Summitville, OH, December 14-- The struggling tile manufacturer Summitville Tiles announced Friday it has emerged from bankruptcy protection, according to the Lisbon Morning Journal.
In a press release issued by the company, the company announced that it had emerged from bankruptcy 12 months after it entered the bankruptcy phase.
"Summitville Tiles' emergence out of Chapter 11 in just 12 months has been very much a team effort made possible through the extraordinary support, dedication and hard work of every employee in the company," the release stated.
"The 250 employees who were spared from our earlier layoffs have not had a raise in four long and hard years. The entire management team not only shared in this wage freeze, but took a 30 percent reduction in their compensation.
"Though the company has maintained its 401K plan, it was forced to freeze its Defined Benefit Retirement Plan. All in all, enormous sacrifice was required of every single employee in the company."
The emergence from bankruptcy has saved $6 million of annual payroll, more than $1 million in health care contributions and $10 million in retirement and 401K assets, according to the release.
"Above all else, we have a fighting chance to earn our way back to being the kind of company that we have been for the past 92 years," the release stated.
The company's operating model will focus on core product lines for which it is best known and which can be produced profitably, including quarry tiles, industrial floor brick, thin brick and soon ceramic roofing tile. Also, Summitville Laboratories will remain, producing a full line of ceramic tile installation materials.
A $1.1 million capital improvements program including $320,000 in direct grants from the state of Ohio and $780,000 in low-interest loans will improve tunnel kiln productivity, first quality recoveries and yields from the mills and provide an expanded-capacity production line improving production scheduling efficiency. The line, the final phase, is scheduled for the first quarter of 2005.
By filing for bankruptcy, the company could restructure its stranded debt with its secured and unsecured creditors and complete the rehabilitation of the company's operational performance.
"With the newly constituted company being one third the size it was four years ago, a reduced debt structure simply had to be put in place in order for us to survive," the release stated. "It contemplates a pay-off of the company's 900 plus unsecured creditors over a three and one half year time frame ... with these creditors receiving a significant percentage of cash flow above what the company needs to operate.
"It contemplates the company's secured creditors, its lenders, receiving repayment of their debt over a period of five years. And the shareholders, the Johnson family, fully surrendering their claim of subordinated debt and making a significant contribution to equity in order to ensure that the family maintains 100 percent control over the company."
"We are eternally grateful to everyone else outside of the corporate family who have helped us during our time of need," the release stated.
