Channel Technologies, a Santa Barbara-area ceramic components maker that built products used in the Navy’s sonar gear for decades, has filed for bankruptcy protection amid losses on long-term contracts.
The company was expected to lose $11.6 million this year on around $30 million in revenue as it struggled to meet the terms of contracts it bid on earlier.
In a filing in the U.S. Bankruptcy Court in Santa Barbara, Channel Technologies listed Northrop Grumman, Lockheed Martin and Raytheon among its major customers. It also builds navigation systems.
CNC Machining, a precision machine parts manufacture based in Goleta, is one of three tri-county companies with an unsecured claim, according to the filing. More than $22,000 is owed to CNC for maintenance and repair. A representative from CNC told the Business Times that Channel Technologies continues to be a customer of the company.
Another regional firm affected by the Chapter 11 filing is Mission Uniform Service, which is owed more than $12,000 in unsecured claims for janitorial supplies and uniforms. A spokesman from Mission Uniform said Channel Technologies has been a customer with the company since 1977, and they have no plans on cutting ties with the defense industry manufacturer.
Ventura-based Advanced GeoEnvironmental, a full-service environmental firm, is also owed more than $25,000 in unsecured claims for contract advances, the filing said.
Channel Technologies operates in Santa Barbara and Littleton, Massachusetts, according to the Wall Street Journal, which first reported about the Chapter 11 filing.
The company’s catalogue includes some 5,000 components that are used in acoustic systems for fishermen, undersea exploration and defense. Total employment is around 225, the filing said.
Chapter 11 allows companies to suspend debt payments in order to restructure and develop a plan to pay off debts.
Founded in the late 1950s, the company has been owned by Blue Wolf Capital Advisors, LP, a private equity firm, since 2011.