Kreisler Manufacturing Corporation Announces Expansion of Production Capabilities in Poland; Capital Investment Expected to Drive Incremental Revenue Growth
ELMWOOD PARK, N.J., Sept. 30 /PRNewswire/ – Kreisler Manufacturing Corporation (OTC: KRSL.PK) announced today a strategic capital investment project at its Kreisler Polska subsidiary that will expand the Company’s manufacturing and production capabilities in Poland, with the goals of enhancing competitiveness and generating long-term revenue growth. The planned expansion, projected to be completed by December 2012, underscores Kreisler’s growing presence in Europe and the Company’s commitment to provide its customers with additional capacity to meet their growing needs.
The Kreisler Polska expansion, which will include a new 60,000-square foot manufacturing facility in Niepo?omice, Poland, will significantly enhance its tube and manifold assembly capabilities as well as production and machining capacity, complementary to Kreisler Industrial’s U.S. capabilities and extensive product offerings.
Kreisler CEO Michael Stern commented, “These actions are designed to enhance our competitive position as well as enable Kreisler to compete for expanded market share leading to revenue growth. Additionally, by extending and complementing capacity at Kreisler Polska we will be well positioned to meet growing demand internationally.”
Consistent with this approach, Kreisler entered into a 10-year long-term agreement (“LTA”) involving two customers. Under the LTA, over 1,000 part numbers, which are currently produced by these customers, will be produced at Kreisler Polska’s new facility. In connection with the LTA, Kreisler entered into an Equipment Purchase and Sale Agreement with a third customer to purchase certain manufacturing and assembly equipment needed for Kreisler Polska to produce tube and manifold assemblies of multiple sizes and configurations.
The purchase and transfer of these assets, as well as the full transfer of the manufacturing of these customers’ part numbers to Kreisler under the LTA, is expected to be completed by March 2012. Previously, Kreisler has not manufactured any of the components for these two customers in Poland.
“The capacity expansion and supporting long-term agreements enhances our ability to deliver the next generation of turbine engines and demonstrates our organizations strong commitment to our customers,” added Ned Stern, Kreisler’s CFO. “The expansion is a significant business growth opportunity and we appreciate the support and assistance provided by the European Union and the Polish Enterprise Development Agency to make this project a reality. We look forward to a great partnership with this community for many years to come.”
The capital investments reflect expected aggregate expenditures of 42,000,000 PLN (approximately $12,371,000 at June 30, 2010 exchange rate), of which 20,100,000 PLN (approximately $5,920,000 at the exchange rate as of June 30, 2010) of specific qualified capital expenditures is expected to be funded through outright grants from the Polish Enterprise Development Agency. To date, the Company has invested towards these initiatives approximately 13,400,000 PLN (approximately $3,950,000 at the exchange rate as of June 30, 2010) and has received 1,100,000 PLN in grants (approximately $324,000 at the exchange rate as of June 30, 2010). Additional funding is anticipated from the Company’s own financial resources and debt. The Company presently has no bank debt. There are no assurances the Company will be able to secure adequate debt funding given the current economic environment and the Company’s recent financial performance.
Fiscal 2010 Year-End Consolidated Financial Results Filed
Earlier today, the Company filed its consolidated financial statements on Form 15c2-11 for the fiscal year ended June 30, 2010. An electronic copy of Kreisler’s 2010 consolidated financial statements is available for download at either http://www.otcmarkets.com/stock/KRSL/financials or from the Investor Relations section of the Company’s website at http://www.kreislermfg.com/investors. Stockholders and other investors are urged to read these results in connection with today’s announcement.
Kreisler Polska presently machines components for aerospace, industrial gas turbines and industry. As a machining contractor it offers turning, milling and EDM services. Kreisler Industrial will continue, as it has for over 50 years, to manufacture tube and manifold assemblies as well as continuing investment in new tooling and equipment required for the manufacture and sale of products with increased complexity and higher value added.
The Company is a manufacturer of precision metal components and assemblies for use in military and commercial aircraft engines and industrial gas turbines. These products primarily include tube and manifold assemblies. The Company includes two wholly owned subsidiaries: Kreisler Industrial Corporation located in Elmwood Park, New Jersey, and Kreisler Polska Sp. z o.o located in Krakow, Poland.
Certain oral statements made by management of Kreisler Manufacturing Corporation, Kreisler Industrial Corporation and Kreisler Polska Sp. z o.o (collectively, the “Company” or “Kreisler”) from time to time and certain statements contained herein with respect to results of operations and the business of the Company are “forward-looking statements.” All such statements, other than statements of historical facts, including those regarding market trends, the Company’s financial position and results of operations, business strategy, projected costs, and plans and objectives of management for future operations, are forward-looking statements. In general, such statements are identified by the use of forward-looking words or phrases including, but not limited to, “estimates,” “intended,” “will,” “should,” “may,” “believes,” “expects,” “expected,” “anticipates,” and “anticipated” or the negative thereof or variations thereon or similar terminology. These forward-looking statements are based on the Company’s current expectations. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. These forward-looking statements represent the Company’s current judgment. The Company disclaims any intent or obligation to update its forward looking statements. Because forward-looking statements involve risks and uncertainties, the Company’s actual results could differ materially from those set forth in or underlying the forward-looking statements.
SOURCE Kreisler Manufacturing Corporation