<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, 1998
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 13, 1999 was 3,218,744.
1.
<PAGE> 2
PART I
FINANCIAL INFORMATION
INDEX
Page No.
Item 1. Financial Statements
Balance Sheets as of November 30, 1998 and August 31, 1998...... 4
Statements of Operations for the Three Months Ended
November 30, 1998 and 1997...................................... 5
Statements of Cash Flows for the Three Months Ended
November 30, 1998 and 1997...................................... 6
Notes to Financial Statements................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................... 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk - None
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 November 2, 1998, the Company's
Board of Directors declared a five percent common stock
dividend, payable on December 18, 1998 to all shareholders of
record on November 17, 1998. On December 18, 1998, an additional
153,245 common shares were issued as a stock dividend.
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 16, 1998:
a. The following directors were elected to serve until the
meeting of shareholders in 2001 and until their
successors are elected (amounts shown in parentheses
represent the number of votes cast for, against or
withheld, and abstentions, respectively:
(i) Leonard H. Wood (2,873,175, 4,000, 188,324)
(ii) Daniel W. Terpsma (2,872,575, 4,600, 188,324)
The following directors of the Company continued until
the annual meeting of shareholders in the year indicated
parenthetically and until their successors are elected:
Kenneth K. Rieth (1999)
John C. Kennedy (2000)
Thomas H. Highley (2000)
b. A proposal to approve the Riviera Tool Company 1998 Key
Employee Stock Option Plan (the "Plan"). The purpose of
the Plan is to enable key employees of Company to
participate in the Company's future
2.
<PAGE> 3
growth and profitability by offering them long-term
performance-based incentive compensation. The Plan also
provides a means through which the Company can attract and
retain key employees and directors. All officers, directors,
and others designated by the Compensation Committee are
eligible to participate in the Plan. Shareholder votes were
cast as follows: 2,148,337 for; 71,844 against or withheld;
and, 654,244 abstentions. Based upon this tabulation of votes,
the proposal was approved.
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 - Reported on Form 8-K, Item 5. Other Events
regarding Company's prior period adjustment, filed on November 12,
1998.
3.
<PAGE> 4
RIVIERA TOOL COMPANY
FINANCIAL STATEMENTS
BALANCE SHEET
<TABLE>
<CAPTION>
NOVEMBER 30, AUGUST 31,
ASSETS 1998 1998
---------------- ----------------
CURRENT ASSETS NOTE (UNAUDITED) (AUDITED)
---------------- ----------------
<S> <C> <C>
Cash............................................................ $ 29,883 $ 4,206
Accounts Receivable............................................. 2,801,108 1,609,272
Costs and estimated gross profit in excess
of billings on contracts in process........................ 2 13,773,823 11,299,961
Inventories..................................................... 368,066 405,566
Prepaid expenses and other current assets....................... 314,404 172,054
---------------- ----------------
Total current assets.................................. 17,287,284 13,491,059
PROPERTY, PLANT AND EQUIPMENT, NET................................ 3 13,730,694 13,237,501
PERISHABLE TOOLING................................................ 734,108 743,966
OTHER ASSETS...................................................... 223,885 223,869
---------------- ----------------
Total assets.......................................... $ 31,975,971 $ 27,696,395
================ ================
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt............................... 4 $ 1,200,000 $ 876,555
Accounts payable................................................ 1,118,521 1,113,113
Accrued liabilities............................................. 269,487 204,682
---------------- ----------------
Total current liabilities............................. 2,588,008 2,194,350
LONG-TERM DEBT.................................................... 4 11,291,114 8,196,641
ACCRUED LEASE EXPENSE............................................. 650,049 643,040
DEFERRED TAX LIABILITY............................................ 1,047,084 780,376
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 - None................................ -- --
Common stock - No par value:
Authorized - 9,785,575 shares
Issued and outstanding - 3,218,744 shares
at November 30, 1998 and 3,065,499 shares at
August 31, 1998.............................................. 14,512,185 13,496,937
Retained earnings............................................... 1,887,531 2,385,051
---------------- ----------------
Total stockholders' equity............................ 16,399,716 15,881,988
---------------- ----------------
Total liabilities and stockholders'
Equity.............................................. $ 31,975,971 $ 27,696,395
================ ================
</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
-------------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
SALES.................................................................. $ 5,556,996 $ 5,443,805
COST OF SALES.......................................................... 4,215,868 4,184,070
---------------- ----------------
GROSS PROFIT..................................................... 1,341,128 1,259,735
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES............................................ 435,284 503,742
---------------- ----------------
INCOME FROM OPERATIONS........................................... 905,844 755,993
OTHER INCOME (EXPENSE)
Interest expense.................................................... (122,978) (131,829)
Gain on asset sales................................................. 1,570 23,759
---------------- ----------------
TOTAL OTHER EXPENSE - NET........................................ (121,408) (108,070)
INCOME BEFORE TAXES ON INCOME.......................................... 784,436 647,923
INCOME TAXES........................................................... 266,708 232,886
---------------- ----------------
NET INCOME................................................ 517,728 415,037
DIVIDENDS AND ACCRETION ON
PREFERRED STOCK.................................................... -- 84,079
---------------- ----------------
NET INCOME AVAILABLE FOR COMMON
SHARES............................................................. $ 517,728 $ 330,958
================ ================
BASIC EARNINGS PER COMMON SHARE........................................ $ .16 $ .15
================ ================
BASIC COMMON SHARES OUTSTANDING........................................ 3,218,744 2,221,102
================ ================
DILUTED EARNINGS PER COMMON SHARE...................................... $ .16 $ .14
================ ================
DILUTED COMMON SHARES OUTSTANDING...................................... 3,218,744 2,919,207
================ ================
</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,
---------------------------------------
1998 1997
--------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income........................................................... $ 517,728 $ 415,037
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization.................................... 407,977 279,298
Gain on sale of equipment........................................ -- (22,266)
Deferred taxes................................................... 266,708 232,886
(Increase) decrease in assets:
Accounts receivable........................................... (1,191,836) 1,131,720
Costs and estimated gross profit in
excess of billings on contracts in
process....................................................... (2,473,862) (2,210,437)
Perishable tooling............................................ 9,858 60,429
Prepaid expenses and other current assets..................... (142,350) (72,415)
Increase (decrease) in liabilities:
Accounts payable.............................................. 5,408 114,856
Accrued lease expense......................................... 7,009 9,345
Accrued liabilities........................................... 64,805 48,524
------------- --------------
Net cash used in
operating activities...................................... $ (2,528,555) $ (13,022)
------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of machinery & equipment.......................... -- 206,500
Additions to property, plant and equipment........................... (863,686) (1,467,928)
------------- --------------
Net cash used in investing
activity..................................................... $ (863,686) $ (1,261,928)
------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of preferred stock........................ -- 7,151,555
Principal (payments)/proceeds from long-term debt..................... 3,417,918 (2,537,024)
Capitalized refinancing costs........................................ -- (235,991)
Repurchase and retirement of common stock............................ -- (3,000,000)
Preferred stock dividends............................................ -- (84,079)
------------- --------------
Net cash provided by financing
activities................................................... $ 3,417,918 $ 1,294,461
------------- --------------
NET INCREASE IN CASH................................................... $ 25,677 $ 20,011
------------- --------------
CASH - Beginning of Period............................................. 4,206 --
------------- --------------
CASH - End of Period................................................... $ 29,883 $ 20,011
============= ==============
</TABLE>
See notes to financial statements
6.
<PAGE> 7
RIVIERA TOOL COMPANY
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
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 30, 1998, for the fiscal year ended August 31, 1998.
The results of operations for the three month periods ended November 30, 1998
are not indicative of the results to be expected for the full year.
On November 2, 1998, the Company's Board of Directors declared a five percent
common stock dividend, payable on December 18, 1998 to all shareholders of
record on November 17, 1998. On December 18, 1998, an additional 153,245
common shares were issued as a stock dividend. In accordance with Generally
Accepted Accounting Principles ("GAAP"), such shares are included in shares
outstanding as of November 30, 1998 and as of November 30, 1997. The earnings
per share and shares outstanding amounts for the first quarter ended November
30, 1997 are adjusted accordingly.
NOTE 2 - COSTS AND BILLINGS ON CONTRACTS IN PROCESS
Costs and billings on contracts in process are as follows:
<TABLE>
<CAPTION>
NOVEMBER 30, AUGUST 31,
1998 1998
------------------ -----------------
<S> <C> <C>
Costs incurred on contracts in process under the
percentage of completion method..................................... $ 17,977,511 $ 14,949,213
Estimated gross profit................................................. 2,450,000 1,450,000
------------------ -----------------
Total.......................................................... 20,428,511 16,399,213
Less progress payments received and progress
billings to date.................................................... 6,653,688 5,099,252
Plus costs incurred on contracts in process under
the completed contract method....................................... -- --
================== =================
Costs and estimated gross profit in excess
of billings on contracts in process.......................... $ 13,773,823 $ 11,299,961
================== =================
</TABLE>
Included in estimated gross profit for August 31, 1998 and November
30, 1998 are jobs with losses accrued of $309,565 and $317,840 respectively.
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
NOVEMBER 30, AUGUST 31,
1998 1998
------------------ ----------------
<S> <C> <C>
Lease and leasehold improvements................................................ $ 1,453,539 $ 1,453,539
Office furniture and fixtures................................................... 203,514 203,514
Machinery and equipment......................................................... 11,531,431 11,594,436
Construction in Process......................................................... 6,194,018 5,283,903
Computer equipment and software................................................. 1,534,790 1,518,214
Transportation equipment........................................................ 126,365 126,365
------------------ ----------------
Total cost................................................................. 21,043,657 20,179,971
Accumulated depreciation and amortization....................................... 7,312,963 6,942,470
------------------ ----------------
Net carrying amount........................................................ $ 13,730,694 $ 13,237,501
================== ================
</TABLE>
7.
<PAGE> 8
RIVIERA TOOL COMPANY
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
NOTE 4 - LONG-TERM DEBT
<TABLE>
<CAPTION>
November 30 August 31,
LONG-TERM DEBT 1998 1998
- -------------- ----------------- -----------------
<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% below the bank's prime rate at August 31, 1998 and November 30,
1998 (an effective rate of 8.25% and 7.5%, respectively), due January 1, 2000.
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........................................................... $ 6,161,949 $ 3,862,874
Note payable to bank, collateralized by substantially all assets of the
Company, payable in monthly installments of $54,166.67 plus interest of .25%
below the bank's prime rate at August 31, 1998 and November 30, 1998 (an
effective rate of 8.25% and 7.5%, respectively), due June, 2002. The Agreement
is subject to certain loan covenants discussed below............................ 2,329,165 2,491,667
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% below the bank's prime rate at August
31, 1998 and November 30, 1998 (an effective rate of 8.25% and 7.5%,
respectively), due in monthly installments over six years from date of
borrowing increment. The Agreement is subject to certain loan covenants
discussed below................................................................. 4,000,000 2,718,655
------------- -------------
Total long-term debt....................................................... 12,491,114 9,073,196
Total current portion...................................................... 1,200,000 876,555
============= =============
Long-term debt - Net....................................................... $ 11,291,114 $ 8,196,641
============= =============
</TABLE>
As of August 31, 1998 and November 30, 1998, 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, 1998 and November 30, 1998, with all of these covenants.
8.
<PAGE> 9
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
-----------------------------
1998 1997
------------ -----------
<S> <C> <C>
SALES................................................................... 100.0% 100.0%
COST OF SALES........................................................... 75.9% 76.9%
------------ -----------
GROSS PROFIT............................................... 24.1% 23.1%
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE............................. 7.8% 9.3%
------------ -----------
INCOME FROM OPERATIONS.................................... 16.3% 13.8%
OTHER INCOME (EXPENSE)
INTEREST EXPENSE...................................................... (2.2)% (2.4)%
GAIN ON ASSET SALES................................................... -- .4%
------------ -----------
TOTAL OTHER EXPENSE - NET...................................... (2.2)% (2.0)%
INCOME BEFORE TAXES ON INCOME........................................... 14.1% 11.8%
INCOME TAXES............................................................ 4.8% 4.3%
------------ -----------
NET INCOME.................................................. 9.3% 7.5%
============ ===========
</TABLE>
COMPARISON OF THE THREE MONTHS ENDED NOVEMBER 30, 1998 TO THE THREE MONTHS ENDED
NOVEMBER 30, 1997.
REVENUES - Revenues for the three months ended November 30, 1998 totaled $5.6
million as compared to $5.4 million for the three months ended November 30,
1997, a increase of $0.2 million or 4%. This increase was partially due to the
Company recently securing additional contract awards. In addition, the Company's
Contracts in Process account was higher by 22% over the August 31, 1998 balance
and 120% higher than the November 30, 1997 balance. These November 30, 1998
Contracts in Process will be reflected in revenue in fiscal years 1999 and 2000.
COST OF SALES - Cost of sales was $4.2 million for the three months ended
November 30, 1997 and November 30, 1998. As a percent of revenue, cost of sales
for the three months ended November 30, 1997 was 76.9% as compared to 75.9% for
the three months ended November 30, 1998. The improved gross margin was largely
due to a decrease in the Company's direct costs expense (a decrease of $103,000
or 1.8% of sales), a decrease in engineering expense (a decrease of $18,000 or
0.5% of sales) and an increase in manufacturing overhead expense (an increase of
$152,000 or 2.2% of sales).
The decrease in direct costs expense was largely due to a decrease in direct
materials and outside services expense. The decrease from $1,314,000 or 24.2% of
sales for the three months ended November 30, 1997 to $1,264,000 or 23.3%
9.
<PAGE> 10
of sales for the three months ended November 30, 1998, largely as a result of
the Company upgrading its machining capability during fiscal 1998 for the
purpose of reducing the expense of outsource machining and in the future
performing more machining in-house. During the three months ended November 30,
1997, the Company had reduced it's machining capacity in that certain machining
centers were taken out-of-service during these upgrades. As a result, it
temporarily reduced the Company's machining capacity and the Company was
required to outsource more of its machining. Those machining centers taken
out-of-service during the first three months of 1997, were in-service during the
first three months of 1998 and outsourced machining expense decreased from
$307,800 for the three months ended November 30, 1997 to $31,800 for the three
months ended November 30, 1998. Direct labor expense was $1,067,000 or 19.2% of
sales for the three months ended November 30, 1998 as compared to $1,150,000 or
21.1% of sales for the three months ended November 30, 1997. Direct materials
expense increased from $1,006,000 for the three months ended November 30, 1997
to $1,264,000
Engineering expense decreased from $402,000 or 7.4% of sales for the three
months ended November 30, 1997 to $384,400 or 6.9% of sales for the three months
ended November 30, 1998. This decrease was due to decreases in Computer Aided
Design ("CAD") maintenance expense of $7,800, engineering supplies expense of
$5,400, engineering salaries of $2,800, and engineering on-line services of
$2,100.
Manufacturing overhead expense increased from $1,327,000 or 24.4% of sales for
thee three months ended November 30, 1997 to $1,480,000 or 26.7% of sales for
the three months ended November 30, 1998. The largest increase in the first
three months of 1998 as compared to 1997 was the increase of $97,000 in
depreciation expense. This increase in depreciation expense was due to the
Company's capital expansion program, which resulted in a $3.0 million increase
in property, plant and equipment as of November 30, 1998 as compared to November
30, 1997. Other increases include a $53,000 increase in indirect labor and a
$57,000 increase in manufacturing supplies. Decreases in manufacturing overhead
expense for the three months ended November 30, 1998, as compared to the
comparable period for 1997, include; a $19,000 decrease in insurance expense, a
$14,000 decrease in machinery repairs and maintenance, a $4,000 decrease in
perishable tooling, a $4,000 decrease in truck expense and $13,000 decrease in
other manufacturing overhead expense items.
S,G & A EXPENSES - Selling, general and administrative expenses decreased from
approximately $504,000 for the three months ended November 30, 1997 to
approximately $435,000 for the three months ended November 30, 1998. This
decrease was largely due to decreases in legal and professional expense of
$58,000, public company expenses of $49,000, sale commissions expense of $12,000
and miscellaneous expenses of $12,000. Increases in selling, general and
administrative expense during the three months ended November 30, 1998 as
compared to the same period in 1997 occurred in directors fees expense, an
increase of $20,000, and deferred compensation/401(k) expense, an increase of
$42,000. As a percentage of sales, selling, general and administrative expenses
were 7.8% for the three months ended November 30, 1998 compared to 9.3% for the
three months ended November 30,1997.
INTEREST EXPENSE - Interest expense for the three months ended November 30, 1998
was approximately $123,000 as compared to approximately $132,000 for the three
months ended November 30, 1997. As a percentage of sales, interest expense
decreased from 2.4% for the three months ended November 30, 1997 as compared to
2.2% for the three months ended November 30, 1998.
The decrease in interest expense was a result of the Company's lower interest
rates from prime plus one quarter percent during the three months ended November
30, 1997 to one quarter below prime rate for the three months ended November 30,
1998. During the first quarter ended November 30, 1998 the
10.
<PAGE> 11
Company capitalized $120,800 of interest on it's construction in process.
Lastly, debt levels as of November 30, 1998 was higher from November 30, 1997,
$11.6 million from $8.2 million, respectively.
FEDERAL INCOME TAXES
The effective federal income tax rate was 34% for the three months ended
November 30, 1998, as compared to 36% for the three months ended November 30,
1997. As of August 31, 1998, the Company had approximately $988,000 of net
operating loss carryforwards that expire 2010 through 2017, investment tax
credit carryforwards of approximately $172,000 that expire 1999 through 2003 and
alternative minimum tax credits of approximately $250,000, the use of which do
not expire.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended November 30, 1998, the Company's cash used in
operating activities was $2,528,555. The capital used in operating activities
was primarily due to an increase in the Company's Accounts Receivable of
$1,191,836 and an increase in Work-in-Process of $2,473,862.
From Investing Activities, the Company acquired additional machinery and
equipment of $863,686.
From Financing Activities, the Company was provided from financing activities a
total of $3,417,918 during the three months ended November 30, 1998. During
this period, the Company increased its revolving line of credit by $2,299,075
in order to finance the increases in the Company's work-in-process and
accounts receivable. The Company drew $1,281,345 on its equipment line of
credit to finance its acquisition of machinery and equipment.
YEAR 2000 COMPLIANCE
The Company has received its computer technology in order to ensure year
2000 compliance. The Company primarily utilizes computer technology in its CAD
design, Numerically Controlled programming and its manufacturing information
systems.
The Company has recently replaced and upgraded both its CAD design and
Numerically Controlled programming computer systems. Although both these
systems are not date sensitive, these new systems are year 2000 compliant. The
manufacturing information systems utilize computer software which can be
upgraded to eliminate any timing issues. In addition, any such costs involved
with the upgrades are covered under maintenance contracts with the respective
software vendors. Management believes any other associated costs of such
upgrades would be insignificant. All of the Company's computer hardware
equipment appears to be able to integrate any software upgrades necessary in
order to be year 2000 compliant. Moreover, the Company continues to review for
any year 2000 compliance issues that customers or suppliers may encounter with
their own systems. Management believes that any customer or supplier year 2000
issues will not be relevant to the Company's operations or to its interaction
with such persons.
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 13, 1999
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)
11.
<PAGE> 12
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, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> NOV-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 2,801,108
<ALLOWANCES> 0
<INVENTORY> 14,141,889
<CURRENT-ASSETS> 17,287,284
<PP&E> 21,043,657
<DEPRECIATION> 7,312,963
<TOTAL-ASSETS> 31,975,971
<CURRENT-LIABILITIES> 2,588,008
<BONDS> 11,291,114
0
0
<COMMON> 14,512,185
<OTHER-SE> 1,887,531
<TOTAL-LIABILITY-AND-EQUITY> 31,975,971
<SALES> 5,556,996
<TOTAL-REVENUES> 5,556,996
<CGS> 4,215,868
<TOTAL-COSTS> 435,284
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 121,408
<INCOME-PRETAX> 784,436
<INCOME-TAX> 266,708
<INCOME-CONTINUING> 517,728
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 517,728
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
