DAYTON, Ohio (March 19, 2003) — Amcast Industrial Corp. has sold its Italian wheel subsidiary, Speedline S.r.l., to a European-based company and disclosed it may be dropped from trading on the New York Stock Exchange.
Amcast, a manufacturer of alloy wheels and other “technology-intensive metal products” for original equipment fitments, said net proceeds from the Speedline sale will be negligible but that it would be forced to report a pre-tax loss of approximately $56 million to cover the impact of the disposal.
Amcast did not identify the buyer at this time. Amcast bought Speedline in 1997 to broaden its product range and facilitate its entry to the European market, according to Byron O. Pond, chairman and CEO.
“Despite our additional investments in Speedline,” Mr. Pond said, “its unfavorable cost structure did not allow us to maintain market position and generate adequate returns in the face of changing market conditions and increased competition. The sale allows us to exit this business and focus our efforts and resources on our domestic businesses where we see more opportunity."
Amcast's wheel business in North America is nearly 100-percent OE, with General Motors Corp. accounting for one-third of the firm's engineered components sales.
Sales of aluminum wheels increased last year 13.4 percent to $289 million, but Speedline accounted for as much as $175 million of these sales, according to company documents.
Speedline makes aluminum and magnesium alloy wheels for cars and heavy vehicles, producing for both the original equipment and replacement markets as well as for motorsports competition. Founded in 1975 by the Zacchelo family, Speedline makes about 4 million wheels a year with 1,400 employees at three plants, in Tabina of Santa Maria di Sala, Caselle di Santa Maria di Sala and Bolzano.
Regarding its listing on the NYSE, Amcast said the exchange notified it that it no longer meets the exchange's minimum equity standard, which requires a listed company to have an average market capitalization of not less than $50 million over a 30 trading-day period and stockholders´ equity of not less than $50 million.
Amcast said it had expected the action and is reviewing its available alternatives to assure a continuous public trading market for its common shares.