Revenue

9 Months Ended

Sep. 30, 2022

Notes

Revenue

4.  Revenue - The Company operates in the fastener industry and is in the business of manufacturing and selling rivets, cold-formed fasteners and parts, screw machine products, automatic rivet setting machines and parts and tools for such machines.  Revenue is recognized when control of the promised goods or services is transferred to our customers, generally upon shipment of goods or completion of services, in an amount that reflects the consideration we expect to receive in exchange for those goods or services.  For certain assembly equipment segment transactions, revenue is recognized based on progress toward completion of the performance obligation using a labor-based measure.  Labor incurred and specific material costs are compared to milestone payments per sales contract.  Based on our experience, this method most accurately reflects the transfer of goods under such contracts.  During the third quarter of 2022, the Company did not realize any revenue related to such contracts.  As of September 30, 2022, there are no such contracts outstanding.

Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue.  Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of income.  These adjustments primarily relate to customer returns and allowances.  The Company records a liability and reduction in sales for estimated product returns based upon historical experience.  If we determine that our obligation under warranty claims is probable and subject to reasonable determination, an estimate of that liability is recorded as an offset against revenue at that time.  As of September 30, 2022 and December 31, 2021 reserves for warranty claims were not material.  Cash received by the Company prior to shipment is recorded as unearned revenue.

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

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

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

	Fastener	Assembly Equipment	Consolidated
Three Months Ended September 30, 2022:
Automotive	$     4,813,646	$         45,012	$     4,858,658
Non-automotive	2,991,976	717,151	3,709,127
Total net sales	$     7,805,622	$      762,163	$     8,567,785
Three Months Ended September 30, 2021:
Automotive	$     4,259,544	$         27,998	$     4,287,542
Non-automotive	3,293,075	975,114	4,268,189
Total net sales	$     7,552,619	$     1,003,112	$     8,555,731
Nine Months Ended September 30, 2022:
Automotive	$  14,268,638	$         146,663	$  14,415,301
Non-automotive	9,750,429	2,623,149	12,373,578
Total net sales	$    24,019,067	$     2,769,812	$   26,788,879
Nine Months Ended September 30, 2021:
Automotive	$    13,410,100	$        100,953	$    13,511,053
Non-automotive	9,433,241	3,280,776	12,714,017
Total net sales	$    22,843,341	$     3,381,729	$   26,225,070

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

	Fastener	Assembly Equipment	Consolidated
Three Months Ended September 30, 2022:
United States	$   6,268,813	$     696,856	$   6,965,669
Foreign	1,536,809	65,307	1,602,116
Total net sales	$   7,805,622	$     762,163	$   8,567,785
Three Months Ended September 30, 2021:
United States	$   6,300,067	$     981,905	$   7,281,972
Foreign	1,252,552	21,207	1,273,759
Total net sales	$   7,552,619	$   1,003,112	$   8,555,731
Nine Months Ended September 30, 2022:
United States	$   19,825,721	$   2,633,475	$   22,459,196
Foreign	4,193,346	136,337	4,329,683
Total net sales	$   24,019,067	$   2,769,812	$   26,788,879
Nine Months Ended September 30, 2021:
United States	$   18,589,576	$   3,320,415	$   21,909,991
Foreign	4,253,765	61,314	4,315,079
Total net sales	$   22,843,341	$   3,381,729	$   26,225,070