A public company has acquired financially troubled Mi-Lor Corp., a family-owned maker of private-label toothbrushes and dental floss that had been trying to reorganize under Chapter 11 since March. NutraMax Products Inc. bought Mi-Lor's assets Oct. 23, including Mi-Lor's injection molds, for ``an inexpensive price,'' said Robert Burns, chief financial officer at NutraMax.
In May Mi-Lor, struggling to remain solvent, shut down its proprietary injection molding operations in Leominster, Mass., and began outsourcing that business to local molders, Burns said. The company had decided that the in-house molding was a cash drain, he said.
When the union shop closed, 65-70 workers and an undisclosed number of presses - ``antiquated technology,'' Burns said - were retired.
Unable to reorganize, Mi-Lor was faced with selling its oral-care business or filing for bankruptcy, Burns said.
Its sole U.S. competitor, Ranir/DCP Corp. of Grand Rapids, Mich., also mulled buying the company, but ``walked away from it,'' said Ranir President Barry Silverman. Ranir injection molds its own polypropylene packaging for private-label toothbrushes, dental floss and breathspray at a 210,000-square-foot headquarters plant in Grand Rapids. That plant employs about 90 and runs 20 molding machines.
Silverman said Ranir's in-house molding is cost-efficient for his firm, which does not disclose sales.
But, he said his firm lays claim to 95 percent and 85 percent of the private-label dental floss and toothbrush markets, respectively.
According to NutraMax, the Private Label Manufacturers Association puts the total retail sales for private-label toothbrushes at about $40 million, and dental floss at $16.5 million.
``No doubt we're doing the right thing,'' Silverman said of his firm's proprietary molding.
Although Mi-Lor's oral-care products are a first for NutraMax, they will blend easily into the latter's range of private-label health and beauty items and its customer base, Burns said. And NutraMax hopes to steal some of Ranir's market share by nurturing Mi-Lor's underdeveloped business, a business that, Burns said, ``has been neglected over the past two years.''
He believes NutraMax's broad product line will give it an edge over Ranir in dealing with both firms' private-label customers -drugstore and grocery chains and top mass retailers such as Wal-Mart Stores Inc. and Target Stores.
``Being No. 1 will not be too great a task to accomplish,'' Burns said.
Mi-Lor, which had sales of $11 million for its last full year before filing Chapter 11, manufactured oral-care products under its subsidiaries, Professional Brushes Inc. and Codent Dental Products Inc.
Besides its molds, NutraMax acquired Mi-Lor's inventory, accounts receivable and an 88,000-square-foot plant on 17 acres in Florence, Mass.
At that plant, 90 workers use machinery to insert bristles into pre-drilled plastic toothbrush handles and package dental floss, Burns said.
He said NutraMax does not intend to bring Mi-Lor's molding needs back in-house. In fact the Gloucester, Mass.-based firm always has farmed out its own injection molding, such as plastic tips for its douche and enema products.
Other plastic packaging it buys includes plastic bags for cough drops, and blow molded bottles for contact-care solution from Wheaton Plastic Productsof Mays Landing, N.J.
In Gloucester, NutraMax blow molds, fills and seals low and high density polyethylene packaging for such products as douches, pediatric electrolyte solution and diluent, using equipment from Automated Liquid Packaging of Chicago, Burns said.
NutraMax reported sales of $63 million for its fiscal year ended Sept. 30. For the same period it had profit of $4.5 million. The company, traded on Nasdaq, employs about 500.