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Mark IV Reports Fiscal Year; Fourth Quarter Results

AMHERST, NEW YORK, March 19, 1998 -- Mark IV Industries, Inc. (NYSE: IV) today reported results for its fiscal year and fourth quarter ended February 28, 1998. Income from continuing operations before special items increased to a record $109.2 million, up nine percent from $100.2 million last year, while related basic earnings per share rose 13 percent, to $1.70 in fiscal 1998 from $1.51 last year.

Net income for the year increased 76 percent, to $98.6 million, or $1.54 per basic share, from $56.1 million, or 84 cents per share, last year. Special items in fiscal 1998 include an extraordinary charge of $10.6 million after taxes, or 16 cents per share, due to early debt extinguishment, while last years special items include an after tax restructuring charge of $67.5 million ($1.02 per share) and income of $23.4 million (35 cents per share) from discontinued operations.

Sales from continuing operations and operating income (income from continuing operations before interest expense and taxes) for the year both increased seven percent, to $2.2 billion and $238.3 million, respectively, from $2.1 billion and $223.2 million in fiscal 1997.

For the quarter ended February 28, 1998, income from continuing operations before special items increased slightly, to $24.3 million from $23.5 million last year, while related basic earnings per share increased nine percent, to 38 cents from 35 cents in fiscal 1997.

Net income in the period was $24.3 million, or 38 cents per share, down 18 percent from last years $29.5 million, or 44 cents per share, which included a $6.0 million gain, or nine cents per share, from discontinued operations.

Sales from continuing operations in the quarter increased seven percent, to $554.9 million from $519.2 million, while operating income increased two percent in the period, to $53.4 million from $52.6 million last year.

All share and share-related amounts are basic, except where noted otherwise, and have been adjusted for the five percent stock dividend distributed in May 1997.

Basic weighted average shares outstanding decreased three percent in the year, to 64.1 million from 66.3 million, and five percent in the quarter, to 63.2 million from 66.3 million, primarily due to the companys repurchase of 3.5 million shares of common stock pursuant to a fiscal 1998 share repurchase authorization. Diluted weighted average shares outstanding increased slightly, to 67.4 million in fiscal 1998, from 66.7 million last year, and by eight percent in the quarter, to 72.1 million from 66.7 million, due to the sale of $275 million of convertible subordinated notes.

On a diluted basis, earnings per share from continuing operations before special items increased to $1.66 in fiscal 1998, from $1.50 last year, and to 36 cents in the fourth quarter from 35 cents in fiscal 1997, reflecting the impact of the issuance of the convertible notes in October 1997.

Commenting on the companys results, Sal H. Alfiero, chairman and chief executive officer of Mark IV, said, "We strengthened the companys balance sheet in fiscal 1998 by completing two subordinated debt offerings totaling $525 million, which allowed us to fix long-term debt at attractive rates, and eliminate our highest cost debt issue. During the second and third quarters of the year, we sold $250 million of 7-1/2% Senior Subordinated Notes and $275 million of 4-3/4% Convertible Subordinated Notes. The proceeds from these transactions were used to eliminate our domestic bank debt, and to repurchase $185 million of our 8-3/4% Senior

Subordinated Notes. Additionally, the $73 million of 8-3/4% Notes still outstanding at year-end have been called for redemption on April 2, 1998. As a result, an extraordinary charge for early debt extinguishment of $10.6 million after taxes (16 cents per share) was taken in the third quarter of fiscal 1998, and an additional charge of $2.6 million (four cents per share) will be incurred in the first quarter of fiscal 1999.

"Also, through the end of fiscal 1998, the company repurchased approximately 3.5 million shares of Mark IV common stock (at an average price of $23.14 per share) for a total cost of about $80 million, representing approximately one half of the shares authorized for repurchase by Mark IVs board of directors at the beginning of fiscal 1998.

"Operationally, we expanded product offerings, increased capacity and/or added geographic diversity in both our Industrial and Automotive business segments, through the completion of several strategic acquisitions and major capital expenditures. In the Industrial segment, we acquired three operations in Australia Australian Hose, Imperial Eastman Australia, and Rubicon Industrial adding approximately $21 million to our annual revenue base. Together, these companys add a variety of industrial hose, assemblies, fittings, couplings and adapters to our Industrial product lines, increase the groups penetration in this region, and raise the companys overall revenue base in Australia to approximately $50 million per year.

"Performance in the companys Industrial segment was led by a strong infrastructure component in the fourth quarter and full year of fiscal 1998, with Industrials sales increasing eight percent in the year and five percent in the quarter on a pro forma basis, excluding the results of businesses disposed of during the year. Improvement in this segment primarily came from the domestic side of the business, while the Industrial groups foreign component remained relatively flat, year-over-year.

"In the Automotive sector, we acquired LPI, Nuova Eletta and M Filter during the year, adding approximately $84 million in annual revenue to our European base.

LPI is a recognized world leader in the manufacture of plastic air admission systems, with three manufacturing facilities in France. The addition of this unit significantly

improves Mark IVs competitive position in the fuel and fluid handling product areas, and provides the technology for entry into the North American market. Nuova Eletta, located in Italy, manufactures plastic automotive components, while M Filter, in Finland, provides the company with its first automotive filter manufacturing capacity in Europe.

"The seven percent increase in overall Mark IV revenue in fiscal 1998 was primarily due to strength in the companys automotive OEM markets. Mark IV Automotives sales increased seven percent in the year and eight percent in the quarter, excluding

revenue of $36 million and $21 million, respectively, from businesses acquired during fiscal 1998. In the automotive aftermarket, sales increased marginally for the year and quarter, due to a slight improvement in the domestic market."

In discussing the companys restructuring program, Mr. Alfiero said, "Progress in the restructuring was a little slower than originally anticipated during the year. While the closing of operations moved along according to plan, unusual weather conditions in various parts of the country negatively impacted construction work scheduled in Nebraska and North Carolina, slowing the relocation and start-up of product lines and distribution activities. We expect to get back on track with the program, and to see net benefit flow from our restructuring activities beginning sometime during fiscal 1999 about six months behind our original estimates."

Mr. Alfiero also said, "The increasingly strong U.S. dollar had a negative impact on fiscal 1998 earnings, costing the company seven cents per share in the year and two cents in the fourth quarter. In addition, sales were negatively affected by currency exchange movements of $60 million and $15 million, respectively, in the year and fourth quarter."

Reflecting on the fourth quarter, Mr. Alfiero added, "Despite the fact that the companys overall performance for the year was good, several factors had a negative impact on our fourth quarter results, including: the continued strength of the U.S. dollar; the economic climate in South America; domestic car builds in January and February; and the effects of El Nino on the sale of our lawn and garden products in certain sectors of the country. We expect these factors to continue to impact the company during at least the first half of fiscal 1999."

This press release contains forward-looking statements that involve risk and uncertainties as detailed from time to time in the companys SEC reports, including its report on Form 10-K for its fiscal year ended February 28, 1997. These risks and uncertainties could affect the companys actual results and cause them to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the company.

Mark IV Industries, Inc. is a $2.2 billion global manufacturing company headquartered in the Buffalo suburb of Amherst, New York, employing 17,000 people worldwide. The company's core technologies include power transmission, fluid transfer and filtration systems and components for global industrial and automotive markets.

                     MARK IV INDUSTRIES, INC.
             (Amounts in thousands, except per share data)
                      Three Months Ended        Fiscal Year Ended
                      Last Day of February     Last Day of February
                             1998      1997        1998          1997
                             ----      ----        ----          ----
Sales from continuing
 operations             $ 554,900  $519,200   $2,210,200  $ 2,076,000
Operating income (a)    $  53,400  $ 52,600   $  238,300  $   223,200
Interest expense        $  14,900  $ 14,200   $   61,600  $    59,000
Operating income, net of
  interest expense      $  38,500  $ 38,400   $  176,700   $  164,200
Income before
special items (b)       $  24,300  $ 23,500   $  109,200   $  100,200
Special items (c)               -  $  6,000   $  (10,600)  $  (44,100)
Net income              $  24,300  $ 29,500   $   98,600   $   56,100
Earnings per share:
    Income before
    special items       $     .38  $    .35   $     1.70   $     1.51
    Special items               -       .09         (.16)        (.67)
        Net income      $     .38  $    .44   $     1.54   $      .84
                         =========== ======== ============  ===========
    Income before
    special items        $    .36  $    .35   $     1.66   $     1.50
    Special items               -       .09         (.16)        (.66)
                         ---------------------------------- ------------
        Net income       $    .36  $    .44   $     1.50   $      .84
                         ==========  ======== ============  ===========
Weighted average number
of shares outstanding:
    Basic                  63,200    66,300       64,100       66,300
    Diluted                72,100    66,700       67,400       66,700

(a) Represents income from continuing operations before interest expense and taxes, and a restructuring charge in fiscal 1997.

(b) Presented net of related tax effects.

(c) Special items are presented net of related tax effects, and include an extraordinary loss from early debt extinguishment in fiscal 1998. Special items in fiscal 1997 include a restructuring charge of $67.5 million, net of income from discontinued operations.

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