JPE Inc. Reports Net Loss for Third Quarter

16 November 1998

JPE Inc. Reports Net Loss for Third Quarter

    ANN ARBOR, Mich.--(AutomotiveWire)--Nov. 13, 1998--JPE Inc. (OTC BB:JPEI) today reported operating results for the third quarter and nine months ended September 30, 1998.
    For the quarter ended September 30, 1998, JPE Inc. reported a net loss of $38.1 million or $8.29 per share as compared to net income of $191,000 or $0.04 per share for the third quarter of 1997. The third quarter loss included the write down of assets in the aggregate amount of $29.8 million related to the company's two subsidiaries, Plastic Trim Inc. ("PTI") and Starboard Industries Inc. ("SBI") which filed for protection on September 15, 1998 under Chapter 11 of the Bankruptcy Code. In addition, the company reported a loss of $5.3 million on the sale of Allparts Inc. Results were also impacted by professional fees related to the bankruptcy filings of PTI and SBI in the aggregate amount of $1.4 million and higher interest expense of $1 million over the same quarter in 1997.
    James J. Fahrner, chief financial officer, stated, "The impact of the General Motors strike and the resulting bankruptcy filings for three of our subsidiaries had a materially adverse effect on our results. Although these are all good businesses, they were unable to carry their respective debt loads and fund operations following the settlement of the General Motors strike. We continue to pursue our stated strategy of selling these businesses."
    Net sales for the third quarter of 1998 were $49.2 million, a decrease of 30% as compared to $70.3 million for the third quarter of 1997. The sales decrease is attributable to the bankruptcy filings for PTI and SBI on September 15, 1998; the appointment of an Interim Receiver for JPE Canada Inc. ("JPEC") on August 27, 1998; lower sales volume for all of the company's businesses; and lost sales of approximately $6.5 million due to the General Motors strike. As a result of the bankruptcy filings for PTI and SBI and the appointment of the Interim Receiver for JPEC, GAAP does not allow the company to consolidate the results of PTI, SBI and JPEC from the dates of their respective filings.
    Interest expense for the third quarter ended September 30, 1998 was $3.6 million compared to $2.7 million for the same period as last year. The higher interest expense is the result of the defaults on the company's debt arrangements, raising the effective interest rate to approximately 11%.
    The net loss for the nine months ended September 30, 1998 was $48.8 million or $10.62 per share as compared to a net loss of $925,000 or $0.20 per share reported for the nine months ended September 30, 1997. In the second quarter of 1998, the company had recorded a $4.5 million write-down of assets related to JPEC, following the appointment of an Interim Receiver on August 27, 1998. The net sales for the nine months ended September 30, 1998 were $185.2 million as compared to $215.3 million for the same period last year.
    The statements contained in this press release which are not historical facts are forward looking statements. The company's actual results may differ materially from those projected in its forward looking statements, including, but not limited to: sales levels; product mix; launch difficulties; scrap rates; the ability to obtain price increases; the cooperation from and continued funding by the company's and JPE Canada's respective lenders; and the timing of and proceeds from the company's sale of its businesses. In addition, various factors discussed in the company's various reports filed with the Securities and Exchange Commission may affect such forward looking statements.

JPE Inc.
Consolidated Statements of Operations

(Unaudited)
(In thousands, except per share amounts)

                                 Quarter Ended     Nine Months Ended
                                  September 30,      September 30,
                                ________________  __________________
                                  1998     1997     1998      1997
                                  ____     ____     ____      ____
Net Sales                       $49,150  $70,298  $185,217  $215,330

Gross Profit                      4,893   10,497    19,332    30,912

Income (Loss) Before 
 Taxes (a)(b)                   (39,762)     466   (50,304)     (814)

Net Income (Loss) (a)(b)        (38,144)     191   (48,808)     (925)

     Earnings (Loss) Per 
      Share (a)(b)               $(8.29)   $0.04   $(10.62)   $(0.20)

     Weighted Average Shares      4,602    4,604     4,602     4,602

(a) Includes write-down for bankruptcy and loss on sale of business.

(b) Includes a charge of $2,250 for the discontinuance of the stamping
business in 1997.