Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Jun. 27, 2015 | Jul. 21, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | CPS TECHNOLOGIES CORP/DE/ | |
Entity Central Index Key | 814,676 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 27, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-26 | |
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 | $ 19,000,000 | |
Entity Common Stock, Shares Outstanding | 13,195,841 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Jun. 27, 2015 | Dec. 27, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 2,753,269 | $ 2,305,580 |
Accounts receivable-trade, net | 3,840,398 | 3,589,191 |
Inventories, net | 2,800,912 | 2,528,954 |
Prepaid expenses and other current assets | 91,537 | 166,783 |
Deferred taxes | 609,847 | 682,968 |
Total current assets | 10,095,963 | 9,273,476 |
Property and equipment: | ||
Production equipment | 8,267,761 | 8,085,095 |
Furniture and office equipment | 409,792 | 404,856 |
Leasehold improvements | 832,410 | 759,819 |
Total cost | 9,509,963 | 9,249,770 |
Accumulated depreciation and amortization | (8,336,032) | (8,047,561) |
Construction in progress | 465,793 | 555,334 |
Net property and equipment | 1,639,724 | 1,757,543 |
Deferred taxes, non-current portion | 1,617,497 | 1,617,497 |
Total assets | 13,353,184 | 12,648,516 |
Current liabilities: | ||
Accounts payable | 1,806,435 | 1,352,418 |
Accrued expenses | 920,994 | 1,049,616 |
Total current liabilities | 2,727,429 | 2,402,034 |
Stockholders equity: | ||
Common stock, $0.01 par value, authorized 20,000,000 and 15,000,000 shares; issued 13,406,292 and 13,293,092 shares; outstanding 13,195,841 and 13,144,489 shares; at June 27, 2015 and December 27, 2014, respectively | 134,063 | 132,931 |
Additional paid-in capital | 35,117,510 | 34,763,698 |
Accumulated deficit | (24,127,945) | (24,315,564) |
Less cost of 210,451 and 148,603 common shares repurchased at June 27, 2015 and December 27, 2014, respectively | (497,873) | (334,583) |
Total stockholders equity | 10,625,755 | 10,246,482 |
Total liabilities and stockholders equity | $ 13,353,184 | $ 12,648,516 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 27, 2015 | Dec. 27, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, authorized shares | 20,000,000 | 15,000,000 |
Common Stock, issued shares | 13,406,292 | 13,293,092 |
Common Stock, outstanding shares | 13,195,841 | 13,144,489 |
Common Stock, par value | $ .01 | $ .01 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Income Statement [Abstract] | ||||
Product sales | $ 5,635,889 | $ 5,130,022 | $ 10,883,901 | $ 11,082,102 |
Research and development under cooperative agreement | 4,640 | 42,254 | 38,611 | |
Total revenues | $ 5,635,889 | 5,134,662 | 10,926,155 | 11,120,713 |
Cost of product sales | $ 4,336,853 | 4,072,492 | 8,456,784 | 8,491,852 |
Cost of research and development under cooperative agreement | 3,834 | 34,970 | 32,156 | |
Gross Margin | $ 1,299,036 | 1,058,336 | 2,434,401 | 2,596,705 |
Selling, general, and administrative expense | 1,112,295 | 1,153,214 | 2,125,133 | 2,279,002 |
Operating income (loss) | 186,741 | (94,878) | 309,268 | 317,703 |
Interest income (expense), net | 851 | (539) | 851 | (1,501) |
Net income (loss) before income tax expense (benefit) | 187,652 | (95,417) | 310,119 | 316,202 |
Income tax expense (benefit) | 73,760 | (38,000) | 122,500 | 126,000 |
Net income (loss) | $ 113,832 | $ (57,417) | $ 187,619 | $ 190,202 |
Net income (loss) per basic common share | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 |
Weighted average number of basic common shares outstanding | 13,178,297 | 13,084,968 | 13,162,984 | 13,077,273 |
Net income (loss) per diluted common share | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 |
Weighted average number of diluted common shares outstanding | 13,627,346 | 13,084,968 | 13,679,355 | 13,705,570 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 27, 2015 | Jun. 28, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 187,619 | $ 190,202 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 288,471 | 301,817 |
Share-based compensation | 142,074 | 156,344 |
Deferred taxes | 122,500 | 126,000 |
Excess tax benefit from stock options exercised | 49,379 | 19,956 |
Changes in: | ||
Accounts receivable-trade, net | (251,206) | (548,498) |
Inventories | (271,958) | (597,893) |
Prepaid expenses and other current assets | 75,246 | 67,755 |
Accounts payable | 454,016 | 350,617 |
Accrued expenses | (128,622) | (171,235) |
Net cash provided by (used in) operating activities | 568,762 | (144,847) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (170,652) | (264,501) |
Net cash used in investing activities | $ (170,652) | (264,501) |
Cash flows from financing activities: | ||
Payment of capital lease obligations | (41,274) | |
Proceeds from issuance of common stock | $ 163,490 | 55,947 |
Excess tax benefit from stock options exercised | 49,379 | 19,956 |
Repurchase of common stock | (163,290) | (51,741) |
Net cash provided by (used in) financing activities | 49,579 | (17,112) |
Net increase (decrease) in cash and cash equivalents | 447,689 | (426,460) |
Cash and cash equivalents at beginning of period | 2,305,580 | 1,571,054 |
Cash and cash equivalents at end of period | 2,753,269 | 1,144,594 |
Supplemental cash flow information: | ||
Cash paid for taxes | $ 15,456 | 34,706 |
Interest paid | $ 1,501 |
(1) Nature of Business
(1) Nature of Business | 6 Months Ended |
Jun. 27, 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 Companys 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 Statement
(2) Interim Financial Statements | 6 Months Ended |
Jun. 27, 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 Companys 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 Registrants 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 C
(3) Net Income Per Common and Common Equivalent Share | 6 Months Ended |
Jun. 27, 2015 | |
Earnings Per Share [Abstract] | |
(3) Net Income Per Common and Common Equivalent Share | (3) Net Income Per Common and Common Equivalent Share The following table presents the calculation of both basic and diluted earnings per share (EPS): Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, 2015 2014 2015 2014 Basic EPS Computation: Numerator: Net income (loss) $ 113,832 $ (57,417) $ 187,619 $ 190,202 Denominator: Weighted average Common shares Outstanding 13,178,297 13,084,968 13,162,984 13,077,273 Basic EPS $ 0.01 $ 0.00 $ 0.01 $ 0.01 Diluted EPS Computation: Numerator: Net income (loss) $ 113,832 $ (57,417) $ 187,619 $ 190,202 Denominator: Weighted average Common shares Outstanding 13,178,297 13,084,968 13,162,984 13,077,273 Dilutive effect of stock options 449,049 516,371 628,297 Total Shares 13,627,346 13,084,968 13,679,355 13,705,570 Diluted EPS $ 0.01 $ 0.00 $ 0.01 $ 0.01 |
(4) Share-Based Payments
(4) Share-Based Payments | 6 Months Ended |
Jun. 27, 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. There were no stock options granted under the Plan during the quarter ended June 27, 2015 or June 28, 2014. During the quarters ended June 27, 2015 and June 28, 2014 the Company issued 71,500 and 5,000, respectively, as a result of option exercises. No stock options expired during the quarters ended June 27, 2015 or June 28, 2014. During the quarter ended June 27, 2015 and June 28, 2014 the Company repurchased 40,678 and 2,550 shares, respectively, from employees to facilitate their exercise of stock options. During the three and six months ended June 27, 2015, the Company recognized $75,727 and $142,074, respectively, as shared-based compensation expense related to previously granted shares under the Plan. A tax benefit of $27,879 and $49,379 was recognized as additional paid in capital in the three and six months ended June 27, 2015, respectively, resulting from the excess tax benefit of option exercises. During the three and six months ended June 28, 2014, the Company recognized $83,897 and $156,344, respectively, as shared-based compensation expense related to previously granted shares under the Plan. A tax benefit of $2,670 and $19,956 was recognized as additional paid in capital in the three and six months ended June 28, 2014, resulting from the excess tax benefit of option exercises. |
(5) Inventories
(5) Inventories | 6 Months Ended |
Jun. 27, 2015 | |
Inventory Disclosure [Abstract] | |
(5) Inventories | (5) Inventories Inventories consist of the following: June 27, December 27, 2015 2014 Raw materials $ 538,072 $ 464,243 Work in process 1,397,302 998,209 Finished goods 1,271,038 1,467,002 Total inventory 3,206,412 2,929,454 Reserve for obsolescence (405,500) (400,500) Inventories, net $ 2,800,912 $ 2,528,954 |
(6) Accrued Expenses
(6) Accrued Expenses | 6 Months Ended |
Jun. 27, 2015 | |
Payables and Accruals [Abstract] | |
(6) Accrued Expenses | (6) Accrued Expenses Accrued expenses consist of the following: June 27, December 27, 2015 2014 Accrued legal and accounting $ 82,350 $ 83,307 Accrued payroll 638,277 749,019 Accrued other 184,841 201,956 Accrued income tax 15,526 15,334 $ 920,994 $ 1,049,616 |
(7) Line of Credit and Equipmen
(7) Line of Credit and Equipment Lease Facility Agreements | 6 Months Ended |
Jun. 27, 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 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. Both agreements mature in May 2016. The LOC is secured by the accounts receivable and other assets of the Company, has an interest rate of prime and a one-year term. Under the terms of the agreement, the Company is required to maintain its operating accounts with Santander Bank. 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 LOC that require the Company to maintain a targeted coverage ratio as well as targeted debt to equity and current ratios. At June 27, 2015, the Company was in compliance with all existing covenants. At June 27, 2015, the Company had not utilized the equipment finance facility and therefore had $500 thousand available. At June 27, 2015 the Company had no borrowings under this LOC and its borrowing base at the time would have permitted an additional $2.0 million to have been borrowed. |
(8) Income Taxes
(8) Income Taxes | 6 Months Ended |
Jun. 27, 2015 | |
Income Tax Disclosure [Abstract] | |
(8) Income Taxes | (8) Income Taxes The Company has a current and non-current deferred tax asset aggregating $2,227,344 and $2,300,465 on the Companys balance sheet at June 27, 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. The Company recorded a tax expense of $57,500 and $95,520 for federal income taxes and a tax expense of $16,260 and $26,980 for state income taxes during the three and six months ended June 27, 2015, respectively. The Company recorded a tax benefit of $30 thousand and a tax expense of $98 thousand for federal income taxes and a tax benefit of $8 thousand and a tax expense of $28 thousand for state income taxes during the three and six months ended June 28, 2014, respectively. |
(9) Commitments
(9) Commitments | 6 Months Ended |
Jun. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
(9) Commitments | (9) Commitments 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. |
(3) Net Income Per Common and15
(3) Net Income Per Common and Common Equivalent Share (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Earnings Per Share [Abstract] | |
Table presents the calculation of basic and diluted earnings per share | Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, 2015 2014 2015 2014 Basic EPS Computation: Numerator: Net income (loss) $ 113,832 $ (57,417) $ 187,619 $ 190,202 Denominator: Weighted average Common shares Outstanding 13,178,297 13,084,968 13,162,984 13,077,273 Basic EPS $ 0.01 $ 0.00 $ 0.01 $ 0.01 Diluted EPS Computation: Numerator: Net income (loss) $ 113,832 $ (57,417) $ 187,619 $ 190,202 Denominator: Weighted average Common shares Outstanding 13,178,297 13,084,968 13,162,984 13,077,273 Dilutive effect of stock options 449,049 516,371 628,297 Total Shares 13,627,346 13,084,968 13,679,355 13,705,570 Diluted EPS $ 0.01 $ 0.00 $ 0.01 $ 0.01 |
(5) Inventories (Tables)
(5) Inventories (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories consist of the following | June 27, December 27, 2015 2014 Raw materials $ 538,072 $ 464,243 Work in process 1,397,302 998,209 Finished goods 1,271,039 1,467,002 Total inventory 3,206,413 2,929,454 Reserve for obsolescence (405,500) (400,500) Inventories, net $ 2,800,912 $ 2,528,954 |
(6) Accrued Expenses (Tables)
(6) Accrued Expenses (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Payables and Accruals [Abstract] | |
Accrued expenses consist of the following: | June 27, December 27, 2015 2014 Accrued legal and accounting $ 82,350 $ 83,307 Accrued payroll 638,277 749,019 Accrued other 184,841 201,956 Accrued income tax 15,526 15,334 $ 920,994 $ 1,049,616 |
(3) Net Income Per Common and18
(3) Net Income Per Common and Common Equivalent Share - Table presents the calculation of basic and diluted earnings per share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Basic EPS Computation: | ||||
Net income (loss) | $ 113,832 | $ (57,417) | $ 187,619 | $ 190,202 |
Weighted average Common shares Outstanding | 13,178,297 | 13,084,968 | 13,162,984 | 13,077,273 |
Basic EPS | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 |
Diluted EPS Computation: | ||||
Net income (loss) | $ 113,832 | $ (57,417) | $ 187,619 | $ 190,202 |
Weighted average Common shares Outstanding | 13,178,297 | 13,084,968 | 13,162,984 | 13,077,273 |
Dilutive effect of stock options | $ 449,049 | $ 516,371 | $ 628,297 | |
Total Shares | 13,627,346 | 13,084,968 | 13,679,355 | 13,705,570 |
Diluted EPS | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 |
(4) Share-Based Payments (Detai
(4) Share-Based Payments (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Shares issued as a result of options exercises | 71,500 | 5,000 | ||
Shares repurchased from employees to facilitate exercise | 40,678 | 2,550 | ||
Share-based compensation expense recognized | $ 75,727 | $ 83,897 | $ 142,074 | $ 156,344 |
Tax benefit from option exercises | $ 27,879 | $ 2,670 | $ 49,379 | $ 19,956 |
(5) Inventories - Inventories c
(5) Inventories - Inventories consist of the following (Details) - USD ($) | Jun. 27, 2015 | Dec. 27, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 538,072 | $ 464,243 |
Work in process | 1,397,302 | 998,209 |
Finished goods | 1,271,038 | 1,467,002 |
Total inventory | 3,206,412 | 2,929,454 |
Reserve for obsolescence | (405,500) | (400,500) |
Inventories, net | $ 2,800,912 | $ 2,528,954 |
(6) Accrued Expenses - Accrued
(6) Accrued Expenses - Accrued expenses consist of the following: (Details) - USD ($) | Jun. 27, 2015 | Dec. 27, 2014 |
Payables and Accruals [Abstract] | ||
Accrued legal and accounting | $ 82,350 | $ 83,307 |
Accrued payroll | 638,277 | 749,019 |
Accrued other | 184,841 | 201,956 |
Accrued income tax | 15,526 | 15,334 |
Total accrued expenses | $ 920,994 | $ 1,049,616 |
(8) Income Taxes (Details Narra
(8) Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | Dec. 27, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Net operating loss carryforwards available | $ 750,000 | ||||
Federal income tax expense (benefit) | $ 57,500 | $ (30,000) | $ 95,520 | $ 98,000 | |
State income tax expense (benefit) | $ 16,260 | $ (8,000) | $ 26,980 | $ 28,000 |