Interceramic Second Quarter 2004 Results CHIHUAHUA, Mexico, July 14 /PRNewswire/ -- The second quarter of 2004 saw Interceramic posting significant improvements over second quarter results in 2003, and marking gains over a lackluster first quarter of the year as well. Record quarterly sales of US $84.8 million topped sales of US $72.2 million in the same quarter of 2003 by 17.5 percent. Larger sales volume and a better mix of products sold, pushed our gross income for the quarter up by 23.3 percent over last year. For the first six months of the year, consolidated sales are up by 10.3 percent to US $161.3 million compared to US $146.3 million in the first semester of 2003. We also moved much more product during the second quarter of 2004 than we had in the same period of 2003, increasing by 15.0 percent. In a particularly welcome development, growth in both sales and product volume occurred in each of our major markets of Mexico and the United States. In Mexico, our sales for the second quarter jumped by 22.3 percent from the second quarter of 2003 to US $46.3 million from the US $37.9 million posted last year. The amount of product sold by the Company in Mexico during the second quarter of 2004 increased by 18.3 percent over the second quarter of 2003. For the first six months of 2004, sales in Mexico are up 10.6 percent over the first half of 2003, to US $88.3 million from US $79.9 million in 2003, while over the same comparative periods, product volume in Mexico is up by 11.4 from last year. In the International markets, we hit a record level of sales, and at US $38.4 million for the second quarter of 2004 we bettered sales for the same period of 2003 by 12.2 percent. The amount of product sold in the International markets increased as well, up by 9.9 percent over last year. For the six months, International sales of US $73.0 million are 9.9 percent higher than in the first six months of 2003, and the amount of product sold over the first six months of 2004 in the International markets grew by 7.1 percent over the first semester of 2003. While our operating expenses have been increasing over past periods in anticipation of substantially improved sales growth, in the second quarter of 2004 Interceramic attained a level of sales that kept well ahead of the ramped up expenditures. As a result, our operating income for the second quarter of 2004 increased by 41.3 percent over the second quarter of 2003, hitting US $6.6 million compared to US $4.7 million in the second quarter last year. We also recorded our highest EBITDA since the second quarter of 2002, and at US $11.1 million it is a 28.5 percent improvement over EBITDA of US $8.6 million in the second quarter last year. Looking at the first six-months of 2004, operating income of US $11.0 million is less than two percent behind operating income of US $11.1 million recorded in the first six months of 2003. At US $19.7 million, EBITDA for the first half of 2004 is 4.9 percent higher than our EBITDA of US $18.8 million in the first six months last year. In June, we opened our newest "Interceramic Tile and Stone Gallery" store in San Diego, California, the latest effort in our strategy of covering the immense Southern California market with high-margin generating company-owned stores. In Mexico, the second quarter of the year was the first full quarter of consolidated results from our newly-acquired franchise distributors in the Chihuahua and Monterrey markets, which bring considerable sales and margin to our Mexican operations as well. Construction of our new tile plant in Chihuahua is proceeding, and we intend on devoting our efforts over the remainder of the year to capitalizing on the improvements and gains we have made over the past few months to our benefit in forthcoming quarters. We thank our shareholders and customers for their continued support, and we look forward to our remaining challenges and a strong finish for the year. Oscar E. Almeida Chairman of the Board Victor D. Almeida Chief Executive Officer This document contains forward-looking statements within the meaning of the United States Securities Exchange Act of 1934 which reflect the Company's views about future events and financial performance. Actual events and results could differ materially from those stated herein and, accordingly, undue reliance should not be placed upon them. The forward-looking statements speak only of their dates and the Company undertakes no obligation to update or revise any of them. DATASOURCE: Interceramic CONTACT: Investor Relations - Luis Fernando Cano B., +52-614-429-1264, for Interceramic Web site: http://www.interceramic.com/

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