Riviera Tool Company Announces Second Quarter Results
26 March 1998
Riviera Tool Company Announces Second Quarter Results
GRAND RAPIDS, Mich., March 26 -- Riviera Tool Company
(Amex: RTC) today announced financial results for the three and six months
ended February 28, 1998. The Grand Rapids, Michigan-based manufacturer of
large scale stamping die systems reported net income for the three months
ended February 28, 1998 of $525,949, or 17 cents per share, on sales of
$6,095,638, versus net income of $157,607, or 11 cents per share, on sales of
$5,405,086 for the second quarter of fiscal 1997. For the six months ended
February 28, 1998, the Company reported net income of $940,985, or 32 cents
per share, on sales of $11,539,443, versus net income of $333,933, or 23 cents
per share, on sales of $10,885,299 for the same period in fiscal 1997. The
aforementioned per share amounts are presented on a diluted basis with an
additional 1,605,499 shares outstanding in the second quarter of fiscal 1998
as compared to the corresponding quarter in the prior year.
Sales and net income for the quarter increased 12.8% and 233.7%,
respectively, over the second quarter of fiscal 1997. For the six months
ended February 28, 1998, sales and net income increased 6.0% and 181.8%,
respectively, over the same period in fiscal year 1997. "We are pleased with
the quarter's results," Riviera President Kenneth K. Rieth said. "We continue
to experience sales and earnings growth as the result of the automotive OEM's
commitment to reducing automobile model life cycles and their continued
practice of introducing fresh new models into the marketplace in efforts to
increase both unit sales and market share." Rieth indicated that earnings
should continue to improve in the second half of 1998 as compared to the same
period one year ago. "The Company's third and fourth quarters have
historically been our strongest reporting periods, and for fiscal year 1998,
the third and fourth quarter earnings will be significantly enhanced as the
result of the conversion of the outstanding 8% Cumulative Preferred Stock into
the Company's Common Stock. As previously announced, in October, 1997, the
Company issued and sold 80,000 shares of 8% Cumulative Convertible Preferred
Stock at $100.00 per share. With a portion of the proceeds from this sale,
the Company exercised its option to purchase and retire all 730,000 shares of
common stock held by Motor Wheel Corporation for $3.0 million or $4.11 per
share. The balance of the proceeds will be invested into additional
technology and capital equipment. On January 9, 1998, the Company registered
1,461,529 shares of Common Stock under the Securities Act of 1933. These
common shares were issuable upon conversion of its 8% Cumulative Convertible
Preferred Stock. On January 10, 1998, the Company sent notice to all holders
of the 8% Cumulative Convertible Preferred Stock that all such shares
outstanding, under the mandatory conversion provision, will be automatically
converted into Common Stock on or before February 11, 1998. By March 2, 1998
the Company has retired all 80,000 shares of its 8% Cumulative Convertible
Preferred Stock and converted such shares into 1,310,499 shares of registered
Common Stock. This conversion will reduce dividend expense by approximately
$640,000 annually (approximately $360,000 in fiscal 1998). As the result of
this conversion, Riviera now has 3,065,499 shares outstanding.
In the second quarter, the Company experienced strong gains in new orders.
During the period, the Company received approximately $8.0 million in new
order commitments. These tooling systems will be used in the manufacture of
internal and external body panels for vehicles produced by General Motors and
the Saturn Division of General Motors together with under body panels for a
vehicle to be produced by Mazda. These orders will be reflected into sales
and income over the next ten to twelve months.
Rieth indicated that the underlying performance of the second quarter was
significantly stronger than the corresponding period in 1997 given the fact
the Company incurred certain one time, non-reoccurring charges during this
period. During the quarter, the Company recorded other expense related to
late fees and interest charges is for the Company's 1995 and 1996 state income
taxes. These late charges and interest represent assessments for late
payments of these taxes during these periods. During the second quarter of
1998, the Company negotiated a settlement and paid such late fees and interest
totaling $110,686 or 3.6 cents per share on a diluted basis. These expenses
are a one time, non-reoccurring charge and the Company has no other such
issues outstanding.
Rieth further noted that for the six months ended February 28, 1998, the
Company incurred dividend expense of approximately $208,800 or 6.9 cents per
share. As previously discussed, the 8% Cumulative Preferred Stock has been
converted into the Company's Common Stock and as such, future dividend expense
related to those shares has been eliminated and is now a non-reoccurring
expense.
This release contains forward-looking statements related to future
financial results. Actual results may differ materially as a result of
factors over which the Company has no control. These risk factors and
additional information are included in the Company's reports on Form 10-K on
file with the Securities and Exchange Commission.
Riviera designs, develops and manufactures large-scale stamping die
systems used in the high-speed production of sheet metal parts and assemblies
for the automotive industry.
RIVIERA TOOL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months For The Six Months
Ended Ended
February 28, February 28,
1998 1997 1998 1997
SALES $6,095,638 $5,405,086 $11,539,443 $10,885,299
COST OF SALES 4,433,736 4,300,066 8,617,806 8,695,329
GROSS PROFIT 1,661,902 1,105,020 2,921,637 2,188,970
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 558,958 438,909 1,062,700 869,440
INCOME FROM
OPERATIONS 1,102,944 666,111 1,858,937 1,320,530
OTHER INCOME (EXPENSE)
Interest expense (129,560) (442,700) (261,390) (845,371)
Other expense (110,686) -- (109,192) --
Gain/(Loss) on
asset sales (40,900) 15,387 (18,634) 30,774
TOTAL OTHER
EXPENSE - NET (281,146) (427,313) (389,216) (814,597)
INCOME BEFORE TAXES
ON INCOME 821,798 238,798 1,469,721 505,933
INCOME TAXES 295,849 81,191 528,735 172,000
NET INCOME 525,949 157,607 940,986 333,933
DIVIDENDS AND ACCRETION ON
PREFERRED STOCK 117,736 1,868 201,815 6,480
NET INCOME AVAILABLE FOR COMMON
SHARES $408,213 $155,739 $739,171 $327,453
BASIC EARNINGS PER
COMMON SHARE $.20 $.11 $.36 $.22
COMMON SHARES
OUTSTANDING 2,017,086 1,460,000 2,042,320 1,460,000
DILUTED EARNINGS PER
COMMON SHARE $.17 $.11 $.32 $.23
COMMON SHARES
OUTSTANDING 3,065,499 1,460,000 2,909,423 1,460,000
RIVIERA TOOL COMPANY
FINANCIAL STATEMENTS
BALANCE SHEET
February 28, August 31,
ASSETS 1998 1997
CURRENT ASSETS (unaudited) (audited)
Cash $ -- $ --
Accounts Receivable:
Trade 4,342,448 4,614,257
Related Party -- 201,286
Costs and estimated gross profit
in excess of billings on
contracts in process 10,629,096 7,138,358
Inventories 468,740 468,740
Prepaid expenses and other
current assets 395,223 267,554
Total current assets 15,835,507 12,690,195
PROPERTY, PLANT AND EQUIPMENT
NET 11,152,030 9,640,330
PERISHABLE TOOLING 467,450 572,585
OTHER ASSETS 94,831 187,843
Total assets $27,549,818 $23,090,953
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of
long-term debt $650,000 $650,000
Accounts payable 1,292,575 1,241,243
Accrued liabilities 405,342 634,924
Total current liabilities 2,347,917 2,526,167
LONG-TERM DEBT 6,684,810 7,202,393
ACCRUED LEASE EXPENSE 624,350 605,660
DEFERRED TAX LIABILITY 1,463,135 934,400
STOCKHOLDERS' EQUITY:
Preferred Stock -- --
Common stock 13,408,272 9,539,879
Retained earnings 3,021,334 2,282,454
Total stockholders' equity 16,429,606 11,822,333
Total liabilities and
stockholders' equity $27,549,818 $23,090,953
SOURCE Riviera Tool Company