EXHIBIT 99.1
PRESS RELEASE
DISTRIBUTION: To Business Editor
DATELINE: October 20, 1998; Universal Mfg. Co., Algona, Iowa
BODY:
Effective October 1, 1998, Universal Mfg. Co. signed a new sales agreement
with the Ford Customer Service Division of the Ford Motor Co. This sales
agreement establishes Universal as a Ford Authorized Distributor and requires
Universal to distribute remanufactured products, Motorcraft branded products and
certain other Ford branded products to Ford and Lincoln-Mercury dealerships in
territories near Universal's distribution centers according to prescribed
distribution standards.
Ford also published a price list for certain distribution items distributed
by Universal in early October which provided for reduced gross margins (for
example, from 21% to 15% on steering products). Shortly thereafter, Ford
announced advance information on the addition of two more product lines to be
distributed by Universal (starters and alternators), indicating similar gross
margins. At the present time, distribution activity represents approximately
35% of Universal's total sales. Because of Ford's deauthorization actions,
present and anticipated, Universal's distribution activities are expected to
constitute a higher percentage of overall sales.
While it is currently anticipated that total sales volume will increase as
a result of Ford's actions, increased competition and the reduced margins
established by Ford could adversely affect future earnings. Universal is in the
process of formulating and implementing a strategic plan for alternative
manufacturing and remanufacturing activities in order to utilize its existing
plant and attain other opportunities for profitable operation.
This press 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. Investors are cautioned
that all forward-looking statements involve risks and uncertainties, including,
without limitation, the effect of the general economic and market conditions,
customer requirements for Universal products, future actions by Ford, the
continuing strength of the automotive industry, increased competition and other
factors. Such factors could cause actual results to differ materially from
those in the forward-looking statements.
For additional information on this matter please contact Xxxxxx X. Xxxxxx,
President of Universal, at (000) 000-0000.
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