Chicago Rivet & Machine Co. reported Fastener segment revenues increased 6% to $7.94 million in the third quarter of 2018. Q3 Fastener segment gross margin declined 8.3% to $1.34 million, hurt by rising domestic steel prices.

“Demand for our fastener segment products has benefited from a healthy domestic automotive market and the addition of new non-automotive customers during the past year,” the company stated in its quarterly report. “However, significant increases in steel prices, our primary raw material, in recent months have negatively impacted our gross margins and were the primary factor in reporting lower net income in the third quarter this year.

“Higher raw material prices remain a concern and further increases are expected in the near-term. Such costs can be difficult to recover in some of the markets we serve as certain customers expect prices to be held constant over the multi-year life of their parts.”

“In addition to higher raw material prices, we have also incurred higher than expected wages in the current year due to the tight labor market.”

Overall Chicago Rivet revenue grew 5.6% to $8.9 million in Q3, while net income down 20% to $287,749.

Fastener Segment revenue during the first nine months of 2018 climbed 6.5% to $25.9 million. Gross margin increased 6.2% to $5.4 million, with segment net income up 29% to $1.7 million.

Overall Chicago Rivet revenue improved 5% to $28.7 million, with net income gaining 29% to $1.7 million.

Capital expenditures for the first nine months of 2018 totaled $1.6 million, which primarily consisted of production equipment. Web: ChicagoRivet.com