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AQM Announces Record Sales and Profits

10 February 1999

AQM Announces Record Sales and Profits; Reports 4th Quarter and 1998 Sales and Income

    WOODBRIDGE, Ontario--Feb. 9, 1999--AQM Automotive Corporation (AQM) today announced its consolidated financial and operating results for its fourth quarter of 1998 (September 1, 1998 to November 30, 1998) and for the year ended November 30, 1998.
    Sales volumes for the 4th quarter increased by 34% or $893,256 over the 4th quarter of 1997, to $3,538,612. This increase was caused by both higher unit shipments and favourable exchange rates on U.S. sales revenues. Sales for the year ended November 30th, 1998 were $12,614,743 up 21% from the previous year.
    Earnings before interest, taxes, depreciation and amortization (EBITDA), for the 4th quarter of 1998 were $326,115 (2.9 cents per share), up from $20,524 reported for the 4th quarter of 1997. For the year ended November 30th, EBITDA was up 52% to 964,802, or 8.4 cents per share.
    Net income for the 4th quarter of 1998 was $72,641 (0.6 cents per share). Annual net income was $342,541 (2.9 cents per share), up 247% from 1997's income of 0.7 cents. The annual net income includes a pre-tax provision of $200,000 for possible assessments from the U.S. Treasury Department relating to anomalies in duty processing between 1989 and 1992.

     
               Fourth Quarter Ended        Year Ended
               30-Nov-98  30-Nov-97  30-Nov-98    30-Nov-97

Sales          3,538,612  2,645,356  12,614,74   10,398,983
Gross Profit    1,058,12    716,354  3,609,308    3,120,609
Gross Profit 
 Margin            29.9%      27.1%      28.6%        30.0%
EBITDA           326,115     20,524    964,802      634,562
Net Income        72,641  (148,478)    342,541       98,722
EDITDA per 
 share         2.9 cents  0.2 cents  8.4 cents    5.3 cents
Net Income 
 Per Share     0.6 cents (1.3)cents  2.9 cents    0.7 cents

    Commenting on the quarterly and annual results, Mr. Leslie Leib, Chairman of the Company, stated he was looking forward to further increases in sales and profits, as the Company continued to implement its strategy of increasing market share.
    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.