Dimac Holdings Inc., a direct response marketing services vendor, said yesterday that it has successfully emerged from Chapter 11 protection, having implemented an operational and balance sheet reorganization.
The move won approval from U.S. Bankruptcy Court in Wilmington, DE.
Dimac, Windsor, CT, filed for Chapter 11 protection on April 6, 2000, in an effort to reorganize its capital structure and facilitate its revitalization plan.
Chairman/CEO Robert “Kam” Kamerschen said operational, strategic repositioning and financial changes have strengthened Dimac's position.
“We have enhanced our management team, consolidated operations, been repositioned into a customer-centric solutions provider, added online and offline capabilities, and improved profitability and long-term growth prospects,” Kamerschen said.
Specifically, Dimac:
• Reduced its total debt from about $396 million to about $131.9 million and its ongoing debt service from about $40 million to less than $11 million annually.
• Arranged a $20 million revolving credit facility in the form of a 30-month loan, which will provide liquidity.
• Successfully recruited a number of new executives at both the holding company and operating subsidiary levels.
• Identified and sold four of five nonstrategic businesses for about $64.6 million in gross proceeds. It expects to liquidate the remaining nonstrategic unit within 12 months for an additional $16 million to $19 million in gross proceeds. The company also initiated a consolidation of production and fulfillment operations and began integration to create more efficient, cohesive operations and overall competitive fitness. The business units that were sold were AmeriComm Direct Marketing, Convertagraphics, Double Envelope, Diversified Assembly and Label Art. Transkrit, another business, is expected to be liquidated in six months. These business units are operating divisions of AmeriComm Direct Marketing Inc.
• Created a new national sales and marketing organization to execute customer-centric initiatives.
• Changed its name from Dimac Marketing Corp. to Dimac Marketing Partners Inc. to align the name of the company with its vision to be the “premier problem-solving partner for targeted industry clients by providing integrated, insightful and innovative analog and digital direct response marketing solutions.”
• Redefined its core business units.
The four strategic business units are now DMW Worldwide (agency services); MBS (information and insight services); Palm Coast Data (direct response management and value-added fulfillment services); and Dimac Direct (direct mail services and products).
During the Chapter 11 process, Dimac's core strategic business units were able to retain most of their major clients while attracting new customers. For example, Palm Coast Data had a 40 percent increase in revenues in 2000. Collectively, the four core Dimac businesses project revenues of more than $180 million in 2001.
