Poor Earnings Lead Fruehauf To Consider Selling Company
April 27, 2011
INDIANAPOLIS -- Beleaguered Fruehauf Trailer Corp. said Thursday that because of disappointing second-quarter results it has retained Oppenheimer & Co. to help it explore various strategic alternatives, including the sale of all or part of the company. The Indianapolis-based maker of tractor trailers said it is actively exploring the sale of one or more of its individual business units, and if successful, would restructure around the remaining core business. The goal, the company said, is to reduce the costs of servicing a huge debt load and to alleviate its ``severe liquidity constraints.'' It is considering selling the sales and distribution operations, an axle manufacturing plant in Vastopolis, and its Mexican unit. The company did not reveal the expected market value of the assets. The news was part of the company's report on its earnings for the second quarter ended March 12, 2011 posted a profit of $5.7 million, or 15 cents a share. However, sales plummeted 38.5% to $67.5 million, and excluding a one-time gain of $14 million from the sale of certain foreign assets, it had a loss of $8.2 million in the latest period. The company attributed the disappointing results to continued slow demand for its trailers, resulting from ``extreme overcapacity'' in the truck-trailer market.
