EXHIBIT 99
NEWS RELEASE
UNITED INDUSTRIAL CORPORATION
570 LEXINGTON AVENUE, NEW YORK, NY 10022
CONTACT: SUSAN FEIN ZAWEL
VICE PRESIDENT CORPORATE COMMUNICATIONS
(212) 752-8787
FOR IMMEDIATE RELEASE
UNITED INDUSTRIAL TO SELL TRANSPORTATION SYSTEMS BUSINESS
COMPANY CONTINUES TO FOCUS ON CORE COMPETENCIES IN DEFENSE, AEROSPACE
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New York, NY, September 6, 2000 - United Industrial Corporation (NYSE: UIC)
today announced that it has signed a definitive agreement to sell its
Transportation Systems business to RailWorks Corporation (NASDAQ: RWKS).
The divestiture of the Company's transportation operations is an important step
in its continuing strategy to drive long-term growth by focusing on its core
competencies in the defense and related industries. The sale will enable United
Industrial to allocate greater attention and resources to its defense
businesses, while enhancing liquidity. Last month, the Company announced an
agreement to sell its Symtron Systems subsidiary, which specializes in
firefighter training systems.
The sale includes both United Industrial's equity interest in Electric Transit,
Inc. (ETI), a joint venture between its AAI subsidiary and the Czech firm Skoda,
as well as contracts with the San Francisco Municipal Railway, New Jersey
Transit Authority, Maryland's Mass Transportation Authority and the Washington
Metropolitan Area Transit Authority. The primary consideration to be received
for the transaction is the assumption by RailWorks of certain liabilities of the
transportation business including performance bonds. United Industrial will also
retain certain assets including real estate and a note receivable from ETI.
United Industrial expects to record a one-time after tax charge of approximately
$10 million, or $.80 per diluted share. This transaction is expected to close
within the next 60 days and will be accounted for as a discontinued operation in
the third quarter.
"This transaction marks an important step forward as we continue to build United
Industrial as a leading defense contractor in niche markets," said Richard
Erkeneff, President and Chief Executive Officer. "With the sale of
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Transportation Systems, we will be better able to focus both our efforts and
financial resources on building our core businesses. The divestiture will free
up working capital that would have been utilized to complete the transportation
contracts, and will facilitate the refinancing of our bank agreements to provide
greater financial flexibility.
"We recognize that United Industrial's greatest competitive strengths lie in the
defense area. Our defense-related businesses - from Unmanned Aerial Vehicles to
Simulation and Test Systems to Engineering and Maintenance Services -- are
performing well, and they enjoy many exciting opportunities. We will continue to
invest in these businesses and consider targeted acquisitions to reinforce or
expand our capabilities in our core markets, in order to maximize value for
United Industrial shareholders over the long term. In addition, we are pleased
that RailWorks will be the new owners because of their dedication to the
transportation industry and desire to grow the business."
The transaction is subject to customary closing conditions, including obtaining
certain third party consents and governmental approvals.
RailWorks Corporation, based in Baltimore, Maryland, is an integrated network of
companies consisting of construction, maintenance and materials suppliers, and
offers a full range of products and services for the rail industry throughout
North America.
United Industrial Corporation is a company focused on the design and production
of defense, training, and energy systems. Its products include unmanned aerial
vehicles, training and simulation systems, automated aircraft test and
maintenance equipment, and ordnance systems. The Company also offers
logistical/engineering services for government-owned equipment and manufactures
combustion equipment for biomass and refuse fuels.
Except for the historical information contained herein, information set forth in
this news release may contain forward looking statements subject to risks and
uncertainties which could cause the Company's actual results or performance to
differ materially from those expressed or implied in such statements. For
additional information about the Company and its various risk factors, reference
is made to the Company's most recent Annual Report on Form 10-K as filed with
the Securities and Exchange Commission.
For more information, please visit United Industrial's web site at
www.unitedindustrial.com.
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