September 20, 2004

CITATION CORP. FILES TO RESTRUCTURE DEBT

BIRMINGHAM, Ala. - Citation Corp. has filed for Chapter 11 protection in U.S. Bankruptcy Court in Birmingham, a step management described as necessary to put the company back on the road to strength and profitability.

"Chapter 11 will allow us to work with our customers and creditors to solve some of the extreme cash flow problems we've suffered due to a sluggish economy, reduced orders and unprecedented increased costs of steel and other materials," said Ed Buker, Citation's President and Chief Executive Officer.

Buker said the quality of product and delivery to customers will remain high priorities while Citation begins implementing operational efficiencies needed to strengthen the company.

Citation is a privately held corporation headquartered in Birmingham, Ala. Through its subsidiaries, the company designs, develops and manufactures high-quality cast, forged, and machined components for several market segments, including the automotive, heavy truck, construction, aerospace, agricultural and commercial industries. Citation operates 17 facilities in Alabama, Indiana, Wisconsin, Michigan, Illinois, Texas, and North Carolina. The company employs 5,100.

Citation's aluminum and iron castings and steel forgings are used in a wide variety of applications, including braking, steering, engine and drive train parts for passenger cars and light trucks; suspension and transmission parts for heavy trucks; ground engaging tools for construction equipment; parts for aircraft engines, landing gear and structural airframes; and other critical parts for capital and durable goods.

While all steel purchasers have been suffering from record steel prices, Citation has been particularly hard hit. In the last 18 months, the price of steel scrap - the primary raw material used to make ferrous cast and forged products, which account for half of Citation's sales - escalated from a traditional price of $150 per ton to more than $400 per ton.

"Due to these unprecedented and unexpected price escalations, we've found it difficult to maintain sufficient operating capital," Buker said. "Although some of our customer relationships include provisions for sharing cost increases for steel scrap, agreements with several of our largest customers have no such provisions.

"We will now be able to devote more capital to improving our products and processes, which is critical to assure our future as a competitive company," he said.

Citation was publicly traded through the 1990s but taken private in early 2000 by a New York-based investment firm.

For more information, contact Gene Monteith at 205-271-7441