LIBERTY CORNER, N.J.--(BUSINESS WIRE)--Jan. 19, 2001--TransTechnology Corporation (NYSE:TT) announced today that it intended to restructure and divest several of its industrial products businesses and that it had retained an investment banking firm to consider further strategic and business initiatives following these actions.

By September 2001, TransTechnology expects to have reduced its debt by almost 50% and to be focused on the design, manufacture and marketing of specialized aerospace equipment and assembly fasteners.

The company announced that, as part of its restructuring, it would seek to divest four of its industrial products operations. The company intends to sell its cold-headed products, aerospace rivet, retaining ring, and hose clamp operations over the next few months, with the anticipated proceeds of $110 - $130 million going towards the retirement of its $280 million debt. For the nine months ended December 31, 2000, the operations slated for sale had aggregate revenues of $111.3 million and operating income of $2.1 million (excluding an arbitration award), and include the UK operation, which reported an operating loss of $6.8 million for the nine-month period.

In association with the restructuring, the company stated that it would suspend the payment of its quarterly dividend and recognize a non-recurring pre-tax charge of $65 - $80 million in the fourth quarter of the current fiscal year, which ends March 31, 2001. The non-recurring charge includes the anticipated losses on the sale of two business units and other assets as well as the provision for severance and other costs associated with such divestitures. The company anticipates that gains associated with the divestiture of the other two business units will offset approximately half of that charge, but that such gains will not be recognized until the sale transactions are completed.

Michael J. Berthelot, Chairman, President and Chief Executive Officer of TransTechnology, said, "The changing debt and equity markets, compounded by changes in the circumstances of our principal customers, have made the pursuit of our longstanding strategic plan problematic for the foreseeable future. As a result, we have decided to divest those businesses that were originally acquired to serve as platforms for future acquisitions but cannot do so in today's market, or whose operations have failed to achieve our strategic goals. We believe that, following this restructuring, we will be substantially de-leveraged and in a position to realize the tremendous value that lies within our Aerospace Products segment and our assembly fastener business."

The company also announced that it had retained Evercore Partners, a New York City based investment banking firm, as its financial advisor to assist the company in exploring strategic and business initiatives following the completion of its restructuring. Mr. Berthelot said, "We are looking forward to working with Evercore in the development and evaluation of these initiatives."

For the fiscal 2001 third quarter that ended December 31, 2000, TransTechnology reported a net loss from operations of $1.3 million, or $.20 per share compared to net income of $2.9 million, or $.47 per share for the same period last year. Revenues for the third quarter of fiscal 2001 decreased 9% to $78.3 million from $85.9 million in the same quarter a year ago. All per share amounts are on a fully diluted basis, unless noted otherwise.

The company's Aerospace Products segment reported a 30% increase in operating income for the quarter on a 16% increase in sales. Results in the prior year's third quarter were impacted by a six-week work stoppage at the company's Breeze Eastern facility.

The company's Industrial Products segment reported a 64% decrease in third quarter operating income on 15% lower sales, primarily the result of the continuing weak operations at the UK retaining ring facility and reduced production schedules at domestic automotive and heavy-duty truck OEMs. The company's retaining ring business in Brazil reported higher sales and operating profits than in the prior year's period. The German retaining ring and hose clamp businesses reported higher operating profit on slightly lower sales. The company's U.S. assembly fastener, hose clamp, and retaining ring businesses all reported lower sales and/or operating profits in the third quarter, primarily due to their reliance upon the domestic automotive markets, which saw double digit decreases in production during the third quarter. The company's cold-headed products operation saw a decrease in revenues and operating income during the quarter as a result of the breakdown of a major piece of equipment and the associated repair costs and the slowdown in demand by automotive OEMs. The company's Aerospace Rivet subsidiary reported slightly lower sales but a significantly higher operating profit in the third quarter as a result of the $1.2 million arbitration award it received relative to a claim against its former owner. The company's UK retaining ring operation reported a 25% decrease in sales and a $.28 per share operating loss for the fiscal 2001 third quarter.

Mr. Berthelot commented "Heavy-Duty truck OEM's have substantially reduced production in our second and third fiscal quarters. Similarly, the major U.S. automakers have also implemented substantial cuts in production during our third quarter. These two end-user markets account for 45% of our annual sales, and their contraction has affected our hose clamp, assembly fastener, and cold-headed parts operations dramatically. We expect fiscal fourth quarter production schedules for each of these segments to be down even more, with automakers already aiming for almost 20% cuts compared to last year's fourth quarter. We have reacted promptly to this slowdown and have lowered employment levels at the affected operations by 145 people, or 12%, so far this fiscal year, while trimming capital expenditures and focusing on lowered working capital, especially inventories."

Mr. Berthelot continued, "Our UK operation has started to make some progress towards returning to profitability, but a long road remains ahead. Employment at the UK facility has been reduced from 585 in mid-December to 442 as of January 14, and production levels and customer arrears have stabilized at more acceptable levels. Quality is improving, reducing rework and scrap. The consolidation of the two companies' inventories is almost complete after recognizing over $1 million of write-offs of duplicate and excess parts over the past three quarters. In spite of this progress, however, we do not expect the UK operation to return to profitability until the second quarter of fiscal 2002, although the operating loss is expected to decrease dramatically in the fourth quarter and into next fiscal year's first quarter."

Joseph F. Spanier, Vice President and Chief Financial Officer, said "As a result of the operating losses in the UK, magnified by the current slowdown in our domestic auto and heavy-duty truck market units, at the end of the third quarter we entered into an amendment of our senior credit agreement, which incorporated a forbearance, in order to avoid violating three covenants of that agreement. We are seeking an amendment of our credit facilities that will eliminate the possibility of such covenant violations. During the third quarter we paid down the debt by a net $3.4 million."

TransTechnology Corporation is a multi-national manufacturer of specialty fasteners and aerospace products with more than 2,300 employees at its 14 manufacturing facilities in the U.S., Canada, England, Germany and Brazil. The company also maintains sales offices in Southfield, Michigan; Paris, France; and Barcelona, Spain.

INFORMATION ABOUT FORWARD-LOOKING STATEMENTS

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

The forward-looking statements in this press release are based on current beliefs, estimates and assumptions concerning the operations, future results, and prospects of the Company. As actual operations and results may materially differ from those assumed in forward-looking statements, there is no assurance that forward-looking statements will prove to be accurate. Forward-looking statements are subject to the safe harbors created in the Exchange Act.

Any number of factors could affect future operations and results, including, without limitation, the Company's ability to arrive at a mutually satisfactory amendment of its credit facilities with its lenders; the Company's ability to dispose of some or all of the business operations proposed for divestiture for the consideration currently estimated to be received by the Company; in the event of divestiture, the Company's ability to be profitable with a smaller and less diverse base of operations that will generate less revenue; the value of replacement operations, if any; general industry and economic conditions; interest rate trends; capital requirements; competition from other companies; changes in applicable laws, rules and regulations affecting the Company in the locations in which it conducts its business; the availability of equity and/or debt financing in the amounts and on the terms necessary to support the Company's future business; and those specific risks that are discussed in the Company's previously filed Annual Report on Form 10-K for the fiscal year ended March 31, 2000.

The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information or future events.

                      TransTechnology Corporation
                 STATEMENTS OF CONSOLIDATED OPERATIONS
              (In Thousands of Dollars Except Share Data)

                      Three Months Ended           Nine Months Ended
                   12/31/00       12/26/99     12/31/00       12/26/99

Net sales          $ 78,297       $ 85,872     $241,798       $204,143
Cost of sales        59,165         60,246      179,264        143,537
Plant consolidation 
  charge                 --             --        2,113             --
                    -------       --------     --------       --------
  Gross profit       19,132         25,626       60,421         60,606

General, 
  administrative & 
  selling Expenses   14,252         14,339       42,538         37,263
Interest expense(a)   8,185          7,137       25,969         12,233
Interest income         (19)          (188)         (98)          (324)
Other income 
  - net(b)           (1,270)          (238)      (1,929)          (601)
Provision for 
  plant consolidation    --             --           --          4,490
                    -------       --------     --------       --------
  Income (loss) 
    before income 
    taxes and 
    extraordinary 
    charge           (2,016)         4,576       (6,059)         7,545

Income taxes 
  (benefit)            (766)         1,711       (2,302)         2,852
                    -------       --------     --------       --------
  Income (loss) 
    before 
    extraordinary
    charge           (1,250)         2,865       (3,757)         4,693

Extraordinary charge 
  for refinancing of 
  debt, net of taxes     --             --           --           (541)
                    -------       --------     --------       --------
Net income (loss)   $(1,250)       $ 2,865      $(3,757)       $ 4,152
                    =======       ========     ========       ========

Basic Earnings 
 per Share:
Income (loss) 
  before 
  extraordinary 
  charge             $(0.20)         $0.47       $(0.61)         $0.77
Extraordinary 
  charge for 
  refinancing 
  of debt                --             --           --          (0.09)
                    -------       --------     --------       --------
Net income (loss)    $(0.20)         $0.47       $(0.61)         $0.68
                    =======       ========     ========       ========

Diluted Earnings 
 per Share:
Income (loss) 
  before 
  extraordinary
  charge             $ (0.20)        $0.47       $(0.61)         $0.77
Extraordinary 
  charge for 
  refinancing
  of debt                 --            --           --          (0.09)
                    --------      --------     --------       --------
Net income (loss)    $ (0.20)        $0.47       $(0.61)         $0.68
                    ========      ========     ========       ========

Weighted average 
  basic shares     6,172,000     6,141,000    6,165,000      6,135,000
Weighted average 
  diluted shares   6,172,000     6,141,000    6,165,000      6,150,000

    (a) The interest expense for the nine month period ended December
        31, 2000 includes a $2.3 million charge related to loan fees
        associated with the refinancing of the Company's bridge debt.

    (b) Other income for the three and nine month periods ended
        December 31, 2000 includes an arbitration award in the amount
        of $1.2 million related to the Aerospace Rivets Manufacturers
        business.


                          SEGMENT INFORMATION
              (In Thousands of Dollars Except Share Data)

                    Three Months Ended           Nine Months Ended
                  12/31/00        12/26/99     12/31/00       12/26/99

Sales:
  Specialty 
    fasteners      $59,646         $69,804     $192,176       $161,323
  Aerospace         18,651          16,068       49,622         42,820
                   -------         -------     --------       --------
                   $78,297         $85,872     $241,798       $204,143
                   =======         =======     ========      =========

Operating profit:
  Specialty fasteners
    (a), (b)       $ 3,610         $ 9,988      $15,785        $15,682
  Aerospace          5,031           3,857       11,869         10,062
                   -------         -------     --------       --------
                     8,641          13,845       27,654         25,744

Corporate expenses  (2,472)         (2,132)      (7,744)        (5,966)

Interest expense(c) (8,185)         (7,137)     (25,969)       (12,233)
                   -------         -------     --------       --------

Income (loss) 
  before income 
  taxes and 
  extraordinary 
  charge           $(2,016)        $ 4,576     $ (6,059)       $ 7,545
                   =======         =======     ========      =========

    (a) The results of operations of the Specialty Fasteners Products
        segment for the three and nine month periods ended December
        31, 2000 include an arbitration award related to the Aerospace
        Rivet Manufacturers business in the amount of $1.2 million.

    (b) The results of operations of the Specialty Fasteners Products
        segment for the nine month periods ended December 31, 2000 and
        December 26, 1999 included a charge of $2.1 million and $4.5
        million, respectively, related to the consolidation of its two
        U.K. plants.

    (c) The interest expense for the nine-month period ended December
        31, 2000 includes a $2.3 million charge related to loan fees
        associated with the refinancing of the Company's bridge debt.

                       BALANCE SHEET INFORMATION

                                      12/31/00            3/31/00  

Current assets                       $ 124,774          $ 134,727 
Property, plant & equipment - net       98,156            106,020 
Costs in excess of net assets 
  of acquired businesses               188,369            192,115 
Other assets                            51,570             49,893
                                     ---------          ---------
Total assets                         $ 462,869          $ 482,755
                                     =========          =========


Callable long-term debt              $ 276,903            $82,585 
Other current liabilities               39,913             50,380
                                     ---------          ---------
Total current liabilities              316,816            132,965 
Long-term debt                           1,063            194,759 
Other liabilities                       22,273             26,148 
Shareholders' equity                   122,717            128,883
                                     ---------          ---------
Total liabilities and 
  shareholders' equity               $ 462,869          $ 482,755
                                     =========          =========