Rivieras Net Sales Up 141 Percent
GRAND RAPIDS —Riviera Tool Co. returned to profitability during the second quarter ended Feb. 28, with the company reporting net income of $231,348.
That works out to 7 cents per diluted share, reversing a loss of $687,990, or 20 cents per diluted share, for the same period in fiscal 2002.
According to the company, profit in the just-completed quarter was largely a result of increased revenue generated from its contract backlog.
Net sales increased 141 percent to $8.3 million, compared with net sales of $3.5 million for the same period in fiscal 2002, which Riviera attributed to new contracts for stamping die systems that were awarded in the second half of fiscal 2002.
The new contracts, along with more than $16 million in orders secured during the just-completed quarter, allowed the company to report a record backlog of $32.7 million as of Feb. 28.
President and CEO Kenneth Rieth said that while the past several years have been challenging for the industry, Riviera adjusted its business model to meet changing demands. The company’s investments in new technology and processes, he said, helped secure substantial new contracts. He anticipates fiscal 2003 “should be a good year.”
Riviera Tool has increased its workforce 31 percent since the beginning of the fiscal year, adding new engineers, program managers and die makers to meet production demands.
The $16 million in contracts awarded to the company in the just-passed quarter are for work for Mercedes Benz, DaimlerChrysler, Ford Motor Co., International Truck and Freightliner. Riviera will serve as a program manager for the Mercedes M-Class sport utility vehicle, leading the work of 10 West Michigan tooling suppliers.
“We look to grow in a controlled and sensible way that will allow us to improve our margins while we take on substantial new contracts,” Rieth said. “We also look to grow and expand our partnership with other tooling suppliers in West Michigan.”For the six months ended Feb. 28, Riviera posted net income of $42,434 vs. a net loss of $1.5 million from the first six months of fiscal 2002. Net sales rose 85.5 percent to $12.6 million for the first half of fiscal 2003, compared with net sales of $6.8 million for the same period in 2002.