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News

Emrise Raises Working Capital Through Subsidiary Sale


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Emrise
: 25 March, 2010  (Company News)
Astrodyne has bought out RO Associates from Emrise Electonics swelling the working capital of the group in an exercise to eliminate debt
Emrise has sold substantially all the assets of the San Jose, CA-based RO Associates Incorporated subsidiary of Emrise Electronics to Astrodyne Corporation for approximately $1 million in cash plus the assumption of certain liabilities. Astrodyne, a provider of power conversion solutions worldwide, is headquartered in Mansfield, MA. Pennsylvania based Boenning & Scattergood supported Emrise as financial advisors in relation to the transaction.


Upon closing, Emrise received net proceeds of approximately $600,000 after fees and other costs related to the transaction. The proceeds will be used by the Company for working capital purposes. The purchase price is subject to an upward or downward working capital adjustment within 90 days of the date of closing. Further details of the transaction will be disclosed in a Form 8-K to be filed with the Securities and Exchange Commission.

Emrise Chairman and Chief Executive Officer Carmine Oliva said that completing this transaction will help strengthen Emrise’s working capital, will reduce its operating costs, will improve its bottom line going forward and it will free Emrise management, with the support of Boenning & Scattergood to focus on additional strategic initiatives designed to eliminate its term debt.

“The sale of RO associates is the fourth sale that we have successfully completed in a little more than 18 months,” Oliva added. “With the sale of these four businesses, we believe we have demonstrated our commitment and ability to take the steps necessary to eliminate our term debt and to focus our business in those areas that we believe will allow us to maximize value for our shareholders and other stakeholders.”

Emrise is planning to release its audited 2009 financial results and hold a conference call to discuss those results on or before the end of this month. The Company will issue a news release in advance announcing the time and date for the release of its 2009 financial results and for its conference call.
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