CITATION CORPORATION
27275 Haggerty Road
Suite 420
Novi, MI 48377
(248) 522-4500
March 16, 2009
Citation Corporation Completes Business Transformation Ahead of Schedule
Turnaround Accomplished Through an Acquisition, Divestitures, New Contracts
Novi, Mich., March 16, 2009 - Citation Corp. today announced completion of its business transformation ahead of schedule, which was highlighted by an acquisition, divestitures and $255 million in new business contracts over life of the programs. The turnaround plan was developed to improve profitability and allow greater diversification and expansion across industrial and transportation markets. More than two-thirds of the new business awards came from outside of the automotive sector.
“We launched this turnaround plan in April 2008 with the expectation of completing it over 15 months. I’m pleased to say we completed it in less than one year,” said Doug Grimm, Citation’s chief executive officer. “The plan was necessary for Citation to remain competitive and secure its leadership position in the marketplace. The initiatives we undertook were focused on rightsizing our automotive capacity, while expanding in emerging markets such as wind energy, agriculture, mining, military and global infrastructure. We did this through a series of divestitures, a strategic acquisition, as well as securing important new business contracts.”
Grimm pointed to several recent actions the company took, including enhancing its lost foam casting capabilities by acquiring Foseco-Morval, the lost foam casting division of Foseco, a Division of the Vesuvius Group, a leading worldwide supplier of metallurgical chemicals to the foundry industry. “The acquisition of Foseco-Morval strengthens our position as the technology and market leader for lost foam castings, which provides cost savings and weight reduction, and has helped create new business opportunities,” said Grimm.
Secondly, in its efforts to improve operating efficiencies and focus on its core iron casting and machining business, Citation divested its aluminum die-cast operations in Grand Rapids and Lowell, Mich., on March 13 to Compass Automotive Group LLC, a leading provider of aluminum and magnesium component solutions for automakers and Tier One suppliers.
Citation also garnered $255 million in sales contracts from 71 customers across all markets, demonstrating its diverse customer base. “No customer will be greater than nine percent of Citation’s revenue base in 2009, which is critical during this recessionary downturn,” noted Grimm.
Finally, the company closed its Lufkin, Texas, foundry on February 27. Select products were transferred to the company’s Brewton, Ala., facility in order to improve capacity utilization and optimize Citation’s manufacturing footprint. “While this decision was extremely difficult, it allowed us to rightsize our automotive capacity with demand,” added Grimm.
“All of the key initiatives of our plan, including the company’s recently amended bank agreement, cement Citation’s position as one of the most diversified foundries in North America, and we remain a strong industry competitor that produces innovative and superior products that continue to meet customers’ needs,” said Grimm.
Citation is a privately held corporation headquartered in Novi, Michigan. Citation employs 1,533 people at ten manufacturing facilities in Alabama, Indiana, North Carolina and Wisconsin. The company designs, develops and manufactures high-quality cast, machined and assembled components for the transportation and industrial markets.
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For more information, contact: Jennifer Lee, The Millerschin Group at 248-276-1970
jlee@millerschingroup.com