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EXHIBIT 99.1
PRESS RELEASE
For Immediate Release
TELEX COMMUNICATIONS, INC. ANNOUNCES
PRELIMINARY $7.7 MILLION ARBITRATION RULING,
RECEIPT OF CASH PAYMENT FOR SALE OF ALTEC LANSING TRADEMARK AND ROYALTIES
AND RESTRUCTURING OF OPERATIONS
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MINNEAPOLIS, MINNESOTA (JUNE 2, 2000): Telex Communications, Inc. announced
yesterday at a meeting of its bond holders in New York, NY the receipt of a
preliminary arbitration ruling on Friday, May 26, 2000 entitling Telex to a
payment of $7.7 million in connection with a dispute arising out of Telex's
purchase of Mark IV Industries' Audio Products Group in December 1996. Payment
of the arbitration award, together with interest of approximately $2 million,
remains subject to finalization of the arbitration decision under the terms of
the parties' binding arbitration agreement.
Telex also received a $9.6 million cash payment on May 19, 2000 for all
previously disclosed outstanding receivables related to Altec Lansing royalty
fees and the sale of the trademark.
The Company also announced the anticipated opening in mid-June 2000 of
its new manufacturing facility in Morrilton, Arkansas. Existing manufacturing
facilities in Austin, Texas and Newport, Tennessee will be closed and operations
will be relocated to Morrilton, Arkansas. In addition, the Sevierville,
Tennessee manufacturing facility will be closed and operations relocated to
existing manufacturing facilities in Glencoe, Minnesota, Lincoln, Nebraska, and
Hermosillo, Mexico.
Telex will relocate its Minneapolis corporate headquarters to a larger,
leased facility in Burnsville, MN in mid-July 2000 to accommodate the
consolidation and relocation of corporate functions currently based in Buchanan,
Michigan. The sale of Telex's existing corporate headquarters building in
Minneapolis, Minnesota is expected to close in late July 2000.
The relocation and consolidation of manufacturing and corporate
operations, presently underway and expected to be completed over the next nine
to twelve months, will require net capital expenditures of approximately $4 to
$5 million in 2000 and a temporary increase in inventory estimated at $5
million. Telex expects to recognize a restructuring charge in the range of $7 to
$8 million in the second quarter of 2000 in connection with these activities. In
addition, the Company expects to incur other merger-related costs that will be
paid over the next twelve months.
Once completed, the relocation and consolidation activities are
expected to result in improved efficiencies and cost reductions in the range of
$15 to $20 million annually.
Telex Communications, Inc. is a leader in the design, manufacture and
marketing of sophisticated audio, wireless, multimedia, aircraft, broadcast and
communications equipment for commercial, professional and industrial customers.
Telex markets its products in more than 80 countries under the brands
Electro-Voice(R), Telex(R), RTS(TM), Dynacord(R), Midas(R), Klark Teknik(R),
University Sound(R) and others. Revenue was $344 million for the year ended
December 31, 1999.
This press release contains certain forward-looking statements that are
based on management's current opinions, beliefs or expectations as to future
results or events. While made in good faith and with a reasonable basis based on
information currently available to management, there is no assurance that such
opinions, beliefs or expectations will be achieved or accomplished. Various
factors such as known and unknown risks and uncertainties could cause actual
results and events to vary significantly from those expressed in any
forward-looking statement.
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Such types of statements are made under the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. The Company does not undertake
to update, revise or correct any forward-looking statements to the extent it
becomes aware that they will not be achieved for any reason. For further
discussion of forward-looking statements and factors which can impact future
results and events, please refer to the Company's Report on Form 10-K for the
year ended December 31, 1999, and other Company filings with the Securities and
Exchange Commission.
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