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AQM Announces Q3 Sales and Profits - Sales Commence to Major New Accounts

24 September 1999

AQM Announces Q3 Sales and Profits - Sales Commence to Major New Accounts

    WOODBRIDGE, Ontario--Sept. 24, 1999--AQM Automotive Corporation (AQM) today announced its consolidated financial and operating results for the second quarter of 1999 (June 1, 1999 to August 31, 1999) and for the nine months ended August 31, 1999. Also, the Company wishes to announce the acquisition of new major accounts in both Canada and the United States.
    Sales volumes for the 3rd quarter increased by 3.7% or $125,224 over the 3rd quarter of 1998, to $3,468,474. This increase was caused by continuing success of the Company's marketing efforts. Sales for the nine months ended August 31, 1999 were $10,255,672 up 13% from the previous year.
    Net income for the 3rd quarter of 1999 was $75,831 (0.7 cents per share), down 56%. For the nine months ended August 31, 1999, net income was $249,788 (2.4 cents per share), up 1% from the same period in 1998. For the 3rd quarter, income declined due to reductions in gross margin and increases in operating expenses.
    Earnings before interest, taxes, depreciation and amortization (EBITDA), for the 3rd quarter of 1999 was $173,144 (1.6 cents per share), down 52% from the $360,6935 reported for the 3rd quarter of 1998. For the nine months ended August 31, 1999, EBITDA was down 5% to $609,313, or 5.7 cents per share.

                         3rd Quarter Ended         6 Months Ended
                      Aug 31st    Aug 31st      Aug 31st Aug 31st
                           '99         '99          '99       '99
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Sales                3,468,474   3,343,250  10,255,672  9,076,131
Gross Profit           917,651     983,979   2,925,109  2,551,186
Gross Profit Margin      26.5%       29.4%       28.5%      28.1%
EBITDA                 173,144     360,693     609,313    638,687
Net Income              75,831     171,106     249,788    269,900
EBITDA per share     1.6 cents   3.2 cents   5.7 cents  5.5 cents
Net Income Per
 Share               0.7 cents   1.5 cents   2.4 cents  2.3 cents
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    Commenting on the quarterly results, Mr. Leslie Leib, Chairman of the Company, stated that although he was disappointed in the modest earnings for the period, he was looking forward to significant increases in sales as the Company continued to implement its strategy of increasing market share. He also made note of the recent improvement in working capital ratios which resulted from lower inventory levels.
    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, 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.