Industrial Enterprises of America, parent of Pitt Penn Oil and Hi-Tach Oil, on Thursday said it is slashing its workforce, writing down obsolete inventory and discontinuing some product lines as part of consolidation efforts under new management, though its lubricants product lines are not expected to take a hit.
It should not impact the product line of either Hi-Tach Oil or Pitt Penn Oil, David Zazoff, director of corporate communications for Industrial Enterprises, told Lube Report. Basically, the company [Industrial Enterprises] is consolidating, so the product lines will not be affected.
New York-based Industrial Enterprises said it would file an extension request for filing its annual report for the fiscal year ending June 30, 2007. The company is establishing reserve accounts for recent layoffs, current litigation and organizational reconfigurations. It plans to reserve $6 million for the expenses.
For 2006, Industrial Enterprises annual revenue for the fiscal year ending June 30 totaled $30.8 million. It recorded a net loss of $7.2 million. For its most recent quarter ending March 31, Industrial Enterprises recorded total revenue of $17.6 million, with a net loss of $6.3 million.
President and Chief Operating Officer Dan Redmond said the company has gone through major organizational changes in the past six months, including putting a new management team in place. Redmond served April through July 2007 as executive vice president of Industrial Enterprises and president of Pitt Penn. Before that he had worked for Chemtura Corp. since 2000. Industrial Enterprises board of directors appointed him president and chief operating officer in July of this year, as part of a transition to a more operational management team from an entrepreneurial one.
We feel these moves are necessary to position the company for strong performance going forward and anticipate that such steps will contribute to annualized savings of approximately $4.5 million for fiscal 2008, Redmond said, referring to the workforce reductions and other cost-saving steps.
The companys products include motor oils, engine additives, brake fluids, appearance chemicals, antifreeze and charcoal fluids, along with gas dusters and refrigerant kits.
Industrial Enterprises is a private firm formed in late 2004 to acquire EMC Packaging Inc., a refrigerant gases supplier that had been publicly traded. Industrial Enterprises later added Todays Way Manufacturing, a producer of specialty automotive products, and Unifide Industries Ltd., which markets and sells them.
In January 2006, Industrial Enterprises acquired Pitt Penn Oil Co. for $4 million. Pitt Penn, in Creighton, Pa., produces automotive products such as engine oils, transmission fluids, gear oils antifreeze and fuel additives. It also blow-molds plastic bottles.
Seeking to add more lubricants and additives products to its offerings, Industrial Enterprises in April 2007 acquired Hi-Tach Oil Co. Inc. in Kannapolis, N.C., for $350,000. As part of the purchase, Industrial Enterprises acquired all of Hi-Tachs inventory, purchase orders, marketing materials, formulas and copyrights, planning to move manufacturing of the acquired Hi-Tach Oil products into the Pitt Penn facility in Pennsylvania.