Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 29, 2020 | May 22, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Mar. 29, 2020 | |
Document Fiscal Year Focus | 2020 | |
Entity Registrant Name | NATIONAL PRESTO INDUSTRIES INC | |
Entity Incorporation, State Country Name | WI | |
Entity Tax Identification Number | 390494170 | |
Entity Address, Address Line One | 3925 NORTH HASTINGS WAY | |
Entity Address, City or Town | EAU CLAIRE | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 54703-3703 | |
City Area Code | 715 | |
Local Phone Number | 839-2121 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,019,214 | |
Entity Central Index Key | 0000080172 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 43,035 | $ 79,579 |
Marketable securities | 83,951 | 78,733 |
Accounts receivable, net | 43,689 | 41,464 |
Inventories: | ||
Finished goods | 26,289 | 33,495 |
Work in process | 96,285 | 87,805 |
Raw materials | 7,665 | 7,236 |
Total inventory | 130,239 | 128,536 |
Assets held for sale | ||
Notes receivable, current | 2,864 | 2,853 |
Other current assets | 8,516 | 6,668 |
Total current assets | 312,294 | 337,833 |
PROPERTY, PLANT AND EQUIPMENT: | ||
PROPERTY, PLANT AND EQUIPMENT | 94,315 | 93,982 |
Less allowance for depreciation and amortization | 57,375 | 56,704 |
PROPERTY, PLANT AND EQUIPMENT, NET | 36,940 | 37,278 |
GOODWILL | 15,317 | 15,317 |
INTANGIBLE ASSETS, net | 2,999 | 3,059 |
NOTES RECEIVABLE | 7,235 | 7,182 |
RIGHT-OF-USE LEASE ASSETS | 3,407 | 3,521 |
DEFERRED INCOME TAXES | 1,032 | 1,281 |
OTHER ASSETS | 4,435 | 4,782 |
Total assets | 383,659 | 410,253 |
CURRENT LIABILITIES: | ||
Accounts payable | 26,261 | 21,652 |
Federal and state income taxes | 5,883 | 3,799 |
Lease liabilities | 521 | 520 |
Accrued liabilities | 13,418 | 13,324 |
Total current liabilities | 46,083 | 39,295 |
LEASE LIABILITIES - NON-CURRENT | 2,886 | 3,001 |
Total liabilities | 48,969 | 42,296 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $1 par value; Authorized: 12,000,000 shares; Issued: 7,440,518 shares | 7,441 | 7,441 |
Paid-in capital | 11,728 | 11,447 |
Retained earnings | 328,892 | 362,842 |
Accumulated other comprehensive income | 229 | 136 |
Stockholders' equity before treasury stock | 348,290 | 381,866 |
Treasury stock, at cost | 13,600 | 13,909 |
Total stockholders' equity | 334,690 | 367,957 |
Total liabilities and stockholders' equity | $ 383,659 | $ 410,253 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 29, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 12,000,000 | 12,000,000 |
Common stock, shares issued | 7,440,518 | 7,440,518 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Consolidated Statements Of Comprehensive Income [Abstract] | ||
Net sales | $ 65,636 | $ 63,850 |
Cost of sales | 49,519 | 51,358 |
Gross profit | 16,117 | 12,492 |
Selling and general expenses | 6,794 | 6,444 |
Intangibles amortization | 60 | |
Operating profit | 9,263 | 6,048 |
Other income | 1,267 | 1,632 |
Earnings before provision for income taxes | 10,530 | 7,680 |
Provision for income taxes from continuing operations | 2,308 | 1,729 |
Net earnings | $ 8,222 | $ 5,951 |
Weighted average shares outstanding: | ||
Basic and diluted | 7,028 | 7,014 |
Net Earnings per share: | ||
Basic and diluted | $ 1.17 | $ 0.85 |
Comprehensive income: | ||
Net earnings | $ 8,222 | $ 5,951 |
Other comprehensive income, net of tax: | ||
Unrealized gain on available-for-sale securities | 93 | 69 |
Comprehensive income | $ 8,315 | $ 6,020 |
Cash dividends declared and paid per common share | $ 6 | $ 6 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net earnings | $ 8,222 | $ 5,951 |
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: | ||
Provision for depreciation | 694 | 949 |
Intangibles amortization | 60 | |
Non-cash retirement plan expense | 185 | |
Other | 400 | 69 |
Changes in operating accounts: | ||
Accounts receivable, net | (2,225) | 15,638 |
Inventories | (1,703) | (6,180) |
Other assets and current assets | (1,501) | 534 |
Accounts payable and accrued liabilities | 4,703 | (7,184) |
Federal and state income taxes | 1,934 | 1,708 |
Net cash provided by operating activities | 10,584 | 11,670 |
Cash flows from investing activities: | ||
Marketable securities purchased | (14,211) | (46,345) |
Marketable securities - maturities and sales | 9,111 | 83,264 |
Purchase of property, plant and equipment | (357) | (2,507) |
Proceeds from insurance settlement | 598 | |
Net cash (used in) provided by investing activities | (5,457) | 35,010 |
Cash flows from financing activities: | ||
Dividends paid | (42,172) | (42,087) |
Proceeds from sale of treasury stock | 528 | 518 |
Other | (27) | (223) |
Net cash used in financing activities | (41,671) | (41,792) |
Net (decrease) increase in cash and cash equivalents | (36,544) | 4,888 |
Cash and cash equivalents at beginning of period | 79,579 | 56,847 |
Cash and cash equivalents at end of period | $ 43,035 | $ 61,735 |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2018 | $ 7,441 | $ 10,360 | $ 362,709 | $ 21 | $ (14,408) | $ 366,123 |
Balance, shares at Dec. 31, 2018 | 6,981 | |||||
Net earnings | 5,951 | 5,951 | ||||
Unrealized gain on available-for-sale securities, net of tax | 69 | 69 | ||||
Dividends paid | (42,087) | (42,087) | ||||
Other | 332 | 1 | 280 | 613 | ||
Other, shares | 14 | |||||
Balance at Mar. 31, 2019 | $ 7,441 | 10,692 | 326,574 | 90 | (14,128) | 330,669 |
Balance, shares at Mar. 31, 2019 | 6,995 | |||||
Balance at Dec. 31, 2019 | $ 7,441 | 11,447 | 362,842 | 136 | (13,909) | 367,957 |
Balance, shares at Dec. 31, 2019 | 7,006 | |||||
Net earnings | 8,222 | 8,222 | ||||
Unrealized gain on available-for-sale securities, net of tax | 93 | 93 | ||||
Dividends paid | (42,172) | (42,172) | ||||
Other | 281 | 309 | 590 | |||
Other, shares | 10 | |||||
Balance at Mar. 29, 2020 | $ 7,441 | $ 11,728 | $ 328,892 | $ 229 | $ (13,600) | $ 334,690 |
Balance, shares at Mar. 29, 2020 | 7,016 |
Consolidated Statements Of St_2
Consolidated Statements Of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Consolidated Statements Of Stockholders' Equity [Abstract] | ||
Regular dividends per share paid | $ 1 | $ 1 |
Extra dividends per share paid | $ 5 | $ 5 |
Basis Of Presentation
Basis Of Presentation | 3 Months Ended |
Mar. 29, 2020 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | NOTE A – BASIS OF PRESENTATION The consolidated interim financial statements included herein are unaudited and have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of management of the Company, the consolidated interim financial statements reflect all the adjustments which were of a normal recurring nature necessary for a fair presentation of the results of the interim periods. The condensed consolidated balance sheet as of December 31, 201 9 is summarized from audited consolidated financial statements, but does not include all the disclosures contained therein and should be read in conjunction with the 201 9 Annual Report on Form 10-K /A . Interim results for the period are not indicative of those for the year. |
General
General | 3 Months Ended |
Mar. 29, 2020 | |
General [Abstract] | |
General | NOTE B – GENERAL Government responses to the COVID-19 virus have impacted worldwide economic activity. The Company is closely monitoring the impact of the pandemic on all aspects of its business, including effects on employees, customers, suppliers, and the global economy and will adjust procedures accordingly. All of the Company’s businesses are deemed essential and as a result, all have been and are currently operating. Although still operating, the COVID-19 related shutdowns have affected each segment in a variety of fashions, which include increased absenteeism; the cancelation of planned trade shows and customer/supplier visits; inefficiencies inherent from working at home; as well as customer and supplier issues in placing and accepting orders; picking up, accepting, or shipping product; or making or accepting deliveries occasioned by similar problems. While there was no material impact on the current quarter’s consolidated financial statements and related disclosures, the extent to which the COVID-19 pandemic impacts the Company’s business for the remainder of 2020 and beyond will depend on future developments that are highly uncertain and cannot be predicted. In response to the government mandated COVID-19 shutdowns, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property (QIP). The Company does not believe that the CARES Act will have a material impact on the Company’s income tax provision for 2020. The Company will continue to evaluate the impact of the CARES Act on its financial position, results of operations and cash flows. |
Revenues
Revenues | 3 Months Ended |
Mar. 29, 2020 | |
Revenues [Abstract] | |
Revenues | NOTE C – REVENUES The Company’s revenues are derived from short-term contracts and programs that are typically completed within 3 to 24 months and are recognized in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“ ASC ”) Topic 606, Revenue from Contracts with Customers . The Company’s contracts each contain one or more performance obligations: the physical delivery of distinct ordered product or products. The Company provides an assurance type product warranty on its products to the original owner. In addition, for the Housewares/Small Appliances segment, the Company estimates returns of seasonal products and returns of newly introduced products sold with a return privilege. Stand-alone selling prices are set forth in each contract and are used to allocate revenue to the corresponding performance obligations. For the Housewares/Small Appliances segment, contracts include variable consideration, as the prices are subject to customer allowances, which principally consist of allowances for cooperative advertising, defective product, and trade discounts. Customer allowances are generally allocated to the performance obligations based on budgeted rates agreed upon with customers, as well as historical experience, and yield the Company’s best estimate of the expected value for the variable consideration. The Company's contracts in the Defense segment are primarily with the U.S. Department of Defense (DOD) and DOD prime contractors. As a consequence, this segment's business essentially depends on the product needs and governmental funding of the DOD. Substantially all of the work performed by the Defense segment directly or indirectly for the DOD is performed on a fixed-price basis. Under fixed-price contracts, the price paid to the contractor is awarded based on competition at the outset of the contract and therefore, with the exception of limited escalation provisions on specific materials, is generally not subject to any adjustments reflecting the actual costs incurred by the contractor. For the Housewares/Small Appliance segment, revenue is generally recognized as the completed, ordered product is shipped to the customer from the Company’s warehouses. For the relatively few situations in which revenue should be recognized when product is received by the customer, the Company adjusts revenue accordingly. For the Defense segment, revenue is primarily recognized when the customer has legal title and formally documents that it has accepted the products. There are also certain termination clauses in Defense segment contracts that may give rise to the recognition of revenue. In some situations, the customer may obtain legal title and accept the products at the Company’s facilities, arranging for transportation at a later date, typically in one to four weeks. The Company does not consider the short-term storage of the customer owned products to be a material performance obligation, and no part of the transaction price is allocated to it. The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, and customer advances and deposits (contract liabilities) on the Company’s Condensed Consolidated Balance Sheets. For the Defense segment, the Company occasionally receives advances or deposits from certain customers before revenue is recognized, resulting in contract liabilities. These advances or deposits do not represent a significant financing component. As of March 29 , 20 20 and December 31, 201 9 , $1,650,000 and $1,847,000 , respectively, of contract liabilities were included in Accounts Payable on the Company’s Condensed Consolidated Balance Sheets. The Company recognized revenue of $212,000 during the three -month period ended March 29, 2020 that was included in the Defense segment contract liability at the beginning of that period. The Company monitors its estimates of variable consideration, which includes customer allowances for cooperative advertising, defective product, and trade discounts, and returns of seasonal and newly introduced product, all of which pertain to the Housewares/Small Appliances segment, and periodically makes cumulative adjustments to the carrying amounts of these contract liabilities as appropriate. During the three mon th period s ended March 29 , 20 20 and March 31 , 201 9 , there were no material adjustments to the aforementioned estimates . There were no amounts of revenue recognized during the same periods related to performance obligations satisfied in a previous period. The portion of contract transaction prices allocated to unsatisfied performance obligations, also known as the contract backlog, in the Company’s Defense segment were $306,265,000 and $310,385,000 as of March 29 , 20 20 and December 31, 201 9 , respectively. The Company anticipates that the unsatisfied performance obligations (contract backlog) will be fulfilled in an 18 to 24 -month period. The performance obligations in the Housewares/Small Appliances segment have original expected durations of less than one year. The Company’s principal sources of revenue are derived from three segme nts: Housewares/Small Appliance, Defense , and Safety , as shown in Note E. Management utilizes the performance measures by segment to evaluate the financial performance of and make operating decisions for the Company. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE D – EARNINGS PER SHARE Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. Diluted earnings per share also includes the dilutive effect of additional potential common shares issuable. Unvested stock awards, which contain non-forfeitable rights to dividends whether paid or unpaid (“participating securities”), are included in the number of shares outstanding for both basic and diluted earnings per share calculations. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 29, 2020 | |
Business Segments [Abstract] | |
Business Segments | NOTE E – BUSINESS SEGMENTS In the following summary, operating profit represents earnings before other income and income taxes. The Company's segments operate discretely from each other with no shared owned or leased manufacturing facilities. Costs associated with corporate activities (such as cash and marketable securities management) and the assets associated with such activities are included within the Housewares/Small Appliances segment for all periods presented. On July 23, 2019, the Company purchased substantially all the assets of OneEvent Technologies, Inc., a Mount Horeb, Wisconsin company established in 2014. OneEvent’s cloud-based learning and analytics engine utilizes a series of sensing devices integrated with a cellular gateway to predict, alert, and prevent. Sensors measure a variety of environmental data including temperature, smoke, carbon monoxide, humidity, water, motion, and more. See Note K. Because a major focus of OneEvent is protection for buildings, homes, assets, and occupant, the Company has created a new operating segment, “Safety,” combining its operations with those of Rusoh, Inc., which designs and markets fire extinguishers. Previously, Rusoh, Inc. had been included in the Company’s Housewares/Small Appliance segment. Prior period segment information has been restated to reflect the Company’s current segmentation. (in thousands) Housewares / Small Appliances Defense Products Safety Total Quarter ended March 29, 2020 External net sales $ 19,812 $ 45,780 $ 44 $ 65,636 Gross profit (loss) 3,264 13,247 (394) 16,117 Operating profit (loss) (54) 10,669 (1,352) 9,263 Total assets 198,769 165,317 19,573 383,659 Depreciation and amortization 237 431 86 754 Capital expenditures 206 151 0 357 Quarter ended March 31, 2019 External net sales $ 19,684 $ 44,141 $ 25 $ 63,850 Gross profit (loss) 2,439 10,308 (255) 12,492 Operating profit (loss) (934) 7,577 (595) 6,048 Total assets 227,710 136,051 12,780 376,541 Depreciation and amortization 310 582 57 949 Capital expenditures 52 2,278 177 2,507 |
Fair Value Of Financial Instrum
Fair Value Of Financial Instruments | 3 Months Ended |
Mar. 29, 2020 | |
Fair Value Of Financial Instruments [Abstract] | |
Fair Value Of Financial Instruments | NOTE F - FAIR VALUE OF FINANCIAL INSTRUMENTS The Company utilizes the methods of fair value as described in FASB A SC 820, Fair Value Measurements and Disclosures, to value its financial assets and liabilities. ASC 820 utilizes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying amounts for cash and cash equivalents, accounts receivable, notes receivable, accounts payable, and accrued liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. |
Cash, Cash Equivalents And Mark
Cash, Cash Equivalents And Marketable Securities | 3 Months Ended |
Mar. 29, 2020 | |
Cash, Cash Equivalents And Marketable Securities [Abstract] | |
Cash, Cash Equivalents And Marketable Securities | NOTE G - CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES The Company considers all highly liquid marketable securities with an original maturity of three months or less to be cash equivalents. Cash equivalents include money market funds. The Company deposits its cash in high quality financial institutions. The balances, at times, may exceed federally insured limits. Money market funds are reported at fair value determined using quoted prices in active markets for identical securities (Level 1, as defined by FASB ASC 820). The Company has classified all marketable securities as available-for-sale which requires the securities to be reported at estimated fair value, with unrealized gains and losses, net of tax, reported as a separate component of stockholders' equity. Highly liquid, tax-exempt variable rate demand notes with put options exercisable in three months or less are classified as marketable securities. At March 29, 2020 and December 31, 201 9 , cost for marketable securities was determined using the specific identification method. A summary of the amortized costs and fair values of the Company’s marketable securities at the end of the periods presented is shown in the following table. All of the Company’s marketable securities are classified as Level 2, as defined by FASB ASC 820, with fair values determined using significant other observable inputs, which include quoted prices in markets that are not active, quoted prices of similar securities, recently executed transactions, broker quotations, and other inputs that are observable. (In Thousands) MARKETABLE SECURITIES Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses March 29, 2020 Tax-exempt Municipal Bonds $ 45,085 $ 45,375 $ 290 $ - Variable Rate Demand Notes 38,576 38,576 - - Total Marketable Securities $ 83,661 $ 83,951 $ 290 $ - December 31, 2019 Tax-exempt Municipal Bonds $ 39,313 $ 39,484 $ 176 $ 5 Variable Rate Demand Notes 39,249 39,249 - - Total Marketable Securities $ 78,562 $ 78,733 $ 176 $ 5 Proceeds from maturities and sales of available-for-sale securities totaled $ 9,111,000 and $ 83,264,000 for the three month periods ended March 29, 2020 and March 31 , 201 9 , respectively. There were no gross gains or losses related to sales of marketable securities during the sa me periods. Net unrealized gains included in other comprehensive income were $118,000 and $88,000 before taxes for the three month periods ended March 29, 2020 and March 31 , 201 9 . No unrealized gains or losses were reclassified out of accumulated other comprehensive income during the same periods. The contractual maturities of the marketable securities held at March 29 , 20 20 are as follows: $38,652,000 within one year; $ 6,723,000 beyond one year to five years; $ 4,036,000 beyond five years to ten years, and $ 34,540,000 beyond ten years. All of the instruments in the beyond five year ranges are variable rate demand notes which can be tendered for cash at par plus interest within seven days. Despite the stated contractual maturity date, to the extent a tender is not honored, the notes become immediately due and payable. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 29, 2020 | |
Other Assets [Abstract] | |
Other Assets | NOTE H – OTHER ASSETS Other Assets includes prepayments that are made from time to time by the Company for certain materials used in the manufacturing process in the Housewares/Small Appliances segment. The Company expects to utilize the prepayments and related materials over an estimated period of two years. As of March 29 , 20 20 and December 31, 201 9 , $9,049,000 and $9,396,000 of such prepayments, respectively, remained unused and outstanding. At March 29 , 20 20 and December 31, 201 9 , $4,614,000 and $4,614,000 , respectively were included in Other Current Assets, representing the Company’s best estimate of the expected utilization of the prepayments and related materials during the twelve-month periods following those dates. |
Leases
Leases | 3 Months Ended |
Mar. 29, 2020 | |
Leases [Abstract] | |
Leases | NOTE I – LEASES The Company accounts for leases under ASC Topic 842, Leases , which was adopted on January 1, 2019. The Company’s leasing activities include roles as both lessee and lessor. As lessee, the Company’s primary leasing activities include buildings and structures to support its manufacturing operations at one location in its Defense segment, and warehouse space and equipment to support its distribution center operations in its Housewares/Small Appliances segment. As lessor, the Company’s primary leasing activity is comprised of manufacturing and office space located adjacent to its corporate offices. All of the Company’s leases are classified as operating leases. The Company’s leases as lessee in its Defense segment provide for variable lease payments that are based on changes in the Consumer Price Index. As lessor, the Company’s primary lease also provides for variable lease payments that are based on changes in the Consumer Price Index, as well as on increases in costs of insurance, real estate taxes, and utilities related to the leased space. Generally, all of the Company’s lease contracts provide for options to extend and terminate them. The majority of lease terms of the Company’s lease contracts reflect extension options, while none reflect termination options. The Company has determined that the rates implicit in its leases are not readily determinable and estimates its incremental borrowing rates utilizing quotes from financial institutions for real estate and equipment, as applicable, over periods of time similar to the terms of its leases. The Company has entered into various short-term leases as lessee and has elected a non-recognition accounting policy, as permitted by ASC Topic 842 . Quarter Ending Quarter Ending Summary of Lease Cost (in thousands) March 29, 2020 March 31, 2019 Operating lease cost $ 178 $ 168 Short-term and variable lease cost 98 23 Total lease cost $ 276 $ 191 Operating cash used for operating leases was $276,000 and $191,000 for the quarters ended March 29, 2020 and March 31, 2019 , respectively. The weighted-average remaining lease term was 7. 4 years, and the weighted-average discount rate was 5.6% as of March 29, 2020 . Maturities of operating lease liabilities are as follows: Years ending December 31: (In thousands) 2020 (remaining nine months) $ 522 2021 653 2022 652 2023 536 2024 439 Thereafter 1,382 Total lease payments $ 4,184 Less: future interest expense 777 Lease liabilities $ 3,407 Lease income from operating lease payments was $492,000 and $444,000 for the quarters ended March 29, 2020 and March 31, 2019, respectively . Undiscounted cash flows provided by lease payments are expected as follows: Years ending December 31: (In thousands) 2020 (remaining nine months) $ 1,389 2021 1,839 2022 1,832 2023 1,832 2024 1,832 Thereafter 14,656 Total lease payments $ 23,380 The Company considers risk associated with the residual value of its leased real property to be low, given the nature of the long-term lease agreement, the Company’s ability to control the maintenance of the property, and the creditworthiness of the lessee. The residual value risk is further mitigated by the long-lived nature of the property, and the propensity of such assets to hold their value or, in some cases, appreciate in value. |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 29, 2020 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | NOTE J – COMMITMENTS AND CONTINGENCIES The Company is involved in largely routine litigation incidental to its business. Management believes the ultimate outcome of the litigation will not have a material effect on the Company's consolidated financial position, liquidity, or results of operations. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 29, 2020 | |
Business Acquisition [Abstract] | |
Business Acquisition | NOTE K – BUSINESS ACQUISITION On July 23, 2019 , the Company’s wholly-owned subsidiary, OETA, Inc., purchased substantially all the assets of OneEvent Technologies, Inc., a Mount Horeb, Wisconsin company established in 2014 for $6,501,000 , including cash of $4,020,000 , forgiveness of a note receivable of $2,364,000 and a potential earn out, which is based on earnings over a seven- year period. The current estimated value of the earn out is $117,000 , however, the value of the earn out will vary depending on actual earnings over the seven- year period . OneEvent’s systems provide early warning of conditions that could ultimately lead to significant losses. The initial application combines patented machine learning, digital sensors and cloud-based technology to continuously monitor freezers and refrigerators, instantly detecting and alerting users to potential safety issues around pharmaceuticals and food . The OneEvent® system also has the ability to continually measure other factors such as smoke, carbon monoxide , motion , humidity, and moisture . Pursuant to the terms of the transaction, the seller has subsequently changed its corporate name, and OETA, Inc. has now legally adopted the corporate name, OneEvent Technologies, Inc. The acquisition was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been recorded to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of these assets and liabilities. The following table shows the amounts recorded as of their acquisition date. (in thousands) Cash $ 287 Receivables 14 Inventory 307 Other current assets 105 Property, plant and equipment 35 Intangibles 2,141 Goodwill 3,831 Right-of-Use Lease Assets 59 Total assets acquired 6,779 Less: Current liabilities assumed 255 Lease Liability - Noncurrent 23 Net assets acquired $ 6,501 The acquired intangibles primarily include technology software and patents that will be amortized over a period of 10 - 15 years. The amount of goodwill recorded reflects expected earning potential of the acquired technology software and patents. The recorded goodwill is deductible for income tax purposes over a fifteen-year period. The Company’s statement of comprehensive income for the first quarter of 2019 does not include any revenue or loss from the acquired facility. The following pro forma condensed consolidated results of operations has been prepared as if the acquisition had occurred as of January 1, 2019. (unaudited) (in thousands, except per share data) Quarter Ended March 31, 2019 Net sales $ 63,856 Net earnings 5,266 Net earnings per share (basic and diluted) $ 0.75 Weighted average shares outstanding (basic and diluted) 7,014 The unaudited pro forma financial information presented above is not intended to represent or be indicative of what would have occurred if the transactions had taken place on the dates presented and is not indicative of what the Company’s actual results of operations would have been had the acquisition been completed at the beginning of the periods indicated above. The pro forma combined results reflect one-time costs to fully merge and operate the combined organization more efficiently, but do not reflect anticipated synergies expected to result from the combination and should not be relied upon as being indicative of the future results that the Company will experience. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 29, 2020 | |
Recently Issued Accounting Pronouncements [Abstract] | |
Recently Issued Accounting Pronouncements | NOTE L – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes , which is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of ASC 740, Income Taxes , and providing for simplification in several other areas. The standard is effective for fiscal years beginning after December 15, 2020. The Company is evaluating the impact of the adoption of ASU 2019-12 on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which provides guidance for estimating credit losses on certain types of financial instruments, including trade receivables, by introducing an approach based on expected losses. The expected loss approach will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. ASU 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The new standard was adopted on January 1, 2020 and was applied prospectively. The Company ha s made changes to its processes for the assessment of the adequacy of the allowance for credit losses on certain types of financial instruments, including accounts receivable, notes receivable, and available-for-sale debt securities. The adoption of ASU 2016-13 did not have a material impact on the consolidated financial statements , related disclosures, and results of operations . |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Business Segments [Abstract] | |
Summary Of Business Segment Information | (in thousands) Housewares / Small Appliances Defense Products Safety Total Quarter ended March 29, 2020 External net sales $ 19,812 $ 45,780 $ 44 $ 65,636 Gross profit (loss) 3,264 13,247 (394) 16,117 Operating profit (loss) (54) 10,669 (1,352) 9,263 Total assets 198,769 165,317 19,573 383,659 Depreciation and amortization 237 431 86 754 Capital expenditures 206 151 0 357 Quarter ended March 31, 2019 External net sales $ 19,684 $ 44,141 $ 25 $ 63,850 Gross profit (loss) 2,439 10,308 (255) 12,492 Operating profit (loss) (934) 7,577 (595) 6,048 Total assets 227,710 136,051 12,780 376,541 Depreciation and amortization 310 582 57 949 Capital expenditures 52 2,278 177 2,507 |
Cash, Cash Equivalents And Ma_2
Cash, Cash Equivalents And Marketable Securities (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Cash, Cash Equivalents And Marketable Securities [Abstract] | |
Summary Of The Amortized Costs And Fair Values Of Marketable Securities | (In Thousands) MARKETABLE SECURITIES Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses March 29, 2020 Tax-exempt Municipal Bonds $ 45,085 $ 45,375 $ 290 $ - Variable Rate Demand Notes 38,576 38,576 - - Total Marketable Securities $ 83,661 $ 83,951 $ 290 $ - December 31, 2019 Tax-exempt Municipal Bonds $ 39,313 $ 39,484 $ 176 $ 5 Variable Rate Demand Notes 39,249 39,249 - - Total Marketable Securities $ 78,562 $ 78,733 $ 176 $ 5 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Leases [Abstract] | |
Summary of Lease Cost | Quarter Ending Quarter Ending Summary of Lease Cost (in thousands) March 29, 2020 March 31, 2019 Operating lease cost $ 178 $ 168 Short-term and variable lease cost 98 23 Total lease cost $ 276 $ 191 |
Summary of Operating Lease Liability Maturities | Years ending December 31: (In thousands) 2020 (remaining nine months) $ 522 2021 653 2022 652 2023 536 2024 439 Thereafter 1,382 Total lease payments $ 4,184 Less: future interest expense 777 Lease liabilities $ 3,407 |
Summary of Lease Income from Operating Lease Payments | Years ending December 31: (In thousands) 2020 (remaining nine months) $ 1,389 2021 1,839 2022 1,832 2023 1,832 2024 1,832 Thereafter 14,656 Total lease payments $ 23,380 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Business Acquisition [Abstract] | |
Schedule Of Assets Acquired and Liabilities Assumed | (in thousands) Cash $ 287 Receivables 14 Inventory 307 Other current assets 105 Property, plant and equipment 35 Intangibles 2,141 Goodwill 3,831 Right-of-Use Lease Assets 59 Total assets acquired 6,779 Less: Current liabilities assumed 255 Lease Liability - Noncurrent 23 Net assets acquired $ 6,501 |
Schedule Of Pro Forma Results of Operations | (unaudited) (in thousands, except per share data) Quarter Ended March 31, 2019 Net sales $ 63,856 Net earnings 5,266 Net earnings per share (basic and diluted) $ 0.75 Weighted average shares outstanding (basic and diluted) 7,014 |
Revenues (Narrative) (Details)
Revenues (Narrative) (Details) | 3 Months Ended | ||
Mar. 29, 2020USD ($)segmentitem | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Revenue contract, number of performance obligations | item | 1 | ||
Operating segments | segment | 3 | ||
Minimum [Member] | |||
Revenue contract period | 3 months | ||
Maximum [Member] | |||
Revenue contract period | 24 months | ||
Housewares/ Small Appliances [Member] | |||
Revenue recognized from performance obligations satisfied in a prior period | $ 0 | $ 0 | |
Defense [Member] | |||
Contract liabilities | 1,650,000 | $ 1,847,000 | |
Revenue recognized that was previously included in contract liability | 212,000 | ||
Unsatified performance obligations | $ 306,265,000 | $ 310,385,000 | |
Defense [Member] | Minimum [Member] | |||
Holding period following recognition of revenue | 7 days | ||
Defense [Member] | Maximum [Member] | |||
Holding period following recognition of revenue | 28 days |
Revenues (Timing Of Performance
Revenues (Timing Of Performance Obligation) (Narrative) (Details) - Defense [Member] - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-02 | Mar. 29, 2020 |
Minimum [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Fulfullment period of unsatisfied performance obligations | 18 months |
Maximum [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Fulfullment period of unsatisfied performance obligations | 24 months |
Business Segments (Summary Of B
Business Segments (Summary Of Business Segment Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
External net sales | $ 65,636 | $ 63,850 | |
Gross profit | 16,117 | 12,492 | |
Operating profit | 9,263 | 6,048 | |
Total assets | 383,659 | 376,541 | $ 410,253 |
Depreciation and amortization | 754 | 949 | |
Capital expenditures | 357 | 2,507 | |
Housewares/ Small Appliances [Member] | |||
Segment Reporting Information [Line Items] | |||
External net sales | 19,812 | 19,684 | |
Gross profit | 3,264 | 2,439 | |
Operating profit | (54) | (934) | |
Total assets | 198,769 | 227,710 | |
Depreciation and amortization | 237 | 310 | |
Capital expenditures | 206 | 52 | |
Defense [Member] | |||
Segment Reporting Information [Line Items] | |||
External net sales | 45,780 | 44,141 | |
Gross profit | 13,247 | 10,308 | |
Operating profit | 10,669 | 7,577 | |
Total assets | 165,317 | 136,051 | |
Depreciation and amortization | 431 | 582 | |
Capital expenditures | 151 | 2,278 | |
Safety [Member] | |||
Segment Reporting Information [Line Items] | |||
External net sales | 44 | 25 | |
Gross profit | (394) | (255) | |
Operating profit | (1,352) | (595) | |
Total assets | 19,573 | 12,780 | |
Depreciation and amortization | 86 | 57 | |
Capital expenditures | $ 0 | $ 177 |
Cash, Cash Equivalents And Ma_3
Cash, Cash Equivalents And Marketable Securities (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Cash, Cash Equivalents And Marketable Securities [Line Items] | ||
Proceeds from sales and maturity of available-for-sale securities | $ 9,111,000 | $ 83,264,000 |
Gross gains or losses related to sales of marketable securities | 0 | 0 |
Net unrealized gains (losses) included in accumulated other comprehensive income, before taxes | 118,000 | 88,000 |
Contractual maturities of marketable securities within 1 year | 38,652,000 | |
Contractual maturities of marketable securities, years 2-5 | 6,723,000 | |
Contractual maturities of marketable securities, years 6-10 | 4,036,000 | |
Contractual maturities of marketable securities, after 10 years | $ 34,540,000 | |
Marketable securities liquidation period | 7 days | |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | ||
Cash, Cash Equivalents And Marketable Securities [Line Items] | ||
Reclassification out of AOCI | $ 0 | $ 0 |
Cash, Cash Equivalents And Ma_4
Cash, Cash Equivalents And Marketable Securities (Summary Of The Amortized Costs And Fair Values Of Marketable Securities) (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
MARKETABLE SECURITIES, Amortized Cost | $ 83,661 | $ 78,562 |
MARKETABLE SECURITIES, Fair Value | 83,951 | 78,733 |
MARKETABLE SECURITIES, Gross Unrealized Gains | 290 | 176 |
MARKETABLE SECURITIES, Gross Unrealized Losses | 5 | |
Tax-Exempt Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
MARKETABLE SECURITIES, Amortized Cost | 45,085 | 39,313 |
MARKETABLE SECURITIES, Fair Value | 45,375 | 39,484 |
MARKETABLE SECURITIES, Gross Unrealized Gains | 290 | 176 |
MARKETABLE SECURITIES, Gross Unrealized Losses | 5 | |
Variable Rate Demand Notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
MARKETABLE SECURITIES, Amortized Cost | 38,576 | 39,249 |
MARKETABLE SECURITIES, Fair Value | $ 38,576 | $ 39,249 |
Other Assets (Narrative) (Detai
Other Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Dec. 31, 2019 | |
Other Current Assets [Member] | ||
Materials Prepayments | $ 4,614 | $ 4,614 |
Housewares/ Small Appliances [Member] | ||
Expected prepayment utilization period | 2 years | |
Housewares/ Small Appliances [Member] | Other Assets [Member] | ||
Materials Prepayments | $ 9,049 | $ 9,396 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating cash used for operating leases | $ 276 | $ 191 |
Weighted-average remaining lease term | 7 years 4 months 24 days | |
Weighted average discount rate | 5.60% | |
Lease income from operating lease payments | $ 492 | $ 444 |
Leases (Summary of Lease Cost)
Leases (Summary of Lease Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 178 | $ 168 |
Short-term and variable lease cost | 98 | 23 |
Total lease cost | $ 276 | $ 191 |
Leases (Summary of Operating Le
Leases (Summary of Operating Lease Liability Maturities) (Details) $ in Thousands | Mar. 29, 2020USD ($) |
Leases [Abstract] | |
2020 (remaining three months) | $ 522 |
2021 | 653 |
2022 | 652 |
2023 | 536 |
2024 | 439 |
Thereafter | 1,382 |
Total lease payments | 4,184 |
Less: future interest expense | 777 |
Lease liabilities | $ 3,407 |
Leases (Summary of Lease Income
Leases (Summary of Lease Income from Operating Lease Payments) (Details) $ in Thousands | Mar. 29, 2020USD ($) |
Leases [Abstract] | |
2020 (remaining three months) | $ 1,389 |
2021 | 1,839 |
2022 | 1,832 |
2023 | 1,832 |
2024 | 1,832 |
Thereafter | 14,656 |
Total lease payments | $ 23,380 |
Business Acquisition (Narrative
Business Acquisition (Narrative) (Details) - OneEvent Technologies, Inc. [Member] $ in Thousands | 3 Months Ended |
Mar. 29, 2020USD ($) | |
Business Acquisition [Line Items] | |
Acquisition date | Jul. 23, 2019 |
Business acquisition, purchase price | $ 6,501 |
Business acquisition, purchase price, cash | 4,020 |
Business acquisition, purchase price, forgiven note receivable | $ 2,364 |
Earn out period | 7 years |
Potential earn out payment | $ 117 |
Minimum [Member] | Technology And Patents [Member] | |
Business Acquisition [Line Items] | |
Acquired intangibles, amortization period | 10 years |
Maximum [Member] | Technology And Patents [Member] | |
Business Acquisition [Line Items] | |
Acquired intangibles, amortization period | 15 years |
Business Acquisition (Schedule
Business Acquisition (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||
Goodwill | $ 15,317 | $ 15,317 |
OneEvent Technologies, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Cash | 287 | |
Receivables | 14 | |
Inventory | 307 | |
Other current assets | 105 | |
Property, plant and equipment | 35 | |
Intangibles | 2,141 | |
Goodwill | 3,831 | |
Right-of-Use Lease Assets | 59 | |
Total Assets Acquired | 6,779 | |
Less: Current Liabilities Assumed | 255 | |
Lease Liability - Noncurrent | 23 | |
Net Assets Acquired | $ 6,501 |
Business Acquisition (Schedul_2
Business Acquisition (Schedule of Pro Forma Results of Operations) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Business Acquisition [Line Items] | ||
Weighted average shares outstanding (basic and diluted) | 7,028 | 7,014 |
OneEvent Technologies, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Net Sales | $ 63,856 | |
Net Earnings | $ 5,266 | |
Net earnings per share (basic and diluted) | $ 0.75 | |
Weighted average shares outstanding (basic and diluted) | 7,014 |