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Mark IV Reports Fourth Quarter; Fiscal Year Results

AMHERST, NY March 19, 1997 -- Mark IV Industries, Inc. (NYSE: IV) today reported record sales and earnings before special items for its fourth quarter and fiscal year ended February 28, 1997. Income from continuing operations rose 30 percent in the quarter, to $23.5 million from a restated $18.1 million last year, while related fully-diluted earnings per share increased 28 percent, to 37 cents from 29 cents, on approximately 63.5 million weighted average shares outstanding. For the year, income and per share earnings from continuing operations before special items rose 21 percent, to $100.2 million and $1.58, from $82.8 million and $1.31.

Sales from continuing operations in the quarter increased 14 percent, to $519.2 million from $455.0 million. Operating income (income from continuing operations before interest expense and taxes) increased 22 percent, to $52.6 million from $43.2 million last year.

All share and share-related amounts are fully-diluted and have been restated to reflect the five percent stock dividend issued in April 1996.

Last year, Mark IV substantially completed a divestiture program aimed at selling its non-core operations in order to focus on its power transmission, fluid transfer and filtration businesses. These divested businesses, which have total annual sales of approximately $310 million, have been classified as discontinued operations in fiscal 1997, and results for fiscal 1996 have been restated accordingly to reflect this treatment.

Net income in this year's fourth quarter was $29.5 million, or 46 cents per share, compared to $20.7 million, or 33 cents per share last year. This yearŐs quarterly net income includes $0.7 million (one cent per share) from discontinued operations, and a $5.3 million gain (eight cents per share) on the sale of the discontinued businesses, while last year's net income includes $2.6 million (four cents per share) from discontinued operations. The discontinued operations were present for only a part of this years' quarter versus the full period last year.

The results of operations of Imperial Eastman, acquired in March 1996, are included in this year's fourth quarter results, but not in fiscal 1996. Pro forma the effects of the Imperial Eastman acquisition, sales from continuing operations grew seven percent in the quarter, year-over-year.

For the fiscal year ended February 28, 1997, income and per share earnings from continuing operations before special items rose 21 percent, to $100.2 million and $1.58, from $82.8 million and $1.31. Due to dispositions made part way through the year, fiscal 1997 income and per share earnings from discontinued operations before special items were $5.9 million and nine cents versus $9.6 million and 15 cents last year, bringing the years' totals to $106.1 million ($1.67 per share) versus $92.4 million ($1.46 per share) in fiscal 1996. Special items, consisting of a pre-tax restructuring charge of $112.5 million ($67.5 million or $1.06 per share after taxes) taken in the third quarter, were offset, somewhat, by gains of $17.5 million (27 cents per share) realized in the third and fourth quarters from the sale of discontinued operations, reducing this year's net income to $56.1 million (88 cents per share) from $92.4 million ($1.46 per share) last year. There were no special items last year.

Sales from continuing operations for the year increased 17 percent, to $2.08 billion from $1.78 billion (seven percent pro forma the effects of Imperial Eastman, and the acquisition of FitzSimons, which occurred late in fiscal 1996). Operating income (income from continuing operations before interest expense, taxes and the restructuring charge) increased 19 percent, year-over-year, to $223.2 million from $188.3 million.

The restructuring charge consisted of $60.7 million in non-cash asset revaluation and pension related costs, and $51.8 million in employee transition, plant closing and other related cash costs. Realigning the company's operations will eliminate one million square feet of manufacturing and distribution space, and 1,000 net jobs, while also removing redundancies and improving customer service. As a result, once fully-implemented, Mark IV expects to realize pre-tax savings of $40-$45 million per year, or 38-43 cents per share after taxes. The program will take 18-24 months to complete from its start last October.

Commenting on the yearŐs results, Sal H. Alfiero, chairman and chief executive officer of Mark IV said, "We feel progress was pretty good during fiscal 1997. Last year, we announced plans to sell several of our non-core businesses -- and just a few weeks into fiscal 1998, this effort has been substantially completed for total proceeds of approximately $313 million.

"A portion of the proceeds were used initially to repay debt incurred in the acquisitions of Imperial Eastman, a manufacturer of industrial hose, connectors and couplings, last March, and CTM, an Italian manufacturer of automotive dampers, in November 1996. These acquisitions expanded the capabilities and product offerings of our core industrial and automotive operations. In addition, we increased our investment in South America in order to expand our presence in that region and to satisfy the needs of our automotive customers located there. The balance of our divestiture proceeds were used to eliminate outstanding domestic bank debt, pending redeployment to finance future acquisitions and to repurchase the company's common stock.

"The changes being made as part of our realignment program, launched in October, are progressing as scheduled, with extra attention being given to avoid disruption of customer service during transition periods. Although little benefit was realized during fiscal 1997, we expect to see an increasing contribution to operating income beginning in the second half of fiscal 1998."

Mr. Alfiero added, "Although we enjoyed good business conditions throughout most of fiscal 1997, per share earnings in the year were reduced by two cents, due to labor problems experienced by one of our automotive OEM customers. Also, adverse currency movements contributed to an additional two cent hit, for a total reduction in the year of four cents per share.

Mr. Alfiero further commented, "Pro forma revenue in our Industrial segment grew seven percent in the quarter and the year, led by a strong showing in the domestic portion of our business. Automotive revenue increased eight percent in the quarter, and seven percent year-over-year. Growth in our Automotive business was led by a double digit increase in foreign sales, due to the mix of power steering, air conditioning and environmental systems and components being shipped to our European customers.

"Domestically, Automotive OEM revenue growth was slightly above the industry pace, due to increased sales of fuel system components. In the Automotive Aftermarket, our maintenance business had a strong fourth quarter, while year-over-year results grew by five percent."

Mark IV Industries, Inc., headquartered in the Buffalo suburb of Amherst, New York, employs 15,000 people worldwide, manufacturing power and fluid transfer systems and components for global industrial and automotive markets. For more information on Mark IV, visit the company's web site at http://www.mark-iv.com.

MARK IV INDUSTRIES, INC.
(Amounts in thousands, except per share data)

Three Months Ended
Last Day of February

Fiscal Year Ended
Last Day of February

1997

1996

1997

1996

Sales from continuing operations
$   519,200 
$   455,000 
$ 2,076,000 
$ 1,779,200 
Operating income(a)
$    52,600 
$    43,200 
$   223,200 
$   188,300 
Interest expense
$    14,200 
$    13,500 
$    59,000 
$    52,600 
Income from continuing operations(b):
 Before restructuring charge
$    23,500 
$    18,100 
$   100,200 
$    82,800 
 Restructuring charge
-    
-    
(67,500)
-    
 Total continuing
$    23,500 
$    18,100 
$    32,700 
$    82,800 
Discontinued operations(b):
 Before divestitures
$       700 
$     2,600 
$     5,900 
$     9,600 
 Gain on divestitures
     5,300 
-    
    17,500 
-    
 Total discontinued
     6,000 
     2,600 
    23,400 
     9,600 
 Net Income
$    29,500 
$    20,700 
$    56,100 
$    92,400 
Primary earnings per share:
 Continuing operations:
 Before restructuring charge
$      0.37 
$      0.29 
$      1.59 
$      1.31 
 Restructuring charge
-    
-    
(1.07)
-    
 Total continuing
       0.37 
       0.29 
       0.52 
       1.31 
Discontinued operations:
 Before divestitures
       0.01 
       0.04 
       0.09 
       0.15 
 Gain on divestitures
       0.09 
-    
       0.28 
-    
 Total discontinued
       0.10 
       0.04 
       0.37 
       0.15 
 Net Income
$      0.47 
$      0.33 
$      0.89 
$      1.46 
Fully-diluted earnings per share:
 Continuing operations:
 Before restructuring charge
$      0.37 
$      0.29 
$      1.58 
$      1.31 
 Restructuring charge
-    
-    
(1.06)
-    
 Total continuing
       0.37 
       0.29 
       0.52 
       1.31 
Discontinued operations:
 Before divestitures
       0.01 
       0.04 
       0.09 
       0.15 
 Gain on divestitures
       0.08 
-    
       0.27 
-    
 Total discontinued
       0.09 
       0.04 
       0.36 
       0.15 
 Net Income
$      0.46 
$      0.33 
$      0.88 
$      1.46 
Weighted average number
of shares outstanding:
 Primary
     63,100 
     63,000 
     63,100 
     63,000 
 Fully-diluted
     63,500 
     63,400 
     63,500 
     63,400 

(a) Income from continuing operations before interest expense, taxes and restructuring charge.
(b) Net of related tax effects.


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