DENVER, CO -- Aug. 7, 1996 -- Forest Oil Corporation
announced today a pre-tax loss of $1.9 million in the second quarter
of 1996, compared to a pre-tax loss of $4.8 million in the second
quarter of 1995.
The pre-tax loss in the first six months of 1996 was $153,000
compared to a pre-tax loss of $8.0 million in the first six months
of 1995. For the second quarter of 1996, Forest's net loss was $2.9
million and the net loss attributable to common stock after
preferred stock dividends was $3.4 million or $.14 per share,
compared to a net loss of $4.8 million and a net loss attributable
to common stock after preferred stock dividends of $5.4 million or
$.94 per share for the second quarter of 1995.
For the first six months of 1996, Forest's net loss was $3.3
million and the net loss attributable to common stock after
preferred stock dividends was $4.4 million or $.19 per share,
compared to a net loss of $8.0 million and a net loss attributable
to common stock after preferred stock dividends of $9.0 million or
$1.59 per share for the first six months of 1995.
The improved results for the second quarter and first six months
of 1996 were attributable primarily to increased natural gas and
liquids production as a result of significant Canadian acquisitions
completed in December 1995 and January 1996, and the contribution
made by Forest's Canadian marketing and processing subsidiary,
ProMark, that was also acquired in January 1996.
Earnings from Forest's oil and gas operations (consisting of oil
and gas sales less oil and gas production and general and
administrative expense) were $17.8 million and $35.8 million in the
second quarter and first six months of 1996, respectively, while
marketing and processing operations earned $1.0 million and $2.9
million in the second quarter and first six months of 1996,
respectively.
Oil and gas operations earned $12.7 million in the first quarter
of 1995 and $27.6 million in the first six months of 1995; there
were no marketing and processing operations in 1995.
Oil and gas sales revenue increased 42% to $28.9 million for the
second quarter of 1996 from $20.4 million in the second quarter of
1995, and increased 32% to $56.5 million for the first six months of
1996 from $42.7 million for the first six months of 1995. The
increases are attributable to higher production as a result of the
Canadian acquisitions.
Production volumes for natural gas in the second quarter of 1996
and first six months of 1996 increased 18% and 8%, respectively,
over the comparable 1995 periods. Production volumes for liquids
(consisting of oil, condensate and natural gas liquids) were 102%
and 89% higher in the second quarter and first six months of 1996,
respectively, than in the comparable 1995 periods.
Oil and gas production expense was $8.4 million in the second
quarter of 1996 and $15.9 million in the first six months of 1996,
representing increases of 42% over the comparable periods of 1995,
due primarily to acquisition of Canadian properties. On a per unit
basis, production expenses were $.60 and $.59 per mcfe during the
second quarter and first six months of 1996, respectively,
representing increases of approximately 7% and 16%, respectively,
compared to amounts incurred during the comparable 1995 periods.
The increases are due to higher per unit costs in the United
States where fixed costs in the Gulf of Mexico are being allocated
over a lower production base.
Total overhead costs, including amounts related to exploration
and development activities, increased 70% to $5.6 million for the
second quarter of 1996 and increased 44% to $10.2 million for the
first six months of 1996 as compared to $3.3 million for the second
quarter of 1995 and $7.1 million for the first six months of 1995.
The increase is due to the addition of Canadian operations, which
increased Forest's salaried workforce to 173 at June 30, 1996
compared to 115 at December 31, 1995.
Interest expense of $6.4 million in the second quarter of 1996
and $12.2 million in the first six months of 1996 was comparable to
the amount recorded in the comparable 1995 periods. Depreciation
and depletion expense increased 27% to $14.1 million for the second
quarter of 1996 and increased 15% to $27.0 million for the first six
months of 1996 from the comparable periods of 1995.
On a per-unit basis, depletion expense was approximately $.93
per mcfe in the second quarter of 1996 and $.94 per mcfe in the
first six months of 1996 compared to $1.05 per mcfe for the second
quarter of 1995 and $1.06 for the first six months of 1995. The
decrease in per unit depletion expense is the result of lower than
average cost of reserves acquired in Canada.
Income tax expense increased to $1.2 million in the second
quarter of 1996 and $3.3 million in the first six months of 1996
from zero a year ago. The increase is due to income tax expense
resulting from Canadian operations. Forest's U.S. operations remain
in a non-taxable position.
Robert Boswell, President and Chief Executive Officer, stated
"We are pleased to report increased production volumes resulting
from our Canadian acquisitions. With the addition of the recently
announced production from the High Island 116 platform starting in
August, Forest expects to maintain an upward production trend over
the next several quarters as we bring additional discoveries on
line.
"Second quarter results were in line with expectations and
should improve markedly in the coming quarters with increased
production. Our 1997 capital expenditure target has been set at $90
million, approximately 50% higher than the 1996 budget. We intend
to invest this amount without increasing the Company's financial
leverage. In addition, we continue to pursue acquisitions in Canada
to gain critical mass in the Western Sedimentary Basin."
"While year-to-date results are in line with expectations, we
believe beginning in the third quarter our investors will see the
positive results of our drilling success. The early exercise of the
Anschutz option is indicative of their view of the prospects for
Forest Oil and provides Forest with the capital required to continue
its successful drilling program."
This news release includes forward looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Although the company
believes that its expectations are based on reasonable assumptions,
it can give no assurance that its goals will be achieved.
Important factors that could cause actual results to differ
materially from those in the forward looking statements herein
include the timing and extent of changes in commodity prices for oil
and gas, the need to develop and replace reserves, environmental
risks, drilling and operating risks, risks related to exploration
and development, uncertainties about the estimates of reserves,
competition, government regulation and the ability of the company to
meet its stated business goals.
Forest Oil Corporation is engaged in the acquisition,
exploration, development, production and marketing of natural gas
and crude oil in North America. Forest's principal reserves and
producing properties are located in the Gulf of Mexico, Texas,
Oklahoma and Canada. Forest's common and preferred stocks are
traded on the Nasdaq National Market tier of the Nasdaq Stock Market
under the FOIL and FOILO symbols, respectively.
FOREST OIL CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
Pro Forma
June 30 December 31 December 31
1996 1995 1995
(In Thousands)
ASSETS
Current assets:
Cash and cash equivalents $4,176 3,287 3,287
Accounts receivable 44,104 35,763 17,395
Other current assets 3,636 4,612 2,557
Total current assets 51,916 43,662 23,239
Net property and equipment,
at cost 418,278 429,584 277,599
Investment in affiliate 11,307 11,301 11,301
Goodwill and other intangible
assets, net 30,617 24,539 -
Other assets 8,716 8,904 8,904
$520,834 517,990 321,043
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft $1,010 2,055 2,055
Current portion of long-term debt 1,507 2,263 2,263
Current portion of gas balancing
liability 2,730 4,700 4,700
Accounts payable 48,066 37,561 17,456
Accrued interest 5,233 4,219 4,029
Other current liabilities 2,418 1,917 1,917
Total current liabilities 60,964 52,715 32,420
Long-term debt 201,886 192,848 193,879
Gas balancing liability 3,328 3,841 3,841
Other liabilities 24,366 25,824 23,298
Deferred revenue 9,985 15,137 15,137
Deferred income taxes 33,124 38,502 -
Minority interest 8,644 8,882 8,171
Shareholders' equity:
Preferred stock 24,345 24,359 24,359
Common stock 2,460 2,280 1,066
Capital surplus 372,659 366,431 241,241
Common shares to be issued in
debt restructuring - 6,073 6,073
Accumulated deficit (220,783) (217,495) (217,495)
Foreign currency translation (144) (1,407) (1,407)
Treasury stock, at cost - - (9,540)
Total shareholders' equity 178,537 180,241 44,297
$520,834 517,990 321,043
FOREST OIL CORPORATION
Condensed Consolidated Statements of Production and Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
(In Thousands Except Production and Per Share Amounts)
PRODUCTION
Gas, including deliveries under
volumetric
production payments (mmcf) 10,202 8,640 19,444 17,937
Oil, condensate and natural gas
liquids (thousands of barrels) 610 302 1,233
651
STATEMENTS OF CONSOLIDATED OPERATIONS
Revenue:
Marketing and processing $50,842 - 83,589
-
Oil and gas sales:
Gas 17,533 15,267 35,467 32,002
Oil, condensate and natural
gas liquids 11,330 5,122 21,055 10,696
Total oil and gas sales 28,863 20,389 56,522 42,698
Miscellaneous, net (161) 161 303
213
Total revenue 79,544 20,550 140,414 42,911
Expenses:
Marketing and processing 48,986 - 79,165 -
Oil and gas production 8,369 5,888 15,856 11,197
General and administrative 3,607 1,761 6,337 3,861
Interest 6,423 6,627 12,220 12,421
Depreciation and depletion 14,051 11,089 26,989 23,398
Total expenses 81,436 25,365 140,567 50,877
Income (loss) before income taxes (1,892) (4,815) (153)
(7,966)
Income tax expense (expense)
benefit (1,225) - (3,305)
7
Minority interest in loss of
subsidiary 216 - 171
-
Net loss $(2,901) (4,815)
(3,287)(7,959)
Weighted average number of common shares
outstanding 24,576 5,694 22,477
5,670
Net loss attributable to common
stock $ (3,441) (5,355)
(4,367)(9,039)
Primary and fully diluted loss per
common share $ (.14) (.94) (.19)
(1.59)
FOREST OIL CORPORATION
Selected Production and Price Information
Three Months Ended
June 30, June 30,
1996 1995
United States Canada Total United States
Natural Gas
Total production (MMCF) 6,667 3,535 10,202
8,640
Sales price received (per MCF) $ 2.18 1.22 1.85
1.67
Effects of energy swaps (per MCF)(.17) (.05) (.13)
.10
Average sales price (per MCF) $ 2.01 1.17 1.72
1.77
Liquids
Total production (MBBLS) 228 382 610
302
Sales price received (per BBL) $18.22 21.91 20.54
17.48
Effects of energy swaps
(per BBL) (1.85) (2.25) (2.10) (.85)
Average sales price (per BBL)$ 16.37 19.66 18.44
16.63
Six Months Ended
June 30, June 30,
1996 1995
United States Canada Total United States
Natural Gas
Total production (MMCF) 13,092 6,352 19,444
17,937
Sales price received
(per MCF) $ 2.27 1.43 1.99 1.63
Effects of energy swaps
(per MCF) (.24) (.03) (.17) .15
Average sales price (per MCF)$ 2.03 1.40 1.82
1.78
Liquids
Total production (MBBLS) 481 752 1,233
651
Sales price received (per BBL)$ 17.36 19.02 18.37
16.79
Effects of energy swaps
(per BBL) (1.46) (1.30) (1.36) (.61)
Average sales price (per BBL) $ 15.90 17.72 17.01
16.18
TARRYTOWN, N.Y. -- Aug. 7, 1996 -- Finger/Matrix
Inc. (NASDAQ EBB:FINX), the electronic fingerprinting pioneer that
came out of Chapter 11 bankruptcy last year under new management
announced here Wednesday, establishment of product test
relationships with EDS, in El Monte, Calif., and IBM in Great
Britain.
Thomas T. Harding, president and CEO, told stockholders at their
first annual meeting in four years that last month's introduction of
the company's two major electronic fingerprinting systems already
has produced these initial results.
Both companies will soon receive Finger/Matrix Chek/One access
control systems for extensive testing, Harding said.
Harding also reported the company's first distribution contract,
agreed in principle, with Engineered Security Systems Inc., of
Whippany, N.J. Under the agreement, ESS Inc. will market Chek/One
systems to commercial and industrial security system customers
throughout the New York - New Jersey - Connecticut area.
Such access control systems verify the identity of individuals
in less than two seconds by electronically matching one fingerprint
against a computer file. They will be applied increasingly to
controlling access to data networks, physical areas, and to assuring
the identity of employees, bank depositors and store customers,
Harding said.
Shareholders were escorted to the company's Dobbs Ferry
headquarters after the meeting for demonstrations of its second
major access system, the Chek/Ten, which scans all 10 fingers,
digitizes the fingerprint images and stores them in a computer.
This large system is intended for use in the law enforcement
community and will soon undergo certification tests for the FBI.
In their official actions, the shareholders approved stock
option plans for both employees and directors, and returned all
current members to the board of directors. They are:
Thomas T. Harding, President & CEO Gordon R. Molesworth, Secretary
Seth M. Lukash, Chairman & CEO, Tridex Corp. Lewis S. Schiller,
Chairman & CEO, Consolidated Technologies Inc. Fred I. Sonnenfeld,
General Counsel & Partner, Sonnenfeld & Richman.
CONTACT: Molesworth Associates Inc., Green Valley, Ariz.
Gordon Molesworth, 520/625-0035
BALA CYNWYD, Pa. -- Aug. 7, 1996 -- Holly Products
Inc. (NASDAQ:HOPR,HOPRW,HOPRP; BSE:HOP,HOPP) today announced results
of its year ended March 31, 1996.
As previously stated in the December 1995 10Q, the company
experienced a substantial loss for the year attributable primarily
to its woodworking business, HollyWood Manufacturing Inc. and cost
of ceasing operations thereof.
Additionally, the company experienced one time costs and a loss
due to the reorganization and move of its wholly owned subsidiary,
Navtech Industries Inc. to substantially larger quarters on the
Navajo Reservation in Shiprock, N.M. Preliminary results for the
April through June 1996 quarter show a substantial turn-around and a
return to profitability for this subsidiary.
Lastly, the company experienced substantial legal expenses, loan
fees and costs associated with its majority owned subsidiary,
Country World Casinos Inc. to support and defend its right to
maintain control of its main asset and to satisfy a court order in
conjunction with Country World bankruptcy proceeding. We anticipate
its emergence from Chapter 11 in short order.
William H. Patrowicz, president of Holly Products Inc., said,
"On July 21, 1995, we committed to divest ourselves of HollyWood
Manufacturing Inc. and reduce the associated losses. This was
accomplished during 1995. The company then proceeded to reorganize
and move Navtech to substantially larger quarters, equip Navtech
with modern equipment and expand their customer base such that
Navtech can realize their true potential. Accordingly, preliminary
first quarter results are showing a significant turnaround. Country
World, after much difficulty this past year, will shortly emerge
from Chapter 11 and allow the company and its shareholders to
realize the true potential. After significant effort and expenses
this past year, Holly is positioned solidly for the future."
Holly Products Inc., headquartered in Bala Cynwyd, has a wholly
owned subsidiary, Navtech Industries Inc. of Blanding, Utah and a
majority owned subsidiary, Country World Casinos Inc. of Denver.
Navtech is a manufacturer and tester of electronic components for
casino equipment, hotel equipment and signage. Country World
Casinos Inc. is a development corporation, whose plan is to
construct a casino in Black Hawk, Colo., as well as a hotel complex.
Holly Products Inc. and Subsidiaries
Consolidated Balance Sheet as of March 31, 1996
Assets:
Current assets:
Cash and cash equivalents $934,462
Accounts receivable trade - (net of
allowance for doubtful accounts
of $157,893) 378,450
Inventory 915,512
Prepaid expenses 446,980
Other current assets 4,534
Total current assets 2,679,938
Property and equipment - (net of
accumulated depreciation and
amortization of $152,851) 9,687,312
Deposits 246,462
Investments 363,355
Intangible assets - net 685,137
Other assets 246,157
Total assets $13,908,361
Liabilities and Stockholders' Equity:
Current Liabilities:
Notes Payable - Related Party $ 3,896,504
Demand Notes Payable - Bank 858,353
Notes Payable - Others 680,396
Accounts Payable 1,535,888
Accrued Expenses 1,400,833
Payroll Taxes Payable 81,823
Current Portion of Long-Term Debt 58,748
Current Portion of Capital Lease Obligations 61,237
Other Current Liabilities 14,182
Net Liabilities of Discontinued Operations 575,007
Total Current Liabilities 9,162,971
Long-Term Debt 61,765
Long-Term Portion of Capital Lease Obligations 165,081
Minority Interest 2,217,191
Commitments and Contingencies --
Stockholders' Equity:
Preferred Stock - Authorized 2,000,000 Shares:
Series D: Convertible $10.00 Par Value,
$1.00 Per Share Per Annum Cumulative Dividends,
389,975 Shares Issued and Outstanding 3,899,750
Series E: Convertible $10.00 Par Value 587,000
Shares Issued and Outstanding 5,870,000
Additional Paid-in Capital (Preferred) (1,939,548)
Common Stock - No Par Value, Authorized
20,000,000 Shares, 10,350,460 Shares Issued
and Outstanding 10,214,387
Additional Paid-in Capital (Common) (83,947)
Accumulated (Deficit) (15,659,289)
Total Stockholders' Equity 2,301,353
Total Liabilities and Stockholders' Equity $13,908,361
Holly Products Inc. and Subsidiaries
Consolidated Statements of Operations
Years ended
March 31,
1996 1995
Net Sales $ 4,110,443 $ 5,279,766
Cost of Sales 4,805,819 4,013,435
Inventory Reserve 338,000 ---
Total Cost of Sales 5,143,819 4,013,435
Gross Profit (Loss) (1,033,376) 1,266,331
Operating Expenses:
General, Selling, and Administrative 4,779,264 1,362,308
Bad Debt Expense 434,496 8,881
Total Operating Expenses 5,213,760 1,371,189
Operating (Loss) (6,247,136) (104,858)
Other (Expense):
Other Expenses (24,469) (8,264)
Interest Expense (468,483) (265,272)
Other (Expense) - Net (492,952) (273,536)
Equity in Earnings of Unconsolidated
Affiliate 85,355 --
Minority Interest Share in Loss of
Subsidiary 143,101 --
(Loss) Income from Continuing Operations (6,511,632) (378,394)
Discontinued Operations:
(Loss) from Operations of Woodworking
Business (2,196,078) (2,276,863)
Estimated (Loss) on Disposal of Woodworking
Business Including Provision of $666,224
for Operating Losses During the Phase Out
Period (2,709,280) --
Net (Loss) (11,416,990) (2,655,257)
Preferred Stock Dividends 402,500 219,250
Net (Loss) Available to Common
Stockholders $(11,819,490) (2,874,507)
Loss Per Common Share:
(Loss) from Continuing Operations $ (.97) $ (.14)
(Loss) from Discontinued Operations $ (.33) $ (.86)
Estimated (Loss) on Disposal of
Woodworking Business $ (.40) $ --
Net Income (Loss) Per Common Share $ (1.75) $ (1.08)
Weighted Average Number of Common
Shares Outstanding 6,739,161 2,649,874
CONTACT: Holly Products Inc., Bala Cynwyd
William H. Patrowicz, 610/617-0400
or
Martin E. Janis & Co., Chicago
Elliot Jacobson, 312/943-1100
OKLAHOMA CITY, Aug. 7, 1996 -- On August 17, 1994,
Megafoods Stores, Inc., Handy Andy, Inc., Megafoods Real Estate,
Inc. and Texas National Food Stores Leasing Company ("Debtors")
filed for Chapter 11 bankruptcy protection in the United States
Bankruptcy Court for the District of Arizona.
In October, 1995, Debtors filed a complaint against Fleming
Companies, Inc. (NYSE: FLM). The trial was scheduled to begin on
August 12, 1996. On June 11, 1996, the Court approved the
disclosure statement for the Debtors' Joint Plan of Reorganization
(the "Joint Plan"), which has been sent out to creditors.
On August 6, 1996, the parties entered into a written Settlement
Agreement to amicably and reasonably resolve fully the parties'
disputes. Both parties believe that the terms of the Settlement
Agreement are in their respective best interests and will avoid
further litigation.
The parties intend to present the Settlement Agreement to the
Court for approval on Monday, August 12, 1996, in lieu of proceeding
with trial. The Settlement Agreement explicitly contemplates that
its terms shall be incorporated into the Debtors' Joint Plan and
that anything currently in the Debtors' proposed Joint Plan that is
inconsistent with the parties' Settlement Agreement will be deleted.
Fleming will support the Debtors' efforts to reorganize consistent
with the terms of the parties' Settlement Agreement.
CONTACT: Shane Boyd of Fleming Cos., 405-858-5956
WASHINGTON, Aug. 7, 1996 -- The Pension Benefit Guaranty
Corporation (PBGC) said today that it is prepared to review Smith
Corona Corporation's request to terminate its pension plans but
urged the company to continue pursuing avenues that would result in
continuation of the underfunded pension plans that cover about 4,600
workers and retirees.
"PBGC encourages solutions that keep plans ongoing since this
minimizes losses to workers as well as the insurance program," said
PBGC Executive Director Martin Slate.
Smith Corona, which hopes to emerge from bankruptcy in October,
has also informed PBGC that it intends to file a motion with the U.S
Bankruptcy Court in Wilmington, Delaware, requesting approval to
terminate both its salaried and hourly pension plans.
Under pension law, a company in financial distress may terminate
its pension plan only if the plan sponsor as well as each of its
corporate affiliates has satisfied a financial distress test. If
the pension plans are terminated, PBGC would be the largest creditor
in the bankruptcy court, with claims for the pension underfunding of
nearly $30 million, and would pursue its claims vigorously.
The manufacturer of personal word processors and electric
typewriters has been seeking a solution to its financial problems
since it filed for Chapter 11 bankruptcy in July, 1995.
In the event of termination, PBGC would take over the pension
plans and pay benefits up to the legal limit, which for plans
terminating in 1996 is $2,642.05 per month. The 3,000 workers who
have participated in the hourly plan for at least five years would
probably see no reduction in their benefits. However, some of the
1,500 workers in the salaried plan would exceed the guarantee limit
and experience reductions in their benefits.
PBGC is a federal corporation created under the Employee
Retirement Income Security Act of 1974 to guarantee payment of basic
pension benefits earned by nearly 42 million American workers and
retirees participating in about 55,000 private-sector defined
benefit pension plans. The agency receives no funds from general
tax revenues. Operations are financed largely by insurance premiums
paid by companies that sponsor pension plans and by investment
returns.
CONTACT: Judith Welles, director communications & public affairs, or Andy Gasparich, public affairs officer, of the Pension Benefit Guaranty Company, 202-326-4040