HMI Announces Restructuring of Business
3 November 1997
HMI Announces Restructuring of Business
CLEVELAND, Nov. 3 -- HMI Industries Inc. today
released a series of announcements regarding the future direction of the
Company. Foremost among these is HMI's announcement today that it expects to
sell its subsidiary, Bliss Manufacturing Company. Bliss is a heavy metal
stamper to the automotive and heavy truck markets. HMI has engaged McDonald &
Company Securities, Inc. to provide financial advisory services in connection
with the proposed sale. The Company expects to identify a purchaser by the
end of December, 1997, and to complete the sale during the first quarter of
1998. Proceeds from the sale of Bliss will be used primarily to pay off the
Company's existing indebtedness.
The decision to sell Bliss comes after an extended analysis of how to best
maximize shareholder value. After consideration of various alternatives, HMI
has decided to pursue a strategy that separates its two disparate businesses
by selling Bliss, thereby allowing HMI to focus on growing its consumer goods
business around the world. The Company believes that Bliss Manufacturing,
which has posted record sales for the 1997 fiscal year, is an attractive
acquisition candidate in an automotive supply industry that is consolidating.
"The separation of the two core businesses, culminating with the sale of
Bliss, will allow the Company to turn all its energies and resources to its
direct sales business, thereby completing a process begun in May of 1997,"
said James R. Malone, Chairman and Chief Executive Officer.
Since May, HMI has laid the foundation to return the Company to profitable
growth. This effort has included four key elements: 1) lowering the cost
structure of the Company; 2) shortening the order to cash cycle times;
3) sharpening the Company's focus on core businesses; and 4) increasing sales
growth in all markets throughout the world.
Subsequently since May, HMI reduced the salaried and hourly personnel at
its consumer goods division significantly. With additional restructuring, two
layers of management have now been eliminated. Additionally, the Company's
working capital levels have been reduced significantly over the last six
months. Last week, the Company announced a series of leadership changes in
the management of its worldwide direct selling business in order to accelerate
sales growth throughout the world.
Mr. Chuck Ellens, HMI's President of the Direct Sales Group, announced
that he is retiring at the end of 1997. HMI has created several Divisions
within its direct sales organizations, each devoted to the Company's major
markets around the world.
Mr. Daniel Duggan has been named President of HMI's Asia-Pacific Division.
Mr. Ted Timmers has been named President of the Europe I Division. North and
South America (excluding Canada) will be led by Mr. Gary Moore, named
President of the Americas Division. Also to be named are new Regional Vice
Presidents who will cover the U.S. market.
Along with the restructuring of its personnel, the new management team has
refocused the consumer goods division back on the direct, in-home sale
products: Filter Queen and Defender. Products and businesses that were a
distraction to, or in direct conflict with, the Filter Queen and Defender
business have been eliminated. These include: True Colors (flag poles);
Snip-It (hair trimmers); SuperNaturals (cleaning products); and several Home
Impressions products, among others.
Since May, HMI has sold its Tubular business, and is presently negotiating
the sale of its Household Rental System (carpet steam cleaning) business.
Health-Mor Personal Care Corp. (needle-less insulin injection system) has been
set aside for sale to, or strategic partnership with, a Company established in
the pharmaceutical business.
Mark A. Kirk, President and Chief Operating Officer stated that, "HMI
moving forward will look nothing like HMI looking backwards. We have made
significant progress toward lowering the Company's cost structure and working
capital levels, as well as sharpening the Company's focus. With the past
behind, with a clear strategy and new personnel in place, and with only one
remaining core business, HMI will be focusing on its direct sales business of
marketing air filtration products throughout the world."
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: The statements contained in this release that are not historical
facts, such as those concerning future financial performance and growth, are
forward-looking statements that are subject to change based on various factors
that may be beyond the Company's control. Accordingly, the future performance
and financial results of the Company may differ materially from those
expressed or implied in any such forward-looking statements. Such factors
include, but are not limited to, factors relating to the matters described in
this release including the amount of proceeds received upon the sale of Bliss
and the rebuilding of the distributor network for the Consumer Products
Division.
The businesses of HMI currently are: Bliss Manufacturing, a heavy metal
stamper to the automotive and heavy truck markets, and the Filter Queen and
Defender lines of indoor cleaning and air filtration systems. The Company
operates internationally, with sales, distribution, and production facilities
in the United States, Canada, Europe and Asia.
SOURCE HMI Industries Inc.