Chicago Rivet & Machine Co. reported fastener segment revenues declined 0.8% to $8.09 million in the third quarter of 2016.

The decline in sales during Q3 was offset by lower material costs, resulting in a 10.5% increase in Q3 gross margin to $1.77 million.

Fastener segment operating profit grew 15.4% to $1.03 million in Q3, with capital expenditures more than doubling to $842,048.

Overall company sales dropped 1.8% to $8.85 million in Q3, while operating profit rose 11.8% to $1.27 million.

Fastener segment sales during the first nine months of 2016 gained 2.3% to $25.4 million.

“The automotive sector is the primary market for our fastener segment products and the percentage increase in year to date segment sales exceeded that of domestic automotive sales,” the company stated.

Nine-month fastener segment capital expenditures increased 89% to $1.55 million. Profit increased 23% to $3.7 million, while gross margin improved 15.5% to $6.07 million.

“The increase in sales combined with favorable raw material prices resulted in improved margins,” the company added.

Overall company sales grew 2.8% to $28.3 million in the first nine months of 2016, with net income up 30.8% to $1.9 million.

But Chicago Rivet warned investors of headwinds.

“Domestic automotive sales in 2016 appear to have plateaued, which will make future growth for that segment more challenging.”