AFS (2004) reports record quarterly revenue

    CALGARY, Aug. 21 /CNW/ - Alternative Fuel Systems (2004) Inc. ("AFS or
the Company") (TSX Venture: AFX) today reported record revenue for the
three-month period ended June 30, 2008. President and CEO Jim Perry stated,
"Revenue for the second quarter was $827,685 including engineering and
interest income. This is the highest quarterly result the Company has recorded
since the reorganization of 2004, and represents a jump of more than 61% over
the revenue generated in Q2 of 2007. The company also recorded $155,542 in
cash flow from operations during the quarter, a substantial improvement from
the cash flow loss of $(4,226) recorded in the same period of 2007. Finally,
we recorded a profit of $36,662 during the second quarter of 2008, versus a
loss of $(159,919) during Q2 of 2007. We are very pleased to report such
improved results, with solid growth coming from both our pressure regulators
and engine management systems business lines".
    Sales of the AFS "Falcon" natural gas pressure regulator have increased
by 40% versus the same quarter of the previous year. Sales of engine
management systems are up by more than five times compared to Q2 of 2007 as
higher volume shipments to customers in India were recorded. The Company has
recently received deposits for several large runs of custom engine controllers
destined for Asian markets. Manufacture of the first batch of these
controllers is now underway. Initial shipments to customers are expected to
begin before the end of the third quarter of 2008.
    The Company previously announced that it is working on three projects for
Tata Motors of India. In addition, two different projects for another major
Indian vehicle manufacturer have now commenced. Mr. Perry added that "we are
seeing significant interest in our engine management systems from other Indian
based vehicle manufacturers that will be subject to stiff new emissions
requirements that take effect in 2010. Given the long development and
validation cycle for such components, customers are now beginning to act. We
believe that AFS is in a very good position to compete for these new
opportunities, given the well publicized success of our work on the Tata "ACE"
small CNG truck."

    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

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