Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 26, 2015 | Mar. 07, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | CPS TECHNOLOGIES CORP/DE/ | |
Entity Central Index Key | 814,676 | |
Document Type | 10-K | |
Document Period End Date | Dec. 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 | $ 15,000,000 | |
Entity Common Stock, Shares Outstanding | 13,197,918 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,015 |
Balance Sheets
Balance Sheets - USD ($) | 12 Months Ended | |
Dec. 26, 2015 | Dec. 27, 2014 | |
Current assets: | ||
Cash and cash equivalents | $ 3,412,649 | $ 2,305,580 |
Accounts receivable-trade, net | 3,572,479 | 3,589,191 |
Inventories, net | 2,632,444 | 2,528,954 |
Prepaid expenses and other current assets | 104,761 | 166,783 |
Deferred taxes | 467,374 | 682,968 |
Total current assets | 10,189,707 | 9,273,476 |
Property and equipment: | ||
Production equipment | 8,460,727 | 8,085,095 |
Furniture and office equipment | 409,793 | 404,856 |
Leasehold improvements | 854,215 | 759,819 |
Total cost | 9,724,735 | 9,249,770 |
Accumulated depreciation and amortization | (8,593,236) | (8,047,561) |
Construction in progress | 557,054 | 555,334 |
Net property and equipment | 1,688,553 | 1,757,543 |
Deferred taxes, non-current portion | 1,683,375 | 1,617,497 |
Total assets | 13,561,635 | 12,648,516 |
Current liabilities: | ||
Accounts payable | 1,622,564 | 1,352,418 |
Accrued expenses | 931,916 | 1,049,616 |
Total current liabilities | $ 2,554,480 | 2,402,034 |
Commitments (note 4) | (4) Leases and Commitments Capital Lease Obligations An equipment financing facility with Santander Bank (see note 7), agreed to in May 2015, allowed the Company to finance up to $500 thousand of eligible equipment. As of year-end 2015 the Company had $500 thousand available remaining on the Santander lease line. At December 26, 2015, the Company had acquired production equipment with a cost of $2.55 million and accumulated amortization of $2.55 million under capital leases. At December 27, 2014, the Company had production equipment with a cost of $2.55 million and accumulated amortization of $2.45 million under capital leases. All capital leases are three year leases with a one dollar buyout. At December 26, 2015 these leases were paid in full. Interest expense was $3 thousand and $30 thousand for 2014 and 2013, respectively. Operating Lease Obligations 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. Rental expense for operating leases is recognized on a straight-line basis over the term of the lease and was $131 thousand in 2015 and $129 thousand in each of the years 2014 and 2013. 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. 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 December 2015, the Company exercised its option to extend the lease through the end of February 2017. Future minimum rental payments over the terms of the lease agreements are approximately as follows: Fiscal year: 2016 $ 235,200 2017 166,200 2018 152,400 2019 25,400 $ 579,200 | |
Stockholders’ Equity: | ||
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 13,412,292 and 13,293,092; outstanding 13,197,918 and 13,144,489 shares; at December 26, 2015 and December 27, 2014, respectively | $ 134,123 | 132,931 |
Additional paid-in capital | 35,245,030 | 34,763,698 |
Accumulated deficit | (23,864,945) | (24,315,564) |
Less cost of 214,374 and 148,603 common shares repurchased at December 26, 2015 and December 27, 2014, respectively | (507,053) | (334,583) |
Total stockholders equity | 11,007,155 | 10,246,482 |
Total liabilities and stockholders equity | $ 13,561,635 | $ 12,648,516 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 26, 2015 | Dec. 27, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, authorized | 20,000,000 | 20,000,000 |
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
Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 26, 2015 | Dec. 27, 2014 | Dec. 28, 2013 | |
Revenues: | |||
Product sales | $ 21,719,427 | $ 22,948,993 | $ 21,094,801 |
Research and development under cooperative agreement | 42,254 | 188,597 | 311,198 |
Total revenues | 21,761,681 | 23,137,590 | 21,405,999 |
Cost of product sales | 17,061,720 | 17,510,556 | 15,789,840 |
Cost of research and development under cooperative agreement | 34,970 | 156,224 | 259,082 |
Gross Margin | 4,664,991 | 5,470,810 | 5,357,077 |
Selling, general, and administrative | 4,045,834 | 4,254,977 | 3,897,588 |
Income from operations | 619,157 | 1,215,833 | 1,459,489 |
Other income (expense) | 5,694 | 5,083 | (30,327) |
Income before income tax | 624,851 | 1,220,916 | 1,429,162 |
Income tax provision | 174,232 | 218,148 | 462,707 |
Net income | $ 450,619 | $ 1,002,768 | $ 966,455 |
Net income per basic common share | $ 0.03 | $ 0.08 | $ 0.07 |
Weighted average number of basic common shares outstanding | 13,180,428 | 13,096,183 | 12,985,107 |
Net income per diluted common share | $ 0.03 | $ 0.07 | $ 0.07 |
Weighted average number of diluted common shares outstanding | 13,639,074 | 13,703,005 | 13,265,486 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 26, 2015 | Dec. 27, 2014 | Dec. 28, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 450,619 | $ 1,002,768 | $ 966,455 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Share-based compensation | 283,507 | 348,649 | 248,535 |
Depreciation and amortization | 545,673 | 576,745 | 615,348 |
Deferred taxes | 176,063 | 175,437 | 311,071 |
Excess tax benefit from stock options exercised | (26,347) | (25,716) | (117,401) |
Changes in operating assets and liabilities: | |||
Accounts receivable - trade | 16,712 | (688,731) | (24,308) |
Inventories | (103,490) | (345,255) | 273,616 |
Prepaid expenses and other current assets | 62,022 | 8,943 | (35,003) |
Accounts payable | 270,146 | 260,509 | (87,404) |
Accrued expenses | (117,700) | (31,481) | 286,171 |
Net cash provided by operating activities | 1,557,205 | 1,281,865 | 2,437,080 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (476,683) | (501,501) | (666,915) |
Net cash used by investing activities | $ (476,683) | (501,501) | (666,915) |
Cash flows from financing activities: | |||
Payment of capital lease obligations | (76,372) | (123,366) | |
Excess tax benefit from stock options exercised | $ 26,347 | $ 25,716 | 117,401 |
Repayment of line of credit | (500,000) | ||
Proceeds from issuance of common stock | $ 172,670 | $ 111,726 | 93,360 |
Repurchase of common stock | (172,470) | (106,908) | (93,360) |
Net cash provided (used) by financing activities | 26,547 | (45,838) | (505,965) |
Net increase in cash and cash equivalents | 1,107,069 | 734,526 | 1,264,200 |
Cash and cash equivalents at beginning of year | 2,305,580 | 1,571,054 | 306,854 |
Cash and cash equivalents at end of year | 3,412,649 | 2,305,580 | $ 1,571,054 |
Supplemental cash flow information: | |||
Income taxes paid, net of refund | $ 12,005 | 34,706 | |
Interest paid | $ 3,554 | $ 30,327 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, stockholders equity at Dec. 29, 2012 | $ 7,532,140 | ||||
Beginning balance, shares at Dec. 29, 2012 | 12,928,042 | ||||
Beginning balance, par value of shares issued at Dec. 29, 2012 | $ 129,281 | ||||
Share-based compensation expense | $ 248,535 | 248,535 | $ 248,535 | ||
Tax benefit from exercise of stock options | 117,401 | 117,401 | 117,401 | ||
Repurchase of common stock | $ (93,360) | (93,360) | |||
Issuance of common stock pursuant to exercise of stock options | 90,860 | 93,360 | |||
Issuance of common stock pursuant to exercise of stock options, number of shares issued | 250,000 | ||||
Issuance of common stock pursuant to exercise of stock options, par value | $ 2,500 | ||||
Net Income | 966,465 | 966,455 | |||
Ending balance, stockholders equity at Dec. 28, 2013 | $ 8,864,531 | ||||
Ending balance, shares at Dec. 28, 2013 | 13,178,042 | ||||
Ending balance, par value shares issued at Dec. 28, 2013 | $ 131,781 | ||||
Share-based compensation expense | 348,649 | 348,649 | 348,649 | ||
Tax benefit from exercise of stock options | 25,716 | 25,716 | 25,716 | ||
Repurchase of common stock | (106,908) | (106,908) | |||
Issuance of common stock pursuant to exercise of stock options | 110,576 | 111,726 | |||
Issuance of common stock pursuant to exercise of stock options, number of shares issued | 115,050 | ||||
Issuance of common stock pursuant to exercise of stock options, par value | $ 1,150 | ||||
Net Income | 1,002,768 | ||||
Ending balance, stockholders equity at Dec. 27, 2014 | $ 10,246,482 | ||||
Ending balance, shares at Dec. 27, 2014 | 13,293,092 | ||||
Ending balance, par value shares issued at Dec. 27, 2014 | $ 132,931 | ||||
Share-based compensation expense | 283,507 | 283,507 | 283,507 | ||
Tax benefit from exercise of stock options | 26,347 | 26,347 | 26,347 | ||
Repurchase of common stock | $ (172,470) | $ (172,470) | |||
Issuance of common stock pursuant to exercise of stock options | $ 171,478 | 172,670 | |||
Issuance of common stock pursuant to exercise of stock options, number of shares issued | 119,200 | ||||
Issuance of common stock pursuant to exercise of stock options, par value | $ 1,192 | ||||
Net Income | 450,619 | ||||
Ending balance, stockholders equity at Dec. 26, 2015 | $ 11,007,155 | ||||
Ending balance, shares at Dec. 26, 2015 | 13,412,292 | ||||
Ending balance, par value shares issued at Dec. 26, 2015 | $ 134,123 |
(1) Nature of Business
(1) Nature of Business | 12 Months Ended |
Dec. 26, 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 transportation, automotive, energy, computing/internet, telecommunications, aerospace, defense and oil and gas end markets. Our primary material solution is metal matrix composites. We design, manufacture and sell custom metal matrix composite components which improve the performance and reliability of systems in these end markets. |
(2) Summary of Significant Acco
(2) Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 26, 2015 | |
Accounting Policies [Abstract] | |
(2) 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, 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 26, 2015 and December 27, 2014, 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, the Company 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, recently expired March 31, 2015, which was 95% funded by the US Department of Defense and 5% funded by CPS. Revenues from this Cooperative Agreement are recognized proportionally as costs are incurred. We are 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. (2)(g) Research and Development Costs In 2015, costs incurred related to funding under the Cooperative Agreement totaled $42 thousand of which 100% was reimbursed by the U.S. Army and was recorded as revenue. This revenue of $42 thousand resulted in a gross margin of $8 thousand. In 2014, costs incurred related to funding under the Cooperative Agreement totaled $189 thousand of which 100% was reimbursed by the U.S. Army and was recorded as revenue. This revenue of $189 thousand resulted in a gross margin of $32 thousand. 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. (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 (eight of the last ten years had operating profits, including the last three), 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 26, 2015 and December 27, 2014, 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 26, 2015 or December 27, 2014 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 Per Common 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 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 (2)(k) Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers. This update provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2016 and allows for either full retrospective or modified retrospective application, with early adoption not permitted. Accordingly, the standard is effective for the Company for fiscal year 2017. The Company is currently evaluating the adoption method it will apply and the impact that this guidance will have on its financial statements and related disclosures. In November 2015, the FASB issued updated accounting guidance on balance sheet classification of deferred taxes ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. This update provides for simplified presentation of deferred income taxes. Deferred tax liabilities and assets are now required to be classified as noncurrent in a classified statement of financial position. This guidance is effective within those annual reporting periods that begin after December 31, 2016, and interim periods within those annual periods and allows for full prospective or retrospective application. Early adoption is permitted. The Company did not adopt this new guidance and is currently evaluating the adoption method it will apply and the impact that this guidance will have on its financial statements and related disclosures. (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 2015, 2014 and 2013 consisted of 52 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 The Cooperative Agreement the Company entered into with the Army Research Laboratory in 2008 and the sale of structural components to the oil and gas industry 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. |
3) Inventories
3) Inventories | 12 Months Ended |
Dec. 26, 2015 | |
Inventory Disclosure [Abstract] | |
3) Inventories | (3) Inventories As of December 26, 2015 and December 27, 2014 inventories consisted of the following: 2015 2014 Raw materials $ 670,318 $ 464,243 Work in process 970,598 998,209 Finished goods 1,447,028 1,467,002 Gross Inventory 3,087,944 2,929,454 Reserve for obsolescence (455,500) (400,500) Total $ 2,632,444 $ 2,528,954 |
(4) Leases and Commitments
(4) Leases and Commitments | 12 Months Ended |
Dec. 26, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
(4) Leases and Commitments | (4) Leases and Commitments Capital Lease Obligations An equipment financing facility with Santander Bank (see note 7), agreed to in May 2015, allowed the Company to finance up to $500 thousand of eligible equipment. As of year-end 2015 the Company had $500 thousand available remaining on the Santander lease line. At December 26, 2015, the Company had acquired production equipment with a cost of $2.55 million and accumulated amortization of $2.55 million under capital leases. At December 27, 2014, the Company had production equipment with a cost of $2.55 million and accumulated amortization of $2.45 million under capital leases. All capital leases are three year leases with a one dollar buyout. At December 26, 2015 these leases were paid in full. Interest expense was $3 thousand and $30 thousand for 2014 and 2013, respectively. Operating Lease Obligations 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. Rental expense for operating leases is recognized on a straight-line basis over the term of the lease and was $131 thousand in 2015 and $129 thousand in each of the years 2014 and 2013. 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. 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 December 2015, the Company exercised its option to extend the lease through the end of February 2017. Future minimum rental payments over the terms of the lease agreements are approximately as follows: Fiscal year: 2016 $ 235,200 2017 166,200 2018 152,400 2019 25,400 $ 579,200 |
(5) Share-Based Compensation Pl
(5) Share-Based Compensation Plans | 12 Months Ended |
Dec. 26, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
(5) 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. Some outstanding options are nonstatutory stock options; some are incentive stock options. All options granted are 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 immediately on date of grant. Under the 2009 Plan a total of 2,859,300 shares of common stock are available for issuance, of which 1,540,995 shares remain available for grant as of December 26, 2015. As of December 26, 2015, 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 26, 2015 there are 4,000 options outstanding under the 1999 Plan. A summary of stock option activity for all the above plans as of December 26, 2015 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 1,327,005 $ 1.63 Granted 168,500 $ 2.85 Exercised (119,200) $ 1.45 Forfeited Expired (18,000) $ 1.02 Outstanding at end of year 1,358,305 $ 1.80 5.96 $ 1,067,205 Options exercisable at year-end 1,003,005 $ 1.67 5.22 $ 874,105 The total intrinsic value of options exercised during fiscal years 2015, 2014 and 2013 was $141,520, $330,773 and $310,170, respectively. As of December 26, 2015, there was $343,479 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 2.1 years. Cash received from option exercises under all share-based payment arrangements was $172,670, $111,726, and $93,360, for the years ended December 26, 2015, December 27, 2014 and December 28, 2013, 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 2015 and 2014: 2015 2014 Risk-free interest rate 1.44-1.60% 0.91-2.16% Expected life in years 6-7 9 Expected volatility 50% 53% Expected dividend yield 0 0 Weighted average fair value of grants $ 1.41 $ 1.74 All options are granted with an exercise price equal to the fair market value of the underlying common stock on the date of grant. The Company recognized $283,507, $348,649 and $248,535 as compensation expense related to total stock options outstanding in 2015, 2014 and 2013, respectively. A tax benefit of $26,347, $25,716 and $117,401 was recognized as additional paid in capital in the years ended December 26, 2015, December 27, 2014 and December 28, 2013, respectively, resulting from the excess tax benefit of share-based awards over the cumulative compensation expense recognized for financial reporting. |
(6) Accrued Expenses
(6) Accrued Expenses | 12 Months Ended |
Dec. 26, 2015 | |
Payables and Accruals [Abstract] | |
(6) Accrued Expenses | (6) Accrued Expenses Accrued expenses at December 26, 2015 and December 27, 2014 consist of the following: 2015 2014 Accrued legal and accounting $ 101,000 $ 83,307 Accrued payroll and related 666,846 749,019 Accrued other 161,921 201,956 Accrued income tax payable 2,149 15,334 $ 931,916 $ 1,049,616 The accrued payroll and related at December 26, 2015 includes $120 thousand for 401k company match and $140 thousand for incentive bonuses. These totaled $110 and $313 thousand respectively on December 27, 2014. |
(7) Revolving Line of Credit an
(7) Revolving Line of Credit and Lease Line | 12 Months Ended |
Dec. 26, 2015 | |
Debt Disclosure [Abstract] | |
(7) Revolving Line of Credit and Lease Line | (7) Revolving Line of Credit and Lease Line 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 (3.5% at December 26, 2015) 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 26, 2015, the Company was in compliance with existing covenants. At December 26, 2015, the Company had no borrowing under its lease line. In addition at December 27, 2014 the Company had no borrowings under this LOC while its borrowing base at the time would have permitted borrowings of $2.0 million. The covenants with Santander Bank are identical for the line of credit and equipment financing facility. The covenant requirements are shown below together with the actual ratios achieved at the end of 2015: Covenant Requirement Actual Debt Service Coverage Ratio Minimum of $1.25 N/A (no debt) Current Ratio Minimum of 1.5X 4.0 Liabilities to Tangible Net Worth Maximum of 1.0X 0.2 Borrowings under the lease line Maximum of $500K None Borrowings under the line of credit Maximum of $1,997K None *(based on receivables at 12/26/2015) ( |
(8) Income Taxes
(8) Income Taxes | 12 Months Ended |
Dec. 26, 2015 | |
Income Tax Disclosure [Abstract] | |
(8) Income Taxes | (8) Income Taxes Components of income tax expense (benefit) for each year are as follows: 2015 2014 2013 Current Federal $ (2,286 ) $ 15,985 $ 33,777 State 456 1,011 456 Current income tax provision (benefit): (1,830 ) 16,996 34,233 Deferred: United States: Federal 168,371 200,926 379,574 State 7,691 226 48,900 Deferred income tax provision (benefit), net 176,062 201,152 428,474 Total $ 174,232 $ 218,148 $ 462,707 Deferred tax assets as of December 26, 2015 and December 27, 2014 are as follows: December 26, 2015 December 27, 2014 Deferred Tax Assets: Net operating loss carryforwards $ $ 282,000 Stock compensation 553,000 459,000 Credit carryforwards 1,018,000 1,029,000 Inventory 424,000 363,000 Accrued liabilities 39,000 34,000 Depreciation 112,000 130,000 Other 5,000 3,000 Gross deferred tax assets 2,151,000 2,300,000 Valuation allowance Net deferred tax assets $ 2,151,000 $ 2,300,000 At December 26, 2015 the Company had no operating loss carryforwards available. At December 27, 2014, the Company had net operating loss carryforwards of approximately $740,000 available to offset future income for U.S. Federal income tax purposes. During 2015, the Company fully utilized the available net operating loss carryforwards. During 2015 and 2014, the Company utilized approximately $740,000 and $1,430,000 of net operating loss carryforwards, 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. A summary of the change in the deferred tax asset is as follows: 2015 2014 2013 Balance at beginning of year $ 2,300,465 $ 2,475,902 $ 2,786,973 Deferred tax (expense) benefit (149,716) (175,437) (311,071) Balance at end of year $ 2,150,749 $ 2,300,465 $ 2,475,902 Income tax 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: 2015 2014 2013 Tax at statutory rate $ 212,000 $ 415,000 $ 486,000 State tax, net of federal benefit 450 1,000 33,000 Tax credits and other Permanent differences (38,450) (198,000) (56,000) Total $ 174,000 $ 218,000 $ 463,000 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 2012 through 2015. At December 26, 2015 the Company’s Deferred Tax Asset and other temporary differences which will require taxable income of approximately $6.2 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. |
(9) Retirement Savings Plan
(9) Retirement Savings Plan | 12 Months Ended |
Dec. 26, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
(9) 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 2015, 2014 and 2013 the Company offered a 401k match. The Company recognized $120,000, $110,000 and $200,000 expense, in 2015, 2014 and 2013, respectively for the Company match. |
(10) Concentration of Credit Ri
(10) Concentration of Credit Risk, Significant Customers Geographic Information | 12 Months Ended |
Dec. 26, 2015 | |
Segment Reporting [Abstract] | |
(10) Concentration of Credit Risk, Significant Customers 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 2015, 2014 and 2013 were as follows: Percent of Total Revenues Significant Customer 2015 2014 2013 A 27 % 38 % 42 % B 23 % 21 % 23 % C 10 % 10 % 8 % As of December 26, 2015, the Company had trade accounts receivable due from these three customers that accounted for 63% 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 2015, 2014, and 2013: Percent of Total Revenues Country 2015 2014 2013 United States of America 21 % 20 % 16 % Germany 50 % 59 % 65 % Other 29 % 21 % 19 % 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 80%, 80% and 84% of total revenue in 2015, 2014 and 2013, respectively. All of the Company’s long-lived assets and operations are located in the United States. |
(11) Net Income Per Share
(11) Net Income Per Share | 12 Months Ended |
Dec. 26, 2015 | |
Earnings Per Share [Abstract] | |
(11) Net Income Per Share | (11) Net Income Per Share The following reconciles the basic and diluted net income per share calculations. For the years ended Dec. 26, Dec. 27, Dec. 28, 2015 2014 2013 Basic Computation: Numerator: Net income $ 450,619 $ 1,022,768 $ 966,455 Denominator: Weighted average common shares outstanding 13,180,428 13,096,183 12,985,107 Basic net income per share $ 0.03 $ 0.08 $ 0.07 Diluted Computation: Numerator: Net income $ 450,619 $ 1,002,768 $ 966,455 Denominator: Weighted average common shares outstanding 13,180,428 13,096,183 12, 985,107 Stock options 458,646 606,822 280,379 Total shares 13,639,074 13,703,005 13,265,486 Diluted net income per share $ 0.03 $ 0.07 $ 0.07 |
(12) Allowance for Doubtful Acc
(12) Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 26, 2015 | |
Accounting Policies [Abstract] | |
(12) Allowance for Doubtful Accounts | (12) Allowance for Doubtful Accounts Activity in the allowance for doubtful account was as follows for fiscal years 2015, 2014, and 2013: 2015 2014 2013 Beginning balance $ 10,000 $ 10,000 $ 10,000 Provision for bad debt Charge-offs Ending balance $ 10,000 $ 10,000 $ 10,000 |
(2) Summary of Significant Ac19
(2) Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 26, 2015 | |
Accounting Policies [Abstract] | |
2(a) Cash and Cash Equivalents | (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 | (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 | (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, 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 | (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 | (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 26, 2015 and December 27, 2014, the Company believes that there has been no impairment of its long-lived assets. |
(2)(f) Revenue Recognition | (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, the Company 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, recently expired March 31, 2015, which was 95% funded by the US Department of Defense and 5% funded by CPS. Revenues from this Cooperative Agreement are recognized proportionally as costs are incurred. We are 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. |
(2)(g) Research and Development Costs | (2)(g) Research and Development Costs In 2015, costs incurred related to funding under the Cooperative Agreement totaled $42 thousand of which 100% was reimbursed by the U.S. Army and was recorded as revenue. This revenue of $42 thousand resulted in a gross margin of $8 thousand. In 2014, costs incurred related to funding under the Cooperative Agreement totaled $189 thousand of which 100% was reimbursed by the U.S. Army and was recorded as revenue. This revenue of $189 thousand resulted in a gross margin of $32 thousand. 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. |
(2)(h) Income Taxes | (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 (eight of the last ten years had operating profits, including the last three), 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 26, 2015 and December 27, 2014, 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 26, 2015 or December 27, 2014 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 Per Common Share | (2)(i) Net Income Per Common 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 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 | (2)(j) Comprehensive Income The Company has no items of comprehensive income, and therefore net income is equal to |
(2)(k) Recent Accounting Pronouncements | (2)(k) Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers. This update provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2016 and allows for either full retrospective or modified retrospective application, with early adoption not permitted. Accordingly, the standard is effective for the Company for fiscal year 2017. The Company is currently evaluating the adoption method it will apply and the impact that this guidance will have on its financial statements and related disclosures. In November 2015, the FASB issued updated accounting guidance on balance sheet classification of deferred taxes ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. This update provides for simplified presentation of deferred income taxes. Deferred tax liabilities and assets are now required to be classified as noncurrent in a classified statement of financial position. This guidance is effective within those annual reporting periods that begin after December 31, 2016, and interim periods within those annual periods and allows for full prospective or retrospective application. Early adoption is permitted. The Company did not adopt this new guidance and is currently evaluating the adoption method it will apply and the impact that this guidance will have on its financial statements and related disclosures. (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 | (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 2015, 2014 and 2013 consisted of 52 weeks. |
(2)(n) Share-Based Payments | (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 | (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 The Cooperative Agreement the Company entered into with the Army Research Laboratory in 2008 and the sale of structural components to the oil and gas industry 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. |
3) Inventories (Tables)
3) Inventories (Tables) | 12 Months Ended |
Dec. 26, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | 2015 2014 Raw materials $ 670,318 $ 464,243 Work in process 970,598 998,209 Finished goods 1,447,028 1,467,002 Gross Inventory 3,087,944 2,929,454 Reserve for obsolescence (455,500) (400,500) Total $ 2,632,444 $ 2,528,954 |
(4) Leases and Commitments (Tab
(4) Leases and Commitments (Tables) | 12 Months Ended |
Dec. 26, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum rental payments for operating leases | 2016 $ 235,200 2017 166,200 2018 152,400 2019 25,400 $ 579,200 |
(5) Share-Based Compensation 22
(5) Share-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 26, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Summary of Stock Option activity | Weighted Weighted Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Life (years) Value Outstanding at beginning of year 1,327,005 $ 1.63 Granted 168,500 $ 2.85 Exercised (119,200) $ 1.45 Forfeited Expired (18,000) $ 1.02 Outstanding at end of year 1,358,305 $ 1.80 5.96 $ 1,067,205 Options exercisable at year-end 1,003,005 $ 1.67 5.22 $ 874,105 |
Annualized weighted average values of significant assumptions of the options granted | 2015 2014 Risk-free interest rate 1.44-1.60% 0.91-2.16% Expected life in years 6-7 9 Expected volatility 50% 53% Expected dividend yield 0 0 Weighted average fair value of grants $ 1.41 $ 1.74 |
(6) Accrued Expenses (Tables)
(6) Accrued Expenses (Tables) | 12 Months Ended |
Dec. 26, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | 2015 2014 Accrued legal and accounting $ 101,000 $ 83,307 Accrued payroll and related 666,846 749,019 Accrued other 161,921 201,956 Accrued income tax payable 2,149 15,334 $ 931,916 $ 1,049,616 |
(8) Income Taxes (Tables)
(8) Income Taxes (Tables) | 12 Months Ended |
Dec. 26, 2015 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | 2015 2014 2013 Current Federal $ (2,286 ) $ 15,985 $ 33,777 State 456 1,011 456 Current income tax provision (benefit): (1,830 ) 16,996 34,233 Deferred: United States: Federal 168,371 200,926 379,574 State 7,691 226 48,900 Deferred income tax provision (benefit), net 176,062 201,152 428,474 Total $ 174,232 $ 218,148 $ 462,707 |
Deferred Tax Assets | December 26, 2015 December 27, 2014 Deferred Tax Assets: Net operating loss carryforwards $ $ 282,000 Stock compensation 553,000 459,000 Credit carryforwards 1,018,000 1,029,000 Inventory 424,000 363,000 Accrued liabilities 39,000 34,000 Depreciation 112,000 130,000 Other 5,000 3,000 Gross deferred tax assets 2,151,000 2,300,000 Valuation allowance Net deferred tax assets $ 2,151,000 $ 2,300,000 |
Summary of change in the deferred tax asset | 2015 2014 2013 Balance at beginning of year $ 2,300,465 $ 2,475,902 $ 2,786,973 Deferred tax (expense) benefit (149,716) (175,437) (311,071) Balance at end of year $ 2,150,749 $ 2,300,465 $ 2,475,902 |
Income tax rate schedule | 2015 2014 2013 Tax at statutory rate $ 212,000 $ 415,000 $ 486,000 State tax, net of federal benefit 450 1,000 33,000 Tax credits and other Permanent differences (38,450) (198,000) (56,000) Total $ 174,000 $ 218,000 $ 463,000 |
(11) Net Income Per Share (Tabl
(11) Net Income Per Share (Tables) | 12 Months Ended |
Dec. 26, 2015 | |
Earnings Per Share [Abstract] | |
Basic and Diluted net income per share calculations | For the years ended Dec. 26, Dec. 27, Dec. 28, 2015 2014 2013 Basic Computation: Numerator: Net income $ 450,619 $ 1,022,768 $ 966,455 Denominator: Weighted average common shares outstanding 13,180,428 13,096,183 12,985,107 Basic net income per share $ 0.03 $ 0.08 $ 0.07 Diluted Computation: Numerator: Net income $ 450,619 $ 1,002,768 $ 966,455 Denominator: Weighted average common shares outstanding 13,180,428 13,096,183 12, 985,107 Stock options 458,646 606,822 280,379 Total shares 13,639,074 13,703,005 13,265,486 Diluted net income per share $ 0.03 $ 0.07 $ 0.07 |
(12) Allowance for Doubtful A26
(12) Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 26, 2015 | |
Accounting Policies [Abstract] | |
Activity in allowance for doubtful account | 2015 2014 2013 Beginning balance $ 10,000 $ 10,000 $ 10,000 Provision for bad debt Charge-offs Ending balance $ 10,000 $ 10,000 $ 10,000 |
3) Inventories - Inventories (D
3) Inventories - Inventories (Details) - USD ($) | Dec. 26, 2015 | Dec. 27, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 670,318 | $ 464,243 |
Work in process | 970,598 | 998,209 |
Finished goods | 1,447,028 | 1,467,002 |
Gross Inventory | 3,087,944 | 2,929,454 |
Reserve for obsolescence | (455,500) | (400,500) |
Total | $ 2,632,444 | $ 2,528,954 |
(4) Leases and Commitments - Fu
(4) Leases and Commitments - Future minimum rental payments for operating leases (Details) | Dec. 26, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 235,200 |
2,017 | 166,200 |
2,018 | 152,400 |
2,019 | 25,400 |
Total | $ 579,200 |
(5) Share-Based Compensation 29
(5) Share-Based Compensation Plans - Summary of Stock Option activity (Details) | 12 Months Ended |
Dec. 26, 2015shares | |
Compensation and Retirement Disclosure [Abstract] | |
Outstanding at beginning of year | 1,327,005 |
Granted | 168,500 |
Exercised | 119,200 |
Forfeited | |
Expired | 18,000 |
Outstanding at end of year | 1,358,305 |
Options exercisable at year-end | 1,003,005 |
(5) Share-Based Compensation 30
(5) Share-Based Compensation Plans - Annualized weighted average values of significant assumptions of the options granted (Details) - $ / shares | 12 Months Ended | |
Dec. 26, 2015 | Dec. 27, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ||
Risk-free interest rate low | 1.44% | 0.91% |
Risk-free interest rate high | 1.60% | 2.16% |
Expected life in years - low | 6 years | 9 years |
Expected life in years - high | 7 years | 9 years |
Expected volatility | 0.50% | 0.53% |
Expected dividend yield | $ 0 | $ 0 |
Weighted average fair value of grants | $ 1.41 | $ 1.74 |
(5) Share-Based Compensation 31
(5) Share-Based Compensation Plans (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 26, 2015 | Dec. 27, 2014 | Dec. 28, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |||
Shares available for grant | 1,540,995 | ||
Options outstanding under the 1999 Plan | 4,000 | ||
Intrinsic value of options exercised | $ 141,520 | $ 330,773 | $ 310,170 |
Total unrecognized compensation expense | $ 343,479 | ||
Cash received from option exercises | 172,670 | $ 111,726 | $ 93,360 |
Compensation expense recognized | 283,507 | 348,649 | 248,535 |
Tax benefit from option exercises | $ 26,347 | $ 25,716 | $ 117,401 |
(6) Accrued Expenses - Schedule
(6) Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 26, 2015 | Dec. 27, 2014 |
Payables and Accruals [Abstract] | ||
Accrued Legal and Accounting | $ 101,000 | $ 83,307 |
Accrued payroll and related | 666,846 | 749,019 |
Accrued other | 161,921 | 201,956 |
Accrued income tax payable | 2,149 | 15,334 |
Total accrued expenses | $ 931,916 | $ 1,049,616 |
(6) Accrued Expenses (Details N
(6) Accrued Expenses (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 26, 2015 | Dec. 27, 2014 | |
Payables and Accruals [Abstract] | ||
401k company match accrual | $ 120 | $ 110 |
Incentive bonus accrual | $ 140 | $ 313 |