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 |