Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 000-01227

 

 

Chicago Rivet & Machine Co.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Illinois   36-0904920
(State or Other Jurisdiction of   (I.R.S. Employer
Incorporation or Organization)   Identification No.)
901 Frontenac Road, Naperville, Illinois   60563
(Address of Principal Executive Offices)   (Zip Code)

(630) 357-8500

Registrant’s Telephone Number, Including Area Code

 

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically, every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Common Stock, par value $1.00 per share   CVR   NYSE American (Trading privileges only, not registered)

As of August 2, 2019, there were 966,132 shares of the registrant’s common stock outstanding.

 

 

 


Table of Contents

CHICAGO RIVET & MACHINE CO.

INDEX

 

     Page  

PART I. FINANCIAL INFORMATION (Unaudited)

  

Condensed Consolidated Balance Sheets at June  30, 2019 and December 31, 2018

     2-3  

Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2019 and 2018

     4  

Condensed Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended June 30, 2019 and 2018

     5  

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018

     6  

Notes to the Condensed Consolidated Financial Statements

     7-11  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

     12-13  

Controls and Procedures

     14  

PART II. OTHER INFORMATION

     15  

 

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Item 1. Financial Statements.

CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Balance Sheets

June 30, 2019 and December 31, 2018

 

     June 30,      December 31,  
     2019      2018  
     (Unaudited)         
Assets      

Current Assets:

     

Cash and cash equivalents

   $ 908,075      $ 706,873  

Certificates of deposit

     5,578,000        7,063,000  

Accounts receivable - Less allowances of $140,000

     5,787,355        5,529,307  

Inventories, net

     6,098,823        6,100,391  

Prepaid income taxes

     117,186        150,686  

Other current assets

     399,607        438,222  
  

 

 

    

 

 

 

Total current assets

     18,889,046        19,988,479  
  

 

 

    

 

 

 

Property, Plant and Equipment:

     

Land and improvements

     1,636,749        1,632,299  

Buildings and improvements

     8,327,006        8,234,182  

Production equipment and other

     36,455,435        35,627,443  
  

 

 

    

 

 

 
     46,419,190        45,493,924  

Less accumulated depreciation

     32,550,682        32,235,778  
  

 

 

    

 

 

 

Net property, plant and equipment

     13,868,508        13,258,146  
  

 

 

    

 

 

 

Total assets

   $ 32,757,554      $ 33,246,625  
  

 

 

    

 

 

 

See Notes to the Condensed Consolidated Financial Statements

 

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Table of Contents

CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Balance Sheets

June 30, 2019 and December 31, 2018

 

 

     June 30,     December 31,  
     2019     2018  
     (Unaudited)        

Liabilities and Shareholders’ Equity

    

Current Liabilities:

    

Accounts payable

   $ 803,921     $ 1,060,231  

Accrued wages and salaries

     962,653       701,434  

Other accrued expenses

     280,605       475,973  

Unearned revenue and customer deposits

     150,079       328,154  
  

 

 

   

 

 

 

Total current liabilities

     2,197,258       2,565,792  

Deferred income taxes

     999,084       921,084  
  

 

 

   

 

 

 

Total liabilities

     3,196,342       3,486,876  
  

 

 

   

 

 

 

Commitments and contingencies (Note 3)

    

Shareholders’ Equity:

    

Preferred stock, no par value, 500,000 shares authorized: none outstanding

     —         —    

Common stock, $1.00 par value, 4,000,000 shares authorized: 1,138,096 shares issued; 966,132 shares outstanding

     1,138,096       1,138,096  

Additional paid-in capital

     447,134       447,134  

Retained earnings

     31,898,080       32,096,617  

Treasury stock, 171,964 shares at cost

     (3,922,098     (3,922,098
  

 

 

   

 

 

 

Total shareholders’ equity

     29,561,212       29,759,749  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 32,757,554     $ 33,246,625  
  

 

 

   

 

 

 

See Notes to the Condensed Consolidated Financial Statements

 

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CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Statements of Income

For the Three and Six Months Ended June 30, 2019 and 2018

(Unaudited)

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2019      2018      2019      2018  

Net sales

   $ 8,875,451      $ 9,792,784      $ 17,497,129      $ 19,804,425  

Cost of goods sold

     7,327,481        7,504,350        14,287,396        15,172,986  
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     1,547,970        2,288,434        3,209,733        4,631,439  

Selling and administrative expenses

     1,306,665        1,411,969        2,649,361        2,876,687  
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating profit

     241,305        876,465        560,372        1,754,752  

Other income

     49,254        37,627        98,029        71,128  
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     290,559        914,092        658,401        1,825,880  

Provision for income taxes

     61,000        211,000        142,000        415,000  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 229,559      $ 703,092      $ 516,401      $ 1,410,880  
  

 

 

    

 

 

    

 

 

    

 

 

 

Per share data, basic and diluted:

           

Net income per share

   $ 0.24      $ 0.73      $ 0.54      $ 1.46  
  

 

 

    

 

 

    

 

 

    

 

 

 

Average common shares outstanding

     966,132        966,132        966,132        966,132  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash dividends declared per share

   $ 0.22      $ 0.21      $ 0.74      $ 0.72  
  

 

 

    

 

 

    

 

 

    

 

 

 

See Notes to the Condensed Consolidated Financial Statements

 

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CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Statements of Shareholders’ Equity

For the Three and Six Months Ended June 30, 2019 and 2018

(Unaudited)

 

     Preferred      Common Stock      Additional Paid-in            Treasury Stock, at Cost        
     Stock      Shares      Amount      Capital      Retained Earnings     Shares      Amount     Total  

Balance, December 31, 2018

   $ —          966,132      $ 1,138,096      $ 447,134      $ 32,096,617       171,964      $ (3,922,098   $ 29,759,749  

Net Income

               $ 286,842          $ 286,842  

Dividends Declared ($0.52 per share)

               $ (502,389        $ (502,389
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, March 31, 2019

   $ —          966,132      $ 1,138,096      $ 447,134      $ 31,881,070       171,964      $ (3,922,098   $ 29,544,202  

Net Income

               $ 229,559          $ 229,559  

Dividends Declared ($0.22 per share)

               $ (212,549        $ (212,549
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, June 30, 2019

   $ —          966,132      $ 1,138,096      $ 447,134      $ 31,898,080       171,964      $ (3,922,098   $ 29,561,212  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, December 31, 2017

   $ —          966,132      $ 1,138,096      $ 447,134      $ 31,196,823       171,964      $ (3,922,098   $ 28,859,955  

Net Income

               $ 707,788          $ 707,788  

Dividends Declared ($0.51 per share)

               $ (492,727        $ (492,727
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, March 31, 2018

   $ —          966,132      $ 1,138,096      $ 447,134      $ 31,411,884       171,964      $ (3,922,098   $ 29,075,016  

Net Income

               $ 703,092          $ 703,092  

Dividends Declared ($0.21 per share)

               $ (202,888        $ (202,888
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, June 30, 2018

   $ —          966,132      $ 1,138,096      $ 447,134      $ 31,912,088       171,964      $ (3,922,098   $ 29,575,220  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

See Notes to the Condensed Consolidated Financial Statements

 

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CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2019 and 2018

(Unaudited)

 

     2019     2018  

Cash flows from operating activities:

    

Net income

   $ 516,401     $ 1,410,880  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation

     682,667       653,537  

Gain on disposal of equipment

     (5,000     (17,485

Deferred income taxes

     78,000       (27,000

Changes in operating assets and liabilities:

    

Accounts receivable

     (258,048     (1,580,776

Inventories

     1,568       (922,121

Other current assets and prepaid income taxes

     72,115       111,554  

Accounts payable

     (265,603     779,782  

Accrued wages and salaries

     261,219       246,972  

Other accrued expenses

     (195,368     137,353  

Unearned revenue and customer deposits

     (178,075     (91,205
  

 

 

   

 

 

 

Net cash provided by operating activities

     709,876       701,491  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Capital expenditures

     (1,283,736     (635,718

Proceeds from the sale of equipment

     5,000       17,485  

Proceeds from certificates of deposit

     4,324,000       1,992,000  

Purchases of certificates of deposit

     (2,839,000     (1,245,000
  

 

 

   

 

 

 

Net cash provided by investing activities

     206,264       128,767  
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Cash dividends paid

     (714,938     (695,615
  

 

 

   

 

 

 

Net cash used in financing activities

     (714,938     (695,615
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     201,202       134,643  

Cash and cash equivalents at beginning of period

     706,873       1,152,569  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 908,075     $ 1,287,212  
  

 

 

   

 

 

 

Supplemental schedule of non-cash investing activities:

    

Capital expenditures in accounts payable

   $ 9,293     $ —    

See Notes to the Condensed Consolidated Financial Statements

 

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CHICAGO RIVET & MACHINE CO.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2019 (unaudited) and December 31, 2018 (audited) and the results of operations and changes in cash flows for the indicated periods. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules. Please refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the three and six-month period ending June 30, 2019 are not necessarily indicative of the results to be expected for the year.

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

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 concentrations of credit risk primarily within the automotive industry and in the Midwestern United States.

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.

4. Revenue—The Company operates in the fastener industry and is in the business of manufacturing and selling rivets, cold-formed fasteners and parts, screw machine products, automatic rivet setting machines and parts and tools for such machines. Revenue is recognized when control of the promised goods or services is transferred to our customers, generally upon shipment of goods or completion of services, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. For certain assembly equipment segment transactions, revenue is recognized based on progress toward completion of the performance obligation using a labor-based measure. Labor incurred and specific material costs are compared to milestone payments per sales contract. Based on our experience, this method most accurately reflects the transfer of goods under such contracts. During the second quarter of 2019, the Company realized $219,700 related to such a contract and $118,300 is the remaining performance obligation under that contract which the Company expects to recognize as revenue in the third quarter.

Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue. Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of income. These adjustments primarily relate to customer returns and allowances. The Company records a liability and reduction in sales for estimated product returns based upon historical experience. If we determine that our obligation under warranty claims is probable and subject to reasonable determination, an estimate of that liability is recorded as an offset against revenue at that time. As of June 30, 2019 and December 31, 2018 reserves for warranty claims were not material. Cash received by the Company prior to shipment is recorded as unearned revenue.

Shipping and handling fees billed to customers are recognized in net sales, and related costs as cost of sales, when incurred.

 

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Sales commissions are expensed when incurred because the amortization period is less than one year. These costs are recorded within selling and administrative expenses in the statement of income.

The following table presents revenue by segment, further disaggregated by end-market:

 

     Fastener      Assembly
Equipment
     Consolidated  

Three Months Ended June 30, 2019:

        

Automotive

     4,880,038        63,650        4,943,688  

Non-automotive

     2,936,666        995,097        3,931,763  
  

 

 

    

 

 

    

 

 

 

Total net sales

     7,816,704        1,058,747        8,875,451  
  

 

 

    

 

 

    

 

 

 

Three Months Ended June 30, 2018:

        

Automotive

     5,845,574        38,842        5,884,416  

Non-automotive

     3,188,701        719,667        3,908,368  
  

 

 

    

 

 

    

 

 

 

Total net sales

     9,034,275        758,509        9,792,784  
  

 

 

    

 

 

    

 

 

 

Six Months Ended June 30, 2019:

        

Automotive

     9,598,254        105,415        9,703,669  

Non-automotive

     5,797,570        1,995,890        7,793,460  
  

 

 

    

 

 

    

 

 

 

Total net sales

     15,395,824        2,101,305        17,497,129  
  

 

 

    

 

 

    

 

 

 

Six Months Ended June 30, 2018:

        

Automotive

     11,913,584        88,905        12,002,489  

Non-automotive

     6,045,790        1,756,146        7,801,936  
  

 

 

    

 

 

    

 

 

 

Total net sales

     17,959,374        1,845,051        19,804,425  
  

 

 

    

 

 

    

 

 

 

The following table presents revenue by segment, further disaggregated by location:

 

     Fastener      Assembly
Equipment
     Consolidated  

Three Months Ended June 30, 2019:

        

United States

     6,612,996        951,679        7,564,675  

Foreign

     1,203,708        107,068        1,310,776  
  

 

 

    

 

 

    

 

 

 

Total net sales

     7,816,704        1,058,747        8,875,451  
  

 

 

    

 

 

    

 

 

 

Three Months Ended June 30, 2018:

        

United States

     7,617,546        710,745        8,328,291  

Foreign

     1,416,729        47,764        1,464,493  
  

 

 

    

 

 

    

 

 

 

Total net sales

     9,034,275        758,509        9,792,784  
  

 

 

    

 

 

    

 

 

 

Six Months Ended June 30, 2019:

        

United States

     13,194,334        1,907,989        15,102,323  

Foreign

     2,201,490        193,316        2,394,806  
  

 

 

    

 

 

    

 

 

 

Total net sales

     15,395,824        2,101,305        17,497,129  
  

 

 

    

 

 

    

 

 

 

Six Months Ended June 30, 2018:

        

United States

     15,299,192        1,751,614        17,050,806  

Foreign

     2,660,182        93,437        2,753,619  
  

 

 

    

 

 

    

 

 

 

Total net sales

     17,959,374        1,845,051        19,804,425  
  

 

 

    

 

 

    

 

 

 

5. The Company’s effective tax rates were approximately 21.0% and 23.1% for the second quarter of 2019 and 2018, respectively, and 21.6% and 22.7% for the six months ended June 30, 2019 and 2018, respectively.

 

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The Company’s federal income tax returns for the 2015 through 2018 tax years are subject to examination by the Internal Revenue Service (“IRS”). While it may be possible that a reduction could occur with respect to the Company’s unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a material change to the results of operations or financial condition of the Company. No statutes have been extended on any of the Company’s federal income tax filings. The statute of limitations on the Company’s 2015 through 2018 federal income tax returns will expire on September 15, 2019 through 2022, respectively.

The Company’s state income tax returns for the 2015 through 2018 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2022. The Company is not currently under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended.

6. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method. A summary of inventories is as follows:

 

     June 30, 2019      December 31, 2018  

Raw material

   $ 2,702,486      $ 2,798,918  

Work-in-process

     1,873,733        1,878,977  

Finished goods

     2,097,604        2,001,496  
  

 

 

    

 

 

 

Inventories, gross

     6,673,823        6,679,391  

Valuation reserves

     (575,000      (579,000
  

 

 

    

 

 

 

Inventories, net

   $ 6,098,823      $ 6,100,391  
  

 

 

    

 

 

 

 

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CHICAGO RIVET & MACHINE CO.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7. Segment Information—The Company operates in two business segments as determined by its products. The fastener segment includes rivets, cold-formed fasteners and parts and screw machine products. The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines. Information by segment is as follows:

 

     Fastener      Assembly
Equipment
     Other      Consolidated  

Three Months Ended June 30, 2019:

           

Net sales

   $ 7,816,704      $ 1,058,747      $ —        $ 8,875,451  

Depreciation

     305,082        31,453        9,743        346,278  

Segment operating profit

     487,305        315,802        —          803,107  

Selling and administrative expenses

     —          —          (548,052      (548,052

Interest income

     —          —          35,504        35,504  
           

 

 

 

Income before income taxes

            $ 290,559  
           

 

 

 

Capital expenditures

     284,573        102,324        —          386,897  

Segment assets:

           

Accounts receivable, net

     5,426,139        361,216        —          5,787,355  

Inventories, net

     4,996,608        1,102,215        —          6,098,823  

Property, plant and equipment, net

     11,164,067        1,745,444        958,997        13,868,508  

Other assets

     —          —          7,002,868        7,002,868  
           

 

 

 
            $ 32,757,554  
           

 

 

 

Three Months Ended June 30, 2018:

           

Net sales

   $ 9,034,275      $ 758,509      $ —        $ 9,792,784  

Depreciation

     292,378        27,298        7,341        327,017  

Segment operating profit

     1,229,717        249,376        —          1,479,093  

Selling and administrative expenses

     —          —          (591,640      (591,640

Interest income

     —          —          26,639        26,639  
           

 

 

 

Income before income taxes

            $ 914,092  
           

 

 

 

Capital expenditures

     281,692        —          127,599        409,291  

Segment assets:

           

Accounts receivable, net

     6,508,150        399,276        —          6,907,426  

Inventories, net

     4,399,770        1,050,451        —          5,450,221  

Property, plant and equipment, net

     10,164,570        1,619,454        755,110        12,539,134  

Other assets

     —          —          8,680,688        8,680,688  
           

 

 

 
            $ 33,577,469  
           

 

 

 

 

10


Table of Contents

CHICAGO RIVET & MACHINE CO.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

     Fastener      Assembly
Equipment
     Other      Consolidated  

Six Months Ended June 30, 2019:

           

Net sales

   $ 15,395,824      $ 2,101,305      $ —        $ 17,497,129  

Depreciation

     602,805        60,377        19,485        682,667  

Segment operating profit

     1,076,200        651,876        —          1,728,076  

Selling and administrative expenses

     —          —          (1,141,454      (1,141,454

Interest income

     —          —          71,779        71,779  
           

 

 

 

Income before income taxes

            $ 658,401  
           

 

 

 

Capital expenditures

     1,040,680        226,324        26,025        1,293,029  

Six Months Ended June 30, 2018:

           

Net sales

   $ 17,959,374      $ 1,845,051      $ —        $ 19,804,425  

Depreciation

     584,259        54,596        14,682        653,537  

Segment operating profit

     2,407,179        633,561        —          3,040,740  

Selling and administrative expenses

     —          —          (1,268,579      (1,268,579

Interest income

     —          —          53,719        53,719  
           

 

 

 

Income before income taxes

            $ 1,825,880  
           

 

 

 

Capital expenditures

     465,919        31,495        138,304        635,718  

 

11


Table of Contents

CHICAGO RIVET & MACHINE CO.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

Net sales for the second quarter of 2019 were $8,875,451 compared to $9,792,784 in the second quarter of 2018, a decline of $917,333, or 9.4%. For the first half of 2019, net sales totaled $17,497,129 compared to $19,804,425 in the first half of 2018, a decline of $2,307,296, or 11.7%. The decline in net sales in the current year is primarily due to reduced demand for fastener segment parts, especially from automotive customers. Net income for the second quarter of 2019 was $229,559, or $0.24 per share, compared to $703,092, or $0.73 per share, in the second quarter of 2018. Net income for the first half of 2019 was $516,401, or $0.54 per share, compared to $1,410,880, or $1.46 per share, in the first half of 2018. Net income in the current year has been negatively impacted by the decline in sales as well as the increase in certain production costs.

Fastener segment revenues were $7,816,704 in the second quarter of 2019 compared to $9,034,275 reported in the second quarter of 2018, a decline of $1,217,571, or 13.5%. For the first six months of 2019, fastener segment revenues were $15,395,824 compared to $17,959,374 in the first half of 2018, a decline of $2,563,550, or 14.3%. The automotive sector is the primary market for our fastener segment products and demand from such customers has been particularly weak in the current year due to changes in consumer preferences and lower vehicle sales domestically and even more so abroad. Fastener segment sales to automotive customers declined $965,536, or 16.5%, in the second quarter and $2,315,330, or 19.4%, in the first half of 2019 compared to the prior year periods. Sales to non-automotive customers have declined a more modest 4.1% in the first half of the current year. Fastener segment gross margins were $1,219,047 in the second quarter of 2019 compared to $2,047,372 in the second quarter of 2018, a decline of $828,325. For the first six months of 2019, gross margins for the fastener segment were $2,544,233 compared to $4,024,012 in the first half of 2018, a decline of $1,479,779. In addition to the negative impact lower sales have had on gross margins, production costs in the first half of 2019 were higher than a year earlier. Steel is our primary raw material and on average, steel prices were approximately 12% higher in the first half of 2019 than a year earlier, primarily due to tariffs instituted in 2018. Labor costs have also risen more than expected due to the tightening of the labor market.

Assembly equipment segment revenues were $1,058,747 in the second quarter of 2019 compared to $758,509 in the second quarter of 2018, an increase of $300,238, or 39.6%. For the first half of 2019, assembly equipment revenues were $2,101,305 compared to $1,845,051 for the first half of 2018, an increase of $256,254, or 13.9%. The large increase in sales during the second quarter and the year to date increase was primarily due to the timing of certain high dollar value machine orders in the current year. Higher revenue was the primary cause of the increase in assembly equipment segment gross margins to $328,923 in the second quarter of 2019 from $241,062 in the second quarter of 2018. For the first half of the year, gross margins were $665,500 compared to $607,427 in 2018, an increase of $58,073.

Selling and administrative expenses for the second quarter of 2019 were $1,306,665, a decline of $105,304, or 7.5%, compared with the year earlier quarter total of $1,411,969. The decline was primarily due to a $80,000 reduction in profit sharing expense related to lower operating profit in the current year quarter and a $50,000 reduction in sales commissions due to lower sales. For the first six months of 2019, selling and administrative expenses were $2,649,361 compared to $2,876,687 in 2018, a decline of $227,326, or 7.9%. As in the second quarter, expenditures for the first half of 2019 were lower primarily due to a reduction in profit sharing and commission expenses of $142,000 and $84,000, respectively. Selling and administrative expenses as a percentage of net sales for the first half of 2019 were 15.1% compared to 14.5% in the first half of 2018.

Other Income

Other income in the second quarter of 2019 was $49,254, compared to $37,627 in the second quarter of 2018. Other income for the first six months of 2019 was $98,029, compared to $71,128 in the first six months of 2018. The increases were primarily related to greater interest income on certificates of deposit due to higher interest rates in the current year.

Income Tax Expense

The Company’s effective tax rates were approximately 21.0% and 23.1% for the second quarter of 2019 and 2018, respectively, and 21.6% and 22.7% for the six months ended June 30, 2019 and 2018, respectively.

 

12


Table of Contents

Liquidity and Capital Resources

Working capital at June 30, 2019 was $16.7 million, a decrease of $0.7 million from the beginning of the year. Contributing to that decline were capital expenditures during the first six months of $1.3 million, which primarily consisted of equipment used in production activities, and dividends paid of $0.7 million. Overall, cash, cash equivalents and certificates of deposit balances have declined $1.3 million since the beginning of the year. Partially offsetting that decline was a $0.3 million increase in accounts receivable due to greater sales activity during the quarter compared to the seasonally lower fourth quarter of 2018. The net result of these changes and other cash flow activity was to leave cash, cash equivalents and certificates of deposit at $6.5 million as of June 30, 2019 compared to $7.8 million at the beginning of the year. Management believes that current cash, cash equivalents and operating cash flow will provide adequate working capital for the next twelve months.

Results of Operations Summary

Overall results for the second quarter were disappointing, primarily due to the softening demand in the fastener segment, which followed the global downturn in automotive activity during the first six months of the year. Additionally, increases in steel prices and other materials over the past year have negatively impacted our fastener segment gross margins and remain a concern as ongoing trade disputes persist. Since material price increases can be difficult to mitigate, we will emphasize cost controls in other areas and strive for greater operating efficiencies in an effort to improve operating results while pursuing new sales opportunities. In contrast to the fastener segment, our assembly equipment segment demand and machine order backlog remain relatively stable. Given the challenges we currently face, we will continue to make adjustments to our activities based on changing market conditions, while maintaining an emphasis on quality and reliability of service that our customers demand.

Forward-Looking Statements

This discussion contains certain “forward-looking statements” which are inherently subject to risks and uncertainties that may cause actual events to differ materially from those discussed herein. Factors which may cause such differences in events include, those disclosed under “Risk Factors” in our Annual Report on Form 10-K and in the other filings we make with the United States Securities and Exchange Commission. These factors, include among other things: conditions in the domestic automotive industry, upon which we rely for sales revenue, the intense competition in our markets, the concentration of our sales with major customers, risks related to export sales, the price and availability of raw materials, labor relations issues, losses related to product liability, warranty and recall claims, costs relating to environmental laws and regulations, information systems disruptions, the loss of the services of our key employees and difficulties in achieving cost savings. Many of these factors are beyond our ability to control or predict. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to publish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

13


Table of Contents

CHICAGO RIVET & MACHINE CO.

Item 4. Controls and Procedures.

(a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and President, Chief Operating Officer and Treasurer (the Company’s principal financial officer), has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and President, Chief Operating Officer and Treasurer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

(b) Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

14


Table of Contents

PART II — OTHER INFORMATION

Item 6. Exhibits

 

31    Rule 13a-14(a) or 15d-14(a) Certifications
31.1    Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section  302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section  302 of the Sarbanes-Oxley Act of 2002.
32    Section 1350 Certifications
32.1    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101    Interactive Data File. Includes the following financial and related information from Chicago Rivet & Machine Co.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 formatted in Extensible Business Reporting Language (XBRL): (1) Condensed Consolidated Balance Sheets, (2) Condensed Consolidated Statements of Income, (3) Condensed Consolidated Statements of Shareholders’ Equity, (4) Condensed Consolidated Statements of Cash Flows, and (5) Notes to Condensed Consolidated Financial Statements.

 

15


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

      CHICAGO RIVET & MACHINE CO.
                       (Registrant)
Date: August 8, 2019      
     

/s/ John A. Morrissey

      John A. Morrissey
      Chairman of the Board of Directors
            and Chief Executive Officer
            (Principal Executive Officer)
Date: August 8, 2019      
     

/s/ Michael J. Bourg

      Michael J. Bourg
      President, Chief Operating
            Officer and Treasurer
            (Principal Financial Officer)

 

 

16

EX-31.1

EXHIBIT 31.1

I, John A. Morrissey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chicago Rivet & Machine Co.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

 

  a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:   August 8, 2019      

/s/ John A. Morrissey

       

John A. Morrissey

       

Chief Executive Officer

       

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

I, Michael J. Bourg, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chicago Rivet & Machine Co.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:   August 8, 2019      

/s/ Michael J. Bourg

       

Michael J. Bourg

       

President, Chief Operating Officer

       

and Treasurer (Principal Financial Officer)

 

EX-32.1

EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Chicago Rivet & Machine Co. (the “Company”) for the quarterly period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John A. Morrissey, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ John A. Morrissey

Name: John A. Morrissey

Title:

 

Chief Executive Officer

 

(Principal Executive Officer)

Date:

 

August 8, 2019

EX-32.2

EXHIBIT 32.2

Certification Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Chicago Rivet & Machine Co. (the “Company”) for the quarterly period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Bourg, as President, Chief Operating Officer and Treasurer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Michael J. Bourg

Name: Michael J. Bourg

Title:

 

President, Chief Operating Officer and Treasurer (Principal Financial Officer)

Date:

 

August 8, 2019

v3.19.2
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2019
Aug. 02, 2019
Details    
Registrant CIK 0000019871  
Fiscal Year End --12-31  
Registrant Name Chicago Rivet & Machine Co.  
SEC Form 10-Q  
Period End date Jun. 30, 2019  
Number of common stock shares outstanding   966,132
Filer Category Non-accelerated Filer  
Current with reporting Yes  
Interactive Data Current Yes  
Shell Company false  
Small Business true  
Emerging Growth Company false  
Entity File Number 000-01227  
Entity Incorporation, State or Country Code IL  
Entity Address, Address Line One 901 Frontenac Road  
Entity Address, City or Town Naperville  
Entity Address, State or Province IL  
Entity Address, Postal Zip Code 60563  
City Area Code 630  
Local Phone Number 357-8500  
Amendment Flag false  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q2  
Document Quarterly Report true  
Document Transition Report false  
v3.19.2
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Current Assets:    
Cash and cash equivalents $ 908,075 $ 706,873
Certificates of deposit 5,578,000 7,063,000
Accounts receivable - Less allowances of $140,000 5,787,355 5,529,307
Inventories, net 6,098,823 6,100,391
Prepaid income taxes 117,186 150,686
Other current assets 399,607 438,222
Total current assets 18,889,046 19,988,479
Property, Plant and Equipment:    
Land and improvements 1,636,749 1,632,299
Buildings and improvements 8,327,006 8,234,182
Production equipment and other 36,455,435 35,627,443
Property, Plant and Equipment, Gross 46,419,190 45,493,924
Less accumulated depreciation 32,550,682 32,235,778
Net property, plant and equipment 13,868,508 13,258,146
Total assets 32,757,554 33,246,625
Current Liabilities:    
Accounts payable 803,921 1,060,231
Accrued wages and salaries 962,653 701,434
Other accrued expenses 280,605 475,973
Unearned revenue and customer deposits 150,079 328,154
Total current liabilities 2,197,258 2,565,792
Deferred income taxes 999,084 921,084
Total liabilities 3,196,342 3,486,876
Shareholders' Equity:    
Preferred stock, no par value, 500,000 shares authorized: none outstanding 0 0
Common stock, $1.00 par value, 4,000,000 shares authorized, 1,138,096 shares issued; 966,132 shares outstanding 1,138,096 1,138,096
Additional paid-in capital 447,134 447,134
Retained earnings 31,898,080 32,096,617
Treasury stock, 171,964 shares at cost (3,922,098) (3,922,098)
Total shareholders' equity 29,561,212 29,759,749
Total liabilities and shareholders' equity $ 32,757,554 $ 33,246,625
v3.19.2
Condensed Consolidated Balance Sheets (Unaudited) - Parenthetical - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Details    
Accounts Receivable, Allowance for Credit Loss, Current $ 140,000 $ 140,000
Preferred Stock, Par or Stated Value Per Share $ 0 $ 0
Preferred Stock, Shares Authorized 500,000 500,000
Preferred Stock, Shares Outstanding 0 0
Common Stock, Par or Stated Value Per Share $ 1.00 $ 1.00
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
v3.19.2
Condensed Consolidated Statements of Income (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Condensed Consolidated Statements of Income (Unaudited)        
Net sales $ 8,875,451 $ 9,792,784 $ 17,497,129 $ 19,804,425
Cost of goods sold 7,327,481 7,504,350 14,287,396 15,172,986
Gross profit 1,547,970 2,288,434 3,209,733 4,631,439
Selling and administrative expenses 1,306,665 1,411,969 2,649,361 2,876,687
Operating profit 241,305 876,465 560,372 1,754,752
Other income 49,254 37,627 98,029 71,128
Income before income taxes 290,559 914,092 658,401 1,825,880
Provision for income taxes 61,000 211,000 142,000 415,000
Net income $ 229,559 $ 703,092 $ 516,401 $ 1,410,880
Per share data, basic and diluted:        
Net income per share $ 0.24 $ 0.73 $ 0.54 $ 1.46
Average common shares outstanding 966,132 966,132 966,132 966,132
Cash dividends declared per share $ 0.22 $ 0.21 $ 0.74 $ 0.72
v3.19.2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)
Total
Preferred Stock
Common Stock
Additional Paid-in Capital
Retained Earnings
Treasury Stock
Beginning Balance at Dec. 31, 2017 $ 28,859,955 $ 0 $ 1,138,096 $ 447,134 $ 31,196,823 $ (3,922,098)
Common Stock Shares at Dec. 31, 2017     966,132      
Treasury Stock Shares at Dec. 31, 2017           171,964
Net Income 707,788       707,788  
Dividends Declared (492,727)       (492,727)  
Ending Balance at Mar. 31, 2018 29,075,016 0 $ 1,138,096 447,134 31,411,884 $ (3,922,098)
Common Stock Shares at Mar. 31, 2018     966,132      
Treasury Stock Shares at Mar. 31, 2018           171,964
Beginning Balance at Dec. 31, 2017 28,859,955 0 $ 1,138,096 447,134 31,196,823 $ (3,922,098)
Common Stock Shares at Dec. 31, 2017     966,132      
Treasury Stock Shares at Dec. 31, 2017           171,964
Net Income 1,410,880          
Ending Balance at Jun. 30, 2018 29,575,220 0 $ 1,138,096 447,134 31,912,088 $ (3,922,098)
Common Stock Shares at Jun. 30, 2018     966,132      
Treasury Stock Shares at Jun. 30, 2018           171,964
Beginning Balance at Mar. 31, 2018 29,075,016 0 $ 1,138,096 447,134 31,411,884 $ (3,922,098)
Common Stock Shares at Mar. 31, 2018     966,132      
Treasury Stock Shares at Mar. 31, 2018           171,964
Net Income 703,092       703,092  
Dividends Declared (202,888)       (202,888)  
Ending Balance at Jun. 30, 2018 29,575,220 0 $ 1,138,096 447,134 31,912,088 $ (3,922,098)
Common Stock Shares at Jun. 30, 2018     966,132      
Treasury Stock Shares at Jun. 30, 2018           171,964
Beginning Balance at Dec. 31, 2018 $ 29,759,749 0 $ 1,138,096 447,134 32,096,617 $ (3,922,098)
Common Stock Shares at Dec. 31, 2018 966,132   966,132      
Treasury Stock Shares at Dec. 31, 2018 171,964         171,964
Net Income $ 286,842       286,842  
Dividends Declared (502,389)       (502,389)  
Ending Balance at Mar. 31, 2019 29,544,202 0 $ 1,138,096 447,134 31,881,070 $ (3,922,098)
Common Stock Shares at Mar. 31, 2019     966,132      
Treasury Stock Shares at Mar. 31, 2019           171,964
Beginning Balance at Dec. 31, 2018 $ 29,759,749 0 $ 1,138,096 447,134 32,096,617 $ (3,922,098)
Common Stock Shares at Dec. 31, 2018 966,132   966,132      
Treasury Stock Shares at Dec. 31, 2018 171,964         171,964
Net Income $ 516,401          
Ending Balance at Jun. 30, 2019 $ 29,561,212 0 $ 1,138,096 447,134 31,898,080 $ (3,922,098)
Common Stock Shares at Jun. 30, 2019 966,132   966,132      
Treasury Stock Shares at Jun. 30, 2019 171,964         171,964
Beginning Balance at Mar. 31, 2019 $ 29,544,202 0 $ 1,138,096 447,134 31,881,070 $ (3,922,098)
Common Stock Shares at Mar. 31, 2019     966,132      
Treasury Stock Shares at Mar. 31, 2019           171,964
Net Income 229,559       229,559  
Dividends Declared (212,549)       (212,549)  
Ending Balance at Jun. 30, 2019 $ 29,561,212 $ 0 $ 1,138,096 $ 447,134 $ 31,898,080 $ (3,922,098)
Common Stock Shares at Jun. 30, 2019 966,132   966,132      
Treasury Stock Shares at Jun. 30, 2019 171,964         171,964
v3.19.2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - Parenthetical - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2018
Mar. 31, 2018
Jun. 30, 2019
Jun. 30, 2018
Details            
Cash dividends declared per share $ 0.22 $ 0.52 $ 0.21 $ 0.51 $ 0.74 $ 0.72
v3.19.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Cash flows from operating activities:    
Net Income $ 516,401 $ 1,410,880
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 682,667 653,537
Gain on disposal of equipment (5,000) (17,485)
Deferred income taxes 78,000 (27,000)
Changes in operating assets and liabilities:    
Accounts receivable (258,048) (1,580,776)
Inventories 1,568 (922,121)
Other current assets and prepaid income taxes 72,115 111,554
Accounts payable (265,603) 779,782
Accrued wages and salaries 261,219 246,972
Other accrued expenses (195,368) 137,353
Unearned revenue and customer deposits (178,075) (91,205)
Net cash provided by operating activities 709,876 701,491
Cash flows from investing activities:    
Capital expenditures (1,283,736) (635,718)
Proceeds from the sale of equipment 5,000 17,485
Proceeds from certificates of deposit 4,324,000 1,992,000
Purchases of certificates of deposit (2,839,000) (1,245,000)
Net cash provided by investing activities 206,264 128,767
Cash flows from financing activities:    
Cash dividends paid (714,938) (695,615)
Net cash used in financing activities (714,938) (695,615)
Net increase in cash and cash equivalents 201,202 134,643
Cash and cash equivalents at beginning of period 706,873 1,152,569
Cash and cash equivalents at end of period 908,075 1,287,212
Supplemental schedule of non-cash investing activities:    
Capital expenditures in accounts payable $ 9,293 $ 0
v3.19.2
Accounting Policies
6 Months Ended
Jun. 30, 2019
Notes  
Accounting Policies

1.  In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2019 (unaudited) and December 31, 2018 (audited) and the results of operations and changes in cash flows for the indicated periods.  Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules. Please refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  The results of operations for the three and six-month period ending June 30, 2019 are not necessarily indicative of the results to be expected for the year.

 

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

v3.19.2
Risks and Uncertainties
6 Months Ended
Jun. 30, 2019
Notes  
Risks and Uncertainties

2.  The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily in the automotive industry.  The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States.

 

v3.19.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2019
Notes  
Commitments and Contingencies

3.  The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, in the normal course of business.  While it is not possible at this time to establish the ultimate amount of liability with respect to contingent liabilities, including those related to legal proceedings, management is of the opinion that the aggregate amount of any such liabilities, for which provision has not been made, will not have a material adverse effect on the Company's financial position.

 

v3.19.2
Revenue
6 Months Ended
Jun. 30, 2019
Notes  
Revenue

4.  Revenue—The Company operates in the fastener industry and is in the business of manufacturing and selling rivets, cold-formed fasteners and parts, screw machine products, automatic rivet setting machines and parts and tools for such machines.  Revenue is recognized when control of the promised goods or services is transferred to our customers, generally upon shipment of goods or completion of services, in an amount that reflects the consideration we expect to receive in exchange for those goods or services.  For certain assembly equipment segment transactions, revenue is recognized based on progress toward completion of the performance obligation using a labor-based measure.  Labor incurred and specific material costs are compared to milestone payments per sales contract.  Based on our experience, this method most accurately reflects the transfer of goods under such contracts.  During the second quarter of 2019, the Company realized $219,700 related to such a contract and $118,300 is the remaining performance obligation under that contract which the Company expects to recognize as revenue in the third quarter.

 

Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue.  Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of income.  These adjustments primarily relate to customer returns and allowances.  The Company records a liability and reduction in sales for estimated product returns based upon historical experience.  If we determine that our obligation under warranty claims is probable and subject to reasonable determination, an estimate of that liability is recorded as an offset against revenue at that time.  As of June 30, 2019 and December 31, 2018 reserves for warranty claims were not material.  Cash received by the Company prior to shipment is recorded as unearned revenue.

 

Shipping and handling fees billed to customers are recognized in net sales, and related costs as cost of sales, when incurred.

 

Sales commissions are expensed when incurred because the amortization period is less than one year.  These costs are recorded within selling and administrative expenses in the statement of income.

 

The following table presents revenue by segment, further disaggregated by end-market:

 

 

  Fastener 

  Assembly Equipment 

  Consolidated 

Three Months Ended June 30, 2019:

 

 

 

Automotive

$  4,880,038

$        63,650

$   4,943,688

Non-automotive

2,936,666

995,097

3,931,763

Total net sales

$  7,816,704

$     1,058,747

$   8,875,451

 

 

 

 

Three Months Ended June 30, 2018:

 

 

 

Automotive

$  5,845,574

$        38,842

$   5,884,416

Non-automotive

3,188,701

719,667

3,908,368

Total net sales

$    9,034,275

$        758,509

$      9,792,784

 

 

 

 

Six Months Ended June 30, 2019:

 

 

 

Automotive

$    9,598,254

$       105,415

$      9,703,669

Non-automotive

5,797,570

1,995,890

7,793,460

Total net sales

$  15,395,824

$     2,101,305

$    17,497,129

 

 

 

 

Six Months Ended June 30, 2018:

 

 

 

Automotive

$  11,913,584

$          88,905

$    12,002,489

Non-automotive

6,045,790

1,756,146

7,801,936

Total net sales

$  17,959,374

$      1,845,051

$    19,804,425

 

The following table presents revenue by segment, further disaggregated by location:

 

 

  Fastener 

  Assembly Equipment 

  Consolidated 

Three Months Ended June 30, 2019:

 

 

 

United States

$  6,612,996

$       951,679

$   7,564,675

Foreign

1,203,708

107,068

1,310,776

Total net sales

$  7,816,704

$     1,058,747

$   8,875,451

 

 

 

 

Three Months Ended June 30, 2018:

 

 

 

United States

$  7,617,546

$       710,745

$  8,328,291

Foreign

1,416,729

47,764

1,464,493

Total net sales

$  9,034,275

$     758,509

$   9,792,784

 

 

 

 

Six Months Ended June 30, 2019:

 

 

 

United States

$  13,194,334

$    1,907,989

$  15,102,323

Foreign

2,201,490

193,316

2,394,806

Total net sales

$  15,395,824

$    2,101,305

$   17,497,129

 

 

 

 

Six Months Ended June 30, 2018:

 

 

 

United States

$  15,299,192

$     1,751,614

$    17,050,806

Foreign

2,660,182

93,437

2,753,619

Total net sales

$  17,959,374

$    1,845,051

$   19,804,425

v3.19.2
Income Taxes
6 Months Ended
Jun. 30, 2019
Notes  
Income Taxes

5.  The Company’s effective tax rates were approximately 21.0% and 23.1% for the second quarter of 2019 and 2018, respectively, and 21.6% and 22.7% for the six months ended June 30, 2019 and 2018, respectively.

 

The Company’s federal income tax returns for the 2015 through 2018 tax years are subject to examination by the Internal Revenue Service (“IRS”).   While it may be possible that a reduction could occur with respect to the Company’s unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a material change to the results of operations or financial condition of the Company.  No statutes have been extended on any of the Company’s federal income tax filings.  The statute of limitations on the Company’s 2015 through 2018 federal income tax returns will expire on September 15, 2019 through 2022, respectively.

 

The Company’s state income tax returns for the 2015 through 2018 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2022.  The Company is not currently under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended.

v3.19.2
Inventories
6 Months Ended
Jun. 30, 2019
Notes  
Inventories

6.  Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method.

  A summary of inventories is as follows:

 

 

 

June 30, 2019

December 31, 2018

Raw material

 $             2,702,486

 

 $             2,798,918

Work-in-process

                1,873,733

 

                1,878,977

Finished goods

                2,097,604

 

                2,001,496

Inventory, gross

                6,673,823

 

                6,679,391

Valuation reserves

                  (575,000)

 

                  (579,000)

Inventories, net

 $             6,098,823

 

 $             6,100,391

v3.19.2
Segment Reporting
6 Months Ended
Jun. 30, 2019
Notes  
Segment Reporting

7.  Segment Information—The Company operates in two business segments as determined by its products.  The fastener segment includes rivets, cold-formed fasteners and parts and screw machine products.  The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines.

 

Information by segment is as follows:

 

 

 

Fastener

Assembly Equipment

Other

Consolidated

Three Months Ended June 30, 2019:

 

 

 

 

Net sales

   $     7,816,704

   $     1,058,747

                       0 

   $    8,875,451 

 

 

 

 

 

Depreciation

             305,082

               31,453

                9,743 

            346,278 

 

 

 

 

 

Segment operating profit

             487,305

             315,802

                       0 

            803,107 

Selling and administrative expenses

                        0

                        0

          (548,052)

          (548,052)

Interest income

                        0

                        0

              35,504 

              35,504 

Income before income taxes

 

 

 

   $       290,559 

 

 

 

 

 

Capital expenditures

             284,573

             102,324

                       0 

            386,897 

 

 

 

 

 

Segment assets:

 

 

 

 

   Accounts receivable, net

          5,426,139

             361,216

                       0 

         5,787,355 

   Inventories, net

          4,996,608

          1,102,215

                       0 

         6,098,823 

   Property, plant and equipment, net

        11,164,067

          1,745,444

            958,997 

       13,868,508 

   Other assets

                        0

                        0

         7,002,868 

         7,002,868 

 

 

 

 

   $  32,757,554 

 

 

 

 

 

Three Months Ended June 30, 2018:

 

 

 

 

Net sales

   $     9,034,275

   $        758,509

                       0 

   $    9,792,784 

 

 

 

 

 

Depreciation

             292,378

               27,298

                7,341 

            327,017 

 

 

 

 

 

Segment operating profit

          1,229,717

             249,376

                       0 

         1,479,093 

Selling and administrative expenses

                        0

                        0

          (591,640)

          (591,640)

Interest income

                        0

                        0

              26,639 

              26,639 

Income before income taxes

 

 

 

   $       914,092 

 

 

 

 

 

Capital expenditures

             281,692

                        0

            127,599 

            409,291 

 

 

 

 

 

Segment assets:

 

 

 

 

   Accounts receivable, net

          6,508,150

             399,276

                       0 

         6,907,426 

   Inventories, net

          4,399,770

          1,050,451

                       0 

         5,450,221 

   Property, plant and equipment, net

        10,164,570

          1,619,454

            755,110 

       12,539,134 

   Other assets

                        0

                        0

         8,680,688 

         8,680,688 

 

 

 

 

   $  33,577,469 

Six Months Ended June 30, 2019:

 

 

 

 

Net sales

   $   15,395,824

   $     2,101,305

                       0 

   $  17,497,129 

 

 

 

 

 

Depreciation

             602,805

               60,377

              19,485 

            682,667 

 

 

 

 

 

Segment operating profit

          1,076,200

             651,876

                       0 

         1,728,076 

Selling and administrative expenses

                        0

                        0

       (1,141,454)

       (1,141,454)

Interest income

                        0

                        0

              71,779 

              71,779 

Income before income taxes

 

 

 

   $       658,401 

 

 

 

 

 

Capital expenditures

          1,040,680

             226,324

              26,025 

         1,293,029 

 

 

 

 

 

Six Months Ended June 30, 2018:

 

 

 

 

Net sales

   $   17,959,374

   $     1,845,051

                       0 

   $  19,804,425 

 

 

 

 

 

Depreciation

             584,259

               54,596

              14,682 

            653,537 

 

 

 

 

 

Segment operating profit

          2,407,179

             633,561

                       0 

         3,040,740 

Selling and administrative expenses

                        0

                        0

       (1,268,579)

       (1,268,579)

Interest income

                        0

                        0

              53,719 

              53,719 

Income before income taxes

 

 

 

   $    1,825,880 

 

 

 

 

 

Capital expenditures

             465,919

               31,495

            138,304 

            635,718 

 

 

 

 

 

v3.19.2
Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2019
Policies  
Accounting Policies

1.  In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2019 (unaudited) and December 31, 2018 (audited) and the results of operations and changes in cash flows for the indicated periods.  Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules. Please refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  The results of operations for the three and six-month period ending June 30, 2019 are not necessarily indicative of the results to be expected for the year.

 

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

Risks and Uncertainties

2.  The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily in the automotive industry.  The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States.

Commitments and Contingencies

3.  The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, in the normal course of business.  While it is not possible at this time to establish the ultimate amount of liability with respect to contingent liabilities, including those related to legal proceedings, management is of the opinion that the aggregate amount of any such liabilities, for which provision has not been made, will not have a material adverse effect on the Company's financial position.

Revenue

4.  Revenue—The Company operates in the fastener industry and is in the business of manufacturing and selling rivets, cold-formed fasteners and parts, screw machine products, automatic rivet setting machines and parts and tools for such machines.  Revenue is recognized when control of the promised goods or services is transferred to our customers, generally upon shipment of goods or completion of services, in an amount that reflects the consideration we expect to receive in exchange for those goods or services.  For certain assembly equipment segment transactions, revenue is recognized based on progress toward completion of the performance obligation using a labor-based measure.  Labor incurred and specific material costs are compared to milestone payments per sales contract.  Based on our experience, this method most accurately reflects the transfer of goods under such contracts.  During the second quarter of 2019, the Company realized $219,700 related to such a contract and $118,300 is the remaining performance obligation under that contract which the Company expects to recognize as revenue in the third quarter.

 

Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue.  Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of income.  These adjustments primarily relate to customer returns and allowances.  The Company records a liability and reduction in sales for estimated product returns based upon historical experience.  If we determine that our obligation under warranty claims is probable and subject to reasonable determination, an estimate of that liability is recorded as an offset against revenue at that time.  As of June 30, 2019 and December 31, 2018 reserves for warranty claims were not material.  Cash received by the Company prior to shipment is recorded as unearned revenue.

 

Shipping and handling fees billed to customers are recognized in net sales, and related costs as cost of sales, when incurred.

 

Sales commissions are expensed when incurred because the amortization period is less than one year.  These costs are recorded within selling and administrative expenses in the statement of income.

Income Taxes

5.  The Company’s effective tax rates were approximately 21.0% and 23.1% for the second quarter of 2019 and 2018, respectively, and 21.6% and 22.7% for the six months ended June 30, 2019 and 2018, respectively.

 

The Company’s federal income tax returns for the 2015 through 2018 tax years are subject to examination by the Internal Revenue Service (“IRS”).   While it may be possible that a reduction could occur with respect to the Company’s unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a material change to the results of operations or financial condition of the Company.  No statutes have been extended on any of the Company’s federal income tax filings.  The statute of limitations on the Company’s 2015 through 2018 federal income tax returns will expire on September 15, 2019 through 2022, respectively.

 

The Company’s state income tax returns for the 2015 through 2018 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2022.  The Company is not currently under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended.

Inventories

6.  Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method.

Segment Reporting

7.  Segment Information—The Company operates in two business segments as determined by its products.  The fastener segment includes rivets, cold-formed fasteners and parts and screw machine products.  The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines.

v3.19.2
Revenue: Disaggregation of Revenue (Tables)
6 Months Ended
Jun. 30, 2019
Location  
Disaggregation of Revenue

 

 

  Fastener 

  Assembly Equipment 

  Consolidated 

Three Months Ended June 30, 2019:

 

 

 

United States

$  6,612,996

$       951,679

$   7,564,675

Foreign

1,203,708

107,068

1,310,776

Total net sales

$  7,816,704

$     1,058,747

$   8,875,451

 

 

 

 

Three Months Ended June 30, 2018:

 

 

 

United States

$  7,617,546

$       710,745

$  8,328,291

Foreign

1,416,729

47,764

1,464,493

Total net sales

$  9,034,275

$     758,509

$   9,792,784

 

 

 

 

Six Months Ended June 30, 2019:

 

 

 

United States

$  13,194,334

$    1,907,989

$  15,102,323

Foreign

2,201,490

193,316

2,394,806

Total net sales

$  15,395,824

$    2,101,305

$   17,497,129

 

 

 

 

Six Months Ended June 30, 2018:

 

 

 

United States

$  15,299,192

$     1,751,614

$    17,050,806

Foreign

2,660,182

93,437

2,753,619

Total net sales

$  17,959,374

$    1,845,051

$   19,804,425

End Market  
Disaggregation of Revenue

 

 

  Fastener 

  Assembly Equipment 

  Consolidated 

Three Months Ended June 30, 2019:

 

 

 

Automotive

$  4,880,038

$        63,650

$   4,943,688

Non-automotive

2,936,666

995,097

3,931,763

Total net sales

$  7,816,704

$     1,058,747

$   8,875,451

 

 

 

 

Three Months Ended June 30, 2018:

 

 

 

Automotive

$  5,845,574

$        38,842

$   5,884,416

Non-automotive

3,188,701

719,667

3,908,368

Total net sales

$    9,034,275

$        758,509

$      9,792,784

 

 

 

 

Six Months Ended June 30, 2019:

 

 

 

Automotive

$    9,598,254

$       105,415

$      9,703,669

Non-automotive

5,797,570

1,995,890

7,793,460

Total net sales

$  15,395,824

$     2,101,305

$    17,497,129

 

 

 

 

Six Months Ended June 30, 2018:

 

 

 

Automotive

$  11,913,584

$          88,905

$    12,002,489

Non-automotive

6,045,790

1,756,146

7,801,936

Total net sales

$  17,959,374

$      1,845,051

$    19,804,425

 

v3.19.2
Inventories: Inventories (Tables)
6 Months Ended
Jun. 30, 2019
Tables/Schedules  
Inventories

 

 

June 30, 2019

December 31, 2018

Raw material

 $             2,702,486

 

 $             2,798,918

Work-in-process

                1,873,733

 

                1,878,977

Finished goods

                2,097,604

 

                2,001,496

Inventory, gross

                6,673,823

 

                6,679,391

Valuation reserves

                  (575,000)

 

                  (579,000)

Inventories, net

 $             6,098,823

 

 $             6,100,391

v3.19.2
Segment Reporting: Schedule of Segment Reporting Information, by Segment (Tables)
6 Months Ended
Jun. 30, 2019
Tables/Schedules  
Schedule of Segment Reporting Information, by Segment

 

 

 

Fastener

Assembly Equipment

Other

Consolidated

Three Months Ended June 30, 2019:

 

 

 

 

Net sales

   $     7,816,704

   $     1,058,747

                       0 

   $    8,875,451 

 

 

 

 

 

Depreciation

             305,082

               31,453

                9,743 

            346,278 

 

 

 

 

 

Segment operating profit

             487,305

             315,802

                       0 

            803,107 

Selling and administrative expenses

                        0

                        0

          (548,052)

          (548,052)

Interest income

                        0

                        0

              35,504 

              35,504 

Income before income taxes

 

 

 

   $       290,559 

 

 

 

 

 

Capital expenditures

             284,573

             102,324

                       0 

            386,897 

 

 

 

 

 

Segment assets:

 

 

 

 

   Accounts receivable, net

          5,426,139

             361,216

                       0 

         5,787,355 

   Inventories, net

          4,996,608

          1,102,215

                       0 

         6,098,823 

   Property, plant and equipment, net

        11,164,067

          1,745,444

            958,997 

       13,868,508 

   Other assets

                        0

                        0

         7,002,868 

         7,002,868 

 

 

 

 

   $  32,757,554 

 

 

 

 

 

Three Months Ended June 30, 2018:

 

 

 

 

Net sales

   $     9,034,275

   $        758,509

                       0 

   $    9,792,784 

 

 

 

 

 

Depreciation

             292,378

               27,298

                7,341 

            327,017 

 

 

 

 

 

Segment operating profit

          1,229,717

             249,376

                       0 

         1,479,093 

Selling and administrative expenses

                        0

                        0

          (591,640)

          (591,640)

Interest income

                        0

                        0

              26,639 

              26,639 

Income before income taxes

 

 

 

   $       914,092 

 

 

 

 

 

Capital expenditures

             281,692

                        0

            127,599 

            409,291 

 

 

 

 

 

Segment assets:

 

 

 

 

   Accounts receivable, net

          6,508,150

             399,276

                       0 

         6,907,426 

   Inventories, net

          4,399,770

          1,050,451

                       0 

         5,450,221 

   Property, plant and equipment, net

        10,164,570

          1,619,454

            755,110 

       12,539,134 

   Other assets

                        0

                        0

         8,680,688 

         8,680,688 

 

 

 

 

   $  33,577,469 

Six Months Ended June 30, 2019:

 

 

 

 

Net sales

   $   15,395,824

   $     2,101,305

                       0 

   $  17,497,129 

 

 

 

 

 

Depreciation

             602,805

               60,377

              19,485 

            682,667 

 

 

 

 

 

Segment operating profit

          1,076,200

             651,876

                       0 

         1,728,076 

Selling and administrative expenses

                        0

                        0

       (1,141,454)

       (1,141,454)

Interest income

                        0

                        0

              71,779 

              71,779 

Income before income taxes

 

 

 

   $       658,401 

 

 

 

 

 

Capital expenditures

          1,040,680

             226,324

              26,025 

         1,293,029 

 

 

 

 

 

Six Months Ended June 30, 2018:

 

 

 

 

Net sales

   $   17,959,374

   $     1,845,051

                       0 

   $  19,804,425 

 

 

 

 

 

Depreciation

             584,259

               54,596

              14,682 

            653,537 

 

 

 

 

 

Segment operating profit

          2,407,179

             633,561

                       0 

         3,040,740 

Selling and administrative expenses

                        0

                        0

       (1,268,579)

       (1,268,579)

Interest income

                        0

                        0

              53,719 

              53,719 

Income before income taxes

 

 

 

   $    1,825,880 

 

 

 

 

 

Capital expenditures

             465,919

               31,495

            138,304 

            635,718 

 

 

 

 

 

v3.19.2
Revenue: Revenue (Details) - USD ($)
3 Months Ended
Sep. 30, 2019
Jun. 30, 2019
Details    
Revenue Recognized, Performance Obligation   $ 219,700
Revenue, Remaining Performance Obligation   $ 118,300
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation third quarter  
v3.19.2
Revenue: Disaggregation of Revenue (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Revenue $ 8,875,451 $ 9,792,784 $ 17,497,129 $ 19,804,425
United States        
Revenue 7,564,675 8,328,291 15,102,323 17,050,806
Foreign        
Revenue 1,310,776 1,464,493 2,394,806 2,753,619
Automotive        
Revenue 4,943,688 5,884,416 9,703,669 12,002,489
Nonautomotive        
Revenue 3,931,763 3,908,368 7,793,460 7,801,936
Fastener        
Revenue 7,816,704 9,034,275 15,395,824 17,959,374
Fastener | United States        
Revenue 6,612,996 7,617,546 13,194,334 15,299,192
Fastener | Foreign        
Revenue 1,203,708 1,416,729 2,201,490 2,660,182
Fastener | Automotive        
Revenue 4,880,038 5,845,574 9,598,254 11,913,584
Fastener | Nonautomotive        
Revenue 2,936,666 3,188,701 5,797,570 6,045,790
Assembly Equipment        
Revenue 1,058,747 758,509 2,101,305 1,845,051
Assembly Equipment | United States        
Revenue 951,679 710,745 1,907,989 1,751,614
Assembly Equipment | Foreign        
Revenue 107,068 47,764 193,316 93,437
Assembly Equipment | Automotive        
Revenue 63,650 38,842 105,415 88,905
Assembly Equipment | Nonautomotive        
Revenue $ 995,097 $ 719,667 $ 1,995,890 $ 1,756,146
v3.19.2
Inventories: Inventories (Details) - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Details    
Raw material $ 2,702,486 $ 2,798,918
Work-in-process 1,873,733 1,878,977
Finished goods 2,097,604 2,001,496
Inventory, gross 6,673,823 6,679,391
Valuation reserves (575,000) (579,000)
Inventories, net $ 6,098,823 $ 6,100,391
v3.19.2
Segment Reporting: Schedule of Segment Reporting Information, by Segment (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Dec. 31, 2018
Net sales $ 8,875,451 $ 9,792,784 $ 17,497,129 $ 19,804,425  
Depreciation     682,667 653,537  
Accounts receivable - Less allowances of $140,000 5,787,355   5,787,355   $ 5,529,307
Inventories, net 6,098,823   6,098,823   6,100,391
Net property, plant and equipment 13,868,508   13,868,508   $ 13,258,146
Fastener          
Net sales 7,816,704 9,034,275 15,395,824 17,959,374  
Depreciation 305,082 292,378 602,805 584,259  
Segment operating profit 487,305 1,229,717 1,076,200 2,407,179  
Selling and adminstrative expenses 0 0 0 0  
Interest income 0 0 0 0  
Capital expenditures 284,573 281,692 1,040,680 465,919  
Accounts receivable - Less allowances of $140,000 5,426,139 6,508,150 5,426,139 6,508,150  
Inventories, net 4,996,608 4,399,770 4,996,608 4,399,770  
Net property, plant and equipment 11,164,067 10,164,570 11,164,067 10,164,570  
Other Assets 0 0 0 0  
Assembly Equipment          
Net sales 1,058,747 758,509 2,101,305 1,845,051  
Depreciation 31,453 27,298 60,377 54,596  
Segment operating profit 315,802 249,376 651,876 633,561  
Selling and adminstrative expenses 0 0 0 0  
Interest income 0 0 0 0  
Capital expenditures 102,324 0 226,324 31,495  
Accounts receivable - Less allowances of $140,000 361,216 399,276 361,216 399,276  
Inventories, net 1,102,215 1,050,451 1,102,215 1,050,451  
Net property, plant and equipment 1,745,444 1,619,454 1,745,444 1,619,454  
Other Assets 0 0 0 0  
Unallocated Corporate          
Net sales 0 0 0 0  
Depreciation 9,743 7,341 19,485 14,682  
Segment operating profit 0 0 0 0  
Selling and adminstrative expenses (548,052) (591,640) (1,141,454) (1,268,579)  
Interest income 35,504 26,639 71,779 53,719  
Capital expenditures 0 127,599 26,025 138,304  
Accounts receivable - Less allowances of $140,000 0 0 0 0  
Inventories, net 0 0 0 0  
Net property, plant and equipment 958,997 755,110 958,997 755,110  
Other Assets $ 7,002,868 $ 8,680,688 $ 7,002,868 $ 8,680,688