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EXHIBIT 19.1
To Our Shareholders:
The comparative results of operations of Chicago Rivet & Machine Co.
for the second quarter and first six months of 2000 and 1999 are summarized
below.
Net sales and lease revenues for the second quarter of 2000 totaled
$12,366,088, a decrease of approximately 4.4% compared to the same period in
1999. Revenues in the assembly equipment segment were approximately 16% lower
than those recorded during the second quarter of 1999, and amounted to
$2,543,405, while revenues from the fastener segment declined less than 1%
compared with the year earlier period and totaled $9,822,683.
Net income for the second quarter of 2000 amounted to $894,713 or $.89
per share on 1,003,080 average shares outstanding during the quarter. On a year
to date basis, net income amounted to $1,816,148 or $1.70 per share on 1,070,588
average shares outstanding during the first six months of 2000. While earnings
for both the second quarter and the first half compare favorably with 1999, it
should be noted that 1999 results include an after tax charge of $623,000 in
connection with a product recall. Earnings were impacted by the continued
softness in the demand for our products, especially within the assembly
equipment segment where margins have historically been higher than those of the
fastener segment. Successful efforts to control costs of manufacture within the
fastener segment were able to offset much of the impact of reduced sales volumes
at the gross margin level. Selling and administrative expenses increased by
$204,000 compared to the second quarter of 1999. The primary factors that
contributed to this change were costs associated with the previously reported
"Dutch auction" tender offer and those incurred in connection with the ongoing
implementation of new data processing systems and software. The data processing
initiative is now entering its final stages, and, while it has taken longer than
originally anticipated, the Company is beginning to enjoy many of the
anticipated benefits associated with this project.
Throughout the first half of 2000, activity in our markets has trailed
the robust levels of 1999, and we expect that trend to continue throughout the
balance of the year. Despite that softness, we have been able to post solid
operating results due, in part, to ongoing efforts to reduce expenses and
improve efficiencies. Although we anticipate that certain administrative
expenses will continue to be higher than normal for the remainder of the year
due to consulting and other data processing implementation expenses, we believe
that results for the year should be respectable, barring any unforeseen
developments.
Respectfully yours,
John A. Morrissey John C. Osterman
Chairman President
July 31, 2000
The foregoing discussion is only intended to provide highlights of operations
for the periods covered. Additional information is contained in our Form 10-Q
which will be filed with the SEC and is available to shareholders on request
from the Company, or via the internet through the SEC's EDGAR database. This
discussion contains certain "forward-looking statements" which are inherently
subject to risks and uncertainties that may cause actual events to differ
materially from those discussed herein. Factors which may cause such differences
in events include, among other things, fluctuations in general economic
conditions, consumer demand, the gain or loss of a key customer, and the price
and availability of the Company's primary raw materials. Therefore, readers are
cautioned not to place undue reliance upon such forward-looking statements.
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CHICAGO RIVET & MACHINE CO.
SUMMARY OF CONSOLIDATED RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30
<TABLE>
<CAPTION>
SECOND QUARTER FIRST SIX MONTHS
------------------------- -------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales and lease revenue $12,366,088 $12,933,690 $24,801,824 $25,451,170
Income before taxes 1,335,713 720,112 2,748,148 2,460,572
Income after taxes 894,713 481,112 1,816,148 1,633,572
Net income per share .89 .42 1.70 1.42
Average shares outstanding 1,003,080 1,152,832 1,070,588 1,153,162
</TABLE>
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(All figures subject to year end audit)
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