EMRISE CORPORATION RELOCATING CORPORATE HEADQUARTERS
Comments on the More Than $1.8 Million of Additional Annualized Cost Savings
DURHAM, NC - September 8, 2010 - EMRISE CORPORATION (NYSE Arca: ERI), a multi-national manufacturer of defense, aerospace and industrial electronic devices and communications equipment, today announced that it is relocating its corporate headquarters from its prior location in Eatontown, NJ, to Durham, NC. The relocation follows the August 31, 2010 completion of the sale of the Company's former Advanced Control Components, Inc. subsidiary (ACC), which is located in Eatontown, NJ, and is where the Company's corporate headquarters has been located. EMRISE will remain a Delaware corporation.
EMRISE Chairman and Chief Executive Officer Carmine T. Oliva said, "We are locating the Company's headquarters in North Carolina because we believe it to be a business friendly state, particularly for EMRISE. We also felt that remaining on the East Coast would keep our headquarters in a location central to our domestic and international operations and to our principal markets in North America and Europe."
The Company's management also commented on the cost reductions resulting from the recent realignment of its corporate finance and administration organization and the expected interest expense savings following the sale of ACC and the pay down of all but $3.8 million of approximately $16.5 million in total debt owed to its former principal lender and the former ACC shareholders.
Newly promoted Director of Finance and Administration and Principal Accounting Officer Brandi Festa said, "We have structured our finance, accounting and treasury operation to capitalize on the presence and expertise of our local business unit finance personnel as part of our continued strategy to increase our overall efficiency and help contain costs."
Oliva added, "With an anticipated annualized revenue base of $30 million to $33 million to build on following the sale of ACC, it was essential that we take steps to further reduce our operating costs. The realignment of our corporate finance and administration organization announced last week resulted in a reduction of our annualized operating costs of approximately $500,000. These cost savings are in addition to the more than $1.3 million estimated reduction in annual interest expense stemming from the substantial pay down of our debt and the reduction in interest rates for our other term debt. This combined total of $1.8 million in annualized cost savings is on top of the approximately $3 million of annualized cost reduction measures implemented in 2009."
EMRISE expects to record a one-time, non-cash charge of approximately $425,000 in this year's third quarter for the severance expenses associated with the realignment of its corporate finance and administration organization.
"We believe that the aggregate total of all these expense reductions will help us achieve future profitability and positive cash flow, which are key elements of our strategy to grow the Company and enhance stockholder value," Oliva said.
The contact information for the Company's new headquarters will be:
EMRISE Corporation
2530 Meridian Parkway
Durham, NC 37713
Tel: (408) 200-3040
Fax: (408) 550-8340
About EMRISE Corporation
EMRISE designs, manufactures and markets electronic devices, sub-systems and equipment for aerospace, defense, industrial and communications markets. EMRISE products perform key functions such as power supply and power conversion; radio frequency (RF) and microwave signal processing; and network access and timing and synchronization of communications networks. The use of its network products in network timing and synchronization in edge networks is a primary growth driver for the Company's Communications Equipment business segment. The use of its power supplies, RF and microwave signal processing devices and subsystems in on-board in-flight entertainment and communications systems is a primary growth driver for the Company's Electronic Devices business segment. EMRISE serves customers in North America, Europe and Asia through operations in the United States, England and France. The Company has built a worldwide base of customers throughout the U.S., Europe and Asia. For more information go to www.emrise.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
With the exception of historical information, certain matters discussed in this press release including achieving future profitability and positive cash flow, expanding the Company and enhancing stockholder value and anticipated revenue, cost savings and charges, are all forward looking statements within the meaning of the Private Securities Litigation Reform Act. The actual future results of EMRISE could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, the ability to complete additional strategic initiatives; the terms, conditions and timing of such events; whether the described efforts will result in actual cost savings or increasing value for its stockholders and other stakeholders; unforeseen technical issues; unforeseen changes in customer demand; unforeseen delays in receipt of materials from its vendors; inability of the Company's products to meet customer specifications; and changes in the economic, industry or political climate that may negatively impact demand for EMRISE's future products. The Company refers you to those factors contained in the "Risk Factors" Section of EMRISE's Annual Report on Form 10-K for the year ended December 31, 2009, as amended, Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, its Current Reports on Form 8-K filed in recent months, and other EMRISE filings with the SEC.
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