Riviera Tool Company Reports Third-Quarter Results
11 July 2000
Riviera Tool Company Reports Third-Quarter Results
GRAND RAPIDS, Mich. - Riviera Tool Company today reported results for the
third-quarter and nine-month period ended May 31, 2000.
The Grand Rapids, Michigan-based designer and manufacturer of stamping die
systems reported that sales increased 3.6 percent to $6.67 million during the
third quarter of 2000, up from $6.44 million earned during the same period in
fiscal 1999. The Company reported net income of $369,388 or $0.11 per diluted
share, during the third quarter of 2000, compared with income of $805,396, or
$0.24 per diluted share, during the same period in 1999.
Sales were also up for the nine months ended May 31, growing 3.7 percent
to $17.71 million compared with $17.07 million during the same period in
fiscal 1999. Riviera Tool reported income of $59,918, or $0.02 per diluted
share, during the first nine months of 2000, compared with income of $2.02
million, or $0.61 per diluted share, during the first nine months of 1999.
"While Riviera has made substantial progress positioning our operations
for the future with our recent capital expansion, we have not yet realized our
full potential in this area," said Kenneth K. Rieth, president and chief
executive officer. "Riviera has been aggressively marketing its new
capabilities to our customers, and we believe substantial growth opportunities
exist, particularly as we move into the next several quarters.
"We look forward to adding new contracts for larger, more complex stamping
die systems in order to utilize our capacity to its fullest and to increase
our bottom-line profits."
Riviera reported that selling, general and administrative (SG&A expenses)
decreased on a quarter-over-quarter basis, falling from 8.5 percent of sales
in the third quarter of 1999 to 6.8 percent of sales in the just-completed
third quarter. The Company attributed the decrease to its focus on managing
costs, as well as on lower professional and legal expenses, tax obligations
and insurance premiums.
Gross profit as a percentage of sales was also lower during the quarter
due to increases in Riviera's direct costs, including labor and overhead.
Peter Canepa, chief financial officer for Riviera, said the higher labor costs
were necessary in order to process the Company's current backlog of work. He
attributed the higher overhead to additional expenses from Riviera's recently
completed expansion that has positioned the Company to produce die systems for
the largest and most complex portions of any vehicle - a capability it shares
with few other tool and die manufacturers.
"As with any capital expansion project, there is a delay between adding
capacity and booking orders to fill that capacity," Canepa said. "We have
laid the groundwork necessary to capture larger contracts on a global basis.
The continued strength of the automotive market, coupled with the industry's
increased efforts to outsource, puts Riviera in an excellent position to
increase both sales and profitability over the next several quarters."
Riviera Tool Co. (http://www.rivieratool.com ) 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 under the symbol "RTC" on the
American Stock Exchange.
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 TOOL COMPANY
FINANCIAL STATEMENTS
BALANCE SHEETS
ASSETS May 31, 2000 August 31, 1999
CURRENT ASSETS (unaudited) (audited)
Cash $16,324 $113,183
Accounts receivable 8,108,231 6,821,519
Costs and estimated gross profit
in excess of billings on contracts
in process 6,648,587 7,829,744
Inventories 416,167 451,167
Prepaid expenses and other
current assets 164,001 84,189
Total current assets 15,353,310 15,299,802
PROPERTY, PLANT AND EQUIPMENT, NET 17,775,828 17,941,659
PERISHABLE TOOLING 612,044 550,634
OTHER ASSETS 210,770 135,770
Total assets $33,951,952 $33,927,865
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $1,983,964 $1,889,415
Accounts payable 1,321,299 1,398,483
Accrued liabilities 363,258 1,030,984
Total Current liabilities 3,668,521 4,318,882
LONG-TERM DEBT 10,190,733 9,239,636
DEFERRED TAX LIABILITY 1,035,698 1,386,278
ACCRUED LEASE EXPENSE 685,087 671,073
Total liabilities 15,580,039 15,615,869
PREFERRED STOCK -- no par value,
$100 mandatory redemption value:
Authorized -- 5,000 shares
Issued and outstanding -- None - -
STOCKHOLDERS' EQUITY:
Preferred Stock -- no par value,
Authorized -- 200,000 shares
Issued and outstanding -- None - -
Common stock -- No par value:
Authorized -- 9,785,575 shares
Issued and outstanding -- 3,379,609 shares at
May 31, 2000 and 3,218,744 shares at
August 31, 1999 15,115,466 14,512,185
Retained earnings 3,256,447 3,799,811
Total stockholders' equity 18,371,913 18,311,996
Total liabilities and
stockholders' equity $33,951,952 $33,927,865
RIVIERA TOOL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months Ended For The Nine Months Ended
May 31, 2000 May 31, 1999 May 31, 2000 May 31, 1999
SALES $6,674,923 $6,444,605 $17,705,544 $17,072,689
COST OF SALES 5,364,041 4,505,297 15,170,645 12,160,458
GROSS PROFIT 1,310,882 1,939,308 2,534,899 4,912,231
SELLING AND
ADMINISTRATIVE
EXPENSES 457,895 550,190 1,690,828 1,536,508
INCOME FROM
OPERATIONS 852,987 1,389,118 844,071 3,375,723
OTHER INCOME/(EXPENSE)
Interest
expense (248,591) (35,078) (656,677) (267,480)
Other expense 13,211 (433) 12,009 6,009
Gain (Loss) on
asset
disposals (50,201) - (100,892) -
TOTAL OTHER
EXPENSE --
NET (285,581) (35,511) (745,560) (261,471)
INCOME BEFORE TAXES
ON INCOME 567,406 1,353,607 98,511 3,114,252
INCOME TAX
EXPENSE 198,018 548,211 38,593 1,095,856
NET INCOME
AVAILABLE FOR
COMMON SHARES $369,388 $805,396 $59,918 $2,018,396
BASIC AND DILUTED
EARNINGS PER
COMMON SHARE $.11 $.24 $.02 $.61
BASIC AND DILUTED
COMMON SHARES
OUTSTANDING 3,289,454 3,289,454 3,289,454 3,289,454
RIVIERA TOOL COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended
May 31, 2000 May 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $59,918 $2,018,396
Adjustments to reconcile net
income to net cash from operating
activities:
Depreciation and amortization 1,418,927 856,916
Loss (Gain) on disposal of assets 100,893
Deferred taxes (350,580) 948,553
(Increase) decrease in assets:
Accounts receivable (1,286,712) (5,031,199)
Costs and estimated gross
profit in excess of billings
on contracts in process 1,181,157 1,048,463
Inventory 35,000 112,500
Perishable tooling (61,410) 129,002
Prepaid expenses and other
current assets (79,812) 52,800
Increase (decrease) in
liabilities:
Accounts payable (77,182) 1,814,255
Accrued lease expense 14,013 21,025
Accrued liabilities (667,730) 544,762
Net Cash provided by operating
activities $286,482 $2,515,473
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant
and equipment (1,362,487) (5,565,768)
Decrease (increase) in other assets (75,000) -
Proceeds from sale of assets 8,500 -
Net cash used in investing activity $(1,428,987) $(5,565,768)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from revolving credit line 2,439,070 1,183,467
Principal(payments)/proceeds
from long-term Debt (1,393,424) 1,862,622
Net cash provided by financing
activities $1,045,646 $3,046,089
NET DECREASE IN CASH $(96,859) $(4,206)
CASH -- Beginning of Period 113,183 4,206
CASH -- End of Period $16,324 $-