Weekly Summary of Financially Challenged U.S. Companies for January 30

The 12 items below are taken from the Summary dated 1/30/2008. A full issue contains information on more than 200 companies. Please visit the insideARM bookstore for information on subscribing to the Summary.

Centex Corp., the Dallas, Texas homebuilder, reported a third quarter net loss of $975 million, on a 30% revenue decline–to $1.9 billion. The loss, which compares with a loss of $228 million for the same period one year earlier, included write-off and impairment charges of $554 million.

Friedman’s Jewelers, the owner of more than 380 stores in 19 states which was recently hit with an involuntary Chapter 7 petition, filed a motion with the U.S. Bankruptcy Court in Delaware to convert its case to a Chapter 11 proceeding. The company listed assets of between $100 million and $500 million and liabilities of more than $100 million. The court allowed Friedman’s motion. This is the second trip to Chapter 11 in the past three years for the jewelry retailer.

Interstate Bakeries Corp.’s disclosure statement was ruled by the U.S. Bankruptcy Court as providing adequate information in order for the bankrupt Kansas City, Mo. maker of Wonder Bread to solicit approval for its reorganization plan from creditors. A confirmation hearing is scheduled for 3/12. An important part of Interstate’s reorganization plan is a $400 million exit financing commitment from Silver Point Finance.

Lennar Corp., a Miami, Fl. homebuilder, amended a credit facility, reducing the commitment of the facility from $3.1 billion to $1.5 billion. Lennar said that operating results and asset write downs in fiscal 2007 resulted in its tangible net worth to fall below certain minimum requirements specified in the credit facility.

Nautilus Inc., the financially troubled Vancouver, Wash. maker of fitness equipment, called off a shareholder rights plan that was intended to protect the firm against an unwanted takeover attempt. If effect, Nautilus, which in its third quarter lost $13.3 million on sales of $134 million, gave up in its proxy fight with Sherborne Investors LP of New York, which is trying to take control of Nautilus.

New York Racing Association made some headway toward emerging from Chapter 11 when the Internal Revenue Service reduced a $1.6 billion tax claim to only $15.2 million. A confirmation hearing on the company’s reorganization plan is scheduled for 2/7.

Northwest Airlines Corp., Eagan, Minn., reported a narrowed $8 million loss for its fourth quarter ended 12/31. That’s down from a $267 million loss in the year-earlier period. Revenue in the recent quarter was $3.1 billion. Results included a $14 million pretax loss related to the sale of its remaining interest in Pinnacle Airlines. Without that expense, Northwest broke even in the quarter.

PacifiCare, Cypress, Ca., could get hit by up to $1.3 billion fines by state regulators in California because of alleged wide-ranging problems stemming from its $9 billion takeover two years ago by UnitedHealth Group Inc. of Minnesota. Since the merger, California’s Department of Insurance says it has found more than 130,000 violations of state laws that regulate medical-care payments. Both UnitedHealth and PacifiCare say they’re making progress in addressing the regulatory issues.

Tousa Inc., the Hollywood, Fl.-based homebuilder which recently filed Chapter 11, hopes that its restructuring, in the U.S. Bankruptcy Court in Florida, will be “quick and painless”. The firm has reportedly wrapped up a deal with Citigroup Global Markets for $150 million in debtor-in-possession financing. The court still needs to approve the financing arrangement. In its last quarter, while reporting a nearly $620 million loss on revenue of $501 million, Tousa listed debts of $2.2 billion.

Trane, Piscataway, N.J. firm which was formerly known as American Standard Companies Inc., is closing a distribution center in La Crosse, Wi., which will result in the loss of 128 jobs. The move is part of a consolidation at another facility in Tennessee.

USG Corp., the Chicago, Ill. maker of gypsum wallboard, reported a fourth quarter net loss of $28 million, including an operating loss of $56 million at its North American Gypsum unit. Revenue declined 7%–to $1.2 billion. In last year’s fourth quarter USG reported net income of $100 million. The recent quarter included a $5 million restructuring charge but also a $31 million tax benefit. The manufacturer, affected by the weak housing market, has closed its less-efficient plants and cut more than 1,200 jobs over the past year and a half. For the year, its net income plunged 74%–to $76 million, on a 10% revenue decline–to $5.2 billion. The quarter and year included charges of $8 million and $26 million respectively.

Yahoo Inc. said it will cut 1,000 jobs from its payroll within the next several weeks in an effort to control costs as it streamlines its focus to its most important operations. While cutting some costs, Yahoo will nonetheless go ahead with significant investments in areas like advertising technology and some Internet operations. The Sunnyvale, Ca. company reported its fourth quarter net income declined 23%–to $206 million. Revenue increased 8%–to $1.8 billion. For the year, its net income fell 12%–to $660 million, on an 8.5% revenue increase–to nearly $7 billion.