Aloha Air to Close and Other Financially Challenged U.S. Companies for April 1

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. For a limited time, subscriptions to the Summary are HALF PRICE.  

 
Aloha Airgroup Inc. in Hawaii, which recently filed for bankruptcy protection, is shutting down its passenger operations, affecting about 1,900 jobs. Aloha is majority-owned by private-equity firm Yucaipa Cos. of Los Angeles.

Bon-Ton Stores Inc., a York, Pa.-based department-store operator, is closing a distribution center in Green Bay, Wi. as part of a plan to consolidate operations in other locations in Whitehall, Pa., Rockford, Il. and Fairborn, Oh.  Bon-Ton has 280 stores under the Bon-Ton, Boston Store, Bergner’s, Carson Pirie Scott, Elder-Beerman, Younkers and Herberger’s names. 

BreitBurn Energy Partners LP, a Los Angeles exploration and production company, reported a fiscal net loss of $59.7 million on revenue of $75 million.

Channell Commercial Corp., a Temecula, Calif. maker of plastic and metal enclosures, reported a fourth quarter net loss of $810,000 while revenue rose 21%–to $29.7 million. For the year it had net income of $270,000 on a 22% revenue increase–to $133 million.

Cherokee International Inc., a Tustin, Calif. manufacturer of power supplies, rectifiers and other electronic products, reported a fourth quarter net loss of $4 million on a 2.5% increase in revenue–to $38.5 million. For the year Cherokee lost $9 million on an 11% revenue decline–to almost $129 million. The quarter and year included restructuring and impairment charges of almost $4.8 million and $4.5 million respectively.

Fremont General Corp., a Brea, Ca. subprime lender, was told by state regulators to raise new capital within the next sixty days for its Fremont Investment & Loan subsidiary or sell the unit. Fremont’s fate does not present a serious threat to the overall financial system, but the move by California’s banking regulators seems to indicate increased worries about the nation’s federally insured banks. Fremont, 80% of whose depositors are insured by the Federal Deposit Insurance Corp., responded saying that there is no guarantee that it can come up with a plan to satisfy the order by the state.  

Hartmarx Corp., the Chicago apparel company, reported a first quarter net loss of more than $3.5 million on a nearly 1% slip in sales–to $120 million.

Interphase Corp., a Plano, Texas maker of telecom network equipment and software, will shutter an operation in Illinois and cut about fourteen jobs in an effort to better balance spending with revenue. The company will take related charges of up to $440,000 over the first and second quarters.

Lee Enterprises Inc., the St. Louis, Mo. newspaper company, warned that it will incur net losses in its second quarter and full year because of goodwill and intangible-asset write downs that could total between $500 million and $700 million.

RAE Systems Inc., a San Jose, Calif. maker of industrial and environmental sensor products, will trim its payroll by 10% in an effort to shave $1.3 million in costs off its annual budget.

Restore Medical Inc., a Roseville, Calif. maker of sleep devices, warned that it could deplete its cash by the middle of the year, explaining that $4.2 million is tied up in auction-rate securities. In addition, its auditor expressed worries about the company’s ability to continue as a going concern. In 2007, Restore lost $13.5 million, down from a $33.8 million loss in 2006.

Sharper Image Corp.’s trustee objected to the San Francisco specialty retailer’s plans to hire a consulting company that was founded by Sharper Image’s own new CEO.

Siboney Corp., a Kirkwood, Mo., educational-software designer, reported a narrowed 2007 net loss of $853,000, down from a $1 million loss in 2006. Revenue fell 11%–to $5.6 million.

Wilsons The Leather Experts Inc.’s CEO, Michael Searles, is departing as the Brooklyn Park, Minn. retailer of men’s and women’s leather outerwear and accessories struggles to regain its footing. So far Mr. Searles’s successor has not been named. Following a fourth quarter same-store sales drop of 2.4%, Wilsons announced that it would shutter more than half of its mall-based stores and trim its payroll.