SEATTLE, WA -- Aug. 2, 1996 -- MIDCOM Communications
Inc. (NASDAQ:MCCI) today announced preliminary financial results for
the second quarter ended June 30, 1996.
The company also announced that it has executed a letter of
intent with AT&T to negotiate a new contract to replace existing
agreements. The new contract is expected to afford MIDCOM more
favorable pricing and other terms for services purchased from AT&T.
The company expects to report revenue for the second quarter in
the range of $40.0 to $42.0 million, negative EBITDA (defined as
operating income plus depreciation, amortization, loss of impairment
of assets and restructuring charges) in the range of $4.0 to $4.5
million and a net loss of approximately $45.0 million, including a
write-down of approximately $19.0 million, primarily relating to
intangible assets.
The net loss also includes a charge in the amount of $8.8
million for payments to be made in connection with the satisfaction
of certain obligations under an agreement with a major supplier.
The expected decline in second quarter revenue, from $53.0
million in the first quarter of 1996, is primarily attributable to
the loss of a major reseller in March 1996 and customer attrition
principally with respect to the company's acquired customer bases.
Final second quarter results are expected to be announced prior to
August 14, 1996.
In addition, the company expects that, over the next nine to 12
months, revenue will decline as a result of customer attrition and
other factors. Profitability is also expected to be adversely
affected in the near term as a result of substantial increases in
the company's investment in sales, marketing, customer support,
systems development, capital expenditures and other factors.
The terms of the letter of intent with AT&T are subject to
negotiation and execution of a mutually acceptable definitive
agreement.
Founded in 1989, MIDCOM Communications Inc. provides a broad
range of telecommunications services to small and medium-sized
businesses nationwide. The company has headquarters in Seattle and
has regional offices throughout the nation. MIDCOM currently
invoices approximately 125,000 customer locations per month.
CONTACT: MIDCOM Communications Inc., Seattle
Robert Chamberlain-CFO, 206/628-5174
or
Teresa Stackpole-Dir., 206/628-6115
MALVERN, Pa., Aug. 1, 1996 -- Centocor, Inc. (Nasdaq:
CNTO) announced today its second quarter financial results, for the
period ending June 30, 1996. For the quarter, Centocor achieved
revenues of $30.6 million, comprising $20.1 million in
Pharmaceutical revenues and $10.5 million in Diagnostic revenues.
The company reported a loss of $4.3 million, or $0.06 per share,
compared to a loss for the second quarter of last year of $17.3
million, or $0.30 per share.
Cash balances at the end of the second quarter totaled $162.3
million. This compares with $251.5 million at the end of the first
quarter of 1996, which reflected the company's public offering of
four million additional shares of Common Stock during that quarter.
Total debt was reduced by $168.6 million, or 69% in the second
quarter, and now stands at $77.1 million. The 7-1/4% Convertible
Notes were eliminated, as well as $70.2 million of the 6-3/4%
Convertible Debentures. Total cash usage was $9.7 million for the
quarter, excluding financing and debt reduction, versus $19.3
million in the same period a year ago.
"Centocor is on track to reach its goal of profitability in the
final quarter of this year. Our financial and operating performance
this quarter demonstrates our corporate commitment to improving
shareholder value," said David P. Holveck, President and Chief
Executive Officer of Centocor. "Second quarter revenues show market
share growth in the adoption of ReoPro(TM), which is becoming the
standard of care in high-risk angioplasty, in a market where
economic value plays an increasing role in managing patient care."
Pharmaceutical Update:
ReoPro (anti-platelet for high-risk angioplasty)
Centocor is a biotechnology company that develops therapeutic
and diagnostic human health care products for cardiovascular,
autoimmune and infectious diseases, and cancer. The company
concentrates on research and development, manufacturing and market
development, with a primary technological focus on monoclonal
antibodies, with additional programs in genetic vaccines and
peptides.
Any statements released by Centocor that are forward looking are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned
that forward looking statements involve risks and uncertainties
which may affect the Company's business and prospects, including
economic, competitive, governmental, technological and other factors
discussed in the Company's filings with the Securities and Exchange
Commission.
On the Internet: Recent press releases can be found on
Centocor's site on the World Wide Web.
Point your browser to http://www.centocor.com" target=_new>http://www.centocor.com">http://www.centocor.com
CENTOCOR, INC.
SUMMARY OF OPERATIONS
(in thousands except for per share amounts)
(Unaudited)
Three months ended Six months ended
6 1/430 1/496 6 1/430 1/495 6 1/430
1/496 6 1/430 1/495
Revenues:
Sales $29,526 $17,754 $51,236 $37,073
Contracts 1,060 3,000 1,232 7,676
Total Revenues 30,586 20,754 52,468 44,749
Costs and expenses 35,732 32,199 66,237 61,819
Other income
(expense), net 118 (2,114) (957) (4,731)
Loss before special
items ($5,028) ($13,559) ($14,726) ($21,801)
Loss per share before
special items ($0.07) ($0.23) ($0.23) ($0.38)
Special items:
Net gain on extinguishment
of debt(1) 705 - 705 -
Litigation charge(1) - (3,750) - (3,750)
Loss ($4,323) ($17,309) ($14,021) ($25,551)
Loss per share ($0.06) ($0.30) ($0.22) ($0.44)
Weighted average
number of shares
outstanding 67,645 58,258 63,901 58,014
(1) The extraordinary net gain for the three and six months
ended June 30, 1996 pertains to the repurchase of the Company's 6-
3/4% Convertible Debentures net of debt issuance costs, partially
offset by debt issuance costs on the conversion of the Company's 7-
1/4% Convertible Notes. Special charges for the three and six
months ended June 30, 1995 represent a charge relating to a
litigation settlement.
SUMMARY OF CONSOLIDATED QUARTERLY STATEMENTS OF OPERATIONS
(Amounts in thousands except per share data)
(Unaudited)
For three months ending: 3 1/431 1/495 6 1/430 1/495 9 1/430
1/495 12 1/431 1/495
REVENUES:
Sales 19,319 17,754 15,860 12,068
Contracts 4,676 3,000 3,295 2,944
Total Revenues 23,995 20,754 19,155 15,012
COSTS AND EXPENSES:
Cost of sales 8,625 8,071 7,271 5,199
Research and
development 13,501 17,008 18,376 17,350
Marketing,
general and
administrative 7,494 7,120 7,643 6,919
Subtotal: 29,620 32,199 33,290 29,468
OTHER INCOME (EXPENSE):
Interest income 2,785 2,798 2,425 2,118
Interest expense (4,964) (4,868) (2,592) (4,577)
Other (438) (44) 2,147 (869)
Total Other (2,617) (2,114) 1,980 (3,328)
LOSS BEFORE SPECIAL
ITEMS: ($8,242)($13,559)($12,155) ($17,784)
LOSS PER SHARE BEFORE
SPECIAL ITEMS: ($0.14) ($0.23) ($0.21) ($0.30)
SPECIAL ITEMS:
Litigation charge - (3,750) - -
Severance charge - - - (1,642)
LOSS ($8,242)($17,309)($12,155) ($19,426)
LOSS PER SHARE ($0.14) ($0.30) ($0.21) ($0.33)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 57,769 58,258 58,347 58,451
SUMMARY OF CONSOLIDATED QUARTERLY STATEMENTS OF OPERATIONS
(Amounts in thousands except per share data)
(Unaudited)
YTD
THROUGH
12 1/431 1/495 3 1/431 1/496 6 1/430 1/496
REVENUES:
Sales 65,001 21,710 29,526
Contracts 13,915 172 1,060
Total Revenues: 78,916 21,882 30,586
COSTS AND EXPENSES:
Cost of sales 29,166 10,554 14,554
Research and
development 66,235 12,548 13,296
Marketing,
general and
administrative 29,176 7,403 7,882
Subtotal: 124,577 30,505 35,732
OTHER INCOME (EXPENSE):
Interest income 10,126 2,265 3,222
Interest expense (17,001) (3,267) (2,464)
Other 796 (73) (640)
Total Other (6,079) (1,075) 118
LOSS BEFORE SPECIAL
ITEMS ($51,740) ($9,698) ($5,028)
LOSS PER SHARE BEFORE
SPECIAL ITEMS ($0.89) ($0.16) ($0.07)
SPECIAL ITEMS:
Net gain on extinguishment
of debt - - 705
Litigation charge (3,750) - -
Severance charge (1,642) - -
LOSS ($57,132) ($9,698) ($4,323)
LOSS PER SHARE ($0.98) ($0.16) ($0.06)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 58,207 59,944 67,645
SUMMARY OF CONSOLIDATED BALANCE SHEET INFORMATION
(Amounts in thousands except per share data)
(Unaudited)
3 1/431 1/495 6 1/430 1/495 9 1/430 1/495 12
1/431 1/495 3 1/431 1/496 6 1/430 1/496
SELECTED BALANCE
SHEET CAPTION:
CASH & CASH
INVESTMENTS 179,110 159,834 145,838 131,437 251,491 162,346
EQUITY
INVESTMENTS 2,834 3,187 6,140 5,769 5,811 7,580
NET FIXED ASSETS 71,985 70,540 68,492 68,137 65,232 63,589
OTHER ASSETS 64,158 64,567 59,602 54,941 63,150 103,120
TOTAL ASSETS 318,087 298,128 280,072 260,284 385,684 336,635
DEBT 267,722 259,979 258,693 257,429 245,718 77,098
OTHER
LIABILITIES 36,715 39,847 33,479 32,251 31,271 58,280
TOTAL
LIABILITIES 304,437 299,826 292,172 289,680 276,989 135,378
SHAREHOLDERS'
EQUITY 13,650 (1,698) (12,100) (29,396) 108,695 201,257
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY 318,087 298,128 280,072 260,284 385,684 336,635
COMMON STOCK
OUTSTANDING 58,111 58,014 58,364 58,538 63,952 67,693
BOOK VALUE
PER SHARE $0.23 ($0.03) ($0.21) ($0.50) $1.70 $2.97
LANCASTER, Pa., Aug. 2, 1996 -- Kerr Group, Inc. (NYSE:
KGM) today reported a loss from continuing operations before unusual
items of $579,000 or $0.15 per common share for the quarter ended
June 30, 1996, compared to a loss from continuing operations of
$943,000 or $0.25 per common share for the quarter ended June 30,
1995. Net sales from continuing operations increased to $27,368,000
in the second quarter of 1996 from $26,189,000 in the same period in
1995 primarily due to higher sales of prescription packaging
products and child-resistant closures. The Company has restated its
results to present as discontinued operations the Company's Consumer
Products Business, which was sold in March 1996.
D. Gordon Strickland, President and Chief Executive Officer,
said the improvement in results from continuing operations before
unusual items in the second quarter of 1996, as compared to the
second quarter of 1995, was primarily due to higher gross profit as
a result of increased sales and lower costs resulting from the
restructuring of the Company. In addition, the Company did not
declare a dividend on its Class B, Series D Preferred Stock during
the second quarter of 1996. The cumulative amount of undeclared
dividends as of June 30, 1996 is $207,000.
Mr. Strickland also noted that the loss from continuing
operations before unusual items in the second quarter of 1996 of
$579,000 was substantially less than the $3,374,000 loss from
continuing operations before unusual items in the first quarter of
1996. He said the reduction in the amount of the loss was primarily
due to improved efficiency as a result of increased production, a
more profitable sales mix, higher net sales and lower costs
resulting from the restructuring of the Company.
After unusual items, the Company reported a loss from continuing
operations of $1,120,000 or $0.28 per common share for the quarter
ended June 30, 1996, compared to a loss from continuing operations
of $943,000 or $0.25 per common share for the quarter ended June 30,
1995. The loss from continuing operations for the quarter ended
June 30, 1995 includes preferred stock dividends of $207,000.
During the second quarter of 1996, the Company incurred an
unusual pretax loss of $656,000 ($394,000 after-tax or $0.10 per
common share) for restructuring costs primarily related to
relocation of personnel and equipment. The Company expects to incur
an additional $1,800,000 ($1,080,000 after-tax or $0.27 per common
share) for restructuring costs during the remainder of 1996 and
early 1997. Accounting rules require these costs to be expensed as
incurred.
During the second quarter of 1996, the Company also incurred
unusual expenses of $245,000 ($147,000 after-tax or $0.04 per common
share) to reimburse its unsecured lenders for professional fees
incurred in connection with the Company obtaining waivers of certain
covenants and extension of the maturity date of a $5,982,000
unsecured Note.
The Company had a loss from continuing operations before unusual
items for the six months ended June 30, 1996 of $3,952,000 or $1.00
per common share compared to a loss from continuing operations of
$1,525,000 or $0.41 per common share for the six months ended June
30, 1995. The increased loss was primarily due to 1995 cost
increases, increased reserves for customer rebates and inventory
obsolescence, and reduced production.
Net sales for the six months ended June 30, 1996 were
$52,464,000 compared to $53,551,000 in the year ago period.
During the first quarter of 1996, the Company recorded an
unusual loss of $7,500,000 ($4,500,000 after-tax or $1.14 per common
share) for the expected costs associated with the restructuring of
the Company which included moving the corporate headquarters from
Los Angeles, California to Lancaster, Pennsylvania and the
relocation of the wide mouth jar operations from Santa Fe Springs,
California to the Company's existing manufacturing facility in
Bowling Green, Kentucky. The pre-tax loss consisted of reserves for
i) severance, workers' compensation and insurance continuation costs
of $3,000,000, ii) costs associated with subleasing the two
facilities of $2,300,000, iii) asset retirements of $1,600,000 and
iv) other costs of $600,000.
The relocation of the Corporate headquarters has been completed
and the relocation of the wide mouth jar manufacturing operations is
progressing. The restructuring is expected to result in annualized
pre- tax cost savings of approximately $6,500,000 primarily from
reduced employment costs, lease costs, office expenses,
manufacturing overhead and freight. These cost savings are expected
to be substantially realized in 1997.
The Company obtained an extension of waivers of certain
financial covenants through August 31, 1996 from the lenders under
the Senior Notes, the lender under a $5,982,000 unsecured Note and
the purchaser under the Receivable Agreement, and an extension of
the maturity date of the unsecured Note to August 31, 1996. The
Company has agreed to prepay to the lenders, by August 14, 1996,
$500,000 in aggregate amount of the outstanding principal of the
Senior Notes and Note. There can be no assurance that the Lenders
will agree to further waivers or extensions of the Note.
Kerr, headquartered in Lancaster, Pennsylvania, is a major
producer of plastic packaging products.
KERR GROUP, INC.
Consolidated Statements of Earnings (Loss) for the
Three Months and Six Months Ended June 30, 1996 and 1995
(In Thousands)
Three Months Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
(Unaudited) (Unaudited)
Net sales $27,368 $26,189 $52,464 $53,551
Cost of sales 21,297 20,493 44,026 41,522
Gross profit 6,071 5,696 8,438 12,029
Selling, warehouse, general and
administrative expense 5,915 5,788 12,299 11,674
Loss on restructuring (1) 0 0 7,500 0
Other costs associated
with restructuring (2) 656 0 656 0
Financing costs 245 0 245 0
Interest expense 1,212 1,192 2,571 2,321
Interest and other income (90) (39) (190) (85)
Loss from continuing operations
before income taxes (1,867) (1,245) (14,643) (1,881)
Benefit for income taxes (747) (509) (5,857) (770)
Loss from continuing
operations $(1,120) $ (736) $(8,786) $(1,111)
Discontinued Operations:(3)
Gain on sale of
discontinued operations (4) 0 0 1,564 0
Earnings (loss) from
discontinued operations 0 451 (133) 439
Net earnings related to
discontinued operations 0 451 1,431 439
Net loss (1,120) (285) (7,355) (672)
Preferred stock dividends (5) 0 207 207 414
Net loss applicable to
common stockholders $(1,120) $ (492) $(7,562) $(1,086)
Net earnings (loss) per common share,
primary and fully diluted: (5) (6)
From continuing
operations $ (0.28) $ (0.25) $ (2.28) $ (0.41)
From discontinued
operations (3) .00 .12 .36 .12
Net loss $ (0.28) $ (0.13) $ (1.92) $ (0.29)
(1) During the first quarter of 1996, the Company recorded an
unusual loss of $7,500,000 ($4,500,000 after-tax or $1.14 per common
share) for the expected costs associated with the restructuring of
the Company which included moving the corporate headquarters from
Los Angeles, California to Lancaster, Pennsylvania and the
relocation of the wide mouth jar operations from Santa Fe Springs,
California to Bowling Green, Kentucky. The pre-tax loss consisted
of reserves for i) severance, workers' compensation and insurance
continuation costs of $3,000,000, ii) costs associated with
subleasing the two facilities of $2,300,000, iii) asset retirements
of $1,600,000 and iv) other costs of $600,000.
(2) During the second quarter of 1996 the Company incurred an
unusual pretax loss of $656,000 ($394,000 after-tax or $0.10 per
common share) for restructuring costs primarily related to
relocation of personnel and equipment. The Company expects to incur
an additional $1,800,000 ($1,080,000 after-tax or $0.27 per common
share) for restructuring costs during the remainder of 1996 and
early 1997. Accounting rules require these costs to be expensed as
incurred.
(3) The Company sold the manufacturing assets of its Consumer
Products Business on March 15, 1996 and, accordingly, has reflected
the results of this discontinued business separately from continuing
operations in the above table. The presentation of this business as
discontinued operations had no effect on net loss, net loss
applicable to common stockholders and net loss per common share from
the amounts previously reported.
(4) The gain on the sale of discontinued operations has been
reduced by $5,800,000 of reserves for i) retiree health care and
pension expenses of $3,800,000, ii) severance and related costs of
$1,000,000, iii) professional fees of $500,000, iv) asset
retirements of $300,000, and v) other costs of $200,000.
(5) The Company did not declare a dividend on its Class B,
Series D Preferred Stock during the second quarter of 1996. The
cumulative amount of undeclared dividends as of June 30, 1996 is
$207,000. Under accounting rules, such dividends are not accrued
until declared.
(6) Weighted average number of common shares outstanding for the
three months ended June 30, 1996 and 1995 were 3,933,000 and
3,826,000, respectively. Weighted average number of common shares
outstanding for the six months ended June 30, 1996 and 1995 were
3,933,000 and 3,752,000, respectively. Fully diluted net earnings
per common share reflect when dilutive, a) the incremental common
shares issuable upon the assumed exercise of outstanding stock
options, and b) the assumed conversion of the Class B, Series D
Preferred Stock and the elimination of the related dividends.
Antidilution occurred in the three months and six months ended June
30, 1996 and 1995.
KERR GROUP, INC.
Condensed Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995
(In Thousands)
June 30, 1996 December 31, 1995
(Unaudited) (As Restated)
Assets
Cash and cash equivalents $ 4,080 $ 3,904
Receivables 8,981 7,154
Inventories 15,808 17,748
Prepaid expenses and other
current assets 2,562 3,106
Current net assets related to
discontinued operations (1) 11,987 12,847
Total current assets 43,418 44,759
Property, plant and
equipment, net 41,606 46,818
Deferred income tax asset 11,981 8,057
Goodwill and other intangibles 6,409 6,983
Other assets 7,436 8,026
Non-current net assets related
to discontinued operations (1) 0 4,854
$110,850 $119,497
Liabilities and Stockholders' Equity
Short-term debt $ 5,982 $ 6,500
Senior debt due 1997 through 2003
classified as current (2) 46,018 50,000
Other current liabilities 20,465 18,597
Total current liabilities 72,465 75,097
Accrued pension 16,046 18,318
Other long-term liabilities 4,477 2,175
Preferred stock 9,748 9,748
Common equity before pension
adjustment 16,737 24,299
Excess of additional pension
liability over unrecognized
prior service cost, net of
tax benefits (8,623) (10,140)
Total stockholders' equity 17,862 23,907
$110,850 $119,497
(1) The Company sold the manufacturing assets of its Consumer
Products Business on March 15, 1996 and, accordingly, has reflected
the net assets and liabilities of this discontinued business
separately in the above table.
(2) The Company's outstanding senior debt due 1997 through 2003
was classified as a current liability because the Company was in
default of certain financial covenants for which the Company had
received waivers only through August 31, 1996.
NEW YORK, Aug. 2, 1996 -- Fitch Investors Service has
placed Niagara Mohawk Power Co.'s (NMK) 'BB' rated outstanding first
mortgage bonds and secured pollution control bonds and 'B+' rated
preferred stock on FitchAlert status with evolving implications,
following the company's announced offer to buy out and terminate 44
above-market power purchase contracts with independent power
producers (IPPs). The credit trend formerly was 'declining.'
FitchAlert denotes that a change in ratings is likely and the
evolving status indicates that ratings may be either raised or
lowered depending on the outcome of events within the next six-to-12
months.
The buyout proposal is part of a plan that would permit NMK to
reduce its power costs, stabilize its financial condition and
restructure the company along lines consistent with New York Public
Service Commission (PSC) policies, with favorable implications for
NMK's ratings. However, the proposal is dependent upon its
acceptance by 19 independent power project developers and their fuel
suppliers, approval of a multi-year rate stabilization plan by the
PSC and other regulatory approvals. In the event that some or all
of the IPPs do not accept the buyout proposal, NMK may have to
resort to bankruptcy proceedings to address its economic dilemma.
The possibility of a Niagara Mohawk bankruptcy filing is the primary
incentive for the IPPs to come to terms with the company. A second
incentive is the possibility that the PSC will bring increased
pressure to bear upon the power producers; for example, the
commission could reinstate contractual provisions permitting NMK to
curtail power deliveries under the contracts.
According to the company, the 44 contracts that would be
terminated have a present value of around $9 billion; the amount of
the proposed buyout payments remains confidential at this stage of
the negotiations. The proposal contemplates that the buyout would be
accomplished using a combination of cash and new subordinated
debentures issued by the restructured NMK, which would retain the
company's gas and electric distribution facilities, electric
transmission assets and ownership interests in the Nine Mile Point 1
and 2 nuclear units. It would also continue to be the obligor of
NMK's outstanding first mortgage bonds, unsecured debt and preferred
stock. Non-nuclear generating units would be spun off into a
separate generating company, which would not assume any debt of NMK
and would be capitalized predominantly with equity. Initially, NMK's
total debt would be significantly increased by the issuance of new
subordinated debentures, but the debt leverage could subsequently be
reduced rapidly using increased operating cash flow resulting from
the termination of the 44 power purchase contracts. The financial
outlook for a restructured NMK would be aided if the New York State
legislature passes a pending bill permitting the securitization of
intangible regulatory assets, such as the contract buyout payments.
CONTACT: Ellen Lapson, 212-908-0504, John Watt, 212-908-0523, or
Steve Fetter, 212-908-0555, all of Fitch