Riviera Tool Company Reports Sales For Q4 and Year-End
6 November 2000
Riviera Tool Company Reports Higher Sales For Fourth-Quarter and Year-End
GRAND RAPIDS, Mich., Nov. 6 Riviera Tool Company
(Amex: RTC) today reported results for the fourth quarter and year ended Aug.
31, 2000, led by higher sales.
The Grand Rapids, Michigan-based designer and manufacturer of stamping die
systems reported that sales increased 30 percent to $7.5 million during the
fourth quarter of fiscal 2000, up from $5.7 million during the same period in
fiscal 1999. Riviera reported net income of $343,708, or $0.11 per diluted
share, during the fiscal 2000 fourth quarter, compared with net income of
$412,614, or $0.12 per diluted share, during the year-ago period. Riviera
attributed the comparable earnings to increased overhead, higher direct labor
expenses and cost overruns on certain contracts that were completed during the
quarter.
For fiscal 2000, Riviera reported a sales increase of 10.4 percent to a
record $25.2 million, compared with sales of $22.8 million during fiscal 1999.
The Company reported net earnings of $403,625, or $0.12 per diluted share,
during fiscal 2000, compared with net earnings of $2.4 million, or $0.72 per
share, during fiscal 1999.
"While we are pleased to close fiscal 2000 with record sales, we are
disappointed that our earnings performance did not follow suit," said Kenneth
K. Rieth, president and CEO of Riviera Tool. "The Company has spent the past
few years positioning itself to compete for the automotive industry's largest
and most complex stamping die systems. While our sales increases demonstrate
some initial success in capturing new contracts, we have not achieved
acceptable earnings levels as a result of cost overruns on certain contracts.
"As we move into fiscal 2001, we will focus our efforts on returning our
bottom-line profitability to historic levels."
Riviera experienced a slowdown in quoting activity during the first part
of the fourth quarter, Rieth said. However, the Company experienced record
levels of quoting activity during August, September and October, which are
expected to result in new orders during the second quarter of fiscal 2001.
Rieth warned that the decrease in tooling demand, while temporary, could
dampen the Company's results during the first two quarters of fiscal 2001.
Riviera has instituted numerous cost containment measures to mitigate the
current softness in the marketplace.
"We are in the same position as other manufacturers of stamping die
systems throughout the industry as we wait for automakers to release new
programs," Rieth said. "We believe the increased quoting activity we have
experienced indicates that this will change during fiscal 2001."
Gross profit as a percentage of sales declined for fiscal 2000, reflecting
higher director labor costs, increased freight expenses and higher
manufacturing overhead. Peter Canepa, chief financial officer for Riviera,
attributed the higher labor costs to increased overtime and additional
associates hired to fulfill the Company's backlog of orders.
"We are working aggressively to better manage our costs, both direct labor
as well as operating expenses," Canepa said. "We are also stepping up our
sales efforts to ensure that automakers know about our expanded capabilities."
Selling, general and administrative (SG&A) expense as a percent of sales
decreased to 8.5 percent in fiscal 2000, down from 8.8 percent in fiscal 1999.
Increased sales and lower administrative expenses helped offset higher sales-
related salaries and an increase in the Michigan Single Business tax.
"The disconnect between our top and bottom lines has, to large degree,
been a timing issue," Canepa explained. "We have added capacity and expanded
our capabilities so that we can handle larger and more complex contracts from
global automakers. The timing difference between our preparations and the
release of those programs has created short-term pressure on our earnings.
"The global automotive market remains strong, as evidenced by the quoting
activity we have already seen during fiscal 2001. Riviera is well positioned
to increase both sales and profitability by capturing these new stamping die
programs as they are released."
Riviera Tool Company
Statement of Income
Fourth Quarter Year Ended August 31
1999 2000 1999 2000
Net Sales $5,748,309 $7,481,783 $22,820,998 $25,187,327
Cost of Sales 4,785,618 6,222,466 16,946,076 21,393,111
Gross Profit 962,691 1,259,317 5,874,922 3,794,216
Selling, General &
Administrative
Expenses 482,687 448,517 2,019,195 2,139,346
Income from
Operations 480,004 810,800 3,855,727 1,654,870
Other Income (Expense)
Interest Expense (76,004) (232,901) (343,484) (889,578)
Other 163,581 (30,787) 166,316 10,733
Gain (Loss) on
Asset Sales 3,273 (130,400)
Total Other
Expense, Net 87,577 (263,688) (173,895) (1,009,245)
Earnings before
Equity Investment &
Taxes 567,581 547,112 3,681,832 645,625
Income Tax Expense 154,967 203,404 1,251,824 242,000
Net Earnings (Loss) $412,614 $343,708 $2,430,008 $403,625
Basic Earnings
Per Share $0.12 $0.11 $0.72 $0.12
Weighted Average
Shares
Outstanding 3,379,621 3,379,681 3,379,681 3,379,609
Riviera Tool Company
Balance Sheets
ASSETS 1999 2000
Current Assets
Cash $113,183 $113,699
Accounts receivable 6,821,519 7,052,169
Costs and estimated gross
profit in excess of billings
on contracts in process 7,829,744 8,564,651
Inventories 451,167 306,675
Federal income tax refundable --- 673,897
Prepaid expenses and other
current assets 84,189 170,170
Total current assets 15,299,802 16,881,261
Property, plant and equipment, net 17,941,659 17,445,289
Perishable tooling 550,634 538,743
Other assets 135,770 210,770
Total assets $33,927,865 $35,076,063
LIABILITIES AND STOCKHOLDERS' EQUITY 1999 2000
Current Liabilities
Current portion of long-term debt $1,889,415 $1,983,964
Accounts payable 1,398,483 1,410,834
Accrued liabilities 1,030,984 434,689
Total current liabilities 4,318,882 3,829,487
Long-term debt, net of current portion 9,239,636 10,303,197
Accrued lease expense 671,073 689,758
Deferred tax liability 1,386,278 1,538,000
Total liabilities $15,615,869 $16,360,442
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 -
3,218,744 at August 31,1999
and 3,379,609 at August 31,2000 14,512,185 15,115,466
Retained earnings 3,799,811 3,600,155
Total common
stockholders' equity 18,311,996 18,715,621
Total liabilities and
stockholders' equity $33,927,865 $35,076,063