Raytech Corporation Announces Second Quarter Results for 2005

SHELTON, Conn.--Aug. 1, 20057, 2005--Raytech Corporation today announced a net loss for the thirteen-week period ended July 3, 2005 of $3.4 million or $.08 loss per basic and fully diluted share compared to net income of $.1 million or nil per basic and fully diluted share for the same period in the prior year. Raytech recorded a net loss for the twenty-six-week period ended July 3, 2005 of $1.7 million or $.04 loss per basic and fully diluted share compared to net income of $1.4 million or $.03 per basic and fully diluted share for the same period in the prior year.

Net sales for the thirteen-week period ended July 3, 2005 of $60.1 million compares to $58.4 million for the same period in the prior year, an increase of $1.7 million or 2.9%. Net sales for the twenty-six-week period ended July 3, 2005 of $123.9 million compares to $115.0 million for the same period in the prior year, an increase of $8.9 million or 7.7%.

The decrease in earnings is primarily due to the continued poor performance of the Domestic OEM segment and restructuring expenses recorded in 2005.

Raytech Corporation develops, manufactures and supplies specialty engineered friction and energy absorption components used in oil immersed (wet) and dry transmission and brake systems for on- and off-road vehicles. The Company also makes and markets specialty engineered products for heat resistant, inertia control, and energy absorption applications. Our products are typically found in passenger cars, heavy duty construction and agricultural equipment, trucks, buses and logging, mining and military vehicles.

Raytech Corporation, headquartered in Shelton, Connecticut, operates five manufacturing facilities in the United States, Germany, and China as well as two technology and research centers in 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 per share data)


Comparative results are as follows:

                                         For the 13 Weeks Ended
                                    July 3, 2005        June 27, 2004
                                    ------------        -------------
                                               (Unaudited)
 
Net sales                           $     60,606        $      58,405
Net (loss) income                   $     (3,356)       $          57
Basic (loss) earnings per share:
         (Loss) earnings per share  $       (.08)       $         .00
         Weighted average shares      41,737,306           41,737,306
Diluted (loss) earnings per share:
         (Loss) earnings per share  $       (.08)       $         .00
         Weighted average shares      41,737,306           41,737,306


                                         For the 26 Weeks Ended    
                                    July 3, 2005        June 27, 2004
                                    ------------        -------------
                                               (Unaudited)

Net sales                           $    123,958        $     115,003
Net (loss) income                   $     (1,736)       $       1,408
Basic (loss) earnings per share:
         (Loss) earnings per share  $       (.04)       $         .03
         Weighted average shares      41,737,306           41,737,306
Diluted (loss) earnings per share:
         (Loss) earnings per share  $       (.04)       $         .03
         Weighted average shares      41,737,306           41,737,306