Universal Automotive Reports 2004 Second Quarter Financial Results

Universal Automotive Reports 2004 Second Quarter Financial
Results 


ALSIP, Ill., Aug. 20  /PRNewswire-FirstCall/ -- Universal Automotive
Industries, Inc. (NASDAQ:UVSL) today reported financial results for the second
quarter, which include a full quarter of contributions from the company's
acquisition of certain assets from TRW Automotive, Inc.

Sales for the 2004 second quarter, increased 45% to $25.9 million from $17.8
million in the second quarter of 2003.  The company sustained a net loss of
$3.3 million, equal to $0.31 per share, compared with net income of $15,083, or
breakeven on a per share basis, for the 2003 second quarter.  Per share
calculations were based on 10.7 million and 12.2 million shares outstanding for
the second quarter of 2004 and 2003, respectively.

"Net sales were substantially higher than in the prior year quarter.  As
expected, higher costs associated with the integration process combined with
rising raw materials and freight costs adversely impacted the bottom line.  As
a result of industry wide price increases, our customers accepted price
increases in the month of July, therefore we are able to offset a portion of
the material increases going forward," said Arvin Scott, Universal's president
and chief executive officer.  "In an effort to lower freight costs, enhance
service efficiency and help secure new business, we have begun transitioning
certain customer accounts that were serviced from our Alsip, Illinois
distribution center to our Parsippany, New Jersey distribution center.  Also,
we have implemented a number of steps to improve supply chain management,
including changing the forecasting technology to a proven process and adding
seasoned aftermarket professionals, which we expect will yield significant
benefits over the long term.

"The major integration initiatives, which are now behind us, will significantly
improve inventory management, eliminate certain redundancies and allow the
entire organization to operate as one," Scott said.  "We are going into the
third quarter a much improved company with solid momentum."

For the first six months of 2004, sales increased 50% to $49.2 million from
$32.9 million in the same period a year ago.  Net income for the first six
months of 2004 was $4.4 million, equal to $0.32 per diluted share, which
includes a non-operating, non-cash gain of $9.9 million on the valuation of
assets purchased.  This compares to a net loss of $959,387, or $0.12 per share,
for the first six months of 2003.  Per share calculations were based on 13.8
million and 8.2 million shares outstanding for the first six months of 2004 and
2003, respectively.

Conference Call Information and Forward-Looking Statements

On Friday, August 20, 2004, the company will host a conference call with
interested parties beginning at 9:00 a.m. (ET) to review the results of
operations for the second quarter ended June 30, 2004.  Discussion during the
conference call may include forward-looking statements regarding such topics
as, but not limited to, the company's revenues, margins, operating expenses and
any comments the company may make about its future in response to questions
from participants on the conference call.  The conference call may be heard by
any interested party through a live audio Internet broadcast at
http://www.fulldisclosure.com/.  For those unable to listen to the live
broadcast, a

playback of the webcast will be available at both Web sites for one year
beginning at approximately 11:00 a.m. (ET), August 20, 2004.

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)

   (in thousands,
    except per
    share amounts)    Three Months Ended June 30,  Six Months Ended June 30,
                           2004         2003           2004         2003

   Net sales             $25,889      $17,839        $49,236      $32,856
   Cost of sales          23,615       15,203         44,389       28,472
   Gross profit            2,274        2,636          4,847        4,384
   Selling, general,
    and administrative
    expenses               4,995        2,375          9,219        4,866

   Loss from operations   (2,721)         261         (4,372)        (482)
   Other (income)/expense
    Interest expense         597          249          1,111          488
    Gain on valuation of
     assets purchased         --           --         (9,886)          --
    Other                     (4)          (4)           (13)         (11)
                             593          246         (8,788)         477

   Income (loss) before
    income taxes          (3,314)          15          4,416         (959)

   Income tax provision       --           --             --           --
   Net income (loss)     $(3,314)         $15         $4,416        $(959)


   Comprehensive income
    (loss):
   Net income (loss):    $(3,314)         $15         $4,416        $(959)

   Earnings (loss)
    per share:

   Basic                  $(0.31)       $0.00          $0.41       $(0.12)
   Diluted                $(0.31)       $0.00          $0.32       $(0.12)

   Weighted average
    number of common
    shares outstanding:

   Basic                  10,706        8,225         10,706        8,225
   Common stock
    equivalents resulting
    from:
     Conversion of
      preferred stock         --        3,014          3,014           --
     Warrants and options     --          965             87           --
   Diluted                10,706       12,204         13,807        8,225


DATASOURCE: Universal Automotive Industries, Inc.



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

[phone], ext. 227; or Roger S. Pondel of PondelWilkinson Inc.,

[phone], for Universal Automotive Industries Inc.

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