July 20 13
I am writing to infornt you about an step that is being taken by Endi cott Interconnect
Inc (E!T). Today, EIT and its \vholly-owned subsidiary EI Transportation, LLC have filed
voiuntary Chapter 11 petitions in the United States Bankruptcy Court in Utica, New York, allowing the
organization to restructure its finances vvhile continuing to manufacture advanced electroni c sol utions.
Chapter 11 is a legal process that will allow EIT the opportunity to conti nue to conduct business while the
company restructures its fi nancial affairs, thereby ensuring the company's long-term viability and
attractiveness to a qualifi ed buyer who is willing to continue the investment into the facility and its
Over the past decade, the leadership of the company has worked tirelessly to save jobs and keep the
electronics manufacturer in the Binghamton area. A.s part of this effort, investors have personally
contributed more than $50 mill ion to sustain the company and provide employees with over $1 billion in
ongoing payroll and benefits. \Vhile th.e company has been successful recently in reengineering itself to
operate more successfully with lower revenues, has accurnu!ated long-term liabilities from prior years
which cannot be addressed solely through reengineeri ng.
EIT incurred operating losses of nearly $100 million between 2009-20 12, leaving the company unable to
meet its debt of $70 million, and making Chapter 11 the only viable solution. External factors, including
the economic recession of 2008 and recent U. S. government sequestration have contributed to the drop in
revenue for the company.
The Matthews who were minority shareholders in EIT since its inception in 2002 and acquired
control of the company in April 2013, plan to rnake a bid to purchase the company and retain jobs in a
restructured environment. Jim Matthews, Jr. has stepped down as Interim CEO of EIT to work full time
on this plan with his brothers. The Matthews are opt imistic about the long-term prospects for the
During the restructuring, EIT will remain open and plans to meet its commitments to all customers.
Employee wages and health benefits are not expected to change as a result of the Chapter 1 1 filing.
Payroll cycles will continue on thei r usual schedule. \Vorkforce levels will continually be evaluated, as
always, based on customer demands.
Company management is communicating with suppliers to provi de for the ongoing delivery of goods and
services during the Chapter 11 in order to ensure the continued operation of the facility. Adequate cash is
CH!-hand for dai ly operations on a go--forward basis.
We greatly appreciate your ongoing comrnitrnent to EIT. The company remains focused on finding the
right structure and/or qualified buyer to help ensure the future of a financially-sound
manufacturing faci lity. The most important thing you can do during this time is to continue performing
your job to the best of your ability every day.
We want you to be fully informed about the Chapter 11 process and what it means to you. I encourage
you to discuss any of your concerns \\l'ith your supervi sor or department head.
Davi d Van Rossun1
Chief Restructuring Oft!cer
Q1. What is Chapter 11?
A1. Chapter 11 is a legal method for the court-supervised restructuring of an
organization's debt while permitting it to continue day-to-day operations.
Q2. Why is Endicott Interconnect Technologies (EIT) filing for Chapter 11?
A2. EIT incurred operating losses of neariy $100 rniiiion between 2009-2012. A recent
reengineering effort has improved operations significantly; however, the company
has accumulated long-·term liabilities fmm prior years that cannot be addressed
without restructuring. This Chapter 1 'I fi ling enables EIT to freeze its debt as the
Q3. Does this mean that EIT is going to close?
A3. The intent of the Chapter '11 proceeding is to restructure the company so that it can
continue to operate. The company is reviewing a competitive bid from the Matthews
family, and will also solicit additional bids from other interested buyers. Although
there are no guarantees, E!T ren;ains optimistic about the long-term prospects for
Q4. Why is .Ji rn Matthews, Jr. stepping dovvn as CEO (rt the company?
A4. Jim has stepped down as CEO of ElT to allow him to work full time on a potential
purchase and restructuring plan with investors. Jim had assumed the role of interim
CEO in April, 2013 following the retirement of Jay McNamara.
Q5. Who will be managing EIT going fc.wwan'l?
A5. David Van Rossum has been named Chief Restructuring Officer of E IT, and will
provide his leadership and vision with an emphasis on making the company more
competitive and positioning it fer the future.
Q6. How will filing Chapter 11 affect EIT's d a y ~ t o - d a y operations?
A6. E!T will remain open and continue to support its customers, and there is no planned
interruption in manufacturing or sales. The Chapter 11 process will allow the
company to remove uncertainties and provide for an orderly continuation of business.
Q7. How will the filing affect employee payroll and benefits?
A7. Employee wages and heal th benefits are not expected to change as a result of the
Chapter 11 filing. Payroll cycies vvi ii continue on their usual schedule.
Q8. vvm there be any additional layoffs as a result of the filing?
A8. Workforce levels are continually evaluated based on customer demands. Since its
inception in 2002, Err investors and management have worked to keep electronics
manufacturing in the Binghamton area. That enort continues.
Endicott Interconnect Technologies July 10, 2013
Q9. How will EIT creditors be affected by the Chapter 11 filing?
A9. VVhile EIT works through the Chapter 11 process, creditors will receive notices from
the United States Bankruptcy Court providing information about their claims for
payment and any meetings or hearings to address these claims.
Q10. How will suppliers be paid during Chapter 11?
A10. E!T management is cornmunicating wi th suppliers to make arrangements for the
ongoing provision of £JOods and services during the Chapter 11 in order to ensure the
continued operation of the facility.
Q11. How will EIT continue to meet its daily financial obligations?
A11. The company has adequate cash to operate day-to-day. The reason for the voluntary
Chapter 11 filing is to address ElT's debt of $70 million.
Q12. How did EIT end up incurring so much debt? Was the company mismanaged?
A12. Over the past decade, ownership has invested more than $50 million to sustain the
company and provide ernployees witll over $1 bil!ion in ongoing payroll and benefits.
A combination of global competi ti on, U.S economic downturn, and government
sequestration have put s!gnif1cant pressure on company revenues.
Q13. How does the iawsuit related to the corporate jet lease figure into this decision?
A13. A company plane was leased in 2007 when the business was profitable and
commercial air service in Bingr1amton was limited. It was a competitive way to help
keep the corporate headquarters in Binghamton. Several factors, including the
economic recession and recent government sequestration contributed to a drop in
revenue for the company. A separate legal dispute is underway over payments that
the former lessor of the plane believes it is due.
Was money taken out of the con1pany by i11vestors?
A14. Other than for income taxes when the company was profitable, no funds were ever
provided to the investors.
Q15. How is Huron Real Estate related to Err? Are they filing Chapter 11 as well?
A15. Huron Real Estate is the landlord for EIT and is not part of this filing. Huron Real
Estate and EIT do share some comrnon ownership, but they are separate entities.
Q16. If EIT is sold to a third party, who wii! that be?
A16. EIT is seeking all qualified buyers who are interested in continued investment into the
facility and its workforce. The company is reviewing a competitive bid from the
Matthews family, and will also sol icit additional bids from other interested buyers.
01'7. Is the Maines family still involved in the ownership and management of EIT?
A17. The Maines family sold their interest in EIT in April 2013. They remain active in
Huron Real Estate, which leases property to E!T and certain affiliates.
Endicott Interconnect Technologies
July 10, 2013
018. What is lntegrian, and what is it's relation to EIT? ·
A18. lntegrian Holdings, LL.C is a separate financing entity which helped consolidate EIT's
debt and support the ownership structure change which occurred when the Maines
family sold their interest in EiT.
Q19. The Matthews ail filing for Chapter 11?
A19. The Mattlle\fJS farnily is involv::;d in several diversified and successful businesses.
The only entities involved in this Chapter 1·1 proceeding include Endicott Interconnect
Technologies, Inc. and its wholly-owned subsidiary El Transportation, LLC.
Q20. How long will the Chapter 11 process take?
A20. it is impossible to predict exactly how long the restructuring process will take. The
company is actively seeking a qualified buyer who will be willing to continue the
investment into the facility, its and the community.
Endicott Interconnect Technologies
July 10, 2013