Precision Auto Care Announces Joint Venture With Service Champ
16 November 1999
Precision Auto Care Announces Joint Venture With Service Champ
LEESBURG, Va., Nov. 15 -- Precision Auto Care, Inc.
today announced that it has entered into a joint venture with
Service Champ regarding the operation of Precision Auto Care's parts and
distribution business. Charles L. Dunlap, President and CEO, Precision Auto
Care, Inc., stated, "This joint venture enables the Company to provide a
broader range of competitively priced parts to its domestic franchisees. With
Service Champ's more extensive line of automotive parts coupled with five
distribution centers strategically located across the United States, the level
of service to our system will improve dramatically." Service Champ's
President, Fred Berman stated, "We are excited about the opportunity to
service the Precision Tune Auto Care franchisee's. This joint venture will
provide the Precision Tune system with a distribution program which will lead
to improved unit economics."
Under the terms of the arrangement, Service Champ will acquire the
existing inventory of automotive parts from Precision's current parts
distribution operations by the end of the calendar year. Both companies expect
to see an improvement in cash flow and profitability with greater sales to
Precision Tune's franchise system.
"The benefactors of this joint venture will be our franchise partners and
store customers," stated John Wiegand, Vice President, North American
Operations. "Our franchisee's ability to inventory parts at a low price for
just in time delivery at the center level is fundamental to achieving customer
satisfaction."
With annual sales in excess of $40 million, Service Champ has served over
6,000 customers throughout North America since 1985.
Precision Auto Care, Inc. is the world's largest franchisor of auto care
centers, with 653 operating centers as of November 11, 1999. The Company
franchises and operates Precision Tune Auto Care, Precision Auto Wash, and
Precision Lube Express centers around the world, and offers a vertically
integrated organization with manufacturing and distribution subsidiaries.
Cautionary Statement: The statements in this press release constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements are subject to risks and uncertainties that could cause
Precision Auto Care Inc.'s actual results, performance or achievements to
differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. For example, there
can be no assurance that the Company will be able to modify the terms of its
outstanding debt, obtain additional capital, or complete any divestiture,
partnership or other restructuring transactions in a timely fashion or on
terms and conditions that are acceptable to the Company. Other risks and
uncertainties include, but are not limited to, (i) the risks and uncertainties
reflected and set forth in the text of this press release, (ii) the fact that
Precision Auto Care Inc. and the companies it acquired on and subsequent to
the date of its initial public offering have only recently conducted
operations as a combined company, (iii) the seasonal nature of portions of the
business, (iv) the highly competitive markets in which Precision Auto Care
Inc. operations, (v) difficulties in integrating all of the businesses
Precision Auto Care Inc. has acquired, (vi) risks associated with Precision
Auto Care Inc.'s ability to continue its strategy of growth through
acquisitions and (vii) risks associated with Company's ability to make or
effect acquisitions in the future and to successfully integrate newly-acquired
businesses into existing operations and the risks associated with such newly-
acquired businesses. For a discussion of such other risks and uncertainties
which could cause actual results, performance or achievements to differ from
those contained in the forward-looking statements, see "Risk Factors" in the
Company's most recently filed Annual Report on Form 10-K.