Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Apr. 03, 2022 | May 02, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | UNIROYAL GLOBAL ENGINEERED PRODUCTS, INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --01-02 | |
Amendment Flag | false | |
Entity Central Index Key | 0001172706 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Apr. 3, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-50081 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 65-1005398 | |
Entity Address, Address Line One | 1800 2nd Street | |
Entity Address, Address Line Two | Suite 970 | |
Entity Address, City or Town | Sarasota | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 34236 | |
City Area Code | (941) | |
Local Phone Number | 906-8580 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | None | |
Common Class A [Member] | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 3,412,186 | |
Common Class B [Member] | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 323,820 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Apr. 03, 2022 | Jan. 02, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 324,499 | $ 444,973 |
Accounts receivable, net | 11,692,484 | 8,561,227 |
Inventories, net | 24,142,917 | 21,840,404 |
Other current assets | 2,503,150 | 2,196,322 |
Related party receivable | 34,766 | 453 |
Total Current Assets | 38,697,816 | 33,043,379 |
PROPERTY AND EQUIPMENT, NET | 16,437,509 | 17,047,606 |
OPERATING LEASE RIGHT-OF-USE ASSETS, NET | 5,367,004 | 5,626,542 |
OTHER ASSETS | ||
Intangible assets | 3,277,356 | 3,336,068 |
Goodwill | 1,079,175 | 1,079,175 |
Other long-term assets | 4,463,198 | 4,322,855 |
Total Other Assets | 8,819,729 | 8,738,098 |
TOTAL ASSETS | 69,322,058 | 64,455,625 |
CURRENT LIABILITIES | ||
Checks issued in excess of bank balance | 242,011 | 76,134 |
Lines of credit | 21,443,596 | 17,816,919 |
Current maturities of long-term debt | 3,489,646 | 2,365,905 |
Current maturities of finance lease liabilities | 165,828 | 210,007 |
Accounts payable | 11,379,971 | 8,959,467 |
Accrued expenses and other liabilities | 3,829,926 | 3,658,612 |
Current maturities of related party finance lease liabilities | 172,278 | 167,389 |
Current portion of postretirement benefit liability - health and life | 169,749 | 169,749 |
Total Current Liabilities | 40,893,005 | 33,424,182 |
LONG-TERM LIABILITIES | ||
Long-term debt, less current portion | 5,273,656 | 6,854,257 |
Finance lease liabilities, less current portion | 21,288 | 36,372 |
Operating lease liabilities, less current portion | 5,158,797 | 5,391,395 |
Related party finance lease liabilities, less current portion | 2,300,866 | 2,344,239 |
Long-term debt to related parties | 4,216,566 | 4,216,566 |
Postretirement benefit liability - health and life, less current portion | 2,572,371 | 2,583,610 |
Other long-term liabilities | 937,735 | 960,526 |
Total Long-Term Liabilities | 20,481,279 | 22,386,965 |
Total Liabilities | 61,374,284 | 55,811,147 |
STOCKHOLDERS' EQUITY | ||
Preferred units, Series A UEP Holdings, LLC, 20,000,000 units authorized; 200,000 units issued and outstanding ($100 issue price) | 617,571 | 617,571 |
Preferred units, Series B UEP Holdings, LLC, 15,000,000 units authorized; 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) 3,736,006 shares issued and outstanding as of April 3, 2022 and January 2, 2022 | 3,736 | 3,736 |
Additional paid-in capital | 35,290,590 | 35,290,590 |
Accumulated deficit | (27,004,546) | (26,459,190) |
Accumulated other comprehensive loss | (1,422,831) | (1,271,483) |
Total Stockholders' Equity | 7,947,774 | 8,644,478 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 69,322,058 | $ 64,455,625 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Apr. 03, 2022 | Jan. 02, 2022 |
Preferred units, par value (in Dollars per share) | $ 1.51 | $ 1.51 |
Preferred units, shares issued | 50 | 50 |
Preferred units, shares outstanding | 50 | 50 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 3,736,006 | 3,736,006 |
Common stock, shares outstanding | 3,736,006 | 3,736,006 |
Series A Preferred Stock | ||
Preferred units, par value (in Dollars per share) | $ 100 | $ 100 |
Preferred units, shares issued | 200,000 | 200,000 |
Preferred units, shares outstanding | 200,000 | 200,000 |
Preferred units, shares authorized | 20,000,000 | 20,000,000 |
Series B Preferred Stock | ||
Preferred units, par value (in Dollars per share) | $ 100 | $ 100 |
Preferred units, shares issued | 150,000 | 150,000 |
Preferred units, shares outstanding | 150,000 | 150,000 |
Preferred units, shares authorized | 15,000,000 | 15,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Income Statement [Abstract] | ||
NET SALES | $ 20,070,551 | $ 21,896,001 |
COST OF GOODS SOLD | 17,405,495 | 18,658,664 |
Gross Profit | 2,665,056 | 3,237,337 |
OPERATING EXPENSES: | ||
Selling | 724,321 | 898,712 |
General and administrative | 1,800,218 | 1,579,027 |
Research and development | 389,108 | 327,458 |
Total Operating Expenses | 2,913,647 | 2,805,197 |
Operating (Loss) Income | (248,591) | 432,140 |
OTHER (EXPENSE) INCOME: | ||
Interest expense | (438,508) | (403,746) |
Funding from Paycheck Protection Program | 838,864 | |
Other (expense) income | (14,396) | 206,304 |
Net Other (Expense) Income | (452,904) | 641,422 |
(LOSS) INCOME BEFORE TAX (BENEFIT) PROVISION | (701,495) | 1,073,562 |
TAX (BENEFIT) PROVISION | (156,139) | 37,561 |
NET (LOSS) INCOME | (545,356) | 1,036,001 |
Preferred stock dividend | (816,414) | |
NET (LOSS) INCOME ALLOCABLE TO COMMON SHAREHOLDERS | $ (545,356) | $ 219,587 |
(LOSS) EARNINGS PER COMMON SHARE: | ||
Basic and Diluted (in Dollars per share) | $ (0.15) | $ 0.06 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||
Basic and Diluted (in Shares) | 3,736,006 | 3,736,006 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Income Statement [Abstract] | ||
NET (LOSS) INCOME | $ (545,356) | $ 1,036,001 |
OTHER COMPREHENSIVE (LOSS) INCOME: | ||
Foreign currency translation adjustment | (151,348) | 56,174 |
OTHER COMPREHENSIVE (LOSS) INCOME | (151,348) | 56,174 |
COMPREHENSIVE (LOSS) INCOME | (696,704) | 1,092,175 |
Preferred stock dividend | (816,414) | |
COMPREHENSIVE (LOSS) INCOME TO COMMON SHAREHOLDERS | $ (696,704) | $ 275,761 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | UEPH Series A | UEPH Series B | UGEL Preferred | Common Stock | Additional Paid In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Balance at Jan. 03, 2021 | $ 617,571 | $ 463,179 | $ 75 | $ 3,736 | $ 35,290,590 | $ (28,734,670) | $ (1,271,321) | $ 6,369,160 |
Balance (in Shares) at Jan. 03, 2021 | 200,000 | 150,000 | 50 | 3,736,006 | ||||
Net income (loss) | 1,036,001 | 1,036,001 | ||||||
Other comprehensive income (loss) | 56,174 | 56,174 | ||||||
Preferred stock dividend | (816,414) | (816,414) | ||||||
Balance at Apr. 04, 2021 | $ 617,571 | $ 463,179 | $ 75 | $ 3,736 | 35,290,590 | (28,515,083) | (1,215,147) | 6,644,921 |
Balance (in Shares) at Apr. 04, 2021 | 200,000 | 150,000 | 50 | 3,736,006 | ||||
Balance at Jan. 02, 2022 | $ 617,571 | $ 463,179 | $ 75 | $ 3,736 | 35,290,590 | (26,459,190) | (1,271,483) | 8,644,478 |
Balance (in Shares) at Jan. 02, 2022 | 200,000 | 150,000 | 50 | 3,736,006 | ||||
Net income (loss) | (545,356) | (545,356) | ||||||
Other comprehensive income (loss) | (151,348) | (151,348) | ||||||
Balance at Apr. 03, 2022 | $ 617,571 | $ 463,179 | $ 75 | $ 3,736 | $ 35,290,590 | $ (27,004,546) | $ (1,422,831) | $ 7,947,774 |
Balance (in Shares) at Apr. 03, 2022 | 200,000 | 150,000 | 50 | 3,736,006 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Statement of Cash Flows [Abstract] | ||
Net (loss) income | $ (545,356) | $ 1,036,001 |
Adjustments to reconcile net (loss) income to net cash flows from operating activities: | ||
Depreciation and amortization | 569,138 | 619,375 |
Deferred tax (benefit) provision | (156,139) | 37,062 |
Amortization of debt issuance costs | 30,163 | 6,633 |
Loss on disposal of property and equipment | 7,396 | 23,083 |
Funding from Paycheck Protection Program recognized as income | (838,864) | |
Deferred interest on loan from Main Street Lending Program | 24,242 | |
Noncash lease adjustment | 23,391 | 24,060 |
Changes in assets and liabilities: | ||
Accounts receivable | (3,290,761) | (3,048,143) |
Inventories | (2,526,727) | (784,585) |
Other current assets | (362,850) | (176,348) |
Related party receivable | (34,313) | (29,366) |
Other long-term assets | (1,914) | 11,500 |
Accounts payable | 2,543,264 | 1,032,380 |
Accrued expenses and other liabilities | 236,696 | 280,844 |
Postretirement benefit liability - health and life | (11,239) | (12,508) |
Cash used in operating activities | (3,519,251) | (1,794,634) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (186,177) | (202,778) |
Payments on life insurance policies | (11,941) | (49,901) |
Cash used in investing activities | (198,118) | (252,679) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net change in checks issued in excess of bank balance | 165,877 | (166,621) |
Net advances on lines of credit | 3,843,578 | 782,781 |
Payments on long-term debt | (347,642) | (314,631) |
Proceeds from issuance of long-term debt - Paycheck Protection Program | 2,000,000 | |
Proceeds from issuance of long-term debt - other | 38,290 | |
Payments on finance lease liabilities | (59,262) | (72,812) |
Payments on related party obligations | (38,483) | (34,302) |
Cash provided by financing activities | 3,602,358 | 2,194,415 |
Net change in cash and cash equivalents | (115,011) | 147,102 |
Cash and cash equivalents - beginning of period | 444,973 | 1,656,882 |
Effects of currency translation on cash and cash equivalents | (5,463) | 16,520 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 324,499 | $ 1,820,504 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 03, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 1. Basis of Presentation and Summary of Significant Accounting Policies Uniroyal Global Engineered Products, Inc. (the “Company,” “Uniroyal Global,” “we,” or “us”) owns all of the ownership interests in Uniroyal Engineered Products, LLC (“Uniroyal”), a U.S. manufacturer of textured coatings, and its holding company, UEP Holdings, LLC (“UEPH”), 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. 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 the Company’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. Uniroyal Global filed audited consolidated financial statements as of and for the fiscal years ended January 2, 2022 and January 3, 2021 which included all information and notes necessary for such complete presentation in conjunction with its 2021 Annual Report on Form 10-K. The results of operations for the interim period ended April 3, 2022 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 January 2, 2022, which are contained in the Company’s 2021 Annual Report on Form 10-K. The Company and its subsidiaries use a 52/53-week fiscal year ending on the Sunday nearest to December 31. The current year ending January 1, 2023 and the prior year ended January 2, 2022 are 52-week years. The Company’s U.K. subsidiaries use the calendar year end of December 31. The activity of the U.K. subsidiaries that occurs on the days that do not coincide with the Company’s year-end is not material. 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 presentation of the Company’s financial position as of April 3, 2022 and the results of operations, comprehensive (loss) income and cash flows for the interim periods ended April 3, 2022 and April 4, 2021. 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 4 – “Foreign Currency Translation” for additional discussion. For purposes of comparability, certain reclassifications have been made to amounts previously reported to conform with the current period presentation. Significant Accounting Policies For a discussion of Uniroyal Global’s significant accounting policies, refer to Note 1 – “Basis of Presentation and Summary of Significant Accounting Policies” to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2022. Coronavirus (COVID-19) Impact Update The coronavirus pandemic (“COVID-19”) and its related disruption of the supply chain has had an impact on markets the Company serves, its operations and liquidity. Since COVID-19 is a continually evolving situation, the Company cannot predict the long-term impact it will have on the economy or the Company’s business. The impact could have a material adverse effect on the Company’s financial position, results of operations and cash flows, which may require the Company to obtain additional financing. The Company continues to pursue supplementary cash flow opportunities, as discussed briefly below and in more detail in Notes 9 and 10. Through the Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”), the Company’s U.S. operations received $2,000,000 in March 2021 in funds from One Community Bank. The Company used all proceeds from the PPP loan for allowable expenses (as defined in the PPP loan) and applied for forgiveness of the PPP loan in accordance with the terms of the CARES Act. In August 2021, the Company was notified that all of its PPP Loan was forgiven. See Note 9 for further discussion. For the remaining nine months of fiscal year 2022 and the first three months of fiscal year 2023, the Company’s majority shareholder waived the interest expense and associated payments on the Company’s related party finance leases with him and the Company’s $2,000,000 senior subordinated promissory notes issued to him. See Note 10 for further discussion. In addition, executive officers of the Company agreed to a reduction in their salaries over the same time period. The total amount of cost savings will be approximately $731,000 for fiscal year 2022 and $244,000 for fiscal year 2023 which will provide additional liquidity to the Company. In addition, under amended documents that govern the preferred stock dividends, the preferred shareholders are no longer entitled to a quarterly dividend until such time as the Company declares a dividend payable. To preserve cash, quarterly preferred dividends were not declared on UEPH Series A and Series B preferred units and UGEL preferred stock during the three months ended April 3, 2022. Also to preserve cash, quarterly preferred dividend payments were deferred beginning with the three months ended December 29, 2019 through the three months ended April 4, 2021. Legal Proceedings In April 2021, a fine of £120,000 ($166,026) was imposed on the Company related to an incident in which an employee was injured in the course of his employment. At the end of the second quarter of 2021, the Company began making monthly payments for this fine in order to have it paid in full by the October 2022 due date. The accrual related to the fine was £46,856 ($61,543) and £69,356 ($93,484) as of April 3, 2022 and January 2, 2022, respectively, and was included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. |
Noncash Transactions and Supple
Noncash Transactions and Supplemental Disclosure of Cash Flow Information | 3 Months Ended |
Apr. 03, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Noncash Transactions and Supplemental Disclosure of Cash Flow Information | 2. Noncash Transactions and Supplemental Disclosure of Cash Flow Information The following is supplemental disclosure of cash paid for the three months ended : April 3, 2022 April 4, 2021 Interest $ 439,424 $ 397,515 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Apr. 03, 2022 | |
Fair Value Of Financial Instruments | |
Fair Value of Financial Instruments | 3. 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, accounts receivable, 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. For the three months ended April 3, 2022, there have been no changes in the application of valuation methods applied to similar assets and liabilities. |
Foreign Currency Translation
Foreign Currency Translation | 3 Months Ended |
Apr. 03, 2022 | |
Foreign Currency Translation [Abstract] | |
Foreign Currency Translation | 4. 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 year. The resulting translation gains and losses on assets and liabilities are recorded in accumulated other comprehensive loss and are excluded from net income until realized through a sale or liquidation of the foreign subsidiaries. Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of the Company’s foreign operations are included in other (expense) income in the accompanying consolidated statements of operations. |
Inventories
Inventories | 3 Months Ended |
Apr. 03, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories consist of the following: April 3, 2022 January 2, 2022 Raw materials $ 7,325,007 $ 7,595,155 Work-in-process 6,769,864 5,501,493 Finished goods 12,359,676 11,043,667 26,454,547 24,140,315 Less: Allowance for inventory obsolescence (2,311,630 ) (2,299,911 ) Total Inventories, net $ 24,142,917 $ 21,840,404 |
Other Long-term Assets
Other Long-term Assets | 3 Months Ended |
Apr. 03, 2022 | |
Other Assets, Noncurrent [Abstract] | |
Other Long-Term Assets | 6. Other Long-term Assets Other long-term assets consist of the following: April 3, 2022 January 2, 2022 Deferred tax asset, net $ 3,422,999 $ 3,264,876 Life insurance policies, net of policy loans 392,230 380,289 Debt issuance costs 250,816 281,049 Other 397,153 396,641 Total Other Long-term Assets $ 4,463,198 $ 4,322,855 |
Other Long-term Liabilities
Other Long-term Liabilities | 3 Months Ended |
Apr. 03, 2022 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-term Liabilities | 7. Other Long-term Liabilities Other long-term liabilities consist of the following: April 3, 2022 January 2, 2022 Deferred tax liability $ 934,472 $ 957,263 Other 3,263 3,263 Total Other Long-term Liabilities $ 937,735 $ 960,526 |
Lines of Credit
Lines of Credit | 3 Months Ended |
Apr. 03, 2022 | |
Line of Credit Facility [Abstract] | |
Lines of Credit | 8. Lines of Credit The Company’s Uniroyal subsidiary has available a $15,000,000 revolving line of credit financing agreement with Wells Fargo Capital Finance, LLC (“Uniroyal Line of Credit”), which matures on June 15, 2023. Interest is payable monthly at the Eurodollar rate plus 2.25% or Wells Fargo Capital Finance, LLC's prime rate (“WF Prime”) at the Company's election on outstanding balances up to $6,000,000 and WF Prime on amounts in excess of $6,000,000. The line of credit weighted average interest rate including unused facility fees was approximately 3.41% as of April 3, 2022. 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 Company was in compliance with these covenants as of April 3, 2022. The outstanding balance on the Uniroyal Line of Credit was $12,635,149 and $11,400,409 as of April 3, 2022 and January 2, 2022, respectively. The Company has classified the outstanding balance on the line of credit within current liabilities in the accompanying consolidated balance sheets. Based upon eligible accounts receivable, inventories and equipment at April 3, 2022, the Uniroyal Line of Credit provided additional availability of approximately $394,000 and, combined with its total cash balance of $111,728, Uniroyal had liquidity of approximately $506,000 as of April 3, 2022. UGL has available an £11,000,000 (approximately $14.4 million) revolving line of credit financing agreement with PNC Business Credit (‘‘UGL Line of Credit”), which is subject to a three-month notice by either party after a minimum term of three years. Interest is payable monthly at the Bank of England Base Rate (“BoE Base”) plus 2.25%-3.00%. The line of credit weighted average interest rate was approximately 2.72% as of April 3, 2022. 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 UGL’s assets and includes certain financial and restrictive covenants. The Company was in compliance with these covenants as of April 3, 2022 except for the ratio of Earnings before interest, taxes, depreciation and amortization (“EBITDA”) to debt service charges, which was less than the required minimum of 1.15 to 1. PNC Business Credit is in the process of reviewing an amendment to revise the covenant calculation to more closely align with the current business environment. The outstanding balance on the UGL Line of Credit was £6,706,359 and £4,760,432 ($8,808,447 and $6,416,510) as of April 3, 2022 and January 2, 2022, respectively. The Company has classified the outstanding balance on the line of credit within current liabilities in the accompanying consolidated balance sheets. Based upon eligible accounts receivable and inventories at April 3, 2022, the UGL Line of Credit provided additional availability of approximately $121,000 and, combined with its total cash balance of $205,067, UGL had liquidity of approximately $326,000 as of April 3, 2022. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Apr. 03, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 9. Long-term Debt Long-term debt consists of the following: Interest Rate April 3, 2022 January 2, 2022 Notes Payable Wells Fargo Capital Finance, LLC WF Prime $ 366,567 $ 471,299 Automotive lenders 0.0% 3,538,929 3,631,715 Wells Fargo Capital Finance, LLC LIBOR+3.00% 2,508,800 2,508,800 6,414,296 6,611,814 Equipment Financing Obligations Regents Capital Corporation 6.20%-7.36% 294,578 339,859 PNC Business Credit BoE Base + 3.00% 2,054,428 2,268,489 2,349,006 2,608,348 Total 8,763,302 9,220,162 Less: Current portion (3,489,646 ) (2,365,905 ) Long-term portion $ 5,273,656 $ 6,854,257 Paycheck Protection Program Loan In March 2021, the Company’s U.S. operations received $2,000,000 in funds from One Community Bank through the PPP administered by the U.S. Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act. The $2,000,000 loan was scheduled to mature in March 2026 and bore an interest rate of 1.0%. The loan may be prepaid at any time prior to maturity with no prepayment penalties. All or a portion of the loan may be forgiven by the SBA for costs the Company incurred for payroll, rent, utilities and all other allowable expenses during the 24-week period that began March 1, 2021. The Company used all proceeds from the loan to maintain payroll and make payments for lease, utility and other allowable expenses. In accordance with International Accounting Standards (“IAS”) 20, “Accounting for Government Grants and Disclosure of Government Assistance,” the Company recognized the funding from the PPP as grant income of $838,864 for the three months ended April 4, 2021. This amount is included as a component of net other (expense) income in the consolidated statement of operations for the three months ended April 4, 2021. In August 2021, the Company was notified by the SBA that all of its PPP Loan was forgiven. |
Related Party Obligations
Related Party Obligations | 3 Months Ended |
Apr. 03, 2022 | |
Related Party Obligations | |
Related Party Obligations | 10. Related Party Obligations Long-term debt to related parties consists of the following: Interest Rate April 3, 2022 January 2, 2022 Senior subordinated promissory notes 9.25% $ 2,000,000 $ 2,000,000 Senior secured promissory note 10.00% 765,655 765,655 Subordinated secured promissory note 8.00% 225,000 225,000 Subordinated secured promissory note 0.00% 1,225,911 1,225,911 Long-term debt to related parties $ 4,216,566 $ 4,216,566 The above notes were issued to the Company’s majority shareholder. The first three notes above were amended on March 25, 2022 to change the maturity date to January 15, 2024. No other terms of the notes were changed. Interest expense on these notes was $79,616 and $95,033 for the three months ended April 3, 2022 and April 4, 2021, respectively. Accrued interest of $23,367 and $23,786 related to these notes was included in accrued expenses and other liabilities in the accompanying consolidated balance sheets as of April 3, 2022 and January 2, 2022, respectively. The Company has finance leases under which it leases its main U.S. manufacturing facility and certain other property from a related party lessor entity, owned by the Company’s majority shareholder. These related party finance leases expire at various dates from October 2023 through October 2033. Related party finance leases are included in property and equipment, net, current maturities of related party finance lease liabilities, and related party finance lease liabilities, less current portion in the accompanying consolidated balance sheets. There were no new right-of-use assets obtained in exchange for related party finance lease obligations for the three months ended April 3, 2022 and April 4, 2021. The Company has security deposits aggregating $267,500 held by the lessor entity. The components of lease expense for the related party finance leases for the three months ended April 3, 2022 and April 4, 2021 are as follows: Three Months Ended April 3, 2022 April 4, 2021 Finance lease expense: Amortization of right-of-use assets $ 41,794 $ 41,794 Interest on lease liabilities 100,130 103,299 Total finance lease expense $ 141,924 $ 145,093 Cash paid for amounts included in the measurement of related party finance lease liabilities for the three months ended April 3, 2022 and April 4, 2021 are as follows: Three Months Ended April 3, 2022 April 4, 2021 Operating cash flows from finance leases $ 100,130 $ 103,299 Financing cash flows from finance leases $ 38,483 $ 34,302 Supplemental balance sheet and other information regarding related party finance leases are as follows: April 3, 2022 January 2, 2022 Finance leases: Property and equipment, net $ 1,831,710 $ 1,873,504 Current maturities of finance lease liabilities $ 172,278 $ 167,389 Finance lease liabilities, less current portion 2,300,866 2,344,239 Total finance lease liabilities $ 2,473,144 $ 2,511,628 Weighted average remaining lease term 10.3 years 10.5 years Weighted average discount rate 16.93 % 16.95 % Maturities of related party finance lease liabilities as of April 3, 2022 are as follows: Totals Due in one year or less $ 196,672 Due after one year through two years 523,777 Due after two years through three years 469,141 Due after three years through four years 473,329 Due after four years through five years 477,558 Thereafter 2,994,916 Total lease payments 5,135,393 Less: Interest (2,662,249 ) Total related party finance lease liabilities $ 2,473,144 The lower amount that is due in one year or less in the above table reflects the interest expense that was waived by the Company’s majority shareholder for the remaining nine months of fiscal year 2022 and the first three months of fiscal year 2023. The Company’s majority shareholder also waived the interest expense on the $2,000,000 senior subordinated promissory notes over the same time period. The total amount of cost savings will be approximately $446,000 for fiscal year 2022 and $148,000 for fiscal year 2023. |
Leases
Leases | 3 Months Ended |
Apr. 03, 2022 | |
Leases [Abstract] | |
Leases | 11. Leases The Company has operating leases for equipment and office facilities and finance leases for equipment. These leases expire at various dates from April 2022 through March 2039. Operating leases are included in operating lease right-of-use assets, net, accrued expenses and other liabilities, and operating lease liabilities, less current portion in the accompanying consolidated balance sheets. Finance leases are included in property and equipment, net, current maturities of finance lease liabilities, and finance lease liabilities, less current portion in the accompanying consolidated balance sheets. There were no new right-of-use assets obtained in exchange for lease obligations for the three months ended April 3, 2022 and April 4, 2021. The components of lease expense for the three months ended April 3, 2022 and April 4, 2021 are as follows: Three Months Ended April 3, 2022 April 4, 2021 Operating lease expense $ 240,647 $ 253,945 Finance lease expense: Amortization of right-of-use assets $ 15,961 $ 24,982 Interest on lease liabilities 2,678 5,267 Total finance lease expense $ 18,639 $ 30,249 Cash paid for amounts included in the measurement of lease liabilities for the three months ended April 3, 2022 and April 4, 2021 are as follows: Three Months Ended April 3, 2022 April 4, 2021 Operating cash flows from operating leases $ 235,697 $ 292,219 Operating cash flows from finance leases $ 2,678 $ 5,267 Financing cash flows from finance leases $ 59,262 $ 72,812 Supplemental balance sheet and other information related to operating leases are as follows: April 3, 2022 January 2, 2022 Operating leases: Operating lease right-of-use assets, net $ 5,367,004 $ 5,626,542 Operating lease liabilities, current portion (1) $ 410,282 $ 419,001 Operating lease liabilities, less current portion 5,158,797 5,391,395 Total operating lease liabilities $ 5,569,079 $ 5,810,396 Weighted average remaining lease term 15.48 years 15.54 years Weighted average discount rate 7.37 % 7.35 % (1) Included in accrued expenses and other liabilities in the consolidated balance sheets. Supplemental balance sheet and other information related to finance leases are as follows: April 3, 2022 January 2, 2022 Finance leases: Property and equipment, net $ 895,872 $ 911,833 Current maturities of finance lease liabilities $ 165,828 $ 210,007 Finance lease liabilities, less current portion 21,288 36,372 Total finance lease liabilities $ 187,116 $ 246,379 Weighted average remaining lease term 0.96 years 1.14 years Weighted average discount rate 4.87 % 4.75 % Maturities of operating and finance lease liabilities as of April 3, 2022 are as follows: Operating Leases Finance Leases Due in one year or less $ 808,424 $ 170,533 Due after one year through two years 591,404 15,505 Due after two years through three years 512,045 3,262 Due after three years through four years 512,045 3,000 Due after four years through five years 512,045 1,251 Thereafter 6,880,865 - Total lease payments 9,816,828 193,551 Less: Interest (4,247,749 ) (6,435 ) Total lease liabilities $ 5,569,079 $ 187,116 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Apr. 03, 2022 | |
Stockholders' Equity Note [Abstract] | |
Accumulated Other Comprehensive Loss | 12. Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss for the three months ended April 3, 2022 and April 4, 2021 were as follows: Minimum Foreign Currency Total Balance at January 3, 2021 $ (154,662 ) $ (1,116,659 ) $ (1,271,321 ) Other comprehensive income - 56,174 56,174 Balance at April 4, 2021 $ (154,662 ) $ (1,060,485 ) $ (1,215,147 ) Balance at January 2, 2022 $ (77,138 ) $ (1,194,345 ) $ (1,271,483 ) Other comprehensive loss - (151,348 ) (151,348 ) Balance at April 3, 2022 $ (77,138 ) $ (1,345,693 ) $ (1,422,831 ) |
(Loss) Income per Common Share
(Loss) Income per Common Share | 3 Months Ended |
Apr. 03, 2022 | |
Earnings Per Share [Abstract] | |
(Loss) Income per Common Share | 13. (Loss) Income per Common Share Due to the net loss allocable to common shareholders for the three months ended April 3, 2022, the calculations of basic and diluted loss per share were the same since including options (as provided under the Company’s 2015 Stock Option Plan) to purchase shares of the Company’s 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 three months ended April 3, 2022, the calculation would have excluded options to purchase 124,050 shares of common stock because the options’ weighted average exercise price of $14.05 per share was greater than the average market price of the common shares. The calculation of diluted earnings per share for the three months ended April 4, 2021 excluded options to purchase 139,300 shares of common stock because the options’ weighted average exercise price of $14.02 per share was greater than the average market price of the common shares. |
Revenue
Revenue | 3 Months Ended |
Apr. 03, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue | 14. 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 the Company’s 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. The following table sets forth revenue disaggregated by the Company’s automotive and industrial sectors Three Months Ended April 3, 2022 April 4, 2021 Revenue by sector: Automotive $ 11,917,231 $ 14,022,402 Industrial 8,153,320 7,873,599 Total Revenue $ 20,070,551 $ 21,896,001 The following table sets forth revenue disaggregated by the geographic locations of the Company’s customers Three Months Ended April 3, 2022 April 4, 2021 Revenue by customer location: North America $ 10,249,943 $ 10,166,297 Europe 8,297,226 10,303,440 Asia 1,034,131 1,281,196 Other 489,251 145,068 Total Revenue $ 20,070,551 $ 21,896,001 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 03, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events The Company has evaluated subsequent events occurring through May 13, 2022 for events requiring recording or disclosure in the April 3, 2022 consolidated financial statements. There were no material events or transactions occurring during this period requiring recognition or disclosure. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Apr. 03, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 the Company’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. Uniroyal Global filed audited consolidated financial statements as of and for the fiscal years ended January 2, 2022 and January 3, 2021 which included all information and notes necessary for such complete presentation in conjunction with its 2021 Annual Report on Form 10-K. The results of operations for the interim period ended April 3, 2022 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 January 2, 2022, which are contained in the Company’s 2021 Annual Report on Form 10-K. The Company and its subsidiaries use a 52/53-week fiscal year ending on the Sunday nearest to December 31. The current year ending January 1, 2023 and the prior year ended January 2, 2022 are 52-week years. The Company’s U.K. subsidiaries use the calendar year end of December 31. The activity of the U.K. subsidiaries that occurs on the days that do not coincide with the Company’s year-end is not material. 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 presentation of the Company’s financial position as of April 3, 2022 and the results of operations, comprehensive (loss) income and cash flows for the interim periods ended April 3, 2022 and April 4, 2021. 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 4 – “Foreign Currency Translation” for additional discussion. For purposes of comparability, certain reclassifications have been made to amounts previously reported to conform with the current period presentation. |
Significant Accounting Policies | Significant Accounting Policies For a discussion of Uniroyal Global’s significant accounting policies, refer to Note 1 – “Basis of Presentation and Summary of Significant Accounting Policies” to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2022. |
Coronavirus (COVID-19) Impact Update | Coronavirus (COVID-19) Impact Update The coronavirus pandemic (“COVID-19”) and its related disruption of the supply chain has had an impact on markets the Company serves, its operations and liquidity. Since COVID-19 is a continually evolving situation, the Company cannot predict the long-term impact it will have on the economy or the Company’s business. The impact could have a material adverse effect on the Company’s financial position, results of operations and cash flows, which may require the Company to obtain additional financing. The Company continues to pursue supplementary cash flow opportunities, as discussed briefly below and in more detail in Notes 9 and 10. Through the Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”), the Company’s U.S. operations received $2,000,000 in March 2021 in funds from One Community Bank. The Company used all proceeds from the PPP loan for allowable expenses (as defined in the PPP loan) and applied for forgiveness of the PPP loan in accordance with the terms of the CARES Act. In August 2021, the Company was notified that all of its PPP Loan was forgiven. See Note 9 for further discussion. For the remaining nine months of fiscal year 2022 and the first three months of fiscal year 2023, the Company’s majority shareholder waived the interest expense and associated payments on the Company’s related party finance leases with him and the Company’s $2,000,000 senior subordinated promissory notes issued to him. See Note 10 for further discussion. In addition, executive officers of the Company agreed to a reduction in their salaries over the same time period. The total amount of cost savings will be approximately $731,000 for fiscal year 2022 and $244,000 for fiscal year 2023 which will provide additional liquidity to the Company. In addition, under amended documents that govern the preferred stock dividends, the preferred shareholders are no longer entitled to a quarterly dividend until such time as the Company declares a dividend payable. To preserve cash, quarterly preferred dividends were not declared on UEPH Series A and Series B preferred units and UGEL preferred stock during the three months ended April 3, 2022. Also to preserve cash, quarterly preferred dividend payments were deferred beginning with the three months ended December 29, 2019 through the three months ended April 4, 2021. |
Legal Proceedings | Legal Proceedings In April 2021, a fine of £120,000 ($166,026) was imposed on the Company related to an incident in which an employee was injured in the course of his employment. At the end of the second quarter of 2021, the Company began making monthly payments for this fine in order to have it paid in full by the October 2022 due date. The accrual related to the fine was £46,856 ($61,543) and £69,356 ($93,484) as of April 3, 2022 and January 2, 2022, respectively, and was included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. |
Noncash Transactions and Supp_2
Noncash Transactions and Supplemental Disclosure of Cash Flow Information (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental disclosure of cash paid | April 3, 2022 April 4, 2021 Interest $ 439,424 $ 397,515 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | April 3, 2022 January 2, 2022 Raw materials $ 7,325,007 $ 7,595,155 Work-in-process 6,769,864 5,501,493 Finished goods 12,359,676 11,043,667 26,454,547 24,140,315 Less: Allowance for inventory obsolescence (2,311,630 ) (2,299,911 ) Total Inventories, net $ 24,142,917 $ 21,840,404 |
Other Long-term Assets (Tables)
Other Long-term Assets (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Other Assets, Noncurrent [Abstract] | |
Schedule of Other Long-term Assets | April 3, 2022 January 2, 2022 Deferred tax asset, net $ 3,422,999 $ 3,264,876 Life insurance policies, net of policy loans 392,230 380,289 Debt issuance costs 250,816 281,049 Other 397,153 396,641 Total Other Long-term Assets $ 4,463,198 $ 4,322,855 |
Other Long-term Liabilities (Ta
Other Long-term Liabilities (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Long-term Liabilities | April 3, 2022 January 2, 2022 Deferred tax liability $ 934,472 $ 957,263 Other 3,263 3,263 Total Other Long-term Liabilities $ 937,735 $ 960,526 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Interest Rate April 3, 2022 January 2, 2022 Notes Payable Wells Fargo Capital Finance, LLC WF Prime $ 366,567 $ 471,299 Automotive lenders 0.0% 3,538,929 3,631,715 Wells Fargo Capital Finance, LLC LIBOR+3.00% 2,508,800 2,508,800 6,414,296 6,611,814 Equipment Financing Obligations Regents Capital Corporation 6.20%-7.36% 294,578 339,859 PNC Business Credit BoE Base + 3.00% 2,054,428 2,268,489 2,349,006 2,608,348 Total 8,763,302 9,220,162 Less: Current portion (3,489,646 ) (2,365,905 ) Long-term portion $ 5,273,656 $ 6,854,257 |
Related Party Obligations (Tabl
Related Party Obligations (Tables) - Related party [Member] | 3 Months Ended |
Apr. 03, 2022 | |
Related Party Obligations (Tables) [Line Items] | |
Schedule of Long-term Debt to Related Parties | Interest Rate April 3, 2022 January 2, 2022 Senior subordinated promissory notes 9.25% $ 2,000,000 $ 2,000,000 Senior secured promissory note 10.00% 765,655 765,655 Subordinated secured promissory note 8.00% 225,000 225,000 Subordinated secured promissory note 0.00% 1,225,911 1,225,911 Long-term debt to related parties $ 4,216,566 $ 4,216,566 |
Schedule of Components of Lease Expense | Three Months Ended April 3, 2022 April 4, 2021 Finance lease expense: Amortization of right-of-use assets $ 41,794 $ 41,794 Interest on lease liabilities 100,130 103,299 Total finance lease expense $ 141,924 $ 145,093 |
Schedule of Measurement of Related Party Finance Lease Liabilities | Three Months Ended April 3, 2022 April 4, 2021 Operating cash flows from finance leases $ 100,130 $ 103,299 Financing cash flows from finance leases $ 38,483 $ 34,302 |
Schedule of Supplemental Information Related to Finance Leases | April 3, 2022 January 2, 2022 Finance leases: Property and equipment, net $ 1,831,710 $ 1,873,504 Current maturities of finance lease liabilities $ 172,278 $ 167,389 Finance lease liabilities, less current portion 2,300,866 2,344,239 Total finance lease liabilities $ 2,473,144 $ 2,511,628 Weighted average remaining lease term 10.3 years 10.5 years Weighted average discount rate 16.93 % 16.95 % |
Schedule of Maturities of Related Party Finance Lease Liabilities | Totals Due in one year or less $ 196,672 Due after one year through two years 523,777 Due after two years through three years 469,141 Due after three years through four years 473,329 Due after four years through five years 477,558 Thereafter 2,994,916 Total lease payments 5,135,393 Less: Interest (2,662,249 ) Total related party finance lease liabilities $ 2,473,144 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease Expense | Three Months Ended April 3, 2022 April 4, 2021 Operating lease expense $ 240,647 $ 253,945 Finance lease expense: Amortization of right-of-use assets $ 15,961 $ 24,982 Interest on lease liabilities 2,678 5,267 Total finance lease expense $ 18,639 $ 30,249 |
Schedule of Cash Paid for Lease Liabilities | Three Months Ended April 3, 2022 April 4, 2021 Operating cash flows from operating leases $ 235,697 $ 292,219 Operating cash flows from finance leases $ 2,678 $ 5,267 Financing cash flows from finance leases $ 59,262 $ 72,812 |
Schedule of Supplemental Information Related to Operating Leases | April 3, 2022 January 2, 2022 Operating leases: Operating lease right-of-use assets, net $ 5,367,004 $ 5,626,542 Operating lease liabilities, current portion (1) $ 410,282 $ 419,001 Operating lease liabilities, less current portion 5,158,797 5,391,395 Total operating lease liabilities $ 5,569,079 $ 5,810,396 Weighted average remaining lease term 15.48 years 15.54 years Weighted average discount rate 7.37 % 7.35 % (1) Included in accrued expenses and other liabilities in the consolidated balance sheets. |
Schedule of Supplemental Information Related to Finance Leases | April 3, 2022 January 2, 2022 Finance leases: Property and equipment, net $ 895,872 $ 911,833 Current maturities of finance lease liabilities $ 165,828 $ 210,007 Finance lease liabilities, less current portion 21,288 36,372 Total finance lease liabilities $ 187,116 $ 246,379 Weighted average remaining lease term 0.96 years 1.14 years Weighted average discount rate 4.87 % 4.75 % |
Schedule of Maturities of Lease Liabilities | Operating Leases Finance Leases Due in one year or less $ 808,424 $ 170,533 Due after one year through two years 591,404 15,505 Due after two years through three years 512,045 3,262 Due after three years through four years 512,045 3,000 Due after four years through five years 512,045 1,251 Thereafter 6,880,865 - Total lease payments 9,816,828 193,551 Less: Interest (4,247,749 ) (6,435 ) Total lease liabilities $ 5,569,079 $ 187,116 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Minimum Foreign Currency Total Balance at January 3, 2021 $ (154,662 ) $ (1,116,659 ) $ (1,271,321 ) Other comprehensive income - 56,174 56,174 Balance at April 4, 2021 $ (154,662 ) $ (1,060,485 ) $ (1,215,147 ) Balance at January 2, 2022 $ (77,138 ) $ (1,194,345 ) $ (1,271,483 ) Other comprehensive loss - (151,348 ) (151,348 ) Balance at April 3, 2022 $ (77,138 ) $ (1,345,693 ) $ (1,422,831 ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Revenue Disaggregated by Automotive and Industrial Sectors | Three Months Ended April 3, 2022 April 4, 2021 Revenue by sector: Automotive $ 11,917,231 $ 14,022,402 Industrial 8,153,320 7,873,599 Total Revenue $ 20,070,551 $ 21,896,001 |
Schedule of Revenue Disaggregated by Geographic Location | Three Months Ended April 3, 2022 April 4, 2021 Revenue by customer location: North America $ 10,249,943 $ 10,166,297 Europe 8,297,226 10,303,440 Asia 1,034,131 1,281,196 Other 489,251 145,068 Total Revenue $ 20,070,551 $ 21,896,001 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 3 Months Ended | |||||
Apr. 03, 2022USD ($) | Jan. 02, 2023USD ($) | Apr. 03, 2022GBP (£) | Jan. 02, 2022USD ($) | Jan. 02, 2022GBP (£) | Mar. 31, 2021USD ($) | |
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Senior subordinated promissory notes | $ 2,000,000 | |||||
Cost of savings | $ 731,000 | |||||
Forecast [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Cost of savings | $ 244,000 | |||||
COVID-19 [Member] | Second Draw P P P Loan [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Proceeds from loan | $ 2,000,000 | |||||
Health And Safety Executive [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Fees imposed | 166,026 | £ 120,000 | ||||
Estimated amount of fine to be imposed under legal advice | $ 61,543 | £ 46,856 | $ 93,484 | £ 69,356 |
Noncash Transactions and Supp_3
Noncash Transactions and Supplemental Disclosure of Cash Flow Information (Details) - Schedule of supplemental disclosure of cash paid - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Schedule of supplemental disclosure of cash paid [Abstract] | ||
Interest | $ 439,424 | $ 397,515 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) | Apr. 03, 2022 | Jan. 02, 2022 |
Schedule of inventories [Abstract] | ||
Raw materials | $ 7,325,007 | $ 7,595,155 |
Work-in-process | 6,769,864 | 5,501,493 |
Finished goods | 12,359,676 | 11,043,667 |
Inventories, gross | 26,454,547 | 24,140,315 |
Less: Allowance for inventory obsolescence | (2,311,630) | (2,299,911) |
Total Inventories, net | $ 24,142,917 | $ 21,840,404 |
Other Long-term Assets (Details
Other Long-term Assets (Details) - Schedule of other long-term assets - USD ($) | Apr. 03, 2022 | Jan. 02, 2022 |
Schedule of other long-term assets [Abstract] | ||
Deferred tax asset, net | $ 3,422,999 | $ 3,264,876 |
Life insurance policies, net of policy loans | 392,230 | 380,289 |
Debt issuance costs | 250,816 | 281,049 |
Other | 397,153 | 396,641 |
Total Other Long-term Assets | $ 4,463,198 | $ 4,322,855 |
Other Long-term Liabilities (De
Other Long-term Liabilities (Details) - Schedule of other long-term liabilities - USD ($) | Apr. 03, 2022 | Jan. 02, 2022 |
Schedule of other long-term liabilities [Abstract] | ||
Deferred tax liability | $ 934,472 | $ 957,263 |
Other | 3,263 | 3,263 |
Total Other Long-term Liabilities | $ 937,735 | $ 960,526 |
Lines of Credit (Details)
Lines of Credit (Details) | 3 Months Ended | |||
Apr. 03, 2022USD ($) | Apr. 03, 2022GBP (£) | Jan. 02, 2022USD ($) | Jan. 02, 2022GBP (£) | |
Wells Fargo Capital Finance LLC [Member] | ||||
Lines of Credit (Details) [Line Items] | ||||
Credit Instrument Maturity Date | Jun. 15, 2023 | |||
Line of credit maximum amount | $ 15,000,000 | |||
Line of credit interest rate description | Interest is payable monthly at the Eurodollar rate plus 2.25% or Wells Fargo Capital Finance, LLC's prime rate (“WF Prime”) at the Company's election on outstanding balances up to $6,000,000 and WF Prime on amounts in excess of $6,000,000. | |||
Facility fees | 3.41% | 3.41% | ||
Line of credit outstanding | $ 12,635,149 | $ 11,400,409 | ||
Line of Credit provided additional availability | 394,000 | |||
Total cash balance | 111,728 | |||
Line of credit liquidity amount | 506,000 | |||
New Ugl Line Of Credit [Member] | ||||
Lines of Credit (Details) [Line Items] | ||||
Line of credit maximum amount | $ 14,400,000 | |||
Line of credit interest rate description | Interest is payable monthly at the Bank of England Base Rate (“BoE Base”) plus 2.25%-3.00%. | |||
New Ugl Line Of Credit [Member] | Ugl [Member] | ||||
Lines of Credit (Details) [Line Items] | ||||
Line of credit maximum amount | £ | £ 11,000,000 | |||
Line of credit term | 3 years | |||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | ||||
Lines of Credit (Details) [Line Items] | ||||
Line of credit outstanding | $ 4,760,432 | £ 6,706,359 | $ 6,416,510 | £ 8,808,447 |
Line of Credit provided additional availability | 121,000 | |||
Total cash balance | 205,067 | |||
Line of credit liquidity amount | $ 326,000 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) | 3 Months Ended | |
Apr. 04, 2021 | Mar. 31, 2021 | |
Long-term Debt (Details) [Line Items] | ||
Grant income | $ 838,864 | |
PPPLoan [Member] | ||
Long-term Debt (Details) [Line Items] | ||
Grant income | $ 2,000,000 | |
Second Draw P P P Loan [Member] | ||
Long-term Debt (Details) [Line Items] | ||
Proceeds from loan | $ 2,000,000 | |
First Draw P P P [Member] | ||
Long-term Debt (Details) [Line Items] | ||
Interest rate | 1.00% |
Long-term Debt (Details) - Sche
Long-term Debt (Details) - Schedule of long-term debt - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Jan. 02, 2022 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 8,763,302 | $ 9,220,162 |
Less: Current portion | (3,489,646) | (2,365,905) |
Long-term Portion | 5,273,656 | 6,854,257 |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 6,414,296 | 6,611,814 |
Notes Payable [Member] | Wells Fargo Capital Finance, LLC [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 366,567 | 471,299 |
Notes Payable [Member] | Automotive lenders [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 0.00% | |
Long-term debt | $ 3,538,929 | 3,631,715 |
Notes Payable [Member] | Wells Fargo Capital Finance, LLC 1 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate basis | LIBOR+ | |
Long term debt, interest rate | 3.00% | |
Long-term debt | $ 2,508,800 | 2,508,800 |
Equipment Financing Obligations [Member] | Regents Capital Corporation [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 294,578 | 339,859 |
Equipment Financing Obligations [Member] | Regents Capital Corporation [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 6.20% | |
Equipment Financing Obligations [Member] | Regents Capital Corporation [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 7.36% | |
Equipment Financing Obligation [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,349,006 | 2,608,348 |
Equipment Financing Obligation [Member] | PNC Business Credit [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate basis | BoE Base + | |
Long term debt, interest rate | 3.00% | |
Long-term debt | $ 2,054,428 | $ 2,268,489 |
Related Party Obligations (Deta
Related Party Obligations (Details) - USD ($) | 3 Months Ended | |||
Apr. 03, 2022 | Apr. 04, 2021 | Jan. 02, 2023 | Jan. 02, 2022 | |
Related Party Obligations (Details) [Line Items] | ||||
Interest expense | $ 79,616 | $ 95,033 | ||
Accrued expenses and other liabilities | 23,367 | $ 23,786 | ||
Related party finance lease, security deposit | 267,500 | |||
Interest expense waived | $ 2,000,000 | |||
Accrued dividends | $ 446,000 | |||
Forecast [Member] | ||||
Related Party Obligations (Details) [Line Items] | ||||
Accrued dividends | $ 148,000 | |||
Promissory Notes[ Member] | ||||
Related Party Obligations (Details) [Line Items] | ||||
Maturity date | Mar. 25, 2022 |
Related Party Obligations (De_2
Related Party Obligations (Details) - Schedule of long-term debt to related parties - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Jan. 02, 2022 | |
Related Party Transaction [Line Items] | ||
Total Long-term Debt to Related Parties | $ 4,216,566 | $ 4,216,566 |
Senior subordinated promissory note [Member] | ||
Related Party Transaction [Line Items] | ||
Long-term debt, interest rate | 9.25% | |
Total Long-term Debt to Related Parties | $ 2,000,000 | 2,000,000 |
Senior secured promissory note [Member] | ||
Related Party Transaction [Line Items] | ||
Long-term debt, interest rate | 10.00% | |
Total Long-term Debt to Related Parties | $ 765,655 | 765,655 |
Subordinated secured promissory note [Member] | ||
Related Party Transaction [Line Items] | ||
Long-term debt, interest rate | 8.00% | |
Total Long-term Debt to Related Parties | $ 225,000 | 225,000 |
Subordinated secured promissory note 2 [Member] | ||
Related Party Transaction [Line Items] | ||
Long-term debt, interest rate | 0.00% | |
Total Long-term Debt to Related Parties | $ 1,225,911 | $ 1,225,911 |
Related Party Obligations (De_3
Related Party Obligations (Details) - Schedule of components of lease expense - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Finance lease expense: | ||
Amortization of right-of-use assets | $ 41,794 | $ 41,794 |
Interest on lease liabilities | 100,130 | 103,299 |
Total finance lease expense | $ 141,924 | $ 145,093 |
Related Party Obligations (De_4
Related Party Obligations (Details) - Schedule of measurement of related party finance lease liabilities - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Schedule of measurement of related party finance lease liabilities [Abstract] | ||
Operating cash flows from finance leases | $ 100,130 | $ 103,299 |
Financing cash flows from finance leases | $ 38,483 | $ 34,302 |
Related Party Obligations (De_5
Related Party Obligations (Details) - Schedule of supplemental balance sheet and other information regarding related party finance leases - Related Party [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Apr. 03, 2022 | Jan. 02, 2022 | |
Finance leases: | ||
Property and equipment, net | $ 1,831,710 | $ 1,873,504 |
Current maturities of finance lease liabilities | 172,278 | 167,389 |
Finance lease liabilities, less current portion | 2,300,866 | 2,344,239 |
Total finance lease liabilities | $ 2,473,144 | $ 2,511,628 |
Weighted average remaining lease term | 10 years 3 months 18 days | 10 years 6 months |
Weighted average discount rate | 16.93% | 16.95% |
Related Party Obligations (De_6
Related Party Obligations (Details) - Schedule of maturities of related party finance lease liabilities | 3 Months Ended |
Apr. 03, 2022USD ($) | |
Schedule of maturities of related party finance lease liabilities [Abstract] | |
Due in one year or less | $ 196,672 |
Due after one year through two years | 523,777 |
Due after two years through three years | 469,141 |
Due after three years through four years | 473,329 |
Due after four years through five years | 477,558 |
Thereafter | 2,994,916 |
Total lease payments | 5,135,393 |
Less: Interest | (2,662,249) |
Total related party finance lease liabilities | $ 2,473,144 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of components of lease expense - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Schedule of components of lease expense [Abstract] | ||
Operating lease expense | $ 240,647 | $ 253,945 |
Finance lease expense: | ||
Amortization of right-of-use assets | 15,961 | 24,982 |
Interest on lease liabilities | 2,678 | 5,267 |
Total finance lease expense | $ 18,639 | $ 30,249 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of cash paid for lease liabilities - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Schedule of cash paid for lease liabilities [Abstract] | ||
Operating cash flows from operating leases | $ 235,697 | $ 292,219 |
Operating cash flows from finance leases | 2,678 | 5,267 |
Financing cash flows from finance leases | $ 59,262 | $ 72,812 |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of supplemental information related to operating leases - USD ($) | Apr. 03, 2022 | Jan. 02, 2022 | |
Operating leases: | |||
Operating lease right-of-use assets, net | $ 5,367,004 | $ 5,626,542 | |
Operating lease liabilities, current portion | [1] | 410,282 | 419,001 |
Operating lease liabilities, less current portion | 5,158,797 | 5,391,395 | |
Total operating lease liabilities | $ 5,569,079 | $ 5,810,396 | |
Weighted average remaining lease term | 15 years 5 months 23 days | 15 years 6 months 14 days | |
Weighted average discount rate | 7.37% | 7.35% | |
[1] | Included in accrued expenses and other liabilities in the consolidated balance sheets. |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of supplemental information related to finance leases - USD ($) | Apr. 03, 2022 | Jan. 02, 2022 |
Finance leases: | ||
Property and equipment, net | $ 895,872 | $ 911,833 |
Current maturities of finance lease liabilities | 165,828 | 210,007 |
Finance lease liabilities, less current portion | 21,288 | 36,372 |
Total finance lease liabilities | $ 187,116 | $ 246,379 |
Weighted average remaining lease term | 11 months 15 days | 1 year 1 month 20 days |
Weighted average discount rate | 4.87% | 4.75% |
Leases (Details) - Schedule o_5
Leases (Details) - Schedule of maturities of operating and finance lease liabilities | Apr. 03, 2022USD ($) |
Operating Leases | |
Leases (Details) - Schedule of maturities of operating and finance lease liabilities [Line Items] | |
Due in one year or less | $ 808,424 |
Due after one year through two years | 591,404 |
Due after two years through three years | 512,045 |
Due after three years through four years | 512,045 |
Due after four years through five years | 512,045 |
Thereafter | 6,880,865 |
Total lease payments | 9,816,828 |
Less: Interest | (4,247,749) |
Total lease liabilities | 5,569,079 |
Finance Leases | |
Leases (Details) - Schedule of maturities of operating and finance lease liabilities [Line Items] | |
Due in one year or less | 170,533 |
Due after one year through two years | 15,505 |
Due after two years through three years | 3,262 |
Due after three years through four years | 3,000 |
Due after four years through five years | 1,251 |
Thereafter | |
Total lease payments | 193,551 |
Less: Interest | (6,435) |
Total lease liabilities | $ 187,116 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - Schedule of accumulated other comprehensive loss - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | $ (1,271,483) | $ (1,271,321) |
Other comprehensive loss | (151,348) | 56,174 |
Balance | (1,422,831) | (1,215,147) |
Minimum Benefit Liability Adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (77,138) | (154,662) |
Other comprehensive loss | ||
Balance | (77,138) | (154,662) |
Foreign Currency Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (1,194,345) | (1,116,659) |
Other comprehensive loss | (151,348) | 56,174 |
Balance | $ (1,345,693) | $ (1,060,485) |
(Loss) Income per Common Share
(Loss) Income per Common Share (Details) - $ / shares | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Earnings Per Share [Abstract] | ||
Weighted average effect of dilutive securities | 124,050 | 139,300 |
Option exercise price | $ 14.05 | $ 14.02 |
Revenue (Details) - Schedule of
Revenue (Details) - Schedule of revenue disaggregated by automotive and industrial sectors - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Revenue by sector: | ||
Automotive | $ 11,917,231 | $ 14,022,402 |
Industrial | 8,153,320 | 7,873,599 |
Total Revenue | $ 20,070,551 | $ 21,896,001 |
Revenue (Details) - Schedule _2
Revenue (Details) - Schedule of revenue disaggregated by geographic location - USD ($) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Revenue, Major Customer [Line Items] | ||
Total Revenue | $ 20,070,551 | $ 21,896,001 |
North America [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total Revenue | 10,249,943 | 10,166,297 |
Europe [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total Revenue | 8,297,226 | 10,303,440 |
Asia [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total Revenue | 1,034,131 | 1,281,196 |
Other Countries [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total Revenue | $ 489,251 | $ 145,068 |