Chicago Rivet & Machine Co. filed SEC Form 8-K: Other Events
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Item 8.01 Other Events.
Chicago Rivet and Machine Co. (the “Company”), headquartered in Naperville, Illinois, previously disclosed in its quarterly report for the first quarter of 2024 that it was notified by one of its customers that certain fasteners manufactured by the Company’s wholly-owned subsidiary, H&L Tool Company, may not have conformed to customer specifications. These fasteners become part of an assembly that is used in the braking system of certain vehicles manufactured by our customer’s OEM customer. Based on discussions with our customer and the Company’s own internal analysis, we recorded a contingent liability of $243,000 in our financial statements for the three month period ended March 31, 2024, and we further noted at that time that discussions with our customer and our internal review process were ongoing, and that the ultimate amount of any liability may be more than the amount reflected in our financial statements for the first quarter of 2024.
Since that time, the Company has been engaged in discussions with its customer to quantify costs and determine responsibility for such costs. Based on those discussions, an agreement has been reached with our customer to resolve the matter. As part of the agreement, and in exchange for a full release of any further potential liability, the Company has agreed to pay an aggregate of $1.1 million in substantially equal installments over a five (5) year period. This aggregate amount includes the $243,000 amount previously reserved as a contingent liability in the first quarter of 2024. As a result, the Company intends to recognize an additional accrual of $857,000 for the three month period ended December 31, 2024 to reflect the full amount of the payment. The Company believes that this agreement is in its best interest as it includes a release of liability as noted above and avoids further dispute and potential litigation, as well as the costs associated with any such potential litigation relating to this matter.
This Current Report on Form 8-K contains certain “forward-looking statements” that are inherently subject to risks and uncertainties that may cause actual events to differ materially from those discussed herein. These statements, which are generally identifiable by the use of the words "will," "believe," "expect," "intend," "anticipate," "estimate," "forecast," "project," "plan" and similar expressions, are based on the beliefs and assumptions of management based on information available to the Company at the time such statements are made. Also, please refer to the risks and factors disclosed under “Risk Factors” in the Company’s Annual Report on Form 10-K and in the other filings the Company makes with the Securities and Exchange Commission for additional factors that could cause the Company’s actual results to differ from these forward looking statements. Many of these factors are beyond the Company’s ability to control or predict. The Company cautions that undue reliance should not be placed on forward-looking statements, which speak only as of the date made.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CHICAGO RIVET & MACHINE CO. |
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Date: December 20, 2024 |
By: /s/ Gregory D. Rizzo |
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Name: Gregory D. Rizzo |
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Title: Chief Executive Officer |