Fourth Quarter Highlights

- Revenue of 230.9 million up 6.7% (ex. PNE).

- Net Earnings of $0.22 per share versus a loss of $0.51 last year.

- $40.2 million of cash flow in the quarter.

- Board reinstitutes dividend program and declares $0.04 per share quarterly dividend.

- Secured a new $20.0 million bank facility.

Wajax Limited today announced improved fourth quarter 2003 earnings of $3.4 million or $0.22 per share compared to a loss of $8.0 million or $0.51 per share for the corresponding period in 2002. For the year ended December 31, 2003 the Company earned $9.6 million or $0.61 per share compared to a loss of $25.8 million or $1.64 per share recorded in the prior year.

In the fourth quarter of 2002 other items totaling $5.1 million ($8.5 million pretax) or $0.33 per share were recorded as a charge against earnings. This charge included $3.4 million ($5.5 million pretax) for the write down of a computer system and $1.7 million ($3.0 million pretax) for severances and restructuring charges relating to staff reductions. Excluding other items, the 2002 fourth quarter loss was $2.9 million or $0.18 per share.

Revenues for the quarter of $230.9 million increased by $14.6 million or 6.7% compared to 2002, excluding PNE. This increase was driven by higher sales in the crane/utility, mining and material handling sectors in eastern Canada. As well, the Canadian operation of Industrial Components, Kinecor, posted slightly higher revenue. For the year ended December 31, 2003 revenues, excluding PNE, were up $39.4 million or 4.7% on the strength of sales increases in Mobile Equipment.

A number of factors contributed to the significant increase in earnings before other items. Earnings in the Industrial Components segment increased by $4.3 million due to increased revenues, improved margins and lower selling and administrative costs in Canada and the closure of four unprofitable branches and a distribution centre in the U.S. Higher revenues in Mobile Equipment resulted in an earnings increase of $0.9 million and Diesel Engines earnings decreased by $0.3 million as a result of increased occupancy costs related to a new facility in Calgary. Also contributing to the earnings improvement were reduced corporate costs due mainly to expenses for fees associated with the unwinding of fixed interest rate swaps incurred last year and lower interest expense as a result of a reduction in overall borrowing levels.

The Company generated $40.2 million of cash flow before financing in the fourth quarter of 2003, with $10.5 million coming from operating earnings and the remainder generated from non cash working capital reductions less investing activities. For the full year 2003, cash flow generated before financing activities amounted to $68.2 million. At December 31, 2003, the Company had $45.4 million of cash on hand and no bank indebtedness (excluding $4.0 million of letters of credit). This resulted in a year-end debt-to-equity ratio net of cash of 0.22:1 compared to 0.67:1 the previous year.

In December 2003, the Company entered into a new $20 million 364-day revolving secured committed bank borrowing facility, which effectively replaced the bank facility that expired December 31, 2003.

During the quarter, Kinecor acquired the assets of P.M.D.F. Hydraulique, a Quebec based hydraulics distributor with expertise in sourcing quality offshore products, for $1.0 million. This acquisition is part of Industrial Components'initiative to build its revenue through the marketing of high quality offshore sourced products by the new Hy-Spec Hydraulik division of Kinecor.

The Board of Directors reinstituted the Company's dividend program and declared a quarterly dividend of $0.04 per common share payable on March 31, 2004, to shareholders of record on March 15, 2004.

Commenting on the results for 2003, and the outlook for next year CEO Neil Manning stated, 'We are very pleased with our results for 2003 and the progress we have made in establishing a solid base on which to grow. The confidence in our ability to sustain and improve earnings is reflected in the Board's decision to begin payment of a four-cent quarterly dividend. Going into 2004 we recognize that more hard work is ahead of us in order to continue to improve upon our operating performance. In Industrial Components we intend to increase our revenue and margins while at the same time maintaining tight control over costs and assets employed. We expect continued improvement in Spencer in 2004. In Mobile Equipment we plan to increase market share in our material handling and construction sectors while prudently managing our expenses and assets and in Diesel Engines we expect to continue to deliver solid results.'

Wajax is a diversified company that has three core distribution businesses engaged in the sale and after-sales parts and service support of mobile equipment, diesel engines and industrial components, through a network of over 100 branches across Canada and the western United States. Its customer base spans natural resources, construction, transportation, manufacturing, industrial processing and utilities.

Wajax will Webcast its Fourth Quarter Financial Results Conference Call. You are invited to listen to the live Webcast on Friday February 27, 2004 at 2:00 p.m. EST. To access the Webcast, go to www.wajax.com and click on the link for the Webcast on the Investor Relations page. The archived Webcast will be available at the above mentioned website within 24 hours after the conference call.

This news release contains forward-looking information. Actual future results may differ from expected results.

Note 1 Significant Accounting Policies

The accounting policies used in the preparation of these unaudited interim consolidated financial statements conform with those used in the Company's annual consolidated financial statements, except for the changes noted below (see Note 2).

These interim consolidated financial statements do not include all of the disclosures included in the Company's annual consolidated financial statements. Accordingly, these unaudited interim financial statements should be read in conjunction with the Company's annual consolidated financial statements as at and for the year ended December 31, 2002.

Note 2 Change in Accounting Policy

a. Guarantees

Effective January 1, 2003, the Company adopted the Canadian Institute of Chartered Accountants new Accounting Guideline ACG-14, which requires certain disclosures of guarantees. The Company's annual consolidated financial statements as at and for the year ended December 31, 2002 disclose the existence of guarantees provided by the Company. As at December 31, 2003, the Company had guaranteed $4.7 million (December 31, 2002 - $3.5 million) for guaranteed residual value contracts and provided the option to customers for buy-back contracts in the amount of $1.1 million (December 31, 2002 - $0.6 million), with commitments arising between 2004 and 2009. The commitments made by the Company in these contracts reflect the estimated future value of the equipment, based on judgment and experience of management. The Company has recorded a provision of $0.4 million (December 31, 2002 - $0) as an estimate of the financial exposure likely to result from such commitments.

b. Employee Stock Options

In 2003, the Company has adopted the fair value based method of accounting for employee stock options on a prospective basis. Accordingly, the fair value of options at the date of grant is calculated and charged to operations on a straight-line basis over the vesting period, with an offsetting adjustment to contributed surplus. In 2002, the Company accounted for employee stock options using the intrinsic value method and accordingly did not record a compensation cost, but instead provided pro forma information in accordance with the recommendation.

Note 3 Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share information):

Excluded from the above calculations are 202,000 (2002 - 874,000) outstanding stock options with an exercise price range of $7.34-$11.50 (2002 - $3.80-$17.25) as they are currently anti-dilutive. These securities could potentially dilute earnings per share in future periods.

Note 4 Acquisition

During the year, the Company's Industrial Components segment acquired the assets of P.M.D.F. Hydraulique Inc., an industrial hydraulic distribution business, for a total purchase price of $1.0 million. The effective date of acquisition was December 1, 2003. The results of operations from the acquisition have been included in the consolidated statements of the Company as of the effective date.

Of the options granted during the year, 40,000 were granted in the quarter with a weighted average exercise price of $7.34 (2002 - 200,000 with a weighted average exercise price of $4.25). Of the options forfeited and expired during the year, 200,000 expired during the quarter with a weighted average exercise price of $15.06 (2002 - 104,000 with a weighted average exercise price of $3.80).

The following table summarizes information about stock options outstanding at December 31, 2003:

The Company recorded a compensation cost of $51 thousand for the quarter and $63 thousand for the year in respect of employee stock options granted in 2003. The Company had accounted for employee stock options using the intrinsic value method prior to 2003 and accordingly has not recorded compensation cost for grants prior to this year. There would have been a reduction in net earnings of $44 thousand (2002 - $39 thousand) for the quarter and $253 thousand (2002 - $56 thousand) for the year and a nominal reduction in earnings per share for the quarter and a $0.01 reduction in earnings per share for the year if the Company had accounted for employee stock options issued in 2002 under the fair value method. The fair value of employee stock options is determined using the Black-Scholes option pricing model using the following weighted average assumptions:

Risk free interest rate 3.98% - 4.18% Expected life 5 years Expected volatility 39% Expected dividends 2%

The weighted average fair value of the options issued during the year at the grant date was $2.00 (2002 - $1.90)

Note 6 Financial Instruments

The Company had previously entered into interest rate swap agreements to manage its interest rate exposure on floating rate debt. During the year the Company unwound $25.0 million (2002 - $40.5 million) of fixed interest rate swaps at a cost of $0.8 million (2002 - $4.2 million). As of December 31, 2003 there were no outstanding interest rate swaps (December 31, 2002 - $25.0 million).

The Company hedges its foreign currency exposures on a portion of its U.S. dollar-denominated senior notes by entering into offsetting U.S. dollar forward contracts. At June 30, 2003 the Company had entered into a short-term foreign currency forward contract to buy $30.0 million U.S. dollars. The differential the Company would have paid to hypothetically terminate the forward contracts at December 31, 2003 is estimated at $2.7 million.

Note 8 Contingencies

In the ordinary course of business, the Company may be exposed to contingent liabilities in varying amounts and for which provisions have been made in these Consolidated Financial Statements as appropriate. These liabilities could arise from litigation, environmental matters or other sources. It is not possible to determine the amounts that may ultimately be assessed against the Company, but management believes that any such amounts would not have a material impact on the business or financial position of the Company.

In making this assessment, the Company has been made aware of potential claims that may be advanced by a group of former and current employees arising out of the conversion on January 1, 2001 of the Employee Pension Plan from defined benefit to defined contribution, the taking of contribution holidays and the payment of pension administrative expenses from the pension fund. No claim has been served on the Company. However, based on very limited communications with the group and its representative, the Company has evaluated the claims it anticipates could be articulated and believes such claims would be unlikely to succeed.

Note 9 Comparative Information

Certain comparative numbers have been reclassified to conform with current presentation.

Neil Manning President and Chief Executive Officer (905) 212-3300 nmanning@wajax.com or John Hamilton Chief Financial Officer (905) 212-3300 jhamilton@wajax.com

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