MasterCraft Boat Co. is one Knoxville-area economic indicator that apparently is seeing a turnaround.
And some 175 laid-off MasterCraft employees are feeling relief since the boat maker's recent restructuring prompted their rehiring.
John Dorton, MasterCraft president and CEO, said Tuesday that all rehired employees have been notified, with some starting work Monday and Tuesday, while others begin work today manufacturing boats.
Dorton explained that MasterCraft went from 650 employees last year to 40 this year. By the end of this week the Vonore facility will have 218 employees on the job, he said.
MasterCraft has announced an agreement with a Minnesota-based investment firm to complete a comprehensive restructuring of the company's balance sheet through an out-of-court exchange of its senior secured debt.
The restructuring "significantly reduces the company's debt obligations and provides MasterCraft with ample liquidity to continue designing and manufacturing the world's best luxury sport boats," the company said in a statement.
Jason Boertje, MasterCraft marketing director, said Wayzata Investment Firms LLC has agreed to exchange its MasterCraft bonds into stock, making the investment firm the largest shareholder in MasterCraft. MasterCraft management makes up the other shareholders, Boertje noted.
"The bottom-line is that it (restructuring) leveraged our debt," Boertje said.
Through the restructuring, most of MasterCraft's senior secured bonds are being exchanged into a combination of equity in the company and a manageable revised debt load, which will require little cash debt service going forward, according to the company.
Dorton said MasterCraft's ability to smoothly complete the restructure is evidence of the company's strength.
"The marine industry is enduring an unprecedented period of reduced sales and financial distress," Dorton said in a statement. "Our ability to complete this restructuring out of court and with very little disruption to our customers, dealers and vendors is a testament to the strength of the MasterCraft brand, the loyalty of our customers and dealers, and the dedication of our employees."
Boertje noted that the restructuring closed June 30, the fiscal year end for MasterCraft.
Wayzata's ownership in the company will not affect MasterCraft's product, Boertje said.
"We have worked with them for nearly two years and their desire to move forward with our company as a partner is in large part due to the trust they have in our management team and the boats this team brings to the market," he said in an e-mail. "As a result, they will not be involved in product development - that will remain in the very competent and skilled hands of our management and engineering team."
Dorton said because of lower inventory, orders have increased for their 2010 models and that has led to resumed production at the Vonore facility.