Chemfab Corporation Announces Streamlining of Its European Business.

MERRIMACK, N.H.--(BUSINESS WIRE)--June 30, 1999--

Chemfab Corporation (NYSE:CFA) today announced that it has adopted a plan to dramatically improve efficiency in its European operations. The Company expects the plan to produce after-tax cost savings of $800,000 in the first full year, and $1.4 million annually thereafter. These cost savings will fully offset the cash costs of the plan by the end of the Company's 2001 fiscal year.

The key drivers of the plan are the consolidation of Chemfab's current two-plant manufacturing operations in Europe into a single coating facility in Kilrush, Ireland and the consolidation of the three recent German acquisitions into a single operation in Cologne, Germany.

The consolidation of European manufacturing at Kilrush is a strategically important step that will enable the Company to manufacture products using its recently installed, latest-generation efficient production capacity. It will allow the combined European manufacturing operations to further enhance their competitive advantage with shorter production times and effective cost control through reduced infrastructure and overheads.

Commenting on the announcement, Dr. John W. Verbicky, Chemfab's President and Chief Executive Officer, stated, "This consolidation will enable us to maintain our strong commitment to the Chemfab(R) and Tygaflor(R) brand names in Europe and globally. By focusing on a single manufacturing operation in Europe and targeting our sales forces at the local markets, we will benefit from a highly streamlined organization that is better designed to meet our customers' needs and serve them more effectively. Further, we are strongly committed to maintain our fabrication and distribution capacity in the U.K. to serve that market."

Chemfab's recently acquired German operations are involved in fabrication and distribution of the Company's PTFE-coated products. The consolidation of these three acquisitions, according to Dr. Verbicky, "is a logical and important step to achieve the rapid integration of our new capability into a single operation. We plan to redeploy resources on new market opportunities, while reducing costs."

Dr. Verbicky added, "It is very important that we serve our customers in Germany using a clear and well organized fabrication and distribution system. Each of the three acquisitions brings different strengths which will benefit the combined German operations."

During the fourth quarter of fiscal 1999 Chemfab will take a special pre-tax charge of $3.75 million, of which $3 million relates to the restructuring of the European manufacturing operations and the German acquisitions; and $750,000 relates to the previously announced restructuring of certain marketing agreements. The after-tax impact on cash flows of the consolidated restructuring charge is expected to be $1 million.

Chemfab Corporation is a leader in the design, manufacture, fabrication and marketing of value added polymer-based products which deliver outstanding performance in severe service and highly specialized operating environments. Chemfab manufactures a broad range of high performance polymer based, reinforced and unreinforced fluoroplastics, fluoroelastomers, silicone elastomers and adhesives. The Company's products include laminates, films, coated fabrics, and tapes. The Company also produces molded polymer products and fabricated finished articles from roll goods. Worldwide end use applications are in the food processing, biomedical, protective clothing, electronics, communications, aerospace, architectural and other industrial markets and applications.

FOR FURTHER INFORMATION, CONTACT:

Moosa E. Moosa

Vice President - Finance, Treasurer

and Chief Financial Officer

CHEMFAB CORPORATION

701 Daniel Webster Highway 

P.O. Box 1137

Merrimack, New Hampshire 03054

[phone], Ext. 2302

E-Mail: moosa @ chemfab.com

NOTE: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from those projected or suggested due to certain risks and uncertainties, including any difficulties that may be encountered during the transition of manufacturing from the U.K. to Ireland and the consolidation of the Company's German acquisitions, the degree of success in achieving planned cost efficiencies and other challenges of operating combined businesses. Additional information concerning certain other risks and uncertainties relating to the Company's base business and that of its customers worldwide that could cause actual results to differ materially from those projected or suggested, is contained in the Company's filings with the Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or the Company upon request. The forward-looking statements contained herein represent the Company's judgment as of the date of this release, and the Company cautions readers not to place undue reliance on such statements.