Revenue

6 Months Ended

Jun. 30, 2019

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