Chicago Rivet & Machine Co. reported fastener segment revenues fell 7.6% to $8.4 million in the first quarter of 2015. The decline was primarily due to reduced demand from certain automotive customers, including a $269,000 drop in shipments to a customer with a production facility in China.
“Additionally, even though our export sales account for less than 10% of overall sales, certain foreign markets have exhibited weakness recently,” the company stated.
The impact of lower sales was lessened by a $123,000 reduction in tooling expense and a $68,000 reduction in natural gas expense, as well as lower expenditures for supplies and maintenance.
Q1 fastener segment gross margin decreased by $178,000.
Assembly equipment segment revenues increased 2.4% to $883,294, primarily due to an increase in parts and tool sales as fewer machines were shipped in the current year quarter compared to last year. Segment margins improved to $10,000 in Q1.
Chicago Rivet’s effective tax rates declined two percentage points to 31.8%, lowered by the Domestic Production Activities Deduction allowed under Internal Revenue Code Section 199.
Working capital amounted to $15.9 million as of March 31, 2015, a decrease of approximately $.1 million from the beginning of the current year.
“We are pleased to report very respectable results for the first quarter of 2015, in spite of uneven demand in certain markets,” the company stated. “We have adjusted our work schedules in response to reduced customer demand and will continue to emphasize cost controls wherever possible.
“Conditions in the automotive market, upon which we rely for the majority of our revenues, remain favorable, even though the current year growth rate is expected to be lower than in recent years.
“We have seen a firming of fastener segment demand early in the second quarter, however equipment segment demand has been mixed, with increased tools and parts orders being somewhat offset by lower machine orders.”
Overall Q1 revenues dropped 6.7% to $9.3 million, primarily related to weaker demand from certain automotive customers and lower export sales. Q1 net income fell 18.6% to $462,473, or $0.48 per share.
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