|
[X]
|
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Connecticut
|
06-0330020
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(State or other jurisdiction of
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(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
112 Bridge Street, Naugatuck, Connecticut
|
06770
|
(Address of principal executive offices)
|
(Zip Code)
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Large accelerated filer [ ]
|
Accelerated filer [X]
|
Non-accelerated filer [ ] (Do not check if a smaller reporting company)
|
Smaller reporting company [ ]
|
Page
|
||
Table of Contents
|
2.
|
|
Safe Harbor Statement
|
3.
|
|
PART I
|
||
Item 1.
|
Business
|
3.
|
Item 1A.
|
Risk Factors
|
6.
|
Item 1B.
|
Unresolved Staff Comments
|
9.
|
Item 2.
|
Properties
|
9.
|
Item 3.
|
Legal Proceedings
|
10.
|
Item 4.
|
Mine Safety Disclosures
|
10.
|
PART II
|
||
Item 5.
|
Market for Registrant’s Common Equity, Related
|
|
Stockholder Matters and Issuer Purchases of Equity Securities
|
11.
|
|
Item 6.
|
Selected Financial Data
|
13.
|
Item 7.
|
Management’s Discussion and Analysis of Financial
|
|
Condition and Results of Operations
|
13.
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures
|
|
About Market Risk
|
27.
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
28.
|
Item 9.
|
Changes in and Disagreements with Accountants on
|
|
Accounting and Financial Disclosure
|
59.
|
|
Item 9A.
|
Controls and Procedures
|
59.
|
Item 9B.
|
Other Information
|
61.
|
PART III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
61.
|
Item 11.
|
Executive Compensation
|
61.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management
|
|
and Related Stockholder Matters
|
62.
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director
|
|
Independence
|
62.
|
|
Item 14.
|
Principal Accounting Fees and Services
|
62.
|
PART IV
|
||
Item 15.
|
Exhibits, Financial Statement Schedules
|
62.
|
Signatures
|
65.
|
|
Exhibit Index
|
66.
|
ITEM 1
|
BUSINESS
|
ITEM 1A
|
RISK FACTORS
|
ITEM 1B
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2
|
PROPERTIES
|
ITEM 3
|
LEGAL PROCEEDINGS
|
ITEM 4
|
MINE SAFETY DISCLOSURES
|
ITEM 5
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
2016
|
2015
|
|||||||
Market Price
|
Market Price
|
|||||||
Quarter
|
High
|
Low
|
Dividend
|
Quarter
|
High
|
Low
|
Dividend
|
|
First
|
$19.04
|
$15.01
|
$.11
|
First
|
$20.67
|
$16.75
|
$.11
|
|
Second
|
17.21
|
15.74
|
.11
|
Second
|
20.66
|
18.10
|
.11
|
|
Third
|
20.12
|
16.39
|
.11
|
Third
|
18.74
|
15.75
|
.12 #
|
|
Fourth
|
21.50
|
18.90
|
.11
|
Fourth
|
19.27
|
15.82
|
.11
|
Equity Compensation Plan Information
|
|||||
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||
(a)
|
(b)
|
(c)
|
|||
Equity compensation plans approved by security holders
|
-
|
-
|
500,0001
|
||
Equity compensation plans not approved by security holders
|
-
|
-
|
-
|
||
Total
|
-
|
-
|
500,000
|
Dec. 11
|
Dec. 12
|
Dec. 13
|
Dec. 14
|
Dec. 15
|
Dec. 16
|
|
The Eastern Company
|
$100
|
$82
|
$84
|
$93
|
$105
|
$120
|
Russell 2000
|
$100
|
$116
|
$162
|
$169
|
$162
|
$196
|
S&P Industrial Machinery
|
$100
|
$127
|
$186
|
$195
|
$188
|
$238
|
Copyright© 2017 Standard & Poor's, a division of S&P Global. All rights reserved.
|
||||||
Copyright© 2017 Russell Investment Group. All rights reserved.
|
2016
|
2015
|
2014
|
2013
|
2012
|
||
INCOME STATEMENT ITEMS (in thousands)
|
||||||
Net sales
|
$ 137,608
|
$ 144,568
|
$ 140,825
|
$ 142,458
|
$ 157,509
|
|
Cost of products sold
|
103,315
|
112,187
|
108,339
|
112,311
|
124,157
|
|
Depreciation and amortization
|
3,814
|
3,921
|
3,486
|
3,825
|
3,440
|
|
Interest expense
|
122
|
185
|
255
|
323
|
369
|
|
Income before income taxes
|
11,223
|
8,021
|
11,529
|
10,114
|
13,225
|
|
Income taxes
|
3,438
|
2,294
|
3,867
|
3,212
|
4,599
|
|
Net income
|
7,785
|
5,727
|
7,661
|
6,902
|
8,626
|
|
Dividends #
|
2,751
|
2,811
|
2,987
|
2,613
|
3,109
|
|
BALANCE SHEET ITEMS (in thousands)
|
||||||
Inventories
|
$ 34,030
|
$ 36,842
|
$ 34,402
|
$ 30,658
|
$ 29,385
|
|
Working capital
|
64,831
|
60,105
|
57,845
|
57,379
|
56,920
|
|
Property, plant and equipment, net
|
26,166
|
26,801
|
28,051
|
27,392
|
25,661
|
|
Total assets
|
124,198
|
121,739
|
121,271
|
113,858
|
115,854
|
|
Shareholders’ equity
|
82,468
|
79,405
|
74,975
|
81,505
|
71,582
|
|
Capital expenditures
|
2,863
|
2,538
|
3,633
|
5,524
|
4,217
|
|
Long-term obligations, less current portion
|
893
|
1,786
|
3,214
|
4,286
|
6,071
|
|
PER SHARE DATA
|
||||||
Net income per share
|
||||||
Basic
|
$ 1.25
|
$ .92
|
$ 1.23
|
$ 1.11
|
$ 1.39
|
|
Diluted
|
1.25
|
.92
|
1.23
|
1.11
|
1.38
|
|
Dividends #
|
.44
|
.45
|
.48
|
.42
|
.50
|
|
Shareholders’ equity (Basic)
|
13.19
|
12.71
|
12.04
|
13.10
|
11.51
|
|
Average shares outstanding:
|
Basic
|
6,251,535
|
6,245,057
|
6,225,068
|
6,220,928
|
6,216,931
|
Diluted
|
6,251,535
|
6,245,057
|
6,237,914
|
6,237,758
|
6,233,375
|
ITEM 7
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Summary
|
2016 Fourth Quarter
|
|||||||||||
Industrial
|
Security
|
Metal
|
|||||||||
Hardware
|
Products
|
Products
|
Total
|
||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|||
Cost of products sold
|
67.3
|
%
|
69.4
|
%
|
76.0
|
%
|
69.5
|
%
|
|||
Gross margin
|
32.7
|
%
|
30.6
|
%
|
24.0
|
%
|
30.5
|
%
|
|||
Selling and administrative expense
|
20.2
|
%
|
22.1
|
%
|
9.8
|
%
|
19.4
|
%
|
|||
Operating profit
|
12.5
|
%
|
8.5
|
%
|
14.2
|
%
|
11.1
|
%
|
|||
2015 Fourth Quarter
|
|||||||||||
Industrial
|
Security
|
Metal
|
|||||||||
Hardware
|
Products
|
Products
|
Total
|
||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|||
Cost of products sold
|
75.1
|
%
|
71.5
|
%
|
90.5
|
%
|
76.5
|
%
|
|||
Gross margin
|
24.9
|
%
|
28.5
|
%
|
9.5
|
%
|
23.5
|
%
|
|||
Selling and administrative expense
|
16.9
|
%
|
20.0
|
%
|
9.1
|
%
|
16.7
|
%
|
|||
Operating profit
|
8.0
|
%
|
8.5
|
%
|
0.4
|
%
|
6.8
|
%
|
Industrial
|
Security
|
Metal
|
|||||||||||
Hardware
|
Products
|
Products
|
Total
|
||||||||||
Net sales
|
$
|
265
|
$
|
397
|
$
|
(931
|
)
|
$
|
(269
|
)
|
|||
Volume
|
-10.5
|
%
|
-0.2
|
%
|
-16.3
|
%
|
-7.6
|
%
|
|||||
Prices
|
-0.6
|
%
|
-0.7
|
%
|
0.0
|
%
|
-0.5
|
%
|
|||||
New Products
|
12.8
|
%
|
3.9
|
%
|
1.2
|
%
|
7.3
|
%
|
|||||
1.8
|
%
|
3.0
|
%
|
-15.1
|
%
|
-0.8
|
%
|
||||||
Cost of products sold
|
$
|
(988
|
)
|
$
|
6
|
$
|
(1,605
|
)
|
$
|
(2,587
|
)
|
||
-8.7
|
%
|
.1
|
%
|
-28.7
|
%
|
-9.8
|
%
|
||||||
Gross margin
|
$
|
1,253
|
$
|
391
|
$
|
674
|
$
|
2,318
|
|||||
33.3
|
%
|
10.4
|
%
|
115.0
|
%
|
28.6
|
%
|
||||||
Selling and administrative expenses
|
$
|
541
|
$
|
373
|
$
|
(51
|
)
|
$
|
863
|
||||
21.1
|
%
|
14.2
|
%
|
-9.0
|
%
|
15.0
|
%
|
||||||
Operating profit
|
$
|
712
|
$
|
18
|
$
|
725
|
$
|
1,455
|
|||||
59.3
|
%
|
1.6
|
%
|
3,117
|
%
|
61.9
|
%
|
§
|
a decrease of $1.4 million or 19% in costs for payroll and payroll related charges;
|
§
|
a decrease of $0.7 million or 61% in supplies;
|
§
|
a decrease of $0.2 million or 41% in maintenance and repair costs;
|
§
|
a decrease of $0.2 million or 26% in shipping expenses;
|
§
|
a decrease of $0.2 million or 100% in outside finishing costs;
|
§
|
a decrease of $0.2 million or 26% in other shipping expenses;
|
§
|
a decrease of $0.1 million or 9% in depreciation expense;
|
§
|
a decrease of $0.1 million or 19% in utility expenses;
|
§
|
and an increase of $0.5 million or 3% in raw material costs;
|
§
|
an increase of $0.8 million or 20% in costs for payroll and payroll related charges;
|
§
|
an increase of $0.2 million or 32% in other administrative charges;
|
§
|
a decrease of $0.1 million or 451% in bad debt charges;
|
§
|
and a decrease of $0.1 million or 2% in advertising, commissions and royalties.
|
2016
|
2015
|
2014
|
|||
Discount rate
|
4.24% - 4.28%
|
3.90%
|
4.80%
|
||
Expected return on plan assets
|
8.0%
|
8.0%
|
8.0%
|
||
Rate of compensation increase
|
3.25%
|
3.25%
|
3.25%
|
Year ended
|
||||||||||
December 31
|
January 2
|
January 3
|
||||||||
2016
|
2016
|
2015
|
||||||||
Discount rate
|
$
|
(2,394,216
|
)
|
$
|
4,208,918
|
$
|
(11,046,554
|
)
|
||
Mortality table
|
--
|
--
|
(2,883,430
|
)
|
||||||
Additional recognition due to significant event
|
2,534,589
|
--
|
--
|
|||||||
Asset gain or loss
|
(4,358,254
|
)
|
(577,892
|
)
|
(257,073
|
)
|
||||
Amortization of:
|
||||||||||
Unrecognized gain or loss
|
1,610,942
|
1,947,102
|
944,130
|
|||||||
Unrecognized prior service cost
|
176,678
|
194,696
|
194,697
|
|||||||
Other
|
776,658
|
(415,479
|
)
|
(3,105,095
|
)
|
|||||
Comprehensive income, before tax
|
(1,653,603
|
)
|
5,357,345
|
(16,153,325
|
)
|
|||||
Income tax
|
(543,297
|
)
|
1,899,285
|
(5,767,236
|
)
|
|||||
Comprehensive income, net of tax
|
$
|
(1,110,306
|
)
|
$
|
3,458,060
|
$
|
(10,386,089
|
)
|
Industrial
|
Security
|
Metal
|
||||||||
Hardware
|
Products
|
Products
|
Total
|
|||||||
2016
|
||||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||
Cost of products sold
|
72.8
|
%
|
72.0
|
%
|
91.4
|
%
|
75.1
|
%
|
||
Gross margin
|
27.2
|
%
|
28.0
|
%
|
8.6
|
%
|
24.9
|
%
|
||
Selling and administrative expense
|
17.9
|
%
|
18.1
|
%
|
9.8
|
%
|
16.8
|
%
|
||
Operating profit
|
9.3
|
%
|
9.9
|
%
|
-1.2
|
%
|
8.1
|
%
|
||
2015
|
||||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||
Cost of products sold
|
74.8
|
%
|
74.4
|
%
|
90.8
|
%
|
77.6
|
%
|
||
Gross margin
|
25.2
|
%
|
25.6
|
%
|
9.2
|
%
|
22.4
|
%
|
||
Selling and administrative expense
|
18.2
|
%
|
18.9
|
%
|
9.5
|
%
|
16.8
|
%
|
||
Operating profit
|
7.0
|
%
|
6.7
|
%
|
-0.3
|
%
|
5.6
|
%
|
Industrial
|
Security
|
Metal
|
|||||||||||||||||
Hardware
|
Products
|
Products
|
Total
|
||||||||||||||||
Net sales
|
$
|
(280
|
)
|
$
|
657
|
$
|
(7,336
|
)
|
$
|
(6,959
|
)
|
||||||||
Volume
|
-8.1
|
%
|
0.4
|
%
|
-28.5
|
%
|
-8.5
|
%
|
|||||||||||
Prices
|
-0.6
|
%
|
-0.4
|
%
|
0.0
|
%
|
-0.4
|
%
|
|||||||||||
New Products
|
8.2
|
%
|
1.1
|
%
|
0.9
|
%
|
4.1
|
%
|
|||||||||||
-0.5
|
%
|
1.2
|
%
|
-27.5
|
%
|
-4.8
|
%
|
||||||||||||
Cost of products sold
|
$
|
(1,422
|
)
|
$
|
(899
|
)
|
$
|
(6,550
|
)
|
$
|
(8,871
|
)
|
|||||||
-3.1
|
%
|
-2.1
|
%
|
-27.1
|
%
|
-7.9
|
%
|
||||||||||||
Gross margin
|
$
|
1,142
|
$
|
1,556
|
$
|
(786
|
)
|
$
|
1,912
|
||||||||||
Selling and administrative expenses
|
$
|
(228
|
)
|
$
|
(323
|
)
|
$
|
(645
|
)
|
$
|
(1,196
|
)
|
|||||||
2.0
|
%
|
-3.0
|
%
|
-25.4
|
%
|
-4.9
|
%
|
||||||||||||
Operating profit
|
$
|
1,370
|
$
|
1,879
|
$
|
(141
|
)
|
$
|
3,108
|
||||||||||
31.7
|
%
|
49.5
|
%
|
-166.3
|
%
|
38.7
|
%
|
§
|
a decrease of $0.9 million or 4% in raw materials;
|
§
|
a decrease of $0.6 million or 4% in costs for payroll and payroll related charges;
|
§
|
a decrease of $0.1 million or 9% for supplies and tools;
|
§
|
a decrease of $0.1 million or 8% in depreciation charges;
|
§
|
a decrease of $0.2 million or 94% in miscellaneous income;
|
§
|
and an increase of $0.2 million or 46% in foreign exchange costs.
|
§
|
a decrease of $0.3 million or 4% in payroll and payroll related charges;
|
§
|
and increase of $0.1 million or 12% in administrative charges.
|
§
|
a decrease of $0.4 million or 2% in raw materials;
|
§
|
a decrease of $0.9 million or 11% in payroll and payroll related charges;
|
§
|
an increase of $0.2 million or 57% in foreign exchange gains;
|
§
|
an increase of $0.1 million or 12% in engineering costs;
|
§
|
an increase of $0.1 million or 8% in supplies and tools;
|
§
|
and an increase of $0.1 million or 30% in insurance costs.
|
§
|
a decrease of $0.3 million or 4% in payroll and payroll related charges;
|
§
|
a decrease of $0.1 million or 278% in bad debt charges;
|
§
|
a decrease of $0.1 million or 21% in commissions and royalty expenses;
|
§
|
and an increase of $0.3 million or 27% in other administration expenses.
|
§
|
a decrease of $3.8 million or 39% in costs for payroll and payroll related charges;
|
§
|
a decrease of $2.1 million or 61% for supplies and tools;
|
§
|
a decrease of $0.9 million or 53% in costs for maintenance and repair;
|
§
|
a decrease of $0.6 million or 34% for utility costs;
|
§
|
an increase of $0.8 million or 18% in raw materials;
|
§
|
and an increase of $0.2 million or 299% in tools and jigs costs.
|
§
|
a decrease of $0.5 million or 29% in payroll and payroll related charges;
|
§
|
and a decrease of $0.1 million or 72% in commissions and royalty charges.
|
Amount
|
%
|
||||||
Interest expense
|
$
|
(64
|
)
|
-35
|
%
|
||
Other income
|
$
|
30
|
17
|
%
|
|||
Income taxes
|
$
|
1,114
|
50
|
%
|
Industrial
|
Security
|
Metal
|
||||||||
Hardware
|
Products
|
Products
|
Total
|
|||||||
2015
|
||||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||
Cost of products sold
|
74.8
|
%
|
74.4
|
%
|
90.8
|
%
|
77.6
|
%
|
||
Gross margin
|
25.2
|
%
|
25.6
|
%
|
9.2
|
%
|
22.4
|
%
|
||
Selling and administrative expense
|
18.2
|
%
|
18.9
|
%
|
9.5
|
%
|
16.8
|
%
|
||
Operating profit
|
7.0
|
%
|
6.7
|
%
|
-0.3
|
%
|
5.6
|
%
|
||
2014
|
||||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||
Cost of products sold
|
74.4
|
%
|
74.9
|
%
|
84.6
|
%
|
76.9
|
%
|
||
Gross margin
|
25.6
|
%
|
25.1
|
%
|
15.4
|
%
|
23.1
|
%
|
||
Selling and administrative expense
|
17.0
|
%
|
16.9
|
%
|
7.5
|
%
|
14.8
|
%
|
||
Operating profit
|
8.6
|
%
|
8.2
|
%
|
7.9
|
%
|
8.3
|
%
|
Industrial
|
Security
|
Metal
|
|||||||||||||||||
Hardware
|
Products
|
Products
|
Total
|
||||||||||||||||
Net sales
|
$
|
2,673
|
$
|
7,217
|
$
|
(6,147
|
)
|
$
|
3,743
|
||||||||||
Volume
|
-6.7
|
%
|
3.0
|
%
|
-20.3
|
%
|
-6.4
|
%
|
|||||||||||
Prices
|
0.2
|
%
|
0.2
|
%
|
0.0
|
%
|
0.1
|
%
|
|||||||||||
New Products
|
11.1
|
%
|
11.4
|
%
|
1.5
|
%
|
9.0
|
%
|
|||||||||||
4.6
|
%
|
14.6
|
%
|
-18.8
|
%
|
2.7
|
%
|
||||||||||||
Cost of products sold
|
$
|
2,275
|
$
|
5,135
|
$
|
(3,562
|
)
|
$
|
3,848
|
||||||||||
5.2
|
%
|
13.9
|
%
|
-12.8
|
%
|
3.6
|
%
|
||||||||||||
Gross margin
|
$
|
398
|
$
|
2,082
|
$
|
(2,585
|
)
|
$
|
(105
|
)
|
|||||||||
2.6
|
%
|
16.8
|
%
|
-51.3
|
%
|
-0.3
|
%
|
||||||||||||
Selling and administrative expenses
|
$
|
1,147
|
$
|
2,343
|
$
|
96
|
$
|
3,586
|
|||||||||||
11.5
|
%
|
28.1
|
%
|
3.9
|
%
|
17.3
|
%
|
||||||||||||
Operating profit
|
$
|
(750
|
)
|
$
|
(260
|
)
|
$
|
(2,681
|
)
|
$
|
(3,691
|
)
|
|||||||
-14.8
|
%
|
-6.4
|
%
|
-103.3
|
%
|
-31.5
|
%
|
§
|
an increase of $0.7 million or 3% in raw materials;
|
§
|
an increase of $0.6 million or 158% in pension costs;
|
§
|
an increase of $0.2 million or 1% in costs for payroll and payroll related charges;
|
§
|
an increase of $0.2 million or 16% for supplies and tools;
|
§
|
an increase of $0.1 million or 13% in shipping expenses;
|
§
|
an increase of $0.1 million or 31% in rent expense;
|
§
|
and a decrease of $0.3 million or 50% for scrap sales.
|
§
|
an increase of $0.8 million or 100% in allocated proxy contest costs;
|
§
|
and an increase of $0.3 million or 13% in payroll and payroll related charges.
|
§
|
an increase of $2.9 million or 13% in raw materials;
|
§
|
an increase of $1.1 million or 16% in payroll and payroll related charges;
|
§
|
an increase of $0.8 million or 110% in pension charges;
|
§
|
an increase of $0.3 million or 396% in foreign exchange gains;
|
§
|
an increase of $0.2 million or 54% in other miscellaneous expenses
|
§
|
an increase of $0.1 million or 9% in shipping expenses;
|
§
|
an increase of $0.1 million or 12% in engineering costs;
|
§
|
an increase of $0.1 million or 33% in depreciation expenses;
|
§
|
a decrease of $0.3 million or 27% in supplies and tools;
|
§
|
and a decrease of $0.1 million or 23% in insurance costs.
|
§
|
an increase of $0.8 million or 15% in payroll and payroll related charges;
|
§
|
an increase of $0.8 million or 100% in allocated proxy contest costs;
|
§
|
an increase of $0.3 million or 39% in other administrative expenses;
|
§
|
an increase of $0.1 million or 75% in D&O insurance expense;
|
§
|
and an increase of $0.2 million or 286% in patent amortization expenses.
|
§
|
an increase of $0.2 million or 67% in scrap costs;
|
§
|
an increase of $0.2 million or 155% in pension charges;
|
§
|
an increase of $0.1 million or 9% in depreciation expense;
|
§
|
a decrease of $2.2 million or 35% in raw material costs;
|
§
|
a decrease of $0.8 million or 7% in costs for payroll and payroll related charges;
|
§
|
a decrease of $0.4 million or 10% for supplies and tools;
|
§
|
a decrease of $0.3 million or 14% for utility costs;
|
§
|
and a decrease of $0.3 million or 14% in costs for maintenance and repair.
|
§
|
an increase of $0.4 million or 100% in allocated proxy contest charges;
|
§
|
and a decrease of $0.2 million or 31% in payroll and payroll related charges;
|
Amount
|
%
|
||||||
Interest expense
|
$
|
(69
|
)
|
-27
|
%
|
||
Other income
|
$
|
114
|
176
|
%
|
|||
Income taxes
|
$
|
(1,573
|
)
|
-41
|
%
|
2016
|
2015
|
2014
|
|||||
Current ratio
|
6.0
|
5.0
|
5.3
|
||||
Average days’ sales in accounts receivable
|
49
|
47
|
49
|
||||
Inventory turnover
|
3.0
|
3.0
|
3.1
|
||||
Ratio of working capital to sales
|
47.1
|
%
|
41.6
|
%
|
41.1
|
%
|
|
Total debt to shareholders’ equity
|
2.2
|
%
|
4.0
|
%
|
5.7
|
%
|
2016
|
2015
|
2014
|
|||||
Cash and cash equivalents
|
|||||||
- Held in the United States
|
$
|
11.2
|
$
|
6.9
|
$
|
5.6
|
|
- Held by foreign subsidiary
|
11.5
|
10.9
|
10.2
|
||||
22.7
|
17.8
|
15.8
|
|||||
Working capital
|
64.8
|
60.1
|
57.8
|
||||
Net cash provided by operating activities
|
12.4
|
9.1
|
9.3
|
||||
Change in working capital impact on net cash
(used)/provided by operating activities
|
(0.5
|
)
|
(2.0
|
)
|
(1.8
|
)
|
|
Net cash used in investing activities
|
(2.9
|
)
|
(2.5
|
)
|
(8.6
|
)
|
|
Net cash (used in)/provided by financing activities
|
(4.2
|
)
|
(3.9
|
)
|
(4.5
|
)
|
Payments due by period
|
||||||||||||||||
Total
|
Less than 1 Year
|
1-3 Years
|
3-5 Years
|
More than 5 Years
|
||||||||||||
Long-term debt obligations
|
$
|
1,786
|
$
|
893
|
$
|
893
|
$
|
--
|
$
|
--
|
||||||
Estimated interest on long-term debt
|
70
|
49
|
21
|
--
|
--
|
|||||||||||
Operating lease obligations
|
3,986
|
1,218
|
1,886
|
800
|
82
|
|||||||||||
Estimated contributions to pension plans
|
26,632
|
877
|
6,096
|
7,466
|
12,193
|
|||||||||||
Estimated other postretirement benefits
other than pensions
|
1,052
|
103
|
213
|
224
|
512
|
|||||||||||
Total
|
$
|
33,526
|
$
|
3,140
|
$
|
9,109
|
$
|
8,490
|
$
|
12,787
|
December 31
|
January 2
|
||||||
2016
|
2016
|
||||||
ASSETS
|
|||||||
Current Assets
|
|||||||
Cash and cash equivalents
|
$
|
22,725,376
|
$
|
17,814,986
|
|||
Accounts receivable, less allowances of $430,000 in 2016 and $450,000 in 2015
|
18,135,792
|
17,502,445
|
|||||
Inventories:
|
|||||||
Raw materials and component parts
|
8,829,236
|
10,913,827
|
|||||
Work in process
|
7,118,149
|
7,681,576
|
|||||
Finished goods
|
18,082,901
|
18,247,010
|
|||||
34,030,286
|
36,842,413
|
||||||
Prepaid expenses and other assets
|
1,858,471
|
2,122,215
|
|||||
Deferred income taxes
|
947,001
|
986,167
|
|||||
Total Current Assets
|
77,696,926
|
75,268,226
|
|||||
Property, Plant and Equipment
|
|||||||
Land
|
1,159,901
|
1,159,732
|
|||||
Buildings
|
16,303,521
|
16,072,536
|
|||||
Machinery and equipment
|
47,447,649
|
46,205,973
|
|||||
Accumulated depreciation
|
(38,745,557
|
)
|
(36,636,775
|
)
|
|||
26,165,514
|
26,801,466
|
||||||
Other Assets
|
|||||||
Goodwill
|
14,819,835
|
14,790,793
|
|||||
Trademarks
|
166,312
|
164,957
|
|||||
Patents, technology and other intangibles net of accumulated amortization
|
1,764,449
|
2,113,576
|
|||||
Deferred income taxes
|
3,585,360
|
2,599,541
|
|||||
20,335,956
|
19,668,867
|
||||||
TOTAL ASSETS
|
$
|
124,198,396
|
$
|
121,738,559
|
December 31
|
January 2
|
||||||
2016
|
2016
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
Current Liabilities
|
|||||||
Accounts payable
|
$
|
7,048,174
|
$
|
9,109,394
|
|||
Accrued compensation
|
3,112,404
|
2,873,871
|
|||||
Other accrued expenses
|
1,812,647
|
1,751,052
|
|||||
Current portion of long-term debt
|
892,857
|
1,428,571
|
|||||
Total Current Liabilities
|
12,866,082
|
15,162,888
|
|||||
Other long-term liabilities
|
288,805
|
286,920
|
|||||
Long-term debt, less current portion
|
892,857
|
1,785,714
|
|||||
Accrued other postretirement benefits
|
1,051,700
|
793,055
|
|||||
Accrued pension cost
|
26,631,438
|
24,304,926
|
|||||
Commitments and contingencies (See Note 4)
|
|||||||
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: 8,950,827 shares in 2016 and 8,942,461 shares in 2015
|
|||||||
Outstanding: 6,256,098 shares in 2016 and 6,247,732 shares in 2015
|
29,146,622
|
28,997,050
|
|||||
Treasury Stock: 2,694,729 shares in 2016 and 2015
|
(19,105,723
|
)
|
(19,105,723
|
)
|
|||
Retained earnings
|
95,631,216
|
90,597,041
|
|||||
Accumulated other comprehensive income (loss):
|
|||||||
Foreign currency translation
|
(2,165,081
|
)
|
(1,154,098
|
)
|
|||
Unrecognized net pension and other postretirement benefit costs, net of taxes
|
(21,039,520
|
)
|
(19,929,214
|
)
|
|||
Accumulated other comprehensive loss
|
(23,204,601
|
)
|
(21,083,312
|
)
|
|||
Total Shareholders’ Equity
|
82,467,514
|
79,405,056
|
|||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
124,198,396
|
$
|
121,738,559
|
Year ended
|
||||||||||
December 31
|
January 2
|
January 3
|
||||||||
2016
|
2016
|
2015
|
||||||||
Net sales
|
$
|
137,608,258
|
$
|
144,567,951
|
$
|
140,825,360
|
||||
Cost of products sold
|
(103,315,387
|
)
|
(112,186,725
|
)
|
(108,338,956
|
)
|
||||
Gross margin
|
34,292,871
|
32,381,226
|
32,486,404
|
|||||||
Selling and administrative expenses
|
(23,156,999
|
)
|
(24,353,498
|
)
|
(20,767,756
|
)
|
||||
Operating profit
|
11,135,872
|
8,027,728
|
11,718,648
|
|||||||
Interest expense
|
(121,500
|
)
|
(185,475
|
)
|
(254,576
|
)
|
||||
Other income
|
209,043
|
178,722
|
64,691
|
|||||||
Income before income taxes
|
11,223,415
|
8,020,975
|
11,528,763
|
|||||||
Income taxes
|
3,438,092
|
2,293,932
|
3,867,287
|
|||||||
Net income
|
$
|
7,785,323
|
$
|
5,727,043
|
$
|
7,661,476
|
||||
Earnings per Share:
|
||||||||||
Basic
|
$
|
1.25
|
$
|
.92
|
$
|
1.23
|
||||
Diluted
|
$
|
1.25
|
$
|
.92
|
$
|
1.23
|
Year ended
|
||||||||||
December 31
|
January 2
|
January 3
|
||||||||
2016
|
2016
|
2015
|
||||||||
Net income
|
$
|
7,785,323
|
$
|
5,727,043
|
$
|
7,661,476
|
||||
Other comprehensive income/(loss) -
|
||||||||||
Change in foreign currency translation
|
(1,010,983
|
)
|
(2,009,277
|
)
|
(1,128,327
|
)
|
||||
Change in pension and other postretirement benefit costs, net of income taxes (expense)/benefit of ($543,297) in 2016, $1,899,285 in 2015 and $5,767,236 in 2014
|
(1,110,306
|
)
|
3,458,060
|
(10,386,089
|
)
|
|||||
Total other comprehensive income/(loss)
|
(931,548
|
)
|
1,448,783
|
(11,514,416
|
)
|
|||||
Comprehensive income/(loss)
|
$
|
5,664,034
|
$
|
7,175,826
|
$
|
(3,852,940
|
)
|
Common Shares
|
Common
Stock
|
Treasury
Shares
|
Treasury
Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Shareholders’
Equity
|
||||||||||||||
Balances at December 28, 2013
|
8,916,897
|
$
|
28,621,582
|
(2,694,729
|
)
|
$
|
(19,105,723
|
)
|
$
|
83,006,671
|
$
|
(11,017,679
|
)
|
$
|
81,504,851
|
|||||
Net income
|
7,661,476
|
7,661,476
|
||||||||||||||||||
Cash dividends declared, $.48 per share
|
(2,987,480
|
)
|
(2,987,480
|
)
|
||||||||||||||||
Currency translation adjustment
|
(1,128,327
|
)
|
(1,128,327
|
)
|
||||||||||||||||
Change in pension and other postretirement benefit costs, net of tax
|
(10,386,089
|
)
|
(10,386,089
|
)
|
||||||||||||||||
Issuance of Common Stock upon the exercise of stock options
|
20,000
|
271,600
|
271,600
|
|||||||||||||||||
Tax benefit from
|
||||||||||||||||||||
disqualifying
|
||||||||||||||||||||
dispositions of
|
||||||||||||||||||||
incentive stock options
|
8,882
|
8,882
|
||||||||||||||||||
Issuance of Common Stock for directors’ fees
|
1,845
|
29,994
|
29,994
|
|||||||||||||||||
Balances at January 3, 2015
|
8,938,742
|
28,932,058
|
(2,694,729
|
)
|
(19,105,723
|
)
|
87,680,667
|
(22,532,095
|
)
|
74,974,907
|
||||||||||
Net income
|
5,727,043
|
5,727,043
|
||||||||||||||||||
Cash dividends declared, $.45 per share
|
(2,810,669
|
)
|
(2,810,669
|
)
|
||||||||||||||||
Currency translation adjustment
|
(2,009,277
|
)
|
(2,009,277
|
)
|
||||||||||||||||
Change in pension and other postretirement benefit costs, net of tax
|
3,458,060
|
3,458,060
|
||||||||||||||||||
Issuance of Common Stock for directors’ fees
|
3,719
|
64,992
|
64,992
|
|||||||||||||||||
Balances at January 2, 2016
|
8,942,461
|
28,997,050
|
(2,694,729
|
)
|
(19,105,723
|
)
|
90,597,041
|
(21,083,312
|
)
|
79,405,056
|
||||||||||
Net income
|
7,785,323
|
7,785,323
|
||||||||||||||||||
Cash dividends declared, $.44 per share
|
(2,751,148
|
)
|
(2,751,148
|
)
|
||||||||||||||||
Currency translation adjustment
|
(1,010,983
|
)
|
(1,010,983
|
)
|
||||||||||||||||
Change in pension and other postretirement benefit costs, net of tax
|
(1,110,306
|
)
|
(1,110,306
|
)
|
||||||||||||||||
Issuance of Common Stock for directors’ fees
|
8,366
|
149,572
|
149,572
|
|||||||||||||||||
Balances at December 31, 2016
|
8,950,827
|
$
|
29,146,622
|
(2,694,729
|
)
|
$
|
(19,105,723
|
)
|
$
|
95,631,216
|
$
|
(23,204,601
|
)
|
$
|
82,467,514
|
Year ended
|
||||||||||
December 31
|
January 2
|
January 3
|
||||||||
2016
|
2016
|
2015
|
||||||||
Operating Activities
|
||||||||||
Net income
|
$
|
7,785,323
|
$
|
5,727,043
|
$
|
7,661,476
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||
Depreciation and amortization
|
3,814,393
|
3,921,438
|
3,486,302
|
|||||||
Unrecognized pension & other postretirement benefits
|
931,554
|
1,384,605
|
(175,687
|
)
|
||||||
Loss on sale of equipment and other assets
|
73,309
|
49,796
|
69,258
|
|||||||
Provision for doubtful accounts
|
120,252
|
9,459
|
37,601
|
|||||||
Issuance of Common Stock for directors’ fees
|
149,572
|
64,992
|
29,994
|
|||||||
Changes in operating assets and liabilities:
|
||||||||||
Accounts receivable
|
(1,062,654
|
)
|
(852,168
|
)
|
(207,631
|
)
|
||||
Inventories
|
2,514,371
|
(3,095,801
|
)
|
(2,825,155
|
)
|
|||||
Prepaid expenses
|
217,389
|
483,178
|
593,075
|
|||||||
Recoverable tax receivables
|
—
|
380,000
|
(380,000
|
)
|
||||||
Other assets
|
(84,626
|
)
|
(106,081
|
)
|
(156,164
|
)
|
||||
Accounts payable
|
(1,755,159
|
)
|
1,182,124
|
998,502
|
||||||
Accrued compensation
|
261,231
|
28,426
|
185,724
|
|||||||
Other accrued expenses
|
(549,715
|
)
|
(43,582
|
)
|
29,889
|
|||||
Net cash provided by operating activities
|
12,415,240
|
9,133,429
|
9,347,184
|
|||||||
Investing Activities
|
||||||||||
Purchases of property, plant and equipment
|
(2,863,470
|
)
|
(2,538,236
|
)
|
(3,633,165
|
)
|
||||
Proceeds from sale of equipment and other assets
|
8,350
|
25,000
|
22,500
|
|||||||
Business acquisitions
|
—
|
—
|
(5,034,289
|
)
|
||||||
Net cash used in investing activities
|
(2,855,120
|
)
|
(2,513,236
|
)
|
(8,644,954
|
)
|
||||
Financing Activities
|
||||||||||
Principal payments on long-term debt
|
(1,428,571
|
)
|
(1,071,428
|
)
|
(1,785,714
|
)
|
||||
Proceeds from sales of Common Stock
|
—
|
—
|
271,600
|
|||||||
Tax benefit from disqualifying dispositions of incentive stock options
|
—
|
—
|
8,882
|
|||||||
Dividends paid
|
(2,751,148
|
)
|
(2,810,669
|
)
|
(2,987,480
|
)
|
||||
Net cash used in financing activities
|
(4,179,719
|
)
|
(3,882,097
|
)
|
(4,492,712
|
)
|
||||
Effect of exchange rate changes on cash
|
(470,011
|
)
|
(757,554
|
)
|
(363,435
|
)
|
||||
Net change in cash and cash equivalents
|
4,910,390
|
1,980,542
|
(4,153,917
|
)
|
||||||
Cash and cash equivalents at beginning of year
|
17,814,986
|
15,834,444
|
19,988,361
|
|||||||
Cash and cash equivalents at end of year
|
$
|
22,725,376
|
$
|
17,814,986
|
$
|
15,834,444
|
Industrial
Hardware
Segment
|
Security
Products
Segment
|
Metal
Products
Segment
|
Total
|
Weighted-Average
Amortization Period (Years)
|
|||||||||||||
2016 Gross Amount
|
|||||||||||||||||
Patents and developed technology
|
$
|
2,159,060
|
$
|
1,035,374
|
$
|
—
|
$
|
3,194,434
|
15.6
|
||||||||
Customer relationships
|
—
|
449,706
|
—
|
449,706
|
5.0
|
||||||||||||
Non-compete agreements
|
—
|
407,000
|
—
|
407,000
|
5.0
|
||||||||||||
Intellectual property
|
—
|
307,370
|
—
|
307,370
|
5.0
|
||||||||||||
Total Gross Intangibles
|
$
|
2,159,060
|
$
|
2,199,450
|
$
|
—
|
$
|
4,358,510
|
12.3
|
||||||||
2016 Accumulated Amortization
|
|||||||||||||||||
Patents and developed technology
|
$
|
1,529,675
|
$
|
598,756
|
$
|
—
|
$
|
2,128,431
|
|||||||||
Customer relationships
|
—
|
179,882
|
—
|
179,882
|
|||||||||||||
Non-compete agreements
|
—
|
162,800
|
—
|
162,800
|
|||||||||||||
Intellectual property
|
—
|
122,948
|
—
|
122,948
|
|||||||||||||
Accumulated Amortization
|
$
|
1,529,675
|
$
|
1,064,386
|
$
|
—
|
$
|
2,594,061
|
|||||||||
Net 2016 per Balance Sheet
|
$
|
629,385
|
$
|
1,135,064
|
$
|
—
|
$
|
1,764,449
|
|||||||||
2015 Gross Amount
|
|||||||||||||||||
Patents and developed technology
|
$
|
2,206,852
|
$
|
1,029,181
|
$
|
—
|
$
|
3,236,033
|
15.9
|
||||||||
Customer relationships
|
—
|
449,706
|
—
|
449,706
|
5.0
|
||||||||||||
Non-compete agreements
|
—
|
407,000
|
—
|
407,000
|
5.0
|
||||||||||||
Intellectual property
|
—
|
307,370
|
—
|
307,370
|
5.0
|
||||||||||||
Total Gross Intangibles
|
$
|
2,206,852
|
$
|
2,193,257
|
$
|
—
|
$
|
4,400,109
|
12.6
|
||||||||
2015 Accumulated Amortization
|
|||||||||||||||||
Patents and developed technology
|
$
|
1,478,692
|
$
|
575,026
|
$
|
—
|
$
|
2,053,718
|
|||||||||
Customer relationships
|
—
|
89,941
|
—
|
89,941
|
|||||||||||||
Non-compete agreements
|
—
|
81,400
|
—
|
81,400
|
|||||||||||||
Intellectual property
|
—
|
61,474
|
—
|
61,474
|
|||||||||||||
Accumulated Amortization
|
$
|
1,478,692
|
$
|
807,841
|
$
|
—
|
$
|
2,286,533
|
|||||||||
Net 2015 per Balance Sheet
|
$
|
728,160
|
$
|
1,385,416
|
$
|
—
|
$
|
2,113,576
|
|||||||||
Industrial
Hardware
Segment
|
Security
Products
Segment
|
Metal
Products
Segment
|
Total
|
||||||||||
2016
|
|||||||||||||
Beginning balance
|
$
|
1,731,751
|
$
|
13,059,042
|
$
|
—
|
$
|
14,790,793
|
|||||
Foreign exchange
|
29,042
|
—
|
—
|
29,042
|
|||||||||
Ending balance
|
$
|
1,760,793
|
$
|
13,059,042
|
$
|
—
|
$
|
14,819,835
|
Industrial
Hardware
Segment
|
Security
Products
Segment
|
Metal
Products
Segment
|
Total
|
||||||||||
2015
|
|||||||||||||
Beginning balance
|
$
|
1,901,312
|
$
|
13,059,042
|
$
|
—
|
$
|
14,960,354
|
|||||
Foreign exchange
|
(169,561
|
)
|
—
|
—
|
(169,561
|
)
|
|||||||
Ending balance
|
$
|
1,731,751
|
$
|
13,059,042
|
$
|
—
|
$
|
14,790,793
|
2016
|
2015
|
2014
|
|||||
Basic:
|
|||||||
Weighted average shares outstanding
|
6,251,535
|
6,245,057
|
6,225,068
|
||||
Diluted:
|
|||||||
Weighted average shares outstanding
|
6,251,535
|
6,245,057
|
6,225,068
|
||||
Dilutive stock options
|
—
|
—
|
12,846
|
||||
Denominator for diluted earnings per share
|
6,251,535
|
6,245,057
|
6,237,914
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted
assets or liabilities.
|
Level 2
|
Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for
substantially the full term of the asset or liability.
|
Level 3
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and
unobservable.
|
Asset Class/Description
|
Amount
|
Weighted-average Amortization Period in Years
|
Patents, technology, and licenses
|
||
Customer relationships
|
$ 449,706
|
5.0
|
Intellectual property
|
307,370
|
5.0
|
Non-compete agreements
|
407,000
|
5.0
|
$ 1,164,076
|
5.0
|
2016
|
2015
|
||||||
Term loans
|
$
|
1,785,714
|
$
|
3,214,285
|
|||
Revolving credit loan
|
—
|
—
|
|||||
1,785,714
|
3,214,285
|
||||||
Less current portion
|
892,857
|
1,428,571
|
|||||
$
|
892,857
|
$
|
1,785,714
|
2017
|
$
|
892,857
|
||
2018
|
714,286
|
|||
2019
|
178,571
|
|||
2020
|
—
|
|||
2021
|
—
|
|||
Thereafter
|
—
|
|||
$
|
1,785,714
|
Shares
|
Weighted Average
Exercise Price
|
||||||
Outstanding at December 28, 2013
|
20,000
|
$13.58
|
|||||
Exercised
|
(20,000
|
)
|
13.58
|
||||
Outstanding at January 3, 2015
|
—
|
||||||
Exercised
|
—
|
||||||
Outstanding at January 2, 2016
|
—
|
||||||
Exercised
|
—
|
||||||
Outstanding at December 31, 2016
|
—
|
2016
|
2015
|
2014
|
||||||||
Property, plant and equipment
|
$
|
6,515,129
|
$
|
6,694,885
|
$
|
6,503,597
|
||||
Other
|
119,618
|
99,989
|
92,531
|
|||||||
Total deferred income tax liabilities
|
6,634,747
|
6,794,874
|
6,596,128
|
|||||||
Other postretirement benefits
|
(371,460
|
)
|
(281,154
|
)
|
(1,030,203
|
)
|
||||
Inventories
|
(806,680
|
)
|
(807,061
|
)
|
(829,876
|
)
|
||||
Allowance for doubtful accounts
|
(124,329
|
)
|
(124,351
|
)
|
(105,296
|
)
|
||||
Intangible assets
|
(224,609
|
)
|
(299,137
|
)
|
(396,541
|
)
|
||||
Accrued compensation
|
(233,806
|
)
|
(252,297
|
)
|
(203,180
|
)
|
||||
Pensions
|
(9,406,224
|
)
|
(8,616,582
|
)
|
(9,275,949
|
)
|
||||
Total deferred income tax assets
|
(11,167,108
|
)
|
(10,380,582
|
)
|
(11,841,045
|
)
|
||||
Net deferred income tax (assets) liabilities
|
$
|
(4,532,361
|
)
|
$
|
(3,585,708
|
)
|
$
|
(5,244,917
|
)
|
|
2016
|
2015
|
2014
|
||||||||
Domestic
|
$
|
7,276,239
|
$
|
4,308,809
|
$
|
8,087,552
|
||||
Foreign
|
3,947,176
|
3,712,166
|
3,441,211
|
|||||||
$
|
11,223,415
|
$
|
8,020,975
|
$
|
11,528,763
|
2016
|
2015
|
2014
|
||||||||
Current:
|
||||||||||
Federal
|
$
|
2,554,341
|
$
|
1,337,417
|
$
|
2,339,917
|
||||
Foreign
|
1,091,952
|
1,054,694
|
991,257
|
|||||||
State
|
194,514
|
140,139
|
295,554
|
|||||||
Deferred:
|
||||||||||
Federal
|
(339,412
|
)
|
(223,530
|
)
|
164,830
|
|||||
State
|
(63,303
|
)
|
(14,788
|
)
|
75,729
|
|||||
$
|
3,438,092
|
$
|
2,293,932
|
$
|
3,867,287
|
2016
|
2015
|
2014
|
|||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||
Income taxes using U.S. federal statutory rate
|
$ 3,815,962
|
34
|
%
|
$ 2,727,131
|
34
|
%
|
$ 3,919,779
|
34
|
%
|
||||
State income taxes, net of federal benefit
|
87,061
|
1
|
82,987
|
1
|
249,324
|
2
|
|||||||
Impact of foreign subsidiaries on effective tax rate
|
(365,528
|
)
|
(3
|
)
|
(388,132
|
)
|
(5
|
)
|
(76,914
|
)
|
(1
|
)
|
|
Impact of manufacturers deduction on effective tax rate
|
(140,690
|
)
|
(1
|
)
|
(91,018
|
)
|
(1
|
)
|
(185,993
|
)
|
(1
|
)
|
|
Other—net
|
41,287
|
-
|
(37,036
|
)
|
-
|
(38,909
|
)
|
-
|
|||||
$ 3,438,092
|
31
|
%
|
$ 2,293,932
|
29
|
%
|
$ 3,867,287
|
34
|
%
|
2016
|
2015
|
2014
|
||||||||
Balance at beginning of year
|
$
|
249,782
|
$
|
248,645
|
$
|
220,289
|
||||
Increases for positions taken during the current period
|
44,172
|
27,947
|
50,735
|
|||||||
Decreases relating to settlements
|
—
|
—
|
—
|
|||||||
Decreases resulting from the expiration of the statute of limitations
|
(42,115
|
)
|
(26,810
|
)
|
(22,379
|
)
|
||||
Balance at end of year
|
$
|
251,839
|
$
|
249,782
|
$
|
248,645
|
2017
|
$
|
1,218,047
|
||
2018
|
1,145,243
|
|||
2019
|
741,243
|
|||
2020
|
515,845
|
|||
2021
|
285,088
|
|||
$
|
3,905,466
|
Measurement Date
|
||||
April 30, 2016
|
December 31, 2015
|
|||
Discount rate
|
3.69%
|
4.24%
|
||
Expected rate of return
|
8.0%
|
8.0%
|
||
Rate of compensation increase
|
--
|
3.25%
|
April 30, 2016
|
||||
Discount rate
|
$
|
4,383,159
|
||
Service cost
|
770,361
|
|||
Interest cost
|
818,565
|
|||
Actuarial loss
|
611,693
|
|||
Benefits paid
|
(1,026,898
|
)
|
||
Additional recognition due to significant event
|
(2,534,589
|
)
|
||
Net increase in pension benefit obligation
|
$
|
3,022,291
|
2016
|
2015
|
2014
|
||||||||
Service cost
|
$
|
1,977,295
|
$
|
3,770,191
|
$
|
2,837,134
|
||||
Interest cost
|
3,486,982
|
3,472,870
|
3,365,194
|
|||||||
Expected return on plan assets
|
(4,995,858
|
)
|
(5,151,654
|
)
|
(4,810,524
|
)
|
||||
Amortization of prior service cost
|
200,568
|
218,585
|
218,585
|
|||||||
Amortization of the net loss
|
1,704,863
|
1,928,298
|
944,130
|
|||||||
Net periodic benefit cost
|
$
|
2,373,850
|
$
|
4,238,290
|
$
|
2,554,519
|
2016
|
2015
|
2014
|
|||
Discount rate
|
|||||
- Pension plans
|
4.24% - 4.28%
|
3.90%
|
4.80%
|
||
- Supplemental pension plans
|
3.53%
|
3.90%
|
4.80%
|
||
Expected return on plan assets
|
8.0%
|
8.0%
|
8.0%
|
||
Rate of compensation increase
|
3.25%
|
3.25%
|
3.25%
|
2016
|
2015
|
2014
|
||||||||
Service cost
|
$
|
29,300
|
$
|
217,570
|
$
|
173,902
|
||||
Interest cost
|
94,872
|
154,915
|
157,481
|
|||||||
Expected return on plan assets
|
(47,532
|
)
|
(91,936
|
)
|
(22,434
|
)
|
||||
Amortization of prior service cost
|
(23,890
|
)
|
(23,889
|
)
|
(23,888
|
)
|
||||
Amortization of the net loss
|
(93,921
|
)
|
18,804
|
(72,378
|
)
|
|||||
Net periodic benefit cost
|
$
|
(41,171
|
)
|
$
|
275,464
|
$
|
212,683
|
2016
|
2015
|
2014
|
|||
Discount rate
|
4.23%
|
3.90%
|
4.8%
|
||
Expected return on plan assets
|
8.0%
|
8.0%
|
8.0%
|
Pension Benefit
|
Other Postretirement Benefit
|
||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||
Benefit obligation at beginning of year
|
$
|
87,427,769
|
$
|
90,516,922
|
$
|
1,981,344
|
$
|
4,055,112
|
|||||
Change due to availability of final actual assets and census data
|
—
|
—
|
317,440
|
346
|
|||||||||
Discount rate
|
2,359,745
|
(4,121,170
|
)
|
34,471
|
(87,748
|
)
|
|||||||
Service cost
|
1,977,295
|
3,770,191
|
29,300
|
217,570
|
|||||||||
Interest cost
|
3,486,982
|
3,472,870
|
94,872
|
154,915
|
|||||||||
Actuarial (gain)/loss
|
2,940,154
|
(3,316,552
|
)
|
33,022
|
(2,235,904
|
)
|
|||||||
Benefits paid
|
(3,398,419
|
)
|
(2,894,492
|
)
|
(151,399
|
)
|
(122,947
|
)
|
|||||
Additional recognition due to significant event
|
(2,534,589
|
)
|
—
|
—
|
—
|
||||||||
Benefit obligation at end of year
|
$
|
92,258,937
|
$
|
87,427,769
|
$
|
2,339,050
|
$
|
1,981,344
|
Pension Benefit
|
Other Postretirement Benefit
|
|||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||
Fair value of plan assets at beginning of year
|
$
|
63,122,843
|
$
|
64,352,110
|
$
|
1,188,289
|
$
|
1,149,204
|
||||||
Actual return on plan assets
|
4,653,349
|
(1,340,977
|
)
|
99,061
|
39,085
|
|||||||||
Employer contributions
|
1,249,726
|
3,006,202
|
151,399
|
122,947
|
||||||||||
Benefits paid
|
(3,398,419
|
)
|
(2,894,492
|
)
|
(151,399
|
)
|
(122,947
|
)
|
||||||
Fair value of plan assets at end of year
|
$
|
65,627,499
|
$
|
63,122,843
|
$
|
1,287,350
|
$
|
1,188,289
|
Pension Benefit
|
Other Postretirement Benefit
|
||||||||||||
Funded Status
|
2016
|
2015
|
2016
|
2015
|
|||||||||
Net amount recognized in the balance sheet
|
$
|
(26,631,438
|
)
|
$
|
(24,304,926
|
)
|
$
|
(1,051,700
|
)
|
$
|
(793,055
|
)
|
Pension Benefit
|
Other Postretirement Benefit
|
||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||
Net (loss)/gain
|
$
|
(33,623,438
|
)
|
$
|
(32,220,482
|
)
|
$
|
1,231,081
|
$
|
1,658,406
|
|||
Prior service (cost) credit
|
(176,117
|
)
|
(376,685
|
)
|
39,841
|
63,731
|
|||||||
$
|
(33,799,555
|
)
|
$
|
(32,597,167
|
)
|
$
|
1,270,922
|
$
|
1,722,137
|
Pension Benefit
|
Other Postretirement Benefit
|
||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||
Balance at beginning of period
|
$
|
(32,597,167
|
)
|
$
|
(35,689,141
|
)
|
$
|
1,722,137
|
$
|
(543,233
|
)
|
||
Change due to availability of final actual assets and census data
|
—
|
—
|
(317,440
|
)
|
(346
|
)
|
|||||||
Charged to net periodic benefit cost
|
|||||||||||||
Prior service cost
|
200,568
|
218,585
|
(23,890
|
)
|
(23,889
|
)
|
|||||||
Net loss (gain)
|
1,704,863
|
1,928,298
|
(93,921
|
)
|
18,804
|
||||||||
Liability (gains)/losses
|
|||||||||||||
Discount rate
|
(2,359,745
|
)
|
4,121,170
|
(34,471
|
)
|
87,748
|
|||||||
Asset (gains)/losses deferred
|
(4,325,232
|
)
|
(2,813,796
|
)
|
51,529
|
(52,851
|
)
|
||||||
Additional recognition due to significant event
|
2,534,589
|
—
|
—
|
—
|
|||||||||
Other
|
1,042,569
|
(362,283
|
)
|
(33,022
|
)
|
2,235,904
|
|||||||
Balance at end of period
|
$
|
(33,799,555
|
)
|
$
|
(32,597,167
|
)
|
$
|
1,270,922
|
$
|
1,722,137
|
2016
|
2015
|
|||
Discount rate
|
||||
-
|
Pension plans
|
4.04% - 4.08%
|
4.24% - 4.28%
|
|
-
|
Supplemental pension plans
|
3.03%
|
3.53%
|
|
-
|
Other postretirement plan
|
4.12%
|
4.23%
|
2015
|
2015
|
||||||
Number of plans
|
6
|
6
|
|||||
Projected benefit obligation
|
$
|
92,258,937
|
$
|
87,427,769
|
|||
Accumulated benefit obligation
|
92,258,937
|
83,433,339
|
|||||
Fair value of plan assets
|
65,627,499
|
63,122,843
|
|||||
Net amount recognized in accrued benefit liability
|
(26,631,438
|
)
|
(24,304,926
|
)
|
December 31, 2016
|
|||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||
Cash and Equivalents:
|
|||||||||||||
Common/collective trust funds
|
$
|
—
|
$
|
276,129
|
$
|
—
|
$
|
276,129
|
|||||
Equities:
|
|||||||||||||
The Eastern Company Common Stock
|
4,535,676
|
—
|
—
|
4,535,676
|
|||||||||
Common/collective trust funds
|
|||||||||||||
RITC Large Cap Defensive Equity Fund (a)
|
—
|
7,131,589
|
—
|
7,131,589
|
|||||||||
RITC Equity II Fund (b)
|
—
|
4,875,234
|
—
|
4,875,234
|
|||||||||
RITC Large Cap U.S. Equity Fund (c)
|
—
|
5,984,636
|
—
|
5,984,636
|
|||||||||
RITC International Fund with Active Currency (d)
|
—
|
8,178,635
|
—
|
8,178,635
|
|||||||||
RITC Emerging Markets Fund (e)
|
—
|
3,373,089
|
—
|
3,373,089
|
|||||||||
Fixed Income:
|
|||||||||||||
Common/collective trust funds
|
|||||||||||||
RITC Fixed Income I Fund (f)
|
—
|
8,700,175
|
—
|
8,700,175
|
|||||||||
Target Duration LDI Fixed Income Funds (g)
|
|||||||||||||
· RITC 8 Year LDI Fixed Income Fund
|
—
|
1,499,390
|
—
|
1,499,390
|
|||||||||
· RITC 10 Year LDI Fixed Income Fund
|
—
|
1,851,317
|
—
|
1,851,317
|
|||||||||
· RITC 12 Year LDI Fixed Income Fund
|
—
|
2,122,411
|
—
|
2,122,411
|
|||||||||
· RITC 14 Year LDI Fixed Income Fund
|
—
|
3,790,209
|
—
|
3,790,209
|
|||||||||
· RITC 16 Year LDI Fixed Income Fund
|
—
|
5,650,440
|
—
|
5,650,440
|
|||||||||
STRIPS Fixed Income Funds (h)
|
|||||||||||||
· RITC 15 Year STRIPS Fixed Income Fund
|
—
|
2,504,395
|
—
|
2,504,395
|
|||||||||
· RITC 10 Year STRIPS Fixed Income Fund
|
—
|
1,407,518
|
—
|
1,407,518
|
|||||||||
· RITC 28 to 29 Year STRIPS Fixed Income Fund
|
—
|
464,106
|
—
|
464,106
|
|||||||||
Insurance contracts
|
—
|
3,282,552
|
—
|
3,282,552
|
|||||||||
Total
|
$
|
4,535,676
|
$
|
61,091,825
|
$
|
—
|
$
|
65,627,501
|
January 2, 2016
|
|||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||
Cash and Equivalents:
|
|||||||||||||
Common/collective trust funds
|
$
|
—
|
$
|
236,209
|
$
|
—
|
$
|
236,209
|
|||||
Equities:
|
|||||||||||||
The Eastern Company Common Stock
|
4,069,088
|
—
|
—
|
4,069,088
|
|||||||||
Common/collective trust funds
|
|||||||||||||
Russell Large Cap Defensive Equity Fund
|
—
|
6,685,388
|
—
|
6,685,388
|
|||||||||
Russell Equity II Fund
|
—
|
4,456,364
|
—
|
4,456,364
|
|||||||||
Russell Large Cap U.S. Equity Fund
|
—
|
5,575,535
|
—
|
5,575,535
|
|||||||||
Russell International Fund with Active Currency
|
—
|
7,796,625
|
—
|
7,796,625
|
|||||||||
Russell Emerging Markets Fund
|
—
|
3,350,136
|
—
|
3,350,136
|
|||||||||
Fixed Income:
|
|||||||||||||
Common/collective trust funds
|
|||||||||||||
Russell Fixed Income I Fund
|
—
|
8,504,086
|
—
|
8,504,086
|
|||||||||
Target Duration LDI Fixed Income Funds
|
|||||||||||||
· Russell 8 Year LDI Fixed Income Fund
|
—
|
1,478,701
|
—
|
1,478,701
|
|||||||||
· Russell 10 Year LDI Fixed Income Fund
|
—
|
1,840,616
|
—
|
1,840,616
|
|||||||||
· Russell 12 Year LDI Fixed Income Fund
|
—
|
2,119,786
|
—
|
2,119,786
|
|||||||||
· Russell 14 Year LDI Fixed Income Fund
|
—
|
3,795,220
|
—
|
3,795,220
|
|||||||||
· Russell 16 Year LDI Fixed Income Fund
|
—
|
5,615,278
|
—
|
5,615,278
|
|||||||||
STRIPS Fixed Income Funds
|
|||||||||||||
· Russell 15 Year STRIPS Fixed Income Fund
|
—
|
2,606,554
|
—
|
2,606,554
|
|||||||||
· Russell 10 Year STRIPS Fixed Income Fund
|
—
|
1,411,574
|
—
|
1,411,574
|
|||||||||
· Russell 28 to 29 Year STRIPS Fixed Income Fund
|
—
|
543,357
|
—
|
543,357
|
|||||||||
Insurance contracts
|
—
|
3,038,326
|
—
|
3,038,326
|
|||||||||
Total
|
$
|
4,069,088
|
$
|
59,053,755
|
$
|
—
|
$
|
63,122,843
|
(a)
|
The investment objective of the RITC (formerly Russell) Large Cap Defensive Equity Fund is to outperform the Russell 1000® Defensive Index® while managing volatility and maintaining diversification similar to the Index over a full market cycle. The Fund invests in common stocks of large and medium cap U.S. companies, employing a multi-manager approach with advisors using distinct methods to identify medium to large cap U.S. stocks with positive excess return potential. The defensive style of investing emphasizes investments in equities of companies expected to have lower than average stock price volatility, higher financial quality and/or stable business fundamentals.
|
(b)
|
The RITC Equity II Fund has an objective to provide a favorable total return primarily through capital appreciation. Aims to outperform the Russell 2500® Index with above-average consistency while managing volatility and maintaining diversification similar to the Index over a full market cycle. The fund invests in common stocks of U.S. small cap companies. It employs a multi-style (growth and market-oriented, value), multi-manager approach. Advisors employ distinct yet complementary styles in their stock selection, focusing on factors such as: undervalued or under-researched companies, special situations, emerging growth, asset plays and turnarounds.
|
(c)
|
The investment objective of the RITC Large Cap U.S. Equity Fund is to outperform the Russell 1000® Index with above-average consistency over a full market cycle. The fund invests in common stocks of large and medium cap U.S. companies. Employs a multi-style, multi-manager approach whereby portions of the fund are allocated to different money managers who employ distinct styles. The number of advisors and number of stocks (150 – 200) is more concentrated than other Russell multi-style large cap U.S. funds.
|
(d)
|
The RITC International Fund with Active Currency seeks to provide long-term growth of Capital. Aims to outperform the Russell Development ex-U.S. Large Cap Index Net while managing volatility and maintaining diversification similar to the index over a full market cycle. The fund invests primarily in the equities of non-U.S. developing markets and currency of global markets. Employs multiple managers with distinct investment styles, which are intended to be complementary. Seeks to capitalize on the stock selection abilities of its active manager. The Fund typically has moderate country and sector weights relative to the index. Also believe active currency management is an attractive strategy with the potential to deliver excess return.
|
(e)
|
The RITC Emerging Markets Fund seeks to provide the potential for long-term growth of Capital. Aims to outperform the Russell Emerging Markets Index Net over a full market cycle. The fund invests in equity securities of companies located in, or are economically tied to, emerging market countries. Securities are denominated principally in foreign currencies and are typically held outside the U.S. The Fund employs a multi-style (growth, market-oriented and value) and multi-manager approach whereby portions of the fund are allocated to different money managers who employ distinct styles.
|
(f)
|
The RITC Fixed Income I Fund is designed to provide current income and capital appreciation through a variety of diversified strategies. The Fund seeks favorable returns comparable to the broad fixed income market, as measured by the Barclays U.S. Aggregate Bond Index. The fund primarily invests in fixed income securities representing diverse sectors and maturities. Advisors use diversified strategies including sector rotation, modest interest rate timing, security selection and tactical use of high yield and emerging market bonds. It is actively managed with multiple advisors employing distinct yet complementary strategies and different technologies to insure prudent diversification over a broad spectrum of investments.
|
(g)
|
The Target Duration LDI Fixed Income Funds seek to outperform their respective Barclays-Russell LDI Indexes over a full market cycle. These Funds invest primarily in investment grade corporate bonds that closely match those found in discount curves used to value U.S. pension liabilities. They seek to provide additional incremental return through modest interest rate timing, security selection and tactical use of non-credit sectors. Generally for use in combination with other bond funds to gain additional credit exposure, with the goal of reducing the mismatch between a plan’s assets and liabilities.
|
(h)
|
The STRIPS (Separate Trading of Registered Interest and Principal of Securities) Funds seek to provide duration and Treasury exposure by investing in an optimized subset of the STRIPS universe with a similar duration profile as the Barclays U.S. Treasury STRIPS 10-11 year, 16-16 year or 28-29 year Index. These passively managed funds are generally used with other bond funds to add additional duration to the asset portfolio. This will help reduce the mismatch between a plan’s assets and liabilities.
|
December 31, 2016
|
|||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||
Fixed Income:
|
|||||||||||||
Insurance contracts
|
$
|
—
|
$
|
—
|
$
|
1,287,350
|
$
|
1,287,350
|
|||||
Total
|
$
|
—
|
$
|
—
|
$
|
1,287,350
|
$
|
1,287,350
|
January 2, 2016
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||
Fixed Income:
|
||||||||||||
Insurance contracts
|
$
|
—
|
$
|
—
|
$
|
1,188,289
|
$
|
1,188,289
|
||||
Total
|
$
|
—
|
$
|
—
|
$
|
1,188,289
|
$
|
1,188,289
|
2016
|
2015
|
|||||||
Fair value of Level 3 assets at beginning of year
|
$
|
1,188,289
|
$
|
1,149,204
|
||||
Change due to availability of final actual assets and census data
|
—
|
—
|
||||||
Actual return on plan assets
|
99,061
|
39,085
|
||||||
Employer contributions
|
92,898
|
81,360
|
||||||
Benefits paid
|
(92,898
|
)
|
(81,360
|
)
|
||||
Fair value of Level 3 assets at end of year
|
$
|
1,287,350
|
$
|
1,188,289
|
2016
|
2015
|
2014
|
||||||
Regular matching contributions
|
$
|
328,144
|
$
|
232,399
|
$
|
186,545
|
||
Transitional credit contributions
|
231,847
|
---
|
---
|
|||||
Non-discretionary contributions
|
51,470
|
---
|
---
|
|||||
Total contributions made for the period
|
$
|
611,461
|
$
|
232,399
|
$
|
186,545
|
2016
|
2015
|
2014
|
||||||||
Sales:
Sales to unaffiliated customers:
|
||||||||||
Industrial Hardware
|
$
|
61,058,871
|
$
|
61,338,812
|
$
|
58,666,229
|
||||
Security Products
|
57,255,101
|
56,598,487
|
49,381,553
|
|||||||
Metal Products
|
19,294,286
|
26,630,652
|
32,777,578
|
|||||||
$
|
137,608,258
|
$
|
144,567,951
|
$
|
140,825,360
|
Inter-segment Sales:
|
||||||||||
Industrial Hardware
|
$
|
637,405
|
$
|
595,596
|
$
|
984,192
|
||||
Security Products
|
2,716,802
|
2,813,576
|
2,565,733
|
|||||||
Metal Products
|
—
|
16,804
|
—
|
|||||||
$
|
3,354,207
|
$
|
3,425,976
|
$
|
3,549,925
|
Income Before Income Taxes:
|
||||||||||
Industrial Hardware
|
$
|
5,683,730
|
$
|
4,314,149
|
$
|
5,063,786
|
||||
Security Products
|
5,677,264
|
3,798,115
|
4,058,554
|
|||||||
Metal Products
|
(225,122
|
)
|
(84,536
|
)
|
2,596,308
|
|||||
Operating Profit
|
11,135,872
|
8,027,728
|
11,718,648
|
|||||||
Interest expense
|
(121,500
|
)
|
(185,475
|
)
|
(254,576
|
)
|
||||
Other income
|
209,043
|
178,722
|
64,691
|
|||||||
$
|
11,223,415
|
$
|
8,020,975
|
$
|
11,528,763
|
|||||
Geographic Information:
|
||||||||||
Net Sales:
|
||||||||||
United States
|
$
|
117,679,860
|
$
|
126,115,036
|
$
|
117,478,557
|
||||
Foreign
|
19,928,398
|
18,452,915
|
23,346,803
|
|||||||
$
|
137,608,258
|
$
|
144,567,951
|
$
|
140,825,360
|
Identifiable Assets:
|
||||||||||
United States
|
$
|
107,031,435
|
$
|
106,662,743
|
$
|
105,771,961
|
||||
Foreign
|
17,166,961
|
15,075,816
|
15,498,595
|
|||||||
$
|
124,198,396
|
$
|
121,738,559
|
$
|
121,270,556
|
|||||
Industrial Hardware
|
$
|
32,278,281
|
$
|
30,425,348
|
$
|
29,660,695
|
||||
Security Products
|
49,520,708
|
52,688,497
|
51,573,271
|
|||||||
Metal Products
|
18,447,526
|
20,931,863
|
21,037,058
|
|||||||
100,246,515
|
104,045,708
|
102,271,004
|
||||||||
General corporate
|
23,951,881
|
17,692,851
|
18,999,552
|
|||||||
$
|
124,198,396
|
$
|
121,738,559
|
$
|
121,270,556
|
2016
|
2015
|
2014
|
||||||||
Depreciation and Amortization:
|
||||||||||
Industrial Hardware
|
$
|
1,468,904
|
$
|
1,580,741
|
$
|
1,631,521
|
||||
Security Products
|
980,048
|
1,010,262
|
621,501
|
|||||||
Metal Products
|
1,365,441
|
1,330,435
|
1,233,280
|
|||||||
$
|
3,814,393
|
$
|
3,921,438
|
$
|
3,486,302
|
Capital Expenditures:
|
||||||||||
Industrial Hardware
|
$
|
648,516
|
$
|
1,479,984
|
$
|
1,929,022
|
||||
Security Products
|
1,018,371
|
388,377
|
973,365
|
|||||||
Metal Products
|
1,153,872
|
632,016
|
644,851
|
|||||||
2,820,759
|
2,500,377
|
3,567,238
|
||||||||
Currency translation adjustment
|
(8,889
|
)
|
25,020
|
10,347
|
||||||
General corporate
|
51,600
|
12,839
|
55,580
|
|||||||
$
|
2,863,470
|
$
|
2,538,236
|
$
|
3,633,165
|
2016
|
||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
Year
|
||||||||||||
Net sales
|
$
|
33,101,657
|
$
|
36,883,312
|
$
|
33,478,347
|
$
|
34,144,942
|
$
|
137,608,258
|
||||||
Gross margin
|
6,420,446
|
8,601,603
|
8,852,878
|
10,417,944
|
34,292,871
|
|||||||||||
Selling and administrative
expenses
|
5,459,582
|
5,495,735
|
5,588,764
|
6,612,918
|
23,156,999
|
|||||||||||
Net income
|
648,073
|
2,087,837
|
2,400,064
|
2,649,349
|
7,785,323
|
|||||||||||
Net income per share:
|
||||||||||||||||
Basic
|
$
|
.10
|
$
|
.33
|
$
|
.38
|
$
|
.42
|
$
|
1.25
|
||||||
Diluted
|
$
|
.10
|
$
|
.33
|
$
|
.38
|
$
|
.42
|
$
|
1.25
|
||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
6,248,222
|
6,250,610
|
6,252,681
|
6,254,605
|
6,251,535
|
|||||||||||
Diluted
|
6,248,222
|
6,250,610
|
6,252,681
|
6,254,605
|
6,251,535
|
2015
|
||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
Year
|
||||||||||||
Net sales
|
$
|
36,876,842
|
$
|
37,037697
|
$
|
36,239,500
|
$
|
34,413,912
|
$
|
144,567,951
|
||||||
Gross margin
|
7,335,178
|
7,912,161
|
9,033,843
|
8,100,044
|
32,381,226
|
|||||||||||
Selling and administrative
expenses
|
5,963,695
|
7,056,139
|
5,584,222
|
5,749,422
|
24,353,498
|
|||||||||||
Net (loss)/income
|
873,951
|
584,594
|
2,527,722
|
1,740,776
|
5,727,043
|
|||||||||||
Net (loss)/income per share:
|
||||||||||||||||
Basic
|
$
|
.14
|
$
|
.09
|
$
|
.41
|
$
|
.28
|
$
|
.92
|
||||||
Diluted
|
$
|
.14
|
$
|
.09
|
$
|
.41
|
$
|
.28
|
$
|
.92
|
||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
6,244,088
|
6,244,051
|
6,245,099
|
6,246,571
|
6,245,057
|
|||||||||||
Diluted
|
6,244,088
|
6,244,051
|
6,245,099
|
6,246,571
|
6,245,057
|
ITEM 9
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A
|
CONTROLS AND PROCEDURES
|
ITEM 9B
|
OTHER INFORMATION
|
ITEM 10
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11
|
EXECUTIVE COMPENSATION
|
ITEM 12
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
(a)
|
Information concerning security ownership of certain beneficial owners is incorporated herein by reference to the Proxy Statement to be filed with the SEC pursuant to Regulation 14A not later than 120 days after December 31, 2016, under the caption “Security Ownership of Certain Beneficial Shareholders”.
|
(b)
|
Information concerning security ownership of management is incorporated herein by reference to the Proxy Statement to be filed with the SEC pursuant to Regulation 14A not later than 120 days after December 31, 2016, under the captions “Item No. 1 – Election of Directors”, “Security Ownership of Certain Beneficial Shareholders”, “Executive Compensation”, “Stock Options”, “Options Exercised in Fiscal 2016”, and “Outstanding Equity Awards at Fiscal 2016 Year-End”. See also the equity compensation plan information in Item 5 of this Annual Report on Form 10-K.
|
(c)
|
Changes in Control
|
ITEM 13
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULE
|
(1)
|
Financial statements
|
|
Consolidated Statements of Income — Fiscal years ended December 31, 2016,
January 2, 2016 and January 3, 2015............................................................................................................ 30.
|
|
Consolidated Statements of Comprehensive Income — Fiscal years ended
December 31, 2016, January 2, 2016 and January 3, 2015.......................................................................... 30.
|
|
Consolidated Statements of Shareholders’ Equity — Fiscal years ended
December 31, 2016, January 2, 2016 and January 3, 2015............................................................................ 31.
|
|
Consolidated Statements of Cash Flows—Fiscal years ended December 31, 2016,
January 2, 2016 and January 3, 2015.............................................................................................................. 32.
|
|
(b)
|
Exhibits Required by Item 601 of Regulation S-K
|
|
Exhibits are as set forth in the “Exhibit Index” which appears on pages 66 through 67. Also refer to the following Form 8-K’s filed by the Company.
|
|
(c)
|
None.
|
COL. A
|
COL. B
|
COL. C
|
COL. D
|
COL. E
|
|
ADDITIONS
|
|||||
Description
|
Balance at Beginning
of Period
|
(1)
Charged to Costs
and Expenses
|
(2)
Charged to Other
Accounts-Describe
|
Deductions –
Describe
|
Balance at End
of Period
|
Fiscal year ended December 31, 2016:
Deducted from asset accounts:
Allowance for doubtful accounts
|
$450,000
|
$ 0
|
$ 20,000 (a)
|
$430,000
|
|
Fiscal year ended January 2, 2016:
Deducted from asset accounts:
Allowance for doubtful accounts
|
$414,000
|
$ 52,144
|
$ 16,144 (a)
|
$450,000
|
|
Fiscal year ended January 3, 2015:
Deducted from asset accounts:
Allowance for doubtful accounts
|
$410,000
|
$ 71,927
|
$ 67,927 (a)
|
$414,000
|
Dated: March 15, 2017
|
THE EASTERN COMPANY
|
By /s/ John L. Sullivan III
John L. Sullivan III
Vice President and Chief Financial Officer
|
/s/ August M. Vlak
|
March 15, 2017
|
|
August M. Vlak
President and Chief Executive Officer
|
||
/s/ John L. Sullivan III
|
March 15, 2017
|
|
John L. Sullivan III
Vice President and Chief Financial Officer
|
||
/s/ Angelo M. Labbadia
|
March 15, 2017
|
|
Angelo M. Labbadia
Vice President and Chief Operating Officer
|
||
/s/ James A. Mitarotonda
|
March 15, 2017
|
|
James A. Mitarotonda
Chairman of the Board
|
||
/s/ Fredrick D. DiSanto
|
March 15, 2017
|
|
Fredrick D. DiSanto
Director
|
||
/s/ John W. Everets
|
March 15, 2017
|
|
John W. Everets
Director
|
||
/s/ Charles W. Henry
|
March 15, 2017
|
|
Charles W. Henry
Director
|
||
/s/ Michael A. McManus
|
March 15, 2017
|
|
Michael A. McManus
Director
|
||
|
(3)
|
Restated Certificate of Incorporation dated August 14, 1991 is incorporated by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 28, 1991 and the Registrant’s Form 8-K filed on February 13, 1991. Amended and restated bylaws dated July 29, 1996 are attached to the Registrant’s Form 10-K filed on March 13, 2015.
|
|
(10)
|
(a)
|
The Eastern Company Directors Fee Program effective as of October 1, 1996 incorporated by reference to the Registrant’s Form S-8 filed on February 7, 1997, as amended by Amendment No.1 and Amendment No. 2 are incorporated by reference to the Registrant’s Form 10-K filed on March 29, 2000 and Amendment No. 3 is incorporated by reference to the Registrant’s Form 10-K filed on March 22, 2004.
|
|
(b)
|
The Eastern Company 2010 Executive Stock Incentive Plan effective April 28, 2010 is incorporated by reference to the Registrant’s Form S-8 filed on September 2, 2010.
|
|
(c)
|
The change in control agreement between the Company and John L. Sullivan III is incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 3, 2015.
|
|
(d)
|
The change in control agreement between the Company and Angelo M. Labbadia is incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 3, 2015.
|
|
(14)
|
The Eastern Company Code of Business Conduct and Ethics is incorporated by reference. The Eastern Company Code of Business Conduct and Ethics is available free of charge on the Company’s Internet website at http://www.easterncompany.com under the section labeled “Corporate Governance”.
|
|
(21)
|
List of subsidiaries as follows:
|
|
Eberhard Hardware Mfg. Ltd., a private corporation organized under the laws of the Province of Ontario, Canada.
|
|
Canadian Commercial Vehicles Corporation, a private corporation organized under the laws of the Province of Nova Scotia, Canada.
|
|
Eastern Industrial Ltd., a private corporation organized under the laws of the Peoples Republic of China.
|
|
Dongguan Reeworld Security Products Ltd., a private corporation organized under the laws of the Peoples Republic of China.
|
|
World Lock Co. Ltd., a private corporation organized under the laws of Taiwan (The Republic of China).
|
|
Sesamee Mexicana, Subsidiary, a private corporation organized under the laws of Mexico.
|
|
World Security Industries Co. Ltd., a private corporation organized under the laws of Hong Kong.
|
|
(23)
|
Consents of independent registered public accounting firm attached hereto on page 68.
|
|
(31)
|
Certifications required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
(32)
|
Certifications pursuant to Rule 13a-14(b) and 18 USC 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
(99)
|
Letter to our shareholders from the Annual Report 2016 is attached on page 73.
|
|
(101)
|
The following materials from The Eastern Company Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets as of December 31, 2016 and January 2, 2016, (ii) the Consolidated Statements of Income for the fiscal years ended December 31, 2016, January 2, 2016 and January 3, 2015, (iii) the Consolidated Statements of Comprehensive Income for the fiscal years ended December 31, 2016, January 2, 2016, and January 3, 2015, (iv) the Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2016, January 2, 2016, and January 3, 2015, (v) the Consolidated Statements of Cash Flows for the years ended December 31, 2016, January 2, 2016, and January 3, 2015, and (vi) the Notes to Consolidated Financial Statements.
|
]1Z/XXT+7O$=]H>EW)N;BRC$DTD8!BZXP&SR0:Y+X9V%K-/X]T_R
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MX&%(P*T:* ,Z+P_H\$5U%#I5E''=J%N$2!0LH P PQS@<WLP
M"!;Q1A4YY/RCCG)KQ^&X\1Z+\4_$-Q="#5=7M?#F^W^SQ&,7&'4C*9.#G/ ]
M*T_AYX[U/7-?BL=0\1:?=2/!NGL)K%[2X@EQG:G42
|
1.
|
I have reviewed this report on Form 10-K 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-K 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-K 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 Annual Report on Form 10-K for the period ended December 31, 2016, 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.
|
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Mar. 13, 2017 |
Jul. 02, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | EASTERN CO | ||
Entity Central Index Key | 0000031107 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 87,125,916 | ||
Entity Common Stock, Shares Outstanding | 6,256,098 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Dec. 31, 2016 |
Jan. 02, 2016 |
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Current Assets | ||
Accounts receivable, allowances | $ 430,000 | $ 450,000 |
Shareholders' Equity | ||
Voting Preferred Stock, no par value (in dollars per share) | $ 0 | $ 0 |
Voting Preferred Stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Nonvoting Preferred Stock, no par value (in dollars per share) | $ 0 | $ 0 |
Nonvoting Preferred Stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common Stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common Stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common Stock, shares issued (in shares) | 8,950,827 | 8,942,461 |
Common Stock, shares outstanding (in shares) | 6,256,098 | 6,247,732 |
Treasury Stock, shares (in shares) | 2,694,729 | 2,694,729 |
Consolidated Statements of Income - USD ($) |
12 Months Ended | ||
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Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
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Consolidated Statements of Income [Abstract] | |||
Net sales | $ 137,608,258 | $ 144,567,951 | $ 140,825,360 |
Cost of products sold | (103,315,387) | (112,186,725) | (108,338,956) |
Gross margin | 34,292,871 | 32,381,226 | 32,486,404 |
Selling and administrative expenses | (23,156,999) | (24,353,498) | (20,767,756) |
Operating profit | 11,135,872 | 8,027,728 | 11,718,648 |
Interest expense | (121,500) | (185,475) | (254,576) |
Other income | 209,043 | 178,722 | 64,691 |
Income before income taxes | 11,223,415 | 8,020,975 | 11,528,763 |
Income taxes | 3,438,092 | 2,293,932 | 3,867,287 |
Net income | $ 7,785,323 | $ 5,727,043 | $ 7,661,476 |
Earnings per Share: | |||
Basic (in dollars per share) | $ 1.25 | $ 0.92 | $ 1.23 |
Diluted (in dollars per share) | $ 1.25 | $ 0.92 | $ 1.23 |
Consolidated Statements of Comprehensive Income - USD ($) |
12 Months Ended | ||
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Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
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Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 7,785,323 | $ 5,727,043 | $ 7,661,476 |
Other comprehensive income/(loss) - | |||
Change in foreign currency translation | (1,010,983) | (2,009,277) | (1,128,327) |
Change in pension and other postretirement benefit costs, net of taxes (expense)/benefit | (1,110,306) | 3,458,060 | (10,386,089) |
Total other comprehensive income/(loss) | (931,548) | 1,448,783 | (11,514,416) |
Comprehensive income/(loss) | $ 5,664,034 | $ 7,175,826 | $ (3,852,940) |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) |
12 Months Ended | ||
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Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
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Other comprehensive income/(loss) - | |||
Change in pension and postretirement benefit costs, income taxes (expense)/benefit | $ (543,297) | $ 1,899,285 | $ 5,767,236 |
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares |
12 Months Ended | ||
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Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
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Consolidated Statements of Shareholders' Equity [Abstract] | |||
Cash dividends declared, per share (in dollars per share) | $ 0.44 | $ 0.45 | $ 0.48 |
DESCRIPTION OF BUSINESS |
12 Months Ended |
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Dec. 31, 2016 | |
DESCRIPTION OF BUSINESS [Abstract] | |
DESCRIPTION OF BUSINESS | 1. Description of Business The Eastern Company (the “Company”) includes six separate operating divisions located within the United States, two wholly-owned Canadian subsidiaries (one located in Tillsonburg, Ontario, Canada, and one in Kelowna, British Columbia, Canada), a wholly-owned Taiwanese subsidiary located in Taipei, Taiwan, a wholly-owned subsidiary in Hong Kong, two wholly-owned Chinese subsidiaries (one located in Shanghai, China, and one located in Dongguan, China) and a wholly-owned subsidiary in Lerma, Mexico. The operations of the Company consist of three business segments: industrial hardware, security products, and metal products. The industrial hardware segment produces latching devices for use on industrial equipment and instrumentation, composite panels used primarily in the transportation and electronic white board industries, as well as a broad line of proprietary hardware designed for truck bodies and other vehicular type equipment. The security products segment manufactures and markets a broad range of locks for traditional general purpose security applications as well as specialized locks for soft luggage, coin-operated vending and gaming equipment, and electric and computer peripheral components. This segment also manufactures and markets coin acceptors and metering systems to secure cash used in the commercial laundry industry and produces cashless payment systems utilizing advanced smart card technology. The metal products segment produces anchoring devices used in supporting the roofs of underground coal mines and specialty products which serve the construction, automotive, railroad and electrical industries. Sales are made to customers primarily in North America. |
ACCOUNTING POLICIES |
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ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTING POLICIES | 2. Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. On an ongoing basis the Company evaluates its estimates, including those related to product returns, bad debts, carrying value of inventories, intangible and other long-lived assets, income taxes, pensions and other postretirement benefits. Actual results could differ from those estimates. Fiscal Year The Company’s year ends on the Saturday nearest to December 31. Fiscal 2016 was a 52 week year, 2015 was a 52 week year and 2014 was a 53 week year. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany accounts and transactions are eliminated. Cash Equivalents Highly liquid investments purchased with a maturity of three months or less are considered cash equivalents. The Company has deposits that exceed amounts insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, but the Company does not consider this a significant concentration of credit risk based on the strength of the financial institution. Approximately 51% of available cash is located outside of the United States in our foreign subsidiaries. Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net income. Foreign Currency For foreign operations balance sheet accounts are translated at the current year-end exchange rate; income statement accounts are translated at the average exchange rate for the year. Resulting translation adjustments are made directly to a separate component of shareholders’ equity – “Accumulated other comprehensive income (loss) – Foreign currency translation”. Foreign currency exchange transaction gains and losses are not material in any year. Recognition of Sales Sales are recognized when persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred, and there is a reasonable assurance of collection of the sales proceeds. The Company obtains written purchase authorizations from its customers for a specified amount of product at a specified price and delivery occurs at the time of shipment. Credit is extended based on an evaluation of each customer’s financial condition; collateral is not required. Sales are recorded net of returns and allowances. Accounts receivable are recorded net of applicable allowances. No customer accounted for 10% of net sales during 2016, 2015 or 2014. No customer exceeded 10% of total accounts receivable at year end 2016 or 2015. Accounts Receivable Accounts receivable are stated at their net realizable value. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews the collectability of its receivables on an ongoing basis taking into account a combination of factors. The Company reviews potential problems, such as past due accounts, a bankruptcy filing or deterioration in the customer’s financial condition, to ensure the Company is adequately accrued for potential loss. Accounts are considered past due based on when payment was originally due. If a customer’s situation changes, such as a bankruptcy or creditworthiness, or there is a change in the current economic climate, the Company may modify its estimate of the allowance for doubtful accounts. The Company will write off accounts receivable after reasonable collection efforts have been made and the accounts are deemed uncollectible. Write-offs have been within management’s estimates. Inventories Inventories are valued at the lower of cost or market. Cost is determined by the last-in, first-out (LIFO) method in the U.S. ($28,052,368 for U.S. inventories at December 31, 2016) and by the first-in, first-out (FIFO) method for inventories outside the U.S. ($5,977,918 for inventories outside the U.S. at December 31, 2016). Cost exceeds the LIFO carrying value by approximately $6,121,286 at December 31, 2016 and $6,297,368 at January 2, 2016. There was no material LIFO quantity liquidation in 2016, 2015 and 2014. In addition, as of the balance sheet dates, the Company has recorded reserves for excess/obsolete inventory. Property, Plant and Equipment and Related Depreciation Property, plant and equipment (including equipment under capital lease) are stated at cost. Depreciation ($3,371,694 in 2016, $3,460,516 in 2015, $3,237,426 in 2014) is computed generally using the straight-line method based on the following estimated useful lives of the assets: Buildings 10 to 39.5 years; Machinery and equipment 3 to 10 years. Goodwill, Intangibles and Impairment of Long-Lived Assets 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. Amortization expense in 2016, 2015 and 2014 was $442,699, $460,922 and $248,876, respectively. Total amortization expense for each of the next five years is estimated to be as follows: 2017 - $406,000; 2018 - $406,000; 2019 - $406,000; 2020 - $173,000 and 2021 - $147,000. Trademarks are not amortized as their lives are deemed to be indefinite. The gross carrying amount and accumulated amortization of amortizable intangible assets:
In the event that facts and circumstances indicate that the carrying value of long-lived assets, including definite life intangible assets, may be impaired, an evaluation is performed to determine if a write-down is required. No events or changes in circumstances have occurred to indicate that the carrying amount of such long-lived assets held and used may not be recovered. The Company performed qualitative assessments as of the end of fiscal 2016 and fiscal 2015 and determined it is more likely than not that no impairment of goodwill existed at the end of 2016 or 2015. The Company will perform annual qualitative assessments in subsequent years as of the end of each fiscal year. Additionally, the Company will perform interim analysis whenever conditions warrant. Goodwill or trademarks would be considered impaired whenever the historical carrying amount exceeds the fair value. Pursuant to the qualitative assessment performed, goodwill and trademarks were not impaired in 2016, 2015 or 2014. Should we reach a different conclusion in the future, additional work would be performed to determine the amount of the non-cash impairment charge to be recognized. The maximum future impairment of goodwill or trademarks that could occur is the amount recognized on our balance sheet. The following is a roll-forward of goodwill for 2016 and 2015:
Cost of Goods Sold Cost of goods sold reflects the cost of purchasing, manufacturing and preparing a product for sale. These costs generally represent the expenses to acquire or manufacture products for sale (including an allocation of depreciation and amortization) and are primarily comprised of direct materials, direct labor, and overhead, which includes indirect labor, facility and equipment costs, inbound freight, receiving, inspection, purchasing, warehousing and any other costs related to the purchasing, manufacturing or preparation of a product for sale. Shipping and Handling Costs Shipping and handling costs are included in cost of goods sold. Selling, General and Administrative Expenses Selling, general and administrative expenses include all operating costs of the Company that are not directly related to the cost of purchasing, manufacturing and preparing a product for sale. These expenses generally represent the cost of selling or distributing the product once it is available for sale, as well as administrative expenses for support functions and related overhead. Research & Development Costs Research & development costs, charged to expense as incurred, were $1,525,650 in 2016, $1,218,948 in 2015 and $1,079,557 in 2014. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs were $441,853 in 2016, $496,066 in 2015 and $494,267 in 2014. Income Taxes The Company accounts for uncertain tax positions pursuant to the provisions of FASB Accounting Standards Codification (“ASC”) 740 which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. These provisions detail how companies should recognize, measure, present and disclose uncertain tax positions that have or are expected to be taken. As such, the financial statements will reflect expected future tax consequences of uncertain tax positions presuming the taxing authorities’ full knowledge of the position and all relevant facts. See Note 8 Income Taxes. The Company and its U.S. subsidiaries file a consolidated federal income tax return. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Earnings per Share The denominators used in the earnings per share computations follow:
There were no anti-dilutive stock equivalents in 2016, 2015 or 2014. Stock Based Compensation The Company accounts for stock based compensation pursuant to the fair value recognition provisions of ASC 718. No stock options were granted in 2016, 2015 or 2014, and, since all outstanding options were fully vested in each year presented, there was no impact on the financial statements. Under the terms of the Director’s Fee Program, the directors can elect to receive their director’s fees in cash or in common shares of the Company. This election is made at the beginning of each fiscal year and remains in effect for the entire year. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value:
The carrying amounts of other financial instruments (cash and cash equivalents, accounts receivable, accounts payable and debt) as of December 31, 2016 and January 2, 2016, approximate fair value. Fair value was based on expected cash flows and current market conditions. |
BUSINESS ACQUISITIONS |
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BUSINESS ACQUISITIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS ACQUISITIONS | 3. BusinessAcquisitions Effective December 15, 2014 the Company acquired certain assets of Argo Transdata Corporation (“Argo”) including accounts receivable, inventories, furniture, fixtures and equipment, intellectual property rights and rights existing under all sales and purchase agreements. Argo is a contract manufacturer of printed circuit board assemblies and has the ability to manufacture surface mount (SMT), through hole and wire bond assemblies or any combination of the three technologies. Its products are sold to numerous OEM’s in industries such as measurement systems, industrial controls, medical and military. The Argo acquisition further diversified our markets and provides a source for printed circuit boards which are used in several of our current products. Argo is included in the Security Products segment of the Company from the date of the acquisition. The cost of the acquisition of Argo was approximately $5,034,000, inclusive of transaction costs, plus a contingent earn-out of $282,914 based on revenue levels in each of the first two fiscal years following the closing and the assumption of $63,000 in current liabilities. The Company recognized $144,231 in 2016 and $138,683 in 2015 earnings as a result of Argo not meeting the sales goals for the 1st and 2nd year earn-out. On December 31, 2016 the contingent earn-out liability was zero. The above acquisition was accounted for under ASC 805. The acquired business is included in the consolidated operating results of the Company from the date of acquisition. The excess of the cost of Argo over the fair market value of the net assets acquired of $1,225,226 has been recorded as goodwill. In connection with the above acquisition, the Company recorded the following intangible assets:
There is no anticipated residual value relating to these intangible assets. Neither the actual results nor the pro forma effects of the acquisition of Argo are material to the Company's financial statements. |
CONTINGENCIES |
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Dec. 31, 2016 | |
CONTINGENCIES [Abstract] | |
CONTINGENCIES | 4. Contingencies The Company is party to various legal proceedings and claims related to its normal business operations. In the opinion of management, the Company has substantial and meritorious defenses for these claims and proceedings in which it is a defendant, and believes these matters will ultimately be resolved without a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company. The aggregate provision for losses related to contingencies arising in the ordinary course of business was not material to operating results for any year presented. During 2010, the Company was contacted by the State of Illinois regarding potential ground contamination at our plant in Wheeling, Illinois. The Company signed up with a voluntary remediation program in Illinois and has engaged an environmental clean-up company to perform testing and develop a remediation plan. Since 2010, the environmental company has completed a number of tests and a final remediation system design is expected to be approved in Fiscal 2017. In Fiscal 2016, the Company had expenses of $10,738 related to this issue. Final cost to remediate has not been determined at this time and is not expected to be material. Approximately 22% of the total workforce is subject to negotiated union contracts, and approximately 14% of the total workforce is covered by such agreements that expire during 2017. |
DEBT |
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DEBT [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | 5. Debt On January 29, 2010, the Company signed a secured Loan Agreement (the “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 principal payments of $178,571 for a period of seven (7) years, maturing on January 31, 2017. The revolving credit portion had a quarterly commitment fee of one quarter of one percent (0.25%), and a maturity date of January 31, 2012. The Loan Agreement is secured by all of the assets of the Company. On January 25, 2012 the Company amended the Loan Agreement by taking an additional $5,000,000 term loan (the “2012 Term Loan”). The 2012 Term Loan requires quarterly principal payments of $178,571 for a period of seven (7) years, maturing on January 31, 2019. At the same time the maturity date of the revolving credit portion was extended to January 31, 2014 and continued to have a quarterly commitment fee of one quarter of one percent (0.25%). Interest on the original term portion of the Loan Agreement is fixed at 4.98%. Interest on the 2012 Term Loan is fixed at 3.90%. For the period from January 25, 2012 to January 23, 2014, interest on the revolving credit portion of the Loan Agreement varied based on the LIBOR rate or People’s Prime rate plus 2.25%, with a floor of 3.25% with a maturity date of January 31, 2014. On January 23, 2014, the Company amended the Loan Agreement with People’s. The amendment renewed and extended the maturity date of the revolving credit portion of the Loan Agreement to July 1, 2016 and changed the interest rate to LIBOR plus 2.25%, and eliminated the 3.25% floor previously in place. The interest rate at December 31, 2016 on the revolving credit portion of the Loan Agreement was 3.02%. The quarterly commitment fee of one quarter of one percent (0.25%) remained unchanged. On June 9, 2016, the Company signed a third amendment to its secured Loan Agreement which extended the maturity date of the $10,000,000 revolver portion of the Loan Agreement to July 1, 2018. The Company did not utilize the revolving credit portion of the Loan Agreement at any time during 2015 or 2016. Debt consists of:
The Company paid interest of $127,735 in 2016, $174,558 in 2015 and $272,993 in 2014. The Company’s loan covenants under the Loan Agreement require the Company to maintain a fixed charge coverage ratio of at least 1.1 to 1, a leverage ratio of no more than 1.75 to 1, and minimum tangible net worth of $43 million increasing each year by 50% of consolidated net income. This amount was approximately $52.8 million as of December 28, 2013. As part of an amendment to the Loan Agreement signed on January 23, 2014, the leverage ratio was eliminated, and the minimum tangible net worth covenant was modified to a fixed minimum amount of $55 million, effective with the end of the Company’s first quarter of 2014. In addition, the Company has restrictions on, among other things, new capital leases, purchases or redemptions of its capital stock, mergers and divestitures, and new borrowing. The Company was in compliance with all covenants in 2015 and 2016. As of December 31, 2016, scheduled annual principal maturities of long-term debt for each of the next five years follow:
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STOCK RIGHTS |
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STOCK RIGHTS [Abstract] | |
STOCK RIGHTS | 6. Stock Rights The Company had a stock rights plan. At January 3, 2015, there were 6,244,013 stock rights outstanding under the plan. Each right may have been exercised to purchase one share of the Company’s common stock at an exercise price of $80.00, subject to adjustment to prevent dilution. On August 7, 2015, the Company terminated the 2008 Shareholder Rights Agreement. Pursuant to Section 23 of the Rights Agreement, the Company redeemed all of the outstanding rights at a redemption price of $0.01 per right. The redemption fee was paid on September 15, 2015, to common shareholders of record as of August 19, 2015. |
STOCK OPTIONS AND AWARDS |
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STOCK OPTIONS AND AWARDS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK OPTIONS AND AWARDS | 7. Stock Options and Awards Stock Options At the end of 2016, the Company had one stock option plan, the 2010 plan, for officers, other key employees, and non-employee directors. Incentive stock options granted under the 2010 plan 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 2010 plan, non-qualified 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 2016, 2015 or 2014. As of December 31, 2016, there were 500,000 shares of common stock reserved and available for future grant under the above noted 2010 plan. Information with respect to the Company’s stock option plans is summarized below:
At December 31, 2016, there were no stock options outstanding or exercisable. The total intrinsic value of stock options exercised in 2014 was $59,125. |
INCOME TAXES |
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Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | 8. Income Taxes Deferred income taxes are provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and those for income tax reporting purposes. Deferred income tax (assets) liabilities relate to:
Income before income taxes consists of:
The provision for income taxes follows:
A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows:
Total income taxes paid were $3,493,558 in 2016, $2,348,865 in 2015 and $3,989,978 in 2014. United States income taxes have been provided on the undistributed earnings of foreign subsidiaries ($16,163,932 at December 31, 2016) only where necessary because such earnings are intended to be reinvested abroad indefinitely or repatriated only when substantially free of such taxes. The Company would be required to accrue and pay United States income taxes to repatriate the funds held by foreign subsidiaries not otherwise provided. During 2016, 2015 and 2014, the Company received tax benefits of $0, $0 and $8,882, respectively, as a result of the exercise and sale of incentive stock options that resulted in the disqualification of those incentive stock options and the exercise of non-qualified stock options during the year. The tax benefit associated with the exercise of the incentive and non-qualified stock options has been recorded to common stock. A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:
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 2013 and non-U.S. income tax examinations by tax authorities prior to 2010. Included in the balance at December 31, 2016, are $166,214 of unrecognized tax benefits that would affect the annual effective tax rate. In 2016, the Company recognized accrued interest related to unrecognized tax benefits in income tax expense. The Company had approximately $37,000 of accrued interest at December 31, 2016. 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 ASC 740. The Company believes that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months. |
LEASES |
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LEASES [Abstract] | |||||||||||||||||||||||||||||||
LEASES | 9. Leases The Company leases certain equipment and buildings under operating lease arrangements. Most leases are for a fixed term and for a fixed amount; additionally, the Company leases certain buildings under operating leases on a month-to-month basis. The Company is not a party to any leases that have step rent provisions, escalation clauses, capital improvement funding or payment increases based on any index or rate. Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year during each of the next five years follow:
Rent expense for all operating leases was $1,293,271 in 2016, $1,324,365 in 2015 and $1,151,749 in 2014. The Company expects future rent expense, including non-cancelable operating leases, leases that are expected to be renewed and buildings leased on a month-to-month basis, for each of the next five years to be in the range of $1,100,000 to $1,400,000. |
RETIREMENT BENEFIT PLANS |
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RETIREMENT BENEFIT PLANS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RETIREMENT BENEFIT PLANS | 10. Retirement Benefit Plans The Company has non-contributory defined benefit pension plans covering most 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 non-qualified supplemental retirement plans that provide certain 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. On April 5, 2016, the Board of Directors passed a resolution freezing the benefits of The Salaried Employees Retirement Plan of The Eastern Company (the “Salaried Plan”) effective as of May 31, 2016. Under ASC 715, the Company is required to remeasure plan assets and obligations during an interim period whenever a significant event occurs that results in a material change in the net periodic pension cost. The determination of significance is based on judgment and consideration of events and circumstances affecting the pension costs. After consulting with our actuary the freezing of benefits under the Salaried Plan was considered a significant event pursuant to such standard. The Company used April 30, 2016 as the remeasurement date. Assumptions used to determine the projected benefits obligations for the Salaried Plan for the measurement date indicated follows:
As a result of the remeasurement, pension benefit obligations increased $3,022,291. The major components of this change are as follows:
In accordance with ASC 715, the Company performed curtailment accounting procedures in relation to the freezing of benefits of the Salaried Plan. The Company did not recognize any gain or loss related to the freeze of benefits accrued under the Salaried Plan, since there were no unrecognized prior service costs for the Salaried Plan, and the calculated $2.5 million gain from the reduction of accumulated plan benefits was more than offset by other actuarial losses in Other Comprehensive Income, there were no curtailment accounting adjustments required. Components of the net periodic benefit cost of the Company’s pension benefit plans for the fiscal year indicated were as follows:
As a result of the freezing of the benefits of the Salaried Plan, 2016 pension expense was reduced by $2,447,000. Assumptions used to determine net periodic benefit cost for the Company’s pension benefit plans for the fiscal year indicated were as follows:
Components of the net periodic benefit cost of the Company’s other postretirement benefit plan were as follows:
Assumptions used to determine net periodic benefit cost for the Company’s other postretirement plan for the fiscal year indicated were as follows:
As of December 31, 2016 and January 2, 2016, the status of the Company’s pension benefit plans and other postretirement benefit plan was as follows:
Amounts recognized in accumulated other comprehensive income consist of:
Change in the components of accumulated other comprehensive income consist of:
In 2017, the net periodic pension benefit cost will include $1,231,484 of net loss and $145,748 of prior service cost and the net periodic other postretirement benefit cost will include $93,921 of net gain and $23,890 of prior service credit. Assumptions used to determine the projected benefit obligations for the Company’s pension benefit plans and other postretirement benefit plan for the fiscal year indicated were as follows:
At December 31, 2016 and January 2, 2016, the accumulated benefit obligation for all qualified and nonqualified defined benefit pension plans was $92,258,937 and $83,433,339, respectively. Information for the under-funded pension plans with a projected benefit obligation and an accumulated benefit obligation in excess of plan assets:
Estimated future benefit payments to participants of the Company’s pension plans are $3.8 million in 2017, $4.0 million in 2018, $4.2 million in 2019, $4.5 million in 2020, $4.7 million in 2021 and a total of $26.2 million from 2022 through 2026. Estimated future benefit payments to participants of the Company’s other postretirement plan are $103,000 in 2017, $105,000 in 2018, $108,000 in 2019, $111,000 in 2020, $113,000 in 2021 and a total of $597,000 from 2022 through 2026. The Company expects to make cash contributions to its qualified pension plans of approximately $700,000 and to its other postretirement plan of approximately $103,000 in 2017. We consider a number of factors in determining and selecting assumptions for the overall expected long-term rate of return on plan assets. We consider the historical long-term return experience of our assets, the current and expected allocation of our plan assets, and expected long-term rates of return. We derive these expected long-term rates of return with the assistance of our investment advisors and generally base these rates on a 10-year horizon for various asset classes and consider the expected positive impact of active investment management. We base our expected allocation of plan assets on a diversified portfolio consisting of domestic and international equity securities and fixed income securities. We consider a variety of factors in determining and selecting our assumptions for the discount rate at the end of the year. In 2016, as in 2015 we developed each plan’s discount rate with the assistance of our actuaries by matching expected future benefit payments in each year to the corresponding spot rates from the Citigroup Pension Liability Yield Curve, comprised of high quality (rated AA or better) corporate bonds. Prior to 2015, we used the same process to determine each individual plan’s discount rate, but the average of these rates was used to determine a single rate for all plans. Effective for the Fiscal 2017 expense, the Company is changing the method used to measure Service Cost and Interest Cost for pension and other postretirement benefits for our plans. Previously, we measured interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligations. For 2017, interest costs will be measured by applying the specific spot rates along the yield curve to the plans’ corresponding discounted cash flows that comprise the obligation (i.e., the Spot rate Approach). The new method provides a more precise measurement of interest costs by aligning the timing of the plans’ discounted cash flows to the corresponding spot rates on the yield curve; the measurement of our pension and other postretirement benefit obligations is not affected. We have accounted for this change as a change in accounting estimate, which is applied prospectively. Consequently, combined 2017 pension expense for the Company’s pension plans and other postretirement plan under the Spot Rate approach is approximately $985,000, which is a $541,000 reduction when compared to the prior approach. During 2016, as a result of a legal separation of the Russell Indexes from Russell Investments into different companies with different ownership, the name of our Trustee changed from Russell Trust Company to Russell Investment Trust Company (“RITC”). The fair values of the company’s pension plans assets at December 31, 2016 and January 2, 2016, utilizing the fair value hierarchy discussed in Note 2, follow:
Equity common funds primarily hold publicly traded common stock of both U.S and international companies selected for purposes of total return and to maintain equity exposure consistent with policy allocations. The Level 1 investment is made up of shares of The Eastern Company Common Stock and is valued at market price. Level 2 investments include commingled funds valued at unit values provided by the investment managers, which are based on the fair value of the underlying publicly traded securities.
The investment portfolio contains a diversified blend of common stocks, bonds, cash equivalents, and other investments, which may reflect varying rates of return. The investments are further diversified within each asset classification. The portfolio diversification provides protection against a single security or class of securities having a disproportionate impact on aggregate performance. The Company has elected to change its investment strategy to better match the assets with the underlying plan liabilities. Currently, the long-term target allocations for plan assets are 50% in equities and 50% in fixed income although the actual plan asset allocations may be within a range around these targets. The actual asset allocations are reviewed and rebalanced on a periodic basis to maintain the target allocations. It is expected that, as the funded status of the plans improves, more assets will be invested in long-duration fixed income instruments. The plans’ assets include 217,018 shares of the common stock of the Company having a market value of $ $4,535,676 and $4,069,938 at December 31, 2016 and January 2, 2016, respectively. The Salaried Pension Plan purchased 14,456 shares of common stock at a cost of $232,124 during 2015. No shares were purchased in 2016 nor were and shares sold in either period. Dividends received during 2016 and 2015 on the common stock of the Company were $95,488 and $92,743 respectively. The fair values of the Company’s other postretirement plan assets at December 31, 2016 and January 2, 2016, utilizing the fair value hierarchy discussed in Note 2, follow:
The level 3 asset consists of an insurance contract with The Prudential Life Insurance Company of America. It is designed to provide life insurance benefits for eligible retirees of the Company. The contract is valued annually by the insurance company, based on activity in the account and is stated at contract value. An analysis of the Level 3 asset of the Company’s other postretirement plan is as follows:
The Level 3 assets described above are the only assets of the other postretirement plan, and thus have no impact on any Level 1 or Level 2 assets. For measurement purposes relating to the other postretirement benefit plan, the life insurance cost trend rate is 1%. The health care cost trend rate for participants retiring after January 1, 1991 is nil; no increase in that rate is expected because of caps placed on benefits. The health care cost trend rate is expected to remain at 4.5% for participants after the year 2000. A one-percentage-point change in assumed health care cost trend rates would have no effect on the other postretirement benefit plan. U.S. salaried and non-union hourly employees and most employees of the Company’s Canadian subsidiaries are covered by defined contribution plans. The Company has a contributory savings plan under Section 401(k) of the Internal Revenue Code covering substantially all U.S. non-union employees. This 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. In December 2015, the Company approved a 50% match on the first 4% of employee contributions. The Company amended the Eastern Company Savings and Investment Plan (“401(k) Plan Amendment”) effective June 1, 2016. The 401(k) Plan Amendment increased this match to 50% of the first 6% of contributions for the remainder of Fiscal 2016. The 401(k) Plan Amendment also provided for an additional non-discretionary contribution (the “transitional credit”) for certain non-union U.S. employees who were eligible to participate in the Salaried Plan. The amount of this non-discretionary contribution ranges from 0% to 4% of wages, based on the age of the individual on June 1, 2016. Also in December 2015, the Company approved a non-discretionary profit sharing contribution of 2.5% for the benefit of all non-union U.S. employees who were not eligible for the Company’s Salaried Plan. The 401(k) Plan Amendment increased the non-discretionary contribution to 3%, and changed the eligibility to all non-union U.S. employees. The Company made contributions to the plan as follows:
The non-discretionary contribution for $51,470 was expensed in Fiscal 2015 and contributed to the Plan in Fiscal 2016. At December 31, 2016, the Company had accrued $307,568 for the non-discretionary contribution. This amount was contributed to the Plan in January 2017. |
REPORTABLE SEGMENTS |
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REPORTABLE SEGMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | 11. Reportable Segments (continued)
Foreign sales are primarily to customers in North America.
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RECENT ACCOUNTING PRONOUNCEMENTS |
12 Months Ended |
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Dec. 31, 2016 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 12. Recent Accounting Pronouncements In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements and Property, Plant and Equipment. ASU No. 2014-08 provides authoritative guidance which changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. To qualify as a discontinued operation the standard requires a disposal to represent a strategic shift that has, or will have, a major effect on an entity's operations and financial results. The standard also expands the disclosures for discontinued operations and requires new disclosures related to individually material dispositions that do not qualify as discontinued operations. The guidance is effective for fiscal years beginning after December 15, 2014, with early adoption permitted. The Company adopted this guidance with its fiscal year effective January 4, 2015 and did not impact the consolidated financial statements of the Company. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 provides authoritative guidance which impacts virtually all aspects of an entity's revenue recognition. The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date. ASU No. 2015-14 defers the adoption date of ASU 2014-09, Revenue from Contracts with Customers in which both the FASB and IASB in a joint project will clarify the principles for recognizing revenue and to develop a common revenue standard. The guidance is to be applied using a retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2017. Early adoption is permitted. The Company is still in the process of determining the effect that the adoption of ASU 2015-14 will have on the accompanying financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory: Simplifying the Measurement of Inventory. ASU No. 2015-11 provides authoritative guidance which requires a company to change its valuation method of inventory from the lower of cost or market (market being replacement cost, net realizable value or net realizable value less an approximate profit margin) to the lower of cost or net realizable value. The amendment is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendment should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this amendment is not expected to have a material impact on the consolidated financial statements of the Company. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations. ASU 2015-16 provides authoritative guidance which will simplify the accounting for adjustments made to provisional amounts recognized in a business combination. U.S. GAAP currently requires that during the measurement period, the acquirer retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. The amendments require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments were effective for Fiscal 2017, including interim periods. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date with earlier application permitted for financial statements that have not yet been issued. The adoption of this amendment did not have a material impact on the consolidated financial statements of the Company. In November 2015, the FASB issued accounting standards update 2015-07 which simplifies the balance sheet classification of deferred taxes. This standard requires that all deferred tax assets and liabilities be classified as non-current in the classified balance sheet, rather than separating such deferred taxes into current and non-current amounts, as is required under current guidance. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period with early application permitted. The Company has not early adopted ASU 2015-17. This guidance will be effective for the Company in the first quarter of 2017 In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires lessees to present right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2019. Early adoption is permitted. The Company is still in the process of determining the effect that the adoption of ASU 2016-02 will have on the accompanying financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows - Classification of certain types of cash receipts and cash payments. ASU 2016-15 provides guidance regarding eight specific cash flow issues. The guidance is to be applied using a retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2017. Early adoption is permitted. The Company is still in the process of determining the effect that the adoption of ASU 2016-15 will have on the accompanying financial statements. In March 2016, the Financial Accounting Standards Board ("FASB") issued accounting standards update 2016-09 which simplifies employee share-based payment accounting. This standard will simplify the income tax consequences, accounting for forfeitures and classification on the statement of cash flows. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company did not early adopt ASU 2016-09. This guidance will be effective for the Company in the first quarter of 2017. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations – Clarifying the Definition of a business. ASU 201-01 provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or dispositions of assets or businesses. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is still in the process of determining the effect that the adoption of ASU 2017-01 will have on the accompanying financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other: Simplifying the test for Goodwill Impairment. ASU 201-04 provides guidance to simplify the subsequent measure of goodwill by eliminating Step 2 from the goodwill impairment test. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period after January 1, 2017. The Company is still in the process of determining the effect that the adoption of ASU 2017-04 will have on the accompanying financial statements. In February 2017, the FASB issued ASU No. 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting. ASU 201-06 provides guidance for reporting by an employee benefit plan for its interest in a master trust. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment should be applied retrospectively with earlier application permitted as of the beginning of an interim or annual reporting period after December 15, 2018. The Company is still in the process of determining the effect that the adoption of ASU 2017-06 will have on the accompanying financial statements. 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. |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 13. 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. The Company has established credit limits for customers and monitors their balances to mitigate its risk of loss. At December 31, 2016 and January 2, 2016, there were no significant concentrations of credit risk. No customer represented more than 10% of total accounts receivable at December 31, 2016 and January 2, 2016. The maximum exposure to credit risk is primarily represented by the carrying amount of the Company’s accounts receivable. Interest Rate Risk As of December 31, 2016 the Company currently has a fixed rate of 4.98% and 3.90% on its term debt. On December 31, 2016 the interest rate on the Company’s revolver was a variable rate based on LIBOR plus 2.25%. See Note 5 for additional details concerning the Loan Agreement. As the revolver is short term in nature, the Company does not consider this as a material risk to the financial statements. Currency Exchange Rate Risk The Company’s currency exposure is concentrated in the Canadian dollar, Mexican peso, New Taiwan dollar, Chinese RMB and the Hong Kong dollar. Because of the Company’s limited exposure to any single foreign market, any exchange gains or losses have not been material and are not expected to be material in the future. As a result, the Company does not attempt to mitigate its foreign currency exposure through the acquisition of any speculative or leveraged financial instruments. 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 were no assets or liabilities requiring fair value measurement on December 31, 2016. |
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) |
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SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 14. Selected Quarterly Financial Information (Unaudited) Selected quarterly financial information (unaudited) follows:
Fiscal 2016 and 2015 consisted of four 13 week quarters totaling 52 weeks for the year. |
Schedule II - Valuation and Qualifying accounts |
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Schedule II - Valuation and Qualifying accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying accounts | The Eastern Company and Subsidiaries Schedule II – Valuation and Qualifying accounts
(a) Uncollectible accounts written off, net of recoveries. |
ACCOUNTING POLICIES (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. On an ongoing basis the Company evaluates its estimates, including those related to product returns, bad debts, carrying value of inventories, intangible and other long-lived assets, income taxes, pensions and other postretirement benefits. Actual results could differ from those estimates. |
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Fiscal Year | Fiscal Year The Company’s year ends on the Saturday nearest to December 31. Fiscal 2016 was a 52 week year, 2015 was a 52 week year and 2014 was a 53 week year. |
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Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany accounts and transactions are eliminated. |
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Cash Equivalents | Cash Equivalents Highly liquid investments purchased with a maturity of three months or less are considered cash equivalents. The Company has deposits that exceed amounts insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, but the Company does not consider this a significant concentration of credit risk based on the strength of the financial institution. Approximately 51% of available cash is located outside of the United States in our foreign subsidiaries. |
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Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net income. |
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Foreign Currency | Foreign Currency For foreign operations balance sheet accounts are translated at the current year-end exchange rate; income statement accounts are translated at the average exchange rate for the year. Resulting translation adjustments are made directly to a separate component of shareholders’ equity – “Accumulated other comprehensive income (loss) – Foreign currency translation”. Foreign currency exchange transaction gains and losses are not material in any year. |
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Recognition of Sales | Recognition of Sales Sales are recognized when persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred, and there is a reasonable assurance of collection of the sales proceeds. The Company obtains written purchase authorizations from its customers for a specified amount of product at a specified price and delivery occurs at the time of shipment. Credit is extended based on an evaluation of each customer’s financial condition; collateral is not required. Sales are recorded net of returns and allowances. Accounts receivable are recorded net of applicable allowances. No customer accounted for 10% of net sales during 2016, 2015 or 2014. No customer exceeded 10% of total accounts receivable at year end 2016 or 2015. |
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Accounts Receivable | Accounts Receivable Accounts receivable are stated at their net realizable value. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews the collectability of its receivables on an ongoing basis taking into account a combination of factors. The Company reviews potential problems, such as past due accounts, a bankruptcy filing or deterioration in the customer’s financial condition, to ensure the Company is adequately accrued for potential loss. Accounts are considered past due based on when payment was originally due. If a customer’s situation changes, such as a bankruptcy or creditworthiness, or there is a change in the current economic climate, the Company may modify its estimate of the allowance for doubtful accounts. The Company will write off accounts receivable after reasonable collection efforts have been made and the accounts are deemed uncollectible. Write-offs have been within management’s estimates. |
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Inventories | Inventories Inventories are valued at the lower of cost or market. Cost is determined by the last-in, first-out (LIFO) method in the U.S. ($28,052,368 for U.S. inventories at December 31, 2016) and by the first-in, first-out (FIFO) method for inventories outside the U.S. ($5,977,918 for inventories outside the U.S. at December 31, 2016). Cost exceeds the LIFO carrying value by approximately $6,121,286 at December 31, 2016 and $6,297,368 at January 2, 2016. There was no material LIFO quantity liquidation in 2016, 2015 and 2014. In addition, as of the balance sheet dates, the Company has recorded reserves for excess/obsolete inventory. |
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Property, Plant and Equipment and Related Depreciation | Property, Plant and Equipment and Related Depreciation Property, plant and equipment (including equipment under capital lease) are stated at cost. Depreciation ($3,371,694 in 2016, $3,460,516 in 2015, $3,237,426 in 2014) is computed generally using the straight-line method based on the following estimated useful lives of the assets: Buildings 10 to 39.5 years; Machinery and equipment 3 to 10 years. |
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Goodwill, Intangibles and Impairment of Long-Lived Assets | Goodwill, Intangibles and Impairment of Long-Lived Assets 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. Amortization expense in 2016, 2015 and 2014 was $442,699, $460,922 and $248,876, respectively. Total amortization expense for each of the next five years is estimated to be as follows: 2017 - $406,000; 2018 - $406,000; 2019 - $406,000; 2020 - $173,000 and 2021 - $147,000. Trademarks are not amortized as their lives are deemed to be indefinite. The gross carrying amount and accumulated amortization of amortizable intangible assets:
In the event that facts and circumstances indicate that the carrying value of long-lived assets, including definite life intangible assets, may be impaired, an evaluation is performed to determine if a write-down is required. No events or changes in circumstances have occurred to indicate that the carrying amount of such long-lived assets held and used may not be recovered. The Company performed qualitative assessments as of the end of fiscal 2016 and fiscal 2015 and determined it is more likely than not that no impairment of goodwill existed at the end of 2016 or 2015. The Company will perform annual qualitative assessments in subsequent years as of the end of each fiscal year. Additionally, the Company will perform interim analysis whenever conditions warrant. Goodwill or trademarks would be considered impaired whenever the historical carrying amount exceeds the fair value. Pursuant to the qualitative assessment performed, goodwill and trademarks were not impaired in 2016, 2015 or 2014. Should we reach a different conclusion in the future, additional work would be performed to determine the amount of the non-cash impairment charge to be recognized. The maximum future impairment of goodwill or trademarks that could occur is the amount recognized on our balance sheet. The following is a roll-forward of goodwill for 2016 and 2015:
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Cost of Goods Sold | Cost of Goods Sold Cost of goods sold reflects the cost of purchasing, manufacturing and preparing a product for sale. These costs generally represent the expenses to acquire or manufacture products for sale (including an allocation of depreciation and amortization) and are primarily comprised of direct materials, direct labor, and overhead, which includes indirect labor, facility and equipment costs, inbound freight, receiving, inspection, purchasing, warehousing and any other costs related to the purchasing, manufacturing or preparation of a product for sale. |
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Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included in cost of goods sold. |
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Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include all operating costs of the Company that are not directly related to the cost of purchasing, manufacturing and preparing a product for sale. These expenses generally represent the cost of selling or distributing the product once it is available for sale, as well as administrative expenses for support functions and related overhead. |
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Research & Development Costs | Research & Development Costs Research & development costs, charged to expense as incurred, were $1,525,650 in 2016, $1,218,948 in 2015 and $1,079,557 in 2014. |
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Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising costs were $441,853 in 2016, $496,066 in 2015 and $494,267 in 2014. |
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Income Taxes | Income Taxes The Company accounts for uncertain tax positions pursuant to the provisions of FASB Accounting Standards Codification (“ASC”) 740 which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. These provisions detail how companies should recognize, measure, present and disclose uncertain tax positions that have or are expected to be taken. As such, the financial statements will reflect expected future tax consequences of uncertain tax positions presuming the taxing authorities’ full knowledge of the position and all relevant facts. See Note 8 Income Taxes. The Company and its U.S. subsidiaries file a consolidated federal income tax return. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. |
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Earnings per Share | Earnings per Share The denominators used in the earnings per share computations follow:
There were no anti-dilutive stock equivalents in 2016, 2015 or 2014. |
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Stock Based Compensation | Stock Based Compensation The Company accounts for stock based compensation pursuant to the fair value recognition provisions of ASC 718. No stock options were granted in 2016, 2015 or 2014, and, since all outstanding options were fully vested in each year presented, there was no impact on the financial statements. Under the terms of the Director’s Fee Program, the directors can elect to receive their director’s fees in cash or in common shares of the Company. This election is made at the beginning of each fiscal year and remains in effect for the entire year. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value:
The carrying amounts of other financial instruments (cash and cash equivalents, accounts receivable, accounts payable and debt) as of December 31, 2016 and January 2, 2016, approximate fair value. Fair value was based on expected cash flows and current market conditions. |
ACCOUNTING POLICIES (Tables) |
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ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross carrying amount and accumulated amortization of amortizable intangible assets | The gross carrying amount and accumulated amortization of amortizable intangible assets:
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Roll-forward of goodwill | The following is a roll-forward of goodwill for 2016 and 2015:
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Denominators used in the earnings per share computations | The denominators used in the earnings per share computations follow:
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BUSINESS ACQUISITIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS ACQUISITIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business acquisition intangible assets | In connection with the above acquisition, the Company recorded the following intangible assets:
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DEBT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | Debt consists of:
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Scheduled annual principal maturities of long-term debt | As of December 31, 2016, scheduled annual principal maturities of long-term debt for each of the next five years follow:
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STOCK OPTIONS AND AWARDS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK OPTIONS AND AWARDS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option activity | Information with respect to the Company’s stock option plans is summarized below:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred income tax (assets) liabilities | Deferred income tax (assets) liabilities relate to:
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Income before income taxes | Income before income taxes consists of:
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Provision for income taxes | The provision for income taxes follows:
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Reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations | A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows:
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Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:
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LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||
LEASES [Abstract] | |||||||||||||||||||||||||||||||
Future minimum payments under non-cancelable operating leases | Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year during each of the next five years follow:
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RETIREMENT BENEFIT PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assumptions used to determine net periodic benefit cost for benefit plans | The Company used April 30, 2016 as the remeasurement date. Assumptions used to determine the projected benefits obligations for the Salaried Plan for the measurement date indicated follows:
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Funded status of pension benefit plans and postretirement benefit plan | The major components of this change are as follows:
As of December 31, 2016 and January 2, 2016, the status of the Company’s pension benefit plans and other postretirement benefit plan was as follows:
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Amounts recognized in accumulated other comprehensive income | Amounts recognized in accumulated other comprehensive income consist of:
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Change in the components of accumulated other comprehensive income | Change in the components of accumulated other comprehensive income consist of:
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Schedule of assumptions used to determine projected benefit obligations for benefit plans | Assumptions used to determine the projected benefit obligations for the Company’s pension benefit plans and other postretirement benefit plan for the fiscal year indicated were as follows:
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Projected benefit obligation and accumulated benefit obligation in excess of plan assets | Information for the under-funded pension plans with a projected benefit obligation and an accumulated benefit obligation in excess of plan assets:
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Defined Contribution Plan | The Company made contributions to the plan as follows:
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Pension Benefits [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assumptions used to determine net periodic benefit cost for benefit plans | Assumptions used to determine net periodic benefit cost for the Company’s pension benefit plans for the fiscal year indicated were as follows:
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Components of the net periodic benefit cost | Components of the net periodic benefit cost of the Company’s pension benefit plans for the fiscal year indicated were as follows:
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Fair values of plans assets utilizing fair value hierarchy | The fair values of the company’s pension plans assets at December 31, 2016 and January 2, 2016, utilizing the fair value hierarchy discussed in Note 2, follow:
Equity common funds primarily hold publicly traded common stock of both U.S and international companies selected for purposes of total return and to maintain equity exposure consistent with policy allocations. The Level 1 investment is made up of shares of The Eastern Company Common Stock and is valued at market price. Level 2 investments include commingled funds valued at unit values provided by the investment managers, which are based on the fair value of the underlying publicly traded securities.
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Other Postretirement Benefits [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assumptions used to determine net periodic benefit cost for benefit plans | Assumptions used to determine net periodic benefit cost for the Company’s other postretirement plan for the fiscal year indicated were as follows:
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Components of the net periodic benefit cost | Components of the net periodic benefit cost of the Company’s other postretirement benefit plan were as follows:
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Fair values of plans assets utilizing fair value hierarchy | The fair values of the Company’s other postretirement plan assets at December 31, 2016 and January 2, 2016, utilizing the fair value hierarchy discussed in Note 2, follow:
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Analysis of the Level 3 assets of the Company's postretirement plan | An analysis of the Level 3 asset of the Company’s other postretirement plan is as follows:
|
REPORTABLE SEGMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REPORTABLE SEGMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment financial information |
Foreign sales are primarily to customers in North America.
|
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected quarterly financial information (unaudited) | Selected quarterly financial information (unaudited) follows:
|
CONTINGENCIES (Details) |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
CONTINGENCIES [Abstract] | |
Estimated cost of remediation | $ 10,738 |
Total workforce subject to negotiated union contracts | 22.00% |
Total workforce covered by union contract agreements expiring during 2017 | 14.00% |
STOCK RIGHTS (Details) - $ / shares |
Aug. 07, 2015 |
Jan. 03, 2015 |
---|---|---|
STOCK RIGHTS [Abstract] | ||
Stock rights outstanding (in shares) | 6,244,013 | |
Stock rights, exercise price (in dollars per share) | $ 80.00 | |
Stock rights, redemption price per share (in dollars per share) | $ 0.01 |
LEASES (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Future minimum payments under non-cancelable operating leases [Abstract] | |||
Rent expense for all operating leases | $ 1,293,271 | $ 1,324,365 | $ 1,151,749 |
Non-Cancelable Leases [Member] | |||
Future minimum payments under non-cancelable operating leases [Abstract] | |||
2017 | 1,218,047 | ||
2018 | 1,145,243 | ||
2019 | 741,243 | ||
2020 | 515,845 | ||
2021 | 285,088 | ||
Total | 3,905,466 | ||
All Leases of All Kinds [Member] | Minimum [Member] | |||
Future minimum payments under non-cancelable operating leases [Abstract] | |||
2017 | 1,100,000 | ||
2018 | 1,100,000 | ||
2019 | 1,100,000 | ||
2020 | 1,100,000 | ||
2021 | 1,100,000 | ||
All Leases of All Kinds [Member] | Maximum [Member] | |||
Future minimum payments under non-cancelable operating leases [Abstract] | |||
2017 | 1,400,000 | ||
2018 | 1,400,000 | ||
2019 | 1,400,000 | ||
2020 | 1,400,000 | ||
2021 | $ 1,400,000 |
RETIREMENT BENEFIT PLANS, Health Care Costs Trend Rates (Details) |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |
Health care cost trend rate for participants after January 1, 1991 | 0.00% |
Ultimate health care cost trend rate | 4.50% |
Other Postretirement Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Life insurance cost trend rate | 1.00% |
RETIREMENT BENEFIT PLANS, Defined Contribution Plan (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Total contributions made for the period | $ 611,461 | $ 232,399 | $ 186,545 | |
Regular Matching Contributions [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total contributions made for the period | 328,144 | 232,399 | 186,545 | |
Transitional Credit Contributions [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total contributions made for the period | 231,847 | 0 | 0 | |
Non-discretionary Contributions [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total contributions made for the period | $ 51,470 | 0 | $ 0 | |
Plan 401K Plan Original [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer matching contribution percentage | 50.00% | |||
Employer matching contribution on first of total employee contributions, percentage | 4.00% | |||
Non-discretionary contribution percentage for employees who were not eligible to participate in the salaried plan | 2.50% | |||
Plan 401 K Plan Amendment [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of voluntary contributions allowed to participants, maximum | 100.00% | |||
Increase in employer matching contribution on first of total employee contributions, percentage | 6.00% | |||
Non-discretionary contribution percentage for employees who were not eligible to participate in the salaried plan | 3.00% | |||
U.S. Non Union Employees [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total contributions made for the period | $ 307,568 | $ 51,470 | ||
Minimum [Member] | U.S. Non Union Employees [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Non-discretionary contribution percentage for certain employees who were eligible to participate in the salaried plan | 0.00% | |||
Maximum [Member] | U.S. Non Union Employees [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Non-discretionary contribution percentage for certain employees who were eligible to participate in the salaried plan | 4.00% |
REPORTABLE SEGMENTS (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Oct. 01, 2016 |
Jul. 02, 2016 |
Apr. 02, 2016 |
Jan. 02, 2016 |
Oct. 03, 2015 |
Jul. 04, 2015 |
Apr. 04, 2015 |
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Segment Reporting Information [Line Items] | |||||||||||
Sales | $ 34,144,942 | $ 33,478,347 | $ 36,883,312 | $ 33,101,657 | $ 34,413,912 | $ 36,239,500 | $ 37,037,697 | $ 36,876,842 | $ 137,608,258 | $ 144,567,951 | $ 140,825,360 |
Operating profit | 11,135,872 | 8,027,728 | 11,718,648 | ||||||||
Interest expense | (121,500) | (185,475) | (254,576) | ||||||||
Other income | 209,043 | 178,722 | 64,691 | ||||||||
Income before income taxes | 11,223,415 | 8,020,975 | 11,528,763 | ||||||||
Assets | 124,198,396 | 121,738,559 | 124,198,396 | 121,738,559 | 121,270,556 | ||||||
Depreciation and amortization | 3,814,393 | 3,921,438 | 3,486,302 | ||||||||
Capital expenditures before currency translation adjustment | 2,820,759 | 2,500,377 | 3,567,238 | ||||||||
Currency translation adjustment | (8,889) | 25,020 | 10,347 | ||||||||
Capital expenditures | 2,863,470 | 2,538,236 | 3,633,165 | ||||||||
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Assets | 100,246,515 | 104,045,708 | 100,246,515 | 104,045,708 | 102,271,004 | ||||||
Operating Segments [Member] | Industrial Hardware [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 61,058,871 | 61,338,812 | 58,666,229 | ||||||||
Operating profit | 5,683,730 | 4,314,149 | 5,063,786 | ||||||||
Assets | 32,278,281 | 30,425,348 | 32,278,281 | 30,425,348 | 29,660,695 | ||||||
Depreciation and amortization | 1,468,904 | 1,580,741 | 1,631,521 | ||||||||
Capital expenditures before currency translation adjustment | 648,516 | 1,479,984 | 1,929,022 | ||||||||
Operating Segments [Member] | Security Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 57,255,101 | 56,598,487 | 49,381,553 | ||||||||
Operating profit | 5,677,264 | 3,798,115 | 4,058,554 | ||||||||
Assets | 49,520,708 | 52,688,497 | 49,520,708 | 52,688,497 | 51,573,271 | ||||||
Depreciation and amortization | 980,048 | 1,010,262 | 621,501 | ||||||||
Capital expenditures before currency translation adjustment | 1,018,371 | 388,377 | 973,365 | ||||||||
Operating Segments [Member] | Metal Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 19,294,286 | 26,630,652 | 32,777,578 | ||||||||
Operating profit | (225,122) | (84,536) | 2,596,308 | ||||||||
Assets | 18,447,526 | 20,931,863 | 18,447,526 | 20,931,863 | 21,037,058 | ||||||
Depreciation and amortization | 1,365,441 | 1,330,435 | 1,233,280 | ||||||||
Capital expenditures before currency translation adjustment | 1,153,872 | 632,016 | 644,851 | ||||||||
Intersegment Eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 3,354,207 | 3,425,976 | 3,549,925 | ||||||||
Intersegment Eliminations [Member] | Industrial Hardware [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 637,405 | 595,596 | 984,192 | ||||||||
Intersegment Eliminations [Member] | Security Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 2,716,802 | 2,813,576 | 2,565,733 | ||||||||
Intersegment Eliminations [Member] | Metal Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 0 | 16,804 | 0 | ||||||||
General Corporate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Assets | 23,951,881 | 17,692,851 | 23,951,881 | 17,692,851 | 18,999,552 | ||||||
Capital expenditures | 51,600 | 12,839 | 55,580 | ||||||||
Reportable Geographical Components [Member] | United States [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 117,679,860 | 126,115,036 | 117,478,557 | ||||||||
Assets | 107,031,435 | 106,662,743 | 107,031,435 | 106,662,743 | 105,771,961 | ||||||
Reportable Geographical Components [Member] | Foreign [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 19,928,398 | 18,452,915 | 23,346,803 | ||||||||
Assets | $ 17,166,961 | $ 15,075,816 | $ 17,166,961 | $ 15,075,816 | $ 15,498,595 |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details) - Customer |
12 Months Ended | ||
---|---|---|---|
Jan. 23, 2014 |
Dec. 31, 2016 |
Jan. 02, 2016 |
|
Term Loan [Member] | |||
Interest Rate Risk [Abstract] | |||
Fixed rate of interest | 4.98% | ||
2012 Term Loan Member] | |||
Interest Rate Risk [Abstract] | |||
Fixed rate of interest | 3.90% | ||
Revolving Credit Loan [Member] | |||
Interest Rate Risk [Abstract] | |||
Fixed rate of interest | 3.02% | ||
Revolving Credit Loan [Member] | LIBOR [Member] | |||
Interest Rate Risk [Abstract] | |||
Basis spread on variable rate | 2.25% | 2.25% | |
Credit Concentration Risk [Member] | |||
Credit Risk [Abstract] | |||
Number of customers that represented more than 10% of trade receivables | 0 | 0 |
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Oct. 01, 2016 |
Jul. 02, 2016 |
Apr. 02, 2016 |
Jan. 02, 2016 |
Oct. 03, 2015 |
Jul. 04, 2015 |
Apr. 04, 2015 |
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) [Abstract] | |||||||||||
Net sales | $ 34,144,942 | $ 33,478,347 | $ 36,883,312 | $ 33,101,657 | $ 34,413,912 | $ 36,239,500 | $ 37,037,697 | $ 36,876,842 | $ 137,608,258 | $ 144,567,951 | $ 140,825,360 |
Gross margin | 10,417,944 | 8,852,878 | 8,601,603 | 6,420,446 | 8,100,044 | 9,033,843 | 7,912,161 | 7,335,178 | 34,292,871 | 32,381,226 | 32,486,404 |
Selling and administrative expenses | 6,612,918 | 5,588,764 | 5,495,735 | 5,459,582 | 5,749,422 | 5,584,222 | 7,056,139 | 5,963,695 | 23,156,999 | 24,353,498 | 20,767,756 |
Net (loss)/income | $ 2,649,349 | $ 2,400,064 | $ 2,087,837 | $ 648,073 | $ 1,740,776 | $ 2,527,722 | $ 584,594 | $ 873,951 | $ 7,785,323 | $ 5,727,043 | $ 7,661,476 |
Net (loss)/income per share [Abstract] | |||||||||||
Basic (in dollars per share) | $ 0.42 | $ 0.38 | $ 0.33 | $ 0.10 | $ 0.28 | $ 0.41 | $ 0.09 | $ 0.14 | $ 1.25 | $ 0.92 | $ 1.23 |
Diluted (in dollars per share) | $ 0.42 | $ 0.38 | $ 0.33 | $ 0.10 | $ 0.28 | $ 0.41 | $ 0.09 | $ 0.14 | $ 1.25 | $ 0.92 | $ 1.23 |
Weighted average shares outstanding [Abstract] | |||||||||||
Basic (in shares) | 6,254,605 | 6,252,681 | 6,250,610 | 6,248,222 | 6,246,571 | 6,245,099 | 6,244,051 | 6,244,088 | 6,251,535 | 6,245,057 | 6,225,068 |
Diluted (in shares) | 6,254,605 | 6,252,681 | 6,250,610 | 6,248,222 | 6,246,571 | 6,245,099 | 6,244,051 | 6,244,088 | 6,251,535 | 6,245,057 | 6,237,914 |
Schedule II - Valuation and Qualifying accounts (Details) - Allowance for Doubtful Accounts [Member] - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Balance at Beginning of Period | $ 450,000 | $ 414,000 | $ 410,000 | ||
Charged to Costs and Expenses | 0 | 52,144 | 71,927 | ||
Charged to Other Accounts - Describe | |||||
Deductions - Describe | [1] | 20,000 | 16,144 | 67,927 | |
Balance at End of Period | $ 430,000 | $ 450,000 | $ 414,000 | ||
|
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