Houston, Texas-based Riviana Foods, one of the largest processors, marketers and distributors of branded and private-label rice products in the US, has reported earnings for FY 2002 of US$25.2m, or US$1.77 per diluted share, on sales of US$375.1m.
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The figures compare to earnings of US$19.2m, or US$1.36 per diluted share, which included restructuring and other charges, on sales of US$382m for FY 2001.
FY income from operations was up 28%, to US$33.6m, compared to US$26.2m last year, which included US$1.4m for restructuring and other charges.
For the Q4 2002, Riviana recorded net income of US$6.7m, or US$0.46 per diluted share, on sales of US$90.7m, compared to net income of US$5.3m, or US$0.38 per diluted share, on sales of US$91.2m year on year. Income from operations was US$8.8m compared to US$7.3m for the prior year. The increase was primarily due to improved results in domestic rice operations related to lower rice and energy costs as well as a favourable product mix.
Riviana’s domestic rice business reported a 25% increase in operating profit in FY 2002, to US$32.7m as rice consumption continued to increase, a record US rice crop helped lower rice costs and Riviana benefited from lower energy costs. In addition, growing Hispanic and Asian populations in the US and new convenience meals and food kit offerings by large food companies as well as the popularity of rice mixes and Success boil-in-bag rice contributed to the increase. Although total unit volumes were relatively flat, the foodservice segment benefited as more restaurants offered menus with rice dishes. Foodservice reported its third consecutive year of record results with a 23% increase in unit volumes.
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By GlobalDataQ4 domestic rice operating profit increased 38% to US$8.2m. Volumes for instant and rice mixes were up slightly while foodservice reported a 13% increase.
In Central America, operations were impacted by difficult economic conditions, resulting in a 3% decline in operating profit, to US$10.1m, on flat sales revenues. Volumes in processed fruits and vegetables and nectars and juices increased 3% for the year, while volumes for cookie and cracker products were 4% higher. For the Q4, operating profit was up 2% on a 7% increase in sales, primarily due to increased marketing support to offset the negative market conditions and the cost of expanding distribution.
In Europe, Riviana returned to profitability following restructuring and other efforts undertaken during FY 2001, reporting operating profit of US$1.7m versus a loss of US$0.9m last year, including US$1.4m in restructuring and other charges. Excluding these, operating profit increased US$1.2m. Although total sales were down 12%, Stevens & Brotherton reported double digit volume growth in Phoenix® brand ethnic rice and food products. In the Q4, operating profit increased US$0.2m, to US$0.4m, despite a 5% sales decline.
For FY 2002, Riviana reported interest income of US$0.6m, up from the net interest expense of US$0.1m reported last year. For the quarter, interest income increased by US$0.2m. Both increases were related to improved cash flow.
Other income for the year declined to US$0.8m from US$1.9m reported last year. In the prior year, Riviana recorded C$1.4m in gains from the sale of marketable securities while reporting no similar income in the current year. An increase of US$0.6m in the equity in the earnings of unconsolidated affiliates partially offsets this decline. Boost Nutrition CV, Riviana’s rice milling joint venture with Arrocerias Herba, a division of Ebro Puleva, again reported higher volumes and margins. Its Bosto brand in Belgium significantly increased market share, and volumes also grew in Germany with the Oryza brand. For the Q4, other income of US$0.5m was slightly less than US$0.6m for the prior year.
“We are pleased to see improved performance for fiscal 2002 following a challenging period
both for the Company and the rice industry,” said Joseph A. Hafner Jr, president and CEO: “Riviana continues to be a financially sound international food company with strong cash flow, a sound balance sheet and minimal debt. We believe those factors will play an important role in our ability to take advantage of growth opportunities in the future.”
During FY 2002 Riviana did not repurchase any shares of its outstanding common stock. Since the repurchase programme began in 1995, Riviana has repurchased 2,022,246 shares under its announced plan to repurchase 3,000,000 shares authorised.
Consolidated statements of income
(In US$000s, except per share amounts)
Three Months Ended Twelve Months Ended
(Unaudited)
June 30, July 1, June 30, July 1,
2002 2001 2002 2001
NET SALES $90,737 $91,205 $375,064 $381,999
COST OF SALES 63,879 66,998 267,136 279,491
Gross profit 26,858 24,207 107,928 102,508
COSTS AND EXPENSES:
Advertising, selling and
warehousing 12,563 12,181 52,671 53,602
Administrative and general 5,510 4,716 21,663 21,320
Restructuring and other charges 0 0 1,435
Total costs and expenses 18,073 16,897 74,334 76,357
Income from operations 8,785 7,310 33,594 26,151
OTHER INCOME (EXPENSE):
Interest income (expense), net 247 32 626 (70)
Other income, net 544 621 815 1,868
Income before income taxes and
minority interests 9,576 7,963 35,035 27,949
INCOME TAX EXPENSE 2,865 2,387 9,573 8,352
MINORITY INTERESTS IN EARNINGS
OF CONSOLIDATED SUBSIDIARIES 51 248 217 355
NET INCOME $6,660 $5,328 $25,245 $19,242
Earnings per share:
Basic $0.47 $0.38 $1.79 $1.37
Diluted 0.46 0.38 1.77 1.36
Dividends paid per share $0.165 $0.16 $0.65 $0.60
Weighted average common
shares outstanding:
Basic 14,155 14,040 14,083 14,072
Diluted 14,502 14,115 14,266 14,165
