CHICAGO RIVET & MACHINE CO (Form: 10-K, Received: 03/29/2005 12:27:20)

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934

            For the fiscal year ended December 31, 2004
                                OR

[ ]      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 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
     Incorporation or Organization)                           Identification No.)

901 Frontenac Road, Naperville, Illinois                             60563
(Address of Principal Executive Offices)                           (Zip Code)

Registrant's telephone number, including area code (630) 357-8500

Securities registered pursuant to Section 12(b) of the Act:

TITLE OF EACH CLASS Common Stock -- $1.00 Par Value
(including Preferred Stock Purchase Rights)

NAME OF EACH EXCHANGE
ON WHICH REGISTERED
American Stock Exchange
(Trading privileges only, not registered)

Securities registered pursuant to Section 12(g) of the Act: None

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 BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K.

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS

DEFINED IN EXCHANGE ACT RULE 12B-2). YES ____ NO X

THE AGGREGATE MARKET VALUE OF COMMON STOCK HELD BY NON-AFFILIATES OF THE

REGISTRANT AS OF JUNE 30, 2004 WAS $21,567,015.

AS OF MARCH 24, 2005 966,132 SHARES OF THE REGISTRANT'S COMMON STOCK WERE
OUTSTANDING.

DOCUMENTS INCORPORATED BY REFERENCE

(1) PORTIONS OF THE COMPANY'S ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2004 (THE "2004 REPORT") ARE INCORPORATED BY REFERENCE IN PARTS I, II AND IV OF THIS REPORT.

(2) PORTIONS OF THE COMPANY'S DEFINITIVE PROXY STATEMENT WHICH IS TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE COMPANY'S 2005 ANNUAL MEETING OF SHAREHOLDERS ARE INCORPORATED BY REFERENCE IN

PART III OF THIS REPORT.

CHICAGO RIVET & MACHINE CO.
PERIOD ENDING DECEMBER 31, 2004

Item                                                                   Page
 No.                                                                    No.
----                                                                   ----
                                     Part I

1.   Business                                                            3
2.   Properties                                                          4
3.   Legal Proceedings                                                   4
4.   Submission of Matters to a Vote of Security Holders                 4

                                    Part II

5.   Market for Registrant's Common Equity, Related Stockholder
       Matters and Issuer Purchases of Equity Securities                 6
6.   Selected Financial Data                                             6
7.   Management's Discussion and Analysis of Financial Condition
       and Results of Operations                                         6
7a.  Quantitative and Qualitative Disclosures About Market Risk         11
8.   Financial Statements and Supplementary Data                        12
9.   Changes in and Disagreements with Accountants on Accounting
       and Financial Disclosure                                         12
9a.  Controls and Procedures                                            12

                                    Part III

10.  Directors and Executive Officers of the Registrant                 12
11.  Executive Compensation                                             13
12.  Security Ownership of Certain Beneficial Owners and
       Management and Related Stockholder Matters                       13
13.  Certain Relationships and Related Transactions                     13
14.  Principal Accountant Fees and Services                             13

                                    Part IV

15.  Exhibits and Financial Statement Schedules                         14

PART I

ITEM 1 - BUSINESS

Chicago Rivet & Machine Co. (the "Company") was incorporated under the laws of the State of Illinois in December 1927, as successor to the business of Chicago Rivet & Specialty Co. The Company operates in two segments of the fastener industry: fasteners and assembly equipment. The fastener segment consists of the manufacture and sale of rivets, cold-formed fasteners and parts and screw machine products. The assembly equipment segment consists primarily of the manufacture of automatic rivet setting machines, automatic assembly equipment, parts and tools for such machines, and the leasing of automatic rivet setting machines. For further discussion regarding the Company's operations and segments see Note 10 of the financial statements which appears on pages 9 and 10 of the Company's 2004 Annual Report to Shareholders. The 2004 Annual Report is filed as an exhibit to this report.

The principal market for the Company's products is the North American automotive industry. Sales are solicited by employees and by independent sales representatives.

The segments in which the Company operates are characterized by active and substantial competition. No single company dominates the industry. The Company's competitors include both larger and smaller manufacturers, and segments or divisions of large, diversified companies with substantial financial resources. Principal competitive factors in the market for the Company's products are quality, service, reliability and price.

The Company serves a variety of customers. Revenues are primarily derived from sales to customers involved, directly or indirectly, in the manufacture of automobiles and automotive components. Information concerning backlog of orders is not considered material to the understanding of the Company's business due to relatively short production cycles. The level of business activity for the Company is closely related to the overall level of industrial activity in the United States. During 2004, sales to two customers exceeded 10% of the Company's consolidated revenues. Sales to Fisher & Company accounted for approximately 22%, 21% and 17% of the Company's consolidated revenues in 2004, 2003, and 2002, respectively. Sales to TI Group Automotive Systems Corporation accounted for approximately 13% of the Company's consolidated revenues in 2004, 13% in 2003 and 18% in 2002.

The Company's business has historically been stronger during the first half of the year.

The Company purchases raw material from a number of sources, primarily within the United States. There are numerous sources of raw material, and the Company does not have to rely on a single source for any of its requirements. Beginning early in 2004, the cost of raw materials used in the manufacture of fasteners escalated sharply due to increased global demand, primarily in Asia.

Patents, trademarks, licenses, franchises and concessions are not of significant importance to the business of the Company.

The Company does not engage in significant research activities, but rather in ongoing product improvement and development. The amounts spent on product development activities in the last three years were not material.

At December 31, 2004, the Company employed 296 people.

The Company has no foreign operations, and sales to foreign customers represent only a minor portion of the Company's total sales.

ITEM 2 - PROPERTIES

The Company's headquarters office is located in Naperville, Illinois. It conducts its manufacturing and warehousing operations at four additional facilities. All of these facilities are described below. Each facility is owned by the Company and considered suitable and adequate for its present use. The Company also currently maintains a small sales and engineering office in Norwell, Massachusetts in a leased facility.

Of the properties described below, the Jefferson, Iowa and the Madison Heights, Michigan facilities are used entirely in the fastener segment. The Albia, Iowa facility is used exclusively in the assembly equipment segment. The Tyrone, Pennsylvania and the Naperville, Illinois facilites are utilized in both operating segments.

Plant Locations and Descriptions

Naperville, Illinois            Brick, concrete block and partial
                                   metal construction with metal roof.

Tyrone, Pennsylvania            Concrete block with small tapered
                                   beam type warehouse.

Jefferson, Iowa                 Steel tapered beam construction.

Albia, Iowa                     Concrete block with prestressed
                                   concrete roof construction.

Madison Heights, Michigan       Concrete, brick and partial metal
                                   construction with metal roof.

ITEM 3 - LEGAL PROCEEDINGS

The Company is, from time to time involved in litigation, including environmental claims, 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.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the Company's shareholders during the fourth quarter of 2004.

Executive Officers of the Registrant

The names, ages and positions of all executive officers of the Company, as of March 25, 2005, are listed below. Officers are elected annually by the Board of Directors at the meeting of the directors immediately following the Annual Meeting of Shareholders. There are no family relationships among these officers, nor any arrangement or understanding between any officer and any other person pursuant to which the officer was selected.

Name and Age of Officer                     Position                            Years an Officer
-----------------------                     --------                            ----------------
John A. Morrissey          69               Chairman, Chief                            24
                                               Executive Officer

John C. Osterman           53               President, Chief Operating                 21
                                               Officer and Treasurer

Nirendu Dhar               63               General Manager,                            4
                                               H & L Tool Company, Inc.

Donald P. Long             53               Vice President-Sales                       10

Kimberly A. Kirhofer       46               Secretary                                  14

Michael J. Bourg           42               Controller                                  6

- Mr. Morrissey has been Chairman of the Board of Directors of the Company since November 1979, and Chief Executive Officer since August 1981. He has been a director of the Company since 1968.

- Mr. Osterman has been President, Chief Operating Officer and Treasurer of the Company since September 1987. He was Assistant Secretary from November 1983 to May 1985 when he became Assistant Vice President-Administration. He became Vice President-Administration in May 1986 and was named Executive Vice President in May 1987. He has been a director of the Company since May 1988.

- Mr. Dhar has been employed as General Manager of the Company's subsidiary, H & L Tool Company, Inc., since 1996. Mr. Dhar was employed as Plant Manager and Chief Engineer of H & L Tool Company, Inc. prior to the Company's acquisition of H & L Tool Company for more than five years. He has been a director of the Company since May 2001.

- Mr. Long has been Vice President-Sales of the Company since November 1994, and was Director of Sales and Marketing of the Company from March 1993 through November 1994. Prior to that, he was employed by Townsend Engineered Products, a maker of rivets, cold-formed fasteners and rivet setting equipment in various sales management positions for more than 5 years.

- Mrs. Kirhofer has been Secretary of the Company since August 1991, and was Assistant Secretary of the Company from February 1991 through August 1991. Prior to that, she held various administrative positions with the Company since May 1983.

- Mr. Bourg has been Controller of the Company since December 1998. Prior to that, he was Accounting Manager at Fuchs Lubricants Co., a manufacturer of industrial lubricants, for two years and prior to that was employed by the public accounting firm of McGladrey & Pullen, LLP as a public accountant, for more than five years.

PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company's common stock is traded on the American Stock Exchange (trading privileges only, not registered). As of March 4, 2005 there were approximately 281 record holders of such stock. The information on the market price of, and dividends paid with respect to, the Company's common stock, set forth in the section entitled "Information on Company's Common Stock" which appears on page 12 of the 2004 Annual Report is incorporated herein by reference. The 2004 Annual Report is filed as an exhibit to this report. See Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations - Dividends," for additional information about the Company's dividend policy.

Under the terms of a stock repurchase authorization originally approved by the Board of Directors of the Company in February of 1990, as amended, the Company is authorized to repurchase up to an aggregate of 200,000 shares of its common stock, in the open market or in private transactions, at prices deemed reasonable by management. Cumulative purchases under the repurchase authorization have amounted to 162,996 shares at an average price of $15.66 per share. The Company has not purchased any shares of its common stock since 2002.

ITEM 6 - SELECTED FINANCIAL DATA

The section entitled "Selected Financial Data" which appears on page 11 of the 2004 Annual Report is incorporated herein by reference. The 2004 Annual Report is filed as an exhibit to this report.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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, among other things, our ability to maintain our relationships with our significant customers; increased global competition; increases in the prices of, or limitations on the availability of, our primary raw materials; or a downturn in the automotive industry, upon which we rely for sales revenue, and which is cyclical and dependent on, among other things, consumer spending, international economic conditions and regulations and policies regarding international trade. 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.

In addition to the disclosures contained herein, readers are also urged to carefully review and consider any risks and uncertainties contained in other documents filed by the Company with the Securities and Exchange Commission.

RESULTS OF OPERATIONS

volume. The largest portion of the revenue increase reflects recovery of higher raw material costs. Our success within the fastener segment was tempered by continuing weakness in demand for products within the assembly equipment segment, where revenues declined compared to the prior year.

2004 COMPARED TO 2003

Within the fastener segment, revenues increased by 4.7%, or nearly $1.5 million. Approximately $1.0 million of this increase represents the recovery of higher material costs related to the increase in the price of steel wire and rod which are our primary raw materials. The balance of the increase is primarily due to an increase in units shipped. Increases in the price of raw materials consumed in production amounted to $1,195,000. This was partially offset by an increase of $205,000 in scrap recovery and purchase discounts. In addition, perishable tooling expense increased $244,000 due to expenses related to the initial production of a number of new parts, while wage and fringe benefit costs increased $122,000. These higher costs were partially offset by a $317,000 reduction in outside material processing costs, due to a change in product mix, and by savings of $193,000 realized by handling the majority of our routine maintenance internally, rather than outsourcing as had previously been the practice. The net effect of these changes contributed to a $693,000 improvement in gross margin for this segment compared with 2003.

Revenues within the assembly equipment segment declined 5.7%, or $412,000, compared to the prior year. This change was due to lower unit volumes which reflected lower demand for the product in this segment. Despite the reduction in volume, gross margins improved by $138,000 compared with 2003. Factors contributing to this improvement included: savings of $355,000 in wage and related benefit costs arising from reductions in the workforce undertaken in the fourth quarter of 2003; a reduction of $51,000 in material costs, primarily due to reduced volumes; and a reduction in depreciation expense of $45,000 as more equipment became fully depreciated.

Selling and administrative expenses declined 3.6%, or $228,000, in 2004 compared with 2003. The largest single factor contributing to this change was a successful appeal of the Michigan single business tax paid in four prior years. The amount of this refund was $330,000. Reductions in headcount contributed to a net reduction of $127,000 in salary and fringe benefit expense. These savings were partially offset by an increase of $120,000 in profit sharing expense related to the increase in pre-tax income.

2003 COMPARED TO 2002

Reduced revenues were the dominant factor contributing to reduced margins within the fastener segment during 2003. Fastener segment revenues declined abruptly late in the first quarter and remained weak for the balance of the year. For the year 2003, fastener segment revenues declined 11.3% compared to 2002, totaling a disappointing $31,024,036. Reductions in North American production of domestic automobiles and trucks contributed to the weakness in our business as did continuing competitive pressures which contributed to the loss of some business, as we were unable to meet the price concessions demanded by certain customers. In addition, some high margin parts were lost in connection with design changes that accompanied the new model year. Reductions in manufacturing staff failed to keep pace with the decline in business activity. Given the lower operating volumes in 2003, compared to 2002, labor costs were disproportionately higher by $317,000. In addition to labor, related taxes and fringe benefit costs, including employees' health insurance, were also disproportionately higher than in 2002 by approximately $420,000. Higher tooling expenses incurred in connection with the initial production of a variety of new parts caused tooling expenditures to be approximately $294,000 higher than would have been expected, given the reduction in operating levels.

Within the assembly equipment segment, revenues declined 10.6% compared to 2002. As was the case in the fastener segment, lower volumes contributed to significantly reduced operating efficiencies that were manifested in labor and benefit costs which were disproportionately higher than the prior year by approximately $184,000. Other factors impacting margins within this segment were increases in the cost of raw materials of approximately $94,000, offset in part by a $55,000 decrease in depreciation expense due to some equipment becoming fully depreciated.

Selling and administrative expenses for 2003 were 5.6% below those for 2002. A $302,000 reduction in profit sharing expense was the largest single factor contributing to the decrease in this expense category, followed by reductions of $145,000 in bonus expense, and $96,000 in commission expense due to lower sales in the current year. These reductions were partially offset by a $74,000 expense related to an early retirement program and an increase of $33,000 in the cost of employee health insurance.

Net interest income increased by approximately $45,000 during 2003, primarily as a result of lower interest expense related to lower balances on a note payable, which was paid in full in December.

DIVIDENDS

In determining to pay dividends, the Board considers current profitability, the outlook for longer-term profitability, known and potential cash requirements and the overall financial condition of the Company. The Company paid four regular quarterly dividends of $.18 per share during 2004. On February 21, 2005, your Board of Directors declared a regular quarterly dividend of $.18 per share, payable March 18, 2005 to shareholders of record on March 4, 2005. This continues the uninterrupted record of consecutive quarterly dividends paid by the Company to its shareholders that extends over 71 years. At that same meeting, the Board also declared an extra dividend of $.15 per share to be paid April 20, 2005 to shareholders of record on April 5, 2005.

PROPERTY, PLANT AND EQUIPMENT

Capital investments totaled $1.4 million during 2004. Capital expenditures were concentrated within the fastener segment, where investment totaled $1.3 million. Of this total, $1.1 million was invested to purchase cold-heading machinery and related equipment used in the manufacture of fasteners. The remainder of the expenditures within the fastener segment was for various building improvements, additional waste treatment equipment required to meet environmental requirements, and material handling equipment. The balance of the Company's 2004 capital expenditures covered a variety of smaller items, including computers and other office equipment.

During 2003, capital expenditures amounted to $641,715, of which $535,268 was invested within the fastener segment, $89,379 was invested within the assembly equipment segment and the remainder was expended for building improvements that cannot be allocated between segments. Within the fastener segment, approximately $317,000 was invested in a new solvent-based parts cleaning system. Other expenditures were approximately $92,000 for vehicles, including $68,000 for a new delivery truck; $32,000 for in-line wire drawing equipment; some $21,000 for equipment related to quality control; with the balance expended for smaller tools and equipment and building improvements. Within the assembly equipment segment, approximately $86,000 was expended for the purchase of new equipment related to the manufacture of perishable tooling that is sold to customers. The balance was expended for building improvements and office equipment.

Investments in machinery and equipment totaled $886,009 in 2002. The majority of this investment was related to the fastener segment of our operations. Approximately $567,000 was invested in new equipment directly related to the manufacture of fasteners, with an additional $123,000 expended for equipment related to quality control and finishing operations for the fastener segment. The balance was expended for a variety of items, including material handling, data processing and other equipment.

Depreciation expense amounted to $1,757,962 in 2004, $1,861,600 in 2003, and $1,915,726 in 2002.

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital increased approximately $1.2 million between December 31, 2003 and December 31, 2004. The Company's holdings in cash, cash equivalents and certificates of deposit amounted to nearly $6.3 million at the end of 2004. This is an increase of $.3 million compared with the prior year-end. Inventories increased by just over $1.0 million, reflecting both higher material prices and an increase in quantities on hand. Accounts receivable increased approximately $.3 million compared with the prior year-end, reflecting higher shipments during the latter portion of 2004 compared with the same period in 2003. Accruals for profit sharing contributions increased $.1 million compared to the prior year, due to increased income, and other accrued expenses increased $.2 million primarily due to an increase in income taxes payable. The Company has a $1.0 million line of credit, which expires May 31, 2005. This line of credit remains unused.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has not entered into, and has no current plans to enter into, any off-balance sheet financing arrangements.

The following table presents a summary of the Company's contractual obligations as of December 31, 2004:

                                    Payments Due By Period
---------------------------------------------------------------------------------------------
                                            Less Than      1 - 3        4 - 5       More Than
Contractual Obligation           Total        1 Year       Years        Years        5 Years
-------------------------       --------    ---------    ---------     --------     ---------
Long-term Debt                  $     --    $      --    $      --     $     --     $      --
Capital Lease Obligations             --           --           --           --            --
Operating Leases                   9,164        9,164           --           --            --
Purchase Obligations             254,770      133,428      117,950        3,392            --
                                --------    ---------    ---------     --------     ---------
Total                           $263,934    $ 142,592    $ 117,950     $  3,392     $      --
                                ========    =========    =========     ========     =========

Management believes that current cash, cash equivalents, operating cash flow and available line of credit will be sufficient to provide adequate working capital for the foreseeable future.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of December 31, 2004, the Company did not have any outstanding debt. The Company did not use any derivative financial instruments during 2004.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

statements and the amounts of revenue and expenses during the reporting period. During interim periods, the Company uses estimated gross profit rates to determine the cost of goods sold for a small portion of its operations. Actual results can vary from these estimates, and these estimates are adjusted, as necessary, when actual information is available. The effect of these estimates is described in Note 11 of the financial statements.

A summary of critical accounting policies can be found in Note 1 of the financial statements.

NEW ACCOUNTING STANDARDS

The Company's financial statements and financial condition were not, and are not expected to be, materially impacted by new, or proposed, accounting standards.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The firm of PricewaterhouseCoopers LLP served as the Company's independent registered public accounting firm for the year ended December 31, 2004.

On February 28, 2005, the Company was notified by PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm, that PricewaterhouseCoopers LLP declined to stand for re-election as the Company's independent registered public accounting firm for the year ending December 31, 2005. PricewaterhouseCoopers LLP agreed, however, to continue to serve as the Company's independent registered public accounting firm until completion of its procedures on the financial statements of the Company for the year ended December 31, 2004. On March 21, 2005, PricewaterhouseCoopers LLP completed its procedures on the financial statements of the Company for the year ended December 31, 2004, and PricewaterhouseCoopers LLP ceased serving as the Company's independent registered public accounting firm.

On March 23, 2005, the Audit Committee engaged Grant Thornton LLP to serve as the Company's independent registered public accounting firm for the year ending December 31, 2005.

The reports of PricewaterhouseCoopers LLP on the Company's financial statements for the years ended December 31, 2004 and 2003 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle. During the years ended December 31, 2004 and 2003 and through March 21, 2005, there have been no disagreements with PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused PricewaterhouseCoopers LLP to make reference thereto in its report on the Company's financial statements for such years. During the years ended December 31, 2004 and 2003 and through March 21, 2005, there have been no "reportable events" (as defined in SEC Regulation S-K Item 304(a)(1)(v)).

Between January 1, 2003 and the engagement of Grant Thornton LLP on March 23, 2005, neither the Company nor anyone acting on behalf of the Company consulted with Grant Thornton LLP regarding either (i) the application of accounting principles to a specified completed or contemplated transaction or the type of audit opinion that might be rendered on the Company's financial statements; as such, no written or oral advice was provided or (ii) any matter that was either the subject of a disagreement with PricewaterhouseCoopers LLP or a "reportable event."

OUTLOOK FOR 2005

Conditions within our markets remain unsettled. While the manufacturing segment of the economy has shown improvement overall, activity within the automotive sector, which is our major market, has not improved significantly. Published reports indicate that the "Big Three" domestic automobile manufacturers, which directly or indirectly represent our primary market, experienced a decline of nearly 4% in production during 2004. Although we do not anticipate a significant improvement in that market in 2005, we will continue to pursue opportunities within that market. In addition, we will continue pursuing opportunities that exist related to the North American operations of foreign-owned automobile manufacturers. We believe the size of the market warrants continued efforts to bolster our participation in this market.

Activity within the assembly equipment segment continues to be a cause for concern. Demand for our products remains at very low levels, and we have seen little to suggest meaningful improvement in the near term. To the contrary, activity within the markets we serve is increasingly subject to foreign competition either from foreign-owned companies exporting finished products to the U.S., or indirectly as U.S. based companies outsource their assembly operations to countries with lower manufacturing costs. This trend obviously also has adverse consequences for the fastener segment, as well.

The factors described above contribute to excess capacity within our industry, which has the effect of limiting our ability to negotiate price relief. We have had some success recovering higher raw material prices through the implementation of raw material surcharges and, over the past few months, raw material prices have stabilized. However, we have no assurance that this is anything more than a temporary situation. Any increase in global demand could easily lead to another round of material cost increases and could lead to availability constraints as well. As a result, we anticipate that margins will remain under pressure for the foreseeable future.

In addition to the operating challenges identified above, we anticipate incurring significant additional costs in connection with the requirements of the Sarbanes-Oxley Act of 2002 and related SEC rules. Assuring compliance with these new requirements will entail a significant investment of management resources as well as significant monetary expenditures to document and review existing internal controls. Once the documentation phase is completed, there will be ongoing costs in the form of internal and external testing of these controls to assure continued compliance, and there will likely be an associated increase in the costs of the independent audit process.

We will continue to exploit opportunities to reduce costs in all areas. While we have successfully implemented cost savings measures in the past, and will continue to do so, the incremental savings from future cost reduction initiatives will be more difficult to realize. Our best opportunity to improve bottom line performance rests with our ability to improve top line performance, and we plan to increase our efforts in that regard in the months ahead.

We recognize that the Company's success depends upon many factors. We express our appreciation for the loyalty of our customers, our shareholders and for the dedicated and diligent efforts of our employees who continue to meet the challenges that we face daily. These are critical elements of our success - both past and future.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of December 31, 2004, the Company did not have any outstanding debt. During 2004 the Company did not use derivative financial instruments.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the sections entitled "Consolidated Financial Statements" and "Financial Statement Schedule" which appear on pages 16 through 19 of this report.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On February 28, 2005, the Company was notified by PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm that it declined to stand for re-election as the Company's independent registered public accounting firm for the year ending December 31, 2005, as reported on the Form 8-K filed on March 4, 2005. On March 21, 2005, PricewaterhouseCoopers LLP competed its procedures on the financial statements of the Company for the year ended December 31, 2004, and PricewaterhouseCoopers LLP ceased serving as the Company's independent registered public accounting firm, as reported on the Form 8-K/A filed on March 23, 2005.

On March 23, 2005, the Company engaged Grant Thornton LLP as its independent registered public accounting firm for the year ending December 31, 2005, as reported on the Form 8-K filed on March 25, 2005.

ITEM 9A - CONTROLS AND PROCEDURES

(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 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.

PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information with respect to the Board of Directors' nominees for directors that is not related to security ownership, which is set forth in the section entitled "Security Ownership of Management" on pages 5 through 7 of the Company's 2005 Proxy Statement, is incorporated herein by reference. The information with respect to the audit committee, its financial expert and the independence of its members, which is set forth in the third paragraph of the section entitled "Additional Information Concerning the Board of Directors and Committees" on page 7 of the Company's 2005 Proxy Statement, is incorporated herein by reference. The information with regard to

compliance with Section 16(a) of the Exchange Act, which is set forth in the section entitled "Section 16(a) Beneficial Ownership Reporting Compliance" on page 10 of the 2005 Proxy Statement, is incorporated herein by reference. The 2005 Proxy Statement is to be filed with the Securities and Exchange Commission in connection with the Company's 2005 Annual Meeting of Shareholders. The information called for with respect to executive officers of the Company is included in Part I of this Report on Form 10-K under the caption "Executive Officers of the Registrant", which appears on page 10 of this report.

The Company has adopted a code of ethics for its principal executive officer, chief operating officer and senior financial officers. A copy of this code is included as Exhibit 14 to this Report on Form 10-K.

ITEM 11 - EXECUTIVE COMPENSATION

The information set forth in the section entitled "Executive Compensation" which appears on pages 11 through 13 of the Company's 2005 Proxy Statement and the information relating to compensation of directors set forth in the penultimate paragraph of the section entitled "Additional Information Concerning the Board of Directors and Committees" which appears on pages 7 through 10 of the Company's 2005 Proxy Statement is incorporated herein by reference. The 2005 Proxy Statement is to be filed with the Securities and Exchange Commission in connection with the Company's 2005 Annual Meeting of Shareholders.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information set forth in the section entitled "Principal Shareholders" on page 3 of the Company's 2005 Proxy Statement and the information with respect to security ownership of the Company's directors and officers set forth in the section entitled "Security Ownership of Management" on pages 5 through 7 of the Company's 2005 Proxy Statement is incorporated herein by reference. The 2005 Proxy Statement is to be filed with the Securities and Exchange Commission in connection with the Company's 2005 Annual Meeting of Shareholders.

The Company does not have any equity compensation plans or arrangements.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information relating to the law firm of Morrissey & Robinson set forth in the last sentence of footnote (2) on page 6 of the Company's 2005 Proxy Statement is incorporated herein by reference. The 2005 Proxy Statement is to be filed with the Securities and Exchange Commission in connection with the Company's 2005 Annual Meeting of Shareholders.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information set forth in section entitled "Independent Registered Public Accounting Firm" on pages 17 and 18 of the Company's 2005 Proxy Statement is incorporated herein by reference. The 2005 Proxy Statement is to be filed with the Securities and Exchange Commission in connection with the Company's 2005 Annual Meeting of Shareholders.

PART IV

ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as a part of this report:

1. Financial Statements:

See the section entitled "Consolidated Financial Statements" which appears on page 16 of this report.

2. Financial statement schedule and supplementary information required to be submitted.

See the section entitled "Financial Statement Schedule" which appears on pages 17 through 19 of this report.

3. Exhibits:

See the section entitled "Exhibits" which appears on page 20 of this report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Chicago Rivet & Machine Co. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Chicago Rivet & Machine Co.

By /s/ John C. Osterman
  ------------------------
John C. Osterman, President
and Chief Operating Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

/s/ John A. Morrissey                       Chairman of the Board of
---------------------                       Directors, Chief Executive
John A. Morrissey                           Officer and Member of the
                                            Executive Committee
                                            March 29, 2005

/s/ John C. Osterman                        President, Chief Operating
--------------------                        Officer, Treasurer (Chief
John C. Osterman                            Financial Officer), Member
                                            of the Executive Committee
                                            and Director
                                            March 29, 2005

/s/ Kent H. Cooney                          Director, Member of the
-------------------                         Audit Committee
Kent H. Cooney                              March 29, 2005

/s/ William T. Divane, Jr.                  Director, Member of the
--------------------------                  the Audit Committee
William T. Divane                           March 29, 2005

/s/ John R. Madden                          Director, Member of the
------------------                          Executive Committee and
John R. Madden                              Member of the Audit Committee
                                            March 29, 2005

/s/ Walter W. Morrissey                     Director, Member of Executive
-----------------------                     Committee
Walter W. Morrissey                         March 29, 2005

/s/ Michael J. Bourg                        Controller (Principal Accounting
-----------------------                     Officer)
Michael J. Bourg                            March 29, 2005

CHICAGO RIVET & MACHINE CO.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements, together with the notes thereto and the report thereon of PricewaterhouseCoopers LLP dated March 21, 2005, appearing on pages 5 to 11 of the accompanying 2004 Annual Report, and the section entitled "Quarterly Financial Data (Unaudited)" appearing on page 12 of the accompanying 2004 Annual Report are incorporated herein by reference. With the exception of the aforementioned information and the information incorporated in Items 1, 5, 6 and 8 herein, the 2004 Annual Report is not to be deemed filed as part of this Form 10-K Annual Report.

Consolidated Financial Statements from 2004 Annual Report (Exhibit 13 hereto):

Consolidated Balance Sheets (page 5 of 2004 Annual Report)

Consolidated Statements of Income (page 6 of 2004 Annual Report)

Consolidated Statements of Retained Earnings (page 6 of 2004 Annual Report)

Consolidated Statements of Cash Flows (page 7 of 2004 Annual Report)

Notes to Consolidated Financial Statements (pages 8, 9, and 10 of 2004 Annual Report)

Report of Independent Registered Public Accounting Firm (page 11 of 2004 Annual Report)

Quarterly Financial Data (Unaudited) (page 12 of 2004 Annual Report)

FINANCIAL STATEMENT SCHEDULE

2004, 2003 AND 2002

The following financial statement schedule should be read in conjunction with the consolidated financial statements and the notes thereto in the 2004 Annual Report. Financial statement schedules not included herein have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

                                                                   Page
                                                                   ----
Financial Statement Schedule:

Valuation and Qualifying Accounts (Schedule II)                     18

Report of Independent Registered Public Accounting Firm
  on Financial Statement Schedule                                   19

CHICAGO RIVET & MACHINE CO.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

                                      Balance at            Additions                          Balance at
                                      Beginning            Charged to                             End
     Classification                    of Year              Expenses           Deductions(1)    of Year
------------------------              ----------           ----------          ------------    ----------
2004
Allowance for doubtful
accounts, returns
and allowances                        $  220,000           $   24,670          $    114,670    $  130,000

2003
Allowance for doubtful
accounts, returns
and allowances                        $  240,000           $   10,174          $     30,174    $  220,000

2002
Allowance for doubtful
accounts, returns
and allowances                        $  240,000           $    7,067          $      7,067    $  240,000

(1) Accounts receivable written off, net of recoveries.

Report of Independent Registered Public Accounting Firm on Financial Statement Schedule

To the Board of Directors
of Chicago Rivet & Machine Co.

Our audits of the consolidated financial statements referred to in our report dated March 21, 2005 appearing in the 2004 Annual Report to Shareholders of Chicago Rivet & Machine Co. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

PricewaterhouseCoopers LLP

Chicago, Illinois
March 21, 2005

CHICAGO RIVET & MACHINE CO.

EXHIBITS

INDEX TO EXHIBITS

Exhibit
Number                                                                            Page
-------                                                                         --------
3.1     Articles of Incorporation and Charter.
        Incorporated by reference to Company's
        report on Form 10, dated March 30, 1935.

3.2     Certified copy of articles of Amendment to
        Articles of Incorporation, dated November 4,
        1959.  Incorporated by reference to Company's
        report on Form 8-A, dated April 30, 1965.

3.3     Amendment of Articles of Incorporation
        creating a class of 500,000 shares of no
        par value preferred stock.  Incorporated by
        reference to Company's report on Form 10-K,
        dated April 30, 1972.

3.4     Amended and Restated By-Laws, as amended
        February 16, 2004. Incorporated by reference to the Company's
        report on Form 10-K, dated March 29, 2004.

3.5     Articles of Incorporation, as amended by the amendment to the
        Articles of Incorporation, dated August 18, 1997. Incorporated
        by reference to the Company's report on Form 10-K, dated March
        27, 1998.

4.1     Rights Agreement, dated November 22, 1999,
        between the Company and First Chicago Trust Company
        of New York as Rights Agent. Incorporated
        by reference to the Company's report on
        Form 10-K, dated March 29, 2000.

13*     Annual Report to Shareholders for the year
        ended December 31, 2004.                                                22 - 38

14      Code of Ethics for Principal Executive and Senior
        Financial Officers                                                      39 - 40

21      Subsidiaries of the Registrant.                                              41

31.1    Certification of CEO Pursuant to Rule 13a-14(a)
        or 15d-14(a) as Adopted Pursuant to Section 302 of
        the Sarbanes-Oxley Act of 2002.                                              42

31.2    Certification of CFO Pursuant to Rule 13a-14(a)
        or 15d-14(a) as Adopted Pursuant to Section 302 of
        the Sarbanes-Oxley Act of 2002.                                              43

32.1    Certification of CEO Pursuant to 18 U.S.C. Section 1350,
        as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002.                                                            44

32.2    Certification of CFO Pursuant to 18 U.S.C. Section 1350,
        as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002.                                                            45

* Only the portions of this exhibit which are specifically incorporated herein by reference shall be deemed to be filed herewith.

EXHIBIT 13

[CHICAGO RIVET LOGO]
Chicago Rivet & Machine Co.
2004 Annual Report

.
.

[CHICAGO RIVET LETTERHEAD]

HIGHLIGHTS

------------------------------------------------------------------------------------------
                                                    2004           2003           2002
------------------------------------------------------------------------------------------
NET SALES AND LEASE REVENUE....................  $39,232,866    $38,190,908    $43,012,766
NET INCOME.....................................    1,523,434        817,527      2,604,075
NET INCOME PER SHARE...........................         1.58            .85           2.69
DIVIDENDS PER SHARE............................          .72            .97            .87
NET CASH PROVIDED BY OPERATING ACTIVITIES......    2,320,060      3,810,415      4,008,006
EXPENDITURES FOR PROPERTY, PLANT AND
  EQUIPMENT....................................    1,359,582        641,715        886,009
WORKING CAPITAL................................   15,222,262     14,020,185     12,874,182
TOTAL SHAREHOLDERS' EQUITY.....................   24,817,303     23,989,484     24,109,105
COMMON SHARES OUTSTANDING AT YEAR-END..........      966,132        966,132        966,132
SHAREHOLDERS' EQUITY PER COMMON SHARE..........        25.69          24.83          24.95

ANNUAL MEETING

The annual meeting of shareholders
will be held on May 10, 2005 at 10:00 a.m. at 901 Frontenac Road
Naperville, Illinois

Chicago Rivet & Machine Co. - 901 Frontenac Road - P.O. Box 3061 - Naperville, Illinois 60566 - Telephone: (630) 357-8500

MANAGEMENT'S REPORT
ON FINANCIAL CONDITION AND RESULTS OF OPERATIONS [CHIGAGO RIVET LOGO]

TO OUR SHAREHOLDERS:

RESULTS OF OPERATIONS

Overall, results for 2004 show considerable improvement compared with the results posted for 2003. Revenues within the fastener segment improved significantly. However, only a portion of the increase was due to higher unit volume. The largest portion of the revenue increase reflects recovery of higher raw material costs. Our success within the fastener segment was tempered by continuing weakness in demand for products within the assembly equipment segment, where revenues declined compared to the prior year.

2004 COMPARED TO 2003

Within the fastener segment, revenues increased by 4.7%, or nearly $1.5 million. Approximately $1.0 million of this increase represents the recovery of higher material costs related to the increase in the price of steel wire and rod which are our primary raw materials. The balance of the increase is primarily due to an increase in units shipped. Increases in the price of raw materials consumed in production amounted to $1,195,000. This was partially offset by an increase of $205,000 in scrap recovery and purchase discounts. In addition, perishable tooling expense increased $244,000 due to expenses related to the initial production of a number of new parts, while wage and fringe benefit costs increased $122,000. These higher costs were partially offset by a $317,000 reduction in outside material processing costs, due to a change in product mix, and by savings of $193,000 realized by handling the majority of our routine maintenance internally, rather than outsourcing as had been the practice. The net effect of these changes contributed to a $693,000 improvement in gross margin for this segment compared with 2003.

2003 COMPARED TO 2002

Net interest income increased by approximately $45,000 during 2003, primarily as a result of lower interest expense related to lower balances on a note payable, which was paid in full in December.

MANAGEMENT'S REPORT
(Continued)

DIVIDENDS

PROPERTY, PLANT AND EQUIPMENT

Capital investments totaled $1.4 million during 2004. Capital expenditures were concentrated within the fastener segment, where investment totaled $1.3 million. Of this total, $1.1 million was invested to purchase cold-heading machinery and related equipment used in the manufacture of fasteners. The remainder of the expenditures within the fastener segment was for various building improvements, additional waste treatment equipment required to meet environmental requirements and material handling equipment. The balance of the Company's 2004 capital expenditures covered a variety of smaller items, including computers and other office equipment.

Depreciation expense amounted to $1,757,962 in 2004, $1,861,600 in 2003, and $1,915,726 in 2002.

LIQUIDITY AND CAPITAL RESOURCES

OFF-BALANCE SHEET ARRANGEMENTS

The Company has not entered into, and has no current plans to enter into, any off-balance sheet financing arrangements.

The following table presents a summary of the Company's contractual obligations as of December 31, 2004:

                                     PAYMENTS DUE BY PERIOD
                       --------------------------------------------------
                                    LESS                           MORE
CONTRACTUAL                         THAN      1 - 3     4 - 5      THAN
OBLIGATION              TOTAL      1 YEAR     YEARS     YEARS    5 YEARS
-----------            --------   --------   --------   ------   --------
Long-term Debt.......  $     --   $     --   $     --   $   --   $     --
Capital Lease
 Obligations.........        --         --         --       --         --
Operating Leases.....     9,164      9,164         --       --         --
Purchase
 Obligations.........   254,770    133,428    117,950    3,392         --
                       --------   --------   --------   ------   --------
Total................  $263,934   $142,592   $117,950   $3,392   $     --
                       ========   ========   ========   ======   ========

Management believes that current cash, cash equivalents, operating cash flow and available line of credit will be sufficient to provide adequate working capital for the foreseeable future.

MANAGEMENT'S REPORT
(Continued) [CHIGAGO RIVET LOGO]

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of December 31, 2004, the Company did not have any outstanding debt. The Company did not use any derivative financial instruments during 2004.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

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 at the date of the financial statements and the amounts of revenue and expenses during the reporting period. During interim periods, the Company uses estimated gross profit rates to determine the cost of goods sold for a small portion of its operations. Actual results can vary from these estimates, and these estimates are adjusted, as necessary, when actual information is available. The effect of these estimates is described in Note 11 of the financial statements.

A summary of critical accounting policies can be found in Note 1 of the financial statements.

NEW ACCOUNTING STANDARDS

The Company's financial statements and financial condition were not, and are not expected to be, materially impacted by new, or proposed, accounting standards.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The firm of PricewaterhouseCoopers LLP served as the Company's independent registered public accounting firm for the year ended December 31, 2004.

On March 23, 2005, the Audit Committee engaged Grant Thornton LLP to serve as the Company's independent registered public accounting firm for the year ending December 31, 2005.

OUTLOOK FOR 2005

MANAGEMENT'S REPORT
(Continued)

activity within the markets we serve is increasingly subject to foreign competition either from foreign-owned companies exporting finished products to the U.S., or indirectly as U.S. based companies outsource their assembly operations to countries with lower manufacturing costs. This trend obviously also has adverse consequences for the fastener segment as well.

Respectfully,

/s/ J. A. MORRISSEY                         /s/ JOHN C. OSTERMAN
 John A. Morrissey                            John C. Osterman
      Chairman                                   President

March 21, 2005

FORWARD-LOOKING STATEMENTS

[CHICAGO RIVET LOGO]

CONSOLIDATED BALANCE SHEETS

-----------------------------------------------------------------------------------------------
December 31                                                        2004                2003
-----------------------------------------------------------------------------------------------
                           ASSETS
Current Assets
  Cash and Cash Equivalents.................................    $ 5,464,368         $ 5,530,099
  Certificates of Deposit...................................        805,000             455,000
  Accounts Receivable--Less allowances of $130,000 and
     $220,000, respectively.................................      4,867,615           4,549,168
  Inventories...............................................      6,242,470           5,233,788
  Deferred Income Taxes.....................................        554,191             602,191
  Other Current Assets......................................        219,497             218,560
                                                                -----------         -----------
  Total Current Assets......................................     18,153,141          16,588,806
Net Property, Plant and Equipment...........................     11,146,316          11,549,574
                                                                -----------         -----------
Total Assets................................................    $29,299,457         $28,138,380
                                                                ===========         ===========


            LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Accounts Payable..........................................    $ 1,367,221         $ 1,310,044
  Accrued Wages and Salaries................................        706,701             754,394
  Contributions Due Profit Sharing Plan.....................        252,312             133,243
  Other Accrued Expenses....................................        604,645             370,940
                                                                -----------         -----------
  Total Current Liabilities.................................      2,930,879           2,568,621
Deferred Income Taxes.......................................      1,551,275           1,580,275
                                                                -----------         -----------
  Total Liabilities.........................................      4,482,154           4,148,896
                                                                -----------         -----------
Commitments and Contingencies (Note 12)
Shareholders' Equity
  Preferred Stock, No Par Value, 500,000 Shares Authorized:
     None Outstanding.......................................             --                  --
  Common Stock, $1.00 Par Value, 4,000,000 Shares
     Authorized: 1,138,096 Shares Issued....................      1,138,096           1,138,096
  Additional Paid-in Capital................................        447,134             447,134
  Retained Earnings.........................................     27,154,171          26,326,352
  Treasury Stock, 171,964 Shares at cost....................     (3,922,098)         (3,922,098)
                                                                -----------         -----------
  Total Shareholders' Equity................................     24,817,303          23,989,484
                                                                -----------         -----------
Total Liabilities and Shareholders' Equity..................    $29,299,457         $28,138,380
                                                                ===========         ===========

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL

STATEMENTS.

[CHICAGO RIVET LOGO]

CONSOLIDATED STATEMENTS OF INCOME

-----------------------------------------------------------------------------------------------
For the Years Ended December 31                          2004           2003           2002
-----------------------------------------------------------------------------------------------
Net Sales and Lease Revenue.......................    $39,232,866    $38,190,908    $43,012,766
Cost of Goods Sold and Costs Related to Lease
  Revenue.........................................     30,954,797     30,744,104     32,427,203
                                                      -----------    -----------    -----------
Gross Profit......................................      8,278,069      7,446,804     10,585,563
Selling and Administrative Expenses...............      6,041,045      6,269,050      6,644,262
                                                      -----------    -----------    -----------
Operating Income..................................      2,237,024      1,177,754      3,941,301
Other Income, net.................................         78,410         64,773         19,774
                                                      -----------    -----------    -----------
Income Before Income Taxes........................      2,315,434      1,242,527      3,961,075
Provision for Income Taxes........................        792,000        425,000      1,357,000
                                                      -----------    -----------    -----------
Net Income........................................    $ 1,523,434    $   817,527    $ 2,604,075
                                                      ===========    ===========    ===========
Net Income Per Share..............................    $      1.58    $       .85    $      2.69
                                                      ===========    ===========    ===========

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

-----------------------------------------------------------------------------------------------
For the Years Ended December 31                          2004           2003           2002
-----------------------------------------------------------------------------------------------
Retained Earnings at Beginning of Year............    $26,326,352    $26,445,973    $24,682,816
Net Income........................................      1,523,434        817,527      2,604,075
Cash Dividends Paid, $.72 Per Share in 2004, $.97
  Per Share in 2003 and $.87 Per Share in 2002....       (695,615)      (937,148)      (840,918)
                                                      -----------    -----------    -----------
Retained Earnings at End of Year..................    $27,154,171    $26,326,352    $26,445,973
                                                      ===========    ===========    ===========

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL

STATEMENTS.

[CHIGAGO RIVET LOGO]

CONSOLIDATED STATEMENTS OF CASH FLOWS

---------------------------------------------------------------------------------------------------
For the Years Ended December 31                              2004           2003           2002
---------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net Income............................................    $ 1,523,434    $   817,527    $ 2,604,075
Adjustments to Reconcile Net Income to Net Cash
  Provided by Operating Activities:
  Depreciation and Amortization.......................      1,757,962      1,861,600      1,915,726
  Net (Gain) Loss on the Sale of Properties...........          2,148        (11,405)       (30,559)
  Deferred Income Taxes...............................         19,000         12,000        144,000
  Changes in Operating Assets and Liabilities:
    Accounts Receivable, net..........................       (318,447)       445,529       (999,549)
    Inventories.......................................     (1,008,682)       856,153        (39,273)
    Other Current Assets..............................           (937)        59,423         57,607
    Accounts Payable..................................         40,501        188,849        191,561
    Accrued Wages and Salaries........................        (47,693)       (41,526)        44,338
    Accrued Profit Sharing Plan Contributions.........        119,069       (302,299)       140,556
    Other Accrued Expenses............................        233,705        (75,436)       (20,476)
                                                          -----------    -----------    -----------
         Net Cash Provided by Operating Activities....      2,320,060      3,810,415      4,008,006
                                                          -----------    -----------    -----------
Cash Flows from Investing Activities:
  Capital Expenditures................................     (1,342,906)      (641,715)      (886,009)
  Proceeds from the Sale of Properties................          2,730         24,144         37,179
  Proceeds from Held-to-Maturity Securities...........        665,000      3,207,733      3,007,882
  Purchases of Held-to-Maturity Securities............     (1,015,000)      (505,000)    (5,987,733)
                                                          -----------    -----------    -----------
       Net Cash (Used in) Provided by Investing
         Activities...................................     (1,690,176)     2,085,162     (3,828,681)
                                                          -----------    -----------    -----------
Cash Flows from Financing Activities:
  Payments under Term Loan Agreement..................             --     (1,632,760)    (1,800,000)
  Purchase of Treasury Stock..........................             --             --        (26,976)
  Cash Dividends Paid.................................       (695,615)      (937,148)      (840,918)
                                                          -----------    -----------    -----------
       Net Cash Used in Financing Activities..........       (695,615)    (2,569,908)    (2,667,894)
                                                          -----------    -----------    -----------
Net (Decrease) Increase in Cash and Cash
  Equivalents.........................................        (65,731)     3,325,669     (2,488,569)
Cash and Cash Equivalents:
  Beginning of Year...................................      5,530,099      2,204,430      4,692,999
                                                          -----------    -----------    -----------
  End of Year.........................................    $ 5,464,368    $ 5,530,099    $ 2,204,430
                                                          ===========    ===========    ===========
Cash Paid During the Year for:
  Income Taxes........................................    $   573,307    $   508,213    $ 1,247,000
  Interest............................................    $        --    $    20,633    $    79,708
Supplemental Schedule of Non-cash Investing
  Activities:
  Capital Expenditures in Accounts Payable............    $    16,676    $        --    $        --

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL

STATEMENTS.

(CHIGAGO RIVET LOGO)

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

1--NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS--The Company operates in the fastener industry and is in the business of producing and selling rivets, cold-formed fasteners, screw machine products, automatic rivet setting machines, parts and tools for such machines, and the leasing of automatic rivet setting machines.

A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES FOLLOWS:

PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include the accounts of Chicago Rivet & Machine Co. and its wholly-owned subsidiary, H & L Tool Company, Inc. (H & L Tool). All significant intercompany accounts and transactions have been eliminated.

REVENUE RECOGNITION--Revenues from product sales are recognized upon shipment and an allowance is provided for estimated returns and discounts based on experience in accordance with Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements." Cash received by the Company prior to shipment is recorded as deferred revenue. The Company experiences a certain degree of sales returns that varies over time. In accordance with Statement of Financial Accounting Standards No. 48 ("SFAS 48"), "Revenue Recognition When Right of Return Exists," the Company is able to make a reasonable estimation of expected sales returns based upon history and as contemplated by the requirements of SFAS 48. The Company records all shipping and handling fees billed to customers as revenue, and related costs as cost of sales, when incurred, in accordance with EITF 00-10, "Accounting for Shipping and Handling Fees and Costs."

LEASE INCOME--Automatic rivet setting machines are available to customers on either a sale or lease basis. The leases are generally for a quarterly or one-year term, are cancelable at the option of the Company or the customer and are accounted for under the operating method, which recognizes lease revenue over the term of the lease. Rentals are billed in advance, and revenues attributable to future periods are included in unearned revenue in the consolidated balance sheets. Costs related to lease revenue, other than the cost of the machines, are expensed as incurred.

CREDIT RISK--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. The Company has established an allowance for accounts that may become uncollectible in the future. This estimated allowance is based primarily on management's evaluation of the financial condition of the customer and historical experience. The Company monitors its accounts receivable and charges to expense an amount equal to its estimate of potential credit losses. The Company considers a number of factors in determining its estimates, including the length of time its trade accounts receivable are past due, the Company's previous loss history and the customer's current ability to pay its obligation. Accounts receivable balances are charged off against the allowance when it is determined that the receivable will not be recovered.

CASH AND CASH EQUIVALENTS--The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS--The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents and certificates of deposit approximate fair value.

INVENTORIES--Inventories are stated at the lower of cost or net realizable value, cost being determined by the first-in, first-out method.

PROPERTY, PLANT AND EQUIPMENT--Properties are stated at cost and are depreciated over their estimated useful lives using the straight-line method for financial reporting purposes. Accelerated methods of depreciation are used for income tax purposes. Direct costs related to developing or obtaining software for internal use are capitalized as property and equipment. Capitalized software costs are amortized over the software's useful life when the software is ready for its intended use. The estimated useful lives by asset category are:

Asset category Estimated useful life

Land improvements...........................    15 to 25 years
Buildings and improvements..................    10 to 35 years
Machinery and equipment.....................     7 to 15 years
Automatic rivet setting machines on lease...          10 years
Capitalized software costs..................      3 to 5 years
Other equipment.............................     3 to 15 years

The Company reviews the carrying value of property, plant and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets.

When properties are retired or sold, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss on disposition is recognized currently. Maintenance, repairs and minor betterments that do not improve the related asset or extend its useful life are charged to operations as incurred.

INCOME TAXES--Deferred income taxes are determined under the asset and liability method in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Deferred income taxes arise from temporary differences between the income tax basis of assets and liabilities and their reported amounts in the financial statements.

SEGMENT INFORMATION--The Company reports segment information in accordance with Statement of Financial Accounting Standards No. 131 ("FAS 131"), "Disclosures about Segments of an Enterprise and Related Information." FAS 131 requires that segments be

(CHIGAGO RIVET LOGO)

based on the internal structure and reporting of the Company's operations.

NET INCOME PER SHARE--Net income per share of common stock is based on the weighted average number of shares outstanding of 966,132 in both 2004 and 2003, and 966,537 in 2002.

ESTIMATES--The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

RECLASSIFICATIONS--Certain items in 2003 and 2002 have been reclassified to conform to the presentation in 2004. These changes have no effect on the results of operations or financial position of the Company.

2--BALANCE SHEET DETAILS

                                      2004            2003
                                  ------------    ------------
Inventories:
  Raw materials.................  $ 1,693,341     $ 1,109,463
  Work in process...............    2,136,996       1,760,990
  Finished goods................    2,412,133       2,363,335
                                  -----------     -----------
                                  $ 6,242,470     $ 5,233,788
                                  ===========     ===========
Net Property, Plant and
  Equipment:
  Land and improvements.........  $ 1,015,635     $ 1,015,635
  Buildings and improvements....    5,823,984       5,779,993
  Production equipment, leased
    machines and other..........   29,272,638      28,201,191
                                  -----------     -----------
                                   36,112,257      34,996,819
  Accumulated depreciation......   24,965,941      23,447,245
                                  -----------     -----------
                                  $11,146,316     $11,549,574
                                  ===========     ===========
Other Accrued Expenses:
  Property taxes................  $   117,668     $   112,794
  Unearned revenue and customer
    deposits....................      113,678         120,893
  All other items...............      373,299         137,253
                                  -----------     -----------
                                  $   604,645     $   370,940
                                  ===========     ===========

3--LEASED MACHINES--Lease revenue amounted to $107,976 in 2004, $160,312 in 2003 and $198,869 in 2002. Future minimum rentals on leases beyond one year are not significant. The cost and carrying value of leased automatic rivet setting machines at December 31 were:

                                          2004         2003
                                        ---------    ---------
Cost..................................  $264,231     $343,833
Accumulated depreciation..............   246,589      331,933
                                        --------     --------
Carrying value........................  $ 17,642     $ 11,900
                                        ========     ========

4--INCOME TAXES--The provision for income tax expense consists of the following:

                              2004         2003         2002
                           ----------   ----------   -----------
Current:
  Federal................  $  766,000   $  408,000   $ 1,203,000
  State..................       7,000        5,000        10,000
Deferred.................      19,000       12,000       144,000
                           ----------   ----------   -----------
                           $  792,000   $  425,000   $ 1,357,000
                           ==========   ==========   ===========

The deferred tax liabilities and assets consist of the following:

                                      2004            2003
                                  ------------    ------------
Depreciation....................  $(1,560,071)    $(1,592,820)
                                  -----------     -----------
Inventory.......................      288,775         338,281
Accrued vacation................      163,478         171,491
Allowance for doubtful
  accounts......................       45,300          76,800
Other, net......................       65,434          28,164
                                  -----------     -----------
                                      562,987         614,736
                                  -----------     -----------
                                  $  (997,084)    $  (978,084)
                                  ===========     ===========

The following is a reconciliation of the statutory federal income tax rate to the actual effective tax rate:

                                      2004              2003               2002
                                 ---------------   ---------------   -----------------
                                  AMOUNT     %      Amount     %       Amount      %
                                 ---------------   ---------------   -----------------
Expected tax at U.S. Statutory
 rate..........................  $787,000   34.0   $422,000   34.0   $1,347,000   34.0
State taxes, net of federal
 benefit.......................     5,000     .2      3,000     .2        7,000     .2
Other, net.....................        --     --         --     --        3,000     .1
                                 --------   ----   --------   ----   ----------   ----
Income tax expense.............  $792,000   34.2   $425,000   34.2   $1,357,000   34.3
                                 ========   ====   ========   ====   ==========   ====

5--NOTE PAYABLE--The Company has a $1 million line of credit, which expires May 31, 2005, and remained unused at December 31, 2004.

6--TREASURY STOCK TRANSACTIONS--In 2002, the Company purchased 1,000 shares of its common stock for $26,976. These shares are being held in treasury. During 2004 and 2003, no shares were purchased.

7--SHAREHOLDER RIGHTS AGREEMENT--On November 22, 1999, the Company adopted a shareholder rights agreement and declared a dividend distribution of one right for each outstanding share of Company common stock to shareholders of record at the close of business on December 3, 1999. Each right entitles the holder, upon occurrence of certain events, to buy one one-hundredth of a share of Series A Junior Participating Preferred Stock at a price of $90, subject to adjustment. The rights may only become exercisable under certain circumstances involving acquisition of the Company's common stock, including the purchase of 10 percent or more by any person or group. The rights will expire on December 2, 2009 unless they are extended, redeemed or exchanged.

8--PROFIT SHARING PLAN--The Company has a noncontributory profit sharing plan covering substantially all employees. Total expenses relating to the profit sharing plan amounted to approximately $252,000 in 2004, $133,000 in 2003 and $435,000 in 2002.

9--OTHER INCOME, NET--consists of the following:

                                 2004       2003       2002
                                -------   --------   --------
Interest income...............  $64,488   $ 72,087   $ 83,770
Interest expense..............       --    (22,847)   (79,556)
Other.........................   13,922     15,533     15,560
                                -------   --------   --------
                                $78,410   $ 64,773   $ 19,774
                                =======   ========   ========

10--SEGMENT INFORMATION--The Company operates, primarily in the United States, in two business segments as determined by its products. The fastener segment, which comprises H & L Tool and the parent company's fastener operations, includes rivets, cold-formed fasteners and screw machine products. The assembly equipment segment includes automatic rivet setting machines, parts and tools

(CHIGAGO RIVET LOGO)

for such machines and the leasing of automatic rivet setting machines. Information by segment is as follows:

                                                 ASSEMBLY
                                   FASTENER     EQUIPMENT      OTHER      CONSOLIDATED
                                  -----------   ----------   ----------   ------------
YEAR ENDED DECEMBER 31, 2004:
Net sales and lease revenue.....  $32,477,800   $6,755,066   $       --   $39,232,866
Depreciation....................    1,513,978     112,868       131,116     1,757,962
Segment profit..................    2,884,308   1,648,034            --     4,532,342
Selling and administrative
 expenses.......................                              2,281,396     2,281,396
Interest expense................                                     --            --
Interest income.................                                (64,488)      (64,488)
                                                                          ------------
Income before income taxes......                                            2,315,434
                                                                          ------------
Capital expenditures............    1,332,122      19,774         7,686     1,359,582
Segment assets:
 Accounts receivable............    4,318,921     548,694            --     4,867,615
 Inventory......................    4,313,907   1,928,563            --     6,242,470
 Property, plant and
   equipment....................    8,912,268   1,355,437       878,611    11,146,316
 Other assets...................           --          --     7,043,056     7,043,056
                                                                          ------------
                                                                           29,299,457
                                                                          ------------
Year Ended December 31, 2003:
Net sales and lease revenue.....  $31,024,036   $7,166,872   $       --   $38,190,908
Depreciation....................    1,490,592     161,200       209,808     1,861,600
Segment profit..................    2,084,889   1,482,888            --     3,567,777
Selling and administrative
 expenses.......................                              2,374,490     2,374,490
Interest expense................                                 22,847        22,847
Interest income.................                                (72,087)      (72,087)
                                                                          ------------
Income before income taxes......                                            1,242,527
                                                                          ------------
Capital expenditures............      535,268      89,379        17,068       641,715
Segment assets:
 Accounts receivable............    3,836,968     712,200            --     4,549,168
 Inventory......................    3,191,132   2,042,656            --     5,233,788
 Property, plant and
   equipment....................    9,099,003   1,448,530     1,002,041    11,549,574
 Other assets...................           --          --     6,805,850     6,805,850
                                                                          ------------
                                                                           28,138,380
                                                                          ------------
Year Ended December 31, 2002:
Net sales and lease revenue.....  $34,991,758   $8,021,008   $       --   $43,012,766
Depreciation....................    1,474,228     217,665       223,833     1,915,726
Segment profit..................    4,499,657   2,325,353            --     6,825,010
Selling and administrative
 expenses.......................                              2,868,149     2,868,149
Interest expense................                                 79,556        79,556
Interest income.................                                (83,770)      (83,770)
                                                                          ------------
Income before income taxes......                                            3,961,075
                                                                          ------------
Capital expenditures............      790,261      13,446        82,302       886,009
Segment assets:
 Accounts receivable............    4,115,988     878,709            --     4,994,697
 Inventory......................    3,874,804   2,215,137            --     6,089,941
 Property, plant and
   equipment....................   10,054,327   1,530,960     1,196,911    12,782,198
 Other assets...................           --          --     6,221,337     6,221,337
                                                                          ------------
                                                                           30,088,173
                                                                          ------------

The Company does not allocate certain selling and administrative expenses for internal reporting, thus, no allocation was made for these expenses for segment disclosure purposes. Segment assets reported internally are limited to accounts receivable, inventory and long-lived assets. Long-lived assets of one plant location are allocated between the two segments based on estimated plant utilization, as this plant serves both fastener and assembly equipment activities. Other assets are not allocated to segments internally and to do so would be impracticable. Sales to two customers in the fastener segment accounted for 13, 13 and 18 percent and 22, 21 and 17 percent of consolidated revenues during 2004, 2003 and 2002, respectively.

11--OTHER UNUSUAL ITEMS OF INCOME AND EXPENSE--During interim periods, the Company uses estimated gross profit rates to determine the cost of goods sold for a portion of its operations. Actual results can vary from these estimates, and these estimates are adjusted, as necessary, when actual information is available. Fourth quarter net income includes the net favorable effect of certain adjustments related to inventory and certain accruals of $.01 per share for 2002. There was no fourth quarter adjustment in 2004 and 2003.

12--COMMITMENTS AND CONTINGENCIES--The Company recorded rent expense aggregating approximately $44,000, $40,000 and $41,000 for 2004, 2003 and 2002, respectively. Total future minimum rentals at December 31, 2004 are not significant.

[CHIGAGO RIVET LOGO]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Chicago Rivet & Machine Co.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, retained earnings and cash flows present fairly, in all material respects, the financial position of Chicago Rivet & Machine Co. and its subsidiary at December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois
March 21, 2005

SELECTED FINANCIAL DATA

-------------------------------------------------------------------------------------------------------------------------------
                                                           2004           2003           2002           2001           2000
-------------------------------------------------------------------------------------------------------------------------------
Net Sales and Lease Revenue                             $39,232,866    $38,190,908    $43,012,766    $40,443,010    $45,423,263
-------------------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes                                2,315,434      1,242,527      3,961,075      2,691,270      3,986,161
-------------------------------------------------------------------------------------------------------------------------------
Net Income                                                1,523,434        817,527      2,604,075      1,792,270      2,656,161
-------------------------------------------------------------------------------------------------------------------------------
Net Income Per Share                                           1.58            .85           2.69           1.85           2.60
-------------------------------------------------------------------------------------------------------------------------------
Dividends Per Share                                             .72            .97            .87            .97           1.07
-------------------------------------------------------------------------------------------------------------------------------
Average Common Shares Outstanding                           966,132        966,132        966,537        967,132      1,022,627
-------------------------------------------------------------------------------------------------------------------------------
Working Capital                                          15,222,262     14,020,185     12,874,182     11,616,424     12,001,291
-------------------------------------------------------------------------------------------------------------------------------
Total Debt                                                       --             --      1,632,760      3,432,760      5,232,760
-------------------------------------------------------------------------------------------------------------------------------
Total Assets                                             29,299,457     28,138,380     30,088,173     29,678,013     31,157,119
-------------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity                                     24,817,303     23,989,484     24,109,105     22,372,924     21,518,773
-------------------------------------------------------------------------------------------------------------------------------

[CHIGAGO RIVET LOGO]

QUARTERLY FINANCIAL DATA (UNAUDITED)

                           1ST           2ND          3RD           4TH
                         QUARTER       QUARTER      QUARTER       QUARTER
                       -----------   -----------   ----------   -----------
2004
Net Sales and Lease
 Revenue.............  $10,168,964   $10,237,556   $9,324,695   $ 9,501,651
Gross Profit.........    2,022,406     2,230,568    2,154,471     1,870,624
Net Income...........      290,988       386,276      601,615       244,555
Per Share Data:
 Net Income Per
   Share.............          .30           .40          .62           .26
 Average Common
   Shares
   Outstanding.......      966,132       966,132      966,132       966,132

2003
Net Sales and Lease
 Revenue.............  $10,236,463   $10,005,944   $8,831,742   $ 9,116,759
Gross Profit.........    2,385,529     1,929,633    1,539,172     1,592,470
Net Income...........      465,241       221,621        5,431       125,234
Per Share Data:
 Net Income Per
   Share.............          .48           .23          .01           .13
 Average Common
   Shares
   Outstanding.......      966,132       966,132      966,132       966,132

2002
Net Sales and Lease
 Revenue.............  $10,452,326   $12,437,856   $9,832,012   $10,290,572
Gross Profit.........    2,575,805     3,116,223    2,280,903     2,612,632
Net Income...........      625,116       902,589      435,015       641,355
Per Share Data:
 Net Income Per
   Share.............          .65           .93          .45           .66
 Average Common
   Shares
   Outstanding.......      967,132       966,768      966,132       966,132

INFORMATION ON COMPANY'S COMMON STOCK

The Company's common stock is traded on the American Stock Exchange. The ticker symbol is: CVR.

At December 31, 2004, there were approximately 290 shareholders of record.

The transfer agent and registrar for the Company's common stock is:

EquiServe Trust Company, N.A.
P.O. Box 43069
Providence, RI 02940-3069

The following table shows the dividends declared and the quarterly high and low prices of the common stock for the last two years.

                        Dividends
                         Declared                  Market Range
                       ----------------------------------------------------
Quarter                2004    2003          2004                2003
---------------------  ----    ----    ----------------    ----------------
First................  $.18    $.43*   $31.70    $27.10    $25.50    $22.80
Second...............   .18     .18    $29.98    $27.45    $26.26    $24.10
Third................   .18     .18    $27.50    $25.25    $29.99    $26.30
Fourth...............   .18     .18    $27.61    $25.84    $28.24    $25.00

* Includes an extra dividend of $.25 per share.

[CHIGAGO RIVET LETTERHEAD]

BOARD OF DIRECTORS

EDWARD L. CHOTT(a)(c)(n)
Chairman of the Board and
Chief Executive Officer of
The Broaster Co.
Beloit, Wisconsin

KENT H. COONEY(a)
Chief Financial Officer of
Heldon Bay Limited Partnership
Bigfork, Montana

NIRENDU DHAR
General Manager of
H & L Tool Company, Inc.

WILLIAM T. DIVANE, JR.(a)(c)(n)
Chairman of the Board and
Chief Executive Officer of
Divane Bros. Electric Co.
Franklin Park, Illinois

GEORGE P. LYNCH(c)
Attorney at Law
George Patrick Lynch, Ltd.
Lisle, Illinois

JOHN R. MADDEN(a)(c)(e)(n)
Chairman of the Board of
First National Bank
of La Grange
La Grange, Illinois

JOHN A. MORRISSEY(e)
Chairman of the Board
of the Company
President and Director of
Algonquin State Bank
Algonquin, Illinois

WALTER W. MORRISSEY(e)
Attorney at Law
Morrissey & Robinson
Oakbrook Terrace, Illinois

JOHN C. OSTERMAN(e)
President of the Company

CORPORATE OFFICERS

JOHN A. MORRISSEY
Chairman, Chief
Executive Officer

JOHN C. OSTERMAN
President, Chief Operating
Officer and Treasurer

NIRENDU DHAR
General Manager of
H & L Tool Company, Inc.

DONALD P. LONG
Vice President-Sales

KIMBERLY A. KIRHOFER
Secretary

MICHAEL J. BOURG
Corporate Controller

CHICAGO RIVET & MACHINE CO.

ADMINISTRATIVE & SALES OFFICES
Naperville, Illinois
Norwell, Massachusetts

MANUFACTURING FACILITIES
Albia Division
Albia, Iowa

Jefferson Division
Jefferson, Iowa

Tyrone Division
Tyrone, Pennsylvania

H & L Tool Company, Inc.
Madison Heights, Michigan

WEB SITE
www.chicagorivet.com

(a) Member of Audit Committee
(c) Member of Compensation Committee
(e) Member of Executive Committee
(n) Member of Nominating Committee

Chicago Rivet & Machine Co. - 901 Frontenac Road - P.O. Box 3061 - Naperville, Illinois 60566 - Telephone: (630) 357-8500

[CHICAGO RIVET GRAPHIC & LETTERHEAD]

EXHIBIT 14

CODE OF ETHICS
FOR CHIEF EXECUTIVE AND SENIOR OFFICERS

The Company is committed to conducting our business in accordance with applicable laws, rules and regulations and the highest standards of business conduct, and to full and accurate financial disclosure in compliance with applicable law. This Code of Ethics, applicable to the Company's Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Controller (or persons performing similar functions) (together, "Senior Officers"), sets forth specific policies to guide you in the performance of your duties.

As a Senior Officer, you must not only comply with applicable law. You also must engage in and promote honest and ethical conduct and abide by the Code of Business Conduct and other Company policies and procedures that govern the conduct of our business. Your leadership responsibilities include creating a culture of ethical business conduct and commitment to compliance, maintaining a work environment that encourages employees to raise concerns, and promptly addressing employee compliance concerns.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

You are required to comply with the laws, rules and regulations that govern the conduct of our business and to report any suspected violations in accordance with the section below entitled "Compliance With Code Of Ethics."

CONFLICTS OF INTEREST

Your obligation to conduct the Company's business in an honest and ethical manner includes the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. No Senior Officer shall make any investment, accept any position or benefits, participate in any transaction or business arrangement or otherwise act in a manner that creates or appears to create a conflict of interest unless the Senior Officer makes full disclosure of all facts and circumstances to, and obtains the prior written approval of, the Audit Committee of the Board of Directors.

DISCLOSURES

It is Company policy to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws and regulations in all reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in all other public communications made by the Company. As a Senior Officer, you are required to promote compliance with this policy and to abide by Company standards, policies and procedures designed to promote compliance with this policy.

COMPLIANCE WITH CODE OF ETHICS

If you know of or suspect a violation of applicable laws, rules or regulations or this Code of Ethics, you must immediately report that information to any member of the Audit Committee of the Board of Directors. No one will be subject to retaliation because of a good faith report of a suspected violation.

Violations of this Code of Ethics may result in disciplinary action, up to and including discharge. The Audit Committee of the Board of Directors shall determine, or shall designate appropriate persons to determine, appropriate action in response to violations of this Code.

WAIVERS OF CODE OF ETHICS

If you would like to seek a waiver of the Code of Ethics you must make full disclosure of your particular circumstances to the Audit Committee of the Board of Directors. Amendments to and waivers of this Code of Ethics will be publicly disclosed as required by applicable law and regulations.

NO RIGHTS CREATED

This Code of Ethics is a statement of certain fundamental principles, policies and procedures that govern the Company's Senior Officers in the conduct of the Company's business. It is not intended to and does not create any rights in any employee, customer/client, supplier, competitor, shareholder or any other person or entity.

EXHIBIT 21

CHICAGO RIVET & MACHINE CO.

SUBSIDIARIES OF THE REGISTRANT

The Company's only subsidiary is H & L Tool Company, Inc., which is wholly-owned and is organized in the State of Illinois.

EXHIBIT 31.1

I, John A. Morrissey, certify that:

1. I have reviewed this annual report on Form 10-K 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)) 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) 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

c) 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: March 29, 2005                /s/ John A. Morrissey
                                    -----------------------
                                    John A. Morrissey
                                    Chief Executive Officer

EXHIBIT 31.2

I, John C. Osterman, certify that:

1. I have reviewed this annual report on Form 10-K of Chicago Rivet & Machine Co.;

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: March 29, 2005                /s/ John C. Osterman
                                    ------------------------
                                    John C. Osterman
                                    Chief 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 Annual Report on Form 10-K of Chicago Rivet & Machine Co. (the "Company") for the period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John A. Morrissey, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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/ John A. Morrissey
------------------------------
Name: John A. Morrissey
Title: Chief Executive Officer
Date:  March 29, 2005

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 Annual Report on Form 10-K of Chicago Rivet & Machine Co. (the "Company") for the period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John C. Osterman, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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/ John C. Osterman
------------------------------
Name: John C. Osterman
Title: Chief Financial Officer
Date:  March 29, 2005