Riviera Tool Reports Third Quarter Results; Closes New Financing
GRAND RAPIDS, Mich., July 15 -- Riviera Tool Co. (AMEX:RTC) today announced sales and net income for the third quarter and nine months ended May 3, 20041, 2004.
The Grand Rapids, Mich.-based designer and manufacturer of stamping die systems reported net income of $238,584, or $0.06 per diluted share, on net sales of $7.6 million for the third quarter of fiscal 2004, compared with net income of $391,099, or $0.12 per diluted share, on net sales of $9.9 million for the same period of fiscal 2003. Rivera attributed the decrease in net sales to being in the final completion stages of two major contracts along with delayed releases in significant new tooling programs.
For the nine months ended May 31, 2004, Riviera reported net sales of $24.2 million, a seven percent increase over last year's net sales of $22.6 million. The Company posted increased earnings of $688,597, or $0.18 per diluted share, for the first nine months of fiscal 2004, versus $433,533, or $0.13 per diluted share, for the same period last year.
The Company attributed its increased year-to-date sales and earnings to significant tooling programs for the Mercedes-Benz M Class sports utility vehicle and a new crossover vehicle along with related engineering and die management services. The Company reported a backlog of approximately $7.6 million as of May 31, 2004 compared to a backlog of $21.7 million at the end of the third quarter of 2003. Since the end of the just completed quarter, the Company has been awarded approximately $3.1 million in new contracts.
"We are pleased with our performance for the first three quarters of 2004 in light of the continued softness in the tooling market," said Kenneth K. Rieth, president and chief executive officer of Riviera Tool. "We are cautious for the fourth quarter as we anticipate a decrease in contract revenues reflecting the delayed releases in significant new tooling programs. However, we remain to be optimistic on the tooling market as we continue to see an increase in quoting activities. We believe that there is substantial pent-up demand however, the timing of new contract releases continues to be a concern."
The Company reported its gross margin improved to 10.6 percent for the first nine months of 2004, up from 10.0 percent for the same period last year. Due to lower direct material and engineering expenses, gross margins for the third quarter also increased slightly to 11.4 percent versus 11.0 percent for the same period last year. Rivera's SG&A (selling, general and administrative) expenses increased slightly over the third quarter to 6.3 percent of sales versus 5.1 percent of sales last year, mostly due to costs being absorbed over lower sales.
Riviera also announced today the completion of two additional financing commitments. In June 2004, the Company closed on an expanded facility with its primary lender, Comerica Bank, increasing its Revolving Line of Credit from $10.0 million to $12.5 million and securing a $500,000 Non-Revolving Equipment Line of Credit. In July 2004, the Company completed a private placement of $3.0 million of six-year subordinated debt.
"These financings will assist us in providing additional working capital necessary to support the required Mercedes contract backend financing, while providing us additional working capital to support anticipated significant future contracts," said Rieth. "The financial markets' continued backing of Riviera indicates their belief in our long-term strategic plan."
About Riviera Tool
Riviera Tool Co. (http://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 May 31, August 31,
2004 2003
CURRENT ASSETS (unaudited) (audited)
Cash $1,280 $ -
Accounts receivable 12,061,707 7,010,039
Costs in excess of billings on
contracts in process 8,365,262 12,208,666
Inventories 248,559 248,559
Prepaid expenses and other
current assets 457,965 294,143
Total current assets 21,134,773 19,761,407
PROPERTY, PLANT AND EQUIPMENT, NET 12,602,324 13,046,289
PERISHABLE TOOLING 658,793 617,722
OTHER ASSETS 347,660 325,198
Total assets $34,743,550 $33,750,616
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $667,176 $638,756
Accounts payable 5,335,263 5,020,554
Accrued outsourced contracts payable 2,990,721 5,903,930
Accrued liabilities 809,184 435,896
Total current liabilities 9,802,344 11,999,136
LONG-TERM DEBT 9,500,951 8,400,333
CAPITAL LEASE 14,449 -
ACCRUED LEASE EXPENSE 715,840 640,690
Total liabilities 20,033,584 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 - 3,774,346
at May 31, 2004 and 3,379,609
shares at August 31, 2003 16,426,378 15,115,466
Retained deficit (1,716,412) (2,405,009)
Total stockholders' equity 14,709,966 12,710,457
Total liabilities and
stockholders' equity $34,743,550 $33,750,616
RIVIERA TOOL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months For The Nine Months
Ended Ended
May 31, May 31, May 31, May 31,
2004 2003 2004 2003
SALES $7,596,931 $9,919,178 $24,200,591 $22,561,901
COST OF SALES 6,729,645 8,826,409 21,642,926 20,306,338
GROSS PROFIT 867,286 1,092,769 2,557,665 2,255,563
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 479,920 505,935 1,389,060 1,244,540
INCOME FROM
OPERATIONS 387,366 586,834 1,168,605 1,011,023
TOTAL INTEREST AND
OTHER EXPENSE 148,782 195,735 480,008 577,490
INCOME BEFORE
INCOME TAXES 238,584 391,099 688,597 433,533
INCOME TAXES - - - -
NET INCOME AVAILABLE FOR
COMMON SHARES $238,584 $391,099 $688,597 $433,533
BASIC AND DILUTED INCOME
PER COMMON SHARE $.06 $.12 $.18 $.13
BASIC AND DILUTED
COMMON SHARES
OUTSTANDING 3,774,346 3,379,609 3,774,346 3,379,609
RIVIERA TOOL COMPANY
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the Three Months For the Nine Months
Ended Ended
May 31, May 31, May 31, May 31,
2004 2003 2004 2003
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income $238,584 $391,099 $688,597 $433,533
Adjustments to reconcile
net income to net cash from
operating activities:
Depreciation and
amortization 421,599 460,482 1,264,798 1,381,446
(Increase) decrease
in assets:
Accounts
receivable (7,171,218) 4,825,325 (5,051,668) (1,994,606)
Costs in excess
of billings on
contracts in
process 3,124,750 (5,440,988) 3,843,404 (2,897,601)
Perishable
tooling (35,697) (34,650) (41,071) (68,295)
Prepaid expenses
and other
current assets 49,741 20,061 (163,822) (173,157)
Increase (decrease)
in liabilities:
Accounts payable 853,652 196,871 314,709 1,667,985
Accrued outsourced
contracts
payable (3,557,595) 1,925,174 (2,913,209) 3,030,889
Accrued lease
expense 25,050 (8,761) 75,150 (26,284)
Accrued
liabilities 54,602 397,135 373,288 481,860
Net cash provided by/
(used in) operating
activities $(5,996,532) $2,731,748 $(1,609,824) $1,835,770
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other
assets - - (22,462) (22,138)
Additions to
property, plant
and equipment (529,610) (121,706) (820,833) (182,052)
Net cash used in
investing activities $(529,610) $(121,706) $(843,295) $(204,190)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings
(repayments) on
revolving credit line 5,354,637 (2,454,658) 1,565,460 (7,337,271)
Increase in
capital lease 14,449 - 14,449 -
Issuance of debt - - - 3,367,948
Principal payments on
notes payable to bank (153,776) (155,384) (436,422) -
Sale of common stock 1,310,912 - 1,310,912 -
Net cash provided by/
(used in) financing
activities $6,526,222 (2,610,042) $2,454,399 $(3,969,323)
NET INCREASE/
(DECREASE) IN CASH $80 - $1,280 $(2,337,743)
CASH - Beginning of Period 1,200 - - 2,337,743
CASH - End of Period $1,280 $ - $1,280 $ -