UTech Seeks Diebold and Other Financially Challenged U.S. Companies for March 4

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.

Cardtronics Inc., a Houston, Texas firm which owns and operates more than 20,000 ATMs, reported a fourth quarter net loss of $7.4 million, on a 55% revenue increase–to $116 million.  For the year, the firm reported a net loss of $27 million, on a 29% revenue increase–to $378 million.  The results reflect the financial services business of 7-Eleven Inc. which was acquired last year.

Diebold Inc., which makes automated teller machines, security systems and other products, received an unsolicited cash offer to be purchased by United Technologies Corp. of Hartford, Ct. for $2.6 billion. Diebold so far has provided no response to the offer. An acquisition of Diebold would not only expand UT’s small fire-and-security operations but would also put it in a new business of making ATMs and voting machines.

Energy Partners Ltd., New Orleans, La., reported a fourth quarter net loss of $73.4 million, on a 2% revenue increase–to $114 million.  For the year, the firm reported a net loss of $80 million, on a slight revenue increase–to $455 million.  Results for the quarter and the year included gains of $505,000 and $3.8 million respectively related to sale of assets, insurance recoveries and the extinguishment of debt.

FairPoint Communications Inc., the Charlotte, N.C. telecommunications firm, reported a fourth quarter net loss of $19.5 million.  This compares with earnings of $4.4 million for the same period one year earlier.  Revenue declined 3%–to $68 million.  The company, which owns thirty local exchange companies in eighteen states, attributed the loss to expenses associated with its attempted purchase of certain landline operations of Verizon Communications Inc. as well as an $11 million loss associated with certain interest-rate swap agreements.

First America Corp., a Santa Ana, Calif. provider of financial services, reported a fourth quarter net loss of $67.5 million, on a 14% revenue decline–to more than $1.8 billion.  For the year, the firm reported a net loss of $3.1 million, on a 4% revenue decline–to $8.2 billion.

General Motors Corp. idled three more truck-manufacturing facilities because of a parts shortage stemming from a workers’ strike at parts-supplier American Axle & Manufacturing Holdings Inc. The idling of the three plants, in Flint, Mich., Fort Wayne, In. and Oshawa, Ontario, came on top of an earlier parts-induced shutdown at its plant in Pontiac, Mich.  Further, a strike by Canadian workers caused GM to idle a minivan facility in Windsor, Ontario.

MF Global Ltd.’s shares plunged again, bringing its stock down a cumulative 40% in the last two days of trading, in the wake of revelations that one of its traders lost more than $140 million on wheat futures. The Bermuda-based brokerage firm’s customers, fearing that further trading losses may turn up, want to be assured that the losses won’t affect them. In the longer term, the losses could complicate MF’s plans to borrow money later this year as Standard & Poor’s has lowered the firm’s long-term counterparty credit ratings from BBB+ to BBB.

Tasty Baking Co., the Philadelphia, Pa. maker of the Tastykake, reported fourth quarter earnings declined to $100,000 from $1.6 million for the same period one year earlier.  Sales declined 4%–to $39 million.  For the year, the company reported its net income declined by half–to $2.1 million, on net sales of $170 million.  The prior year results included a one-time gain of $1 million while also including moving expenses of $800,000.

Titan International Inc., a Quincy, Ill. maker of off-highway steel wheels for the consumer, construction and agricultural industries, reported a fourth quarter net loss of $8.9 million, on a 24% revenue increase–to $205 million.  For the year, the firm reported a net loss of $7.3 million, on a 23% revenue increase–to $837 million.

UTStarcom Inc., the Alameda, Calif. telecom gear manufacturer, reported a fiscal 2007 net loss of $196 million.  This compares with a loss of $117 million for fiscal 2006.  Sales were virtually flat at $2.5 billion. The maker of broadband switches anticipates its auditor adding a “going concern” notation in the company’s financial report.

Valeant Pharmaceuticals International, the Aliso Viejo, Ca. drug maker, reported a fourth quarter net loss of $20 million, on a 5% revenue decline–to $237 million.  For the year, the company reported a net loss of $7.3 million, on a slight revenue increase–to $871 million.  Both the quarter and year included charges of $9.6 million and $23.2 million related to the company’s restructuring efforts.

WJ Communications Inc., the San Jose, Ca. designer of radio-frequency components for large telecom equipment makers and distributors, reported a fourth quarter net loss of $800,000, on a 6% revenue increase–to $10.6 million.  For the year, the company reported a net loss of $7 million, on a 10% revenue decline–to $44 million.  Both the quarter and year included gains of $670,000, and $1.1 million related to both restructuring and the sale of certain assets.