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NEWS RELEASE
CONTACT: Jeff Brentano
913 367 2121
NYSE: FDY
ATCHISON CASTING TO BUY BACK
AS MANY AS 1.2 MILLION SHARES
Atchison, Kansas - August 12, 1998 - Atchison Casting Corporation (NYSE:
FDY) today announced that its Board of Directors has authorized a stock
repurchase program of up to 1.2 million shares and is considering an offering of
up to $100 million of senior subordinated notes, subject to market conditions.
The stock repurchases may be made from time to time at prevailing prices in
the open market or in privately negotiated transactions, depending on market
conditions, the price of Atchison shares and other factors. The Company will
make such stock repurchases using internally generated funds and borrowings
under its credit facility, which currently allows repurchases of up to nearly
$3.2 million of Company stock. The Company intends to amend its financing
agreements to permit the repurchases contemplated by this stock repurchase
program, although there can be no assurance as to the amount to which the
lenders will agree. Any share repurchases will be added to the Company's
treasury shares and will be available for reissuance in connection with the
Company's acquisitions, employee benefit plans or for other corporate purposes.
Atchison Casting currently has approximately 8.2 million shares of Common Stock
outstanding.
"This stock buyback program reflects our belief that repurchasing Atchison
Casting Corporation stock is currently an attractive opportunity for the Company
and will enhance shareholder value," said Hugh H. Aiken, CEO. "Our financial
position and outlook enables the Company to both repurchase shares and maintain
sufficient resources to fund internal expansion and pursue acquisitions, as
appropriate," continued Mr. Aiken.
The Company also announced that it is contemplating the issue of up to $100
million of senior subordinated notes through a private placement under Rule
144A, subject to market conditions. If
consummated, the Company expects to use the net proceeds of the offering to
reduce the Company's bank loans, fund future acquisitions and for working
capital and general corporate purposes. The notes will not be registered under
the Securities Act and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements. This
announcement is neither an offer to sell nor a solicitation of an offer to buy
these securities. If the Rule 144A offering is completed it is anticipated that
the Company would subsequently register substantially similar notes to be
offered in exchange for the initial notes by means of a prospectus.
The Company recently reported that net income for the fourth quarter
increased 30.4% to $4.6 million, from $3.6 million in the comparable period last
year. Earnings per share increased to $0.56 from $0.54 in the comparable quarter
last year. Net income for the full year increased 31.2% to $12.8 million, from
$9.7 million in fiscal 1997. Earnings per share were $1.55 in fiscal 1998
compared to $1.67 in fiscal 1997.
Atchison Casting produces metal castings and forgings for a variety of
equipment, capital goods and consumer markets worldwide.
Some statements in this press release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause the actual results of the
Company to be materially different from those anticipated by the forward-looking
statements. Among the factors that could cause different results are: business
conditions and the state of the general economy, particularly the capital goods
industry, the strength of the U.S. dollar and British pound, interest rates,
competition in the casting industry and environmental regulations. Additional
information concerning those and other factors is contained in the Company's SEC
filings, which are available by contacting the Company.