GM, Southwest Raising Funds and News on Other Financially Challenged U.S. Companies for May 14

The items below are taken from the Credit Manager’s Weekly Summary of Financially Challenged Companies. A full issue contains information on more than 200 companies. Please visit the insideARM bookstore for information on subscribing to the Summary.

Airspan Networks, a Boca Raton, Fla. firm that provides wireless-access networks, reported a widened loss in its first quarter of $10.1 million, compared to a $5.1 million loss a year ago. Revenue sank to $17.2 million, down from $26.7 million in the year-earlier quarter. The firm blamed the poor results largely on weakness at its non-WiMax operations.

Brunswick Corp., the Lake Forest, Ill. maker of recreational products, wants to close a production facility in Newberry, S.C. due to the economic slowdown. The closure will result in pretax charges of between $25 million and $30 million.

Devcon International Corp., a Boca Raton, Fla. security company, narrowed its loss in the first quarter to $6 million, compared to a $6.9 million loss a year ago. Revenue fell to $13.7 million, compared to $14.2 million in the year-earlier first quarter. The results included a $1.3 million loss from discontinued operations because of the sale of its SCGC unit. Separately, Devcon will move its shares from Nasdaq, where it’s out of compliance with listing requirements, to the Over the Counter Bulletin Board. 

Dominion Homes Inc., a Dublin, Ohio, homebuilder, reported a first quarter loss of $21.7 million, nearly twice its loss in the year-earlier period.  That constitutes Dominion’s ninth-straight quarter in the red. Revenue fell 26%–to $24.9 million. The results included impairment charges of $6.4 million. Also, the poor results bumped Dominion out of compliance with its credit agreement and, in an unaudited report, the company cautioned that it may be unable to regain compliance, thereby raising worries about its ability to continue as a going concern.

EarthLink Inc. is ending its municipal wireless-Internet service in Philadelphia because of high costs and problems with partnerships involved. The Philadelphia service is one of a number of citywide projects that have been hampered by poor financial performance and other problems.

General Motors Corp.’s chief financial officer, Ray Young, commented that the Detroit carmaker is looking into the possibility of raising more financing in order to better carry it through a possible extended downturn in the auto sector. While Mr. Young believes that GM’s $24 billion in available liquidity should carry it through for the time being, there is worry that continued economic deterioration could put pressure on the cash pile.

IdleAire Technologies Corp., a Knoxville, Tenn. heating, ventilation and air-conditioning equipment manufacturing and services company which recently filed Chapter 11, listed assets of about $211 million and liabilities of more than $303 million.

Interstate Bakeries Corp., the bankrupt Kansas City, Mo. baker, wants to sell some property in California for $1.6 million as part of its efforts to reduce costs. Bids for the property are due by 5/28 and an auction is scheduled for 5/30.

Kimball Hill Inc., a Rolling Meadows, Ill. homebuilder and its affiliates won approval to borrow $51.9 million to help finance its bankruptcy reorganization.

Linens ‘n Things Inc., a Clifton, N.J. seller of household goods, requested additional time to file its first quarter financial results, because of its bankruptcy filing earlier in the month. The retailer did say that first quarter sales slipped nearly 1%–to $567 million, including a drop in same-store sales of 5.7%. As part of its reorganization plan, the company wants to shutter 120 stores and liquidate their merchandise.

Macy’s Inc., Cincinnati, reported a first quarter net loss of $59 million, compared to net income of $36 million in the year-earlier period.  Sales fell almost 3%–to $5.75 billion, while same-store sales declined 2.6%. Results were hampered by costs for consolidating 400 stores that it gained by purchasing May Department Stores three years ago, a consolidation that is proving tougher than anticipated. Still, the retailer reiterated its earlier earnings forecast for the year. 

Natchez Regional Medical Center’s trustees are mulling a plan to sell the bankrupt hospital, which is owned by Adams County, Miss., after getting approval from the state.

Southwest Airlines Co. borrowed $600 million from a group including Citibank and seven banks in Europe to strengthen its cash position amid high prices for fuel and the economic climate. As of the end of March, the Texas-based discount carrier has nearly $3 billion in cash and $140 million in short-term investments.

Spanish Broadcasting System Inc., a Coconut Grove, Fla. Spanish-language radio broadcaster, reported a first quarter net loss of $5.9 million. Revenue was down 6%–to $36.4 million.

Toll Brothers Inc., the Horsham, Pa. builder of luxury homes, warned that its homebuilding revenue for the quarter ended 4/30 will likely drop about 30% to about $818 million. The company added that signed contracts slumped 44% from the year-earlier quarter and that pretax writedowns are expected to be between $225 million and $375 million. Also, Toll Brothers said that it ended the quarter with $1.2 billion in cash and nearly $1.3 billion available through its bank credit facility.

TravelCenters of America LLC, an operator of interstate highway travel centers, reported a first quarter net loss of $48.5 million on revenue of $1.9 billion.

Westwood One Inc., Manhattan, N.Y., reported a first quarter net loss of $5.3 million, including extra charges of nearly $8 million. Revenue was down 6%–to $107 million.

Yahoo Inc., having rebuffed a more than $47 billion buyout offer from Microsoft Corp., is now coming under some pressure from investor Carl Icahn, who’s thinking about starting up a proxy battle to gain seats on the Internet firm’s board, apparently hoping to nudge Yahoo into resuming merger talks with the Redmond, Wa. software giant. Mr. Icahn has reportedly snapped up fifty million shares of Yahoo stock worth more than $1 billion. In fact, Mr. Icahn aside, some analysts think that Yahoo may eventually return to the negotiating table with Microsoft anyway and that a deal can ultimately be worked out.