<PAGE> 1
CONFORMED
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OF THE
SECURITIES EXCHANGE ACT of 1934
For Quarter ended July 31, 1996
Commission file number: 0-6056
Michigan Rivet Corporation
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(exact name of registrant as specified in its charter)
Michigan 38-1887153
- ------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
13201 Stephens Road; Warren, MI 48089
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (810) 754-5100
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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 XX No
------ ------
There were 638,525 outstanding shares of the registrant's common stock, $1.00
par value, as of July 31, 1996, close of the period covered by this report.
1
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MICHIGAN RIVET CORPORATION
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the interim
periods are not necessarily indicative of the results that may be expected for
the year. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended October 31, 1995.
2
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PART I. FINANCIAL INFORMATION FORM 10-Q
ITEM 1. FINANCIAL STATEMENTS
MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
July 31, October 31,
1996 1995
------------ -----------
<S> <C> <C>
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,164 $ 110,682
Accounts receivable, less allowance of $50,000 . . . . . 4,382,322 5,368,533
Inventories . . . . . . . . . . . . . . . . . . . . . . . 4,772,944 4,968,944
Deferred federal income taxes . . . . . . . . . . . . . . 697,639 697,639
Prepaid expenses and other current assets . . . . . . . . 187,617 182,590
------------- -------------
TOTAL CURRENT ASSETS . . . . 10,050,686 11,328,388
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . 505,324 505,324
Property, Plant and Equipment . . . . . . . . . . . . . . . . 23,634,554 22,999,298
Less accumulated depreciation . . . . . . . . . . . . . . 14,809,113 14,178,218
------------- -------------
8,825,441 8,821,080
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$ 19,381,451 $ 20,654,792
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable to bank . . . . . . . . . . . . . . . . . . $ 0 $ 309,000
Accounts payable . . . . . . . . . . . . . . . . . . . . 2,512,860 3,569,626
Payroll and employee benefits . . . . . . . . . . . . . . 642,661 945,252
Other accrued expenses . . . . . . . . . . . . . . . . . 446,247 599,601
Current maturities of long-term debt . . . . . . . . . . 691,039 691,039
------------- -------------
TOTAL CURRENT LIABILITIES . . 4,292,807 6,114,518
Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . 3,909,778 4,436,829
Accrued Retiree Health Liability . . . . . . . . . . . . . . 3,149,681 2,732,084
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . 25,000 25,000
Shareholders' Equity
Common stock - $1 par value
Authorized - 1,000,000 shares
Outstanding - 638,525 shares . . . . . . . . . . . . 638,525 638,525
Other capital . . . . . . . . . . . . . . . . . . . . . . 117,403 117,403
Retained earnings . . . . . . . . . . . . . . . . . . . . 7,248,257 6,590,433
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8,004,185 7,346,361
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$ 19,381,451 $ 20,654,792
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
3
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FORM 10-Q
MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31 July 31
---------------------------- -----------------------------
1996 1995 1996 1995
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . $ 10,010,527 $ 8,891,606 $ 29,837,763 $ 29,266,241
Cost and expenses:
Cost of products sold . . . . . 8,625,839 7,626,823 25,751,565 25,616,415
Selling, administrative
and general expenses . . . 900,104 856,507 2,479,830 2,477,343
Life Insurance Proceeds . . . . (1,141,394)
Interest expense . . . . . . . 116,684 161,416 367,834 527,317
------------ ------------ ------------- -------------
9,642,627 8,644,746 28,599,229 27,479,681
------------ ------------ ------------- -------------
Income before
income taxes . . . . . . 367,900 246,860 1,238,534 1,786,560
Income taxes . . . . . . . . . . . 126,000 84,000 422,000 608,000
------------ ------------ ------------- -------------
Net Income . . . . . . . . $ 241,900 $ 162,860 $ 816,534 $ 1,178,560
============ ============ ============= =============
Net Income per share . . . . . . . $ .38 $ .26 $ 1.28 $ 1.85
======== ======== ======== =========
Dividends per share . . . . . . . . $ .09 $ .08 $ .25 $ .16
======== ======== ======== =========
</TABLE>
See notes to condensed consolidated financial statements.
4
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FORM 10-Q
MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
July 31
-----------------------------
1996 1995
------------ -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 816,534 $ 1,178,560
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 796,100 815,132
Accrued retiree health liability . . . . . . . . . . . . 417,597 806,780
Cash provided from (used in) changes in
operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . 986,211 1,564,195
Inventories . . . . . . . . . . . . . . . . . . . . 196,000 279,400
Prepaid expenses and other current assets . . . . . (5,027) 64,525
Accounts payable & other accrued expenses.. . . . . (1,512,711) (717,694)
------------ -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES . . . . . . . . . . . . . . 1,694,704 3,990,898
INVESTING ACTIVITIES
Acquisition of property, plant and equipment . . . . . . . . (800,461) (1,019,697)
FINANCING ACTIVITIES
Net increase (decrease) in short-term debt . . . . . . . . . (309,000) (2,921,506)
Proceeds from long-term debt . . . . . . . . . . . . . . . . 750,000
Payments on long-term debt . . . . . . . . . . . . . . . . . (527,051) (323,879)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . (158,710) (98,851)
------------ -----------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES . . . . . . . . . . . . . . . . . . . (994,761) (2,594,236)
------------ -----------
INCREASE (DECREASE) IN CASH . . . . . . . . . . . (100,518) 376,965
Cash at beginning of period . . . . . . . . . . . . . . . . . . 110,682 638,266
------------ -----------
CASH AT END OF PERIOD . . . . . . . . . . . . . . $ 10,164 $ 1,015,231
============ ===========
</TABLE>
See notes to condensed consolidated financial statements.
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MICHIGAN RIVET CORPORATION
Results of Operations
Net sales in the quarter ended July 31, 1996 of $10,011,000 increased
$1,119,000, or 12.6% from the sales reported in the comparable period a year
ago. The growth in sales resulted from a change in product mix and price
improvements on some products. The net profit for the quarter ended July 31,
1996 was $242,000 vs. a net profit of $163,000 in the comparable period a year
ago.
The cost of sales percentage of 86% for the current fiscal year quarter is the
same as the comparable period a year ago.
The selling, general and administrative expense increase was primarily due to
higher sales commissions and Michigan Single Business Taxes, but the percent to
sales decreased to 9.0% from 9.6%.
Interest expense decreased $45,000 due primarily to cash generated from profits
reducing short-term debt. The rate paid by the Company to Comerica Bank is
tied to the prevailing prime rate.
For the first nine months of 1996, net sales of $29,838,000 were 2.0% greater
than the same period in 1995, due primarily to the growth of the automotive
market of 1% and a change in product mix. The net profit for the first nine
months of 1996 was $817,000 vs. a net profit of $1,179,000 in the comparable
period a year ago. The pretax profit of 1995 was favorably affected by life
insurance proceeds of $1,141,000.
Financial Condition
The Company has short-term credit lines aggregating $5,000,000. At July 31,
1996, zero dollars were outstanding.
6
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter ended July 31, 1996.
SIGNATURES
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.
Michigan Rivet Corporation
By /s/ William P. Lianos
-------------------------------
William P. Lianos
Executive Vice President and Treasurer
(Principal Financial & Accounting Officer)
Date 8-27-96
-----------------------------
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Exhibit Index
-------------
Exhibit
Number Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A)
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) 10-Q
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JUL-31-1996
<CASH> 10,164
<SECURITIES> 0
<RECEIVABLES> 4,432,322
<ALLOWANCES> 50,000
<INVENTORY> 4,772,944
<CURRENT-ASSETS> 11,050,686
<PP&E> 23,634,554
<DEPRECIATION> 14,809,113
<TOTAL-ASSETS> 19,381,451
<CURRENT-LIABILITIES> 4,292,807
<BONDS> 3,909,778
0
0
<COMMON> 638,525
<OTHER-SE> 7,365,660
<TOTAL-LIABILITY-AND-EQUITY> 19,381,451
<SALES> 29,837,763
<TOTAL-REVENUES> 29,837,763
<CGS> 25,751,565
<TOTAL-COSTS> 25,751,565
<OTHER-EXPENSES> 2,479,830
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 367,834
<INCOME-PRETAX> 1,238,534
<INCOME-TAX> 422,000
<INCOME-CONTINUING> 816,534
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 816,534
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.28
</TABLE>
