Exhibit 99.1
WPI Group Announces Major Reorganization
Manchester, New Hampshire, December 20, 1999: WPI Group, Inc.
(WPIC: NASDAQ/ National Market) today announced a major
restructuring intended to focus on the substantial growth
potential of the Company's MPSI division and to divest all other
operations, using the proceeds to reduce corporate debt. The
successful completion of these three divestitures will allow WPI
Group to strengthen its balance sheet and prepare for the
substantial growth opportunities at MPSI with its new E-
Technician, Web-based remote diagnostic system and services.
These divestitures, along with a fourth quarter restructuring and
a change of accounting methods, will result in the Company taking
an approximate charge to earnings of approximately $28 million,
or $4.63 per share, in the Company's 1999 Fiscal fourth quarter,
ended September 26, 1999. The Company announced that it is in
final negotiations to sell its Warner, New Hampshire-based Power
Systems and Electronics Division to a private group of investors.
Management expects the transaction to close no later than the
beginning of the first calendar quarter. In addition, the
Company is in final negotiations to sell its Husky Technology
subsidiary. Management expects the transaction to be concluded
some time in the first calendar quarter of 2000. Headquartered in
Coventry, England, Husky Technology manufactures rugged, handheld
computers and terminals used in utility, asset management,
forestry, industrial and other applications. The Company is also
in the process of seeking a buyer for its Manchester, New
Hampshire-based Instruments Group. Instruments manufactures a
wide variety of electro-mechanical and electronic devices and
subsystems used in avionics, industrial, commercial and other
applications.
As part of the restructuring, WPI's founder Michael Foster, under
whose leadership annual revenues grew from $4 million to $100
million in ten years, announced his retirement as Chairman and
CEO. The Board of Directors promoted John Allard, 34, WPI's
President and Chief Operating Officer, to the additional role of
Chief Executive Officer. In addition, current Board members,
Steven Shulman, Managing Director, Latona Associates, Inc. and
Paul Giovacchini, Managing Director, Seacoast Capital Corporation
have been named Non-Executive Chairman and Vice Chairman of the
Board, respectively. Michael Foster stated, "With this
restructuring well underway, and as I turn 65 years of age, I
believe it is time to turn the company leadership over to John
Allard. In the past year, he has made important contributions to
WPI, and the Board of Directors and I are confident that John has
the capabilities and experience necessary to lead WPI into the
web-based markets of the future. I have enjoyed my time at WPI
and I would like to thank those directors and employees that have
made my tenure the positive experience that it has been. I will
remain a Director of the Company."
Commenting on the restructuring program, Foster said, "WPI's
financial situation limits its ability to finance growth at a
level that we believe necessary for all its divisions to remain
competitive over the long term. Management has analyzed the
situation at each of our operating divisions and has concluded
that the best opportunity for the Company's future is in the
rapidly developing E-Commerce market for remote diagnostic and
maintenance services in the heavy-duty truck and off-road markets
through MPSI's E-Technician. This was a difficult decision. Each
of the businesses to be divested, and their employees, has made
important contributions to WPI. However, given the magnitude of
the opportunity for growth with E-Technician, management and the
Board of Directors have concluded that the best outcome for
shareholders is to restructure operations around MPSI."
Commenting on Mr. Foster's retirement, John Allard said, "All of
us at WPI are very appreciative of what Mike Foster has done for
our Company over the years. As the founder, he built up a small
transformer company into the international market leader in
various industry segments. As WPI begins a new chapter in its
corporate history, we will miss his daily leadership and counsel
and wish him all the best in his retirement."
Discussing plans for MPSI, John Allard said, "Back in July, we
announced our intent to build a high-growth future, leveraging
MPSI's core competency in engine diagnostics. The development of
MPSI's E-Technician remote diagnostic system for heavy-duty
vehicles and off-road equipment has progressed rapidly. We now
have a number of pilot programs in an advanced state, and we are
jointly developing E-Technician's remote diagnostic technology
and services with world leaders in the transportation industry.
MPSI is providing the diagnostics expertise in these projects.
Our goal is to be the leading, total-vehicle management system
provider in the world. We believe that E-Technician will
contribute substantial revenue and earnings growth to WPI,
beginning in this fiscal year."
MPSI, located in Sterling Heights, Michigan, is the leading
manufacturer of diagnostic hardware and software for heavy-duty
truck, construction and agricultural vehicles. MPSI is an
industry leader in providing in-shop diagnostic capabilities to
fleet owners and OEMs for heavy-duty vehicle maintenance and
repair operations. When fully developed, E-Technician will enable
companies to perform many of those services remotely, including
reprogramming vehicles' on-board computers to enter new
calibration data and also reading fault codes.
E-Technician will monitor approximately 600 data points on a
vehicle's electronic data bus remotely -- via wireless and
satellite networks --providing real-time analysis for maintenance
and repair technicians. The Company believes E-Technician will
play an essential role in future vehicle service and maintenance,
bringing advanced business value to transport logistic operations
across many industries. WPI will use its considerable in-house
expertise to provide advanced Web-based transportation diagnostic
services to a wide range of customer sets -- OEMs, dealers,
distributors, fleet operators, and the rapidly growing after-
market.
WPI Group, Inc. manufactures and markets high value-added
products used in advanced systems across many industries and
applications. In addition to industry-leading diagnostic hardware
and software for the transportation industry, the Company
currently offers the world's broadest range of rugged, handheld
H/PCs, PCs, notebook computers and terminals designed for use in
harsh environments across a wide array of industries. They also
manufacture avionics components and subsystems, inertial sensors,
panel meters and precision solenoids for a variety of industrial,
medical and consumer products.
The statements contained in this release concerning the company's
goals, strategies and expectations for business and financial
results are "forward-looking statements" based on current
expectations. No assurances can be given that the results in any
forward-looking statements will be achieved and actual results
could differ materially. Please review the reports that the
Company files with the Securities and Exchange Commission for
information concerning factors which could affect the Company's
business.
Exhibit 99.2
WPI Group Releases Details Related to Sale of Power Businesses
Manchester, NH, December 22, 1999: WPI Group. Inc. (WPIC:
NASDAQ/National Market) today announced that the Company has sold
its Warner-based WPI Power Systems and WPI Electronics businesses
to Warner Power, LLC, a private investment group backed by
American Capital Strategies of Baltimore, Maryland. The sale is
valued at approximately $9.3 million in cash plus the assumption
by Warner Power LLC of certain liabilities. Proceeds of the sale
will be booked in WPI Group's fiscal 2000 first quarter, which
ends December 26, 1999. These proceeds will be used to reduce
corporate debt. In addition, as previously stated, the Company
plans to divest its WPI Husky Technology subsidiary, as well as
its Manchester based Instruments business. This is in line with
the Company's stated intention to significantly reduce corporate
debt and to improve shareholder value by restructuring operations
around MPSI and the E-Technician Web-based remote diagnostic
system.
Commenting on the Warner sale, WPI Group President and CEO, John
Allard, said "This divestiture is the first step in our strategy
to build strong revenue and earnings growth based on our ability
to take a leadership position in Web-based services and solutions
for the transportation industry."
WPI Group, Inc. manufactures and markets high value-added
products used in advanced systems across many industries and
applications. In addition to industry-leading diagnostic hardware
and software for the transportation industry, the Company
currently offers the world's broadest range of rugged, handheld
H/PCs, PCs, notebook computers and terminals designed for use in
harsh environments across a wide array of industries. They also
manufacture avionics components and subsystems, inertial sensors,
panel meters and precision solenoids for a variety of industrial,
medical and consumer products.
The statements contained in this release concerning the company's
goals, strategies and expectations for business and financial
results are "forward-looking statements" based on current
expectations. No assurances can be given that the results in any
forward-looking statements will be achieved and actual results
could differ materially. Please review the reports that the
Company files with the Securities and Exchange Commission for
information concerning factors which could affect the Company's
business.
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