Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Dec. 28, 2013 | Mar. 10, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'CPS TECHNOLOGIES CORP/DE/ | ' |
Entity Central Index Key | '0000814676 | ' |
Document Type | '10-K | ' |
Document Period End Date | 28-Dec-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-28 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Public Float | ' | $22,014,484 |
Entity Common Stock, Shares Outstanding | ' | 13,066,641 |
Document Fiscal Period Focus | 'FY | ' |
Document Fiscal Year Focus | '2013 | ' |
Balance_Sheets
Balance Sheets (USD $) | Dec. 28, 2013 | Dec. 29, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $1,571,054 | $306,854 |
Accounts receivable-trade, net | 2,900,457 | 2,876,149 |
Inventories, net | 2,183,699 | 2,457,315 |
Prepaid expenses and other current assets | 175,726 | 140,723 |
Deferred taxes | 649,420 | 354,825 |
Total current assets | 7,480,356 | 6,135,866 |
Property and equipment: | ' | ' |
Production equipment | 7,728,408 | 7,430,783 |
Furniture and office equipment | 383,990 | 354,490 |
Leasehold improvements | 759,819 | 735,099 |
Total cost | 8,872,217 | 8,520,372 |
Accumulated depreciation and amortization | -7,470,815 | -6,877,285 |
Construction in progress | 431,385 | 138,133 |
Net property and equipment | 1,832,787 | 1,781,220 |
Deferred taxes, non-current portion | 1,826,482 | 2,432,148 |
Total assets | 11,139,625 | 10,349,234 |
Current liabilities: | ' | ' |
Line of credit borrowings | ' | 500,000 |
Accounts payable | 1,091,909 | 1,179,313 |
Accrued expenses | 1,106,813 | 938,043 |
Obligations under capital leases, current portion | 76,372 | 123,366 |
Total current liabilities | 2,275,094 | 2,740,722 |
Obligations under capital leases, non-current | 0 | 76,372 |
Total liabilities | 2,275,094 | 2,817,094 |
Stockholders Equity: | ' | ' |
Common stock, $0.01 par value, authorized 15,000,000 shares; issued 13,178,042 and 12,928,042; outstanding 13,066,641 and 12,871,759 shares; at December 28, 2013 and December 29, 2012, respectively | 131,781 | 129,281 |
Additional paid-in capital | 34,278,757 | 33,821,961 |
Accumulated deficit | -25,318,332 | -26,284,787 |
Less cost of 111,401 and 56,283 common shares repurchased at December 28, 2013 and December 29, 2012, respectively | -227,675 | -134,315 |
Total stockholders equity | 8,864,531 | 7,532,140 |
Total liabilities and stockholders equity | $11,139,625 | $10,349,234 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 28, 2013 | Dec. 29, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Common Stock, authorized | 15,000,000 | 15,000,000 |
Common Stock, issued shares | 13,178,042 | 12,928,042 |
Common Stock, outstanding shares | 13,066,641 | 12,871,759 |
Common Stock, par value | $0.01 | $0.01 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | ||
Dec. 28, 2013 | Dec. 29, 2012 | Dec. 31, 2011 | |
Income Statement [Abstract] | ' | ' | ' |
Product sales | $21,094,801 | $13,454,250 | $17,643,151 |
Research and development under cooperative agreement | 311,198 | 597,460 | 2,164,001 |
Total revenues | 21,405,999 | 14,051,710 | 19,807,152 |
Cost of product sales | 15,789,840 | 13,293,905 | 14,878,123 |
Cost of research and development under cooperative agreement | 259,082 | 501,868 | 1,973,114 |
Gross Margin | 5,357,077 | 255,937 | 2,955,915 |
Selling, general, and administrative | 3,897,588 | 3,055,077 | 3,291,745 |
Income (loss) from operations | 1,459,489 | -2,799,140 | -335,830 |
Other expense, net | -30,327 | -28,588 | -32,671 |
Income (loss) before income tax | 1,429,162 | -2,827,728 | -368,501 |
Income tax provision (benefit) | 462,707 | -1,305,700 | -322,766 |
Net income (loss) | $966,455 | ($1,522,028) | ($45,735) |
Net income (loss) basic common share | $0.07 | ($0.12) | $0 |
Weighted average number of basic common shares outstanding | 12,985,107 | 12,869,618 | 12,765,774 |
Net income (loss) per diluted common share | $0.07 | ($0.12) | $0 |
Weighted average number of diluted common shares outstanding | 13,265,486 | 12,869,618 | 12,765,774 |
Shareholders_Equity
Shareholders Equity (USD $) | Common Stock | Additional Paid-In Capital | Stock repurchased | Stockholders' equity | Total |
Beginning balance, par value of shares issued at Dec. 25, 2010 | $126,989 | ' | ' | ' | ' |
Beginning balance, stockholders equity at Dec. 25, 2010 | ' | ' | ' | 8,485,550 | ' |
Beginning balance, shares at Dec. 25, 2010 | 12,698,842 | ' | ' | ' | ' |
Share-based compensation expense | ' | 210,125 | ' | 210,125 | ' |
Tax benefit from exercise of stock options | ' | 126,049 | ' | 126,049 | 126,049 |
Repurchase of common stock | ' | ' | -73,480 | -73,480 | ' |
Issuance of common stock pursuant to exercise of stock options | ' | 97,302 | ' | 97,302 | 99,533 |
Issuance of common stock pursuant to exercise of stock options, number of share issued | 223,100 | ' | ' | ' | ' |
Issuance of common stock pursuant to exercise of stock options, par value | 2,231 | ' | ' | 2,231 | ' |
Net Income (loss) | ' | ' | ' | -45,735 | -45,735 |
Ending balance, stockholders equity at Dec. 31, 2011 | ' | ' | ' | ' | $8,802,042 |
Ending balance, shares at Dec. 31, 2011 | ' | ' | ' | ' | 12,921,942 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | ||
Dec. 28, 2013 | Dec. 29, 2012 | Dec. 31, 2011 | |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | $966,455 | ($1,522,028) | ($45,735) |
Share-based compensation | 248,535 | 242,793 | 210,125 |
Depreciation and amortization | 615,348 | 723,092 | 751,411 |
Write off of construction in progress | ' | 12,720 | ' |
Deferred taxes | 311,071 | -1,306,156 | -380,538 |
Excess tax benefit from stock options exercised | -117,401 | ' | -126,049 |
Provision for bad debt | ' | ' | 18,011 |
Accounts receivable - trade | -24,308 | 236,811 | 791,991 |
Inventories | 273,616 | 681,302 | -1,614,859 |
Prepaid expenses and other current assets | -35,003 | 11,721 | -75,865 |
Accounts payable | -87,404 | -284,684 | 651,433 |
Accrued expenses | 286,171 | 278,012 | -98,179 |
Net cash provided (used) by operating activities | 2,437,080 | -926,417 | 81,746 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of property and equipment | -666,915 | -209,987 | -635,255 |
Net cash used by investing activities | -666,915 | -209,987 | -635,255 |
Cash flows from financing activities: | ' | ' | ' |
Payment of capital lease obligations | -123,366 | -208,504 | -259,386 |
Excess tax benefit from stock options exercised | 117,401 | ' | 126,049 |
(Repayment of) proceeds from line of credit | -500,000 | 500,000 | ' |
Proceeds from issuance of common stock | 93,360 | 9,333 | 99,533 |
Repurchase of common stock | -93,360 | ' | -73,480 |
Net cash provided (used) by financing activities | -505,965 | 300,829 | -107,284 |
Net increase (decrease) in cash and cash equivalents | 1,264,200 | -835,575 | -660,793 |
Cash and cash equivalents at beginning of year | 306,854 | 1,142,429 | 1,803,222 |
Cash and cash equivalents at end of year | 1,571,054 | 306,854 | 1,142,429 |
Supplemental cash flow information: | ' | ' | ' |
Acquisition of production equipment under capital leases | ' | ' | 238,900 |
Income taxes paid, net of refund | ' | ' | 11,900 |
Interest paid | $30,327 | $28,588 | $32,672 |
Nature_of_Business
Nature of Business | 12 Months Ended |
Dec. 28, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Nature of Business | ' |
(1) Nature of Business | |
CPS Technologies Corporation (the “Company”) provides advanced material solutions to the electronics, robotics, automotive and other industries. The Company’s primary advanced material solution is metal matrix composites which are a combination of metal and ceramic. | |
CPS also assembles housings and packages for hybrid circuits. These housings and packages may include components made of metal-matrix composites or they may include components made of more traditional materials such as aluminum, copper-tungsten, etc. | |
The Company sells into several end markets including the wireless communications infrastructure market, high-performance microprocessor market, motor controller market, and other microelectronic and structural markets. In 2008 the Company also entered into a cooperative agreement with the U.S. Army to further develop its composite technology to produce armor. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 28, 2013 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
(2) Summary of Significant Accounting Policies | |
(2)(a) Cash and Cash Equivalents | |
The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. | |
(2)(b) Accounts Receivable | |
The Company reports its accounts receivable at the invoiced amount less an allowance for doubtful accounts. The Company’s management provides appropriate provisions for uncollectible accounts based upon factors surrounding the credit risk and activity of specific customers, historical trends, economic conditions and other information. Adjustments to the allowance are charged to operations in the period in which information becomes available that may affect the allowance. Sales returns are offset against the related amounts invoiced in accounts receivable. | |
(2)(c) Inventories | |
Inventories are stated at the lower of cost or market, as determined under the first-in, first-out method (FIFO), or market. A reserve for obsolete inventories, if any, is based on factors regarding the sales and usage of such inventories, including inventories manufactured for specific customers. The Company’s general obsolescence policy is to write off obsolete inventory when there has been no activity on a particular part for a twelve month period and there are no pending customer orders. | |
(2)(d) Property and Equipment | |
Property and equipment are stated at cost. Depreciation of equipment is calculated on a straight-line basis over the estimated useful life, generally five years for production equipment and three to five years for furniture and office equipment. Amortization of equipment under capital leases is calculated on a straight-line basis over the shorter of the life of the lease or the estimated useful life of the equipment. Maintenance and repairs are charged to expense as incurred. Upon retirement or sale, the cost and related accumulated depreciation or amortization are removed from their respective accounts. Any gains or losses on the disposition of property and equipment are included in the results of operations in the period in which they occur. | |
(2)(e) Impairment of Long-Lived Assets | |
The Company reviews long-lived assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. Recoverability is assessed based on estimated undiscounted future cash flows. As of December 28, 2013 and December 29, 2012, the Company believes that there has been no impairment of its long-lived assets. | |
(2)(f) Revenue Recognition | |
The Company recognizes revenue in accordance with the provision of the Securities and Exchange Commission Staff Accounting Bulletin ("SAB") No. 104 which establishes guidance in applying generally accepted accounting principles to revenue recognition in financial statements. SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. | |
Shipping terms are customarily EXW (Ex-works), shipping point which terms are consistent with “FOB Shipping Point”. Revenues for products sold in the normal course of business are recognized upon shipment when delivery terms are EXW shipping point and all other revenue recognition criteria have been met. | |
The Company has entered into consigned inventory agreements with a few customers. For products shipped under consigned inventory agreements, the Company recognizes revenue when either the customer notifies CPS that they have picked the product from the consigned inventory or, in some cases, when sixty days have elapsed from the date the shipment arrives at the customer’s location. | |
In 2008, CPS entered into a cooperative agreement with the US Army Research Laboratory to perform research and development concerning hybrid metal matrix composite encapsulated ceramic armor technology. The Cooperative Agreement was a four-year agreement which was subsequently extended through July 14, 2014. This agreement was 95% funded by the US Department of Defense and 5% funded by CPS. | |
Revenues on this Cooperative Agreement are recognized proportionally as costs are incurred. The Company is reimbursed for reasonable and allocable costs up to the reimbursement limits set by the Cooperative Agreement. All payments to the Company for work performed on this Cooperative Agreement are subject to audit and adjustment by the Defense Contract Audit Agency. Adjustments, if any, are recognized in the period made. | |
The Cooperative Agreement extends for four years and provides for funding of up to $8.34 million, over the four years, but actual funding is provided incrementally on a year-to-year basis, depending on, among other factors, if yearly objectives are met and if Congress authorizes the funds ($6.6 million has been authorized through December 28, 2013). If the total $8.34 million in funding is provided by the Government, the Company’s cost share will amount to $439 thousand over the term of the Agreement. Amendment/Modification #P00009 extended the term of performance of the original Agreement, Cooperative Agreement W911NF-08-2-0017, from July 14, 2013 to July 14, 2014. As of December 28, 2013, the Company had invoiced $6.6 million since inception of the Agreement which represents the full amount approved to date of $6.6 million. | |
(2)(g) Research and Development Costs | |
In 2013, costs incurred related to funding under the Cooperative Agreement totaled $311 thousand of which 100% was reimbursed by the U.S. Army and was recorded as revenue. This revenue of $311 thousand resulted in a gross margin of $52 thousand. | |
In 2012, costs incurred related to funding under the Cooperative Agreement were $605 thousand of which $597 thousand is reimbursed by the U.S. Army and $8 thousand is the Company’s cost share. The revenue recognized by the Company of $597 thousand less the Company’s research and development cost of $502 thousand resulted in a gross margin of $95 thousand. | |
In 2011, costs incurred related to total funding under the Cooperative Agreement were $2.259 million of which $2.164 million was reimbursed by the U.S. Army and $95 thousand was the Company’s cost share. The revenue recognized by the Company of $2.164 million less the Company’s research and development costs of $1.973 million resulted in a gross margin of $191 thousand. | |
(2)(h) Income Taxes | |
Deferred tax assets and liabilities are based on the net tax effects of tax credits, operating loss carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company considers many factors in assessing whether or not a valuation allowance for its Deferred Tax asset is warranted. On the positive side, the Company considered such factors as its: history of taxable earnings (seven consecutive years from 2003-10), global customer base consisting of large companies with significant resources, current products and their expected life, technological advantages, potential for price increases, trend of improved manufacturing efficiencies and the magnitude of the Deferred Tax Asset compared with the Company’s expectation of future earnings over the remaining life of the asset. On the negative side, the Company considered such factors as: the current global recession, the Company’s ability to absorb additional periods of operating losses and negative cash flow and the potential for the technological breakthroughs and substitution of the Company’s products by lower cost solutions. | |
The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 28, 2013 and December 29, 2012, the Company has no accruals for interest or penalties related to income tax matters. The Company does not have any uncertain tax positions at December 28, 2013 or December 29, 2012 which required accrual or disclosure. | |
Income tax effects related to share-based compensation that are in excess, or less than, of grant-date fair value, less any proceeds received on exercise of stock prices, are recognized as either an increase or decrease to additional paid-in capital upon exercise. These tax effects are either offset against currently payable taxes or the tax benefit of net operating loss utilization. | |
(2)(i) Net Income (Loss) Per Common Share | |
Basic net income (loss) per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by dividing net income (loss) by the sum of the weighted average number of common shares plus additional common shares that would have been outstanding if potential dilutive common shares had been issued for granted stock option and stock purchase rights. Common stock equivalents are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive. | |
(2)(j) Comprehensive Income | |
The Company has no items of comprehensive income, and therefore net income is equal to comprehensive income. | |
(2)(k) Recent Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11 Income Taxes (Topic 740) - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists that provides guidance on whether an uncertain tax position should be presented as a reduction to a deferred tax asset or as a reduction to a deferred tax asset or as a separate liability. This guidance seeks to address diversity in practice. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company does not expect the adoption of this ASU amendment to have any affect on the financial condition, results of operations or cash flows. | |
(2)(l) Use of Estimates in the Preparation of Financial Statements | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 amounts of revenues and expenses recorded during the reporting period. Such estimates are adjusted by management periodically as a result of existing or anticipated economic changes which effect, or may effect, the Company’s financial statements. Actual results could differ from these estimates. | |
(2)(m) Fiscal Year-End | |
The Company’s fiscal year end is the last Saturday in December which could result in a 52 or 53 week year. Fiscal year 2013 and 2012 consisted of 52 weeks, 2011 consisted of 53 weeks. | |
(2)(n) Share-Based Payments | |
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized over the period during which an employee is required to provide services in exchange for the award, the requisite service period (usually the vesting period). The Company provides an estimate of forfeitures at initial grant date, and this estimated forfeiture rate is adjusted periodically based on actual forfeiture experience. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. | |
(2)(o) Segment Reporting | |
The Company views its operations and manages its business as one segment. The Company produces and sells advanced material solutions, primarily metal matrix composites, to assemblers of high density electronics and other specialty components and subassemblies. The Company also assembles housings and packages for hybrid circuits, selling to the same customers mentioned above. These customers represent a single market or segment with similar stringent and well-defined requirements. The Company’s customers, in turn, sell the components and subassemblies which incorporate the products into many different end markets, however, these end markets are two to three levels removed from the Company. The Company makes operating decisions and assesses financial performance only for the Company as a whole and does not make operating decisions or assess financial performance by the end markets which ultimately use the products. | |
The Cooperative Agreement the Company entered into with the Army Research Laboratory in 2008 uses the same equipment and personnel as does the Company’s electronics business described above, and at this stage does not represent a separate business segment. | |
(2)(p) Reclassifications | |
Certain amounts 2011 and 2012 have been reclassified to conform with the 2013 financial statement presentation. |
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 28, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
(3) Inventories | |||||||||
As of December 28, 2013 and December 29, 2012 inventories consisted of the following: | |||||||||
2013 | 2012 | ||||||||
Raw materials | $ | 359,535 | $ | 312,213 | |||||
Work in process | 1,135,413 | 1,145,843 | |||||||
Finished goods | 1,079,251 | 1,306,259 | |||||||
Gross Inventory | 2,574,199 | 2,764,315 | |||||||
Reserve for obsolescence | -390,500 | -307,000 | |||||||
Total | $ | 2,183,699 | $ | 2,457,315 | |||||
Leases_and_Commitments
Leases and Commitments | 12 Months Ended | ||||||
Dec. 28, 2013 | |||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||
Leases and Commitments | ' | ||||||
(4) Leases and Commitments | |||||||
Capital Lease Obligations | |||||||
An equipment financing facility with Santander Bank (see note 7), agreed to in May 2013, allowed the Company to finance up to $500 thousand of eligible equipment. As of year-end 2013 the Company had $424 thousand available remaining on the Santander lease line. Equipment financed by the Santander equipment lease qualifies for treatment as a capital lease. | |||||||
At December 28, 2013, the Company had acquired production equipment with a cost of $2.55 million and accumulated amortization of $2.33 million under capital leases. At December 29, 2012, the Company had production equipment with a cost of $2.55 million and accumulated amortization of $2.15 million under capital leases. All capital leases are three year leases with a one dollar buyout. | |||||||
Future payments required under capital lease obligations are as follows at December 28, 2013: | |||||||
Fiscal Year | |||||||
2014 | $ | 78,067 | |||||
Total future minimum lease payments | 78,067 | ||||||
Less amount representing interest | |||||||
at rates ranging between 4.4% and 5.9% | 1,695 | ||||||
Present value of net future lease payments | 76,372 | ||||||
Less current portion | 76,372 | ||||||
Long-term obligation under capital leases | $ | — | |||||
Interest expense was approximately $30 thousand, $29 thousand, and $33 thousand for 2013, 2012, and 2011, respectively. | |||||||
Operating Lease Obligations | |||||||
The Company entered into a 10-year lease for the Norton facilities effective on March 1, 2006. Rental expense for operating leases is recognized on a straight-line basis over the term of the lease and was $129 thousand in each of the years 2013, 2012 and 2011. | |||||||
In February 2011, the Company entered into a lease for an additional 13,800 square feet in Attleboro, MA. The lease term was for one year and included five, one-year options for extensions at a rate of $6,900 per month. In October 2013, the Company renewed the lease for one additional year. In December 2013 the Company agreed with the landlord for two additional, one-year options. As a result, if the Company exercises all of the options, it will be able to use the space through February 2019. | |||||||
Future minimum rental payments over the terms of the lease agreements are approximately as follows: | |||||||
Fiscal year: | |||||||
2014 | 231,000 | ||||||
2015 | 156,900 | ||||||
2016 | 37,500 | ||||||
$ | 425,400 | ||||||
ShareBased_Compensation_Plans
Share-Based Compensation Plans | 12 Months Ended | ||||||||||||||
Dec. 28, 2013 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||
Share-Based Compensation Plans | ' | ||||||||||||||
5) Share-Based Compensation Plans | |||||||||||||||
The Company adopted the 2009 Stock Incentive Plan ("2009 Plan") on December 10, 2009. Under the terms of the 2009 Plan all of the Company’s employees, officers, directors, consultants and advisors are eligible to be granted options, restricted stock awards, or other stock-based awards. All outstanding options are nonstatutory stock options exercisable at the fair market value of the stock on the date of grant, and expire ten years from the date of grant. The options granted to employees generally vest in equal annual installments over a five-year period. The options granted to directors generally vest one year from date of grant. | |||||||||||||||
Under the 2009 Plan a total of 1,500,000 shares of common stock are available for issuance, of which 356,895 shares remain available for grant as of December 28, 2013. | |||||||||||||||
As of December 28, 2013, the 2009 Plan is the only stock option plan from which awards can be made as all other option plans have expired. The 1999 Stock Option Plan (“1999 Plan”) expired on January 22, 2009 and no additional options can be granted from the plan. As of December 28, 2013 there are 238,250 options outstanding under the 1999 Plan. | |||||||||||||||
A summary of stock option activity for all the above plans as of December 28, 2013 and changes during the year then ended is presented below: | |||||||||||||||
Weighted | Weighted | ||||||||||||||
Average | Remaining | Aggregate | |||||||||||||
Exercise | Contractual | Intrinsic | |||||||||||||
Shares | Price | Life (years) | Value | ||||||||||||
Outstanding at | |||||||||||||||
beginning of year | 1,418,155 | $ | 1.25 | ||||||||||||
Granted | 231,000 | $ | 1 | ||||||||||||
Exercised | -250,000 | $ | 0.37 | ||||||||||||
Forfeited | -21,000 | $ | 1.53 | ||||||||||||
Expired | -32,000 | $ | 0.31 | ||||||||||||
Outstanding at | |||||||||||||||
end of year | 1,346,155 | $ | 1.39 | 7.16 | $ | 1,401,461 | |||||||||
Options exercisable | |||||||||||||||
at year-end | 799,113 | $ | 1.38 | 6.6 | $ | 803,570 | |||||||||
The total intrinsic value of options exercised during fiscal years 2013, 2012 and 2011 was $310,170, $28,835 and $321,842, respectively. As of December 28, 2013, there was $480,409 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans; that cost is expected to be recognized over a weighted average period of 1.8 years. | |||||||||||||||
Cash received from option exercises under all share-based payment arrangements was $93,360, $9,333 and $99,533, for the years ended December 28, 2013, December 29, 2012 and December 31, 2011, respectively. | |||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following table presents the annualized weighted average values of the significant assumptions used to estimate the fair values of the options granted during 2013 and 2011: | |||||||||||||||
2013 | 2011 | ||||||||||||||
Risk-free interest rate | 1.62% | 2.45% | |||||||||||||
Expected life in years | 9 | 9 | |||||||||||||
Expected volatility | 53% | 82% | |||||||||||||
Expected dividend yield | 0 | 0 | |||||||||||||
Weighted average fair value of grants | $ | 0.6 | $ | 1.6 | |||||||||||
All options are granted with an exercise price equal to the fair market value of the underlying common stock on the date of grant. There were no options granted in 2012. | |||||||||||||||
The Company recognized $248,535, $242,793 and $210,125 as compensation expense related to total stock options outstanding in 2013, 2012 and 2011, respectively. The expense in 2012 included $20,500 associated with extending the option exercise period for five individuals terminated during the year. Their options were extended to the lesser of four years or the original expiration date of the option. | |||||||||||||||
A tax benefit of $117,401, $0 and $126,049 was recognized as additional paid in capital in the years ended December 28, 2013, December 29, 2012 and December 31, 2011, respectively, resulting from the excess tax benefit of share-based awards over the cumulative compensation expense recognized for financial reporting. |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Dec. 28, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
(6) Accrued Expenses | |||||||||
Accrued expenses at December 28, 2013 and December 29, 2012 consist of the following: | |||||||||
2013 | 2012 | ||||||||
Accrued legal and | |||||||||
accounting | $ | 92,000 | $ | 92,000 | |||||
Accrued payroll and related | 823,196 | 388,029 | |||||||
Accrued other | 158,116 | 457,558 | |||||||
Accrued income tax payable | 33,501 | 456 | |||||||
$ | 1,106,813 | $ | 938,043 | ||||||
The accrued payroll and related at December 28, 2013 includes $200 thousand for 401k company match and $305 thousand for incentive bonuses. These totaled $0 and $130 thousand respectively, on December 29, 2012. |
Revolving_Line_of_Credit_and_L
Revolving Line of Credit and Lease Line | 12 Months Ended |
Dec. 28, 2013 | |
Debt Disclosure [Abstract] | ' |
Revolving Line of Credit and Lease Line | ' |
(7) Revolving Line of Credit and Lease Line | |
In early May 2013, the Company renewed its $2 million revolving line of credit (“LOC”) and $500 thousand of an equipment finance facility (“Lease Line”) with Santander Bank. Both agreements mature in May 2014. The LOC is secured by the accounts receivable and other assets of the Company, has an interest rate of prime (3.25% at December 28, 2013) plus one percent (1%) and a one-year term. The LOC and the Lease Line are cross defaulted and cross collateralized. The Company is also subject to certain financial covenants within the terms of the line of credit that require the Company to maintain a targeted coverage ratio as well as targeted debt to equity and current ratios. At December 28, 2013, the Company was in compliance with existing covenants. | |
At December 28, 2013, the Company had $76 thousand of capital equipment financed by capital lease obligations under the Lease Line (see note 4) and $424 thousand available remaining. Equipment financed by the Santander equipment lease qualifies for treatment as a capital lease once converted from the Lease Line to a lease. | |
At December 28, 2013 the Company had no borrowings under this LOC while its borrowing base at the time would have permitted borrowings of $1.4 million. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 28, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
(8) Income Taxes | |||||||||||||
Components of income tax expense (benefit) for each year are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current | |||||||||||||
Federal | $ | 33,777 | $ | — | $ | 95,217 | |||||||
State | 456 | 456 | -37,445 | ||||||||||
Current income tax provision: | 34,233 | 456 | 57,772 | ||||||||||
Deferred: | |||||||||||||
United States: | |||||||||||||
Federal | 379,574 | -1,165,700 | -274,962 | ||||||||||
State | 48,900 | -140,456 | -105,576 | ||||||||||
Deferred income tax provision (benefit), net | 428,474 | -1,306,156 | -380,538 | ||||||||||
Total | $ | 462,707 | $ | -1,305,700 | $ | -322,766 | |||||||
Deferred tax assets as of December 28, 2013 and December 29, 2012 are as follows: | |||||||||||||
28-Dec-13 | 29-Dec-12 | ||||||||||||
Deferred Tax Assets: | |||||||||||||
Net operating loss | |||||||||||||
carryforwards | $ | 734,000 | $ | 1,227,000 | |||||||||
Stock compensation | 343,000 | 250,000 | |||||||||||
Credit carryforwards | 859,000 | 665,000 | |||||||||||
Inventory | 319,000 | 328,000 | |||||||||||
Accrued liabilities | 39,000 | 23,000 | |||||||||||
Depreciation | 177,000 | 289,000 | |||||||||||
Other | 5,000 | 5,000 | |||||||||||
Gross deferred tax assets | 2,476,000 | 2,787,000 | |||||||||||
Valuation allowance | — | — | |||||||||||
Net deferred tax assets | $ | 2,476,000 | $ | 2,787,000 | |||||||||
At December 28, 2013 and December 29, 2012, the Company had net operating loss carryforwards of approximately $1,710,000 and $3,303,000 respectively available to offset future income for U.S. Federal income tax purposes. These operating loss carryforwards expire in varying amounts through 2032. | |||||||||||||
During 2013, the Company utilized approximately $1,300,000 of net operating loss carryforwards. | |||||||||||||
A valuation allowance is required to be established or maintained when it is "more likely than not" that all or a portion of deferred tax assets will not be realized. The Company believes that it will generate sufficient future taxable income to realize the tax benefits related to the remaining deferred tax assets. | |||||||||||||
A summary of the change in the deferred tax asset is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at beginning of year | $ | 2,786,973 | $ | 1,480,817 | $ | 1,100,279 | |||||||
Deferred tax (expense) benefit | -311,071 | 1,306,156 | 380,538 | ||||||||||
Balance at end of year | $ | 2,475,902 | $ | 2,786,973 | $ | 1,480,817 | |||||||
Income tax (benefit) expense is different from the amounts computed by applying the U.S. federal statutory income tax rate of 34 percent to pretax income as a result of the following: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Tax at statutory rate | $ | 486,000 | $ | -961,000 | $ | -125,000 | |||||||
State tax, net | |||||||||||||
of federal benefit | 33,000 | -140,000 | -94,000 | ||||||||||
Net operating | |||||||||||||
loss and credit carryforwards | -60,000 | -218,000 | -95,000 | ||||||||||
Other | 4,000 | 13,000 | -9,000 | ||||||||||
Total | $ | 463,000 | $ | -1,306,000 | $ | -323,000 | |||||||
The Company’s income tax filings are subject to review and examination by federal and state taxing authorities. The Company is currently open to audit under the applicable statutes of limitations for the years 2010 through 2013. | |||||||||||||
At December 28, 2013 the Company’s Deferred Tax Asset included net operating loss carryforwards and other temporary differences which will require taxable income of approximately $6.3 million to fully utilize, assuming an effective corporate tax rate of 39%. The Company has concluded that it is more likely than not that its Deferred Tax Asset will be fully realized. |
Retirement_Savings_Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 28, 2013 | |
Postemployment Benefits [Abstract] | ' |
Retirement Savings Plan | ' |
(9) Retirement Savings Plan | |
The Company sponsors a Retirement Savings Plan (the ‘Plan’) under the provisions of Section 401 of the Internal Revenue Code. Employees, as defined in the Plan, are eligible to participate in the Plan after 30 days of employment. Under the terms of the Plan, the Company may match employee contributions under such method as described in the Plan and as determined each year by the Board of Directors. During 2013 and 2012 the Company did not offer a 401k match. During the year 2011 the Company matched dollar for dollar up to a maximum of 4% of employee contributions. The Company recognized $200,000, $0 and $267,760 expense, in 2013, 2012 and 2011, respectively. |
Concentrations_of_Credit_Risk_
Concentrations of Credit Risk, Significant Customers and Geographic Information | 12 Months Ended | ||||||||||||
Dec. 28, 2013 | |||||||||||||
Risks and Uncertainties [Abstract] | ' | ||||||||||||
Concentrations of Credit Risk, Significant Customers and Geographic Information | ' | ||||||||||||
(10) Concentrations of Credit Risk, Significant Customers and Geographic Information | |||||||||||||
Financial instruments which subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company maintains such cash deposits in a high credit quality financial institution. | |||||||||||||
The Company extends credit to customers who consist principally of microelectronics systems companies in the United States, Europe and Asia. The Company generally does not require collateral or other security as a condition of sale rather relying on credit approval, balance limitation and monitoring procedures to control credit risk of trade accounts receivable. Management conducts on-going credit evaluations of its customers, and historically the Company has not experienced any significant credit-related losses with respect to its trade accounts receivable. | |||||||||||||
Revenues from significant customers as a percentage of total revenues in 2013, 2012 and 2011 were as follows: | |||||||||||||
Percent of Total Revenues | |||||||||||||
Significant Customer | 2013 | 2012 | 2011 | ||||||||||
A | 42 | % | 38 | % | 42 | % | |||||||
B | 23 | % | 17 | % | 15 | % | |||||||
C | 8 | % | 8 | % | 14 | % | |||||||
As of December 28, 2013, the Company had trade accounts receivable due from these three customers that accounted for 82% of total trade accounts receivable as of that date. Management believes that any credit risks have been properly provided for in the accompanying financial statements. | |||||||||||||
The Company’s revenue was derived from the following countries in 2013, 2012, and 2011: | |||||||||||||
Percent of Total Revenues | |||||||||||||
Country | 2013 | 2012 | 2011 | ||||||||||
United States of America | 16 | % | 21 | % | 41 | % | |||||||
Germany | 65 | % | 58 | % | 52 | % | |||||||
Other | 19 | % | 21 | % | 7 | % | |||||||
Many of the Company’s customers based in the United States conduct design, purchasing and payable functions in the United States, but manufacture overseas. Revenue generated from shipments made to customers’ locations outside the United States accounted for 84%, 79% and 59% of total revenue in 2013, 2012 and 2011, respectively. | |||||||||||||
All of the Company’s long-lived assets and operations are located in the United States. |
Net_Income_loss_Per_Share
Net Income (loss) Per Share | 12 Months Ended | ||||||||||||
Dec. 28, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Net Income (loss) Per Share | ' | ||||||||||||
(11) Net Income (Loss) Per Share | |||||||||||||
The following reconciles the basic and diluted net income per share calculations. | |||||||||||||
For the years ended | |||||||||||||
Dec. 28, | Dec. 29, | Dec. 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic Computation: | |||||||||||||
Numerator: | |||||||||||||
Net income (loss) | $966,455 | ($1,522,028) | ($45,735) | ||||||||||
Denominator: | |||||||||||||
Weighted average | |||||||||||||
common shares | |||||||||||||
outstanding | 12,985,107 | 12,869,618 | 12,765,774 | ||||||||||
Basic net income (loss) per share | $0.07 | ($0.12) | $0.00 | ||||||||||
Diluted Computation: | |||||||||||||
Numerator: | |||||||||||||
Net income (loss) | $966,455 | ($1,522,028) | ($45,735) | ||||||||||
Denominator: | |||||||||||||
Weighted average | |||||||||||||
common shares | |||||||||||||
outstanding | 12,985,107 | 12,869,618 | 12,765,774 | ||||||||||
Stock options | 280,379 | — | — | ||||||||||
Total shares | 13,265,486 | 12,869,618 | 12,765,744 | ||||||||||
Diluted net income (loss) per share | $0.07 | ($0.12) | $0.00 | ||||||||||
Inventories_Policies
Inventories (Policies) (USD $) | Dec. 28, 2013 | Dec. 29, 2012 |
Inventories, net | ' | ' |
Raw Materials | $359,535 | $312,213 |
Work in process | 1,135,413 | 1,145,843 |
Finished Goods | 1,079,251 | 1,306,259 |
Gross Inventory | 2,574,199 | 2,764,315 |
Reserve for obsolescence | 390,500 | 307,000 |
Total | $2,183,699 | $2,457,315 |
Leases_and_Commitments_Policie
Leases and Commitments (Policies) (USD $) | Dec. 28, 2013 | Dec. 29, 2012 |
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
2014 | $78,067 | ' |
Total future minimum lease payments | 78,067 | ' |
Less amount representing interest at rates ranging between 4.4% and 5.9% | 1,695 | ' |
Present value of net future lease payments | 76,372 | ' |
less current portion | 76,372 | 123,366 |
Long-term obligation under capital leases | $0 | $76,372 |
Accrued_Expenses_Policies
Accrued Expenses (Policies) (USD $) | Dec. 28, 2013 | Dec. 29, 2012 |
Payables and Accruals [Abstract] | ' | ' |
Accrued legal and accounting | $92,000 | $92,000 |
Accrued payroll and related | 823,196 | 388,029 |
Accrued other | 158,116 | 457,558 |
Accrued income tax payable | 33,501 | 456 |
Total accrued expenses | $1,106,813 | $938,043 |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 28, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories consisted of the followowing: | ' | ||||||||
2013 | 2012 | ||||||||
Raw materials | $ | 359,535 | $ | 312,213 | |||||
Work in process | 1,135,413 | 1,145,843 | |||||||
Finished goods | 1,079,251 | 1,306,259 | |||||||
Gross Inventory | 2,574,199 | 2,764,315 | |||||||
Reserve for obsolescence | -390,500 | -307,000 | |||||||
Total | $ | 2,183,699 | $ | 2,457,315 | |||||
Leases_and_Commitments_Tables
Leases and Commitments (Tables) | 12 Months Ended | ||||||
Dec. 28, 2013 | |||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||
Capital lease obligations | ' | ||||||
Fiscal Year | |||||||
2014 | $ | 78,067 | |||||
Total future minimum lease payments | 78,067 | ||||||
Less amount representing interest | |||||||
at rates ranging between 4.4% and 5.9% | 1,695 | ||||||
Present value of net future lease payments | 76,372 | ||||||
Less current portion | 76,372 | ||||||
Long-term obligation under capital leases | $ | — | |||||
Operating lease obligations | ' | ||||||
Fiscal year: | |||||||
2014 | 231,000 | ||||||
2015 | 156,900 | ||||||
2016 | 37,500 | ||||||
$ | 425,400 |
ShareBased_Compensation_Plans_
Share-Based Compensation Plans (Tables) | 12 Months Ended | ||||||||||||||
Dec. 28, 2013 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||
Summary of stock option activity | ' | ||||||||||||||
Weighted | Weighted | ||||||||||||||
Average | Remaining | Aggregate | |||||||||||||
Exercise | Contractual | Intrinsic | |||||||||||||
Shares | Price | Life (years) | Value | ||||||||||||
Outstanding at | |||||||||||||||
beginning of year | 1,418,155 | $ | 1.25 | ||||||||||||
Granted | 231,000 | $ | 1 | ||||||||||||
Exercised | -250,000 | $ | 0.37 | ||||||||||||
Forfeited | -21,000 | $ | 1.53 | ||||||||||||
Expired | -32,000 | $ | 0.31 | ||||||||||||
Outstanding at | |||||||||||||||
end of year | 1,346,155 | $ | 1.39 | 7.16 | $ | 1,401,461 | |||||||||
Options exercisable | |||||||||||||||
at year-end | 799,113 | $ | 1.38 | 6.6 | $ | 803,570 | |||||||||
Annualized weighted average values of the significant assumptions used yo estimate the fair values of the options granted during 2013 and 2011 | ' | ||||||||||||||
2013 | 2011 | ||||||||||||||
Risk-free interest rate | 1.62% | 2.45% | |||||||||||||
Expected life in years | 9 | 9 | |||||||||||||
Expected volatility | 53% | 82% | |||||||||||||
Expected dividend yield | 0 | 0 | |||||||||||||
Weighted average fair value of grants | $ | 0.6 | $ | 1.6 |
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Dec. 28, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
2013 | 2012 | ||||||||
Accrued legal and | |||||||||
accounting | $ | 92,000 | $ | 92,000 | |||||
Accrued payroll and related | 823,196 | 388,029 | |||||||
Accrued other | 158,116 | 457,558 | |||||||
Accrued income tax payable | 33,501 | 456 | |||||||
$ | 1,106,813 | $ | 938,043 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 28, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Components of income tax expense (benefit) | ' | ||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current | |||||||||||||
Federal | $ | 33,777 | $ | — | $ | 95,217 | |||||||
State | 456 | 456 | -37,445 | ||||||||||
Current income tax provision: | 34,233 | 456 | 57,772 | ||||||||||
Deferred: | |||||||||||||
United States: | |||||||||||||
Federal | 379,574 | -1,165,700 | -274,962 | ||||||||||
State | 48,900 | -140,456 | -105,576 | ||||||||||
Deferred income tax provision (benefit), net | 428,474 | -1,306,156 | -380,538 | ||||||||||
Total | $ | 462,707 | $ | -1,305,700 | $ | -322,766 | |||||||
Net_Income_loss_Per_Share_Tabl
Net Income (loss) Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 28, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Basic and Diluted net income per share calculations | ' | ||||||||||||
For the years ended | |||||||||||||
Dec. 28, | Dec. 29, | Dec. 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic Computation: | |||||||||||||
Numerator: | |||||||||||||
Net income (loss) | $966,455 | ($1,522,028) | ($45,735) | ||||||||||
Denominator: | |||||||||||||
Weighted average | |||||||||||||
common shares | |||||||||||||
outstanding | 12,985,107 | 12,869,618 | 12,765,774 | ||||||||||
Basic net income (loss) per share | $0.07 | ($0.12) | $0.00 | ||||||||||
Diluted Computation: | |||||||||||||
Numerator: | |||||||||||||
Net income (loss) | $966,455 | ($1,522,028) | ($45,735) | ||||||||||
Denominator: | |||||||||||||
Weighted average | |||||||||||||
common shares | |||||||||||||
outstanding | 12,985,107 | 12,869,618 | 12,765,774 | ||||||||||
Stock options | 280,379 | — | — | ||||||||||
Total shares | 13,265,486 | 12,869,618 | 12,765,744 | ||||||||||
Diluted net income (loss) per share | $0.07 | ($0.12) | $0.00 |
ShareBased_Compensation_Plans_1
Share-Based Compensation Plans - Summary of stock option activity (Details) (USD $) | 12 Months Ended |
Dec. 28, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Outstanding at beginning of year, shares | $1,418,155 |
Outstanding at beginning of year, weighted average exercise price per share | 1.25 |
Granted, shares | 231,000 |
Granted, price per share | 1 |
Shares exercised | -250,000 |
Weighted average exercise price, per share | $0.37 |
Shares forfeited | -21,000 |
Weighted average exercise price, per share | $1.53 |
Shares expired | -32,000 |
Weighted average exercise price, per share | $0.31 |
Outstanding at end of year, shares | 1,346,155 |
Outstanding at end of year, weighted average price per share | $1.39 |
Outstanding at end of year, weighted remaining contractual life (years) | '7 years 1 month 28 days |
Outstanding at end of year, aggregate intrinsic value | 1,401,461 |
Options exercisable at year-end, shares | 799,113 |
Options exercisable at year-end, weighted average exercise price per share | $1.38 |
Options exercisable at year-end weighted remaining contractual life (years) | '6 years 21 days |
Options exercisable at year-end, aggregate intrinsic value | $803,570 |
ShareBased_Compensation_Plans_2
Share-Based Compensation Plans - Annualized weighted average values of the significant assumptions used yo estimate the fair values of the options granted during 2013 and 2011 (Details) (USD $) | 12 Months Ended | |
Dec. 28, 2013 | Dec. 29, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' |
Risk-free interest rate | 1.62% | 2.45% |
Expected life in years | '9 years | '9 years |
Expected volatility | 53.00% | 82.00% |
Expected dividend yield | $0 | $0 |
Weighted average fair value of grants | 0.6 | 1.6 |