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MotorVac Announces Record Sales and EPS for Q1 of 1999

29 April 1999

MotorVac Technologies Announces Record Sales and EPS for First Quarter of 1999

    SANTA ANA, Calif.--April 29, 1999--MotorVac Technologies Inc. Thursday announced results for its first quarter of 1999.
    Sales for the first quarter of 1999 were $4,053,760, a 32 percent increase from $3,083,615 for the first quarter of 1998. For the first quarter ended March 31, 1999, the company reported net income of $283,870, or $.06 per basic and diluted share which represents an increase from $63,930 or $.01 per basic and diluted share for the first quarter of 1998.
    "This is a record for quarterly sales, EPS and operating income," said Lee W. Melody, MotorVac's president and chief executive officer. "Our new product development efforts last year are beginning to show tangible results, especially our new TRANSTECH(R) II Automotive Transmission Fluid Exchange Machine, which accounted for a major portion of the sales increase," Melody concluded.
    The record quarterly revenues for the period ended March 31, 1999 also resulted in record operating income as a percentage of sales. Operating expenses declined to $1,170,768 for the quarter ended March 31, 1999, compared with $1,312,220 for the quarter ended March 31, 1998.
    MotorVac's gross profit margin declined to 35.7 percent for the current quarter ended March 31, 1999, compared with 44.2 percent for the quarter ended March 31, 1998, partially offsetting the improvement in operating expenses. The lower gross profit margin was caused by a change in product mix as higher margin international sales declined to 6 percent of sales in the first quarter of 1999, compared with 25 percent of sales for the first quarter of 1998.
    In addition, warranty expenses increased to more than 3 percent of sales in the first quarter of 1999 compared with 1 percent in the first quarter of 1998, accounting for an additional decline in gross profit margin. As a result, the company's operating income as a percentage of sales increased to 6.7 percent for the first quarter of 1999, a historically high level, and compared with 1.7 percent for the quarter ending March 31, 1998.
    MotorVac(R) Technologies designs, develops, assembles and markets unique technological solutions for the service and repair of automotive fluid systems. Product lines include specialty chemicals and shop equipment for servicing fuel systems and transmission systems. MotorVac(R)'s products are distributed to service shops, fleets and government agencies in more than 70 countries worldwide.
    For additional information, visit MotorVac(R)'s Web site at www.motorvac.com. For the location of a MotorVac shop nearest you, call the Shop Locator at 888/788-4108, seven days a week, 24 hours a day.

    This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The company intends that such forward-looking statements shall be protected by the safe harbor provided for in such sections. In particular, statements regarding future results are subject to the risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The company may experience significant fluctuations in future operating results due to a number of economic, competitive, governmental and technological factors, including, among other things, changes in laws, the size and timing of customer orders, new or increased competition, unexpected increases in expenses, delays in acceptance of new products, product returns, seasonally in product purchases by distributors and end users, and pricing trends in the automotive after-market industry in general and, in specific, markets in which the company is active. Any of these factors, or others, could cause operating results to vary significantly from prior periods and those projected in the forward-looking statements. The making of these forward-looking statements shall not in any way obligate the company to update or correct the foregoing estimates or projections. Additional information with respect to these and other factors which could materially affect the company and its operations is included in the company's filings with the Securities and Exchange Commission, including its Annual Report or Form 10-KSB for the year ended Dec. 31, 1998 and any subsequent filings. -0-

                     MotorVac Technologies, Inc.
                         Statements of Income

                                          Three Months Ended
                                       March 31,         March 31,
                                         1999              1998

NET SALES                              $ 4,053,760       $ 3,083,615

COST OF SALES                            2,609,430         1,720,211

GROSS PROFIT                             1,444,330         1,363,404

OPERATING EXPENSES                       1,170,768         1,312,220

OPERATING INCOME                           273,562            51,184

INTEREST INCOME, NET                       (11,358)          (16,246)

INCOME BEFORE PROVISION FOR
  INCOME TAXES                             284,920            67,430

PROVISION FOR INCOME TAXES                   1,050             3,500

NET INCOME                                 283,870            63,930

BASIC EARNINGS PER SHARE               $      0.06       $      0.01

WEIGHTED AVERAGE SHARES USED 
  TO CALCULATE BASIC EARNINGS
  PER SHARE                              4,464,918         4,514,918

DILUTED EARNINGS PER SHARE             $      0.06       $      0.01

WEIGHTED AVERAGE SHARES USED 
  TO CALCULATE DILUTED EARNINGS
  PER SHARE                              4,473,869         4,514,918