Amcast Enters Into New Financing Agreement

    DAYTON, Ohio--June 12, 2001--Amcast Industrial Corporation today announced new financing arrangements and key initiatives aimed at providing an improved financial base for a return to profitable operations during the second half of its next fiscal year, ending August 31, 2002.
    Leo W. Ladehoff, Chairman of the Board, said, "Amcast has entered into a new credit agreement, which provides additional borrowing capacity for the company, with its bank lending group. At the same time, the members of the bank lending group, as well as the insurance company holders of the company's senior notes, have waived, until the maturity of the new credit agreement, the financial covenants which had caused the company to be out of compliance under the terms of its existing loan agreements."
    "We have been pleased by the cooperation from our lenders during this trying period. The company can now concentrate on an orderly completion of its strategic plan and reduction of debt," he said.
    The new agreement, which matures April 15, 2002 (which may be extended if Amcast meets certain conditions), provides for the ability to make new borrowings initially up to $15 million, increasing in stages to a maximum of $35 million (based on the company meeting certain conditions), and provides a primary security interest in the company's assets to the lenders, as well as a subordinated security interest to the members of the bank lending group under the existing agreement and to the holders of the senior notes.
    The new agreement provides for the payment by the company of certain additional interest payments and fees and the issuance to the insurance companies of warrants for the purchase of 200,000 shares of Amcast stock at current market value and warrants for 255,000 shares to the bank lenders, also at market value as of June 5, 2001.
    The existing agreement, which has approximately $111 million outstanding currently, matures in August of 2002. If the bank group agrees to extend the maturity of the existing agreement to September 2003, the bank group will receive additional fees and 255,000 additional warrants.
    "The warrants provide members of the bank lending group and the note holders with the opportunity to share in the company's future success. We are confident that the new agreement provides Amcast with more than adequate liquidity going forward," said Mr. Ladehoff.
    Byron O. Pond, President and Chief Executive Officer, stated that the Company would recognize an after-tax charge of approximately $15-$19 million during the third and fourth quarters of its fiscal year 2001. The Company anticipates that this unusual charge will consist of approximately 30% of a cash component and approximately 70% of a non-cash component. During the third quarter of fiscal 2001, the new management team conducted a strategic review of its operations in light of the weak manufacturing sector of our economy with a special emphasis on the continuing weak automotive market. As a result of this strategic review, management has decided to dispose of certain underutilized machinery and equipment and scrap certain inventory and tooling, which is slow moving or underutilized in the current economic environment. As a result of the continuing weak manufacturing sector of our economy, the Company will increase its allowance for doubtful accounts for uncollectible and disputed accounts receivable and will establish a valuation allowance for foreign net operating losses that the Company believes it may not use because of the weak economy and weakened results of the Italian subsidiary, Speedline.
    "The current actions which are resulting in these special charges should strengthen Amcast for the future. Further, our Board of Directors is signaling to investors that the new management team is focused on making important decisions to help achieve the major profit potential inherent in our businesses," Mr. Pond said.
    Amcast also announced that it has purchased the 40 percent share of Casting Technology Company (CTC of Franklin, Indiana) owned by Izumi Industries of Japan. "The acquisition of the Izumi partnership interest in CTC will enable Amcast to continue to use proprietary squeeze casting technology as a part of its overall strategy to serve the growing market for strong, lighter weight, aluminum vehicle suspension components," Mr. Pond said.
    The company now has in place a credible turnaround plan, with a concentration on reducing working capital requirements, controlling capital spending, and improving operating performance. Mr. Pond added, "We are reeducating our workforces in lean manufacturing concepts and focusing management on profit drivers that will improve our performance. As these initiatives unfold, operating losses will turn to profits. Further, we anticipate that automotive production will improve in calendar year 2002, which, together with new automotive component orders, will assist Amcast's return to profitability."
    There will be an Internet Webcast of the company's quarterly conference call at 2 p.m., EDT, Wednesday, June 27, 2001, to discuss fiscal 2001 third quarter results and the restructuring. The Webcast can be accessed through www.amcast.com.