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Berkline/BenchCraft to recapitalize

Move will result in new majority owner

Larry Thomas -- Furniture Today, March 23, 2007

MORRISTOWN, Tenn. — Upholstery major Berkline/BenchCraft announced a comprehensive recapitalization plan today that will give the company a new owner and more than $40 million in new financing.

In addition to the new financing, $40 million in existing debt will be swapped for new equity in the company.

“This agreement reflects our stakeholders confidence in our ability to not only remain competitive in our market segment but also to position ourselves for continued profitable growth,” said Bill Wittenberg, president and CEO. “This new financing solidifies Berkline’s status as a premier manufacturer of upholstered furniture in North America.”

Once the recapitalization package is finalized in about 30 days, Wittenberg said a majority of the equity will be owned by “a leading private equity investment firm.” He said the firm has asked that its name not be disclosed until the deal is completed.

The investment firm of Code Hennessy & Simmons has been the majority owner since March 2002, when Berkline and BenchCraft were spun off from LifeStyle Furnishings International.

Wittenberg said Code Hennessy may retain a small equity stake in Berkline/BenchCraft when the recapitalization is finalized, but would no longer be the majority owner.

“We are now poised to take Berkline to a new level,” he said. “We will continue our efforts to successfully execute the numerous initiatives at hand, and (we) intend to be more aggressive in our pursuit of the marketplace.”

In the past nine months, the company has closed or consolidated operations at four factories, eliminated numerous SKUs from its product offerings, and cut costs through more efficient offshore sourcing and integration of its manufacturing facilities and systems.

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Berkline/BenchCraft to recapitalize

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