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Photomatrix Announces Plans to Move Its Operation
SAN DIEGO--(BUSINESS WIRE)--April 2, 1998--Photomatrix Inc.
(NASDAQ:PHRX), a manufacturer of high-performance document and
aperture card scanners, Thursday announced that it has entered into a
letter of intent that will relieve the company of its lease obligation
of the facility that houses its San Diego operation and has entered
into a manufacturing agreement with I-PAC Manufacturing Inc. (I-PAC),
which will result in Photomatrix immediately moving its operation into
I-PAC's facility in Carlsbad, Calif.
Photomatrix and I-PAC previously announced that the companies
have entered into a definitive agreement to combine their respective
business operations through a merger, which is subject to, among other
things, shareholder approval and the absence of any material adverse
change in assets, liabilities, personnel, financial conditions or
prospects of the respective companies. The companies anticipate that
the merger will be approved and will close before June 30, 1998.
I-PAC is a value-added contract manufacturer of electrical and
mechanical assemblies, including complex, multi-layer printed circuit
board assemblies, wire and cable harnesses, molded cables, and
complete system and subsystem assemblies.
Photomatrix has entered into a letter of intent to assign the
lease for its Sorrento Valley, Calif. headquarters to another San
Diego-based company. Photomatrix will begin moving its operations to
the I-PAC facility beginning April 8, 1998, and intends to complete
its move before May 31, 1998.
The primary purpose of the agreement with I-PAC is for the
companies to proceed to achieve cost and efficiency gains by having
I-PAC begin manufacturing of Photomatrix's products during the interim
period prior to the closing of the merger. Photomatrix will pay I-PAC
for rented space that it utilizes, and I-PAC will manufacture certain
Photomatrix products. The companies have also agreed upon certain
protections and procedures to rescind the manufacturing agreement in
the event that the merger is not consummated.
"The opportunity to assign our San Diego lease recently came to
our attention," stated Suren G. Dutia, president and chief executive
officer of Photomatrix. "Under the terms of the merger agreement, the
corporate headquarters of Photomatrix is to be relocated as soon as
possible after the close of the merger transaction to the I-PAC
facility. We believe that accelerating this move is in the best
interests of the company's shareholders. Photomatrix and I-PAC will
realize significant cost savings as a result of the assignment of the
San Diego facility lease.
"The consolidation of operations will contribute significantly to
the profitability of the combined operations of Photomatrix and
I-PAC," continued Dutia. "With the completion of this move, we
believe that we will reduce facilities-related costs by more than
$350,000 per year. In addition, we anticipate that further redundant
cost reductions will save the companies an additional $200,000
annually."
Photomatrix previously announced it had reduced its annual
operating costs by more than $400,000, beginning in February.
Photomatrix Inc., with headquarters in San Diego, is a leading
manufacturer of high-performance document scanners and aperture card
scanners serving clients in a broad range of industries such as
service bureaus, insurance, finance, healthcare, utilities, and
government. Complete company and product information can be found at
the company's Web site at www.photomatrix.com.
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This press release contains forward-looking statements that
involve risks and uncertainties. These statements include, without
limitation, statements relating to the company's plans and objectives
for future operations, assumptions and statements relating to the
company's future economic performance, and other non-historical
information. The company's actual results could differ materially from
those discussed herein. Factors that could cause or contribute to such
differences include, without limitation, those risks discussed in Item
6 under the heading "Additional Risk Factors" as well as those
discussed elsewhere in the Company's Annual Report on Form 10-KSB.
CONTACT:
Roy Gayhart, 619/625-4400, Ext. 329
KEYWORD: CALIFORNIA
BW0177 APR 02,1998
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