Riviana Foods Inc. (Nasdaq: RVFD) reported net income for the third fiscal quarter ended April 1, 2001, of $2.8 million, excluding restructuring and other charges, or diluted earnings per share of $0.20, compared with net income of $6.6 million or diluted earnings per share of $0.46 last year. Sales totaled $104.0 million compared to sales of $108.2 million for the same period last year, and operating income, excluding restructuring and other charges, was $4.0 million compared to $8.4 million reported last year.
The Company recorded an after tax charge of $0.07 per diluted share for restructuring and other charges in the United Kingdom. The charges include redundancy payments for terminated employees, excess facility costs and equipment and other asset write-downs.
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For the nine months, the Company reported earnings of $14.9 million, excluding restructuring and other charges, or diluted earnings per share of $1.05 on sales of $316.5 million compared to earnings of $18.9 million or diluted earnings per share of $1.29 on sales of $333.9 million for the third quarter of fiscal 2000. The sales decline reflects a shorter reporting period of 13 weeks for the second quarter of fiscal 2001 versus 14 weeks for the year-ago period.
For the quarter, operating profit for Riviana’s domestic rice business declined $4.4 million to $3.9 million and sales were down $1.5 million. These declines reflect the impact of a competitive domestic rice market, particularly in value-added instant and prepared mix categories, coupled with higher energy and packaging costs. As a result of the competitive conditions, the Company has been unable to pass along increased product costs, and in certain markets, has increased promotional activities to maintain its leading market shares.
Operating profit for Riviana’s Central American businesses was even with the prior year at $2.4 million despite continuing difficult economic conditions in the region due to high energy costs and lower export prices for coffee and bananas. Sales of processed fruits and vegetables and nectars and juices increased 16% but declined 4% for cookies and crackers. Sales gains were primarily attributable to the introduction of new products in the market.
Sales for the Company’s European operations declined by $4.3 million during the quarter. This unit reported an operating loss of $1.5 million after providing $1.4 million for restructuring and other charges, versus an operating profit of $0.3 million in the prior year. During the third quarter, the Company took action to optimize profitability and restructure operations in its Stevens & Brotherton subsidiary, which markets and distributes branded and private-label rice, dried fruit and other food products in the United Kingdom. Stevens & Brotherton’s volumes have been lower in virtually all product categories due to soft retail trading conditions, competitive pressures and the loss of representation of two product lines.
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By GlobalData“We believe that these and other steps taken to reduce costs and increase sales will put our European operations on a more profitable footing in the fourth quarter of fiscal 2001,” said Joseph A. Hafner, Jr., president and chief executive officer.
“Riviana is a solid company with a strong balance sheet and market leadership,” Hafner emphasized. “We are the number one or number two rice marketer in 19 of the 20 top U.S. rice markets and our brands are some of the most recognized names in rice. As we go forward, we will be working to reduce costs and improve operating efficiencies at our facilities worldwide, and we will continue to maintain market share and to focus on effective promotional efforts for our products.”
As previously reported, Riviana paid a quarterly cash dividend of $0.16 per common share on April 10, 2001, to stockholders of record March 6, 2001.
During the third quarter, Riviana completed the purchase of 27,000 shares of common stock under its repurchase program. To date, the Company has purchased 2,022,246 shares of the total 3,000,000 authorized for repurchase.
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)
(Unaudited)
Three Months Ended Nine Months Ended
April 1, April 2, April 1, April 2,
2001 2000 2001 2000
NET SALES $ 104,045 $ 108,245 $ 316,516 $ 333,867
COST OF SALES 70,404 70,447 212,361 225,619
Gross profit 33,641 37,798 104,155 108,248
COSTS AND EXPENSES:
Advertising, selling
and warehousing 24,341 23,921 67,275 66,832
Administrative and
general 5,348 5,487 16,604 16,342
Restructuring and
other charges 1,435 — 1,435 —
Total costs and
expenses 31,124 29,408 85,314 83,174
Income from
operations 2,517 8,390 18,841 25,074
OTHER INCOME (EXPENSE):
Interest income
(expense), net (48) 45 (102) 310
Other income, net 102 1,155 1,247 1,803
Income before income
taxes and minority
interests 2,571 9,590 19,986 27,187
INCOME TAX EXPENSE 757 2,877 5,965 8,140
MINORITY INTERESTS IN
EARNINGS OF CONSOLIDATED
SUBSIDIARIES 14 89 107 192
NET INCOME $ 1,800 $ 6,624 $ 13,914 $ 18,855
Earnings per share:
Basic $ 0.13 $ 0.46 $ 0.99 $ 1.30
Diluted 0.13 0.46 0.98 1.29
Dividends paid
per share $ 0.16 $ 0.14 $ 0.44 $ 0.39
Weighted average common
shares outstanding:
Basic 14,040 14,366 14,082 14,521
Diluted 14,166 14,439 14,182 14,640
RIVIANA FOODS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
April 1, 2001 July 2, 2000
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 12,133 $ 13,528
Marketable securities 483 1,582
Accounts receivable 44,578 40,826
Inventories 49,819 48,923
Prepaid expenses 2,577 2,366
Total current assets 109,590 107,225
PROPERTY, PLANT AND EQUIPMENT, net 88,744 86,124
INVESTMENTS IN UNCONSOLIDATED AFFILIATES 9,657 9,402
OTHER ASSETS 5,778 6,364
Total assets $ 213,769 $ 209,115
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities and short-term debt $ 14,915 $ 5,900
Accounts payable and accrued liabilities 39,323 46,016
Income taxes payable 5,573 5,876
Total current liabilities 59,811 57,792
LONG-TERM DEBT, net of current maturities 1,424 1,462
DEFERRED INCOME TAXES AND OTHER LIABILITIES 13,930 14,930
STOCKHOLDERS’ EQUITY 138,604 134,931
Total liabilities and stockholders’ equity $ 213,769 $ 209,115
