NOTE 4 - CONTRACTS

6 Months Ended

Jun. 29, 2013

Contractors [Abstract]

Long-term Contracts or Programs Disclosure [Text Block]

NOTE 4 – CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts consisted of the following at June 29, 2013 and December 29, 2012:

	June 29, 2013			December 29, 2012
	(dollars in thousands)
Costs incurred on uncompleted contracts	$	38,935		$	51,649
Estimated earnings (losses) on uncompleted contracts		7,607			3,216
Earned revenues		46,542			54,865
Less: billings to date		47,987			55,855
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	(1,445	)	$	(990	)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	1,876		$	3,840
Billings in excess of costs and estimated earnings on uncompleted contracts		(3,321	)		(4,830	)
Net billings in excess of costs and estimated earnings on uncompleted contracts	$	(1,445	)	$	(990	)

Revenue on fixed-price contracts is recorded primarily using the percentage-of-completion (cost-to-cost) method. Under this method, revenue on long-term contracts is recognized in the ratio that contract costs incurred bear to total estimated contract costs. Revenue and gross margin on fixed-price contracts are subject to revision throughout the lives of the contracts and any required adjustments are made in the period in which the revisions become known. To manage unknown risks, management may use contingency amounts to increase the estimated costs, therefore, lowering the earned revenues until the risks are better identified and quantified or have been mitigated. Losses on contracts are recorded in full as they are identified.

The Company recognizes service revenue as soon as the services are performed. For clients that we consider higher risk, due to past payment history or history of not providing written work authorizations, we defer revenue recognition until we receive either a written authorization or a payment. The current amount of revenue deferred for these reasons is approximately $0.7 million as of June 29, 2013, compared to $1.2 million as of December 29, 2012. We expect a majority of the deferred revenue amount to be realized by year end 2013.