Newcor Reports Second Quarter Results

    BLOOMFIELD HILLS, Mich., Aug. 14 Newcor, Inc. (Amex: NER)
announced today that sales for the quarter ended June 30, 2001, were $50.3
million, a decrease of $17.3 million, or 25.6%, compared with sales of $67.7
million for the same period of 2000.  Sales declined in the automotive market
$8.6 million, a decrease of 23.7% from the prior year, and in the heavy-duty
truck market $5.4 million, or 32.4%.  In addition, sales declined in the
agricultural market $3.0 million, or 37.9%, and in the Company's Special
Machines Group $0.3 million, or 4.1%.
    Gross margin was $5.5 million, or 10.8% of sales in the second quarter of
2001, as compared to gross margin in the second quarter of 2000 of $11.6
million, or 17.1%, of sales.  The decreased gross margin from the prior year
is primarily due to the decline in sales, partially offset by cost reductions
implemented throughout the Company.
    Selling, general and administrative expenses declined $1.7 million, or
29.3%, to $4.1 million in the quarter ended June 30, 2001, as compared to $5.8
million for the comparable quarter of 2000.  The decline in selling, general
and administrative expenses is due to ongoing cost reduction efforts.
    Earnings before interest, taxes, depreciation and amortization (EBITDA)
were $3.7 million for the second quarter, as compared to $8.1 million in the
second quarter of 2000.  The reduction in EBITDA is primarily due to the
decline in sales across all markets.  As of June 30, 2001, the Company had
borrowings under its bank line of credit of $5.5 million, and had $11.2
million of available credit remaining under its revolving credit agreement.
    Net income for the second quarter was a loss of $(2.6) million, or
$(0.52), per share, as compared to a profit of $0.1 million, or $0.04 per
share, in the quarter ended June 30, 2000.
    Further information can be obtained from the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2001, which was filed with the
Securities and Exchange Commission today.
    Newcor, headquartered in Bloomfield Hills, Michigan, designs and
manufactures precision machined and molded rubber and plastic products, as
well as custom machines and manufacturing systems.  Newcor is listed on the
AMEX under the symbol NER.
    Certain information contained herein includes information that is forward-
looking.  The matters referred to in forward-looking statements may be
affected by the risks and uncertainties involved in the Company's business.
These forward-looking statements are qualified in their entirety by the
cautionary statements contained in the Company's Securities and Exchange
Commission filings.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In Thousands, Except Per Share Amounts)

                                        Three Months Ended  Six Months Ended
                                         June 30, June 30,  June 30,  June 30,
                                           2001     2000      2001      2000

    Sales                                 $50,347  $67,653  $96,144  $136,832
    Cost of sales                          44,893   56,073   86,937   114,850
      Gross margin                          5,454   11,580    9,207    21,982
    SG&A expenses                           4,061    5,845    8,653    11,610
    Amortization expense                    1,032    1,037    2,066     2,067
    Restructuring charge                      450      -        450       -
      Operating income                        (89)   4,698   (1,962)    8,305
    Interest expense                       (3,625)  (3,658)  (7,267)   (7,308)
    Other professional fees                   -       (650)    (300)     (650)
    Other income (expense), net              (177)    (101)    (316)     (235)
      Income before income taxes           (3,891)     289   (9,845)      112
    Income tax expense                     (1,326)      96   (3,351)       36
     Net income                           $(2,565)    $193  $(6,494)      $76

    Per share amounts:
      Net income - basic and diluted       $(0.52)   $0.04   $(1.31)    $0.02
    Weighted Average Shares Outstanding     4,949    4,950    4,949     4,942

    Other information:
      Depreciation                         $2,308   $2,361   $4,595    $4,792


                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)

                                             June 30, 2001  December 31, 2000
    Assets:
      Current assets                               $49,130           $52,897
      Property, plant and equipment, net            52,222            54,609
      Cost in excess of assigned value of
        acquired companies, net                     65,746            67,812
      Other assets                                  17,680            13,994
                                                  $184,778          $189,312

    Liabilities and Shareholders' Equity:
      Current portion of long-term debt             $7,807            $2,312
      Other current liabilities                     34,080            36,175
      Current liabilities                           41,887            38,487
      Long-term debt                               133,770           134,943
      Other liabilities                              8,807             9,074
                                                   184,464           182,504
      Shareholders' equity                             314             6,808
                                                  $184,778          $189,312

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