<PAGE> 1
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, 1999
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, 1999, close of the period covered by this report.
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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, 1998.
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ITEM 1. FINANCIAL STATEMENTS
MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
January 31, October 31,
1999 1998
------------ ------------
<S> <C> <C>
Current Assets:
Cash $ 110,681 $ 92,125
Accounts receivable, less allowance of $50,000.. 5,186,046 6,575,512
Inventories..................................... 5,848,804 6,087,804
Deferred federal income taxes................... 647,639 647,639
Prepaid expenses and other current assets....... 254,548 253,734
------------ ------------
TOTAL CURRENT ASSETS...... 12,047,718 13,656,814
Other Assets...................................... 1,048,662 1,048,662
Property, Plant and Equipment..................... 26,601,978 26,296,996
Less accumulated depreciation................... 15,557,753 15,242,603
------------ ------------
11,044,225 11,054,393
------------ ------------
$24,140,605 $25,759,869
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable to bank........................... $ 975,000 $ 848,000
Accounts payable................................ 3,998,818 5,224,035
Payroll and employees benefits.................. 691,617 1,394,722
Other accrued expenses.......................... 496,146 576,914
Current maturities of long-term debt............ 299,061 299,061
------------ ------------
TOTAL CURRENT LIABILITIES 6,460,642 8,342,732
Long-Term Debt.................................... 1,983,067 2,058,572
Accrued Retiree Health Liability.................. 4,014,341 3,967,643
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............................... 10,926,627 10,634,994
------------ ------------
11,682,555 11,390,922
------------ ------------
$24,140,605 $25,759,869
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
3
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MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
January 31
-----------------------------
1999 1998
------------ ------------
<S> <C> <C>
Net sales ................... $ 10,654,801 $ 10,449,541
Cost and expenses:
Cost of products sold ..... 9,087,298 9,040,367
Selling, administrative
and general expenses 863,234 856,884
Gain on sale of assets .... 0 (78,611)
Interest expense .......... 67,931 68,346
------------ ------------
10,018,463 9,886,986
------------ ------------
Income before
income taxes .... 636,338 562,555
Income taxes ................ 217,000 191,000
------------ ------------
Net Income ......... $ 419,338 $ 371,555
============ ============
Net income per share ........ $ .66 $ .58
============ ============
Dividends per share ......... $ .20 $ .12
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
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MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
January 31
------------------------------
1999 1998
------------ -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income ........................................................ $ 419,338 $ 371,555
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation ............................................... 315,150 279,600
Accrued retiree health liability ........................... 46,698 98,175
Cash provided from (used in) changes in operating assets and
liabilities:
Accounts receivable .................................... 1,389,466 830,414
Inventories ............................................ 239,000 (254,000)
Prepaid expenses and other current assets .............. (814) 5,925
Accounts payable & other accrued expenses .............. (2,009,090) (968,466)
----------- -----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES ............................. 399,748 363,203
INVESTING ACTIVITIES
Acquisition of property, plant and equipment ...................... (304,982) (826,896)
FINANCING ACTIVITIES
Net borrow short-term debt ........................................ 127,000 0
Payments on long-term debt ........................................ (75,505) (91,450)
Dividends ......................................................... (127,705) (76,232)
----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES ....................................... (76,210) (167,682)
----------- -----------
INCREASE (DECREASE) IN CASH ....................... 18,556 (631,375)
Cash at beginning of period ......................................... 92,125 660,398
----------- -----------
CASH AT END OF PERIOD ............................. $ 110,681 $ 29,023
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
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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 for the quarter ended January 31, 1999 of $10,655,000 increased
$205,000, or 2%, 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, 1999 was $419,000 vs. a profit of $372,000 in the comparable period a year
ago.
The lower cost of sales percentage for the current fiscal year quarter is due to
work performed in our facilities versus outside, reduced manufacturing costs and
lower retirement medical accrual.
Selling, general, and administrative expenses have decreased to 8.1% of sales as
compared to 8.2% for the previous year comparable period. This decrease resulted
from lower single business income taxes.
Interest expense remained about the same for both periods. The interest rate
paid by the Company to Comerica Bank is tied to the prevailing prime rate.
Liquidity and Capital Resources
The Company has short-term credit lines aggregating $5,000,000. At January 31,
1999, $975,000 was borrowed on this facility. Additionally, cash generated from
operations was used to purchase machinery and equipment and reduce long-term
debt. The Company anticipates
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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 1999.
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, 1999.
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 2-24-99
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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-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 110,681
<SECURITIES> 0
<RECEIVABLES> 5,236,046
<ALLOWANCES> 50,000
<INVENTORY> 5,848,804
<CURRENT-ASSETS> 12,047,718
<PP&E> 26,601,978
<DEPRECIATION> 15,557,753
<TOTAL-ASSETS> 24,140,605
<CURRENT-LIABILITIES> 6,460,642
<BONDS> 1,983,067
0
0
<COMMON> 638,525
<OTHER-SE> 11,044,030
<TOTAL-LIABILITY-AND-EQUITY> 24,140,605
<SALES> 10,654,801
<TOTAL-REVENUES> 10,654,801
<CGS> 9,087,298
<TOTAL-COSTS> 9,087,298
<OTHER-EXPENSES> 863,234
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 67,931
<INCOME-PRETAX> 636,338
<INCOME-TAX> 217,000
<INCOME-CONTINUING> 419,338
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 419,338
<EPS-PRIMARY> .66
<EPS-DILUTED> .66
</TABLE>
