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CHARLES PRICE RECEIVES NATIONAL TMA AWARD

FOR TURNAROUND OF SOUTHLAND TECHNOLOGIES

CHICAGO, Ill. – November 8, 2000 -- The turnaround of Southland Technologies by turnaround professional Charles M. Price, has earned the 2000 Turnaround of the Year, Large Company Award, presented November 4 at the Turnaround Management Association (TMA) 2000 Annual Conference in Baltimore. TMA is the only international nonprofit association dedicated to the development of a stronger economy through corporate renewal. This award is given to an individual who has orchestrated the successful turnaround of a company whose revenue at the onset of the turnaround is $50 million or greater. 

Southland Technologies, a Virginia Beach, Va., manufacturer of precise sealing components for the automotive industry, experienced numerous quality and delivery issues with key accounts. On probation since September 1998 with its single source OEM automotive account, it also was in bad standing with two other major automotive manufacturers.

“Southland was not investing in the business -- people, machines or tooling,” Price said. “Manufacturing was out of control, as scrap exceeded 25%. The quality audit staff had been eliminated as an overhead cost reduction.”

Southland’s operating losses during the latter half of 1998 and the first three quarters of 1999, coupled with capital requirements to support business growth, accounted for nearly $10 million in cash and left the company with little working capital.

Southland’s chairman, J. Herbert Ogden, Jr. retained Price in September 1999 to serve as president and COO. Price’s immediate actions included:

• Reports to track cash and weekly key business performance indicators

• Weekly staff meetings to review results

• New quality audit team to report directly to him.

• Carefully controlled investments were made on a priority basis in equipment and tooling

• Problems were dissected to their “root cause” and resolved

• Personal meetings with key customers to gain support and credibility

After a new strategic direction was set, Price met with key investors and subordinated debt holders to review the state of the business and the cash flow for the next 12 months. They agreed to restructure interest payments to manage positive cash flow.

By March 2000, Southland’s customer ratings improved substantially. It rose from “unacceptable” to “top rated” at two of the major automotive companies. The single source customer removed Southland from probation and as of July 2000, its top four customers allowed Southland to quote new business.

“The stockholders and creditors were very pleased with the progress we made in such a short period of time,” Price said.

Price is a member of the Carolinas Chapter of the Turnaround Management Association (www.turnaround.org), headquartered in Chicago. TMA has 4,000 members, who include financial advisors, turnaround managers, lenders, attorneys, and judicial and government personnel who participate in corporate financial turnarounds and restructurings. Members adhere to a Code of Ethics specifying high standards of professionalism, integrity and competence. TMA activities are supported by 30 active chapters, including three in Canada and one in New Zealand, Australia and the United Kingdom.

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