Two
years after emerging from bankruptcy, Sunbeam-Oster completed
its first public offering of common stock. Under Japonica Partners'
hands on management, the company's stockholders, employees, vendors,
and customers all shared in the success. Following the $250 million
global IPO, the company's stock rose dramatically, when its first
fiscal year-end results were announced. Public shareholders saw
an annualized stock price increase of 140% due to Japonica's management,
and the Fortune 356 company's rejuvenation became the subject
of a Harvard Business School case study.
A major marketing objective of the
stock offering was to change the external expectations of the
company to that of a global consumer products company rather than
a limited growth and cyclical appliance company. The proven track
record of nine (9) consistent and predictable quarters of growth
in both sales and profit demonstrated the merit of a higher price/earnings
multiple associated with world class consumer products companies.
Under Japonica's hands on management,
several strategic acquisitions were completed on an exclusive
basis, including Griffo Grill Accessories, Sunshine Products (wrought
iron furniture), ARKLA Grills, Charmglow Grills, and Keller Outdoor
Furniture, which was negotiated with Gene Clayton of Clayton,
Dubilier & Rice, Inc..
To accomplish the turnaround after
three years of declining sales, Japonica changed Sunbeam-Oster's
corporate culture into a winning entrepreneurial culture. Sales
grew over $200 million, or 24%, in three years, despite a harsh
economic environment. During the same period, operating profits
surged by $250 million, from a loss of $95 million to an operating
profit of $155 million. The new culture was built upon an easily
conveyed strategy of the "Five Keys to Success." The company's
ROIC was twice its top-tier benchmark.
Many of the extant employees from
the senior operations and management teams were re-educated with
Japonica's entrepreneurial culture. They were supplemented with
sales, marketing, administrative, and operations entrepreneurs
from Newell, Rubbermaid, Procter & Gamble, and Pepsi-Cola. Employees
shared in the company's success. They saw the equity granted to
them appreciate substantially, creating almost two dozen millionaires.
Other employees received 100% bonuses, and some saw their compensation
triple. Overall employee levels remained at approximately 10,000
during the rejuvenation of the company.
When Japonica sold its interest
in Sunbeam-Oster, the Company was thriving with approximately
$260 million in cash, and eight (8) consecutive quarters of expanded
earnings followed. |
