Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 03, 2023 | |
Details | ||
Registrant CIK | 0000019871 | |
Fiscal Year End | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Entity File Number | 000-01227 | |
Entity Registrant Name | CHICAGO RIVET & MACHINE CO | |
Entity Incorporation, State or Country Code | IL | |
Entity Tax Identification Number | 36-0904920 | |
Entity Address, Address Line One | 901 Frontenac Road | |
Entity Address, City or Town | Naperville | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60563 | |
City Area Code | 630 | |
Local Phone Number | 357-8500 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | CVR | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 966,132 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 2,362,982 | $ 4,045,101 |
Certificates of deposit | 200,000 | 2,691,000 |
Accounts receivable - Less allowances of $146,000 and $160,000, respectively | 5,806,308 | 4,975,137 |
Inventories, net | 8,795,196 | 9,121,230 |
Prepaid income taxes | 616,520 | 509,119 |
Other current assets | 412,899 | 422,747 |
Total current assets | 18,193,905 | 21,764,334 |
Property, Plant and Equipment | ||
Land and improvements | 1,510,513 | 1,510,513 |
Buildings and improvements | 6,835,619 | 6,758,266 |
Production equipment and other | 37,890,318 | 37,080,762 |
Property, Plant and Equipment, Gross | 46,236,450 | 45,349,541 |
Less accumulated depreciation | 34,345,225 | 33,487,748 |
Net property, plant and equipment | 11,891,225 | 11,861,793 |
Total assets | 30,085,130 | 33,626,127 |
Current Liabilities | ||
Accounts payable | 1,007,802 | 697,235 |
Accrued wages and salaries | 778,941 | 462,332 |
Other accrued expenses | 147,475 | 327,961 |
Unearned revenue and customer deposits | 300,025 | 203,717 |
Total current liabilities | 2,234,243 | 1,691,245 |
Deferred income taxes | 244,485 | 948,084 |
Total liabilities | 2,478,728 | 2,639,329 |
Shareholders' Equity | ||
Preferred stock, no par value, 500,000 shares authorized: none outstanding | 0 | 0 |
Common stock, $1.00 par value, 4,000,000 shares authorized, 1,138,096 shares issued; 966,132 shares outstanding | 1,138,096 | 1,138,096 |
Additional paid-in capital | 447,134 | 447,134 |
Retained earnings | 29,943,270 | 33,323,666 |
Treasury stock, 171,964 shares at cost | (3,922,098) | (3,922,098) |
Total shareholders' equity | 27,606,402 | 30,986,798 |
Total liabilities and shareholders' equity | $ 30,085,130 | $ 33,626,127 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets - Parenthetical - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Condensed Consolidated Balance Sheets | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 146,000 | $ 160,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Preferred Stock, Shares Authorized | 500,000 | 500,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 |
Common Stock, Shares Authorized | 4,000,000 | 4,000,000 |
Common Stock, Shares, Issued | 1,138,096 | 1,138,096 |
Common Stock, Shares, Outstanding | 966,132 | 966,132 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Condensed Consolidated Statements of Operations (Unaudited) | ||||
Net sales | $ 7,946,172 | $ 8,567,785 | $ 24,726,828 | $ 26,788,879 |
Cost of goods sold | 7,905,019 | 7,447,877 | 24,537,208 | 22,366,372 |
Gross profit | 41,153 | 1,119,908 | 189,620 | 4,422,507 |
Operating (income) expenses | ||||
Selling and administrative expenses | 1,273,175 | 1,250,385 | 3,890,335 | 3,809,970 |
Gain on sale of property | 0 | (4,738,394) | 0 | (4,738,394) |
Total operating (income) expenses | 1,273,175 | (3,488,009) | 3,890,335 | (928,424) |
Operating profit (loss) | (1,232,022) | 4,607,917 | (3,700,715) | 5,350,931 |
Other income | 16,980 | 13,143 | 83,030 | 35,346 |
Income (loss) before income taxes | (1,215,042) | 4,621,060 | (3,617,685) | 5,386,277 |
Provision (benefit) for income taxes | (251,000) | 1,042,000 | (759,000) | 1,206,000 |
Net Income (loss) | $ (964,042) | $ 3,579,060 | $ (2,858,685) | $ 4,180,277 |
Per share data | ||||
Basic net income (loss) per share | $ (1) | $ 3.71 | $ (2.96) | $ 4.33 |
Diluted net income (loss) per share | $ (1) | $ 3.71 | $ (2.96) | $ 4.33 |
Basic | 966,132 | 966,132 | 966,132 | 966,132 |
Diluted | 966,132 | 966,132 | 966,132 | 966,132 |
Cash dividends declared per share | $ 0.10 | $ 0.22 | $ 0.54 | $ 0.66 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock, Common |
Beginning Balance at Dec. 31, 2021 | $ 28,969,365 | $ 0 | $ 1,138,096 | $ 447,134 | $ 31,306,233 | $ (3,922,098) |
Common Stock Shares at Dec. 31, 2021 | 966,132 | |||||
Treasury Stock Shares at Dec. 31, 2021 | 171,964 | |||||
Net Income (loss) | 447,313 | 447,313 | ||||
Dividends declared | (212,549) | (212,549) | ||||
Ending Balance at Mar. 31, 2022 | 29,204,129 | 0 | $ 1,138,096 | 447,134 | 31,540,997 | $ (3,922,098) |
Common Stock Shares at Mar. 31, 2022 | 966,132 | |||||
Treasury Stock Shares at Mar. 31, 2022 | 171,964 | |||||
Beginning Balance at Dec. 31, 2021 | 28,969,365 | 0 | $ 1,138,096 | 447,134 | 31,306,233 | $ (3,922,098) |
Common Stock Shares at Dec. 31, 2021 | 966,132 | |||||
Treasury Stock Shares at Dec. 31, 2021 | 171,964 | |||||
Net Income (loss) | 4,180,277 | |||||
Ending Balance at Sep. 30, 2022 | 32,511,995 | 0 | $ 1,138,096 | 447,134 | 34,848,863 | $ (3,922,098) |
Common Stock Shares at Sep. 30, 2022 | 966,132 | |||||
Treasury Stock Shares at Sep. 30, 2022 | 171,964 | |||||
Beginning Balance at Mar. 31, 2022 | 29,204,129 | 0 | $ 1,138,096 | 447,134 | 31,540,997 | $ (3,922,098) |
Common Stock Shares at Mar. 31, 2022 | 966,132 | |||||
Treasury Stock Shares at Mar. 31, 2022 | 171,964 | |||||
Net Income (loss) | 153,904 | 153,904 | ||||
Dividends declared | (212,549) | (212,549) | ||||
Ending Balance at Jun. 30, 2022 | 29,145,484 | 0 | $ 1,138,096 | 447,134 | 31,482,352 | $ (3,922,098) |
Common Stock Shares at Jun. 30, 2022 | 966,132 | |||||
Treasury Stock Shares at Jun. 30, 2022 | 171,964 | |||||
Net Income (loss) | 3,579,060 | 3,579,060 | ||||
Dividends declared | (212,549) | (212,549) | ||||
Ending Balance at Sep. 30, 2022 | 32,511,995 | 0 | $ 1,138,096 | 447,134 | 34,848,863 | $ (3,922,098) |
Common Stock Shares at Sep. 30, 2022 | 966,132 | |||||
Treasury Stock Shares at Sep. 30, 2022 | 171,964 | |||||
Beginning Balance at Dec. 31, 2022 | $ 30,986,798 | 0 | $ 1,138,096 | 447,134 | 33,323,666 | $ (3,922,098) |
Common Stock Shares at Dec. 31, 2022 | 966,132 | 966,132 | ||||
Treasury Stock Shares at Dec. 31, 2022 | 171,964 | |||||
Net Income (loss) | $ (583,137) | (583,137) | ||||
Dividends declared | (212,549) | (212,549) | ||||
Ending Balance at Mar. 31, 2023 | 30,191,112 | 0 | $ 1,138,096 | 447,134 | 32,527,980 | $ (3,922,098) |
Common Stock Shares at Mar. 31, 2023 | 966,132 | |||||
Treasury Stock Shares at Mar. 31, 2023 | 171,964 | |||||
Beginning Balance at Dec. 31, 2022 | $ 30,986,798 | 0 | $ 1,138,096 | 447,134 | 33,323,666 | $ (3,922,098) |
Common Stock Shares at Dec. 31, 2022 | 966,132 | 966,132 | ||||
Treasury Stock Shares at Dec. 31, 2022 | 171,964 | |||||
Net Income (loss) | $ (2,858,685) | |||||
Ending Balance at Sep. 30, 2023 | $ 27,606,402 | 0 | $ 1,138,096 | 447,134 | 29,943,270 | $ (3,922,098) |
Common Stock Shares at Sep. 30, 2023 | 966,132 | 966,132 | ||||
Treasury Stock Shares at Sep. 30, 2023 | 171,964 | |||||
Beginning Balance at Mar. 31, 2023 | $ 30,191,112 | 0 | $ 1,138,096 | 447,134 | 32,527,980 | $ (3,922,098) |
Common Stock Shares at Mar. 31, 2023 | 966,132 | |||||
Treasury Stock Shares at Mar. 31, 2023 | 171,964 | |||||
Net Income (loss) | (1,311,506) | (1,311,506) | ||||
Dividends declared | (212,549) | (212,549) | ||||
Ending Balance at Jun. 30, 2023 | 28,667,057 | 0 | $ 1,138,096 | 447,134 | 31,003,925 | $ (3,922,098) |
Common Stock Shares at Jun. 30, 2023 | 966,132 | |||||
Treasury Stock Shares at Jun. 30, 2023 | 171,964 | |||||
Net Income (loss) | (964,042) | (964,042) | ||||
Dividends declared | (96,613) | (96,613) | ||||
Ending Balance at Sep. 30, 2023 | $ 27,606,402 | $ 0 | $ 1,138,096 | $ 447,134 | $ 29,943,270 | $ (3,922,098) |
Common Stock Shares at Sep. 30, 2023 | 966,132 | 966,132 | ||||
Treasury Stock Shares at Sep. 30, 2023 | 171,964 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - Parenthetical - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) | ||||||||
Cash dividends declared per share | $ 0.10 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.54 | $ 0.66 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net Income (loss) | $ (2,858,685) | $ 4,180,277 |
Adjustments to reconcile net income (loss) to net cash used in operating activities | ||
Depreciation | 920,430 | 960,139 |
Gain on sale of property and equipment | (31,500) | (4,736,096) |
Deferred income taxes | (703,599) | (26,000) |
Changes in operating assets and liabilities | ||
Accounts receivable | (831,171) | (930,130) |
Inventories | 326,034 | (1,401,692) |
Other current assets | (97,553) | (75,326) |
Accounts payable | 310,567 | 204,795 |
Accrued wages and salaries | 316,609 | 328,698 |
Other accrued expenses | (180,486) | 1,209,687 |
Unearned revenue and customer deposits | 96,308 | (127,094) |
Net cash used in operating activities | (2,733,046) | (412,742) |
Cash flows from investing activities | ||
Capital expenditures | (949,862) | (696,073) |
Proceeds from the sale of property | 31,500 | 5,038,240 |
Proceeds from certificates of deposit | 2,591,000 | 1,245,000 |
Purchases of certificates of deposit | (100,000) | (1,245,000) |
Net cash provided by investing activities | 1,572,638 | 4,342,167 |
Cash flows from financing activities | ||
Cash dividends paid | (521,711) | (637,647) |
Net cash used in financing activities | (521,711) | (637,647) |
Net increase (decrease) in cash and cash equivalents | (1,682,119) | 3,291,778 |
Cash and cash equivalents at beginning of period | 4,045,101 | 2,036,954 |
Cash and cash equivalents at end of period | $ 2,362,982 | $ 5,328,732 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Notes | |
Accounting Policies | 1. In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 2023 (unaudited) and December 31, 2022 (audited) and the results of operations and changes in cash flows for the indicated periods. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules. Please refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the nine month period ended September 30, 2023 are not necessarily indicative of the results to be expected for the year. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in November 2018 issued an amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 and ASU 2018-19 should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this ASU on January 1, 2023, using the modified retrospective approach. The adoption did not result in the recognition of a cumulative adjustment to beginning retained earnings, nor did it have a material impact on the condensed consolidated financial statements. |
Risks and Uncertainties
Risks and Uncertainties | 9 Months Ended |
Sep. 30, 2023 | |
Notes | |
Risks and Uncertainties | 2. The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily in the automotive industry. The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States. The Company has established an allowance for accounts that may become uncollectible in the future. This estimated allowance is based in part on management's evaluation of the financial condition of the customer and historical experience. The Company monitors its accounts receivable and charges to expense an amount equal to its estimate of potential credit losses. The Company considers a number of factors in determining its estimates, including the length of time its trade accounts receivable are past due, the Company's previous loss history and the customer's current ability to pay its obligation. The Company also considers current economic conditions, the economic outlook and industry-specific factors in its evaluation. Accounts receivable balances are charged off against the allowance when it is determined that the receivable will not be recovered. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Notes | |
Commitments and Contingencies | 3. The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, in the normal course of business. While it is not possible at this time to establish the ultimate amount of liability with respect to contingent liabilities, including those related to legal proceedings, management is of the opinion that the aggregate amount of any such liabilities, for which provision has not been made, will not have a material adverse effect on the Company's financial position. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Notes | |
Revenue | 4. Revenue—The Company operates in the fastener industry and is in the business of manufacturing and selling rivets, cold-formed fasteners and parts, screw machine products, automatic rivet setting machines and parts and tools for such machines. Revenue is recognized when control of the promised goods or services is transferred to our customers, generally upon shipment of goods or completion of services, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. For certain assembly equipment segment transactions, revenue is recognized based on progress toward completion of the performance obligation using a labor-based measure. Labor incurred and specific material costs are compared to milestone payments per sales contract. Based on our experience, this method most accurately reflects the transfer of goods under such contracts. During the third quarter of 2023, the Company realized revenue of $161,594 related to such contracts and has a remaining performance obligation of $303,906 which is expected to be recognized over the next six months. Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue. Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of income. These adjustments primarily relate to customer returns and allowances. The Company records a liability and reduction in sales for estimated product returns based upon historical experience. If we determine that our obligation under warranty claims is probable and subject to reasonable determination, an estimate of that liability is recorded as an offset against revenue at that time. As of September 30, 2023 and December 31, 2022 reserves for warranty claims were not material. Cash received by the Company prior to transfer of control is recorded as unearned revenue. Shipping and handling fees billed to customers are recognized in net sales, and related costs as cost of sales, when incurred. Sales commissions are expensed when incurred because the amortization period is less than one year. These costs are recorded within selling and administrative expenses in the statement of income. The following table presents revenue by segment, further disaggregated by end-market: Fastener Assembly Equipment Consolidated Three Months Ended September 30, 2023: Automotive $ 5,184,547 $ 12,363 $ 5,196,910 Non-automotive 1,792,894 956,368 2,749,262 Total net sales $ 6,977,441 $ 968,731 $ 7,946,172 Three Months Ended September 30, 2022: Automotive $ 4,813,646 $ 45,012 $ 4,858,658 Non-automotive 2,991,976 717,151 3,709,127 Total net sales $ 7,805,622 $ 762,163 $ 8,567,785 Nine Months Ended September 30, 2023: Automotive $ 15,150,117 $ 95,464 $ 15,245,581 Non-automotive 7,045,250 2,435,997 9,481,247 Total net sales $ 22,195,367 $ 2,531,461 $ 24,726,828 Nine Months Ended September 30, 2022: Automotive $ 14,268,638 $ 146,663 $ 14,415,301 Non-automotive 9,750,429 2,623,149 12,373,578 Total net sales $ 24,019,067 $ 2,769,812 $ 26,788,879 The following table presents revenue by segment, further disaggregated by location: Fastener Assembly Equipment Consolidated Three Months Ended September 30, 2023: United States $ 5,398,688 $ 961,618 $ 6,360,306 Foreign 1,578,753 7,113 1,585,866 Total net sales $ 6,977,441 $ 968,731 $ 7,946,172 Three Months Ended September 30, 2022: United States $ 6,268,813 $ 696,856 $ 6,965,669 Foreign 1,536,809 65,307 1,602,116 Total net sales $ 7,805,622 $ 762,163 $ 8,567,785 Nine Months Ended September 30, 2023: United States $ 17,927,910 $ 2,402,734 $ 20,248,872 Foreign 4,267,457 128,727 4,477,956 Total net sales $ 22,195,367 $ 2,531,461 $ 24,726,828 Nine Months Ended September 30, 2022: United States $ 19,825,721 $ 2,633,475 $ 22,459,196 Foreign 4,193,346 136,337 4,329,683 Total net sales $ 24,019,067 $ 2,769,812 $ 26,788,879 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Notes | |
Income Taxes | 5. The Company’s effective tax rates were approximately (20.7)% and 22.5% for the third quarter of 2023 and 2022, respectively, and (21.0)% and 22.4% for the nine months ended September 30, 2023 and 2022, respectively. The Company’s federal income tax returns for the 2020, 2021 and 2022 tax years are subject to examination by the Internal Revenue Service (“IRS”). While it may be possible that a reduction could occur with respect to the Company’s unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a material change to the results of operations or financial condition of the Company. No statutes have been extended on any of the Company’s federal income tax filings. The statute of limitations on the Company’s 2020, 2021 and 2022 federal income tax returns will expire on September 15, 2024, 2025 and 2026, respectively. The Company’s state income tax returns for the 2020 through 2022 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2026. The Company is not currently under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Notes | |
Inventories | 6. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method. A summary of inventories is as follows: September 30, 2023 December 31, 2022 Raw material $ 3,460,660 $ 4,460,071 Work-in-process 3,073,621 2,747,427 Finished goods 2,801,915 2,534,732 Inventories, gross 9,336,196 9,742,230 Valuation reserves (541,000) (621,000) Inventories, net $ 8,795,196 $ 9,121,230 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2023 | |
Notes | |
Segment Reporting | 7. Segment Information—The Company operates in two business segments as determined by its products. The fastener segment includes rivets, cold-formed fasteners and parts and screw machine products. The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines. Information by segment is as follows: Fastener Assembly Equipment Other Consolidated Three Months Ended September 30, 2023: Net sales $ 6,977,441 $ 968,731 0 $ 7,946,172 Depreciation 276,989 30,732 602 308,323 Segment operating loss (773,213) 166,927 0 (606,286) Selling and administrative expenses 0 0 (625,701) (625,701) Interest income 0 0 16,945 16,945 Loss before income taxes $ (1,215,042) Capital expenditures 189,614 0 0 189,614 Segment assets: Accounts receivable, net 5,410,548 395,760 0 5,806,308 Inventories, net 7,269,490 1,525,706 0 8,795,196 Property, plant and equipment, net 9,672,334 1,211,301 1,007,590 11,891,225 Other assets 0 0 3,592,401 3,592,401 $ 30,085,130 Three Months Ended September 30, 2022: Net sales $ 7,805,622 $ 762,163 0 $ 8,567,785 Depreciation 281,842 33,363 4,086 319,291 Segment operating profit 350,536 92,977 0 443,513 Selling and administrative expenses 0 0 (565,740) (565,740) Gain on sale of property 0 0 4,738,394 4,738,394 Interest income 0 0 4,893 4,893 Income before income taxes $ 4,621,060 Capital expenditures 462,445 0 21,925 484,370 Segment assets: Accounts receivable, net 6,185,810 392,304 0 6,578,114 Inventories, net 8,549,836 1,371,636 0 9,921,472 Property, plant and equipment, net 9,575,293 1,333,816 998,545 11,907,654 Other assets 0 0 8,491,734 8,491,734 $ 36,898,974 Nine Months Ended September 30, 2023: Net sales $ 22,195,367 $ 2,531,461 0 $ 24,726,828 Depreciation 822,304 92,196 5,930 920,430 Segment operating loss (2,294,932) 443,408 0 (1,851,524) Selling and administrative expenses 0 0 (1,845,437) (1,845,437) Interest income 0 0 79,276 79,276 Loss before income taxes $ (3,617,685) Capital expenditures 932,309 0 17,553 949,862 Nine Months Ended September 30, 2022: Net sales $ 24,019,067 $ 2,769,812 0 $ 26,788,879 Depreciation 845,524 100,089 14,526 960,139 Segment operating profit 1,685,574 516,367 0 2,201,941 Selling and administrative expenses 0 0 (1,562,804) (1,562,804) Gain on sale of property 0 0 4,738,394 4,738,394 Interest income 0 0 8,746 8,746 Income before income taxes $ 5,386,277 Capital expenditures 597,991 0 98,082 696,073 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies | 1. In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 2023 (unaudited) and December 31, 2022 (audited) and the results of operations and changes in cash flows for the indicated periods. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules. Please refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the nine month period ended September 30, 2023 are not necessarily indicative of the results to be expected for the year. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in November 2018 issued an amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 and ASU 2018-19 should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this ASU on January 1, 2023, using the modified retrospective approach. The adoption did not result in the recognition of a cumulative adjustment to beginning retained earnings, nor did it have a material impact on the condensed consolidated financial statements. |
Risks and Uncertainties | 2. The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily in the automotive industry. The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States. The Company has established an allowance for accounts that may become uncollectible in the future. This estimated allowance is based in part on management's evaluation of the financial condition of the customer and historical experience. The Company monitors its accounts receivable and charges to expense an amount equal to its estimate of potential credit losses. The Company considers a number of factors in determining its estimates, including the length of time its trade accounts receivable are past due, the Company's previous loss history and the customer's current ability to pay its obligation. The Company also considers current economic conditions, the economic outlook and industry-specific factors in its evaluation. Accounts receivable balances are charged off against the allowance when it is determined that the receivable will not be recovered. |
Commitments and Contingencies | 3. The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, in the normal course of business. While it is not possible at this time to establish the ultimate amount of liability with respect to contingent liabilities, including those related to legal proceedings, management is of the opinion that the aggregate amount of any such liabilities, for which provision has not been made, will not have a material adverse effect on the Company's financial position. |
Revenue | 4. Revenue—The Company operates in the fastener industry and is in the business of manufacturing and selling rivets, cold-formed fasteners and parts, screw machine products, automatic rivet setting machines and parts and tools for such machines. Revenue is recognized when control of the promised goods or services is transferred to our customers, generally upon shipment of goods or completion of services, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. For certain assembly equipment segment transactions, revenue is recognized based on progress toward completion of the performance obligation using a labor-based measure. Labor incurred and specific material costs are compared to milestone payments per sales contract. Based on our experience, this method most accurately reflects the transfer of goods under such contracts. During the third quarter of 2023, the Company realized revenue of $161,594 related to such contracts and has a remaining performance obligation of $303,906 which is expected to be recognized over the next six months. Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue. Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of income. These adjustments primarily relate to customer returns and allowances. The Company records a liability and reduction in sales for estimated product returns based upon historical experience. If we determine that our obligation under warranty claims is probable and subject to reasonable determination, an estimate of that liability is recorded as an offset against revenue at that time. As of September 30, 2023 and December 31, 2022 reserves for warranty claims were not material. Cash received by the Company prior to transfer of control is recorded as unearned revenue. Shipping and handling fees billed to customers are recognized in net sales, and related costs as cost of sales, when incurred. Sales commissions are expensed when incurred because the amortization period is less than one year. These costs are recorded within selling and administrative expenses in the statement of income. |
Income Taxes | 5. The Company’s effective tax rates were approximately (20.7)% and 22.5% for the third quarter of 2023 and 2022, respectively, and (21.0)% and 22.4% for the nine months ended September 30, 2023 and 2022, respectively. The Company’s federal income tax returns for the 2020, 2021 and 2022 tax years are subject to examination by the Internal Revenue Service (“IRS”). While it may be possible that a reduction could occur with respect to the Company’s unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a material change to the results of operations or financial condition of the Company. No statutes have been extended on any of the Company’s federal income tax filings. The statute of limitations on the Company’s 2020, 2021 and 2022 federal income tax returns will expire on September 15, 2024, 2025 and 2026, respectively. The Company’s state income tax returns for the 2020 through 2022 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2026. The Company is not currently under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended. |
Inventories | 6. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method. |
Segment Reporting | 7. Segment Information—The Company operates in two business segments as determined by its products. The fastener segment includes rivets, cold-formed fasteners and parts and screw machine products. The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines. |
Revenue_ Disaggregation of Reve
Revenue: Disaggregation of Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Location | |
Disaggregation of Revenue | Fastener Assembly Equipment Consolidated Three Months Ended September 30, 2023: United States $ 5,398,688 $ 961,618 $ 6,360,306 Foreign 1,578,753 7,113 1,585,866 Total net sales $ 6,977,441 $ 968,731 $ 7,946,172 Three Months Ended September 30, 2022: United States $ 6,268,813 $ 696,856 $ 6,965,669 Foreign 1,536,809 65,307 1,602,116 Total net sales $ 7,805,622 $ 762,163 $ 8,567,785 Nine Months Ended September 30, 2023: United States $ 17,927,910 $ 2,402,734 $ 20,248,872 Foreign 4,267,457 128,727 4,477,956 Total net sales $ 22,195,367 $ 2,531,461 $ 24,726,828 Nine Months Ended September 30, 2022: United States $ 19,825,721 $ 2,633,475 $ 22,459,196 Foreign 4,193,346 136,337 4,329,683 Total net sales $ 24,019,067 $ 2,769,812 $ 26,788,879 |
End Market | |
Disaggregation of Revenue | Fastener Assembly Equipment Consolidated Three Months Ended September 30, 2023: Automotive $ 5,184,547 $ 12,363 $ 5,196,910 Non-automotive 1,792,894 956,368 2,749,262 Total net sales $ 6,977,441 $ 968,731 $ 7,946,172 Three Months Ended September 30, 2022: Automotive $ 4,813,646 $ 45,012 $ 4,858,658 Non-automotive 2,991,976 717,151 3,709,127 Total net sales $ 7,805,622 $ 762,163 $ 8,567,785 Nine Months Ended September 30, 2023: Automotive $ 15,150,117 $ 95,464 $ 15,245,581 Non-automotive 7,045,250 2,435,997 9,481,247 Total net sales $ 22,195,367 $ 2,531,461 $ 24,726,828 Nine Months Ended September 30, 2022: Automotive $ 14,268,638 $ 146,663 $ 14,415,301 Non-automotive 9,750,429 2,623,149 12,373,578 Total net sales $ 24,019,067 $ 2,769,812 $ 26,788,879 |
Inventories_ Inventories (Table
Inventories: Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Tables/Schedules | |
Inventories | September 30, 2023 December 31, 2022 Raw material $ 3,460,660 $ 4,460,071 Work-in-process 3,073,621 2,747,427 Finished goods 2,801,915 2,534,732 Inventories, gross 9,336,196 9,742,230 Valuation reserves (541,000) (621,000) Inventories, net $ 8,795,196 $ 9,121,230 |
Segment Reporting_ Schedule of
Segment Reporting: Schedule of Segment Reporting by Segment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Tables/Schedules | |
Schedule of Segment Reporting by Segment | Fastener Assembly Equipment Other Consolidated Three Months Ended September 30, 2023: Net sales $ 6,977,441 $ 968,731 0 $ 7,946,172 Depreciation 276,989 30,732 602 308,323 Segment operating loss (773,213) 166,927 0 (606,286) Selling and administrative expenses 0 0 (625,701) (625,701) Interest income 0 0 16,945 16,945 Loss before income taxes $ (1,215,042) Capital expenditures 189,614 0 0 189,614 Segment assets: Accounts receivable, net 5,410,548 395,760 0 5,806,308 Inventories, net 7,269,490 1,525,706 0 8,795,196 Property, plant and equipment, net 9,672,334 1,211,301 1,007,590 11,891,225 Other assets 0 0 3,592,401 3,592,401 $ 30,085,130 Three Months Ended September 30, 2022: Net sales $ 7,805,622 $ 762,163 0 $ 8,567,785 Depreciation 281,842 33,363 4,086 319,291 Segment operating profit 350,536 92,977 0 443,513 Selling and administrative expenses 0 0 (565,740) (565,740) Gain on sale of property 0 0 4,738,394 4,738,394 Interest income 0 0 4,893 4,893 Income before income taxes $ 4,621,060 Capital expenditures 462,445 0 21,925 484,370 Segment assets: Accounts receivable, net 6,185,810 392,304 0 6,578,114 Inventories, net 8,549,836 1,371,636 0 9,921,472 Property, plant and equipment, net 9,575,293 1,333,816 998,545 11,907,654 Other assets 0 0 8,491,734 8,491,734 $ 36,898,974 Nine Months Ended September 30, 2023: Net sales $ 22,195,367 $ 2,531,461 0 $ 24,726,828 Depreciation 822,304 92,196 5,930 920,430 Segment operating loss (2,294,932) 443,408 0 (1,851,524) Selling and administrative expenses 0 0 (1,845,437) (1,845,437) Interest income 0 0 79,276 79,276 Loss before income taxes $ (3,617,685) Capital expenditures 932,309 0 17,553 949,862 Nine Months Ended September 30, 2022: Net sales $ 24,019,067 $ 2,769,812 0 $ 26,788,879 Depreciation 845,524 100,089 14,526 960,139 Segment operating profit 1,685,574 516,367 0 2,201,941 Selling and administrative expenses 0 0 (1,562,804) (1,562,804) Gain on sale of property 0 0 4,738,394 4,738,394 Interest income 0 0 8,746 8,746 Income before income taxes $ 5,386,277 Capital expenditures 597,991 0 98,082 696,073 |
Revenue_ Revenue (Details)
Revenue: Revenue (Details) | 3 Months Ended |
Sep. 30, 2023 USD ($) | |
Details | |
Revenue Recognized, Performance Obligation | $ 161,594 |
Revenue, Remaining Performance Obligation | $ 303,906 |
Revenue_ Disaggregation of Re_2
Revenue: Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | $ 7,946,172 | $ 8,567,785 | $ 24,726,828 | $ 26,788,879 |
UNITED STATES | ||||
Revenue | 6,360,306 | 6,965,669 | 20,248,872 | 22,459,196 |
Non-US | ||||
Revenue | 1,585,866 | 1,602,116 | 4,477,956 | 4,329,683 |
Automotive | ||||
Revenue | 5,196,910 | 4,858,658 | 15,245,581 | 14,415,301 |
Nonautomotive | ||||
Revenue | 2,749,262 | 3,709,127 | 9,481,247 | 12,373,578 |
Fastener | ||||
Revenue | 6,977,441 | 7,805,622 | 22,195,367 | 24,019,067 |
Fastener | UNITED STATES | ||||
Revenue | 5,398,688 | 6,268,813 | 17,927,910 | 19,825,721 |
Fastener | Non-US | ||||
Revenue | 1,578,753 | 1,536,809 | 4,267,457 | 4,193,346 |
Fastener | Automotive | ||||
Revenue | 5,184,547 | 4,813,646 | 15,150,117 | 14,268,638 |
Fastener | Nonautomotive | ||||
Revenue | 1,792,894 | 2,991,976 | 7,045,250 | 9,750,429 |
Assembly Equipment | ||||
Revenue | 968,731 | 762,163 | 2,531,461 | 2,769,812 |
Assembly Equipment | UNITED STATES | ||||
Revenue | 961,618 | 696,856 | 2,402,734 | 2,633,475 |
Assembly Equipment | Non-US | ||||
Revenue | 7,113 | 65,307 | 128,727 | 136,337 |
Assembly Equipment | Automotive | ||||
Revenue | 12,363 | 45,012 | 95,464 | 146,663 |
Assembly Equipment | Nonautomotive | ||||
Revenue | $ 956,368 | $ 717,151 | $ 2,435,997 | $ 2,623,149 |
Inventories_ Inventories (Detai
Inventories: Inventories (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Details | ||
Raw material | $ 3,460,660 | $ 4,460,071 |
Work-in-process | 3,073,621 | 2,747,427 |
Finished goods | 2,801,915 | 2,534,732 |
Inventories, gross | 9,336,196 | 9,742,230 |
Valuation reserves | (541,000) | (621,000) |
Inventories, net | $ 8,795,196 | $ 9,121,230 |
Segment Reporting_ Schedule o_2
Segment Reporting: Schedule of Segment Reporting by Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Net sales | $ 7,946,172 | $ 8,567,785 | $ 24,726,828 | $ 26,788,879 | |
Depreciation | 920,430 | 960,139 | |||
Accounts receivable - Less allowances of $146,000 and $160,000, respectively | 5,806,308 | 5,806,308 | $ 4,975,137 | ||
Inventories, net | 8,795,196 | 8,795,196 | 9,121,230 | ||
Net property, plant and equipment | 11,891,225 | 11,891,225 | $ 11,861,793 | ||
Gain on sale of property | 0 | 4,738,394 | 0 | 4,738,394 | |
Fastener | |||||
Net sales | 6,977,441 | 7,805,622 | 22,195,367 | 24,019,067 | |
Depreciation | 276,989 | 281,842 | 822,304 | 845,524 | |
Segment operating profit | (773,213) | 350,536 | (2,294,932) | 1,685,574 | |
Selling and Administrative Expenses | 0 | 0 | 0 | 0 | |
Interest income | 0 | 0 | 0 | 0 | |
Capital expenditures | 189,614 | 462,445 | 932,309 | 597,991 | |
Accounts receivable - Less allowances of $146,000 and $160,000, respectively | 5,410,548 | 6,185,810 | 5,410,548 | 6,185,810 | |
Inventories, net | 7,269,490 | 8,549,836 | 7,269,490 | 8,549,836 | |
Net property, plant and equipment | 9,672,334 | 9,575,293 | 9,672,334 | 9,575,293 | |
Other Assets | 0 | 0 | 0 | 0 | |
Gain on sale of property | 0 | 0 | |||
Assembly Equipment | |||||
Net sales | 968,731 | 762,163 | 2,531,461 | 2,769,812 | |
Depreciation | 30,732 | 33,363 | 92,196 | 100,089 | |
Segment operating profit | 166,927 | 92,977 | 443,408 | 516,367 | |
Selling and Administrative Expenses | 0 | 0 | 0 | 0 | |
Interest income | 0 | 0 | 0 | 0 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Accounts receivable - Less allowances of $146,000 and $160,000, respectively | 395,760 | 392,304 | 395,760 | 392,304 | |
Inventories, net | 1,525,706 | 1,371,636 | 1,525,706 | 1,371,636 | |
Net property, plant and equipment | 1,211,301 | 1,333,816 | 1,211,301 | 1,333,816 | |
Other Assets | 0 | 0 | 0 | 0 | |
Gain on sale of property | 0 | 0 | |||
Unallocated Corporate | |||||
Net sales | 0 | 0 | 0 | 0 | |
Depreciation | 602 | 4,086 | 5,930 | 14,526 | |
Segment operating profit | 0 | 0 | 0 | 0 | |
Selling and Administrative Expenses | (625,701) | (565,740) | (1,845,437) | (1,562,804) | |
Interest income | 16,945 | 4,893 | 79,276 | 8,746 | |
Capital expenditures | 0 | 21,925 | 17,553 | 98,082 | |
Accounts receivable - Less allowances of $146,000 and $160,000, respectively | 0 | 0 | 0 | 0 | |
Inventories, net | 0 | 0 | 0 | 0 | |
Net property, plant and equipment | 1,007,590 | 998,545 | 1,007,590 | 998,545 | |
Other Assets | $ 3,592,401 | 8,491,734 | $ 3,592,401 | 8,491,734 | |
Gain on sale of property | $ 4,738,394 | $ 4,738,394 |