##### Table of Contents



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 September 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 0-1227
 CHICAGO RIVET & MACHINE CO.
  Illinois
(State or Other Jurisdiction 
of Incorporation or Organization)
    
    36-0904920
(I.R.S. Employer
Identification No.)901 Frontenac Road, Naperville, Illinois
(Address of Principal Executive Offices)
    
    60563
(Zip Code)
 (630) 357-8500
 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




---



##### 



PagePART I. FINANCIAL INFORMATION (Unaudited)Condensed Consolidated Balance Sheets at
September 30, 2010 and December 31, 2009
    
    
    2-3Condensed Consolidated Statements of Operations for the
Three and Nine Months Ended September 30, 2010 and 2009
    
    
    4Condensed Consolidated Statements of Retained Earnings for the
Nine Months Ended September 30, 2010 and 2009
    
    
    5Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 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
  1




---



##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)AssetsCurrent Assets:Cash and cash equivalents
    
    $
    1,248,833
    
    
    $
    569,286Certificates of deposit
    
    
    6,221,000
    
    
    
    6,430,000Accounts receivable, net of allowance
of $156,000 and $155,000, respectively
    
    
    4,679,180
    
    
    
    3,813,663Inventories
    
    
    4,203,826
    
    
    
    3,753,936Deferred income taxes
    
    
    421,191
    
    
    
    429,191Prepaid income taxes
    
    
    35,249
    
    
    
    579,105Other current assets
    
    
    332,471
    
    
    
    245,415Total current assets
    
    
    17,141,750
    
    
    
    15,820,596Property, Plant and Equipment:Land and improvements
    
    
    1,101,709
    
    
    
    1,029,035Buildings and improvements
    
    
    6,402,784
    
    
    
    6,402,784Production equipment and other
    
    
    28,012,249
    
    
    
    28,010,47535,516,742
    
    
    
    35,442,294Less accumulated depreciation
    
    
    28,085,004
    
    
    
    27,635,819Net property, plant and equipment
    
    
    7,431,738
    
    
    
    7,806,475Total assets
    
    $
    24,573,488
    
    
    $
    23,627,071
  2




---



##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)Liabilities and Shareholders EquityCurrent Liabilities:Accounts payable
    
    $
    1,292,944
    
    
    $
    1,022,747Accrued wages and salaries
    
    
    703,120
    
    
    
    370,428Other accrued expenses
    
    
    337,691
    
    
    
    235,261Unearned revenue and customer deposits
    
    
    104,262
    
    
    
    102,246Total current liabilities
    
    
    2,438,017
    
    
    
    1,730,682Deferred income taxes
    
    
    703,275
    
    
    
    734,275Total liabilities
    
    
    3,141,292
    
    
    
    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
    
    
    23,769,064
    
    
    
    23,498,982Treasury stock, 171,964 shares at cost
    
    
    (3,922,098
    )
    
    
    (3,922,098
    )Total shareholders equity
    
    
    21,432,196
    
    
    
    21,162,114Total liabilities and shareholders equity
    
    $
    24,573,488
    
    
    $
    23,627,071
  3




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    6,950,274
    
    
    $
    5,490,147
    
    
    $
    21,650,200
    
    
    $
    14,929,260Cost of goods sold
    
    
    5,672,520
    
    
    
    4,745,979
    
    
    
    17,196,119
    
    
    
    13,376,113Gross profit
    
    
    1,277,754
    
    
    
    744,168
    
    
    
    4,454,081
    
    
    
    1,553,147Selling and administrative expenses
    
    
    1,139,115
    
    
    
    1,134,805
    
    
    
    3,688,651
    
    
    
    3,649,790Operating profit (loss)
    
    
    138,639
    
    
    
    (390,637
    )
    
    
    765,430
    
    
    
    (2,096,643
    )Other income and expenses:Interest income
    
    
    12,754
    
    
    
    16,223
    
    
    
    39,114
    
    
    
    92,029Other income
    
    
    3,600
    
    
    
    3,600
    
    
    
    11,378
    
    
    
    11,482Income (loss) before income taxes
    
    
    154,993
    
    
    
    (370,814
    )
    
    
    815,922
    
    
    
    (1,993,132
    )Provision (benefit) for income taxes
    
    
    49,000
    
    
    
    (124,000
    )
    
    
    256,000
    
    
    
    (683,000
    )Net income (loss)
    
    $
    105,993
    
    
    $
    (246,814
    )
    
    $
    559,922
    
    
    $
    (1,310,132
    )Average common shares outstanding
    
    
    966,132
    
    
    
    966,132
    
    
    
    966,132
    
    
    
    966,132Per share data:Net income (loss) per share
    
    $
    0.11
    
    
    $
    (0.26
    )
    
    $
    0.58
    
    
    $
    (1.36
    )Cash dividends declared per share
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.30
    
    
    $
    0.38
  4




---



##### Table of Contents



2010
    
    
    2009Retained earnings at beginning of period
    
    $
    23,498,982
    
    
    $
    25,245,476Net income (loss) for the nine months ended
    
    
    559,922
    
    
    
    (1,310,132
    )Cash dividends declared in the period;
$.30 per share in 2010 and $.38 per share in 2009
    
    
    (289,840
    )
    
    
    (367,130
    )Retained earnings at end of period
    
    $
    23,769,064
    
    
    $
    23,568,214
  5




---



##### Table of Contents



2010
    
    
    2009Cash flows from operating activities:Net income (loss)
    
    $
    559,922
    
    
    $
    (1,310,132
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation
    
    
    742,105
    
    
    
    758,213Net gain on disposal of equipment
    
    
    (6,500
    )
    
    
    (12,186
    )Deferred income taxes
    
    
    (23,000
    )
    
    
    (67,000
    )Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (865,517
    )
    
    
    (428,192
    )Inventories
    
    
    (449,890
    )
    
    
    1,114,923Other current assets
    
    
    456,800
    
    
    
    (289,269
    )Accounts payable
    
    
    248,151
    
    
    
    491,840Accrued wages and salaries
    
    
    332,692
    
    
    
    177,620Other accrued expenses
    
    
    102,430
    
    
    
    (24,812
    )Unearned revenue and customer deposits
    
    
    2,016
    
    
    
    (311,650
    )Net cash provided by operating activities
    
    
    1,099,209
    
    
    
    99,355Cash flows from investing activities:Capital expenditures
    
    
    (345,322
    )
    
    
    (337,528
    )Proceeds from the sale of equipment
    
    
    6,500
    
    
    
    25,251Proceeds from certificates of deposit
    
    
    6,530,000
    
    
    
    8,091,000Purchases of certificates of deposit
    
    
    (6,321,000
    )
    
    
    (8,689,000
    )Net cash used in investing activities
    
    
    (129,822
    )
    
    
    (910,277
    )Cash flows from financing activities:Cash dividends paid
    
    
    (289,840
    )
    
    
    (367,130
    )Net cash used in financing activities
    
    
    (289,840
    )
    
    
    (367,130
    )Net increase (decrease) in cash and cash equivalents
    
    
    679,547
    
    
    
    (1,178,052
    )Cash and cash equivalents at beginning of period
    
    
    569,286
    
    
    
    1,553,226Cash and cash equivalents at end of period
    
    $
    1,248,833
    
    
    $
    375,174Supplemental schedule of non-cash investing activities:Capital expenditures in accounts payable
    
    $
    22,046
    
    
    $
    
  6




---



##### Table of Contents



September 30, 2010
    
    
    December 31, 2009Raw material
    
    $
    1,524,749
    
    
    $
    1,324,614Work-in-process
    
    
    1,695,595
    
    
    
    1,500,723Finished goods
    
    
    1,542,982
    
    
    
    1,493,0994,763,326
    
    
    
    4,318,436Valuation reserves
    
    
    (559,500
    )
    
    
    (564,500
    )$
    4,203,826
    
    
    $
    3,753,936
 7




---



##### Table of Contents



AssemblyFastener
    
    
    Equipment
    
    
    Other
    
    
    ConsolidatedThree Months Ended September 30, 2010:Net sales
    
    $
    6,073,599
    
    
    $
    876,675
    
    
    $
    
    
    
    $
    6,950,274Depreciation
    
    
    217,364
    
    
    
    15,296
    
    
    
    17,625
    
    
    
    250,285Segment profit
    
    
    347,818
    
    
    
    222,024
    
    
    
    
    
    
    
    569,842Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (427,603
    )
    
    
    (427,603
    )Interest income
    
    
    
    
    
    
    
    
    
    
    12,754
    
    
    
    12,754Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    154,993Capital expenditures
    
    
    38,197
    
    
    
    157,548
    
    
    
    20,623
    
    
    
    216,368Segment assets:Accounts receivable, net
    
    
    4,304,100
    
    
    
    375,080
    
    
    
    
    
    
    
    4,679,180Inventories
    
    
    3,298,483
    
    
    
    905,343
    
    
    
    
    
    
    
    4,203,826Property, plant and equipment, net
    
    
    5,664,830
    
    
    
    1,114,823
    
    
    
    652,085
    
    
    
    7,431,738Other assets
    
    
    
    
    
    
    
    
    
    
    8,258,744
    
    
    
    8,258,74424,573,488Three Months Ended September 30, 2009:Net sales
    
    $
    4,742,053
    
    
    $
    748,094
    
    
    $
    
    
    
    $
    5,490,147Depreciation
    
    
    218,658
    
    
    
    16,508
    
    
    
    19,386
    
    
    
    254,552Segment profit (loss)
    
    
    (69,866
    )
    
    
    154,043
    
    
    
    
    
    
    
    84,177Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (471,214
    )
    
    
    (471,214
    )Interest income
    
    
    
    
    
    
    
    
    
    
    16,223
    
    
    
    16,223Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (370,814
    )Capital expenditures
    
    
    129,492
    
    
    
    
    
    
    
    
    
    
    
    129,492Segment assets:Accounts receivable, net
    
    
    4,036,269
    
    
    
    489,529
    
    
    
    
    
    
    
    4,525,798Inventories
    
    
    4,185,094
    
    
    
    1,389,831
    
    
    
    
    
    
    
    5,574,925Property, plant and equipment, net
    
    
    6,761,755
    
    
    
    1,066,503
    
    
    
    784,867
    
    
    
    8,613,125Other assets
    
    
    
    
    
    
    
    
    
    
    8,277,421
    
    
    
    8,277,42126,991,269
 8




---



##### Table of Contents



AssemblyFastener
    
    
    Equipment
    
    
    Other
    
    
    ConsolidatedNine Months Ended September 30, 2010:Net sales
    
    $
    19,080,342
    
    
    $
    2,569,858
    
    
    $
    
    
    
    $
    21,650,200Depreciation
    
    
    648,866
    
    
    
    43,694
    
    
    
    49,545
    
    
    
    742,105Segment profit
    
    
    1,611,299
    
    
    
    638,220
    
    
    
    
    
    
    
    2,249,519Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (1,472,711
    )
    
    
    (1,472,711
    )Interest income
    
    
    
    
    
    
    
    
    
    
    39,114
    
    
    
    39,114Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    815,922Capital expenditures
    
    
    189,197
    
    
    
    157,548
    
    
    
    20,623
    
    
    
    367,368Nine Months Ended September 30, 2009:Net sales
    
    $
    12,476,654
    
    
    $
    2,452,606
    
    
    $
    
    
    
    $
    14,929,260Depreciation
    
    
    650,631
    
    
    
    49,424
    
    
    
    58,158
    
    
    
    758,213Segment profit (loss)
    
    
    (883,517
    )
    
    
    299,338
    
    
    
    
    
    
    
    (584,179
    )Selling and administrative expenses
    
    
    
    
    
    
    
    
    
    
    (1,500,982
    )
    
    
    (1,500,982
    )Interest income
    
    
    
    
    
    
    
    
    
    
    92,029
    
    
    
    92,029Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,993,132
    )Capital expenditures
    
    
    332,994
    
    
    
    4,534
    
    
    
    
    
    
    
    337,528
 9




---



##### Table of Contents



10




---



##### Table of Contents



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.
 11




---



##### Table of Contents



12




---



##### Table of Contents



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.
 13




---



##### Table of Contents



CHICAGO RIVET & MACHINE CO.
(Registrant)Date: November 5, 2010
    /s/ John A. MorrisseyJohn A. MorrisseyChairman of the Board of Directors
and Chief Executive Officer
(Principal Executive Officer) Date:  November 5, 2010
    /s/ Michael J. BourgMichael J. BourgPresident, Chief Operating
Officer and Treasurer
(Principal Financial Officer) 
 14




---



##### Table of Contents



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