Chicago Rivet & Machine (CVR) 10-Q 8 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 02, 2019
Details
Registrant CIK	0000019871
Fiscal Year End	--12-31
Registrant Name	Chicago Rivet & Machine Co.
SEC Form	10-Q
Period End date	Jun. 30, 2019
Number of common stock shares outstanding		966,132
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Interactive Data Current	Yes
Shell Company	false
Small Business	true
Emerging Growth Company	false
Entity File Number	000-01227
Entity Incorporation, State or Country Code	IL
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
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Document Quarterly Report	true
Document Transition Report	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current Assets:
Cash and cash equivalents	$ 908,075	$ 706,873
Certificates of deposit	5,578,000	7,063,000
Accounts receivable - Less allowances of $140,000	5,787,355	5,529,307
Inventories, net	6,098,823	6,100,391
Prepaid income taxes	117,186	150,686
Other current assets	399,607	438,222
Total current assets	18,889,046	19,988,479
Property, Plant and Equipment:
Land and improvements	1,636,749	1,632,299
Buildings and improvements	8,327,006	8,234,182
Production equipment and other	36,455,435	35,627,443
Property, Plant and Equipment, Gross	46,419,190	45,493,924
Less accumulated depreciation	32,550,682	32,235,778
Net property, plant and equipment	13,868,508	13,258,146
Total assets	32,757,554	33,246,625
Current Liabilities:
Accounts payable	803,921	1,060,231
Accrued wages and salaries	962,653	701,434
Other accrued expenses	280,605	475,973
Unearned revenue and customer deposits	150,079	328,154
Total current liabilities	2,197,258	2,565,792
Deferred income taxes	999,084	921,084
Total liabilities	3,196,342	3,486,876
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	31,898,080	32,096,617
Treasury stock, 171,964 shares at cost	(3,922,098)	(3,922,098)
Total shareholders' equity	29,561,212	29,759,749
Total liabilities and shareholders' equity	$ 32,757,554	$ 33,246,625

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) - Parenthetical - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Accounts Receivable, Allowance for Credit Loss, Current	$ 140,000	$ 140,000
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
Treasury Stock, Shares	171,964	171,964

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Condensed Consolidated Statements of Income (Unaudited)
Net sales	$ 8,875,451	$ 9,792,784	$ 17,497,129	$ 19,804,425
Cost of goods sold	7,327,481	7,504,350	14,287,396	15,172,986
Gross profit	1,547,970	2,288,434	3,209,733	4,631,439
Selling and administrative expenses	1,306,665	1,411,969	2,649,361	2,876,687
Operating profit	241,305	876,465	560,372	1,754,752
Other income	49,254	37,627	98,029	71,128
Income before income taxes	290,559	914,092	658,401	1,825,880
Provision for income taxes	61,000	211,000	142,000	415,000
Net income	$ 229,559	$ 703,092	$ 516,401	$ 1,410,880
Per share data, basic and diluted:
Net income per share	$ 0.24	$ 0.73	$ 0.54	$ 1.46
Average common shares outstanding	966,132	966,132	966,132	966,132
Cash dividends declared per share	$ 0.22	$ 0.21	$ 0.74	$ 0.72

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
Beginning Balance at Dec. 31, 2017	$ 28,859,955	$ 0	$ 1,138,096	$ 447,134	$ 31,196,823	$ (3,922,098)
Common Stock Shares at Dec. 31, 2017			966,132
Treasury Stock Shares at Dec. 31, 2017						171,964
Net Income	707,788				707,788
Dividends Declared	(492,727)				(492,727)
Ending Balance at Mar. 31, 2018	29,075,016	0	$ 1,138,096	447,134	31,411,884	$ (3,922,098)
Common Stock Shares at Mar. 31, 2018			966,132
Treasury Stock Shares at Mar. 31, 2018						171,964
Beginning Balance at Dec. 31, 2017	28,859,955	0	$ 1,138,096	447,134	31,196,823	$ (3,922,098)
Common Stock Shares at Dec. 31, 2017			966,132
Treasury Stock Shares at Dec. 31, 2017						171,964
Net Income	1,410,880
Ending Balance at Jun. 30, 2018	29,575,220	0	$ 1,138,096	447,134	31,912,088	$ (3,922,098)
Common Stock Shares at Jun. 30, 2018			966,132
Treasury Stock Shares at Jun. 30, 2018						171,964
Beginning Balance at Mar. 31, 2018	29,075,016	0	$ 1,138,096	447,134	31,411,884	$ (3,922,098)
Common Stock Shares at Mar. 31, 2018			966,132
Treasury Stock Shares at Mar. 31, 2018						171,964
Net Income	703,092				703,092
Dividends Declared	(202,888)				(202,888)
Ending Balance at Jun. 30, 2018	29,575,220	0	$ 1,138,096	447,134	31,912,088	$ (3,922,098)
Common Stock Shares at Jun. 30, 2018			966,132
Treasury Stock Shares at Jun. 30, 2018						171,964
Beginning Balance at Dec. 31, 2018	$ 29,759,749	0	$ 1,138,096	447,134	32,096,617	$ (3,922,098)
Common Stock Shares at Dec. 31, 2018	966,132		966,132
Treasury Stock Shares at Dec. 31, 2018	171,964					171,964
Net Income	$ 286,842				286,842
Dividends Declared	(502,389)				(502,389)
Ending Balance at Mar. 31, 2019	29,544,202	0	$ 1,138,096	447,134	31,881,070	$ (3,922,098)
Common Stock Shares at Mar. 31, 2019			966,132
Treasury Stock Shares at Mar. 31, 2019						171,964
Beginning Balance at Dec. 31, 2018	$ 29,759,749	0	$ 1,138,096	447,134	32,096,617	$ (3,922,098)
Common Stock Shares at Dec. 31, 2018	966,132		966,132
Treasury Stock Shares at Dec. 31, 2018	171,964					171,964
Net Income	$ 516,401
Ending Balance at Jun. 30, 2019	$ 29,561,212	0	$ 1,138,096	447,134	31,898,080	$ (3,922,098)
Common Stock Shares at Jun. 30, 2019	966,132		966,132
Treasury Stock Shares at Jun. 30, 2019	171,964					171,964
Beginning Balance at Mar. 31, 2019	$ 29,544,202	0	$ 1,138,096	447,134	31,881,070	$ (3,922,098)
Common Stock Shares at Mar. 31, 2019			966,132
Treasury Stock Shares at Mar. 31, 2019						171,964
Net Income	229,559				229,559
Dividends Declared	(212,549)				(212,549)
Ending Balance at Jun. 30, 2019	$ 29,561,212	$ 0	$ 1,138,096	$ 447,134	$ 31,898,080	$ (3,922,098)
Common Stock Shares at Jun. 30, 2019	966,132		966,132
Treasury Stock Shares at Jun. 30, 2019	171,964					171,964

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - Parenthetical - $ / shares	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Details
Cash dividends declared per share	$ 0.22	$ 0.52	$ 0.21	$ 0.51	$ 0.74	$ 0.72

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net Income	$ 516,401	$ 1,410,880
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	682,667	653,537
Gain on disposal of equipment	(5,000)	(17,485)
Deferred income taxes	78,000	(27,000)
Changes in operating assets and liabilities:
Accounts receivable	(258,048)	(1,580,776)
Inventories	1,568	(922,121)
Other current assets and prepaid income taxes	72,115	111,554
Accounts payable	(265,603)	779,782
Accrued wages and salaries	261,219	246,972
Other accrued expenses	(195,368)	137,353
Unearned revenue and customer deposits	(178,075)	(91,205)
Net cash provided by operating activities	709,876	701,491
Cash flows from investing activities:
Capital expenditures	(1,283,736)	(635,718)
Proceeds from the sale of equipment	5,000	17,485
Proceeds from certificates of deposit	4,324,000	1,992,000
Purchases of certificates of deposit	(2,839,000)	(1,245,000)
Net cash provided by investing activities	206,264	128,767
Cash flows from financing activities:
Cash dividends paid	(714,938)	(695,615)
Net cash used in financing activities	(714,938)	(695,615)
Net increase in cash and cash equivalents	201,202	134,643
Cash and cash equivalents at beginning of period	706,873	1,152,569
Cash and cash equivalents at end of period	908,075	1,287,212
Supplemental schedule of non-cash investing activities:
Capital expenditures in accounts payable	$ 9,293	$ 0

Accounting Policies

Accounting Policies	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019 (unaudited) and December 31, 2018 (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, 2018. 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 three and six-month period ending June 30, 2019 are not necessarily indicative of the results to be expected for the year. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842).” The ASU increases transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU requires lessees to recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The ASU is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those annual periods. The Company adopted Topic 842 on January 1, 2019 using the modified retrospective method. Based on the Company’s current lease agreements, adopting this ASU did not have a material impact on the Company’s financial statements.

Risks and Uncertainties

Risks and Uncertainties	6 Months Ended
	Jun. 30, 2019
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.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2019
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	6 Months Ended
	Jun. 30, 2019
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 second quarter of 2019, the Company realized $219,700 related to such a contract and $118,300 is the remaining performance obligation under that contract which the Company expects to recognize as revenue in the third quarter. 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 June 30, 2019 and December 31, 2018 reserves for warranty claims were not material. Cash received by the Company prior to shipment 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 June 30, 2019: Automotive $ 4,880,038 $ 63,650 $ 4,943,688 Non-automotive 2,936,666 995,097 3,931,763 Total net sales $ 7,816,704 $ 1,058,747 $ 8,875,451 Three Months Ended June 30, 2018: Automotive $ 5,845,574 $ 38,842 $ 5,884,416 Non-automotive 3,188,701 719,667 3,908,368 Total net sales $ 9,034,275 $ 758,509 $ 9,792,784 Six Months Ended June 30, 2019: Automotive $ 9,598,254 $ 105,415 $ 9,703,669 Non-automotive 5,797,570 1,995,890 7,793,460 Total net sales $ 15,395,824 $ 2,101,305 $ 17,497,129 Six Months Ended June 30, 2018: Automotive $ 11,913,584 $ 88,905 $ 12,002,489 Non-automotive 6,045,790 1,756,146 7,801,936 Total net sales $ 17,959,374 $ 1,845,051 $ 19,804,425 The following table presents revenue by segment, further disaggregated by location: Fastener Assembly Equipment Consolidated Three Months Ended June 30, 2019: United States $ 6,612,996 $ 951,679 $ 7,564,675 Foreign 1,203,708 107,068 1,310,776 Total net sales $ 7,816,704 $ 1,058,747 $ 8,875,451 Three Months Ended June 30, 2018: United States $ 7,617,546 $ 710,745 $ 8,328,291 Foreign 1,416,729 47,764 1,464,493 Total net sales $ 9,034,275 $ 758,509 $ 9,792,784 Six Months Ended June 30, 2019: United States $ 13,194,334 $ 1,907,989 $ 15,102,323 Foreign 2,201,490 193,316 2,394,806 Total net sales $ 15,395,824 $ 2,101,305 $ 17,497,129 Six Months Ended June 30, 2018: United States $ 15,299,192 $ 1,751,614 $ 17,050,806 Foreign 2,660,182 93,437 2,753,619 Total net sales $ 17,959,374 $ 1,845,051 $ 19,804,425

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2019
Notes
Income Taxes	5. The Company’s effective tax rates were approximately 21.0% and 23.1% for the second quarter of 2019 and 2018, respectively, and 21.6% and 22.7% for the six months ended June 30, 2019 and 2018, respectively. The Company’s federal income tax returns for the 2015 through 2018 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 2015 through 2018 federal income tax returns will expire on September 15, 2019 through 2022, respectively. The Company’s state income tax returns for the 2015 through 2018 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2022. 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	6 Months Ended
	Jun. 30, 2019
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: June 30, 2019 December 31, 2018 Raw material $ 2,702,486 $ 2,798,918 Work-in-process 1,873,733 1,878,977 Finished goods 2,097,604 2,001,496 Inventory, gross 6,673,823 6,679,391 Valuation reserves (575,000) (579,000) Inventories, net $ 6,098,823 $ 6,100,391

Segment Reporting

Segment Reporting	6 Months Ended
	Jun. 30, 2019
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 June 30, 2019: Net sales $ 7,816,704 $ 1,058,747 0 $ 8,875,451 Depreciation 305,082 31,453 9,743 346,278 Segment operating profit 487,305 315,802 0 803,107 Selling and administrative expenses 0 0 (548,052) (548,052) Interest income 0 0 35,504 35,504 Income before income taxes $ 290,559 Capital expenditures 284,573 102,324 0 386,897 Segment assets: Accounts receivable, net 5,426,139 361,216 0 5,787,355 Inventories, net 4,996,608 1,102,215 0 6,098,823 Property, plant and equipment, net 11,164,067 1,745,444 958,997 13,868,508 Other assets 0 0 7,002,868 7,002,868 $ 32,757,554 Three Months Ended June 30, 2018: Net sales $ 9,034,275 $ 758,509 0 $ 9,792,784 Depreciation 292,378 27,298 7,341 327,017 Segment operating profit 1,229,717 249,376 0 1,479,093 Selling and administrative expenses 0 0 (591,640) (591,640) Interest income 0 0 26,639 26,639 Income before income taxes $ 914,092 Capital expenditures 281,692 0 127,599 409,291 Segment assets: Accounts receivable, net 6,508,150 399,276 0 6,907,426 Inventories, net 4,399,770 1,050,451 0 5,450,221 Property, plant and equipment, net 10,164,570 1,619,454 755,110 12,539,134 Other assets 0 0 8,680,688 8,680,688 $ 33,577,469 Six Months Ended June 30, 2019: Net sales $ 15,395,824 $ 2,101,305 0 $ 17,497,129 Depreciation 602,805 60,377 19,485 682,667 Segment operating profit 1,076,200 651,876 0 1,728,076 Selling and administrative expenses 0 0 (1,141,454) (1,141,454) Interest income 0 0 71,779 71,779 Income before income taxes $ 658,401 Capital expenditures 1,040,680 226,324 26,025 1,293,029 Six Months Ended June 30, 2018: Net sales $ 17,959,374 $ 1,845,051 0 $ 19,804,425 Depreciation 584,259 54,596 14,682 653,537 Segment operating profit 2,407,179 633,561 0 3,040,740 Selling and administrative expenses 0 0 (1,268,579) (1,268,579) Interest income 0 0 53,719 53,719 Income before income taxes $ 1,825,880 Capital expenditures 465,919 31,495 138,304 635,718

Accounting Policies (Policies)

Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2019
Policies
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 June 30, 2019 (unaudited) and December 31, 2018 (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, 2018. 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 three and six-month period ending June 30, 2019 are not necessarily indicative of the results to be expected for the year. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842).” The ASU increases transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU requires lessees to recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The ASU is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those annual periods. The Company adopted Topic 842 on January 1, 2019 using the modified retrospective method. Based on the Company’s current lease agreements, adopting this ASU did not have a material impact on the Company’s 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.
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 second quarter of 2019, the Company realized $219,700 related to such a contract and $118,300 is the remaining performance obligation under that contract which the Company expects to recognize as revenue in the third quarter. 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 June 30, 2019 and December 31, 2018 reserves for warranty claims were not material. Cash received by the Company prior to shipment 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 21.0% and 23.1% for the second quarter of 2019 and 2018, respectively, and 21.6% and 22.7% for the six months ended June 30, 2019 and 2018, respectively. The Company’s federal income tax returns for the 2015 through 2018 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 2015 through 2018 federal income tax returns will expire on September 15, 2019 through 2022, respectively. The Company’s state income tax returns for the 2015 through 2018 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2022. 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)	6 Months Ended
	Jun. 30, 2019
Location
Disaggregation of Revenue	Fastener Assembly Equipment Consolidated Three Months Ended June 30, 2019: United States $ 6,612,996 $ 951,679 $ 7,564,675 Foreign 1,203,708 107,068 1,310,776 Total net sales $ 7,816,704 $ 1,058,747 $ 8,875,451 Three Months Ended June 30, 2018: United States $ 7,617,546 $ 710,745 $ 8,328,291 Foreign 1,416,729 47,764 1,464,493 Total net sales $ 9,034,275 $ 758,509 $ 9,792,784 Six Months Ended June 30, 2019: United States $ 13,194,334 $ 1,907,989 $ 15,102,323 Foreign 2,201,490 193,316 2,394,806 Total net sales $ 15,395,824 $ 2,101,305 $ 17,497,129 Six Months Ended June 30, 2018: United States $ 15,299,192 $ 1,751,614 $ 17,050,806 Foreign 2,660,182 93,437 2,753,619 Total net sales $ 17,959,374 $ 1,845,051 $ 19,804,425
End Market
Disaggregation of Revenue	Fastener Assembly Equipment Consolidated Three Months Ended June 30, 2019: Automotive $ 4,880,038 $ 63,650 $ 4,943,688 Non-automotive 2,936,666 995,097 3,931,763 Total net sales $ 7,816,704 $ 1,058,747 $ 8,875,451 Three Months Ended June 30, 2018: Automotive $ 5,845,574 $ 38,842 $ 5,884,416 Non-automotive 3,188,701 719,667 3,908,368 Total net sales $ 9,034,275 $ 758,509 $ 9,792,784 Six Months Ended June 30, 2019: Automotive $ 9,598,254 $ 105,415 $ 9,703,669 Non-automotive 5,797,570 1,995,890 7,793,460 Total net sales $ 15,395,824 $ 2,101,305 $ 17,497,129 Six Months Ended June 30, 2018: Automotive $ 11,913,584 $ 88,905 $ 12,002,489 Non-automotive 6,045,790 1,756,146 7,801,936 Total net sales $ 17,959,374 $ 1,845,051 $ 19,804,425

Inventories_ Inventories (Table

Inventories: Inventories (Tables)	6 Months Ended
	Jun. 30, 2019
Tables/Schedules
Inventories	June 30, 2019 December 31, 2018 Raw material $ 2,702,486 $ 2,798,918 Work-in-process 1,873,733 1,878,977 Finished goods 2,097,604 2,001,496 Inventory, gross 6,673,823 6,679,391 Valuation reserves (575,000) (579,000) Inventories, net $ 6,098,823 $ 6,100,391

Segment Reporting_ Schedule of

Segment Reporting: Schedule of Segment Reporting Information, by Segment (Tables)	6 Months Ended
	Jun. 30, 2019
Tables/Schedules
Schedule of Segment Reporting Information, by Segment	Fastener Assembly Equipment Other Consolidated Three Months Ended June 30, 2019: Net sales $ 7,816,704 $ 1,058,747 0 $ 8,875,451 Depreciation 305,082 31,453 9,743 346,278 Segment operating profit 487,305 315,802 0 803,107 Selling and administrative expenses 0 0 (548,052) (548,052) Interest income 0 0 35,504 35,504 Income before income taxes $ 290,559 Capital expenditures 284,573 102,324 0 386,897 Segment assets: Accounts receivable, net 5,426,139 361,216 0 5,787,355 Inventories, net 4,996,608 1,102,215 0 6,098,823 Property, plant and equipment, net 11,164,067 1,745,444 958,997 13,868,508 Other assets 0 0 7,002,868 7,002,868 $ 32,757,554 Three Months Ended June 30, 2018: Net sales $ 9,034,275 $ 758,509 0 $ 9,792,784 Depreciation 292,378 27,298 7,341 327,017 Segment operating profit 1,229,717 249,376 0 1,479,093 Selling and administrative expenses 0 0 (591,640) (591,640) Interest income 0 0 26,639 26,639 Income before income taxes $ 914,092 Capital expenditures 281,692 0 127,599 409,291 Segment assets: Accounts receivable, net 6,508,150 399,276 0 6,907,426 Inventories, net 4,399,770 1,050,451 0 5,450,221 Property, plant and equipment, net 10,164,570 1,619,454 755,110 12,539,134 Other assets 0 0 8,680,688 8,680,688 $ 33,577,469 Six Months Ended June 30, 2019: Net sales $ 15,395,824 $ 2,101,305 0 $ 17,497,129 Depreciation 602,805 60,377 19,485 682,667 Segment operating profit 1,076,200 651,876 0 1,728,076 Selling and administrative expenses 0 0 (1,141,454) (1,141,454) Interest income 0 0 71,779 71,779 Income before income taxes $ 658,401 Capital expenditures 1,040,680 226,324 26,025 1,293,029 Six Months Ended June 30, 2018: Net sales $ 17,959,374 $ 1,845,051 0 $ 19,804,425 Depreciation 584,259 54,596 14,682 653,537 Segment operating profit 2,407,179 633,561 0 3,040,740 Selling and administrative expenses 0 0 (1,268,579) (1,268,579) Interest income 0 0 53,719 53,719 Income before income taxes $ 1,825,880 Capital expenditures 465,919 31,495 138,304 635,718

Revenue_ Revenue (Details)

Revenue: Revenue (Details) - USD ($)	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019
Details
Revenue Recognized, Performance Obligation		$ 219,700
Revenue, Remaining Performance Obligation		$ 118,300
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation	third quarter

Revenue_ Disaggregation of Re_2

Revenue: Disaggregation of Revenue (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue	$ 8,875,451	$ 9,792,784	$ 17,497,129	$ 19,804,425
United States
Revenue	7,564,675	8,328,291	15,102,323	17,050,806
Foreign
Revenue	1,310,776	1,464,493	2,394,806	2,753,619
Automotive
Revenue	4,943,688	5,884,416	9,703,669	12,002,489
Nonautomotive
Revenue	3,931,763	3,908,368	7,793,460	7,801,936
Fastener
Revenue	7,816,704	9,034,275	15,395,824	17,959,374
Fastener | United States
Revenue	6,612,996	7,617,546	13,194,334	15,299,192
Fastener | Foreign
Revenue	1,203,708	1,416,729	2,201,490	2,660,182
Fastener | Automotive
Revenue	4,880,038	5,845,574	9,598,254	11,913,584
Fastener | Nonautomotive
Revenue	2,936,666	3,188,701	5,797,570	6,045,790
Assembly Equipment
Revenue	1,058,747	758,509	2,101,305	1,845,051
Assembly Equipment | United States
Revenue	951,679	710,745	1,907,989	1,751,614
Assembly Equipment | Foreign
Revenue	107,068	47,764	193,316	93,437
Assembly Equipment | Automotive
Revenue	63,650	38,842	105,415	88,905
Assembly Equipment | Nonautomotive
Revenue	$ 995,097	$ 719,667	$ 1,995,890	$ 1,756,146

Inventories_ Inventories (Detai

Inventories: Inventories (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Raw material	$ 2,702,486	$ 2,798,918
Work-in-process	1,873,733	1,878,977
Finished goods	2,097,604	2,001,496
Inventory, gross	6,673,823	6,679,391
Valuation reserves	(575,000)	(579,000)
Inventories, net	$ 6,098,823	$ 6,100,391

Segment Reporting_ Schedule o_2

Segment Reporting: Schedule of Segment Reporting Information, by Segment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Net sales	$ 8,875,451	$ 9,792,784	$ 17,497,129	$ 19,804,425
Depreciation			682,667	653,537
Accounts receivable - Less allowances of $140,000	5,787,355		5,787,355		$ 5,529,307
Inventories, net	6,098,823		6,098,823		6,100,391
Net property, plant and equipment	13,868,508		13,868,508		$ 13,258,146
Fastener
Net sales	7,816,704	9,034,275	15,395,824	17,959,374
Depreciation	305,082	292,378	602,805	584,259
Segment operating profit	487,305	1,229,717	1,076,200	2,407,179
Selling and adminstrative expenses	0	0	0	0
Interest income	0	0	0	0
Capital expenditures	284,573	281,692	1,040,680	465,919
Accounts receivable - Less allowances of $140,000	5,426,139	6,508,150	5,426,139	6,508,150
Inventories, net	4,996,608	4,399,770	4,996,608	4,399,770
Net property, plant and equipment	11,164,067	10,164,570	11,164,067	10,164,570
Other Assets	0	0	0	0
Assembly Equipment
Net sales	1,058,747	758,509	2,101,305	1,845,051
Depreciation	31,453	27,298	60,377	54,596
Segment operating profit	315,802	249,376	651,876	633,561
Selling and adminstrative expenses	0	0	0	0
Interest income	0	0	0	0
Capital expenditures	102,324	0	226,324	31,495
Accounts receivable - Less allowances of $140,000	361,216	399,276	361,216	399,276
Inventories, net	1,102,215	1,050,451	1,102,215	1,050,451
Net property, plant and equipment	1,745,444	1,619,454	1,745,444	1,619,454
Other Assets	0	0	0	0
Unallocated Corporate
Net sales	0	0	0	0
Depreciation	9,743	7,341	19,485	14,682
Segment operating profit	0	0	0	0
Selling and adminstrative expenses	(548,052)	(591,640)	(1,141,454)	(1,268,579)
Interest income	35,504	26,639	71,779	53,719
Capital expenditures	0	127,599	26,025	138,304
Accounts receivable - Less allowances of $140,000	0	0	0	0
Inventories, net	0	0	0	0
Net property, plant and equipment	958,997	755,110	958,997	755,110
Other Assets	$ 7,002,868	$ 8,680,688	$ 7,002,868	$ 8,680,688