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Sunbeam restates results
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October 20, 1998: 6:37 p.m. ET
Company finds accounting errors in three quarters; Dunlap says he's 'heartened'
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NEW YORK (CNNfn) - Beleaguered appliance maker Sunbeam Corp. said Tuesday it was restating financial results for three separate reporting periods from 1996 to 1998 because its seemingly dramatic turnaround actually owed more to misstated numbers than corporate renewal.
Accounting firm Arthur Andersen LLP completed the review of the company's books with the assistance of consulting accounting firm Deloitte & Touche LLP, Sunbeam said.
"Previously issued financial statements generally overstated the loss for 1996, overstated the profits for 1997 and understated the loss for the first quarter of 1998," Sunbeam said, adding that revenue was "incorrectly recognized" in certain periods as well.
The company said it actually lost $215 million, or $2.59 per share, in the fourth quarter of 1996, while it previously had reported a wider loss of $234.8 million, or $2.83 per share.
In fourth-quarter 1997, Sunbeam said it actually earned only $38.3 million, or 44 cents per share, on a fully diluted basis, and not $109.4 million, or $1.25 per share, as previously reported. Revenue also was lower than reported, $1.07 billion rather than $1.16 billion.
In the first quarter of 1998, the company now shows a wider loss of $54.1 million, or 63 cents per share, not the previously-reported loss of $44.6 million, or 52 cents per share.
'Chainsaw Al' responds
In a statement, Al Dunlap, who served as the company's chief executive officer during the periods at issue, said, "I am heartened by the results of Sunbeam's long-awaited restatement, for it confirms what I have been saying for the past four months: there were no improprieties or illegalities in the manner in which either I -- or my management team -- conducted Sunbeam's business. …
"Most, if not all, of Sunbeam's restatement 'corrections' appear to be after-the-fact alterations to management estimates rather than errors or misstatements. However these technical accounting issues are ultimately resolved … there has been no allegation of any management wrongdoing.
"… (While) I had no involvement whatsoever with any accounting or audit matters, I explicitly directed all of Sunbeam's personnel to perform their jobs in a legally, morally and fiduciarily correct manner, and if there were questions regarding accounting, to work them out with the auditors.
"Sunbeam's restatement today appears to reflect a disagreement as to the accounting treatment of a limited number of items. It remains to be seen whether the original treatment was correct, whether the revised treatment is correct, or possibly, whether both may be correct."
Dunlap was removed unceremoniously from his post in June following a boardroom coup. His two-year tenure, during which he slashed half the company's workforce, left the appliance maker in a shambles -- saddled with legal woes from the regulatory investigation centering on alleged accounting irregularities.
Shareholders have borne the brunt, watching the stock lose much of its value since hitting a 52-week high of 53 in March. On Tuesday, Sunbeam stock (SOC) closed up 1-3/16 to 7-11/16.
Sunbeam looks ahead
"With the restatement behind us, we will now be able to fully focus our efforts on growing the business and restoring profitability," said Jerry W. Levin, Sunbeam president and CEO. "The adjustments being announced today and the charges for this year will be largely non-cash and therefore will not have a significant effect on Sunbeam's liquidity."
Levin also said that Sunbeam's lending banks had agreed to extend its debt covenants an additional three months, through April 10, 1999, to enable the company to meet its financial obligations and continue operations.
The company had alerted investors in August that its results going back to 1996 were suspect. 
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Sunbeam Corp.
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