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U.S. Technologies Inc. Announces Resignation of Kenneth H. Smith and the Sale of its Interest in Technology Manufacturing & Design, Inc.
MARIETTA, Ga., Feb. 18 /PRNewswire/ -- U.S. Technologies Inc. (the ''Company'') (OTC-Bulletin Board: USXX - news) today announced the resignation of Kenneth H. Smith as the Chairman, President and Chief Executive Officer, and as a director, of the Company. The Company also announced the resignation of James C. Melton as a director of the Company. In connection with the resignation of Mr. Smith, the Company has sold to him all of its 51% interest in Technology Manufacturing & Design, Inc. (''TMD''), a Texas corporation engaged in the manufacture of circuit boards for the computer industry. This 51% interest in TMD was purchased by the Company in October of 1998, and the total investment by the Company in TMD was approximately $1,235,000, at the date of the sale to Mr. Smith. TMD was sold to Mr. Smith for the amount of the Company's investment therein. Further, immediately after Mr. Smith's resignation, the board of directors of TMD sought protection for TMD under Chapter 11 of the federal bankruptcy laws.
The Company also announced that Mr. Smith has been succeeded as Chairman, President and Chief Executive Officer of the Company by Gregory Earls, a director of the Company. Mr. Earls is also President of U.S. Viewing Corporation, an investment management company.
Mr. Earls commented that ''In light of the recent bankruptcy of TMD, we, obviously, are very pleased with the sale of TMD to Mr. Smith for the amount of our investment.'' He further commented that ''although we expect the Company to suffer a loss for our fiscal year ended December 31, 1998, due, in part, to the problems at TMD and to the subsequent severance of certain employees of the Company, current management remains very enthusiastic about the prospects of the Company, especially in light of the particular prospects offered by the intended acquisition of Affordable Interior Systems, Inc.''
Mr. Earls stated that ''management is pressing ahead to conclude the previously announced negotiations with U.S. Office Products, Inc. (Nasdaq: OFIS - news) for the purchase of Affordable, which, currently, is the wholly owned subsidiary of U.S. Office Products. As we have also previously announced, Affordable is a manufacturer of modular office furniture, and the Company is currently manufacturing certain furniture components for Affordable at its facilities in Blythe, California.''
The Company anticipates that, upon the completion of the Affordable acquisition, Arthur Maxwell, the President of Affordable, will become the President and Chief Operating Officer of the Company, and Cara Flynn, the Chief Financial Officer of Affordable, will become the Chief Financial Officer of the Company. The Company also anticipates that the board seats vacated by the resignation of Mr. Smith and Mr. Melton will be filled by Mr. Maxwell and by James V. Warren, the former Chairman of the Board of Directors of the Company.
Mr. Earls said that he expects that ''the synergies resulting from the proposed combination of U.S. Technologies and Affordable will permit a significant development of our resources under the PIE Program and will bring significant operating and management expertise to the Company.'' He also expects that the gross revenues of Affordable will be between $22 million and $23 million, for its fiscal year ending in April, 1999. According to Mr. Earls, the compounded growth rate of Affordable's revenues has been approximately 22% per annum, since the inception of Affordable in 1990, and, further, that, since its inception, Affordable has never experienced an unprofitable quarter.
U.S. Technologies Inc., based in Marietta, Georgia, is a national outsourcing company, which solicits labor-intensive work from Fortune 1000 companies, to be performed by its manufacturing subsidiary, Labor-to-Industry Inc. (LTI), or by its service subsidiary, Service-to-Industry Inc. (STI). The Company performs its work utilizing detention facility inmates, under the guidelines of the Prison Industry Enhancement Program (''PIE Program''). The PIE Program, a federal program created by Congress in 1979, is designed to rehabilitate, educate and train inmates, and, thereby, provide them with marketable skills, through their employment in private-sector industry.
For further information contact John P. Brocard at 770-565-4311 or visit the Company's web site at usxx.com.
Certain statements in the release contain ''forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995, which statements can generally be identified by the use of forward-looking terminology, such as ''may,'' ''will,'' ''expect,'' ''estimate,'' ''anticipate,'' ''believe,'' ''target,'' ''plan,'' ''project,'' ''continue,'' or the negatives thereof, or other variations thereon or similar terminology, and are made on the basis of management's plans and current analyses of the Company, its business and the industry as a whole. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. The above factors, in some cases, have affected, and in the future could affect, the Company's financial performance and could cause actual results for 1999 and beyond to differ materially from those expressed or implied in such forward-looking statements, even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
CONTACT: John P. Brocard, Executive Vice President and General Counsel, U.S. Technologies Inc., 770-565-4311
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