Kramer International’s parent company going through cash crisis
Kramer International, Inc., which operates a foundry in Milwaukee’s Walker’s Point neighborhood, may be
sold or closed by its cash-strapped
parent company.
Atchison Casting Corp., based in Atchison, Kan., recently reported a net loss $18.6 million in its fourth quarter. For its fiscal year, Atchison reported a net loss of $28.1 million.
To stem its mounting losses, Atchison disclosed in its quarterly report that it will consider selling or closing its Kramer International subsidiary, which specializes in the casting of iron, steel and non-ferrous pump impellers.
The Kramer International plant is divided between two nearby buildings at 114 E. Pittsburgh Ave. and 158 S. Barclay St. on Milwaukee’s near south side. About 100 people are employed at Kramer International in Milwaukee, according to a company spokeswoman.
"Three years of contraction in the capital goods markets, coupled with a number of other unfortunate events, have taken a toll on the company," Atchison officials stated in their quarterly report. "To continue as a going concern, attain profitability and increase market share, management has refined the company’s business model."
That model includes restructuring the firm’s debt with its lenders and assessing each of its subsidiaries to "develop a plan of disposition or closure if acceptable results in the near-term are not feasible."
Soliciting offers
Atchison is soliciting offers from other companies and investment banking firms to sell three operations, including Kramer International; The G&C Foundry Co. in Sandusky, Ohio; and Canada Alloy Castings Ltd. in Kitchener, Ontario.
"While each of these operations brings certain strengths or capabilities to the company, they either do not fit well with the new business model or are not ones in which the company has elected to direct its resources at this time," Atchison reported. "However, if acceptable offers are not made, the company will continue to work on improving these and all of the company’s operations."
"Fiscal 2002 was another difficult year for Atchison," said Tom Armstrong, chief executive officer of Atchison, in a prepared statement. "We’ve now had three years of a weak industrial economy, which has also been impacted by several outside factors, including the events of Sept. 11, 2001, corporate accounting issues at numerous companies, declining capital markets and a general tightening of credit by lenders."
Problems mounting
Kramer International generated net sales of about $10.3 million in fiscal 2002, the company stated. Atchison acquired Kramer International in 1995.
Kramer International owns the Pittsburgh Avenue plant, which has 18,600 square feet and a total assessed value of $303,400, according to City of Milwaukee property records. The company leases the 13,800-square-foot Barclay Street facility from Barclay Properties, LLP.
The sale or closure of the Kramer International subsidiary is the latest in a series of problems at Atchison:
Atchison also is in the midst of an accounting controversy with its former auditor, Deloitte & Touche, LLP. Deloitte & Touche said it withdrew financial statements it had filed on behalf of Atchison for each of the three previous years because it believed Atchison officials were "aware of information related to improper activities of certain employees in Pennsylvania and failed to disclose such information to Deloitte."
Atchison has filed a counter-complaint against Deloitte in court in Philadelphia County, Pennsylvania, alleging negligence, professional malpractice, negligent misrepresentation and breach of contract.
