TSE Symbol:  SQP                  For Immediate Release

      Strongco Inc. Releases Third Quarter Results 

Mississauga, Ontario: October 24, 2001 – Strongco Inc. released its financial results for the third quarter of 2001 today.

Strongco lost $1.3 million after tax during the third quarter on revenue of $97.0 million.  This translates to a loss of $0.14 per share.  A significant turnaround in the profit performance of the company’s western equipment division with the recent addition of the Volvo construction equipment line in Alberta and Manitoba was countered by weakness in the company’s equipment rental operations and its engineered systems business.

Third quarter revenues were $97.0 million, compared to $105.1 million for the third quarter of last year.  The addition of the Volvo line resulted in significant increases in equipment sales and customer support revenues for Strongco’s western equipment operations during the quarter.  These gains, however, were more than offset by declines in equipment revenues in the eastern part of the country.  Revenues from Strongco Engineered Systems were also down relative to the third quarter of last year, reflecting a general weakening of economic conditions, particularly in eastern Canada, which has had a pronounced effect on the manufacturing sector.  Revenues in Strongco’s Supplies segment were up over last year, with the greatest growth coming from Alberta.  Strongco’s overall gross margin percentage for the quarter, at 20.4%, was down from last year’s third quarter level of 22.6%.  Virtually all of the margin compression occurred in the company’s Equipment Distribution segment, again reflecting softer economic and industry conditions in eastern Canada.  Operating expenses were up slightly compared to last year’s third quarter as a result of the additional overheads put in place in western Canada to handle the increase in business attributable to the addition of the Volvo line.  Interest expenses declined by $1.4 million year over year due to Strongco’s reduced levels of debt and lower bank rates.

For the nine months to September 30, Strongco has lost $5.1 million after tax, or $0.54 per share, on revenue of $287.3 million.  Included in the year-to-date results are, (i) $3.9 million of pre-tax charges (approximately $2.4 million after- tax) related to the closure of three of the company’s five branches in Atlantic Canada and the termination of a distribution relationship with a former equipment supplier in conjunction with taking on the Volvo line in Alberta and Manitoba, and, (ii) an after-tax gain of $2.0 million related to the disposition of Strongco’s former U.S. operations in the first quarter of the year.

Mr. Larry Pirnak, Chairman, commented, “This has been a year of significant change and development for Strongco.  We believe that the actions we have taken to streamline the company and sharpen its focus on specific markets with specific equipment manufacturers having sound, long-term strategies for the future have positioned Strongco to benefit over the long term.  In fact, the benefits are already beginning to pay off, as evidenced by the company’s improved financial performance in western Canada and its reduced cost base in Atlantic Canada.  Furthermore, these actions have enabled Strongco to reduce its balance sheet leverage over the year, in spite of adding inventory in western Canada pursuant to the Volvo appointment.”

Mr. Pirnak continued, “While we are pleased with the progress made thus far, we also recognize that the economy, and the equipment industry, entered a period of sharply increased uncertainty during the quarter.  As a result, we expect industry conditions to continue to be challenging for the foreseeable future.”

Strongco will host a conference call at 10:00 A.M. on Thursday, October 25, 2001 to discuss its operating and financial results further.  Details of the call can be obtained from the company by calling 905-565-3811.  The call will also be web-cast at www.ir-live.com.

Strongco is one of Canada’s largest full line equipment sales, rental and service companies.  Its shares are listed on the Toronto Stock Exchange and its web site can be accessed at www.strongco.com.

For further information, contact:

Randy Henderson
President
Phone:  905-565-3802

e-mail: rhenderson@strongco.com

See unaudited financial statements attached. 

STRONGCO INC.
Consolidated Balance Sheets
As at September 30, 2001

($000's)

STRONGCO INC.
Consolidated Statements of Income
For the Three Months Ended September 30

($000's)

Unaudited

STRONGCO INC.
Consolidated Statements of Cash Flows

For the Three and Nine Months Ended September 30

($000's)