Palm Harbor spokesperson Colleen Rogers confirmed the company is looking for a “well-backed financial partner” and that more information will be in a second filing due November 16 as required by law.
According to the filing, the company is also reviewing and preparing for available alternatives, including debtor-in-possession financing, a possible sale of assets and a proceeding under Chapter 11 of the U.S. Bankruptcy Code to facilitate such a transaction. The filing also indicated the company is in default under its floor plan financing facility with Textron Financial Corporation. In the filing, Palm Harbor says the company has been in daily discussion with Textron about obtaining a waiver of the defaults. Those discussions are ongoing and the Company expects some resolution of the matter by the date of filing of the Form 10-Q.
Form 10-Q is a quarterly report pursuant to the Securities Exchange Act of 1934.
Palm Harbor notes its staff and resources have been substantially committed to this effort, which has had a direct impact on the ability to complete its Quarterly Report on Form 10-Q and on the ability of its independent registered public accounting firm to complete its review. For these reasons, the company reported it was unable to file its Quarterly Report on Form 10-Q within the prescribed period without unreasonable effort or expense, but expects to make such filing within five calendar days of the due date, as required for the extension provided by Rule 12-25. That date is November 16.
Last month Palm Harbor Homes postponed its annual meeting of shareholders from October 11 to November 1 to provide more time to solicit additional votes for a proposal that allows the amendment and restatement of the Second Amended and Restated Articles of Incorporation, increasing the number of authorized shares of common stock to 100,000,000 from 50,000,000, and the number of authorized shares of preferred stock to 25,000,000 from 2,000,000. Palm Harbor then reported the additional shares of common stock that the company was asking shareholders to authorize would be available for the purpose of raising much needed additional equity, or for use as consideration in transactions involving third parties or its bondholders.
On its web site, Palm Harbor reports net sales for the second quarter of fiscal 2010 totaled $74.8 million compared with $110.7 million in the year-earlier period. Palm Harbor reported an operating loss of $6.6 million for the second quarter compared with an operating loss of $4.4 million in the same period last year. Net loss for the second quarter of 2010 totaled $10.4 million, or 45 cents per share, compared with a net loss of $7.8 million, or 37 cents per share, a year ago.
On November 11, Zack’s Investment Research reported that shares of Palm Harbor Homes traded at a new 52-week low of $0.64. Approximately 653,000 shares have traded hands November 10 vs. average 30-day volume of 27,000 shares. Palm Harbor Homes closed at $0.68, approximately 52.2 percent below its 50-day moving average of $1.42. Palm Harbor Homes is down some 71 percent for the year.
Based in Dallas, Texas, Palm Harbor Homes, Inc. is one of the nation’s largest marketers of factory-built homes. The company is vertically integrated including manufacturing, retailing, financing and insuring and focuses on the high-end, customized niche of the market. Four of five homes produced in its nine manufacturing facilities from Oregon to Florida are customized with owner-selected features. These homes are sold through its 86 Company-owned superstores and more than 150 independent retailers. Standard Casualty is the company’s insurance subsidiary, Nationwide Custom Homes, its modular subsidiary, and CountryPlace Mortgage is its finance subsidiary. # #
