RANCHO CORDOVA, Calif. -- July 25, 1996 -- EndoSonics Corporation (NASDAQ-ESON) reported today that
revenues for the second quarter increased 75% to $7.1 million,
compared to $4.0 million for the second quarter of 1995. The
principal reasons for this increase are: continued growth in demand
for intravascular ultrasound (IVUS) products both in the U.S. and
overseas markets; increased sales through the Company's agreement
with Cordis Corporation (now a subsidiary of Johnson & Johnson); and
growth at the Company's CardioVascular Dynamics, Inc. (CVD)
subsidiary which produces non-ultrasound, advanced therapeutic
catheters. Revenues for the first half of 1996 increased to $12.8
million from $6.8 million -- an 89% increase over 1995 results.
The Company's net loss for the second quarter of 1996 was $4.4
million ($0.33 per share) compared with $3.3 million ($0.33 per
share) in the second quarter of 1995. Non-recurring expenses of
$3.0 million were taken in the second quarter of 1996. Adjusting
for these previously announced expenses (June 20, 1996) would result
in a loss of $1.4 million ($0.10 per share) for the quarter. The
non-recurring $3.0 million expenses are associated with the
consolidation of the Company's IVUS operations and with the start-up
production of the new Five-64 imaging catheters. The net loss for
the Company in the first six months of 1996 was reduced to $5.6
million ($0.42 per share) from $6.5 million ($0.65 per share) in
1995. Adjusting for the $3.0 million non-recurring expenses would
result in a loss of $2.6 million ($0.20 per share).
After adjusting for the effect of the $3.0 million of non-
recurring expenses, the decrease in loss for the quarter as compared
with a year ago is due to improved product margins as the Company
realized better manufacturing efficiencies from higher production
levels. Although the Company continued to invest in research and
development and build its manufacturing and marketing capabilities,
operating expenses were reduced as a percentage of revenues.
On June 19, 1996, CVD successfully completed an Initial Public
Offering (IPO) of 3,400,000 shares at $12 per share, followed by an
additional 510,000 shares issued in July 1996 (over-allotment option
granted to CVD's underwriters). EndoSonics currently owns 46% of
the outstanding shares of CVD (49% as of June 30, 1996). This
transaction is key to EndoSonics' strategy of focusing on
applications of its ultrasound technology and will provide funding
for CVD to aggressively pursue its business plan.
Prior to the IPO, CVD's financial statements were consolidated
with those of the Company. On June 20, 1996, the company began
using the equity method of accounting to reflect the results of CVD
in its financial statements. Revenues for IVUS products were $5.4
million and losses associated with this business were $0.6 million
for the second quarter of 1996 before the adjustment for the $3.0
million of non-recurring expenses; $3.6 million in losses after the
adjustment.
Commenting on these results, Reinhard Warnking, EndoSonics'
President and Chief Executive Officer stated, "We are pleased with
the strong increase in IVUS revenues. During the quarter we
launched our In-Vision user interface and are working on a variety
of other enhancements which make our products easier to use while
taking full advantage of our all-electronic, all-digital platform
and superior image quality. The ramp-up of the new Five-64 imaging
catheter at the Rancho Cordova facility is on schedule and we are
producing and shipping imaging systems at record levels."
EndoSonics Corporation develops and markets intravascular
imaging systems, diagnostic imaging catheters and combined
angioplasty/imaging catheters. CardioVascular Dynamics, Inc.
develops and markets site-specific drug delivery catheters, combined
angioplasty/drug delivery catheters and advanced therapeutic
catheters.
This press release contains forward-looking statements that
involve risks and uncertainties. The Company's actual results may
differ significantly from the results discussed in the forward-
looking statements. For a discussion of factors that might result
in different outcomes, see the Company's Form 10-K filed with the
Securities and Exchange Commission on April, 1, 1996.
ENDOSONICS CORPORATION
FINANCIAL RESULTS -- SECOND QUARTER 1996
(In Thousands, except share and per share amounts)
(Unaudited)
Second Quarter Six Months
1996 1995 1996 1995
Sales Revenues $7,101 $4,048 $12,773
$6,770
Net Loss ($4,388)(a) ($3,281) ($5,627)
($6,514)
Net Loss per Share ($0.33) ($0.33) ($0.42)
($0.65)
Shares used in the
calculation of net
loss per share 13,448,205 10,027,619 13,271,181 10,007,385
CONTACT: EndoSonics Corp.
Donald D. Huffman, 916/638-8008
PLEASANTON, Calif. -- July 25, 1996 -- Hexcel Corp.
(NYSE/PSE: HXL) today reported results for the second quarter ended
June 30, 1996.
Results for the second quarter of 1996 include the composites
business acquired from Ciba-Geigy Limited and Ciba-Geigy Corp.
(collectively, "Ciba") on Feb. 29, 1996, but do not reflect the
composite products business acquired from Hercules Incorporated
("Hercules") on June 27, 1996. Net sales for the quarter were
$166.8 million, compared with net sales for the second quarter of
1995 of $91.0 million. Excluding sales attributable to the business
operations acquired from Ciba, sales for the second quarter of 1996
were approximately $98 million. Gross margin for the 1996 quarter
was $35.2 million, or 21.1 percent of sales, compared with gross
margin for the 1995 quarter of $18.1 million, or 19.8 percent of
sales.
Hexcel incurred a net loss of $23.7 million in the second
quarter of 1996, or $0.65 per share, compared with net income of
$1.8 million in the second quarter of 1995, or $0.10 per share. The
1996 quarter includes a previously announced charge for business
acquisition and consolidation activities of $29.2 million (of which
$9.3 million was for non-cash write-downs). The business
consolidation is intended to integrate acquired assets and
operations into Hexcel, reorganize the Company's manufacturing and
research activities around strategic centers dedicated to select
product technologies, and eliminate excess manufacturing capacity
and redundant administrative functions.
The total expense of this consolidation program, which is
expected to take up to three years to complete, is estimated to be
approximately $49 million. This estimate includes $5.2 million of
expenses incurred in the first quarter of 1996 and another $15
million of expenses to be recorded in future periods, as well as the
$29.2 million charge recorded in the second quarter of 1996.
For the year-to-date ended June 30, 1996, net sales were $293.2
million, compared with $176.2 million for the comparable period of
1995. Excluding sales attributable to the business operations
acquired from Ciba, sales for the first half of 1996 were
approximately $197 million.
Gross margin for the first half of 1996 was $62.0 million, or
21.1 percent of sales, versus gross margin for the same period of
1995 of $32.9 million, or 18.6 percent of sales. The 1996 year-to-
date net loss was $21.8 million, or $0.72 per share, including $34.4
million of business acquisition and consolidation expenses and $3.0
million of other income.
The net loss for the first half of 1995 was $0.7 million, or
$0.05 per share, including bankruptcy reorganization expenses of
$3.0 million.
On July 24, 1996, Hexcel completed an offering of $114.5 million
in convertible subordinated notes due in 2003, including $14.5
million in notes sold to the underwriters pursuant to the exercise
of an over-allotment option.
The convertible subordinated notes carry an annual interest rate
of 7 percent and are convertible into Hexcel common stock at a
conversion price of $15.81 per share. As a result of the issuance
of the convertible subordinated notes, maximum availability under
the Company's revolving credit facility was reduced from $310
million to approximately $250 million, in accordance with the terms
of that facility.
John J. Lee, chairman and chief executive officer of Hexcel,
said: "After adjusting for the impact of the business acquisition on
Feb. 29, 1996, the Company's second-quarter results reflect a
continuation of the sales and gross margin performance achieved in
the first quarter of the year.
"Hexcel continued to benefit from increased sales volumes,
particularly to the commercial aerospace market, and from improved
manufacturing productivity. The performance of the Company's
Composite Materials and Special Process business units was
especially encouraging and reflects Hexcel's leading position in the
manufacture and machining of composite materials and parts."
Lee went on to say: "The costs of integrating the businesses
acquired from Ciba and Hercules will be substantial, as evidenced by
the $29.2 million charge taken in the second quarter. However, I
believe that these acquisitions have significantly enhanced Hexcel's
competitiveness, improving our ability to control the cost, quality
and delivery of our products, and our ability to market those
products to a broad range of customers throughout the world.
"In addition, through the successful sale of the convertible
subordinated notes, the Company has secured the financial resources
necessary not only to integrate the acquired businesses, but also to
respond to future challenges and opportunities. The sale of these
notes, along with the new revolving credit facility, has enhanced
Hexcel's financial flexibility and revealed a considerable degree of
investor interest in the Company. All in all, the long-term outlook
for Hexcel is encouraging."
Hexcel Corp. is an international developer and manufacturer of
lightweight, high-performance composite materials, parts and
structures for use in the commercial aerospace, space and defense,
recreation and general industrial markets.
Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Unaudited
The Quarter Ended The Year-to-Date Ended
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
Net sales $166,770 $91,023 $293,188 $176,178
Cost of sales (131,582) (72,968) (231,217) (143,328)
Gross margin 35,188 18,055 61,971 32,850
Selling, general and
administrative expenses (23,879) (12,106) (41,361) (24,272)
Business acquisition and
consolidation expenses (29,209) 0 (34,420) 0
Other income, net 288 0 2,985 0
Operating income (loss) (17,612) 5,949 (10,825) 8,578
Interest expense (4,849) (2,079) (8,482) (4,442)
Bankruptcy reorganization
expenses 0 (826) 0 (2,951)
Income (loss) from
continuing operations
before income taxes (22,461) 3,044 (19,307) 1,185
Provision for income taxes (1,206) (1,094) (2,512) (1,604)
Income (loss) from
continuing operations (23,667) 1,950 (21,819) (419)
Discontinued operations:
Losses during
phase-out period 0 (185) 0 (297)
Net income (loss) $(23,667) $1,765 $(21,819) $(716)
Net income (loss) per share
and equivalent share:
Primary and fully diluted:
Continuing operations $(0.65) $0.11 $(0.72) $(0.03)
Discontinued operations 0.00 (0.01) 0.00 (0.02)
Net income (loss) $(0.65) $0.10 $(0.72) $(0.05)
Weighted average shares
and equivalent shares 36,547 18,007 30,483 13,391
ANAHEIM, Calif. -- July 25, 1996 -- The Clothestime
Inc. (NASDAQ:CTMEQ) Thursday announced that its common stock,
trading under the symbol CTMEQ, is scheduled to be delisted from the
NASDAQ Stock Market Inc. effective with the opening of business on
Friday, July 26, 1996, because the company no longer complies with
the criteria established by the NASDAQ Stock Market for continuation
of listing.
The company continues to operate its business maintaining high
levels of liquidity currently averaging in excess of $15 million.
As a result, the company has not used its debtor-in-possession
financing facility of up to $25 million, except to provide letters
of credit.
Although its securities will be delisted from the NASDAQ Stock
Market, to the extent market makers in the company's stock continue
to enter bids, the company's common stock will be quoted in the OTC
Bulletin Board or, in the alternative, in the National Quotation
Bureau's Pink Sheets. There is, however, no assurance that this
will occur.
On Dec. 8, 1995, the company and five of its subsidiaries filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code. The company is in the process of developing a long-
term business plan around which the framework of a plan of
reorganization will be developed.
The company cannot, at the present time, predict contents of any
proposed plan of reorganization, or when or whether it will be
accepted by the creditors or approved by the Bankruptcy Court.
It is the company's hope that a successful implementation of a
plan of reorganization will allow the company to be in a position to
reapply for listing of its common stock on the NASDAQ Stock Market
or another national exchange.
The Clothestime Inc. currently operates approximately 370
women's apparel stores in 17 states and Puerto Rico, offering
primarily in-season, moderately priced, brand-name and private-label
sportswear, dresses and accessories at a discount from the upscale
department and specialty stores.
CONTACT: The Clothestime Inc.
Andrew G. Tepper, 714/779-5881, Ext. 2260 or 2200
CHATTANOOGA, TN -- July 25, 1996 -- The Krystal Company
(Nasdaq-NNM: KRYSQ), an operator and franchisor of quick-service
hamburger restaurants, today reported net income for its second
quarter ended June 30, 1996, of $426,000, or six cents per share
versus net income of $1,215,000, or 16 cents per share for the
second quarter of 1995. Administrative costs associated with the
Company's Chapter 11 bankruptcy proceeding, initiated on December
15, 1995, were $545,000 pre-tax and $338,000 after-tax, or four
cents per share. Without these costs, net income would have been
$764,000, or 10 cents per share. Following a first quarter loss of
10 cents per share, the Company reported a net loss for the six
months ended June 30, 1996, of $320,000, or four cents per share.
Year to date bankruptcy administrative costs were $1,512,000 pre-tax
and $937,000 after-tax, or 12 cents per share. Without these costs,
six months net income would have been $617,000, or eight cents per
share versus $1,542,000 in the same period last year, or 21 cents
per share. According to Carl D. Long, Chief Executive Officer of
The Krystal Company, the persistent heavy discounting and new
product introductions, throughout the industry continue to be the
primary contributors to the Company's soft sales and profitability.
Total quarterly revenues were $60.9 million, down approximately
4.1% from 1995's second quarter. Total year to date revenues were
$118.6 million, compared with the $121.7 million in 1995.
Restaurant sales for the quarter decreased 3.9% to $58.9 million.
Restaurant sales for the first six months of 1996 were $114.7
million compared to $117.3 million for 1995.
Company-owned average same restaurant sales for the quarter were
down 2.6% versus the same 1995 period. For the first six months of
1996, the average same restaurant sales were down 2.0% versus the
same period in 1995. The Company had 251 restaurants, open at the
end of the second quarter of 1996 compared to 255 at the end of the
second quarter of 1995.
The Company opened no new restaurants in the first six months of
1996 versus six in the first six months of 1995. Franchisees opened
five new restaurants in the first six months of 1996 compared to
seven in the first six months of 1995.
Second quarter revenues included franchise fees and royalties of
$779,000 compared with $740,000 in the second quarter of 1995, an
increase of 5.3%. Year to date franchise fees and royalties were
$1,430,000 compared with $1,317,000 through the same period in 1995,
an increase of 8.6%. Krystal began franchising in late 1990 and had
84 franchised restaurants in operation at the end of the second
quarter 1996 compared to 69 at the end of the second quarter 1995.
Sales by franchisees were $15.2 million for the quarter, up 18.4%
over the same period in 1995. Year to date sales by franchisees
were $28.8 million, up 19.1% over the same period in 1995.
On December 15, 1995, the Company filed a voluntary petition
under Chapter 11 of the United States Bankruptcy Code for the
purpose of completely and finally resolving various claims filed
against the Company by current and former employees alleging
violations of the Fair Labor Standards Act. The Company is a debtor-
in-possession for purposes of the bankruptcy case. Approximately
8,000 current or former employees have filed claims, mostly in
unspecified amounts, alleging that they worked time for which they
were not compensated. The Company expects to contest any claims
which it believes to be invalid. The Company's period of
exclusivity to file a Chapter 11 Plan of Reorganization expires
August 15, although the Company has filed a motion seeking to extend
this period of exclusivity. Four previously disclosed lawsuits
filed against the Company under the FLSA have been stayed by the
bankruptcy filing. Company management currently believes that the
reserve previously established with respect to the FLSA claims is
adequate to resolve these claims. However, due to the uncertainty
surrounding the ultimate number and amount of employee claims,
additional reserves may be required in the near term. The Company
is recording the known administrative costs of the Chapter 11
proceeding as they are determined.
The Krystal Company operates 251 restaurants in Alabama,
Arkansas, Florida, Georgia, Kentucky, Mississippi, South Carolina,
and Tennessee. Krystal franchisees operate 84 restaurants located in
Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana,
Mississippi, North Carolina, South Carolina, Tennessee, and
Virginia.
Founded in 1932, Krystal is one of the oldest fast-food chains
in the United States. The Krystal Company's common stock is traded
on the Nasdaq National Market System under the symbol KRYSQ.
Second Quarter: 1996 1995
Revenues $60,903,000 $63,501,000
Net income before the effect of
reorganization item(a) $ 764,000 $ 1,215,000
Net income $ 426,000 $ 1,215,000
Average shares 7,492,000 7,511,000
Net income per share before the
effect of reorganization item(a) $ .10 $ .16
Net income per share $ .06 $ .16
Six Months: 1996 1995
Revenues $118,570,000 $121,697,000
Net income before the effect of
reorganization item(a) $ 617,000 $ 1,542,000
Net income (loss) $ (320,000) $ 1,542,000
Average shares 7,507,000 7,510,000
Net income per share before the
effect of reorganization item(a) $ .08 $ .21
Net income (loss) per share $ (.04) $ .21
(a) Reorganization item represents legal and professional fees
and administrative costs incurred in connection with Chapter 11
proceeding.
KRYSTAL COMPANY & SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands)
6/30/96 12/31/95
ASSETS (Unaudited) (Audited)
Current Assets:
Cash and temporary investments $ 19,961 $ 13,713
Receivables 1,996 1,752
Income tax receivable 888 609
Net investment in direct financing leases -
current portion 770 856
Inventories 2,034 2,322
Deferred tax asset 5,553 5,553
Prepayments and other 1,272 830
Total current assets 32,474 25,635
Net investments in direct financing leases,
excluding current portion 532 867
Property, buildings and equipment, net 94,442 98,546
Leased properties, net 1,756 1,863
Other assets:
Cash surrender value of life insurance 5,332 5,117
Other 742 667
Total other assets 6,074 5,784
Total assets $135,278 $132,695
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,163 $ 1,681
Accrued liabilities 13,170 9,427
Current portion of long-term debt 751 432
Current portion of capital lease obligations 588 653
Total current liabilities 17,672 12,193
Liabilities Subject to Compromise 54,366 56,909
Long-term debt, excluding current portion 3,273 3,621
Capital lease obligations, excluding current
portion 2,479 2,754
Deferred income taxes 2,719 2,719
Other long-term liabilities 8,269 7,852
Shareholders' equity:
Preferred stock, without par value; 5,000,000
shares authorized; no shares issued or
outstanding --- ---
Common stock, without par value; 15,000,000
shares authorized; shares issued and
outstanding, 7,491,768 at June 30, 1996
and 7,526,808 at Dec. 31, 1995 40,556 40,830
Retained earnings 7,875 8,195
Deferred compensation (1,931) (2,378)
Total shareholders' equity 46,500 46,647
Total liabilities and shareholders' equity $135,278 $132,695
NOTE: This is not a complete set of financial statements.
THE KRYSTAL COMPANY AND SUBSIDIARY
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
3 mos. ended 6 mos. ended
6/30/96 7/2/95 6/30/96 7/2/95
Revenues:
Restaurant sales $58,867 $61,269 $114,743 $117,309
Franchise fees 89 163 122 228
Royalties 690 577 1,308 1,089
Other revenue 1,257 1,492 2,397 3,071
Total 60,903 63,501 118,570 121,697
Costs and expenses:
Cost of restaurant sales 48,471 49,942 95,240 96,610
Deprec. and amort. expense 2,800 3,121 5,602 6,071
Gen. and admin. expenses 6,549 6,465 12,989 12,477
Other expenses, net 988 1,155 1,951 2,365
Total 58,808 60,683 115,782 117,523
Operating income 2,095 2,818 2,788 4,174
Reorganization Item:
Professional fees and other
expenses (545) --- (1,512) ---
Interest expense (1,004) (1,026) (2,013) (2,116)
Interest income 144 166 226 430
Income (loss) before provision
for (benefit from) income
taxes 690 1,958 (511) 2,488
Provision for (benefit from)
income taxes 264 743 (191) 946
Net income (loss) $ 426 $ 1,215 $ (320) $ 1,542
Earnings (loss) per
common share $ 0.06 $ 0.16 $ (0.04) $ 0.21
Wtd. avg. number of common
shares outstanding 7,492 7,511 7,507 7,510
NOTE: This is not a complete set of financial statements.
Certain reclassifications were made to interest expense and interest
income in the second quarter of 1996.
MIDLAND, Mich., -- July 25, 1996 -- The following was
released by Dow Chemical Company (NYSE: DOW):
Second Quarter of 1996 Highlights
(In millions, except for per share amounts)
3 Months Ended 6 Months Ended
June 30 June 30
1996 1995 1996 1995
Net Sales $5,176 $5,517 $10,158 $10,722
Operating Income $ 896 $1,207 $ 1,764 $ 2,282
Income from Continuing
Operation $ 546 $ 334 $ 1,022 $ 898
Earnings per Common
Share from Continuing
Operations $ 2.20 $ 1.22 $ 4.10 $ 3.25
Earnings Per Common
Share $ 2.20 $ 1.84 $ 4.10 $ 3.94
Review of Quarterly Results
The Dow Chemical Company today announced sales of $5.2 billion
and operating income of $896 million for the second quarter of 1996.
Total earnings were $2.20 per share, the highest since 1989.
"This was a strong quarter and we are on track for another good
year," said J. Pedro Reinhard, financial vice president and chief
financial officer. "Volume was up and we benefited from our
continued productivity improvements. We are particularly pleased
with the continued growth in our Performance Chemicals and
Performance Plastics segments, which now account for over half of
the company's operating income."
Sales for the quarter of $5.2 billion were off 6 percent from
$5.5 billion during the same period a year ago. Operating income
was $896 million compared to $1.2 billion in the second quarter of
1995. Despite a 10 percent decrease from very high pricing levels a
year ago, operating income as a percent of sales declined by only
4.6 percentage points reflecting the impact of volume gains, growth
in the Performance Chemicals and Performance Plastics segments, and
continued productivity improvements.
Total earnings were $2.20 per share compared to $1.84 per share
for the same period last year. In the second quarter of 1995, Dow's
earnings were impacted by a gain on the sale of Dow's pharmaceutical
businesses of 62 cents per share and a charge of $1.24 per share
related to Dow Corning's filing for protection under Chapter 11 of
the United States Bankruptcy Code. Excluding these items, Dow's
earnings per share in the second quarter of 1995 were $2.46.
Chemicals and Metals posted sales of $790 million and operating
income of $205 million, compared to sales of $899 million and
operating income of $313 million in the second quarter of 1995.
Lower prices were the primary reason for the sales and earnings
declines in this segment.
Performance Chemicals sales were $1.2 billion, flat with a year
ago. Operating income was $237 million compared to $259 million in
the second quarter of 1995. Both the Specialty Chemicals and
Emulsion Polymers businesses had strong quarters posting higher
earnings compared to the same period last year. This is the tenth
consecutive quarter that Specialty Chemicals has posted a sales
increase versus the previous year. Unfavorable climatic conditions,
primarily in North America, negatively impacted sales and earnings
for Agricultural Chemicals.
Plastics sales were $966 million down 12 percent from $1.1
billion in the second quarter of 1995. Operating income was $223
million, down from $467 million for the same period last year. The
strong volume growth experienced in this segment was not enough to
offset the substantial price declines versus a year ago.
Polyethylene prices globally have been trending upward since the
beginning of the year and polystyrene prices have risen in Europe,
reversing the general pricing decline for Plastics.
Performance Plastics posted sales of $1.4 billion, down slightly
from the same period a year ago, reflecting the transfer of Dow's
elastomers business to DuPont Dow Elastomers L.L.C. However,
operating income was up 25 percent to $325 million from $261 million
in the second quarter of 1995. Polyurethanes, Epoxies, Engineering
Plastics, Fabricated Products and the Adhesives, Sealants and
Coatings businesses all reported higher earnings than a year ago.
These results demonstrate the value of the company's continued focus
on these businesses.
Hydrocarbons and Energy sales were $595 million, down 15 percent
from $697 million in the second quarter of 1995. The segment
experienced an operating loss of $20 million, about flat with a year
ago.
The Diversified Businesses and Unallocated segment posted sales
of $276 million, up 10 percent from $252 million a year ago. The
segment recorded a loss of $74 million, about equal to the second
quarter of 1995. DowBrands experienced its fourth consecutive
profitable quarter reflecting successful restructuring efforts.
In the second quarter of 1996, Dow repurchased 6 million shares,
bringing the year-to-date total to 10 million shares. This
completed the repurchase program of 25 million shares initiated in
July 1995. In July 1996, the company authorized an additional
program to repurchase a further 20 million shares. Since the
beginning of 1995, Dow has bought back 39 million shares, or about
15 percent of its outstanding shares.
"The overall global economic scenario is improving. Growth in
North America is stable, economic activity is increasing in Japan,
and we have seen the first indicators of an upward move in Europe,"
said Reinhard. "The inventory correction is over and the pricing
environment for many of our key products has improved. These
factors, combined with our on- going productivity initiatives and
business portfolio restructuring, should result in another good year
for Dow."
The Dow Chemical Company and Subsidiaries
Consolidated Statements of Income
In millions, except for share amounts
Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
1996 1995 1996 1995
Net Sales $5,176 $5,517 $10,158 $10,722
Operating Costs and Expenses
Cost of sales 3,539 3,571 6,923 6,897
Insurance and finance company
operations, pretax income (14) (9) (36) (22)
Research and development
expenses 194 193 385 406
Promotion and advertising
expenses 102 109 187 226
Selling and administrative
expenses 446 437 913 913
Amortization of intangibles 13 9 22 20
Total operating costs and
expenses 4,280 4,310 8,394 8,440
Operating Income 896 1,207 1,764 2,282
Other Income (Expense)
Equity in earnings of 20%-50%
owned companies 24 15 40 40
Interest expense and amortization
of debt (118) (98) (242) (199)
Interest income and foreign
exchange-net 75 35 150 73
Net loss on investment (Note B) 0 (330) 0 (330)
Sundry income - net 62 3 110 14
Total other income (expense) 43 (375) 58 (402)
Income before Provision for Taxes
on Income 939 832 1,822 1,880
Provision for Taxes on Income 344 420 670 834
Minority Interests' Share
in Income 48 77 127 145
Preferred Stock Dividends 1 1 3 3
Income from Continuing
Operations $546 $334 $1,022 $898
Discontinued Operations
Income from pharmaceutical business, net
of taxes on income 0 0 0 18
Gain on sale of pharmaceutical business,
net of taxes on income (Note C) 0 169 0 169
Net Income Available for
Common Stockholders $546 $503 $1,022 $1,085
Average Common Shares
Outstanding 247.7 273.5 249.3 275.2
Earnings per Common Share from
Continuing Operations $2.20 $1.22 $4.10 $3.25
Earnings per Common Share $2.20 $1.84 $4.10 $3.94
Common Stock Dividends Declared
per Share $0.75 $0.75 $1.50 $1.40
Depreciation $308 $309 $616 $668
Capital Expenditures $341 $575 $605 $778
Note A: The unaudited interim financial statements reflect all
adjustments (consisting of normal recurring accruals) which, in the
opinion of management, are considered necessary for a fair
presentation of the results for the periods covered. Certain
reclassifications of prior year amounts have been made to conform to
current year presentation. These statements should be read in with
the financial statements and notes thereto included in the Company's
Form 10-K for the year ended December 31, 1995.
Note B: In May 1995, Dow Corning Corporation filed for
protection under Chapter 11 of the United States Bankruptcy Code.
The Company is a 50 percent shareholder in Dow Corning Corporation.
As a result of Dow Corning's Chapter 11 filing and its 1995 second
quarter loss, the Company recognized a pretax charge against income
of $330 million, fully reserved its net investment in Dow Corning
and will not recognize its 50 percent share of future equity
earnings while Dow Corning remains in Chapter 11. The charge
impacted the Company's second quarter of 1995 earnings by $1.24 per
share.
Note C: In June 1995, the Company sold its 197 million shares
of Marion Merrell Dow to Hoechst for $5.1 billion or $25.75 per
share. In addition, subsidiaries of the Company sold the Company's
Latin American pharmaceutical business based in Argentina, Brazil
and Mexico to Roussel Uclaf S.A. for $133 million. These two
transactions, net of taxes on income of $382 million, increased the
Company's second quarter of 1995 earnings by $169 million or 62
cents per share.
CONTACT: Darlene MacKinnon of The Dow Chemical Company,
517-636-2876
NEWHALL, Calif., July 24, 1996 -- Huntway Partners, L.P.
(NYSE: HWY) today filed a Consent Solicitation Disclosure Statement
and related consent materials with the Securities and Exchange
Commission (SEC) in connection with its previously announced debt
restructuring plan.
The debt restructuring plan has been approved by four of its
five senior lenders, representing 86% of Huntway's senior debt, as
well as the two holders of junior debt. Because the remaining
holder of 14% of Huntway's senior debt has still not agreed to the
restructuring plan, the partnership has concluded that it will seek
to accomplish the debt restructuring plan through a "prepackaged"
reorganization plan with the U.S. bankruptcy court. The consent
solicitation materials filed today with the SEC seek the approval by
common unitholders of the prepackaged reorganization plan and
certain other matters. The partnership anticipates that it will
distribute definitive consent solicitation materials to common
unitholders promptly following the applicable SEC review period.
Any such prepackaged plan will provide for the continuing and timely
payments in full of all of the partnership's obligations to
suppliers, other trade creditors and employees under normal trade
terms.
As previously announced, the debt restructuring plan will reduce
total indebtedness to $25.6 million from $95.5 million effective
January 1, 1996.
Accordingly, upon closing, debt will be reduced by approximately
$70 million, resulting in positive unitholder equity of
approximately $40 million, while annual interest expense will be
reduced approximately $2 million. Under the agreement, the new debt
will mature on December 31, 2005 and will amortize over years three
through ten of the agreement. No cash interest or principal
payments are required to be paid in 1996 under the agreement.
As consideration for the restructuring, the partnership will
issue approximately 13.8 million new common units to its lenders,
including approximately 1.1 million to its junior debt holders as
part of this transaction. Huntway currently has approximately 11.6
million common units outstanding. Additionally, the partnership
will retire approximately 3.9 million warrants previously
distributed to the lenders. The agreement specifies that management
will be issued new options for 10% of the company on a fully-diluted
basis (inclusive of approximately one million options already
issued) at a strike price of $.50 a unit.
Commenting on the announcement, Huntway's Executive Vice
President and Chief Financial Officer, Warren Nelson, said that,
"The filing of the consent solicitation materials today with the SEC
is another step forward in achieving our goal of completing the debt
restructuring plan. The next step will be to solicit unitholder
approval, to be followed by completing the transaction with the U.S.
bankruptcy court, which now appears to be likely given the inability
to reach a consensual agreement with all of our senior lenders."
Huntway Partners, L.P. owns and operates two refineries at
Wilmington and Benicia, California, which primarily process
California crude oil to produce liquid asphalt for use in road
construction and repair, as well as smaller amounts of gas oil,
naphtha, kerosene distillate and bunker fuels. The company's third
refinery, at Coolidge, Arizona, is shut down although it may be
reopened as a terminal in 1997 or beyond.
The company's preference units are traded on the New York Stock
Exchange under the symbol HWY.
CONTACT: Warren J. Nelson, Executive Vice President and Chief
Financial Officer or Earl Fleisher, Controller, both of Huntway
Partners, L.P., 805-286-1582
MARIETTA, Ga., July 25, 1996 -- MATRIA HEALTHCARE, INC.
(Nasdaq: MATR) today announced its financial results for the Second
Quarter and Six Months ended June 30, 1996. The Second Quarter
represents Matria's first full quarter of operations since the
merger (the "Merger") of Tokos Medical Corporation and Healthdyne,
Inc. (whose sole remaining operating unit was Healthdyne Maternity
Management) on March 8, 1996.
Revenues of $35.6 million in the Second Quarter of 1996 for
Matria, produced a net profit of $120,000 before deduction of $8.7
million, or $0.25 per share, of goodwill amortization and other
intangibles arising principally from the Merger. This compares to
revenues of $22.1 million and a loss of $6.3 million, or $0.36 per
share, in the Second Quarter of 1995. The financial results for the
month of June 1996 of National Reproductive Medical Centers, Inc., a
California based provider of infertility services recently acquired
by Matria, are also included in Matria's Second Quarter results.
For the Six Months ended June 30, 1996, Matria had revenues of
$60.3 million and a net loss of $3.0 million, or $0.10 per share,
before deduction of $26.7 million, or $0.94 per share, in goodwill
amortization, restructuring charges and other expenses arising from
the Merger. This compares to revenues of $46 million and a loss of
$8.7 million, or $0.50 per share, for the comparable period in 1995.
Robert F. Byrnes, President and Chief Executive Officer, stated,
"We have made substantial progress in our consolidation efforts and
in blending the product lines and service approaches of Tokos and
Healthdyne. These efforts will be substantially completed by the end
of the 3rd Quarter of 1996. The acquisition during the Quarter of
National Reproductive Medical Centers, a premier infertility-focused
healthcare company, provides Matria with an exciting new and
complementary line of business that we intend to significantly
expand in the next few years."
This press release contains forward-looking statements that
involve risks and uncertainties, including developments in the
healthcare industry, third-party reimbursement policies and
practices and regulatory requirements affecting the approval and
sale of medical devices, as well as other risks detailed from time
to time in the Company's reports filed with the Securities and
Exchange Commission.
Matria Healthcare, Inc., is the leading provider of
comprehensive obstetrical homecare and maternity management services
to HMOs, indemnity carriers and employers.
MATRIA HEALTHCARE, INC.
Consolidated Condensed Balance Sheets
(Amounts in thousands)
(Unaudited)
ASSETS 6/30/96 12/31/95
Current assets:
Cash and short-term investments $ 39,569 $ 8,066
Trade accounts receivable, net 24,306 17,767
Inventories 2,219 1,384
Other current assets 4,209 612
Total current assets 70,303 27,829
Property and equipment, net 15,460 7,858
Goodwill and other intangibles, net 164,099 4,556
Other assets 3,277 4,340
Total $253,139 44,583
Liabilities and Shareholders' Equity
Current Liabilities:
Current installments of long-term debt and
obligations under capital leases 2,902 1,914
Accounts payable, principally trade 6,802 2,625
Other current liabilities 35,021 8,431
Total current liabilities 44,725 12,970
Long-term debt and obligations under capital
leases, excluding current installments 4,163 2,124
Other long-term liabilities 11,094 ---
Total liabilities 59,982 15,094
Shareholders' equity 193,157 29,489
Total $253,139 $44,583
MATRIA HEALTHCARE, INC.
Consolidated Condensed Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three months ended 6/30/96 6/30/95
Net Revenues $ 35,588 $ 22,067
Cost and expenses:
Cost of revenues 15,317 9,753
Selling, general and administrative 18,385 12,049
Provision for doubtful accounts 2,086 1,324
Amortization of goodwill and other intangibles 8,687 432
Restructuring costs --- 530
Settlement of litigation --- 4,300
Total 44,475 28,388
Operating loss (8,887) (6,321)
Interest income 365 246
Other expense, net (45) (101)
Loss before income taxes (8,567) (6,176)
Income tax expenses --- 75
Net loss (8,567) (6,251)
Loss per common and common equivalent share $ (.25) (.36)
Weighted average number of common shares and
common share equivalents 34,960 17,338
Six months ended 6/30/96 6/30/95
Net Revenues $ 60,338 $ 45,931
Cost and expenses:
Cost of revenues 26,041 19,895
Selling, general and administrative 34,034 25,017
Provision for doubtful accounts 3,553 2,758
Amortization of goodwill and other intangibles 11,698 724
Restructuring costs 15,025 2,053
Settlement of litigation --- 4,300
Total 90,351 54,747
Operating loss (30,013) (8,816)
Interest income 402 496
Other expense, net (46) (202)
Loss before income taxes (29,657) (8,522)
Income tax expenses --- 150
Net loss (29,657) (8,672)
Loss per common and common equivalent share $ (1.04) (.50)
Weighted average number of common shares and
common share equivalents 28,505 17,311
BOISE, July 25, 1996 -- Morrison Knudsen Corporation
(NYSE: MRN) today reported that due to $30.7 million in charges
associated with the company's financial reorganization and
discontinued transit operations, the company reported a net loss of
$28.1 million ($.85 per share) on revenue of $353 million for the
quarter ended June 30, 1996 compared to a net loss of $12.4 million
($.37 per share) on revenue of $459 million for the second quarter
of 1995.
The company reported operating income from continuing operations
for the quarter of $17.8 million, compared to $10.6 million
operating income for the second quarter of 1995. In addition, the
company reported income from continuing operations of $3.9 million
before reorganization items and income taxes, compared to a loss of
$10.1 million for the second quarter of 1995. Backlog of all
uncompleted contracts at June 30, 1996 was $3.5 billion.
"Our core engineering, construction, environmental and mining
businesses continue to perform well, both operationally and
financially," said Robert A. Tinstman, MK's President and Chief
Executive Officer. "Following the merger with Washington
Construction Group, Inc., MK will be well-positioned for 1997."
Operational highlights during the quarter include the award of a
three-year-extension contract from the Tennessee Valley Authority
(TVA) for construction modifications and supplemental maintenance at
TVA's Fossil and Hydro electric generating plants and additional TVA
facilities. The extension contract, awarded to G-UB-MK
Constructors, a joint venture of MK, Parsons Power Group, Inc. and
Union Boiler Company, is valued at $256 million, bringing the total
contract value to $634 million.
In April, an MK-led joint-operations team was awarded an
engineering, procurement and construction-management contract for
installation of coal processing, stockpiling and ship loading
equipment for a 3.8-million-ton-capacity surface mine in Indonesia.
Under the new contract, the MK consortium will direct the 24-month-
long project to install equipment and construct facilities valued at
$80 million, permitting coal loading into ocean-going Panamax-class
vessels for export throughout the Pacific Rim.
Also during the second quarter, MK was awarded a cost-plus-fixed-
fee contract to provide management and technical services during
construction of the $700 million Pinglin Tunnel, a major segment of
a new four-lane expressway connecting Taipei City with Ilan County
on the Pacific coast. The project is the largest underground
construction project currently underway in the world.
Morrison Knudsen Corporation, founded in 1912, serves the
world's heavy construction, industrial process, mining,
environmental, power, operations & maintenance and transportation
markets as an engineer and constructor.
MORRISON KNUDSEN CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
(Thousands of dollars except share data)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 (a) 1996 1995 (a)
Revenue $ 353,481 $ 459,209 $ 677,684 $ 825,695
Cost of revenue (335,635) (448,581) (645,109) (810,359)
Operating income from
continuing operations 17,846 10,628 32,575 15,336
General and
administrative
expenses (10,529) (15,165) (24,027) (25,784)
Interest expense (4,924) (9,008) (10,148) (14,439)
Other income
(expense), net 2,248 2,563
Equity in net income
of unconsolidated
affiliates 1,517 2,514 4,757 14,461
Gain (loss) on
disposition of
investments in
affiliates, and
other assets, net (1,282) 2,130 (21,301)
Income (loss) from
continuing operations
before reorganization
items and income taxes 3,910 (10,065) 5,287 (29,164)
Reorganization items (20,904) (20,904)
Loss from continuing
operations before
income taxes (16,994) (10,065) (15,617) (29,164)
Income tax expense (1,275) (440) (2,357) (977)
Loss from continuing
operations (18,269) (10,436) (17,974) (30,072)
Discontinued operations:
Loss from
discontinued MK
Rail and Transit
operations (1,952) (8,135)
Loss on disposition
of discontinued
operations (9,805) (9,805) (25,500)
Net loss $ (28,074) $ (12,388) $ (27,779) $(63,707)
Loss per common share:
Continuing operations $(.55) $(.31) $(.54) $ (.91)
Discontinued
operations (.30) (.06) (.30) (1.02)
Net loss $(.85) $(.37) $(.84) $(1.93)
Common shares used to
compute loss
per share 33,044,000 33,042,000 33,044,000 32,954,000
BACKLOG NEW BUSINESS (Thousands of dollars)
New business booked during the period $341,200 $340,200
Backlog at end of period $3,527,900 $3,649,200
CONTACT: Brent D. Brandon, Vice President of Corporate
Communications of Morrison Knudsen, 208-386-6611
NEW YORK, July 25, 1996 -- The Warnaco Group, Inc. (NYSE:
WAC) and Authentic Fitness Corporation (NYSE: ASM) jointly announced
the termination of their merger agreement after it became clear that
Authentic Fitness will report a loss for its fourth fiscal quarter
ended June 30, 1996, and, consequently, report earnings below street
estimates for its 1996 fiscal year due, in large measure, to the
previously announced loss of a major customer, Herman's, which filed
for bankruptcy in May, as well as the attendant previously announced
decline in revenues for the fourth quarter of 1996 resulting in
lower gross profits.
Authentic Fitness said that sales for the fourth fiscal quarter
and into early July were softer than expected. Authentic Fitness
said that fiscal 1997 will be profitable but lower than current
Street estimates. Authentic Fitness said it believes the impact of
Herman's selling unsold Speedo inventory into the marketplace at
deep discounts is accounting for the drop in demand and that once
the inventory is sold, sales volume will improve.
Authentic Fitness agreed to terminate the merger agreement after
being advised by the Warnaco board that it would not recommend the
transaction to its shareholders and that it was extremely unlikely
they would reconsider their position.
Separately, Warnaco confirmed that its sales and earnings are in
line with street estimates.
Linda J. Wachner, Chairman and Chief Executive Officer of
Warnaco, said that, "The Board agreed that while the strategic logic
of a business combination between Warnaco and Authentic Fitness
makes sound strategic sense, it must be done only on a prudent and
responsible financial basis in order for the shareholders of both
companies to truly benefit and assure that the operations of the
businesses are strengthened. The board, therefore, unanimously
concluded to terminate the merger agreement at this time.
"We will continue to work, as in the past, seeking continuously
to build and deliver value for the shareholders of each company
through improved performance and the exploration of new growth
opportunities for each," said Mrs. Wachner.
The Warnaco Group, Inc., headquartered in New York, is a leading
manufacturer of intimate apparel, menswear and accessories sold
under such brand names as Warner's(R), Olga(R), Valentino Intimo(R),
Fruit of the Loom(R) bras and Hathaway(R), Chaps by Ralph Lauren(R),
Calvin Klein(R) men's underwear and women's intimate apparel,
Catalina(R) men's sportswear and Lejaby(R) intimate apparel and
swimwear.
Authentic Fitness Corporation, headquartered in Los Angeles,
California, designs and markets swimwear, swim accessories and
fitness apparel under the Speedo(R), Speedo(R) Authentic Fitness(R),
Oscar de la Renta(R), Catalina(R), Cole of California(R), and Anne
Cole(R) brand names, skiwear, activewear, swimwear and accessories
under the White Stag(R) brand name and skiwear under the
Edelweiss(R), Mountain Goat(R) and Skiing Passport(R) brand names.
CONTACT: Linda J. Wachner, 212-370-8204, or William S.
Finkelstein, 212-370-8287, both for Warnaco; or Jeffrey Taufield of
Kekst and Company, 212-593-2655
DOWNEY, Calif., July 25, 1996 -- AHI Healthcare Systems,
Inc. (Nasdaq-NNM: AHIS) today announced that it anticipates
reporting a larger than expected loss for the second quarter ended
June 30, 1996, primarily due to higher than expected medical costs
in the quarter. Losses are expected to continue until at least the
end of 1996. The company also announced that it plans to engage an
investment advisor to explore strategic alliances and other ways to
maximize stockholder value. Specific plans, including a yet-to-be-
determined organizational restructuring and a restructuring of the
company's bank loan agreement, are expected to be announced later in
1996.
Leonardo A. Berezovsky, M.D., chairman and chief executive
officer, stated, "While management is obviously disappointed in our
progress to date, we are exploring a number of strategic initiatives
to capitalize on opportunities that exist in the marketplace.
Although we believe that AHI has built an organization and
infrastructure which has long- term value, short-term cost and
membership growth issues necessitate a realignment of resources and,
perhaps, a strategic alliance to achieve our objectives. We look
forward to improved financial results once the company has
restructured its operations and membership growth is achieved."
AHI estimates a loss of at least $7 million for the second
quarter of 1996. These results include changes in reserve estimates
relating to both professional and hospital medical costs. AHI
expects to report total operating revenue for the quarter ended June
30, 1996 of approximately $28 million, which includes a reduction in
risk share revenue of about $2 million - primarily due to higher
than expected hospital costs. Additionally, the loss includes an
increase in the cost of medical services of approximately $2.5
million, reflecting recent experience in claims payments. In
addition, the company noted that it does not expect to recognize
income tax benefits in the second quarter of 1996.
For the second quarter ended June 30, 1995, the company reported
total operating revenue of $29.5 million and a net loss of $789,000.
AHI Healthcare Systems, Inc. integrates individual and small
groups of primary care physicians and specialists into comprehensive
local managed health care delivery networks, providing affiliated
physicians with access to managed care contracts and single-source
access to health maintenance organizations.
This release contains certain forward looking statements.
Although AHI Healthcare Systems, Inc. believes that its expectations
are based upon reasonable assumptions within the bounds of its
knowledge of its business and operations, there can be no assurance
that actual results will not materially differ from its
expectations. Factors which could cause actual results to differ
from expectations include the difficulty in increasing and managing
growth in covered lives, controlling and estimating health care
costs, estimating revenue from shared-risk arrangements, as well as
the possible negative effects of the health care regulatory
environment and the effects of competition. For other important
factors which may cause actual results to materially differ from
expectations and underlying assumptions, refer to the Registration
Statement on Form S-1 and periodic reports filed by AHI Healthcare
Systems, Inc., including its Annual Report on Form 10-K for the year
ended December 31, 1995, with the Securities and Exchange
Commission.
CONTACT: H.R. Brereton Barlow, Chief Financial Officer of AHI
Healthcare Systems, Inc., 310-803-0100; or Gary S. Maier or Cecilia
Wilkinson, 310-207-9300, both of Pondel Parsons & Wilkinson