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 25 percent. In 2002, Koala underwent management and operations restructuring. In 2003, it introduced the KoalaPlay Group Division as a family-friendly play attraction designer and developer, while still selling off properties.

Koala?s restructuring continued when Bryan Merritt came on board as president in 2005. The company had already cut its staff from 200 to approximately 50, through liquidations of acquired companies. SCS is the only remaining company at Koala.

Merritt, who has experience in turning around manufacturing firms, said he wants to ?get back to basics.?

?[Management was] attempting to move everything into a centralized structure,? he added. ?We?ll be keeping an independent structure.?

While Koala?s recovery is not yet complete, the company remains healthy, said Steven Wagner, sales and marketing vice president. ?We?re not interested in selling,? he said. ?It?s a growing industry, and an opportunity for the company to stay in business and grow like crazy.?