Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Mar. 06, 2017 | |
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. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | Yes | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 12,000,000 | |
Entity Common Stock, Shares Outstanding | 13,203,436 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 26, 2015 | |
Current assets: | ||
Cash and cash equivalents | $ 3,407,760 | $ 3,412,649 |
Accounts receivable-trade, net | 1,959,606 | 3,572,479 |
Inventories, net | 1,970,961 | 2,632,444 |
Prepaid expenses and other current assets | 88,443 | 104,761 |
Total current assets | 7,426,770 | 9,722,333 |
Property and equipment: | ||
Production equipment | 9,046,846 | 8,460,727 |
Furniture and office equipment | 412,412 | 409,793 |
Leasehold improvements | 886,582 | 854,215 |
Total cost | 10,345,840 | 9,724,735 |
Accumulated depreciation and amortization | (8,720,219) | (8,593,236) |
Construction in progress | 158,006 | 557,054 |
Net property and equipment | 1,783,627 | 1,688,553 |
Deferred taxes | 2,827,349 | 2,150,749 |
Total assets | 12,037,746 | 13,561,635 |
Current liabilities: | ||
Accounts payable | 662,482 | 1,622,564 |
Accrued expenses | 623,959 | 931,916 |
Total current liabilities | $ 1,286,441 | 2,554,480 |
Commitments (note 4) | (4) Leases and Commitments Capital Lease Obligations An equipment financing facility with Santander Bank (see note 7), agreed to in May 2016, allowed the Company to finance up to $500 thousand of eligible equipment. During 2016 the Company used none of this line and, as a result the Company had $500 thousand available remaining on the Santander lease line at year end. 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. Subsequently 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. 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 2016, the Company exercised its option to extend the lease through the end of February 2018. Future minimum rental payments over the terms of the lease agreements are approximately as follows: Fiscal year: 2017 $ 235,200 2018 166,200 2019 25,400 $ 426,800 | |
Stockholders Equity: | ||
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 13,423,492 and 13,412,292; outstanding 13,203,436 and 13,197,918 shares; at December 31, 2016 and December 26, 2015, respectively | $ 134,235 | 134,123 |
Additional paid-in capital | 35,452,685 | 35,245,030 |
Accumulated deficit | (24,318,562) | (23,864,945) |
Less cost of 220,056 and 214,374 common shares repurchased at December 31, 2016 and December 26, 2015, respectively | (517,053) | (507,053) |
Total stockholders equity | 10,751,305 | 11,007,155 |
Total liabilities and stockholders equity | $ 12,037,746 | $ 13,561,635 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 26, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, authorized | 20,000,000 | 20,000,000 |
Common stock, issued shares | 13,413,492 | 13,412,292 |
Common stock, outstanding shares | 13,203,436 | 13,197,918 |
Common stock, par value | $ .01 | $ .01 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 | |
Revenues: | |||
Product sales | $ 15,351,053 | $ 21,719,427 | $ 22,948,993 |
Research and development under cooperative agreement | 42,254 | 188,597 | |
Total revenues | 15,351,053 | 21,761,681 | 23,137,590 |
Cost of product sales | 13,195,501 | 17,061,720 | 17,510,556 |
Cost of research and development under cooperative agreement | 34,970 | 156,224 | |
Gross margin | 2,155,552 | 4,664,991 | 5,470,810 |
Selling, general, and administrative expenses | 3,336,631 | 4,045,834 | 4,254,977 |
Income (loss) from operations | (1,181,079) | 619,157 | 1,215,833 |
Other income | 51,318 | 5,694 | 5,083 |
Income (loss) before income tax | (1,129,761) | 624,851 | 1,220,916 |
Income tax provision (benefit) | (676,144) | 174,232 | 218,148 |
Net income (loss) | $ (453,617) | $ 450,619 | $ 1,002,768 |
Net income (loss) per basic common share | $ (0.03) | $ 0.03 | $ 0.08 |
Weighted average number of basic common shares outstanding | 13,201,284 | 13,180,428 | 13,096,183 |
Net income (loss) per diluted common share | $ (0.03) | $ 0.03 | $ 0.07 |
Weighted average number of diluted common shares outstanding | 13,201,284 | 13,639,074 | 13,703,005 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (453,617) | $ 450,619 | $ 1,002,768 |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||
Share-based compensation | 193,117 | 283,507 | 348,649 |
Depreciation and amortization | 550,761 | 545,673 | 576,745 |
Deferred taxes | (673,785) | 176,063 | 175,437 |
Excess tax benefit from stock options exercised | (2,815) | (26,347) | (25,716) |
Gain on sale of property and equipment | (40,000) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable trade, net | 1,612,873 | 16,712 | (688,734) |
Inventories | 661,483 | (103,490) | (345,255) |
Prepaid expenses and other current assets | 16,318 | 62,022 | 8,943 |
Accounts payable | (960,082) | 270,146 | 260,509 |
Accrued expenses | (307,957) | (117,700) | (31,481) |
Net cash provided by operating activities | 596,296 | 1,557,205 | 1,281,865 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (645,835) | (476,683) | (501,501) |
Proceeds from sale of property and equipment | 40,000 | ||
Net cash used by investing activities | (605,835) | (476,683) | (501,501) |
Cash flows from financing activities: | |||
Payment of capital lease obligations | (76,372) | ||
Excess tax benefit from stock options exercised | 2,815 | 26,347 | 25,716 |
Proceeds from issuance of common stock | 11,835 | 172,670 | 111,726 |
Repurchase of common stock | (10,000) | (172,470) | (106,908) |
Net cash provided (used) by financing activities | 4,650 | 26,547 | (45,838) |
Net increase (decrease) in cash and cash equivalents | (4,889) | 1,107,069 | 734,526 |
Cash and cash equivalents at beginning of year | 3,412,649 | 2,305,580 | 1,571,054 |
Cash and cash equivalents at end of year | 3,407,760 | 3,412,649 | 2,305,580 |
Supplemental cash flow information: | |||
Income taxes paid, net of refund | 436 | 12,005 | 34,706 |
Interest paid | $ 3,554 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Treasury Stock | Total |
Beginning balance, stockholders equity at Dec. 28, 2013 | $ 8,864,531 | ||||
Beginning balance, shares at Dec. 28, 2013 | 13,178,042 | ||||
Beginning balance, par value of 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 stocvk 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 | 283,508 | 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 stocvk 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 | ||||
Share-based compensation expense | 193,117 | 193,117 | 193,116 | ||
Tax benefit from exercise of stock options | 2,815 | 2,815 | 2,815 | ||
Repurchase of common stock | $ 10,000 | $ (10,000) | |||
Issuance of common stock pursuant to exercise of stock options | $ 11,724 | 11,835 | |||
Issuance of common stock pursuant to exercise of stocvk options, number of shares issued | 11,200 | ||||
Issuance of common stock pursuant to exercise of stock options, par value | $ 112 | ||||
Net Income | (453,617) | ||||
Ending balance, stockholders equity at Dec. 31, 2016 | $ 10,751,305 | ||||
Ending Balance, shares at Dec. 31, 2016 | 13,413,492 | ||||
Ending balance, par value shares issued at Dec. 31, 2016 | $ 134,235 |
(1) Nature of Business
(1) Nature of Business | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
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. 31, 2016 | |
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 31, 2016 and December 26, 2015, 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605 which establishes guidance in applying generally accepted accounting principles to revenue recognition in financial statements. ASC 605 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 2016 no costs were incurred as the contract expired March 31, 2015. 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. (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 (three of the last four years had operating profits), 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 global economic environment, 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 31 2016 and December 26, 2015, 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 31, 2016 or December 26, 2015 which required accrual or disclosure. Income tax effects related to share-based compensation that are in excess, or less than, 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 (Loss) Per Common Share Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by dividing net income (loss) 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) Reclassification Certain amounts in prior year’s financial statements have been reclassified to conform to the current year’s presentation. 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 adopted this new guidance in fiscal 2016 and as a result, 100% of the deferred tax asset is classifies as non-current for all periods presented. (2)(k) Other Recent Accounting Pronouncements In May 2014, the 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. In August 2015, the FASB modified ASU 2014-09 to be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and allows for either full retrospective or modified retrospective application, with early adoption is permitted for years beginning after December 15, 2016. Accordingly, the standard is effective for the Company for fiscal year 2018. 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 February 2016 the FASB issued ASU No. 2016-02, Leases. This update will be effective for fiscal years beginning after December 15, 2018. The standard will require the Company to put its operating leases on the balance sheet which will add assets and liabilities to its balance sheet. The Company is currently evaluating 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 2016 consisted of 53 weeks while 2015 and 2014 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 does not represent a separate business segment. |
(3) Inventories
(3) Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
(3) Inventories | (3) Inventories As of December 31, 2016 and December 26, 2015 inventories consisted of the following: 2016 2015 Raw materials $ 398,994 $ 670,318 Work in process 1,089,496 970,598 Finished goods 1,032,971 1,447,028 Gross Inventory 2,521,461 3,087,944 Reserve for obsolescence (550,500) (455,500) Total $ 1,970,961 $ 2,632,444 |
(4) Leases and Commitments
(4) Leases and Commitments | 12 Months Ended |
Dec. 31, 2016 | |
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 2016, allowed the Company to finance up to $500 thousand of eligible equipment. During 2016 the Company used none of this line and, as a result the Company had $500 thousand available remaining on the Santander lease line at year end. 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. Subsequently 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. 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 2016, the Company exercised its option to extend the lease through the end of February 2018. Future minimum rental payments over the terms of the lease agreements are approximately as follows: Fiscal year: 2017 $ 235,200 2018 166,200 2019 25,400 $ 426,800 |
(5) Share-Based Compensation Pl
(5) Share-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2016 | |
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 2,848,100 shares of common stock are available for issuance, of which 1,306,195 shares remain available for grant as of December 31, 2016. As of December 31, 2016, 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 31, 2016 there are 4,000 options outstanding under the 1999 Plan. A summary of stock option activity for all the above plans as of December 31, 2016 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 1,358,305 $ 1.80 Granted 274,000 $ 1.66 Exercised (11,200) $ 1.06 Forfeited (55,200) $ 1.61 Expired (8,000) $ 1.50 Outstanding at end of year 1,557,905 $ 1.79 5.8 $ 461,121 Options exercisable at year-end 1,088,605 $ 1.72 4.8 $ 336,173 The total intrinsic value of options exercised during fiscal years 2016, 2015 and 2014 was $19,592, $141,520 and $330,773, respectively. Cash received from option exercises under all share-based payment arrangements was $11,836, $172,670, and $111,726, for the years ended December 31, 2016, December 26, 2015 and December 27, 2014, 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 2016 and 2015: 2016 2015 Risk-free interest rate 1.39-1.53% 1.44-1.60% Expected life in years 6.3 6.3 Expected volatility 53% 50% Expected dividend yield 0 0 Weighted average fair value of grants $ .85 $ 1.41 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 $193,116, $283,507 and $348,649 as compensation expense related to total stock options outstanding in 2016, 2015 and 2014, respectively. As of December 31, 2016, there was $379,881 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plan; that cost is expected to be recognized over a weighted average period of 2.2 years. A tax benefit of $2,815, $26,347 and $25,716 was recognized as additional paid in capital in the years ended December 31, 2016, December 26, 2015 and December 27, 2014, 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. 31, 2016 | |
Payables and Accruals [Abstract] | |
(6) Accrued Expenses | (6) Accrued Expenses Accrued expenses at December 31, 2016 and December 26, 2015 consist of the following: 2016 2015 Accrued legal and accounting $ 87,690 $ 101,000 Accrued payroll and related 456,063 666,846 Accrued other 80,206 164,070 $ 623,959 $ 931,916 The accrued payroll and related expenses at December 31, 2016 and December 26, 2015 includes $0 and $120 thousand for 401k company match and $55 thousand and $140 thousand for incentive bonuses, respectively. |
(7) Revolving Line of Credit an
(7) Revolving Line of Credit and Lease Line | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
(7) Revolving Line of Credit and Lease Line | (7) Revolving Line of Credit and Lease Line 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 (3.75% at December 31, 2016) 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 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 31, 2016, the Company was in compliance with existing covenants. At December 31, 2016 and December 26, 2015, the Company had no borrowing under its lease line. As of December 31, 2016, the borrowing base at the time would have permitted borrowings of $994,000. |
(8) Income Taxes
(8) Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
(8) Income Taxes | (8) Income Taxes Components of income tax expense (benefit) for each year are as follows: 2016 2015 2014 Current Federal $ $ (2,286) $ 15,985 State 456 456 1,011 Current income tax provision (benefit): 456 (1,830) 16,996 Deferred: United States: Federal (526,922) 168,371 200,926 State (149,678) 7,691 226 Deferred income tax provision (benefit), net (676,600) 176,062 201,152 Total $ (676,144) $ 174,232 $ 218,148 Deferred tax assets as of December 31, 2016 and December 26, 2015 are as follows: December 31, 2016 December 26, 2015 Deferred Tax Assets: Net operating loss carryforwards $ 363,000 $ Stock compensation 628,000 553,000 Credit carryforwards 1,265,000 1,018,000 Inventory 369,000 424,000 Accrued liabilities 27,000 39,000 Depreciation 171,000 112,000 Other 4,000 5,000 Gross deferred tax assets 2,827,000 2,151,000 Valuation allowance Net deferred tax assets $ 2,827,000 $ 2,151,000 At December 31, 2016 the Company had net operating loss carryforwards of approximately $923,000 available to offset future income for U.S. Federal income tax purposes. At December 26, 2015 the Company had no operating loss carryforwards available. During 2015 the Company utilized all prior net operating loss carryforwards of $740,000. 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 i ncome to realize the tax benefits related to the remaining deferred tax assets. Current projections of future taxable income, including the reversal of temporary differences, reflect the Company’s belief that it has attractive growth opportunities and a favorable cost structure. These projections support the conclusion that the Company will generate taxable income sufficient to utilize the losses before they expire. A summary of the change in the deferred tax asset is as follows: 2016 2015 2014 Balance at beginning of year $ 2,150,749 $ 2,300,465 $ 2,475,902 Deferred tax (expense) benefit 676,600 (149,716) (175,437) Balance at end of year $ 2,827,349 $ 2,150,749 $ 2, 300,465 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: 2016 2015 2014 Tax at statutory rate $ 384,000 $ 212,000 $ 415,000 State tax, net of federal benefit 450 450 1,000 Net operating loss and credit carryforwards (249,450) (34,450) (190,000) Other (43,000) (4,000) (8,000) Total $ (676,000) $ 174,000 $ 218,000 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 2013 through 2016. |
(9) Retirement Savings Plan
(9) Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2016 | |
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 2016 the Company did not offer a 401k match. During 2015 and 2014 the Company offered a 401k match. The Company recognized $120,000 and $110,000 expense, in 2015 and 2014, respectively for the Company match. |
(10) Concentrations of Credit R
(10) Concentrations of Credit Risk, Significant Customers and Geographic Information | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
(10) Concentrations of Credit Risk, Significant Customers and 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, cash equivalents 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 2016, 2015 and 2014 were as follows: Percent of Total Revenues Significant Customer 2016 2015 2014 A 19 % 27 % 38 % B 20 % 23 % 21 % C 10 % 10 % 10 % As of December 31, 2016, the Company had trade accounts receivable due from these three customers that accounted for 41% of total trade accounts receivable as of that date. No other customer balances constitute 10% or more of accounts receivable at December 31, 2016. 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 2016, 2015, and 2014: Percent of Total Revenues Country 2016 2015 2014 United States of America 29 % 21 % 20 % Germany 38 % 50 % 59 % Other 33 % 29 % 21 % 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 71%, 79% and 80% of total revenue in 2016, 2015 and 2014, respectively. All of the Company’s long-lived assets and operations are located in the United States. |
(11) Net Income (Loss) Per Shar
(11) Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
(11) Net Income (Loss) Per Share | (11) Net Income (Loss) Per Share The following reconciles the basic and diluted net income (loss) per share calculations. For the years ended Dec. 31, Dec. 26, Dec. 27, 2016 2015 2014 Basic Computation: Numerator: Net income (loss) $ (453,617) $ 450,619 $ 1,002,768 Denominator: Weighted average common shares outstanding 13,201,284 13,180,428 13,096,183 Basic net income (loss) per share $ (0.03) $ 0.03 $ 0.08 Diluted Computation: Numerator: Net income (loss) $ (453,617) $ 450,619 $ 1,002,768 Denominator: Weighted average common shares outstanding 13,201,284 13,180,428 13,096,183 Stock options 458,646 606,822 Total shares 13,201,284 13,639,074 13,703,005 Diluted net income (loss) per share $ (0.03 ) $ 0.03 $ 0.07 |
(12) Allowance for Doubtful Acc
(12) Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
(12) Allowance for DoubtfulAccounts | (12) Allowance for Doubtful Accounts Activity in the allowance for doubtful account was as follows for fiscal years 2016, 2015, and 2014: 2016 2015 2014 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. 31, 2016 | |
Accounting Policies [Abstract] | |
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. |
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 31, 2016 and December 26, 2015, 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605 which establishes guidance in applying generally accepted accounting principles to revenue recognition in financial statements. ASC 605 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 2016 no costs were incurred as the contract expired March 31, 2015. 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. |
(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 (three of the last four years had operating profits), 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 global economic environment, 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 31 2016 and December 26, 2015, 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 31, 2016 or December 26, 2015 which required accrual or disclosure. Income tax effects related to share-based compensation that are in excess, or less than, 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 (Loss) Per Common Share | (2)(i) Net Income (Loss) Per Common Share Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by dividing net income (loss) 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) Reclassification | (2)(j) Reclassification Certain amounts in prior year’s financial statements have been reclassified to conform to the current year’s presentation. 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 adopted this new guidance in fiscal 2016 and as a result, 100% of the deferred tax asset is classifies as non-current for all periods presented. |
(2)(k) Other Recent Accounting Pronouncements | (2)(k) Other Recent Accounting Pronouncements In May 2014, the 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. In August 2015, the FASB modified ASU 2014-09 to be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and allows for either full retrospective or modified retrospective application, with early adoption is permitted for years beginning after December 15, 2016. Accordingly, the standard is effective for the Company for fiscal year 2018. 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 February 2016 the FASB issued ASU No. 2016-02, Leases. This update will be effective for fiscal years beginning after December 15, 2018. The standard will require the Company to put its operating leases on the balance sheet which will add assets and liabilities to its balance sheet. The Company is currently evaluating the impact that this guidance will have on its financial statements and related disclosures. |
Use of estimates in the preparation of financial statements | (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 2016 consisted of 53 weeks while 2015 and 2014 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 does not represent a separate business segment. |
(3) Inventories (Tables)
(3) Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 2016 2015 Raw materials $ 398,994 $ 670,318 Work in process 1,089,496 970,598 Finished goods 1,032,971 1,447,028 Gross Inventory 2,521,461 3,087,944 Reserve for obsolescence (550,500) (455,500) Total $ 1,970,961 $ 2,632,444 |
(4) Leases and Commitments (Tab
(4) Leases and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum rental payments of the lease agreements | 2017 $ 235,200 2018 166,200 2019 25,400 $ 426,800 |
(5) Share-Based Compensation 22
(5) Share-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Summary of stock option activity for all plans | Weighted Weighted Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Life (years) Value Outstanding at beginning of year 1,358,305 $ 1.80 Granted 274,000 $ 1.66 Exercised (11,200) $ 1.06 Forfeited (55,200) $ 1.61 Expired (8,000) $ 1.50 Outstanding at end of year 1,557,905 $ 1.79 5.8 $ 461,121 Options exercisable at year-end 1,088,605 $ 1.72 4.8 $ 336,173 |
Annualized weighted average valuesof the significant assumptions used to estimate the fair values of the options granted during 2016 and 2015 | 2016 2015 Risk-free interest rate 1.39-1.53% 1.44-1.60% Expected life in years 6.3 6.3 Expected volatility 53% 50% Expected dividend yield 0 0 Weighted average fair value of grants $ .85 $ 1.41 |
(6) Accrued Expenses (Tables)
(6) Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued expenses | 2016 2015 Accrued legal and accounting $ 87,690 $ 101,000 Accrued payroll and related 456,063 666,846 Accrued other 80,206 164,070 $ 623,959 $ 931,916 |
(8) Income Taxes (Tables)
(8) Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense (benefit) for each year | 2016 2015 2014 Current Federal $ $ (2,286) $ 15,985 State 456 456 1,011 Current income tax provision (benefit): 456 (1,830) 16,996 Deferred: United States: Federal (526,922) 168,371 200,926 State (149,678) 7,691 226 Deferred income tax provision (benefit), net (676,600) 176,062 201,152 Total $ (676,144) $ 174,232 $ 218,148 |
Deferred tax assets | December 31, 2016 December 26, 2015 Deferred Tax Assets: Net operating loss carryforwards $ 363,000 $ Stock compensation 628,000 553,000 Credit carryforwards 1,265,000 1,018,000 Inventory 369,000 424,000 Accrued liabilities 27,000 39,000 Depreciation 171,000 112,000 Other 4,000 5,000 Gross deferred tax assets 2,827,000 2,151,000 Valuation allowance Net deferred tax assets $ 2,827,000 $ 2,151,000 |
Summary of change in the deferred tax asset | 2016 2015 2014 Balance at beginning of year $ 2,150,749 $ 2,300,465 $ 2,475,902 Deferred tax (expense) benefit 676,600 (149,716) (175,437) Balance at end of year $ 2,827,349 $ 2,150,749 $ 2, 300,465 |
Income tax expense is different from the amounts computed by applying the US federal statutory oncome tax rate of 34 percent to pretax income as a result of the following | 2016 2015 2014 Tax at statutory rate $ 384,000 $ 212,000 $ 415,000 State tax, net of federal benefit 450 450 1,000 Net operating loss and credit carryforwards (249,450) (34,450) (190,000) Other (43,000) (4,000) (8,000) Total $ (676,000) $ 174,000 $ 218,000 |
(10) Concentrations of Credit25
(10) Concentrations of Credit Risk, Significant Customers and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant customer percent of revenues | Percent of Total Revenues Significant Customer 2016 2015 2014 A 19 % 27 % 38 % B 20 % 23 % 21 % C 10 % 10 % 10 % |
Revenues by location | Percent of Total Revenues Country 2016 2015 2014 United States of America 29 % 21 % 20 % Germany 38 % 50 % 59 % Other 33 % 29 % 21 % |
(11) Net Income (Loss) Per Sh26
(11) Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
BAsic and Diluted net income (loss) per share calculations | For the years ended Dec. 31, Dec. 26, Dec. 27, 2016 2015 2014 Basic Computation: Numerator: Net income (loss) $ (453,617) $ 450,619 $ 1,002,768 Denominator: Weighted average common shares outstanding 13,201,284 13,180,428 13,096,183 Basic net income (loss) per share $ (0.03) $ 0.03 $ 0.08 Diluted Computation: Numerator: Net income (loss) $ (453,617) $ 450,619 $ 1,002,768 Denominator: Weighted average common shares outstanding 13,201,284 13,180,428 13,096,183 Stock options 458,646 606,822 Total shares 13,201,284 13,639,074 13,703,005 Diluted net income (loss) per share $ (0.03 ) $ 0.03 $ 0.07 |
(3) Inventories - Inventories (
(3) Inventories - Inventories (Details) - USD ($) | Dec. 31, 2016 | Dec. 26, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 398,994 | $ 670,318 |
Work in process | 1,089,496 | 970,598 |
Finished goods | 1,032,971 | 1,447,028 |
Gross Inventory | 2,521,461 | 3,087,944 |
Reserve for obsolescence | (550,500) | (455,500) |
Total | $ 1,970,961 | $ 2,632,444 |
(4) Leases and Commitments - Fu
(4) Leases and Commitments - Future minimum rental payments of the lease agreements (Details) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 235,200 |
2,018 | 166,200 |
2,019 | 25,400 |
Total | $ 426,800 |
(5) Share-Based Compensation 29
(5) Share-Based Compensation Plans - Summary of stock option activity for all plans (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Compensation and Retirement Disclosure [Abstract] | |
Outstanding at beginning of year | 1,358,305 |
Granted | 274,000 |
Exercised | (11,200) |
Forfeited | $ / shares | $ (55,200) |
Expired | (8,000) |
Outstanding at end of year | 1,557,905 |
Options exercisable at year-end | 1,088,605 |
(5) Share-Based Compensation 30
(5) Share-Based Compensation Plans - Annualized weighted average valuesof the significant assumptions used to estimate the fair values of the options granted during 2016 and 2015 (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 26, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Risk-free interest rate -Low | 1.39% | 1.44% |
Risk-free interest rate -High | 1.53% | 1.60% |
Expected life in years | 6 years | 6 years |
Expected volatility | 0.53% | 0.50% |
Expected dividend yield | $ 0 | $ 0 |
Weighted average fair value of grants | $ .85 | $ 1.41 |
(6) Accrued Expenses - Accrued
(6) Accrued Expenses - Accrued expenses (Details) - USD ($) | Dec. 31, 2016 | Dec. 26, 2015 |
Payables and Accruals [Abstract] | ||
Accrued legal and accounting | $ 87,690 | $ 101,000 |
Accrued payroll and related | 456,063 | 666,846 |
Accrued other | 80,206 | 164,070 |
Total | $ 623,959 | $ 931,916 |
(8) Income Taxes - Components o
(8) Income Taxes - Components of income tax expense (benefit) for each year (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 | |
Current | |||
Federal | $ (2,286) | $ 15,985 | |
State | 456 | 456 | 1,011 |
Current income tax provision (benefit): | 456 | (1,830) | 16,996 |
Deferred: | |||
Federal | (526,922) | 168,371 | 200,926 |
State | (149,678) | 7,691 | 226 |
Deferred income tax provision (benefit), net | (676,600) | 176,062 | 201,152 |
Total | $ (676,144) | $ 174,232 | $ 218,148 |
(8) Income Taxes - Deferred tax
(8) Income Taxes - Deferred tax assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 26, 2015 |
Deferred Tax Assets: | ||
Net operating loss carryforwards | $ 363,000 | |
Stock compensation | 628,000 | 553,000 |
Credit carryforwards | 1,265,000 | 1,018,000 |
Inventory | 369,000 | 424,000 |
Accrued liabilities | 27,000 | 39,000 |
Depreciation | 171,000 | 112,000 |
Other | 4,000 | 5,000 |
Gross deferred tax assets | 2,827,000 | 2,151,000 |
Valuation allowance | ||
Net deferred tax assets | $ 2,827,000 | $ 2,151,000 |
(8) Income Taxes - Summary of c
(8) Income Taxes - Summary of change in the deferred tax asset (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of year | $ 2,150,749 | $ 2,300,465 | $ 2,475,902 |
Deferred tax (expense) benefit | 676,600 | (149,716) | (175,437) |
Balance at end of year | $ 2,827,349 | $ 2,150,749 | $ 2,300,465 |
(10) Concentrations of Credit35
(10) Concentrations of Credit Risk, Significant Customers and Geographic Information - Revenues by location (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 | |
Percent of total revenues by Country | |||
United States of America | 0.29% | 0.21% | 0.20% |
Germany | 0.38% | 0.50% | 0.59% |
Other | 0.33% | 0.29% | 0.21% |
(11) Net Income (Loss) Per Sh36
(11) Net Income (Loss) Per Share - Basic and Diluted net income (loss) per share calculations (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 | |
Basic Computation: | |||
Net income (loss) | $ (453,617) | $ 450,619 | $ 1,002,768 |
Weighted average common shares outstanding | 13,201,284 | 13,180,428 | 13,096,183 |
Basic net income (loss) per share | $ (0.03) | $ 0.03 | $ 0.08 |
Diluted Computation: | |||
Net income (loss) | $ (453,617) | $ 450,619 | $ 1,002,768 |
Weighted average common shares outstanding | 13,201,284 | 13,180,428 | 13,096,183 |
Stock options | $ 458,646 | $ 606,822 | |
Total shares | 13,201,284 | 13,639,074 | 13,703,005 |
Diluted net income (loss) per share | $ (0.03) | $ 0.03 | $ 0.07 |
(5) Share-Based Compensation 37
(5) Share-Based Compensation Plans (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Shares available for grant | 1,306,195 | ||
Options outstanding under the 1999 Plan | 4,000 | ||
Intrinsic value of options exercised in the period | $ 19,592 | $ 141,520 | $ 330,773 |
Cash received from option exercises | $ 11,836 | $ 172,670 | $ 111,726 |
Compensation expense recognized | 193,116 | 283,507 | 348,649 |
Total unrecognized compensation expense | 379,881 | ||
Tax benefit from option exercises | $ 2,815 | $ 26,347 | $ 25,716 |
(9) Retirement Savings Plan (De
(9) Retirement Savings Plan (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Expense recognized for 401k Company match | $ 0 | $ 120,000 | $ 110,000 |