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Koala Corp. recovering after major restructuring: leaner company plans to 'get back to basics' and refocus its efforts.(RESTRUCTURING)

Aquatics International

| April 01, 2006 | Yu, Rin-rin | COPYRIGHT 2006 Hanley-Wood, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

After repeated downsizing, corporate restructuring and selling of product lines that sparked rumors and left questions about the company's future, Koala Corp. is taking steps toward recovery.

Less than two years ago, the company looked to be in trouble. That's when it shocked many insiders by divesting its $15.6 million Koala Kare Products, which included its signature Koala Baby Kare baby-changing table. By 2005, Koala had liquidated all its acquisitions except SCS Interactive, its wet play group.

It was a long fall from its early heady days of acquisitions. In the late 1990s and early 2000s, the firm obtained Activities Unltd., Smart Products Inc., Delta Play, Park Structures, Superior Foam, SCS Interactive and Fibar Systems.

In 1999, its revenues jumped 94 percent and net income grew 64 percent from the previous year. Forbes magazine listed Koala in its annual 200 Best Small Companies for the fifth consecutive year. But diluted earnings per share grew only 30 percent, and cash flow underperformed net income. Short-term debt increased to $31 million by 2000.

After the millennium, sales continued to grow, but earnings per share declined by ...

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