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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2010
 OR
 o
    
    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 000-01227
 CHICAGO RIVET & MACHINE CO.
  Illinois
    
    36-0904920(State or Other Jurisdiction
    
    (I.R.S. Employerof Incorporation or Organization)
    
    Identification No.)901 Frontenac Road, Naperville, Illinois
    
    60563(Address of Principal Executive Offices)
    
    (Zip Code)
 (630) 357-8500
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



PagePART I. FINANCIAL INFORMATION (Unaudited)Condensed Consolidated Balance Sheets at
June 30, 2010 and December 31, 2009
    
    
    2-3Condensed Consolidated Statements of Operations for the
Three and Six Months Ended June 30, 2010 and 2009
    
    
    4Condensed Consolidated Statements of Retained Earnings for the
Six Months Ended June 30, 2010 and 2009
    
    
    5Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2010 and 2009
    
    
    6Notes to the Condensed Consolidated Financial Statements
    
    
    7-9Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    10-11Controls and Procedures
    
    
    12PART II. OTHER INFORMATION
    
    
    13-19EX-31.1EX-31.2EX-32.1EX-32.2
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June 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)AssetsCurrent Assets:Cash and cash equivalents
    
    $
    779,163
    
    
    $
    569,286Certificates of deposit
    
    
    6,226,000
    
    
    
    6,430,000Accounts receivable, net of allowance
of $161,000 and $155,000, respectively
    
    
    4,756,644
    
    
    
    3,813,663Inventories
    
    
    4,062,543
    
    
    
    3,753,936Deferred income taxes
    
    
    432,191
    
    
    
    429,191Prepaid income taxes
    
    
    540,673
    
    
    
    579,105Other current assets
    
    
    227,999
    
    
    
    245,415Total current assets
    
    
    17,025,213
    
    
    
    15,820,596Property, Plant and Equipment:Land and improvements
    
    
    1,029,035
    
    
    
    1,029,035Buildings and improvements
    
    
    6,402,784
    
    
    
    6,402,784Production equipment and other
    
    
    27,985,136
    
    
    
    28,010,47535,416,955
    
    
    
    35,442,294Less accumulated depreciation
    
    
    27,951,300
    
    
    
    27,635,819Net property, plant and equipment
    
    
    7,465,655
    
    
    
    7,806,475Total assets
    
    $
    24,490,868
    
    
    $
    23,627,071
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June 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)Liabilities and Shareholders EquityCurrent Liabilities:Accounts payable
    
    $
    1,186,414
    
    
    $
    1,022,747Accrued wages and salaries
    
    
    781,513
    
    
    
    370,428Other accrued expenses
    
    
    276,461
    
    
    
    235,261Unearned revenue and customer deposits
    
    
    132,389
    
    
    
    102,246Total current liabilities
    
    
    2,376,777
    
    
    
    1,730,682Deferred income taxes
    
    
    691,275
    
    
    
    734,275Total liabilities
    
    
    3,068,052
    
    
    
    2,464,957Commitments 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
    
    
    
    1,138,096Additional paid-in capital
    
    
    447,134
    
    
    
    447,134Retained earnings
    
    
    23,759,684
    
    
    
    23,498,982Treasury stock, 171,964 shares at cost
    
    
    (3,922,098
    )
    
    
    (3,922,098
    )Total shareholders equity
    
    
    21,422,816
    
    
    
    21,162,114Total liabilities and shareholders equity
    
    $
    24,490,868
    
    
    $
    23,627,071
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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    7,938,533
    
    
    $
    4,679,823
    
    
    $
    14,699,926
    
    
    $
    9,439,113Cost of goods sold
    
    
    6,028,069
    
    
    
    4,143,455
    
    
    
    11,523,599
    
    
    
    8,630,134Gross profit
    
    
    1,910,464
    
    
    
    536,368
    
    
    
    3,176,327
    
    
    
    808,979Selling and administrative expenses
    
    
    1,315,701
    
    
    
    1,234,910
    
    
    
    2,549,536
    
    
    
    2,514,985Operating profit (loss)
    
    
    594,763
    
    
    
    (698,542
    )
    
    
    626,791
    
    
    
    (1,706,006
    )Other income and expenses:Interest income
    
    
    13,119
    
    
    
    25,802
    
    
    
    26,360
    
    
    
    75,806Other income
    
    
    4,178
    
    
    
    4,282
    
    
    
    7,778
    
    
    
    7,882Income (loss) before income taxes
    
    
    612,060
    
    
    
    (668,458
    )
    
    
    660,929
    
    
    
    (1,622,318
    )Provision (benefit) for income taxes
    
    
    192,000
    
    
    
    (229,000
    )
    
    
    207,000
    
    
    
    (559,000
    )Net income (loss)
    
    $
    420,060
    
    
    $
    (439,458
    )
    
    $
    453,929
    
    
    $
    (1,063,318
    )Average common shares outstanding
    
    
    966,132
    
    
    
    966,132
    
    
    
    966,132
    
    
    
    966,132Per share data:Net income (loss) per share
    
    $
    0.43
    
    
    $
    (0.45
    )
    
    $
    0.47
    
    
    $
    (1.10
    )Cash dividends declared per share
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.20
    
    
    $
    0.28
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2010
    
    
    2009Retained earnings at beginning of period
    
    $
    23,498,982
    
    
    $
    25,245,476Net income (loss) for the six months ended
    
    
    453,929
    
    
    
    (1,063,318
    )Cash dividends declared in the period;
$.20 per share in 2010 and $.28 per share
in 2009
    
    
    (193,227
    )
    
    
    (270,516
    )Retained earnings at end of period
    
    $
    23,759,684
    
    
    $
    23,911,642
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2010
    
    
    2009Cash flows from operating activities:Net income (loss)
    
    $
    453,929
    
    
    $
    (1,063,318
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation
    
    
    491,820
    
    
    
    503,661Net gain on disposal of equipment
    
    
    (6,500
    )
    
    
    (1,089
    )Deferred income taxes
    
    
    (46,000
    )
    
    
    (23,000
    )Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (942,981
    )
    
    
    399,100Inventories
    
    
    (308,607
    )
    
    
    961,736Other current assets
    
    
    55,848
    
    
    
    (454,012
    )Accounts payable
    
    
    163,667
    
    
    
    252,942Accrued wages and salaries
    
    
    411,085
    
    
    
    107,049Other accrued expenses
    
    
    41,200
    
    
    
    29,980Unearned revenue and customer deposits
    
    
    30,143
    
    
    
    (322,545
    )Net cash provided by operating activities
    
    
    343,604
    
    
    
    390,504Cash flows from investing activities:Capital expenditures
    
    
    (151,000
    )
    
    
    (117,464
    )Proceeds from the sale of equipment
    
    
    6,500
    
    
    
    9,676Proceeds from certificates of deposit
    
    
    4,700,000
    
    
    
    5,597,000Purchases of certificates of deposit
    
    
    (4,496,000
    )
    
    
    (6,339,000
    )Net cash provided by (used in) investing activities
    
    
    59,500
    
    
    
    (849,788
    )Cash flows from financing activities:Cash dividends paid
    
    
    (193,227
    )
    
    
    (270,516
    )Net cash used in financing activities
    
    
    (193,227
    )
    
    
    (270,516
    )Net increase (decrease) in cash and cash equivalents
    
    
    209,877
    
    
    
    (729,800
    )Cash and cash equivalents at beginning of period
    
    
    569,286
    
    
    
    1,553,226Cash and cash equivalents at end of period
    
    $
    779,163
    
    
    $
    823,426
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June 30, 2010
    
    
    December 31, 2009Raw material
    
    $
    1,407,147
    
    
    $
    1,324,614Work-in-process
    
    
    1,644,612
    
    
    
    1,500,723Finished goods
    
    
    1,610,484
    
    
    
    1,493,0994,662,243
    
    
    
    4,318,436Valuation reserves
    
    
    (599,700
    )
    
    
    (564,500
    )$
    4,062,543
    
    
    $
    3,753,936
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AssemblyFastener
    
    
    Equipment
    
    
    Other
    
    
    ConsolidatedThree Months Ended June 30, 2010:Net sales
    
    $
    6,966,882
    
    
    $
    971,651
    
    
    
    
    
    
    $
    7,938,533Depreciation
    
    
    215,931
    
    
    
    14,199
    
    
    
    15,960
    
    
    
    246,090Segment profit
    
    
    846,861
    
    
    
    294,754
    
    
    
    
    
    
    
    1,141,615Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (542,674
    )
    
    
    (542,674
    )Interest income
    
    
    
    
    
    
    
    
    
    
    13,119
    
    
    
    13,119Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    612,060Capital expenditures
    
    
    113,344
    
    
    
    
    
    
    
    
    
    
    
    113,344Segment assets:Accounts receivable, net
    
    
    4,340,252
    
    
    
    416,392
    
    
    
    
    
    
    
    4,756,644Inventories
    
    
    3,053,643
    
    
    
    1,008,900
    
    
    
    
    
    
    
    4,062,543Property, plant and equipment, net
    
    
    5,823,374
    
    
    
    972,571
    
    
    
    669,710
    
    
    
    7,465,655Other assets
    
    
    
    
    
    
    
    
    
    
    8,206,026
    
    
    
    8,206,02624,490,868Three Months Ended June 30, 2009:Net sales
    
    $
    4,105,171
    
    
    $
    574,652
    
    
    
    
    
    
    $
    4,679,823Depreciation
    
    
    217,670
    
    
    
    16,458
    
    
    
    19,386
    
    
    
    253,514Segment profit (loss)
    
    
    (195,673
    )
    
    
    116
    
    
    
    
    
    
    
    (195,557
    )Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (498,703
    )
    
    
    (498,703
    )Interest income
    
    
    
    
    
    
    
    
    
    
    25,802
    
    
    
    25,802Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (668,458
    )Capital expenditures
    
    
    47,372
    
    
    
    
    
    
    
    
    
    
    
    47,372Segment assets:Accounts receivable, net
    
    
    2,652,912
    
    
    
    263,736
    
    
    
    
    
    
    
    2,916,648Inventories
    
    
    2,954,378
    
    
    
    1,132,518
    
    
    
    
    
    
    
    4,086,896Property, plant and equipment, net
    
    
    6,259,648
    
    
    
    1,029,506
    
    
    
    716,035
    
    
    
    8,005,189Other assets
    
    
    
    
    
    
    
    
    
    
    9,064,829
    
    
    
    9,064,82924,073,562
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AssemblyFastener
    
    
    Equipment
    
    
    Other
    
    
    ConsolidatedSix Months Ended June 30, 2010:Net sales
    
    $
    13,006,743
    
    
    $
    1,693,183
    
    
    
    
    
    
    $
    14,699,926Depreciation
    
    
    431,502
    
    
    
    28,398
    
    
    
    31,920
    
    
    
    491,820Segment profit
    
    
    1,263,481
    
    
    
    416,196
    
    
    
    
    
    
    
    1,679,677Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (1,045,108
    )
    
    
    (1,045,108
    )Interest income
    
    
    
    
    
    
    
    
    
    
    26,360
    
    
    
    26,360Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    660,929Capital expenditures
    
    
    151,000
    
    
    
    
    
    
    
    
    
    
    
    151,000Six Months Ended June 30, 2009:Net sales
    
    $
    7,734,601
    
    
    $
    1,704,512
    
    
    
    
    
    
    $
    9,439,113Depreciation
    
    
    431,973
    
    
    
    32,916
    
    
    
    38,772
    
    
    
    503,661Segment profit (loss)
    
    
    (813,651
    )
    
    
    145,295
    
    
    
    
    
    
    
    (668,356
    )Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (1,029,768
    )
    
    
    (1,029,768
    )Interest income
    
    
    
    
    
    
    
    
    
    
    75,806
    
    
    
    75,806Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,622,318
    )Capital expenditures
    
    
    117,464
    
    
    
    
    
    
    
    
    
    
    
    117,464
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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, those disclosed under Risk Factors in
our Annual Report on Form 10-K and in the other filings we make with the United States Securities
and Exchange Commission. These factors, include among other things: conditions in the domestic
automotive industry, upon which we rely for sales revenue, the intense competition in our markets,
the concentration of our sales to two major customers, the price and availability of raw materials,
labor relations issues, losses related to product liability, warranty and recall claims, costs
relating to environmental laws and regulations, the loss of the services of our key employees and
difficulties in achieving expected cost savings. 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.
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31
    
    
    Rule 13a-14(a) or 15d-14(a) Certifications31.1
    
    
    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 Certifications32.1
    
    
    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.
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CHICAGO RIVET & MACHINE CO.(Registrant)  /s/ John A. MorrisseyJohn A. MorrisseyChairman of the Board of Directors
and Chief Executive Officer
(Principal Executive Officer)  /s/ Michael J. BourgMichael J. BourgPresident, Chief Operating
Officer and Treasurer
(Principal Financial Officer) 14




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ExhibitNumber
    
    
    
    Page31
    
    Rule 13a-14(a) or 15d-14(a) Certifications31.1
    
    Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    
    1631.2
    
    Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    
    1732
    
    Section 1350 Certifications32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    1832.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    19
 15