Document and Entity Information
Document and Entity Information - USD ($) | 3 Months Ended | |
Apr. 01, 2017 | May 10, 2017 | |
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 | Apr. 1, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-30 | |
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 | $ 10,100,000 | |
Entity Common Stock, Shares Outstanding | 13,203,436 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Apr. 01, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 2,875,613 | $ 3,407,760 |
Accounts receivable-trade, net | 1,753,119 | 1,959,606 |
Inventories, net | 1,947,851 | 1,970,961 |
Prepaid expenses and other current assets | 124,827 | 88,443 |
Total current assets | 6,701,410 | 7,426,770 |
Property and equipment: | ||
Production equipment | 9,046,846 | 9,046,846 |
Furniture and office equipment | 412,412 | 412,412 |
Leasehold improvements | 886,582 | 886,582 |
Total cost | 10,345,840 | 10,345,840 |
Accumulated depreciation and amortization | (8,861,595) | (8,720,219) |
Construction in progress | 191,265 | 158,006 |
Net property and equipment | 1,675,510 | 1,783,627 |
Deferred taxes | 3,274,141 | 2,827,349 |
Total Assets | 11,651,061 | 12,037,746 |
Current liabilities: | ||
Accounts payable | 884,420 | 662,482 |
Accrued expenses | 545,325 | 623,959 |
Total current liabilities | 1,429,745 | 1,286,441 |
Stockholders equity: | ||
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 13,423,492 shares; outstanding 13,203,436; at April 1, 2017 and December 31, 2016, | 134,235 | 134,235 |
Additional paid-in capital | 35,527,098 | 35,452,685 |
Accumulated deficit | (24,922,964) | (24,318,562) |
Less cost of 220,056 common shares repurchased at April 1, 2017 and December 31, 2016 | (517,053) | (517,053) |
Total stockholders equity | 10,221,316 | 10,751,305 |
Total liabilities and stockholders equity | $ 11,651,061 | $ 12,037,746 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Apr. 01, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, authorized shares | 20,000,000 | 20,000,000 |
Common stock, issued shares | 13,423,492 | 13,423,492 |
Common stock, outstanding shares | 13,203,436 | 13,203,436 |
Common stock, par value | $ .01 | $ .01 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Revenues: | ||
Product sales | $ 2,845,299 | $ 5,215,617 |
Total revenues | 2,845,299 | 5,215,617 |
Cost of product sales | 2,925,691 | 4,084,060 |
Gross Margin | (80,392) | 1,131,557 |
Selling, general, and administrative expense | 973,430 | 908,169 |
Income (loss) from operations | (1,053,822) | 223,388 |
Other income, net | 2,628 | 3,740 |
Income (loss) before taxes | (1,051,194) | 227,128 |
Income tax provision (benefit) | (446,792) | 30,000 |
Net income (loss) | $ (604,402) | $ 197,128 |
Net income (loss) per basic common share | $ (0.05) | $ 0.01 |
Weighted average number of basic common shares outstanding | 13,203,436 | 13,198,236 |
Net income (loss) per diluted common share | $ (0.05) | $ 0.01 |
Weighted average number of diluted common shares outstanding | 13,203,436 | 13,503,656 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (604,402) | $ 197,128 |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 141,376 | 135,264 |
Share-based compensation | 74,413 | 78,612 |
Deferred taxes | (446,792) | 30,000 |
Excess tax benefit from stock options exercised | (57) | |
Changes in: | ||
Accounts receivable-trade | 206,487 | 871,033 |
Inventories | 23,110 | 5,745 |
Prepaid expenses and other current assets | (36,384) | (41,922) |
Accounts payable | 221,938 | (260,456) |
Accrued expenses | (78,634) | (353,242) |
Net cash provided by (used in) operating activities | (498,888) | 662,105 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (33,259) | (366,987) |
Net cash used in investing activities | (33,259) | (366,987) |
Cash flows from financing activities: | ||
Excess tax benefit from stock options exercised | 57 | |
Proceeds from issuance of common stock | 1,836 | |
Net cash provided by financing activities | 1,893 | |
Net increase (decrease) in cash and cash equivalents | (532,147) | 297,011 |
Cash and cash equivalents at beginning of period | 3,407,760 | 3,412,649 |
Cash and cash equivalents at end of period | 2,875,613 | 3,709,660 |
Supplemental cash flow information: | ||
Cash paid for taxes, net of refunds | $ 8,000 |
(1) Nature of Business
(1) Nature of Business | 3 Months Ended |
Apr. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
(1) Nature of Business | (1) Nature of Business CPS Technologies Corporation (the “Company” or “CPS”) provides advanced material solutions to the electronics, power generation, automotive and other industries. The Company’s 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 | 3 Months Ended |
Apr. 01, 2017 | |
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 Company’s balance sheet at December 31, 2016 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 Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. |
(3) Net Income (Loss) Per Commo
(3) Net Income (Loss) Per Common and Common Equivalent Share | 3 Months Ended |
Apr. 01, 2017 | |
Notes to Financial Statements | |
(3) Net Income (Loss) Per Common and Common Equivalent Share | (3) Net Income (Loss) Per Common and Common Equivalent 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 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”): For periods ended April 1, April 2, 2017 2016 Basic EPS Computation: Numerator: Net income (loss) $ (604,402) $ 197,128 Denominator: Weighted average common shares Outstanding 13,203,436 13,198,236 Basic EPS $ (0.05) $ 0.01 Diluted EPS Computation: Numerator: Net income (loss) $ (604,402) $ 197,128 Denominator: Weighted average common shares Outstanding 13,203,436 13,198,236 Dilutive effect stock options — 305,420 Total Shares 13,203,436 13,503,656 Diluted EPS $ (0.05) $ 0.01 |
(4) Share-Based Payments
(4) Share-Based Payments | 3 Months Ended |
Apr. 01, 2017 | |
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. During the quarters ended April 1, 2017 and April 2, 2016 a total of 122,500 and 129,000 stock options, respectively, were granted to employees under the Company’s 2009 Stock Incentive Plan (the “Plan) and a total of 45,000 stock options were granted to outside directors, respectively. During the quarter ended April 1, 2017 there were no shares issued. During the quarter ended April 2, 2016 the Company issued 1,200 shares of common stock as a result of employee option exercises. As of April 1, 2017, there was $443 thousand 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 2.46 years. During the quarters ended April 1, 2017 and April 2, 2016, the Company recognized approximately $74 thousand and $79 thousand, respectively, as shared-based compensation expense related to previously granted shares under the Plan. |
(5) Inventories
(5) Inventories | 3 Months Ended |
Apr. 01, 2017 | |
Inventory Disclosure [Abstract] | |
(5) Inventories | (5) Inventories Inventories consist of the following: April 1, December 31, 2017 2016 Raw materials $ 360,450 $ 398,994 Work in process 1,082,074 1,089,496 Finished goods 1,041,492 1,032,971 Gross inventory 2,484,016 2,521,461 Reserve for obsolescence (536,165) (550,500) Inventories, net $ 1,947,851 $ 1,970,961 |
(6) Accrued Expenses
(6) Accrued Expenses | 3 Months Ended |
Apr. 01, 2017 | |
Payables and Accruals [Abstract] | |
(6) Accrued Expenses | (6) Accrued Expenses Accrued expenses consist of the following: April 1, December 31, 2017 2016 Accrued legal and accounting $ 132,617 $ 87,690 Accrued payroll and related expenses 338,485 456,063 Accrued other 74,223 80,206 Total Accrued Expenses $ 545,325 $ 623,959 |
(7) Income Taxes
(7) Income Taxes | 3 Months Ended |
Apr. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
(7) Income Taxes | (7) Income Taxes In 2016, the Company adopted ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes A valuation allowance against deferred tax assets is required to be established or maintained when it is "more likely than not" that all or a portion of deferred tax assets will not be realized. The Company believes that it will generate sufficient future taxable income to realize the tax benefits related to the remaining deferred tax assets and as such no valuation allowance has been provided against the deferred tax asset. The Company recorded a tax benefit of $348 thousand for federal income taxes and a tax benefit of $99 thousand for state income taxes during the quarter ended April 1, 2017. The Company recorded a tax expense of $37 thousand for federal taxes and a tax benefit of $7 thousand for state income taxes during the quarter ended April 2, 2016. |
(8) Commitments
(8) Commitments | 3 Months Ended |
Apr. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
(8) Commitments | (8) 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 June 2016 this lease was amended to extended the lease to February 28, 2018. In addition the Company has an option to extend the lease through February 28, 2019. The lease is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to buy the property and a first right of refusal during the term of the lease. Annual rental payments in 2017 are expected to approximate $152 thousand. 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 2016, the Company exercised its option to extend the lease through the end of February 2018. Annual rental payments in 2017 are expected to approximate $83 thousand. |
(3) Net Income (Loss) Per Com14
(3) Net Income (Loss) Per Common and Common Equivalent Share (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Notes to Financial Statements | |
Calculation of both basic and diluted earnings per share ("EPS") | For periods ended April 1, April 2, 2017 2016 Basic EPS Computation: Numerator: Net income (loss) $ (604,402) $ 197,128 Denominator: Weighted average common shares Outstanding 13,203,436 13,198,236 Basic EPS $ (0.05) $ 0.01 Diluted EPS Computation: Numerator: Net income (loss) $ (604,402) $ 197,128 Denominator: Weighted average common shares Outstanding 13,203,436 13,198,236 Dilutive effect stock options — 305,420 Total Shares 13,203,436 13,503,656 Diluted EPS $ (0.05) $ 0.01 |
(5) Inventories (Tables)
(5) Inventories (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | April 1, December 31, 2017 2016 Raw materials $ 360,450 $ 398,994 Work in process 1,082,074 1,089,496 Finished goods 1,041,492 1,032,971 Gross inventory 2,484,016 2,521,461 Reserve for obsolescence (536,165) (550,500) Inventories, net $ 1,947,851 $ 1,970,961 |
(6) Accrued Expenses (Tables)
(6) Accrued Expenses (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Payables and Accruals [Abstract] | |
Accrued expenses | April 1, December 31, 2017 2016 Accrued legal and accounting $ 132,617 $ 87,690 Accrued payroll and related expenses 338,485 456,063 Accrued other 74,223 80,206 Total Accrued Expenses $ 545,325 $ 623,959 |
(3) Net Income (Loss) Per Com17
(3) Net Income (Loss) Per Common and Common Equivalent Share (Details) - USD ($) | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Basic EPS Computation: | ||
Net income (loss) | $ (604,402) | $ 197,128 |
Weighted average common shares Outstanding | 13,203,436 | 13,198,236 |
Basic EPS | $ (0.05) | $ 0.01 |
Diluted EPS Computation: | ||
Net income (loss) | $ (604,402) | $ 197,128 |
Weighted average common shares Outstanding | 13,203,436 | 13,198,236 |
Dilutive effect stock options | $ 305,420 | |
Total Shares | 13,203,436 | 13,503,656 |
Diluted EPS | $ (0.05) | $ 0.01 |
(5) Inventories - Inventories (
(5) Inventories - Inventories (Details) - USD ($) | Apr. 01, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 360,450 | $ 398,994 |
Work in process | 1,082,074 | 1,089,496 |
Finished goods | 1,041,492 | 1,032,971 |
Gross inventory | 2,484,016 | 2,521,461 |
Reserve for obsolescence | (536,165) | (550,500) |
Inventories, net | $ 1,947,851 | $ 1,970,961 |
(6) Accrued Expenses - Accrued
(6) Accrued Expenses - Accrued expenses (Details) - USD ($) | Apr. 01, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued legal and accounting | $ 132,617 | $ 87,690 |
Accrued payroll and related expenses | 338,485 | 456,063 |
Accrued other | 74,223 | 80,206 |
Total Accrued Expenses | $ 545,325 | $ 623,959 |
(4) Share-Based Payments (Detai
(4) Share-Based Payments (Details Narrative) - USD ($) | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares Granted during the period | 122,500 | 129,000 |
Shares Issued during the period (000's) | 1,200 | |
Compensation expense unrecognized (000's) | $ 443 | |
Compensation expense recognized in the period (000's) | $ 74 | $ 79 |
(7) Income Taxes (Details Narra
(7) Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax expense (benefit) (000's) | $ 348 | $ 37 |
State income tax expense (benefit) (000's) | $ 99 | $ 7 |