Raytech Corporation Announces First Quarter Results for 2002

    SHELTON, Conn.--May 14, 2002--Raytech Corporation today announced net income for the thirteen-week period ended March 31, 2002 amounting to $1.3 million or $.03 per basic share as compared to $1.7 million or $.49 per basic share for the same period in the prior year.
    In April 2001, Raytech Corporation emerged from the protection of Bankruptcy Court under Chapter 11 of Title 11 of the United States Code. Raytech Corporation had been under the Chapter 11 protection since May 1989. As of April 2, 2001, the Company adopted fresh-start reporting pursuant to the guidance provided by the American Institute of Certified Public Accountant's Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code" ("SOP 90-7"). The periods presented prior to April 2, 2001 have been designated "Predecessor Company" and the periods subsequent to April 2, 2001 have been designated "Successor Company," In accordance with fresh-start reporting, all assets and liabilities were recorded at their respective fair market values. Additionally, 38 million shares of Company stock were issued as part of the Plan of Reorganization. Therefore, the results of operations for the periods presented are not comparable.
    The Company recorded an increase in cash of $1.1 million for the thirteen-week period and an increase of $3.8 million over the cash balance at April 1, 2001. The increased cash flow reflects the strong expense controls established in 2001 as part of various cost reduction programs.
    The President and Chief Executive Officer, Albert A. Canosa stated, "I am pleased with both the earnings and improved cash flow for the quarter. The performance reflects the cost-cutting measures enacted during the 2001 year. I feel we are well positioned in the current economy, and as the economy continues to improve, the impact of our cost reductions will be reflected in an improved bottom line."
    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 three 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 U.S., Germany, England and China as well as technology and research centers in Michigan, 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
                              Successor Company    Predecessor Company
                               March 31, 2002         April 1, 2001
                                            (Unaudited)

Net Sales                           $  52,709                $  55,205

Net income                          $   1,330                $   1,715

Basic earnings per share:

   Earnings per share               $     .03                $     .49

   Weighted average shares         41,528,520                3,519,313

Diluted earnings per share:

   Earnings per share               $     .03                $     .48

   Weighted average shares         41,565,824                3,537,446