Heywood Williams Group PLC, the parent company of Elkhart, Ind.-based RV industry supplier LaSalle Bristol, has announced the signing of a long-term financial restructuring agreement with its UK Banking Syndicate, the company reports. Upon shareholder approval, this will result in a $34 million debt exchange for equity and a $10 million increase in its credit facility.
Following the restructuring, the UK Banking Syndicate will hold 80% of the company’s issued share capital on a fully diluted basis with existing shareholders holding 10% and executive members of the board and certain other members of management holding the remaining 10%. ”This proposed restructure is very good news,” stated LaSalle Bristol President and CEO Richard Karcher. ”Our UK banks have demonstrated great confidence in the group, and its management team and in LaSalle Bristol. This restructuring strengthens our financial position while making more cash available to us for future growth. The UK Banking System clearly sees the value that LaSalle Bristol brings to the group and more importantly, the value that will be created in the future when our markets recover.
”In 2009 our cash generation has been superior,” Karcher said. ”Moving forward, our key emphasis will be to grow revenues, enhance our product offering, and continue to improve our service performance for our customers. Our management team has been given expanded roles and responsibilities that ensure we will accomplish these goals.”
The proposed restructuring will be voted on at at general meeting of shareholders on Tuesday, Oct. 20, with the last day of dealing in the shares slated for Nov. 20.
The board of directors of United Kingdom-based Heywood Williams Group, corporate parent of RV and manufactured housing supplier LaSalle Bristol, is in Elkhart, Ind., this week reviewing the group’s ongoing plans for supporting its market-leading distribution businesses.
Deriving its income from two industries hard hit by the recession, Elkhart-based LaSalle Bristol has survived those industries’ downturns and is rebounding, CEO Rick Karcher said during a press conference today (July 21) at the RV/MH Hall of Fame in Elkhart.
“We very much appreciate the support and the confidence of our parent company,” said Karcher. “We are very pleased that we were able to increase our credit line in January from $6 million to $10 million. Due to our cash flow in 2009, we have yet to tap our new line and have a substantial cash cushion that will see us through the deep recession in our markets.
“The extraordinary performance of the LaSalle Bristol team in serving our customers, while carefully managing costs and cash, will ensure that LaSalle Bristol will continue to serve these industries for many years to come.”
LaSalle Bristol supplies branded building products, especially plumbing, lighting, floor coverings and air flow systems to the RV, manufacturing housing and modular housing markets. It has 18 distribution centers and five manufacturing operations.
Karcher orchestrated the public event in part to celebrate that the company is “alive and will be around for a long time” and to quash rumors that Heywood Williams would seek to spin off the company due to the industry downturn.
Robert Barr, Heywood Williams CEO, quickly dispelled those rumors.
“Our objectives for 2009 and beyond will be achieved by the group outperforming its competitors and markets, continuing to reduce costs and, in particular, maximizing cash generation,” Barr said. “LaSalle Bristol has done an excellent job in these areas, most importantly in managing cash and increasing access to credit. We will continue to demonstrate our ongoing support for our businesses and for the industries they serve. We are in these businesses for the long-run and are committed to supporting them until their underlying markets recovery – as they inevitably will.”
It’s been a tough two years for Heywood Williams, which derives some 80% of its sales from the residential housing market. Sales worldwide have slumped some 40% over the past 18 months, Barr noted, but he said the deep decline has morphed into what he called “a fragile stability.”
He sees a world recovery in housing taking hold in 2011 and 2012.
For his part, Karcher said the fourth quarter of 2009 and the first quarter of 2010 will be “difficult” for LaSalle Bristol and it will be the second and third quarters of 2010 “before we see significant recovery” in the RV and manufactured housing industries.
LaSalle Bristol, which historically garnered 65% of its sales from manufactured housing, cut jobs “in every area of the company” starting in the end of 2006, going from 550 employees nationwide to about 335 today, Karcher said. Many of those jobs are in the Elkhart area. He does not anticipate any additional job cuts will be necessary. He said the company’s diversification into other markets helped as the RV industry declined over the past year.
Meanwhile, he’s noticed a slight upturn in business since April and said the LaSalle Bristol sales staff is doing a good job re-establishing business relationships as the former Monaco Coach Corp. and Fleetwood Enterprises Inc. RV businesses come under new ownership.
As part of the Heywood Williams board activities, it is visiting the company’s LaSalle Air Systems plant in Bristol, Ind. LaSalle Air Systems, headquartered in Lakeland, Fla., is one of LaSalle Bristol’s two manufacturing companies. It engineers and produces air distribution systems for system built housing and RVs. Its products include sheet metal ducts and fittings, flexible ducts and prefabricated duct board and components.
LaSalle Bristol’s other manufacturing company is BPC Manufacturing, an injection molding company in Plymouth, Ind., specializing in the production of faucets, sinks and plastic fittings.
The Heywood Williams board toured the Hall of Fame following the press conference. Jerry Pickrell, a 50-year industry veteran and retired LaSalle Bristol sales manager, led the tour.