Citation Corp. exits Chapter 11 bankruptcy.

Eight months after filing for financial protection to resolve cash flow problems, Citation Corp., Birmingham, Ala., exited Chapter 11 bankruptcy in May in a stronger position to compete in a difficult marketplace.

Citation filed for Chapter 11 protection in September 2004 due to a sluggish economy, reduced orders and the rising costs of steel scrap and other commodities.

Citation's reorganization plan erases much of the debt that had dragged down the casting firm's profitability. At the time of its filing, Citation had a total debt of $550 million in secured loans, letters of credit and trade credit. Citation's reorganization plan reduces the company's bank debt to $180 million and total debt to $210 million. Citation also emerges from bankruptcy with a new $80 million line of credit, $50 million of which remains available.

"With the help of our new board of directors, and on the strength of new customer contracts and supplier agreements, we have every reason to be optimistic about Citation's future," said Ed Buker, Citation president and CEO. "This restructuring of our debt will allow us to focus more of our capital on products and process improvements."

Creditors approved the plan on May 2, and the court signed a confirmation order on May 18. Customer agreements that made the exit from bankruptcy official have been signed.

While Citation will retain its pre-bankruptcy management team, creditors named a new board of directors to help steer the company through the challenges of the marketplace.

Buker also praised the company's management team and employees for continuing to focus on quality, delivery and cost during the Chapter 11 process.

"We never missed a delivery because of Chapter 11," he said. "Our customers have rewarded our efforts with several significant new contracts that demonstrate their faith in our ability to meet their expectations."