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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, 2000
Commission file number: 0-6056
Michigan Rivet Corporation
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(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
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (810) 754-5100
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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, 2000, 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, 1999.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
April 30, October 31,
2000 1999
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<S> <C> <C>
Current Assets:
Cash............................................ $ 355,302 $ 99,220
Accounts receivable, less allowance of $50,000.. 6,848,131 6,004,636
Inventories..................................... 6,337,484 6,841,484
Deferred federal income taxes................... 870,000 805,000
Prepaid expenses and other current assets....... 209,277 232,500
----------- -----------
TOTAL CURRENT ASSETS....... 14,620,194 13,982,840
Other Assets...................................... 1,012,210 1,012,210
Property, Plant and Equipment..................... 29,765,765 27,839,912
Less accumulated depreciation................... 16,599,688 16,160,458
----------- -----------
13,166,077 11,679,454
----------- -----------
$28,798,481 $26,674,504
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable to bank........................... $ 2,133,000 $ 216,000
Accounts payable................................ 5,217,782 4,568,961
Payroll and employee benefits................... 506,599 1,602,458
Other accrued expenses.......................... 576,360 750,998
Current maturities of long-term debt............ 321,315 321,315
----------- -----------
TOTAL CURRENT LIABILITIES 8,755,056 7,459,732
Long-Term Debt.................................... 1,608,192 1,720,167
Accrued Retiree Health Liability.................. 4,148,129 4,068,780
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............................... 13,531,176 12,669,897
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14,287,104 13,425,825
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$28,798,481 $26,674,504
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
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MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
April 30 April 30
----------------------- ---------------------------
2000 1999 2000 1999
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Net sales..................................... $11,716,646 $12,494,045 $22,043,830 $23,148,846
Cost and expenses:
Cost of products sold....................... 9,924,527 10,498,406 18,797,399 19,585,704
Selling, administrative
and general expenses................. 687,445 909,036 1,461,251 1,772,270
Interest expense............................ 78,691 64,922 132,032 132,853
----------- ----------- ----------- ----------
10,690,663 11,472,364 20,390,682 21,490,827
----------- ----------- ----------- ----------
Income before
income taxes....................... 1,025,983 1,021,681 1,653,148 1,658,019
Income taxes.................................. 349,000 346,000 562,000 563,000
----------- ----------- ----------- -----------
Net Income .......................... $ 676,983 $ 675,681 $ 1,091,148 $ 1,095,019
=========== =========== =========== ===========
Net Income per share ......................... $ 1.06 $ 1.05 $ 1.71 $ 1.71
======== ======== ======== ========
Dividends per share........................... $ .12 $ .12 $ .36 $ .32
======== ======== ======== ========
</TABLE>
See notes to condensed consolidated financial statements.
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MICHIGAN RIVET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
April 30
----------------------------------
2000 1999
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<S> <C> <C>
OPERATING ACTIVITIES
Net income .............................................. $1,091,148 $ 1,095,019
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation...................................... 695,000 632,300
Accrued retiree health liability.................. 79,349 87,976
Cash provided from (used in) changes in
operating assets and liabilities:
Accounts receivable........................... (843,495) 571,648
Inventories................................... 504,000 507,000
Prepaid expenses and other current assets..... (41,777) 7,644
Accounts payable & other accrued expenses..... (618,966) (1,019,692)
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NET CASH PROVIDED BY
OPERATING ACTIVITIES.................... 865,259 1,881,895
INVESTING ACTIVITIES
Acquisition of property, plant and equipment............. (2,181,623) (683,392)
FINANCING ACTIVITIES
Net increase (decrease) in short-term debt............... 1,914,289 (848,000)
Payments on long-term debt............................... (111,975) (154,407)
Dividends paid........................................... (229,868) (204,328)
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NET CASH USED IN FINANCING
ACTIVITIES.............................. 1,572,446 (1,206,735)
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INCREASE (DECREASE) IN CASH.............. 256,082 (8,232)
Cash at beginning of period................................ 99,220 92,125
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CASH AT END OF PERIOD.................... $ 355,302 $ 83,893
========== ===========
</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 in the quarter ended April 30, 2000 of $11,717,000 decreased $777,000,
or 6% from the sales reported in the comparable period a year ago. The decrease
in sales resulted from lower orders and delay of start up of a few new jobs by
our customers. The net profit for the quarter ended April 30, 2000 was $677,000
vs. a net profit of $676,000 in the comparable period a year ago.
The cost of sales percentage was 84.7% for the current fiscal year quarter vs.
84.0% in the comparable period a year ago. This increase was due to the lower
production volume and an increase in some manufacturing costs.
Selling, general and administrative expenses were 5.9% of sales for this period
and 7.3% for the previous year comparable period. This was due to a refund on
past Single Business Taxes and lower provision for employee bonus plans.
Interest expense increased $14,000 due primarily to the greater short-term
borrowing.
For the first six months of 2000, net sales of $22,044,000 were 4.8% lower than
the same period in 1999, due primarily to lower release schedules from our
customers. The net profit for the first six months of 2000 was $1,091,000 vs. a
net profit of $1,095,000 in the comparable period a year ago. The cost of sales
was 85.3% as compared to 84.6% for the prior year. This was primarily due to
higher cost of medical insurance and some increased manufacturing tooling costs.
Financial Condition
Liquidity and Capital Resources
The Company has short-term credit lines aggregating $5,000,000. At April 30,
2000, $2,133,000 was outstanding. Additionally, cash generated from operations
was used to purchase machinery and equipment and reduce long-term debt and pay
dividends. The Company anticipates that funds provided by operations together
with funds available under its credit
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lines will be sufficient to meet the Company's liquidity needs for the remainder
of fiscal year 2000.
YEAR 2000
The Company experienced no system failures or miscalculations as a result of
Y2K. The Company is not aware of any failure attributable to the Y2K problem and
its customers or suppliers which threaten to have any adverse impact on the
Company's business at this time.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK SENSITIVE
INSTRUMENTS
At the end of the quarter covered by this report, the Company had no material
exposure to market risks from instruments related to currency, interest rates or
otherwise.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 28, 2000, the Company held its annual meeting of stockholders.
Stockholders of the Company voted in favor of the election of Clark V. Stevens,
William B. Stade, Charles E. Blank, William P. Lianos, Anthony W. Livorine,
Kermit L. Knuppenburg, Anthony J. Caputo, Gen. Earl T. O'Loughlin and Howard W.
Burdett to the Company's Board of Directors. In the election of Mr. Stevens,
592,929 total votes were cast in favor and 6,022 votes were cast against or
withheld. In addition, there were 39,574 abstentions and 0 broker non-voters. In
the election of Mr. Stade, Mr. Blank, Mr. Lianos, and Mr. Knuppenburg, 593,039
total votes were cast in favor and 5,912 votes were cast against or withheld for
each nominee. In addition, there were 39,574 abstentions and 0 broker non-voters
for each nominee. In the election of Mr. Livorine, 592,939 total votes were cast
in favor and 6,012 votes were cast against or withheld. In addition, there were
39,574 abstentions and 0 broker non-voters. In the election of Mr. Caputo and
Mr. Burdett, 592,919 total votes were cast in favor and 6,032 votes were cast
against or withheld for each nominee. In addition, there were 39,574 abstentions
and 0 broker non-voters for each nominee. In the election of Gen. O'Loughlin,
592,819 total votes were cast in favor and 6,132 votes were cast against or
withheld. In addition, there were 39,574 abstentions and 0 broker non-voters.
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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, 2000.
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
President and Treasurer
(Principal Financial & Accounting Officer)
Date 5-25-00
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Exhibit Index
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<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<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
</LEGEND>
<CIK> 0000065666
<NAME> MICHIGAN RIVET CORP.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-START> NOV-01-1999
<PERIOD-END> APR-30-2000
<CASH> 355,302
<SECURITIES> 0
<RECEIVABLES> 6,898,131
<ALLOWANCES> 50,000
<INVENTORY> 6,337,484
<CURRENT-ASSETS> 14,620,194
<PP&E> 29,765,765
<DEPRECIATION> 16,599,688
<TOTAL-ASSETS> 28,798,481
<CURRENT-LIABILITIES> 8,755,056
<BONDS> 1,608,192
0
0
<COMMON> 638,525
<OTHER-SE> 13,648,579
<TOTAL-LIABILITY-AND-EQUITY> 28,798,481
<SALES> 22,043,830
<TOTAL-REVENUES> 22,043,830
<CGS> 18,797,399
<TOTAL-COSTS> 18,797,399
<OTHER-EXPENSES> 1,461,251
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 132,032
<INCOME-PRETAX> 1,653,148
<INCOME-TAX> 562,000
<INCOME-CONTINUING> 1,091,148
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,091,148
<EPS-BASIC> 1.71
<EPS-DILUTED> 1.71
</TABLE>
