here's wsj article A4.
August 12, 1999
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Sunbeam Loss Narrowed in Quarter
To $47 Million on 14% Rise in Sales
By MARTHA BRANNIGAN
Staff Reporter of THE WALL STREET JOURNAL
Sunbeam Corp., weighed down by a heavy debt service and high overhead, reported a second-quarter net loss of $47 million, or 47 cents a share.
The manufacturer of household consumer products and camping goods reported sales rose 14% to $661 million from $578 million in the year-ago quarter, when heavy customer inventories stymied sales.
Sunbeam managed to narrow its loss substantially from the year-earlier quarter, when it had a loss of $344 million, or $3.41 a share, including a one-time charge of $103 million, or $1.02 a share, related to early retirement of debt.
Sunbeam said its cash flow improved significantly in the latest quarter. The company generated $23 million from cash flow, compared with a drain of $83 million a year ago. Earnings before income tax, depreciation and amortization amounted to $44 million, compared with a loss of $164 million.
Sunbeam shares jumped 37.5 cents, or 6.3%, to $6.3125 in New York Stock Exchange composite trading Wednesday.
Sunbeam said it expects by the end of 1999 to have worked off the glut of inventory generated under the lofty growth projections of prior management. Sunbeam still faces the challenge of some $2.3 billion in debt, most of which was loaded onto its balance sheet during an acquisition spree by Albert J. Dunlap, the former chief executive officer who was fired by the board in June 1998. Interest expense in the second quarter totaled $45 million.
In an interview, Jerry W. Levin, chairman and CEO of Sunbeam, which is based in Boca Raton, Fla., said management is evaluating various units with an eye toward selling one or more. He said the likely result would be to use part of the proceeds of any unit sale to reduce debt and the rest to acquire other operations that fit strategically. "We are too diverse for my taste, with too many businesses to effectively manage," Mr. Levin said. "I would like to narrow that."
Excess inventory has forced the company to curtail production levels at its plants, cutting into productivity. However, Mr. Levin said Sunbeam has been tackling the problem by, among other things, shifting work among its plants. With Coleman generators in strong demand because of concerns over possible year-2000 related electrical outages, for instance, Sunbeam is making generators at a barbecue-grill plant in Neosho, Mo.
"The bottom line is their predecessors left them with a bunch of problems, including the capital structure," said Justin Maurer, an analyst with McDonald Investments in Cleveland. "They took on way too much debt, and they're in a terrible pickle."
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