SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 2001 Commission File
No. 0-1709
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RVM INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1515410
- ---------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
753 W. Waterloo Road, Akron, Ohio 44314-1519
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330) 753-4545
NOT APPLICABLE
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(Former name, former address and former fiscal year,
if changed from last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
There were 1,937,505 shares outstanding of the Registrant's common stock as of
November 4, 2001.
1
RVM INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)
2001
---------------------------------------
SEPTEMBER 30 MARCH 31
------------------ ------------------
ASSETS
Current assets:
Cash and cash equivalents $ 647,980 $ 1,108,115
Receivables:
Trade, net of allowance for doubtful accounts of $5,000
$26,000 at September 30 and March 31 931,648 1,058,590
Related party 120 20,836
Inventories 1,116,757 1,252,591
Other current assets 29,645 19,169
Net assets of discontinued operation-Ravens 14,796,742 16,010,629
Current assets of discontinued operation-Albex 1,575,908 5,584,947
------------------ ------------------
Total current assets 19,098,800 25,054,877
Property, plant and equipment, net 606,769 681,026
Other assets 6,687 6,687
Deferred income taxes 17,944 13,464
Non-current assets of discontinued operation-Albex 5,386,403 12,038,946
------------------ ------------------
Total assets $ 25,116,603 $ 37,795,000
================== ==================
See accompanying notes to the consolidated financial statements (unaudited).
2
RVM INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited), Continued
2001
----------------------------------------------
SEPTEMBER 30 MARCH 31
------------------ ------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 1,765,347 $ 1,595,481
- related parties 33,774 8,432
Accrued expenses and liabilities 222,064 264,291
Deferred income taxes 17,944 13,464
Current portion of long-term debt 19,829,554 6,150
Debt in default - 23,099,500
Current liabilities of discontinued operation-Albex 8,364,673 4,563,446
------------------ ------------------
Total current liabilities 30,233,356 29,550,764
Long-term debt 431,415 431,364
Notes payable - related parties 527,800 527,800
Non-current liabilities of discontinued operation-Albex 2,640,557 2,640,539
------------------ ------------------
Total liabilities 33,833,128 33,150,467
------------------ ------------------
Shareholders' equity:
Preferred stock, $0.01 par value; authorized shares, 300,000;
none outstanding - -
Common stock, $0.01 par value; authorized shares, 3,000,000;
issued and outstanding, 1,937,505 shares at September 30,
2001 and at March 31, 2001 19,376 19,376
Additional capital 4,786,336 4,786,336
Retained deficits (13,522,237) (161,179)
------------------ ------------------
Total shareholders' equity (8,716,525) 4,644,533
------------------ ------------------
Total liabilities and shareholders' equity $ 25,116,603 $ 37,795,000
================== ==================
See accompanying notes to the consolidated financial statements (unaudited).
3
RVM INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
SIX MONTHS ENDED SEPTEMBER 30
--------------------------------------
2001 2000
----------------- ----------------
Net sales $ 4,370,739 $ 5,455,667
Cost of sales 4,092,618 4,972,686
----------------- ----------------
Gross profit 278,121 482,981
Selling, general and administrative expenses 308,823 431,107
----------------- ----------------
(Loss) income from operations (30,702) 51,874
Other income (expense):
Other income 1,553 40,017
Interest expense (19,615) (61,350)
----------------- ----------------
(Loss) income before income taxes (48,764) 30,541
Provision for income taxes - 23,659
----------------- ----------------
(Loss) income from continuing operations (48,764) 6,882
Discontinued operations:
Loss from discontinued operations of Albex, net of
income tax benefit of $859,020 in 2000 (2,262,017) (1,423,109)
Estimated loss on disposal of Albex, including
provision of $375,000 for operating losses
during phase-out period (7,348,370) -
(Loss) gain from discontinued operations of
Ravens, net of income tax expense of $172,878
in 2000 (1,366,907) 273,385
Estimated loss on disposal of Ravens (2,335,000) -
----------------- ----------------
Net loss (13,361,058) (1,142,842)
================= ================
Per share data:
Basic and diluted earnings (loss) per share:
Continuing operations $ (0.02) $ 0.01
Discontinued operations (6.87) (0.60)
----------------- ----------------
$ (6.89) $ (0.59)
================= ================
See accompanying notes to the consolidated financial statements (unaudited).
4
RVM INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
THREE MONTHS ENDED SEPTEMBER 30
---------------------------------------------
2001 2000
-------------------- ------------------
Net sales $ 1,995,321 $ 2,702,895
Cost of sales 1,858,904 2,463,605
-------------------- ------------------
Gross profit 136,417 239,290
Selling, general and administrative expenses 164,792 186,725
-------------------- ------------------
(Loss) income from operations (28,375) 52,565
Other income (expense):
Other income 1,553 40,017
Interest expense (9,833) (30,344)
-------------------- ------------------
(Loss) income before income taxes (36,655) 62,238
Provision for income taxes - 35,380
-------------------- ------------------
(Loss) income from continuing operations (36,655) 26,858
Discontinued operations:
Loss from discontinued operations of Albex, net
of income tax benefit of $463,893 in 2000 (1,123,979) (750,324)
Estimated gain (loss) on disposal of Albex 983,016 -
Loss from discontinued operations of Ravens, net
of income tax expense of $160,473 in 2000 (784,224) (273,192)
Estimated loss on disposal of Ravens (2,335,000) -
-------------------- ------------------
Net loss (3,296,842) (996,658)
==================== ==================
Per share data:
Basic and diluted earnings (loss) per share:
Continuing operations $ (0.02) $ 0.01
Discontinued operations (1.68) (0.53)
-------------------- ------------------
$ (1.70) $ (0.52)
==================== ==================
See accompanying notes to the consolidated financial statements (unaudited).
5
RVM INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
SIX MONTHS ENDED SEPTEMBER 30
----------------------------------------
2001 2000
-------------------- -----------------
Cash flows from operating activities of continuing operations:
Net (loss) income from continuing operations.............................. $ (48,764) $ 6,882
Adjustments to reconcile net (loss) income to net cash provided by
operating activities of continuing operations:
Depreciation and amortization........................................... 84,408 96,630
Increase (decrease) in cash from changes in:
Receivables ........................................................... 147,658 (382,260)
Inventories............................................................. 135,834 418,880
Other assets............................................................ (10,476) (7,805)
Accounts payable ...................................................... 195,208 6,254
Accrued expenses and other current liabilities.......................... (42,226) 96,685
-------------------- -----------------
Net cash provided by operating activities of continuing operations...... 461,642 235,266
-------------------- -----------------
Cash flows from investing activities of continuing operations:
Capital expenditures...................................................... (10,151) (71,377)
-------------------- -----------------
Net cash used by investing activities of continuing operations.......... (10,151) (71,377)
-------------------- -----------------
Cash flows from financing activities of continuing operations:
Payments on long-term debt................................................ (788,236) (904,001)
Proceeds on long-term debt 750,000 -
Payments on notes payable - bank, net..................................... (3,237,809) 608,597
Payments on notes payable to related parties.............................. - (94,250)
-------------------- -----------------
Net cash used by financing activities of continuing operations.......... (3,276,045) (389,654)
-------------------- -----------------
Cash flows used in continuing operations (2,824,554) (225,765)
Cash flows provided by discontinued operations 2,364,419 230,394
Net (decrease) increase in cash and cash equivalents......................... (460,135) 4,629
Cash and cash equivalents at beginning of period ............................ 1,108,115 793,122
-------------------- -----------------
Cash and cash equivalents at end of period................................... $ 647,980 $ 797,751
==================== =================
See accompanying notes to the consolidated financial statements (unaudited).
6
RVM INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The information in this report reflects all adjustments, which are, in the
opinion of management, necessary for a fair statement of the results for
the interim periods presented for RVM Industries, Inc. ("the Company"). All
adjustments other than those described in this report are, in the opinion
of management, of a normal and recurring nature. These consolidated
financial statements include the accounts of RVM's wholly owned
subsidiaries: Ravens, Inc. ("Ravens"), Albex Aluminum, Inc. ("Albex") and
Signs and Blanks, Inc ("SABI"). All significant intercompany accounts and
transactions have been eliminated.
2. GOING CONCERN OF THE COMPANY
The accompanying unaudited consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business. As of March 31, 2001 and through September 30, 2001, the Company
was in violation of certain of its covenants related to FirstMerit Bank,
N.A. ("FirstMerit") debt in the total amount of $16,196,964. The current
default rendered this debt callable and as a result, the debt was
classified as a current liability on the balance sheet at March 31, 2001.
The loan agreements with FirstMerit bank were amended on October 3, 2001,
establishing a maturity date of March 31, 2002 for all of the FirstMerit
debt (see Note 4 for additional terms of amendment). Accordingly, this debt
has been classified as a current liability as of September 30, 2001. In
addition, the Company is in default of other long-term debt of $3,626,225
resulting from the default on the FirstMerit letter of credit. The current
default of other long-term debt of $3,626,225, renders the debt callable
and as a result, the debt has been classified as a current liability on the
balance sheet. These along with the Company's Board of Directors decision
to shutdown Albex and sell the operations of Ravens raise substantial doubt
as to the Company's ability to continue as a going concern for a reasonable
period of time.
3. DISCONTINUED OPERATIONS
In August 2001, the Company's Board of Directors approved a plan to
shutdown Albex. Accordingly, the results of operations for Albex have been
presented as a discontinued operation in the accompanying unaudited
consolidated financial statements for all periods presented. The estimated
loss on disposal of discontinued operations of Albex has been determined
based on management's estimated loss related to the write-down of impaired
property, plant, and equipment and estimated losses from operations during
the phase-out period. For the six months ended September 30,2001 the loss
amounted to $7,348,370.
7
3. DISCONTINUED OPERATIONS (CONTINUED)
The loss from operations for Albex for each period are presented below:
Three Months Ended Six Months Ended
September 30 September 30
2001 2000 2001 2000
--------------- ----------------- ---------------- --------------
Net sales $ 2,607,409 $ 4,394,237 $ 6,941,050 $ 9,960,886
Operating loss 816,122 700,365 1,560,258 1,337,770
Income tax benefit - 463,893 - 859,020
--------------- ----------------- ---------------- --------------
Loss from operations 1,123,979 750,324 2,262,017 1,423,109
Estimated (gain) loss on
disposal (983,016) - 7,348,370 -
--------------- ----------------- ---------------- --------------
$ 140,963 $ 750,324 $ 9,610,387 $ 1,423,109
=============== ================= ================ ==============
During November 2001, the Company sold the operating assets and liabilities
of Ravens. Accordingly, the results of operations for Ravens have been
presented as a discontinued operation in the accompanying unaudited
consolidated financial statements for all periods presented. The estimated
loss of disposal of discontinued operations of Ravens has been determined
based on management's estimated loss on the sale of Ravens' operations,
severance costs, and other costs incurred to sell the operations of Ravens.
For the six months ended September 30, 2001 the loss amounted to
$2,335,000.
The loss from operations for Ravens' for each period are presented below:
Three Months Ended Six Months Ended
September 30 September 30
2001 2000 2001 2000
--------------- ----------------- ---------------- --------------
Net sales $ 4,507,571 $ 9,540,738 $ 11,202,437 $ 22,398,472
Operating loss (income) 754,591 307,686 1,279,825 (745,609)
Income tax (expense) - (160,473) - (172,878)
--------------- ----------------- ---------------- --------------
Loss (income) from
operations 784,224 273,192 1,366,907 (273,385)
Estimated loss on disposal 2,335,000 - 2,335,000 -
--------------- ----------------- ---------------- --------------
$ 3,119,224 $ 273,192 $ 3,701,907 $ (273,385)
=============== ================= ================ ==============
The current and non-current assets and liabilities of Albex have been
classified appropriately on the unaudited consolidated balance sheet at
September 30, 2001 and March 31, 2001 based on the timing and the amount of
anticipated net proceeds related to the sale of the assets of Albex. The
net assets of Ravens have been classified as a current asset as the sale of
this segment is expected to be closed during the third quarter of 2002.
8
4. FINANCIAL OBLIGATIONS
On October 3, 2001, FirstMerit bank amended the Company's revolving note
agreement. The amended agreement extends the maturity of the revolving note
from August 31, 2001 to March 31, 2002, increases the interest rate from
FirstMerit's prime rate to FirstMerit's prime rate plus .75%, and amends
the maximum outstanding balance of revolving loans to $11.0 million,
however, when the Company sells the operations of Ravens, the maximum
revolving loans available shall not exceed $9.0 million. On October 3,
2001, FirstMerit bank amended the Company's fixed asset term note
agreement. The amended agreement reduces the maturity from September 30,
2006 to March 31, 2002 and increases the interest rate from FirstMerits'
prime rate to 7.75%. Monthly payments will be made to FirstMerit calculated
on a fifteen-year amortization at 7.75%. On October 3, 2001, FirstMerit
bank amended the Company's term note agreement. The amended agreement
reduces the maturity from September 30, 2004 to March 31, 2002 and
increases the interest rate from FirstMerit's prime rate to 7.75%. Monthly
payments will be made to FirstMerit calculated on a fifteen-year
amortization at 7.75%. On July 3, 2001, the Company entered into a $750,000
short-term note with FirstMerit bank. Interest is 9.0% and matured on
August 2, 2001. On October 3, 2001, FirstMerit bank amended the Company's
short-term note agreement. The amended agreement extends the maturity from
August 2, 2001 to March 31, 2002.
The amendment on October 3, 2001 also established new guarantees and
mortgages, documented FirstMerit's consent to the sale of Ravens and SABI
and the liquidation of Albex, and established new covenants.
5. EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share are based on net income (loss) divided by
the weighted average number of common shares outstanding. The weighted
average number of common shares outstanding was 1,937,505 in 2001 and 2000.
Diluted earnings per share reflect the potential dilution that could occur
if all options or contracts to issue common stock were issued or converted.
Basic earnings per share for the Company is the same as diluted earnings
per share.
6. INVENTORIES
Inventories consist of the following:
September 30, 2001 March 31, 2001
------------------------- --------------------
Raw materials $ 568,593 $ 704,427
Work in process - -
Finished goods 548,164 548,164
------------------------- --------------------
$1,116,757 $1,252,591
========================= ====================
9
7. ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets."
SFAS 141 requires that the purchase method be used for all business
combinations initiated after June 30, 2001. SFAS 142 requires that goodwill
no longer be amortized to earnings, but instead be reviewed for impairment.
The amortization of goodwill ceases upon adoption of SFAS 142, which for
the Company will be April 1, 2002. The Company does not anticipate that the
adoption of the new statement will have a significant effect on earnings or
the financial position of the Company.
In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 144 "Accounting for
the Impairment or Disposal of Long-Lived Assets." SFAS 144 is effective for
fiscal year beginning after December 15, 2001 or fiscal year beginning
April 1, 2002 for the Company. SFAS 144 addresses financial accounting and
reporting for the impairment of long-lived assets and for long-lived assets
to be disposed of. The Company is currently evaluating the impact of SFAS
144.
On April 1, 2001, the Company adopted Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended (SFAS 133). SFAS
133, requires the Company to recognize all derivative financial instruments
on the balance sheet at fair value. The Company does not utilize derivative
financial instruments; therefore, there was no impact upon adoption.
8. CONTINGENT LIABILITIES
The Company, Albex and an unrelated party were defendants in a wrongful
death and employer intentional tort claim. In July 2001, the plaintiff, the
Company, and the Company's insurance carriers settled this claim within the
limits of the Company's insurance policies and therefore there was not any
impact on the Company's financial position and results of operations and
cash flows.
The Company is also involved in other claims and litigation arising in the
ordinary course of business. Management expects that the outcome of such
claims will not have a material adverse effect on the Company's financial
position and results of operations and cash flows.
10
RVM INDUSTRIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 2001
MATERIAL CHANGES IN FINANCIAL CONDITION
The Company had cash and cash equivalents of $647,980 and $1,108,115 at
September 30, 2001 and March 31, 2001, respectively. The Company and FirstMerit
Bank on October 3, 2001 agreed to amend the loan agreements in order for the
company to complete the sale of the Ravens and the Albex assets. The line of
credit, secured by the Company's accounts receivable and inventory, was extended
from August 31, 2001 to March 31, 2002; the maximum loan limit is $ 11,000,000
and the interest rate is prime plus 0.75% per annum. The maximum loan limit
amount decreases to $9,000,000 on November 15, 2001. The Company owed
$10,801,941 on the line of credit at September 30, 2001. The Company expects to
meet the lower loan limit with the further reduction of inventory and
receivables and the sale of assets by November 15, 2001. The term notes with
FirstMerit that are secured by certain pieces of machinery, equipment, property,
and plants of Albex and Ravens, due dates were amended from September 30, 2006
and September 30, 2004 respectively to March 31, 2002. The amortization of both
the loans remains at fifteen years and the interest is fixed at 7.75% per annum.
The Company has letters of intent to sell certain assets of Albex and an asset
purchase agreement to sell the assets and certain assumed liabilities of Ravens
prior to March 31, 2002. FirstMerit entered into a short-term note with the
Company providing a $750,000 fixed term loan, at a fixed interest rate of 9.0%
per annum, monthly interest only payments that are due March 31, 2002. The
Company owed $6,415,023 on the three term loans as of September 30, 2001. Mr.
Jacob Pollock, the principle stockholder of the Company increased his personal
guarantee for the four FirstMerit loans from $2,500,000 to $3,250,000.
FirstMerit has agreed to continue to provide the IRDB letter of credit for
Ravens and the stand by letter of credit for Albex.
The proceeds from the sale of certain assets of Albex and the sale of all the
assets of Ravens less the assumed liabilities will be used to fund operating
expenses to close down those businesses and to reduce substantially the secured
debt and the line of credit.
The financial statements in this document have been prepared on a going concern
basis, which contemplates, the realization of assets and liabilities in the
normal course of business. The financial statements do not include any
adjustments relating to the recoverability and classification of assets carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.
Account Receivables (SABI only) of $931,648 reflect a decrease from year-end of
$126,942 resulting from lower sales in the second quarter.
Inventories (SABI only) of $ 1,116,757 decreased from year-end by $135,834.
Inventories have decreased due to the combination of reduced sales and
the implementation of management programs.
Current Assets of discontinued businesses of Ravens and of Albex reflects the
liquidation of Albex Accounts Receivables and Inventory due to the close down of
the business and the reduction of both Accounts Receivables and Inventories at
Ravens due to lower sales.
11
The reduction of the value of the non current assets of discontinued business
results mainly from the estimated loss on sale of the fixed assets of Albex.
Accounts Payable (SABI only) of $1,765,347 increased $169,866 that reflects the
increase in extended payment terms provided by suppliers.
Current portion of long term debt, debt in default, and current liabilities of
discontinued operations netted were lower due to pay down of debt by reducing
inventory and receivables and offset by reserves for closedown expenses.
The Company's sales order backlog for new trailers was approximately $1,248,335
at September 30,2001, $1,320,000 at July 30, 2001 and $1,700,000 at May 31 2001.
Although no assurances are possible, the Company believes that with the
replacement of the FirstMerit notes, its cash resources, credit arrangements,
additional sale of assets, additional restructuring of the Company and
internally generated funds will be sufficient to meet its operating and capital
expenditure requirements for existing operations and to service its debt in the
next six months. The Company will require replacement of the FirstMerit line of
credit debt not paid by the sale of Ravens assets and certain assumed
liabilities and Albex assets. Cautionary statement: Demand for the Company's
products is subject to changes in general economic conditions and in the
specific markets in which the Company competes.
12
SIX MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THE
SIX MONTHS ENDED SEPTEMBER 30, 2000
Consolidated net sales, which represent SABI only, were $4,370,739 or $1,084,928
(19.9%) lower than last year. Closing non-profitable sales offices in
Pennsylvania and North Dakota and the general slowdown of the economy caused the
lower sales. Gross Profit as a percent of net sales decreased to 6.4% from 8.9%,
due mainly to mix of product and higher material cost. Selling and General
Administrative costs were reduced 29%, to $308,823. Other income was lower than
last year due to a one time workers compensation grant received last year. SABI
loss for the six-month period was $(48,764) compared to a profit of $6,882 in
the comparable period last year.
The Company has signed an asset purchase agreement to sell substantially all the
assets and certain liabilities of Ravens to Fontaine Trailer Company. The
transaction is scheduled to be completed on November 14, 2001. The company
recorded an estimated $2,335,000 loss in the second quarter on the disposition
of Ravens that includes a loss on the sale of the assets and the cost incurred
to sell Ravens. The continuing losses at Ravens due to the severe downturn in
truck trailer sales and the ability to find long term replacement financing
resulted in the Company's decision to sell Ravens. The Company will utilize the
cash generated from the sale of Ravens to reduce secured party debt.
The Company announced the close down of Albex on August 10, 2001. Albex had
continuing losses due to the steep decline in the truck trailer market and also
to the overall decline in the manufacturing segment in the country. The Company
expected Albex to continue the significant losses for the next few quarters
before the overall economy and especially the truck trailer market would
increase. The Company could not continue to fund continuing losses at Albex from
the cash flow of the other businesses. The Company will liquidate the assets of
Albex and use the proceeds to reduce secured debt. The Company recorded an
$7,348,370 provision for the estimated losses from operations during the phase
out period and managements estimate of losses related to the write down of
impaired property plant and equipment. Albex has letters of intent to sell
substantially all its machinery and equipment. The anticipated closing
date for those sales is by December 31, 2001.
THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 2000
Consolidated net sales, which represent SABI only, were $1,995,321 or 26.2%
lower than last year. Closing non-profitable sales offices in Pennsylvania and
North Dakota and the general slowdown of the economy caused the lower sales.
Gross Profit as a percent of net sales decreased to 6.8% from 8.9%, due mainly
to mix of product and higher material cost. Selling and General Administrative
costs were reduced 12% to $164,792. Other income was lower than last year due to
a one time workers compensation grant received last year. SABI's loss for the
three-month period was $(36,655) compared to a profit of $26,858 in the
comparable period last year.
The Company signed an asset purchase agreement to sell substantially all the
assets and certain liabilities of Ravens to Fontaine Trailer Company. The
transaction is scheduled to be completed on November 14, 2001. The company
recorded an estimated $2,335,000 loss in the second quarter on the disposition
of Ravens that includes a loss on the sale of the Assets and the cost incurred
to sell Ravens. The continuing losses at Ravens due to the severe downturn in
truck trailer sales and the in ability to find long term replacement financing
resulted in the Company's decision to sell Ravens. The Company will utilize the
cash generated from the sale of Ravens to reduce secured party debt.
13
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Form 10-Q are made pursuant to the safe
harbor provisions of Rule 175 promulgated under the Securities Act of 1933. Such
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. Potential risks and
uncertainties include, but are not limited to: general business and economic
conditions; the financial strength of the industries which the Company serves;
the competitive pricing environment within the markets which the Company serves;
labor disruptions; interruptions in the supply of raw materials and services; a
significant increase in the price of aluminum; continued availability of credit
from lenders and vendors; government regulations; and obsolescence of the
Company's products and manufacturing technologies.
14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
None
(b) Reports on Form 8-K:
A Form 8-K was filed on August 10, 2001 describing the closing of
the Albex Aluminum Subsidiary.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RVM INDUSTRIES, INC.
(Registrant)
By: /s/ James R. Mccourt
------------------------
James R. McCourt
Chief Financial Officer
and Principal Accounting Officer
Date: November 13, 2001
15