RTC Accelerated Return Bear Market Notes Linked TO The Russell 3000 Index

GRAND RAPIDS, Mich., Jan. 17 /PRNewswire-FirstCall/ -- Riviera Tool Co. (AMEX:RTC) today reported financial results for the first quarter ended November 30, 2005. The Grand Rapids, Mich. designer and manufacturer of stamping die systems reported net sales of $6.1 million for the first quarter of 2006, compared with net sales of $4.6 million for first quarter of 2005, an increase of 33%. This increase was a result of the Company having higher levels of contract backlog at the end of fiscal 2005 as compared to fiscal 2004. The Company's backlog as of August 31, 2005 was $13.7 million as compared to $2.5 million in 2004 and $12.9 million as of November 30, 2005 as compared to $4.6 million as of November 30, 2004, an increase of 180%. Riviera reported a net loss of $441,000, or $0.11 per diluted share, for first quarter 2006, as compared to a loss of $465,000, or $.12 per share, for the same period in fiscal 2005. For the first quarter of 2006 the Company reported operating income of $30,000 as compared to an operating loss of $65,000 for the first quarter of 2005. In addition, the Company reported that it was awarded several substantial new contracts throughout the first quarter and the month of December totaling approximately $8.4 million. "The first quarter appears to be a watershed reporting period for the Company," said Kenneth K. Rieth, president and chief executive officer of Riviera Tool. "We entered fiscal year 2006 with a stronger backlog than the previous year and a significant number of these new programs were released for production toward the end of the quarter. As such, contribution margins will increase significantly in the next several quarters." Responding to increased production requirements, Riviera further reported hiring 10 additional people since the beginning of the first quarter. According to Peter Canepa, the Company's chief financial officer, "We are pleased with the progress being made related to the direct cost of production which has improved approximately 30% over the past 18 months. During this period, 95% of our contracts completed contributed positively to profit margins. However, as a result of our low contract backlog level entering into fiscal 2005 it was difficult to produce the sales volumes necessary to achieve year-end profitability." He further indicated, "We remain extremely focused on increasing revenue and lowering costs to produce a foundation for sustainable long-term profitability." About Riviera Tool Riviera Tool Co. (http://www.rivieratool.com/ ) designs, develops and manufactures 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 BMW, Nissan, DaimlerChrysler, General Motors Corp., 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 FINANCIAL STATEMENTS BALANCE SHEETS ASSETS November 30, August 31, 2005 2005 CURRENT ASSETS (unaudited) Cash $277,685 $239,475 Accounts receivable, net 7,631,090 5,232,138 Costs in excess of billings on contracts in process 1,715,883 2,844,444 Inventories 236,437 236,437 Prepaid expenses and other current assets 382,183 453,597 Total current assets 10,243,278 9,006,091 PROPERTY, PLANT AND EQUIPMENT, NET 10,533,810 10,902,845 PERISHABLE TOOLING 703,519 708,319 OTHER ASSETS 563,327 599,344 Total assets $22,043,934 $21,216,599 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $3,206,186 $3,287,510 Accounts payable 3,932,334 3,517,578 Accrued liabilities 670,069 661,833 Total current liabilities 7,808,589 7,466,921 LONG-TERM AND SUBORDINATED DEBT, NET OF UNAMORTIZED DISCOUNT 9,784,549 8,870,045 ACCRUED LEASE EXPENSE 910,398 897,885 Total liabilities 18,503,536 17,234,851 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 - 3,984,874 shares as of November 30 and August 31, 2005 17,130,483 17,130,483 Retained deficit (13,590,085) (13,148,735) Total stockholders' equity 3,540,398 3,981,748 Total liabilities and stockholders' equity $22,043,934 $21,216,599 RIVIERA TOOL COMPANY STATEMENTS OF OPERATIONS (UNAUDITED) For The Three Months Ended November 30 2005 2004 SALES $6,063,185 $4,552,551 COST OF SALES 5,467,385 4,038,460 GROSS PROFIT 595,800 514,091 SELLING AND ADMINISTRATIVE EXPENSES 565,577 579,341 PROFIT (LOSS) FROM OPERATIONS 30,223 (65,250) OTHER EXPENSE Interest expense 464,918 393,163 Other expense 6,655 6,227 TOTAL OTHER EXPENSE 471,573 399,390 LOSS BEFORE INCOME TAX EXPENSE (441,350) (464,640) INCOME TAX EXPENSE - - NET LOSS AVAILABLE FOR COMMON SHARES $(441,350) $(464,640) BASIC AND DILUTED INCOME/(LOSS) PER COMMON SHARE $(.11) $(.12) WEIGHTED-AVERAGE BASIC AND DILUTED COMMON SHARES OUTSTANDING 3,984,874 3,774,346 RIVIERA TOOL COMPANY STATEMENT OF CASH FLOWS (UNAUDITED) For the Three Months Ended November 30, 2005 2004 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(441,350) $(464,640) Adjustments to reconcile net loss to net cash from operating activities: Depreciation and amortization 419,890 427,701 (Increase) decrease in assets: Accounts receivable (2,398,952) 3,717,570 Costs in excess of billings on contracts in process 1,128,561 (806,568) Perishable tooling 4,800 (54,150) Prepaid expenses and other current assets 71,414 27,737 Increase (decrease) in liabilities: Accounts payable 414,756 (992,895) Accrued lease expense 12,513 23,292 Accrued liabilities 8,236 119,263 Net cash (used in) provided by operating activities $(780,132) $1,997,310 CASH FLOWS FROM INVESTING ACTIVITIES Increase (decrease) in other assets 36,017 (20,546) Additions to property, plant and equipment (28,105) (230,283) Net cash provided by (used in) investing activities $7,912 $(250,829) CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings (repayments) on revolving credit line 1,103,256 (747,696) Principal payments on notes payable to bank and non-revolving equipment line of credit (292,826) (162,468) Deferred interest - 45,912 Net cash provided by (used in) financing activities $810,430 $(864,252) NET INCREASE IN CASH $38,210 $882,229 CASH - Beginning of Period 239,475 1,200 CASH - End of Period $277,685 $883,429 First Call Analyst: FCMN Contact: DATASOURCE: Riviera Tool Co. CONTACT: Kenneth K. Rieth, CEO, or Peter C. Canepa, CFO, of Riviera Tool Company, +1-616-698-2100 Web site: http://www.rivieratool.com/

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