AMERICAN BANK NOTE HOLOGRAPHICS ANNOUNCES PLANS TO EXPAND
CAPABILITIES BY CREATING NEW STATE-OF-THE-ART HIGH SECURITY FACILITY
ELMSFORD, NY – December 14, 2004 – American Bank Note Holographics,
Inc. (“ABNH” or the “Company”) (OTC Bulletin
Board: ABHH.OB) a world leader in the origination, production and
marketing of
holograms for security applications, today announced plans to consolidate
its primary production, research, sales and administrative operations
into a state-of-the-art high security facility in Robbinsville, NJ.
ABNH has entered into agreements to lease a 134,000 square foot modern
manufacturing and office building, and will be doing construction
within this facility to meet the Company’s specialized operational and security
requirements through approximately May 2005. The new facility provides
substantial room for expansion as the Company will consolidate its operations
that have previously been conducted within a 58,000 square foot facility
in Elmsford, NY and a 30,000 square foot facility in Huntingdon Valley,
PA into the new facility in Robbinsville, NJ which is located between the
two existing facilities. The Company is also acquiring additional equipment
and technology to be installed in the new facility in order to broaden
the Company’s capabilities to serve its target customers, expand
capacity and improve efficiency.
The base rent on the new lease is $555,000 per year, increasing by
1.9% per year, but the first seven months of the lease are rent-free.
This
compares to the current combined base rent of $933,000 per year for
the Company’s
two existing smaller facilities. The term of the new lease is through
May 31, 2017, and at the expiration of the lease, the Company has
options to
renew the lease and an option to purchase the building.
In addition to the future reduction in rental expense, the Company anticipates
that the consolidation of its facilities will yield substantial operating
efficiencies. Furthermore, the consolidation combined with the installation
of new equipment in the new facility will help the Company expand its product
offerings, increase security, improve product quality and streamline manufacturing
schedules. The Company has received approval from the State of New Jersey
Economic Development Authority for Business Employment Incentive Program
grants for the next 10 years.
The Company currently estimates investing a total of approximately
$7 million through 2005 in facility upgrades to customize the facility
for
its enhanced
operational and high security requirements as well as the acquisition
of new equipment to upgrade and expand its production capabilities.
The Company
also currently expects to incur expenses (cash and non-cash charges
to income) totaling approximately $5 million associated with its
existing leases, vacating its current facilities, relocating and
severing certain
employees, moving equipment and other related expenses. These expenses
will be presented as a separate operating expense line item on the
Company’s
financial statements beginning in the fourth quarter of 2004 and
will be substantially complete by the third quarter of 2005.
Kenneth Traub, President and CEO of ABNH commented, “This move
marks the beginning of the next major phase in the rebuilding of
a world leader
in product and document security. We are creating a stronger and
more efficient organization and infrastructure that is committed
to addressing
the increasing
demand for improved security solutions to protect valuable and critical
documents and products worldwide. We are gratified by the recent
growth in our business as we have taken an expanded role in the protection
of major transaction cards, identity documents, pharmaceuticals and
other
consumer products. We are also excited about the continued growth
opportunities
in our business and are confident that the investments we are making
now will substantially improve our capabilities to capitalize on
these opportunities.”
About American Bank Note Holographics, Inc.
American Bank Note Holographics is a world leader in the origination,
production, and marketing of holograms. The Company’s products
are used primarily for security applications for the protection of
transaction cards, identity
documents, documents of value, pharmaceuticals and other consumer and
industrial products. ABNH is currently headquartered in Elmsford, NY
and plans to
move its headquarters to Robbinsville, NJ in 2005. For more information,
visit www.abnh.com
# # #
Forward-Looking Statement
This news release includes forward-looking statements that involve
risks and uncertainties. Although the Company believes such statements
are
reasonable, it can make no assurance that such statements will prove
to be correct.
Such statements are subject to certain factors that may cause results
to differ materially from the forward-looking statements. Such factors
include
the risk factors discussed in the Company’s filings with the
Securities and Exchange Commission, including its most recent Annual
Report on Form
10-K, a copy of which may be obtained from the Company without charge.
The Company undertakes no obligation to publicly release results
of any of these forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unexpected
results.
This release and prior releases are available on the ABNH Web site
at www.abnh.com
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