Yesterday, Jacuzzi Brands (NYSE:JJZ) announced second-quarter earnings that were mixed. Not surprisingly, the stock spiraled downward, dropping 9%. Most interesting was the reduction in 2005 earnings: They fell to somewhere between $0.54 and $0.58, down from February guidance of around $0.73. This isn't the kind of news shareholders like to hear.

So what lies ahead for this well-known icon?

We know the following. The day before earnings, the company sold off 70% of its Rexair vacuum cleaner division so it could focus on its bath, spa, and plumbing businesses. While the company retains a 30% interest in Rexair, it receives $170 million in cash, which will be used, in part, to pay down the bond debt of $85 million that currently exists, leaving approximately $60 million to use elsewhere.

Also, in the press release was the statement that the company had hired investment banker Lazard Freres to find ways to create additional value for the shareholders.

This can often mean that management has run out of ways to grow the company and are looking for a buyer. I doubt this is the case or they wouldn't have retained an equity position in Rexair. So what are they up to? More than likely they are seeking an acquisition that would fit one of their existing businesses and allow them to grow market share.

Jacuzzi has a long history of acquisitions and divestitures, many of which didn't make much sense synergistically. But now the company's headed in the right direction -- and like the old Sesame Street skit -- one of these things is not like the others. So, the vacuum cleaners had to go.

Financially, the company has rarely been healthier. It's had five straight quarters of both sales and earnings increases, and long-term debt levels are significantly reduced from five years ago. Pre-tax margins have increased from 1.8% to 2.5% in just the past four years. Lastly, given that it has an average pre-tax return for the past five years in the red, a 2.5% positive return for the first six months in 2005 is certainly reason for celebration among longtime shareholders.

What does this mean for new, prospective shareholders? Plenty if they have the patience to hang in there while the company fixes its British bath and spa division and acquires a new or related company to complement its two existing businesses. Sure, it might not be the screaming growth company that everyone loves to own, but if management continues to implement its current strategy, owners may one day be able to buy their own Jacuzzis with the profits.

For more on Jacuzzi, check out Jacuzzi a Little Too Soggy.

Fool contributor Will Ashworth lives in the Great White North. He does not own stock in Jacuzzi but does welcome your comments.