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American Business Products, Inc. EXHIBIT 99
P.O. Box 105684
Atlanta, Georgia 30348
(770) 953-8300
CONTACT: LARRY GELLERSTEDT, CEO FOR IMMEDIATE RELEASE
RICHARD G. SMITH, CFO
ABP DIVESTS EUROPEAN JOINT VENTURE;
PURSUES NEW SOFTWARE SOLUTION FOR U.S. SUBSIDIARY
ATLANTA, May 13, 1998 -- American Business Products, Inc. (NYSE:ABP) has sold
its investment in the Company's European envelope manufacturing joint venture,
Curtis 1000 Europe GmbH. In addition, ABP has decided to pursue a new, less
costly solution for a computer improvement process at Curtis 1000 Inc., an ABP
U.S. subsidiary.
These announcements were made today by ABP's chairman and chief executive
officer, Larry Gellerstedt, III. Mr. Gellerstedt was named ABP president and CEO
on March 30, and was elected chairman May 8.
"We continue to be interested in developing global markets for the ABP
companies," said Mr. Gellerstedt. "But our European joint venture was not
structured in the best way to create value for ABP's shareholders."
Mr. Gellerstedt added, "We plan to continue to work with our former European
partner in envelope marketing and technology to the benefit of our business and
customers."
ABP accounted for its joint-venture investment using the equity method. In
recent years, the joint venture's contribution to ABP's income has not been
material. ABP's net proceeds from the joint-venture sale will total
approximately $4.8 million. The Company expects to book a loss on the sale of
approximately $1.4 million after taxes, which will be recorded in the second
quarter of 1998.
NEW COMPUTER DIRECTION FOR CURTIS 1000
The decision to pursue a less costly computer improvement process is related to
a continuous corporate improvement program at Curtis 1000 Inc., ABP's largest
office products subsidiary. The goal of the program, which was initiated in
1995, is to sharpen Curtis 1000's competitive edge as the leading direct
marketer of office and business supplies to small and medium-sized companies in
the U.S.
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Curtis 1000 has made significant changes under the corporate improvement
program. For example, the number of manufacturing plants has been reduced from
17 to five. Corporate overhead also has been reduced, and most decisions are now
being made at the regional level close to the customer.
In the customer-service area, Curtis 1000 had been developing a new
custom-designed software system to simplify order entries. After extensive
review, the Company has decided to discontinue this project in favor of software
packages that are now available on the market.
"We have some new options with third-party vendors that we didn't have before,"
said Mr. Gellerstedt. "We are confident that we can put these options to work
and, more importantly, provide best-of-class service for Curtis 1000 customers."
ABP expects to record a charge of approximately $3.0 million after taxes in the
second quarter of 1998 to write off Curtis 1000's former order-entry systems
project.
Gellerstedt noted the positive efforts being made at Curtis 1000 to complete its
three-year focus on performance and productivity improvement. "At ABP,
operational excellence is everything. Adoption of a packaged software approach
to order processing will give Curtis 1000 a disciplined way to define processes,
determine best practices and meet customer demands. All of these steps are
critical in reaching and sustaining operational excellence."
American Business Products, Inc. is a leading supplier of custom printing
services to growing niche markets. ABP operates through subsidiaries whose
products and services are: BookCrafters USA, Inc., a full-service producer of
short- and medium-run book printing, binding and distribution; Curtis 1000 Inc.,
a leader in direct-to-user marketing of custom-printed envelopes and labels,
digital document services and business forms; Discount Labels, Inc., the largest
short-run custom label producer in the U.S.; International Envelope Company, the
world's largest converter of Tyvek(R) envelopes and manufacturer of other
specialty envelopes and filing systems; and Jen-Coat, Inc., a leader in
specialty extrusion coating and laminating of packaging and other products.
Private Securities Litigation Reform Act of 1995 Safe Harbor Statement: Except
for historical information contained herein, the matters set forth in this news
release including but not limited to statements regarding the Company's
expectations, hopes, intentions or strategies regarding the future are forward
looking statements that involve certain risks and uncertainties that could cause
actual results to differ materially from those in the forward looking
statements. The Company assumes no obligation to update any such forward looking
statements. The Company's expectations respecting future sales and profits
assume, among other things, reasonable continued growth in the general economy
which affects demand for the Company's products. Future profits
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may vary from the Company's expectations due to factors such as possible future
adjustments to the Company's profit improvement plans, particularly at Curtis
1000 Inc., as the effects of implementing these plans are realized. Although the
Company believes its plan to achieve timely Year 2000 compliance is reasonable,
it remains possible that, dependent on future events such as availability in the
labor force of information systems programmers and other information systems
personnel, responsiveness of third parties beyond the Company's control such as
system vendors, service suppliers, and others with whom the Company interacts,
achieving Year 2000 compliance may take longer or cost more than the Company
presently anticipates. Investors are also advised to consider other risks and
uncertainties that are discussed in periodic reports filed by the Company with
the Securities and Exchange Commission.