<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1995 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 of (I.R.S. Employer Identification No.)
incorporation or organization)
P. O. Box 3061
901 Frontenac Road
Naperville, Illinois 60566
---------------------------------------- ------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (708) 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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at June 30, 1995
------------------------- ----------------------------
<S> <C>
COMMON STOCK, $2.00 PAR VALUE 586,548 SHARES
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Company's Interim Report to Shareholders for the Quarter
ended June 30, 1995 are incorporated by reference in Part I of this Report.
<PAGE> 2
CHICAGO RIVET & MACHINE CO.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
<S> <C>
Balance Sheets at June 30, 1995
and December 31, 1994. 2-3
Statements of Operations for the Three and Six
Months Ended June 30, 1995 and 1994. 4
Statements of Retained Earnings for the
Six Months Ended June 30, 1995 and 1994. 5
Statements of Cash Flows for the Six
Months Ended June 30, 1995 and 1994. 6
Notes to the Financial Statements 7-8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 10-13
</TABLE>
<PAGE> 3
CHICAGO RIVET & MACHINE CO.
Balance Sheets
June 30, 1995 and December 31, 1994
Assets
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- ------------
(unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,223,246 $ 2,225,445
Certificates of deposit 3,202,115 2,126,240
U. S. Government securities, at amortized cost,
which approximates market 1,818,174 1,631,975
Accounts receivable - net of allowances 3,682,066 2,872,562
Inventories:
Raw materials 734,814 828,616
Work in process 1,040,377 1,172,978
Finished goods 2,078,057 2,342,942
----------- -----------
Total inventories 3,853,248 4,344,536
----------- -----------
Deferred income taxes (Note 4) 737,478 683,064
Other current assets 414,967 310,103
----------- -----------
Total Current Assets 14,931,294 14,193,925
----------- -----------
Goodwill, net of amortization 45,842 58,340
----------- -----------
Property, Plant and Equipment
At Cost:
Land and improvements 346,542 346,542
Buildings and improvements 3,716,381 3,704,730
Production equipment, leased
machines and other 14,321,665 14,179,089
----------- -----------
18,384,588 18,230,361
Less - Accumulated Depreciation 12,859,064 12,559,541
----------- -----------
Total Property, Plant and Equipment - Net 5,525,524 5,670,820
----------- -----------
Total Assets $20,502,660 $19,923,085
=========== ===========
</TABLE>
See Notes to the Financial Statements
-2-
<PAGE> 4
CHICAGO RIVET & MACHINE CO.
Balance Sheets
June 30, 1995 and December 31, 1994
Liabilities and Shareholders' Equity
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
-------- ------------
(unaudited)
<S> <C> <C>
Current Liabilities:
Accounts payable $ 937,087 $ 1,144,529
Contributions due profit - sharing
and pension plans 279,578 322,309
Wages and salaries 661,575 638,565
Other accrued expenses (Note 5) 803,094 602,194
Unearned lease revenue 134,190 105,352
Federal and state income taxes 371,184 412,369
----------- -----------
Total Current Liabilities 3,186,708 3,225,318
Deferred Income Taxes (Note 4) 1,033,366 995,767
----------- -----------
Total Liabilities 4,220,074 4,221,085
----------- -----------
Shareholders' Equity:
Preferred stock, no par value:
authorized 500,000 shares -
none outstanding -- --
Common stock, $2.00 par value:
authorized 2,000,000 shares -
issued and outstanding 586,548
and 586,648, respectively 1,173,096 1,173,296
Additional paid - in capital 460,880 460,959
Retained earnings 14,648,610 14,067,745
----------- -----------
Total Shareholders' Equity 16,282,586 15,702,000
----------- -----------
Commitments and Contingencies (Note 3) -- --
----------- -----------
Total Liabilities and Shareholders' Equity $20,502,660 $19,923,085
=========== ===========
</TABLE>
See Notes to the Financial Statements
-3-
<PAGE> 5
CHICAGO RIVET & MACHINE CO.
Statements of Operations
For the Three and Six Months Ended June 30, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, June 30,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 6,853,109 $ 5,769,422 $13,180,570 $11,473,198
Lease revenue 129,638 137,842 260,834 294,713
------------ ----------- ----------- -----------
$ 6,982,747 $ 5,907,264 $13,441,404 $11,767,911
Cost of goods sold and costs
related to lease revenue 4,521,996 3,837,253 8,738,219 7,682,222
------------ ----------- ----------- -----------
Gross profit 2,460,751 2,070,011 4,703,185 4,085,689
Shipping, selling and
administrative expenses 1,260,877 1,251,740 2,477,903 2,454,580
Profit sharing and pension
expenses 150,000 63,000 225,000 111,000
------------ ----------- ----------- -----------
1,049,874 755,271 2,000,282 1,520,109
Other income and expenses:
Interest income from
U.S. Government securities
and certificates of deposit 71,611 42,414 142,955 78,378
Gain (loss) from sale of leased
machines and other equipment 530 (470) 1,109 29,988
Amortization expense (6,249) (6,249) (12,498) (12,498)
Other income, net of other expense 142 (354) 303 126
------------ ----------- ----------- -----------
Income before income taxes 1,115,908 790,612 2,132,151 1,616,103
Provision for income taxes 447,000 334,000 874,000 660,000
------------ ----------- ----------- -----------
Net income $ 668,908 $ 456,612 $ 1,258,151 $ 956,103
============ =========== =========== ===========
Average common shares outstanding 586,645 587,110 586,646 587,129
============ =========== =========== ===========
Per share data:
Net income per share $ 1.14 $ .78 $ 2.14 $ 1.63
============ =========== =========== ===========
Cash dividends declared per share $ .30 $ .30 $ 1.15 $ .95
============ =========== =========== ===========
</TABLE>
See Notes to the Financial Statements
-4-
<PAGE> 6
CHICAGO RIVET & MACHINE CO.
Statements of Retained Earnings
For the Six Months Ended June 30, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
June 30,
----------------------------
1995 1994
------- -------
<S> <C> <C>
Retained earnings at beginning
of period $14,067,745 $13,081,301
Net income for the six months ended 1,258,151 956,103
Treasury stock retired at cost (2,641) (2,633)
Cash dividends declared in the period -
$1.15 per share in 1995 and $.95 per
share in 1994. (674,645) (557,791)
----------- -----------
Retained earnings at end of period $14,648,610 $13,476,980
=========== ===========
</TABLE>
See Notes to the Financial Statements
-5-
<PAGE> 7
CHICAGO RIVET & MACHINE CO.
Statements of Cash Flows
For the Six Months Ended June 30, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
June 30,
-----------------------------
1995 1994
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,258,151 $ 956,103
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 333,165 322,594
Net gain on the sale of properties (1,109) (29,988)
Deferred income taxes (16,815) 5,359
Changes in current assets and current liabilities:
Accounts receivable, net (809,504) 291,651
Inventories 491,288 (284,806)
Accounts payable (207,442) (387,078)
Other, net 63,968 (100,447)
------------ -----------
Net cash provided by operating activities 1,111,702 773,388
------------ -----------
Cash flows from investing activities:
Capital expenditures (191,878) (220,886)
Net proceeds from the sale of properties 17,616 130,128
Proceeds from the maturity of
held-to-maturity securities 4,204,053 3,737,639
Purchases of held-to-maturity securities (5,466,127) (4,481,345)
------------ -----------
Net cash used by investing activities (1,436,336) (834,464)
------------ -----------
Cash flows from financing activities
Cash dividends (674,645) (557,791)
Purchase of Treasury Stock (2,920) (2,912)
------------ -----------
Net cash used by financing activities (677,565) (560,703)
------------ -----------
Net decrease in cash and
cash equivalents (1,002,199) (621,779)
Cash and cash equivalents at beginning
of period 2,225,445 1,896,696
------------ -----------
Cash and cash equivalents at end of period $ 1,223,246 $ 1,274,917
============ ===========
Cash paid during the period for:
Income taxes $ 932,000 $ 676,000
</TABLE>
See Notes to the Financial Statements
-6-
<PAGE> 8
CHICAGO RIVET & MACHINE CO.
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the
financial position of the Company as of June 30, 1995 and December 31,
1994 and the results of operations and changes in cash flow for the
indicated periods. The unaudited financial statements reflect certain
estimated inventories as of the end of the interim periods.
2. The results of operations for the six month period ending June 30,
1995 are not necessarily indicative of the results to be expected for
the year.
3. The Company is, from time to time, involved in litigation, including
environmental claims, in the normal course of business. With regard
to environmental claims, the Company, and a former subsidiary, W.S. &
W.C., Inc., have been named by state and/or federal government
agencies as "potentially responsible parties" with respect to certain
waste disposal sites. As a potentially responsible party, the
Company, or its former subsidiary, may be considered jointly and
severally liable, along with other potentially responsible parties,
for the cost of remediation of these waste sites. The actual cost of
remediation is presently unknown; however, estimates currently
available suggest that the cost of remediation at these sites will be
between $77 and $100 million. Despite the joint and several nature of
the liability, these proceedings are frequently resolved on the basis
of the quantity and type of waste disposed by the parties. The actual
amount of liability for the Company, and its former subsidiary, is
unknown due to disagreement concerning the allocation of
responsibility, uncertainties regarding the amount of contribution
that will be available from other parties and uncertainties related to
insurance coverage. After investigation of the quantities and type
of waste disposed at these sites, it is management's opinion that any
liability will not be material to the Company's financial condition.
Nevertheless, it is unlikely that the Company will not incur
significant costs associated with these proceedings and accordingly
the Company has recorded a liability of $575,000 related to these
matters. The adequacy of this reserve will be reviewed periodically
as more definitive cost information becomes available.
4. At June 30, 1995 significant deferred tax liabilities and assets were
comprised of the following:
<TABLE>
<S> <C>
Depreciation $(1,056,246)
-----------
(1,056,246)
Environmental accruals 230,083
Inventory valuations 209,461
Accrued vacation 144,956
Doubtful accounts 59,064
Unearned rental revenue 53,676
Other 63,118
-----------
760,358
-----------
$ (295,888)
-----------
</TABLE>
-7-
<PAGE> 9
CHICAGO RIVET & MACHINE CO.
NOTES TO THE FINANCIAL STATEMENTS (CON'T.)
(Unaudited)
5. Other Accrued Expenses - accrued expenses consist of the following:
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
------------- -----------------
<S> <C> <C>
Property taxes $ 70,059 $ 64,366
Environmental costs 574,858 513,583
All other items 158,177 24,245
---------- ---------
$ 803,094 $ 602,194
========== =========
</TABLE>
-8-
<PAGE> 10
CHICAGO RIVET & MACHINE CO.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
See the Company's Interim Report to Shareholders for the quarter ended
June 30, 1995 for a discussion and analysis of financial condition and results
of operations. This section is incorporated herein by reference. The Interim
Report is filed as an exhibit to this report on pages 12 and 13.
-9-
<PAGE> 11
PART II -- OTHER INFORMATION
Item 4. Submissions of Matters to a vote of Security Holders
Election of Directors. At the Annual Meeting, the Company's
stockholders elected the following nominees to the Company's Board of Directors,
each by the respective vote indicated to the right of such nominee's name:
<TABLE>
<CAPTION>
Authority
Nominee For Withheld
------- --- --------
<S> <C> <C>
Robert K. Brown 530,384 6,398
Stephen L. Levy 529,470 7,312
John R. Madden 529,970 6,812
John A. Morrissey 530,834 5,948
Walter W. Morrissey 530,634 6,148
John C. Osterman 530,834 5,948
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K -- No reports on Form 8-K were filed
during the three months ended June 30, 1995.
-10-
<PAGE> 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: August 11, 1995
John A. Morrissey
----------------------------------
Chairman of the Board of Directors
and Chief Executive Officer
Date: August 11, 1995
John C. Osterman
----------------------------------
President, Chief Operating
Officer and Treasurer (Principal
Financial Officer)
Date: August 11, 1995
Stephen D. Voss
----------------------------------
Assistant Treasurer and Controller
-11-
<PAGE> 13
E X H I B I T S
To Our Shareholders:
The comparative results of operations of Chicago Rivet & Machine Co. for
the second quarter and first six months of 1995 and 1994 are summarized below.
The Company recorded net sales and lease revenues of $6,982,747 during
the second quarter of 1995. This represents an increase of $1,075,483, or
approximately 18% over the year earlier period. First half revenues amounted to
$13,441,404 in 1995, which represents an increase of $1,673,493, or
approximately 14% compared with the first six months of 1994.
Net income amounted to $668,908 or $1.14 per share on 586,645 average
shares outstanding during the second quarter of 1995. This compares favorably
with the similar period in 1994, when earnings totaled $456,612 or $.78 per
share on 587,110 average shares outstanding. For the first half, 1995 earnings
totaled $1,258,151 or $2.14 per share on 586,646 average shares outstanding,
compared with 1994 earnings of $956,103 or $1.63 per share on 587,129 average
shares outstanding.
We are pleased that results for the quarter continue a three year
pattern of revenue and earnings growth when results are compared to the year
earlier period. Despite the strong second quarter performance, demand for our
products weakened considerably during the period. Contrary to reports that
economic conditions are firming, some of our major customers have instituted
workforce reductions and many have reduced production schedules for the months
ahead. The impact of this market weakness was mitigated by the fact that,
during the second quarter of 1995, several large orders for specialized
automatic assembly equipment were completed and this contributed significantly
to the excellent results achieved.
The Company's second half sales and earnings have traditionally been
weaker than those of the first half of the year, and we expect that to be the
case in 1995. Unless market conditions strengthen in the near future, the
difference between first and second half results may be somewhat more pronounced
this year than in the recent past. Our past success has been the result of our
ability to produce high quality products while maintaining a competitive cost
structure and we are confident that maintaining our focus on those principles
will contribute to future success.
Respectfully yours,
John A. Morrissey John C. Osterman
Chairman President
July 24, 1995
-12-
<PAGE> 14
CHICAGO RIVET & MACHINE CO.
Summary of Results of Operations
For the Three and Six months Ended June 30
<TABLE>
<CAPTION>
Second Quarter First Six Months
------------------------- -------------------------------
1995 1994 1995 1994
------------- ----------------------------------------
<S> <C> <C> <C> <C>
Net sales and lease revenue $6,982,747 $5,907,264 $13,441,404 $11,767,911
Income before taxes 1,115,908 790,612 2,132,151 1,616,103
Income after taxes 668,908 456,612 1,258,151 956,103
Net income per share 1.14 .78 2.14 1.63
Average shares outstanding 586,645 587,110 586,646 587,129
</TABLE>
(All figures subject to year end audit)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,223,246
<SECURITIES> 5,020,289
<RECEIVABLES> 3,829,726
<ALLOWANCES> 147,660
<INVENTORY> 3,853,248
<CURRENT-ASSETS> 14,931,294
<PP&E> 18,384,588
<DEPRECIATION> 12,859,064
<TOTAL-ASSETS> 20,502,660
<CURRENT-LIABILITIES> 3,186,708
<BONDS> 0
<COMMON> 1,173,096
0
0
<OTHER-SE> 15,109,490
<TOTAL-LIABILITY-AND-EQUITY> 20,502,660
<SALES> 13,180,570
<TOTAL-REVENUES> 13,441,404
<CGS> 8,738,219
<TOTAL-COSTS> 11,441,122
<OTHER-EXPENSES> (131,869)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,132,151
<INCOME-TAX> 874,000
<INCOME-CONTINUING> 1,258,151
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,258,151
<EPS-PRIMARY> 2.14
<EPS-DILUTED> 2.14
</TABLE>
