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Johnstown America Completes Acquisition of EMI Company; Provides Additional Foundry Capacity For Gunite Wheel-End Components.

CHICAGO--(BUSINESS WIRE)--May 17, 1999--

Johnstown America Industries, Inc. (NASDAQ: JAII) today announced that its Gunite Corporation subsidiary has completed its previously announced acquisition of EMI Company, an iron foundry and machining company located in Erie, Pennsylvania, from Hitachi Metals America, Ltd. The purchase price was approximately $18.7 million, which JAII paid using cash on hand.

EMI has annual revenues of approximately $55 million, with its line of wheel-end components for medium and heavy-duty trucks and trailers currently representing approximately 40 percent of revenues. Through its acquisition of EMI, Gunite intends to substantially increase EMI's production of wheel-end components.

"We are pleased to have completed this important strategic acquisition for Gunite," said Thomas M. Begel, chairman, president and chief executive officer of JAII. "This acquisition will enable Gunite to significantly grow both revenues and earnings."

"The EMI acquisition solves Gunite's capacity issues and will enable us to better service original equipment manufacturers, recapture market share in the higher margin aftermarket business and improve operating efficiencies," said Thomas W. Cook, senior vice president of JAII and president of Gunite Corporation.

Gunite Corporation, with operations in Rockford, Ill. and Elkhart, Ind., manufactures brake drums, rotors, slack adjustors, disc wheel hubs and spoke wheels for medium and heavy-duty trucks and trailers and the truck parts aftermarket. Its key customers include Freightliner, Mack, Navistar and PACCAR.

EMI is the second truck component acquisition completed by JAII during 1999. On April 29, the company completed its acquisition of Imperial Group, Inc., a leading supplier of body and chassis components to the heavy-duty truck industry. In addition, on May 11, 1999, the company announced that it had entered into a definitive agreement to sell its freight car operations.

"Following the pending sale of the company's freight car operations, JAII will be entirely focused on synergistically growing our heavy-duty truck components business," Begel said. "Our truck components businesses are growing, have high market shares, and have been consistent profit generators. With the Imperial and EMI acquisitions, we expect to accelerate revenue and earnings growth."

JAII, headquartered in Chicago, Illinois, currently has two operating segments. The Truck Components segment's current product lines include Gunite wheel-end components, Brillion custom iron castings, Imperial body and chassis components, Bostrom truck and bus seating systems, and Fabco steerable drive axles and gearboxes. JAII's Freight Car segment, which includes Johnstown America Corporation, Freight Car Services, Inc., and JAIX Leasing Co., builds, rebuilds and leases freight cars used for hauling coal, autos, and agricultural and mining products.

The statements herein, which are not historical facts, including statements about future expectations, are "forward-looking statements" that involve certain risks and uncertainties that could cause actual future results to differ materially from those stated. These risks are spelled out more fully in the company's SEC filings. The company assumes no obligation to update its forward-looking statements.
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Publication:Business Wire
Geographic Code:1USA
Date:May 17, 1999
Words:471
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