Brake Headquarters USA Inc. Reports Operating Results for the Third Quarter and Nine Months Ended September 30, 1998.

LONG ISLAND CITY, New York--(BUSINESS WIRE)--November 25, 1998--

Sales Increase 129% And 134%

Respectively Year To Year

Brake Headquarters USA Inc. (Nasdaq:BHQU) announced operating results for the third quarter and nine months ended September 30, 1998.

Sales from operations during the third quarter ended September 30, 1998, increased 128.8% to $17,894,677, versus $7,820,373 that the Company reported for the comparable period ended September 30, 1997. For the nine months ended September 30, 1998, the Company reported that sales totaled $54,799,005, an increase of 134.4% over sales of $23,374,179 for the comparable nine month period ended September 30, 1997. The increase in revenue during both periods is the result, in significant part, to the acquisition of Western Automotive Warehouse Distributors ("WAWD"), a wholesale distributor of foreign automotive parts, in November 1997, as well as the addition of new customers, which served to generate increased internal growth.

For the third quarter ended September 30, 1998, the Company realized a net loss of ($144,968), equal to ($0.03) per common share on a basic and fully diluted basis, versus net income of $14,694, or $0.00 per share for the comparable quarter ended June 30, 1997. For the nine month period ended September 30, 1998, the Company reported a net loss of ($966,992) or ($0.21) per common share, on a basic and fully diluted basis, as compared with net income of $104,305 or $0.02 per share for the similar nine month period ended September 30, 1997. During both 1998 periods the Company incurred significant increases in selling, general and administrative expenses, primarily related to the acquisition and on-going operation of WAWD.

Mr. Joseph Ende, Chairman and Chief executive Officer of Brake Headquarters USA Inc., commented, "We are most pleased with the outstanding sales results that we achieved during the third quarter, and over the last nine months. Our acquisition of Western Automotive Warehouse Distributors has proven to be an overwhelming success for our Company, and significantly improved the marketing channels for our products. Our Company also continues to grow internally, through the addition of major, new customers. Combined with our focus towards consolidating costs and improving the internal efficiency of our operations, I am optimistic that our net results shall improve during the forthcoming months."

Separately, the Company announced that it has applied for a hearing with NASDAQ in order that it may maintain trading of its common stock as a result of the minimum price requirement needed for continued listing on the exchange.

Brake Headquarters USA Inc. is a rapidly growing wholesaler and distributor of automotive brake system products and other component parts for domestic and foreign cars and light trucks. Implementing a strategic plan to achieve accelerated growth both through internal expansion and acquisitions, revenues increased 134% during the nine months ended September 30, 1998, to $54.79 million, versus $23.37 million reported for the comparable nine month period ended September 30, 1997. The Company has imported, assembled, and distributed automotive parts to the automotive after market industry since 1976.

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties, and other factors not under the Company's control which may cause actual results, performance, and achievements of the Company to be materially different from the results, performance or expectations of the Company. These factors may include, but are not limited to those detailed in the Company's periodic filings with the Securities and Exchange Commission.