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<SEC-DOCUMENT>0000950137-07-004155.txt : 20070321
<SEC-HEADER>0000950137-07-004155.hdr.sgml : 20070321
<ACCEPTANCE-DATETIME>20070321162307
ACCESSION NUMBER:		0000950137-07-004155
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20061231
FILED AS OF DATE:		20070321
DATE AS OF CHANGE:		20070321

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHICAGO RIVET & MACHINE CO
		CENTRAL INDEX KEY:			0000019871
		STANDARD INDUSTRIAL CLASSIFICATION:	METALWORKING MACHINERY & EQUIPMENT [3540]
		IRS NUMBER:				360904920
		STATE OF INCORPORATION:			IL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-01227
		FILM NUMBER:		07709389

	BUSINESS ADDRESS:	
		STREET 1:		901 FRONTENAC RD
		STREET 2:		P O BOX 3061
		CITY:			NAPERVILLE
		STATE:			IL
		ZIP:			60566
		BUSINESS PHONE:		6303578500

	MAIL ADDRESS:	
		STREET 1:		901 FRONTENAC RD
		STREET 2:		P O BOX 3061
		CITY:			NAPERVILLE
		STATE:			IL
		ZIP:			60566
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>c13090e10vk.txt
<DESCRIPTION>FORM 10-K
<TEXT>
<PAGE>

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                                  ANNUAL REPORT
                        PURSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

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

For the fiscal year ended December 31, 2006

OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                          Commission file number 0-1227

                           CHICAGO RIVET & MACHINE CO.
             (Exact name of registrant as specified in its charter)

            ILLINOIS                                     36-0904920
    (State of incorporation)             (I.R.S. Employer Identification Number)

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            Name of Each Exchange on Which Registered
  ------------------------------      -----------------------------------------
  Common Stock - $1.00 Par Value               American Stock Exchange
(including Preferred Stock Purchase   (Trading privileges only, not registered)
            Rights)

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

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. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

   Large accelerated filer [ ]  Accelerated filer [ ]  Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [ ] No [X]

The aggregate market value of common stock held by non-affiliates of the Company
as of June 30, 2006 was $18,104,818.

As of March 19, 2007 966,132 shares of the Company'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, 2006 (the "2006 Report") are incorporated by reference in Parts I
and II 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
2007 Annual Meeting of Shareholders are incorporated by reference in Part III of
this report.

================================================================================
<PAGE>



                           CHICAGO RIVET & MACHINE CO.

                         PERIOD ENDING DECEMBER 31, 2006

<TABLE>
<CAPTION>
Item                                                                                                            Page
 No.                                                                                                             No.
- ----                                                                                                            ----
<S>      <C>                                                                                                    <C>
                                       Part I

1.       Business                                                                                                 3
1A.      Risk Factors                                                                                             4
1B.      Unresolved Staff Comments                                                                                6
2.       Properties                                                                                               6
3.       Legal Proceedings                                                                                        7
4.       Submission of Matters to a Vote of Security Holders                                                      7

                                       Part II

5.       Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
           Equity Securities                                                                                      9
6.       Selected Financial Data                                                                                  9
7.       Management's Discussion and Analysis of Financial Condition and Results of Operations                    9
7A.      Quantitative and Qualitative Disclosures About Market Risk                                              14
8.       Financial Statements and Supplementary Data                                                             14
9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                    15
9A.      Controls and Procedures                                                                                 15

                                       Part III

10.      Directors, Executive Officers and Corporate Governance                                                  16
11.      Executive Compensation                                                                                  16
12.      Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters          16
13.      Certain Relationships and Related Transactions, and Director Independence                               16
14.      Principal Accountant Fees and Services                                                                  16

                                       Part IV

15.      Exhibits and Financial Statement Schedules                                                              17
</TABLE>

                                       2

<PAGE>

                                     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 8 of the financial statements which appears on page 10 of the
Company's 2006 Annual Report to Shareholders. The 2006 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
price, quality and service.

      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 2006, sales to two customers exceeded 10% of the Company's
consolidated revenues. Sales to Fisher & Company accounted for approximately
28%, 24% and 22% of the Company's consolidated revenues in 2006, 2005, and 2004,
respectively. Sales to TI Group Automotive Systems Corporation accounted for
approximately 13% of the Company's consolidated revenues in 2006, 2005 and 2004.

      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.
While prices for ferrous materials declined slightly in 2006, the price of
non-ferrous materials continued to increase significantly during the year.

      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, 2006, the Company employed 261 people.

                                       3
<PAGE>

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

ITEM 1A - RISK FACTORS

      Our business is subject to a number of risks and uncertainties. If any of
the events contemplated by the following risks actually occur, then our
business, financial condition or results of operations could be materially
adversely affected. Additional risks and uncertainties not currently known to us
or that we currently deem to be immaterial may also materially and adversely
affect our business, financial condition and results of operations.

WE ARE DEPENDENT ON THE DOMESTIC AUTOMOTIVE INDUSTRY.

      Demand for our products is directly related to conditions in the domestic
automotive industry, which is highly cyclical and is affected by a variety of
factors, including regulatory requirements, international trade policies, and
consumer spending and preferences. The domestic automotive industry is
characterized by significant overcapacity, fierce competition and significant
pension and health care liabilities, and automotive production in the United
States has declined between 1999 and 2006. Certain domestic automakers and
component suppliers, including several of our customers, are financially
distressed or may become financially distressed. In recent years, our gross
margins have been negatively impacted in part due to the declines in domestic
automotive production, and we have experienced increased accounts receivable
write-offs as a result of bankruptcy filings by some of our customers. Any
further decline in the domestic automotive industry could have a material
adverse effect on our business, results of operations and financial condition.

WE FACE INTENSE COMPETITION.

      We compete with a number of other manufacturers and distributors that
produce and sell products similar to ours. Price, quality, and service are the
primary elements of competition. Our competitors include a large number of
independent domestic and international suppliers. We are not as large as a
number of these companies and do not have as many financial or other resources.
The competitive environment has also changed dramatically over the past several
years as our customers, faced with intense international competition and
pressure to reduce costs, have expanded their worldwide sourcing of components.
As a result, we have experienced competition from suppliers in other parts of
the world that enjoy economic advantages, such as lower labor costs and lower
health care costs. There can be no assurance that we will be able to compete
successfully with existing or new competitors. Increased competition could have
a material adverse effect on our business, results of operations and financial
condition.

WE RELY ON SALES TO TWO MAJOR CUSTOMERS.

      Our sales in 2006 to two customers constituted approximately 41% of our
consolidated revenues. Sales to Fisher & Company accounted for approximately
28%, 24% and 22% of the Company's consolidated revenues in 2006, 2005, and 2004,
respectively. Sales to TI Group Automotive Systems Corporation accounted for
approximately 13% of the Company's consolidated revenues in 2006, 2005 and 2004.
The loss of any significant portion of our sales to these customers could have a
material adverse effect on our business, results of operations and financial
condition.

                                       4

<PAGE>

INCREASES IN OUR RAW MATERIAL COSTS OR DIFFICULTIES WITH OUR SUPPLIERS COULD
NEGATIVELY AFFECT US.

      While we currently maintain alternative sources for raw materials, our
business is subject to the risk of price fluctuations and periodic delays in the
delivery of certain raw materials. In recent years, we have been adversely
impacted by increased costs for steel, our principal raw material, which we have
been unable to wholly mitigate. Any continued fluctuation in the price or
availability of our raw materials could have a material adverse impact on our
business, results of operations and financial condition.

WE MAY BE ADVERSELY AFFECTED BY LABOR RELATIONS ISSUES.

      Although none of our employees are unionized, the domestic automakers and
many of their suppliers, including many of our customers, have unionized work
forces. Work stoppages or slow-downs experienced by automakers or their
suppliers could result in slow-downs or closures of assembly plants where our
products are included in assembled components. In the event that one or more of
our customers or their customers experiences a material labor relations issue,
our business, results of operations and financial condition could be materially
adversely affected.

WE MAY INCUR LOSSES AS A RESULT OF PRODUCTS LIABILITY, WARRANTY OR OTHER CLAIMS
THAT MAY BE BROUGHT AGAINST US.

      We face risk of exposure to warranty and product liability claims in the
event that our products fail to perform as expected or result, or are alleged to
have resulted, in bodily injury, property damage or other losses. In addition,
if any of our products are or are alleged to be defective, then we may be
required to participate in a product recall. We may also be involved from time
to time in legal proceedings and commercial or contractual disputes. Any losses
or other liabilities related to these exposures could have a material adverse
effect on our business, results of operations and financial condition.

WE COULD BE ADVERSELY IMPACTED BY ENVIRONMENTAL LAWS AND REGULATIONS.

      Our operations are subject to environmental laws and regulations.
Currently, environmental costs and liabilities with respect to our operations
are not material, but there can be no assurance that we will not be adversely
impacted by these costs and liabilities in the future either under present laws
and regulations or those that may be adopted or imposed in the future.

WE COULD BE ADVERSELY IMPACTED BY THE LOSS OF THE SERVICES OF KEY EMPLOYEES.

      Successful operations depend, in part, upon the efforts of executive
officers and other key employees. Our future success will depend, in part, upon
our ability to attract and retain qualified personnel. Loss of the services of
any of our key employees, or the inability to attract or retain employees could
have a material adverse affect upon our business, financial condition and
results of operations.

WE COULD BE ADVERSELY IMPACTED BY OUR FAILURE TO COMPLY WITH SECTION 404 OF THE
SARBANES-OXLEY ACT

      As a public company we are required to comply with the reporting
obligations of the Exchange Act and will be required to comply with Section 404
of the Sarbanes-Oxley Act of 2002. If we fail to comply with the reporting
obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act for
our fiscal year ending December 31, 2007, or if we fail to achieve and maintain
adequate internal controls over financial reporting, our business, results of
operations and financial condition, and investors' confidence in us, could be
materially adversely affected.

                                       5
<PAGE>

THE PRICE OF OUR COMMON STOCK IS SUBJECT TO VOLATILITY, AND OUR STOCK IS THINLY
TRADED.

      Various factors, such as general economic changes in the financial
markets, announcements or significant developments with respect to the
automotive industry, actual or anticipated variations in our or our competitors'
quarterly or annual financial results, the introduction of new products or
technologies by us or our competitors, changes in other conditions or trends in
our industry or in the markets of any of our significant customers, changes in
governmental regulation, or changes in securities analysts' estimates of our
competitors or our industry, could cause the market price of our common stock to
fluctuate substantially.

      Our common stock is traded on the American Stock Exchange (not registered,
trading privileges only). The average daily trading volume for our common stock
on the American Stock Exchange is currently less than 1,000 shares per day, and
on some days we have zero volume. As a result, you may have difficulty selling
shares of our common stock, and the price of our common stock may vary
significantly based on trading volume.

ITEM 1B - UNRESOLVED STAFF COMMENTS

      Not applicable.

ITEM 2 - PROPERTIES

      The Company's headquarters 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

<TABLE>
<S>                                                  <C>
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.
</TABLE>

                                       6
<PAGE>
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 2006.

                                       7
<PAGE>

                      Executive Officers of the Registrant

      The names, ages and positions of all executive officers of the Company, as
of March 21, 2007, 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.

<TABLE>
<CAPTION>
Name and Age of Officer                     Position                            Years an Officer
- -----------------------                     --------                            ----------------
<S>                        <C>              <C>                                 <C>
John A. Morrissey          71               Chairman, Chief
                                               Executive Officer                       26

Michael J. Bourg           44               President, Chief Operating
                                               Officer and Treasurer                    8

Kimberly A. Kirhofer       48               Secretary                                  16

Nirendu Dhar               65               General Manager,
                                               H & L Tool Company, Inc.                 6
</TABLE>

- -     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. Bourg has been President, Chief Operating Officer and Treasurer of the
      Company since May 2006. He was Corporate Controller from December 1998 to
      November 2005. He became Vice President - Finance in November 2005 and was
      named Executive Vice President in February 2006. He has been a director of
      the Company since May 2006.

- -     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. 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, Inc. for more than five
      years. He has been a director of the Company since May 2001.

                                       8
<PAGE>

                                     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 February 14, 2007 there were
approximately 250 shareholders of record 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 2006 Annual Report is incorporated herein by
reference. The 2006 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 12 of
the 2006 Annual Report is incorporated herein by reference. The 2006 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 those disclosed above under "Risk Factors" and
elsewhere in this Form 10-K. As stated elsewhere in this filing, such factors
include, among other things: conditions in the domestic automotive industry,
upon which we rely for sales revenue, the intense competition in our markets,
the concentration of our sales to two major customers, the price and
availability of raw materials, labor relations issues, losses related to product
liability, warranty and recall claims, costs relating to environmental laws and
regulations, and the loss of the services of our key employees. 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.

RESULTS OF OPERATIONS

      The past year began on a positive note, as net sales for the first six
months increased 9% over the first half of 2005. This growth in sales
contributed to the return to profitability in the first two quarters of 2006.
However, the second half of the year proved to be more challenging. Net sales in
the third and fourth

                                       9
<PAGE>

quarters each reflected declines of approximately 6% compared to the same period
a year earlier. This resulted in a total net sales increase for 2006 of less
than 2% compared to 2005. Despite the lower sales in the second half of the
year, we were able to maintain profitability due in part to reductions in
various expenditures throughout the year, finishing 2006 with net income per
share of $1.16, compared to a year earlier loss. Results in 2006 were adversely
impacted by costs related to closing our Jefferson, Iowa fastener manufacturing
facility.

2006 COMPARED TO 2005

      Net sales within the fastener segment increased $472,000, or 1.4%, during
2006 compared with 2005. The fastener segment started the year relatively strong
and reflected an increase in net sales of 11.4% after the second quarter.
However, the second half of the year was particularly weak, as sales in the
third and fourth quarter declined 8.4% compared to the prior year. The up and
down results were tied to changes in demand from our larger automotive
customers. Production cuts by domestic automotive companies, in response to high
inventory levels and reduced sales forecasts, were largely responsible for the
weakness we experienced in the second half of the year. Gross margins within
this segment improved by approximately $1,920,000 during 2006, aided by the net
increase in sales and the decline of two expense items that had large increases
in 2005. Tooling expense declined by more than $1 million during 2006, as cost
controls were emphasized and better tool life was achieved during the year, and
expediting costs declined by $130,000, returning to more normal levels.
Additionally, material cost of sales declined $396,000, primarily due to lower
average steel prices during 2006 compared with 2005.

      Revenues within the assembly equipment segment increased by $137,116, or
2.4%, to $5,948,579 in 2006, compared with $5,811,463 in 2005. Most of the
increase was the result of an improved fourth quarter when net sales increased
11% compared with the fourth quarter of 2005. The improvement was primarily due
to an increase in the number of specialty machines shipped during the current
year and not the result of an overall improvement in the marketplace. Gross
margins for 2006 increased approximately $220,000, benefiting not only from the
increase in sales, but also a reduction in labor costs and labor related
expenses, due to headcount reductions.

      Selling and administrative expenses declined $689,687 during 2006 compared
with 2005. Professional fees declined $334,000 in 2006 due to initial procedures
performed in 2005 related to compliance with the Sarbanes-Oxley Act of 2002.
Selling and administrative expenses incurred in 2005 also included $315,000 to
resolve a litigation matter. Expenses were further reduced by $103,000 due to
the absence of bankruptcy filings of certain customers in the current year.
Finally, salaries and related benefits declined by $84,000, primarily due to
turnover and headcount reductions during the year. The reduction in these
expense items was partially offset by the increase in profit sharing expense of
$100,000, due to the profitable operating results in 2006.

      In May of 2006, a decision was made to close our Jefferson, Iowa fastener
operation and transfer production activities to our facility in Tyrone,
Pennsylvania, to better utilize manufacturing capacity. During the fourth
quarter, manufacturing activities in Jefferson concluded. We are currently in
the process of selling and or transferring the remaining assets of that
location, and anticipate having the building ready for sale in the first quarter
of 2007. As of December 31, 2006, a charge of $422,934 has been recorded related
to the plant closing. Additional costs associated with the relocation of
equipment and disposal of the facility are expected, but the amount and timing
of such costs are not known at this time, nor are they expected to be material.

                                       10
<PAGE>

2005 COMPARED TO 2004

      During 2005, revenues within the fastener segment increased by nearly $1.5
million, or 4.5%, compared with the prior year. However, a change in product
mix, combined with ongoing competitive pressures within our markets, which
adversely impacted selling prices, contributed to a decline in gross margins
within this segment. Change in product mix was the primary factor causing
material costs to increase $1.3 million compared to 2004 and was also the main
factor contributing to a $757,000 increase in outside processing services. Labor
and fringe benefit costs increased approximately $350,000. Tooling costs
increased by approximately $518,000 compared to 2004, primarily due to costs
related to the manufacture of new parts used in a number of new automotive
platform launches. The Company also incurred an increase of $253,000 related to
costs associated with expedited delivery due to shortened customer lead-time
requirements.

      Weak demand continued to characterize the assembly equipment segment of
our business in 2005, contributing to a decline in revenues of $944,000, or 14%,
compared to the prior year. We were able to reduce most manufacturing costs in
direct proportion to the decline in revenues. Labor and fringe benefit costs
declined by $305,000, while raw material costs were $91,000 lower than the prior
year. Additionally, most other elements of cost declined as a result of lower
volumes. However, the net effect of lower volume was a decline of $491,000 in
gross margins.

      Selling and administrative expenses increased by $682,000 in 2005 compared
to 2004. The single largest factor affecting the change in total expenses in
this category between the two years is that during 2004, the Company received a
refund of the Michigan single business tax that amounted to $330,000. This
refund was the result of a successful appeal of the tax calculation for the
prior four years. Professional fees and expenses incurred, primarily related to
compliance with the Sarbanes-Oxley Act of 2002, increased by $359,000 during
2005. Legal fees increased approximately $140,000 in 2005, primarily due to
protracted litigation that was resolved that year. Bad debt expense increased
$73,000, primarily in connection with the bankruptcy of certain customers. These
increases were partially offset by reductions in a variety of other expenses;
the most significant being a reduction in profit sharing expense of $127,000,
due to the decrease in profitability, and lower depreciation of office equipment
of $57,000.

      During the fourth quarter of 2005, the Company realized a gain of $256,660
from proceeds received due to the demutualization of an insurance provider.

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 2006, for
a total dividend distribution of $.72 per share for the year. On February 19,
2007, your Board of Directors declared a regular quarterly dividend of $.18 per
share, payable March 20, 2007 to shareholders of record on March 5, 2007. This
continues the uninterrupted record of consecutive quarterly dividends paid by
the Company to its shareholders that extends over 73 years.

PROPERTY, PLANT AND EQUIPMENT

      Capital expenditures during 2006 totaled $1,451,756, of which $1,374,009
was invested in equipment for our fastener operations. Approximately $680,000
was spent on cold-heading equipment that will expand our capabilities to make
larger parts and approximately $233,000 was spent on equipment for performing
secondary operations, such as grinding and shaving of parts. Additionally,
approximately $346,000 was spent on inspection equipment. The remaining
additions were for computer hardware and other equipment not specifically
assigned to a single segment.

                                       11
<PAGE>

      Total capital expenditures in 2005 were $647,162. Of the total, $460,000
was invested in building improvements, including $422,495 for new roofs at two
facilities. Fastener segment equipment additions amounted to $91,000, primarily
for equipment related to plating of parts and quality control. Assembly
equipment segment additions totaled $36,000, with approximately $32,000 expended
for equipment used to manufacture perishable tooling. The remaining additions
related primarily to computer equipment and other miscellaneous equipment
benefiting both operating segments.

      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 $1,659,834 in 2006, $1,703,382 in 2005,
and $1,757,962 in 2004.

LIQUIDITY AND CAPITAL RESOURCES

      The Company's working capital increased approximately $.4 million between
December 31, 2005 and December 31, 2006. The Company's holdings in cash, cash
equivalents and certificates of deposit amounted to approximately $5.7 million
at the end of 2006, a slight increase compared with the prior year-end.
Inventories were reduced by nearly $.5 million, as higher than normal quantities
on hand during the last two years to guard against supply shortages were further
reduced. Accounts receivable increased $.5 million compared with the prior
year-end, primarily due to a change in the regular payment schedule for a
certain customer and not due to any specific collection concern. The accrual for
profit sharing contribution increased $.1 million compared to the prior year,
due to more profitable operations in 2006, while the remaining accrued expenses
decreased $.3 million as accrued plant closing expenses as of December 31, 2006
were offset by reductions in the liability for income taxes and customer
deposits. The Company's investing activities in 2006 primarily consisted of
capital expenditures of $1.3 million and the net investment in certificates of
deposit of $4.4 million. The only financing activity during 2006 was the payment
of $.7 million in dividends. The Company has a $1.0 million line of credit,
which expires May 31, 2007. 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, 2006:

<TABLE>
<CAPTION>
                                                      Payments Due By Period
                                   -------------------------------------------------------------
                                               Less Than      1 - 3        4 - 5      More Than
Contractual Obligation               Total       1 Year       Years        Years       5 Years
- ----------------------             --------    ---------     --------     --------    ----------
<S>                                <C>         <C>           <C>          <C>         <C>
Long-term Debt                     $     --    $      --     $     --     $     --      $   --
Capital Lease Obligations                --           --           --           --          --
Operating Leases                     39,934       29,830       10,104           --          --
Purchase Obligations                286,884      257,605       28,163        1,116          --
Total                              $326,818    $ 287,435     $ 38,267     $  1,116      $   --
</TABLE>

                                       12
<PAGE>

      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, 2006, the Company did not have any outstanding debt.
The Company did not use any derivative financial instruments during 2006.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

      The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States
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. 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 that they would not 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 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
ended December 31, 2005.

      The report of PricewaterhouseCoopers LLP on the Company's financial
statements for the year ended December 31, 2004 did not contain an adverse
opinion or a disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principle. During the year ended December
31, 2004 and through March 21, 2005, there were 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 that year. During the year
ended December 31, 2004 and through March 21, 2005, there were 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

                                       13
<PAGE>

advice was provided or (ii) any matter that was either the subject of a
disagreement with PricewaterhouseCoopers LLP or a "reportable event."

PERSONNEL

      On May 9, 2006, the Board of Directors elected Michael J. Bourg to the
positions of President, Chief Operating Officer and Treasurer of the Company,
replacing John C. Osterman who had announced on November 21, 2005 his intention
to retire from the Company.

OUTLOOK FOR 2007

      While we are certainly pleased to report a return to profitable operations
in 2006, many challenges are evident as we begin the new year. Automotive
industry conditions continue to be challenging domestically due to overcapacity,
high retiree benefits costs and intense competition. Due to our heavy reliance
upon the domestic auto market we are impacted by these conditions. We expect
these conditions to continue for the foreseeable future as end-users of our
products continue to look for cost savings in their own operations. The domestic
"Big Three" automakers are at varying stages of well-publicized restructurings
and the effects of these restructurings on their suppliers remain unclear. At
the same time, customer demand for higher quality and lower prices continues
unabated. While we have obtained sales from customers that supply the import
brands, we will need to further penetrate that market to offset production cuts
of the domestic brands. Our ability to increase revenues as well as diversifying
our customer base will be a significant factor in our future growth.

      Although we reported higher revenues and profits in the assembly equipment
segment during 2006, our volume of activity measured in units sold actually
declined. Given industrial output data currently available, we have no reason to
expect any significant improvement in this segment in the near-term. The
increase reported in 2006 was primarily due to specialty equipment sales, which
although providing higher revenue opportunities, are also less predictable in
nature.

      We will continue our efforts to increase our sales revenues in all markets
by emphasizing value over price and will focus on more complex products used by
customers for which our expertise, service and unsurpassed quality are important
factors in making purchasing decisions. At the same time, we will continue to
pursue solutions that help improve our operations at all levels while continuing
our efforts to control operating costs.

      Our future success is dependent on how we anticipate, and respond to, many
ever-changing factors. We believe that the valuable contributions of our
employees, whose dedicated efforts allowed for the turnaround achieved in 2006,
and our sound financial condition, will help us face the challenges ahead in
2007. We also wish to thank our customers and our shareholders for their
continued support.

ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      As of December 31, 2006, the Company did not have any outstanding debt.
During 2006 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 19 through 22 of this
report.

                                       14
<PAGE>

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
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, 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
quarter ended December 31, 2006 that have materially affected, or are reasonably
likely to materially affect, the Company's internal control over financial
reporting.

                                       15
<PAGE>

                                    PART III

ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

      The information in the Company's 2007 Proxy Statement (i) with respect to
the Board of Directors' nominees for directors that is not related to security
ownership in "Security Ownership of Management" (ii) in the third paragraph in
"Additional Information Concerning the Board of Directors and Committees" and
(iii) in "Section 16(a) Beneficial Ownership Reporting Compliance" is
incorporated herein by reference. The 2007 Proxy Statement is to be filed with
the Securities and Exchange Commission in connection with the Company's 2007
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."

      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 of ethics was filed as Exhibit 14 to the Company's Annual Report on Form
10-K dated March 29, 2005.

ITEM 11 - EXECUTIVE COMPENSATION

      The information set forth in the Company's 2007 Proxy Statement in
"Compensation of Directors and Executive Officers" is incorporated herein by
reference.

      The Compensation Committee of the Board of Directors currently consists of
Directors Edward L. Chott, William T. Divane, Jr., George P. Lynch and John R.
Madden.

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

      The information set forth in the Company's 2007 Proxy Statement in
"Principal Shareholders" and the information with respect to security ownership
of the Company's directors and officers set forth in "Security Ownership of
Management" is incorporated herein by reference.

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

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

      The information set forth the Company's 2007 Proxy Statement in (i)
"Additional Information Concerning the Board of Directors and Committees -
Policy Regarding Related Person Transactions" and (ii) the first paragraph under
"Additional Information Concerning the Board of Directors and Committees" is
incorporated herein by reference.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

      The information set forth in the Company's 2007 Proxy Statement in (i)
"Independent Registered Public Accounting Firm - Fee Table" and (ii) the last
paragraph under "Independent Registered Public Accounting Firm" is incorporated
herein by reference.

                                       16
<PAGE>

                                     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 19 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 20 through 22 of this report.

            3.    Exhibits:

                  See the section entitled "Exhibits" which appears on page 23
                  of this report.

                                       17
<PAGE>

                                   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/ Michael J. Bourg
                                           ------------------------
                                           Michael J. Bourg
                                           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:

<TABLE>
<S>                                    <C>
/s/ John A. Morrissey                  Chairman of the Board of Directors,
- --------------------                   Chief Executive Officer (Principal
John A. Morrissey                      Executive Officer) and Member of the
                                       Executive Committee
                                       March 21, 2007

/s/ Michael J. Bourg                   President, Chief Operating Officer,
- -------------------                    Treasurer (Principal Financial and
Michael J. Bourg                       Accounting Officer), Member of the
                                       Executive Committee and Director
                                       March 21, 2007

/s/ Edward L. Chott                    Director, Member of the Audit Committee
- ------------------                     March 21, 2007
Edward L. Chott

/s/ Kent H. Cooney                     Director, Member of the Audit Committee
- ------------------                     March 21, 2007
Kent H. Cooney

/s/ Nirendu Dhar                       Director
- ---------------                        March 21, 2007
Nirendu Dhar

/s/ William T. Divane, Jr.             Director, Member of the Audit Committee
- -------------------------              March 21, 2007
William T. Divane

/s/ George P. Lynch                    Director
- ------------------                     March 21, 2007
George P. Lynch

/s/ John R. Madden                     Director, Member of the Executive
- ---------------------------            Committee and the Audit Committee
John R. Madden                         March 21, 2007

/s/ Walter W. Morrissey                Director, Member of Executive Committee
- ----------------------                 March 21, 2007
Walter W. Morrissey
</TABLE>

                                       18
<PAGE>

                           CHICAGO RIVET & MACHINE CO.

                        CONSOLIDATED FINANCIAL STATEMENTS

      The consolidated financial statements, together with the notes thereto and
the reports thereon of Grant Thornton LLP dated March 20, 2007 and
PricewaterhouseCoopers LLP dated March 21, 2005, appearing on pages 5 to 11 of
the accompanying 2006 Annual Report, and the section entitled "Quarterly
Financial Data (Unaudited)" appearing on page 12 of the accompanying 2006 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 2006 Annual Report is not to be deemed filed as part of this Form
10-K Annual Report.

Consolidated Financial Statements from 2006 Annual Report (Exhibit 13 hereto):

Consolidated Balance Sheets (page 5 of 2006 Annual Report)

Consolidated Statements of Income (page 6 of 2006 Annual Report)

Consolidated Statements of Retained Earnings (page 6 of 2006 Annual Report)

Consolidated Statements of Cash Flows (page 7 of 2006 Annual Report)

Notes to Consolidated Financial Statements (pages 8, 9, and 10 of 2006 Annual
Report)

Reports of Independent Registered Public Accounting Firms (page 11 of
2006 Annual Report)

Quarterly Financial Data (Unaudited) (page 12 of 2006 Annual Report)

                                       19
<PAGE>

                          FINANCIAL STATEMENT SCHEDULE

                               2006, 2005 AND 2004

      The following financial statement schedule should be read in conjunction
with the consolidated financial statements and the notes thereto in the 2006
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.

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----
<S>                                                                                    <C>
Financial Statement Schedule:

Valuation and Qualifying Accounts (Schedule II)                                         21

Reports of Independent Registered Public Accounting Firms
  on Financial Statement Schedule                                                       22
</TABLE>

                                       20
<PAGE>

                           CHICAGO RIVET & MACHINE CO.
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

<TABLE>
<CAPTION>
                                               Balance at          Additions                                Balance at
                                               Beginning          Charged to                                   End
Classification                                  of Year            Expenses               Deductions(1)      of Year
- --------------                                 ----------         ----------              ------------      ----------
<S>                                            <C>                <C>                     <C>               <C>
2006
Allowance for doubtful accounts, returns
and allowances                                   $210,000          $ (5,688)                $ 54,312          $150,000

2005
Allowance for doubtful accounts, returns
and allowances                                   $130,000          $ 97,487                 $ 17,487          $210,000

2004
Allowance for doubtful accounts, returns
and allowances                                   $220,000          $ 24,670                 $114,670          $130,000
</TABLE>

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

                                       21
<PAGE>

           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 20, 2007 appearing in the 2006 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.

Grant Thornton LLP
Chicago, Illinois
March 20, 2007

           Report of Independent Registered Public Accounting Firm on
                          Financial Statement Schedule

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

      Our audit of the consolidated financial statements referred to in our
report dated March 21, 2005 appearing in the 2006 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 as of and for the
year ended December 31, 2004 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

                                       22
<PAGE>

                           CHICAGO RIVET & MACHINE CO.

                                    EXHIBITS

                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
 Number                                                                                           Page
- -------                                                                                          -------
<S>       <C>                                                                                    <C>
3.1       Articles of Incorporation, as last amended August 18, 1997. Incorporated
          by reference to the Company's report on Form 10-K, dated March 27, 1998.
          File number 0000-01227

3.2       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.
          File number 0000-01227

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. File
          number 0000-01227

13*       Annual Report to Shareholders for the year ended December 31, 2006.                    24-40

14        Code of Ethics for Principal Executive and Senior Financial Officers.
          Incorporated by reference to the Company's report on Form 10-K, dated March
          29, 2005. File number 0000-01227

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
</TABLE>

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

                                       23

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>2
<FILENAME>c13090exv13.txt
<DESCRIPTION>ANNUAL REPORT TO SHAREHOLDERS
<TEXT>
<PAGE>

                                                                      EXHIBIT-13

                              [CHICAGO RIVET LOGO]
                          Chicago Rivet & Machine Co.
                               2006 Annual Report
<PAGE>
                                                                               .
                                                                               .
                                                                               .

[CHICAGO RIVET LOGO]
- --------------------------------------------------------------------------------

HIGHLIGHTS

<Table>
<Caption>
- ------------------------------------------------------------------------------------------
                                                    2006           2005           2004
- ------------------------------------------------------------------------------------------
<S>                                              <C>            <C>            <C>
NET SALES AND LEASE REVENUE....................  $40,369,977    $39,760,756    $39,232,866
NET INCOME (LOSS)..............................    1,120,627       (398,612)     1,523,434
NET INCOME (LOSS) PER SHARE....................         1.16           (.41)          1.58
DIVIDENDS PER SHARE............................          .72            .87            .72
NET CASH PROVIDED BY OPERATING ACTIVITIES......    2,036,841        693,152      2,320,060
EXPENDITURES FOR PROPERTY, PLANT AND
  EQUIPMENT....................................    1,451,756        647,162      1,359,582
WORKING CAPITAL................................   15,242,183     14,839,923     15,222,262
TOTAL SHAREHOLDERS' EQUITY.....................   24,003,168     23,578,156     24,817,303
COMMON SHARES OUTSTANDING AT YEAR-END..........      966,132        966,132        966,132
SHAREHOLDERS' EQUITY PER COMMON SHARE..........        24.84          24.40          25.69
</Table>

ANNUAL MEETING

The annual meeting of shareholders
will be held on May 8, 2007 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 - www.chicagorivet.com
- --------------------------------------------------------------------------------
<PAGE>

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

TO OUR SHAREHOLDERS:

RESULTS OF OPERATIONS

    The past year began on a positive note, as net sales for the first six
months increased 9% over the first half of 2005. This growth in sales
contributed to the return to profitability in the first two quarters of 2006.
However, the second half of the year proved to be more challenging. Net sales in
the third and fourth quarters each reflected declines of approximately 6%
compared to the same period a year earlier. This resulted in a total net sales
increase for 2006 of less than 2% compared to 2005. Despite the lower sales in
the second half of the year, we were able to maintain profitability due in part
to reductions in various expenditures throughout the year, finishing 2006 with
net income per share of $1.16, compared to a year earlier loss. Results in 2006
were adversely impacted by costs related to closing our Jefferson, Iowa fastener
manufacturing facility.

2006 COMPARED TO 2005

    Net sales within the fastener segment increased $472,000, or 1.4%, during
2006 compared with 2005. The fastener segment started the year relatively strong
and reflected an increase in net sales of 11.4% after the second quarter.
However, the second half of the year was particularly weak, as sales in the
third and fourth quarter declined 8.4% compared to the prior year. The up and
down results were tied to changes in demand from our larger automotive
customers. Production cuts by domestic automotive companies, in response to high
inventory levels and reduced sales forecasts, were largely responsible for the
weakness we experienced in the second half of the year. Gross margins within
this segment improved by approximately $1,920,000 during 2006, aided by the net
increase in sales and the decline of two expense items that had large increases
in 2005. Tooling expense declined by more than $1 million during 2006, as cost
controls were emphasized and better tool life was achieved during the year, and
expediting costs declined by $130,000, returning to more normal levels.
Additionally, material cost of sales declined $396,000, primarily due to lower
average steel prices during 2006 compared with 2005.

    Revenues within the assembly equipment segment increased by $137,116, or
2.4%, to $5,948,579 in 2006, compared with $5,811,463 in 2005. Most of the
increase was the result of an improved fourth quarter when net sales increased
11% compared with the fourth quarter of 2005. The improvement was primarily due
to an increase in the number of specialty machines shipped during the current
year and not the result of an overall improvement in the marketplace. Gross
margins for 2006 increased approximately $220,000, benefiting not only from the
increase in sales, but also a reduction in labor costs and labor related
expenses, due to headcount reductions.

    Selling and administrative expenses declined $689,687 during 2006 compared
with 2005. Professional fees declined $334,000 in 2006 due to initial procedures
performed in 2005 related to compliance with the Sarbanes-Oxley Act of 2002.
Selling and administrative expenses incurred in 2005 also included $315,000 to
resolve a litigation matter. Expenses were further reduced by $103,000 due to
the absence of bankruptcy filings of certain customers in the current year.
Finally, salaries and related benefits declined by $84,000, primarily due to
turnover and headcount reductions during the year. The reduction in these
expense items was partially offset by the increase in profit sharing expense of
$100,000, due to the profitable operating results in 2006.

    In May of 2006, a decision was made to close our Jefferson, Iowa fastener
operation and transfer production activities to our facility in Tyrone,
Pennsylvania, to better utilize manufacturing capacity. During the fourth
quarter, manufacturing activities in Jefferson concluded. We are currently in
the process of selling and or transferring the remaining assets of that
location, and anticipate having the building ready for sale in the first quarter
of 2007. As of December 31, 2006, a charge of $422,934 has been recorded related
to the plant closing. Additional costs associated with the relocation of
equipment and disposal of the facility are expected, but the amount and timing
of such costs are not known at this time, nor are they expected to be material.

2005 COMPARED TO 2004

    During 2005, revenues within the fastener segment increased by nearly $1.5
million, or 4.5%, compared with the prior year. However, a change in product
mix, combined with ongoing competitive pressures within our markets, which
adversely impacted selling prices, contributed to a decline in gross margins
within this segment. Change in product mix was the primary factor causing
material costs to increase $1.3 million compared to 2004 and was also the main
factor contributing to a $757,000 increase in outside processing services. Labor
and fringe benefit costs increased approximately $350,000. Tooling costs
increased by approximately $518,000 compared to 2004, primarily due to costs
related to the manufacture of new parts used in a number of new automotive
platform launches. The Company also incurred an increase of $253,000 related to
costs associated with expedited delivery due to shortened customer lead-time
requirements.

    Weak demand continued to characterize the assembly equipment segment of our
business in 2005, contributing to a decline in revenues of $944,000, or 14%,
compared to the prior year. We were able to reduce most manufacturing costs in
direct proportion to the decline in revenues. Labor and fringe benefit costs
declined by $305,000, while raw material costs were $91,000 lower than the prior
year. Additionally,

- --------------------------------------------------------------------------------

                                                                               1
<PAGE>
MANAGEMENT'S REPORT
(Continued)
- --------------------------------------------------------------------------------

most other elements of cost declined as a result of lower volumes. However, the
net effect of lower volume was a decline of $491,000 in gross margins.

    Selling and administrative expenses increased by $682,000 in 2005 compared
to 2004. The single largest factor affecting the change in total expenses in
this category between the two years is that during 2004, the Company received a
refund of the Michigan single business tax that amounted to $330,000. This
refund was the result of a successful appeal of the tax calculation for the
prior four years. Professional fees and expenses incurred, primarily related to
compliance with the Sarbanes-Oxley Act of 2002, increased by $359,000 during
2005. Legal fees increased approximately $140,000 in 2005, primarily due to
protracted litigation that was resolved that year. Bad debt expense increased
$73,000, primarily in connection with the bankruptcy of certain customers. These
increases were partially offset by reductions in a variety of other expenses;
the most significant being a reduction in profit sharing expense of $127,000,
due to the decrease in profitability, and lower depreciation of office equipment
of $57,000.

    During the fourth quarter of 2005, the Company realized a gain of $256,660
from proceeds received due to the demutualization of an insurance provider.

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 2006, for a total dividend
distribution of $.72 per share for the year. On February 19, 2007, your Board of
Directors declared a regular quarterly dividend of $.18 per share, payable March
20, 2007 to shareholders of record on March 5, 2007. This continues the
uninterrupted record of consecutive quarterly dividends paid by the Company to
its shareholders that extends over 73 years.

PROPERTY, PLANT AND EQUIPMENT

    Capital expenditures during 2006 totaled $1,451,756, of which $1,374,009 was
invested in equipment for our fastener operations. Approximately $680,000 was
spent on cold-heading equipment that will expand our capabilities to make larger
parts and approximately $233,000 was spent on equipment for performing secondary
operations, such as grinding and shaving of parts. Additionally, approximately
$346,000 was spent on inspection equipment. The remaining additions were for
computer hardware and other equipment not specifically assigned to a single
segment.

    Total capital expenditures in 2005 were $647,162. Of the total, $460,000 was
invested in building improvements, including $422,495 for new roofs at two
facilities. Fastener segment equipment additions amounted to $91,000, primarily
for equipment related to plating of parts and quality control. Assembly
equipment segment additions totaled $36,000, with approximately $32,000 expended
for equipment used to manufacture perishable tooling. The remaining additions
related primarily to computer equipment and other miscellaneous equipment
benefiting both operating segments.

    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 $1,659,834 in 2006, $1,703,382 in 2005, and
$1,757,962 in 2004.

LIQUIDITY AND CAPITAL RESOURCES

    The Company's working capital increased approximately $.4 million between
December 31, 2005 and December 31, 2006. The Company's holdings in cash, cash
equivalents and certificates of deposit amounted to approximately $5.7 million
at the end of 2006, a slight increase compared with the prior year-end.
Inventories were reduced by nearly $.5 million, as higher than normal quantities
on hand during the last two years to guard against supply shortages were further
reduced. Accounts receivable increased $.5 million compared with the prior
year-end, primarily due to a change in the regular payment schedule for a
certain customer and not due to any specific collection concern. The accrual for
profit sharing contribution increased $.1 million compared to the prior year,
due to more profitable operations in 2006, while the remaining accrued expenses
decreased $.3 million as accrued plant closing expenses as of December 31, 2006
were offset by reductions in the liability for income taxes and customer
deposits. The Company's investing activities in 2006 primarily consisted of
capital expenditures of $1.3 million and the net investment in certificates of
deposit of $4.4 million. The only financing activity during 2006 was the payment
of $.7 million in dividends. The Company has a $1.0 million line of credit,
which expires May 31, 2007. This line of credit remains unused.

- --------------------------------------------------------------------------------

 2
<PAGE>
MANAGEMENT'S REPORT
(Continued)                                                 [CHIGAGO RIVET LOGO]
- --------------------------------------------------------------------------------

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, 2006:

<Table>
<Caption>
                                      PAYMENTS DUE BY PERIOD
                       ----------------------------------------------------
                                    LESS                             MORE
CONTRACTUAL                         THAN      1 - 3      4 - 5       THAN
OBLIGATION              TOTAL      1 YEAR     YEARS      YEARS     5 YEARS
- -----------            --------   --------   --------   --------   --------
<S>                    <C>        <C>        <C>        <C>        <C>
Long-term Debt.......  $     --   $     --   $     --   $     --   $     --
Capital Lease
 Obligations.........        --         --         --         --         --
Operating Leases.....    39,934     29,830     10,104         --         --
Purchase
 Obligations.........   286,884    257,605     28,163      1,116         --
                       --------   --------   --------   --------   --------
Total................  $326,818   $287,435   $ 38,267   $  1,116   $     --
                       ========   ========   ========   ========   ========
</Table>

    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, 2006, the Company did not have any outstanding debt. The
Company did not use any derivative financial instruments during 2006.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

    The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States
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. 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
that they would not 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 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
ended December 31, 2005.

    The report of PricewaterhouseCoopers LLP on the Company's financial
statements for the year ended December 31, 2004 did not contain an adverse
opinion or a disclaimer of opinion and is not qualified or modified as to
uncertainty, audit scope or accounting principle. During the year ended December
31, 2004 and through March 21, 2005, there were 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 that year. During the year
ended December 31, 2004 and through March 21, 2005, there were 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."

- --------------------------------------------------------------------------------

                                                                               3
<PAGE>
MANAGEMENT'S REPORT
(Continued)
- --------------------------------------------------------------------------------

PERSONNEL

    On May 9, 2006, the Board of Directors elected Michael J. Bourg to the
positions of President, Chief Operating Officer and Treasurer of the Company,
replacing John C. Osterman who had announced on November 21, 2005 his intention
to retire from the Company.

OUTLOOK FOR 2007

    While we are certainly pleased to report a return to profitable operations
in 2006, many challenges are evident as we begin the new year. Automotive
industry conditions continue to be challenging domestically due to overcapacity,
high retiree benefits costs and intense competition. Due to our heavy reliance
upon the domestic auto market we are impacted by these conditions. We expect
these conditions to continue for the foreseeable future as end-users of our
products continue to look for cost savings in their own operations. The domestic
"Big Three" automakers are at varying stages of well-publicized restructurings
and the effects of these restructurings on their suppliers remain unclear. At
the same time, customer demand for higher quality and lower prices continues
unabated. While we have obtained sales from customers that supply the import
brands, we will need to further penetrate that market to offset production cuts
of the domestic brands. Our ability to increase revenues as well as diversifying
our customer base will be a significant factor in our future growth.

    Although we reported higher revenues and profits in the assembly equipment
segment during 2006, our volume of activity measured in units sold actually
declined. Given industrial output data currently available, we have no reason to
expect any significant improvement in this segment in the near-term. The
increase reported in 2006 was primarily due to specialty equipment sales, which
although providing higher revenue opportunities, are also less predictable in
nature.

    We will continue our efforts to increase our sales revenues in all markets
by emphasizing value over price and will focus on more complex products used by
customers for which our expertise, service and unsurpassed quality are important
factors in making purchasing decisions. At the same time, we will continue to
pursue solutions that help improve our operations at all levels while continuing
our efforts to control operating costs.

    Our future success is dependent on how we anticipate, and respond to, many
ever-changing factors. We believe that the valuable contributions of our
employees, whose dedicated efforts allowed for the turnaround achieved in 2006,
and our sound financial condition, will help us face the challenges ahead in
2007. We also wish to thank our customers and our shareholders for their
continued support.

                                     Respectfully,

<Table>
  <S>                                         <C>

      /s/ J. A. MORRISSEY                         /s/ MICHAEL J. BOURG
       John A. Morrissey                            Michael J. Bourg
            Chairman                                   President
</Table>

March 20, 2007

FORWARD-LOOKING STATEMENTS

     This discussion contains certain "forward-looking statements" which are
inherently subject to risks and uncertainties that may cause actual events to
differ materially from those discussed herein. Factors which may cause such
differences in events include, those disclosed under "Risk Factors" in our
Annual Report on Form 10-K and in the other filings we make with the United
States Securities and Exchange Commission. These factors, include among other
things: conditions in the domestic automotive industry, upon which we rely for
sales revenue, the intense competition in our markets, the concentration of our
sales to two major customers, the price and availability of raw materials, labor
relations issues, losses related to product liability, warranty and recall
claims, costs relating to environmental laws and regulations, and the loss of
the services of our key employees. 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.

- --------------------------------------------------------------------------------

 4
<PAGE>

                                                            [CHICAGO RIVET LOGO]
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>

- -----------------------------------------------------------------------------------------------
December 31                                                        2006                2005
- -----------------------------------------------------------------------------------------------
<S>                                                             <C>                 <C>
                           ASSETS
Current Assets
  Cash and Cash Equivalents.................................    $   367,581         $ 4,730,837
  Certificates of Deposit...................................      5,405,000           1,005,000
  Accounts Receivable -- Less allowances of $150,000 and
     $210,000, respectively.................................      5,902,628           5,370,611
  Inventories...............................................      5,481,309           5,971,695
  Deferred Income Taxes.....................................        499,191             560,191
  Prepaid Income Taxes......................................        118,914                  --
  Other Current Assets......................................        294,593             232,142
                                                                -----------         -----------
  Total Current Assets......................................     18,069,216          17,870,476
Net Property, Plant and Equipment...........................      9,837,260          10,051,508
                                                                -----------         -----------
Total Assets................................................    $27,906,476         $27,921,984
                                                                ===========         ===========


            LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Accounts Payable..........................................    $ 1,431,468         $ 1,452,314
  Accrued Wages and Salaries................................        693,442             680,969
  Accrued Profit Sharing Plan Contribution..................        225,000             125,000
  Accrued Plant Closing Expense.............................        217,443                  --
  Other Accrued Expenses....................................        259,680             772,270
                                                                -----------         -----------
  Total Current Liabilities.................................      2,827,033           3,030,553
Deferred Income Taxes.......................................      1,076,275           1,313,275
                                                                -----------         -----------
  Total Liabilities.........................................      3,903,308           4,343,828
                                                                -----------         -----------
Commitments and Contingencies (Note 10).....................             --                  --
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.........................................     26,340,036          25,915,024
  Treasury Stock, 171,964 Shares at cost....................     (3,922,098)         (3,922,098)
                                                                -----------         -----------
  Total Shareholders' Equity................................     24,003,168          23,578,156
                                                                -----------         -----------
Total Liabilities and Shareholders' Equity..................    $27,906,476         $27,921,984
                                                                ===========         ===========
</Table>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.

- --------------------------------------------------------------------------------
                                                                               5
<PAGE>
[CHICAGO RIVET LOGO]
- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF INCOME

<Table>
<Caption>

- -----------------------------------------------------------------------------------------------
For the Years Ended December 31                          2006           2005           2004
- -----------------------------------------------------------------------------------------------
<S>                                                   <C>            <C>            <C>
Net Sales and Lease Revenue.......................    $40,369,977    $39,760,756    $39,232,866
Cost of Goods Sold and Costs Related to Lease
  Revenue.........................................     32,529,465     34,060,469     30,954,797
                                                      -----------    -----------    -----------
Gross Profit......................................      7,840,512      5,700,287      8,278,069
Selling and Administrative Expenses...............      6,033,699      6,723,386      6,041,045
Plant Closing Expenses............................        422,934             --             --
                                                      -----------    -----------    -----------
Operating Profit (Loss)...........................      1,383,879     (1,023,099)     2,237,024
Other Income, net.................................        264,748        418,487         78,410
                                                      -----------    -----------    -----------
Income (Loss) Before Income Taxes.................      1,648,627       (604,612)     2,315,434
Provision for Income Taxes........................        528,000       (206,000)       792,000
                                                      -----------    -----------    -----------
Net Income (Loss).................................    $ 1,120,627    $  (398,612)   $ 1,523,434
                                                      ===========    ===========    ===========
Net Income (Loss) Per Share.......................    $      1.16    $      (.41)   $      1.58
                                                      ===========    ===========    ===========
</Table>

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

<Table>
<Caption>

- -----------------------------------------------------------------------------------------------
For the Years Ended December 31                          2006           2005           2004
- -----------------------------------------------------------------------------------------------
<S>                                                   <C>            <C>            <C>
Retained Earnings at Beginning of Year............    $25,915,024    $27,154,171    $26,326,352
Net Income (Loss).................................      1,120,627       (398,612)     1,523,434
Cash Dividends Paid, $.72 Per Share in 2006, $.87
  Per Share in 2005 and $.72 Per Share in 2004....       (695,615)      (840,535)      (695,615)
                                                      -----------    -----------    -----------
Retained Earnings at End of Year..................    $26,340,036    $25,915,024    $27,154,171
                                                      ===========    ===========    ===========
</Table>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.

- --------------------------------------------------------------------------------
 6
<PAGE>
                                                            [CHIGAGO RIVET LOGO]
- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>

- ---------------------------------------------------------------------------------------------------
For the Years Ended December 31                              2006           2005           2004
- ---------------------------------------------------------------------------------------------------
<S>                                                       <C>            <C>            <C>
Cash Flows from Operating Activities:
Net Income (Loss).....................................    $ 1,120,627    $  (398,612)   $ 1,523,434
Adjustments to Reconcile Net Income (Loss) to Net Cash
  Provided by Operating Activities:
  Depreciation and Amortization.......................      1,659,834      1,703,382      1,757,962
  Net (Gain) Loss on the Sale of Properties...........        (16,830)        38,088          2,148
  Gain from Demutualization...........................             --       (256,660)            --
  Deferred Income Taxes...............................       (176,000)      (244,000)        19,000
  Changes in Operating Assets and Liabilities:
    Accounts Receivable, net..........................       (532,017)      (502,996)      (318,447)
    Inventories.......................................        490,386        270,775     (1,008,682)
    Other Current Assets..............................       (181,365)       (12,645)          (937)
    Accounts Payable..................................       (145,120)        81,239         40,501
    Accrued Wages and Salaries........................         12,473        (25,732)       (47,693)
    Accrued Profit Sharing Plan Contribution..........        100,000       (127,312)       119,069
    Other Accrued Expenses............................       (295,147)       167,625        233,705
                                                          -----------    -----------    -----------
         Net Cash Provided by Operating Activities....      2,036,841        693,152      2,320,060
                                                          -----------    -----------    -----------
Cash Flows from Investing Activities:
  Capital Expenditures................................     (1,327,482)      (643,308)    (1,342,906)
  Proceeds from the Sale of Properties................         23,000            500          2,730
  Proceeds from Demutualization.......................             --        256,660             --
  Proceeds from Certificates of Deposit...............     13,425,000      1,035,000        665,000
  Purchases of Certificates of Deposit................    (17,825,000)    (1,235,000)    (1,015,000)
                                                          -----------    -----------    -----------
       Net Cash Used in Investing Activities..........     (5,704,482)      (586,148)    (1,690,176)
                                                          -----------    -----------    -----------
Cash Flows from Financing Activities:
  Cash Dividends Paid.................................       (695,615)      (840,535)      (695,615)
                                                          -----------    -----------    -----------
       Net Cash Used in Financing Activities..........       (695,615)      (840,535)      (695,615)
                                                          -----------    -----------    -----------
Net Decrease in Cash and Cash Equivalents.............     (4,363,256)      (733,531)       (65,731)
Cash and Cash Equivalents:
  Beginning of Year...................................      4,730,837      5,464,368      5,530,099
                                                          -----------    -----------    -----------
  End of Year.........................................    $   367,581    $ 4,730,837    $ 5,464,368
                                                          ===========    ===========    ===========
Cash Paid During the Year for:
  Income Taxes........................................    $ 1,015,091    $        --    $   573,307
Supplemental Schedule of Non-cash Investing
  Activities:
  Capital Expenditures in Accounts Payable............    $   124,274    $     3,854    $    16,676
</Table>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.

- --------------------------------------------------------------------------------
                                                                               7
<PAGE>

(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 SEC Staff Accounting Bulletin No. 104. 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 ("FAS 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 FAS 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 Emerging Issues Task Force "EITF"
Abstract 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, whereby the Company 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,
including certificates of deposit, 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 placed in
service. The estimated useful lives by asset category are:

<Table>
<Caption>
Asset category                              Estimated useful life
- -----------------------------------------------------------------
<S>                                         <C>
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
</Table>

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 in current operations. 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 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 2006, 2005 and 2004.

USE OF 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 consolidated financial
statements and the accompanying notes. Significant items subject to estimates
and assumptions include deferred taxes and valuation allowances for accounts

- --------------------------------------------------------------------------------
 8
<PAGE>

                                                            (CHIGAGO RIVET LOGO)
- --------------------------------------------------------------------------------

receivable and inventory obsolescence. Actual results could differ from those
estimates.

RECENT ACCOUNTING PRONOUNCEMENTS--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 "Accounting for
Uncertainty in Income Taxes" ("FIN 48"), to create a single model to address
accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for
income taxes by prescribing a minimum recognition threshold a tax position is
required to meet before being recognized in the financial statements. FIN 48
also provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosures and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. The Company will adopt FIN
48 as of January 1, 2007, as required. The Company has estimated that its
potential impact to retained earnings will not be material.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108 ("SAB 108"),
to address diversity in practice in quantifying financial statement
misstatements. SAB 108 requires that the Company quantify misstatements based on
their impact on each of its financial statements and related disclosures. SAB
108 is to become effective for fiscal years ending after November 15, 2006. The
Company has adopted SAB 108 effective as of December 31, 2006. The adoption of
this bulletin did not have a material impact on its financial position and
results of operations.
In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157 ("FAS 157"), "Fair Value Measurements." FAS 157 defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
This statement applies under other accounting pronouncements that require or
permit fair value measurements and, accordingly, FAS 157 does not require any
new fair value measurements. The Company is currently evaluating the impact this
standard will have on its operating income and statement of financial position.
This statement is effective for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The Company will adopt FAS 157 as
of January 1, 2008, as required.

2--BALANCE SHEET DETAILS

<Table>
<Caption>
                                      2006            2005
                                  ------------    ------------
<S>                               <C>             <C>
Inventories:
  Raw materials.................  $ 1,333,857     $ 1,586,744
  Work in process...............    1,907,653       2,218,774
  Finished goods................    2,239,799       2,166,177
                                  -----------     -----------
                                  $ 5,481,309     $ 5,971,695
                                  ===========     ===========
Net Property, Plant and
  Equipment:
  Land and improvements.........  $ 1,029,035     $ 1,029,035
  Buildings and improvements....    6,321,609       6,251,144
  Machinery and equipment,
    leased machines and other...   29,411,746      29,163,667
                                  -----------     -----------
                                   36,762,390      36,443,846
  Accumulated depreciation......   26,925,130      26,392,338
                                  -----------     -----------
                                  $ 9,837,260     $10,051,508
                                  ===========     ===========
Other Accrued Expenses:
  Property taxes................  $   116,250     $   115,799
  Unearned revenue and customer
    deposits....................      104,676         339,943
  All other items...............       38,754         316,528
                                  -----------     -----------
                                  $   259,680     $   772,270
                                  ===========     ===========
</Table>

3--LEASED MACHINES--Lease revenue amounted to $100,948 in 2006, $107,298 in 2005
and $107,976 in 2004. 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:

<Table>
<Caption>
                                          2006         2005
                                        ---------    ---------
<S>                                     <C>          <C>
Cost..................................  $232,499     $246,965
Accumulated depreciation..............   221,356      233,873
                                        --------     --------
Carrying value........................  $ 11,143     $ 13,092
                                        ========     ========
</Table>

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

<Table>
<Caption>
                              2006         2005         2004
                           ----------   ----------   -----------
<S>                        <C>          <C>          <C>
Current:
  Federal................  $  699,000   $   38,000   $   766,000
  State..................       5,000           --         7,000
Deferred.................    (176,000)    (244,000)       19,000
                           ----------   ----------   -----------
                           $  528,000   $ (206,000)  $   792,000
                           ==========   ==========   ===========
</Table>

The deferred tax liabilities and assets consist of the following:

<Table>
<Caption>
                                      2006            2005
                                  ------------    ------------
<S>                               <C>             <C>
Depreciation and amortization...  $(1,076,275)    $(1,319,998)
                                  -----------     -----------
Inventory.......................      292,133         307,912
Accrued vacation................      152,993         176,076
Allowance for doubtful
  accounts......................       51,960          72,700
Other, net......................        2,105          10,226
                                  -----------     -----------
                                      499,191         566,914
                                  -----------     -----------
                                  $  (577,084)    $  (753,084)
                                  ===========     ===========
</Table>

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

<Table>
<Caption>
                                  2006                2005                2004
                            -----------------   -----------------   -----------------
                             AMOUNT       %      Amount       %       Amount      %
                            -----------------   -----------------   -----------------
<S>                         <C>         <C>     <C>         <C>     <C>          <C>
Expected tax at U.S.
 Statutory rate...........   $560,000    34.0   $(206,000)  (34.0)    $787,000   34.0
Permanent differences.....    (35,000)   (2.1)         --      --           --     --
State taxes, net of
 federal benefit..........      3,000      .1          --      --        5,000     .2
                            ---------   -----   ---------   -----   ----------   ----
Income tax expense
 (benefit)................   $528,000    32.0   $(206,000)  (34.0)    $792,000   34.2
                            =========   =====   =========   =====   ==========   ====
</Table>

5--NOTE PAYABLE--The Company has a $1 million line of credit, which expires May
31, 2007, and remained unused at December 31, 2006. The line is unsecured and
bears interest at a variable rate that is based upon, at the election of the
Company, Bank of America's prime rate less an applicable margin or the London
Inter-Bank Offering Rate plus an applicable margin.

6--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 $225,000 in 2006, $125,000 in 2005 and
$252,000 in 2004.

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

<Table>
<Caption>
                                 2006       2005       2004
                               --------   --------   --------
<S>                            <C>        <C>        <C>
Interest income..............  $249,618   $148,049   $ 64,488
Gain from demutualization....        --    256,660         --
Other........................    15,130     13,778     13,922
                               --------   --------   --------
                               $264,748   $418,487   $ 78,410
                               ========   ========   ========
</Table>

During 2005, the Company realized a gain of $256,660 from proceeds received due
to the demutualization of an insurance provider.

- --------------------------------------------------------------------------------
                                                                               9
<PAGE>

(CHIGAGO RIVET LOGO)
- --------------------------------------------------------------------------------

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

<Table>
<Caption>
                                                  ASSEMBLY
                                   FASTENER      EQUIPMENT       OTHER      CONSOLIDATED
                                  -----------   ------------   ----------   ------------
<S>                               <C>           <C>            <C>          <C>
YEAR ENDED DECEMBER 31, 2006:
Net sales and lease revenue.....  $34,421,398    $5,948,579    $       --   $40,369,977
Depreciation....................    1,467,984       101,210        90,640     1,659,834
Segment profit..................    2,454,068     1,493,852            --     3,947,920
Selling and administrative
 expenses.......................                               (2,125,977)   (2,125,977)
Plant closing expenses..........     (422,934)           --            --      (422,934)
Interest income.................                                  249,618       249,618
                                                                            ------------
Income before income taxes......                                              1,648,627
                                                                            ------------
Capital expenditures............    1,374,009            --        77,747     1,451,756
Segment assets:
 Accounts receivable............    5,363,451       539,177            --     5,902,628
 Inventory......................    3,877,545     1,603,764            --     5,481,309
 Property, plant and
   equipment....................    7,712,639     1,182,414       942,207     9,837,260
 Other assets...................           --            --     6,685,279     6,685,279
                                                                            ------------
                                                                             27,906,476
                                                                            ------------
Year Ended December 31, 2005:
Net sales and lease revenue.....  $33,949,293    $5,811,463    $       --   $39,760,756
Depreciation....................    1,519,971       104,968        78,443     1,703,382
Segment profit..................      180,156     1,249,094            --     1,429,250
Selling and administrative
 expenses.......................                               (2,438,571)   (2,438,571)
Interest income.................                                  148,049       148,049
Gain from demutualization.......                                  256,660       256,660
                                                                            ------------
Loss before income taxes........                                               (604,612)
                                                                            ------------
Capital expenditures............      451,601        35,555       160,006       647,162
Segment assets:
 Accounts receivable............    4,758,839       611,772            --     5,370,611
 Inventory......................    4,113,081     1,858,614            --     5,971,695
 Property, plant and
   equipment....................    7,807,711     1,283,624       960,173    10,051,508
 Other assets...................           --            --     6,528,170     6,528,170
                                                                            ------------
                                                                             27,921,984
                                                                            ------------
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 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
                                                                            ------------
</Table>

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 28, 24 and 22 percent and 13, 13 and 13 percent of consolidated revenues
during 2006, 2005 and 2004, respectively. The accounts receivable balances for
these customers accounted for 37 and 22 percent of consolidated accounts
receivable for the larger customer and 13 and 17 percent for the other customer,
as of December 31, 2006 and 2005, respectively.

9--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.

10--COMMITMENTS AND CONTINGENCIES--The Company recorded rent expense aggregating
approximately $48,000, $38,000 and $44,000 for 2006, 2005 and 2004,
respectively. Total future minimum rentals at December 31, 2006 are not
significant.

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.

11--PLANT CLOSING--The Company recorded various charges during 2006 related to
the closure of its Jefferson, Iowa facility. The facility had been operating
below capacity, and the Company determined to transfer production activities to
Tyrone, Pennsylvania as part of its cost savings efforts. The Jefferson facility
ceased operations in December 2006. As a result of the closure, the Company
recorded plant closing expenses of $422,934. Additional expenses may be incurred
in preparing the facility for sale.

The following is a summary of liabilities recorded on the accompanying balance
sheet as accrued plant closing expenses at December 31, 2006:

<Table>
<Caption>
                             SEVERANCE    FACILITY
                                AND        CLOSURE
                              BENEFITS      COSTS       TOTAL
                             ----------   ---------   ----------
<S>                          <C>          <C>         <C>
Balance at January 1,
  2006.....................  $       --   $      --   $       --
  Charge...................     347,929      75,005      422,934
  Payments.................    (170,855)    (34,636)    (205,491)
  Non-cash reduction.......          --          --           --
                             ----------   ---------   ----------
Balance at December 31,
  2006.....................  $  177,074   $  40,369   $  217,443
                             ==========   =========   ==========
</Table>

Future cash outlays related to the closure are anticipated to be $217,443 in
fiscal year 2007.

12--SUBSEQUENT EVENT--On February 19, 2007, the Board of Directors declared a
regular quarterly dividend of $.18 per share, payable March 20, 2007 to
shareholders of record on March 5, 2007.

- --------------------------------------------------------------------------------
 10
<PAGE>

                                                            [CHIGAGO RIVET LOGO]
- --------------------------------------------------------------------------------

REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

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

     We have audited the accompanying consolidated balance sheets of Chicago
Rivet & Machine Co. (an Illinois corporation) and subsidiary as of December 31,
2006 and 2005, and the related consolidated statements of income, retained
earnings and cash flows for the years then ended. These consolidated 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. The consolidated financial statements of Chicago Rivet & Machine Co.
and subsidiary as of and for the year ended December 31, 2004, were audited by
other auditors. Those auditors expressed an unqualified opinion on those
financial statements in their report dated March 21, 2005.

     We conducted our audits 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. The Company is not
required to have, nor were we engaged to perform an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Chicago
Rivet & Machine Co. and subsidiary as of December 31, 2006 and 2005, and the
results of their operations and their cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

- -s- Grant Thornton LLP

Chicago, Illinois
March 20, 2007

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

     In our opinion, the consolidated statements of income, retained earnings
and cash flows for the year ended December 31, 2004 present fairly, in all
material respects, the results of operations and cash flows of Chicago Rivet &
Machine Co. and its subsidiary for the year 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 audit. We conducted our audit 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
audit provides a reasonable basis for our opinion.

- -s- PricewaterhouseCoopers LLP

Chicago, Illinois
March 21, 2005

- --------------------------------------------------------------------------------
                                                                              11
<PAGE>

[CHICAGO RIVET LOGO]
- --------------------------------------------------------------------------------
QUARTERLY FINANCIAL DATA (UNAUDITED)

<Table>
<Caption>
                           1ST           2ND          3RD          4TH
                         QUARTER       QUARTER      QUARTER      QUARTER
                       -----------   -----------   ----------   ----------
<S>                    <C>           <C>           <C>          <C>
2006
Net Sales and Lease
 Revenue.............  $10,940,951   $11,057,366   $9,132,463   $9,239,197
Gross Profit.........    2,155,170     2,677,842    1,779,827    1,227,673
Net Income...........      389,284       468,526      238,179       24,638
Per Share Data:
 Net Income Per
   Share.............          .40           .49          .24          .03
 Average Common
   Shares
   Outstanding.......      966,132       966,132      966,132      966,132

2005
Net Sales and Lease
 Revenue.............  $10,082,862   $10,064,392   $9,718,361   $9,895,141
Gross Profit.........    1,602,439     1,417,751    1,459,759    1,220,338
Net Income (Loss)....      (76,765)     (152,487)    (169,780)         420
Per Share Data:
 Net Income (Loss)
   Per Share.........         (.08)         (.16)        (.17)         .00
 Average Common
   Shares
   Outstanding.......      966,132       966,132      966,132      966,132

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
</Table>

INFORMATION ON COMPANY'S COMMON STOCK

The Company's common stock is traded on the American Stock Exchange (trading
privileges only, not registered.) The ticker symbol is: CVR.

At December 31, 2006, there were approximately 250 shareholders of record.

The transfer agent and registrar for the Company's common stock is:
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, Rhode Island 02940-3078


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

<Table>
<Caption>


                        Dividends
                         Declared                  Market Range
                       ----------------------------------------------------
Quarter                2006    2005          2006                2005
- ---------------------  ----    ----    ----------------    ----------------
<S>                    <C>     <C>     <C>       <C>       <C>       <C>
First................  $.18    $.33*   $21.00    $17.50    $32.69    $27.40
Second...............   .18     .18    $24.25    $19.45    $32.25    $28.60
Third................   .18     .18    $24.89    $22.00    $29.25    $24.20
Fourth...............   .18     .18    $24.55    $20.29    $24.37    $20.00
</Table>

- ---------------
* Includes an extra dividend of $.15 per share.

SELECTED FINANCIAL DATA

<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------------------------
                                                           2006           2005           2004           2003           2002
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>            <C>            <C>            <C>            <C>
Net Sales and Lease Revenue                             $40,369,977    $39,760,756    $39,232,866    $38,190,908    $43,012,766
- -------------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before Income Taxes                         1,648,627       (604,612)     2,315,434      1,242,527      3,961,075
- -------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss)                                         1,120,627       (398,612)     1,523,434        817,527      2,604,075
- -------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) Per Share                                    1.16           (.41)          1.58            .85           2.69
- -------------------------------------------------------------------------------------------------------------------------------
Dividends Per Share                                             .72            .87            .72            .97            .87
- -------------------------------------------------------------------------------------------------------------------------------
Average Common Shares Outstanding                           966,132        966,132        966,132        966,132        966,537
- -------------------------------------------------------------------------------------------------------------------------------
Working Capital                                          15,242,183     14,839,923     15,222,262     14,020,185     12,874,182
- -------------------------------------------------------------------------------------------------------------------------------
Total Assets                                             27,906,476     27,921,984     29,299,457     28,138,380     30,088,173
- -------------------------------------------------------------------------------------------------------------------------------
Total Debt                                                       --             --             --             --      1,632,760
- -------------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity                                     24,003,168     23,578,156     24,817,303     23,989,484     24,109,105
- -------------------------------------------------------------------------------------------------------------------------------
</Table>

- --------------------------------------------------------------------------------
 12
<PAGE>

                                                            [CHICAGO RIVET LOGO]
- --------------------------------------------------------------------------------

                            STOCK PERFORMANCE GRAPH

     The graph set forth below shows the cumulative total return to shareholders
for the five-year period ended December 31, 2006 for the Company's common stock,
as compared to the Total Return Index for the American Stock Exchange (US) and
the Dow Jones US Auto Parts Index. The graph assumes $100 was invested on
December 31, 2001, in Chicago Rivet & Machine Co., in the American Stock
Exchange (US) and the Dow Jones US Auto Parts Index. Cumulative total
shareholder return assumes all dividends are reinvested. The values shown in the
graph are as of the end of each period indicated.

                  COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Chicago Rivet & Machine Co., the Total Return Index for the American Stock
                                    Exchange
                   (US) and the Dow Jones US Auto Parts Index

                                  (LINE GRAPH)

<Table>
<Caption>
- --------------------------------------------------------------------------------------------
                        12/31/01    12/31/02    12/31/03    12/31/04    12/31/05    12/31/06
- --------------------------------------------------------------------------------------------
<S>                     <C>         <C>         <C>         <C>         <C>         <C>
 Chicago Rivet &
  Machine Co. ......      100         104         129         133         101         110
- --------------------------------------------------------------------------------------------
 Dow Jones US Auto
  Parts Index.......      100          90         128         135         114         122
- --------------------------------------------------------------------------------------------
 Amex Total Return
  US................      100          82         111         128         138         160
- --------------------------------------------------------------------------------------------
</Table>

BOARD OF DIRECTORS

MICHAEL J. BOURG(e)
President of the Company

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

JOHN A. MORRISSEY
Chairman, Chief
Executive Officer

MICHAEL J. BOURG
President, Chief Operating
Officer and Treasurer

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

KIMBERLY A. KIRHOFER
Secretary

Chicago Rivet & Machine Co. - 901 Frontenac Road - P.O. Box 3061 - Naperville,
Illinois 60566 - www.chicagorivet.com

- --------------------------------------------------------------------------------
<PAGE>

                      [CHICAGO RIVET GRAPHIC & LETTERHEAD]

- --------------------------------------------------------------------------------
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>3
<FILENAME>c13090exv21.txt
<DESCRIPTION>SUBSIDIARIES
<TEXT>
<PAGE>

                                   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.

                                       41

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>4
<FILENAME>c13090exv31w1.txt
<DESCRIPTION>CERTIFICATION OF CEO PURSUANT TO SECTION 302
<TEXT>
<PAGE>

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 21, 2007                               /s/ John A. Morrissey
                                                   ------------------------
                                                   John A. Morrissey
                                                   Chief Executive Officer

                                       42
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>5
<FILENAME>c13090exv31w2.txt
<DESCRIPTION>CERTIFICATION OF CFO PURSUANT TO SECTION 302
<TEXT>
<PAGE>

EXHIBIT 31.2

      I, Michael J. Bourg, 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 21, 2007                       /s/ Michael J. Bourg
                                           --------------------
                                           Michael J. Bourg
                                           Chief Financial Officer

                                       43
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>6
<FILENAME>c13090exv32w1.txt
<DESCRIPTION>CERTIFICATION OF CEO PURSUANT TO SECTION 906
<TEXT>
<PAGE>

                                  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, 2006 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 21, 2007

                                       44

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>7
<FILENAME>c13090exv32w2.txt
<DESCRIPTION>CERTIFICATION OF CFO PURSUANT TO SECTION 906
<TEXT>
<PAGE>

                                  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, 2006 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Michael
J. Bourg, 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/ Michael J. Bourg
- --------------------------------
Name:  Michael J. Bourg
Title: Chief Financial Officer
Date:  March 21, 2007

                                       45
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
