KITCHEN + BATH
conservation information. In January 2011, American
Standard Brands completed a successful refinancing through a high yield debt offering of $187.5 million in aggregate principal amount concurrent with a new $60 million asset-based lending facility. “The refinancing dramatically increases our operating and financial flexibility. We are investing heavily in product innovation, the Internet, social media and in our supply chain. The company is well positioned for organic growth, as well as growth through complementary and synergistic acquisitions,” Devine said. Phc News recently sat down with
Don Devine and discussed the company, the industry and the economy.
Tell us about your initial challenges upon assuming leadership of the American Standard business in North America.
Devine: My first challenge was to put the company on the right track as quickly as possible, while also preparing the company for sale. It was imperative to formulate a plan that returned the company to profitability, while making American Standard a more reliable partner for both consumers and the trade. Once the sale process was announced, the American Standard Global Bath and Kitchen Business attracted a great deal of attention, which resulted in ongoing management presentations to various interested parties. The goal was to keep the sale process from disrupting our turnaround plan, which was focused on improving the company’s products, cost structure and business systems. What we didn’t realize at the time, was that the sale process would result in the America’s plumbing business being purchased twice. The first was the sale of the global bath and kitchen plumbing business to Bain Capital. The second was a sale of the America’s to Sun Capital in December 2007, leading to a triple merger with Eljer and Crane Plumbing, both portfolio companies of Sun Capital. As we brought the three companies together we renamed the company American Standard Brands.
How did you get involved in the industry & company?
Devine: I joined U.S. Industries, the
predecessor company to Jacuzzi Brands, in 2002 when the company was truly in trouble, including having a
“going concern” opinion from its auditors, meaning liquidation was more likely than survival. We developed a plan that enabled us to raise over $600 million dollars to refinance our debt, fund our operations and helped the company to survive. Along the way, we
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From l to r: Don Devine, Cindy Greenwood, Torrington Supply Company (TSC), Water- bury, Conn.; Stephanie Komar, Atlantic Plumbing Supply (APS), Coventry, Rhode Island; Noelle Rogovin (TSC); Karen Condrillo (APS); and Tara Spengeman discuss designs with Gray Uhl in the American Standard showroom.
joined American Standard in 2006, it was also a challenging situation in that the America’s was an underperforming business and the parent company was about to be broken up.
What are some attributes that you have that you have instilled into the company?
Devine: Impatience and urgency to
get after things that are important to our customers and consumers, and that drive our profitability. Being highly organized, which has enabled us to execute a great deal of change on time, and on budget, in a difficult market.
The economy is weighing heavily on people’s minds these days, what do you project for the foreseeable future? Particularly in this kitchen and bath market, do you see a turnaround imminent?
Devine: Both residential and commercial repair and remodeling will show modest strength in the plumbing categories in 2011. New residential and commercial construction continue to bounce along the bottom and we would expect a more robust rebound sometime in 2012. We are fortunate in that, despite the uncertain economy, bathrooms and kitchens remain two areas in the home where consumers really care about how our products look and function. We know that the consumer will
However, the economy has resulted in consumers deferring large remodeling projects. We don’t expect this trend to change until home prices rebound and the consumer is confident the project will have a positive return on investment.
How tough has it been in these uncertain times and how do you keep the ship sailing smoothly ahead?
Devine: It has been a challenging business environment over the last 40 months or so, as demand for bath and kitchen products has continued to weaken to levels no one had imagined we could reach. For us, the key has been to see the market and the world as it is, and not just wish that things will get better. We communicate the implications of the market to our organization, and our employees have stepped up and done an amazing job in execution. Additionally, it has helped that we have been in front of a number of important issues affecting our market, such as water efficiency, toilet performance and on-trend design.
Any changes in business philosophies, structures or cultures during this period?
Devine: We have spent the last 40 months focused on updating our products, improving our cost structure, and making our business systems more reliable. We expect our focus to remain
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renamed the company Jacuzzi Brands, which included Jacuzzi, Sundance Spas, Zurn and Eljer Industries. I have always been attracted to challenging situations, and U.S. Industries and Jacuzzi Brands fit that bill. When I
replace a broken and/or poorly performing kitchen or bath faucet or toilet, especially when they know that the upgrade will truly work better, improve their homes’ appearance and reduce their water usage costs.
phc april 2011
www.phcnews.com
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