<PAGE>
EXHIBIT 99.1


To Our Shareholders:

                  The combination of higher raw material costs, increases in
administrative expenses and generally lower volumes adversely impacted our
results for the current quarter and for the year to date.

         Within the fastener segment, revenues increased less than 1%, from
$8,391,416 in the second quarter of 2004 to $8,444,808 in the second quarter of
2005. However, that improvement reflects the sale of product with higher unit
prices, which partially offset a decline in units sold. It also includes the
recovery of a portion of higher raw material costs that were incurred in the
second quarter of 2005. Second quarter revenues, excluding the recovery of raw
material price increases, were 2.9% lower than in the second quarter of 2004.
Gross margins declined approximately $698,000 compared to the second quarter of
2004. A change in product mix that favored product with higher material content
caused material costs to increase approximately $200,000 compared to the second
quarter of 2004. Material prices remained much higher than during the second
quarter of 2004 and market conditions were such that we had to absorb
approximately $67,000 of the increase in material prices. Other factors that
adversely impacted margins during the second quarter included an increase in
expenditures for perishable tooling of $159,000 and a $40,000 increase in
repairs and maintenance expense. These increases were more a result of timing as
the year to date change in these items is not significant. In addition, outside
processing costs increased by $127,000 in connection with the introduction of
new parts. The balance of the decline in gross margin is primarily the result of
lower volume.

         For the first six months, fastener segment revenues increased by less
than 1%. That change includes the pass through of a portion of higher costs for
raw materials. Excluding the material cost recovery, net sales declined by
approximately 3.9% in the current year. Gross margins for the first six months
of 2005 declined $1,084,000 compared to the first half of 2004. Higher material
costs account for $871,000 of this change. Factors affecting material costs
include unrecovered material cost increases of $370,000, increases in outside
processing (related to a change in product mix) of $219,000, and higher material
content, related to a change in product mix, of approximately $282,000. The
remainder of the change in gross margin was primarily a factor of lower unit
volumes.

         Revenues within the assembly equipment segment declined $226,556, or
12.3%, in the second quarter of 2005 compared to the second quarter of 2004, as
demand for our products in this segment continues to show weakness. Gross
margins for this segment declined approximately $115,000, almost entirely due to
the reduction in volumes. For the first six months, revenues in this segment
declined approximately $399,000, or 10.6%, compared to the first six months of
2004. Although we were able to reduce elements of manufacturing costs consistent
with this decline in activity, the decline in volume resulted in a reduction of
first half gross margins of $149,000 when comparing 2005 to 2004.

         Selling and administrative expenses for the second quarter of 2005 were
approximately $23,000 higher than during the second quarter of 2004. Major
factors contributing to this change include increases in professional services
of $95,000 primarily related to compliance with the Sarbanes-Oxley Act of 2002
and legal fees of $34,000 in connection with ongoing litigation and other
matters. These increases were partially offset by a reduction of $78,000 in
profit sharing expense and smaller, net reductions in a variety of other
expenses. On a year to date basis, selling and administrative expenses increased
$176,000 compared to the first six months of 2004. Factors contributing to this
increase include $234,000, primarily related to Sarbanes-Oxley Act of 2002
compliance; $120,000 in legal fees incurred in connection with ongoing
litigation and other matters; and $44,000 in higher salaries and wages. These
higher costs were partially offset by reductions in profit sharing expense of
$141,000; a $57,000 reduction in the Michigan single business tax and lower
depreciation of $30,000.

         This has been a very difficult year. Demand for our products continues
to be weak. Many of our customers are subject to foreign competition and have
responded by turning to foreign sources for product or by outsourcing their
operations to lower cost countries. As a result, the available market for our
products is reduced and competition for available market share increases. Past
efforts to solicit profitable business from both new and existing customers have
not been as successful as we expected. In July, we implemented changes to
strengthen our sales efforts and we believe this will yield positive results in
the future. While raw material costs have begun to recede to a limited extent,
we expect that the market will dictate that these savings be passed on to our
customers. As volumes have fallen, it has become increasingly difficult to make
matching, incremental changes in our operating levels. We will continue to make
adjustments to our staffing levels in response to changing market conditions,
subject to limitations that would affect our ability to adequately meet
customer's service expectations. Costs associated with Sarbanes-Oxley compliance
declined somewhat more than expected during the second quarter as the compliance
deadline was extended, but we still expect to incur significant costs related to
compliance in the third quarter. We also expect legal expenses will continue to
be higher

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<PAGE>
than usual during the coming months. Increasing revenue and controlling
costs continue to be critical to our future success, and we remain focused on
making progress in both of these critical areas.




                              Respectfully yours,


                    John A. Morrissey    John C. Osterman
                      Chairman               President


August 12, 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 AND SIX MONTHS ENDED JUNE 30
<TABLE>
<CAPTION>
                                            SECOND QUARTER                  FIRST SIX MONTHS
                                     -----------------------------    ------------------------------
                                         2005             2004           2005              2004
                                     ------------     ------------    ------------     -------------
<S>                                  <C>              <C>             <C>              <C>
Net sales and lease revenue          $ 10,064,392     $ 10,237,556    $ 20,147,254     $ 20,406,520

Income (loss) before income taxes        (229,487)         588,276        (345,252)       1,031,264

Net income (loss)                        (152,487)         386,276        (229,252)         677,264

Net income (loss) per share                  (.16)             .40            (.24)             .70

Average shares outstanding                966,132          966,132         966,132          966,132
</TABLE>
------------
                     (All figures subject to year-end audit)

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