Revenue

9 Months Ended

Sep. 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 third quarter of 2023, the Company realized revenue of $161,594 related to such contracts and has a remaining performance obligation of $303,906 which is expected to be recognized over the next six months.

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, 2023 and December 31, 2022 reserves for warranty claims were not material.  Cash received by the Company prior to transfer of control 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, 2023:
Automotive	$     5,184,547	$         12,363	$     5,196,910
Non-automotive	1,792,894	956,368	2,749,262
Total net sales	$     6,977,441	$      968,731	$     7,946,172
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
Nine Months Ended September 30, 2023:
Automotive	$  15,150,117	$         95,464	$   15,245,581
Non-automotive	7,045,250	2,435,997	9,481,247
Total net sales	$    22,195,367	$     2,531,461	$   24,726,828
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

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

	Fastener	Assembly Equipment	Consolidated
Three Months Ended September 30, 2023:
United States	$   5,398,688	$     961,618	$   6,360,306
Foreign	1,578,753	7,113	1,585,866
Total net sales	$   6,977,441	$     968,731	$   7,946,172
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
Nine Months Ended September 30, 2023:
United States	$   17,927,910	$   2,402,734	$   20,248,872
Foreign	4,267,457	128,727	4,477,956
Total net sales	$   22,195,367	$   2,531,461	$   24,726,828
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