<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 April 30, 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 April 30, 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)
<TABLE>
<CAPTION>
ASSETS
April 30, October 31,
1998 1997
----------- -----------
<S> <C> <C>
Current assets:
Cash............................................ $ 114,667 $ 660,398
Accounts receivable, less allowance of $50,000.. 6,012,975 5,687,051
Inventories..................................... 6,065,130 5,153,130
Deferred federal income taxes................... 597,639 597,639
Prepaid expenses and other current assets....... 217,792 252,792
----------- -----------
TOTAL CURRENT ASSETS...... 13,008,203 12,351,010
Other Assets...................................... 1,004,594 1,004,594
Property, Plant and Equipment..................... 25,486,618 25,016,189
Less accumulated depreciation................... 15,154,215 15,831,463
----------- -----------
10,332,403 9,184,726
----------- -----------
$24,345,200 $22,540,330
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable to bank........................... $ 1,105,000 $ 0
Accounts payable................................ 5,151,712 4,441,194
Payroll and employee benefits................... 569,765 1,093,338
Other accrued expenses.......................... 254,627 631,020
Current maturities of long-term debt............ 369,163 369,163
----------- -----------
TOTAL CURRENT LIABILITIES 7,450,267 6,534,715
Long-Term Debt.................................... 2,344,718 2,531,337
Accrued Retiree Health Liability.................. 4,005,808 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............................... 9,788,479 8,904,780
----------- -----------
10,544,407 9,660,708
----------- -----------
$24,345,200 $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 SIX MONTHS ENDED
APRIL 30 APRIL 30
------------------------ -------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales........................ $12,352,755 $11,558,406 $22,880,907 $21,486,756
Cost and expenses:
Cost of products sold.......... 10,361,255 9,826,607 19,401,622 18,675,940
Selling, administrative
and general expenses.... 913,258 816,035 1,770,142 1,618,636
Interest expense............... 69,625 81,753 137,971 178,145
----------- ----------- ----------- -----------
11,344,138 10,724,395 21,309,735 20,472,721
----------- ----------- ----------- -----------
Income before
income taxes.......... 1,008,617 834,011 1,571,172 1,014,035
Income taxes..................... 344,000 284,000 535,000 345,000
----------- ----------- ----------- -----------
Net Income ............. $ 664,617 $ 550,011 $ 1,036,172 $ 669,035
=========== =========== =========== ===========
Net Income per share ............ $ 1.04 $ .86 $ 1.62 $ 1.05
======= ======== ======== ========
Dividends per share.............. $ .12 $ .12 $ .24 $ .24
======= ======== ======== ========
</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>
SIX MONTHS ENDED
APRIL 30
-----------------------------------
1998 1997
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income ............................................. $1,036,172 $ 669,035
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation..................................... 564,200 539,400
Accrued retiree health liability................. 192,238 269,003
Cash provided from (used in) changes in
operating assets and liabilities:
Accounts receivable.......................... (325,924) 312,509
Inventories.................................. (912,000) (122,000)
Prepaid expenses and other current assets.... 35,000 (48,525)
Accounts payable & other accrued expenses.... (189,447) (17,868)
---------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES................... 400,239 1,601,554
INVESTING ACTIVITIES
Acquisition of property, plant and equipment............ (1,711,877) (709,944)
FINANCING ACTIVITIES
Net increase (decrease) in short-term debt.............. 1,105,000 687,000
Payments on long-term debt.............................. (186,619) (1,353,806)
Dividends paid.......................................... (152,474) (152,376)
---------- -----------
NET CASH USED IN FINANCING
ACTIVITIES............................. 765,907 (819,182)
---------- -----------
INCREASE (DECREASE) IN CASH............. (545,731) 72,428
Cash at beginning of period............................... 660,398 119,371
---------- -----------
CASH AT END OF PERIOD................... $ 114,667 $ 191,799
========== ===========
</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 April 30, 1998 of $12,353,000 increased $795,000,
or 7% from the sales reported in the comparable period a year ago. The increase
in sales resulted from new orders and adjusted automotive production levels. The
net profit for the quarter ended April 30, 1998 was $665,000 vs. a net profit of
$550,000 in the comparable period a year ago.
The cost of sales percentage for the current fiscal year quarter remained the
same as the comparable period a year ago after excluding profit on sale of
equipment.
Selling, general and administrative expenses increased to 7.4% of sales as
compared to 7.1% for the previous year comparable period. Higher Single Business
Taxes and bonus accrual were the main reasons for the increase.
Interest expense decreased $12,000 due primarily to the lower borrowing base and
interest rates.
For the first six months of 1998, net sales of $22,881,000 were 6.5% greater
than the same period in 1997, due primarily to higher automotive production
schedules and new orders. The net profit for the first six months of 1998 was
$1,036,000 vs. a net profit of $669,000 in the comparable period a year ago. The
cost of sales were 84.8% as compared to 86.9% for the prior year. This was
primarily due to lower material, tooling and freight costs.
Financial Condition
Liquidity and Capital Resources
The Company has short-term credit lines aggregating $5,000,000. At April 30,
1998, $1,105,000 was outstanding.
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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 April 30, 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 William P. Lianos
---------------------------------
William P. Lianos
Executive Vice President and Treasurer
(Principal Financial & Accounting Officer)
Date 5-26-98
--------------------------------
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ------- --- -----------
Exhibit 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENT 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> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> APR-30-1998
<CASH> 114,667
<SECURITIES> 0
<RECEIVABLES> 6,062,975
<ALLOWANCES> 50,000
<INVENTORY> 6,065,130
<CURRENT-ASSETS> 13,008,203
<PP&E> 25,486,618
<DEPRECIATION> 15,154,215
<TOTAL-ASSETS> 24,345,200
<CURRENT-LIABILITIES> 7,450,267
<BONDS> 2,344,718
0
0
<COMMON> 638,525
<OTHER-SE> 9,905,882
<TOTAL-LIABILITY-AND-EQUITY> 24,345,200
<SALES> 22,880,907
<TOTAL-REVENUES> 22,880,907
<CGS> 19,401,622
<TOTAL-COSTS> 19,401,622
<OTHER-EXPENSES> 1,770,142
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 137,971
<INCOME-PRETAX> 1,571,172
<INCOME-TAX> 535,000
<INCOME-CONTINUING> 1,036,172
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,036,172
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.62
</TABLE>
