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

GRAND RAPIDS, Mich., July 17 /PRNewswire-FirstCall/ -- Riviera Tool Co. (AMEX:RTC) today reported its financial results for the third quarter ended May 31, 2006. The Grand Rapids, Mich.-based designer and manufacturer of stamping die systems reported net sales increased 30 percent to $6.1 million for the third quarter of 2006 compared with net sales of $4.7 million for the third quarter of 2005. The Company attributed its increased sales to 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. During the third quarter, the Company received $3.7 million in new contracts bringing its contract backlog to $9.2 million as of May 31, 2006 compared with $11.0 million as of May 31, 2005. Subsequent to the third quarter, the Company was awarded new contracts totaling approximately $1.0 million. Riviera reported net income of $18,391 for the third quarter of 2006 compared with a loss of $775,816, for the same period in fiscal 2005. The Company reported operating income of $508,299 for the third quarter of 2006 compared with an operating loss of $79,655 for the third quarter of 2005. For the nine months ended May 31, 2006, Riviera reported net sales of $19.1 million compared with last year's net sales of $14.2 million, an increase of 35 percent. The Company posted a net loss of $557,764, or $0.13 per diluted share for the first nine months of fiscal 2006 versus a net loss of $1,668,293, or $0.44 per diluted share, for the same period last year. "The increased volumes in conjunction with maintaining costs have had a positive impact on operating margins during fiscal 2006," said Kenneth K. Rieth, president and chief executive officer of Riviera Tool. "We have managed to increase gross margins slightly as well as lowering general and administrative expenses from 14.8 percent of sales for the first nine months of 2005 to 9.6 percent for the same period in 2006. 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 CONDENSED BALANCE SHEETS ASSETS May 31, August 31, 2006 2005 CURRENT ASSETS (unaudited) (audited) Cash $18,900 $239,475 Accounts receivable, net 9,036,878 5,232,138 Costs in excess of billings on contracts in process 2,926,447 2,844,444 Inventories 236,437 236,437 Prepaid expenses and other current assets 391,587 453,597 Total current assets 12,610,249 9,006,091 PROPERTY, PLANT AND EQUIPMENT, NET 9,822,687 10,902,845 PERISHABLE TOOLING 610,016 708,319 OTHER ASSETS 463,986 599,344 Total assets $23,506,938 $21,216,599 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $3,436,496 $3,287,510 Accounts payable 4,492,764 3,517,578 Accrued liabilities 790,046 661,833 Total current liabilities 8,719,306 7,466,921 LONG-TERM AND SUBORDINATED DEBT, NET OF UNAMORTIZED DISCOUNT 10,242,865 8,870,045 ACCRUED LEASE EXPENSE 970,784 897,885 Total liabilities 19,932,955 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 - 4,257,601 shares and 3,984,874 shares as of May 31, 2006 and August 31, 2005, respectively 17,280,483 17,130,483 Retained deficit (13,706,500) (13,148,735) Total stockholders' equity 3,573,983 3,981,748 Total liabilities and stockholders' equity $23,506,938 $21,216,599 RIVIERA TOOL COMPANY CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) For The Three Months For The Nine Months Ended Ended May 31, May 31, May 31, May 31, 2006 2005 2006 2005 SALES $6,136,378 $4,687,278 $19,152,162 $14,220,838 COST OF SALES 4,957,607 4,106,830 16,410,546 12,297,177 GROSS PROFIT 1,178,771 580,448 2,741,616 1,923,661 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 670,472 660,103 1,834,002 2,106,934 INCOME/(LOSS) FROM OPERATIONS 508,299 (79,655) 907,614 (183,273) OTHER EXPENSE Interest expense 431,408 391,737 1,321,210 1,139,822 Other expense 58,500 304,424 144,168 345,198 TOTAL OTHER EXPENSE 489,908 696,161 1,465,378 1,485,020 INCOME/(LOSS) BEFORE INCOME TAXES 18,391 (775,816) (557,764) (1,668,293) INCOME TAXES - - - - NET INCOME/(LOSS) $18,391 $(775,816) $(557,764) $(1,668,293) BASIC AND DILUTED INCOME/(LOSS) PER COMMON SHARE $ - $(.20) $(.13) $(.44) WEIGHTED-AVERAGE BASIC AND DILUTED COMMON SHARES OUTSTANDING 4,257,601 3,807,527 4,152,706 3,785,569 RIVIERA TOOL COMPANY CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Three Months For the Nine Months Ended Ended May 31, May 31, May 31, May 31, 2006 2005 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES Net income/(loss) $18,390 $(775,816) $(557,764) $(1,668,293) Adjustments to reconcile net income/(loss) to net cash from operating activities: Depreciation and amortization 471,489 427,701 1,414,467 1,283,103 (Increase) decrease in assets: Accounts receivable (1,040,564) 311,319 (3,804,740) 10,458,316 Costs in excess of billings on contracts in process 70,156 (833,342) (82,003) (2,736,016) Perishable tooling 75,016 23,614 98,303 (7,426) Prepaid expenses and other current assets (21,365) 337,272 62,010 298,787 Increase (decrease) in liabilities: Accounts payable 486,046 (617,115) 975,186 (1,040,451) Accrued lease expense 47,873 23,292 72,899 69,876 Accrued liabilities (30,654) 67 128,213 326,353 Deferred compensation - - - (166,474) Net cash provided by/(used in) operating activities $76,387 $(1,103,008) $(1,693,429) $6,817,775 CASH FLOWS FROM INVESTING ACTIVITIES Decrease/(increase) in other assets 49,670 (55,163) 135,358 24,291 Deletions/(additions) to property, plant and equipment (55,260) (7,074) (111,262) (254,163) Net cash provided by/(used in) investing activities $(5,590) $(62,237) $24,096 $(229,872) CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings (repayments) on revolving credit line 69,750 - 2,395,523 - Proceeds from sale of common stock - 3,158 150,000 3,158 Deferred interest - (141,500) - (141,500) Principal payments on notes payable/overformula (375,327) - (1,090,912) (42,300) Proceeds from issuance of convertible debt - 3,200,000 - 3,200,000 Proceeds from issuance of convertible revolving note - 4,031,127 - 4,031,127 Proceeds from overformula note - 2,000,000 - 2,000,000 Debt issuance costs - (579,491) - (579,491) Repayments of bank revolving note - (2,595,878) - (9,849,532) Repayments of bank term debt - (1,589,777) - (1,835,100) Repayments of subordinated debt - (3,000,000) - (3,000,000) Decrease of capital lease (1,983) (1,984) (5,853) (5,853) Net cash provided by/(used in) financing activities $(446,124) $1,325,655 $1,448,758 $(6,219,491) NET INCREASE/(DECREASE) IN CASH $(375,327) $160,410 $(220,575) $368,412 CASH - Beginning of Period 394,227 209,202 239,475 1,200 CASH - End of Period $18,900 $369,612 $18,900 $369,612 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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