-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QjUZskW1d1AGpP8DoPUjCGBNowYe2maynO1W4WJ2XB2rVAc8XZVR0ZrRkoMHkT3i 65deqgpB4OymbUZFsr6/Bw== 0000950137-03-005732.txt : 20031107 0000950137-03-005732.hdr.sgml : 20031107 20031107171004 ACCESSION NUMBER: 0000950137-03-005732 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHICAGO RIVET & MACHINE CO CENTRAL INDEX KEY: 0000019871 STANDARD INDUSTRIAL CLASSIFICATION: METALWORKING MACHINERY & EQUIPMENT [3540] IRS NUMBER: 360904920 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01227 FILM NUMBER: 03985997 BUSINESS ADDRESS: STREET 1: 901 FRONTENAC RD STREET 2: P O BOX 3061 CITY: NAPERVILLE STATE: IL ZIP: 60566 BUSINESS PHONE: 6303578500 MAIL ADDRESS: STREET 1: 901 FRONTENAC RD STREET 2: P O BOX 3061 CITY: NAPERVILLE STATE: IL ZIP: 60566 10-Q 1 c80771e10vq.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ----------- FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 OR [ ] 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. (Exact Name of Registrant as Specified in Its Charter) Illinois 36-0904920 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 901 Frontenac Road, Naperville, Illinois 60563 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (630) 357-8500 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No ----- ----- As of September 30, 2003, 966,132 shares of the registrant's common stock were outstanding. CHICAGO RIVET & MACHINE CO. INDEX
PART I. FINANCIAL INFORMATION Page Consolidated Balance Sheets at September 30, 2003 and December 31, 2002 2-3 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2003 and 2002 4 Consolidated Statements of Retained Earnings for the Nine Months Ended September 30, 2003 and 2002 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2002 6 Notes to the Consolidated Financial Statements 7-9 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Quantitative and Qualitative Information About Market Risk 11 Controls and Procedures 11 PART II. OTHER INFORMATION 12-20
1 CHICAGO RIVET & MACHINE CO. Consolidated Balance Sheets September 30, 2003 and December 31, 2002
September 30, December 31, 2003 2002 ----------- ----------- (Unaudited) Assets Current Assets: Cash and cash equivalents $ 4,977,002 $ 2,204,430 Certificates of deposit 455,000 3,157,733 Accounts receivable - net of allowances 5,335,394 4,994,697 Inventories: Raw materials 1,181,330 1,636,216 Work in process 1,807,370 1,818,106 Finished goods 2,460,928 2,635,619 ----------- ----------- Total inventories 5,449,628 6,089,941 ----------- ----------- Deferred income taxes 564,191 581,191 Other current assets 278,223 277,983 ----------- ----------- Total current assets 17,059,438 17,305,975 ----------- ----------- Property, Plant and Equipment: Land and improvements 1,015,635 1,010,595 Buildings and improvements 5,763,570 5,743,325 Production equipment, leased machines and other 28,036,758 27,774,278 ----------- ----------- 34,815,963 34,528,198 Less accumulated depreciation 22,994,726 21,746,000 ----------- ----------- Net property, plant and equipment 11,821,237 12,782,198 ----------- ----------- Total assets $28,880,675 $30,088,173 =========== ===========
See Notes to the Consolidated Financial Statements 2 CHICAGO RIVET & MACHINE CO. Consolidated Balance Sheets September 30, 2003 and December 31, 2002
September 30, December 31, 2003 2002 ------------ ------------ (Unaudited) Liabilities and Shareholders' Equity Current Liabilities: Note payable $ 282,760 $ 1,632,760 Accounts payable 1,433,759 1,121,195 Accrued wages and salaries 1,087,964 795,920 Contributions due profit sharing plan 214,986 435,542 Other accrued expenses 315,778 446,376 ------------ ------------ Total current liabilities 3,335,247 4,431,793 Deferred income taxes 1,507,275 1,547,275 ------------ ------------ Total liabilities 4,842,522 5,979,068 ------------ ------------ Commitments 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 1,138,096 Additional paid-in capital 447,134 447,134 Retained earnings 26,375,021 26,445,973 Treasury stock, at cost, 171,964 shares (3,922,098) (3,922,098) ------------ ------------ Total shareholders' equity 24,038,153 24,109,105 ------------ ------------ Total liabilities and shareholders' equity $ 28,880,675 $ 30,088,173 ============ ============
See Notes to the Consolidated Financial Statements 3 CHICAGO RIVET & MACHINE CO. Consolidated Statements of Operations For the Three and Nine Months Ended September 30, 2003 and 2002 (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------ ------------------------------ 2003 2002 2003 2002 ------------ ------------ ------------ ------------ Net sales $ 8,793,772 $ 9,784,409 $ 28,950,027 $ 32,570,837 Lease revenue 37,970 47,603 124,122 151,357 ------------ ------------ ------------ ------------ 8,831,742 9,832,012 29,074,149 32,722,194 Cost of goods sold and costs related to lease revenue 7,292,570 7,551,109 23,219,815 24,749,263 ------------ ------------ ------------ ------------ Gross profit 1,539,172 2,280,903 5,854,334 7,972,931 Selling and administrative expenses 1,558,777 1,622,289 4,868,378 5,037,376 ------------ ------------ ------------ ------------ (19,605) 658,614 985,956 2,935,555 Other income and expenses: Interest income 18,052 22,116 56,917 63,880 Interest expense (4,318) (18,953) (20,555) (64,728) Gain from disposal of equipment 10,635 954 16,134 30,137 Other income, net of other expense 3,667 (3,716) 11,841 11,876 ------------ ------------ ------------ ------------ Income before income taxes 8,431 659,015 1,050,293 2,976,720 Provision for income taxes 3,000 224,000 358,000 1,014,000 ------------ ------------ ------------ ------------ Net income $ 5,431 $ 435,015 $ 692,293 $ 1,962,720 ============ ============ ============ ============ Average common shares outstanding 966,132 966,132 966,132 966,674 ============ ============ ============ ============ Per share data: Net income per share $ 0.01 $ 0.45 $ 0.72 $ 2.03 ============ ============ ============ ============ Cash dividends declared per share $ 0.18 $ 0.18 $ 0.79 $ 0.69 ============ ============ ============ ============
See Notes to the Consolidated Financial Statements 4 CHICAGO RIVET & MACHINE CO. Consolidated Statements of Retained Earnings For the Nine Months Ended September 30, 2003 and 2002 (Unaudited)
2003 2002 ------------ ------------ Retained earnings at beginning of period $ 26,445,973 $ 24,682,816 Net income for the nine months ended 692,293 1,962,720 Cash dividends declared in the period, $.79 and $.69 per share in 2003 and 2002, respectively (763,245) (667,015) ------------ ------------ Retained earnings at end of period $ 26,375,021 $ 25,978,521 ============ ============
See Notes to the Consolidated Financial Statements 5 CHICAGO RIVET & MACHINE CO. Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2003 and 2002 (Unaudited)
2003 2002 ----------- ----------- Cash flows from operating activities: Net income $ 692,293 $ 1,962,720 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,388,491 1,431,829 Net gain on the sale of properties (16,134) (30,137) Deferred income taxes (23,000) 82,000 Changes in operating assets and liabilities: Accounts receivable, net (340,697) (1,916,883) Inventories 640,313 201,183 Other current assets (240) (33,534) Accounts payable 312,564 587,400 Accrued expenses (59,110) 581,756 ----------- ----------- Net cash provided by operating activities 2,594,480 2,866,334 ----------- ----------- Cash flows from investing activities: Capital expenditures (435,540) (863,613) Proceeds from the sale of properties 24,144 36,024 Proceeds from held-to-maturity securities 3,157,733 727,882 Purchases of held-to-maturity securities (455,000) (3,507,733) ----------- ----------- Net cash provided by (used in) investing activities 2,291,337 (3,607,440) ----------- ----------- Cash flows from financing activities: Payments under term loan agreement (1,350,000) (1,350,000) Purchase of treasury stock -- (26,976) Cash dividends paid (763,245) (667,015) ----------- ----------- Net cash used in financing activities (2,113,245) (2,043,991) ----------- ----------- Net increase (decrease) in cash and cash equivalents 2,772,572 (2,785,097) Cash and cash equivalents at beginning of period 2,204,430 4,692,999 ----------- ----------- Cash and cash equivalents at end of period $ 4,977,002 $ 1,907,902 =========== ===========
See Notes to the Consolidated Financial Statements 6 CHICAGO RIVET & MACHINE CO. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 2003 and December 31,2002 and the results of operations and changes in cash flows for the indicated periods. The Company uses estimated gross profit rates to determine the cost of goods sold during interim periods on a portion of its operations. Actual results could differ from those estimates and will be adjusted, as necessary, following the Company's annual physical inventory in the fourth quarter. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. The results of operations for the three and nine-month period ending September 30, 2003 are not necessarily indicative of the results to be expected for the year. 3. The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily in the automotive industry. The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States. 4. The Company is, from time to time, involved in litigation in the normal course of business. While it is not possible at this time to establish the ultimate amount of liability with respect to contingent liabilities, including those related to legal proceedings, management is of the opinion that the aggregate amount of any such liabilities, for which provision has not been made, will not have a material adverse effect on the Company's financial position. 7 CHICAGO RIVET & MACHINE CO. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 5. Segment Information--The Company operates in two business segments as determined by its products. The fastener segment includes rivets, cold-formed fasteners and screw machine products. The assembly equipment segment includes automatic rivet setting machines, parts and tools for such machines and the leasing of automatic rivet setting machines. Information by segment is as follows:
Assembly Fastener Equipment Other Consolidated ------------ ------------ ------------ ------------- Three Months Ended September 30, 2003: Net sales and lease revenue $ 7,130,290 $ 1,701,452 $ -- $ 8,831,742 Depreciation 370,131 39,807 52,521 462,459 Segment profit 342,670 305,913 -- 648,583 Selling and administrative expenses 653,886 653,886 Interest expense 4,318 4,318 Interest income (18,052) (18,052) ------------ Income before income taxes 8,431 ------------ Capital expenditures 271,717 4,117 12,545 288,379 Segment assets: Accounts receivable, net 4,291,184 1,044,210 -- 5,335,394 Inventory 3,291,706 2,157,922 -- 5,449,628 Property, plant and equipment, net 9,346,714 1,421,108 1,053,415 11,821,237 Other assets -- -- 6,274,416 6,274,416 ------------ 28,880,675 ------------ Three Months Ended September 30, 2002: Net sales and lease revenue $ 8,027,233 $ 1,804,779 $ -- $ 9,832,012 Depreciation 365,003 52,914 56,922 474,839 Segment profit 914,036 452,900 -- 1,366,936 Selling and administrative expenses 711,084 711,084 Interest expense 18,953 18,953 Interest income (22,116) (22,116) ------------ Income before income taxes 659,015 ------------ Capital expenditures 363,379 11,506 -- 374,885 Segment assets: Accounts receivable, net 4,680,485 1,231,546 -- 5,912,031 Inventory 3,691,359 2,158,126 -- 5,849,485 Property, plant and equipment, net 10,416,025 1,583,933 1,244,474 13,244,432 Other assets -- -- 5,841,950 5,841,950 ------------ 30,847,898 ------------
8 CHICAGO RIVET & MACHINE CO. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Assembly Fastener Equipment Other Consolidated ------------ ------------ ------------ ------------ Nine Months Ended September 30, 2003: Net sales and lease revenue $ 23,423,470 $ 5,650,679 $ -- $ 29,074,149 Depreciation 1,110,957 119,971 157,563 1,388,491 Segment profit 1,832,651 1,299,139 -- 3,131,790 Selling and administrative expenses 2,117,859 2,117,859 Interest expense 20,555 20,555 Interest income (56,917) (56,917) ------------ Income before income taxes 1,050,293 ------------ Capital expenditures 403,344 18,128 14,068 435,540 Nine Months Ended September 30, 2002: Net sales and lease revenue $ 26,405,711 $ 6,316,483 $ -- $ 32,722,194 Depreciation 1,097,266 164,727 169,836 1,431,829 Segment profit 3,381,677 1,777,093 -- 5,158,770 Selling and administrative expenses 2,181,202 2,181,202 Interest expense 64,728 64,728 Interest income (63,880) (63,880) ------------ Income before income taxes 2,976,720 ------------ Capital expenditures 774,996 13,446 75,171 863,613
9 CHICAGO RIVET & MACHINE CO. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results for the third quarter were very disappointing. Although economic conditions have improved in many sectors, manufacturing in general, and our markets in particular, continue to be quite weak. The lack of capital spending is reflected in our equipment segment revenues, which continue to trail the prior year's anemic levels. Traditionally, third quarter revenues are somewhat lower than other quarters due to the impact of vacation schedules at our facilities as well as at those of our customers. Net sales and lease revenues for the third quarter of 2003 amounted to $8,831,742, which is a decline of 10.2% compared to the same period of 2002. For the third quarter of 2003, fastener segment revenues amounted to $7,130,290, which is a decline of 11.2% compared to the third quarter of 2002. Revenues within the assembly equipment segment, for the third quarter of 2003, declined 5.7% compared to the third quarter of 2002 and amounted to $1,701,452. On a year-to-date basis, 2003 revenues within the fastener segment totaled $23,423,470, a decline of 11.3% compared with the first nine months of 2002, while revenues within the assembly equipment segment amounted to $5,650,679, which is a decline of 10.5% compared to the year earlier period. The overriding factor adversely affecting margins continues to be lower volumes. In addition, fastener segment profitability during the third quarter of 2003 was negatively affected by higher costs for health insurance, certain tooling costs and variable labor and fixed overhead costs that were not reduced in proportion to the decline in sales. Third quarter margins within the assembly equipment segment were also adversely affected by higher costs for health insurance and slightly higher labor costs attributable to inefficiencies related to lower volumes. In the near term, while we expect that costs for health insurance and tooling will remain at, or near, current levels, during the fourth quarter, further action has been taken to reduce labor costs through a reduction in employment levels. Selling and administrative expenses for both the current quarter and the first nine months of 2003 are lower than the corresponding periods in 2002 as higher costs for health insurance were more than offset by lower commission expense and lower profit sharing expense. During the third quarter, the accounts receivable balance decreased, compared with the second quarter, by approximately $346,000, primarily due to the lower sales generated during the third quarter of 2003. Inventory levels also declined during the quarter, reflecting successful efforts to adjust inventories to the lower level of operations. At September 30, 2003, the balance due on the term note was $282,760 and the effective interest rate was 1.9%. This note is scheduled to be paid in full in December 2003. The Company also has a $1.0 million line of credit available through Bank of America, NA. There is no charge for this facility unless utilized. We believe that the Company's current cash, cash equivalents and the available line of credit will be sufficient to provide adequate working capital for the foreseeable future. Clearly, third quarter results were unsatisfactory. Our sales volume was insufficient to cover our costs based upon the structure in place. We continue to solicit new business and have enjoyed some recent success in the fastener segment, but those gains have not fully offset the specific products lost to design changes and to certain competitive situations. We anticipate that we can continue to capture new specialty cold-headed parts in the coming months, but we also recognize margins will remain under pressure as our customers continue to take advantage of excess supply capacity in the industry and press for additional price reductions. The market for assembly equipment remains very soft, and we do not foresee any significant improvement in the near term. Early in the fourth quarter, we began to make reductions in our workforce and anticipate further reductions before year-end, as we adapt to what now appears to be a smaller market for machinery and standard fasteners. 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. 10 CHICAGO RIVET & MACHINE CO. QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK Over time, the Company is exposed to market risks arising from changes in interest rates. The Company has not historically used derivative financial instruments. As of September 30, 2003, $282,760 of floating-rate debt was exposed to changes in interest rates compared to $1,632,760 as of December 31, 2002. This exposure was primarily linked to the London Inter-Bank Offering Rate and the lender's prime rate under the Company's term loan. A hypothetical 10% change in these rates would not have had a material effect on the Company's quarterly earnings. CONTROLS AND PROCEDURES (a) Disclosure Controls and Procedures. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act. (b) Internal Control Over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 11 PART II -- OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 31 Rule 13a-14(a) or 15d-14(a) Certifications 31.1 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 Certifications 32.1 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. 99.1 Interim Report to Shareholders for the quarter ended September 30, 2003. (b) Reports on Form 8-K Current Report on Form 8-K, Item 12, Results of Operations and Financial Condition, dated August 4, 2003. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CHICAGO RIVET & MACHINE CO. ------------------------------------ (Registrant) Date: November 7, 2003 /s/ John A. Morrissey ------------------------------------ John A. Morrissey Chairman of the Board of Directors and Chief Executive Officer Date: November 7, 2003 /s/ John C. Osterman ------------------------------------ John C. Osterman President, Chief Operating Officer and Treasurer (Principal Financial Officer) Date: November 7, 2003 /s/ Michael J. Bourg ------------------------------------ Michael J. Bourg Controller (Principal Accounting Officer) 13 CHICAGO RIVET & MACHINE CO. EXHIBITS INDEX TO EXHIBITS
Exhibit Number Page 31 Rule 13a-14(a) or 15d-14(a) Certifications 31.1 Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 15 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 16 32 Section 1350 Certifications 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 17 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 18 99.1 Interim Report to Shareholders for the quarter ended September 30, 2003 19 - 20
EX-31.1 3 c80771exv31w1.txt SECTION 302 CERTIFICATION EXHIBIT 31.1 I, John A. Morrissey, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Chicago Rivet & Machine Co.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 7, 2003 /s/ John A. Morrissey --------------------------- John A. Morrissey Chairman EX-31.2 4 c80771exv31w2.txt SECTION 302 CERTIFICATION EXHIBIT 31.2 I, John C. Osterman, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Chicago Rivet & Machine Co.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 7, 2003 /s/ John C. Osterman --------------------------- John C. Osterman President/Treasurer EX-32.1 5 c80771exv32w1.txt SECTION 906 CERTIFICATION EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-Q of Chicago Rivet & Machine Co. (the "Company") for the quarterly period ended September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John A. Morrissey, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ John A. Morrissey - --------------------------------- Name: John A. Morrissey Title: Chief Executive Officer Date: November 7, 2003 EX-32.2 6 c80771exv32w2.txt SECTION 906 CERTIFICATION EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-Q of Chicago Rivet & Machine Co. (the "Company") for the quarterly period ended September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John C. Osterman, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ John C. Osterman - --------------------------------- Name: John C. Osterman Title: Chief Financial Officer Date: November 7, 2003 EX-99.1 7 c80771exv99w1.txt INTERIM REPORT TO SHAREHOLDERS EXHIBIT 99.1 To Our Shareholders: The comparative results of operations of Chicago Rivet & Machine Co. for the third quarter and first nine months of 2003 and 2002 are summarized below. Results for the third quarter were very disappointing. Although economic conditions have improved in many sectors, manufacturing in general, and our markets in particular, continue to be quite weak. The lack of capital spending is reflected in our equipment segment revenues, which continue to trail the prior year's anemic levels. Traditionally, third quarter revenues are somewhat lower than other quarters due to the impact of vacation schedules at our facilities as well as at those of our customers. Net sales and lease revenues for the third quarter of 2003 amounted to $8,831,742, which is a decline of 10.2% compared to the same period of 2002. For the third quarter of 2003, fastener segment revenues amounted to $7,130,290, which is a decline of 11.2% compared to the third quarter of 2002. Revenues within the assembly equipment segment, for the third quarter of 2003, declined 5.7% compared to the third quarter of 2002 and amounted to $1,701,452. On a year-to-date basis, 2003 revenues within the fastener segment totaled $23,423,470, a decline of 11.3% compared with the first nine months of 2002, while revenues within the assembly equipment segment amounted to $5,650,679, which is a decline of 10.5% compared to the year earlier period. The overriding factor adversely affecting margins continues to be lower volumes. In addition, fastener segment profitability during the third quarter of 2003 was negatively affected by higher costs for health insurance, certain tooling costs and variable labor and fixed overhead costs that were not reduced in proportion to the decline in sales. Third quarter margins within the assembly equipment segment were also adversely affected by higher costs for health insurance and slightly higher labor costs attributable to inefficiencies related to lower volumes. In the near term, while we expect that costs for health insurance and tooling will remain at, or near, current levels, during the fourth quarter, further action has been taken to reduce labor costs through a reduction in employment levels. Selling and administrative expenses for both the current quarter and the first nine months of 2003 are lower than the corresponding periods in 2002 as higher costs for health insurance were more than offset by lower commission expense and lower profit sharing expense. Clearly, third quarter results were unsatisfactory. Our sales volume was insufficient to cover our costs based upon the structure in place. We continue to solicit new business and have enjoyed some recent success in the fastener segment, but those gains have not fully offset the specific products lost to design changes and to certain competitive situations. We anticipate that we can continue to capture new specialty cold-headed parts in the coming months, but we also recognize margins will remain under pressure as our customers continue to take advantage of excess supply capacity in the industry and press for additional price reductions. The market for assembly equipment remains very soft, and we do not foresee any significant improvement in the near term. Early in the fourth quarter, we began to make reductions in our workforce and anticipate further reductions before year-end, as we adapt to what now appears to be a smaller market for machinery and standard fasteners. We will continue our efforts to improve our competitive position in terms of service, quality and price, and these efforts should have a positive impact on earnings. Respectfully yours, John A. Morrissey John C. Osterman Chairman President November 7, 2003 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 NINE MONTHS ENDED SEPTEMBER 30
THIRD QUARTER FIRST NINE MONTHS ------------------------------ ------------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Net sales and lease revenue $ 8,831,742 $ 9,832,012 $29,074,149 $32,722,194 Income before income taxes 8,431 659,015 1,050,293 2,976,720 Net income 5,431 435,015 692,293 1,962,720 Net income per share .01 .45 .72 2.03 Average shares outstanding 966,132 966,132 966,132 966,674 - -------------------------------------------------------------------------------------------------------- (All figures subject to year-end audit)
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