Leadership Team Breathes New Life into Hynes Industries
YOUNGSTOWN, Ohio – Hynes Industries has completed a financial restructuring with an infusion of nearly $6 million in fresh growth capital into its operations.
More importantly, much of the capital is sourced from 15 members of the company’s leadership team, says Rick Organ, president and CEO of the company.
“This is a strong demonstration of confidence and support for what we’re doing,” Organ says. “I find it humbling to have that many people believe in the direction we’re going and want to be a part of that.”
Hynes employs about 140 at its Austintown plant on Henricks Road. It also has operations in Painesville, Ohio, and Kokomo, Ind. About 210 are employed between the three locations.
Organ says the company initiated a restructuring program nearly two years ago after its largest customer suffered financial problems and eventually filed bankruptcy.
“In late November of 2017, our largest customer Schletter, says that they weren’t going to meet their obligations to us,” he says.
At the time, Schletter Inc., a German-based solar mounting manufacturer, represented a quarter of Hynes’ business, Organ says. In April 2018, the company’s U.S. division filed Chapter 11 bankruptcy.
The company owed Hynes about $7.5 million, money that was unlikely to be recovered, Organ notes, leading to a liquidity crunch within Hynes and the launch of an effort to save the company.
“It was very difficult,” he says. “We went to our customers and asked them to pre-pay and purchase directly from us.”
Hynes Industries, a long-time manufacturer in the Mahoning Valley, produces custom metal products such as strip steel, roll-formed shapes, flat wire and slotted angle items for customers in the truck/trailer, solar, electrical, commercial building and consumer products industries.
In 2014, Cleveland-based Reliance Capital Partners acquired a majority interest in Hynes, established in 1925.
“Everyone had to sacrifice,” he recalls. During this period, salaried employees received pay cuts and the labor force was reduced to a 32-hour work week, while others were placed on permanent layoff. About 2 1/2 months ago, 12 were placed on layoff from the operation’s steel strip operations.
“That section took the brunt of the problems,” Organ says.
Organ emphasized that both senior management, as well as others who have worked at the company for more than 30 years, made investments to help the company recover.
“It was a vote of confidence from my standpoint,” he says. “Every single one contributed in a meaningful way.”
Hynes’ chief financial officer, Ryan Day, says the company’s bank group led by JP Morgan Chase supported the company throughout the entire process. “The support form the bank was unparalleled and stood by us through all of this,” he says. “That was key.”
With the new capital, Hynes is able to position itself for future growth, Organ says. Many of the new processes introduced into the company such as a new enterprise resource planning system, or ERP, remained intact and the new investment allows the company to move forward.
“It gives us the opportunity to broaden our aperture as a metals fabricator,” Organ says. “It gives us the ability to make investments in this business that we couldn’t do before because of liquidity constraints.”
Meanwhile, the company is working to establish relationships that may have been fractured throughout the ordeal.
“We’re putting our money into this. We want to restore confidence and that’s what we’re doing now,” Organ says. “It’s a difficult story with a happy ending, but in many respects, it’s a new beginning.”
Copyright 2023 The Business Journal, Youngstown, Ohio.