Chicago Rivet & Machine (CVR) 10-Q 6 Nov 20 2020 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Nov. 02, 2020
Details
Registrant CIK	0000019871
Fiscal Year End	--12-31
Registrant Name	Chicago Rivet & Machine Co.
SEC Form	10-Q
Period End date	Sep. 30, 2020
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	2020
Document Fiscal Period Focus	Q3
Document Quarterly Report	true
Document Transition Report	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current Assets:
Cash and cash equivalents	$ 997,831	$ 1,429,454
Certificates of deposit	6,476,000	6,574,000
Accounts receivable - Less allowances of $160,000 and $140,000, respectively	5,346,916	4,609,314
Inventories, net	4,944,806	4,951,177
Prepaid income taxes	188,186	58,186
Other current assets	446,554	427,192
Total current assets	18,400,293	18,049,323
Property, Plant and Equipment:
Land and improvements	1,636,749	1,636,749
Buildings and improvements	8,341,461	8,331,804
Production equipment and other	36,685,324	36,408,746
Property, Plant and Equipment, Gross	46,663,534	46,377,299
Less accumulated depreciation	33,628,740	32,703,246
Net property, plant and equipment	13,034,794	13,674,053
Total assets	31,435,087	31,723,376
Current Liabilities:
Accounts payable	898,714	490,580
Accrued wages and salaries	945,133	629,972
Other accrued expenses	264,424	349,069
Unearned revenue and customer deposits	117,293	152,644
Total current liabilities	2,225,564	1,622,265
Deferred income taxes	871,084	943,084
Total liabilities	3,096,648	2,565,349
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	30,675,307	31,494,895
Treasury stock, 171,964 shares at cost	(3,922,098)	(3,922,098)
Total shareholders' equity	28,338,439	29,158,027
Total liabilities and shareholders' equity	$ 31,435,087	$ 31,723,376

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) - Parenthetical - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Details
Accounts Receivable, Allowance for Credit Loss, Current	$ 160,000	$ 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		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Condensed Consolidated Statements of Income (Unaudited)
Net sales	$ 7,645,259	$ 8,188,905	$ 19,325,234	$ 25,686,034
Cost of goods sold	6,004,766	6,539,138	16,304,164	20,826,534
Gross profit	1,640,493	1,649,767	3,021,070	4,859,500
Selling and administrative expenses	1,258,995	1,282,149	3,758,752	3,931,510
Operating profit (loss)	381,498	367,618	(737,682)	927,990
Other income	32,637	47,179	122,869	145,208
Income (loss) before income taxes	414,135	414,797	(614,813)	1,073,198
Provision (benefit) for income taxes	105,000	99,000	(201,000)	241,000
Net income (loss)	$ 309,135	$ 315,797	$ (413,813)	$ 832,198
Per share data, basic and diluted:
Net income (loss) per share	$ 0.32	$ 0.32	$ (0.43)	$ 0.86
Average common shares outstanding	966,132	966,132	966,132	966,132
Cash dividends declared per share	$ 0.10	$ 0.22	$ 0.42	$ 0.96

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, 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
Treasury Stock Shares at Dec. 31, 2018						171,964
Net Income (Loss)	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
Treasury Stock Shares at Dec. 31, 2018						171,964
Net Income (Loss)	832,198
Ending Balance at Sep. 30, 2019	29,664,460	0	$ 1,138,096	447,134	32,001,328	$ (3,922,098)
Common Stock Shares at Sep. 30, 2019			966,132
Treasury Stock Shares at Sep. 30, 2019						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 (Loss)	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
Treasury Stock Shares at Jun. 30, 2019						171,964
Net Income (Loss)	315,797				315,797
Dividends Declared	(212,549)				(212,549)
Ending Balance at Sep. 30, 2019	29,664,460	0	$ 1,138,096	447,134	32,001,328	$ (3,922,098)
Common Stock Shares at Sep. 30, 2019			966,132
Treasury Stock Shares at Sep. 30, 2019						171,964
Beginning Balance at Dec. 31, 2019	$ 29,158,027	0	$ 1,138,096	447,134	31,494,895	$ (3,922,098)
Common Stock Shares at Dec. 31, 2019	966,132		966,132
Treasury Stock Shares at Dec. 31, 2019	171,964					171,964
Net Income (Loss)	$ 56,568				56,568
Dividends Declared	(212,549)				(212,549)
Ending Balance at Mar. 31, 2020	29,002,046	0	$ 1,138,096	447,134	31,338,914	$ (3,922,098)
Common Stock Shares at Mar. 31, 2020			966,132
Treasury Stock Shares at Mar. 31, 2020						171,964
Beginning Balance at Dec. 31, 2019	$ 29,158,027	0	$ 1,138,096	447,134	31,494,895	$ (3,922,098)
Common Stock Shares at Dec. 31, 2019	966,132		966,132
Treasury Stock Shares at Dec. 31, 2019	171,964					171,964
Net Income (Loss)	$ (413,813)
Ending Balance at Sep. 30, 2020	$ 28,338,439	0	$ 1,138,096	447,134	30,675,307	$ (3,922,098)
Common Stock Shares at Sep. 30, 2020	966,132		966,132
Treasury Stock Shares at Sep. 30, 2020	171,964					171,964
Beginning Balance at Mar. 31, 2020	$ 29,002,046	0	$ 1,138,096	447,134	31,338,914	$ (3,922,098)
Common Stock Shares at Mar. 31, 2020			966,132
Treasury Stock Shares at Mar. 31, 2020						171,964
Net Income (Loss)	(779,516)				(779,516)
Dividends Declared	(96,612)				(96,612)
Ending Balance at Jun. 30, 2020	28,125,918	0	$ 1,138,096	447,134	30,462,786	$ (3,922,098)
Common Stock Shares at Jun. 30, 2020			966,132
Treasury Stock Shares at Jun. 30, 2020						171,964
Net Income (Loss)	309,135				309,135
Dividends Declared	(96,614)				(96,614)
Ending Balance at Sep. 30, 2020	$ 28,338,439	$ 0	$ 1,138,096	$ 447,134	$ 30,675,307	$ (3,922,098)
Common Stock Shares at Sep. 30, 2020	966,132		966,132
Treasury Stock Shares at Sep. 30, 2020	171,964					171,964

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - Parenthetical - $ / shares	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Details
Cash dividends declared per share	$ 0.10	$ 0.10	$ 0.22	$ 0.22	$ 0.22	$ 0.52	$ 0.42	$ 0.96

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net Income (Loss)	$ (413,813)	$ 832,198
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	1,014,916	1,029,998
Gain on disposal of equipment	0	(5,000)
Deferred income taxes	(72,000)	134,000
Changes in operating assets and liabilities:
Accounts receivable	(737,602)	(84,715)
Inventories	6,371	624,058
Other current assets and prepaid income taxes	(149,362)	(320,611)
Accounts payable	408,134	(72,255)
Accrued wages and salaries	315,161	160,519
Other accrued expenses	(84,645)	(171,741)
Unearned revenue and customer deposits	(35,351)	(125,529)
Net cash provided by operating activities	251,809	2,000,922
Cash flows from investing activities:
Capital expenditures	(375,657)	(1,562,784)
Proceeds from the sale of equipment	0	5,000
Proceeds from certificates of deposit	4,831,000	5,569,000
Purchases of certificates of deposit	(4,733,000)	(4,582,000)
Net cash used in investing activities	(277,657)	(570,784)
Cash flows from financing activities:
Cash dividends paid	(405,775)	(927,487)
Net cash used in financing activities	(405,775)	(927,487)
Net (decrease) increase in cash and cash equivalents	(431,623)	502,651
Cash and cash equivalents at beginning of period	1,429,454	706,873
Cash and cash equivalents at end of period	997,831	1,209,524
Supplemental schedule of non-cash investing activities:
Capital expenditures in accounts payable	$ 0	$ 0

Accounting Policies

Accounting Policies	9 Months Ended
	Sep. 30, 2020
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, 2020 (unaudited) and December 31, 2019 (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, 2019. 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 nine-month period ending September 30, 2020 are not necessarily indicative of the results to be expected for the year.

Risks and Uncertainties

Risks and Uncertainties	9 Months Ended
	Sep. 30, 2020
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	9 Months Ended
	Sep. 30, 2020
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, 2020
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 2020, the Company had no such contracts. 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, 2020, and December 31, 2019 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 September 30, 2020: Automotive $ 4,660,451 $ 34,687 $ 4,695,138 Non-automotive 2,363,965 586,156 2,950,121 Total net sales $ 7,024,416 $ 620,843 $ 7,645,259 Three Months Ended September 30, 2019: Automotive $ 4,698,298 $ 61,298 $ 4,759,596 Non-automotive 2,608,597 820,712 3,429,309 Total net sales $ 7,306,895 $ 882,010 $ 8,188,905 Nine Months Ended September 30, 2020: Automotive $ 10,653,621 $ 107,476 $ 10,761,097 Non-automotive 6,621,934 1,942,203 8,564,137 Total net sales $ 17,275,555 $ 2,049,679 $ 19,325,234 Nine Months Ended September 30, 2019: Automotive $ 14,296,552 $ 166,713 $ 14,463,265 Non-automotive 8,406,167 2,816,602 11,222,769 Total net sales $ 22,702,719 $ 2,983,315 $ 25,686,034 The following table presents revenue by segment, further disaggregated by location: Fastener Assembly Equipment Consolidated Three Months Ended September 30, 2020: United States $ 5,909,756 $ 603,858 $ 6,513,614 Foreign 1,114,660 16,985 1,131,645 Total net sales $ 7,024,416 $ 620,843 $ 7,645,259 Three Months Ended September 30, 2019: United States $ 6,252,110 $ 823,137 $ 7,075,247 Foreign 1,054,785 58,873 1,113,658 Total net sales $ 7,306,895 $ 882,010 $ 8,188,905 Nine Months Ended September 30, 2020: United States $ 14,721,327 $ 1,891,485 $ 16,612,812 Foreign 2,554,228 158,194 2,712,422 Total net sales $ 17,275,555 $ 2,049,679 $ 19,325,234 Nine Months Ended September 30, 2019: United States $ 19,443,934 $ 2,731,126 $ 22,175,060 Foreign 3,258,785 252,189 3,510,874 Total net sales $ 22,702,719 $ 2,983,315 $ 25,686,034

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2020
Notes
Income Taxes	5. The Company’s effective tax rates were approximately 25.4% and 23.9% for the third quarter of 2020 and 2019, respectively. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act allows for the carryback of any net operating loss arising in a tax year beginning after December 31, 2017 and before January 1, 2021, to each of the five tax years preceding the tax year in which the loss arises. As a result, the Company’s effective tax rate was approximately (32.7)% for the nine months ended September 30, 2020 compared to 22.5% for the nine months ended September 30, 2019. The Company’s federal income tax returns for the 2017, 2018 and 2019 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 2017, 2018 and 2019 federal income tax returns will expire on September 15, 2021, 2022 and 2023, respectively. The Company’s state income tax returns for the 2017 through 2019 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2023. The Company is currently not 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, 2020
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, 2020 December 31, 2019 Raw material $ 2,067,234 $ 2,337,278 Work-in-process 1,500,319 1,201,099 Finished goods 1,913,253 1,869,800 Inventories, gross 5,480,806 5,408,177 Valuation reserves (536,000) (457,000) Inventories, net $ 4,944,806 $ 4,951,177

Segment Reporting

Segment Reporting	9 Months Ended
	Sep. 30, 2020
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, 2020: Net sales $ 7,024,416 $ 620,843 0 $ 7,645,259 Depreciation 297,533 32,869 8,377 338,779 Segment operating profit 783,234 103,759 0 886,993 Selling and administrative expenses 0 0 (493,370) (493,370) Interest income 0 0 20,512 20,512 Income before income taxes $ 414,135 Capital expenditures 28,165 0 92,140 120,305 Segment assets: Accounts receivable, net 5,059,552 287,364 0 5,346,916 Inventories, net 3,880,189 1,064,617 0 4,944,806 Property, plant and equipment, net 10,381,970 1,588,157 1,064,667 13,034,794 Other assets 0 0 8,108,571 8,108,571 $ 31,435,087 Three Months Ended September 30, 2019: Net sales $ 7,306,895 $ 882,010 0 $ 8,188,905 Depreciation 305,082 32,507 9,742 347,331 Segment operating profit 605,503 336,320 0 941,823 Selling and administrative expenses 0 0 (563,705) (563,705) Interest income 0 0 36,679 36,679 Income before income taxes $ 414,797 Capital expenditures 267,179 2,576 0 269,755 Segment assets: Accounts receivable, net 5,174,674 439,348 0 5,614,022 Inventories, net 4,294,760 1,181,573 0 5,476,333 Property, plant and equipment, net 11,126,165 1,715,513 949,254 13,790,932 Other assets 0 0 8,195,043 8,195,043 $ 33,076,330 Nine Months Ended September 30, 2020: Net sales $ 17,275,555 $ 2,049,679 0 $ 19,325,234 Depreciation 891,177 98,607 25,132 1,014,916 Segment operating profit 533,742 319,340 0 853,082 Selling and administrative expenses 0 0 (1,547,606) (1,547,606) Interest income 0 0 79,711 79,711 Income (loss) before income taxes $ (614,813) Capital expenditures 225,707 0 149,950 375,657 Nine Months Ended September 30, 2019: Net sales $ 22,702,719 $ 2,983,315 0 $ 25,686,034 Depreciation 907,887 92,884 29,227 1,029,998 Segment operating profit 1,681,703 988,196 0 2,669,899 Selling and administrative expenses 0 0 (1,705,159) (1,705,159) Interest income 0 0 108,458 108,458 Income before income taxes $ 1,073,198 Capital expenditures 1,307,859 228,900 26,025 1,562,784

COVID-19

COVID-19	9 Months Ended
	Sep. 30, 2020
Notes
COVID-19	8.  COVID-19 -- In March 2020, the World Health Organization characterized the novel coronavirus (“COVID-19”) a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency.  The rapid spread of the virus and the evolving response domestically and internationally to combat it have had a significant negative impact on the global economy, including the automotive industry upon which we rely for sales.  Beginning in March, most states issued executive orders which temporarily closed businesses deemed non-essential in an effort to prevent the spread of the coronavirus.  Similar measures also took place in foreign markets we serve.  As a result, our operations and the operations of our customers and suppliers have been adversely affected.  Since some of our customers are classified as essential businesses and were allowed to continue to operate during this period, we were able to continue our operations, but at a significantly reduced level, in order to service those customers.  Our automotive customers were particularly affected, as much of the sector was idled for an extended period of time during the second quarter due to employee safety concerns.  While most shut-down orders were lifted late in the second quarter, various work-related restrictions remain in place.  Due to the rapidly changing business environment and heightened degree of uncertainty resulting from COVID-19, we have taken measures to reduce expenses and conserve capital during this period, including reduced work schedules, delayed capital expenditures and a reduction in dividend payments.  We have seen improved demand since government-imposed restrictions were relaxed, however the timing of any broad economic recovery is uncertain and will likely be tied to the course of the pandemic.  As we cannot predict the duration or scope of the COVID-19 pandemic, or its broader impact on the global economy, including the demand for automobiles, it is unknown how long the COVID-19 restrictions will remain in place or what the impact of COVID-19 and its related effects will be on our business, results of operations or financial condition, but the impact could be material and last for an extended period of time.

Accounting Policies (Policies)

Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
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 September 30, 2020 (unaudited) and December 31, 2019 (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, 2019. 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 nine-month period ending September 30, 2020 are not necessarily indicative of the results to be expected for the year.
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 third quarter of 2020, the Company had no such contracts. 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, 2020, and December 31, 2019 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 25.4% and 23.9% for the third quarter of 2020 and 2019, respectively. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act allows for the carryback of any net operating loss arising in a tax year beginning after December 31, 2017 and before January 1, 2021, to each of the five tax years preceding the tax year in which the loss arises. As a result, the Company’s effective tax rate was approximately (32.7)% for the nine months ended September 30, 2020 compared to 22.5% for the nine months ended September 30, 2019. The Company’s federal income tax returns for the 2017, 2018 and 2019 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 2017, 2018 and 2019 federal income tax returns will expire on September 15, 2021, 2022 and 2023, respectively. The Company’s state income tax returns for the 2017 through 2019 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2023. The Company is currently not 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, 2020
Location
Disaggregation of Revenue	Fastener Assembly Equipment Consolidated Three Months Ended September 30, 2020: United States $ 5,909,756 $ 603,858 $ 6,513,614 Foreign 1,114,660 16,985 1,131,645 Total net sales $ 7,024,416 $ 620,843 $ 7,645,259 Three Months Ended September 30, 2019: United States $ 6,252,110 $ 823,137 $ 7,075,247 Foreign 1,054,785 58,873 1,113,658 Total net sales $ 7,306,895 $ 882,010 $ 8,188,905 Nine Months Ended September 30, 2020: United States $ 14,721,327 $ 1,891,485 $ 16,612,812 Foreign 2,554,228 158,194 2,712,422 Total net sales $ 17,275,555 $ 2,049,679 $ 19,325,234 Nine Months Ended September 30, 2019: United States $ 19,443,934 $ 2,731,126 $ 22,175,060 Foreign 3,258,785 252,189 3,510,874 Total net sales $ 22,702,719 $ 2,983,315 $ 25,686,034
End Market
Disaggregation of Revenue	Fastener Assembly Equipment Consolidated Three Months Ended September 30, 2020: Automotive $ 4,660,451 $ 34,687 $ 4,695,138 Non-automotive 2,363,965 586,156 2,950,121 Total net sales $ 7,024,416 $ 620,843 $ 7,645,259 Three Months Ended September 30, 2019: Automotive $ 4,698,298 $ 61,298 $ 4,759,596 Non-automotive 2,608,597 820,712 3,429,309 Total net sales $ 7,306,895 $ 882,010 $ 8,188,905 Nine Months Ended September 30, 2020: Automotive $ 10,653,621 $ 107,476 $ 10,761,097 Non-automotive 6,621,934 1,942,203 8,564,137 Total net sales $ 17,275,555 $ 2,049,679 $ 19,325,234 Nine Months Ended September 30, 2019: Automotive $ 14,296,552 $ 166,713 $ 14,463,265 Non-automotive 8,406,167 2,816,602 11,222,769 Total net sales $ 22,702,719 $ 2,983,315 $ 25,686,034

Inventories_ Inventories (Table

Inventories: Inventories (Tables)	9 Months Ended
	Sep. 30, 2020
Tables/Schedules
Inventories	September 30, 2020 December 31, 2019 Raw material $ 2,067,234 $ 2,337,278 Work-in-process 1,500,319 1,201,099 Finished goods 1,913,253 1,869,800 Inventories, gross 5,480,806 5,408,177 Valuation reserves (536,000) (457,000) Inventories, net $ 4,944,806 $ 4,951,177

Segment Reporting_ Schedule of

Segment Reporting: Schedule of Segment Reporting, by Segment (Tables)	9 Months Ended
	Sep. 30, 2020
Tables/Schedules
Schedule of Segment Reporting, by Segment	Fastener Assembly Equipment Other Consolidated Three Months Ended September 30, 2020: Net sales $ 7,024,416 $ 620,843 0 $ 7,645,259 Depreciation 297,533 32,869 8,377 338,779 Segment operating profit 783,234 103,759 0 886,993 Selling and administrative expenses 0 0 (493,370) (493,370) Interest income 0 0 20,512 20,512 Income before income taxes $ 414,135 Capital expenditures 28,165 0 92,140 120,305 Segment assets: Accounts receivable, net 5,059,552 287,364 0 5,346,916 Inventories, net 3,880,189 1,064,617 0 4,944,806 Property, plant and equipment, net 10,381,970 1,588,157 1,064,667 13,034,794 Other assets 0 0 8,108,571 8,108,571 $ 31,435,087 Three Months Ended September 30, 2019: Net sales $ 7,306,895 $ 882,010 0 $ 8,188,905 Depreciation 305,082 32,507 9,742 347,331 Segment operating profit 605,503 336,320 0 941,823 Selling and administrative expenses 0 0 (563,705) (563,705) Interest income 0 0 36,679 36,679 Income before income taxes $ 414,797 Capital expenditures 267,179 2,576 0 269,755 Segment assets: Accounts receivable, net 5,174,674 439,348 0 5,614,022 Inventories, net 4,294,760 1,181,573 0 5,476,333 Property, plant and equipment, net 11,126,165 1,715,513 949,254 13,790,932 Other assets 0 0 8,195,043 8,195,043 $ 33,076,330 Nine Months Ended September 30, 2020: Net sales $ 17,275,555 $ 2,049,679 0 $ 19,325,234 Depreciation 891,177 98,607 25,132 1,014,916 Segment operating profit 533,742 319,340 0 853,082 Selling and administrative expenses 0 0 (1,547,606) (1,547,606) Interest income 0 0 79,711 79,711 Income (loss) before income taxes $ (614,813) Capital expenditures 225,707 0 149,950 375,657 Nine Months Ended September 30, 2019: Net sales $ 22,702,719 $ 2,983,315 0 $ 25,686,034 Depreciation 907,887 92,884 29,227 1,029,998 Segment operating profit 1,681,703 988,196 0 2,669,899 Selling and administrative expenses 0 0 (1,705,159) (1,705,159) Interest income 0 0 108,458 108,458 Income before income taxes $ 1,073,198 Capital expenditures 1,307,859 228,900 26,025 1,562,784

Revenue_ Disaggregation of Re_2

Revenue: Disaggregation of Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue	$ 7,645,259	$ 8,188,905	$ 19,325,234	$ 25,686,034
United States
Revenue	6,513,614	7,075,247	16,612,812	22,175,060
Foreign
Revenue	1,131,645	1,113,658	2,712,422	3,510,874
Automotive
Revenue	4,695,138	4,759,596	10,761,097	14,463,265
Nonautomotive
Revenue	2,950,121	3,429,309	8,564,137	11,222,769
Fastener
Revenue	7,024,416	7,306,895	17,275,555	22,702,719
Fastener | United States
Revenue	5,909,756	6,252,110	14,721,327	19,443,934
Fastener | Foreign
Revenue	1,114,660	1,054,785	2,554,228	3,258,785
Fastener | Automotive
Revenue	4,660,451	4,698,298	10,653,621	14,296,552
Fastener | Nonautomotive
Revenue	2,363,965	2,608,597	6,621,934	8,406,167
Assembly Equipment
Revenue	620,843	882,010	2,049,679	2,983,315
Assembly Equipment | United States
Revenue	603,858	823,137	1,891,485	2,731,126
Assembly Equipment | Foreign
Revenue	16,985	58,873	158,194	252,189
Assembly Equipment | Automotive
Revenue	34,687	61,298	107,476	166,713
Assembly Equipment | Nonautomotive
Revenue	$ 586,156	$ 820,712	$ 1,942,203	$ 2,816,602

Inventories_ Inventories (Detai

Inventories: Inventories (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Details
Raw material	$ 2,067,234	$ 2,337,278
Work-in-process	1,500,319	1,201,099
Finished goods	1,913,253	1,869,800
Inventories, gross	5,480,806	5,408,177
Valuation reserves	(536,000)	(457,000)
Inventories, net	$ 4,944,806	$ 4,951,177

Segment Reporting_ Schedule o_2

Segment Reporting: Schedule of Segment Reporting, by Segment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Net sales	$ 7,645,259	$ 8,188,905	$ 19,325,234	$ 25,686,034
Depreciation			1,014,916	1,029,998
Accounts receivable - Less allowances of $160,000 and $140,000, respectively	5,346,916		5,346,916		$ 4,609,314
Inventories, net	4,944,806		4,944,806		4,951,177
Net property, plant and equipment	13,034,794		13,034,794		$ 13,674,053
Fastener
Net sales	7,024,416	7,306,895	17,275,555	22,702,719
Depreciation	297,533	305,082	891,177	907,887
Segment operating profit (loss)	783,234	605,503	533,742	1,681,703
Selling and Administrative Expenses	0	0	0	0
Interest income	0	0	0	0
Capital expenditures	28,165	267,179	225,707	1,307,859
Accounts receivable - Less allowances of $160,000 and $140,000, respectively	5,059,552	5,174,674	5,059,552	5,174,674
Inventories, net	3,880,189	4,294,760	3,880,189	4,294,760
Net property, plant and equipment	10,381,970	11,126,165	10,381,970	11,126,165
Other Assets	0	0	0	0
Assembly Equipment
Net sales	620,843	882,010	2,049,679	2,983,315
Depreciation	32,869	32,507	98,607	92,884
Segment operating profit (loss)	103,759	336,320	319,340	988,196
Selling and Administrative Expenses	0	0	0	0
Interest income	0	0	0	0
Capital expenditures	0	2,576	0	228,900
Accounts receivable - Less allowances of $160,000 and $140,000, respectively	287,364	439,348	287,364	439,348
Inventories, net	1,064,617	1,181,573	1,064,617	1,181,573
Net property, plant and equipment	1,588,157	1,715,513	1,588,157	1,715,513
Other Assets	0	0	0	0
Unallocated Corporate
Net sales	0	0	0	0
Depreciation	8,377	9,742	25,132	29,227
Segment operating profit (loss)	0	0	0	0
Selling and Administrative Expenses	(493,370)	(563,705)	(1,547,606)	(1,705,159)
Interest income	20,512	36,679	79,711	108,458
Capital expenditures	92,140	0	149,950	26,025
Accounts receivable - Less allowances of $160,000 and $140,000, respectively	0	0	0	0
Inventories, net	0	0	0	0
Net property, plant and equipment	1,064,667	949,254	1,064,667	949,254
Other Assets	$ 8,108,571	$ 8,195,043	$ 8,108,571	$ 8,195,043