Ailing Preston Corp. seeks aid from Goldman Sachs

August 15, 1992|By Kim Clark | Kim Clark,Staff Writer

Preston Corp., the Eastern Shore-based owner of Preston Trucking, said yesterday that it had hired Goldman Sachs & Co. to help it consider reshaping the way it does business.

The New York investment company will have several months to study Preston and suggest ways of improving its financial return to stockholders, Preston Chairman William B. Potter said yesterday.

Mr. Potter said Preston, which is publicly traded, decided to rethink its operations because of a string of losses.

In the first six months of 1992, Preston lost about $3 million. The company, which has been suffering from intense competition and low prices, has lost money in each of the past three years.

The company said Goldman will help in examining "strategic financial alternatives, restructuring possibilities and operating initiatives."

In December, the company restructured its loans and lines of credit, extending repayment terms.

And two years ago, the company closed two subsidiaries that specialized in long-distance and full-truckload hauling.

The company also has closed some terminals and laid off employees.

Preston's stock, which has fallen about 50 percent in value in the past year, finished the day up 37.5 cents, at $4.625 a share.

Doug Rockel, who follows the company's stock for Merrill Lynch Global Securities in New York, said last night that he would not speculate on what the announcement means.

But he said that many companies in Preston's business have not been able to survive the tough times of the past couple of years. Some trucking companies have started to rebound, but the industry in general is still consolidating, he said.

Martin Landy, Preston's vice president for marketing, said yesterday there was no truth to a rumor that a competitor had offered to buy the company.

He said the Preston Trucking division will continue moving toward the creation of two subsidiaries -- one serving the Northeast and one serving the Midwest -- and will still focus on the short-haul, less-than-truckload business.

He said he does not think the announcement means anything earthshaking for Preston.

"We are here for the long haul . . . and the short haul," he said.

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