SHERRILL — Sherrill Manufacturing, Inc. auctioned off a lot of unused equipment Thursday July 19 in a move designed to bring an influx of cash and help the company exit more quickly from bankruptcy.
While the business did not disclose specific figures on auction proceeds, co-founder and CEO Gregory Owens said in a news release that the sale went well enough that Sherrill Manufacturing was able to pay its first secured creditor, Alliance Bank N.A. in full. Sherrill Manufacturing, which also restructured its operations, is now profitable and is current on all post-petition obligations, according to Owens.
“This is an important first step as the company works toward restructuring its efforts and repaying all outstanding obligations to its creditors,” Owens said in the release.
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In addition to selling off the unused equipment, Owens said that Sherrill Manufacturing is consolidating into a smaller footprint with a focus on meeting demand for its own Liberty Tabletop brand of flatware products. He did not elaborate on what exactly the consolidation effort would include.
Looking ahead, Owens said the company is focused on growing Liberty Tabletop with the eventual goal of expansion into traditional retail channels.
Owens and his business partner Matthew Roberts, both former Oneida Ltd. executives, formed Sherrill Manufacturing in 2005. They purchased the former Oneida Ltd. plant in Sherrill and signed a three-year contract to produce flatware items for Oneida Ltd. Once that contract ended, lagging sales and increased competition from China slowed production at Sherrill Manufacturing down to the point that it ceased production in May 2010 and laid off about 80 of its 100 workers.
“We’re selling off our excess stuff,” Owens told The Business Journal a few days prior to the sale. Most of the equipment was from the company’s unused machine shop. Rather than continue to have the equipment sit idle, Owens said the firm decided to sell it and generate some cash to pay down debt and emerge from bankruptcy. Sherrill Manufacturing filed for Chapter 11 bankruptcy protection in October 2010 in U.S. Bankruptcy Court for the Northern District of New York with just over $2 million in debts owed.
The company has managed to stay afloat by leasing out most of the 1 million square feet of space it has and by taking on contract work for other companies, such as Coffee Joulies, a Sherrill–based company that launched in 2011. Coffee Joulies leases space from Sherrill Manufacturing and contracts with it to produce its coffee joulies, which are metal “beans” used to cool coffee quickly to a drinkable temperature and then keep it at that temperature for a longer period of time.
Another move that has helped Sherrill Manufacturing start to rebound is its launch of Liberty Tabletop (www.libertytabletop.com), Owens said. The product was featured on the “Today Show” in early July and that appearance generated about $15,000 in orders in one day, Owens said. Liberty offers nine different patterns and competes in the bridal flatware category.
It just made sense for Sherrill Manufacturing to develop its own patterns and produce its own flatware to sell directly to customers, Owens said. That’s basically what the company (www.sherrillmfg.com) was doing for the customers that hired it, but then only made a fraction of the proceeds when those products sold.
Plus, he said, the demand for American-made flatware is very high. Oneida Ltd. was one of the last domestic flatware manufacturers, but now outsources all of its products, mostly from overseas vendors.
Between the launch of Liberty Tabletop, leasing out space at the facility to 17 different tenants, and taking on contract work like the Coffee Joulies project, Sherrill Manufacturing has been able to maintain a work force of 28 people, Owens said. The workers rotate between various projects, wherever they are needed, he noted. One week, they might work on a Liberty Tabletop production run and the next, they might be working on another project for an outside client.
As busy as the workers have stayed, he said, the machine-shop equipment has mostly sat idle since 2005. “We’re sitting there looking at hundreds of thousands of dollars in equipment, just sitting there,” he said.
That’s why Sherrill Manufacturing worked with Great American Group, LLC, a Woodland Hills, Calif. auctioneer, to sell that equipment.
The equipment included a high-speed press line, a lathe, and other fabrication machinery.
The auction took place at La Quinta Inn in Verona as well as online.
Great American Group (www.greatamerican.com) has offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, New York, San Francisco, and London.
