<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 January 31, 1998
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 January 31, 1998, 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, 1997.
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
January 31, October 31,
1998 1997
------------ -----------
Current Assets:
<S> <C> <C>
Cash............................................ $ 29,023 $ 660,398
Accounts receivable, less allowance of $50,000.. 4,856,637 5,687,051
Inventories..................................... 5,407,130 5,153,130
Deferred federal income taxes................... 597,639 597,639
Prepaid expenses and other current assets....... 246,867 252,792
----------- ------------
TOTAL CURRENT ASSETS....... 11,137,296 12,351,010
Other Assets...................................... 1,004,594 1,004,594
Property, Plant and Equipment..................... 25,554,133 25,016,189
Less accumulated depreciation................... 15,822,111 15,831,463
------------ -----------
9,732,022 9,184,726
------------ -----------
$21,873,912 $22,540,330
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable................................ $ 4,129,404 $ 4,441,194
Payroll and employees benefits.................. 580,166 1,093,338
Other accrued expenses.......................... 487,515 631,020
Current maturities of long-term debt............ 369,163 369,163
------------ -----------
TOTAL CURRENT LIABILITIES.......... 5,566,248 6,534,715
Long-Term Debt.................................... 2,439,887 2,531,337
Accrued Retiree Health Liability.................. 3,911,745 3,813,570
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............................... 9,200,104 8,904,780
------------ -----------
9,956,032 9,660,708
------------ -----------
$21,873,912 $22,540,330
============ ===========
</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
January 31
-----------------
1998 1997
---- ----
<S> <C> <C>
Net sales.......................... $10,449,541 $9,908,350
Cost and expenses:
Cost of products sold............ 9,040,367 8,849,333
Selling, administrative
and general expenses...... 856,884 802,601
Gain on sale of assets........... (78,611) (20,000)
Interest expense................. 68,346 96,392
---------- -----------
9,886,986 9,728,326
----------- -----------
Income before
income taxes........... 562,555 180,024
Income taxes....................... 191,000 61,000
----------- -----------
Net Income................ $ 371,555 $ 119,024
=========== ===========
Net income per share............... $ .58 $ .19
====== ======
Dividends per share................ $ .12 $ .12
====== ======
</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>
Three Months Ended
January 31
------------------------
1998 1997
------ ------
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................ $ 371,555 $ 119,024
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation................................... 279,600 269,700
Accrued retiree health liability............... 98,175 135,043
Cash provided from (used in) changes in
operating assets and liabilities:
Accounts receivable........................ 830,414 1,075,015
Inventories................................ (254,000) 119,000
Prepaid expenses and other current assets.. 5,925 (64,396)
Accounts payable & other accrued expenses.. (968,466) (320,887)
---------- -----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 363,203 1,332,499
INVESTING ACTIVITIES
Acquisition of property, plant and equipment......... (826,896) (369,988)
FINANCING ACTIVITIES
Payments on long-term debt........................... (91,450) (682,581)
Dividends............................................ (76,232) (76,188)
---------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES........................... (167,682) (758,769)
---------- -----------
INCREASE (DECREASE) IN CASH............. (631,375) 203,742
Cash at beginning of period............................ 660,398 119,371
---------- -----------
CASH AT END OF PERIOD................... $ 29,023 $ 323,113
========== ===========
</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 for the quarter ended January 31, 1998 of $10,450,000 increased
$541,000, or 5.5%, from the sales reported in the comparable period a year ago.
The increase in sales resulted from new business and a higher volume of
products shipped to the automotive industry. The net profit for the quarter
ended January 31, 1998 was $372,000 vs. a profit of $119,000 in the comparable
period a year ago.
The lower cost of sales percentage for the current fiscal year quarter is due
to improved production efficiencies along with lower manufacturing costs.
Selling, general, and administrative expenses have increased to 8.2% of sales
as compared to 8.1% for the previous year comparable period. This increase
resulted from higher commissions on sales and single business income taxes.
Interest expense decreased $28,000 due primarily to a lower borrowing base and
prime interest rate. The rate paid by the Company to Comerica Bank is tied to
the prevailing prime rate.
Financial Condition
The Company is currently negotiating with one of the Big Three automotive
companies for a new long-term sales agreement. This customer's sales were
about twenty-five percent of the Company's business. At this time, we cannot
predict the impact nor the time when these negotiations will culminate. The
Company has short-term credit lines aggregating $5,000,000. At January 31,
1998, $0 was outstanding.
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 January 31, 1998.
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 2-27-98
------------------------------
7
<PAGE> 8
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
EX 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>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 29,023
<SECURITIES> 0
<RECEIVABLES> 4,906,637
<ALLOWANCES> 50,000
<INVENTORY> 5,407,130
<CURRENT-ASSETS> 11,137,296
<PP&E> 25,554,133
<DEPRECIATION> 15,822,111
<TOTAL-ASSETS> 21,873,912
<CURRENT-LIABILITIES> 5,566,248
<BONDS> 2,439,887
0
0
<COMMON> 638,525
<OTHER-SE> 9,317,507
<TOTAL-LIABILITY-AND-EQUITY> 21,873,912
<SALES> 10,449,541
<TOTAL-REVENUES> 10,449,541
<CGS> 9,040,367
<TOTAL-COSTS> 9,040,367
<OTHER-EXPENSES> 778,273
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 68,346
<INCOME-PRETAX> 562,555
<INCOME-TAX> 191,000
<INCOME-CONTINUING> 371,555
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 371,555
<EPS-PRIMARY> .58
<EPS-DILUTED> .58
</TABLE>
