Revenue

3 Months Ended

Mar. 31, 2023

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 first quarter of 2023, the Company did not realize any revenue related to such contracts.  As of March 31, 2023, 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 March 31, 2023 and December 31, 2022 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 March 31, 2023:
Automotive	$     5,006,190	$         44,878	$     5,051,068
Non-automotive	2,850,623	828,034	3,678,657
Total net sales	$     7,856,813	$       872,912	$     8,729,725
Three Months Ended March 31, 2022:
Automotive	$     4,904,183	$         41,463	$     4,945,646
Non-automotive	3,249,650	1,002,400	4,252,050
Total net sales	$     8,153,833	$     1,043,863	$     9,197,696

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

	Fastener	Assembly Equipment	Consolidated
Three Months Ended March 31, 2023:
United States	$     6,391,747	$      786,571	$     7,178,318
Foreign	1,465,066	86,341	1,551,407
Total net sales	$     7,856,813	$      872,912	$     8,729,725
Three Months Ended March 31, 2022:
United States	$     6,760,129	$   1,004,151	$     7,764,280
Foreign	1,393,704	39,712	1,433,416
Total net sales	$     8,153,833	$   1,043,863	$     9,197,696