NEW YORK (CNNfn) - Sunbeam Corp. announced Tuesday that it plans to conduct an internal review of its 1997 financial statements and warned investors not to rely on the current statements pending the outcome of the investigation.
The disputed statements already are believed to be at the center of a separate probe by the Securities and Exchange Commission, launched shortly after Sunbeam's independent directors fired the company's tough-talking chief executive officer, Albert Dunlap, on June 13.
Company officials said at the time they had lost confidence in Dunlap's leadership, noting his failure to reverse a precipitous slide in the firm's financial fortunes. Since March, shares of Sunbeam have swooned from a peak of 53 to as low as 8-3/16 a week ago.
As of Tuesday, Sunbeam (SOC) stock was still mired in the doldrums, trading down 3/16 at 10-3/16 in composite trading on the New York Stock Exchange.
(Click to view Sunbeam's one-year intraday stock chart)
Shortly before Dunlap's ouster, an article in the June 8 issue of Barron's alleged that Sunbeam resorted to accounting gimmicks to paper over the extent of the company's financial turmoil. On the day of Dunlap's removal, the Sunbeam board said they expected the company to incur a second-quarter operating loss, reversing a previous forecast.
In a statement Tuesday, Sunbeam said an audit committee comprised of company directors would begin a review to determine the "accuracy" of the appliance maker's 1997 10Q filings.
To assist in the review, Sunbeam said, the audit committee had retained Deloitte & Touche as well as Arthur Andersen LLP, the company's current auditor, which previously said it had found no irregularities in the statements.
The company added that "pending the completion of the review, its 1997 financial statements and the report of Arthur Andersen LLP should not be relied upon." The review may result, Sunbeam said, in a restatement of last year's results and those for the first quarter of 1998.
Sunbeam earlier had said it would delay filing statements of its debt until auditors complete a review of 1997 results. Separately, the company said it is in talks with a group of bankers to waive certain covenants on $1.7 billion in loans.
Sunbeam took the loans in March as part of a restructuring following the acquisition of three durable-goods makers.
Aside from its debt problems, Sunbeam also has been the target in recent months of several shareholder lawsuits in which the plaintiffs asserted the company artificially inflated the price of certain products it sold to retailers.
Sunbeam's products embrace a broad consumer spectrum, and include Grillmaster, First-Alert alarms, and Mr. Coffee machines, along with camping equipment and other outdoor supplies.
In 1997, Sunbeam reported total earnings of $1.29 per share on revenues of $1.17 billion. In its fiscal first quarter, however, the bullish trend was reversed with a reported loss of 45 cents a share.