Riviera Tool Reports Second Quarter Results
GRAND RAPIDS, Mich., April 14 -- Riviera Tool Co. (AMEX:RTC) today announced sales and net income for the second quarter and six months ended February 29, 2004.
The Grand Rapids, Mich.-based designer and manufacturer of stamping die systems reported net income of $212,083, or $0.06 per diluted share, on net sales of $8.3 million for the second quarter of fiscal 2004, compared with net income of $231,348, or $0.07 per diluted share, on net sales of $8.3 million for the same period of fiscal 2003.
For the six months ended February 29, 2004, Riviera reported net sales of $16.6 million, a nearly 34 percent increase over last year's net sales of $12.6 million. The Company posted sharply higher earnings of $450,012, or $0.13 per diluted share, for the first six months of fiscal 2004, versus $42,434, or $0.01 per diluted share, for the same period last year.
The Company attributed its increased year-to-date sales and earnings to tooling programs for the Mercedes Benz M Class sports utility vehicle and a new crossover vehicle, which were secured during fiscal 2003, along with related engineering and die management services.
Riviera reported that its contract backlog was $16.6 million on February 29, 2004, including new orders of $3.6 million secured during the first and second quarters. Riviera noted that its flat sales and new orders in the quarter reflect the timing of new potential contracts. Although the market for tooling systems appears sluggish with limited contracts being awarded during the first and second quarters of 2004, the Company remains optimistic that tooling contracts releases should increase during the latter part of the third quarter through the fourth quarter of fiscal 2004.
"The contracts we secured last year continue to yield strong revenues and a solid backlog, at the same time, we continue to quote on new contracts to fuel our growth," said Kenneth K. Rieth, president and chief executive officer of Riviera Tool. "While we continue to be bullish on opportunities for Rivera Tool, there is still some softness in the overall domestic tooling industry. However, based on positive reports from the spring auto shows and the current quoting activities we anticipate that the market should significantly improve during the latter half of 2004."
As reported in March 2004, the Company raised $1.5 million in additional capital through the sale of 394,737 shares of its common stock in a private placement to several institutional and accredited investors. Riviera also granted warrants for the investors to purchase additional stock, which would generate additional capital for the Company. The Company said the capital raised will be used for general working capital purposes.
For the first six months of 2004, Rivera reported that it has improved its financial performance in a number of areas, including:
* Gross margin: The Company reported its gross margin was 10.2 percent for the first six months of 2004, up from 9.2 percent for the same period last year. Gross margins for the second quarter decreased slightly to 10.1 percent versus 10.5 percent for the same period last year due to efforts by the Company to meet delivery dates and engineering changes for customers.
* Improved cash flow: Riviera generated $4.4 million of cash flow from operations for the first six months of fiscal 2004.
* Reduction of debt and interest expense: Riviera used its positive cash flow over the past six months to cut total long-term debt to $5.0 million for the second quarter ended February 29, 2004 from $9.0 million for the second quarter ended last year. As a result of the reduced debt, the Company incurred less interest expense in the most recent second quarter, decreasing to $123,000 versus $221,000 for the second quarter ended 2003.
"The cash flow generated from operations during the first six months of 2004 was used to pay down debt and support operations," said Peter C. Canepa, chief financial officer for Riviera Tool. "We are focused on managing our cash and believe that proceeds from operations, along with existing bank working capital and proceeds from our equity offering in March, will provide us the necessary cash to fund growth moving forward."
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 February 29, August 31,
2004 2003
CURRENT ASSETS (unaudited) (audited)
Cash $1,200 $-
Accounts receivable 4,890,489 7,010,039
Costs in excess of billings
on contracts in process 11,490,012 12,208,666
Inventories 248,559 248,559
Prepaid expenses and other
current assets 507,706 294,143
Total current assets 17,137,966 19,761,407
PROPERTY, PLANT AND EQUIPMENT, NET 12,494,313 13,046,289
PERISHABLE TOOLING 623,096 617,722
OTHER ASSETS 347,660 325,198
Total assets $30,603,035 $33,750,616
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term
debt $4,012,298 $638,756
Accounts payable 4,481,611 5,020,554
Accrued outsourced contracts
payable 6,548,316 5,903,930
Accrued liabilities 754,582 435,896
Total current
liabilities 15,796,807 11,999,136
LONG-TERM DEBT 954,968 8,400,333
ACCRUED LEASE EXPENSE 690,790 640,690
Total liabilities 17,442,565 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 February 29, 2004 and
August 31, 2003 15,115,466 15,115,466
Retained deficit (1,954,996) (2,405,009)
Total stockholders'
equity 13,160,470 12,710,457
Total liabilities and stockholders'
equity $30,603,035 $33,750,616
RIVIERA TOOL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months For The Six Months
Ended Ended
Feb. 29, Feb. 28, Feb. 29, Feb. 28,
2004 2003 2004 2003
SALES $8,292,900 $8,304,121 $16,603,660 $12,642,723
COST OF SALES 7,452,464 7,434,664 14,913,281 11,479,929
GROSS PROFIT 840,436 869,457 1,690,379 1,162,794
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 505,652 416,712 909,139 738,605
INCOME FROM
OPERATIONS 334,784 452,745 781,240 424,189
TOTAL INTEREST
EXPENSE 122,701 221,397 331,228 381,755
INCOME BEFORE INCOME TAXES 212,083 231,348 450,012 42,434
INCOME TAXES - - - -
NET INCOME AVAILABLE FOR
COMMON SHARES $212,083 $231,348 $450,012 $42,434
BASIC AND DILUTED INCOME
PER COMMON SHARE $.06 $.07 $.13 $.01
BASIC AND DILUTED
COMMON SHARES
OUTSTANDING 3,379,609 3,379,609 3,379,609 3,379,609
RIVIERA TOOL COMPANY
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the Three Months For the Six Months
Ended Ended
Feb. 29, Feb. 28, Feb. 29, Feb. 28,
2004 2003 2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $212,083 $231,348 $450,012 $42,434
Adjustments to reconcile
net income to net cash from
operating activities:
Depreciation and
amortization 421,599 460,482 843,198 920,964
(Increase) decrease in assets:
Accounts
receivable (1,444,542) (1,915,394) 2,119,551 (6,819,931)
Costs in excess of
billings on contracts
in process (180,343) (106,658) 718,655 2,543,387
Perishable tooling 560 (33,796) (5,374) (33,645)
Prepaid expenses and
other current
assets (236,959) (204,158) (213,563) (193,218)
Increase (decrease) in
liabilities:
Accounts payable 1,209,148 2,693,668 (538,943) 2,576,829
Accrued outsourced
contracts payable (182,025) - 644,386 -
Accrued lease
expense 25,050 (8,762) 50,100 (17,523)
Accrued liabilities 86,476 (32,818) 318,686 84,725
Net cash provided by/(used in)
operating activities $(88,953) $1,083,912 $4,386,708 $(895,978)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other assets - - (22,462) (22,138)
Additions to property, plant
and equipment (166,429) (58,122) (291,223) (60,346)
Net cash used in investing
activities $(166,429) $(58,122) $(313,685) $(82,484)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (repayments)
on revolving credit line 380,876 (872,730) (3,789,177) (872,730)
Issuance of debt - 3,367,948 - 3,367,948
Principal payments on notes
payable to bank (125,494) (3,521,008) (282,646) (3,854,499)
Net cash provided by/(used in)
financing activities $255,382 $(1,025,790) $(4,071,823)$(1,359,281)
NET INCREASE/(DECREASE) IN CASH $- - $1,200 $(2,337,743)
CASH - Beginning of Period 1,200 - - 2,337,743
CASH - End of Period $1,200 - $1,200 $-