Global Power Announces Several Initiatives to Reduce Indebtedness and Structure for Profitable Growth
August 01 2016 - 8:00AM
Global Power Equipment Group Inc. (OTC:GLPW) (“Global Power”) today
announced that it has undertaken several initiatives to restructure
its operations, lower its operating costs and reduce indebtedness.
On July 29, 2016, the Company sold the stock of TOG Holdings,
Inc., a wholly-owned subsidiary, for $6 million in cash to
Doncasters Group, subject to traditional post-closing working
capital adjustments, escrow withholdings and disposition
expenses. Part of the Mechanical Solutions Products segment,
TOG manufactures fastener and valve-related repair and replacement
products for steam and natural gas turbines. Proceeds from
the sale of TOG will go towards reducing indebtedness.
The Company is also in the process of selling its Braden Mexico
facilities, an approximate 150,000 square foot manufacturing
facility that had supported fabrication of auxiliary equipment for
utility-scale natural gas turbines. The manufacturing that
had historically occurred at Braden Mexico will be consolidated
into the Company's global network of outsource manufacturing
partners. In addition, the Company is evaluating other real
estate assets for potential sale to enable further debt
reduction.
Terence J. Cryan, Global Power's President and CEO, commented,
"We have made solid progress in our restatement process and the
improvement of our internal controls. In addition, we have
had to attend to other challenges involving our Products segment’s
businesses. For one, we have been working on enhanced
integration of the acquisitions that formed our Electrical
Solutions product category. Also, the closure of the Braden
Mexico manufacturing facility will eliminate unnecessary fixed
costs and further leverage our successful outsourced manufacturing
model that has been integral to our overall Braden operations for
many years. Braden will continue to maintain active
operations in Mexico with an engineering, execution and sales
office. Finally, the divestiture of TOG permits us to focus
more on the core businesses of our Products segment, while repaying
some debt. In the meantime, our Services segment continues to
provide a broad breadth of quality maintenance and specialty
services and solutions to our power generation and industrial
customers.”
He concluded, “Since assuming my role as CEO last year, we have
reestablished a Company culture throughout our Products and
Services segments that is focused on meeting and exceeding customer
expectations for quality and timeliness. In addition, we have
revamped the leadership within both segments and reduced our
overall cost structure. We believe our efforts put us in a
better position to resume growth and achieve higher levels of
profitability going forward."
About Global Power Global Power Equipment Group
Inc. is a design, engineering and manufacturing firm providing a
broad array of equipment and services to the global power
infrastructure, energy and process industries. The Products
segment includes two primary product categories: Mechanical
Solutions (formerly Auxiliary Products) designs, engineers and
manufactures a comprehensive portfolio of equipment for
utility-scale natural gas turbines while Electrical Solutions
provides custom-configured electrical houses and generator
enclosures for a variety of industries The Services segment
provides lifecycle maintenance, repair, on-site specialty support,
outage management, construction and fabrication services for the
industrial, chemical/petrochemical process, oil and gas and power
generation industries. The Company routinely provides
information at its website: www.globalpower.com.
Forward-looking Statement Disclaimer This press
release contains “forward-looking statements” within the meaning of
the term set forth in the Private Securities Litigation Reform Act
of 1995. The forward-looking statements include statements or
expectations regarding the timing and the Company’s ability to file
the restated financial information and 2016 quarterly reports,
regain SEC reporting compliance, and related matters. These
statements reflect our current views of future events and financial
performance and are subject to a number of risks and uncertainties.
Our actual results, performance or achievements may differ
materially from those expressed or implied in the forward-looking
statements. Risks and uncertainties that could cause or
contribute to such material differences include, but are not
limited to, decreased demand for new gas turbine power plants,
reduced demand for, or increased regulation of, nuclear power, loss
of any of our major customers, whether pursuant to the loss of
pending or future bids for either new business or an extension of
existing business, termination of customer or vendor relationships,
cost increases and project cost overruns, unforeseen schedule
delays, poor performance by our subcontractors, cancellation of
projects, competition for the sale of our products and services,
including competitors being awarded business by our customers that
had previously been provided by Global Power, shortages in, or
increases in prices for, energy and materials such as steel that we
use to manufacture our products, damage to our reputation, warranty
or product liability claims, increased exposure to environmental or
other liabilities, failure to comply with various laws and
regulations, failure to attract and retain highly-qualified
personnel, loss of customer relationships with critical personnel,
effective integration of acquisitions, volatility of our stock
price, deterioration or uncertainty of credit markets, and changes
in the economic, social and political conditions in the United
States and other countries in which we operate, including
fluctuations in foreign currency exchange rates, the banking
environment or monetary policy.
In addition, more information may arise during the course of the
Company’s previously-announced ongoing accounting review of its
previously issued financial statements that would require the
Company to make additional adjustments or revisions or to restate
further such financial statements. The time required to
complete the financial statements and accounting review may cause
our results to differ materially from those described in the
forward-looking statements. Other important factors that may
cause actual results to differ materially from those expressed in
the forward-looking statements are discussed in our filings with
the SEC, including the section of our Annual Report on Form 10-K
filed with the SEC on March 9, 2015 titled “Risk Factors.”
Except as may be required by applicable law, we undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, and we caution you not to rely upon them unduly.
Investor Relations Contact:
Deborah K. Pawlowski
Kei Advisors LLC
(716) 843-3908
dpawlowski@keiadvisors.com