<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, 1997
Commission file number: 0-6056
Michigan Rivet Corporation
------------------------------------------------------
(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
----------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (810) 754-5100
--------------
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, 1997, close of the period covered by this report.
1
<PAGE> 2
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, 1996.
2
<PAGE> 3
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,
1997 1996
------------ -------------
<S> <C> <C>
Current Assets:
Cash............................................ $ 294,666 $ 119,371
Accounts receivable, less allowance of $50,000.. 3,900,195 6,151,076
Inventories..................................... 4,591,302 4,704,302
Deferred federal income taxes................... 520,211 520,211
Prepaid expenses and other current assets....... 286,710 189,991
------------ ------------
TOTAL CURRENT ASSETS...... 9,593,084 11,684,951
Other Assets...................................... 703,466 704,191
Property, Plant and Equipment..................... 24,928,308 23,977,786
Less accumulated depreciation................... 15,685,705 15,067,089
------------ ------------
9,242,603 8,910,697
------------ ------------
$19,539,153 $ 21,299,839
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable to bank........................... $ 0 $ 0
Accounts payable................................ 3,349,121 3,813,348
Payroll and employee benefits................... 419,593 969,787
Other accrued expenses.......................... 208,067 361,270
Current maturities of long-term debt............ 334,815 684,815
------------ ------------
TOTAL CURRENT LIABILITIES 4,311,596 5,829,220
Long-Term Debt.................................... 2,655,188 3,746,600
Accrued Retiree Health Liability.................. 3,619,076 3,279,140
Deferred Income Taxes............................. 0 0
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............................... 8,197,365 7,688,951
------------ ------------
8,953,293 8,444,879
------------ ------------
$19,539,153 $ 21,299,839
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
FORM 10-Q
MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31 July 31
---------------------- -----------------------
1997 1996 1997 1996
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales....................... $ 9,766,777 $10,010,527 $31,253,533 $29,837,763
Cost and expenses:
Cost of products sold......... 8,758,751 8,625,839 27,434,691 25,751,565
Selling, administrative
and general expenses...... 817,314 900,104 2,435,950 2,479,830
Interest expense.............. 79,493 116,684 257,638 367,834
----------- ----------- ------------ ------------
9,655,558 9,642,627 30,128,279 28,599,229
----------- ----------- ------------ ------------
Income before
income taxes............ 111,219 367,900 1,125,254 1,238,534
Income taxes.................... 37,000 126,000 382,000 422,000
----------- ----------- ------------ ------------
Net Income................ $ 74,219 $ 241,900 $ 743,254 $ 816,534
=========== ========== ============ ============
Net Income per share............ $ .11 $ .38 $ 1.16 $ 1.28
=========== ========== ============ ============
Dividends per share............. $ .12 $ .09 $ .36 $ .25
=========== ========== ============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
FORM 10-Q
MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
July 31
----------------------------
1997 1996
------------- ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income......................................... $ 743,254 $ 816,534
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation................................... 809,100 796,100
Accrued retiree health liability............... 339,936 417,597
Cash provided from (used in) changes in
operating assets and liabilities:
Accounts receivable........................ 2,250,881 986,211
Inventories................................ 113,000 196,000
Prepaid expenses and other current assets.. (95,994) (5,027)
Accounts payable & other accrued expenses.. (1,173,897) (1,512,711)
------------- ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES.................... 2,986,280 1,694,704
INVESTING ACTIVITIES
Acquisition of property, plant and equipment....... (1,141,006) (800,461)
FINANCING ACTIVITIES
Net increase (decrease) in short-term debt......... 0 (309,000)
Payments on long-term debt......................... (1,441,412) (527,051)
Dividends paid..................................... (228,567) (158,710)
------------- ------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES.............................. (1,669,979) (994,761)
------------- ------------
INCREASE (DECREASE) IN CASH.............. 175,295 (100,518)
Cash at beginning of period.......................... 119,371 110,682
------------- ------------
CASH AT END OF PERIOD.................... $ 294,666 $ 10,164
============= ============
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
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, 1997 of $9,767,000 decreased $244,000,
or 2.4% from the sales reported in the comparable period a year ago. The
decrease in sales is a result of changes in production schedules and work
stoppages at the automotive plants. The net profit for the quarter ended July
31, 1997 was $74,000 vs. a net profit of $242,000 in the comparable period a
year ago.
The cost of sales percentage was 89.7% for the current fiscal year quarter vs.
86.2% in the comparable period a year ago. This increase was a result of lower
production efficiencies along with contractual labor rate increase, higher
freight, tooling and QS-9000 costs.
The selling, general and administrative expense decrease was primarily due to
Michigan Single Business Taxes and the percent to sales decreased to 8.4% from
9.0%.
Interest expense decreased $37,000 due primarily to cash generated from
operations reducing total debt. The interest rate paid by the Company to
Comerica Bank is tied to the prevailing prime rate which has remained
relatively constant.
For the first nine months of 1997, net sales of $31,254,000 were 4.7% greater
than the same period in 1996, due primarily to the growth of the automotive
market. The decrease in gross profit results from those items noted above.
The net profit for the first nine months of 1997 was $743,000 vs. a net profit
of $817,000 in the comparable period a year ago.
Liquidity and Capital Resources
The Company has short-term credit lines aggregating $5,000,000. At July 31,
1997, no amounts were borrowed on this facility. Additionally, cash generated
from operations was used to purchase machinery and equipment and reduce
long-term debt. The Company anticipates that funds provided by operations
together with funds available under its credit lines will be sufficient to meet
the Company's liquidity needs for the remainder of fiscal year 1997.
6
<PAGE> 7
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, 1997.
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 8-25-97
--------------------------------------
7
<PAGE> 8
EXHIBIT INDEX
-------------
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<CIK> 0000065666
<NAME> MICHIGAN RIVET CORP.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> JUL-31-1997
<CASH> 294,666
<SECURITIES> 0
<RECEIVABLES> 3,950,195
<ALLOWANCES> 50,000
<INVENTORY> 4,591,302
<CURRENT-ASSETS> 9,593,084
<PP&E> 24,928,308
<DEPRECIATION> 15,685,705
<TOTAL-ASSETS> 19,539,153
<CURRENT-LIABILITIES> 4,311,596
<BONDS> 2,655,188
0
0
<COMMON> 638,525
<OTHER-SE> 8,314,768
<TOTAL-LIABILITY-AND-EQUITY> 19,539,153
<SALES> 31,253,533
<TOTAL-REVENUES> 31,253,533
<CGS> 27,434,691
<TOTAL-COSTS> 27,434,691
<OTHER-EXPENSES> 2,435,950
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 257,638
<INCOME-PRETAX> 1,125,254
<INCOME-TAX> 382,000
<INCOME-CONTINUING> 743,254
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 743,254
<EPS-PRIMARY> 1.16
<EPS-DILUTED> 1.16
</TABLE>
