the fourth quarter and 1.4% for the year. However, the decline in automotive sales was more than offset by growth in
non-automotive
sales which increased
25.9% and 21.7% in the fourth quarter and for the full year of 2018, respectively, compared to 2017. For the fourth quarter, the fastener segment gross margin was $1,468,690 compared to $1,588,746 in the year earlier quarter, a decline of $120,056.
Steel is our primary raw material and we have experienced significant increases in our cost of steel during 2018 which was primarily responsible for the net decline in gross margins during the quarter despite the increase in sales. For the full year
2018, segment gross margin was $6,829,211 compared to $6,633,651 in 2017, an increase of $195,560, despite the higher raw material costs.
Assembly equipment segment revenues were $697,489 in the fourth quarter of 2018, a decline of $103,395, or 12.9%, compared to the fourth
quarter of 2017, when revenues were $800,884. For the full year 2018, assembly equipment segment revenues were $3,461,791, a decline of $324,959, or 8.6%, compared to $3,786,750 reported in 2017. The decline in fourth quarter and full year sales was
primarily due to a reduction in the number of high-dollar specialty machines shipped compared to the prior year periods, as the total number of machines shipped increased during 2018. The decline in assembly equipment segment sales was the primary
cause of the reduction in segment gross margins of $72,975 in the fourth quarter and $203,523 for the full year of 2018 compared to 2017.
Selling and administrative expenses were $5,503,111 in 2018 compared to $5,548,541 in 2017, a decline of $45,430, or 0.8%. The reduction was
primarily due to the ERP system conversion that was completed at one of our locations in 2017. This accounted for $167,000 of additional expenses in that year, which was only partially offset by a $113,000 increase in sales commissions, related to
higher sales, in 2018. As a percentage of net sales, selling and administrative expenses were 14.8% in 2018 compared to 15.5% in 2017.
Other income was $153,537 in 2018 compared to $100,901 in 2017. Other income is primarily comprised of interest income which increased during
the year due to rising interest rates.
The Companys effective income tax rates were 21.7% and 15.7% in 2018 and 2017, respectively.
The rate was lower than the U.S. federal statutory rate in 2017 primarily due to the enactment of the Tax Cuts and Jobs Act (the Act) in December 2017. Among other changes, the Act reduced the maximum corporate tax rate from 35% to 21%
beginning in 2018. Although the lower tax rate took effect in 2018, deferred tax assets and liabilities should be measured using the enacted tax rate expected to apply in the years in which they are expected to be settled. The Company recorded a
one-time
net income tax benefit of $432,000 in the fourth quarter of 2017 as a result of the revaluation of the Companys deferred tax assets and liabilities to reflect the lower future U.S. corporate tax
rates.
DIVIDENDS
In determining to
pay dividends, the Board considers current profitability, the outlook for longer-term profitability, known and potential cash requirements and the overall financial condition of the Company. The Company paid four regular quarterly dividends totaling
$.84 per share during 2018. In addition, an extra dividend of $.30 per share was paid during the first quarter, bringing the total distribution for the year to $1.14 per share. On February 18, 2019, the Board of Directors declared a regular
quarterly dividend of $.22 per share, an increase of 4.8% from the prior quarter, payable March 20, 2019 to shareholders of record on March 5, 2019. This continues the uninterrupted record of consecutive quarterly dividends paid by the
Company to its shareholders that extends over 85 years. At that same meeting, the Board also declared an extra dividend of $.30 per share payable March 20, 2019 to shareholders of record on March 5, 2019.
PROPERTY, PLANT AND EQUIPMENT
Total
capital expenditures in 2018 were $2,023,190. Fastener segment additions accounted for $1,635,115 of the total, including $956,739 for cold heading and screw machine equipment additions, $243,194 for
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