04-10-2009, 07:47 AM
CREDITOR’S EDGE
(The Nation’s Oldest Daily Business E-Newspaper)
—The Day’s News in Capsule Form—
A Product of Bastien Financial Publications
(For more information contact us at 847-491-1900
or email <!-- e --><a href="mailto:usbj7@yahoo.com">usbj7@yahoo.com</a><!-- e -->)
Thursday
April 9, 2009
(This daily e-newspaper is a copyrighted publication for the exclusive use
of the recipient only and is not to be forwarded or copied
in whole or in part for use by any other party.)
Educational Tidbits
For Today's Financial Executive
Watching Your Cost Structure
Along with the Cost Cutting
Accounting departments are responsible for more than just keeping financial records. Increasingly, chief financial officers are in charge of cost-cutting strategies for their companies. Such strategies often involve cutting jobs and ending projects, but these are easy short-term fixes that can often fail to address more serious structural issues. Worse, short-term cuts may actually endanger a firm’s potential for growth. For more effective ways to reduce costs, financial officers should carefully and objectively review all of a company’s costs and cut expenses in areas with a long-term strategy in mind.
The Business Professional’s
Q&A Corner
YESTERDAY’S QUESTION: Explain Article 2 of the Uniform Commercial Code.
ANSWER: While the Uniform Commercial Code was adopted in all states excepting Louisiana, there are three official texts that differ in a number of ways. Another source of nonuniformity concerns various “optional†provisions such as section 2-138 which includes three options of third-party beneficiary warranties. This, combined with a variety of judicial interpretations of the UCC, underscores the need for the practitioner to take a close look at the conflict of laws set forth in section 1-105. In fact, Article 2 does not control all transactions involving the sale of goods. Section 2-201 provides that Article 2 was not intended to impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers. In addition, more states have enacted statutes to control the transfer of the title to automobiles and Unfair Trade practice statutes can significantly impact upon transactions in goods.
QUESTION: Explain the two basic rules that determine priority of security interests.
ANSWER NEXT ISSUE
Today's Headlines:
A. Schulman Inc.’s loss widens in the second quarter...
Aventine Renewable Energy Holdings Inc. files Chapter 11...
Bed Bath & Beyond Inc.’s net income falls in the fourth quarter but results beat expectations...
Belk Inc. reports a loss for 2008 on a sales decline...
Constellation Brands Inc. reports a narrowed fourth quarter loss...
Fatburger Restaurants of California Inc. and Fatburger Restaurants of Nevada Inc. are put in Chapter 11...
MKS Instruments Inc. announces another 370 job cuts...
Piedmont Research Center LLC is being purchased by Charles River Laboratories International Inc....
Pier 1 Imports Inc. reports a loss for its fourth quarter on a sales decline...
ProLogis Inc. sells another property...
Pulte Homes Inc. to merge with Centex Corp....
Resources Connection Inc.’s quarterly earnings sink on a revenue decline...
BANKRUPTCY NEWS
(For more information on these (or any) bankrupt firms
call the 800-number in your U.S. Bankruptcy Court Directory
available through Bastien Financial Publications.)
AKJ Management Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Texas. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-32105. For more information contact the court at 800-886-9008.
Aventine Renewable Energy Holdings Inc., a Pekin, Il. maker of corn-based ethanol, filed Chapter 11 as it battles dwindling liquidity, tight credit markets and declining margins. The filing, in the U.S. Bankruptcy Court in Delaware, listed assets and liabilities of about $800 million and $490 million respectively, as of the end of last year. Included in Aventine’s filing were six of its affiliates. The case number is 09-11214.
BearingPoint Inc., the bankrupt McLean, Va.-based management and tech-consulting company, reached a deal to sell its unit in Japan to PwC Advisory Co. Ltd. for $38.4 million in cash and another $6.7 million through the repayment of certain charges that are owed by the Japanese unit to the parent company.
Charles Hill Drilling Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Texas. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-32165. For more information contact the court at 800-886-9008.
Corcoran Environmental Services Inc. filed Chapter 11 in the U.S. Bankruptcy Court in Maine. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-20462. For more information contact the court at 800-650-7253.
Fatburger Restaurants of California Inc. and Fatburger Restaurants of Nevada Inc. were placed into Chapter 11 proceedings by their parent company, Fatburger Corp. Both of the affiliates’ filings were made in the U.S. Bankruptcy Court for the District in Central California, under case numbers 09-13964 and 09-13965 respectively. Each filing listed assets and liabilities of between $1 million and $100 million. Protection from creditors gives the two companies some flexibility to renegotiate terms of their leases with landlords. Fatburger Corp., Santa Monica, Ca., is controlled by Fog Cutter Capital Group of Portland, Or.
Fiesta Inn & Suites LP filed Chapter 11 in the U.S. Bankruptcy Court for the Western District of Texas. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-10898. For more information contact the court at 888-436-7477.
Hartmarx Corp. asked for permission from the U.S. Bankruptcy Court to implement an employee-retention plan.
JSK Customs Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-32412. For more information contact the court at 800-745-4459.
Knight Energy Corp. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Texas. The firm listed assets of between $100,000 and $1 million and liabilities of between $1 million and $100 million. The case number is 09-32163. For more information contact the court at 800-886-9008.
MVP Building Group LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Georgia. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-21404. For more information contact the court at 800-510-8284.
Nebraska Energy LLC filed Chapter 11 in the U.S. Bankruptcy Court in Delaware. The firm listed assets of between $1 million and $100 million each and liabilities of between $100 million and $500 million. The case number is 09-11220. For further information contact the court in Wilmington, De. at 302-252-2900.
Nova BioSource Fuels Inc., the Houston, Tx. biodiesel company which recently filed Chapter 11, will have its shares removed from trading on the New York Stock Exchange after the exchange suspended trading in Nova’s stock. The company doesn’t intend to appeal NYSE’s decision to delist it.
Orco Construction Supply Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-42847. For more information contact the court at 888-457-0604.
Polaroid Corp., the bankrupt camera firm, will be acquired by Patriarch Partners, a New York private-equity concern, for $59 million. Patriarch says it wants to rebuild the Polaroid brand.
Team Financial Inc., a Paola, Mo. bank holding company, filed Chapter 11, listing assets of $700,000 and liabilities of nearly $27 million. Earlier, Team Financial’s assets were seized by the Federal Deposit Insurance Corp. and then sold off.
Whitehead Brothers Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Alabama. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-10650. For more information contact the court at 334-954-3868.
DISTRESSED / RAPIDLY-EXPANDING COMPANIES
&
OTHER COMPANY NEWS
A.H. Belo, the Texas-based newspaper publisher, said it will cut base salaries across the board in an effort to cut annual costs by $10 million.
A. Schulman Inc., an Akron, Oh.-based maker of plastic resins and compounds, reported a second quarter loss of $10.5 million, more than double its loss in the year-earlier quarter. The recent results included various charges totaling $3.8 million. Revenue sank 43%–to $273 million. A month ago the firm, with 2,100 employees worldwide, announced plans to trim its payroll by 5% to reduce expenses.
Alaska Air Group Inc., Seattle, Wa., said that its Alaska Airlines operating unit’s traffic declined more than 8% in March from the year-earlier period—to nearly 1.6 billion revenue passenger miles.
Alcoa Inc. landed in the red in the fourth quarter, reporting a loss of $497 million as it was hurt by sinking aluminum prices and a sharp drop in orders from manufacturers in the auto and other sectors that use aluminum. The loss compares with net income of more than $300 million in the year-earlier period. Revenue in the recent quarter plunged 41%–to nearly $4.2 billion. While Alcoa also said that the industry could be about to pick up, it still faces high inventories. The manufacturer has been trying to get a handle on costs by idling production and slashing its dividend, while also trying to ease liquidity by raising cash. Alcoa added that it’s sitting on more than $5 billion in revolving credit that it hasn’t tapped into.
Avatech Solutions Inc., an Owings Mills, Md.-based provider of engineering software and related products, will trim its payroll by about twenty positions, or about 10% of its staff, and cut all remaining employees’ salaries on a temporary basis as it adapts to market conditions. The realignment will hopefully save Avatech about $2 million a year. Avatech ended up in the red in the second quarter, on a 35% drop in revenue.
Bed Bath & Beyond Inc., the Union, N.J. home-furnishings retailer, reported its fourth quarter net income declined 18%–to $141 million, because of higher costs. But the retailer’s shares surged 14% on the news as the results beat Wall Street’s and Bed Bath & Beyond’s own expectations. Sales slipped less than 1%–to $1.9 billion, although same-store sales were down more than 4%. The company has more than 1,000 stores, including seventeen new ones that it opened during the fourth quarter.
Belk Inc., the privately-held Charlotte, N.C.-based department-store operator, reported a fiscal loss of $213 million for its year ended 1/31, compared to earnings of nearly $96 million in the year earlier. The recent results included more than $360 million in goodwill-impairment and other charges. Sales for the year slumped 8.5%--to $3.5 billion, with same-store sales sliding 8.7%. Belk, with more than 300 stores, added that it ended last year with cash of $260 million and no borrowings against its current credit line.
Benihana Inc., the Miami, Fl. operator of Japanese-style restaurants, said that fourth quarter restaurant sales rose more than 5%–to $73.6 million, slightly ahead of analysts’ expectation. However same-store sales fell more than 10%. For the full year, Benihana’s sales were up 3%–to $304 million, including an 8% drop in same-store sales.
Bernstein-Rein, an ad company in Kansas City, Mo., laid off between ten and twenty staffers because of the tough economy.
Borders Group Inc., the Ann Arbor, Mi.-based bookseller, announced that it managed to trim its inventory by more than a quarter, or by more than $330 million, during the twelve-month period ended in January.
Chevron Corp., the oil giant, faces potentially $27 billion in damages for environmental degradation in Ecuador, where its Texaco unit, which it bought eight years ago for $30 billion, is alleged to have dumped oil waste during its two decades of doing business in that country’s jungles. Chevron, currently battling the litigation in a court in Ecuador, says that the 15-year-old case is without merit.
Colonial Properties Trust in Birmingham, Al. sold its Regents Park townhouse project in Atlanta, Ga. to Resource Real Estate Partners for $16.3 million in cash. Separately, it was reported that a contract to sell $100 million of Colonial’s retail developments has collapsed.
Community Health Systems Inc., Franklin, Tn., bought a 50% interest in MCSA LLC, which operates the Medical Center of South Arkansas. In another expansion move, a Community subsidiary is in a deal to acquire all of the assets of Wyoming Valley Health Care System in Wilkes-Barre, Pa. for an undisclosed amount.
Compass Minerals International Inc., Overland Park, Ks., expanded by acquiring the salt operations of Cutler-Magner Co. of Duluth, Mn. in a $3.6 million transaction.
Constellation Brands Inc., Fairport, N.Y., whittled its loss for the fourth quarter to $407 million, down sharply from an $835 million loss in the year-earlier period. The recent results included restructuring and other charges of $468 million, related primarily to weakness at its Australian and U.K. operations. Constellation’s net sales in the quarter fell 17%–to $735 million. In March the spirits and wine company said it would cut 9,000 jobs from its worldwide workforce, or about 5% of its staff, to reduce expenses.
Continental Airlines Inc., Houston, Tx., won preliminary approval from the Transportation Department to join the international Star Alliance scheduling and revenue-sharing partnership with United Airlines, Deutsche Lufthansa AG, Air Canada and other airlines. The Transportation Department’s okay would basically give the partnership members the license to act as a single airline for international flights and manage sales as a unit and streamline schedules by eliminating competing flights. With Continental on board, Star Alliance competes with other alliances including SkyTeam (which Continental currently belongs to) and Oneworld.
Dell Inc., the Round Rock, Tx.-based PC maker, cut another fifty jobs at its assembly facility in North Carolina. Dell, which has vowed to slash annual operating expenses by $1 billion, last year laid off 9,400 workers.
Delta Apparel Inc., Atlanta, Ga., acquired the Game and Kudzu headwear brands from Gekko Brands for an undisclosed amount.
Energy Composites Corp., a Wisconsin Rapids, Wi. manufacturer of equipment for the wind-power sector, said it wants to construct a facility where it will make wind-power turbine blades. The site, to be situated in Wisconsin Rapids, will hire 400 workers. A final agreement to build the plant will be made by June.
Fabrik Inc., a San Mateo, Ca. external storage company, has been acquired by Hitachi Global Storage Technologies of San Jose, Ca. for an undisclosed amount.
Family Dollar Stores Inc., a Charlotte, N.C.-based retail chain, reported its second quarter earnings surged 33%–to $84.1 million, on a 9% increase in sales–to just shy of $2 billion. Same-store sales were up more than 6% in the quarter as recession-conscious shoppers looked for bargains.
FleetCor Technologies, a Norcross, Ga. commercial-fuel-card company, widened its operations by acquiring CLC Group Inc., a Wichita, Ks. provider of lodging management services, for an undisclosed amount. FleetCor bought the business from Nautic Partners LLC.
General Motors Corp., Detroit, Mi., is partnering with Segway Inc., the scooter maker, to build a new type of two-wheel vehicle for use in urban areas.
Goodyear Tire & Rubber Co., Akron, Oh., said that it expects to reduce inventory this year by 14%, having been paring back on production since last fall. Low inventories could mean a sooner pickup in production when the economy starts to recover.
Hodgson Russ LLP, a law firm, is closing its office in Boca Raton, Fl. by the end of June.
Juniper Networks Inc., Sunnyvale, Ca., reduced its revenue projection for the first quarter to no more than $765 million, down from an earlier forecast of between $800 million and $830 million.
Leitman Siegal & Payne PC, a law firm in Birmingham, Al., expanded by purchasing Campbell Gidiere Lee Sinclair Williams PC, also in Birmingham, for an undisclosed amount.
Lincoln National Corp.’s shares bumped up after the life insurer announced that it not only repaid $500 million of its debt but also intends on repaying $200 million in commercial paper within the next couple of weeks.
Littlefield Corp., an operator of bingo halls, sold its Premiere Tents and Events business to Austin Party Central for an undisclosed amount. The sale allows Littlefield to focus on its core charitable bingo operations.
LMI Aerospace Inc., St. Charles Mo., cut its workforce by sixty staffers, or about 6% of the payroll at its aerostructures unit, “to better align with customer demandâ€.
Manitowoc Co., the Manitowoc, Wi. maker of construction and foodservice equipment, cut 160 jobs at its construction-crane division, or 13% of the payroll at its plants in Manitowoc and Port Washington, Wi.
Mechanical Technology Inc., which earlier said it had enough money to fund its operations into this month but must find additional financing, will take its shares off the Nasdaq Stock Market. The Colonie, N.Y. fuel-cell developer lost $12.5 million last year and its auditor has twice expressed worries about its ability to continue as a going concern.
MetroPCS Communications Inc., the Dallas, Tx.-based wireless carrier, boasted that its subscribership surged more than 50% during the first quarter in its third-consecutive quarter of growth. The company said it added more than 680,000 subscribers in the recent quarter.
Milwaukee Journal Sentinel, one of Wisconsin-based Journal Communications Inc.’s newspapers, cut more than two dozen jobs along with five part-time positions in a move to reduce costs.
MKS Instruments Inc., an Andover, Ma.-based maker of manufacturing instruments, is cutting another 370 jobs, bringing to 600 the number of job cuts it has announced at its operations around the world. The downsizing should save the company $40 million and reduce its anticipated loss for the first quarter. Last year MKS’s net income slumped 65%–to $30.1 million, on a 17% slide in revenue–to $647 million.
Nyx Acquisitions and Image Entertainment Inc. again altered Nyx’s proposed buyout deal. Now, Nyx will provide an additional $1 million payment, in lieu of a $1.5 million payment related to an extension of the closing of the transaction. Nyx is buying Image Entertainment, a Chatsworth, Ca. manufacturer of laser discs and DVDs, for $60.1 million.
Pernod Ricard SA, the big French-based liquor company, is reportedly close to reaching a deal to sell its Wild Turkey bourbon business in Kentucky to Gruppo Campari of Italy for $575 million. Pernod of late has been unloading some of its nonstrategic brands in an effort to raise cash to pay down $1.3 billion of debt. Last year, Pernod, whose main labels include Beefeater gin and Chivas Regal scotch, piled on debt when it shelled out $8 billion to purchase Sweden’s Vin & Spirit AB.
Piedmont Research Center LLC, a North Carolina oncology unit of PPD Inc., is being acquired by Charles River Laboratories International Inc. of Wilmington, Ma. in a $46 million cash transaction. The deal should be completed in the second quarter.
Pier 1 Imports Inc., the Fort Worth, Tx.-based specialty retailer of household goods, reported a fourth quarter loss of $29 million, compared to a profit of $14 million in the year-earlier period. Sales fell 11%–to $389 million, including a nearly 10% slump in same-store sales. The fourth quarter results were affected by store closings over the past year and the sagging Canadian dollar. For the full year Pier 1 widened its loss to $129 million, compared to a $96 million loss a year ago. Fiscal sales fell to $1.3 billion, down from $1.5 billion a year earlier, due to having shuttered more than two dozen stores over the past year and a 9% drop in same-store sales.
Planet Smoothie, a fast-growing chain of smoothie shops, will open a store in Dayton, Oh., its seventh location in Ohio. The company has more than 125 shops around the U.S.
PNC Financial Services Group Inc.’s National City Bank unit is selling fifty-seven branches to First Niagara Financial of Lockport, N.Y., including $4.2 billion in deposits.
ProLogis Inc., the Denver, Co. owner of distribution centers, sold one of its industrial buildings in Denver to Ozark Automotive Distributors Inc., an auto-parts wholesale unit of O’Reilly Automotive Inc., for $19.3 million. ProLogis, which is selling assets to raise cash to reduce debt, sold off its Chinese business and some operations in Japan earlier in the year for more than $1.3 billion.
Pulte Homes Inc., Bloomfield Hills, Mi., and Centex Corp. of Dallas, Tx. announced they will merge in a $1.3 billion stock swap that puts the value of the firms at about $3.1 billion. The combination of the two big homebuilders, which will start out with $1.8 billion in debt, will hopefully help both of them weather out the bad economy. They currently have a combined market capitalization of about $4.1 billion.
Resources Connection Inc., a California-based staffing company, said that earnings for its quarter ended 2/28 plunged 76%–to $2.1 million, while revenue sank 23%–to $156 million. The company declined to provide guidance for the current period but did warn that the quarter will be challenging. Resources Connection services the accounting and finance sectors.
Rite Aid Corp., the Camp Hill, Pa. drugstore operator, is closing a distribution facility in Newnan, Ga. and cutting almost 300 jobs in a consolidation move to boost efficiency.
Schnitzer Steel Industries Inc., the Portland, Or. steel recycling and manufacturing company, announced that it cut the value of its inventory in the second quarter by 28%.
Selectica Inc., San Jose, Ca., sold off its Selectica India Pvt. Ltd. unit in India to DAX Partners LP in a $4 million deal, which will result in a $1.6 million gain for Selectica Inc. The sale allows Selectica to focus more on its core operations.
SunGard Data Systems Inc., a Wayne, Pa. software and information-technology concern, expanded in Europe by acquiring Genix Systems AG, a Swiss provider of customer-information systems, for an undisclosed amount.
Toyota Boshoku America in Erlanger, Ky., a manufacturer of automotive parts, is shutting down a manufacturing plant in Leitchfield, Ky. and undertaking other measures to adapt to the ailing auto sector.
Toys R Us Inc., the privately-held Wayne, N.J.-based toy-superstore operator, reported its fourth quarter profit increased 11%–to $345 million, thanks to reduced expenses and growth of its superstores. Sales slid 6%–to $5.5 billion, including a 4.5% drop in same-store sales. Toys R Us has more than 1,500 locations.
Trainyard Tech LLC, a Gibsonia, Pa. railroad-technology company, acquired the train-signaling operations of General Electric Co. for an undisclosed amount. The acquisition includes the unit’s customer accounts.
Transcend Services Inc., an Atlanta, Ga. provider of medical transcription services, completed its acquisition of the U.S. medical-transcription operations of Transcription Relief Services LLC in Greensboro, N.C. for $4.5 million.
Wagner Equipment Co., an Aurora, Co.-based Caterpillar dealer in the Colorado, west Texas and New Mexico markets, announced that it laid off 140 workers, following three dozen layoffs in January amid the sagging economy. Before the recent layoffs the company had nearly 1,700 workers.
WGBH, a public-radio broadcaster in Boston, Ma., wants to furlough employees for a week and suspend employee-retirement payments to deal with a $3 million budget shortfall. That follows a dozen layoffs the radio station had to impose last year.
Wizzard Software Corp. in Pittsburgh, Pa. lost $1.8 million in its fourth quarter, For the full year the firm lost $7.7 million on revenue of $6.1 million. Wizzard is a podcasting and speech technology company.
World Financial Network National Bank, a card-banking unit of Alliance Data Systems Corp. of Dallas, Tx., renewed a $550 million conduit facility that finances $250 million in card assets.
World Fuel Services, a company that supplies marine, aviation and other fuels, has completed two expansion moves, buying Henty Oil Group of Cos. in England and TGS Petroleum in Chicago, Il., both for undisclosed amounts. TGS distributes fuel under long-term contracts to more than 160 retail operators, while Henty Oil has various operations in the U.K. World Fuel, Miami, Fl., had revenue last year of more than $18 billion.
(The Nation’s Oldest Daily Business E-Newspaper)
—The Day’s News in Capsule Form—
A Product of Bastien Financial Publications
(For more information contact us at 847-491-1900
or email <!-- e --><a href="mailto:usbj7@yahoo.com">usbj7@yahoo.com</a><!-- e -->)
Thursday
April 9, 2009
(This daily e-newspaper is a copyrighted publication for the exclusive use
of the recipient only and is not to be forwarded or copied
in whole or in part for use by any other party.)
Educational Tidbits
For Today's Financial Executive
Watching Your Cost Structure
Along with the Cost Cutting
Accounting departments are responsible for more than just keeping financial records. Increasingly, chief financial officers are in charge of cost-cutting strategies for their companies. Such strategies often involve cutting jobs and ending projects, but these are easy short-term fixes that can often fail to address more serious structural issues. Worse, short-term cuts may actually endanger a firm’s potential for growth. For more effective ways to reduce costs, financial officers should carefully and objectively review all of a company’s costs and cut expenses in areas with a long-term strategy in mind.
The Business Professional’s
Q&A Corner
YESTERDAY’S QUESTION: Explain Article 2 of the Uniform Commercial Code.
ANSWER: While the Uniform Commercial Code was adopted in all states excepting Louisiana, there are three official texts that differ in a number of ways. Another source of nonuniformity concerns various “optional†provisions such as section 2-138 which includes three options of third-party beneficiary warranties. This, combined with a variety of judicial interpretations of the UCC, underscores the need for the practitioner to take a close look at the conflict of laws set forth in section 1-105. In fact, Article 2 does not control all transactions involving the sale of goods. Section 2-201 provides that Article 2 was not intended to impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers. In addition, more states have enacted statutes to control the transfer of the title to automobiles and Unfair Trade practice statutes can significantly impact upon transactions in goods.
QUESTION: Explain the two basic rules that determine priority of security interests.
ANSWER NEXT ISSUE
Today's Headlines:
A. Schulman Inc.’s loss widens in the second quarter...
Aventine Renewable Energy Holdings Inc. files Chapter 11...
Bed Bath & Beyond Inc.’s net income falls in the fourth quarter but results beat expectations...
Belk Inc. reports a loss for 2008 on a sales decline...
Constellation Brands Inc. reports a narrowed fourth quarter loss...
Fatburger Restaurants of California Inc. and Fatburger Restaurants of Nevada Inc. are put in Chapter 11...
MKS Instruments Inc. announces another 370 job cuts...
Piedmont Research Center LLC is being purchased by Charles River Laboratories International Inc....
Pier 1 Imports Inc. reports a loss for its fourth quarter on a sales decline...
ProLogis Inc. sells another property...
Pulte Homes Inc. to merge with Centex Corp....
Resources Connection Inc.’s quarterly earnings sink on a revenue decline...
BANKRUPTCY NEWS
(For more information on these (or any) bankrupt firms
call the 800-number in your U.S. Bankruptcy Court Directory
available through Bastien Financial Publications.)
AKJ Management Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Texas. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-32105. For more information contact the court at 800-886-9008.
Aventine Renewable Energy Holdings Inc., a Pekin, Il. maker of corn-based ethanol, filed Chapter 11 as it battles dwindling liquidity, tight credit markets and declining margins. The filing, in the U.S. Bankruptcy Court in Delaware, listed assets and liabilities of about $800 million and $490 million respectively, as of the end of last year. Included in Aventine’s filing were six of its affiliates. The case number is 09-11214.
BearingPoint Inc., the bankrupt McLean, Va.-based management and tech-consulting company, reached a deal to sell its unit in Japan to PwC Advisory Co. Ltd. for $38.4 million in cash and another $6.7 million through the repayment of certain charges that are owed by the Japanese unit to the parent company.
Charles Hill Drilling Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Texas. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-32165. For more information contact the court at 800-886-9008.
Corcoran Environmental Services Inc. filed Chapter 11 in the U.S. Bankruptcy Court in Maine. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-20462. For more information contact the court at 800-650-7253.
Fatburger Restaurants of California Inc. and Fatburger Restaurants of Nevada Inc. were placed into Chapter 11 proceedings by their parent company, Fatburger Corp. Both of the affiliates’ filings were made in the U.S. Bankruptcy Court for the District in Central California, under case numbers 09-13964 and 09-13965 respectively. Each filing listed assets and liabilities of between $1 million and $100 million. Protection from creditors gives the two companies some flexibility to renegotiate terms of their leases with landlords. Fatburger Corp., Santa Monica, Ca., is controlled by Fog Cutter Capital Group of Portland, Or.
Fiesta Inn & Suites LP filed Chapter 11 in the U.S. Bankruptcy Court for the Western District of Texas. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-10898. For more information contact the court at 888-436-7477.
Hartmarx Corp. asked for permission from the U.S. Bankruptcy Court to implement an employee-retention plan.
JSK Customs Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-32412. For more information contact the court at 800-745-4459.
Knight Energy Corp. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Texas. The firm listed assets of between $100,000 and $1 million and liabilities of between $1 million and $100 million. The case number is 09-32163. For more information contact the court at 800-886-9008.
MVP Building Group LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Georgia. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-21404. For more information contact the court at 800-510-8284.
Nebraska Energy LLC filed Chapter 11 in the U.S. Bankruptcy Court in Delaware. The firm listed assets of between $1 million and $100 million each and liabilities of between $100 million and $500 million. The case number is 09-11220. For further information contact the court in Wilmington, De. at 302-252-2900.
Nova BioSource Fuels Inc., the Houston, Tx. biodiesel company which recently filed Chapter 11, will have its shares removed from trading on the New York Stock Exchange after the exchange suspended trading in Nova’s stock. The company doesn’t intend to appeal NYSE’s decision to delist it.
Orco Construction Supply Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-42847. For more information contact the court at 888-457-0604.
Polaroid Corp., the bankrupt camera firm, will be acquired by Patriarch Partners, a New York private-equity concern, for $59 million. Patriarch says it wants to rebuild the Polaroid brand.
Team Financial Inc., a Paola, Mo. bank holding company, filed Chapter 11, listing assets of $700,000 and liabilities of nearly $27 million. Earlier, Team Financial’s assets were seized by the Federal Deposit Insurance Corp. and then sold off.
Whitehead Brothers Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Alabama. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-10650. For more information contact the court at 334-954-3868.
DISTRESSED / RAPIDLY-EXPANDING COMPANIES
&
OTHER COMPANY NEWS
A.H. Belo, the Texas-based newspaper publisher, said it will cut base salaries across the board in an effort to cut annual costs by $10 million.
A. Schulman Inc., an Akron, Oh.-based maker of plastic resins and compounds, reported a second quarter loss of $10.5 million, more than double its loss in the year-earlier quarter. The recent results included various charges totaling $3.8 million. Revenue sank 43%–to $273 million. A month ago the firm, with 2,100 employees worldwide, announced plans to trim its payroll by 5% to reduce expenses.
Alaska Air Group Inc., Seattle, Wa., said that its Alaska Airlines operating unit’s traffic declined more than 8% in March from the year-earlier period—to nearly 1.6 billion revenue passenger miles.
Alcoa Inc. landed in the red in the fourth quarter, reporting a loss of $497 million as it was hurt by sinking aluminum prices and a sharp drop in orders from manufacturers in the auto and other sectors that use aluminum. The loss compares with net income of more than $300 million in the year-earlier period. Revenue in the recent quarter plunged 41%–to nearly $4.2 billion. While Alcoa also said that the industry could be about to pick up, it still faces high inventories. The manufacturer has been trying to get a handle on costs by idling production and slashing its dividend, while also trying to ease liquidity by raising cash. Alcoa added that it’s sitting on more than $5 billion in revolving credit that it hasn’t tapped into.
Avatech Solutions Inc., an Owings Mills, Md.-based provider of engineering software and related products, will trim its payroll by about twenty positions, or about 10% of its staff, and cut all remaining employees’ salaries on a temporary basis as it adapts to market conditions. The realignment will hopefully save Avatech about $2 million a year. Avatech ended up in the red in the second quarter, on a 35% drop in revenue.
Bed Bath & Beyond Inc., the Union, N.J. home-furnishings retailer, reported its fourth quarter net income declined 18%–to $141 million, because of higher costs. But the retailer’s shares surged 14% on the news as the results beat Wall Street’s and Bed Bath & Beyond’s own expectations. Sales slipped less than 1%–to $1.9 billion, although same-store sales were down more than 4%. The company has more than 1,000 stores, including seventeen new ones that it opened during the fourth quarter.
Belk Inc., the privately-held Charlotte, N.C.-based department-store operator, reported a fiscal loss of $213 million for its year ended 1/31, compared to earnings of nearly $96 million in the year earlier. The recent results included more than $360 million in goodwill-impairment and other charges. Sales for the year slumped 8.5%--to $3.5 billion, with same-store sales sliding 8.7%. Belk, with more than 300 stores, added that it ended last year with cash of $260 million and no borrowings against its current credit line.
Benihana Inc., the Miami, Fl. operator of Japanese-style restaurants, said that fourth quarter restaurant sales rose more than 5%–to $73.6 million, slightly ahead of analysts’ expectation. However same-store sales fell more than 10%. For the full year, Benihana’s sales were up 3%–to $304 million, including an 8% drop in same-store sales.
Bernstein-Rein, an ad company in Kansas City, Mo., laid off between ten and twenty staffers because of the tough economy.
Borders Group Inc., the Ann Arbor, Mi.-based bookseller, announced that it managed to trim its inventory by more than a quarter, or by more than $330 million, during the twelve-month period ended in January.
Chevron Corp., the oil giant, faces potentially $27 billion in damages for environmental degradation in Ecuador, where its Texaco unit, which it bought eight years ago for $30 billion, is alleged to have dumped oil waste during its two decades of doing business in that country’s jungles. Chevron, currently battling the litigation in a court in Ecuador, says that the 15-year-old case is without merit.
Colonial Properties Trust in Birmingham, Al. sold its Regents Park townhouse project in Atlanta, Ga. to Resource Real Estate Partners for $16.3 million in cash. Separately, it was reported that a contract to sell $100 million of Colonial’s retail developments has collapsed.
Community Health Systems Inc., Franklin, Tn., bought a 50% interest in MCSA LLC, which operates the Medical Center of South Arkansas. In another expansion move, a Community subsidiary is in a deal to acquire all of the assets of Wyoming Valley Health Care System in Wilkes-Barre, Pa. for an undisclosed amount.
Compass Minerals International Inc., Overland Park, Ks., expanded by acquiring the salt operations of Cutler-Magner Co. of Duluth, Mn. in a $3.6 million transaction.
Constellation Brands Inc., Fairport, N.Y., whittled its loss for the fourth quarter to $407 million, down sharply from an $835 million loss in the year-earlier period. The recent results included restructuring and other charges of $468 million, related primarily to weakness at its Australian and U.K. operations. Constellation’s net sales in the quarter fell 17%–to $735 million. In March the spirits and wine company said it would cut 9,000 jobs from its worldwide workforce, or about 5% of its staff, to reduce expenses.
Continental Airlines Inc., Houston, Tx., won preliminary approval from the Transportation Department to join the international Star Alliance scheduling and revenue-sharing partnership with United Airlines, Deutsche Lufthansa AG, Air Canada and other airlines. The Transportation Department’s okay would basically give the partnership members the license to act as a single airline for international flights and manage sales as a unit and streamline schedules by eliminating competing flights. With Continental on board, Star Alliance competes with other alliances including SkyTeam (which Continental currently belongs to) and Oneworld.
Dell Inc., the Round Rock, Tx.-based PC maker, cut another fifty jobs at its assembly facility in North Carolina. Dell, which has vowed to slash annual operating expenses by $1 billion, last year laid off 9,400 workers.
Delta Apparel Inc., Atlanta, Ga., acquired the Game and Kudzu headwear brands from Gekko Brands for an undisclosed amount.
Energy Composites Corp., a Wisconsin Rapids, Wi. manufacturer of equipment for the wind-power sector, said it wants to construct a facility where it will make wind-power turbine blades. The site, to be situated in Wisconsin Rapids, will hire 400 workers. A final agreement to build the plant will be made by June.
Fabrik Inc., a San Mateo, Ca. external storage company, has been acquired by Hitachi Global Storage Technologies of San Jose, Ca. for an undisclosed amount.
Family Dollar Stores Inc., a Charlotte, N.C.-based retail chain, reported its second quarter earnings surged 33%–to $84.1 million, on a 9% increase in sales–to just shy of $2 billion. Same-store sales were up more than 6% in the quarter as recession-conscious shoppers looked for bargains.
FleetCor Technologies, a Norcross, Ga. commercial-fuel-card company, widened its operations by acquiring CLC Group Inc., a Wichita, Ks. provider of lodging management services, for an undisclosed amount. FleetCor bought the business from Nautic Partners LLC.
General Motors Corp., Detroit, Mi., is partnering with Segway Inc., the scooter maker, to build a new type of two-wheel vehicle for use in urban areas.
Goodyear Tire & Rubber Co., Akron, Oh., said that it expects to reduce inventory this year by 14%, having been paring back on production since last fall. Low inventories could mean a sooner pickup in production when the economy starts to recover.
Hodgson Russ LLP, a law firm, is closing its office in Boca Raton, Fl. by the end of June.
Juniper Networks Inc., Sunnyvale, Ca., reduced its revenue projection for the first quarter to no more than $765 million, down from an earlier forecast of between $800 million and $830 million.
Leitman Siegal & Payne PC, a law firm in Birmingham, Al., expanded by purchasing Campbell Gidiere Lee Sinclair Williams PC, also in Birmingham, for an undisclosed amount.
Lincoln National Corp.’s shares bumped up after the life insurer announced that it not only repaid $500 million of its debt but also intends on repaying $200 million in commercial paper within the next couple of weeks.
Littlefield Corp., an operator of bingo halls, sold its Premiere Tents and Events business to Austin Party Central for an undisclosed amount. The sale allows Littlefield to focus on its core charitable bingo operations.
LMI Aerospace Inc., St. Charles Mo., cut its workforce by sixty staffers, or about 6% of the payroll at its aerostructures unit, “to better align with customer demandâ€.
Manitowoc Co., the Manitowoc, Wi. maker of construction and foodservice equipment, cut 160 jobs at its construction-crane division, or 13% of the payroll at its plants in Manitowoc and Port Washington, Wi.
Mechanical Technology Inc., which earlier said it had enough money to fund its operations into this month but must find additional financing, will take its shares off the Nasdaq Stock Market. The Colonie, N.Y. fuel-cell developer lost $12.5 million last year and its auditor has twice expressed worries about its ability to continue as a going concern.
MetroPCS Communications Inc., the Dallas, Tx.-based wireless carrier, boasted that its subscribership surged more than 50% during the first quarter in its third-consecutive quarter of growth. The company said it added more than 680,000 subscribers in the recent quarter.
Milwaukee Journal Sentinel, one of Wisconsin-based Journal Communications Inc.’s newspapers, cut more than two dozen jobs along with five part-time positions in a move to reduce costs.
MKS Instruments Inc., an Andover, Ma.-based maker of manufacturing instruments, is cutting another 370 jobs, bringing to 600 the number of job cuts it has announced at its operations around the world. The downsizing should save the company $40 million and reduce its anticipated loss for the first quarter. Last year MKS’s net income slumped 65%–to $30.1 million, on a 17% slide in revenue–to $647 million.
Nyx Acquisitions and Image Entertainment Inc. again altered Nyx’s proposed buyout deal. Now, Nyx will provide an additional $1 million payment, in lieu of a $1.5 million payment related to an extension of the closing of the transaction. Nyx is buying Image Entertainment, a Chatsworth, Ca. manufacturer of laser discs and DVDs, for $60.1 million.
Pernod Ricard SA, the big French-based liquor company, is reportedly close to reaching a deal to sell its Wild Turkey bourbon business in Kentucky to Gruppo Campari of Italy for $575 million. Pernod of late has been unloading some of its nonstrategic brands in an effort to raise cash to pay down $1.3 billion of debt. Last year, Pernod, whose main labels include Beefeater gin and Chivas Regal scotch, piled on debt when it shelled out $8 billion to purchase Sweden’s Vin & Spirit AB.
Piedmont Research Center LLC, a North Carolina oncology unit of PPD Inc., is being acquired by Charles River Laboratories International Inc. of Wilmington, Ma. in a $46 million cash transaction. The deal should be completed in the second quarter.
Pier 1 Imports Inc., the Fort Worth, Tx.-based specialty retailer of household goods, reported a fourth quarter loss of $29 million, compared to a profit of $14 million in the year-earlier period. Sales fell 11%–to $389 million, including a nearly 10% slump in same-store sales. The fourth quarter results were affected by store closings over the past year and the sagging Canadian dollar. For the full year Pier 1 widened its loss to $129 million, compared to a $96 million loss a year ago. Fiscal sales fell to $1.3 billion, down from $1.5 billion a year earlier, due to having shuttered more than two dozen stores over the past year and a 9% drop in same-store sales.
Planet Smoothie, a fast-growing chain of smoothie shops, will open a store in Dayton, Oh., its seventh location in Ohio. The company has more than 125 shops around the U.S.
PNC Financial Services Group Inc.’s National City Bank unit is selling fifty-seven branches to First Niagara Financial of Lockport, N.Y., including $4.2 billion in deposits.
ProLogis Inc., the Denver, Co. owner of distribution centers, sold one of its industrial buildings in Denver to Ozark Automotive Distributors Inc., an auto-parts wholesale unit of O’Reilly Automotive Inc., for $19.3 million. ProLogis, which is selling assets to raise cash to reduce debt, sold off its Chinese business and some operations in Japan earlier in the year for more than $1.3 billion.
Pulte Homes Inc., Bloomfield Hills, Mi., and Centex Corp. of Dallas, Tx. announced they will merge in a $1.3 billion stock swap that puts the value of the firms at about $3.1 billion. The combination of the two big homebuilders, which will start out with $1.8 billion in debt, will hopefully help both of them weather out the bad economy. They currently have a combined market capitalization of about $4.1 billion.
Resources Connection Inc., a California-based staffing company, said that earnings for its quarter ended 2/28 plunged 76%–to $2.1 million, while revenue sank 23%–to $156 million. The company declined to provide guidance for the current period but did warn that the quarter will be challenging. Resources Connection services the accounting and finance sectors.
Rite Aid Corp., the Camp Hill, Pa. drugstore operator, is closing a distribution facility in Newnan, Ga. and cutting almost 300 jobs in a consolidation move to boost efficiency.
Schnitzer Steel Industries Inc., the Portland, Or. steel recycling and manufacturing company, announced that it cut the value of its inventory in the second quarter by 28%.
Selectica Inc., San Jose, Ca., sold off its Selectica India Pvt. Ltd. unit in India to DAX Partners LP in a $4 million deal, which will result in a $1.6 million gain for Selectica Inc. The sale allows Selectica to focus more on its core operations.
SunGard Data Systems Inc., a Wayne, Pa. software and information-technology concern, expanded in Europe by acquiring Genix Systems AG, a Swiss provider of customer-information systems, for an undisclosed amount.
Toyota Boshoku America in Erlanger, Ky., a manufacturer of automotive parts, is shutting down a manufacturing plant in Leitchfield, Ky. and undertaking other measures to adapt to the ailing auto sector.
Toys R Us Inc., the privately-held Wayne, N.J.-based toy-superstore operator, reported its fourth quarter profit increased 11%–to $345 million, thanks to reduced expenses and growth of its superstores. Sales slid 6%–to $5.5 billion, including a 4.5% drop in same-store sales. Toys R Us has more than 1,500 locations.
Trainyard Tech LLC, a Gibsonia, Pa. railroad-technology company, acquired the train-signaling operations of General Electric Co. for an undisclosed amount. The acquisition includes the unit’s customer accounts.
Transcend Services Inc., an Atlanta, Ga. provider of medical transcription services, completed its acquisition of the U.S. medical-transcription operations of Transcription Relief Services LLC in Greensboro, N.C. for $4.5 million.
Wagner Equipment Co., an Aurora, Co.-based Caterpillar dealer in the Colorado, west Texas and New Mexico markets, announced that it laid off 140 workers, following three dozen layoffs in January amid the sagging economy. Before the recent layoffs the company had nearly 1,700 workers.
WGBH, a public-radio broadcaster in Boston, Ma., wants to furlough employees for a week and suspend employee-retirement payments to deal with a $3 million budget shortfall. That follows a dozen layoffs the radio station had to impose last year.
Wizzard Software Corp. in Pittsburgh, Pa. lost $1.8 million in its fourth quarter, For the full year the firm lost $7.7 million on revenue of $6.1 million. Wizzard is a podcasting and speech technology company.
World Financial Network National Bank, a card-banking unit of Alliance Data Systems Corp. of Dallas, Tx., renewed a $550 million conduit facility that finances $250 million in card assets.
World Fuel Services, a company that supplies marine, aviation and other fuels, has completed two expansion moves, buying Henty Oil Group of Cos. in England and TGS Petroleum in Chicago, Il., both for undisclosed amounts. TGS distributes fuel under long-term contracts to more than 160 retail operators, while Henty Oil has various operations in the U.K. World Fuel, Miami, Fl., had revenue last year of more than $18 billion.