Riviana Foods Inc. (Nasdaq: RVFD) reported earnings per diluted share of $0.56 for the second quarter ended December 30, 2001, versus $0.52 per diluted share for the same period last year. Net income was $7.9 million, on sales of $98.7 million, compared to net income of $7.3 million, on sales of $102.2 million, for the second quarter of fiscal 2001. Operating income of $9.7 million for the quarter was even with the prior year.
Net income for the current period includes a $0.9 million, or $0.06 per diluted share, reduction in tax expense due to the favorable resolution of a foreign tax matter. The matter involved certain investment tax credits related to the Company’s capital investments in fiscal 1997. The Company did not record the benefit attributable to these credits while their availability was uncertain, however, the matter has since been resolved.
For the six months ended December 30, 2001, Riviana reported earnings of $12.5 million, or diluted earnings per share of $0.88, on net sales of $191.8 million. This compares to earnings of $12.1 million, or diluted earnings per share of $0.85, on sales of $196.7 million last year. Operating earnings decreased slightly to $16.2 million from $16.3 million for fiscal 2001.
For the quarter, operating profit for Riviana’s domestic rice business slightly increased by $0.2 million to $9.3 million as sales declined 2% to $63.6 million. The Company reported volume gains of 30% in foodservice, 5% in retail regular rice and 4% in prepared rice mixes offset by lower volumes in export/commodity of 20% and industrial of 14%. Profit improvement resulted from volume increases in the higher margin businesses.
In Central America, sales of cookies, crackers, processed fruits and vegetables declined 5% to $21.7 million. Operating profit was also down 5% to $3.0 million due to difficult economic conditions in the region. Volumes for processed fruits and vegetables were essentially flat, and volumes were down 5% for cookies and crackers.
Operating profit for the Company’s European operations was up $0.3 million, while sales declined 11% to $12.2 million. The increase in profitability reflects the benefits of restructuring efforts in the third quarter of last year.
“We continue to see positive volume market trends in the U.S. retail market,” said Joseph A. Hafner, Jr., president and chief executive officer. “We are also pleased to report that our restructuring efforts in Europe are yielding the desired results and that our Central American businesses have been somewhat resistant to the economic downturn in the region. Because of the strength in our U.S. business, we remain confident of an increase in our operating earnings in fiscal 2002.”
The Company recorded net interest income of $0.1 million related to improved cash flow in the current period compared to a nominal amount of interest expense in the prior year. Other income declined by $0.6 million due to a $0.6 million reduction in gains from the sale of marketable securities. The Company’s share in the earnings of its unconsolidated affiliates in the rice flour and Belgian and German rice businesses increased by $0.2 million while other miscellaneous expenses increased $0.2 million.
The Company did not repurchase any stock during the second quarter under its stock repurchase plan. To date, Riviana has purchased 2,022,246 shares of the total 3,000,000 shares authorized for repurchase under the program.
As previously reported, Riviana paid a quarterly cash dividend of $0.165 per common share on January 8, 2002, to stockholders of record December 4, 2001.
Riviana will hold its quarterly conference call today, Thursday, January 24, 2002, at 10:30 a.m. CST. The call may be heard live on the Internet. To access the call, at the URL prompt, enter http://22.214.171.124/att/confcast/597374.html. The conference call will be archived and available for replay using the same instructions until February 24, 2002.