SecProbe.io

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<TYPE>CORRESP
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[RIVIERA TOOL LOGO]

RIVIERA TOOL COMPANY

5460 Executive Parkway SE
Grand Rapids, MI 49512
(616) 698.2100 phone
(616) 698.2470 fax

                                                                  April 15, 2005

VIA EDGAR TRANSMISSION

Mr. Jay Web
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Mail Stop: 0306

         RE: RE: RIVIERA TOOL COMPANY
             FORM 10-K FOR THE YEAR ENDED AUGUST 31, 2004
             FORM 10-Q FOR THE PERIOD ENDED NOVEMBER 30, 2004
             FILE NO. 001-12673

Dear Mr. Web:

      On behalf of Riviera Tool Company, Inc., a Michigan corporation (the
"Registrant" or "Riviera"), we transmit herewith for filing with the Securities
and Exchange Commission (the "Commission") pursuant to Rules 101(a)(i) and (iii)
of Regulation S-T under the Commission's Electronic Data Gathering and Retrieval
System, the Registrant's (i) Form 10-K/A for the year ended August 31, 2004 and
(ii) the Registrant's Form 10-Q/A for the period ended November 30, 2004.

      The following are our responses to the comments received from the
Commission's Staff (the "Staff") by letter dated March 9, 2005 (the "Comment
Letter"), with respect to the above referenced periodic reports. For the Staff's
convenience, the Staff's comments have been restated below in bold type (the
numbers thereof corresponding to the numbers of the Staff's comments contained
in the Comment Letter) and the Registrant's responses have been set forth below
in italics.

      Courtesy copies of this letter and of the Form 10-K/A and Form 10-Q/A, are
being concurrently provided via Federal Express overnight delivery directly to
your attention.

<PAGE>

Mr. Jay Web
April 15, 2005
Page 2

FORM 10-K AS OF AUGUST 31, 2004

ITEM 6. SELECTED FINANCIAL DATA - PAGE 8

1. REVISE FUTURE FILINGS TO ALSO DISCLOSE YOUR BASIC EARNINGS PER SHARE FOR EACH
OF THE LAST FIVE FISCAL YEARS AS REQUIRED BY ITEM 301 OF REGULATION S-K. WHERE
THE AMOUNTS ARE THE SAME PLEASE LABEL THEM AS SUCH.

The Company hereby acknowledges that in all future filings, it will disclose
both basic and fully-diluted earnings per share in accordance with Item 301 of
Regulation S-K and to the extent the amounts are the same, they will be labeled
as such.

2. REVISE FUTURE FILINGS TO ALSO DISCLOSE YOUR BASIC EARNINGS PER SHARE FOR THE
TWO MOST RECENT FISCAL YEARS AS REQUIRED BY ITEM 302 OF REGULATION S-K. WE NOTE
THAT THE BASIC AND DILUTED EARNINGS PER SHARE WERE THE SAME IN SOME OF THE
PERIODS PRESENTED AND SHOULD BE LABELED AS SUCH.

The Company hereby acknowledges that in all future filings, it will disclose
both basic earnings per share for the then two most recent fiscal years in
accordance with Item 302 of Regulation S-K and to the extent basic and fully
diluted earnings per share are the same, they will be labeled as such.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - PAGE 9

ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - PAGE 14.

3. IN FUTURE FILINGS DISCUSS AND QUANTIFY THE FAIR VALUE RISK ASSOCIATED WITH
YOUR DEBT. ALSO PROVIDE THE DISCLOSURES REQUIRED BY ITEM 305 OF REGULATION S-K
FOR YOUR INTEREST BEARING INSTRUMENTS. FOR EXAMPLES, SEE APPENDIX TO ITEM 305 OF
REGULATION S-K - TABULAR DISCLOSURES.

The Company supplementally submits the following fair value risk associated with
its debt for the years ended August 31, 2004 and 2003:

<PAGE>

Mr. Jay Web
April 15, 2005
Page 3

The following table provides information on the Company's debt as of August 31,
2004 and 2003 that are sensitive to changes in interest rates.

<TABLE>
<CAPTION>
                                                                                AMOUNT
FISCAL 2004:                                                                  OUTSTANDING    MATURITY DATE
------------                                                                  -----------    -------------
<S>                                                                           <C>            <C>
REVOLVING WORKING CAPITAL CREDIT LINE:
Variable rate revolving credit line at an interest rate of  prime rate
plus 4.0% (as of November 17, 2004, an effective rate of 9.0%)                $ 9,849,532    December 31, 2004

NOTE PAYABLE TO BANKS:
At an interest rate of prime plus 4.25% (as of November 17, 2004, an
effective rate of 9.25%)                                                      $ 1,400,000    December 31, 2004

At an interest rate of prime plus 4.25% (as of November 17, 2004, an
effective rate of 9.25%)                                                      $   435,100    December 31, 2004

FISCAL 2003:
REVOLVING WORKING CAPITAL CREDIT LINE:
Variable rate revolving credit line at an interest rate of  prime rate
plus 1.0% (as of August 31, 2003, an effective rate of 5.0%)                  $ 5,982,360     December 1, 2004

NOTE PAYABLE TO BANKS:
At an interest rate of prime plus 1.25% (as of August 31, 2003, an
effective rate of 5.25%)                                                      $ 1,766,667     December 1, 2004
</TABLE>

The Company hereby acknowledges that in all future filings it will discuss and
quantify the fair value risk associated with its debt as required under Item 305
of Regulation S-K.

NOTES TO FINANCIAL STATEMENTS - PAGE 20

NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - PAGE 20

REVENUE RECOGNITION - PAGE 20

4.    TELL US SUPPLEMENTALLY AND REVISE FUTURE FILINGS TO ADDRESS THE FOLLOWING
RELATED TO YOUR CONTRACTS:

      a.    DESCRIBE IN DETAIL THE NATURE OF YOUR ARRANGEMENTS. FOR INSTANCE,
            ARE THESE CONTRACTS COST-PLUS-FIXED FEE CONTRACTS,
            COST-REIMBURSEABLE CONTRACTS, OR FIXED-FEE CONTRACTS? WE ASSUME THEY
            ARE LONG - TERM CONTRACTS.

      b.    TELL US SUPPLEMENTALLY WHY IT IS APPROPRIATE IN CERTAIN INSTANCES
            FOR YOU TO RECOGNIZE REVENUE UTILIZING THE COMPLETED CONTRACT METHOD
            FOR YOUR TIME AND MATERIAL CONTRACTS RATHER THAN UTILIZING THE
            PERCENTAGE OF COMPLETION METHOD.

<PAGE>

Mr. Jay Web
April 15, 2005
Page 4

      c.    EXPLAIN WHETHER ANY OF THESE CONTRACTS INCLUDE CUSTOMER ACCEPTANCE,
            INSTALLATION, TRAINING, RIGHTS OF RETURN, OR OTHER POST SHIPMENT
            OBLIGATIONS;

      d.    PROVIDE TO US SUPPLEMENTALLY THE AMOUNT OF REVENUE RECOGNIZED UNDER
            THE COMPLETED CONTRACT AND PERCENTAGE OF COMPLETION METHOD FOR THE
            REPORTING PERIODS PRESENTED, INCLUDING SUBSEQUENT INTERIM PERIODS.

      e.    WE SEE YOUR DISCLOSURE THAT CHANGES IN JOB PERFORMANCE, CONDITIONS,
            AND ESTIMATED PROFITABILITY MAY RESULT IN REVISIONS TO COST AND
            INCOME AND RECOGNIZED IN THE PERIOD SUCH REVISIONS ARE DETERMINED.
            TELL US SUPPLEMENTALLY HOW YOU DETERMINE WHEN THESE REVISIONS NEED
            TO OCCUR AND HOW THEY IMPACT PROFITABILITY.

      f.    CITE THE ACCOUNTING LITERATURE RELIED UPON TO SUPPORT YOUR
            CONCLUSIONS AND PROVIDE ALL DISCLOSURES REQUIRED BY APPENDIX C OF
            SOP 81-1 IN YOUR FUTURE FILINGS.

4 (a). The Company supplementally advises the Staff that substantially all of
its contracts are long-term in nature and are fixed price contracts. Typically
there are minor cost-reimbursable contracts for repair and maintenance items.
The Company will clarify such in future filings.

4 (b). The Company supplementally advises the staff that it has adopted the
completed-contract method of revenue recognition with respect to contracts that
are time and material contracts (cost-reimbursable contracts) in that these
contracts are typically contracts of short duration (in terms of period between
start and completion). The Company believes that its financial position and
results of operations would not vary, in a material manner, had it employed the
percentage-of-completion method of revenue recognition (as opposed to the
completed contract method) with respect to these contracts.

4 (c). The Company supplementally advises the Staff that a majority of the
contracts involve customer acceptance provisions. Typically, the Company will
produce sample parts from dies it uses to produce customer parts and will have
the customer check the parts for form, fit and function. This usually occurs at
the Company's facility. Upon acceptance of the parts from the dies, the Company
will ship the dies to the customer and there are no post contract obligations.
In some cases, the Company may have to assist the customer in the final set-up
of the dies at the customer's facility as there may be adjustments required due
to equipment differences. In these cases, the post-shipment contracts are
segregated from the original construction contracts.

4 (d). The Company supplementally advises the Staff that as of August 31, 2004,
the Company had recognized losses of approximately $4,250,000 under both the
percentage-of-completion and completed contract methods. These recognized losses
were generated with respect to those contracts accounted for under the
percentage-of-completion method. The total amount of

<PAGE>

Mr. Jay Web
April 15, 2005
Page 5

revenue recognized under the percentage-of-completion and completed contract
methods for the year ended August 31, 2004 was $24,551,166 and $138,055,
respectively.

The Company further supplementally advises the Staff that for its the first
fiscal quarter ended November 30, 2004, the Company had recognized losses of
approximately $625,000 under the percentage-of-completion and completed contract
methods. These recognized losses were generated with respect to those contracts
accounted under the percentage-of-completion method. The total amount of revenue
recognized under the percentage-of-completion and completed contract methods for
the first quarter ended November 30, 2004 was $4,164,966,and $387,585,
respectively.

4 (e). The Company supplementally advises the Staff that for each reporting
period, the Company analyzes each contract from a financial and manufacturing
perspective. Total estimated gross profits on a contract, calculated as the
difference between total estimated contract revenue and total estimated contract
cost, is determined prior to the amount earned on the contract for a period. The
portion of the total revenue earned and the total amount of gross profit earned
to date is determined by measuring the extent of progress toward completion
using the efforts-expended method. The contract is measured primarily by the
ratio of hours performed to date versus the estimated total hours at completion.
Upon completion of the review of the hours ratio, the Company further reviews
the total estimated hours analysis. This review involves calculating the
quotient arrived at by dividing the margin recognized to date by the estimated
percentage of completion (hours incurred/hours estimated) which results in an
estimated contract margin at completion. At this stage, the Company will review
the completed contract estimated margin for accuracy. If such proves inaccurate,
the percentage will be adjusted to reflect the appropriate estimated completed
contract margin. If circumstances change during performance of a contract, those
changes are considered in the analysis of the job in that in almost all
instances, such changes (unless offsetting) will affect profitability in either
a positive or negative manner. As required under GAAP, when the Company
estimates a loss on a contract, the full estimated loss is recognized when
known.

4 (f). The Company has applied the guidance of SOP 81-1 in determining its
method of revenue recognition will continue to apply the disclosure requirements
of Appendix C of SOP 81-1.

PERISHABLE TOOLING - PAGE 21

5. WE SEE YOUR DISCLOSURE THAT PERISHABLE TOOLING 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. TELL US SUPPLEMENTALLY AND REVISE
FUTURE FILINGS TO INDICATE WHY THE COSTS ARE PROPERLY CAPITALIZED. ALSO, DOES
EITF 99-5 IMPACT YOU? WE MAY HAVE FURTHER COMMENTS AFTER REVIEWING YOUR
RESPONSE.

The Company supplementally advises the Staff that its perishable tooling
consists of hand tools, gauges and machine attachments and are not related to
any particular customer contract, and

<PAGE>

Mr. Jay Web
April 15, 2005
Page 6

have been appropriately capitalized as purchased inventory. The items comprising
perishable tooling are cross-functional in nature as they can be utilized in
some phase of the construction of most of the Company's dies. As such, the
Company's position is that the accounting for these tools is not subject to EITF
99-5.

NOTE 3.  SALES TO MAJOR CUSTOMERS - PAGE 23

6.    WE SEE YOUR DISCLOSURE THAT THE COMPANY HAD AN OUTSTANDING RECEIVABLE OF
$10.9 MILLION AS OF AUGUST 31, 2004 RELATED TO OXFORD AUTOMOTIVE. WE ALSO SEE
YOUR DISCLOSURE THAT OXFORD AND MERCEDES-BENZ U.S. INTERNATIONAL, INC. EXECUTED
A TRI-PARTY TOOLING AGREEMENT WHERE MERCEDES-BENZ PAID SUBSEQUENT TO AUGUST 31,
2004, $9.1 MILLION OF THE OUTSTANDING $10.9 MILLION RECEIVABLE THAT OXFORD OWES.
TELL US SUPPLEMENTALLY AND REVISE FUTURE FILINGS TO ADDRESS THE FOLLOWING:

      a.    DESCRIBE TO US WHAT A TRI-PARTY TOOLING AGREEMENT IS AND WHY IT WAS
            NECESSARY. EXPLAIN THE NATURE OF THE RELATIONSHIP THAT OXFORD
            AUTOMOTIVE HAS WITH MERCEDES - BENZ AND YOU. FOR INSTANCE, WHY DID
            MERCEDES-BENZ ABSORB OXFORD AUTOMOTIVES' OUTSTANDING LIABILITIES?
            COULD THE FACT MERCEDES-BENZ PAID OXFORD'S LIABILITIES CREATE A
            LIABILITY (CONTINGENT OR OTHERWISE) FOR YOU?

      b.    TELL US IF THE REMAINING $1.8 MILLION HAS BEEN COLLECTED AS OF THE
            DATE OF THIS LETTER.

      c.    EXPLAIN TO US HOW YOU WILL ACCOUNT FOR FUTURE SALES AND OUTSTANDING
            RECEIVABLES TO OXFORD AUTOMOTIVE. WILL MERCEDES-BENZ PAY THE COMPANY
            FOR THESE OUTSTANDING BALANCES ON BEHALF OF OXFORD AUTOMOTIVE?

WE MAY HAVE FURTHER COMMENTS AFTER REVIEWING YOUR RESPONSE.

6(a). The Company supplementally advises the Staff that the Tri-Party agreement
was executed May 24, 2004 and related to the Company's agreement with Oxford
Automotive to manufacture dies for two Mercedes Benz vehicles. The dies were to
be utilized by Oxford in its Alabama facility to manufacture parts for Mercedes
vehicles, but the dies would be the property of Mercedes, not Oxford. The
Company was concerned about the financial viability of Oxford Automotive and as
such filed perfected security interests on these dies in conjunction with a
Security Agreement with Oxford in favor of the Company. Mercedes was properly
notified that their dies would be subject to the Company's lien and that if
Mercedes were to pay Oxford directly for those tools and those monies were not
paid to the Company, that Mercedes would not have clear title to the dies. As
such, the Company negotiated the Tri-Party Agreement whereas Mercedes would pay
the Company directly for the dies thus eliminating the aforementioned risk. The
Company believes that this arrangement does not create any liability (contingent
or otherwise) for the Company.

<PAGE>

Mr. Jay Web
April 15, 2005
Page 7

6 (b). The Company supplementally advises the Staff that the remaining $1.8
million has been collected prior to March 1, 2005.

6 (c).The Company supplementally advises the Staff that because Oxford
Automotive is currently in bankruptcy, the Company does not anticipate
performing any services for it. The Oxford facility in Alabama for which the
Company has constructed dies has been sold to Gestamp USA and the Company has
and will continue to perform services for Gestamp as required. The work
performed by the Company for Gestamp will not be subject to the Tri-Party
Agreement.

The Company has completed the Tri-Party agreement and no such disclosures