MASSENA, N.Y., July 5, 2005 (PRIMEZONE) -- Michelex Corporation (Pink Sheets:MLXO) would like to announce that it has decided to temporarily remove itself from Bulletin Board, by not filing its annual filings due to financial constraints on the company. Michelex has a history of being late on its filings and intends to implement new controls and procedures to eliminate the problem. During this restructuring phase, the Company has plans to evaluate the business, attempt to raise additional operations capital, and hire new management.
Michelex has successfully implemented the initial steps of its restructuring phase by eliminating and refinancing its credit lines with Wells Fargo. The restructuring of this debt will allow Michelex to increase its operations with an eye towards returning to profitability.
Michelex has successfully negotiated a deal with Commercial Capital for a $2.5 million line of credit, replacing the revolver credit line currently in place with Wells Fargo. The company had already instigated a debt-restructuring program and had paid down its note with Wells Fargo significantly, from over the last year. The new terms are favorable to the prior arrangement and facilitates the release of $550,000 in receivables which have been held by Wells Fargo, dramatically improving Michelex' liquidity. The Michelex contract with Wells Fargo came up for renewal recently and they have, mutually, decided to terminate the agreement.
"We would like to thank Commercial Capital, an institution known for their customer service oriented practices, for providing Michelex with this new credit facility," said Thomas Gramuglia, C.E.O of Michelex. He further stated, "The strength of this agreement is that we have been able to free up over a half million dollars in receivables, allowing us both more flexibility and additional purchasing power."
Michelex has terminated its agreement with Argilus Financial, closing the letter of credit which was used to purchase the equipment from Nepco, SA. While the company would like this updated equipment, it must devote 100% of its resources to existing operations.
The Hind Sight Records acquisition was more dilutive then the Company anticipated and has impeded the Company's ability to raise additional capital in the public markets under the current capital structure. It has used up all of the Company's authorized shares, leaving it unable to use shares to raise capital. The Company will investigate all possible solutions.
Currently, Michelex has several under funded divisions. The current structure does not allow for these divisions to grow and impedes them from financing. The Company will determine which of these divisions can act as "stand alone entities," then plans to spin those divisions off and allow them to become self sufficient companies. If the Board of Directors determines that any of the divisions should be spun-off, it plans to reward the patience of Michelex shareholder by awarding them shares of the Division as a dividend. The company has also placed the acquisition of Media Books L.L.C. on hold, indefinitely.
Michelex hopes to file its annual and quarterly reports with the S.E.C upon the refinancing and restructuring of the Company. It should than be able to re-file its 15-C-211 and return to the Bulletin Board or Amex.
Michelex will keep shareholders updated accordingly.
ABOUT MICHELEX:
Michelex Plastics -- Founded in 1972, is a manufacturer/importer and distributor of C-Zero's, C-Shells, Norelco Boxes, Jewel Boxes and other related specialty plastic products. The company has manufacturing facilities and distribution points in New York and Salt Lake City. The company employs over 100 people who are committed to the customers and to the operations of the business. Michelex offers a full range of products through its divisions to make it a one-stop shop for its customers.
Michele Audio -- Audio duplication services and an exclusive rights holder of a large catalog of music and spoken word recordings.
Michelex Media Products -- Producer, supplier and distributor of paper multimedia packaging products, also offering complete fulfillment services to its customers.
For further information, www.micheleaudio.com
Safe Harbor:
This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The risks and uncertainties that may affect the operations, performance development and results of the Company's business include but are not limited to fluctuations in financial results, availability and customer acceptance of our products and services, the impact of competitive products, services and pricing, general market trends and conditions, and other risks detailed in the Company's SEC reports.