California Approves Bonded Motors' Offering
24 May 1999
State of California Approves Bonded Motors' Tax-Exempt Industrial Development Bond Offering
LOS ANGELES--May 21, 1999--Proceeds of the Offering to be Used for Production Expansion
New Board of Directors Member Appointed
Aaron Landon, chairman of the board and chief executive officer of Bonded Motors Inc. (Nasdaq NMS:BMTR) Friday announced that the company has secured financing for a $5.1 million tax-exempt industrial development bond offering.
The variable rate offering, which carries an initial interest rate of 3.35% and an "all in cost" of approximately 5%, is backed by a letter of credit from Comerica Bank. The financing package will be utilized to fund an ongoing expansion project including acquisition of properties adjacent to the Los Angeles facility, improvements to the existing facility and equipment upgrades.
"Closing this bond offering is a big step in Bonded Motors' long-term plan. Our existing facility was never designed to handle current production levels. The additional space should bring efficiency improvements and cost savings. While it will take the better part of a year to fully implement the project, we expect to finish the property acquisition in the third quarter," said Landon.
Landon also announced the appointment of David Braunstein to Bonded Motors' board of directors to replace Cornelius P. McCarthy III, who recently resigned. Braunstein is president and chief executive officer of the California Manufacturing Technology Center and, as such, he guides the state's efforts to upgrade the productivity and competitiveness of California's 53,000 small-business manufacturers. Prior to joining CMTC, Braunstein was a director of the 10,000-person aircraft division of McDonnell Douglas Corp. for 10 years.
"David's background and experience in manufacturing, productivity and competitiveness is a welcome addition to our board," Landon said, "and we expect to profit from his expertise as we expand our Los Angeles manufacturing facility."
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: The statements in this release regarding financing and use of proceeds, identification of production difficulties, future expectations and the expansion of the company's facilities and markets are subjective or forward looking statements that include risks and uncertainties, included but not limited to the ability to secure real estate designated by the Industrial Development Bonds, product demand and development, technological advancements, impact of competitive products and pricing, growth in targeted markets, manufacturing capacity, risks of foreign operations, ability to integrate and leverage acquisitions, and other information detailed from time to time in the company's Securities and Exchange Commission filings.
Bonded Motors is a remanufacturer of car and light truck engines with headquarters in Los Angeles, manufacturing facilities in California and Georgia, and distribution centers in California, Washington, Colorado, Ohio, New York, and Georgia. The company's principal customers are automotive parts chain stores, such as Pep Boys - Manny, Moe and Jack, ; CSK Automotive (Checker, Schucks, Kragen), ; Paccar Automotive (Grand's and Al's Auto Parts) (Nasdaq NMS:PCAR); and Genuine Parts/NAPA .