AFS (2004) provides business update

    CALGARY, Jan. 22 /CNW/ - Alternative Fuel Systems (2004) Inc. ("AFS" or
the "Company") (TSX Venture: AFX) announced today that it has been informed by
its European representative that the major vehicle manufacturer (the "OEM")
that has been purchasing the bulk of the Company's natural gas pressure
regulators plans to discontinue the production of the vehicle that uses those
products. The production halt is expected to occur within a few weeks. As a
result, a significant portion of the Company's revenue stream will be
affected. In the third quarter of 2008, pressure regulator sales through AFS's
European representative amounted to about one-half of the Company's revenue.
The majority of that revenue was generated from sales to the OEM. The revenue
split between sales to the OEM and other sales by AFS in the fourth quarter
ended December 31, 2008 was similar to that reported for Q3.
    It is expected that this production halt will only have a small affect on
the Company's revenues in the first quarter of 2009 (the period ending March
31, 2009). However, its effects later in the year will probably be material.
    As of December 31, 2008 AFS had term deposits of approximately $1.2
million, and no debt. This strong financial position will be an advantage as
efforts are made to replace the OEM revenue with sales from other sources.
Growth of the Company's electronic engine control business has been rapid,
with an increase of 562% previously reported for the third quarter of 2008.
Management expects to intensify efforts to grow this portion of the business
as quickly as possible, although with the current economic climate, there is
no guarantee that such efforts will be successful.

    Forward-looking statements

    Certain statements in this news release including (i) statements that may
contain words such as "anticipate", "could", "expect", "seek", "may" "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 and (iii) statements of belief, intentions and expectations about
developments, results and events that will or may occur in the future,
constitute "forward-looking statements" and are based on certain assumptions
and analysis made by the Company. Forward-looking statements in this news
release 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. Such forward-looking statements are subject to important risks and
uncertainties, 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; oil and natural gas
product supply, demand and pricing; foreign exchange rates; competition; 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. Subject to applicable law, the Company disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
    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 associated documents, which are available on

For further information:

For further information: Jim Perry, President and CEO, Phone: (403)
516-6632, E-mail; Visit our website at:

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