<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the three months ended September 30, 1995
Commission File Number 0-17039
American Rice, Inc.
(Exact Name of Registrant as Specified in its Charter)
Texas 76-0231626
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
16825 Northchase, Suite 1600
Houston, Texas 77060
(Address of Principal Executive Offices) (Zip Code)
(713) 873-8800
Registrant's Telephone Number,
Including Area Code
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 [X] No [ ]
The number of shares outstanding of the registrant's common stock,
$1 par value, as of November 10, 1995 is 2,443,706 shares
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN RICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars)
(Unaudited)
Three Months Six Months
Ended September 30, Ended September 30,
1995 1994 1995 1994
----------------------------------------
Net sales $90,369 $78,314 $176,761 $184,020
Cost of sales 80,652 69,264 157,507 163,647
----------------------------------------
Gross profit 9,717 9,050 19,254 20,373
Selling, general and
administrative expenses 6,074 5,609 11,845 10,881
----------------------------------------
Operating income 3,643 3,441 7,409 9,492
Interest expense 4,204 3,071 7,602 5,969
Interest income (353) (179) (528) (350)
Minority interest (111) (65) (246) (4)
Other income and expense 60 85 151 158
----------------------------------------
Earnings (loss) before
income taxes (157) 529 430 3,719
Provision for
income taxes (benefit) (56) 197 155 1,377
----------------------------------------
Net earnings (loss) $(101) $332 $275 $2,342
========================================
Preferred stock dividend
requirements 1,483 1,483 2,965 2,965
----------------------------------------
Net loss applicable
to common stock ($1,584) ($1,151) ($2,690) ($623)
========================================
Loss per applicable
common and common equivalent
share (Note 4):
Primary ($.65) ($.47) ($1.10) ($.25)
========================================
Fully diluted ($.65) ($.47) ($1.10) ($.25)
========================================
See Notes to Consolidated Financial Statements
Page 1<PAGE>
AMERICAN RICE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
September 30, March 31,
1995 1995
--------------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $1,903 $1,864
Accounts receivable, net 30,499 33,423
Inventories
Finished goods 24,854 17,108
Raw materials 31,135 33,097
Prepaid expenses 1,360 793
Deferred income taxes 3,507 3,451
--------------------
Total current assets 93,258 89,736
Net assets of Houston properties held for sale 18,767 18,767
Other assets 20,038 15,710
Receivable from ERLY 23,070 11,901
Property, plant and equipment, net 42,278 41,386
--------------------
Total assets $197,411 $177,500
====================
Continued on next page
See Notes to Consolidated Financial Statements
Page 2<PAGE>
AMERICAN RICE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Thousands of Dollars)
September 30, March 31,
1995 1995
--------------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $17,030 $33,937
Accounts payable and accrued expenses 33,222 34,372
Income taxes payable to ERLY - 1,037
Current portion of long-term debt - 6,727
--------------------
Total current liabilities 50,252 76,073
Long-term debt 94,056 48,573
Deferred income taxes 8,616 8,616
Minority interest - 26
Stockholders' equity (Note 3):
Preferred stock, $1.00 par value; 4,000,000
shares authorized;
Series A- 777,777 convertible shares issued
and outstanding, liquidation preference
of $19,989 778 778
Series B- 2,800,000 convertible shares issued
and outstanding, liquidation preference
of $14,000 2,800 2,800
Series C- 300,000 shares issued
and outstanding, liquidation preference
of $1,500 300 300
Common stock, $1.00 par value; 10,000,000
shares authorized; 2,443,892 shares
issued and outstanding 2,444 2,444
Paid-in capital 25,286 25,286
Retained earnings 13,627 13,352
Cumulative foreign currency
translation adjustments (748) (748)
--------------------
Total stockholders' equity 44,487 44,212
--------------------
Total liabilities and stockholders' equity $197,411 $177,500
====================
See Notes to Consolidated Financial Statements
Page 3<PAGE>
AMERICAN RICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)
Six Months
Ended September 30,
1995 1994
--------------------
OPERATING ACTIVITIES:
Net earnings $275 $2,342
Adjustments to reconcile net earnings to net cash
provided by (used in) in operating activities:
Depreciation and amortization 2,980 2,852
(Gain) loss on sales of property (3) 11
Deferred income taxes, net (56) 846
Changes in assets and liabilities that
provided (used) cash:
Accounts receivable 2,924 (7,051)
Inventories (5,784) 15,995
Prepaid expenses (567) (758)
Other assets 83 (231)
Receivable from ERLY (669) (319)
Accounts payable and accrued expenses (1,094) 1,793
Income taxes payable to ERLY (1,037) 109
--------------------
Net cash provided (used) by
operating activities (2,948) 15,589
INVESTING ACTIVITIES:
Property, plant and equipment additions (2,863) (2,259)
Proceeds from sales of assets 8 20
Loan to ERLY (10,500) -
--------------------
Net cash used in
investing activities (13,355) (2,239)
FINANCING ACTIVITIES:
Decrease in notes payable (16,907) (9,463)
Proceeds from issuance of mortgage notes 94,000 -
Mortgage notes issuance costs (5,425) -
Repayment of long-term debt (55,300) (3,908)
Other, net (26) (4)
--------------------
Net cash provided by (used in)
financing activities 16,342 (13,375)
--------------------
NET INCREASE IN CASH 39 (25)
CASH:
Beginning of the period 1,864 1,721
--------------------
End of the period $1,903 $1,696
====================
See Notes to Consolidated Financial Statements
Page 4<PAGE>
<TABLE>
AMERICAN RICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Six Months Ended September 30, 1995
(Thousands of Dollars)
(Unaudited)
<CAPTION>
Foreign Total
Additional Currency Stock -
Preferred Common Paid-in Retained Translation Holders'
Stock Stock Capital Earnings Adjustments Equity
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance April 1, 1995 $3,878 $2,444 $25,286 $13,352 ($748) $44,212
Net earnings - - - 275 275
--------- --------- --------- --------- --------- ---------
Balance
September 30, 1995 $3,878 $2,444 $25,286 $13,627 ($748) $44,487
========= ========= ========= ========= ========= =========
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
Page 5<PAGE>
AMERICAN RICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation:
The consolidated financial statements presented herein at September 30,
1995 and for each of the three and six month periods ended September 30,
1995 and 1994 are unaudited; however, all adjustments which are, in the
opinion of management necessary for a fair presentation of the financial
position, results of operations and cash flows for the periods covered
have been made and are of a normal, recurring nature. The results of
the interim periods are not necessarily indicative of results for the
full year. The consolidated balance sheet at March 31, 1995 is derived
from the March 31, 1995 audited consolidated financial statements but
does not include all disclosures required by generally accepted
accounting principles. Although management believes the disclosures are
adequate, certain information and disclosures normally included in the
notes to the financial statements has been condensed or omitted as
permitted by the rules and regulations of the Securities and Exchange
Commission. These financial statements should be read in conjunction
with the audited financial statements and notes thereto included in
American Rice, Inc.'s ("ARI") Annual Report on Form 10-K for the fiscal
year ended March 31, 1995.
2. Notes Payable and Long-Term Debt
In a public offering completed on August 24, 1995, ARI issued
$100 million in principal amount of 13.0% mortgage notes due 2002 (the
"Notes"). Portions of the net proceeds of $94 million were used to
repay $53.8 million of existing term debt, to make a $10.5 million 15%
loan to ERLY due 2002, and to reduce borrowings outstanding under the
$47.5 million revolving credit loan. The Notes were issued pursuant to
an indenture between ARI and U.S. Trust Company of Texas, N.A. (the
"Indenture").
The Notes provide for interest payments semiannually, mature on July 31,
2002, and are non callable by ARI prior to July 31, 1999, after which
date the Notes are callable at the option of ARI, in whole or in part,
at any time upon not less than 30 nor more than 60 days notice, at
107.0% of the principal amount, declining ratably to par on or after
July 31, 2001. Except under certain changes of control, upon
remarketing of the industrial revenue bonds, or asset sales, as defined
in the Indenture, ARI is not required to make mandatory redemption
payments on the Notes. The Notes accrue fixed interest at an annual
rate of 13.0%, an effective yield rate of 14.4%.
In addition to fixed interest, the Notes bear contingent interest of
4.0% of consolidated cash flow (as defined) up to a limit of $40.0
million of consolidated cash flow during the fiscal year in which such
interest accrues. Contingent interest accrues in each semiannual period
(as defined) in which consolidated cash flow in such period and the
immediately preceding semiannual period is equal to or greater than
Page 6<PAGE>
$20.0 million. Contingent interest is payable semiannually, but ARI may
elect to defer all or a portion of any such payment to the extent that
(a) the payment of such portion of contingent interest will cause ARI's
adjusted fixed charge coverage ratio (as defined) for the two
consecutive applicable semiannual periods to be less than 2.0:1 and (b)
the principal of the Notes corresponding to such contingent interest has
not then matured and become due and payable.
The Notes are secured by (a) a first or second priority security
interest in substantially all of ARI's property, plant and equipment
(including related leasehold interests), (b) a first priority security
interest in 39 acres of land in Houston, Texas held for sale, (c) a
pledge agreement creating first priority security interests in the
capital stock of ARI held by ERLY (other than 200,000 shares of ARI's
Series B preferred stock pledged to the holders of ARI's Series
C preferred stock), (d) the ERLY notes receivable and (e) a security
agreement creating a first priority security interest in all registered
U.S. trademarks and a security interest in all other registered
trademarks owned or licensed by ARI.
The Notes rank senior in right of payment to all subordinated
indebtedness and pari passu in right of payment with all existing and
future senior indebtedness of ARI, including borrowings under the
revolving credit loan. The Indenture includes covenants that in certain
instances restrict, among other things, (a) the payment of dividends,
(b) the redemption of equity interests of ARI, (c) the payment on or
redemption of indebtedness subordinate to the Notes, (d) certain
investments (as defined), (e) the incurrence of certain indebtedness and
issuance of preferred stock, (f) certain transactions with affiliates
and (g) certain mergers, consolidations or sales of assets. In
addition, the Indenture contains certain limitations on capital
expenditures, operating lease obligations and rice contract polices and
procedures. The Indenture and the revolving credit loan described below
contain cross default provisions.
The revolving credit loan, which was amended effective June 30, 1995,
bears interest at the prime rate of interest plus 0.5% and will mature
on May 24, 1996. Funds available for borrowing under this revolving
credit loan at any time may not exceed 85% of eligible accounts
receivable (or 90% of accounts receivable backed by acceptable letters
of credit from customers) and 70% of eligible inventory. The revolving
credit loan is primarily collateralized by a first priority security
interest in trade receivables, inventory, and certain key man life
insurance. At September 30, 1995, the outstanding balance on this loan
was $10.1 million and on October 1, 1995 the borrowing base under the
loan was $37.4 million. During the six months ended September 30, 1995,
ARI's maximum borrowing under the loan was $32.4 million
Page 7<PAGE>
Long-term debt consisted of the following:
September 30, March 31,
1995 1995
---------------------
13.0% Mortgage Notes $100,000
Less unamortized discount (5,944)
Chase Manhattan Bank $23,755
Internationale Nederland Bank, N.V. 23,755
Texas Commerce Bank 6,842
Other notes 948
---------------------
Total 94,056 55,300
Less current maturities - (6,727)
---------------------
Total long-term debt $ 94,056 $48,573
=====================
3. Statement of Cash Flows
Borrowings under the revolving credit line in the six months ended
September 30, 1995 and 1994 totaled $176.0 million and $161.5 million,
respectively, and repayments during the same periods totaled $192.9
million and $171.0 million, respectively. ARI made cash payments for
interest and financing fees of approximately $6.2 million and $4.4
million during the six months ended September 30, 1995 and 1994,
respectively. ARI paid $1.2 million and $424 thousand for federal and
state income taxes during the six months ended September 30, 1995 and
1994, respectively.
4. Reverse Stock Split
A one-for-five reverse stock split was effected for all issues of
preferred and common stock on September 8, 1994. All per share
information in the financial statements has been adjusted for this
reverse stock split.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results Of Operations
The Company purchases and processes rough rice into branded and
commodity rice for sale in both international and domestic markets.
Demand for branded rice products is relatively constant and margins are
typically higher than those for commodity rice products. Demand for
commodity rice products is relatively constant globally, but demand for
U.S. grown commodity rice is dependent upon supply and its cost relative
to other sources of supply. Supply and costs for both branded and
commodity products depend on many factors including governmental
actions, crop yields and weather, and such factors can persist through
one or more fiscal years.
Page 8<PAGE>
Significant Factors Effecting Future Operations
Japan has commenced placing orders pursuant to that country's commitment
under the General Agreement on Tariffs and Trade ("GATT") treaty (see
discussion of Japan business in following paragraph). ARI medium grain
sales to Japan from its Maxwell, California facilities which will begin
in November 1995 are expected to favorably impact earnings in the third
and fourth quarters. However, the current marketing outlook for U.S.
Southern long grain rice, also a major element of ARI's business, is
somewhat uncertain, with generally weak demand for unbranded export
sales. Such sales are an important component of ARI's capacity
utilization.
ARI's sales to Asia totaled $42.8 million and $50.0 million in the
fiscal years ended March 31, 1994 and 1995, respectively. Japan
accounted for virtually all of ARI's sales to this region. For the
twelve month period ended August 1994, Japan imported 2.4 million metric
tons of rice, including approximately 500,000 metric tons from the U.S.
ARI processed and milled approximately 62% of the tonnage from the U.S.
These rice imports, the first in 25 years by Japan, were necessary due
to adverse weather conditions that materially reduced Japan's 1993 rice
crop. Management believes that the poor rice crop, combined with the
fact that Japan's declining rice production had fallen short of annual
Japanese rice consumption for seven of the last ten harvests, had
depleted Japan's rice stock-pile requiring significant rice imports.
Although this was an unusual occurrence, as a participant of GATT, Japan
is contractually obligated to import 379,000 metric tons (8.4 million
hundredweights) of rice for the twelve month period beginning April 1,
1995 increasing to 758,000 metric tons (17.7 million hundredweights)
annually by the year 2000. Japan's purchases to date under the first
year commitment indicate that the U.S. has an excellent opportunity to
continue to supply approximately half of these projected imports.
Three Months Ended September 30, 1995 Compared to
Three Months Ended September 30, 1994
Net Sales. Net sales increased $12.1 million, or 15.4%, from $78.3
million in fiscal 1995 to $90.4 million in fiscal 1996. Of this
increase, $10.4 million resulted from increased export sales and $1.7
million from increased sales in the U.S. and Canada.
Export sales increased due to higher volume and to higher average
prices. Total export sales volume increased approximately
800 thousand equivalent rough rice hundredweights or 18%, accounting for
a $8.3 million sales increase. Average export prices increased
approximately 4%, accounting for $2.1 million in sales increases. Export
volume was higher primarily due to increased volume in the Middle East
partially offset by lower sales to Japan compared to the second quarter
of the prior year. Domestic sales were higher as a result of higher
volume partially offset by lower average prices.
Page 9<PAGE>
Gross Profit. Gross profit was 11% of sales for the fiscal 1996 quarter
and 12% for the same period in 1995. Gross profit increased $667
thousand, or 7.4%, from $9.1 million in the fiscal 1995 second quarter
to $9.7 million in fiscal 1996, due primarily to increases in gross
profit from Western Hemisphere and Middle East sales partially offset by
lower gross profits from the absence of Japan business in the fiscal
1996 quarter.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $465 thousand, or 8.3% from $5.6
million in the fiscal 1995 quarter to $6.1 million in fiscal 1996.
As a percentage of net sales, selling, general and administrative
expenses decreased from 7.2% in the 1995 quarter to 6.7% in fiscal 1996.
Interest Expense. Interest expense increased $1.1 million from
$3.1 million in the fiscal 1995 period to $4.2 million in fiscal 1996
due to higher average balances outstanding and higher average interest
rates. Interest expense in both periods includes amortization of
capitalized debt issuance costs.
Six Months Ended September 30, 1995 Compared to
Six Months Ended September 30, 1994
Net Sales. Net sales declined $7.2 million, or 3.9%, from $184.0 million
in fiscal 1995 to $176.8 million in fiscal 1996. The decline in sales
was composed of $7.7 million in decreased export sales partially offset
by $455 thousand from increased sales in the U.S. and Canada.
Export sales declined due to lower volume partially offset by higher
average prices. Total export sales volume declined approximately
1.7 million equivalent rough rice hundredweights or 14%, accounting for
a $16.4 million sales decline. Average export prices increased
approximately 8%, accounting for $8.7 million in sales increases. Export
volume was lower primarily due to the lack of sales to Japan compared to
the prior year. This sales decline was partially offset by higher sales
to the Middle East. Domestic sales were higher as a result of higher
volume partially offset by lower average prices.
Gross Profit. Gross profit was 11% of sales for both the fiscal 1995 and
1996 quarters. Gross profit declined $1.1 million, or 5.5%, from
$20.4 million in fiscal 1995 to $19.3 million in fiscal 1996, due
primarily to lower sales to Japan from ARI's Maxwell, California
facility partially offset by increases in gross profit from Western
Hemisphere and Middle East sales.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $964 thousand, or 8.9% from
$10.9 million in fiscal 1995 to $11.8 million in fiscal 1996. As a
percentage of net sales, selling, general and administrative expenses
increased from 5.9% in 1995 to 6.7% in fiscal 1996 due primarily to a
higher proportion of branded sales in 1996.
Page 10<PAGE>
Interest Expense. Interest Expense increased $1.6 million from
$6.0 million in fiscal 1995 to $7.6 million in fiscal 1996 due to higher
average balances outstanding and higher average interest rates.
Liquidity and Capital Resources
ARI requires liquidity and capital primarily for the purchase of rough
rice and to invest in property, plant and equipment necessary to support
operations. Historically, ARI has financed both working capital and
capital expenditures through internally generated funds and by funds
provided by credit lines.
In a public offering completed on August 24, 1995, ARI issued
$100 million in principal amount of 13.0% mortgage notes due 2002 (the
"Notes"). Portions of the net proceeds of $94 million were used to
repay $53.8 million of existing term debt, to make a $10.5 million 15%
loan to ERLY due 2002, and to reduce borrowings outstanding under the
$47.5 million revolving credit loan.
The Notes provide for interest payments semiannually, mature on July 31,
2002, and are non callable by ARI prior to July 31, 1999, after which
date the Notes are callable at the option of ARI, in whole or in part,
at any time upon not less than 30 nor more than 60 days notice, at
107.0% of the principal amount, declining ratably to par on or after
July 31, 2001. Except under certain changes of control, upon
remarketing of the industrial revenue bonds, or asset sales, as defined
in the Indenture, ARI is not required to make mandatory redemption
payments on the Notes. The Notes accrue fixed interest at an annual
rate of 13.0%, an effective yield rate of 14.4%.
In addition to fixed interest, the Notes bear contingent interest of
4.0% of consolidated cash flow (as defined) up to a limit of $40.0
million of consolidated cash flow during the fiscal year in which such
interest accrues. Contingent interest accrues in each semiannual period
(as defined) in which consolidated cash flow in such period and the
immediately preceding semiannual period is equal to or greater than
$20.0 million. Contingent interest is payable semiannually, but ARI may
elect to defer all or a portion of any such payment to the extent that
(a) the payment of such portion of contingent interest will cause ARI's
adjusted fixed charge coverage ratio (as defined) for the two
consecutive applicable semiannual periods to be less than 2.0:1 and (b)
the principal of the Notes corresponding to such contingent interest has
not then matured and become due and payable.
Page 11<PAGE>
As of September 30, 1995, the total contingent interest accrued was
$89,162. Relevant details are as follows:
December 31, 1994 June 30, 1995
---------------- -----------------
Consolidated Cash Flow:
Year Ended $24,329,000 $20,631,000
Semiannual Period Ended $9,897,000 $10,735,000
Contingent Interest Accrued
as of September 30, 1995:
Amount Pertaining to
Semiannual Period
Ended (Total-$89,162) $17,595 $71,567
Accrual Dates August 24 through September 1 through
August 31, 1995 September 30, 1995
Contingent Interest Paid
as of September 30, 1995: -0- -0-
Adjusted Fixed Cost Coverage
Ratio for Year Ended 1.9 to 1
For the quarter ending September 30, 1995, the consolidated cash flow
was $4,804,000.
The Notes are secured by (a) a first or second priority security
interest in substantially all of ARI's property, plant and equipment
(including related leasehold interests), (b) a first priority security
interest in 39 acres of land in Houston, Texas held for sale, (c) a
pledge agreement creating first priority security interests in the
capital stock of ARI held by ERLY (other than 200,000 shares of ARI's
Series B preferred stock pledged to the holders of ARI's Series
C preferred stock), (d) the ERLY notes receivable and (e) a security
agreement creating a first priority security interest in all registered
U.S. trademarks and a security interest in all other registered
trademarks owned or licensed by ARI.
The Notes rank senior in right of payment to all subordinated
indebtedness and pari passu in right of payment with all existing and
future senior indebtedness of ARI, including borrowings under the
revolving credit loan. The Indenture includes covenants that in certain
instances restrict, among other things, (a) the payment of dividends,
(b) the redemption of equity interests of ARI, (c) the payment on or
redemption of indebtedness subordinate to the Notes, (d) certain
investments (as defined), (e) the incurrence of certain indebtedness and
issuance of preferred stock, (f) certain transactions with affiliates
and (g) certain mergers, consolidations or sales of assets. In
addition, the Indenture contains certain limitations on capital
expenditures, operating lease obligations and rice contract polices and
procedures. The Indenture and the revolving credit loan described below
contain cross default provisions.
The revolving credit loan, which was amended effective June 30, 1995,
bears interest at the prime rate of interest plus 0.5% and will mature
on May 24, 1996. Funds available for borrowing under this revolving
Page 12<PAGE>
credit loan at any time may not exceed 85% of eligible accounts
receivable (or 90% of accounts receivable backed by acceptable letters
of credit from customers) and 70% of eligible inventory. The revolving
credit loan is primarily collateralized by a first priority security
interest in trade receivables, inventory, and certain key man life
insurance. At September 30, 1995, the outstanding balance on this loan
was $10.1 million and on October 1, 1995 the borrowing base under the
loan was $37.4 million. During the six months ended September 30, 1995,
ARI's maximum borrowing under the loan was $32.4 million.
ARI's Board of Directors previously adopted a resolution authorizing its
management to sell 39 acres of land in Houston, Texas. The proceeds of
any such sale are required by the terms of the indenture to be offered
for redemption of the Notes. Management believes that the net realizable
value of this property approximates its current carrying value of $18.3
million.
Capital expenditures, limited by the Note Indenture to $5.5 million per
fiscal year (with carryover provisions as defined) if the consolidated
cash flow (as defined) does not exceed $30 million per year, were $2.9
million and $2.3 million for the six months ended September 30, 1995 and
1994, respectively. Management anticipates the $5.5 million limitation
will allow for maintenance of existing facilities and will also support
limited growth.
ARI's Preferred B and C stock carries annual cumulative, non-
participating dividends of $5.2 million and $750 thousand respectively.
No dividends have been declared or paid as of September 30, 1995. As of
September 30, 1995, the Preferred B dividends accumulated but not
declared are $12.1 million and the Preferred C dividends accumulated but
not declared are $1.8 million.
Page 13<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - none
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Earnings Per Share.
27 Financial Data Schedule
(b) During the quarter ended September 30, 1995, Registrant did not
file any Form 8-K Reports.
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 thereunto duly authorized.
American Rice, Inc.
-------------------
Registrant
Joseph E. Westover
---------------------------
Vice-President / Controller
Page 14<PAGE>
Exhibit 11.1
AMERICAN RICE, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Thousands of Dollars Except Per Share Data)
Three Months Six Months
Ended September 30, Ended September 30,
1995 1994 1995 1994
--------------------------------------------
PRIMARY EARNINGS (LOSS) PER SHARE
Net earnings (loss) ($101) $332 $275 $2,342
Less dividends on preferred stock:
Series B (1,295) (1,295) (2,590) (2,590)
Series C (188) (188) (375) (375)
--------------------------------------------
(1,483) (1,483) (2,965) (2,965)
--------------------------------------------
Loss applicable to
common stock ($1,584) ($1,151) ($2,690) ($623)
============================================
Average common and common
equivalent shares outstanding:
Common 2,444 2,444 2,444 2,444
Preferred Series A - - - -
--------------------------------------------
2,444 2,444 2,444 2,444
============================================
Loss per share
applicable to common stock ($.65) ($.47) ($1.10) ($.25)
============================================
* See Note 4 to Consolidated Financial Statements
Continued on next page
<PAGE>
Exhibit 11.1 (Continued)
AMERICAN RICE, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Thousands of Dollars Except Per Share Data)
Three Months Six Months
Ended September 30, Ended September 30,
1995 ** 1994 ** 1995 ** 1994 **
--------------------------------------------
FULLY DILUTED EARNINGS PER SHARE *
Net earnings (loss) $(101) $332 $275 $2,342
Less dividends on preferred stock:
Series C (188) (188) (375) (375)
--------------------------------------------
Earnings (loss) applicable to
common stock ($289) $144 ($100) $1,967
============================================
Average common and common
equivalent shares outstanding:
Common 2,444 2,444 2,444 2,444
Preferred Series A 778 778 778 778
Preferred Series B 5,600 5,600 5,600 5,600
--------------------------------------------
8,822 8,822 8,822 8,822
============================================
Earnings (loss) per share
applicable to common stock ($.03) $.02 ($.01) $.22
============================================
* See Note 4 to Consolidated Financial Statements
** This calculation is presented in accordance with Regulation
S-K item 601(b)(11) although it is contrary to paragraphs 14, 30,
and 40 of APB Opinion No. 15 because it produces an antidilutive
result. The Opinion provides that a computation on a fully
diluted basis which results in an improvement in earnings
per share when compared to primary earnings per share
(antidilution) not be taken into account. Therefore fully diluted
earnings per share reported on the income statement are the same
as primary earnings per share.
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1995
<PERIOD-TYPE> 6-MOS
<CASH> 1,903
<SECURITIES> 0
<RECEIVABLES> 32,429
<ALLOWANCES> 1,930
<INVENTORY> 55,989
<CURRENT-ASSETS> 93,258
<PP&E> 62,065
<DEPRECIATION> 19,787
<TOTAL-ASSETS> 197,411
<CURRENT-LIABILITIES> 50,252
<BONDS> 94,000
0
3,878
<COMMON> 2,444
<OTHER-SE> 38,165
<TOTAL-LIABILITY-AND-EQUITY> 197,411
<SALES> 176,761
<TOTAL-REVENUES> 176,761
<CGS> 157,507
<TOTAL-COSTS> 157,507
<OTHER-EXPENSES> 11,222
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,602
<INCOME-PRETAX> 430
<INCOME-TAX> 155
<INCOME-CONTINUING> 275
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 275
<EPS-PRIMARY> (1.10)
<EPS-DILUTED> (1.10)
</TABLE>
