10-Q

UNITED STATES

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, 2014

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 000-01227

Chicago Rivet & Machine Co.

(Exact Name of Registrant as Specified in Its Charter)

Illinois	36-0904920
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
901 Frontenac Road, Naperville, Illinois	60563
(Address of Principal Executive Offices)	(Zip Code)

(630) 357-8500

Registrant’s Telephone Number, Including Area Code

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 has submitted electronically and posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of November 3, 2014, there were 966,132 shares of the registrant’s common stock outstanding.

CHICAGO RIVET & MACHINE CO.

INDEX

		Page
PART I.	FINANCIAL INFORMATION (Unaudited)
	Condensed Consolidated Balance Sheets at September 30, 2014 and December 31, 2013		2-3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2014 and 2013		4
	Condensed Consolidated Statements of Retained Earnings for the Nine Months Ended September 30, 2014 and 2013		5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013		6
	Notes to the Condensed Consolidated Financial Statements		7-10
	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11-12
	Controls and Procedures		13
PART II.	OTHER INFORMATION		14-20

1

PART I — FINANCIAL INFORMATION

Item  1. Financial Statements.

CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Balance Sheets

September 30, 2014 and December 31, 2013

	September 30,		December 31,
	2014		2013
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	851,331	$	443,608
Certificates of deposit		5,809,000		6,207,348
Accounts receivable, net of allowance of $150,000		5,961,305		5,510,770
Inventories, net		5,282,751		4,880,788
Deferred income taxes		448,191		410,191
Other current assets		435,467		295,521
Total current assets		18,788,045		17,748,226
Property, Plant and Equipment:
Land and improvements		1,246,920		1,238,150
Buildings and improvements		6,462,384		6,438,022
Production equipment and other		32,941,122		31,806,103
		40,650,426		39,482,275
Less accumulated depreciation		29,825,757		29,073,155
Net property, plant and equipment		10,824,669		10,409,120
Total assets	$	29,612,714	$	28,157,346

See Notes to the Condensed Consolidated Financial Statements

2

CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Balance Sheets

September 30, 2014 and December 31, 2013

	September 30,			December 31,
	2014			2013
	(Unaudited)
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	1,295,116		$	924,943
Accrued wages and salaries		1,022,952			560,114
Other accrued expenses		553,281			609,846
Unearned revenue and customer deposits		90,968			126,066
Total current liabilities		2,962,317			2,220,969
Deferred income taxes		1,009,275			1,065,275
Total liabilities		3,971,592			3,286,244
Commitments and contingencies (Note 3)
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; 966,132 shares outstanding		1,138,096			1,138,096
Additional paid-in capital		447,134			447,134
Retained earnings		27,977,990			27,207,970
Treasury stock, 171,964 shares at cost		(3,922,098	)		(3,922,098	)
Total shareholders’ equity		25,641,122			24,871,102
Total liabilities and shareholders’ equity	$	29,612,714		$	28,157,346

See Notes to the Condensed Consolidated Financial Statements

3

CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Statements of Income

For the Three and Nine Months Ended September 30, 2014 and 2013

(Unaudited)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2013		2014		2013
Net sales	$	8,995,825		$	9,461,778	$	28,446,927	$	27,915,157
Cost of goods sold		6,909,045			6,931,307		21,876,032		21,161,859
Gross profit		2,086,780			2,530,471		6,570,895		6,753,298
Selling and administrative expenses		1,326,911			1,391,902		4,120,849		4,072,643
Operating profit		759,869			1,138,569		2,450,046		2,680,655
Other income:
Interest income		6,375			7,801		19,237		23,286
Gain (loss) from disposal of equipment		(1,087	)		74,235		17,613		116,721
Other income		3,600			3,600		11,288		11,288
Income before income taxes		768,757			1,224,205		2,498,184		2,831,950
Provision for income taxes		228,000			404,000		820,000		920,000
Net income	$	540,757		$	820,205	$	1,678,184	$	1,911,950
Per share data, basic and diluted:
Net income per share	$	0.56		$	0.85	$	1.74	$	1.98
Average common shares outstanding		966,132			966,132		966,132		966,132
Cash dividends declared per share	$	0.18		$	0.15	$	0.94	$	0.45

See Notes to the Condensed Consolidated Financial Statements

4

CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Statements of Retained Earnings

For the Nine Months Ended September 30, 2014 and 2013

(Unaudited)

	2014			2013
Retained earnings at beginning of period	$	27,207,970		$	25,337,604
Net income for the period		1,678,184			1,911,950
Cash dividends declared in the period; $.94 per share in 2014 and $.45 per share in 2013		(908,164	)		(434,760	)
Retained earnings at end of period	$	27,977,990		$	26,814,794

See Notes to the Condensed Consolidated Financial Statements

5

CHICAGO RIVET & MACHINE CO.

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2014 and 2013

(Unaudited)

	2014			2013
Cash flows from operating activities:
Net income	$	1,678,184		$	1,911,950
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		932,500			801,689
Gain on disposal of equipment		(17,613	)		(116,721	)
Deferred income taxes		(94,000	)		40,000
Changes in operating assets and liabilities:
Accounts receivable, net		(450,535	)		(1,670,471	)
Inventories, net		(401,963	)		41,851
Other current assets		(139,946	)		72,085
Accounts payable		350,207			413,512
Accrued wages and salaries		462,838			555,361
Other accrued expenses		(56,565	)		237,527
Unearned revenue and customer deposits		(35,098	)		125,868
Net cash provided by operating activities		2,228,009			2,412,651
Cash flows from investing activities:
Capital expenditures		(1,329,170	)		(2,751,108	)
Proceeds from the sale of equipment		18,700			165,200
Proceeds from certificates of deposit		2,639,348			5,363,000
Purchases of certificates of deposit		(2,241,000	)		(4,233,348	)
Net cash used in investing activities		(912,122	)		(1,456,256	)
Cash flows from financing activities:
Cash dividends paid		(908,164	)		(434,760	)
Net cash used in financing activities		(908,164	)		(434,760	)
Net increase in cash and cash equivalents		407,723			521,635
Cash and cash equivalents at beginning of period		443,608			392,810
Cash and cash equivalents at end of period	$	851,331		$	914,445
Supplemental schedule of non-cash investing activities:
Capital expenditures in accounts payable	$	19,966		$	9,212

See Notes to the Condensed Consolidated Financial Statements

6

CHICAGO RIVET & MACHINE CO.

NOTES TO THE CONDENSED 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, 2014 (unaudited) and December 31, 2013 (audited) and the results of operations and changes in cash flows for the indicated periods. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules. Please refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

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. The results of operations for the three and nine-month period ending September 30, 2014 are not necessarily indicative of the results to be expected for the year.

New Accounting Pronouncements-In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. This ASU is effective for interim and annual reporting periods beginning after December 15, 2016 and is to be applied retrospectively. Early adoption is not permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on the consolidated results of operation, financial position and related disclosures.

2. 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.

3. The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, 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.

4. The Company’s effective tax rates were 29.7% and 33.0% for the third quarter of 2014 and 2013, respectively, and 32.8% and 32.5% for the nine months ended September 30, 2014 and 2013, respectively. Rates were lower than the U.S. federal statutory rate primarily due to the Domestic Production Activities Deduction allowed under Internal Revenue Code Section 199.

The Company’s federal income tax returns for the 2011, 2012 and 2013 tax years are subject to examination by the Internal Revenue Service (“IRS”). While it may be possible that a reduction could occur with respect to the Company’s unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a material change to the results of operations or financial condition of the Company. No statutes have been extended on any of the Company’s federal income tax filings. The statute of limitations on the Company’s 2011, 2012 and 2013 federal income tax returns will expire on September 15, 2015, 2016 and 2017, respectively.

The Company’s state income tax returns for the 2011 through 2013 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2017. The Company is currently not under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended.

7

5. Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method. A summary of inventories is as follows:

	September 30, 2014		December 31, 2013
Raw material	$	2,210,806	$	2,130,718
Work-in-process		1,833,310		1,507,755
Finished goods		1,868,835		1,806,315
Inventory, gross		5,912,951		5,444,788
Valuation reserves		630,200		564,000
Inventory, net	$	5,282,751	$	4,880,788

8

CHICAGO RIVET & MACHINE CO.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6. Segment Information—The Company operates in two business segments as determined by its products. The fastener segment includes cold-formed parts, rivets and screw machine products. The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines. Information by segment is as follows:

			Assembly
	Fastener		Equipment		Other			Consolidated
Three Months Ended September 30, 2014:
Net sales	$	8,295,936	$	699,889	$	—		$	8,995,825
Depreciation		279,258		16,066		18,440			313,764
Segment profit		1,111,165		157,153		—			1,268,318
Selling and administrative expenses		—		—		(504,849	)		(504,849	)
Loss from the disposal of equipment		—		—		(1,087	)		(1,087	)
Interest income		—		—		6,375			6,375
Income before income taxes								$	768,757
Capital expenditures		532,879		—		16,170			549,049
Segment assets:
Accounts receivable, net		5,615,498		345,807		—			5,961,305
Inventories, net		4,479,552		803,199		—			5,282,751
Property, plant and equipment, net		9,199,056		1,110,475		515,138			10,824,669
Other assets						7,543,989			7,543,989
								$	29,612,714
Three Months Ended September 30, 2013:
Net sales	$	8,631,105	$	830,673	$	—		$	9,461,778
Depreciation		237,621		14,050		19,199			270,870
Segment profit		1,453,799		228,013		—			1,681,812
Selling and administrative expenses		—		—		(539,643	)		(539,643	)
Gain from the disposal of equipment		—		—		74,235			74,235
Interest income		—		—		7,801			7,801
Income before income taxes								$	1,224,205
Capital expenditures		518,150		—		267,221			785,371
Segment assets:
Accounts receivable, net		5,873,916		374,487		—			6,248,403
Inventories, net		3,994,869		899,652		—			4,894,521
Property, plant and equipment, net		8,309,105		1,124,031		554,882			9,988,018
Other assets		—		—		7,658,231			7,658,231
								$	28,789,173

9

CHICAGO RIVET & MACHINE CO.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

			Assembly
	Fastener		Equipment		Other			Consolidated
Nine Months Ended September 30, 2014:
Net sales	$	26,148,265	$	2,298,662	$	—		$	28,446,927
Depreciation		829,612		48,198		54,690			932,500
Segment profit		3,489,617		558,550		—			4,048,167
Selling and administrative expenses		—		—		(1,586,833	)		(1,586,833	)
Gain from the disposal of equipment		—		—		17,613			17,613
Interest income		—		—		19,237			19,237
Income before income taxes								$	2,498,184
Capital expenditures		1,302,214		21,540		25,382			1,349,136
Nine Months Ended September 30, 2013:
Net sales	$	25,397,537	$	2,517,620	$	—		$	27,915,157
Depreciation		702,089		42,150		57,450			801,689
Segment profit		3,615,776		677,939		—			4,293,715
Selling and administrative expenses		—		—		(1,601,772	)		(1,601,772	)
Gain from the disposal of equipment		—		—		116,721			116,721
Interest income		—		—		23,286			23,286
Income before income taxes								$	2,831,950
Capital expenditures		2,429,172		59,863		271,285			2,760,320

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CHICAGO RIVET & MACHINE CO.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Net sales in the third quarter were $8,995,825 this year, compared to $9,461,778 in the third quarter of 2013. The 4.9% decline was only the second quarter in which sales did not exceed the year earlier quarter, in over five years. As of September 30, 2014, year to date sales totaled $28,446,927, an improvement of $531,770, or 1.9%, compared with the first three quarters of 2013. Net income for the third quarter was $540,757, or $0.56 per share, compared with $820,205, or $0.85 per share, in the third quarter of 2013. Net income for the first three quarters of 2014 was $1,678,184, or $1.74 per share, compared with $1,911,950, or $1.98 per share, reported in 2013. Contributing to the less profitable results for the third quarter and the current year to date were the lower sales, a less favorable product mix and increases in certain overhead costs, as well as a reduction in gains from disposals of equipment.

In the third quarter, fastener segment revenues were $8,295,936, a 3.9% decline from $8,631,105 in the year earlier quarter. For the first three quarters of the year, fastener segment revenues have increased $750,728, or 3.0%, to $26,148,265 from $25,397,537 in 2013. Fastener segment gross margin was $1,858,769 in the third quarter compared to $2,228,251 in the third quarter of 2013, as lower sales and increases in certain production costs negatively impacted margins in the quarter. Compared to the year earlier quarter, depreciation expense was $41,000 higher in the third quarter, due to recent investments in equipment, while tooling expense increased approximately $35,000, primarily related to new parts production. Labor costs were higher in the quarter and employee health insurance increased approximately $43,000 compared to last year. Fastener segment gross margin for the first three quarters of 2014 was $5,791,266 compared to $5,835,469 in 2013, a reduction of $44,203, or .8%. The increase in the year to date sales was offset by certain higher production costs in the current year, including depreciation, which has increased $125,000 and employee health insurance which has increased approximately $122,000. Additionally, labor costs have increased due to higher headcount associated with the greater volume of activity in the current year.

Assembly equipment segment revenues were $699,889 in the third quarter of 2014, a decline of $130,784 compared to the third quarter of 2013, when revenues were $830,673. Current year to date assembly equipment sales of $2,298,662 reflect an 8.7% decline compared to $2,517,620 reported for the first three quarters of 2013. The decline in third quarter and year to date sales was primarily related to a reduction in machines shipped compared to the year earlier periods, as sales of tools and parts increased during the third quarter and were relatively unchanged on a year to date basis. The reduction in assembly equipment segment sales in the third quarter resulted in a $74,209 decline in segment gross margin for the quarter and has resulted in a $138,200 reduction in the year to date segment margin.

Selling and administrative expenses for the third quarter of 2014 were $1,326,911, a reduction of $64,991, or 4.7%, compared to the year earlier quarter total of $1,391,902. The decrease is primarily due a $53,000 decline in profit sharing expense related to lower profitability in the quarter. Through the first three quarters of the year, selling and administrative expenses have increased $48,206, or 1.2%, from $4,072,643 in 2013 to $4,120,849 in 2014. Commissions have increased approximately $56,000 in the current year due to higher sales. Professional fees have increased approximately $34,000, primarily related to consulting incurred to achieve ISO/TS 16949:2009 quality certification at our H & L Tool facility. Partially offsetting these increases is a $38,000 reduction in profit sharing expense related to lower pretax profit in the current year. The remaining net difference is comprised of various smaller items of change. Selling and administrative expenses as a percentage of net sales for the first three quarters of 2014 declined to 14.5% from 14.6% in 2013.

Other income in the third quarter declined approximately $77,000 from the amount recorded in the third quarter of 2013 and has declined approximately $103,000 on a year to date basis, primarily due to gains on the sale of certain equipment reported in 2013.

The Company’s effective tax rates were 29.7% and 33.0% for the third quarter of 2014 and 2013, respectively, and 32.8% and 32.5% for the nine months ended September 30, 2014 and 2013, respectively. Rates were lower than the U.S. federal statutory rate primarily due to the Domestic Production Activities Deduction allowed under Internal Revenue Code Section 199.

Working capital as of September 30, 2014 amounted to $15.8 million, an increase of approximately $.3 million from the beginning of the year. Working capital was positively impacted by a $.5 million increase in accounts receivable and a $.4 million increase in inventories, which were only partially offset by a $.4 million increase in accounts payable and a $.4 million increase in accrued expenses. These changes are typical based on the level of activity at this time of year compared to the end of the prior year. Capital expenditures for the first three quarters of 2014 were $1.3 million, which

11

primarily consisted of equipment used in our fastener segment operations. Dividends paid in the first three quarters were $.9 million, including three regular quarterly payments of $.18 per share and an extra dividend of $.40 per share paid in the first quarter. The net result of these changes and other cash flow items on cash, cash equivalents and certificates of deposit was to leave such balances relatively unchanged from the beginning of the year at $6.7 million. Management believes that current cash, cash equivalents and operating cash flow will provide adequate working capital for the foreseeable future.

We are pleased to report very respectable operating results for both the third quarter and current year to date. As our business is typically stronger in the first half of the year, the unusually strong results for the third quarter of 2013 provided for difficult comparison for this year. With low interest rates, improved consumer confidence and lower fuel prices providing favorable conditions in the automotive market, upon which we rely for the majority of our revenues, we believe that we remain well positioned to deliver positive results in the future. We will continue to pursue opportunities to profitably grow our revenues in all markets and will remain focused on controlling costs wherever possible, while continuing to supply products with the level of quality and performance our customers have come to expect.

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.

12

CHICAGO RIVET & MACHINE CO.

Item 4. Controls and Procedures.

(a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and President, Chief Operating Officer and Treasurer (the Company’s principal 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 President, Chief Operating Officer and Treasurer 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.

13

PART II — OTHER INFORMATION

Item 6. 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.
101	Interactive Data File. Includes the following financial and related information from Chicago Rivet & Machine Co.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 formatted in Extensible Business Reporting Language (XBRL): (1) Condensed Consolidated Balance Sheets, (2) Condensed Consolidated Statements of Operations, (3) Condensed Consolidated Statements of Retained Earnings, (4) Condensed Consolidated Statements of Cash Flows, and (5) Notes to Condensed Consolidated Financial Statements.

14

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, 2014

/s/ John A. Morrissey

John A. Morrissey

Chairman of the Board of Directors and Chief Executive Officer

(Principal Executive Officer)

Date: November 7, 2014

/s/ Michael J. Bourg

Michael J. Bourg

President, Chief Operating Officer and Treasurer

(Principal Financial Officer)

15

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		17
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		18
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		19
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		20
101	Interactive Data File. Includes the following financial and related information from Chicago Rivet & Machine Co.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 formatted in Extensible Business Reporting Language (XBRL): (1) Condensed Consolidated Balance Sheets, (2) Condensed Consolidated Statements of Operations, (3) Condensed Consolidated Statements of Retained Earnings, (4) Condensed Consolidated Statements of Cash Flows, and (5) Notes to Condensed Consolidated Financial Statements.

16

EX-31.1

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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) 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

d) 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, 2014	/s/ John A. Morrissey
	John A. Morrissey
	Chief Executive Officer
	(Principal Executive Officer)

17

EX-31.2

EXHIBIT 31.2

I, Michael J. Bourg, 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) 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

d) 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, 2014	/s/ Michael J. Bourg
	Michael J. Bourg
	President, Chief Operating Officer
	and Treasurer (Principal Financial Officer)

18

EX-32.1

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, 2014 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. § 1350, as adopted pursuant to § 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
	(Principal Executive Officer)
Date:	November 7, 2014

19

EX-32.2

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, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Bourg, as President, Chief Operating Officer and Treasurer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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/ Michael J. Bourg
Name:	Michael J. Bourg
Title:	President, Chief Operating Officer
	and Treasurer (Principal Financial Officer)
Date:	November 7, 2014

20

XML

Income Taxes

9 Months Ended

Sep. 30, 2014

Notes

Income Taxes

4.  The Company’s effective tax rates were 29.7% and 33.0% for the third quarter of 2014 and 2013, respectively, and 32.8% and 32.5% for the nine months ended September 30, 2014 and 2013, respectively.  Rates were lower than the U.S. federal statutory rate primarily due to the Domestic Production Activities Deduction allowed under Internal Revenue Code Section 199.

The Company’s federal income tax returns for the 2011, 2012 and 2013 tax years are subject to examination by the Internal Revenue Service (“IRS”).   While it may be possible that a reduction could occur with respect to the Company’s unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a material change to the results of operations or financial condition of the Company.  No statutes have been extended on any of the Company’s federal income tax filings.  The statute of limitations on the Company’s 2011, 2012 and 2013 federal income tax returns will expire on September 15, 2015, 2016 and 2017, respectively.

The Company’s state income tax returns for the 2011 through 2013 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2017.  The Company is currently not under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended.

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Notes

Commitments and Contingencies

3.  The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, 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.

XML

Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Sep. 30, 2014		Dec. 31, 2013
Current Assets:
Cash and cash equivalents	$ 851,331		$ 443,608
Certificates of deposit	5,809,000		6,207,348
Accounts receivable, net	5,961,305	[1]	5,510,770	[1]
Inventories, net	5,282,751		4,880,788
Deferred tax assets	448,191		410,191
Other current assets	435,467		295,521
Total current assets	18,788,045		17,748,226
Property, Plant and Equipment:
Land	923,587		923,587
Land improvements	323,333		314,563
Buildings and improvements	6,462,384		6,438,022
Production equipment and other	32,941,122		31,806,103
Property, Plant and Equipment Gross	40,650,426		39,482,275
Less accumulated depreciation	29,825,757		29,073,155
Net property, plant and equipment	10,824,669		10,409,120
Total assets	29,612,714		28,157,346
Current Liabilities:
Accounts payable	1,295,116		924,943
Accrued wages and salaries	1,022,952		560,114
Other accrued expenses	553,281		609,846
Unearned revenue and customer deposits	90,968		126,066
Total current liabilities	2,962,317		2,220,969
Deferred income taxes	1,009,275		1,065,275
Total liabilities	3,971,592		3,286,244
Shareholders' Equity:
Preferred stock	0	[2]	0	[2]
Common stock	1,138,096	[3]	1,138,096	[3]
Additional paid-in capital	447,134		447,134
Retained earnings	27,977,990		27,207,970
Less: Treasury stock	3,922,098	[4]	3,922,098	[4]
Total shareholders' equity	25,641,122		24,871,102
Total liabilities and shareholders' equity	$ 29,612,714		$ 28,157,346

[1] Net of allowance of $150,000.

[2] No par value, 500,000 shares authorized, none outstanding.

[3] $1.00 par value, 4,000,000 shares authorized, 1,138,096 shares issued, 966,132 shares outstanding.

[4] At cost, 171,964 shares.

XML

Accounting Policies

9 Months Ended

Sep. 30, 2014

Notes

Accounting Policies

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, 2014 (unaudited) and December 31, 2013 (audited) and the results of operations and changes in cash flows for the indicated periods.  Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules.  Please refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

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.  The results of operations for the three and nine-month period ending September 30, 2014 are not necessarily indicative of the results to be expected for the year.

New Accounting Pronouncements-In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)."  This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services.  This ASU is effective for interim and annual reporting periods beginning after December 15, 2016 and is to be applied retrospectively.  Early adoption is not permitted.  The Company is currently evaluating the impact that the adoption of this guidance will have on the consolidated results of operation, financial position and related disclosures.

XML

Risks and Uncertainties

9 Months Ended

Sep. 30, 2014

Notes

Risks and Uncertainties

2.  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.

XML

Condensed Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Condensed Consolidated Statements of Income
Net sales	$ 8,995,825	$ 9,461,778	$ 28,446,927	$ 27,915,157
Cost of goods sold	6,909,045	6,931,307	21,876,032	21,161,859
Gross profit	2,086,780	2,530,471	6,570,895	6,753,298
Selling and administrative expenses	1,326,911	1,391,902	4,120,849	4,072,643
Operating profit	759,869	1,138,569	2,450,046	2,680,655
Other income:
Interest income	6,375	7,801	19,237	23,286
Gain (loss) from disposal of equipment	(1,087)	74,235	17,613	116,721
Other nonoperating income	3,600	3,600	11,288	11,288
Income before provision for income taxes	768,757	1,224,205	2,498,184	2,831,950
Provision for income taxes	228,000	404,000	820,000	920,000
Net income	$ 540,757	$ 820,205	$ 1,678,184	$ 1,911,950
Earnings per share	$ 0.56	$ 0.85	$ 1.74	$ 1.98
Average common shares outstanding	966,132	966,132	966,132	966,132
Cash dividends declared per share	$ 0.18	$ 0.15	$ 0.94	$ 0.45

XML

Document and Entity Information (USD $)	9 Months Ended
	Sep. 30, 2014	Jun. 30, 2014
Document and Entity Information:
Entity Registrant Name	CHICAGO RIVET & MACHINE CO.
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Entity Central Index Key	0000019871
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	966,132
Entity Public Float		$ 29,066,867
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income	$ 1,678,184	$ 1,911,950
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	932,500	801,689
Gain on disposal of equipment	(17,613)	(116,721)
Deferred income taxes	(94,000)	40,000
Changes in operating assets and liabilities:
Accounts receivable, net	(450,535)	(1,670,471)
Inventories, net	(401,963)	41,851
Other current assets	(139,946)	72,085
Accounts payable	350,207	413,512
Accrued wages and salaries	462,838	555,361
Other accrued expenses	(56,565)	237,527
Unearned revenue and customer deposits	(35,098)	125,868
Net cash provided by operating activities	2,228,009	2,412,651
Cash flows from investing activities:
Capital expenditures	(1,329,170)	(2,751,108)
Proceeds from the sale of equipment	18,700	165,200
Proceeds from certificates of deposit	2,639,348	5,363,000
Purchases of certificates of deposit	(2,241,000)	(4,233,348)
Net cash used in investing activities	(912,122)	(1,456,256)
Cash flows from financing activities:
Cash dividends paid	(908,164)	(434,760)
Net cash used in financing activities	(908,164)	(434,760)
Net increase in cash and cash equivalents	407,723	521,635
Cash and cash equivalents at beginning of period	443,608	392,810
Cash and cash equivalents at end of period	851,331	914,445
Supplemental schedule of non-cash investing activities:
Capital expenditures in accounts payable	$ 19,966	$ 9,212

XML

Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

Policies

Accounting Policies

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, 2014 (unaudited) and December 31, 2013 (audited) and the results of operations and changes in cash flows for the indicated periods.  Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules.  Please refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

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.  The results of operations for the three and nine-month period ending September 30, 2014 are not necessarily indicative of the results to be expected for the year.

New Accounting Pronouncements-In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)."  This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services.  This ASU is effective for interim and annual reporting periods beginning after December 15, 2016 and is to be applied retrospectively.  Early adoption is not permitted.  The Company is currently evaluating the impact that the adoption of this guidance will have on the consolidated results of operation, financial position and related disclosures.

Risks and Uncertainties

2.  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.

Commitments and Contingencies

3.  The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, 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.

Income Taxes

4.  The Company’s effective tax rates were 29.7% and 33.0% for the third quarter of 2014 and 2013, respectively, and 32.8% and 32.5% for the nine months ended September 30, 2014 and 2013, respectively.  Rates were lower than the U.S. federal statutory rate primarily due to the Domestic Production Activities Deduction allowed under Internal Revenue Code Section 199.

The Company’s federal income tax returns for the 2011, 2012 and 2013 tax years are subject to examination by the Internal Revenue Service (“IRS”).   While it may be possible that a reduction could occur with respect to the Company’s unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a material change to the results of operations or financial condition of the Company.  No statutes have been extended on any of the Company’s federal income tax filings.  The statute of limitations on the Company’s 2011, 2012 and 2013 federal income tax returns will expire on September 15, 2015, 2016 and 2017, respectively.

The Company’s state income tax returns for the 2011 through 2013 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2017.  The Company is currently not under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended.

Inventory

5.  Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method.

Segment Reporting

6.  Segment Information—The Company operates in two business segments as determined by its products.  The fastener segment includes cold-formed parts, rivets and screw machine products.  The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines.

XML

Segment Reporting

9 Months Ended

Sep. 30, 2014

Notes

Segment Reporting

6.  Segment Information—The Company operates in two business segments as determined by its products.  The fastener segment includes cold-formed parts, rivets and screw machine products.  The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines.  Information by segment is as follows:

	Fastener	Assembly Equipment	Other	Consolidated
Three Months Ended September 30, 2014:
Net sales	$   8,295,936	$   699,889	0	$   8,995,825
Depreciation	279,258	16,066	18,440	313,764
Segment profit	1,111,165	157,153	0	1,268,318
Selling and administrative expenses	0	0	(504,849)	(504,849)
Loss from disposal of equipment	0	0	(1,087)	(1,087)
Interest income	0	0	6,375	6,375
Income before income taxes				$     768,757
Capital expenditures	532,879	0	16,170	549,049
Segment assets:
Accounts receivable, net	5,615,498	345,807	0	5,961,305
Inventories, net	4,479,552	803,199	0	5,282,751
Property, plant and equipment, net	9,199,056	1,110,475	515,138	10,824,669
Other assets	0	0	7,543,989	7,543,989
				$   29,612,714
Three Months Ended September 30, 2013:
Net sales	$  8,631,105	$   830,673	0	$      9,461,778
Depreciation	237,621	14,050	19,199	270,870
Segment profit	1,453,799	228,013	0	1,681,812
Selling and administrative expenses	0	0	(539,643)	(539,643)
Gain from disposal of equipment	0	0	74,235	74,235
Interest income	0	0	7,801	7,801
Income before income taxes				$       1,224,205
Capital expenditures	518,150	0	267,221	785,371
Segment assets:
Accounts receivable, net	5,873,916	374,487	0	6,248,403
Inventories, net	3,994,869	899,652	0	4,894,521
Property, plant and equipment, net	8,309,105	1,124,031	554,882	9,988,018
Other assets	0	0	7,658,231	7,658,231
				$   28,789,173
Nine Months Ended September 30, 2014:
Net sales	$   26,148,265	$  2,298,662	0	$   28,446,927
Depreciation	829,612	48,198	54,690	932,500
Segment profit	3,489,617	558,550	0	4,048,167
Selling and administrative expenses	0	0	(1,586,833)	(1,586,833)
Gain from disposal of equipment	0	0	17,613	17,613
Interest income	0	0	19,237	19,237
Income before income taxes				$     2,498,184
Capital expenditures	1,302,214	21,540	25,382	1,349,136
Nine Months Ended September 30, 2013:
Net sales	$  25,397,537	$  2,517,620	0	$     27,915,157
Depreciation	702,089	42,150	57,450	801,689
Segment profit	3,615,776	677,939	0	4,293,715
Selling and administrative expenses	0	0	(1,601,772)	(1,601,772)
Gain from disposal of equipment	0	0	116,721	116,721
Interest income	0	0	23,286	23,286
Income before income taxes				$      2,831,950
Capital expenditures	2,429,172	59,863	271,285	2,760,320

XML

Schedule of Inventory, Current (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Details
Inventory, Raw Materials, Gross	$ 2,210,806	$ 2,130,718
Inventory, Work in Process, Gross	1,833,310	1,507,755
Inventory, Finished Goods, Gross	1,868,835	1,806,315
Inventory, Gross	5,912,951	5,444,788
Inventory Valuation Reserves	630,200	564,000
Inventories, net	$ 5,282,751	$ 4,880,788	$ 4,894,521

XML

Schedule of Inventory, Current (Tables)

9 Months Ended

Sep. 30, 2014

Tables/Schedules

Schedule of Inventory, Current

	September 30, 2014	December 31, 2013
Raw material	$              2,210,806	$                2,130,718
Work-In-Process	1,833,310	1,507,755
Finished Goods	1,868,835	1,806,315
Inventory, Gross	5,912,951	5,444,788
Valuation reserves	630,200	564,000
Inventory, Net	$              5,282,751	$               4,880,788

XML

Schedule of Segment Reporting Information, by Segment (Tables)

9 Months Ended

Sep. 30, 2014

Tables/Schedules

Schedule of Segment Reporting Information, by Segment

	Fastener	Assembly Equipment	Other	Consolidated
Three Months Ended September 30, 2014:
Net sales	$   8,295,936	$   699,889	0	$   8,995,825
Depreciation	279,258	16,066	18,440	313,764
Segment profit	1,111,165	157,153	0	1,268,318
Selling and administrative expenses	0	0	(504,849)	(504,849)
Loss from disposal of equipment	0	0	(1,087)	(1,087)
Interest income	0	0	6,375	6,375
Income before income taxes				$     768,757
Capital expenditures	532,879	0	16,170	549,049
Segment assets:
Accounts receivable, net	5,615,498	345,807	0	5,961,305
Inventories, net	4,479,552	803,199	0	5,282,751
Property, plant and equipment, net	9,199,056	1,110,475	515,138	10,824,669
Other assets	0	0	7,543,989	7,543,989
				$   29,612,714
Three Months Ended September 30, 2013:
Net sales	$  8,631,105	$   830,673	0	$      9,461,778
Depreciation	237,621	14,050	19,199	270,870
Segment profit	1,453,799	228,013	0	1,681,812
Selling and administrative expenses	0	0	(539,643)	(539,643)
Gain from disposal of equipment	0	0	74,235	74,235
Interest income	0	0	7,801	7,801
Income before income taxes				$       1,224,205
Capital expenditures	518,150	0	267,221	785,371
Segment assets:
Accounts receivable, net	5,873,916	374,487	0	6,248,403
Inventories, net	3,994,869	899,652	0	4,894,521
Property, plant and equipment, net	8,309,105	1,124,031	554,882	9,988,018
Other assets	0	0	7,658,231	7,658,231
				$   28,789,173
Nine Months Ended September 30, 2014:
Net sales	$   26,148,265	$  2,298,662	0	$   28,446,927
Depreciation	829,612	48,198	54,690	932,500
Segment profit	3,489,617	558,550	0	4,048,167
Selling and administrative expenses	0	0	(1,586,833)	(1,586,833)
Gain from disposal of equipment	0	0	17,613	17,613
Interest income	0	0	19,237	19,237
Income before income taxes				$     2,498,184
Capital expenditures	1,302,214	21,540	25,382	1,349,136
Nine Months Ended September 30, 2013:
Net sales	$  25,397,537	$  2,517,620	0	$     27,915,157
Depreciation	702,089	42,150	57,450	801,689
Segment profit	3,615,776	677,939	0	4,293,715
Selling and administrative expenses	0	0	(1,601,772)	(1,601,772)
Gain from disposal of equipment	0	0	116,721	116,721
Interest income	0	0	23,286	23,286
Income before income taxes				$      2,831,950
Capital expenditures	2,429,172	59,863	271,285	2,760,320

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Schedule of Segment Reporting Information, by Segment (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013	Sep. 30, 2014		Sep. 30, 2013	Dec. 31, 2013
Net sales	$ 8,995,825		$ 9,461,778	$ 28,446,927		$ 27,915,157
Depreciation	313,764		270,870	932,500		801,689
Segment profit	1,268,318		1,681,812	4,048,167		4,293,715
Selling and administrative expenses	(504,849)		(539,643)	(1,586,833)		(1,601,772)
Gain from disposal of equipment	(1,087)		74,235	17,613		116,721
Interest income	6,375		7,801	19,237		23,286
Capital expenditures	549,049		785,371	1,349,136		2,760,320
Accounts receivable, net	5,961,305	[1]	6,248,403	5,961,305	[1]	6,248,403	5,510,770	[1]
Inventories, net	5,282,751		4,894,521	5,282,751		4,894,521	4,880,788
Property, plant and equipment, net	10,824,669		9,988,018	10,824,669		9,988,018	10,409,120
Other assets	7,543,989		7,658,231	7,543,989		7,658,231
Income before income taxes	768,757		1,224,205	2,498,184		2,831,950
Fastener
Net sales	8,295,936		8,631,105	26,148,265		25,397,537
Depreciation	279,258		237,621	829,612		702,089
Segment profit	1,111,165		1,453,799	3,489,617		3,615,776
Selling and administrative expenses	0		0	0		0
Gain from disposal of equipment	0		0	0		0
Interest income	0		0	0		0
Capital expenditures	532,879		518,150	1,302,214		2,429,172
Accounts receivable, net	5,615,498		5,873,916	5,615,498		5,873,916
Inventories, net	4,479,552		3,994,869	4,479,552		3,994,869
Property, plant and equipment, net	9,199,056		8,309,105	9,199,056		8,309,105
Other assets	0		0	0		0
Assembly Equipment
Net sales	699,889		830,673	2,298,662		2,517,620
Depreciation	16,066		14,050	48,198		42,150
Segment profit	157,153		228,013	558,550		677,939
Selling and administrative expenses	0		0	0		0
Gain from disposal of equipment	0		0	0		0
Interest income	0		0	0		0
Capital expenditures	0		0	21,540		59,863
Accounts receivable, net	345,807		374,487	345,807		374,487
Inventories, net	803,199		899,652	803,199		899,652
Property, plant and equipment, net	1,110,475		1,124,031	1,110,475		1,124,031
Other assets	0		0	0		0
Unallocated Corporate
Net sales	0		0	0		0
Depreciation	18,440		19,199	54,690		57,450
Segment profit	0		0	0		0
Selling and administrative expenses	(504,849)		(539,643)	(1,586,833)		(1,601,772)
Gain from disposal of equipment	(1,087)		74,235	17,613		116,721
Interest income	6,375		7,801	19,237		23,286
Capital expenditures	16,170		267,221	25,382		271,285
Accounts receivable, net	0		0	0		0
Inventories, net	0		0	0		0
Property, plant and equipment, net	515,138		554,882	515,138		554,882
Other assets	$ 7,543,989		$ 7,658,231	$ 7,543,989		$ 7,658,231

[1] Net of allowance of $150,000.

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Condensed Consolidated Statements of Retained Earnings (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Condensed Consolidated Statements of Retained Earnings
Retained earnings at beginning of period	$ 27,207,970	$ 25,337,604
Net income	1,678,184	1,911,950
Cash dividends paid, $0.94 per share in 2014 and $0.45 per share in 2013	(908,164)	(434,760)
Retained earnings at end of period	$ 27,977,990	$ 26,814,794

XML

Inventory

9 Months Ended

Sep. 30, 2014

Notes

Inventory

5.  Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method.  A summary of inventories is as follows: 

	September 30, 2014	December 31, 2013
Raw material	$              2,210,806	$                2,130,718
Work-In-Process	1,833,310	1,507,755
Finished Goods	1,868,835	1,806,315
Inventory, Gross	5,912,951	5,444,788
Valuation reserves	630,200	564,000
Inventory, Net	$              5,282,751	$               4,880,788