Cubs Sale on Deck and Other Financially Challenged U.S. Companies for April 22

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.

Advanced Micro Devices Inc. is thinking about restructuring by possibly dumping some of its noncore operations. Earlier, the Sunnyvale, Calif. maker of semiconductor chips said it would lop off 1,600 jobs, or about 16% of its payroll, which will lead to an as-yet unspecified charge for its second quarter. The restructuring follows a string of quarterly losses. For the first quarter, Advanced Micro reported a net loss of $358 million, its sixth straight loss. The results included charges of $50 million related to its acquisition of ATI Technologies. Revenue reached $1.5 billion, up 22% from the year-earlier quarter but down 15% from the fourth quarter. Advanced Micro added that it expects to be back in the black during the second half of the year.

Amcore Financial Inc.’s shares plunged nearly 30% after the Rockford, Il. banking concern reported an unexpected first quarter loss of $27.5 million. The firm faced an increase in bad commercial real-estate loans and underwriting errors, which have led to scrutiny by federal regulators. Net chargeoffs for the quarter rose to $13.6 million, up from $2.8 million in the year-earlier period.

Comerica Inc., a regional bank, reported its first quarter net income slid 43%–to $109 million, adding that it boosted its credit-loss provision to $159 million, up nearly sevenfold from a year ago.

Cypress Semiconductor Corp., a San Jose, Calif., manufacturer of integrated circuits, reported a widened first quarter net loss of $18.4 million, compared to a $2 million loss a year ago. The recent results included restructuring charges of $2.4 million. Revenue increased 29%–to $442 million.

E*Trade Financial Corp., the Manhattan, N.Y. brokerage firm, reported a first quarter net loss of $91.2 million, compared to a $169 million profit in the year-earlier period. The results included charges of $12.8 million. Revenue sank 51%–to $316 million. Also, the firm boosted its loan-loss provision to more than $230 million, more than ten times the provision it took a year ago.

Huttig Building Products Inc., a St. Louis distributor of building materials, reported a first quarter net loss of $9.8 million. The results included pretax goodwill impairment charges of $7 million. Sales fell 25%–to $167 million.

Krispy Kreme Doughnuts Inc., the Winston-Salem, N.C. chain of donut shops, reported a widened fourth quarter net loss of $31.8 million, compared to a $24.4 million loss in the year-earlier period. Sales slipped 1%–to $111 million. For the year, Krispy Kreme lost $67.1 million on a 7% sales decline–to $429 million. The quarter and year included impairment, litigation and debt-extinguishment charges of more than $27.5 million and $37.5 million respectively.

Media General Inc., facing a continued drop in classified ads, reported a first quarter net loss of $20.3 million, nearly triple its loss in the year-earlier period. Revenue declined 11%–to almost $195 million. Publishing revenue for the Richmond, Va. firm plunged 22% in March, on top of an 18% decline in February.

PRC LLC, a bankrupt Plantation, Fla.-based operator of call centers, announced plans to lay off 424 workers at its facility in Margate, N.C. by the end of June. Some workers may be transferred to other facilities. PRC, which filed for bankruptcy protection in January, is hoping to emerge from Chapter 11 later this year. The company, owned by Diamond Castle Holdings of New York, has other operations in Florida and a location in Pittsburgh, Pa.

Strattec Security Corp., a Milwaukee maker of locks, reported its third quarter net income plummeted 85%–to $450,000. Revenue declined 16%–to $38.4 million.

Tribune Co.’s Sam Zell doesn’t want to wait a whole lot longer to unload the Chicago Cubs baseball team. Mr. Zell raised hopes of selling the Cubs more than a year ago, but the sale process has been delayed partly because of complications in releasing financial figures for the Cubs’ home, Wrigley Field. Now, however, Mr. Zell is hoping that confidential financial figures can be released within the next week or two so that potential suitors can consider making offers. Chicago, Ill.-based Tribune, which may also divest other assets such as its Newsday paper in Long Island, N.Y., faces a $250 million medium-term note due this year and a $650 million debt obligation due in December. The company may draw down on a letter of credit to meet those obligations.

Wendy’s International Inc.’s board turned down two buyout offers from entities connected to investor Nelson Peltz. One offer came from Mr. Peltz’s Trian Fund Management LP and Arby’s parent company, Triarc Cos., but Wendy’s chairman, James Pickett, said that the Trian/Triarc bid is much lower in value that one discussed last summer, which was thought to be valued at between $3.2 billion and $3.6 billion. The Peltz-connected companies also put forward a separate $900 million cash-and-stock offer. Some analysts think it unlikely that Wendy’s will be purchased in the current credit climate, and if Wendy’s remains on its own it could bring in new management, sell company-owned stores to franchisees and engage in some remodeling of locations, say some analysts.