Coventry Industries Reports Second Quarter Results.

BOCA RATON, Fla.--(BUSINESS WIRE)--Feb. 22, 1999--Coventry Industries Corp. (NASDAQ SmallCap:COVN) today reported unaudited results for its second quarter ended December 31, 1998.

For the second quarter ended December 31, 1998, the Company reported revenues of $2,257,994 representing a decrease of 21% from revenues of $2,842,815 reported for the second quarter ended December 31, 1997. The Company recorded a net loss to common shareholders of $1,460,579 or $0.33 per share during the second quarter of fiscal 1999, compared to a net loss of $1,758,564 or $0.63 per share during the second quarter of fiscal 1998. It should be noted that the per share amounts for the second quarter fiscal 1999 reflect an increase in the number of weighted average shares outstanding to 4,431,492 from 2,790,371 during the same period in fiscal 1998.

The Company noted that the decrease in revenue for the second quarter of fiscal 1999 is primarily attributable to the sale of its Apollo, American Industrial Management, and LPS Acquisition Corp subsidiaries. In addition, the Company's Federal Supply subsidiary, experienced a decrease in revenues which can be attributed to weaker than expected market conditions. The decrease was partially offset by the acquisition of BSD Healthcare, Inc. effective December 1st, 1998. The Company noted that the net loss incurred during the second quarter of fiscal 1998 is attributable to non-cash charges of approximately $260,000 for depreciation, amortization, and professional fees, approximately $437,000 of costs associated with issuance of stock with respect to employment agreements, approximately $298,000 of costs associated with settlement of certain outstanding claims through the issuance of stock, and approximately $345,000 of cost associated with the issuance of stock to certain consultants. The remaining portion of the net loss is attributable to an operating loss at Federal Supply.

The Company completed its previously announced acquisition of BSD Healthcare Services on December 1st, 1998. The second closing with Peoplefirst LLC, which requires shareholder and regulatory approval, is expected to take place in approximately 60 to 90 days. Once both transactions are complete, the newly formed P.E.O. Company projects annualized revenues of approximately $105 million and earnings of $1.5 million based on providing human resource outsourcing and leasing of approximately 6,300 employees to healthcare customers in 24 states.

Coventry Industries Corp., whose subsidiaries include companies involved in manufacturing, marketing and distribution, and employee-leasing services, is a growth oriented Nasdaq Small-Cap company.

Certain of the statements contained in the press release may be deemed forward-looking statements in accordance with the Private Litigation Reform Act of 1996. Such statements and other matters addressed in the press release involve a number of risks and uncertainties. Among the factors that could cause actual plans to differ materially from these statements and other matters are the risks and factors detailed, from time to time, in the company's reports with the U.S. Securities and Exchange Commission. -0-

          Coventry Industries Reports Second Quarter Results

                        Financial Summarization

                                     Three Months Ended December 31,
                                          1998             1997

Revenues                             $  2,257,994     $  2,842,815

Income(Loss) before income tax
 provision                           $( 1,425,704)    $( 1,758,564)

Income tax(benefit) provision        $          0     $          0

Net Income(Loss) before dividends    $( 1,425,704)    $( 1,758,564)

Preferred Dividends paid             $  (  34,875)              --

Net income(Loss)                     $( 1,460,579)    $( 1,758,564)


Earnings Per Share

Net income(Loss)                     $      (0.33)    $      (0.63)
Average weighted shares outstanding     4,431,492        2,790,371