Once-hot cooler company’s new owners trying to rejuvenate business

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After almost 60 profitable years that saw Elliott-Williams Co. install walk-in refrigerators and freezers in almost every
Indiana school, hospital and hotel, the venerable firm was brought to its knees last year.

Following months of hand-wringing, founding family members were forced to tell longtime employees and loyal customers of
the company some chilling news. Elliott-Williams was flat broke, even though only a few years earlier it had boasted double-digit
percentage growth and annual sales of $11 million.

Even though it had built a strong worldwide reputation for its walk-in units, a downturn that began in 2001 resulted in the
company's dismissing almost all its 96 employees in July 2005. It filed for Chapter 11 bankruptcy in February 2006.

Michael Elliott Jr., the co-founder's grandson, remembers feeling shock, embarrassment and a tidal wave of sadness as
his family business foundered.

"I just told our people, 'We can't make payroll anymore,'" Elliott said. "I told them, 'Today
is your last day.' Clearly, it was one of the worst days of my life."

Elliott, 42, said the downturn started even before 9/11 as negative economic forecasts slowed construction and other industries.
Post-9/11, the sale of EW units, which range in price from mid- to high-five-figures, all but ceased.

The company had survived other downturns, but nothing this severe, Elliott said.

The company's moment of despair gave rise to an unlikely savior, a new locally based venture capital firm that bought
EW out of bankruptcy for $507,000, about the cost of 10 EW walk-ins.

MarcumMcKeehan, composed of a group of investors from Indiana and Florida, bought the company last June, and company principals
now predict they can boost sales at the recently moribund manufacturer to more than $30 million in the next few years, growth
that would put EW far out front of the industry forecast of 4 percent annually.

In six months last year, the company broke even on $3 million in sales, and is projecting revenue of $7 million this year.

Elliott-Williams is MarcumMcKeehan's first acquisition, and after customer and vendor relations are restored, new principals
John Marcum and Stuart McKeehan intend to grow the company exponentially by focusing on divergent market sectors, including
military, medical, pharmaceuticals and biosciences.

But the company has many challenges ahead of it, said Henry Efroymson, chairman of law firm Ice Miller's bankruptcy practice

"The struggle for a company emerging from bankruptcy is to maintain cash flow and stabilize operational difficulties,"
Efroymson said. "One of the biggest issues is loss of confidence from contractors, customers and vendors."

According to the U.S. Trustee's Office, fewer than one-fourth of companies forced to file Chapter 11 survive.

Sold for a song

Given the company's solid reputation over much of its history, industry experts said, MarcumMcKeehan bought the company
for a fire-sale price.

"The bottom line is, we feel this is a company with a strong reputation and great potential," said Marcum, a Merrill
Lynch alum who went into business with McKeehan in January 2006. "This is a $30 million company that's just asleep.
The reach of this company is significant, but the depth [of sales] could be much better."

The walk-in refrigerator and freezer industry is highly fragmented and competitive, said Joseph Carbonara, editor of Foodservice
Equipment and Suppl
y magazine, a Chicago-based trade publication.

"There are at least five of these companies in every state, maybe more," Carbonara said. "In the food services
sector, competition is very high and margins can be low."

But in other applications, where the failure of a walk-in freezer can mean the loss of millions of dollars in product, margins
are much higher.

Medical and scientific firms, for example, often store cells, tissue and other sensitive material for months or years at
a time. Since those units often require thicker walls, reinforced infrastructure, multiple backup systems, and complicated
monitoring and alarm systems, they carry a higher price, Elliott said.

"That's where a company like Elliott-Williams could really excel," said D.J. Wagner, president of Vorndran
& Associates, a Fort Wayne-based dealer and installer of several walk-in units, including EW. "Despite the troubles
this company has faced, the quality and reliability of its products has never wavered. I'd put it up against any other
product in this category."

One of the foundations of the company's growth will be a vastly expanded worldwide network of sales representatives,
Marcum said.

Already, EW has landed a major contract with Weiss Klimatechnik, a major German scientific testing company that recently
expanded to the United States, and locally based BioStorage Technologies, a third-party storage company that works extensively
with New Jersey-based pharmaceutical giant Merck & Co.

But EW has no intention of turning its back on its roots in the food services sector. It recently landed a contract to provide
24 walk-in cooling units for Lucas Oil Stadium, the future home of the Indianapolis Colts. That deal, sources said, is likely
worth more than $1 million.

Breaking down

Though EW's future looks brighter now, the old guard hasn't forgotten the pain.

"When you're talking about lost jobs, you're talking about people's lives," Elliott said. "That
hasn't been lost on any of us here."

EW's fallout came on the heels of a five-year period in which sales more than doubled, growing from $5 million a year
to $11 million.

One of EW's best customers didn't come through with payment on a significant shipment shortly after 9/11. They were
not alone.

"It turns out that when a $10 million company is stuck with $2 million in inventory, that's a significant amount,"
Elliott said. "We suddenly had a huge problem with cash flow."

The market became flooded with product, and prices plummeted. EW was never known for the cheapest product, industry experts
said. Instead, it built its reputation on durability. When budgets were squeezed, EW felt the crunch more than most.

The company's bank, Elliott said, eventually demanded payment on $2 million in loans.

"When you have a bank, every other bank tries to steal your business. When you get worked out, you're a pariah,"
Elliott said. "That's what banks call it when they drop you; you get 'worked out.'"

Elliott said pressure from financers didn't help.

"We didn't sleep, we didn't eat, and we didn't think clearly," he said.

Thawing out potential

Despite the troubles, MarcumMcKeehan saw potential in the company's management and employees.

After being led to the firm by a third party familiar with EW, MarcumMcKeehan held face-to-face meetings with key employees,
customers and vendors.

Though Elliott's father, Mike Elliott Sr., the company's president, retired following the bankruptcy, Elliott Jr.
was retained as vice president of sales and marketing. A handful of front-office workers and 20 key factory employees were
brought back.

"What led us to Elliott-Williams was the business reputation they had built through the ages," Marcum said. "This
is a company whose products were so good, they served as test chambers for the U.S. Army."

Industry figures indicate that Elliott-Williams has a small percentage of the walk-in refrigerator and freezer market. Marcum
promises to increase that through aggressive marketing in the food service and science industries.

Big growth plans

EW remains at the 100,000-square-foot facility it has leased at 3500 E. 20th St. since 2001, and there's room to grow

Though McKeehan serves as president, he hopes to hire a new chief from outside the company soon so he can focus on bigger-picture

Marcum said he hopes to acquire two to four companies per year. MarcumMcKeehan will look specifically for companies in need
of a succession plan, Marcum said.

McKeehan, who has a background in construction and real estate development in Indiana and Florida, is the firm's operations
expert. The duo declined to identify their investors.

Despite plans to grow through acquisition, MarcumMcKeehan is focused in the short term on growing EW by revamping its corporate
culture and intensifying the work ethic. EW is also getting a marketing overhaul, including a new logo.

"We're not just looking to retrace history here," Marcum said. "The goal has always been to grow this
company to three times its former size. We're going to start by strengthening customer and vendor relationships worldwide."

Elliott shares the enthusiasm. After all, EW was born of adversity. It started when Charles Elliott lost his government contract
job following World War II and his brother, James, left military service with a $1,500 severance package.

Charles, an Indiana University chemistry major, and James, a Purdue University engineering graduate, started the company
on a shoestring, using stationery from Charles' former company. There never was a Williams involved in Elliott-Williams,
but the name appeared on the old stationery. After 2-1/2 years, the company finally ran out of the old stationery, but the
name stuck.

If all goes well, Marcum said, he and his partners might consider selling EW back to the company's management.

"We look at Elliott-Williams as a good long-term hold, but we want to get our return on investment in about five years,"
Marcum said. "If the management team at some point wants to buy us out, that's fine. It comes down to the best return
for our group."

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