Jason Sandefur

Strong competition and a $662,000 increase in material costs hurt fastener profit for Chicago Rivet & Machine Co. during the third quarter of 2005, despite an 8.5% increase in sales to $8.48 million. The company reported segment net income totaled $118,115 compared with an $874,280 profit during the third quarter of 2004.
Fastener revenue rose 3.3% to $25.3 million during the first nine months of 2005, but cost of goods sold jumped $2.4 million during the period, resulting in a $1.6 million decline in gross margins to $230,607. Chicago Rivet reported that higher material costs account for $1.53 million of this change. In addition, nine-month outside processing costs jumped $576,000.
Overall Q3 sales grew 4.2% to $9.7 million, but the company reported a $169,780 loss compared with a $601,615 profit during the third quarter of 2004. Consolidated nine-month sales increased slightly to $29.78 million, while profit dropped to a $399,032 loss compared with profits of $1.3 million during the first nine-months of 2004.
“Clearly, results of operations are unsatisfactory,” the company stated in its SEC filing. “However, given current conditions, we do not foresee significant improvements in the short term. The market for our products remains weak. Competition from foreign sources continues to be a significant factor, as products previously produced in this country are now imported as completed assemblies.” Web: chicagorivet.com �2005 FastenerNews.com