10-Q 1 e10-q.txt FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OF THE SECURITIES EXCHANGE ACT of 1934 For Quarter ended July 31, 2000 Commission file number: 0-6056 Michigan Rivet Corporation ------------------------------------------------------ (exact name of registrant as specified in its charter) Michigan 38-1887153 ------------------------ ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 13201 Stephens Road; Warren, MI 48089 ---------------------------------------------- (Address of Principal Executive Offices) Registrant's telephone number, including area code: (810) 754-5100 -------------- 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 XX No ------ ------ There were 641,375 outstanding shares of the registrant's common stock, $1.00 par value, as of July 31, 2000, close of the period covered by this report. 1 2 MICHIGAN RIVET CORPORATION NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended October 31, 1999. 2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MICHIGAN RIVET CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

See notes to condensed consolidated financial statements. 3 4 MICHIGAN RIVET CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

See notes to condensed consolidated financial statements. STATEMENT OF SHAREHOLDERS' EQUITY

See notes to condensed consolidated financial statements. 4 5 MICHIGAN RIVET CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

See notes to condensed consolidated financial statements. 5 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MICHIGAN RIVET CORPORATION Results of Operations Net sales in the quarter ended July 31, 2000 of $10,219,000 decreased $976,000, or 8.7% from the sales reported in the comparable period a year ago. The decrease in sales is a result of lower orders and delay of start up of a few new jobs by our customers. The net profit for the quarter ended July 31, 2000 was $329,000 vs. a net profit of $447,000 in the comparable period a year ago. The cost of sales percentage was 85.7% for the current fiscal year quarter vs. 84.4% in the comparable period a year ago. This increase was due to a combination of lower volume and some increases in manufacturing costs. The selling, general and administrative expense decrease was primarily due to lower bonus accruals and Single Business Tax refund. The percent to sales also decreased from 9.01% to 8.54% for year 2000. Interest expense increased $42,521 due primarily to greater short-term borrowing during the period and an increase in rates. The interest rate paid by the Company to Comerica Bank is tied to the prevailing prime rate. For the first nine months of 2000, net sales of $32,263,000 were 6.1% lower than the same period in 1999, due primarily to lower release schedules from our customers. The decrease in gross profit resulted primarily from higher maintenance, tooling, and BCBS premiums offset in part by lower workers' compensation and freight costs. The net profit for the first nine months of 2000 was $1,420,000 vs. a net profit of $1,542,000 in the comparable period a year ago. 6 7 Liquidity and Capital Resources The Company has short-term credit lines aggregating $5,000,000. At July 31, 2000, $1,800,000 were borrowed on this facility for new plant equipment. Additionally, cash generated from operations was used to purchase machinery and equipment and reduce long-term debt. The Company anticipates that funds provided by operations together with funds available under its credit lines will be sufficient to meet the Company's liquidity needs for the remainder of fiscal year 2000. Recent Developments On June 28, 2000, the Company announced that it had retained TM Capital Corp., a private New York investment banking firm, as its financial advisor in connection with the evaluation of the Company's strategic alternatives. The Board of Directors of the Company have asked TM Capital Corp. to provide advice on how best to maximize the value of the Company for its shareholders. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK SENSITIVE INSTRUMENTS At the end of the quarter covered by this report, the Company had no material exposure to market risks from instruments related to currency, interest rates or otherwise. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were filed during the quarter ended July 31, 2000. 7 8 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, hereunto, duly authorized. Michigan Rivet Corporation By /s/ William P. Lianos --------------------- William P. Lianos President and Treasurer (Principal Financial & Accounting Officer) Date 8-24-00 ---------------------------- 8 9 Exhibit Index ------------- Exhibit No. Description ----------- ----------- 27 Financial Data Schedule

MICHIGAN RIVET CORP 10-Q