains and losses on assets and liabilities are recorded in accumulated other comprehensive income (loss) and are excluded from net income until realized through a sale or liquidation of the investment. Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of our foreign operations are included in Other Income (Expense) in the accompanying Consolidated Statements of Operations. |
Inventories
Inventories | 6 Months Ended |
Jul. 01, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. Inventories Inventories consist of the following: July 1, 2018 December 31, 2017 Raw materials $ 5,946,936 $ 5,572,253 Work-in-process 4,707,300 5,342,359 Finished goods 10,172,362 10,377,480 20,826,598 21,292,092 Less: Allowance for inventory obsolescence (1,458,267 ) (1,522,430 ) Total Inventories $ 19,368,331 $ 19,769,662 |
Other Long-term Assets
Other Long-term Assets | 6 Months Ended |
Jul. 01, 2018 | |
Other Assets, Noncurrent [Abstract] | |
Other Long-term Assets | 7. Other Long-term Assets Other long-term assets consist of the following: July 1, 2018 December 31, 2017 Deferred tax asset $ 3,272,950 $ 3,167,092 Other 648,745 735,154 Total Other Long-term Assets $ 3,921,695 $ 3,902,246 |
Other Long-term Liabilities
Other Long-term Liabilities | 6 Months Ended |
Jul. 01, 2018 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-term Liabilities | 8. Other Long-term Liabilities Other long-term liabilities consist of the following: July 1, 2018 December 31, 2017 Deferred tax liability $ 765,308 $ 793,145 Other 19,821 29,347 Total Other Long-term Liabilities $ 785,129 $ 822,492 |
Lines of Credit
Lines of Credit | 6 Months Ended |
Jul. 01, 2018 | |
Line of Credit Facility [Abstract] | |
Line of Credit | 9. Lines of Credit The Company’s Uniroyal subsidiary has available a $30,000,000 revolving line of credit financing agreement with Wells Fargo Capital Finance, LLC (“Uniroyal Line of Credit”), which matures on October 17, 2019. Interest is payable monthly at the Eurodollar rate plus 2.25% or Wells Fargo Capital Finance, LLC's prime rate at the Company's election on outstanding balances up to $6,000,000 and prime rate on amounts in excess of $6,000,000. Borrowings on the line of credit are subject to the underlying borrowing base specified in the agreement. The underlying borrowing base is currently determined based upon eligible accounts receivable, inventories and equipment. The line of credit is secured by substantially all of Uniroyal's assets and includes certain financial and restrictive covenants. The outstanding balance on the Uniroyal Line of Credit was $9,967,330 and $10,376,881 as of July 1, 2018 and December 31, 2017, respectively. The Company has classified the outstanding balance on this line of credit within current liabilities in the accompanying Consolidated Balance Sheets. The Company’s U.K. subsidiary has available a £10,000,000 (approximately $13.2 million) revolving line of credit financing agreement with Lloyds Bank Commercial Finance Limited (“U.K. Line of Credit”), which is subject to a six-month notice by either party. The line has several tranches based on currency or underlying security. Interest is payable monthly at the base rate (U.K. LIBOR or Lloyds Bank Base Rate as published) plus 1.95% to 2.45% depending on the tranche. Borrowings on the line of credit are subject to the underlying borrowing base specified in the agreement. The underlying borrowing base is currently determined based upon eligible accounts receivable and inventories. The line of credit is secured by substantially all of the subsidiary's assets and includes certain financial and restrictive covenants. The outstanding balance on the U.K. Line of Credit was £7,359,786 and £6,631,172 ($9,683,469 and $8,963,587) as of July 1, 2018 and December 31, 2017, respectively. The Company has classified the outstanding balance on this line of credit within current liabilities in the accompanying Consolidated Balance Sheets. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jul. 01, 2018 | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Long-Term Debt | 10. Long-term Debt Long-term debt consists of the following: Interest Rate July 1, 2018 December 31, 2017 Wells Fargo Capital Finance LLC Prime $ 643,925 $ 792,525 Lloyds Bank Commercial Finance Limited LIBOR + 3.15% 52,191 107,238 Kennet Equipment Leasing Limited 10.90% 573,471 691,830 Balboa Capital Corporation 5.72% - 73,113 Regents Capital Corporation 7.41% 183,548 240,350 De Lage Landen Financial Services 7.35% 81,367 96,123 Ford Motor Credit 4.31% 32,319 36,662 Byline Financial Group 8.55% 17,367 28,344 Regents Capital Corporation 6.20% 254,419 284,852 Regents Capital Corporation 6.47% 276,208 306,702 Regents Capital Corporation 6.50% 137,361 152,169 BB&T Equipment Finance Corporation 4.02% 736,028 813,015 Regents Capital Corporation 6.99% 174,679 - Lloyds Bank Commercial Finance Limited LIBOR + 3.50% 464,840 - BB&T Equipment Finance Corporation 5.12% 244,252 - 3,871,975 3,622,923 Less: Current portion (1,187,384 ) (1,155,490 ) Long-term Portion $ 2,684,591 $ 2,467,433 In January 2018, the Company signed an agreement with Lloyds Bank Commercial Finance Limited (“Lloyds”) whereby Lloyds will advance funds in three tranches to finance the purchase of a regenerative thermal oxidizer to be used in the Company’s U.K. manufacturing facility. The maximum amount of this financing obligation is £1,177,650 or approximately $1,549,500. The balance of this financing obligation at July 1, 2018 was £353,295 ($464,840), which reflected the first tranche of funds advanced. The second tranche will be advanced in September 2018 and the final tranche in November 2018. Monthly payments will begin in December 2018 and continue over a 60-month period at 3.50% above the base rate (LIBOR). |
Related Party Obligations
Related Party Obligations | 6 Months Ended |
Jul. 01, 2018 | |
Related Party Obligations | |
Related Party Obligations | 11. Related Party Obligations Long-term debt to related parties consists of the following: Interest Rate July 1, 2018 December 31, 2017 Senior subordinated promissory note 9.25% $ 2,000,000 $ 2,000,000 Senior secured promissory note 10.00% 918,786 918,786 2,918,786 2,918,786 Less: Current portion (459,393 ) (153,131 ) Long-term Portion $ 2,459,393 $ 2,765,655 The Company has a lease financing obligation under which it leases its main U.S. manufacturing facility and certain other property from a related party lessor entity, accrues interest at 18.20% and currently requires monthly principal and interest payments of $36,964, which are adjusted annually based on the consumer price index. The balance of the related party lease financing obligation at July 1, 2018 reflected changes made to the lease agreement during the second quarter of 2018 in recognition of $355,000 of improvements to the leased facility. The lease financing obligation matures on October 31, 2033. The Company has security deposits aggregating $267,500 held by the lessor entity. The lease financing obligation is shown in the accompanying Consolidated Balance Sheets as Related Party Lease Financing Obligation which consists of the following: July 1, 2018 December 31, 2017 Related party lease financing obligation $ 2,504,891 $ 2,162,151 Less: Current portion (36,643 ) (8,824 ) Long-term Portion $ 2,468,248 $ 2,153,327 The current portions of the long-term debt to related parties and the related party lease financing obligation are combined and are shown in current liabilities as related party obligation. Also included in current liabilities as a related party obligation is a $225,000 subordinated secured promissory note issued to the Company’s majority shareholder on January 9, 2018 and a $47,000 subordinated secured promissory note issued to the Company’s majority shareholder on February 14, 2018. These promissory notes, which are payable on demand, are at a rate of 8%. The $125,000 subordinated secured promissory note that was outstanding at December 31, 2017 was paid during the first quarter of 2018. July 1, 2018 December 31, 2017 Current portion of long-term debt to related parties $ 459,393 $ 153,131 Current portion of related party lease financing obligation 36,643 8,824 Related party subordinated secured promissory note 225,000 - Related party subordinated secured promissory note 47,000 - Related party subordinated secured promissory note - 125,000 Related Party Obligation $ 768,036 $ 286,955 |
Capital Leases
Capital Leases | 6 Months Ended |
Jul. 01, 2018 | |
Capital Leases | |
Capital Leases | 12. Capital Leases The Company has several capital leases on equipment which expire from July 2, 2018 through March 2021 with monthly lease payments ranging from approximately $1,577 to $27,603 per month. The capital lease obligations are secured by the related equipment. Assets recorded under capital leases are included in property and equipment in the accompanying Consolidated Balance Sheets. Amortization of items under capital lease obligations has been included with depreciation expense on owned property and equipment in the accompanying Consolidated Statements of Operations. Interest rates on these obligations range from 3.84% to 19.15%. Capital lease obligations consist of the following: July 1, 2018 December 31, 2017 Capital lease obligations $ 718,375 $ 939,643 Less: Current portion (416,588 ) (408,425 ) Long-term Portion $ 301,787 $ 531,218 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jul. 01, 2018 | |
AOCI Attributable to Parent [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 13. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) were as follows: Minimum Foreign Currency Total Balance at December 31, 2017 $ 564,757 $ (939,909 ) $ (375,152 ) Other comprehensive losses before - (292,978 ) (292,978 ) Reclassification adjustment for gains included (59,462 ) - (59,462 ) Balance at July 1, 2018 $ 505,295 $ (1,232,887 ) $ (727,592 ) The gains reclassified from accumulated other comprehensive income into income are recorded to the following income statement line items: Other Comprehensive Income (Loss) Income Statement Line Item Minimum Benefit Liability Adjustments General and administrative expense |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jul. 01, 2018 | |
Stock Options or Stock Based Compensation | |
Stock Based Compensation | 14. Stock Based Compensation On June 25, 2015, the Company’s stockholders approved the adoption of the 2015 Stock Option Plan. This plan provides for the granting of options to purchase the Company’s common stock to employees and directors. The options granted are subject to a vesting schedule as set forth in each individual option agreement. Each option expires on the tenth anniversary of its date of grant unless an earlier termination date is provided in the grant agreement. The maximum aggregate number of shares of common stock that may be optioned and sold under the plan shall be 6% of the shares outstanding on the date of grant. The shares that may be optioned under the plan may be authorized but unissued or may be treasury shares. Compensation expense is recognized on a straight-line basis over a three-year vesting period from date of grant. Stock option activity for the six months ended July 1, 2018 and July 2, 2017 is as follows: Stock Options Total Weighted Exercis- Weighted Non- Weighted Outstanding at January 1, 2017 997,750 $ 2.80 217,501 $ 2.37 780,249 $ 2.92 Granted - - - - - - Vested - - 118,415 3.57 (118,415 ) 3.57 Exercised - - - - - - Forfeited or cancelled (5,000 ) 2.37 (5,000 ) 2.37 - - Outstanding at July 2, 2017 992,750 $ 2.80 330,916 $ 2.80 661,834 $ 2.80 Outstanding at December 31, 961,500 $ 2.80 527,165 $ 2.63 434,335 $ 3.00 Granted - - - - - - Vested - - 112,170 3.57 (112,170 ) 3.57 Exercised - - - - - - Forfeited or cancelled (15,000 ) 2.77 (8,334 ) 2.61 (6,666 ) 2.97 Outstanding at July 1, 2018 946,500 $ 2.80 631,001 $ 2.80 315,499 $ 2.80 Aggregate Intrinsic Value $ 535,500 $ 178,501 $ 356,999 Aggregate Intrinsic Value $ - $ - $ - Option expense recognized was $93,420 and $103,323 for the three months ended July 1, 2018 and July 2, 2017, respectively, and $193,381 and $206,645 for the six months ended July 1, 2018 and July 2, 2017, respectively. As of July 1, 2018, there was $150,583 in unrecognized compensation cost related to the options granted under the 2015 Stock Option Plan. We expect to recognize those costs over the remaining vesting term of 9 months. |
Recent Accounting Standards
Recent Accounting Standards | 6 Months Ended |
Jul. 01, 2018 | |
Recent Accounting Standards | |
Recent Accounting Standards | 15. Recent Accounting Standards In May 2014, the Financial Accounting Standards Board issued a new standard, Accounting Standards Update (ASU) No. 2014-09, "Revenue from Contracts with Customers." Under ASU 2014-09, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the new standard on January 1, 2018 using the modified retrospective method. This requires an adjustment to the opening balance of retained earnings to reflect the cumulative effect of initially applying the new standard to contracts that were not complete as of the adoption date. A contract that was not complete is defined as one for which all of the revenue was not recognized as of the adoption date. The Company did not record an adjustment to retained earnings since all of its contracts were considered complete before the adoption date. The adoption of this standard for the year ending December 30, 2018 will not have a significant effect on the Company’s consolidated financial position, results of operations and cash flows. On February 25, 2016, the Financial Accounting Standards Board issued a new standard, ASU No. 2016-02, “Leases”. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current Generally Accepted Accounting Principles (GAAP), the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new ASU will require both types of leases to be recognized on the balance sheet. This standard will be effective for the Company on December 31, 2018. The Company is in the process of evaluating how significant the impact of the adoption of this standard will be on its balance sheet as it recognizes lease assets and lease liabilities related to its operating leases and whether there will be any significant impact on its results of operations and cash flows. On August 26, 2016, the Financial Accounting Standards Board issued a new standard, ASU No. 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.” The new standard applies to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company adopted the new standard on January 1, 2018. The adoption of this standard for the year ending December 30, 2018 will not have a significant effect on the Company’s consolidated financial position, results of operations and cash flows. On January 26, 2017, the Financial Accounting Standards Board issued a new standard, ASU No. 2017-04, “Intangibles – Goodwill and Other – Simplifying the Test for Goodwill Impairment.” The new standard modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. It will be effective for the Company on December 30, 2019. The Company is currently evaluating the effects this standard will have, if any, on its consolidated financial position, results of operations and cash flows together with evaluating the adoption date. On May 10, 2017, the Financial Accounting Standards Board issued a new standard, ASU No. 2017-09, “Compensation – Stock Compensation – Scope of Modification Accounting.” The new standard clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. The Company adopted this standard on January 1, 2018. The adoption of this standard for the year ending December 30, 2018 will not have a significant effect on the Company’s consolidated financial position, results of operations and cash flows. On August 28, 2017, the Financial Accounting Standards Board issued a new standard, ASU No. 2017-12, “Derivatives and Hedging – Targeted Improvements to Accounting for Hedging Activities.” The objective of this new standard is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities and to simplify the application of the hedge accounting guidance in current GAAP. It will be effective for the Company on December 31, 2018. The Company is currently evaluating the effects this standard will have, if any, on its consolidated financial position, results of operations and cash flows together with evaluating the adoption date. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jul. 01, 2018 | |
EARNINGS (LOSS) PER COMMON SHARE: | |
Earnings Per Common Share | 16. Earnings per Common Share The following table sets forth the computation of earnings per common share - basic and earnings per common share – diluted Three Months Ended Six Months Ended July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017 Numerator Net income (loss) $ 148,389 $ 214,466 $ (146,431 ) $ 685,242 Denominator Denominator for basic 18,690,030 18,704,024 18,690,030 18,713,625 Weighted average effect - 105,574 - 96,566 Denominator for dilutive 18,690,030 18,809,598 18,690,030 18,810,191 Basic and Diluted Income Net income (loss) $ 0.01 $ 0.01 $ (0.01 ) $ 0.04 Effect of dilutive - - - - Net income (loss) $ 0.01 $ 0.01 $ (0.01 ) $ 0.04 The calculation of diluted earnings per share for the three months ended July 1, 2018 excluded options to purchase 946,500 shares of common stock because the options’ exercise prices of $2.37 and $3.57 per share were greater than the average market price of the common shares. Due to the net loss for the six months ended July 1, 2018, the calculations of basic and diluted loss per share were the same since including options to purchase shares of common stock in the calculation of diluted loss per share would have been anti-dilutive. However, if diluted earnings per share had been reported for the six months ended July 1, 2018, the calculation would have excluded options to purchase 946,500 shares of common stock because the options’ exercise prices of $2.37 and $3.57 per share were greater than the average market price of the common shares. The calculation of diluted earnings per share for the three and six months ended July 2, 2017 excluded options to purchase 355,250 shares of common stock because the options’ exercise price of $3.57 per share was greater than the average market price of the common shares. |
Revenue
Revenue | 6 Months Ended |
Jul. 01, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue | 17. Revenue The Company recognizes revenue and related accounts receivable when obligations under the terms of a contract with a customer are satisfied, which includes the control of products transferring to the customer. For Uniroyal, this generally occurs when products are shipped and, for UGL, this generally occurs when the customer accepts delivery either at its U.K. facility or at a mutually agreed upon location. Revenue is measured as the amount of consideration the Company expects to receive in exchange for products transferred to the customer. A contract asset occurs when an entity transfers products to a customer before payment is due while a contract liability occurs when an entity has an obligation to transfer products to a customer for which the entity has already received payment (or payment is due) from the customer. Remaining performance obligations exist when an entity expects to record future revenue on partially completed contracts. The Company does not have contract assets or contract liabilities and has no remaining performance obligations since it does not recognize revenue until a contract is complete. The following table sets forth revenue disaggregated by the Company’s automotive and industrial sectors Three Months Ended Six Months Ended July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017 Revenue: Automotive sector $ 17,842,634 $ 17,598,187 $ 35,074,750 $ 35,014,728 Industrial sector 8,180,599 8,479,362 17,378,170 16,821,250 Total Revenue $ 26,023,233 $ 26,077,549 $ 52,452,920 $ 51,835,978 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jul. 01, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events The Company has evaluated subsequent events occurring through the date that the financial statements were issued for events requiring recording or disclosure in the July 1, 2018 financial statements. There were no material events or transactions occurring during this period requiring recognition or disclosure. |
Noncash Transactions and Supp26
Noncash Transactions and Supplemental Disclosure of Cash Flow Information (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Noncash Transactions and Supplemental Disclosure of Cash Flow Information Text Block | Supplemental disclosure of cash paid for the six months ended : July 1, 2018 July 2, 2017 Interest expense $ 892,641 $ 808,983 Income taxes $ - $ - |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: July 1, 2018 December 31, 2017 Raw materials $ 5,946,936 $ 5,572,253 Work-in-process 4,707,300 5,342,359 Finished goods 10,172,362 10,377,480 20,826,598 21,292,092 Less: Allowance for inventory obsolescence (1,458,267 ) (1,522,430 ) Total Inventories $ 19,368,331 $ 19,769,662 |
Other Long-term Assets (Tables)
Other Long-term Assets (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Other Assets, Noncurrent [Abstract] | |
Schedule of Other Long-term Assets | Other long-term assets consist of the following: July 1, 2018 December 31, 2017 Deferred tax asset $ 3,272,950 $ 3,167,092 Other 648,745 735,154 Total Other Long-term Assets $ 3,921,695 $ 3,902,246 |
Other Long-term Liabilities (Ta
Other Long-term Liabilities (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Long-term Liabilities | Other long-term liabilities consist of the following: July 1, 2018 December 31, 2017 Deferred tax liability $ 765,308 $ 793,145 Other 19,821 29,347 Total Other Long-term Liabilities $ 785,129 $ 822,492 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consists of the following: Interest Rate July 1, 2018 December 31, 2017 Wells Fargo Capital Finance LLC Prime $ 643,925 $ 792,525 Lloyds Bank Commercial Finance Limited LIBOR + 3.15% 52,191 107,238 Kennet Equipment Leasing Limited 10.90% 573,471 691,830 Balboa Capital Corporation 5.72% - 73,113 Regents Capital Corporation 7.41% 183,548 240,350 De Lage Landen Financial Services 7.35% 81,367 96,123 Ford Motor Credit 4.31% 32,319 36,662 Byline Financial Group 8.55% 17,367 28,344 Regents Capital Corporation 6.20% 254,419 284,852 Regents Capital Corporation 6.47% 276,208 306,702 Regents Capital Corporation 6.50% 137,361 152,169 BB&T Equipment Finance Corporation 4.02% 736,028 813,015 Regents Capital Corporation 6.99% 174,679 - Lloyds Bank Commercial Finance Limited LIBOR + 3.50% 464,840 - BB&T Equipment Finance Corporation 5.12% 244,252 - 3,871,975 3,622,923 Less: Current portion (1,187,384 ) (1,155,490 ) Long-term Portion $ 2,684,591 $ 2,467,433 |
Related Party Obligations (Tabl
Related Party Obligations (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Related Party Obligations Tables | |
Schedule of Long-term Debt to Related Parties | Long-term debt to related parties consists of the following: Interest Rate July 1, 2018 December 31, 2017 Senior subordinated promissory note 9.25% $ 2,000,000 $ 2,000,000 Senior secured promissory note 10.00% 918,786 918,786 2,918,786 2,918,786 Less: Current portion (459,393 ) (153,131 ) Long-term Portion $ 2,459,393 $ 2,765,655 |
Schedule of Related Party Lease Obligation | The lease financing obligation is shown in the accompanying Consolidated Balance Sheets as Related Party Lease Financing Obligation which consists of the following: July 1, 2018 December 31, 2017 Related party lease financing obligation $ 2,504,891 $ 2,162,151 Less: Current portion (36,643 ) (8,824 ) Long-term Portion $ 2,468,248 $ 2,153,327 |
Schedule of Related Party Obligations, Current | The $125,000 subordinated secured promissory note that was outstanding at December 31, 2017 was paid during the first quarter of 2018. July 1, 2018 December 31, 2017 Current portion of long-term debt to related parties $ 459,393 $ 153,131 Current portion of related party lease financing obligation 36,643 8,824 Related party subordinated secured promissory note 225,000 - Related party subordinated secured promissory note 47,000 - Related party subordinated secured promissory note - 125,000 Related Party Obligation $ 768,036 $ 286,955 |
Capital Leases (Tables)
Capital Leases (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Capital Leases Tables | |
Schedule of Capital Leases Principal Requirements | Capital lease obligations consist of the following: July 1, 2018 December 31, 2017 Capital lease obligations $ 718,375 $ 939,643 Less: Current portion (416,588 ) (408,425 ) Long-term Portion $ 301,787 $ 531,218 |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
AOCI Attributable to Parent [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) were as follows: Minimum Foreign Currency Total Balance at December 31, 2017 $ 564,757 $ (939,909 ) $ (375,152 ) Other comprehensive losses before - (292,978 ) (292,978 ) Reclassification adjustment for gains included (59,462 ) - (59,462 ) Balance at July 1, 2018 $ 505,295 $ (1,232,887 ) $ (727,592 ) |
Gain (Loss) Reclassified from AOCI | The gains reclassified from accumulated other comprehensive income into income are recorded to the following income statement line items: Other Comprehensive Income (Loss) Income Statement Line Item Minimum Benefit Liability Adjustments General and administrative expense |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Schedule of Stock Option Plan: | |
Schedule of Stock Options Activity | Stock option activity for the six months ended July 1, 2018 and July 2, 2017 is as follows: Stock Options Total Weighted Exercis- Weighted Non- Weighted Outstanding at January 1, 2017 997,750 $ 2.80 217,501 $ 2.37 780,249 $ 2.92 Granted - - - - - - Vested - - 118,415 3.57 (118,415 ) 3.57 Exercised - - - - - - Forfeited or cancelled (5,000 ) 2.37 (5,000 ) 2.37 - - Outstanding at July 2, 2017 992,750 $ 2.80 330,916 $ 2.80 661,834 $ 2.80 Outstanding at December 31, 961,500 $ 2.80 527,165 $ 2.63 434,335 $ 3.00 Granted - - - - - - Vested - - 112,170 3.57 (112,170 ) 3.57 Exercised - - - - - - Forfeited or cancelled (15,000 ) 2.77 (8,334 ) 2.61 (6,666 ) 2.97 Outstanding at July 1, 2018 946,500 $ 2.80 631,001 $ 2.80 315,499 $ 2.80 Aggregate Intrinsic Value $ 535,500 $ 178,501 $ 356,999 Aggregate Intrinsic Value $ - $ - $ - |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Earnings Per Common Share Tables Abstract | |
Schedule of Earnings Per Common Share | The following table sets forth the computation of earnings per common share - basic and earnings per common share – diluted Three Months Ended Six Months Ended July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017 Numerator Net income (loss) $ 148,389 $ 214,466 $ (146,431 ) $ 685,242 Denominator Denominator for basic 18,690,030 18,704,024 18,690,030 18,713,625 Weighted average effect - 105,574 - 96,566 Denominator for dilutive 18,690,030 18,809,598 18,690,030 18,810,191 Basic and Diluted Income Net income (loss) $ 0.01 $ 0.01 $ (0.01 ) $ 0.04 Effect of dilutive - - - - Net income (loss) $ 0.01 $ 0.01 $ (0.01 ) $ 0.04 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jul. 01, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Disaggregated Revenue | The following table sets forth revenue disaggregated by the Company’s automotive and industrial sectors Three Months Ended Six Months Ended July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017 Revenue: Automotive sector $ 17,842,634 $ 17,598,187 $ 35,074,750 $ 35,014,728 Industrial sector 8,180,599 8,479,362 17,378,170 16,821,250 Total Revenue $ 26,023,233 $ 26,077,549 $ 52,452,920 $ 51,835,978 |
Noncash Transactions and Supp37
Noncash Transactions and Supplemental Disclosure of Cash Flow Information (Details) - USD ($) | 6 Months Ended | |||
Jul. 01, 2018 | Jul. 02, 2017 | Apr. 17, 2018 | Apr. 04, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Payments on term loans | $ 203,173 | $ 198,518 | ||
New equipment leases during the year | 793,001 | 678,148 | ||
Policy net value | $ 128,399 | |||
Cash surrender value of insurance policies | 578,490 | |||
Insurance policy loans | 450,091 | |||
Notes payable | $ 3,399 | $ 125,000 | ||
Interest expense | 892,641 | 808,983 | ||
Income taxes |
Derivatives (Details)
Derivatives (Details) | 6 Months Ended |
Jul. 01, 2018 | |
Derivatives Details Abstract | |
Percentage of risk on currency exchange contracts | 25.00% |
Fair Value of Financial Instr39
Fair Value of Financial Instruments (Details) - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
Fair Value Of Financial Instruments Details Abstract | ||
Fair value of foreign currency exchange contracts liability | $ 12,402 | |
Fair value of foreign currency exchange contracts assets | $ 13,292 |
Inventories (Details)
Inventories (Details) - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,946,936 | $ 5,572,253 |
Work-in-process | 4,707,300 | 5,342,359 |
Finished goods | 10,172,362 | 10,377,480 |
Inventories gross | 20,826,598 | 21,292,092 |
Less: Allowance for inventory obsolescence | (1,458,267) | (1,522,430) |
Total Inventories | $ 19,368,331 | $ 19,769,662 |
Other Long-term Assets (Details
Other Long-term Assets (Details) - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
Other Assets, Noncurrent [Abstract] | ||
Deferred tax asset | $ 3,272,950 | $ 3,167,092 |
Other | 648,745 | 735,154 |
Total Other Long-term Assets | $ 3,921,695 | $ 3,902,246 |
Other Long-term Liabilities (De
Other Long-term Liabilities (Details) - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
Other Liabilities, Noncurrent [Abstract] | ||
Deferred tax liability | $ 765,308 | $ 793,145 |
Other | 19,821 | 29,347 |
Total Other Long-term Liabilities | $ 785,129 | $ 822,492 |
Lines of Credit (Details)
Lines of Credit (Details) | 6 Months Ended | |||
Jul. 01, 2018USD ($) | Jul. 01, 2018GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | |
Wells Fargo Capital Finance, LLC [Member] | ||||
Line of credit maximum amount | $ 30,000,000 | |||
Line of credit premium over base rate | 2.25% | |||
Line of credit interest rate description | Interest is payable monthly at the Euro dollar rate plus 2.25% or Wells Fargo Capital Finance, LLCs prime rate at the Companys election on outstanding balances up to $6,000,000 and prime rate on amounts in excess of $6,000,000. | |||
Line of credit amount outstanding | $ 9,967,330 | $ 10,376,881 | ||
Line of credit, maturity date | Oct. 17, 2019 | |||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | ||||
Line of credit maximum amount | $ 13,200,000 | |||
Line of credit interest rate description | The line has several tranches based on currency or underlying security. Interest is payable monthly at the base rate (U.K. LIBOR or Lloyds Bank Base Rate as published) plus 1.95% to 2.45% depending on the tranche. | |||
Line of credit amount outstanding | $ 9,683,469 | $ 8,963,587 | ||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | British Pound Sterling [Member] | ||||
Line of credit maximum amount | £ | £ 10,000,000 | |||
Line of credit amount outstanding | £ | £ 7,359,786 | £ 6,631,172 | ||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | Minimum [Member] | ||||
Line of credit premium over base rate | 1.95% | |||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | Maximum [Member] | ||||
Line of credit premium over base rate | 2.45% |
Long-Term Debt (Schedule of Lon
Long-Term Debt (Schedule of Long-term debt) (Details) - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 3,871,975 | $ 3,622,923 |
Less: Current portion | (1,187,384) | (1,155,490) |
Long-Term Portion | 2,684,591 | 2,467,433 |
Wells Fargo Capital Finance LLC Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 643,925 | 792,525 |
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 52,191 | 107,238 |
Kennet Equipment Leasing Financing Obligation [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 573,471 | 691,830 |
Balboa Capital Corporation Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 73,113 | |
Regents Capital Corporation Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 183,548 | 240,350 |
De Lage Landen Financial Services Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 81,367 | 96,123 |
Ford Motor Credit Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 32,319 | 36,662 |
Byline Financial Group Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 17,367 | 28,344 |
Regents Capital Corporation Note Payable 1 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 254,419 | 284,852 |
Regents Capital Corporation Note Payable 2 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 276,208 | 306,702 |
Regents Capital Corporation Note Payable 3 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 137,361 | 152,169 |
BB&T Equipment Finance Corporation [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 736,028 | 813,015 |
Regents Capital Corporation Note Payable 4 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 174,679 | |
Lloyds Bank Commercial Finance Limited 2 [Member] | Wardle Storeys [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 464,840 | |
BB&T Equipment Finance Corporation 2 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 244,252 |
Long-Term Debt (Schedule of L45
Long-Term Debt (Schedule of Long-term debt Interest Rate) (Details) | 6 Months Ended | |
Jul. 01, 2018USD ($) | Jul. 01, 2018GBP (£) | |
Wells Fargo Capital Finance LLC Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate basis | Prime | |
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | First tranche [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, face amount | $ 464,840 | |
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate above basis | 3.15% | |
Long-term debt, interest rate basis | LIBOR | |
Kennet Equipment Leasing Financing Obligation [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 10.90% | 10.90% |
Balboa Capital Corporation Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 5.72% | 5.72% |
Regents Capital Corporation Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 7.41% | 7.41% |
De Lage Landen Financial Services Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 7.35% | 7.35% |
Ford Motor Credit Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 4.31% | 4.31% |
Byline Financial Group Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 8.55% | 8.55% |
Regents Capital Corporation Note Payable 1 [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 6.20% | 6.20% |
Regents Capital Corporation Note Payable 2 [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 6.47% | 6.47% |
Regents Capital Corporation Note Payable 3 [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 6.50% | 6.50% |
BB&T Equipment Finance Corporation [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 4.02% | 4.02% |
Regents Capital Corporation Note Payable 4 [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 6.99% | 6.99% |
Lloyds Bank Commercial Finance Limited 2 [Member] | Wardle Storeys [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, face amount | $ 1,549,500 | |
Long-term debt, frequency of periodic payment | Monthly payments will begin in December 2018 and continue over a 60-month period at 3.50% above the base rate (LIBOR). | |
Lloyds Bank Commercial Finance Limited 2 [Member] | Wardle Storeys [Member] | First tranche [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, face amount | $ 464,840 | |
Lloyds Bank Commercial Finance Limited 2 [Member] | Wardle Storeys [Member] | British Pound Sterling [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, face amount | £ | £ 1,177,650 | |
Lloyds Bank Commercial Finance Limited 2 [Member] | Wardle Storeys [Member] | British Pound Sterling [Member] | First tranche [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, face amount | £ | £ 353,295 | |
Lloyds Bank Commercial Finance Limited 2 [Member] | Wardle Storeys [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate above basis | 3.50% | |
Long-term debt, interest rate basis | LIBOR | |
BB&T Equipment Finance Corporation 2 [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 5.12% | 5.12% |
Related Party Obligations (Narr
Related Party Obligations (Narrative) (Details) - USD ($) | 6 Months Ended | |||
Jul. 01, 2018 | Feb. 14, 2018 | Jan. 09, 2018 | Dec. 31, 2017 | |
Related party subordinated secured promissory note | $ 225,000 | |||
Related party lease financing obligation | $ 2,504,891 | 2,162,151 | ||
Company's Majority Owners [Member] | ||||
Long-term debt, interest rate | 18.20% | |||
Long-term debt, periodic payment | $ 36,964 | |||
Long-term debt, security deposit | $ 267,500 | |||
Long-term debt, maturity date | Oct. 31, 2033 | |||
Related party subordinated secured promissory note | $ 47,000 | $ 225,000 | $ 125,000 | |
Promissory notes interest rates | 8.00% | |||
Related party lease financing obligation | $ 355,000 |
Related Party Obligations (Long
Related Party Obligations (Long-term debt to related parties) (Details) - USD ($) | 6 Months Ended | |
Jul. 01, 2018 | Dec. 31, 2017 | |
Total debt to related parties | $ 2,918,786 | $ 2,918,786 |
Less: Current portion of debt to related parties | (459,393) | (153,131) |
Total Long-term Debt to Related Parties | 2,459,393 | 2,765,655 |
Senior subordinated promissory note [Member] | ||
Total debt to related parties | $ 2,000,000 | 2,000,000 |
Long-term debt, interest rate | 9.25% | |
Senior secured promissory note [Member] | ||
Total debt to related parties | $ 918,786 | $ 918,786 |
Long-term debt, interest rate | 10.00% |
Related Party Obligations (Leas
Related Party Obligations (Lease Financing Obligation) (Details) - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
Related Party Lease Financing Obligation Details | ||
Related party lease financing obligation | $ 2,504,891 | $ 2,162,151 |
Less: Current portion | (36,643) | (8,824) |
Long-Term Portion | $ 2,468,248 | $ 2,153,327 |
Related Party Obligations (Sche
Related Party Obligations (Schedule of Current Portions) (Details) - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
Related Party Obligations Schedule Of Current Portions Details | ||
Current portion of long-term debt to related parties | $ 459,393 | $ 153,131 |
Current portion of related party lease financing obligation | 36,643 | 8,824 |
Related party subordinated secured promissory note | 225,000 | |
Related party subordinated secured promissory note | 47,000 | |
Related party subordinated secured promissory note | 125,000 | |
Related Party Obligation | $ 768,036 | $ 286,955 |
Capital Leases (Details)
Capital Leases (Details) - USD ($) | Jul. 01, 2018 | Dec. 31, 2017 |
Capital Leases Details | ||
Capital Leases on equipment - Monthly lease payments minimum | $ 1,577 | |
Capital Leases on equipment - Monthly lease payments maximum | $ 27,603 | |
Capital Leases on equipment -Interest rates minimum | 3.84% | |
Capital Leases on equipment -Interest rates maximum | 19.15% | |
Capital lease obligation | $ 718,375 | $ 939,643 |
Less: current portion | (416,588) | (408,425) |
Long-term Portion | $ 301,787 | $ 531,218 |
Accumulated Other Comprehensi51
Accumulated Other Comprehensive Income (Loss) (Details) | 6 Months Ended |
Jul. 01, 2018USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | $ (375,152) |
Other comprehensive losses before reclassifications | (292,978) |
Reclassification adjustment for gains included in net income | (59,462) |
Balance | (727,592) |
Minimum Benefit Liability Adjustments [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | 564,757 |
Other comprehensive losses before reclassifications | |
Reclassification adjustment for gains included in net income | (59,462) |
Balance | 505,295 |
Foreign Currency Translation Adjustment [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (939,909) |
Other comprehensive losses before reclassifications | (292,978) |
Reclassification adjustment for gains included in net income | |
Balance | $ (1,232,887) |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2018 | Jul. 02, 2017 | Jul. 01, 2018 | Jul. 02, 2017 | |
Stockholders' Equity Note [Abstract] | ||||
Stock-based compensation expense | $ 93,420 | $ 103,323 | $ 193,381 | $ 206,645 |
Unrecognized compensation cost | $ 150,583 | $ 150,583 | ||
Unrecognized compensation cost, recognition period | 9 months |
Stock Based Compensation (Optio
Stock Based Compensation (Option Activity) (Details) - USD ($) | 6 Months Ended | |
Jul. 01, 2018 | Jul. 02, 2017 | |
Total Stock Options | ||
Outstanding | 961,500 | 997,750 |
Granted | ||
Vested | ||
Exercised | ||
Forfeited or cancelled | (15,000) | (5,000) |
Outstanding | 946,500 | 992,750 |
Total Weighted Average Exercise Price | ||
Outstanding | $ 2.80 | $ 2.80 |
Granted | ||
Vested | ||
Exercised | ||
Forfeited or cancelled | 2.77 | 2.37 |
Outstanding | $ 2.80 | $ 2.80 |
Exercisable | ||
Outstanding | 527,165 | 217,501 |
Granted | ||
Vested | 112,170 | 118,415 |
Exercised | ||
Forfeited or cancelled | (8,334) | (5,000) |
Outstanding | 631,001 | 330,916 |
Exercisable Weighted Average Exercise Price | ||
Outstanding | $ 2.63 | $ 2.37 |
Granted | ||
Vested | 3.57 | 3.57 |
Exercised | ||
Forfeited or cancelled | 2.61 | 2.37 |
Outstanding | $ 2.80 | $ 2.80 |
Nonvested | ||
Outstanding | 434,335 | 780,249 |
Granted | ||
Vested | (112,170) | (118,415) |
Forfeited or cancelled | (6,666) | |
Outstanding | 315,499 | 661,834 |
Nonvested Weighted Average Exercise Price | ||
Outstanding | $ 3 | $ 2.92 |
Granted | ||
Vested | 3.57 | 3.57 |
Forfeited or cancelled | 2.97 | |
Outstanding | $ 2.80 | $ 2.80 |
Aggregate intrinsic value | ||
Outstanding | $ 535,500 | |
Exercisable | 178,501 | |
Nonvested | $ 356,999 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2018 | Jul. 02, 2017 | Jul. 01, 2018 | Jul. 02, 2017 | |
Numerator | ||||
Net income (loss) available to common shareholders | $ 148,389 | $ 214,466 | $ (146,431) | $ 685,242 |
Denominator | ||||
Denominator for basic earnings per share - weighted average shares outstanding | 18,690,030 | 18,704,024 | 18,690,030 | 18,713,625 |
Weighted average effect of dilutive securities | 105,574 | 96,566 | ||
Denominator for dilutive earnings per share - weighted average shares outstanding | 18,690,030 | 18,809,598 | 18,690,030 | 18,810,191 |
Basic and Diluted Income (Loss) Per Share | ||||
Net income (loss) available to common shareholders | $ 0.01 | $ 0.01 | $ (0.01) | $ 0.04 |
Effect of dilutive securities | ||||
Net income (loss) available to common shareholders | $ 0.01 | $ 0.01 | $ (0.01) | $ 0.04 |
Earnings Per Common Share (Narr
Earnings Per Common Share (Narrative) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2018 | Jul. 02, 2017 | Jul. 01, 2018 | Jul. 02, 2017 | |
Weighted average effect of dilutive securities | 105,574 | 96,566 | ||
Option exercise price | ||||
Stock Option [Member] | ||||
Weighted average effect of dilutive securities | 946,500 | 355,250 | 946,500 | 355,250 |
Option exercise price | $ 3.57 | $ 3.57 | ||
Stock Option [Member] | Maximum [Member] | ||||
Option exercise price | $ 3.57 | $ 3.57 | ||
Stock Option [Member] | Minimum [Member] | ||||
Option exercise price | $ 2.37 | $ 2.37 |
Revenue (Schedule of Disaggrega
Revenue (Schedule of Disaggregated Revenue) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2018 | Jul. 02, 2017 | Jul. 01, 2018 | Jul. 02, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 26,023,233 | $ 26,077,549 | $ 52,452,920 | $ 51,835,978 |
Automotive Sector [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 17,842,634 | 17,598,187 | 35,074,750 | 35,014,728 |
Industrial Sector [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 8,180,599 | $ 8,479,362 | $ 17,378,170 | $ 16,821,250 |