A slump in manufactured housing has forced the winding down of Kevco Inc., a major component supplier to the market.
The Fort Worth, Texas, firm recently agreed to sell its two thermoforming businesses that supply manufactured housing and recreational vehicle producers. The agreements come about two months after Kevco voluntarily filed Feb. 5 for protection under Chapter 11 of the U.S. Bankruptcy Code.
At that time, Kevco said industry shipments of manufactured housing were down 26 percent for the first 10 months of 2000, following a slowdown in 1999.
On April 5, Drew Industries Inc. said it agreed to buy Kevco's Better Bath division for $10 million and assumption of certain contracts. Better Bath of Waxahachie, Texas, thermoforms shower units and related products for manufactured housing. It had sales of $27.7 million last year.
White Plains, N.Y.-based Drew said it expects to integrate Better Bath with its Kinro Inc. subsidiary, a window and other component producer for manufactured housing and recreational vehicles based in Arlington, Texas.
Leigh Abrams, Drew president and chief executive officer, said in a telephone interview that his firm is bidding for Better Bath as a long-term investment.
"We hope [the manufactured housing industry] is near bottom and will recover over the next several years," Abrams said.
Thermoforming will be a new process for Drew. Its other division, Lippert, makes metal components and supplies tires for recreational vehicles.
In the other Kevco deal, announced April 3, the firm said it agreed to sell its Duo-Form division to a management-led group for $5.5 million. Duo-Form of Edwardsburg, Mich., focuses on thermoformed parts for recreational vehicles. Duo-Form had sales of about $10 million last year, Joseph Tomczak, Kevco executive vice president and chief financial officer, said in a telephone interview.
Once the two sales are done, Tomczak said, Kevco will be left with only a small distribution business. Earlier this year it sold its Design Components division, a manufacturer of laminated wood fiber and gypsum board and agreed to sell off its Sunbelt Wood Components division.
Kevco filed its sales plans in U.S. Bankruptcy Court in Fort Worth. The court will hear the Better Bath and Duo-Form proposals in late April. Competing bids also may be heard.
Kevco entered plastic component manufacturing in 1997 when it bought Shelter Components Corp. of Elkhart, Ind. Kevco was established in 1964. For its third quarter, ended Sept. 30, it had a loss of $9.3 million on sales of $137 million. In the same period in 1999, Kevco lost $26 million on sales of $208 million.'