Chicago Rivet & Machine (CVR) 10-Q 10 May 24 2024 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 08, 2024
Details
Registrant CIK	0000019871
Fiscal Year End	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2024
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	2024
Document Fiscal Period Focus	Q1
Document Quarterly Report	true
Document Transition Report	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 1,291,132	$ 1,387,075
Short-term investments	1,374,956	1,771,120
Accounts receivable - Less allowances of $160,000	5,463,717	4,275,882
Contract assets	0	118,301
Inventories, net	6,746,675	7,327,653
Income taxes receivable	534,224	580,287
Other current assets	504,958	380,562
Total current assets	15,915,662	15,840,880
Property, Plant and Equipment
Land and improvements	1,510,513	1,510,513
Buildings and improvements	6,835,619	6,835,619
Production equipment and other	37,724,746	37,952,902
Property, Plant and Equipment, Gross	46,070,878	46,299,034
Less accumulated depreciation	34,695,580	34,633,952
Net property, plant and equipment	11,375,298	11,665,082
Deferred income taxes, net	501,773	324,943
Total assets	27,792,733	27,830,905
Current Liabilities
Accounts payable	1,388,599	788,974
Accrued wages and salaries	634,373	514,900
Other accrued expenses	313,112	129,963
Unearned revenue and customer deposits	284,377	430,179
Total current liabilities	2,620,461	1,864,016
Total liabilities	2,620,461	1,864,016
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	27,509,140	28,303,757
Treasury stock, 171,964 shares at cost	(3,922,098)	(3,922,098)
Total shareholders' equity	25,172,272	25,966,889
Total liabilities and shareholders' equity	$ 27,792,733	$ 27,830,905

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) - Parenthetical - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Condensed Consolidated Balance Sheets (Unaudited)
Preferred Stock, Par or Stated Value Per Share	$ 0	$ 0
Preferred Stock, Shares Authorized	500,000	500,000
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 1	$ 1
Common Stock, Shares Authorized	4,000,000	4,000,000
Common Stock, Shares, Issued	1,138,096	1,138,096
Common Stock, Shares, Outstanding	966,132	966,132

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Condensed Consolidated Statements of Operations (Unaudited)
Net sales	$ 7,853,181	$ 8,729,725
Cost of goods sold	7,108,619	8,252,222
Gross profit	744,562	477,503
Selling and administrative expenses	1,647,865	1,257,695
Operating loss	(903,303)	(780,192)
Other income	28,469	43,055
Loss before income taxes	(874,834)	(737,137)
Benefit for income taxes	(176,830)	(154,000)
Net loss	$ (698,004)	$ (583,137)
Per share data
Basic net loss per share	$ (0.72)	$ (0.6)
Diluted net loss per share	$ (0.72)	$ (0.6)
Basic	966,132	966,132
Diluted	966,132	966,132
Cash dividends declared per share	$ 0.1	$ 0.22

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock, Common
Beginning Balance at Dec. 31, 2022	$ 30,986,798	$ 0	$ 1,138,096	$ 447,134	$ 33,323,666	$ (3,922,098)
Common Stock Shares at Dec. 31, 2022			966,132
Treasury Stock Shares at Dec. 31, 2022						171,964
Net loss	(583,137)				(583,137)
Dividends declared	(212,549)				(212,549)
Ending Balance at Mar. 31, 2023	30,191,112	0	$ 1,138,096	447,134	32,527,980	$ (3,922,098)
Common Stock Shares at Mar. 31, 2023			966,132
Treasury Stock Shares at Mar. 31, 2023						171,964
Beginning Balance at Dec. 31, 2023	$ 25,966,889	0	$ 1,138,096	447,134	28,303,757	$ (3,922,098)
Common Stock Shares at Dec. 31, 2023	966,132		966,132
Treasury Stock Shares at Dec. 31, 2023						171,964
Net loss	$ (698,004)				(698,004)
Dividends declared	(96,613)				(96,613)
Ending Balance at Mar. 31, 2024	$ 25,172,272	$ 0	$ 1,138,096	$ 447,134	$ 27,509,140	$ (3,922,098)
Common Stock Shares at Mar. 31, 2024	966,132		966,132
Treasury Stock Shares at Mar. 31, 2024						171,964

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - Parenthetical - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Condensed Consolidated Statements of Shareholders' Equity (Unaudited)
Cash dividends declared per share	$ 0.1	$ 0.22

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities
Net loss	$ (698,004)	$ (583,137)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation	323,405	306,032
Gain on disposal of equipment	(36,886)	0
Deferred income taxes	(176,830)	(43,000)
Changes in operating assets and liabilities
Accounts receivable	(1,187,835)	(1,197,937)
Contract assets	118,301	0
Inventories	580,978	(877,722)
Other current assets	(78,333)	(160,452)
Accounts payable	599,625	924,168
Accrued wages and salaries	119,473	212,746
Other accrued expenses	183,149	(212,227)
Unearned revenue and customer deposits	(145,802)	(19,881)
Net cash used in operating activities	(398,759)	(1,651,410)
Cash flows from investing activities
Capital expenditures	(93,085)	(413,419)
Proceeds from the sale of equipment	96,350	0
Proceeds from short-term investments	1,133,641	498,000
Purchases of short-term investments	(737,477)	0
Net cash provided by investing activities	399,429	84,581
Cash flows from financing activities
Cash dividends paid	(96,613)	(212,549)
Net cash used in financing activities	(96,613)	(212,549)
Net decrease in cash and cash equivalents	(95,943)	(1,779,378)
Cash and cash equivalents at beginning of period	1,387,075	4,045,101
Cash and cash equivalents at end of period	$ 1,291,132	$ 2,265,723

Accounting Policies

Accounting Policies	3 Months Ended
	Mar. 31, 2024
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 March 31, 2024 (unaudited) and December 31, 2023 (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, 2023. 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 month period ended March 31, 2024 are not necessarily indicative of the results to be expected for the year. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose its significant segment expense categories and amounts for each reportable segment. The new guidance is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. The Company is evaluating the impact of this ASU. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures providing investors with information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The new guidance is effective for annual periods beginning after December 31, 2024. The Company is evaluating the impact that it will have on our consolidated financial statements and disclosures.

Risks and Uncertainties

Risks and Uncertainties	3 Months Ended
	Mar. 31, 2024
Notes
Risks and Uncertainties	2. The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily in the automotive industry. The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States. The Company has established an allowance for accounts that may become uncollectible in the future. This estimated allowance is based primarily on management's evaluation of the financial condition of the customer and historical experience. The Company monitors its accounts receivable and charges to expense an amount equal to its estimate of potential credit losses. The Company considers a number of factors in determining its estimates, including the length of time its trade accounts receivable are past due, the Company's previous loss history and the customer's current ability to pay its obligation. The Company also considers current economic conditions, the economic outlook and industry-specific factors in its evaluation. Accounts receivable balances are charged off against the allowance when it is determined that the receivable will not be recovered.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2024
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, liquidity, results of operations or cash flows. The Company recognizes a provision if it is probable that an outflow of cash or other economic resources that can be reliably measured will be required to settle the provision. In determining the likelihood and timing of potential cash outflows, management needs to make estimates, the assessment of which is based in part on internal and external financial and legal guidance and other related factors. For contingencies, the Company is required to exercise significant judgement to determine whether the risk of loss is possible but not probable. Contingencies involve inherent uncertainties including, but not limited to, negotiations between affected parties, among other factors, and the amount of actual loss may be significantly more or less that what was provided for with respect to such contingencies. The Company was recently notified by one of its customers that certain fasteners manufactured by the Company’s wholly-owned subsidiary, H&L Tool Company Inc., may not conform to customer specifications. These fasteners become part of an assembly that is ultimately used in the braking system of certain vehicles. Based on information provided to the Company by the customer and the Company’s internal review, which is ongoing, we understand that it was necessary for the customer to identify and sort the non-conforming parts in its inventory and take certain other related actions as a result of the alleged non-conforming parts. The customer has also indicated that its end customer has incurred costs relating to the alleged defective part, including costs to repair certain of the vehicles that included these non-conforming fasteners. Based on discussions with our customer as to the scope of the actions taken by the customer to date and the Company’s own internal analysis to date, we determined an estimate of $243,000 as a contingent liability in our financial statements during the three months ended March 31, 2024, in anticipation of potential reimbursement of certain expenses that the customer may have incurred as a result of the non-conforming parts. Our discussions with the customer and our internal review process are ongoing, and the ultimate amount of such liability, if any, may be more or less than the amount reflected in the financial statements for the first quarter of 2024. The Company may also incur additional potentially significant costs related to this issue, which could materially and adversely affect our results of operations and financial condition. At this time, the Company is continuing its investigation and cannot quantify potential additional financial liability, if any, due to the ultimate costs that may or may not be incurred by the parties involved in this matter, and the allocation of those costs among the parties involved. It is not possible at this time to establish the ultimate amount of any such contingent liabilities, including those related to any legal proceedings that may result related to this matter. Accordingly, no additional amount has been accrued in our financial statements at March 31, 2024.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2024
Notes
Revenue	4. Revenue—The Company operates in the fastener industry and is in the business of producing 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 first quarter of 2024, the Company realized revenue of $106,500 related to such contracts and has a remaining performance obligation of $16,600 which is expected to be recognized in the next three months. Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue. Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of operations. These adjustments primarily relate to customer returns and allowances, which vary over time. 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 March 31, 2024 and December 31, 2023 reserves for warranty claims were not material. Cash received by the Company prior to transfer of control is recorded as unearned revenue. Shipping and handling fees billed to customers are recognized in net sales, and related costs as cost of sales, when incurred. Sales commissions are expensed when incurred because the amortization period is less than one year. These costs are recorded within selling and administrative expenses in the statement of operations. The following table presents revenue by segment, further disaggregated by end-market: Fastener Assembly Equipment Consolidated Three Months Ended March 31, 2024: Automotive $ 4,629,190 $ 48,665 $ 4,677,955 Non-automotive 2,094,564 1,080,662 3,175,226 Total net sales $ 6,723,854 $ 1,129,327 $ 7,853,181 Three Months Ended March 31, 2023: Automotive $ 5,006,190 $ 44,878 $ 5,051,068 Non-automotive 2,850,623 828,034 3,678,657 Total net sales $ 7,856,813 $ 872,912 $ 8,729,725 The following table presents revenue by segment, further disaggregated by location: Fastener Assembly Equipment Consolidated Three Months Ended March 31, 2024: United States $ 5,435,993 $ 1,109,221 $ 6,545,214 Foreign 1,287,861 20,106 1,307,967 Total net sales $ 6,723,854 $ 1,129,327 $ 7,853,181 Three Months Ended March 31, 2023: United States $ 6,391,747 $ 786,571 $ 7,178,318 Foreign 1,465,066 86,341 1,551,407 Total net sales $ 7,856,813 $ 872,912 $ 8,729,725

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2024
Notes
Income Taxes	5. The Company’s effective tax rates were approximately 22.9% and 20.9% for the first quarter of 2024 and 2023, respectively. The Company’s federal income tax returns for the 2020 through 2023 tax years are subject to examination by the Internal Revenue Service (“IRS”). 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 of limitation have been extended on any of the Company’s federal income tax filings. The statute of limitations on the Company’s 2020 through 2023 federal income tax returns will expire on September 15, 2024 through 2027, respectively. The Company’s state income tax returns for the 2020 through 2023 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2027. The Company is not currently under examination by any state authority for income tax purposes and no statutes of limitation for state income tax filings have been extended.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2024
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 at the dates indicated is as follows: March 31, 2024 December 31, 2023 Raw material $ 2,432,691 $ 2,878,869 Work-in-process 2,463,760 2,374,795 Finished goods 2,390,224 2,614,989 Inventories, gross 7,286,675 7,868,653 Valuation reserves (540,000) (541,000) Inventories, net $ 6,746,675 $ 7,327,653

Segment Reporting

Segment Reporting	3 Months Ended
	Mar. 31, 2024
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 for the periods presented is as follows: Fastener Assembly Equipment Unallocated Corporate Consolidated Three Months Ended March 31, 2024: Net sales $ 6,723,854 $ 1,129,327 0 $ 7,853,181 Depreciation 293,381 29,484 540 323,405 Segment operating profit (loss) (389,124) 322,621 0 (66,503) Selling and administrative expenses 0 0 (836,800) (836,800) Interest income 0 0 28,469 28,469 Loss before income taxes $ (874,834) Capital expenditures 54,222 38,863 0 93,085 Segment assets: Accounts receivable, net 4,871,135 592,582 0 5,463,717 Inventories, net 5,227,398 1,519,277 0 6,746,675 Property, plant and equipment, net 9,159,982 1,195,183 1,020,133 11,375,298 Other assets 0 0 4,207,043 4,207,043 $ 27,792,733 Three Months Ended March 31, 2023: Net sales $ 7,856,813 $ 872,912 0 $ 8,729,725 Depreciation 272,636 30,732 2,664 306,032 Segment operating profit (loss) (428,501) 189,315 0 (239,186) Selling and administrative expenses 0 0 (538,537) (538,537) Interest income 0 0 40,586 40,586 Loss before income taxes $ (737,137) Capital expenditures 336,066 0 77,353 413,419 Segment assets: Accounts receivable, net 5,857,565 315,509 0 6,173,074 Inventories, net 8,566,031 1,432,921 0 9,998,952 Property, plant and equipment, net 9,625,759 1,272,765 1,070,656 11,969,180 Other assets 0 0 5,551,041 5,551,041 $ 33,692,247

Accounting Policies (Policies)

Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2024
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 March 31, 2024 (unaudited) and December 31, 2023 (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, 2023. 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 month period ended March 31, 2024 are not necessarily indicative of the results to be expected for the year. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose its significant segment expense categories and amounts for each reportable segment. The new guidance is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. The Company is evaluating the impact of this ASU. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures providing investors with information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The new guidance is effective for annual periods beginning after December 31, 2024. The Company is evaluating the impact that it will have on our consolidated financial statements and disclosures.
Risks and Uncertainties	2. The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily in the automotive industry. The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States. The Company has established an allowance for accounts that may become uncollectible in the future. This estimated allowance is based primarily on management's evaluation of the financial condition of the customer and historical experience. The Company monitors its accounts receivable and charges to expense an amount equal to its estimate of potential credit losses. The Company considers a number of factors in determining its estimates, including the length of time its trade accounts receivable are past due, the Company's previous loss history and the customer's current ability to pay its obligation. The Company also considers current economic conditions, the economic outlook and industry-specific factors in its evaluation. Accounts receivable balances are charged off against the allowance when it is determined that the receivable will not be recovered.
Commitments and Contingencies	3. The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, in the normal course of business. While it is not possible at this time to establish the ultimate amount of liability with respect to contingent liabilities, including those related to legal proceedings, management is of the opinion that the aggregate amount of any such liabilities, for which provision has not been made, will not have a material adverse effect on the Company's financial position, liquidity, results of operations or cash flows. The Company recognizes a provision if it is probable that an outflow of cash or other economic resources that can be reliably measured will be required to settle the provision. In determining the likelihood and timing of potential cash outflows, management needs to make estimates, the assessment of which is based in part on internal and external financial and legal guidance and other related factors. For contingencies, the Company is required to exercise significant judgement to determine whether the risk of loss is possible but not probable. Contingencies involve inherent uncertainties including, but not limited to, negotiations between affected parties, among other factors, and the amount of actual loss may be significantly more or less that what was provided for with respect to such contingencies. The Company was recently notified by one of its customers that certain fasteners manufactured by the Company’s wholly-owned subsidiary, H&L Tool Company Inc., may not conform to customer specifications. These fasteners become part of an assembly that is ultimately used in the braking system of certain vehicles. Based on information provided to the Company by the customer and the Company’s internal review, which is ongoing, we understand that it was necessary for the customer to identify and sort the non-conforming parts in its inventory and take certain other related actions as a result of the alleged non-conforming parts. The customer has also indicated that its end customer has incurred costs relating to the alleged defective part, including costs to repair certain of the vehicles that included these non-conforming fasteners. Based on discussions with our customer as to the scope of the actions taken by the customer to date and the Company’s own internal analysis to date, we determined an estimate of $243,000 as a contingent liability in our financial statements during the three months ended March 31, 2024, in anticipation of potential reimbursement of certain expenses that the customer may have incurred as a result of the non-conforming parts. Our discussions with the customer and our internal review process are ongoing, and the ultimate amount of such liability, if any, may be more or less than the amount reflected in the financial statements for the first quarter of 2024. The Company may also incur additional potentially significant costs related to this issue, which could materially and adversely affect our results of operations and financial condition. At this time, the Company is continuing its investigation and cannot quantify potential additional financial liability, if any, due to the ultimate costs that may or may not be incurred by the parties involved in this matter, and the allocation of those costs among the parties involved. It is not possible at this time to establish the ultimate amount of any such contingent liabilities, including those related to any legal proceedings that may result related to this matter. Accordingly, no additional amount has been accrued in our financial statements at March 31, 2024.
Revenue	4. Revenue—The Company operates in the fastener industry and is in the business of producing 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 first quarter of 2024, the Company realized revenue of $106,500 related to such contracts and has a remaining performance obligation of $16,600 which is expected to be recognized in the next three months. Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue. Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of operations. These adjustments primarily relate to customer returns and allowances, which vary over time. 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 March 31, 2024 and December 31, 2023 reserves for warranty claims were not material. Cash received by the Company prior to transfer of control is recorded as unearned revenue. Shipping and handling fees billed to customers are recognized in net sales, and related costs as cost of sales, when incurred. Sales commissions are expensed when incurred because the amortization period is less than one year. These costs are recorded within selling and administrative expenses in the statement of operations.
Income Taxes	5. The Company’s effective tax rates were approximately 22.9% and 20.9% for the first quarter of 2024 and 2023, respectively. The Company’s federal income tax returns for the 2020 through 2023 tax years are subject to examination by the Internal Revenue Service (“IRS”). 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 of limitation have been extended on any of the Company’s federal income tax filings. The statute of limitations on the Company’s 2020 through 2023 federal income tax returns will expire on September 15, 2024 through 2027, respectively. The Company’s state income tax returns for the 2020 through 2023 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2027. The Company is not currently under examination by any state authority for income tax purposes and no statutes of limitation 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)	3 Months Ended
	Mar. 31, 2024
Location
Disaggregation of Revenue	Fastener Assembly Equipment Consolidated Three Months Ended March 31, 2024: United States $ 5,435,993 $ 1,109,221 $ 6,545,214 Foreign 1,287,861 20,106 1,307,967 Total net sales $ 6,723,854 $ 1,129,327 $ 7,853,181 Three Months Ended March 31, 2023: United States $ 6,391,747 $ 786,571 $ 7,178,318 Foreign 1,465,066 86,341 1,551,407 Total net sales $ 7,856,813 $ 872,912 $ 8,729,725
End Market
Disaggregation of Revenue	Fastener Assembly Equipment Consolidated Three Months Ended March 31, 2024: Automotive $ 4,629,190 $ 48,665 $ 4,677,955 Non-automotive 2,094,564 1,080,662 3,175,226 Total net sales $ 6,723,854 $ 1,129,327 $ 7,853,181 Three Months Ended March 31, 2023: Automotive $ 5,006,190 $ 44,878 $ 5,051,068 Non-automotive 2,850,623 828,034 3,678,657 Total net sales $ 7,856,813 $ 872,912 $ 8,729,725

Inventories_ Inventories (Table

Inventories: Inventories (Tables)	3 Months Ended
	Mar. 31, 2024
Tables/Schedules
Inventories	March 31, 2024 December 31, 2023 Raw material $ 2,432,691 $ 2,878,869 Work-in-process 2,463,760 2,374,795 Finished goods 2,390,224 2,614,989 Inventories, gross 7,286,675 7,868,653 Valuation reserves (540,000) (541,000) Inventories, net $ 6,746,675 $ 7,327,653

Segment Reporting_ Schedule of

Segment Reporting: Schedule of Segment Reporting by Segment (Tables)	3 Months Ended
	Mar. 31, 2024
Tables/Schedules
Schedule of Segment Reporting by Segment	Fastener Assembly Equipment Unallocated Corporate Consolidated Three Months Ended March 31, 2024: Net sales $ 6,723,854 $ 1,129,327 0 $ 7,853,181 Depreciation 293,381 29,484 540 323,405 Segment operating profit (loss) (389,124) 322,621 0 (66,503) Selling and administrative expenses 0 0 (836,800) (836,800) Interest income 0 0 28,469 28,469 Loss before income taxes $ (874,834) Capital expenditures 54,222 38,863 0 93,085 Segment assets: Accounts receivable, net 4,871,135 592,582 0 5,463,717 Inventories, net 5,227,398 1,519,277 0 6,746,675 Property, plant and equipment, net 9,159,982 1,195,183 1,020,133 11,375,298 Other assets 0 0 4,207,043 4,207,043 $ 27,792,733 Three Months Ended March 31, 2023: Net sales $ 7,856,813 $ 872,912 0 $ 8,729,725 Depreciation 272,636 30,732 2,664 306,032 Segment operating profit (loss) (428,501) 189,315 0 (239,186) Selling and administrative expenses 0 0 (538,537) (538,537) Interest income 0 0 40,586 40,586 Loss before income taxes $ (737,137) Capital expenditures 336,066 0 77,353 413,419 Segment assets: Accounts receivable, net 5,857,565 315,509 0 6,173,074 Inventories, net 8,566,031 1,432,921 0 9,998,952 Property, plant and equipment, net 9,625,759 1,272,765 1,070,656 11,969,180 Other assets 0 0 5,551,041 5,551,041 $ 33,692,247

Revenue_ Disaggregation of Re_2

Revenue: Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue	$ 7,853,181	$ 8,729,725
UNITED STATES
Revenue	6,545,214	7,178,318
Non-US
Revenue	1,307,967	1,551,407
Automotive
Revenue	4,677,955	5,051,068
NonAutomotive
Revenue	3,175,226	3,678,657
Fastener
Revenue	6,723,854	7,856,813
Fastener | UNITED STATES
Revenue	5,435,993	6,391,747
Fastener | Non-US
Revenue	1,287,861	1,465,066
Fastener | Automotive
Revenue	4,629,190	5,006,190
Fastener | NonAutomotive
Revenue	2,094,564	2,850,623
Assembly Equipment
Revenue	1,129,327	872,912
Assembly Equipment | UNITED STATES
Revenue	1,109,221	786,571
Assembly Equipment | Non-US
Revenue	20,106	86,341
Assembly Equipment | Automotive
Revenue	48,665	44,878
Assembly Equipment | NonAutomotive
Revenue	$ 1,080,662	$ 828,034

Inventories_ Inventories (Detai

Inventories: Inventories (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Details
Raw material	$ 2,432,691	$ 2,878,869
Work-in-process	2,463,760	2,374,795
Finished goods	2,390,224	2,614,989
Inventories, gross	7,286,675	7,868,653
Valuation reserves	(540,000)	(541,000)
Inventories, net	$ 6,746,675	$ 7,327,653

Segment Reporting_ Schedule o_2

Segment Reporting: Schedule of Segment Reporting by Segment (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Net sales	$ 7,853,181	$ 8,729,725
Depreciation	323,405	306,032
Accounts receivable - Less allowances of $160,000	5,463,717		$ 4,275,882
Inventories, net	6,746,675		7,327,653
Net property, plant and equipment	11,375,298		$ 11,665,082
Fastener
Net sales	6,723,854	7,856,813
Depreciation	293,381	272,636
Segment operating profit	(389,124)	(428,501)
Selling and Administrative Expenses	0	0
Interest income	0	0
Capital expenditures	54,222	336,066
Accounts receivable - Less allowances of $160,000	4,871,135	5,857,565
Inventories, net	5,227,398	8,566,031
Net property, plant and equipment	9,159,982	9,625,759
Other Assets	0	0
Assembly Equipment
Net sales	1,129,327	872,912
Depreciation	29,484	30,732
Segment operating profit	322,621	189,315
Selling and Administrative Expenses	0	0
Interest income	0	0
Capital expenditures	38,863	0
Accounts receivable - Less allowances of $160,000	592,582	315,509
Inventories, net	1,519,277	1,432,921
Net property, plant and equipment	1,195,183	1,272,765
Other Assets	0	0
Corporate Segment
Net sales	0	0
Depreciation	540	2,664
Segment operating profit	0	0
Selling and Administrative Expenses	(836,800)	(538,537)
Interest income	28,469	40,586
Capital expenditures	0	77,353
Accounts receivable - Less allowances of $160,000	0	0
Inventories, net	0	0
Net property, plant and equipment	1,020,133	1,070,656
Other Assets	$ 4,207,043	$ 5,551,041