Raytech Corporation Announces Second Quarter Results for 2004

SHELTON, Conn.--Aug. 1, 20041, 2004--Raytech Corporation today announced net income for the thirteen-week period ended June 27, 2004 of $.1 million or nil per basic share compared to a net loss of $1.5 million or $.04 loss per basic share for the same period in the prior year. Raytech recorded net income of $1.4 million or $.03 per basic share for the twenty-six-week period ended June 27, 2004 compared to a net loss of $1.6 million or $.04 loss per share for the same period in the prior year.

Net sales for the thirteen-week period ended June 27, 2004 of $58.4 million compares to $54.1 million for the same period in the prior year, an increase of $4.3 million or 8.0%. Net sales for the twenty-six-week period ended June 27, 2004 of $115.0 million compares to $109.8 million in the same period in the prior year, an increase of $5.2 million or 4.7%. The increase in sales was driven by increased demand and product offering in the Aftermarket segment, increased demand in China and favorable currency translation in Europe. However, the Company continues to experience pressure to reduce prices from certain of its major customers, most notably in the domestic OEM business and to a lesser degree in China.

The Company recorded operating profit for the thirteen-week period ended June 27, 2004 of $2.1 million compared to an operating loss of $.3 million for the same period in the prior year, an increase of $2.4 million. The operating income for the twenty-six-week period ended June 27, 2004 of $4.6 million compared to operating income of $.3 million for the same period in 2003. The increase in operating profit reflects the increase in sales principally in the Aftermarket business and an increased emphasis on reducing costs. The Company has implemented strategic cost reduction programs, which are focused on improving operating margins.

Raytech Corporation is a recognized world leader in the production of wet and dry clutch, power transmission and brake systems as well as specialty engineered polymer matrix composite products and related services for vehicular applications, including automotive OEM, heavy duty on-and-off highway vehicles and aftermarket vehicular power transmission systems. Through two technology and research centers and six manufacturing operations worldwide, Raytech develops and delivers energy absorption, power transmission and custom-engineered components focusing on niche applications where its expertise and technological excellence provide a competitive edge.

Raytech Corporation, headquartered in Shelton, Connecticut, operates manufacturing facilities in the United States, Germany, England and China as well as technology and research centers in Indiana and Germany. The Company's operations are strategically situated in close proximity to major customers and within easy reach of geographical areas with demonstrated growth potential.

Raytech common stock is listed on the New York Stock Exchange and trades under the symbol "RAY." Company information may be accessed on our Internet website http://www.raytech.com.

                          RAYTECH CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            -----------------------------------------------
                  (000's omitted, except share data)

Comparative results are as follows:

                                          For the 13 Weeks Ended
                                     June 27, 2004      June 29, 2003
                                     -------------      -------------
                                                (Unaudited)

Net Sales                              $ 58,405           $ 54,093
Net income (loss)                      $     57           $ (1,539)
Basic earnings (loss) per share:
 Earnings (loss) per share             $    .00           $   (.04)
 Weighted average shares             41,737,306         41,733,702
Diluted earnings (loss) per share:
 Earnings (loss) per share             $    .00           $   (.04)
 Weighted average shares             41,737,306         41,733,702

                                          For the 26 Weeks Ended
                                     June 27, 2004      June 29, 2003
                                     -------------      -------------
                                                (Unaudited)

Net Sales                              $115,003           $109,828
Net income (loss)                      $  1,408           $ (1,612)
Basic earnings (loss) per share:
 Earnings (loss) per share             $    .03           $   (.04)
 Weighted average shares             41,737,306         41,717,628
Diluted earnings (loss) per share:
 Earnings per (loss) share             $    .03           $   (.04)
 Weighted average shares             41,737,306         41,717,628