<PAGE>


                                                                      EXHIBIT 13

FINANCIAL OVERVIEW

Selected Financial Data

The following selected financial data should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the Financial Statements and related Notes contained herein. All
amounts are in thousands, except per share data.

<TABLE>
<CAPTION>
                                                                       YEAR ENDED AUGUST 31,
                                                       -----------------------------------------------------
    STATEMENT OF OPERATION DATA:                       1997        1998        1999       2000        2001
    ----------------------------                     --------    --------    --------   --------    --------
<S>                                                  <C>        <C>       <C>        <C>         <C>
    Sales ........................................   $ 21,960    $ 22,581    $ 22,821   $ 25,187    $ 12,047
    Gross Profit (Loss) ..........................      5,128       5,484       5,875      3,794      (3,062)
    Income (Loss) from Operations ................      3,424       3,821       3,856      1,655      (4,712)
    Interest Expense .............................      1,211         244         343        890         725
    Other Income/(Expense) .......................       (361)       (132)        169       (119)         (5)
    Income (Loss) before Income Taxes ............      1,851       3,445       3,682        645      (5,442)
    Income Tax Expense (Benefit) .................        667       1,040       1,252        242      (1,538)
                                                     --------    --------    --------   --------    --------
    Net Income (Loss) ............................      1,185       2,405       2,430        404      (3,904)
                                                     --------    --------    --------   --------    --------
    Dividends ....................................          7         202          --         --          --
                                                     --------    --------    --------   --------    --------
    Net Income (Loss) available for common shares    $  1,178    $  2,203    $  2,430   $    404    $ (3,904)
                                                     ========    ========    ========   ========    ========
    Basic Earnings (Loss) per common share........   $    .57    $    .78    $    .72   $    .12    $  (1.16)
                                                     ========    ========    ========   ========    ========
    Basic common shares outstanding ..............      2,067       2,820       3,379      3,379       3,379
                                                     ========    ========    ========   ========    ========
    Diluted Earnings (Loss) per common share .....   $    .57    $    .73    $    .72   $    .12    $  (1.16)
                                                     ========    ========    ========   ========    ========
    Diluted common shares outstanding ............      2,065       3,294       3,379      3,379       3,379
                                                     ========    ========    ========   ========    ========
    OTHER DATA:
    -----------
    Depreciation and amortization expense ........   $  1,298    $  1,292    $  1,579   $  1,940    $  1,952
                                                     ========    ========    ========   ========    ========
</TABLE>


<TABLE>
<CAPTION>
                                                                            AS OF AUGUST 31,
                                                       -----------------------------------------------------------
    BALANCE SHEET DATA:                                  1997        1998        1999         2000        2001
    -------------------                                ----------  ----------  ----------  -----------  ----------
<S>                                                      <C>       <C>         <C>         <C>           <C>
    Working Capital...............................       $ 6,982   $ 11,297    $ 10,981    $  13,051     $  5,176

    Total Assets..................................        20,056     27,696      33,928       35,076       25,146

    Current Portion of Long-Term Debt.............           650        877       1,889        1,984        1,876

    Revolving Line of Credit......................         4,711      3,863       2,032        5,080        3,143

    Long-term Debt,  less current portion.........         3,142      4,334       7,207        5,223        3,384

    Common Stockholders' Equity...................         9,722     15,882      18,312       18,715       14,812
</TABLE>



Note: Fiscal 1997, 1998 and 1999 been revised to give effect for the issuance of
stock dividends.

                                       17
<PAGE>


The following table is derived from the Company's Statement of Operations and
sets forth, for the periods indicated, selected operating data as a percentage
of sales.

<TABLE>
<CAPTION>
                                                                     FISCAL YEAR ENDED AUGUST 31,
                                                      -------------------------------------------------------
     STATEMENT OF OPERATION DATA:                       1997       1998       1999        2000       2001
     ----------------------------                     ---------  ---------- ----------  ---------- ----------
<S>                                                  <C>         <C>        <C>         <C>        <C>
     Net Sales.....................................    100%        100%       100%        100%       100%
     Gross Profit (Loss)...........................     23          24         26          15        (25)
     Income (Loss) from Operations.................     16          17         17           7        (39)
     Interest Expense..............................      6           1          1           4          6
     Other Income/(Expense)........................     (2)         --         --          --         --
     Income (Loss) before Income Taxes.............      8          16         16           3        (45)
     Federal Income Tax (Benefit)..................      3           5          5           1        (13)
                                                      ---------  ---------- ----------  ---------- ----------
     Net Income (Loss).............................      5%         11%        11%          2        (32)
                                                      ---------  ---------- ----------  ---------- ----------
     Dividends.....................................     --           1         --          --         --
                                                      ---------  ---------- ----------  ---------- ----------
     Net Income (Loss) available for common shares.      5%         10%        11%          2%       (32%)
                                                      =========  ========== ==========  ========== ==========
     OTHER DATA:
     -----------
     Depreciation and amortization expense.........      6%          6%         7%          8%        16%
                                                      =========  ========== ==========  ========== ==========
</TABLE>


Quarterly Financial Data

The following is a condensed summary of quarterly results of operations for
1999, 2000 and 2001 (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                            NET INCOME          BASIC                DILUTED
                                                                              /(LOSS)    --------------------   --------------------
                                                                             AVAILABLE    EARNINGS              EARNINGS
                                             GROSS     OPERATING      NET       FOR        (LOSS)    COMMON      (LOSS)    COMMON
                                            PROFIT/     INCOME/     INCOME/    COMMON       PER      SHARES       PER       SHARES
                                 REVENUES   (LOSS)      (LOSS)      (LOSS)     SHARES      SHARE   OUTSTANDING   SHARE   OUTSTANDING
                                ---------  --------    ---------  --------- -----------   --------- ----------- -------- -----------
<S>                             <C>        <C>        <C>        <C>          <C>       <C>        <C>          <C>      <C>
   1999: First ..............    $ 5,557    $ 1,341     $   906     $   518    $   518    $    .15     3,380    $    .15    3,380
   ----  Second .............      5,071      1,632       1,081         695        695         .21     3,380         .21    3,380
         Third ..............      6,445      1,939       1,389         805        805         .24     3,380         .24    3,380
         Fourth .............      5,748        963         480         412        412         .12     3,380         .12    3,380
                                 -------    -------     -------     -------    -------    --------   -------    --------  -------
           Total ............    $22,821    $ 5,875     $ 3,856     $ 2,430    $ 2,430    $    .72     3,380    $    .72    3,380
                                 =======    =======     =======     =======    =======    ========   =======    ========  =======

   2000: First ..............    $ 5,855    $ 1,197     $   742     $   354    $   354    $    .10     3,379    $    .10    3,312
   ----  Second .............      5,176         27        (751)       (664)      (664)       (.20)    3,379        (.20)   3,312
         Third ..............      6,675      1,311         853         369        369         .11     3,379         .11    3,312
         Fourth .............      7,481      1,259         811         345        345         .11     3,379         .11    3,379
                                 -------    -------     -------     -------    -------    --------   -------    --------  -------
           Total ............    $25,187    $ 3,794     $ 1,655     $   404    $   404    $    .12     3,379    $    .12    3,379
                                 =======    =======     =======     =======    =======    ========   =======    ========  =======

   2001: First ..............    $ 4,592    $   265     $  (263)    $  (332)   $  (332)   $   (.10)    3,379    $   (.10)   3,379
   ----  Second .............      2,386     (1,346)     (1,667)     (1,243)    (1,243)       (.37)    3,379        (.37)   3,379
         Third ..............      2,302       (848)     (1,275)       (939)      (939)       (.28)    3,379        (.28)   3,379
         Fourth .............      2,767     (1,133)     (1,507)     (1,390)    (1,390)       (.41)    3,379        (.41)   3,379
                                 -------    -------     -------     -------    -------    --------   -------    --------  -------
           Total ............    $12,047    $(3,062)    $(4,712)    $(3,904)   $(3,904)   $  (1.16)    3,379    $  (1.16)   3,379
                                 ================================================================================================
</TABLE>


                                       18
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

GENERAL OVERVIEW

    The Company is a designer and manufacturer of large scale, complex stamping
die systems used to form sheet metal parts. Most of the stamping die systems
sold by the Company are used in the high-speed production of automobile and
truck body parts such as doors, door frames, structural components and bumpers.
A majority of the Company's sales are to DaimlerChrysler AG, Ford Motor Company,
General Motors Corporation and their tier one suppliers of sheet metal stamped
parts and assemblies.

RESULTS OF OPERATIONS

    The following discussion and analysis should be read in conjunction with the
Company's Financial Statements and the Notes thereto included elsewhere herein.


FISCAL 2001 COMPARED TO FISCAL 2000

Revenue. Total revenue for 2001 decreased from approximately $25.2 million in
2000 to $12.0 million in 2001, a decrease of 52%. This was a result of the
market decrease for automotive tooling systems during the past eighteen months.
In addition to limited contracts being released during the period, those
contracts that were released, were competitively bid and resulted in extreme
erosion of contract pricing. These factors in tandem have lowered contract
revenue as well as contract margins during late fiscal 2000 and all of 2001. The
Company, in securing new contracts during fiscal 2001, utilized a strategy of
bidding on contracts at rates that would maintain contribution margin if such
was awarded to the Company.

As of August 31, 2001, the Company's backlog was approximately $6.9 million as
compared to $10.6 million at August 31, 2000. During the last two quarters of
2000 and all of 2001, the automotive tooling industry has experienced a slowdown
in product demand. The decrease in tooling demand and the resultant reduction in
the Company's backlog negatively effected the Company's financial performance
during fiscal 2001 and will continue at least through the first and second
quarters of fiscal 2002.

Cost of Goods Sold. Cost of goods sold decreased from $21.4 million for 2000 to
$15.1 million for 2001. However, as a percent of sales, cost of goods sold
increased from 84.9% for 2000 to 125.4% for 2001. The cost decrease was a direct
result of lower contract levels and related revenues experienced during 2001.
The increase, as a percent of sales, was primarily in manufacturing overhead,
changing from 28.1% in 2000 to 53.3% in 2001.

During fiscal 2001, the Company recorded a $765,000 loss on certain contracts
with one of its customers. This loss was a result of a dispute between the
Company and its customer over the manufacture of stamping die systems for an
auto frame assembly. This dispute resulted in the Company being a Defendant in a
lawsuit with the customer ("Plaintiff") asking for recovery of $850,000 in
damages. The Company has counterclaimed against Plaintiff for an additional sum
of approximately $1,000,000 for amounts unpaid in connection with its services
under the agreement.

Of the cost of goods sold, direct costs were $7.5 million, 62.4% of sales, in
2001 as compared to $12.5 million, 49.6% of sales, in 2000. Direct materials
expense decreased from $3.1 million in 2000 to $2.7 million in 2001, but
increased as a percent of sales from 12.5% to 22.2%. This increase as a percent
of sales was largely due to lower contract margins during 2001. Direct labor
decreased from $6.4 million in 2000 to $3.9 million in 2001, but increased as a
percent of sales from 25.3% to 32.4%. Direct labor hours decreased from 338,000
hours in 2000 to 204,000 in 2001, a decrease of 40%. This decrease was a result
of the Company having lower contract levels during 2001 thus lowering direct
labor requirements. The Company, in an effort to contain costs, implemented
direct labor layoffs and wage concessions during the year in order to lower
direct labor expense. Outside service expense decreased from $3.0 million or
11.8% of sales in 2000 to $936,000 or 7.8% of sales in 2001. This decrease was a
result of the Company having the capacity to perform more services internally,
as a result of lower contract levels during 2001.



                                       19
<PAGE>

Engineering expense decreased from $1.8 million for 2000 to $1.2 million for
2001. However, as a percent of sales, engineering expense was 7.2% in 2000 as
compared to 9.7% in 2001. The decrease in engineering costs was due to the
Company lowering the number of engineering personnel and implementing wage
concessions during part of the year. These measures lowered engineering labor
costs by approximately $521,000 in 2001. Additionally, the Company lowered its
utilization of outside contract engineering services during 2001 thus lowering
such costs by $134,000.

Manufacturing overhead was $6.4 million or 53.3% of sales in 2001 as compared to
$7.1 million or 28.1% of sales in 2000. This decrease of $700,000 was largely
due to a $363,000 decrease in supervisory and indirect labor and $486,000 in
manufacturing supplies and perishable tooling expenses. Increases included
$220,000 in building rent and $114,000 in property tax expense. These increases
were a result of the expiration of a sublease in November, 2000 of a portion of
the Company's facility to an unaffiliated entity for which the tenant also
shared in certain operating expenses.

Selling and Administrative Expense. Selling and administrative expense decreased
from $2.1 million for 2000 to $1.6 million for 2001. As a percent of sales,
selling and administrative expense increased from 8.5% in 2000 to 13.7% in 2001.
The largest selling and administrative expense decreases in 2001 were $341,000
in salaries, $99,000 in the State of Michigan Single Business Tax, $32,000 in
deferred compensation - 401(k) expense, $36,000 in travel expenses and $29,000
in public company costs. During 2001 these decreases were partially offset by an
increase of $47,000 in legal and professional fees expense.

Interest Expense. Interest expense decreased from $890,000 in 2000 to $725,000
in 2001 and increased as a percent of sales from 3.5% in 2000 to 6.0% in 2001.
This decrease was due to lower average debt levels and a decrease in interest
rates during 2001. The decrease in outstanding debt was attributed to lower
sales in 2001 as compared to 2000, which lowered the amount of working capital
financing required for the Company's long-term contracts.


FISCAL 2000 COMPARED TO FISCAL 1999

Revenue. Total revenue for 2000 increased from approximately $22.8 million in
1999 to $25.2 million in 2000. The increase in 2000 sales was due to the
Company's increase in securing contracts during 1999 and 2000. During 1998 and
1999, the Company increased its manufacturing capacity to approximately $35.0
million per annum through a capital expansion program. This additional capacity
has allowed the Company to accept additional contracts and increase its
revenues.

As of August 31, 2000, the Company's backlog was approximately $10.6 million as
compared to $17.0 million at August 31, 1999. During the last two quarters of
2000, the automotive tooling industry had experienced a slowdown in product
demand.

Cost of Goods Sold. Cost of goods sold increased from $16.9 million for 1999 to
$21.4 million for 2000. As a percent of sales, cost of goods sold increased from
74.3% for 1999 to 84.9% for 2000. Of the cost of goods sold, direct costs were
$9.2 million, 40.2% of sales, in 1999 as compared to $12.5 million, 49.6% of
sales, in 2000. The increase in cost of sales, as a percentage of sales, was
largely a result of cost overruns on four contracts during the year ended August
31, 2000. The increase in costs were attributable to various difficulties in
manufacturing the dies to the customers' specifications.

The largest increase in cost of sales was in direct expenses, an increase of
$3.3 million or 9.4% of sales. Direct labor increased from $4.3 million or 18.6%
of sales in 1999 to $6.3 million or 25.3% of sales in 2000. This increase was a
result of the Company experiencing increased direct labor hours of 40,000 hours
and 17,000 in overtime requirements in 2000, as compared to 1999.

Outside service expense increased from $433,000 or 1.9% of sales in 1999 to
$1,550,000 or 6.2% of sales in 2000. This consisted of a freight expense
increase of $313,000 due to shipping requirements of customers to Mexico and
South Carolina, as well as laser services expense and fixtures expense, an



                                       20
<PAGE>

increase of $316,000 and $248,000, respectively, resulting from an increase of
prototype services and part requirements the Company experienced during 2000 as
compared to 1999.

Engineering expense increased slightly from $1.6 million for 1999 to $1.8
million for 2000. As a percent of sales, engineering expense was 7.1% in 1999 as
compared to 7.2% in 2000. The increase was due to the Company experiencing an
increase in design services and requiring outsourcing die design services during
2000, whereas in 1999, the Company had no such outsourcing expense.

 Manufacturing overhead was $6.1 million or 26.9% of sales in 1999 as compared
to $7.1 million or 28.1% of sales in 2000. This increase of $1.0 million was
largely due to a $285,000 increase in depreciation expense in 2000 as compared
to 1999 because of the Company`s capital expansion which was completed at the
end of 1999. Other increases include $54,000 in property taxes as a result of
the increase in machinery and equipment and the expiration of certain tax
abatements, $204,000 in perishable tooling expense as a result of increased
internal machining hours, $130,000 in payroll taxes due to increase in payroll
expense, $64,000 in machinery repairs and maintenance expense, $45,000 in
utilities expense and $96,000 in employee medical insurance expense.

Selling and Administrative Expense. Selling and administrative expense increased
from $2.0 million for 1999 as compared to $2.4 million for 2000. As a percent of
sales, selling and administrative expense decreased from 8.8% in 1999 to 8.5% in
2000. The largest administrative expense increases in 2000 were $110,000 in
salaries and $50,000 in the State of Michigan Single Business Tax. During 2000
these increases were partially offset by decreases in general expenses of
$30,000 in public company expenses and $49,000 in insurance expense.

Interest Expense. Interest expense increased from $343,000 in 1999 to $890,000
in 2000 and 1.5% in 1999 to 3.5% in 2000, as a percent of sales. This increase
was due to higher average debt levels required to finance the increase in the
Company's long-term contracts during 2000, as well as in 1999 the Company
capitalized interest cost associated with its construction in process of
$601,330.

Other Income/Expense. Other expense for 1999 represents a negotiated settlement
for penalties and interest for late payment of 1995 and 1996 state income taxes.
Other income for 1999 largely represents a $140,000 gain as a result of a
settlement of certain litigation. During 2000, the Company incurred a loss of
$130,400 on the sale of certain machinery and equipment.

FEDERAL INCOME TAX.

The Company's effective income tax rates were 34%, 37% and a credit of 28% for
the years ended August 31, 1999, 2000 and 2001, respectively. The Company had
approximately $155,150 of alternative minimum tax credits as of August 31, 2001,
the use of which does not expire, and federal net operating loss carryforwards
of $8,275,000 which expire, if unused, in fiscal 2020 and 2021. The Company
recorded a valuation allowance of $312,000 in 2001 for net deferred tax assets
which may not ultimately be realized.

LIQUIDITY AND CAPITAL RESOURCES.

The Company's need for capital in 1999 and 2000 increased primarily to acquire
fixed assets and to finance the increase in trade accounts receivable and
contracts in process. The Company financed these needs during these periods
through internally generated funds and bank financing. During fiscal 2001 the
Company generated operational cash flow as a result of reduced working capital
requirements caused by the reduction in the amount of new contracts. The cash
flow from operations in 2001 of $4.6 million was primarily utilized to decrease
bank debt by $3.8 million and to fund $652,000 of asset acquisitions. The
Company anticipates less than $400,000 in capital expenditures for fiscal 2002.

The Company's total bank debt as of August 31, 2001, is $8,402,360, of which
$1,875,631 is short-term. As of August 31, 2001, the Company has a $6.5 million
Revolving Line of Credit with a balance outstanding of $3,142,790, term notes
with an aggregate outstanding balance of $3,436,098 and a $3,271,000
Non-Revolving Equipment Line of Credit with an outstanding balance of
$1,823,472. Of the outstanding debt,



                                       21
<PAGE>

$5,507,964 bears interest at variable rates. The interest rate on the variable
rate debt is the bank's prime rate less .25 percent (an effective rate of 6.25%
at August 31, 2001), or the London Interbank Offered Rate plus 2.25%. The
weighted-average interest of the outstanding fixed rate debt of $2,894,431 is
7.43%. The Company believes that the unused portion of its credit line and the
funds generated from operations, will be sufficient to cover anticipated cash
needs through fiscal 2002. However, depending on the level of future sales, an
expanded credit line may be necessary to finance increases in trade accounts
receivable and contracts in process. The Company believes it will be able to
obtain such expanded credit line, if required, on generally the same terms as
the existing credit line.

INFLATION.

The Company has no long-term, fixed price supply contracts. Although the average
set of dies takes approximately ten months from inception to shipment, any
significant direct material costs are incurred at the beginning of the die
manufacturing process. Historically, the Company has been able to reflect
increases in the prices of labor and material in its selling prices, however
under current industry pricing pressures, the Company is unsure if this will
continue to be the case in the future.


                                       22
<PAGE>



                              Riviera Tool Company
                                 Balance Sheets



<TABLE>
<CAPTION>
                                                                                               August 31
                                                                                     ----------------------------
                                    ASSETS                               Note            2000           2001
                                    ------                               ----        -------------- -------------
<S>                                                                     <C>        <C>             <C>
      Current Assets
      --------------
      Cash..........................................................                $      113,699 $     282,721
      Accounts receivable...........................................       1             7,052,169     3,449,430
      Costs and estimated gross profit in excess
         of billings on contracts in process........................       4             8,564,651     4,153,569
      Inventories...................................................       5               306,675       308,977
      Federal income tax refundable.................................       8               673,897            --
      Prepaid expenses and other current assets.....................                       170,170        97,289
                                                                                    -------------- -------------
               Total current assets.................................                  16,881,261       8,291,986

      Property, plant and equipment, net............................       6            17,445,289    16,146,059
      Perishable tooling............................................       1               538,743       572,822
      Other assets..................................................                       210,770       135,770
                                                                                    -------------- -------------
               Total assets.........................................                $   35,076,063 $  25,146,637
                                                                                    ============== =============

                                LIABILITIES AND
                            STOCKHOLDERS' EQUITY

      Current Liabilities
      -------------------
      Current portion of long-term debt.............................       7        $    1,983,964 $   1,875,631
      Accounts payable..............................................                     1,410,834       898,212
      Accrued liabilities...........................................                       434,689       342,007
                                                                                    -------------- -------------
               Total current liabilities............................                     3,829,487     3,115,850

      Long-term debt, net of current portion........................       7            10,303,197     6,526,729
      Accrued lease expense.........................................       9               689,758       692,094
      Deferred tax liability........................................       8             1,538,000            --
                                                                                    -------------- -------------
               Total liabilities....................................                    16,360,442    10,334,673

      Preferred stock -- no par value,
      $100 mandatory redemption value:
         Authorized -- 5,000 shares
         Issued and outstanding -- no shares..........................                          --            --
      Preferred stock -- no par value,
          Authorized -- 200,000 shares
          Issued and outstanding -- no shares........................                           --            --
      Common stockholders' equity
        Common stock -- no par value,
          Authorized -- 9,798,575 shares
          Issued and outstanding -- 3,379,609 shares.................       2           15,115,466    15,115,466
        Retained earnings (deficit).................................                     3,600,155     (303,502)
                                                                                    -------------- -------------
               Total common stockholders' equity....................                    18,715,621    14,811,964
                                                                                    -------------- -------------
      Total liabilities and stockholders' equity....................                $   35,076,063 $  25,146,637
                                                                                    ============== =============
</TABLE>



                        See Notes to Financial Statements



                                       23
<PAGE>


                              Riviera Tool Company
                            Statements of Operations


<TABLE>
<CAPTION>
                                                                                         Year Ended August 31
                                                                           ----------------------------------------------------
                                                                     Note      1999               2000               2001
                                                                     ----- -------------      -------------       -------------
<S>                                                                  <C>   <C>                 <C>                 <C>
    Sales ..........................................................       $ 22,820,998        $ 25,187,327        $ 12,047,039

    Cost of sales ..................................................         16,946,076          21,393,111          15,109,065
                                                                           ------------        ------------        ------------

    Gross profit (loss) ............................................          5,874,922           3,794,216          (3,062,026)

    Selling and administrative expenses ............................          2,019,195           2,139,346           1,649,558
                                                                           ------------        ------------        ------------
    Income (loss) from operations ..................................          3,855,727           1,654,870          (4,711,584)

    Other income (expense):

        Interest expense ...........................................           (343,484)           (889,578)           (725,267)

        Other ......................................................            166,316              10,733              (4,806)

        Gain/(loss) on asset sales .................................              3,273            (130,400)                 --
                                                                           ------------        ------------        ------------
    Total other expense, net .......................................           (173,895)         (1,009,245)           (730,073)
                                                                           ------------        ------------        ------------
    Income (loss) -- before income tax (benefit) ...................          3,681,832             645,625          (5,441,657)
                                                                           ------------        ------------        ------------
    Income tax expense (benefit) ...................................          1,251,824             242,000          (1,538,000)
                                                                           ------------        ------------        ------------
    Net income (loss) available for common shares ..................       $  2,430,008        $    403,625        $ (3,903,657)
                                                                           ============        ============        ============

    Basic and Diluted earnings (loss)  per common share ............       $        .72        $        .12        $      (1.16)
                                                                           ============        ============        ============
    Basic and Diluted common shares outstanding.....................  1       3,379,681           3,379,609           3,379,609
</TABLE>




                        See Notes to Financial Statements



                                       24
<PAGE>


                              Riviera Tool Company
                   Statements of Common Shareholders' Equity



<TABLE>
<CAPTION>
                                                                Common Stock                Retained           Total
                                                        ------------------------------      Earnings        Shareholders'
                                                  Note     Shares           Amount          (Deficit)          Equity
                                                  ----   -----------     -------------    -------------     -------------
<S>                                                <C>   <C>            <C>              <C>               <C>
                                                         -----------     -------------    -------------     -------------
        Balance -- August 31, 1998............            3,065,499      $  13,496,937    $   2,385,051     $  15,881,988
                                                         -----------     -------------    -------------     -------------


        Net income............................                   --                 --        2,430,008         2,430,008


        5% common stock dividend..............      2       153,245          1,015,248       (1,015,248)               --

                                                         -----------     -------------    -------------     -------------
        Balance -- August 31, 1999............            3,218,744      $  14,512,185    $   3,799,811     $  18,311,996
                                                         -----------     -------------    -------------     -------------

        Net income............................                    --                --          403,625           403,625


        5% common stock dividend..............      2       160,865            603,281         (603,281)               --


                                                         -----------     -------------    -------------     -------------
        Balance -- August 31, 2000............            3,379,609      $  15,115,466    $   3,600,155     $  18,715,621
                                                         ===========     =============    =============     =============

        Net loss..............................                   --                 --       (3,903,657)       (3,903,657)


                                                         -----------     -------------    -------------     -------------
        Balance -- August 31, 2001                        3,379,609      $  15,115,466    $    (303,502)    $  14,811,964
                                                         ===========     =============    =============     =============
</TABLE>



                        See Notes to Financial Statements


                                       25
<PAGE>


                              Riviera Tool Company
                            Statements of Cash Flows



<TABLE>
<CAPTION>
                                                                                Year Ended August 31
                                                                     -----------------------------------------
                                                                        1999           2000           2001
                                                                     -----------    -----------    -----------
<S>                                                                  <C>            <C>            <C>
    Cash Flows from Operating Activities
    ------------------------------------
     Net income (loss) ...........................................   $ 2,430,008    $   403,625    $(3,903,657)

    Adjustments to reconcile net income to net cash from operating
    activities:
          Depreciation and amortization ..........................     1,578,557      1,939,644      1,952,320
          (Gain) loss on sale of machinery and equipment .........        (3,273)       130,400             --
          Deferred taxes .........................................       605,902        151,722     (1,538,000)
          Decrease (increase) in assets:
          ------------------------------
             Accounts receivable .................................    (5,212,247)      (230,650)     3,602,739
             Costs and estimated gross profit in
             Excess of billings on contracts in  process .........     3,470,217       (734,907)     4,411,082
             Inventories .........................................       (45,601)       144,492         (2,302)
             Perishable tooling ..................................       193,332         11,891        (34,079)
             Federal income tax refundable .......................            --       (673,897)       673,897
             Prepaid expenses and other current assets ...........        87,865        (85,981)        72,881
          Increase (decrease) in liabilities:
          -----------------------------------
             Accounts payable ....................................       285,370         52,351       (512,622)
             Accrued lease expense ...............................        28,033         18,685          2,336
             Accrued liabilities .................................       826,302       (636,295)       (92,682)
                                                                     -----------    -----------    -----------
             Cash flows from operating activities ................     4,244,465        491,080      4,631,913
                                                                     -----------    -----------    -----------

    Cash Flows from Investing Activities
    ------------------------------------
      Proceeds from sale of property, plant and equipment ........       102,650         68,500             --
      (Increase) decrease in other assets ........................       109,000        (75,000)        75,000
      Purchases of property, plant and equipment .................    (6,402,994)    (1,642,174)      (653,090)
                                                                     -----------    -----------    -----------
              Net cash used in investing activities ..............    (6,191,344)    (1,648,674)      (578,090)
                                                                     -----------    -----------    -----------



    Cash Flows from Financing Activities
    ------------------------------------
      Net borrowings (repayments) on revolving credit line .......    (1,830,380)     3,047,525     (1,937,229)
      Proceeds from issuance of long-term debt ...................     4,925,128             --             --
      Principal payments on long-term debt .......................    (1,038,892)    (1,889,415)    (1,947,572)
                                                                     -----------    -----------    -----------
             Cash flows from (used in) financing activities ......     2,055,856      1,158,110     (3,834,801)
                                                                     -----------    -----------    -----------

    Net increase in cash .........................................       108,977            516        169,022
                                                                     -----------    -----------    -----------

    Cash -- beginning of year ....................................         4,206        113,183        113,699

    Cash -- end of year ..........................................   $   113,183    $   113,699    $   282,721
                                                                     ===========    ===========    ===========

    Other Cash Flow Items:
    ----------------------
    Interest paid ................................................   $   924,331    $   921,452    $   764,215
    Income taxes paid (refunded) .................................       252,490      1,355,000       (731,957)
</TABLE>


                        See Notes to Financial Statements



                                       26
<PAGE>


                              Riviera Tool Company
                          Notes to Financial Statements


NOTE 1 -- NATURE OF BUSINESS  AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS.
     Riviera Tool Company (the "Company") designs, develops and manufactures
     custom and complex large scale metal stamping die systems used in the
     high-speed production of sheet metal stamped parts and assemblies for the
     automotive industry. These systems are mainly sold to DaimlerChrysler AG,
     Ford Motor Company and General Motors Corporation and their tier one
     suppliers of sheet metal stamped parts and assemblies.

USE OF ESTIMATES.
     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenue and expenses
     during the reporting period. Although management believes the estimates are
     reasonable, actual results could differ from those estimates.

SIGNIFICANT ESTIMATES.
     The most significant estimates made by the Company are in the determination
     and recognition of revenue on contracts in process. Management's best
     estimate of costs to complete is based on costs incurred, engineers' cost
     projections, experience with customers or particular die systems and other
     analyses. Although management's estimates are not expected to materially
     change in the near term, the costs the Company will ultimately incur will
     differ from the amounts estimated.

REVENUE RECOGNITION.
     The Company recognizes revenue on time and material contracts utilizing the
     completed-contract method. Revenue is recognized on all other contracts
     utilizing the percentage-of-completion method. Under the completed-contract
     method, the contract is considered complete when all costs except for
     insignificant items have been incurred and the project has been approved by
     the customer. Under the percentage-of-completion method estimated contract
     earnings are based on total estimated contract profits multiplied by the
     ratio of labor hours incurred to total estimated labor hours on the
     contract. Provisions for total estimated losses on contracts in process are
     recognized in the period such losses are determined. Changes in job
     performance, conditions and estimated profitability may result in revisions
     to costs and income and are recognized in the period such revisions are
     determined.

ACCOUNTS RECEIVABLE.
     As of August 31, 2000 and 2001, the Company had no reserve for
     uncollectible accounts receivable and had $1,044,085 and $147,169 of
     unbilled accounts receivable (completed contracts for which revenue earned
     exceeds amounts billed), respectively.

INVENTORIES.
     Inventories are recorded at the lower-of-cost (first-in, first-out method),
     or market.

PROPERTY, PLANT AND EQUIPMENT.
     Property, plant and equipment are recorded at cost. Depreciation is
     computed using the straight-line method over the useful life of the asset
     for financial reporting purposes as follows:









                                       27
<PAGE>

                              Riviera Tool Company
                          Notes to Financial Statements

NOTE 1 -- NATURE OF BUSINESS  AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

<TABLE>
<CAPTION>
             ASSET                                                 USEFUL LIVES
             -----                                                 ------------
<S>                                                                  <C>
             -      Leasehold Improvements...................        7-20
             -      Office Furniture and Fixtures............        3-10
             -      Machinery and Equipment..................        5-20
             -      Computer Equipment and Software..........        5-20
             -      Transportation Equipment.................        5-10
</TABLE>

     Expenditures for maintenance and repairs are charged to expense as
     incurred. The Company capitalizes interest cost associated with
     construction in process. The amount of capitalized interest was $601,330,
     $71,158 and $21,572 in 1999, 2000 and 2001, respectively.

PERISHABLE TOOLING.
     Perishable tools are generally used up over five years, reported at cost as
     non-current assets in the balance sheet and amortized evenly over their
     useful lives.

INCOME TAXES.
     Deferred income tax assets and liabilities are computed for differences
     between the financial statement and tax bases of assets and liabilities
     that will result in taxable or deductible amounts in the future. Such
     deferred income tax asset and liability computations are based upon enacted
     tax laws and rates applicable to periods in which the differences are
     expected to affect taxable income. Valuation allowances are established
     when necessary to reduce deferred tax assets to the amounts expected to be
     realized. Income tax expense is the tax payable or refundable for the
     period plus or minus the change during the period in deferred tax assets
     and liabilities.

EARNINGS PER SHARE.
     Basic earnings per share excludes dilution and is computed by dividing
     income available to common shareholders by the weighted-average common
     shares outstanding for the period. Diluted earnings per share reflects the
     potential dilution that could occur if securities or other contracts to
     issue common stock were exercised.

STOCK-BASED COMPENSATION.
     The Company has adopted SFAS No. 123 ("SFAS 123"), Accounting for
     Stock-based Compensation, and as permitted by this standard, will continue
     to apply the recognition and measurement principles prescribed under
     Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
     Employees, to its stock-based compensation (see Note 11).

BUSINESS SEGMENT REPORTING.
     Based on the nature of its operations and products, the Company considers
     its business to be a single operating segment.

NOTE 2  -- STOCKHOLDERS INVESTMENT

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 November 24, 1999, the Company's Board of Directors declared a five-percent
common stock dividend, payable on February 1, 2000, to all shareholders of
record on December 29, 1999. On February 1, 2000, an additional 160,865 common
shares were issued as a stock dividend. All share and per share data presented
for fiscal 1999 have been adjusted to give effect to the five percent stock
dividend.




                                       28
<PAGE>

                              Riviera Tool Company
                          Notes to Financial Statements

NOTE 3 -- SALES TO MAJOR CUSTOMERS

The nature of the Company's business is such that a limited number of customers
comprise a majority of its business in any given year, even though the specific
customers will differ from year to year. The following table summarizes the
Company's sales to those customers, which represent more than 10% of the annual
sales, in the particular year presented, of the Company (in 000's):

<TABLE>
<CAPTION>
                                                                  AUGUST 31
                                     --------------------------------------------------------------------
                                      1999          %          2000         %          2001         %
                                   ----------- ----------- ------------- --------  ----------- ---------
<S>                               <C>          <C>         <C>           <C>       <C>         <C>
General Motors..............      $     5,744      25      $      2,324     9      $     3,975     33
DaimlerChrysler AG..........            5,171      23             8,604    34            2,588     21
Autodie International.......               --      --             2,584    10            1,871     16
Dana Corporation............               --      --                --    --            1,563     13
Budd Company................               --      --                --    --            1,135      9
L & W Engineering...........               --      --             2,701    11               --     --
Navistar International......            3,959      17                --    --               --     --
Oxford Automotive...........            2,968      13                --    --               --     --
Others......................            4,979      22             8,974    36              915      8
                                  ----------- ------------ ------------- --------  -----------  ---------
     Total Sales............      $    22,821     100%     $     25,187   100%     $    12,047    100%
                                  =========== ============ ============= ========  ===========  =========
</TABLE>

Outstanding account receivables from three of these customers represented
approximately 74 percent at August 31, 2000 and 2001 of the total accounts
receivable.

NOTE 4 -- COSTS AND BILLINGS ON CONTRACTS IN PROCESS
<TABLE>
<CAPTION>
                                                                                     AUGUST 31
                                                                         ---------------------------------
Costs and billings on contracts in process are as follows:                     2000             2001
                                                                           -------------    -------------
<S>                                                                      <C>             <C>
Costs incurred on contracts in process under the
percentage-of-completion method..................................        $   19,549,230  $     8,587,454
Estimated gross profit (loss)....................................             1,150,000         (650,000)
                                                                           -------------    -------------
     Total.......................................................            20,699,230        7,937,454
Less progress payments received and progress billings to date....            12,173,130        3,783,885
Plus costs incurred on contracts in process under
 the completed contract method...................................                38,550              --
                                                                         --------------   --------------
Costs and estimated gross profit in excess of billings
 on contracts in process.........................................        $    8,564,651   $    4,153,569
                                                                         ==============   ==============
</TABLE>

Included in estimated gross profit for 2000 and 2001 are jobs with estimated
losses accrued of $1,407,405 and $763,980, respectively.

NOTE 5-- INVENTORIES

Inventories consist of the following:
<TABLE>
<CAPTION>
                                                                                     AUGUST 31
                                                                           ------------------------------
                                                                               2000             2001
                                                                           -------------    -------------
<S>                                                                        <C>              <C>
Raw material stock...........................................              $    190,684     $    190,337
Small tools and supplies.....................................                   115,991          118,640
                                                                           -------------    -------------
         Total...............................................              $    306,675     $    308,977
                                                                           =============    =============
</TABLE>



                                       29
<PAGE>



                              Riviera Tool Company
                          Notes to Financial Statements


NOTE 6 -- PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
Property, plant and equipment consist of the following:                                            AUGUST 31
                                                                                      ------------------------------------
                                                                                          2000                     2001
                                                                                      -----------              -----------
<S>                                                                                         <C>                      <C>
Land and leasehold improvements ........................................              $ 1,293,845              $ 1,501,015
Office furniture and fixtures ..........................................                  194,256                  194,993
Machinery and equipment ................................................               22,468,979               22,865,732
Computer equipment and software ........................................                2,082,512                2,210,378
Transportation equipment ...............................................                  126,365                  133,365
Construction in process ................................................                  110,349                   23,913
                                                                                      -----------              -----------
   Total cost ..........................................................               26,276,306               26,929,396
Accumulated depreciation and  amortization .............................                8,831,017               10,783,337
                                                                                      -----------              -----------
   Property, plant and equipment, net ..................................              $17,445,289              $16,146,059
                                                                                      ===========              ===========


Depreciation & amortization  expense ...................................              $ 1,939,644              $ 1,952,320
                                                                                      ===========              ===========
</TABLE>

NOTE 7 -- LONG-TERM DEBT

The Company's long-term debt, which is subject to certain covenants discussed
below, consists of the following:

<TABLE>
<CAPTION>
                                                                                           AUGUST 31
                                                                                ------------------------------
                                                                                     2000             2001
                                                                                -------------    -------------
<S>                                                                             <C>              <C>
REVOLVING WORKING CAPITAL CREDIT LINE

The revolving working capital credit line is collateralized by substantially all
assets of the Company and provides for borrowing, subject to certain collateral
requirements of up to $6.5 million. The agreement requires a commitment fee of
 .25% per annum on the average daily unused portion of the revolving credit line.
The credit line is due September 1, 2002, and bears interest, payable monthly,
at 1.0% above the bank's prime rate, as follows:

-        LIBOR plus 2.25%...........................................            $    1,500,000    $          --

-        The bank's prime rate plus 1.0% (as of August 31, 2001, an
         effective rate of 7.5%)....................................                 3,580,019        3,142,790

NOTES PAYABLE TO BANK

Note payable to bank, collateralized by substantially all assets of the Company,
is due July 19, 2002, and is payable in monthly installments of $54,167 plus
interest, payable monthly, at either LIBOR plus 2.25% or at .25% below the
bank's prime rate, at the election of the Company, as follows:

-        LIBOR plus 2.25%...........................................                 1,025,000               --

-        The bank's prime rate less .25% (as of August 31, 2001, an
         effective rate of 6.25%)...................................                   166,667          541,667
</TABLE>






                                       30
<PAGE>


                              Riviera Tool Company
                          Notes to Financial Statements

NOTE 7 -- LONG-TERM DEBT-CONTINUED
<TABLE>
<CAPTION>
                                                                                     AUGUST 31
                                                                           ------------------------------
                                                                               2000             2001
                                                                           -------------    -------------
<S>                                                                        <C>              <C>
NOTES PAYABLE TO BANK (CONTINUED)
---------------------------------
Note payable to bank, collateralized by specific assets of the
Company, payable in monthly installments of $55,556, plus simple
interest of 7.26%, due December 31, 2003.......................               2,944,436        2,277,764

Note payable to bank, collateralized by specific assets of the
Company, payable in monthly installments of $16,666 plus simple
interest of 8.04%, due September 1, 2004.......................                 816,666          616,667

NON-REVOLVING EQUIPMENT LINE OF CREDIT
--------------------------------------
$3,271,000 equipment line of credit is collateralized by specific
assets of the Company, is due November 1, 2004, and is payable in
monthly installments of $38,941 plus interest as follows:

-        LIBOR plus 2.25%......................................               2,135,000               --

-        The bank's prime rate less .25% (as of August 31, 2001, an
         effective rate of 6.25%)..................................             119,373        1,823,472
                                                                           -------------    -------------

           Total long-term debt................................              12,287,161        8,402,360
           Less current portion................................               1,983,964        1,875,631
                                                                           -------------    -------------
           Long-term debt -- Net...............................            $ 10,303,197     $  6,526,729
                                                                           =============    =============
</TABLE>

Minimum scheduled principal payments on long-term debt to maturity as of August
31, 2001, are as follows:

<TABLE>
<S>                                                                                   <C>
                              2002............................................              $  1,875,631
                              2003............................................                 4,476,754
                              2004 ...........................................                 1,333,964
                              2005 ...........................................                   716,011
                              2006 ...........................................                        --
                                                                                            -------------
                                                           Total..............              $  8,402,360
                                                                                            =============
</TABLE>

In accordance with the third amended loan agreement effective August 31, 2001,
the Company is required to maintain certain levels of tangible net worth, ratio
of total liabilities tangible net worth, and earnings before interest, taxes,
depreciation and amortization and prohibit the payment of common stock cash
dividends. At August 31, 2001, the Company was in compliance with all of its
covenants.

The estimated fair value of the Company's notes payable and long-term debt
approximates its carrying amount.





                                       31
<PAGE>






                              Riviera Tool Company
                          Notes to Financial Statements

NOTE 8 -- FEDERAL INCOME TAXES

The provision for federal income taxes is as follows:
<TABLE>
<CAPTION>
                                                                                 AUGUST 31
                                                                 -------------------------------------------
                                                                    1999           2000            2001
                                                                 -----------    -----------    -------------
<S>                                                              <C>            <C>            <C>
Current expense.......................................           $  645,922     $    90,000    $      --
Deferred expense (benefit)............................              605,902         152,000      (1,538,000)
                                                                 -----------    -----------    -------------
              Income tax expense (benefit)............           $1,251,824     $   242,000    $ (1,538,000)
                                                                 ===========    ===========    =============
</TABLE>

The difference between the federal statutory tax rate and the Company's
effective rate was:
<TABLE>
<CAPTION>
                                                                                AUGUST 31
                                                                 -----------------------------------------
                                                                    1999           2000           2001
                                                                 -----------    -----------    -----------
<S>                                                             <C>            <C>           <C>
Federal statutory tax rate.............................            34.0%          34.0%         (34.0%)
Effect of increasing the valuation allowance...........             --             --             5.8%
Other items............................................             --             3.4%           --
                                                                 -----------    -----------    -----------
          Effective tax rate...........................            34.0%          37.4%         (28.2%)
                                                                 ===========    ===========    ===========
</TABLE>

The details of the net deferred tax liability are as follows:
<TABLE>
<CAPTION>
                                                                                     AUGUST 31
                                                                           -------------------------------
                                                                               2000              2001
                                                                           -------------     -------------
<S>                                                                        <C>              <C>
Deferred tax liabilities:
  Depreciation................................................             $ (2,518,916)    $ (2,955,438)
                                                                           -------------     -------------
Deferred tax assets:
  Alternative minimum tax credit carryforward.................                  155,150           155,150
  Accrued lease expense.......................................                  234,518           235,312
  Deferred compensation and other items.......................                   49,193            63,280
  Net operating loss carryforward.............................                  542,055         2,813,696
                                                                           -------------     -------------
              Total deferred tax assets.......................                  980,916         3,267,438
                                                                           -------------     -------------
Valuation allowance recognized for deferred tax assets........                       --          (312,000)
                                                                           -------------     -------------
              Net deferred tax liability......................             $ (1,538,000)     $     --
                                                                           =============     =============
</TABLE>


The net operating loss carryforward arising in fiscal 2000 and 2001 will expire,
if unused, in fiscal 2020 and 2021, respectively.

As of August 31, 2000, the Company has recorded a federal income tax refund
receivable of $673,897. This was a result of the Company's total quarterly
estimated federal income tax payments made during the year exceeding its federal
income tax liability.



                                       32
<PAGE>


                              Riviera Tool Company
                          Notes to Financial Statements

NOTE 9 -- OPERATING LEASES

The Company has entered into a noncancellable operating lease agreement for
manufacturing and office facilities with a lease term that expires in October
2009. The agreement provides for annual lease payments plus an escalation of 2
percent per year for the remainder of the lease term. The Company has an option
to renew this lease for two additional 10-year terms at a rate to be negotiated
and has an option to acquire the facility at fair market value. Generally
accepted accounting principles require that rent expense related to this type of
lease be recognized ratably over the term of the lease. The difference between
the rent payments made and the amount of expense recognized has been recorded as
accrued lease expense (a liability). For the years ended August 31, 1999, 2000
and 2001, lease expense exceeded cash payments made by $28,033, $18,865 and
$2,335, respectively.

The Company has various operating leases, including the noncancellable operating
lease noted above, for facilities that expire during the next 15 years. Rent
expense under these leases for the years ended August 31, 1999, 2000 and 2001
amounted to $879,898, $835,862 and $1,053,118, respectively.

The following is a schedule of future minimum rent payments required under
operating leases that have initial or remaining noncancellable lease terms in
excess of one year as of August 31, 2001:

<TABLE>
<CAPTION>
                                                                       LEASE
                                                                      PAYMENTS
                                                                    -------------
<S>                                                            <C>
             2002........................................              1,071,560
             2003........................................              1,090,250
             2004........................................              1,108,940
             2005........................................              1,127,630
             2006........................................              1,146,320
             2007 and after..............................              3,752,017
                                                                    -------------
                           Total minimum payments required          $  9,296,717
                                                                    =============
</TABLE>

NOTE 10 -- RETIREMENT PLANS

The Company has a profit-sharing plan that covers substantially all employees.
The plan includes a 401(k) deferred-compensation option. The plan, as
established, allows for discretionary contributions as determined annually by
the Company's Board of Directors. No discretionary contribution was made for the
years ended August 31, 1999, 2000, and 2001. The Company also matches and
contributes up to 15 percent of the employees' contributions, up to 2% of an
employee's annual wage. The Company's matching contributions to the plan for the
years ended August 31, 1999, 2000 and 2001, amounted to $101,689, $106,408 and
$74,759 respectively.

NOTE 11 -- STOCK OPTION PLANS

The Company's 1996 Stock Option Plan (the "Option Plan") was adopted by the
Board of Directors and approved by the shareholders on October 31, 1996. Under
the Option Plan, 250,000 shares of Common Stock were reserved for issuance and
were intended to qualify as incentive stock options under the Internal Revenue
Code of 1986, as amended. During the year ended August 31, 2000, the Company
granted stock options for 45,000 to certain Company personnel under the option
plan at exercise prices equal to the market value of the stock on the date of
grant. The options vest in one year from the date of option grant and the
recipients must be employed by the Company at the time of exercise.





                                       33
<PAGE>


                              Riviera Tool Company
                          Notes to Financial Statements

NOTE 11 -- STOCK OPTION PLANS-CONTINUED

The Company's 1998 Key Employee Stock Option Plan (the "Key Option Plan") was
adopted by the Board of Directors and approved by the shareholders on December
16, 1998. Under the Key Option Plan, 200,000 shares of Common Stock were
reserved for issuance and do not qualify as incentive stock options under the
Internal Revenue Code of 1986, as amended. During the year August 31, 2000, the
Company granted stock options for 53,000 to certain Company personnel and
Directors under the option plan at exercise prices equal to the market value of
the stock on the date of grant. The options vest in one year from the date of
option grant and recipients must be employed by the Company at the time of
exercise. During the year ended August 31, 2001, stock options under the Key
Option Plan totaling 10,000 shares were forfeited upon optionee terminating
their employment with the Company.

As permitted by SFAS No. 123, "Accounting for Stock-based Compensation", the
Company continues to apply the provisions of Accounting Principles Board Opinion
No. 25 which recognizes compensation expense under the intrinsic value method.
The compensation cost, estimated under the fair value based method defined in
SFAS 123, is not significant.

A summary of the status of the Option Plan and Key Option Plan during the years'
presented is as follows (no stock options were granted previous to fiscal 2000
under the 1996 Stock Option Plan and the 1998 Key Employee Stock Option Plan):
<TABLE>
<CAPTION>
                                                                                              Weighted
                                                                                              Average
                  1996 STOCK OPTION PLAN, AS AMENDED                     Shares           Exercise Price
                                                                      ---------------      ---------------
<S>                                                                 <C>                  <C>
  Outstanding at end of year, August 31, 1998...............               --                   --
                                                                      ===============      ===============
  Fiscal Year Ended August 31, 1999
  ---------------------------------
  Stock options granted.....................................              45,000               $6.625
                                                                      ---------------      ---------------
  Outstanding at end of year, August 31, 1999...............              45,000               $6.625
                                                                      ===============      ===============
  Fiscal Year Ended August 31, 2000
  ---------------------------------
  Stock options granted.....................................              75,000               $3.75
                                                                      ---------------      ---------------
  Outstanding at end of year, August 31, 2000...............             120,000               $4.82
                                                                      ===============      ===============
  Fiscal Year Ended August 31, 2001
  ---------------------------------
  Stock options granted.....................................               --                   --
                                                                      ---------------      ---------------
  Outstanding at end of year, August 31, 2001...............             120,000               $4.82
                                                                      ===============      ===============

                 1998 KEY EMPLOYEE STOCK OPTION PLAN
                 -----------------------------------
  Outstanding at end of year, August 31, 1998...............               --                   --
                                                                      ===============      ===============
  Fiscal Year Ended August 31, 1999
  ---------------------------------
  Stock options granted.....................................              54,000               $6.625
                                                                      ---------------      ---------------
  Outstanding at end of year, August 31, 1999...............              54,000               $6.625
                                                                      ===============      ===============
  Fiscal Year Ended August 31, 2000
  ---------------------------------
  Stock options granted.....................................              53,000               $3.75
                                                                      ---------------      ---------------
  Outstanding at end of year, August 31, 2000...............             107,000               $5.20
                                                                      ===============      ===============
  Fiscal Year Ended August 31, 2001
  ---------------------------------
  Stock options granted.....................................               --                   --
  Stock options forfeited...................................              (5,000)              $6.625
  Stock options forfeited...................................              (5,000)              $3.75
                                                                      ---------------      ---------------

  Outstanding at end of year, August 31, 2001...............              97,000               $5.20
                                                                      ===============      ===============
</TABLE>




                                       34
<PAGE>


                              Riviera Tool Company
                          Notes to Financial Statements

NOTE 12 -- CONTINGENCIES

The Company is subject to various legal proceedings and claims that arise in the
ordinary course of business. At August 31, 2001, the Company is a defendant in a
case asking for recovery of $850,000 in damages by a customer. The Company has
counterclaimed for an amount of approximately $1,000,000 representing amounts
due and unpaid in connection with the contract. The Company has no amounts
recorded as an asset or liability related to the contract. The case is currently
in the discovery stage. While the Company believes it has adequate defenses to
the claim as well as a sound basis for its counterclaim and intends to
vigorously pursue this matter, an unfavorable resolution of this matter could
have a material effect on the financial position of the Company.



                                       35
<PAGE>


Report of Management


The management of Riviera Tool Company is responsible for the preparation of the
accompanying financial statements in conformity with generally accepted
accounting principles appropriate in the circumstances. Management is also
responsible for the determination of estimates and judgments used in the
financial statements, and the preparation of other financial information
included in this annual report to shareholders. The August 31, 1999, 2000 and
2001 financial statements have been audited by Deloitte & Touche LLP,
independent auditors.

The management of the Company is responsible for and maintains an accounting
system and related internal controls that it believes are sufficient to provide
reasonable assurance that assets are safeguarded against unauthorized
acquisition, use or disposition, that transactions are executed and recorded in
accordance with management's authorization and that the financial records are
reliable for preparing financial statements. The concept of reasonable assurance
is based on the recognition that the cost of a system of internal control must
be related to the benefits derived and that the balancing of those factors
requires estimates and judgments. The system is evaluated by the independent
auditors in connection with their annual audit. Management responds to all
significant recommendations of the independent auditors and makes changes to the
systems where appropriate.

The Board of Directors has an Audit Committee of Directors who are not members
of management. The committee meets with management and the independent auditors
in connection with its review of matters relating to the company's annual
financial statements; the Company's system of internal controls, and the
services of the independent auditors. The Committee also periodically meets with
independent auditors, without management present, to discuss appropriate
matters. In addition, the independent auditors have full and free access to meet
with the Committee, with or without management representatives present, to
discuss the results of their audit, the adequacy of internal controls and the
quality of financial reporting.



/s/ Kenneth K. Rieth
--------------------
Kenneth K. Rieth
President and Chief Executive Officer


/s/ Peter C. Canepa
-------------------
Peter C. Canepa
Treasurer and Chief Financial Officer




                                       36
<PAGE>


Independent Auditors' Reports

      Board of Directors and Stockholders
      Riviera Tool Company
      Grand Rapids, Michigan

      We have audited the accompanying balance sheets of Riviera Tool Company as
      of August 31, 2000 and 2001, and the related statements of operations,
      stockholders' equity and cash flows for each of the three years in the
      period ended August 31, 2001. These financial statements are the
      responsibility of the Company's management. Our responsibility is to
      express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with auditing standards generally
      accepted in the United States of America. Those standards require that we
      plan and perform the audit to obtain reasonable assurance about whether
      the financial statements are free of material misstatement. An audit
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the financial statements. An audit also includes assessing
      the accounting principles used and significant estimates made by
      management, as well as evaluating the overall financial statement
      presentation. We believe that our audits provide a reasonable basis for
      our opinion.

      In our opinion, such financial statements present fairly, in all material
      respects, the financial position of Riviera Tool Company as of August 31,
      2000 and 2001, and the results of its operations and its cash flows for
      the years then ended in conformity with accounting principles generally
      accepted in the United States of America.

      DELOITTE & TOUCHE LLP

      /s/ Deloitte & Touche LLP
      -------------------------
      Grand Rapids, Michigan
      October 15, 2001



                                       37
<PAGE>


                         Board of Directors and Officers
                              Riviera Tool Company


<TABLE>
<S>                                 <C>                                         <C>
BOARD OF DIRECTORS

--       THOMAS H. HIGHLEY....        Chief Executive Officer and President...    The Empire Company, Inc.

--       JOHN C. KENNEDY......        Chairman, President and Director........    Autocam Corporation

--       KENNETH K. RIETH.....        Chairman, Chief Executive Officer and
                                      President...............................    Riviera Tool Company

--       DANIEL W. TERPSMA....        Senior Vice President...................    Standard Federal Bank

--       LEONARD H. WOOD......        Vice President and General Manager......    Riviera Tool Company


OFFICERS

--       KENNETH K. RIETH.....        Chairman, Chief Executive Officer and
                                      President...............................    Riviera Tool Company

--       PETER C. CANEPA......        Chief Financial Officer, Secretary and
                                      Treasurer...............................    Riviera Tool Company

--       LEONARD H. WOOD......        Vice President and General Manager......    Riviera Tool Company
</TABLE>


SHAREHOLDER INFORMATION

Annual Meeting
--   The annual meeting will be held Wednesday, December 18, 2001, 4:00 p.m.
     (EST), at the Company's headquarters, 5460 Executive Parkway SE, Grand
     Rapids, Michigan 49512.

Form 10-K and Financial  Information
--   A copy of the Company's annual report filed with the Securities and
     Exchange Commission is available without charge to shareholders. Written
     requests should be addressed to Riviera Tool Company, Peter C. Canepa, CFO,
     5460 Executive Parkway SE, Grand Rapids, Michigan 49512. For electronic
     requests, go to the Company's web site at www.rivieratool.com.

Common Stock
--   Traded on the American Stock Exchange - AMEX, under the symbol of RTC.

Corporate Headquarters
--   Riviera Tool Company
     5460 Executive Parkway SE
     Grand Rapids, Michigan 49512 U.S.A.
     Phone 616.698.2100
     World Wide Web - rivieratool.com





                                       38