Document And Entity Information
v3.8.0.1
Document And Entity Information - USD ($)
12 Months Ended
Dec. 31, 2017
Mar. 01, 2018
Jul. 02, 2017
Document And Entity Information [Abstract]      
Document Type 10-K    
Trading Symbol npk    
Amendment Flag false    
Document Period End Date Dec. 31, 2017    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2017    
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   6,968,120  
Entity Public Float     $ 544,256,037
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    

Condensed Consolidated Balance Sheets
v3.8.0.1
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
CURRENT ASSETS:    
Cash and cash equivalents $ 11,222 $ 27,034
Marketable securities 144,252 84,457
Accounts receivable 67,089 69,101
Less allowance for doubtful accounts 1,869 1,816
Accounts receivable, net 65,220 67,285
Inventories:    
Finished goods 27,242 25,200
Work in process 72,219 66,528
Raw materials and supplies 4,978 3,675
Total inventory 104,439 95,403
Assets held for sale 6,189 58,893
Other current assets 7,186 7,423
Total current assets 338,508 340,495
PROPERTY, PLANT AND EQUIPMENT:    
Land and land improvements 4,985 4,933
Buildings 47,412 47,012
Machinery and equipment 51,141 49,218
PROPERTY, PLANT AND EQUIPMENT 103,538 101,163
Less allowance for depreciation 58,370 51,688
PROPERTY, PLANT AND EQUIPMENT, NET 45,168 49,475
GOODWILL 11,485 11,485
INTANGIBLE ASSETS, net 3,330 4,961
NOTES RECEIVABLE 6,750 6,534
DEFERRED INCOME TAXES 995  
OTHER ASSETS 5,637 4,644
Total assets 411,873 417,594
CURRENT LIABILITIES:    
Accounts payable 28,445 39,584
Federal and state income taxes 3,750 6,273
Accrued liabilities 13,092 12,244
Liabilities held for sale 210 6,253
Total current liabilities 45,497 64,354
DEFERRED INCOME TAXES   3,004
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY    
Common stock, $1 par value: Authorized: 12,000,000 shares at December 31, 2017 and 2016; Issued: 7,440,518 shares at December 31, 2017 and 2016; Outstanding: 6,968,120 and 6,950,786 shares at December 31, 2017 and 2016, respectively 7,441 7,441
Paid-in capital 9,074 7,913
Retained earnings 364,757 350,203
Accumulated other comprehensive loss (86) (47)
Stockholders' equity before treasury stock 381,186 365,510
Less treasury stock, at cost, 472,398 and 489,732 shares at December 31, 2017 and 2016, respectively 14,810 15,274
Total stockholders' equity 366,376 350,236
Total liabilities and stockholders' equity $ 411,873 $ 417,594

Condensed Consolidated Balance Sheets (Parenthetical)
v3.8.0.1
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2017
Dec. 31, 2016
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 6,968,120 6,950,786
Treasury stock, at cost 472,398 489,732

Consolidated Statements Of Comprehensive Income
v3.8.0.1
Consolidated Statements Of Comprehensive Income - USD ($)
shares in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Consolidated Statements Of Comprehensive Income [Abstract]      
Net sales $ 333,633,000 $ 341,905,000 $ 355,649,000
Cost of sales 246,399,000 256,243,000 266,216,000
Gross profit 87,234,000 85,662,000 89,433,000
Selling and general expenses 22,900,000 22,429,000 21,735,000
Intangibles amortization 2,630,000 721,000 5,173,000
Operating profit 61,704,000 62,512,000 62,525,000
Other income 3,581,000 810,000 397,000
Earnings from continuing operations before provision for income taxes 65,285,000 63,322,000 62,922,000
Provision for income taxes from continuing operations 21,971,000 21,407,000 20,760,000
Earnings (loss) from continuing operations 43,314,000 41,915,000 42,162,000
Earnings (loss) from discontinued operations, net of tax 9,645,000 2,649,000 (1,666,000)
Net earnings $ 52,959,000 $ 44,564,000 $ 40,496,000
Weighted average shares outstanding:      
Basic and diluted 6,989 6,970 6,951
Earnings (loss) per share, basic and diluted:      
From continuing operations $ 6.20 $ 6.01 $ 6.07
From discontinued operations 1.38 0.38 (0.24)
Net earnings per share $ 7.58 $ 6.39 $ 5.83
Other comprehensive loss, net of tax:      
Unrealized loss on available-for-sale securities $ (39,000) $ (38,000) $ (6,000)
Comprehensive income $ 52,920,000 $ 44,526,000 $ 40,490,000

Consolidated Statements Of Cash Flows
v3.8.0.1
Consolidated Statements Of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Cash flows from operating activities:      
Net earnings $ 52,959,000 $ 44,564,000 $ 40,496,000
Adjustments to reconcile net earnings to net cash provided by operating activities:      
Provision for depreciation 7,258,000 13,962,000 10,427,000
Intangibles amortization 2,630,000 721,000 5,173,000
Deferred income tax provision (benefit) (4,001,000) 6,360,000 (998,000)
Gain on divestiture of business (11,413,000)    
Net gain on involuntary conversion of machinery and equipment (2,713,000) (968,000)  
Loss on disposal and impairment of property, plant and equipment 248,000 434,000 70,000
Provision for doubtful accounts 70,000 1,000 516,000
Noncash retirement plan expense 675,000 782,000 775,000
Other 238,000 217,000 220,000
Changes in operating accounts:      
Accounts receivable 1,848,000 (13,539,000) 708,000
Inventories (8,730,000) (7,528,000) (9,398,000)
Other assets and current assets (806,000) 5,148,000 (2,894,000)
Accounts payable and accrued liabilities (11,462,000) 12,145,000 (2,684,000)
Federal and state income taxes receivable/payable (2,523,000) 4,077,000 3,864,000
Net cash provided by operating activities 24,278,000 66,376,000 46,275,000
Cash flows from investing activities:      
Marketable securities purchased (192,584,000) (86,119,000) (20,170,000)
Marketable securities - maturities and sales 132,752,000 33,863,000 10,306,000
Proceeds from divestiture of business, net of cash paid 64,033,000    
Purchase of property, plant and equipment (7,396,000) (6,950,000) (6,461,000)
Note issued   (2,419,000)  
Proceeds from insurnace settlement 2,104,000 987,000  
Acquisition of intangible assets (1,000,000) (211,000)  
Sale of property, plant and equipment 1,000 3,000 25,000
Net cash used in investing activities (2,090,000) (60,846,000) (16,300,000)
Cash flows from financing activities:      
Dividends paid (38,405,000) (35,161,000) (28,114,000)
Proceeds from sale of treasury stock 519,000 443,000 323,000
Other (114,000)   (5,000)
Net cash used in financing activities (38,000,000) (34,718,000) (27,796,000)
Net increase (decrease) in cash and cash equivalents (15,812,000) (29,188,000) 2,179,000
Cash and cash equivalents at beginning of year 27,034,000 56,222,000 54,043,000
Cash and cash equivalents at end of year 11,222,000 27,034,000 56,222,000
Supplemental disclosures of cash flow information:      
Income taxes $ 32,837,000 $ 17,278,000 $ 21,930,000

Consolidated Statements Of Stockholders' Equity
v3.8.0.1
Consolidated Statements Of Stockholders' Equity - USD ($)
$ in Thousands
Common Stock [Member]
Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Comprehensive Income (Loss) [Member]
Treasury Stock [Member]
Total
Balance at Dec. 31, 2014 $ 7,441 $ 5,906 $ 328,417 $ (3) $ (16,318) $ 325,443
Balance, shares at Dec. 31, 2014 6,917,000          
Net earnings     40,496     40,496
Unrealized loss on available-for-sale securities       (6)   (6)
Dividends paid     (28,114)     (28,114)
Other   869     566 1,435
Other, shares 18,000          
Balance at Dec. 31, 2015 $ 7,441 6,775 340,799 (9) (15,752) 339,254
Balance, shares at Dec. 31, 2015 6,935,000          
Net earnings     44,564     44,564
Unrealized loss on available-for-sale securities       (38)   (38)
Dividends paid     (35,161)     (35,161)
Other   1,138 1   478 1,617
Other, shares 16,000          
Balance at Dec. 31, 2016 $ 7,441 7,913 350,203 (47) (15,274) $ 350,236
Balance, shares at Dec. 31, 2016 6,951,000         6,950,786
Net earnings     52,959     $ 52,959
Unrealized loss on available-for-sale securities       (39)   (39)
Dividends paid     (38,405)     (38,405)
Other   1,161     464 1,625
Other, shares 17,000          
Balance at Dec. 31, 2017 $ 7,441 $ 9,074 $ 364,757 $ (86) $ (14,810) $ 366,376
Balance, shares at Dec. 31, 2017 6,968,000         6,968,120

Consolidated Statements Of Stockholders' Equity (Parenthetical)
v3.8.0.1
Consolidated Statements Of Stockholders' Equity (Parenthetical) - $ / shares
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Stockholders' Equity [Abstract]      
Regular dividends per share paid $ 1.00 $ 1.00 $ 1.00
Extra dividends per share paid $ 4.50 $ 4.05 $ 3.05

Summary Of Significant Accounting Policies
v3.8.0.1
Summary Of Significant Accounting Policies
12 Months Ended
Dec. 31, 2017
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.



On January 3, 2017, the Company and its wholly-owned subsidiary, Presto Absorbent Products, Inc. (“PAPI”), entered into an asset purchase agreement wherein substantially all PAPI assets were sold and certain liabilities were assigned to Drylock Technologies, LTD. (“Drylock”) in exchange for $68,448,000.  The proceeds amount differs from the amount previously disclosed because of the customary post-closing adjustments that were finalized during the second quarter of 2017, totaling $1,448,000.  The asset purchase agreement also provides for additional proceeds of $4,000,000 upon the sale of certain delayed assets, consisting of machinery and equipment that were the subject of an involuntary conversion, at a future date.  As a result of this transaction, the Company classified its results of operations for all periods presented to reflect its Absorbent Products business as a discontinued operation and classified the assets and liabilities of its Absorbent Products business as held for sale.  See Note P for further discussion.



(3)  RECLASSIFICATIONS:  In addition to the reclassifications mentioned in Note A(2) above, 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.  The fair value of marketable securities are discussed in Note A(5). 



(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 $3,157,000 and $5,883,000 at December 31, 2017 and 2016, 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, 2017 and 2016, 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 2017 and 2016.







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



(In thousands)



MARKETABLE SECURITIES



 

 

 

 

 

 

 

 

 

 

 



Amortized Cost

 

Fair Value

 

Gross Unrealized Gains

 

Gross Unrealized Losses

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

30,103 

 

$

29,994 

 

$

 -

 

$

109 

Variable Rate Demand Notes

 

114,258 

 

 

114,258 

 

 

 -

 

 

 -

Total Marketable Securities

$

144,361 

 

$

144,252 

 

$

 -

 

$

109 



 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

38,223 

 

$

38,151 

 

$

 

$

73 

Variable Rate Demand Notes

 

46,306 

 

 

46,306 

 

 

 -

 

 

 -

Total Marketable Securities

$

84,529 

 

$

84,457 

 

$

 

$

73 



Proceeds from sales and maturities of marketable securities totaled $132,752,000 in 2017, $33,863,000 in 2016, and $10,306,000 in 2015.  There were no realized gross gains or losses related to sales of marketable securities during the years ended December 31, 2017, 2016 and 2015.  Net unrealized losses included in other comprehensive income were $37,000, $57,000 and $9,000 before taxes for the years ended December 31, 2017, 2016, and 2015, 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, 2017 are as follows: $25,741,000 within one year; $16,226,000 beyond one year to five years; $12,175,000 beyond five years to ten years, and $90,110,000 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 is 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 25 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.  Defense segment inventories are stated at the lower of cost and net realizable value determined principally on the first-in, first-out (FIFO) method.  Inventoried costs relating to contracts in progress are stated at actual production costs, including factory overhead, initial tooling, and other related costs incurred to date, reduced by amounts associated with recognized sales, utilizing a standard costing type method.  The Company evaluates inventories to determine if there are any excess or obsolete inventories on hand.



(8)  PROPERTY, PLANT AND EQUIPMENT:  Property, plant and equipment are stated at cost.  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.  Approximately $374,000 and $764,000 of construction in progress in the Company’s Defense segment is presented on the Consolidated Balance Sheet as Buildings and Machinery and Equipment, respectively, at December 31, 2017. The construction in progress is expected to be completed by the fourth quarter of 2018. Approximately $3,461,000 of construction in progress in the Company’s Defense segment is presented on the Consolidated Balance Sheet as Buildings at December 31, 2016.



(9)  GOODWILL:  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 2017, 2016, or 2015.



The Company's goodwill as of December 31, 2017 and 2016  was $11,485,000, relating entirely to its Defense segment, which had no cumulative impairment charges at December 31, 2017.



(10) INTANGIBLE ASSETS:  Intangible assets primarily consist of the value of an acquired government sales contract and the value of trademarks, trade secrets, and consulting agreements.  The intangible assets are all attributable to the Defense segment.  The government sales contract intangible asset is amortized based on units fulfilled under the applicable contract, while the other intangible assets are amortized on a straight-line basis that approximates economic use, over periods ranging from 2 to 10 years.  As of December 31, 2017, the Company determined that the trade secrets, which were acquired during 2017, had an indefinite life. 



Intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.  There were no impairments of intangible assets recognized during 2017, 2016, or 2015.



The gross carrying amounts of the government sales contract and other intangible assets subject to amortization were $21,690,000 and $211,000, respectively, totaling $21,901,000 at December 31, 2017 and 2016.  Accumulated amortization was $19,570,000 and $16,940,000 at December 31, 2017 and 2016, respectively.  Amortization expense was $2,630,000, $721,000, and $5,173,000 during the years ended December 31, 2017, 2016, and 2015, respectively.  Estimated amortization expense as of December 31, 2017 for the five succeeding years is shown in the following table:







 

 

 



 

 

 

Years ending December 31:

 

(In thousands)

2018

 

$

2,171 

2019

 

 

21 

2020

 

 

21 

2021

 

 

21 

2022

 

 

21 





(11) OTHER ASSETS: Other assets includes prepayments that are made from time to time by the Company for certain materials used in the manufacturing process in the Housewares/Small Appliance segment.  The Company expects to utilize the prepayments and related materials over an estimated period of up to two years.  As of December 31, 2017 and 2016, $11,567,000 and $10,974,000 of such prepayments, respectively, remained unused and outstanding.  At December 31, 2017 and 2016, $5,930,000 and $6,330,000 of these amounts, respectively, are included in Other Current Assets, representing the Company’s best estimate of the expected utilization of the prepayments and related materials during the twelve-month periods following those dates.



(12) 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(13) for a description of the Company’s policy for sales returns.



(13) 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 within the Housewares/Small Appliance segment.  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. 



(14) 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.



(15) ADVERTISING:  The Company's policy is to expense advertising as incurred and include it in selling and general expenses.  Advertising expense was $174,000, $369,000, and $98,000 in 2017, 2016, and 2015, respectively.



(16) 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



2017

 

2016

Beginning balance January 1

$

543

 

$

487

Accruals during the period

 

268

 

 

549

Charges / payments made under the warranties

 

(428)

 

 

(493)

Balance December 31

$

383

 

$

543



(17) 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.



(18) 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.  In December 2017, the United States enacted changes to its tax laws, which included a reduction of the corporate income tax rate from 35% to 21%, beginning in 2018.  The reduction in the tax rate resulted in a revaluation of the Company’s deferred tax assets and liabilities held at December 31, 2017.



(19) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The standard is effective for fiscal years beginning after December 15, 2019.  Early adoption is permitted for interim or annual impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements.

 

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides guidance in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwill, and consolidation.  The guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted under certain circumstances.  The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements.

 

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows.  ASU 2016-15 provides guidance on the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle.  ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements.

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  ASU 2016-13 provides guidance for estimating credit losses on certain types of financial instruments, including trade receivables, by introducing an approach based on expected losses. The expected loss approach will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. ASU 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.  The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance requires a modified retrospective transition method and early adoption is permitted. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its consolidated financial statements.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.  Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.  The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required.  The Company is in the early stages of evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements.

 

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities.  The guidance is effective for reporting periods (interim and annual) beginning after December 15, 2017.  The Company does not expect the adoption of ASU 2016-01 to have a material effect on its consolidated financial statements.

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. It is effective for annual reporting periods beginning after December 15, 2017.  The Company will adopt ASU 2014-09 as of January 1, 2018 utilizing the modified retrospective transition method.  The Company evaluated the impact of the standard on its two business segments, Housewares/Small Appliance and Defense.  Representative samples of existing revenue contracts for each material revenue stream were considered and evaluated.  That evaluation entailed a review of the “five-step” model established by ASU 2014-09 to identify the contract, performance obligations, the transaction price, the process for allocating the transaction price to performance obligations, the timing and pattern of revenue recognition, and additional disclosures that may be required.  The Company has determined that there are no material differences resulting from the adoption of ASU 2014-09.  As required by ASU 2014-09, the Company will present expanded disclosures related to revenues and contracts with customers in the first quarter of 2018, the assessment of which is ongoing.  The Company believes its business processes, systems, and controls are appropriate to support recognition and disclosure under ASU 2014-09.



Other pronouncements issued but not effective until after December 31, 2017, are not expected to have a material impact on the Company's consolidated financial statements. 


Summary Of Significant Accounting Policies (Policy)
v3.8.0.1
Summary Of Significant Accounting Policies (Policy)
12 Months Ended
Dec. 31, 2017
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.



On January 3, 2017, the Company and its wholly-owned subsidiary, Presto Absorbent Products, Inc. (“PAPI”), entered into an asset purchase agreement wherein substantially all PAPI assets were sold and certain liabilities were assigned to Drylock Technologies, LTD. (“Drylock”) in exchange for $68,448,000.  The proceeds amount differs from the amount previously disclosed because of the customary post-closing adjustments that were finalized during the second quarter of 2017, totaling $1,448,000.  The asset purchase agreement also provides for additional proceeds of $4,000,000 upon the sale of certain delayed assets, consisting of machinery and equipment that were the subject of an involuntary conversion, at a future date.  As a result of this transaction, the Company classified its results of operations for all periods presented to reflect its Absorbent Products business as a discontinued operation and classified the assets and liabilities of its Absorbent Products business as held for sale.  See Note P for further discussion.

Reclassifications

(3)  RECLASSIFICATIONS:  In addition to the reclassifications mentioned in Note A(2) above, 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.  The fair value of marketable securities are discussed in Note A(5). 

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 $3,157,000 and $5,883,000 at December 31, 2017 and 2016, 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, 2017 and 2016, 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 2017 and 2016.







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



(In thousands)



MARKETABLE SECURITIES



 

 

 

 

 

 

 

 

 

 

 



Amortized Cost

 

Fair Value

 

Gross Unrealized Gains

 

Gross Unrealized Losses

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

30,103 

 

$

29,994 

 

$

 -

 

$

109 

Variable Rate Demand Notes

 

114,258 

 

 

114,258 

 

 

 -

 

 

 -

Total Marketable Securities

$

144,361 

 

$

144,252 

 

$

 -

 

$

109 



 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

38,223 

 

$

38,151 

 

$

 

$

73 

Variable Rate Demand Notes

 

46,306 

 

 

46,306 

 

 

 -

 

 

 -

Total Marketable Securities

$

84,529 

 

$

84,457 

 

$

 

$

73 



Proceeds from sales and maturities of marketable securities totaled $132,752,000 in 2017, $33,863,000 in 2016, and $10,306,000 in 2015.  There were no realized gross gains or losses related to sales of marketable securities during the years ended December 31, 2017, 2016 and 2015.  Net unrealized losses included in other comprehensive income were $37,000, $57,000 and $9,000 before taxes for the years ended December 31, 2017, 2016, and 2015, 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, 2017 are as follows: $25,741,000 within one year; $16,226,000 beyond one year to five years; $12,175,000 beyond five years to ten years, and $90,110,000 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 is 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 25 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.  Defense segment inventories are stated at the lower of cost and net realizable value determined principally on the first-in, first-out (FIFO) method.  Inventoried costs relating to contracts in progress are stated at actual production costs, including factory overhead, initial tooling, and other related costs incurred to date, reduced by amounts associated with recognized sales, utilizing a standard costing type method.  The Company evaluates inventories to determine if there are any excess or obsolete inventories on hand.

Property, Plant And Equipment

(8)  PROPERTY, PLANT AND EQUIPMENT:  Property, plant and equipment are stated at cost.  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.  Approximately $374,000 and $764,000 of construction in progress in the Company’s Defense segment is presented on the Consolidated Balance Sheet as Buildings and Machinery and Equipment, respectively, at December 31, 2017. The construction in progress is expected to be completed by the fourth quarter of 2018. Approximately $3,461,000 of construction in progress in the Company’s Defense segment is presented on the Consolidated Balance Sheet as Buildings at December 31, 2016.

Goodwill

(9)  GOODWILL:  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 2017, 2016, or 2015.



The Company's goodwill as of December 31, 2017 and 2016  was $11,485,000, relating entirely to its Defense segment, which had no cumulative impairment charges at December 31, 2017.

Intangible Assets

(10) INTANGIBLE ASSETS:  Intangible assets primarily consist of the value of an acquired government sales contract and the value of trademarks, trade secrets, and consulting agreements.  The intangible assets are all attributable to the Defense segment.  The government sales contract intangible asset is amortized based on units fulfilled under the applicable contract, while the other intangible assets are amortized on a straight-line basis that approximates economic use, over periods ranging from 2 to 10 years.  As of December 31, 2017, the Company determined that the trade secrets, which were acquired during 2017, had an indefinite life. 



Intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.  There were no impairments of intangible assets recognized during 2017, 2016, or 2015.



The gross carrying amounts of the government sales contract and other intangible assets subject to amortization were $21,690,000 and $211,000, respectively, totaling $21,901,000 at December 31, 2017 and 2016.  Accumulated amortization was $19,570,000 and $16,940,000 at December 31, 2017 and 2016, respectively.  Amortization expense was $2,630,000, $721,000, and $5,173,000 during the years ended December 31, 2017, 2016, and 2015, respectively.  Estimated amortization expense as of December 31, 2017 for the five succeeding years is shown in the following table:







 

 

 



 

 

 

Years ending December 31:

 

(In thousands)

2018

 

$

2,171 

2019

 

 

21 

2020

 

 

21 

2021

 

 

21 

2022

 

 

21 



Other Assets

(11) OTHER ASSETS: Other assets includes prepayments that are made from time to time by the Company for certain materials used in the manufacturing process in the Housewares/Small Appliance segment.  The Company expects to utilize the prepayments and related materials over an estimated period of up to two years.  As of December 31, 2017 and 2016, $11,567,000 and $10,974,000 of such prepayments, respectively, remained unused and outstanding.  At December 31, 2017 and 2016, $5,930,000 and $6,330,000 of these amounts, respectively, are included in Other Current Assets, representing the Company’s best estimate of the expected utilization of the prepayments and related materials during the twelve-month periods following those dates

Revenue Recognition

(12) 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(13) for a description of the Company’s policy for sales returns.

Sales & Returns

(13) 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 within the Housewares/Small Appliance segment.  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

(14) 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

(15) ADVERTISING:  The Company's policy is to expense advertising as incurred and include it in selling and general expenses.  Advertising expense was $174,000, $369,000, and $98,000 in 2017, 2016, and 2015, respectively.

Product Warranty

(16) 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



2017

 

2016

Beginning balance January 1

$

543

 

$

487

Accruals during the period

 

268

 

 

549

Charges / payments made under the warranties

 

(428)

 

 

(493)

Balance December 31

$

383

 

$

543



Stock-Based Compensation

(17) 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

(18) 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.  In December 2017, the United States enacted changes to its tax laws, which included a reduction of the corporate income tax rate from 35% to 21%, beginning in 2018.  The reduction in the tax rate resulted in a revaluation of the Company’s deferred tax assets and liabilities held at December 31, 2017.

Recently Issued Accounting Pronouncements

(19) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The standard is effective for fiscal years beginning after December 15, 2019.  Early adoption is permitted for interim or annual impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements.

 

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides guidance in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwill, and consolidation.  The guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted under certain circumstances.  The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements.

 

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows.  ASU 2016-15 provides guidance on the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle.  ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements.

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  ASU 2016-13 provides guidance for estimating credit losses on certain types of financial instruments, including trade receivables, by introducing an approach based on expected losses. The expected loss approach will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. ASU 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.  The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance requires a modified retrospective transition method and early adoption is permitted. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its consolidated financial statements.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.  Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.  The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required.  The Company is in the early stages of evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements.

 

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities.  The guidance is effective for reporting periods (interim and annual) beginning after December 15, 2017.  The Company does not expect the adoption of ASU 2016-01 to have a material effect on its consolidated financial statements.

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. It is effective for annual reporting periods beginning after December 15, 2017.  The Company will adopt ASU 2014-09 as of January 1, 2018 utilizing the modified retrospective transition method.  The Company evaluated the impact of the standard on its two business segments, Housewares/Small Appliance and Defense.  Representative samples of existing revenue contracts for each material revenue stream were considered and evaluated.  That evaluation entailed a review of the “five-step” model established by ASU 2014-09 to identify the contract, performance obligations, the transaction price, the process for allocating the transaction price to performance obligations, the timing and pattern of revenue recognition, and additional disclosures that may be required.  The Company has determined that there are no material differences resulting from the adoption of ASU 2014-09.  As required by ASU 2014-09, the Company will present expanded disclosures related to revenues and contracts with customers in the first quarter of 2018, the assessment of which is ongoing.  The Company believes its business processes, systems, and controls are appropriate to support recognition and disclosure under ASU 2014-09.



Other pronouncements issued but not effective until after December 31, 2017, are not expected to have a material impact on the Company's consolidated financial statements.


Summary Of Significant Accounting Policies (Tables)
v3.8.0.1
Summary Of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2017
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, 2017

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

30,103 

 

$

29,994 

 

$

 -

 

$

109 

Variable Rate Demand Notes

 

114,258 

 

 

114,258 

 

 

 -

 

 

 -

Total Marketable Securities

$

144,361 

 

$

144,252 

 

$

 -

 

$

109 



 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt Municipal Bonds

$

38,223 

 

$

38,151 

 

$

 

$

73 

Variable Rate Demand Notes

 

46,306 

 

 

46,306 

 

 

 -

 

 

 -

Total Marketable Securities

$

84,529 

 

$

84,457 

 

$

 

$

73 



Schedule Of Estimated Future Amortization Expense



 

 

 



 

 

 

Years ending December 31:

 

(In thousands)

2018

 

$

2,171 

2019

 

 

21 

2020

 

 

21 

2021

 

 

21 

2022

 

 

21 



Schedule Of Changes In Product Warranty



 

 

 

 

 



 

 

 

 

 



(In thousands)



Year Ended December 31



2017

 

2016

Beginning balance January 1

$

543

 

$

487

Accruals during the period

 

268

 

 

549

Charges / payments made under the warranties

 

(428)

 

 

(493)

Balance December 31

$

383

 

$

543




Summary Of Significant Accounting Policies (Narrative) (Details)
v3.8.0.1
Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($)
6 Months Ended 12 Months Ended
Jul. 02, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Significant Accounting Policies [Line Items]          
Proceeds from sale $ 68,448,000        
Post-closing adjustments $ 1,448,000        
Checks outstanding     $ 3,157,000 $ 5,883,000  
Transfers into Level 2     0 0  
Transfers out of Level 2     0 0  
Proceeds from sale and maturity of available for sale securities     132,752,000 33,863,000 $ 10,306,000
Net unrealized losses included OCI     37,000 57,000 9,000
Contractual maturities of marketable securities, within one year     25,741,000    
Contractual maturities of marketable securities, beyond one year to five years     16,226,000    
Contractual maturities of marketable securities, beyond five years to ten years     12,175,000    
Contractual maturities of marketable securities, beyond ten years     90,110,000    
Goodwill     11,485,000 11,485,000  
Goodwill, Cumulative Impairment Charges     0    
Impairments of Intangible Assets     0 0 0
Gross carrying amount of intangibles     21,901,000    
Accumulated amortization of intangibles     19,570,000 16,940,000  
Amortization expense     2,630,000 721,000 5,173,000
Advertising expense     $ 174,000 $ 369,000 $ 98,000
Statutory rate     35.00% 35.00% 35.00%
Scenario, Forecast [Member]          
Significant Accounting Policies [Line Items]          
Proceeds from sale   $ 4,000,000      
Scenario, Plan [Member]          
Significant Accounting Policies [Line Items]          
Statutory rate   21.00%      
Defense [Member]          
Significant Accounting Policies [Line Items]          
Goodwill     $ 11,485,000 $ 11,485,000  
Housewares/ Small Appliances [Member]          
Significant Accounting Policies [Line Items]          
Expected prepayment utilization period     2 years    
Materials Prepayments     $ 11,567,000 10,974,000  
Standard product warranty coverage period     60 days    
Sales returns coverage period     60 days    
Buildings [Member] | Defense [Member]          
Significant Accounting Policies [Line Items]          
Construction in progress     $ 374,000 3,461,000  
Machinery and Equipment [Member] | Defense [Member]          
Significant Accounting Policies [Line Items]          
Construction in progress     $ 764,000    
Minimum [Member]          
Significant Accounting Policies [Line Items]          
Accounts receivable, collection period     25 days    
Economic use period for intangibles     2 years    
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     10 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     211,000    
Other Current Assets [Member] | Housewares/ Small Appliances [Member]          
Significant Accounting Policies [Line Items]          
Materials Prepayments     $ 5,930,000 $ 6,330,000  
Subsequent Event [Member] | Scenario, Forecast [Member]          
Significant Accounting Policies [Line Items]          
Proceeds from sale   $ 4,000,000      

Summary Of Significant Accounting Policies (Summary Of The Amortized Costs And Fair Values Of Marketable Securities) (Details)
v3.8.0.1
Summary Of Significant Accounting Policies (Summary Of The Amortized Costs And Fair Values Of Marketable Securities) (Details) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost $ 144,361 $ 84,529
MARKETABLE SECURITIES, Fair Value 144,252 84,457
MARKETABLE SECURITIES, Gross Unrealized Gains   1
MARKETABLE SECURITIES, Gross Unrealized Losses 109 73
Tax-Exempt Municipal Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost 30,103 38,223
MARKETABLE SECURITIES, Fair Value 29,994 38,151
MARKETABLE SECURITIES, Gross Unrealized Gains   1
MARKETABLE SECURITIES, Gross Unrealized Losses 109 73
Variable Rate Demand Notes [Member]    
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost 114,258 46,306
MARKETABLE SECURITIES, Fair Value $ 114,258 $ 46,306

Summary Of Significant Accounting Policies (Schedule Of Estimated Future Amortization Expense) (Details)
v3.8.0.1
Summary Of Significant Accounting Policies (Schedule Of Estimated Future Amortization Expense) (Details)
$ in Thousands
Dec. 31, 2017
USD ($)
Summary Of Significant Accounting Policies [Abstract]  
2018 $ 2,171
2019 21
2020 21
2021 21
2022 $ 21

Summary Of Significant Accounting Policies (Schedule Of Changes In Product Warranty Liability) (Details)
v3.8.0.1
Summary Of Significant Accounting Policies (Schedule Of Changes In Product Warranty Liability) (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Summary Of Significant Accounting Policies [Abstract]    
Beginning balance January 1 $ 543 $ 487
Accruals during the period 268 549
Changes/payments made under the warranties (428) (493)
Balance December 31 $ 383 $ 543

Inventories
v3.8.0.1
Inventories
12 Months Ended
Dec. 31, 2017
Inventories [Abstract]  
Inventories

B.   INVENTORIES:

The amount of inventories valued on the LIFO basis was $26,019,000 and $25,031,000 as of December 31, 2017 and 2016, respectively, and consists of housewares/small appliance finished goods.  Under LIFO, inventories are valued at approximately $3,835,000 and $2,585,000 below current cost determined on a first-in, first-out (FIFO) basis at December 31, 2017 and 2016, respectively.  During the years ended December 31, 2017, 2016, and 2015, $64,000, $2,451,000, and $0, 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

2017

 

$

(1,250)

 

$

830 

 

$

0.12 

2016

 

$

443 

 

$

(292)

 

$

(0.04)

2015

 

$

763 

 

$

(505)

 

$

(0.07)



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



Inventory for Defense and raw materials of the Housewares/Small Appliance segments are valued under the FIFO method and total $78,420,000 and $70,372,000 at December 31, 2017 and 2016, respectively.  At December 31, 2017, the FIFO total was comprised of $1,223,000 of finished goods, $72,219,000 of work in process, and $4,978,000 of raw material.  At December 31, 2016, the FIFO total was comprised of $169,000 of finished goods, $66,528,000 of work in process, and $3,675,000 of raw material.


Inventories (Tables)
v3.8.0.1
Inventories (Tables)
12 Months Ended
Dec. 31, 2017
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

2017

 

$

(1,250)

 

$

830 

 

$

0.12 

2016

 

$

443 

 

$

(292)

 

$

(0.04)

2015

 

$

763 

 

$

(505)

 

$

(0.07)




Inventories (Narrative) (Details)
v3.8.0.1
Inventories (Narrative) (Details) - USD ($)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Inventory [Line Items]      
Liquidation of LIFO layer $ 64,000 $ 2,451,000 $ 0
FIFO inventory amount 78,420,000 70,372,000  
Finished goods 1,223,000 169,000  
Work in process 72,219,000 66,528,000  
Raw materials and supplies 4,978,000 3,675,000  
Housewares/ Small Appliances [Member]      
Inventory [Line Items]      
LIFO inventory amount 26,019,000 25,031,000  
Inventory valuation, difference below FIFO $ 3,835,000 $ 2,585,000  

Inventories (Schedule Of Potential Impact Of LIFO Valuation to FIFO Valuation) (Details)
v3.8.0.1
Inventories (Schedule Of Potential Impact Of LIFO Valuation to FIFO Valuation) (Details) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Inventories [Abstract]      
Cost of Sales $ (1,250) $ 443 $ 763
Net Earnings $ 830 $ (292) $ (505)
Earnings Per Share $ 0.12 $ (0.04) $ (0.07)

Accrued Liabilities
v3.8.0.1
Accrued Liabilities
12 Months Ended
Dec. 31, 2017
Accrued Liabilities [Abstract]  
Accrued Liabilities

C.   ACCRUED LIABILITIES:

At December 31, 2017, accrued liabilities consisted of payroll $5,827,000, product liability $4,965,000, environmental $1,150,000, and other $1,150,000.  At December 31, 2016, accrued liabilities consisted of payroll $4,948,000, product liability $5,172,000, environmental $1,010,000, and other $1,114,000    



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.


Accrued Liabilities (Narrative) (Details)
v3.8.0.1
Accrued Liabilities (Narrative) (Details) - USD ($)
Dec. 31, 2017
Dec. 31, 2016
Accrued Liabilities [Abstract]    
Accrued product liability $ 4,965,000 $ 5,172,000
Accrued payroll liability 5,827,000 4,948,000
Environmental accrued liability 1,150,000 1,010,000
Other accrued liabilities $ 1,150,000 $ 1,114,000

Treasury Stock
v3.8.0.1
Treasury Stock
12 Months Ended
Dec. 31, 2017
Treasury Stock [Abstract]  
Treasury Stock

D.   TREASURY STOCK:

As of December 31, 2017, the Company has authority from the Board of Directors to reacquire an additional 503,373 shares.  During 2017 and 2015, 1,139 and 88 shares, respectively, were acquired from participants in the Company’s Incentive Compensation Plans described in Note F to cover those participants’ tax withholding obligations related to vested stock grants in accordance with the Plans’ rules. No shares were reacquired in 2016.   Treasury shares have been used for stock based compensation and to fund a portion of the Company's 401(k) contributions.


Treasury Stock (Narrative) (Details)
v3.8.0.1
Treasury Stock (Narrative) (Details) - shares
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Treasury Stock [Abstract]      
Shares approved for repurchase 503,373    
Shares Acquired From Participants For Share Based Compensation Tax Obligations 1,139 0 88

Net Earnings Per Share
v3.8.0.1
Net Earnings Per Share
12 Months Ended
Dec. 31, 2017
Net Earnings Per Share [Abstract]  
Net Earnings Per Share

E.   NET EARNINGS PER SHARE:

Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period.  Diluted earnings per share also includes the dilutive effect of additional potential common shares issuable.  Unvested stock awards, which contain non-forfeitable rights to dividends, whether paid or unpaid (“participating securities”), are included in the number of shares outstanding for both basic and diluted earnings per share calculations.


Stock-Based Compensation
v3.8.0.1
Stock-Based Compensation
12 Months Ended
Dec. 31, 2017
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

F.   STOCK-BASED COMPENSATION: 

The Company, from time to time, enters into separate non-vested share-based payment arrangements with employees and executive officers under the Incentive Compensation Plan approved by stockholders on May 18, 2010 and the 2017 Incentive Compensation Plan approved by shareholders on May 16, 2017, which authorized 50,000 and 150,000 shares, respectively, to be available for grants.  The Compensation Committee of the Company’s Board of Directors approves all stock-based compensation awards for employees and executive officers of the Company.  The Company grants restricted stock that is subject to continued employment and vesting conditions, but has dividend and voting rights, and uses the fair-market value of the Company’s common stock on the grant date to measure the fair value of the awards.  The fair value of restricted stock is recognized as expense ratably over the requisite serviced period, net of estimated forfeitures.



During 2017, 2016, and 2015, the Company granted 7,837,  3,162 and 5,779 shares of restricted stock, respectively, to 22 employees and executive officers of the Company.  Unless otherwise vested early in accordance with the Incentive Compensation Plans, the restricted stock vests on specified dates in 2020 through 2023, subject to the recipients’ continued employment or service through each applicable vesting date. 



The Company recognized pre-tax compensation expense in the Consolidated Statements of Comprehensive Income related to stock-based compensation of $545,000, $391,000, and $333,000 in 2017, 2016, and 2015, respectively. As of December 31, 2017, there was approximately $1,432,000 of unrecognized compensation cost related to the restricted stock awards that is expected to be recognized over a weighted-average period of 3.8 years.  There were 6,492,  1,284, and 2,570 shares of restricted stock that vested during 2017, 2016, and 2015, respectively.



The following table summarizes the activity for non-vested restricted stock:





 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



2017

 

2016

 

2015



Shares

 

Weighted Average Fair Value at Grant Date

 

Shares

 

Weighted Average Fair Value at Grant Date

 

Shares

 

Weighted Average Fair Value at Grant Date

Non-vested at beginning of period

28,465 

 

$

77.93 

 

26,587 

 

$

78.00 

 

23,668 

 

$

79.02 

Granted

7,837 

 

 

105.06 

 

3,162 

 

 

89.10 

 

5,779 

 

 

84.90 

Vested

(6,492)

 

 

85.58 

 

(1,284)

 

 

106.92 

 

(2,570)

 

 

103.65 

Forfeited

 

 

 

 

 

 

 -

 

(290)

 

 

78.12 

Non-vested at end of period

29,810 

 

$

83.40