Riviana Foods Inc. (Nasdaq: RVFD), yesterday reported earnings for fiscal 2001 of $20.2 million, or $1.43 per diluted share, on sales of $382.0 million, excluding restructuring and other charges, compared to earnings of $25.1 million, or $1.73 per diluted share, on sales of $403.0 million for fiscal 2000. Income from operations, excluding restructuring and other charges, was $27.6 million, compared to $33.9 million last year. The sales decline reflects a shorter reporting period of 52 weeks for fiscal 2001 as compared to 53 weeks in the previous year.
The Company recorded an after tax charge of $0.07 per diluted share for restructuring and other charges in its United Kingdom operations in the third quarter. The charges included redundancy payments for terminated employees, excess facility costs and equipment and other asset write-downs.
Net sales for fiscal 2001 and for prior years have been restated to reflect the reclassification of certain sales incentives, which previously had been recorded as advertising, selling and warehousing expenses, in accordance with new accounting requirements issued by the Financial Accounting Standards Board. While the net effect of this change had no impact on operating profit, net income or earnings per share, it lowered fiscal 2001 sales by 8.3% and previously reported fiscal 2000 sales by 7.6% as well as reduced gross profit and operating expenses.
For the fourth quarter of fiscal 2001, Riviana recorded net income of $5.3 million, or $0.38 per diluted share, on sales of $91.2 million, compared to net income of $6.2 million, or $0.44 per diluted share, on sales of $93.9 million for the same period last year. Income from operations was $7.3 million compared to $8.9 million for the prior year due primarily to lower operating income from the Company’s domestic rice business.
Riviana reported lower operating profit of $26.1 million in its domestic rice business for fiscal 2001, a decrease of $6.3 million, due to extremely competitive market conditions, particularly in the value-added instant and prepared mix categories, as well as higher energy and packaging costs. Total unit volumes for fiscal 2001 declined slightly as a result of lower sales in the export, commodity and value-added instant and prepared rice mixes. Foodservice sales increased 13%. While fourth quarter operating profit for the Company’s domestic rice business declined $2.4 million from fiscal 2000 due to lower sales of value-added products and lower margins due to higher energy and packaging costs, operating profit improved by $2.1 million over the third quarter.
In Central America, operating profit was up 7%, or $0.7 million, on a 6% increase in sales revenues for fiscal 2001, in spite of difficult economic conditions and higher energy costs. Volumes in processed fruits and vegetables and nectars and juices increased by 20% for the year, while volumes for cookie and cracker products were about even with the prior year. For the fourth quarter, operating profit increased $0.7 million, or 33%, over the prior year on a 3% increase in sales reflecting improved production efficiency particularly in processed fruits and vegetables and nectars and juices.
In Europe, the Company restructured operations at its Stevens & Brotherton subsidiary to improve profitability. Although it reported lower volumes for the fiscal year in virtually all product categories due to soft retail trading conditions, competitive pressures and the loss of representation of two product lines, Stevens & Brotherton returned to profitability in the fourth quarter of fiscal 2001 as a result of the measures taken in the third quarter. The Company expects to see further improvement in fiscal 2002. In the fourth quarter, operating profit declined $0.3 million on a $4.1 million decrease in sales versus the prior year.
Boost Nutrition, C.V., the Company’s rice milling joint venture with Arrocerias Herba, S.A. of Spain, reported higher volumes and margins due to strong growth in its German rice operation, Euryza Reis GmbH. At the Company’s Belgian joint venture with Herba and Ricegrowers’ Co-operative Limited of Australia, rice cake volumes were up 16%.
For the year, the Company reported a decline in other income of $0.1 million, while other income increased $0.4 million for the quarter. For the quarter, equity in the earnings of unconsolidated affiliates increased by $0.2 million due primarily to record volumes at the Company’s rice flour joint venture and improved results at Boost Nutrition. In addition, for the quarter, gains from the sale of marketable securities increased $0.2 million.
“We are encouraged by the return to profitability in the fourth quarter at Stevens & Brotherton and the stability of our Central American operations despite the very difficult economic environment,” said Joseph A. Hafner, Jr., president and chief executive officer. “In our domestic rice business, we began a recovery in the fourth quarter after an extremely poor third quarter. Energy prices have declined to more reasonable levels, growth has resumed in the retail rice category, and we are seeing a further consolidation in our industry. We look forward to continued improvement in the next fiscal year.”
During fiscal 2001 the Company repurchased 114,150 shares of its outstanding common stock. Since the repurchase program began in 1995, Riviana has repurchased 2,022,246 shares under its announced plan to repurchase 3,000,000 shares authorized.
As previously reported, Riviana paid a quarterly cash dividend of $0.16 per common share on July 3, 2001, to stockholders of record June 5, 2001.
Based in Houston, Texas, Riviana Foods Inc. is one of the largest processors, marketers and distributors of branded and private-label rice products in the United States. Principal brands include Mahatma®, Carolina® and Success®. The Company has additional food operations in Central America and Europe.
This press release includes forward-looking statements under the rules of the Securities and Exchange Commission. Although the Company believes that the expectations reflected in these statements are based upon reasonable assumptions, Riviana can give no assurance that these expectations will be achieved.
(COMPARATIVE TABLES FOLLOW)
RIVIANA FOODS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
Three Months Ended Years Ended
July 1, July 2, July 1, July 2,
2001 2000 2001 2000
NET SALES $91,205 $93,919 $381,999 $402,965
COST OF SALES 66,998 67,179 279,491 292,886
Gross profit 24,207 26,740 102,508 110,079
COSTS AND EXPENSES:
and warehousing 12,181 12,769 53,602 54,692
general 4,716 5,100 21,320 21,442
and other charges 1,435
Total costs and
expenses 16,897 17,869 76,357 76,134
Income from operations 7,310 8,871 26,151 33,945
OTHER INCOME (EXPENSE):
(expense), net 32 21 (70) 331
Other income, net 621 174 1,868 1,977
Income before income
taxes and minority
interests 7,963 9,066 27,949 36,253
INCOME TAX EXPENSE 2,387 2,715 8,352 10,855
SUBSIDIARIES 248 105 355 297
NET INCOME $5,328 $6,246 $19,242 $25,101
Earnings per share:
Basic $0.38 $0.44 $1.37 $1.74
Diluted 0.38 0.44 1.36 1.73
Dividends paid per share $0.16 $0.14 $0.60 $0.53
Weighted average common
Basic 14,040 14,181 14,072 14,438
Diluted 14,115 14,245 14,165 14,541
RIVIANA FOODS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 1, 2001 July 2, 2000
Cash and cash equivalents $ 14,990 $ 13,528
Marketable securities 71 1,582
Accounts receivable 39,840 40,826
Inventories 45,046 48,923
Prepaid expenses 2,265 2,366
Total current assets 102,212 107,225
PROPERTY, PLANT AND EQUIPMENT, net 90,547 86,124
INVESTMENTS IN UNCONSOLIDATED
AFFILIATES 9,431 9,402
OTHER ASSETS 6,103 6,364
Total assets $208,293 $209,115
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current maturities and short-term debt $ 4,816 $ 5,900
Accounts payable and accrued liabilities 40,031 46,016
Income taxes payable 5,374 5,876
Total current liabilities 50,221 57,792
LONG-TERM DEBT, net of current maturities 1,462 1,462
DEFERRED INCOME TAXES AND OTHER
LIABILITIES 15,776 14,930
STOCKHOLDERS’ EQUITY 140,834 134,931
and stockholders’ equity $208,293 $209,115