News Releases

Mark IV Industries Launches Major Restructuring Program

Amherst, New York, October 2, 1996 -- Mark IV Industries, Inc. (NYSE: IV) announced today that, as part of a realignment and refocusing of the company's operations, it will close certain of its manufacturing and distribution facilities in the U.S. and Europe, in order to eliminate redundancies, and to more efficiently and effectively serve its global customer base.

Sal H. Alfiero, chairman and chief executive officer of Mark IV, said, "During fiscal 1996, we reorganized the company into two operating units defined by their markets -- Mark IV Industrial and Mark IV Automotive. Since that time, and in conjunction with our ongoing Cycle Time Reduction (CTR) efforts which began more than 20 months ago, we've been able to identify better, more direct and efficient ways to allocate and utilize the resources of these two business units.

"We've determined that excess capacity, totaling slightly more than one million square feet of manufacturing and distribution/warehousing space and approximately 1,000 direct, indirect and overhead positions, will be eliminated. This represents all or portions of 12 locations in the U.S. and Europe, and reduces the company's worldwide work force by approximately six percent. In addition, other facilities that produce both industrial and automotive products will become dedicated to one or the other of our business segments, and certain non-core and/or low-margin product lines will be eliminated. Following these actions, we will continue to provide the same high level of quality products, while improving service to our customers, at existing and projected increased levels of business -- at substantially reduced costs and with greater efficiency."

The realignment of the company, which affects operations in both Mark IV Industrial and Mark IV Automotive, will result in a pre-tax charge of approximately $110 million, or $66 million after taxes ($1.04 per fully-diluted share). A majority of the pre-tax charge, or about $60 million, consists of non-cash items. The charge will be taken in the company's third fiscal quarter (ending November 30, 1996), resulting in a net loss for the quarter, while the company's overall net income for the nine months will remain positive. However, on an operating basis, before the restructuring charge and gains from dispositions, the third quarter is expected to be Mark IV's best third quarter ever, and will represent the company's 67th consecutive quarter of year-over-year increased earnings per share from operations before special items.

Mark IV expects to realize pre-tax savings of between $40-$45 million per year, or 38-43 cents per share after taxes. The cash portion of the charge will cover employee-related transition and other facility closing costs. The non-cash portion results from the revaluation of long-term assets under the new SFAS 121 accounting standard, which became effective during the current fiscal year, and certain pension-related costs. The revaluation is due to the restructuring plan, and immediately recognizes the change in value of those facilities to be closed, or refocused to either industrial or automotive. Gains from asset dispositions completed during the quarter, and those expected to be made over the next 12 months, should substantially offset the cash portion of the charge. So far in the third quarter, recently completed asset dispositions -- both operating (primarily Vapor Corp.) and miscellaneous non-operating -- have generated cash proceeds of $90 million and pre-tax gains of $20 million, or about 40 percent of the cash cost of the restructuring.

Mr. Alfiero added, "Mark IV expects to meet analysts' earnings expectations for the year ($1.65 to $1.70 per fully-diluted share), before the restructuring charge and gains from asset dispositions "The restructuring represents a major step forward in refocusing our operations to quickly and efficiently meet changing customer and competitive demands, while enabling the company to more fully employ its physical and human resources. It is essential that we become the low-cost producer in our various markets, regardless of where in the world we operate and whatever we manufacture. This restructuring effort continues our commitment to achieve this goal."

Mark IV Industries, Inc., located in the Buffalo suburb of Amherst, New York, manufactures power and fluid transfer systems and components for industrial and automotive markets worldwide.

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