<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 March 31, 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.
CLASS OUTSTANDING AT MARCH 31, 1995
COMMON STOCK, $2.00 PAR VALUE 586,648 SHARES
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Company's Interim Report to Shareholders for the Quarter
ended March 31, 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 March 31, 1995 2-3
and December 31, 1994.
Statements of Operations for the Three
Months Ended March 31, 1995 and 1994. 4
Statements of Retained Earnings for the
Three Months Ended March 31, 1995 and 1994. 5
Statements of Cash Flows for the Three
Months Ended March 31, 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 10-12
</TABLE>
<PAGE> 3
CHICAGO RIVET & MACHINE CO.
Balance Sheets
March 31, 1995 and December 31, 1994
Assets
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,929,170 $ 2,225,445
Certificates of deposit 2,497,115 2,126,240
U. S. Government securities, at amortized cost,
which approximates market 1,515,232 1,631,975
Accounts receivable - net of allowances 3,291,303 2,872,562
Inventories:
Raw materials 851,642 828,616
Work in process 1,205,785 1,172,978
Finished goods 2,408,445 2,342,942
----------- -----------
Total inventories 4,465,872 4,344,536
----------- -----------
Deferred income taxes (Note 4) 695,626 683,064
Other current assets 221,423 310,103
----------- -----------
Total Current Assets 14,615,741 14,193,925
----------- -----------
Goodwill, net of amortization 52,091 58,340
----------- -----------
Property, Plant and Equipment
At Cost:
Land and improvements 346,542 346,542
Buildings and improvements 3,711,612 3,704,730
Production equipment, leased
machines and other 14,242,328 14,179,089
----------- -----------
18,300,482 18,230,361
Less - Accumulated Depreciation 12,717,878 12,559,541
----------- -----------
Net Property, Plant and Equipment 5,582,604 5,670,820
----------- -----------
Total Assets $20,250,436 $19,923,085
=========== ===========
</TABLE>
See Notes to the Financial Statements
-2-
<PAGE> 4
CHICAGO RIVET & MACHINE CO.
Balance Sheets
March 31, 1995 and December 31, 1994
Liabilities and Shareholders' Equity
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(unaudited)
<S> <C> <C>
Current Liabilities:
Accounts payable $ 957,987 $ 1,144,529
Contributions due profit - sharing
and pension plans 122,853 322,309
Wages and salaries 660,421 638,565
Other accrued expenses (Note 5) 1,080,804 602,194
Unearned lease revenue 76,580 105,352
Federal and state income taxes 536,826 412,369
----------- -----------
Total Current Liabilities 3,435,471 3,225,318
Deferred Income Taxes (Note 4) 1,022,372 995,767
----------- -----------
Total Liabilities 4,457,843 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 586,648 1,173,296 1,173,296
Additional paid - in capital 460,959 460,959
Retained earnings 14,158,338 14,067,745
----------- -----------
Total Shareholders' Equity 15,792,593 15,702,000
----------- -----------
Commitments and Contingencies (Note 3) -- --
----------- -----------
Total Liabilities and Shareholders' Equity $20,250,436 $19,923,085
=========== ===========
</TABLE>
See Notes to the Financial Statements
-3-
<PAGE> 5
CHICAGO RIVET & MACHINE CO.
Statements of Operations
For the Three Months Ended March 31, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------
March 31,
1995 1994
----------- ------------
<S> <C> <C>
Net sales $ 6,327,461 $ 5,703,776
Lease revenue 131,196 156,871
----------- ------------
6,458,657 5,860,647
Cost of goods sold and costs
related to lease revenue 4,216,223 3,844,969
----------- ------------
Gross profit 2,242,434 2,015,678
Shipping, selling and
administrative expenses 1,217,026 1,202,840
Profit sharing and pension
expenses 75,000 48,000
----------- ------------
950,408 764,838
Other income and expenses:
Interest income from
U.S. Government securities
and certificates of deposit 71,344 35,964
Gain from sale of leased
machines and other equipment 579 30,870
Other income, net of other expense (6,088) (6,181)
----------- ------------
Income before income taxes 1,016,243 825,491
Provision for income taxes 427,000 326,000
----------- ------------
Net income $ 589,243 $ 499,491
=========== ============
Average common shares outstanding 586,648 587,148
=========== ============
Per share data:
Net income per share $ 1.00 $ .85
=========== ============
Cash dividends declared per share $ .85 $ .65
=========== ============
</TABLE>
See Notes to the Financial Statements
-4-
<PAGE> 6
CHICAGO RIVET & MACHINE CO.
Statements of Retained Earnings
For the Three Months Ended March 31, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
March 31,
-----------------------------
1995 1994
----------- -----------
<S> <C> <C>
Retained earnings at beginning
of period $14,067,745 $13,081,301
Net income for the three months ended 589,243 499,491
Cash dividends declared in the period -
$.85 and $.65 per share in 1995
and 1994, respectively (498,650) (381,647)
----------- -----------
Retained earnings at end of period $14,158,338 $13,199,145
=========== ===========
</TABLE>
See Notes to the Financial Statements
-5-
<PAGE> 7
CHICAGO RIVET & MACHINE CO.
Statements of Cash Flows
For the Three Months Ended March 31, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
March 31,
--------------------------------
1995 1994
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 589,243 $ 499,491
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 166,333 161,132
Net gain on the sale of properties (579) (30,870)
Deferred income taxes 14,043 13,489
Changes in current assets and current liabilities:
Accounts receivable, net (418,741) (206,254)
Inventories (121,336) (133,468)
Accounts payable (186,542) (190,322)
Other, net 162,719 (78,506)
------------- -------------
Net cash provided by operating activities 205,140 34,692
------------- -------------
Cash flows from investing activities:
Capital expenditures (75,464) (13,824)
Net proceeds from the sale of properties 4,175 99,860
Proceeds from the maturity of
held-to-maturity securities 2,451,494 1,950,030
Purchases of held-to-maturity securities (2,705,626) (1,537,768)
------------- -------------
Net cash provided (used) by investing activities (325,421) 498,298
------------- -------------
Cash flows from financing activities
Cash dividends declared (175,994) (176,145)
------------- -------------
Net cash used by financing activities (175,994) (176,145)
------------- -------------
Net increase (decrease) in cash and
cash equivalents (296,275) 356,845
Cash and cash equivalents at beginning
of period 2,225,445 1,896,696
------------- -------------
Cash and cash equivalents at end of period $ 1,929,170 $ 2,253,541
============= =============
Cash paid during the period for:
Income taxes $ 288,500 $ 285,000
</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 March 31, 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 three month period ending March 31,
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 $546,000 related to
these matters. The adequacy of this reserve will be reviewed periodically
as more definitive cost information becomes available.
4. At March 31, 1995 significant deferred tax liabilities and assets were
comprised of the following:
<TABLE>
<S> <C>
Depreciation $(1,043,419)
-----------
(1,043,419)
Environmental accruals 218,298
Inventory valuations 209,461
Accrued vacation 144,956
Doubtful accounts 57,790
Unearned rental revenue 30,632
Other 55,536
-----------
716,673
-----------
$ (326,746)
===========
</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>
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
Property taxes $ 83,466 $ 64,366
Environmental costs 545,744 513,583
Dividends payable 322,656 --
All other items 128,938 24,245
---------- ----------
$1,080,804 $ 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
March 31, 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 11 and 12.
-9-
<PAGE> 11
PART II -- OTHER INFORMATION
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 March 31, 1995.
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: May 12, 1995
John A. Morrissey
----------------------------------
Chairman of the Board of Directors
and Chief Executive Officer
Date: May 12, 1995
John C. Osterman
----------------------------------
President, Chief Operating
Officer and Treasurer (Principal
Financial Officer)
Date: May 12, 1995
Stephen D. Voss
----------------------------------
Assistant Treasurer and Controller
-10-
<PAGE> 12
E X H I B I T S
To Our Shareholders:
The comparative results of operations of Chicago Rivet & Machine Co.
for the first quarter of 1995 and 1994 are summarized below.
Net sales and lease revenues recorded during the first quarter of 1995
totaled $6,458,657. This represents an improvement of approximately 10% when
compared with $5,860,647 recorded during the first quarter of 1994. Revenues
from the sale of both fasteners and automatic rivet setting equipment have
improved compared with the same period of 1994. Revenues associated with the
sale of products acquired in connection with the Company's 1993 acquisition of
Textron's Townsend Automation Division continue to be a significant component of
the Company's revenues; however, the 1995 increase in revenues is entirely
attributable to increases in the sales of the Company's traditional products.
Net income amounted to $589,243 or $1.00 per share on 586,648 average
shares outstanding during the first quarter of 1995. This is an 18% improvement
over the first quarter of 1994, when net income totaled $499,491 or $.85 per
share on 587,148 average shares outstanding. The improvement in earnings is
largely a result of increased volumes and, to a lesser extent, incremental
improvements in operating efficiencies.
Our results for the first quarter demonstrate the Company's ability to
take advantage of opportunities that exist in our markets. Sales revenues
exceeded expectations as demand for our products continued to be relatively
strong. Although the level of incoming orders remains strong on an overall
basis, there are indications that business conditions may well soften in the
months ahead. If so, we would not anticipate that the balance of the year will
be as strong as the first quarter, but we are confident that 1995 will be
another good year for the Company.
The 1995 annual meeting of shareholders will be held at the Company's
headquarters in Naperville, Illinois at 10:00 AM on Tuesday, May 9, 1995. All
shareholders are cordially invited to attend. Formal notice of the meeting,
proxy materials and the Company's 1994 Annual Report to Shareholders were
distributed early in April. If you have not already completed and returned your
proxy, we ask that you do so at your earliest convenience. Thank you.
Respectfully yours,
John A. Morrissey John C. Osterman
Chairman President
April 26, 1995
-11-
<PAGE> 13
- - - - --------------------------------------------------------------------------------
CHICAGO RIVET & MACHINE CO.
Summary of Results of Operations
<TABLE>
<CAPTION>
For the Three Months
Ended:
March 31, March 31,
1995 1994
----------- -----------
<S> <C> <C>
Net sales and lease revenue .................... $ 6,458,657 $ 5,860,647
Income before taxes ............................ 1,016,243 825,491
Income after taxes ............................. 589,243 499,491
Net income per share............................ 1.00 .85
Average shares outstanding...................... 586,648 587,148
- - - - ----------------------------------------------------------------------------------------------
</TABLE>
(All figures subject to year end audit)
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,929,170
<SECURITIES> 4,012,347
<RECEIVABLES> 3,435,778
<ALLOWANCES> 144,475
<INVENTORY> 4,465,872
<CURRENT-ASSETS> 14,615,741
<PP&E> 18,300,482
<DEPRECIATION> 12,717,878
<TOTAL-ASSETS> 20,250,436
<CURRENT-LIABILITIES> 3,435,471
<BONDS> 0
<COMMON> 1,173,296
0
0
<OTHER-SE> 14,619,297
<TOTAL-LIABILITY-AND-EQUITY> 20,250,436
<SALES> 6,327,461
<TOTAL-REVENUES> 6,458,657
<CGS> 4,216,223
<TOTAL-COSTS> 5,508,249
<OTHER-EXPENSES> (65,835)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,016,243
<INCOME-TAX> 427,000
<INCOME-CONTINUING> 589,243
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 589,243
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
</TABLE>
