Universal Automotive Industries, Inc. Announces Third Quarter Results

Universal Automotive Industries, Inc. Announces Third Quarter Results 


ALSIP, Ill., Nov. 14  /PRNewswire-FirstCall/ -- Universal Automotive Industries,
Inc. , an automotive aftermarket brake parts manufacturer and distributor, today
announced net sales for the third quarter of 2003, the three months ended
September 30, 2003, were $14.1 million, compared to net sales of 17.1 million
during the comparable quarter in 2002. Net loss for the quarter ended September
30, 2003 was $812,217 ($0.09 per primary share) compared to net income of
$11,985 for the same period in 2002.

For the nine months ended September 30, 2003, sales were $46.9 million, compared
to net sales of $55.2 million during the comparable period in 2002. Year to date
net loss was $1.8 million ($0.21 per primary share) as compared to income of
$681,121 ($0.08 per primary share) for the comparable period in 2002.  The
results for the nine months ended September 30, 2003 were adversely affected as
a result of a disruption in the supply of brake rotors and drums purchased from
China.  Zichen Casting Company, the Company's primary Chinese rotor supplier was
temporarily shut down due to a fire in their plant.  The Company's orders for
products were delayed several months.  Presently, service levels have improved
to industry-acceptable standards.

According to Arvin Scott, President and CEO:

"Supply chain issues associated with brake drums and rotors manufactured in
China are the primary reason for the sales decrease.  We have taken several
initiatives to safeguard our supply against possible future disruptions. Service
levels for brake drums and rotors are presently above 90% and continuously
improving.  Strong sales of our Evolution Ceramic disc pads continue to support
our strategy of building brand identity in the higher margin premium friction
product category.  Non-brake parts sales increased by 37% or $857,000 in the
third quarter of 2003 as compared to the same period in 2003."

Mr. Scott added, "We are beginning to see sales improvement in our brake drum
and rotor category as a result of our improved service levels.  The sales team
achieved an impressive victory during the third quarter, as the Company was
selected by a national program distribution group to be co-supplier of their
private label hydraulic parts.  This was the second group approval we received
for hydraulic parts this year.  We are beginning to regain sales momentum as we
head into 2004."

Gross profit for the three months ended September 30, 2003 is $1.9 million, or
13.5% of net sales, compared to $3.2 million or 18.7% in the same period of
2002, a decrease of $1.3 million.

Gross profit for the nine months ended September 30, 2003 is $6.3 million or
13.4% of net sales compared to $10.4 million or 18.9% in the same period of
2002, a decrease of $4.1 million.  Gross margins were adversely affected for the
nine months ended September 30, 2003 due to lower sales volume and under
absorption of fixed overhead at our friction manufacturing facilities.  Other
factors were start-up expenses relating to the relocation of the rotor
manufacturing facility.  Cost containment and expense reduction initiatives
partially offset the lower sales volume.

Selling, general and administrative expenses of $2.5 million (17.5% of net
sales) for the three months ended September 30, 2003 decreased by $398,130 when
compared to $2.9 million (16.7% of net sales) for the same period in 2002.  The
13.9% reduction was a result of reduced freight and commission costs on the
lower sales levels, cost containment and expense reduction initiatives.

For the nine months ended September 30, 2003, selling, general and
administrative expenses of $7.3 million or 15.6% of net sales decreased by $1.2
million when compared to $8.5 million (15.3% of net sales) for the same period
in 2002.  The 13.6% reduction was a result of reduced freight and commission
costs on the lower sales levels, cost containment and expense reduction
initiatives.

Total other expense for the three months ended September 30, 2003 decreased
$77,169 to $262,015 from $339,184 for the same period of 2002.  Of this total,
interest expense decreased $67,897 from the same period in 2002 due to lower
borrowing levels on our revolving line of credit, coupled with lower interest
rates.

For the nine months ended September 30, 2003 total other expense decreased
$529,706 to $738,621 from $1,268,327 for the same period of 2002.  Of this
total, interest expense decreased $334,052 from the same period in 2002 due to
lower borrowing levels on our revolving line of credit, coupled with lower
interest rates, and the absence of a $162,500 charge to income, incurred during
the prior period, resulting from the cancellation of a strategic supply
agreement with Creative Friction LLC.

The Company, headquartered in the Chicago area, specializes in distribution and
manufacture of brake rotors and other brake parts, under its trademarks "UBP -
Universal Brake Parts," and "Ultimate" in the United States and Canada.

For further information contact:  Robert W. Zimmer, CFO (708-293-4050, extension
227).

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 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.
                       Summary of Financial Results
                      ($000's) except per share data

                          Three Months Ended           Nine Months Ended
                             September 30                September 30
                           2003         2002          2003          2002
  Net Sales:
  Brake Parts            $10,897       $14,818      $36,261       $49,571
  Commodities              3,186         2,329       10,678         5,644
  Total                   14,083        17,146       46,939        55,215

  Gross Profit             1,907         3,206        6,290        10,422
  %                        13.5%         18.7%        13.4%         18.9%

  Selling, general and
   administrative expense  2,457         2,855        7,323         8,473

  Income from operations    (550)          351       (1,033)        1,949

  Other (Income) Expense:
    Interest Expense         285           353          773         1,107
    Loss on discontinued
     operations                -             -            -             -
    Other                    (23)          (14)         (34)          161
    Total                    262           339          739         1,268

  Pretax income (loss)      (812)           12       (1,772)          681

  Income tax
   provision (benefit)         -             -            -             -

  Net income (loss)        $(812)          $12      $(1,772)         $669

  Earnings per share:
    Basic                 $(0.09)           $-        $(0.21)       $0.08
    Diluted               $(0.09)           $-        $(0.21)       $0.08

  Weighted average
   shares outstanding:
    Basic              8,437,589     8,220,949    8,296,608     8,187,803
    Common stock
     equivalents
     resulting from
     warrants and
     options                   -     3,014,380            -     3,377,640
    Diluted            8,437,589    11,235,329    8,296,608    11,565,443


DATASOURCE: Universal Automotive Industries, Inc.



CONTACT:  Robert W. Zimmer, CFO of Universal Automotive Industries, Inc.,

[phone], ext. 227



Web site:  http://www.uaiinc.com/ 

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