UPDATED: Graphic Tool Corp., a mold maker in Itasca, Ill., owes third-party creditors $2.3 million and talks are underway to sell the award-winning business as a going concern.
Murray Lessinger, a trustee for the owners, said in a phone interview that there has been strong interest in the business, which has assets worth $1.71 million. He expects a sale will happen.
"This is a highly regarded business with strong relationships and an accomplished management group," said Lessinger, a managing partner at the Northfield, Ill.-based financial advisory firm White Oak Group. "The intent is to continue to operate the business through a sale of the going concern. Our employees continue to be in place. They are aware of our process and continue to be supportive."
Founded in 1982, Graphic has 32 employees building molds in a 17,500-square-foot facility with robotic manufacturing cells. This year the business won the Leadtime Leader Award from MoldMaking Technology. Joe Genc Jr., the company's global tooling manager who has 50 years of experience in the industry, was named Mold Builder of the Year by the American Mold Builders Association.
Lessinger would not comment on how the business got into financial trouble except to say, "Good company, bad balance sheet."
With estimated sales of $10 million, Graphic ranks 50th among North American mold makers, according to Plastics News' latest ranking. The company website says it makes injection molds for some of the world's largest brand names, including S.C. Johnson, Loreal and Pfizer, and it shows aerosol spray can lids, mascara wands, and prescription pill containers.
Unsecured creditors have until Nov. 10 to return a proof of claim. However, the senior secured lender, Inland Bank and Trust, is owed "far more" than the assets appear to be worth, Lessinger says in an Oct. 10 letter to creditors.
The asset of "work in process inventory" is worth $695,400 and the accounts receivable stand at $375,680, according to an unaudited balance sheet dated Oct. 3. Other assets include $24,500 in cash and $618,480 in property and equipment.
The other side of the balance sheet shows $2.7 million in current liabilities, including $1.78 million in customer deposits, $787,000 of accounts payable, and $110,400 of accrued payroll and vacation liabilities in addition to $2.8 million of long-term bank loans and credit.
Lessinger asks any creditor or group of creditors that want to purchase the assets, or know of anyone who might, to call him, adding, "The value of competitive bidding cannot be stressed enough."
In the meantime, he said: "There have been ongoing discussions. I have high confidence that we will successfully complete a sale of this ongoing business."