Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Details | ||
Registrant CIK | 0000019871 | |
Fiscal Year End | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 $1.00 per share | |
Trading Symbol | CVR | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 966,132 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 5,328,732 | $ 2,036,954 |
Certificates of deposit | 2,741,000 | 2,741,000 |
Accounts receivable - Less allowances of $162,000 and $170,000, respectively | 6,578,114 | 5,647,984 |
Inventories, net | 9,921,472 | 8,519,780 |
Prepaid income taxes | 0 | 440 |
Other current assets | 422,002 | 346,236 |
Total current assets | 24,991,320 | 19,292,394 |
Property, Plant and Equipment | ||
Land and improvements | 1,510,513 | 1,778,819 |
Buildings and improvements | 6,745,058 | 8,456,983 |
Production equipment and other | 37,133,750 | 36,679,114 |
Property, Plant and Equipment, Gross | 45,389,321 | 46,914,916 |
Less accumulated depreciation | 33,481,667 | 34,441,052 |
Net property, plant and equipment | 11,907,654 | 12,473,864 |
Total assets | 36,898,974 | 31,766,258 |
Current Liabilities | ||
Accounts payable | 897,430 | 692,635 |
Accrued wages and salaries | 838,030 | 509,332 |
Other accrued expenses | 411,519 | 366,418 |
Unearned revenue and customer deposits | 175,330 | 302,424 |
Federal and state income taxes | 1,164,586 | 0 |
Total current liabilities | 3,486,895 | 1,870,809 |
Deferred income taxes | 900,084 | 926,084 |
Total liabilities | 4,386,979 | 2,796,893 |
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 | 34,848,863 | 31,306,233 |
Treasury stock, 171,964 shares at cost | (3,922,098) | (3,922,098) |
Total shareholders' equity | 32,511,995 | 28,969,365 |
Total liabilities and shareholders' equity | $ 36,898,974 | $ 31,766,258 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets - Parenthetical - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Details | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 162,000 | $ 170,000 |
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 Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Condensed Consolidated Statements of Income (Unaudited) | ||||
Net sales | $ 8,567,785 | $ 8,555,731 | $ 26,788,879 | $ 26,225,070 |
Cost of goods sold | 7,447,877 | 7,069,700 | 22,366,372 | 21,027,525 |
Gross profit | 1,119,908 | 1,486,031 | 4,422,507 | 5,197,545 |
Operating (income) expenses | ||||
Selling and administrative expenses | 1,250,385 | 1,290,046 | 3,809,970 | 3,936,995 |
Gain on sale of property | (4,738,394) | 0 | (4,738,394) | 0 |
Total operating (income) expenses | (3,488,009) | 1,290,046 | (928,424) | 3,936,995 |
Operating profit | 4,607,917 | 195,985 | 5,350,931 | 1,260,550 |
Other income | 13,143 | 11,674 | 35,346 | 43,744 |
Income before income taxes | 4,621,060 | 207,659 | 5,386,277 | 1,304,294 |
Provision for income taxes | 1,042,000 | 35,000 | 1,206,000 | 272,000 |
Net income | $ 3,579,060 | $ 172,659 | $ 4,180,277 | $ 1,032,294 |
Per share data | ||||
Basic net income per share | $ 3.71 | $ 0.18 | $ 4.33 | $ 1.07 |
Diluted net income per share | $ 3.71 | $ 0.18 | $ 4.33 | $ 1.07 |
Basic | 966,132 | 966,132 | 966,132 | 966,132 |
Diluted | 966,132 | 966,132 | 966,132 | 966,132 |
Cash dividends declared per share | $ 0.22 | $ 0.22 | $ 0.66 | $ 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 |
Beginning Balance at Dec. 31, 2020 | $ 28,706,089 | $ 0 | $ 1,138,096 | $ 447,134 | $ 31,042,957 | $ (3,922,098) |
Common Stock Shares at Dec. 31, 2020 | 966,132 | |||||
Treasury Stock Shares at Dec. 31, 2020 | 171,964 | |||||
Net income | 540,128 | 540,128 | ||||
Dividends declared | (212,549) | (212,549) | ||||
Ending Balance at Mar. 31, 2021 | 29,033,668 | 0 | $ 1,138,096 | 447,134 | 31,370,536 | $ (3,922,098) |
Common Stock Shares at Mar. 31, 2021 | 966,132 | |||||
Treasury Stock Shares at Mar. 31, 2021 | 171,964 | |||||
Beginning Balance at Dec. 31, 2020 | 28,706,089 | 0 | $ 1,138,096 | 447,134 | 31,042,957 | $ (3,922,098) |
Common Stock Shares at Dec. 31, 2020 | 966,132 | |||||
Treasury Stock Shares at Dec. 31, 2020 | 171,964 | |||||
Net income | 1,032,294 | |||||
Ending Balance at Sep. 30, 2021 | 29,100,736 | 0 | $ 1,138,096 | 447,134 | 31,437,604 | $ (3,922,098) |
Common Stock Shares at Sep. 30, 2021 | 966,132 | |||||
Treasury Stock Shares at Sep. 30, 2021 | 171,964 | |||||
Beginning Balance at Mar. 31, 2021 | 29,033,668 | 0 | $ 1,138,096 | 447,134 | 31,370,536 | $ (3,922,098) |
Common Stock Shares at Mar. 31, 2021 | 966,132 | |||||
Treasury Stock Shares at Mar. 31, 2021 | 171,964 | |||||
Net income | 319,507 | 319,507 | ||||
Dividends declared | (212,549) | (212,549) | ||||
Ending Balance at Jun. 30, 2021 | 29,140,626 | 0 | $ 1,138,096 | 447,134 | 31,477,494 | $ (3,922,098) |
Common Stock Shares at Jun. 30, 2021 | 966,132 | |||||
Treasury Stock Shares at Jun. 30, 2021 | 171,964 | |||||
Net income | 172,659 | 172,659 | ||||
Dividends declared | (212,549) | (212,549) | ||||
Ending Balance at Sep. 30, 2021 | 29,100,736 | 0 | $ 1,138,096 | 447,134 | 31,437,604 | $ (3,922,098) |
Common Stock Shares at Sep. 30, 2021 | 966,132 | |||||
Treasury Stock Shares at Sep. 30, 2021 | 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 | 966,132 | ||||
Treasury Stock Shares at Dec. 31, 2021 | 171,964 | |||||
Net income | $ 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 | 966,132 | ||||
Treasury Stock Shares at Dec. 31, 2021 | 171,964 | |||||
Net income | $ 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 | 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 | 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 | 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 | 966,132 | ||||
Treasury Stock Shares at Sep. 30, 2022 | 171,964 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - Parenthetical - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Details | ||||||||
Cash dividends declared per share | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.66 | $ 0.66 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net income | $ 4,180,277 | $ 1,032,294 |
Adjustments to reconcile net income to net cash used in operating activities | ||
Depreciation | 960,139 | 990,983 |
(Gain) loss on sale of property and equipment | (4,736,096) | 21,564 |
Deferred income taxes | (26,000) | (94,000) |
Changes in operating assets and liabilities | ||
Accounts receivable | (930,130) | (911,293) |
Inventories | (1,401,692) | (2,591,976) |
Other current assets | (75,326) | (7,890) |
Accounts payable | 204,795 | 710,141 |
Accrued wages and salaries | 328,698 | 389,796 |
Other accrued expenses | 1,209,687 | 34,353 |
Unearned revenue and customer deposits | (127,094) | (40,959) |
Net cash used in operating activities | (412,742) | (466,987) |
Cash flows from investing activities | ||
Capital expenditures | (696,073) | (587,615) |
Proceeds from the sale of property | 5,038,240 | 7,800 |
Proceeds from certificates of deposit | 1,245,000 | 4,084,000 |
Purchases of certificates of deposit | (1,245,000) | (2,092,000) |
Net cash provided by investing activities | 4,342,167 | 1,412,185 |
Cash flows from financing activities | ||
Cash dividends paid | (637,647) | (637,647) |
Net cash used in financing activities | (637,647) | (637,647) |
Net increase in cash and cash equivalents | 3,291,778 | 307,551 |
Cash and cash equivalents at beginning of period | 2,036,954 | 2,567,731 |
Cash and cash equivalents at end of period | $ 5,328,732 | $ 2,875,282 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 (unaudited) and December 31, 2021 (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, 2021. 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, 2022 are not necessarily indicative of the results to be expected for the year. |
Risks and Uncertainties
Risks and Uncertainties | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 | |
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, 2022 | |
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 2022, the Company did not realize any revenue related to such contracts. As of September 30, 2022, there are no such contracts outstanding. 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, 2022 and December 31, 2021 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, 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 Three Months Ended September 30, 2021: Automotive $ 4,259,544 $ 27,998 $ 4,287,542 Non-automotive 3,293,075 975,114 4,268,189 Total net sales $ 7,552,619 $ 1,003,112 $ 8,555,731 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 Nine Months Ended September 30, 2021: Automotive $ 13,410,100 $ 100,953 $ 13,511,053 Non-automotive 9,433,241 3,280,776 12,714,017 Total net sales $ 22,843,341 $ 3,381,729 $ 26,225,070 The following table presents revenue by segment, further disaggregated by location: Fastener Assembly Equipment Consolidated 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 Three Months Ended September 30, 2021: United States $ 6,300,067 $ 981,905 $ 7,281,972 Foreign 1,252,552 21,207 1,273,759 Total net sales $ 7,552,619 $ 1,003,112 $ 8,555,731 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 Nine Months Ended September 30, 2021: United States $ 18,589,576 $ 3,320,415 $ 21,909,991 Foreign 4,253,765 61,314 4,315,079 Total net sales $ 22,843,341 $ 3,381,729 $ 26,225,070 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Notes | |
Income Taxes | 5. The Company’s effective tax rates were approximately 22.5% and 16.9% for the third quarter of 2022 and 2021, respectively, and 22.4% and 20.9% for the nine months ended September 30, 2022 and 2021, respectively. The Company’s federal income tax returns for the 2019, 2020 and 2021 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 2019, 2020 and 2021 federal income tax returns will expire on September 15, 2023, 2024 and 2025, respectively. The Company’s state income tax returns for the 2019 through 2021 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2025. 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, 2022 | |
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, 2022 December 31, 2021 Raw material $ 5,018,465 $ 4,645,923 Work-in-process 3,143,844 2,181,457 Finished goods 2,395,163 2,304,400 Inventories, gross 10,557,472 9,131,780 Valuation reserves (636,000) (612,000) Inventories, net $ 9,921,472 $ 8,519,780 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
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, 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 Three Months Ended September 30, 2021: Net sales $ 7,552,619 $ 1,003,112 0 $ 8,555,731 Depreciation 291,512 33,534 5,448 330,494 Segment operating profit 480,288 215,869 0 696,157 Selling and administrative expenses 0 0 (491,547) (491,547) Interest income 0 0 3,049 3,049 Income before income taxes $ 207,659 Capital expenditures 77,007 0 165,395 242,402 Segment assets: Accounts receivable, net 5,623,045 451,698 0 6,074,743 Inventories, net 6,553,617 1,191,653 0 7,745,270 Property, plant and equipment, net 9,986,600 1,468,262 1,263,290 12,718,152 Other assets 0 0 6,093,884 6,093,884 $ 32,632,049 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 Nine Months Ended September 30, 2021: Net sales $ 22,843,341 $ 3,381,729 0 $ 26,225,070 Depreciation 847,037 100,600 16,346 990,983 Segment operating profit 1,982,084 852,571 0 2,834,655 Selling and administrative expenses 0 0 (1,547,845) (1,547,845) Interest income 0 0 17,484 17,484 Income before income taxes $ 1,304,294 Capital expenditures 410,281 0 177,334 587,615 |
Additional Financial Informatio
Additional Financial Information Disclosure | 9 Months Ended |
Sep. 30, 2022 | |
Notes | |
Additional Financial Information Disclosure | 8. On August 12, 2022, the Company entered into a Purchase and Sale Agreement (the “PSA”) with Frontenac Properties LLC (the “Purchaser”) pursuant to which the Company agreed, subject to the terms and conditions of the PSA, to sell its facility in Naperville, Illinois, in which the Company headquarters and warehouse space are located, to the Purchaser. On September 27, 2022, the Company’s sale of the facility to the Purchaser was completed for a selling price of $5,350,000 in cash, less customary closing costs. The net gain on the transaction was $4,738,394. A portion of the net proceeds was invested in U.S. Treasury bills and included in cash and cash equivalents on September 30, 2022. Concurrently with the completion of the sale of the Naperville facility, the Company and the Purchaser entered into a lease agreement pursuant to which the Company will lease the warehouse portion of the Naperville facility from the Purchaser until December 31, 2022 and the office portion until June 30, 2023. The monthly rent payable by the Company under the lease is $12,500 for the period from the closing until December 31, 2022 and $8,500 for the period from January 1, 2023 to June 30, 2023. The Company has adopted the practical expedient for short-term leases under ASC 842 which allows for leases of 12 months or less to be expensed on a straight-line basis over the lease term without reporting on the balance sheet. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 (unaudited) and December 31, 2021 (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, 2021. 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, 2022 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 2022, the Company did not realize any revenue related to such contracts. As of September 30, 2022, there are no such contracts outstanding. 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, 2022 and December 31, 2021 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 22.5% and 16.9% for the third quarter of 2022 and 2021, respectively, and 22.4% and 20.9% for the nine months ended September 30, 2022 and 2021, respectively. The Company’s federal income tax returns for the 2019, 2020 and 2021 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 2019, 2020 and 2021 federal income tax returns will expire on September 15, 2023, 2024 and 2025, respectively. The Company’s state income tax returns for the 2019 through 2021 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2025. 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 | |
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, 2022 | |
Location | |
Disaggregation of Revenue | Fastener Assembly Equipment Consolidated 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 Three Months Ended September 30, 2021: United States $ 6,300,067 $ 981,905 $ 7,281,972 Foreign 1,252,552 21,207 1,273,759 Total net sales $ 7,552,619 $ 1,003,112 $ 8,555,731 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 Nine Months Ended September 30, 2021: United States $ 18,589,576 $ 3,320,415 $ 21,909,991 Foreign 4,253,765 61,314 4,315,079 Total net sales $ 22,843,341 $ 3,381,729 $ 26,225,070 |
End Market | |
Disaggregation of Revenue | Fastener Assembly Equipment Consolidated 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 Three Months Ended September 30, 2021: Automotive $ 4,259,544 $ 27,998 $ 4,287,542 Non-automotive 3,293,075 975,114 4,268,189 Total net sales $ 7,552,619 $ 1,003,112 $ 8,555,731 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 Nine Months Ended September 30, 2021: Automotive $ 13,410,100 $ 100,953 $ 13,511,053 Non-automotive 9,433,241 3,280,776 12,714,017 Total net sales $ 22,843,341 $ 3,381,729 $ 26,225,070 |
Inventories_ Inventories (Table
Inventories: Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Tables/Schedules | |
Inventories | September 30, 2022 December 31, 2021 Raw material $ 5,018,465 $ 4,645,923 Work-in-process 3,143,844 2,181,457 Finished goods 2,395,163 2,304,400 Inventories, gross 10,557,472 9,131,780 Valuation reserves (636,000) (612,000) Inventories, net $ 9,921,472 $ 8,519,780 |
Segment Reporting_ Schedule of
Segment Reporting: Schedule of Segment Reporting by Segment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Tables/Schedules | |
Schedule of Segment Reporting by Segment | Fastener Assembly Equipment Other Consolidated 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 Three Months Ended September 30, 2021: Net sales $ 7,552,619 $ 1,003,112 0 $ 8,555,731 Depreciation 291,512 33,534 5,448 330,494 Segment operating profit 480,288 215,869 0 696,157 Selling and administrative expenses 0 0 (491,547) (491,547) Interest income 0 0 3,049 3,049 Income before income taxes $ 207,659 Capital expenditures 77,007 0 165,395 242,402 Segment assets: Accounts receivable, net 5,623,045 451,698 0 6,074,743 Inventories, net 6,553,617 1,191,653 0 7,745,270 Property, plant and equipment, net 9,986,600 1,468,262 1,263,290 12,718,152 Other assets 0 0 6,093,884 6,093,884 $ 32,632,049 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 Nine Months Ended September 30, 2021: Net sales $ 22,843,341 $ 3,381,729 0 $ 26,225,070 Depreciation 847,037 100,600 16,346 990,983 Segment operating profit 1,982,084 852,571 0 2,834,655 Selling and administrative expenses 0 0 (1,547,845) (1,547,845) Interest income 0 0 17,484 17,484 Income before income taxes $ 1,304,294 Capital expenditures 410,281 0 177,334 587,615 |
Revenue_ Disaggregation of Re_2
Revenue: Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | $ 8,567,785 | $ 8,555,731 | $ 26,788,879 | $ 26,225,070 |
UNITED STATES | ||||
Revenue | 6,965,669 | 7,281,972 | 22,459,196 | 21,909,991 |
Non-US | ||||
Revenue | 1,602,116 | 1,273,759 | 4,329,683 | 4,315,079 |
Automotive | ||||
Revenue | 4,858,658 | 4,287,542 | 14,415,301 | 13,511,053 |
Nonautomotive | ||||
Revenue | 3,709,127 | 4,268,189 | 12,373,578 | 12,714,017 |
Fastener | ||||
Revenue | 7,805,622 | 7,552,619 | 24,019,067 | 22,843,341 |
Fastener | UNITED STATES | ||||
Revenue | 6,268,813 | 6,300,067 | 19,825,721 | 18,589,576 |
Fastener | Non-US | ||||
Revenue | 1,536,809 | 1,252,552 | 4,193,346 | 4,253,765 |
Fastener | Automotive | ||||
Revenue | 4,813,646 | 4,259,544 | 14,268,638 | 13,410,100 |
Fastener | Nonautomotive | ||||
Revenue | 2,991,976 | 3,293,075 | 9,750,429 | 9,433,241 |
Assembly Equipment | ||||
Revenue | 762,163 | 1,003,112 | 2,769,812 | 3,381,729 |
Assembly Equipment | UNITED STATES | ||||
Revenue | 696,856 | 981,905 | 2,633,475 | 3,320,415 |
Assembly Equipment | Non-US | ||||
Revenue | 65,307 | 21,207 | 136,337 | 61,314 |
Assembly Equipment | Automotive | ||||
Revenue | 45,012 | 27,998 | 146,663 | 100,953 |
Assembly Equipment | Nonautomotive | ||||
Revenue | $ 717,151 | $ 975,114 | $ 2,623,149 | $ 3,280,776 |
Inventories_ Inventories (Detai
Inventories: Inventories (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Details | ||
Raw material | $ 5,018,465 | $ 4,645,923 |
Work-in-process | 3,143,844 | 2,181,457 |
Finished goods | 2,395,163 | 2,304,400 |
Inventories, gross | 10,557,472 | 9,131,780 |
Valuation reserves | (636,000) | (612,000) |
Inventories, net | $ 9,921,472 | $ 8,519,780 |
Segment Reporting_ Schedule o_2
Segment Reporting: Schedule of Segment Reporting by Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Net sales | $ 8,567,785 | $ 8,555,731 | $ 26,788,879 | $ 26,225,070 | |
Depreciation | 960,139 | 990,983 | |||
Gain on sale of property | 4,738,394 | 0 | 4,738,394 | 0 | |
Accounts receivable - Less allowances of $162,000 and $170,000, respectively | 6,578,114 | 6,578,114 | $ 5,647,984 | ||
Inventories, net | 9,921,472 | 9,921,472 | 8,519,780 | ||
Net property, plant and equipment | 11,907,654 | 11,907,654 | $ 12,473,864 | ||
Fastener | |||||
Net sales | 7,805,622 | 7,552,619 | 24,019,067 | 22,843,341 | |
Depreciation | 281,842 | 291,512 | 845,524 | 847,037 | |
Segment operating profit | 350,536 | 480,288 | 1,685,574 | 1,982,084 | |
Selling and Administrative Expenses | 0 | 0 | 0 | 0 | |
Gain on sale of property | 0 | 0 | |||
Interest income | 0 | 0 | 0 | 0 | |
Capital expenditures | 462,445 | 77,007 | 597,991 | 410,281 | |
Accounts receivable - Less allowances of $162,000 and $170,000, respectively | 6,185,810 | 5,623,045 | 6,185,810 | 5,623,045 | |
Inventories, net | 8,549,836 | 6,553,617 | 8,549,836 | 6,553,617 | |
Net property, plant and equipment | 9,575,293 | 9,986,600 | 9,575,293 | 9,986,600 | |
Other Assets | 0 | 0 | 0 | 0 | |
Assembly Equipment | |||||
Net sales | 762,163 | 1,003,112 | 2,769,812 | 3,381,729 | |
Depreciation | 33,363 | 33,534 | 100,089 | 100,600 | |
Segment operating profit | 92,977 | 215,869 | 516,367 | 852,571 | |
Selling and Administrative Expenses | 0 | 0 | 0 | 0 | |
Gain on sale of property | 0 | 0 | |||
Interest income | 0 | 0 | 0 | 0 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Accounts receivable - Less allowances of $162,000 and $170,000, respectively | 392,304 | 451,698 | 392,304 | 451,698 | |
Inventories, net | 1,371,636 | 1,191,653 | 1,371,636 | 1,191,653 | |
Net property, plant and equipment | 1,333,816 | 1,468,262 | 1,333,816 | 1,468,262 | |
Other Assets | 0 | 0 | 0 | 0 | |
Unallocated Corporate | |||||
Net sales | 0 | 0 | 0 | 0 | |
Depreciation | 4,086 | 5,448 | 14,526 | 16,346 | |
Segment operating profit | 0 | 0 | 0 | 0 | |
Selling and Administrative Expenses | (565,740) | (491,547) | (1,562,804) | (1,547,845) | |
Gain on sale of property | 4,738,394 | 4,738,394 | |||
Interest income | 4,893 | 3,049 | 8,746 | 17,484 | |
Capital expenditures | 21,925 | 165,395 | 98,082 | 177,334 | |
Accounts receivable - Less allowances of $162,000 and $170,000, respectively | 0 | 0 | 0 | 0 | |
Inventories, net | 0 | 0 | 0 | 0 | |
Net property, plant and equipment | 998,545 | 1,263,290 | 998,545 | 1,263,290 | |
Other Assets | $ 8,491,734 | $ 6,093,884 | $ 8,491,734 | $ 6,093,884 |