<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, 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 July 31, 1998, 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, 1997.
2
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PART I. FINANCIAL INFORMATION FORM 10-Q
ITEM 1. FINANCIAL STATEMENTS
MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
July 31, October 31,
1998 1997
-------- ----
Current Assets: ----------
<S> <C> <C>
Cash............................................ $ 547,345 $ 660,398
Accounts receivable, less allowance of $50,000.. 3,996,053 5,687,051
Inventories..................................... 6,271,130 5,153,130
Deferred federal income taxes................... 597,639 597,639
Prepaid expenses and other current assets....... 273,633 252,792
------------ -----------
TOTAL CURRENT ASSETS...... 11,685,800 12,351,010
Other Assets...................................... 1,004,594 1,004,594
Property, Plant and Equipment..................... 25,653,515 25,016,189
Less accumulated depreciation................... 15,054,570 15,831,463
----------- -----------
10,598,945 9,184,726
----------- -----------
$23,289,339 $22,540,330
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable to bank........................... $ 748,000 $ 0
Accounts payable................................ 4,585,238 4,441,194
Payroll and employee benefits................... 647,287 1,093,338
Other accrued expenses.......................... 237,213 631,020
Current maturities of long-term debt............ 369,163 369,163
----------- -----------
TOTAL CURRENT LIABILITIES 6,586,901 6,534,715
Long-Term Debt.................................... 2,064,535 2,531,337
Accrued Retiree Health Liability.................. 4,096,373 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............................... 9,785,602 8,904,780
----------- -----------
10,541,530 9,660,708
----------- -----------
$23,289,339 $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 Nine Months Ended
July 31 July 31
----------------------- -------------------------
1998 1997 1998 1997
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales....................... $9,634,274 $9,766,777 $32,515,181 $31,253,533
Cost and expenses:
Cost of products sold......... 8,612,556 8,758,751 28,014,178 27,434,691
Selling, administrative
and general expenses... 828,463 817,314 2,598,605 2,435,950
Interest expense.............. 83,889 79,493 221,860 257,638
---------- ---------- ----------- -----------
9,524,908 9,655,558 30,834,643 30,128,279
---------- ---------- ----------- -----------
Income before
income taxes......... 109,366 111,219 1,680,538 1,125,254
Income taxes.................... 36,000 37,000 571,000 382,000
---------- ---------- ----------- -----------
Net Income............. $ 73,366 $ 74,219 $ 1,109,538 $ 743,254
========== ========== =========== ===========
Net Income per share............ $ .12 $ .12 $ 1.74 $ 1.16
====== ====== ======= =======
Dividends per share............. $ .12 $ .12 $ .36 $ .36
====== ====== ======= =======
</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
-------------------------------------
1998 1997
------------ -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income......................................... $ 1,109,538 $ 743,254
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation................................... 851,300 809,100
Accrued retiree health liability............... 282,803 339,936
Cash provided from (used in) changes in
operating assets and liabilities:
Accounts receivable........................ 1,690,998 2,250,881
Inventories................................ (1,118,000) 113,000
Prepaid expenses and other current assets.. (20,841) (95,994)
Accounts payable & other accrued expenses.. (695,813) (1,173,897)
----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES................. 2,099,985 2,986,280
INVESTING ACTIVITIES
Acquisition of property, plant and equipment.......... 2,265,519 (1,141,006)
FINANCING ACTIVITIES
Net increase (decrease) in short-term debt............ 748,000 0
Payments on long-term debt............................ (466,802) (1,441,412)
Dividends paid........................................ (228,717) (228,567)
----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES........................... 52,481 (1,669,979)
----------- -----------
INCREASE (DECREASE) IN CASH........... (113,053) 175,295
Cash at beginning of period............................. 660,398 119,371
----------- -----------
CASH AT END OF PERIOD................. $ 547,345 $ 294,666
=========== ===========
</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, 1998 of $9,634,000 decreased
$133,000, or 1.4% 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 General Motors. The net profit for the quarter ended July 31, 1998
was $73,000 vs. a net profit of $74,000 in the comparable period a year ago.
The cost of sales percentage was 89.4% for the current fiscal year quarter
vs. 89.7% in the comparable period a year ago. This decrease was a result of
improved production efficiencies.
The selling, general and administrative expense increase was primarily due
to Michigan Single Business Taxes. The percent to sales also increased to 8.6%
from 8.4%.
Interest expense increased $4,000 due primarily to short term borrowing
from time to time. 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 1998, net sales of $32,515,000 were 4.0%
greater than the same period in 1997, due primarily to increased sales to the
automotive market and new non-automotive customers. The increase in gross profit
resulted from primarily lower material costs. The net profit for the first nine
months of 1998 was $1,110,000 vs. a net profit of $743,000 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,
1998, $748,000 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 1998.
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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, 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 8-27-98
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<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>
<CIK> 0000065666
<NAME> MICHIGAN RIVET CORP.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> JUL-31-1998
<CASH> 547,345
<SECURITIES> 0
<RECEIVABLES> 4,046,053
<ALLOWANCES> 50,000
<INVENTORY> 6,271,130
<CURRENT-ASSETS> 11,685,800
<PP&E> 25,653,515
<DEPRECIATION> 15,054,570
<TOTAL-ASSETS> 23,289,339
<CURRENT-LIABILITIES> 6,586,901
<BONDS> 2,064,535
0
0
<COMMON> 638,525
<OTHER-SE> 9,903,005
<TOTAL-LIABILITY-AND-EQUITY> 23,289,339
<SALES> 32,515,181
<TOTAL-REVENUES> 32,515,181
<CGS> 28,014,178
<TOTAL-COSTS> 28,014,178
<OTHER-EXPENSES> 2,598,605
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 221,860
<INCOME-PRETAX> 1,680,538
<INCOME-TAX> 571,000
<INCOME-CONTINUING> 1,109,538
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,109,538
<EPS-PRIMARY> 1.74
<EPS-DILUTED> 1.74
</TABLE>
