Aloha to Liquidate and Other Financially Challenged U.S. Companies for May 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.

Aloha Airlines Inc. converted its Chapter 11 bankruptcy filing to a Chapter 7 liquidation after two potential buyers for its cargo business said they’re no longer interested in bidding for the unit. As a result, Aloha Airlines, the operating unit of Aloha Airgroup Inc. in Hawaii, shut down the cargo business. As of the end of January, Aloha, which filed Chapter 11 on 3/20, had assets and liabilities of $216 million and $285 million respectively.

Belo Corp., a Dallas television broadcasting company, reported a first quarter net loss of $15.4 million. The results included net charges of $21.4 million. Revenue slipped 2%–to $175 million.

Boyd Gaming Corp., Las Vegas, reported a first quarter net loss of $32.6 million, including a more than $90 million write down charge and a $950,000 gain from the early retirement of debt. Revenue declined 9%–to $471 million.

Citigroup Inc., Manhattan, N.Y., is selling another $3 billion in common shares in an ongoing effort to strengthen its balance sheet and protect a quarterly dividend. According to one analyst, Citigroup, which has lost upwards of $40 billion in the credit crisis, has to raise at least another $15 billion. Since last fall the banking giant has raised $39 billion to shore up its capital position.

Coca-Cola Bottling Co. Consolidated, Charlotte, N.C., reported a first quarter net loss of $4.3 million on sales of $338 million.

Dixie Group Inc., a Chattanooga, Tenn. maker of carpets and rugs, reported its first quarter net income plunged 92%–to $10,000. Revenue declined 5%–to $70.7 million.

General Motors Corp. ended up in the red in its first quarter, reporting a net loss of $3.25 billion, compared to net income of $62 million in the year-earlier period. The results, hampered by ongoing weakness in North America, included special items of $2.9 billion, including an almost $1.5 billion noncash charge for impairment of the value of its interest in GMAC LLC. The Detroit, Mi. carmaker was also hit with a $731 million noncash charge related to supplier and former parts unit Delphi Corp. Results were also hurt by a production slowdown because of a labor strike at another supplier, American Axle & Manufacturing Holdings Inc. Not including extra charges, GM’s adjusted loss for the quarter was $350 million. Revenue fell slightly–to $42.7 billion.

Gevity HR Inc., a Bradenton, Fla. professional employer organization, reported a first quarter net loss of $1.6 million. The results, compared with net income of $2.5 million a year ago, included impairment charges of $532,000. Much of the loss came from its Gevity Edge Select business, which Gevity HR said it will discontinue. Revenue declined 11%–to $143 million.

Home Interiors & Gifts Inc., a Carrollton, Texas-based home-decor retailer, filed Chapter 11, hoping to reorganize and exit bankruptcy protection as fast as possible by strengthening its balance sheet and streamlining its operations. Affiliates that were included in the filing were Titan Sourcing LLC, Laredo Candle Co. LLC, HIG Holdings LLC, Home Interiors de Puerto Rico Inc., Dallas Woodcraft Co. LLC and DWC GP LLC. The firm’s affiliates in Canada and Mexico as well as its wholly-owned Domistyle Inc. unit are not part of the Chapter 11 filing. The filing, in the U.S. Bankruptcy Court for the Northern District of Texas, listed assets and liabilities both in the range of $100 million to $500 million. Home Interiors, facing shrinking sales, has apparently failed at its efforts to reduce costs.

Lithia Motors Inc., a Medford, Ore. seller of motor vehicles, reported a first quarter net loss of almost $2.2 million. Sales fell 10%–to $699 million.

Tarpon Industries Inc., Marysville, Mich., filed Chapter 11, with a plan to receive debtor-in-possession financing from Laurus Master Fund, its senior secured lender. Tarpon, which made its filing in the U.S. Bankruptcy Court for the Eastern District of Michigan, hopes to work with Laurus to meet its commitments and increase its business. Tarpon’s filing listed assets and liabilities of between $1 million and $100 million each. Tarpon’s Eugene Welding Co. unit manufactures structural-steel tubing and rack systems. Another subsidiary, Steelbank, distributes structural and mechanical steel tubing products.

Ziff Davis Media Inc.’s unsecured creditors have criticized the company’s disclosure statement and reorganization plan, asking that the U.S. Bankruptcy Court order Ziff to change both of them. In particular, creditors doubt Ziff’s earnings projections.