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Briggs & Stratton Announces Upcoming Restructuring and Impairment Charges

Submitted by Darin Norman on Thu, 01/26/2012 - 11:41

Briggs & Stratton (NYSE: BGG) announced that it plans to record up to $50 million of restructuring charges during fiscal 2012 in connection with 2 facilities consolidations and a capacity reduction at a facility in Missouri. The restructuring charges are expected to include at least $35 million of asset impairment charges. To give some perspective, BGG recorded asset impairment charges in FY07 and FY09 totaling $48 million.

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Ecolab Announces More Restructuring Charges

Submitted by Darin Norman on Mon, 01/23/2012 - 13:37

Ecolab (NYSE: ECL) announced that it plans to record $170 million of restructuring charges during the next 2 years in connection with the Nalco merger. Approximately $120 million of these charges are expected to be related to a global workforce reduction. To give some context, ECL recorded restructuring charges totaling $73 million in 2009 and $68 million in 2011. ECL also disclosed other one-time items to be recorded during 2012 and 2013, including charges for merger integration. 

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ADM Announces Upcoming Restructuring and Impairment Charges - Adds to a History of One-time Items

Submitted by Darin Norman on Tue, 01/17/2012 - 13:45

Last week, Archer-Daniels-Midland Company (NYSE: ADM) announced a plan to reduce its global workforce by eliminating nearly 1,000 positions. In connection with this effort, the company plans to incur restructuring charges of $50 million to $75 million during the third quarter of fiscal 2012. ADM also disclosed the decision to terminate its commercial alliance with Metabolix as of 8-Feb-12. As a result, ADM will record charges between $300 million and $360 million, which will primarily consist of asset impairment charges. 

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Sanctions Imposed on Church & Dwight's CEO

Submitted by Darin Norman on Tue, 01/10/2012 - 12:10

CHD's board has imposed sanctions on its Chairman & CEO in connection with an FTC investigation and related litigation. 

In Jun-09, Church & Dwight (NYSE: CHD) disclosed the receipt of a subpoena and civil investigative demand issued by the FTC in connection with an investigation related to the distribution and sale of condoms in the United States. At the time, CHD was also involved in litigation with Mayer Laboratories, a California-based competitor. The litigation related to CHD's condom sales and marketing practices. Both of these matters remain ongoing. 

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LO Carries Lowest Risk Among the 5 Companies We Follow in the Industry

Submitted by Darin Norman on Wed, 12/28/2011 - 16:53

D.I. Perspective: Based on an analysis of our 100 risk factors, Lorillard, Inc. (LO) carries the lowest risk among the 5 companies we cover in the cigarette industry. Our observations in the attached report break down each of the risk categories we regularly cover in addition to special risk factors we analyzed for purposes of this industry report.

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Kaman Corporation Settles False Claims Matter, But Grand Jury Investigation Appears Ongoing

Submitted by Darin Norman on Wed, 12/21/2011 - 14:53

Kaman Corporation (NASDAQ: KAMN) announced that its subsidiary, Kaman Precision Products, has entered into an agreement with the U.S. government to settle previously disclosed litigation involving the False Claims Act. This matter, which dates back 7 years, pertained to the subsidiary's prior FMU-143 fuze program. The settlement involves a $4.75 million payment to the U.S. government and a $1.45 million inventory write-off. The impact on 4Q11 earnings will be $6.2 million, or $0.15 per share net of tax. The company's Chief Legal Officer, Candace Clark, acknowledged the significance of the legal expenses incurred in connection with this matter as well as the diversion of management time and effort. 

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The Recent COO Appointment at The Andersons may Signal an Upcoming CEO Transition

Submitted by Darin Norman on Mon, 12/19/2011 - 15:41

The Andersons (NASDAQ: ANDE)  announced that Harold Reed, who has served as President of the company’s Grain & Ethanol Group since 2001, has been appointed to the newly created position of COO effective 1-Jan-12. Current CEO Michael Anderson was appointed Chief Executive after serving as COO. Therefore, the appointment of Reed as COO may signal an upcoming CEO transition.

If history repeats itself, don't expect a transition soon. Michael Anderson has been CEO since 1999. His transition from COO to CEO occurred 3 years into his tenure as COO.

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Ferro Corp. to lose third CFO since January, 2007.

Submitted by Darin Norman on Thu, 12/15/2011 - 16:49

On 14-Dec-11, Ferro Corp. (NYSE: FOE) filed an 8-K disclosing that Thomas Miklich would be stepping down as CFO in Jul-12, after 2 years of service. No corresponding press release was found on the company's website. Miklich's upcoming resignation will mark the third CFO departure since Jan-07. The lack of stability in the CFO position, and therefore in the finance/accounting department, has us concerned. This trend of 2-year CFO tenures is unhealthy and investors should be concerned as well. The company appears to have a problem retaining individuals in this seemingly prestigious position. The company has not yet identified a successor.            

CFO History:

• Thomas Gannon steps down in Jan-07

• Sallie Bailey steps down in Jul-10

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Diamond Foods Runs Afoul of NASDAQ Requirements for Second Time Since March-2011

Submitted by Darin Norman on Mon, 12/12/2011 - 15:12

Did you know that this morning’s disclosure by Diamond Foods (NASDAQ: DMND) of noncompliance with NASDAQ listing requirements is the second time since Mar-11 that the company has made such a disclosure?  It's true. 

Today's noncompliance event was related to an ongoing audit committee accounting investigation that caused DMND to be unable to timely file its 10-Q.  That places the company in violation of the requirement for continued listing under NASDAQ Listing Rule 5250(c)(1), which requires companies to file their periodic financial reports with the SEC on a timely basis.  But DMND also dealt with the issue of compliance with NASDAQ listing requirements earlier this year.

In Mar-11, the company received a letter from NASDAQ stating that it needed to fill the audit committee vacancy created by the departure of Dennis Mussell, a director and audit committee member who had recently retired.

The company claims it notified NASDAQ of its latest noncompliance event and it expects to receive a notice of deficiency from the NASDAQ Listing Qualifications Department.  Here is a link to DMND's Press Release.

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One-time Charges Jump at MEMC Electronic Materials, Inc. - Vastly Exceed Those Recorded Over the Last Five Years

Submitted by Darin Norman on Thu, 12/08/2011 - 13:49

MEMC Electronic Materials, Inc. (NYSE: WFR) announced today a global restructuring initiative, including a significant workforce reduction. The company stated that it expects to incur approximately $700 million of restructuring charges in 4Q11. These one-time charges include asset impairments, severance benefits, and contract termination charges. The company also announced today that it expects to record additional one-time charges in 4Q11, including up to $400 million of goodwill impairment and up to $275 million of deferred tax asset valuation allowance.

These charges greatly exceed the total amount of one-time charges recorded by the company during the past 5 years. Until today, restructuring charges had totaled $76 million since 2006 in addition to a $56 million goodwill impairment charge in 3Q11.

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