Matlack Files for Chapter 11 Reorganization
Mar 29, 2001 12:00 PM, Modern Bulk Transporter
Matlack Systems Inc, one of the largest US tank truck carriers, filed on March 29 for Chapter 11 protection under the Federal Bankruptcy Code. The filing comes after several recent press reports questioned the continued financial viability of the Wilmington DE-based company.
During the Chapter 11 announcement, Matlack management stated that bank lenders are supporting the company through the reorganization process by allowing the tank truck carrier to use the lenders’ cash collateral while debtor-in-possession financing is negotiated.
"Our customers should know that they can continue to rely on us for the same high standards of service and safety,” said Michael Kinnard, Matlack president and chief executive officer. “Our employees should know that we will continue to do what’s best for the company and them. Our suppliers need to know that they can continue to look to us in the future as a supportive revenue source for their business operations.
“Many of our customers have told us that they need Matlack to remain a vital and viable component of this industry. Their willingness to continue to support our company is a source of great encouragement to us. Matlack is a key player in this industry and getting its operations in line with current economic and industry trends is essential, not only to us, but also to the industry. Recent trends have been both volatile and challenging, as the chemical industry has felt the constraints of a shrinking economy. Any company that wants to remain viable for the sake of customers, employees, and other stakeholders needs to be flexible enough to adapt to rapid changes in the economy. That is what we are doing.”
Ranked among the top 10 tank truck carriers, Matlack reported 2000 gross revenues of $186.9 million, with a loss of around $39.9 million for the year. The previous year, the company reportedly lost $16.9 million on $198.2 million in gross revenue. The losses began in 1998, when Matlack reported that it lost $2 million of gross revenues of $233.3 million.
Currently, the carrier has 53 terminals across the country and about 1,500 employees. Its fleet of approximately 750 tractors includes at least 500 that are six years old or more. Another 235 are from the 2000 model year. At the end of fiscal 2000, Matlack reported that the average age of its tractors was 3.5 years. The average age for the trailer fleet was 17.1 years.