AM International Inc. announces letter of intent to sell its Sheridan Systems Division and third quarter results.

ROSEMONT, Ill.--(BUSINESS WIRE)--June 11, 1996--AM International Inc. (ASE:AM) Tuesday announced that it has executed a letter of intent with Heidelberger Druckmaschinen AG of Heidelberg, Germany, for the sale of substantially all of the assets of AM's Sheridan Systems Division, located principally in Dayton, Ohio and Slough, England.

Sheridan Systems is a leading supplier of systems and components to both the printing and newspaper publishing industries. Sheridan Systems had revenues of $182 million in 1995 and employs approximately 700 people worldwide. The total cash purchase price for the transaction is anticipated to be $56 million, subject to certain adjustments. The transaction does not include the Company's AM Multigraphics division, which has operations in North America and Japan. The Company intends to use the proceeds to reduce liabilities and provide working capital.

The non-binding letter of intent contemplates that the parties will work toward the negotiation and execution of a definitive asset purchase agreement in June and the closing of the transaction in early August. The signing of a binding agreement is dependent on, among other things, the results of Heidelberg's continuing review of the Sheridan Systems Division as well as the approvals of such agreement by the respective Boards of AM and Heidelberg, as well as those of a Heidelberg affiliate. The closing would be subject to various conditions, including receipt of the affirmative vote of at least a majority of the shareholders of AM International Inc. and receipt of appropriate government approvals or consents, among others.

AM International Inc. also reported third quarter results for the fiscal quarter ended April 27, 1996. For the quarter, the Company had net income of $1.3 million, or 19 cents per common share as compared with a net profit of $0.2 million or 2 cents per common share in the comparable prior year period. The net income for the current year period included $2.8 million in income resulting from the favorable resolution of disputes previously reserved for.

Revenues for the third quarter of fiscal year 1996 of $82.2 million were $45.6 million lower than the comparable prior year period. Of the revenue decrease, $35.4 million resulted from prior divestitures of unprofitable components of the Company's AM Multigraphics foreign operations. The balance of the revenue decrease was primarily in the Company's Sheridan Systems division, where market demand for the division's product lines has been weak. Sheridan Systems revenues have historically been subject to cyclical market demand and, due to the sizable nature of individual orders, quarter-to-quarter variations in revenues and margins are to be expected.

Year-to-date, the Company has a net loss of $11.2 million, compared with net income of $0.7 million for the prior year period. Based on current projections, the Company expects that its cash resources and current revolving credit facility will not provide sufficient capital resources and liquidity for the next 12-month period, absent the consummation of the Heidelberg transaction, the Company's obtaining new revolving credit facilities, or the consummation of another transaction providing capital resources to the Company. The Company is exploring a variety of strategic and financial alternatives to meet its liquidity needs. The Company has retained Bear, Stearns & Co. Inc. to act as its financial advisor in connection with the proposed Heidelberg transaction, in addition to certain other potential strategic alternatives.

The stock of AM International Inc., which has corporate headquarters in Rosemont, Illinois is traded on the American Stock Exchange under the ticker symbol "AM", and its warrants trade under the symbol "AM.WS".

CONTACT: AM International Inc.

Thomas D. Rooney, 847/685-2505