LYNNWOOD, Wash. -- March 18, 1996 -- Carver
Corporation (NASDAQ:CAVR), today reported the company's downsizing
and sale of its professional audio product line impacted its results
for the fourth quarter and full year in 1995. In the fourth quarter
of 1995, including a total of $1.8 million or $.49 per share in
restructuring charges and write downs, Carver lost $1.1 million or
$.30 per share on sales of $3.8 million compared to net losses of
$495,000 or $.13 per share on sales of $6.2 million in the fourth
quarter a year ago. The company reported 1995 sales of $18.4
million and net losses of $3.2 million or $.86 per share compared to
1994 sales of $22.2 million and net losses of $2.9 million or $.78
per share.
Throughout 1995, Carver s management team worked to resolve its
operating problems. During the year, the company downsized its
operations, reduced overhead, eliminated obsolete inventory and
streamlined its manufacturing processes. Carver sold its
Professional Audio line to Phoenix Gold, Inc. (NASDAQ:PGLD) for
approximately $2 million in November. The transaction was designed
to permit Carver to focus exclusively on its primary business of
consumer audio components and to bring much needed strength to its
balance sheet and cash resources. In addition, Carver listed its
Lynnwood manufacturing facility for sale for $4.5 million in January
1996. The facility is valued on the company's balance sheet at
approximately $2 million.
"The fourth quarter charges address issues raised by a thorough
review of the entire operation of the company, including the sale of
the professional product line," stated Stephen M. Williams,
President and Chief Executive Officer. "Many of the changes Bob
Fulton (Director and former CEO) implemented last year were painful
but necessary to give this company a chance to be competitive in the
audio market. I believe we are now in a position to capitalize on
the popularity of the Carver brand."
The $1.8 million fourth quarter charges include approximately
$1.3 million for the costs associated with downsizing of operations
and the disposal of the professional and automotive product lines, a
$50,000 write-off of tooling for certain discontinued products, a
$260,000 write-off for excess and obsolete raw materials and
finished goods, and an increase in reserves for doubtful accounts of
$150,000.
"Fourth quarter sales were lower due to continued lack of
availability of certain consumer product models. We operated during
most of 1995 with very tight constraints on cash. As a result, we
deferred submitting orders for sourced products and some raw
materials during the second and third quarters. The discontinuation
of professional product sales in mid November also contributed to
lower fourth quarter sales," Williams said. The pro division
contributed $428,000 to fourth quarter and $4.0 million to full-year
1995 sales compared to $1.3 million in the fourth quarter and $5.1
million to 1994 sales. "We believe the new affiliation with Circuit
City, combined with strong consumer loyalty to the Carver brand will
help us replace pro division revenues and generate consumer sales in
1996 that approach our total sales in 1995."
"The rollout of Carver's consumer line in Circuit City's
(NYSE:CC) 390 stores is progressing very well. The enthusiasm we
are seeing from Circuit City's sales people and consumers is very
encouraging," Williams stated. "In addition, the advertising and
consumer awareness Circuit City is generating for Carver components
has resulted in increased traffic for our existing dealers in those
markets where the rollout began."
At year end, current liabilities and inventory levels were cut
in half from year ago levels. "The sale of the professional
division and the restructuring charges clearly helped to strengthen
the balance sheet significantly," Williams noted. "We are
continuing to address liquidity and working capital needs by
exploring credit lines and other financing options. The sale of the
Lynnwood facility, while not imminent, will also improve our capital
position and reduce overhead costs."
Safe Harbor statement under the Private Securities Litigation
Reform Act of 1995: Statements in this news release looking forward
in time involve risks and uncertainties, including the effect of
changing economic conditions, trends in the audio components market,
product demand and market acceptance risks, risks associated with
manufacturing, import and seasonality and other risk factors
detailed in the Company's Securities and Exchange Commission
filings.
Carver Corporation designs, develops, manufactures and markets
high-fidelity consumer audio components and systems which are known
for their superior sound reproduction.
Consolidated Financial Highlights:
(in thousands except per share results)
Three Months Ended Twelve Months Ended
December 31, December 31,
1995 1994 1995 1994
Net sales $ 3,772 $ 6,180 $ 18,428 $
22,171
Gross margin 423(1) 1,341 3,390
4,676
Expenses
Selling 691 1,034 3,441
3,827
General &
Administrative 592(2) 399 1,887 1,780
Research & Development 123 296 808
1,164
Restructuring Charges 1,319(3) -- 1,319
--
Gain on Sale of
Professional
Products Line (1,208) -- (1,208) --
Loss from operations (1,094) (388) (2,857)
(2,095)
Other (income) expense (23) (106) 300
(778)
Loss before taxes (1,071) (494) (3,157)
(2,873)
Net loss $(1,071) $(494) $(3,157)
$(2,873)
Net loss per share $(0.30) $(0.13) $(0.86)
$(0.78)
Weighted common and
common equivalent
shares used for
calculation per share 3,683 3,678 3,680
3,678
(1), (2), (3) Includes charges for (1) Tooling W/O $ 51
Inventory W/O 260
$ 311
(2) Bad Debt $ 178
(3) Tooling $ 287
Inventory 740
Severance 223
Other 69
$ 1,319
Condensed Balance Sheet
(in thousands)
December 31, December 31,
1995 1994
Cash and short-term investments $ 266 $ 254
Net receivables 2,304 3,830
Inventory 3,927 8,050
Other assets 1,886 1,966
Net property, plant and equipment 2,291 2,528
Total assets $ 10,674 $ 16,628
Total liabilities 3,285 6,091
Shareholders equity 7,389 10,537
Total liabilities and equity $ 10,674 $ 16,628
CLEVELAND -- March 18, 1996 -- Cleveland-Cliffs Inc
reported today that McLouth Steel
Products Corporation, an iron ore
customer operating under bankruptcy court protection since September
29, 1995, has begun a shutdown of operations due to inadequate
funds. Discussions with potential buyers for the McLouth assets are
in progress which could lead to a resumption of operations.
Therefore, McLouth plans to maintain its facilities in a "hot-idle"
status. Cliffs had supplied approximately 120,000 tons of pellets
per month to McLouth.
M. Thomas Moore, Cliffs' chairman and chief executive officer,
said, "We have had a long association with McLouth, linked by our
Michigan operations, and have provided periodic vital credit support
in cooperation with other suppliers and labor. However, McLouth's
continuing cash deficits and poor financial outlook made it
imprudent for Cliffs to unilaterally extend significant additional
credit."
In 1995, McLouth accounted for 11 percent of Cliffs' total
revenues. Cliffs expects to maintain its total sales volume in the
current strong iron ore market although a near-term adverse earnings
impact could occur. The Company noted that it periodically makes
significant changes in customer mix and maintains a substantial base
of multi-year contracts.
At the time of McLouth's bankruptcy filing, Cliffs had an
unreserved receivable of $5.0 million, secured by first liens on
certain McLouth fixed assets. A $2.7 million reserve against the
receivable was recorded in September, 1995. Cliffs has provided
certain additional credit since the bankruptcy filing. Unreserved
amounts are secured by liens on McLouth assets. Cliffs has filed
substantial secured and unsecured claims.
Cleveland-Cliffs Inc subsidiaries manage seven iron ore mines in
North America and Australia. The Company has equity interests in
six of the mines, holds a major iron ore reserve position in the
United States, is a substantial iron ore merchant, and is pursuing
development of a direct reduced iron business.
CONTACT: Cleveland-Cliffs Inc
David L. Gardner, 216/694-5407
OAK BROOK, Ill., March 18, - href="chap11.growth.html">Growth Environmental,
Inc. announced that it filed a petition for relief under
Chapter 11
of the Bankruptcy Code on March 7, 1996. The company further
announced that it intends to file a liquidating plan or
reorganization.
As previously reported, the company's operating subsidiaries
filed for relief under Chapter 11 of the Bankruptcy Code on Jan. 23,
1996. The United States Bankruptcy Court for the Northern District
of Illinois approved the company's subsidiaries' motion to sell
substantially all of their assets. At an auction held on Feb. 27,
1996, Growth Resources, Inc. was the successful bidder for the
subsidiaries' assets.
Effective at the close of business on Dec. 11, 1995, the
company's common stock no longer trades on the Nasdaq SmallCap
Market.
CONTACT: Alvin K. Eaton, for Growth Environmental, Inc.
708-990-2751
NEW YORK, NY -- March 18, 1996 -- href="chap11.rcp.html">Rockefeller Center
Properties, Inc. (RCPI) announced today a net loss for the year
ended Dec. 31, 1995 of $195,129,000, or $5.10 per share, as compared
to net income of $15,143,000, or 40 cents per share, for the 1994
fiscal year.
RCPI also reported a net loss for the fourth quarter of 1995 of
$28,755,000, or 75 cents per share, as compared to a net loss of
$1,396,000, or 3 cents per share, for the previous year's comparable
period.
The loss for the year ended Dec. 31, 1995, is a result of the
May 11, 1995, Chapter 11 bankruptcy filings by the Borrower under
RCPI's mortgage loan on most of Rockefeller Center, and subsequent
developments. For accounting purposes RCPI limited recognition of
income on the mortgage loan for the year ended Dec. 31, 1995 to the
cash actually received from the Borrower, which resulted in a
decrease in revenues of $87,815,000, or $2.30 per share, from the
prior year. The results also include increased general and
administrative expenses of $7,097,000, or 19 cents per share,
principally due to increased legal fees, investor relations related
expenses and financial advisory fees incurred as a result of the
Borrower's Chapter 11 filings. In addition, as discussed in RCPI's
Sept. 30, 1995 Form 10-Q, during 1995 RCPI reflected in its
Statement of Operations $99,163,000, or $2.59 per share, of expenses
related to the effects of the execution and delivery of the Merger
Agreement entered into on Nov. 7, 1995 with an investor group led by
Whitehall Street Real Estate Limited Partnership V. In addition,
during the third quarter, RCPI recognized as amortization of
financing cost certain deferred debt issuance and letter of intent
costs totalling $4,650,000, or 12 cents per share, related to the
termination of a Combination Agreement. RCPI also recorded a non-
cash adjustment for the stock appreciation rights issued in December
1994 of $10,795,000, or 28 cents per share.
Under the Merger Agreement, RCPI has been extended a credit
facility which is expected to provide sufficient liquidity for RCPI
until the earlier of the consummation of the merger contemplated by
the Merger Agreement or April 30, 1996. Management and the Board of
Directors believe that, if the RCPI stockholders do not approve the
Merger Agreement or if the transactions contemplated by the Merger
Agreement are not consummated, the Company would be subject to
substantial uncertainties. RCPI expects that, in the absence of
additional financing, its cash resources will be exhausted by the
end of April 1996. Management believes that there is substantial
doubt about RCPI's ability to continue as a going concern if RCPI's
stockholders do not approve the Merger Agreement or if the
transactions contemplated by the Merger Agreement are not
consummated. RCPI's financial statements for the year ended Dec.
31, 1995 do not include any adjustment to reflect the possible
future effects on the recoverability of assets or the amounts of
liabilities that may result from the outcome of these uncertainties.
RCPI also reported that its cash flow from operating and
investing activities was $32,294,000 for 1995 as compared to
$71,529,000 for 1994. Cash flow from investing activities during
1995 consisted of $50 million realized from draw downs of additional
collateral under letters of credit following the Borrower's failure
to make the interest payment due May 31, 1995. These cash receipts
were applied, solely for accounting purposes, to reduce the carrying
value of the mortgage loan.
RCPI is a mortgage real estate investment trust whose principal
asset is a $1.3 billion participating convertible mortgage loan to
the Borrower, the owner of Rockefeller Center. The Borrower is 100
percent controlled by Rockefeller Group Inc. (RGI). Mitsubishi
Estate Co. Ltd. controls an 80 percent equity interest in RGI and
Rockefeller Family Interests hold the remaining 20 percent. On May
11, the Borrower commenced cases under Chapter 11 of the federal
bankruptcy law in the United States Bankruptcy Court for the
Southern District of New York.
RCPI is listed on the New York Stock Exchange as "RCP." As of
March 15, 1996, there were 38,260,704 shares of common stock
outstanding.
Years ended Quarters Ended
Dec. 31 Dec. 31,
1995 1994 1995 1994
Revenues $21,470,000 $109,285,000 $ 128,000
$27,336,000
Interest expense $85,563,000 $ 77,501,000 $21,288,000
$19,325,000
General and
administrative $11,267,000 $ 4,170,000 $ 5,155,000 $
559,000
Amortization of
financing costs $ 9,258,000 $ 705,000 $ 1,142,000 $
176,000
Increase in
liability for
stock appreciation
rights $10,795,000 $ --- $ 745,000 $ ---
Effects of the
execution and
delivery of the
merger agree-
ment $99,163,000 $ --- $ --- $ ---
Expenses related
to the March 25,
1996 special
meeting of
stockholders $ 553,000 $ --- $ 553,000 $ ---
Cost of swap
terminations and
modifications
related to debt
extinguishment $ --- $ 9,855,000 $
--- $6,730,000
Cost of evaluating
alternative
financings $ --- $ 1,942,000 $
--- $1,942,000
(Loss) income
before
non-recurring
income $(195,129,000) $15,112,000 $(28,755,000)
$(1,396,000)
Non-recurring
income (gain
on sales of
portfolio
securities) $ --- $ 31,000 $ --- $ ---
Net (loss)
income $(195,129,000) $15,143,000 $(28,755,000) $
(1,396,000)
Net (loss)
income
per share $ (5.10) $ 0.40 $ (0.75) $
(0.03)
On the same date, the Company terminated the Agreement and Plan
of Combination (the "Combination Agreement") dated as of Sept. 11,
1995 with Equity Office Holdings, L.L.C.
CONTACT: Stephanie Leggett Young, 212/698-1440
Gary Holmes, 212/484-7736