Builder Toll Bros. Profits Plummet and Other Financially Challenged U.S. Companies for Feb. 29

The 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.

The Commerce Department reported new-home sales declined 2.8% in January, after declining 4% in December and 13% in November.

 
Financially-Challenged Companies

American Axle & Manufacturing Holdings Inc.’s unionized workers struck amid overall labor tension in the ailing automotive sector. The Detroit-based maker of auto parts says that it has stockpiled parts to continue operating and that its customers will suffer a minimal impact from the strike.  American Axle’s big customers include Chrysler LLC and General Motors Corp.

Axesstel Inc., a San Diego, Calif. maker of fixed wireless voice and broadband data systems, reported a fourth quarter net loss of $5 million. Revenue tumbled 54%–to $13.8 million. For the year, it lost $9 million on a 14% drop in revenue–to $82.4 million.

BMW, the German luxury car maker which is attempting to cut costs, expects to reduce its workforce by as many as 5,500 employees by 12/31.

CertainTeed Corp., Valley Forge, Pa., reduced the payroll at its Kansas City, Kan. fiberglass-insulation facility by 140 employees.  The firm, which still has 250 workers at the site, blamed the weak housing market. 

Cott Corp.’s shares have lost nearly half their value in recent days, on news that Wal-Mart Stores Inc., its biggest customer, will cut back on products that it buys from Cott.  That could mean a significant revenue hit for the Toronto, Ontario-based maker of private-label soft drinks, which gets about 38% of its revenue from Wal-Mart. As a result of the announcement, Standard & Poor’s said it put Cott on its CreditWatch, with “negative implications” for its debt ratings. Cott, which suffered a large loss in its recent quarter, said it’s still trying to negotiate with Wal-Mart.

Dixie Group Inc., a Chattanooga, Tn. maker of high-end carpets and rugs, reported its fourth quarter net income sank 57%–to $1.4 million. Revenue declined 1%–to $79.5 million. For the year, net income fell 19%–to $6.3 million, while revenue fell 3%–to $321 million.  Both the quarter and year included merger-related charges of $1.5 million.

Gevity HR Inc., a Bradenton, Fla. professional employer organization, will discontinue its Gevity Edge Select line of business to focus on its core Gevity Edge co-employment operations.  In conjunction with that decision, Gevity will shutter a service facility in Charlotte, N.C. and cut thirty jobs.  For its fourth quarter, Gevity’s net income plummeted 97%–to $300,000. Revenue declined 6%–to $147 million. For the year, net income sank 72%–to nearly $10 million, while revenue fell almost 7%–to $605 million. The company also announced that it reduced its credit facility with Bank of America from $100 million to $85 million.

Horne International Inc., a Fairfax, Va. engineering services provider, is closing its Spectrum Sciences & Software Inc. subsidiary by the end of June because of a lack of long-term contracts and ongoing unprofitability. Horne will take a $200,000 charge related to closing the Spectrum unit.  Also, the company recently announced plans to shut down its Coast Engine & Equipment Co. unit in Florida. In an expansion, Horne, which is boosting its security-systems operations, in January purchased Amata Inc. in Englewood, Co. for $15 million.

Nortel Networks Corp., the giant Canadian telecom equipment maker,  reported a fourth quarter net loss of $844 million, on a 4% revenue decline–to $3.2 billion.  The loss, which compares with an $80 million loss for the same period one year earlier, included charges of $15 million from the sale of certain assets as well as a litigation settlement.  For the year, the company reported a net loss of $957 million on a 4% decline in revenue–to nearly $11 billion.

Reliv International Inc., the Chesterfield, Mo. maker of nutritional products, reported its fourth quarter net declined 66%–to $697,000, on a 14% sales decline–to $24.6 million.

Toll Brothers Inc., a Horsham, Pa. home builder, reported a first quarter net loss of $96 million, on a 23% revenue decline–to $843 million.  The loss, which compares with income of $54 million for the same period one year earlier, includes pretax charges of $245 million, mostly from write-downs.