Vinyl window maker Thermoview Industries Inc. has filed for Chapter 11 protection, after struggling under a mound of debt and five consecutive years of sales declines.
The company filed Sept. 26 in U.S. Bankruptcy Court in Louisville, Ky. Thermoview also announced a deal to sell the company to Washington-based Milestone Capital Management LLC.
Milestone has signed a purchase agreement subject to auction bidding and court approval.
Thermoview has struggled since its initial public offering in 1999, when the firm only raised about $3.5 million, said Charles Smith, Thermoview's president and chief executive officer, in a Sept. 28 telephone interview. The company's initial strategy focused on an aggressive acquisition plan to build a vertically integrated vinyl window business with plans to acquire in manufacturing, retail and finance.
Thermoview's growth spurt included buying 14 companies - three manufacturing and 11 retail operations. It since has scaled back on manufacturing and eliminated its finance unit, according to its 2004 annual report.
``It was a really good plan; the problem was that they borrowed $54 million to buy all these companies,'' Smith said. ``Almost all of that was acquisition capital.''
Smith came in with a new management team in 2000. They shifted the company's focus to developing its retail arm.
``We were just never able to get ahead of the game,'' he said. ``We just constantly were backing up and regrouping. I feel like the core businesses have done very well during this period of time, but it's just like we have not had a break.''
With its senior debt due by June 2006, the company was running out of time, he said. Under the restructuring, the company has no planned management changes or plans for layoffs that would affect its 700 employees.
``It is our intention and belief that we will continue to operate as near normally as possible during this time,'' he said.
Thermoview also wants to maintain a joint venture with Royal Group Technologies Ltd. of Woodbridge, Ontario, through which the companies extrude composite ABS lineals.
Thermoview does roughly $68 million in sales, with 70 percent in vinyl windows and siding.