Huge Loss for GM and Other News on Financially Challenged Firms for Feb. 14

 
The 13 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.

AMC Entertainment Inc., a Kansas City, Mo. movie-theater chain, reported a widened third quarter net loss of $11.1 million, compared to a $6.5 million loss in the year-earlier period.  Revenue fell 5%–to $378 million. During the quarter, AMC opened eight new theaters in the U.S., totaling 112 screens, and shuttered eleven other theaters with 128 screens.

Aspen Technology Inc., a Cambridge, Mass. processing-software company, is asking for additional time to file its most recent earnings report with the Securities and Exchange Commission after it missed a deadline. Aspen said last summer that it discovered certain balance-sheet accounting errors.

Countrywide Financial Corp., the Calabasas, Calif. mortgage lender, received a further equity investment from Capital Management, a unit of Legg Mason Inc. of Baltimore, Md., bringing its stake in Countrywide up to 14.9% of shares outstanding. The raised investment by Capital Management seems to reflect confidence that Countrywide’s $4 billion deal to be bought by Bank of America Corp. will go through.

DHL Express, a U.S. delivery unit of Deutsche Post AG of Germany, announced that it trimmed its payroll by 600 administration and management positions.

General Motors Corp., dragged down by its North American operations, reported a fourth quarter net loss of $722 million, compared with net income of $950 million in the year-earlier fourth quarter.  Sales in the recent period rose 7%–to $46.7 billion. Not including charges, adjusted profit for the Detroit, Mi. carmaker was $46 million in the quarter, down from $180 million a year ago. Special charges in the quarter were $768 million, including restructuring, pension and other costs that were partly offset by an $800 million tax gain. In North America, GM’s adjusted loss was $1.1 billion, and the company also took a $394 million hit related to its interest in GMAC LLC, its 49&-owned finance arm. The firm also said that, with more than $27 billion in cash and liquidity, it is sufficiently liquid to ride out the economic downturn. Separately, GM offered to buy out all 74,000 of is hourly workers in the U.S. that are represented by the United Auto Workers union.

Holley Performance Products Inc., a Bowling Green, Ky. maker of aftermarket auto components, filed Chapter 11, after determining that, despite positive cash flow, it is overleveraged. Also filing for bankruptcy protection were four of its subsidiaries. At the same time, Holley, which recently defaulted on certain notes, submitted a prepackaged joint reorganization plan and disclosure statement. Holley, which is privately-held, had sales last year of about $47 million. For further information contact the U.S. Bankruptcy Court in Wilmington, De. at 302-252-2900.

Kerry Americas, a unit of food supplier Kerry Group of Ireland, is shutting down a facility in Germantown, Wis. as part of a consolidation of seasonings production at another Wisconsin plant.  The move will affect thirty-eight workers.

Minneapolis Star Tribune, the Minnesota newspaper, announced that it will reduce its payroll by fifty-eight workers (3% of its workforce) and freeze wages for nonunion workers.

Morgan Stanley, the New York investment banker, is reducing its workforce by 1,000 workers in both the U.S. and the U.K.  The company, which recently announced it would cut 1,000 jobs in its asset management and technology sectors, is responding to the depressed mortgage markets by cutting back at its residential mortgage operations in the U.S. and closing its Advantage Home Loans operations in the U.K.

Motorcar Parts of America Inc., a Torrance, Ca. remanufacturer of alternators and starters, reported a third quarter net loss of $180,000. Sales fell 15%–to $28.2 million.

Natural Alternatives International Inc., a San Marcos, Ca. maker of private-label nutritional supplements, reported a second quarter net loss of $180,000.  Revenue was down 15%–to $20.4 million.

Natus Medical Inc., a San Carlos, Ca. maker of baby-monitoring products, said it will weed out redundant expenses and staff this year as part of a cost-cutting realignment. For this year, any cost savings from the program will be largely eaten up by severance expenses of about $800,000.

Tech Valley Printing in Watervliet, N.Y. has reportedly closed down its operations and laid off fifty workers.