Document And Entity Information
v0.0.0.0
Document And Entity Information (USD $)
12 Months Ended
Dec. 31, 2013
Mar. 03, 2014
Jun. 30, 2013
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2013    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2013    
Entity Registrant Name NATIONAL PRESTO INDUSTRIES INC    
Entity Central Index Key 0000080172    
Current Fiscal Year End Date --12-31    
Entity Filer Category Accelerated Filer    
Entity Common Stock, Shares Outstanding   6,902,053  
Entity Public Float     $ 347,308,636
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    

Consolidated Balance Sheets
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Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
CURRENT ASSETS:    
Cash and cash equivalents $ 22,953 $ 37,437
Marketable securities 36,404 55,586
Accounts receivable 85,400 82,554
Less allowance for doubtful accounts 1,078 6,111
Accounts receivable, net 84,322 76,443
Inventories:    
Finished goods 36,078 33,851
Work in process 49,690 40,340
Raw materials 6,746 9,173
Total inventory 92,514 83,364
Deferred tax assets 8,083 8,906
Income tax receivable 213  
Other current assets 19,584 9,018
Total current assets 264,073 270,754
Land and land improvements 4,007 2,010
Buildings 37,809 30,708
Machinery and equipment 114,056 90,700
PROPERTY, PLANT AND EQUIPMENT 155,872 123,418
Less allowance for depreciation 66,283 61,553
PROPERTY, PLANT AND EQUIPMENT, NET 89,589 61,865
GOODWILL 11,485 14,325
INTANGIBLE ASSETS 24,698 3,397
NOTE RECEIVABLE 3,695 3,571
Total assets 393,540 353,912
CURRENT LIABILITIES:    
Accounts payable 38,323 39,077
Federal and state income taxes   1,642
Accrued liabilities 15,907 15,254
Total current liabilities 54,230 55,973
DEFERRED INCOME TAX 6,759 7,368
COMMITMENTS AND CONTINGENCIES      
STOCKHOLDERS' EQUITY    
Common stock, $1 par value: Authorized: 12,000,000 Issued: 7,440,518 7,441 7,441
Paid-in capital 4,998 4,472
Retained earnings 336,895 295,643
Accumulated other comprehensive income 8 53
Stockholders' Equity before Treasury Stock 349,342 307,609
Treasury stock, at cost 16,791 17,038
Total stockholders' equity 332,551 290,571
Total liabilities and stockholders' equity $ 393,540 $ 353,912

Consolidated Balance Sheets (Parenthetical)
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Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2013
Dec. 31, 2012
Consolidated Balance Sheets [Abstract]    
Common stock, par value $ 1 $ 1
Common stock, shares authorized 12,000,000 12,000,000
Common stock, shares issued 7,440,518 7,440,518
Common stock, shares outstanding 6,902,053 6,894,158
Treasury stock, at cost 538,465 546,360

Consolidated Statements Of Comprehensive Income
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Consolidated Statements Of Comprehensive Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Consolidated Statements Of Comprehensive Income [Abstract]      
Net sales $ 420,188 $ 472,490 $ 431,021
Cost of sales 340,836 377,627 337,262
Gross profit 79,352 94,863 93,759
Selling and general expenses 21,898 35,144 20,022
Change in contingent consideration liability (3,000)    
Goodwill impairment 2,840 0 0
Operating profit 57,614 59,719 73,737
Other income 731 705 1,288
Earnings before provision for income taxes 58,345 60,424 75,025
Income tax provision 17,093 21,549 27,057
Net earnings 41,252 38,875 47,968
Weighted average common shares outstanding:      
Basic and diluted 6,907 6,889 6,875
Net earnings per share:      
Basic and diluted $ 5.97 $ 5.64 $ 6.98
Other comprehensive loss, net of tax:      
Unrealized loss on available-for-sale securities 45 19 57
Comprehensive income $ 41,207 $ 38,856 $ 47,911

Consolidated Statements Of Cash Flows
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Consolidated Statements Of Cash Flows (USD $)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Cash flows from operating activities:      
Net earnings $ 41,252,000 $ 38,875,000 $ 47,968,000
Adjustments to reconcile net earnings to net cash provided by operating activities:      
Provision for depreciation 8,277,000 10,136,000 9,037,000
Change in contingent consideration liability (3,000,000)    
Goodwill impairment 2,840,000 0 0
Loss (gain) on disposal and impairment of property, plant and equipment (154,000) 5,843,000 10,000
Provision for doubtful accounts 816,000 5,629,000 1,037,000
Deferred income tax provision (benefit) 239,000 (4,792,000) 5,096,000
Intangibles amortization 667,000 1,049,000 0
Other 608,000 568,000 618,000
Changes in:      
Accounts receivable (8,533,000) (6,546,000) 16,936,000
Inventories (9,150,000) 11,091,000 (10,284,000)
Other current assets (10,728,000) 10,360,000 (6,729,000)
Accounts payable and accrued liabilities 2,948,000 (9,999,000) (711,000)
Federal and state income taxes (1,863,000) 128,000 (4,292,000)
Net cash provided by operating activities 24,219,000 62,342,000 58,686,000
Cash flows from investing activities:      
Marketable securities purchased (6,151,000) (26,023,000) (40,962,000)
Marketable securities - maturities and sales 25,263,000 29,767,000 82,521,000
Acquisition of property, plant and equipment (36,256,000) (13,584,000) (15,003,000)
Acquisition of customer contract (21,968,000)    
Notes issued   (3,500,000) (220,000)
Sale of property, plant and equipment 409,000 8,000 6,000
Acquisition of businesses, net of cash acquired   (246,000) (4,526,000)
Net cash provided by (used in) investing activities (38,703,000) (13,578,000) 21,816,000
Cash flows from financing activities:      
Dividends paid   (86,106,000) (56,665,000)
Other   784,000 439,000
Net cash used in financing activities   (85,322,000) (56,226,000)
Net increase (decrease) in cash and cash equivalents (14,484,000) (36,558,000) 24,276,000
Cash and cash equivalents at beginning of period 37,437,000 73,995,000 49,719,000
Cash and cash equivalents at end of period 22,953,000 37,437,000 73,995,000
Supplemental disclosures of cash flow information:      
Income taxes $ 19,076,000 $ 26,532,000 $ 26,686,000

Consolidated Statements Of Stockholders' Equity
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Consolidated Statements Of Stockholders' Equity (USD $)
In Thousands, except Share data
Common Stock [Member]
Paid-in Capital [Member]
Retained Earnings [Member]
Quarter 1 Dividend Payment [Member]
Retained Earnings [Member]
Quarter 4 Dividend Payment [Member]
Retained Earnings [Member]
Accumulated Comprehensive Income (Loss) [Member]
Treasury Stock [Member]
Quarter 1 Dividend Payment [Member]
Quarter 4 Dividend Payment [Member]
Total
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2010 $ 7,441 $ 2,738     $ 351,571 $ 129 $ (17,942)     $ 343,937
Balance, shares at Dec. 31, 2010 6,865                  
Net earnings         47,968         47,968
Unrealized gain (loss) on available-for-sale securities           (57)       (57)
Dividends paid         (56,665)         (56,665)
Other   801     (1)   307     1,107
Other, shares 10                  
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2011 7,441 3,539     342,873 72 (17,635)     336,290
Balance, shares at Dec. 31, 2011 6,875                  
Net earnings         38,875         38,875
Unrealized gain (loss) on available-for-sale securities           (19)       (19)
Dividends paid     (41,292) (44,814)       (41,292) (44,814)  
Other   933     1   597     1,531
Other, shares 19                  
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2012 7,441 4,472     295,643 53 (17,038)     290,571
Balance, shares at Dec. 31, 2012 6,894                  
Net earnings         41,252         41,252
Unrealized gain (loss) on available-for-sale securities           (45)       (45)
Other   526         247     773
Other, shares 8                  
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2013 $ 7,441 $ 4,998     $ 336,895 $ 8 $ (16,791)     $ 332,551
Balance, shares at Dec. 31, 2013 6,902                  

Consolidated Statements Of Stockholders' Equity (Parenthetical)
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Consolidated Statements Of Stockholders' Equity (Parenthetical) (USD $)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Quarter 1 Dividend Payment [Member]
   
Regular dividends per share paid $ 1.00 $ 1.00
Extra dividends per share paid $ 5.00 $ 7.25
Quarter 4 Dividend Payment [Member]
   
Regular dividends per share paid $ 1.00  
Extra dividends per share paid $ 5.50  

Summary Of Significant Accounting Policies
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Summary Of Significant Accounting Policies
12 Months Ended
Dec. 31, 2013
Summary Of Significant Accounting Policies [Abstract]  
Summary Of Significant Accounting Policies

A.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 

(1)  USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:  In preparation of the Company's Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and related revenues and expenses.   Actual results could differ from the estimates used by management.

 

(2)  BASIS OF PRESENTATION:  The Consolidated Financial Statements include the accounts of National Presto Industries, Inc. and its subsidiaries, all of which are wholly-owned.  All material intercompany accounts and transactions are eliminated.  For a further discussion of the Company's business and the segments in which it operates, please refer to Note L.

 

(3)  RECLASSIFICATIONS:  Certain reclassifications have been made to the prior periods' financial statements to conform to the current period’s financial statement presentation.  These reclassifications did not affect net earnings or stockholders’ equity as previously reported.

 

(4)  FAIR VALUE OF FINANCIAL INSTRUMENTS:  The Company utilizes the methods of determining fair value as described in Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures to value its financial assets and liabilities. ASC 820 utilizes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying amount for cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximates fair value due to the immediate or short-term maturity of these financial instruments. 

 

(5)  CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES: 

 

Cash and Cash Equivalents:  The Company considers all highly liquid marketable securities with an original maturity of three months or less to be cash equivalents.  Cash equivalents include money market funds.  The Company deposits its cash in high quality financial institutions. The balances, at times, may exceed federally insured limits.  Money market funds are reported at fair value determined using quoted prices in active markets for identical securities (Level 1, as defined by FASB ASC 820).

 

The Company's cash management policy provides for its bank disbursement accounts to be reimbursed on a daily basis.  Checks issued but not presented to the bank for payment of $3,389,000 and $4,091,000 at December 31, 2013 and 2012, respectively, are included as reductions of cash and cash equivalents or bank overdrafts in accounts payable, as appropriate.

 

Marketable Securities:  The Company has classified all marketable securities as available-for-sale which requires the securities to be reported at fair value, with unrealized gains and losses, net of tax, reported as a separate component of stockholders' equity.  Highly liquid, tax exempt variable rate demand notes with put options exercisable in three months or less are classified as marketable securities.

 

 

At December 31, 2013 and 2012, cost for marketable securities was determined using the specific identification method.  A summary of the amortized costs and fair values of the Company's marketable securities at December 31 is shown in the following table.  All of the Company’s marketable securities are classified as Level 2, as defined by FASB ASC 820, with fair values determined using significant other observable inputs, which include quoted prices in markets that are not active, quoted prices of similar securities, recently executed transactions, broker quotations, and other inputs that are observable.  There were no transfers into or out of Level 2 during 2013.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

MARKETABLE SECURITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Fair Value

 

Gross Unrealized Gains

 

Gross Unrealized Losses

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

20,813 

 

$

20,825 

 

$

18 

 

$

Variable Rate Demand Notes

 

15,579 

 

 

15,579 

 

 

 -

 

 

 -

Total Marketable Securities

$

36,392 

 

$

36,404 

 

$

18 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

24,412 

 

$

24,494 

 

$

94 

 

$

12 

Variable Rate Demand Notes

 

31,092 

 

 

31,092 

 

 

 -

 

 

 -

Total Marketable Securities

$

55,504 

 

$

55,586 

 

$

94 

 

$

12 

 

Proceeds from sales of marketable securities totaled $25,263,000 in 2013, $29,767,000 in 2012, and $82,521,000 in 2011.  There were no gross gains or losses related to sales of marketable securities during the years ended December 31, 2013, 2012 and 2011.  Net unrealized losses included in other comprehensive income were $70,000, $30,000 and $87,000 before taxes for the years ended December 31, 2013, 2012, and 2011, respectively. No unrealized gains or losses were reclassified out of accumulated other comprehensive income during the same periods.

 

The contractual maturities of the marketable securities held at December 31, 2013 are as follows: $15,949,000 within one year; $7,465,000 beyond one year to five years; $5,123,000 beyond five years to ten years, and $7,867,000 beyond ten years. All of the instruments in the beyond five year ranges are variable rate demand notes which as noted above can be tendered for cash at par plus interest within seven days.  Despite the stated contractual maturity date, to the extent a tender is not honored, the notes become immediately due and payable. 

 

(6)  ACCOUNTS RECEIVABLE:  The Company's accounts receivable are related to sales of products.  Credit is extended based on prior experience with the customer and evaluation of customers' financial condition.  Accounts receivable are primarily due within 30 to 60 days.  The Company does not accrue interest on past due accounts receivable.  Receivables are written off only after all collection attempts have failed and are based on individual credit evaluation and the specific circumstances of the customer.  The allowance for doubtful accounts represents an estimate of amounts considered uncollectible and is determined based on the Company's historical collection experience, adverse situations that may affect the customer's ability to pay, and prevailing economic conditions.

 

(7)  INVENTORIES:  Housewares/Small Appliance segment inventories are stated at the lower of cost or market with cost being determined principally on the last-in, first-out (LIFO) method.  Inventories for the Defense and Absorbent Products segments are stated at the lower of cost or market with cost being determined on the first-in, first-out (FIFO) method.

 

(8)  PROPERTY, PLANT AND EQUIPMENT:  Property, plant and equipment are stated at cost.  For machinery and equipment, all amounts which are fully depreciated have been eliminated from both the asset and allowance accounts.  Straight-line depreciation is provided in amounts sufficient to charge the costs of depreciable assets to operations over their service lives which are estimated at 15 to 40 years for buildings, 3 to 10 years for machinery and equipment, and 15 to 20 years for land improvements.  The Company reviews long lived assets consisting principally of property, plant, and equipment, for impairment when material events and changes in circumstances indicate the carrying value may not be recoverable.  See Note S for a discussion of impairment charges recorded in the fourth quarter of 2012.  Approximately $15,200,000 of construction in progress in the Company’s Absorbent Products segment is presented on the Consolidated Balance Sheet as Machinery and Equipment at December 31, 2013.  The remaining costs to complete the construction and installation of the equipment is approximately $11,200,000, which the Company expects to be largely completed by early 2015.

 

(9)  GOODWILL AND  INTANGIBLE ASSETS:  The Company recognizes the excess cost of acquired entities over the net amount assigned to the fair value of assets acquired and liabilities assumed as goodwill. Goodwill is tested for impairment on an annual basis at the start of the fourth quarter and between annual tests whenever an impairment is indicated, such as the occurrence of an event that would more likely than not reduce the fair value of the reporting unit below its carrying amount.  Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value.  Goodwill impairments of $2,840,000,  $0, and $0 were recognized during 2013, 2012, and 2011, respectively.  The 2013 impairment related to AMTEC Less Lethal Systems, Inc. (“ALS”), a reporting unit in the Company’s Defense segment.  ALS was created in 2011 following the acquisition of certain assets of ALS Technologies, Inc., described in Note P.  The impairment was recognized as a result of the Company’s analysis comparing the implied fair value of the reporting unit’s goodwill to its recorded carrying amount.  The fair value used in the evaluation of the goodwill impairment was determined using a multiple of EBITDA approach and discounted cash flow estimates.  See Note R for a discussion of a contingent consideration liability reversal of $3,000,000 related to ALS.

 

During 2013 and 2012, $0 and $302,000, respectively, were added to goodwill as a result of the acquisition of certain assets of ALS Technologies, Inc., which is more fully described in Note P.  The Company's goodwill as of December 31, 2013 and 2012 was $11,485,000 and $14,325,000, respectively, relating entirely to its Defense Products segment, which had cumulative impairment charges at December 31, 2013 of $2,840,000.    

Intangible assets primarily consist of the value of a government sales contract, product backlogs, and consulting and non-compete agreements recognized as a result of the acquisition of certain assets of DSE, Inc., more fully described in Note Q, and the value of customer relationships, trademarks and non-compete agreements recognized as a result of the acquisition of certain assets of ALS Technologies, Inc. mentioned above.  The government sales contract intangible asset is amortized based on units fulfilled under the three year contract, while the other intangible assets are amortized on a straight-line basis that approximates economic use, over periods ranging from one to nine years.  Intangible assets are evaluated for impairment whenever an impairment is indicated. No impairments were noted during 2013.  The gross carrying amounts of the government sales contract and other intangible assets subject to amortization were $21,690,000 and $4,723,000, respectively, totaling $26,413,000 at December 31, 2013.  The gross carrying amount of other intangible assets subject to amortization was $4,445,000 at December 31, 2012.  Accumulated amortization was $1,716,000 and $1,049,000 at December 31, 2013 and 2012, respectively.  Amortization expense was $667,000, $1,049,000, and $0 during the years ended December 31, 2013, 2012, and 2011, respectively.  Estimated amortization expense for the five succeeding years is shown in the following table:

 

 

 

 

 

 

 

 

 

 

Years ending December 31:

 

(In thousands)

2014

 

$

7,989 

2015

 

 

7,989 

2016

 

 

7,986 

2017

 

 

550 

2018

 

 

65 

   

 

(10) REVENUE RECOGNITION: For all of its segments, the Company recognizes revenue when product is shipped or title passes pursuant to customers' orders, the price is fixed and collection is reasonably assured.  For the Housewares/Small appliance segment, the Company provides for its 60-day over-the-counter return privilege and warranties at the time of shipment. Net sales for this segment are calculated by deducting early payment discounts and cooperative advertising allowances from gross sales.  The Company records cooperative advertising allowances when revenue is recognized.  See Note A(11) for a description of the Company’s policy for sales returns.

 

(11) SALES & RETURNS: Sales are recorded net of estimated discounts and returns.  The latter pertain primarily to warranty returns, returns of seasonal items, and returns of those newly introduced products sold with a return privilege.  The calculation of warranty returns is based in large part on historical data, while seasonal and new product returns are primarily developed using customer provided information. 

 

(12) SHIPPING AND HANDLING COSTS:  In accordance with FASB ASC 605-45, Revenue Recognition, the Company includes shipping and handling revenues in net sales and shipping costs in cost of sales.

 

(13) ADVERTISING:  The Company's policy is to expense advertising as incurred and include it in selling and general expenses.  Advertising expense was $363,000, $210,000, and $70,000 in 2013, 2012, and 2011, respectively.

 

(14) PRODUCT WARRANTY:  The Company’s Housewares/Small Appliance segment’s products are generally warranted to the original owner to be free from defects in material and workmanship for a period of 1 to 12 years from date of purchase.  The Company allows a 60-day over-the-counter initial return privilege through cooperating dealers.  The Company services its products through a corporate service repair operation.  The Company estimates its product warranty liability based on historical percentages which have remained relatively consistent over the years.

 

The product warranty liability is included in accounts payable on the balance sheet.  The following table shows the changes in product warranty liability for the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Year Ended December 31

 

2013

 

2012

Beginning balance January 1

$

388

 

$

341

Accruals during the period

 

840

 

 

528

Charges / payments made under the warranties

 

(660)

 

 

(481)

Balance December 31

$

568

 

$

388

 

(15) STOCK-BASED COMPENSATION:  The Company accounts for stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation.  Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, net of estimated forfeitures. As more fully described in Note F, the Company awards non-vested restricted stock to employees and executive officers.

 

(16) INCOME TAXES:  Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws.  The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year.  The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported.  Income tax contingencies are accounted for in accordance with FASB ASC 740, Income Taxes.  See Note H for summaries of the provision, the effective tax rates, and the tax effects of the cumulative temporary differences resulting in deferred tax assets and liabilities.


Summary Of Significant Accounting Policies (Policy)
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Summary Of Significant Accounting Policies (Policy)
12 Months Ended
Dec. 31, 2013
Summary Of Significant Accounting Policies [Abstract]  
Use Of Estimates In The Preparation Of Financial Statements

(1)  USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS:  In preparation of the Company's Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and related revenues and expenses.   Actual results could differ from the estimates used by management.

Basis Of Presentation

(2)  BASIS OF PRESENTATION:  The Consolidated Financial Statements include the accounts of National Presto Industries, Inc. and its subsidiaries, all of which are wholly-owned.  All material intercompany accounts and transactions are eliminated.  For a further discussion of the Company's business and the segments in which it operates, please refer to Note L.

Reclassifications

(3)  RECLASSIFICATIONS:  Certain reclassifications have been made to the prior periods' financial statements to conform to the current period’s financial statement presentation.  These reclassifications did not affect net earnings or stockholders’ equity as previously reported.

Fair Value Of Financial Instruments

(4)  FAIR VALUE OF FINANCIAL INSTRUMENTS:  The Company utilizes the methods of determining fair value as described in Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures to value its financial assets and liabilities. ASC 820 utilizes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying amount for cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximates fair value due to the immediate or short-term maturity of these financial instruments. 

Cash Cash Equivalents And Marketable Securities

(5)  CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES: 

 

Cash and Cash Equivalents:  The Company considers all highly liquid marketable securities with an original maturity of three months or less to be cash equivalents.  Cash equivalents include money market funds.  The Company deposits its cash in high quality financial institutions. The balances, at times, may exceed federally insured limits.  Money market funds are reported at fair value determined using quoted prices in active markets for identical securities (Level 1, as defined by FASB ASC 820).

 

The Company's cash management policy provides for its bank disbursement accounts to be reimbursed on a daily basis.  Checks issued but not presented to the bank for payment of $3,389,000 and $4,091,000 at December 31, 2013 and 2012, respectively, are included as reductions of cash and cash equivalents or bank overdrafts in accounts payable, as appropriate.

 

Marketable Securities:  The Company has classified all marketable securities as available-for-sale which requires the securities to be reported at fair value, with unrealized gains and losses, net of tax, reported as a separate component of stockholders' equity.  Highly liquid, tax exempt variable rate demand notes with put options exercisable in three months or less are classified as marketable securities.

 

 

At December 31, 2013 and 2012, cost for marketable securities was determined using the specific identification method.  A summary of the amortized costs and fair values of the Company's marketable securities at December 31 is shown in the following table.  All of the Company’s marketable securities are classified as Level 2, as defined by FASB ASC 820, with fair values determined using significant other observable inputs, which include quoted prices in markets that are not active, quoted prices of similar securities, recently executed transactions, broker quotations, and other inputs that are observable.  There were no transfers into or out of Level 2 during 2013.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

MARKETABLE SECURITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Fair Value

 

Gross Unrealized Gains

 

Gross Unrealized Losses

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

20,813 

 

$

20,825 

 

$

18 

 

$

Variable Rate Demand Notes

 

15,579 

 

 

15,579 

 

 

 -

 

 

 -

Total Marketable Securities

$

36,392 

 

$

36,404 

 

$

18 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

24,412 

 

$

24,494 

 

$

94 

 

$

12 

Variable Rate Demand Notes

 

31,092 

 

 

31,092 

 

 

 -

 

 

 -

Total Marketable Securities

$

55,504 

 

$

55,586 

 

$

94 

 

$

12 

 

Proceeds from sales of marketable securities totaled $25,263,000 in 2013, $29,767,000 in 2012, and $82,521,000 in 2011.  There were no gross gains or losses related to sales of marketable securities during the years ended December 31, 2013, 2012 and 2011.  Net unrealized losses included in other comprehensive income were $70,000, $30,000 and $87,000 before taxes for the years ended December 31, 2013, 2012, and 2011, respectively. No unrealized gains or losses were reclassified out of accumulated other comprehensive income during the same periods.

 

The contractual maturities of the marketable securities held at December 31, 2013 are as follows: $15,949,000 within one year; $7,465,000 beyond one year to five years; $5,123,000 beyond five years to ten years, and $7,867,000 beyond ten years. All of the instruments in the beyond five year ranges are variable rate demand notes which as noted above can be tendered for cash at par plus interest within seven days.  Despite the stated contractual maturity date, to the extent a tender is not honored, the notes become immediately due and payable. 

Accounts Receivable

(6)  ACCOUNTS RECEIVABLE:  The Company's accounts receivable are related to sales of products.  Credit is extended based on prior experience with the customer and evaluation of customers' financial condition.  Accounts receivable are primarily due within 30 to 60 days.  The Company does not accrue interest on past due accounts receivable.  Receivables are written off only after all collection attempts have failed and are based on individual credit evaluation and the specific circumstances of the customer.  The allowance for doubtful accounts represents an estimate of amounts considered uncollectible and is determined based on the Company's historical collection experience, adverse situations that may affect the customer's ability to pay, and prevailing economic conditions.

Inventories

(7)  INVENTORIES:  Housewares/Small Appliance segment inventories are stated at the lower of cost or market with cost being determined principally on the last-in, first-out (LIFO) method.  Inventories for the Defense and Absorbent Products segments are stated at the lower of cost or market with cost being determined on the first-in, first-out (FIFO) method.

Property, Plant And Equipment

(8)  PROPERTY, PLANT AND EQUIPMENT:  Property, plant and equipment are stated at cost.  For machinery and equipment, all amounts which are fully depreciated have been eliminated from both the asset and allowance accounts.  Straight-line depreciation is provided in amounts sufficient to charge the costs of depreciable assets to operations over their service lives which are estimated at 15 to 40 years for buildings, 3 to 10 years for machinery and equipment, and 15 to 20 years for land improvements.  The Company reviews long lived assets consisting principally of property, plant, and equipment, for impairment when material events and changes in circumstances indicate the carrying value may not be recoverable.  See Note S for a discussion of impairment charges recorded in the fourth quarter of 2012.  Approximately $15,200,000 of construction in progress in the Company’s Absorbent Products segment is presented on the Consolidated Balance Sheet as Machinery and Equipment at December 31, 2013.  The remaining costs to complete the construction and installation of the equipment is approximately $11,200,000, which the Company expects to be largely completed by early 2015.

Goodwill And Other Intangible Assets

(9)  GOODWILL AND  INTANGIBLE ASSETS:  The Company recognizes the excess cost of acquired entities over the net amount assigned to the fair value of assets acquired and liabilities assumed as goodwill. Goodwill is tested for impairment on an annual basis at the start of the fourth quarter and between annual tests whenever an impairment is indicated, such as the occurrence of an event that would more likely than not reduce the fair value of the reporting unit below its carrying amount.  Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value.  Goodwill impairments of $2,840,000,  $0, and $0 were recognized during 2013, 2012, and 2011, respectively.  The 2013 impairment related to AMTEC Less Lethal Systems, Inc. (“ALS”), a reporting unit in the Company’s Defense segment.  ALS was created in 2011 following the acquisition of certain assets of ALS Technologies, Inc., described in Note P.  The impairment was recognized as a result of the Company’s analysis comparing the implied fair value of the reporting unit’s goodwill to its recorded carrying amount.  The fair value used in the evaluation of the goodwill impairment was determined using a multiple of EBITDA approach and discounted cash flow estimates.  See Note R for a discussion of a contingent consideration liability reversal of $3,000,000 related to ALS.

 

During 2013 and 2012, $0 and $302,000, respectively, were added to goodwill as a result of the acquisition of certain assets of ALS Technologies, Inc., which is more fully described in Note P.  The Company's goodwill as of December 31, 2013 and 2012 was $11,485,000 and $14,325,000, respectively, relating entirely to its Defense Products segment, which had cumulative impairment charges at December 31, 2013 of $2,840,000.    

Intangible assets primarily consist of the value of a government sales contract, product backlogs, and consulting and non-compete agreements recognized as a result of the acquisition of certain assets of DSE, Inc., more fully described in Note Q, and the value of customer relationships, trademarks and non-compete agreements recognized as a result of the acquisition of certain assets of ALS Technologies, Inc. mentioned above.  The government sales contract intangible asset is amortized based on units fulfilled under the three year contract, while the other intangible assets are amortized on a straight-line basis that approximates economic use, over periods ranging from one to nine years.  Intangible assets are evaluated for impairment whenever an impairment is indicated. No impairments were noted during 2013.  The gross carrying amounts of the government sales contract and other intangible assets subject to amortization were $21,690,000 and $4,723,000, respectively, totaling $26,413,000 at December 31, 2013.  The gross carrying amount of other intangible assets subject to amortization was $4,445,000 at December 31, 2012.  Accumulated amortization was $1,716,000 and $1,049,000 at December 31, 2013 and 2012, respectively.  Amortization expense was $667,000, $1,049,000, and $0 during the years ended December 31, 2013, 2012, and 2011, respectively.  Estimated amortization expense for the five succeeding years is shown in the following table:

 

 

 

 

 

 

 

 

 

 

Years ending December 31:

 

(In thousands)

2014

 

$

7,989 

2015

 

 

7,989 

2016

 

 

7,986 

2017

 

 

550 

2018

 

 

65 

   

Revenue Recognition

(10) REVENUE RECOGNITION: For all of its segments, the Company recognizes revenue when product is shipped or title passes pursuant to customers' orders, the price is fixed and collection is reasonably assured.  For the Housewares/Small appliance segment, the Company provides for its 60-day over-the-counter return privilege and warranties at the time of shipment. Net sales for this segment are calculated by deducting early payment discounts and cooperative advertising allowances from gross sales.  The Company records cooperative advertising allowances when revenue is recognized.  See Note A(11) for a description of the Company’s policy for sales returns.

Sales & Returns

(11) SALES & RETURNS: Sales are recorded net of estimated discounts and returns.  The latter pertain primarily to warranty returns, returns of seasonal items, and returns of those newly introduced products sold with a return privilege.  The calculation of warranty returns is based in large part on historical data, while seasonal and new product returns are primarily developed using customer provided information.

Shipping And Handling Costs

(12) SHIPPING AND HANDLING COSTS:  In accordance with FASB ASC 605-45, Revenue Recognition, the Company includes shipping and handling revenues in net sales and shipping costs in cost of sales.

Advertising

(13) ADVERTISING:  The Company's policy is to expense advertising as incurred and include it in selling and general expenses.  Advertising expense was $363,000, $210,000, and $70,000 in 2013, 2012, and 2011, respectively.

Product Warranty

(14) PRODUCT WARRANTY:  The Company’s Housewares/Small Appliance segment’s products are generally warranted to the original owner to be free from defects in material and workmanship for a period of 1 to 12 years from date of purchase.  The Company allows a 60-day over-the-counter initial return privilege through cooperating dealers.  The Company services its products through a corporate service repair operation.  The Company estimates its product warranty liability based on historical percentages which have remained relatively consistent over the years.

 

The product warranty liability is included in accounts payable on the balance sheet.  The following table shows the changes in product warranty liability for the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Year Ended December 31

 

2013

 

2012

Beginning balance January 1

$

388

 

$

341

Accruals during the period

 

840

 

 

528

Charges / payments made under the warranties

 

(660)

 

 

(481)

Balance December 31

$

568

 

$

388

 

Stock-Based Compensation

(15) STOCK-BASED COMPENSATION:  The Company accounts for stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation.  Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, net of estimated forfeitures. As more fully described in Note F, the Company awards non-vested restricted stock to employees and executive officers.

Income Taxes

(16) INCOME TAXES:  Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws.  The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year.  The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported.  Income tax contingencies are accounted for in accordance with FASB ASC 740, Income Taxes.  See Note H for summaries of the provision, the effective tax rates, and the tax effects of the cumulative temporary differences resulting in deferred tax assets and liabilities.


Summary Of Significant Accounting Policies (Tables)
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Summary Of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2013
Summary Of Significant Accounting Policies [Abstract]  
Summary Of The Amortized Costs And Fair Values Of Marketable Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

MARKETABLE SECURITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Fair Value

 

Gross Unrealized Gains

 

Gross Unrealized Losses

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

20,813 

 

$

20,825 

 

$

18 

 

$

Variable Rate Demand Notes

 

15,579 

 

 

15,579 

 

 

 -

 

 

 -

Total Marketable Securities

$

36,392 

 

$

36,404 

 

$

18 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

24,412 

 

$

24,494 

 

$

94 

 

$

12 

Variable Rate Demand Notes

 

31,092 

 

 

31,092 

 

 

 -

 

 

 -

Total Marketable Securities

$

55,504 

 

$

55,586 

 

$

94 

 

$

12 

 

Schedule Of Estimated Future Amortization Expense

 

 

 

 

 

 

 

 

Years ending December 31:

 

(In thousands)

2014

 

$

7,989 

2015

 

 

7,989 

2016

 

 

7,986 

2017

 

 

550 

2018

 

 

65 

 

Schedule Of Changes In Product Warranty

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Year Ended December 31

 

2013

 

2012

Beginning balance January 1

$

388

 

$

341

Accruals during the period

 

840

 

 

528

Charges / payments made under the warranties

 

(660)

 

 

(481)

Balance December 31

$

568

 

$

388

 


Summary Of Significant Accounting Policies (Narrative) (Details)
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Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Significant Accounting Policies [Line Items]      
Checks outstanding $ 3,389,000 $ 4,091,000  
Marketable securities - maturities and sales 25,263,000 29,767,000 82,521,000
Proceeds from sale and maturity of available for sale securities 25,263,000 29,767,000 82,521,000
Net unrealized losses included OCI 70,000 30,000 87,000
Contractual maturities of marketable securities, within one year 15,949,000    
Contractual maturities of marketable securities, beyond one year to five years 7,465,000    
Contractual maturities of marketable securities, beyond five years to ten years 5,123,000    
Contractual maturities of marketable securities, beyond ten years 7,867,000    
Goodwill 11,485,000 14,325,000  
Goodwill impairment charges 2,840,000 0 0
Change in contingent consideration liability 3,000,000    
Goodwill from acquisition 0 302,000  
Goodwill, Cumulative Impairment Charges 2,840,000    
Impairment of intangible assets 0    
Gross carrying amount of intangibles 26,413,000 4,445,000  
Accumulated amortization of intangibles 1,716,000 1,049,000  
Amortization expense 667,000 1,049,000 0
Advertising expense 363,000 210,000 70,000
Defense Products [Member]
     
Significant Accounting Policies [Line Items]      
Goodwill 11,485,000 14,325,000  
Absorbent Products [Member]
     
Significant Accounting Policies [Line Items]      
Construction in progress 15,200,000    
Purchase commitments 11,200,000    
Housewares/ Small Appliances [Member]
     
Significant Accounting Policies [Line Items]      
Standard product warranty coverage period 60 days    
Sales returns coverage period 60 days    
Minimum [Member]
     
Significant Accounting Policies [Line Items]      
Accounts receivable, collection period 30 days    
Economic use period for intangibles 1 year    
Minimum [Member] | Housewares/ Small Appliances [Member]
     
Significant Accounting Policies [Line Items]      
Standard product warranty coverage period 1 year    
Minimum [Member] | Buildings [Member]
     
Significant Accounting Policies [Line Items]      
Useful life 15 years    
Minimum [Member] | Machinery and Equipment [Member]
     
Significant Accounting Policies [Line Items]      
Useful life 3 years    
Minimum [Member] | Land Improvements [Member]
     
Significant Accounting Policies [Line Items]      
Useful life 15 years    
Maximum [Member]
     
Significant Accounting Policies [Line Items]      
Accounts receivable, collection period 60 days    
Economic use period for intangibles 9 years    
Maximum [Member] | Housewares/ Small Appliances [Member]
     
Significant Accounting Policies [Line Items]      
Standard product warranty coverage period 12 years    
Maximum [Member] | Buildings [Member]
     
Significant Accounting Policies [Line Items]      
Useful life 40 years    
Maximum [Member] | Machinery and Equipment [Member]
     
Significant Accounting Policies [Line Items]      
Useful life 10 years    
Maximum [Member] | Land Improvements [Member]
     
Significant Accounting Policies [Line Items]      
Useful life 20 years    
Maximum [Member] | Variable Rate Demand Notes [Member]
     
Significant Accounting Policies [Line Items]      
Number of days to tender securites 7 days    
Government Sales Contract Intangible Assets [Member]
     
Significant Accounting Policies [Line Items]      
Gross carrying amount of intangibles 21,690,000    
Other Intangible Assets [Member]
     
Significant Accounting Policies [Line Items]      
Gross carrying amount of intangibles $ 4,723,000    

Summary Of Significant Accounting Policies (Summary Of The Amortized Costs And Fair Values Of Marketable Securities) (Details)
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Summary Of Significant Accounting Policies (Summary Of The Amortized Costs And Fair Values Of Marketable Securities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost $ 36,392 $ 55,504
MARKETABLE SECURITIES, Fair Value 36,404 55,586
MARKETABLE SECURITIES, Gross Unrealized Gains 18 94
MARKETABLE SECURITIES - Gross Unrealized Losses 6 12
Tax-Exempt Municipal Bonds [Member]
   
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost 20,813 24,412
MARKETABLE SECURITIES, Fair Value 20,825 24,494
MARKETABLE SECURITIES, Gross Unrealized Gains 18 94
MARKETABLE SECURITIES - Gross Unrealized Losses 6 12
Variable Rate Demand Notes [Member]
   
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost 15,579 31,092
MARKETABLE SECURITIES, Fair Value $ 15,579 $ 31,092

Summary Of Significant Accounting Policies (Schedule Of Estimated Future Amortization Expense) (Details)
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Summary Of Significant Accounting Policies (Schedule Of Estimated Future Amortization Expense) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2013
Summary Of Significant Accounting Policies [Abstract]  
2014 $ 7,989
2015 7,989
2016 7,986
2017 550
2018 $ 65

Summary Of Significant Accounting Policies (Schedule Of Changes In Product Liability) (Details)
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Summary Of Significant Accounting Policies (Schedule Of Changes In Product Liability) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Summary Of Significant Accounting Policies [Abstract]    
Beginning balance January 1 $ 388 $ 341
Accruals during the period 840 528
Changes/payments made under the warranties (660) (481)
Balance December 31 $ 568 $ 388

Inventories
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Inventories
12 Months Ended
Dec. 31, 2013
Inventories [Abstract]  
Inventories

B.   INVENTORIES:

The amount of inventories valued on the LIFO basis was $32,090,000 and $29,463,000 as of December 31, 2013 and 2012, respectively, and consists of housewares/small appliance finished goods.  Under LIFO, inventories are valued at approximately $4,434,000 and $6,375,000 below current cost determined on a first-in, first-out (FIFO) basis at December 31, 2013 and 2012, respectively.  During the years ended December 31, 2013, 2012, and 2011, $421,000, $858,000, and $5,474,000, respectively, of a LIFO layer was liquidated.  The Company uses the LIFO method of inventory accounting to improve the matching of costs and revenues for the Housewares/Small Appliance segment. 

 

 

The following table describes that which would have occurred if LIFO inventories had been valued at current cost determined on a FIFO basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) – (In thousands, except per share data)

Year

 

Cost of Sales

 

Net Earnings

 

Earnings Per Share

2013

 

$

1,941 

 

$

(1,263)

 

$

(0.18)

2012

 

$

(857)

 

$

546 

 

$

0.08 

2011

 

$

(1,313)

 

$

832 

 

$

0.12 

 

This information is provided for comparison with companies using the FIFO basis.

 

Inventory for Defense, Absorbent Products, and raw materials of the Housewares/Small Appliance segments are valued under the FIFO method and total $60,424,000 and $53,901,000 at December 31, 2013 and 2012, respectively.  The December 31, 2013 FIFO total is comprised of $3,988,000 of finished goods, $49,690,000 of work in process, and $6,746,000 of raw material and supplies.  At December 31, 2012 the FIFO total was comprised of $4,388,000 of finished goods, $40,340,000 of work in process, and $9,173,000 of raw material and supplies.


Inventories (Tables)
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Inventories (Tables)
12 Months Ended
Dec. 31, 2013
Inventories [Abstract]  
Schedule Of Potential Impact Of LIFO Valuation to FIFO Valuation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) – (In thousands, except per share data)

Year

 

Cost of Sales

 

Net Earnings

 

Earnings Per Share

2013

 

$

1,941 

 

$

(1,263)

 

$

(0.18)

2012

 

$

(857)

 

$

546 

 

$

0.08 

2011

 

$

(1,313)

 

$

832 

 

$

0.12 

 


Inventories (Narrative) (Details)
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Inventories (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Inventory [Line Items]      
Liquidation of LIFO layer $ 421,000 $ 858,000 $ 5,474,000
FIFO inventory amount 60,424,000 53,901,000  
Finished goods 3,988,000 4,388,000  
Work in process 49,690,000 40,340,000  
Raw materials 6,746,000 9,173,000  
Housewares/ Small Appliances [Member]
     
Inventory [Line Items]      
LIFO inventory amount 32,090,000 29,463,000  
Inventory valuation, difference below FIFO $ 4,434,000 $ 6,375,000  

Inventories (Schedule Of Potential Impact Of LIFO Valuation to FIFO Valuation) (Details)
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Inventories (Schedule Of Potential Impact Of LIFO Valuation to FIFO Valuation) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Inventories [Abstract]      
Cost of Sales $ 1,941 $ (857) $ (1,313)
Net Earnings $ (1,263) $ 546 $ 832
Earnings Per Share $ (0.18) $ 0.08 $ 0.12

Accrued Liabilities
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Accrued Liabilities
12 Months Ended
Dec. 31, 2013
Accrued Liabilities [Abstract]  
Accrued Liabilities

C.   ACCRUED LIABILITIES:

At December 31, 2013, accrued liabilities consisted of payroll $6,135,000, product liability $6,060,000, environmental $1,650,000, and other $2,062,000.  At December 31, 2012, accrued liabilities consisted of product liability $6,395,000, payroll $5,721,000, environmental $1,875,000, and other $1,263,000    

 

The Company is self-insured for health care costs, although it does carry stop loss and other insurance to cover health care claims once they reach a specified threshold. The Company is also subject to product liability claims in the normal course of business.  It is partly self-insured for product liability claims, and therefore records an accrual for known claims and estimated incurred but unreported claims in the Company’s Consolidated Financial Statements.  The Company utilizes historical trends and other analysis to assist in determining the appropriate accrual.  An increase in the number or magnitude of claims could have a material impact on the Company’s financial condition and results of operations. The Company's policy is to accrue for legal fees expected to be incurred in connection with loss contingencies. See Note K for a discussion of environmental remediation liabilities.