Ladd Reports $1.8 Million Profit For Third Quarter
HIGH POINT, N.C., Oct. 17, 1996 - LADD Furniture, Inc. today reported net
earnings of $1.8 million or $0.23 per share for this year's third quarter, up from
1996's second quarter net earnings of $1.2 million or $0.15 per share. In the third
quarter of 1995, the company earned $1.9 million or $0.24 per share. Net sales for
this year's third quarter totalled $124.1 million, down from $159.1 million in the
same period of fiscal 1995, with most of the decline resulting from LADD's
divestiture of several of its business units in late 1995 and early 1996.
LADD president and CEO Fred L. Schuermann, Jr. said, "Excluding the divestiture
companies, our 1996 third quarter net sales increased slightly compared to those of
the prior quarter." He noted, "We have had several nonrecurring transactions during
the past two quarters which make LADD's reported results difficult to evaluate. In
this year's second quarter, we recorded a substantial nonrecurring gain resulting
from the curtailment of the company's retiree health care plan, and then during the
September quarter we recorded a gain of $1.7 million in conjunction with the
settlement of a long-standing insurance claim. When our results are adjusted to
exclude these two nonrecurring items, along with the operations of our divested
companies and the various restructuring costs we have incurred, LADD's pretax
profit was $3.7 million higher in the third quarter of this year than in the second
quarter of fiscal 1996."
Schuermann added, "I am encouraged that this increase in LADD's profitability was
accomplished despite an overall flat sales environment, and I am particularly
pleased with the continuing progress this management team is achieving during 1996
throughout the company. In addition," he concluded, "the general tone of business in
the residential furniture industry has improved in the last month or so. This should
bode well for the International Home Furnishings Market which began here in High
Point today. We are very excited with the products we will be presenting during the
market this week and next."
LADD executive vice president and chief financial officer William S. Creekmuir
said he was pleased to report that the company's total debt was reduced by $9.8
million during the third quarter, to $143.4 million as of September 28, 1996.
Creekmuir noted that during the second and third quarters combined, the total debt
reduction was $13.9 million. "Equally important," he said, "our inventories declined
by $8.0 million in the third quarter." He said total inventories were $86.4 million as
of September 28, 1996, down from $94.4 million three months earlier.
Headquartered in High Point, NC, LADD is one of the largest North American
manufacturers of residential furniture. The company markets its wide range of
residential wood and upholstered furniture domestically under the major brand
names American Drew, American of Martinsville, Barclay, Clayton Marcus,
Kenbridge, Lea, Pennsylvania House and Pilliod, and exports these same brand
name products worldwide through LADD International. Under the American of
Martinsville name, LADD is also one of the world's leading suppliers of guest room
furniture to the hotel/motel industry, as well as to health care facilities, retirement
homes and governmental and university dormitory markets. LADD also owns and
operates LADD Transportation, a support company. LADD's stock is traded on the
Nasdaq National Market under the symbol LADF.
LADD FURNITURE, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (PRELIMINARY AND UNAUDITED)
13 Weeks Ended
Sept. 28, 1996 Sept. 30, 1995
Net sales $124,094,000 159,144,000
Earnings before interest
and income taxes 6,461,000 5,030,000
Interest expense 3,182,000 2,997,000
Earnings before income taxes 3,279,000 2,033,000
Income tax expense 1,477,000 142,000
Net earnings $ 1,802,000 1,891,000
Net earnings per common share $ 0.23 0.24
Weighted average number of
common shares outstanding 7,721,165 7,725,805
39 Weeks Ended
Sept. 28, 1996(a) Sept. 30, 1995(b)
Net sales $390,034,000 461,521,000
Earnings (loss) before
interest and income taxes 1,577,000 (33,353,000)
Interest expense 8,900,000 8,646,000
Loss before income taxes (7,323,000) (41,999,000)
Income tax benefit 3,295,000 16,591,000
Net loss $(4,028,000) (25,408,000)
Net loss per common share $ (0.52) (3.29)
Weighted average number of
common shares outstanding 7,722,924 7,718,722
NOTES:
(a) The 1996 nine-month results include a pretax restructuring charge of
$4.0 million.
(b) The 1995 nine-month results include a pretax restructuring charge of
$25.7 million and a non-cash charge of $10.2 million.
SOURCE LADD Furniture, Inc./CONTACT: John J. Ong of LADD Furniture, Inc.,
910-888-6353, or ongnr.infi.net /(LADF)
Zeigler Reports Third Quarter 1996 Earnings
FAIRVIEW HEIGHTS, Ill., Oct. 17, 1996 - The following was issued today by
Zeigler Coal Holding Company:
ZEIGLER COAL HOLDING COMPANY
Financial Summary Table
(In millions, except per share data)
Quarter ending Nine Months
9/30/96 9/30/95 1996 1995
Total Revenues $ 193.2 $198.1 $556.9 $591.5
Net Income 17.0 12.4 39.8 39.6
Net Income Before
Special Items.. 17.3 12.2 41.1
29.8
Earnings Per Share .60 .44 1.40 1.40
Earnings Per Share
Before Special Items.. .61 .44 1.45
1.05
EBITDA 41.4 40.2 110.3 124.5
EBITDA Per Share 1.46 1.42 3.89 4.39
.. Excludes 1996 stock appreciation unit (SAU) revaluation and
1995 contract gain and SAU revaluation.
The following release contains forward-looking statements which are subject to
risks and uncertainties inherent in the company's business. The company's actual
results could differ materially from those anticipated in those forward-looking
statements as a result of certain factors, including those set forth in documents filed
with the Securities and Exchange Commission, within the company's Forms 10-K
and 10-Q.
Zeigler Coal Holding Company (NYSE: ZEI) today reported third quarter 1996 net
income of $17.3 million, or 61 cents per share, a 39% earnings-per-share increase
over third quarter 1995 net income of $12.2 million, or 44 cents per share, absent
special items.
Third quarter 1996 earnings included an after-tax charge of $0.3 million, or 1 cent
per share, relating to the periodic revaluation of the company's stock appreciation
units (SAUs). In the third quarter of 1995, the company reported net income of $12.4
million, or 44 cents per share, which included an after-tax SAU benefit of $.2
million.
For the nine months ended September 30, earnings increased 38% from 1995. 1996
earnings for the period totaled $41.1 million, or $1.45 per share compared to $29.8
million, or $1.05 per share, for the first nine months of 1995, excluding the special
items.
"I am pleased by Zeigler's earnings performance, highlighted by our continued
margin expansion in our coal segment," said Zeigler President and Chief Executive
Officer Chand B. Vyas. "Perhaps more importantly, this quarter we sowed the seeds
for greatly enhanced long-term growth prospects via our emerging Technology and
Power segments."
"As a result, I expect Zeigler's earnings to beat the consensus analyst estimates of
$1.97 for 1996 by 3 to 5 cents," said Vyas. "I also would not quarrel with the 1997
earnings consensus of $2.21, which may in fact prove to be conservative."
Expanded coal margins highlight performance For the third quarter, Zeigler's coal
segment improved operating earnings by 27% to $30.3 million over the same period
in 1995. Average per-ton margins improved 58% to $2.12. This improvement was
driven primarily by higher pricing and a strategic shift toward lower sulfur and
higher margin coal.
Year-to-date, the coal segment improved operating earnings by 12% to $73.3
million over the first nine months of 1995. The average per-ton margins for the first
nine months of 1996 increased by 25% to $2.71, reflecting continued cost
improvements and firm prices.
Zeigler's Americoal Development Company subsidiary experienced a decrease in
operating earnings of $1.6 million for the third quarter 1996 over the same period in
1995, largely due to the scheduled expiration of Department of Energy cofunding for
ENCOAL Corporation's clean coal demonstration plant, along with timing
differences related to receipts for farm, timber and asset sales. For the first nine
months of 1996, non-mining operating income increased 8% to $7.3 million over the
same period of 1995.
Zeigler continued to generate strong cash flow in the third quarter, producing $41.4
million, or $1.46 per share, of earnings before interest, taxes, depreciation,
depletion and amortization (EBITDA). Net interest expense decreased $.9 million,
or 14%, reflecting $13.0 million in lower debt from the third quarter of 1995.
Growth projects advanced in Coal, Technology and Power Segments During the
third quarter, Zeigler made progress in advancing growth projects within the Coal
segment as well as the emerging Technology and Power segments.
"With electric utility deregulation, we are faced with an astounding array of growth
opportunities," said Vyas. "Earlier this year I articulated Zeigler's strategies of
greater customer alignment and growth along a chain of economic value for
electricity that includes a number of core activities: fuel, transportation, clean air
technologies, and power generation, marketing, transmission and distribution. We
are making significant progress toward implementing these strategies through our
Coal segment and our emerging Technology and Power segments, either of which
could eventually outgrow our successful core business of coal."
COAL SEGMENT
Consistent with Zeigler's objective of preserving or enhancing contract value while
assisting customers in their positioning for a deregulated environment, Zeigler
announced in July that it had forged comprehensive new coal supply agreements with
Carolina Power & Light Company. The new agreements were designed to improve
the customer's competitive position, enhance contract flexibility and extend the two
companies' business relationship. In addition to further aligning with the company's
largest customer, Zeigler foresees the potential to improve revenues, earnings and
cash flows as a result of the new agreements.
In the third quarter, Zeigler's coal segment continued to implement its previously
announced strategy of transitioning away from lower-margin operations and
uncommitted high sulfur coal. Development of the North Rochelle Mine in Wyoming
continues with full scale production expected to begin in the second half of 1998.
TECHNOLOGY SEGMENT
Zeigler's Liquids from Coal (LFC) investment continues to move toward full
commercialization. The proprietary technology, demonstrated at ENCOAL
Corporation's LFC demonstration plant, takes low sulfur, low BTU coals and
converts them into higher-grade solid and liquid products.
A Zeigler subsidiary has begun preliminary engineering work for a potential
full-scale LFC plant in Wyoming that would process approximately 6 million tons of
coal feedstock per year, and is in discussions with potential customers for the
products. The company is also in discussions regarding a similarly-sized potential
plant in Indonesia.
POWER SEGMENT
Discussions with prospective customers are already taking place through Zeigler's
new energy trading and marketing subsidiary, EnerZ Corporation, which was
launched to take advantage of emerging market opportunities growing out of utility
deregulation. EnerZ Corporation has filed an application with the Federal Energy
Regulatory Commission (FERC) for status as a wholesale power marketer. EnerZ
expects to receive its approval from FERC later this fall, and has already set up an
office in the New York area under the leadership of President Tayeb Tahir, an
experienced leader in the power and gas industries.
In the third quarter, a Zeigler subsidiary aligned with an affiliate of another major
customer. Southern Electric International joined in the offer by NRG Energy and
Zeigler to purchase the non-nuclear assets of Cajun Electric Power Cooperative of
Baton Rouge, La. The newly combined offer was incorporated in an amended
reorganization plan filed by the Cajun trustee with the bankruptcy court. Under the
plan, which is subject to confirmation by the bankruptcy court, the assets would be
acquired by Louisiana Generating, LLC, which would be owned by affiliates of
Southern Electric, NRG Energy and Zeigler. SEI is an affiliate of Southern
Companies, one of the largest coal- fired utilities in the United States and an
important existing customer.
Zeigler coal annually fuels more than 50 billion kilowatt hours of power in the
United States, or nearly 2 percent of all domestic electricity. The Zeigler family of
companies is among the largest coal producers and marketers in the United States,
and controls more than 1.3 billion tons of economically recoverable coal reserves,
including 1 billion tons of low sulfur coal. Zeigler subsidiaries currently operate
underground and surface coal mining complexes in Illinois, Kentucky, Ohio, West
Virginia and Wyoming, which mine primarily steam coal for electricity generation.
Zeigler subsidiaries also operate two East Coast import/export terminals and the
ENCOAL clean coal technology demonstration plant. A Zeigler affiliate has a joint
bid with Southern Electric International and NRG Energy pending to purchase out of
bankruptcy the non-nuclear assets of Louisiana-based Cajun Electric Power
Cooperative. EnerZ Corporation, an energy trading and marketing firm, has been
created to take advantage of opportunities growing out of utility deregulation.
ZEIGLER COAL HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements Of Operations
(Amounts in thousands, except per share amounts)
Quarter Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES:
Coal sales $186,662 $191,248 $533,705 $570,641
Other revenues 6,560 6,840 23,236 20,813
Total revenues 193,222 198,088 556,941 591,454
COSTS AND EXPENSES:
Cost of coal sales 156,402 167,396 460,414 505,040
Selling, general and
administrative expenses 4,905 4,238 13,764 12,403
Revaluation of stock
appreciation units 455 (188) 1,782 231
Provision for asset impairments
and accelerated mine closings -- -- -- 32,262
Other costs and expenses 5,495 4,198 15,892 13,982
Total costs and expenses 167,257 175,644 491,852 563,918
OTHER INCOME:
Proceeds from contract
settlement -- -- -- 45,500
INCOME BEFORE INTEREST AND
INCOME TAXES 25,965 22,444 65,089 73,036
NET INTEREST EXPENSE (5,494) (6,389) (17,146) (21,275)
INCOME BEFORE INCOME TAXES 20,471 16,055 47,943 51,761
INCOME TAXES 3,480 3,693 8,165 12,170
NET INCOME $16,991 $12,362 $39,778 $39,591
WEIGHTED AVERAGE
SHARES OUTSTANDING 28,361 28,356 28,359 28,356
EARNINGS PER COMMON SHARE $ 0.60 $ 0.44 $ 1.40 $ 1.40
ZEIGLER COAL HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands, except per share amounts)
September 30, December 31,
September 30,
1996 1995 1995
(Unaudited) ..
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 88,704 $ 13,119 $ 22,339
Receivables (net of allowances
of $2,583, $2,611 and $2,905) 62,227 72,087 70,501
Inventories 41,713 50,359 62,398
Income taxes receivable 1,773 -- --
Deferred income taxes 4,712 8,357 16,756
Other current assets 5,533 3,426 5,177
Total current assets 204,662 147,348 177,171
PROPERTY, PLANT AND EQUIPMENT, at
cost 1,136,605 1,161,3701,218,299
Less - Accumulated depreciation,
depletion and amortization (313,179) (302,714)
(297,954)
Property, plant and
equipment, net 823,426 858,656 920,345
OTHER LONG-TERM ASSETS 13,086 19,237 17,300
TOTAL ASSETS $1,041,174 $1,025,241 $1,114,816
.. Condensed from audited financial statements.
ZEIGLER COAL HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands, except per share amounts)
September 30, December 31,
September 30,
1996 1995 1995
(Unaudited) ..
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 36,706 $ 44,434 $ 34,001
Accrued payroll and
related benefits 24,303 25,264 31,397
Deferred revenue 7,610 -- 10,204
Other accrued expenses 68,429 47,870 54,209
Total current liabilities 137,048 117,568 129,811
LONG-TERM DEBT 344,770 344,770 357,770
ACCRUED POSTRETIREMENT
BENEFIT OBLIGATIONS 245,088 255,839 250,821
ACCRUED PNEUMOCONIOSIS BENEFITS 48,057 49,424 56,907
ACCRUED MINE CLOSING COSTS 77,175 105,676 95,964
DEFERRED INCOME TAXES 9,400 -- 25,981
OTHER LONG-TERM LIABILITIES 63,266 70,478 63,854
COMMITMENTS AND CONTINGENCIES -- -- --
Total liabilities 924,804 943,755 981,108
SHAREHOLDERS' EQUITY:
Common stock - $0.01 par value
- 50,000 shares authorized; 28,362
shares issued at September 30, 1996,
and 28,356 at December 31, 1995,
and September 30, 1995 284 283 283
Preferred stock -- -- --
Capital in excess of par value 72,013 71,945 71,945
Retained earnings 44,073 9,258 61,480
Total shareholders' equity 116,370 81,486 133,708
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,041,174 $1,025,241 $1,114,816
.. Condensed from audited financial statements.
ZEIGLER COAL HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements Of Cash Flows
(Amounts in thousands)
Nine Months Ended
September 30,
1996 1995
(Unaudited) (Unaudited)
OPERATING ACTIVITIES:
Net income $39,778 $39,591
Adjustments for differences between
net income and cash flows from
operating activities:
Depreciation, depletion and
other amortization 45,791 52,131
Gain on property, plant and equipment (2,308) (979)
Deferred income taxes 15,287 2,840
Prepaid pension costs 2,868 2,235
Postretirement benefits (10,751) 1,500
Pneumoconiosis benefits (1,367) (14,133)
Mine closing costs (5,027) (7,842)
Workers' compensation 6,541 5,766
Postemployment benefits 457 1,702
Stock appreciation units (10,732) (383)
Cash paid for sale of Indiana assets (7,000) --
Proceeds from contract settlement -- 45,500
Net gain on contract settlement -- (13,238)
Other noncash items (5,842) (1,670)
Net decrease in working capital 27,536 25,211
Total adjustments to net income 55,453 98,640
Net cash provided by
operating activities 95,231 138,231
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant
and equipment (19,867) (37,895)
Proceeds from sales of property,
plant and equipment 4,407 2,962
Net cash used in investing activities (15,460) (34,933)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issued
under stock option plan 68 --
Repayment of long-term debt -- (92,288)
Payment of dividends (4,254) (4,254)
Net cash used in financing activities (4,186) (96,542)
NET INCREASE IN CASH AND CASH EQUIVALENTS 75,585 6,756
CASH AND CASH EQUIVALENTS, BEGINNING 13,119 15,583
CASH AND CASH EQUIVALENTS, ENDING $88,704 $22,339
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during period for:
Interest $12,826 $15,700
Income taxes, net of refunds (3,078) 8,063
SOURCE Zeigler Coal Holding Company/CONTACT: Vic Svec, 618-394-2430, or
Jacqueline E. Burwitz, 618-394-2570, both of Zeigler Coal Holding Company/
50-OFF Stores Announces Current Plans in Bankruptcy
SAN ANTONIO, Texas, Oct. 17, 1996 - 50-OFF Stores, Inc., currently operating in
a Chapter 11 bankruptcy proceeding, is formulating a reorganization plan which it
expects to file by year end. There are a number of alternatives that are being
considered, including, but not limited to, a financial reorganization around 40- 50
stores (with annual revenues of $70-90 million) and a merger or sale of all or a part
of the company. 50-OFF expects to operate about 55 stores (located in Texas,
Louisiana, Oklahoma, New Mexico, Tennessee and Florida) through the holiday
season. The company has been implementing a business plan focused on the
conversion of its primary locations to a new concept called "LOT$OFF," and 19 of
its stores have been converted as of the filing of the bankruptcy petition on Oct. 9,
1996. While plans are in place to convert additional locations, the conversion
schedule is being reviewed given the bankruptcy filing.
50-OFF is currently exploring the interest of third parties in: 1) providing capital for
a reorganization plan; 2) a merger or strategic affiliation with the company; 3)
purchasing the company; and 4) purchasing some or all of the company's assets. At
this early stage of the bankruptcy process, the company's first choice is to reorganize
the company with additional capital if that alternative is available in the context of a
reorganization plan which treats the creditors and shareholders fairly. Other
alternatives, however, are going to receive equal and prompt attention to insure that
the reorganization plan contains what management believes is the best alternative for
the creditors and shareholders.
Given the interest of the company in promptly filing a reorganization plan, the
exploration process is being accelerated in order to quickly determine the
opportunities that may exist for 50- OFF. The objectives are to find the highest and
best value for the creditors and shareholders and to preserve jobs for the company's
dedicated employees. With this in mind, the company has engaged the services of
experienced outside professionals to assess the alternatives and to work with the
company during the bankruptcy proceedings.
With respect to those proceedings in the United States Bankruptcy Court, Judge Lief
M. Clark ordered yesterday that Gordan Brothers Partners, Inc. immediately pay in
excess of $1.7 million of cash it was holding to 50-OFF. The cash will be used by
the company along with other monies previously ordered available by the Court to
purchase needed inventories to prepare its 50-OFF and LOT$OFF stores for the
holiday shopping season.
SOURCE 50-OFF Stores, Inc. /CONTACT: Media -- Charles Fuhrmann, CEO,
210-804-4904, or Creditor - 210-804-5357, both of 50-OFF Stores, Inc./
County Seat to Restructure Under Chapter 11; Says it Will Close 200 Unprofitable
Stores, Implement Strategy Aimed at Redefining Market and Improving Operations
DALLAS, TX - Oct. 17, 1996 - County Seat, Inc. said today that while it continues
to implement a program to refocus and recapture its position as the pre-eminent
retailer of brand-name and private- label jeans and casual wear, it has filed to
restructure under Chapter 11 of the Bankruptcy Code. The company said it has
received commitments for $150 million in debtor-in-possession (DIP) financing
from its existing bank group, led by Bankers Trust as agent, that will enable it to
continue to operate during the restructuring period.
In addition, the company said that it has been negotiating with representatives of the
holders of approximately two-thirds of its outstanding 12% Senior Subordinated
Notes due 2002 and, based upon those negotiations, is hopeful that it will be able to
reach an agreement providing for the conversion of such Notes and certain other
unsecured obligations into substantially all of the equity of the reorganized company.
According to Gilbert C. Osnos, chairman of Osnos & Co., Inc., a management
renewal firm, who was named interim chief executive officer of County Seat at the
beginning of August, "The dynamic nature of the market demands that retailers be
prepared to move quickly to capitalize on changing consumer tastes and trends and
to remain competitive. While County Seat continues to have great underlying
strengths and important name recognition in the marketplace, we have developed and
are currently implementing a strategy to transform the company and preserve our
business. At the same time," Mr. Osnos said. "We must restructure the company's
debt to reflect the realities of today's retail environment.
"Chapter 11 allows us to accelerate our planned improvements to ensure a strong
future for our company. It will enable us to capitalize on opportunities resulting from
improvements in operations and merchandising and allow us to achieve our
restructuring objectives in an orderly, timely manner."
Mr. Osnos announced a number of key elements of the company's restructuring:
Close approximately 200 unprofitable stores and stores that no longer
reflect the company's strategic direction. Reduce working capital requirements for
inventory, improve margins and profitability. Eliminate excess overhead. Refocus
County Seat as a chain of destination stores through expanded
emphasis on private label merchandise, unique styling, selective resourcing and
more directed consumer marketing. Redirect merchandise strategies to assure a
continuous flow of fresh
offerings of fashion merchandise. Broaden the chain's historic emphasis on denim
jeans to include other
classifications of casual apparel. Improve systems to expand the flow of information
and accelerate response time for greater impact on purchasing and marketing
decision.
"Looking ahead, the $150 million financing package we have arranged is more than
adequate to fund our ongoing operations. Our stores are well stocked, and we fully
expect our suppliers to work with us during the restructuring period as they have
with the many other retail companies that have faced similar situations," Mr. Osnos
said.
"With the support of our vendors and the hard work of our employees, we will be
able to earn the continued loyalty of our customers, and we will come through this
process a stronger, more competitive company than ever before," he said.
The company's daily operations will continue as usual, and store hours will remain
the same. The company said that it expects policies regarding returns, exchanges,
layaways, gift certificates and credit cards transactions to remain unchanged.
Similarly, sales associates and other employees will continue to be paid as if no
filing had been made.
County Seat is one of the nation's largest specialty retailers selling both brand name
and private label jeans and casual wear. The company employs approximately 7,000
people in more than 740 stores in 48 states. An additional 700 are employed at
corporate offices in Dallas and Eden Prairie, Minn., and at a distribution center in
Brooklyn Park, Minn.
County Seat, Inc. and its subsidiaries filed Chapter 11 in the U.S. Bankruptcy Court
in Wilmington, Delaware.
SOURCE County Seat, Inc. /CONTACT: Sandra Sternberg of Sitrick and Company,
972-248-5213; or Ann Julsen, 612-829-2006 or 310-788-2850/
Sybase, Inc. Posts Third Quarter Operating Profit Before Restructuring Charge
EMERYVILLE, Calif., Oct. 17, 1996 - Sybase, Inc. (Nasdaq:SYBS) today
announced third quarter results for the period ended September 30, 1996. Third
quarter revenues were $250.2 million, up from $233.1 million recorded in the third
quarter of 1995. Before a $49.2 million charge to cover a restructuring of the
company's operations, third quarter 1996 operating profits totaled $0.6 million, up
from $0.1 million in the same period of 1995. After other income, the restructuring
charge and taxes, the net loss for the third quarter was $52.6 million, or $0.69 per
share.
"The best message we could send our customers was operating profitability - and
we succeeded," said Sybase, Inc. President and CEO, Mitchell Kertzman. "We have
significantly reduced our expense structure, carefully focusing our efforts. We
believe this quarter's results signify an important first step towards improved
financial performance," added Kertzman.
Early in the third quarter, Sybase restructured its operations by eliminating non-core
products and streamlining its organization and infrastructure. These efforts
contributed to a $23.8 million reduction in total operating expenses in the third
quarter as compared with the second quarter of 1996, before a one-time charge to
cover the restructuring costs.
The one-time charge, totaling $49.2 million, included approximately $17.0 million
for severance and related items, $15.7 million for facilities consolidation, $13.9
million for disposition expenses related to discontinued products and write-off of
capitalized software development costs, and $2.6 million for other restructuring
related items.
Complementing expense improvement efforts, marketing was also a key focus in the
quarter. "We are getting out the message that many existing Sybase customers have
known all along - that Sybase is the premier provider of databases, middleware and
tools for distributed computing solutions in heterogeneous environments," Kertzman
said.
During the quarter, Sybase, Inc. also announced it has consolidated worldwide
product businesses under David Litwack, former president of the Powersoft
Business Group, who was named executive vice president of products. "We are
implementing an organization based on entrepreneurial product lines, each charged
with aggressively pursuing its strategic market," said Litwack. "Sybase, Inc. is
strong in many technology areas and I am very confident of the solutions we are
bringing to the market today and in the future."
Adding to its strong base of products, Sybase, Inc. introduced several new offerings
in the third quarter:
.. Sybase IQ(TM) on IBM's AIX platform
.. QuickStart DataMart(TM), an integration of Sybase IQ with services and leading
partner products
.. SQL Anywhere(TM) Professional 5.5, adding break-through functionality
including the ability to extend the corporate Intranet to the mobile workforce
.. Replication Server(R) support for Lotus Notes .. Optima++(TM) Professional and
Enterprise versions, adding enhanced capabilities to the C++ tool for client/server
and Internet/Intranet development.
.. S-Designor(R) 5.1, providing enhanced modeling support for Visual Basic
developers
Also in the quarter, the Powersoft development tools division of Sybase, Inc.
announced a revolutionary industrial-strength web development environment,
NetImpact(TM) Studio. The product provides a sophisticated, "assistant-driven"
interface, database connectivity, script debugging, and other functions that high
productivity users have come to expect from Powersoft tools. NetImpact Studio is a
unique full-featured development tool for creating Web applications with dynamic
database content.
The strength of Sybase, Inc. technology was a critical factor in many significant
deals in the quarter. Important third quarter customers included Baxter Healthcare,
Barnett Bank, NYNEX, France Telecom, and Blue Cross of California, part of the
Wellpoint Health Networks.
"We have strong products and a healthy market," Kertzman stated. "We male as
concerning Sybase, Inc. financial goals, the anticipated impact of the Company and
its technology vision, rapid technological changes, competitive factors,
unanticipated delays in scheduled product availability dates (which could result
from various occurrences including development or testing difficulties, software
errors, shortages in appropriately skilled software engineers and project
management problems), interoperability of the Company's products with leading
software application products, general business conditions and market growth rates
in the client/server and Internet software markets, and other factors described in the
Company's Annual Report on Form 10-K filed with the SEC for the period ending
December 31, 1995 (Part I, Item 5, Future Operating Results) and the Company's
Form 10-Q filed with the SEC for the period ending June 30, 1996.
NOTE: SYBASE, Powersoft, Replication Server, Sybase IQ, Optima++, NetImpact
Studio, QuickStart DataMart, SQL Anywhere, and S-Designor are trademarks of
Sybase, Inc. or its subsidiaries. All other company and product names may be
trademarks of the respective companies with which they are associated.
SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
(In thousands, except
per share data) 1996 1995 1996 1995
Revenues:
License fees $147,219 $145,963 $445,618 $436,494
Services 102,994 87,111 298,146 252,842
Total revenues 250,213 233,074 743,764 689,336
Costs and expenses:
Cost of license fees 6,963 6,446 24,847 21,230
Cost of services 62,906 53,707 178,709 150,069
Sales and marketing 123,373 118,170 390,863 347,649
Product development and
engineering 39,217 38,412 128,393 110,620
General and administrative 17,163 17,173 55,625 49,168
Cost of merger 0 (980) 0 24,017
Purchase of in-process technology 0 0 0 19,965
Cost of restructure 49,232 0 49,232 0
Total costs and expenses 298,854 232,928 827,669 722,718
Operating income (loss) (48,641) 146 (83,905)
(33,382)
Other income and expense, net 1,112 1,921 5,791 6,717
Income (loss) before income
taxes (47,529) 2,067 (78,114)
(26,665)
Provision for income taxes 5,100 925 5,998
(1,201)
Net income (loss) ($52,629) $ 1,142 ($84,112)
($25,464)
Net income (loss) per share ($0.69) $0.02 ($1.13)
($0.36)
Shares used in per share
computation 75,748 75,753 74,755 70,922
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
December 31,
(In thousands, except share data) 1996 1995
(Unaudited)
Current assets:
Cash and cash equivalents $124,237 $180,877
Short-term cash investments 31,385 42,844
Total cash and short-term cash
investments 155,622 223,721
Accounts receivable, net 218,603 193,924
Deferred income taxes 23,966 24,947
Other current assets 17,696 18,905
Total current assets 415,887 461,497
Property, equipment and improvements, net 198,868 194,916
Deferred income taxes 16,088 16,088
Capitalized software, net 19,663 17,227
Other assets 71,372 76,564
TOTAL ASSETS $721,878 $766,292
Current liabilities:
Accounts payable $25,380 $36,939
Accrued compensation and related expenses 39,909 42,400
Accrued income taxes 31,249 28,373
Other accrued liabilities 79,110 75,215
Deferred revenue 149,245 138,264
Total current liabilities 324,893 321,191
Other liabilities 5,214 5,452
Stockholders' equity:
Preferred stock, $0.001 par value, 8,000,000
shares authorized; none issued or outstanding -- --
Common stock, $0.001 par value, 200,000,000
shares authorized; 76,327,977 shares issued
and outstanding (1995-72,645,734) 76 72
Additional paid-in capital 357,716 315,064
Retained earnings 40,988 128,255
Accumulated translation adjustments (7,009)
(3,742)
Total stockholders' equity 391,771 439,649
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $721,878 $766,292
SOURCE Sybase Inc./CONTACT: Marcie Powers, Public Relations,
510-922-3604, or marcie.powerssybase.com, or Randy S. Gottfried, Investor
Relations, 510-922-0691, or randy.gottfriedsybase.com, both of Sybase, Inc./
Integrated Health Services Acquires First American Health Care
OWINGS MILLS, Md., Oct. 17, 1996 - Integrated Health Services, Inc. (NYSE:
IHS) today announced that it has acquired First American Health Care of Georgia,
Inc. by merging it with a wholly owned subsidiary of IHS. First American, located
in Brunswick, Georgia, is the largest privately held provider of home health care
services in the country with over 400 agencies in 21 states and over seven million
patient visits annually. First American's unaudited annualized revenues total over
$400 million.
After the First American transaction, IHS will be the fourth largest provider of home
health services with approximately 600 agencies in 24 states and over $650 million
in home health care revenues. IHS will also be one of the largest providers of post-
acute services with a national post-acute care service network of over 1,000
locations in 40 states, providing home health care, subacute care, inpatient and
outpatient rehabilitation, respiratory therapy, skilled nursing facility care, hospice
care and diagnostic services.
Under the terms of the merger agreement, IHS will pay $154.1 million in cash at
closing with a contingent earnout of up to an additional $159 million payable in the
years 2000 through 2004.
First American Health Care had filed for protection under Chapter 11 in Bankruptcy
court due to the suspension of Medicare payments by the Health Care Financing
Administration (HCFA). The payments were suspended due to a dispute between
First American and HCFA involving cost disallowances and reimbursement
liabilities. Payments were resumed in February pursuant to orders from the
bankruptcy court. During the eight months of the bankruptcy proceedings, First
American was being operated by an interim operating officer and IHS engaged in
extensive transition consultation.
A settlement agreement has been signed between First American Health Care of
Georgia, the Health Care Financing Administration, the Office of the Inspector
General, the Department of Justice (DOJ) and IHS. The settlement agreement
provides that First American will pay $255 million to HCFA and DOJ and that IHS
will have no liability for activities occurring prior to its acquisition of First
American. The settlement agreement and the acquisition have been approved by the
bankruptcy court.
"The transaction with First American Health Care is especially important as we
build our post-acute care networks," said Dr. Robert N. Elkins, IHS's Chairman and
CEO. "Home health care services are critical components of post-acute care
services in a managed care environment where you need to provide quality outcomes
in a cost- effective manner. The ultimate goal is to get patients home."
Home health care is a growing industry that will become increasingly more
important in the next few years. The demand for home health services is fueled by
not only the demographics of the aging population but more importantly by the
patients preference to be at home rather than receiving facility-based care, the
technological advances that permit more and more services to be provided at home
and the trend for earlier discharge of patients from hospitals, subacute care and
long-term care facilities.
Over 90% of First American's agencies are accredited by both the Joint Commission
on Accreditation of Health Care Organizations (JCAHO) and Medicare. Home care
services provided by the company include skilled nursing services, infusion therapy
and therapeutic services including physical, speech and occupational therapy.
Adding a large national provider like First American to the Company's network of
services not only expands the size of the IHS home health business, but the location
of their agencies overlaps with the Company's existing post- acute care locations.
Approximately 80% of First American's agencies overlap in a market where IHS
currently offers a post-acute service.
Dr. Elkins continued, "Home health care not only complements our post-acute
network services because patients transfer between our other post- acute sites and
home care, but it also will serve as an entry point for many patients into the IHS
network. Patients who receive home health service from IHS will have the
opportunity to receive quality cost-effective care via our other post-acute services,
including inpatient and outpatient rehabilitation, subacute care, respiratory therapy
and diagnostics."
Integrated Health Services is a highly diversified health services provider, offering
a broad spectrum of post-acute medical and rehabilitative services through its
nationwide healthcare network. IHS's post-acute services include subacute care,
home health care, inpatient and outpatient rehabilitation, respiratory therapy, hospice
care, and diagnostic services. Supporting the full continuum of healthcare needs, IHS
currently operates over 1,000 post-acute service locations in 40 states throughout the
U.S.
SOURCE Integrated Health Services, Inc. /CONTACT: Robert N. Elkins, M.D.,
Chairman & CEO, or Marc B. Levin, Executive Vice President, both of Integrated
Health Services, Inc., 410-998-8400; or Anthony J. Russo, Ph.D., ext. 202, of
Noonan Russo Communications, Inc., 212-696-4455/ (IHS)