AUSTIN, Texas -- March 28, 1996 -- href="chap11.healthcare.html">Healthcare
America, Inc. today announced that Bankruptcy Judge Larry E.
Kelly
has approved the Company's disclosure statement for the plan of
reorganization jointly proposed by the Company and its senior
lenders. The disclosure statement and plan will be mailed to the
Company's senior lenders and shareholders by April 1, 1996. Judge
Kelly set a hearing for April 29, 1996, to consider confirmation of
the plan of reorganization.
Under the plan of reorganization, the Company's current
shareholders will receive approximately 2% of the proceeds from any
sale of assets or any issuance of stock by the reorganized company.
The maximum aggregate amount payable to the current shareholders is
$2.5 million. The current shareholders will not have any other
interest in the reorganized company. Importantly, pursuant to the
plan of reorganization, the reorganized company will not recognize
any transfers of the Company's stock subsequent to the confirmation
of the plan of reorganization, which is expected to occur on April
29, 1996. In addition, the reorganized company will not recognize
any transfers of interests in the contingent receivable.
The Company also announced results for the year ended December
31, 1995. The Company reported a net loss of $27.9 million or $2.51
per share. For the year ended December 31, 1994, the Company
reported a net loss of $155.7 million or $14.00 per share.
Both the 1995 and 1994 results include non-recurring expenses,
including provisions for losses due to asset impairment, recovery of
reserves for contingent liabilities, and financial restructuring
expenses. In 1995, the Company recorded $13.5 million of these non-
recurring expenses as compared with $150.4 million in 1994. In
1994, the Company also recorded a non- recurring gain on
foreclosures of $5.4 million.
Net patient revenue, salaries and benefits, and other expenses
increased for the year ended December 31, 1995, compared to 1994 due
primarily to the commencement of operations at two acute care
hospitals and one psychiatric hospital in 1994. Revenue from real
estate operations declined as a result of the tenant defaults and
subsequent commencement of operations at these hospitals and the non-
recurring gain of $5.4 million in 1994. Net patient revenue for
1995 includes favorable prior year settlements of Medicare and
Medicaid cost reports of $0.9 million as compared with $3.3 million
for 1994.
Depreciation and amortization decreased by $4.1 million for the
year ended December 31, 1995, as compared to the prior year. This
decrease is primarily attributable to the lower net book value of
assets present during 1995. During the fourth quarter of 1994, the
Company recorded a $150.0 million charge to reduce the net carrying
value of its real estate properties and goodwill.
Interest expense increased by $5.8 million from 1994 to 1995 due
to generally higher interest rates and the accrual of default
interest on the Company's senior debt.
Healthcare America is a healthcare management company that owns
and operates acute care hospitals, long-term rehabilitation
hospitals, psychiatric hospitals, community living programs, and a
full array of partial hospital and outpatient services in Texas,
California, Colorado, Florida, Oklahoma, Tennessee, and Virginia.
Healthcare America is traded over-the-counter through the National
Daily Quotation System "Pink Sheets" published by the National
Quotation Bureau, Inc.
HEALTHCARE AMERICA, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
For the Year Ended
December 31
1995 1994
Revenues:
Net patient revenue $ 166,425 $ 138,675
Real estate revenue 1,777 11,215
Total revenues 168,202 149,890
Operating expenses:
Salaries and benefits 88,549 73,263
Other operating expenses 63,652 53,129
Depreciation and amortization 5,692 9,809
Recovery of reserves
for contingent liabilities (4,278) -
Provision for losses due
to asset impairment 12.720 150,000
Total operating expenses 166,335 286,201
Interest 24,761 19,011
Financial restructuring expenses 5,018 392
Net loss $ (27,912) $ (155,714)
Net loss per share $ (2.51) $ (14.00)
Common stock (weighted average) 11,125,000 11,125,000
HOUSTON, TX -- March 28, 1996 -- Kelley Oil & Gas
Corporation (Nasdaq NM:KOGC), successor to Kelley Oil Corporation
("Kelley Oil") and Kelley Oil & Gas Partners, Ltd. ("Kelley
Partners") announced its 1995 results today. The Company reported a
net loss of $211.3 million ($5.31 per common share) for 1995 on
revenues of $66.9 million compared to a loss of $25.0 million ($1.58
per common share) on revenues of $59.8 million for 1994. After
giving effect to the February 1995 consolidation of Kelley Oil and
Kelley Partners, the pro forma loss was $211.5 million ($5.07 per
common share) and $48.6 million ($1.39 per common share) for 1995
and 1994, respectively. The net loss in 1995 was significantly
impacted by nonrecurring noncash charges of $150.1 million for
property impairments under FAS 121 "Accounting for the Impairment of
Long-Lived Assets" adopted in the fourth quarter of 1995. The
property impairments taken in 1995 will significantly reduce unit
depreciation, depletion and amortization costs in the future.
Results were further impacted by higher interest and exploration
costs and by lower natural gas prices. A summary of financial and
operating data is attached.
With Contour Production Company's $48 million equity infusion in
February 1996, a new bank facility and new management in place, the
Company is optimistic about its prospects. A portion of the Contour
investment was used to repay the Company's outstanding bank debt of
$30 million, with the remainder allocated for drilling activities.
Contour has committed to purchase an additional 27 million newly
issued common shares at $1 per share upon satisfaction of certain
conditions.
John F. Bookout, who was appointed Chairman, President and Chief
Executive Officer of the Company as part of the Contour transaction,
stated, "The Company's primary operating objectives are to reduce
costs and to increase production by developing our substantial
existing asset base and by acquiring new proved reserves. We are
already cutting costs while focusing on the considerable low risk
development potential in north Louisiana where the Company has had a
100 percent completion rate over the last two years."
Although many of the wells drilled in north Louisiana during
1995 began producing too late in the year to contribute
significantly to 1995 revenues, these wells resulted in the reversal
of declining production performance in the fourth quarter and added
significant reserves.
Responding to production declines and disappointing drilling
results in south Louisiana, the Company temporarily suspended
drilling operations in that region. Mr. Bookout added, "Based on
the Company's ongoing intensive review and analysis of this highly
prospective area using our recently reprocessed 3-D seismic grid,
several interesting prospects and leads have already emerged."
Kelley Oil & Gas Corporation is an independent oil and gas
company with properties located primarily in Louisiana. The
Company's common and preferred stock are traded on the Nasdaq
National Market under the symbols KOGC and KOGCP.
Kelley Oil & Gas Corporation
Condensed Income Statements
(In thousands, except per share amounts and prices)
Year Ended December 31,
1995 1994 1995 1994
Pro Forma Pro Forma
Income Statement Data:
Oil and gas revenues $38,550 42,348 36,042 15,487
Gas marketing revenues 27,235 21,900 29,076 42,918
Gain on sale of
properties 777 --- 777 ---
Total revenues 67,553 65,841 66,881 59,821
Production expenses 11,461 12,318 10,835 3,760
Cost of gas sold 26,277 21,855 28,120 41,583
Exploration and dry
hole costs 23,727 18,083 23,387 7,404
General and
administrative
expenses 7,398 8,308 7,030 5,172
Restructuring charge 1,115 1,814 1,115 1,814
Interest and other
debt expenses 22,763 10,912 21,956 3,122
Impairment of oil and
gas properties 150,138 --- 150,138 ---
Depreciation, depletion
and amortization 36,190 39,727 35,591 20,474
Net loss before
preferred dividends (211,516) (48,625) (211,291) (24,957)
Net loss applicable
to common shares (218,549) (53,236) (217,898) (27,862)
Net loss per common
share (5.07) (1.39) (5.31) (1.58)
Average primary common
shares outstanding 43,123 38,276 41,032 17,653
Summary Production Information
Average Sales Prices:
Gas ($/Mcf) $1.72 1.87 1.71 1.89
Oil and condensate ($/Bbl) 17.31 16.30 17.37 16.31
Mcfe ($/Mcf) 1.84 2.03 1.83 2.01
Average daily production:
Gas (Mmcf) 51.6 49.7 48.6 18.3
Oil and condensate (MBbls) 1.0 1.2 0.9 0.5
Equivalents (Mmcfe) 57.3 57.0 53.9 21.2
Operating Costs per Mcfe:
Lease operating expenses $0.44 0.49 0.45 0.38
Severance taxes 0.11 0.10 0.10 0.11
General and administrative
expenses 0.35 0.40 0.36 0.67
Depreciation, depletion
and amortization 1.73 1.91 1.81 2.65
Kelley Oil & Gas Corporation
Condensed Balance Sheets
(In thousands)
As of December 31,
1995 1994 1994
Pro Forma
Assets
Current assets $22,697 26,208 27,879
Property and equipment, net 128,642 286,009 74,912
Other assets 3 1,379 3,722
Total assets 151,342 313,596 106,513
Liabilities and Stockholders'
Equity (Deficit)
Current liabilities $31,930 42,852 24,091
Long term debt 164,980 122,918 37,242
Stockholders' equity (deficit) (45,568) 147,826 45,180
Total liabilities and
stockholders' equity (deficit) 151,342 313,596 106,513
BURLINGTON, N.C., March 28, 1996 - EDITEK, Inc. (AMEX:
EDI) reported today revenues of $7,526,000 for the year ended
December 31, 1995, an increase of $933,000, or 14%, compared to
$6,593,000 for the year ended December 31, 1994.
"EDITEK has substantially furthered its strategic objectives of
growth and profitability during 1995 and into 1996 through its plan
of strategic acquisitions, product development and new product
introductions, technology alliances and government contracting.
Today, EDITEK is well positioned in the toxicology market with its
new, wholly owned subsidiary MEDTOX Laboratories, Inc. ("MEDTOX"),
in the on-site test kit and laboratory supply business worldwide
through DIAGNOSTIX, Inc., and with its government contract with the
Department of Defense," said James D. Skinner, Chairman, President
and C.E.O.
"On January 30, 1996, the Company completed the acquisition of
MEDTOX following a year of discussions and capital raising
activities. The $24 million acquisition of MEDTOX was completed
through the issuance of $5 million of common stock, $5 million of
debt including two $2 million loans and a $1 million revolving line
of credit and more than $20 million from the issuance of preferred
shares. The successful MEDTOX operation had revenues and net income
of approximately $20 million and $2.8 million respectively in 1995
generated by 250 employees. Having been founded in 1984 by Dr.
Harry G. McCoy, the laboratory rapidly gained a reputation for
scientific excellence and superior quality and service in
specialized, reference, medical/clinical toxicology and later in
forensic (substance abuse testing) toxicology. More recently, MEDTOX
has expanded into biological monitoring and pharmacology toxicology.
"Dr. McCoy continues in his position as President of MEDTOX and
with his team at the St. Paul, Minnesota laboratory, is now a part
of the EDITEK family enthusiastically pursuing the opportunities
available to the Company.
"In February 1994, EDITEK completed its strategic acquisition of
Princeton Diagnostic Laboratories of America, Inc. ("PDLA"), a
laboratory in the forensic toxicology business, processing
approximately 400 substance abuse testing samples per day, and with
a small clinical laboratory business. EDITEK divested the clinical
business in January 1995 in return for a two year royalty stream.
New general management was hired along with a seasoned sales and
marketing group who focused on the pre-employment drug screening
market and successfully increased the testing volume from 400
samples per day to almost 1,500 samples per day and was also awarded
the prestigious Department of Transportation drug testing contract.
"With the acquisition of MEDTOX, the Company made the decision
to consolidate all laboratory testing into the impressive MEDTOX
facility. As the laboratory business is volume dependent, this
consolidation is expected to result in significantly reduced costs
and improved gross margins. MEDTOX and PDLA personnel have been
diligently working towards the completion of the consolidation by
March 31st. The consolidation has been progressing smoothly and we
are optimistic about the positive impact on the Company's financials
beginning with the second quarter of 1996.
"Our MEDTOX subsidiary is now responsible for the provision of
laboratory toxicology services and the sales/marketing of the
Company's on-site substance abuse testing kits with a particular
focus on the industrial, pre-employment drug screening market.
MEDTOX will have almost 300 people and is expected to generate
profitable revenues accounting for approximately 80% of the
Company's total revenues.
As a result of the acquisition of MEDTOX and the subsequent
consolidation of the laboratory testing at PDLA into the MEDTOX
facility in St. Paul, the Company has taken a one time restructuring
charge, in 1995, of $3,831,000 or $0.41 per share. The resulting
total net loss for 1995 was $8,043,000, or $0.85 per share compared
to a net loss of $3,546,000 or $0.49 per share for 1994.
"EDITEK has been a leader in the research and development of
products in the areas of substance abuse and food safety testing
which have been marketed through its DIAGNOSTIX, Inc. wholly owned
subsidiary. In June 1995, the Company completed the acquisition of
Bioman Products, Inc. Bioman was founded in 1990 focusing on the
distribution, in Canada, of forensic, environmental and other test
kit and laboratory products. The success achieved enabled them to
expand their product offering, through OEM relationships, into the
international market, particularly Europe. The sales and marketing
strength of Bioman complimented the need of our DIAGNOSTIX, Inc.
subsidiary. Today, all EDITEK developed and manufactured kits are
the sales and marketing responsibility of DIAGNOSTIX on a worldwide
basis, The MEDTOX sales and marketing team will focus on the sale of
the on-site drug testing kits in the United States to the industrial
market while DIAGNOSTIX will be responsible for the sale of these
products and all other products in the DIAGNOSTIX catalog for the
many other market opportunities in the United States and abroad.
"Included among the expanding product line of internally
developed products is the VERDICT(R) PCP test which was launched in
February 1996. DIAGNOSTIX, working with the MEDTOX sales and
marketing team, is preparing for the launch of its most exciting,
new drug testing product, EZ-SCREEN(R) PROFILE(TM). This newest
product enables a customer to simultaneously test for, in less than
ten minutes, the five most commonly requested drug assays
- Amphetamines, Cocaine, Opiates, PCP and THC (marijuana). This
product will be sold to the forensic market only while the Company
awaits pre-market clearance from the Food and Drug Administration
for sale as an in-vitro diagnostic product. Although selling
activity is currently underway, fall product launch is scheduled for
mid April.
"The Company's R&D group has also successfully developed a new
microtiter-based line of agridiagnostic products which DIAGNOSTIX
has been marketing under the name of EZ-QUANT(R). Following the
introduction of the EZ-QUANT Aflatoxin test, DIAGNOSTIX introduced
the EZ-QUANT Vomitoxin test during the fall of 1995 resulting from
an agreement with the Canadian Department of Agriculture. The
newest product, EZ-QUANT Chloramphenicol, is currently being
launched and will be followed in the second quarter by the EZ-QUANT
Ochtratoxin test.
"As Bioman already had an extensive distribution network in
place in Europe, the new DIAGNOSTIX management team has been
evaluating the overall marketing/distribution approach with the
combined product line of EDITEK and the former Bioman.
Coincidentally, Rhone-Poulenc recently divested its Rhone-Poulenc
Diagnostics, Ltd. ("RPDL") subsidiary to the RPDL management team
and now operates as Rhone-technologies, inc. ("Rti"). Working with
Rti, DIAGNOSTIX is in the process of restructuring its European
distribution network. DIAGNOSTIX will continue to distribute
through Rti in those countries where it has achieved success with
the DIAGNOSIX, Inc. product line. In certain other countries,
DIAGNOSTIX will expand its relationship with the former Bioman
distributors or establish entirely new distribution relationships.
For example, DIAGNOSTIX has just completed an exclusive distribution
agreement in the United Kingdom with Microgen Bioproducts, Ltd., a
company focusing on the food and agriculture market. Similarly, an
exclusive distribution agreement has been reached with R-Biopharm,
GmbH, for the German market. R-Biopharm is a world leading,
manufacturer and distributor of diagnostic tests for the food and
clinical markets.
"We are very pleased with our new DIAGNOSTIX, Inc. subsidiary,
particularly the internal product development activities and the
strength of our sales and marketing team which have positioned
DIAGNOSTIX, Inc. for revenue growth.
"EDITEK is now in its sixth contractual year with the United
States Department of Defense for the development of rapid, on-site
assays for the detection of biological substances associated with
chemical and biological warfare. In 1995, the contract was amended
to include the development of a number of new assays in addition to
the production, on a pilot scale, of several tests in the one-step
RECON(R) format. A portion of these pilot production batches were
completed and shipped during the fourth quarter of 1995 and the
first quarter of 1996.
"Through the Company's collaboration agreement with Battelle
Memorial Institute, the EDITEK and Battelle R&D teams have
successfully completed proof of principle experiments with EDITEK
reagents and the Battelle Biorefractometer(TM) biosensor instrument.
These encouraging results will be pursued through an expanded
collaboration that we hope will culminate in a commercially viable,
technologically leading instrument/reagent system that will be
marketed through our DIAGNOSTIX subsidiary.
"With the acquisition of both Bioman and MEDTOX, EDITEK is a
dramatically different company from what it was even one year ago.
It is now positioned for a new level of strategic growth. To help
chart this course, the Company expanded its Board of Directors. Dr.
Harry G. McCoy of MEDTOX, and Mr. George W. Masters, Vice Chairman,
President and C.E.0, of one of the country's leading biotechnology
firms, Seragen, Inc., have both joined the Board.
"The Company's intellectual property portfolio continues to
expand. During 1995, U.S. Patent .5,435,970, Device for Analysis for
Constituents in Biological Fluids, was issued in addition to
Japanese Patent .1916522, Suspension Liquid Separator. More
recently, a new U.S. patent, Rotary Fluid Manipulator, .5,496,520,
issued resulting from the successful interference case against Murex
Corporation. In addition, the Multi-Layered Test Card patent was
issued in nine foreign countries.
"With the substantial progress made by EDITEK in implementing
its business plan, it is unfortunate that the Company's improved
financial position and increased revenues resulting from the MEDTOX
acquisition, are being overshadowed by recent stock market activity.
The Company is conducting an inquiry into this market activity
regarding its common stock and has requested the American Stock
Exchange to investigate the recent trading activity. Furthermore,
the Company has received many inquiries from holders of common stock
regarding the effect on the Company and its shares of common stock
from the conversion to common stock of the Series A Convertible
Preferred Shares which become convertible during the period
beginning March 30, 1996 and ending January 30, 1998. These
preferred shares are convertible to common shares at a discounted
price to the prevailing market price. Current common stock
shareholders are concerned about the number of shares available to
the preferred shareholders as a result of the recent decrease in the
price of the Company's common stock and the possibility of the
resale of such shares in the public market.
"303 of the 407 outstanding shares of preferred stock were sold
to foreign investors pursuant to the exemption afforded by
Regulation S. Although the stock purchase agreements call for the
shares of common stock issuable upon conversion of 303 shares of
preferred stock to be issued without a restrictive legend, the
Company has made the decision that such commnon shares upon
conversion will be issued with a legend. This legend will indicate
that these shares can only be sold in the United States upon
registration or pursuant to an exemption from the registration
requirements of securities laws. The legend does not prevent the
preferred shareholders from converting and trading in the Company's
stock outside the United States and in compliance with Regulation S;
it does, however, help to ensure that such common stock is not
inadvertently, illegally sold in public markets in the United
States. The Company believes it is in the interest of its
shareholders to implement this procedure to assure that all resales
of common stock are made in compliance with applicable securities
laws.
"We are aware that the foregoing measure may mean that the
Company is not in compliance with the terms of certain agreements
with holders of preferred stock and may result in litigation.
Nonetheless, we are determined that these measures are necessary to
fulfill the intent of the parties which is to provide the holders of
preferred stock with their conversion privilege and common stock
resale under Regulation S while protecting against the inadvertent,
illegal sale of such stock in the U.S. public market."
Mr. Skinner went on to say, "The past year has been an exciting
and rewarding period in the history of the Company. I am confident
that the successes we have achieved will be positively reflected in
our second quarter financials as we manage our newly expanded
company toward profitable revenues."
EDITEK, INC.
STATEMENT OF OPERATIONS
(in thousands except per share amounts)
Year Ended December 31
1995 1994
Revenues $7,526 $6,593
Costs and Expenses $15,569 $10,139
Net Loss ($8,043) ($3,546)
Loss Per Share of
Common Stock ($0.85) ($0.49)
Weighted Average of Shares
of Common Stock
Outstanding 9,445,707 7,204,244
Three Months Ended December 31
1995 1994
Revenues $1,863 $1,542
Costs and Expenses $7,116 $2,672
Net Loss ($5,253) ($1,130)
Loss Per Share of
Common Stock ($0.53) ($0.15)
Weighted Average of Shares
of Common Stock
Outstanding 9,919,441 7,547,053
TEMPE, Ariz. -- March 28, 1996 -- New West
Eyeworks, Inc. (NASDAQ:NEWI) today announced operating results for
its 1995 fiscal year.
Net Sales for the twelve-month fiscal year ended December 30,
1995 increased 7.1% to a record $40.0 million, compared with
approximately $37.4 million in the fiscal year ended December 31,
1994. Figures for 1995 and the prior year include sales generated
by 10 Smitty's and eight Fred Meyer host stores which were closed
earlier in the year. If revenues from the Smitty's host stores are
excluded from the 1994 and 1995 results, New West Eyeworks' full-
year 1995 revenues would have increased 10.3%. As reported earlier,
comparable-store sales rose 5.4% during 1995, while the Company
opened nine new stores and closed 20 unprofitable or underperforming
locations (primarily located in Smitty's and Fred Meyer host stores)
during the course of the year. At December 30, 1995, New West
Eyeworks was operating 139 retail eyewear stores in ten Western
states.
The Company reported a net loss of $2,025,000 ($0.63 per share,
after payment of dividends on preferred stock) during 1995, versus a
net loss of $1,288,000 ($0.43 per share after preferred dividends)
in the previous year. Gross profit increased 11.2% to $19,681,000
in the most recent year, compared with $17,692,000 in 1994.
However, selling, general and administrative expenses, which rose
14.2% in 1995 to $21,667,000 compared with $18,978,000 in 1994,
included significant costs involved in the restructuring of New
West's retailing operations and the related closure of unprofitable
host stores and retail outlets which did not achieve operating
objectives established by management. A significant portion of
these restructuring expenses were incurred during the third and
fourth quarters of 1995.
Ronald E. Weinberg, Chairman of the Board of New West Eyeworks,
Inc. noted that, "We entered 1995 on the heels of a strike by
employees at Fred Meyer stores in Washington and Oregon, which
reduced customer traffic at our `host' stores in the Northwest and
caused us to report lower than anticipated sales and disappointing
operating results for the year. Our branded Lee Optical and Vista
Optical retail eyewear stores turned in an impressive operating
performance during 1995. In the second half of the year and early
in 1996, management implemented a series of effective actions to
restructure the retail operations of the company."
"We are now seeing the benefits of management's strategic
changes. We sharply reduced fixed costs through a reduction of
staffing and we closed a number of underperforming stores. We
expect these cost reductions to result in savings of over $1.0
million in 1996. Also, we have recently raised prices on bifocals
and second-pair purchases of eyeglasses, while continuing to provide
tremendous value to the consumer. We believe New West is well
positioned to realize the potential of its merchandising strategy
within the retail eyewear industry," further commented Mr. Weinberg.
"The current year has started on a strong note and we are
anticipating a good first quarter," stated Barry Feld, President and
Chief Executive Officer of the company. "Management is particularly
pleased that comparable-store sales have once again achieved double-
digit growth in the non-host stores. The strength of our
merchandising concept can be seen in last year's 5.4% gain in comp-
store sales, the completion of our sixteenth consecutive positive
comp-store quarter, and the acceleration in same-store sales gains
in recent weeks. During 1996, we plan to open 10-15 new stores,
which will largely be funded out of operating cash flow. Many of
these new retail outlets will be located in Iowa, as we expand into
the Midwest where we anticipate that budget-conscious families will
respond favorably to our value-oriented pricing strategy. We
believe that New West Eyeworks stands at the threshold of exciting
and sustainable growth and profitability in the future."
New West Eyeworks, Inc. is a leading specialty retailer of
eyewear and currently operates 140 stores in twelve Western states.
The Company's merchandising strategy centers around a "signature"
$59 price point for a wide selection of quality brand-name
eyeglasses (frames + lenses). New West also sells brand-name
contact lenses and non-prescription sunglasses and offers customers
on-site eye examinations by independent optometrists in its stores
which operate under the "Lee Optical" name in Arizona and Utah and
"Vista Optical" in the other states. The Company's optical
laboratories and distribution facilities are located in Tempe,
Arizona and near Portland, Oregon.
New West Eyeworks' common stock is traded on NASDAQ under the
ticker symbol "NEWI."
Consolidated Balance Sheet
Assets
December 30, December 31,
1995 1994
____________ ____________
CURRENT ASSETS:
Cash and cash equivalents $ 241,000 $ 1,000,000
Accounts receivable, net 999,000 875,000
Inventory 3,132,000 2,851,000
Other current assets 78,000 130,000
____________ ____________
Total current assets 4,450,000 4,856,000
Property and equipment, net 6,656,000 6,131,000
Goodwill 596,000 686,000
Other assets 32,000 48,000
____________ ____________
Total assets $ 11,734,000 $ 11,721,000
____________ ____________
____________ ____________
Liabilities and
Stockholders' Equity
LIABILITIES:
Accounts payable $ 5,755,000 $ 4,059,000
Accrued expenses 3,096,000 2,410,000
Deferred warranty revenues 348,000 588,000
Notes payable and capital lease
obligations, current portion 235,000 153,000
____________ ____________
Total current liabilities 9,434,000 7,210,000
Liability for closed store leases 57,000 129,000
Notes payable and capital lease
obligations 321,000 106,000
____________ ____________
Total liabilities 9,812,000 7,445,000
____________ ____________
COMMON STOCK AND OTHER STOCKHOLDERS'
EQUITY:
Series A 6% Cumulative Convertible
Preferred Stock, $1,000 par value,
3,960 shares authorized, issued and
outstanding 3,960,000 3,960,000
Series B 6% Cumulative Convertible
Preferred Stock, $1,000 par value,
1,500 shares authorized, issued and
outstanding 1,500,000 1,500,000
Common stock, $0.01 par value,
5,000,000 shares authorized,
3,763,036 and 2,264,286 shares
issued and outstanding 38,000 38,000
Paid-in capital 10,070,000 10,070,000
Accumulated deficit (13,646,000) (11,292,000)
____________ ____________
Total common stock and other
stockholders' equity 1,922,000 4,276,000
____________ ____________
Total liabilities and stockholders'
equity $ 11,734,000 $ 11,721,000
____________ ____________
____________ ____________
CONSOLIDATED STATEMENT OF OPERATIONS
Fiscal Year Ended
_______________________________________
December 30, December 31, December 25,
1995 1994 1993
___________ ___________ ___________
Net Sales $40,033,000 $37,367,000 $32,964,000
Cost of sales 20,352,000 19,675,000 17,256,000
___________ ___________ ___________
Gross profit 19,681,000 17,692,000 15,708,000
Selling, general and
administrative expenses 21,667,000 18,978,000 16,277,000
___________ ___________ ___________
Operating loss (1,986,000) (1,286,000) (569,000)
Interest income 12,000 53,000 2,000
Interest expense 51,000 55,000 712,000
___________ ___________ ___________
Loss before income tax
benefit, extraordinary
gain and cumulative effect
of a change in accounting
principle (2,025,000) (1,288,000) (1,279,000)
Income tax benefit 469,000
___________ ___________ ___________
Loss before extraordinary
gain and cumulative effect
of a change in accounting
principle (2,025,000) (1,288,000) (810,000)
Extraordinary gain from
retirement of debt,
net of tax 1,674,000
Cumulative effect of a
change in accounting
principle 374,000
___________ ___________ ___________
Net income (loss) (2,025,000) (1,288,000) 1,238,000
Preferred stock dividends (329,000) (328,000) (396,000)
___________ ___________ ___________
Net income (loss)
applicable to holders of
common stock $(2,354,000) $(1,616,000) $ 842,000
___________ ___________ ___________
___________ ___________ ___________
Income (loss) per common
and common equivalent
share:
Loss before extraordinary
gain and cumulative
effect of accounting
change $ (0.63) $ (0.43) $ (0.57)
Extraordinary gain 0.79
Cumulative effect of
accounting change 0.18
___________ ___________ ___________
Net income (loss) $ (0.63) $ (0.43) $ 0.40
___________ ___________ ___________
___________ ___________ ___________
Weighted average number of
common and common
equivalent shares
outstanding 3,763,036 3,736,166 2,125,000
CONTACT: Weinberg Capital, Cleveland
Ronald E. Weinberg, 216/861-4540
or
New West Eyeworks, Inc., Tempe
Barry Feld, 602/438-1330
PORTLAND, March 28, 1996 - href="chap11.americold.html">Americold Corporation, the
nation's largest warehousing and logistics company serving the
frozen food industry, released its preliminary unaudited fiscal 1996
and fourth quarter financial results for the periods ended February
29, 1996. For the full year ended February 29, 1996, sales
approximately $279.8 million, up 30.0% over the prior year total of
approximately $215.2 million. Transportation management services
sales increased approximately 312.2%, from approximately $18.0
million in fiscal 1995 to approximately $74.2 million for the
current year, and warehousing sales increased approximately 4.6%,
from approximately $192.5 million in fiscal 1995 to approximately
$201.4 million in fiscal 1996. The net loss for fiscal 1996 was
approximately $9.9 million as compared to net income of
approximately $5.6 million for fiscal 1995. Included in the net
loss for fiscal 1996 were combined one-time charges, net of tax,
totaling approximately $7.0 million. The one-time charges related
to the Company's fiscal 1996 reorganization efforts, the associated
write-off of unamortized debt issuance costs, and the write-off of
an investment in a start-up company. Included in net income for
fiscal 1995 was an approximate $10.3 million benefit, net of tax,
resulting from the receipt of insurance proceeds pursuant to the
Company's settlement with its insurance carriers for business
interruption losses, property damage and out-of-pocket expenses
incurred with respect to a fire at its Kansas City, Kansas facility.
EBITDA from operations for fiscal 1996 was approximately $77.0
million, versus approximately $72.0 million for fiscal 1995,
representing a 6.9% increase. EBITDA from operations excludes the
impact of the one-time charges in fiscal 1996 and the impact of the
insurance proceeds benefit in fiscal 1995 detailed above, and it is
also before ESOP expenses of approximately $0.8 million before taxes
for both fiscal 1996 and fiscal 1995, a portion of which is non-
cash.
Fourth quarter sales were approximately $79.9 million, up 50.8%
over the prior year's sales of $53.0 million for the same period.
The increase was due primarily to significantly increased sales from
the Company's new transportation management services business. The
net loss for the fourth quarter was approximately $2.1 million as
compared to an approximate $1.7 million net loss for the same period
in the prior year. Included in the net loss for the fiscal 1996
fourth quarter was approximately $0.4 million in one-time charges,
net of tax, resulting primarily from the Company's reorganization
efforts. EBITDA from operations for the fourth quarter, before ESOP
expenses and before the one-time restructuring charges totaled
approximately $18.7 million, up 6.3% over the prior year's total of
$17.6 million.
CONTACT: Lon V. Leneve of Americold Corp., 503-624-8588
CANTON, Mass. -- March 28, 1996 -- Sydney L.
Katz, President and Chief Executive Officer of Grossman's Inc.
(NASDAQ-GROS) today announced a major restructuring and refinancing
plan, under which the Company's Grossman's Stores Division will be
closed with the improved liquidity used to continue expansion of
Contractors' Warehouse and Mr. 2nd's Bargain Outlet.
Under the program, the Company's 60 Grossman's stores, located
in eight Northeastern states, will be closed and inventories
liquidated over an estimated ten week period. Concurrent with the
store closings, administrative support functions in the Company's
home office in Canton, Massachusetts will be reduced.
Simultaneously, expansion of Contractors' Warehouse and Mr. 2nd's
Bargain Outlet stores will continue, with the 16th Contractors'
Warehouse store, located in Lexington, Kentucky, scheduled to open
in May 1996 and a Cleveland, Ohio store planned for Fall 1996.
Additional sites are being explored for Contractors' Warehouse
stores. The Mr. 2nd's Bargain Outlet Division, which opened three
stores in Massachusetts this month, is expected to open four or more
stores this summer, some of which will be conversions from
Grossman's stores being closed.
These actions have enabled Grossman's to obtain a committment
for a $33 million secured mortgage loan, $4 million of which is
convertible at the option of the lender into common stock.
Repayment of the loan will be financed by the sale of 55 owned
properties in the Northeast, including 40 of the stores being
closed. The Company also announced it has reached an agreement in
principle with the holders of the Company's 14% Debentures, curing
the current default. Cash payments of approximately $12 million will
be made and notes will be issued for the balance owed, half of which
are also convertible at the option of the lender into common stock.
Further, the Company's $15.8 million note receivable from Kmart
Corporation, which was due in two installments in 1997, has been
sold for $13 million, its approximate discounted book value.
Mr. Katz said, "The decision to close the Grossman's stores was
extremely difficult, given the Company's history of service to
customers and the many dedicated associates affected by this
decision. The extremely competitive business environment, however,
along with the division's inability to provide acceptable financial
returns, forced us to take decisive action to position the Company
for future growth for the benefit of all its shareholders.
Obtaining financing during the period in which we will be divesting
of non-strategic real estate will create the liquidity necessary for
us to once again grow our business.
He added, "We are committed to pay in full, and in a timely
manner, all outstanding and future obligations to our vendors. We
thank all our vendors for their cooperation and support and, as we
reposition and grow, we look forward to strong and mutually
beneficial relationships with suppliers to our Contractors'
Warehouse and Mr. 2nd's Bargain Outlet stores."
The Company expects to reflect a restructuring charge, estimated
to be approximately $40 million, in the current financial quarter
which ends March 31, 1996. The Company also expects a significant
improvement in liquidity following completion of all financing
transactions. Financial statements for the year ended 1995,
containing details of the financing arrangements, will be filed with
the Securities and Exchange Commission and available for public
distribution on April 1, 1996.
Upon completion of the store closings, the Company's total
workforce will have been reduced from approximately 3,400 to
approximately 1,800 employees.
Grossman's operates 15 Contractors' Warehouse stores in
California, Nevada, Indiana and Ohio and 24 Mr. 2nd's Bargain Outlet
stores in Massachusetts, Rhode Island and New York State.
CONTACT: Grossman's
Steven L. Shapiro, 617/830-4020
SMITHFIELD, N.C. -- March 28, 1996 -- Factory
Stores of America, Inc. (NYSE:FAC) today reported results for the
fourth quarter and year ended December 31, 1995.
For the year ended December 31, 1995, funds from operations
(FFO) were $15.0 million, or $1.27 per share, compared with FFO of
$21.9 million, or $1.85 per share, for 1994. As previously
announced, the Company recognized a fourth quarter charge of $9.5
million related to the termination of agreements to acquire the
factory outlet centers owned by The Public Employees System of Ohio
(OPERS) and certain other reorganization costs. In addition, as a
result of the Company's decision to sell certain underperforming
centers, the Company recognized a fourth quarter charge to earnings
of $8.5 million to reduce the carrying amount of these centers to
their estimated net realizable value. As a result of these
nonrecurring charges, the Company reported a net loss for the year
of $13.1 million, or a loss of $1.11 per share, compared with 1994
net income of $12.2 million, or $1.04 per share.
Total revenue for the year increased 12% to $53.3 million from
$47.7 million for 1994. Base and percentage rental income increased
12% to $39.7 million for 1995 from $35.4 million for 1994. Property
level operating income increased 6% to $33.9 million from $32.0
million for 1994. Average rental revenue per square foot increased
by 3% over 1994. The Company defines average rental revenue per
square foot as total base and percentage rent plus recoveries from
tenants divided by average gross leasable area (GLA). The Company
ended the year with approximately 4.6 million square feet of GLA, up
9.3% from 4.2 million at December 31, 1994.
For the fourth quarter, the Company reported a net loss of $20.5
million, or a loss of $1.74 per share, compared with net income of
$900,000, or $0.08 per share, for the fourth quarter of 1994. FFO
was ($858,000), or ($0.07) per share, for the fourth quarter
compared with FFO of $4.7 million, or $0.40 per share, for the
fourth quarter of 1994.
Total revenue for the fourth quarter of 1995 was $13.0 million
compared with $13.2 million for the same quarter in 1994. Base and
percentage rental income increased to $9.9 million from $9.8 million
for the prior-year quarter. The lower than expected fourth quarter
results were attributable to an additional charge to the reserve for
uncollectible tenant receivables, higher spending on property level
marketing and the motorsport program, adoption of a more
conservative capitalization policy on leasing and development costs,
and an increase in interest expense reflecting the higher borrowing
level from the comparable period in 1994.
Commenting on the results, J. Dixon Fleming, Jr., Chairman,
said, "In the fourth quarter we recognized a one-time charge to
earnings for the write-down of certain properties. As a result of
the write-down and the other nonrecurring charges, our fourth
quarter and year-end losses were greater than we had anticipated.
We had previously disclosed that certain properties were
underperforming and, in fact, we are already pursuing our options
for the disposal of these assets. These centers represent only 8%
of our total GLA, 6% of our projected net operating income and 3.5%
of our anticipated FFO. Under a new accounting rule which we will
adopt during the first quarter of 1996, we are required to assess
each property for any indication of impairment of value and reduce
the carrying amount of the property to estimated net realizable
value. We have completed an analysis of our portfolio and, based on
circumstances in existence today, do not believe we have any other
assets which would require an impairment charge."
Also today, the Company announced that it has executed a
commitment with Gildea Management Company and Blackacre Bridge
Capital, LLC to provide $30 million to Factory Stores through a
private placement, of which $25 million will be in the form of
Exchangeable Notes and $5 million in 11% Senior Notes. The
Exchangeable Notes and the Senior Notes will both be unsecured. The
Exchangeable Notes will be mandatorily exchangeable into shares of
the Company's Convertible Preferred Stock upon stockholder approval
of necessary amendments to the Company's Certificate of
Incorporation. Each $25 in principal amount of Exchangeable Notes
will be mandatorily convertible into one share of Convertible
Preferred Stock which will be convertible into shares of Common
Stock of the Company at a conversion price equal to the lower of $9
per share or a per share price based on a 30-day average price for
the Company's Common Stock. The Convertible Preferred Stock will
have limited voting rights and have noncumulative dividends equal to
those of the Common Stock. In the event stockholder approval is not
obtained, the Exchangeable Notes will be convertible at the option
of the holder into shares of Common Stock of the Company.
Stockholders will be asked to consider and vote on the amendment to
the Company's Certificate of Incorporation at the upcoming annual
meeting.
John W. Gildea, managing director of Gildea Management Company,
stated, "The hallmark of our investment philosophy is to invest with
an experienced and knowledgeable management team. We are excited
about working with the team assembled by Mr. Morton. Factory Stores
is an excellent company, and we look forward to supporting the
Company and the new management in achieving its growth objectives."
The Company reported that its lender, Bank One, Dayton, has
waived all currently existing defaults and that it is nearing
completion of an agreement to increase its credit facility by $5
million, for a total of $75 million. Certain financial ratios and
other covenants relating to the credit facility are also being
modified. "While there remain a few points of negotiation,
including proposed restrictions on our dividend distribution, we
expect to close the increased facility within the next week,"
Fleming stated. "The additional $30 million we have raised will be
used to complete our 1996 development, clean up all of our past due
payables, and provide some ongoing capital for growth. The dilution
on FFO of this new capital is expected to be less than $0.06 per
share for 1996."
As previously announced, the Board of Directors is scheduled to
declare the first quarter dividend during the first week of April.
Fleming said, "Based upon the current negotiation of our bank
agreement and related covenant issues, management expects to
recommend a first quarter dividend of $0.25 per share. This would
be in compliance with the proposed bank covenants and, if continued
throughout the year, would result in a payout ratio of less than 75%
of anticipated 1996 FFO. Recent articles related to the overall
trends of reducing payout ratios in our industry have caused the
bank to request a reduced payout ratio."
Investors are cautioned that any foregoing forward-looking
statements contained herein are subject to risks and uncertainties
that could cause actual results to differ materially, including: the
closing of bank agreements, and risk factors that are discussed from
time to time in the Company's SEC reports including, but not limited
to, the report on Form 10-K for the year ended December 31, 1994.
President and Chief Operating Officer C. Cammack Morton
commented, "From an operating perspective, our fourth quarter loss
included higher operating costs. We have already taken aggressive
measures as follows: personnel changes, cancellation of our
association with the motorsports program, the undertaking of a
number of corrective actions to include the implementation of cost
containment programs, a new process to increase the efficiency of
our rent collection, and an improved monitoring system for our
budget process to insure that these variable costs can either be
completely eliminated or significantly reduced in the future.
"Comparable tenant sales for the fourth quarter of 1995 were up
4% from the same quarter in 1994 compared to an industry average
decrease of 1.9%; and, on a full year basis, 1995 sales were up 0.1%
compared with 1994. We are encouraged that our total center sales
for the year ended 1995 were up by 10% over 1994. We are
aggressively implementing programs designed to improve the
performance of our overall portfolio and are pursuing options to
dispose of underperforming or idle assets, such as outparcels and
excess land.
"Our ability to raise an additional $15 million of capital over
what was reported in February and the reorganization of the Company
put us in a stronger position to aggressively move forward with our
goals for the future. Our focus for 1996 is to improve the
performance of our portfolio, complete the expansion projects that
are underway at a number of our centers, and begin predevelopment
activities on a new center in Brewster, New York. We recently
announced this project to the tenant community and received a great
deal of interest and positive feedback for this project, which is
currently planned for delivery in 1998. Additionally, we previously
announced our management contract of the Peachtree Outlet Center in
Newnan, Georgia, where we have the option to purchase the center at
a point in the future at a very favorable cap rate. This type of
opportunity enables us to evaluate a project prior to acquisition."
Headquartered in Smithfield, North Carolina, Factory Stores of
America, Inc. is a self- administered real estate investment trust
(REIT) engaged in the management, development and acquisition of
outlet shopping centers. The Company currently owns and operates 36
factory outlet shopping centers in 21 states, with a total of 4.6
million square feet, making it one of the largest outlet REITs in
terms of numbers of centers and square footage.
FACTORY STORES OF AMERICA, INC.
Consolidated Balance Sheets
(In thousands except per share data)
(unaudited)
December 31,
1995 1994
Assets
Outlet center properties, at cost
Land $ 77,270 $ 76,978
Building and improvements 211,524 224,140
Equipment 3,826 3,567
------- -------
292,620 304,685
Less accumulated depreciation (20,332) (12,872)
------- -------
272,288 291,813
Properties under development 25,923 7,468
------- -------
298,211 299,281
Properties held for sale, net
of reserve of $8,500 24,509 0
-------- --------
Outlet center properties, net 322,720 299,281
Cash and cash equivalents 1,655 1,297
Restricted cash 4,806 0
Rents from tenants and other
receivables 5,244 5,890
Receivables from related parties 1 286
Prepaid expenses 607 2,114
Interest receivables and deposits 289 2,283
Deferred cost 16,208 11,075
Other assets 3,565 4,044
-------- --------
Total assets $355,095 $326,270
-------- --------
-------- --------
Liabilities and shareholders' equity
Notes payable $100,972 $ 76,676
Notes payable to bank under line
of credit 69,939 25,267
Capital lease obligations 797 805
Payable related to acquisition 0 11,737
Accounts payable and accrued
expenses 16,022 6,593
Dividend payables 6,025 0
Prepaid rents and security deposit 854 1,852
-------- --------
Total liabilities 194,609 122,930
Shareholders' equity:
Common stock, $0.01 par value,
50,000,000 shares authorized,
11,814,523 and 11,813,599 shares
issued and outstanding, respectively 118 118
Additional paid in capital 160,368 203,222
Retained earnings
-------- --------
Total shareholders' equity 160,486 203,340
-------- --------
Total liabilities and shareholders'
equity $355,095 $326,270
-------- --------
-------- --------
Consolidated Statements of Income
(in thousands except for per share data)
(unaudited)
Three Months
Ended December 31,
1995 1994
Revenue:
Base and percentage rent $ 9,913 $ 9,831
Recoveries from tenants 2,883 3,047
Other income 184 369
-------- --------
Total revenue 12,980 13,247
Expenses:
Operating 6,227 4,989
General & administrative 12,102 1,630
Depreciation and amortization 3,156 2,503
Interest 3,513 2,341
Writedown of assets held for sale 8,500 0
-------- --------
Total expenses 33,498 11,463
Income from operations (20,518) 1,784
Gain on sale of real estate 0 0
-------- --------
Income before extraordinary item (20,518) 1,784
Extraordinary item - loss on
debt extinguishment 0 884
-------- --------
Net income $(20,518) $ 900
-------- --------
-------- --------
Earnings per common share
Income before extraordinary item $ (1.74) $ 0.15
Extraordinary item 0.00 (0.07)
-------- --------
Net income $ (1.74) $ 0.08
-------- --------
-------- --------
Weighted average number of
shares outstanding 11,815 11,813
-------- --------
-------- --------
Year Ended
Ended December 31,
1995 1994
Revenue:
Base and percentage rent $ 39,460 $ 35,373
Recoveries from tenants 13,098 11,253
Other income 759 1,107
-------- --------
Total revenue 53,317 47,733
Expenses:
Operating 19,380 15,731
General & administrative 15,838 5,680
Depreciation and amortization 11,900 8,511
Interest 11,145 4,701
Writedown of assets held for sale 8,500 0
-------- --------
Total expenses 66,763 34,623
Income from operations (13,446) 13,110
Gain on sale of real estate 345 0
-------- --------
Income before extraordinary item (13,101) 13,110
Extraordinary item - loss on
debt extinguishment 0 884
-------- --------
Net income $(13,101) $ 12,226
-------- --------
-------- --------
Earnings per common share
Income before extraordinary item $ (1.11) $ 1.11
Extraordinary item 0.00 (0.07)
-------- --------
Net income $ (1.11) $ 1.04
-------- --------
-------- --------
Weighted average number of
shares outstanding 11,814 11,811
-------- --------
-------- --------
Consolidated Statements of Cash Flows
(in thousands except for per share data)
(unaudited)
Year Ended
Ended December 31,
1995 1994
Cash flows from operating activities:
Net earnings (loss) $(13,101) $ 12,226
Adjustment to reconcile net earnings
to net cash provided by operating
activities, net of acquisitions:
Allowance for uncollectibles (145) 168
Depreciation & amortization 9,300 8,511
(Gain) loss on sale of real estate (345) 0
Writedown of assets held for sale 8,500 0
Amortization of deferred cost 4,143 287
Changes in operating assets/liabilities:
Rents and other receivables 976 (3,378)
Prepaids 1,507 (999)
Interest receivables & deposits 1,994 (1,399)
Accounts payables & accruals 9,529 3,057
Dividend payable 6,025
Rents & deposits due tenants (998) 1,399
-------- --------
Net cash provided by operating
activities 27,385 19,872
Cash flows from investing activities:
Proceeds from sale of real estate 576 0
Additions to outlet center properties (41,470) (18,942)
Changes in restricted cash (4,806) 0
Additions to deferred costs and
other assets (8,797) (11,132)
Acquisition of properties, net of cash
required 0 (51,827)
-------- --------
Net cash used in investing activities (54,497) (81,901)
Cash flows from financing activities:
Proceeds from issuance of notes payable 95,582 71,222
Payable related to acquisition of
properties (11,737) 11,737
Net borrowings (payments) under bank
revolving line of credit 44,672 25,267
Principal payments on long-debt:
Notes payable (71,066) (34,826)
Capital leases (228) (131)
Proceeds from the sale of common stock
net of stock issuance cost 18 6,791
Distributions to shareholders (29,771) (22,326)
-------- --------
Net cash provided by financing
activities 27,470 57,734
-------- --------
Net increase (decrease) in cash and
cash equivalents 358 (4,295)
Cash and cash equivalents,
beginning of period 1,297 5,592
-------- --------
Cash and cash equivalents,
end of period $1,655 $1,297
-------- --------
-------- --------
Supplemental disclosures of
cash flow information
Cash paid during period for interest
(net of interest capitalized of $2,555
and $1,039, respectively) $9,848 $6,631
-------- --------
-------- --------
Funds From Operations
(in thousands except for per share data)
(unaudited)
Quarter Ended Year Ended
December 31, December 31,
1995 1994 1995 1994
Weighted Average Shares
Outstanding 11,815 11,813 11,814
11,811
-------- -------- -------- --------
-------- -------- -------- --------
Old Definition
Net (Loss) Income ($20,518) $900 ($13,101)
$12,226
Add: Extraordinary item -
loss on debt
extinguishment 0 884 0 884
Depreciation and
Amortization of assets
related to real estate 3,878 2,718 11,721 8,432
Other depreciation and
amortization 60 25 179 79
Amortization of
deferred finance cost 722 215 1,543 287
Nonrecurring charges 15,000 0 15,000 0
Less: Gain on sale of real
estate 0 0 (345) 0
-------- -------- --------- --------
Funds From Operations ($858) $4,742 $14,997
$21,908
-------- -------- -------- --------
-------- -------- -------- --------
Funds From Operations
Per Share ($0.07) $0.40 $1.27
$1.85
-------- -------- -------- --------
-------- -------- -------- --------
New Definition
Net (Loss) Income ($20,518) $900 ($13,101)
$12,226
Add: Extraordinary item -
loss on debt
extinguishment 0 884 0 884
Depreciation and
Amortization of assets
related to real estate 3,878 2,718 11,721 8,432
Other depreciation and
amortization 0 0 0 0
Amortization of
deferred finance cost 0 0 0 0
Nonrecurring charges 15,000 0 15,000 0
Less: Gain on sale of real
estate 0 0 (345) 0
Straight line rents (49) (182) (626) (922)
-------- -------- -------- --------
Funds From Operations ($1,689) $4,320 $12,649
$20,620
-------- -------- -------- --------
-------- -------- -------- --------
Funds From Operations
Per Share ($0.14) $0.37 $1.07
$1.75
-------- -------- -------- --------
-------- -------- -------- --------
SECAUCUS, N.J. -- March 28, 1996 -- href="chap11.harvey.html">The Harvey
Group Inc. ("Harvey Electronics" or the "Company") announced
today
that it has completed negotiations for its plan of reorganization
which will be filed in the near future with the bankruptcy court.
In conjunction therewith, the company is pleased to note that
its investor group, its secured creditors and unsecured creditors'
committee have indicated their preliminary support for the proposed
plan of reorganization. Specific terms regarding the reorganization
and reemergence of the company will be disclosed upon the filing of
the plan.
Joseph Calabrese, chief financial officer, stated, "We are
pleased to have reached an agreement whereby Harvey Electronics can
continue to provide high-quality audio/video products and custom
installation to the community as it restructures into a healthier
company. Our bank, vendors and investor group continue to be
supportive in this endeavor. The company expects to obtain
confirmation of a plan and reemerge in or about June 1996."
Based in Secaucus, Harvey Electronics is an upscale specialty
retailer of high-quality audio/video consumer electronics and home
theater products. The company operates six retail stores in the New
York City metropolitan area.
CONTACT: The Harvey Group Inc.,
Joseph J. Calabrese;
201/865-3418;
Fax 201/865-0342
TAMPA, Fla., March 28, 1996 - href="chap11.walter.html">Walter Industries, Inc.
(Nasdaq: WLTR) today reported results for its fiscal third quarter
and nine months ended February 29, 1996.
Net sales and revenues for the recent quarter were $329.1
million compared with $338.7 million in the prior year quarter ended
February 28, 1995. Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA)for the quarter were $57.6 million versus
$74.5 million in the fiscal 1995 third quarter. Earnings are
reported on the basis of EBITDA to reflect the company's operating
performance before interest costs and goodwill amortization
expenses.
Results for the fiscal 1996 third quarter reflected higher sales
and profitability in the company's Homebuilding and Related
Financing segment and improved earnings from Industrial and Other
Products, primarily aluminum operations. These factors were offset
by a loss in the Natural Resources Group due to a previously
reported fire at its No. 5 mine and various other geological
problems which impacted the company's coal mining operations.
Profitability declined in Water and Waste Water Transmission
Products because of severe winter weather conditions and delays in
government funding for planned infrastructure projects, which
resulted in lower shipments of ductile iron pressure pipe and
related products. In addition, higher raw material costs continue
to impact the Group's margins.
The current quarter included a pre-tax charge of $143.3 million
($101.1 million after tax) related to early adoption of Statement of
Financial Accounting Standards No. 121 - "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" (FASB 121). Current quarter results also included an
extraordinary after-tax charge of $5.4 million, or $0.10 per share,
related to early repayment of 12.19% Senior Notes Due 2000 and
replacement of a $150 million bank credit facility. After the
effect of these items, the company incurred a net loss of $123.6
million, or $2.42 per share for the quarter, as compared with a
$233,000 loss in the prior year period.
FASB 121 requires companies to review long-lived assets and
certain identifiable intangibles for impairment whenever events or
changes in circumstances indicate that the carrying amount of such
assets may not be recoverable. In performing the review for
recoverability, companies are required to compare the expected
future cash flows to the carrying value of long-lived assets and
identifiable intangibles. If the sum of the expected future
undiscounted cash flows is less than the carrying amount of such
assets and intangibles, the assets are impaired and must be written
down to their estimated fair market value.
After performing a review for asset impairment at each of the
company's business segments, management determined that a non-cash
impairment charge of $120.4 million pre-tax ($78.2 million after
tax) was required at two of the company's coal mines to write down
the fixed assets to their estimated fair market values. Fair market
values were based principally on expected future discounted cash
flows. A $22.9 million non-cash write-off of goodwill was recorded
in the Industrial and Other Products Group, substantially all of
which was at JW Window Components. The FASB 121 charges do not have
any cash effect on the company's operations, either in the current
periods or future years. Going forward, the annual reduction in
depreciation expense and goodwill amortization will approximate $7
million and $2 million, respectively.
Net sales and revenues for the current nine months were $1.087
billion compared with net sales and revenues of $1.043 billion in
the prior year. EBITDA was $234.5 million versus $234.0 million in
the 1996 and 1995 nine month periods, respectively.
The company's Homebuilding and Related Financing Group generated
a 10% increase in EBITDA on a 1% increase in revenues in the third
quarter. The income gain reflected an increase in gross margins
versus last year due to higher average selling prices and lower
lumber costs. The company noted that it expects margins in
Homebuilding and Related Financing to remain at the higher level at
least for the near term. In December 1995 Jim Walter Homes, the
company's homebuilding subsidiary, reduced its financing rate to
8.5% from a previous 10% for its "90% complete" homes on a trial
basis. The lower rate initially has resulted in increased unit sales
and higher average selling prices. Jim Walter Homes' backlog was
1,700 units at the end of the quarter compared to 1,678 units in the
prior year period.
The Water and Waste Water Transmission Products Group's
operating results were impacted by the federal government's ongoing
budget debate and lack of action on key legislation. The
corresponding slowdown in demand due to funding delays for
infrastructure projects was exacerbated by unusually severe winter
weather conditions, which also prevented the start of several
private sector projects. The company anticipates that delays in
infrastructure spending for planned water and sewer pipeline
projects will continue for the near term leading up to the national
elections in November 1996. Additionally, the Group's results
continue to be affected by higher prices for raw materials.
EBITDA of the Industrial and Other Products Group increased 70%,
benefiting from strong demand and margin improvement in its JW
Aluminum and Sloss Industries subsidiaries. The company recently
approved a $7.5 million expansion program at JW Aluminum for fiscal
1997. The subsidiary has been operating at near capacity, and this
program, which was planned for fiscal 1998, has been accelerated to
prepare for expected increasing demand.
The Natural Resources Group's operating results reflected lower
shipments and higher production costs principally associated with
the previously described recurrence of hot spot conditions.
Firefighting and idle plant costs during the current quarter
approximated $14 million. As a result of the hot spot conditions,
the company has sealed-off the affected coal panels and is now
developing a new area of Mine No. 5 where coal reserves are
estimated to have an anticipated 15-year life at normal production
levels. The Group benefited from increased methane gas shipments
and a $3.5 million gain from the sale of excess real estate.
Interest expense in the third quarter increased by $17.0
million, or 48% over the same period last year, reflecting the
company's post-Chapter 11 capital structure. Interest expense in
the fiscal 1996 third quarter does not fully reflect the company's
refinancing completed on January 22, 1996, which is expected to
result in annualized interest savings of approximately $25 million,
or $0.28 per share.
Capital expenditures were $18.0 million in the third quarter and
$51.9 million in the fiscal 1996 nine month period, compared with
$22.5 million and $52.2 million, respectively, for the comparable
periods in 1995. These expenditures are indicative of the company's
commitment to ongoing investment in its businesses.
G. Robert Durham, Walter Industries' Chairman and Chief
Executive Officer, acknowledged that the mine fire and severe winter
weather restrained the company's operating performance in the third
quarter.
"On balance, however, we continue to view fiscal 1996 as a year
of transition following last year's successful conclusion of our
Chapter 11 reorganization," Mr. Durham said. "Certainly, the
elimination of our high-cost debt, the FASB 121 write-downs, the
changes ongoing within our senior management, and other strategic
operating decisions are actions that support our efforts to position
Walter Industries for sustainable, long-term growth."
As previously announced, Mr. Durham, 67, will retire from the
company effective May 31, 1996. He will be succeeded by Kenneth E.
Hyatt, 55, currently President and Chief Operating Officer.
Walter Industries, Inc., based in Tampa, Florida, is a
diversified, multi-subsidiary corporation with major interests in
two business areas: homebuilding and related financing and
industrial operations. Walter Industries and its subsidiaries employ
more than 7,800 at manufacturing facilities and sales offices
throughout the United States, generating sales and revenues in
excess of $1.4 billion annually.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Quarter Ended
February 29, February
28, ($ in thousands, except per share amount) 1996
1995
Net sales and revenues (a) $ 329,142 $336,793
Cost of sales 229,386 221,074
Depreciation 19,187 18,407
Selling, general and administrative 35,259 34,799
Postretirement health benefits 6,848 6,442
Amortization of goodwill 9,510 9,386
Impairment of long-lived assets (b) 143,265 --
Earnings before interest and taxes (114,313) 46,685
Chapter 11 costs, net (a)
-- 5,902
Interest 51,958
34,994
Pretax income (loss) (166,271)
5,789
Income tax benefit (expense) 48,112 (6,022)
Loss before extraordinary item (118,159) (233)
Extraordinary item - Loss on
debt repayment (5,404) --
Net loss $(123,563) $(233)
Net loss per share:
Loss before extraordinary item $(2.32) --
Extraordinary item (.10) --
Net loss $(2.42) NM (c)
Number of shares of common stock
used in calculation of net loss
per share 50,988,626 NM (c)
(a) Interest income from Chapter 11 proceedings ($1,898 in
1995) is excluded from sales and revenues and included in net
Chapter 11 costs for purposes of determining earnings before
interest and taxes.
(b) Charge resulting from adoption of FASB 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of."
(c) Not meaningful due to change in capital structure which
occurred as a result of the company's reorganization.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Nine Months Ended
February 29, February
28, ($ in thousands, except per share amounts) 1996
1995
Net sales and revenues (a) $1,087,426 $1,037,669
Cost of sales 729,013 682,930
Depreciation 56,629 53,094
Selling, general and administrative 103,515 101,236
Postretirement health benefits 20,370 19,524
Amortization of goodwill 29,479 30,270
Impairment of long-lived assets (b) 143,265 --
Earnings before interest and taxes 5,155 150,615
Chapter 11 costs, net (a) -- 14,760
Interest 161,451 107,747
Pretax income (loss) (156,296) 28,108
Income tax benefit (expense) 37,284 (21,988)
Income (loss) before extraordinary
item (119,012) 6,120
Extraordinary item - Loss on debt
repayment (5,404) --
Net income (loss) $(124,416) $6,120
Net loss per share:
Loss before extraordinary item $(2.34) --
Extraordinary item (.10) --
Net loss $(2.44) NM (c)
Number of shares of common stock
used in calculation of net loss
per share 50,988,626 NM (c)
(a) Interest income from Chapter 11 proceedings ($4,992 in
1995) is excluded from sales and revenues and included in net
Chapter 11 costs for purposes of determining earnings before
interest and taxes.
(b) Charge resulting from adoption of FASB 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of."
(c) Not meaningful due to change in capital structure which
occurred as a result of the company's reorganization.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
RESULTS BY OPERATING GROUP
($ in thousands)
SALES AND REVENUES:
Quarter Ended
February 29, February 28,
1996 1995
Homebuilding and Related Financing $100,062 $98,968
Water and Waste Water Transmission
Products 76,816 80,220
Natural Resources 84,047 88,167
Industrial and Other Products 67,711 69,226
Corporate 506 2,110
Total $329,142 $338,691
EBITDA: (c)
Homebuilding and Related Financing (b) $54,514 $49,579
Water and Waste Water Transmission
Products 2,754 5,841
Natural Resources (184)(a) 20,844
Industrial and Other Products 5,242 (a) 3,086
Corporate (4,677) (4,872)
Total $57,649 $74,478
(a) Excludes long-lived asset impairments of $120,400 and
$22,865 in the Natural Resources and Industrial and Other Products
Groups, respectively.
(b) Before deducting interest expense of $32,498 in 1996 and
$32,247 in 1995.
(c) Reflects addback of depreciation and amortization of
goodwill, as follows:
1996 1995
Homebuilding and Related Financing $8,257 $8,142
Water and Waste Water Transmission
Products 7,428 7,192
Natural Resources 10,327 9,910
Industrial and Other Products 3,533 3,352
Corporate (848) (803)
Total $28,697 $27,793
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
RESULTS BY OPERATING GROUP
($ in thousands)
SALES AND REVENUES: Nine Months Ended
February 29, February 28,
1996 1995
Homebuilding and Related Financing $303,528 $305,256
Water and Waste Water Transmission Products 306,372 295,243
Natural Resources 271,560 236,392
Industrial and Other Products 204,097 200,130
Corporate 1,869 5,640
Total $1,087,426 $1,042,661
EBITDA: (c)
Homebuilding and Related Financing (b) $163,710 $155,281
Water and Waste Water Transmission
Products 33,444 34,600
Natural Resources 32,893 (a) 42,852
Industrial and Other Products 17,271 (a) 13,240
Corporate (12,790) (11,994)
Total $234,528 $233,979
(a) Excludes long-lived asset impairments of $120,400 and
$22,865 in the Natural Resources and Industrial and Other Products
Groups, respectively.
(b) Before deducting interest expense of $96,747 in 1996 and
$94,564 in 1995.
(c) Reflects addback of depreciation and amortization of
goodwill, as follows:
1996 1995
Homebuilding and Related Financing $25,676 $26,529
Water and Waste Water Transmission
Products 21,934 21,446
Natural Resources 30,327 27,995
Industrial and Other Products 10,633 9,849
Corporate (2,462) (2,455)
Total $86,108 $83,364
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ in thousands)
February 29, February 28,
1996 1995
Cash and short-term investments $66,749 $204,959
Short-term investments, restricted 157,304 88,650
Installment notes receivable 4,232,492 4,232,403
Less - Provision for possible losses (26,301) (26,471)
Unearned time charges (2,865,532) (2,846,660)
Trade and other receivables 149,818 146,753
Federal income tax receivable 99,875 --
Inventories 202,524 183,812
Prepaid expenses 13,481 17,137
Property, plant and equipment, net 529,482 647,257
Excess of purchase price over net assets
acquired (goodwill) 320,552 382,653
Deferred income taxes 57,778 --
Other assets 81,689 68,454
Total $3,019,911 $3,098,947
Bank overdrafts, accounts payable and
accrued expenses $196,463 $202,660
Income taxes 53,137 32,160
Deferred income taxes -- 54,783
Long-term senior debt 2,212,608 784,815
Accrued interest 27,332 298,557
Accumulated postretirement health
benefits obligation 243,133 225,769
Other long-term liabilities 50,882 48,221
Liabilities subject to Chapter 11
proceedings -- 1,728,215
Stockholders' equity (deficit) 236,356 (276,233)
Total $3,019,911 $3,098,947
SEATTLE, WA -- March 28, 1996 -- Alliance Northwest
Industries Inc. announced today that its principal operating
subsidiary, Seattle Lighting Fixture
Co., filed a petition for reorganization under Chapter 11 of the US
Bankruptcy Code on March 21, 1996.
Jim Scarborough, president and chief executive officer of
Seattle Lighting, attributed the filing to cash shortages stemming
from a reduction in sales due to continued declines in housing
starts in the Metropolitan King County area where the majority of
the company's operations are centered.
According to statistics published by the Master Builders
Association of King and Snohomish Counties, the number of new single-
family home permits in King County declined 29% in 1995 vs. 1994.
Seattle Lighting was founded in 1917. Its 200 employees serve
retail, builder-contractors, and commercial customers from six
locations in the greater Puget Sound area. Additionally Seattle
Lighting operates under the name Builders Lighting with stores in
Vancouver, Wash.; Gresham, Lake Oswego and Salem, Ore., and Boise,
Idaho.
Seattle Lighting will continue its operations under current
management as debtor in possession and plans to emerge from Chapter
11 as quickly as possible as a stronger and more vibrant company.
Alliance Northwest Industries, the parent of Seattle Lighting is
also considering the filing of a bankruptcy petition and will make
such a determination by April 15, 1996.
CONTACT: Alliance Northwest Industries Inc.
Jim Scarborough, 206/689-9444
ATLANTA, March 28, 1996 - Anacomp,
Inc. today announced
that the U.S. Bankruptcy Court in Delaware has approved the
company's disclosure statement on a financial restructuring plan.
The court approval gives Anacomp the go-ahead to distribute the
disclosure statement to certain of the company's creditors and
preferred stockholders and to solicit their votes on the refinancing
plan. The plan provides for Anacomp's current debt and accrued
unpaid interest and dividends (including preferred stock) to be
reduced by approximately $175 million.
The refinancing plan is the outgrowth of a consensual agreement-
in- principle reached last month between Anacomp and all of its
major creditor groups. The company believes the support of these
groups provides sufficient votes for the confirmation of the plan.
The court set a date of May 17, 1996 for a confirmation hearing
on Anacomp's refinancing plan, which assuming approval would permit
Anacomp to emerge from Chapter 11 by the end of May.
Anacomp filed a pre-negotiated plan of reorganization under
Chapter 11 of the United States Bankruptcy Code on January 5, 1996.
Since then, the company's business operations have continued as
normal. The refinancing plan retains the company's commitment to
continue to pay its vendors on normal trade terms and to honor all
obligations to customers.
Anacomp is a leading provider of multiple-media data management
solutions, delivering cost-effective strategies that incorporate
micrographic, digital, and magnetic output media.
CONTACT: Jeff Withem, Corporate Communications, 404-876-3361, ext.
8527, or Nancy Vandeventer, Investor Relations, 800-350-3044, both
of Anacomp, Inc.