Document And Entity Information
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Document And Entity Information (USD $)
 12 Months Ended
Dec. 31, 2012
Mar. 01, 2013
Jul. 01, 2012
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2012    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2012    
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   6,894,158  
Entity Current Reporting Status Yes    
Entity Public Float     $ 335,654,958
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    

Condensed Consolidated Balance Sheets
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Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
CURRENT ASSETS:    
Cash and cash equivalents $ 37,437 $ 73,995
Marketable securities 55,586 59,360
Accounts receivable 82,554 74,995
Less allowance for doubtful accounts 6,111 1,361
Accounts receivable, net 76,443 73,634
Inventories:    
Finished goods 33,851 32,759
Work in process 40,340 50,462
Raw materials 9,173 11,285
Total inventory 83,364 94,506
Deferred tax assets 8,906 6,140
Other current assets 9,018 21,270
Total current assets 270,754 328,905
PROPERTY, PLANT AND EQUIPMENT:    
Land and land improvements 2,010 1,955
Buildings 30,708 29,348
Machinery and equipment 90,700 90,305
PROPERTY, PLANT AND EQUIPMENT 123,418 121,608
Less allowance for depreciation and amortization 61,553 57,340
PROPERTY, PLANT AND EQUIPMENT, NET 61,865 64,268
GOODWILL & OTHER INTANGIBLES 17,722 18,468
NOTE RECEIVABLE 3,571  
Total assets 353,912 411,641
CURRENT LIABILITIES:    
Accounts payable 39,077 48,344
Federal and state income taxes 1,642 1,567
Accrued liabilities 15,254 16,035
Total current liabilities 55,973 65,946
DEFERRED INCOME TAXES 7,368 9,405
COMMITMENTS AND CONTINGENCIES      
STOCKHOLDERS' EQUITY    
Common stock, $1 par value: Authorized: 12,000,000 shares at December 31, 2012 and 2011; Issued: 7,440,518 shares at December 31, 2012 and 2011; Outstanding: 6,894,158 and 6,875,001 shares at December 31, 2012 and 2011, respectively 7,441 7,441
Paid-in capital 4,472 3,539
Retained earnings 295,643 342,873
Accumulated other comprehensive income 53 72
Stockholders' Equity before Treasury Stock 307,609 353,925
Less treasury stock, at cost, 546,360 and 565,517 shares at December 31, 2012 and 2011, respectively 17,038 17,635
Total stockholders' equity 290,571 336,290
Total liabilities and stockholders' equity $ 353,912 $ 411,641

Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2012
Dec. 31, 2011
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 6,894,158 6,875,001
Treasury stock, at cost 546,360 565,517

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, 2012
Dec. 31, 2011
Dec. 31, 2010
Consolidated Statements Of Comprehensive Income [Abstract]      
Net sales $ 472,490 $ 431,021 $ 479,000
Cost of sales 377,627 337,262 365,426
Gross profit 94,863 93,759 113,574
Selling and general expenses 35,144 20,022 16,323
Operating profit 59,719 73,737 97,251
Other income, principally interest 705 1,288 2,104
Earnings before provision for income taxes 60,424 75,025 99,355
Provision for income taxes 21,549 27,057 35,824
Net earnings 38,875 47,968 63,531
Weighted average common shares outstanding:      
Basic 6,889 6,875 6,864
Diluted 6,891 6,876 6,864
Net earnings per share:      
Basic $ 5.64 $ 6.98 $ 9.26
Diluted $ 5.64 $ 6.98 $ 9.26
Other comprehensive income (loss), net of tax:      
Unrealized loss on available-for-sale securities, net of tax (19) (57) (514)
Comprehensive income $ 38,856 $ 47,911 $ 63,017

Consolidated Statements Of Cash Flows
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Consolidated Statements Of Cash Flows (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Cash flows from operating activities:      
Net earnings $ 38,875,000 $ 47,968,000 $ 63,531,000
Adjustments to reconcile net earnings to net cash provided by operating activities:      
Provision for depreciation 10,136,000 9,037,000 8,637,000
Loss (gain) on disposal and impairment of property, plant and equipment 5,843,000 10,000 (1,290,000)
Provision for doubtful accounts 5,629,000 1,037,000 50,000
Deferred income taxes (4,792,000) 5,096,000 (399,000)
Intangibles amortization 1,049,000 0 0
Other 568,000 618,000 500,000
Changes in operating accounts:      
Accounts receivable, net (6,546,000) 16,936,000 1,194,000
Inventories 11,091,000 (10,284,000) (14,557,000)
Other current assets 10,360,000 (6,729,000) (5,604,000)
Accounts payable and accrued liabilities (9,999,000) (711,000) 6,138,000
Federal and state income taxes payable 128,000 (4,292,000) (432,000)
Net cash provided by operating activities 62,342,000 58,686,000 57,768,000
Cash flows from investing activities:      
Marketable securities purchased (26,023,000) (40,962,000) (45,464,000)
Marketable securities - maturities and sales 29,767,000 82,521,000 62,109,000
Acquisition of property, plant and equipment (13,584,000) (15,003,000) (17,972,000)
Notes issued (3,500,000) (220,000) (1,580,000)
Sale of property, plant and equipment 8,000 6,000 1,365,000
Acquisition of businesses, net of cash acquired (246,000) (4,526,000)  
Net cash provided by (used in) investing activities (13,578,000) 21,816,000 (1,542,000)
Cash flows from financing activities:      
Dividends paid (86,106,000) (56,665,000) (55,889,000)
Other 784,000 439,000 408,000
Net cash used in financing activities (85,322,000) (56,226,000) (55,481,000)
Net increase (decrease) in cash and cash equivalents (36,558,000) 24,276,000 745,000
Cash and cash equivalents at beginning of period 73,995,000 49,719,000 48,974,000
Cash and cash equivalents at end of period 37,437,000 73,995,000 49,719,000
Supplemental disclosures of cash flow information:      
Income taxes $ 26,532,000 $ 26,686,000 $ 36,479,000

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
Balance at Dec. 31, 2009 $ 7,441 $ 2,037     $ 343,930 $ 643 $ (18,179)     $ 335,872
Balance, shares at Dec. 31, 2009 6,858                  
Net earnings         63,531         63,531
Unrealized loss on available-for-sale securities, net of tax           (514)       (514)
Dividends paid         (55,889)         (55,889)
Other   701     (1)   237     937
Other, shares 7                  
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 loss on available-for-sale securities, net of tax           (57)       (57)
Dividends paid         (56,665)         (56,665)
Other   801     (1)   307     1,107
Other, shares 10                  
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 loss on available-for-sale securities, net of tax           (19)       (19)
Dividends paid     (41,292) (44,814)       (41,292) (44,814)  
Other   933     1   597     1,531
Other, shares 19                  
Balance at Dec. 31, 2012 $ 7,441 $ 4,472     $ 295,643 $ 53 $ (17,038)     $ 290,571
Balance, shares at Dec. 31, 2012 6,894                  

Consolidated Statements Of Stockholders' Equity (Parenthetical)
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Consolidated Statements Of Stockholders' Equity (Parenthetical) (USD $)
 12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2012
Quarter 1 Dividend Payment [Member]
Dec. 31, 2012
Quarter 4 Dividend Payment [Member]
Regular dividends per share paid $ 1.00 $ 1.00 $ 1.00 $ 1.00
Extra dividends per share paid $ 7.25 $ 7.15 $ 5.00 $ 5.50

Summary Of Significant Accounting Policies
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Summary Of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2012
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 $4,091,000 and $5,313,000 at December 31, 2012 and 2011, 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, 2012 and 2011, 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 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

MARKETABLE SECURITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Fair Value

 

Gross Unrealized Gains

 

Gross Unrealized Losses

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 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$
26,214 

 

$
26,326 

 

$
128 

 

$
16 

Variable Rate Demand Notes

 
33,034 

 

 
33,034 

 

 

-

 

 

-

Total Marketable Securities

$
59,248 

 

$
59,360 

 

$
128 

 

$
16 

 

Proceeds from sales of marketable securities totaled $29,767,000 in 2012, $82,521,000 in 2011, and $62,109,000 in 2010.  There were no gross gains or losses related to sales of marketable securities during the years ended December 31, 2012, 2011 and 2010.  Net unrealized losses included in other comprehensive income were $30,000, $87,000 and $792,000 before taxes for the years ended December 31, 2012, 2011, and 2010, respectively. No unrealized gains were reclassified out of accumulated other comprehensive income during the same periods.

 

The contractual maturities of the marketable securities held at December 31, 2012 are as follows: $5,697,000 within one year; $25,566,000 beyond one year to five years; $8,520,000 beyond five years to ten years, and $15,803,000 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 Q for a discussion of impairment charges recorded in the fourth quarter of 2012.

 

(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.  No goodwill impairments were recognized during 2012, 2011, or 2010.  The Company's goodwill as of December 31, 2012 and 2011 was $14,325,000 and $14,023,000, respectively, relating entirely to its Defense Products segment, which had no cumulative impairment charges at December 31, 2012.  During 2012 and 2011, $302,000 and $2,538,000, respectively, was added to goodwill as a result of the acquisition of the assets of ALS Technologies, Inc., more fully described in Note P. 

Intangible assets primarily consist of the value of customer relationships, trademarks, product backlogs, and non-compete agreements recognized as a result of the acquisition of the assets of ALS Technologies, Inc. mentioned above.  Intangible assets are amortized on a straight-line basis that approximates economic use, over periods ranging from one to nine years.  The gross carrying amount of the intangible assets subject to amortization was $4,445,000 at both December 31, 2012 and 2011, and accumulated amortization was $1,049,000 and $0 at December 31, 2012 and 2011, respectively.  Amortization expense was $1,049,000, $0, and $0 during the years ended December 31, 2012, 2011, and 2010, respectively. The amortization expense for 2012 was recorded entirely in the fourth quarter, as the value of the intangible assets became known at that time.  Estimated amortization expense for the five succeeding years are shown in the following table:

 

 

 

 

 

 

 

 

 

 

Years ending December 31:

 

(In thousands)

2013

 

$
667 

2014

 

 
667 

2015

 

 
667 

2016

 

 
663 

2017

 

 
550 

 

The amounts shown above related to goodwill and intangible assets subject to amortization differ from amounts previously reported as a result of provisional accounting related to the 2011 ALS Technologies, Inc. acquisition that was completed during the fourth quarter of 2012. 

 

(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 $210,000, $70,000, and $9,000 in 2012, 2011, and 2010, 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

 

2012

 

2011

Beginning balance January 1

$

341

 

$

326

Accruals during the period

 

528

 

 

523

Charges / payments made under the warranties

 

(481)

 

 

(508)

Balance December 31

$

388

 

$

341

 

(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.

 

(17) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

 

In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities. ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities are required to disclose both gross and net information about these instruments.  In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210), Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.  ASU 2013-01 clarifies that ordinary trade receivables and receivables are not in the scope of ASU No. 2011-11.  Specifically, ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the FASB ASC or subject to a master netting arrangement or similar agreement.  ASU 2011-11 and 2013-01 are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company does not expect the adoption of either ASU will have a material impact on the Company's financial statements.

 

In June 2011, the FASB issued ASU No. 2011-05, Amendments to Topic 220, Comprehensive Income. Under the amendments in this ASU, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments in this ASU were to be applied retrospectively. For public entities, the amendments were effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption was permitted, because compliance with the amendments was already permitted. The amendments did not require any transition disclosures. In December 2011, the FASB deferred the requirement to present reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income with the issuance of ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. Companies are required to either present amounts reclassified out of other comprehensive income on the face of the financial statements or disclose those amounts in the notes to the financial statements. During the deferral period, there is no requirement to separately present or disclose the reclassification adjustments into net income. The effective date of the deferral is consistent with the effective date of the ASU No. 2011-05. Except for the deferral of the presentation of reclassifications of items out of accumulated other comprehensive income, the Company adopted ASU 2011-5 retrospectively in the first quarter of 2012.  In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which adds additional disclosure requirements for items reclassified out of accumulated other comprehensive income and will be effective for the first interim reporting period in 2013. The Company does not expect the adoption of the remaining deferred provisions of ASU 2011-05 to have a material impact on its Consolidated Financial Statements.


Summary Of Significant Accounting Policies (Policy)
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Summary Of Significant Accounting Policies (Policy)
 12 Months Ended
Dec. 31, 2012
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 $4,091,000 and $5,313,000 at December 31, 2012 and 2011, 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, 2012 and 2011, 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 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

MARKETABLE SECURITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

Fair Value

 

Gross Unrealized Gains

 

Gross Unrealized Losses

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 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$
26,214 

 

$
26,326 

 

$
128 

 

$
16 

Variable Rate Demand Notes

 
33,034 

 

 
33,034 

 

 

-

 

 

-

Total Marketable Securities

$
59,248 

 

$
59,360 

 

$
128 

 

$
16 

 

Proceeds from sales of marketable securities totaled $29,767,000 in 2012, $82,521,000 in 2011, and $62,109,000 in 2010.  There were no gross gains or losses related to sales of marketable securities during the years ended December 31, 2012, 2011 and 2010.  Net unrealized losses included in other comprehensive income were $30,000, $87,000 and $792,000 before taxes for the years ended December 31, 2012, 2011, and 2010, respectively. No unrealized gains were reclassified out of accumulated other comprehensive income during the same periods.

 

The contractual maturities of the marketable securities held at December 31, 2012 are as follows: $5,697,000 within one year; $25,566,000 beyond one year to five years; $8,520,000 beyond five years to ten years, and $15,803,000 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 Q for a discussion of impairment charges recorded in the fourth quarter of 2012.

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.  No goodwill impairments were recognized during 2012, 2011, or 2010.  The Company's goodwill as of December 31, 2012 and 2011 was $14,325,000 and $14,023,000, respectively, relating entirely to its Defense Products segment, which had no cumulative impairment charges at December 31, 2012.  During 2012 and 2011, $302,000 and $2,538,000, respectively, was added to goodwill as a result of the acquisition of the assets of ALS Technologies, Inc., more fully described in Note P. 

Intangible assets primarily consist of the value of customer relationships, trademarks, product backlogs, and non-compete agreements recognized as a result of the acquisition of the assets of ALS Technologies, Inc. mentioned above.  Intangible assets are amortized on a straight-line basis that approximates economic use, over periods ranging from one to nine years.  The gross carrying amount of the intangible assets subject to amortization was $4,445,000 at both December 31, 2012 and 2011, and accumulated amortization was $1,049,000 and $0 at December 31, 2012 and 2011, respectively.  Amortization expense was $1,049,000, $0, and $0 during the years ended December 31, 2012, 2011, and 2010, respectively. The amortization expense for 2012 was recorded entirely in the fourth quarter, as the value of the intangible assets became known at that time.  Estimated amortization expense for the five succeeding years are shown in the following table:

 

 

 

 

 

 

 

 

 

 

Years ending December 31:

 

(In thousands)

2013

 

$
667 

2014

 

 
667 

2015

 

 
667 

2016

 

 
663 

2017

 

 
550 

 

The amounts shown above related to goodwill and intangible assets subject to amortization differ from amounts previously reported as a result of provisional accounting related to the 2011 ALS Technologies, Inc. acquisition that was completed during the fourth quarter of 2012. 

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 $210,000, $70,000, and $9,000 in 2012, 2011, and 2010, 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

 

2012

 

2011

Beginning balance January 1

$

341

 

$

326

Accruals during the period

 

528

 

 

523

Charges / payments made under the warranties

 

(481)

 

 

(508)

Balance December 31

$

388

 

$

341

 

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, 2012
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, 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 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$
26,214 

 

$
26,326 

 

$
128 

 

$
16 

Variable Rate Demand Notes

 
33,034 

 

 
33,034 

 

 

-

 

 

-

Total Marketable Securities

$
59,248 

 

$
59,360 

 

$
128 

 

$
16 

 

Schedule Of Estimated Future Amortization Expense

 

 

 

 

 

 

 

 

Years ending December 31:

 

(In thousands)

2013

 

$
667 

2014

 

 
667 

2015

 

 
667 

2016

 

 
663 

2017

 

 
550 

 

Schedule Of Changes In Product Liability

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Year Ended December 31

 

2012

 

2011

Beginning balance January 1

$

341

 

$

326

Accruals during the period

 

528

 

 

523

Charges / payments made under the warranties

 

(481)

 

 

(508)

Balance December 31

$

388

 

$

341

 


Summary Of Significant Accounting Policies (Narrative) (Details)
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Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Significant Accounting Policies [Line Items]      
Checks outstanding $ 4,091,000 $ 5,313,000  
Proceeds from sale of marketable securities 29,767,000 82,521,000 62,109,000
Net unrealized losses included OCI 30,000 87,000 792,000
Contractual maturities of marketable securities, within one year 5,697,000    
Contractual maturities of marketable securities, beyond one year to five years 25,566,000    
Contractual maturities of marketable securities, beyond five years to ten years 8,520,000    
Contractual maturities of marketable securities, beyond ten years 15,803,000    
Goodwill from acquisition 302,000 2,538,000  
Gross carrying amount of intangibles 4,445,000 4,445,000  
Accumulated amortization of intangibles 1,049,000 0  
Amortization expense 1,049,000 0 0
Advertising expense 210,000 70,000 9,000
Defense Products [Member]
      
Significant Accounting Policies [Line Items]      
Goodwill $ 14,325,000 $ 14,023,000  
Housewares/ Small Appliances [Member]
      
Significant Accounting Policies [Line Items]      
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    

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, 2012
Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost $ 55,504 $ 59,248
MARKETABLE SECURITIES, Fair Value 55,586 59,360
MARKETABLE SECURITIES, Gross Unrealized Gains 94 128
MARKETABLE SECURITIES, Gross Unrealized Losses 12 16
Tax-Exempt Municipal Bonds [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost 24,412 26,214
MARKETABLE SECURITIES, Fair Value 24,494 26,326
MARKETABLE SECURITIES, Gross Unrealized Gains 94 128
MARKETABLE SECURITIES, Gross Unrealized Losses 12 16
Variable Rate Demand Notes [Member]
    
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost 31,092 33,034
MARKETABLE SECURITIES, Fair Value $ 31,092 $ 33,034

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, 2012
Summary Of Significant Accounting Policies [Abstract]  
2013 $ 667
2014 667
2015 667
2016 663
2017 $ 550

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, 2012
Dec. 31, 2011
Summary Of Significant Accounting Policies [Abstract]    
Beginning balance January 1 $ 341 $ 326
Accruals during the period 528 523
Changes/payments made under the warranties (481) (508)
Balance December 31 $ 388 $ 341

Inventories
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Inventories
 12 Months Ended
Dec. 31, 2012
Inventories [Abstract]  
Inventories

B.   INVENTORIES:

The amount of inventories valued on the LIFO basis was $29,463,000 and $30,159,000 as of December 31, 2012 and 2011, respectively, and consists of housewares/small appliance finished goods.  Under LIFO, inventories are valued at approximately $6,375,000 and $5,518,000 below current cost determined on a first-in, first-out (FIFO) basis at December 31, 2012 and 2011, respectively.  During the years ended December 31, 2012, 2011, and 2010, $858,000, $5,474,000, and $601,000, 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

2012

 

$
(857)

 

$
546 

 

$
0.08 

2011

 

$
(1,313)

 

$
832 

 

$
0.12 

2010

 

$
(1,850)

 

$
1,169 

 

$
0.17 

 

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 $53,901,000 and $64,347,000 at December 31, 2012 and 2011, respectively.  The December 31, 2012 FIFO total is comprised of $4,388,000 of finished goods, $40,340,000 of work in process, and $9,173,000 of raw material and supplies.  At December 31, 2011 the FIFO total was comprised of $2,600,000 of finished goods, $50,462,000 of work in process, and $11,285,000 of raw material and supplies.


Inventories (Tables)
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Inventories (Tables)
 12 Months Ended
Dec. 31, 2012
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

2012

 

$
(857)

 

$
546 

 

$
0.08 

2011

 

$
(1,313)