Document and Entity Information
Document and Entity Information - USD ($) | 9 Months Ended | |
Sep. 26, 2015 | Oct. 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 | Sep. 26, 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 | $ 19,900,000 | |
Entity Common Stock, Shares Outstanding | 13,197,918 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Sep. 26, 2015 | Dec. 27, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 3,114,458 | $ 2,305,580 |
Accounts receivable-trade, net | 3,705,694 | 3,589,191 |
Inventories, net | 2,611,397 | 2,528,954 |
Prepaid expenses and other current assets | 101,343 | 166,783 |
Deferred taxes | 602,847 | 682,968 |
Total current assets | 10,135,739 | 9,273,476 |
Property and equipment: | ||
Production equipment | 8,289,027 | 8,085,095 |
Furniture and office equipment | 409,793 | 404,856 |
Leasehold improvements | 832,410 | 759,819 |
Total cost | 9,531,230 | 9,249,770 |
Accumulated depreciation and amortization | (8,453,699) | (8,047,561) |
Construction in progress | 573,891 | 555,334 |
Net property and equipment | 1,651,422 | 1,757,543 |
Deferred taxes, non-current portion | 1,617,497 | 1,617,497 |
Total assets | 13,404,658 | 12,648,516 |
Current liabilities: | ||
Accounts payable | 1,621,216 | 1,352,418 |
Accrued expenses | 1,064,659 | 1,049,616 |
Total current liabilities | 2,685,875 | 2,402,034 |
Stockholders equity: | ||
Common stock, $0.01 par value, authorized 20,000,000 and 15,000,000 shares; issued 13,412,292 and 13,293,092 shares; outstanding 13,197,918 and 13,144,489 shares; at September 26, 2015 and December 27, 2014, respectively | 134,122 | 132,931 |
Additional paid-in capital | 35,211,410 | 34,763,698 |
Accumulated deficit | (24,119,696) | (24,315,564) |
Less cost of 214,374 and 148,603 common shares repurchased at September 26, 2015 and December 27, 2014, respectively | (507,053) | (334,583) |
Total stockholders equity | 10,718,783 | 10,246,482 |
Total liabilities and stockholders equity | $ 13,404,658 | $ 12,648,516 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 26, 2015 | Dec. 27, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, authorized shares | 20,000,000 | 15,000,000 |
Common Stock, issued shares | 13,412,292 | 13,293,092 |
Common Stock, outstanding shares | 13,197,918 | 13,144,489 |
Common Stock, par value | $ .01 | $ .01 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2015 | Sep. 27, 2014 | Sep. 26, 2015 | Sep. 27, 2014 | |
Income Statement [Abstract] | ||||
Product sales | $ 5,423,107 | $ 5,984,623 | $ 16,307,008 | $ 17,066,725 |
Research and development under cooperative agreement | 85,607 | 42,254 | 124,218 | |
Total Revenues | $ 5,423,107 | 6,070,230 | 16,349,262 | 17,190,943 |
Cost of product sales | $ 4,448,991 | 4,658,194 | 12,905,775 | 13,150,046 |
Cost of research and development under cooperative agreement | 72,861 | 34,970 | 105,017 | |
Gross Margin | $ 974,116 | 1,339,175 | 3,408,517 | 3,935,880 |
Selling, general and administrative expense | 960,321 | 1,017,811 | 3,085,454 | 3,296,813 |
Operating income | 13,795 | 321,364 | 323,063 | 639,067 |
Interest income (expense), net | 1,454 | (299) | 2,305 | (1,800) |
Net income before income tax expense | 15,249 | 321,065 | 325,368 | 637,267 |
Income tax expense | 7,000 | 127,000 | 129,500 | 253,000 |
Net income | $ 8,249 | $ 194,065 | $ 195,868 | $ 384,267 |
Net income per basic common share | $ 0 | $ 0.01 | $ 0.01 | $ 0.03 |
Weighted average number of basic common shares outstanding | 13,197,827 | 13,091,819 | 13,174,598 | 13,082,135 |
Net income per diluted common share | $ 0 | $ 0.01 | $ 0.01 | $ 0.03 |
Weighted average number of diluted common shares outstanding | 13,611,956 | 13,737,953 | 13,656,888 | 13,716,378 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 195,868 | $ 384,267 |
Adjustments to reconcile net income to cash provided by (used in) operating activities | ||
Depreciation and amortization | 406,138 | 425,001 |
Share-based compensation | 226,853 | 240,240 |
Deferred taxes | 129,500 | 253,000 |
Excess tax benefit from stock options exercised | (49,379) | (31,656) |
Changes in: | ||
Accounts receivable-trade, net | (116,503) | (1,690,189) |
Inventories | (82,443) | (455,937) |
Prepaid expenses and other current assets | 65,440 | (14,793) |
Accounts payable | 268,798 | 675,975 |
Accrued expenses | 15,043 | 95,011 |
Net cash provided by (used in) operating activities | 1,059,315 | (119,081) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (300,017) | (370,244) |
Net cash used in investing activities | $ (300,017) | (370,244) |
Cash flows from financing activities: | ||
Payment of capital lease obligations | (62,256) | |
Proceeds from issuance of common stock | $ 172,671 | 66,309 |
Excess tax benefit from stock options exercised | 49,379 | 31,656 |
Repurchase of common stock | (172,470) | (61,491) |
Net cash provided by (used in) financing activities | 49,581 | (25,782) |
Net increase (decrease) in cash and cash equivalents | 808,879 | (515,107) |
Cash and cash equivalents at beginning of period | 2,305,580 | 1,571,054 |
Cash and cash equivalents at end of period | 3,114,458 | 1,055,947 |
Supplemental cash flow information: | ||
Cash paid for taxes, net of refunds | $ 27,005 | 34,706 |
Interest paid | $ 1,811 |
(1) Nature of Business
(1) Nature of Business | 9 Months Ended |
Sep. 26, 2015 | |
Accounting Policies [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 | 9 Months Ended |
Sep. 26, 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. |
(4) Share-Based Payments
(4) Share-Based Payments | 9 Months Ended |
Sep. 26, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
(4) Share-Based Payments | (4) Share-Based Payments There were no stock options granted under the Plan during the quarters ended September 26, 2015 and September 27, 2014. During the quarters ended September 26, 2015 and September 27, 2014 the Company issued 6,000 and 15,400 shares, respectively, as a result of option exercises. No options expired during the quarters ended September 26, 2015 and September 27, 2014. During the quarters ended September 26, 2015 and September 27, 2014 the Company repurchased 3,923 and 3,508 shares, respectively, from employees to facilitate their exercise of stock options. During the three and nine months ended September 26, 2015 the Company recognized approximately $84 thousand and $227 thousand, respectively as share-based compensation expense related to previously granted shares under the Plan. A tax benefit of approximately $49 thousand was recognized as additional paid in capital in the nine months ended September 26, 2015 resulting from the excess tax benefit of option exercises. During the three and nine months ended September 27, 2014 the Company recognized approximately $84 thousand and $240 thousand, respectively as share-based compensation expense related to previously granted shares under the Plan. A tax benefit of approximately $12 thousand and $32 thousand was recognized as additional paid in capital in the three and nine months ended September 27, 2014, respectively resulting from the excess tax benefit of option exercises. |
(5) Inventories
(5) Inventories | 9 Months Ended |
Sep. 26, 2015 | |
Inventory Disclosure [Abstract] | |
(5) Inventories | (5) Inventories September 26, December 27, 2015 2014 Raw materials $ 525,047 $ 464,243 Work in process 1,314,127 998,209 Finished goods 1,182,723 1,467,002 Total inventory 3,021,897 2,929,454 Reserve for obsolescence (410,500) (400,500) Inventories, net $ 2,611,397 $ 2,528,954 |
(6) Accrued Expenses
(6) Accrued Expenses | 9 Months Ended |
Sep. 26, 2015 | |
Payables and Accruals [Abstract] | |
(6) Accrued Expenses | (6) Accrued Expenses September 26, December 27, 2015 2014 Accrued legal and accounting $ 97,160 $ 83,307 Accrued payroll 791,788 749,019 Accrued other 171,734 201,956 Accrued income tax 3,977 15,334 $ 1,064,659 $ 1,049,616 |
(7) Line of Credit and Equipmen
(7) Line of Credit and Equipment Lease Facility Agreements | 9 Months Ended |
Sep. 26, 2015 | |
Debt Disclosure [Abstract] | |
(7) Line of Credit and Equipment Lease Facility Agreements | (7) Line of Credit and Equipment Lease Facility Agreements |
(8) Income Taxes
(8) Income Taxes | 9 Months Ended |
Sep. 26, 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 has a current and non-current deferred tax asset aggregating $2,220,344 and $2,300,465 on the Companys balance sheet at September 26, 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 $5,000 and $100,520 for federal income taxes and a tax expense of $2,000 and $28,980 for state income taxes during the three and nine months ended September 26, 2015, respectively. The Company recorded a tax expense of $99,500 and $197,500 for federal income taxes and a tax expense of $27,500 and $55,500 for state income taxes during the three and nine months ended September 27, 2014, respectively. |
(9) Commitments
(9) Commitments | 9 Months Ended |
Sep. 26, 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 extend 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 and C
(3) Net Income Per Common and Common Equivalent Share (Tables) | 9 Months Ended |
Sep. 26, 2015 | |
Income Statement [Abstract] | |
Calculation of both basic and diluted EPS | Three Months Ended Nine Months Ended Sept. 26, Sept. 27, Sept. 26, Sept. 27 2015 2014 2015 2014 Basic EPS Computation: Numerator: Net income $ 8,249 $ 194,065 $ 195,868 $ 384,267 Denominator: Weighted average Common shares Outstanding 13,197,827 13,091,819 13,174,598 13,082,135 Basic EPS $ 0.00 $ 0.01 $ 0.01 $ 0.03 Diluted EPS Computation: Numerator: Net income $ 8,249 $ 194,065 $ 195,868 $ 384,267 Denominator: Weighted average Common shares Outstanding 13,197,827 13,091,819 13,174,598 13,082,135 Dilutive effect of stock options 414,129 646,134 482,290 634,243 Total Shares 13,611,956 13,737,953 13,656,888 13,716,378 Diluted EPS $ 0.00 $ 0.01 $ 0.01 $ 0.03 |
(5) Inventories (Tables)
(5) Inventories (Tables) | 9 Months Ended |
Sep. 26, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | September 26, December 27, 2015 2014 Raw materials $ 525,047 $ 464,243 Work in process 1,314,127 998,209 Finished goods 1,182,723 1,467,002 Total inventory 3,021,897 2,929,454 Reserve for obsolescence (410,500) (400,500) Inventories, net $ 2,611,397 $ 2,528,954 |
(6) Accrued Expenses (Tables)
(6) Accrued Expenses (Tables) | 9 Months Ended |
Sep. 26, 2015 | |
Payables and Accruals [Abstract] | |
Accrued expenses consist of the following | September 26, December 27, 2015 2014 Accrued legal and accounting $ 97,160 $ 83,307 Accrued payroll 791,788 749,019 Accrued other 171,734 201,956 Accrued income tax 3,977 15,334 $ 1,064,659 $ 1,049,616 |
(3) Net Income Per Common and17
(3) Net Income Per Common and Common Equivalent Share - Calculation of both basic and diluted EPS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2015 | Sep. 27, 2014 | Sep. 26, 2015 | Sep. 27, 2014 | |
Basic EPS Computation: | ||||
Net income | $ 8,249 | $ 194,065 | $ 195,868 | $ 384,267 |
Weighted average Common shares Outstanding | 13,197,827 | 13,091,819 | 13,174,598 | 13,082,135 |
Basic EPS | $ 0 | $ 0.01 | $ 0.01 | $ 0.03 |
Diluted EPS Computation: | ||||
Net income | $ 8,249 | $ 194,065 | $ 195,868 | $ 384,267 |
Weighted average Common shares Outstanding | 13,197,827 | 13,091,819 | 13,174,598 | 13,082,135 |
Dilutive effect of stock options | $ 414,129 | $ 646,134 | $ 482,290 | $ 634,243 |
Total Shares | 13,611,956 | 13,737,953 | 13,656,888 | 13,716,378 |
Diluted EPS | $ 0 | $ 0.01 | $ 0.01 | $ 0.03 |
(4) Share-Based Payments (Detai
(4) Share-Based Payments (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2015 | Sep. 27, 2014 | Sep. 26, 2015 | Sep. 27, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Shares issued as a result of option exercises | 6,000 | 15,400 | ||
Shares repurchased from employees to facilitate exercise | 3,923 | 3,508 | ||
Share-based compensation expense recognized | $ 84 | $ 84 | $ 227 | $ 240 |
Tax benefit from option exercises | $ 12 | $ 49 | $ 32 |
(5) Inventories - Inventory (De
(5) Inventories - Inventory (Details) - USD ($) | Sep. 26, 2015 | Dec. 27, 2014 |
Inventory, Net [Abstract] | ||
Raw materials | $ 525,047 | $ 464,243 |
Work in process | 1,314,127 | 998,209 |
Finished goods | 1,182,723 | 1,467,002 |
Total inventory | 3,021,897 | 2,929,454 |
Reserve for obsolescence | (410,500) | (400,500) |
Inventories, net | $ 2,611,397 | $ 2,528,954 |
(6) Accrued Expenses - Accrued
(6) Accrued Expenses - Accrued expenses consist of the following (Details) - USD ($) | Sep. 26, 2015 | Dec. 27, 2014 |
Payables and Accruals [Abstract] | ||
Accrued legal and accounting | $ 97,160 | $ 83,307 |
Accrued payroll | 791,788 | 749,019 |
Accrued other | 171,734 | 201,956 |
Accrued income tax | 3,977 | 15,334 |
Total accrued expenses | $ 1,064,659 | $ 1,049,616 |
(8) Income Taxes (Details Narra
(8) Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2015 | Sep. 27, 2014 | Sep. 26, 2015 | Sep. 27, 2014 | Dec. 27, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Net operating loss carryforwards available | $ 750,000 | ||||
Current and Non-current deferred tax asset | $ 2,220,344 | $ 2,220,344 | $ 2,300,465 | ||
Federal income tax expense(benefit) | 5,000 | $ 99,500 | 100,520 | $ 197,500 | |
State income tax expense(benefit) | $ 2,000 | $ 27,500 | $ 28,980 | $ 55,500 |