The Eastern Company (EML) 10-Q 29 Apr 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Apr. 02, 2016	Apr. 27, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	EASTERN CO
Entity Central Index Key	31,107
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		6,250,207
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 2, 2016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Current Assets
Cash and cash equivalents	$ 16,728,086	$ 17,814,986
Accounts receivable, less allowances: $461,000 - 2016; $450,000 - 2015	17,864,495	17,502,445
Inventories	35,684,938	36,842,413
Prepaid expenses and other assets	2,250,755	2,122,215
Deferred income taxes	986,167	986,167
Total Current Assets	73,514,441	75,268,226
Property, Plant and Equipment	63,813,669	63,438,241
Accumulated depreciation	(37,466,820)	(36,636,775)
Net Property, Plant and Equipment	26,346,849	26,801,466
Goodwill	14,848,095	14,790,793
Trademarks	169,845	164,957
Patents, technology and other intangibles net of accumulated amortization	2,032,599	2,113,576
Deferred income taxes	2,366,374	2,599,541
Total Other Assets	19,416,913	19,668,867
TOTAL ASSETS	119,278,203	121,738,559
Current Liabilities
Accounts payable	7,792,497	9,109,394
Accrued compensation	1,809,148	2,873,871
Other accrued expenses	1,589,817	1,751,052
Current portion of long-term debt	1,250,000	1,428,571
Total Current Liabilities	12,441,462	15,162,888
Other long-term liabilities	286,920	286,920
Long-term debt, less current portion	1,250,000	1,785,714
Accrued postretirement benefits	744,473	793,055
Accrued pension cost	$ 24,547,739	$ 24,304,926
Shareholders' Equity
Voting Preferred Stock, no par value: Authorized and unissued: 1,000,000 shares
Nonvoting Preferred Stock, no par value: Authorized and unissued: 1,000,000 shares
Common Stock, no par value: Authorized: 50,000,000 shares Issued: 8,944,936 shares in 2016 and 8,942,461 shares in 2015	$ 29,036,652	$ 28,997,050
Treasury Stock: 2,694,729 shares in 2016 and 2015	(19,105,723)	(19,105,723)
Retained earnings	90,557,674	90,597,041
Accumulated other comprehensive income (loss):
Foreign currency translation	(976,311)	(1,154,098)
Unrecognized net pension and postretirement benefit costs, net of tax	(19,504,683)	(19,929,214)
Accumulated other comprehensive loss	(20,480,994)	(21,083,312)
Total Shareholders' Equity	80,007,609	79,405,056
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 119,278,203	$ 121,738,559

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Current Assets
Accounts receivable, allowances	$ 461,000	$ 450,000
Shareholders' Equity
Voting Preferred Stock, no par value (in dollars per share)	$ 0	$ 0
Voting Preferred Stock, shares authorized (in shares)	1,000,000	1,000,000
Nonvoting Preferred Stock, no par value (in dollars per share)	$ 0	$ 0
Nonvoting Preferred Stock, shares authorized (in shares)	1,000,000	1,000,000
Common Stock, no par value (in dollars per share)	$ 0	$ 0
Common Stock, shares authorized (in shares)	50,000,000	50,000,000
Common Stock, shares issued (in shares)	8,944,936	8,942,461
Treasury Stock, shares (in shares)	2,694,729	2,694,729

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract]
Net sales	$ 33,101,657	$ 36,876,842
Cost of products sold	(26,681,211)	(29,541,664)
Gross margin	6,420,446	7,335,178
Selling and administrative expenses	(5,459,582)	(5,963,695)
Operating profit	960,864	1,371,483
Interest expense	(36,285)	(52,825)
Other income	21,374	7,007
Income before income taxes	945,953	1,325,665
Income taxes	297,880	451,714
Net income	$ 648,073	$ 873,951
Earnings per Share:
Basic (in dollars per share)	$ 0.10	$ 0.14
Diluted (in dollars per share)	0.10	0.14
Cash dividends per share: (in dollars per share)	$ 0.11	$ 0.11

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract]
Net income	$ 648,073	$ 873,951
Other comprehensive (loss) income:
Change in foreign currency translation	177,787	(594,332)
Change in pension and postretirement benefit costs, net of taxes of: 2016 - $233,167 2015 - $186,514	424,531	339,590
Total other comprehensive (loss) income	602,318	(254,742)
Comprehensive income	$ 1,250,391	$ 619,209

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Other comprehensive (loss) income:
Change in pension and postretirement benefit costs, taxes	$ 233,167	$ 186,514

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Operating Activities
Net income	$ 648,073	$ 873,951
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	928,136	959,857
Unrecognized pension & postretirement benefits	851,929	848,173
Loss on sale of equipment and other assets	19,780	0
Issuance of Common Stock for directors' fees	39,601	7,498
Changes in operating assets and liabilities:
Accounts receivable	(339,041)	(2,317,994)
Inventories	1,254,683	33,403
Prepaid expenses and other	(127,991)	(140,975)
Recoverable income taxes receivable	0	380,000
Other assets	(19,977)	57,208
Accounts payable	(1,336,219)	(14,302)
Accrued compensation	(1,099,262)	(1,349,334)
Other accrued expenses	(161,982)	989,385
Net cash provided by operating activities	657,730	326,870
Investing Activities
Purchases of property, plant and equipment	(338,270)	(820,161)
Net cash used in investing activities	(338,270)	(820,161)
Financing Activities
Principal payments on long-term debt	(714,285)	(357,142)
Dividends paid	(687,439)	(686,841)
Net cash used in financing activities	(1,401,724)	(1,043,983)
Effect of exchange rate changes on cash	(4,636)	(161,879)
Net change in cash and cash equivalents	(1,086,900)	(1,699,153)
Cash and cash equivalents at beginning of period	17,814,986	15,834,444
Cash and cash equivalents at end of period	$ 16,728,086	$ 14,135,291

Basis of Presentation

Basis of Presentation	3 Months Ended
	Apr. 02, 2016
Basis of Presentation [Abstract]
Basis of Presentation	Note A – Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. Refer to the Company’s consolidated financial statements and notes thereto included in its Form 10-K for the year ended January 2, 2016 for additional information. The accompanying condensed consolidated financial statements are unaudited. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for interim periods have been reflected therein. All intercompany accounts and transactions are eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The condensed consolidated balance sheet as of January 2, 2016 has been derived from the audited consolidated balance sheet at that date.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Apr. 02, 2016
Earnings Per Share [Abstract]
Earnings Per Share	Note B – Earnings Per Share The denominators used in the earnings per share computations follow: Three Months Ended April 2, 2016 April 4, 2015 Basic: Weighted average shares outstanding 6,247,760 6,244,088 Diluted: Weighted average shares outstanding 6,247,760 6,244,088 Dilutive stock options - - Denominator for diluted earnings per share 6,247,760 6,244,088

Inventories

Inventories	3 Months Ended
	Apr. 02, 2016
Inventories [Abstract]
Inventories	Note C – Inventories The components of inventories follow: April 2, 2016 January 2, 2016 Raw material and component parts $ 10,598,427 $ 10,913,827 Work in process 7,422,467 7,681,576 Finished goods 17,664,044 18,247,010 $ 35,684,938 $ 36,842,413

Segment Information

Segment Information	3 Months Ended
	Apr. 02, 2016
Segment Information [Abstract]
Segment Information	Note D – Segment Information Segment financial information follows: Three Months Ended April 2, 2016 April 4, 2015 Revenues: Sales to unaffiliated customers: Industrial Hardware $ 14,591,513 $ 14,786,666 Security Products 14,197,217 14,100,916 Metal Products 4,312,927 7,989,260 $ 33,101,657 $ 36,876,842 Income before income taxes: Industrial Hardware $ 697,196 $ 731,545 Security Products 1,128,196 786,291 Metal Products (864,528 ) (146,353 ) Operating Profit 960,864 1,371,483 Interest expense (36,285 ) (52,825 ) Other income 21,374 7,007 Income before income taxes $ 945,953 $ 1,325,665

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Apr. 02, 2016
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements	Note E – Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires lessees to present right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2019. Early adoption is permitted. The Company is still in the process of determining the effect that the adoption of ASU 2016-02 will have on the accompanying financial statements. The Company has implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company.

Debt

Debt	3 Months Ended
	Apr. 02, 2016
Debt [Abstract]
Debt	Note F – Debt On January 29, 2010, the Company signed a secured Loan Agreement (the “Loan Agreement”) with People’s United Bank (“People’s”) which included a $5,000,000 term portion (the “Original Term Loan”) and a $10,000,000 revolving credit portion. On January 25, 2012, the Company amended the loan agreement by taking an additional $5,000,000 term loan (the “2012 Term Loan”). Interest on the Original Term Loan portion of the Loan Agreement is fixed at 4.98%. Interest on the 2012 Term Loan is fixed at 3.90%. The interest rate on the revolving credit portion of the Loan Agreement varied based on the LIBOR rate or People’s Prime rate plus a margin spread of 2.25%, with a floor rate of 3.25% and a maturity date of January 31, 2014. On January 23, 2014, the Company signed an amendment to its secured Loan Agreement with People’s which extended the maturity date of the $10,000,000 revolver portion of the Loan Agreement to July 1, 2016 and changed the interest rate to LIBOR plus 2.25%, eliminating the floor previously in place. The Company did not utilize the revolving credit facility during Fiscal 2015 or during the first three months of 2016. The Company has loan covenants under the Loan Agreement which required the Company to maintain a fixed charge coverage ratio of at least 1.1 to 1, and minimum tangible net worth of $55 million. In addition, the Company has restrictions on, among other things, new capital leases, purchases or redemptions of its capital stock, mergers and divestitures, and new borrowing. The Company was in compliance with all covenants in 2015 and for the three month period ended April 2, 2016.

Goodwill

Goodwill	3 Months Ended
	Apr. 02, 2016
Goodwill [Abstract]
Goodwill	Note G – Goodwill The following is a roll-forward of goodwill from year-end 2015 to the end of the first quarter 2016: Industrial Hardware Segment Security Products Segment Metal Products Segment Total Beginning balance $ 1,731,751 $ 13,059,042 $ — $ 14,790,793 Foreign exchange 57,302 — — 57,302 Ending balance $ 1,789,053 $ 13,059,042 $ — $ 14,848,095

Intangibles

Intangibles	3 Months Ended
	Apr. 02, 2016
Intangibles [Abstract]
Intangibles	Note H – Intangibles The gross carrying amount and accumulated amortization of amortizable intangible assets: Industrial Hardware Segment Security Products Segment Metal Products Segment Total Weighted-Average Amortization Period (Years) 2016 Gross Amount Patents and developed technology $ 2,262,367 $ 1,030,701 $ -- $ 3,293,068 15.9 Customer relationships -- 449,706 -- 449,706 5.0 Non-compete agreements -- 407,000 -- 407,000 5.0 Intellectual property -- 307,370 -- 307,370 5.0 Total Gross Intangibles $ 2,262,367 $ 2,194,777 $ -- $ 4,457,144 12.6 2016 Accumulated Amortization Patents and developed technology $ 1,543,456 $ 590,070 $ -- $ 2,133,526 Customer relationships -- 112,426 -- 112,426 Non-compete agreements -- 101,750 -- 101,750 Intellectual property -- 76,843 -- 76,843 Accumulated Amortization $ 1,543,456 $ 881,089 $ -- $ 2,424,545 Net April 2, 2016 per Balance Sheet $ 718,911 $ 1,313,688 $ -- $ 2,032,599 2015 Gross Amount Patents and developed technology $ 2,206,852 $ 1,029,181 $ -- $ 3,236,033 15.9 Customer relationships -- 449,706 -- 449,706 5.0 Non-compete agreements -- 407,000 -- 407,000 5.0 Intellectual property -- 307,370 -- 307,370 5.0 Total Gross Intangibles $ 2,206,852 $ 2,193,257 $ -- $ 4,400,109 12.6 2015 Accumulated Amortization Patents and developed technology $ 1,478,692 $ 575,026 $ -- $ 2,053,718 Customer relationships -- 89,941 -- 89,941 Non-compete agreements -- 81,400 -- 81,400 Intellectual property -- 61,474 -- 61,474 Accumulated Amortization $ 1,478692 $ 807,841 $ -- $ 2,286,533 Net January 2, 2016 per Balance Sheet $ 728,160 $ 1,385,416 $ -- $ 2,113,576

Retirement Benefit Plans

Retirement Benefit Plans	3 Months Ended
	Apr. 02, 2016
Retirement Benefit Plans [Abstract]
Retirement Benefit Plans	Note I – Retirement Benefit Plans The Company has non-contributory defined benefit pension plans covering certain U.S. employees. Plan benefits are generally based upon age at retirement, years of service and, for its salaried plan, the level of compensation. The Company also sponsors unfunded nonqualified supplemental retirement plans that provide certain current and former officers with benefits in excess of limits imposed by federal tax law. The Company also provides health care and life insurance for retired salaried employees in the United States who meet specific eligibility requirements. Significant disclosures relating to these benefit plans for the first quarter of fiscal 2016 and 2015 follow: Pension Benefits Postretirement Benefits Three Months Ended Three Months Ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Service cost $ 813,005 $ 964,987 $ 10,750 $ 54,393 Interest cost 766,580 859,259 20,500 38,729 Expected return on plan assets (1,243,941 ) (1,287,914 ) (11,750 ) (22,984 ) Amortization of prior service cost 50,143 54,647 (6,000 ) (5,972 ) Amortization of the net loss 627,055 472,728 (13,500 ) 4,701 Net periodic benefit cost $ 1,012,842 $ 1,063,707 $ -- $ 68,867 The Company’s funding policy with respect to its qualified plans is to contribute at least the minimum amount required by applicable laws and regulations. In 2016, the Company expects to contribute $3.1 million into its pension plans and $118,000 into its postretirement plan. As of April 2, 2016, the Company has not made contributions into its pension plans and has contributed $46,000 to its postretirement plan and will make the remaining contributions as required during the remainder of the year. On April 5, 2016 the Board of Directors passed a resolution freezing the benefits of The Salaried Employees Retirement Plan of The Eastern Company effective as of May 31, 2016. The Board also approved several enhancements to The Eastern Company Savings and Investment Plan effective June 1, 2016. The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code covering substantially all U.S. non-union employees. The plan allows participants to make voluntary contributions of up to 100% of their annual compensation on a pretax basis, subject to IRS limitations. The plan provides for contributions by the Company at its discretion. The Company made contributions of $56,231 and $52,266 in the first quarter of 2016 and 2015, respectively.

Stock Based Compensation and St

Stock Based Compensation and Stock Options	3 Months Ended
	Apr. 02, 2016
Stock Based Compensation and Stock Options [Abstract]
Stock Based Compensation and Stock Options	Note J – Stock Based Compensation and Stock Options As of April 2, 2016, the Company had one stock option plan, the 2010 plan, for officers, other key employees, and non-employee directors. Incentive stock options granted under the 2010 plan must have exercise prices that are not less than 100% of the fair market value of the stock on the dates the options are granted. Restricted stock awards may also be granted to participants under the 2010 plan with restrictions determined by the Compensation Committee of the Company’s Board of Directors. Under the 2010 plan, non-qualified stock options granted to participants will have exercise prices determined by the Compensation Committee of the Company’s Board of Directors. No options or restricted stock were granted in the first quarter of 2016 or 2015. As of April 2, 2016, there were 500,000 shares of common stock reserved and available for future grant under the above noted 2010 plan.

Income Taxes

Income Taxes	3 Months Ended
	Apr. 02, 2016
Income Tax [Abstract]
Income Taxes	Note K – Income Taxes The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2012 and non-U.S. income tax examinations by tax authorities prior to 2009. The total amount of unrecognized tax benefits could increase or decrease within the next twelve months for a number of reasons, including the closure of federal, state and foreign tax years by expiration of the statute of limitations and the recognition and measurement considerations under FASB Accounting Standards Codification (“ASC”) 740. There have been no significant changes to the amount of unrecognized tax benefits during the three months ended April 2, 2016. The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months.

Financial Instruments and Fair

Financial Instruments and Fair Value Measurements	3 Months Ended
	Apr. 02, 2016
Financial Instruments and Fair Value Measurements [Abstract]
Financial Instruments and Fair Value Measurements	Note L - Financial Instruments and Fair Value Measurements Financial Risk Management Objectives and Policies The Company is exposed primarily to credit, interest rate and currency exchange rate risks which arise in the normal course of business. Credit Risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Company, as and when they become due. The primary credit risk for the Company is its receivable accounts with customers. The Company has established credit limits for customers and monitors their balances to mitigate the risk of loss. At April 2, 2016 and January 2, 2016, there were no significant concentrations of credit risk. No one customer represented more than 10% of the Company’s net trade receivables at April 2, 2016 or at January 2, 2016. The maximum exposure to credit risk is primarily represented by the carrying amount of the Company’s accounts receivable. Interest Rate Risk On April 2, 2016, the Company has no exposure to the risk of changes in market interest rates as the interest rate on the outstanding debt is fixed at 4.98% and 3.90%. Fair Value Measurements Assets and liabilities that require fair value measurement are recorded at fair value using market and income valuation approaches and considering the Company’s and counterparty’s credit risk. The Company uses the market approach and the income approach to value assets and liabilities as appropriate. There are no assets or liabilities requiring fair value measurements on April 2, 2016 or January 2, 2016.

Subsequent Event

Subsequent Event	3 Months Ended
	Apr. 02, 2016
Subsequent Event [Abstract]
Subsequent Event	Note M – Subsequent Event On April 5, 2016 the Board of Directors passed a resolution freezing the benefits of The Salaried Employees Retirement Plan of The Eastern Company as of May 31, 2016. The Board also approved several enhancements to The Eastern Company Savings and Investment Plan effective June 1, 2016.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Apr. 02, 2016
Earnings Per Share [Abstract]
Denominators used in the earnings per share computations	The denominators used in the earnings per share computations follow: Three Months Ended April 2, 2016 April 4, 2015 Basic: Weighted average shares outstanding 6,247,760 6,244,088 Diluted: Weighted average shares outstanding 6,247,760 6,244,088 Dilutive stock options - - Denominator for diluted earnings per share 6,247,760 6,244,088

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Apr. 02, 2016
Inventories [Abstract]
Components of inventories	The components of inventories follow: April 2, 2016 January 2, 2016 Raw material and component parts $ 10,598,427 $ 10,913,827 Work in process 7,422,467 7,681,576 Finished goods 17,664,044 18,247,010 $ 35,684,938 $ 36,842,413

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Apr. 02, 2016
Segment Information [Abstract]
Segment financial information	Segment financial information follows: Three Months Ended April 2, 2016 April 4, 2015 Revenues: Sales to unaffiliated customers: Industrial Hardware $ 14,591,513 $ 14,786,666 Security Products 14,197,217 14,100,916 Metal Products 4,312,927 7,989,260 $ 33,101,657 $ 36,876,842 Income before income taxes: Industrial Hardware $ 697,196 $ 731,545 Security Products 1,128,196 786,291 Metal Products (864,528 ) (146,353 ) Operating Profit 960,864 1,371,483 Interest expense (36,285 ) (52,825 ) Other income 21,374 7,007 Income before income taxes $ 945,953 $ 1,325,665

Goodwill (Tables)

Goodwill (Tables)	3 Months Ended
	Apr. 02, 2016
Goodwill [Abstract]
Roll-forward of goodwill	The following is a roll-forward of goodwill from year-end 2015 to the end of the first quarter 2016: Industrial Hardware Segment Security Products Segment Metal Products Segment Total Beginning balance $ 1,731,751 $ 13,059,042 $ — $ 14,790,793 Foreign exchange 57,302 — — 57,302 Ending balance $ 1,789,053 $ 13,059,042 $ — $ 14,848,095

Intangibles (Tables)

Intangibles (Tables)	3 Months Ended
	Apr. 02, 2016
Intangibles [Abstract]
Gross carrying amount and accumulated amortization of amortizable intangible assets	The gross carrying amount and accumulated amortization of amortizable intangible assets: Industrial Hardware Segment Security Products Segment Metal Products Segment Total Weighted-Average Amortization Period (Years) 2016 Gross Amount Patents and developed technology $ 2,262,367 $ 1,030,701 $ -- $ 3,293,068 15.9 Customer relationships -- 449,706 -- 449,706 5.0 Non-compete agreements -- 407,000 -- 407,000 5.0 Intellectual property -- 307,370 -- 307,370 5.0 Total Gross Intangibles $ 2,262,367 $ 2,194,777 $ -- $ 4,457,144 12.6 2016 Accumulated Amortization Patents and developed technology $ 1,543,456 $ 590,070 $ -- $ 2,133,526 Customer relationships -- 112,426 -- 112,426 Non-compete agreements -- 101,750 -- 101,750 Intellectual property -- 76,843 -- 76,843 Accumulated Amortization $ 1,543,456 $ 881,089 $ -- $ 2,424,545 Net April 2, 2016 per Balance Sheet $ 718,911 $ 1,313,688 $ -- $ 2,032,599 2015 Gross Amount Patents and developed technology $ 2,206,852 $ 1,029,181 $ -- $ 3,236,033 15.9 Customer relationships -- 449,706 -- 449,706 5.0 Non-compete agreements -- 407,000 -- 407,000 5.0 Intellectual property -- 307,370 -- 307,370 5.0 Total Gross Intangibles $ 2,206,852 $ 2,193,257 $ -- $ 4,400,109 12.6 2015 Accumulated Amortization Patents and developed technology $ 1,478,692 $ 575,026 $ -- $ 2,053,718 Customer relationships -- 89,941 -- 89,941 Non-compete agreements -- 81,400 -- 81,400 Intellectual property -- 61,474 -- 61,474 Accumulated Amortization $ 1,478692 $ 807,841 $ -- $ 2,286,533 Net January 2, 2016 per Balance Sheet $ 728,160 $ 1,385,416 $ -- $ 2,113,576

Retirement Benefit Plans (Table

Retirement Benefit Plans (Tables)	3 Months Ended
	Apr. 02, 2016
Retirement Benefit Plans [Abstract]
Significant disclosures relating to benefit plans	Significant disclosures relating to these benefit plans for the first quarter of fiscal 2016 and 2015 follow: Pension Benefits Postretirement Benefits Three Months Ended Three Months Ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Service cost $ 813,005 $ 964,987 $ 10,750 $ 54,393 Interest cost 766,580 859,259 20,500 38,729 Expected return on plan assets (1,243,941 ) (1,287,914 ) (11,750 ) (22,984 ) Amortization of prior service cost 50,143 54,647 (6,000 ) (5,972 ) Amortization of the net loss 627,055 472,728 (13,500 ) 4,701 Net periodic benefit cost $ 1,012,842 $ 1,063,707 $ -- $ 68,867

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Basic [Abstract]
Weighted average shares outstanding (in shares)	6,247,760	6,244,088
Diluted [Abstract]
Weighted average shares outstanding (in shares)	6,247,760	6,244,088
Dilutive stock options (in shares)	0	0
Denominator for diluted earnings per share (in shares)	6,247,760	6,244,088

Inventories (Details)

Inventories (Details) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Components of inventories [Abstract]
Raw material and component parts	$ 10,598,427	$ 10,913,827
Work in process	7,422,467	7,681,576
Finished goods	17,664,044	18,247,010
Inventories	$ 35,684,938	$ 36,842,413

Segment Information (Details)

Segment Information (Details) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Segment Reporting Information [Line Items]
Revenues, sales to unaffiliated customers	$ 33,101,657	$ 36,876,842
Operating Profit	960,864	1,371,483
Interest expense	(36,285)	(52,825)
Other income	21,374	7,007
Income before income taxes	945,953	1,325,665
Industrial Hardware [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues, sales to unaffiliated customers	14,591,513	14,786,666
Operating Profit	697,196	731,545
Security Products [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues, sales to unaffiliated customers	14,197,217	14,100,916
Operating Profit	1,128,196	786,291
Metal Products [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues, sales to unaffiliated customers	4,312,927	7,989,260
Operating Profit	$ (864,528)	$ (146,353)

Debt (Details)

Debt (Details) - USD ($)	3 Months Ended
	Apr. 02, 2016	Jan. 25, 2012	Jan. 29, 2010
Debt Instrument [Line Items]
Minimum tangible net worth	$ 55,000,000
Revolving Credit Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 10,000,000		$ 10,000,000
Maturity date of loan	Jul. 1, 2016
Revolving Credit Loan [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
Revolving Credit Loan [Member] | People's Prime Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
Revolving Credit Loan [Member] | Floor Rate [Member]
Debt Instrument [Line Items]
Floor rate of loan	3.25%
Loan Agreement [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio as multiple, minimum	1.1
Term Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 5,000,000
Fixed rate of interest	4.98%		4.98%
2012 Term Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 5,000,000	$ 5,000,000
Fixed rate of interest	3.90%	3.90%

Goodwill (Details)

Goodwill (Details)	3 Months Ended
	Apr. 02, 2016USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 14,790,793
Foreign exchange	57,302
Ending balance	14,848,095
Industrial Hardware Segment [Member]
Goodwill [Roll Forward]
Beginning balance	1,731,751
Foreign exchange	57,302
Ending balance	1,789,053
Security Products Segment [Member]
Goodwill [Roll Forward]
Beginning balance	13,059,042
Foreign exchange	0
Ending balance	13,059,042
Metal Products Segment [Member]
Goodwill [Roll Forward]
Beginning balance	0
Foreign exchange	0
Ending balance	$ 0

Intangibles (Details)

Intangibles (Details) - USD ($)	3 Months Ended	12 Months Ended
	Apr. 02, 2016	Jan. 03, 2015	Jan. 02, 2016
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	$ 4,457,144		$ 4,400,109
Accumulated Amortization	2,424,545		2,286,533
Net as per Balance Sheet	$ 2,032,599		2,113,576
Weighted Average Amortization Period	12 years 7 months 6 days	12 years 7 months 6 days
Industrial Hardware Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	$ 2,262,367		2,206,852
Accumulated Amortization	1,543,456		1,478,692
Net as per Balance Sheet	718,911		728,160
Security Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	2,194,777		2,193,257
Accumulated Amortization	881,089		807,841
Net as per Balance Sheet	1,313,688		1,385,416
Metal Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	0		0
Accumulated Amortization	0		0
Net as per Balance Sheet	0		0
Patents and Developed Technology [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	3,293,068		3,236,033
Accumulated Amortization	$ 2,133,526		2,053,718
Weighted Average Amortization Period	15 years 10 months 24 days	15 years 10 months 24 days
Patents and Developed Technology [Member] | Industrial Hardware Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	$ 2,262,367		2,206,852
Accumulated Amortization	1,543,456		1,478,692
Patents and Developed Technology [Member] | Security Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	1,030,701		1,029,181
Accumulated Amortization	590,070		575,026
Patents and Developed Technology [Member] | Metal Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	0		0
Accumulated Amortization	0		0
Customer Relationships [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	449,706		449,706
Accumulated Amortization	$ 112,426		89,941
Weighted Average Amortization Period	5 years	5 years
Customer Relationships [Member] | Industrial Hardware Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	$ 0		0
Accumulated Amortization	0		0
Customer Relationships [Member] | Security Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	449,706		449,706
Accumulated Amortization	112,426		89,941
Customer Relationships [Member] | Metal Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	0		0
Accumulated Amortization	0		0
Non-compete Agreements [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	407,000		407,000
Accumulated Amortization	$ 101,750		81,400
Weighted Average Amortization Period	5 years	5 years
Non-compete Agreements [Member] | Industrial Hardware Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	$ 0		0
Accumulated Amortization	0		0
Non-compete Agreements [Member] | Security Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	407,000		407,000
Accumulated Amortization	101,750		81,400
Non-compete Agreements [Member] | Metal Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	0		0
Accumulated Amortization	0		0
Intellectual Property [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	307,370		307,370
Accumulated Amortization	$ 76,843		61,474
Weighted Average Amortization Period	5 years	5 years
Intellectual Property [Member] | Industrial Hardware Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	$ 0		0
Accumulated Amortization	0		0
Intellectual Property [Member] | Security Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	307,370		307,370
Accumulated Amortization	76,843		61,474
Intellectual Property [Member] | Metal Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross Amount	0		0
Accumulated Amortization	$ 0		$ 0

Retirement Benefit Plans (Detai

Retirement Benefit Plans (Details) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Significant disclosures relating to benefit plans [Abstract]
Percentage of voluntary contributions allowed to participants, maximum	100.00%
Employer contributions made	$ 56,231	$ 52,266
Pension Benefits [Member]
Significant disclosures relating to benefit plans [Abstract]
Service cost	813,005	964,987
Interest cost	766,580	859,259
Expected return on plan assets	(1,243,941)	(1,287,914)
Amortization of prior service cost	50,143	54,647
Amortization of the net loss	627,055	472,728
Net periodic benefit cost	1,012,842	1,063,707
Contributions required by the Company in defined benefit plan	3,100,000
Contributions made by Company	0
Postretirement Benefits [Member]
Significant disclosures relating to benefit plans [Abstract]
Service cost	10,750	54,393
Interest cost	20,500	38,729
Expected return on plan assets	(11,750)	(22,984)
Amortization of prior service cost	(6,000)	(5,972)
Amortization of the net loss	(13,500)	4,701
Net periodic benefit cost	0	$ 68,867
Contributions required by the Company in defined benefit plan	118,000
Contributions made by Company	$ 46,000

Stock Based Compensation and 34

Stock Based Compensation and Stock Options (Details)	3 Months Ended
	Apr. 02, 2016Planshares	Apr. 04, 2015shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of plans that have shares reserved for further issuance | Plan	1
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted (in shares)	0	0
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of fair market value of stock on grant date for exercise price, minimum	100.00%
Options granted (in shares)	0	0
2010 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)	500,000

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended
	Apr. 02, 2016USD ($)
Income Tax Examination [Line Items]
Significant changes to the amount of unrecognized tax benefits	$ 0

Financial Instruments and Fai36

Financial Instruments and Fair Value Measurements (Details)	Apr. 02, 2016CustomerLiabilitiesAssets	Jan. 02, 2016CustomerLiabilitiesAssets	Jan. 25, 2012	Jan. 29, 2010
Liabilities [Member]
Fair Value Measurements [Abstract]
Number of assets and liabilities requiring fair value measurements | Liabilities	0	0
Term Loan [Member]
Interest Rate Risk [Abstract]
Fixed rate of interest	4.98%			4.98%
2012 Term Loan [Member]
Interest Rate Risk [Abstract]
Fixed rate of interest	3.90%		3.90%
Credit Concentration Risk [Member]
Credit Risk [Abstract]
Number of customers that represented more than 10% of trade receivables | Customer	0	0
Assets [Member]
Fair Value Measurements [Abstract]
Number of assets and liabilities requiring fair value measurements | Assets	0	0