|
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 27, 2014
|
|
[ ] 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.)
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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 [ ]
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Accelerated filer [X]
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Non-accelerated filer [ ] (Do not check if a smaller reporting company)
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Smaller reporting company [ ]
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Class
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Outstanding as of October 22, 2014
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Common Stock, No par value
|
6,223,577
|
ASSETS
|
September 27, 2014
|
December 28, 2013
|
|||||
Current Assets
|
|||||||
Cash and cash equivalents
|
$
|
21,198,789
|
$
|
19,988,361
|
|||
Accounts receivable, less allowances: $461,000 - 2014; $410,000 - 2013
|
18,541,198
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16,284,603
|
|||||
Inventories
|
30,702,662
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30,657,612
|
|||||
Prepaid expenses and other assets
|
3,179,641
|
3,244,686
|
|||||
Deferred income taxes
|
818,662
|
818,662
|
|||||
Total Current Assets
|
74,440,952
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70,993,924
|
|||||
Property, Plant and Equipment
|
63,172,766
|
61,849,854
|
|||||
Accumulated depreciation
|
(36,002,525
|
)
|
(34,458,096
|
)
|
|||
27,170,241
|
27,391,758
|
||||||
Goodwill
|
13,791,518
|
13,842,047
|
|||||
Trademarks
|
174,662
|
173,177
|
|||||
Patents, technology, and other intangibles net of accumulated amortization
|
1,395,236
|
1,457,503
|
|||||
15,361,416
|
15,472,727
|
||||||
TOTAL ASSETS
|
$
|
116,972,609
|
$
|
113,858,409
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
September 27, 2014
|
December 28, 2013
|
|||||
Current Liabilities
|
|||||||
Accounts payable
|
$
|
8,589,710
|
$
|
7,302,368
|
|||
Accrued compensation
|
2,301,203
|
3,007,169
|
|||||
Other accrued expenses
|
1,290,712
|
1,519,338
|
|||||
Current portion of long-term debt
|
1,785,714
|
1,785,714
|
|||||
Total Current Liabilities
|
13,967,339
|
13,614,589
|
|||||
Deferred income taxes
|
1,412,833
|
1,111,755
|
|||||
Other long-term liabilities
|
248,417
|
248,417
|
|||||
Long-term debt, less current portion
|
3,214,286
|
4,285,714
|
|||||
Accrued postretirement benefits
|
2,367,640
|
2,232,872
|
|||||
Accrued pension cost
|
10,853,517
|
10,860,211
|
|||||
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: 8,918,306 shares in 2014 and 8,916,897 shares in 2013
|
28,644,073
|
28,621,582
|
|||||
Treasury Stock: 2,694,729 shares in 2014 and 2013
|
(19,105,723
|
)
|
(19,105,723
|
)
|
|||
Retained earnings
|
86,332,484
|
83,006,671
|
|||||
Accumulated other comprehensive income (loss):
|
|||||||
Foreign currency translation
|
1,485,885
|
1,983,506
|
|||||
Unrecognized net pension and postretirement benefit costs, net of tax
|
(12,448,142
|
)
|
(13,001,185
|
)
|
|||
Accumulated other comprehensive loss
|
(10,962,257
|
)
|
(11,017,679
|
)
|
|||
Total Shareholders’ Equity
|
84,908,577
|
81,504,851
|
|||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
116,972,609
|
$
|
113,858,409
|
Nine Months Ended
|
Three Months Ended
|
||||||||||||
September 27, 2014
|
September 28, 2013
|
September 27, 2014
|
September 28, 2013
|
||||||||||
Net sales
|
$
|
106,432,304
|
$
|
108,196,240
|
$
|
35,803,405
|
$
|
34,256,086
|
|||||
Cost of products sold
|
(82,501,121
|
)
|
(86,174,409
|
)
|
(27,161,932
|
)
|
(27,031,677
|
)
|
|||||
Gross margin
|
23,931,183
|
22,021,831
|
8,641,473
|
7,224,409
|
|||||||||
Selling and administrative expenses
|
(15,097,253
|
)
|
(14,671,986
|
)
|
(4,892,600
|
)
|
(4,767,505
|
)
|
|||||
Operating profit
|
8,833,930
|
7,349,845
|
3,748,873
|
2,456,904
|
|||||||||
Interest expense
|
(193,875
|
)
|
(249,481
|
)
|
(60,680
|
)
|
(78,629
|
)
|
|||||
Other income
|
37,996
|
36,660
|
14,030
|
8,201
|
|||||||||
Income before income taxes
|
8,678,051
|
7,137,024
|
3,702,223
|
2,386,476
|
|||||||||
Income taxes
|
3,049,846
|
2,158,699
|
1,270,406
|
587,693
|
|||||||||
Net income
|
$
|
5,628,205
|
$
|
4,978,325
|
$
|
2,431,817
|
$
|
1,798,783
|
|||||
Earnings per Share:
|
|||||||||||||
Basic
|
$
|
.90
|
$
|
.80
|
$
|
.39
|
$
|
.29
|
|||||
Diluted
|
$
|
.90
|
$
|
.80
|
$
|
.39
|
$
|
.29
|
|||||
Cash dividends per share:
|
$
|
.37
|
#
|
$
|
.31
|
$
|
.15
|
#
|
$
|
.11
|
Nine Months Ended
|
Three Months Ended
|
|||||||||||
September 27, 2014
|
September 28, 2013
|
September 27, 2014
|
September 28, 2013
|
|||||||||
Net income
|
$
|
5,628,205
|
$
|
4,978,325
|
$
|
2,431,817
|
$
|
1,798,783
|
||||
Other comprehensive income/(loss):
|
||||||||||||
Change in foreign currency translation
|
(497,620
|
)
|
(337,367
|
)
|
(444,848
|
)
|
199,495
|
|||||
Change in pension and postretirement benefit costs, net of taxes of:
2014 – $301,078 and $100,360, respectively
2013 – $442,866 and $149,033, respectively
|
553,043
|
811,003
|
184,348
|
272,919
|
||||||||
Total other comprehensive income/(loss)
|
55,423
|
473,636
|
(260,500
|
)
|
472,414
|
|||||||
Comprehensive income
|
$
|
5,683,628
|
$
|
5,451,961
|
$
|
2,171,317
|
$
|
2,271,197
|
Nine Months Ended
|
|||||||
September 27, 2014
|
September 28, 2013
|
||||||
Operating Activities
|
|||||||
Net income
|
$
|
5,628,205
|
$
|
4,978,325
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||
Depreciation and amortization
|
2,506,785
|
2,916,310
|
|||||
Loss on sale of equipment and other assets
|
105,511
|
28,065
|
|||||
Provision for doubtful accounts
|
71,229
|
76,201
|
|||||
Deferred income taxes
|
-
|
(1,959
|
)
|
||||
Issuance of Common Stock for directors’ fees
|
22,491
|
16,872
|
|||||
Changes in operating assets and liabilities:
|
|||||||
Accounts receivable
|
(2,448,174
|
)
|
(499,335
|
)
|
|||
Inventories
|
(207,873
|
)
|
(1,092,971
|
)
|
|||
Prepaid expenses and other
|
56,064
|
201,459
|
|||||
Prepaid pension cost
|
865,344
|
1,842,832
|
|||||
Recoverable taxes receivable
|
-
|
1,158,632
|
|||||
Other assets
|
(141,478
|
)
|
(59,685
|
)
|
|||
Accounts payable
|
1,357,742
|
655,352
|
|||||
Accrued compensation
|
(672,074
|
)
|
(960,059
|
)
|
|||
Other accrued expenses
|
(130,173
|
)
|
(1,366,903
|
)
|
|||
Net cash provided by operating activities
|
7,013,599
|
7,893,136
|
|||||
Investing Activities
|
|||||||
Purchases of property, plant and equipment
|
(2,292,872
|
)
|
(4,160,251
|
)
|
|||
Proceeds from sales of equipment and other assets
|
19,000
|
-
|
|||||
Net cash used in investing activities
|
(2,273,872
|
)
|
(4,160,251
|
)
|
|||
Financing Activities
|
|||||||
Principal payments on long-term debt
|
(1,071,428
|
)
|
(1,071,429
|
)
|
|||
Proceeds from sales of Common Stock
|
-
|
13,580
|
|||||
Dividends paid
|
(2,302,391
|
)
|
(1,928,439
|
)
|
|||
Net cash used in financing activities
|
(3,373,819
|
)
|
(2,986,288
|
)
|
|||
Effect of exchange rate changes on cash
|
(155,480
|
)
|
(147,996
|
)
|
|||
Net change in cash and cash equivalents
|
1,210,428
|
598,601
|
|||||
Cash and cash equivalents at beginning of period
|
19,988,361
|
18,482,144
|
|||||
Cash and cash equivalents at end of period
|
$
|
21,198,789
|
$
|
19,080,745
|
Nine Months Ended
|
Three Months Ended
|
||||||
September 27, 2014
|
September 28, 2013
|
September 27, 2014
|
September 28, 2013
|
||||
Basic:
|
|||||||
Weighted average shares outstanding
|
6,222,678
|
6,220,620
|
6,223,140
|
6,221,515
|
|||
Diluted:
|
|||||||
Weighted average shares outstanding
|
6,222,678
|
6,220,620
|
6,223,140
|
6,221,515
|
|||
Dilutive stock options
|
17,127
|
17,027
|
17,256
|
16,559
|
|||
Denominator for diluted earnings per share
|
6,239,805
|
6,237,647
|
6,240,396
|
6,238,074
|
September 27, 2014
|
December 28, 2013
|
||
Raw material and component parts
|
$ 8,259,016
|
$ 8,256,977
|
|
Work in process
|
4,943,129
|
4,925,001
|
|
Finished goods
|
17,500,517
|
17,475,634
|
|
$ 30,702,662
|
$ 30,657,612
|
Nine Months Ended
|
Three Months Ended
|
||||||||||||||||||
September 27, 2014
|
September 28, 2013
|
September 27, 2014
|
September 28, 2013
|
||||||||||||||||
Revenues:
|
|||||||||||||||||||
Sales to unaffiliated customers:
|
|||||||||||||||||||
Industrial Hardware
|
$
|
44,202,346
|
$
|
46,682,686
|
$
|
15,006,948
|
$
|
15,067,122
|
|||||||||||
Security Products
|
37,748,241
|
36,647,899
|
12,780,359
|
12,690,410
|
|||||||||||||||
Metal Products
|
24,481,717
|
24,865,655
|
8,016,098
|
6,498,554
|
|||||||||||||||
$
|
106,432,304
|
$
|
108,196,240
|
$
|
35,803,405
|
$
|
34,256,086
|
||||||||||||
Income before income taxes:
|
|||||||||||||||||||
Industrial Hardware
|
$
|
3,994,443
|
$
|
3,507,935
|
$
|
1,428,040
|
$
|
1,444,830
|
|||||||||||
Security Products
|
3,088,610
|
1,737,150
|
1,643,159
|
499,717
|
|||||||||||||||
Metal Products
|
1,750,877
|
2,104,760
|
677,674
|
512,357
|
|||||||||||||||
Operating Profit
|
8,833,930
|
7,349,845
|
3,748,873
|
2,456,904
|
|||||||||||||||
Interest expense
|
(193,875
|
)
|
(249,481
|
)
|
(60,680
|
)
|
(78,629
|
)
|
|||||||||||
Other income
|
37,996
|
36,660
|
14,030
|
8,201
|
|||||||||||||||
$
|
8,678,051
|
$
|
7,137,024
|
$
|
3,702,223
|
$
|
2,386,476
|
Industrial
Hardware
Segment
|
Security
Products
Segment
|
Metal
Products
Segment
|
Total
|
||||||||||
Beginning balance
|
$
|
2,008,231
|
$
|
11,833,816
|
$
|
—
|
$
|
13,842,047
|
|||||
Foreign exchange
|
(50,529
|
)
|
—
|
—
|
(50,529
|
)
|
|||||||
Ending balance
|
$
|
1,957,702
|
$
|
11,833,816
|
$
|
—
|
$
|
13,791,518
|
Industrial
Hardware
Segment
|
Security
Products
Segment
|
Metal
Products
Segment
|
Total
|
Weighted-Average
Amortization Period (Years)
|
|||||||||||
2014 Patents and developed
technology
|
|||||||||||||||
Gross Amount:
|
$
|
2,582,456
|
$
|
1,062,380
|
$
|
--
|
$
|
3,644,836
|
15.8
|
||||||
Accumulated Amortization:
|
1,690,710
|
558,890
|
--
|
2,249,600
|
|||||||||||
Net September 27, 2014 per Balance Sheet
|
$
|
891,746
|
$
|
503,490
|
$
|
--
|
$
|
1,395,236
|
2013 Patents and developed
technology
|
|||||||||||||||
Gross Amount:
|
$
|
2,595,931
|
$
|
1,041,250
|
$
|
--
|
$
|
3,637,181
|
16.0
|
||||||
Accumulated Amortization:
|
1,676,440
|
503,238
|
--
|
2,179,678
|
|||||||||||
Net December 28, 2013 per Balance Sheet
|
$
|
919,491
|
$
|
538,012
|
$
|
--
|
$
|
1,457,503
|
Pension Benefits
|
|||||||||||||
Nine Months Ended
|
Three Months Ended
|
||||||||||||
September 27,
2014
|
September 28,
2013
|
September 27,
2014
|
September 28,
2013
|
||||||||||
Service cost
|
$
|
2,095,271
|
$
|
2,259,723
|
$
|
698,423
|
$
|
755,661
|
|||||
Interest cost
|
2,487,835
|
2,130,467
|
829,278
|
710,350
|
|||||||||
Expected return on plan assets
|
(3,607,894
|
)
|
(3,302,736
|
)
|
(1,202,632
|
)
|
(1,100,912
|
)
|
|||||
Amortization of prior service cost
|
163,940
|
192,345
|
54,647
|
69,630
|
|||||||||
Amortization of the net loss
|
708,098
|
1,065,295
|
236,033
|
353,579
|
|||||||||
Net periodic benefit cost
|
$
|
1,847,250
|
$
|
2,345,094
|
$
|
615,749
|
$
|
788,308
|
Postretirement Benefits
|
|||||||||||||
Nine Months Ended
|
Three Months Ended
|
||||||||||||
September 27,
2014
|
September 28,
2013
|
September 27,
2014
|
September 28,
2013
|
||||||||||
Service cost
|
$
|
130,427
|
$
|
151,926
|
$
|
43,476
|
$
|
50,642
|
|||||
Interest cost
|
118,112
|
106,565
|
39,371
|
35,522
|
|||||||||
Expected return on plan assets
|
(71,109
|
)
|
(73,041
|
)
|
(23,703
|
)
|
(24,347
|
)
|
|||||
Amortization of prior service cost
|
(17,917
|
)
|
(17,916
|
)
|
(5,972
|
)
|
(5,972
|
)
|
|||||
Amortization of the net loss
|
--
|
14,145
|
--
|
4,715
|
|||||||||
Net periodic benefit cost
|
$
|
159,513
|
$
|
181,679
|
$
|
53,172
|
$
|
60,560
|
Nine Months Ended
September 27, 2014
|
Year Ended
December 28, 2013
|
|||||||||
Shares
|
Weighted - Average Exercise Price
|
Shares
|
Weighted - Average Exercise Price
|
|||||||
Outstanding at beginning of period
|
20,000
|
$
|
13.580
|
21,000
|
$
|
13.580
|
||||
Exercised
|
—
|
—
|
(1,000
|
)
|
13.580
|
|||||
Outstanding at end of period
|
20,000
|
13.580
|
20,000
|
13.580
|
Options Outstanding and Exercisable
|
|||
Range of Exercise Prices
|
Outstanding as of September 27, 2014
|
Weighted- Average Remaining Contractual Life
|
Weighted- Average Exercise Price
|
$13.58
|
20,000
|
0.2
|
$13.580
|
Three Months Ended September 27, 2014
|
||||
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost of products sold
|
74.4%
|
71.8%
|
85.1%
|
75.9%
|
Gross margin
|
25.6%
|
28.2%
|
14.9%
|
24.1%
|
Selling and administrative expense
|
16.1%
|
15.3%
|
6.5%
|
13.6%
|
Operating profit
|
9.5%
|
12.9%
|
8.4%
|
10.5%
|
Three Months Ended September 28, 2013
|
||||
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost of products sold
|
74.9%
|
81.0%
|
84.0%
|
78.9%
|
Gross margin
|
25.1%
|
19.0%
|
16.0%
|
21.1%
|
Selling and administrative expense
|
15.5%
|
15.0%
|
8.1%
|
13.9%
|
Operating profit
|
9.6%
|
4.0%
|
7.9%
|
7.2%
|
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
$ (60)
|
$ 90
|
$ 1,517
|
$ 1,547
|
Volume
|
-2.2%
|
-0.3%
|
21.4%
|
3.0%
|
Prices
|
-0.2%
|
0.4%
|
-0.3%
|
0.0%
|
New products
|
2.0%
|
0.6%
|
2.3%
|
1.5%
|
-0.4%
|
0.7%
|
23.4%
|
4.5%
|
|
Cost of products sold
|
$ (121)
|
$ (1,108)
|
$ 1,359
|
$ 130
|
-1.1%
|
-10.8%
|
24.9%
|
0.5%
|
|
Gross margin
|
$ 61
|
$ 1,198
|
$ 158
|
$ 1,417
|
1.6%
|
49.7%
|
15.2%
|
19.6%
|
|
Selling and administrative expenses
|
$ 78
|
$ 54
|
$ (7)
|
$ 125
|
3.3%
|
2.8%
|
-1.3%
|
2.6%
|
|
Operating profit
|
$ (17)
|
$ 1,144
|
$ 165
|
$ 1,292
|
-1.2%
|
228.8%
|
32.3%
|
52.6%
|
Nine Months Ended September 27, 2014
|
||||
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost of products sold
|
74.5%
|
75.6%
|
85.8%
|
77.5%
|
Gross margin
|
25.5%
|
24.4%
|
14.2%
|
22.5%
|
Selling and administrative expense
|
16.5%
|
16.2%
|
7.0%
|
14.2%
|
Operating profit
|
9.0%
|
8.2%
|
7.2%
|
8.3%
|
Nine Months Ended September 28, 2013
|
||||
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost of products sold
|
77.2%
|
79.5%
|
84.6%
|
79.6%
|
Gross margin
|
22.8%
|
20.5%
|
15.4%
|
20.4%
|
Selling and administrative expense
|
15.3%
|
15.8%
|
7.0%
|
13.6%
|
Operating profit
|
7.5%
|
4.7%
|
8.4%
|
6.8%
|
Industrial
|
Security
|
Metal
|
||
Hardware
|
Products
|
Products
|
Total
|
|
Net sales
|
$ (2,480)
|
$ 1,100
|
$ (384)
|
$ (1,764)
|
Volume
|
-8.2%
|
1.8%
|
-3.9%
|
-3.8%
|
Prices
|
-0.1%
|
0.2%
|
-0.2%
|
0.0%
|
New products
|
3.0%
|
1.0%
|
2.6%
|
2.2%
|
-5.3%
|
3.0%
|
-1.5%
|
-1.6%
|
|
Cost of products sold
|
$ (3,088)
|
$ (567)
|
$ (18)
|
$ (3,673)
|
-8.6%
|
-1.9%
|
-0.1%
|
-4.3%
|
|
Gross margin
|
$ 608
|
$ 1,667
|
$ (366)
|
$ 1,909
|
5.7%
|
22.1%
|
-9.5%
|
8.7%
|
|
Selling and administrative expenses
|
$ 121
|
$ 316
|
$ (12)
|
$ 425
|
1.7%
|
5.5%
|
-0.7%
|
2.9%
|
|
Operating profit
|
$ 487
|
$ 1,351
|
$ (354)
|
$ 1,484
|
13.9%
|
77.8%
|
-16.8%
|
20.2%
|
§
|
an increase of $0.1 million or 101% in foreign currency exchange;
|
§
|
an increase of $0.1 million or 48% in miscellaneous income;
|
§
|
a decrease of $0.2 million or 33% in depreciation costs;
|
§
|
and a decrease of $0.1 million or 3% in costs for payroll and payroll related charges.
|
§
|
an increase of $0.1 million or 116% in foreign currency exchange;
|
§
|
an increase of $0.1 million or 62% in engineering expense;
|
§
|
an increase of $0.1 million or 7% in supplies and tools;
|
§
|
a decrease of $2.2 million or 10% in raw materials;
|
§
|
a decrease of $0.4 million or 32% in depreciation expense;
|
§
|
a decrease of $0.4 million or 5% in costs for payroll and payroll related charges;
|
§
|
a decrease of $0.2 million or 53% in miscellaneous income;
|
§
|
a decrease of $0.1 million or 12% in other shipping expenses;
|
§
|
and a decrease of $0.1 million or 17% in rent expense.
|
§
|
an increase of $0.1 million or 7% in costs for payroll and payroll related charges.
|
§
|
an increase of $0.1 million or 1% in costs for payroll and payroll related charges.
|
§
|
an increase of $0.3 million or 18% in payroll and payroll related charges;
|
§
|
an increase of $0.3 million or 1,354% in shipping expenses;
|
§
|
an increase of $0.1 million or 27% in supplies and tools;
|
§
|
an increase of $0.1 million or 115% in costs for fire and liability insurance;
|
§
|
an increase of $0.1 million or 284% in miscellaneous taxes;
|
§
|
a decrease of $0.6 million or 100% in severance costs for relocation of a facility in China which occurred in the 2013 period;
|
§
|
and a decrease of $1.4 million or 20% in raw materials.
|
§
|
an increase of $0.9 million or 18% in payroll and payroll related charges;
|
§
|
an increase of $0.6 million or 672% in shipping expenses;
|
§
|
an increase of $0.2 million or 35% in supplies and tools;
|
§
|
an increase of $0.2 million or 392% in freight on sales;
|
§
|
an increase of $0.1 million or 88% in costs for fire and liability insurance;
|
§
|
an increase of $0.1 million or 1,606% for rental equipment;
|
§
|
an increase of $0.1 million or 160% related to costs for maintenance and repairs;
|
§
|
an increase of $0.1 million or 129% in miscellaneous taxes;
|
§
|
a decrease of $0.1 million or 60% for tools and jigs;
|
§
|
a decrease of $0.6 million or 100% in severance costs for relocation of a facility in China;
|
§
|
and a decrease of $2.2 million or 11% in raw materials.
|
§
|
an increase of $0.1 million or 5% in costs for payroll and payroll related charges.
|
§
|
an increase of $0.3 million or 6% in costs for payroll and payroll related charges.
|
§
|
an increase of $1.9 million or 427% in raw materials;
|
§
|
a decrease of $0.2 million or 35% related to costs for maintenance and repairs;
|
§
|
and a decrease of $0.3 million or 11% in costs for payroll and payroll related charges.
|
§
|
an increase of $0.7 million or 14% in raw materials;
|
§
|
an increase of $0.1 million or 3% in supplies and tools;
|
§
|
an increase of $0.1 million or 8% in utility costs;
|
§
|
a decrease of $0.8 million or 9% in costs for payroll and payroll related charges;
|
§
|
and a decrease of $0.1 million or 7% related to costs for maintenance and repairs.
|
Third
Quarter
2014
|
Third
Quarter
2013
|
Year
End
2013
|
|||||
Current ratio
|
5.3
|
5.5
|
5.2
|
||||
Average days’ sales in accounts receivable
|
48
|
50
|
47
|
||||
Inventory turnover
|
3.6
|
3.8
|
3.7
|
||||
Total debt to shareholders’ equity
|
5.9
|
%
|
8.6
|
%
|
7.4
|
%
|
Third
Quarter
2014
|
Third
Quarter
2013
|
Year
End
2013
|
||||||||
Cash and cash equivalents
|
|
|||||||||
- Held in the United States
|
$
|
11.3
|
$
|
8.5
|
$
|
10.2
|
||||
- Held by a foreign subsidiary
|
9.9
|
10.6
|
9.8
|
|||||||
21.2
|
19.1
|
20.0
|
||||||||
Working capital
|
60.5
|
59.4
|
57.4
|
|||||||
Net cash provided by operating activities
|
7.0
|
7.9
|
11.3
|
|||||||
Change in working capital impact on net cash
provided by operating activities
|
(1.3
|
)
|
(0.1
|
)
|
(0.2
|
)
|
||||
Net cash used in investing activities
|
(2.3
|
)
|
(4.2
|
)
|
(5.5
|
)
|
||||
Net cash used in financing activities
|
(3.4
|
)
|
(3.0
|
)
|
(4.0
|
)
|
THE EASTERN COMPANY
|
|
(Registrant)
|
|
DATE: October 24, 2014
|
/s/Leonard F. Leganza
|
Leonard F. Leganza
Chairman, President and Chief Executive Officer
|
|
DATE: October 24, 2014
|
/s/John L. Sullivan III
|
John L. Sullivan III
Vice President and Chief Financial Officer
|
1.
|
I have reviewed this report on Form 10-Q of The Eastern Company;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 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 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 report on Form 10-Q of The Eastern Company;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 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 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 September 27, 2014, 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
|
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