Katy Industries Inc. is consolidating its Contico injection molding operations in St. Louis, closing one plant and relocating its business to another facility in the same area.
Also, the company is reorganizing to divide consumer and commercial products. To push the company in that direction, Katy named Dave Rahilly president of consumer products and Tom Burns president of commercial products. Burns formerly worked at Newell Rubbermaid. Both will report to C. Michael Jacobi, Katy Industries' president and chief executive officer.
Katy bought Contico International Inc. for $165 million back in September 1998 and added it to more than a dozen businesses.
Overall sales for Katy reached $598 million in 1999, but dropped to $505.9 million in 2001, reflecting the economic slowdown. Katy responded by reshaping the company.
On June 30, Katy shut down Contico's Warson Road manufacturing facility, consolidating its operations in an 800,000-square-foot complex it already operates. A total of 19 jobs were eliminated.
According to Amir Rosenthal, Katy Industries' chief financial officer and vice president, the consolidation was made to improve efficiency. Some administrative and nonmanufacturing functions still are being done at Warson Road. Contico still has three facilities in the St. Louis area.
Katy Industries has been reshuffling its lineup since May 2001 when it sold Thorsen Tools, a distributor of nonpower hand tools. In late 2001 Katy moved its headquarters from Englewod, Colo., to Middlebury, Conn. In April 2002 it exited a waste-to-energy plant joint venture.
During the second quarter of 2001, Contico paid out severance benefits totaling $1.6 million to 43 employees whose jobs were terminated.
The company is about midway through its restructuring, according to Rosenthal, and now is implementing changes offered by a consulting firm.
On Aug. 9, Katy reported a net loss of $6.6 million for the second quarter of 2002, an improvement over a $31.6 million net loss for the second quarter of 2001. Most of the loss was attributed to restructuring and other nonrecurring or unusual items.
``We are pleased that our restructuring efforts are showing results and sales have stabilized,'' Jacobi said in a news release.
Katy's sales are split evenly between consumer and commercial products.