Werner Company announced January 16 that CEO James J. Loughlin Jr. sent a letter to employees announcing that Werner will emerge from Chapter 11 in the second half of 2007.
Werner Company is the world's leading manufacturer and distributor of ladders, climbing equipment and ladder accessories. The company is headquartered in
The complete text of the letter is set forth below:
Dear Werner Employee,
I am pleased to inform you that we are well on our way to completing the operational restructuring of Werner Company that has been under way for the last three years, and we expect to exit Chapter 11 later this year.
The past three years have been challenging, required a significant investment of resources, and we still have work to do to optimize our operation. We are on track, however, to become the low-cost manufacturer of ladders and leverage the Werner brand for future growth.
We are positioned to dramatically improve our operating results in 2007 and are in the process of completing our long-term business plans that will form the basis of our exit from Chapter 11. Our future is promising as we move forward with a more flexible and competitive organization.
When we emerge from Chapter 11 we expect to be a viable company with a fraction of the debt we have today. Werner has successfully lowered its production costs and will begin to reap the benefits of those reductions as early as the first quarter of 2007.
Aside from dramatically improved operating results, our plans for 2007 include improving our free cash flow before debt service by $75 million. Despite our recent challenges, we ended 2006 with $25 million of cash in the bank and an undrawn revolving line of credit, which was an important accomplishment.
We still have a great deal of work to do in order to reach all our goals; however, we have many strengths on which we will build for the future. New innovative products such as the Equalizer, and the Televator and Professional Workstations, have received great acclaim from our customers. Innovation, new products and a brand that has stood for quality for 56 years is a winning formula that will drive our future growth.
We have overcome serious challenges over the past two years. Record-high aluminum prices have hurt our profitability, but we are completing the process of right-sizing our cost structure to balance these higher costs. We look forward to becoming one of many companies that have been in Chapter 11 proceedings and emerged stronger and more competitive in recent years, including Dow Corning, Macy's, Circle K Corp., Continental Airlines, Texaco and Bloomingdale's.
Our lenders have been supportive of our efforts to restructure operations and are rooting for our success. Black Diamond Capital and Trust Company of the West have invested in Werner and are expected to participate in our emergence from Chapter 11 later this year. Furthermore, our vendors have been very supportive. We continue to receive favorable credit terms from most of our vendors and they are playing a key role in our manufacturing transition.
I was thrilled to accept the board's nomination to become CEO this past November, and pleased that my appointment received court approval late last month. Ed Gericke, selected by the board in November to be president of Werner, is a pleasure to work with and is well respected within the industry. I look forward to utilizing my 20 years of experience in complex corporate restructurings and value maximization at Werner, and working closely with the talented Werner team in the coming year.
Most importantly, I want to thank you, the employees of Werner Co., who have worked and continue to work diligently during this challenging time, continually demonstrating your loyalty and dedication. I know it has not been easy; however, largely because of your efforts Werner continues to enjoy the preeminent position in the climbing products industry. There is more hard work to be done, but I look forward to continuing to work together to serve our customers and bring innovation to the marketplace – our competitive strengths that will ensure our ongoing success for years to come.
Sincerely,
James J. Loughlin Jr.
CEO, Werner Company
