UVSL Universal Automotive Industries - Common Stock (MM)

Universal Automotive Reports Positive Results for 2004 First Quarter * Sales Increase 55%, Including Contributions From Milestone TRW Automotive Asset Acquisition ALSIP, Ill., May 20 /PRNewswire-FirstCall/ -- Universal Automotive Industries, Inc. today reported improved financial results for the first quarter ended March 31, 2004, including contributions from the company's acquisition of certain assets from TRW Automotive, Inc. on January 12, 2004. Sales for the 2004 first quarter, which included 12 weeks of contributions from the acquired business, advanced 55% to $23.3 million from $15.0 million a year ago. Universal posted net income for the 2004 quarter of $7.7 million, equal to $.57 per diluted share, including a non-operating, non-cash gain of $9.9 million on the valuation of assets purchased. The company posted a net loss of $974,470, or $.12 per share, for the 2003 first quarter. Per share amounts were based on 13.6 million shares outstanding for the 2004 period and 8.2 million shares for the corresponding quarter a year ago. "Our goal is to maximize the value from the assets we acquired and attain profitability from an operating perspective as quickly as possible," said Arvin Scott, Universal's president and chief executive officer. "We are making excellent progress toward achieving that objective, having successfully completed the first phase of our integration process and now proceeding with phase two, which focuses on information technology. "Aside from dramatically increasing Universal's size and placing the company among the top five in its sector, the combination has added important, well known and highly respected branded products and an expanded roster of customers," Scott said. "Moreover, the transaction already is providing improved operating efficiencies and economies of scale, with approximately $5 million in identified costs currently being taken out of the combined operations." Scott said that during the first quarter, the company closed distribution centers in Itasca, Illinois and Compton, California, and consolidated them into existing facilities. He said the company's balance sheet has been strengthened, and the debt-to-equity ratio improved to 2.55:1 at March 31, 2004 from 6.80:1 at December 31, 2003. "Throughout the first quarter, we experienced consistent favorable trends in both sales growth and expense reductions," Scott said. "The majority of the integration costs are now behind us, and we fully expect to realize cost savings as 2004 unfolds. "While our industry continues to face challenges from escalating costs of raw materials, we recently announced price increases for certain product lines and are continuing to enhance manufacturing efficiencies and expand global sourcing. There is still much work ahead integrating the two organizations, but we are right on track and confident that the synergies, operating efficiencies and growth opportunities afforded by the combination will provide tangible returns." About Universal Automotive Industries, Inc. Universal, headquartered in the Chicago area, specializes in the distribution and manufacture of brake rotors and other brake parts, under its trademarks UBP -- Universal Brake Parts, Evolution and Ultimate in the United States and Canada and its proprietary Autospecialty, ValuMaxx and PowerStop brands. The company also provides TRW-branded brake rotors and drums and suspension products. This news release contains certain 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, which are intended to be covered by safe harbors created hereby. Such forward-looking statements, including, but not limited to, returning the company to profitability, realizing cost savings, as well as synergies, operating efficiencies and growth opportunities as a result of the acquisition of certain assets from TRW Automotive, involve known and unknown risks, uncertainties (including those risk factors referenced in the company's filings with the Securities and Exchange Commission), and other factors that may cause the actual results, performance or achievements of the company to be materially different from any future results, performance, or achievements of the company expressed or implied by such forward-looking statements. UNIVERSAL AUTOMOTIVE INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, 2004 2003 Net sales $23,347,747 $15,016,910 Cost of sales 20,774,200 13,268,771 GROSS PROFIT 2,573,547 1,748,139 Selling, general, and administrative expenses 4,224,572 2,491,562 (LOSS) FROM OPERATIONS (1,651,025) (743,423) Other income/ (expense) Interest expense (513,909) (238,841) Gain on valuation of assets purchased 9,886,328 -- Other 7,089 7,794 9,379,508 (231,047) INCOME (LOSS) BEFORE INCOME TAXES 7,728,483 (974,470) Income tax provision -- -- NET INCOME (LOSS) $7,728,483 $(974,470) Comprehensive (loss) income: Net (loss) income $7,728,483 $(974,470) Other comprehensive income (loss) -- Foreign currency translation adjustment (11,983) 67,788 Comprehensive (loss) income $7,716,500 $(906,682) (Loss) earnings per share: Basic $0.76 $(0.12) Diluted $0.57 $(0.12) Weighted average number of common shares outstanding: Basic 10,159,384 8,224,949 Common stock equivalents resulting from: Conversion of preferred stock 3,014,380 -- Warrants and options 403,244 -- Diluted 13,577,008 8,224,949 DATASOURCE: Universal Automotive Industries, Inc. CONTACT: Robert W. Zimmer of Universal Automotive Industries Inc., +1-708-293-4050, ext. 227; or Roger S. Pondel of PondelWilkinson Inc., +1-323-866-6006, for Universal Automotive Industries, Inc.

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