ThermaCell to Acquire American Paints for
$1 Million
To Add $2.5 Million in Revenues, $200,000 in Operating Profit
FORT LAUDERDALE, Fla., Sept. 23 /PRNewswire/ -- ThermaCell Technologies, Inc.(Nasdaq: VCLL - news, VCLLW - news) has signed a letter of intent to acquire American Paints, Inc. of nearby Pompano Beach for a combination of $1 million in cash and stock. For the year ended December 31, 1997, privately held American Paints generated approximately $200,000 in operating profit on $2.5 million in revenues. The acquisition is subject to customary due diligence and the execution of a definitive agreement.
John Pidorenko, Chairman, President and CEO of ThermaCell, said the acquisition will enable ThermaCell to gain sufficient revenue and operating leverage to become profitable, starting the first fiscal quarter ending December 31, 1998, assuming the deal closes within 60 days. Mr.Pidorenko said that by consolidating operations, ThermaCell could reduce American Paints' costs by $300,000-$400,000, increasing its operating contribution to ThermaCell to as much as $500,000-$600,000 in Fiscal 1999.
Mr. Pidorenko said the acquisition also would improve ThermaCell's distribution network across the Sunbelt states, in order to expand sales, and improve economies of scale in raw materials purchasing, in order to expand gross profit margins. Founded in the late 1970s, American Paints manufactures and markets specialty roof and metal coatings through its own retail outlet, a network of distributors, and on a direct basis to regional contractors.
Mr. Pidorenko said ThermaCell was in preliminary acquisition discussions with other Sunbelt paint and coatings manufacturers and distributors. ThermaCell, which is based in Sarasota, FL, has been consolidating Sunbelt paint companies in order to create a profitable platform that can be used to generate new, high-margin revenues from ThermaCell's innovative microsphere technology. Microspheres are uniform, hollow, glass bubbles that look like fine, white sand. Mixed in paints, coatings and other building materials, microspheres create a barrier that can be more effective and less expensive than conventional insulation.
American Paints is ThermaCell's fourth acquisition in three years. ThermaCell acquired C. F. Darling Paint & Chemicals of Holiday, FL in 1995, Atlas Chemical of Miami in 1997, and Ladehoff Paint of Phoenix in March 1998. Following the Ladehoff acquisition, ThermaCell began to purchase equipment for a prototype microsphere facility in order to increase production of its ThermaCool line of insulation enhanced paints and generate sales of microspheres to chemical products distributors. Completion of the plant is expected during the first quarter and will also help ThermaCell generate significantly higher revenues in fiscal 1999.
For the nine months ended June 30, 1998, ThermaCell sales increased 227% to $2,259,814 compared to the year ago period while net loss dropped to $238,354 or $0.08 per basic share compared to a net loss of $866,104 or $0.50 per share in the year ago period.
As previously reported, tests on ordinary shingles on Florida homes painted with ThermaCool Roof Coating dramatically reduced temperatures by more than 30%, reducing wear on the roof outside and air conditioning needs inside. NASCAR Racing Teams report that ThermaCool Racing Products reduce the extraordinary heat in driver compartments by 50-60%, reducing wear on equipment as well as drivers. For more information, contact ThermaCell investor relations at 212-527-4808 or visit the website www.thermacell.com.
Forward-Looking Statements: This news release contains certain ''forward-looking'' statements within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a new ''safe harbor'' for these types of statements. To the extent statements in this news release involve, without limitation, product development and introduction plans, the Company's expectations for growth, estimates of future revenue, expenses, profit, cash flow, balance sheet items, sell-through or backlog, forecasts of demand or market trends for the Company's product categories and for the industries in which the Company operates, or any other guidance on future periods, these statements are forward-looking statements. The Company assumes no obligation to update forward-looking statements.
SOURCE: ThermaCell Technologies, Inc. |
