FOR IMMEDIATE RELEASE Contacts: Jill Burchill
Chief Financial Officer
August 22, 2000 507/663-8294
Sheldahl, Inc.
[email protected]
1150 Sheldahl Road
Northfield, MN 55057 Jennifer Weichert
Weichert Financial
Relations, Inc.
651/686-9751
[email protected]
SHELDAHL, INTERNATIONAL FLEX TECHNOLOGIES
AND MORGENTHALER PARTNERS CONTINUE TALKS
Northfield, MN, August 22, 2000 - Sheldahl, Inc. (NasdaqNM: SHEL) announced
today that exclusive discussions with International Flex Technologies and
their majority owner Morgenthaler Venture Partners ("Morgenthaler") are
continuing on an exclusive basis. The exclusive discussions, initially
scheduled to terminate August 7, 2000, have once again been extended until
August 30, 2000. Due diligence and negotiations are proceeding. In the
event a transaction is not consummated, the Company will immediately proceed
to initiate other alternatives to strengthen its cash flow and financial
position.
A series of announcements have been issued to keep shareholders abreast of
developments as they occur. On June 26, 2000, the Company announced the
signing of an exclusivity agreement whereby Sheldahl would acquire IFT in
exchange for shares of Sheldahl's common stock. In addition Morgenthaler
Partners and other potential investors proposed to infuse approximately $40
million in new capital into Sheldahl in exchange for shares of a new series
of Sheldahl's convertible preferred stock.
Related to these continuing discussions, on August 15, 2000, Sheldahl
announced that Morgenthaler invested $2 million in the Company through a debt
instrument that is convertible under certain circumstances into common stock
or, in the event Morgenthaler and the Company consummate the equity
transaction currently being negotiated and previously announced, then the
debt will be convertible into shares of the new series of Sheldahl's
convertible preferred stock to be issued in that transaction.
In addition, on August 7, 2000, the Company also announced an initial
extension of the exclusivity agreement and stated that it expects earnings
for its fiscal 2000 fourth quarter to be below analysts' expectations but
slightly improved over last quarter and fourth quarter last year. Softer
than expected sales in Sheldahl's Core business is driving the reduced
expectations and will result in the earnings shortfall and continued cash
tightness. Fourth quarter and full year results are expected to be released
at the end of September 2000.
Morgenthaler is a private equity investment firm with offices in Cleveland,
Ohio and Menlo Park, California, with approximately $1 billion under
management.
Sheldahl is a leading producer of high-density substrates, high-quality
flexible printed circuitry, and flexible laminates primarily for sale to the
automotive electronics and data communications markets. The Company, which is
headquartered in Northfield, Minnesota, has operations in Northfield;
Longmont, Colorado; South Dakota; Toronto, Ontario, Canada; and Chihuahua,
Chih., Mexico. Its sales offices are located in Detroit, Michigan; Hong Kong,
China; Singapore; and Mainz, Germany. Currently, Sheldahl employs
approximately 800 people. Sheldahl's common stock trades on the Nasdaq
National Market tier of the Nasdaq Stock Market under the symbol: SHEL. In
its fiscal year ended August 27, 1999, Sheldahl reported revenues of $122.1
million. Sheldahl news and information can be found on the World Wide Web
at http://www.sheldahl.com
The discussion above contains statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements by their nature
involve substantial risks and uncertainties as described by Sheldahl's
periodic filings. Actual results may differ materially depending on a
variety of factors, including but not limited to the following: the
achievement of Sheldahl's projected operating results, the ability of
Sheldahl to successfully obtain waivers from its lenders for any defaults on
its debt covenants, the achievement of efficient volume production and
related sales revenue results at Longmont, the ability of Sheldahl to
identify and successfully pursue other business opportunities, and Sheldahl
not entering into an agreement with respect to a transaction or any such
transaction not being consummated. Additional information with respect to
the risks and uncertainties faced by Sheldahl may be found in, and the prior
discussion is qualified in its entirety by, the Risk Factors contained in the
Company's filings with the Securities and Exchange Commission, including
Sheldahl's Annual Report, Form 10-K for the fiscal year ended August 27,
1999, Forms 10-Q for the quarters ended November 26, 1999; February 25, 2000,
May 26, 2000 and other SEC filings. Sheldahl does not undertake any
obligation to update any such factors or to publicly announce developments or
events relating to the matters described herein.
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