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Photomatrix Announces Acquisition of Precision Metal Machining Operation.

CARLSBAD, Calif.--(BUSINESS WIRE)--Dec. 30, 1998--Photomatrix Inc. (Nasdaq:PHRX), a value-added engineering, design and electronic manufacturing services (EMS) company specializing in high-performance document scanners and aperture card scanners and digital imaging, announced today that its wholly owned subsidiary, I-PAC Manufacturing, Inc., has acquired certain assets and the business operations of Amcraft Inc., a precision metal machining company located in Carlsbad, Calif.

I-PAC acquired the business assets of Amcraft out of an assignment for the benefit of creditors proceeding. Under the terms of the purchase, I-PAC paid a total of $18,000 for the purchase of work-in-process inventory, miscellaneous equipment, customer list and backlog, rights to hire employees and the business name of Amcraft.

I-PAC also entered into leases of approximately $450,000 primarily of CNC precision machining equipment which had previously been used by Amcraft. This amount is approximately $100,000 less than the principal amount previously owed by Amcraft for the lease of this equipment.

In addition, I-PAC will lease the current 10,000 square foot facility occupied by Amcraft through April of 1999, at which time the precision metal machining operation will be relocated to the newly acquired National Metal Technologies facility located in Oceanside, Calif.

For the nine months ended Sept. 30, 1998, Amcraft reported revenues of $750,000. In the two prior fiscal years ended Dec. 31, Amcraft reported annual revenues of approximately $1.3 million each year.

"The acquisition of Amcraft represents the first step in our plan to expand the electronic manufacturing services offered by I-PAC," stated Patrick Moore, the chief executive officer of Photomatrix. "We believe that this and related metal fabrication acquisitions will allow the company to offer an expanded range of products and services to new and existing customers, thus increasing the revenue-to-sales expense ratio and differentiating the company in the market place."

"Amcraft will become a separate business unit within the company's manufacturing group," stated Moore. "This acquisition not only adds a precision machining capability to our manufacturing services offering, but will also enable us to increase the margins on our own products as we can internally supply a metal requirement that previously has been outsourced," added Moore.

"MGM TechRep, our manufacturing rep firm, will immediately add Amcraft to its line card, and will aggressively be seeking expanded sales for this new business unit."

Moore stated, "This acquisition represents a basic roll-up strategy by Photomatrix to significantly grow our manufacturing group. We are looking to add further metal stamping, sheet metal and plastic injection molding capabilities to our manufacturing products, further extending our ability to be a complete manufacturing solution for our EMS customers."

In an unrelated matter, the company also announced today that J. Larry Smart had resigned as a director of the company. Smart cited that his new employment with Primax, a scanner manufacturer, will preclude him from being able to devote the necessary time required to continue his association with Photomatrix. Smart had joined the company's Board of Directors in July 1998.

Photomatrix Inc. and I-PAC Manufacturing Inc., with headquarters in Carlsbad, Calif., recently merged to become a value-added engineering, design and manufacturing company specializing in high-performance document scanners and aperture card scanners and digital imaging. Complete company and product information can be found at the company's Web site which is located at

This press release contains forward-looking statements that involve risks and uncertainties. These statements include, without limitation, statements relating to the company's plans and objectives for future operations, assumptions and statements relating to the company's future economic performance, management's opinions about the ability of the company's actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, without limitation, those risks discussed in Item 6 under the heading "Additional Risk Factors" as well as those discussed elsewhere in the company's Annual Report on Form 10-KSB.
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Publication:Business Wire
Geographic Code:1U9CA
Date:Dec 30, 1998
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