Coastcast Corporation (OTCBB:COCA), at one time the premier foundry for the manufacturing of golf club heads to most major equipment companies, will cease operations, PGA.com has learned.
In a statement, Coastcast Chairman Han Buehler, who could not be reached for comment, said Coastcast's board of directors determined "that it is in the best interests of the company to wind up the company's business operations. The very recent diminishment of orders leaves us no other choice at this time.
"We do not believe it is in our best interests to hang on and dissipate the remainder of our assets," he said in the statement. "We will present a plan of liquidation to shareholders for consideration."
Buehler fueled speculation that things weren't well at the company when, this past April, he announced Coastcast would probably forego its annual shareholders meeting in order to save money.
Coastcast's closing likely won't have much impact on the major equipment companies, most of whom have gone to foundries in Taiwan and China the past few years because of cheaper labor and manufacturing costs.
It was that move to the Far East, particularly China, which deeply cut into Coastcast's once-strong business. The company closed '03 with sales of $45 million, down from $62.4 million in '02 and reported a loss of $9.6 million versus a loss of $10.5 million in '02.
For the first quarter of this year, Coastcast, founded in 1980, looked to be on the mend. The company reported its sales increased to $16.4 million compared to $10.7 million the first quarter of '03, with earnings of $671,000 versus a loss of $2.7 million the same period in '03.
But even with the improved financials, Buehler last month hinted that hard times were still ahead.
"Work continues to migrate to China and it is difficult for us to project results for future periods," Buehler said.
Now it appears the projections are over.
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