Werner Company, the world's leading manufacturer and distributor of ladders, climbing equipment and ladder accessories, announced June 12 that it and several affiliated companies have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Werner has taken this action to implement a financial restructuring that will provide the financial flexibility and support to complete the operational restructuring already under way. Werner's strategy is to become the low-cost producer of ladders and other climbing products and leverage the Werner brand to drive future growth.
Werner, headquartered in Greenville, Pa., expects to continue to operate in the normal course of business during the Chapter 11 reorganization process. All of the company's manufacturing and distribution facilities are open and continuing to serve customers in the normal course.
To help fund its operations during the reorganization process, Werner has secured a commitment for $99 million in debtor-in-possession (DIP) financing from Black Diamond Commercial Finance. Subject to court approval, these funds will be available to satisfy obligations associated with conducting the company's business, including payment to suppliers under normal terms for goods and services provided after the Chapter 11 filing and payment of wages and benefits to employees and independent sales representatives.
Steven P. Richman, Werner's president and chief executive officer, said: "The strategic repositioning of Werner is well under way. In the past few years, we have moved significant production to Mexico and China in an effort to become the low-cost provider of climbing products. We have revitalized our product development team, resulting in the planned rollout of 15 new products and brand extensions over the next year. The Werner brand is stronger than ever and it is clearly the No. 1 choice for the professional end user. In recent years, however, Werner has been constrained by its highly leveraged capital structure and by the continuing unprecedented high prices for aluminum and other raw materials. Quite simply, we have too much debt. We intend to use the Chapter 11 process to reduce this debt significantly and develop and implement a new capital structure that will allow us to invest in the business. Fortunately, the fundamentals of our business remain strong and provide an excellent foundation for the future. We expect that Werner will emerge from its Chapter 11 reorganization a stronger, more financially stable company, well-positioned for profitable growth."
Werner expects its operations to function normally during the Chapter 11 process, with little impact on how it conducts business:
* Customers will be served in the normal course. Werner's manufacturing and distribution facilities are open on normal schedules, and the company expects to continue to fulfill customer orders and provide uninterrupted customer service.
* Suppliers will be paid. Werner plans to continue paying suppliers for all goods and services they provide after the filing.
* Employees will continue to be paid. Werner plans to provide all wages and benefits for active employees as usual and without interruption. Likewise, the company plans to provide its independent sales representatives with their usual commissions on a timely basis.
The Chapter 11 filings by Werner and its affiliates were made June 12 in the U.S. Bankruptcy Court for the District of Delaware. Werner's principal legal advisors for the Chapter 11 proceedings are Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor LLP. The Company's financial advisors are Rothschild Inc. with Loughlin Meghji + Co. assisting Werner with its operational restructuring.
More information about Werner's reorganization is available on the company's Web site at http://www.wernerladder.com/.