09.07.2006

Thomas to close Korean facility and appoints new sales VP

Thomas Equipment, the producer of Skid steer loaders, Tovel Telehandlers and other equipment, has decided to close its Busan, South Korea manufacturing, engineering, and sales complex, subject to board approval.

The Busan manufacturing operation which was completed last year, has failed to achieve the production and financial goals expected from it.

The South Korea complex was focused primarily on the design and production of the Model 155 skid steer loader and also housed sales and operations of other wholly owned business units of Pneutech Inc. Due to various technical and engineering issues, production of the Model 155 never got off the ground and has not generated material revenue for Thomas.

Thomas now expects to resolve the engineering issues within the next ninety days and produce it in its New Brunswick, Canada plant.

Certain skid loader intellectual and capital assets will be relocated to Thomas' existing plant in Centreville, NB Canada, while others, including all inventory, buildings and land will be sold. The proceeds from any asset sales will be used to reduce debt owed to Laurus Master Funds, Ltd

While in Korea, its new senior management team concluded an annual business review with the senior management of Hyundai Heavy Industries, Ltd, with which it has had a global OEM agreement since 2005.

The two companies have re-affirmed their commitment to fulfill the strategic relationship between the companies. Thomas estimates that, depending on Hyundai's distributor demand and its ability to ramp up production, 2007 orders from Hyundai will be no less than 1,000 units, which should exceed $30 million in sales.

"Our team held a series of lengthy and candid meetings with senior executives at Hyundai involving all relevant topics. I am pleased to report that at the conclusion of those meetings Hyundai's management expressed their confidence in Thomas' new management team and the strategic directions we are taking in a number of areas," said James E. Patty, chief executive officer of Thomas Equipment. "We have a great opportunity to grow our relationship with Hyundai beyond the minimum forecast”.

The company also announced the appointment of Rudy van den Ende as its vice president of global sales.

Van den Ende, became involved with Thomas, when in 1985 he was part of the buy out team of Rousseau Controls, Ltd. in 1985 from Bendix Corporation and headed its sales and marketing efforts, later becoming CEO.

13 years later Rousseau merged with Pneutech Inc. and van den Ende was named vice president of sales for the combined company. Pneutech then merged with Thomas in early 2005, and he became its vice president of corporate development.

Van den Ende has accompanied CEO James E Patty, on his recent tour of the company’s facilities and principle dealers, including Korea. He said "In recent weeks Rudy and I have already spent days and nights around the globe visiting customers. Rudy has proven himself as a corporate leader and is a great addition to our senior management team, his sales and marketing expertise, as well as his 20 year-tenure within Thomas' predecessor companies, will advance our efforts to grow revenues and create shareholder value."