Chicago Rivet & Machine Co 10-Q for FY2022 Q2
Chicago Rivet & Machine Co (CVR)
About this 10-Q
Chicago Rivet & Machine Co filed this 10-Q on August 5, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).
Headline figures
Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $9.02M
- up 7.9% from $8.36M a year earlier
- Net income
- $153.9K
- down 51.8% from net income of $319.51K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________________________
FORM
_________________________________
(Mark One)
For the quarterly period ended
OR
o 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
_________________________________
(Exact Name of Registrant as Specified in Its Charter)
|
|
(Address of Principal Executive Offices) |
(Zip Code) |
(
Registrant’s Telephone Number, Including Area Code
_________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
(Trading privileges only, not registered) |
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.
Indicate by check mark whether the registrant has submitted electronically, every interactive data file required to be submitted 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 such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer o |
Accelerated filer o |
Smaller reporting company | |
|
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 4, 2022, there were
CHICAGO RIVET & MACHINE CO.
INDEX
1
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
CHICAGO RIVET & MACHINE CO. | |||
Condensed Consolidated Balance Sheets | |||
|
|
|
|
|
June 30, 2022 (Unaudited) |
|
December 31, 2021 |
Assets |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
|
$ |
Certificates of deposit |
|
||
Accounts receivable - Less allowances of $ |
|
||
Inventories, net |
|
||
Prepaid income taxes |
|
||
Other current assets |
|
||
|
|
|
|
Total current assets |
|
||
|
|
|
|
Property, Plant and Equipment: |
|
|
|
Land and improvements |
|
||
Buildings and improvements |
|
||
Production equipment and other |
|
||
|
|
||
Less accumulated depreciation |
|
||
Net property, plant and equipment |
|
||
|
|
|
|
Total assets |
$ |
|
$ |
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
Accounts payable |
$ |
|
$ |
Accrued wages and salaries |
|
||
Other accrued expenses |
|
||
Unearned revenue and customer deposits |
|
||
Federal and state income taxes |
|
||
Total current liabilities |
|
||
|
|
|
|
Deferred income taxes |
|
||
|
|
|
|
Total liabilities |
|
||
|
|
|
|
Commitments and contingencies (Note 3) |
|
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
Preferred stock, |
|
||
Common stock, $ |
|
||
Additional paid-in capital |
|
||
Retained earnings |
|
||
Treasury stock, 171,964 shares at cost |
( |
|
( |
Total shareholders' equity |
|
||
|
|
|
|
Total liabilities and shareholders' equity |
$ |
|
$ |
|
|
|
|
|
|
|
|
See Notes to the Condensed Consolidated Financial Statements |
|
| |
2
CHICAGO RIVET & MACHINE CO. | ||||||||
Condensed Consolidated Statements of Income (Unaudited) | ||||||||
| ||||||||
Three Months Ended June 30, 2022 |
|
Three Months Ended June 30, 2021 |
|
Six Months Ended June 30, 2022 |
|
Six Months Ended June 30, 2021 | ||
Net sales |
$ |
|
$ |
|
$ |
|
$ | |
Cost of goods sold |
|
|
|
|||||
|
|
|
|
|
|
|
| |
Gross profit |
|
|
|
|||||
Selling and administrative expenses |
|
|
|
|||||
|
|
|
|
|
|
|
| |
Operating profit |
|
|
|
|||||
|
|
|
|
|
|
|
| |
Other income |
|
|
|
|||||
|
|
|
|
|
|
|
| |
Income before income taxes |
|
|
|
|||||
Provision for income taxes |
|
|
|
|||||
|
|
|
|
|
|
|
| |
Net income |
$ |
|
$ |
|
$ |
|
$ | |
|
|
|
|
|
|
|
| |
Per share data: |
|
|
|
|
|
|
| |
Basic net income per share |
$ |
|
$ |
|
$ |
|
$ | |
Diluted net income per share |
$ |
|
$ |
|
$ |
|
$ | |
|
|
|
|
|
|
|
| |
Weighted average common shares outstanding: | ||||||||
Basic |
|
|
|
|||||
Diluted |
|
|
|
|||||
|
|
|
|
|
|
|
| |
Cash dividends declared per share |
$ |
|
$ |
|
$ |
|
$ | |
|
|
|
|
|
|
|
| |
See Notes to the Condensed Consolidated Financial Statements | ||||||||
3
CHICAGO RIVET & MACHINE CO. | ||||||||
Consolidated Statements of Shareholders’ Equity (Unaudited) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
Treasury Stock, At Cost |
| ||
Preferred Stock Amount |
Shares |
Amount |
Additional Paid-In Capital |
Retained Earnings |
Shares |
Amount |
Total Shareholders’ Equity | |
|
|
|
|
|
|
|
|
|
Balance, December 31, 2021 |
$ |
$ |
$ |
$ |
$( |
$ | ||
Net income |
|
|
|
|
|
|
||
Dividends declared ($ |
|
|
|
|
( |
|
|
( |
Balance, March 31, 2022 |
$ |
$ |
$ |
$ |
$( |
$ | ||
Net income |
|
|
|
|
|
|
||
Dividends declared ($ |
|
|
|
|
( |
|
|
( |
Balance, June 30, 2022 |
$ |
$ |
$ |
$ |
$( |
$ | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2020 |
$ |
$ |
$ |
$ |
$( |
$ | ||
Net income |
|
|
|
|
|
|
||
Dividends declared ($ |
|
|
|
|
( |
|
|
( |
Balance, March 31, 2021 |
$ |
$ |
$ |
$ |
|
$( |
$ | |
Net income |
|
|
|
|
|
|
||
Dividends declared ($ |
|
|
|
|
( |
|
|
( |
Balance, June 30, 2021 |
$ |
$ |
$ |
$ |
|
$( |
$ | |
|
|
|
|
|
|
|
|
|
See Notes to the Condensed Consolidated Financial Statements. | ||||||||
4
CHICAGO RIVET & MACHINE CO. | |||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
|
|
|
|
|
Six Months Ended June 30, 2022 |
|
Six Months Ended June 30, 2021 |
Cash flows from operating activities: |
|
|
|
Net income |
$ |
|
$ |
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
Depreciation |
|
||
Loss on disposal of equipment |
|
||
Deferred income taxes |
( |
|
( |
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
( |
|
( |
Inventories |
( |
|
( |
Other current assets |
( |
|
|
Accounts payable |
|
||
Accrued wages and salaries |
|
||
Other accrued expenses |
|
||
Unearned revenue and customer deposits |
( |
|
( |
Net cash used in operating activities |
( |
|
( |
|
|
|
|
Cash flows from investing activities: |
|
|
|
Capital expenditures |
( |
|
( |
Proceeds from certificates of deposit |
|
||
Purchases of certificates of deposit |
|
( | |
Net cash provided by (used in) investing activities |
( |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
Cash dividends paid |
( |
|
( |
Net cash used in financing activities |
( |
|
( |
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
( |
|
|
Cash and cash equivalents at beginning of period |
|
||
Cash and cash equivalents at end of period |
$ |
|
$ |
|
|
|
|
The accompanying notes are an integral part of the Consolidated Financial Statements. | |||
5
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 June 30, 2022 (unaudited) and December 31, 2021 (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, 2021.
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 six month period ended June 30, 2022 are not necessarily indicative of the results to be expected for the year.
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. Revenue - The Company operates in the fastener industry and is in the business of manufacturing and selling rivets, cold-formed fasteners and parts, screw machine products, automatic rivet setting machines and parts and tools for such machines. Revenue is recognized when control of the promised goods or services is transferred to our customers, generally upon shipment of goods or completion of services, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. For certain assembly equipment segment transactions, revenue is recognized based on progress toward completion of the performance obligation using a labor-based measure. Labor incurred and specific material costs are compared to milestone payments per sales contract. Based on our experience, this method most accurately reflects the transfer of goods under such contracts. During the second quarter of 2022, the Company did not realize any revenue related to such contracts. As of June 30, 2022, there are no such contracts outstanding.
Sales taxes we may collect concurrent with revenue producing activities are excluded from revenue. Revenue is recognized net of certain sales adjustments to arrive at net sales as reported on the statement of income. These adjustments primarily relate to customer returns and allowances. The Company records a liability and reduction in sales for estimated product returns based upon historical experience. If we determine that our obligation under warranty claims is probable and subject to reasonable determination, an estimate of that liability is recorded as an offset against revenue at that time. As of June 30, 2022 and December 31, 2021 reserves for warranty claims were not material. Cash received by the Company prior to shipment is recorded as unearned revenue.
Shipping and handling fees billed to customers are recognized in net sales, and related costs as cost of sales, when incurred.
Sales commissions are expensed when incurred because the amortization period is less than one year. These costs are recorded within selling and administrative expenses in the statement of income.
6
The following table presents revenue by segment, further disaggregated by end-market:
|
Fastener |
Assembly Equipment |
Consolidated |
Three Months Ended June 30, 2022: |
|
|
|
Automotive |
$ |
$ |
$ |
Non-automotive |
|||
Total net sales |
$ |
$ |
$ |
|
|
|
|
Three Months Ended June 30, 2021: |
|
|
|
Automotive |
$ |
$ |
$ |
Non-automotive |
|||
Total net sales |
$ |
$ |
$ |
|
|
|
|
Six Months Ended June 30, 2022: |
|
|
|
Automotive |
$ |
$ |
$ |
Non-automotive |
|||
Total net sales |
$ |
$ |
$ |
|
|
|
|
Six Months Ended June 30, 2021: |
|
|
|
Automotive |
$ |
$ |
$ |
Non-automotive |
|||
Total net sales |
$ |
$ |
$ |
|
|
|
|
The following table presents revenue by segment, further disaggregated by location:
|
Fastener |
Assembly Equipment |
Consolidated |
Three Months Ended June 30, 2022: |
|
|
|
United States |
$ |
$ |
$ |
Foreign |
|||
Total net sales |
$ |
$ |
$ |
|
|
|
|
Three Months Ended June 30, 2021: |
|
|
|
United States |
$ |
$ |
$ |
Foreign |
|||
Total net sales |
$ |
$ |
$ |
|
|
|
|
Six Months Ended June 30, 2022: |
|
|
|
United States |
$ |
$ |
$ |
Foreign |
|||
Total net sales |
$ |
$ |
$ |
|
|
|
|
Six Months Ended June 30, 2021: |
|
|
|
United States |
$ |
$ |
$ |
Foreign |
|||
Total net sales |
$ |
$ |
$ |
|
|
|
|
7
5. The Company’s effective tax rates were approximately 21.0% and 21.4% for the second quarter of 2022 and 2021, respectively, and 21.4% and 21.6% for the six months ended June 30, 2022 and 2021, respectively.
The Company’s federal income tax returns for the 2018 through 2021 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 2018 through 2021 federal income tax returns will expire on September 15, 2022 through 2025, respectively.
The Company’s state income tax returns for the 2018 through 2021 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2025. The Company is not currently under examination by any state authority for income tax purposes and no statutes for state income tax filings have been extended.
6. 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:
|
June 30, 2022 |
|
December 31, 2021 |
Raw material |
$ |
|
$ |
Work-in-process |
|
||
Finished goods |
|
||
Inventories, gross |
|
||
Valuation reserves |
( |
|
( |
Inventories, net |
$ |
|
$ |
8
7. Segment Information—The Company operates in two business segments as determined by its products. The fastener segment includes rivets, cold-formed fasteners and parts 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 June 30, 2022: |
|
|
|
|
Net sales |
$ |
$ |
$ 9,023,398 | |
|
|
|
|
|
Depreciation |
320,424 | |||
|
|
|
|
|
Segment operating profit |
690,542 | |||
Selling and administrative expenses |
( |
(497,736) | ||
Interest income |
2,098 | |||
Income before income taxes |
|
|
|
$ 194,904 |
|
|
|
|
|
Capital expenditures |
91,109 | |||
|
|
|
|
|
Segment assets: |
|
|
|
|
Accounts receivable, net |
6,842,227 | |||
Inventories, net |
9,615,373 | |||
Property, plant and equipment, net |
12,044,719 | |||
Other assets |
4,028,553 | |||
|
|
|
|
$ 32,530,872 |
|
|
|
|
|
Three Months Ended June 30, 2021: |
|
|
|
|
Net sales |
$ |
$ |
$ 8,364,390 | |
|
|
|
|
|
Depreciation |
330,324 | |||
|
|
|
|
|
Segment operating profit |
914,640 | |||
Selling and administrative expenses |
( |
(512,526) | ||
Interest income |
4,393 | |||
Income before income taxes |
|
|
|
$ 406,507 |
|
|
|
|
|
Capital expenditures |
228,750 | |||
|
|
|
|
|
Segment assets: |
|
|
|
|
Accounts receivable, net |
5,909,978 | |||
Inventories, net |
7,056,669 | |||
Property, plant and equipment, net |
12,819,527 | |||
Other assets |
6,635,401 | |||
|
|
|
|
$ 32,421,575 |
|
|
|
|
|
Six Months Ended June 30, 2022: |
|
|
|
|
Net sales |
$ |
$ |
$ 18,221,094 | |
|
|
|
|
|
Depreciation |
640,848 | |||
|
|
|
|
|
Segment operating profit |
1,758,428 | |||
Selling and administrative expenses |
( |
(997,064) | ||
Interest income |
3,853 | |||
Income before income taxes |
|
|
|
$ 765,217 |
|
|
|
|
|
Capital expenditures |
211,703 | |||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021: |
|
|
|
|
Net sales |
$ |
$ |
$ 17,669,339 | |
|
|
|
|
|
Depreciation |
660,489 | |||
|
|
|
|
|
Segment operating profit |
2,138,498 | |||
Selling and administrative expenses |
( |
(1,056,298) | ||
Interest income |
14,435 | |||
Income before income taxes |
|
|
|
$ 1,096,635 |
|
|
|
|
|
Capital expenditures |
345,213 | |||
|
|
|
|
|
9
CHICAGO RIVET & MACHINE CO.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations
Net sales for the second quarter of 2022 were $9,023,398 compared to $8,364,390 in the second quarter of 2021, an increase of $659,008, or 7.9%. For the first half of 2022, net sales totaled $18,221,094 compared to $17,669,339 in the first half of 2021, an increase of $551,755, or 3.1%. Net income for the second quarter of 2022 was $153,904, or $0.16 per share compared to $319,507, or $0.33 per share in the second quarter of 2021. The decline in net income in the quarter was primarily due to higher operating costs in the current year, especially related to raw materials, transportation and labor. Net income for the first half of 2022 was $601,217, or $0.62 per share, compared to net income of $859,635, or $0.89 per share, for the same period in 2021.
Fastener segment revenues were $8,059,612 in the second quarter of 2022 compared to $7,142,044 reported in the second quarter of 2021, an increase of $917,568, or 12.8%. For the first six months of 2022, fastener segment revenues were $16,213,445 compared to $15,290,722 in the first half of 2021, an increase of $922,723, or 6.0%. The automotive sector is the primary market for our fastener segment products and sales to automotive customers were $4,550,809 in the second quarter this year compared to $4,091,087 in the second quarter of 2021, an increase of $459,722, or 11.2%. Sales to automotive customers were $9,454,992 for the first six months of 2022 compared to $9,150,556 for the first six months of 2021, an increase of $304,436, or 3.3%. North American light vehicle sales continue to be constrained by shortages of critical components. As of the end of the second quarter, light vehicle sales were down 18.3% compared to the same period a year earlier. Fastener segment sales to non-automotive customers were $3,508,803 in the second quarter of this year compared to $3,050,957 in the second quarter of 2021, an increase of $457,846, or 15.0%. Sales to non-automotive customers for the first six months of the current year were $6,758,453 compared to $6,140,166 for the first six months of 2021, an increase of $618,287, or 10.1%. The increase in sales during the second quarter and year-to-date were offset by higher operating costs as historically high inflation negatively impacted raw material, labor and most other operating costs. As a result, second quarter fastener segment gross profit was $1,191,472 compared to $1,261,592 in 2021, a decline of $70,120. On a year-to-date basis, fastener segment gross profit was $2,750,381 compared to $2,918,221 in the first half of 2021, a decline of $167,840.
Assembly equipment segment revenues were $963,786 in the second quarter of 2022 compared to $1,222,346 in the second quarter of 2021, a decline of $258,560, or 21.2%. For the first half of 2022, assembly equipment segment revenues were $2,007,649 compared to $2,378,617 for the first half of 2021, a decline of $370,968, or 15.6%. The second quarter and year-to-date decline in revenue was primarily due to a lower average selling price on machines sold in the current year, as the first half of 2021 included a number of high-dollar value specialty machines. Lower sales, along with higher operating costs, contributed to a decline in segment gross profit for the quarter and the first half of 2022. Assembly equipment segment gross profit for the second quarter of 2022 was $254,905 compared to $415,485 in the second quarter of 2021, a decline of $160,580. For the first half of 2022, gross profit was $552,218 compared to $793,293 in 2021, a decline of $241,075.
Selling and administrative expenses for the second quarter of 2022 were $1,263,921 compared to $1,284,748 in the second quarter of 2021, a reduction of $20,827, or 1.6%. While salaries were approximately $56,000 lower in the current year quarter, that reduction was offset by a $58,000 increase in outside consulting related to recruiting and technology services. Profit sharing expense decreased $22,000 in the second quarter due to the lower operating profit in the current year. For the first six months of 2022, selling and administrative expenses were $2,559,585 compared to $2,646,949 in the first half of 2021, a decrease of $87,364, or 3.3%. The net reduction in the first half of 2022 primarily relates to the same items as in the second quarter. Salaries declined approximately $87,000 during the first half of 2022 compared to the same period a year earlier, but was partially offset by a $64,000 increase in outside consulting. Profit sharing expense declined $29,000 due to lower operating profit in the current year. Selling and administrative expenses as a percentage of net sales for the first half of 2022 were reduced to 14.0%, from 15.0%, in the first half of 2021.
Other Income
Other income in the second quarter of 2022 was $12,448, compared to $14,178 in the second quarter of 2021. Other income for the first six months of 2022 was $22,203, compared to $32,070 in the first six months of 2021. The declines were primarily due to a reduction in interest income on certificates of deposit due to lower balances invested in the current year.
Income Tax Expense
The Company’s effective tax rates were approximately 21.0% and 21.4% for the second quarter of 2022 and 2021, respectively. The Company’s effective tax rates were approximately 21.4% and 21.6% for the six months ended June 30, 2022 and 2021, respectively.
Liquidity and Capital Resources
Working capital improved to $17,980,849 as of June 30, 2022 from $17,421,585 at the beginning of the year. During the first half of 2022, accounts receivable increased by $1,194,243, due to the greater sales activity compared to the fourth quarter of 2021, and inventory increased by $1,095,593 due to higher raw material prices and an increase in quantities on hand to minimize supply disruptions. Partially offsetting these changes were increases in accounts payable and accrued expenses related to the greater level of operating activity during the current year. Other items reducing working capital in the first half of 2022 were capital expenditures of $211,703, which consisted primarily of equipment used in fastener production activities, and dividends paid of $425,098. These changes and other cash flow activity resulted in a balance of cash, cash equivalents and certificates of deposit of $3,603,732 as of June 30, 2022 compared to $4,777,954 as of the beginning of the year. Management believes that current cash, cash equivalents and operating cash flow will provide adequate working capital for the next twelve months.
Results of Operations Summary
Results in the second quarter reflected steady demand overall. While sales declined 1.9% compared to the first quarter, they improved 7.9% compared to the second quarter of 2021. This is despite continued constrained demand from our automotive customers due to the global microchip shortage. More significantly, we have experienced higher operating costs related to historically high inflation, a tight labor market and ongoing supply chain disruptions. Cost increases can be difficult to recover and are expected to persist while supply constraints exist. These factors, as well as lingering uncertainties related to COVID-19, are expected to continue to present challenges in the near-term. As we face these challenges, we will make adjustments to our activities which we believe are necessary based on market conditions, while continuing to pursue opportunities to develop new customer relationships and build on existing ones in all the markets we serve.
Forward-Looking Statements
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: risk related to the COVID-19 pandemic and its related adverse effects, conditions in the domestic automotive industry, upon which we rely for sales revenue, the intense competition in our markets, the concentration of our sales with major customers, risks related to export sales, the price and availability of raw materials, supply chain disruptions, labor relations issues, losses related to product liability, warranty and recall claims, costs relating to environmental laws and regulations, information systems disruptions, the loss of the services of our key employees and difficulties in achieving 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.
10
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.
11
PART II -- OTHER INFORMATION
Item 6. Exhibits
31Rule 13a-14(a) or 15d-14(a) Certifications
31.1Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32Section 1350 Certifications
32.1Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
32.2Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).
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 5, 2022
/s/ Walter W. Morrissey
Walter W. Morrissey
Chairman of the Board of Directors
and Chief Executive Officer
(Principal Executive Officer)
Date: August 5, 2022
/s/ Michael J. Bourg
Michael J. Bourg
President, Chief Operating
Officer and Treasurer
(Principal Financial Officer)
13
EXHIBIT 31.1
I, Walter W. 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: August 5, 2022/s/ Walter W. Morrissey
Walter W. Morrissey
Chief Executive Officer
(Principal Executive Officer)
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: August 5, 2022/s/ Michael J. Bourg
Michael J. Bourg
President, Chief Operating Officer
and Treasurer (Principal Financial Officer)
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 June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Walter W. 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/ Walter W. Morrissey
Name: Walter W. Morrissey
Title: Chief Executive Officer
(Principal Executive Officer)
Date: August 5, 2022
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 June 30, 2022 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: August 5, 2022