New Owners Rebuild Foss Firm, Its Image
By Patrick Cronin
Hampton Union, Sunday, August 20, 2006
[The following article is courtesy of the Hampton Union and Seacoast Online.]
The new owners of Foss Manufacturing are working hard to rebuild the 52-year-old Hampton-based company and its image in the aftermath of a public bankruptcy scandal involving its former owner and chief executive officer, Stephen Foss.
The Alinian Capital Group purchased the company, which specializes in nonwoven textiles, in May for $39 million while it was in bankruptcy court.
Since then, the new owners revitalized the company's slogan of "America Works" by saving 400 jobs and are planning to add 150 new positions.
The company also made strides in rebuilding relationships with former customers as well as boosting employee morale, both which suffered under the leadership of the previous owners.
Alinian, a Fort Lauderdale, Fla.-based investment firm, has helped finance or purchased several firms out of bankruptcy, including Penthouse magazine.
"The acquisition of Foss Manufacturing is a complement to Alinian's portfolio of companies, and we're confident at this point that we are well on our way to revitalizing Foss into a financially sound business once again," said Paul Sallarulo, one of the principals, in a press release.
The company's new chief executive officer, A.J. Nasser -- who also serves as managing member of Foss owner Alinian Capital Group LLC -- is predicting the company will turn a profit in the fall.
"Foss Manufacturing had not been performing to its potential, and we took steps to be more productive and profitable," Nasser said.
The company filed for Chapter 11 bankruptcy in September 2005 after its chief lender cut off credit, alleging that former owner and chief executive officer Stephen Foss had fraudulently borrowed millions to benefit himself and company insiders.
Foss, who is accused of using company money as his own, and other former officials of the company are being sued by creditors in hopes of collecting some of the $15 million that is owed them.
When the company was sold in May, a new company, Foss Manufacturing Co. LLC, was formed from the bankrupt Foss company's assets.
As part of the sale agreement, the remaining shell company changed its name to Felt Manufacturing Co. Inc., which remains in bankruptcy.
Alinian said poor management and leadership was the cause for the company's prior problems.
According to documents filed in the bankruptcy case, between October 2005 and April 2006, Foss recorded a net loss of about $6.29 million on roughly $46.23 million in net sales.
But the new owners are not concentrating on what happened in the past, but rather on the future.
The company plans to grow by expanding its product offerings, particularly in the health care industry and other fields.
The company already has numerous products and multiple worldwide patents, including FossShield, a unique and highly effective anti-microbial textile which has numerous applications for the health care, hospitality, military and marine sectors.
Employees of the company have also said the new owners have done their part to boost morale.
Foss has put in place performance-based, companywide bonus programs to motivate employees, and also recently announced that every employee will receive a gas card each month worth $25 to $50, depending on the distance they travel each day, to help defray the rising cost of gas.
Foss was founded in 1954 in Haverhill, Mass., by Woody Foss.
The company began making heel and shoe stiffeners for shoes and evolved to fiber production in 1980.