PALATINE, Ill. -- Aug. 21, 1996 -- Dauphin
Technology Inc. announces that on Aug. 13, 1996, the company filed
its 2nd quarter report (Form 10-Q) for the period ending 6/30/96.
The 2nd quarter report constitutes Dauphin's first financial
report, since its emergence from its Chapter 11 case, and represents
the company's current financial condition. The company reports the
2nd quarter, compared to the 1st quarter 1996, reflects its
elimination of its $51,000,000 debt.
As a result of the acquisition from Technology Partners LLC, and
the extinguishment of debt, Dauphin presently reports over
$3,100,000 in assets, $3,000,000 in shareholders' equity and a one-
time recognition of approximately $38,000,000 in extraordinary
income.
Dauphin stock is publicly traded on the Over-the-Counter
Electronic Bulletin Board under the symbol DNTK.
CONTACT: Dauphin Technology Inc., Palatine
Sheila A. Trendel, 847/358-4406 ext. 205
TROY, MI -- August 21, 1996 -- Kmart Corporation
(NYSE: KM) today reported net income from continuing operations of
$34 million, or $.07 per share, in the second quarter of 1996,
compared with a net gain in the second quarter of 1995 of $22
million, or $.05 per share. Giving effect to a loss from
discontinued operations of $76 million, or $.17 per share in the
second quarter of 1995, the net loss in the second quarter of 1995
was $54 million, or $0.12 per share.
Total sales in the second quarter were $8.312 billion, a
decrease of 1.5% from $8.440 billion from the second quarter of
1995. On a comparable store basis, consolidated sales for the
quarter increased 1.6% and sales for U.S. Kmart stores increased
2.2%.
Gross margin for the second quarter of 1996 was 21.7% of sales
versus 22.5% last year, reflecting markdowns related to the
clearance of seasonal and discontinued merchandise, lower than
anticipated margin rate in softlines, and the effect of the sale of
Kmart's auto service business.
Selling, general and administrative (SG&A) expenses declined by
$117 million for the quarter, resulting in an SG&A ratio for the
second quarter of 20.6% of sales versus 21.6% for the comparable
1995 period.
Commenting on second quarter results, Floyd Hall, chairman,
president and chief executive officer, said, "Sales in our U.S.
Kmart stores increased 2.2% on a comparable store basis in the
second quarter and 2.9% for the first six months of 1996, which was
below our expectations. While performance in our consumables
categories was good, we look for improved performance in both hard
and softlines in the second half of 1996. Gross margin rates appear
to have stabilized, and we continue to see strong SG&A improvements,
totaling $222 million year-to-date. Results were also affected by
weak performance at Kmart's Canadian operation.
"During the second quarter, Kmart also completed $4.7 billion in
new financing through a three-year, $3.7 billion credit facility
coupled with a $1 billion public offering of 7.75% convertible
preferred securities. These financings ensured our financial
flexibility and give us time to execute our merchandising and
operational initiatives," Hall said.
Excluding non-recurring items, the first half of 1996 resulted
in a net loss of $4 million, or $.01 per share, as compared with a
net loss of $86 million, or $.20 per share in the first half of
1995. The net loss, including discontinued operations, for the 26
weeks of 1996 was $65 million, or $.13 per share, compared with a
net loss of $82 million, or $.19 per share, in the year-ago period.
Discontinued operations in 1996 included a $61 million charge, or
$0.13 per share, resulting from participation in the recent initial
public offering of Thrifty PayLess Holdings, Inc. and the
revaluation of the Company's remaining holding. The first half of
1995 included the positive impact of a pension curtailment gain of
$83 million net of tax, or $0.18 per share, relating to the freezing
of the Kmart defined benefit pension plan, as well as a loss from
discontinued operations described earlier.
Kmart Corporation serves America with 2,143 Kmart and 168
Builders Square retail outlets, and operates 134 stores
internationally. Kmart Corporation common stock is listed on the
New York, Pacific, and Chicago Stock Exchanges.
KMART CORPORATION
SALES AND OPERATING RESULTS BY BUSINESS
13 WEEKS ENDED JULY 31, 1996 AND JULY 26, 1995
SALES
% Inc. (Dec.)
All Comparable
(Millions U.S. $) 7-31-96 7-26-95 Stores Stores
General Merchandise
United States $ 7,336 $ 7,386 (0.7) 2.2
International 230 296 (22.1) (7.0) (a)
Total General Merchandise 7,566 7,682 (1.5) 1.9
Specialty Retail
Builders Square 746 758 (1.6) (0.8)
Total Kmart $ 8,312 $ 8,440 (1.5) 1.6
(a) International Comparable Store Sales change is calculated on sales
in the applicable local currency.
OPERATING RESULTS
(Millions U.S. $) 7-31-96 7-26-95 % Change
General Merchandise
United States $ 155 $ 133 16.5
International (15) (10) (50.0)
Total General Merchandise 140 123 13.8
Specialty Retail
Builders Square 19 9 111.1
Total Kmart $ 159 $ 132 20.5
For the comparable 13 week periods the pretax LIFO charge was $7
million for both 1996 and 1995.
KMART CORPORATION
SALES AND OPERATING RESULTS BY BUSINESS
26 WEEKS ENDED JULY 31, 1996 AND JULY 26, 1995
SALES
% Inc. (Dec.)
All Comparable
(Millions U.S. $) 7-31-96 7-26-95 Stores Stores
General Merchandise
United States $ 14,028 $ 13,950 0.6 2.9
International 513 545 (5.9) (3.7) (a)
Total General Merchandise 14,541 14,495 0.3 2.7
Specialty Retail
Builders Square 1,351 1,388 (2.7) (1.9)
Total Kmart $ 15,892 $ 15,883 0.1
2.3
(a) International Comparable Store Sales change is calculated on sales
in the applicable local currency.
OPERATING RESULTS
(Millions U.S. $) 7-31-96 7-26-95 % Change
General Merchandise
United States $ 213 $ 219 (b) (2.7)
International (16) (15) (6.7)
Total General Merchandise 197 204 (3.4)
Specialty Retail
Builders Square 19 (2)
Total Kmart $ 216 $ 202 6.9
(b) The 26 week period ended July 26, 1995 includes a one-time
gain from pension curtailment of $124 million.
For the comparable 26 week periods the pretax LIFO charge was
$15 million for both 1996 and 1995.
KMART CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
13 Weeks %
Ended Inc.
(Amounts in millions, except per share 7-31-96 7-26-95 (Dec.)
data)
Sales $ 8,312 $ 8,440 (1.5)
Cost of merchandise sold 6,508 6,544 (0.6)
Gross profit 1,804 1,896 (4.9)
Licensee fees and other income 65 63 3.2
Selling, general and administrative 1,710 1,827 (6.4)
expenses
Operating income 159 132 20.5
Interest expense, net 110 114 (3.5)
Income from continuing operations
before income taxes, equity
income and preferred dividends 49 18
Equity in net income of unconsolidated
companies 12 14 (14.3)
Income taxes 21 10
Dividends on convertible preferred
securities, net of tax 6 -
Net income from continuing operations 34 22 54.5
Loss on disposal of discontinued
operations, net of tax - (76)
Net income (loss) $ 34 $ (54)
Earnings (loss) per common share:
Continuing retail operations $ 0.07 $ 0.05
Discontinued operations - (0.17)
Net income (loss) $ 0.07 $ (0.12)
Weighted average shares outstanding 488.1 459.3
The consolidated statement of operations for the prior period
has been restated for discontinued operations.
KMART CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
26 Weeks %
Ended Inc.
(Amounts in millions, except per share 7-31-96 7-26-95
(Dec.)
data)
Sales $ 15,892 $ 15,883 0.1
Cost of merchandise sold 12,429 12,332 0.8
Gross profit 3,463 3,551 (2.5)
Licensee fees and other income 125 121 3.3
Selling, general and administrative 3,372 3,594 (6.2)
expenses
Gain on pension curtailment - (124)
Operating income 216 202 6.9
Interest expense, net 226 223 1.4
Loss from continuing operations before
income taxes, equity income
and preferred dividends (10) (21) 52.8
Equity in net income of unconsolidated
companies 14 16 (12.5)
Income taxes 2 (2)
Dividends on convertible preferred
securities, net of tax 6 -
Net loss from continuing operations (4) (3) (33.3)
Loss on disposal of discontinued
operations, net of tax (61) (79)
Net (loss) $ (65) $ (82)
Earnings (loss) per common share:
Continuing retail operations $ (0.01) $ (0.02)
Discontinued operations (0.13) (0.17)
Net income (loss) $ (0.13) $ (0.19)
Weighted average shares outstanding 484.7 459.0
The consolidated statement of operations for the prior period has
been restated for discontinued operations.
KMART CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
26 Weeks
Ended
(Amounts in millions) 7-31-96 7-26-95
Cash Flows From Operating Activities:
Net loss from continuing operations $ (4) $ (3)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 325 353
Increase in inventories (758) (518)
Increase in accounts payable 333 226
Deferred income taxes 125 164
Undistributed equity income and
dividends received 50 36
Decrease in other long-term liabilities (181) (220)
Changes in certain assets and liabilities 7 (563)
Net cash used for continuing operations (103) (525)
Net cash provided by discontinued
operations 41 162
Net cash used for operating activities (62) (363)
Cash Flows From Investing Activities:
Capital expenditures - owned property (128) (258)
Increase in property held for resale (600) (82)
Proceeds from asset sales 180 885
Other - net (1) 3
Net cash provided by (used for) investing
activities (549) 548
Cash Flows From Financing Activities:
Proceeds from long-term debt and notes
payable 1,461 161
Refinancing costs related to long-term
debt and notes payable (190) -
Reductions in long-term debt and notes
payable (2,225) (314)
Net proceeds from issuance of
convertible preferred securities 971 -
Reduction in capital lease obligations (68) (59)
Dividends paid - (169)
Other, net 26 9
Net cash used for financing activities (25) (372)
Net decrease in cash (636) (187)
Cash at beginning of period 1,095 480
Cash at end of period $ 459 $ 293
The consolidated cash flow statement for the prior period has
been restated for discontinued operations.
KMART CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in millions, except share data) 7-31-96 7-26-95 1-31-96
ASSETS
Current Assets:
Cash $ 459 $ 293 $ 1,095
Merchandise inventories 7,393 7,371 6,635
Other current assets 1,368 1,406 1,092
Net current assets of discontinued
operations 149 88 -
Total current assets 9,369 9,158 8,822
Investments in affiliated retail
companies 51 73 94
Property and equipment, net 5,018 5,934 5,301
Other assets and deferred charges 1,317 232 866
Net long-term assets of discontinued
operations - 411 314
TOTAL ASSETS $ 15,755 $ 15,808 $ 15,397
LIABILITIES AND EQUITY
Current Liabilities:
Long-term debt due within one year $ 125 $ 29 $7
Notes payable - 846 -
Trade accounts payable 2,326 2,865 1,993
Accrued payrolls and other liabilities 989 889 1,076
Taxes other than income taxes 295 341 188
Income taxes 32 79 -
Total current liabilities 3,767 5,049 3,264
Capital lease obligations 1,564 1,725 1,629
Long-term debt and notes payable 3,054 1,956 3,935
Other long-term liabilities 1,152 1,232 1,289
Convertible preferred securities, net 980 - -
Preferred stock - 131 -
Common stock, 1,500,000,000 shares
authorized; shares issued 486,935,732 and
465,279,932, respectively 487 465 486
Capital in excess of par value 1,612 1,515 1,624
Retained earnings 3,261 3,878 3,326
Treasury shares and restricted stock (54) (93) (92)
Foreign currency translation adjustment (68) (50) (64)
TOTAL LIABILITIES AND EQUITY $ 15,755 $ 15,808 $ 15,397
The consolidated balance sheet for the prior periods have been
restated for discontinued operations.