CPS Technologies (CPSH) 10-Q 11 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	3 Months Ended
	Mar. 28, 2015	Apr. 23, 2015
Document And Entity Information
Entity Registrant Name	CPS Technologies Corp/DE/
Entity Central Index Key	814676
Document Type	10-Q
Document Period End Date	28-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-14
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		$18,000,000
Entity Common Stock, Shares Outstanding		13,165,019
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

Balance_Sheets_Unaudited

Balance Sheets (Unaudited) (USD $)	Mar. 28, 2015	Dec. 27, 2014
Current assets:
Cash and cash equivalents	$2,171,974	$2,305,580
Accounts receivable-trade, net	4,084,110	3,589,191
Inventories, net	2,533,671	2,528,954
Prepaid expenses and other current assets	205,394	166,783
Deferred taxes	666,448	682,968
Total current assets	9,661,597	9,273,476
Property and equipment:
Production equipment	8,179,447	8,085,095
Furniture and office equipment	404,856	404,856
Leasehold improvements	832,410	759,819
Total cost	9,416,713	9,249,770
Accumulated depreciation and amortization	-8,189,591	-8,047,561
Construction in progress	485,986	555,334
Net property and equipment	1,713,108	1,757,543
Deferred taxes, non-current portion	1,606,777	1,617,497
Total Assets	12,981,482	12,648,516
Current liabilities:
Accounts payable	1,686,928	1,352,418
Accrued expenses	886,237	1,049,616
Total current liabilities	2,573,165	2,402,034
Stockholders equity:
Common stock, $0.01 par value, authorized 20,000,000 and 15,000,000 shares; issued 13,334,792 and 13,293,092 shares; outstanding 13,165,019 and 13,144,489 shares; at March 28, 2015 and December 27, 2014, respectively	133,348	132,931
Additional paid-in capital	34,913,344	34,763,698
Accumulated deficit	-24,241,777	-24,315,564
Less cost of 169,773 and 148,603 common shares repurchased at March 28, 2015 and December 27, 2014, respectively	-396,598	-334,583
Total stockholders equity	10,408,317	10,246,482
Total liabilities and stockholders equity	$12,981,482	$12,648,516

Balance_Sheets_Parenthetical

Balance Sheets (Parenthetical) (USD $)	Mar. 28, 2015	Dec. 27, 2014
Statement of Financial Position [Abstract]
Common Stock, authorized	20,000,000	15,000,000
Common Stock, issued shares	13,334,792	13,293,092
Common Stock, outstanding shares	13,165,019	13,144,489
Common Stock, par value	$0.01	$0.01

Statements_of_Operations_Unaud

Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Mar. 28, 2015	Mar. 29, 2014
Income Statement [Abstract]
Product sales	$5,248,012	$5,952,080
Research and development under cooperative agreement	42,254	33,971
Total revenues	5,290,266	5,986,051
Cost of product sales	4,119,931	4,419,360
Cost of research and development under cooperative agreement	34,970	28,322
Gross Margin	1,135,365	1,538,369
Selling, general, and administrative expense	1,012,838	1,125,788
Income from operations	122,527	412,581
Interest expense, net		-962
Income before taxes	122,527	411,619
Income tax provision	48,740	164,000
Net income	$73,787	$247,619
Net income per basic common share	$0.01	$0.02
Weighted average number of basic common shares outstanding	13,147,672	13,069,577
Net income per diluted common share	$0.01	$0.02
Weighted average number of diluted common shares outstanding	13,731,364	13,696,583

Statements_of_Cash_Flows_Unaud

Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 28, 2015	Mar. 29, 2014
Cash flows from operating activities:
Net income	$73,787	$247,619
Depreciation and amortization	142,030	150,547
Share-based compensation	66,347	72,448
Deferred taxes	48,740	164,000
Excess tax benefit from stock options exercised	-21,500	-17,286
Changes in:
Accounts receivable-trade	-494,919	-1,589,931
Inventories	-4,717	-25,283
Prepaid expenses and other current assets	-38,611	19,665
Accounts payable	334,510	410,324
Accrued expenses	-163,379	-40,600
Net cash used in operating activities	-57,712	-608,497
Cash flows from investing activities:
Purchases of property and equipment	-97,595	-106,806
Net cash used in investing activities	-97,595	-106,806
Cash flows from financing activities:
Payment of capital lease obligations		-20,524
Excess tax benefit from stock options exercised	21,500	17,286
Proceeds from issuance of common stock	62,216	48,297
Repurchase of common stock	-62,015	-44,091
Net cash provided by financing activities	21,701	968
Net decrease in cash and cash equivalents	-133,606	-714,335
Cash and cash equivalents at beginning of period	2,305,580	1,571,054
Cash and cash equivalents at end of period	2,171,974	856,719
Supplemental cash flow information:
Cash paid for taxes, net of refunds		27,456
Interest paid		$962

1_Nature_of_Business

(1) Nature of Business	3 Months Ended
	Mar. 28, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
(1) Nature of Business	(1)  Nature of Business
	CPS Technologies Corporation (the “Company” or “CPS”) provides advanced material solutions to the electronics, power generation, 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.

2_Interim_Financial_Statements

(2) Interim Financial Statements	3 Months Ended
	Mar. 28, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
(2) Interim Financial Statements	(2)  Interim Financial Statements
	As permitted by the rules of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles.
	The accompanying financial statements are unaudited.  In the opinion of management, the unaudited financial statements of CPS reflect all normal recurring adjustments which are necessary to present fairly the financial position and results of operations for such periods.
	The Company’s balance sheet at December 27, 2014 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
	For further information, refer to the financial statements and footnotes thereto included in the Registrant’s Annual Report on Form 10-K for the year ended December 27, 2014.
	The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

3_Net_Income_Per_Common_and_Co

(3) Net Income Per Common and Common Equivalent	3 Months Ended
	Mar. 28, 2015
Earnings Per Share [Abstract]
(3) Net Income Per Common and Common Equivalent	(3)  Net Income Per Common and Common Equivalent Share
	Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period.  Diluted net income per common share is calculated by dividing net income 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 options 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.
	The following table presents the calculation of both basic and diluted earnings per share (“EPS”):
		For periods ended
			March 28,		March 29,
			2015		2014
	Basic EPS Computation:
	Numerator:
	Net income	$	73,787	$	247,619
	Denominator:
	Weighted average
	common shares
	Outstanding		13,147,672		13,069,577
	Basic EPS	$	0.01	$	0.02
	Diluted EPS Computation:
	Numerator:
	Net income	$	73,787	$	247,619
	Denominator:
	Weighted average
	common shares
	Outstanding		13,147,672		13,069,577
	stock options		583,692		627,006
	Total Shares		13,731,364		13,696,583
	Diluted EPS	$	0.01	$	0.02

4_ShareBased_Payments

(4) Share-Based Payments	3 Months Ended
	Mar. 28, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
(4) Share-Based Payments	(4)  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. Reductions in compensation expense associated with the forfeited options are estimated at the date of grant, 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 the stock options granted.
	During the quarters ended March 28, 2015 and March 29, 2014, a total of 123,500 and 108,500 stock options, respectively  were granted to employees under the Company’s 2009 Stock Incentive Plan (the “Plan) and a total of 45,000 and 30,000 stock options were granted to outside directors, respectively.
	During the quarters ended March 28, 2015 and March 29, 2014 the Company issued 41,700 and 32,900 shares, respectively as a result of employee option exercises. During the quarters ended March 28, 2015 and March 29, 2014 there were no expired stock options.
	During the quarters ended March 28, 2015 and March 29, 2014 the Company repurchased 21,170 and 14,964 shares, respectively from employees to facilitate their exercise of stock options.
	As of March 28, 2015, there was $623 thousand 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 2.88 years.
	During the quarters ended March 28, 2015 and March 29, 2014, the Company recognized $66,347 and $72,448, respectively as shared-based compensation expense related to previously granted shares under the Plan.

5_Inventories

(5) Inventories	3 Months Ended
	Mar. 28, 2015
Inventory Disclosure [Abstract]
(5) Inventories	(5)        Inventories
	Inventories consist of the following:
			March  28,		December 27,
			2015		2014
	Raw materials	$	575,444	$	464,243
	Work in process		1,141,234		998,209
	Finished goods		1,217,493		1,467,002
	Gross inventory		2,934,171		2,929,454
	Reserve for obsolescence		-400,500		-400,500
	Inventories, net	$	2,533,671	$	2,528,954

6_Accrued_Expenses

(6) Accrued Expenses	3 Months Ended
	Mar. 28, 2015
Payables and Accruals [Abstract]
(6) Accrued Expenses	(6)        Accrued Expenses
	Accrued expenses consist of the following:
			March 28,		December 27,
			2015		2014
	Accrued legal and accounting	$	69,807	$	83,307
	Accrued payroll and related		580,055		749,019
	Accrued other		220,849		201,956
	Accrued income taxes		15,526		15,334
	Total accrued expenses	$	886,237	$	1,049,616
	The accrued payroll and related at March 28, 2015 and December 27, 2014 includes $35 thousand  and $110 thousand, respectively for 401k company match and $55 thousand and $313 thousand, respectively for incentive bonuses.

7_Line_of_Credit_and_Equipment

(7) Line of Credit and Equipment Lease Facility Agreements	3 Months Ended
	Mar. 28, 2015
Debt Disclosure [Abstract]
(7) Line of Credit and Equipment Lease Facility Agreements	(7)        Line of Credit and Equipment Lease Facility Agreements
	In early May 2014, 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 2015.  The LOC is secured by the accounts receivable and other assets of the Company, has an interest rate of prime plus one half of percent (.05%) 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 debt to equity and current ratio. At March 28, 2015, the Company was in compliance with existing covenants.
	At March 28, 2015, the Company had no borrowing under its Lease Line.  In addition at March 28, 2015 the Company had no borrowings under the LOC while its borrowing base at the time would have permitted borrowings up to the full $2 million of the LOC.

8_Income_Taxes

(8) Income Taxes	3 Months Ended
	Mar. 28, 2015
Income Tax Disclosure [Abstract]
(8) Income Taxes	(8)        Income Taxes
	At December 27, 2014, the Company had approximately $750,000 of net operating loss carryforwards available to offset future income for U.S. Federal income tax purpose.
	The Company recorded a tax expense of $38,020 for federal income taxes and $10,720 for state income taxes during the quarter ended March 28, 2015.
	The Company has a current and non-current deferred tax asset aggregating $2,273,225 and $2,300,465 on the Company’s balance sheet at March 28, 2015 and December 27, 2014, respectively.  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 and as such no valuation allowance has been provided against the deferred tax asset.

9_Commitment

(9) Commitment	3 Months Ended
	Mar. 28, 2015
Commitments and Contingencies Disclosure [Abstract]
(9) Commitment	9)        Commitment
	The Company entered into a 10-year lease for the Norton facilities effective on March 1, 2006. The leased facilities comprise approximately 38 thousand square feet. In January 2015 this lease was amended to extended the lease to February 28, 2017.  In addition in this amendment the Company obtained two, one-year options which, if fully exercised, would enable it to continue to lease through February 28, 2019. The lease is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities.  The Company also has an option to buy the property and a first right of refusal during the term of the lease.  Annual rental payments are $100 thousand in year one increasing to $152 thousand at the end of the extended term.
	In February 2011, the Company entered into a lease for an additional 13.8 thousand square feet in Attleboro, MA. The lease term is for one year and has an option to extend the lease for five additional one-year periods. Monthly rent, which includes utilities, is $6,900. The Company renewed the lease in 2013 for one additional year and also obtained two years of additional options which could extend the Company use through February 2019.  In October 2014, the Company exercised its option to extend the lease through the end of February 2016.

10_Subsequesnt_Events

(10) Subsequesnt Events	3 Months Ended
	Mar. 28, 2015
Subsequent Events [Abstract]
(10) Subsequesnt Events	(10)       Subsequent Events
	In April 2015, the Company renewed its $2 million revolving line of credit (“LOC”) and $500 thousand of an equipment finance facility (“Lease Line”) with Santander Bank.

3_Net_Income_Per_Common_and_Co1

(3) Net Income Per Common and Common Equivalent (Tables)	3 Months Ended
	Mar. 28, 2015
Earnings Per Share [Abstract]
Basic and Diluted Earnings Per Share		For periods ended
			March 28,		March 29,
			2015		2014
	Basic EPS Computation:
	Numerator:
	Net income	$	73,787	$	247,619
	Denominator:
	Weighted average
	common shares
	Outstanding		13,147,672		13,069,577
	Basic EPS	$	0.01	$	0.02
	Diluted EPS Computation:
	Numerator:
	Net income	$	73,787	$	247,619
	Denominator:
	Weighted average
	common shares
	Outstanding		13,147,672		13,069,577
	stock options		583,692		627,006
	Total Shares		13,731,364		13,696,583
	Diluted EPS	$	0.01	$	0.02

5_Inventories_Tables

(5) Inventories (Tables)	3 Months Ended
	Mar. 28, 2015
Inventory Disclosure [Abstract]
Inventories			March  28,		December 27,
			2015		2014
	Raw materials	$	575,444	$	464,243
	Work in process		1,141,234		998,209
	Finished goods		1,217,493		1,467,002
	Gross inventory		2,934,171		2,929,454
	Reserve for obsolescence		-400,500		-400,500
	Inventories, net	$	2,533,671	$	2,528,954

6_Accrued_Expenses_Tables

(6) Accrued Expenses (Tables)	3 Months Ended
	Mar. 28, 2015
Payables and Accruals [Abstract]
Accrued expenses			March 28,		December 27,
			2015		2014
	Accrued legal and accounting	$	69,807	$	83,307
	Accrued payroll and related		580,055		749,019
	Accrued other		220,849		201,956
	Accrued income taxes		15,526		15,334
	Total accrued expenses	$	886,237	$	1,049,616

3_Net_Income_Per_Common_and_Co2

(3) Net Income Per Common and Common Equivalent - Basic and Diluted Earnings Per Share (Details) (USD $)	3 Months Ended
	Mar. 28, 2015	Mar. 29, 2014
Earnings Per Share [Abstract]
Net income	$73,787	$247,619
Weighted average common shares Outstanding	13,147,672	13,069,577
Basic EPS	$0.01	$0.02
Diluted EPS Computation:
Net income	73,787	247,619
Weighted average common shares Outstanding	13,147,672	13,069,577
Dilutive effect of stock options	$583,692	$627,006
Total Shares	13,731,364	13,696,583
Diluted EPS	$0.01	$0.02

4_ShareBased_Payments_Details_

(4) Share-Based Payments (Details Narrative) (USD $)	3 Months Ended
	Mar. 28, 2015	Mar. 29, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Option grants to employees	123,500	108,500
Options grants to outside directors	45,000	30,000
Shares of Common Stock issued from option exercises	41,700	32,900
Shares repurchased from employees to facilitate option exercise	21,170	14,964
Unrecognized compensation cost (thousands)	$623
Share-based compensation expense	$66,347	$72,448

5_Inventories_Inventories_Deta

(5) Inventories - Inventories (Details) (USD $)	Mar. 28, 2015	Dec. 27, 2014	Mar. 29, 2014
Inventory Disclosure [Abstract]
Raw materials	$575,444		$464,243
Work in process	1,141,234		998,209
Finished goods	1,217,493		1,467,002
Gross inventory	2,934,171		2,929,454
Reserve for obsolescence	-400,500		-400,500
Inventories, net	$2,533,671	$2,528,954	$2,528,954

6_Accrued_Expenses_Accrued_exp

(6) Accrued Expenses - Accrued expenses (Details) (USD $)	Mar. 28, 2015	Dec. 27, 2014
Payables and Accruals [Abstract]
Accrued legal and accounting	$69,807	$83,307
Accrued payroll and related	580,055	749,019
Accrued other	220,849	201,956
Accrued income taxes	15,526	15,334
Total accrued expenses	$886,237	$1,049,616

6_Accrued_Expenses_Details_Nar

(6) Accrued Expenses (Details Narrative) (USD $)	Mar. 28, 2015	Dec. 27, 2014
Payables and Accruals [Abstract]
401k Company Match accrued	$35,000	$110,000
Incentive Bonus accrued (thousands)	$55,000	$313,000

7_Line_of_Credit_and_Equipment1

(7) Line of Credit and Equipment Lease Facility Agreements (Details Narrative) (USD $)	Mar. 28, 2015
Debt Disclosure [Abstract]
Revolving Line of Credit	$2,000,000
Equipment Lease Line	$500,000

8_Income_Taxes_Details_Narrati

(8) Income Taxes (Details Narrative) (USD $)	3 Months Ended
	Mar. 28, 2015	Dec. 27, 2014
Income Tax Disclosure [Abstract]
Net Operating Loss Carryforwards		$750,000
Federal Income Tax Expense	38,020
State Income Tax Expense	$10,720