Tucked away in Allens Inc.’s Chapter 11 bankruptcy filings last week is the total of its debts: $279.9 million.
The family-owned Siloam Springs company that processes canned and frozen vegetables has approximately $178 million of secured debt and another $101.9 million in debt to unsecured creditors, according to a filing by Jonathan C. Hickman, managing director of Alvarez & Marshal Holdings LLC. Hickman has been providing financial consulting services to Allens since January.
Allens reported assets of between $100 million and $500 million and the number of creditors at between 1,000 and 5,000. A more detailed filing is due later.
Allens, which was founded in 1926 as Allen Canning Co., said in the filing that it has had a rough couple of years. It traced its woes to a decision to jump into the frozen vegetable business with the 2006 purchase of Birds Eye Foods Inc.
“The execution of the business plan proved difficult, and resulted in significant operating loses,” Hickman wrote in the filing.
Allens sold most of its frozen food operations in March 2012.
The company faced other problems in 2011. “A historically strong harvest led to high inventory levels that processors, including [Allens], were unable to sell before the beginning of the subsequent pack season,” Hickman wrote.
As a result, many processors lowered prices, pressuring their margins at a time when other costs were rising.
Allens’ earnings before interest, taxes, depreciation and amortization totaled $46 million for its fiscal year that ended Feb. 28, 2010. A year later, it had fallen to $8.5 million.
Allens did some restructuring. That helped bring its EBITDA to $24.2 million for fiscal 2012.
“However, the Company’s margins remained below historical levels,” Hickman wrote. Allens “continued to experience operational difficulties … and began to experience severe liquidity constraints.”
Allens said that while it is in bankruptcy it will look for investors or someone to buy all or part of its business.
Allens ranked No. 23 on Arkansas Business’ most recent list of the state’s largest private companies, reporting $420 million in revenue for the fiscal year that ended Feb. 28. That was a 30 percent drop from fiscal 2012.