|
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED October 1, 2011
|
|
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM to
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Connecticut
|
06-0330020
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
|
112 Bridge Street, Naugatuck, Connecticut
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06770
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer [ ]
|
Accelerated filer [X]
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Non-accelerated filer [ ] (Do not check if a smaller reporting company)
|
Smaller reporting company [ ]
|
Class
|
Outstanding as of October 27, 2011
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Common Stock, No par value
|
6,213,566
|
ASSETS
|
October 1, 2011
|
January 1, 2011
|
|||||
Current Assets
|
|||||||
Cash and cash equivalents
|
$
|
9,333,687
|
$
|
12,224,608
|
|||
Accounts receivable, less allowances: $561,000 - 2011; $519,000 - 2010
|
22,185,318
|
16,424,766
|
|||||
Inventories
|
29,742,752
|
28,190,175
|
|||||
Prepaid expenses and other assets
|
2,810,528
|
2,652,132
|
|||||
Deferred income taxes
|
1,141,744
|
1,141,744
|
|||||
Total Current Assets
|
65,214,029
|
60,633,425
|
|||||
Property, Plant and Equipment
|
56,053,067
|
53,328,353
|
|||||
Accumulated depreciation
|
(31,030,096
|
)
|
(28,864,317
|
)
|
|||
25,022,971
|
24,464,036
|
||||||
Goodwill
|
13,878,251
|
13,933,990
|
|||||
Trademarks
|
150,751
|
150,751
|
|||||
Patents, technology, and other intangibles net of accumulated amortization
|
1,797,197
|
2,259,235
|
|||||
Deferred income taxes
|
630,548
|
912,043
|
|||||
16,456,747
|
17,256,019
|
||||||
TOTAL ASSETS
|
$
|
106,693,747
|
$
|
102,353,480
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
October 1, 2011
|
January 1, 2011
|
|||||
Current Liabilities
|
|||||||
Accounts payable
|
$
|
10,828,024
|
$
|
7,518,969
|
|||
Accrued compensation
|
1,766,376
|
2,997,126
|
|||||
Other accrued expenses
|
1,702,163
|
1,141,514
|
|||||
Current portion of long-term debt
|
714,286
|
714,286
|
|||||
Total Current Liabilities
|
15,010,849
|
12,371,895
|
|||||
Other long-term liabilities
|
713,202
|
713,202
|
|||||
Long-term debt, less current portion
|
3,214,286
|
3,750,000
|
|||||
Accrued postretirement benefits
|
1,507,206
|
1,461,371
|
|||||
Accrued pension cost
|
13,235,662
|
14,013,269
|
|||||
Shareholders’ Equity
|
|||||||
Voting Preferred Stock, no par value: Authorized and unissued 1,000,000 shares
|
|||||||
Nonvoting Preferred Stock, no par value: Authorized and unissued 1,000,000 shares
|
|||||||
Common Stock, no par value: Authorized: 50,000,000 shares
|
|||||||
Issued: 8,892,966 shares in 2011 and 8,852,762 shares in 2010
|
28,275,343
|
27,717,318
|
|||||
Treasury Stock: 2,694,729 shares in 2011 and 2010
|
(19,105,723
|
)
|
(19,105,723
|
)
|
|||
Retained earnings
|
72,295,567
|
69,919,619
|
|||||
Accumulated other comprehensive income (loss):
|
|||||||
Foreign currency translation
|
1,965,185
|
2,448,675
|
|||||
Unrecognized net pension and postretirement benefit costs, net of tax
|
(10,417,830
|
)
|
(10,936,146
|
)
|
|||
Accumulated other comprehensive loss
|
(8,452,645
|
)
|
(8,487,471
|
)
|
|||
Total Shareholders’ Equity
|
73,012,542
|
70,043,743
|
|||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
106,693,747
|
$
|
102,353,480
|
Nine Months Ended
|
Three Months Ended
|
||||||||||||
October 1, 2011
|
October 2, 2010
|
October 1, 2011
|
October 2, 2010
|
||||||||||
Net sales
|
$
|
104,798,740
|
$
|
97,490,901
|
$
|
36,089,946
|
$
|
33,958,681
|
|||||
Cost of products sold
|
(84,993,869
|
)
|
(77,615,059
|
)
|
(29,533,528
|
)
|
(27,040,159
|
)
|
|||||
Gross margin
|
19,804,871
|
19,875,842
|
6,556,418
|
6,918,522
|
|||||||||
Selling and administrative expenses
|
(13,659,793
|
)
|
(13,736,128
|
)
|
(4,429,312
|
)
|
(4,680,232
|
)
|
|||||
Operating profit
|
6,145,078
|
6,139,714
|
2,127,106
|
2,238,290
|
|||||||||
Interest expense
|
(173,686
|
)
|
(203,040
|
)
|
(53,643
|
)
|
(64,971
|
)
|
|||||
Other income
|
17,528
|
511
|
8,012
|
20
|
|||||||||
Income before income taxes
|
5,988,920
|
5,937,185
|
2,081,475
|
2,173,339
|
|||||||||
Income taxes
|
1,948,006
|
2,026,908
|
621,534
|
683,591
|
|||||||||
Net income
|
$
|
4,040,914
|
$
|
3,910,277
|
$
|
1,459,941
|
$
|
1,489,748
|
|||||
Earnings per Share:
|
|||||||||||||
Basic
|
$
|
.66
|
$
|
.64
|
$
|
.24
|
$
|
.24
|
|||||
Diluted
|
$
|
.65
|
$
|
.63
|
$
|
.24
|
$
|
.24
|
|||||
Cash dividends per share:
|
$
|
.27
|
$
|
.27
|
$
|
.09
|
$
|
.09
|
Nine Months Ended
|
Three Months Ended
|
|||||||||||
October 1, 2011
|
October 2, 2010
|
October 1, 2011
|
October 2, 2010
|
|||||||||
Net income
|
$
|
4,040,914
|
$
|
3,910,277
|
$
|
1,459,941
|
$
|
1,489,748
|
||||
Other comprehensive income:
|
||||||||||||
Change in foreign currency translation
|
(483,490
|
)
|
331,079
|
(903,487
|
)
|
436,845
|
||||||
Change in pension and postretirement benefit costs, net of taxes of:
2011 – $281,495 and $94,057, respectively
2010 – $266,520 and $87,584, respectively
|
518,316
|
488,066
|
172,772
|
160,389
|
||||||||
34,826
|
819,145
|
(730,715
|
)
|
597,234
|
||||||||
Comprehensive income
|
$
|
4,075,740
|
$
|
4,729,422
|
$
|
729,226
|
$
|
2,086,982
|
Nine Months Ended
|
|||||||
October 1, 2011
|
October 2, 2010
|
||||||
Operating Activities
|
|||||||
Net income
|
$
|
4,040,914
|
$
|
3,910,277
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||
Depreciation and amortization
|
2,793,149
|
2,920,327
|
|||||
Provision for doubtful accounts
|
54,696
|
170,388
|
|||||
(Gain)/Loss on sale of equipment and other assets
|
(2,000
|
)
|
115,038
|
||||
Issuance of Common Stock for directors’ fees
|
12,301
|
18,456
|
|||||
Changes in operating assets and liabilities:
|
|||||||
Accounts receivable
|
(6,213,779
|
)
|
(2,859,473
|
)
|
|||
Inventories
|
(1,811,220
|
)
|
(1,644,318
|
)
|
|||
Prepaid expenses and other
|
(178,772
|
)
|
(579,781
|
)
|
|||
Prepaid pension cost
|
40,103
|
1,250,320
|
|||||
Other assets
|
(48,897
|
)
|
(137,414
|
)
|
|||
Accounts payable
|
3,542,043
|
3,065,325
|
|||||
Accrued compensation
|
(1,211,652
|
)
|
823,385
|
||||
Other accrued expenses
|
633,132
|
(106,969
|
)
|
||||
Net cash provided by operating activities
|
1,650,018
|
6,945,561
|
|||||
Investing Activities
|
|||||||
Purchases of property, plant and equipment
|
(2,934,833
|
)
|
(3,622,267
|
)
|
|||
Proceeds from sale of equipment and other assets
|
2,000
|
275
|
|||||
Net cash used in investing activities
|
(2,932,833
|
)
|
(3,621,992
|
)
|
|||
Financing Activities
|
|||||||
Principal payments on long-term debt
|
(535,714
|
)
|
(11,964,286
|
)
|
|||
Proceeds from issuance of long-term debt
|
-
|
5,000,000
|
|||||
Proceeds from sales of Common Stock
|
447,690
|
1,123,649
|
|||||
Tax benefit from exercise of incentive stock options
|
98,034
|
47,809
|
|||||
Purchases of Common Stock for treasury
|
-
|
(730,307
|
)
|
||||
Dividends paid
|
(1,664,966
|
)
|
(1,644,039
|
)
|
|||
Net cash used in financing activities
|
(1,654,956
|
)
|
(8,167,174
|
)
|
|||
Effect of exchange rate changes on cash
|
46,850
|
25,115
|
|||||
Net change in cash and cash equivalents
|
(2,890,921
|
)
|
(4,818,490
|
)
|
|||
Cash and cash equivalents at beginning of period
|
12,224,608
|
16,746,673
|
|||||
Cash and cash equivalents at end of period
|
$
|
9,333,687
|
$
|
11,928,183
|
Nine Months Ended
|
Three Months Ended
|
||||||
October 1, 2011
|
October 2, 2010
|
October 1, 2011
|
October 2, 2010
|
||||
Basic:
|
|||||||
Weighted average shares outstanding
|
6,167,262
|
6,090,452
|
6,172,193
|
6,131,401
|
|||
Diluted:
|
|||||||
Weighted average shares outstanding
|
6,167,262
|
6,090,452
|
6,172,193
|
6,131,401
|
|||
Dilutive stock options
|
44,090
|
97,519
|
30,303
|
76,818
|
|||
Denominator for diluted earnings per share
|
6,211,352
|
6,187,971
|
6,202,496
|
6,208,219
|
October 1, 2011
|
January 1, 2011
|
||
Raw material and component parts
|
$ 8,536,170
|
$ 8,090,149
|
|
Work in process
|
5,591,637
|
5,298,939
|
|
Finished goods
|
15,614,945
|
14,801,087
|
|
$ 29,742,752
|
$ 28,190,175
|
Nine Months Ended
|
Three Months Ended
|
||||||||||||||||||
October 1, 2011
|
October 2, 2010
|
October 1, 2011
|
October 2, 2010
|
||||||||||||||||
Revenues:
|
|||||||||||||||||||
Sales to unaffiliated customers:
|
|||||||||||||||||||
Industrial Hardware
|
$
|
46,616,318
|
$
|
42,971,288
|
$
|
17,150,236
|
$
|
14,733,993
|
|||||||||||
Security Products
|
37,025,245
|
34,646,960
|
12,431,267
|
12,581,626
|
|||||||||||||||
Metal Products
|
21,157,177
|
19,872,653
|
6,508,443
|
6,643,062
|
|||||||||||||||
$
|
104,798,740
|
$
|
97,490,901
|
$
|
36,089,946
|
$
|
33,958,681
|
||||||||||||
Income before income taxes:
|
|||||||||||||||||||
Industrial Hardware
|
$
|
3,077,782
|
$
|
3,960,738
|
$
|
1,093,102
|
$
|
1,571,604
|
|||||||||||
Security Products
|
2,676,151
|
2,308,792
|
1,037,122
|
926,098
|
|||||||||||||||
Metal Products
|
391,145
|
(129,816
|
)
|
(3,118
|
)
|
(259,412
|
)
|
||||||||||||
Operating Profit
|
6,145,078
|
6,139,714
|
2,127,106
|
2,238,290
|
|||||||||||||||
Interest expense
|
(173,686
|
)
|
(203,040
|
)
|
(53,643
|
)
|
(64,971
|
)
|
|||||||||||
Other income
|
17,528
|
511
|
8,012
|
20
|
|||||||||||||||
$
|
5,988,920
|
$
|
5,937,185
|
$
|
2,081,475
|
$
|
2,173,339
|
Industrial
Hardware
Segment
|
Security
Products
Segment
|
Metal
Products
Segment
|
Total
|
||||||||||
Beginning balance
|
$
|
2,100,174
|
$
|
11,833,816
|
$
|
—
|
$
|
13,933,990
|
|||||
Foreign exchange
|
(55,739
|
)
|
—
|
—
|
(55,739
|
)
|
|||||||
Ending balance
|
$
|
2,044,435
|
$
|
11,833,816
|
$
|
—
|
$
|
13,878,251
|
Industrial
Hardware
Segment
|
Security
Products
Segment
|
Metal
Products
Segment
|
Total
|
Weighted-Average
Amortization Period (Years)
|
|||||||||||
2011 Gross Amount:
|
|||||||||||||||
Patents and developed
technology
|
$
|
2,672,217
|
$
|
1,046,767
|
$
|
26,382
|
$
|
3,745,366
|
16.0
|
||||||
Customer relationships
|
45,825
|
1,921,811
|
—
|
1,967,636
|
5.0
|
||||||||||
Non-compete agreements
|
30,000
|
90,735
|
—
|
120,735
|
5.0
|
||||||||||
Total Gross Intangibles
|
$
|
2,748,042
|
$
|
3,059,313
|
$
|
26,382
|
$
|
5,833,737
|
11.9
|
||||||
2011 Accumulated
Amortization:
|
|||||||||||||||
Patents and developed
technology
|
$
|
1,467,021
|
$
|
478,466
|
$
|
25,781
|
$
|
1,971,268
|
|||||||
Customer relationships
|
34,369
|
1,918,881
|
—
|
1,953,250
|
|||||||||||
Non-compete agreements
|
22,500
|
89,522
|
—
|
112,022
|
|||||||||||
Total Gross Amortization
|
$
|
1,523,890
|
$
|
2,486,869
|
$
|
25,781
|
$
|
4,036,540
|
|||||||
Net October 1, 2011 per Balance Sheet
|
$
|
1,224,152
|
$
|
572,444
|
$
|
601
|
$
|
1,797,197
|
Industrial
Hardware
Segment
|
Security
Products
Segment
|
Metal
Products
Segment
|
Total
|
Weighted-Average
Amortization Period (Years)
|
|||||||||||
2010 Gross Amount:
|
|||||||||||||||
Patents and developed
technology
|
$
|
2,746,918
|
$
|
1,016,936
|
$
|
26,382
|
$
|
3,790,236
|
16.0
|
||||||
Customer relationships
|
45,825
|
1,921,811
|
—
|
1,967,636
|
5.0
|
||||||||||
Non-compete agreements
|
30,000
|
90,735
|
—
|
120,735
|
5.0
|
||||||||||
Total Gross Intangibles
|
$
|
2,822,743
|
$
|
3,029,482
|
$
|
26,382
|
$
|
5,878,607
|
11.9
|
||||||
2010 Accumulated
Amortization:
|
|||||||||||||||
Patents and developed
technology
|
$
|
1,416,034
|
$
|
417,801
|
$
|
25,307
|
$
|
1,859,142
|
|||||||
Customer relationships
|
27,495
|
1,630,581
|
—
|
1,658,076
|
|||||||||||
Non-compete agreements
|
18,000
|
84,154
|
—
|
102,154
|
|||||||||||
Total Gross Amortization
|
$
|
1,461,529
|
$
|
2,132,536
|
$
|
25,307
|
$
|
3,619,372
|
|||||||
Net January 1, 2011 per Balance Sheet
|
$
|
1,361,214
|
$
|
896,946
|
$
|
1,075
|
$
|
2,259,235
|
Pension Benefits
|
|||||||||||||
Nine Months Ended
|
Three Months Ended
|
||||||||||||
October 1,
2011
|
October 2,
2010
|
October 1,
2011
|
October 2,
2010
|
||||||||||
Service cost
|
$
|
1,590,755
|
$
|
1,679,157
|
$
|
530,252
|
$
|
559,719
|
|||||
Interest cost
|
2,212,255
|
2,181,721
|
737,418
|
727,241
|
|||||||||
Expected return on plan assets
|
(2,737,713
|
)
|
(2,508,828
|
)
|
(912,571
|
)
|
(836,276
|
)
|
|||||
Amortization of prior service cost
|
145,612
|
153,428
|
48,537
|
51,142
|
|||||||||
Amortization of the net loss
|
672,791
|
632,366
|
224,264
|
210,789
|
|||||||||
Net periodic benefit cost
|
$
|
1,883,700
|
$
|
2,137,844
|
$
|
627,900
|
$
|
712,615
|
Postretirement Benefits
|
|||||||||||||
Nine Months Ended
|
Three Months Ended
|
||||||||||||
October 1,
2011
|
October 2,
2010
|
October 1,
2011
|
October 2,
2010
|
||||||||||
Service cost
|
$
|
94,848
|
$
|
83,090
|
$
|
31,616
|
$
|
12,590
|
|||||
Interest cost
|
102,564
|
101,233
|
34,188
|
31,533
|
|||||||||
Expected return on plan assets
|
(74,475
|
)
|
(70,693
|
)
|
(24,825
|
)
|
(23,343
|
)
|
|||||
Amortization of prior service cost
|
(17,916
|
)
|
(13,290
|
)
|
(5,972
|
)
|
(1,340
|
)
|
|||||
Amortization of the net loss
|
-
|
(17,916
|
)
|
-
|
(12,616
|
)
|
|||||||
Net periodic benefit cost
|
$
|
105,021
|
$
|
82,424
|
$
|
35,007
|
$
|
6,824
|
Nine Months Ended
October 1, 2011
|
Year Ended
January 1, 2011
|
|||||||||
Shares
|
Weighted - Average Exercise Price
|
Shares
|
Weighted - Average Exercise Price
|
|||||||
Outstanding at beginning of period
|
80,000
|
$
|
12.471
|
221,750
|
$
|
10.581
|
||||
Granted
|
—
|
—
|
—
|
—
|
||||||
Exercised
|
(39,500
|
)
|
11.334
|
(141,750
|
)
|
9.514
|
||||
Outstanding at end of period
|
40,500
|
13.580
|
80,000
|
12.471
|
Options Outstanding and Exercisable
|
||||
Exercise Price
|
Outstanding as of October 1, 2011
|
Weighted- Average Remaining Contractual Life
|
Weighted- Average Exercise Price
|
|
$13.58
|
40,500
|
3.2
|
13.580
|
Three Months Ended October 1, 2011
|
||||
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost of products sold
|
81.9%
|
76.1%
|
92.9%
|
81.9%
|
Gross margin
|
18.1%
|
23.9%
|
7.1%
|
18.1%
|
Selling and administrative expense
|
11.7%
|
15.6%
|
7.1%
|
12.2%
|
Operating profit
|
6.4%
|
8.3%
|
0.0%
|
5.9%
|
Three Months Ended October 2, 2010
|
||||
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost of products sold
|
74.7%
|
76.5%
|
96.6%
|
79.6%
|
Gross margin
|
25.3%
|
23.5%
|
3.4%
|
20.4%
|
Selling and administrative expense
|
14.6%
|
16.2%
|
7.3%
|
13.8%
|
Operating profit/(loss)
|
10.7%
|
7.3%
|
-3.9%
|
6.6%
|
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
$ 2,416
|
$ (150)
|
$ (135)
|
$ 2,131
|
Volume
|
13.3%
|
-2.5%
|
-6.0%
|
3.7%
|
Prices
|
0.7%
|
0.6%
|
3.8%
|
1.3%
|
New products
|
2.4%
|
0.7%
|
0.2%
|
1.3%
|
16.4%
|
-1.2%
|
-2.0%
|
6.3%
|
|
Cost of products sold
|
$ 3,035
|
$ (154)
|
$ (369)
|
$ 2,512
|
27.6%
|
-1.6%
|
-5.8%
|
9.3%
|
|
Gross margin
|
$ (619)
|
$ 4
|
$ 234
|
$ (381)
|
-16.6%
|
0.1%
|
104.0%
|
-5.5%
|
|
Selling and administrative expenses
|
$ (141)
|
$ (107)
|
$ (22)
|
$ (270)
|
-6.5%
|
-5.2%
|
-4.5%
|
-5.8%
|
|
Operating profit
|
$ (478)
|
$ 111
|
$ 256
|
$ (111)
|
-30.4%
|
12.0%
|
98.8%
|
-5.0%
|
Nine Months Ended October 1, 2011
|
||||
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost of products sold
|
80.1%
|
76.7%
|
91.1%
|
81.1%
|
Gross margin
|
19.9%
|
23.3%
|
8.9%
|
18.9%
|
Selling and administrative expense
|
13.3%
|
16.1%
|
7.1%
|
13.0%
|
Operating profit
|
6.6%
|
7.2%
|
1.8%
|
5.9%
|
Nine Months Ended October 2, 2010
|
||||
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost of products sold
|
75.8%
|
76.4%
|
93.4%
|
79.6%
|
Gross margin
|
24.2%
|
23.6%
|
6.6%
|
20.4%
|
Selling and administrative expense
|
15.0%
|
16.9%
|
7.3%
|
14.1%
|
Operating profit/(loss)
|
9.2%
|
6.7%
|
-0.7%
|
6.3%
|
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
$ 3,645
|
$ 2,378
|
$ 1,285
|
$ 7,308
|
Volume
|
6.4%
|
5.2%
|
3.6%
|
5.4%
|
Prices
|
0.5%
|
1.0%
|
2.8%
|
1.1%
|
New products
|
1.6%
|
0.7%
|
0.1%
|
1.0%
|
8.5%
|
6.9%
|
6.5%
|
7.5%
|
|
Cost of products sold
|
$ 4,760
|
$ 1,905
|
$ 714
|
$ 7,379
|
14.6%
|
7.2%
|
3.8%
|
9.5%
|
|
Gross margin
|
$(1,115)
|
$ 473
|
$ 571
|
$ (71)
|
-10.7%
|
5.8%
|
43.5%
|
-0.4%
|
|
Selling and administrative expenses
|
$ (232)
|
$ 106
|
$ 50
|
$ (76)
|
-3.6%
|
1.8%
|
3.5%
|
-0.6%
|
|
Operating profit
|
$ (883)
|
$ 367
|
$ 521
|
$ 5
|
-22.3%
|
15.9%
|
401.3%
|
0.1%
|
Third
Quarter
2011
|
Third
Quarter
2010
|
Year
End
2010
|
|||||
Current ratio
|
4.3
|
4.6
|
4.9
|
||||
Average days’ sales in accounts receivable
|
56
|
49
|
47
|
||||
Inventory turnover
|
3.8
|
3.9
|
3.7
|
||||
Total debt to shareholders’ equity
|
5.4
|
%
|
6.4
|
%
|
6.4
|
%
|
Third
Quarter
2011
|
Third
Quarter
2010
|
Year
End
2010
|
|||||
Cash and cash equivalents
|
$
|
9.3
|
$
|
11.9
|
$
|
12.2
|
|
Working capital
|
50.2
|
47.2
|
48.3
|
||||
Net cash (used)/provided by operating activities
|
1.7
|
6.9
|
9.5
|
||||
Change in working capital impact on net cash
(used)/provided by operating activities
|
(5.2
|
)
|
(0.2
|
)
|
(0.8
|
)
|
|
Net cash used in investing activities
|
(2.9
|
)
|
(3.6
|
)
|
(4.7
|
)
|
|
Net cash used in financing activities
|
(1.7
|
)
|
(8.2
|
)
|
(9.4
|
)
|
THE EASTERN COMPANY
|
|
(Registrant)
|
|
DATE: November 1, 2011
|
/s/Leonard F. Leganza
|
Leonard F. Leganza
Chairman, President and Chief Executive Officer
|
|
DATE: November 1, 2011
|
/s/John L. Sullivan III
|
John L. Sullivan III
Vice President and Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Eastern Company;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Eastern Company;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
1)
|
The Company’s Quarterly Report on Form 10-Q for the Period ended October 1, 2011, and to which this certification is attached as Exhibit 32 (the “Periodic Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
|
2)
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Leonard F. Leganza
|
|
Leonard F. Leganza
CEO
|
|
/s/ John L. Sullivan III
|
|
John L. Sullivan III
CFO
|
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $) | Oct. 01, 2011 | Jan. 01, 2011 |
---|---|---|
Current Assets | ||
Accounts receivable, allowances | $ 561,000 | $ 519,000 |
Shareholders' Equity | ||
Voting Preferred Stock, no par value (in dollars per shares) | $ 0 | $ 0 |
Voting Preferred stock, shares authorized and unissued (in shares) | 1,000,000 | 1,000,000 |
Nonvoting Preferred Stock, no par value (in dollars per shares) | $ 0 | $ 0 |
Nonvoting Preferred Stock, Shares authorized and unissued (in shares) | 1,000,000 | 1,000,000 |
Common Stock, no par value (in dollars per shares) | $ 0 | $ 0 |
Common Stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common Stock, shares issued (in shares) | 8,892,966 | 8,852,762 |
Treasury Stock, shares (in shares) | 2,694,729 | 2,694,729 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2011 | Oct. 02, 2010 | Oct. 01, 2011 | Oct. 01, 2010 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract] | ||||
Net sales | $ 36,089,946 | $ 33,958,681 | $ 104,798,740 | $ 97,490,901 |
Cost of products sold | (29,533,528) | (27,040,159) | (84,993,869) | (77,615,059) |
Gross margin | 6,556,418 | 6,918,522 | 19,804,871 | 19,875,842 |
Selling and administrative expenses | (4,429,312) | (4,680,232) | (13,659,793) | (13,736,128) |
Operating profit | 2,127,106 | 2,238,290 | 6,145,078 | 6,139,714 |
Interest expense | (53,643) | (64,971) | (173,686) | (203,040) |
Other income | 8,012 | 20 | 17,528 | 511 |
Income before income taxes | 2,081,475 | 2,173,339 | 5,988,920 | 5,937,185 |
Income taxes | 621,534 | 683,591 | 1,948,006 | 2,026,908 |
Net income | $ 1,459,941 | $ 1,489,748 | $ 4,040,914 | $ 3,910,277 |
Earnings per Share: | ||||
Basic (in dollars per share) | $ 0.24 | $ 0.24 | $ 0.66 | $ 0.64 |
Diluted (in dollars per share) | $ 0.24 | $ 0.24 | $ 0.65 | $ 0.63 |
Cash dividends per share (in dollars per share) | $ 0.09 | $ 0.09 | $ 0.27 | $ 0.27 |
Document And Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Oct. 01, 2011 | Oct. 27, 2011 | Jul. 03, 2010 | |
Entity Registrant Name | EASTERN CO | ||
Entity Central Index Key | 0000031107 | ||
Current Fiscal Year End Date | --01-01 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 77,024,016 | ||
Entity Common Stock, Shares Outstanding | 6,213,566 | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Oct. 01, 2011 |
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Recent Accounting Pronouncements | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note E – Recent Accounting Pronouncements In January 2010, the FASB issued new accounting guidance which requires new disclosures regarding transfers in and out of Level 1 and Level 2 fair value measurements, as well as requiring presentation on a gross basis of information about purchases, sales, issuances and settlements in Level 3 fair value measurements. The guidance also clarifies existing disclosures regarding level of disaggregation, inputs and valuation techniques. The new guidance was effective for interim and annual reporting periods beginning after December 15, 2009. Disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements were effective for fiscal years beginning after December 15, 2010. As this guidance requires only additional disclosure, there was no impact on the consolidated financial statements of the Company upon adoption. In December 2010, the FASB issued authoritative guidance which updates the guidance regarding Intangibles-Goodwill & Other. The amendments affect all entities that have recognized goodwill and have one or more reporting units whose carrying amount for purposes of performing Step 1 of the goodwill impairment test is zero or negative. The amendments modify Step 1 so that for those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with existing guidance, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company adopted this guidance effective January 2, 2011 and it had no impact on the consolidated financial statements of the Company. In December 2010, the FASB issued authoritative guidance which updates the guidance regarding business combinations. The objective of this new guidance is to address diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. The amendments in this guidance specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments affect any public entity that enters into business combinations that are material on an individual or aggregate basis. The Company adopted this guidance effective January 2, 2011 and it had no impact on the consolidated financial statements of the Company. In May 2011, the FASB issued authoritative guidance which clarifies the concepts related to highest and best use and valuation premise, blockage factors and other premiums and discounts, the fair value measurement of financial instruments held in a portfolio and of those instruments classified as a component of shareowners' equity. The guidance includes enhanced disclosure requirements about recurring Level 3 fair value measurements, the use of nonfinancial assets, and the level in the fair value hierarchy of assets and liabilities not recorded at fair value. This guidance will become effective for fiscal years and interim periods beginning on or after December 15, 2011. This guidance is not expected to have an impact on our consolidated financial statements or disclosures as there are presently no recurring Level 3 fair value measurements. In June 2011, the FASB issued authoritative guidance aimed at increasing the prominence of items reported in other comprehensive income in the financial statements. This guidance requires companies to present comprehensive income in a single statement below net income or in a separate statement of comprehensive income immediately following the income statement. Companies will no longer be allowed to present comprehensive income on the statement of changes in shareholders' equity. In both options, companies must present the components of net income, total net income, the components of other comprehensive income, total other comprehensive income and total comprehensive income. This update does not change which items are reported in other comprehensive income or the requirement to report reclassifications of items from other comprehensive income to net income. This guidance will become effective for fiscal years and interim periods beginning after December 15, 2011 and will require retrospective application for all periods presented. The adoption of this guidance may impact the presentation of the consolidated financial statements of the Company, but it will not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. In September 2011, the FASB issued authoritative guidance on testing goodwill for impairment. This guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that the fair value of a reporting unit is less than its carrying amount, it is required to perform the currently prescribed two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit, if any. The guidance is effective for fiscal years and interim periods beginning after December 15, 2011, with early adoption permitted. The Company will adopt this guidance with its fiscal year effective January 1, 2012. The Company has implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company. |
Stock Based Compensation and Stock Options | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation and Stock Options [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation and Stock Options | Note J – Stock Based Compensation and Stock Options The Company has stock option plans for officers, other key employees, and non-employee directors. As of October 1, 2011 two plans have shares reserved for future issuance, the 1995 and 2010 plans. Incentive stock options granted under the 1995 and 2010 plans must have exercise prices that are not less than 100% of the fair market value of the stock on the dates the options are granted. Restricted stock awards may also be granted to participants under the 2010 plan with restrictions determined by the Compensation Committee of the Company's Board of Directors. Under the 1995 and 2010 plans, nonqualified stock options granted to participants will have exercise prices determined by the Compensation Committee of the Company's Board of Directors. No options or restricted stock were granted in the first nine months of 2011 or 2010. As of October 1, 2011, there were 500,000 shares available for future grant under the above noted 2010 plan and there were no shares available for grant under the 1995 plan. As of October 1, 2011, there were 540,500 shares of common stock reserved under all option plans for future issuance.
At October 1, 2011, outstanding and exercisable options had an intrinsic value of $194,400. The total intrinsic value of stock options exercised in the first nine months of 2011 was $293,815. For the nine month periods ended October 1, 2011 and October 2, 2010, the Company recognized tax benefits of $98,034 and $47,809, respectively, resulting from the disqualification of incentive stock options that were exercised and sold prior to the required holding period. |
Basis of Presentation | 9 Months Ended |
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Oct. 01, 2011 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note A – Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. Refer to the Company's consolidated financial statements and notes thereto included in its Form 10-K for the year ended January 1, 2011 for additional information. The accompanying condensed consolidated financial statements are unaudited. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for interim periods have been reflected therein. All intercompany accounts and transactions are eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The condensed consolidated balance sheet as of January 1, 2011 has been derived from the audited consolidated balance sheet at that date. |
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Goodwill [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Note G – Goodwill The following is a roll-forward of goodwill from year-end 2010 to the end of the third quarter 2011:
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Financial Instruments and Fair Value Measurements | 9 Months Ended |
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Oct. 01, 2011 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Financial Instruments and Fair Value Measurements | Note L – Financial Instruments and Fair Value Measurements Financial Risk Management Objectives and Policies The Company is exposed primarily to credit, interest rate and currency exchange rate risks which arise in the normal course of business. Credit Risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Company, as and when they become due. The primary credit risk for the Company is its receivable accounts with customers. The Company has established credit limits for customers and monitors their balances to mitigate the risk of loss. At October 1, 2011 and January 1, 2011, there were no significant concentrations of credit risk. No one customer represented more than 10% of the Company's net trade receivables at October 1, 2011 and January 1, 2011. The maximum exposure to credit risk is primarily represented by the carrying amount of the Company's accounts receivable. Interest Rate Risk On October 1, 2011, the Company has no exposure to the risk of changes in market interest rates as the interest rate on the outstanding debt is fixed at 4.98%. Fair Value Measurements Assets and liabilities that require fair value measurement are recorded at fair value using market and income valuation approaches and considering the Company's and counterparty's credit risk. The Company uses the market approach and the income approach to value assets and liabilities as appropriate. There are no assets or liabilities requiring fair value measurements on October 1, 2011 or January 1, 2011. |
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Intangibles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles | Note H – Intangibles Patents are recorded at cost and are amortized using the straight-line method over the lives of the patents. Technology and licenses are recorded at cost and are generally amortized on a straight-line basis over periods ranging from 5 to 17 years. Non-compete agreements and customer relationships are being amortized using the straight-line method over a period of 5 years. Trademarks are not amortized as their lives are deemed to be indefinite. The gross carrying amount and accumulated amortization of amortizable intangible assets:
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Debt | 9 Months Ended |
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Oct. 01, 2011 | |
Debt [Abstract] | |
Debt | Note F – Debt On January 29, 2010, the Company signed a secured Loan Agreement with People's United Bank (“People's”) which included a $5,000,000 term portion and a $10,000,000 revolving credit portion. The term portion of the loan requires quarterly payments of $178,571 for a period of seven (7) years, maturing on January 31, 2017. The revolving credit portion has a quarterly commitment fee of one quarter of one percent (0.25%). There was no balance outstanding on the revolving credit portion at any time during the life of the Loan Agreement. Interest on the term portion of the Loan Agreement is fixed at 4.98%. The interest rate on the revolving credit portion of the Loan Agreement varies based on the LIBOR rate or People's Prime rate plus a margin spread of 2.25%, with a floor rate of 4.0%. |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
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Oct. 01, 2011 | Oct. 02, 2010 | Oct. 01, 2011 | Oct. 01, 2010 | |
Other comprehensive income: | ||||
Change in pension and postretirement benefit costs, taxes | $ 94,057 | $ 87,584 | $ 281,495 | $ 266,520 |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Note B – Earnings Per Share The denominators used in the earnings per share computations follow:
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Inventories [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Note C – Inventories The components of inventories follow:
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Income Taxes | 9 Months Ended |
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Oct. 01, 2011 | |
Income Taxes [Abstract] | |
Income Taxes | Note K – Income Taxes The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2008 and non-U.S. income tax examinations by tax authorities prior to 2005. During the quarter, the State of New York completed its audit for the 2007, 2008 and 2009 tax years. The audit resulted in no adjustments and all of the returns were accepted as filed. The total amount of unrecognized tax benefits could increase or decrease within the next twelve months for a number of reasons, including the closure of federal, state and foreign tax years by expiration of the statute of limitations and the recognition and measurement considerations under FASB Accounting Standards Codification (“ASC”) 740. There have been no significant changes to the amount of unrecognized tax benefits during the three or nine months ended October 1, 2011. The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months. |
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Segment Information | Note D – Segment Information Segment financial information follows:
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||
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Oct. 01, 2011 | Oct. 02, 2010 | Oct. 01, 2011 | Oct. 01, 2010 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract] | ||||
Net income | $ 1,459,941 | $ 1,489,748 | $ 4,040,914 | $ 3,910,277 |
Other comprehensive income: | ||||
Change in foreign currency translation | (903,487) | 436,845 | (483,490) | 331,079 |
Change in pension and postretirement benefit costs, net of taxes of: 2011 - $281,495 and $94,057, respectively 2010 - $266,520 and $87,584, respectively | 172,772 | 160,389 | 518,316 | 488,066 |
Total other comprehensive income | (730,715) | 597,234 | 34,826 | 819,145 |
Comprehensive income | $ 729,226 | $ 2,086,982 | $ 4,075,740 | $ 4,729,422 |
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Retirement Benefit Plans | Note I – Retirement Benefit Plans The Company has non-contributory defined benefit pension plans covering certain U.S. employees. Plan benefits are generally based upon age at retirement, years of service and, for its salaried plan, the level of compensation. The Company also sponsors unfunded nonqualified supplemental retirement plans that provide certain current and former officers with benefits in excess of limits imposed by federal tax law. The Company also provides health care and life insurance for retired salaried employees in the United States who meet specific eligibility requirements. Significant disclosures relating to these benefit plans for the third quarter and first nine months of fiscal 2011 and 2010 follow:
The Company's funding policy with respect to its qualified plans is to contribute at least the minimum amount required by applicable laws and regulations. In 2011, the Company is required to contribute $2,301,000 into its pension plans and $151,000 into its postretirement plan. As of October 1, 2011, the Company has made contributions totaling $1,827,000 into its pension plans and $104,000 to its postretirement plan and will make the remaining contributions as required during the remainder of the year. The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code covering substantially all U.S. non-union employees. The plan allows participants to make voluntary contributions of up to 100% of their annual compensation on a pretax basis, subject to IRS limitations. The plan provides for contributions by the Company at its discretion. The Company made contributions of $44,690 and $137,847 in the third quarter and first nine months of 2011, respectively and $44,388 and $129,869 in the third quarter and first nine months of 2010, respectively. |