Riviera Tool Company Reports First-Quarter Results
15 January 2001
Riviera Tool Company Reports First-Quarter Results
GRAND RAPIDS, Mich., Jan. 15 Riviera Tool Company
(Amex: RTC) today posted results for the first quarter of fiscal 2000.
The Grand Rapids, Mich.-based designer and manufacturer of stamping die
systems reported a net loss of $332,080, or $0.10 per share, on sales of
$4.6 million for the quarter ended Nov. 30, 2000, compared with net earnings
of $354,215, or $0.10 per share, on sales of $5.9 million for the quarter
ended Nov. 30, 1999.
Riviera Tool attributed the 21 percent decline in sales to decreased
orders from its automotive OEMs.
"Although quoting activity has been substantial during the just-completed
quarter, the automakers have been hesitant to release contracts for new
models," said Kenneth K. Rieth, president and chief executive officer of
Riviera Tool. "These delays have made it difficult for Riviera and others to
secure additional contracts over the past six months, and that has hurt our
entire industry. Our results, along with those of other tooling
manufacturers, have been negatively affected by this situation.
"The global automotive industry is moving to streamline production and
introduce new models in an effort to jumpstart consumer demand, which has
begun to soften. Based upon the level of quoting activity we have been asked
to do, we expect orders will be released soon. But it is a question of
timing, and we are concerned that continued delays could affect our results in
the coming quarters."
Riviera instituted a program of cost containment during the quarter to
minimize the effects of the delayed orders, including salary reductions for
all white-collar workers.
Gross profit as a percentage of sales declined during the first quarter,
reflecting a decrease in revenue as well as an increase in manufacturing
overhead. Manufacturing overhead expense rose during the quarter, due to an
increase in supervision salaries, perishable tooling, machinery repairs and
other factors. Although direct costs and engineering expense decreased from
$2.7 million during the first quarter of 1999 to $2.2 million in the first
quarter of 2000.
Selling and administrative expenses increased from $454,000 during the
first quarter of fiscal 2000 to $528,000 during the first quarter of 2001.
The Company attributed the increase to higher legal and professional expenses.
"We are taking the necessary steps to control costs as we continue to
aggressively seek out and bid on new contracts," Rieth said. "While we are
not pleased with our first-quarter results, we believe the increased quoting
activity signals the imminent release of new work.
"The capabilities and capacity we added during our recent expansion have
positioned Riviera to capture larger and more complex stamping die systems as
they are released by the automakers. We look forward to returning to more
historic levels of backlog."
During the first quarter of 2001, Riviera reduced its long-term debt by
about $615,000. The Company's cash flow from operations was $786,022 for the
just-completed quarter, compared with $880,000 for the same period in the
first quarter in fiscal 2000.
"While industry conditions are not favorable, the strength of our balance
sheet and ability to generate cash for operations has put us in a better
position to weather the current market than many of our peers in the
industry," said Peter Canepa, chief financial officer.
RIVIERA TOOL COMPANY
FINANCIAL STATEMENTS
BALANCE SHEETS
November 30, August 31,
ASSETS 2000 2000
CURRENT ASSETS (unaudited)
Cash $33,134 $113,699
Accounts receivable 6,535,585 7,052,169
Costs and estimated gross profit in excess
of billings on contracts in process 7,532,968 8,564,651
Inventories 306,675 306,675
Federal income tax refundable 673,897 673,897
Prepaid expenses and other current assets 181,633 170,170
Total current assets 15,263,892 16,881,261
PROPERTY, PLANT AND EQUIPMENT, NET 17,219,472 17,445,289
PERISHABLE TOOLING 588,088 538,743
OTHER ASSETS 210,770 210,770
Total assets $33,282,222 $35,076,063
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $1,983,964 $1,983,964
Accounts payable 815,138 1,410,834
Accrued liabilities 355,852 434,689
Total Current liabilities 3,154,954 3,829,487
LONG-TERM DEBT 9,687,005 10,303,197
DEFERRED TAX LIABILITY 1,366,742 1,538,000
ACCRUED LEASE EXPENSE 690,343 689,758
Total liabilities 14,899,044 16,360,442
PREFERRED STOCK - no par value,
$100 mandatory redemption value:
Authorized - 5,000 shares
Issued and outstanding - no shares - -
STOCKHOLDERS' EQUITY:
Preferred stock - no par value,
Authorized - 200,000 shares
Issued and outstanding - no shares - -
Common stock - No par value:
Authorized - 9,785,575 shares
Issued and outstanding - 3,379,609 shares at
November 30, 2000 and August 31, 2000 15,115,466 15,115,466
Retained earnings 3,267,712 3,600,155
Total stockholders' equity 18,383,178 18,715,621
Total liabilities and stockholders'
equity
$33,282,222 $35,076,063
RIVIERA TOOL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months Ended
November 30
2000 1999
SALES $4,591,897 $5,855,021
COST OF SALES 4,326,424 4,658,033
GROSS PROFIT 265,473 1,196,988
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 528,303 454,489
(Loss)/INCOME FROM OPERATIONS (262,830) 742,499
OTHER (EXPENSE)/ INCOME
Interest expense (240,689) (205,809)
Other income 181 -
TOTAL OTHER EXPENSE (240,508) (205,809)
(LOSS)/INCOME BEFORE TAXES ON INCOME (503,338) 536,690
INCOME TAX (BENEFIT)/EXPENSE (171,258) 182,475
NET (LOSS)/INCOME AVAILABLE FOR COMMON
SHARES $(332,080) $354,215
BASIC (LOSS)/EARNINGS PER COMMON SHARE $(.10) $.10
BASIC COMMON SHARES OUTSTANDING 3,379,609 3,379,609
DILUTED (LOSS)/EARNINGS PER COMMON SHARE $(.10) $.10
DILUTED COMMON SHARES OUTSTANDING 3,379,609 3,379,609
RIVIERA TOOL COMPANY
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
November 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss) $(332,080) $354,215
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 476,211 472,766
Deferred taxes (171,258) 182,475
(Increase) decrease in assets:
Accounts receivable 516,584 588,646
Costs and estimated gross profit in
excess of billings on contracts in
process 1,031,683 59,626
Perishable tooling (49,345) (32,256)
Prepaid expenses and other current
assets (11,463) (128,627)
Increase (decrease) in liabilities:
Accounts payable (595,696) (131,727)
Accrued lease expense 585 4,671
Accrued liabilities (78,837) (489,704)
Net cash provided by operating activities $786,022 $880,085
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (250,395) (418,422)
Net cash used in investing activity $(250,395) $(418,422)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on revolving credit line (120,202) (30,710)
Principal payments on long-term debt (495,990) (383,229)
Net cash used in financing activities $(616,192) $(413,939)
NET INCREASE/(DECREASE) IN CASH $(80,565) $47,724
CASH - Beginning of Period 113,699 113,183
CASH - End of Period $33,134 $160,907