Universal Power Group Reports First Quarter 2008 Financial Results

CARROLLTON, Texas, May 05, 2008 (BUSINESS WIRE) ----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.

About Universal Power Group, Inc.

Universal Power Group, Inc. is a leading provider of third-party logistics and supply chain management services, and a distributor of batteries, security products and related portable power products to various industries. UPG's supply chain services include procurement, warehousing, inventory management, distribution, fulfillment, and value-added services such as sourcing, custom battery pack assembly, coordination of battery recycling efforts, custom kitting, and product design and development. UPG's range of product offerings include proprietary brands of industrial and consumer batteries of all chemistries, chargers, cellular and Bluetooth accessories, related portable power products, jump-starters, 12-volt DC accessories, and security products. For more information, please visit the UPG website at www.upgi.com.

Forward-Looking Statements

Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the Company's actual operating results to be materially different from any historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements that explicitly describe these risks and uncertainties, readers are urged to consider statements that contain terms such as "believes," "belief," "expects," "expect," "intends," "intend," "anticipate," "anticipates," "plans," "plan," to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's filings with Securities and Exchange Commission. Historical financial results are not necessarily indicative of future performance.

 UNIVERSAL POWER GROUP, INC. UNAUDITED BALANCE SHEETS ASSETS March 31, December
   2008 31, 2007 ----------- ----------- CURRENT ASSETS Cash and cash equivalents $483,668 $691,288 Accounts receivable: Trade,
   net of allowance for doubtful accounts of $95,740 and $129,371 14,069,810 12,593,430 Other 138,393 149,262 Inventories - finished
   goods, net of allowance for obsolescence of $258,350 and $193,780 31,295,610 32,345,377 Current deferred tax asset 996,278
   983,114 Prepaid expenses and other current assets 1,059,667 880,907 ----------- ----------- Total current assets 48,043,426
   47,643,378 PROPERTY AND EQUIPMENT Logistics and distribution systems 1,477,640 1,417,269 Machinery and equipment 346,670 338,220
   Furniture and fixtures 492,267 492,267 Leasehold improvements 272,096 272,096 Vehicles 137,336 151,598 ----------- -----------
   2,726,009 2,671,450 Less accumulated depreciation and amortization (1,092,866) (985,735) ----------- ----------- Net property
   and equipment 1,633,143 1,685,715 OTHER ASSETS 63,124 81,459 ----------- ----------- TOTAL ASSETS $49,739,693 $49,410,552
   =========== =========== 

 UNIVERSAL POWER GROUP, INC. UNAUDITED BALANCE SHEETS (Continued) LIABILITIES AND SHAREHOLDERS'
   EQUITY March 31, December 2008 31, 2007 ----------- ----------- CURRENT LIABILITIES Line of credit $12,695,419 $12,833,031
   Accounts payable 11,784,803 12,257,350 Accrued liabilities 925,049 537,248 Current portion of payable to Zunicom, Inc 1,096,875
   731,250 Current portion of capital lease obligations 3,452 6,609 Current portion of deferred rent 64,446 64,446 -----------
   ----------- Total current liabilities 26,570,044 26,429,934 NOTES PAYABLE TO ZUNICOM, INC., less current portion 4,753,125
   5,118,750 NON-CURRENT DEFERRED TAX LIABILITY 17,201 25,455 DEFERRED RENT, less current portion 162,942 180,776 -----------
   ----------- Total liabilities 31,503,312 31,754,915 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common stock - $0.01
   par value, 50,000,000 shares authorized, 5,000,000 shares issued and outstanding 50,000 50,000 Additional paid-in capital
   15,405,774 15,381,684 Retained earnings 2,780,607 2,223,953 ----------- ----------- Total shareholders' equity 18,236,381
   17,655,637 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $49,739,693 $49,410,552 =========== ===========
   

 UNIVERSAL POWER GROUP, INC. UNAUDITED STATEMENTS OF INCOME Three Months Ended March 31, -----------------------
   2008 2007 ----------- ----------- Net sales $29,524,256 $23,539,873 Cost of sales 25,050,198 20,099,238 ----------- -----------
   Gross profit 4,474,058 3,440,635 Operating expenses 3,300,161 2,636,510 ----------- ----------- Operating income 1,173,897
   804,125 Other income (expense) Interest expense (including $86,548 and $86,548 to Zunicom, Inc.) (254,315) (367,089) Interest
   income -- 172,914 ----------- ----------- Total other expense (254,315) (194,175) ----------- ----------- Income before provision
   for income taxes 919,582 609,950 Provision for income taxes (362,298) (241,991) ----------- ----------- Net income $556,654
   $367,959 =========== =========== Net income per share Basic $0.11 $0.07 Diluted $0.11 $0.07 Weighted average shares outstanding
   Basic 5,000,000 5,000,000 =========== =========== Diluted 5,000,000 5,000,870 =========== =========== 

 UNIVERSAL
   POWER GROUP, INC. UNAUDITED STATEMENTS OF CASH FLOWS Three Months Ended March 31, ----------------------- 2008 2007 -----------
   ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $556,654 $367,959 Adjustments to reconcile net income to net cash
   used in operating activities: Depreciation and amortization of property and equipment 130,768 44,171 Provision for bad debts
   32165 9,476 Provision for obsolete inventory 80,000 30,000 Deferred income taxes (21,418) (2,070) Stock-based compensation
   24,090 46,289 Change in operating assets and liabilities: Accounts receivable - trade (1,508,545) (939,828) Accounts receivable
   - other 10,869 (314,610) Inventories 969,767 312,750 Prepaid expenses and other current assets (188,135) (186,991) Other assets
   18,335 (43,750) Accounts payable (472,547) (746,024) Accrued liabilities 387,801 310,597 Due to Zunicom, Inc - 186,617 Deferred
   rent (17,834) (12,413) ----------- ----------- Net cash provided by (used in) operating activities 1,970 (937,827) CASH FLOWS
   FROM INVESTING ACTIVITIES Purchase of property and equipment (68,821) (69,319) CASH FLOWS FROM FINANCING ACTIVITIES Net activity
   on line of credit (137,612) 1,066,000 Payments on capital lease obligations (3,157) (5,426) ----------- ----------- Net cash
   (used in) provided by financing activities (140,769) 1,060,574 ----------- ----------- NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS (207,620) 53,428 Cash and cash equivalents at beginning of period 691,288 13,036,447 ----------- -----------
   Cash and cash equivalents at end of period 483,668 $13,089,875 =========== =========== SUPPLEMENTAL DISCLOSURES Interest paid
   $254,315 $367,089 =========== =========== Income taxes paid $22,971 $21,408 =========== =========== 

SOURCE: Universal Power Group, Inc.

Universal Power Group, Inc 469-892-1122 Mimi Tan, SVP tanm@upgi.com Roger Tannery, CFO tanneryr@upgi.com
   or Investor Relations: Cameron Associates 212-554-5464 Amy Glynn, CFA amy@cameronassoc.com 

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