Automotive Performance Group Restructuring Nearing Completion
16 December 1999
Automotive Performance Group Restructuring Nearing Completion
NEW YORK--Dec. 16, 1999--Automotive Performance Group, Inc.'s (OTCBB:RACG) Chairman and Chief Executive Officer, Dean M. Willard, today updated the Company's recent restructuring activities and commented on current business trends in his Letter To Shareholders. His comments are reproduced in their entirety in the following release.December 16, 1999
Dear Fellow Shareholder:
I am writing to you in my continuing effort to keep you informed of the performance and progress of Automotive Performance Group (APG). We are nearing completion of the fourth month of operation of our most important investment, PBT Brands, Inc. (PBT), the parent company to Permatex. I am very pleased to report that the results of this business are on plan, with annualized revenues running well in excess of $100 million.
AC Tech, another PBT company, is also completing a strong year. AC Tech has made excellent progress in establishing new specifications for sealant materials for the construction and maintenance of aircraft. As the emerging second source for these important materials, each new specification brings a strong flow of revenues to this startup company.
I am also pleased to advise you of further progress in our effort to restructure and strengthen the remainder of APG's investments. We have reached an agreement as to the terms of sale of the operating assets of Klein Engines and Competition Components (Klein). The sale, which is expected to close before the end of the year, is being made to RPM Corporation, a company formed by Robert Pullinsi, the current President of Klein. This transaction further reduces APG's cash commitments and allows the former management and employees of Klein to continue to provide high performance engines, components and services to the auto racing community.
We have achieved important progress with our Boyds investment, as well. Some of our successes with Boyds have been in the courtroom. Protecting important assets acquired with Boyds, the cost of litigation has further aggravated our cash situation. The legal matter I am referring to is a recent decision in the United States Bankruptcy Court granting Boyds a preliminary injunction against Boyd Coddington, Sr. and Boyd Coddington, Jr. to stop them from using any of the registered trademarks and Boyds Wheels and Hot Rods by Boyd. We are continuing to pursue these defendants in Federal District Court concerning their infringing actions.
Boyds has been able to establish business relationships within the automotive wheel industry which have the potential of generating $2-3 million in revenues for the Company next year. There is no assurance that Boyds will be able to realize these revenues, as we require substantial working capital to support the activity and we are still attempting to arrange the necessary financing. In the meantime, we have taken every possible step to reduce cash outflows relating to this business. We also successfully completed the sale of the rights to the Boyds appearance products line to our current licensee.
Our management team continues in its commitment to the successful restructuring of APG and Boyds. The companies are still faced with an extremely tight cash position and a need to further convert short-term obligations into some form of long-term debt or equity. Our primary objective is to protect our investment in the Permatex companies and to the proper restructuring of our obligations.
We have had to delay certain SEC filings as we await results of audits being completed on the opening balance sheet of Permatex. Once these SEC filings are complete we expect to schedule our annual meeting of shareholders.
In my capacity as Board Chairman and Chief Executive Officer, I continue to welcome constructive ideas from our shareholders. In this regard, I have received a strong indication of support for our plan to first protect the Permatex investment and second to minimize or eliminate any cash outflow relating to the other operating subsidiaries of APG. Management is implementing that plan. We are also working to find other corporate opportunities, including acquisitions, which will provide APG with a positive cash flow and further appreciation in shareholder value.
This management team has been in place now for one year and I thank you on behalf of the entire group for your continuing support.
Sincerely,
Dean M. Willard
Chairman and Chief Executive Officer
Except for historical matters contained herein, the matters discussed in this press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect assumptions and involve risks and uncertainties which may affect Automotive Performance Group, Inc.'s business and prospects and cause actual results to differ materially from these forward-looking statements.
Automotive Performance Group, Inc., participates in the fast-growing high-performance automotive and specialty chemical industries through its 22% equity ownership in PBT Brands, Inc., a leading manufacturer, distributor, and marketer of premium functional chemical products to the automotive maintenance and repair markets, and Advanced Chemistry and Technology, Inc. (AC Tech), which develops and manufactures sealants for the aerospace and aircraft industry.