The Eastern Company (EML) 10-Q 6 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 18, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	EASTERN CO
Entity Central Index Key	31,107
Current Fiscal Year End Date	--12-30
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		6,261,415
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 21,194,091	$ 22,725,376
Marketable securities	366,554	0
Accounts receivable, less allowances: $507,000 - 2017; $430,000 - 2016	28,448,534	18,135,792
Inventories	45,207,813	34,030,286
Prepaid expenses and other assets	4,398,041	1,858,471
Total Current Assets	99,615,033	76,749,925
Property, Plant and Equipment	70,500,848	64,911,071
Accumulated depreciation	(41,629,685)	(38,745,557)
Property, Plant and Equipment, Net	28,871,163	26,165,514
Goodwill	32,395,740	14,819,835
Trademarks	3,680,037	166,312
Patents, technology, and other intangibles net of accumulated amortization	9,621,147	1,764,449
Deferred income taxes	1,180,355	4,532,361
Total other assets	46,877,279	21,282,957
TOTAL ASSETS	175,363,475	124,198,396
Current Liabilities
Accounts payable	15,327,476	7,048,174
Accrued compensation	3,273,317	3,112,404
Other accrued expenses	6,360,362	1,812,647
Current portion of long-term debt	6,550,000	892,857
Total Current Liabilities	31,511,155	12,866,082
Other long-term liabilities	288,805	288,805
Long-term debt, less current portion	29,062,500	892,857
Accrued postretirement benefits	1,018,815	1,051,700
Accrued pension cost	25,780,522	26,631,438
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: 8,956,144 shares in 2017 and 8,950,827 shares in 2016 Outstanding: 6,261,415 shares in 2017 and 6,256,098 shares in 2016	29,277,169	29,146,622
Treasury Stock: 2,694,729 shares in 2017 and 2016	(19,105,723)	(19,105,723)
Retained earnings	98,779,632	95,631,216
Accumulated other comprehensive income (loss):
Foreign currency translation	(902,749)	(2,165,081)
Unrealized loss on marketable securities and derivative, net of tax	(9,479)	0
Unrecognized net pension and postretirement benefit costs, net of tax	(20,419,472)	(21,039,520)
Accumulated other comprehensive loss	(21,331,700)	(23,204,601)
Total Shareholders' Equity	87,619,378	82,467,514
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 175,363,475	$ 124,198,396

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Accounts receivable, allowances	$ 507,000	$ 430,000
Shareholders' Equity
Voting Preferred Stock, par value (in dollars per share)	$ 0	$ 0
Voting Preferred Stock, shares authorized (in shares)	1,000,000	1,000,000
Nonvoting Preferred Stock, par value (in dollars per share)	$ 0	$ 0
Nonvoting Preferred Stock, shares authorized (in shares)	1,000,000	1,000,000
Common Stock, 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)	8,956,144	8,950,827
Common Stock, shares outstanding (in shares)	6,261,415	6,256,098
Treasury Stock, shares (in shares)	2,694,729	2,694,729

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Oct. 01, 2016	Sep. 30, 2017	Oct. 01, 2016
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract]
Net sales	$ 56,007,937	$ 33,478,347	$ 150,095,975	$ 103,463,316
Cost of products sold	(44,058,406)	(24,105,604)	(113,888,301)	(77,980,077)
Gross margin	11,949,531	9,372,743	36,207,674	25,483,239
Engineering expenses	(1,848,861)	(663,705)	(4,162,151)	(1,991,260)
Selling and administrative expenses	(6,527,029)	(5,444,924)	(23,749,219)	(16,161,133)
Operating profit	3,573,641	3,264,114	8,296,304	7,330,846
Interest expense	(327,206)	(28,817)	(659,884)	(97,486)
Other income	13,513	28,169	69,278	54,687
Income before income taxes	3,259,948	3,263,466	7,705,698	7,288,047
Income taxes	1,029,467	863,402	2,491,674	2,152,073
Net income	$ 2,230,481	$ 2,400,064	$ 5,214,024	$ 5,135,974
Earnings per Share:
Basic (in dollars per share)	$ 0.36	$ 0.38	$ 0.83	$ 0.82
Diluted (in dollars per share)	0.35	0.38	0.83	0.82
Cash dividends per share: (in dollars per share)	$ 0.11	$ 0.11	$ 0.33	$ 0.33

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Oct. 01, 2016	Sep. 30, 2017	Oct. 01, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract]
Net income	$ 2,230,481	$ 2,400,064	$ 5,214,024	$ 5,135,974
Other comprehensive income/(loss):
Change in foreign currency translation	378,509	(231,831)	1,262,332	(311,697)
Change in fair value marketable securities, net of tax benefit of: 2017 - $22,688 and $17,135, respectively $ 2016 -	31,379	0	41,548	0
Change in fair value of derivative financial instrument, net of tax benefit of: 2017 - $31,275 and $(10,406) 2016 - $ -	16,978	0	(51,027)	0
Change in pension and postretirement benefit costs, net of taxes of: 2017 - $338,592 and $112,865 respectively 2016 - $559,542 and $(105,703), respectively	206,682	192,456	620,048	(696,200)
Total other comprehensive income	633,548	(39,375)	1,872,901	(1,007,897)
Comprehensive income	$ 2,864,029	$ 2,630,689	$ 7,086,925	$ 4,128,077

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Oct. 01, 2016	Sep. 30, 2017	Oct. 01, 2016
Other comprehensive income/(loss):
Change in fair value marketable securities, income taxes expense (benefit)	$ 0	$ 0	$ 22,688	$ 17,135
Change in fair value of derivative instrument, income tax (expense) benefit	0	0	31,275	(10,406)
Change in pension and postretirement benefit costs, income taxes (expense)/benefit	$ 559,542	$ (105,703)	$ 338,592	$ 112,865

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2017	Oct. 01, 2016
Operating Activities
Net income	$ 5,214,024	$ 5,135,974
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,230,174	2,795,699
Unrecognized pension and postretirement benefits	74,839	952,205
Loss on sale of equipment and other assets	18,585	45,313
Provision for doubtful accounts	52,663	0
Issuance of Common Stock for directors' fees	130,547	112,086
Changes in operating assets and liabilities:
Accounts receivable	(3,894,569)	(1,626,625)
Inventories	2,267,945	2,665,002
Prepaid expenses and other	(2,686,763)	78,914
Other assets	494,750	(67,324)
Accounts payable	1,466,401	(366,454)
Accrued compensation	(172,509)	(215,313)
Other accrued expenses	3,978,256	(526,930)
Net cash provided by operating activities	10,174,343	8,982,547
Investing Activities
Marketable securities	(366,554)	0
Business Acquisition, net of cash acquired	(42,148,000)	0
Purchases of property, plant and equipment	(1,457,641)	(1,819,894)
Net cash used in investing activities	(43,972,195)	(1,819,894)
Financing Activities
Proceeds from issuance of long-term debt	31,000,000	0
Proceeds from short term borrowings	6,614,611	0
Payments on revolving credit note	(1,614,611)	0
Principal payments on long-term debt	(2,173,214)	(1,071,428)
Dividends paid	(2,065,607)	(2,063,085)
Net cash provided by (used in) financing activities	31,761,179	(3,134,513)
Effect of exchange rate changes on cash	505,388	(203,066)
Net change in cash and cash equivalents	(1,531,285)	3,825,074
Cash and cash equivalents at beginning of period	22,725,376	17,814,986
Cash and cash equivalents at end of period	$ 21,194,091	$ 21,640,060

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2017
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 consolidated financial statements of The Eastern Company (the "Company") and the notes thereto included in the Company's Form 10-K for the fiscal year ended December 31, 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. On April 3, 2017, the Company completed its acquisition of Velvac Holdings, Inc., a Delaware corporation including its subsidiaries ("Velvac"), pursuant to a Securities Purchase Agreement (the "Securities Purchase Agreement"), dated April 3, 2017, by and among Jeffery R. Porter, W. Greg Bland, John Backovitch, Dave Otto, Bob Otto, Timothy Rintelman, Robert Brester, Dan McGrew, Mark Moeller and Prospect Partners II, L.P. (collectively, the "Sellers"). Pursuant to the Securities Purchase Agreement, the Company acquired 100% of the issued and outstanding stock of Velvac from the Sellers (the "Acquisition") for $39.5 million and earnout consideration contingent upon Velvac achieving minimum earnings performance levels with the amount of any such earnout consideration based on a specific percentage (either 7.5% or 15%) of sales of Velvac's new proprietary Road-iQ product line measured over annual calculation periods through April 2022, as set forth in the Securities Purchase Agreement (the "Earnout Consideration"), subject to certain customary post-closing adjustments. The Acquisition was financed with a $31 million term loan from People's United Bank, National Association ("People's"), a $5 million draw down on the Company's $10 million revolving credit facility with People's and $3.5 million in cash. Please refer to the Form 8-K filed on April 7, 2017 and the amendment thereto files on June 19, 2017 for further details. The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet as of that date. Commencing with this Quarterly Report on Form 10-Q, engineering expenses have been separately identified for all periods presented. These expenses have been reclassified from cost of products sold to selling and administrative expenses. Engineering expense is not necessarily a cost of product sold. Rather, these expenses are related to product development.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2017
Earnings Per Share [Abstract]
Earnings Per Share	Note B – Earnings Per Share The denominators used in the earnings per share computations are as follows: Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Basic: Weighted average shares outstanding 6,258,278 6,250,185 6,259,872 6,254,287 Diluted: Weighted average shares outstanding 6,258,278 6,250,185 6,259,872 6,254,287 Dilutive stock options 36,679 -- 36,679 -- Denominator for diluted earnings per share 6,294,957 6,250,185 6,296,551 6,254,287

Inventories, Net

Inventories, Net	9 Months Ended
	Sep. 30, 2017
Inventories, Net [Abstract]
Inventories, Net	Note C – Inventories, Net The components of inventories are as follows: September 30, 2017 December 31, 2016 Raw material and component parts $ 11,729,271 $ 8,829,236 Work in process 9,456,164 7,118,149 Finished goods 24,022,378 18,082,901 $ 45,207,813 $ 34,030,286

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2017
Segment Information [Abstract]
Segment Information	Note D – Segment Information Segment financial information is as follows: Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Revenues: Sales to unaffiliated customers: Industrial Hardware $ 83,500,656 $ 45,689,104 $ 32,959,599 $ 15,210,943 Security Products 46,232,410 43,722,828 16,115,356 13,648,701 Metal Products 20,362,909 14,051,384 6,932,982 4,618,703 $ 150,095,975 $ 103,463,316 $ 56,007,937 $ 33,478,347 Income before income taxes: Industrial Hardware $ 2,877,052 $ 3,769,045 $ 1,813,133 $ 1,574,573 Security Products 4,290,745 4,533,995 1,604,950 1,613,148 Metal Products 1,128,507 (972,194 ) 155,558 76,393 Operating Profit 8,296,304 7,330,846 3,573,641 3,264,114 Interest expense (659,884 ) (97,486 ) (327,206 ) (28,817 ) Other income 69,278 54,687 13,513 28,169 $ 7,705,698 $ 7,288,047 $ 3,259,948 $ 3,263,466

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2017
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements	Note E – Recent Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-01, Business Combinations – Clarifying the Definition of a Business. ASU 2017-01 provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or dispositions of assets or businesses. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of the new guidance. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment. ASU 2017-04 provides guidance to simplify the subsequent measure of goodwill by eliminating Step 2 from the goodwill impairment test. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period after January 1, 2017. The Company is evaluating the impact of the new guidance. In February 2017, the FASB issued ASU No. 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting. ASU 2017-06 provides guidance for reporting by an employee benefit plan for its interest in a master trust. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment should be applied retrospectively with earlier application permitted as of the beginning of an interim or annual reporting period after December 15, 2018. The Company is evaluating the impact of the new guidance. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 provides guidance to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment should be applied retrospectively with earlier application permitted as of the beginning of an interim or annual reporting period after December 15, 2017. The Company is evaluating the impact of the new guidance. In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840) and Leases (Topic 842). ASU 2017-13 provides guidance regarding amendments to the aforementioned topics following SEC Staff announcement. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the impact of the new guidance. 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	9 Months Ended
	Sep. 30, 2017
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, National Association ("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 was fixed at 4.98%. Interest on the 2012 Term Loan was 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 the Loan Agreement which extended the maturity date of the $10,000,000 revolving credit 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. On June 9, 2016, the Company signed a third amendment to its secured Loan Agreement which extended the maturity date of the $10,000,000 revolver portion of the Loan Agreement to July 1, 2018. On April 3, 2017, the Company signed an amended and restated loan agreement (the "Restated Loan Agreement") with People's that included a $31 million term portion and a $10 million revolving credit portion. Proceeds of the Restated Loan Agreement were used to repay the remaining outstanding term loans of the Company (approximately $1,429,000) and to acquire 100% of the common stock of Velvac Holdings, Inc. (see Note M). The term portion of the Restated Loan Agreement requires quarterly principal payments of $387,500 for a two-year period beginning July 3, 2017. The repayment amount then increases to $775,000 per quarter beginning July 1, 2019. The term portion of the Restated Loan Agreement is a five-year loan with any remaining outstanding balance due on March 1, 2022. The revolving credit portion of the Restated Loan Agreement has a quarterly commitment fee ranging from 0.2% to 0.375% based on operating results. Under the terms of the Restated Loan Agreement, this quarterly commitment fee will be 0.25% for the first six months. The revolving credit portion of the Restated Loan Agreement has a maturity date of April 1, 2022. On April 3, 2017, the Company borrowed approximately $6.6 million on the revolving credit portion of the Restated Loan Agreement. The Company subsequently paid off $1.6 million on the revolving credit portion leaving a balance on such revolving credit portion of $5 million. The interest rates on the term portion and the revolving credit portion of the Restated Loan Agreement vary. The interest rates may vary based on the LIBOR rate plus a margin spread of 1.75% to 2.50%. The margin spread is based on operating results calculated on a rolling-four-quarter basis. The Company may also borrow funds at People's Prime rate. On September 30, 2017, the interest rate for one half ($15.3 million) of the term portion was 3.24%, using a 1 month LIBOR rate and 3.30% on the remaining balance ($15.3 million) of the term portion based on a 3 month LIBOR rate. The interest rate on the $5 million of the revolving credit portion was 3.24%. The Company's loan covenants under the Restated Loan Agreement require the Company to maintain a consolidated minimum debt service coverage ratio of at least 1.1 to 1 for periods through December 31, 2018 and 1.2 to 1 thereafter, which is to be tested quarterly on a twelve-month trailing basis. In addition, the Company will be required to show a maximum total leverage ratio of 4.0x for periods through December 31, 2018, 3.5x for the periods from January 1, 2019 through December 31, 2019, 3.25x for the periods from January 1, 2020 through December 31, 2020 and 3.0x thereafter. The Company was in compliance with all covenants for the three and nine month periods ended September 30, 2017. On April 4, 2017, the Company entered into an interest rate swap contract with People's with an original notional amount of $15,500,000, which is equal to 50% of the outstanding balance of the term portion of the Restated Loan Agreement on that date. The notional amount will decrease on a quarterly basis beginning July 3, 2017, following the principal repayment schedule of the term portion of the Restated Loan Agreement. The Company has a fixed interest rate of 1.92% on the swap contract and will pay the difference between the fixed rate and the LIBOR rate when the LIBOR rate is below 1.92% and will receive interest when the LIBOR rate exceeds 1.92%.

Goodwill

Goodwill	9 Months Ended
	Sep. 30, 2017
Goodwill [Abstract]
Goodwill	Note G – Goodwill The following is a roll-forward of goodwill from year-end 2016 to the end of the third quarter of 2017: Industrial Security Metal Beginning balance $ 1,760,793 $ 13,059,042 $ — $ 14,819,835 Investment - Velvac 17,502,024 — — 17,502,024 Foreign exchange 73,881 — — 73,881 Ending balance $ 19,336,698 $ 13,059,042 $ — $ 32,395,740

Intangibles

Intangibles	9 Months Ended
	Sep. 30, 2017
Intangibles [Abstract]
Intangibles	Note H – Intangibles The gross carrying amount and accumulated amortization of amortizable intangible assets are as follows: Industrial Hardware Segment Security Products Segment Metal Products Segment Total Weighted-Average Amortization Period (Years) 2017 Gross Amount Patents and developed technology $ 7,111,906 $ 1,069,594 $ -- $ 8,181,500 12.2 Customer relationships 3,650,000 449,706 -- 4,099,706 9.5 Non-compete agreements -- 407,000 -- 407,000 5.0 Intellectual property -- 307,370 -- 307,370 5.0 Total Gross Intangibles $ 10,761,906 $ 2,233,670 $ -- $ 12,995,576 10.8 2017 Accumulated Amortization Patents and developed technology $ 1,888,433 $ 663,254 $ -- $ 2,551,687 Customer relationships 182,500 247,338 -- 429,838 Non-compete agreements -- 223,850 -- 223,850 Intellectual property -- 169,054 -- 169,054 Accumulated Amortization $ 2,070,933 $ 1,303,496 $ -- $ 3,374,429 Net September 30, 2017 per Balance Sheet $ 8,690,973 $ 930,174 $ -- $ 9,621,147 2016 Gross Amount Patents and developed technology $ 2,159,060 $ 1,035,374 $ -- $ 3,194,434 15.6 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 $ 2,159,060 $ 2,199,450 $ -- $ 4,358,510 12.3 2016 Accumulated Amortization Patents and developed technology $ 1,529,675 $ 598,756 $ -- $ 2,128,431 Customer relationships -- 179,882 -- 179,882 Non-compete agreements -- 162,800 -- 162,800 Intellectual property -- 122,948 -- 122,948 Accumulated Amortization $ 1,529,675 $ 1,064,386 $ -- $ 2,594,061 Net December 31, 2016 per Balance Sheet $ 629,385 $ 1,135,064 $ -- $ 1,764,449

Retirement Benefit Plans

Retirement Benefit Plans	9 Months Ended
	Sep. 30, 2017
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. Effective for fiscal year 2017, the Company changed the method used to measure Service Cost and Interest Cost for pension and other postretirement benefits for the Company's plans. Previously, the Company measured interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligations. For fiscal year 2017, interest costs will be measured by applying the specific spot rates along the yield curve to the plans' corresponding discounted cash flows that comprise the obligation (i.e., the Spot Rate approach). This new method provides a more precise measurement of interest costs by aligning the timing of the plans' discounted cash flows to the corresponding spot rates on the yield curve. The measurement of the Company's pension and other postretirement benefit obligations is not affected. The Company has accounted for this change as a change in accounting estimate, which is applied prospectively. Consequently, combined pension expense for the Company's pension plans and other postretirement plan under the Spot Rate approach for the nine-month period ended September 30, 2017 is approximately $406,000 lower when compared to the prior approach that the Company used. Significant disclosures relating to these benefit plans for the third quarter and first nine months of fiscal years 2017 and 2016 are as follows: Pension Benefits Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Service cost $ 952,078 $ 1,612,278 $ 317,360 $ 270,721 Interest cost 2,373,167 2,541,968 791,055 767,625 Expected return on plan assets (3,587,682 ) (3,603,483 ) (1,195,895 ) (1,121,311 ) Amortization of prior service cost 109,312 150,427 36,438 50,143 Amortization of the net loss 923,614 1,319617 307,871 277,469 Net periodic benefit cost $ 770,489 $ 2,020,807 $ 256,829 $ 244,647 Postretirement Benefits Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Service cost $ 20,542 $ 21,975 $ 6,847 $ 7,325 Interest cost 60,620 71,154 20,206 23,718 Expected return on plan assets (38,621 ) (35,649 ) (12,874 ) (11,883 ) Amortization of prior service cost (16,083 ) (17,918 ) (5,361 ) (5,973 ) Amortization of the net loss (58,201 ) (70,441 ) (19,400 ) (23,480 ) Net periodic benefit cost $ (31,743 ) $ (30,879 ) $ (10,582 ) $ (10,293 ) 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 2017, the Company expects to contribute $700,000 into its pension plans and $140 ,00 , The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended covering substantially all non-union employees. The plan allows participants to make voluntary contributions on a pretax basis of their annual compensation, subject to IRS limitations. At its discretion, the Company provides for matching contributions to the plan. The plan also provides for a transitional credit to certain eligible employees who were active participants of the Company's Salaried Retirement Plan at the time that benefits under such plan were frozen in fiscal year 2016, as well as a non-discretionary contribution to all eligible employees. The Company made contributions to the plan as follows: Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Regular matching contribution $ 346,713 $ 226,090 $ 111,291 $ 94,042 Transitional credit contribution 307,597 136,416 76,526 94,868 Non-discretionary contribution 339,220 51,470 15,987 -- Total contributions for the period $ 993,530 $ 413,976 $ 203,804 $ 188,910 The non-discretionary contributions made in each of the periods disclosed above were expensed in the prior fiscal year.

Stock Based Compensation

Stock Based Compensation	9 Months Ended
	Sep. 30, 2017
Stock Based Compensation [Abstract]
Stock Based Compensation	Note J – Stock Based Compensation The Company accounts for its stock based awards in accordance with Accounting Standards Codification subtopic 718-10, Compensation ("ASC 718-10"), which requires a fair value measurement and recognition of compensation expense for all share-based payment awards made to its employees and directors, including employee stock options and restricted stock awards. The Company estimates the fair value of granted stock options using the Black-Scholes valuation model. This model requires the Company to make estimates and assumptions including, without limitation, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of the Company's common stock price and the number of options that will be forfeited prior to vesting. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Changes in these estimates and assumptions can materially affect the determination of the fair value of stock-based compensation and consequently, the related amount recognized in the Company's consolidated statements of operations. As of September 30, 2017, the Company had one stock option plan, The Eastern Company 2010 Executive Stock Incentive 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 Company's common stock on the dates the stock 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. In the third quarter of 2017, no stock options were granted and in the third quarter of 2016, no stock options or restricted stock were granted that were subject to the meeting of performance measurements. The 2010 Plan also permits the issuance of Stock Appreciation Rights ("SARs"). The SARs are in the form of an option with a cashless exercise price equal to the difference between the fair value of the Company's common stock at the date of grant and the fair value as of the exercise date resulting in the issuance of Company's common stock. During the third quarter of 2017, the Company did not issue any SARs. Stock-based compensation expense in connection with SARs granted to employees in the nine months of fiscal year 2017 was approximately $117,222. As of September 30, 2017, there were 325,500 shares of common stock reserved and available for future grant under the above noted 2010 Plan. The following tables set forth the outstanding stock options and SARs for the period specified: Three Months Ended September 30, 2017 Year Ended December 31, 2016 Shares Weighted - Average Exercise Price Shares Weighted - Average Exercise Price Outstanding at beginning of period 174,500 $ 20.39 -- $ -- Issued -- -- -- Outstanding at end of period 174,500 20.39 -- -- SARs and Options Outstanding and Exercisable Range of Exercise Prices Outstanding as of September 30, 2017 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of September 30, 2017 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $19.10-21.10 174,500 4.4 $20.39 -- -- -- As of September 30, 2017, outstanding SARs and options had an intrinsic value of $1,968,950.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2017
Income Taxes [Abstract]
Income Taxes	Note K – Income Taxes The Company files federal income tax returns as well as tax returns in 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 2013 and foreign income tax examinations by tax authorities prior to 2011. 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 as a result of the expiration of applicable statutes of limitation 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 nine months ended September 30, 2017. 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	9 Months Ended
	Sep. 30, 2017
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 ordinary 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 accounts receivable due from customers. The Company has established credit limits for customers and monitors their balances to mitigate the risk of loss. As September 30, 2017 and December 31, 2016, there were no significant concentrations of credit risk. No single customer represented more than 10% of the Company's net accounts receivable as of September 30, 2017 or at December 31, 2016. The maximum exposure to credit risk is primarily represented by the carrying amount of the Company's accounts receivable. Interest Rate Risk The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's debt, which bears interest at variable rates based on the LIBOR rate plus a margin spread of 1.75% to 2.50%. The Company has an interest rate swap with a notional amount of $15,306,250 on September 30, 2017 to convert a portion of its 2017 Term Loan from variable to fixed rates. The valuation of this swap is determined using the three month LIBOR rate index and mitigates the Company's exposure to interest rate risk. 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. The assets or liabilities requiring fair value measurements on September 30, 2017 are as follows: Fair Value Level 1 Level 2 Level 3 Financial Liabilities Interest rate swap $ 82,302 $ -- $ 82,302 $ -- Total liabilities $ 82,302 $ -- $ 82,302 $ -- The Company's interest rate swap is not an exchange-traded instrument. However, it is valued based on observable inputs for similar liabilities and accordingly is classified as Level 2. The amount of the interest rate swap is included in other accrued liabilities.

Business Combination

Business Combination	9 Months Ended
	Sep. 30, 2017
Business Combination [Abstract]
Business Combination	Note M – Business Combination On April 3, 2017, the Company completed the Acquisition of Velvac for $39.5 million and earnout consideration contingent upon Velvac achieving minimum earning performance levels with the amount of any such earnout consideration based on a specified percentage (7.5% or 15%)of sales of Velvac's new proprietary Road-iQ product line (the "Earnout Consideration") measured over annual calculation periods through April 2022, set forth in the Securities Purchase Agreement, subject to certain customary post-closing adjustments. Velvac is a premier designer and manufacturer of proprietary vision technology for original equipment manufacturers serving the heavy-duty and medium-duty truck, motorhome, and bus markets. The goodwill of $17,502,000 arising from the acquisition consist of the difference between the consideration paid and the fair value of the assets and liabilities acquired. None of the goodwill recognized is expected to be deductible for income tax purposes. The following table summarizes the consideration paid for Velvac and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date. At April 3, 2017: Consideration Cash $ 4,078,000 Debt 36,000,000 Contingent consideration arrangement 2,070,000 $ 42,148,000 Recognized amounts of identifiable assets acquired and liabilities assumed Accounts receivable $ 6,063,429 Inventory 12,992,377 Prepaid and other assets 494,617 Property plant and equipment 3,911,767 Other noncurrent assets 366,401 Other intangible assets 11,560,000 Current liabilities (7,720,591 ) Deferred tax liabilities (3,022,000 ) Total identifiable net assets 24,646,000 Goodwill 17,502,000 $ 42,148,000 The Company determined the acquisition date fair value of the contingent consideration obligation using the Income Approach method which is a valuation technique that provides an estimate of the fair value of an asset based on the market participant expectations of the cash flows that an asset would generate over a period of time. The contingent consideration obligation was based on weighted projected cash flows discounted back to present value equivalents at a risk adjusted discount rate. The Velvac earnout is contingent upon the ability of Velvac to reach certain EBITDA targets over the course of the next five years. At each annual period, the Company will revalue the contingent consideration obligation to estimated fair value and record changes in fair value as income or expense in the Company's consolidated statement of operations. Accounts Receivable Acquired receivables are amounts due from customers. Inventories The estimated fair value of inventories acquired included a purchase price adjustment of $11,804,709 above the seller's original cost basis of $1,187,668. The entire amount was charged to cost of sales in the second quarter of 2017. Intangible Assets The estimated fair value of identifiable intangible assets is determined primarily using the Income Approach method which is a valuation technique that provides an estimate of the fair value of an asset based on the market participant's expectations of the cash flows that an asset would generate over its remaining useful life. Some of the more significant assumption inherent in the development of the identifiable intangible assets valuation, from the perspective of a market participant, include the estimate net cash flows for each year for each project or product, the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset's life cycle, competitive trends impacting the asset and each cash flow stream as well as other factors. Goodwill Allocation Among the primary reasons why the Company entered into the Velvac acquisition and the factors that contributed to a purchase price resulting in the recognition of goodwill were Velvac's history of operating margins and profitability, Velvac's strong research and development center, including its Road-iQTM 360-degree view camera, recording and communication system and TrailerLinkTM, a new patent-pending solution that supports trailer-to-trailer video and data communications, the expansion of the Company's commercial footprint on a nationwide basis as a result of the Velvac acquisition, and key pipeline additions of Velvac products which will enable the Company to expand its product offerings and offer its customers a greater breadth of products. Acquisition Related Expenses Included in general and administrative expenses in the consolidated statements of operations for the three and nine month periods ended September 30, 2017 were $102,000 and $863,000, respectively, for acquisition expenses.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2017
Earnings Per Share [Abstract]
Denominators used in the earnings per share computations	The denominators used in the earnings per share computations are as follows: Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Basic: Weighted average shares outstanding 6,258,278 6,250,185 6,259,872 6,254,287 Diluted: Weighted average shares outstanding 6,258,278 6,250,185 6,259,872 6,254,287 Dilutive stock options 36,679 -- 36,679 -- Denominator for diluted earnings per share 6,294,957 6,250,185 6,296,551 6,254,287

Inventories, Net (Tables)

Inventories, Net (Tables)	9 Months Ended
	Sep. 30, 2017
Inventories, Net [Abstract]
Components of inventories	The components of inventories are as follows: September 30, 2017 December 31, 2016 Raw material and component parts $ 11,729,271 $ 8,829,236 Work in process 9,456,164 7,118,149 Finished goods 24,022,378 18,082,901 $ 45,207,813 $ 34,030,286

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2017
Segment Information [Abstract]
Segment financial information	Segment financial information is as follows: Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Revenues: Sales to unaffiliated customers: Industrial Hardware $ 83,500,656 $ 45,689,104 $ 32,959,599 $ 15,210,943 Security Products 46,232,410 43,722,828 16,115,356 13,648,701 Metal Products 20,362,909 14,051,384 6,932,982 4,618,703 $ 150,095,975 $ 103,463,316 $ 56,007,937 $ 33,478,347 Income before income taxes: Industrial Hardware $ 2,877,052 $ 3,769,045 $ 1,813,133 $ 1,574,573 Security Products 4,290,745 4,533,995 1,604,950 1,613,148 Metal Products 1,128,507 (972,194 ) 155,558 76,393 Operating Profit 8,296,304 7,330,846 3,573,641 3,264,114 Interest expense (659,884 ) (97,486 ) (327,206 ) (28,817 ) Other income 69,278 54,687 13,513 28,169 $ 7,705,698 $ 7,288,047 $ 3,259,948 $ 3,263,466

Goodwill (Tables)

Goodwill (Tables)	9 Months Ended
	Sep. 30, 2017
Goodwill [Abstract]
Roll-forward of goodwill	The following is a roll-forward of goodwill from year-end 2016 to the end of the third quarter of 2017: Industrial Security Metal Beginning balance $ 1,760,793 $ 13,059,042 $ — $ 14,819,835 Investment - Velvac 17,502,024 — — 17,502,024 Foreign exchange 73,881 — — 73,881 Ending balance $ 19,336,698 $ 13,059,042 $ — $ 32,395,740

Intangibles (Tables)

Intangibles (Tables)	9 Months Ended
	Sep. 30, 2017
Intangibles [Abstract]
Gross carrying amount and accumulated amortization of amortizable intangible assets	The gross carrying amount and accumulated amortization of amortizable intangible assets are as follows: Industrial Hardware Segment Security Products Segment Metal Products Segment Total Weighted-Average Amortization Period (Years) 2017 Gross Amount Patents and developed technology $ 7,111,906 $ 1,069,594 $ -- $ 8,181,500 12.2 Customer relationships 3,650,000 449,706 -- 4,099,706 9.5 Non-compete agreements -- 407,000 -- 407,000 5.0 Intellectual property -- 307,370 -- 307,370 5.0 Total Gross Intangibles $ 10,761,906 $ 2,233,670 $ -- $ 12,995,576 10.8 2017 Accumulated Amortization Patents and developed technology $ 1,888,433 $ 663,254 $ -- $ 2,551,687 Customer relationships 182,500 247,338 -- 429,838 Non-compete agreements -- 223,850 -- 223,850 Intellectual property -- 169,054 -- 169,054 Accumulated Amortization $ 2,070,933 $ 1,303,496 $ -- $ 3,374,429 Net September 30, 2017 per Balance Sheet $ 8,690,973 $ 930,174 $ -- $ 9,621,147 2016 Gross Amount Patents and developed technology $ 2,159,060 $ 1,035,374 $ -- $ 3,194,434 15.6 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 $ 2,159,060 $ 2,199,450 $ -- $ 4,358,510 12.3 2016 Accumulated Amortization Patents and developed technology $ 1,529,675 $ 598,756 $ -- $ 2,128,431 Customer relationships -- 179,882 -- 179,882 Non-compete agreements -- 162,800 -- 162,800 Intellectual property -- 122,948 -- 122,948 Accumulated Amortization $ 1,529,675 $ 1,064,386 $ -- $ 2,594,061 Net December 31, 2016 per Balance Sheet $ 629,385 $ 1,135,064 $ -- $ 1,764,449

Retirement Benefit Plans (Table

Retirement Benefit Plans (Tables)	9 Months Ended
	Sep. 30, 2017
Retirement Benefit Plans [Abstract]
Significant disclosures relating to benefit plans	Significant disclosures relating to these benefit plans for the third quarter and first nine months of fiscal years 2017 and 2016 are as follows: Pension Benefits Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Service cost $ 952,078 $ 1,612,278 $ 317,360 $ 270,721 Interest cost 2,373,167 2,541,968 791,055 767,625 Expected return on plan assets (3,587,682 ) (3,603,483 ) (1,195,895 ) (1,121,311 ) Amortization of prior service cost 109,312 150,427 36,438 50,143 Amortization of the net loss 923,614 1,319617 307,871 277,469 Net periodic benefit cost $ 770,489 $ 2,020,807 $ 256,829 $ 244,647 Postretirement Benefits Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Service cost $ 20,542 $ 21,975 $ 6,847 $ 7,325 Interest cost 60,620 71,154 20,206 23,718 Expected return on plan assets (38,621 ) (35,649 ) (12,874 ) (11,883 ) Amortization of prior service cost (16,083 ) (17,918 ) (5,361 ) (5,973 ) Amortization of the net loss (58,201 ) (70,441 ) (19,400 ) (23,480 ) Net periodic benefit cost $ (31,743 ) $ (30,879 ) $ (10,582 ) $ (10,293 )
Defined Contribution Plan	The Company made contributions to the plan as follows: Nine Months Ended Three Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Regular matching contribution $ 346,713 $ 226,090 $ 111,291 $ 94,042 Transitional credit contribution 307,597 136,416 76,526 94,868 Non-discretionary contribution 339,220 51,470 15,987 -- Total contributions for the period $ 993,530 $ 413,976 $ 203,804 $ 188,910

Stock Based Compensation (Table

Stock Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2017
Stock Based Compensation [Abstract]
Stock appreciation rights activity	The following tables set forth the outstanding stock options and SARs for the period specified: Three Months Ended September 30, 2017 Year Ended December 31, 2016 Shares Weighted - Average Exercise Price Shares Weighted - Average Exercise Price Outstanding at beginning of period 174,500 $ 20.39 -- $ -- Issued -- -- -- Outstanding at end of period 174,500 20.39 -- --
Schedule of stock appreciation rights and options outstanding and exercisable	SARs and Options Outstanding and Exercisable Range of Exercise Prices Outstanding as of September 30, 2017 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of September 30, 2017 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $19.10-21.10 174,500 4.4 $20.39 -- -- --

Financial Instruments and Fai28

Financial Instruments and Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2017
Financial Instruments and Fair Value Measurements [Abstract]
Assets or liabilities measured at fair value measurements	The assets or liabilities requiring fair value measurements on September 30, 2017 are as follows: Fair Value Level 1 Level 2 Level 3 Financial Liabilities Interest rate swap $ 82,302 $ -- $ 82,302 $ -- Total liabilities $ 82,302 $ -- $ 82,302 $ --

Business Combination (Tables)

Business Combination (Tables)	9 Months Ended
	Sep. 30, 2017
Business Combination [Abstract]
Recognized identified assets acquired and liabilities assumed	The following table summarizes the consideration paid for Velvac and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date. At April 3, 2017: Consideration Cash $ 4,078,000 Debt 36,000,000 Contingent consideration arrangement 2,070,000 $ 42,148,000 Recognized amounts of identifiable assets acquired and liabilities assumed Accounts receivable $ 6,063,429 Inventory 12,992,377 Prepaid and other assets 494,617 Property plant and equipment 3,911,767 Other noncurrent assets 366,401 Other intangible assets 11,560,000 Current liabilities (7,720,591 ) Deferred tax liabilities (3,022,000 ) Total identifiable net assets 24,646,000 Goodwill 17,502,000 $ 42,148,000

Basis of Presentation (Details)

Basis of Presentation (Details) - Velvac Holdings, Inc [Member]	Apr. 03, 2017USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of common stock acquired	100.00%
Purchase price of acquisition	$ 39,500,000
Earnout consideration percentage of sales, condition one	7.50%
Earnout consideration percentage of sales, condition two	15.00%
Liabilities incurred to finance acquisition	$ 36,000,000
Payment to acquire business	4,078,000
Term Loan [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Liabilities incurred to finance acquisition	31,000,000
Revolving Credit Loan [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Liabilities incurred to finance acquisition	10,000,000
Proceeds from credit facility	5,000,000
Payment to acquire business	$ 3,500,000

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Oct. 01, 2016	Sep. 30, 2017	Oct. 01, 2016
Basic [Abstract]
Weighted average shares outstanding (in shares)	6,259,872	6,254,287	6,258,278	6,250,185
Diluted [Abstract]
Weighted average shares outstanding (in shares)	6,259,872	6,254,287	6,258,278	6,250,185
Dilutive stock options (in shares)	36,679	0	36,679	0
Denominator for diluted earnings per share (in shares)	6,296,551	6,254,287	6,294,957	6,250,185

Inventories, Net (Details)

Inventories, Net (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Components of inventories [Abstract]
Raw material and component parts	$ 11,729,271	$ 8,829,236
Work in process	9,456,164	7,118,149
Finished goods	24,022,378	18,082,901
Inventories, net	$ 45,207,813	$ 34,030,286

Segment Information (Details)

Segment Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Oct. 01, 2016	Sep. 30, 2017	Oct. 01, 2016
Segment Reporting Information [Line Items]
Revenues, sales to unaffiliated customers	$ 56,007,937	$ 33,478,347	$ 150,095,975	$ 103,463,316
Operating Profit	3,573,641	3,264,114	8,296,304	7,330,846
Interest expense	(327,206)	(28,817)	(659,884)	(97,486)
Other income	13,513	28,169	69,278	54,687
Income before income taxes	3,259,948	3,263,466	7,705,698	7,288,047
Operating Segments [Member] | Industrial Hardware [Member]
Segment Reporting Information [Line Items]
Revenues, sales to unaffiliated customers	32,959,599	15,210,943	83,500,656	45,689,104
Operating Profit	1,813,133	1,574,573	2,877,052	3,769,045
Operating Segments [Member] | Security Products [Member]
Segment Reporting Information [Line Items]
Revenues, sales to unaffiliated customers	16,115,356	13,648,701	46,232,410	43,722,828
Operating Profit	1,604,950	1,613,148	4,290,745	4,533,995
Operating Segments [Member] | Metal Products [Member]
Segment Reporting Information [Line Items]
Revenues, sales to unaffiliated customers	6,932,982	4,618,703	20,362,909	14,051,384
Operating Profit	$ 155,558	$ 76,393	$ 1,128,507	$ (972,194)

Debt (Details)

Debt (Details) - USD ($)	Apr. 04, 2017	Jun. 09, 2016	Jan. 23, 2014	Jan. 25, 2012	Jan. 29, 2010	Sep. 30, 2019	Sep. 30, 2017	Oct. 01, 2016	Jun. 30, 2019	Apr. 03, 2017
Debt Instrument [Line Items]
Payments on revolving credit note							$ (1,614,611)	$ 0
Original notional amount							$ 15,306,250
Velvac Holdings, Inc [Member]
Debt Instrument [Line Items]
Percentage of common stock acquired										100.00%
LIBOR [Member]
Debt Instrument [Line Items]
Term of variable rate							3 months
LIBOR [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate							1.75%
LIBOR [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate							2.50%
Restated Loan Agreement [Member] | Minimum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio as multiple, 2018							1.1
Fixed charge coverage ratio as multiple, thereafter							1.2
Restated Loan Agreement [Member] | Maximum [Member]
Debt Instrument [Line Items]
Leverage ratio as multiple, through 2018							4
Leverage ratio as multiple, through 2019							3.5
Leverage ratio as multiple, through 2020							3.25
Leverage ratio as multiple, there after							3
Term Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 5,000,000	$ 5,000,000		$ 31,000,000
Fixed rate of interest				3.90%	4.98%
Maturity date of loan				Jan. 31, 2014			Mar. 1, 2022
Borrowing under credit facility										$ 1,429,000
Period for quarterly principal payment							2 years
Term of loan							5 years
Term Loan [Member] | Forecast [Member]
Debt Instrument [Line Items]
Quarterly principal payment						$ 775,000			$ 387,500
Term Loan [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Fixed rate of interest	1.92%
Original notional amount	$ 15,500,000
Percentage of outstanding balance of term loan	50.00%
Term Loan [Member] | 1 Month LIBOR [Member]
Debt Instrument [Line Items]
Fixed rate of interest							3.24%
Borrowing under credit facility							$ 15,300,000
Term of variable rate							1 month
Term Loan [Member] | 3 Month LIBOR [Member]
Debt Instrument [Line Items]
Fixed rate of interest							3.30%
Borrowing under credit facility							$ 15,300,000
Term of variable rate							3 months
Revolving Credit Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 10,000,000	$ 10,000,000		$ 10,000,000		$ 10,000,000
Fixed rate of interest							3.24%
Maturity date of loan		Jul. 1, 2018	Jul. 1, 2016				Apr. 1, 2022
Borrowing under credit facility							$ 5,000,000			6,600,000
Payments on revolving credit note							$ (1,614,611)
Quarterly commitment fee percentage							0.25%
Commitment fee percentage for first six months							0.25%
Revolving Credit Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Quarterly commitment fee percentage							0.20%
Revolving Credit Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Quarterly commitment fee percentage							0.375%
Revolving Credit Loan [Member] | Velvac Holdings, Inc [Member]
Debt Instrument [Line Items]
Borrowing under credit facility										$ 1,429,000
Revolving Credit Loan [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate			2.25%		2.25%
Floor rate of loan					3.25%
Revolving Credit Loan [Member] | LIBOR [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate							1.75%
Revolving Credit Loan [Member] | LIBOR [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate							2.50%
Revolving Credit Loan [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate					2.25%
Floor rate of loan					3.25%
Revolving Credit Loan [Member] | Floor Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate					2.25%
Floor rate of loan					3.25%

Goodwill (Details)

Goodwill (Details)	9 Months Ended
	Sep. 30, 2017USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 14,819,835
Investment - Velvac	17,502,024
Foreign exchange	73,881
Ending balance	32,395,740
Industrial Hardware Segment [Member]
Goodwill [Roll Forward]
Beginning balance	1,760,793
Investment - Velvac	17,502,024
Foreign exchange	73,881
Ending balance	19,336,698
Security Products Segment [Member]
Goodwill [Roll Forward]
Beginning balance	13,059,042
Investment - Velvac	0
Foreign exchange	0
Ending balance	13,059,042
Metal Products Segment [Member]
Goodwill [Roll Forward]
Beginning balance	0
Investment - Velvac	0
Foreign exchange	0
Ending balance	$ 0

Intangibles (Details)

Intangibles (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross amount	$ 12,995,576	$ 4,358,510
Accumulated amortization	3,374,429	2,594,061
Net as per balance sheet	$ 9,621,147	$ 1,764,449
Weighted average amortization period	10 years 9 months 18 days	12 years 3 months 18 days
Industrial Hardware Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross amount	$ 10,761,906	$ 2,159,060
Accumulated amortization	2,070,933	1,529,675
Net as per balance sheet	8,690,973	629,385
Security Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross amount	2,233,670	2,199,450
Accumulated amortization	1,303,496	1,064,386
Net as per balance sheet	930,174	1,135,064
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	8,181,500	3,194,434
Accumulated amortization	$ 2,551,687	$ 2,128,431
Weighted average amortization period	12 years 2 months 12 days	15 years 7 months 6 days
Patents and Developed Technology [Member] | Industrial Hardware Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross amount	$ 7,111,906	$ 2,159,060
Accumulated amortization	1,888,433	1,529,675
Patents and Developed Technology [Member] | Security Products Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross amount	1,069,594	1,035,374
Accumulated amortization	663,254	598,756
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	4,099,706	449,706
Accumulated amortization	$ 429,838	$ 179,882
Weighted average amortization period	9 years 6 months	5 years
Customer Relationships [Member] | Industrial Hardware Segment [Member]
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract]
Gross amount	$ 3,650,000	$ 0
Accumulated amortization	182,500	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	247,338	179,882
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	$ 223,850	$ 162,800
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	223,850	162,800
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	$ 169,054	$ 122,948
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	169,054	122,948
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		9 Months Ended
	Sep. 30, 2017	Oct. 01, 2016	Sep. 30, 2017	Oct. 01, 2016
Pension Benefits [Member]
Components of the net periodic benefit cost [Abstract]
Service cost	$ 317,360	$ 270,721	$ 952,078	$ 1,612,278
Interest cost	791,055	767,625	2,373,167	2,541,968
Expected return on plan assets	(1,195,895)	(1,121,311)	(3,587,682)	(3,603,483)
Amortization of prior service cost	36,438	50,143	109,312	150,427
Amortization of the net loss	307,871	277,469	923,614	1,319,617
Net periodic benefit cost	256,829	244,647	770,489	2,020,807
Additional information [Abstract]
Contributions required by the Company in defined benefit plan	700,000		700,000
Employer contributions made			322,000
Postretirement Benefits [Member]
Components of the net periodic benefit cost [Abstract]
Service cost	6,847	7,325	20,542	21,975
Interest cost	20,206	23,718	60,620	71,154
Expected return on plan assets	(12,874)	(11,883)	(38,621)	(35,649)
Amortization of prior service cost	(5,361)	(5,973)	(16,083)	(17,918)
Amortization of the net loss	(19,400)	(23,480)	(58,201)	(70,441)
Net periodic benefit cost	(10,582)	$ (10,293)	(31,743)	$ (30,879)
Additional information [Abstract]
Contributions required by the Company in defined benefit plan	$ 140,000		140,000
Employer contributions made			109,000
Change in Accounting Method Accounted for as Change in Estimate [Member]
Change in Accounting Estimate [Line Items]
Reduction in pension expense			$ (406,000)

Retirement Benefit Plans, Defin

Retirement Benefit Plans, Defined Contribution Plan (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Oct. 01, 2016	Sep. 30, 2017	Oct. 01, 2016
Defined Contribution Plan Disclosure [Line Items]
Total contributions made for the period	$ 203,804	$ 188,910	$ 993,530	$ 413,976
Regular Matching Contribution [Member]
Defined Contribution Plan Disclosure [Line Items]
Total contributions made for the period	111,291	94,042	346,713	226,090
Transitional Credit Contribution [Member]
Defined Contribution Plan Disclosure [Line Items]
Total contributions made for the period	76,526	94,868	307,597	136,416
Non-discretionary Contribution [Member]
Defined Contribution Plan Disclosure [Line Items]
Total contributions made for the period	$ 15,987	$ 0	$ 339,220	$ 51,470

Stock Based Compensation (Detai

Stock Based Compensation (Details)	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2017USD ($)Plan$ / sharesshares	Oct. 01, 2016shares	Sep. 30, 2017USD ($)Plan$ / sharesshares	Dec. 31, 2016$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of plans that have shares reserved for further issuance | Plan	1		1
Minimum [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			100.00%
Stock Options [Member]
Number of Shares [Roll Forward]
Issued (in shares)	0	0
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense | $			$ 117,222
Number of Shares [Roll Forward]
Issued (in shares)	0
Stock Options and SARs [Member]
Number of Shares [Roll Forward]
Outstanding at beginning of period (in shares)	174,500		0	0
Issued (in shares)	0			0
Outstanding at end of period (in shares)	174,500		174,500	0
Weighted - Average Exercise Price [Roll Forward]
Outstanding at beginning of period (in dollars per share) | $ / shares	$ 20.39		$ 0	$ 0
Issued (in dollars per share) | $ / shares				0
Outstanding at end of period (in dollars per share) | $ / shares	$ 20.39		20.39	$ 0
SARs and Options Outstanding and Exercisable [Abstract]
Minimum Range of Exercise Prices (in dollars per share) | $ / shares			19.10
Maximum Range of Exercise Prices (in dollars per share) | $ / shares			$ 21.10
Options outstanding (in shares)	174,500		174,500
Options, Weighted- Average Remaining Contractual Life			4 years 4 months 24 days
Options, Weighted- Average Exercise Price (in dollars per share) | $ / shares	$ 20.39		$ 20.39
Exercisable as of September 30, 2017 (in shares)	0		0
Exercisable, Weighted- Average Remaining Contractual life			0 years
Exercisable, Weighted- Average Exercise Price (in dollars per share) | $ / shares	$ 0		$ 0
Outstanding options, intrinsic value | $	$ 1,968,950		$ 1,968,950
2010 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)	325,500		325,500

Income Taxes (Details)

Income Taxes (Details)	9 Months Ended
	Sep. 30, 2017USD ($)
Income Taxes [Abstract]
Significant changes to the amount of unrecognized tax benefits	$ 0

Financial Instruments and Fai41

Financial Instruments and Fair Value Measurements (Details)	9 Months Ended
	Sep. 30, 2017USD ($)Customer	Dec. 31, 2016Customer
Interest Rate Risk [Abstract]
Interest rate swap, notional amount	$ 15,306,250
Financial Liabilities [Abstract]
Interest rate swap	82,302
Total liabilities	$ 82,302
LIBOR [Member]
Interest Rate Risk [Abstract]
Term of variable rate	3 months
LIBOR [Member] | Minimum [Member]
Interest Rate Risk [Abstract]
Debt instrument, variable interest rate	1.75%
LIBOR [Member] | Maximum [Member]
Interest Rate Risk [Abstract]
Debt instrument, variable interest rate	2.50%
Level 1 [Member]
Financial Liabilities [Abstract]
Interest rate swap	$ 0
Total liabilities	0
Level 2 [Member]
Financial Liabilities [Abstract]
Interest rate swap	82,302
Total liabilities	82,302
Level 3 [Member]
Financial Liabilities [Abstract]
Interest rate swap	0
Total liabilities	$ 0
Credit Concentration Risk [Member]
Credit Risk [Abstract]
Number of customers that represented more than 10% of trade receivables | Customer	0	0

Business Combination (Details)

Business Combination (Details) - USD ($)	Apr. 03, 2017	Sep. 30, 2017	Sep. 30, 2017	Dec. 31, 2016
Recognized amounts of identifiable assets acquired and liabilities assumed [Abstract]
Goodwill		$ 32,395,740	$ 32,395,740	$ 14,819,835
Acquisition expenses		$ 102,000	$ 863,000
Velvac Holdings, Inc [Member]
Business Acquisition [Line Items]
Purchase price of acquisition	$ 39,500,000
Earnout consideration percentage of sales, condition one	7.50%
Earnout consideration percentage of sales, condition two	15.00%
Consideration [Abstract]
Cash	$ 4,078,000
Debt	36,000,000
Contingent consideration arrangement	2,070,000
Recognized amounts of identifiable assets acquired and liabilities assumed [Abstract]
Accounts receivable	6,063,429
Inventory	12,992,377
Prepaid and other assets	494,617
Property plant and equipment	3,911,767
Other noncurrent assets	366,401
Other intangible assets	11,560,000
Current liabilities	(7,720,591)
Deferred tax liabilities	(3,022,000)
Total identifiable net assets	24,646,000
Goodwill	17,502,000
Identifiable assets acquired, goodwill, and liabilities assumed, net	42,148,000
Earn out period			5 years
Estimated fair value of inventories acquired, purchase price adjustment	11,804,709
Estimated fair value of inventories acquired, original cost basis	$ 1,187,668