Ill-Timed Expansion: JWP Grew as Recession Loomed --- Firm Vows to Pare Non-Core Business, Trim Debt and Consolidate Operations
A string of problems at JWP Inc. has some analysts wondering if the company, which went on an acquisition spree just as the economy was heading into recession, didn't expand too much too fast.</br></br>In the past few months, the technical services giant has disclosed a chain of announcements that has sent its stock into a dizzying plunge, to a low of $5.75 in August from a high of $19 in January. It currently trades around $6 a share.</br></br>In April, JWP announced a $9.3 million charge to restructure a business; in July, it forecast a sharply lower profit outlook than analysts expected. And it subsequently reported a revised $13.9 million loss for the first quarter and a $48.8 million loss for the second quarter, after internal auditors raised questions about the value of assets in its information services unit; the charges totaled $64.5 million.</br></br>"JWP can't afford any more problems," says John Simon, an analyst at Seidler Amdec Securities Inc. in Los Angeles. The company in a sense agrees. "We tried to do too many things, tried to be good at too many things," says Andrew Dwyer, chairman and chief executive. But he insists "we certainly think all the bad news is behind us," and JWP now will be able to focus on its core business and rebuild earnings.</br></br>JWP acts as a subcontractor and superintendent to companies: it designs, installs and services a variety of electrical and mechanical systems -- from computerized lighting and security systems to plumbing, cooling and heating systems -- for everything from hotels to power plants.