Sheldahl Inc. Announces 20 Percent Reduction in Workforce; Company Cites Slowdown in Demand for Products Sold to Automotive and Electronics Industries

    NORTHFIELD, Minn.--March 22, 2001--Sheldahl, Inc. today announced that it will reduce the size of its workforce by approximately 20 percent, or 190 employees. The Company said it was taking the action following a slowdown in first quarter sales of its products that are used in the automotive and electronics industries.
    "We have taken this difficult step to align staffing levels with customer demand for our products. We believe this will improve efficiency and strengthen our ability to compete in a very difficult business environment," said Donald Friedman, President and Chief Executive of Sheldahl. "We wish to emphasize that these actions are not a reflection of our workforce, but of current business conditions and a need to streamline the company."
    The Company said a reduction of approximately 15 percent of its workforce would be made from its Northfield, Minnesota facilities. An additional five percent reduction would occur from other company operations in North America and Europe. The Company said the layoffs would affect both salaried and union employees.
    Sheldahl has also instituted a plan to reduce inventory and other costs and expenses throughout the company, from Board of Directors to consulting fees. "We are taking every action now to return the company to profitability," said Mr. Friedman.
    Sheldahl said it has notified union employees in accordance with its collective bargaining agreement with Local 1481 of the Union of Needletrades, Industrial & Textile Employees (UNITE) which provides contractual severance packages for eligible employees. The Company said it would offer affected salaried employees severance packages and outplacement services. Sheldahl currently employs more than 900.

    About Sheldahl

    Sheldahl, Inc. is a leading producer of high-density substrates, high quality flexible printed circuitry, and flexible laminates primarily for sale to the automotive electronics and data communications markets. The Company, which is headquartered in Northfield Minnesota, has operations in Northfield; Longmont, Colorado; Endicott, NY; South Dakota; Toronto, Ontario, Canada; and Chihuahua, Chih., Mexico. Sheldahl's Common Stock trades on the Nasdaq National Market tier of the Nasdaq Stock Market under the Symbol: SHEL. Sheldahl news and information can be found on the World Wide Web at http://www.sheldahl.com.

    The discussion above contains statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements by their nature involve substantial risks and uncertainties as described by Sheldahl's periodic filings. Actual results may differ materially depending on a variety of factors, including, but not limited to the following: the achievement of Sheldahl's projected operating results, the ability of Sheldahl to successfully obtain waivers from its lenders for defaults on its debt covenants, the achievement of efficient volume production and related sales revenue results at Longmont, the ability of Sheldahl to identify and successfully pursue other business opportunities. Additional information with respect to the risks and uncertainties faced by Sheldahl may be found in, and the prior discussion is qualified in its entirety by, the Risk Factors contained in the Company's filings with the Securities and Exchange Commission including Sheldahl's Annual Report, Form 10-K for the fiscal year ended September 1, 2000, and other SEC filings. Sheldahl does not undertake any obligation to update any such factors or to publicly announce developments or events relating to the matters described herein.