WSI Industries Announces Acquisition of Precision Machining Company
10 August 1999
WSI Industries Announces Acquisition of Precision Machining Company; Acquired Unit Expected To Be Immediately Accretive To WSI's Consolidated Earnings
LONG LAKE, Minn.--August 9, 1999--WSI Industries, Inc. (Nasdaq NMS: WSCI) today announced it has acquired the stock of Bowman Tool and Machining, Inc. in Rochester, MN, a precision machining company with annual sales of approximately $8 million.Terms of the cash transaction were not disclosed. Bowman will be operated as a WSI subsidiary in its current manufacturing facility in Rochester.
Bowman's largest customers are the Industrial Equipment and Engines operations of Deere & Co. Industrial Equipment manufactures construction and forestry equipment, while the Engines operation manufactures engines for all Deere equipment in addition to private labeling for other companies. Deere is also WSI's largest customer for whom the Company manufactures a range of components for tractors and other agricultural equipment.
Michael J. Pudil, president and chief executive officer, commented that he is extremely pleased to have this opportunity to broaden WSI's business relationship with a high-quality customer like Deere. He said another benefit of this acquisition is that it further diversifies the base of industries served by WSI. He said the two Deere operations served by Bowman are performing generally better than Deere's agricultural segment, reflecting the fact that these areas are affected by different sets of market conditions and forces.
Pudil said Bowman has recorded solid performances in recent years, and as a highly efficient contract manufacturer, it has posted margins in excess of WSI's. He said Bowman will be included in the Company's consolidated operating results for the final three weeks of fiscal 1999 ending August 31 and is expected to be immediately accretive. Bowman is also expected to make a positive contribution to the Company's profitability during fiscal 2000.
In February 1999, the Company acquired the stock of Taurus Numeric Tool, Inc., a specialized precision machining company serving the avionics and aerospace markets. Taurus made a positive contribution to the Company's profitability in the third quarter of 1999 ended May 30 and is again expected to be accretive to fourth quarter operating results.
WSI Industries, Inc. is a leading contract manufacturer that specializes in the machining of complex, high-precision parts for a wide range of industries, including agriculture, construction, aerospace and avionics, recreational vehicles and computers.
The statements included herein which are not historical or current facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. There are certain important factors which could cause actual results to differ materially from those anticipated by some of the statements made herein, including the Company's ability to obtain additional manufacturing programs and retain current programs and other factors detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended August 30, 1998.