Riviera Tool Company Reports Record Sales and Earnings in Fiscal 1999
5 November 1999
Riviera Tool Company Reports Record Sales and Earnings in Fiscal 1999
GRAND RAPIDS, Mich., Nov. 4 -- Riviera Tool Company
(Amex: RTC) today posted record sales and solid operating results in the
fourth quarter of fiscal 1999 to finish a third straight year of record
results.
The Grand Rapids, Mich.-based designer and manufacturer of stamping die
systems for the automotive industry reported sales rose 38 percent to $5.7
million for the quarter ending August 31. Fourth-quarter 1999 earnings were
$412,614, or $0.13 per diluted share, compared with $749,898, or $0.24 per
diluted share, during the same period in 1998. The 1999 results include an
adjustment of $0.22 per share related to the Company's more conservative
estimation of revenues on its long-term contracts. The revenues related to
this adjustment will be reflected in fiscal 2000.
Despite the fourth-quarter adjustment, Riviera Tool reported record sales
and earnings in fiscal 1999. Net income available for common shares rose 10.3
percent to $2.4 million, or $0.76 per diluted share, on net sales of $22.8
million in fiscal 1999, compared with net income available for common shares
of $2.2 million, or $0.76 per diluted share, on net sales of $22.6 million in
1998.
During fiscal 1999, Riviera Tool completed the bulk of its three-year,
$10.6 million capital expansion program that will allow the Company to compete
for the largest and most complex die systems used by the automotive industry.
The Company invested $6.4 million in capital expenditures during 1999 to
install high-speed machining centers, large-scale tryout presses and state-of-
the-art computer technology to expand its capabilities.
"I am pleased with our performance and results in fiscal 1999," said
Kenneth K. Rieth, president and chief executive officer. "Despite the
disruptions to our workforce caused by this capital expansion, Riviera Tool
managed to improve productivity and quality levels as well as our bottom line.
More importantly, the technological improvements we've made have given Riviera
room to grow and the ability to capture more automotive business on a global
scale."
Gross margin increased to 25.7 percent in fiscal 1999, compared with 24.7
percent in fiscal 1998, reflecting improved productivity and expanded
capabilities. Riviera said capital expansion improvements allowed the Company
to recapture some of the machining projects and related expenses it had
previously outsourced, in addition to other improved efficiencies.
Rieth said the Big Three and other automakers appear to be preparing to
release orders for the tooling and dies they will need for the 2002 model
year. Riviera expects to compete for new business from General Motors Corp.,
BMW AG and DaimlerChrysler AG.
"The groundwork we have laid with this capital expansion means Riviera
will be able to compete successfully for larger and more lucrative portions of
these vehicle platforms," Rieth explained. "Part of our capturing these
contracts lies in telling our story to the automakers, the automotive media
and Wall Street. We have retained the services of Lambert, Edwards &
Associates, Inc. as our public and investor relations counsel to help us
communicate more effectively with these key audiences."
Commenting on Riviera's financial results, Chief Financial Officer Peter
C. Canepa said: "Cash flow from operations improved to $4.2 million in fiscal
1999, compared with negative cash flow of $20,022 in 1998, reflecting
increased billings and higher levels of depreciation and amortization. Our
balance sheet continues to be a source of strength and is enabling us to
invest in the personnel, sales and marketing resources to begin filling our
expanded capacity."
Riviera Tool Co. (http://www.rivieratool.com ) designs, develops and
manufacturers 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 DaimlerChrysler, GM, 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
Balance Sheets
August 31
ASSETS 1998 1999
Current Assets
Cash $4,206 $113,183
Accounts receivable 1,609,272 6,821,519
Costs and estimated gross profit in excess
of billings on contracts in process 11,299,961 7,829,744
Inventories 405,566 451,167
Prepaid expenses and other current assets 172,054 84,189
Total current assets 13,491,059 15,299,802
Property, Plant and Equipment, net 13,237,501 17,941,659
Perishable Tooling 743,966 550,634
Other Assets 223,869 135,770
Total assets $27,696,395 $33,927,865
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $876,555 $1,889,415
Accounts payable 1,113,113 1,398,483
Accrued liabilities 204,682 1,030,984
Total current liabilities 2,194,350 4,318,882
Long-Term Debt, net of current portion 8,196,641 9,239,636
Accrued Lease Expense 643,040 671,073
Deferred Tax Liability 780,376 1,386,278
Preferred Stock - no par value,
$100 mandatory redemption value:
Authorized - 5,000 shares
Issued and outstanding - no shares - -
Preferred Stock - no par value,
Authorized - 200,000 shares
Issued and outstanding - no shares - -
Common Stockholders' Equity
Common stock - No par value,
Authorized - 9,798,575 shares
Issued and outstanding - 3,065,499 at August 31,
1998 and 3,218,744 at August 31,1999 13,496,937 14,512,185
Retained earnings 2,385,051 3,799,811
Total Common Stockholders' equity 15,881,988 18,311,996
Total liabilities and stockholders' equity $27,696,395 $33,927,865
Riviera Tool Company
Statements of Income
Year Ended August 31
1997 1998 1999
Sales
Trade $21,108,195 $22,203,755 $22,820,998
Related party 851,979 377,433 -
Total Sales 21,960,174 22,581,188 22,820,998
Cost of Sales 16,831,905 17,096,967 16,946,076
Gross Profit 5,128,269 5,484,221 5,874,922
Selling and Administrative
Expenses 1,703,884 1,663,340 2,019,195
Income From Operations 3,424,385 3,820,881 3,855,727
Other Income (Expense):
Interest expense (1,211,287) (244,231) (343,484)
Other (406,368) (101,871) 166,316
Gain/(Loss) on asset sales 44,651 (29,698) 3,273
Total Other Expense - Net (1,573,004) (375,800) (173,895)
Income - Before taxes on income 1,851,381 3,445,081 3,681,832
Income Tax Expense 666,600 1,039,976 1,251,824
Net Income 1,184,781 2,405,105 2,430,008
Dividends and Accretion on Preferred
Stock 7,228 202,108 -
Net Income Available for Common
Shares $1,177,553 $2,202,997 $2,430,008
Basic Earnings Per Common Share $.57 $.82 $.76
Basic Common Shares Outstanding 2,067,188 2,686,176 3,218,744
Diluted Earnings Per Common Share $.57 $.76 $.76
Diluted Common Shares Outstanding 2,064,803 3,137,535 3,218,744
Riviera Tool Company
Statements of Cash Flows
Year Ended August 31
1997 1998 1999
Cash Flows from Operating Activities
Net income $1,184,781 $2,405,105 $2,430,008
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation and amortization 1,298,200 1,291,611 1,578,557
(Gain) Loss on sale of machinery and
equipment 16,889 26,717 (3,273)
Amortization of deferred gain (61,540) - -
Deferred taxes 538,700 927,976 605,902
Bad debt expense (75,000) (100,000) -
Decrease (Increase) in assets:
Accounts receivable 528,654 3,306,271 (5,212,247)
Costs and estimated gross profit in
excess of billings on contracts in
process (1,588,535) (7,344,003) 3,470,217
Inventories (23,267) 63,174 (45,601)
Perishable Tooling 186,673 (171,381) 193,332
Prepaid expenses and other current
assets (17,344) 95,500 87,865
Increase (decrease) in liabilities:
Accounts payable (1,672,635) (128,130) 285,370
Accrued lease expense 46,725 37,380 28,033
Accrued liabilities (57,347) (430,242) 826,302
Net cash provided by (used in) operating
activities 304,954 (20,022) 4,244,465
Cash Flows from Investing Activities
Proceeds from sale of property, plant and
equipment 25,200 1,084,356 102,650
(Increase) decrease in other assets 278,589 (76,919) 109,000
Purchases of property, plant and
equipment (792,580) (5,958,962) (6,402,994)
Net cash used in investing
activities (488,791) (4,951,525) (6,191,344)
Cash Flows from Financing Activities
Net proceeds from (repayments of) revolving credit
line (10,241,503) - (1,830,380)
Principal payments under capital lease
obligations (528,030) - -
Proceeds from issuance of long-term
debt 9,904,848 2,718,655 4,925,128
Principal payments on long-term
debt (3,862,305) (1,497,852) (1,038,892)
Redemption of Preferred Stock (142,500) - -
Sale of Common Stock 5,147,127 - -
Sale of convertible preferred stock - 6,957,058 -
Redemption of common stock - (3,000,000) -
Common Stock cash dividends paid (90,000) - -
Preferred Stock cash dividends paid (3,800) (202,108) -
Net cash provided by financing
activities 183,837 4,975,753 2,055,856
Net Increase in Cash - 4,206 108,977
Cash - Beginning of Period - - 4,206
Cash - End of Period $- $4,206 $113,183
Other Cash Flow Items:
Interest paid $1,253,563 $557,334 $924,331
Income taxes paid 1,871 429,583 252,490