Revenue

9 Months Ended

Sep. 30, 2020

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 2020, the Company had no 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 September 30, 2020, and December 31, 2019 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, 2020:
Automotive	$     4,660,451	$         34,687	$     4,695,138
Non-automotive	2,363,965	586,156	2,950,121
Total net sales	$     7,024,416	$       620,843	$     7,645,259
Three Months Ended September 30, 2019:
Automotive	$     4,698,298	$         61,298	$     4,759,596
Non-automotive	2,608,597	820,712	3,429,309
Total net sales	$     7,306,895	$       882,010	$     8,188,905
Nine Months Ended September 30, 2020:
Automotive	$     10,653,621	$         107,476	$   10,761,097
Non-automotive	6,621,934	1,942,203	8,564,137
Total net sales	$   17,275,555	$    2,049,679	$ 19,325,234
Nine Months Ended September 30, 2019:
Automotive	$     14,296,552	$       166,713	$  14,463,265
Non-automotive	8,406,167	2,816,602	11,222,769
Total net sales	$   22,702,719	$    2,983,315	$  25,686,034

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

	Fastener	Assembly Equipment	Consolidated
Three Months Ended September 30, 2020:
United States	$   5,909,756	$    603,858	$   6,513,614
Foreign	1,114,660	16,985	1,131,645
Total net sales	$   7,024,416	$    620,843	$   7,645,259
Three Months Ended September 30, 2019:
United States	$   6,252,110	$    823,137	$ 7,075,247
Foreign	1,054,785	58,873	1,113,658
Total net sales	$   7,306,895	$  882,010	$ 8,188,905
Nine Months Ended September 30, 2020:
United States	$    14,721,327	$    1,891,485	$ 16,612,812
Foreign	2,554,228	158,194	2,712,422
Total net sales	$  17,275,555	$    2,049,679	$ 19,325,234
Nine Months Ended September 30, 2019:
United States	$   19,443,934	$    2,731,126	$ 22,175,060
Foreign	3,258,785	252,189	3,510,874
Total net sales	$   22,702,719	$    2,983,315	$ 25,686,034