Riviana Foods Inc. (Nasdaq: RVFD) reported net income for the second fiscal quarter ended December 31, 2000, of $7.3 million, or diluted earnings per share of $0.52, compared with net income of $7.6 million, or diluted earnings per share of $0.52, for the second quarter last year. Sales totaled $110.9 million, compared to sales of $120.0 million for the same period last year, and operating income decreased 7.5% to $9.7 million from the $10.5 million reported for the prior year.
For the six months ended December 31, 2000, Riviana reported earnings of $12.1 million, or diluted earnings per share of $0.85, on net sales of $212.5 million, compared to earnings of $12.2 million, or diluted earnings per share of $0.83, on sales of $225.6 million last year. Operating earnings during the current period decreased 2.2% to $16.3 million.
For the quarter, Riviana’s domestic rice business reported a 6% decline in sales and a 4% decline in operating profit. The sales decline was attributable primarily to a shorter reporting period of 13 weeks for the second quarter of fiscal 2001 versus 14 weeks for the year-ago period. In addition, the December quarter for fiscal year 2000 benefited from consumer “buy in” of rice products in response to Y2K publicity. Operating profit was negatively impacted by the sales decline.
Despite difficult economic conditions, results in Central America continued to show improvement during the second quarter as the Company began to benefit from improved operating efficiencies and new product introductions. Sales of cookies, crackers, processed fruits and vegetables increased 8%, to $23.2 million, and operating income was up 8%, to $3.2 million.
While there was substantial damage and loss of life in El Salvador from the January earthquake, the Company’s facilities were only slightly affected. No significant loss of business is expected although a temporary disruption in transportation has occurred. We remain optimistic that the Central American growth trends will continue.
The Company’s European operations, however, experienced a weaker quarter resulting from continuing competitive pressures and the loss of two distributorships in the United Kingdom. Sales were $13.8 million, and operating income was $0.1 million as compared to $20.0 million and $0.7 million, respectively, in fiscal 2000.
For the second quarter, other income increased due to gains from the sale of marketable securities and the earnings contribution from the Company’s December 1999 acquisition of the German rice milling and packing company, Euryza Reis Gmbh.
“We anticipate that many of the difficult operating conditions experienced during the first half of the year will remain with us throughout fiscal 2001,” said Joseph A. Hafner, Jr., president and chief executive officer. “Our domestic rice business will face higher energy and packaging costs and competitive market conditions, and our European operations will continue to be challenged until new business opportunities are identified and developed. We are, however, working aggressively to resolve these issues and to mitigate the impact of these factors on our operations.”
During the second quarter, Riviana completed the purchase of 77,650 shares of common stock under its repurchase program. To date, the Company has purchased 1,995,246 shares of the total 3,000,000 authorized for repurchase.
As previously reported, Riviana, paid a quarterly cash dividend of $0.16 per share on January 9, 2001, to shareholders of record December 5, 2000.
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.
RIVIANA FOODS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
December 31, January 2, December 31, January 2,
2000 2000 2000 2000
NET SALES $110,943 $120,015 $212,471 $225,622
COST OF SALES 72,262 80,173 141,957 155,172
Gross profit 38,681 39,842 70,514 70,450
COSTS AND EXPENSES:
and warehousing 23,409 24,005 42,934 42,911
Administrative and general 5,588 5,369 11,256 10,855
Total costs and expenses 28,997 29,374 54,190 53,766
Income from operations 9,684 10,468 16,324 16,684
OTHER INCOME (EXPENSE):
(expense), net (33) 101 (54) 265
Other income, net 776 317 1,145 648
Income before income
minority interests 10,427 10,886 17,415 17,597
INCOME TAX EXPENSE 3,112 3,250 5,208 5,263
MINORITY INTERESTS IN
CONSOLIDATED SUBSIDIARIES (11) 49 93 103
NET INCOME $7,326 $7,587 $12,114 $12,231
Earnings per share:
Basic $0.52 $0.52 $0.86 $0.84
Diluted $0.52 0.52 0.85 0.83
Dividends paid per share $0.14 $0.125 $0.28 $0.25
Weighted average common
Basic 14,082 14,567 14,104 14,596
Diluted 14,191 14,697 14,191 14,738
RIVIANA FOODS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2000 July 2, 2000
Cash and cash equivalents $10,434 $13,528
Marketable securities 604 1,582
Accounts receivable 46,109 40,826
Inventories 51,212 48,923
Prepaid expenses 2,893 2,366
Total current assets 111,252 107,225
PROPERTY, PLANT AND EQUIPMENT, net 88,071 86,124
INVESTMENTS IN UNCONSOLIDATED AFFILIATES 9,749 9,402
OTHER ASSETS 6,246 6,364
Total assets $215,318 $209,115
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current maturities and short-term debt $6,300 $ 5,900
Accounts payable and accrued liabilities 47,236 46,016
Income taxes payable 5,759 5,876
Total current liabilities 59,295 57,792
LONG-TERM DEBT, net of current maturities 1,704 1,462
DEFERRED INCOME TAXES AND OTHER LIABILITIES 13,687 14,930
STOCKHOLDERS’ EQUITY 140,632 134,931
Total liabilities and stockholders’ equity $215,318 $209,115