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Sunbeam posts big losses
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December 16, 1998: 11:02 a.m. ET
Delayed results for second and third quarters fall far short of estimates
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NEW YORK (CNNfn) - In the wake of one of the most talked about executive firings in recent memory, home appliances maker Sunbeam Corp. reported substantial second- and third- quarter losses Wednesday due to inflated inventories and large one-time charges.
Sunbeam last month restated its results to show a net loss for 1996 and profit for 1997. Wednesday, the struggling company reported delayed results for the second and third quarters of 1998.
For the second quarter it posted net sales of $578.5 million and a net loss of $344.1 million, including $213 million in primarily non-recurring items, or a loss of $3.41 per diluted share.
For the third quarter, Sunbeam reported net sales of $496.0 million and a net loss of $188.9 million, including $89 million in primarily non-recurring items, or a loss of $1.88 per diluted share.
In what would become one of CNNfn's top ten stories of 1998, Sunbeam (SOC) fired corporate turn-around specialist Al "Chainsaw" Dunlap in June after alleging that the success of his heralded turnaround strategy resulted from exaggerated revenue claims and misinterpreted fiscal data that masked ongoing losses and continued financial turmoil. Dunlap insists he didn't falsify data.
The company's earnings fell far short of First Call estimates for a second-quarter loss of 30 cents per share and a third-quarter loss of 12 cents per share.
The maker of such brands as Sunbeam, Oster, Grillmaster, Coleman, Mr. Coffee and First Alert said it has made some "significant" progress in areas such as surplus inventory, and its liquidity remains ample with $300 million in cash and borrowing capacity.
Jerry W. Levin, president and chief executive officer, said, "These losses provide a clear indication of the measures necessary to stabilize Sunbeam's businesses and get the company back on track."
"While our fourth quarter will continue to be burdened by certain non-recurring charges and the working down of remaining excess inventories, the quarter should begin to show improving performance," he added. "We expect this improvement to gain momentum in 1999."
For the nine months ended Sept. 30, 1998, Sunbeam reported net sales of $1.3 billion, compared with $810.7 million a year earlier. The 1998 results reflect the acquisition of First Alert and Signature Brands and an 81 percent interest in Coleman Co.
Sunbeam posted a net loss for the nine months of $587.1 million, or $6.12 per basic and diluted share, compared with earnings of $28.8 million, or 34 cents per basic share 33 cents per diluted share, in the prior year.
The 1998 period includes $339 million in charges, of which $37 million was taken in the first quarter, $213 million in the second quarter, and $89 million in the third quarter. Reflected in the 1998 results are $18 million of fees related primarily to the restatement of the company's historical financial statements and related litigation. 
-- from staff and wire reports
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Sunbeam
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