4/3/2013 1:01:00 AM
NEWS BRIEF
Chicago Rivet & Machine Co. reported revenue increased to the highest level in five years, while net income increased to the highest level in a decade.
Sales rose 10.7% to $34.2 million, aided by domestic automotive production that reached its highest level since 2007 as well as increased volume to certain non-automotive customers.
The increase in revenue more than offset raw material price fluctuations, resulting in 39% net income gain to $1.7 million, or $1.81 per share, in 2012. These results enabled the payment of an extra dividend in the fourth quarter, which brought the total dividend payout for 2012 to the highest amount in nine years.
Chicago Rivet produces rivets, rivet-setting machines, parts and tooling for the automotive and appliance industries. The company relies primarily on independent sales representatives.
Chicago Rivet has fastener operations in Naperville, IL; Madison Heights, MI; and Tyrone, PA.
“The pace of the domestic economic recovery continued to be slow in 2012, with high unemployment and stagnant wage growth, as well as the lingering effects of the financial crisis, keeping consumer spending restrained.”
The automotive sector was an exception to these forces as the average age of cars on U.S. roads reached an all-time high, which helped propel auto sales to double digit growth for the third straight year after the recent recession.
Fastener segment sales grew 11.4% to $31 million. The fourth quarter of 2012 marked the thirteenth consecutive quarter of sales exceeding the year earlier quarter.
“Higher raw material prices early in the year receded as the year progressed leaving most cost of sales components increasing at the year’s inflationary rate.”
The combination of higher sales and moderate increases in cost components resulted in an increase in fastener segment gross margins of $866,485 during 2012 compared to 2011.
Assembly equipment segment revenues grew 4.6% to $3.2 million.
“An increase in the number of machines shipped, as well as a higher average unit value during 2012, accounted for most of the increase in the equipment segment sales.”
By holding operating costs to levels consistent with the prior year, the higher sales resulted in an increase in assembly equipment gross margins of $135,393 in 2012.
Other income was $118,099 in 2012, compared to $249,804 in 2011. The decline was primarily due to a gain of approximately $142,000 in 2011 from the sale of the company’s Jefferson, IA, property, which had formerly been used in its fastener segment operations.
Capital expenditures during 2012 totaled $1,187,746, of which $1,018,734 was invested in equipment for Chicago Rivet’s fastener operations. Inspection equipment accounted for $450,720 of the fastener segment additions while cold heading and screw machine equipment comprised $371,466 of the total.
Equipment to perform secondary operations on parts accounted for $46,582 of the additions, while the remaining additions of $149,966 were for various general plant and office equipment. ©2013 GlobalFastenerNews.com
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