Revenue and Sales Performance - In 2024, sales to the top three customers accounted for approximately 35% of the Company's consolidated revenues, with TI Group Automotive Systems, LLC at 13%, Martinrea International Inc. at 13%, and Cooper-Standard Holdings Inc. at 9%[27]. - Sales to foreign customers represented approximately 19% of total sales in 2024, up from 18% in 2023[19]. - For the full year 2024, net sales decreased by 14% to $26,986,627 from $31,507,722 in 2023, with a net loss of $5,615,614 or $5.81 per share[61]. - Fourth quarter 2024 sales were $4,104,048, a decline of 40% compared to $6,780,894 in the fourth quarter of 2023[61]. - Total net sales for the year ended December 31, 2024, were $27,018,232, with external customer sales amounting to $26,986,627[137]. - The automotive segment generated $19,429,009 in sales for 2023, down from $19,297,188 in 2022, while non-automotive sales decreased from $12,078,713 to $11,409,322[140]. Financial Losses and Concerns - The Company experienced significant recurring operating losses, driven by yearly declines in revenue and negative cash flows, raising substantial doubt about its ability to continue as a going concern[21]. - The Company reported operating losses of $5,164,054 for the year ended December 31, 2024, compared to $5,837,246 for the year ended December 31, 2023, indicating a slight improvement in performance[76]. - The Company incurred a net loss of $5,615,614 in 2024, compared to a net loss of $4,401,584 in 2023, representing an increase in losses[98]. - The Company has experienced significant recurring operating losses primarily driven by a continuous decline in revenues and negative cash flows from operations[156]. - Uncertainty remains regarding the Company's ability to increase sales, secure additional financing, and comply with loan covenants[158]. Operational Changes and Workforce - The Company employed 161 people as of December 31, 2024, reflecting a reduction of 19 employees due to the closure of the Albia, Iowa manufacturing facility[19]. - The Company closed its Albia, Iowa plant and consolidated operations with the Tyrone facility, generating approximately $678,000 in net cash proceeds from the sale of the Albia facility[76]. - The company announced the closure of its Albia, Iowa manufacturing facility, impacting 19 employees, with exit costs totaling $171,214[146]. Cost Management and Expenditures - Selling and administrative expenses rose by 19% to $6,224,234 in 2024, representing 23.1% of net sales compared to 16.6% in 2023[67]. - Total capital expenditures in 2024 were $651,398, significantly lower than $1,078,367 in 2023[71][72]. - Capital expenditures for 2024 were $(651,398), down from $(1,078,367) in 2023, indicating a reduction in investment[104]. - The company incurred a $1,100,000 charge against net sales related to a customer settlement during the year[137]. Financial Position and Liquidity - Cash and cash equivalents increased to $1,922,679 in 2024 from $1,387,075 in 2023, showing improved liquidity[95]. - The Company has entered into a one-year, $3,000,000 operating credit agreement to enhance liquidity, consisting of a $2,500,000 revolving line of credit and a $500,000 non-revolving line of credit[76]. - Liquid assets as of December 31, 2024, totaled $2,169,955 with no debt, raising substantial doubt about the Company's ability to continue as a going concern[156]. - The Company’s total assets decreased to $23,370,174 in 2024 from $27,830,905 in 2023, indicating a reduction in overall financial strength[95]. - The Company’s total liabilities increased to $3,337,722 in 2024 from $1,864,016 in 2023, reflecting a significant rise in obligations[95]. Inventory and Receivables - The allowance for credit losses increased to $197,536 at the end of 2024, up from $160,000 at the end of 2023[131]. - Accounts receivable, net, increased to $1,180,971 in 2024 from $699,255 in 2023, reflecting a growth of approximately 69%[104]. - Inventories, net, decreased to $831,483 in 2024 from $1,793,577 in 2023, indicating a reduction of about 53.7%[104]. - Total inventories decreased from $7,868,653 in 2023 to $6,496,170 in 2024, with raw materials and work in process also showing declines[131]. Internal Controls and Compliance - The Company has identified a material weakness in internal control over financial reporting related to inventory valuation as of December 31, 2023, and 2024[40]. - Management has identified a material weakness in internal control over financial reporting related to inventory valuation as of December 31, 2023 and 2024[163]. - Remediation plans are being implemented to address the material weakness in internal control over financial reporting[164]. - The Company’s management concluded that the financial statements present fairly its financial position and results of operations despite the identified weaknesses[166]. Dividends and Shareholder Returns - The company paid four regular quarterly dividends in 2024 totaling $0.33 per share, continuing a 90-year record of consecutive dividends[70]. - The company declared dividends of $0.33 per share in 2024, down from $0.64 per share in 2023, resulting in total dividends paid of $(318,823) compared to $(618,325) in the previous year[104]. - The Company’s cash dividends declared per common share decreased from $0.64 in 2023 to $0.33 in 2024, indicating a reduction in shareholder returns[98].
Chicago Rivet & Machine (CVR) - 2024 Q4 - Annual Report