RIVIANA FOODS INC /DE/, 10-K405, 2000-09-20

RIVIANA FOODS INC /DE/
10-K405, 2000-09-20
GRAIN MILL PRODUCTS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JULY 2, 2000

[ ] 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 0-25294

RIVIANA FOODS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 76-0177572
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)

2777 ALLEN PARKWAY
HOUSTON, TX 77019-2141
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 529-3251

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None.

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS)

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
---- ----

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
----

As of August 24, 2000 the aggregate market value of the Registrant's voting
stock held by non-affiliates of the Registrant was approximately $99,492,000.

The number of shares of Common Stock of the Registrant, par value $1.00 per
share, outstanding at August 24, 2000 was 14,126,853.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant's definitive Proxy Statement for the 2000 Annual
Meeting of Stockholders to be held October 18, 2000 (the "Proxy Statement") are
incorporated by reference into Part III, Items 10, 11, 12 and 13.

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PART I

ITEM 1. BUSINESS.

Riviana Foods Inc. ("Riviana," the "Company," or the "Registrant") was
incorporated on January 31, 1986. The Company's predecessors date back to 1911
when Frank A. Godchaux began the amalgamation of 25 rice mills in southwest
Louisiana.

Riviana processes, markets and distributes rice products in the United
States, cookies, crackers, fruit juices, nectars and drinks, and processed
fruits and vegetables in Central America, and rice and other food products in
Europe. For fiscal 2000, the Company's domestic operations accounted for
approximately 65% and 73% of net sales and operating income before general
corporate expenses, respectively, and international operations accounted for
approximately 35% and 27% of net sales and operating income before general
corporate expenses, respectively.

Riviana's domestic operations consist primarily of sales of retail branded
and private-label rice products, sales of rice products to retail food service
chains, sales of rice and rice by-products to major food processors and other
industrial users and exports of branded and value-added rice products to Puerto
Rico and a number of international markets. Sales of retail branded and
private-label rice products represent the most significant component of the
Company's domestic operations, accounting for approximately 47% of the Company's
total net sales during fiscal 2000.

By volume, Riviana is the largest seller of retail branded and
private-label rice products in the United States, offering a variety of products
in each of the retail rice industry's four categories: dried rice (milled white
and parboiled rice), instant rice (rice that cooks in 10 minutes or less),
prepared rice (specialty mixes) and brown rice.

The Company's domestic sales by hundredweight ("cwt") of retail rice
products have grown at a compound annual rate of 5% from fiscal 1996 to 2000.
The Company believes its consistent growth has resulted from its longstanding
national presence and reputation for quality, and its ability to develop and
market easy-to-prepare, value-added instant and specialty mix products.

The Company markets its branded products under a number of nationally
recognized brand names including:

MAHATMA(R) -- the best selling brand of packaged long grain rice in
the U.S. for ten years.

SUCCESS(R) -- the leading brand of instant boil-in-bag rice and the
second leading brand of instant rice in the U.S.

CAROLINA(R) -- one of the leading brands of packaged long grain rice
in the northeastern and mid-Atlantic U.S.

WATERMAID(R) -- the leading brand of medium grain rice in the south
and southeastern U.S.

RIVER(R) -- the top-selling brand of packaged medium grain rice in
several northeastern and mid-Atlantic U.S. markets.

S&W(R) -- the best selling brand of packaged long grain rice in the
Pacific northwest.

GOURMET HOUSE(R) -- the leading brand of packaged wild rice in the
U.S.

Riviana also markets a variety of easy-to-prepare, flavored rice mixes
under the Mahatma(R), Carolina(R) and Success(R) brand names, including
Mahatma(R) brand Yellow Rice, Red Beans & Rice, Spanish Rice, Black Beans &
Rice, Spicy Yellow Rice, Nacho Cheese Rice and Beef Rice, Carolina(R) brand
Yellow Rice, Black Beans & Rice, Pilaf Rice, Chicken Rice and Spanish Rice, and
Success(R) brand Yellow Rice, Brown & Wild Rice, Broccoli & Cheese Rice, Red
Beans & Rice and Grilled Chicken & Broccoli Rice.

In addition to its branded products, the Company supplies a full range of
private-label rice products -- dried rice, instant rice, rice mixes and brown
rice -- to numerous food retailers, including 48 of the top
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50 retailers in the United States. In July 1998, the Company also began
marketing and distributing retail rice products in the United States and the
Bahamas for Riceland Foods, Inc., with whom it also participates in rice flour
milling and co-generation projects.

The Company supplies parboiled and instant rice in bulk to a number of the
nation's major food processors for use as an ingredient in other food products.
The Company also markets a range of foodservice products, principally instant
rice, parboiled rice, and rice mixes, to several of the top restaurant chains
and foodservice companies in the United States, and sells bulk rice and rice
by-products to industrial users.

Riviana exports brand name and value-added rice products to Puerto Rico and
a number of foreign countries. The Company's Puerto Rican brands, El Mago(R),
Sello Rojo(R) and Mahatma(R), represent approximately 20% of the total Puerto
Rican retail rice market, where per capita rice consumption is approximately
five times the United States level. The Company also exports brand name and
private-label rice products to Canada, Mexico, Guatemala and countries in the
Caribbean, Europe, Africa and the Middle East.

In Central America, the Company operates as one of the largest
manufacturers of cookies and crackers and processors of fruits and vegetables
through Pozuelo, S.A. ("Pozuelo") in Costa Rica and Alimentos Kern de Guatemala,
S.A. ("Kern"). In cookies and crackers, Costa Rica is the largest market,
followed by Guatemala and El Salvador. The Company has committed significant
resources to the manufacturing of cookies and crackers in the past five years to
modernize its facilities and convert them into a modern, efficient baking
operation. The principal brands are Riviana Pozuelo(R) soda crackers and
saltines, Bokitas(R) oil sprayed crackers, Familia(R) assortments of sweet
biscuits, and Chiky(R), which is a chocolate-enrobed sweet biscuit. In processed
fruits and vegetables, the Company produces a wide variety of products,
including fruit nectars and juices, fruit drinks, tomato products (sauces,
ketchup and paste), canned vegetables and refried beans under the Kern's(R),
Ducal(R), Fun-C(R) and Koolfrut(R) brands. These products are sold principally
in Central America with the largest markets being Guatemala, Costa Rica and El
Salvador. Exports, including refried beans exported to the United States,
represent a part of the Central American business. Many of the Company's primary
brand name products are market leaders in Central America in their respective
categories.

Sales in Central America, expressed in dollars, have grown at a compound
growth rate of 4% from fiscal 1996 to 2000. The Central American segment
accounted for approximately 18% of net sales and 22% of operating income before
general corporate expenses in fiscal 2000.

In Europe, the Company is a major rice miller, marketer and distributor of
rice products and a distributor of other food products including canned and
dried fruits, nuts, vegetables and meats to retail, wholesale, food-service and
industrial customers through its subsidiaries, N & C Boost N.V. ("N&C") and
Stevens & Brotherton Ltd. ("S&B"). N&C, a Belgian subsidiary, competes in the
continental European rice market through its management of Boost Nutrition C.V.
("Boost"). Boost is accounted for as an unconsolidated affiliate and is jointly
owned by N&C and Arrocerias Herba, S.A., a major European rice miller and
marketer. Boost buys parboiled and regular brown rice in bulk, which it then
mills, packages and markets under its own and private-label brand names and in
bulk. Boost markets its own brand name, Bosto(R), in Belgium, and Oryza(R), in
Germany, which are leading brands of consumer packaged rice in those countries.
Boost's Boss(R) brand canned cream rice is the leading canned creamed rice in
Belgium. Boost also distributes bulk and private-label packaged rice to major
retailers in Europe. The Boost joint ownership agreement provides that each
party has certain rights to buy the other's interest or require the other to buy
its interest. N&C also owns a one-third interest in Herto N.V., a major European
rice cake manufacturer.

S&B, a United Kingdom subsidiary, distributes a variety of brand name and
private-label products including rice and canned fruits, vegetables and meats to
retail, wholesale, foodservice and industrial customers. The products
distributed by S&B are all produced by other manufacturers and generate a lower
gross profit margin than other Riviana operations.

The Company's European operations accounted for approximately 17% of net
sales and 5% of operating income before general corporate expenses in fiscal
2000.

Financial segment information by geographic area for the most recent three
fiscal years is set forth in Item 8, Note 12, "Segment information."
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The Company is exposed to certain political, economic and other risks
inherent in doing business abroad, including exposure to currency exchange rate
fluctuations, currency exchange restrictions, potentially unfavorable changes in
tax or other laws, partial or total expropriation, and the risks of war,
terrorism and other civil disturbances. Additional information related to this
matter is set forth in Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" under the caption "General." The
Company's strategies for minimizing the effect of currency rate fluctuations are
to borrow in local currencies, denominate accounts receivable in local
currencies and hedge certain short-term foreign product procurement commitments
with specific currency exchange contracts. Currency rate fluctuations have not
materially impacted the historical results of operations. The functional
currencies of the Company's foreign subsidiaries are the local currency of each
subsidiary.

The Company has a large customer base that includes retail supermarket
chains, wholesalers, industrial ingredient users, restaurant chains, breweries
and other food processors. No customer, domestic or international, accounted for
more than 5% of the Company's consolidated revenues in fiscal 2000.

In the United States, the Company supports its branded business primarily
with regional media advertising and trade and consumer promotions, including
significant coupon and product tie-in programs. These programs are coordinated
by Company marketing and sales departments through eight regional managers and a
national network of food brokers.

The Company's sales of retail rice products are executed on a purchase
order basis, although the Company does have some contracts under which it
supplies rice products to industrial and international customers. The Company's
sales of retail rice products are conducted through independent food brokers,
who are coordinated by the Company's regional sales managers. Products are
distributed through a nationwide network of Company and public warehouses.

The Company buys rough rice from a variety of farm sources, primarily in
Arkansas and Louisiana. No single source accounts for more than 10% of rough
rice purchases. In addition to milling rice in its own facilities, the Company
purchases significant amounts of rice milled to the Company's specifications
from a number of the leading rice milling companies in the United States. In
fiscal 2000, 71% of the Company's milled rice purchases was from one supplier.
The Company believes adequate alternative sources of supply are readily
available.

The Company's competitive position depends largely on continued consumer
brand loyalty and its ability to introduce and gain customer acceptance for new
products. The Company competes with three major industry leaders and with
several regional competitors on the basis of price, quality, brand name
recognition, availability of products and product innovation.

The Company is the industry leader in sales of branded rice measured by
volume. The Quaker Oats Company is the largest seller of branded rice in the
industry measured in dollars with its rice mixes, Rice-A-Roni and Near East.
Mars, Inc., through its subsidiary Uncle Ben's, Inc., is the largest seller of
parboiled rice. Kraft Foods Inc., a subsidiary of Philip Morris Companies, Inc.,
produces the leading brand of instant rice, Minute.

The Company's Central American subsidiaries have local competitors, some of
which are affiliated with multinational companies. New competition has come from
an influx of international brands imported from the United States, Mexico and
South America attributable largely to declining import duties in Central
America.

In Belgium and Germany, Boost competes with branded products from Master
Foods (a subsidiary of Mars, Inc.) and Kraft Foods, as well as branded products
packaged by other European millers and processors. In the United Kingdom, S&B
competes with European rice millers, including mills in the United Kingdom, from
which it also purchases rice, for its share of the rice market. In the
private-label market for products other than rice, S&B competes with importers
representing world-wide manufacturing operations that process fruits, vegetables
and other food products.

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Although the Company is not involved in rice farming, certain government
regulations affecting United States rice farmers have an impact on the Company's
cost of raw materials. Substantially all rice grown in the United States is
influenced by government programs.

In April 1996, the Federal Agriculture Improvement and Reform Act ("1996
Farm Bill") was enacted to replace the 1990 predecessor, the Food, Agriculture,
Conservation and Trade Act of 1990 ("1990 Farm Bill"). The 1996 Farm Bill
provides marketing loans and agricultural marketing transition payments (as
defined) to qualifying farmers for seven years beginning with the 1996 crop.
Under the 1996 Farm Bill, agricultural market transition payments range on a
declining scale from $2.75 per cwt for the 1996 crop to $2.03 per cwt in 2002
and replace similar payments of the 1990 Farm Bill. However, for the 1999 and
2000 crop years, the payments were supplemented to counter low commodity prices.
Unlike the payments under the 1990 Farm Bill, the agricultural market transition
payments are fixed without reference to price levels. Other important provisions
of the 1996 Farm Bill include the elimination of acreage reduction incentives
and increased flexibility of farmers to plant different crops other than rice as
market conditions warrant. The changes introduced by the 1996 Farm Bill may have
a significant impact on the supply and price level of rice grown in the United
States.

The Company is subject to various federal, state and local environmental
laws and regulations concerning air quality, water quality, and the generation,
use and disposal of materials relating to plant operations and to the processing
of rice. The Company procures and maintains the necessary environmental permits
and licenses in order to operate its facilities and considers itself to be in
compliance in all material respects with those environmental laws and
regulations currently applicable to its business and operations. Such compliance
has not materially affected the Company's business, financial condition or
results of operations.

The manufacture and marketing of the Company's products are subject to
regulation in the United States by federal regulatory agencies, including the
Environmental Protection Agency, the Occupational Safety and Health
Administration, the Food and Drug Administration ("FDA"), and by various state
and local authorities. The FDA also regulates the labeling of the Company's
products. The Company's operations outside the United States are subject to
similar regulation in a number of countries. Compliance with existing
requirements of such governmental bodies has not materially affected the
Company's capital expenditures, earnings or competitive position.

The Company's brands are protected by numerous trademark registrations in
the United States and foreign jurisdictions. The Company believes that its
registered trademarks have significant value, and are adequate to protect the
brand names significant to its business.

As of August 31, 2000, the Company employed approximately 2,784 employees,
22% of whom were covered by collective bargaining agreements. In Houston, Texas,
the Company is a party to collective bargaining agreements with General Drivers,
Warehousemen and Helpers Teamsters Local Union No. 968, covering a total of 257
employees. In Memphis, Tennessee, the Company is a party to a collective
bargaining agreement with Teamsters Local Union No. 1196 covering 100 employees.
In Guatemala, Kern's collective bargaining agreement with a local union expired
in June 2000 and is currently being renegotiated. It covers 264 employees. The
Company believes its labor relations are good.

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ITEM 2. PROPERTIES.

The following table lists the Company's principal properties, all of which
are owned unless otherwise indicated.

<TABLE>
<CAPTION>
LOCATION NATURE OF FACILITY SQUARE FOOTAGE
-------- ------------------ --------------
<S> <C> <C>
Houston, Texas.................. Processing, packaging, technical center, warehouse 170,600
Houston, Texas(1)............... Corporate headquarters 52,100
Abbeville, Louisiana............ Processing, packaging, warehouse 137,200
Memphis, Tennessee.............. Packaging, warehouse 99,700
Carlisle, Arkansas.............. Processing 94,880
Jonesboro, Arkansas(1).......... Operations, gasification, storage for rice hulls 6,000
Stuttgart, Arkansas(1).......... Operations, gasification, storage for rice hulls 36,705
Edison, New Jersey(1)........... Warehouse 99,902
Clearbrook, Minnesota........... Processing, packaging, warehouse 27,440
Orpington, England(1)........... Trading office 11,100
Bristol, England(2)............. Distribution 210,000
San Jose, Costa Rica............ Production, packaging, warehouse 257,000
Guatemala City, Guatemala....... Production, packaging, warehouse 267,000
San Salvador, El Salvador(1).... Distribution, warehouse 28,000
Managua, Nicaragua(1)........... Distribution, warehouse 22,600
</TABLE>

---------------

(1) Leased facility.

(2) Contracted space and services.

In addition to the properties listed in the table, the Company owns six
drying and storage facilities strategically located in the rice growing region
of the southeastern United States, and leases warehouse facilities in Houston
and Memphis.

ITEM 3. LEGAL PROCEEDINGS.

The Company is from time to time subject to claims and suits arising in the
ordinary course of business. The Company is not currently a party to any
proceeding which, in management's opinion, would have a material adverse effect
on the Company's financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

During the fourth quarter of the fiscal year ended July 2, 2000, no matter
was submitted to a vote of the stockholders.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Information relating to the Company's common stock is set forth in Item 8
in Note 10, "Capital stock," and in Note 13, "Selected quarterly financial data
(unaudited)."

On August 31, 2000, the Board of Directors declared a quarterly cash
dividend of $0.14 per common share payable October 10, 2000 to stockholders of
record on September 5, 2000.

The Company has a continuing stock repurchase program. The program
authorizes the repurchase of up to 3,000,000 shares of the Company's common
stock from time to time. As of August 24, 2000 the Company had repurchased
1,910,096 shares. The Company expects to finance any future repurchases from
working capital, unused short-term credit lines and cash flow from operations.

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ITEM 6. SELECTED FINANCIAL DATA.

The following table represents selected consolidated financial data for the
Company and its subsidiaries for each of the five fiscal years 1996 through
2000. All amounts are in thousands except per share data.

<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.......................... $435,885 $462,761 $454,012 $460,183 $440,492
Net income......................... 25,101 24,255 22,590 20,025 18,342
Earnings per share:
Basic......................... 1.74 1.62 1.44 1.27 1.16
Diluted....................... 1.73 1.60 1.42 1.26 1.15
BALANCE SHEET DATA (AT END OF YEAR):
Total assets....................... $209,115 $200,204 $205,328 $191,889 $182,504
Short-term debt and Current
maturities of long-term debt..... 5,900 1,973 2,705 6,874 13,031
Long-term debt, net of current
maturities....................... 1,462 1,390 1,861 2,619 3,644
Total debt......................... 7,362 3,363 4,566 9,493 16,675
Stockholders' equity............... 134,931 130,377 137,744 127,076 116,506
Dividends paid per share........... 0.53 0.47 0.42 0.38 0.3466
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

The following discussion and analysis should be read in conjunction with
the Company's consolidated financial statements and the related notes.

GENERAL

The Company operates on a 52/53-week fiscal year ending on the Sunday
closest to June 30th. This period is utilized because it closely coincides with
the rice crop year in the southern United States and rice is the largest
component of the Company's business. For fiscal 2000, the Company's fiscal year
was a 53-week period whereas fiscal 1999 covered 52-weeks of operations. The
additional week was included in the second fiscal quarter of fiscal 2000.

The Company operates in various foreign countries and is therefore subject
to currency fluctuations. Changes in the value of the United States dollar
against these currencies will affect the Company's results of operations and
financial position. When the United States dollar strengthens compared to other
local currencies, the operating results of the Company's foreign units translate
into fewer United States dollars, thus decreasing the revenues and expenses of
the Company on a consolidated basis. If the United States dollar weakens against
the other relevant currencies, the opposite occurs. The Company's foreign units
attempt to minimize the effects of currency risk by borrowing externally in the
local currency and by hedging their purchases made in foreign currencies when
that option is available. As a matter of policy, the Company does not engage in
currency speculation. Changes in exchange rates historically have not materially
impacted the Company's net sales, costs or business practices and management
expects this to continue.

Inflationary conditions in the United States and Europe have been moderate
and have not had a material impact on the Company's results of operations or
financial position for the three years ended July 2, 2000. Despite higher
inflationary rates in Central America, inflation has not had a material impact
on the results of operations or financial position of the Company's units
located in that region because the Company has generally been able to pass on
cost increases to its customers.

The Company includes in domestic operations all export sales originating
from the United States and sales in Puerto Rico.

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Fiscal 2000 Compared to Fiscal 1999

For the fiscal year ended July 2, 2000 sales decreased $26.9 million or
5.8% to $435.9 million from $462.8 million for the previous fiscal year.
Domestic sales decreased $6.6 million or 2.3% to $281.5 million and sales from
international operations decreased by $20.3 million or 11.6% to $154.4 million.
Lower volumes reduced sales $3.0 million and the combined effect of price and
sales mix decreased sales by $12.2 million. Unfavorable currency translation
reduced sales a further $11.7 million. In the domestic rice business sales of
$277.5 million decreased $7.1 million or 2.5% from the prior year sales of
$284.6 million. In the retail sector, sales decreased by $2.9 million or 1.4% to
$205.2 million in fiscal 2000 from $208.1 million in the prior year. Higher
volumes added $1.9 million to sales and a combination of price and product mix
reduced sales by $4.8 million. Within the retail sector, sales of regular rice
decreased by $0.7 million or 0.7% due primarily to the product mix which
decreased sales $4.3 million partially offset by higher volumes which increased
sales $3.6 million. Sales of value-added instant and prepared rice mix products
decreased by $2.0 million or 2.1% due primarily to competitive market conditions
in the prepared rice mix category. Sales of brown rice decreased over the prior
year by $0.2 million due to a 4.8% decrease in unit volumes. In the non-retail
sector, excluding by-products, sales decreased $4.2 million or 5.7%. Sales
increased $2.3 million or 26.1% in the foodservice sector with increased volumes
adding $2.5 million and a change in the product mix reducing sales by $0.2
million. The industrial sector recorded a 12.3% increase in unit volumes and a
$1.6 million or 11.5% increase in sales. In the lower margin export/commodity
sector, sales decreased by $8.1 million or 15.5%. Lower volumes decreased sales
$2.0 million and a combination of price and product mix decreased sales $6.1
million. Sales of rice by-products were even with the prior year with higher
prices offsetting lower volumes. The Company's energy co-generation joint
venture increased sales $0.5 million due to higher volumes and prices. Higher
natural gas prices added $0.4 million to sales and increased volumes added an
additional $0.1 million. Sales in Central America decreased $0.5 million or 0.6%
to $80.6 million compared to $81.1 million in the prior year. Higher volumes
were recorded in both fruit nectar and juice products and cookie and cracker
product lines. In total, higher volumes increased sales by $4.0 million. Higher
prices increased sales by $4.8 million and unfavorable currency translation
reduced sales by $9.3 million. In Europe, sales declined by $19.8 million or
21.1% to $73.8 million from $93.6 million last year. Lower unit volumes
decreased sales by $12.6 million as the Company continued to eliminate sales of
certain lower margin products and distributorships for two product lines were
cancelled. A combination of price and product mix reduced sales by $4.8 million
and unfavorable currency translation decreased sales by $2.4 million.

Gross profit increased by $8.7 million or 6.5% to $143.1 million from
$134.4 million a year ago and increased as a percentage of sales to 32.8% from
29.0% due to higher percentage margins in all business segments. In the domestic
rice business gross profit increased $9.8 million or 10.0% to $108.0 million
from $98.2 million in the same period last year. Gross profit increased
primarily as a result of lower rice costs. In the domestic rice business, gross
profit as a percentage of sales increased to 38.9% from 34.5%. The domestic
energy co-generation operations reported a loss at the gross profit level of
$0.1 million versus a break-even position in the prior year. The lower gross
profit resulted from reduced operating level due to major maintenance and
repairs. Gross profit in Central America improved by $0.3 million or 1.3% to
$26.4 million and increased as a percentage of sales to 32.6% from 32.0% in the
prior year. The gross profit increase was due to operating efficiencies. In
Europe gross profit decreased by $1.3 million or 12.8% to $8.8 million, but
increased as a percentage of sales to 12.0% from 10.8% last year. The decrease
in gross profit was due to lower sales volumes and the increase in gross profit
as a percentage of sales was due to the product mix.

Operating income increased $1.5 million or 4.7% to $33.9 million from $32.4
million in the same period last year. As a percentage of sales, operating income
increased to 7.8% from 7.0% in the prior period. The increase in operating
income was principally due to improved results in the domestic rice business.
Operating income in the domestic rice business increased by $3.7 million or
12.9% to $32.4 million. The increase in operating profit resulted from the $9.8
improvement in gross profit as discussed above offset by $5.7 million in
increased advertising, selling and warehousing expenses which were primarily
higher promotional spending in the value-added categories due to competitive
market conditions and higher administrative expenses of $0.4 million. In Central
America, operating income declined $0.6 million or 5.5% to $9.6 million.
Increased advertising, selling and warehousing expenses of $1.0 million offset
the increase in gross profit of $0.3 million

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<PAGE> 9

and administrative expenses were $0.1 million lower. The increase in these
expenses was related to expanded regional distribution. Operating income in
Europe declined $1.0 million or 32.8% to $2.0 million. This decline was directly
related to the decrease in gross profit.

Other income of $2.3 million decreased by $0.5 million from the prior year.
Net interest income was constant at $0.3 million. Equity in the earnings of
unconsolidated affiliates of $1.7 million was $0.5 million higher than the same
period last year due primarily to record volumes at the Company's rice flour
joint venture operation. Gain from the sale of marketable securities of $1.4
million was $0.2 million lower than the previous year. Other miscellaneous
expense increased by $0.8 million to $1.1 million. The Company received $0.8
million in the prior year from the settlement of litigation.

Income tax expense of $10.9 million reflected an increase of $0.3 million
from the same period last year and the effective rate decreased slightly to
29.9% from 30.1%. The effective tax rate is less than the U.S. statutory rate
primarily as a result of foreign earnings which are subject to tax rates that
are lower than the U.S. statutory rate and the utilization of energy tax credits
related to the Company's co-generation joint venture.

Net income for the current year increased $0.8 million or 3.5% to $25.1
million from $24.3 million in the prior fiscal year. Diluted earnings per share
were $1.73, up from $1.60 in the prior period.

Fiscal 1999 Compared to Fiscal 1998

For the fiscal year ended June 27, 1999, sales increased $8.8 million or
1.9% to $462.8 million from $454.0 million for the previous fiscal year.
Domestic sales increased by $9.1 million or 3.2% to $288.1 million while sales
from international operations decreased by $0.3 million to $174.7 million.
Increased volumes added $21.7 million to sales and the combined effect of price
and sales mix decreased sales by $3.8 million. Unfavorable currency translation
reduced sales a further $9.1 million. In the domestic rice business sales of
$284.7 million increased $8.6 million or 3.1% from the prior year sales of
$276.1 million. In the retail sector, sales increased by $4.2 million or 2.0% to
$208.1 million in fiscal 1999 from $203.9 million in the prior year primarily
due to increased volumes in regular rice products. Within the retail sector,
sales of regular rice increased by $4.6 million or 4.6% due primarily to a unit
volume increase of 6.3% that added $6.4 million to sales while the product mix
decreased sales by $1.8 million. Sales of value-added products decreased by $1.2
million or 1.3% due primarily to competitive market conditions in the prepared
rice mix category. Sales of brown rice increased over the prior year by $0.7
million due to a 5.9% increase in unit volumes. In the non-retail sector, sales
increased $4.4 million or 6.1%. Sales increased $0.7 million or 8.8% in the
foodservice sector with increased volumes adding $1.5 million and a change in
the product mix reducing sales by $0.8 million. The industrial sector recorded a
19.2% increase in unit volumes and a $2.1 million or 18.5% increase in sales. In
the lower margin export/commodity sector, sales increased by $2.2 million or
4.5%. Increased volumes added $3.6 million in sales and a combination of price
and product mix decreased sales $1.4 million. Lower selling prices for rice
by-products reduced sales by $1.1 million while higher volumes increased sales
by $0.4 million. Sales from the Company's energy co-generation joint venture
increased by $0.5 million due to higher volumes of $0.4 million and higher
prices of $0.1 million. Sales in Central America increased $4.9 million or 6.4%
to $81.2 million compared to $76.3 million in the prior year. Higher volumes
were recorded in both fruit nectar and juice products and cookie and cracker
product lines. In total, higher volumes increased sales by $7.5 million. Higher
prices increased sales by $5.9 million and unfavorable currency translation
reduced sales by $8.5 million. In Europe, sales declined by $5.2 million or 5.2%
to $93.5 million from $98.7 million last year. Lower unit volumes decreased
sales by $0.9 million as the Company continued to eliminate sales of certain
lower margin products. A combination of price and product mix reduced sales by
$3.7 million and unfavorable currency translation decreased sales by $0.6
million.

Gross profit increased by $5.3 million or 4.1% to $134.4 million from
$129.1 million a year ago and increased as a percentage of sales to 29.0% from
28.4% due to higher percentage margins in the domestic rice and European
segments of the business. In the domestic rice business gross profit increased
$4.2 million or 4.4% to $98.2 million from $94.0 million in the same period last
year. Gross profit increased primarily as a result of the increased sales
volumes and lower rice costs. In the domestic rice business, gross profit as a

8
<PAGE> 10

percentage of sales increased to 34.5% from 34.1%. The domestic energy
co-generation operations increased gross profit to $0.1 million from a
break-even position in the prior year. The improved gross profit contribution
resulted from increased sales. Gross profit in Central America improved by $1.3
million or 5.5% to $26.0 million, but declined as a percentage of sales to 32.0%
from 32.3% in the prior year. The increase in gross profit was directly related
to the sales increase and the decline as a percentage of sales was due to a
larger portion of sales being made in export markets which carry a lower margin.
In Europe gross profit decreased by $0.3 million or 3.1% to $10.1 million and
increased as a percentage of sales to 10.8% from 10.6% last year. The decrease
in gross profit was due to lower sales volumes and the increase in gross profit
as a percentage of sales was due to the product mix.

Operating income increased $1.5 million or 5.0% to $32.4 million from $30.9
million in the same period last year. As a percentage of sales, operating income
increased to 7.0% from 6.8% in the prior period. The increase in operating
income was principally due to improved results in the domestic rice business.
Operating income in the domestic rice business increased by $2.4 million or 9.1%
to $28.7 million. The increase in operating profit resulted from the $4.2
improvement in gross profit as discussed above offset by $1.7 million in higher
advertising, selling and warehousing expenses which were primarily higher
promotional spending in the prepared rice mix category due to competitive market
conditions. In Central America, operating income declined $0.3 million or 2.9%
to $10.2 million. Increased advertising, selling and warehousing expenses of
$1.3 million offset the increase in gross profit of $1.3 million and
administrative expenses were $0.3 million higher. The increase in these expenses
was related to expanded regional distribution. Operating income in Europe
declined $0.3 million or 9.6% to $3.0 million. This decline was directly related
to the decrease in gross profit.

Other income of $2.8 million increased by $0.8 million from the prior year.
Net interest income of $0.3 million for the current period declined $0.1 million
from the prior period. Equity in the earnings of unconsolidated affiliates of
$1.1 million was $0.2 million lower than the same period last year due
principally to a reduction in sales to Russia by the Company's Belgian
affiliate. Other miscellaneous income increased by $1.0 million primarily due to
the settlement of litigation.

Income tax expense of $10.6 million reflected an increase of $0.6 million
from the same period last year and the effective rate decreased slightly to
30.1% from 30.2%. This decrease in the rate reflected higher energy tax credits
related to the Company's co-generation joint venture.

Net income for the current year increased $1.7 million or 7.4% to $24.3
million from $22.6 million in the prior fiscal year. Diluted earnings per share
were $1.60, up from $1.42 in the prior period.

LIQUIDITY AND CAPITAL RESOURCES

The financial condition of the Company remained strong during fiscal 2000.
The Company requires liquidity and capital primarily to provide the working
capital and plant and equipment to support its operations and growth. The
Company's primary sources of liquidity are cash provided by operating activities
and external borrowing. A strong working capital position and continued
profitable operations are the key factors that allow the Company to satisfy most
of its capital requirements internally.

The Company's total of cash and marketable securities at July 2, 2000
exceeded total debt by $7.7 million. The ratio of debt to total capitalization
(total debt plus stockholders' equity) increased to 5.2% at the end of fiscal
2000 from 2.5% the previous year. The current ratio decreased to 1.9 in fiscal
2000 from 2.0 at the end of the prior year.

Consistent with historical results, operations provided a strong, positive
cash flow in fiscal 2000, which resulted in net cash provided by operations of
$32.1 million. This represented an increase of $1.3 million from the prior year.
Net income increased by $0.8 million or 3.5% to $25.1 million and non-cash
depreciation and amortization charges increased by $0.3 million. Equity in the
earnings of unconsolidated affiliates increased by $0.5 million. Based on the
Consolidated Statements of Cash Flows which eliminate the effect of fluctuations
in foreign currency translation rates, working capital requirements were reduced
and cash of $2.7 million was provided compared to the prior year when working
capital requirements also decreased and provided cash of

9
<PAGE> 11

$4.5 million. The largest change was in inventory. In fiscal 2000, excluding the
effect of exchange rate changes, inventory decreased by $2.4 million whereas in
the prior year inventory decreased by $1.0 million. Accounts receivable in the
current year decreased $1.5 million while in the prior year accounts receivable
increased $3.1 million. Accounts payable and accrued liabilities were about even
with the prior year compared to an increase of $6.1 million in the previous
period due primarily to the timing of transactions. For the three year period
ended July 2, 2000, net cash provided by operations has exceeded capital
expenditures and dividend requirements by $38.1 million.

Cash used in investing activities totaled $16.5 million. Purchases of
property, plant and equipment totaled $15.1 million, which was $5.6 million more
than the last year. Major projects were related to capacity expansion in the
domestic rice business. Cash inflows related to amounts due from affiliates were
$0.4 million compared to cash outflows of $0.7 million in the prior year. Also,
$4.5 million was paid for the acquisition of the assets of the Gourmet House
wild rice business.

Cash used in financing activities totaled $12.6 million for the current
year, which was $15.0 million less than the prior year. During the current
period the Company repurchased 0.5 million shares of its common stock paying
$9.4 million. In the prior year the Company repurchased 1.0 million shares at a
cost of $20.3 million. In the current period, $4.2 million was provided by net
new borrowings compared to $0.7 million used to repay net borrowings in the
previous year. Dividend payments during the current year were $7.7 million, up
$0.6 million from $7.1 million paid last year. Dividends paid per share of
common stock increased 12.8% to $0.53 in fiscal 2000.

The board of directors of the Company has authorized the open-market
repurchase, from time to time, of up to 3.0 million shares of the Company's
common stock. The repurchased stock will be used for general corporate purposes
including issuance of stock under employee stock option plans. During 2000 the
Company spent $9.4 million to repurchase 0.5 million shares at an average price
of $17.21 per share. Through the end of fiscal 2000, the Company has repurchased
a total of 1.9 million shares and 145.9 thousand shares have been reissued upon
exercise of employee stock options.

The Company has a $20.0 million domestic, short-term, unsecured revolving
credit facility with one bank. Under the terms of this facility, the Company has
the option of borrowing at the bank's prime rate or at the Eurodollar rate plus
3/8%. At July 2, 2000, the Company had $4.0 million in outstanding loans and
$1.6 million in letters of credit outstanding under this credit facility. This
facility will expire in fiscal 2001 and the Company expects to renew the
facility for another one-year period. The agreement contains limited financial
covenants and the Company is currently in compliance with all of these
covenants.

The Company's international operations are financed internally or through
borrowings in local currency without the benefit of parent Company guarantees.
The Company's foreign subsidiaries have a total of $11.4 million in short-term
credit lines from local sources and at July 2, 2000 the subsidiaries have
borrowed a total of $1.0 million.

The Company holds a portfolio of marketable securities with a market value
of $1.6 million at July 2, 2000, which is available to provide additional
liquidity.

The Company believes that the combination of its working capital, unused
and available short-term credit lines and cash flow from operations will provide
it with sufficient capital resources and liquidity to meet its foreseeable
needs.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Company had outstanding swap contracts relating to the purchase of $3.2 million
of packaging material and had established bank lines available to purchase
forward currency exchange contracts in the amount of $64.0 million of which
$11.5 million was outstanding. Gains deferred in outstanding instruments at July
2, 2000, were $0.5 million. As a matter of policy, the Company does not engage
in speculative activity and does not hedge to protect the translated results of
foreign operations or other economic exposures for which speculative accounting
treatment of the hedging instrument would be required.

OTHER MATTERS -- IMPACT OF THE YEAR 2000 ISSUE

All of the Company's computerized systems successfully made the transition
to the Year 2000 without any significant interruptions in business. Likewise,
the Company did not experience any interruption in its ability to maintain
electronic data interchange with its suppliers, customers and financial
institutions. The Company does not expect any material interruption in its
business related to Year 2000 issues in the future.

Sales volumes were not significantly impacted by customers placing abnormal
orders in anticipation of shortages due to Year 2000 computer problems.

Direct costs incurred in converting all systems to accommodate the Year
2000 issue totaled $0.8 million. Of this total, $0.2 million was capitalized and
$0.6 million was expensed as incurred. The $0.2 million capitalized was
primarily costs for the purchase of new personal computers to replace units for
which it was not economical or practical to convert to be Year 2000 compliant.

The Company deferred certain information technology projects due to the
effort required to convert existing systems to be Year 2000 compliant. The
Company has resumed its normal development and maintenance operations, but does
not believe the past deferral of certain projects has adversely effected its
operations.

FORWARD LOOKING STATEMENTS

The statements contained in this Form 10-K include forward looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Act of 1934, as amended. Although the
Company believes that the expectations reflected in such forward looking
statements are based upon reasonable assumptions, the Company can give no
assurance that these expectations will be achieved.

11
<PAGE> 13

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Financial Statements:
Consolidated Balance Sheets as of July 2, 2000, and
June 27, 1999......................................... 13
Consolidated Statements of Income for the fiscal years
ended July 2, 2000, June 27, 1999, and June 28,
1998.................................................. 14
Consolidated Statements of Capital Accounts and
Retained Earnings for the fiscal years ended July 2,
2000, June 27, 1999, and June 28, 1998................ 15
Consolidated Statements of Comprehensive Income and
Accumulated Other Comprehensive Income for the fiscal
years ended July 2, 2000, June 27, 1999, and June 28,
1998.................................................. 15
Consolidated Statements of Cash Flows for the fiscal
years ended July 2, 2000, June 27, 1999, and June 28,
1998.................................................. 16
Notes to Consolidated Financial Statements............. 17
Report of Independent Public Accountants............... 31
</TABLE>

12
<PAGE> 14

RIVIANA FOODS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
JULY 2, 2000 JUNE 27, 1999
------------ -------------
<S> <C> <C>
ASSETS

CURRENT ASSETS:
Cash................................................... $ 7,414 $ 5,605
Cash equivalents....................................... 6,114 5,729
Marketable securities.................................. 1,582 3,366
Accounts receivable, less allowance for doubtful
accounts of $1,032 and $1,386......................... 40,826 42,079
Inventories............................................ 48,923 46,570
Prepaid expenses....................................... 2,366 2,247
-------- --------
Total current assets.............................. 107,225 105,596
PROPERTY, PLANT AND EQUIPMENT:
Land................................................... 3,593 3,504
Buildings.............................................. 31,394 26,853
Machinery and equipment................................ 105,048 91,557
-------- --------
Property, plant and equipment, gross................... 140,035 121,914
Less accumulated depreciation.......................... (53,911) (44,579)
-------- --------
Property, plant and equipment, net................ 86,124 77,335
INVESTMENTS IN UNCONSOLIDATED AFFILIATES.................... 9,402 9,958
OTHER ASSETS................................................ 6,364 7,315
-------- --------
Total assets...................................... $209,115 $200,204
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Short-term debt........................................ $ 4,997 $ 970
Current maturities of long-term debt................... 903 1,003
Accounts payable....................................... 24,906 24,893
Accrued liabilities.................................... 21,110 18,870
Income taxes payable................................... 5,876 6,938
-------- --------
Total current liabilities......................... 57,792 52,674

LONG-TERM DEBT, net of current maturities................... 1,462 1,390
DUE TO AFFILIATES........................................... 802 506
DEFERRED INCOME TAXES....................................... 4,977 5,809
OTHER NONCURRENT LIABILITIES................................ 2,716 2,964
COMMITMENTS AND CONTINGENCIES...............................
MINORITY INTERESTS.......................................... 6,435 6,484
STOCKHOLDERS' EQUITY:
Preferred stock, $1 par, 5,000 shares authorized, none
issued................................................
Common stock, $1 par, 24,000 shares authorized, 15,883
issued................................................ 15,883 15,883
Paid-in capital........................................ 6,553 6,519
Retained earnings...................................... 159,620 142,424
Accumulated other comprehensive income................. (13,214) (9,606)
Treasury stock, at cost, 1,762 and 1,237 shares........ (33,911) (24,843)
-------- --------
Total stockholders' equity........................ 134,931 130,377
-------- --------
Total liabilities and stockholders' equity........ $209,115 $200,204
======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

13
<PAGE> 15

RIVIANA FOODS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------
JULY 2, 2000 JUNE 27, 1999 JUNE 28, 1998
------------ ------------- -------------
<S> <C> <C> <C>
NET SALES............................................... $435,885 $462,761 $454,012
COST OF SALES........................................... 292,780 328,395 324,919
-------- -------- --------
Gross profit....................................... 143,105 134,366 129,093
-------- -------- --------
COSTS AND EXPENSES:
Advertising, selling and warehousing............... 87,718 81,184 78,199
Administrative and general......................... 21,442 20,772 20,026
-------- -------- --------
Total costs and expenses...................... 109,160 101,956 98,225
-------- -------- --------
Income from operations........................ 33,945 32,410 30,868
OTHER INCOME (EXPENSE):
Gain on sale of marketable securities.............. 1,429 1,613 1,584
Interest income.................................... 1,409 1,388 1,061
Interest expense................................... (1,078) (1,039) (619)
Equity in earnings of unconsolidated affiliates.... 1,686 1,142 1,363
Other (expense), net............................... (1,138) (291) (1,324)
-------- -------- --------
Total other income............................ 2,308 2,813 2,065
-------- -------- --------
Income before income taxes and minority
interests................................... 36,253 35,223 32,933
INCOME TAX EXPENSE...................................... 10,855 10,592 9,956
MINORITY INTERESTS IN EARNINGS OF CONSOLIDATED
SUBSIDIARIES....................................... 297 376 387
-------- -------- --------
NET INCOME......................................... $ 25,101 $ 24,255 $ 22,590
======== ======== ========
Earnings per share:
Basic.............................................. $ 1.74 $ 1.62 $ 1.44
Diluted............................................ 1.73 1.60 1.42
Weighted average common shares outstanding:
Basic.............................................. 14,438 14,987 15,727
Diluted............................................ 14,541 15,187 15,936
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

14
<PAGE> 16

RIVIANA FOODS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CAPITAL ACCOUNTS AND RETAINED EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
---------------- PAID-IN RETAINED -----------------
SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT TOTAL
------ ------- -------- -------- ------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, June 29, 1997.............................. 15,883 $15,883 $ 6,215 $109,851 (130) $ (2,087) $129,862
Net income...................................... 22,590 22,590
Sales of common stock........................... (181) 55 861 680
Dividends declared ($0.43 per share)............ (6,757) (6,757)
Repurchases of common stock..................... (179) (3,907) (3,907)
Collection of employee discount on stock........ 120 120
Tax credit for disqualifying dispositions of
stock......................................... 120 120
------ ------- -------- -------- ------ -------- --------
BALANCE, June 28, 1998.............................. 15,883 15,883 6,455 125,503 (254) (5,133) 142,708
Net income...................................... 24,255 24,255
Sales of common stock........................... (90) 37 601 511
Dividends declared ($0.485 per share)........... (7,244) (7,244)
Repurchases of common stock..................... (1,020) (20,311) (20,311)
Collection of employee discount on stock........ 13 13
Tax credit for disqualifying dispositions of
stock......................................... 51 51
------ ------- -------- -------- ------ -------- --------
BALANCE, June 27, 1999.............................. 15,883 15,883 6,519 142,424 (1,237) (24,843) 139,983
Net income...................................... 25,101 25,101
Sales of common stock........................... (52) 20 314 262
Dividends declared ($0.545 per share)........... (7,853) (7,853)
Repurchases of common stock..................... (545) (9,382) (9,382)
Collection of employee discount on stock........ 28 28
Tax credit for disqualifying dispositions of
stock......................................... 6 6
------ ------- -------- -------- ------ -------- --------
BALANCE, July 2, 2000............................... 15,883 $15,883 $ 6,553 $159,620 (1,762) $(33,911) $148,145
====== ======= ======= ======== ====== ======== ========
</TABLE>

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
AND ACCUMULATED OTHER COMPREHENSIVE INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
UNREALIZED CUMULATIVE
GAINS ON FOREIGN ACCUMULATED
MARKETABLE CURRENCY OTHER
SECURITIES, TRANSLATION COMPREHENSIVE COMPREHENSIVE
NET OF TAXES ADJUSTMENT INCOME INCOME
------------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
BALANCE, June 29, 1997.................................... $ 2,273 $ (5,059) $ (2,786)
Net income............................................ $22,590
Marketable securities, net of taxes:
Realized (gains).................................. (1,029) (1,029) (1,029)
Unrealized gains.................................. 1,150 1,150 1,150
Effect of balance sheet translations.................. (2,299) (2,299) (2,299)
-------
COMPREHENSIVE INCOME...................................... $20,412
-------- -------- -------- =======
BALANCE, June 28, 1998.................................... 2,394 (7,358) (4,964)
Net income............................................ $24,255
Marketable securities, net of taxes:
Realized (gains).................................. (1,058) (1,058) (1,058)
Unrealized gains.................................. 529 529 529
Effect of balance sheet translations.................. (4,113) (4,113) (4,113)
-------
COMPREHENSIVE INCOME...................................... $19,613
-------- -------- -------- =======
BALANCE, June 27, 1999.................................... 1,865 (11,471) (9,606)
Net income............................................ $25,101
Marketable securities, net of taxes:
Realized (gains).................................. (1,051) (1,051) (1,051)
Unrealized (losses)............................... (12) (12) (12)
Effect of balance sheet translations.................. (2,545) (2,545) (2,545)
-------
COMPREHENSIVE INCOME...................................... $21,493
-------- -------- -------- =======
BALANCE, July 2, 2000..................................... $ 802 $(14,016) $(13,214)
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

15
<PAGE> 17

RIVIANA FOODS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------
JULY 2, 2000 JUNE 27, 1999 JUNE 28, 1998
------------ ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................................... $ 25,101 $ 24,255 $ 22,590
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................... 6,063 5,714 4,506
Deferred income taxes............................ (256) (706) 876
Gain on disposition of assets.................... (1,532) (1,564) (1,567)
Equity in earnings of unconsolidated
affiliates.................................... (1,686) (1,142) (1,363)
Change in assets and liabilities:
Accounts receivable, net...................... 1,491 (3,097) 1,750
Inventories................................... 2,403 961 (1,920)
Prepaid expenses.............................. (172) (340) 217
Other assets.................................. 1,838 (260) 1,560
Accounts payable and accrued liabilities...... (52) 6,096 4,649
Income taxes payable.......................... (958) 867 967
Other noncurrent liabilities.................. (193) (121) 341
Minority interests............................ 28 90 142
-------- -------- --------
Net cash provided by operating activities... 32,075 30,753 32,748
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment......... (15,088) (9,471) (11,498)
Proceeds from disposals of property, plant and
equipment........................................ 480 114 157
Proceeds from sale of marketable securities........ 2,133 1,762 1,727
Increase (decrease) in due to affiliates........... 352 (673) 1,208
Cash paid for business and certain assets, net of
cash received.................................... (4,519)
Other.............................................. 147 40 231
-------- -------- --------
Net cash used in investing activities....... (16,495) (8,228) (8,175)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in short-term debt............. 4,142 (138) (3,574)
Additions to long-term debt........................ 2,672 1,443 888
Repayments of long-term debt....................... (2,597) (1,973) (1,759)
Dividends paid..................................... (7,700) (7,135) (6,613)
Repurchases of common stock........................ (9,382) (20,311) (3,907)
Sales of common stock.............................. 262 511 680
Collection of employee discount on stock........... 28 13 120
-------- -------- --------
Net cash used in financing activities....... (12,575) (27,590) (14,165)
-------- -------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS........................................... (811) (798) (251)
-------- -------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ 2,194 (5,863) 10,157
CASH AND CASH EQUIVALENTS, beginning of period.......... 11,334 17,197 7,040
-------- -------- --------
CASH AND CASH EQUIVALENTS, end of period................ $ 13,528 $ 11,334 $ 17,197
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
16
<PAGE> 18

RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 2, 2000, JUNE 27, 1999 AND JUNE 28, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(1) ORGANIZATION AND NATURE OF BUSINESS:

Riviana Foods Inc. (Riviana) and subsidiaries (collectively, Company) are
primarily engaged in the processing, marketing and distributing of rice and
other food products. The Company has rice operations in the United States and in
Belgium and Germany through unconsolidated affiliates, Boost Nutrition C.V.
(Boost) and Herto N.V. (Herto), food operations in Guatemala and Costa Rica,
Alimentos Kern de Guatemala, S.A. (Kern) and Pozuelo, S.A. (Pozuelo), and a food
distribution operation in the United Kingdom, Stevens & Brotherton Ltd. (S&B).

In the United States, the Company processes, markets and distributes
branded and private-label rice products to the retail grocery trade and food
service industry, rice and rice by-products to industrial customers and branded
products to Puerto Rico and international markets. Riviana's primary domestic
brand names are Success(R), Mahatma(R), Carolina(R), River(R), Watermaid(R),
S&W(R), Gourmet House(R), Sello Rojo(R) and El Mago(R). Also, the Company is a
partner in joint ventures with another rice company in rice flour processing and
co-generation of power from the gasification of rice hulls.

In Central America, Kern produces and markets a wide range of processed
fruits and vegetables under the Kern's(R), Ducal(R), Koolfrut(R) and Fun-C(R)
brands. Pozuelo produces and markets cookies and crackers under the Riviana
Pozuelo(R) brand. Both Kern's and Pozuelo's products are sold primarily in
Central America with some products under the Ducal(R) and Riviana Pozuelo(R)
brands exported to certain United States markets.

In Europe, S&B distributes rice under the Phoenix(R) brand and private
labels as well as dried fruits, processed meats and other food products to
retail, wholesale, food service and industrial customers. Through unconsolidated
affiliates Boost and Herto, the Company processes and sells packaged rice
products under the Bosto(R) brand within Belgium, the Oryza(R) brand within
Germany, private-label packaged rice products to major retailers in the European
Union and both bulk and branded rice products to Eastern Europe and other export
markets.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Fiscal reporting periods

The Company operates on a 52/53 week fiscal year ending on the Sunday
closest to June 30. This period is utilized as it is a natural business year
closely coinciding with the rice crop year in the southern United States, rice
being the largest component of the Company's sales. The fiscal year ended July
2, 2000, was a 53-week fiscal year and the fiscal years ended June 27, 1999, and
June 28, 1998, were 52-week fiscal years.

Consolidation

The consolidated financial statements include the accounts of Riviana and
its majority-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.

Investments in unconsolidated affiliates

The Company has equity investments in certain food processing, marketing
and distribution companies, which are accounted for utilizing the equity method
of accounting. Ownership interests range from 33 to 50 percent in these
unconsolidated affiliates.

17
<PAGE> 19
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following represents summarized financial information with respect to
the assets, liabilities and results of operations of the unconsolidated
affiliates.

<TABLE>
<CAPTION>
BALANCE SHEET DATA JULY 2, 2000 JUNE 27, 1999
------------------ ------------ -------------
<S> <C> <C>
Current assets.............................................. $39,200 $32,820
Noncurrent assets........................................... 18,628 14,313
------- -------
Total assets...................................... $57,828 $47,133
======= =======
Current liabilities......................................... $32,166 $18,995
Noncurrent liabilities...................................... 5,487 6,680
Common equity:
Riviana................................................ 9,402 9,958
Other.................................................. 10,773 11,500
------- -------
Total liabilities and equity...................... $57,828 $47,133
======= =======
</TABLE>

<TABLE>
<CAPTION>
INCOME STATEMENT DATA 2000 1999 1998
--------------------- -------- ------- -------
<S> <C> <C> <C>
Net sales.............................................. $126,420 $95,579 $91,901
Gross profit........................................... 21,097 13,625 16,265
Income before income taxes............................. 4,275 3,281 3,458
Net income............................................. 3,593 2,654 2,390
Equity in earnings of unconsolidated affiliates........ 1,686 1,142 1,363
</TABLE>

Changes in accounting principles

Effective December 28, 1997, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings per Share," which revises the
manner in which earnings per share is calculated. All per share amounts included
herein have been restated accordingly. The effect of adopting this statement had
no material impact on the Company's results of operations or financial position.

Effective June 29, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income," which requires that net income, as reported, be adjusted
by changes in unrealized gains on marketable securities, net of taxes, and
cumulative foreign currency translation adjustment. See the accompanying
Consolidated Statements of Comprehensive Income and Accumulated Comprehensive
Income.

Effective January 2, 2000, the Company adopted the American Institute of
Certified Public Accountants' Statement of Position (SOP) 98-1, "Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use," and SOP
98-5, "Reporting on the Costs of Start-Up Activities." These statements had no
material impact on the Company's results of operations or financial position.

Recently issued accounting standards

SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," was issued in June 1998, amended in June 1999 by SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities -- Deferral of the
Effective Date of FASB Statement No. 133" and amended in June 2000 by SFAS No.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities." The Company will adopt these pronouncements in the first quarter of
2001 and does not expect adoption to have a material impact on the Company's
results of operations or financial position.

The Financial Accounting Standards Board's Emerging Issues Task Force
(EITF) reached consensus on Issue No. 00-14, "Accounting for Certain Sales
Incentives," in July 2000. This issue addresses the recognition, measurement and
income statement classification for various types of sales incentives including
discounts, coupons, rebates and free products. The Company will adopt this
consensus not later than the

18
<PAGE> 20
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

fourth quarter of 2001. While the impact of this consensus on the Company's
consolidated financial statements is still being evaluated, it is expected to
only impact revenue and expense classifications and not change reported net
income.

Accounting estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent gains and losses at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

For purposes of the consolidated balance sheets and the consolidated
statements of cash flows, the Company considers all investments with original
maturities of three months or less to be cash equivalents.

Accounts receivable

In the normal course of business, the Company extends credit to its
customers. The Company regularly reviews the accounts and makes adequate
provision for any potentially uncollectible balances. Management believes that
the Company has no significant concentrations of credit risk.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined
on the first-in, first-out (FIFO) method. Inventories were composed of the
following:

<TABLE>
<CAPTION>
JULY 2, 2000 JUNE 27, 1999
------------ -------------
<S> <C> <C>
Raw materials............................................... $10,364 $ 8,994
Work in process............................................. 19 29
Finished goods.............................................. 32,492 31,785
Packaging supplies.......................................... 6,048 5,762
------- -------
Total............................................. $48,923 $46,570
======= =======
</TABLE>

Property, plant and equipment

Land, buildings, machinery and equipment are stated at cost. Depreciation
is provided for financial reporting purposes on the straight-line basis over the
following estimated useful lives:

<TABLE>
<S> <C>
Buildings............................................ 30 to 40 years
Machinery and equipment.............................. 3 to 29 years
</TABLE>

Maintenance, repairs and minor replacements are charged against income as
incurred; major replacements and betterments are capitalized. The cost of assets
sold or retired and the related accumulated depreciation is removed from the
accounts at the time of disposition, and any resulting gain or loss is reflected
as other income or expense for the period.

Other noncurrent liabilities

Other noncurrent liabilities are composed primarily of certain
postretirement benefits and staff termination indemnities.

19
<PAGE> 21
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Revenue recognition

Sales are recognized when products are shipped.

Advertising

The costs of advertising, promotion and marketing programs are charged to
operations in the period incurred.

Earnings per share

Basic and diluted earnings per share are computed by dividing net income by
the respective number of weighted average common shares outstanding. The
reconciliation of weighted average common shares outstanding used in computing
basic and diluted earnings per share is as follows:

<TABLE>
<CAPTION>
2000 1999 1998
------ ------ ------
<S> <C> <C> <C>
Basic...................................................... 14,438 14,987 15,727
Effect of dilutive stock options........................... 103 200 209
------ ------ ------
Diluted.................................................... 14,541 15,187 15,936
====== ====== ======
</TABLE>

In the calculation of the effect of dilutive stock options, 475, 8, and 1
anti-dilutive stock option shares have been excluded for 2000, 1999, and 1998.

Translation of foreign currencies

The assets and liabilities of consolidated foreign subsidiaries are
translated into United States dollars at exchange rates in effect at the date of
the financial statements. Revenues and expenses are translated at the average
rates during the reporting periods. Resulting translation gains and losses are
accumulated as a separate component of accumulated other comprehensive income in
stockholders' equity. Because the Company follows the policy of not providing
taxes on unremitted foreign earnings as discussed in Note 6, such translation
gains and losses are not tax effected.

Fair value of financial instruments

The Company's financial instruments other than derivative financial
instruments consist primarily of cash, cash equivalents, trade receivables,
trade payables and debt instruments. The Company periodically reviews these
instruments for impairment of value and records a provision for any impairment
identified. The book values of these instruments are considered to be
representative of their respective fair values.

Derivative financial instruments

The Company utilizes derivative financial instruments as hedges to manage a
portion of its exposure to fluctuations in packaging material costs and exchange
rates related to inventory purchases denominated in foreign currencies. These
instruments qualify for hedge accounting treatment and, accordingly, gains and
losses on these instruments are deferred and included in the basis of the
inventory hedged. The Company utilizes packaging material swap contracts and
forward currency exchange contracts to hedge specific purchase commitments. The
contracts have varying maturities with none exceeding 24 months and are settled
at maturity, based on rates agreed to at the inception of the contracts. At July
2, 2000, the Company had outstanding swap contracts relating to the purchase of
$3,240 of packaging materials and had established bank lines available to
purchase forward exchange contracts in the amount of $64,043, of which $11,490
was outstanding. Gains and losses deferred in outstanding instruments at July 2,
2000, were $504 and $22. As a matter of policy, the Company does not engage in
speculative activity and does not hedge to protect the

20
<PAGE> 22
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

translated results of foreign operations or other economic exposures for which
speculative accounting treatment of the hedging instrument would be required.

Reclassification

Certain prior-year balances have been reclassified to conform with the
current-year presentation.

(3) MARKETABLE SECURITIES:

Investments in debt and equity securities are recorded as required by SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The
Company's marketable securities consist of high-grade equity securities that are
all considered available for sale. Available-for-sale securities, securities
that the Company purchased without any specific intent to sell in the near term,
are carried at fair value with unrealized gains and losses included directly in
stockholders' equity, net of applicable deferred income taxes. The basis upon
which costs were determined in computing realized gains was specific
identification.

<TABLE>
<CAPTION>
JULY 2, 2000 JUNE 27, 1999
------------ -------------
<S> <C> <C>
Aggregate fair value........................................ $1,603 $3,366
Cost basis.................................................. 369 496
------ ------
Unrealized net gain before taxes.......................... 1,234 2,870
Income taxes................................................ 432 1,005
------ ------
Unrealized gain, net of taxes............................. $ 802 $1,865
====== ======
Unrealized gains............................................ $1,244 $2,879
Unrealized losses........................................... (10) (9)
------ ------
Unrealized net gain before taxes.......................... $1,234 $2,870
====== ======
</TABLE>

<TABLE>
<CAPTION>
2000 1999 1998
------ ------ ------
<S> <C> <C> <C>
Proceeds from sales of marketable securities............... $2,133 $1,762 $1,727
Realized gross gains....................................... 1,618 1,628 1,584
Realized gross losses...................................... (189)
</TABLE>

(4) ACCRUED LIABILITIES:

Accrued liabilities consisted of the following:

<TABLE>
<CAPTION>
JULY 2, 2000 JUNE 27, 1999
------------ -------------
<S> <C> <C>
Payroll, commissions and bonuses............................ $10,458 $ 9,984
Coupon redemption and advertising........................... 2,580 1,875
Taxes, other than income taxes.............................. 2,049 2,222
Other....................................................... 6,023 4,789
------- -------
Total............................................. $21,110 $18,870
======= =======
</TABLE>

(5) BORROWING ARRANGEMENTS:

Interest rates related to short-term debt vary according to the country in
which the funds are borrowed, but generally approximate the market rate of
interest. The weighted average interest rates at July 2, 2000, and June 27,
1999, were 9.8% and 16.2%. A portion of the short-term debt at July 2, 2000 and
June 27, 1999, is secured by certain assets of the foreign subsidiaries. In the
United States, the Company has an unused line of credit of $14,400, net of
borrowings of $4,000 at an interest rate of 7.1% and $1,600 in letters of
credit. The

21
<PAGE> 23
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company is subject to limited financial covenants and is in compliance with all
of these covenants. Internationally, the Company has unused lines of credit
totaling about $10,450, net of borrowings of $997 at a weighted average interest
rate of 20.7%.

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
JULY 2, 2000 JUNE 27, 1999
------------ -------------
<S> <C> <C>
Total long-term debt........................................ $2,365 $2,393
Less current maturities..................................... 903 1,003
------ ------
Long-term debt, net of current maturities................. $1,462 $1,390
====== ======
</TABLE>

Total long-term debt at July 2, 2000, matures as follows:

<TABLE>
<S> <C>
2001....................................................... $ 903
2002....................................................... 320
2003....................................................... 318
2004....................................................... 206
2005....................................................... 206
Thereafter................................................. 412
------
Total............................................ $2,365
======
</TABLE>

Total interest paid was $1,028, $1,036 and $930 for 2000, 1999 and 1998.

(6) INCOME TAXES:

The provision for income taxes consisted of the following:

<TABLE>
<CAPTION>
2000 1999 1998
------- ------- ------
<S> <C> <C> <C>
Federal.................................................. $ 7,877 $ 7,365 $5,351
State.................................................... 651 575 517
Foreign.................................................. 3,159 3,648 3,167
------- ------- ------
Total current provision........................ 11,687 11,588 9,035
------- ------- ------
Federal.................................................. (837) (998) 953
Foreign.................................................. 5 2 (32)
------- ------- ------
Total deferred provision (benefit)............. (832) (996) 921
------- ------- ------
Income tax expense....................................... $10,855 $10,592 $9,956
======= ======= ======
Total income taxes paid.................................. $12,749 $10,999 $8,444
======= ======= ======
</TABLE>

22
<PAGE> 24
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The difference between the statutory United States federal income tax rate
and the Company's global effective tax rate as reflected in the consolidated
statements of income was as follows:

<TABLE>
<CAPTION>
2000 1999 1998
------------------- ------------------- -------------------
PERCENT PERCENT PERCENT
TAX OF TAX OF TAX OF
EXPENSE PRETAX EXPENSE PRETAX EXPENSE PRETAX
(BENEFIT) INCOME (BENEFIT) INCOME (BENEFIT) INCOME
--------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Taxes at U.S. federal statutory
rate........................... $12,689 35.0% $12,328 35.0% $11,527 35.0%
Resolution of issues at less than
estimate previously provided... (795) (2.2) (753) (2.3)
Foreign earnings subject to tax
rates that are different than
the U.S. federal statutory
rate........................... (1,681) (4.6) (1,602) (4.5) (1,122) (3.4)
State taxes, net of federal
benefit........................ 423 1.1 374 1.1 336 1.0
Taxes on dividends received from
foreign subsidiaries........... 741 2.0 516 1.4 210 0.6
Other............................ (522) (1.4) (1,024) (2.9) (242) (0.7)
------- ---- ------- ---- ------- ----
Income tax expense/effective
rate........................... $10,855 29.9% $10,592 30.1% $ 9,956 30.2%
======= ==== ======= ==== ======= ====
</TABLE>

The components of deferred taxes were as follows:

<TABLE>
<CAPTION>
JULY 2, 2000 JUNE 27, 1999
------------ -------------
<S> <C> <C>
Staff termination indemnities............................... $ 29 $ 37
Accrued employee benefits................................... 2,034 1,618
State taxes................................................. 330 554
Accrued liabilities......................................... 1,565 1,318
Allowance for doubtful accounts............................. 276 241
Other....................................................... 2 2
------ ------
Total deferred tax assets............................ 4,236 3,770
------ ------
Property, plant and equipment and other..................... 8,466 7,857
Inventories................................................. 321 717
Marketable securities....................................... 426 1,005
------ ------
Total deferred tax liabilities....................... 9,213 9,579
------ ------
Net deferred tax liabilities...................... $4,977 $5,809
====== ======
</TABLE>

Income before income taxes and minority interests of foreign subsidiaries
was $12,525, $14,093 and $14,030 for 2000, 1999 and 1998.

The Company does not provide deferred income taxes on unremitted earnings
of foreign subsidiaries, since such earnings are considered to be permanently
invested. Cumulative unremitted earnings of foreign subsidiaries were $45,460,
$41,216 and $36,323 as of July 2, 2000, June 27, 1999 and June 28, 1998.

(7) PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS:

Riviana has defined benefit plans covering substantially all United States
and certain international employees. The benefits are based on years of service
and the employee's compensation. The Company's funding policy is to contribute
annually at least the minimum amounts actuarially necessary to provide for
retirement benefits.

23
<PAGE> 25
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following sets forth summarized information regarding the Company's
defined benefit retirement plans:

<TABLE>
<CAPTION>
UNITED STATES INTERNATIONAL
----------------- ---------------
2000 1999 2000 1999
------- ------- ------ ------
<S> <C> <C> <C> <C>
Change in projected benefit obligations:
Benefit obligations at the beginning of year........... $22,919 $21,317 $8,389 $5,947
Service cost........................................... 2,291 2,303 491 381
Interest cost.......................................... 1,573 1,364 505 412
Actuarial (gain) loss.................................. (637) (506) 13 2,013
Foreign exchange impact................................ (404) (364)
Plan disbursements..................................... (1,700) (1,559) (239)
------- ------- ------ ------
Benefit obligations at the end of year................. $24,446 $22,919 $8,755 $8,389
======= ======= ====== ======
Change in plan assets:
Fair value of plan assets at beginning of year......... $24,218 $21,288 $6,868 $5,900
Actual return on plan assets........................... 2,469 4,489 572 680
Company contributions.................................. 578 596
Foreign exchange impact................................ (344) (308)
Plan disbursements..................................... (1,700) (1,559) (239)
------- ------- ------ ------
Fair value of plan assets at end of year............... $24,987 $24,218 $7,435 $6,868
======= ======= ====== ======
Funded status:
Funded status at end of year........................... $ 541 $ 1,299 $1,320 $1,522
Unrecognized net gain from experience different from
that assumed........................................ (4,532) (3,767) (1,620) (1,782)
Unrecognized prior service costs....................... 783 657
------- ------- ------ ------
Net liability recognized............................... $(3,208) $(1,811) $ (300) $ (260)
======= ======= ====== ======
Amounts recognized in balance sheet:
Accrued liabilities.................................... $(3,208) $(1,811) $ (300) $ (260)
======= ======= ====== ======
Weighted average assumptions:
Discount rate.......................................... 7.5% 7.25% 6.0% 6.0%
Long-term rate of compensation increase................ 4.5 4.5 4.0 4.0
Long-term rate of return on plan assets................ 9.0 9.0 8.0 8.0
</TABLE>

Components of net periodic pension costs:

<TABLE>
<CAPTION>
UNITED STATES INTERNATIONAL
--------------------------- ---------------------
2000 1999 1998 2000 1999 1998
------- ------- ------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Service cost............................ $ 2,291 $ 2,303 $ 2,079 $ 491 $ 381 $ 364
Interest cost........................... 1,573 1,364 1,156 505 412 389
Expected return on plan assets.......... (2,071) (1,877) (1,537) (552) (466) (436)
Amortization of transition/prior service
costs................................. (127) (127) (127)
Amortization of actuarial (gain) loss... (269) (88) (22) 80
------- ------- ------- ----- ----- -----
Net periodic pension costs.............. $ 1,397 $ 1,575 $ 1,549 $ 524 $ 327 $ 317
======= ======= ======= ===== ===== =====
</TABLE>

Riviana provides death and additional retirement benefits to certain key
employees. These plans are funded through Company-owned life insurance. The net
cash surrender value of the insurance policies is

24
<PAGE> 26
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

recorded as a noncurrent asset in the accompanying consolidated balance sheets.
The actuarially computed present value of the retirement benefits is recorded as
an other noncurrent liability in the accompanying consolidated balance sheets.
As of July 2, 2000, and June 27, 1999, the Company had recorded net cash
surrender value of $2,547 and $2,267 and present value of retirement benefits of
$2,086 and $1,895. The Company recorded expense of $109, $155 and $187 related
to these plans for 2000, 1999 and 1998.

Riviana has a defined contribution plan which covers substantially all
United States employees. The Company contributes an amount equal to a percentage
of employee contributions. Total expense related to this plan was $624, $603 and
$548 during 2000, 1999 and 1998.

(8) RELATED PARTY TRANSACTIONS:

The Company paid $800, $974 and $935 for 2000, 1999 and 1998, to W. Elton
Kennedy, a director of the Company, or entities controlled by him for rice
purchases at market prices. Also, the Company and Kennedy Rice Dryers, Inc., a
corporation of which Mr. Kennedy is the principal stockholder and a director and
officer, each owns a 50% interest in South LaFourche Farm Partnership. The
Company and Mr. Kennedy are each contingently liable on a $2,030 promissory note
payable by the Partnership. The Company has also executed transactions with
other companies owned by certain directors which were not material to the
Company's results of operations or financial position. Management of the Company
believes that the foregoing transactions were on terms no less favorable to the
Company than could normally be obtained from unaffiliated parties.

(9) COMMITMENTS AND CONTINGENCIES:

Lease commitments

At July 2, 2000, future minimum lease payments and sublease rentals under
long-term operating lease obligations amounted to:

<TABLE>
<CAPTION>
GROSS SUBLEASE
LEASE RENTAL NET LEASE
PAYMENTS INCOME PAYMENTS
-------- -------- ---------
<S> <C> <C> <C>
2001.................................................... $ 3,058 $179 $ 2,879
2002.................................................... 2,695 180 2,515
2003.................................................... 1,746 181 1,565
2004.................................................... 1,372 121 1,251
2005.................................................... 1,063 38 1,025
Thereafter.............................................. 1,134 37 1,097
------- ---- -------
Total......................................... $11,068 $736 $10,332
======= ==== =======
</TABLE>

Rent expense net of rental income was $3,503, $3,410 and $3,311 for 2000,
1999 and 1998.

Litigation

Various actions and claims, which arose in the ordinary course of business,
are pending against the Company. In the opinion of management, the ultimate
liability, if any, which may result from these actions and claims will not
materially affect the financial position or future results of operations of the
Company.

Buy-Sell agreement

As of July 2, 2000, the Company had a $6,202 investment in Boost which
represents a 49% ownership interest. The Boost stockholder agreement provides,
effective in 1997, that either stockholder has the right to purchase the other's
interest. The initial bid price offered by one stockholder to the other, if not
accepted,

25
<PAGE> 27
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

would require the rejecting stockholder to counteroffer the initial bid price
plus five percent. Each rejection thereafter would also require a five percent
premium over the prior offer until one stockholder accepts.

(10) CAPITAL STOCK:

Common stock

At July 2, 2000, the Company had outstanding 1,936 shares of common stock
sold before the Company's 1995 initial public offering to directors, officers
and key employees of the Company or Boost at a discount of $2,010. The amount of
discount was determined by the Board of Directors and represents a percentage
reduction of about 50% from the formula based estimate of fair value at the time
of sale. A majority of the shares discounted were sold as an inducement for
predecessor management to continue employment and to participate in the initial
capitalization of the Company in 1986. The discount is recorded in the
accompanying consolidated financial statements as a reduction of stockholders'
equity. Under a contractual agreement with the stockholders, the discount must
be repaid when the shares are sold.

The Company's common stock trades on The Nasdaq Stock Market (trading
symbol RVFD).

Preferred stock

At July 2, 2000, 5,000 shares of $1.00 per share par value preferred stock
are authorized. No shares of preferred stock have been issued.

(11) STOCK OPTION PLANS:

On December 28, 1994, and October 22, 1997, the Company's stockholders
adopted incentive stock option plans (1994 Plan and 1997 Plan). On October 11,
1995, the Company's stockholders adopted a non-employee directors stock option
plan (1995 NEDSOP) which was retroactively effective May 17, 1995. Collectively,
these are the "Plans".

Under the 1994 Plan and 1997 Plan, a total of 795 and 1,000 shares of
common stock have been reserved for issuance pursuant to options that may be
granted by a committee of the Board of Directors to eligible employees of the
Company or Boost, including officers. Options granted allow the holders of the
options to purchase shares of common stock at the fair market value on the date
of the grant for a period of ten years. No options will become exercisable
sooner than one year after the date of the grant.

The 1995 NEDSOP, as amended, permits the issuance of options to purchase up
to 250 shares of common stock to directors who are not employees of the Company
and who beneficially own less than 2% of the outstanding common stock of the
Company. Such directors receive options to purchase 2 shares annually on May 17.
Options granted allow holders of the options to purchase shares of common stock
at the fair market value on the date of the grant for a period of ten years. No
options will become exercisable sooner than one year after the date of the
grant.

26
<PAGE> 28
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Plans' activity is summarized below:

<TABLE>
<CAPTION>
2000 1999 1998
------------------------- ------------------------- -------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE SHARES EXERCISE PRICE
------ ---------------- ------ ---------------- ------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Options outstanding,
beginning of year........ 929 $16.65 721 $15.00 558 $13.74
Granted.................... 265 20.38 260 20.92 246 17.42
Exercised.................. (19) 13.29 (37) 13.91 (54) 12.53
Canceled................... (79) 19.06 (15) 17.85 (29) 15.92
----- --- ---
End of year:
Options outstanding...... 1,096 17.44 929 16.65 721 15.00
===== === ===
Options exercisable...... 416 14.22 314 13.82 192 13.04
===== === ===
Options outstanding price
range.................. $12.00-$22.41 $12.00-$22.41 $12.00-$22.41
</TABLE>

All options outstanding at July 2, 2000, have a weighted average remaining
contractual life of 7.1 years.

The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for options granted under
the Plans. Accordingly, no expense has been recognized for stock option grants.
Had expense been determined based on the Black-Scholes option pricing model
value at the grant date for awards in 2000, 1999 and 1998 consistent with the
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," the
Company's net income and earnings per share would have been as follows:

<TABLE>
<CAPTION>
2000 1999 1998
------- ------- -------
<S> <C> <C> <C>
Net income:
As reported........................................... $25,101 $24,255 $22,590
Pro forma............................................. 24,055 23,272 21,931
Earnings per share -- basic:
As reported........................................... $ 1.74 $ 1.62 $ 1.44
Pro forma............................................. 1.67 1.55 1.39
Earnings per share -- diluted:
As reported........................................... $ 1.73 $ 1.60 $ 1.42
Pro forma............................................. 1.66 1.54 1.38
</TABLE>

The SFAS No. 123 method of accounting has not been applied to options
granted prior to July 3, 1995, and the resulting pro forma compensation expense
may not be indicative of pro forma expense in future years.

The Black-Scholes option pricing model was used to value the grants issued
in 2000, 1999 and 1998. The weighted average value and the assumptions used were
as follows:

<TABLE>
<CAPTION>
2000 1999 1998
----- ----- -----
<S> <C> <C> <C>
Weighted average value per share............................ $8.02 $8.37 $7.32
Option term until exercised (years)......................... 7 7 7
Risk-free interest rate..................................... 6.2% 5.4% 6.3%
Expected dividend yield..................................... 3.0% 2.3% 2.4%
Volatility.................................................. 0.38 0.36 0.37
</TABLE>

27
<PAGE> 29
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(12) SEGMENT INFORMATION:

Industry segments

The Company operates in one dominant industry segment which involves the
processing, marketing and distribution of food products.

Geographic segments

The Company classifies its business into three reportable segments:
Domestic (includes the United States and Puerto Rico), Europe (includes the
United Kingdom and Belgium) and Central America (includes Guatemala and Costa
Rica). The Company's operations have been aggregated into these reportable
segments based on similar economic characteristics and operations which are
similar in nature as to products and production processes, types of customers
and distribution methods.

The Company's export sales, other than those intercompany sales reported
below as sales between geographic areas, are not significant. Sales between
geographic areas consist of sales of raw materials and finished food products
which are sold at adjusted market prices. The Company does not derive more than
10% of its revenue from any single customer. Corporate assets consist primarily
of cash, cash equivalents, marketable securities, investments in unconsolidated
affiliates and other assets.

The Company's geographic area data are as follows:

<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Sales to unaffiliated customers:
Domestic........................................... $281,438 $288,073 $279,054
Europe............................................. 73,825 93,542 98,690
Central America.................................... 80,622 81,146 76,268
-------- -------- --------
Total consolidated......................... $435,885 $462,761 $454,012
======== ======== ========
Sales between geographic areas:
Domestic........................................... $ 310 $ 850 $ 872
Central America.................................... 17,532 14,737 11,253
Eliminations....................................... (17,842) (15,587) (12,125)
-------- -------- --------
Total consolidated......................... $ 0 $ 0 $ 0
======== ======== ========
Income:
Operating income:
Domestic........................................ $ 32,299 $ 28,735 $ 26,254
Europe.......................................... 2,016 3,002 3,319
Central America................................. 9,633 10,192 10,493
-------- -------- --------
Total operating income..................... 43,948 41,929 40,066
General corporate expenses...................... (10,003) (9,519) (9,198)
-------- -------- --------
Income from operations.......................... 33,945 32,410 30,868
Interest expense................................... (1,078) (1,039) (619)
Equity in earnings of unconsolidated affiliates.... 1,686 1,142 1,363
Other income, net.................................. 1,700 2,710 1,321
-------- -------- --------
Income before income taxes and minority
interests..................................... $ 36,253 $ 35,223 $ 32,933
======== ======== ========
</TABLE>

28
<PAGE> 30
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Identifiable assets at end of year:
Domestic........................................... $129,548 $117,460 $116,393
Europe............................................. 26,350 30,336 31,461
Central America.................................... 43,002 41,244 37,813
-------- -------- --------
Total identifiable assets.................. 198,900 189,040 185,667
Corporate assets................................... 10,215 11,164 19,661
-------- -------- --------
Total assets............................... $209,115 $200,204 $205,328
======== ======== ========
Long lived assets:
Domestic........................................... $ 79,356 $ 71,423 $ 67,726
Europe............................................. 8,494 9,207 8,962
Central America.................................... 14,040 13,978 15,027
-------- -------- --------
Total consolidated......................... $101,890 $ 94,608 $ 91,715
======== ======== ========
Depreciation and amortization:
Domestic........................................... $ 4,057 $ 3,724 $ 2,763
Europe............................................. 202 178 134
Central America.................................... 1,500 1,437 1,171
Corporate.......................................... 304 375 438
-------- -------- --------
Total consolidated......................... $ 6,063 $ 5,714 $ 4,506
======== ======== ========
Capital expenditures:
Domestic........................................... $ 12,058 $ 6,489 $ 5,983
Europe............................................. 162 631 128
Central America.................................... 2,478 2,182 5,061
Corporate.......................................... 390 169 326
-------- -------- --------
Total consolidated......................... $ 15,088 $ 9,471 $ 11,498
======== ======== ========
Investment in unconsolidated affiliates:
Corporate.......................................... $ 2,110 $ 2,075 $ 2,173
Europe............................................. 7,292 7,883 7,957
-------- -------- --------
Total consolidated......................... $ 9,402 $ 9,958 $ 10,130
======== ======== ========
</TABLE>

29
<PAGE> 31
RIVIANA FOODS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(13) UNAUDITED QUARTERLY FINANCIAL DATA:

<TABLE>
<CAPTION>
QUARTERS ENDED
------------------------------------------
SEPTEMBER DECEMBER MARCH JUNE YEAR
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
2000
Net sales............................... $105,607 $120,015 $108,245 $102,018 $435,885
Gross profit............................ 30,608 39,842 37,798 34,857 143,105
Income before income taxes and minority
interests............................. 6,711 10,886 9,590 9,066 36,253
Net income.............................. 4,644 7,587 6,624 6,246 25,101
Per share:
Earnings:
Basic............................ 0.32 0.52 0.46 0.44 1.74
Diluted.......................... 0.31 0.52 0.46 0.44 1.73
Cash dividends paid................... 0.125 0.125 0.14 0.14 0.53
Market price:
High............................. 21.000 19.625 18.500 17.500 21.000
Low.............................. 18.500 17.000 15.688 15.000 15.000
</TABLE>

<TABLE>
<CAPTION>
QUARTERS ENDED
------------------------------------------
SEPTEMBER DECEMBER MARCH JUNE YEAR
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1999
Net sales............................... $107,322 $122,484 $118,487 $114,468 $462,761
Gross profit............................ 27,889 37,813 34,885 33,779 134,366
Income before income taxes and minority
interests............................. 6,460 10,161 9,054 9,548 35,223
Net income.............................. 4,401 7,029 6,318 6,507 24,255
Per share:
Earnings:
Basic............................ 0.28 0.47 0.43 0.44 1.62
Diluted.......................... 0.28 0.47 0.42 0.44 1.60
Cash dividends paid................... 0.11 0.11 0.125 0.125 0.47
Market price:
High............................. 23.625 25.750 24.750 23.875 25.750
Low.............................. 19.375 18.750 17.625 18.000 17.625
</TABLE>

Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share may not equal
the annual earnings per share.

30
<PAGE> 32

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Riviana Foods Inc.:

We have audited the accompanying consolidated balance sheets of Riviana Foods
Inc. (a Delaware corporation) and subsidiaries as of July 2, 2000 and June 27,
1999, and the related consolidated statements of income, capital accounts and
retained earnings, comprehensive income and accumulated other comprehensive
income, and cash flows for each of the three fiscal years in the period ended
July 2, 2000. These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Riviana Foods Inc.
and subsidiaries as of July 2, 2000 and June 27, 1999, and the results of their
operations and their cash flows for each of the three fiscal years in the period
ended July 2, 2000, in conformity with accounting principles generally accepted
in the United States.

ARTHUR ANDERSEN LLP

Houston, Texas
August 15, 2000

31
<PAGE> 33

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

There is nothing to be reported under this item.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Information relating to the Directors of the Company is set forth under the
captions "General" and "The Company recommends voting "FOR" the nominees," in
the Proxy Statement and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

Information relating to executive compensation is set forth under the
captions "Compensation Tables" and "Retirement Plan" in the Proxy Statement and
is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Information relating to the ownership of equity securities of the Company
by certain beneficial owners and management is set forth under the caption
"Common Stock Outstanding and Principal Holders Thereof" in the Proxy Statement
and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information relating to certain relationships with a beneficial stockholder
and certain related transactions is set forth under the captions "Compensation
and Stock Option Committee Interlocks and Insider Participation" and "Certain
Transactions" in the Proxy Statement and is incorporated herein by reference.

32
<PAGE> 34
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) (1) Consolidated Financial Statements: - See Index to
Consolidated Financial Statements in Part II, Item 8, Financial Statements and
Supplementary Data.

(2) Consolidated Financial Statement Schedules - None.

(3) Exhibits - required to be filed by Item 601 of Regulation S-K are
listed below and are filed as a part hereof. Documents not designated as being
incorporated herein by reference are filed herewith. The paragraph numbers
correspond to the exhibit numbers designated in Item 601 of Regulation S-K.

3(i) The Company's Restated Certificate of Incorporation dated
December 28, 1994, is incorporated herein by reference to
Exhibit 3.01 to the Company's Registration Statement on
Form S-1, No. 33-87838 under the Securities Act of 1933,
as amended (the "Registration Statement")

3(ii) The Company's By-laws, as amended effective May 17, 1995,
is incorporated herein by reference to Exhibit 3(ii) to
the Company's Annual Report on Form 10-K for the fiscal
year ended July 2, 1995

*10(i) Consulting Agreement between Riviana Foods Inc. and Frank
A. Godchaux III dated January 1, 1996, is incorporated
herein by reference to Exhibit 10.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended June
30, 1996

*10(ii) Consulting Agreement between Riviana Foods Inc. and
Charles R. Godchaux dated July 1, 1994, is incorporated
herein by reference to Exhibit 10.02 to the Registration
Statement

*10(iii) Benefit Restoration Plan is incorporated herein by
reference to Exhibit 10.03 to the Registration Statement

*10(iv) Management Security Agreement between the Registrant and
Joseph A. Hafner, Jr. dated July 17, 1989, is incorporated
herein by reference to Exhibit 10.04 to the Registration
Statement

10(v) Shareholders Agreement between Sun-Land Products of
California and Stevens & Brotherton Ltd. dated March 24,
1994, is incorporated herein by reference to Exhibit 10.05
to the Registration Statement

10(vi) Shareholder Agreement among N&C Boost N.V., Arrocerias
Herba, S.A. and Ricegrowers' Co-Operative Limited dated
January 29, 1992, is incorporated herein by reference to
Exhibit 10.06 to the Registration Statement

10(vii) Stock Purchase Agreement by and among N&C Boost N.V.,
Riceherba International Inc. and Ricegrowers' Co-Operative
Limited dated as of January 29, 1992, is incorporated
herein by reference to Exhibit 10.07 to the Registration
Statement

10(viii) Shareholder Agreement among N&C Boost N.V., Arrocerias
Herba, S.A. and Herto B.V.B.A. dated January 1, 1991, as
amended, is incorporated herein by reference to Exhibit
10.08 to the Registration Statement

10(ix) Agreement of Partnership between Riviana Foods Inc. and
Kennedy Rice Dryers, Inc. dated February 12, 1990, is
incorporated herein by reference to Exhibit 10.09 to the
Registration Statement

10(x) Partnership Agreement between Riviana Foods Inc. and
Riceland Foods Inc. dated March 22, 1989, is incorporated
herein by reference to Exhibit 10.10 to the Registration
Statement

*10(xi) 1994 Stock Option Plan is incorporated herein by reference
to Exhibit 10.11 to the Registration Statement

<PAGE> 35
*10(xii) Amendment and Restatement of Executive Officer's Stock
Purchase Agreement between Riviana Foods Inc. and W. David
Hanks dated December 15, 1994, is incorporated herein by
reference to Exhibit 10.12 to the Registration Statement

*10(xiii) Amendment and Restatement of Executive Officer's Stock
Purchase Agreement between Riviana Foods Inc. and Jack M.
Nolingberg dated December 15, 1994, is incorporated herein
by reference to Exhibit 10.13 to the Registration
Statement

*10(xiv) Amendment and Restatement of Executive Officer's Stock
Purchase Agreement between Riviana Foods Inc. and Robert
D. Watts dated December 15, 1994, as amended, is
incorporated herein by reference to Exhibit 10.14 to the
Registration Statement

*10(xv) Director's Stock Purchase Agreement between Riviana Foods
Inc. and W. Elton Kennedy dated March 27, 1986, is
incorporated herein by reference to Exhibit 10.15 to the
Registration Statement

*10(xvi) Amended and Restated 1995 Non-Employee Director Stock
Option Plan dated May 17, 1996, is incorporated herein by
reference to Exhibit 10(xvi) to the Company's Annual
Report on Form 10-K for the fiscal year ended June 30,
1996

*10(xvii) Amendment of Amendment and Restatement of Executive
Officer's Stock Purchase Agreement dated December 15,
1994, between Riviana Foods Inc. and W. David Hanks dated
November 8, 1996

*10(xviii) Amendment of Amendment and Restatement of Executive
Officer's Stock Purchase Agreement dated December 15,
1994, between Riviana Foods Inc. and Jack M. Nolingberg
dated November 8, 1996

*10(xviv) Amended and Restated 1997 Stock Option Plan dated
September 1, 1997, is incorporated herein by reference to
Exhibit 10(xviv) to the Company's Annual Report on Form
10-K for the fiscal year ended June 28, 1998

21. A list of the subsidiaries of the Registrant is
incorporated herein by reference to Exhibit 21.01 to the
Registration Statement

23. The following Exhibit is filed by incorporation by
reference to Item 14(a)(2) of this Report:

(a) Consent of Arthur Andersen LLP

24. Powers of Attorney of the Company's directors

27. Financial Data Schedule

(b) None

----------

* A management contract, compensatory plan or arrangement

<PAGE> 36

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on September 15, 2000.

RIVIANA FOODS INC.
(Registrant)

By /s/ Joseph A. Hafner, Jr.
-------------------------------------------
JOSEPH A. HAFNER, JR.
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated, on September 15, 2000.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY

<S> <C>
/s/ Joseph A. Hafner, Jr. Chief Executive Officer, President and Director
------------------------------------------------------- (Principal Executive Officer)
JOSEPH A. HAFNER, JR.

/s/ W. David Hanks Executive Vice President and Director
-------------------------------------------------------
W. DAVID HANKS

/s/ E. Wayne Ray, Jr. Vice President, Chief Financial Officer, Treasurer and
------------------------------------------------------- Director (Principal Financial and Accounting Officer)
E. WAYNE RAY, JR.

*Frank A. Godchaux III Chairman of the Board

*Charles R. Godchaux Vice Chairman of the Board

*Katherine G. Derby Director

*W. Elton Kennedy Director

*E. James Lowrey Director

*Theresa G. Payne Director

*Patrick W. Rose Director

*Thomas B. Walker, Jr. Director

*By /s/ Elizabeth B. Woodard
----------------------------------------------------
ELIZABETH B. WOODARD
(As Attorney-in-Fact for each of the persons indicated)
</TABLE>

<PAGE> 37

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------

<S> <C>
3(i) The Company's Restated Certificate of Incorporation dated
December 28, 1994, is incorporated herein by reference to
Exhibit 3.01 to the Company's Registration Statement on
Form S-1, NO. 33-87838 under the Securities Act of 1933,
as amended (the "Registration Statement")

3(ii) The Company's By-laws, as amended effective May 17, 1995,
is incorporated herein by reference to Exhibit 3(ii) to
the Company's Annual Report on Form 10-K for the fiscal
year ended July 2, 1995

*10(ii) Consulting Agreement between Riviana Foods Inc. and
Charles R. Godchaux dated July 1, 1994, is incorporated
herein by reference to Exhibit 10.02 to the Registration
Statement

*10(iii) Benefit Restoration Plan is incorporated herein by
reference to Exhibit 10.03 to the Registration Statement

*10(iv) Management Security Agreement between the Registrant and
Joseph A. Hafner, Jr. dated July 17, 1989, is incorporated
herein by reference to Exhibit 10.04 to the Registration
Statement

10(ix) Agreement of Partnership between Riviana Foods Inc. and
Kennedy Rice Dryers, Inc. dated February 12, 1990, is
incorporated herein by reference to Exhibit 10.09 to the
Registration Statement

10(x) Partnership Agreement between Riviana Foods Inc. and
Riceland Foods Inc. dated March 22, 1989, is incorporated
herein by reference to Exhibit 10.10 to the Registration
Statement

*10(xi) 1994 Stock Option Plan is incorporated herein by reference
to Exhibit 10.11 to the Registration Statement
</TABLE>

<PAGE> 38
<TABLE>
<S> <C>
*10(xii) Amendment and Restatement of Executive Officer's Stock
Purchase Agreement between Riviana Foods Inc. and W. David
Hanks dated December 15, 1994, is incorporated herein by
reference to Exhibit 10.12 to the Registration Statement

*10(xv) Director's Stock Purchase Agreement between Riviana Foods
Inc. and W. Elton Kennedy dated March 27, 1986, is
incorporated herein by reference to Exhibit 10.15 to the
Registration Statement

*10(xvii) Amendment of Amendment and Restatement of Executive
Officer's Stock Purchase Agreement dated December 15,
1994, between Riviana Foods Inc. and W. David Hanks dated
November 8, 1996

*10(xviii) Amendment of Amendment and Restatement of Executive
Officer's Stock Purchase Agreement dated December 15,
1994, between Riviana Foods Inc. and Jack M. Nolingberg
dated November 8, 1996

21. A list of the subsidiaries of the Registrant is
incorporated herein by reference to Exhibit 21.01 to the
Registration Statement

23. The following Exhibit is filed by incorporation by
reference to Item 14(a)(2) of this Report:

(a) Consent of Arthur Andersen LLP

24. Powers of Attorney of the Company's directors

27. Financial Data Schedule

</TABLE>

----------

* A management contract, compensatory plan or arrangement