Summa Repurchases Preferred and Common Stock
04 Mai 2004 - 2:00PM
PR Newswire (US)
Summa Repurchases Preferred and Common Stock TORRANCE, Calif., May
4 /PRNewswire-FirstCall/ -- Summa Industries announces that it has
repurchased and retired all of its outstanding Preferred Stock and
10.3% of its Common Stock from an investment manager, by issuance
of new, unsecured, subordinated debt of $10.2 million ("Sub-debt").
Prior to the transaction, as reported in the Company's most recent
proxy statement, this stockholder owned 21.9% of Summa's
outstanding shares, assuming conversion of the Preferred Stock. The
transaction is expected to reduce the Company's finance costs and
be accretive to earnings per share. No gain or loss will be
reported on the transaction. The Company also cancelled its
previously announced 2003 stock buy-back plan. Summa repurchased
the Preferred Stock at its current book value of $6.6 million. The
repurchase eliminates the Preferred Stock accretion charge to net
income before the calculation of earnings per share. In the same
transaction, the Company repurchased 452,856 shares of Common Stock
at a price of $8.02 per share, representing an 8% discount from the
recent trading price on the Nasdaq National Market. The resulting
$10.2 of Sub-debt will initially bear interest at 12%, which will
be reduced automatically as the outstanding balance is reduced, and
is due by September 2006. There are no prepayment penalties and the
Company intends to use its bank credit line to prepay a portion of
the Sub-debt as soon as practical. Summa projects that it will have
approximately $33 million in total debt, including the Sub-debt, at
a weighted average interest rate of about 4% at May 31, 2004. Summa
Industries manufactures proprietary engineered plastic products for
a broad spectrum of industrial and commercial markets. Statements
in this news release which relate to future plans, financial
results or projections, events or performance are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, and fall under the safe harbor. These
forward-looking statements include, but are not limited to,
statements regarding anticipated future finance costs and debt
levels, the effect of the repurchase on future earnings per share
and the possibility of prepaying portions of its subordinated debt.
Actual results could differ materially from those anticipated in
the forward-looking statements as a result of a number of factors,
including, but not limited to changes in capital markets,
deterioration of the economy which could result in the inability to
prepay the subordinated debt or even service the debt when due, and
other risks and uncertainties described in detail under "Risk
Factors" in Summa's Annual Report on Form 10-K for the fiscal year
ended August 31, 2003. For further information, please contact:
James R. Swartwout, +1-310-792-7024, or fax, +1-310-792-7079, ; or
http://www.summaindustries.com/. DATASOURCE: Summa Industries
CONTACT: James R. Swartwout of Summa Industries, +1-310-792-7024,
or fax, +1-310-792-7079, Web site: http://www.summaindustries.com/
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