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Thursday August 21 10:46 AM EDT
Company Press Release
Source: Lunn Industries, Inc.
Lunn Industries, Inc. Merger With Technical Products Group, Inc.
GLEN COVE, N.Y., Aug 21 /PRNewswire/ -- Lunn Industries, Inc. (Nasdaq:
LUNN) announced today that its Board of Directors has unanimously
approved moving forward with the stock-for-stock merger with TPG
Holdings, Inc., which it had announced in May. TPG is a private company
primarily engaged in the business of designing, developing and
manufacturing advanced composite material products for the aerospace and
defense industries. The two companies had entered into an Acquisition
Agreement and Plan of Merger in June pursuant to which it is
contemplated that TPG will be merged with and into Lunn through the
exchange of each company's stock such that the Lunn stockholders would
retain approximately 26% of the combined entity on a fully diluted
basis. Based on the relative financial performance of Lunn and TPG
during the first six months of 1997, Lunn and TPG have agreed to amend
the Merger Agreement to provide that upon consummation of the merger, in
addition to the issuance of stock, there shall be issued to Lunn
additional shares of the combined company's stock in the event that
TPG's 1997 net income is below a certain threshold. The shares issuable
as contingent stock consideration would increase the currently
contemplated 26% ownership by Lunn stockholders of the combined company
on an incremental basis based on how much TPG's 1997 net income falls
below the threshold. The contemplated merger still remains subject to
the approval of the Lunn and TPG stockholders, certain regulatory
approvals and a number of other customary conditions.
The following sets forth selected historical financial statements for
TPG and Lunn as well as the pro forma financial statements of the
combined company as if the merger had been effected January 1, 1996, for
the 1997 second quarter periods and the six months ended June 30, 1997.
Fiscal Quarter Ended
June 21 June 30 July 4 June 30
1996 1996 1997 1997
Hist. Hist. Comb. Hist. Hist. Comb.
TPG Lunn Profrma TPG Lunn Profrma
(In thousands)
Revenues $ 30,704 $ 4,642 $ 35,346$ 28,100 $ 5,705 $ 33,816
Gross Profit 7,576 962 8,838 6,906 1,356 8,262
Income from
Operations 2,906 308 3,148 2,213 542 2,688
Net income
(loss) $1,387 $201 $1,541 $1,049 $413 $1,321
Income (loss)
per share $2.89 0.02 $0.31 $2.10 $0.03 $0.24
Weighted average
shares
Outstanding 480,000 13,218,710 4,959,518 500,000 13,355,951 5,482,327
Six Months Ended
June 21 June 30 July 4 June 30
1996 1996 1997 1997
Hist. Hist. Comb. Hist. Hist. Comb.
TPG Lunn Profrma TPG Lunn ProFrma
(In thousands)
Revenues $ 57,752 $ 8,855 $66,607 $ 51,932 $ 10,726 $ 62,658
Gross Profit 14,296 1,912 16,208 11,992 2,487 14,479
Income from
Operations 4,508 518 4,928 2,372 858 3,132
Net income
(loss) $2,028 $295 $ 2,240 $853 $648 $1,227
Income (loss)
per share $4.25 $0.03 $0.45 $1.71 $0.05 $0.22
Weighted average
shares
Outstanding 477,250 9,012,769 4,953,788 500,000 13,285,299 5,482,327
As of As of
July 4,1997 June 30,1997
Historical Historical Combined
TPG Lunn Pro Forma
(In thousands)
Working Capital $ 18,059 $ 6,517 $ 23,376
Total Assets 46,101 21,269 72,270
Long-term liabilities 14,000 7,743 21,743
Redeemable 8% Cumulative Preferred
Stock 1,000 -- 1,000
Stockholders' Equity $7,871 $11,905 $23,476
The Board of Directors of Lunn believes that the merger with TPG will
enhance stockholder value over the long term as a result of a number of
factors, including the combined company's increased market
capitalization which may permit the combined company's common stock to
be listed for trading on the NASDAQ National Market System, its
prospects for future growth, its greater geographic scope and
diversification of revenue sources.
Lunn Industries, Inc. and its wholly owned subsidiary, Alcore, Inc., are
diversified manufacturers of composite structures, bonded assemblies and
aluminum honeycomb for aerospace, transportation, construction,
electronics and defense industries.
SOURCE: Lunn Industries, Inc.
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