NEWS RELEASE
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CONTACT: Tom Armstrong or
Kevin McDermed
913 367 2121
OTCBB:AHNC:OB
ATCHISON CASTING CORPORATION
ANNOUNCES DELOITTE'S WITHDRAWAL OF MOST RECENT REPORT
Atchison, Kansas - October 10, 2002 - Atchison Casting Corporation
("ACC") (OTCBB:AHNC.OB) today announced that on October 9, 2002 its former
auditor, Deloitte & Touche LLP ("Deloitte"), notified the Company that
Deloitte's report dated September 28, 2001 on the consolidated financial
statements of ACC and its subsidiaries as of June 30, 2001 and 2000 and for each
of the three years in the period ended June 30, 2001 should no longer be relied
upon or associated with those consolidated financial statements. Deloitte had
issued an unqualified opinion in connection with its audit of ACC's financial
statements for such years, except for a going concern modification related to
fiscal year 2001.
Deloitte indicated that such report was being withdrawn because information
had come to its attention which, had it been known to Deloitte at the date of
the report, would have affected Deloitte's report.
As previously announced, ACC dismissed Deloitte as its auditor on April 16,
2002. On July 26, 2002, ACC filed a complaint against Deloitte in Philadelphia
County, Pennsylvania for negligence, professional malpractice, negligent
misrepresentation and breach of contract. ACC believes that Deloitte breached
its duties to perform audit and consulting services by failing to act with
reasonable and ordinary care, with the ordinary skill and diligence of the
accounting profession, and in conformity with professional standards such as
Generally Accepted Auditing Standards and Generally Accepted Accounting
Principles. Deloitte filed a counterclaim against ACC on September 13, 2002
alleging that ACC was aware of information related to improper activities of
certain employees in Pennsylvania and failed to disclose such information to
Deloitte. On September 24, 2002, Deloitte filed a third party claim against
certain officers and employees of ACC and others alleging, among other things,
that such officers and employees withheld material information in connection
with such improper activities. The Company believes that Deloitte's claims
against it and ACC's officers and employees have no merit and will vigorously
defend itself.
Management believes that the consolidated financial statements present
fairly, in all material respects, the financial position of the Company and its
subsidiaries as of June 30, 2001
ATCHISON CASTING CORPORATION
400 SOUTH FOURTH STREET o P.O. BOX 188o ATCHISON, KANSAS 66002-0188 o
(913)367-2121 o FAX (913)367-2155
and 2000, and the results of operations and cash flows for each of the three
years in the period ended June 30, 2001.
ACC produces iron, steel and non-ferrous castings for a wide variety of
equipment, capital goods and consumer markets.
This press release contains forward-looking statements that involve risks
and uncertainties. Such statements include the Company's expectations as to
future performance and contingent obligations. Among the factors that could
cause actual results to differ materially from the forward looking statements
are the following: the results of the litigation with Deloitte, the re-audit of
any financial statements, costs of closing foundries, the results of the
liquidation of the Company's wholly-owned subsidiary Fonderie d'Autun, the
amount of any claims made against Fonderie d'Autun's prior owner which are the
subject of certain guarantees, business conditions and the state of the general
economy in Europe and the US, particularly the capital goods industry, the
strength of the U.S. dollar, British pound sterling and the Euro, interest
rates, the Company's ability to renegotiate or refinance its lending
arrangements, utility rates, the availability of labor, the successful
conclusion of union contract negotiations, the results of any litigation arising
out of the accident at Jahn Foundry, results of any litigation or regulatory
proceedings arising from the accounting irregularities at the Pennsylvania
Foundry Group, the competitive environment in the casting industry and changes
in laws and regulations that govern the Company's business, particularly
environmental regulations.
ATCHISON CASTING CORPORATION
400 SOUTH FOURTH STREET o P.O. BOX 188o ATCHISON, KANSAS 66002-0188 o
(913)367-2121 o FAX (913)367-2155
