CHICAGO--()--The management of Republic Windows & Doors today announced the following chronology of the company’s discussions with its lender Bank of America."
|10/16/08||■ Republic presents plan for “orderly” wind down including ceasing manufacturing in January 2009. INFORMS BANK OF AMERICA OF POSSIBLE WARN ACT NOTICE ISSUES AND VACATION PAY.|
|10/15/08||■ Informed Bank of America that Republic had a 10/24/08R buyer for the existing Note for ±$3.0M, discount of $1.5M.|
|10/15/08||■ Offer rejected by Bank of America stating they believed they were “over” collateralized.|
|10/15/08||■ Bank of America demands plans for “orderly” wind down Republic.|
|10/18/08||■ Bank of America rejects plan and demands a shorter wind down period.|
|10/27/08||■ Republic responds with a new plan to cease operations January 2009.|
|10/29/08||■ Bank of America rejects plan.|
|11/25/08||■ Republic requests permission from Bank of America to issue vacation pay to all employees.|
|11/26/08||■ Bank rejects Company request to make vacation pay.|
Conditions Precedent to “Current”
|07/2008||■ Republic obtains equity infusion from a capital fund which over time ultimately grows to ±$11,000,000. This capital is used to retire existing secured debt of ±$8,000,000 and other senior lenders as well as finance ongoing operations and cash “burn”.|
■ New secured debt is obtained from Bank of America.
|■ Sales||Remodeling||New Construction||Total|
|(in millions $)|
■ No one could have predicted the unprecedented drop in new construction sales due to the unprecedented economic conditions.
■ Republic moves to new headquarters on Goose Island.
|2002||■ Company reports first loss in history.|
|■ Loss history|
Results from Previous Management Team
|2006-07||■ Richard Gillman, previously a minority shareholder buys out all other partners assumes all debt obligations and adds ±$2,200,000 of his personal funds to add capital to the business; installs new COO from outside of the company.|
|2006-07||■ Fixed expenses are reduced $18.9 mm, or 47%.|
|02/2007||■ Productivity increased ± 30%.|
|02/2007||■ Gillman secures new capital.|
|11/2008||■ Gillman family forms Echo Windows, LLC.|
Despite inheriting a company bloated with overhead and lacking any type of manufacturing discipline and/or productivity, the company makes significant improvements only to encounter and unprecedented decline in new home construction, which led to a decline of company sales to new construction of 80%. This placed the company in the impossible position of not having the ability to further reduce fixed costs, coupled with severe constrictions in the capital debt markets and an unwillingness of the current debt holder to continue funding the operations."