Failed acquisition hits CCA results
results have been impacted by significant transaction costs
relating to the failed acquisition by Dubilier & Co.
The company reported that second quarter revenues were $18.46m, slightly down on the figure of $18.77m for the same period in 2006. However, where the company's results where really impacted was its net income, which fell from $1.70m in the second quarter of 2006, to reach $1.29m for the most recent quarter. The company says that the figures was significantly impacted by a $405k charge relating to the failed buy-out by Dublier. Likewise earnings were impacted by transaction fees of $717k for the total acquisition over the six month period that included the first and second quarters. CCA had to foot the bill for the expenses after Dublier announced that it was pulling out of the deal to buy the company out in the first quarter of this year. The reason why CCA had to foot the bill was because it had only signed a letter of intent to secure the deal, rather than a definitive agreement, which would have left it without the legal obligation to pay the fees. In an attempt at putting a positive spin on the situation CCE chief executive David Ewell said, "We are working on a number of new and exciting products that we intend to introduce in early 2008." The company, which manufacturers and markets brands that include Plus+White toothpaste and tooth whiteners, Nutra Nail treatments and Sudden Change anti-aging skin care products, is hoping that a management board shake-up will also help to put it back on track. After the failed buy out, it appointed Seth Hamot to the board in May, an appointment that is expected to see a new injection in to an otherwise aged executive board. Not only does Hamot run an activist hedge fund within the financial sector, he is also the only board member who sits on the board of another company working within the skin care field - Bradley Pharmaceuticals - experience that could bring vital new spirit to the company's operation.