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Automotive Performance Group Third Quarter and Nine-Months 2000

22 November 2000

Automotive Performance Group Sharply Reduces Operating Loss in Third Quarter and Nine-Months 2000

    GARDEN GROVE, Calif.--Nov. 21, 2000--Automotive Performance Group, Inc. (RACG) today reported results for the third quarter and first nine months of 2000 (ended September 30). Operating loss for the third quarter was $175,000, compared with an operating loss of $358,000 in the year-ago period. This marks the fifth consecutive quarter that operating losses have been reduced from the year-earlier period.
    For the first nine months of 2000, Automotive Performance Group (APG) reported an operating loss of $485,000. In the comparable 1999 period the Company had an operating loss (excluding a write-off of goodwill of $3.05 million) of $2.1 million.
    The improvement in APG's operating results for the nine-month period reflect significant reductions in indirect expenses, notably salaries, payroll taxes and benefits, professional expenses, and selling, general and administrative (SGA) costs.
    APG reported a net loss of $147,000, equal to $(0.01) per fully diluted share, for the third quarter of 2000 versus a net loss of $12.9 million, or $(1.20) per share, in the year-ago period. Third-quarter 1999 results include one-time non-cash items of $11.8 million related to costs incurred for the issuance of warrants and options associated with (1) the acquisition and conversion of certain financing, and (2) the acquisition of the Company's investment in PBT Brands, Inc. (PBT). Third-quarter 1999 results also include losses of $441,000, or $(0.04) per share, from discontinued operations.
    For the first nine months of 2000, APG reported a net loss of $2.9 million, equal to $(0.23) per fully diluted share. This loss includes $2.5 million in equity in losses of an affiliate. The Company reported a net loss of $21.5 million, equal to $(2.74) per share, for the comparable 1999 period. The nine-months 1999 results include one-time non-cash items of $11.8 million, and a loss of $4.3 million, or $(0.54) per share, from discontinued operations.
    "We expect to report a further year-to-year decrease in our operating loss during the final quarter of 2000, and a significant reduction in our loss for this year versus 1999," said APG's Chairman and Chief Executive Officer, Dean M. Willard. "The restructuring and cost-containment programs that were implemented late last year are working. And we will continue to find ways to further reduce our operating expenses."
    Mr. Willard noted that APG has also been successful in its program of negotiating favorable resolution of outstanding liabilities. "We have continued to settle amounts outstanding with our creditors. In October, for example, we reached an agreement with one of our vendors wherein we will pay a total of $160,000 in three installments over nine months. As a result of this agreement we recognized a reduction in our accounts payable of $154,000 as of October 6, 2000. Our current liabilities at September 30, 2000 were $1.3 million. At December 31, 1999, our current liabilities exceeded $1.7 million."
     Automotive Performance Group, Inc. and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (In Thousands, Except Per-Share Data) Three months ended Nine months ended September 30, September 30, -------------------- -------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Revenues $ 23 $ -- $ 89 $ -- Expenses Direct expenses 16 -- 69 -- Selling, general and administrative 26 (71) 113 435 Salaries, payroll taxes and benefits 32 114 97 526 Professional expenses 88 310 188 1,135 Depreciation and amortization 36 5 107 14 Write-off of goodwill -- -- -- 3,047 198 358 574 5,157 Operating loss (175) (358) (485) (5,157) Other income (expense) Equity in losses of affiliate -- (1,926) (2,527) (1,926) Interest expense (5) (341) (10) (364) Financing costs -- (9,902) -- (9,902) Other income 34 96 144 147 29 (12,073) (2,393) (12,045) Loss from continuing operations before discontinued operations (146) (12,431) (2,878) (17,202) Discontinued operations Loss from operations of discontinued specialty chemical subsidiary (1) -- (46) (1,111) Loss from sale of discontinued specialty chemical subsidiary including operating losses during phase-out period -- (622) -- (807) Loss from operations of discontinued automotive parts and accessories subsidiaries -- -- -- (850) Loss from sale of discontinued automotive parts and accessories subsidiaries including operating losses during phase-out period -- 181 -- (1,504) Loss from discontinued operations (1) (441) (46) (4,272) NET LOSS $ (147) $(12,872) $ (2,924) $(21,474) Loss per common share basic and diluted Loss before discontinued operations $ (0.01) $ (1.16) $ (0.23) $ (2.20) Discontinued operations 0.00 (0.04) 0.00 (0.54) $ (0.01) $ (1.20) $ (0.23) $ (2.74)