Universal Power Group Inc. (fka UPGI)

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May 5, 2008 - 7:04 AM EDT

Universal Power Group Reports First Quarter 2008 Financial Results
Revenues Grew 25.4%
Gross Margins Expanded to 15.2% from 14.6%
Operating Margins Expanded to 4.0% from 3.4%
Operating Income Rose 46.0%
Net Income and EPS Increased by 51.3%
Universal Power Group, Inc. (AMEX: UPG), (“UPG”) a leading provider of third-party logistics and supply chain management services and a global distributor of batteries, related portable power and security products, today announced its financial results for the first quarter ended March 31, 2008.

Revenues for the period ended March 31, 2008 rose 25.4% to $29.5 million, compared to $23.5 million in the first quarter of 2007. First quarter revenues from sources other than Brink’s Home Security (“Brink’s”) rose 45.5% to $16.0 million, from $11.0 million in the first quarter of 2007. The increase reflects more focused marketing to both existing and new customer accounts, as well as price increases implemented by UPG to offset higher costs of goods sold. Growth in the Company’s higher margin battery business was driven approximately 46% by volume and 54% by price increases in the first quarter. Revenues from Brink’s increased by 7.7% to $13.5 million in the first quarter of 2008, compared to $12.5 million in the prior year period. Importantly, as a result of the rapid growth in the non-Brink’s business, the concentration of revenues from Brink’s fell to 46% of total revenues in the first quarter 2008, compared to 53% in the first quarter of 2007.

Gross margin for the first quarter of 2008 expanded to 15.2%, from 14.6% in the first quarter of 2007, as the improvement in product mix, including the reduced concentration of Brink’s and price increases, offset higher raw material costs. Operating expenses rose 25.2% to $3.3 million in the first quarter of 2008, compared to $2.6 million in the prior year period. UPG had an operating profit of $1.2 million, or 4.0% of sales, for the first quarter of 2008, up 46.0% from an operating profit of $0.8 million, or 3.4% in the first quarter of 2007. Net income in the first quarter of 2008 rose 51.3% to $0.6 million, or $0.11 per share, compared to net income of $0.4 million, or $0.07 per share, in the prior year period.

Commenting on the first quarter, Randy Hardin, President and Chief Executive Officer of UPG, stated, “Our strong first quarter results largely reflect the continued strength of our non-Brink’s business, with those revenues up 46%. This has helped to not only reduce the concentration of our Brink’s revenues within the total company, but also to maintain and even improve our gross margin during a time in which we continue to face higher raw material costs. It is notable that the concentration of our Brink’s business fell in the first quarter, even with a 7.7% increase in Brink’s. We remain optimistic about the growth prospects for both of our areas of focus – Brink’s and batteries – and we expect to see strong organic growth in 2008. Additionally, we are continuing to explore growth opportunities with new third party logistics customers and acquisitions.”

UPG Reiterates 2008 Guidance

UPG continues to expect organic growth in revenues of 12% - 15% and operating income growth of 15% - 18% for the full-year 2008.

Conference Call Information

Universal Power Group will host an investor conference call today, Monday, May 5, 2008, at 11:30 am EST (10:30 am CST) to discuss financial results for the first quarter of 2008.

Interested parties may access the conference call by dialing 1.866.825.1692; passcode 21310331. The conference call will also be broadcast live on www.upgi.com and through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson’s individual investor portal. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.

A replay of the teleconference will be made available through May 12, 2008 by calling 1.888.268.8010; passcode 23679759 and an archived webcast will be available at www.upgi.com.