Boyds Wheels Posts Record 1996 Sales; Manufacturing Inefficiencies and Other Factors Impact Fourth Quarter Results.

STANTON, Calif.--(BUSINESS WIRE)--March 17, 1997--Boyds Wheels, Inc. (NASDAQ:BYDS) today reported record sales for the fiscal year and fourth quarter ended Dec. 31, 1996, reflecting growth in the company's core and additional product lines, as well as its expansion into newer customer segments.

Earnings for the year and the fourth quarter were affected by temporary manufacturing inefficiencies and other factors.

Sales for the 1996 year rose 53% to $27.2 million, from $17.8 million in 1995. Net income for the year increased 41% to $1,336,000, or $.41 per weighted average share on 68% more shares, compared with $948,000, or $.48 per weighted average share, in 1995.

Sales for the fourth quarter increased 37% to $6,653,000 from $4,862,000 in the 1995 fourth quarter. The company experienced a net loss for the 1996 fourth quarter of $(258,000), or $(.07) per share, compared with net income of $268,000, or $.10 per share, in 1995.

These results for the 1996 fiscal year and fourth quarter do not include 1996 Hot Rods by Boyd results, which posted sales for the year of approximately $700,000. Boyds Wheels exercised its option to purchase Hot Rods by Boyd in an all-stock transaction on Dec. 30, 1996. Results in subsequent reporting periods will be consolidated.

As previously announced in a press release dated Feb. 18, 1997 the company expected lower net income results due principally to factors that occurred during the latter portion of 1996. It has been determined that the manufacturing inefficiencies, higher than expected scrap rates and less profitable foreign/domestic sales mix affected only the fourth quarter.

The increase in weighted average shares for the current periods is due to a secondary offering of 1.2 million shares of Common Stock in June 1996, which raised net proceeds to the company of approximately $10.2 million to fund continued growth, including new equipment as part of a recent 50% expansion of the company's manufacturing facilities.

"Although we are extremely pleased with the strong sales growth, clearly we are disappointed with the lower earnings levels and particularly the impact on the fourth quarter," said Boyd Coddington, chairman and chief executive officer. "However, we are already seeing results from our plan to correct the manufacturing inefficiencies, most notably a drop in scrap rates. We are also very excited about the progress of our new computerized inventory tracking system, which we expect will be operational by the end of the first quarter."

"Going forward, we are very excited about the growth in our newer geographic markets particularly on the East Coast," he continued. "We are also exploring opportunities in Australia and New Zealand and more aggressively targeting the motorcycle market in Europe. In Japan, initial responses to our new one-piece cast wheel have been positive.

By making a less expensive, high-quality wheel, we can continue to feed the constant demand for Boyds' products in that market."

The company remains confident in its new product lines, notably the one-piece cast wheel line targeted for sport utility vehicles and trucks, its expanded motorcycle line including the new one-piece cast chromed wheels, and its new line of car care products, Boyds Ultra Violet, now in all of AutoZone's 1,500 stores.

The language contained in this press release relating to manufacturing inefficiency improvements, new geographic markets and the sale of new product lines, constitute forward looking statements and actual results could be different.

Among the factors that could cause actual results to differ include: customer order rates; increased competition; changing consumer trends; expansion delays; and political and economic instability of international markets, as well as other risk factors included in the company's stock offering prospectus dated June 11, 1996.

Founded in 1988, Boyds Wheels, Inc. designs, manufactures and markets high-quality aluminum wheels and related products for the specialty automotive and motorcycle aftermarkets. The Company sells its products through a nationwide network of retailers, distributors and mail order outlets, as well as through foreign distribution channels.

Boyds Wheels complete line of wheel and accessory products can be ordered directly by calling 714/952-4038 for a complete catalogue. -0-

                         BOYDS WHEELS, INC.
                      Statements of Income(a)
          (In thousands, except share and per share data)

                     Three Months Ended        Year Ended
                           Dec. 31,              Dec. 31,
                        1996       1995       1996       1995

Net sales             $6,653      $4,862    $27,185    $17,796

Cost of goods sold     6,445       3,509     21,633     13,263

Gross margin             208       1,353      5,552      4,533

Selling, general &
  administrative
  expenses               938       1,047      3,629      2,741

Income (loss) from
 operations             (730)        306      1,923      1,792

Interest and other
 expenses, net              4         26         53        382

Income before
 provision (benefit)
 for income taxes       (734)        280      1,870      1,410

Provision (benefit)
 for income
 taxes                  (476)         12        534        462

Net income (loss)     $ (258)     $  268     $1,336      $ 948

Net income (loss)
 per share            $ (.07)     $  .10      $ .41      $ .48

Weighted average
 shares
 outstanding       3,719,000   2,601,000  3,271,000  1,960,000

(a) Does not include 1996 Hot Rods by Boyd results

CONTACT: Boyds Wheels, Inc.

Boyd Coddington (Chief Executive Officer)

Rex Ours (Chief Financial Officer)

Lisa Prukop (Investor Relations), 714/952-4038