Veltri Metal Products, Inc. Reports Second Quarter Profits of $0.1 Million

TROY, Mich., Sept. 16 -- Automotive parts supplier, Veltri Metal Products, Inc., today announced net income of $0.1 million, in the second quarter ended July 5, 2003, compared with net income of $2.6 million for the year-earlier quarter. Included in the year-earlier results was a $1.7 million credit for a litigation settlement award. Included in this year's results was a $0.4 million gain on the sale of excess land. Net sales for the second quarter were $72.8 million compared to $68.7 million in the year- earlier quarter.

For the six-month period ended July 5, 2003, Veltri reported a net loss of $1.9 million on net sales of $141.1 million, compared with net income of $4.2 million on net sales of $137.9 million for the year-earlier period. In addition to the gain on the land sale, this year's results include a $1.9 million charge for the closure of Veltri's J&R Manufacturing division in the first quarter.

The Company's earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $6.5 million, compared to $7.4 million (including the litigation settlement) during the year-earlier quarter. EBITDA for the six-month period ended July 5, 2003, was $12.4 million (excluding the closure charge) compared to $13.8 million in the year- earlier period.

Outstanding indebtedness, net of cash, at the end of the second quarter was $60 million, compared to $65 million at the end of the year-earlier quarter.

Michael Veltri, President and CEO stated, "We are pleased that we were able to achieve only a slightly lower EBITDA level in the second quarter on somewhat higher sales. This is indicative of the focus on operating and continuous improvements that we have undertaken in the 22 months since our emergence from bankruptcy."

Mr. Veltri further stated, "Looking ahead, the rest of 2003 will be challenging for the Company and for the entire industry. A downward trend in our sales is expected due to the extended model changeover from the 'LH' to the 'LX' platform at the DaimlerChrysler Brampton, Ontario plant scheduled for the second half of 2003. Also, the Company has been affected by the balance out of the DaimlerChrysler 'AB' van at the Pillette Assembly Plant (Windsor, Ontario), resulting in underutilized plant capacity during this period. Earnings may be impacted in the second half of the year due to pressure from the vehicle manufacturers' continued emphasis on cost-downs coupled with the potential for labor disruption, tied to labor contract talks at the vehicle manufacturers this month. On a more positive side, the Company was successful in refinancing its debt, in a very tight capital market due to support of its current bank group. It also continues to progress favorably and to budget on several key new launches, including the DaimlerChrysler 'LX' platform, as well as others. We continue to see strength in key platform sales for our DaimlerChrysler Pacifica, Jeep Liberty, General Motors GMT 800 and Honda Accord, Element and Civic products and are very excited about the launch of our new Lakeshore, Ontario facility scheduled to open in early 2004."

Veltri Metal Products, Inc. is a leading full-service Tier One designer and manufacturer of high quality, stamped metal components and complex assemblies used by North American automotive vehicle manufacturers including DaimlerChrysler, General Motors Corporation, Honda Motors Co., Ltd., Ford Motor Company and other Tier One suppliers. The Company specializes in underbody/chassis and unexposed body structure assemblies for passenger cars, light trucks and full-size vans. Veltri's products include frame rail assemblies, inner quarter panels, rear ladder modules, cross member assemblies and trailer hitch assemblies. The Company and its management team are highly respected within the automotive industry for their expertise in supplying multi-component, complex stamping assemblies, an outstanding new program launch record and strong customer and employee relationships. The Company employs over 1,600 people at seven manufacturing facilities in the United States and Canada and is headquartered in Troy, Michigan.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from anticipated results as a consequence of certain risks and uncertainties, including but not limited to general economic conditions in the markets in which Veltri Metal Products, Inc. operates, the company's leverage and limited access to capital, the restrictions imposed by terms of the company's indebtedness, the company's reliance on major customers and selected models, the company's platform concentration, vehicle manufacturing industry cyclicality and seasonality, competition, increasing customer requirements, a unionized workforce, foreign operations and environmental risks. There is no organized market for the company's common stock, and none is likely to develop.