<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended DECEMBER 31, 1995.
OR
( _ ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________
Commission file number 0-20274
-------
THE RIVAL COMPANY
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 43-0794462
- ----------------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 E. 101st Terrace, Kansas City, MO 64131
- ----------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
(816) 943-4100
- -----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
- -----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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.
(l) Yes X No
----- -----
(2) Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
As of December 31, 1995, the registrant had 9,725,037 shares
of common stock, par value $.01 per share, outstanding.
<PAGE>
THE RIVAL COMPANY
FORM 10-Q
QUARTER ENDED DECEMBER 31, 1995
INDEX
PART I. - FINANCIAL INFORMATION Page
ITEM 1. Financial Statements
(1) Condensed Consolidated Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of December 31,
1995, December 31, 1994 and June 30, 1995. 3
Condensed Consolidated Statements of Earnings for the three
months and six months ended December 31, 1995 and 1994. 4
Condensed Consolidated Statements of Cash Flows for the
six months ended December 31, 1995 and 1994. 5
(2) Notes to Condensed Consolidated Financial Statements. 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 7
PART II. - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 8
ITEM 6. Exhibits and Reports on Form 8-K 9
2
<PAGE>
PART I - FINANCIAL INFORMATION
THE RIVAL COMPANY AND SUBSIDIARIES
-----------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 1995 and 1994 and June 30, 1995
(amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
12/31/95 12/31/94 6/30/95
-------- -------- -------
<S> <C> <C> <C>
ASSETS
Currents assets:
Cash $ 461 $ 553 $ 193
Accounts receivable 86,612 61,053 43,492
Inventories 74,092 43,982 81,104
Deferred income taxes 860 985 860
Prepaid expenses 621 1,156 835
-------- -------- --------
Total current assets 162,646 107,729 126,484
Property, plant and equipment, net 27,096 21,405 27,072
Goodwill 47,374 38,165 48,186
Other assets 2,784 3,100 2,626
-------- -------- --------
$239,900 $170,399 $204,368
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 53,900 $ 9,700 $ 37,627
Current portion of long-term debt 4,000 4,000 4,000
Trade accounts payable 17,209 11,605 14,972
Income taxes payable 3,020 2,104 577
Other payables and accrued expenses 11,718 8,696 9,015
-------- -------- --------
Total current liabilities 89,847 36,105 66,191
Long-term debt, less current portion 42,000 46,000 42,000
Deferred income taxes 2,372 2,237 2,372
Deferred compensation 226 -- --
Stockholders' equity:
Common stock 97 93 97
Paid-in capital 45,368 40,196 45,366
Retained earnings 60,625 46,512 49,047
Treasury stock, at cost (310) (310) (310)
Foreign currency translation
adjustments (325) (434) (395)
-------- -------- --------
Total stockholders' equity 105,455 86,057 93,805
-------- -------- --------
$239,900 $170,399 $204,368
======== ======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
THE RIVAL COMPANY AND SUBSIDIARIES
-----------------------
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three months and six months ended December 31, 1995 and December 31, 1994
(amounts in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
---------------------- ---------------------
12/31/95 12/31/94 12/31/95 12/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $97,450 $78,087 $171,347 $139,485
Cost of sales 70,140 56,013 122,621 99,712
------- ------- -------- --------
Gross profit 27,310 22,074 48,726 39,773
Selling expenses 9,987 8,176 18,573 14,869
General and administrative expenses 2,935 2,294 5,533 4,706
Amortization of goodwill 406 317 812 634
------- ------- -------- --------
Operating income 13,982 11,287 23,808 19,564
Interest expense 1,684 1,125 3,160 2,121
Other expense, net 133 64 144 99
------- ------- -------- --------
Earnings before income taxes 12,165 10,098 20,504 17,344
Income tax expense 4,709 3,801 7,955 6,644
------- ------- -------- --------
Net earnings $ 7,456 $ 6,297 $ 12,549 $ 10,700
======= ======= ======== ========
Weighted average common and
common equivalent shares
outstanding 9,941 9,504 9,931 9,496
======= ======= ======== ========
Net earnings per common share $ 0.75 $ 0.66 $ 1.26 $ 1.13
======= ======= ======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
THE RIVAL COMPANY AND SUBSIDIARIES
-----------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended December 31, 1995 and December 31, 1994
(amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six months ended
------------------
12/31/95 12/31/94
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $12,549 $10,700
Adjustments to reconcile net earnings to
net cash used by operating activities:
Depreciation and amortization 3,576 3,467
Other (15) --
Changes in assets and liabilities:
Accounts receivable (43,120) (26,296)
Inventories 7,012 6,294
Prepaid expenses 214 (104)
Accounts payable and accruals 4,940 2,181
Income taxes payable 2,443 1,698
------- -------
Net cash used by operating activities (12,401) (2,060)
------- -------
Cash flows from investing activities:
Capital expenditures (2,510) (1,980)
Other (105) 96
------- -------
Net cash used by investing activities (2,615) (1,884)
------- -------
Cash flows from financing activities:
Net borrowings under
working capital loans 16,273 5,100
Payment of long term debt -- --
Dividends paid (971) (742)
Other (18) 20
------- -------
Net cash provided by financing activities 15,284 4,378
------- -------
Net increase (decrease) in cash 268 434
Cash at beginning of period 193 119
------- -------
Cash at end of period $ 461 $ 553
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
THE RIVAL COMPANY AND SUBSIDIARIES
-----------------------
Notes to Condensed Consolidated Financial Statements
Six Months Ended December 31, 1995 and December 31, 1994
Note 1
- ------
In the opinion of Management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments (consisting of normal recurring
accruals) considered necessary to present fairly the financial position of the
Company as of December 31, 1995 and 1994 and the results of its operations and
its cash flows for the six months ended December 31, 1995 and 1994. The June
30, 1995, condensed consolidated balance sheet has been derived from the audited
consolidated financial statements as of that date. These financial statements
have been prepared in accordance with the instructions to Form 10-Q. To the
extent that information and footnotes required by generally accepted accounting
principles for complete financial statements are contained in or consistent with
the audited consolidated financial statements incorporated by reference in the
Company's Form 10-K for the year ended June 30, 1995, such information and
footnotes have not been duplicated herein.
Note 2
- ------
The results of operations for the six months ended December 31, are not
indicative of the results to be expected for the full year due to the seasonal
nature of the Company's operations.
Note 3 Inventories
- ------------------
The following is a summary of inventories at December 31, 1995 and 1994 and June
30, 1995 (in thousands):
<TABLE>
<CAPTION>
Dec. 31, 1995 Dec. 31, 1994 June 30, 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Raw Materials $27,806 $14,184 $33,221
Work in progress 3,203 2,028 1,741
Finished goods 47,815 31,457 49,924
------- ------- -------
78,824 47,669 84,886
Less LIFO allowance (4,732) (3,687) (3,782)
------- ------- -------
$74,092 $43,982 $81,104
======= ======= =======
</TABLE>
Note 4 Subsequent Event
- -----------------------
On January 2, 1996, the Company acquired 100% of the common stock of Fasco
Consumer Products, Inc. ("FASCO"), from H.S. Investments, Inc., a subsidiary of
BTR Dunlop, Inc. Fasco is a manufacturer of heating, ventilating and other
convenience products that are distributed through wholesale and retail markets
with annual sales of approximately $40 million.
The Company paid $23,532,000 in cash as consideration for the common stock of
Fasco and a non-compete agreement from H.S. Investments Inc. and its affiliates.
The source of the funds used by the Company to effect the acquisition was
borrowings under its revolving credit agreement which was amended to increase
the facility from $50 million to $75 million to accommodate the transaction.
The acquisition will be accounted for as a purchase and, accordingly, the
purchase price will be allocated to Fasco's assets and liabilities based upon
their respective fair values.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net sales were $97.5 million in the quarter ended December 31, 1995 compared to
$78.1 million in the prior year. For the six months ended December 31, 1995,
sales were $171.3 million compared to $139.5 million in the prior year. The
largest sales increase was in the other electric appliance category which
reflects sales of Patton Electric heaters and fans. Patton was acquired in
April 1995 and contributed $6.0 million for the quarter and $21.0 million for
the six month period. Massagers also had significant sales increases which
contributed to the growth in other electric appliance sales. Kitchen heating
appliances also recorded significant increases in volume due to higher sales of
Crock Pot(R) slow cookers and toasters.
Sales by product category were as follows (in millions):
<TABLE>
<CAPTION>
Three months ended Six months ended
--------------------- ---------------------
12/31/95 12/31/94 12/31/95 12/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Kitchen heating appliances $48.4 $38.3 $ 78.8 $ 67.0
Kitchen motor-driven appliances 13.9 14.8 23.2 26.3
Other electric appliances 27.9 18.2 55.3 33.0
Water products 7.3 6.8 14.0 13.2
----- ----- ------ ------
$97.5 $78.1 $171.3 $139.5
===== ===== ====== ======
</TABLE>
Gross profit was $27.3 million (28.0% of sales) for the quarter ended December
31, 1995 compared to $22.1 million (28.3% of sales) in the prior year. For the
first six months of the current fiscal year, gross profit was $48.7 million
(28.4% of sales) compared to $39.8 million (28.5% of sales) in the prior year.
Raw material prices have stabilized following the dramatic increases experienced
in the prior year.
Selling expenses were $10.0 million (10.2% of sales) for the quarter ended
December 31, 1995 compared to $8.2 million (10.5% of sales) in the prior year.
For the six months ended December 31, 1995 such expenses were $18.6 million
(10.8% of sales) compared to $14.9 million (10.7% of sales) in the prior year.
Selling expenses were virtually unchanged as a percentage of sales as the
Company expanded its sales management in order to facilitate expected growth and
also increased advertising expenditures for the fall.
General and administrative expenses were $2.9 million for the December 1995
quarter compared to $2.3 million in the prior year. For the six months ended
December 31, 1995, general and administrative expenses were $5.5 million
compared to $4.7 million in the prior year. The higher expenses reflect
increases in product engineering as well as management and support personnel
required because of recent and expected future growth.
Interest expense was $3.2 million for the six months ended December 31, 1995
compared to $2.1 million in the prior year as a result of higher borrowings
required to finance the April 1995 acquisition of Patton Electric.
Net earnings for the quarter ended December 31, 1995 were $7.5 million ($0.75
per share) compared to $6.3 million ($0.66 per share) for the same period in the
prior year. For the six months ended December 31, 1995, net earnings were $12.5
million ($1.26 per share) compared to $10.7 million ($1.13 per share) in the
prior year.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company has in place $46 million of 6.42% unsecured term notes having a
final maturity of January 2003 with required payments of $4 million per year in
fiscal 1996 and 1997. Additionally, the Company has a $50 million, unsecured
revolving credit facility which expires in June 1998 and bears interest at a
floating rate of LIBOR plus .75%. In December 1995, the Company negotiated an
additional $25 million commitment under the revolving credit facility effective
through December 15, 1996. The Company used the proceeds to fund the acquisition
of Fasco Consumer Products on January 2, 1996. As of December 31, 1995, the
Company had approximately $20.0 million available under the working capital
line.
During the six months ended December 31, 1995, the Company used $12.4 million of
cash for operating activities. The Company historically requires a significant
amount of cash each fall to fund its build-up in inventories and accounts
receivable during its peak selling season. The extremely high sales volume
during the second half of the December 1995 quarter resulted in a substantial
increase in accounts receivable balances as of December 31, 1995. The cash
required for the seasonal working capital is funded through borrowings on the
working capital line.
The Company plans to make capital expenditures of approximately $5.0 million to
$6.0 million during fiscal 1996. Management believes that cash generated from
operations and its bank credit facility will be sufficient to meet its cash
requirements for the foreseeable future.
PART II - OTHER INFORMATION
---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
A regular annual meeting of shareholders was held on December 13, 1995.
Each of the Company's directors was elected to a one year term. The
respective votes were as follows: Jack J. Culberg, 7,978,437 shares
voted for election and 347,389 shares withheld votes; Thomas K.
Manning, 8,197,216 shares voted for election and 128,610 shares
withheld votes; William S. Endres, 8,197,216 shares voted for election
and 128,610 shares withheld votes; Darrel M. Sanders, 8,197,016 shares
voted for election and 128,810 shares withheld votes; William L. Yager,
8,156,579 shares voted for election and 169,247 shares withheld votes;
Todd Goodwin, 7,997,991 shares voted for election and 327,835 shares
withheld votes; John E. Grimm, III, 8,214,766 shares voted for election
and 111,060 shares withheld votes; Lanny R. Julian, 8,214,616 shares
voted for election and 111,210 shares withheld votes; Beatrice B.
Smith, 8,215,466 shares voted for election and 110,360 shares withheld
votes; Noel Thomas Patton, 8,197,016 shares voted for election and
128,810 shares withheld votes. Additionally, the shareholders voted to
ratify the appointment of KPMG Peat Marwick as independent public
accountants for the Company for the fiscal year ending June 30, 1996.
The vote was 8,297,808 shares voted for ratification, 24,123 shares
voted against ratification and 3,895 shares for which the vote was
withheld.
8
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits.
10(j) Fourth Amendment to Credit Agreement between the Company, the
banks listed therein, and NationsBank of Texas, N.A. as agent.
11 Schedule regarding computation of per share earnings.
(b) Reports on Form 8-K.
On January 16, 1996, the Company filed a Report on Form 8-K with
respect to the acquisition of 100% of the stock of Fasco Consumer
Products, Inc. The items reported on the Form 8-K were Item 2,
Acquisition or Disposition of Assets and Item 7(c), Exhibits.
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 thereunto duly authorized.
THE RIVAL COMPANY
Dated: January 26, 1996 By: /s/ Thomas K. Manning
-------------------------
Thomas K. Manning
President and CEO
(Duly Authorized Officer)
Dated: January 26, 1996 By: /s/ William L. Yager
-------------------------
William L. Yager
Senior Vice-President of
Finance and Administration,
Chief Financial Officer
9
<PAGE>
Exhibit 10j
FOURTH AMENDMENT TO CREDIT AGREEMENT
------------------------------------
THIS AMENDMENT is entered into as of December 15, 1995, among THE RIVAL
COMPANY, a Delaware corporation (the "BORROWER"), NATIONSBANK OF TEXAS, N.A.,
BANK ONE, INDIANAPOLIS, NATIONAL ASSOCIATION, BANK OF AMERICA ILLINOIS (FORMERLY
CONTINENTAL BANK N.A.), and other financial institutions from time to time that
may become parties to the Credit Agreement, defined below (collectively the
"BANKS" or individually a "BANK"), and NATIONSBANK OF TEXAS, N.A., a national
banking association as agent for the Banks hereunder (in such capacity, together
with any successor in such capacity, the "AGENT");
The Borrower, the Banks, and the Agent entered into a Credit Agreement
dated as of July 23, 1993, as amended May 2, 1994, January 20, 1995, and
September 15, 1995 (as further renewed, extended, amended, or supplemented, the
"CREDIT AGREEMENT"). The Company has requested certain amendments to the Credit
Agreement.
NOW, THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Borrower, the Banks, and the Agent agree as follows:
1. DEFINITIONS. Unless otherwise specified herein, terms defined in the
Credit Agreement have the same meaning when used herein, and all references to
"Sections" are references to sections of the Credit Agreement.
2. DEFINITION OF "APPLICABLE MARGIN". The definition of "APPLICABLE
MARGIN" in the Credit Agreement is hereby amended in its entirety to read as
follows:
"APPLICABLE MARGIN" is determined by reference to the following table:
=========================================================================
APPLICABLE APPLICABLE STANDBY
LEVEL LEVERAGE RATIO MARGIN FOR MARGIN FOR LETTER OF
ADJUSTED LIBOR CD LOANS CREDIT FEES
LOANS
- -------------------------------------------------------------------------
I Less than .40 to 1.0 .45% .575% .45%
- -------------------------------------------------------------------------
II Less than or equal .50% .625% .50%
to .50 to 1.0 but
greater than or
equal to .40 to 1.0
- -------------------------------------------------------------------------
III Greater than .50 to .75% .875% .75%
1.0
=========================================================================
(a) From December 15, 1995 through December 30, 1995, the Applicable
Margin shall be at Level II.
<PAGE>
(b) Effective as of December 31, 1995, the Applicable Margin shall be
adjusted upwards to Level III (based upon the Leverage Ratio determined
from the Borrower's unaudited pro forma Consolidated projected December 31,
1995 balance sheet delivered to the Banks and attached as Annex 1 to the
Fourth Amendment to Credit Agreement dated as of December 15, 1995).
(c) Thereafter, the Applicable Margin shall be subject to adjustment
annually (upwards or downwards, as appropriate) based upon the Leverage
Ratio determined from the Borrower's most recent audited annual
Consolidated financial statements (commencing with the June 30, 1996 fiscal
year end) delivered to the Banks pursuant to SECTION 4.1.1 hereof. The
adjustment (upwards or downwards, as appropriate), if any, to the
Applicable Margin shall be effective on the tenth (10th) Banking Day after
the Agent receives such audited annual Consolidated financial statements.
In the event the Agent has not received the required Consolidated financial
statements pursuant to SECTION 4.1.1 hereof within the time period provided
therein, the maximum Leverage Ratio set forth in the foregoing table shall
be conclusively presumed to be correct until the tenth (10th) Banking Day
after the Agent receives such required Consolidated financial statements,
at which time the Adjusted Margin shall be adjusted based upon the Leverage
Ratio determined from such Consolidated financial statements.
(d) In no event shall the Applicable Margin be adjusted downward if
there exists a Default or Potential Default on the date on which such
downward adjustment would otherwise become effective until such time as the
Default or Potential Default has been cured, waived or ceases to exist. The
provisions set forth in this definition are not intended to and shall not
be construed as authorizing any violation by the Borrower of SECTION 4.1.4
hereof or a waiver of SECTION 4.1.4 hereof or any commitment by the Banks
to waive any violation by the Borrower of SECTION 4.1.4 hereof.
3. COMMITMENTS. Effective December 15, 1995, SCHEDULE 1.1 to the Credit
Agreement is amended in its entirety to be in the form of SCHEDULE 1.1 attached
hereto.
4. PAYMENTS OF PRINCIPAL AND INTEREST. Effective December 15, 1995,
SECTION 2.2.3 of the Credit Agreement is amended in its entirety to read as
follows:
2.2.3 Payments of Principal and Interest. Interest only on the
outstanding Advances of the Loans from time to time which bear interest at
the Base Rate shall be due and payable in arrears on the first (1st) day of
each calendar quarter throughout the term of the Commitment Period.
Interest on each Permissible Increment of Advances outstanding which are
subject to an Optional Rate, shall be due and payable in arrears on the
last day of the LIBOR Interest Period or CD Rate Interest Period to which
that Permissible Increment is subject, provided that, with respect to each
Permissible Increment of Advances which is subject to an Optional Rate with
an Interest Period of 120 days or more, interest on such Permissible
Increment of Advances shall also be due and payable in arrears on the first
(1st) day of each calendar quarter throughout the term
2
<PAGE>
of the Commitment Period. During each fiscal year, the Borrower shall make
principal payments in an amount sufficient that the outstanding principal
balance of Advances under the Loans shall not exceed (i) Ten Million
Dollars ($10,000,000) for fiscal years other than 1996, and (ii)
$45,000,000 for fiscal year 1996, for a 45 consecutive day period chosen by
the Borrower and notified to the Banks in the Compliance Certificate next
following the last day of such period. Unless the Loans are sooner paid or
extended by the Banks in their sole discretion, the entire principal
balance of the Loans, together with all accrued and unpaid interest
thereon, and all fees and charges payable in connection therewith, shall be
due and payable on the last day of the Commitment Period. On December 15,
1996, or, if the acquisition of described in Section 2.2.6 hereof shall not
have been consummated on or before January 31, 1996, then on February 1,
1996, the Borrower shall make a principal payment in an amount sufficient
that the outstanding principal balance of Advances under the Loans shall
not exceed Fifty Million Dollars ($50,000,000).
5. USE OF PROCEEDS. SECTION 2.2.6 of the Credit Agreement is hereby
amended in its entirety to read as follows:
2.2.6 Use of Proceeds. The proceeds of Advances of Loans shall be used
for general corporate purposes and to acquire 100 percent of the issued and
outstanding stock of Fasco Consumer Products, Inc.
6. CONDITIONS. This Fourth Amendment shall become effective when the
Agent receives the following:
(a) a new Note for each Bank in the amount of its Commitment; and
(b) a certified copy of resolutions of the Board of Directors of the
Borrower authorizing the execution and delivery of this Fourth Amendment
and the Notes, and designating by name and title the officer or officers of
the Borrower authorized to execute and deliver the same.
7. RATIFICATIONS. Except as herein specifically amended and modified, (a)
the Credit Agreement is unchanged and continues in full force and effect, and
(b) the Borrower hereby confirms and ratifies the Credit Agreement's existence
and each and every term, condition, and covenant therein contained, to the same
extent and as though the same were set out herein in full.
8. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Banks, and the Agent that (a) this amendment has been duly
executed and delivered by the Borrower, (b) no action of, or filing with, any
Governmental Authority is required to authorize, or is otherwise required in
connection with, the execution, delivery, and performance by the Borrower of
this amendment, (c) this amendment is valid and binding upon the Borrower and
is enforceable against the Borrower in accordance with its respective terms,
except as
3
<PAGE>
limited by the Bankruptcy Code of the United States of America and all other
similar laws affecting the rights of creditors generally, (d) the execution,
delivery and performance by the Borrower of this amendment do not require the
consent of any other Person and do not and will not constitute a violation of
any laws, agreement, or understanding to which the Borrower is a party or by
which the Borrower is bound, (e) as of the date of this amendment, no Default or
Potential Default has occurred and is continuing.
9. REFERENCES. All references in the Loan Documents to the Credit
Agreement shall refer to the Credit Agreement as amended by this amendment, and,
because this amendment is a "LOAN DOCUMENT" referred to in the Credit Agreement,
then the provisions relating to Loan Documents set forth in the Credit Agreement
are incorporated herein by reference, the same as if set forth herein verbatim.
10. COUNTERPARTS. This amendment may be executed in a number of identical
counterparts, each of which shall be deemed an original. In making proof of
this instrument, it shall not be necessary for any party to account for all
counterparts, and it shall be sufficient for any party to produce but one such
counterpart.
11. PARTIES BOUND. This amendment shall be binding upon and shall inure
to the benefit of the Borrower, Agent, and each Bank, and, subject to SECTION
8.3, their respective successors and assigns.
12. ENTIRETY. THIS AMENDMENT, THE CREDIT AGREEMENT AS AMENDED HEREBY, AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL CREDIT AGREEMENT BETWEEN THE
PARTIES FOR THE TRANSACTIONS THEREIN, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK. SIGNATURE PAGES FOLLOW.]
4
<PAGE>
EXECUTED as of the date and year first stated above.
THE RIVAL COMPANY, a Delaware corporation
By:
-------------------------------------------
Its:
-------------------------------------------
NATIONSBANK OF TEXAS, N.A., as Agent
and a Bank
By:
-------------------------------------------
Its:
-------------------------------------------
BANK ONE, INDIANAPOLIS, NATIONAL
ASSOCIATION, a Bank
By:
-------------------------------------------
Its:
-------------------------------------------
BANK OF AMERICA ILLINOIS (formerly
CONTINENTAL BANK N.A.), a Bank
By:
-------------------------------------------
Its:
-------------------------------------------
<PAGE>
SCHEDULE 1.1
------------
BANKS AND COMMITMENTS
---------------------
=====================================================================
COMMITMENT COMMITMENT
BANK AND ADDRESS THROUGH AFTER
DECEMBER 15, DECEMBER 15,
1996/1/ 1996
---------------------------------------------------------------------
NationsBank of Texas, N.A. 33,000,000 $22,000,000
901 Main Street, 67th Floor
Dallas, Texas 75202
Telecopy No. (214) 508-0980
Attn: Perry B. Stephenson
Senior Vice President
---------------------------------------------------------------------
Bank One, Indianapolis, National 21,000,000 14,000,000
Association
Bank One Center-Tower
111 Monument Circle, Suite 1911
Indianapolis, Indiana 46277-0119
Telecopy No. (317) 321-8830
Attn: Holly Fischer Durbin
Relationship Manager
---------------------------------------------------------------------
Bank of America Illinois (formerly 21,000,000 14,000,000
Continental Bank N.A.)
231 South La Salle Street
Chicago, Illinois 60697
Telecopy No. (312) 987-1276
Attn: R. Guy Stapleton
Vice President
---------------------------------------------------------------------
TOTAL $75,000,000 $50,000,000
=====================================================================
- ------------------
/1/ Provided that, if the acquisition described in Section 2.2.6 hereof shall
not have been consummated on or before January 31, 1996, on February 1,
1996, each Bank's Commitment shall reduce to its Pro Rata Share of
$50,000,000.
<PAGE>
THE RIVAL COMPANY AND SUBSIDIARIES EXHIBIT 11
EARNINGS PER SHARE
(in thousands except per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
--------------------- ---------------------
12/31/95 12/31/94 12/31/95 12/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net earnings $7,456 $6,297 $12,549 $10,700
====== ====== ======= =======
Primary Earnings Per Share
- --------------------------
Weighted average common and common
equivalent shares outstanding 9,941 9,504 9,931 9,496
====== ====== ======= =======
Earnings per common and common
equivalent share $ 0.75 $ 0.66 $ 1.26 $ 1.13
====== ====== ======= =======
Share computation:
Average common shares
outstanding 9,725 9,285 9,721 9,284
Average number of options
outstanding 531 413 535 416
Less treasury shares acquired
with proceeds from exercise
of options (315) (194) (325) (204)
------ ------ ------- -------
Weighted average common and common
equivalent shares outstanding 9,941 9,504 9,931 9,496
====== ====== ======= =======
</TABLE>
* Fully diluted earnings per share is equal to primary earnings per share for
all periods presented.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
Form 10-Q for the 12/31/95 Quarter and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> JUN-30-1996 JUN-30-1995
<PERIOD-START> JUL-01-1995 JUL-01-1994
<PERIOD-END> DEC-31-1995 DEC-31-1994
<CASH> 461 553
<SECURITIES> 0 0
<RECEIVABLES> 89,215 63,260
<ALLOWANCES> 2,603 2,207
<INVENTORY> 74,092 43,982
<CURRENT-ASSETS> 162,646 107,729
<PP&E> 50,411 40,830
<DEPRECIATION> 23,315 19,425
<TOTAL-ASSETS> 239,900 170,399
<CURRENT-LIABILITIES> 89,847 36,105
<BONDS> 42,000 46,000
<COMMON> 97 93
0 0
0 0
<OTHER-SE> 105,358 85,964
<TOTAL-LIABILITY-AND-EQUITY> 239,900 170,399
<SALES> 171,347 139,485
<TOTAL-REVENUES> 171,347 139,485
<CGS> 122,621 99,712
<TOTAL-COSTS> 122,621 99,712
<OTHER-EXPENSES> 24,918 20,209
<LOSS-PROVISION> 262 353
<INTEREST-EXPENSE> 3,160 2,121
<INCOME-PRETAX> 20,504 17,344
<INCOME-TAX> 7,955 6,644
<INCOME-CONTINUING> 12,549 10,700
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 12,549 10,700
<EPS-PRIMARY> 1.26 1.13
<EPS-DILUTED> 1.26 1.13
</TABLE>
