The Eastern Company (EML) 10-Q 5 Nov 24 2024 Q3 Quarterly report Financial data

Cover

Cover	9 Months Ended
	Sep. 28, 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	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 28, 2024
Entity Filer Category	Accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Entity Common Stock Shares Outstanding	6,183,179
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 OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 28, 2023	Sep. 28, 2024	Sep. 28, 2023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Net sales	$ 71,274,757	$ 62,001,347	$ 206,068,490	$ 195,062,061
Cost of products sold	(53,085,087)	(46,556,952)	(154,161,980)	(150,371,589)
Gross margin	18,189,670	15,444,395	51,906,510	44,690,472
Product development expense	(1,077,930)	(1,425,159)	(3,739,214)	(4,257,468)
Selling and administrative expenses	(10,316,788)	(8,452,163)	(31,014,022)	(29,051,436)
Operating profit	6,794,952	5,567,073	17,153,274	11,381,568
Interest expense	(709,680)	(854,223)	(2,049,655)	(2,059,912)
Other (expense) income	(82,703)	(135,839)	(92,415)	1,025,582
Income from continuing operations before income taxes	6,002,569	4,577,011	15,011,204	10,347,238
Income tax expense	(1,333,771)	(1,113,587)	(3,335,489)	(2,574,393)
Net income from continuing operations	4,668,798	3,463,424	11,675,715	7,772,845
Discontinued Operations (see note B)
Loss from operations of discontinued unit	(766,990)	(530,764)	(2,750,844)	(3,600,060)
Loss on classification as held for sale	(23,087,775)	0	(23,087,775)	0
Income tax benefit	3,888,522	129,298	4,320,904	895,695
Loss on discontinued operations	(19,966,243)	(401,466)	(21,517,715)	(2,704,365)
Net (loss) income	$ (15,297,445)	$ 3,061,958	$ (9,842,000)	$ 5,068,480
Earnings per share from continuing operations:
Basic	$ 0.75	$ 0.55	$ 1.88	$ 1.25
Diluted	0.75	0.55	1.87	1.24
Loss per share from discontinued operations:
Basic	(3.22)	(0.06)	(3.46)	(0.43)
Diluted	(3.21)	(0.06)	(3.45)	(0.43)
Total (loss) earnings per share:
Basic	(2.47)	0.49	(1.58)	0.82
Diluted	(2.46)	0.49	(1.58)	0.81
Cash dividends per share	$ 0.11	$ 0.11	$ 0.33	$ 0.33

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 28, 2023	Sep. 28, 2024	Sep. 28, 2023
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Net (loss) income	$ (15,297,445)	$ 3,061,958	$ (9,842,000)	$ 5,068,480
Change in foreign currency translation	(120,191)	(87,572)	(527,862)	(182,029)
Change in fair value of foreign currency swap, net of tax benefit of: 2024 - $(106,076) and $(123,179) respectively	355,123	0	412,382	0
Change in fair value of interest rate swap, net of tax benefit of: 2023 - $0 and $(274,957) respectively	0	0	0	(1,449,754)
Change in pension and postretirement benefit costs, net of taxes of: 2024 - $71,355 and $214,065 respectively; 2023 - $74,360 and $223,079 respectively	237,501	252,668	718,338	758,006
Total other comprehensive (loss) income	(237,813)	165,096	(221,906)	(873,777)
Comprehensive (loss) income	$ (15,535,258)	$ 3,227,054	$ (10,063,906)	$ 4,194,703

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 28, 2024	Dec. 30, 2023
Current Assets
Cash and cash equivalents	$ 7,670,541	$ 8,048,127
Marketable securities	2,034,602	986,477
Accounts receivable, less allowances: 2024 - $470,870; 2023 - $534,476	45,999,803	34,204,581
Inventories	58,125,362	58,396,679
Current portion of notes receivable	239,261	573,269
Prepaid expenses and other assets	2,356,524	5,443,778
Current assets held for sale	9,643,534	4,583,797
Total Current Assets	126,069,627	112,236,708
Property, Plant and Equipment	59,890,704	52,684,476
Accumulated depreciation	(31,095,676)	(29,162,438)
Property, Plant and Equipment, Net	28,795,028	23,522,038
Goodwill	58,576,197	58,576,198
Trademarks	3,946,651	3,914,409
Patents and other intangibles net of accumulated amortization	9,373,296	11,182,167
Long-term notes receivable, less current portion	238,002	374,932
Deferred Income Taxes	2,536,357	2,283,571
Right of Use Assets	14,645,336	17,064,137
Other Long-Term Assets	42,510	0
Long-term liabilities held for sale	0	6,920
Total Other Assets	89,358,349	116,280,455
TOTAL ASSETS	244,223,004	252,039,201
Current Liabilities
Accounts payable	23,988,401	24,554,117
Accrued compensation	5,142,966	5,194,830
Other accrued expenses	8,252,803	3,965,335
Current portion of operating lease liability	3,373,500	4,336,794
Current portion of finance lease liability	721,178	175,231
Current portion of long-term debt	3,228,935	2,871,870
Other current liabilities	578,071	0
Current liabilities held for sale	2,541,189	1,635,549
Total Current Liabilities	47,827,043	42,733,726
Other long-term liabilities	640,724	730,970
Operating lease liability, less current portion	11,271,835	12,727,344
Finance lease liability, less current portion	3,050,529	715,669
Long-term debt, less current portion	41,487,366	41,063,865
Accrued postretirement benefits	594,167	554,758
Accrued pension cost	20,111,130	21,025,365
Long-term assets held for sale	0	22,885,041
Total Liabilities	124,982,794	119,558,617
Shareholders' Equity
Common Stock, no par value, Authorized: 50,000,000 shares Issued: 9,127,700 shares as of 2024 and 9,091,815 shares as of 2023 Outstanding: 6,183,179 shares as of 2024 and 6,217,370 shares as of 2023	34,864,634	33,950,859
Treasury Stock: 2,894,521 shares as of 2024 and 2,874,445 shares as of 2023	(25,196,598)	(23,280,467)
Retained earnings	132,912,235	144,805,168
Accumulated other comprehensive loss:
Foreign currency translation	(1,394,461)	(866,599)
Unrealized loss on foreign currency swap, net of tax	(535,561)	0
Unrecognized net pension and postretirement benefit costs, net of tax	(21,410,039)	(22,128,377)
Accumulated other comprehensive loss	(23,340,061)	(22,994,976)
Total Shareholders' Equity	119,240,210	132,480,584
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 244,223,004	$ 252,039,201

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 28, 2024	Dec. 30, 2023
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts	$ 470,870	$ 534,476
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)	9,127,700	9,091,815
Common Stock, shares outstanding (in shares)	6,183,179	6,217,370
Treasury Stock, shares (in shares)	2,894,521	2,874,445

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023
Operating Activities
Net (loss) income	$ (9,842,000)	$ 5,068,480
Less: Loss from discontinued operations	(21,517,715)	(2,704,365)
Income from continuing operations	11,675,715	7,772,845
Adjustments to reconcile net income to net cash provided
Depreciation and amortization	4,266,038	3,914,160
Reduction in carrying amount of ROU assets	2,418,801	3,579,223
Unrecognized pension and postretirement benefits	(353,257)	635,677
Loss on sale of equipment and other assets	53,311	331,474
Provision for doubtful accounts	(24,570)	(88,353)
Stock compensation expense	913,775	151,300
Changes in operating assets and liabilities:
Accounts receivable	(11,739,823)	1,069,630
Inventories	300,720	4,501,969
Prepaid expenses and other	2,874,825	1,108,094
Other assets	(236,934)	(262,212)
Accounts payable	693,653	1,821,223
Accrued compensation	(190,904)	353,773
Change in operating lease liability	(2,418,801)	(3,579,223)
Other accrued expenses	115,403	(3,152,809)
Net cash provided by operating activities	8,347,952	18,156,771
Investing Activities
Marketable securities	(999,960)	0
Business acquisition	0	547,638
Payments received from notes receivable	470,937	2,265,730
Proceeds from sale of equipment	18,925	0
Purchases of property, plant, and equipment	(7,634,265)	(4,089,705)
Net cash used in investing activities	(8,144,363)	(2,371,613)
Financing Activities
Proceeds from new long-term debt financing	0	60,000,000
Principal payments on long-term debt	(2,365,500)	(74,919,004)
Proceeds (payments) on short term borrowings (revolver)	3,000,000	(300,029)
Financing leases, net	2,819,262	674,558
Purchase common stock for treasury	(1,916,130)	(245,546)
Dividends paid	(2,050,933)	(2,069,043)
Net cash used in financing activities	(513,301)	(16,859,064)
Discontinued Operations
Cash provided by operating activities	411,778	1,092,876
Cash used in investing activities	(217,101)	(628,968)
Cash provided by discontinued operations	194,677	463,908
Effect of exchange rate changes on cash	(67,874)	(36,737)
Net change in cash and cash equivalents	(182,909)	(646,735)
Cash and cash equivalents at beginning of period	8,299,453	10,187,521
Cash and cash equivalents at end of period ?	8,116,544	9,540,786
Supplemental disclosure of cash flow information
Interest	2,443,448	2,574,890
Income taxes	3,945,295	1,321,170
Non-cash investing and financing activities
Right of use asset	2,418,801	3,579,222
Lease liability	$ (462,004)	$ (4,484,838)

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 28, 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 in this Quarterly Report on Form 10-Q for the quarterly period ended September 28, 2024 (this “Form 10-Q”) 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 third quarter of 2023, the third fiscal quarter of 2023 or the three months ended September 30, 2023 mean the 13-week period from July 2, 2023 to September 30, 2023. References to the third quarter of 2024, the third fiscal quarter of 2024 or the three months ended September 28, 2024, mean the 13-week period from June 30, 2024 to September 28, 2024. References to the first nine months of 2023 or the nine months ended September 30, 2023 mean the period from January 1, 2023 to September 30, 2023. References to the first nine months of 2024 or the nine months ended September 28, 2024 mean the period from December 31, 2023 to September 28, 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. See Note B, Discontinued Operations

Discontinued Operations

Discontinued Operations	9 Months Ended
	Sep. 28, 2024
Discontinued Operations
Discontinued Operations	Note B – Discontinued Operations In the third quarter of 2024 we determined that the Big 3 Mold business no longer fits with our long-term strategy, and we have initiated the process of selling the business. The Mold business is cyclical in nature, requires significant capital investment to remain competitive, and serves different markets than our core businesses. Selling the Big 3 Mold business will allow management to focus on our core capabilities, offerings, and markets served. In the third quarter of 2024, we determined that the Big 3 Mold business meets the criteria to be held for sale and that the assets held for sale qualify for discontinued operations. As such, the financial results of the Big 3 Mold business are reflected in our unaudited condensed consolidated statements of operations as discontinued operations for all periods presented. Additionally, current and non-current assets and liabilities of discontinued operations are reflected in the unaudited condensed consolidated balance sheets for both periods presented. Summarized Financial Information of Discontinued Operations The following table represents income from discontinued operations, net of tax: Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 3,360,405 $ 3,634,333 $ 9,647,649 $ 11,406,778 Cost of products sold (2,804,743 ) (2,703,362 ) (8,402,175 ) (9,076,341 ) Gross margin 555,662 930,971 1,245,474 2,330,437 Selling and administrative expenses (1,145,232 ) (1,248,179 ) (3,483,904 ) (3,875,579 ) Restructuring costs (23,087,775 ) - (23,087,775 ) - Operating loss (23,677,345 ) (317,208 ) (25,326,205 ) (1,545,142 ) Other expense - - - (1,539,940 ) Interest expense (177,420 ) (213,556 ) (512,414 ) (514,978 ) Loss from discontinued operations before income taxes (23,854,765 ) (530,764 ) (25,838,619 ) (3,600,060 ) Income tax benefit 3,888,522 129,298 4,320,904 895,695 Loss from discontinued operations, net of tax $ (19,966,243 ) $ (401,466 ) $ (21,517,715 ) $ (2,704,365 ) The following table represents the assets and liabilities from discontinued operations: September 28, 2024 December 30, 2023 (unaudited) Cash $ 446,003 $ 251,326 Accounts receivable 2,480,148 2,852,907 Inventories 1,211,011 875,528 Prepaid expenses 828,471 604,036 Property, plant and equipment, net 4,432,723 4,767,723 Patents and other intangibles net of accumulated amortization - 5,744,312 Goodwill 73,528 12,200,695 Right of use assets 171,650 172,311 Total assets of discontinued operations $ 9,643,534 $ 27,468,838 Current assets of discontinued operations¹ $ 9,643,534 $ 4,583,797 Non-current assets of discontinued operations - 22,885,041 Total assets of discontinued operations $ 9,643,534 $ 27,468,838 Accounts payable $ 1,564,105 $ 765,356 Accrued compensation and other accrued expenses 789,875 775,838 Current portion of lease liability 138,642 94,355 Other long-term liabilities 48,567 6,920 Total liabilities of discontinued operations $ 2,541,189 $ 1,642,469 Current liabilities of discontinued operations¹ $ 2,541,189 $ 1,635,549 Non-current liabilities of discontinued operations - 6,920 Total liabilities of discontinued operations $ 2,541,189 $ 1,642,469 ¹ the total assets and liabilities of discontinued operations are presented as current in the September 28, 2024 consolidated balance sheet as we expect to sell the discontinued operations and collect proceeds within one year.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 28, 2024
Earnings Per Share
Earnings Per Share	Note C – Earnings Per Share The denominators used to calculate earnings per share are as follows: Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Basic: Weighted average shares outstanding 6,203,753 6,241,796 6,217,342 6,233,493 Diluted: Weighted average shares outstanding 6,203,753 6,241,796 6,217,342 6,233,493 Dilutive stock appreciation rights 25,374 32,462 25,374 32,462 Denominator for diluted earnings per share 6,229,127 6,274,258 6,242,716 6,265,955

Fair Value of Instruments

Fair Value of Instruments	9 Months Ended
	Sep. 28, 2024
Earnings Per Share
Fair Value of Instruments	Note D – 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), designated foreign currency hedge contracts – see Note P, Financial Instruments and Fair Value Measurements Retirement Benefit Plans The carrying amounts of other financial instruments (cash and cash equivalents, marketable securities, accounts receivable, accounts payable and debt) as of September 28, 2024 and December 30, 2023, approximate fair value because of their short-term nature and market-based interest rates.

Inventories

Inventories	9 Months Ended
	Sep. 28, 2023
Inventories
Inventories	Note E – Inventories Inventories consist of the following components: September 28, 2024 December 30, 2023 Raw material and component parts $ 24,526,610 $ 24,500,087 Work in process 9,967,847 9,957,068 Finished goods 24,841,916 24,815,052 Total inventories¹ $ 59,336,373 $ 59,272,207 ¹ Includes inventory of discontinued operations of $1.2 million and $0.9 million as of September 28, 2024 and September 30, 2023, respectively.

Goodwill

Goodwill	9 Months Ended
	Sep. 28, 2024
Goodwill
Goodwill	Note F - Goodwill The aggregate carrying amount of goodwill from continuing operations is approximately $58.6 million as of September 28, 2024. A goodwill write-off of approximately $12.1 million was recognized in discontinued operations when classifying the disposal group as held for sale. See Note B – Discontinued Operations 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	9 Months Ended
	Sep. 28, 2024
Leases
Leases	Note G – 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 17 operating leases with a lease liability of $14.8 million and five finance leases with a lease liability of $3.8 million as of September 28, 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 September 28, 2024 are as follows: Operating Finance 2024 $ 1.1 $ 0.2 2025 3.1 0.7 2026 2.5 0.7 2027 2.1 0.7 2028 1.9 0.7 thereafter 6.4 1.6 17.1 4.7 Less effects of discounting (2.3 ) (0.9 ) Lease liabilities recognized $ 14.8 $ 3.8 As of September 28, 2024, the weighted average lease term for all operating and finance leases was 6.9 and 6.5 years, respectively. The weighted average discount rate associated with operating and finance leases was 6.3% and 6.8%, respectively, as of such date.

Debt

Debt	9 Months Ended
	Sep. 28, 2024
Debt
Debt	Note H - 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 of 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 0.25%. The Company has $3.0 million of outstanding borrowings under the revolving commitment portion of the credit facility as of September 28, 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 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 September 28, 2024, and through the date of filing this Form 10-Q.

Stock Options and Awards

Stock Options and Awards	9 Months Ended
	Sep. 28, 2024
Stock Options and Awards
Stock Options and Awards	Note I - 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”). 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. During the first nine months of fiscal 2024 and 2023, the Company granted stock awards with respect to 92,016 and 79,500 shares of Company common stock, respectively, that were subject to the meeting of performance measurements or time based. For the first nine 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 nine months of fiscal 2024 and 2023. Stock-based compensation (income) expense, including forfeitures, in connection with SARs and stock awards previously granted to employees was approximately $168,000 and $5,000 in the third quarter of 2024 and the third quarter of 2023, respectively, and was approximately $582,000 and $(158,000) in the first nine months of fiscal years 2024 and 2023, respectively. As of September 28, 2024, there were 792,300 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: Nine Months Ended Year Ended September 28, 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 (2,500 ) 20.20 (33,333 ) 21.10 Forfeited - - (49,000 ) 22.80 Outstanding at end of period 1,500 20.20 13,000 24.19 SARs Outstanding and Exercisable Range of Exercise Prices Outstanding as of September 28, 2024 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Exercisable as of September 28, 2024 Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 20.20 1,500 0.6 $ 20.20 1,500 0.6 $ 20.20 The following tables set forth the outstanding stock awards for the period specified: Nine Months Ended Year Ended September 28, 2024 December 30, 2023 Shares Shares Outstanding at beginning of period 89,400 64,500 Issued 92,016 82,800 Exercised (23,734 ) (10,600 ) Forfeited (12,994 ) (47,300 ) Outstanding at end of period 144,688 89,400 As of September 28, 2024, outstanding SARs and stock awards had an intrinsic value of $3,254,000.

Share Repurchase Program

Share Repurchase Program	9 Months Ended
	Sep. 28, 2024
Share Repurchase Program
Share Repurchase Program	Note J – Share Repurchase Program On August 21, 2023, the Company announced that the Board 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 third 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 June 29, 2024 60,076 $ 20.27 60,076 139,924 June 30, 2024 – September 28, 2024 50,000 28.68 50,000 89,924 Balance as of September 28, 2024 110,076 $ 24.09 110,076 89,924

Revenue Recognition

Revenue Recognition	9 Months Ended
	Sep. 28, 2024
Revenue Recognition
Revenue Recognition	Note K – 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	9 Months Ended
	Sep. 28, 2024
Income Taxes
Income Taxes	Note L - Income Taxes The Company files income tax returns in the U.S. at the federal and state levels, and in 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 nine months ended September 28, 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	9 Months Ended
	Sep. 28, 2024
Retirement Benefit Plans
Retirement Benefit Plans	Note M - 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 third quarter and first nine months of fiscal years 2024 and 2023 are as follows: Pension Benefits Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Service cost $ 178,003 $ 216,153 $ 534,010 $ 648,459 Interest cost 966,701 990,053 2,900,107 2,970,160 Expected return on plan assets (1,099,034 ) (1,049,016 ) (3,297,103 ) (3,147,046 ) Amortization of prior service cost - - - - Amortization of the net loss 327,363 342,866 982,091 1,028,596 Net periodic benefit cost $ 373,033 $ 500,056 $ 1,119,105 $ 1,500,169 Other Postretirement Benefits Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Service cost $ 3,574 $ 6,486 $ 10,722 $ 19,458 Interest cost 12,951 14,533 38,853 43,599 Expected return on plan assets (4,684 ) (4,849 ) (14,052 ) (14,547 ) Amortization of prior service cost 1,060 1,060 3,180 3,180 Amortization of the net loss (19,567 ) (16,895 ) (58,701 ) (50,685 ) Net periodic (benefit) cost $ (6,666 ) $ 335 $ (19,998 ) $ 1,005 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 September 28, 2024, the Company has contributed $1,572,000 to its pension plans and $25,000 to its postretirement plan in fiscal year 2024 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 Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Regular matching contribution $ 263,074 $ 241,487 $ 810,630 $ 747,913 Transitional credit contribution 20,688 23,271 71,558 83,935 Non-discretionary contribution 80,465 83,302 294,228 654,552 Total contributions for the period $ 364,227 $ 348,060 $ 1,176,416 $ 1,486,400 The non-discretionary contribution of $328,953 made in the nine months ended September 30, 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	9 Months Ended
	Sep. 28, 2024
Recent Accounting Pronouncements
Recent Accounting Pronouncements	Note N - Recent Accounting Pronouncements In November 2023, the FASB issued 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	9 Months Ended
	Sep. 28, 2024
Concentration of Risk
Concentration of Risk	Note O - 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 September 28, 2024, there were two significant concentrations of credit risk with customers, who had receivables representing 18% and 11% respectively, of our net accounts receivable. As of December 30, 2023, there was one customer that represented 12% of the Company’s net accounts receivable. 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 under the Credit Agreement, 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.

Financial Instruments and Fair

Financial Instruments and Fair Value Measurements	9 Months Ended
	Sep. 28, 2024
Financial Instruments and Fair Value Measurements
Financial Instruments and Fair Value Measurements	Note P – Financial Instruments and Fair Value Measurements The Company incurs certain manufacturing, marketing, and selling costs in international markets in local currency. Accordingly, earnings and cash flows are exposed to market risk from changes in foreign currency exchange rates relative to the U.S. dollar, the Company’s reporting currency. The Company has a program in place that is designed to mitigate the exposure to changes in foreign currency exchange rates. The program includes the use of derivative financial instruments to minimize, for a period of time, the impact on its financial results from changes in foreign exchange rates. The Company utilizes foreign currency forward contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, namely Mexican pesos. This does not eliminate the impact of the volatility of foreign exchange rates. However, because the Company generally enters into forward contracts twelve to eighteen months out, rates are fixed for a twelve-to-eighteen-month period, thereby facilitating financial planning and resource allocation. Designated Foreign Currency Hedge Contracts All of the Company’s designated foreign currency hedge contracts as of September 28, 2024 were cash flow hedges under ASC 815, “Derivatives and Hedging” (“ASC 815”). The Company records the effective portion of any change in the fair value of designated foreign currency hedge contracts in other comprehensive income until the related third-party transaction occurs. Once the related third-party transaction occurs, the Company reclassifies the effective portion of any related gain or loss on the designated foreign currency hedge contracts to earnings. In the event the hedged forecasted transaction does not occur, or it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. The Company had designated foreign currency hedge contracts outstanding in the contract amount of $12.6 million as of September 28, 2024 and $0.0 million as of December 30, 2023. As of September 28, 2024 a loss of $0.4 million, net of tax, will be reclassified to earnings within the next fifteen months. All currency cash flow hedges outstanding as of September 28, 2024 mature within fifteen months. Fair Value of Derivative Instruments The following table presents the effect of the Company’s derivative instruments designated as cash flow hedges under ASC 815 in its unaudited Condensed Consolidated Statements of Operations for the nine months ended September 28, 2024: Derivative Instruments Amount of Loss Recognized in Accumulated Other Comprehensive Income Amount of Loss Reclassified from Accumulated Other Comprehensive Income into Earnings Location in Condensed Consolidated Statement of Operations Designated foreign currency hedge contracts, net of tax $ (412,382 ) $ (148,657 ) Cost of products sold ASC 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. The Company determines the fair value of its derivative instruments using the framework prescribed by ASC 820, “Fair Value Measurements and Disclosures,” by considering the estimated amount it would receive or pay to sell or transfer these instruments at the reporting date. Generally, the Company uses inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. As of September 28, 2024, the Company has classified its derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC 815, as discussed below, because these observable inputs are available for substantially the full term of its derivative instruments. The following tables present the fair value of the Company’s derivative instruments as they appear in its Condensed Consolidated Balance Sheets as of September 28, 2024 and December 30, 2023: Location in Condensed Consolidated Balance Sheets As of September 28, 2024 As of December 30, 2023 Derivative Assets: Designated foreign currency hedge contracts Other long-term assets $ 42,510 $ - Derivative Liabilities: Designated foreign currency hedge contracts Other current liabilities $ 578,071 $ -

Discontinued Operations (Tables

Discontinued Operations (Tables)	9 Months Ended
	Sep. 28, 2024
Discontinued Operations
Schedule income from discontinued operations	Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 3,360,405 $ 3,634,333 $ 9,647,649 $ 11,406,778 Cost of products sold (2,804,743 ) (2,703,362 ) (8,402,175 ) (9,076,341 ) Gross margin 555,662 930,971 1,245,474 2,330,437 Selling and administrative expenses (1,145,232 ) (1,248,179 ) (3,483,904 ) (3,875,579 ) Restructuring costs (23,087,775 ) - (23,087,775 ) - Operating loss (23,677,345 ) (317,208 ) (25,326,205 ) (1,545,142 ) Other expense - - - (1,539,940 ) Interest expense (177,420 ) (213,556 ) (512,414 ) (514,978 ) Loss from discontinued operations before income taxes (23,854,765 ) (530,764 ) (25,838,619 ) (3,600,060 ) Income tax benefit 3,888,522 129,298 4,320,904 895,695 Loss from discontinued operations, net of tax $ (19,966,243 ) $ (401,466 ) $ (21,517,715 ) $ (2,704,365 )
Schedule of Assets AndLiabilities from discontinued operations	September 28, 2024 December 30, 2023 (unaudited) Cash $ 446,003 $ 251,326 Accounts receivable 2,480,148 2,852,907 Inventories 1,211,011 875,528 Prepaid expenses 828,471 604,036 Property, plant and equipment, net 4,432,723 4,767,723 Patents and other intangibles net of accumulated amortization - 5,744,312 Goodwill 73,528 12,200,695 Right of use assets 171,650 172,311 Total assets of discontinued operations $ 9,643,534 $ 27,468,838 Current assets of discontinued operations¹ $ 9,643,534 $ 4,583,797 Non-current assets of discontinued operations - 22,885,041 Total assets of discontinued operations $ 9,643,534 $ 27,468,838 Accounts payable $ 1,564,105 $ 765,356 Accrued compensation and other accrued expenses 789,875 775,838 Current portion of lease liability 138,642 94,355 Other long-term liabilities 48,567 6,920 Total liabilities of discontinued operations $ 2,541,189 $ 1,642,469 Current liabilities of discontinued operations¹ $ 2,541,189 $ 1,635,549 Non-current liabilities of discontinued operations - 6,920 Total liabilities of discontinued operations $ 2,541,189 $ 1,642,469 ¹ the total assets and liabilities of discontinued operations are presented as current in the September 28, 2024 consolidated balance sheet as we expect to sell the discontinued operations and collect proceeds within one year.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 28, 2024
Earnings Per Share
Schedule of Denominators Used in Earnings Per Share Computations	Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Basic: Weighted average shares outstanding 6,203,753 6,241,796 6,217,342 6,233,493 Diluted: Weighted average shares outstanding 6,203,753 6,241,796 6,217,342 6,233,493 Dilutive stock appreciation rights 25,374 32,462 25,374 32,462 Denominator for diluted earnings per share 6,229,127 6,274,258 6,242,716 6,265,955

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 28, 2024
Inventories
Schedule Of inventories from continue operation	September 28, 2024 December 30, 2023 Raw material and component parts $ 24,526,610 $ 24,500,087 Work in process 9,967,847 9,957,068 Finished goods 24,841,916 24,815,052 Total inventories¹ $ 59,336,373 $ 59,272,207

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 28, 2024
Leases
Schedule of impact of leases in the balance sheet	Operating Finance 2024 $ 1.1 $ 0.2 2025 3.1 0.7 2026 2.5 0.7 2027 2.1 0.7 2028 1.9 0.7 thereafter 6.4 1.6 17.1 4.7 Less effects of discounting (2.3 ) (0.9 ) Lease liabilities recognized $ 14.8 $ 3.8

Stock Options and awards (Table

Stock Options and awards (Tables)	9 Months Ended
	Sep. 28, 2024
Stock Options and Awards
Schedule of Stock Appreciation Rights Activity	Nine Months Ended Year Ended September 28, 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 (2,500 ) 20.20 (33,333 ) 21.10 Forfeited - - (49,000 ) 22.80 Outstanding at end of period 1,500 20.20 13,000 24.19
Schedule of SARs Outstanding and Exercisable	SARs Outstanding and Exercisable Range of Exercise Prices Outstanding as of September 28, 2024 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Exercisable as of September 28, 2024 Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 20.20 1,500 0.6 $ 20.20 1,500 0.6 $ 20.20
Schedule of Outstanding Stock Grants	Nine Months Ended Year Ended September 28, 2024 December 30, 2023 Shares Shares Outstanding at beginning of period 89,400 64,500 Issued 92,016 82,800 Exercised (23,734 ) (10,600 ) Forfeited (12,994 ) (47,300 ) Outstanding at end of period 144,688 89,400

Share Repurchase Program (Table

Share Repurchase Program (Tables)	9 Months Ended
	Sep. 28, 2023
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 June 29, 2024 60,076 $ 20.27 60,076 139,924 June 30, 2024 – September 28, 2024 50,000 28.68 50,000 89,924 Balance as of September 28, 2024 110,076 $ 24.09 110,076 89,924

Retirement Benefit Plans (Table

Retirement Benefit Plans (Tables)	9 Months Ended
	Sep. 28, 2024
Retirement Benefit Plans
Schedule of Significant Disclosures Relating to Benefit Plans	Pension Benefits Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Service cost $ 178,003 $ 216,153 $ 534,010 $ 648,459 Interest cost 966,701 990,053 2,900,107 2,970,160 Expected return on plan assets (1,099,034 ) (1,049,016 ) (3,297,103 ) (3,147,046 ) Amortization of prior service cost - - - - Amortization of the net loss 327,363 342,866 982,091 1,028,596 Net periodic benefit cost $ 373,033 $ 500,056 $ 1,119,105 $ 1,500,169 Other Postretirement Benefits Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Service cost $ 3,574 $ 6,486 $ 10,722 $ 19,458 Interest cost 12,951 14,533 38,853 43,599 Expected return on plan assets (4,684 ) (4,849 ) (14,052 ) (14,547 ) Amortization of prior service cost 1,060 1,060 3,180 3,180 Amortization of the net loss (19,567 ) (16,895 ) (58,701 ) (50,685 ) Net periodic (benefit) cost $ (6,666 ) $ 335 $ (19,998 ) $ 1,005
Schedule of Company made contributions towards benefit plans	Three Months Ended Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Regular matching contribution $ 263,074 $ 241,487 $ 810,630 $ 747,913 Transitional credit contribution 20,688 23,271 71,558 83,935 Non-discretionary contribution 80,465 83,302 294,228 654,552 Total contributions for the period $ 364,227 $ 348,060 $ 1,176,416 $ 1,486,400

Financial Instruments and Fai_2

Financial Instruments and Fair Value Measurements (Tables)	9 Months Ended
	Sep. 28, 2024
Financial Instruments and Fair Value Measurements
Schedule of Fair Value of Derivative Instruments	Derivative Instruments Amount of Loss Recognized in Accumulated Other Comprehensive Income Amount of Loss Reclassified from Accumulated Other Comprehensive Income into Earnings Location in Condensed Consolidated Statement of Operations Designated foreign currency hedge contracts, net of tax $ (412,382 ) $ (148,657 ) Cost of products sold
Schedule of Fair Value of Derivative Condensed Consolidated Balance Sheets	Location in Condensed Consolidated Balance Sheets As of September 28, 2024 As of December 30, 2023 Derivative Assets: Designated foreign currency hedge contracts Other long-term assets $ 42,510 $ - Derivative Liabilities: Designated foreign currency hedge contracts Other current liabilities $ 578,071 $ -

Discontinued Operations (Detail

Discontinued Operations (Details) - Discontinued Operations [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023
Net sales	$ 3,360,405	$ 3,634,333	$ 9,647,649	$ 11,406,778
Costs of goods sold	(2,804,743)	(2,703,362)	(8,402,175)	(9,076,341)
Gross margin	555,662	930,971	1,245,474	2,330,437
Selling and administrative expenses	(1,145,232)	(1,248,179)	(3,483,904)	(3,875,579)
Restructuring costs	(23,087,775)	0	(23,087,775)	0
Operating loss	(23,677,345)	(317,208)	(25,326,205)	(1,545,142)
Other expense	0	0	0	(1,539,940)
Interest expense	(177,420)	(213,556)	(512,414)	(514,978)
Loss from discontinued operations before income taxes	(23,854,765)	(530,764)	(25,838,619)	(3,600,060)
Income tax benefit	3,888,522	129,298	4,320,904	895,695
Loss from discontinued operations, net of tax	$ (19,966,243)	$ (401,466)	$ (21,517,715)	$ (2,704,365)

Discontinued Operations (Deta_2

Discontinued Operations (Details 1) - Discontinued Operations [Member] - USD ($)	Sep. 28, 2024	Dec. 30, 2023
Cash	$ 446,003	$ 251,326
Accounts receivable	2,480,148	2,852,907
Inventories	1,211,011	875,528
Prepaid expenses	828,471	604,036
Property, plant and equipment, net	4,432,723	4,767,723
Patents and other intangibles net of accumulated amortization		5,744,312
Goodwill	73,528	12,200,695
Right of use assets	171,650	172,311
Total assets of discontinued operations	9,643,534	27,468,838
Current assets of discontinued operations	9,643,534	4,583,797
Non-current assets of discontinued operations	0	22,885,041
Total assets of discontinued operation	9,643,534	27,468,838
Accounts payable	1,564,105	765,356
Accrued compensation and other accrued expenses	789,875	775,838
Current portion of lease liability	138,642	94,355
Other long-term liabilities	48,567	6,920
Total liabilities of discontinued operations	2,541,189	1,642,469
Current liabilities of discontinued operations	2,541,189	1,635,549
Non-current liabilities of discontinued operations	0	6,920
Total liabilities of discontinued operation	$ 2,541,189	$ 1,642,469

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023
Basic:
Weighted Average Shares Outstanding	6,203,753	6,217,342	6,241,796	6,233,493
Diluted :
Weighted Average Shares Outstanding	6,203,753	6,217,342	6,241,796	6,233,493
Dilutive Stock Appreciation Rights	25,374	25,374	32,462	32,462
Denominator For Diluted Earnings Per Share (in Shares)	6,229,127	6,242,716	6,274,258	6,265,955

Inventories (Details)

Inventories (Details) - USD ($)	Sep. 28, 2024	Dec. 30, 2023
Inventories
Raw Material And Component Parts	$ 24,526,610	$ 24,500,087
Work In Process	9,967,847	9,957,068
Finished Goods	24,841,916	24,815,052
Total Inventories	$ 59,336,373	$ 59,272,207

Inventories (Details Narrative)

Inventories (Details Narrative) - USD ($) $ in Millions	Sep. 28, 2024	Dec. 30, 2023
Inventories
Inventory of discontinued operations	$ 1.2	$ 0.9

Goodwill (Details Narrative)

Goodwill (Details Narrative) $ in Millions	Sep. 28, 2024 USD ($)
Goodwill
Goodwill write-off	$ 12.1
Aggregate carrying amount of goodwill	$ 58.6

Leases (Details)

Leases (Details) $ in Millions	Sep. 28, 2024 USD ($)
Leases
2024 operating lease	$ 1.1
2025 operating lease	3.1
2026 operating lease	2.5
2027 operating lease	2.1
2028 operating lease	1.9
Thereafter finance lease	6.4
Operating leases, future minimum payments due gross	17.1
Less effects of discounting OperatingLeases	(2.3)
Lease liabilities recognized Operating Leases	14.8
2024 Finance lease	0.2
2025 finance lease	0.7
2026 finance lease	0.7
2027 financ lease	0.7
2028 Finance lease	0.7
Thereafter finance lease	1.6
Finance leases, future minimum payments due gross	4.7
Less effects of discounting Finance Leases	(0.9)
Lease liabilities recognized financing Leases	$ 3.8

Leases (Details Narrative)

Leases (Details Narrative) $ in Millions	9 Months Ended
	Sep. 28, 2024 USD ($)
Leases
Operating lease liabilities	$ 14.8
Finance lease liabilities	$ 3.8
Weighted average lease term for operating leases	6 years 10 months 24 days
Weighted average lease term for finance leases	6 years 6 months
Weighted average discount rate operating leases	6.30%
Weighted average discount rate finance leases	6.80%

Debt (Details Narrative)

Debt (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended
	Jun. 16, 2023	Sep. 28, 2024
Credit Agreement [Member] | Maximum [Member]
Variable Interest Rate Based On Senior Net Leverage Ratio		2.625
Credit Agreement [Member] | Minimum [Member]
Variable Interest Rate Based On Senior Net Leverage Ratio		1.875
Line Of Credit Member [Member]
Annual Commitment Fee Percentage	30%
Outstanding borrowings		$ 3,000,000
Medium Term Notes [Member] | Maximum [Member]
Variable Interest Rate Based On Senior Net Leverage Ratio		1.625
Medium Term Notes [Member] | Minimum [Member]
Variable Interest Rate Based On Senior Net Leverage Ratio		0.875
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
Interest Rate Swap [Member] | Medium Term Notes [Member]
Revolving Commitment Portion	$ 30,000,000
Term portion loan	$ 60,000,000

Stock Options and Awards (Detai

Stock Options and Awards (Details) - Stcok Options [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 28, 2024	Dec. 30, 2023
Number of units outstanding at beginning of period	13,000	146,166
Number of units, Expired	9,000	50,833
Number of units, Exercised	(2,500)	(33,333)
Number of units, Forfeited	0	(49,000)
Number of units outstanding at end of period	1,500	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	20.20	21.10
Weighted average exercise price, forfeited	0	22.80
Weighted average exercise price, ending balance	$ 20.20	$ 24.19

Stock Options and Awards (Det_2

Stock Options and Awards (Details 1)	9 Months Ended
	Sep. 28, 2024 $ / shares shares
Outstanding | shares	1,500
Exercisable | shares	1,500
Range of Exercise Prices (in dollar per share)	$ 20.20
SAR [Member] | Minimum [Member]
Weighted- Average Remaining Contractual Life	7 months 6 days
Weighted avaerage exercise price	$ 20.20
SAR [Member] | Maximum [Member]
Weighted- Average Remaining Contractual Life	7 months 6 days
Weighted avaerage exercise price	$ 20.20

Stock Options and Awards (Det_3

Stock Options and Awards (Details 2) - Stock Options [Member] - shares	9 Months Ended	12 Months Ended
	Sep. 28, 2024	Dec. 30, 2023
Number of units outstanding at beginning of period	89,400	64,500
Number of units, Issued	92,016	82,800
Number of units, Exercised	23,734	10,600
Number of units, Forfeited	(12,994)	(47,300)
Number of units outstanding at end of period	144,688	89,400

Stock Options and Awards (Det_4

Stock Options and Awards (Details Narrative) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 28, 2024	Sep. 28, 2023	Dec. 30, 2023	Jun. 29, 2024
Stock compensation expense	$ 168,000	$ 5,000
Intrinsic value				$ 792,300
2020 Plan [Member]
Intrinsic value				$ 3,254,000
Stock Option Granted	92,016	79,500
Stock Options [Member]
Stock compensation expense	$ 582,000	$ 158,000
Stock Option Granted	92,016		82,800

Share Repurchase Program (Detai

Share Repurchase Program (Details)	3 Months Ended
	Sep. 28, 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	139,924
Maximum Number Of Shares That May Yet Be Purchased Under The Plans Or Programs	89,924
Maximum Number Of Shares That May Yet Be Purchased Under The Plans Or Programs, Ending Balance	89,924
Average Price Paid Per Share [Member]
Average Price Paid Per Share, Beginning Balance | $ / shares	$ 20.27
Average Price Paid Per Share During The Period | $ / shares	28.68
Average Price Paid Per Share, Ending Balance | $ / shares	$ 24.09
Total Number of Shares Purchased [Member]
Total Number Of Shares Purchased, Beginning Balance	60,076
Total Number Of Shares Purchased	50,000
Total Number Of Shares Purchased,ending Balance	110,076
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	60,076
Total Number Of Shares Purchased As Part Of Publicly Announced Plansor Programs	50,000
Total Number Of Shares Purchased As Part Of Publicly Announced Plansor Programs, Ending Balance	110,076

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) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023
Pension Benefit [Member]
Service cost	$ 178,003	$ 216,153	$ 534,010	$ 648,459
Interest cost	966,701	990,053	2,900,107	2,970,160
Expected return on plan assets	(1,099,034)	(1,049,016)	(3,297,103)	(3,147,046)
Amortization of prior service cost	0	0	0	0
Amortization of the net loss	327,363	342,866	982,091	1,028,596
Net periodic benefit cost	373,033	500,056	1,119,105	1,500,169
Other Postretirement Benefit [Member]
Service cost	3,574	6,486	10,722	19,458
Interest cost	12,951	14,533	38,853	43,599
Expected return on plan assets	(4,684)	(4,849)	(14,052)	(14,547)
Amortization of prior service cost	1,060	1,060	3,180	3,180
Amortization of the net loss	(19,567)	(16,895)	(58,701)	(50,685)
Net periodic benefit cost	$ (6,666)	$ 335	$ (19,998)	$ 1,005

Retirement Benefit Plans (Det_2

Retirement Benefit Plans (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023
Total contributions for the period	$ 364,227	$ 348,060	$ 1,176,416	$ 1,486,400
Regular Matching Contributions [Member]
Total contributions for the period	263,074	241,487	810,630	747,913
Transitional Credit Contributions [Member]
Total contributions for the period	20,688	23,271	71,558	83,935
Non-Discretionary Contributions [Member]
Total contributions for the period	$ 80,465	$ 83,302	$ 294,228	$ 654,552

Retirement Benefit Plans (Det_3

Retirement Benefit Plans (Details Narrative) - USD ($)	9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023
Accrued amount for non discretionary safe harbor contribution		$ 328,953
Pension Benefit [Member]
2024	$ 2,100,000
Cash contributions	1,572,000
Other Postretirement Benefit [Member]
2024	50,000
Cash contributions	$ 25,000

Concentration of Risk (Details

Concentration of Risk (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 28, 2023	Dec. 30, 2023	Sep. 28, 2024
Federal Deposit Insurance Corporation (FDIC)			$ 250,000
Line Of Credit Member [Member] | LIBOR [Member] | Minimum [Member]
Basis spread on variable rate	1.875%
Line Of Credit Member [Member] | LIBOR [Member] | Maximum [Member]
Basis spread on variable rate	2.625%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Threshold percentage of concentration risk	18%	12%
Accounts Receivable [Member] | Two Customer Concentration Risk [Member]
Threshold percentage of concentration risk	11%

Financial Instruments and Fai_3

Financial Instruments and Fair Value Measurements (Details)	9 Months Ended
	Sep. 28, 2024 USD ($)
Loss Reclassified from OCI to Earnings [Member]
Designated foreign currency hedge contracts, net of tax	$ (148,657)
Loss in Accumulated Other Comprehensive Income [Member]
Designated foreign currency hedge contracts, net of tax	$ (412,382)

Financial Instruments and Fai_4

Financial Instruments and Fair Value Measurements (Details 1) - USD ($)	Sep. 28, 2024	Dec. 30, 2023
Derivative Assets [Member]
Designated foreign currency hedge contracts assets	$ 42,510	$ 0
Derivative Liabilities [Member]
Designated foreign currency hedge contracts liabilities	$ 578,071	$ 0

Financial Instruments and Fai_5

Financial Instruments and Fair Value Measurements (Details Narrative) - USD ($) $ in Millions	Sep. 28, 2024	Dec. 30, 2023
Financial Instruments and Fair Value Measurements
Foreign currency hedge contracts outstanding	$ 12.6	$ 0
Loss reclassified to earnings net of tax	$ 0.4