<PAGE>   1
E X H I B I T  1 9 . 1

To Our Shareholders:

     The comparative results of operations of Chicago Rivet &  Machine Co. for
the second quarter and first six months of  1998 and 1997 are summarized below.

     While sales are not as strong as those enjoyed in 1997, on an overall
basis, 1998 continues to be a modestly successful year.  At first glance,
comparisons of  1998  with 1997 seem unfavorable.  However, such comparisons
must be viewed in the context of certain,  unusual and  favorable factors
reflected in 1997 results; specifically,  adjustments related to cost of sales
estimates and a one time gain from the sale of surplus equipment.  These
adjustments, which were previously reported, increased net income by $.17 per
share (after giving effect to a two for one stock split)  during the second
quarter last year.  Therefore, on an adjusted basis,  results for the first six
months of 1998 are approximately equal to those posted in 1997.  After factoring
in the adjustments discussed above,  second quarter results this year trailed
the year earlier period by approximately 8%.

     Most of this decline is attributable to a combination of lower sales
revenues and a slightly less favorable product mix.   Sales revenues declined
approximately 4.1% compared to the year earlier period,  partly due to weaker
demand, in general,  and the effects of the work stoppage currently affecting
General Motors.  The effects of that strike began to be felt late in the second
quarter as General Motors reduced its operations.  During the second quarter of
this year, lost revenue attributable directly, or indirectly,  to the strike
amounted to approximately $300,000.   Although General Motors alone accounts for
considerably less than 10% of Company sales revenues,  our market is highly
dependent upon the automobile  industry,  and many of our customers also supply
General Motors.  While it is not possible to know exactly what percentage of our
business is indirectly related to General Motors, nor is it possible to
determine how long production will be disrupted at General Motors, it is likely
that our sales will be measurably affected by these events.  Accordingly,  we
have taken steps to limit the bottom line impact associated with current market
conditions.  During July,  we scheduled 




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<PAGE>   2



our normal vacation shutdowns and where necessary, we have reduced hours of
operation in response to the temporary reduction in demand. 

     We are pleased to report that an additional facility has been formally
certified to QS-9000 quality standards and that our only remaining,
non-certified fastener facility has been recommended for certification.  We are
pleased to attain independent verification that our quality systems meet
world-class standards,  and this recognition is expected to be helpful in our
ongoing efforts to increase our position in a very competitive market. Progress
toward implementation of new, enterprise wide  management information systems
continues,  and we remain confident that implementation will be sufficiently
completed in time to avoid any major problems associated with the so-called
"millennium bug." 

     Overall, our outlook for the balance of the year remains positive, although
we will be adversely affected by the labor situation at General Motors, the
duration of which remains an unknown.  Economic conditions appear likely to
remain relatively favorable and our business remains fundamentally sound and our
financial condition remains very strong.

                              Respectfully yours,




            John A. Morrissey                       John C. Osterman

            Chairman                                       President

July 28, 1998



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, fluctuations in general
economic conditions, consumer demand, the gain or loss of a key customer, the
price and availability of  the Company's primary raw materials. Therefore,
readers are cautioned not to place undue reliance upon such forward-looking
statements.



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<PAGE>   3



                          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
                                        --------------------           ------------------------
                                        1998            1997           1998                1997
                                       -----           -----          -----               -----
<S>                                <C>            <C>              <C>               <C>
Net sales and lease revenue         $10,822,531     $11,564,802     $22,495,480       $23,463,447
Income before taxes                   1,302,924       1,711,424       2,727,744         2,877,407
Income after  taxes                     783,924       1,070,424       1,698,744         1,802,407
Net income per share                       0.68            0.91            1.46              1.54
Average shares outstanding            1,159,793       1,171,444       1,164,421         1,171,470
     ---------------------------------------------------------------------------------------------
</TABLE>
                    (All figures subject to year end audit)





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