-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J4sFrShknvBNNWrufIO5r6KVQ8IUhdt88EhYugIfK+8juUTvH6LhIS+t1njVvQjd AWVtJXtwllWKn+eQT4y5Fg== 0000950131-97-000683.txt : 19970221 0000950131-97-000683.hdr.sgml : 19970221 ACCESSION NUMBER: 0000950131-97-000683 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970210 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIVAL CO CENTRAL INDEX KEY: 0000860194 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC HOUSEWARES & FANS [3634] IRS NUMBER: 133327021 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20274 FILM NUMBER: 97521593 BUSINESS ADDRESS: STREET 1: 800 E 101ST TERRACE CITY: KANSAS CITY STATE: MO ZIP: 64131 BUSINESS PHONE: 8169434100 MAIL ADDRESS: STREET 1: 800 E 101ST TERRACE CITY: KANSAS CITY STATE: MO ZIP: 64131 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1996. OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to _______________________ Commission file number 0-20274 THE RIVAL COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 43-0794462 - ---------------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 800 E. 101st Terrace, Kansas City, MO 64131 - ---------------------------------------- ------------------------------- (Address of principal executive offices) (Zip Code) (816) 943-4100 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (l) Yes X No ----- ----- (2) Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. As of December 31, 1996, the registrant had 9,737,757 shares of common stock, par value $.01 per share, outstanding. THE RIVAL COMPANY FORM 10-Q QUARTER ENDED DECEMBER 31, 1996 INDEX PART I. - FINANCIAL INFORMATION Page ITEM 1. Financial Statements (1) Condensed Consolidated Financial Statements (unaudited): Condensed Consolidated Balance Sheets as of December 31, 1996, December 31, 1995 and June 30, 1996. 3 Condensed Consolidated Statements of Earnings for the three months and six months ended December 31, 1996 and 1995. 4 Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 1996 and 1995. 5 (2) Notes to Condensed Consolidated Financial Statements. 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 PART II. - OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders 8 ITEM 6. Exhibits and Reports on Form 8-K 9 2 PART I - FINANCIAL INFORMATION THE RIVAL COMPANY AND SUBSIDIARIES ----------------------- CONDENSED CONSOLIDATED BALANCE SHEETS December 31, 1996 and 1995 and June 30, 1996 (amounts in thousands) (unaudited)
12/31/96 12/31/95 6/30/96 -------- -------- ------- ASSETS Currents assets: Cash $ 1,332 $ 461 $ 1,503 Accounts receivable 98,439 86,612 74,103 Inventories 106,601 74,092 102,030 Deferred income taxes 1,602 860 1,602 Prepaid expenses 2,231 621 2,142 -------- -------- ------- Total current assets 210,205 162,646 181,380 Property, plant and equipment, net 41,757 27,096 40,345 Goodwill 59,029 47,374 60,086 Other assets 5,731 2,784 6,440 -------- -------- ------- $316,722 $239,900 $288,251 ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks $ 65,116 $ 53,900 $ 51,896 Current portion of long-term debt 4,000 4,000 4,000 Trade accounts payable 18,152 17,209 20,354 Income taxes payable 4,380 3,020 197 Other payables and accrued expenses 13,895 11,718 13,537 -------- -------- -------- Total current liabilities 105,543 89,847 89,984 Long-term debt, less current portion 88,000 42,000 88,000 Deferred income taxes and other liabilities 4,257 2,598 4,119 Stockholders' equity: Common stock 98 97 97 Paid-in capital 45,577 45,368 45,488 Retained earnings 74,043 60,625 61,341 Treasury stock, at cost (310) (310) (310) Foreign currency translation adjustments (486) (325) (468) -------- -------- -------- Total stockholders' equity 118,922 105,455 106,148 -------- -------- -------- $316,722 $239,900 $288,251 ======== ======== ========
See accompanying notes to condensed consolidated financial statements. 3 THE RIVAL COMPANY AND SUBSIDIARIES ------------------------ CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Three months and six months ended December 31, 1996 and December 31, 1995 (amounts in thousands, except per share amounts) (unaudited)
Three months ended Six months ended ------------------ ------------------- 12/31/96 12/31/95 12/31/96 12/31/95 -------- -------- -------- -------- Net sales $121,566 $ 97,450 $221,216 $171,347 Cost of sales 86,520 70,140 157,587 122,621 -------- -------- -------- -------- Gross profit 35,046 27,310 63,629 48,726 Selling expenses 14,205 9,987 27,514 18,573 General and administrative expenses 3,411 2,843 6,717 5,350 Amortization of goodwill and other intangible assets 748 498 1,488 995 -------- -------- -------- -------- Operating income 16,682 13,982 27,910 23,808 Interest expense 2,739 1,684 5,230 3,160 Other (income) expense, net 12 133 (6) 144 -------- -------- -------- -------- Earnings before income taxes 13,931 12,165 22,686 20,504 Income tax expense 5,337 4,709 8,816 7,955 -------- -------- -------- -------- Net earnings $ 8,594 $ 7,456 $ 13,870 $ 12,549 ======== ======== ======== ======== Weighted average common and common equivalent shares outstanding 9,973 9,941 9,961 9,931 ======== ======== ======== ======== Net earnings per common share $ 0.86 $ 0.75 $ 1.39 $ 1.26 ======== ======== ======== ========
See accompanying notes to condensed consolidated financial statements. 4 THE RIVAL COMPANY AND SUBSIDIARIES ----------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended December 31, 1996 and December 31, 1995 (amounts in thousands) (unaudited)
Six months ended ------------------ 12/31/96 12/31/95 -------- -------- Cash flows from operating activities: Net earnings $ 13,870 $ 12,549 Adjustments to reconcile net earnings to net cash used by operating activities: Depreciation and amortization 5,223 3,576 Other 138 (15) Changes in assets and liabilities: Accounts receivable (24,336) (43,120) Inventories (4,571) 7,012 Prepaid expenses (89) 214 Accounts payable and accruals (1,844) 4,940 Income taxes payable 4,183 2,443 -------- -------- Net cash used by operating activities (7,426) (12,401) -------- -------- Cash flows from investing activities: Capital expenditures (5,065) (2,510) Other 178 (105) -------- -------- Net cash used by investing activities (4,887) (2,615) -------- -------- Cash flows from financing activities: Net borrowings under working capital loans 13,220 16,273 Dividends paid (1,168) (971) Other 90 (18) -------- -------- Net cash provided by financing activities 12,142 15,284 -------- -------- Net increase (decrease) in cash (171) 268 Cash at beginning of period 1,503 193 -------- -------- Cash at end of period $ 1,332 $ 461 ======== ========
See accompanying notes to condensed consolidated financial statements. 5 THE RIVAL COMPANY AND SUBSIDIARIES ----------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Six Months Ended December 31, 1996 and December 31, 1995 Note 1 - ------ In the opinion of Management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position of the Company as of December 31, 1996 and 1995 and the results of its operations and its cash flows for the six months ended December 31, 1996 and 1995. The June 30, 1996, condensed consolidated balance sheet has been derived from the audited consolidated financial statements as of that date. These financial statements have been prepared in accordance with the instructions to Form 10-Q. To the extent that information and footnotes required by generally accepted accounting principles for complete financial statements are contained in or consistent with the audited consolidated financial statements incorporated by reference in the Company's Form 10-K for the year ended June 30, 1996, such information and footnotes have not been duplicated herein. Note 2 - ------ The results of operations for the six months ended December 31, are not indicative of the results to be expected for the full year due to the seasonal nature of the Company's operations. Note 3 Inventories - ------------------ The following is a summary of inventories at December 31, 1996 and 1995 and June 30, 1996 (in thousands):
Dec. 31, 1996 Dec. 31, 1995 June 30, 1996 ------------- ------------- ------------- Raw Materials and work in progress $ 44,069 $ 31,009 $ 42,470 Finished goods 67,525 47,815 64,103 -------- -------- -------- 111,594 78,824 106,573 Less LIFO allowance (4,993) (4,732) (4,543) -------- -------- -------- $106,601 $ 74,092 $102,030 ======== ======== ========
Note 4 Subsequent Event - ----------------------- On January 7, 1997, the Company acquired certain assets including inventory, equipment and tooling necessary for the production of the kitchen electrics product line from Dazey Corporation. These products will be manufactured in the Company's Sedalia plant and are expected to generate annual sales of approximately $20 million to $25 million. The Dazey products will be sold under the Rival brand name and include fryers, combination cookers, skillets, indoor grills and waffle makers. The Company paid approximately $10.4 million in cash as consideration for the assets. The source of funds used by the Company to effect the acquisition was borrowings under its revolving credit facility. The acquisition will be accounted for as a purchase and, accordingly, the purchase price will be allocated to the assets acquired based upon their respective fair values. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales were $121.6 million in the quarter ended December 31, 1996 compared to $97.5 million in the prior year. For the six months ended December 31, 1996, sales were $221.2 million compared to $171.3 million in the prior year. The sales increase was the result of Fasco products (acquired in January 1996) and Bionaire products (acquired in April 1996) as sales of the Company's other products were essentially flat. Net sales by business unit were as follows (in millions):
Three months ended Six months ended ------------------- ------------------- 12/31/96 12/31/95 12/31/96 12/31/95 -------- -------- -------- -------- Kitchen Electrics and Personal Care $ 68.6 $71.8 $118.4 $116.5 Home Environment 32.3 21.4 65.3 42.6 Industrial/Building Supply 6.6 .8 16.3 6.1 International 14.1 3.5 21.2 6.1 ------ ----- ------ ------ $121.6 $97.5 $221.2 $171.3 ====== ===== ====== ======
Gross profit was $35.0 million (28.8% of sales) for the quarter ended December 31, 1996 compared to $27.3 million (28.0% of sales) in the prior year. For the first six months of the current fiscal year, gross profit was $63.6 million (28.8% of sales) compared to $48.7 million (28.4% of sales) in the prior year. Raw material prices have stabilized and, as a result, modest price increases implemented in the past eighteen months have improved margins slightly. Selling expenses were $14.2 million (11.7% of sales) for the quarter ended December 31, 1996 compared to $10.0 million (10.2% of sales) in the prior year. For the six months ended December 31, 1996 such expenses were $27.5 million (12.4% of sales) compared to $18.6 million (10.8% of sales) in the prior year. The higher selling expenses as a percentage of sales is the result of expenses related to the international and industrial business units. Although the Company expects to reduce selling expenses of these business units as a percentage of sales over the next twelve months, they will likely continue to be higher than the Company's kitchen electrics and home environment business units. General and administrative expenses were $3.4 million for the December 1996 quarter compared to $2.8 million in the prior year. For the six months ended December 31, 1996, general and administrative expenses were $6.7 million compared to $5.4 million in the prior year. The higher expenses reflect increases in product engineering as well as management and support personnel required because of recent and expected future growth. General and administrative expenses declined slightly as a percentage of sales. Interest expense was $5.2 million for the six months ended December 31, 1996 compared to $3.2 million in the prior year as a result of higher borrowings required to finance recent acquisitions. Average interest rates were also slightly higher. Net earnings for the quarter ended December 31, 1996 were $8.6 million ($0.86 per share) compared to $7.5 million ($0.75 per share) for the same period in the prior year. For the six months ended December 31, 1996, net earnings were $13.9 million ($1.39 per share) compared to $12.5 million ($1.26 per share) in the prior year. 7 Liquidity and Capital Resources As of December 31, 1996 the Company had $92 million in long term debt (including $4 million current portion) and $85 million in revolving loan commitments. Revolving credit loans outstanding were $65.1 million as of such date. The long term debt requires periodic principal payments including $4.0 million in each of January 1997 and 1998 and has a final maturity in 2008. The revolving credit facilities include a $75 million U.S. bank line and a Canadian facility for the Canadian dollar equivalent of U.S. $10.0 million. The U.S. revolving credit facility expires in June 1999 and currently bears interest at a floating rate of LIBOR plus .75%. During the six months ended December 31, 1996, the Company used $7.4 million of cash for operating activities. The Company historically requires a significant amount of cash each fall to fund its build-up in inventories and accounts receivable during its peak selling season. These cash requirements are funded through borrowings on the working capital line. The Company plans to make capital expenditures of approximately $10.0 million during fiscal 1997, including $4 million for a new distribution center. Management believes that cash generated from operations and its bank credit facility will be sufficient to meet its cash requirements for the foreseeable future. PART II - OTHER INFORMATION --------------------------- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- A regular annual meeting of shareholders was held on November 13, 1996. Each of the Company's directors was elected to a one year term. The respective votes were as follows: Thomas K. Manning, 7,302,549 shares voted for election and 244,174 shares withheld votes; William S. Endres, 7,302,274 shares voted for election and 244,449 shares withheld votes; Darrel M. Sanders, 7,302,349 shares voted for election and 244,374 shares withheld votes; William L. Yager, 7,261,712 shares voted for election and 285,011 shares withheld votes; Jack J. Culberg, 7,302,100 shares voted for election and 244,623 shares withheld votes; Todd Goodwin, 7,302,704 shares voted for election and 244,019 shares withheld votes; John E. Grimm, III, 7,301,940 shares voted for election and 244,783 shares withheld votes; Lanny R. Julian, 7,302,239 shares voted for election and 244,484 shares withheld votes; Beatrice B. Smith, 7,302,539 shares voted for election and 244,184 shares withheld votes; Noel Thomas Patton, 7,302,399 shares voted for election and 244,324 shares withheld votes. Additionally, the shareholders voted to ratify the appointment of KPMG Peat Marwick as independent public accountants for the Company for the fiscal year ending June 30, 1997. The vote was 7,526,228 shares voted for ratification, 4,042 shares voted against ratification and 16,453 shares for which the vote was withheld. 8 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits. 11 Schedule regarding computation of per share earnings. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE RIVAL COMPANY Dated: February 4, 1997 By: /s/ William L. Yager ------------------------------------- William L. Yager President and Chief Operating Officer (Duly Authorized Officer) Dated: February 4, 1997 By: /s/ W. Mark Meierhoffer ------------------------------------ W. Mark Meierhoffer Senior Vice-President of Finance and Administration, Chief Financial Officer 9 EX-11 2 RIVAL COMP. EARNINGS PER SHARE THE RIVAL COMPANY AND SUBSIDIARIES Exhibit 11 Earnings Per Share (in thousands except per share data)
Three months ended Six months ended ------------------ ---------------- 12/31/96 12/31/95 12/31/96 12/31/95 -------- -------- -------- -------- Net earnings $ 8,594 $ 7,456 $ 13,870 $ 12,549 ======== ======== ======== ======== Primary Earnings Per Share - -------------------------- Weighted average common and common equivalent shares outstanding 9,973 9,941 9,961 9,931 ======== ======== ======== ======== Earnings per common and common equivalent share $ 0.86 $ 0.75 $ 1.39 $ 1.26 ======== ======== ======== ======== Share computation: Average common shares outstanding 9,734 9,725 9,732 9,721 Average number of options outstanding 663 531 673 535 Less treasury shares acquired with proceeds from exercise of options (424) (315) (444) (325) -------- -------- -------- -------- Weighted average common and common equivalent shares outstanding 9,973 9,941 9,961 9,931 ======== ======== ======== ========
* Fully diluted earnings per share is equal to primary earnings per share for all periods presented. EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from Form 10-Q for the six months ended December 31, 1996 and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS 6-MOS JUN-30-1997 JUN-30-1996 JUL-01-1996 JUL-01-1995 DEC-31-1996 DEC-31-1995 1,332 461 0 0 101,579 89,215 3,140 2,603 106,601 74,092 210,205 162,646 75,119 50,411 33,362 23,315 316,722 239,900 105,543 89,847 88,000 42,000 98 97 0 0 0 0 118,824 105,358 316,722 239,900 221,216 171,347 221,216 171,347 157,587 122,621 157,587 122,621 35,719 24,918 465 262 5,230 3,160 22,686 20,504 8,816 7,955 13,870 12,549 0 0 0 0 0 0 13,870 12,549 1.39 1.26 1.39 1.26
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