Aerovox Reports Second Quarter Results.

NEW BEDFORD, Mass.--(BUSINESS WIRE)--July 21, 1999--

Aerovox Incorporated (Nasdaq/ NM:ARVX) today reported results for the second quarter and six months ended July 3, 1999.

Net sales for the quarter ended July 3, 1999 totaled $30.6 million compared with $32.2 million for the three months ended June 27, 1998. Net income in the second quarter of 1999 totaled $801,000, or $0.13 per share, versus net income of $748,000, or $0.14 per share, in the second quarter last year, based on weighted average common shares outstanding of 6.1 million and 5.4 million, respectively.

Revenues for the six months ended July 3, 1999 were $59.0 million, compared to $61.8 million for the first half of 1998. Net income for the period was $1.1 million or $0.20 per share, compared to $1.1 million or $0.20 per share for the first half of 1998. Lower sales volume was attributed to market softness and heightened price pressure in Europe.

Gross profits of $6.1 million in the second quarter of 1999 equaled those in the comparable period last year, reflecting improved gross margins as a percentage of sales of 19.9% in the second quarter 1999 from 19.1% in the same period last year. Selling, general and administrative costs for the quarter totaled $4.5 million, remaining stable with the same quarter last year, though 1999 results include costs associated with the Company's new business in Mexico City.

"Despite absorbing losses at BHC Aerovox, our subsidiary in England, our aggressive cost reduction efforts have taken hold and are allowing us to generate income consistent with last year and to continue to show improving gross margins. In addition, CGE Aerovox, our newly acquired business in Mexico City, is already contributing positively to income from operations," said Aerovox President and CEO, Robert D. Elliott.

Aerovox manufactures film, paper and aluminum electrolytic capacitors. The Company sells its products worldwide, principally to original equipment manufacturers as components in electrical and electronic equipment. In addition to its plant in New Bedford, Massachusetts, Aerovox has operations in Huntsville, Alabama; Juarez and Mexico City, Mexico; and Weymouth, England.

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                         AEROVOX INCORPORATED
              Condensed Consolidated Statements of Income
             (Amounts in thousands, except per share data)
                              (Unaudited)

                            Three Months Ended       Six Months Ended
                             July 3,   June 27,     July 3,   June 27,
                               1999       1998        1999      1998

Net sales                   $ 30,637   $ 32,228    $ 59,010  $ 61,756
Cost of sales                 24,526     26,060      47,927    50,361
Gross profit                   6,111      6,168      11,083    11,395
Selling, general and
  administrative expenses          125        (29)   $     (7)       63

Income before income taxes     1,293      1,241       1,894     1,703
Provision for income taxes       492        493         764       630

Net income                  $    801   $    748    $  1,130  $  1,073

Basic and diluted earnings
 per share                  $   0.13   $   0.14    $   0.20  $   0.20


                        AEROVOX INCORPORATED
               Condensed Consolidated Balance Sheets
                       (Amounts in thousands)
                            (Unaudited)

                                                 July 3,     Jan. 2,
                                                   1999        1999
                                ASSETS
Current assets:
  Cash                                          $  1,371    $  1,149
  Accounts receivable, net                        18,097      14,220
  Inventories                                     21,679      19,906
  Prepaid expenses and other current assets        1,607         566
   Total current assets                           42,754      35,841

Property, plant and equipment, net                32,036      30,500
Goodwill                                           2,712        --
Deferred income taxes                              4,146       4,146
Other assets                                          99          84
   Total assets                                 $ 81,747    $ 70,571

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                              $  9,913    $  9,490
  Accrued compensation and related expenses        2,852       3,048
  Other accrued expenses                           2,727       2,374
  Current maturities of long-term debt             6,220       7,376
  Income taxes                                       497          84
   Total current liabilities                      22,209      22,372

Deferred income taxes                              4,983       5,022
Industrial revenue bond                            1,012       1,292
Long-term debt less current maturities            17,993       9,916
Reserve for environmental costs and
 plant remediation                                 6,033       6,033
Deferred compensation                                452         647

Redeemable common stock and capital                2,918        --

Stockholders' equity:
  Common stock                                     5,398       5,393
  Additional paid-in capital                       1,068       1,059
  Retained earnings                               20,198      19,068
  Foreign currency translation adjustment           (517)       (231)
   Total stockholders' equity                     26,147      25,289

   Total liabilities and stockholders' equity   $ 81,747    $ 70,571