Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Jul. 02, 2016 | Aug. 05, 2016 | |
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 | Jul. 2, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 | $ 11,000,000 | |
Entity Common Stock, Shares Outstanding | 13,203,436 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Jul. 02, 2016 | Dec. 26, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 3,574,227 | $ 3,412,649 |
Accounts receivable-trade, net | 2,499,056 | 3,572,479 |
Inventories, net | 2,414,875 | 2,632,444 |
Prepaid expenses and other current assets | 134,641 | 104,761 |
Deferred taxes | 510,288 | 467,374 |
Total current assets | 9,133,087 | 10,189,707 |
Property and equipment: | ||
Production equipment | 8,503,402 | 8,460,727 |
Furniture and office equipment | 410,841 | 409,793 |
Leasehold improvements | 854,215 | 854,215 |
Total cost | 9,768,458 | 9,724,735 |
Accumulated depreciation and amortization | (8,819,418) | (8,593,236) |
Construction in progress | 925,280 | 557,054 |
Net property and equipment | 1,874,320 | 1,688,553 |
Deferred taxes, non-current portion | 1,683,375 | 1,683,375 |
Total assets | 12,690,782 | 13,561,635 |
Current liabilities: | ||
Accounts payable | 913,644 | 1,622,564 |
Accrued expenses | 710,859 | 931,916 |
Total current liabilities | 1,624,503 | 2,554,480 |
Stockholders` equity: | ||
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 13,423,492 and 13,412,292 shares; outstanding 13,203,436 and 13,197,918 shares; at July 2, 2016 and December 26, 2015, respectively | 134,235 | 134,123 |
Additional paid-in capital | 35,375,652 | 35,245,030 |
Accumulated deficit | (23,926,555) | (23,864,945) |
Less cost of 220,056 and 214,374 common shares repurchased at July 2, 2016 and December 26, 2015, respectively | (517,053) | (507,053) |
Total stockholders` equity | 11,066,279 | 11,007,155 |
Total liabilities and stockholders` equity | $ 12,690,782 | $ 13,561,635 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jul. 02, 2016 | Dec. 26, 2015 |
Statement of Financial Position [Abstract] | ||
Common Stock, authorized | 20,000,000 | 20,000,000 |
Common Stock, issued shares | 13,423,492 | 13,412,292 |
Common Stock, outstanding shares | 13,203,436 | 13,197,918 |
Common Stock, par value | $ .01 | $ .01 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2016 | Mar. 28, 2015 | Jul. 02, 2016 | Jun. 27, 2015 | |
Revenues: | ||||
Product sales | $ 3,934,995 | $ 5,635,889 | $ 9,150,612 | $ 10,883,901 |
Research and development under cooperative agreement | 42,254 | |||
Total revenues | 3,934,995 | 5,635,889 | 9,150,612 | 10,926,155 |
Cost of product sales | 3,374,078 | 4,336,853 | 7,458,138 | 8,456,784 |
Cost of research and development under cooperative agreement | 34,970 | |||
Gross Margin | 560,917 | 1,299,036 | 1,692,474 | 2,434,401 |
Selling, general, and administrative | 892,477 | 1,112,295 | 1,800,646 | 2,125,133 |
Operating income (loss) | (331,560) | 186,741 | (108,172) | 309,268 |
Interest income (expense), net | 2,722 | 851 | 6,462 | 851 |
Net income (loss) before income tax expense (benefit) | (328,838) | 187,652 | (101,710) | 310,119 |
Income tax expense (benefit) | (70,100) | 73,760 | (40,100) | 122,500 |
Net income (loss) | $ (258,738) | $ 113,832 | $ (61,610) | $ 187,619 |
Net income (loss) per basic common share | $ (0.02) | $ 0.01 | $ 0 | $ 0.01 |
Weighted average number of basic common shares outstanding | 13,200,269 | 13,178,297 | 13,199,210 | 13,162,984 |
Net income (loss) per diluted common share | $ (0.02) | $ 0.01 | $ 0 | $ 0.01 |
Weighted average number of diluted common shares outstanding | 13,200,269 | 13,627,346 | 13,199,210 | 13,679,355 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jul. 02, 2016 | Jun. 27, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (61,610) | $ 187,619 |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 271,360 | 288,471 |
Share-based compensation | 116,085 | 142,074 |
Deferred taxes | (40,100) | 122,500 |
Excess tax benefit from stock options exercised | (2,814) | (49,379) |
Changes in: | ||
Accounts receivable-trade, net | 1,073,423 | (251,206) |
Inventories | 217,569 | (271,958) |
Prepaid expenses and other current assets | (29,880) | 75,246 |
Accounts payable | (708,920) | 454,016 |
Accrued expenses | (221,057) | (128,622) |
Net cash provided by operating activities | 614,054 | 568,762 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (457,127) | (170,652) |
Net cash used in investing activities | (457,127) | (170,652) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 11,835 | 163,490 |
Excess tax benefit from stock options exercised | 2,814 | 49,379 |
Repurchase of common stock | (10,000) | (163,290) |
Net cash provided by financing activities | 4,649 | 49,579 |
Net increase in cash and cash equivalents | 161,578 | 447,689 |
Cash and cash equivalents at beginning of period | 3,412,649 | |
Cash and cash equivalents at end of period | 3,574,227 | 2,753,269 |
Supplemental cash flow information: | ||
Cash paid for taxes | $ 8,000 | $ 15,456 |
(1) Nature of Business
(1) Nature of Business | 6 Months Ended |
Jul. 02, 2016 | |
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 | 6 Months Ended |
Jul. 02, 2016 | |
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 26, 2015 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 26, 2015 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 |
Jul. 02, 2016 | |
Earnings Per Share [Abstract] | |
(3) Net Income Per Common and Common Equivalent Share | (3) Net Income Per Common and Common Equivalent Share Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares plus additional common shares that would have been outstanding if potential dilutive common shares had been issued for granted stock options and stock purchase rights. Common stock equivalents are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive. The following table presents the calculation of both basic and diluted earnings per share (EPS): Three Months Ended Six Months Ended July 2, June 27, July 2, June 27, 2016 2015 2016 2015 Basic EPS Computation: Numerator: Net income (loss) $ (258,738) $ 113,832 $ (61,610) $ 187,619 Denominator: Weighted average Common shares Outstanding 13,200,269 13,178,297 13,199,210 13,162,984 Basic EPS $ (0.02) $ 0.01 $ (0.00) $ 0.01 Diluted EPS Computation: Numerator: Net income (loss) $ (258,738) $ 113,832 $ (61,610) $ 187,619 Denominator: Weighted average Common shares Outstanding 13,200,269 13,178,297 13,199,210 13,162,984 Dilutive effect of stock options 449,049 516,371 Total Shares 13,200,269 13,627,346 13,199,210 13,679,355 Diluted EPS $ (0.02) $ 0.01 $ (0.00) $ 0.01 |
(4) Share-Based Payments
(4) Share-Based Payments | 6 Months Ended |
Jul. 02, 2016 | |
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 July 2, 2016 or June 27, 2015. During the quarters ended July 2, 2016 and June 27, 2015 the Company issued 10,000 and 71,500 shares, respectively, as a result of option exercises. No stock options expired during the quarters ended July 2, 2016 or June 27, 2015. During the quarter ended July 2, 2016 and June 27, 2015 the Company repurchased 5,682 and 40,678 shares, respectively, from employees to facilitate their exercise of stock options. During the three and six months ended July 2, 2016, the Company recognized $37,473 and $116,085, respectively, as shared-based compensation expense related to previously granted shares under the Plan. A tax benefit of $2,757 and $2,814 was recognized as additional paid in capital in the three and six months ended July 2, 2016, respectively, resulting from the excess tax benefit of option exercises. 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. |
(5) Inventories
(5) Inventories | 6 Months Ended |
Jul. 02, 2016 | |
Inventory Disclosure [Abstract] | |
(5) Inventories | (5) Inventories Inventories consist of the following: July 2, December 26, 2016 2015 Raw materials $ 603,507 $ 670,318 Work in process 1,316,888 970,598 Finished goods 959,980 1,447,028 Total inventory 2,880,375 3,087,944 Reserve for obsolescence (465,500) (455,500) Inventories, net $ 2,414,875 $ 2,632,444 |
(6) Accrued Expenses
(6) Accrued Expenses | 6 Months Ended |
Jul. 02, 2016 | |
Payables and Accruals [Abstract] | |
(6) Accrued Expenses | (6) Accrued Expenses Accrued expenses consist of the following: July 2, December 26, 2016 2015 Accrued legal and accounting $ 65,324 $ 101,000 Accrued payroll 504,834 666,846 Accrued other 140,701 164,070 $ 710,859 $ 931,916 |
(7) Line of Credit and Equipmen
(7) Line of Credit and Equipment Lease Facility Agreements | 6 Months Ended |
Jul. 02, 2016 | |
Debt Disclosure [Abstract] | |
(7) Line of Credit and Equipment Lease Facility Agreements | (7) Line of Credit and Equipment Lease Facility Agreements In early May 2016, 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 2017. 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 July 2, 2016, the Company was in compliance with all existing covenants. At July 2, 2016, the Company had not utilized the equipment finance facility and therefore had $500 thousand available. Also, at July 2, 2016 the Company had no borrowings under this LOC and its borrowing base at the time would have permitted an additional $1.2 million to have been borrowed. |
(8) Income Taxes
(8) Income Taxes | 6 Months Ended |
Jul. 02, 2016 | |
Income Tax Disclosure [Abstract] | |
(8) Income Taxes | (8) Income Taxes The Company has a current and non-current deferred tax asset aggregating $2,193,663 and $2,150,749 on the Companys balance sheet at July 2, 2016 and December 26, 2015, 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. During 2015, all remaining net operating loss carryforwards were utilized in full. The Company recorded a tax benefit of $68 thousand and $31 thousand for federal income taxes and a tax benefit of $2 thousand and $9 thousand for state income taxes during the three and six months ended July 2, 2016, respectively. The Company recorded a tax expense of $58 thousand and $95 thousand for federal income taxes and a tax expense of $16 thousand and $27 thousand for state income taxes during the three and six months ended June 27, 2015, respectively. |
(9) Commitments
(9) Commitments | 6 Months Ended |
Jul. 02, 2016 | |
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 2016 this lease was amended to extend the lease to February 28, 2017. As part of the agreement the Company obtained two, one-year options which enabled it to continue to lease through February 28, 2019. In June 2016 the Company exercised the option to extend the lease through February 28, 2018. 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 2015, the Company exercised its option to extend the lease through the end of February 2017. |
(3) Net Income Per Common and15
(3) Net Income Per Common and Common Equivalent Share (Tables) | 6 Months Ended |
Jul. 02, 2016 | |
Earnings Per Share [Abstract] | |
Calculation fo both basic and diluted earnings per share ("EPS") | Three Months Ended Six Months Ended July 2, June 27, July 2, June 27, 2016 2015 2016 2015 Basic EPS Computation: Numerator: Net income (loss) $ (258,738) $ 113,832 $ (61,610) $ 187,619 Denominator: Weighted average Common shares Outstanding 13,200,269 13,178,297 13,199,210 13,162,984 Basic EPS $ (0.02) $ 0.01 $ (0.00) $ 0.01 Diluted EPS Computation: Numerator: Net income (loss) $ (258,738) $ 113,832 $ (61,610) $ 187,619 Denominator: Weighted average Common shares Outstanding 13,200,269 13,178,297 13,199,210 13,162,984 Dilutive effect of stock options 449,049 516,371 Total Shares 13,200,269 13,627,346 13,199,210 13,679,355 Diluted EPS $ (0.02) $ 0.01 $ (0.00) $ 0.01 |
(5) Inventories (Tables)
(5) Inventories (Tables) | 6 Months Ended |
Jul. 02, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | July 2, December 26, 2016 2015 Raw materials $ 603,507 $ 670,318 Work in process 1,316,888 970,598 Finished goods 959,980 1,447,028 Total inventory 2,880,375 3,087,944 Reserve for obsolescence (465,500) (455,500) Inventories, net $ 2,414,875 $ 2,632,444 |
(6) Accrued Expenses (Tables)
(6) Accrued Expenses (Tables) | 6 Months Ended |
Jul. 02, 2016 | |
Payables and Accruals [Abstract] | |
Accrued expenses consist of | July 2, December 26, 2016 2015 Accrued legal and accounting $ 65,324 $ 101,000 Accrued payroll 504,834 666,846 Accrued other 140,701 164,070 $ 710,859 $ 931,916 |
(3) Net Income Per Common and18
(3) Net Income Per Common and Common Equivalent Share - Calculation fo both basic and diluted earnings per share ("EPS") (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jul. 02, 2016 | Apr. 02, 2016 | Jun. 27, 2015 | Mar. 28, 2015 | Jul. 02, 2016 | Jun. 27, 2015 | |
Basic EPS Computation: | ||||||
Net income (loss) | $ (258,738) | $ (258,738) | $ 113,832 | $ 113,832 | $ (61,610) | $ 187,619 |
Weighted average Common shares Outstanding | 13,200,269 | 13,200,269 | 13,178,297 | 13,178,297 | 13,199,210 | 13,162,984 |
Basic EPS | $ (0.02) | $ (0.02) | $ 0.01 | $ 0.01 | $ 0 | $ 0.01 |
Diluted EPS Computation: | ||||||
Net income (loss) | $ (258,738) | $ (258,738) | $ 113,832 | $ 113,832 | $ (61,610) | $ 187,619 |
Weighted average Common shares Outstanding | 13,200,269 | 13,200,269 | 13,178,297 | 13,178,297 | 13,199,210 | 13,162,984 |
Dilutive effect of stock options | $ 449,049 | $ 516,371 | ||||
Total Shares | 13,200,269 | 13,200,269 | 13,627,346 | 13,627,346 | 13,199,210 | 13,679,355 |
Diluted EPS | $ (0.02) | $ (0.02) | $ 0.01 | $ 0.01 | $ 0 | $ 0.01 |
(4) Share-Based Payments (Detai
(4) Share-Based Payments (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2016 | Jun. 27, 2015 | Jul. 02, 2016 | Jun. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Shares issued as a result of option exercises | 10,000 | 71,500 | ||
Shares repurchased from employees to facilitate exercise | 5,682 | 40,678 | ||
Share-based compensation expense recognized during the period | $ 37,473 | $ 75,727 | $ 116,085 | $ 142,074 |
Tax benefit from the excess tax benefit of option exercises | $ 2,757 | $ 27,879 | $ 2,814 | $ 49,379 |
(5) Inventories - Inventories (
(5) Inventories - Inventories (Details) - USD ($) | Jul. 02, 2016 | Dec. 26, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 603,507 | $ 670,318 |
Work in process | 1,316,888 | 970,598 |
Finished goods | 959,980 | 1,447,028 |
Total inventory | 2,880,375 | 3,087,944 |
Reserve for obsolescence | (465,500) | (455,500) |
Inventories, net | $ 2,414,875 | $ 2,632,444 |
(6) Accrued Expenses - Accrued
(6) Accrued Expenses - Accrued expenses consist of (Details) - USD ($) | Jul. 02, 2016 | Dec. 26, 2015 |
Payables and Accruals [Abstract] | ||
Accrued legal and accounting | $ 65,324 | $ 101,000 |
Accrued payroll | 504,834 | 666,846 |
Accrued other | 140,701 | 164,070 |
Total accrued expenses | $ 710,859 | $ 931,916 |
(8) Income Taxes (Details Narra
(8) Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2016 | Jun. 27, 2015 | Jul. 02, 2016 | Jun. 27, 2015 | Dec. 26, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Current and Non-current deferred tax asset | $ 2,193,663 | $ 2,193,663 | $ 2,150,749 | ||
Federal income tax expense (benefit) ($ in 000's) | 68 | $ 58 | 31 | $ 95 | |
State income tax expense (benefit) ($ in 000's) | $ 2 | $ 16 | $ 9 | $ 27 |