Nailite International Inc. has filed for Chapter 11 bankruptcy protection and is preparing to sell its assets to the highest bidder, as company officials work to keep the injection molder solvent in an unforgiving economy.
The Miami-based maker of polypropylene siding panels designed to mimic cedar shake and masonry products is owned by Philadelphia-based investment firm Graham Partners Inc., which bought Nailite in the second quarter of 2003.
Nailite filed for Chapter 11 in U.S. Bankruptcy Court in Wilmington, Del.
A Graham affiliate, Premier Exteriors LLC, will serve as a stalking-horse bidder during the sale process, which means Premier will end up as Nailite's owner should no other company submit a better bid. Premier is providing $3 million in debtor-in-possession financing that will keep Nailite operating through April 17, according to court documents.
The company is in a much more stable position. We were able to give the company room to operate and secure financing needed to complete customer orders, Graham principal Josh Wilson said in a Feb. 18 telephone interview.
The Nailite technology and brand equity are strong enough that Wilson believes the firm will stay whole following this stint in Chapter 11.
Our effort here is to the keep the company viable, he said.
Nailite's year-over-year profit fell 176 percent from the fourth quarter of 2007 to the same period in 2008. According to the company, the three-digit plunge was a direct result of a wretched home construction industry. Nailite sales are overwhelmingly geared toward residential construction, split almost evenly between new construction and remodeling projects, Wilson said.
The housing market is, and has been, so bad that it just finally caught up, he said.
The company has between $50 million and $100 million in assets and debts, according to the bankruptcy filing.