Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 29, 2018 | Feb. 15, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | EASTERN CO | ||
Entity Central Index Key | 0000031107 | ||
Current Fiscal Year End Date | --12-29 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 145,184,332 | ||
Entity Common Stock, Shares Outstanding | 6,231,409 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 29, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 29, 2018 | Dec. 30, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 13,925,765 | $ 22,275,477 |
Accounts receivable, less allowances of $680,000 in 2018 and $470,000 in 2017 | 30,285,316 | 27,119,910 |
Inventories: | ||
Raw materials and component parts | 17,841,166 | 14,331,915 |
Work in process | 8,960,202 | 7,718,379 |
Finished goods | 25,971,841 | 25,218,463 |
Total inventories | 52,773,209 | 47,268,757 |
Prepaid expenses and other current assets | 3,071,888 | 3,401,456 |
Refundable income taxes | 1,133,847 | 0 |
Total Current Assets | 101,190,025 | 100,065,600 |
Property, Plant and Equipment | ||
Land | 1,159,813 | 1,160,298 |
Buildings | 16,477,462 | 16,426,977 |
Machinery and equipment | 56,131,340 | 52,680,240 |
Accumulated depreciation | (43,915,238) | (41,075,121) |
Property, Plant and Equipment, Net | 29,853,377 | 29,192,394 |
Other Assets | ||
Goodwill | 34,840,376 | 32,228,891 |
Trademarks | 3,686,063 | 3,686,063 |
Patents and other intangibles net of accumulated amortization | 10,281,720 | 9,275,158 |
Deferred income taxes | 1,396,006 | 2,010,291 |
Total other assets | 50,204,165 | 47,200,403 |
TOTAL ASSETS | 181,247,567 | 176,458,397 |
Current Liabilities | ||
Accounts payable | 18,497,626 | 14,712,414 |
Accrued compensation | 4,159,808 | 4,376,211 |
Other accrued expenses | 3,095,666 | 3,606,057 |
Contingent Liability | 2,070,000 | 2,070,000 |
Current portion of long-term debt | 2,325,000 | 6,550,000 |
Total Current Liabilities | 30,148,100 | 31,314,682 |
Deferred income taxes | 1,516,012 | 1,723,543 |
Other long-term liabilities | 353,856 | 358,982 |
Long-term debt, less current portion | 26,350,000 | 28,675,000 |
Accrued other postretirement benefits | 648,635 | 1,032,171 |
Accrued pension cost | 25,362,325 | 26,423,429 |
Commitments and contingencies (See Note 6) | ||
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: 8,965,987 shares in 2018 and 8,957,974 shares in 2017 Outstanding: 6,231,258 shares in 2018 and 6,263,245 shares in 2017 | 29,994,890 | 29,501,123 |
Treasury Stock: 2,734,729 shares in 2018 and 2,694,729 shares in 2017 | (20,169,098) | (19,105,723) |
Retained earnings | 109,671,362 | 97,921,903 |
Accumulated other comprehensive income (loss): | ||
Foreign currency translation | (2,106,329) | (943,193) |
Unrealized gain on interest rate swap, net of tax | 166,444 | 41,757 |
Unrecognized net pension and other postretirement benefit costs, net of tax | (20,688,630) | (20,485,277) |
Accumulated other comprehensive loss | (22,628,515) | (21,386,713) |
Total Shareholders' Equity | 96,868,639 | 86,930,590 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 181,247,567 | $ 176,458,397 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 29, 2018 | Dec. 30, 2017 |
Current Assets | ||
Accounts receivable, allowances | $ 680,000 | $ 470,000 |
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) | 8,965,987 | 8,957,974 |
Common Stock, shares outstanding (in shares) | 6,231,258 | 6,263,245 |
Treasury Stock, shares (in shares) | 2,734,729 | 2,694,729 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Consolidated Statements of Income [Abstract] | ||
Net sales | $ 234,275,463 | $ 204,239,613 |
Cost of products sold | (175,550,418) | (154,382,737) |
Gross margin | 58,725,045 | 49,856,876 |
Product development expenses | (6,950,969) | (5,622,829) |
Selling and administrative expenses | (33,914,735) | (32,151,289) |
Operating profit | 17,859,341 | 12,082,758 |
Interest expense | (1,202,272) | (976,512) |
Other income | 933,260 | 348,696 |
Income before income taxes | 17,590,329 | 11,454,942 |
Income taxes | 3,084,392 | 6,409,687 |
Net income | $ 14,505,937 | $ 5,045,255 |
Earnings per Share: | ||
Basic (in dollars per share) | $ 2.32 | $ 0.81 |
Diluted (in dollars per share) | $ 2.31 | $ 0.80 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 14,505,937 | $ 5,045,255 |
Other comprehensive income/(loss) | ||
Change in foreign currency translation | (1,163,136) | 1,221,888 |
Change in fair value of interest rate swap, net of tax benefit of: $26,969 in 2018 and $7,310 in 2017 | 124,687 | 41,757 |
Change in pension and other postretirement benefit costs, net of income taxes (expense)/benefit of: $578,090 in 2018 and $62,632 in 2017 | (203,353) | 554,243 |
Total other comprehensive income/(loss) | (1,241,802) | 1,817,888 |
Comprehensive income/(loss) | $ 13,264,135 | $ 6,863,143 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Other comprehensive income/(loss) | ||
Change in fair value of interest rate swap, taxes benefit | $ 26,969 | $ 7,310 |
Change in pension and postretirement benefit costs, income taxes (expense)/ benefit | $ 578,090 | $ 62,632 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Common Stock [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balances at Dec. 31, 2016 | $ 29,146,622 | $ (19,105,723) | $ 95,631,216 | $ (23,204,601) | $ 82,467,514 |
Balances (in shares) at Dec. 31, 2016 | 8,950,827 | (2,694,729) | |||
Net income | 5,045,255 | 5,045,255 | |||
Cash dividends declared | (2,754,568) | (2,754,568) | |||
Currency translation adjustment | 1,221,888 | 1,221,888 | |||
Change in fair value of interest rate swap | 41,757 | 41,757 | |||
Change in pension and other postretirement benefit costs, net of tax | 554,243 | 554,243 | |||
Issuance of SARS | $ 172,806 | 172,806 | |||
Issuance of Common Stock for directors' fees | $ 181,695 | 181,695 | |||
Issuance of Common Stock for directors' fees (in shares) | 7,147 | ||||
Balances at Dec. 30, 2017 | $ 29,501,123 | $ (19,105,723) | 97,921,903 | (21,386,713) | 86,930,590 |
Balances (in shares) at Dec. 30, 2017 | 8,957,974 | (2,694,729) | |||
Net income | 14,505,937 | 14,505,937 | |||
Cash dividends declared | (2,756,478) | (2,756,478) | |||
Currency translation adjustment | (1,163,136) | (1,163,136) | |||
Change in fair value of interest rate swap | 124,687 | 124,687 | |||
Change in pension and other postretirement benefit costs, net of tax | (203,353) | (203,353) | |||
Treasury stock purchases | $ (1,063,375) | (1,063,375) | |||
Treasury stock purchases (in shares) | (40,000) | ||||
Issuance of SARS | $ 276,777 | 276,777 | |||
Issuance of SARS (in shares) | 151 | ||||
Issuance of Common Stock for directors' fees | $ 216,990 | 216,990 | |||
Issuance of Common Stock for directors' fees (in shares) | 7,862 | ||||
Balances at Dec. 29, 2018 | $ 29,994,890 | $ (20,169,098) | $ 109,671,362 | $ (22,628,515) | $ 96,868,639 |
Balances (in shares) at Dec. 29, 2018 | 8,965,987 | (2,734,729) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Consolidated Statements of Shareholders' Equity [Abstract] | ||
Cash dividends declared, per share (in dollars per share) | $ 0.44 | $ 0.44 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Operating Activities | ||
Net income | $ 14,505,937 | $ 5,045,255 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 5,329,208 | 4,719,185 |
Unrecognized pension & other postretirement benefits | (2,226,083) | 326,706 |
Loss on sale of equipment and other assets | (413,333) | (369,128) |
Provision for doubtful accounts | 185,136 | 55,284 |
Deferred taxes | 947,851 | 1,198,020 |
Stock compensation expense | 493,767 | 354,501 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,483,484) | (2,574,823) |
Inventories | (5,356,646) | 152,130 |
Prepaid expenses | (761,135) | (1,709,241) |
Other assets | 102,068 | 709,757 |
Accounts payable | 4,106,130 | 892,439 |
Accrued compensation | (165,828) | 911,572 |
Other accrued expenses | (387,526) | 1,468,525 |
Net cash provided by operating activities | 12,876,062 | 11,180,182 |
Investing Activities | ||
Purchases of property, plant and equipment | (3,596,572) | (2,762,949) |
Capitalized software | (1,813,973) | 0 |
Proceeds from sale of equipment and other assets | 0 | 44,100 |
Business acquisitions, net of cash acquired | (4,994,685) | (40,078,000) |
Net cash used in investing activities | (10,405,230) | (42,796,849) |
Financing Activities | ||
Proceeds from issuance of long-term debt | 0 | 31,000,000 |
Principal payments on long-term debt | (1,550,000) | (2,560,714) |
Proceeds from short-term borrowing (Revolver) | 7,000,000 | 6,614,611 |
Payments on revolving credit note | (12,000,000) | (1,614,611) |
Purchase Common Stock for Treasury | (1,063,375) | 0 |
Dividends paid | (2,756,478) | (2,754,568) |
Net cash used in financing activities | (10,369,853) | 30,684,718 |
Effect of exchange rate changes on cash | (450,691) | 482,049 |
Net change in cash and cash equivalents | (8,349,712) | (449,899) |
Cash and cash equivalents at beginning of year | 22,275,477 | 22,725,376 |
Cash and cash equivalents at end of year | $ 13,925,765 | $ 22,275,477 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 29, 2018 | |
DESCRIPTION OF BUSINESS [Abstract] | |
DESCRIPTION OF BUSINESS | 1. Description of Business The Eastern Company (the "Company") includes eight separate operating divisions located within the United States, two wholly-owned Canadian subsidiaries (one located in Tillsonburg, Ontario, Canada, and one in Kelowna, British Columbia, Canada), a wholly-owned Taiwanese subsidiary located in Taipei, Taiwan, a wholly-owned subsidiary in Hong Kong, two wholly-owned Chinese subsidiaries (one located in Shanghai, China, and one located in Dongguan, China) and two wholly-owned subsidiaries in Mexico (one located in Lerma, Mexico and one located in Reynosa, Mexico). The operations of the Company consist of three business segments: industrial hardware, security products, and metal products. The Industrial Hardware segment consists of Eberhard Manufacturing, Eberhard Hardware Manufacturing Ltd., Eastern Industrial Ltd, Velvac Holdings Inc., Canadian Commercial Vehicles Corporation, Composite Panel Technologies. and Sesamee Mexicana, S.A. de C.V. These businesses design, manufacture and market a diverse product line of custom and standard vehicular and industrial hardware, including passenger restraint and vehicular locks, latches, hinges, mirrors, mirror-cameras, light weight sleeper boxes and truck bodies. The segment's products can be found on tractor-trailer trucks, specialty commercial vehicles, recreational vehicles, fire and rescue vehicles, school buses, military vehicles and other vehicles. In addition, the segment designs and manufactures a wide selection of fasteners and other closure devices used to secure access doors on various types of industrial equipment such as metal cabinets, machinery housings and electronic instruments. The Security Products segment, Illinois Lock Company/CCL Security Products, World Lock Company Ltd., Dongguan Reeworld Security Products Ltd. and World Security Industries Ltd., Greenwald Industries, Argo EMS (formerly Argo Transdata). Illinois Lock Company/CCL Security Products design, manufactures and distributes custom engineered and many standard closing and locking systems, including vehicular accessory locks, cabinet locks, cam locks, electric switch locks, tubular key locks and combination padlocks. Greenwald manufactures and markets coin acceptors and other coin security products used primarily in the commercial laundry markets. Greenwald's products include timers, drop meters, coin chutes, money boxes, meter cases, smart cards, value transfer stations, smart card readers, card management software, assess control units. Argo EMS supplies printed circuit boards and other electronic assemblies. The Metal Products segment produces anchoring devices used in supporting the roofs of underground coal mines and specialty products which serve the construction, automotive, railroad and electrical industries. Sales are made to customers primarily in North America. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 29, 2018 | |
ACCOUNTING POLICIES [Abstract] | |
ACCOUNTING POLICIES | 2. A ccounting olicies Fiscal Year The Company's year ends on the Saturday nearest to December 31. Fiscal Years, 2018 and 2017, were 52 week each. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany accounts and transactions are eliminated. Reclassification Commencing with the first quarter of 2018, pension service costs have been broken out and reclassified from the gains and losses associated with the pension assets. Additionally, for 2017 $193,943 of gains associated with pensions assets have been reclassified from cost of goods sold to other income for comparability between the two periods. The reclassification of these expenses does not affect the net income reported. Commencing with the third quarter of 2017, product development expenses have been separately identified for all periods presented. These expenses have been reclassified from cost of products sold and selling and administrative expenses. Product development expense is not necessarily a cost of product sold. Rather, these expenses are related to product development. The reclassification of these expenses does not affect the net income reported. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. On an ongoing basis the Company evaluates its estimates, including those related to product returns, bad debts, carrying value of inventories, intangible and other long-lived assets, income taxes, pensions and other postretirement benefits. Actual results could differ from those estimates. Foreign Currency For foreign operations asset and liability accounts are translated with an exchange rate at the respective balance sheet dates; income statement accounts are translated at the average exchange rate for the years. Resulting translation adjustments are made directly to a separate component of shareholders' equity – "Accumulated other comprehensive income (loss) – Foreign currency translation". Foreign currency exchange transaction gains and losses are not material in any year. Cash Equivalents Highly liquid investments purchased with a maturity of three months or less are considered cash equivalents. The Company has deposits that exceed amounts insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, but the Company does not consider this a significant concentration of credit risk based on the strength of the financial institution. Approximately 60% of available cash is located outside of the United States in our foreign subsidiaries. Accounts Receivable Accounts receivable are stated at their net realizable value. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews the collectability of its receivables on an ongoing basis taking into account a combination of factors. The Company reviews potential problems, such as past due accounts, a bankruptcy filing or deterioration in the customer's financial condition, to ensure the Company is adequately accrued for potential loss. Accounts are considered past due based on when payment was originally due. If a customer's situation changes, such as a bankruptcy or creditworthiness, or there is a change in the current economic climate, the Company may modify its estimate of the allowance for doubtful accounts. The Company will write off accounts receivable after reasonable collection efforts have been made and the accounts are deemed uncollectible. No one customer exceeded 10% of total accounts receivable at year end 2018 or 2017. Inventories Inventories are valued at the lower of cost or market or net realizable value. Cost is determined by the last-in, first-out (LIFO) method in the U.S. ($30,151,679 for U.S. inventories at December 29, 2018, excluding Velvac) and by the first-in, first-out (FIFO) method for inventories outside the U.S. ($8,175,339 for inventories outside the U.S. at December 29, 2018). Cost exceeds the LIFO carrying value by approximately $6,957,972 at December 29, 2018 and $6,476,073 at December 30, 2017. There was no material LIFO quantity liquidation in 2018 or 2017. In addition, as of the balance sheet dates, the Company has recorded reserves for excess/obsolete inventory. Property, Plant and Equipment and Related Depreciation Property, plant and equipment (including equipment under capital lease) are stated at cost. Depreciation ($4,329,136 in 2018, $3,948,728 in 2017) is computed generally using the straight-line method based on the following estimated useful lives of the assets: Buildings 10 to 39.5 years; Machinery and equipment 3 to 10 years. Goodwill The Company performed qualitative assessments of goodwill as of the end of fiscal 2018 and fiscal 2017 and determined it is more likely than not that no impairment of goodwill existed at the end of 2018 or 2017. The Company will perform annual qualitative assessments in subsequent years as of the end of each fiscal year. Additionally, the Company will perform interim analysis whenever conditions warrant. Goodwill would be considered impaired whenever the historical carrying amount exceeds the fair value. Pursuant to the qualitative assessment performed, goodwill was not impaired in 2018 or 2017. Should we reach a different conclusion in the future, additional work would be performed to determine the amount of the non-cash impairment charge to be recognized. The maximum future impairment of goodwill that could occur is the amount recognized on our balance sheet. Intangible Assets Patents are recorded at cost and are amortized using the straight-line method over the lives of the patents. Technology and licenses are recorded at cost and are generally amortized on a straight-line basis over periods ranging from 5 to 17 years. Generally, non-compete agreements and customer relationships are being amortized using the straight-line method over a period of 5 years. Amortization expense in 2018 and 2017 was $1,452,084 and $770,457, respectively. In the event that facts and circumstances indicate that the carrying value of the intangible assets, including definite life intangible assets, may be impaired, an evaluation is performed to determine if a write-down is required. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. The Company's financial instruments are primarily investments in pension assets, see footnote 11, and consists of an interest rate swap. 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. The carrying amounts of other financial instruments (cash and cash equivalents, accounts receivable, accounts payable and debt) as of December 29, 2018 and December 30, 2017, approximate fair value based on the expected future cash flows of the related instruments. Revenue Recognition The Company recognizes revenue in accordance with ASC 606 when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company generates wholesale revenues primarily from the sale of products to original equipment manufacturers and distributers in the United States. The Company recognizes revenue upon shipment or transfer of title to the customer as that is when the customer obtains control of the promised goods. The Company typically extends credit terms to its customers based on their creditworthiness and generally does not receive advance payments. As such, the Company records accounts receivable at the time of shipment, when the Company's right to the consideration becomes unconditional. Accounts receivable from the Company's customers are typically due within 30 days of invoicing. An allowance for doubtful accounts is provided based on a periodic analysis of individual account balances, including an evaluation of days outstanding, payment history, recent payment trends and the Company's assessment of the customer's credit worthiness. As of December 29, 2018 and December 30, 2017, the Company's allowance for doubtful accounts total was $680,000 and $470,000, respectively. As of December 29, 2018 and December 30, 2017, the Company's bad debt expense was $220,000 and $87,000, respectively. The Company considers several factors in determining that control transfers to the customer upon shipment of products. These factors include that legal title transfers to the customer, the Company has a present right to payment, and the customer has assumed the risk and rewards of ownership at the time of shipment. Based on historical experience, the Company does not accrue a reserve for product returns. For the years ended December 29, 2018 and December 30, 2017, the Company recorded sales returns of $725,000 and $565,000, respectively, as a reduction of revenue. Greenwald Industries generates subscription services revenue from access provided to customers to the division's specific online databases. For the years ended December 29, 2018 and December 30, 2017, Greenwald Industries subscription services revenue was $448,000 and $317,000, respectively. Sales and similar taxes that are imposed on the Company's sales and collected from the customer are excluded from revenues. Costs for shipping and handling activities, including those activities that occur subsequent to transfer of control to the customer, are recorded as cost of sales and are expensed as incurred. The Company does not have any significant deferred revenue. For the years ended December 29, 2018 and December 30, 2017, the Company recorded no revenues related to performance obligations satisfied in prior periods. As part of the Company's adoption of the new revenue standard, the Company has elected to use the practical expedient to exclude disclosure of transaction prices allocated to remaining performance obligations, and when the Company expects to recognize such revenue, for all periods prior to the date of initial application of the standard. Subscription services revenue from remaining performance obligations as of December 29, 2018 was $0.1 million. No one customer accounted for 10% of net sales during 2018 or 2017. See footnote 13 regarding the Company's revenue disaggregated by reporting segment, intersegment sales by reporting segment and geography. Cost of Goods Sold Cost of goods sold reflects the cost of purchasing, manufacturing and preparing a product for sale. These costs generally represent the expenses to acquire or manufacture products for sale (including an allocation of depreciation and amortization) and are primarily comprised of direct materials, direct labor, and overhead, which includes indirect labor, facility and equipment costs, inbound freight, receiving, inspection, purchasing, warehousing and any other costs related to the purchasing, manufacturing or preparation of a product for sale. Shipping and Handling Costs Shipping and handling costs are included in cost of goods sold. Product Development Costs Product development costs, charged to expense as incurred, were $6,950,969 in 2018, $5,622,829 in 2017. Selling and Administrative Expenses Selling and administrative expenses include all operating costs of the Company that are not directly related to the cost of purchasing, manufacturing and preparing a product for sale. These expenses generally represent administrative expenses for support functions and related overhead. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs were $501,615 in 2018, $526,651 in 2017. Software Development Costs Software development costs, are primarily costs to develop software sold, leased, or otherwise marketed, that are incurred subsequent to the establishment of technological feasibility are capitalized if significant. Capitalized software development costs are amortized using the straight-line amortization method over the estimated useful life of the applicable software. For the year ended December 29, 2018 capitalized software development costs were $1,813,973. There were no capitalized software development costs in the 2017. 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. For the year ended December 29, 2018, there were 51,000 SARs granted under the 2010 Plan. Under the terms of the Director's Fee Program, the directors can elect to receive their Director's fees in cash or in common shares of the Company. This election is made at the beginning of each fiscal year and remains in effect for the entire year. Income Taxes The Company and its U.S. subsidiaries file a consolidated federal income tax return. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. On December, 22, 2017, SAB 118 was issued due to the complexities involved in accounting for the enacted Tax Act. SAB 118 requires the company to include in its financial statements a reasonable estimate of the impact of the Tax Act on earnings to the extent such estimate has been determined. Accordingly, the U.S. provision for income tax for 2017 was based on the reasonable estimate guidance provided by SAB 118. The company has assessed the impact from the Tax Act and recorded the impact in the fourth quarter of 2018. The Company accounts for uncertain tax positions pursuant to the provisions of FASB Accounting Standards Codification ("ASC") 740 which clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements. These provisions detail how companies should recognize, measure, present and disclose uncertain tax positions that have or are expected to be taken. As such, the financial statements will reflect expected future tax consequences of uncertain tax positions presuming the taxing authorities' full knowledge of the position and all relevant facts. See Note 7 Income Taxes. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 29, 2018 | |
BUSINESS ACQUISITIONS [Abstract] | |
BUSINESS ACQUISITIONS | 3 usiness Acquisitions Load N Lock Systems, Inc. Effective June 1, 2018 the Company acquired certain assets of Load N Lock Systems, Inc. ("Load N Lock"), including accounts receivable, inventories, furniture, fixtures and equipment, intellectual property rights, and assumed certain liabilities and rights existing under all sales and purchase agreements. Load N Lock provides innovative truck cap and tonneau cover locks that keep truck contents safe and secure. Load N Lock developed and patented the first integrated power lock for the automotive industry and has developed numerous truck cap and tonneau cover lock related products. Load N Lock provides its innovative products and solutions to the automotive industry's leading manufacturers of truck and automotive accessories in the United States and Asia. The above acquisition was accounted for under ASC 805 – Business Combinations. Load N Lock has been included in the Security Products segment of the Company from the date of the acquisition. The cost of the acquisition of Load N Lock was approximately $4,995,000. The excess of the cost of Load N Lock over the fair market value of the net definitive tangible and intangible assets acquired was $2,694,700, which has been recorded as goodwill. In connection with the above acquisition, the Company recorded the following intangible assets: Asset Class/Description Amount Weighted-average Life in Years Patents, technology, and licenses Customer relationships $ 689,675 8.3 Intellectual property 586,762 8.3 Non-compete agreements 52,570 8.3 $ 1,329,007 8.3 Velvac On April 3, 2017, the Company completed the Velvac Acquisition 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, as set forth in the Securities Purchase Agreement, subject to certain customary post-closing adjustments. Velvac is a premier designer and manufacturer of The The adjusted goodwill of $17,341,000 arising from the Velvac Acquisition consists 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 at fair value 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 (2,860,946 ) Total identifiable net assets 24,807,054 Goodwill 17,340,946 $ 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 $1,187,668 above the seller's original cost basis of $11,804,709. Intangible Assets The estimated fair value of identifiable intangible assets was 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. Acquisition Related Expenses Included in general and administrative expenses in the consolidated statements of operations for year ended December 30, 2017 was $863,000 for acquisition expenses. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 29, 2018 | |
Goodwill [Abstract] | |
GOODWILL | 4. GOODWILL The following is a roll-forward of goodwill for 2018 and 2017: Industrial Security Metal 2018 Beginning balance $ 19,169,849 $ 13,059,042 $ — $ 32,228,891 Investment in Load N Lock — 2,694,700 — 2,694,700 Foreign exchange (83,215 ) — — (83,215 ) Ending balance $ 19,086,634 $ 15,753,742 $ — $ 34,840,376 Industrial Security Metal 2017 Beginning balance $ 1,760,793 $ 13,059,042 $ — $ 14,819,835 Investment in Velvac 17,340,946 — — 17,340,946 Foreign exchange 68,110 — — 68,110 Ending balance $ 19,169,849 $ 13,059,042 $ — $ 32,228,891 |
INTANGIBLES
INTANGIBLES | 12 Months Ended |
Dec. 29, 2018 | |
INTANGIBLES [Abstract] | |
INTANGIBLES | 5. INTANGIBLES Trademarks are not amortized as their lives are deemed to be indefinite. Total amortization expense for each of the next five years is estimated to be as follows: 2019 - $1,211,000; 2020 - $958,000; 2021 - $937,000; 2022 - $931,000 and 2023 - $987,000. Weighted-Average 2018 Gross Amount Patents and developed technology $ 7,884,498 $ 1,648,731 $ — $ 9,533,229 10.2 Customer relationships 3,650,000 1,139,381 — 4,789,381 8.1 Non-compete agreements — 459,570 — 459,570 4.4 Intellectual property — 307,370 — 307,370 5.0 Total Gross Intangibles $ 11,534,498 $ 3,555,052 $ — $ 15,089,550 9.2 2018 Accumulated Amortization Patents and developed technology $ 2,448,380 $ 737,276 $ — $ 3,185,656 Customer relationships 638,750 408,233 — 1,046,983 Non-compete agreements — 329,296 — 329,296 Intellectual property — 245,895 — 245,895 Accumulated Amortization $ 3,087,130 $ 1,720,700 $ — $ 4,807,830 Net 2018 per Balance Sheet $ 8,447,368 $ 1,834,352 $ — $ 10,281,720 2017 Gross Amount Patents and developed technology $ 7,074,456 $ 1,021,918 $ — $ 8,096,374 12.3 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 $ 10,724,456 $ 2,185,994 $ — $ 12,910,450 10.8 Weighted-Average 2017 Accumulated Amortization Patents and developed technology $ 2,007,418 $ 630,784 $ — $ 2,638,202 Customer relationships 298,645 269,823 — 568,468 Non-compete agreements — 244,200 — 244,200 Intellectual property — 184,422 — 184,422 Accumulated Amortization $ 2,306,063 $ 1,329,229 $ — $ 3,635,292 Net 2017 per Balance Sheet $ 8,418,393 $ 856,765 $ — $ 9,275,158 |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 29, 2018 | |
CONTINGENCIES [Abstract] | |
CONTINGENCIES | 6. C ontingencies The Company is party to various legal proceedings from time to time related to its normal business operations. Currently, the Company is not involved in any legal proceedings. In 2010, the Company was contacted by the State of Illinois regarding potential ground contamination at its plant in Wheeling, Illinois. The Company entered into a voluntary remediation program in Illinois and engaged an environmental clean-up company to perform testing and develop a remediation plan. Since 2010, the environmental company completed a number of tests and the design of a final remediation system was approved in the third quarter of 2018. As of the end of 2018, the remediation plan was completed. The State of Illinois has received the documentation related to the remediation and is in the process signing off on the documentation. In 2016, the Company created a plan to remediate a landfill of spent foundry sand maintained at the Company's metal casting facility in New York. This plan was agreed to by the New York Department of Environmental Conservation (the "DEC") on March 27, 2018. Based on estimates provided by the Company's environmental engineers, the anticipated cost to remediate and monitor the landfill is $430,000. The Company has accrued for and expensed the entire $430,000 in the first quarter of 2018 ($50,000) and in fiscal 2017 ($380,000). In the Fall of 2018 detailed construction drawings were prepared by an outside consultant in conjunction with informal progress reviews by New York State Department of Environmental Conservation (NYSDEC). A meeting is scheduled for in the first quarter of 2019 to formally present finalized construction drawings to NYSDEC and to request written approval. Approval is anticipated by March 2019 and construction of the closure remedies (improved drainage system, regrading, and installation of a low permeability cap) is anticipated in May or June 2019. Site preparation including surveying and clearing of select trees and shrubs was conducted in December 2018 to improve access for anticipated Spring 2019 construction work. Long-term groundwater monitoring will commence in April 2019. In the fall of 2019, following the completion of construction work, a closure report and maintenance plan will be prepared for NYSDEC documenting the work done and requesting acknowledgement of satisfactory completion of the Order on Consent between Frazer and Jones and NYSDEC. |
DEBT
DEBT | 12 Months Ended |
Dec. 29, 2018 | |
DEBT [Abstract] | |
DEBT | 7. D ebt On April 3, 2017, the Company signed an amended and restated loan agreement (the "Restated Loan Agreement") with People's United Bank that included a $31 million term portion and a $10 million revolving credit portion. Proceeds of the loan were used to repay the remaining outstanding term loan of the Company (approximately $1,429,000) and to acquire 100% of the common stock of Velvac Holdings, Inc. (see Footnote 3). The term loan and revolving credit facility are secured by all of the Company's assets as well as mortgages on the properties owned by the Company. The term portion of the loan 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 loan is a five-year loan with any remaining outstanding balance due on March 1, 2022. The revolving credit portion has a quarterly commitment fee ranging from 0.2% to 0.375% based on operating results. Under the terms of the Restated Loan Agreement. The revolving credit portion has a maturity date of April 1, 2022. On April 3, 2017, the Company borrowed approximately $6.6 million on the revolving credit facility. The Company subsequently paid off $1.6 million on the revolving credit facility leaving a balance on the credit facility of $5 million as of December 30, 2017. During 2018 the company paid $5 million on the revolving credit facility leaving no balance as of December 29, 2018. The interest rates on the term and 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 the lender's prime rate. On December 29, 2018, the interest rate for one half ($14.3 million) of the term portion was 4.1%, using a 1 month LIBOR rate and 4.15% on the remaining balance ($14.3 million) of the term loan based on a 3 month LIBOR rate. On April 4, 2017, the Company entered into an interest rate swap contract with the lender with an original notional amount of $15,500,000, which is equal to 50% of the outstanding balance of the term loan on that date. The notional amount will decrease on a quarterly basis beginning July 3, 2017 following the principal repayment schedule of the term loan. 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%. The interest rates on the Loan Agreement, Restated Loan Agreement, and interest rate swap contract are susceptible to changes to the method that LIBOR rates are determined and to the potential phasing out of LIBOR after 2021. Information regarding the potential phasing out of LIBOR is provided below. On July 27, 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. In the United States, efforts to identify a set of alternative U.S. Dollar reference interest rates have been initiated by the Alternative Reference Rates Committee of the Federal Reserve Board and the Federal Reserve Bank of New York. At this time, it is not possible to predict whether any such changes will occur, whether LIBOR will be phased out or any such alternative reference rates or other reforms to LIBOR will be enacted in the United Kingdom, the United States or elsewhere or the effect that any such changes, phase-out, alternative reference rates or other reforms, if they occur, would have on the amount of interest paid on the Company's LIBOR-based borrowings. Uncertainty as to the nature of such potential changes, phase-out, alternative reference rates or other reforms may materially adversely affect interest rates paid by the Company on its borrowings. Reform of, or the replacement or phasing out of, LIBOR and proposed regulation of LIBOR and other "benchmarks" may materially adversely affect the amount of interest paid on the Company's LIBOR-based borrowings and could have a material adverse effect on the Company's business, financial condition and results of operations. Debt consists of: 2018 2017 Term loans $ 28,675,000 $ 30,225,000 Revolving credit loan — 5,000,000 28,675,000 35,225,000 Less current portion 2,325,000 6,550,000 $ 26,350,000 $ 28,675,000 The Company paid interest of $1,202,272 in 2018, $977,399 in 2017. 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 as of December 29, 2018. In addition, the Company has restrictions on, among other things, new capital leases, purchases or redemptions of its capital stock, mergers and divestitures, and new borrowing. The Company was in compliance with all covenants in 2017 and 2018. As of December 29, 2018, scheduled annual principal maturities of long-term debt for each of the next five years follow: 2019 $ 2,325,000 2020 3,100,000 2021 3,100,000 2022 20,150,000 Thereafter — $ 28,675,000 |
STOCK OPTIONS AND AWARDS
STOCK OPTIONS AND AWARDS | 12 Months Ended |
Dec. 29, 2018 | |
STOCK OPTIONS AND AWARDS [Abstract] | |
STOCK OPTIONS AND AWARDS | 8. S tock ptions and wards Stock Options As of December 29, 2018, 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. During 2018, no stock options or restricted stock were granted that were subject to the meeting of performance measurements and during 2017, 25,000 shares were granted but not issued. For the period of 2018, the Company used several assumptions which included an expected term of 3.5 years, volatility deviation of 29.5% and a risk free rate of 2.33%. For the period of 2017, the Company used several assumptions which included an expected term of 3.5 years, volatility deviation of 22.6% and a risk free rate of 1.47%. 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 the Company's common stock. During 2018, the Company issued 51,000 SARs and during 2017 149,500 SARs were issued. Stock-based compensation expense in connection with SARs granted to employees during fiscal year 2018 was $276,778 and for 2017 was $172,806. As of December 29, 2018, there were 274,500 shares of common stock reserved and available for future grant under the above noted 2010 Plan. The following tables set forth the outstanding SARs for the period specified: Year Ended December 29, 2018 Year Ended December 30, 2017 Units Weighted - Average Exercise Price Units Weighted - Average Exercise Price Outstanding at beginning of period 141,500 $ 20.36 — $ — Issued 51,000 24.90 149,500 20.39 Forfeited (3,333 ) 19.10 (8,000 ) 21.10 Outstanding at end of period 189,167 21.46 141,500 20.36 SARs Outstanding and Exercisable Range of Exercise Prices Outstanding as of December 29, 2018 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of December 29, 2018 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $ 19.10-24.90 189,167 3.5 $ 21.46 19,670 3.3 19.10 The following tables set forth the outstanding stock grants for the period specified: Year Ended December 29, 2018 Year Ended December 30, 2017 Shares Weighted - Average Exercise Price Shares Weighted - Average Exercise Price Outstanding at beginning of period 25,000 $ — — $ — Issued — — 25,000 — Forfeited — — — — Outstanding at end of period 25,000 — 25,000 — Stock Grants Outstanding and Exercisable Range of Exercise Prices Outstanding as of December 30, 2017 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of December 29, 2018 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $ 0.00 25,000 3.3 — — — — As of December 29, 2018, outstanding SARs and options had an intrinsic value of $1,104,410. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 29, 2018 | |
Income Taxes [Abstract] | |
INCOME TAXES | 9. I ncome axes Deferred income taxes are provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and those for income tax reporting purposes. Deferred income tax (assets) liabilities relate to: 2018 2017 Property, plant and equipment $ 2,582,792 $ 3,853,837 Intangible assets 4,710,052 2,620,791 Other 218,710 64,905 Foreign Withholding Tax 540,761 861,964 Total deferred income tax liabilities 8,052,315 7,401,497 Other postretirement benefits (156,710 ) (235,510 ) Inventories (1,133,427 ) (792,724 ) Allowance for doubtful accounts (146,576 ) (97,570 ) Accrued compensation (200,232 ) (83,829 ) Pensions (6,127,538 ) (6,029,034 ) Foreign Tax Credit (167,826 ) (449,578 ) Total deferred income tax assets (7,932,309 ) (7,688,245 ) Net deferred income tax (assets) liabilities $ 120,006 $ (286,748 ) Income before income taxes consists of: 2018 2017 Domestic $ 12,431,889 $ 7,513,348 Foreign 5,158,440 3,941,594 $ 17,590,329 $ 11,454,942 The provision for income taxes follows: 2018 2017 Current: Federal $ 484,451 $ 3,713,975 Foreign 753,521 1,084,353 State 347,199 319,439 Deferred: Federal 815,858 (47,241 ) Foreign 153,726 1,301,972 State 529,637 (37,189 ) $ 3,084,392 $ 6,409,687 A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows: 2018 2017 Amount Percent Amount Percent Income taxes using U.S. federal statutory rate $ 3,693,968 21 % $ 3,894,680 34 % State income taxes, net of federal benefit 692,698 4 264,205 2 Impact on Foreign Repatriation Tax Reform (83,479 ) (1 ) 2,034,065 18 Impact of foreign subsidiaries on effective tax rate (401,992 ) (2 ) (364,569 ) (3 ) Impact of New Tax Law (507,847 ) (2 ) 531,307 5 Impact of Research & Development tax credit (216,675 ) (1 ) (60,630 ) (1 ) Impact of manufacturers deduction on effective tax rate 0 0 (123,554 ) (1 ) Other—net (92,281 ) (1 ) 234,183 2 3,084,392 18 % 6,409,687 56 % Total income taxes paid were $3,741,021 in 2018 and $4,104,701 in 2017. Pursuant to the SAB118, the company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts and as such has adjusted for the finalization of the tax impacts in the fourth quarter of 2018. The change primarily related to deferred taxes. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the "Act"). The Act, which is commonly referred to as "U.S. tax reform," significantly changes U.S. corporate income tax laws by, among other provisions, reducing the maximum U.S. corporate income tax rate from 35% to 21% starting in 2018, and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. During the year ending December 30, 2017 and December 29, 2018, the Company recognized deferred income tax expense of $531,307 and deferred income tax benefit of $507,847, respectively, as a result of the re-measurement of deferred tax assets and liabilities to the new lower statutory rate of 21%. Due to the passage of the Tax Cut and Jobs Act, United States income taxes have been provided on the undistributed earnings of foreign subsidiaries ($19,336,428, at December 30, 2017) as well as the associated withholding taxes from the foreign countries. The amount of taxes associated with the current tax law change on the foreign earnings is $1,557,897. Foreign divisions that were previously treated as corporations for U.S. income tax purposes will generally no longer be taxed on their foreign source income by the U.S. federal government. The resulting taxes from the Tax Cut and Jobs Act of $1,557,897; $816,198 are associated with the withholding taxes assessed by the foreign countries, net of the applicable U.S. tax credits; and $741,699 in taxes are associated with the deemed repatriation of earnings held in foreign corporations. The Company has made an election to pay the $741,699 taxes in installments over 8 years with the payments due in the years 2018 to 2022 in the amount of $59,336; in the year 2023 a payment of $111,255; in the year 2024 a payment of $148,340; and the final payment in the year 2025 of $185,424. Under accounting standards (ASC 740) a deferred tax liability is not recorded for the excess the financial reporting (book) basis over the tax basis of an investment in a foreign subsidiary if the indefinite reinvestment criteria is met. Effective for foreign earnings after December 30, 2017, if such earnings are distributed in the form of cash dividends, the Company would not be subject to additional U.S. income taxes but could be subject to foreign income and withholding taxes. A provision has not been made for additional U.S. federal and foreign taxes at December 29, 2018 on approximately $4,404,920 of undistributed earnings of foreign subsidiaries because the Company intends to reinvest these funds indefinitely. It is not practicable to estimate the unrecognized deferred tax liability for withholding taxes on these undistributed earnings. A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows: 2018 2017 Balance at beginning of year $ 299,734 $ 251,839 Increases for positions taken during the current period 74,219 53,013 Decreases resulting from the expiration of the statute of limitations (74,231 ) (5,118 ) Balance at end of year $ 299,722 $ 299,734 The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2014 and non-U.S. income tax examinations by tax authorities prior to 2012. Included in the balance at December 29, 2018, are $236,781 of unrecognized tax benefits that would affect the annual effective tax rate. In 2018, the Company recognized accrued interest related to unrecognized tax benefits in income tax expense. The Company had approximately $51,017 of accrued interest at December 29, 2018. The total amount of unrecognized tax benefits could increase or decrease within the next twelve months for a number of reasons, including the closure of federal, state and foreign tax years by expiration of the statute of limitations and the recognition and measurement considerations under ASC 740. The Company believes that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months. |
LEASES
LEASES | 12 Months Ended |
Dec. 29, 2018 | |
LEASES [Abstract] | |
LEASES | 10. L eases The Company leases certain equipment and buildings under operating lease arrangements. Most leases are for a fixed term and for a fixed amount; additionally, the Company leases certain buildings under operating leases on a month-to-month basis. The Company is not a party to any leases that have step rent provisions, escalation clauses, capital improvement funding or payment increases based on any index or rate. Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year during each of the next five years follow: 2019 $ 2,489,016 2020 1,928,877 2021 1,120,898 2022 304,704 2023 550 $ 5,844,045 Rent expense for all operating leases was $2,552,887 in 2018 and $2,166,755 in 2017. The Company expects future rent expense, including non-cancelable operating leases, leases that are expected to be renewed and buildings leased on a month-to-month basis, for each of the next five years to be in the range of $2,200,000 to $2,500,000. |
RETIREMENT BENEFIT PLANS
RETIREMENT BENEFIT PLANS | 12 Months Ended |
Dec. 29, 2018 | |
RETIREMENT BENEFIT PLANS [Abstract] | |
RETIREMENT BENEFIT PLANS | 11. Retirement Benefit Plans The Company has non-contributory defined benefit pension plans covering most 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 non-qualified supplemental retirement plans that provide certain 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 October 31, 2018, as a result of the collective bargaining agreement between the Frazer and Jones Company, Division of the Eastern Company and the International Union of Electronic, Electrical, Salaried (Machine and Furniture Workers) CWA-AFL-CIO pension accruals for the covered employees have been frozen. Under ASC 715, the Company is required to remeasure plan assets and obligations during an interim period whenever a significant event occurs that results in a material change in the net periodic pension cost. The determination of significance is based on judgment and consideration of events and circumstances affecting the pension costs. After consulting with our actuary, although the freezing of benefits under the Frazer and Jones Plan would normally be considered a significant event pursuant to such standard, there was no remaining unrecognized Prior Service Cost as of the date of the freeze, thus, Eastern Company did not increase the expense. In addition, the freezing of benefit accruals did not impact the pension benefit obligation. Thus there was no additional recognition required and a remeasurement was not necessary. Effective for January 1, 2018, as a result of the collective bargaining agreement between the Illinois Lock Company and the Service Employees International Union Local, 1 C.L.C. pension accruals for the covered employees have been frozen. Under ASC 715, the Company is required to remeasure plan assets and obligations during an interim period whenever a significant event occurs that results in a material change in the net periodic pension cost. The determination of significance is based on judgment and consideration of events and circumstances affecting the pension costs. After consulting with our actuary, the freezing of benefits under the Illinois Lock Plan was considered a significant event pursuant to such standard. As a result, the Company expensed the previously unrecognized Prior Service Cost. The Eastern Company increased the expense by $14,928. The freezing of benefit accruals did not impact the pension benefit obligation. The additional recognition occurred as of the beginning of the fiscal year; thus, a remeasurement was not necessary. Effective for September 1, 2017, as a result of the collective bargaining agreement between the Eberhard Manufacturing Company and the International Association of Machinists and Aerospace Workers AFL-CIO District # 54 Local #439, the following changes were made: ● The pension for the covered employees has been frozen for any new employees who would have entered the plan after September 1, 2017. Under ASC 715, the Company is required to remeasure plan assets and obligations during an interim period whenever a significant event occurs that results in a material change in the net periodic pension cost. The determination of significance is based on judgment and consideration of events and circumstances affecting the pension costs. After consulting with our actuary the partial freezing of benefits under the Eberhard Hourly Union Plan was not considered a significant event pursuant to such standard. The benefit formula multiplier was modified by increasing it by $.50 on September 1, 2017 and by another $.50 on each subsequent anniversary for the lifetime of the contract. The benefit multiplier will equal $45.00 at the end of the current contract (August 31, 2022). Components of the net periodic benefit cost of the Company's pension benefit plans for the fiscal year indicated were as follows: 2018 2017 Service cost $ 1,319,841 $ 1,276,608 Interest cost 3,107,164 3,170,194 Expected return on plan assets (5,219,515 ) (4,783,531 ) Amortization of prior service cost 114,822 178,874 Amortization of the net loss 1,110,111 1,231,486 Net periodic benefit cost $ 432,423 $ 1,073,631 Assumptions used to determine net periodic benefit cost for the Company's pension benefit plans for the fiscal year indicated were as follows: 2018 2017 Discount rate - Pension plans 3.54% - 3.57 % 4.04% - 4.08 % - Supplemental pension plans 3.10 % 3.03 % Expected return on plan assets 7.5 % 7.5 % Rate of compensation increase 0 % 0 % Components of the net periodic benefit cost of the Company's other postretirement benefit plan were as follows: 2018 2017 Service cost $ 37,024 $ 27,389 Interest cost 77,161 80,827 Expected return on plan assets (55,650 ) (51,494 ) Amortization of prior service cost (5,072 ) (21,444 ) Amortization of the net loss (65,591 ) (77,601 ) Net periodic benefit cost $ (12,128 ) $ (42,323 ) Assumptions used to determine net periodic benefit cost for the Company's other postretirement plan for the fiscal year indicated were as follows: 2018 2017 Discount rate 3.60 % 4.12 % Expected return on plan assets 4.0 % 4.0 % As of December 29, 2018 and December 30, 2017, the status of the Company's pension benefit plans and other postretirement benefit plan was as follows: Pension Benefit Other Postretirement Benefit 2018 2017 2018 2017 Benefit obligation at beginning of year $ 98,522,201 $ 92,258,937 $ 2,423,410 $ 2,339,050 Change due to availability of final actual assets and census data — — — — Change in discount rate (8,319,874 ) 6,200,491 (217,539 ) 181,691 Service cost 1,319,841 1,276,608 37,024 27,389 Interest cost 3,107,164 3,170,194 77,161 80,827 Actuarial (gain)/loss 531,799 (1,495,135 ) (89,664 ) (65,601 ) Benefits paid (3,627,931 ) (3,385,793 ) (133,631 ) (139,946 ) Plan Amendment — 496,899 — — Benefit obligation at end of year $ 91,533,200 $ 98,522,201 $ 2,096,761 $ 2,423,410 2018 2017 2018 2017 Fair value of plan assets at beginning of year $ 72,098,772 $ 65,627,499 $ 1,391,239 $ 1,287,350 Actual return on plan assets (4,827,641 ) 9,315,225 56,887 103,889 Employer contributions 2,527,675 541,841 133,631 139,946 Benefits paid (3,627,931 ) (3,385,793 ) (133,631 ) (139,946 ) Fair value of plan assets at end of year $ 66,170,875 $ 72,098,772 $ 1,448,126 $ 1,391,239 Pension Benefit Other Postretirement Benefit Funded Status 2018 2017 2018 2017 Net amount recognized in the balance sheet $ (25,362,325 ) $ (26,423,429 ) $ (648,635 ) $ (1,032,171 ) Amounts recognized in accumulated other comprehensive income consist of: Pension Benefit Other Postretirement Benefit 2018 2017 2018 2017 Net (loss)/gain $ (33,714,584 ) $ (32,565,614 ) $ 1,332,634 $ 1,089,785 Prior service (cost) credit (364,392 ) (494,142 ) 13,325 18,397 $ (34,078,976 ) $ (33,059,756 ) $ 1,345,959 $ 1,108,182 Change in the components of accumulated other comprehensive income consist of: Pension Benefit Other Postretirement Benefit 2018 2017 2018 2017 Balance at beginning of period $ (33,059,756 ) $ (33,799,555 ) $ 1,108,182 $ 1,270,922 Change due to availability of final actual assets and census data — --- — — Charged to net periodic benefit cost Prior service cost 114,822 178,874 (5,072 ) (21,444 ) Net loss (gain) 1,110,111 1,231,486 (65,591 ) (77,601 ) Liability (gains)/losses Discount rate 8,319,874 (6,200,491 ) 217,539 (181,691 ) Asset (gains)/losses deferred (9,531,647 ) 5,978,071 1,237 52,395 Additional recognition due to plan amendment 14,928 (496,899 ) — — Other (1,047,308 ) 48,758 89,664 65,601 Balance at end of period $ (34,078,976 ) $ (33,059,756 ) $ 1,345,959 $ 1,108,182 In 2018, the net periodic pension benefit cost included $1,145,203 of net loss and $99,380 of prior service cost and the net periodic other postretirement benefit cost included $82,027 of net gain and $5,072 of prior service credit. Assumptions used to determine the projected benefit obligations for the Company's pension benefit plans and other postretirement benefit plan for the fiscal year indicated were as follows: 2018 2017 Discount rate - Pension plans 4.20% - 4.22 % 3.54% - 3.57 % - Supplemental pension plans 3.81 % 3.10 % - Other postretirement plan 4.26 % 3.60 % At December 29, 2018 and December 30, 2017, the accumulated benefit obligation for all qualified and nonqualified defined benefit pension plans was $91,533,200 and $98,522,201, respectively. Information for the under-funded pension plans with a projected benefit obligation and an accumulated benefit obligation in excess of plan assets: 2018 2017 Number of plans 5 6 Projected benefit obligation $ 91,533,200 $ 98,522,201 Accumulated benefit obligation 91,533,200 98,522,201 Fair value of plan assets 66,170,875 72,098,722 Net amount recognized in accrued benefit liability (25,362,325 ) (26,423,429 ) Estimated future benefit payments to participants of the Company's pension plans are $4.1 million in 2019, $4.3 million in 2020, $4.5 million in 2021, $4.7 million in 2022, $4.9 million in 2023 and a total of $27.4 million from 2024 through 2028. Estimated future benefit payments to participants of the Company's other postretirement plan are $100,000 in 2019, $100,000 in 2020, $101,000 in 2021, $102,000 in 2022, $103,000 in 2023 and a total of $536,000 from 2024 through 2028. The Company expects to make cash contributions to its qualified pension plans of approximately $600,000 and to its other postretirement plan of approximately $105,000 in 2019. We consider a number of factors in determining and selecting assumptions for the overall expected long-term rate of return on plan assets. We consider the historical long-term return experience of our assets, the current and expected allocation of our plan assets, and expected long-term rates of return. We derive these expected long-term rates of return with the assistance of our investment advisors and generally base these rates on a 10-year horizon for various asset classes and consider the expected positive impact of active investment management. We base our expected allocation of plan assets on a diversified portfolio consisting of domestic and international equity securities and fixed income securities. We consider a variety of factors in determining and selecting our assumptions for the discount rate at the end of the year. In 2018, as in 2017, we developed each plan's discount rate with the assistance of our actuaries by matching expected future benefit payments in each year to the corresponding spot rates from the FTSE Pension Liability Yield Curve, comprised of high quality (rated AA or better) corporate bonds. The fair values of the company's pension plans assets at December 29, 2018 and December 30, 2017, utilizing the fair value hierarchy discussed in Note 2, follow: December 29, 2018 Level 1 Level 2 Level 3 Total Cash and Equivalents: Common/collective trust funds $ — $ 306,882 $ — $ 306,882 Equities: The Eastern Company Common Stock 5,247,495 — 5,247,495 Common/collective trust funds Russell Multi Asset Core Plus Fund (a) — 30,611,519 — 30,611,519 Fixed Income: Common/collective trust funds Target Duration LDI Fixed Income Funds (b) ● Russell 8 Year LDI Fixed Income Fund — 5,735,993 — 5,735,993 ● Russell 14 Year LDI Fixed Income Fund — 17,044,596 — 17,044,596 STRIPS Fixed Income Funds (c) ● Russell 15 Year STRIPS Fixed Income Fund — 1,811,436 — 1,811,436 ● Russell 10 Year STRIPS Fixed Income Fund — 3,408,879 — 3,408,879 ● Russell 28 to 29 Year STRIPS Fixed Income Fund — 2,004,075 — 2,004,075 Total $ 5,247,495 $ 60,923,380 $ — $ 66,170,875 December 30, 2017 Level 1 Level 2 Level 3 Total Cash and Equivalents: Common/collective trust funds $ — $ 278,016 $ — $ 278,016 Equities: The Eastern Company Common Stock 5,675,021 — 5,675,021 Common/collective trust funds Russell Multi Asset Core Plus Fund (a) — 31,642,838 — 31,642,838 Fixed Income: Common/collective trust funds Target Duration LDI Fixed Income Funds (b) ● Russell 8 Year LDI Fixed Income Fund — 6,033,648 — 6,033,648 ● Russell 14 Year LDI Fixed Income Fund — 18,083,206 — 18,083,206 STRIPS Fixed Income Funds (c) ● Russell 15 Year STRIPS Fixed Income Fund — 1,905,068 — 1,905,068 ● Russell 10 Year STRIPS Fixed Income Fund — 3,570,427 — 3,570,427 ● Russell 28 to 29 Year STRIPS Fixed Income Fund — 2,144,581 — 2,144,581 Insurance contracts — 2,765,967 — 2,765,967 Total $ 5,675,021 $ 66,423,751 $ — $ 72,098,772 Equity common funds primarily hold publicly traded common stock of both U.S and international companies selected for purposes of total return and to maintain equity exposure consistent with policy allocations. The Level 1 investment is made up of shares of The Eastern Company Common Stock and is valued at market price. Level 2 investments include commingled funds valued at unit values provided by the investment managers, which are based on the fair value of the underlying publicly traded securities. (a) The investment objective of the RITC (formerly Russell) Multi-Asset Core Plus Fund seeks to provide long-term growth of capital over a market cycle by offering a diversified portfolio of funds and separate accounts investing in global stock, return seeking fixed income, commodities, global real estate and opportunistic investments. They hold a dynamic mix of underlying Russell Investments funds and/or separate accounts. Russell Investments is a strong proponent of disciplined strategic asset allocation and rebalancing strategies, and believes that unstable movements in the market have the potential to create opportunities. By identifying short-term mispricing, and making small tactical adjustments to the Multi-Asset Core Plus Fund, they believe there is potential to enhance returns while continuing to manage risks. (b) The Target Duration LDI Fixed Income Funds seek to outperform their respective Barclays-Russell LDI Indexes over a full market cycle. These Funds invest primarily in investment grade corporate bonds that closely match those found in discount curves used to value U.S. pension liabilities. They seek to provide additional incremental return through modest interest rate timing, security selection and tactical use of non-credit sectors. Generally for use in combination with other bond funds to gain additional credit exposure, with the goal of reducing the mismatch between a plan's assets and liabilities. (c) The STRIPS (Separate Trading of Registered Interest and Principal of Securities) Funds seek to provide duration and Treasury exposure by investing in an optimized subset of the STRIPS universe with a similar duration profile as the Barclays U.S. Treasury STRIPS 10-11 year, 16-16 year or 28-29 year Index. These passively managed funds are generally used with other bond funds to add additional duration to the asset portfolio. This will help reduce the mismatch between a plan's assets and liabilities. The investment portfolio contains a diversified blend of common stocks, bonds, cash equivalents, and other investments, which may reflect varying rates of return. The investments are further diversified within each asset classification. The portfolio diversification provides protection against a single security or class of securities having a disproportionate impact on aggregate performance. The Company has elected to change its investment strategy to better match the assets with the underlying plan liabilities. Currently, the long-term target allocations for plan assets are 50% in equities and 50% in fixed income although the actual plan asset allocations may be within a range around these targets. The actual asset allocations are reviewed and rebalanced on a periodic basis to maintain the target allocations. It is expected that, as the funded status of the plans improves, more assets will be invested in long-duration fixed income instruments. The plans' assets include 217,018 shares of the common stock of the Company having a market value of $5,247,495 and $5,675,021 at December 29, 2018 and December 30, 2017, respectively. No shares were purchased in 2018 or 2017 nor were and shares sold in either period. Dividends received during 2018 and 2017 on the common stock of the Company were $95,488 and $95,488 respectively. U.S. salaried and non-union hourly employees and most employees of the Company's Canadian subsidiaries are covered by defined contribution plans. The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code covering substantially all U.S. non-union employees. This plan allows participants to make voluntary contributions of up to 100% of their annual compensation on a pretax basis, subject to IRS limitations. The plan provides for contributions by the Company at its discretion. The Company amended the Eastern Company Savings and Investment Plan ("401(k) Plan Amendment") effective June 1, 2016. The 401(k) Plan Amendment increased this match to 50% of the first 6% of contributions for the remainder of Fiscal 2016. The 401(k) Plan Amendment also provided for an additional non-discretionary contribution (the "transitional credit") for certain non-union U.S. employees who were eligible to participate in the Salaried Plan. The amount of this non-discretionary contribution ranges from 0% to 4% of wages, based on the age of the individual on June 1, 2016. The 401(k) Plan Amendment increased the non-discretionary safe harbor contribution to 3%, and changed the eligibility to all non-union U.S. employees. The Company made contributions to the plan as follows: 2018 2017 Regular matching contributions $ 551,046 $ 465,671 Transitional credit contributions 349,062 385,578 Non-discretionary contributions 578,373 355,747 Total contributions made for the period $ 1,478,481 $ 1,206,996 At December 29, 2018, the Company had accrued $565,748 for the non-discretionary safe harbor contribution this amount was expensed in 2018 and was contributed to the plan in January 2019. At December 30, 2017, the Company had accrued $502,618 for the non-discretionary safe harbor contribution. This amount was contributed to the Plan in January 2018 and was expensed in 2017. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 29, 2018 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 12. Earnings per Share The denominators used in the earnings per share computations follow: 2018 2017 Basic: Weighted average shares outstanding 6,258,277 6,259,139 Diluted: Weighted average shares outstanding 6,258,277 6,259,139 Dilutive stock options 15,697 35,634 Denominator for diluted earnings per share 6,273,974 6,294,773 There were no anti-dilutive stock equivalents in 2018 or 2017. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 12 Months Ended |
Dec. 29, 2018 | |
REPORTABLE SEGMENTS [Abstract] | |
REPORTABLE SEGMENTS | 13. Reportable Segments 2018 2017 Sales: Sales to unaffiliated customers: Industrial Hardware $ 140,293,409 $ 115,273,233 Security Products 64,897,871 60,976,998 Metal Products 29,084,183 27,989,382 $ 234,275,463 $ 204,239,613 Inter-segment Sales: Industrial Hardware $ 366,381 $ 524,536 Security Products 3,365,695 2,935,797 Metal Products 13,421 21,431 $ 3,745,497 $ 3,481,764 Income Before Income Taxes: Industrial Hardware $ 9,588,185 $ 5,042,687 Security Products 7,122,640 6,020,847 Metal Products 1,148,516 1,019,224 Operating Profit 17,859,341 12,082,758 Interest expense (1,202,272 ) (976,512 ) Other income 933,260 348,696 $ 17,590,329 $ 11,454,942 Geographic Information: Net Sales: United States $ 207,789,058 $ 178,124,818 Foreign 26,486,405 26,114,795 $ 234,275,463 $ 204,239,613 Foreign sales are primarily to customers in North America. Identifiable Assets: United States $ 166,665,767 $ 153,712,643 Foreign 14,581,800 22,745,754 $ 181,247,567 $ 176,458,397 Industrial Hardware $ 47,600,805 $ 44,828,458 Security Products 54,593,837 53,724,837 Metal Products 19,909,256 18,126,395 122,103,898 116,679,690 General corporate 59,143,669 59,778,707 $ 181,247,567 $ 176,458,397 2018 2017 Depreciation and Amortization: Industrial Hardware $ 2,978,324 $ 2,526,460 Security Products 1,135,811 964,873 Metal Products 1,215,073 1,227,852 $ 5,329,208 $ 4,719,185 Capital Expenditures: Industrial Hardware $ 3,029,406 $ 1,151,868 Security Products 1,482,267 705,178 Metal Products 901,400 899,663 5,413,073 2,756,709 Currency translation adjustment (9,014 ) 6,240 General corporate 6,486 — $ 5,410,545 $ 2,762,949 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 29, 2018 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 14. Recent Accounting Pronouncements Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 provides authoritative guidance which impacts virtually all aspects of an entity's revenue recognition. The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2017. The adoption of this amendment did not have a material impact on the consolidated financial statements of the Company. 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 adoption of this amendment did not have a material impact on the consolidated financial statements of the Company. 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 adoption of this amendment did not have a material impact on the consolidated financial statements of the Company. 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 update and primarily improve the presentation of net periodic pension cost and net periodic postretirement benefit cost reporting. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment was applied retrospectively with earlier application permitted as of the beginning of an interim or annual reporting period after December 15, 2017. The adoption of this amendment did not have a material impact on the consolidated financial statements of the Company. Upcoming In February 2016, the FASB issued ASU No. 2016-02, Leases ("Topic 842"). ASU 2016-02 requires leases to present right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. The guidance is to be applied at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2018. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842 - Leases. ASU 2018-10 clarifies and increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. The guidance is to be applied upon adoption of Topic 842 and is effective for years beginning after December 15, 2018. Also in July 2018, the FASB issued ASU No. 2018-11, Leases. ASU 2018-11 provides clarification and an additional (and optional) transition method to adopt the new leases standard. The guidance is to be applied upon adoption of Topic 842 and is effective for years beginning after December 15, 2018. The adoption of this amendment will not have a material impact on the consolidated financial statements of the Company. In calculating the effect of Topic 842 – Leases, the Company has elected the transition method thereby not restating comparable periods and recognizing the cumulative effect of this guidance to retained earnings in the first quarter of 2019. The Company has elected to account for non-lease components as part of the lease component to which they relate. Lease accounting involves significant judgements, including when making estimates related to the lease term, lease payments, and discount rate. In accordance with the guidance, the Company will recognize the right of use (ROU) asset and a lease liability for all leases with a term greater than 12 months. The adoption of this amendment will not have a material impact on the consolidated financial statements of the Company. 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. |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 12 Months Ended |
Dec. 29, 2018 | |
CONCENTRATION OF RISK [Abstract] | |
CONCENTRATION OF RISK | 15. Concentration of risk 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 of December 29, 2018 and December 30, 2017, there were no significant concentrations of credit risk. No single customer represented more than 10% of the Company's net accounts receivable as of December 29, 2018 or at December 30, 2017. 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 $14,337,500 on December 29, 2018 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. Currency Exchange Rate Risk The Company's currency exposure is concentrated in the Canadian dollar, Mexican peso, New Taiwan dollar, Chinese RMB and the Hong Kong dollar. Because of the Company's limited exposure to any single foreign market, any exchange gains or losses have not been material and are not expected to be material in the future. As a result, the Company does not attempt to mitigate its foreign currency exposure through the acquisition of any speculative or leveraged financial instruments. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying accounts | 12 Months Ended |
Dec. 29, 2018 | |
Schedule II - Valuation and Qualifying accounts [Abstract] | |
Schedule II - Valuation and Qualifying accounts | The Eastern Company and Subsidiaries Schedule II – Valuation and Qualifying accounts COL. A COL. B COL. C COL. D COL. E ADDITIONS Description Balance at Beginning of Period (1) Charged to Costs and Expenses (2) Charged to Other Accounts-Describe Deductions – Describe Balance at End of Period $ 470,000 $ 220,000 $ 0 $ 10,000 (a) $ 680,000 Fiscal year ended December 30, 2017: $ 430,000 $ 87,000 $ 64,000 $ 111,000 (a) $ 470,000 (a) Uncollectible accounts written off, net of recoveries. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 29, 2018 | |
ACCOUNTING POLICIES [Abstract] | |
Fiscal Year | Fiscal Year The Company's year ends on the Saturday nearest to December 31. Fiscal Years, 2018 and 2017, were 52 week each. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany accounts and transactions are eliminated. |
Reclassification | Reclassification Commencing with the first quarter of 2018, pension service costs have been broken out and reclassified from the gains and losses associated with the pension assets. Additionally, for 2017 $193,943 of gains associated with pensions assets have been reclassified from cost of goods sold to other income for comparability between the two periods. The reclassification of these expenses does not affect the net income reported. Commencing with the third quarter of 2017, product development expenses have been separately identified for all periods presented. These expenses have been reclassified from cost of products sold and selling and administrative expenses. Product development expense is not necessarily a cost of product sold. Rather, these expenses are related to product development. The reclassification of these expenses does not affect the net income reported. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. On an ongoing basis the Company evaluates its estimates, including those related to product returns, bad debts, carrying value of inventories, intangible and other long-lived assets, income taxes, pensions and other postretirement benefits. Actual results could differ from those estimates. |
Foreign Currency | Foreign Currency For foreign operations asset and liability accounts are translated with an exchange rate at the respective balance sheet dates; income statement accounts are translated at the average exchange rate for the years. Resulting translation adjustments are made directly to a separate component of shareholders' equity – "Accumulated other comprehensive income (loss) – Foreign currency translation". Foreign currency exchange transaction gains and losses are not material in any year. |
Cash Equivalents | Cash Equivalents Highly liquid investments purchased with a maturity of three months or less are considered cash equivalents. The Company has deposits that exceed amounts insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, but the Company does not consider this a significant concentration of credit risk based on the strength of the financial institution. Approximately 60% of available cash is located outside of the United States in our foreign subsidiaries. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at their net realizable value. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews the collectability of its receivables on an ongoing basis taking into account a combination of factors. The Company reviews potential problems, such as past due accounts, a bankruptcy filing or deterioration in the customer's financial condition, to ensure the Company is adequately accrued for potential loss. Accounts are considered past due based on when payment was originally due. If a customer's situation changes, such as a bankruptcy or creditworthiness, or there is a change in the current economic climate, the Company may modify its estimate of the allowance for doubtful accounts. The Company will write off accounts receivable after reasonable collection efforts have been made and the accounts are deemed uncollectible. No one customer exceeded 10% of total accounts receivable at year end 2018 or 2017. |
Inventories | Inventories Inventories are valued at the lower of cost or market or net realizable value. Cost is determined by the last-in, first-out (LIFO) method in the U.S. ($30,151,679 for U.S. inventories at December 29, 2018, excluding Velvac) and by the first-in, first-out (FIFO) method for inventories outside the U.S. ($8,175,339 for inventories outside the U.S. at December 29, 2018). Cost exceeds the LIFO carrying value by approximately $6,957,972 at December 29, 2018 and $6,476,073 at December 30, 2017. There was no material LIFO quantity liquidation in 2018 or 2017. In addition, as of the balance sheet dates, the Company has recorded reserves for excess/obsolete inventory. |
Property, Plant and Equipment and Related Depreciation | Property, Plant and Equipment and Related Depreciation Property, plant and equipment (including equipment under capital lease) are stated at cost. Depreciation ($4,329,136 in 2018, $3,948,728 in 2017) is computed generally using the straight-line method based on the following estimated useful lives of the assets: Buildings 10 to 39.5 years; Machinery and equipment 3 to 10 years. |
Goodwill | Goodwill The Company performed qualitative assessments of goodwill as of the end of fiscal 2018 and fiscal 2017 and determined it is more likely than not that no impairment of goodwill existed at the end of 2018 or 2017. The Company will perform annual qualitative assessments in subsequent years as of the end of each fiscal year. Additionally, the Company will perform interim analysis whenever conditions warrant. Goodwill would be considered impaired whenever the historical carrying amount exceeds the fair value. Pursuant to the qualitative assessment performed, goodwill was not impaired in 2018 or 2017. Should we reach a different conclusion in the future, additional work would be performed to determine the amount of the non-cash impairment charge to be recognized. The maximum future impairment of goodwill that could occur is the amount recognized on our balance sheet. |
Intangible Assets | Intangible Assets Patents are recorded at cost and are amortized using the straight-line method over the lives of the patents. Technology and licenses are recorded at cost and are generally amortized on a straight-line basis over periods ranging from 5 to 17 years. Generally, non-compete agreements and customer relationships are being amortized using the straight-line method over a period of 5 years. Amortization expense in 2018 and 2017 was $1,452,084 and $770,457, respectively. In the event that facts and circumstances indicate that the carrying value of the intangible assets, including definite life intangible assets, may be impaired, an evaluation is performed to determine if a write-down is required. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. The Company's financial instruments are primarily investments in pension assets, see footnote 11, and consists of an interest rate swap. 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. The carrying amounts of other financial instruments (cash and cash equivalents, accounts receivable, accounts payable and debt) as of December 29, 2018 and December 30, 2017, approximate fair value based on the expected future cash flows of the related instruments. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606 when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company generates wholesale revenues primarily from the sale of products to original equipment manufacturers and distributers in the United States. The Company recognizes revenue upon shipment or transfer of title to the customer as that is when the customer obtains control of the promised goods. The Company typically extends credit terms to its customers based on their creditworthiness and generally does not receive advance payments. As such, the Company records accounts receivable at the time of shipment, when the Company's right to the consideration becomes unconditional. Accounts receivable from the Company's customers are typically due within 30 days of invoicing. An allowance for doubtful accounts is provided based on a periodic analysis of individual account balances, including an evaluation of days outstanding, payment history, recent payment trends and the Company's assessment of the customer's credit worthiness. As of December 29, 2018 and December 30, 2017, the Company's allowance for doubtful accounts total was $680,000 and $470,000, respectively. As of December 29, 2018 and December 30, 2017, the Company's bad debt expense was $220,000 and $87,000, respectively. The Company considers several factors in determining that control transfers to the customer upon shipment of products. These factors include that legal title transfers to the customer, the Company has a present right to payment, and the customer has assumed the risk and rewards of ownership at the time of shipment. Based on historical experience, the Company does not accrue a reserve for product returns. For the years ended December 29, 2018 and December 30, 2017, the Company recorded sales returns of $725,000 and $565,000, respectively, as a reduction of revenue. Greenwald Industries generates subscription services revenue from access provided to customers to the division's specific online databases. For the years ended December 29, 2018 and December 30, 2017, Greenwald Industries subscription services revenue was $448,000 and $317,000, respectively. Sales and similar taxes that are imposed on the Company's sales and collected from the customer are excluded from revenues. Costs for shipping and handling activities, including those activities that occur subsequent to transfer of control to the customer, are recorded as cost of sales and are expensed as incurred. The Company does not have any significant deferred revenue. For the years ended December 29, 2018 and December 30, 2017, the Company recorded no revenues related to performance obligations satisfied in prior periods. As part of the Company's adoption of the new revenue standard, the Company has elected to use the practical expedient to exclude disclosure of transaction prices allocated to remaining performance obligations, and when the Company expects to recognize such revenue, for all periods prior to the date of initial application of the standard. Subscription services revenue from remaining performance obligations as of December 29, 2018 was $0.1 million. No one customer accounted for 10% of net sales during 2018 or 2017. See footnote 13 regarding the Company's revenue disaggregated by reporting segment, intersegment sales by reporting segment and geography. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold reflects the cost of purchasing, manufacturing and preparing a product for sale. These costs generally represent the expenses to acquire or manufacture products for sale (including an allocation of depreciation and amortization) and are primarily comprised of direct materials, direct labor, and overhead, which includes indirect labor, facility and equipment costs, inbound freight, receiving, inspection, purchasing, warehousing and any other costs related to the purchasing, manufacturing or preparation of a product for sale. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included in cost of goods sold. |
Product Development Costs | Product Development Costs Product development costs, charged to expense as incurred, were $6,950,969 in 2018, $5,622,829 in 2017. |
Selling and Administrative Expenses | Selling and Administrative Expenses Selling and administrative expenses include all operating costs of the Company that are not directly related to the cost of purchasing, manufacturing and preparing a product for sale. These expenses generally represent administrative expenses for support functions and related overhead. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising costs were $501,615 in 2018, $526,651 in 2017. |
Software Development Costs | Software Development Costs Software development costs, are primarily costs to develop software sold, leased, or otherwise marketed, that are incurred subsequent to the establishment of technological feasibility are capitalized if significant. Capitalized software development costs are amortized using the straight-line amortization method over the estimated useful life of the applicable software. For the year ended December 29, 2018 capitalized software development costs were $1,813,973. There were no capitalized software development costs in the 2017. |
Stock Based Compensation | 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. For the year ended December 29, 2018, there were 51,000 SARs granted under the 2010 Plan. Under the terms of the Director's Fee Program, the directors can elect to receive their Director's fees in cash or in common shares of the Company. This election is made at the beginning of each fiscal year and remains in effect for the entire year. |
Income Taxes | Income Taxes The Company and its U.S. subsidiaries file a consolidated federal income tax return. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. On December, 22, 2017, SAB 118 was issued due to the complexities involved in accounting for the enacted Tax Act. SAB 118 requires the company to include in its financial statements a reasonable estimate of the impact of the Tax Act on earnings to the extent such estimate has been determined. Accordingly, the U.S. provision for income tax for 2017 was based on the reasonable estimate guidance provided by SAB 118. The company has assessed the impact from the Tax Act and recorded the impact in the fourth quarter of 2018. The Company accounts for uncertain tax positions pursuant to the provisions of FASB Accounting Standards Codification ("ASC") 740 which clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements. These provisions detail how companies should recognize, measure, present and disclose uncertain tax positions that have or are expected to be taken. As such, the financial statements will reflect expected future tax consequences of uncertain tax positions presuming the taxing authorities' full knowledge of the position and all relevant facts. See Note 7 Income Taxes. |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
BUSINESS ACQUISITIONS [Abstract] | |
Intangible Assets | In connection with the above acquisition, the Company recorded the following intangible assets: Asset Class/Description Amount Weighted-average Life in Years Patents, technology, and licenses Customer relationships $ 689,675 8.3 Intellectual property 586,762 8.3 Non-compete agreements 52,570 8.3 $ 1,329,007 8.3 |
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 at fair value 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 (2,860,946 ) Total identifiable net assets 24,807,054 Goodwill 17,340,946 $ 42,148,000 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
Goodwill [Abstract] | |
Roll-forward of Goodwill | The following is a roll-forward of goodwill for 2018 and 2017: Industrial Security Metal 2018 Beginning balance $ 19,169,849 $ 13,059,042 $ — $ 32,228,891 Investment in Load N Lock — 2,694,700 — 2,694,700 Foreign exchange (83,215 ) — — (83,215 ) Ending balance $ 19,086,634 $ 15,753,742 $ — $ 34,840,376 Industrial Security Metal 2017 Beginning balance $ 1,760,793 $ 13,059,042 $ — $ 14,819,835 Investment in Velvac 17,340,946 — — 17,340,946 Foreign exchange 68,110 — — 68,110 Ending balance $ 19,169,849 $ 13,059,042 $ — $ 32,228,891 |
INTANGIBLES (Tables)
INTANGIBLES (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
INTANGIBLES [Abstract] | |
Gross Carrying Amount and Accumulated Amortization of Amortizable Intangible Assets | Weighted-Average 2018 Gross Amount Patents and developed technology $ 7,884,498 $ 1,648,731 $ — $ 9,533,229 10.2 Customer relationships 3,650,000 1,139,381 — 4,789,381 8.1 Non-compete agreements — 459,570 — 459,570 4.4 Intellectual property — 307,370 — 307,370 5.0 Total Gross Intangibles $ 11,534,498 $ 3,555,052 $ — $ 15,089,550 9.2 2018 Accumulated Amortization Patents and developed technology $ 2,448,380 $ 737,276 $ — $ 3,185,656 Customer relationships 638,750 408,233 — 1,046,983 Non-compete agreements — 329,296 — 329,296 Intellectual property — 245,895 — 245,895 Accumulated Amortization $ 3,087,130 $ 1,720,700 $ — $ 4,807,830 Net 2018 per Balance Sheet $ 8,447,368 $ 1,834,352 $ — $ 10,281,720 2017 Gross Amount Patents and developed technology $ 7,074,456 $ 1,021,918 $ — $ 8,096,374 12.3 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 $ 10,724,456 $ 2,185,994 $ — $ 12,910,450 10.8 Weighted-Average 2017 Accumulated Amortization Patents and developed technology $ 2,007,418 $ 630,784 $ — $ 2,638,202 Customer relationships 298,645 269,823 — 568,468 Non-compete agreements — 244,200 — 244,200 Intellectual property — 184,422 — 184,422 Accumulated Amortization $ 2,306,063 $ 1,329,229 $ — $ 3,635,292 Net 2017 per Balance Sheet $ 8,418,393 $ 856,765 $ — $ 9,275,158 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
DEBT [Abstract] | |
Debt | Debt consists of: 2018 2017 Term loans $ 28,675,000 $ 30,225,000 Revolving credit loan — 5,000,000 28,675,000 35,225,000 Less current portion 2,325,000 6,550,000 $ 26,350,000 $ 28,675,000 |
Annual Principal Maturities of Long-Term Debt | As of December 29, 2018, scheduled annual principal maturities of long-term debt for each of the next five years follow: 2019 $ 2,325,000 2020 3,100,000 2021 3,100,000 2022 20,150,000 Thereafter — $ 28,675,000 |
STOCK OPTIONS AND AWARDS (Table
STOCK OPTIONS AND AWARDS (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
STOCK OPTIONS AND AWARDS [Abstract] | |
Stock Appreciation Rights Activity | The following tables set forth the outstanding SARs for the period specified: Year Ended December 29, 2018 Year Ended December 30, 2017 Units Weighted - Average Exercise Price Units Weighted - Average Exercise Price Outstanding at beginning of period 141,500 $ 20.36 — $ — Issued 51,000 24.90 149,500 20.39 Forfeited (3,333 ) 19.10 (8,000 ) 21.10 Outstanding at end of period 189,167 21.46 141,500 20.36 |
SARs Outstanding and Exercisable | SARs Outstanding and Exercisable Range of Exercise Prices Outstanding as of December 29, 2018 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of December 29, 2018 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $ 19.10-24.90 189,167 3.5 $ 21.46 19,670 3.3 19.10 |
Stock Option Activity | The following tables set forth the outstanding stock grants for the period specified: Year Ended December 29, 2018 Year Ended December 30, 2017 Shares Weighted - Average Exercise Price Shares Weighted - Average Exercise Price Outstanding at beginning of period 25,000 $ — — $ — Issued — — 25,000 — Forfeited — — — — Outstanding at end of period 25,000 — 25,000 — |
Stock Grants Outstanding and Exercisable | Stock Grants Outstanding and Exercisable Range of Exercise Prices Outstanding as of December 30, 2017 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of December 29, 2018 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $ 0.00 25,000 3.3 — — — — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
Income Taxes [Abstract] | |
Deferred Income Tax (Assets) Liabilities | Deferred income tax (assets) liabilities relate to: 2018 2017 Property, plant and equipment $ 2,582,792 $ 3,853,837 Intangible assets 4,710,052 2,620,791 Other 218,710 64,905 Foreign Withholding Tax 540,761 861,964 Total deferred income tax liabilities 8,052,315 7,401,497 Other postretirement benefits (156,710 ) (235,510 ) Inventories (1,133,427 ) (792,724 ) Allowance for doubtful accounts (146,576 ) (97,570 ) Accrued compensation (200,232 ) (83,829 ) Pensions (6,127,538 ) (6,029,034 ) Foreign Tax Credit (167,826 ) (449,578 ) Total deferred income tax assets (7,932,309 ) (7,688,245 ) Net deferred income tax (assets) liabilities $ 120,006 $ (286,748 ) |
Income Before Income Taxes | Income before income taxes consists of: 2018 2017 Domestic $ 12,431,889 $ 7,513,348 Foreign 5,158,440 3,941,594 $ 17,590,329 $ 11,454,942 |
Provision for Income Taxes | The provision for income taxes follows: 2018 2017 Current: Federal $ 484,451 $ 3,713,975 Foreign 753,521 1,084,353 State 347,199 319,439 Deferred: Federal 815,858 (47,241 ) Foreign 153,726 1,301,972 State 529,637 (37,189 ) $ 3,084,392 $ 6,409,687 |
Reconciliation of Income Taxes Computed Using the U.S. Federal Statutory Rate to that Reflected in Operations | A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows: 2018 2017 Amount Percent Amount Percent Income taxes using U.S. federal statutory rate $ 3,693,968 21 % $ 3,894,680 34 % State income taxes, net of federal benefit 692,698 4 264,205 2 Impact on Foreign Repatriation Tax Reform (83,479 ) (1 ) 2,034,065 18 Impact of foreign subsidiaries on effective tax rate (401,992 ) (2 ) (364,569 ) (3 ) Impact of New Tax Law (507,847 ) (2 ) 531,307 5 Impact of Research & Development tax credit (216,675 ) (1 ) (60,630 ) (1 ) Impact of manufacturers deduction on effective tax rate 0 0 (123,554 ) (1 ) Other—net (92,281 ) (1 ) 234,183 2 3,084,392 18 % 6,409,687 56 % |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows: 2018 2017 Balance at beginning of year $ 299,734 $ 251,839 Increases for positions taken during the current period 74,219 53,013 Decreases resulting from the expiration of the statute of limitations (74,231 ) (5,118 ) Balance at end of year $ 299,722 $ 299,734 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
LEASES [Abstract] | |
Future Minimum Payments Under Non-Cancelable Operating Leases | Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year during each of the next five years follow: 2019 $ 2,489,016 2020 1,928,877 2021 1,120,898 2022 304,704 2023 550 $ 5,844,045 |
RETIREMENT BENEFIT PLANS (Table
RETIREMENT BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |
Funded Status of Pension Benefit Plans and Postretirement Benefit Plan | As of December 29, 2018 and December 30, 2017, the status of the Company's pension benefit plans and other postretirement benefit plan was as follows: Pension Benefit Other Postretirement Benefit 2018 2017 2018 2017 Benefit obligation at beginning of year $ 98,522,201 $ 92,258,937 $ 2,423,410 $ 2,339,050 Change due to availability of final actual assets and census data — — — — Change in discount rate (8,319,874 ) 6,200,491 (217,539 ) 181,691 Service cost 1,319,841 1,276,608 37,024 27,389 Interest cost 3,107,164 3,170,194 77,161 80,827 Actuarial (gain)/loss 531,799 (1,495,135 ) (89,664 ) (65,601 ) Benefits paid (3,627,931 ) (3,385,793 ) (133,631 ) (139,946 ) Plan Amendment — 496,899 — — Benefit obligation at end of year $ 91,533,200 $ 98,522,201 $ 2,096,761 $ 2,423,410 2018 2017 2018 2017 Fair value of plan assets at beginning of year $ 72,098,772 $ 65,627,499 $ 1,391,239 $ 1,287,350 Actual return on plan assets (4,827,641 ) 9,315,225 56,887 103,889 Employer contributions 2,527,675 541,841 133,631 139,946 Benefits paid (3,627,931 ) (3,385,793 ) (133,631 ) (139,946 ) Fair value of plan assets at end of year $ 66,170,875 $ 72,098,772 $ 1,448,126 $ 1,391,239 Pension Benefit Other Postretirement Benefit Funded Status 2018 2017 2018 2017 Net amount recognized in the balance sheet $ (25,362,325 ) $ (26,423,429 ) $ (648,635 ) $ (1,032,171 ) |
Amounts Recognized in Accumulated Other Comprehensive Income | Amounts recognized in accumulated other comprehensive income consist of: Pension Benefit Other Postretirement Benefit 2018 2017 2018 2017 Net (loss)/gain $ (33,714,584 ) $ (32,565,614 ) $ 1,332,634 $ 1,089,785 Prior service (cost) credit (364,392 ) (494,142 ) 13,325 18,397 $ (34,078,976 ) $ (33,059,756 ) $ 1,345,959 $ 1,108,182 |
Change in the Components of Accumulated Other Comprehensive income | Change in the components of accumulated other comprehensive income consist of: Pension Benefit Other Postretirement Benefit 2018 2017 2018 2017 Balance at beginning of period $ (33,059,756 ) $ (33,799,555 ) $ 1,108,182 $ 1,270,922 Change due to availability of final actual assets and census data — --- — — Charged to net periodic benefit cost Prior service cost 114,822 178,874 (5,072 ) (21,444 ) Net loss (gain) 1,110,111 1,231,486 (65,591 ) (77,601 ) Liability (gains)/losses Discount rate 8,319,874 (6,200,491 ) 217,539 (181,691 ) Asset (gains)/losses deferred (9,531,647 ) 5,978,071 1,237 52,395 Additional recognition due to plan amendment 14,928 (496,899 ) — — Other (1,047,308 ) 48,758 89,664 65,601 Balance at end of period $ (34,078,976 ) $ (33,059,756 ) $ 1,345,959 $ 1,108,182 |
Assumptions Used to Determine Projected Benefit Obligations for Benefit Plans | Assumptions used to determine the projected benefit obligations for the Company's pension benefit plans and other postretirement benefit plan for the fiscal year indicated were as follows: 2018 2017 Discount rate - Pension plans 4.20% - 4.22 % 3.54% - 3.57 % - Supplemental pension plans 3.81 % 3.10 % - Other postretirement plan 4.26 % 3.60 % |
Projected Benefit Obligation and Accumulated Benefit Obligation in Excess of Plan Assets | Information for the under-funded pension plans with a projected benefit obligation and an accumulated benefit obligation in excess of plan assets: 2018 2017 Number of plans 5 6 Projected benefit obligation $ 91,533,200 $ 98,522,201 Accumulated benefit obligation 91,533,200 98,522,201 Fair value of plan assets 66,170,875 72,098,722 Net amount recognized in accrued benefit liability (25,362,325 ) (26,423,429 ) |
Defined Contribution Plan | The Company made contributions to the plan as follows: 2018 2017 Regular matching contributions $ 551,046 $ 465,671 Transitional credit contributions 349,062 385,578 Non-discretionary contributions 578,373 355,747 Total contributions made for the period $ 1,478,481 $ 1,206,996 |
Pension Benefit [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |
Components of Net Periodic Benefit Cost | Components of the net periodic benefit cost of the Company's pension benefit plans for the fiscal year indicated were as follows: 2018 2017 Service cost $ 1,319,841 $ 1,276,608 Interest cost 3,107,164 3,170,194 Expected return on plan assets (5,219,515 ) (4,783,531 ) Amortization of prior service cost 114,822 178,874 Amortization of the net loss 1,110,111 1,231,486 Net periodic benefit cost $ 432,423 $ 1,073,631 |
Assumptions Used to Determine Net Periodic Benefit Cost for Benefit Plans | Assumptions used to determine net periodic benefit cost for the Company's pension benefit plans for the fiscal year indicated were as follows: 2018 2017 Discount rate - Pension plans 3.54% - 3.57 % 4.04% - 4.08 % - Supplemental pension plans 3.10 % 3.03 % Expected return on plan assets 7.5 % 7.5 % Rate of compensation increase 0 % 0 % |
Fair Values of Plans Assets Utilizing Fair Value Hierarchy | The fair values of the company's pension plans assets at December 29, 2018 and December 30, 2017, utilizing the fair value hierarchy discussed in Note 2, follow: December 29, 2018 Level 1 Level 2 Level 3 Total Cash and Equivalents: Common/collective trust funds $ — $ 306,882 $ — $ 306,882 Equities: The Eastern Company Common Stock 5,247,495 — 5,247,495 Common/collective trust funds Russell Multi Asset Core Plus Fund (a) — 30,611,519 — 30,611,519 Fixed Income: Common/collective trust funds Target Duration LDI Fixed Income Funds (b) ● Russell 8 Year LDI Fixed Income Fund — 5,735,993 — 5,735,993 ● Russell 14 Year LDI Fixed Income Fund — 17,044,596 — 17,044,596 STRIPS Fixed Income Funds (c) ● Russell 15 Year STRIPS Fixed Income Fund — 1,811,436 — 1,811,436 ● Russell 10 Year STRIPS Fixed Income Fund — 3,408,879 — 3,408,879 ● Russell 28 to 29 Year STRIPS Fixed Income Fund — 2,004,075 — 2,004,075 Total $ 5,247,495 $ 60,923,380 $ — $ 66,170,875 December 30, 2017 Level 1 Level 2 Level 3 Total Cash and Equivalents: Common/collective trust funds $ — $ 278,016 $ — $ 278,016 Equities: The Eastern Company Common Stock 5,675,021 — 5,675,021 Common/collective trust funds Russell Multi Asset Core Plus Fund (a) — 31,642,838 — 31,642,838 Fixed Income: Common/collective trust funds Target Duration LDI Fixed Income Funds (b) ● Russell 8 Year LDI Fixed Income Fund — 6,033,648 — 6,033,648 ● Russell 14 Year LDI Fixed Income Fund — 18,083,206 — 18,083,206 STRIPS Fixed Income Funds (c) ● Russell 15 Year STRIPS Fixed Income Fund — 1,905,068 — 1,905,068 ● Russell 10 Year STRIPS Fixed Income Fund — 3,570,427 — 3,570,427 ● Russell 28 to 29 Year STRIPS Fixed Income Fund — 2,144,581 — 2,144,581 Insurance contracts — 2,765,967 — 2,765,967 Total $ 5,675,021 $ 66,423,751 $ — $ 72,098,772 Equity common funds primarily hold publicly traded common stock of both U.S and international companies selected for purposes of total return and to maintain equity exposure consistent with policy allocations. The Level 1 investment is made up of shares of The Eastern Company Common Stock and is valued at market price. Level 2 investments include commingled funds valued at unit values provided by the investment managers, which are based on the fair value of the underlying publicly traded securities. (a) The investment objective of the RITC (formerly Russell) Multi-Asset Core Plus Fund seeks to provide long-term growth of capital over a market cycle by offering a diversified portfolio of funds and separate accounts investing in global stock, return seeking fixed income, commodities, global real estate and opportunistic investments. They hold a dynamic mix of underlying Russell Investments funds and/or separate accounts. Russell Investments is a strong proponent of disciplined strategic asset allocation and rebalancing strategies, and believes that unstable movements in the market have the potential to create opportunities. By identifying short-term mispricing, and making small tactical adjustments to the Multi-Asset Core Plus Fund, they believe there is potential to enhance returns while continuing to manage risks. (b) The Target Duration LDI Fixed Income Funds seek to outperform their respective Barclays-Russell LDI Indexes over a full market cycle. These Funds invest primarily in investment grade corporate bonds that closely match those found in discount curves used to value U.S. pension liabilities. They seek to provide additional incremental return through modest interest rate timing, security selection and tactical use of non-credit sectors. Generally for use in combination with other bond funds to gain additional credit exposure, with the goal of reducing the mismatch between a plan's assets and liabilities. (c) The STRIPS (Separate Trading of Registered Interest and Principal of Securities) Funds seek to provide duration and Treasury exposure by investing in an optimized subset of the STRIPS universe with a similar duration profile as the Barclays U.S. Treasury STRIPS 10-11 year, 16-16 year or 28-29 year Index. These passively managed funds are generally used with other bond funds to add additional duration to the asset portfolio. This will help reduce the mismatch between a plan's assets and liabilities. |
Other Postretirement Benefit [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |
Components of Net Periodic Benefit Cost | Components of the net periodic benefit cost of the Company's other postretirement benefit plan were as follows: 2018 2017 Service cost $ 37,024 $ 27,389 Interest cost 77,161 80,827 Expected return on plan assets (55,650 ) (51,494 ) Amortization of prior service cost (5,072 ) (21,444 ) Amortization of the net loss (65,591 ) (77,601 ) Net periodic benefit cost $ (12,128 ) $ (42,323 ) |
Assumptions Used to Determine Net Periodic Benefit Cost for Benefit Plans | Assumptions used to determine net periodic benefit cost for the Company's other postretirement plan for the fiscal year indicated were as follows: 2018 2017 Discount rate 3.60 % 4.12 % Expected return on plan assets 4.0 % 4.0 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
EARNINGS PER SHARE [Abstract] | |
Denominators Used in the Earnings Per Share Computations | The denominators used in the earnings per share computations follow: 2018 2017 Basic: Weighted average shares outstanding 6,258,277 6,259,139 Diluted: Weighted average shares outstanding 6,258,277 6,259,139 Dilutive stock options 15,697 35,634 Denominator for diluted earnings per share 6,273,974 6,294,773 |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
REPORTABLE SEGMENTS [Abstract] | |
Segment Financial Information | 2018 2017 Sales: Sales to unaffiliated customers: Industrial Hardware $ 140,293,409 $ 115,273,233 Security Products 64,897,871 60,976,998 Metal Products 29,084,183 27,989,382 $ 234,275,463 $ 204,239,613 Inter-segment Sales: Industrial Hardware $ 366,381 $ 524,536 Security Products 3,365,695 2,935,797 Metal Products 13,421 21,431 $ 3,745,497 $ 3,481,764 Income Before Income Taxes: Industrial Hardware $ 9,588,185 $ 5,042,687 Security Products 7,122,640 6,020,847 Metal Products 1,148,516 1,019,224 Operating Profit 17,859,341 12,082,758 Interest expense (1,202,272 ) (976,512 ) Other income 933,260 348,696 $ 17,590,329 $ 11,454,942 Geographic Information: Net Sales: United States $ 207,789,058 $ 178,124,818 Foreign 26,486,405 26,114,795 $ 234,275,463 $ 204,239,613 Foreign sales are primarily to customers in North America. Identifiable Assets: United States $ 166,665,767 $ 153,712,643 Foreign 14,581,800 22,745,754 $ 181,247,567 $ 176,458,397 Industrial Hardware $ 47,600,805 $ 44,828,458 Security Products 54,593,837 53,724,837 Metal Products 19,909,256 18,126,395 122,103,898 116,679,690 General corporate 59,143,669 59,778,707 $ 181,247,567 $ 176,458,397 2018 2017 Depreciation and Amortization: Industrial Hardware $ 2,978,324 $ 2,526,460 Security Products 1,135,811 964,873 Metal Products 1,215,073 1,227,852 $ 5,329,208 $ 4,719,185 Capital Expenditures: Industrial Hardware $ 3,029,406 $ 1,151,868 Security Products 1,482,267 705,178 Metal Products 901,400 899,663 5,413,073 2,756,709 Currency translation adjustment (9,014 ) 6,240 General corporate 6,486 — $ 5,410,545 $ 2,762,949 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | 12 Months Ended |
Dec. 29, 2018DivisionSubsidiarySegment | |
Description of Business Information [Abstract] | |
Number of operating segments | Segment | 3 |
United States [Member] | |
Description of Business Information [Abstract] | |
Number of separate operating divisions | Division | 8 |
Canada [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 2 |
Tillsonburg, Ontario, Canada [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 1 |
Kelowna, British Columbia, Canada [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 1 |
Taipei, Taiwan [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 1 |
Hong Kong [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 1 |
China [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 2 |
Shanghai, China [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 1 |
Dongguan, China [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 1 |
Mexico [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 2 |
Lerma, Mexico [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 1 |
Reynosa, Mexico [Member] | |
Description of Business Information [Abstract] | |
Number of wholly-owned subsidiaries | 1 |
ACCOUNTING POLICIES, Reclassifi
ACCOUNTING POLICIES, Reclassification, Cash Equivalents, Accounts Receivable and Inventories (Details) | 12 Months Ended | |
Dec. 29, 2018USD ($)Customer | Dec. 30, 2017USD ($)Customer | |
Reclassification [Abstract] | ||
Gains on pensions assets reclassified from cost of goods sold to other income | $ 193,943 | |
Cash Equivalents [Abstract] | ||
Amount of deposits insured by Federal Deposit Insurance Corporation (FDIC) | $ 250,000 | |
Percentage of available cash located in foreign subsidiaries | 60.00% | |
Inventories [Abstract] | ||
LIFO inventory amount | $ 30,151,679 | |
FIFO inventory amount | 8,175,339 | |
Excess of current cost over LIFO carrying value | $ 6,957,972 | $ 6,476,073 |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||
Accounts Receivable, Net [Abstract] | ||
Number of major customers | Customer | 0 | 0 |
Threshold percentage of concentration risk | 10.00% | 10.00% |
ACCOUNTING POLICIES, Property,
ACCOUNTING POLICIES, Property, Plant and Equipment and Related Depreciation (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Property, Plant and Equipment and Related Depreciation [Abstract] | ||
Depreciation | $ 4,329,136 | $ 3,948,728 |
Building [Member] | Minimum [Member] | ||
Property, Plant and Equipment and Related Depreciation [Abstract] | ||
Estimated useful lives of the assets | 10 years | |
Building [Member] | Maximum [Member] | ||
Property, Plant and Equipment and Related Depreciation [Abstract] | ||
Estimated useful lives of the assets | 39 years 6 months | |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment and Related Depreciation [Abstract] | ||
Estimated useful lives of the assets | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment and Related Depreciation [Abstract] | ||
Estimated useful lives of the assets | 10 years |
ACCOUNTING POLICIES, Goodwill (
ACCOUNTING POLICIES, Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Goodwill [Abstract] | ||
Impairment of goodwill | $ 0 | $ 0 |
ACCOUNTING POLICIES, Intangible
ACCOUNTING POLICIES, Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Intangibles Assets [Abstract] | ||
Amortization expense | $ 1,452,084 | $ 770,457 |
Technology and Licenses [Member] | Minimum [Member] | ||
Intangibles Assets [Abstract] | ||
Useful lives of intangible assets | 5 years | |
Technology and Licenses [Member] | Maximum [Member] | ||
Intangibles Assets [Abstract] | ||
Useful lives of intangible assets | 17 years | |
Non-Compete Agreements [Member] | ||
Intangibles Assets [Abstract] | ||
Useful lives of intangible assets | 5 years | |
Customer Relationships [Member] | ||
Intangibles Assets [Abstract] | ||
Useful lives of intangible assets | 5 years |
ACCOUNTING POLICIES, Revenue Re
ACCOUNTING POLICIES, Revenue Recognition (Details) | 12 Months Ended | |
Dec. 29, 2018USD ($)Customer | Dec. 30, 2017USD ($)Customer | |
Revenue Recognition [Abstract] | ||
Accounts receivable, customers due period | 30 days | |
Accounts receivable, allowance for doubtful accounts | $ 680,000 | $ 470,000 |
Bad debt expense | 220,000 | 87,000 |
Sales returns | 725,000 | 565,000 |
Revenue [Abstract] | ||
Net sales | $ 234,275,463 | $ 204,239,613 |
Net Sales [Member] | Customer Concentration Risk [Member] | ||
Revenue [Abstract] | ||
Number of major customers | Customer | 0 | 0 |
Threshold percentage of concentration risk | 10.00% | 10.00% |
Subscription [Member] | ||
Revenue [Abstract] | ||
Net sales | $ 448,000 | $ 317,000 |
Subscription services revenue related to performance obligations satisfied in prior periods | 0 | $ 0 |
Remaining performance obligations, revenue recognized | $ 100,000 |
ACCOUNTING POLICIES, Product De
ACCOUNTING POLICIES, Product Development Costs, Advertising Costs and Software Development Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Product Development Costs [Abstract] | ||
Product development expenses | $ 6,950,969 | $ 5,622,829 |
Advertising Costs [Abstract] | ||
Advertising costs | 501,615 | 526,651 |
Software Development Costs [Abstract] | ||
Capitalized software | $ 1,813,973 | $ 0 |
ACCOUNTING POLICIES, Stock Base
ACCOUNTING POLICIES, Stock Based Compensation (Details) - shares | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Stock Appreciation Rights (SARs) [Member] | ||
Stock Based Compensation [Abstract] | ||
Options granted (in shares) | 51,000 | 149,500 |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) - USD ($) | Jun. 01, 2018 | Apr. 03, 2017 | Jun. 30, 2018 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 |
Recognized amounts of identifiable assets acquired and liabilities assumed [Abstract] | ||||||
Goodwill | $ 34,840,376 | $ 32,228,891 | $ 14,819,835 | |||
Acquisition expenses | $ 863,000 | |||||
Load N Lock [Member] | ||||||
Acquisitions [Abstract] | ||||||
Purchase price of acquisition | $ 4,995,000 | |||||
Intangible Assets Acquired [Abstract] | ||||||
Intangible assets | $ 1,329,007 | |||||
Weighted-average life | 8 years 3 months 18 days | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed [Abstract] | ||||||
Goodwill | $ 2,694,700 | |||||
Load N Lock [Member] | Customer Relationships [Member] | ||||||
Intangible Assets Acquired [Abstract] | ||||||
Intangible assets | $ 689,675 | |||||
Weighted-average life | 8 years 3 months 18 days | |||||
Load N Lock [Member] | Intellectual Property [Member] | ||||||
Intangible Assets Acquired [Abstract] | ||||||
Intangible assets | $ 586,762 | |||||
Weighted-average life | 8 years 3 months 18 days | |||||
Load N Lock [Member] | Non-compete Agreements [Member] | ||||||
Intangible Assets Acquired [Abstract] | ||||||
Intangible assets | $ 52,570 | |||||
Weighted-average life | 8 years 3 months 18 days | |||||
Velvac Holdings, Inc [Member] | ||||||
Acquisitions [Abstract] | ||||||
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 | (2,860,946) | |||||
Total identifiable net assets | 24,807,054 | |||||
Goodwill | 17,340,946 | |||||
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 | 1,187,668 | |||||
Estimated fair value of inventories acquired, original cost basis | $ 11,804,709 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 32,228,891 | $ 14,819,835 |
Investment | 2,694,700 | 17,340,946 |
Foreign exchange | (83,215) | 68,110 |
Ending balance | 34,840,376 | 32,228,891 |
Industrial Hardware Segment [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 19,169,849 | 1,760,793 |
Investment | 0 | 17,340,946 |
Foreign exchange | (83,215) | 68,110 |
Ending balance | 19,086,634 | 19,169,849 |
Security Products Segment [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 13,059,042 | 13,059,042 |
Investment | 2,694,700 | 0 |
Foreign exchange | 0 | 0 |
Ending balance | 15,753,742 | 13,059,042 |
Metal Products Segment [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 0 | 0 |
Investment | 0 | 0 |
Foreign exchange | 0 | 0 |
Ending balance | $ 0 | $ 0 |
INTANGIBLES (Details)
INTANGIBLES (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Amortization expense fiscal year maturity [Abstract] | ||
2019 | $ 1,211,000 | |
2020 | 958,000 | |
2021 | 937,000 | |
2022 | 931,000 | |
2023 | 987,000 | |
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | 15,089,550 | $ 12,910,450 |
Accumulated Amortization | 4,807,830 | 3,635,292 |
Net per Balance Sheet | $ 10,281,720 | $ 9,275,158 |
Weighted-Average Amortization Period | 9 years 2 months 12 days | 10 years 9 months 18 days |
Industrial Hardware Segment [Member] | ||
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | $ 11,534,498 | $ 10,724,456 |
Accumulated Amortization | 3,087,130 | 2,306,063 |
Net per Balance Sheet | 8,447,368 | 8,418,393 |
Security Products Segment [Member] | ||
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | 3,555,052 | 2,185,994 |
Accumulated Amortization | 1,720,700 | 1,329,229 |
Net per Balance Sheet | 1,834,352 | 856,765 |
Metal Products Segment [Member] | ||
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | 0 | 0 |
Accumulated Amortization | 0 | 0 |
Net per Balance Sheet | 0 | 0 |
Patents and Developed Technology [Member] | ||
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | 9,533,229 | 8,096,374 |
Accumulated Amortization | $ 3,185,656 | $ 2,638,202 |
Weighted-Average Amortization Period | 10 years 2 months 12 days | 12 years 3 months 18 days |
Patents and Developed Technology [Member] | Industrial Hardware Segment [Member] | ||
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | $ 7,884,498 | $ 7,074,456 |
Accumulated Amortization | 2,448,380 | 2,007,418 |
Patents and Developed Technology [Member] | Security Products Segment [Member] | ||
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | 1,648,731 | 1,021,918 |
Accumulated Amortization | 737,276 | 630,784 |
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 | 4,789,381 | 4,099,706 |
Accumulated Amortization | $ 1,046,983 | $ 568,468 |
Weighted-Average Amortization Period | 8 years 1 month 6 days | 9 years 6 months |
Customer Relationships [Member] | Industrial Hardware Segment [Member] | ||
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | $ 3,650,000 | $ 3,650,000 |
Accumulated Amortization | 638,750 | 298,645 |
Customer Relationships [Member] | Security Products Segment [Member] | ||
Gross carrying amount and accumulated amortization of amortizable intangible assets [Abstract] | ||
Gross Amount | 1,139,381 | 449,706 |
Accumulated Amortization | 408,233 | 269,823 |
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 | 459,570 | 407,000 |
Accumulated Amortization | $ 329,296 | $ 244,200 |
Weighted-Average Amortization Period | 4 years 4 months 24 days | 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 | 459,570 | 407,000 |
Accumulated Amortization | 329,296 | 244,200 |
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 | $ 245,895 | $ 184,422 |
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 | 245,895 | 184,422 |
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 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 21 Months Ended | |
Mar. 31, 2018 | Dec. 30, 2017 | Dec. 31, 2018 | Dec. 29, 2018 | |
Contingency Information [Abstract] | ||||
Remediation costs accrual | $ 50,000 | |||
Cost to remediate and monitor the landfill | $ 50,000 | $ 380,000 | $ 430,000 |
DEBT (Details)
DEBT (Details) - USD ($) | Apr. 04, 2017 | Apr. 03, 2017 | Sep. 30, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | Jun. 30, 2019 |
Disclosure of Debt [Abstract] | ||||||
Payments on revolving credit note | $ (12,000,000) | $ (1,614,611) | ||||
Schedule of debt [Abstract] | ||||||
Term loans | 28,675,000 | 30,225,000 | ||||
Revolving credit loan | 0 | 5,000,000 | ||||
Long term debt | 28,675,000 | 35,225,000 | ||||
Less current portion | 2,325,000 | 6,550,000 | ||||
Long term debt, less current portion | 26,350,000 | 28,675,000 | ||||
Interest paid | $ 1,202,272 | 977,399 | ||||
Velvac Holdings, Inc [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Percentage of common stock acquired | 100.00% | |||||
LIBOR [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Term of variable rate | 3 months | |||||
LIBOR [Member] | Minimum [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Basis spread on variable rate | 1.75% | |||||
LIBOR [Member] | Maximum [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Basis spread on variable rate | 2.50% | |||||
Restated Loan Agreement [Member] | Minimum [Member] | ||||||
Schedule of debt [Abstract] | ||||||
Fixed charge coverage ratio as multiple, 2018 | 1.1 | |||||
Fixed charge coverage ratio as multiple, thereafter | 1.2 | |||||
Restated Loan Agreement [Member] | Maximum [Member] | ||||||
Schedule of debt [Abstract] | ||||||
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 | |||||
Revolving Credit Loan [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Maximum borrowing capacity | $ 10,000,000 | |||||
Maturity date of loan | Apr. 1, 2022 | |||||
Payments on revolving credit note | $ (5,000,000) | (1,614,611) | ||||
Schedule of debt [Abstract] | ||||||
Revolving credit loan | $ 6,600,000 | $ 0 | $ 5,000,000 | |||
Revolving Credit Loan [Member] | Minimum [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Quarterly commitment fee percentage | 0.20% | |||||
Revolving Credit Loan [Member] | Maximum [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Quarterly commitment fee percentage | 0.375% | |||||
Revolving Credit Loan [Member] | LIBOR [Member] | Minimum [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Basis spread on variable rate | 1.75% | |||||
Revolving Credit Loan [Member] | LIBOR [Member] | Maximum [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Basis spread on variable rate | 2.50% | |||||
Term Loan [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Maximum borrowing capacity | $ 31,000,000 | |||||
Payments on term loan | $ (1,429,000) | |||||
Period for quarterly principal payment | 2 years | |||||
Term of loan | 5 years | |||||
Maturity date of loan | Mar. 1, 2022 | |||||
Term Loan [Member] | Forecast [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Quarterly principal payment | $ 775,000 | $ 387,500 | ||||
Term Loan [Member] | Interest Rate Swap [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Fixed rate of interest | 1.92% | |||||
Original notional amount | $ 15,500,000 | $ 14,337,500 | ||||
Percentage of outstanding balance of term loan | 50.00% | |||||
Term Loan [Member] | 1 Month LIBOR [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Fixed rate of interest | 4.10% | |||||
Term of variable rate | 1 month | |||||
Schedule of debt [Abstract] | ||||||
Revolving credit loan | $ 14,300,000 | |||||
Term Loan [Member] | 3 Month LIBOR [Member] | ||||||
Disclosure of Debt [Abstract] | ||||||
Fixed rate of interest | 4.15% | |||||
Term of variable rate | 3 months | |||||
Schedule of debt [Abstract] | ||||||
Revolving credit loan | $ 14,300,000 |
DEBT, Principal Maturities of D
DEBT, Principal Maturities of Debt (Details) - USD ($) | Dec. 29, 2018 | Dec. 30, 2017 |
Scheduled annual principal maturities of long-term debt [Abstract] | ||
2019 | $ 2,325,000 | |
2020 | 3,100,000 | |
2021 | 3,100,000 | |
2022 | 20,150,000 | |
Thereafter | 0 | |
Long term debt | $ 28,675,000 | $ 30,225,000 |
STOCK OPTIONS AND AWARDS (Detai
STOCK OPTIONS AND AWARDS (Details) | 12 Months Ended | |
Dec. 29, 2018USD ($)Plan$ / sharesshares | Dec. 30, 2017USD ($)$ / sharesshares | |
Stock Options [Abstract] | ||
Number of plans that have shares reserved for further issuance | Plan | 1 | |
Expected term | 3 years 6 months | 3 years 6 months |
Volatility deviation | 29.50% | 22.60% |
Risk free rate | 2.33% | 1.47% |
Minimum [Member] | ||
Stock Options [Abstract] | ||
Percentage of fair market value of stock on grant date for exercise price | 100.00% | |
Stock Appreciation Rights (SARs) [Member] | ||
Stock Options [Abstract] | ||
Stock-based compensation expense | $ | $ 276,778 | $ 172,806 |
Number of Units, Stock Appreciation Rights (SARs) [Roll Forward] | ||
Outstanding at beginning of period (in shares) | shares | 141,500 | 0 |
Issued (in shares) | shares | 51,000 | 149,500 |
Forfeited (in shares) | shares | (3,333) | (8,000) |
Outstanding at end of period (in shares) | shares | 189,167 | 141,500 |
Weighted - Average Exercise Price, Stock Appreciation Rights (SARs) [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 20.36 | $ 0 |
Issued (in dollars per share) | 24.90 | 20.39 |
Forfeited (in dollars per share) | 19.10 | 21.10 |
Outstanding at end of period (in dollars per share) | 21.46 | $ 20.36 |
SARs Grants Outstanding and Exercisable [Abstract] | ||
Minimum Range of Exercise Prices (in dollars per share) | 19.10 | |
Maximum Range of Exercise Prices (in dollars per share) | $ 24.90 | |
Outstanding (in shares) | shares | 189,167 | |
Weighted- Average Remaining Contractual Life | 3 years 6 months | |
Weighted- Average Exercise Price (in dollars per share) | $ 21.46 | |
Exercisable as of December 29, 2018 (in shares) | shares | 19,670 | |
Exercisable, Weighted- Average Remaining Contractual Life | 3 years 3 months 18 days | |
Exercisable, Weighted- Average Exercise Price (in dollars per share) | $ 19.10 | |
Stock Options [Member] | ||
Number of Units, Stock Appreciation Rights (SARs) [Roll Forward] | ||
Outstanding at beginning of period (in shares) | shares | 25,000 | 0 |
Issued (in shares) | shares | 0 | 25,000 |
Forfeited (in shares) | shares | 0 | 0 |
Outstanding at end of period (in shares) | shares | 25,000 | 25,000 |
Weighted - Average Exercise Price, Stock Appreciation Rights (SARs) [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 0 | $ 0 |
Issued (in dollars per share) | 0 | 0 |
Forfeited (in dollars per share) | 0 | 0 |
Outstanding at end of period (in dollars per share) | 0 | $ 0 |
SARs Grants Outstanding and Exercisable [Abstract] | ||
Maximum Range of Exercise Prices (in dollars per share) | $ 0 | |
Outstanding (in shares) | shares | 25,000 | |
Weighted- Average Remaining Contractual Life | 3 years 3 months 18 days | |
Weighted- Average Exercise Price (in dollars per share) | $ 0 | |
Exercisable as of December 29, 2018 (in shares) | shares | 0 | |
Exercisable, Weighted- Average Remaining Contractual Life | 0 years | |
Exercisable, Weighted- Average Exercise Price (in dollars per share) | $ 0 | |
Restricted Stock [Member] | ||
Stock Options [Abstract] | ||
Issued (in shares) | shares | 0 | |
Stock Options and SARs [Member] | ||
SARs Grants Outstanding and Exercisable [Abstract] | ||
Outstanding options, intrinsic value | $ | $ 1,104,410 | |
2010 Plan [Member] | ||
Stock Options [Abstract] | ||
Shares available for future grant (in shares) | shares | 274,500 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Components of Deferred Tax (Assets) and Liabilities [Abstract] | ||
Property, plant and equipment | $ 2,582,792 | $ 3,853,837 |
Intangible assets | 4,710,052 | 2,620,791 |
Other | 218,710 | 64,905 |
Foreign Withholding Tax | 540,761 | 861,964 |
Total deferred income tax liabilities | 8,052,315 | 7,401,497 |
Other postretirement benefits | (156,710) | (235,510) |
Inventories | (1,133,427) | (792,724) |
Allowance for doubtful accounts | (146,576) | (97,570) |
Accrued compensation | (200,232) | (83,829) |
Pensions | (6,127,538) | (6,029,034) |
Foreign Tax Credit | (167,826) | (449,578) |
Total deferred income tax assets | (7,932,309) | (7,688,245) |
Net deferred income tax liabilities | 120,006 | |
Net deferred income tax assets | (286,748) | |
Income before income taxes [Abstract] | ||
Domestic | 12,431,889 | 7,513,348 |
Foreign | 5,158,440 | 3,941,594 |
Income before income taxes | 17,590,329 | 11,454,942 |
Current [Abstract] | ||
Federal | 484,451 | 3,713,975 |
Foreign | 753,521 | 1,084,353 |
State | 347,199 | 319,439 |
Deferred [Abstract] | ||
Federal | 815,858 | (47,241) |
Foreign | 153,726 | 1,301,972 |
State | 529,637 | (37,189) |
Provision for income taxes | 3,084,392 | 6,409,687 |
Reconciliation of income taxes computed using U.S. federal statutory rate to that reflected in operations [Abstract] | ||
Income taxes using U.S. federal statutory rate, Amount | 3,693,968 | 3,894,680 |
State income taxes, net of federal benefit, Amount | 692,698 | 264,205 |
Impact on Foreign Repatriation Tax Reform, Amount | (83,479) | 2,034,065 |
Impact of foreign subsidiaries on effective tax rate, Amount | (401,992) | (364,569) |
Impact of New Tax Law, Amount | (507,847) | 531,307 |
Impact of Research & Development tax credit, Amount | (216,675) | (60,630) |
Impact of manufacturers deduction on effective tax rate, Amount | 0 | (123,554) |
Other-net, Amount | (92,281) | 234,183 |
Provision for income taxes | $ 3,084,392 | $ 6,409,687 |
Income taxes using U.S. federal statutory rate, Percent | 21.00% | 34.00% |
State income taxes, net of federal benefit, Percent | 4.00% | 2.00% |
Impact on Foreign Repatriation Tax Reform, percent | (1.00%) | 18.00% |
Impact of foreign subsidiaries on effective tax rate, Percent | (2.00%) | (3.00%) |
Impact of New Tax Law, percent | (2.00%) | 5.00% |
Impact of Research & Development tax credit, Percent | (1.00%) | (1.00%) |
Impact of manufacturers deduction on effective tax rate, Percent | 0.00% | (1.00%) |
Other-net, Percent | (1.00%) | 2.00% |
Effective income tax rate | 18.00% | 56.00% |
Total income taxes paid | $ 3,741,021 | $ 4,104,701 |
Effect of tax cuts and jobs act of 2017 [Abstract] | ||
Income tax expense (benefit) | (507,847) | 531,307 |
Income tax expense, foreign earnings | 1,557,897 | |
Foreign withholding taxes | 816,198 | |
Undistributed earnings of foreign subsidiaries | 4,404,920 | 19,336,428 |
Deemed repatriation tax on foreign earnings, provisional liability | $ 741,699 | |
Period of installments for payments of taxes | 8 years | |
2018 | $ 59,336 | |
2019 | 59,336 | |
2020 | 59,336 | |
2021 | 59,336 | |
2022 | 59,336 | |
2023 | 111,255 | |
2024 | 148,340 | |
2025 | 185,424 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits [Roll Forward] | ||
Balance at beginning of year | 299,734 | 251,839 |
Increases for positions taken during the current period | 74,219 | 53,013 |
Decreases resulting from the expiration of the statute of limitations | (74,231) | (5,118) |
Balance at end of year | 299,722 | $ 299,734 |
Tax Year [Abstract] | ||
Unrecognized tax benefits that would affect the annual effective tax rate | 236,781 | |
Accrued interest related to unrecognized tax benefits | $ 51,017 | |
Maximum [Member] | ||
Reconciliation of income taxes computed using U.S. federal statutory rate to that reflected in operations [Abstract] | ||
Income taxes using U.S. federal statutory rate, Percent | 35.00% | |
U.S. Federal [Member] | ||
Tax Year [Abstract] | ||
Open tax year | 2014 | |
State and Local Jurisdiction [Member] | ||
Tax Year [Abstract] | ||
Open tax year | 2014 | |
Foreign Jurisdiction [Member] | ||
Tax Year [Abstract] | ||
Open tax year | 2012 |
LEASES (Details)
LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Future minimum payments under non-cancelable operating leases [Abstract] | ||
Rent expense for all operating leases | $ 2,552,887 | $ 2,166,755 |
Non-Cancelable Leases [Member] | ||
Future minimum payments under non-cancelable operating leases [Abstract] | ||
2019 | 2,489,016 | |
2020 | 1,928,877 | |
2021 | 1,120,898 | |
2022 | 304,704 | |
2023 | 550 | |
Total | 5,844,045 | |
All Leases of All Kinds [Member] | Minimum [Member] | ||
Future minimum payments under non-cancelable operating leases [Abstract] | ||
2019 | 2,200,000 | |
2020 | 2,200,000 | |
2021 | 2,200,000 | |
2022 | 2,200,000 | |
2023 | 2,200,000 | |
All Leases of All Kinds [Member] | Maximum [Member] | ||
Future minimum payments under non-cancelable operating leases [Abstract] | ||
2019 | 2,500,000 | |
2020 | 2,500,000 | |
2021 | 2,500,000 | |
2022 | 2,500,000 | |
2023 | $ 2,500,000 |
RETIREMENT BENEFIT PLANS, Net P
RETIREMENT BENEFIT PLANS, Net Periodic Benefit Cost and Assumptions (Details) - USD ($) | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Sep. 01, 2017 | |
RETIREMENT BENEFIT PLANS [Abstract] | |||
Increase in expense of unrecognized prior service cost | $ 14,928 | ||
Modification of benefit multiplier | $ 0.50 | ||
Modification of benefit multiplier on each subsequent anniversary for the lifetime of the contract | $ 0.50 | ||
Modification of benefit multiplier at end of current contract | 45 | ||
Pension Benefit [Member] | |||
Components of the net periodic benefit cost [Abstract] | |||
Service cost | 1,319,841 | $ 1,276,608 | |
Interest cost | 3,107,164 | 3,170,194 | |
Expected return on plan assets | (5,219,515) | (4,783,531) | |
Amortization of prior service cost | 114,822 | 178,874 | |
Amortization of the net loss | 1,110,111 | 1,231,486 | |
Net periodic benefit cost | $ 432,423 | $ 1,073,631 | |
Assumptions used to determine net periodic benefit cost [Abstract] | |||
Expected return on plan assets | 7.50% | 7.50% | |
Rate of compensation increase | 0.00% | 0.00% | |
Pension Benefit [Member] | Minimum [Member] | |||
Assumptions used to determine net periodic benefit cost [Abstract] | |||
Discount rate | 3.54% | 4.04% | |
Pension Benefit [Member] | Maximum [Member] | |||
Assumptions used to determine net periodic benefit cost [Abstract] | |||
Discount rate | 3.57% | 4.08% | |
Other Postretirement Benefit [Member] | |||
Components of the net periodic benefit cost [Abstract] | |||
Service cost | $ 37,024 | $ 27,389 | |
Interest cost | 77,161 | 80,827 | |
Expected return on plan assets | (55,650) | (51,494) | |
Amortization of prior service cost | (5,072) | (21,444) | |
Amortization of the net loss | (65,591) | (77,601) | |
Net periodic benefit cost | $ (12,128) | $ (42,323) | |
Assumptions used to determine net periodic benefit cost [Abstract] | |||
Discount rate | 3.60% | 4.12% | |
Expected return on plan assets | 4.00% | 4.00% | |
Supplemental Pension [Member] | |||
Assumptions used to determine net periodic benefit cost [Abstract] | |||
Discount rate | 3.10% | 3.03% |
RETIREMENT BENEFIT PLANS, Funde
RETIREMENT BENEFIT PLANS, Funded Status (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Pension Benefit [Member] | ||
Change in benefit obligation [Roll Forward] | ||
Benefit obligation at beginning of year | $ 98,522,201 | $ 92,258,937 |
Change due to availability of final actual assets and census data | 0 | 0 |
Change in discount rate | (8,319,874) | 6,200,491 |
Service cost | 1,319,841 | 1,276,608 |
Interest cost | 3,107,164 | 3,170,194 |
Actuarial (gain)/loss | 531,799 | (1,495,135) |
Benefits paid | (3,627,931) | (3,385,793) |
Plan amendment | 0 | 496,899 |
Benefit obligation at end of year | 91,533,200 | 98,522,201 |
Change in fair value of plan assets [Roll Forward] | ||
Fair value of plan assets at beginning of year | 72,098,772 | 65,627,499 |
Actual return on plan assets | (4,827,641) | 9,315,225 |
Employer contributions | 2,527,675 | 541,841 |
Benefits paid | (3,627,931) | (3,385,793) |
Fair value of plan assets at end of year | 66,170,875 | 72,098,772 |
Funded Status [Abstract] | ||
Net amount recognized in the balance sheet | (25,362,325) | (26,423,429) |
Other Postretirement Benefit [Member] | ||
Change in benefit obligation [Roll Forward] | ||
Benefit obligation at beginning of year | 2,423,410 | 2,339,050 |
Change due to availability of final actual assets and census data | 0 | 0 |
Change in discount rate | (217,539) | 181,691 |
Service cost | 37,024 | 27,389 |
Interest cost | 77,161 | 80,827 |
Actuarial (gain)/loss | (89,664) | (65,601) |
Benefits paid | (133,631) | (139,946) |
Benefit obligation at end of year | 2,096,761 | 2,423,410 |
Change in fair value of plan assets [Roll Forward] | ||
Fair value of plan assets at beginning of year | 1,391,239 | 1,287,350 |
Actual return on plan assets | 56,887 | 103,889 |
Employer contributions | 133,631 | 139,946 |
Benefits paid | (133,631) | (139,946) |
Fair value of plan assets at end of year | 1,448,126 | 1,391,239 |
Funded Status [Abstract] | ||
Net amount recognized in the balance sheet | $ (648,635) | $ (1,032,171) |
RETIREMENT BENEFIT PLANS, Amoun
RETIREMENT BENEFIT PLANS, Amounts Recognized in, and Changes in Components of AOCI (Details) - USD ($) | 12 Months Ended | |||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Amounts recognized in accumulated other comprehensive income [Abstract] | ||||
Total | $ 20,485,277 | $ 20,485,277 | $ 20,688,630 | $ 20,485,277 |
Defined Benefit Plan, Change in components of accumulated other comprehensive income [Abstract] | ||||
Balance at beginning of period | 20,485,277 | |||
Liability (gains)/losses [Abstract] | ||||
Balance at end of period | 20,688,630 | 20,485,277 | ||
Pension Benefit [Member] | ||||
Amounts recognized in accumulated other comprehensive income [Abstract] | ||||
Net (loss)/gain | (33,714,584) | (32,565,614) | ||
Prior service (cost) credit | (364,392) | (494,142) | ||
Total | (34,078,976) | (33,059,756) | (34,078,976) | (33,059,756) |
Defined Benefit Plan, Change in components of accumulated other comprehensive income [Abstract] | ||||
Balance at beginning of period | (33,059,756) | (33,799,555) | ||
Change due to availability of final actual assets and census data | 0 | 0 | ||
Charged to net periodic benefit cost [Abstract] | ||||
Prior service cost | 114,822 | 178,874 | ||
Net loss (gain) | 1,110,111 | 1,231,486 | ||
Liability (gains)/losses [Abstract] | ||||
Discount rate | 8,319,874 | (6,200,491) | ||
Asset (gains)/losses deferred | (9,531,647) | 5,978,071 | ||
Additional recognition due to plan amendment | 14,928 | (496,899) | ||
Other | (1,047,308) | 48,758 | ||
Balance at end of period | (34,078,976) | (33,059,756) | ||
Amounts that will be amortized from accumulated other comprehensive income in next fiscal year [Abstract] | ||||
Net (loss) gain | (1,145,203) | |||
Prior service cost (credit) | 99,380 | |||
Other Postretirement Benefit [Member] | ||||
Amounts recognized in accumulated other comprehensive income [Abstract] | ||||
Net (loss)/gain | 1,332,634 | 1,089,785 | ||
Prior service (cost) credit | 13,325 | 18,397 | ||
Total | 1,345,959 | 1,108,182 | 1,345,959 | $ 1,108,182 |
Defined Benefit Plan, Change in components of accumulated other comprehensive income [Abstract] | ||||
Balance at beginning of period | 1,108,182 | 1,270,922 | ||
Change due to availability of final actual assets and census data | 0 | 0 | ||
Charged to net periodic benefit cost [Abstract] | ||||
Prior service cost | (5,072) | (21,444) | ||
Net loss (gain) | (65,591) | (77,601) | ||
Liability (gains)/losses [Abstract] | ||||
Discount rate | 217,539 | (181,691) | ||
Asset (gains)/losses deferred | 1,237 | 52,395 | ||
Additional recognition due to plan amendment | 0 | 0 | ||
Other | 89,664 | 65,601 | ||
Balance at end of period | $ 1,345,959 | $ 1,108,182 | ||
Amounts that will be amortized from accumulated other comprehensive income in next fiscal year [Abstract] | ||||
Net (loss) gain | 82,027 | |||
Prior service cost (credit) | $ (5,072) |
RETIREMENT BENEFIT PLANS, Assum
RETIREMENT BENEFIT PLANS, Assumptions Used to Determine the Projected Benefit Obligations and Estimated Benefit Payments (Details) | 12 Months Ended | |
Dec. 29, 2018USD ($)Plan | Dec. 30, 2017USD ($)Plan | |
Estimated future benefit payments to participants [Abstract] | ||
Period of horizon for various asset classes used in calculating expected long term rates of return | 10 years | |
Pension Benefit [Member] | ||
Assumptions used to determine net periodic benefit obligations [Abstract] | ||
Accumulated benefit obligation for all qualified and nonqualified defined benefit pension plans | $ 91,533,200 | $ 98,522,201 |
Pension plans with projected benefit obligation and accumulated benefit obligation in excess of plan assets [Abstract] | ||
Number of plans | Plan | 5 | 6 |
Projected benefit obligation | $ 91,533,200 | $ 98,522,201 |
Accumulated benefit obligation | 91,533,200 | 98,522,201 |
Fair value of plan assets | 66,170,875 | 72,098,722 |
Net amount recognized in accrued benefit liability | (25,362,325) | $ (26,423,429) |
Estimated future benefit payments to participants [Abstract] | ||
2019 | 4,100,000 | |
2020 | 4,300,000 | |
2021 | 4,500,000 | |
2022 | 4,700,000 | |
2023 | 4,900,000 | |
2024 through 2028 | 27,400,000 | |
Contributions expected to be made by Company in next fiscal year | $ 600,000 | |
Pension Benefit [Member] | Minimum [Member] | ||
Assumptions used to determine net periodic benefit obligations [Abstract] | ||
Discount rate | 4.20% | 3.54% |
Pension Benefit [Member] | Maximum [Member] | ||
Assumptions used to determine net periodic benefit obligations [Abstract] | ||
Discount rate | 4.22% | 3.57% |
Other Postretirement Benefit [Member] | ||
Assumptions used to determine net periodic benefit obligations [Abstract] | ||
Discount rate | 4.26% | 3.60% |
Pension plans with projected benefit obligation and accumulated benefit obligation in excess of plan assets [Abstract] | ||
Net amount recognized in accrued benefit liability | $ (648,635) | $ (1,032,171) |
Estimated future benefit payments to participants [Abstract] | ||
2019 | 100,000 | |
2020 | 100,000 | |
2021 | 101,000 | |
2022 | 102,000 | |
2023 | 103,000 | |
2024 through 2028 | 536,000 | |
Contributions expected to be made by Company in next fiscal year | $ 105,000 | |
Supplemental Pension [Member] | ||
Assumptions used to determine net periodic benefit obligations [Abstract] | ||
Discount rate | 3.81% | 3.10% |
RETIREMENT BENEFIT PLANS, Fair
RETIREMENT BENEFIT PLANS, Fair Value of Pension Plan Assets (Details) - USD ($) | 12 Months Ended | |||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | ||
Equity Securities [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Long-term target allocations for plan assets | 50.00% | |||
Fixed income [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Long-term target allocations for plan assets | 50.00% | |||
Pension Benefit [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | $ 66,170,875 | $ 72,098,772 | $ 65,627,499 | |
Number of shares of employer common stock included plan assets (in shares) | 0 | 0 | ||
Cash dividends received | $ 95,488 | $ 95,488 | ||
Pension Benefit [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 5,247,495 | 5,675,021 | ||
Pension Benefit [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 60,923,380 | 66,423,751 | ||
Pension Benefit [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Pension Benefit [Member] | Common/Collective Trust Funds [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 306,882 | 278,016 | ||
Pension Benefit [Member] | Common/Collective Trust Funds [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Pension Benefit [Member] | Common/Collective Trust Funds [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 306,882 | 278,016 | ||
Pension Benefit [Member] | Common/Collective Trust Funds [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Pension Benefit [Member] | Equity Securities [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Value of employer common stock included plan assets | 0 | 0 | ||
Pension Benefit [Member] | The Eastern Company Common Stock [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 5,247,495 | 5,675,021 | ||
Pension Benefit [Member] | The Eastern Company Common Stock [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 5,247,495 | 5,675,021 | ||
Pension Benefit [Member] | The Eastern Company Common Stock [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Pension Benefit [Member] | The Eastern Company Common Stock [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Pension Benefit [Member] | Russell Multi Asset Core Plus Fund [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [1] | 30,611,519 | 31,642,838 | |
Pension Benefit [Member] | Russell Multi Asset Core Plus Fund [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [1] | 0 | 0 | |
Pension Benefit [Member] | Russell Multi Asset Core Plus Fund [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [1] | 30,611,519 | 31,642,838 | |
Pension Benefit [Member] | Russell Multi Asset Core Plus Fund [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [1] | 0 | 0 | |
Pension Benefit [Member] | Russell 8 Year LDI Fixed Income Fund [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [2] | 5,735,993 | 6,033,648 | |
Pension Benefit [Member] | Russell 8 Year LDI Fixed Income Fund [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [2] | 0 | 0 | |
Pension Benefit [Member] | Russell 8 Year LDI Fixed Income Fund [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [2] | 5,735,993 | 6,033,648 | |
Pension Benefit [Member] | Russell 8 Year LDI Fixed Income Fund [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [2] | 0 | 0 | |
Pension Benefit [Member] | Russell 14 Year LDI Fixed Income Fund [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [2] | 17,044,596 | 18,083,206 | |
Pension Benefit [Member] | Russell 14 Year LDI Fixed Income Fund [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [2] | 0 | 0 | |
Pension Benefit [Member] | Russell 14 Year LDI Fixed Income Fund [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [2] | 17,044,596 | 18,083,206 | |
Pension Benefit [Member] | Russell 14 Year LDI Fixed Income Fund [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [2] | 0 | 0 | |
Pension Benefit [Member] | Russell 15 Year STRIPS Fixed Income Fund [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 1,811,436 | 1,905,068 | |
Pension Benefit [Member] | Russell 15 Year STRIPS Fixed Income Fund [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 0 | 0 | |
Pension Benefit [Member] | Russell 15 Year STRIPS Fixed Income Fund [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 1,811,436 | 1,905,068 | |
Pension Benefit [Member] | Russell 15 Year STRIPS Fixed Income Fund [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 0 | 0 | |
Pension Benefit [Member] | Russell 10 Year STRIPS Fixed Income Fund [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 3,408,879 | 3,570,427 | |
Pension Benefit [Member] | Russell 10 Year STRIPS Fixed Income Fund [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 0 | 0 | |
Pension Benefit [Member] | Russell 10 Year STRIPS Fixed Income Fund [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 3,408,879 | 3,570,427 | |
Pension Benefit [Member] | Russell 10 Year STRIPS Fixed Income Fund [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 0 | 0 | |
Pension Benefit [Member] | Russell 28 to 29 Year STRIPS Fixed Income Fund [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 2,004,075 | 2,144,581 | |
Pension Benefit [Member] | Russell 28 to 29 Year STRIPS Fixed Income Fund [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 0 | 0 | |
Pension Benefit [Member] | Russell 28 to 29 Year STRIPS Fixed Income Fund [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | 2,004,075 | 2,144,581 | |
Pension Benefit [Member] | Russell 28 to 29 Year STRIPS Fixed Income Fund [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | [3] | $ 0 | 0 | |
Pension Benefit [Member] | Insurance Contracts [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 2,765,967 | |||
Pension Benefit [Member] | Insurance Contracts [Member] | Level 1 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 0 | |||
Pension Benefit [Member] | Insurance Contracts [Member] | Level 2 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | 2,765,967 | |||
Pension Benefit [Member] | Insurance Contracts [Member] | Level 3 [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | $ 0 | |||
Pension Benefit [Member] | Equity Securities, Common Stock [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Number of shares of employer common stock included plan assets (in shares) | 217,018 | 217,018 | ||
Value of employer common stock included plan assets | $ 5,247,495 | $ 5,675,021 | ||
Other Postretirement Benefit [Member] | ||||
Fair values of pension plans assets [Abstract] | ||||
Fair value of plan assets | $ 1,448,126 | $ 1,391,239 | $ 1,287,350 | |
[1] | The investment objective of the RITC (formerly Russell) Multi-Asset Core Plus Fund seeks to provide long-term growth of capital over a market cycle by offering a diversified portfolio of funds and separate accounts investing in global stock, return seeking fixed income, commodities, global real estate and opportunistic investments. They hold a dynamic mix of underlying Russell Investments funds and/or separate accounts. Russell Investments is a strong proponent of disciplined strategic asset allocation and rebalancing strategies, and believes that unstable movements in the market have the potential to create opportunities. By identifying short-term mispricing, and making small tactical adjustments to the Multi-Asset Core Plus Fund, they believe there is potential to enhance returns while continuing to manage risks. | |||
[2] | The Target Duration LDI Fixed Income Funds seek to outperform their respective Barclays-Russell LDI Indexes over a full market cycle. These Funds invest primarily in investment grade corporate bonds that closely match those found in discount curves used to value U.S. pension liabilities. They seek to provide additional incremental return through modest interest rate timing, security selection and tactical use of non-credit sectors. Generally for use in combination with other bond funds to gain additional credit exposure, with the goal of reducing the mismatch between a plan's assets and liabilities. | |||
[3] | The STRIPS (Separate Trading of Registered Interest and Principal of Securities) Funds seek to provide duration and Treasury exposure by investing in an optimized subset of the STRIPS universe with a similar duration profile as the Barclays U.S. Treasury STRIPS 10-11 year, 16-16 year or 28-29 year Index. These passively managed funds are generally used with other bond funds to add additional duration to the asset portfolio. This will help reduce the mismatch between a plan's assets and liabilities. |
RETIREMENT BENEFIT PLANS, Defin
RETIREMENT BENEFIT PLANS, Defined Contribution Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Contribution Plan [Abstract] | ||
Total contributions made for the period | $ 1,478,481 | $ 1,206,996 |
Regular Matching Contributions [Member] | ||
Contribution Plan [Abstract] | ||
Total contributions made for the period | 551,046 | 465,671 |
Transitional Credit Contributions [Member] | ||
Contribution Plan [Abstract] | ||
Total contributions made for the period | 349,062 | 385,578 |
Non-discretionary Contributions [Member] | ||
Contribution Plan [Abstract] | ||
Total contributions made for the period | $ 578,373 | 355,747 |
Plan 401 K Plan Amendment [Member] | ||
Contribution Plan [Abstract] | ||
Percentage of voluntary contributions allowed to participants, maximum | 100.00% | |
Employer matching contribution percentage | 50.00% | |
Increase in employer matching contribution on first of total employee contributions, percentage | 6.00% | |
Non-discretionary contribution percentage for employees who were not eligible to participate in the salaried plan | 3.00% | |
Non-Union U.S. Employees [Member] | ||
Contribution Plan [Abstract] | ||
Total contributions made for the period | $ 565,748 | $ 502,618 |
Non-Union U.S. Employees [Member] | Minimum [Member] | ||
Contribution Plan [Abstract] | ||
Non-discretionary contribution percentage for certain employees who were eligible to participate in the salaried plan | 0.00% | |
Non-Union U.S. Employees [Member] | Maximum [Member] | ||
Contribution Plan [Abstract] | ||
Non-discretionary contribution percentage for certain employees who were eligible to participate in the salaried plan | 4.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Basic [Abstract] | ||
Weighted average shares outstanding (in shares) | 6,258,277 | 6,259,139 |
Diluted [Abstract] | ||
Weighted average shares outstanding (in shares) | 6,258,277 | 6,259,139 |
Dilutive stock options (in shares) | 15,697 | 35,634 |
Denominator for diluted earnings per share (in shares) | 6,273,974 | 6,294,773 |
Anti-dilutive stock equivalents (in shares) | 0 | 0 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Reportable Segments Information [Abstract] | ||
Sales | $ 234,275,463 | $ 204,239,613 |
Income before income taxes | 17,590,329 | 11,454,942 |
Operating profit | 17,859,341 | 12,082,758 |
Interest expense | (1,202,272) | (976,512) |
Other income | 933,260 | 348,696 |
Assets | 181,247,567 | 176,458,397 |
Depreciation and amortization | 5,329,208 | 4,719,185 |
Capital expenditures before currency translation adjustment | 5,413,073 | 2,756,709 |
Currency translation adjustment | (9,014) | 6,240 |
Capital expenditures | 5,410,545 | 2,762,949 |
Operating Segments [Member] | ||
Reportable Segments Information [Abstract] | ||
Assets | 122,103,898 | 116,679,690 |
Operating Segments [Member] | Industrial Hardware [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 140,293,409 | 115,273,233 |
Income before income taxes | 9,588,185 | 5,042,687 |
Assets | 47,600,805 | 44,828,458 |
Depreciation and amortization | 2,978,324 | 2,526,460 |
Capital expenditures before currency translation adjustment | 3,029,406 | 1,151,868 |
Operating Segments [Member] | Security Products [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 64,897,871 | 60,976,998 |
Income before income taxes | 7,122,640 | 6,020,847 |
Assets | 54,593,837 | 53,724,837 |
Depreciation and amortization | 1,135,811 | 964,873 |
Capital expenditures before currency translation adjustment | 1,482,267 | 705,178 |
Operating Segments [Member] | Metal Products [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 29,084,183 | 27,989,382 |
Income before income taxes | 1,148,516 | 1,019,224 |
Assets | 19,909,256 | 18,126,395 |
Depreciation and amortization | 1,215,073 | 1,227,852 |
Capital expenditures before currency translation adjustment | 901,400 | 899,663 |
Intersegment Eliminations [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 3,745,497 | 3,481,764 |
Intersegment Eliminations [Member] | Industrial Hardware [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 366,381 | 524,536 |
Intersegment Eliminations [Member] | Security Products [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 3,365,695 | 2,935,797 |
Intersegment Eliminations [Member] | Metal Products [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 13,421 | 21,431 |
General Corporate [Member] | ||
Reportable Segments Information [Abstract] | ||
Assets | 59,143,669 | 59,778,707 |
Capital expenditures | 6,486 | 0 |
Reportable Geographical Components [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 234,275,463 | 204,239,613 |
Reportable Geographical Components [Member] | United States [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 207,789,058 | 178,124,818 |
Assets | 166,665,767 | 153,712,643 |
Reportable Geographical Components [Member] | Foreign [Member] | ||
Reportable Segments Information [Abstract] | ||
Sales | 26,486,405 | 26,114,795 |
Assets | $ 14,581,800 | $ 22,745,754 |
CONCENTRATION OF RISK (Details)
CONCENTRATION OF RISK (Details) | 12 Months Ended | ||
Dec. 29, 2018USD ($)Customer | Dec. 30, 2017Customer | Apr. 04, 2017USD ($) | |
Term Loan [Member] | Interest Rate Swap [Member] | |||
Interest Rate Risk [Abstract] | |||
Interest rate swap, notional amount | $ | $ 14,337,500 | $ 15,500,000 | |
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% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Accounts Receivable, Net [Abstract] | |||
Number of major customers | Customer | 0 | 0 | |
Threshold percentage of concentration risk | 10.00% | 10.00% |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying accounts (Details) - Allowance for Doubtful Accounts [Member] - USD ($) | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | ||
Valuation and qualifying accounts information [Abstract] | |||
Balance at Beginning of Period | $ 470,000 | $ 430,000 | |
Charged to Costs and Expenses | 220,000 | 87,000 | |
Charged to Other Accounts - Describe | 0 | 64,000 | |
Deductions - Describe | [1] | 10,000 | 111,000 |
Balance at End of Period | $ 680,000 | $ 470,000 | |
[1] | Uncollectible accounts written off, net of recoveries. |