National Presto Industries Inc 10-Q for FY2021 Q3
National Presto Industries Inc (NPK)
About this 10-Q
National Presto Industries Inc filed this 10-Q on November 12, 2021, covering the quarter ended October 3, 2021 (FY2021 Q3).
Headline figures
Quarter ended October 3, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $87.23M
- down 7.1% from $93.94M a year earlier
- Net income
- $4.13M
- down 66.0% from net income of $12.14M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM
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Commission file number
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NATIONAL PRESTO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer | ☐ | | ☒ | Non-accelerated filer | ☐ | Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
There were
| Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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| Item 3 – Quantitative and Qualitative Disclosures About Market Risk |
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| CERTIFICATIONS |
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 3, 2021 and December 31, 2020
(Dollars in thousands)
| October 3, 2021 (Unaudited) | December 31, 2020 | |||||||||||||||
| ASSETS | ||||||||||||||||
| CURRENT ASSETS: | ||||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||||
| Marketable securities | ||||||||||||||||
| Accounts receivable, net | ||||||||||||||||
| Inventories: | ||||||||||||||||
| Finished goods | $ | $ | ||||||||||||||
| Work in process | ||||||||||||||||
| Raw materials | ||||||||||||||||
| Notes receivable, current | | |||||||||||||||
| Other current assets | ||||||||||||||||
| Total current assets | ||||||||||||||||
| PROPERTY, PLANT AND EQUIPMENT | $ | $ | ||||||||||||||
| Less allowance for depreciation | ||||||||||||||||
| GOODWILL | ||||||||||||||||
| INTANGIBLE ASSETS, net | ||||||||||||||||
| NOTES RECEIVABLE | ||||||||||||||||
| RIGHT-OF-USE LEASE ASSETS | ||||||||||||||||
| DEFERRED INCOME TAXES | ||||||||||||||||
| OTHER ASSETS | ||||||||||||||||
| $ | $ | |||||||||||||||
| The accompanying notes are an integral part of the condensed consolidated financial statements. |
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 3, 2021 and December 31, 2020
(Dollars in thousands)
| October 3, 2021 (Unaudited) | December 31, 2020 | |||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
| LIABILITIES | ||||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||||
| Accounts payable | $ | $ | ||||||||||||||
| Federal and state income taxes | ||||||||||||||||
| Lease liabilities | ||||||||||||||||
| Accrued liabilities | ||||||||||||||||
| Total current liabilities | ||||||||||||||||
| LEASE LIABILITIES - NON-CURRENT | ||||||||||||||||
| OTHER NON-CURRENT LIABILITIES | ||||||||||||||||
| Total liabilities | ||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||||||
| STOCKHOLDERS' EQUITY | ||||||||||||||||
| Common stock, par value: | ||||||||||||||||
| Authorized: shares | ||||||||||||||||
| Issued: shares | $ | $ | ||||||||||||||
| Paid-in capital | ||||||||||||||||
| Retained earnings | ||||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||||
| Treasury stock, at cost | ||||||||||||||||
| Total stockholders' equity | ||||||||||||||||
| $ | $ | |||||||||||||||
| The accompanying notes are an integral part of the condensed consolidated financial statements. |
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three and Nine Months Ended October 3, 2021 and September 27, 2020
(Unaudited)
(In thousands except per share data)
| Three Months Ended |
Nine Months Ended |
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| 2021 |
2020 |
2021 |
2020 |
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| Net sales |
$ | $ | $ | $ | ||||||||||||
| Cost of sales |
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| Gross profit |
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| Selling and general expenses |
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| Intangibles amortization |
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| Operating profit |
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| Other income |
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| Earnings before provision for income taxes |
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| Provision for income taxes |
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| Net earnings |
$ | $ | $ | $ | ||||||||||||
| Weighted average shares outstanding: |
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| Basic and diluted |
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| Net Earnings per share: |
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| Basic and diluted |
$ | $ | $ | $ | ||||||||||||
| Comprehensive income: |
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| Net earnings |
$ | $ | $ | $ | ||||||||||||
| Other comprehensive (loss) income, net of tax: |
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| Unrealized (loss) gain on available-for-sale securities |
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| Comprehensive income |
$ | $ | $ | $ | ||||||||||||
| Cash dividends declared and paid per common share |
$ | $ | $ | $ | ||||||||||||
| The accompanying notes are an integral part of the condensed consolidated financial statements. |
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended October 3, 2021 and September 27, 2020
(Unaudited)
(Dollars in thousands)
| 2021 |
2020 |
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| Cash flows from operating activities: |
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| Net earnings |
$ | $ | ||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
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| Provision for depreciation |
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| Intangibles amortization |
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| Non-cash retirement plan expense |
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| Loss on sale of property, plant, and equipment |
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| Other |
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| Changes in operating accounts: |
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| Accounts receivable, net |
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| Inventories |
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| Other assets and current assets |
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| Accounts payable and accrued liabilities |
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| Federal and state income taxes |
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| Net cash provided by operating activities |
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| Cash flows from investing activities: |
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| Marketable securities purchased |
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| Marketable securities - maturities and sales |
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| Proceeds from note receivable |
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| Proceeds from insurance settlement |
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| Purchase of property, plant and equipment |
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| Net cash provided by (used in) investing activities |
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| Cash flows from financing activities: |
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| Dividends paid |
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| Proceeds from sale of treasury stock |
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| Other |
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| Net cash used in financing activities |
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| Net increase (decrease) in cash and cash equivalents |
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| Cash and cash equivalents at beginning of period |
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| Cash and cash equivalents at end of period |
$ | $ | ||||||
| The accompanying notes are an integral part of the condensed consolidated financial statements. |
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Three and Nine Months Ended October 3, 2021 and September 27, 2020
(Unaudited)
(In thousands except per share data)
| Shares of Common Stock Outstanding Net of Treasury Shares |
Common Stock |
Paid-in Capital |
Retained Earnings |
Accumulated Comprehensive Income (Loss) |
Treasury Stock |
Total |
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| Balance June 28, 2020 |
$ | $ | $ | $ | $ | ( |
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| Net earnings |
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| Unrealized (loss) on available-for-sale securities, net of tax |
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| Other |
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| Balance September 27, 2020 |
$ | $ | $ | $ | $ | ( |
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| Balance July 4, 2021 |
$ | $ | $ | $ | $ | ( |
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| Net earnings |
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| Unrealized (loss) on available-for-sale securities, net of tax |
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| Other |
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| Balance October 3, 2021 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||
| Shares of Common Stock Outstanding Net of Treasury Shares | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Comprehensive Income (Loss) | Treasury Stock | Total | ||||||||||||||||||||||
| Balance December 31, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
| Net earnings | ||||||||||||||||||||||||||||
| Unrealized gain on available-for-sale securities, net of tax | ||||||||||||||||||||||||||||
| Dividends paid March 13, per share regular, per share extra | ( | ) | ( | ) | ||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||
| Balance September 27, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
| Balance December 31, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
| Net earnings | ||||||||||||||||||||||||||||
| Unrealized (loss) on available-for-sale securities, net of tax | ( | ) | ( | ) | ||||||||||||||||||||||||
| Dividends paid March 15, $ per share regular, per share extra | ( | ) | ( | ) | ||||||||||||||||||||||||
| Other | 1 | (1 | ) | |||||||||||||||||||||||||
| Balance October 3, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 of 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, 2020 is summarized from audited consolidated financial statements, but does not include all the disclosures contained therein and should be read in conjunction with the 2020 Annual Report on Form 10-K. Interim results for the period are not indicative of those for the year.
NOTE B – GENERAL
Government responses to the COVID-19 virus have impacted worldwide economic activity. The Company continues to monitor the impact of the pandemic on all aspects of its business, including effects on employees, customers, suppliers, and the global economy and will adjust procedures accordingly. All of the Company’s businesses are deemed essential and as a result, all have been and are currently operating. The COVID-19 related edicts and guidelines continue to affect each segment in a variety of fashions, which include material and labor shortages, contributing to increased material and labor costs as well as difficulty in securing needed products and components; congestion throughout the supply chain resulting in sizable delays; increased absenteeism; limited opportunities to meet with customers/suppliers; as well as inefficiencies inherent when dealing with suppliers and customers that continue to work from home. The extent to which the various responses to the COVID-19 pandemic impact the Company’s business for the remainder of 2021 and beyond will depend on future developments that are highly uncertain and cannot be predicted.
In response to the government mandated COVID-19 shutdowns, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property (QIP). The CARES Act did not have a material impact on the Company’s income tax provision for the three months or nine months ended October 3, 2021.
NOTE C – REVENUES
The Company’s revenues are derived from short-term contracts and programs that are typically completed within
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.
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 primarily recognized when the customer has legal title and formally documents that it has accepted the products. There are also certain termination clauses in Defense segment contracts that may give rise to an over-time pattern of recognition of revenue in the absence of alternative use of the product. 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 October 3, 2021 and December 31, 2020, $
The Company’s principal sources of revenue are derived from segments: Housewares/Small Appliance, Defense, and Safety, 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.
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.
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 owned or leased 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.
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| Housewares / Small Appliances | Defense | Safety | Total | |||||||||||||
| Quarter ended October 3, 2021 | ||||||||||||||||
| External net sales | $ | $ | $ | $ | ||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ||||||||||||
| Operating profit (loss) | ( | ) | ( | ) | ||||||||||||
| Total assets | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Capital expenditures | ||||||||||||||||
| Quarter ended September 27, 2020 | ||||||||||||||||
| External net sales | $ | $ | $ | $ | ||||||||||||
| Gross profit (loss) | ( | ) | ||||||||||||||
| Operating profit (loss) | ( | ) | ||||||||||||||
| Total assets | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Capital expenditures | ||||||||||||||||
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| Housewares / Small Appliances | Defense | Safety | Total | |||||||||||||
| Nine Months Ended October 3, 2021 | ||||||||||||||||
| External net sales | $ | $ | $ | $ | ||||||||||||
| Gross profit (loss) | ( | ) | ||||||||||||||
| Operating profit (loss) | ( | ) | ( | ) | ||||||||||||
| Total assets | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Capital expenditures | ||||||||||||||||
| Nine Months Ended September 27, 2020 | ||||||||||||||||
| External net sales | $ | $ | $ | |||||||||||||
| Gross profit (loss) | ( | ) | ||||||||||||||
| Operating profit (loss) | ( | ) | ||||||||||||||
| Total assets | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Capital expenditures | ||||||||||||||||
NOTE F - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company utilizes the methods of fair value as described in FASB 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. See Note G for fair value information on 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 October 3, 2021 and December 31, 2020, 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.
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| MARKETABLE SECURITIES | ||||||||||||||||
| Amortized Cost | Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | |||||||||||||
| October 3, 2021 | ||||||||||||||||
| Tax-exempt Municipal Bonds | $ | $ | $ | $ | ||||||||||||
| Variable Rate Demand Notes | ||||||||||||||||
| Total Marketable Securities | $ | $ | $ | $ | ||||||||||||
| December 31, 2020 | ||||||||||||||||
| Tax-exempt Municipal Bonds | $ | $ | $ | $ | ||||||||||||
| Variable Rate Demand Notes | ||||||||||||||||
| Total Marketable Securities | $ | $ | $ | $ | ||||||||||||
Proceeds from maturities and sales of available-for-sale securities totaled $
The contractual maturities of the marketable securities held at October 3, 2021 are as follows: $
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 years. As of October 3, 2021 and December 31, 2020, $
NOTE I – LEASES
The Company accounts for leases under ASC Topic 842, Leases. The Company’s leasing activities include roles as both lessee and lessor. As lessee, the Company’s primary leasing activities include buildings and structures to support its manufacturing operations at one location in its Defense segment, and warehouse space and equipment to support its distribution center operations in its Housewares/Small Appliances segment. As lessor, the Company’s primary leasing activity is comprised of manufacturing and office space located adjacent to its corporate offices. All of the Company’s leases are classified as operating leases.
The Company’s leases as lessee in its Defense segment provide for variable lease payments that are based on changes in the Consumer Price Index. As lessor, the Company’s primary lease also provides for variable lease payments that are based on changes in the Consumer Price Index, as well as on increases in costs of insurance, real estate taxes, and utilities related to the leased space. Generally, all of the Company’s lease contracts include options for extensions and early terminations. The majority of lease terms of the Company’s lease contracts recognized on the balance sheet reflect extension options, while none reflect early termination options.
The Company has determined that the rates implicit in its leases are not readily determinable and therefore, estimates its incremental borrowing rates utilizing quotes from financial institutions for real estate and equipment, as applicable, over periods of time similar to the terms of its leases. The Company has entered into various short-term (12 months or less) leases as lessee and has elected a non-recognition accounting policy, as permitted by ASC Topic 842.
| 3 Months Ending | 3 Months Ending | 9 Months Ending | 9 Months Ending | |||||||||||||
| Summary of Lease Cost (in thousands) | October 3, 2021 | September 27, 2020 | October 3, 2021 | September 27, 2020 | ||||||||||||
| Operating lease cost | $ | $ | $ | $ | ||||||||||||
| Short-term and variable lease cost | ||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||
Operating cash used for operating leases was $
Maturities of operating lease liabilities are as follows:
| Years ending December 31: | (In thousands) | |||
| 2021 (remaining three months) | $ | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
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| Total lease payments | $ | |||
| Less: future interest expense | ||||
| Lease liabilities | $ | |||
Lease income from operating lease payments was $
| Years ending December 31: | (In thousands) | |||
| 2021 (remaining three months) | $ | |||
| 2022 | ||||
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| Thereafter | ||||
| Total lease payments | $ | |||
The Company considers risk associated with the residual value of its leased real property to be low, given the nature of the long-term lease agreement, the Company’s ability to control the maintenance of the property, and the creditworthiness of the lessee. The residual value risk is further mitigated by the long-lived nature of the property, and the propensity of such assets to hold their value or, in some cases, appreciate in value.
NOTE J – 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.
In the state of Mississippi, inventory that is shipped out of state that is held in a licensed Free Port Warehouse is exempt from personal property taxes. One of the Company's subsidiaries operates in Hinds County, Mississippi. That subsidiary has submitted its Hinds County Free Port Warehouse tax filing for approximately 40 years. Each year, the county then assessed the subsidiary in accordance with the Company's filing. However, in June 2020, the Hinds County tax assessor notified the Company that the county had no record of a Free Port Warehouse License and issued an assessment totaling $
NOTE K – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of ASC 740, Income Taxes, and providing for simplification in several other areas. The standard became effective for fiscal years beginning after December 15, 2020. The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, elsewhere in this Form 10-Q, in the Company’s 2020 Annual Report to Shareholders, in the Proxy Statement for the 2021 annual meeting, and in the Company’s press releases and oral statements made with the approval of an authorized executive officer are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that could cause results to differ materially from those anticipated by some of the statements made herein. Investors are cautioned that all forward-looking statements involve risks and uncertainty. In addition to the factors discussed herein and in the Notes to Consolidated Financial Statements, among the other factors that could cause actual results to differ materially are the following: consumer spending and debt levels; interest rates; continuity of relationships with and purchases by major customers; product mix; the benefit and risk of business acquisitions; competitive pressure on sales and pricing; development and market acceptance of new products; increases in material, freight/shipping, tariffs, or production cost which cannot be recouped in product pricing; delays or interruptions in shipping or production; reliance on third-party suppliers in Asia; shipment of defective product which could result in product liability claims or recalls; work or labor disruptions stemming from a unionized work force; changes in government requirements, military spending, and funding of government contracts, which could result in, among other things, the modification or termination of existing contracts; dependence on subcontractors or vendors to perform as required by contract; the ability of startup businesses to ultimately have the potential to be successful; the efficient start-up and utilization of capital equipment investments; political actions of federal and state governments which could have an impact on everything from the value of the U.S dollar vis-à-vis other currencies to the availability of affordable labor and energy; and security breaches and disruptions to the Company’s information technology systems. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings.
COVID-19 Disclosure
At the inception of the state COVID-19-related shutdowns, all of the Company’s businesses were deemed essential and as a result, did not shutdown. Although the state shutdowns are largely over, CDC guidelines remain in effect resulting in ongoing concerns about the government responses to the COVID-19 virus and in particular, to the Delta and other variants. Those guidelines typically require social distancing for the unvaccinated and the wearing of masks. Government payments, which have partially ended, had ensured that demand for goods was high while removing the incentive to work, which in turn affected supply and the cost of materials, components, finished goods, labor, and transportation. Those shortages have led to congestion throughout the supply chain that has impacted all of the Company's businesses. The vaccine mandates if implemented could lead to additional shortages and congestion. As a result of ongoing uncertainties, many external contacts continue to be managed through internet tools like “Zoom.” Due to the Company’s historical conservative practices, it has no debt and has adequate balances to fund its operations.
The Company has complied with the applicable COVID-19 regulations and CDC guidelines. For individuals not fully vaccinated, both masks and the six-foot social distancing rule continue to be observed in the offices and where practicable in the factories. Where not practicable, barriers are in place between workers.
The ongoing COVID-19 regulations and guidelines have affected each segment in a variety of ways, which include increased absenteeism; the cancellation of planned trade shows and customer/supplier visits; inefficiencies inherent when dealing with suppliers and customers that continue to work from home; as well as challenges in securing material, components, finished goods, and labor. See “Item 1A. Risk Factors” titled “The COVID-19 or Other Pandemics, Epidemics or Similar Public Health Crises Risks” included in the Company's Annual Report on Form 10-K for year ended December 31, 2020.
Comparison of Third Quarter 2021 and 2020
Readers are directed to Note E to the Consolidated Financial Statements, “Business Segments,” for data on the financial results of the Company’s three business segments for the quarters ended October 3, 2021 and September 27, 2020.
On a consolidated basis, net sales decreased by $6,712,000 (7%), gross profit decreased by $9,488,000 (46%), selling and general expenses increased by $329,000 (5%), and intangibles amortization was flat. Other income decreased by $167,000 (21%), while earnings before provision for income taxes decreased by $9,984,000 (65%), and net earnings decreased by $8,009,000 (66%). Details concerning these changes can be found in the comments by segment below.
Housewares/Small Appliance net sales increased by $563,000 from $27,169,000 to $27,732,000, or 2.1%, primarily attributable to an increase in pricing, approximately a third of which was offset by a decrease in shipments. Defense net sales decreased by $7,341,000 from $66,679,000 to $59,338,000, or 11.0%, primarily reflecting a decrease in shipments.
Housewares/Small Appliance gross profit decreased $8,439,000 from $5,259,000 to a loss of $3,180,000, primarily reflecting higher product and ocean cargo and inland freight costs. Defense gross profit decreased $1,098,000 from $15,718,000 to $14,620,000, primarily reflecting the decrease in sales mentioned above, partially offset by a more favorable mix of products. Due to the startup nature of both businesses in the Safety segment and the resulting limited revenues, gross margins were negative in both years.
Selling and general expenses for the Housewares/Small Appliance segment increased $223,000, primarily reflecting higher costs and accruals for employee compensation and benefits of $228,000 and insurance of $136,000 partially offset by the absence of 2020 charges related to a product marketing campaign of $100,000. Selling and general expenses for the Defense increased $219,000, primarily reflecting increased accruals for health care of $61,000 and legal and professional costs of $67,000. Selling and general expenses for the Safety segment were essentially flat.
The above items were responsible for the change in operating profit.
The $167,000 decrease in other income was primarily attributable to a decrease in interest income on marketable securities largely stemming from lower yields on a lower average daily investment.
Earnings before provision for income taxes decreased $9,984,000 from $15,264,000 to $5,280,000. The provision for income taxes decreased from $3,126,000 to $1,151,000, which resulted in an effective income tax rate of 22% and 21%, for the quarters ended October 3, 2021 and September 27, 2020, respectively. Net earnings decreased $8,009,000 from $12,138,000 to $4,129,000, or 66%.
Comparison of First Nine Months 2021 and 2020
Readers are directed to Note E to the Consolidated Financial Statements, “Business Segments,” for data on the financial results of the Company’s three business segments for the first nine months ended October 3, 2021 and September 27, 2020.
The Company reports its operations on a fiscal quarter basis in which each quarter contains approximately thirteen weeks and ends on a Sunday, with the exception of the fourth quarter, which ends on December 31. Occasionally, the end dates of the fiscal quarters are adjusted to account for differences that accumulate between the end of the fiscal year and the end of the subsequent first quarter. One such adjustment occurred during the quarter ended April 4, 2021. As compared to the prior year's first nine months, the current year's first nine months includes five additional days.
On a consolidated basis, sales increased by $8,665,000 (4%), gross profit decreased by $11,312,000 (19%), selling and general expenses increased by $830,000 (4%), and intangibles amortization was essentially flat. Other income decreased by $1,122,000 (37%), while earnings before provision for income taxes decreased by $13,258,000 (32%), and net earnings decreased by $10,603,000 (32%). Details concerning these changes can be found in the comments by segment below.
Housewares/Small Appliance net sales increased by $4,412,000 from $73,025,000 to $77,437,000, or 6%, largely attributable to an increase in shipments. Defense net sales increased by $4,103,000 from $173,489,000 to $177,592,000, or 2%, also primarily reflecting an increase in units shipped.
Housewares/Small Appliance gross profit decreased $11,071,000 from $13,982,000 to $2,911,000, primarily reflecting the increase in sales mentioned above offset by increased product and ocean cargo and inland freight costs. Defense gross profit decreased $500,000 from $45,631,000 to $45,131,000, primarily reflecting the increase in sales mentioned above offset by a less favorable product mix. Due to the startup nature of both businesses in the Safety segment and the resulting limited revenues, gross margins were negative in both years.
Selling and general expenses for the Housewares/Small Appliance segment increased $577,000, primarily reflecting higher costs and accruals for employee compensation and benefits of $709,000 and increased accruals for insurance of $461,000, partially offset by the absence of 2020 charges related to a product marketing campaign of $624,000. Selling and general expenses for the Defense segment increased $386,000, primarily reflecting an increase in employee compensation and health care costs of $232,000 and legal and professional costs of $69,000. Safety segment selling and general expenses decreased by $139,000 primarily reflecting decreased accruals for legal and professional expense of $346,000 and the absence of 2020 charges related to a product marketing campaign of $267,000 partially offset by an increase in employee compensation of $512,000.
The above items were responsible for the change in operating profit.
The $1,122,000 decrease in other income was primarily attributable to a decrease in interest income on marketable securities stemming from lower yields on a lower average daily investment.
Earnings before provision for income taxes decreased $13,258,000 from $42,076,000 to $28,818,000. The provision for income taxes decreased from $9,059,000 to $6,404,000, which resulted in an effective income tax rate of 22% in both 2021 and 2020. Net earnings decreased $10,603,000 from $33,017,000 to $22,414,000, or 32%.
Liquidity and Capital Resources
Net cash provided by operating activities was $14,569,000 and $8,264,000 for the nine months ended October 3, 2021 and September 27, 2020, respectively. The principal factors contributing to the increase can be found in the changes in the components of working capital within the Consolidated Statements of Cash Flows. Of particular note during the first nine months of 2021 were net earnings of $22,414,000, which included non-cash depreciation and amortization expenses of $2,228,000. Also contributing to the cash provided was a decrease in accounts receivable levels stemming from cash collections on customer sales and a net increase in payable and accrual levels, partially offset by increased inventory levels and a net increase in deposits made to vendors included in other assets and current assets. Of particular note during the first nine months of 2020 were net earnings of $33,017,000, which included non-cash depreciation and amortization expenses of $2,238,000. Also contributing to the cash provided was a net increase in payable and accrual levels, partially offset by increased inventory levels, deposits made to vendors included in other assets and current assets, and an increase in accounts receivable levels.
Net cash provided by investing activities was $33,950,000 during the first nine months of 2021 as compared to $1,744,000 used in investing activities during the first nine months of 2020. Significant factors contributing to the change were net maturities and sales of marketable securities in 2021 of $35,533,000, in contrast with net purchases of marketable securities in 2020 of $246,000. Also contributing to the change in cash was an increase in the purchase of property, plant, and equipment in 2021.
Net cash used in financing activities was $43,542,000 and $41,671,000, for the first nine months of 2021 and 2020, respectively, and primarily relate to the annual dividend payments. The extra dividend increased from $5.00 per share in 2020 to $5.25 per share in 2021. Cash flows for both nine-month periods also reflected the proceeds from the sale of treasury stock to a Company sponsored retirement plan.
Working capital decreased by $18,120,000 during the first nine months of 2021 to $284,028,000 at October 3, 2021 for the reasons stated above. The Company's current ratio was 5.6 to 1.0 at October 3, 2021 and 6.5 to 1.0 at December 31, 2020.
The Company expects to continue to evaluate acquisition opportunities that align with its business segments and will make further acquisitions, as well as continue to make capital investments in its business segments per existing authorized projects and for additional projects, if the appropriate return on investment is projected.
The Company has substantial liquidity in the form of cash and cash equivalents and marketable securities to meet all of its anticipated capital requirements, to make dividend payments, and to fund future growth through acquisitions and other means. The bulk of its marketable securities are invested in the tax exempt variable rate demand notes described above and in fixed rate municipal notes and bonds. The Company intends to continue its investment strategy of safety and short-term liquidity throughout its investment holdings.
Critical Accounting Policies
The preparation of the Company’s Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. The Company reviewed the development and selection of the critical accounting policies and believes the following are the most critical accounting policies that could have an effect on the Company’s reported results. These critical accounting policies and estimates have been reviewed with the Audit Committee of the Board of Directors.
Inventories
New Housewares/Small Appliance product introductions are an important part of the Company’s sales to offset the morbidity rate of other Housewares/Small Appliance products. New products entail unusual risks and have occasionally in the past resulted in losses related to obsolete or excess inventory as a result of low or diminishing demand for a product. There were no such obsolescence issues that had a material effect during the current period in the Housewares/Small Appliance and Safety segments, and accordingly, the Company did not record a reserve for obsolete product. In the future should product demand issues arise, the Company may incur losses related to the obsolescence of the related inventory. Inventory risk for the Company’s Defense segment is not deemed to be significant, as products are largely built pursuant to customers’ specific orders.
Self-Insured Product Liability and Health Insurance
The Company is subject to product liability claims in the normal course of business and is self-insured for health care costs, although it does carry stop loss and other insurance to cover claims once a health care claim reaches a specified threshold. The Company’s insurance coverage varies from policy year to policy year, and there are typically limits on all types of insurance coverage, which also vary from policy year to policy year. Accordingly, the Company records an accrual for known claims and incurred but not reported claims, including an estimate for related legal fees in the Company’s Consolidated Financial Statements. The Company utilizes historical trends and other analysis to assist in determining the appropriate accrual. There are no known claims that would have a material adverse impact on the Company beyond the reserve levels that have been accrued and recorded on the Company’s books and records. An increase in the number or magnitude of claims could have a material impact on the Company’s financial condition and results of operations.
Revenues
Sales are recorded net of discounts and returns for the Housewares/Small Appliance segment. Sales discounts and returns are key aspects of variable consideration, which is a significant estimate utilized in revenue recognition. Sales returns pertain primarily to warranty returns, returns of seasonal items, and returns of those newly introduced products sold with a return privilege. The calculation of warranty returns is based in large part on historical data, while seasonal and new product returns are primarily developed using customer provided information.
Impairment and Valuation of Long-lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Long-lived assets consist of property, plant and equipment and intangible assets. Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, the amounts of the cash flows and the asset’s residual value, if any. In turn, measurement of an impairment loss requires a determination of fair value, which is based on the best information available. The Company uses internal discounted cash flows estimates, quoted market prices when available, and independent appraisals, as appropriate, to determine fair value. The Company derives the required cash flow estimates from its historical experience and its internal business plans.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's interest income on cash equivalents and marketable securities is affected by changes in interest rates in the United States. Cash equivalents primarily consist of money market funds. Based on the accounting profession’s interpretation of cash equivalents under FASB ASC Topic 230, the Company’s seven-day variable rate demand notes are classified as marketable securities rather than as cash equivalents. The demand notes are highly liquid instruments with interest rates set every seven days that can be tendered to the trustee or remarketer upon seven days notice for payment of principal and accrued interest amounts. The seven-day tender feature of these variable rate demand notes is further supported by an irrevocable letter of credit from highly rated U.S. banks. To the extent a bond is not remarketed at par plus accrued interest, the difference is drawn from the bank’s letter of credit. The Company has had no issues tendering these notes to the trustees or remarketers. Other than a failure of a major U.S. bank, there are no risks of which the Company is aware that relate to these notes in the current market. The balance of the Company’s investments is held primarily in fixed and variable rate municipal bonds with a weighted average life of 0.6 years. Accordingly, changes in interest rates have not had a material effect on the Company, and the Company does not anticipate that future exposure to interest rate market risk will be material. The Company uses sensitivity analysis to determine its exposure to changes in interest rates.
The Company has no history of, and does not anticipate in the future, investing in derivative financial instruments. Most transactions with international customers are entered into in U.S. dollars, precluding the need for foreign currency cash flow hedges. As the majority of the Housewares/Small Appliance segment’s suppliers are located in China, periodic changes in the U.S. dollar and Chinese Renminbi (RMB) exchange rates do have an impact on that segment’s product costs. It is anticipated that any potential material impact from fluctuations in the exchange rate will be to the cost of products secured via purchase orders issued subsequent to the revaluation.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company’s management, including the Chief Executive Officer and Treasurer (principal financial officer), conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the “1934 Act”) as of October 3, 2021. Based on that evaluation, the Company’s Chief Executive Officer and Treasurer (principal financial officer) concluded that the Company’s disclosure controls and procedures were effective as of that date.
There were no changes to internal controls over financial reporting during the quarter ended October 3, 2021 that have materially affected or are reasonably likely to materially affect, the Company's internal control over financial reporting.
See Note J to the Consolidated Financial Statements set forth under Part I - Item 1 above.
In addition to the other information set forth in this report and the risk factor noted below, the risk factors discussed in Part I "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, could have a significant adverse impact on the business, financial condition or results of operations of the Company as a whole. Other than noted below, there have been no material changes to the Company's Risk Factors described in the 2020 Annual Report on Form 10-K.
The U.S. government's rules and regulations concerning mandatory COVID-19 vaccination of U.S.-based employees of companies that have 100 or more employees, could materially and adversely affect the Company's results of operations, financial condition and cash flows.
On September 9, 2021, President Biden issued an executive order requiring all employers with U.S. government contracts to ensure that their U.S.-based employees, contractors and subcontractors, that work on or in support of future U.S. government service contracts, are fully vaccinated against COVID-19 as required by the executive order. The executive order includes on-site and remote U.S.-based employees, contractors and subcontractors and provides for limited medical and religious exceptions. As most of the Defense segment's business pertains to the sale of supplies (i.e. ammunition), not services, the order is largely inapplicable.
In addition, on November 5, 2021, the Occupational Safety and Health Administration (OSHA) issued an Emergency Temporary Standard (ETS) mandating either the full vaccination against COVID-19 or weekly testing of employees for employers with 100 or more employees. Currently, the 5th Circuit of the U.S. Court of Appeals has issued a temporary stay of that order.
It is not possible to predict with certainty the impact the OSHA ETS will have on the Company's workforce. If the stay is lifted and the order is implemented, these requirements may result in attrition, including attrition of critically skilled labor, and difficulty securing future labor needs, which could materially and adversely affect the Company's results of operations, financial condition and cash flows.
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| Exhibit 3(ii) |
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| Exhibit 9.1 |
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| Exhibit 31.1 |
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| Exhibit 31.2 |
Certification of the Treasurer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| Exhibit 32.1 |
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Certification of the Treasurer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| Exhibit 101.INS |
eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| Exhibit 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| Exhibit 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document |
| Exhibit 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
| Exhibit 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| Exhibit 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| Exhibit 104 | The cover page from this Quarterly Report on Form 10-Q for the quarter ended October 3, 2021, formatted in Inline XBRL and contained in Exhibit 101.INS |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NATIONAL PRESTO INDUSTRIES, INC. |
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/s/ Maryjo Cohen |
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Maryjo Cohen, Chair of the Board, |
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President, Chief Executive Officer |
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(Principal Executive Officer), Director |
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/s/ David J. Peuse |
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David J. Peuse, Director of Financial Reporting and Treasurer, (Principal |
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Financial Officer) |
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Date: November 12, 2021 |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Maryjo Cohen, certify that:
1. I have reviewed this quarterly report on Form 10-Q of National Presto Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 12, 2021 |
/S/ |
Maryjo Cohen |
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Maryjo Cohen |
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Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David J. Peuse, certify that:
1. I have reviewed this quarterly report on Form 10-Q of National Presto Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 12, 2021 |
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David J. Peuse |
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David J. Peuse |
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Treasurer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. §1350 (as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002), I, the undersigned Chief Executive Officer of National Presto Industries, Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarterly period ended October 3, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.
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Date: November 12, 2021 |
/S/ |
Maryjo Cohen |
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Maryjo Cohen, |
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Chief Executive Officer |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. §1350 (as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002), I, the undersigned Treasurer of National Presto Industries, Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarterly period ended October 3, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.
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Date: November 12, 2021 |
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David J. Peuse |
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David J. Peuse |
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Treasurer |