#6. NOXELL CORP.
11050 York Rd. Hunt Valley, Md. 21030 REVENUE: $384.9 million PROFITS: $32.4 million EARNINGS PER SHARE: $1.63 DIVIDEND: 50 cents ASSETS: $200.2 million STOCKHOLDERS' EQUITY: $153.6 million RETURN ON EQUITY: 21 percent EXCHANGE: OTC EMPLOYES: 1,700 TOP EXECUTIVES: George L. Bunting Jr., president and chief executive officer; G. Lloyd Bunting, chairman. FOUNDED: 1917
DESCRIPTION: Noxell is a major competitor in the cosmetic and skin-care consumer products markets. The company's key business is the development, manufacture and marketing of packaged consumer items including cosmetics, toiletries and household products.
DEVELOPMENTS: The company's major product lines, Noxzema Skin Cream and Cover Girl cosmetics, recorded strong gains over the previous year. Revenue from skin-cream sales exceeded projections, largely because of consumer acceptance of a new pump dispenser for the product. The Cover Girl line of cosmetics was helped by increased demand for new face and eye makeup products.
Revenue for the fiscal year ended Dec. 31 rose 9 percent, and net income for the year was up 14 percent.
The company's international business, after a slow start in 1985, gained momentum during the year as the dollar weakened and prices for U.S. products became more competitive.
In January, the company's board of directors approved a 2-for-1 split of common stock for shareholders of record March 18. #8. EASTMET CORP.
P.O. Box 507 Cockeysville, Md. 21030 REVENUE: $165.7 million LOSS: $14.5 million LOSS PER SHARE: $2.88 DIVIDEND: None ASSETS: $127.8 million STOCKHOLDERS' EQUITY: $19.3 million RETURN ON EQUITY: NA EXCHANGE: OTC EMPLOYES: 1,100 TOP EXECUTIVE: William F. Dausch, president and chief executive officer. FOUNDED: 1972
DESCRIPTION: Eastmet was spun off from Easco Corp. in 1972. Its major business unit is Eastern Stainless Steel Co., which manufactures and markets flat-rolled stainless-steel products. The company's Industrial Products Group produces engineered and fabricated metal products, as well as cast metal and molded plastic components.
DEVELOPMENTS: 1985 was another year of travails for Eastmet, which has been struggling for years as a result of high production costs and the soft demand for American steel.
The company continued to sustain massive losses throughout the year, deciding in December to curtail production of stainless-steel sheet in order to concentrate on stainless plate. The company laid off 450 employes as a result of the move and took a $40 million write-down.
Then, just a little more than two weeks later, Eastmet filed for bankruptcy after it failed to negotiate a new line of credit with its lenders. Under Chapter 11 of the federal bankruptcy code, the company will continue to operate while it negotiates a new line of reorganization with its creditors. (All figures reported above are for the nine months ended Sept. 30, 1985. The company has not yet reported final-quarter figures, and has asked the SEC for an extension because of the bankruptcy.)
Company President William F. Dausch has said the company can return to profitability in its slimmed-down status and that the bankruptcy filing should give Eastmet some "breathing room." Help -- or perhaps trouble -- may be on the way in the added interest of Richard E. Gray, a New York investor who has bought a 5 percent stake in the company.
Gray was given a seat on the board of directors in February after he agreed to drop a lawsuit against Eastmet stemming from his proposal -- which fell through -- to buy the company's Industrial Products Group. Dausch said that Gray will help the company develop a financial restructuring plan, and Gray said he is interested in assisting. Gray acknowledged, however, that a takeover attempt is possible. #7. EASCO CORP.
201 N. Charles St. Baltimore, Md. 21201 REVENUE: $313.3 million LOSS: $53.8 million LOSS PER SHARE: $7.47 DIVIDEND: 11 cents ASSETS: $166.8 million STOCKHOLDERS' EQUITY: $52.9 million RETURN ON EQUITY: NA EXCHANGE: NYSE EMPLOYES: 5,086 TOP EXECUTIVES: Thomas M. Brandt, vice president-controller; Burgess H. Hildreth, vice president-administration and secretary. FOUNDED: 1919
DESCRIPTION: Easco is divided into three operating divisions: industrial products, hand tools and extruded aluminum products. The tools, parts and products of the company are manufactured for a variety of uses, including commercial and residential construction, recreational vehicles and truck bodies, appliances, electrical and electronics equipment and health-care products. It also supplies hand tools to Sears, Roebuck & Co. and the National Automotive Parts Association (NAPA).
DEVELOPMENTS: Easco, in a period of transition, saw revenue decline 8 percent in the fiscal year ended Dec. 31. The net loss for the year, largely attributed to a write-down of assets based on projected liquidation values, increased fivefold. The operating loss for the fiscal year, excluding the one-time write-down for discontinued operations, is reported in the range of $4 million.
In May last year, Steven M. Rales and Mitchell P. Rales, sole partners in a Washington-based holding company called Equity Group Holdings Inc., acquired 51 percent of Easco's outstanding stock and assumed management control. Following the acquisition, Easco's two top executives resigned, and the Rales brothers developed a plan to liquidate the industrial-products and hand-tool divisions of Easco.
About $50 million of the reported loss for last year is related to the charge for discontinued operation of the divisions being liquidated.
Company officials say that a buyer has been found for the industrial-products division, but the hand-tool division remains "on the block." The hand-tool division produces wrenches and similar products and, since 1937, has been the primary supplier of Craftsman-brand tools to Sears. The division is also the sole supplier of hand tools to NAPA under an agreement entered in 1983. #9. MERRY-GO-ROUND ENTERPRISES INC.
1220 East Joppa Rd. Towson, Md. 21204 REVENUE: $164.1 million PROFITS: $7.3 million EARNINGS PER SHARE: $1.15 DIVIDEND: None ASSETS: $58.6 million STOCKHOLDERS' EQUITY: $35 million RETURN ON EQUITY: 23.3 percent EXCHANGE: OTC EMPLOYES: 3,300 TOP EXECUTIVES: Michael D. Sullivan, president and chief executive officer; Isaac Kaufman, senior vice president, chief financial officer, secretary and treasurer. FOUNDED: 1970
DESCRIPTION: Merry-Go-Round Enterprises is a major national specialty retailer of contemporary fashions for young men and women. The company's merchandise is designed to appeal to a broad base of consumers ranging in age from 7 to 40. Store concepts developed by the firm include Merry-Go-Round outlets for women, Merry-Go-Round Jr. for children, DJ's for young men, Cignal and Ship n' Shore Showcase Shops for "upscale" women's fashions.
DEVELOPMENTS: A modest 4 percent rise in revenue, coupled with development costs related to expansion and new merchandising concepts, resulted in a 26 percent drop in Merry-Go-Round's net income for the fiscal year ended Jan. 31. The company exceeded its expansion targets for 1985, opening 63 stores -- three more than projected at the start of the year. The new openings included 10 Cignal stores, which feature higher quality brand-name fashions, and 10 Merry-Go-Round Jr. stores, offering clothes for children between the ages of 4 and 14.
A prototype for future Merry-Go-Round stores also has been developed in recent months and will be used for all new stores, featuring the company's main line of merchandise. The company has abandoned the dark, "disco dance floor" motive that has characterized its stores in the past and adopted a brighter, high-technology decor.
Merry-Go-Round, which now has stores in 31 states, plans to add between 60 and 70 new outlets to its system during the current fiscal year. #10. LUSKIN'S INC.
7540 Washington Blvd. Baltimore, Md. 21227 REVENUE: $110 million PROFITS: $4.3 million EARNINGS PER SHARE: 92 cents DIVIDEND: None ASSETS: $47.1 million STOCKHOLDERS' EQUITY: $18.8 million RETURN ON EQUITY: 38 percent EXCHANGE: OTC EMPLOYES: 854 TOP EXECUTIVES: Jack Luskin, chairman and chief executive officer; Cary Luskin, president and chief operating officer. FOUNDED: 1948
DESCRIPTION: Luskin's is a specialty retailer of home-entertainment and consumer-electronic products. It also sells major household appliances. It operates a total of 51 stores -- under the name of Luskin's in the Washington and Baltimore area, Tokyo Shapiro in Connnecticut and Ohio and Hi-Fi Buys, Buyys and the Sound Room in Indiana, Michigan and Kentucky.
DEVELOPMENTS: The 38-year-old chain sold stock to the public for the first time last year, issuing 1,350,000 shares at an initial offering price of $14.50. The current trading price has since dropped to about $10.25 a share. Although 80 percent of the proceeds from the stock sale -- or $15.3 million -- went to the Luskin family, about $4 million went to the chain for expansion at a time when the whole specialty consumer-electronic retail business is booming.
As a result, Luskin's grew from 29 stores to 42 in one year. Additionally, as a result of a $1.2 million acquisition of the Indianapolis chain Sound & Sight Inc. (which trades under the names of Hi-Fi Buys, Buyys and the Sound Room), the chain now includes a total of 51 stores.
The acquisition followed Luskin's pattern of acquiring small, financially troubled chains as a way to gain a foothold in new territory. Luskin's is negotiating with another troubled chain -- Oldt-Waring in Tampa, Fla., which has 12 stores. Even without the acquisition, Luskin's plans to expand by about another 10 stores this year.
Meanwhile, Luskin's ended a four-year battle with the Maryland attorney general's office last year when it agreed to pay $290,000 to settle a suit that had charged the company with false advertising practices.
The state's attorney general had accused Luskin's with trying to attract customers to its stores by advertising brand-name products that were not available for sale. Customers then were pressured by Luskin's salesmen to buy something else instead, the state charged. The state also accused Luskin's of failing to repair defective products and of selling "new items" that had been damaged and repaired without telling consumers it had done so. Luskin's has denied the charges. In its settlement, Luskin's agreed to make changes in its advertising and sales practices. Additionally, $250,000 of the settlement will be used to set up a Consumer Protection Education Fund within the attorney general's consumer protection division.