Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 29, 2019shares | |
Cover [Abstract] | |
Entity Registrant Name | EASTERN CO |
Entity Central Index Key | 0000031107 |
Current Fiscal Year End Date | --12-28 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Entity Filer Category | Accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 6,236,000 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 29, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Entity Address, State or Province | CT |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract] | ||||
Net sales | $ 61,439,929 | $ 60,860,852 | $ 122,323,077 | $ 120,305,849 |
Cost of products sold | (46,430,039) | (45,807,496) | (93,504,144) | (90,531,018) |
Gross margin | 15,009,890 | 15,053,356 | 28,818,933 | 29,744,831 |
Product development expenses | (2,174,803) | (1,581,719) | (4,414,579) | (3,084,258) |
Selling and administrative expenses | (8,076,501) | (9,083,131) | (16,474,766) | (18,130,180) |
Restructuring costs | (1,799,293) | 0 | (2,635,987) | 0 |
Operating profit | 2,959,293 | 4,388,506 | 5,293,601 | 8,560,393 |
Interest expense | (261,618) | (312,060) | (554,158) | (608,390) |
Other income | 586,823 | 225,769 | 600,748 | 444,500 |
Income before income taxes | 3,284,498 | 4,302,215 | 5,340,191 | 8,396,503 |
Income taxes | 754,725 | 1,043,738 | 1,239,458 | 2,037,831 |
Net income | $ 2,529,773 | $ 3,258,477 | $ 4,100,733 | $ 6,358,672 |
Earnings per Share: | ||||
Basic (in dollars per share) | $ 0.41 | $ 0.52 | $ 0.66 | $ 1.02 |
Diluted (in dollars per share) | 0.40 | 0.52 | 0.65 | 1.01 |
Cash dividends per share: (in dollars per share) | $ 0.11 | $ 0.11 | $ 0.22 | $ 0.22 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract] | ||||
Net income | $ 2,529,773 | $ 3,258,477 | $ 4,100,733 | $ 6,358,672 |
Other comprehensive income/(loss): | ||||
Change in foreign currency translation | (221,530) | (883,246) | 191,094 | (274,318) |
Change in marketable securities, net of tax benefit/(cost) of: 2019 - $3,008 and $(463) | 9,219 | 0 | (1,420) | 0 |
Change in fair value of interest rate swap, net of tax benefit/(cost) of: 2019 - $45,197 and $69,817 2018 - $19,202 and $59,166 | (143,125) | 60,806 | (221,086) | 226,645 |
Change in pension and postretirement benefit costs, net of taxes of: 2019 - $70,938 and $141,876 2018 - $65,843 and $131,685 | 222,681 | 222,724 | 445,362 | 445,449 |
Total other comprehensive income/(loss) | (132,755) | (599,716) | 413,950 | 397,776 |
Comprehensive income | $ 2,397,018 | $ 2,658,761 | $ 4,514,683 | $ 6,756,448 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Other comprehensive income/(loss): | ||||
Change in fair value of marketable securities, tax benefit/(cost) | $ 3,008 | $ 0 | $ (463) | $ 0 |
Change in fair value of interest rate swap and marketable securities, tax benefit/(cost) | 45,197 | 19,202 | 69,817 | 59,166 |
Change in pension and postretirement benefit costs, tax expense | $ 70,938 | $ 65,843 | $ 141,876 | $ 131,685 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Jun. 29, 2019 | Dec. 29, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 13,667,902 | $ 13,925,765 |
Marketable securities | 23,136 | 0 |
Accounts receivable, less allowances: $476,000 - 2019; $680,000 -2018 | 32,103,399 | 30,285,316 |
Inventories | 49,271,813 | 52,773,209 |
Prepaid expenses and other assets | 3,162,089 | 3,071,888 |
Refundable taxes | 1,082,011 | 1,133,847 |
Total Current Assets | 99,310,350 | 101,190,025 |
Property, Plant and Equipment | 72,671,980 | 73,768,615 |
Accumulated depreciation | (45,677,158) | (43,915,238) |
Property, Plant and Equipment, Net | 26,994,822 | 29,853,377 |
Goodwill | 34,880,617 | 34,840,376 |
Trademarks | 3,686,063 | 3,686,063 |
Patents and other intangibles net of accumulated amortization | 9,118,632 | 10,281,720 |
Right of Use Assets | 10,026,397 | 0 |
Deferred income taxes | 1,396,006 | 1,396,006 |
Total other assets | 59,107,715 | 50,204,165 |
TOTAL ASSETS | 185,412,887 | 181,247,567 |
Current Liabilities | ||
Accounts payable | 18,504,766 | 18,497,626 |
Accrued compensation | 2,853,541 | 4,159,808 |
Other accrued expenses | 3,883,036 | 3,095,666 |
Contingent Liability | 0 | 2,070,000 |
Current portion of long-term debt | 3,100,000 | 2,325,000 |
Total Current Liabilities | 28,341,343 | 30,148,100 |
Deferred income taxes | 1,516,012 | 1,516,012 |
Other long-term liabilities | 353,856 | 353,856 |
Lease liability | 10,026,397 | 0 |
Long-term debt, less current portion | 19,300,000 | 26,350,000 |
Accrued postretirement benefits | 632,500 | 648,635 |
Accrued pension cost | 24,939,439 | 25,362,325 |
Shareholders' Equity | ||
Preferred Stock, no par value: Authorized and unissued: 2,000,000 shares | 0 | 0 |
Common Stock, no par value, Authorized: 50,000,000 shares Issued: 8,970,509 shares in 2019 and 8,965,987 shares in 2018 | 30,288,617 | 29,994,890 |
Treasury Stock: 2,734,729 shares in 2019 and 2,634,729 shares in 2018 | (20,169,098) | (20,169,098) |
Retained earnings | 112,398,386 | 109,671,362 |
Accumulated other comprehensive income (loss): | ||
Foreign currency translation | (1,915,235) | (2,106,329) |
Unrealized loss on marketable securities, net of tax | (1,420) | 0 |
Unrealized gain (loss) on interest rate swap, net of tax | (54,642) | 166,444 |
Unrecognized net pension and postretirement benefit costs, net of tax | (20,243,268) | (20,688,630) |
Accumulated other comprehensive loss | (22,214,565) | (22,628,515) |
Total Shareholders' Equity | 100,303,340 | 96,868,639 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 185,412,887 | $ 181,247,567 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) | Jun. 29, 2019 | Dec. 29, 2018 |
Current Assets | ||
Accounts receivable, allowances | $ 476,000 | $ 680,000 |
Shareholders' Equity | ||
Preferred Stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred Stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
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) | 8,970,509 | 8,965,987 |
Treasury Stock, shares (in shares) | 2,734,729 | 2,634,729 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Operating Activities | ||
Net income | $ 4,100,733 | $ 6,358,672 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,391,314 | 2,314,985 |
Unrecognized pension and postretirement benefits | 448,214 | 116,578 |
Loss on restructuring of equipment and other assets | 2,208,740 | 50,348 |
Provision for doubtful accounts | 43,420 | 201,552 |
Stock compensation expense | 293,726 | 214,821 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,794,182) | (3,717,778) |
Inventories | 3,618,303 | (2,658,358) |
Prepaid expenses and other | (21,533) | (339,385) |
Other assets | 709,357 | (58,426) |
Accounts payable | (89,081) | 3,712,586 |
Accrued compensation | (1,307,966) | (1,527,545) |
Other accrued expenses | (1,893,440) | 946,368 |
Net cash provided by operating activities | 8,707,605 | 5,614,417 |
Investing Activities | ||
Marketable securities | (23,136) | 0 |
Business acquisition, net of cash acquired | 0 | (4,994,685) |
Capitalized software | 0 | (1,444,459) |
Purchases of property, plant and equipment | (1,261,942) | (1,236,375) |
Net cash used in investing activities | (1,285,078) | (7,675,519) |
Financing Activities | ||
Proceeds from short term borrowings | 0 | 7,000,000 |
Payments on revolving credit note | 0 | (6,000,000) |
Principal payments on long-term debt | (6,275,000) | (775,000) |
Dividends paid | (1,373,700) | (1,378,456) |
Net cash used in financing activities | (7,648,700) | (1,153,456) |
Effect of exchange rate changes on cash | (31,690) | (80,996) |
Net change in cash and cash equivalents | (257,863) | (3,295,553) |
Cash and cash equivalents at beginning of period | 13,925,765 | 22,275,477 |
Cash and cash equivalents at end of period | 13,667,902 | $ 18,979,924 |
Non-cash investing and financing activities | ||
Right of use asset | 10,026,397 | |
Lease liability | $ (10,026,397) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 29, 2019 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note A – Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X 10-01 and do not include all of the information and footnotes required by generally accepted accounting principles in the United States ("GAAP") for complete financial statements. Refer to the Company's consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 29, 2018, as filed with the Securities and Exchange Commission (SEC) on March 14, 2019 the ("2018 Form 10-K") for additional information. The accompanying condensed consolidated financial statements are unaudited. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for interim periods have been reflected therein. All intercompany accounts and transactions are eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The condensed consolidated balance sheet at December 29, 2018 has been derived from the audited consolidated balance sheet at that date. Commencing with the financial statements contained in the Quarterly Report on Form 10-Q for the period ended March 30, 2019, in accordance with ASC 842 – Leases, right of use assets and lease liabilities have been separately identified on the balance sheet for the current period. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 29, 2019 | |
Earning Per Share [Abstract] | |
Earning Per Share | Note B – Earning Per Share The denominators used to calculate earnings per share are as follow: Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Basic: Weighted average shares outstanding 6,232,744 6,264,435 6,233,773 6,265,315 Diluted: Weighted average shares outstanding 6,232,744 6,264,435 6,233,773 6,265,315 Dilutive stock options 29,258 27,002 29,258 27,002 Denominator for diluted earnings per share 6,262,002 6,291,437 6,263,031 6,292,317 |
Inventories
Inventories | 6 Months Ended |
Jun. 29, 2019 | |
Inventories [Abstract] | |
Inventories | Note C – Inventories Inventories consist of the following components: June 29, 2019 December 29, 2018 Raw material and component parts $ 16,657,441 $ 17,841,166 Work in process 8,365,711 8,960,202 Finished goods 24,248,661 25,971,841 Total inventories $ 49,271,813 $ 52,773,209 |
Leases
Leases | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
Leases | Note D – Right-of-Use Assets In February 2016, the FASB issued ASU No. 2016-02, Leases ("Topic 842"). ASU 2016-02 requires lessees to present right-of-use ("ROU") assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. See Note M – Recent Accounting Pronouncements. In calculating the effect of Topic 842 – Leases, the Company elected the transition method thereby not restating comparable periods. The Company elected to account for non-lease components as part of the lease component to which they relate. Lease accounting involves significant judgments, including making estimates related to the lease term, lease payments, and discount rate. In accordance with the guidance, the Company recognized ROU assets and lease liabilities for all leases with a term greater than 12 months. The Company has operating leases for buildings, warehouses and office equipment. Currently, the Company has 22 operating leases with a ROU asset and lease liability totaling $10,026,397 as of June 29, 2019. The basis, terms and conditions of the leases are determined by the individual agreements. The Company's option to extend certain leases ranges from 12 – 120 months. All options to extend have been included in the calculation of the ROU asset and lease liability. The leases do not contain residual value guarantees, restrictions, or covenants that could incur additional financial obligations to the Company. There are no subleases, sale-leaseback, or related party transactions. |
Debt
Debt | 6 Months Ended |
Jun. 29, 2019 | |
Debt [Abstract] | |
Debt | Note E - Debt 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. ("Velvac"). 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 two years 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, resulting in a zero-dollar balance as of June 29, 2019. 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. The Company made additional principal payments during the quarter ended June 29, 2019, of $5.5 million. On June 29, 2019, the interest rate for one half ($8.4 million) of the term portion was 4.09%, using a 1 month LIBOR rate and 3.94% on the remaining balance ($13.9 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. 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 is required to show a maximum total leverage ratio of 4.0x for the calendar year ended December 31, 2018, 3.5x for the calendar year ended December 31, 2019, 3.25x for the calendar year ended December 31, 2020, and 3.0x thereafter. 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 2018 through and including June 29, 2019, the last day of the Company's second fiscal quarter. |
Stock Options and Awards
Stock Options and Awards | 6 Months Ended |
Jun. 29, 2019 | |
Stock Options and Awards [Abstract] | |
Stock Options and Awards | Note F - Stock Options and awards Stock Options As of June 29, 2019, 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 (the "Compensation Committee"). Under the 2010 Plan, non-qualified stock options granted to participants have exercise prices determined by the Compensation Committee. During the second quarters of 2019 and 2018, no stock option or restricted stock grant was issued subject to meeting performance measurements. For the first half of 2019, the Company used several assumptions, which included an expected term of 3.5 years, volatility deviation of 28.88% and a risk-free rate of 2.48%. For the first half 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%. 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 the second quarter of 2019, the Company did not issue any SARs. Stock-based compensation expense in connection with SARs previously granted to employees in the second quarter of 2019 and 2018 was approximately $93,000 and $74,000, respectively and for the first six months of fiscal years 2019 and 2018 was approximately $173,000 and $130,000, respectively. As of June 29, 2019, there were 238,500 shares of Company 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: Six Months Ended June 29, 2019 Year Ended December 29, 2018 Units Weighted - Average Exercise Price Units Weighted - Average Exercise Price Outstanding at beginning of period 189,167 $ 21.46 141,500 $ 20.36 Issued 36,000 26.30 51,000 24.90 Exercised (1,667 ) 19.10 -- -- Forfeited -- -- (3,333 ) 19.10 Outstanding at end of period 223,500 22.15 189,167 21.46 SARs Outstanding and Exercisable Range of Exercise Prices Outstanding as of June 29, 2019 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of June 29, 2019 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $ 19.10-26.30 223,500 3.3 $ 22.15 38,003 2.7 19.10 The following tables set forth the outstanding stock grants for the period specified: Six Months Ended June 29, 2019 Year Ended December 29, 2018 Shares Weighted - Average Exercise Price Shares Weighted - Average Exercise Price Outstanding at beginning of period 25,000 $ — 25,000 $ — Issued — — — — Forfeited — — — — Outstanding at end of period 25,000 — 25,000 — Stock Grants Outstanding and Exercisable Range of Exercise Prices Outstanding as of June 29, 2019 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of June 29, 2019 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $ 0.00 25,000 2.8 — — — — As of June 29, 2019, outstanding SARs and options had an intrinsic value of $1,990,010. |
Shareholder's Equity Share Repu
Shareholder's Equity Share Repurchase Program | 6 Months Ended |
Jun. 29, 2019 | |
Shareholder's Equity Share Repurchase Program [Abstract] | |
Shareholder's Equity Share Repurchase Program | Note G – Shareholder's Equity Share Repurchase Program On May 2, 2018, the Company announced that its Board of Directors had authorized a new program to repurchase up to 200,000 shares of the Company's common stock. The Company's share repurchase program does not obligate it to acquire the Company's common stock at any specific cost per share. During the second quarter and first six months of 2019, the Company did not repurchase any shares of its common stock in connection with the share repurchase program. Under this program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs Balance as of March 30, 2019 40,000 $ 26.58 40,000 160,000 March 31, 2019 – June 29, 2019 — — — — Balance as of June 29, 2019 40,000 $ 26.58 40,000 160,000 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 29, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note H – Revenue Recognition The Company's revenues result from the sale of goods and services and reflect the consideration to which the Company expects to be entitled. The Company records revenues based on a five-step model in accordance with FASB ASC Topic 606, "Revenue from Contracts with Customers." The Company has defined purchase orders as contracts in accordance with ASC Topic 606. For its customer contracts, the Company identifies its performance obligations, which are delivering goods or services, determining the transaction price, allocating the contract transaction price to the performance obligations (when applicable), and recognizing the revenue when (or as) the performance obligation is transferred to the customer. A good or service is transferred when the customer obtains control of that good or service. The Company's revenues are recorded at a point in time from the sale of tangible products. Revenues are recognized when products are shipped. The Company elected the Modified Retrospective Method (the "Cumulative Effect Method") to comply with ASC Topic 606. ASC Topic 606 was adopted on December 31, 2017, which was the first day of the Company's 2018 fiscal year. The financial effect of ASC Topic 606 on the June 29, 2019 financial statements was not significant. Customer volume rebates, product returns, discount and allowance are variable consideration and are recorded as a reduction of revenue in the same period that the related sales are recorded. The Company has reviewed the overall sales transactions for variable consideration and has determined that these costs are not material. Refer to Note L for revenues reported by segment. The Company has not experienced any impairment losses, has no future performance obligations and does not capitalize costs to obtain or fulfill contracts. |
Restructuring Costs
Restructuring Costs | 6 Months Ended |
Jun. 29, 2019 | |
Restructuring Costs [Abstract] | |
Restructuring Costs | Note I – Restructuring Costs The Company has consolidated the Composites Group by relocating the Composite Panels Technologies Division based in Salisbury, North Carolina to the Canadian Commercial Vehicle Division located in Kelowna, British Columbia. Non-recurring costs incurred in the second quarter and first six months of 2019 were $0.2 million and $1.0 million, respectively, which include the write off of inventory $0.5 million, fixed assets $0.3 million, moving costs $0.1 million, severance $0.1 million and lease termination costs. The facility was closed in April of 2019. During the second quarter of 2019, the Company discontinued the Velvac Road IQ development operations based in Bellingham, Washington. Non-recurring costs related to the discontinuation of this operation in the second quarter and the first six months of 2019 were $3.7 million in total, which included the write-off of fixed assets $0.2 million, inventory $0.6 million, intangible assets $2.4 million, severance $0.2 million, lease termination costs $0.3 million, and other non-recurring operating expenses. These costs were partially offset by the reversal of a $2.1 million contingent liability the Company established with the acquisition of Velvac in April of 2017 which was no longer applicable at June 29, 2019, resulting in a net charge to earnings of $1.6 million. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 29, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note J - Income Taxes The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With limited 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 is no longer subject to non-U.S. income tax examinations by foreign tax authorities for years prior to 2012. The Tax Cuts and Jobs Act (the "2017 Tax Act") was enacted into law on December 22, 2017. The 2017 Tax Act significantly changed U.S. corporate income tax laws by, among other provisions, reducing the maximum U.S. corporate income tax rate from 35% to 21%, effective in 2018, and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. Pursuant to SAB118, the Company is allowed a measurement period of up to one year after the enactment date of the 2017 Tax Act to finalize the recording of the related tax impacts. The Company finalized its accounting for the 2017 Tax Act during the fourth quarter of 2018, resulting in a deferred income tax benefit of $507,847 related to the re-measurement of deferred tax assets and liabilities to the new lower statutory rate of 21%. The total amount of unrecognized tax benefits could increase or decrease within the next 12 months for several reasons, including the closure of federal, state and foreign tax years by the expiration of the statute of limitations and the recognition and measurement considerations under FASB ASC Topic 740, "Income Taxes." There have been no significant changes to the amount of unrecognized tax benefits during the six months ended June 29, 2019. The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months. In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). ASU 2018-02 allows a company to elect a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-02 is effective for periods beginning after December 15, 2018. Upon adoption of ASU 2018-02, the Company did not elect to reclassify the tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. |
Retirement Benefit Plans
Retirement Benefit Plans | 6 Months Ended |
Jun. 29, 2019 | |
Retirement Benefit Plans [Abstract] | |
Retirement Benefit Plans | Note K - 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. Significant disclosures relating to these benefit plans for the second quarter of fiscal years 2019 and 2018 are as follows: Pension Benefits Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Service cost $ 527,706 $ 659,922 $ 263,854 $ 329,901 Interest cost 1,758,160 1,553,583 879,080 776,791 Expected return on plan assets (2,380,661 ) (2,609,758 ) (1,190,331 ) (1,304,878 ) Amortization of prior service cost 49,690 65,381 24,845 32,690 Amortization of the net loss 581,099 555,056 290,550 277,528 Net periodic benefit cost $ 535,994 $ 224,184 $ 267,998 $ 112,032 Postretirement Benefits Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Service cost $ 16,432 $ 18,512 $ 8,216 $ 9,256 Interest cost 40,692 38,581 20,346 19,291 Expected return on plan assets (28,963 ) (27,825 ) (14,482 ) (13,912 ) Amortization of prior service cost (2,536 ) (2,536 ) (1,268 ) (1,268 ) Amortization of the net loss (41,014 ) (32,796 ) (20,507 ) (16,398 ) Net periodic benefit cost $ (15,389 ) $ (6,064 ) $ (7,695 ) $ (3,031 ) The Company's funding policy for its qualified plans is to contribute at least the minimum amount required by applicable laws and regulations. In the fiscal year 2019, the Company expects to contribute $600,000 into its pension plans and $105,000 into its postretirement plans. As of June 29, 2019, the Company has not made contributions to its pension plans, has contributed $33,000 to its postretirement plan and will make the remaining contributions as required during the remainder of the fiscal year. The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code (the "401(k) Plan") covering substantially all U.S. non-union employees. The 401(k) Plan allows participants to make voluntary contributions from their annual compensation on a pre-tax basis, subject to limitations under the Internal Revenue Code. The 401(k) Plan provides for contributions by the Company at its discretion. The Company made contributions to the plan as follows: Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Regular matching contribution $ 293,063 $ 306,121 $ 136,796 $ 140,106 Transitional credit contribution 178,376 205,614 74,852 81,506 Non-discretionary contribution 605,129 540,831 18,088 16,458 Total contributions for the period $ 1,076,568 $ 1,052,566 $ 229,736 $ 238,070 The non-discretionary contribution of $565,748 made in the six months ended June 29, 2019, was accrued for and expensed in the prior fiscal year. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 29, 2019 | |
Segment Information [Abstract] | |
Segment Information | Note L – Segment Information Financial information by segment is as follows: Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Revenues: Sales to unaffiliated customers: Industrial Hardware $ 75,894,296 $ 72,410,627 $ 37,490,953 $ 35,853,583 Security Products 31,185,702 33,007,356 16,502,698 17,888,028 Metal Products 15,243,079 14,887,866 7,446,278 7,119,241 $ 122,323,077 $ 120,305,849 $ 61,439,929 $ 60,860,852 Income before income taxes: Industrial Hardware $ 2,015,552 $ 5,284,529 $ 747,415 $ 2,518,086 Security Products 2,875,435 2,649,180 1,902,547 1,664,041 Metal Products 402,614 626,684 309,331 206,379 Operating Profit 5,293,601 8,560,393 2,959,293 4,388,506 Interest expense (554,158 ) (608,390 ) (261,618 ) (312,060 ) Other income 600,748 444,500 586,823 225,769 $ 5,340,191 $ 8,396,503 $ 3,284,498 $ 4,302,215 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 29, 2019 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note M - Recent Accounting Pronouncements Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases ("Topic 842"). ASU 2016-02 requires lessees to present right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. The guidance is to be applied at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2018. Early adoption was 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. In March 2019, the FASB issued ASU No. 2019-01, Leases (Topic 842): Codification Improvements. ASU No. 2019-01 aligns the new leases guidance with existing guidance for the fair value of the underlying asset by lessors that are not manufacturers or dealers and clarifies an exemption for lessors and lessees from a certain interim disclosure requirement associated with adopting the FASB's new lease accounting standard. The guidance is to be applied upon adoption of Topic 842 and is effective for years beginning after December 15, 2018. See Note D – Leases. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, to clarify and address implementation issues around the new standards related to credit losses, hedging and recognizing and measuring financial instruments. Amendments in this ASU related to credit losses and hedging have the same effective dates as the respective standards unless an entity has already adopted the standards, in which case the amendments are effective for annual and interim reporting periods in 2020. Amendments in this ASU related to recognizing and measuring financial instruments are effective for annual and interim reporting periods in 2020 for public entities and nonpublic entities. The Company has not yet determined the potential impact of this ASU on its consolidated financial statements and related disclosures. 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 any other new accounting pronouncements 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 | 6 Months Ended |
Jun. 29, 2019 | |
Concentration of risk [Abstract] | |
Concentration of risk | Note N - 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 June 29, 2019, and December 29, 2018, there were no significant concentrations of credit risk. No single customer represented more than 10% of the Company's net accounts receivable as of June 29, 2019, or on December 29, 2018. 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 1.50% to 2.50%. The Company has an interest rate swap with a notional amount of $13,950,000 on June 29, 2019, 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. Additionally, interest rates on the Company's debt are susceptible to changes to the method that LIBOR rates are determined and to the potential phasing out of LIBOR after 2021. More information regarding the potential phasing out of LIBOR is discussed in greater detail under Item 7 of the Company's 2018 Form 10-K. 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 currency 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. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Earning Per Share [Abstract] | |
Denominators Used in Earnings Per Share Computations | The denominators used to calculate earnings per share are as follow: Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Basic: Weighted average shares outstanding 6,232,744 6,264,435 6,233,773 6,265,315 Diluted: Weighted average shares outstanding 6,232,744 6,264,435 6,233,773 6,265,315 Dilutive stock options 29,258 27,002 29,258 27,002 Denominator for diluted earnings per share 6,262,002 6,291,437 6,263,031 6,292,317 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Inventories [Abstract] | |
Components of Inventories | Inventories consist of the following components: June 29, 2019 December 29, 2018 Raw material and component parts $ 16,657,441 $ 17,841,166 Work in process 8,365,711 8,960,202 Finished goods 24,248,661 25,971,841 Total inventories $ 49,271,813 $ 52,773,209 |
Stock Options and Awards (Table
Stock Options and Awards (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Stock Options and Awards [Abstract] | |
Stock Appreciation Rights Activity | The following tables set forth the outstanding SARs for the period specified: Six Months Ended June 29, 2019 Year Ended December 29, 2018 Units Weighted - Average Exercise Price Units Weighted - Average Exercise Price Outstanding at beginning of period 189,167 $ 21.46 141,500 $ 20.36 Issued 36,000 26.30 51,000 24.90 Exercised (1,667 ) 19.10 -- -- Forfeited -- -- (3,333 ) 19.10 Outstanding at end of period 223,500 22.15 189,167 21.46 |
SARs Outstanding and Exercisable | SARs Outstanding and Exercisable Range of Exercise Prices Outstanding as of June 29, 2019 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of June 29, 2019 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $ 19.10-26.30 223,500 3.3 $ 22.15 38,003 2.7 19.10 |
Stock Option Activity | The following tables set forth the outstanding stock grants for the period specified: Six Months Ended June 29, 2019 Year Ended December 29, 2018 Shares Weighted - Average Exercise Price Shares Weighted - Average Exercise Price Outstanding at beginning of period 25,000 $ — 25,000 $ — Issued — — — — 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 June 29, 2019 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Exercisable as of June 29, 2019 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price $ 0.00 25,000 2.8 — — — — |
Shareholder's Equity Share Re_2
Shareholder's Equity Share Repurchase Program (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Shareholder's Equity Share Repurchase Program [Abstract] | |
Share Repurchase Program | Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs Balance as of March 30, 2019 40,000 $ 26.58 40,000 160,000 March 31, 2019 – June 29, 2019 — — — — Balance as of June 29, 2019 40,000 $ 26.58 40,000 160,000 |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Retirement Benefit Plans [Abstract] | |
Significant Disclosures Relating to Benefit Plans | Significant disclosures relating to these benefit plans for the second quarter of fiscal years 2019 and 2018 are as follows: Pension Benefits Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Service cost $ 527,706 $ 659,922 $ 263,854 $ 329,901 Interest cost 1,758,160 1,553,583 879,080 776,791 Expected return on plan assets (2,380,661 ) (2,609,758 ) (1,190,331 ) (1,304,878 ) Amortization of prior service cost 49,690 65,381 24,845 32,690 Amortization of the net loss 581,099 555,056 290,550 277,528 Net periodic benefit cost $ 535,994 $ 224,184 $ 267,998 $ 112,032 Postretirement Benefits Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Service cost $ 16,432 $ 18,512 $ 8,216 $ 9,256 Interest cost 40,692 38,581 20,346 19,291 Expected return on plan assets (28,963 ) (27,825 ) (14,482 ) (13,912 ) Amortization of prior service cost (2,536 ) (2,536 ) (1,268 ) (1,268 ) Amortization of the net loss (41,014 ) (32,796 ) (20,507 ) (16,398 ) Net periodic benefit cost $ (15,389 ) $ (6,064 ) $ (7,695 ) $ (3,031 ) |
Defined Contribution Plan | The Company made contributions to the plan as follows: Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Regular matching contribution $ 293,063 $ 306,121 $ 136,796 $ 140,106 Transitional credit contribution 178,376 205,614 74,852 81,506 Non-discretionary contribution 605,129 540,831 18,088 16,458 Total contributions for the period $ 1,076,568 $ 1,052,566 $ 229,736 $ 238,070 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Segment Information [Abstract] | |
Segment Financial Information | Financial information by segment is as follows: Six Months Ended Three Months Ended June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Revenues: Sales to unaffiliated customers: Industrial Hardware $ 75,894,296 $ 72,410,627 $ 37,490,953 $ 35,853,583 Security Products 31,185,702 33,007,356 16,502,698 17,888,028 Metal Products 15,243,079 14,887,866 7,446,278 7,119,241 $ 122,323,077 $ 120,305,849 $ 61,439,929 $ 60,860,852 Income before income taxes: Industrial Hardware $ 2,015,552 $ 5,284,529 $ 747,415 $ 2,518,086 Security Products 2,875,435 2,649,180 1,902,547 1,664,041 Metal Products 402,614 626,684 309,331 206,379 Operating Profit 5,293,601 8,560,393 2,959,293 4,388,506 Interest expense (554,158 ) (608,390 ) (261,618 ) (312,060 ) Other income 600,748 444,500 586,823 225,769 $ 5,340,191 $ 8,396,503 $ 3,284,498 $ 4,302,215 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Basic [Abstract] | ||||
Weighted average shares outstanding (in shares) | 6,233,773 | 6,265,315 | 6,232,744 | 6,264,435 |
Diluted [Abstract] | ||||
Weighted average shares outstanding (in shares) | 6,233,773 | 6,265,315 | 6,232,744 | 6,264,435 |
Dilutive stock options (in shares) | 29,258 | 27,002 | 29,258 | 27,002 |
Denominator for diluted earnings per share (in shares) | 6,263,031 | 6,292,317 | 6,262,002 | 6,291,437 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 29, 2019 | Dec. 29, 2018 |
Components of inventories [Abstract] | ||
Raw material and component parts | $ 16,657,441 | $ 17,841,166 |
Work in process | 8,365,711 | 8,960,202 |
Finished goods | 24,248,661 | 25,971,841 |
Total inventories | $ 49,271,813 | $ 52,773,209 |
Leases (Details)
Leases (Details) | 6 Months Ended | |
Jun. 29, 2019USD ($)Lease | Dec. 29, 2018USD ($) | |
Operating Lease [Abstract] | ||
Number of operating leases | Lease | 22 | |
Right of use assets | $ 10,026,397 | $ 0 |
Lease liability | 10,026,397 | $ 0 |
ASU 2016-02 [Member] | ||
Operating Lease [Abstract] | ||
Right of use assets | 10,026,397 | |
Lease liability | $ 10,026,397 | |
ASU 2016-02 [Member] | Minimum [Member] | ||
Operating Lease [Abstract] | ||
Lease extension option term | 12 months | |
ASU 2016-02 [Member] | Maximum [Member] | ||
Operating Lease [Abstract] | ||
Lease extension option term | 120 months |
Debt (Details)
Debt (Details) - USD ($) | Apr. 04, 2017 | Apr. 03, 2017 | Sep. 30, 2019 | Jun. 29, 2019 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 29, 2018 | Dec. 30, 2017 | Jun. 30, 2019 |
Disclosure of Debt [Abstract] | |||||||||
Principal payments on long-term debt | $ (5,500,000) | $ (6,275,000) | $ (775,000) | ||||||
Velvac Holdings, Inc [Member] | |||||||||
Disclosure of Debt [Abstract] | |||||||||
Percentage of common stock acquired | 100.00% | ||||||||
Restated Loan Agreement [Member] | Minimum [Member] | |||||||||
Disclosure 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] | |||||||||
Disclosure 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 | ||||||||
Term Loan [Member] | |||||||||
Disclosure of Debt [Abstract] | |||||||||
Maximum borrowing capacity | $ 31,000,000 | $ 31,000,000 | |||||||
Payments on term loan | $ (1,429,000) | ||||||||
Quarterly principal payment | $ 387,500 | ||||||||
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 | ||||||||
Term Loan [Member] | Interest Rate Swap [Member] | |||||||||
Disclosure of Debt [Abstract] | |||||||||
Fixed rate of interest | 1.92% | 1.92% | |||||||
Interest rate swap, notional amount | $ 15,500,000 | $ 13,950,000 | $ 13,950,000 | ||||||
Percentage of outstanding balance of term loan | 50.00% | ||||||||
Term Loan [Member] | 1 Month LIBOR [Member] | |||||||||
Disclosure of Debt [Abstract] | |||||||||
Fixed rate of interest | 4.09% | 4.09% | |||||||
Revolving credit loan | $ 8,400,000 | $ 8,400,000 | |||||||
Term of variable rate | 1 month | ||||||||
Term Loan [Member] | 3 Month LIBOR [Member] | |||||||||
Disclosure of Debt [Abstract] | |||||||||
Fixed rate of interest | 3.94% | 3.94% | |||||||
Revolving credit loan | $ 13,900,000 | $ 13,900,000 | |||||||
Term of variable rate | 3 months | ||||||||
Revolving Credit Loan [Member] | |||||||||
Disclosure of Debt [Abstract] | |||||||||
Maximum borrowing capacity | 10,000,000 | $ 10,000,000 | |||||||
Revolving credit loan | $ 6,600,000 | $ 0 | $ 0 | $ 5,000,000 | |||||
Payments on revolving credit note | $ (5,000,000) | $ (1,614,611) | |||||||
Maturity date of loan | Apr. 1, 2022 | ||||||||
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% | ||||||||
Revolving Credit Loan [Member] | 3 Month LIBOR [Member] | Minimum [Member] | |||||||||
Disclosure of Debt [Abstract] | |||||||||
Basis spread on variable rate | 1.50% | ||||||||
Revolving Credit Loan [Member] | 3 Month LIBOR [Member] | Maximum [Member] | |||||||||
Disclosure of Debt [Abstract] | |||||||||
Basis spread on variable rate | 2.50% |
Stock Options and Awards (Detai
Stock Options and Awards (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 29, 2019USD ($)Plan$ / sharesshares | Jun. 30, 2018USD ($)shares | Jun. 29, 2019USD ($)Plan$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Dec. 29, 2018$ / sharesshares | |
Stock Options [Abstract] | |||||
Number of plans that have shares reserved for further issuance | Plan | 1 | 1 | |||
Minimum [Member] | |||||
Stock Options [Abstract] | |||||
Percentage of fair market value of stock on grant date for exercise price | 100.00% | ||||
Stock Options [Member] | |||||
Number of Units, Stock Appreciation Rights (SARs) [Roll Forward] | |||||
Outstanding at beginning of period (in shares) | shares | 25,000 | 25,000 | 25,000 | ||
Issued (in shares) | shares | 0 | 0 | 0 | 0 | |
Forfeited (in shares) | shares | 0 | 0 | |||
Outstanding at end of period (in shares) | shares | 25,000 | 25,000 | 25,000 | ||
Weighted - Average Exercise Price, Stock Appreciation Rights (SARs) [Abstract] | |||||
Outstanding at beginning of period (in dollars per share) | $ 0 | $ 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 | $ 0 | ||
SARs Grants Outstanding and Exercisable [Abstract] | |||||
Maximum Range of Exercise Prices (in dollars per share) | $ 0 | ||||
Outstanding (in shares) | shares | 25,000 | 25,000 | |||
Weighted- Average Remaining Contractual Life | 2 years 9 months 18 days | ||||
Weighted- Average Exercise Price (in dollars per share) | $ 0 | $ 0 | |||
Exercisable (in shares) | shares | 0 | 0 | |||
Exercisable, Weighted- Average Remaining Contractual life | 0 years | ||||
Exercisable, Weighted- Average Exercise Price (in dollars per share) | $ 0 | $ 0 | |||
Stock Appreciation Rights (SARs) [Member] | |||||
Stock Options [Abstract] | |||||
Stock-based compensation expense | $ | $ 93,000 | $ 74,000 | $ 173,000 | $ 130,000 | |
Number of Units, Stock Appreciation Rights (SARs) [Roll Forward] | |||||
Outstanding at beginning of period (in shares) | shares | 189,167 | 141,500 | 141,500 | ||
Issued (in shares) | shares | 36,000 | 51,000 | |||
Exercised (in shares) | shares | (1,667) | 0 | |||
Forfeited (in shares) | shares | 0 | (3,333) | |||
Outstanding at end of period (in shares) | shares | 223,500 | 223,500 | 189,167 | ||
Weighted - Average Exercise Price, Stock Appreciation Rights (SARs) [Abstract] | |||||
Outstanding at beginning of period (in dollars per share) | $ 21.46 | $ 20.36 | $ 20.36 | ||
Issued (in dollars per share) | 26.30 | 24.90 | |||
Exercised (in dollars per share) | 19.10 | 0 | |||
Forfeited (in dollars per share) | 0 | 19.10 | |||
Outstanding at end of period (in dollars per share) | $ 22.15 | 22.15 | $ 21.46 | ||
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) | $ 26.30 | ||||
Outstanding (in shares) | shares | 223,500 | 223,500 | |||
Weighted- Average Remaining Contractual Life | 3 years 3 months 18 days | ||||
Weighted- Average Exercise Price (in dollars per share) | $ 22.15 | $ 22.15 | |||
Exercisable (in shares) | shares | 38,003 | 38,003 | |||
Exercisable, Weighted- Average Remaining Contractual life | 2 years 8 months 12 days | ||||
Exercisable, Weighted- Average Exercise Price (in dollars per share) | $ 19.10 | $ 19.10 | |||
Restricted Stock [Member] | |||||
Stock Options [Abstract] | |||||
Issued (in shares) | shares | 0 | 0 | |||
Stock Options and SARs [Member] | |||||
SARs Grants Outstanding and Exercisable [Abstract] | |||||
Outstanding options, intrinsic value | $ | $ 1,990,010 | $ 1,990,010 | |||
2010 Plan [Member] | |||||
Stock Options [Abstract] | |||||
Expected term | 3 years 6 months | 3 years 6 months | |||
Volatility deviation | 28.88% | 29.50% | |||
Risk free rate | 2.48% | 2.33% | |||
Shares available for future grant (in shares) | shares | 238,500 | 238,500 |
Shareholder's Equity Share Re_3
Shareholder's Equity Share Repurchase Program (Details) - $ / shares | 6 Months Ended | |
Jun. 29, 2019 | May 02, 2018 | |
Shareholder's Equity Share Repurchase Program [Abstract] | ||
Number of shares authorized to be repurchased (in shares) | 200,000 | |
Total Number of Shares Purchased [Roll Forward] | ||
Number of shares purchased at beginning of period (in shares) | 40,000 | |
Number of shares purchased (in shares) | 0 | |
Number of shares purchased at end of period (in shares) | 40,000 | |
Average Price Paid Per Share [Roll Forward] | ||
Average price paid per share at beginning of period (in dollars per share) | $ 26.58 | |
Average price paid per share (in dollars per share) | 0 | |
Average price paid per share at end of period (in dollars per share) | $ 26.58 | |
Number of Shares Purchased As Part of Publicly Announced Plans or Programs [Roll Forward] | ||
Number of shares purchased as part of publicly announced plans or programs at beginning of period (in shares) | 40,000 | |
Number of shares purchased as part of publicly announced plans or programs (in shares) | 0 | |
Number of shares purchased as part of publicly announced plans or programs at end of period (in shares) | 40,000 | |
Number of Shares that May Yet be Purchased Under the Plans or Programs [Roll Forward] | ||
Maximum number of shares that may yet be purchased under the plans or programs at beginning of period (in shares) | 160,000 | |
Maximum number of shares that may yet be purchased under the plans or programs (in shares) | 0 | |
Maximum number of shares that may yet be purchased under the plans or programs at end of period (in shares) | 160,000 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 29, 2019 | Jun. 29, 2019 | Jun. 30, 2018 | |
Velvac Road IQ Discontinue Operation [Member] | |||
Restructuring Costs [Abstract] | |||
Non-recurring costs incurred | $ 3.7 | $ 3.7 | |
Inventory Write-down | 0.6 | ||
Write off of fixed assets | 0.2 | ||
Write off of intangible assets | 2.4 | ||
Severance | 0.2 | ||
Lease termination cost | 0.3 | ||
Contingent liability reversal | 2.1 | ||
Net charge to earnings | 1.6 | ||
Composites Group Restructuring Program [Member] | |||
Restructuring Costs [Abstract] | |||
Non-recurring costs incurred | 0.2 | $ 1 | |
Inventory Write-down | 0.5 | ||
Write off of fixed assets | 0.3 | ||
Moving costs | 0.1 | ||
Severance | $ 0.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 29, 2018 | Jun. 29, 2019 | Dec. 30, 2017 | |
Income Taxes [Abstract] | |||
Corporate income tax rate | 21.00% | 35.00% | |
Income tax expense (benefit) | $ (507,847) | ||
Significant changes to the amount of unrecognized tax benefits | $ 0 |
Retirement Benefit Plans, Net P
Retirement Benefit Plans, Net Periodic Benefit Cost (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Pension Benefits [Member] | ||||
Components of the net periodic benefit cost [Abstract] | ||||
Service cost | $ 263,854 | $ 329,901 | $ 527,706 | $ 659,922 |
Interest cost | 879,080 | 776,791 | 1,758,160 | 1,553,583 |
Expected return on plan assets | (1,190,331) | (1,304,878) | (2,380,661) | (2,609,758) |
Amortization of prior service cost | 24,845 | 32,690 | 49,690 | 65,381 |
Amortization of the net loss | 290,550 | 277,528 | 581,099 | 555,056 |
Net periodic benefit cost | 267,998 | 112,032 | 535,994 | 224,184 |
Additional information [Abstract] | ||||
Contributions expected to be made by Company in next fiscal year | 600,000 | 600,000 | ||
Employer contributions | 0 | |||
Postretirement Benefits [Member] | ||||
Components of the net periodic benefit cost [Abstract] | ||||
Service cost | 8,216 | 9,256 | 16,432 | 18,512 |
Interest cost | 20,346 | 19,291 | 40,692 | 38,581 |
Expected return on plan assets | (14,482) | (13,912) | (28,963) | (27,825) |
Amortization of prior service cost | (1,268) | (1,268) | (2,536) | (2,536) |
Amortization of the net loss | (20,507) | (16,398) | (41,014) | (32,796) |
Net periodic benefit cost | (7,695) | $ (3,031) | (15,389) | $ (6,064) |
Additional information [Abstract] | ||||
Contributions expected to be made by Company in next fiscal year | $ 105,000 | 105,000 | ||
Employer contributions | $ 33,000 |
Retirement Benefit Plans, Defin
Retirement Benefit Plans, Defined Contribution Plan (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Defined Contribution Plan [Abstract] | ||||
Total contributions for the period | $ 229,736 | $ 238,070 | $ 1,076,568 | $ 1,052,566 |
Regular Matching Contribution [Member] | ||||
Defined Contribution Plan [Abstract] | ||||
Total contributions for the period | 136,796 | 140,106 | 293,063 | 306,121 |
Transitional Credit Contribution [Member] | ||||
Defined Contribution Plan [Abstract] | ||||
Total contributions for the period | 74,852 | 81,506 | 178,376 | 205,614 |
Non-discretionary Contribution [Member] | ||||
Defined Contribution Plan [Abstract] | ||||
Total contributions for the period | $ 18,088 | $ 16,458 | 605,129 | $ 540,831 |
Non-Union U.S. Employees [Member] | ||||
Defined Contribution Plan [Abstract] | ||||
Total contributions for the period | $ 565,748 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Abstract] | ||||
Revenues, sales to unaffiliated customers | $ 61,439,929 | $ 60,860,852 | $ 122,323,077 | $ 120,305,849 |
Operating Profit | 2,959,293 | 4,388,506 | 5,293,601 | 8,560,393 |
Interest expense | (261,618) | (312,060) | (554,158) | (608,390) |
Other income | 586,823 | 225,769 | 600,748 | 444,500 |
Income before income taxes | 3,284,498 | 4,302,215 | 5,340,191 | 8,396,503 |
Operating Segments [Member] | Industrial Hardware [Member] | ||||
Segment Reporting Information [Abstract] | ||||
Revenues, sales to unaffiliated customers | 37,490,953 | 35,853,583 | 75,894,296 | 72,410,627 |
Operating Profit | 747,415 | 2,518,086 | 2,015,552 | 5,284,529 |
Operating Segments [Member] | Security Products [Member] | ||||
Segment Reporting Information [Abstract] | ||||
Revenues, sales to unaffiliated customers | 16,502,698 | 17,888,028 | 31,185,702 | 33,007,356 |
Operating Profit | 1,902,547 | 1,664,041 | 2,875,435 | 2,649,180 |
Operating Segments [Member] | Metal Products [Member] | ||||
Segment Reporting Information [Abstract] | ||||
Revenues, sales to unaffiliated customers | 7,446,278 | 7,119,241 | 15,243,079 | 14,887,866 |
Operating Profit | $ 309,331 | $ 206,379 | $ 402,614 | $ 626,684 |
Concentration of risk (Details)
Concentration of risk (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 29, 2019USD ($)Customer | Dec. 29, 2018Customer | Apr. 04, 2017USD ($) | |
Term Loan [Member] | 3 Month LIBOR [Member] | |||
Interest Rate Risk [Abstract] | |||
Term of variable rate | 3 months | ||
Term Loan [Member] | Interest Rate Swap [Member] | |||
Interest Rate Risk [Abstract] | |||
Interest rate swap, notional amount | $ | $ 13,950,000 | $ 15,500,000 | |
Revolving Credit Loan [Member] | 3 Month LIBOR [Member] | Minimum [Member] | |||
Interest Rate Risk [Abstract] | |||
Basis spread on variable rate | 1.50% | ||
Revolving Credit Loan [Member] | 3 Month LIBOR [Member] | Maximum [Member] | |||
Interest Rate Risk [Abstract] | |||
Basis spread on variable 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% |