O'Sullivan emerges from Ch. 11
By Larry Thomas -- Furniture Today, April 16, 2006
Roswell, Ga. — Ready-to-assemble furniture producer O'Sullivan Inds. has emerged from Chapter 11 bankruptcy protection with a new financing package and a new board of directors.
The company said it closed on a $50 million revolving credit agreement and immediately drew out $27.3 million.
That money will be used to repay its debtor-in-possession loans, pay expenses related to the bankruptcy proceedings, and provide working capital, the company said.
"O'Sullivan emerges from Chapter 11 with new ownership, a very manageable debt load, leaner more efficient operations, and a renewed focus on customers and consumers," said Rick Walters, interim CEO.
The company filed for Chapter 11 protection on Oct. 14. Most of the reorganized company's equity is now held by bondholders of the old company.
A few days before exiting Chapter 11 protection, O'Sullivan filed its Form 10-K for its last fiscal year, which ended June 30.
For that year, sales totaled $249.9 million, a drop of 7% from the previous fiscal year. The company recorded a net loss of $74.7 million — nearly double its net loss for the previous year. The losses included dividends and accretion on preferred stock of $18.9 million in fiscal 2005 and $12.4 million in 2004.
The 10-K included a "going concern" qualification from O'Sullivan's auditor, PricewaterhouseCoopers. The auditor's report said the "recurring sales declines, a loss from operations and reduced cash flow raise substantial doubts about the company's ability to continue as a going concern."
In addition to Walters, members of the board of directors are Tom Shandell, founding partner and portfolio manager of GoldenTree Asset Management; Michael Ranson, director of GoldenTree's Capital Solutions Group; Eugene Davis, chairman of Pirinate Consulting Group; and James Malone, founding managing partner of Qorval LLC.
| O'Sullivan Inds. | |||
|---|---|---|---|
| All figures in parentheses are losses or declines. | |||
| Year ended 6/30 | 2005 | 2004 | Change |
| (a) Includes charges for restructuring or asset impairment of $8.5 million in 2005, and a casualty gain of $490,000 in 2004. |
|||
| Sales | $249,897,000 | $268,829,000 | (7.0%) |
| Operating income | (11,349,000) | 8,702,000 | — |
| Net income (a) | (74,738,000) | (39,848,000) | — |
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O’Sullivan exits Chapter 11
Apr 13, 2006
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