KIT Reports Third Quarter Fiscal 2001 Results

    LONG BEACH, Calif., Sept. 14 KIT Manufacturing Company
(Amex: KIT) reported a net loss of $614,000, or $0.60 per share, for the
current fiscal quarter in comparison to net income of $53,000, or $0.05 per
share, for the same period in 2000.  The third quarter of fiscal 2000 reflects
a gain on the sale of business property in McPherson, Kansas, net of related
income taxes, of $402,000, or $0.38 per share.
    Net sales, company-wide, declined 16 percent from the comparable quarter
in the prior fiscal year.  Manufactured homes sales reflected a 5 percent
increase, while recreational vehicles posted a 29 percent decrease in sales in
comparison to the third quarter in fiscal 2000.  Manufactured home sales for
the third quarter fiscal 2001 included sales of $1,067,000 from the
consolidated retail operations.
    According to Dan Pocapalia, KIT's Chairman of the Board and Chief
Executive Officer, "The slowdown in recreational vehicle division is mainly
attributable to the decline in consumer confidence as a result of a decline in
the overall economy due to higher fuel costs and tightened credit policies."
    Mr. Pocapalia went on to say, "the RV division's high-end Millennium model
has received extremely favorable response from our entire dealer body as
retail sales for this product have risen considerably.  Currently the division
has a significant backlog of orders for this product.  Because of the
increasing demand for the Millennium, the RV division is realigning its
production lines to accommodate this demand.  The manufactured homes division
has seen a noticeable upswing in its sales as dealers are focusing on the high
quality product that KIT manufactures.  This division is currently developing
a 32-foot wide home as well as a two-story home to meet demand in this market
arena.  In order to meet current demand, the homes plant has been able to
increase its production levels by 33 percent.  The homes division is also
focusing on reducing overhead costs through the reduction of its inventory at
its retail stores.  Management believes that the forth quarter will see
improved results based on the anticipated success of our marketing and
operational action plans outlined above."

    KIT Manufacturing Company
    Condensed Statements of Income

                             Three Months Ended          Nine Months Ended
                                  July 31,                   July 31,
    (Unaudited)               2001          2000         2001          2000

    Sales                  $11,449       $13,559      $30,356       $39,433
    Costs and expenses      12,438        14,089       33,878        39,669
    Loss before
     income taxes             (989)         (530)      (3,522)         (236)
    Gain on sale of
     property, plant
     and equipment                           621                      2,076
    (Benefit) provision
     for income taxes         (375)           38       (1,399)          745
    Net (loss) income        $(614)          $53      $(2,123)       $1,095
    Net (loss) income
     per share - basic
     and diluted            $(0.60)        $0.05       $(2.07)        $1.02
    Shares outstanding -
     basic and diluted   1,027,334     1,047,261    1,027,334     1,070,710

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