Revenue

6 Months Ended

Jun. 30, 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 second quarter of 2023, the Company did not realize any revenue related to such contracts and $379,000 is the remaining performance obligation under such contracts.

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, 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 June 30, 2023:
Automotive	$     4,959,381	$         38,223	$     4,997,604
Non-automotive	2,401,732	651,595	3,053,327
Total net sales	$     7,361,113	$       689,818	$     8,050,931
Three Months Ended June 30, 2022:
Automotive	$     4,550,809	$         59,818	$     4,610,627
Non-automotive	3,508,803	903,968	4,412,771
Total net sales	$     8,059,612	$       963,786	$     9,023,398
Six Months Ended June 30, 2023:
Automotive	$     9,965,571	$         83,101	$    10,048,672
Non-automotive	5,252,355	1,479,629	6,731,984
Total net sales	$    15,217,926	$     1,562,730	$    16,780,656
Six Months Ended June 30, 2022:
Automotive	$     9,454,992	$        101,652	$     9,556,644
Non-automotive	6,758,453	1,905,997	8,664,450
Total net sales	$    16,213,445	$     2,007,649	$    18,221,094

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

	Fastener	Assembly Equipment	Consolidated
Three Months Ended June 30, 2023:
United States	$     6,137,476	$      654,546	$     6,792,022
Foreign	1,223,637	35,272	1,258,909
Total net sales	$     7,361,113	$     689,818	$     8,050,931
Three Months Ended June 30, 2022:
United States	$     6,796,779	$      932,468	$     7,729,247
Foreign	1,262,833	31,318	1,294,151
Total net sales	$     8,059,612	$      963,786	$     9,023,398
Six Months Ended June 30, 2023
United States	$    12,529,223	$   1,441,117	$   13,970,340
Foreign	2,688,703	121,613	2,810,316
Total net sales	$    15,217,926	$   1,562,730	$   16,780,656
Six Months Ended June 30, 2022
United States	$    13,556,908	$   1,936,618	$    15,493,526
Foreign	2,656,537	71,031	2,727,568
Total net sales	$    16,213,445	$   2,007,649	$    18,221,094