Plastics compounder, recycler, and packaging and garden hose maker Tekni-Plex Inc. of Somerville, N.J., may be planning to sell some assets to pay off debt.
Tekni-Plex, whose global businesses include PVC compounder Colorite Polymers, has hired investment banking firm Rothschild Inc. of New York as a financial adviser, according to a Nov. 14 news release. Tekni-Plex officials could not be reached for comment.
In the release Tekni-Plex said its financial options include sales/lease-backs, divestitures, debt refinancing and restructuring.
In its annual report for the 2007 fiscal year, ended June 29, the company reported total debt of $873 million.
For the quarter ended Sept. 30, Tekni-Plex reported a loss of almost $25 million, according to its Securities and Exchange Commission filing. Quarterly sales were flat at about $171 million.
The company lost more than $61 million in its 2007 fiscal year. It has lost a total of $284 million in its past four fiscal years, and the firm has not been profitable since 2003, when it reported profit of about $3 million.
Sales are a different story. Tekni-Plex's 2007 sales, at $773 million, marked a 4 percent gain over 2006. In total, sales are up almost 27 percent vs. fiscal 2003.
But raw material costs have taken a toll. In a recent SEC filing, Tekni-Plex officials said costs for PVC and plasticizers for its garden hose business were up 3 percent and 34 percent, respectively, as of September. As a result, officials said, the firm no longer guarantees garden hose pricing.
In July, Tekni-Plex cut almost 60 jobs at a garden hose plant in Bucyrus, Ohio, after losing business with Wal-Mart Stores Inc., a major long-term customer. Chairman and Chief Executive Officer F. Patrick Smith also recently reduced his annual salary from $4 million to $2 million.
The firm operates more than a dozen divisions - including Tekni-Films, PureTech Plastics, Dolco Packaging and American Gasket & Rubber Co. - and employs 3,200 at sites in North America, Europe and China.
Teki-Plex products include tubing, pharmaceutical film, liners, foam egg cartons and plates, meat trays and recycled PET.