New state of the art website to be up and running soon CITY OF INDUSTRY, Calif., March 4 /PRNewswire-FirstCall/ -- Veltex Corporation (Pink Sheets: VLXC) Veltex Corporation is pleased to announce adoption of a new strategic direction for the Company which has resulted in a restructuring of the Company and the adoption of a new business model. These changes resulted from completion of a comprehensive review of its operations, assets, liabilities, markets, and opportunities which review occurred over the past year. Four factors emerged as critical determinants of the Company's future growth and profitability: -- the costs, investment, and problems of operating the manufacturing facilities were increasing while profitability was decreasing; -- the efficiency of the North American operations was increasing; -- the amount of cash to support investment and working capital needs was substantial; -- problems of accounting and disclosure from international facilities were burdensome After carefully weighing these various factors, the Board of Directors concluded that the best course of action was to eliminate manufacturing and divest the manufacturing operations, and to emphasize importation and distribution in the US and Canadian markets. Additionally, the Company will reduce its product line and concentrate on more popular items such as denim, fleece, and tee apparel. As part of the management restructuring, the Company seeks to enlarge its Board to include members with US public company experience. It also intends to enlarge its advisory board to add expertise in fashion, fabrics, distribution, and similar apparel specialties. The Company expects to hire additional sales representatives. The time, cost, and effort for completing separate audits for the US, Canada, and Bangladesh and then preparing consolidated financial reports have proved much greater than anticipated. We continue to work diligently with our CPA firm to complete the task. Our Independent Auditor, Mike More, CPA is a member of the Public Companies Accounting Oversight Board (PCAOB). Sale of the manufacturing operations was completed as of December 31, 2007 and will be shown as a discontinued operation in the 2007 financials. This sale will provide working capital for support and expansion of the remaining operations. Principal terms of sale of the remaining assets are assumption of liabilities, Credit of $15 million to be used by Veltex as partial offsets against future purchases, preferred customer prices, and favorable payment terms. Specific factors influencing sale of the manufacturing operations include substantial machinery repair and replacement costs, expiring tax incentives, exchange fluctuations, and costly travel and communications requirements. A gain/loss may be realized on the sale, but the amount has not yet been determined by the audit firm. Mr. Matin, Company CEO expressed great satisfaction with the restructuring and redirection of the Company. "This has been a long and arduous process, and at times frustrating and painful," he said. "But it was essential," he added, "to make these hard assessments and adjustments to ensure that Veltex could compete profitably in a global economy which is becoming increasingly changing and demanding." He noted that the streamlined business model with its emphasis on distribution would enable the Company to better respond to fashion changes, reduce delivery times, provide improved customer service, and attract new customers. It will also allow the Company to produce timely audits and become fully reporting. Mr. Matin also reported that the new Veltex was expected to achieve the same level of profitability as the previous integrated Veltex in future. "We are predicting revenues of $10 to $15 million in 2008," he said, "and expect to achieve customary industry level of profitability." He noted that the current inventory is adequate for the expected summer sales. In order to facilitate increased online sales, the Company is initiating a new state-of-the-art website anticipated to come on line in mid March. http://www.veltex.com/ ABOUT VELTEX CORPORATION Veltex Corporation, headquartered in City of Industry, California, with distribution centers in the USA and Canada, is a rapidly expanding apparel Company. It designs and manufactures Brand named apparel for the promotional products industry as well as the retail trade. It specializes in denim, microfilament, high quality tee shirts, and a recently added organic cotton line of clothing. Veltex Corporation is committed to providing superior apparel products to the world at the lowest possible price and with delivery times superior to any in the industry. It is equally committed to always exceeding customer expectations and to increasing shareholder value. FORWARD-LOOKING STATEMENTS Safe Harbor: Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, volatility of market prices, product demand, market competition, risks inherent in the Company's international operations, and the Company's ability to replace and expand. Other corporate websites include: URL: http://www.veltexcorporation.com/ or http://www.veltexapparel.com/ or http://www.veltexcanada.com/ or http://www.veltex.com/ DATASOURCE: Veltex Corporation CONTACT: Veltex Corporation, +1-909-595-1977, Web site: http://www.veltexcorporation.com/

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