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NEWS RELEASE
Collins Industries, Inc. Contact: Kent Tyler
15 Compound Drive Vice President of Marketing
Hutchinson, Kansas 67502-4349 620-663-5551
For Immediate Release
November 2, 2005
Collins Proposes Plan to Deregister with the
Securities and Exchange Commission
Hutchinson, Kansas, November 2, 2005 ...... Collins Industries, Inc. (OTC: COLL)
announced today that its Board of Directors has approved a plan to terminate the
Company's obligation to file reports with the Securities and Exchange Commission
(the "SEC"). This would be accomplished through a 1-for-300 reverse stock split
of the Company's outstanding common stock to be followed immediately by a
300-for-1 forward stock split (the "Reverse/Forward Stock Split"). If the
transaction is completed, the Company expects to have fewer than 300
shareholders of record. As a result, the Company would no longer be required to
file periodic reports and other information with the SEC, although the Company
anticipates that its stock will continue to be quoted on the Pink Sheets.
Completion of the transaction is subject to the fulfillment of all of the filing
requirements of the SEC.
President and CEO Donald Lynn Collins stated, "In addition to significant
anticipated cost savings resulting from the elimination of these reporting
requirements, we expect that the reduced burden on management will allow our
officers to focus more attention on improving our operating performance and
serving our customers and the communities where we operate. Further, the Company
will be able to avoid significant costs associated with Sarbanes-Oxley Section
404 compliance."
In the Reverse/Forward Stock Split, shareholders with less than 300 shares of
the Company's common stock held of record in their name immediately before the
transaction will receive a cash payment equal to $7.70 per pre-split share.
Shareholders holding 300 or more shares of the Company's common stock
immediately before the transaction will not receive cash payment and will
continue to hold the same number of shares after completion of the transaction.
The Board of Directors has received a fairness opinion from its financial
advisor, Stifel, Nicolaus & Company, Incorporated, that the per share cash
consideration to be paid in the proposed Reverse/Forward Stock Split transaction
is fair, from a financial point of view, to the Company's shareholders that
would be cashed out as a result of the Reverse/Forward Stock Split.
The Board of Directors has also approved an amendment to the Company's Articles
of Incorporation to take effect immediately following the Reverse/Forward Stock
Split that would grant to the company a standing option to repurchase any shares
of common stock proposed to be transferred by a shareholder after the
Reverse/Forward Stock Split if after such proposed transfer the number of
shareholders of record of the Company's common stock would equal or exceed 250
(the "Right of First Refusal").
The proposed Reverse/Forward Stock Split and Right of First Refusal are subject
to approval by the holders of a majority of the issued and outstanding shares of
the Company's common stock. Shareholders will be asked to approve the
Reverse/Forward Stock Split and Right of First Refusal at a special meeting of
shareholders, currently expected to be held January 19, 2006. Even if the
shareholders approve the Reverse/Forward Stock Split and Right of First Refusal,
the Board of Directors reserves the right to defer or not to implement either
transaction.
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This press release is only a description of the proposed transaction and is not
an offer to acquire any shares of common stock. The Company intends to file a
preliminary proxy statement and Schedule 13E-3 with the SEC outlining the
transaction. All shareholders are advised to read the definitive proxy statement
and Schedule 13E-3 at the SEC's web site at www.sec.gov. The Company will also
mail a copy of the definitive proxy statement prior to the special meeting to
its shareholders entitled to vote at the meeting.
Collins Industries, Inc. is a leading manufacturer of ambulances (including
medical attack vehicles, rescue vehicles and fire emergency vehicles), North
America's largest producer of Type "A" small school buses, the nation's second
largest manufacturer of terminal trucks and a leader in the road construction
and industrial sweeper markets. Since 1971, the Company has grown to
approximately 1000 employees in six plants comprising over one million combined
square feet of manufacturing space. The Company sells its products throughout
the United States and abroad.
This press release contains historical and forward-looking information. The
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The Company believes the
assumptions underlying these forward-looking statements are reasonable; however,
any of the assumptions could be inaccurate, and therefore, actual results may
differ materially from those projected in the forward-looking statements due to
certain risks and uncertainties, including, but not limited to, the availability
of key raw materials, components and chassis, changes in funds budgeted by
Federal, state and local governments, changes in competition, various inventory
risks due to changes in market conditions, changes in product demand,
substantial dependence on third parties for product quality, interest rate
fluctuations, adequate direct labor pools, development of new products, changes
in tax and other governmental rules and regulations applicable to the Company,
reliability and timely fulfillment of orders and other risks as indicated in the
Company's filings with the Securities and Exchange Commission. The Company
undertakes no obligation to publicly release any revisions to any
forward-looking statements contained herein to reflect events or circumstances
occurring after the date released or to reflect the occurrence of unanticipated
events.
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