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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 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 
of Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)901 Frontenac Road, Naperville, Illinois
    
    60563(Address of Principal Executive Offices)
    
    (Zip Code)
  þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ o þ




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PagePART I. FINANCIAL INFORMATION (Unaudited)Condensed Consolidated Balance Sheets at March 31, 2010 and December 31, 2009
    
    
    2-3Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and 2009
    
    
    4Condensed Consolidated Statements of Retained Earnings for the Three Months Ended March 31, 2010 and 2009
    
    
    5Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009
    
    
    6Notes to the Condensed Consolidated Financial Statements
    
    
    7-8Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9-10Controls and Procedures
    
    
    11PART II. OTHER INFORMATION
    
    
    12-18EX-31.1EX-31.2EX-32.1EX-32.2
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March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)AssetsCurrent Assets:Cash and cash equivalents
    
    $
    543,350
    
    
    $
    569,286Certificates of deposit
    
    
    6,180,000
    
    
    
    6,430,000Accounts receivable, net of allowance
of $155,000 each
    
    
    4,234,415
    
    
    
    3,813,663Inventories
    
    
    4,368,819
    
    
    
    3,753,936Deferred income taxes
    
    
    434,191
    
    
    
    429,191Prepaid income taxes
    
    
    519,561
    
    
    
    579,105Other current assets
    
    
    298,761
    
    
    
    245,415Total current assets
    
    
    16,579,097
    
    
    
    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
    
    
    28,048,131
    
    
    
    28,010,47535,479,950
    
    
    
    35,442,294Less accumulated depreciation
    
    
    27,881,549
    
    
    
    27,635,819Net property, plant and equipment
    
    
    7,598,401
    
    
    
    7,806,475Total assets
    
    $
    24,177,498
    
    
    $
    23,627,071
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March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)Liabilities and Shareholders EquityCurrent Liabilities:Accounts payable
    
    $
    1,376,769
    
    
    $
    1,022,747Accrued wages and salaries
    
    
    646,864
    
    
    
    370,428Other accrued expenses
    
    
    217,517
    
    
    
    235,261Unearned revenue and customer deposits
    
    
    142,703
    
    
    
    102,246Total current liabilities
    
    
    2,383,853
    
    
    
    1,730,682Deferred income taxes
    
    
    694,275
    
    
    
    734,275Total liabilities
    
    
    3,078,128
    
    
    
    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
    
    
    23,436,238
    
    
    
    23,498,982Treasury stock, 171,964 shares at cost
    
    
    (3,922,098
    )
    
    
    (3,922,098
    )Total shareholders equity
    
    
    21,099,370
    
    
    
    21,162,114Total liabilities and shareholders equity
    
    $
    24,177,498
    
    
    $
    23,627,071
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2010
    
    
    2009Net sales
    
    $
    6,761,393
    
    
    $
    4,759,290Cost of goods sold
    
    
    5,495,530
    
    
    
    4,486,679Gross profit
    
    
    1,265,863
    
    
    
    272,611Selling and administrative expenses
    
    
    1,233,835
    
    
    
    1,280,076Operating profit (loss)
    
    
    32,028
    
    
    
    (1,007,465
    )Other income and expenses:Interest income
    
    
    13,241
    
    
    
    50,004Other income
    
    
    3,600
    
    
    
    3,600Income (loss) before income taxes
    
    
    48,869
    
    
    
    (953,861
    )Provision for income taxes
    
    
    15,000
    
    
    
    (330,000
    )Net income (loss)
    
    $
    33,869
    
    
    $
    (623,861
    )Average common shares outstanding
    
    
    966,132
    
    
    
    966,132Per share data:Net income (loss) per share
    
    $
    0.04
    
    
    $
    (0.65
    )Cash dividends declared per share
    
    $
    0.10
    
    
    $
    0.18
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2010
    
    
    2009Retained earnings at beginning of period
    
    $
    23,498,982
    
    
    $
    25,245,476Net income (loss)
    
    
    33,869
    
    
    
    (623,861
    )Cash dividends declared in the period;
$.10 per share in 2010 and $.18 per share in 2009
    
    
    (96,613
    )
    
    
    (173,903
    )Retained earnings at end of period
    
    $
    23,436,238
    
    
    $
    24,447,712
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2010
    
    
    2009Cash flows from operating activities:Net income (loss)
    
    $
    33,869
    
    
    $
    (623,861
    )Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:Depreciation
    
    
    245,730
    
    
    
    250,147Deferred income taxes
    
    
    (45,000
    )
    
    
    (41,000
    )Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (420,752
    )
    
    
    271,075Inventories
    
    
    (614,883
    )
    
    
    568,712Other current assets
    
    
    6,198
    
    
    
    (190,846
    )Accounts payable
    
    
    354,022
    
    
    
    323,680Accrued wages and salaries
    
    
    276,436
    
    
    
    215,835Other accrued expenses
    
    
    (17,744
    )
    
    
    (140,291
    )Unearned revenue and customer deposits
    
    
    40,457
    
    
    
    (312,138
    )Net cash (used in) provided by operating activities
    
    
    (141,667
    )
    
    
    321,313Cash flows from investing activities:Capital expenditures
    
    
    (37,656
    )
    
    
    (64,777
    )Proceeds from certificates of deposit
    
    
    2,450,000
    
    
    
    1,599,000Purchases of certificates of deposit
    
    
    (2,200,000
    )
    
    
    (2,594,000
    )Net cash provided by (used in) investing activities
    
    
    212,344
    
    
    
    (1,059,777
    )Cash flows from financing activities:Cash dividends paid
    
    
    (96,613
    )
    
    
    (173,903
    )Net cash used in financing activities
    
    
    (96,613
    )
    
    
    (173,903
    )Net decrease in cash and cash equivalents
    
    
    (25,936
    )
    
    
    (912,367
    )Cash and cash equivalents at beginning of period
    
    
    569,286
    
    
    
    1,553,226Cash and cash equivalents at end of period
    
    $
    543,350
    
    
    $
    640,859Supplemental schedule of non-cash investing activities:Capital expenditures in accounts payable
    
    $
    
    
    
    $
    5,315
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March 31, 2010
    
    
    December 31, 2009Raw material
    
    $
    1,475,514
    
    
    $
    1,324,614Work-in-process
    
    
    1,705,915
    
    
    
    1,500,723Finished goods
    
    
    1,756,890
    
    
    
    1,493,0994,938,319
    
    
    
    4,318,436Valuation reserves
    
    
    (569,500
    )
    
    
    (564,500
    )$
    4,368,819
    
    
    $
    3,753,936
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AssemblyFastener
    
    
    Equipment
    
    
    Other
    
    
    ConsolidatedThree Months Ended March 31, 2010:Net sales
    
    $
    6,039,861
    
    
    $
    721,532
    
    
    
    
    
    
    $
    6,761,393Depreciation
    
    
    215,571
    
    
    
    14,199
    
    
    
    15,960
    
    
    
    245,730Segment profit
    
    
    416,620
    
    
    
    121,442
    
    
    
    
    
    
    
    538,062Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (502,434
    )
    
    
    (502,434
    )Interest income
    
    
    
    
    
    
    
    
    
    
    13,241
    
    
    
    13,241Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,869Capital expenditures
    
    
    37,656
    
    
    
    
    
    
    
    
    
    
    
    37,656Segment assets:Accounts receivable, net
    
    
    3,815,927
    
    
    
    418,488
    
    
    
    
    
    
    
    4,234,415Inventories
    
    
    3,331,706
    
    
    
    1,037,113
    
    
    
    
    
    
    
    4,368,819Property, plant and equipment, net
    
    
    5,946,584
    
    
    
    986,770
    
    
    
    665,047
    
    
    
    7,598,401Other assets
    
    
    
    
    
    
    
    
    
    
    7,975,863
    
    
    
    7,975,86324,177,498Three Months Ended March 31, 2009:Net sales
    
    $
    3,629,430
    
    
    $
    1,129,860
    
    
    
    
    
    
    $
    4,759,290Depreciation
    
    
    214,303
    
    
    
    16,458
    
    
    
    19,386
    
    
    
    250,147Segment profit (loss)
    
    
    (617,979
    )
    
    
    145,179
    
    
    
    
    
    
    
    (472,800
    )Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (531,065
    )
    
    
    (531,065
    )Interest income
    
    
    
    
    
    
    
    
    
    
    50,004
    
    
    
    50,004Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (953,861
    )Capital expenditures
    
    
    70,092
    
    
    
    
    
    
    
    
    
    
    
    70,092Segment assets:Accounts receivable, net
    
    
    2,810,747
    
    
    
    233,926
    
    
    
    
    
    
    
    3,044,673Inventories
    
    
    3,271,621
    
    
    
    1,208,299
    
    
    
    
    
    
    
    4,479,920Property, plant and equipment, net
    
    
    6,429,946
    
    
    
    1,045,964
    
    
    
    744,008
    
    
    
    8,219,918Other assets
    
    
    
    
    
    
    
    
    
    
    8,922,096
    
    
    
    8,922,09624,666,607
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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
       9




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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 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.
 10




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Item 4.
    
    Controls and Procedures.
   11




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Item 4.
    
    Exhibits
 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.
 12




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CHICAGO RIVET & MACHINE CO. 
(Registrant)Date:  May 7, 2010
    /s/ John A. MorrisseyJohn A. MorrisseyChairman of the Board of Directors
and Chief Executive Officer
(Principal Executive Officer)Date:  May 7, 2010
    /s/ Michael J. BourgMichael J. BourgPresident, Chief Operating
Officer and Treasurer
(Principal Financial Officer) 13




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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
    
    
    1531.2
    
    Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    
    1632
    
    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
    
    
    1732.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    18
 14