SOURCE: Thomas Equipment Inc.

March 02, 2006 10:09 ET

Thomas Equipment Inc. Completes Purchase of Tovel Manufacturing Assets

Thomas to Begin Manufacturing and Distributing Rough Terrain Forklifts, Telescopic Handlers, Attachments, Mortar/Plaster Mixers, Mortar Boxes and Buggies

MILWAUKEE, WI -- (MARKET WIRE) -- March 2, 2006 -- Thomas Equipment Inc. ( ("Thomas") (OTC BB: TEQI) announced today that it has completed the purchase of substantially all of the assets of privately held 1221549 Ontario Limited dba Tovel Manufacturing ("Tovel"), including all inventory, trademarks and patents, customer lists, designs, engineering drawings and production facilities related to Tovel's rough terrain forklifts, telescopic handlers, attachments, mortar/plaster mixers, mortar boxes and buggies. Thomas, through an operating subsidiary, will purchase the Tovel assets for $1.1 million in cash plus 40,000 options to employees (strike price of $4.50). Thomas management expects the acquisition to be additive to earnings within the next two quarters, and plans to immediately expand Tovel's current limited North American distribution to include Thomas' 375 global dealer network and the 424 dealer network that supports a private label program with one of Thomas' strategic OEM partners.

Tovel, incorporated in Canada in 1970, designs and manufactures 6 models of rough-terrain forklifts, 5 models of telescopic handlers, 10 attachments models and mortar and plaster mixers. Recognized for its world-class, quality products and prompt, efficient technical service, Tovel leads the industry with an excellent reliability record. With limited distribution, Tovel is one of the smaller manufacturers of approximately 20 brands worldwide addressing a market opportunity in the U.S. alone that totals $1.8 billion annually in rough-terrain forklifts and telescopic handlers. The market for rough-terrain forklifts and telescopic handlers has doubled over the past 10 years during which Tovel has captured less than 1 percent of the market, despite its product excellence. To date, Tovel's customer base numbers 200 and is limited to the North American marketplace.

"The management of Thomas Equipment and Pneutech has been making accretive acquisitions for over ten years. We have a proven history of quickly consolidating an acquisition, and immediately leveraging our infrastructure to bring accelerated growth to the acquired company's revenue stream," commented Clifford Rhee, president and CEO of Thomas Equipment. "In the case of Tovel, we share a similar culture and focus on product and service excellence. Our customer base, dealer network and strategic OEM partners have been awaiting our product line expansion to supply them with a more diverse range in earthmoving equipment, consistent with our traditional level of excellence. We expect to see an immediate revenue contribution from Tovel in our current quarter, and during 2006, we plan to substantially increase the revenue level Tovel delivered in 2005 while achieving gross margins consistent with our skid steer loader line. Our future plans are to integrate the Tovel product line into our dealer network and into our private label OEM partner network. We will consolidate a portion of the Tovel manufacturing into our Centreville plant, and will be leveraging our current engineering capability to create additional product enhancements to the Tovel line."

About Thomas Equipment Inc.

Thomas Equipment Inc.,,, and its subsidiaries including Pneutech Inc.,, Rousseau Controls Inc.,, Samsung Industry Co. Ltd.,, and Hydramen Fluid Power Limited, Thomas is an innovative and technologically advanced global manufacturer of a full line of skid steer and mini skid steer loaders as well as attachments, mobile screening plants and six models of mini excavators. Thomas distributes its products through a worldwide network of distributors and wholesalers. In addition, Thomas' wholly owned subsidiaries manufacture specialty industrial and construction products, a complete line of potato harvesting and handling equipment, fluid power components, pneumatic and hydraulic systems, spiral wound metal gaskets, and packing material.

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Safe Harbor Statement Under the Private Securities Litigation Act of 1995 -- With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of TEQI could differ significantly from those statements. Factors that could cause actual results to differ materially include risks and uncertainties such as the inability to finance the company's operations or expansion, inability to hire and retain qualified personnel, changes in the general economic climate, including rising interest rate and unanticipated events such as terrorist activities. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, and such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. For further risk factors see the risk factors associated with our Company, review our SEC filings.

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