Quaker Likely to Liquidate
July 9, 2007-- Home Textiles Today,
Woven upholstery and jacquard fabric manufacturer Quaker Fabric said it plans to liquidate its business.
Quaker said in a prepared statement that it "has not met the requirements for committed borrowings under its existing lending facilities and, as a result, any advances to the company by its revolving lenders will only occur on a discretionary basis."
Quaker called it "likely" that it will commence "an orderly liquidation of its business and a sale of its assets."
The company, founded in 1945, further said it is "actively investigating sources of alternative liquidity, including debt, equity or a combination of debt and equity financing. There is significant uncertainty as to whether the company will be able to obtain sufficient liquidity from alternative sources to continue its operations after its annual shutdown period, which this year runs from July 2 through July 15, 2007."
"The company expects that any such winding up and liquidation would not generate sufficient funds to permit any payment to holders of its common stock," the notice concluded.
Quaker reported net sales of $151.7 million for 2006, with a net loss of $37.6 million. That was a worsening of the year-prior performance, when the troubled company recorded a net loss of $26.3 million on sales of $224.7 million.
Larry Liebenow, president and ceo, had blamed the company's woes mainly on margin erosion and sales loss to imports. He had guided Quaker through a number of steps including a joint venture in China, the migration of business to higher-margin goods, and the sell-off of underutilized physical assets.
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