By Tim Leeds
The future looks a little better for Water Chef, after several years of trying times.
After reorganizing its corporate debt, the company reported a $159,353 profit in 1999, reversing a loss of more than $1.5 million the year before.
David A. Conway, president and chief operating officer of the company, said that negotiations with the Hill County Commissioners, Bear Paw Development Corporation North Montana (BPDC) and the Montana Small Business Association were very helpful in the debt restructuring.
"I've had to bust my butt to get the company cleaned up," he said, "not without the help of a lot of people, people in Hill County. All in all, it's been an extremely pleasant experience, because these people are so helpful and easy to work with."
He said he is committed to making the company a long-term success, and to working with the people in the county to do so.
Conway said negotiations with BPDC resulted in an offer to exchange 2 million shares of the company stock for the startup loan the Havre corporation issued them. While the deal still has to be approved by the corporation's board of directors, he said it's as close to a done deal as it could be.
Dick King, BPDC executive director, said hanging in there and working with the company through the tough times could pay off very well.
"Now, with stock negotiations, we have a very good chance to recover the entire loan and perhaps more," he said.
King said the debt forgiveness package in exchange for the company's stock was set up to give Water Chef a chance for success, which they probably couldn't have with a large debt on the balance sheet.
He said Water Chef has been very good about working with them on the loan. He said they were always receiving partial debt service, and now may be able to recover more than the original amount to put into their revolving loan fund to stimulate more economic development in the area.
Since Water Chef moved back to its original plant location at Meissner Tractors, Inc. from their previous location rented from the county, they have paid their back taxes to the county in full. While the commissioner's office reports they still owe about $115,000 in back rent, they said the company is negotiating to pay those off. Conway said he is committed to catch up and pay this off entirely as the company is able.
Commissioner Doug Kaercher said even with the difficulties the company has had, it has still been employing people in the community and making payments on its bills. While it hasn't been the success originally hoped for, he said if the company can recover and increase its success, then it (the economic development intended with bringing Water Chef to Havre) has worked.
The company's main line is manufacturing water coolers. Pete Sorensen, manager of the Havre plant, said they gather parts from around the country and around the world, including Water Chef's joint venture factory in Tianjin, China, to assemble here. They are then shipped to the purchasers.
Sorensen said winter is a slower time for production, and they are a little behind last year's production because of a couple of unexpected large orders last year. He said if those large orders are factored out, they are probably a little ahead this year. He said business typically picks up more over the summer.
Conway said they have been able to improve their costs in production, which should help their sales considerably. He said he was told early in his long career in manufacturing that a key to success is producing high quality products at a low cost, and the company will now be able to do this.
Conway said some new lines for the company should help increase their business. He said one new item coming out is a new front panel designed for easier access. He said bottled water companies have set ease of service on the units as a main priority, allowing technicians to deal with each unit quickly and make more stops. He said the new panel will increase this, making the Water Chef units more marketable.
Conway said the company is currently submitting for a patent on a water purification system aimed mostly at third world countries. He said the system will turn huge volumes of bad water to completely potable water at a cost of about three cents a gallon. He said this could be a major source of income for the company, and would reduce their dependence on the more seasonal water cooler business.
Conway said that as these innovations become fully developed the Havre plant will begin working on them.
King said he can't say enough about Conway's work since he took over the company. He said Conway managed to take a company in severe fiscal difficulties and turned it around, to where it is now poised for success.