NOTE 3 - CONTRACTS

9 Months Ended

Sep. 26, 2015

Long-term Contracts or Programs Disclosure [Text Block]

NOTE 3 – CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts consisted of the following at September 26, 2015 and December 27, 2014:

	September 26, 2015			December 27, 2014
	(dollars in thousands)
Costs incurred on uncompleted contracts	$	51,897		$	52,103
Estimated earnings (losses) on uncompleted contracts		19,921			19,543
Earned revenues		71,818			71,646
Less: billings to date		74,871			77,932
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	(3,053	)	$	(6,286	)

Costs and estimated earnings in excess of billings on uncompleted contracts	$	2,386		$	3,546
Billings in excess of costs and estimated earnings on uncompleted contracts		(5,439	)		(9,832	)
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	(3,053	)	$	(6,286	)

Revenue on fixed-price contracts is recorded primarily using the percentage-of-completion (cost-to-cost) method. 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. The Company currently has $2.8 million in contingency amounts as of September 26, 2015 compared to $2.9 million as of December 27, 2014. 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 the Company considers higher risk, due to past payment history or history of not providing written work authorizations, the Company has deferred revenue recognition until the Company receives written authorization or a payment. There is less than $0.01 million of revenue deferred as of September 26, 2015 compared to $0.3 million as of December 27, 2014.