DELRAY BEACH, Fla. -(Dow Jones)- Turnaround expert Albert Dunlap officially put Sunbeam Corp. on the auction block Thursday, a little more than a year after joining the then-ailing maker of small appliances as chairman and chief executive. However, Dunlap also said that Sunbeam could itself be on the acquisition trail.
Sunbeam said it is exploring "strategic alternatives," including the possible sale of the company.
Dunlap, who fired thousands of Sunbeam workers during his tenure, said his mission has been completed, adding that the "timing now is right to look towards achieving the next level of value for our shareholders."
"As I have said on numerous occasions, we will pursue whatever course serves best to enhance shareholder value, including acquisitions, mergers or possibly a sale of the company," Dunlap explained.
In an interview with Dow Jones later Thursday, Dunlap revealed that his company is looking for an acquisition. But it may also sell itself or merge with another company, and it has hired Morgan Stanley & Co. to help it decide. Analysts are betting the Delray Beach, Fla., appliance maker will buy another company.
The flamboyant Dunlap, who no longer likes his famous nickname, "Chainsaw Al," said he's preparing Sunbeam for a growth phase. First Sunbeam had to cut costs by closing 43 of its 61 warehouses, shuttering 18 of its 26 factories and shedding 9,000 workers. Then it had to improve its sales by refining its manufacturing and distribution processes. Those steps helped Sunbeam post a profit of 39 cents a share in the third quarter, compared with a 19-cent-a-share loss in the same period last year.
Dunlap said he is comfortable with analysts' estimates that Sunbeam will earn 51 cents a share in the fourth quarter.
"We set out to get our operating margin to 20% and our return on capital to 25%," said Dunlap. "Today, our operating margin is 19% ... and our return on equity is getting closer to 25% as well. It's time to grow."
Dunlap didn't reveal his list of favorite merger partners. "When I look for an acquisition or sale, I'm looking for synergy," he said. "I'm also interested in great brand names that have been tarnished."
Dunlap insisted four out of five companies in America need his scorched-earth treatment. "I'd say 80% of the companies out there need to be Dunlapped," he said. "I couldn't list them all."
Eastman Kodak Co. (EK) and Rubbermaid Inc. (RBD) are especially poorly run, Dunlap said.
Rubbermaid, a Wooster, Ohio, company that makes plastic and rubber products, is thought by Wall Street to be on Dunlap's short list of possible acquisition candidates. So are Black & Decker Corp. (BDK), Maytag Corp. (MYG), and Whirlpool Corp. (WHR).
Before arriving at Sunbeam, Dunlap engineered the turnaround of Scott Paper Co. and its subsequent merger with Kimberly-Clark Corp. With the Sunbeam job completed, the question now looms as to where he'll go next.
Sunbeam shares (SOC) Thursday closed down 87.5 cents at $47.50, after trading as high as $49.75, just under the 52-week high of $50 set last week.
Copyright (c) 1997 Dow Jones & Company, Inc.
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