Countrywide Cancels Ski Getaway and News of Other Financially Challenged U.S. Companies for Feb. 27

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.

Ameristar Casinos Inc., Las Vegas, Nev., called off its plans to expand its operations in Kansas City, Mo., because of competition from other casinos. American Casinos said that it recorded an impairment charge in the fourth quarter of $4.5 million related to the Kansas City plan, which would have cost at least $100 million.

Charles & Colvard, a Morrsiville, N.C. maker of diamond-like gems that it sells to jewelry manufacturers, reported a fourth quarter net loss of $1.1 million. Revenue declined 35%–to $7.9 million. For the year, the firm lost $20,000 on a 32% drop in revenue–to $27.8 million.

Cobra Electronics Corp., Chicago, Ill., reported a fourth quarter net loss of more than $3.8 million. Revenue declined 15%–to $45.4 million. For the year, it lost $4.6 million, while revenue edged up 1.5%–to $156 million.

Countrywide Financial Corp., Calabasas, Calif., wanting to cut back on company extravaganzas amid its subprime-mortgage woes, will cancel a luxurious winter ski getaway. The firm was to have hosted guests at a resort in Colorado where hotel rooms start at $725 a night, but the company said that as a result of its subprime problems it will now call off all gala events with its business partners for the rest of this year. Countrywide, which has laid off more than 11,000 workers since last summer, reported a fourth quarter loss of $422 million, including more than $920 million in set-asides for credit losses and an $831 million impairment charge.

Friedman, Billings, Ramsey Group Inc., an Arlington, Va. real-estate investment trust, reported a net loss in its fourth quarter of $270 million, including $40 million in writedowns and other losses related to subprime loans at its First NLC Financial Services LLC mortgage-origination unit.  Friedman’s revenue in the quarter was $19 million, down sharply from $340 million in the year-earlier period.  First NLC, Boca Raton, Fl., recently filed Chapter 11 as part of a plan to liquidate its assets.

Hallmark/Westland Meat Packing Co. could be shut down for good, according to the firm’s general manager, following revelations that the company was cruelly prodding sick and injured cows.  Besides the animal cruelty issue, using the so-called downer cows, which could hardly stand up, for slaughter risks mad-cow disease. Hallmark/Westland, with operations in California, had been reporting profits thanks to a school-lunch contract with the U.S. Department of Agriculture, but now the firm is running low on cash. Last year Hallmark/Westland had sales of about $100 million.

Huntsman Corp.’s net income plummeted 97% in the fourth quarter–to $2.2 million, including $142 million in pretax losses stemming from divestitures and a special gain of $30.2 million. Not including extra items, Huntsman’s operating earnings were flat. Revenue increased 17%–to $2.5 billion. The company also saw a 71% drop in earnings at its pigments business, which has been pressured by the downturn in the homebuilding market. For the year, the big chemicals maker lost $172 million, including charges of almost $210 million. Revenue increased 11% last year–to more than $9.6 billion. Last summer, Huntsman, Salt Lake City, agreed to be purchased by Hexion Specialty Chemicals, a business controlled by Apollo Management LP, for $6.5 billion.

Kimball Hill Inc., a financially-troubled Illinois homebuilder which is said to be facing a possible bankruptcy filing, amended certain agreements so that it can regain compliance with loan covenants that allow it to increase its indebtedness from 35% to 45% of net worth. A month ago, Kimball’s auditor expressed doubt about its ability to continue as a going concern. As of last fall, Kimball, with sales in fiscal 2006 of $1 billion, was sagging under more than $560 million in debt.

LCC International Inc., as expected, delayed filing its financial results and as a result put itself in danger of being delisted by the Nasdaq Stock Market.

PGT Inc., a North Venice, Fla. maker of windows, reported a fourth quarter net loss of $4 million. Revenue declined 20%–to $54.3 million. For the year, PGT had net income of $620,000 on a 25% drop in revenue–to $278 million. The quarter and year included restructuring and impairment charges of nearly $1.7 million and $2.5 million respectively.

Sears Holdings Corp., which is trying to reorganize to boost sales, announced that two more executives have departed amid a management reshuffle. The Hoffman Estates, Ill.-based department-store operator said that the top dogs of its Kenmore appliance unit and its Craftsman tool business have stepped down. Both had been with Sears for more than thirty years. Sears earlier announced a plan to divvy itself up into several more-autonomous units.

Standard Register Co., Dayton, Ohio, reported a fourth quarter net loss of $4 million. Revenue declined 4%–to $219 million. For the year, the firm lost $7.3 million on a 3% drop in revenue–to $865 million. The quarter and year included restructuring and impairment charges of $490,000 and more than $7.5 million respectively.