Standard Automotive Implements Cost Savings and Inventory Protocol
21 December 2000
Standard Automotive Corporation Implements Cost Savings and Inventory Reduction Protocol to Enhance Cash Generation
HILLSBOROUGH TOWNSHIP, N.J.--Dec. 20, 2000--STANDARD AUTOMOTIVE CORPORATION (AMEX:AJX, AJX.PR) (the "Company") announced today that its Board of Directors has implemented an aggressive cost savings and inventory reduction protocol designed to enhance cash generation. The aggressive measures have been taken to offset a general industry slowdown impacting the Company's Truck/Trailer Division. Although the Company is in full compliance with payment of interest and principal on its bank debt, it is now in violation of two loan covenants.
Standard's Board also approved suspending the $289,000 quarterly dividend on the Company's 8 1/2% Senior Convertible Redeemable Preferred Stock. The Board anticipates a resumption of the Cumulative Preferred Stock dividend once the Company is back in compliance with performance measured covenants contained in the Company's credit agreement. In the interim, all preferred dividends will accrue pursuant to the terms of the Certificate of Designation for the Preferred Stock.
Steven Merker, the Company's Chairman and CEO commented, "While we are disappointed with the cyclical impact on our Truck/Trailer Division, we are very pleased with the performance of our Critical Components Division. Sales of jet engine and aerospace parts are running well ahead of last year. Thus, we are more than a little surprised that our common stock is selling at less than 30% of its book value of approximately $6.80 per share."