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 |