Document And Entity Information
v3.8.0.1
Document And Entity Information - shares
6 Months Ended
Jul. 01, 2018
Aug. 01, 2018
Document And Entity Information [Abstract]    
Document Type 10-Q  
Trading Symbol npk  
Amendment Flag false  
Document Period End Date Jul. 01, 2018  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2018  
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   6,978,446

Condensed Consolidated Balance Sheets
v3.8.0.1
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Jul. 01, 2018
Dec. 31, 2017
CURRENT ASSETS:    
Cash and cash equivalents $ 36,610 $ 11,222
Marketable securities 129,439 144,252
Accounts receivable, net 43,266 65,220
Inventories:    
Finished goods 26,536 27,242
Work in process 65,569 72,219
Raw materials 5,543 4,978
Total inventory 97,648 104,439
Income tax receivable 607  
Assets held for sale 528 6,189
Other current assets 6,852 7,186
Total current assets 314,950 338,508
PROPERTY, PLANT AND EQUIPMENT:    
PROPERTY, PLANT AND EQUIPMENT 108,795 103,538
Less allowance for depreciation 60,395 58,370
PROPERTY, PLANT AND EQUIPMENT, NET 48,400 45,168
GOODWILL 11,485 11,485
INTANGIBLE ASSETS, net 1,170 3,330
NOTES RECEIVABLE 6,858 6,750
DEFERRED INCOME TAXES 977 995
OTHER ASSETS 5,696 5,637
Total assets 389,536 411,873
CURRENT LIABILITIES:    
Accounts payable 29,535 28,445
Federal and state income taxes   3,750
Accrued liabilities 12,654 13,092
Liabilities held for sale   210
Total current liabilities 42,189 45,497
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY    
Common stock, $1 par value: Authorized: 12,000,000 shares; Issued: 7,440,518 shares 7,441 7,441
Paid-in capital 9,889 9,074
Retained earnings 344,529 364,757
Accumulated other comprehensive loss (21) (86)
Stockholders' equity before treasury stock 361,838 381,186
Treasury stock, at cost 14,491 14,810
Total stockholders' equity 347,347 366,376
Total liabilities and stockholders' equity $ 389,536 $ 411,873

Condensed Consolidated Balance Sheets (Parenthetical)
v3.8.0.1
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jul. 01, 2018
Dec. 31, 2017
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

Consolidated Statements Of Comprehensive Income
v3.8.0.1
Consolidated Statements Of Comprehensive Income - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jul. 01, 2018
Jul. 02, 2017
Jul. 01, 2018
Jul. 02, 2017
Consolidated Statements Of Comprehensive Income [Abstract]        
Net sales $ 79,227 $ 74,561 $ 156,053 $ 147,415
Cost of sales 59,782 57,001 116,331 109,729
Gross profit 19,445 17,560 39,722 37,686
Selling and general expenses 5,631 5,418 11,782 11,178
Intangibles amortization 1,416 5 2,161 372
Operating profit 12,398 12,137 25,779 26,136
Other income 997 980 1,892 1,930
Earnings from continuing operations before provision for income taxes 13,395 13,117 27,671 28,066
Provision for income taxes from continuing operations 2,619 4,176 5,901 9,152
Earnings from continuing operations 10,776 8,941 21,770 18,914
Earnings (loss) from discontinued operations, net of tax (1) 771 (9) 8,953
Net earnings $ 10,775 $ 9,712 $ 21,761 $ 27,867
Weighted average shares outstanding:        
Basic and diluted 7,006 6,990 7,002 6,985
Earnings per share, basic and diluted:        
From continuing operations $ 1.54 $ 1.28 $ 3.11 $ 2.71
From discontinued operations 0.00 0.11 0.00 1.28
Net earnings per share $ 1.54 $ 1.39 $ 3.11 $ 3.99
Other comprehensive income, net of tax:        
Unrealized gain (loss) on available-for-sale securities $ 21 $ (5) $ 65 $ 23
Comprehensive income $ 10,796 $ 9,707 $ 21,826 $ 27,890
Cash dividends declared and paid per common share $ 0.00 $ 0.00 $ 6.00 $ 5.50

Consolidated Statements Of Cash Flows
v3.8.0.1
Consolidated Statements Of Cash Flows - USD ($)
6 Months Ended
Jul. 01, 2018
Jul. 02, 2017
Cash flows from operating activities:    
Net earnings $ 21,761,000 $ 27,867,000
Adjustments to reconcile net earnings to net cash provided by operating activities:    
Provision for depreciation 2,057,000 3,912,000
Intangibles amortization 2,161,000 372,000
Provision for doubtful accounts 12,000 14,000
Noncash retirement plan expense 379,000 357,000
Gain on involuntary conversion of machinery and equipment   (1,997,000)
Gain on disposal of property, plant and equipment   (2,000)
Gain on divestiture of business   (11,413,000)
Other 139,000 133,000
Changes in operating accounts:    
Accounts receivable, net 21,469,000 29,060,000
Inventories 6,791,000 (21,191,000)
Other assets and current assets 275,000 (3,099,000)
Accounts payable and accrued liabilities (847,000) (9,675,000)
Federal and state income taxes (4,371,000) (8,656,000)
Net cash provided by operating activities 49,826,000 5,682,000
Cash flows from investing activities:    
Marketable securities purchased (59,771,000) (109,465,000)
Marketable securities - maturities and sales 74,666,000 65,250,000
Proceeds from divestiture of business, net of cash paid 3,660,000 64,033,000
Purchase of property, plant and equipment (4,001,000) (4,509,000)
Proceeds from insurnace settlement 2,474,000  
Sale of property, plant and equipment 1,000 1,000
Net cash provided by investing activities 17,029,000 15,310,000
Cash flows from financing activities:    
Dividends paid (41,989,000) (38,405,000)
Proceeds from sale of treasury stock 528,000 519,000
Other (6,000) (114,000)
Net cash used in financing activities (41,467,000) (38,000,000)
Net increase (decrease) in cash and cash equivalents 25,388,000 (17,008,000)
Cash and cash equivalents at beginning of period 11,222,000 27,034,000
Cash and cash equivalents at end of period $ 36,610,000 $ 10,026,000

Basis Of Presentation
v3.8.0.1
Basis Of Presentation
6 Months Ended
Jul. 01, 2018
Basis Of Presentation [Abstract]  
Basis Of Presentation

NOTE A – BASIS OF PRESENTATION 

The consolidated interim financial statements included herein are unaudited and have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of management of the Company, the consolidated interim financial statements reflect all the adjustments which were of a normal recurring nature necessary for a fair presentation of the results of the interim periods.  The condensed consolidated balance sheet as of December 31, 2017 is summarized from audited consolidated financial statements, but does not include all the disclosures contained therein and should be read in conjunction with the 2017 Annual Report on Form 10-K.  Interim results for the period are not indicative of those for the year.



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 provided 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. The sale of the delayed assets was consummated during the second quarter of 2018 and resulted in no gain or loss.  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 J for further discussion.


Basis Of Presentation (Narrative) (Details)
v3.8.0.1
Basis Of Presentation (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Jul. 01, 2018
Jul. 02, 2017
Basis Of Presentation [Abstract]    
Proceeds from sale $ 4,000,000 $ 68,448,000
Post-closing adjustments   1,448,000
Gain on divestiture of business, net $ 0 $ 11,413,000

Reclassifications
v3.8.0.1
Reclassifications
6 Months Ended
Jul. 01, 2018
Reclassifications [Abstract]  
Reclassifications

NOTE B – RECLASSIFICATIONS

In addition to the reclassifications mentioned in Note A 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.


Revenues
v3.8.0.1
Revenues
6 Months Ended
Jul. 01, 2018
Revenues [Abstract]  
Revenues

NOTE C – REVENUES

The Company’s revenues are derived from short-term contracts and programs that are typically completed within 3 to 24 months and are recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers. The standard was adopted on January 1, 2018 and did not result in any change to the Company’s pattern of revenue recognition.  The Company’s contracts each contain one or more performance obligations: the physical delivery of distinct ordered product or products.  The Company provides an assurance type product warranty on its products to the original owner.  In addition, for the Housewares/Small Appliances segment, the Company estimates returns of seasonal products and returns of newly introduced products sold with a return privilege.  Stand-alone selling prices are set forth in each contract and are used to allocate revenue to the corresponding performance obligations.  For the Housewares/Small Appliances segment, contracts include variable consideration, as the prices are subject to customer allowances, which principally consist of allowances for cooperative advertising, defective product, and trade discounts.  Customer allowances are generally allocated to the performance obligations based on budgeted rates agreed upon with customers, as well as historical experience, and yield the Company’s best estimate of the expected value for the variable consideration.



The Company's contracts in the Defense segment are primarily with the U.S. Department of Defense (DOD) and DOD prime contractors. As a consequence, this segment's business essentially depends on the product needs and governmental funding of the DOD. Substantially all of the work performed by the Defense segment directly or indirectly for the DOD is performed on a fixed-price basis. Under fixed-price contracts, the price paid to the contractor is awarded based on competition at the outset of the contract and therefore, with the exception of limited escalation provisions on specific materials, is generally not subject to any adjustments reflecting the actual costs incurred by the contractor.



Revenue is recognized at a point in time.  For the Housewares/Small Appliance segment, revenue is generally recognized as the completed, ordered product is shipped to the customer from the Company’s warehouses.  For the relatively few situations in which revenue should be recognized when product is received by the customer, the Company adjusts revenue accordingly.  For the Defense segment, revenue is recognized when the customer has legal title and formally documents that it has accepted the products.  In some situations, the customer may obtain legal title and accept the products at the Company’s facilities, arranging for transportation at a later date, typically in one to four weeks.  The Company does not consider the short-term storage of the customer owned products to be a material performance obligation, and no part of the transaction price is allocated to it.



The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, and customer advances and deposits (contract liabilities) on the Company’s Condensed Consolidated Balance Sheets. For the Defense segment, the Company occasionally receives advances or deposits from certain customers before revenue is recognized, resulting in contract liabilities.  These advances or deposits do not represent a significant financing component.  As of July 1, 2018 and December 31, 2017, $8,346,000 and $8,364,000, respectively, of contract liabilities were included in Accounts Payable on the Company’s Condensed Consolidated Balance Sheets.  The Company recognized revenue of $528,000 during the six-month period ended July 1, 2018 that was included in the Defense segment contract liability at the beginning of that period. The Company monitors its estimates of variable consideration, which includes customer allowances for cooperative advertising, defective product, and trade discounts, and returns of seasonal and newly introduced product, all of which pertain to the Housewares/Small Appliances segment, and periodically makes cumulative adjustments to the carrying amounts of these contract liabilities as appropriate.  During both the three and six month periods ended July 1, 2018 and July 2, 2017, there were no material adjustments to the aforementioned estimates.  There were no amounts of revenue recognized during the same periods related to performance obligations satisfied in a previous period.  The portion of contract transaction prices allocated to unsatisfied performance obligations, also known as the contract backlog, in the Company’s Defense segment were $324,937,000 and $308,173,000 as of July 1, 2018 and December 31, 2017, respectively.  The Company anticipates that the unsatisfied performance obligations will be fulfilled in an 18 to 24-month period.  The performance obligations in the Housewares/Small Appliances segment have original expected durations of less than one year.



The Company’s principal sources of revenue are derived from two segments: Housewares/Small Appliance and Defense, as shown in Note E. Management utilizes the performance measures by segment to evaluate the financial performance of and make operating decisions for the Company.


Revenues (Narrative) (Details)
v3.8.0.1
Revenues (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Jul. 01, 2018
Jul. 02, 2017
Jul. 01, 2018
Jul. 02, 2017
Dec. 31, 2017
Housewares/ Small Appliances [Member]          
Change in estimate of variable consideration $ 0 $ 0 $ 0 $ 0  
Revenue recognized from performance obligations satisfied in a prior period 0 $ 0 0 $ 0  
Defense [Member]          
Contract liabilities 8,346,000   8,346,000   $ 8,364,000
Revenue recognized that was previously included in contract liability     528,000    
Unsatified performance obligations $ 324,937,000   $ 324,937,000   $ 308,173,000
Defense [Member] | Minimum [Member]          
Holding period following recognition of revenue     7 days    
Defense [Member] | Maximum [Member]          
Holding period following recognition of revenue     28 days    

Revenues (Timing Of Performance Obligation) (Narrative) (Details)
v3.8.0.1
Revenues (Timing Of Performance Obligation) (Narrative) (Details) - Defense [Member] - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-02
6 Months Ended
Jul. 01, 2018
Minimum [Member]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Fulfullment period of unsatisfied performance obligations 18 months
Maximum [Member]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Fulfullment period of unsatisfied performance obligations 24 months

Net Earnings Per Share
v3.8.0.1
Net Earnings Per Share
6 Months Ended
Jul. 01, 2018
Net Earnings Per Share [Abstract]  
Net Earnings Per Share

NOTE D – 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. 


Business Segments
v3.8.0.1
Business Segments
6 Months Ended
Jul. 01, 2018
Business Segments [Abstract]  
Business Segments

NOTE E – BUSINESS SEGMENTS 

In the following summary, operating profit represents earnings before other income and income taxes.  The Company's segments operate discretely from each other with no shared manufacturing facilities.  Costs associated with corporate activities (such as cash and marketable securities management) and the assets associated with such activities are included within the Housewares/Small Appliances segment for all periods presented.





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

(in thousands)



 

Housewares / Small Appliances

 

Defense Products

 

Assets Held for Sale

 

Total

Quarter ended July 1, 2018

 

 

 

 

 

 

 

 

 

 

 

 

External net sales

 

$

17,978 

 

$

61,249 

 

$

 

 

$

79,227 

Gross profit

 

 

2,248 

 

 

17,197 

 

 

 

 

 

19,445 

Operating profit (loss)

 

 

(298)

 

 

12,696 

 

 

 

 

 

12,398 

Total assets

 

 

247,352 

 

 

141,656 

 

 

528 

 

 

389,536 

Depreciation and amortization

 

 

332 

 

 

2,089 

 

 

 

 

 

2,421 

Capital expenditures

 

 

3,203 

 

 

297 

 

 

 

 

 

3,500 



 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended July 2, 2017

 

 

 

 

 

 

 

 

 

 

 

 

External net sales

 

$

16,901 

 

$

57,660 

 

$

 

 

$

74,561 

Gross profit

 

 

1,528 

 

 

16,032 

 

 

 

 

 

17,560 

Operating profit (loss)

 

 

(949)

 

 

13,086 

 

 

 

 

 

12,137 

Total assets

 

 

222,165 

 

 

162,439 

 

 

5,335 

 

 

389,939 

Depreciation and amortization

 

 

308 

 

 

1,870 

 

 

 

 

 

2,178 

Capital expenditures

 

 

463 

 

 

1,372 

 

 

 

 

 

1,835 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

(in thousands)



 

Housewares / Small Appliances

 

Defense Products

 

Assets Held for Sale

 

Total

Six Months ended July 1, 2018

 

 

 

 

 

 

 

 

 

 

 

 

External net sales

 

$

34,035 

 

$

122,018 

 

$

 

 

$

156,053 

Gross profit

 

 

4,147 

 

 

35,575 

 

 

 

 

 

39,722 

Operating profit (loss)

 

 

(1,173)

 

 

26,952 

 

 

 

 

 

25,779 

Total assets

 

 

247,352 

 

 

141,656 

 

 

528 

 

 

389,536 

Depreciation and amortization

 

 

668 

 

 

3,550 

 

 

 

 

 

4,218 

Capital expenditures

 

 

4,912 

 

 

378 

 

 

 

 

 

5,290 



 

 

 

 

 

 

 

 

 

 

 

 

Six Months ended July 2, 2017

 

 

 

 

 

 

 

 

 

 

 

 

External net sales

 

$

36,948 

 

$

110,467 

 

$

 

 

$

147,415 

Gross profit

 

 

4,697 

 

 

32,989 

 

 

 

 

 

37,686 

Operating profit (loss)

 

 

(402)

 

 

26,538 

 

 

 

 

 

26,136 

Total assets

 

 

222,165 

 

 

162,439 

 

 

5,335 

 

 

389,939 

Depreciation and amortization

 

 

611 

 

 

3,624 

 

 

 

 

 

4,235 

Capital expenditures

 

 

923 

 

 

1,589 

 

 

 

 

 

2,512 



 

 

 

 

 

 

 

 

 

 

 

 






Business Segments (Tables)
v3.8.0.1
Business Segments (Tables)
6 Months Ended
Jul. 01, 2018
Business Segments [Abstract]  
Summary Of Business Segments Information



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

(in thousands)



 

Housewares / Small Appliances

 

Defense Products

 

Assets Held for Sale

 

Total

Quarter ended July 1, 2018

 

 

 

 

 

 

 

 

 

 

 

 

External net sales

 

$

17,978 

 

$

61,249 

 

$

 

 

$

79,227 

Gross profit

 

 

2,248 

 

 

17,197 

 

 

 

 

 

19,445 

Operating profit (loss)

 

 

(298)

 

 

12,696 

 

 

 

 

 

12,398 

Total assets

 

 

247,352 

 

 

141,656 

 

 

528 

 

 

389,536 

Depreciation and amortization

 

 

332 

 

 

2,089 

 

 

 

 

 

2,421 

Capital expenditures

 

 

3,203 

 

 

297 

 

 

 

 

 

3,500 



 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended July 2, 2017

 

 

 

 

 

 

 

 

 

 

 

 

External net sales

 

$

16,901 

 

$

57,660 

 

$

 

 

$

74,561 

Gross profit

 

 

1,528 

 

 

16,032 

 

 

 

 

 

17,560 

Operating profit (loss)

 

 

(949)

 

 

13,086 

 

 

 

 

 

12,137 

Total assets

 

 

222,165 

 

 

162,439 

 

 

5,335 

 

 

389,939 

Depreciation and amortization

 

 

308 

 

 

1,870 

 

 

 

 

 

2,178 

Capital expenditures

 

 

463 

 

 

1,372 

 

 

 

 

 

1,835 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

(in thousands)



 

Housewares / Small Appliances

 

Defense Products

 

Assets Held for Sale

 

Total

Six Months ended July 1, 2018

 

 

 

 

 

 

 

 

 

 

 

 

External net sales

 

$

34,035 

 

$

122,018 

 

$

 

 

$

156,053 

Gross profit

 

 

4,147 

 

 

35,575 

 

 

 

 

 

39,722 

Operating profit (loss)

 

 

(1,173)

 

 

26,952 

 

 

 

 

 

25,779 

Total assets

 

 

247,352 

 

 

141,656 

 

 

528 

 

 

389,536 

Depreciation and amortization

 

 

668 

 

 

3,550 

 

 

 

 

 

4,218 

Capital expenditures

 

 

4,912 

 

 

378 

 

 

 

 

 

5,290 



 

 

 

 

 

 

 

 

 

 

 

 

Six Months ended July 2, 2017

 

 

 

 

 

 

 

 

 

 

 

 

External net sales

 

$

36,948 

 

$

110,467 

 

$

 

 

$

147,415 

Gross profit

 

 

4,697 

 

 

32,989 

 

 

 

 

 

37,686 

Operating profit (loss)

 

 

(402)

 

 

26,538 

 

 

 

 

 

26,136 

Total assets

 

 

222,165 

 

 

162,439 

 

 

5,335 

 

 

389,939 

Depreciation and amortization

 

 

611 

 

 

3,624 

 

 

 

 

 

4,235 

Capital expenditures

 

 

923 

 

 

1,589 

 

 

 

 

 

2,512 



 

 

 

 

 

 

 

 

 

 

 

 




Business Segments (Schedule Of Segment Information) (Details)
v3.8.0.1
Business Segments (Schedule Of Segment Information) (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jul. 01, 2018
Jul. 02, 2017
Jul. 01, 2018
Jul. 02, 2017
Dec. 31, 2017
Segment Reporting Information [Line Items]          
External net sales $ 79,227 $ 74,561 $ 156,053 $ 147,415  
Gross profit 19,445 17,560 39,722 37,686  
Operating profit (loss) 12,398 12,137 25,779 26,136  
Total assets 389,536 389,939 389,536 389,939 $ 411,873
Depreciation and amortization 2,421 2,178 4,218 4,235  
Capital expenditures 3,500 1,835 5,290 2,512  
Housewares/ Small Appliances [Member]          
Segment Reporting Information [Line Items]          
External net sales 17,978 16,901 34,035 36,948  
Gross profit 2,248 1,528 4,147 4,697  
Operating profit (loss) (298) (949) (1,173) (402)  
Total assets 247,352 222,165 247,352 222,165  
Depreciation and amortization 332 308 668 611  
Capital expenditures 3,203 463 4,912 923  
Defense [Member]          
Segment Reporting Information [Line Items]          
External net sales 61,249 57,660 122,018 110,467  
Gross profit 17,197 16,032 35,575 32,989  
Operating profit (loss) 12,696 13,086 26,952 26,538  
Total assets 141,656 162,439 141,656 162,439  
Depreciation and amortization 2,089 1,870 3,550 3,624  
Capital expenditures 297 1,372 378 1,589  
Discontinued Operations Held-for-sale [Member]          
Segment Reporting Information [Line Items]          
Total assets $ 528 $ 5,335 $ 528 $ 5,335  

Fair Value Of Financial Instruments
v3.8.0.1
Fair Value Of Financial Instruments
6 Months Ended
Jul. 01, 2018
Fair Value Of Financial Instruments [Abstract]  
Fair Value Of Financial Instruments

NOTE F - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company utilizes the methods of 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 amounts for cash and cash equivalents, accounts receivable, notes receivable, accounts payable, and accrued liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. 


Cash, Cash Equivalents And Marketable Securities
v3.8.0.1
Cash, Cash Equivalents And Marketable Securities
6 Months Ended
Jul. 01, 2018
Cash, Cash Equivalents And Marketable Securities [Abstract]  
Cash, Cash Equivalents And Marketable Securities

NOTE G - CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES 

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 has classified all marketable securities as available-for-sale which requires the securities to be reported at estimated 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 July 1, 2018 and December 31, 2017, 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 the end of the periods presented 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 the six months ended July 1, 2018.





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

(In Thousands)



 

MARKETABLE SECURITIES



 

Amortized Cost

 

Fair Value

 

Gross Unrealized Gains

 

Gross Unrealized Losses

July 1, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt  Municipal Bonds

 

$

27,602 

 

$

27,575 

 

$

 -

 

$

27 

Variable Rate Demand Notes

 

 

101,864 

 

 

101,864 

 

 

 -

 

 

 -

Total Marketable Securities

 

$

129,466 

 

$

129,439 

 

$

 -

 

$

27 



 

 

 

 

 

 

 

 

 

 

 

 

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 



Proceeds from maturities and sales of available-for-sale securities totaled $11,353,000 and $38,415,000 for the three month periods ended July 1, 2018 and July 2, 2017, respectively, and totaled $74,666,000 and $65,250,000 for the six month periods then ended, respectively.  There were no gross gains or losses related to sales of marketable securities during the same periods.  Net unrealized gains (losses) included in other comprehensive income were $27,000 and $(8,000) before taxes for the three month periods ended July 1, 2018 and July 2, 2017, respectively, and were $82,000 and $34,000 before taxes for the six month periods then ended, 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 July 1, 2018 are as follows: $26,741,000 within one year; $14,523,000 beyond one year to five years; $7,231,000 beyond five years to ten years, and $80,944,000 beyond ten years. All of the instruments in the beyond five year ranges are variable rate demand notes which 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.


Cash, Cash Equivalents And Marketable Securities (Tables)
v3.8.0.1
Cash, Cash Equivalents And Marketable Securities (Tables)
6 Months Ended
Jul. 01, 2018
Cash, Cash Equivalents And Marketable Securities [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

July 1, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt  Municipal Bonds

 

$

27,602 

 

$

27,575 

 

$

 -

 

$

27 

Variable Rate Demand Notes

 

 

101,864 

 

 

101,864 

 

 

 -

 

 

 -

Total Marketable Securities

 

$

129,466 

 

$

129,439 

 

$

 -

 

$

27 



 

 

 

 

 

 

 

 

 

 

 

 

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 




Cash, Cash Equivalents And Marketable Securities (Narrative) (Details)
v3.8.0.1
Cash, Cash Equivalents And Marketable Securities (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Jul. 01, 2018
Jul. 02, 2017
Jul. 01, 2018
Jul. 02, 2017
Cash, Cash Equivalents And Marketable Securities [Line Items]        
Transfers into Level 2 $ 0   $ 0  
Transfers out of Level 2 0   0  
Proceeds from sales of available-for-sale securities 11,353,000 $ 38,415,000 74,666,000 $ 65,250,000
Gross gains or losses related to sales of marketable securities 0 0 0 0
Net unrealized gains (losses) included in accumulated other comprehensive income, before taxes 27,000 (8,000) 82,000 34,000
Contractual maturities of marketable securities within 1 year 26,741,000   26,741,000  
Contractual maturities of marketable securities, years 2-5 14,523,000   14,523,000  
Contractual maturities of marketable securities, years 6-10 7,231,000   7,231,000  
Contractual maturities of marketable securities, after 10 years 80,944,000   $ 80,944,000  
Marketable securities liquidation period     7 days  
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]        
Cash, Cash Equivalents And Marketable Securities [Line Items]        
Reclassification out of AOCI $ 0 $ 0 $ 0 $ 0

Cash, Cash Equivalents And Marketable Securities (Summary Of The Amortized Costs And Fair Values Of Marketable Securities) (Details)
v3.8.0.1
Cash, Cash Equivalents And Marketable Securities (Summary Of The Amortized Costs And Fair Values Of Marketable Securities) (Details) - USD ($)
$ in Thousands
Jul. 01, 2018
Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost $ 129,466 $ 144,361
MARKETABLE SECURITIES, Fair Value 129,439 144,252
MARKETABLE SECURITIES, Gross Unrealized Losses 27 109
Tax-Exempt Municipal Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost 27,602 30,103
MARKETABLE SECURITIES, Fair Value 27,575 29,994
MARKETABLE SECURITIES, Gross Unrealized Losses 27 109
Variable Rate Demand Notes [Member]    
Schedule of Available-for-sale Securities [Line Items]    
MARKETABLE SECURITIES, Amortized Cost 101,864 114,258
MARKETABLE SECURITIES, Fair Value $ 101,864 $ 114,258

Other Assets
v3.8.0.1
Other Assets
6 Months Ended
Jul. 01, 2018
Other Assets [Abstract]  
Other Assets

NOTE H – 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 Appliances segment.  The Company expects to utilize the prepayments and related materials over an estimated period of up to two years.  As of July 1, 2018 and December 31, 2017, $10,126,000 and $11,567,000 of such prepayments, respectively, remained unused and outstanding.  At July 1, 2018 and December 31, 2017, $4,430,000 and $5,930,000, respectively, of these amounts were 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.


Other Assets (Narrative) (Details)
v3.8.0.1
Other Assets (Narrative) (Details) - Housewares/ Small Appliances [Member] - USD ($)
$ in Thousands
6 Months Ended
Jul. 01, 2018
Dec. 31, 2017
Expected prepayment utilization period 2 years  
Other Assets [Member]    
Materials Prepayments $ 10,126 $ 11,567
Other Current Assets [Member]    
Materials Prepayments $ 4,430 $ 5,930

Commitments And Contingencies
v3.8.0.1
Commitments And Contingencies
6 Months Ended
Jul. 01, 2018
Commitments And Contingencies [Abstract]  
Commitments And Contingencies

NOTE I – COMMITMENTS AND CONTINGENCIES

The Company is involved in largely routine litigation incidental to its business.  Management believes the ultimate outcome of the litigation will not have a material effect on the Company's consolidated financial position, liquidity, or results of operations.


Discontinued Operations
v3.8.0.1
Discontinued Operations
6 Months Ended
Jul. 01, 2018
Discontinued Operations [Abstract]  
Discontinued Operations

NOTE J – DISCONTINUED OPERATIONS

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 provided 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.  The sale of the delayed assets was consummated during the second quarter of 2018 and resulted in no gain or loss.  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. The Company’s pre-tax gain on sale of $11,413,000, net of one-time transaction costs, was recorded in the first six months of 2017 within earnings from discontinued operations.  This amount differs from the gain previously reported as a result of the post-closing adjustments mentioned above that were finalized in the second quarter of 2017.



The following table summarizes the results of the Absorbent Products business within discontinued operations for each of the periods presented:







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended

(in thousands) (unaudited)

July 1, 2018

 

July 2, 2017

 

July 1, 2018

 

July 2, 2017

Net sales

$

 -

 

$

 -

 

$

 -

 

$

421 

Cost of sales

 

 -

 

 

(17)

 

 

(11)

 

 

(485)

Selling and general expenses

 

 -

 

 

 

 

 -

 

 

(24)

Gain on divestiture, net

 

 -

 

 

709 

 

 

 -

 

 

11,413 

Other income

 

 -

 

 

430 

 

 

 -

 

 

2,078 

Earnings (loss) from discontinued operations before provision for income taxes

 

 -

 

 

1,124 

 

 

(11)

 

 

13,403 

Provision for (benefit from) income taxes from discontinued operations

 

 

 

353 

 

 

(2)

 

 

4,450 

Earnings (loss) from discontinued operations, net of tax

$

(1)

 

$

771 

 

$

(9)

 

$

8,953 



The following table summarizes the major classes of assets and liabilities of the Absorbent Products business held for sale for each of the periods presented:







 

 

 

 

 



 

 

 

 

 



 

(in thousands)

July 1, 2018 (Unaudited)

 

December 31, 2017

Accounts receivable, net

$

528 

 

$

2,529 

Property, plant and equipment, net

 

 -

 

 

3,660 

Assets held for sale

$

528 

 

$

6,189 



 

 

 

 

 

Accounts payable

$

 -

 

$

210 

Liabilities held for sale

$

 -

 

$

210 



The Consolidated Statements of Cash Flows do not present the cash flows from discontinued operations separately from cash flows from continuing operations.  Cash used in operating activities from discontinued operations was $692,000 and $5,625,000 for the six months ended July 1, 2018 and July 2, 2017, respectively. Cash provided by investing activities related to discontinued operations was $6,134,000 and $62,036,000 for the six months ended July 1, 2018 and July 2, 2017, respectively.



In connection with the asset purchase agreement discussed above, the Company entered into a 10-year lease agreement with Drylock for a portion of its manufacturing and warehouse facilities.  The lease agreement provided for total annual payments of $1,288,000 initially. It also provides Drylock an option for early termination of the lease after the initial five years and an option to modify the space subject to the agreement.  Drylock elected the latter option as of June 30, 2017. The agreement allows as well for adjustments to the rental payments based on certain price indices.  The Company also entered into a transition services agreement with Drylock, which terminated at the end of 2017. The amounts received from Drylock for transition services and rental income are recorded in Other Income on the Consolidated Statements of Comprehensive Income.


Discontinued Operations (Tables)
v3.8.0.1
Discontinued Operations (Tables)
6 Months Ended
Jul. 01, 2018
Discontinued Operations [Abstract]  
Results of discontinued operations and schedule of major classes of assets and liabilities

The following table summarizes the results of the Absorbent Products business within discontinued operations for each of the periods presented:







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended

(in thousands) (unaudited)

July 1, 2018

 

July 2, 2017

 

July 1, 2018

 

July 2, 2017

Net sales

$

 -

 

$

 -

 

$

 -

 

$

421 

Cost of sales

 

 -

 

 

(17)

 

 

(11)

 

 

(485)

Selling and general expenses

 

 -

 

 

 

 

 -

 

 

(24)

Gain on divestiture, net

 

 -

 

 

709 

 

 

 -

 

 

11,413 

Other income

 

 -

 

 

430 

 

 

 -

 

 

2,078 

Earnings (loss) from discontinued operations before provision for income taxes

 

 -

 

 

1,124 

 

 

(11)

 

 

13,403 

Provision for (benefit from) income taxes from discontinued operations

 

 

 

353 

 

 

(2)

 

 

4,450 

Earnings (loss) from discontinued operations, net of tax

$

(1)

 

$

771 

 

$

(9)

 

$

8,953 



The following table summarizes the major classes of assets and liabilities of the Absorbent Products business held for sale for each of the periods presented:







 

 

 

 

 



 

 

 

 

 



 

(in thousands)

July 1, 2018 (Unaudited)

 

December 31, 2017

Accounts receivable, net

$

528 

 

$

2,529 

Property, plant and equipment, net

 

 -

 

 

3,660 

Assets held for sale

$

528 

 

$

6,189 



 

 

 

 

 

Accounts payable

$

 -

 

$

210 

Liabilities held for sale

$

 -

 

$

210 




Discontinued Operations (Narrative) (Details)
v3.8.0.1
Discontinued Operations (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jul. 01, 2018
Jul. 02, 2017
Jul. 01, 2018
Jul. 02, 2017
Dec. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Proceeds from sale $ 4,000,000     $ 68,448,000  
Post-closing adjustments       1,448,000  
Gain on divestiture of business, net 0     11,413,000  
Cash provided by (used in) operating activities of discontinued operations     $ (692,000) (5,625,000)  
Cash provided by (used in) investing activities related to discontinued operations     $ 6,134,000 62,036,000  
Term of lease     10 years    
Early termination term     5 years    
Discontinued Operations Held-for-sale [Member]          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Gain on divestiture of business, net $ 0 $ 709,000   $ 11,413,000  
Discontinued Operations Held-for-sale [Member] | Scenario, Forecast [Member]          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Total annual lease payments         $ 1,288,000

Discontinued Operations (Summary Of Results) (Details)
v3.8.0.1
Discontinued Operations (Summary Of Results) (Details) - USD ($)
3 Months Ended 6 Months Ended
Jul. 01, 2018
Jul. 02, 2017
Jul. 01, 2018
Jul. 02, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net sales $ 79,227,000 $ 74,561,000 $ 156,053,000 $ 147,415,000
Cost of sales (59,782,000) (57,001,000) (116,331,000) (109,729,000)
Selling and general expenses (5,631,000) (5,418,000) (11,782,000) (11,178,000)
Gain on divestiture of business, net 0     11,413,000
Other income 997,000 980,000 1,892,000 1,930,000
Earnings (loss) from discontinued operations, net of tax (1,000) 771,000 (9,000) 8,953,000
Discontinued Operations Held-for-sale [Member]        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net sales       421,000
Cost of sales   (17,000) (11,000) (485,000)
Selling and general expenses   2,000   (24,000)
Gain on divestiture of business, net 0 709,000   11,413,000
Other income   430,000   2,078,000
Earnings (loss) from discontinued operations before provision for income taxes   1,124,000 (11,000) 13,403,000
Provision for (benefit from) income taxes from discontinued operations 1,000 353,000 (2,000) 4,450,000
Earnings (loss) from discontinued operations, net of tax $ (1,000) $ 771,000 $ (9,000) $ 8,953,000