DENVER, CO -- Sept. 10, 1996 -- Samsonite Corporation (Nasdaq:
SAMC) today announced that results for the three months ended July
31, 1996 reflect an 11.8% increase in adjusted operating income on a
7.0% increase in net sales.
Operating earnings, adjusted to exclude $2.6 million in
separation expenses associated with the departure of the Company's
former Chief Executive Officer and prior to the effects of
amortization of reorganization value in excess of identifiable
assets ("Reorganization Amortization"), increased 11.8% to
$11,078,000 during the second quarter of the current year versus
$9,907,000 during the same quarter of the prior year. Net sales for
the three months ended July 31, 1996 increased 7.0% to $179,440,000
versus $167,670,000 in the same period during the prior year.
Earnings before minority interest, interest expense, taxes,
depreciation and amortization, separation expenses associated with
the CEO departure, and other income ("Adjusted EBITDA"), a measure
of core business cash flow, for the three months ended July 31, 1996
was $18,787,000 compared to $17,425,000 for the same period in the
prior year, an increase of 7.8%. For the three months ended July
31, 1996 the Company reported a net loss of $6,183,000 or $.39 per
share which improved from a net loss of $17,491,000 or $1.10 per
share during the second quarter of the prior year. Excluding the
effects of Reorganization Amortization and the extraordinary item
during the prior year, the Company's net income would have been
$2,996,000 or $.18 per share and $4,502,000 or $.28 per share for
the three months ended July 31, 1996 and 1995, respectively. This
decrease results primarily from higher nonrecurring other income in
the previous year.
Chief Financial Officer Tom Sandler stated, "Looking to the
future, we are embarking on a comprehensive corporate strategy that
we believe will accelerate financial performance. This program will
enable us to continue to achieve strong top line growth driven by
new product introductions with progressively stronger margins.
Margin improvements will be driven by increases in product pricing,
which we already announced effective October 1st, and cost structure
reductions, which began impacting the Company's business in August."
For the six month period ended July 31, 1996 net sales increased
7.3% to $349,307,000 from $325,423,000 for the same period in 1995.
Most recent six month operating income, adjusted to exclude
separation expenses associated with the departure of the Company's
former Chief Executive Officer and prior to the effects of
Reorganization Amortization, was $24,108,000 compared to $21,234,000
for the same period in the previous year, an increase of 13.5%.
Adjusted EBITDA for the six months ended July 31, 1996 improved to
$39,217,000 compared to $36,062,000 for the same period in the prior
year, an increase of 8.7%. For the six months ended July 31, 1996,
the Company reported a net loss of $16,985,000 or $1.07 per share,
which improved from $30,848,000 or $1.97 per share for the same
period in the prior year. The net loss during the second quarter of
the prior year includes an extraordinary item charge of $8,042,000
or $.52 per share for the early extinguishment of debt.
Excluding the effects of Reorganization Amortization and the
extraordinary item in the prior year, the Company's net income for
the six months ended July 31, 1996 and 1995 would have been
$5,962,000 or $.37 per share and $4,730,000 or $.30 per share,
respectively.
Chief Executive Officer Richard Nicolosi stated, "I am convinced
that we are on track to an increasingly successful future for
Samsonite." He added, "From a growth in sales standpoint, all three
of our brands are now introducing an innovative and highly consumer-
preferred upright product called EZ CART(TM), which incorporates a
four wheel transport system that is more maneuverable and more
stable than traditional upright luggage products and shifts the
weight load of luggage from the consumer to the ground. Customer
acceptance of EZ CART(TM) has been excellent and its introduction
will be supported by television and co-op trade advertising during
the peak Christmas season.
"From a product pricing standpoint, by October 1996 we will have
completed implementation of increased pricing on a global basis.
"As to our cost structure, we are implementing some cost and
balance sheet improvements which will begin impacting performance
throughout the balance of the year. While we have not yet completed
an assessment of the full magnitude of our cost restructuring
activities, this too will certainly be completed by the end of the
year. Net, we believe we will quickly accelerate Samsonite's
financial performance."
Samsonite is a leading manufacturer and distributor of luggage
and business cases, marketing the majority of its products under the
Samsonite, American Tourister and Lark brand names.
Samsonite Corporation Earnings Summary
July 31, 1996 and 1995
(in thousands except per share data)
Three months ended Six months ended
July 31 July 31
1996 1995 1996 1995
Net sales $179,440 $167,670 $349,307 $325,423
Cost of goods sold 110,748 103,503 211,950 197,291
Gross profit 68,692 64,167 137,357 128,132
Selling, general and
administrative expenses 57,986 52,073 111,391 102,534
Amortization of intangible
assets 11,407 16,138 27,405 31,900
Operating loss (701) (4,044) (1,439) (6,302)
Interest expense (8,924) (10,301) (18,034) (19,924)
Other income, net 4,997 8,430 7,331 6,985
Loss before income taxes
and minority interest (4,628) (5,915) (12,142) (19,241)
Income taxes (1,403) (3,474) (4,400) (3,368)
Minority interest in
earnings of subsidiaries (152) (60) (443) (197)
Extraordinary item -- (8,042) -- (8,042)
Net loss ($6,183) ($17,491) ($16,985) ($30,848)
Net loss per share
Loss before extraordinary
item ($0.39) (0.59) (1.07) (1.45)
Extraordinary item -- (0.51) -- (0.52)
Net loss ($0.39) ($1.10) ($1.07) ($1.97)
EPS (as adjusted ..) $0.18 $0.28 $0.37 $0.30
.. Excludes Reorganization Amortization and extraordinary item.
PITTSBURGH, PA -- Sept. 10, 1996 -- MK Rail Corporation (Nasdaq:
MKRL) today completed a debt-reduction transaction by repaying a
note owed to Morrison Knudsen Corporation (NYSE: MRN) at a discount
to face value. In the transaction, MK Rail repaid $57.3 million of
debt, including accrued interest, for $34.6 million.
As a result of this debt repayment, non-core asset sales and MK
Rail's improved cash flow from operations in 1996, the company will
have reduced total debt from about $120 million at the beginning of
the year to about $65 million by the end of the third quarter.
During the same period, stockholders' equity will have increased
from $94.5 million to about $115 million and book value per share of
common stock will have increased from $5.38 to about $6.55. In
addition, through the note repayment the company expects to reduce
annual interest expense by about $1 million.
"This debt-reduction transaction represents the final step in
the turnaround plan that we articulated at the beginning of this
year," said John C. (Jack) Pope, the company's chairman. "MK Rail
is now profitable and has a very strong balance sheet which should
enable us to invest in the future growth of our businesses."
In conjunction with the Morrison Knudsen note repayment,
Morrison Knudsen expects to emerge from bankruptcy and merge with
Washington Construction Inc. (NYSE: WAS). As part of its bankruptcy
plan, Morrison Knudsen plans to distribute its 63 percent ownership
of MK Rail stock, about 11.1 million shares, to its creditors and,
in certain circumstances, its current stockholders.
The stock distribution is expected to occur during the first
week of October 1996, at which time Morrison Knudsen will no longer
be an MK Rail stockholder.
Also, Robert S. Miller Jr. will resign from the MK Rail Board of
Directors, effective Sept. 11. Miller had been the chairman of
Morrison Knudsen and will be the vice chairman of Morrison Knudsen
following its merger with Washington Construction.
MK Rail is a leader in the manufacturing and distribution of
engineered locomotive components; provides locomotive fleet
maintenance and overhauls; and manufactures switcher locomotives.
CONTACT: Tim Wesley of MK Rail, 412-237-2250, ext. 161
DALLAS, TX -- Sept. 10, 1996 -- FoxMeyer Health Corporation (NYSE:FOX) today announced that
Gordon Capital has agreed to purchase 14.25 million special warrants
from FoxMeyer Health Corporation at a purchase price of C$4.85 per
special warrant. Each special warrant is convertible into one common
share of FoxMeyer Canada, Inc. for no additional consideration. Of
the common shares to be sold, 4.8 million will be acquired by
FoxMeyer Health Corporation through the exercise of 4.8 million
options for an aggregate consideration to FoxMeyer Canada of C$14.4
million. The transaction, which is scheduled to close on September
20, 1996, will result in the disposition of FoxMeyer Health
Corporation's entire position in FoxMeyer Canada and will generate
for FoxMeyer Health Corporation approximately US$38 million in cash,
after expenses.
In addition, FoxMeyer Canada has agreed to acquire U.S.
HealthData Interchange, Inc. ("USHDI"), a medical and hospital
claims management subsidiary of FoxMeyer Health Corporation and part
of the Company's remaining CareStream operations, for US$10 million
and warrants to purchase 1,500,000 common shares of FoxMeyer Canada
at price of C$4.85 per share. Of the US$10 million in proceeds, the
Company expects to receive US$6 million in cash and a US$4 million,
18-month secured note. The transaction, which is expected to close
on September 20, 1996, is subject to FoxMeyer Canada's Board of
Directors, regulatory and other approvals and is conditioned upon
entering into a definitive agreement.
The Company said that consistent with the plans it has outlined
for FoxMeyer Health's asset portfolio, the Company is capitalizing
on several timely opportunities to monetize its holdings. As a
result of the sale of its FoxMeyer Canada position and the
disposition of USHDI, FoxMeyer Health Corporation expects to realize
cash proceeds of approximately $44 million, as well as a sizable
capital gain associated with these transactions. While the proceeds
from these asset sales have yet to be earmarked for any specific
purpose, the Company will continue to evaluate every alternative for
recognizing the value of FoxMeyer Health's assets for shareholders.
FoxMeyer Health Corporation is a leading provider of health care
products and information-based services in North America.
CONTACT: Morgen-Walke Associates:
Betsy Brod/Alex Gleeson ;
Media: Michelle Zawrotny
(212) 850-5600