Riviera Tool Company Announces Third Quarter Results
24 June 1998
Riviera Tool Company Announces Third Quarter Results
GRAND RAPIDS, Mich., June 24 -- Grand Rapids, Michigan-based
Riviera Tool Company (Amex: RTC) today reported its operating results for the
three and nine months ended May 31, 1998. The Grand Rapids, Michigan-based
designer and manufacturer of stamping die systems, reported net income for the
three months ended May 31, 1998 of $712,791 or 23 cents per share, on sales of
$6,878,697, versus net income of $247,005, or 10 cents per share, on sales of
$5,000,864 for the third quarter ended May 31, 1997. Sales and net income for
the quarter increased 38% and 189%, respectively, over the third quarter of
1997. The aforementioned per share amounts are presented on a diluted basis
with an additional 595,499 shares outstanding in the third quarter of fiscal
1998, as compared to the corresponding quarter in the prior year.
For the nine months ended May 31, 1998, net income was $1,655,207 or 56
cents per share, on sales of $18,418,140, versus net income of $580,912, or 34
cents per share, on sales of $15,886,163 for the nine months ended May 31,
1997. Sales and net income for the nine months increased 16% and 185%,
respectively, over the same period in fiscal year 1997. The aforementioned
per share amounts are presented on a diluted basis with an additional
1,249,556 shares outstanding in fiscal 1998, as compared to the corresponding
period in the prior year.
"We are pleased with the revenue growth the Company has achieved this
year," Riviera President Kenneth K. Rieth said. "More importantly, we are
very pleased to have managed to increase our profit margins to further enhance
shareholder value," added Rieth.
In the third quarter, the Company experienced continued gains in new
orders. During this period, the Company received approximately $5.6 million
in new order commitments, including a $3.2 million international order. These
tooling systems will be used in the manufacture of sport utility vehicles and
passenger cars for both Chrysler Corporation and General Motors products
manufactured in Mexico. These orders will be reflected in sales and income
over the next ten to twelve months.
With respect to the current General Motors Corporation strike, a number of
auto parts and systems suppliers may feel the impact of such strike on their
current operations. However, given that Riviera has a diverse customer base
and that the Company is involved in long-term product development, it is
management's belief that the strike will not have a short-term or long-term
material effect on the Company.
Effective June 1, 1998, the Company negotiated lower interest rates with
its primary lender on its financing facilities. This agreement will lower the
Company's borrowing costs from prime rate (an effective rate of 8.50%) to a
hybrid of prime less one-quarter percent (an effective rate of 8.25%) and
Libor plus 2.25% (an effective rate of 7.94%).
The Company's $10.0 million capital expansion plan continues on schedule
and budget during the third quarter. This expansion will provide the Company
the opportunity to manufacture larger dies sets and improve the Company's
ability to provide these large die systems to its customers. Additionally,
the expansion and upgrade of the Company's machining capacity will increase
the facilities capacity while providing improvements in the Company's
operating margins.
This release contains forward-looking statements relating 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 report on Form 10-K on
file with the Securities and Exchange Commission.
Riviera designs, develops and manufactures custom large scale metal
stamping die systems used in the high speed production of sheet metal stamped
parts and assemblies for the automobile industry. Riviera's common stock
trades on the American Stock Exchange under the symbol "RTC."
RIVIERA TOOL COMPANY
FINANCIAL STATEMENTS
BALANCE SHEET
May 31, August 31,
ASSETS 1998 1997
CURRENT ASSETS (unaudited) (audited)
Cash $- $-
Accounts Receivable:
Trade 2,795,588 4,614,257
Related Party - 201,286
Costs and estimated gross profit in excess
of billings on contracts in process 13,649,649 7,138,358
Inventories 438,740 468,740
Prepaid expenses and other current assets 446,035 267,554
Total current assets 17,330,012 12,690,195
PROPERTY, PLANT AND EQUIPMENT, NET 11,438,257 9,640,330
PERISHABLE TOOLING 440,720 572,585
OTHER ASSETS 84,611 187,843
Total assets $29,293,600 $23,O90,953
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $650,000 $650,000
Accounts payable 1,157,127 1,241,243
Accrued liabilities 577,559 634,924
Total Current Liabilities 2,384,686 2,526,167
LONG-TERM DEBT 7,307,841 7,202,393
ACCRUED LEASE EXPENSE 633,695 605,660
DEFERRED TAX LIABILITY 1,759,885 934,400
STOCKHOLDERS' EQUITY:
Common stock - No par value:
Authorized - 9,785,575 shares
Issued and outstanding - and 3,065,499 shares
at May 31, 1998 and 2,485,000 shares at
August 31, 1997 13,471,937 9,539,879
Retained earnings 3,735,556 2,282,454
Total stockholders' equity 17,207,493 11,822,333
Total liabilities and stockholders' equity $29,293,600 $23,090,953
RIVIERA TOOL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months For The Nine Months
Ended Ended
May 31, May 31,
1998 1997 1998 1997
SALES $6,878,697 $5,000,864 $18,418,140 $15,886,163
COST OF SALES 5,032,429 3,915,605 13,650,235 12,610,934
GROSS PROFIT 1,846,268 1,085,259 4,767,905 3,275,229
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 548,837 354,947 1,611,537 1,224,387
INCOME FROM OPERATIONS 1,297,431 730,312 3,156,368 2,050,842
OTHER INCOME (EXPENSE)
Interest expense (182,175) (375,463) (443,565) (1,220,834)
Other expense(1) - - (110,686) -
Gain/(Loss) on asset sales (715) 15,387 (16,425) 46,161
TOTAL OTHER EXPENSE -
NET (182,890) (356,076) (570,676) (1,170,673)
INCOME BEFORE TAXES ON
INCOME 1,114,541 374,236 2,585,692 880,169
INCOME TAXES 401,750 127,231 930,485 299,257
NET INCOME 712,791 247,005 1,655,207 580,912
DIVIDENDS AND ACCRETION ON
PREFERRED STOCK - 2,952 201,815 9,432
NET INCOME AVAILABLE FOR COMMON
SHARES $712,791 $244,053 $1,453,392 $571,480
BASIC EARNINGS PER COMMON
SHARE $.23 $.10 $.61 $.33
COMMON SHARES OUTSTANDING 3,065,499 2,426,086 2,387,326 1,712,500
DILUTED EARNINGS PER COMMON
SHARE $.23 $.10 $.56 $.34
COMMON SHARES OUTSTANDING 3,065,499 2,426,086 2,962,056 1,712,500
(1) Amount represents a one-time, non-reoccurring charge incurred in the
second quarter of 1998.