NEW YORK (CNNfn) - Sunbeam Corp. on Monday abolished its quarterly dividend and rescinded an earlier decision to close four factories as part of an ambitious corporate makeover just two months after the unceremonious ouster of its former chief executive officer, "Chainsaw" Albert Dunlap, in a boardroom coup.
Dunlap's removal in June closed out a rocky two-year tenure that left the ailing appliance maker in a shambles, saddled with legal woes over a regulatory investigation centering on alleged accounting irregularities. While the tough-talking Dunlap tinkered with payrolls, slashing half of Sunbeam's workforce on a cost-cutting crusade, the company's stock swooned.
Earlier this month, Sunbeam's share price had fallen to a low of $5.125 from a March high of $53.
On Monday, however, Sunbeam (SOC) stock ended up 1/4 at 8-13/16, after the company issued a statement from its Delray Beach, Fla., headquarters outlining what it called its "strategy for revitalizing Sunbeam."
Sunbeam introduced a new senior management team, to be organized under three new operating groups comprised of Outdoor Leisure, Household Products and International.
The company also appointed a new chief financial officer, Bobby Jenkins. He presumably will have to cooperate with investigators from the Securities and Exchange Commission as they scrutinize Sunbeam's books for alleged improprieties tied to past financial statements.
Sunbeam said it would eliminate its quarterly dividend of a penny per share as it channels resources into investment.
And in a direct repudiation of Dunlap's tattered legacy, Sunbeam announced that four of eight factories slated for closure will now remain open. The factories are two plants belonging to the former Coleman Co. in Maize, Kan., and Pocola, Okla.; the First Alert plant in Aurora, Ill.; and the Sunbeam plant in Acuna, Mexico.
First Alert, a Sunbeam subsidiary, makes brand-name smoke and gas alarms. Sunbeam owns 82 percent of Coleman, a camping and outdoor recreation equipment firm.
One of the major challenges facing Jerry Levin, Sunbeam's new chief executive officer and president, is to integrate First Alert and Coleman, along with Signature Brands USA, the maker of Mr. Coffee.
Aside from that, Levin also must juggle a slew of shareholder lawsuits. Those suits and the SEC probe have essentially put on hold Levin's efforts to acquire the 18 percent of Coleman that remains publicly traded.
In the statement Monday announcing the restructuring, Levin acknowledged the formidable hurdles ahead, but expressed hope that a turning point had been reached.
"Although we still have much to do in the short term to stabilize Sunbeam's businesses, our strategic focus is on growth," he said.
He added: "In contrast to the prior management's approach, we are decentralizing operations while maintaining centralized support. Our goal is to increase accountability at the business unit level, and to give our employees the tools they need to build their businesses."
Each of the new operating groups will be organized into 17 strategic business units, charged with developing a three-year strategic plan and annual operating plans. Performance within each unit will be based on its operating income, cash flow and sales growth.
In addition to the four plants that will remain open, Sunbeam confirmed that its Mr. Coffee plant in Glenwillow, Ohio, will continue operating until at least Feb. 1, 1999. This, Sunbeam said, will "give employees, government agencies and other interested parties time to see if they can develop a plan to demonstrate that the plant can be cost-effective."
Sunbeam's plant in Mexico City, scheduled to shut down in September, will remain open until December. Two other plants -- a Coleman parts plant in Costa Rica and a sleeping bag plant in Cedar City, Utah -- already have closed.