Financially Challenged U.S. Companies for Feb. 12

The 12 items below are taken from the Credit Manager’s Weekly Summary of Financially Challenged Companies. A full issue contains information on more than 200 companies. Please visit the insideARM bookstore for information on subscribing to the Summary.

D.R. Horton Inc., Fort Worth, Texas, reported a first quarter net loss of $129 million, including more than $245 million in inventory and land charges. Revenue sank 39%–to $1.7 billion. Horton, the U.S.’s biggest residential homebuilder, said that home closings plummeted 36%, with net orders down 52% amid a cancellation rate of 44%. Horton added that it expects the sagging housing market to continue.

Polaroid Corp., once a pioneer in instant photography, will now get out of the film business and shutter plants in Massachusetts, the NetherlandsMexico. The company will focus on digital photography and flat-panel televisions. and

Select Comfort Corp., a Minneapolis, Minn. bedding company, reported its fourth quarter net income tumbled 80%–to $2.2 million. Sales declined 4%–to $191 million. For the year, net income sank 41%–to $27.6 million, while sales slipped 1%–to $799 million. The quarter and year included asset-impairment charges of $211,000 and $409,000 respectively.

Spectrum Brands Inc.’s shares plunged nearly 15% after the firm reported a wider first quarter loss on a drop in sales.  The Atlanta, Ga. maker of batteries and other products reported a first quarter net loss of $43.4 million. The results included charges of $3.8 million. Revenue slipped nearly 1%–to almost $561 million.

Stereotaxis Inc., a St. Louis, Mo. designer and maker of heart-treatment equipment, won commitments for unsecured loans totaling $20 million from two of its shareholders, in exchange for stock warrants. As of the end of last year, Stereotaxis had about $24 million in cash and investments. The new loans help provide the firm with up to $60 million in liquidity.

Talbots Inc., a Hingham, Ma. retailer of women’s apparel and accessories, is closing twenty-two more of its struggling retail outlets as it also trims back expansion plans.  Last fall, Talbots said it would shutter seventy-eight of its Talbots Kids and Mens stores and realign its advertising strategy to cut out television and national print ads.

Timberland Co., the Stratham, N.H. footwear company, reported its fourth quarter net income declined 33%–to $24.1 million. Revenue fell 9%–to $443 million. For the year, net income sank 60%–to $40 million, on an 8% revenue decline–to $1.4 billion. The quarter and year included restructuring charges of $9.6 million and $24.7 million respectively.

Toll Brothers Inc., a Horsham, Pa. builder of luxury homes, warned that the sagging housing market will likely continue. The firm said that its backlog was down 42% in the first quarter from the year-earlier quarter, with its number of signed contracts down 46%. In a preliminary report, Toll Brothers said that its homebuilding revenue fell more than 20% in the first quarter and that it expects to incur pretax write downs of between $150 million and $300 million. The quarterly results will be issued on 2/27.

Trans World Entertainment Corp., a Guilderland, N.Y.-based music retailer, will continue negotiating a buyout with Riley Investment Management LLC through 3/31, extending the earlier buyout negotiation deadline of 1/27.  Trans World has been hit hard by declining sales of CDs amid competition from computer downloading and competition from big-box stores.  Trans World, with more than 800 locations, expects to incur a loss of up to $20 million for fiscal 2007.  

Trek Bicycles Corp., the Waterloo, Wis. maker of bicycles, is recalling some 49,000 of its bikes for girls because of worries that the frame could break during use. The firm has already received complaints of several minor injuries.

Wilcox Family Farms in Pierce County, Way. is shutting down its dairy facility in Roy, Wash., resulting in the loss of 130 jobs. The company cited high costs. Wilcox will continue operating its egg business.

YRC Worldwide Inc., the big Overland Park, Ks. trucking firm, said it will shutter twenty-seven of its service centers and reduce its workforce by 1,100 positions. The closings, mostly in the South, include service centers at both is USF Holland and USF Reddaway units. The moves, part of YRC’s plan to reduce costs by $50 million, will result in extra charges of about $10 million. In its fourth quarter, YRC took more than $780 million in charges to write down the Holland and Reddaway businesses.