AFS REPORTS RESULTS FOR Q1 - 2011

TSXV "AFX"

CALGARY, May 2 /CNW/ - Alternative Fuel Systems (2004) Inc. ("AFS" or the "Company") (TSXV: AFX) announced today that it recorded total revenue of $833,683 for the period ending March 31, 2011, up 54% compared to $540,750 for the same period of 2010. For the first quarter of 2011, the Company had a loss of ($16,609) compared to a loss of ($63,412) in the three months ended March 31, 2010. The Company is now preparing its financial statements for the first quarter, including comparative results showing the effects of the transition to IFRS reporting.

Jim Perry, President and CEO of AFS, stated, "We are pleased to report that our sales of engine control systems were up by 93% in the first quarter of 2011 versus the same period of 2010, from $298,000 to $575,000. These sales were primarily for use in light commercial vehicles being manufactured in India and Thailand. Sales of natural gas fuel injectors, which are used by several customers in the same vehicles as our engine controllers, increased by 80% in the same period, from $74,000 in Q1 of 2010 to $133,000 in Q1 of 2011. Sales of natural gas pressure regulators, which are primarily used for spare parts in previously manufactured vehicles, decreased from $94,000 to $68,000 in the three months ended March 31, 2011. Engineering services sales in the first quarter of 2011 were $32,000 compared to $48,000 in Q1 of 2010."

Mr. Perry added, "Foreign exchange continues to pressure our margins. In the first quarter of 2010, margin on product sales was 41%. In the three months ended March 31, 2011, product sales margin was 38%. Most of our sales are made in US dollars, and the Canadian dollar has continued to gain in value compared to that currency. In addition, we are seeing a shift in our engine controller sales toward higher volume, lower margin products. We are looking at various options to address these challenging issues."

AFS, based in Calgary, Canada, is a leading developer and manufacturer of natural gas vehicle engine controllers and associated components.

Forward-looking statements

Certain statements in this News Release including but not limited to (i) statements that may contain words such as "trend", "anticipate", "could", "expect", "seek", "may", "might", "intend", "will", "believe", "should", "project", "forecast", "plan" and similar expressions, including the negatives thereof, (ii) statements that are based on current expectations and estimates about the markets in which the Company operates including India and (iii) statements of belief, intentions and expectations about developments, results and events that will or may occur in the future with respect to engine controllers or otherwise, constitute "forward-looking statements" and are based on certain assumptions and analysis made by the Company. Forward-looking statements in this News Release specifically include, but are not limited to, statements with respect to future business opportunities, nature and timing thereof; business strategy; expansion and growth of the Company's business and operations and other such matters as the case may be. Such forward-looking statements are subject to important risks, uncertainties and assumptions which are difficult to predict and that may affect the Company's operations, including, but not limited to: the impact of general economic conditions; industry conditions; customer base changes; financial market conditions; government and regulatory developments; demand for natural gas engine controller technology; oil and natural gas supply, demand and pricing; foreign exchange rates; competition; market conditions in the countries where the Company operates; and the Company's ability to attract and retain qualified personnel. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do transpire or occur, what benefits or disadvantage the Company may derive therefrom. Except as required by applicable securities laws, the Company undertakes no intention or obligation to update or revise any forward-looking statements.

All forward-looking statements contained in this document are expressly qualified by this cautionary statement. Further information about the factors affecting forward-looking statements is available in the Company's current financial statements and other documents that the Company files from time to time with securities regulatory authorities. Copies of these documents are available without charge from the Company or electronically on the Internet on the Company's SEDAR profile at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Alternative Fuel Systems (2004) Inc.

For further information:

Jim Perry, President and CEO Phone: (403) 516-6632
E-mail jperry@afsglobal.com.

Visit our website at: www.afsglobal.com

Profil de l'entreprise

Alternative Fuel Systems (2004) Inc.

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