Global Fastener News

Chicago Rivet’s Expanded Fastener Capacity Boosts Profit

Jason Sandefur

Reduced automotive demand lowered fastener revenue at Chicago Rivet & Machine Co. in 2007. Fastener sales dropped 3.9% to $33.08 million, though the impact was offset by sales to non-automotive customers as well as operating expense reductions.
Fastener tooling expenses were $163,000 lower in 2007. Likewise, investments in equipment during the last year allowed Chicago Rivet to keep formerly outsourced machining and parts sorting procedures in-house. This expanded capability contributing to a $571,000 reduction in outside production costs. The net decline in operating expenses resulted in a 3.7% improvement in fastener segment gross margin to $5.8 million.

“The most notable increase incurred during 2007 related to higher prices for non-ferrous metals,” the company stated in documents submitted to the Securities and Exchange Commission.

The transfer of fastener production from Jefferson, IA, to Tyrone, PA, which was completed at the end of 2006, also translated to operating cost reductions.
Capital expenditures for fastener production reached $390,258 in 2007. This included $123,000 for cold-heading equipment upgrades, $93,000 for secondary equipment, $61,000 for inspection and other equipment, and $113,000 for facility improvements.
Overall company net income rose 13% to $1.27 million during 2007, despite a 6.4% drop in revenue to $37.8 million.
Chicago Rivet said it’s bracing for the economic downturn of 2008.

“The outlook for 2008 is more challenging than a year ago,” the company stated. “With the possibility of a recession that would likely affect all the markets we serve, we expect customers will continue to demand higher quality and lower prices as their operations cope with a difficult economic environment. Our ability to increase revenues while diversifying our customer base will be significant factors determining our future success.” Web: chicagorivet.com �2008 FastenerNews.com