Wajax Annonces Another Quarter of Significantly Improved Earnings

Business Wire, Nov 2, 2004

(Dollars in millions,         Three Months       Nine Months
except per share data)     Ended September 30  Ended September 30
                          -----------------------------------------
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                            2004        2003        2004       2003


Revenue                   $230.0      $207.8      $679.0     $653.1

Net earnings                $5.2        $2.6       $12.3       $6.1

Basic earnings per
 share                     $0.33       $0.17       $0.78      $0.39

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Wajax Limited today announced significantly improved third quarter 2004 earnings of $5.2 million or $0.33 per share compared to $2.6 million or $0.17 per share for the corresponding period in 2003. For the nine months ended September 30, 2004 the Company earned $12.3 million or $0.78 per share compared to $6.1 million or $0.39 per share recorded in the prior year.

Third Quarter Highlights

- Third quarter revenues increased 11% (13% after excluding the negative impact of the declining U.S. dollar) with gains experienced in all three core businesses. Industrial Components led the way with a 15% increase in revenues with particular strength in western Canada. Revenues in Mobile Equipment and Diesel Engines increased by 10% and 5% respectively, largely as a result of strong oil sector related sales in western Canada.

- Quarterly earnings in Industrial Components almost tripled to $3.3 million, while Mobile Equipment recorded a 43% earnings increase compared to 2003. These increases were primarily attributable to the higher revenues in both businesses and improved margins in Industrial Components.

- Interest expense decreased $0.7 million in the quarter mainly as a result of lower debt, net of cash compared to last year.

- On October 7, 2004 the Company acquired the shares of XR Equipment Ltd., a JCB construction equipment dealer in southwestern Ontario. Annual revenue impact from this acquisition is estimated to be more than $4.0 million.

- The Company declared a quarterly dividend of $0.04 per share payable on December 31, 2004, to shareholders of record on December 13, 2004.

Commenting on the third quarter earnings and the outlook for the rest of the year, Neil Manning, President and CEO, stated "Third quarter earnings were again ahead of our expectations. We are particularly pleased with the earnings increase in our Industrial Components business. Its volume and margin enhancement initiatives are gaining momentum and we look forward to further improvements. We remain confident that fourth quarter results will also exceed the previous year."

Wajax is a diversified company that has three core distribution businesses engaged in the sale and after-sales parts and service support of mobile equipment, diesel engines and industrial components, through a network of over 100 branches across Canada and the western United States. Its customer base spans natural resources, construction, transportation, manufacturing, industrial processing and utilities.

Wajax will Webcast its Third Quarter Financial Results Conference Call. You are invited to listen to the live Webcast on Tuesday November 2, 2004 at 3:30 P.M. EST. To access the Webcast, enter www.wajax.com and click on the link for the Webcast on the Investor Relations page. The archived Webcast will be available at the above mentioned website within 24 hours after the conference call.

This news release contains forward-looking information. Actual future results may differ from expected results.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion should be read in conjunction with the Company's Quarterly Consolidated Financial Statements and accompanying Notes and the Company's Management's Discussion and Analysis for the first and second quarters of 2004 and the year ended December 31, 2003. Unless otherwise indicated, all financial information is in millions of dollars, except per share data.

QUARTERLY RESULTS OF OPERATIONS

Consolidated Results

for the three months ended September 30            2004        2003
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Gross revenue                                    $230.0      $207.8
Net earnings                                       $5.2        $2.6
Earnings per share - basic                        $0.33       $0.17
                   - diluted                      $0.33       $0.16
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for the nine months ended September 30             2004        2003
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Gross revenue                                    $679.0      $653.1
Net earnings                                      $12.3        $6.1
Earnings per share - basic                        $0.78       $0.39
                   - diluted                      $0.77       $0.39
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