ANDERSON, IN -- Remy International announced net sales of $316 million for the quarter ending Sept. 30, an increase of $61.7 million, or 24.3 percent, compared with the third quarter of 2004 due to the impact of the Unit Parts Company (UPC) acquisition in March 2005, as well as a 45 percent increase in powertrain sales and a 10 percent increase in OEM sales. But the operating income amounted to $1.5 million in the third quarter of 2005 compared to $22.2 million reported in the same period last year.

"Market softness in our North American automotive and electrical aftermarket business, pricing pressure and unfavorable foreign exchange continue to adversely impact our results," said Tom Snyder, president and CEO of Remy International. "Clearly, our third quarter results did not meet our internal expectations."

According to Snyder, cost reduction actions were offset by a worsening in industry conditions, a higher than expected increase in selling, general and administrative expenses and the effects of Hurricanes Katrina and Rita. Profitability in the OE business was adversely affected by higher raw material and fuel costs and expenditures related to product launch costs.

"The balance of the year will be challenging. We remain focused on supporting our customers' requirements while we continue our efforts to boost productivity, reduce costs and improve our cash flow from operations," said Raj Shah, COO of Remy International. "In each of our products, we are taking substantial steps to lower variable and fixed costs. We expect the benefits of these actions to accelerate through 2006."

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