AQM Announces Earnings For Q3 1998

25 September 1998

AQM Announces Earnings For Third Quarter 1998/Reports Record Sales And Profits

    WOODBRIDGE, ON--Sept. 25, 1998--AQM Automotive Corporation (TSE:AQV.,OTC BB:AQM.AF) today announced its consolidated financial and operating results for its third quarter of 1998 (June 1, 1998 to August 31, 1998) and for the 9 month period ended August 31, 1998.
    Sales volumes for the quarter increased by 29.1% or $753,198 over the 3rd quarter of 1997, to $3,343,250. This increase was caused by both higher unit shipments and favourable exchange rates on U.S. sales revenues. Sales for the 9 months ended August 31, 1998 were $9,076,131 up 17.1% from the previous year.
    Earnings before interest, taxes, depreciation and amortization (EBITDA), for the 3rd quarter of 1998 was $360,693 (3.2 cents per share), up 46.6% from the previous year. For the 9 months ended August 31st, EBITDA was up 4% to $638,687, or 5.5 cents per share.
    Net income for the 3rd quarter of 1998 was $171,106 (1.5 cents per share) up 60% from the $107,008 reported for the 3rd quarter of 1997. Year to date net income was $269,900 (2.3 cents per share), up 9.2% from 1997.

                    Third Quarter Ended       Nine Months Ended
             31-August-98  31-August-97  31-August-98  31-August-97
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Sales        3,343,250     2,590,052       9,076,131      7,753,627
Gross Profit   983,979       805,919       2,551,186      2,404,255
Gross Profit
 Margin          29.4%         31.1%           28.1%          31.0%
EBITDA         360,693       246,119         638,687        614,038
Net Income     171,106       107,008         269,900        247,200
EDITDA per
 share       3.2 cents     2.1 cents       5.5 cents      5.1 cents
Net Income
 Per Share   1.5 cents     0.9 cents       2.3 cents      2.1 cents

    Commenting on the third quarter results and fourth quarter prospects, Mr. Leslie Leib, Chairman of the Company, stated he was looking forward to further increases in sales and profits, enhancing the use of operating leverage.
    AQM Automotive Corporation is a publicly traded, Canadian based holding company whose shares are listed on the Toronto Stock Exchange and the Nasdaq OTC Bulletin Boards. G.K. Industries Ltd. (G.K.I.) is the operating component of the AQM group of companies, and one of the leading companies of its kind in North America. It is involved in the procurement, manufacture, packaging and distribution of automotive fuel filters, automatic transmission filter kits, breather elements and cabin air filters.
    Approximately 70% of annual sales are exported, primarily to the United States. Sales are across the spectrum of the automotive aftermarket industry, including national brand name filter companies, retailers, program distribution buying groups, traditional warehouse distributors and undercar specialty networks. As the total automotive market continues to consolidate, we are increasing our sales efforts to retail chains and large traditional distribution networks. Growing our market share of these segments is our goal.
    The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.