DDL to Issue Shares and Warrants for the Issuance of Shares Under the Financial Distress Exception to the New York Stock Exchange's Shareholder Approval Policy to Complete Strategic Acquisition; To Increase Capacity to Utilization and Profitability in Operating Facilities; To Provide for Working Capital Needs; To Trigger the Effectuation of a Reduction and Largest Liability of the Company; and to Pay For Acquisition Underwriting

Business Wire, Nov 13, 1995

TIGARD, Ore.--(BUSINESS WIRE)--Nov. 13, 1995--DDL Electronics, Inc. (NYSE-DDL) announced today that it intends to issue 6,000,000 shares of common stock and 2,000,000 warrants for the issuance of shares of common stock (for a total of 8,000,000 shares of common stock) in a series of transactions over this and the forthcoming fiscal year.

The proceeds from the issuance of the shares and warrants for the issuance of shares will be used by the Company to:

1. Acquire all of the issued and outstanding shares of stock in SMTEK, Inc., a state of the art surface mount technology company with superior design capabilities with a $28,000,000.00 backlog from a customer base which reads like a who's who of the Fortune 500 companies;

2. Increase the capacity utilization and profitability of the Company's operating facilities in Northern Ireland;

3. Provide for the immediate working capital needs of the expanded Company which will now have a significant presence in both the United States and Europe with a special emphasis on advanced telecommunications and medical applications;

4. Trigger the effectuation of a substantial reduction of the largest liability of the Company for unfunded pension and medical insurance claims of the former officers and directors of this Company in the approximate amount of $3,500,000, resulting in an extraordinary gain to the Company of approximately $2,000,000.00; and

5. Pay for acquisition underwriting costs.

Each of these five points individually, and more important, collectively, represent significant steps towards the targeted objectives of increased profitability and increased shareholder equity at the Company.

This transaction would normally require approval of shareholders according to the Shareholder Approval Policy of the New York Stock Exchange (the "Exchange").

The Audit Committee of the Board of Directors of DDL Electronics, Inc. has determined that the delay necessary in securing shareholder approval prior to this issuance of these securities would seriously jeopardize the financial viability and future prospects of the Company. Because of that determination, the Audit Committee, pursuant to an exception provided in the Exchange's shareholder approval policy for such a situation, expressly approved the Company's omission to seek the shareholder approval that would otherwise have been required under that policy. The Exchange has accepted the Company's application of the exception.

DDL Electronics, Inc., in reliance on the exception, is mailing to all shareholders a letter notifying them of its intention to issue the shares without seeking their approval. Ten days after such notice is mailed, the Company will proceed to begin to issue certificates for 6,000,000 shares of common stock and 2,000,000 warrants for the issuance of shares of common stock (for a total of 8,000,000 shares of common stock) in a series of transactions over this and the forthcoming fiscal year.

DDL Electronics, Inc. corporate office is located at 7320 SW Hunziker Road, Suite 300, Tigard, Oregon 97223-2302. Telephone 503-620-1789, fax 503-620-1676.

CONTACT: DDL Electronics, Inc.

Don A. Raig, 503/620-1789