Riviera Tool Reports Higher Sales, Strong Profitability for First Quarter 2004
GRAND RAPIDS, Mich., Jan. 14, 2004 -- Riviera Tool Co. (AMEX:RTC) today reported its fifth consecutive quarter of improved sales and income.
The Grand Rapids, Mich. designer and manufacturer of stamping die systems said that net sales nearly doubled, rising 91.6 percent to $8.3 million for the first quarter of fiscal 2004, compared with net sales of $4.3 million for the first quarter of fiscal 2003. Riviera attributed the increase to significant new tooling programs for the Mercedes Benz M Class sports utility vehicle and a new crossover vehicle, both of which were secured during fiscal 2003.
Riviera posted net income of $237,929, or $0.07 per diluted share, for the quarter ending Nov. 31, 2003, reversing a loss of $188,914, or $0.06 per diluted share, for the first quarter of fiscal 2003. The Company attributed the increase to new contracts for tooling systems and to additional engineering and die management services it provided on behalf of certain customers.
As of Nov. 30, 2003, the Company reported that its contract backlog was $22 million, reflecting order momentum in the back half of fiscal 2003 as well as approximately $2.2 million of new contracts received during the first quarter of fiscal 2004.
"We have begun to feel the impact of the new contracts we secured during fiscal 2003 as a result of our new approach to stamping die management," said Kenneth K. Rieth, president and chief executive officer of Riviera Tool. "We began this year with a solid backlog of contracts and are working to maximize profitability on these programs, while continuing to fill the order pipeline.
"Although we still see some softness in the overall domestic tooling industry, our quoting activity continues at a brisk pace. We anticipate that this market will improve during the latter half of 2004 based on early indications from the Detroit Auto Show and other industry gatherings that domestic and European automakers and their Tier One suppliers are committing to new model and restyling introductions for vehicles."
During the first quarter of fiscal 2004, Riviera reported improved financial performance in a number of areas, including:
* Increased gross margin: The Company reported its gross margin increased to 10.2 percent in the current quarter, up from 6.8 percent in the first quarter last year. Higher sales, coupled with overhead cost containment including reduced direct labor expense as a percentage of sales, fueled the gross margin gain. Direct labor was 18.9 percent of sales during the first quarter of fiscal 2004, down from 23.5 percent in the year-ago quarter.
* Reduction in selling, general and administrative expense (SG&A) as a percent of sales. Riviera reported SG&A expense of 4.9 percent of sales for the just-completed quarter, compared with 7.4 percent of sales in the fiscal 2003 first quarter. The Company attributed the improvement to the increased sales volume.
* Improved cash flow: Riviera generated $4.5 million of cash flow from operations in the first quarter of fiscal 2004.
* Reduction in long-term debt: Riviera used its positive cash flow to cut long-term debt in half, reducing it from $8.4 million at year-end 2003 to $4.1 million at the end of the first quarter of fiscal 2004.
"We continue to keep a watchful eye on our expenses to ensure that the programs we undertake contribute positively to our bottom line. At the same time, we remain committed to aggressively pursuing new contracts in an effort to boost our performance and increase shareholder value," said Peter C. Canepa, chief financial officer for Riviera Tool. "We are generating solid cash flow, paying down debt and continuing to manage the business to ensure we are poised for growth, but also prepared for the inevitable cycles in our industry."
About Riviera Tool
Riviera Tool Co. (www.rivieratool.com ) designs, develops and manufactures large-scale, custom metal stamping die systems used in the high-speed production of sheet metal parts and assemblies for the global automotive industry. A majority of Riviera's sales are to Mercedes Benz, BMW, Nissan, DaimlerChrysler, General Motors Corp., Ford Motor Co. and their Tier One suppliers.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this news release include certain predictions and projections that may be considered forward-looking statements under securities laws. These statements involve a number of important risks and uncertainties that could cause actual results to differ materially, including but not limited to economic, competitive, governmental and technological.
RIVIERA TOOL COMPANY
FINANCIAL STATEMENTS
BALANCE SHEETS
ASSETS November 30, August 31,
2003 2003
CURRENT ASSETS (unaudited) (audited)
Cash $1,200 $ -
Accounts receivable 3,445,947 7,010,039
Costs in excess of billings on
contracts in process 11,309,669 12,208,666
Inventories 248,559 248,559
Prepaid expenses and other
current assets 270,747 294,143
Total current assets 15,276,122 19,761,407
PROPERTY, PLANT AND EQUIPMENT, NET 12,749,483 13,046,289
PERISHABLE TOOLING 623,655 617,722
OTHER ASSETS 347,660 325,198
Total assets $28,996,920 $33,750,616
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $657,030 $638,756
Accounts payable 3,272,463 5,020,554
Accrued outsourced contracts payable 6,730,341 5,903,930
Accrued liabilities 668,106 435,896
Total current liabilities 11,327,940 11,999,136
LONG-TERM DEBT 4,054,854 8,400,333
ACCRUED LEASE EXPENSE 665,740 640,690
Total liabilities 16,048,534 21,040,159
PREFERRED STOCK - no par value,
$100 mandatory redemption value:
Authorized - 5,000 shares
Issued and outstanding -
no shares - -
STOCKHOLDERS' EQUITY:
Preferred stock - no par value,
Authorized - 200,000 shares
Issued and outstanding -
no shares - -
Common stock - No par value:
Authorized - 9,785,575 shares
Issued and outstanding -
3,379,609 shares at November
30, 2003 and August 31, 2003 15,115,466 15,115,466
Retained deficit (2,167,080) (2,405,009)
Total stockholders' equity 12,948,386 12,710,457
Total liabilities and stockholders' equity $28,996,920 $33,750,616
RIVIERA TOOL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months Ended
November 30
2003 2002
SALES $8,310,761 $4,338,602
COST OF SALES 7,460,817 4,045,265
GROSS PROFIT 849,944 293,337
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 403,487 321,893
INCOME/(LOSS) FROM OPERATIONS 446,457 (28,556)
OTHER EXPENSE
Interest expense 208,528 157,451
Other expense - 2,907
TOTAL OTHER EXPENSE 208,528 160,358
INCOME/(LOSS) BEFORE INCOME TAX
EXPENSE/(BENEFIT) 237,929 (188,914)
INCOME TAX EXPENSE - -
NET INCOME/(LOSS) AVAILABLE
FOR COMMON SHARES $237,929 $(188,914)
BASIC AND DILUTED INCOME/(LOSS)
PER COMMON SHARE $.07 $(.06)
BASIC AND DILUTED COMMON SHARES OUTSTANDING 3,379,609 3,379,609
RIVIERA TOOL COMPANY
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
November 30,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss) $237,929 $(188,914)
Adjustments to reconcile net income/(loss)
to net cash from operating activities:
Depreciation and amortization 421,600 460,482
(Increase) decrease in assets:
Accounts receivable 3,564,092 (4,904,537)
Costs in excess of billings on
contracts in process 898,997 2,650,045
Perishable tooling (5,933) 151
Prepaid expenses and other current
assets 23,396 10,940
Increase (decrease) in liabilities:
Accounts payable (1,748,091) (116,839)
Accrued outsourced contracts payable 826,411 -
Accrued lease expense 25,050 (8,761)
Accrued liabilities 232,210 117,543
Net cash provided from/(used in) operating
activities $4,475,661 $(1,979,890)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other assets (22,462) (22,138)
Additions to property, plant and equipment (124,794) (2,224)
Net cash used in investing activities $(147,256) $(24,362)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments on revolving credit line (4,170,053) -
Principal payments on notes payable to
bank and non-revolving equipment line
of credit (157,152) (333,491)
Net cash used in financing activities $(4,327,205) $(333,491)
NET INCREASE/(DECREASE) IN CASH $1,200 $(2,337,743)
CASH - Beginning of Period - 2,337,743
CASH - End of Period $1,200 $ -