EveryWare Global said it is temporarily halting production at its two U.S. plants, including the Anchor Hocking plant in Monaca, in order to preserve cash while the Lancaster, Ohio, company negotiates with creditors over a loan default.
The company did not disclose the number of hourly and salaried employees who will be idled for three to four weeks. It said certain employees are being furloughed without pay.
Halting production will preserve cash and work off existing inventory, which will be used to fill orders, the company said.
On Thursday, EveryWare reported a first quarter loss of $38.3 million, or $1.87 cents per share vs. earnings of $197,000, or 2 cents per share, in the year-ago quarter. Revenue fell 5 percent to $94.8 million..
The company blamed the loss on a number of factors including a $20.7 million tax-related impairment charge and severe winter weather, which resulted in higher utility costs. It also cited higher severance expenses and fees paid to consultants who are developing cost savings initiatives.
EveryWare said it is expanding the role of Alvarzez & Marsel, a turnaround consultant that is advising the company on cost reduction and efficiency measures.
The company said it is in default on a $250 million loan and has until May 30 to convince lenders to either waive the default or agree to new terms. Cash generated by operations and other available credit “are not expected to be sufficient to fund our operations in the near future,” the company said in a press release.
Production is expected to resume in three or four weeks, but the timing depends on several factors, including how talks with lenders go, the company said.
In early trading, EveryWare shares were down 51 cents to 87 cents. They are off 69 percent this year.
Len Boselovic: 412-263-1941 or firstname.lastname@example.org First Published May 16, 2014 7:27 AM