-----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, QgIwO/85I3CjDcK/wVMrci8DAWhPYXMuztn7PVMbO6dlhZ5rTuH0UwORaR6x5uoK Gy/9vtgvAy5Zi8DBDvaIjA== 0000950131-97-006661.txt : 19971114 0000950131-97-006661.hdr.sgml : 19971114 ACCESSION NUMBER: 0000950131-97-006661 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 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: SEC FILE NUMBER: 000-20274 FILM NUMBER: 97712505 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 September 30, 1997. 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 September 30, 1997, the registrant had 9,448,847 shares of common stock, par value $.01 per share, outstanding. 1 THE RIVAL COMPANY FORM 10-Q QUARTER ENDED SEPTEMBER 30, 1997 INDEX
PART I. - FINANCIAL INFORMATION Page ITEM 1. Financial Statements (1) Condensed Consolidated Financial Statements (unaudited): Condensed Consolidated Balance Sheets as of September 30, 1997, September 30, 1996, and June 30, 1997. 3 Condensed Consolidated Statements of Earnings for the three months ended September 30, 1997 and September 30, 1996. 4 Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 1997 and September 30, 1996. 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 6. Exhibits and Reports on Form 8-K 9
2 PART I - FINANCIAL INFORMATION THE RIVAL COMPANY AND SUBSIDIARIES ---------------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 1997 and 1996 and June 30, 1997 (amounts in thousands) (unaudited)
09/30/97 09/30/96 06/30/97 --------- --------- --------- ASSETS Current assets: Cash $ 476 $ 195 $ 194 Accounts receivable 85,696 90,583 74,663 Inventories 118,106 116,385 105,287 Deferred income taxes 2,584 1,602 2,584 Prepaid expenses 2,097 3,149 1,375 --------- --------- --------- Total current assets 208,959 211,914 184,103 Property, plant and equipment, net 47,008 41,823 46,695 Goodwill 61,688 59,562 62,314 Other assets 5,301 6,074 5,493 --------- --------- --------- $ 322,956 $ 319,373 $ 298,605 ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks $ 78,175 $ 69,306 $ 65,075 Current portion of long-term debt 4,000 4,000 4,000 Trade accounts payable 20,758 25,172 15,477 Income taxes payable 3,497 3,592 1,231 Other payables and accrued expenses 13,992 14,226 13,501 --------- --------- --------- Total current liabilities 120,422 116,296 99,284 Long-term debt, less current portion 84,000 88,000 84,000 Deferred income taxes and other liabilities 5,009 4,232 4,931 Stockholders' equity: Common stock 98 98 98 Paid-in capital 45,656 45,519 45,656 Retained earnings 72,865 66,032 69,706 Treasury stock, at cost (4,438) (310) (4,438) Foreign currency translation adjustments (656) (494) (632) --------- --------- --------- Total stockholders' equity 113,525 110,845 110,390 --------- --------- --------- $ 322,956 $ 319,373 $ 298,605 ========= ========= =========
See accompanying notes to condensed consolidated financial statements. 3 THE RIVAL COMPANY AND SUBSIDIARIES ---------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Three months ended September 30, 1997 and September 30, 1996 (amounts in thousands, except per share amounts) (unaudited)
Three months ended ------------------ 09/30/97 09/30/96 --------- --------- Net sales $ 96,697 $ 99,650 Cost of sales 71,119 71,067 --------- --------- Gross profit 25,578 28,583 Selling expenses 12,999 13,309 General and administrative expenses 3,255 3,305 Amortization of goodwill and other intangibles 779 741 --------- --------- Operating income 8,545 11,228 Interest expense 2,587 2,491 Other expense, (income) net 3 (18) --------- --------- Earnings before income taxes 5,955 8,755 Income tax expense 2,229 3,479 --------- --------- Net earnings $ 3,726 $ 5,276 ========= ========= Weighted average common and common equivalent shares outstanding 9,663 9,948 ========= ========= Net earnings per common share $ 0.39 $ 0.53 ========= =========
See accompanying notes to condensed consolidated financial statements. 4 THE RIVAL COMPANY AND SUBSIDIARIES -------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended September 30, 1997 and September 30, 1996 (amounts in thousands) (unaudited)
Three months ended ------------------- 09/30/97 09/30/96 -------- -------- Cash flows from operating activities: Net earnings $ 3,726 $ 5,276 Adjustments to reconcile net earnings to net cash used by operating activities: Depreciation and amortization 2,679 2,465 Other 78 113 Changes in assets and liabilities: Accounts receivable (11,033) (16,480) Inventories (12,819) (14,355) Prepaid expenses (722) (1,007) Accounts payable and accruals 5,772 5,507 Income taxes payable 2,266 3,395 -------- -------- Net cash used by operating activities (10,053) (15,086) -------- -------- Cash flows from investing activities: Capital expenditures (2,189) (3,167) Other (9) 88 -------- -------- Net cash used by investing activities (2,198) (3,079) -------- -------- Cash flows from financing activities: Net borrowings under working capital loans 13,100 17,410 Dividends paid (567) (585) Other -- 32 -------- -------- Net cash provided by financing activities 12,533 16,857 -------- -------- Net increase (decrease) in cash 282 (1,308) -------- -------- Cash at beginning of period 194 1,503 -------- -------- Cash at end of period 476 195 ======== ========
See accompanying notes to condensed consolidated financial statements. 5 THE RIVAL COMPANY AND SUBSIDIARIES -------------------------------- Notes to Condensed Consolidated Financial Statements Three Months Ended September 30, 1997 and September 30, 1996 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 September 30, 1997 and the results of its operations and its cash flows for the three months ended September 30, 1997 and September 30, 1996. The June 30, 1997, 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, 1997, such information and footnotes have not been duplicated herein. Note 2 - ------ The results of operations for the three months ended September 30, 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 September 30, 1997 and 1996 and June 30, 1997 (in thousands):
Sept. 30, 1997 Sept. 30, 1996 June 30, 1997 -------------- -------------- ------------- Raw materials and work in progress $ 51,402 $ 45,794 $ 52,933 Finished goods 72,369 75,360 57,794 -------- -------- -------- 123,771 121,154 110,727 Less LIFO allowance (5,665) (4,769) (5,440) -------- -------- -------- $118,106 $116,385 $105,287 ======== ======== ========
Note 4 Business Segments - ------------------------ The Rival Company manages its operations through four business units: kitchen electrics and personal care (kitchen electrics), home environment, industrial and building supply (industrial) and international. The kitchen electrics business unit sells products including Crock-Pot(R) slow cookers, toasters, ice cream freezers, can openers and massagers to retailers throughout the U.S. The home environment business unit sells products including fans, air purifiers, humidifiers, electric space heaters, utility pumps and household ventilation to retailers throughout the U.S. The industrial group sells products including industrial fans and drum blowers, household ventilation, ceiling fans, door chimes and electric heaters to electrical and industrial wholesale distributors throughout the U.S. The international business unit sells the Company's products outside the U.S. The Company is reporting business segment information in accordance with the provisions of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" which was issued in June 1997. The Rival Company evaluates performance based upon contribution margin, which it defines as gross margin less selling expenses. Administrative functions such as finance and management information systems are centralized and are not allocated to the business units. The various business units share manufacturing and distribution facilities. Costs of operating the manufacturing plants are allocated to the business units through full-absorption standard costing and distribution costs are allocated based upon volume shipped from each distribution center. 6 Summary financial information for each reportable segment, together with non-business unit results consisting of sales directly to consumers, for the three month periods ended September 30, 1997 and 1996 is as follows (in thousands):
September Kitchen Home 1997 Electrics Environment Industrial International Other Total - ------------------- --------- ----------- ---------- ------------- ------ ------- Net sales $49,601 $26,366 $9,076 $10,320 $1,334 $96,697 Gross profit 13,955 5,598 2,426 2,840 759 25,578 Selling expenses 5,714 3,076 2,143 1,683 383 12,999 Contribution margin 8,241 2,522 283 1,157 376 12,579 September Kitchen Home 1996 Electrics Environment Industrial International Other Total - ------------------- --------- ----------- ---------- ------------- ------ ------- Net sales $50,402 $31,694 $9,684 $ 7,065 $ 805 $99,650 Gross profit 15,406 7,810 2,395 2,439 533 28,583 Selling expenses 5,443 3,278 2,692 1,579 317 13,309 Contribution margin 9,963 4,532 (297) 860 216 15,274
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales were $96.7 million in the quarter ended September 30, 1997 compared to $99.7 million in the prior year. The sales decline was primarily in the home environment products and resulted from later than normal shipments of seasonal products, such as heaters, and a decline in sales of humidifiers and air cleaners. Sales of products in the kitchen electrics business unit decreased by 2% due to delayed ordering by retailers of holiday-season products. International sales increased by $3.3 million, due primarily to sales in Latin America. Gross profit was $25.6 million (26.5% of sales) for the quarter ended September 30, 1997 compared to $28.6 million (28.7% of sales) in the prior year. The decline in gross margins as a percentage of sales was due in part, to a change in sales mix. Sales declines of certain high margin products including novelty massagers and air purifiers were offset by increased sales of lower margin products including promotionally priced irons. Start-up costs related to transferring production of major product lines including heaters, humidifiers and air purifiers from plants closed during last year's restructuring to the Company's other plants, also contributed to the lower margins. Evidence of improved efficiency in plant operations and an upturn in gross margin emerged in September, after unfavorable variances in July and August. Selling expenses were $13.0 million (13.4% of sales) for the current quarter compared to $13.3 million (13.4% of sales) in the prior year. The decline in selling expenses reflects a decrease in fixed costs from the consolidation of certain sales and administrative functions. General and administrative expenses decreased 1.5% to $3.3 million. Substantial savings were achieved due to the consolidation of certain administrative functions in Canada, however, these were largely offset by increased legal and professional expenses incurred involving the Company's intellectual property. Interest expense increased from $2.5 million to $2.6 million due to increased borrowings. Net earnings for the quarter ended September 30, 1997 were $3.7 million ($0.39 per share) compared to $5.3 million ($0.53 per share) for the same period in the prior year. Liquidity and Capital Resources As of September 30, 1997 the Company had $88 million in long term debt (including $4 million current portion) and $100 million in revolving loan commitments. Revolving credit loans outstanding were $78.2 million as of such date. The long-term debt requires periodic principal payments including $4.0 million in January 1998 and $6.0 million in January 1999 and has a final maturity in 2008. The revolving credit facilities include a $75 million U.S. bank line, which expires in June 1999, and a Canadian facility for the Canadian dollar equivalent of U.S. $10.0 million. The Company also has a $15 million seasonal bank line, which expires on December 31, 1997. The U.S. revolving credit facility currently bears interest at a floating rate of LIBOR plus .75%. 7 During the three months ended September 30, 1997, the Company used $10.1 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 $8.0 million during fiscal 1998. Management believes that cash generated from operations and its bank credit facilities will be sufficient to meet its cash requirements for the foreseeable future. Net Earnings Per Share In February 1997, the Financial Accounting Standards Board issued Statement No. 128, 'Earnings Per Share' which revises the calculation and presentation provisions of Accounting Principles Board Opinion 15 and related interpretations. Statement No. 128 is effective for the Company's quarter ending December 31, 1997. Retroactive application will be required. The Company believes the adoption of Statement No. 128 will not have a significant effect on its reported earnings per share. PART II - OTHER INFORMATION --------------------------- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 11 Schedule regarding computation of per share earnings. (b) Reports on Form 8-K. None 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: October 31, 1997 By: /s/ William L. Yager ------------------------ William L. Yager President and Chief Operating Officer (Duly Authorized Officer) 8 EX-11 2 COMPUTATIONS EARNINGS PER SHARE Exhibit 11 THE RIVAL COMPANY AND SUBSIDIARIES Earnings Per Share (in thousands except per share data)
Three Months ended September 30,* ------------------ 1997 1996 ---- ---- Net earnings $3,726 $5,276 ====== ====== Weighted average common and common equivalent shares outstanding 9,663 9,948 ====== ====== Earnings per common and common equivalent shares $0.39 $0.53 ====== ====== Computation of weighted average common and common equivalent shares outstanding: Average common shares outstanding 9,449 9,730 Average number of options outstanding 828 684 Less treasury shares acquired with proceeds from exercise of options (614) (466) ------ ------ Weighted average common and common equivalent shares outstanding 9,663 9,948 ====== ======
*Fully diluted earnings per share are equal to primary earnings per share for both periods presented. EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from Form 10-Q for the three months ended September 30, 1996 and 1997 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS 3-MOS JUN-30-1998 JUN-30-1997 JUL-01-1997 JUL-01-1996 SEP-30-1997 SEP-30-1996 476 195 0 0 88,203 93,749 2,507 3,166 118,106 116,385 208,959 211,914 80,195 73,222 33,187 31,399 322,956 319,373 120,422 116,296 84,000 88,000 0 0 0 0 98 98 113,427 110,747 322,956 319,373 96,697 99,650 96,697 99,650 71,119 71,067 71,119 71,067 17,033 17,355 232 208 2,587 2,491 5,955 8,755 2,229 3,479 3,726 5,276 0 0 0 0 0 0 3,726 5,276 .39 .53 .39 .53
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