EXHIBIT 99.1
INTERMET CORPORATION
5445 Corporate Drive
Troy, MI 48098-2683
Tel: 248-952-2500
Fax: 248-952-2501
[INTERMET CORPORATION LOGO]
NEWS RELEASE
For IMMEDIATE Release
Investor Inquiries: Bytha Mills
Media Inquiries: Mike Kelly
INTERMET Corporation
248-952-2500
INTERMET FILES VOLUNTARY PETITION FOR CHAPTER 11 REORGANIZATION
SECURES DIP FINANCING COMMITMENT
OPERATIONS TO CONTINUE UNINTERRUPTED
TROY, Michigan, September 30, 2004 -- INTERMET Corporation (Nasdaq: INMT) today
announced that the company has filed for voluntary Chapter 11 reorganization
with the U.S. Bankruptcy Court in the Eastern District of Michigan. The company
expects manufacturing operations to continue without interruption during the
reorganization proceedings. INTERMET's European operations are not included in
the Chapter 11 filing.
The Chapter 11 filing is in response to the unprecedented rise in raw-material
costs, especially for scrap steel, in North America and Europe. INTERMET's cost
of scrap steel has increased from an average of approximately $160 per ton at
the beginning of 2003 to approximately $395 per ton at the end of August 2004.
The company announced on September 17, 2004, that raw-material price increases
have been the major contributor to a projected loss for the third quarter of
2004.
To finance its operations to continue the uninterrupted supply of products to
its customers, INTERMET has applied to the Bankruptcy Court for interim use of
cash collateral with the consent of the agent for the lenders that have a
security interest in the cash. The company believes that this source of funds,
if permitted for use by the Bankruptcy Court, should be sufficient to operate
the business at least through mid-October.
To strengthen its liquidity, INTERMET has been negotiating secured
debtor-in-possession (DIP) financing packages of up to $50 million in principal
amount with various of its pre-petition lenders. One firm commitment and another
detailed proposal have been received and are under review by the company, with
resolution expected in a matter of days. In either case, the DIP financing would
be subject to various conditions, including satisfactory results of a due
diligence investigation and approval by the Bankruptcy Court. Approval by the
pre-petition lenders also might be required.
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INTERMET Corporation
September 30, 2004
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Gary F. Ruff, Chairman and CEO of INTERMET, said, "After a thorough review of
our options, we decided to file under Chapter 11 because it provides a measure
of stability and the best protection to all our constituents by allowing us to
pursue a comprehensive restructuring. The company thus far has made every effort
to mitigate the rise in the cost of raw materials, especially scrap steel.
However, we operate within an extraordinarily competitive industry already
challenged by relentless price and margin compression. When you add in
unprecedented raw-material cost increases, it creates a situation that must be
addressed."
INTERMET and its financial advisor Conway MacKenzie & Dunleavy are developing a
restructuring plan, which will be subject to confirmation by the Bankruptcy
Court. This plan will be the culmination of a complete review of the company's
current financial condition along with an extensive evaluation of manufacturing
operations in North America. INTERMET's restructuring plan will encompass
raw-material cost-recovery practices that will be developed in cooperation with
its customers and that more accurately reflect current market conditions;
improvements in the company's manufacturing operations; and a revised capital
structure.
About INTERMET
With headquarters in Troy, Michigan, INTERMET Corporation is a manufacturer of
powertrain, chassis/suspension and structural components for the automotive
industry. The company has approximately 6,000 employees worldwide. More
information is available on the Internet at www.intermet.com.
Cautionary Statement
This news release includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The words and phrases
"expects," and "should be," and similar expressions, identify forward-looking
statements. These statements are not guarantees of future performance but
instead involve various risks and uncertainties. INTERMET's actual results may
differ materially from those suggested by its forward-looking statements due to
factors such as: the economic cost, management distraction and lost business
opportunities associated with bankruptcy proceedings; INTERMET's ability to
consummate DIP financing on acceptable terms, or at all, from its pre-petition
lenders or other possible funding sources; the high cost of scrap steel and the
possibility that scrap steel costs will remain at high levels or continue to
increase, which would have further negative effects on INTERMET's profitability,
cash flow, liquidity and ability to borrow; fluctuations in the cost of other
raw materials, including the cost of energy, aluminum, zinc, magnesium and
alloys, and INTERMET's ability, if any, to pass those costs on to its customers;
pricing practices of INTERMET's customers, including changes in their payment
terms resulting from the discontinuation of early payment programs and
continuing demands for price concessions as a condition to retaining current
business or obtaining new business, and the negative effect that price
concessions have on profit margins; changes in procurement practices and
policies of INTERMET's customers for automotive components, including the risk
of the loss of major customers or the loss of current or prospective vehicle
programs as a result of
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INTERMET Corporation
September 30, 2004
Page 3
INTERMET's financial condition and prospects (or otherwise); possible inability
to close unprofitable plants or to transfer work from one plant to another
because of the related costs or customer requirements; general economic
conditions, including any downturn in the markets in which INTERMET operates;
fluctuations in automobile and light and heavy truck production, which directly
affect demand for INTERMET's products; deterioration in the market share of any
of INTERMET's major customers; fluctuations in foreign currency exchange rates;
work stoppages or other labor disputes that could disrupt production at
INTERMET's facilities or those of its customers; continuing changes in
environmental regulations to which INTERMET is subject, and the costs INTERMET
will incur in meeting more stringent regulations; factors or presently unknown
circumstances that may result in impairment of INTERMET's assets, including
further write-downs of its goodwill; and other risks as detailed from time to
time in INTERMET's periodic SEC reports.
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