NEW YORK, March 19, 1996 - ANDOVER
TOGS, INC. (Nasdaq:
ATOG) announced that its Board of Directors has authorized the
filing of a Petition under Chapter 11 of the Federal Bankruptcy
Code. The Petition is being filed today.
On March 5, 1996, the Company announced a fiscal 1995 loss of
$4,279,000. The Company also disclosed that as a result of the
loss, the Company ceased to be in compliance with many of the
financial covenants in its various credit agreements, causing
defaults under those agreements.
During the last two weeks, intensive negotiations have been
conducted on an almost continuous basis among the Company, its
principal stockholders, existing bank lenders and prospective
lenders and investors in an effort to obtain ongoing financing. The
negotiations have not been successful and the Company has been
unable to obtain the financing necessary to enable it to continue
its operations outside of the protection of the Bankruptcy Court.
Accordingly, the Company is today filing a petition seeking
protection under the reorganization provisions of Chapter 11 of the
Federal Bankruptcy Code. The Company is exploring opportunities for
possible debtor in possession financing to enable the Company to
continue operations for a period of time. During that period the
Company may seek purchasers for portions of its business on a going
concern basis and otherwise seek to maximize values. There is no
assurance that these efforts will be successful. In the event that
the Company is unable to obtain debtor in possession financing so as
to enable it to continue operations, the Company will have no choice
other than to liquidate on as orderly a basis as possible.
CONTACT: William L. Cohen, Chief Executive Officer of Andover
Togs, Inc., 212-244-0700
DALLAS, March 19, 1996 - Search
Capital Group, Inc. (OTC
Bulletin Board: SRCG) announced today that Value Partners, Ltd.
purchased approximately $12,798,500 principal amount of certain
creditors' ("Noteholders") secured claims in eight Search
subsidiaries operating under Chapter 11 bankruptcy. Value Partners,
Ltd. is a Texas limited partnership. Its general partner and
manager, Fisher Ewing Partners, is a Dallas based partnership
between Richard W. Fisher and Timothy G. Ewing. Fisher Ewing
Partners has given notice that Value Partners, Ltd. will exchange
these secured claims for Search Equity in the same manner as
provided in the Joint Plan of Reorganization.
The sale of these creditors' secured claims comes only 11 days
after the U.S. Bankruptcy Court Dallas Division confirmed the Joint
Plan of Reorganization. Search Capital itself is not in bankruptcy,
but is a co-proponent of the Joint Plan.
As a result of this sale of claims and their ultimate conversion
to Search stock, Search has achieved its goal of a 100 percent
conversion of over $68 million of non-recourse subsidiaries' debt to
equity. Search estimates that with this transaction, and upon
consummation of the Joint Plan, it will have approximately $36
million in equity and over $14 million in cash.
Under the Joint Plan, creditors could elect one of the two
recovery options, including the Search Equity Option or the
Collateral Option.
After creditors' election of recovery options ended on Feb. 27,
1996, about 80 percent of the creditors elected the Search Equity
Option which requires creditors to exchange their notes in the
bankrupt subsidiaries for a combination of a new class of
convertible preferred stock, plus a cash dividend accumulated from
July 1, 1995, and common stock of Search. The remaining 20 percent
of creditors elected the Collateral Option under which the creditor
would receive cash distributions upon the liquidation of the
collateral which originally secured their Notes (e.g. cash, used-
automobile loan contracts and repossessed vehicles).
This sale of creditors' secured claims relates to those
creditors who had elected the Collateral Option. This sale enables
those creditors who elected the Collateral Option to realize a
higher return than they might have realized through the liquidation
of their collateral. In order to effect the sale of creditors'
claims, the Official Creditors' Committee and Search obtained an
order from the Court allowing for the Joint Plan to be amended to
allow for the sale of the creditors' notes or claims, instead of
liquidating the underlying collateral. The amendment allows Value
Partners to select the Search Equity Option.
"This transaction provides for the immediate cash-out of those
creditors who elected the collateral option, provides Search with
additional equity and cash and consummates our goal of achieving a
100 percent conversion of debt-to-equity. The fact that Value
Partners wanted Search stock represents a strong vote of confidence
in Search's management and our ability to position Search as a
premier player in the sub-prime auto financing industry," said
George C. Evans, chairman and chief executive officer of Search.
Tim Ewing, partner-in-charge of Value Partners, Ltd., commented:
"With the cooperation of the company and the creditors' committee,
we have been able to effect a strategic investment in Search Capital
Group under a critical deadline imposed by the company's Joint Plan
of Reorganization. Value Partners' intent, via its consensual
exchange of secured claims for equity, to buy stock in the company
indicates our confidence in George Evans and the talented executives
he has assembled to rebuild Search. Their great depth of experience
in managing large finance companies is a relevant attribute of our
investment. We expect that Mr. Evans and his team, fortified by
this addition to long term capital, will generate returns
satisfactory to our partners and the other shareholders of Search
capital."
Search Capital Group, Inc. is a specialized financial services
company engaging in the purchase and management of used motor
vehicles receivables. Search shares are currently being traded on
the OTC Bulletin Board (SRCG.OB).
CONTACT: Chris Anderson of Stern Nathan & Perryman, 214-373-1601;
or George C. Evans, chairman, president & CEO of Search Capital
Group, Inc., 214-965-9600
GRAND RAPIDS, Mich., March 19, 1996 - Gantos, Inc.
(Nasdaq: GTOS), today announced its second consecutive year of
profitability, having successfully emerged from its Plan of
Reorganization in March, 1995.
For the fourth quarter ended February 3, 1996, net income was
$3.1 million, or $0.46 per share, (14-week) compared to net income
of $4.4 million, or $1.67 per share, for the 13-week period a year
ago.
Gantos' fiscal 1995 net income increased to $3.7 million, or
$0.55 per share, (53-weeks) compared to $2.6 million, or $.97 per
share, for the 52-week period a year ago. The results were
positively impacted by non-recurring gains of $0.9 million and $2.7
million in fiscal 1995 and 1994, respectively.
The earnings per share computations for all periods reflect the
one- for-two reverse stock split incorporated in the March 1995 Plan
of Reorganization and, beginning March 31, 1995, the subsequent
issuance of approximately 4.6 million new shares as part of the Plan
of Reorganization.
Commenting on the Company's results, Gantos Chief Executive
Officer L. Douglas Gantos said, "In light of the continuing
difficult and highly promotional women's specialty apparel
environment throughout 1995, our accomplishments in expense control,
inventory management, and gross margin disciplines enabled the
Company to move forward profitably. We remain committed to
increasing shareholder value through improved bottom-line
performance."
Mr. Gantos added, "Our turnaround strategy of targeting the
career customer with highly edited fashion assortments at affordable
price points and customer service excellence is intended to elevate
Gantos' identity in a crowded retail marketplace."
Gantos, Inc., is a specialty store retailer of quality women's
apparel and accessories. Headquartered in Grand Rapids, the Company
currently operates 113 stores in 23 states.
GANTOS, INC.
CONDENSED STATEMENTS OF INCOME
(Amounts in thousands, except per share and store data)
Unaudited
Fourth Quarter Ended Fiscal Year Ended
Feb. 03, Jan. 28, Feb. 03, Jan. 28,
1996 1995 1996 1995
Net sales $56,057 $58,153 $192,790 $197,288
Cost of sales (including
buying, distribution and
occupancy costs) (43,093) (45,465) (151,912) (160,434)
Gross income 12,964 12,688 40,878 36,854
Selling, general and
administrative expense (11,003) (11,306) (40,018) (40,114)
Credit for facilities
closings and other 944 1,085 944 1,085
Finance charge and other
revenue 1,294 1,385 4,472 5,020
Operating income 4,199 3,852 6,276 2,845
Interest expense
(contractual interest of
$25,585, $3,707 for 1995
and 1994) (1,057) (31) (2,278) (122)
Income before
reorganization items,
income taxes and
extraordinary item 3,142 3,821 3,998 2,723
Reorganization items:
Professional fees -- (1,305) (530) (3,336)
Interest earned on
accumulating cash
from Chapter 11
proceedings -- 303 251 1,572
Net Reorganization items -- (1,002) (279) (1,764)
Income before income taxes
and extraordinary item 3,142 2,819 3,719 959
(Provision) benefit for
income taxes -- -- -- --
Net income before
extraordinary item 3,142 2,819 3,719 959
Extraordinary item -- 1,628 -- 1,628
Net income $3,142 $4,447 $3,719 $2,587
Per share amounts:
Net income per share
before extraordinary
item $0.41 $1.06 $0.55 $0.36
Extraordinary item --
gain on extinguishment
of debt -- 0.61 -- 0.61
Net income per share $0.41 $1.67 $0.55 $0.97
Weighted average shares
outstanding 7,577 2,665 6,759 2,665
Stores open at end of
period 113 114 113 114
GANTOS, INC.
CONDENSED BALANCE SHEETS
(Amounts in thousands)
Unaudited
Feb. 03, Jan. 28,
1996 1995
ASSETS
Current assets:
Cash and cash equivalents $1,453 $26,545
Accounts receivable (net) 22,619 25,165
Merchandise inventories 23,955 22,544
Prepaid expenses and other 2,851 3,347
Total current assets 50,878 77,601
Property and equipment (net) 17,532 18,382
Total assets $68,410 $95,983
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable-trade $12,119 $ 8,474
Accrued expenses and other 12,716 12,737
Current provision for
facilities closings 2,417 2,610
Total current liabilities 27,252 23,821
Long term debt 12,395 5,192
Long-term provision for
facilities closings --- 2,040
Liabilities subject to compromise --- 59,749
Shareholders' equity 28,763 5,181
Total liabilities and
shareholders' equity $68,410 $95,983