---------------------------------------------------------------[00000] HOW TO SUBSCRIBE TO WERNER LADDER BANKRUPTCY NEWS
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WERNER LADDER BANKRUPTCY NEWS is distributed to paying
subscribers by electronic mail. New issues are published on an
ad hoc basis as significant activity occurs (generally every
10
to 20 days) in the Debtors' chapter 11 proceedings. The
subscription rate is US$45 per issue. Newsletters are delivered
via e-mail; invoices, transmitted following publication of each
newsletter issue, arrive by fax. Re-mailing of WERNER LADDER
BANKRUPTCY NEWS is prohibited. Distribution to multiple
individuals at the same firm is provided at no additional charge;
folks outside of your firm should set-up and pay for their own
subscriptions. Subscriptions may be canceled at any time
without
further obligation.
---------------------------------------------------------------[00001] BACKGROUND & DESCRIPTION OF WERNER HOLDING CO.
---------------------------------------------------------------Werner Holding Co., (PA), Inc.
93 Werner Rd.
Greenville, Pennsylvania 16125
Telephone (724) 588-2550
http://www.wernerladder.com/
Werner is the largest manufacturer and marketer of ladders and
other climbing equipment in the United States.
Werner Holding Co., (PA), Inc., is the parent of Werner Holding
Co., (DE), Inc., which, in turn, is the parent of Werner Co.
Werner PA and Werner DE have no substantial operations. Werner
Co. is the principal operating company. WIP Technologies, Inc.,
a wholly owned subsidiary of Werner Co., holds the intellectual
property for the Company.
Werner produces five principal categories of climbing equipment:
(1)
(2)
(3)
(4)
(5)
single and twin stepladders;
extension, fixed and multipurpose ladders;
attic ladders;
stages, planks work platforms, and scaffolds; and
assorted climbing product accessories.
Larry V. Friend, vice president, chief financial officer and
treasurer of Werner Holding Co. (DE), Inc., relates that majority
of the Company's climbing product sales are of either aluminum
or
fiberglass ladders.
Werner's climbing products are sold directly to customers and
through approximately 45 independent, commissioned
manufacturer's
representative organizations, which sell to four major
distribution channels:
(1)
(2)
(3)
(4)
home improvement
hardware
professional
other retail
Lowe's Companies, Inc. (NYSE: LOW), with nearly 1,100 retail
stores in 48 states, is Werner's largest customer. Lowe's
accounted for nearly 1/3 of the home improvement retailer's 2004
sales. Home Depot, Inc. (NYSE: HD), which accounted for about
1/4 of 2003 sales, gave Werner the boot in early-2004, when it
started importing cheaper ladders directly from China.
The Company's principal executive offices is in Greenville,
Pennsylvania.
As of June 12, 2006, Werner employed 1,189 salaried and hourly
employees.
The Company operates manufacturing facilities in:
(1) Chicago, Illinois
(2) Merced, California
(3) Juarez, Mexico
Werner maintains numerous distribution facilities throughout
the
United States.
Mr. Friend reports that for the year ending December 31, 2005,
the Company's audited net sales, on a consolidated basis, total
$472,354,000. As of March 31, 2006, the Company's unaudited
balance sheet reflected total assets, on a consolidated basis,
of
$201,042,000 and total liabilities of $473,447,000.
Road to Bankruptcy
Mr. Friend notes that the Werner entities are highly leveraged
and are facing the maturity of significant portions of debt in
their current capital structure. The Company is also in the
process of undergoing a significant operational restructuring,
which includes transferring operations to a new facility in
Juarez, Mexico. Werner, a major consumer of aluminum, has
experienced significant constraints on profit margins and
liquidity as the market price for aluminum has increased
dramatically.
Werner brought experts on board to help solve its financial
problems. Specifically, the Company retained Rothschild, Inc.,
as its financial advisors and investment bankers, and Loughlin
Meghji & Company, as its restructuring consultants to assist
them
in identifying and considering options relating to refinancing,
raising new capital and restructuring existing debt.
According to Mr. Friend, Rothschild and LM+Co have explored outof-court restructuring options and have entered into discussions
with Werner's prepetition lenders to pursue a consensual
restructuring of its debt. The Company has pursued other
alternatives to improve its liquidity position, including the
sale of certain business segments and other assets. However,
due
to its current liquidity constraints, Mr. Friend says, Werner
is
forced to seek to reorganize utilizing the protections available
to them under Chapter 11 of the Bankruptcy Code.
---------------------------------------------------------------[00002] WERNER HOLDING'S BALANCE SHEET AS OF SEPTEMBER 30, 2005
---------------------------------------------------------------WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 2005
Assets
Current assets:
Cash and cash equivalents
Accounts receivable
Allowance for doubtful accounts
Note receivable from related party
Income taxes receivable
Inventories
Deferred income taxes
Other
Total current assets
Property, plant and equipment, net
Other assets:
$718,000
51,007,000
7,617,000
66,902,000
3,887,000
-----------130,131,000
-----------108,964,000
------------
Deferred income taxes
Deferred financing fees, net
Other
Total other assets
Total assets
13,095,000
7,333,000
-----------20,428,000
-----------$259,523,000
============
Liabilities
Current liabilities:
Accounts payable
Accrued liabilities
Current maturities of long-term debt
Total current liabilities
Long-term obligations:
Long-term debt
Reserve for product liability and
workers' compensation claims
Other long-term obligations
Total liabilities
Convertible preferred stock
$24,848,000
34,313,000
1,563,000
-----------60,724,000
-----------344,598,000
42,563,000
34,804,000
-----------482,689,000
-----------89,076,000
------------
Shareholders' deficit:
Common stock
Additional paid-in-capital
Accumulated deficit
Accumulated other comprehensive loss
Notes receivable arising from
stock loan plan
Total shareholders' deficit
1,000
28,531,000
(326,054,000)
(14,344,000)
(376,000)
-----------(312,242,000)
-----------Total liabilities, preferred stock
and shareholders' deficit
$259,523,000
============
---------------------------------------------------------------[00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING
---------------------------------------------------------------* $99 Million Debtor-In-Possession Financing Commitment
from Black Diamond Commercial Finance To Support
Continued Operations
* Will Complete Operational Restructuring Plan Already
Underway
* Company Will Seek to Implement a Capital Structure That
Provides Long-Term Financial Flexibility
GREENVILLE, Pennsylvania -- June 12, 2006 -- Werner Co.
announced today 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 underway. 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 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
underway. In the past few years, we have moved significant
production to Mexico and China in an effort to become the lowcost 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 number one
choice for the professional end user."
He continued, "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."
Mr. Richman concluded, "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,
wellpositioned 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 today 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/
About Werner
Werner Co. is the world's leading manufacturer and
distributor of ladders, climbing equipment and ladder
accessories. Backed by over 50 years of product innovation,
Werner leads the industry with its commitment to the design and
manufacture of quality products that meet or exceed applicable
Occupational Safety and Health Administration (OSHA) and
American
National Standards Institute (ANSI) codes and standards for
strength and structural integrity. Werner is headquartered in
Greenville, Pennsylvania.