Regional Quarterly Report Roundup

August 2, 2002
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Rivera Tool Co. (AMEX: RTC) reported a 61 percent net sales increase to $3.7 million for the third quarter ended May 31, compared with net sales of $2.3 million for the same period last year.

The company attributed the improvement to a continued increase in contract backlog.

Riviera narrowed its net loss to $452,632 for the third quarter, or 13 cents per share, compared with a net loss of $938,519, or 28 cents per share, in the year-ago quarter. The company also reduced its operating loss by 76 percent during the quarter.

Kenneth Rieth, president and CEO, said Riviera captured substantial new contracts during the third quarter and was able to improve its performance by managing costs better.

“The past two years have been incredibly difficult for our industry, but we are finally beginning to see automakers release new orders,” Rieth said. “With new contracts and a healthy backlog, we expect to be on the road to profitability in the near term.”

In the just-completed quarter, Riviera received orders for approximately $17.6 million, bringing the estimated contract backlog to $21.7 million as of May 31, compared to $9.3 million a year ago.

The company expects new contracts will contribute to financial results over the next 18 to 24 months.

X-Rite Inc. (Nasdaq: XRIT) reported sales of $24.4 million for the second quarter ended June 29. Sales for the quarter were equal to last year’s level, but up by $3.4 million from the first quarter of this year.

Operating income was $1.6 million, compared to the first quarter’s loss of $0.3 million and operating income of $1.9 million for 2001’s second quarter.

After a $6.6 million write down of technology investments made by XR Ventures, the company reported a net loss of $5.5 million, or 27 cents a share for the second quarter, compared to net income of $1.8 million, or 8 cents per share for the same period last year.

Net sales were $45.4 million for the first six months, compared with $49.8 million in the first half of 2001. Operating income for the six-month period was $1.3 million, compared with operating income of $4.8 million one year ago.

Net loss for the same six-month period was $5.7 million, or 28 cents per share, compared with net income of $4.2 million, or 19 cents per share for the comparable period last year.

CEO Rich Cook said the 16.4 percent growth in sales in the second quarter over the company’s first quarter performance demonstrates that X-Rites’ sales and marketing efforts are beginning to generate results despite continued weakness in the North American capital goods markets.

While operations generated profits, net income was adversely effected by the write down of several XR Venture investments, Cook said, noting that venture investing is high risk and the loss of a portion of the seed money was anticipated.

He said the company believes that remaining XR Ventures’ investments are solid.

During the second quarter, the company expanded its operation in China by opening a new headquarters in Shanghai, X-Rite (Shanghai) International Trading Co., Limited.

The location will be equipped with the first full service center of its kind in Asia serving color measurement and management solutions. 

Tower Automotive Inc. (NYSE: TWR) reported revenues of $751 million for the second quarter ended June 30, compared with $642 million in 2001’s second quarter.

Reported net income for the quarter was $23 million, or 37 cents per diluted share, compared with net income of $17 million, or 35 cents per diluted share, for the same period a year ago.

Revenues for the first six months were $1.4 billion, compared with $1.3 billion a year ago. Net income for the first half was $37 million, or 66 cents per share.

Net loss was $124 million year to date, or a loss of $2.35 per share, compared with net income of $30 million, or earnings of 0.63 cents a share, in the first half of 2001.

“The end of the second quarter marks the end of the journey which started in October 2000 toward the financial strengthening and mitigation of risk associated with the business,” said president and CEO Dug Campbell.

“The current strong backlog, geographic dispersion of sales driven by this growth, addition of new customers in Europe and Asia, and reduction of financial leverage are all the results of this risk mitigation effort.”

Campbell said continued positive cash flow and reduction of leverage are anticipated in the future.

O.A.K Financial Corp. (OKFC), the holding company for Byron Center State Bank, reported second quarter net income of $67,000, or 0.03 cents per share, compared to $1.45 million, or 72 cents per share for the same period last year.

Net income year-to-date is $1.43 million, or 70 cents per share, compared to $2.7 million, or $1.33 per share for the year-ago period.

O.A.K. attributes the decrease in earnings over last year to an increase in provision for loan losses and operating expenses. The loan loss provision was $2,045,000 in the second quarter of 2002, compared with $600,000 in the first quarter of this year and $610,000 in 2001’s second quarter.

According to the company, the significant increase in the provision for loan losses is a result of increased charge-offs, a change in the bank’s loan rating system and continued weak economy.

Higher net charge-offs have been experienced in the commercial lending and indirect consumer lending business areas. The bank’s indirect consumer loan portfolio has been intentionally reduced by approximately 15 percent since last October to help lower risk in that area, the company said.

The company said the continued economic slowdown has made it difficult for some of its customers to repay their loans according to loan terms.

Presently, the bank has approximately $7 million in non-performing loans, compared to $5.6 million reported at the end of the first quarter. Bank management said it will continue to work with those customers to reduce the level of non-performing loans.

The company’s total assets increased to $515 million at June 30, compared to $476 million at June 30, 2001. During the same period, total loans increased 8 percent and deposits increased 10 percent.

Founders Financial Corp., parent company of Founders Trust Personal Bank, posted its second consecutive quarter of record earnings.

Earnings for the second quarter increased to $524,088, a 110 percent increase from last year’s second quarter earnings of $249,378. Earnings per share for the second quarter were 76 cents per share, up from 41 cents per share in 2001’s second quarter.

Total assts now exceed $161 million, compared with $137 million in June 2001.

Deposits and portfolio loans have maintained double-digit growth percentages, increasing 20 percent and 21 percent, respectively, during the past 12 months. According to Founders, credit quality of the bank’s loan portfolios remains strong.

Founders’ board of directors declared a 10 percent stock dividend for shareholders of record as of July 17, 2002.

Huntington Bancshares Inc. (Nasdaq: HBAN) reported second quarter earnings of $82.2 million, or 33 cents per common share, compared with earnings of $2.4 million, or 0.01 per common share, in 2001’s second quarter.

The results are down from the $97.7 million, or 39 cents per common share, posted in the first quarter this year.

Year-to-date earnings were $180 million, or 72 cents per share, compared with $70.2 million, or 28 cents per common share in the first six months of 2001.

On an operating basis, which excludes one-time items and the impact of the sale of the company’s Florida banking operations, second quarter 2002 earnings were $81.7 million, or 33 cents per common share, up from earnings of $75.6 million, or 30 cents per share, in the year-ago quarter. Operating earnings for the first six months were$161.2 million, or 65 cents per common share, up 10 percent and 12 percent, respectively, from the first half of 2001.

The bank’s efficiency ratio improved to 53.2 percent.

According to Thomas Hoaglin, chairman, president and CEO, during the just passed quarter Huntington launched its new 401(k) platform for business customers, completed installation and initial training of its new banking office Customer Service System, and installed enhanced teller platform technology in 13 of its branches. All branches are to be converted to the technology by year’s end.

Fifth Third Bancorp (Nasdaq: FITB)reported operating earnings of $404 million for the second quarter, up 19 percentover operating earnings of $338.2 million for the same period a year ago.

Operating earnings for the quarter exclude $210 million or after-tax merger charges associated with the merger and integration of Old Kent Bank.

Operating earnings were $794 million for the first six months, up 23 percent from operating earnings of $644.4 million for the first half of 2001. Operating earnings per diluted share were 68 cents for the quarter, compared to 58 cents posted in last year’s second quarter.

Return on average assets (ROA) was 2.20 percent and return on average equity (ROE) was 20.2 percent for the quarter, compared with 1.89 percent and 18.9 percent, respectively, for 2001’s second quarter.

The bank’s efficiency ratio improved to 43.5 percent in the second quarter from 49.3 percent in 2001’s second quarter.

According to the company, accounts added during the just passed quarter contributed to 36 percent year-over-year growth in average transaction account balances.

Loan and lease demand improved in the second quarter with average total loans and leases, excluding held-for-sale, increasing 13 percent on an annualized sequential basis. The increase was driven primarily by strong direct loan originations and an overall 10 percent increase in installment loan balances.

President and CEO George Schaefer Jr. noted that during the quarter Moody’s Investors Service further upgraded Fifth Third Bancorp’s senior debt ratings to Aa2, a rating equaled or surpassed by only three other U.S. bank holding companies.

The Perrigo Company (Nasdaq: PRGO) board of directors has authorized the repurchase of an additional $20 million of the company’s common stock under its ongoing share repurchase program. As of July 1, Perrigo had 72,550,165 common shares outstanding.

Under share repurchase authorizations since November 2000, Perrigo has repurchased approximately 3 million shares at a cost of approximately $38 million.

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