UNIDYNE Announces Management, Board Changes
24 January 2000
UNIDYNE Announces Management, Board Changes
EXTON, Pa., Jan. 24 -- UNIDYNE Corporation
(OTC Bulletin Board: UDYNC) today announced that Chairman and Chief Executive
Officer C. Eugene Hutcheson and Chief Administrative Officer Charlotte Doremus
resigned their posts as directors and officers, effective Friday, January 21,
2000. The Corporation named director Juan E. Cintron as interim chairman of
the board. UNIDYNE expects to fill the two board seats vacated by Hutcheson
and Doremus.
UNIDYNE said Wayne R. Lorgus would remain as president and chief financial
officer. Lorgus, who joined UNIDYNE in May 1999, will work closely with
Colmen Capital Advisors Inc., a Wayne, Penn.-based firm retained in December
1999 to develop, institute and operate a business improvement program for
UNIDYNE. Colmen Capital Advisors is a private investment-banking firm that
provides advisory services in business turnarounds, financing, mergers and
acquisitions, and strategic planning.
UNIDYNE said it is negotiating with financial institutions to secure
bridge financing within the next 60 days for working capital purposes. The
Corporation said it would also seek additional long-term financing for working
capital and growth initiatives. The Corporation has failed to make required
minimum pension contributions and has significant unpaid tax liabilities, as
well as unpaid self-funded medical benefits and has a significant amount of
overdue obligations to trade creditors.
"We have a tremendous amount of hard work ahead at UNIDYNE," interim
Chairman Cintron said. "The board and senior management of UNIDYNE
Corporation will be working closely with Colmen Capital to develop a workable
business improvement plan. With the cooperation of our employees and
creditors, we are confident that we can work our way back to financial health,
building on the strength and reputation of our Dynamatic and Maxwell product
lines."
The terms of the agreement reached with Doremus, Hutcheson, and their
company, Capital Idea, Inc., provide that, in addition to their resignation,
they will place the UNIDYNE common shares owned or controlled by them in a
voting trust, voting powers over which will be exercised by an unrelated
individual or financial institution, subject to Board approval. The agreement
also provides that the term of the lease of the Corporation's headquarters
from Capital Idea, Inc. will be shortened to end December 31, 2001; that the
$572,917 in preferred dividends still owed to Capital Idea will be deferred
and be paid not later than December 31, 2003; and that all outstanding and
unexercised stock options granted to Doremus or Hutcheson will be cancelled.
The Corporation does not anticipate taking any charge to earnings as a result
of the agreement.
The corporation did not agree to pay any severance or separation payments
to Doremus or Hutcheson, nor did it agree to a specific date on which to pay
other monies owed to Doremus, Hutcheson and/or Capital Idea of approximately
$100,000 and a $350,000 promissory note to Capital Idea, on which the
corporation is currently in default.
Exton, Penn.-based UNIDYNE Corporation and its subsidiaries manufacture,
sell, service and finance a variety of products, including vehicle emissions
testing systems, specialized electric motors, and variable speed drives and
controls. UNIDYNE also manufactures engine and chassis dynamometer testing
systems for a variety of large industrial customers, primarily in the
automotive and heavy equipment industries.
The statements contained in this news release include certain predictions
and projections that may be considered forward-looking statements under
securities law. These statements involve a number of important risks and
uncertainties that could cause actual results to differ materially, including,
but not limited to, the performance of the emissions testing industry, certain
customer and affiliated companies, as well as other economic, competitive,
governmental and technological factors involving the Corporation's operations,
markets, services, products and prices.