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FastenTech, Inc. Reports Third Quarter and Year-to-Date Results

MINNEAPOLIS, July 28 -- FastenTech, Inc., a leading manufacturer and marketer of highly engineered specialty fasteners and fastener systems and engineered components that provide critical applications to a broad range of end-markets, today announced its results for the third quarter ended June 30, 2003.

Revenues for the quarter ended June 30, 2003 were $55.0 million, a decrease of 2.3% compared with revenues of $56.2 million in the same period in 2002. Operating income was $8.2 million for the quarter ended June 30, 2003 compared to $9.7 million in the prior-year quarter, a decrease of 15.2%. Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 16.4% to $11.1 million for the quarter ended June 30, 2003 from $13.3 million in the third quarter of 2002. The decrease in revenues, operating income and EBITDA was primarily a result of softness in the automotive and OEM power generation markets, offset by results from our February 2003 acquisition of a specialty components business. Results of operations from this business are included in the 2003 quarterly results above, but are not included in 2002 results.

Ron Kalich, president and chief executive officer of FastenTech, said, "We are pleased that we have been able to offset some of the current softness in the automotive and OEM power generation markets with new product and marketing initiatives. We maintain our strong operating performance by continuing to improve internal operations and enhancing our competitive position, while focusing our expansion strategy on market diversification."

During the three months ended June 30, 2003, the Company recorded an extraordinary loss of $1.6 million, net of $1.0 million of tax benefit, related to the early retirement of debt resulting from the successful completion of our $175.0 million senior subordinated note offering on May 1, 2003.

Year-to-Date Results

Revenues for the nine months ended June 30, 2003 decreased 3.5% to $151.8 million from $157.3 million in the same period in 2002. Operating income for the nine months ended June 30, 2003 was $22.9 million compared to $24.6 million in the same period in 2002. EBITDA was $31.4 million for the nine months ended June 30, 2003, a decrease of 11.7% compared to $35.6 million for the prior-year period. The decrease in revenues, operating income and EBITDA was primarily a result of softness in the automotive and OEM power generation markets, offset by results from our February 2003 acquisition of a specialty components business. Results of operations from this business are included in the results for the nine months ended June 30, 2003 above, but are not included in 2002 results.

The following table reconciles operating income to EBITDA for the three and nine months ended June 30, 2003:

                              Three Months Ended        Nine Months Ended
                                   June 30,                  June 30,
                                2002        2003          2002       2003

  Operating income            $9,696      $8,225       $24,551    $22,858
  Depreciation                 2,922       2,843         8,984      8,400
  Amortization                   672          42         2,025        138

  EBITDA                     $13,290     $11,110       $35,560    $31,396

EBITDA is defined as operating income plus depreciation and amortization. EBITDA is presented in this manner because we believe it is a widely accepted financial indicator of a company's ability to service and/or incur indebtedness. EBITDA is also used by management to evaluate financial performance and determine resource allocation for each of its operating units and for the Company as a whole. However, EBITDA is not a measure of financial performance under generally accepted accounting principles. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated from operations or other financial statement data presented in the consolidated financial statements. Because EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, EBITDA as presented may not be comparable to other similarly titled measures of other companies.

Quarterly Conference Call

FastenTech will host a conference call on July 28, 2003 at 11:00 a.m. EDT to discuss third quarter 2003 results. You can access the conference call via a toll-free number. For listen-only access, please call the toll-free number 1-888-747-3510 by 11:00 a.m. EDT. For those unable to participate in the conference call, a replay will be available until 12:00 midnight EDT on Thursday, July 31, 2003. The replay number is 1-888-266-2081. The passcode for the replay will be 218179.

FastenTech, Inc., headquartered in Minneapolis, Minnesota, is a leading manufacturer and marketer of highly engineered specialty fasteners and fastener systems and engineered components that provide critical applications to a broad range of end-markets, including the automotive and light truck, construction, industrial, military, power generation, and medium- and heavy- duty truck markets.

Forward-Looking Statements

The matters discussed in this press release may constitute forward-looking statements that are subject to many uncertainties. Forward-looking statements are identified by such forward-looking terms as "may," "will," "could," "should," "seeks," "intends," "estimates," "guidance," "expects," "believes," "anticipates" or "plans" or the negative thereof or other comparable terms, or by discussions of strategy, plans or intentions. In particular, any statements, express or implied, concerning future operating results or ability to generate revenues, income or cash flow to service debt are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These include risks associated with: our actual versus expected internal growth; our high degree of leverage; our ability to comply with certain financial and other covenants in our loan agreements and indentures; the success or failure of our growth strategies, including international expansion; our ability to attract and retain customers; our ability to accurately predict our production capacity requirements; our ability to attract and retain key personnel; our ability, and the ability of our customers, to maintain good labor relations with our and their respective employees and the union representing them; our ability to develop and market new products and to innovate existing product lines; our ability to protect our intellectual property; the cost and availability of raw materials, especially steel; trends and conditions in our business, including trends in the markets that we serve; our ability to identify and integrate acquisitions; our future capital needs; our ability to continue to control costs and maintain quality; our ability to comply with applicable governmental laws and regulations and the cost of such compliance; and competitive conditions in the markets in which we operate. In light of these and other uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by FastenTech that FastenTech's plans and objectives will be achieved. The Company does not assume any obligation to update any forward-looking statements or other information contained in this press release.