Cover
Cover - shares | 9 Months Ended | |
Aug. 27, 2022 | Oct. 11, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Aug. 27, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --11-30 | |
Entity File Number | 0-5109 | |
Entity Registrant Name | MICROPAC INDUSTRIES, INC. | |
Entity Central Index Key | 0000065759 | |
Entity Tax Identification Number | 75-1225149 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 905 E. Walnut | |
Entity Address, City or Town | Garland | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75040 | |
City Area Code | (972) | |
Local Phone Number | 272-3571 | |
Title of 12(b) Security | Common Stock, $0.10 par value per share | |
Trading Symbol | MPAD | |
Security Exchange Name | NONE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,578,315 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Aug. 27, 2022 | Nov. 30, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 15,602,000 | $ 15,252,000 |
Receivables, net of allowance for doubtful accounts of $0 at August 27, 2022 and November 30, 2021 | 3,610,000 | 4,974,000 |
Other receivables | 920,000 | |
Contract assets | 912,000 | 603,000 |
Inventories: | ||
Raw materials and supplies | 5,928,000 | 5,738,000 |
Work in process | 3,641,000 | 2,946,000 |
Total inventories | 9,569,000 | 8,684,000 |
Prepaid expenses and other assets | 729,000 | 341,000 |
Total current assets | 31,342,000 | 29,854,000 |
PROPERTY, PLANT AND EQUIPMENT, at cost: | ||
Land | 1,518,000 | 1,518,000 |
Buildings | 498,000 | 498,000 |
Facility improvements | 1,126,000 | 1,126,000 |
Furniture and fixtures | 1,036,000 | 1,025,000 |
Construction in process | 18,616,000 | 8,019,000 |
Machinery and equipment | 9,844,000 | 9,390,000 |
Total property, plant, and equipment | 32,638,000 | 21,576,000 |
Less accumulated depreciation | (10,985,000) | (10,739,000) |
Net property, plant, and equipment | 21,653,000 | 10,837,000 |
Operating lease right to use asset | 27,000 | 67,000 |
Total assets | 53,022,000 | 40,758,000 |
CURRENT LIABILITIES: | ||
Accounts payable | 1,472,000 | 1,963,000 |
Accrued compensation | 1,106,000 | 1,295,000 |
Deferred revenue | 1,155,000 | 1,258,000 |
Property taxes payable | 383,000 | 318,000 |
Income tax payable | 403,000 | 180,000 |
Operating lease liabilities, current portion | 27,000 | 53,000 |
Other accrued liabilities | 28,000 | 25,000 |
Total current liabilities | 4,574,000 | 5,092,000 |
Operating lease liabilities, less current portion | 14,000 | |
Long Term Debt, net of debt issuance costs | 14,359,000 | 3,369,000 |
Deferred income taxes, net | 20,000 | 16,000 |
Total liabilities | 18,953,000 | 8,491,000 |
SHAREHOLDERS’ EQUITY | ||
Common stock, $.10 par value, authorized 10,000,000 shares, 3,078,315 issued and 2,578,315 outstanding at August 27, 2022 November 30, 2021 | 308,000 | 308,000 |
Additional paid-in-capital | 885,000 | 885,000 |
Treasury stock, 500,000 shares, at cost | (1,250,000) | (1,250,000) |
Retained earnings | 34,126,000 | 32,324,000 |
Total shareholders’ equity | 34,069,000 | 32,267,000 |
Total liabilities and shareholders’ equity | $ 53,022,000 | $ 40,758,000 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Aug. 27, 2022 | Nov. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 0 | $ 0 |
Common Stock, Par or Stated Value Per Share | $ 0.10 | $ 0.10 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 3,078,315 | 3,078,315 |
Common Stock, Shares, Outstanding | 2,578,315 | 2,578,315 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 27, 2022 | Aug. 28, 2021 | |
Income Statement [Abstract] | ||||
NET SALES | $ 6,940 | $ 8,180 | $ 20,194 | $ 19,865 |
COST AND EXPENSES: | ||||
Cost of goods sold | (3,667) | (4,407) | (11,188) | (11,237) |
Research and development | (568) | (510) | (1,534) | (1,253) |
Selling, general & administrative expenses | (2,231) | (1,649) | (5,849) | (4,628) |
Total cost and expenses | (6,466) | (6,566) | (18,571) | (17,118) |
OPERATING INCOME | 474 | 1,614 | 1,623 | 2,747 |
Other income (expense), net | 966 | (210) | 967 | (190) |
INCOME BEFORE TAXES | 1,440 | 1,404 | 2,590 | 2,557 |
Provision for taxes | 335 | 316 | 530 | 477 |
NET INCOME | $ 1,105 | $ 1,088 | $ 2,060 | $ 2,080 |
NET INCOME PER SHARE, BASIC AND DILUTED | $ 0.43 | $ 0.42 | $ 0.80 | $ 0.81 |
DIVIDENDS PER SHARE | $ 0.10 | $ 0.10 | ||
WEIGHTED AVERAGE OF SHARES, basic and diluted | 2,578,315 | 2,578,315 | 2,578,315 | 2,578,315 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Aug. 27, 2022 | Aug. 28, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 2,060 | $ 2,080 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 297 | 290 |
Loss on disposal of equipment | 0 | 232 |
Deferred tax expense | 4 | 8 |
Amortization of right-of-use assets | 40 | 37 |
Changes in certain current assets and liabilities: | ||
Decrease (increase) in accounts receivable | 443 | (648) |
Increase in contract assets | (309) | (314) |
Decrease (increase) in inventories | (884) | 251 |
Increase (decrease) in prepaid expenses | (387) | 75 |
Increase in prepaid income taxes | 223 | |
(Decrease) increase in deferred revenue | (103) | 32 |
Increase in accounts payable | 328 | 664 |
(Decrease) increase in accrued compensation | (189) | 107 |
Increase in income taxes payable | 224 | 202 |
Decrease in lease liabilities | (40) | (37) |
Increase in all other accrued liabilities | 65 | 105 |
Net cash provided by operating activities | 1,549 | 3,307 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Additions to property, plant and equipment | (11,931) | (3,363) |
Net cash used in investing activities | (11,931) | (3,363) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Cash dividend | (258) | (258) |
Proceeds from long term debt | 10,990 | 71 |
Net cash provided by (used in) financing activities | 10,732 | (187) |
Net increase (decrease) in cash and cash equivalents | 350 | (243) |
Cash and cash equivalents at beginning of period | 15,252 | 14,619 |
Cash and cash equivalents at end of period | 15,602 | 14,376 |
Supplemental Cash Flow Disclosure: | ||
Cash paid for income taxes | 302 | 247 |
Supplemental Non-Cash Flow Disclosure: | ||
Changes in accrued property, plant, and equipment | $ 402 | $ 624 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Nov. 30, 2020 | $ 308 | $ 885 | $ 1,250 | $ 29,524 | $ 29,467 |
Dividend | 0 | 0 | 0 | (258) | (258) |
Net income | 0 | 0 | 0 | (301) | (301) |
Ending balance, value at Feb. 27, 2021 | 308 | 885 | 1,250 | 28,965 | 28,908 |
Beginning balance, value at Nov. 30, 2020 | 308 | 885 | 1,250 | 29,524 | 29,467 |
Net income | 2,080 | ||||
Ending balance, value at Aug. 28, 2021 | 308 | 885 | 1,250 | 31,346 | 31,289 |
Beginning balance, value at Feb. 27, 2021 | 308 | 885 | 1,250 | 28,965 | 28,908 |
Net income | 0 | 0 | 0 | 1,293 | 1,293 |
Ending balance, value at May. 29, 2021 | 308 | 885 | 1,250 | 30,258 | 30,201 |
Net income | 0 | 0 | 0 | 1,088 | 1,088 |
Ending balance, value at Aug. 28, 2021 | 308 | 885 | 1,250 | 31,346 | 31,289 |
Beginning balance, value at Nov. 30, 2021 | 308 | 885 | 1,250 | 32,324 | 32,267 |
Dividend | 0 | 0 | 0 | (258) | (258) |
Net income | 0 | 0 | 0 | 464 | 464 |
Ending balance, value at Feb. 26, 2022 | 308 | 885 | 1,250 | 32,530 | 32,473 |
Beginning balance, value at Nov. 30, 2021 | 308 | 885 | 1,250 | 32,324 | 32,267 |
Net income | 2,060 | ||||
Ending balance, value at Aug. 27, 2022 | 308 | 885 | 1,250 | 34,126 | 34,069 |
Beginning balance, value at Feb. 26, 2022 | 308 | 885 | 1,250 | 32,530 | 32,473 |
Net income | 0 | 0 | 0 | 491 | 491 |
Ending balance, value at May. 28, 2022 | 308 | 885 | 1,250 | 33,021 | 32,964 |
Net income | 0 | 0 | 0 | 1,105 | 1,105 |
Ending balance, value at Aug. 27, 2022 | $ 308 | $ 885 | $ 1,250 | $ 34,126 | $ 34,069 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Aug. 27, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | Note 1 BASIS OF PRESENTATION Business Description Micropac Industries, Inc. (the “Company”), a Delaware corporation, designs, manufactures and distributes various types of microelectronic circuits including solid state relays and power controllers, optoelectronic components, and sensor and display components and assemblies. The Company’s products are used as components and assemblies in a broad range of military, space, medical and commercial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200 o The Company’s facilities are certified and qualified by the Defense Logistics Agency (DLA) to MIL-PRF-38534 (class K-space level) and MIL-PRF-19500 JANS (space level) and are certified to ISO 9001:2015 and AS 9100D. Micropac is a National Aeronautics and Space Administration (NASA) core supplier and is registered to AS9100-Aerospace Industry standard for supplier certification. The Company has Underwriters Laboratories (UL) approval on our industrial power controllers. The Company’s core technologies are microelectronic and optoelectronic designs to include the packaging and interconnecting of multi-chip microelectronics modules. Other technologies include light emitting and light sensitive materials and products, including light emitting diodes and silicon phototransistors, and electronic integration used in the Company’s optoelectronic components and assemblies. The Company was started in 1963 as a sole proprietorship. On March 3, 1969, the Company was incorporated under the name of “Micropac Industries, Inc.” in the state of Delaware. The stock was publicly held by 436 shareholders on August 27, 2022. In the opinion of management, the unaudited financial statements include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the financial position as of August 27, 2022, the results of operations for the three and nine months ended August 27, 2022 and August 28, 2021 and the cash flows for the nine months ended August 27, 2022 and August 28, 2021, including the statement of shareholders equity. Unaudited financial statements are prepared on a basis substantially consistent with those audited for the year ended November 30, 2021. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to the rules and regulations promulgated by the Securities and Exchange Commission. The Company’s fiscal year ends on the last day of November. The quarterly results end on the last Saturday of the quarter. It is suggested that these financial statements be read in conjunction with the November 30, 2021 Form 10-K filed with the SEC, including the audited financial statements and the accompanying notes thereto. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Aug. 27, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | Note 2 SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition The core principle of revenue recognition under accounting principles generally accepted in the Unites States of America (GAAP) is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company's revenue on the majority of its customer contracts is recognized at a point in time, generally upon shipment of products. To achieve that core principle, the Company applies the following steps: 1. Identify the contract(s) with a customer. The Company designs, manufactures and distributes various types of microelectronic circuits, optoelectronics, and sensors and displays. The Company’s products are used as components and assemblies in a broad range of military, space, medical and industrial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200 o The Company’s revenues are from purchase orders and/or contracts with customers associated with manufacture of products. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. 2. Identify the performance obligations in the contract. The majority of the Company’s purchase orders or contracts with customers contain a single performance obligation, the shipment of products. 3. Determine the transaction price. The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer at a fixed price per unit shipped based on the terms of the contract or purchase order with the customer. To the extent our actual costs vary from the fixed price that was negotiated, we will generate more or less profit or could incur a loss. 4. Allocate the transaction price to the performance obligations in the contract. The Company’s transaction price is the fixed price per unit per each delivery upon shipment. 5. Recognize revenue when (or as) the Company satisfies a performance obligation. This performance obligation is satisfied when control of the product is transferred to the customer, which occurs upon shipment or delivery. The Company receives purchase orders for products to be delivered over multiple dates that may extend across reporting periods. The Company accounting policy treats shipping and handling activities as a fulfillment cost. The Company invoices for each delivery upon shipment and recognizes revenues at the fixed price for each distinct product delivered when transfer of control has occurred, which is generally upon shipment. For certain contracts under which the Company produces products with no alternative use and for which the Company has an enforceable right to payment during the production cycle, the Company recognizes revenue for the cost incurred of work in process plus a margin at the end of each period and records a contract asset (unbilled receivable). The majority of these products are shipped weekly and monthly to the customers and the contracts require us to manage and limit the level of work in process to meet the scheduled delivery dates. In addition, the Company may have a contract or purchase order to provide a non-recurring engineering service to a customer. These contracts are reviewed, and performance obligations are determined and we recognize revenue at the point in time in which each performance obligation is fully satisfied. Disaggregation of Revenue The following table summarizes the Company’s Net Sales by Product Line 8/27/2022 8/28/2021 Microcircuits $ 5,585 $ 5,132 Optoeletronics 6,056 5,144 Sensors and Displays 8,553 9,589 Total Revenue $ 20,194 $ 19,865 Timing of revenue recognition Transferred at a point in time $ 17,393 $ 19,039 Transferred over time 2,801 826 Total Revenue $ 20,194 $ 19,865 The following table summarizes the Company’s Net Sales by Major Market 2022 Third Quarter Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 2,684 $ 317 $ 754 $ 401 $ 4,156 Domestic Distribution 2,101 278 0 156 2,535 International 20 104 0 125 249 $ 4,805 $ 699 $ 754 $ 682 $ 6,940 2021 Third Quarter Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 3,052 $ 971 $ 1,069 $ 149 $ 5,241 Domestic Distribution 2,427 139 0 152 2,718 International 25 120 0 76 221 $ 5,504 $ 1,230 $ 1,069 $ 377 $ 8,180 2022 Nine Months Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 8,322 $ 1,116 $ 2,138 $ 935 $ 12,511 Domestic Distribution 5,485 996 — 629 7,110 International 91 254 — 228 573 $ 13,898 $ 2,366 $ 2,138 $ 1,792 $ 20,194 2021 Nine Months Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 7,063 $ 2,141 $ 2,777 $ 437 $ 12,418 Domestic Distribution 5,762 675 — 449 6,886 International 152 255 — 154 561 $ 12,977 $ 3,071 $ 2,777 $ 1,040 $ 19,865 Receivables, net, Contract Assets and Contract Liabilities The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (deferred revenue) on the Condensed Balance Sheets. Receivables, net, contract assets and contract liabilities were as follows: Receivables, net, Contract Assets and Contract Liabilities (Dollars in thousands) August 27, 2022 November 30, 2021 December 1, 2020 Receivables, net $ 3,610 $ 4,974 $ 2,639 Contract assets $ 912 $ 603 $ 512 Deferred revenue $ 1,155 $ 1,258 $ 111 There was $ 103,000 Contract costs The Company does not have material incremental costs to obtain a contract in the form of sales commissions or bonuses. The Company incurs other immaterial costs to obtain and fulfill a contract; however, the Company has elected the practical expedient under ASC 340-40-24-4 to recognize all incremental costs to obtain a contract as an expense when incurred if the amortization period is one year or less. Leases In the first quarter of 2020, the Company entered into a three (3) year lease extension on the property that has been leased on a year to year basis. As a result, we recognized $ 165,000 40,000 37,000 3.25 six months The Undiscounted Future Minimum Lease Payments 8/27/2022 2022 $ 14,000 2023 14,000 Total lease payments 28,000 Interest 1,000 Present value of lease liabilities $ 27,000 Short-Term Investments The Company had no short-term investments at August 27, 2022 or November 30, 2021. Short-term investments consist of certificates of deposits with maturities greater than 90 days. These investments are reported at historical cost, which approximates fair value. All highly liquid investments with maturities of 90 days or less are classified as cash equivalents. Inventories Inventories are stated at lower of cost or net realizable value and include material, labor and manufacturing overhead. All inventories are valued using the FIFO (first-in, first-out) method of inventory valuation. The Company determines the need to write inventory down to the lower of cost or net realizable value via an analysis based on the usage of inventory over a three year period and projected usage based on current backlog. Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method the Company records deferred income taxes for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. The resulting deferred tax liabilities and assets are adjusted to reflect changes in tax law or rates in the period that includes the enactment date. The Company records a liability for an unrecognized tax benefit for a tax position that is not “more-likely-than-not” to be sustained. The Company did not record any liability for uncertain tax positions as of August 27, 2022 November 30, 2021. Property, Plant, and Equipment Property, plant, and equipment are carried at cost, and depreciation is provided using the straight-line method at rates based upon the following estimated useful lives (in years) of the assets: Buildings ......................................................................................................................................................... 15 30 Facility improvements ......................................................................................................................................................... 8 15 Machinery and equipment ......................................................................................................................................................... 5 10 Furniture and fixtures ......................................................................................................................................................... 5 8 The Company assesses long-lived assets for impairment in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC 360-10-35, Property, Plant and Equipment – Subsequent Measurement Construction in progress relates to multiple capital projects ongoing during the year ended November 30, 2021 and the nine months ended August 27, 2022, including the construction of the new manufacturing facility. Construction in progress also includes interest and fees on debt that are directly related to the financing of the Company’s capital projects. Repairs and maintenance are expensed as incurred. Improvements which extend the useful lives of property, plant, and equipment are capitalized. Research and Development Costs Costs for the design and development of new products are expensed as incurred. Basic and Diluted Earnings Per Share Basic and diluted earnings per share are computed based upon the weighted average number of shares outstanding during the respective periods. Diluted earnings per share gives effect to all dilutive potential common shares. For the three months ended August 27, 2022 and August 28, 2021, the Company had no Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Aug. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | Note 3 NEW ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses Measurement of Credit Losses on Financial Instruments |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 9 Months Ended |
Aug. 27, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | Note 4 FAIR VALUE MEASUREMENT The Company had no The Company measures its long-term debt at fair value, which approximates book value as the long-term debt bears market rates of interest There were no |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Aug. 27, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | Note 5 COMMITMENTS The Company obtained a commercial real estate construction loan for the construction of a new 76,000 square foot manufacturing center on the 9.2 acres of land in Garland, Texas that the Company has purchased. On March 26, 2021, the Company (acting as borrower) entered into a Construction Loan Agreement (the “loan agreement”) with Frost Bank (“Frost”) (acting as lender). The Construction Loan Agreement provides for a construction loan, in amounts not to exceed a total principal balance of $ 16,160,000 3.40 On March 26, 2021, the Company renewed the Revolving Loan Agreement with Frost through the “Sixth Amendment to Loan Agreement.”. The Revolving Loan Agreement provides for revolving credit loans, in amounts not to exceed a total principal balance of $ 6,000,000 3.25 Construction Loans 16,160,000 Principal and interest shall be due and payable monthly in an amounts determined by Lender required to fully amortize the outstanding principal balance of this Note over a period of twenty-five (25) years, payable on the twenty-sixth (26th) day of each and every calendar month, beginning April 26, 2023, and continuing regularly thereafter until March 26, 2031, when the entire amount hereof, principal and accrued interest then remaining unpaid, shall be then due and payable; interest being calculated on the unpaid principal each day principal is outstanding and all payments made credited to any collection costs and late charges, to the discharge of the interest accrued and to the reduction of the principal, in such order as Lender shall determine. The interest rate of ( 3.40 unpaid principal each day principal is outstanding and all payments made credited to any collection costs and late charges, to the discharge of the interest accrued and to the reduction of the principal, in such order as Lender shall determine. The loan shall be secured by a “Deed of Trust, Security Agreement – Financing Statement” covering the 9.2 acre tract in Garland, Texas and the improvements made on it. Revolving Credit Loans 6,000,000 The interest on the outstanding and unpaid principal balance shall be computed at a per annum rate equal to the lesser of (a) a rate equal to the Prime Rate per annum; provided, however, in no event shall the resulting rate be less than three and one-quarter percent (3.25%). The Company has borrowed $ 14,538,000 Debt August 27, 2022 Notes payable $ 14,538,000 Less unamortized debt issuance costs 179,000 Net Debt 14,359,000 Less—Current portion — Total long-term debt $ 14,359,000 |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 9 Months Ended |
Aug. 27, 2022 | |
Accounting Policies [Abstract] | |
EARNINGS PER COMMON SHARE | Note 6 EARNINGS PER COMMON SHARE Basic and diluted earnings per share are computed based upon the weighted average number of shares outstanding during the respective periods. Diluted earnings per share gives effect to all dilutive potential common shares. For the nine months ended August 27, 2022 and August 28, 2021, the Company had no dilutive potential common stock instruments. |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 9 Months Ended |
Aug. 27, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | Note 7 SHAREHOLDERS’ EQUITY On December 7, 2021 0.10 January 11, 2022 February 10, 2022 On December 8, 2020 0.10 January 6, 2021 February 12, 2021 |
EMPLOYEE RETENTION CREDIT UNDER
EMPLOYEE RETENTION CREDIT UNDER THE CARES ACT | 9 Months Ended |
Aug. 27, 2022 | |
Employee Retention Credit Under Cares Act | |
EMPLOYEE RETENTION CREDIT UNDER THE CARES ACT | Note 8 EMPLOYEE RETENTION CREDIT UNDER THE CARES ACT The CARES Act, passed by Congress on March 27, 2020, contained the employee retention credit (ERC), a refundable payroll tax credit to employers that have experienced hardship in their operations due to COVID-19. The CARES Act was amended and extended on December 27, 2020 by the Consolidated Appropriations Act, 2021 (the “CAA”) and in March 2021, the Internal Revenue Code was amended by the American Rescue Plan Act of 2021 to provide new employee retention credit provisions designed to promote employee retention and hiring. This ERC is a fully refundable tax credit for employers equal to 70 percent of qualified wages that eligible employers pay their employees. This ERC applies to qualified wages paid after December 2020 and before January 1, 2022. As a result, the Company has determined that it qualified for a $ 920,299 MICROPAC INDUSTRIES, INC. (Unaudited) MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Micropac Industries, Inc. (the “Company”), a Delaware corporation, designs, manufactures and distributes various types of microelectronic circuits including solid state relays and power controllers, optoelectronic components, and sensor and display components and assemblies. The Company’s products are used as components and assemblies in a broad range of military, space and industrial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200 o The Company’s facilities are certified and qualified by the Defense Logistics Agency (DLA) to MIL-PRF-38534 (class K-space level) and MIL-PRF-19500 JANS (space level) and are certified to ISO 9001:2008 and AS 9100D. Micropac is a National Aeronautics and Space Administration (NASA) core supplier, and is registered to AS9100-Aerospace Industry standard for supplier certification. The Company has Underwriters Laboratories (UL) approval on our industrial power controllers. The Company’s core technology are microelectronic and optoelectronic designs to include the packaging and interconnecting of multi-chip microelectronics modules. Other technologies include light emitting and light sensitive materials and products, including light emitting diodes and silicon phototransistors, and electronic integration used in the Company’s optoelectronic components and assemblies. Critical Accounting Policies The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions and factors that are believed to be reasonable under the circumstances. Note 2 to the Financial Statements in the Quarterly Report Form 10-Q for the quarter ended August 27, 2022, describes the significant accounting policies and methods used in the preparation of the Financial Statements. Actual results could differ from these estimates. The core principle of revenue recognition under accounting principles generally accepted in the Unites States of America (GAAP) is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company’s revenue on the majority of its customer contracts are recognized at a point in time, generally upon shipment of products. The application of GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates. Specifically, the determination of whether revenues related to our revenue contracts should be recognized over time or at a point in time, as these determinations impact the timing and amount of our reported revenues and net income. Other significant judgments include the estimation of the point in the manufacturing process at which we are entitled to receive payment, as well as the progress of the job order to completion in order to determine the amount of consideration earned for contractual revenue recognized over time. The allowance for doubtful accounts is based on our assessment of the collectability of specific customer accounts and the aging of the accounts receivable. If there is a deterioration of a major customer’s credit worthiness or actual defaults are higher than our historical experience, our estimates of the recoverability of amounts due us could be adversely affected. Inventory purchases and commitments are based upon future demand. If there is a sudden and significant decrease in demand for our products or there is a higher risk of inventory obsolescence because of changing customer requirements, we may be required to increase our inventory allowances and our gross margin could be adversely affected. The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. If we were to determine we would not be able to realize all or part of the deferred tax asset in the future, an adjustment to the deferred tax asset would be necessary which would reduce our net income for that period. Depreciable and useful lives estimated for property and equipment are based on initial expectations of the period of time these assets will provide benefit. Changes in circumstances related to a change in our business or other factors could result in these assets becoming impaired, which could adversely affect the value of these assets Results of Operations Three months ended Nine months ended 8/27/2022 8/28/2021 8/27/2022 8/28/2021 NET SALES 100.0 % 100.0 % 100.0 % 100.0 % COST AND EXPENSES: Cost of Goods Sold 52.9 % 53.9 % 55.4 % 56.6 % Research and development 8.2 % 6.2 % 7.6 % 6.3 % Selling, general & administrative expenses 32.1 % 20.2 % 29.0 % 23.3 % Total cost and expenses 93.2 % 80.3 % 92.0 % 86.2 % OPERATING INCOME BEFORE INTEREST AND INCOME TAXES 6.8 % 19.7 % 8.0 % 13.8 % Interest and other income 13.9 % (2.6 %) 4.8 % (0.9 %) INCOME BEFORE TAXES 20.7 % 17.2 % 12.8 % 12.9 % Provision for taxes 4.7 % 3.9 % 2.6 % 2.4 % NET INCOME 16.0 % 13.3 % 10.2 % 10.5 % Sales for the three and nine month periods ended August 27, 2022 totaled $6,940,000 and $20,194,000, respectively. Sales for the third quarter decreased $1,240,000 from the same period of 2021 while sales for the first nine months of 2022 increased $329,000 from the first nine months of 2021. The majority of the decrease for the three months ended August 27, 2022 is related to timing of shipments of customer orders of custom sensor products. Sales were 9% in the commercial market, 10% in the medical market, 69% in the military market, and 12% in the space market for the nine months ended August 27, 2022 compared to 5% in the commercial market, 14% in the medical market, 66% in the military market, and 15% in the space market for the nine months ended August 28, 2021. One customer accounted for 18% of the Company’s sales for the three months ended August 27, 2022, and two customers accounted for 17% and 10% for the nine months ended August 27, 2022, while one customer accounted for 21% and 20% of the Company’s sales for the three months and nine months ended August 28, 2021. Cost of goods sold for the third quarters of 2022 and 2021 totaled 52.9% and 53.9% of net sales, respectively, while cost of goods sold for the nine months ended August 27, 2022 and August 28, 2021 totaled 55.4% and 56.6% of net sales, respectively. In actual dollars, cost of goods sold decreased $740,000 in the third quarter of 2022 compared to the same period of 2021. Year to date cost of goods sold decreased $49,000 for the first nine months of 2022 as compared to the same period in 2021. Research and development expense increased $58,000 for the third quarter of 2022 versus 2021 and increased $281,000 for the first nine months of 2022 compared to the same period of 2021. The research and development expenditures were associated with continued development of several power management products, fiber optic transceivers and high voltage optocouplers. The Company will continue to invest in research and development of these products and other new opportunities. Selling, general and administrative expense for the third quarter and first nine months of 2022 totaled 32.1% and 29.0% respectively of net sales compared to 20.2% and 23.3% for the same periods in 2021. In actual dollars, selling, general and administrative expense increased $582,000 for the third quarter and increased $1,221,000 for the first nine months of 2022 compared to the same periods in 2021. The majority of the increase for the first nine months resulted from an increase in commission expense in 2022, property tax on the new building and consultant fees. Provisions for taxes increased $19,000 for the third quarter of 2022 and increased $53,000 for the first nine months of 2022 compared to the same period in 2021. The estimated effective tax rate was 20% for 2022 and 18% for 2021. Net income increased $17,000 for the third quarter of 2022 versus 2021 and decreased $20,000 for the first nine months of 2022 compared to the same period of 2021. Liquidity and Capital Resources The Company will use a combination of cash and a commercial real estate construction loan for the construction of a new 76,000 square foot manufacturing center on the 9.2 acres of land in Garland, Texas the Company purchased. On March 26, 2021, the Company (acting as borrower) entered into a Construction Loan Agreement with Frost Bank (“Frost”), (acting as lender). The Construction Loan Agreement provides for a construction loan as discussed in Note 5 to the condensed financial statements. As of August 27, 2022, the Company has $18,616,000 in construction in process on the new facility and has $14,538,000 in notes payable on the construction loan, outstanding draw request of $128,000 in account payables and has used $2,515,000 of the Company’s cash. In addition, the Company has unamortized loan fees on the construction loan in the amount of $179,000. In addition, the Company continues on-going investigations for the use of cumulative cash for business expansion and improvements, such as operational improvements and new product expansion. Cash and cash equivalents totaled $15,602,000 as of August 27, 2022 compared to $15,252,000 on November 30, 2021, an increase of $350,000. The increase in cash and cash equivalents is attributable to $1,549,000 cash provided by operations, $10,990,000 proceeds from the construction loan, offset by the payment of a cash dividend of $258,000, $504,000 in cash for additional manufacturing equipment and $11,427,000 for construction in process on the new facility. In addition to cash on hand, the Company also has the ability to borrow under a loan agreement as discussed in Note 5 to the condensed financial statements. The Company has no significant off-balance sheet arrangements. Outlook New orders for year-to-date 2021 totaled $19,792,000 compared to $23,568,000 for 2022. The increase resulted from timing of new orders for several custom products. Backlog totaled $36,421,000 on August 27, 2022 compared to $29,943,000 as of August 28, 2021 and $32,635,000 on November 30, 2021 and represents a good mix of the company’s products and technologies. 2022 Current Backlog by Major Market Military Space Medical Commercial Total Domestic Direct $ 15,351 $ 2,595 $ 6,381 $ 1,853 $ 26,180 Domestic Distribution 8,113 703 — 448 9,264 International 277 120 — 580 977 $ 23,741 $ 3,418 $ 6,381 $ 2,881 $ 36,421 2022 Current Backlog by Product Line Microelectronics $ 12,449 Optoelectronics 5,658 Sensors and Displays 18,314 $ 36,421 The Company cannot assure that the results of operations for the interim period presented are indicative of total results for the entire year due to fluctuations in customer delivery schedules, or other factors over which the Company has no control. Impact of COVID-19 on our Business In March 2020 the World Health Organization declared the spread of the COVID-19 virus a pandemic. The Company continues to monitor our supply chain and orders from customers for COVID-19 pandemic related changes. We are continuing to serve our customers while taking precautions to provide a safe work environment for our employees and customers. We have been staggering some shifts and otherwise adjusting work schedules to maximize our capacity while adhering to recommended precautions. We have established and implemented a work from home provision where possible. To date, we have not experienced significant raw material shortages; however, supply-chain disruptions could potentially delay or prevent us from fulfilling customer orders. Cautionary Statement This Form 10-Q contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially. Investors are warned that forward-looking statements involve risks and unknown factors including, but not limited to: our expectations regarding the potential impacts on our operations of the COVID-19 pandemic; our expectations regarding the potential impacts on our supply chain and on our customers of the COVID-19 pandemic; overall changes in governmental spending for military and space programs; customer cancellation or rescheduling of orders, problems affecting delivery of vendor-supplied raw materials and components, unanticipated manufacturing problems and availability of direct labor resources. The Company does not intend to update the forward-looking statements contained herein, except as may be required by law. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures. The Chief Executive Officer and Chief Financial Officer of the Company evaluated the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15) as of August 27, 2022 and, based on this evaluation, concluded that the Company’s disclosure controls and procedures are functioning in an effective manner to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. (b) Changes in internal controls. There has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting during the three month period ended August 27, 2022. LEGAL PROCEEDINGS The Company is not involved in any material current or pending legal proceedings. RISK FACTORS Information about risk factors for the three and nine months ended August 27, 2022 does not differ materially from that set forth in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended November 30, 2021 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None DEFAULTS UPON SENIOR SECURITIES None MINE SAFETY DISCLOSURE Not Applicable OTHER INFORMATION None EXHIBITS (a) Exhibits 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002. 32.2 Certification of Chief Accounting Officer pursuant to 18 U. S. C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized. MICROPAC INDUSTRIES, INC. October 11, 2022 /s/ Mark King Date Mark King Chief Executive Officer October 11, 2022 /s/ Patrick Cefalu Date Patrick Cefalu Chief Financial Officer |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Aug. 27, 2022 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The core principle of revenue recognition under accounting principles generally accepted in the Unites States of America (GAAP) is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company's revenue on the majority of its customer contracts is recognized at a point in time, generally upon shipment of products. To achieve that core principle, the Company applies the following steps: 1. Identify the contract(s) with a customer. The Company designs, manufactures and distributes various types of microelectronic circuits, optoelectronics, and sensors and displays. The Company’s products are used as components and assemblies in a broad range of military, space, medical and industrial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200 o The Company’s revenues are from purchase orders and/or contracts with customers associated with manufacture of products. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. 2. Identify the performance obligations in the contract. The majority of the Company’s purchase orders or contracts with customers contain a single performance obligation, the shipment of products. 3. Determine the transaction price. The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer at a fixed price per unit shipped based on the terms of the contract or purchase order with the customer. To the extent our actual costs vary from the fixed price that was negotiated, we will generate more or less profit or could incur a loss. 4. Allocate the transaction price to the performance obligations in the contract. The Company’s transaction price is the fixed price per unit per each delivery upon shipment. 5. Recognize revenue when (or as) the Company satisfies a performance obligation. This performance obligation is satisfied when control of the product is transferred to the customer, which occurs upon shipment or delivery. The Company receives purchase orders for products to be delivered over multiple dates that may extend across reporting periods. The Company accounting policy treats shipping and handling activities as a fulfillment cost. The Company invoices for each delivery upon shipment and recognizes revenues at the fixed price for each distinct product delivered when transfer of control has occurred, which is generally upon shipment. For certain contracts under which the Company produces products with no alternative use and for which the Company has an enforceable right to payment during the production cycle, the Company recognizes revenue for the cost incurred of work in process plus a margin at the end of each period and records a contract asset (unbilled receivable). The majority of these products are shipped weekly and monthly to the customers and the contracts require us to manage and limit the level of work in process to meet the scheduled delivery dates. In addition, the Company may have a contract or purchase order to provide a non-recurring engineering service to a customer. These contracts are reviewed, and performance obligations are determined and we recognize revenue at the point in time in which each performance obligation is fully satisfied. |
Disaggregation of Revenue | Disaggregation of Revenue The following table summarizes the Company’s Net Sales by Product Line 8/27/2022 8/28/2021 Microcircuits $ 5,585 $ 5,132 Optoeletronics 6,056 5,144 Sensors and Displays 8,553 9,589 Total Revenue $ 20,194 $ 19,865 Timing of revenue recognition Transferred at a point in time $ 17,393 $ 19,039 Transferred over time 2,801 826 Total Revenue $ 20,194 $ 19,865 The following table summarizes the Company’s Net Sales by Major Market 2022 Third Quarter Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 2,684 $ 317 $ 754 $ 401 $ 4,156 Domestic Distribution 2,101 278 0 156 2,535 International 20 104 0 125 249 $ 4,805 $ 699 $ 754 $ 682 $ 6,940 2021 Third Quarter Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 3,052 $ 971 $ 1,069 $ 149 $ 5,241 Domestic Distribution 2,427 139 0 152 2,718 International 25 120 0 76 221 $ 5,504 $ 1,230 $ 1,069 $ 377 $ 8,180 2022 Nine Months Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 8,322 $ 1,116 $ 2,138 $ 935 $ 12,511 Domestic Distribution 5,485 996 — 629 7,110 International 91 254 — 228 573 $ 13,898 $ 2,366 $ 2,138 $ 1,792 $ 20,194 2021 Nine Months Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 7,063 $ 2,141 $ 2,777 $ 437 $ 12,418 Domestic Distribution 5,762 675 — 449 6,886 International 152 255 — 154 561 $ 12,977 $ 3,071 $ 2,777 $ 1,040 $ 19,865 |
Receivables, net, Contract Assets and Contract Liabilities | Receivables, net, Contract Assets and Contract Liabilities The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (deferred revenue) on the Condensed Balance Sheets. Receivables, net, contract assets and contract liabilities were as follows: Receivables, net, Contract Assets and Contract Liabilities (Dollars in thousands) August 27, 2022 November 30, 2021 December 1, 2020 Receivables, net $ 3,610 $ 4,974 $ 2,639 Contract assets $ 912 $ 603 $ 512 Deferred revenue $ 1,155 $ 1,258 $ 111 There was $ 103,000 |
Contract costs | Contract costs The Company does not have material incremental costs to obtain a contract in the form of sales commissions or bonuses. The Company incurs other immaterial costs to obtain and fulfill a contract; however, the Company has elected the practical expedient under ASC 340-40-24-4 to recognize all incremental costs to obtain a contract as an expense when incurred if the amortization period is one year or less. |
Leases | Leases In the first quarter of 2020, the Company entered into a three (3) year lease extension on the property that has been leased on a year to year basis. As a result, we recognized $ 165,000 40,000 37,000 3.25 six months The Undiscounted Future Minimum Lease Payments 8/27/2022 2022 $ 14,000 2023 14,000 Total lease payments 28,000 Interest 1,000 Present value of lease liabilities $ 27,000 |
Short-Term Investments | Short-Term Investments The Company had no short-term investments at August 27, 2022 or November 30, 2021. Short-term investments consist of certificates of deposits with maturities greater than 90 days. These investments are reported at historical cost, which approximates fair value. All highly liquid investments with maturities of 90 days or less are classified as cash equivalents. |
Inventories | Inventories Inventories are stated at lower of cost or net realizable value and include material, labor and manufacturing overhead. All inventories are valued using the FIFO (first-in, first-out) method of inventory valuation. The Company determines the need to write inventory down to the lower of cost or net realizable value via an analysis based on the usage of inventory over a three year period and projected usage based on current backlog. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method the Company records deferred income taxes for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. The resulting deferred tax liabilities and assets are adjusted to reflect changes in tax law or rates in the period that includes the enactment date. The Company records a liability for an unrecognized tax benefit for a tax position that is not “more-likely-than-not” to be sustained. The Company did not record any liability for uncertain tax positions as of August 27, 2022 November 30, 2021. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment are carried at cost, and depreciation is provided using the straight-line method at rates based upon the following estimated useful lives (in years) of the assets: Buildings ......................................................................................................................................................... 15 30 Facility improvements ......................................................................................................................................................... 8 15 Machinery and equipment ......................................................................................................................................................... 5 10 Furniture and fixtures ......................................................................................................................................................... 5 8 The Company assesses long-lived assets for impairment in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC 360-10-35, Property, Plant and Equipment – Subsequent Measurement Construction in progress relates to multiple capital projects ongoing during the year ended November 30, 2021 and the nine months ended August 27, 2022, including the construction of the new manufacturing facility. Construction in progress also includes interest and fees on debt that are directly related to the financing of the Company’s capital projects. Repairs and maintenance are expensed as incurred. Improvements which extend the useful lives of property, plant, and equipment are capitalized. |
Research and Development Costs | Research and Development Costs Costs for the design and development of new products are expensed as incurred. |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share Basic and diluted earnings per share are computed based upon the weighted average number of shares outstanding during the respective periods. Diluted earnings per share gives effect to all dilutive potential common shares. For the three months ended August 27, 2022 and August 28, 2021, the Company had no |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Aug. 27, 2022 | |
Accounting Policies [Abstract] | |
Net Sales by Product Line (Detail) | 8/27/2022 8/28/2021 Microcircuits $ 5,585 $ 5,132 Optoeletronics 6,056 5,144 Sensors and Displays 8,553 9,589 Total Revenue $ 20,194 $ 19,865 Timing of revenue recognition Transferred at a point in time $ 17,393 $ 19,039 Transferred over time 2,801 826 Total Revenue $ 20,194 $ 19,865 |
Net Sales by Major Market | The following table summarizes the Company’s Net Sales by Major Market 2022 Third Quarter Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 2,684 $ 317 $ 754 $ 401 $ 4,156 Domestic Distribution 2,101 278 0 156 2,535 International 20 104 0 125 249 $ 4,805 $ 699 $ 754 $ 682 $ 6,940 2021 Third Quarter Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 3,052 $ 971 $ 1,069 $ 149 $ 5,241 Domestic Distribution 2,427 139 0 152 2,718 International 25 120 0 76 221 $ 5,504 $ 1,230 $ 1,069 $ 377 $ 8,180 2022 Nine Months Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 8,322 $ 1,116 $ 2,138 $ 935 $ 12,511 Domestic Distribution 5,485 996 — 629 7,110 International 91 254 — 228 573 $ 13,898 $ 2,366 $ 2,138 $ 1,792 $ 20,194 2021 Nine Months Sales by Major Market Military Space Medical Commercial Total Domestic Direct $ 7,063 $ 2,141 $ 2,777 $ 437 $ 12,418 Domestic Distribution 5,762 675 — 449 6,886 International 152 255 — 154 561 $ 12,977 $ 3,071 $ 2,777 $ 1,040 $ 19,865 |
Receivables, net, Contract Assets and Contract Liabilities | August 27, 2022 November 30, 2021 December 1, 2020 Receivables, net $ 3,610 $ 4,974 $ 2,639 Contract assets $ 912 $ 603 $ 512 Deferred revenue $ 1,155 $ 1,258 $ 111 |
Undiscounted Future Minimum Lease Payments | 8/27/2022 2022 $ 14,000 2023 14,000 Total lease payments 28,000 Interest 1,000 Present value of lease liabilities $ 27,000 |
Schedule of Property Plant and Equipment Useful Lives | Buildings ......................................................................................................................................................... 15 30 Facility improvements ......................................................................................................................................................... 8 15 Machinery and equipment ......................................................................................................................................................... 5 10 Furniture and fixtures ......................................................................................................................................................... 5 8 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 9 Months Ended |
Aug. 27, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Debt Disclosure | Debt August 27, 2022 Notes payable $ 14,538,000 Less unamortized debt issuance costs 179,000 Net Debt 14,359,000 Less—Current portion — Total long-term debt $ 14,359,000 |
Net Sales by Product Line (Deta
Net Sales by Product Line (Detail) - USD ($) $ in Thousands | Aug. 27, 2022 | Aug. 28, 2021 |
Net Sales By Product Line | ||
Microcircuits | $ 5,585 | $ 5,132 |
Optoeletronics | 6,056 | 5,144 |
Sensors and Displays | 8,553 | 9,589 |
Total Revenue | 20,194 | 19,865 |
Timing of revenue recognition | ||
Transferred at a point in time | 17,393 | 19,039 |
Transferred over time | 2,801 | 826 |
Total Revenue | $ 20,194 | $ 19,865 |
Net Sales by Major Market (Deta
Net Sales by Major Market (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 27, 2022 | Aug. 28, 2021 | |
Domestic Direct | $ 4,156 | $ 5,241 | $ 12,511 | $ 12,418 |
Domestic Distribution | 2,535 | 2,718 | 7,110 | 6,886 |
International | 249 | 221 | 573 | 561 |
6,940 | 8,180 | 20,194 | 19,865 | |
Military [Member] | ||||
Domestic Direct | 2,684 | 3,052 | 8,322 | 7,063 |
Domestic Distribution | 2,101 | 2,427 | 5,485 | 5,762 |
International | 20 | 25 | 91 | 152 |
4,805 | 5,504 | 13,898 | 12,977 | |
Space [Member] | ||||
Domestic Direct | 317 | 971 | 1,116 | 2,141 |
Domestic Distribution | 278 | 139 | 996 | 675 |
International | 104 | 120 | 254 | 255 |
699 | 1,230 | 2,366 | 3,071 | |
Medical [Member] | ||||
Domestic Direct | 754 | 1,069 | 2,138 | 2,777 |
Domestic Distribution | 0 | 0 | 0 | 0 |
International | 0 | 0 | 0 | 0 |
754 | 1,069 | 2,138 | 2,777 | |
Commercial [Member] | ||||
Domestic Direct | 401 | 149 | 935 | 437 |
Domestic Distribution | 156 | 152 | 629 | 449 |
International | 125 | 76 | 228 | 154 |
$ 682 | $ 377 | $ 1,792 | $ 1,040 |
Receivables, net, Contract Asse
Receivables, net, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Aug. 27, 2022 | Nov. 30, 2021 | Dec. 01, 2020 |
Accounting Policies [Abstract] | |||
Receivables, net | $ 3,610 | $ 4,974 | $ 2,639 |
Contract assets | 912 | 603 | 512 |
Deferred revenue | $ 1,155 | $ 1,258 | $ 111 |
Undiscounted Future Minimum Lea
Undiscounted Future Minimum Lease Payments (Details) | Aug. 27, 2022 USD ($) |
Accounting Policies [Abstract] | |
2022 | $ 14,000 |
2023 | 14,000 |
Total lease payments | 28,000 |
Interest | 1,000 |
Present value of lease liabilities | $ 27,000 |
Schedule of Property Plant and
Schedule of Property Plant and Equipment Useful Lives (Details) | 9 Months Ended |
Aug. 27, 2022 | |
Minimum [Member] | Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and fixtures | 15 years |
Minimum [Member] | Facility Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and fixtures | 8 years |
Minimum [Member] | Machinery Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and fixtures | 5 years |
Minimum [Member] | Furniture Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and fixtures | 5 years |
Maximum [Member] | Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and fixtures | 30 years |
Maximum [Member] | Facility Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and fixtures | 15 years |
Maximum [Member] | Machinery Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and fixtures | 10 years |
Maximum [Member] | Furniture Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Furniture and fixtures | 8 years |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 28, 2022 | Aug. 27, 2022 | Aug. 28, 2021 | |
Accounting Policies [Abstract] | |||||
Deferred Revenue, Additions | $ 103,000 | ||||
Operating Lease, Right-of-Use Asset | $ 165,000 | $ 165,000 | |||
Operating Lease, Expense | $ 40,000 | $ 37,000 | |||
Long-Term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 325% | 325% | |||
[custom:RemainderLeaseTerm] | six months | ||||
[custom:DilutivePotentialCommonStockInstruments] | $ 0 | $ 0 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details Narrative) - USD ($) | Aug. 27, 2022 | Nov. 30, 2021 |
Fair Value Disclosures [Abstract] | ||
[custom:FairValueFinancialAssetsLiabilitiesRecurringBasis-0] | $ 0 | $ 0 |
[custom:FairValueNonFinancialAssetsNonRecurringBasis-0] | $ 0 | $ 0 |
Debt Disclosure (Details)
Debt Disclosure (Details) - USD ($) | Aug. 27, 2022 | Nov. 30, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Notes payable | $ 14,538,000 | |
Less unamortized debt issuance costs | 179,000 | |
Net Debt | 14,359,000 | |
Less—Current portion | 0 | |
Total long-term debt | $ 14,359,000 | $ 3,369,000 |
COMMITMENTS (Details Narrative)
COMMITMENTS (Details Narrative) - USD ($) | Aug. 27, 2022 | Mar. 26, 2021 |
[custom:MaximumInterestRate-0] | 340% | |
[custom:MinimumInterestRate-0] | 3.25 | |
Construction Loan | $ 16,160,000 | |
[custom:ConstructionLoanInterestRate-0] | 340% | |
Long-Term Line of Credit | $ 6,000,000 | |
Notes Payable | $ 14,538,000 | |
Revolving Loan [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 6,000,000 | |
Construction Loan Agreement [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 16,160,000 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 27, 2022 | Aug. 28, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.10 | $ 0.10 | ||
Dividend [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Dividends Payable, Date Declared | Dec. 07, 2021 | Dec. 08, 2020 | ||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.10 | $ 0.10 | ||
Dividends Payable, Date of Record | Jan. 11, 2022 | Jan. 06, 2021 | ||
Dividends Payable, Date to be Paid | Feb. 10, 2022 | Feb. 12, 2021 |
EMPLOYEE RETENTION CREDIT UND_2
EMPLOYEE RETENTION CREDIT UNDER THE CARES ACT (Details Narrative) | Aug. 27, 2022 USD ($) |
Employee Retention Credit Under Cares Act | |
[custom:OtherReceivablesNetCurrentERCRelated-0] | $ 920,299 |