(Vol. 3 No. 24) DISTRESSED COMPANY ALERT
Focused on Companies Showing Signs of Distress June 17, 2005 Profiles for Week ending June 17, 2005
Page 4 5 6 7 8 9 10 & 11 12 & 13 14 15 Company Allied Holdings, Inc. American Media Operations, Inc. Bizcom U.S.A., Inc. Great Lakes Dredge & Dock Corporation Home Interiors & Gifts, Inc. Inland Fiber Group, LLC Northwest Airlines Corporation Saks Incorporated Salton, Inc. Schefenacker AG Category Low Rating Low Rating Audit Concern Low Rating Low Rating Default Low Rating Default Default Low Rating Profile Highlights:
Allied Holdings, Inc. Standard & Poor's Ratings Services has again lowered the unsecured debt rating for Allied Holdings, Inc., to CC from CCC-. The previous downgrade was on May 11, 2005, to CCC- from CCC+. According to S&P analyst Kenneth Farer, "The downgrade reflects uncertainty surrounding Allied Holdings' near-term financial covenant compliance and liquidity, given the challenging U.S. automotive sector and the Company's hiring of a financial advisor to review strategic and financial alternatives." Mr. Farer continued, "Ratings could be lowered if covenant relief is not extended beyond June 22, 2005. Ratings on the Company's unsecured notes could be lowered to selective default, `SD' if a bond exchange or other debt restructuring arrangements are undertaken in a manner judged to be a distressed exchange." American Media Operations, Inc. Moody's Investors Service has lowered all ratings for American Media Operations, Inc., including the Company's 8 7/8% senior subordinated notes and 10 1/4% senior subordinated notes, both lowered to Caa1 from B3. According to Moody's the downgrade reflects the challenges facing the Company in its attempt to regain market share, a decline in the Company's tabloid newsstand circulation, the heavy costs involved in marketing and product development and a significant worsening of the Company's financial leverage. American Media's fourth quarter and fiscal 2005 earnings release revealed weaker than expected results for fiscal 2005 and a particularly disappointing EBITDA result for the fourth quarter. Moody's considers that the Company's modest free cash flow generation will not permit any meaningful reduction in debt, and it will be unlikely to reduce its debt level below seven times EBITDA before the end of fiscal 2006. Great Lakes Dredge & Dock Corporation Standard & Poor's Ratings Services has lowered the corporate credit rating of Great Lakes Dredge & Dock Corporation, as well as the Company's 7 3/4% senior subordinated notes due 2013, to CCC- from CCC. According to S&P analyst Paul Kurias, "The lower ratings reflect our heightened concerns about the Company's liquidity profile." At March 31, 2005 the Company's total debt, including the present value of operating leases, was $347 million, resulting in total debt to EBITDA of more than 10 times for the previous 12 months. DISTRESSED COMPANY ALERT - Volume 3, No. 24 Page 1 06/17/2005 DISTRESSED COMPANY ALERT Profile Highlights - Continued
Home Interiors & Gifts, Inc. Standard & Poor's Ratings Services has lowered the ratings on Home Interiors & Gifts, Inc., including the Company's 10 1/8% senior subordinated notes due 2008, to CCC- from CCC. According to S&P analyst Martin Kounitz, "The downgrade reflects weaker-thanexpected operating performance for the first quarter of fiscal 2005 and the disclosure in the Company's recent 10Q filing that it may breach debt covenants on its senior bank loan for the quarter ending June 30, 2005." The Company had previously received relief from covenant violations under its bank facility for the fiscal year ended December 31, 2004. Home Interiors is highly leveraged and its credit measures are weak. Inland Fiber Group, LLC In Form 8-K filed on June 15, 2005, Inland Fiber Group, LLC announced that it failed to make the semi-annual interest payment on its 9 5/8% senior notes due 2007, which was originally due on May 15, 2005, during the grace period, which ended on June 14, 2005. The trustee under the indenture has agreed to forbear subject to the completion of documentation. Additionally, noteholders owning at least 40% of the outstanding principal amount of the notes have agreed to forbear. Northwest Airlines Corporation Standard & Poor's Ratings Services has lowered ratings on Northwest Airlines Corporation and its subsidiary, Northwest Airlines, Inc. According to S&P analyst Philip Baggaley, "The downgrade was based on expected heavy losses and negative cash flows this year, the airline's inability thus far to secure needed labor cost concessions, and sizable upcoming debt and pension obligations." Ratings could be lowered further if the airline is unable to make further material progress in lowering its labor costs. An additional notable event for Northwest Airlines is the following Debt At Discounts: During the week of June 13, 2005, · Northwest 8.875% Senior Notes due 2006, were trading at a level around $67.50 · Northwest 6.625% Convertible Notes due 2023, were trading a level around $51.25 Saks Incorporated In Form 8-K filed on June 15, 2005, Saks Incorporated disclosed that it has received a notice of default with respect to its $230 million 2% convertible senior notes due 2024. The notice of default states that the Company breached covenants in the indenture. The notice of default was given by a hedge fund that states it owns more than 25% of the convertible notes. If the maturity of the outstanding convertible notes were accelerated after the sixty-day cure period had expired, such acceleration could also result in the acceleration of some or all of the Company's $990 million of senior notes. Salton, Inc. In Form 8-K filed on June 15, 2005, Salton, Inc. announced that it will not make the interest payment of approximately $6.7 million due on June 15th under its outstanding 10 3/4% senior subordinated notes. The Company believes it is prudent to utilize the 30-day grace period provided in the indenture governing the notes, while it continues to pursue various strategic options to refinance. The Company intends to operate in the normal course of business during this period and to maintain its high level of responsiveness to its customers and vendors. There can be no assurance that the Company will make the interest payment during the grace period. Additionally, Standard & Poor's Ratings Services has lowered Salton's subordinated debt rating, to D from CC. Schefenacker AG Standard & Poor's Ratings Services has lowered the rating on Schefenacker AG's 200 million senior subordinated bonds, to CCC from CCC+. According to S&P analyst Maria Bissinger, "These actions reflect Standard & Poor's view that Schefenacker's very aggressive leverage increases the Company's vulnerability to negative surprises in the challenging industry environment for automotive suppliers. In addition, we believe that Schefenacker's free operating cash flow generation in 2005 is likely to be negative. To maintain the current rating, the Company needs to improve its extremely leveraged capital structure." DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 2 06/17/2005 Distressed Company Alert Profile Update:
The following companies were previously reported in the Distressed Company Alert. Proxim Corporation Previous DCA Event: Misc. (5/11/2005) In Form 10-Q filed on May 11, 2005, Proxim Corporation stated that the Company has an immediate need for additional financing. If the Company is not able to obtain financing in the second quarter of 2005, it will have insufficient cash to pay its obligations, will be unable to meet its ongoing operating obligations as they come due and will be required to seek protection under the U.S. Bankruptcy Code. Chapter 11 Filing Proxim announced that it has entered into an asset purchase agreement whereby Moseley Associates will acquire substantially all assets of Proxim. Under the agreement Moseley will acquire and assume most of the domestic and foreign operations of Proxim, for a purchase price of $21 million, subject to certain adjustments and deductions. The sale will be implemented through Proxim's filing of a Chapter 11 bankruptcy case, with the U.S. Bankruptcy Court in the District of Delaware, and subject to Court confirmation and overbidding procedures. McLeodUSA, Inc. Previous DCA Event: Going Concern. (3/25/2005) In a Form 10-K filed on March 25, 2005, McLeodUSA Inc.'s auditor, Deloitte & Touche LLP, raised substantial doubt about the Company's ability to continue as a going concern. According to Deloitte & Touche, the Company has recurring losses from operations, negative net cash flows and net stockholders' capital deficit. NASDAQ Delisting McLeodUSA, Inc. announced on June 17, 2005 that it received on June 14, 2005, a notice from The Nasdaq Stock Market, Inc. indicating that, as previously disclosed, the Company does not comply with Nasdaq Marketplace Rule 4310(c)(2)(B)(ii), which requires companies listed on The Nasdaq SmallCap Market to maintain a market value of listed securities of $35 million, and that the Company had not regained compliance in accordance with Marketplace Rule 4310(c)(8)(c). J.L. French Automotive Castings Inc. Previous DCA Low Rating (12/27/2004) Moody's downgraded the ratings of J.L. French Automotive Castings, Inc. by one notch. Moody's said the downgrade follows its evaluation of the impact of a partial refinancing of J.L. French's existing bank credit facilities on December 27, 2004. Ratings Lowered Standard & Poor's Rating Service announced on June 14, 2005 that it lowered its corporate credit rating on automotive supplier J.L. French Automotive Castings Inc.'s to CCC+ from B. S&P's outlook is negative. Key Energy Services, Inc. Previous DCA Event: Miscellaneous. (6/7/2004) On June 7, 2004, Key Energy Services, Inc. announced that it was in default from the trustee for two series of its senior notes. The Company has about $150 million outstanding of 6 3/8% notes due 2013 and $275 million outstanding of 8 3/8% notes due 2008. U.S. Bank NA is the trustee. In March 2005, Key Energy announced it would not file its 2003 annual report on time. Failing to file the report on time is a default under the notes' indenture. Notice of Default Key Energy Services, Inc. announced that it had received notice from the trustee that the Company is in breach of the financial reporting covenants contained in the indentures of its 8 3/8% senior notes due 2008 and 6 3/8% senior notes due 2013 and stating that unless the deficiency is remedied within 60 days, an event of default would occur under the indentures. Recent Public Bankruptcies Date 6/14 6/13 Company Court Skyway Communications FL-M Proxim Corporation. DE (Source: BankruptcyData.com) DISTRESSED COMPANY ALERT - Volume 3, No. 24 Page 3 06/17/2005 DISTRESSED COMPANY ALERT Category: Low Rating Allied Holdings, Inc.
160 Clairemont Avenue, Suite 200 Decatur, GA 30030 (404) 373-4285 Officers: Robert J. Rutland - Chairman of the Board Hugh E. Sawyer - President & CEO David A. Rawden - E.V.P. & CFO Securities: Ticker: AHI Exchange: AMEX 8 5/8% Senior Notes due 2007; $150,000,000 Common Stock; 8,940,167 shares outstanding as of 3/31/2005 Federal Tax ID: 580360550 SIC: 4213 Trucking, Except Local Employees: 6,400 Company Website: www.alliedholdings.com Auditor: KPMG LLP Business: Allied Holdings, Inc. is a holding company that operates through its wholly owned subsidiaries. The Company's principal operating subsidiaries are Allied Automotive Group, Inc. and Axis Group, Inc. Allied Automotive Group specializes in the transportation of automobiles, sport utility vehicles and light trucks and serves and supports domestic and foreign automotive manufacturers in North America. Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 12/31/2004 $136.63 $234.77 $463.08 $108.90 $421.53 12/31/2003 $135.11 $230.13 $451.25 $122.05 $460.06 Income Statement: ($millions, except per share data)
Period Revenue Net Income Earnings Per Share 12/31/2004 12 months ending $895.21 ($53.88) ($6.15) 12/31/2003 12 months ending $865.46 ($8.60) ($1.02) 12/31/2002 12 months ending $898.06 ($7.53) ($0.91) Event: Standard & Poor's Ratings Services has again lowered the unsecured debt rating for Allied Holdings, Inc., to CC from CCC-. The previous downgrade was on May 11, 2005, to CCC- from CCC+. According to S&P analyst Kenneth Farer, "The downgrade reflects uncertainty surrounding Allied Holdings' near-term financial covenant compliance and liquidity, given the challenging U.S. automotive sector and the Company's hiring of a financial advisor to review strategic and financial alternatives." Source: S&P Profile Number: 126-604 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 4 06/17/2005 DISTRESSED COMPANY ALERT Category: Low Rating American Media Operations, Inc.
1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 Officers: David J. Pecker - Chairman of the Board, President & CEO John A. Miley - E.V.P. & CFO Securities: 10 1/4% Senior Subordinated Notes due 2009; $400,000,000 8 7/8% Senior Subordinated Notes due 2011; $150,000,000 Common Stock; 7,507,600 shares outstanding as of 6/28/2004 Federal Tax ID: 592094424 SIC: 2721 Publishing, or Publishing and Printing Employees: 976 Auditor: Deloitte & Touche LLP Business: American Media Operations, Inc. is a wholly owned subsidiary of American Media, Inc. and publishes National Enquirer, Globe, Star, National Examiner, Weekly World News, Sun, Country Weekly, Country Music magazine, MIRA, Auto World magazine and other monthly magazines. Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 3/29/2004 $147.56 $984.45 $1,290.33 $135.01 $1,497.48 3/31/2003 $167.67 $1,010.37 $1,325.34 $120.54 $1,500.26 Income Statement: ($millions, except per share data)
Period Revenue Net Income 3/29/2004 12 months ending $515.67 $23.56 3/31/2003 12 months ending $399.73 $35.42 3/25/2002 12 months ending $368.13 ($21.48) Event: Moody's Investors Service has lowered all ratings for American Media Operations, Inc., including the Company's 8 7/8% senior subordinated notes and 10 1/4% senior subordinated notes, both lowered to Caa1 from B3. According to Moody's the downgrade reflects the challenges facing the Company in its attempt to regain market share, a decline in the Company's tabloid newsstand circulation, the heavy costs involved in marketing and product development and a significant worsening of the Company's financial leverage. Source: Moody's Profile Number: 126-816 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 5 06/17/2005 DISTRESSED COMPANY ALERT Category: Audit Concern Bizcom U.S.A., Inc.
5440 NW 33rd Avenue, Suite 106 Fort Lauderdale, FL 33309 (954) 714-0028 Officers: Hanan Klein - Chairman of the Board, CEO & President David L. George - COO & CTO Securities: Common Stock; 25,503,074 shares outstanding as of 5/16/2005 Federal Tax ID: 650681772 SIC: 4812 Radiophone Company Employees: 31 Auditor: Daszkal Bolton LLP Business: BIZCOM U.S.A., doing business as CX2 Technologies, owns and operates a network of 220MHz radio systems used for real-time voice communications and data transmission. In addition, the company makes wireless products and emergency management communications software and equipment for the public safety and disaster relief markets. Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 6/30/2004 $2.10 $2.98 $5.08 $0.39 $38.22 6/30/2003 $0.62 $0.00 $0.62 $0.62 $21.23 Income Statement: ($millions, except per share data)
Period Revenue Net Income Earnings Per Share 6/30/2004 12 months ending $1.19 ($9.97) ($0.52) 6/30/2003 12 months ending $1.22 ($4.46) ($0.51) Event: In a Form 10-KSB filed on June 10, 2005, Bizcom U.S.A., Inc.'s auditor, Daszkal Bolton LLP, raised substantial doubt about the Company's ability to continue as a going concern. According to Daszkal Bolton, the Company presently has limited operations, and its present level of revenues is not sufficient to cover all incurred expenses. Source: Form 10-KSB, 6/10/2005 Profile Number: 126-814 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 6 06/17/2005 DISTRESSED COMPANY ALERT Category: Low Rating Great Lakes Dredge & Dock Corporation
2122 York Road Oak Brook, IL 60523 (630) 574-3000 Officers: Douglas B. Mackey - President & CEO Richard M. Lowry - E.V.P. & COO Deborah A. Wensel - S.V.P. & CFO Securities: 7 3/4% Senior Unsecured Subordinated Notes due 2013; $175,000,000 Federal Tax ID: 133634726 SIC: 1600 Heavy Construction Employees: 290 Company Website: www.gldd.com Auditor: Deloitte & Touche LLP Business: Great Lakes Dredge & Dock Corporation specializes in dredging for natural underwater materials such as silts, clays, sands, and rock. The Company deepens and maintains waterways, shipping channels, and ports, as well as creates beaches, restores wetlands and excavate pipelines. Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 12/31/2004 $73.10 $252.90 $421.15 $112.31 $508.64 12/31/2003 $63.21 $256.75 $424.21 $113.66 $522.94 Income Statement: ($millions, except per share data)
Period Revenue Net Income 12/31/2004 12 months ending $350.86 ($11.09) 12/31/2003 12 months ending $398.80 ($1.60) 12/31/2002 12 months ending $362.60 $13.00 Event: Standard & Poor's Ratings Services has lowered the corporate credit rating of Great Lakes Dredge & Dock Corporation, as well as the Company's 7 3/4% senior subordinated notes due 2013, to CCC- from CCC. According to S&P analyst Paul Kurias, "The lower ratings reflect our heightened concerns about the Company's liquidity profile." Source: S&P Profile Number: 126-588 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 7 06/17/2005 DISTRESSED COMPANY ALERT Category: Low Rating Home Interiors & Gifts, Inc.
1649 Frankford Road, W Carrollton, TX 75007 (972) 695-1000 Officers: Joe Colonnetta - Chairman of the Board Michael D. Lohner - President & CEO Mary-Knight Tyler - COO Kenneth J. Cichocki - S.V.P. & CFO Securities: 10 1/8% Senior Subordinated Notes due 2008; $149,100,000 Common Stock; 15,240,218 shares outstanding as of 3/23/2005 Federal Tax ID: 750981828 SIC: 5023 Home furnishings Employees: 1,400 Company Website: www.homeinteriors.com Auditor: PricewaterhouseCoopers LLP Business: Home Interiors & Gifts, Inc. manufactures and distributes home decorative accessories. The Company's independent sales representatives conduct shows in the home of potential customers. Home Interiors' products include framed artwork, mirrors, molded plastic products and candles. Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 12/31/2004 $100.19 $450.33 $559.94 $137.32 $229.27 12/31/2003 $93.18 $311.78 $427.31 $141.25 $235.92 Income Statement: ($millions, except per share data)
Period Revenue Net Income 12/31/2004 12 months ending $549.81 ($3.93) 12/31/2003 12 months ending $615.48 $32.36 12/31/2002 12 months ending $574.50 $35.65 Event: Standard & Poor's Ratings Services has lowered the ratings on Home Interiors & Gifts, Inc., including the Company's 10 1/8% senior subordinated notes due 2008, to CCC- from CCC. According to S&P analyst Martin Kounitz, "The downgrade reflects weaker-than-expected operating performance for the first quarter of fiscal 2005, and the disclosure in the Company's recent 10Q filing that it may breach debt covenants on its senior bank loan for the quarter ending June 30, 2005." Source: S&P Profile Number: 126-672 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 8 06/17/2005 DISTRESSED COMPANY ALERT Category: Default Inland Fiber Group, LLC
6400 Highway 66 Klamath Falls, OR 97601 (541) 884-2240 Officers: John M. Rudey - Chairman of the Board, President & CEO Securities: 9 5/8% Senior Notes due 2007; $225,000,000 Federal Tax ID: 911217136 SIC: 2411 Logging Employees: 0 Auditor: Eisner, LLP Business: Inland Fiber Group, LLC consists of growing trees, the sale of logs and standing timber and the sale of excess land. The Company owns approximately 272,000 acres of timberland and cutting rights on approximately 70,000 acres of timberland containing total merchantable timber volume estimated as of January 1, 2004 to be approximately 0.7 billion board feet . Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 12/31/2004 $230.06 $0.00 $230.07 $1.25 $96.49 12/31/2003 $9.15 $225.00 $234.15 $2.63 $168.67 Income Statement: ($millions, except per share data)
Period Revenue Net Income 12/31/2004 12 months ending $44.32 ($68.10) 12/31/2003 12 months ending $37.13 ($47.32) 12/31/2002 12 months ending $49.47 ($44.07) Event: In Form 8-K filed on June 15, 2005, Inland Fiber Group, LLC announced that it failed to make the semi-annual interest payment on its 9 5/8% senior notes due 2007, which was originally due on May 15, 2005, during the grace period, which ended on June 14, 2005. Source: Form 8-K, 6/15/2005 Profile Number: 126-551 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 9 06/17/2005 DISTRESSED COMPANY ALERT Category: Low Rating Northwest Airlines Corporation
2700 Lone Oak Parkway Eagan, MN 55121 (612) 726-2111 Officers: Gary L. Wilson - Chairman of the Board Douglas M. Steenland - President & CEO Bernard L. Haan - E.V.P. & CFO Securities: Ticker: NWAC Exchange: Nasdaq Common Stock; 87,112,585 shares outstanding as of 1/31/2005 See next page for additional security information ... Federal Tax ID: 411905580 SIC: 4512 Scheduled Air Transportation Employees: 39,342 Company Website: www.nwa.com Auditor: Ernst & Young LLP Business: Northwest Airlines Corporation is the indirect parent corporation of Northwest Airlines, Inc., which is engaged in the business of transporting passengers and cargo. Northwest Airlines Corporation operates an airline that transports passengers and cargo. The Company operates domestic hubs at Detroit, Minneapolis/St. Paul, and Memphis. Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 12/31/2004 $4,497.00 $7,715.00 $17,129.00 $3,578.00 $14,042.00 12/31/2003 $4,279.00 $7,198.00 $16,019.00 $3,836.00 $14,008.00 Income Statement: ($millions, except per share data)
Period Revenue Net Income Earnings Per Share 12/31/2004 12 months ending $11,279.00 ($862.00) ($10.32) 12/31/2003 12 months ending $10,077.00 $248.00 $2.75 12/31/2002 12 months ending $9,976.00 ($798.00) ($9.32) Event: Standard & Poor's Ratings Services has lowered ratings on Northwest Airlines Corporation and its subsidiary, Northwest Airlines, Inc. According to S&P analyst Philip Baggaley, "The downgrade was based on expected heavy losses and negative cash flows this year, the airline's inability thus far to secure needed labor cost concessions, and sizable upcoming debt and pension obligations." Source: S&P Profile Number: 126-145 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 10 06/17/2005 DISTRESSED COMPANY ALERT Category: Low Rating
Northwest Airlines Corporation
2700 Lone Oak Parkway Eagan, MN 55121 (612) 726-2111 Federal Tax ID: 411905580 SIC: 4512 Scheduled Air Transportation Exchange: Nasdaq (* Downgraded on 6/14/2005) Security description 9.36% Senior Notes due 2006 13.875% Senior Subordinated Notes due 2008 10.23% Senior Notes due 2014 11.3% Senior Notes due 2014 6.264% Senior Notes due 2021 6.625% Convertible Notes due 2023 6.625% Convertible Notes due 2023 7.248% Senior Subordinated Notes due 2014 7.67% Senior Notes due 2015 7.875% Senior Notes due 2008 7.935% Senior Notes due 2020 8.7% Senior Notes due 2007 8.875% Senior Notes due 2006 8.97% Senior Notes due 2015 9.152% Senior Notes due 2011 9.485% Senior Notes due 2016 9.875% Senior Notes due 2007 10% Senior Notes due 2009 7.625% Convertible Notes due 2023 7.625% Convertible Notes due 2023 8.26% Senior Notes due 2006 9.25% Senior Notes due 2014 7.78% Senior Notes due 2012 3.7% Senior Notes due 2015 4.03% Senior Notes due 2014 6.81% Senior Notes due 2021 6.841% Senior Notes due 2012 7.039% Senior Subordinated Notes due 2008 7.041% Senior Notes due 2023 7.068% Senior Notes due 2017 7.068% Senior Notes due 2016 7.36% Senior Notes due 2021 7.575% Senior Notes due 2020 7.626% Senior Notes due 2011 7.691% Senior Notes due 2018 7.95% Senior Notes due 2016 8.07% Senior Notes due 2016 8.072% Senior Notes due 2021 8.13% Senior Notes due 2015 8.304% Senior Notes due 2012 9.055% Senior Notes due 2012 9.179% Senior Notes due 2011 10.5% Senior Notes due 2009 Am't. Outs. 10.8 0.5 45.3 30.2 143.8 150.0 150.0 33.1 271.8 200.0 117.2 100.0 270.0 48.6 14.5 40.5 300.0 300.0 225.0 225.0 29.0 120.8 52.1 190.2 439.8 194.9 156.6 1.3 168.1 100.1 34.6 89.4 288.1 57.1 95.1 95.9 90.6 411.2 57.4 55.7 48.8 35.8 546.6 06/17/2005 Securities: Ticker: NWAC Issuer NWA Trust * NWA Trust NWA Trust * NWA Trust * Northwest Airlines Inc Northwest Airlines Corp * Northwest Airlines Corp * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Corp * Northwest Airlines Inc Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Corp * Northwest Airlines Corp * Northwest Airlines Corp * NWA Trust * NWA Trust * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc Northwest Airlines Inc * Northwest Airlines Corp * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Corp * Northwest Airlines Inc * Northwest Airlines Inc Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc * Northwest Airlines Inc DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 11 DISTRESSED COMPANY ALERT Category: Default Saks Incorporated
750 Lakeshore Parkway Birmingham, AL 35211 (205) 940-4000 Officers: R. Brad Martin - Chairman of the Board & CEO Stephen I. Sadove - Vice Chairman fo the Board & COO James A. Coggin - President & CAO Securities: Ticker: SKS Exchange: NYSE 2% Convertible Senior Notes due 2024; $230,000,000 Common Stock; 142,604,590 shares outstanding as of 4/13/2004 * See next page for additional securities ... Federal Tax ID: 620331040 SIC: 5311 Department Stores Employees: 52,000 Company Website: www.saksincorporated.com Auditor: PricewaterhouseCoopers LLP Business: Saks Incorporated, through its subsidiaries, operates traditional and luxury departmental stores. The Company operates through two segments, Saks Department Store Group and Saks Fifth Avenue Enterprises. Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 1/31/2004 $966.41 $1,125.64 $2,332.70 $2,043.16 $4,654.87 2/1/2003 $794.69 $1,327.38 $2,312.09 $1,918.53 $4,579.36 Income Statement: ($millions, except per share data)
Period Revenue Net Income Earnings Per Share 1/31/2004 12 months ending $6,055.06 $82.83 $0.59 2/1/2003 12 months ending $5,911.12 $24.24 $0.17 2/2/2002 12 months ending $6,070.57 $0.32 $0.00 Event: In Form 8-K filed on June 15, 2005, Saks Incorporated disclosed that it has received a notice of default with respect to its $230 million 2% convertible senior notes due 2024. The notice of default states that the Company breached covenants in the indenture. Source: Form 8-K, 6/15/2005 Profile Number: 126-815 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 12 06/17/2005 DISTRESSED COMPANY ALERT Category: Default Saks Incorporated
750 Lakeshore Parkway Birmingham, AL 35211 (205) 940-4000 Securities: Ticker: SKS Issuer Saks Inc Saks Inc Saks Inc Saks Inc Saks Inc Saks Inc Saks Inc Federal Tax ID: 620331040 SIC: 5311 Department Stores Exchange: NYSE (* All securities below were downgraded on 6/15/2005) Am't. Outs. 208.11 200.00 250.00 238.77 141.56 230.00 230.00 Security description 7% Senior Notes due 2013 7.375% Senior Notes due 2019 7.5% Senior Notes due 2010 8.25% Senior Notes due 2008 9.875% Senior Notes due 2011 2% Convertible Notes due 2024 2% Convertible Notes due 2024 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 13 06/17/2005 DISTRESSED COMPANY ALERT Category: Default Salton, Inc.
1955 Field Court Lake Forest, IL 60045 (847) 803-4600 Officers: David C. Sabin - Chairman of the Board William B. Rue - President & COO Leonhard Dreimann - CEO Securities: Ticker: SFP Exchange: NYSE 10 3/4% Senior Subordinated Notes due 2005; $125,000,000 12 1/4% Senior Subordinated Notes due 2008; $150,000,000 Common Stock; 11,371,197 shares outstanding as of 9/10/2004 Federal Tax ID: 363777824 SIC: 3639 Household Appliances, Not Elsewhere Classified Employees: 2,600 Company Website: www.saltoninc.com Auditor: Deloitte & Touche LLP Business: Salton, Inc. designs and markets a broad range of kitchen and home appliances, personal and beauty care products, and decorative quartz wall and alarm clocks. The Company's products are sold under the Salton, Breadman, Juiceman, Toastmaster, Salton Time, White-Westinghouse, Farberware and other names. Salton also designs and markets a broad range of tabletop products. Balance Sheet: ($millions)
Total Current Liabilities Total Long Term Debt Total Liabilities Total Current Assets Total Assets 7/3/2004 $255.77 $100.76 $657.46 $561.87 $854.55 6/28/2003 $156.07 $0.87 $543.51 $509.56 $812.37 Income Statement: ($millions, except per share data)
Period Revenue Net Income Earnings Per Share 7/3/2004 12 months ending $1,076.74 ($95.17) ($8.45) 6/28/2003 12 months ending $894.91 $7.97 $0.53 6/29/2002 12 months ending $922.48 $30.15 $2.00 Event: In Form 8-K filed on June 15, 2005, Salton, Inc. announced that it will not make the interest payment of approximately $6.7 million due on June 15th under its outstanding 10 3/4% senior subordinated notes. The Company believes it is prudent to utilize the 30-day grace period, provided in the indenture governing the notes, while it continues to pursue various strategic options to refinance. Source: Form 8-K, 6/15/2005 Profile Number: 126-500 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 14 06/17/2005 DISTRESSED COMPANY ALERT Category: Low Rating Schefenacker AG
Echenerstrasse 2 73730 Esslingen Germany 49 711 31 540 Officers: Bodo Heise - Chairman of the (Management) Board Alfred R. Schefenacker - Chairman of the (Supervisory) Board Rolf Ritter - COO Securities: 9 1/2% Senior Subordinated Notes due 2014; 200,000,000 SIC: 3714 Motor Vehicle Parts & Accessories Employees: 6,079 Company Website: www.schefenacker.com Auditor: Ernst & Young AG Business: Schefenacker AG manufactures rear vision systems, rear and interior lighting and automotive sound systems. Balance Sheet: (millions)
Total Debt Total Assets 12/31/2004 335.60 718.80 12/31/2003 320.10 783.80 12/31/2002 377.10 835.40 Income Statement: (millions, except per share data)
Period Revenue Net Income 12/31/2004 12 months ending 952.00 (181.90) 12/31/2003 12 months ending 978.50 (21.20) 12/31/2002 12 months ending 998.20 (147.10) Event: Standard & Poor's Ratings Services has lowered the rating on Schefenacker AG's 200 million senior subordinated bonds, to CCC from CCC+. According to S&P analyst Maria Bissinger, "These actions reflect Standard & Poor's view that Schefenacker's very aggressive leverage increases the Company's vulnerability to negative surprises in the challenging industry environment for automotive suppliers." Source: S&P Profile Number: 126-813 DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 15 06/17/2005 DISTRESSED COMPANY ALERT Alert Categories:
The goal of The Distressed Company Alert Newsletter is to alert subscribers of significant recent events reported by U.S. Public Companies indicating possible distress. The Categories Triggering an Alert: Default: A missed interest or principal payment on a debt obligation. Covenant Violation: A violation of a covenant in an agreement or indenture governing a debt obligation. Audit Concern: A qualification as to the Company's ability to continue as a going concern is reported by its independent accountants in an annual report. Low Rating: A major ratings agency has downgraded a Company's publicly traded debt to below a "B" rating, indicating vulnerability to default. Debt at Significant Discount: The Company's public debt trades with a current yield or yield-to-maturity in excess of eight points over long-term Treasury bond rate. Preferred Dividend Omission: The Company omits a dividend on its preferred stock. Miscellaneous The editors determine a recent event that represents distress or challenges the future prospects of the Company. DISCLAIMER: Company Profiles in the Distressed Company Alert are selected by the editors because, in their opinion, the occurrence of such an event or the existence of such a circumstance is a likely indicator of current or prospective financial or operating difficulty. The inclusion of a profile suggests the possibility of financial distress or the possibility that the Company may be of interest to workout professionals for some other reason. Inclusions do not represent analysis of the condition of the Company or a definitive determination that the Company is in difficulty. ACCURACY & COVERAGE: The information presented has been obtained from sources believed to be reliable, but accuracy cannot be guaranteed. Do not rely on the Distressed Company Alert without independent verification. Distressed Company Alert is published weekly by New Generation Research, Inc., Suite 801, 225 Friend St., Boston, MA 02114. Publisher: George Putnam, III. Editor/Data Management: Christopher Stuttard. Editor/Analyst Kerry Mastroianni Subscription Rate: $300.00 for six months or $500.00 per year. For more information, visit www.distressedcompanyalert.com. Other Publications from New Generation Research, Inc. include Bankruptcy Week--a weekly companion newsletter for BankruptcyData.com; The Bankruptcy DataSource--a monthly tracking service for major bankruptcies; The Bankruptcy Yearbook and Almanac--an annual compendium of bankruptcy information. For more information on these publications consult the Internet site www.BankruptcyData.com or call (800) 468-3810. DISTRESSED COMPANY ALERT - Volume 3, No. 24, Page 16 06/17/2005