Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: Thomas M. Mishoe, Jr.
May 31, 2002 (804) 228-5600
Open Plan Systems, Inc. Files for Chapter 11 Bankruptcy Protection
RICHMOND, VIRGINIA (May 31, 2002) - Open Plan Systems, Inc.
(OTCBB:PLAN), a remanufacturer of modular office work stations, announced today
that it has filed a voluntary petition for reorganization under Chapter 11 of
the United States Bankruptcy Code. The filing occurred on May 30, 2002 in the
United States Bankruptcy Court for the Eastern District of Virginia, Richmond
Division. The Company intends to operate as a debtor in possession under its
pre-petition management structure. The Company's Chapter 11 filing will allow it
to continue business operations while it formulates a restructuring plan.
Anthony F. Markel, Chairman of the Board, said, "The Company has been
in a financial turnaround process since May 2001 when the Company's former
president resigned and the Board of Directors named an interim Operating
Committee to manage the day-to-day affairs of the Company and to develop a
turnaround plan. Since that time, the Company has taken several significant
restructuring steps, including closing several unprofitable sales offices and
its production facility in Lansing, Michigan, initiating the liquidation of its
Mexican subsidiaries, consolidating all production into the Company's Richmond
production facility, selling a partially constructed production facility in
Lansing, Michigan and retiring approximately $2.5 million in related debt,
reducing its workforce and exiting unprofitable product lines. The current
management team and the employees have worked diligently with the Board of
Directors on the turnaround process but, unfortunately, the levels of sales and
expenses have not been in amounts necessary to support profitable operations."
Thomas M. Mishoe, Jr., President & Chief Executive Officer said, "The
Company has been adversely impacted by the overall economic downturn over the
past few quarters that has also negatively impacted the entire office furniture
industry. The sales and profitability challenges that the Company has
experienced during that time have been shared by all of our competitors and
suppliers and by the furniture industry as a whole. Additionally, the terrorist
attacks of September 11th had a negative impact on the Company's business. The
Company's booked orders decreased dramatically immediately following the
September 11th terrorist attacks and have not yet returned to pre-September 11th
levels."
Mr. Mishoe continued, "In spite of the Company's current challenges,
management believes there is a viable and profitable business opportunity to
remanufacture Herman Miller workstations. Over the next several weeks, the
Company will be considering a number of potential opportunities and initiatives
in connection with formulating a restructuring plan, including pursuing
additional funding or investments in the Company from interested parties or a
sale of the Company."
In addition, Mishoe said, "The Company wants customers and vendors to
understand that filing for Chapter 11 protection should not have any significant
impact on the Company's post-
petition activities with customers and vendors. Further, the Company will
request the Bankruptcy Court to authorize it, in its sole discretion in the
ordinary course of its business, to honor or pay certain pre-petition
obligations to ongoing customers relating to refunds, adjustments and other
credits and to honor deposits or prepayments from customers for goods and
services that, as of the date of the bankruptcy filing, had not been delivered
or provided to such customers. During the Chapter 11 process, the Company plans
to continue its business as usual and will strive to continue to produce the
highest quality product and to deliver the highest quality service to its
customers while simultaneously pursuing restructuring alternatives."
In conjunction with the filing, the Company has reached an agreement
with its pre-petition lender, Wachovia Bank, N.A., to use, subject to Bankruptcy
Court approval, cash collateral for the next thirty days. The permitted use of
cash collateral is expected to provide the Company with the available cash to
continue its operations while exploring viable restructuring alternatives.
The Company cautions readers that the statements contained herein
regarding the Company's future business plans, operations, opportunities or
prospects, including any statements regarding restructuring efforts, a return to
profitability or completing a financial turnaround, are forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are based upon management's
current knowledge and assumptions about future events and the Company's ability
to obtain Bankruptcy Court approval for use of cash collateral and other
operational issues. Actual events, results or performance may be materially
different from any events, results or performance expressed or implied by such
forward-looking statements. Consequently, the forward looking statements
contained in this press release should not be regarded as representations by the
Company or any other person that any projected outcomes can or will be achieved.
Nothing in this press release is intended to be indicative of results for any
future period. For more details on factors that could affect expectations, see
the Company's Annual Report on Form 10-K for the year ended December 31, 2001,
as filed with the Securities and Exchange Commission.
Open Plan Systems, Inc. remanufactures and markets modular office
workstations through a network of Company-owned sales offices and selected
dealers. Workstations consist of movable panels, work surfaces, storage units,
lighting and electrical distribution combined into a single integrated unit. The
Company has recycled over fifty million pounds of workstations. Under its "As
Is" program, the Company also purchases and resells used workstations.
Additionally, the Company markets a wide variety of other office-related
products including chairs, desks and other office furniture.
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