Ault Incorporated Reduces Costs to Drive Profitability

Ault Incorporated reported that it has reduced the size of its global work force by eliminating 101 full-time manufacturing positions and 15 administrative support positions, or 21 percent of its employee base, due to a slowdown in telecom revenues. This reduction, effective today, is part of the Company's continuing efforts to significantly reduce expenses and increase the profitability of its global operations.

The Company has also instituted a number of other actions intended to reduce expenses and bring spending in line with the slowdown in revenue. Travel has been reduced at facilities worldwide and all discretionary spending has been halted for the balance of the 2001 fiscal year, which ends on May 27. In addition, Ault's remaining global work force is implementing a range of cost savings measures, including the closing of the Minneapolis factory for one day per month and requiring one day off per month for all indirect employees through May 31.

Frederick M. Green, president and chief executive officer commented, " During the third quarter of our fiscal year, we began to experience the much-publicized slowdown in the telecom industry. While we have not lost any customers, our sales have fallen during the quarter due to the high inventory levels of our telecom customers. We anticipate that this slowdown in revenues will turn around in fiscal 2002 when our customers begin to deplete their inventories."

The Company plans to accelerate a number of programs during this slowdown period. The planned Enterprise Resource Planning (ERP) upgrade is a priority that will lead to inventory reductions and reduced cycle times, and the implementation of a Customer Relationship Management (CRM) system will provide improved service and communications to customers worldwide.

"We are also seeking efficiencies in our Asian operations," added Green. "Xiaodong Wang, our new vice president of Asia-Pacific, is implementing both short- and long-term plans that will not only result in cost savings, but also increase our opportunities for new business."

Outlook
The Company continues to anticipate maintaining sales growth of 20-30 percent for fiscal year 2001, with revenues in the range of $80-86 million and net income of $1.8-2.0 million, or $0.38-$0.42 per share. This is compared to revenues of $66.1 million and net income of $1.9 million, or $0.40 per share a year ago.
"We expect a weaker fourth quarter, but will have a growth year overall due to the three strong quarters already completed," explained Green. "We will have significant year-over-year increases in sales and earnings, and use this period of slowdown to build our strengths for the next growth period."

Ault is the largest independent manufacturer of external power conversion products in North America. The Company is a leading supplier to original equipment manufacturers of broadband modems, wireless and wireline telecommunications infrastructure, computer peripherals and medical equipment.

Statements regarding Ault's anticipated future performance are forward-looking and therefore involve risks and uncertainties that could cause results or developments to differ significantly from those indicated in the forward-looking statements. These include, but are not limited to: market conditions in the global electronics industry, buying patterns of major customers, competitive products and technologies, the ability to control expense growth, and other factors set forth in the Company's filings with the Securities and Exchange Commission.

Ault Incorporated, 7105 Northland Terrace, Minneapolis, MN 55428. Tel: 763-592-1900; Fax: 763-592-1911.