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Riviera Tool Reports Second Quarter Results GRAND RAPIDS, Mich., April 14 /PRNewswire-FirstCall/ -- Riviera Tool Co. today announced sales and net income for the second quarter and six months ended February 29, 2004. The Grand Rapids, Mich.-based designer and manufacturer of stamping die systems reported net income of $212,083, or $0.06 per diluted share, on net sales of $8.3 million for the second quarter of fiscal 2004, compared with net income of $231,348, or $0.07 per diluted share, on net sales of $8.3 million for the same period of fiscal 2003. For the six months ended February 29, 2004, Riviera reported net sales of $16.6 million, a nearly 34 percent increase over last year's net sales of $12.6 million. The Company posted sharply higher earnings of $450,012, or $0.13 per diluted share, for the first six months of fiscal 2004, versus $42,434, or $0.01 per diluted share, for the same period last year. The Company attributed its increased year-to-date sales and earnings to tooling programs for the Mercedes Benz M Class sports utility vehicle and a new crossover vehicle, which were secured during fiscal 2003, along with related engineering and die management services. Riviera reported that its contract backlog was $16.6 million on February 29, 2004, including new orders of $3.6 million secured during the first and second quarters. Riviera noted that its flat sales and new orders in the quarter reflect the timing of new potential contracts. Although the market for tooling systems appears sluggish with limited contracts being awarded during the first and second quarters of 2004, the Company remains optimistic that tooling contracts releases should increase during the latter part of the third quarter through the fourth quarter of fiscal 2004. "The contracts we secured last year continue to yield strong revenues and a solid backlog, at the same time, we continue to quote on new contracts to fuel our growth," said Kenneth K. Rieth, president and chief executive officer of Riviera Tool. "While we continue to be bullish on opportunities for Rivera Tool, there is still some softness in the overall domestic tooling industry. However, based on positive reports from the spring auto shows and the current quoting activities we anticipate that the market should significantly improve during the latter half of 2004." As reported in March 2004, the Company raised $1.5 million in additional capital through the sale of 394,737 shares of its common stock in a private placement to several institutional and accredited investors. Riviera also granted warrants for the investors to purchase additional stock, which would generate additional capital for the Company. The Company said the capital raised will be used for general working capital purposes. For the first six months of 2004, Rivera reported that it has improved its financial performance in a number of areas, including: * Gross margin: The Company reported its gross margin was 10.2 percent for the first six months of 2004, up from 9.2 percent for the same period last year. Gross margins for the second quarter decreased slightly to 10.1 percent versus 10.5 percent for the same period last year due to efforts by the Company to meet delivery dates and engineering changes for customers. * Improved cash flow: Riviera generated $4.4 million of cash flow from operations for the first six months of fiscal 2004. * Reduction of debt and interest expense: Riviera used its positive cash flow over the past six months to cut total long-term debt to $5.0 million for the second quarter ended February 29, 2004 from $9.0 million for the second quarter ended last year. As a result of the reduced debt, the Company incurred less interest expense in the most recent second quarter, decreasing to $123,000 versus $221,000 for the second quarter ended 2003. "The cash flow generated from operations during the first six months of 2004 was used to pay down debt and support operations," said Peter C. Canepa, chief financial officer for Riviera Tool. "We are focused on managing our cash and believe that proceeds from operations, along with existing bank working capital and proceeds from our equity offering in March, will provide us the necessary cash to fund growth moving forward." 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 Mercedes Benz, 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 February 29, August 31, 2004 2003 CURRENT ASSETS (unaudited) (audited) Cash $1,200 $- Accounts receivable 4,890,489 7,010,039 Costs in excess of billings on contracts in process 11,490,012 12,208,666 Inventories 248,559 248,559 Prepaid expenses and other current assets 507,706 294,143 Total current assets 17,137,966 19,761,407 PROPERTY, PLANT AND EQUIPMENT, NET 12,494,313 13,046,289 PERISHABLE TOOLING 623,096 617,722 OTHER ASSETS 347,660 325,198 Total assets $30,603,035 $33,750,616 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $4,012,298 $638,756 Accounts payable 4,481,611 5,020,554 Accrued outsourced contracts payable 6,548,316 5,903,930 Accrued liabilities 754,582 435,896 Total current liabilities 15,796,807 11,999,136 LONG-TERM DEBT 954,968 8,400,333 ACCRUED LEASE EXPENSE 690,790 640,690 Total liabilities 17,442,565 21,040,159 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 February 29, 2004 and August 31, 2003 15,115,466 15,115,466 Retained deficit (1,954,996) (2,405,009) Total stockholders' equity 13,160,470 12,710,457 Total liabilities and stockholders' equity $30,603,035 $33,750,616 RIVIERA TOOL COMPANY STATEMENTS OF OPERATIONS (UNAUDITED) For The Three Months For The Six Months Ended Ended Feb. 29, Feb. 28, Feb. 29, Feb. 28, 2004 2003 2004 2003 SALES $8,292,900 $8,304,121 $16,603,660 $12,642,723 COST OF SALES 7,452,464 7,434,664 14,913,281 11,479,929 GROSS PROFIT 840,436 869,457 1,690,379 1,162,794 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 505,652 416,712 909,139 738,605 INCOME FROM OPERATIONS 334,784 452,745 781,240 424,189 TOTAL INTEREST EXPENSE 122,701 221,397 331,228 381,755 INCOME BEFORE INCOME TAXES 212,083 231,348 450,012 42,434 INCOME TAXES - - - - NET INCOME AVAILABLE FOR COMMON SHARES $212,083 $231,348 $450,012 $42,434 BASIC AND DILUTED INCOME PER COMMON SHARE $.06 $.07 $.13 $.01 BASIC AND DILUTED COMMON SHARES OUTSTANDING 3,379,609 3,379,609 3,379,609 3,379,609 RIVIERA TOOL COMPANY STATEMENT OF CASH FLOWS (UNAUDITED) For the Three Months For the Six Months Ended Ended Feb. 29, Feb. 28, Feb. 29, Feb. 28, 2004 2003 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES Net income $212,083 $231,348 $450,012 $42,434 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 421,599 460,482 843,198 920,964 (Increase) decrease in assets: Accounts receivable (1,444,542) (1,915,394) 2,119,551 (6,819,931) Costs in excess of billings on contracts in process (180,343) (106,658) 718,655 2,543,387 Perishable tooling 560 (33,796) (5,374) (33,645) Prepaid expenses and other current assets (236,959) (204,158) (213,563) (193,218) Increase (decrease) in liabilities: Accounts payable 1,209,148 2,693,668 (538,943) 2,576,829 Accrued outsourced contracts payable (182,025) - 644,386 - Accrued lease expense 25,050 (8,762) 50,100 (17,523) Accrued liabilities 86,476 (32,818) 318,686 84,725 Net cash provided by/(used in) operating activities $(88,953) $1,083,912 $4,386,708 $(895,978) CASH FLOWS FROM INVESTING ACTIVITIES Increase in other assets - - (22,462) (22,138) Additions to property, plant and equipment (166,429) (58,122) (291,223) (60,346) Net cash used in investing activities $(166,429) $(58,122) $(313,685) $(82,484) CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings (repayments) on revolving credit line 380,876 (872,730) (3,789,177) (872,730) Issuance of debt - 3,367,948 - 3,367,948 Principal payments on notes payable to bank (125,494) (3,521,008) (282,646) (3,854,499) Net cash provided by/(used in) financing activities $255,382 $(1,025,790) $(4,071,823)$(1,359,281) NET INCREASE/(DECREASE) IN CASH $- - $1,200 $(2,337,743) CASH - Beginning of Period 1,200 - - 2,337,743 CASH - End of Period $1,200 - $1,200 $- DATASOURCE: Riviera Tool Company CONTACT: Kenneth K. Rieth, CEO or Peter C. Canepa, CFO of Riviera Tool Company, +1-616-698-2100; or Investor inquiries: Jeff Lambert, +1-616-233-0500, for Riviera Tool Company Web site: http://www.rivieratool.com/

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