BEIQ Bei Technologies (MM)

BEI Technologies Renews Strategic Relationship With Continental Teves SAN FRANCISCO, March 2 /PRNewswire-FirstCall/ -- BEI Technologies, Inc. announced it has executed a long term contract for automotive rate sensor products with its largest customer, Continental Teves (CT), a business unit of Continental A.G. Under the new contract, the parties have agreed on a substantial extension of their strategic business relationship. BEI will supply all of CT's rate sensor product requirements for brake-related Electronic Stability Control systems. CT will continue to take delivery on the prior contract of an aggregate of 9.3 million units for the sensor module assembly to complete the contract, according to Charles Crocker, Chairman and Chief Executive Officer. Crocker stated, "We believe this new contract will strengthen the long term strategic relationship between CT and BEI. Also, it will greatly assist BEI in achieving our goal of becoming the major independent manufacturer of MEMS automotive rate sensor gyros in the world. To this end, BEI's Systron Donner Automotive Division has initiated significant capacity expansion in both quartz fork sensor fabrication and the nugget sensor package production. Because the contract requires BEI to be price competitive, BEI is shifting emphasis to high volume sensor and package production, and we will sell and transfer our cluster final assembly and test line to CT to enable CT to perform those functions. This transition will begin within the next several quarters and be mostly completed by the end of calendar year 2005. For CT's next generation product, BEI will transition to supply advanced sensor nuggets to CT for final assembly and integration beginning mid year 2006." Crocker continued, "To incorporate marketplace changes, our updated technology roadmap developed with CT calls for the introduction of a microgyro (quartz based single chip package) to the market in the 2006 time frame. Our previous exclusivity arrangements associated withbrake-related products for autos and light trucks will remain in place. We believe this new agreement significantly enhances the competitive position of both companies within the global stability control market." "BEI management believes this closer strategic and manufacturing relationship with CT will reduce our revenue and cash flow variability, reduce our market and manufacturing risk and reduce our infrastructure and working capital requirements. Finally, the benefits of high volume productionof quartz based gyros for supply to the automotive stability control markets should have a positive effect on our ability to supply low cost quartz rate sensors for the emerging military and non-brake-related automotive applications," concluded Crocker. Conference Call Information: BEI will host a conference call and webcast on Tuesday, March 2, 2004, at 1:45 pm to facilitate discussion and answer questions related to this announcement. The dial-in number to access the call is (800) 245-3043. A taped replay of the call will also be available beginning approximately one hour after the call's conclusion and can be heard until 11:59 p.m. ET on Tuesday, March 16. The number to access the replay is (800) 938-2796. From international locations, thereplay number is (402) 220-9030. No passcode is required. To access the webcast, go to BEI's website at http://www.bei-tech.com/. An archived webcast replay of the call will also be available at that website. About BEI Technologies: BEI Technologies, Inc. ("the Company" or "Technologies") is an established manufacturer of electronic sensors, motors, actuators and motion control products used for factory and office automation, medical equipment, military, aviation and space systems. In addition, sales to manufacturers of transportation equipment including automobiles, trucks and off-road equipment have become a significant addition to the Company's business in recent years. The Company's micromachined quartz yaw rate sensors are being used in advanced vehicle stability control systems and a significant increase in the production of those sensors had been in progress from the middle of 1998 to FY 2003 except for a decrease in production in fiscal 2002 due to increased competition. The Companyis currently transitioning to its next generation of automotive inertial quartz based sensor products, remotely mounted multi- sensor clusters with can bus and a multi rate sensor package suitable for incorporation into electronic systems modules. TheCompany also manufactures electronic steering wheel position sensors, seat-memory modules, throttle position sensors, pressure sensors, and other devices used in transportation systems. GyroChip and MotionPak are registered trademarks of the Company. Except for historical information, this news release may be deemed to contain forward-looking statements that involve risks and uncertainties, including statements with respect to future timely development, acceptance and pricing of new products; potential impact of competitive products and their price; the ability to manufacture products in sufficient volume on an efficient and timely basis; general economic conditions as they affect the Company's customers and strategic partners, as well as other risks detailed from time to time in the Company's reports to the Securities and Exchange Commission, including the Company's Form 10-K for fiscal 2003. DATASOURCE: BEI Technologies, Inc. CONTACT: John LaBoskey, Senior Vice President/CFO of BEI Technologies, Inc., +1-415-956-4477 Web site: http://www.bei-tech.com/

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