# Chicago Rivet & Machine Co: Form 10-Q for the period ended Mar 31, 2025

- Company: [Chicago Rivet & Machine Co](/companies/cvr.md) (CIK 19871)
- Form: 10-Q
- Filed: 2025-05-09
- Accepted by EDGAR: May 9, 2025, 15:50 ET
- Period: 2025-03-31
- Accession: 0000950170-25-067950
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/19871/000095017025067950/cvr-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/19871/000095017025067950/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $7.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $5.6m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $1.7m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $1.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $70.2k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $20.4k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $401.0k | us-gaap:NetIncomeLoss |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 966,132 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$2.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $42.7k | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $29.0k | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2025-03-31 | $765.6k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $13.1m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $24.1m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $2.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $3.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $20.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 12,881 characters.

*The following discussion and analysis 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 the section captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, and in other fillings we make with the Securities and Exchange Commission. These factors include, among other things: risk related to the Company's ability to continue as a going concern, conditions in the domestic and international 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, including the imposition of tariffs, the price and availability of raw materials, supply chain disruptions, labor relations issues and rising costs, losses related to product liability, warranty and recall claims, costs relating to compliance with environmental laws and regulations, information systems disruptions and the threat of cyber attacks, the loss of the services of our key employees, our indebtedness which could affect our financial flexibility, financial condition and competitive position, and our internal control over financial reporting where a material weakness was identified. 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 unless required under the federal securities laws.*

#### Results of Operations

Sales for the three months ended March 31, 2025 were $7,245,635 compared to $7,853,181 for the three months ended March 31, 2024, a decrease of $607,546 or 7.7%. Sales for both the fastener and assembly equipment segments decreased in the three months ended March 31, 2025 by $564,883 or 8.4%, and $42,663 or 3.8%, respectively, compared to the three months ended March 31, 2024. Although overall sales were down, gross margins improved year-over-year by $612,530 in the fastener segment, and $300,649, in the assembly equipment segment. The improvement in gross margins was driven by the continued implementation of a revised pricing structure started in 2024, reduction in certain operating costs, and increased efficiency following the consolidation of the Albia operations into the Tyrone manufacturing facility, which lowered production costs through enhanced economies of scale. In addition to the improvement in gross margins, year-over-year selling and administrative expenses were lower by $60,298 reflecting efforts at continued cost discipline and operational efficiency. Other income was also higher by $322,738 primarily driven by the sale of the Albia manufacturing facility which resulted in the recording of a one-time gain of $339,520. These factors collectively contributed to a net income of $401,022 or $0.42 per share in the three months ended March 31, 2025, compared to a net loss of $698,004 or $0.72 per share in the three months ended March 31, 2024

Fastener segment sales were $6,158,971 for the three months ended March 31, 2025 compared to $6,723,854 for the three months ended March 31, 2024, a decline of $564,883 or 8.4%. The automotive sector is the primary market for our fastener segment products, and sales to automotive customers were $3,798,658 for the three months ended March 31, 2025 compared to $4,629,190 for the three months ended March 31, 2024, a decrease of $830,532, or 17.9% primarily due to a slowdown in North American vehicle production and continued volatility across the Midwest automotive manufacturing sector. Industry-wide production fell sharply in January 2025, leading to reduced order volumes from key original equipment manufacturers. In addition, elevated interest rates and ongoing economic uncertainty contributed to softer consumer demand, prompting inventory adjustments and cautious procurement behavior among our automotive customers. In contrast, fastener segment sales to non-automotive customers, including those in the construction and electronics industries, were $2,360,313 for the three months ended March 31, 2025 compared to $2,094,564 for the three months ended March 31, 2024, an increase of $265,749 or 12.7% reflecting the successful execution of a strategic pivot by our sales team. In response to softening demand in the automotive sector, the sales team proactively expanded outreach to customers in industrial, construction, and consumer goods markets, which are segments that have historically demonstrated more stable demand profiles amid broader economic headwinds.

Assembly equipment segment sales were $1,086,664 for the three months ended March 31, 2025 compared to $1,129,327 for the three months ended March 31, 2024, a decrease of $42,663, or 3.8%. Both automotive and non-automotive assembly equipment sales decreased in this segment by $6,554 and $36,109, respectively, year-over-year. These modest declines reflect timing-related factors in customer purchasing cycles as well as project delays stemming from cautious capital investment trends across multiple industries. Although sales declined year-over-year, the assembly equipment gross margin increased by $300,649 during the period. This margin expansion reflects the Company’s ongoing efforts to enhance operational efficiency and reduce its cost structure, with the consolidation of the Albia operations into the Tyrone manufacturing facility yielding meaningful cost savings through streamlined workflows, increased capacity utilization, and reduced overhead.

Selling and administrative expenses were $1,587,567 for the three months ended March 31, 2025 compared to $1,647,865 for the three months ended March 31, 2024, a decrease of $60,298, or 3.7%, primarily due to higher professional fees more than offset by reduced salaries, commissions and provision for contingencies. Selling and administrative expenses were 21.9% and 21.0% of sales in the three months ended March 31, 2025 and 2024, respectively. The Company believes that it has made substantial progress in continuing to implement its plans to reduce costs and improve efficiency, and as the Company has now completed activities relating to the closure of the Albia facility, the Company plans to focus specifically on reducing certain selling and administrative expenses.

Other income for the three months ended March 31, 2025 was $351,207 compared to $28,469 for the three months ended March 31, 2024, an increase of $322,738 primarily driven by the sale of the Albia manufacturing facility which resulted in the recording of a one-time gain of $339,520. Other income was also comprised of interest income, which increased during the current quarter due to higher interest rates earned on short-term investments.

The Company’s effective tax rates were approximately 4.9% and 20.2% for the three months ended March 31, 2025 and 2024, respectively. See Note 5. Income taxes to the Condensed Consolidated Financial Statements included herein for additional information.

#### Liquidity and Capital Resources

Working capital was $10,730,266 as of March 31, 2025, compared to $10,371,215 at the beginning of the year, an increase of $359,051, or 3.5%.

The Company has incurred significant recurring operating losses primarily driven by continuous decline in revenues, recurring negative cash flows from operations and continued reduction in liquidity. The Company reported operating income of $70,174 and operating loss of $903,303 for the three months ended March 31, 2025 and 2024, respectively. The Company’s liquid assets at March 31, 2025 consist of cash and cash equivalents totaling $765,645. The Company’s declining revenues, recurring operating losses and negative cash flows, and continued reduction in liquidity, raise substantial doubt about the Company's ability to continue as a going concern within one year after the issuance date of these financial statements. In response, the Company has taken various strategic actions including (i) investing resources in the Company's sales efforts to increase revenues, including the recent hiring on May 1, 2025 of Mr. James T. Tanner as the Company's new Senior Vice President of Sales and Marketing, effective immediately. Mr. Tanner brings over 30 years of sales and leadership experience in manufacturing and spent over 10 years in the fastener industry, (ii) executing on the sale of Albia real estate in February 2025, which generated net cash proceeds of approximately $678,000, and the October 2024 consolidation of the Albia operations into the Tyrone manufacturing facility, enhancing economies of scale and contributing towards improved margins from cost reductions, and (iii) entering into a one-year, $3,000,000 operating credit agreement, renewable annually, and consisting of a (a) $2,500,000 revolving line of credit, and (b) $500,000 non-revolving line of credit, bearing interest at a fluctuating rate per annum equal to 1% plus the applicable prime rate, with a floor of 7% (the loan can be prepaid without penalty). The Company will continue to seek to enhance its sales efforts to further improve revenue, improve operating efficiency and enhance liquidity. The Company believes that if it successfully implements the foregoing strategic actions, it will mitigate the factors giving rise to substantial doubt, however, there is no guarantee that the Company will successfully implement these strategic actions. As a result, there remains substantial doubt regarding the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern, and they do not include any adjustments that might result from the outcome of this uncertainty.

As of March 31, 2025, the Company had an aggregate borrowing capacity under its committed revolving credit facility of $2,500,000. This facility includes certain financial covenants such as minimum profitability for the twelve months ending December 31, 2025, and minimum tangible net worth. As of March 31, 2025 the Company was in compliance with all such financial covenants. See Note 10. Debt to the Condensed Consolidated Financial Statements included herein for additional information.

On May 2, 2025, the Company borrowed $500,000 under its revolving line of credit to support working capital and general corporate purposes.

The Company also had outstanding total operating lease obligations of $429,810 of which $67,526 were classified as current within Other current liabilities in the Condensed Consolidated Balance Sheets. See Note 7. Leases to the Condensed Consolidated Financial Statements included herein for additional information.

#### Outlook for 2025

With respect to the Outlook for 2025, the economic environment remains challenging. Our order volume showed improvement in the first quarter of 2025 compared to the fourth quarter of 2024 but it is not yet at the levels we experienced in the first quarter of 2024. Significant uncertainty remains in the manufacturing sector as companies like ours continue to navigate the potential impacts of proposed tariffs and numerous market factors that may impact our business and the business of our customers in the coming year. In particular, we have taken the uncertainty created by tariffs as an opportunity to actively engage with both current and potential customers on ways in which we can work with them to help meet their needs in the current economic environment. We intend to remain actively engaged with current and potential customers to help strengthen relationships with existing customers and build relationships with new customers. In addition, the Company believes the actions taken in 2024 to reduce costs have better positioned the Company to manage the uncertainty noted above, and we will continue to seek efficiency improvements in our operations as well as appropriate price adjustments from customers while aggressively pursuing new sales opportunities to drive volume back to historic levels. We will also continue to actively monitor and analyze potential impacts from tariffs and other external factors so that we are positioned to take actions promptly and as necessary to address such potential impacts. We believe that our recent efficiency improvements and our focus on driving new sales, as well as our long term operating history in a very competitive global marketplace, quality products, and customer service, will provide the foundation for improved operating results in the future.

## Controls and procedures

As filed, 3,332 characters.

(a) Disclosure Controls and Procedures. The Company's management, with the participation of the Company's Chief Executive Officer and Chief 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 Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures were not effective due to the material weakness in internal control over financial reporting as described below.

#### Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As previously disclosed, a material weakness in internal control over financial reporting related to inventory valuation was identified in the Company’s internal control over financial reporting as of December 31, 2023 and 2024. Specifically, the Company did not design and maintain effective controls related to the review of the valuation of inventory.

#### Remediation Plans for Material Weakness Relating to Inventory Valuation

The Company’s management, under the oversight of the Audit Committee, is in the process of designing and implementing changes and enhancements in processes and controls to remediate the material weakness in internal control over financial reporting related to inventory valuation. Our enhanced design includes the timely review and update of new accounting standards and guidance applicable to inventory valuation as well as subsequent review and reconciliation of variance accounts.

This material weakness will not be considered remediated until management completes its remediation plans and the enhanced controls operate for a sufficient period of time and management has concluded, through testing, that the related controls are effective. The Company will monitor the effectiveness of its remediation plans and will continue to refine its remediation plans as appropriate.

Notwithstanding the material weakness noted above, the Company’s management, including the Company's Chief Executive Officer and Chief Financial Officer has concluded that our unaudited interim consolidated financial statements included in this Quarterly Report present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America.

(b) Changes in Internal Control Over Financial Reporting. Except as described above, 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 quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Filed May 9, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-067950. Last ingested by Listed: Oct 24, 2026, 14:52 ET. No prices; not investment advice.