-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CMYVHxcl+lLPCRLDfrGIIT2B6AJUNgU1pSaF97PigEqOoR2vmOrQC0/YAhYGCtU+ JT5pXp+UI7HNQlvg2pA/1g== 0000950137-05-005577.txt : 20050509 0000950137-05-005577.hdr.sgml : 20050509 20050509171658 ACCESSION NUMBER: 0000950137-05-005577 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050331 FILED AS OF DATE: 20050509 DATE AS OF CHANGE: 20050509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHICAGO RIVET & MACHINE CO CENTRAL INDEX KEY: 0000019871 STANDARD INDUSTRIAL CLASSIFICATION: METALWORKING MACHINERY & EQUIPMENT [3540] IRS NUMBER: 360904920 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01227 FILM NUMBER: 05812772 BUSINESS ADDRESS: STREET 1: 901 FRONTENAC RD STREET 2: P O BOX 3061 CITY: NAPERVILLE STATE: IL ZIP: 60566 BUSINESS PHONE: 6303578500 MAIL ADDRESS: STREET 1: 901 FRONTENAC RD STREET 2: P O BOX 3061 CITY: NAPERVILLE STATE: IL ZIP: 60566 10-Q 1 c95061e10vq.txt QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ----------- FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 0-1227 Chicago Rivet & Machine Co. (Exact Name of Registrant as Specified in Its Charter) Illinois 36-0904920 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 901 Frontenac Road, Naperville, Illinois 60563 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (630) 357-8500 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ___ No X As of March 31, 2005, 966,132 shares of the registrant's common stock were outstanding. CHICAGO RIVET & MACHINE CO. INDEX
PART I. FINANCIAL INFORMATION Page ---- Consolidated Balance Sheets at March 31, 2005 and December 31, 2004 2-3 Consolidated Statements of Operations for the Three Months Ended March 31, 2005 and 2004 4 Consolidated Statements of Retained Earnings for the Three Months Ended March 31, 2005 and 2004 5 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2005 and 2004 6 Notes to the Consolidated Financial Statements 7-8 Management's Discussion and Analysis of Financial Condition and Results of Operations 9-10 Controls and Procedures 11 PART II. OTHER INFORMATION 12-20
Item 1. Financial Statements. CHICAGO RIVET & MACHINE CO. Consolidated Balance Sheets March 31, 2005 and December 31, 2004
March 31, December 31, 2005 2004 ---- ---- (Unaudited) Assets Current Assets: Cash and cash equivalents $ 4,854,350 $ 5,464,368 Certificates of deposit 805,000 805,000 Accounts receivable - net of allowances 5,699,195 4,867,615 Inventories: Raw materials 1,799,100 1,693,341 Work in process 2,267,379 2,136,996 Finished goods 2,391,099 2,412,133 ----------- ----------- Total inventories 6,457,578 6,242,470 ----------- ----------- Deferred income taxes 561,191 554,191 Other current assets 293,208 219,497 ----------- ----------- Total current assets 18,670,522 18,153,141 ----------- ----------- Property, Plant and Equipment: Land and improvements 1,015,635 1,015,635 Buildings and improvements 5,823,984 5,823,984 Production equipment, leased machines and other 29,290,409 29,272,638 ----------- ----------- 36,130,028 36,112,257 Less accumulated depreciation 25,378,611 24,965,941 ----------- ----------- Net property, plant and equipment 10,751,417 11,146,316 ----------- ----------- Total assets $29,421,939 $29,299,457 =========== ===========
See Notes to the Consolidated Financial Statements 2 CHICAGO RIVET & MACHINE CO. Consolidated Balance Sheets March 31, 2005 and December 31, 2004
March 31, December 31, 2005 2004 ---- ---- (Unaudited) Liabilities and Shareholders' Equity Current Liabilities: Accounts payable 2,038,978 1,367,221 Accrued wages and salaries 816,469 706,701 Contributions due profit sharing plan -- 252,312 Other accrued expenses 643,502 604,645 ------------ ------------ Total current liabilities 3,498,949 2,930,879 Deferred income taxes 1,501,275 1,551,275 ------------ ------------ Total liabilities 5,000,224 4,482,154 ------------ ------------ Commitments and contingencies (Note 4) Shareholders' Equity: Preferred stock, no par value, 500,000 shares authorized: none outstanding -- -- Common stock, $1.00 par value, 4,000,000 shares authorized: 1,138,096 shares issued 1,138,096 1,138,096 Additional paid-in capital 447,134 447,134 Retained earnings 26,758,583 27,154,171 Treasury stock, 171,964 shares at cost (3,922,098) (3,922,098) ------------ ------------ Total shareholders' equity 24,421,715 24,817,303 ------------ ------------ Total liabilities and shareholders' equity $ 29,421,939 $ 29,299,457 ============ ============
See Notes to the Consolidated Financial Statements 3 CHICAGO RIVET & MACHINE CO. Consolidated Statements of Operations For the Three Months Ended March 31, 2005 and 2004 (Unaudited)
2005 2004 ---- ---- Net sales $ 10,055,119 $ 10,141,957 Lease revenue 27,743 27,007 ------------ ------------ 10,082,862 10,168,964 Cost of goods sold and costs related to lease revenue 8,480,423 8,146,558 ------------ ------------ Gross profit 1,602,439 2,022,406 Selling and administrative expenses 1,749,766 1,596,349 ------------ ------------ Operating profit (loss) (147,327) 426,057 Other income and expenses: Interest income 26,762 14,381 Other income, net of other expense 4,800 2,550 ------------ ------------ Income (loss) before income taxes (115,765) 442,988 Provision (benefit) for income taxes (39,000) 152,000 ------------ ------------ Net Income (loss) $ (76,765) $ 290,988 ============ ============ Average common shares outstanding 966,132 966,132 ============ ============ Per share data: Net income (loss) per share $ (0.08) $ 0.30 ============ ============ Cash dividends declared per share $ 0.33 $ 0.18 ============ ============
See Notes to the Consolidated Financial Statements 4 CHICAGO RIVET & MACHINE CO. Consolidated Statements of Retained Earnings For the Three Months Ended March 31, 2005 and 2004 (Unaudited)
2005 2004 ---- ---- Retained earnings at beginning of period $ 27,154,171 $ 26,326,352 Net income (loss) for the three months ended (76,765) 290,988 Cash dividends declared in the period; $.33 per share in 2005 and $.18 in 2004 (318,823) (173,904) ------------ ------------ Retained earnings at end of period $ 26,758,583 $ 26,443,436 ============ ============
See Notes to the Consolidated Financial Statements 5 CHICAGO RIVET & MACHINE CO. Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2005 and 2004 (Unaudited)
2005 2004 ---- ---- Cash flows from operating activities: Net income (loss) $ (76,765) $ 290,988 Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation 419,808 432,678 Net gain on the sale of equipment (300) (430) Deferred income taxes (57,000) (39,000) Changes in operating assets and liabilities: Accounts receivable, net (831,580) (1,095,255) Inventories (215,108) (103,929) Other current assets (73,711) (45,205) Accounts payable 526,838 444,781 Accrued wages and salaries 109,768 182,574 Accrued profit sharing (252,312) (70,257) Other accrued expenses 38,857 236,362 ----------- ----------- Net cash (used in) provided by operating activities (411,505) 233,307 ----------- ----------- Cash flows from investing activities: Capital expenditures (24,909) (61,512) Proceeds from the sale of properties 300 430 Proceeds from held-to-maturity securities 225,000 200,000 Purchases of held-to-maturity securities (225,000) (200,000) ----------- ----------- Net cash used in investing activities (24,609) (61,082) ----------- ----------- Cash flows from financing activities: Cash dividends paid (173,904) (173,904) ----------- ----------- Net cash used in financing activities (173,904) (173,904) ----------- ----------- Net decrease in cash and cash equivalents (610,018) (1,679) Cash and cash equivalents at beginning of period 5,464,368 5,530,099 ----------- ----------- Cash and cash equivalents at end of period $ 4,854,350 $ 5,528,420 =========== ===========
See Notes to the Consolidated Financial Statements 6 CHICAGO RIVET & MACHINE CO. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. In the opinion of the Company, the accompanying financial statements contain all adjustments necessary to present fairly the financial position of the Company as of March 31, 2005 (unaudited) and December 31, 2004 (audited) and the results of operations and changes in cash flows for the indicated periods. The Company uses estimated gross profit rates to determine the cost of goods sold during interim periods on a portion of its operations. Actual results could differ from those estimates and will be adjusted, as necessary, following the Company's annual physical inventory in the fourth quarter. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. The results of operations for the three-month period ended March 31, 2005 are not necessarily indicative of the results to be expected for the year. 3. The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily in the automotive industry. The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States. 4. The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, in the normal course of business. While it is not possible at this time to establish the ultimate amount of liability with respect to contingent liabilities, including those related to legal proceedings, management is of the opinion that the aggregate amount of any such liabilities, for which provision has not been made, will not have a material adverse effect on the Company's financial position. 7 CHICAGO RIVET & MACHINE CO. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 5. Segment Information -- The Company operates in two business segments as determined by its products. The fastener segment includes rivets, cold-formed fasteners and screw machine products. The assembly equipment segment includes automatic rivet setting machines, parts and tools for such machines and the leasing of automatic rivet setting machines. Information by segment is as follows:
Assembly Fastener Equipment Other Consolidated -------- --------- ----- ------------ Three Months Ended March 31, 2005: Net sales and lease revenue $ 8,347,558 $ 1,735,304 $ 10,082,862 Depreciation 375,915 26,106 17,787 419,808 Segment profit 57,643 440,161 497,804 Selling and administrative expenses 640,331 640,331 Interest expense -- -- Interest income (26,762) (26,762) ------------ Loss before income taxes (115,765) ------------ Capital expenditures 20,780 1,520 2,609 24,909 Segment assets: Accounts receivable, net 5,058,367 640,828 5,699,195 Inventory 4,521,144 1,936,434 6,457,578 Property, plant and equipment, net 8,557,133 1,330,851 863,433 10,751,417 Other assets 6,513,749 6,513,749 ------------ 29,421,939 ------------ Three Months Ended March 31, 2004: Net sales and lease revenue $ 8,261,283 $ 1,907,681 $ -- $ 10,168,964 Depreciation 371,340 28,518 32,820 432,678 Segment profit 574,733 434,003 -- 1,008,736 Selling and administrative expenses 580,129 580,129 Interest expense -- -- Interest income (14,381) (14,381) ------------ Income before income taxes 442,988 ------------ Capital expenditures 61,512 -- -- 61,512 Segment assets: Accounts receivable, net 4,767,831 876,592 -- 5,644,423 Inventory 3,396,822 1,940,895 -- 5,337,717 Property, plant and equipment, net 8,789,175 1,420,013 969,220 11,178,408 Other assets -- -- 6,849,376 6,849,376 ------------ 29,009,924 ------------
8 CHICAGO RIVET & MACHINE CO. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results for the first quarter of 2005 were quite disappointing. As a result of lower assembly equipment sales revenue, higher raw material costs and a significant increase in administrative expenses, the Company recorded its first quarterly loss in over 17 years. Within the fastener segment, revenues increased approximately 1%, from $8,261,283 in the first quarter of 2004 to $8,347,558 in the first quarter of 2005. However, that change includes the pass through of a portion of higher raw material prices that were incurred in the first quarter of 2005. First quarter revenues, excluding the portion attributable to recovery of raw material price increases, were nearly 4.5% lower than in the first quarter of 2004. Gross margins declined $403,000 compared to the first quarter of 2004. The major factors contributing to the decrease in margins were an increase of $476,000 in the cost of raw material and outside services, due primarily to increases in the price of steel, partially offset by a reduction in tooling expense of $117,000. The balance represents the net effect of various smaller changes in other components of cost of sales. Revenues within the assembly equipment segment declined 9% in the first quarter of 2005 compared to the first quarter of 2004. Demand for our products in this segment continues to be comparatively weak. We were able to reduce most costs of manufacturing by amounts consistent with the reduction in volume and as a result, gross margins declined by $17,000, which is a 2% reduction from the year earlier period. Selling and administrative expenses during the first quarter of 2005 were $153,000 higher than during the first quarter of 2004. Major factors contributing to this increase included an increase in professional services of $145,000 primarily related to reviews of procedures and documentation in connection with Sarbanes-Oxley Act of 2002 compliance. In addition, legal fees increased approximately $86,000 in connection with ongoing litigation and other matters. These increases were partially offset by a reduction of $63,000 in profit sharing expense and smaller, net reductions in a variety of other expenses. Working capital declined by $52,000 from the beginning of the quarter and amounted to $15.2 million at the end of the first quarter. Inventory balances increased by $215,000 during the quarter. During the latter part of 2004, inventory levels increased in response to concerns about availability and rising prices for raw material. Although those concerns eased during the quarter, the decline in demand for our products limited our ability to reduce inventory levels during the quarter. Holdings in cash, cash equivalents and certificates of deposit amounted to $5.7 million at the end of the quarter, a decline of $.6 million. Accounts receivable balances increased by $.8 million during the quarter as a result of first quarter 2005 sales being higher than fourth quarter 2004 sales. Current liabilities increased by $568,000 during the quarter, primarily due to increases in accounts payable that are related to an extra dividend, declared in February 2005 and paid in April 2005, with the balance of the change due primarily to timing of payments to vendors. The Company has a $1.0 million line of credit, which expires May 31, 2005. This line of credit remains unused. Management believes that current cash, cash equivalents, operating cash flow and the available line of credit will provide adequate working capital for the foreseeable future. The recent quarter has been a very difficult one. Demand from our major customers weakened during the first quarter. While we anticipate that demand will improve, the amount and timing is uncertain and dependent upon factors that are beyond our control. Domestic automobile production, especially that of the " Big Three," is one such factor. Overall domestic manufacturing levels are another factor. The customers that we serve are increasingly subject to foreign competition. In response, they are increasingly turning to foreign sources for product or have outsourced portions of their operations to other, lower cost countries. In either case, the result adversely impacts our potential market and increases the competition for available market share. These conditions continue to limit our pricing ability. We have been fairly successful in controlling manufacturing costs, with the notable exception of raw material costs which have increased significantly over the past year. While prices have recently softened slightly, raw material prices remain much higher than one year ago and our ability to pass these higher costs on to customers remains limited by the factors described above. We do not anticipate that the situation will 9 change appreciably in the near term. While we anticipate that costs associated with Sarbanes-Oxley compliance will eventually decline somewhat, we expect that second quarter costs will be approximately equal to those incurred in the first quarter. We also expect legal expenses will be higher than usual during the coming months. We will continue to seek opportunities to expand our market and to increase our share of the existing market, while working to further reduce our costs. Our future success is tied to our ability to successfully accomplish these two objectives. The foregoing discussion is only intended to provide highlights of operations for the periods covered. Additional information is contained in our Form 10-Q, which has been filed with the SEC and is available to shareholders upon request from the Company, or via the internet through the SEC's EDGAR database. This discussion contains certain "forward-looking statements" which are inherently subject to risks and uncertainties that may cause actual events to differ materially from those discussed herein. Factors which may cause such differences in events include, among other things, our ability to maintain our relationships with our significant customers; increased global competition; increases in the prices of, or limitations on the availability of, our primary raw materials; or a downturn in the automotive industry, upon which we rely for sales revenue, and which is cyclical and dependent on, among other things, consumer spending, international economic conditions and regulations and policies regarding international trade. Many of these factors are beyond our ability to control or predict. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to publish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 10 CHICAGO RIVET & MACHINE CO. Item 4. Controls and Procedures. (a) Disclosure Controls and Procedures. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act. (b) Internal Control Over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 11 PART II -- OTHER INFORMATION Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities. Under the terms of a stock repurchase authorization originally approved by the Board of Directors of the Company in February of 1990, as amended, the Company is authorized to repurchase up to an aggregate of 200,000 shares of its common stock, in the open market or in private transactions, at prices deemed reasonable by management. Cumulative purchases under the repurchase authorization have amounted to 162,996 shares at an average price of $15.66 per share. The Company has not purchased any shares of its common stock since 2002. Item 6. Exhibits. 31 Rule 13a-14(a) or 15d-14(a) Certifications 31.1 Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Section 1350 Certifications 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.1 Interim Report to Shareholders for the quarter ended March 31, 2005. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CHICAGO RIVET & MACHINE CO. ---------------------------------- (Registrant) Date: May 9, 2005 /s/ John A. Morrissey ---------------------------------- John A. Morrissey Chairman of the Board of Directors and Chief Executive Officer Date: May 9, 2005 /s/ John C. Osterman ---------------------------------- John C. Osterman President, Chief Operating Officer and Treasurer (Principal Financial Officer) Date: May 9, 2005 /s/ Michael J. Bourg ---------------------------------- Michael J. Bourg Controller (Principal Accounting Officer) 13 CHICAGO RIVET & MACHINE CO. EXHIBITS INDEX TO EXHIBITS
Exhibit Number Page - ------ ---- 31 Rule 13a-14(a) or 15d-14(a) Certifications 31.1 Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 15 31.2 Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 16 32 Section 1350 Certifications 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 17 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 18 99.1 Interim Report to Shareholders for the quarter ended March 31, 2005 19 - 20
14 EX-31.1 2 c95061exv31w1.txt CERTIFICATION EXHIBIT 31.1 I, John A. Morrissey, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Chicago Rivet & Machine Co.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 9, 2005 /s/ John A. Morrissey ----------- ---------------------- John A. Morrissey Chairman 15 EX-31.2 3 c95061exv31w2.txt CERTIFICATION EXHIBIT 31.2 I, John C. Osterman, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Chicago Rivet & Machine Co.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 9, 2005 /s/ John C. Osterman ----------- -------------------- John C. Osterman President/Treasurer 16 EX-32.1 4 c95061exv32w1.txt CERTIFICATION EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-Q of Chicago Rivet & Machine Co. (the "Company") for the quarterly period ended March 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John A. Morrissey, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ John A. Morrissey - --------------------- Name: John A. Morrissey Title: Chief Executive Officer Date: May 9, 2005 17 EX-32.2 5 c95061exv32w2.txt CERTIFICATION EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-Q of Chicago Rivet & Machine Co. (the "Company") for the quarterly period ended March 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John C. Osterman, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ John C. Osterman - -------------------- Name: John C. Osterman Title: Chief Financial Officer Date: May 9, 2005 18 EX-99.1 6 c95061exv99w1.txt INTERIM REPORT TO SHAREHOLDERS EXHIBIT 99.1 To Our Shareholders: The comparative results of operations of Chicago Rivet & Machine Co. for the first quarter of 2005 and 2004 are summarized below. Results for the first quarter of 2005 were quite disappointing. As a result of lower assembly equipment sales revenue, higher raw material costs and a significant increase in administrative expenses, the Company recorded its first quarterly loss in over 17 years. Within the fastener segment, revenues increased approximately 1%, from $8,261,283 in the first quarter of 2004 to $8,347,558 in the first quarter of 2005. However, that change includes the pass through of a portion of higher raw material prices that were incurred in the first quarter of 2005. First quarter revenues, excluding the portion attributable to recovery of raw material price increases, were nearly 4.5% lower than in the first quarter of 2004. Gross margins declined $403,000 compared to the first quarter of 2004. The major factors contributing to the decrease in margins were an increase of $476,000 in the cost of raw material and outside services, due primarily to increases in the price of steel, partially offset by a reduction in tooling expense of $117,000. The balance represents the net effect of various smaller changes in other components of cost of sales. Revenues within the assembly equipment segment declined 9% in the first quarter of 2005 compared to the first quarter of 2004. Demand for our products in this segment continues to be comparatively weak. We were able to reduce most costs of manufacturing by amounts consistent with the reduction in volume and as a result, gross margins declined by $17,000, which is a 2% reduction from the year earlier period. Selling and administrative expenses during the first quarter of 2005 were $153,000 higher than during the first quarter of 2004. Major factors contributing to this increase included an increase in professional services of $145,000 primarily related to reviews of procedures and documentation in connection with Sarbanes-Oxley Act of 2002 compliance. In addition, legal fees increased approximately $86,000 in connection with ongoing litigation and other matters. These increases were partially offset by a reduction of $63,000 in profit sharing expense and smaller, net reductions in a variety of other expenses. The recent quarter has been a very difficult one. Demand from our major customers weakened during the first quarter. While we anticipate that demand will improve, the amount and timing is uncertain and dependent upon factors that are beyond our control. Domestic automobile production, especially that of the "Big Three," is one such factor. Overall domestic manufacturing levels are another factor. The customers that we serve are increasingly subject to foreign competition. In response, they are increasingly turning to foreign sources for product or have outsourced portions of their operations to other, lower cost countries. In either case, the result adversely impacts our potential market and increases the competition for available market share. These conditions continue to limit our pricing ability. We have been fairly successful in controlling manufacturing costs, with the notable exception of raw material costs which have increased significantly over the past year. While prices have recently softened slightly, raw material prices remain much higher than one year ago and our ability to pass these higher costs on to customers remains limited by the factors described above. We do not anticipate that the situation will change appreciably in the near term. While we anticipate that costs associated with Sarbanes-Oxley compliance will eventually decline somewhat, we expect that second quarter costs will be approximately equal to those incurred in the first quarter. We also expect legal expenses will be higher than usual during the coming months. We will continue to seek opportunities to expand our market and to increase our share of the existing market, while working to further reduce our costs. Our future success is tied to our ability to successfully accomplish these two objectives. Respectfully yours, John A. Morrissey John C. Osterman Chairman President 19 May 9, 2005 The foregoing discussion is only intended to provide highlights of operations for the periods covered. Additional information is contained in our Form 10-Q, which has been filed with the SEC and is available to shareholders upon request from the Company, or via the internet through the SEC's EDGAR database. This discussion contains certain "forward-looking statements" which are inherently subject to risks and uncertainties that may cause actual events to differ materially from those discussed herein. Factors which may cause such differences in events include, among other things, our ability to maintain our relationships with our significant customers; increased global competition; increases in the prices of, or limitations on the availability of, our primary raw materials; or a downturn in the automotive industry, upon which we rely for sales revenue, and which is cyclical and dependent on, among other things, consumer spending, international economic conditions and regulations and policies regarding international trade. Many of these factors are beyond our ability to control or predict. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to publish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. CHICAGO RIVET & MACHINE CO. Summary of Consolidated Results of Operations For the Three Months Ended March 31,
2005 2004 ---- ---- Net sales and lease revenue $ 10,082,862 $ 10,168,964 Income (loss) before taxes (115,765) 442,988 Net income (loss) (76,765) 290,988 Net income (loss) per share (.08) .30 Average shares outstanding 966,132 966,132
(All figures subject to year-end audit) 20 -----END PRIVACY-ENHANCED MESSAGE-----