Revenue

3 Months Ended

Mar. 31, 2021

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 2021, the Company realized $235,210 related to such contracts and $120,879 is the remaining performance obligation under such contracts which the Company expects to recognize as revenue in the second quarter.

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, 2021 and December 31, 2020 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, 2021:
Automotive	$     5,059,469	$         32,973	$     5,092,442
Non-automotive	3,089,209	1,123,298	4,212,507
Total net sales	$     8,148,678	$    1,156,271	$     9,304,949
Three Months Ended March 31, 2020:
Automotive	$     4,413,737	$         33,459	$     4,447,196
Non-automotive	2,323,660	805,599	3,129,259
Total net sales	$     6,737,397	$       839,058	$     7,576,455

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

	Fastener	Assembly Equipment	Consolidated
Three Months Ended March 31, 2021:
United States	$   6,437,852	$    1,130,360	$   7,568,212
Foreign	1,710,826	25,911	1,736,737
Total net sales	$   8,148,678	$     1,156,271	$   9,304,949
Three Months Ended March 31, 2020:
United States	$   5,740,925	$    748,486	$ 6,489,411
Foreign	996,472	90,572	1,087,044
Total net sales	$   6,737,397	$    839,058	$ 7,576,455