<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - Q
Quarterly Report Under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For The Quarter Ended November 30, 1997
Commission File Number 001 - 12673
RIVIERA TOOL COMPANY
A Michigan Corporation
I.R.S. Employer Identification No. 38- 2828870
5460 Executive Parkway S.E., Grand Rapids, Michigan 49512
Telephone: (616) 698 - 2100
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The number of Common Shares outstanding at January 7, 1998 was 1,755,000.
1.
<PAGE> 2
PART I
FINANCIAL INFORMATION
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
Item 1. Financial Statements
Balance Sheets as of November 30, 1997 and August 31, 1997........................... 4
Statements of Operations for the Three Months Ended November 30, 1997 and 1996....... 5
Statements of Cash Flows for the Three Months Ended November 30, 1997 and 1996....... 6
Notes to Financial Statements........................................................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations........................................................................... 10
</TABLE>
PART II
OTHER INFORMATION
INDEX
Item 1. Legal Proceedings - Incorporated by reference to Prospectus -
"Business-Legal Proceedings" contained in Registrant's Registration
Statement number 333-14187, effective March 3, 1997.
Item 2. Changes in Securities - On October 10, 1997, and October 24, 1997
the Company issued 67,500 shares and 12,500 shares, respectively,
of its 8% Cumulative Convertible Preferred Stock, no
par value, for gross proceeds of $8,000,000, all to accredited
investors as that term in defined by Regulation D under the Securities
Act. National Securities Corporation acted as placement agent and
received a commission of $640,000, a nonaccountable expense allowance
of $160,000 and 50,000 warrants to purchase Common Stock of the
Company exercisable at $10 per share commencing October 10, 1998 and
expiring October 10, 2002. These transactions were exempt from
registration under Sections 3(b), 4(2) and 4(6) of the Securities Act
of 1933 and Rule 506 of Regulation D thereunder.
On October 10, 1997, the Company issued warrants to purchase
50,000 shares of the Company's Common Stock to the Placement Agent
engaged to place the Preferred Stock described in the foregoing
paragraph and to two individuals associated with that engagement and
the Placement Agent. The transaction was exempt from registration
under Sections 4(2) and 4(6) of the Securities Act and Rule 506 of
Regulation D.
Of the 80,000 Preferred Shares 67,500 Preferred Shares will be
convertible into Common Stock at any time, and from time to time, in
whole or in part, for the number of shares of Common Stock per share
equal to $100 divided by $6.00. The remaining 12,500 Preferred Shares
will be convertible into Common Stock at any time, and from time to
time, in whole or in part, for the number of shares of Common Stock per
share equal to $100 divided by $6.7375. All Preferred Shares
outstanding will be automatically converted into Common Stock when the
average closing price for the Common Stock on the American Stock
Exchange for 10 consecutive trading days is equal to or greater than
$10 per share. The Company shall not be required to issue fractional
shares in connection with any conversion and a cash payment shall be
made in lieu thereof.
The Placement Agent's Warrant is exercisable beginning October
10, 1998, expires four years later, and may not be transferred,
assigned or hypothecated for a period of one year following the date of
its issuance, but may thereafter be assigned to any successor, officer
or partner of the placement agent. The Placement Agent's Warrant will
be exercisable in whole or in part during that four year period at a
price equal to $10.00 per share.
Item 3. Default Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - The following
matters were submitted to a vote of the Company's common shareholders
at its annual shareholders meeting on December 17, 1997:
a. The following directors were elected to serve until the
meeting of shareholders in 2000 and until their successors
are elected (amounts shown in parentheses represent the
number of votes cast for, against or withheld, and
abstentions, respectively:
(i) John C. Kennedy (2,277,209, 2,800, 204,991)
(ii) Thomas H. Highley (2,277,209, 2,800, 204,991)
The following directors of the Company continued until the
annual meeting of shareholders in the year indicated
parenthetically and until their successors are elected:
Leonard H. Wood (1998)
Thomas R. Collins (1998)
Kenneth K. Rieth (1999)
John R, Kinstler (1999)
b. A proposal to amend the Riviera Tool Company 1996
Incentive Stock Option Plan (the "Plan") to provide that all
officers and other employees and former officers and employees
who have a consulting arrangement with the Company are eligible
to participate in the Plan. Shareholder votes were cast as
follows: 1,973,475 for; 23,000 against or withheld; and, 488,525
abstentions. Based upon this tabulation of votes, the proposal
was approved.
2.
<PAGE> 3
INDEX - CONTINUED
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8 - K.
6(a) Exhibits - None
6(b) Reports on Form 8-K - None
3.
<PAGE> 4
RIVIERA TOOL COMPANY
FINANCIAL STATEMENTS
BALANCE SHEET
<TABLE>
<CAPTION>
NOVEMBER 30,
ASSETS 1997 AUGUST 31, 1997
------ ------------------ ---------------------
CURRENT ASSETS NOTE (UNAUDITED) (AUDITED)
- -------------- ---- ------------------ ---------------------
<S> <C> <C> <C>
Cash...................................................... $ 20,011 $ --
Accounts Receivable:
Trade................................................... 3,683,823 4,614,257
Related Party........................................... -- 201,286
Costs and estimated gross profit in excess
of billings on contracts in process.................... 3 9,348,795 7,138,358
Inventories............................................... 468,740 468,740
Prepaid expenses and other current assets................. 394,705 267,554
------------- ------------
Total current assets.............................. 13,916,074 12,690,195
PROPERTY, PLANT AND EQUIPMENT, NET.......................... 4 10,654,949 9,640,330
PERISHABLE TOOLING.......................................... 512,156 572,585
OTHER ASSETS................................................ 122,883 187,843
------------- ------------
Total assets...................................... $ 25,205,062 $23,090,953
============= ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
--------------------
CURRENT LIABILITIES
- -------------------
Current portion of long-term debt......................... 5 $ 650,000 $ 650,000
Accounts payable.......................................... 1,356,099 1,241,243
Accrued liabilities....................................... 683,448 634,924
------------- ------------
Total Current liabilities......................... 2,689,547 2,526,167
LONG-TERM DEBT.............................................. 5 4,665,369 7,202,393
ACCRUED LEASE EXPENSE....................................... 615,005 605,660
DEFERRED TAX LIABILITY...................................... 1,167,286 934,400
PREFERRED STOCK - no par value,
$100 mandatory redemption value:
Authorized - 5,000 shares
Issued and outstanding - None......................... -- --
STOCKHOLDERS' EQUITY:
Preferred Stock -8% Cumulative Convertible Preferred
Stock - no par value,
Authorized - 200,000 shares
Issued and outstanding - 80,000 shares at
November 30, 1997 None at August 31, 1997........... 2 6,915,564 --
Common stock - No par value:
Authorized - 9,785,575 shares
Issued and outstanding - 1,755,000 shares at
November 30, 1997 2,485,000 shares at August 31,
1997.................................................. 6,539,879 9,539,879
Retained earnings....................................... 2,613,412 2,282,454
------------- ------------
Total stockholders' equity........................ 16,068,855 11,822,333
------------- ------------
Total liabilities and stockholders'
equity.......................................... $ 25,205,062 $ 23,090,953
============= ============
</TABLE>
See notes to financial statements
4.
<PAGE> 5
RIVIERA TOOL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
NOVEMBER 30
--------------------------
1997 1996
------------- -----------
<S> <C> <C>
SALES........................................ $ 5,443,805 $5,480,213
COST OF SALES................................ 4,184,070 4,395,263
------------- -----------
GROSS PROFIT.................... 1,259,735 1,084,950
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES.................... 503,742 430,531
------------- -----------
INCOME FROM OPERATIONS............... 755,993 654,419
OTHER INCOME (EXPENSE)
Interest expense........................... (131,829) (402,645)
Gain on asset sales........................ 23,759 15,387
------------- -----------
TOTAL OTHER EXPENSE - NET............. (108,070) (387,258)
INCOME BEFORE TAXES ON INCOME................ 647,923 267,161
INCOME TAXES................................. 232,886 90,600
------------- -----------
NET INCOME..................... 415,037 176,561
DIVIDENDS AND ACCRETION ON
PREFERRED STOCK............................ 84,079 4,612
------------- -----------
NET INCOME AVAILABLE FOR COMMON
SHARES..................................... $ 330,958 $ 171,949
============= ===========
PRIMARY EARNINGS PER COMMON SHARE............ $ .16 $ .12
============= ===========
PRIMARY COMMON SHARES OUTSTANDING............ 2,067,857 1,460,000
============= ===========
FULLY-DILUTED EARNINGS PER COMMON SHARE...... $ .15
=============
FULLY-DILUTED COMMON SHARES OUTSTANDING...... 2,765,962
=============
</TABLE>
See notes to financial statements
5.
<PAGE> 6
RIVIERA TOOL COMPANY
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
NOVEMBER 30,
---------------------------------
1997 1996
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................ $ 415,037 $ 176,561
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization......................... 279,298 321.523
Gain on sale of equipment............................. (22,266) --
Amortization of deferred gain......................... -- (15,387)
Deferred taxes........................................ 232,886 90,600
Bad debt expense...................................... -- --
(Increase) decrease in assets:
Accounts receivable................................. 1,131,720 (50,850)
Costs and estimated gross profit in
excess of billings on contracts in
process............................................. (2,210,437) 607,451
Perishable tooling.................................. 60,429 39,190
Prepaid expenses and other current assets........... (72,415) (41,374)
Increase (decrease) in liabilities:
Accounts payable.................................... 114,856 (307,906)
Accrued lease expense............................... 9,345 11,682
Accrued liabilities................................. 48,524 111,190
----------- -------------
Net cash provided by (used in)
operating activities............................ (13,022) 942,680
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of machinery & equipment............... 206,500 --
Additions to property, plant and equipment................ (1,467,928) (50,808)
----------- -------------
Net cash provided by (used in) investing
activity............................................ (1,261,928) (50,808)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from (repayments of) short-
term debt............................................... -- (445,918)
Net proceeds from issuance of preferred stock............. 7,151,555 --
Principal(payments)/proceeds from long-term debt.......... (2,537,024) (252,731)
Principal payments under capital lease
obligations............................................. -- (89,780)
Redemption of preferred stock............................. -- (47,500)
Capitalized refinancing costs............................. (235,991) (50,766)
Repurchase and retirement of common stock................. (3,000,000) --
Preferred stock dividends................................. (84,079) (5,177)
----------- -------------
Net cash provided by (used in) financing
activities.......................................... 1,294,461 (891,872)
----------- -------------
NET INCREASE IN CASH........................................ $ 20,011 $ --
CASH - Beginning of Period.................................. -- --
----------- -------------
CASH - End of Period........................................ $ 20,011 $ --
=========== =============
</TABLE>
See notes to financial statements
6.
<PAGE> 7
RIVIERA TOOL COMPANY
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements (the "Financial
Statements") of Riviera Tool Company (the "Company") have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, the Financial Statements do not include all the
information and footnotes normally included in the annual financial statements
prepared in accordance with generally accepted accounting principles.
In the opinion of management, the Financial Statements reflect all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
such information in accordance with generally accepted accounting principles.
These Financial Statements should be read in conjunction with the financial
statements and footnotes thereto included in the Company's Form 10-K dated
November 26, 1997, for the fiscal year ended August 31, 1997.
The results of operations for the three month periods ended November 30, 1997
are not indicative of the results to be expected for the full year.
NOTE 2 -- 8% CUMULATIVE CONVERTIBLE PREFERRED STOCK
In October, 1997, the Company issued and sold 80,000 shares of 8%
Cumulative Convertible Preferred Stock (the "Preferred Shares") at $100.00 per
share. With a portion of the proceeds from this sale, the Company exercised its
option to purchase and retired all 730,000 shares of common stock held by Motor
Wheel Corporation for $3.0 million or $4.11 per share.
The holders of the 8% Cumulative Convertible Preferred Stock will possess
no voting rights except where required by law and under the following
circumstances (i) at whatever time or times dividends are not payable for two
consecutive quarterly periods, the holders of the Preferred Shares have the
right to elect one additional director who shall continue until all such
accumulated dividends have been paid in full, or (ii) for so long as the
Preferred Shares remain outstanding, the Company must obtain a vote of the
holders of 66 2/3% of the then outstanding Preferred Shares to issue any class
of stock ranking senior to the Preferred Shares as to dividends or distribution
of assets on liquidation. Cumulative dividends shall be paid at an annual rate
of 8% payable quarterly, in arrears, at a rate of $2.00 per share per quarter,
commencing December 31, 1997. Upon liquidation, the Shares will be entitled to
seniority to the extent of $100 per share plus cumulative dividends to the date
of payment over the Common Stock and any other capital stock not given senior
rights by the holders of the Shares. Of the 80,000 Preferred Shares issued,
67,500 preferred shares are convertible into Common Stock at any time, and from
time to time, in whole or in part, for the number of shares of Common Stock per
share equal to $100 divided by $6.00. The remaining 12,500 preferred shares
are convertible into Common Stock at any time, and from time to time, in whole
or in part, for the number of shares of Common Stock per share equal to $100
divided by $6.7375. All Preferred Shares outstanding will be automatically
converted into Common Stock when the average closing price for the Common Stock
on the American Stock Exchange for 10 consecutive trading days is equal to or
greater than $10 per share. The Company shall not be required to issue
fractional shares in connection with any conversion and a cash payment shall be
made in lieu thereof. The Preferred Shares are not subject to call for
redemption by the Company. The Company must register under the 1933 Act the
shares of Common Stock issuable upon conversion of the Preferred Shares by
February 6, 1998.
7.
<PAGE> 8
RIVIERA TOOL COMPANY
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
NOTE 3 - COSTS AND BILLINGS ON CONTRACTS IN PROCESS
Costs and billings on contracts in process are as follows:
<TABLE>
<CAPTION>
NOVEMBER 30, AUGUST 31,
1997 1997
------------- -------------------
<S> <C> <C>
Costs incurred on contracts in process under the
percentage of completion method................. $ 11,698,015 $ 9,008,594
Estimated gross profit............................ 625,000 1,325,000
------------- -------------------
Total........................................ 12,323,015 10,333,594
Less progress payments received and progress
billings to date................................ 2,995,677 3,208,800
Plus costs incurred on contracts in process under
the completed contract method................... 21,457 13,564
Costs and estimated gross profit in excess ------------- -------------------
of billings on contracts in process........ $ 9,348,795 $ 7,138,358
============= ===================
</TABLE>
Included in estimated gross profit for August 31, 1997 and November 30, 1997
are jobs with losses accrued of $55,529 and $65,174, respectively.
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
NOVEMBER 30, AUGUST 31,
1997 1997
------------ -----------
<S> <C> <C>
Lease and leasehold improvements......................... $ 1,560,668 $ 1,560,668
Office furniture and fixtures............................ 137,236 137,236
Machinery and equipment.................................. 14,963,843 14,078,151
Computer equipment and software.......................... 1,234,810 1,243,078
Transportation equipment................................. 115,971 115,971
------------ -----------
Total cost.......................................... 18,012,528 17,135,074
Accumulated depreciation and amortization................ 7,357,579 7,494,744
------------ -----------
Net carrying amount................................. $10,654,949 $ 9,640,330
============ ===========
Depreciation and amortization expense for the period..... $ 279,298 $ 1,257,307
============ ===========
</TABLE>
NOTE 5 - LONG-TERM DEBT
<TABLE>
<CAPTION>
November 30 August 31,
LONG-TERM DEBT 1997 1997
- -------------- ----------- ----------
<S> <C> <C>
Revolving bank working capital credit line,
collateralized by substantially all assets of the
Company. The agreement provides for borrowing, subject
to certain collateral requirements of up to $10.0
million, and bears interest, payable monthly, at .25%
above the bank's prime rate at August 31, 1996 and
prime rate at November 30, 1997 (an effective rate of
8.75% and 8.5%, respectively), due January 1,1999. The
Agreement is subject to certain loan covenants
discussed below and requires a commitment fee of .25%
per annum on the average daily unused portion of the
revolving credit line.................................. 725,967 4,710,726
</TABLE>
8.
<PAGE> 9
RIVIERA TOOL COMPANY
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
NOTE 5 - LONG-TERM DEBT - CONTINUED
<TABLE>
<S> <C> <C>
Note payable to bank, collateralized by substantially
all assets of the Company, payable in monthly
installments of $54,166.67 plus interest of .25% above
the bank's prime rate at August 31, 1997 and prime rate
at November 30, 1997 (an effective rate of 8.75% and
8.5%, respectively), due July 1, 2002................... 2,979,167 3,141,667
Revolving equipment credit line, collateralized by
specific assets of the Company. The agreement provides
for borrowing up to $4.0 million, in $500,000
increments, and bears interest at .25% above the bank's
prime rate at August 31, 1997 and prime rate at
November 30, 1997 (an effective rate of 8.75% and 8.5%,
respectively), due in monthly installments over six
years from date of borrowing increment. The Agreement
is subject to certain loan covenants discussed below.... 1,610,235 --
---------- ----------
Total long-term debt................................ 5,315,369 7,852,393
Total current portion............................... 650,000 650,000
---------- ----------
Long-term debt - Net................................ $4,665,369 $7,202,393
========== ==========
</TABLE>
As of August 31, 1997 and November 30, 1997, in connection with the lines of
credit and note payable to bank, the Company has agreed to certain covenants.
The agreements require the Company to maintain certain ratios/levels of
tangible net worth, working capital, liabilities to tangible net worth,
earnings before interest, taxes, depreciation and amortization to debt service
and prohibit the payment of common stock cash dividends. The Company was in
compliance at August 31, 1997 and November 30, 1997, with all of these
covenants.
9.
<PAGE> 10
RIVIERA TOOL COMPANY
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, the components of the
Company's Statement of Operations as a percentage of sales.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED NOVEMBER 30
---------------------
1997 1996
--------- ----------
<S> <C> <C>
SALES........................................... 100.0% 100.0%
COST OF SALES................................... 76.9% 80.2%
------ -------
GROSS PROFIT..................... 23.1% 19.8%
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE..... 9.3% 7.9%
------ -------
INCOME FROM OPERATIONS........... 13.8% 11.9%
OTHER INCOME (EXPENSE)
INTEREST EXPENSE.............................. (2.4)% (7.3)%
GAIN ON ASSET SALES........................... .4% .3%
------ -------
TOTAL OTHER EXPENSE - NET.............. (2.0)% (7.0)%
INCOME BEFORE TAXES ON INCOME................... 11.8% 4.9%
INCOME TAXES.................................... 4.3% 1.7%
------ -------
NET INCOME........................ 7.5% 3.2%
====== =======
</TABLE>
COMPARISON OF THE THREE MONTHS ENDED NOVEMBER 30, 1997 TO THE THREE MONTHS
ENDED NOVEMBER 30, 1996.
REVENUES - Revenues for the three months ended November 30, 1997 totaled $5.4
million as compared to $5.5 million for the three months ended November 30,
1996, a decrease of $0.5 million or 9%. This decrease was due to a customer
with which the Company had a $4.5 million tooling contract putting such
contract on temporary hold during September, 1997. This contract was
temporarily suspended due to certain re-design requirements of the customer. In
October, 1997 such engineering changes were integrated into the contract and
the Company commenced manufacturing the required dies. As a result of this
delay, first quarter revenue was lower than the comparable period last year and
lower than anticipated.
COST OF SALES - Cost of sales decreased from $4.4 million for the three months
ended November 30, 1996 to $4.2 million for the three months ended November 30,
1997. As a percent of revenue, cost of sales for the three months ended
November 30, 1997 was 76.9% compared to 80.2% for the three months ended
November 30, 1996. The improved margin was largely due to a decrease in the
Company's direct material expense (a decrease of $180,000), decrease in direct
labor ($107,000), increases in outside purchased services ($207,000) and a
decrease in manufacturing overhead of $126,000.
10.
<PAGE> 11
The decrease in direct material expense was a result of better direct material
pricing that the Company has negotiated with its suppliers as well as the
material requirements of the contracts-in-process required lower levels of
material during this period. The decrease in direct labor expense was a result
of a $4.5 million contract which was placed on temporary hold during the first
quarter thus lowering manufacturing hour requirements during the quarter. The
increase in outside purchased services was a result of the increase in the
amount of outsourcing requirements during the quarter. This increase is a
result of the fact that the Company is in the process of upgrading the
technology on its machine tools and had less than normal available internal
machining capacity. Upon completion of these technology upgrades the Company's
internal machining capacity will be increased and is expected to be more
efficient.
S,G & A EXPENSES - Selling, general and administrative expenses increased from
approximately $431,000 for the three months ended November 30, 1996 to
approximately $504,000 for the three months ended November 30, 1997. This
increase was largely due to an increase in public company costs ($56,000), and
selling expense ($27,000). As a percentage of revenue, selling, general and
administrative expenses were 9.3% for the three months ended November 30, 1997
compared to 7.9% for the three months ended November 30,1996.
The increase in public company costs was due to the cost of the Company's
Annual Report and other services required as a result of being a public entity,
as compared to the first quarter of 1996 when the Company was privately held.
Selling expense increased as compared to the same period last year largely as a
result of costs incurred by the Company in its international marketing efforts.
INTEREST EXPENSE -- Interest expense for the three months ended November 30,
1997 was approximately $132,000 as compared to approximately $403,000 for the
three months ended November 30, 1996. As a percentage of revenue, interest
expense decreased from 7.3% for the three months ended November 30, 1996 as
compared to 2.4% for the three months ended November 30, 1997.
The decrease in interest expense was a result of the Company's refinancing in
June, 1997. This refinancing lowered the Company's borrowing costs from prime
plus four percent to prime plus one quarter percent. Subsequent to the November
30, 1997 the Company's borrowing costs were lowered even further to prime rate
from prime plus one quarter percent. Additionally, during the first quarter
ended November 30, 1997 the Company's debt levels were lower due to proceeds
received from its initial public offering of common stock ($7,070,000) and
private placement of 8% Cumulative Convertible Preferred Stock ($8,000,000).
FEDERAL INCOME TAXES
The effective federal income tax rate was 36% for the three months ended
November 30, 1997, as compared to 34% for the three months ended November 30,
1996. As of August 31, 1997, the Company had approximately $1.7 million of net
operating loss carryforwards that expire 2007 through 2009, investment tax
credit carryforwards of approximately $204,900 that expire 1998 through 2003
and alternative minimum tax credits of approximately $189,300, the use of which
do not expire.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended November 30, 1997, the Company's cash used in
operating activities was $13,022. The capital used in operating activities was
primarily due to the net effect of a decrease in the Company's Accounts
Receivable of $1,131,720 and an increase in Work-in-Process of $2,210,437.
11.
<PAGE> 12
From Investing Activities, the Company acquired additional machinery and
equipment of $1,467,928 and had disposal proceeds of $206,500. During the first
quarter, the Company acquired four 1,000 ton stamping presses for a total of
$1.3 million, which represented a majority of the machinery and equipment
acquisitions.
From Financing Activities, the Company was provided from financing activities a
total of $1,294,461 during the three months ended November 30, 1997. During the
three months ended November 30, 1997, the Company reduced its revolving line of
credit ($3,984,759) and drew $1,610,235 on its equipment line of credit to
finance its acquisition of machinery and equipment. The Company received
proceeds from issuance of 80,000 shares of 8% Cumulative Convertible Preferred
Stock (net proceeds of $6.9 million) and subsequently redeemed and retired
730,000 common stock held by Motor Wheel Corporation for $3.0 million ($4.11
per share).
12.
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: January 7, 1998
Riviera Tool Company
/s/ Kenneth K. Rieth
----------------------
Kenneth K. Rieth
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Peter C. Canepa
----------------------
Peter C. Canepa
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
13.
<PAGE> 14
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Part I
financial information, Item 1, Financial Statements and is qualified in its
entirety by reference to such SEC Form 10Q for the first quarter ended November
30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> NOV-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 3,683,823
<ALLOWANCES> 100,000
<INVENTORY> 9,817,535
<CURRENT-ASSETS> 13,916,074
<PP&E> 10,654,949
<DEPRECIATION> 7,357,579
<TOTAL-ASSETS> 25,205,062
<CURRENT-LIABILITIES> 2,689,547
<BONDS> 4,665,369
0
6,915,564
<COMMON> 6,539,879
<OTHER-SE> 0
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</TABLE>
