Amcast Forecasts Third Quarter Earnings Below Expectations

24 May 1999

Amcast Forecasts Third Quarter Earnings Below Expectations

    DAYTON, Ohio--May 21, 1999--Amcast Industrial Corp. announced today that it does not expect to meet analyst earnings estimates for the third quarter of fiscal 1999, primarily due to production scale-up of new aluminum products for North American automotive customers.
    Demand for the company's products in both its flow control and engineered components segments has been strong in the quarter. However, operating earnings in the North American automotive plants have been unfavorably impacted by higher than expected production costs. A tightening labor market and resultant higher turnover of skilled manufacturing employees in two of the company's Midwest automotive plants have resulted in inefficiencies involving current production and new product launches. In addition, operating difficulties have been encountered in the company's newest suspension components plant in Ohio, resulting in lower than expected production and added costs to supply a new product in sufficient quantities to meet a customer's production schedule for a new car platform.
    Due to the issues noted, management expects results to be significantly below consensus earnings estimates for the third fiscal quarter. Management also expects the production problems to be temporary and with the resolution of the current problems management expects to resume the upward trend in profitability in this segment. In addition, the shortage of skilled manufacturing employees is being addressed by new programs to attract, train and retain new workers.
    This release includes "forward-looking statements" which are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors include, among others: general economic conditions less favorable than expected, fluctuating demand in the automotive and housing industries, price pressures in the company's automotive and flow control businesses, effectiveness of production improvement plans, inherent uncertainties in connection with international operations and foreign currency fluctuations, and labor availability and relations at the company and its customers.