EXHIBIT 13

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

.
.
.

[CHICAGO RIVET LETTERHEAD]
- --------------------------------------------------------------------------------

HIGHLIGHTS

<Table>
<Caption>
- ------------------------------------------------------------------------------------------
2004 2003 2002
- ------------------------------------------------------------------------------------------

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

ANNUAL MEETING

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

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

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

TO OUR SHAREHOLDERS:

RESULTS OF OPERATIONS

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

2004 COMPARED TO 2003

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

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

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

2003 COMPARED TO 2002

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

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

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

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

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

MANAGEMENT'S REPORT
(Continued)
- --------------------------------------------------------------------------------

DIVIDENDS

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

PROPERTY, PLANT AND EQUIPMENT

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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

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

OFF-BALANCE SHEET ARRANGEMENTS

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

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

<Table>
<Caption>
PAYMENTS DUE BY PERIOD
--------------------------------------------------
LESS MORE
CONTRACTUAL THAN 1 - 3 4 - 5 THAN
OBLIGATION TOTAL 1 YEAR YEARS YEARS 5 YEARS
- ----------- -------- -------- -------- ------ --------

Long-term Debt....... $ -- $ -- $ -- $ -- $ --
Capital Lease
Obligations......... -- -- -- -- --
Operating Leases..... 9,164 9,164 -- -- --
Purchase
Obligations......... 254,770 133,428 117,950 3,392 --
-------- -------- -------- ------ --------
Total................ $263,934 $142,592 $117,950 $3,392 $ --
======== ======== ======== ====== ========
</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.

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

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

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the amounts of revenue and expenses during
the reporting period. During interim periods, the Company uses estimated gross
profit rates to determine the cost of goods sold for a small portion of its
operations. Actual results can vary from these estimates, and these estimates
are adjusted, as necessary, when actual information is available. The effect of
these estimates is described in Note 11 of the financial statements.

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

NEW ACCOUNTING STANDARDS

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

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

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

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

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

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

OUTLOOK FOR 2005

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

Activity within the assembly equipment segment continues to be a cause for
concern. Demand for our products remains at very low levels, and we have seen
little to suggest meaningful improvement in the near term. To the contrary,

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

MANAGEMENT'S REPORT
(Continued)
- --------------------------------------------------------------------------------

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

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

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

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

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

Respectfully,

<Table>

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

March 21, 2005

FORWARD-LOOKING STATEMENTS

This discussion contains certain "forward-looking statements" which are
inherently subject to risks and uncertainties that may cause actual events to
differ materially from those discussed herein. Factors which may cause such
differences in events include, among other things, our ability to maintain our
relationships with our significant customers; increased global competition;
increases in the prices of, or limitations on the availability of, our primary
raw materials; or a downturn in the automotive industry, upon which we rely for
sales revenue, and which is cyclical and dependent on, among other things,
consumer spending, international economic conditions and regulations and
policies regarding international trade. Many of these factors are beyond our
ability to control or predict. Readers are cautioned not to place undue reliance
on these forward-looking statements. We undertake no obligation to publish
revised forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

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

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

- -----------------------------------------------------------------------------------------------
December 31 2004 2003
- -----------------------------------------------------------------------------------------------

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

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

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

- --------------------------------------------------------------------------------
5

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

CONSOLIDATED STATEMENTS OF INCOME

- -----------------------------------------------------------------------------------------------
For the Years Ended December 31 2004 2003 2002
- -----------------------------------------------------------------------------------------------

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

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

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

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

- --------------------------------------------------------------------------------
6

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

- ---------------------------------------------------------------------------------------------------
For the Years Ended December 31 2004 2003 2002
- ---------------------------------------------------------------------------------------------------

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

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

- --------------------------------------------------------------------------------
7

(CHIGAGO RIVET LOGO)
- --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

1--NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

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

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

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

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

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

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

Asset category Estimated useful life
- ------------------------------------------------------------

<Table>

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 currently. Maintenance, repairs and minor betterments
that do not improve the related asset or extend its useful life are charged to
operations as incurred.

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

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

- --------------------------------------------------------------------------------
8

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

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

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

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

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

2--BALANCE SHEET DETAILS

<Table>
<Caption>
2004 2003
------------ ------------

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

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

<Table>
<Caption>
2004 2003
--------- ---------

Cost.................................. $264,231 $343,833
Accumulated depreciation.............. 246,589 331,933
-------- --------
Carrying value........................ $ 17,642 $ 11,900
======== ========
</Table>

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

<Table>
<Caption>
2004 2003 2002
---------- ---------- -----------

Current:
Federal................ $ 766,000 $ 408,000 $ 1,203,000
State.................. 7,000 5,000 10,000
Deferred................. 19,000 12,000 144,000
---------- ---------- -----------
$ 792,000 $ 425,000 $ 1,357,000
========== ========== ===========
</Table>

The deferred tax liabilities and assets consist of the following:

<Table>
<Caption>
2004 2003
------------ ------------

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

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

<Table>
<Caption>
2004 2003 2002
--------------- --------------- -----------------
AMOUNT % Amount % Amount %
--------------- --------------- -----------------

Expected tax at U.S. Statutory
rate.......................... $787,000 34.0 $422,000 34.0 $1,347,000 34.0
State taxes, net of federal
benefit....................... 5,000 .2 3,000 .2 7,000 .2
Other, net..................... -- -- -- -- 3,000 .1
-------- ---- -------- ---- ---------- ----
Income tax expense............. $792,000 34.2 $425,000 34.2 $1,357,000 34.3
======== ==== ======== ==== ========== ====
</Table>

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

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

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

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

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

<Table>
<Caption>
2004 2003 2002
------- -------- --------

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

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

- --------------------------------------------------------------------------------
9

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

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

<Table>
<Caption>
ASSEMBLY
FASTENER EQUIPMENT OTHER CONSOLIDATED
----------- ---------- ---------- ------------

YEAR ENDED DECEMBER 31, 2004:
Net sales and lease revenue..... $32,477,800 $6,755,066 $ -- $39,232,866
Depreciation.................... 1,513,978 112,868 131,116 1,757,962
Segment profit.................. 2,884,308 1,648,034 -- 4,532,342
Selling and administrative
expenses....................... 2,281,396 2,281,396
Interest expense................ -- --
Interest income................. (64,488) (64,488)
------------
Income before income taxes...... 2,315,434
------------
Capital expenditures............ 1,332,122 19,774 7,686 1,359,582
Segment assets:
Accounts receivable............ 4,318,921 548,694 -- 4,867,615
Inventory...................... 4,313,907 1,928,563 -- 6,242,470
Property, plant and
equipment.................... 8,912,268 1,355,437 878,611 11,146,316
Other assets................... -- -- 7,043,056 7,043,056
------------
29,299,457
------------
Year Ended December 31, 2003:
Net sales and lease revenue..... $31,024,036 $7,166,872 $ -- $38,190,908
Depreciation.................... 1,490,592 161,200 209,808 1,861,600
Segment profit.................. 2,084,889 1,482,888 -- 3,567,777
Selling and administrative
expenses....................... 2,374,490 2,374,490
Interest expense................ 22,847 22,847
Interest income................. (72,087) (72,087)
------------
Income before income taxes...... 1,242,527
------------
Capital expenditures............ 535,268 89,379 17,068 641,715
Segment assets:
Accounts receivable............ 3,836,968 712,200 -- 4,549,168
Inventory...................... 3,191,132 2,042,656 -- 5,233,788
Property, plant and
equipment.................... 9,099,003 1,448,530 1,002,041 11,549,574
Other assets................... -- -- 6,805,850 6,805,850
------------
28,138,380
------------
Year Ended December 31, 2002:
Net sales and lease revenue..... $34,991,758 $8,021,008 $ -- $43,012,766
Depreciation.................... 1,474,228 217,665 223,833 1,915,726
Segment profit.................. 4,499,657 2,325,353 -- 6,825,010
Selling and administrative
expenses....................... 2,868,149 2,868,149
Interest expense................ 79,556 79,556
Interest income................. (83,770) (83,770)
------------
Income before income taxes...... 3,961,075
------------
Capital expenditures............ 790,261 13,446 82,302 886,009
Segment assets:
Accounts receivable............ 4,115,988 878,709 -- 4,994,697
Inventory...................... 3,874,804 2,215,137 -- 6,089,941
Property, plant and
equipment.................... 10,054,327 1,530,960 1,196,911 12,782,198
Other assets................... -- -- 6,221,337 6,221,337
------------
30,088,173
------------
</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 13, 13 and 18 percent and 22, 21 and 17 percent of consolidated revenues
during 2004, 2003 and 2002, respectively.

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

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

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.

- --------------------------------------------------------------------------------
10

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

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

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois
March 21, 2005

SELECTED FINANCIAL DATA

<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------------------------
2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
11

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

<Table>
<Caption>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER
----------- ----------- ---------- -----------

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

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

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

INFORMATION ON COMPANY'S COMMON STOCK

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

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

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

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

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

Dividends
Declared Market Range
----------------------------------------------------
Quarter 2004 2003 2004 2003
- --------------------- ---- ---- ---------------- ----------------

First................ $.18 $.43* $31.70 $27.10 $25.50 $22.80
Second............... .18 .18 $29.98 $27.45 $26.26 $24.10
Third................ .18 .18 $27.50 $25.25 $29.99 $26.30
Fourth............... .18 .18 $27.61 $25.84 $28.24 $25.00
</Table>

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

- --------------------------------------------------------------------------------
12

[CHIGAGO RIVET LETTERHEAD]
- --------------------------------------------------------------------------------

BOARD OF DIRECTORS

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

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

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

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

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

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

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

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

JOHN C. OSTERMAN(e)
President of the Company

CORPORATE OFFICERS

JOHN A. MORRISSEY
Chairman, Chief
Executive Officer

JOHN C. OSTERMAN
President, Chief Operating
Officer and Treasurer

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

DONALD P. LONG
Vice President-Sales

KIMBERLY A. KIRHOFER
Secretary

MICHAEL J. BOURG
Corporate Controller

CHICAGO RIVET & MACHINE CO.

ADMINISTRATIVE & SALES OFFICES
Naperville, Illinois
Norwell, Massachusetts

MANUFACTURING FACILITIES
Albia Division
Albia, Iowa

Jefferson Division
Jefferson, Iowa

Tyrone Division
Tyrone, Pennsylvania

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

WEB SITE
www.chicagorivet.com

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

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

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

[CHICAGO RIVET GRAPHIC & LETTERHEAD]

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