The Eastern Company (EML) 10-Q 6 May 24 2024 Q1 Quarterly report Financial data

Cover

Cover	3 Months Ended
	Mar. 30, 2024 shares
Cover [Abstract]
Entity Registrant Name	THE EASTERN COMPANY
Entity Central Index Key	0000031107
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-30
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 30, 2024
Entity Filer Category	Accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Entity Common Stock Shares Outstanding	6,233,510
Entity File Number	001-35383
Entity Incorporation State Country Code	CT
Entity Tax Identification Number	06-0330020
Entity Address Address Line 1	3 Enterprise Drive
Entity Address Address Line 2	Suite 408
Entity Address City Or Town	Shelton
Entity Address State Or Province	CT
Entity Address Postal Zip Code	06484
City Area Code	203
Local Phone Number	729-2255
Security 12b Title	Common Stock, No Par Value
Trading Symbol	EML
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($)	3 Months Ended
	Mar. 30, 2024	Apr. 01, 2023
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Net sales	$ 67,929,087	$ 72,495,367
Cost of products sold	(51,732,988)	(56,997,668)
Gross margin	16,196,099	15,497,699
Product development expense	(1,359,797)	(1,401,199)
Selling and administrative expenses	(11,498,958)	(11,937,637)
Operating profit	3,337,344	2,158,863
Interest expense	(845,035)	(726,006)
Other income (expense)	10,354	(630,699)
Income before income taxes	2,502,663	802,158
Income tax expense	(555,091)	(194,845)
Net income	$ 1,947,572	$ 607,313
Earnings per share:
Basic	$ 0.31	$ 0.10
Diluted	0.31	0.10
Cash dividends per share:	$ 0.11	$ 0.11

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($)	3 Months Ended
	Mar. 30, 2024	Apr. 01, 2023
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Net income	$ 1,947,572	$ 607,313
Other comprehensive (loss) income:
Change in foreign currency translation	(157,000)	336,585
Change in fair value of foreign currency swap, net of tax cost (benefit) of: 2024 - $96,724; 2023 - $(87,691)	403,016	(277,687)
Change in pension and postretirement benefit costs, net of taxes of: 2024 - $71,355; 2023 - $74,360	243,336	252,668
Total other comprehensive income (loss)	489,352	311,566
Comprehensive income	$ 2,436,924	$ 918,879

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 30, 2024	Dec. 30, 2023
Current Assets
Cash and cash equivalents	$ 7,356,444	$ 8,299,453
Marketable Securities	2,127,735	986,477
Accounts receivable, less allowances: 2024 - $541,103; 2023 - $564,816	42,881,758	37,057,488
Inventories	55,847,071	59,272,207
Current portion of notes receivable	618,231	573,269
Prepaid expenses and other assets	6,199,897	6,047,814
Total Current Assets	115,031,136	112,236,708
Property, Plant and Equipment	61,842,148	60,270,096
Accumulated depreciation	(32,710,475)	(31,980,335)
Property, Plant and Equipment, Net	29,131,673	28,289,761
Goodwill	70,722,962	70,776,893
Trademarks	5,514,884	5,514,960
Patents and other intangibles net of accumulated amortization	14,360,192	15,325,927
Long term notes receivable, less current portion	329,970	374,932
Deferred Income Taxes	2,283,571	2,283,571
Right of Use Assets	16,521,127	17,236,449
Total Other Assets	109,732,706	111,512,732
TOTAL ASSETS	253,895,515	252,039,201
Current Liabilities
Accounts payable	26,971,547	25,319,473
Accrued compensation	4,636,088	5,379,381
Other accrued expenses	4,874,024	4,556,623
Current portion of operating lease liability	4,195,865	4,424,369
Current portion of finance lease liability	182,290	182,010
Current portion of long-term debt	2,871,870	2,871,870
Total Current Liabilities	43,731,684	42,733,726
Other long-term liabilities	640,724	640,724
Operating lease liability, less current portion	12,325,261	12,812,079
Finance lease liability, less current portion	696,584	728,100
Long-term debt, less current portion	40,271,398	41,063,865
Accrued postretirement benefits	565,727	554,758
Accrued pension cost	21,150,758	21,025,365
Total Liabilities	119,382,136	119,558,617
Shareholders' Equity
Common Stock, no par value, Authorized: 50,000,000 shares Issued: 9,118,031 shares as of 2024 and 9,091,815 shares as of 2023 Outstanding: 6,233,510 shares as of 2024 and 6,217,370 shares as of 2023	34,464,595	33,950,859
Treasury Stock: 2,884,521 shares as of 2024 and 2,874,445 shares as of 2023	(23,515,267)	(23,280,467)
Retained earnings	146,069,675	144,805,168
Accumulated other comprehensive loss:
Foreign currency translation	(1,023,599)	(866,599)
Unrealized gain on foreign currency swap, net of tax	403,016	0
Unrecognized net pension and postretirement benefit costs, net of tax	(21,885,041)	(22,128,377)
Accumulated other comprehensive loss	(22,505,624)	(22,994,976)
Total Shareholders' Equity	134,513,379	132,480,584
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 253,895,515	$ 252,039,201

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 30, 2024	Dec. 30, 2023
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts	$ 541,103	$ 564,816
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)	9,118,031	9,091,815
Common Stock, shares outstanding (in shares)	6,233,510	6,217,370
Treasury Stock, shares (in shares)	2,884,521	2,874,445

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 30, 2024	Apr. 01, 2023
Operating Activities
Net income	$ 1,947,572	$ 607,313
Depreciation and amortization	1,876,124	1,814,749
Reduction in carrying amount of ROU assets	715,322	631,368
Unrecognized pension and postretirement benefits	445,218	880,421
Loss on sale of equipment and other assets	37,330	0
Provision for doubtful accounts	(23,000)	3,269
Stock compensation expense (benefit)	513,737	(49,246)
Changes in operating assets and liabilities:
Accounts receivable	(5,898,945)	(1,585,976)
Inventories	3,415,931	7,212,179
Prepaid expenses and other	(109,507)	(37,330)
Other assets	21,710	(155,055)
Accounts payable	3,601,059	(1,031,704)
Accrued compensation	(1,000,332)	(1,104,186)
Change in operating lease liability	(715,322)	(639,987)
Other accrued expenses	(1,248,705)	314,443
Net cash provided by operating activities	3,578,192	6,860,258
Investing Activities
Marketable securities	(999,960)	0
Payments received from notes receivable	0	2,233,192
Proceeds from sale of equipment	18,000	0
Purchases of property, plant, and equipment	(1,776,954)	(1,151,205)
Net cash (used in) provided by investing activities	(2,758,914)	1,081,987
Financing Activities
Payments on short term borrowings (revolver)	0	(268,249)
Principal payments on long-term debt	(792,467)	(4,858,000)
Financing leases, net	(31,236)	723,254
Purchase common stock for treasury	(234,800)	0
Dividends paid	(683,065)	(684,293)
Net cash used in financing activities	(1,741,568)	(5,087,288)
Effect of exchange rate changes on cash	(20,719)	28,538
Net change in cash and cash equivalents	(943,009)	2,883,495
Cash and cash equivalents at beginning of period	8,299,453
Cash and cash equivalents at end of period	7,356,444	13,071,017
Supplemental disclosure of cash flow information:
Interest	831,462	716,763
Income taxes	230,523	(59,681)
Non-cash investing and financing activities
Right of use asset	140,939	(652,914)
Lease liability	$ (140,939)	$ (328,721)

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 30, 2024
Basis of Presentation
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 Rule 8-03 of Regulation S-X and do not include all the information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. Refer to the consolidated financial statements of The Eastern Company (together with its consolidated subsidiaries, the “Company,” “we,” “us” or “our”) and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2023, filed with the Securities and Exchange Commission on March 12, 2024 (the “2023 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. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. All intercompany accounts and transactions are eliminated. The condensed consolidated balance sheet as of December 30, 2023 has been derived from the audited consolidated balance sheet at that date. The Company’s fiscal year is a 52-53-week fiscal year ending on the Saturday nearest to December 31. References to 2023, the 2023 fiscal year or fiscal 2023 mean the 52-week period ended on December 30, 2023, and references to 2024, the 2024 fiscal year or fiscal 2024 mean the 52-week period ending on December 28, 2024. In a 52-week fiscal year, each quarter has 13 weeks. References to the first quarter of 2023, the first fiscal quarter of 2023, the first quarter of fiscal 2023 or the three months ended April 1, 2023, mean the period from January 1, 2023 to April 1, 2023. References to the first quarter of 2024, the first fiscal quarter of 2024, the first fiscal quarter of 2024 or the three months ended March 30, 2024, mean the 13-week period from December 31, 2023 to March 30, 2024. Certain amounts in the 2023 financial statements have been reclassified to conform with the 2024 presentation with no impact or change to previously reported net income or shareholders’ equity.

Earnings per Share

Earnings per Share	3 Months Ended
	Mar. 30, 2024
Earnings per share:
Earnings per Share	Note B – Earnings Per Share The denominators used to calculate earnings per share are as follows: Three Months Ended March 30, 2024 April 1, 2023 Basic: Weighted average shares outstanding 6,215,673 6,223,027 Diluted: Weighted average shares outstanding 6,215,673 6,223,027 Dilutive stock appreciation rights 39,727 10,962 Denominator for diluted earnings per share 6,255,400 6,233,989

Fair Value of Instruments

Fair Value of Instruments	3 Months Ended
	Mar. 30, 2024
Fair Value of Instruments
Fair Value of Instruments	Note C – Fair Value of 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 marketable securities (Level 1) and pension assets, see Note L, Retirement Benefit Plans The carrying amounts of other financial instruments (cash and cash equivalents, marketable securities, accounts receivable, accounts payable and debt) as of March 30, 2024 and December 30, 2023, approximate fair value because of their short-term nature and market-based interest rates.

Inventories

Inventories	3 Months Ended
	Mar. 30, 2024
Inventories
Inventories	Note D – Inventories Inventories consist of the following components: March 30, 2024 December 30, 2023 Raw material and component parts $ 23,084,312 $ 24,500,087 Work in process 9,381,683 9,957,068 Finished goods 23,381,076 24,815,052 Total inventories $ 55,847,071 $ 59,272,207

Goodwill

Goodwill	3 Months Ended
	Mar. 30, 2024
Goodwill
Goodwill	Note E - Goodwill The aggregate carrying amount of goodwill is approximately $70.7 million as of March 30, 2024. No impairment was recognized in the first quarter of 2024. The Company evaluates its reporting units for impairment annually in December, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Such events and circumstances could include, among other things, increased competition or unexpected loss of market share, significant adverse changes in the markets in which the Company operates, or unexpected business disruptions. The Company tests reporting units for impairment by comparing the estimated fair value of each reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its estimated fair value, the Company records an impairment loss based on the difference between fair value and carrying amount not to exceed the associated carrying amount of goodwill. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. The values assigned to the key assumptions represent management’s assessment of future trends in the relevant industry and have been based on historical data from both external and internal sources.

Leases

Leases	3 Months Ended
	Mar. 30, 2024
Leases
Leases	Note F – Leases The Company presents right-of-use (ROU) assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases. The Company accounts for non-lease components as part of the lease component to which they relate. Lease accounting involves significant judgements, including making estimates related to the lease term, lease payments, and discount rate. The Company has operating leases for buildings, warehouses, and office equipment. The Company determines whether an arrangement is, or contains, a lease at contract inception. An arrangement contains a lease if the Company has the right to direct the use of and obtain substantially all the economic benefits of an identified asset. ROU assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew. The exercise of lease renewal options is at our sole discretion. All options to extend, when it is reasonably certain the option will be exercised, have been included in the calculation of the ROU asset and lease liability. Currently, the Company has twenty-two operating leases with a lease liability of $16.5 million and two finance leases with a lease liability of $0.9 million as of March 30, 2024. The terms and conditions of the leases are determined by the individual agreements. The leases do not contain residual value guarantees, restrictions, or covenants that could cause the Company to incur additional financial obligations. There are no related party lease transactions. There are no leases that have not yet commenced that could create significant rights and obligations for the Company. The future payments (in millions) due under non-cancelable operating and finance leases as of March 30, 2024 are as follows: Operating Finance 2024 $ 3.2 $ 0.1 2025 3.2 0.2 2026 2.5 0.2 2027 and thereafter 10.2 0.6 19.1 1.1 Less effects of discounting (2.6 ) (0.2 ) Lease liabilities recognized $ 16.5 $ 0.9 As of March 30, 2024, the weighted average lease term for all operating and finance leases is 7.0 and 5.8 years, respectively. The weighted average discount rate associated with operating and finance leases was 6.3% and 6.4%, respectively.

Debt

Debt	3 Months Ended
	Mar. 30, 2024
Debt
Debt	Note G - Debt On June 16, 2023, the Company entered into a credit agreement with TD Bank, N.A., Wells Fargo Bank, Bank of America, and M&T Bank as lenders (the “Credit Agreement”), that included a $60 million term portion and a $30 million revolving commitment portion. The proceeds of the term loan were used to repay the Company’s remaining outstanding term loan and to terminate its existing credit facility with Santander Bank, N.A. (approximately $59 million). The term loan portion of the credit facility requires quarterly principal payments of (i) $750,000 beginning on September 30, 2023 through June 30, 2025, (ii) $1,125,000 beginning on September 30, 2025 through June 30, 2027, and (iii) $1,500,000 beginning on September 30, 2027 through March 31, 2028, with the balance of the term loan payable on the maturity date of June 16, 2028. Amounts outstanding under the revolving portion of the credit facility are generally due and payable on the expiration date of the Credit Agreement (June 16, 2028). The Company can elect to prepay some or all the outstanding balance from time to time without penalty. A commitment fee is payable on the unused portion of the revolving credit facility based on the Company’s consolidated ratio of net debt to adjusted EBITDA from time to time. Currently, the commitment fee is 0.30%. The Company has no borrowings outstanding under the revolving commitment portion of the credit facility as of March 30, 2024. The term loan bears interest at a variable rate based on the term secured overnight financing rate (“SOFR”), plus an adjustment of ten basis points, plus an applicable margin of 1.875% to 2.625%, depending on the Company’s senior net leverage ratio. Borrowings under the revolving portion bear interest at a variable rate based on, at the Company’s election, a base rate plus an applicable margin of 0.875% to 1.625% or term SOFR, plus an adjustment of ten basis points, plus an applicable margin of 1.875% to 2.625%, with such margins determined based on the Company’s senior net leverage ratio. The Company’s obligations under the Credit Agreement are secured by a lien on certain of the Company’s and its subsidiaries’ assets pursuant to a Pledge and Security Agreement, dated as of June 16, 2023, with TD Bank N.A., as administrative agent. The Company’s loan covenants under the Credit Agreement require the Company to maintain a senior net leverage ratio not to exceed 3.5 to 1. In addition, the Company is required to maintain a fixed charge coverage ratio to be not less than 1.25 to 1. The Company was in compliance with all its covenants under the Credit Agreement on March 30, 2024, and through the date of filing this Form 10-Q.

Stock Options and awards

Stock Options and awards	3 Months Ended
	Mar. 30, 2024
Stock Options and awards
Stock Options and awards	Note H - Stock Options and Awards On February 19, 2020, the Board of Directors of the Company (the “Board”) adopted the Eastern Company 2020 Stock Incentive Plan (the “2020 Plan”), which replaced The Eastern Company 2010 Executive Stock Incentive Plan after its expiration in February 2020. On April 29, 2020, at the Company’s 2020 Annual Meeting of Shareholders, the shareholders of the Company approved and adopted the 2020 Plan. The Company has no other existing plan pursuant to which equity awards may be granted. Incentive stock options granted under the 2020 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 2020 Plan with restrictions determined by the Compensation Committee of the Board. Under the 2020 Plan, non-qualified stock options granted to participants will have exercise prices determined by the Compensation Committee of the Board. The Company did not grant any stock awards during the first three months of fiscal 2024 and fiscal 2023. For the first three months of fiscal years 2024 and 2023, the Company used fair market value to determine the associated expense with stock awards. The 2020 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. The Company did not issue any SARs during the first three months of fiscal 2024 and 2023. Stock-based compensation expense (income), including forfeitures, in connection with SARs and stock awards previously granted to employees was approximately $434,000 and $(184,000) in the first quarter of 2024 and the first quarter of 2023, respectively. As of March 30, 2024, there were 879,924 shares of Company common stock reserved and available for future grant under the 2020 Plan. The following tables set forth the outstanding SARs for the period specified: Three Months Ended Year Ended March 30, 2024 December 30, 2023 Units Weighted Average Exercise Price Units Weighted Average Exercise Price Outstanding at beginning of period 13,000 $ 24.19 146,166 $ 23.22 Expired (9,000 ) 26.30 (50,833 ) 24.24 Exercised - - (33,333 ) 21.10 Forfeited - - (49,000 ) 22.80 Outstanding at end of period 4,000 $ 20.20 13,000 $ 24.19 SARs Outstanding and Exercisable Range of Exercise Prices Outstanding as of March 30, 2024 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Exercisable as of March 30, 2024 Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 20.20 4,000 1.1 $ 20.20 4,000 1.1 $ 20.20 The following tables set forth the outstanding stock awards for the period specified: Three Months Ended Year Ended March 30, 2024 December 30, 2023 Shares Shares Outstanding at beginning of period 89,400 64,500 Issued - 82,800 Exercised (23,734 ) (10,600 ) Forfeited (1,433 ) (47,300 ) Outstanding at end of period 64,233 89,400 As of March 30, 2024, outstanding SARs and stock awards had an intrinsic value of $2,245,274.

Share Repurchase Program

Share Repurchase Program	3 Months Ended
	Mar. 30, 2024
Share Repurchase Program
Share Repurchase Program	Note I – Share Repurchase Program On August 21, 2023, the Company announced that the Board of Directors of the Company had approved a new share repurchase program authorizing the Company to repurchase up to 200,000 shares of the Company’s common stock through August 20, 2028. The Company’s share repurchase program does not obligate it to acquire the Company’s common stock at any specific cost per share. 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. Below is a summary of the Company’s shares repurchased during the first quarter of 2024 under the new 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 December 30, 2023 40,000 $ 18.39 40,000 160,000 December 31, 2024 – March 30, 2024 10,076 23.30 10,076 149,924 Balance as of March 30, 2024 50,076 $ 19.38 50,076 149,924

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 30, 2024
Revenue Recognition
Revenue Recognition	Note J – 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 in accordance with FASB Accounting Standards Codification (“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, determines the transaction price, allocates the contract transaction price to the performance obligations (when applicable), and recognizes 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. Customer volume rebates, product returns, discount and allowance are variable considerations 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. The Company has no future performance obligations and does not capitalize costs to obtain or fulfill contracts.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 30, 2024
Income Taxes
Income Taxes	Note K - Income Taxes The Company files income tax returns in the U.S. federal jurisdiction, and in 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 2019 and is no longer subject to non-U.S. income tax examinations by foreign tax authorities for years prior to 2017. 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 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 value of unrecognized tax benefits during the three months ended March 30, 2024. 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.

Retirement Benefit Plans

Retirement Benefit Plans	3 Months Ended
	Mar. 30, 2024
Retirement Benefit Plans
Retirement Benefit Plans	Note L - Retirement Benefit Plans The Company has four non-contributory defined benefit pension plans covering most U.S. employees. All of these pension plans are frozen and participants in these plans have not accrued benefits since the date on which these plans were frozen. Plan benefits are generally based upon age at retirement, years of service and, for the plan covering salaried employees, 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 first quarter of fiscal years 2024 and 2023 are as follows: Pension Benefits Three Months Ended March 30, 2024 April 1, 2023 Service cost $ 178,003 $ 216,153 Interest cost 966,702 990,054 Expected return on plan assets (1,099,035 ) (1,049,016 ) Amortization of the net loss 327,365 342,865 Net periodic benefit cost $ 373,035 $ 500,056 Other Postretirement Benefits Three Months Ended March 30, 2024 April 1, 2023 Service cost $ 3,574 $ 6,486 Interest cost 12,951 14,533 Expected return on plan assets (4,684 ) (4,849 ) Amortization of prior service cost 1,060 1,060 Amortization of the net loss (19,567 ) (16,895 ) Net periodic benefit (gain) cost $ (6,666 ) $ 335 The Company’s funding policy with respect to its qualified plans is to contribute at least the minimum amount required by applicable laws and regulations. In fiscal year 2024, the Company expects to make cash contributions to its qualified pension plans of approximately $2,100,000 and approximately $50,000 into its other postretirement plan. As of March 30, 2024, the Company has contributed $450,000 to its pension plans and $7,000 to its postretirement plan and expects to 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 401(k) Plan as follows: Three Months Ended March 30, 2024 April 1, 2023 Regular matching contribution $ 285,563 $ 252,761 Transitional credit contribution 28,906 34,320 Non-discretionary contribution 110,890 431,950 Total contributions for the period $ 425,359 $ 719,031 The non-discretionary contribution of $328,953 made in the three months ended April 1, 2023, was accrued for, and expensed in the prior fiscal year. Effective January 1, 2023, the non-discretionary contributions are being contributed on a weekly basis.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Mar. 30, 2024
Recent Accounting Pronouncements
Recent Accounting Pronouncements	Note M - Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which amends the reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We do not expect this new standard to have a significant impact on our disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit disaggregated between domestic and foreign and (3) income tax expense or benefit from continuing operations disaggregated by federal, state, and foreign. The update also requires entities to disclose their income tax payments to various jurisdictions. This standard is effective for fiscal years beginning after December 15, 2024. We do not expect this new standard to have a significant impact on our 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 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	3 Months Ended
	Mar. 30, 2024
Concentration of risk
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 March 30, 2024, there was one significant concentration of credit risk with a customer, who had receivables representing 12% of our net accounts receivable. One single customer represented 12% of the Company’s net accounts receivable as of December 30, 2023. The maximum exposure to credit risk is primarily represented by the carrying amount of the Company’s accounts receivable. The Company has deposits that exceed amounts up to $250,000 that are insured by the Federal Deposit Insurance Corporation (FDIC), but the Company does not consider this a significant concentration of credit risk based on the strength of the financial institution. 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 term SOFR, plus an adjustment of ten basis points, plus an applicable margin of 1.875% to 2.625%, depending on the Company’s senior net leverage ratio. Currency Exchange Rate Risk The Company’s currency exposure is concentrated in the Canadian dollar, Mexican peso, New Taiwan dollar, Chinese RMB, and 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.

Business Acquisition

Business Acquisition	3 Months Ended
	Mar. 30, 2024
Business Acquisition
Business Acquisition	Note O – Business Acquisition On June 29, 2023, the Company acquired certain assets, including accounts receivable, inventories, furniture, fixtures and equipment, intellectual property rights, and rights existing under all sales and purchase agreements, and assumed certain liabilities of Sureflex, Inc. (“Sureflex”). These assets are held in our Velvac, Inc. (“Velvac”) subsidiary. We expect that Sureflex, which manufactures tractor-trailer electrical connection cable assemblies, will enable the Company to manufacture electrical products and become more competitive with respect to cost and quality. The acquisition of Sureflex was accounted for under Business Combinations (ASC Topic 805). The acquired business is included in the consolidated operating results of the Company from the effective date of the acquisition. The excess of the cost of Sureflex over the fair market value of the net assets acquired of $0.5 million has been recorded as goodwill. Neither the actual results nor the pro forma effects of the Sureflex acquisition are material to the Company’s financial statements.

Earnings per Share (Tables)

Earnings per Share (Tables)	3 Months Ended
	Mar. 30, 2024
Earnings per share:
Schedule of Denominators Used in Earnings Per Share Computations	Three Months Ended March 30, 2024 April 1, 2023 Basic: Weighted average shares outstanding 6,215,673 6,223,027 Diluted: Weighted average shares outstanding 6,215,673 6,223,027 Dilutive stock appreciation rights 39,727 10,962 Denominator for diluted earnings per share 6,255,400 6,233,989

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 30, 2024
Inventories
Schedule of Inventories from continuing operations	March 30, 2024 December 30, 2023 Raw material and component parts $ 23,084,312 $ 24,500,087 Work in process 9,381,683 9,957,068 Finished goods 23,381,076 24,815,052 Total inventories $ 55,847,071 $ 59,272,207

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 30, 2024
Leases
Schedule of Future Minimum Payments Under Non-Cancelable Operating Leases	Operating Finance 2024 $ 3.2 $ 0.1 2025 3.2 0.2 2026 2.5 0.2 2027 and thereafter 10.2 0.6 19.1 1.1 Less effects of discounting (2.6 ) (0.2 ) Lease liabilities recognized $ 16.5 $ 0.9

Stock Options and awards (Table

Stock Options and awards (Tables)	3 Months Ended
	Mar. 30, 2024
Stock Options and awards
Schedule of Stock Appreciation Rights Activity	Three Months Ended Year Ended March 30, 2024 December 30, 2023 Units Weighted Average Exercise Price Units Weighted Average Exercise Price Outstanding at beginning of period 13,000 $ 24.19 146,166 $ 23.22 Expired (9,000 ) 26.30 (50,833 ) 24.24 Exercised - - (33,333 ) 21.10 Forfeited - - (49,000 ) 22.80 Outstanding at end of period 4,000 $ 20.20 13,000 $ 24.19
Schedule of SARs Outstanding and Exercisable	SARs Outstanding and Exercisable Range of Exercise Prices Outstanding as of March 30, 2024 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Exercisable as of March 30, 2024 Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 20.20 4,000 1.1 $ 20.20 4,000 1.1 $ 20.20
Schedule of Outstanding Stock Grants	Three Months Ended Year Ended March 30, 2024 December 30, 2023 Shares Shares Outstanding at beginning of period 89,400 64,500 Issued - 82,800 Exercised (23,734 ) (10,600 ) Forfeited (1,433 ) (47,300 ) Outstanding at end of period 64,233 89,400

Share Repurchase Program (Table

Share Repurchase Program (Tables)	3 Months Ended
	Mar. 30, 2024
Share Repurchase Program
Schedule of Company's shares repurchased	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 December 30, 2023 40,000 $ 18.39 40,000 160,000 December 31, 2024 – March 30, 2024 10,076 23.30 10,076 149,924 Balance as of March 30, 2024 50,076 $ 19.38 50,076 149,924

Retirement Benefit Plans (Table

Retirement Benefit Plans (Tables)	3 Months Ended
	Mar. 30, 2024
Retirement Benefit Plans
Schedule of Significant Disclosures Relating to Benefit Plans	Pension Benefits Three Months Ended March 30, 2024 April 1, 2023 Service cost $ 178,003 $ 216,153 Interest cost 966,702 990,054 Expected return on plan assets (1,099,035 ) (1,049,016 ) Amortization of the net loss 327,365 342,865 Net periodic benefit cost $ 373,035 $ 500,056 Other Postretirement Benefits Three Months Ended March 30, 2024 April 1, 2023 Service cost $ 3,574 $ 6,486 Interest cost 12,951 14,533 Expected return on plan assets (4,684 ) (4,849 ) Amortization of prior service cost 1,060 1,060 Amortization of the net loss (19,567 ) (16,895 ) Net periodic benefit (gain) cost $ (6,666 ) $ 335
Schedule of Company made contributions towards benefit plans	Three Months Ended March 30, 2024 April 1, 2023 Regular matching contribution $ 285,563 $ 252,761 Transitional credit contribution 28,906 34,320 Non-discretionary contribution 110,890 431,950 Total contributions for the period $ 425,359 $ 719,031

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 30, 2024	Apr. 01, 2023
Earnings per share:
Weighted Average Shares Outstanding	6,215,673	6,223,027
Diluted [abstract]
Weighted Average Shares Outstanding	6,215,673	6,223,027
Dilutive Stock Appreciation Rights	39,727	10,962
Denominator For Diluted Earnings Per Share (in Shares)	6,255,400	6,233,989

Inventories (Details)

Inventories (Details) - USD ($)	Mar. 30, 2024	Dec. 30, 2023
Inventories
Raw Material And Component Parts	$ 23,084,312	$ 24,500,087
Work In Process	9,381,683	9,957,068
Finished Goods	23,381,076	24,815,052
Total Inventories	$ 55,847,071	$ 59,272,207

Goodwill (Details Narrative)

Goodwill (Details Narrative) $ in Millions	Mar. 30, 2024 USD ($)
Goodwill
Aggregate carrying amount of goodwill	$ 70.7

Leases (Details)

Leases (Details) $ in Millions	Mar. 30, 2024 USD ($)
Leases
2024 operating lease	$ 3.2
2025 operating lease	3.2
2026 operating lease	2.5
2027 operating lease and thereafter	10.2
Operating Leases, Future Minimum Payments Due gross	19.1
Less effects of discounting OperatingLeases	(2.6)
Lease liabilities recognized Operating Leases	16.5
2024 Finance lease	0.1
2025 finance lease	0.2
2026 finance lease	0.2
2027 financ lease and thereafter	0.6
Finance Leases, Future Minimum Payments Due gross	1.1
Less effects of discounting Finance Leases	(0.2)
Lease liabilities recognized financing Leases	$ 0.9

Leases (Details Narrative)

Leases (Details Narrative) $ in Millions	3 Months Ended
	Mar. 30, 2024 USD ($)
Leases
Operating lease liabilities	$ 16.5
Finance lease liabilities	$ 0.9
Weighted average lease term for operating leases	7 years
Weighted average lease term for finance leases	5 years 9 months 18 days
Weighted average discount rate operating leases	6.30%
Weighted average discount rate finance leases	6.40%

Debt (Details Narrative)

Debt (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Jun. 16, 2023	Mar. 30, 2024
Credit Agreement [Member]
Ratio Description		applicable margin of 1.875% to 2.625%, with such margins determined based on the Company’s senior net leverage ratio. The Company’s obligations under the Credit Agreement are secured by a lien on certain of the Company’s and its subsidiaries’ assets pursuant to a Pledge and Security Agreement
Line Of Credit Member [Member]
Annual Commitment Fee Percentage	0.30%
Medium Term Notes [Member] | September 30, 2023 through June 30, 2025 [Member]
Quarterly Principal Payment		$ 750,000
Medium Term Notes [Member] | September 30, 2025 through June 30, 2027 [Member]
Quarterly Principal Payment		1,125,000
Medium Term Notes [Member] | September 30, 2027 through March 31, 2028 [Member]
Quarterly Principal Payment		$ 1,500,000
Medium Term Notes [Member] | Interest Rate Swap [Member]
Term portion loan	$ 60,000,000
Revolving Commitment Portion	$ 30,000,000
Minimum [Member] | Medium Term Notes [Member]
Variable Interest Rate Based On Senior Net Leverage Ratio		0.87%
Maximum [Member] | Medium Term Notes [Member]
Variable Interest Rate Based On Senior Net Leverage Ratio		1.62%

Stock Options and awards (Detai

Stock Options and awards (Details) - Stcok Options [Member] - $ / shares	3 Months Ended		12 Months Ended
	Mar. 30, 2024	Mar. 30, 2024	Dec. 30, 2023
Number of units outstanding at beginning of period	13,000	13,000	146,166
Number of units, Expired		(9,000)	(50,833)
Number of units, Exercised		0	(33,333)
Number of units, Forfeited		0	(49,000)
Number of units outstanding at end of period	4,000	4,000	13,000
Weighted average exercise price, beginning balance		$ 24.19	$ 23.22
Weighted average exercise price, Expired		26.30	24.24
Weighted average exercise price, exercised		0	21.10
Weighted average exercise price, forfeited		0	22.80
Weighted average exercise price, ending balance	$ 20.20	$ 20.20	$ 24.19

Stock Options and awards (Det_2

Stock Options and awards (Details 1)	3 Months Ended
	Mar. 30, 2024 $ / shares shares
Outstanding | shares	4,000
Exercisable | shares	4,000
Range of Exercise Prices (in dollar per share)	$ 20.20
Maximum [Member] | SAR [Member]
Weighted- Average Remaining Contractual Life	1 year 1 month 6 days
Weighted avaerage exercise price	$ 20.20
Minimum [Member] | SAR [Member]
Weighted- Average Remaining Contractual Life	1 year 1 month 6 days
Weighted avaerage exercise price	$ 20.20

Stock Options and awards (Det_3

Stock Options and awards (Details 2) - Stock Options [Member] - shares	3 Months Ended	12 Months Ended
	Mar. 30, 2024	Dec. 30, 2023
Number of units outstanding at beginning of period	89,400	64,500
Issued		82,800
Number of units, Exercised	(23,734)	(10,600)
Number of units, Forfeited	(1,433)	(47,300)
Number of units outstanding at end of period	64,233	89,400

Stock Options and awards (Det_4

Stock Options and awards (Details Narrative) - USD ($)	3 Months Ended
	Mar. 30, 2024	Apr. 01, 2023
Stock compensation expense	$ 434,000	$ 184,000
Intrinsic value	$ 2,245,274
2020 Plan [Member]
Stock Option Granted	879,924

Share Repurchase Program (Detai

Share Repurchase Program (Details)	3 Months Ended
	Mar. 30, 2024 $ / shares shares
Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs [Member]
Maximum Number Of Shares That May Yet Be Purchased Under The Plans Or Programs, Beginning Balance	160,000
Maximum Number Of Shares That May Yet Be Purchased Under The Plans Or Programs	149,924
Maximum Number Of Shares That May Yet Be Purchased Under The Plans Or Programs, Ending Balance	149,924
Average Price Paid Per Share [Member]
Average Price Paid Per Share, Beginning Balance | $ / shares	$ 18.39
Average Price Paid Per Share During The Period | $ / shares	23.30
Average Price Paid Per Share, Ending Balance | $ / shares	$ 19.38
Total Number of Shares Purchased [Member]
Total Number Of Shares Purchased, Beginning Balance	40,000
Total Number Of Shares Purchased	50,076
Total Number Of Shares Purchased,ending Balance	10,076
Total Number of Shares Purchased As Part of Publicly Announced Plansor Programs [Member]
Total Number Of Shares Purchased As Part Of Publicly Announced Plansor Programs, Beginning Balance	40,000
Total Number Of Shares Purchased As Part Of Publicly Announced Plansor Programs	10,076
Total Number Of Shares Purchased As Part Of Publicly Announced Plansor Programs, Ending Balance	50,076

Share Repurchase Program (Det_2

Share Repurchase Program (Details Narrative)	Aug. 21, 2023 shares
Share Repurchase Program
Number Of Shares Authorized To Be Repurchased	200,000

Retirement Benefit Plans (Detai

Retirement Benefit Plans (Details 1) - USD ($)	3 Months Ended
	Mar. 30, 2024	Apr. 01, 2023
Total contributions for the period	$ 425,359	$ 719,031
Regular Matching Contributions [Member]
Total contributions for the period	285,563	252,761
Transitional Credit Contributions [Member]
Total contributions for the period	28,906	34,320
Non-Discretionary Contributions [Member]
Total contributions for the period	$ 110,890	$ 431,950

Retirement Benefit Plans (Det_2

Retirement Benefit Plans (Details) - USD ($)	3 Months Ended
	Mar. 30, 2024	Apr. 01, 2023
Pension Benefit [Member]
Service cost	$ 178,003	$ 216,153
Interest cost	966,702	990,054
Expected return on plan assets	(1,099,035)	(1,049,016)
Amortization of the net loss	327,365	342,865
Net periodic benefit cost	373,035	500,056
Other Postretirement Benefit [Member]
Service cost	3,574	6,486
Interest cost	12,951	14,533
Expected return on plan assets	(4,684)	(4,849)
Amortization of prior service cost	1,060	1,060
Amortization of the net loss	(19,567)	(16,895)
Net periodic benefit cost	$ (6,666)	$ 335

Retirement Benefit Plans (Det_3

Retirement Benefit Plans (Details Narrative) - USD ($)	3 Months Ended
	Mar. 30, 2024	Apr. 01, 2023
Accrued amount for non discretionary safe harbor contribution		$ 328,953
Pension Benefit [Member]
2024	$ 210,000,000,000
Cash contributions	50,000
Other Postretirement Benefit [Member]
2024	450,000
Cash contributions	$ 7,000

Concentration of risk (Details

Concentration of risk (Details Narrative)	3 Months Ended
	Mar. 30, 2024 USD ($)
Federal Deposit Insurance Corporation (FDIC)	$ 250,000
Minimum [Member] | Line Of Credit Member [Member] | LIBOR [Member]
Basis spread on variable rate	1.87%
Maximum [Member] | Line Of Credit Member [Member] | LIBOR [Member]
Basis spread on variable rate	2.62%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Threshold percentage of concentration risk	12%

Business Acquisition (Details N

Business Acquisition (Details Narrative) $ in Millions	Mar. 30, 2024 USD ($)
Business Acquisition
Goodwill	$ 0.5