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Sunbeam Products, Inc.: The Rise and Fall

Outline. Overview of the CompanyFraudulent Earnings PracticesPenaltiesStock EffectsAfter Effects. Company Overview. International company with headquarters Boca Raton, FLOffices in U.S., Canada, Mexico, Venezuela, and Hong KongManufacturing Facilities in U.S., Mexico, and Venezuela3,000 Employees worldwide.

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Sunbeam Products, Inc.: The Rise and Fall

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    1. Sunbeam Products, Inc.: The Rise and Fall Jacqueline Clauss Amy Kirby Crystal Skov Philip Michelson

    2. Outline Overview of the Company Fraudulent Earnings Practices Penalties Stock Effects After Effects

    3. Company Overview International company with headquarters Boca Raton, FL Offices in U.S., Canada, Mexico, Venezuela, and Hong Kong Manufacturing Facilities in U.S., Mexico, and Venezuela 3,000 Employees worldwide

    4. Company Overview Today, Sunbeam Products Inc. is a leading global consumer products company that designs, manufactures, and markets a diverse portfolio of consumer products such as Sunbeam, Oster, and Mr. Coffee. Sunbeam® Appliances/Products, Sunbeam® Warming Blankets, Oster® Appliances, Oster® Professional Clippers, Health o meter® products, Sunbeam® Breadmakers, Mr. Coffee® products, Sunbeam® Grills

    5. Historical Timeline 1897- Company founded as Chicago Flexible Shaft Company 1910- First Home appliance, an iron, is introduced to its product line 1960- Acquires the John Oster Manufacturing Co., beginning a string of acquisitions that included with its purchase of Coleman, Signature USA and First Alert in 1988   1996- Al Dunlap named CEO of the company. The former Scott Paper CEO earned its nickname “Chairman Al” for cutting staff and firing executives. 1998- Dunlap fired by board. Company later reinstates financial results for 1996 and 1997.   Feb. 6, 2001- Files for Chapter 11 bankruptcy protections; Says it will privately held company owned by its bank.   Sunbeam files Chapter 11, Appliance maker says it needs relief from burden of debt, shareholder suits, money.cnn.com/2001/02/06/news/sunbeam/index.html#

    6. Fraudulent Earnings Practices People Involved Facts Fraudulent Techniques Cookie jar revenues Recording revenue on contingent sales Channel Stuffing Improper bill and hold transactions

    7. Auditor Involvement Arthur Anderson Partner, Phillip Harlow authorized unqualified audit opinions on Sunbeam Products, Inc. for 1996 and 1997 financial statements.

    8. Other Wrongdoings Deleted corporate records Misrepresented company’s performance Form 10-Q 1st Quarter 1998 Press releases Communication with analysts

    9. Discovery of Fraud Press release of negative statements about company’s sale practices Board of Directors then began an internal investigation As a result, management was terminated Restatement of financial statements, 1996 - 1998 After restatement, Sunbeam reported net losses of $533M for two quarters - Bryan-Low and Jeff OPdyke

    10. Penalties

    11. Stock Effects 1997

    12. Stock Effects 1998

    13. After Effects In January 2001 Wall Street suspended trading of Sunbeam On February 6th, 2001 Sunbeam filed bankruptcy Emerged from bankruptcy as a subsidiary of American Household, Inc.

    14. Questions ?

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