Acclaim Entertainment, Inc. to report loss for fourth quarter
GLEN COVE, N.Y.--Oct. 28, 1996--Acclaim Entertainment, Inc.
(NASDAQ:AKLM) today announced that it expects to report a net loss for Fiscal
Year 1996, which ended Aug. 31, 1996, significantly in excess of prior market
expectations and a net loss for the fourth quarter of Fiscal Year 1996 of at least $140
million due in part to the establishment of significant additional reserves. The
Company plans to announce its fourth-quarter and fiscal year-end results by the end
of November 1996.
This loss is attributable, in part, to the additional write-off of receivables, to the
establishment of further reserves in the fourth-quarter for receivables, to severance
charges and the reduction of certain deferred costs, as well as fourth-quarter
operating losses. The Company cautioned that results reported today are preliminary
and that actual results could vary significantly from this estimate.
The Company also stated that, due to the anticipated loss, it would fail to meet
certain fiscal year- end financial covenants in its bank credit facilities and that it had
begun discussions with its lenders seeking waivers and a restructuring of the
facilities.
Acclaim Entertainment, Inc., a leading worldwide publisher of software for
Nintendo, Sega, Sony and personal computer hardware systems, also publishes
comic books under a variety of imprints. In addition, Acclaim develops
coin-operated arcade and ticket- redemption games; operates a motion capture
studio; and, through A.D.I., globally sells and distributes products from a variety of
entertainment software publishers including Ocean, Interplay, Marvel, Pulse
Entertainment and Take 2. Acclaim also has a joint venture with
Tele-Communications, Inc. for electronically distributed interactive entertainment.
This press release contains forward looking statements. There are certain important
factors that could cause results to differ materially from those anticipated by the
statements made above. Such risks and uncertainties include, among other things, the
growth of the installed base of 32-bit and 64-bit gaming and PC systems, the timely
availability and acceptance of AcclaimUs future products for such systems, the
competitive environment in the consumer software and related industries, the
management of inventories and growth, and other risks and uncertainties that may be
detailed from time to time in AcclaimUs reports filed with the Securities and
Exchange Commission.
Acclaim is a registered trademark of Acclaim Entertainment, Inc. All other marks
are trademarks or registered trademarks of their respective companies.
CONTACT: For press information: For financial information: Nancy Tully J. Mark
Hattendorf Acclaim Entertainment, Inc. Acclaim Entertainment 516.656.5000
516.656.5000
Interleaf announces restructuring and second quarter results
WALTHAM, Mass.--Oct. 28, 1996--Interleaf Inc. (NASDAQ: LEAF) announced
today that it has taken further actions to reduce its operating expense levels and
heighten the company's focus on its integrated document management business.
The company continued its move toward a virtual field force by closing six field
offices and has reduced its worldwide employment by approximately 20 percent.
These actions will result in a restructuring charge of approximately $3 million to $4
million to be recorded in the third quarter ending Dec. 31, 1996.
As announced earlier, the company recorded revenues for its second quarter ended
Sept. 30, 1996 of $16.6 million, resulting in a loss of $10.3 million, or $(0.59) per
share. This loss includes a $4.8 million restructuring charge resulting from earlier
expense-reduction steps taken and announced in July, 1996. These results compare
with revenues of $23.3 million and net income of $.9 million, or $0.05 per share, for
the same period a year ago.
For the six months ended Sept. 30, 1996, the company reported revenues of $35.6
million and a loss of $14.1 million or $(0.82) per share, including the $4.8 million
second quarter restructuring charge. In the same period one year earlier the company
reported revenues of $46.4 million and a profit of $1.4 million or $0.08 per share.
As previously announced, the company received a $10 million equity investment on
Oct. 15, 1996. Ed Koepfler, Interleaf's president and CEO, commented, "The $10
million equity infusion received earlier this month and the restructuring actions we
have taken in the last two quarters were important steps in moving Interleaf from an
authoring-centric company to a successful and competitive document application
company."
Certain information provided herein by the company or statements made by its
officers or employees may contain forward-looking information. The company's
actual future results may differ materially from projections or suggestions made in
such forward-looking information as a result of various potential risks and
uncertainties including, but not limited to, market acceptance of its products,
technological changes in the information technology industry, competition, and
general economic trends. These and other risks are more fully discussed in the
company's SEC filings.
Interleaf Inc.
Consolidated Balance Sheets
Sept. 30, 1996 March 31, 1996
In thousands, except for share and
per share amounts (unaudited)
Assets
Current Assets
Cash and cash equivalents $ 4,942 $ 12,725
Accounts receivable, net 15,890 19,771
Prepaid expenses and other current assets 2,013 2,112
Total current assets 22,845 34,608
Property and equipment, net 7,521 7,800
Intangible assets 7,864 6,164
Other assets 628 344
Total assets $ 38,858 $ 48,916
Liabilities and Shareholders' Equity
Current Liabilities
Short-term borrowings $ 374 $ --
Accounts payable 2,982 2,908
Accrued expenses 13,804 13,252
Unearned revenue 11,444 15,986
Other current liabilities 4,830 1,348
Total current liabilities 33,434 33,494
Other liabilities 225 3
Total liabilities 33,659 33,497
Shareholders' Equity
Preferred stock, par value $.10 per share,
authorized 5,000,000 shares:
Series A Junior Participating, none issued
and outstanding
Senior Series B Convertible, issued and
outstanding, 861,911 at Sept. 30, 1996 and
923,304 at March 31, 1996 86 92
Common stock, par value $.01 per share, authorized
30,000,000 shares, issued and outstanding
17,459,219 at Sept. 30, 1996 and 16,697,988
at March 31, 1996 175 167
Additional paid-in capital 76,224 72,348
Retained earnings (deficit) (71,085) (56,958)
Cumulative translation adjustment (201) (230)
Total shareholders' equity 5,199 15,419
Total liabilities & shareholders' equity $ 38,858 $ 48,916
Interleaf Inc.
Consolidated statements of operations
3 Months Ended 6 Months Ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
In thousands, except for per share
amounts (unaudited) (unaudited)
Revenues:
Products $4,614 $9,273 $11,660
$18,710
Maintenance 7,410 8,399 14,882
16,191
Services 4,561 5,639 9,097
11,537
Total Revenues 16,585 23,311 35,639
46,438
Costs of revenues:
Products 1,527 1,564 3,153
3,224
Maintenance 1,291 1,314 2,599
2,683
Services 4,362 4,767 8,562
9,576
Total costs of revenues 7,180 7,645 14,314
15,483
Gross margin 9,405 15,666 21,325
30,955
Operating expenses
Selling, general and administrative 10,481 10,871 21,903
21,853
Research and development 4,306 3,931 8,576
7,857
Restructuring expense 4,800 - 4,800
-
Total operating expenses 19,587 14,802 35,279
29,710
Income (loss) from operations (10,182) 864 (13,954)
1,245
Other income (expense) (145) 58 (173)
149
Income (loss) before income taxes (10,327) 922 (14,127)
1,394
Provision for income taxes
- - - -
Net income (loss) $(10,327) $922 $(14,127)
$1,394
Net income (loss) per share $(0.59) $.05 $(0.82)
$.08
Shares used in computing net
income (loss) per share 17,457 18,618 17,229
18,134
CONTACT: Interleaf Inc. G. Gordon M. Large, 617/768-1012 or
Dana Finnegan, 617/768-1038
Hexcel Reports Third Quarter Results; Net Income of $0.3 million on sales of
$189.5 million reflects seasonal factors and impact of recent business acquisition
and consolidation activities
STAMFORD, Conn.--Oct. 28, 1996--Hexcel Corp. (NYSE/PSE: HXL) today
reported results for the third quarter ended Sept. 29, 1996.
The results for the third quarter of 1996 include the results of the composites
businesses acquired from Ciba-Geigy Limited and Ciba-Geigy Corp. (collectively,
"Ciba") on Feb. 29, 1996, and from Hercules Inc. ("Hercules") on June 27, 1996.
Third Quarter Results
Net sales for the third quarter of 1996 were $189.5 million, compared with net sales
for the third quarter of 1995 of $81.4 million. Gross margin for the 1996 quarter was
$35.8 million, or 18.9% of sales, compared with gross margin for the 1995 quarter
of $15.9 million, or 19.5% of sales. Excluding the business operations acquired
from Ciba and Hercules, sales for the third quarter of 1996 were approximately $92
million (a 13% increase over the third quarter of 1995) and gross margin was
approximately $22 million, or 23.9% of sales.
Third quarter net income was $0.3 million in 1996, or $0.01 per share, compared
with $1.4 million in 1995, or $0.08 per share. There were 37.4 million weighted
average shares and equivalent shares outstanding during the third quarter of 1996,
versus 18.1 million during the comparable period of 1995.
During the third quarter of 1996, sales of composite materials and parts to aerospace
customers continued to improve, reflecting the initial impact of recently announced
build rate increases for certain commercial aircraft. However, the financial
difficulties of two European aerospace customers resulted in the postponement or
cancellation of some orders, and the Company experienced some softening in sales
to certain recreation customers.
Third quarter results also reflect the seasonality of the Company's European
operations, which account for approximately half of the Company's worldwide
revenues. Sales levels are generally lowest during the third quarter of the year, as a
result of the traditional holiday period at many of the Company's European
customers.
Results for the third quarter of 1996 include an additional $1.4 million of business
acquisition and consolidation expenses attributable to Hexcel's program to
assimilate acquired operations. Components of the Company's previously announced
business consolidation program, such as the consolidation of U.S. special process
manufacturing and the integration of sales and marketing functions, are progressing
according to plan.
However, some actions have been temporarily slowed by the second quarter
acquisition of the composites business from Hercules, even though this acquisition
will facilitate certain aspects of the consolidation and is not expected to have a
significant impact on the total cost of the program.
As previously announced, the consolidation of the Company's business operations is
expected to result in $49 million of expenses over a three-year period, but is also
expected to generate savings that will pay for the program by the time it is completed
in 1999 and produce continuing and long-term benefits thereafter.
John J. Lee, the chairman and chief executive officer of Hexcel, said, "The
company's transition from a producer of composite materials to a leading integrated
supplier of carbon fibers, fabrics, and composite materials, parts and structures is a
major challenge. The program to integrate and restructure acquired operations will
take two to three years to implement, due to the manufacturing and product
qualification requirements of the aerospace industry.
"However, Hexcel is capable of generating significant benefits from such a program,
as evidenced by the restructuring program initiated in 1992 and 1993. That
restructuring contributed to the improved gross margin performance of the operations
owned by the company prior to 1996.
"Our goal is to build on that success, improving the performance of the acquired
businesses and capitalizing on the opportunities created by Hexcel's integrated
manufacturing and marketing capabilities. I am confident that we will make progress
toward achieving Hexcel's full potential in the months ahead."
Year-to-Date Results
For the year-to-date period ended Sept. 29, 1996, net sales were $482.7 million,
compared with $257.5 million for the comparable period of 1995. Gross margin for
the first nine months of 1996 was $97.8 million, or 20.3% of sales, versus gross
margin for the same period of 1995 of $48.7 million, or 18.9% of sales.
Excluding the business operations acquired from Ciba and Hercules, sales for the
year-to-date period ended Sept. 29, 1996 were approximately $289 million (a 12%
increase over the first nine months of 1995) and gross margin was approximately
$69 million, or 23.9% of sales.
The 1996 year-to-date net loss was $21.5 million, or $0.66 per share, including
$35.8 million of business acquisition and consolidation expenses and $3.4 million of
interest expense attributable to the write-off of capitalized debt financing costs.
Net income for the comparable period of 1995 was $0.7 million, or $0.05 per share.
There were 32.3 million weighted average shares and equivalent shares outstanding
during the first nine months of 1996, versus 15.0 million during the first nine months
of 1995.
Hexcel Corp. is an international developer and manufacturer of carbon fibers,
fabrics, and lightweight, high-performance composite materials, parts and structures
for use in the commercial aerospace, space and defense, recreation and general
industrial markets.
Hexcel Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Unaudited
The Quarter Ended The Year-to-Date Ended
Sept. 29, Oct. 1, Sept. 29, Oct. 1,
1996 1995 1996 1995
Net sales $189,542 $81,366 $482,730 $257,544
Cost of sales (153,729) (65,478) (384,946) (208,806)
Gross margin 35,813 15,888 97,784 48,738
Selling, general and
administrative expenses (25,642) (11,358) (67,003) (35,630)
Business acquisition and
consolidation expenses (1,382) -- (35,802) --
Other income, net 142 600 3,127 600
Operating income (loss) 8,931 5,130 (1,894) 13,708
Interest expense (7,173) (2,260) (15,655) (6,702)
Bankruptcy reorganization
expenses -- (410) -- (3,361)
Income (loss) from
continuing operations
before income taxes 1,758 2,460 (17,549) 3,645
Provision for income taxes (1,412) (899) (3,924) (2,503)
Income (loss) from
continuing operations 346 1,561 (21,473) 1,142
Discontinued operations:
Losses during
phase-out period -- (171) -- (468)
Net income (loss) $ 346 $1,390 $(21,473) $ 674
Net income (loss) per share
and equivalent share:
Primary and fully diluted:
Continuing operations $ 0.01 $0.09 $(0.66) $ 0.08
Discontinued operations 0.00 (0.01) 0.00 (0.03)
Net income (loss) $ 0.01 $0.08 $(0.66) $ 0.05
Weighted average shares
and equivalent shares 37,430 18,094 32,305 14,958
CONTACT: Hexcel Corp. William P. Meehan, 510/847-9500
PanAmSat revenues increase by 139% TO $66.9 million for third quarter 1996
GREENWICH, Conn.--Oct. 28, 1996--
Total Revenues Were $177.6 Million for First Nine Months of 1996
PanAmSat Corporation (NASDAQ: SPOT) announced today that total revenues
were $66.9 million for the three months ended September 30, 1996, an increase of
139 percent over total revenues of $28.0 million for the same period in 1995. Total
revenues for the first nine months of 1996 were $177.6 million, an increase of
$105.8 million or 147 percent as compared to the same nine-month period in 1995.
Earnings Before Net Interest Expense, Income Taxes, Depreciation and Amortization
(EBITDA) for the third quarter of 1996 was $42.2 million, an increase of 136
percent as compared to $17.9 million for the same three-month period in 1995.
EBITDA during the third quarter of 1996 included non-recurring expenses of $2.5
million related to the September 1996 Agreement and Plan of Reorganization with
Hughes Electronics Corporation and $4.8 million related to a corporate
compensation plan. EBITDA was $122.2 million for the nine months ended
September 30, 1996, an increase of $86.5 million or 242 percent over the same
period in 1995. EBITDA for the first nine months of 1995 included a charge for a
non-recurring reorganization expense of $8.3 million.
EBITDA was 69 percent of total revenues for the first nine months of 1996, as
compared to 50 percent of total revenues for the same period in 1995.
PanAmSat experienced significant revenue increases during the third quarter of 1996
for both broadcast and business communications services. Broadcast services
revenue increased by 170 percent to $56.1 million, primarily due to revenues for
video services on the PAS-3 and PAS-4 satellites. Business communications
services revenue grew by 55 percent to $10.4 million as a result of the
commencement of several new data network and carrier service contracts.
On September 20, 1996, PanAmSat and Hughes Electronics Corporation announced
an agreement to merge their respective satellite service operations into a new
publicly held company. The merger transaction will require governmental
approvals, which are expected to be completed within six to 12 months of the
announcement date.
In a separate but related transaction, Televisa will purchase PanAmsat's options to
obtain equity interests in Spanish-speaking direct-to-home ventures in Latin America
and the Iberian Peninsula.
As of September 30, 1996, PanAmSat had signed contracts of approximately $2.2
billion to provide satellite services on the PAS-1, PAS-2, PAS-3 and PAS-4
satellites. In addition, the Company signed a binding letter of agreement in February
1996 with certain partners of the Latin America direct-to-home (DTH) television
partnership of Grupo Televisa, News Corp., Globo and Tele-Communications
International for services on 48 transponders on the PAS-5 and PAS-6 satellites at a
minimum value of $1.2 billion. For most of the transponders, this value reflects
service fees that are equal to the company's best estimate of the cost to design,
construct, launch, insure and operate the satellites and for the balance of the
transponders, the value reflects service fees that are based on a fixed price.
PanAmSat is the world's first private-sector company to provide global satellite
services. It offers satellite-based video and data communications services to more
than 300 customers worldwide. The company currently operates a four-satellite
global system: PAS-1 and PAS-3 over the Atlantic Ocean Region; PAS-2 over the
Pacific Ocean Region; and PAS-4 over the Indian Ocean Region. PanAmSat plans to
launch four additional satellites by early 1998, which will enable the company to
operate multiple satellites in each ocean region worldwide. The next launch will
deploy the PAS-6 Atlantic Ocean Region satellite in December 1996.
PanAmSat Corporation
For the Nine Months Ended September 30, 1996
PART I - FINANCIAL INFORMATION
Financial Statements
Balance Sheets, September 30, 1996 (unaudited) and December 31,
1995.
Statements of Operations for the Nine Months Ended September 30,
1996
and 1995 (unaudited).
Statements of Operations for the Three Months ended September 30,
1996 and 1995 (unaudited).
Statements of Cash Flows for the Nine Months Ended September 30,
1996
and 1995 (unaudited).
Notes to Financial Statements.
BALANCE SHEETS
September 30, December 31,
1996 1995
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 3,336,719 $ 13,562,113
Accounts receivable, less
allowance for doubtful accounts
of $100,000 9,423,406 4,881,255
Prepaid expenses and other
current assets 13,717,889 5,594,999
TOTAL CURRENT ASSETS 26,478,014 24,038,367
SATELLITES AND OTHER PROPERTY
AND EQUIPMENT, AT COST 859,319,906 609,927,311
Less: Accumulated Depreciation
And Amortization (122,912,134) (79,177,520)
736,407,772 530,749,791
MARKETABLE SECURITIES 372,405,626 495,078,866
SATELLITE SYSTEMS UNDER
DEVELOPMENT 423,247,476 377,383,581
DEBT ISSUANCE COSTS (Net of
Amortization) 9,944,437 11,414,920
OTHER ASSETS 806,054 154,287
TOTAL ASSETS $1,569,289,379 $1,438,819,812
-0-
PanAmSat Corporation
BALANCE SHEETS
September 30, December 31,
1996 1995
(Unaudited)
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 4,065,094 $
3,287,250
Accounts payable 780,873
834,405
Accrued interest 2,843,750
7,109,375
Accrued liabilities and taxes 9,983,058
7,686,452
Deferred revenue 7,439,157
6,009,836
TOTAL CURRENT LIABILITIES 25,111,932
24,927,318
LONG-TERM DEBT 616,583,843
575,283,661
DEFERRED INCOME TAXES 51,105,310
31,573,000
DEFERRED REVENUE 68,320,236
41,656,778
OTHER LIABILITIES 732,934
867,934
TOTAL LIABILITIES 761,854,255
674,308,691
COMMITMENTS AND CONTINGENCIES
PREFERRED STOCK, 12-3/4% Mandatorily
Exchangeable Senior Redeemable Preferred
Stock, $0.01 par value, 20,000,000 shares
authorized, 321,050 shares issued and
outstanding, 8,565 shares for accrued
dividends 318,193,850
287,648,667
STOCKHOLDERS' EQUITY:
Class A Common Stock, $0.01 par value,
100,000,000 shares authorized,
40,459,432 shares issued and
outstanding 404,594 404,594
Class B Common Stock, $0.01 par value,
100,000,000 shares authorized,
40,459,431 shares issued and
outstanding 404,594 404,597
Common Stock, $0.01 par value,
400,000,000 shares authorized,
19,082,737 shares issued and
outstanding 190,828 190,812
Additional paid-in-capital 477,324,937 477,297,753
Retained earnings (deficit) 10,916,321
(1,435,299)
Total Stockholders' Equity 489,241,274 476,862,454
TOTAL LIABILITIES AND EQUITY $1,569,289,379 $1,438,819,812
-0-
PanAmSat Corporation
STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1996 and 1995
(Unaudited)
September 30, September 30,
1996 1995
REVENUES:
Unaffiliated parties $170,920,581 $ 68,964,209
Related parties 6,713,364 2,859,283
177,633,945 71,823,492
OPERATING EXPENSES:
Direct expenses-service agreements 6,831,774 3,723,267
Sales and marketing 10,318,748 6,588,476
Engineering and technical services 12,334,312 6,952,638
General and administrative 18,641,535 10,521,560
Depreciation and amortization 45,224,473 22,000,388
Compensatory programs 4,799,933 8,341,040
Reorganization costs 2,528,177 -
100,678,952 58,127,369
INCOME FROM OPERATIONS 76,954,993 13,696,123
INTEREST INCOME (17,615,682) (12,745,350)
INTEREST EXPENSE 20,588,872 12,636,131
INCOME BEFORE INCOME TAXES 73,981,803 13,805,342
INCOME TAXES 31,085,000 9,041,000
NET INCOME 42,896,803 4,764,342
PREFERRED STOCK DIVIDEND 30,545,183 16,453,920
NET INCOME (LOSS) TO COMMON SHARES $ 12,351,620 $(11,689,578)
PRO FORMA NET LOSS TO COMMON SHARES:
HISTORICAL NET INCOME $ 4,764,342
PRO FORMA INCOME TAX BENEFIT
(1,207,000)
PRO FORMA NET INCOME
5,971,342
PREFERRED STOCK DIVIDEND
16,453,920
PRO FORMA NET LOSS TO COMMON SHARES $(10,482,578)
ACTUAL AND PRO FORMA EARNINGS (LOSS)
PER COMMON SHARE $ .12 (0.12)
ACTUAL AND PRO FORMA WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING 100,324,978 85,877,428
-0-
PanAmSat Corporation
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 1996 and 1995
(Unaudited)
September 30, September 30,
1996 1995
REVENUES:
Unaffiliated parties $ 64,410,187 $ 27,066,931
Related parties 2,516,592 949,625
66,926,779 28,016,556
OPERATING EXPENSES:
Direct expenses-service agreements 3,107,203 1,172,449
Sales and marketing 3,085,276 2,393,765
Engineering and technical services 4,562,193 2,709,388
General and administrative 6,594,795 3,651,488
Depreciation and amortization 16,132,786 8,051,364
Compensatory programs 4,799,933 187,440
Reorganization costs 2,528,177 -
40,810,363 18,165,894
INCOME FROM OPERATIONS 26,116,416 9,850,662
INTEREST INCOME (5,346,337) (5,042,954)
INTEREST EXPENSE 5,704,954 3,245,643
INCOME BEFORE INCOME TAXES 25,757,799 11,647,973
INCOME TAXES 11,699,000 4,910,000
NET INCOME 14,058,799 6,737,973
PREFERRED STOCK DIVIDEND 10,525,683 9,334,050
NET INCOME (LOSS) TO COMMON SHARES $ 3,533,116 $ (2,596,077)
EARNINGS (LOSS) PER COMMON SHARE $ .04 $ (0.03)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 100,414,456 86,142,774
-0-
PanAmSat Corporation
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1996 and 1995
(Unaudited)
September 30, September 30,
1996 1995
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $ 42,896,803 $
4,764,342
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 45,224,473
22,000,388
Deferred income taxes 19,532,310
4,976,000
Accretion of interest on senior subordinated
discount notes 29,835,300
26,719,491
(Accretion) collection of interest
on marketable securities (2,623,629)
484,390
Interest expense capitalized (27,269,311)
(29,172,552)
Compensation expense related to corporate
reorganization
- 3,849,300
Changes in assets and liabilities:
Increase in accounts receivable (4,542,151)
(1,680,285)
Increase in prepaid expenses and
other current assets (8,122,890)
(2,339,658)
Decrease in tax distribution receivable
- 6,470,285
Decrease in accounts payable (53,532)
(848,727)
Decrease in accrued interest (4,265,625)
(4,265,625)
Increase in accrued liabilities and taxes 2,296,606
4,194,764
Increase in deferred revenue 28,092,779
33,278,933
Decrease in other liabilities (135,000)
(50,000)
NET CASH PROVIDED BY OPERATING
ACTIVITIES 120,866,133
68,381,046
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment (17,395,302)
(14,675,782)
Expenditures for satellite systems under
development (235,670,725)
(244,787,985)
Purchase of marketable securities and cash
- (561,302,274)
Proceeds from insurance claim receivable
- 191,084,380
Proceeds from maturity of marketable
securities 125,296,869
50,000,000
Increase in other assets (671,143)
(83,216)
NET CASH USED IN INVESTING ACTIVITIES (128,440,301)
(579,764,877)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Preferred Stock offering, net
- 263,421,082
Proceeds from issuance of Common Stock, net
- 228,873,873
Repayments of long-term debt (2,678,426)
(1,365,133)
Proceeds from exercise of employee
stock options 27,200 -
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (2,651,226)
490,929,822
NET DECREASE IN CASH AND CASH
EQUIVALENTS (10,225,394)
(20,454,009)
CASH AND EQUIVALENTS, beginning of period 13,562,113
22,854,209
CASH AND EQUIVALENTS, end of period $ 3,336,719 $
2,400,200
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash received for interest $ 14,992,053 $
13,655,521
Cash paid for interest $ 22,288,506 $
18,215,709
Cash paid for income taxes $ 11,566,000 $ -
-0-
PanAmSat Corporation
NOTES TO FINANCIAL STATEMENTS
(1) Principles of Presentation.
The interim unaudited Financial Statements should be read in conjunction with the
audited Financial Statements and the notes thereto for the year ended December 31,
1995 included in the Company's Annual Report on Form 10-K, as filed with the
Securities and Exchange Commission (Commission File Number 33-63284) (the
"Annual Form 10-K"). The balance sheet as of September 30, 1996, and the related
statements of operations and cash flows for the nine months ended September 30,
1996 and 1995 have been prepared by the Company and are unaudited. In the
opinion of management, all adjustments which are of a normal recurring nature
necessary to present fairly the financial position, results of operations and cash
flows as of and for the three and nine month periods ended September 30, 1996 and
1995 have been made. The accounting policies followed during the interim periods
reported are in conformity with generally accepted accounting principles and are
consistent with those applied for annual periods and described in the Company's
Annual Form 10-K.
The results of operations for the nine month periods ended September 30, 1996 and
1995 are not necessarily indicative of the operating results for the full year.
(2) DTH Business.
During the third quarter of 1994, the Company announced its intention to provide
DTH services in Latin America. In connection therewith, the Company and Grupo
Televisa, S.A. ("Televisa") signed a binding memorandum of understanding in the
first quarter of 1995 (the "Original MOU") to put into operation a digital DTH
satellite television broadcasting business covering Latin America, the Caribbean and
certain areas of the southern United States.
In November 1995, the Company announced that it would serve as a satellite service
provider for the Latin America DTH service ("Latin America DTH") to be offered
by the Globo Organization ("Globo"), Televisa, The News Corporation Limited
("News Corp.") and Tele-Communications International, Inc.("TCI") and that the
Company would
have options to acquire equity interests in the joint ventures serving Latin America,
the Caribbean and the Southern United States, but not Brazil.
On February 29, 1996, the Company signed a binding letter agreement with Globo,
Televisa and News Corp. (the "1996 Letter Agreement") to provide service to a
series of joint ventures (the "Latin America JVs") to be formed by them and TCI on
48 transponders ultimately on PAS-5 and PAS-6, with temporary service on PAS-3
pending the commencement of service on PAS-6. On June 26, 1996, a full-scale
agreement was executed for service in Brazil on twelve transponders (the "Brazil
Agreement"). The 1996 Letter Agreement remains in force for the remaining 36
transponders. This capacity would enable the Latin America JVs to broadcast to
Latin America, the Caribbean, and certain areas of the southern United States
approximately 500 digital channels and to permit distribution of program packages
of approximately 120 digital channels to specific market areas. Also under the 1996
Letter Agreement, Globo, Televisa, and News Corp. have agreed to proportionally
guarantee 100 percent of the fees for transponder services to the Latin America JVs.
These guarantee obligations may be assigned to TCI and, with the Company's prior
written consent, to new equity participants in the Latin America JVs. Globo and
News Corp have proportionately guaranteed the obligations under the Brazil
Agreement. The Company will receive minimum service fees equivalent to the
Company's best estimate of the cost per transponder to the Company of designing,
launching, operating and insuring each satellite for the transponders used by the Latin
America JVs. The Company also will receive additional revenue based on
subscriber revenues of the Latin America JVs above a certain threshold, except that
the transponders that will be used by the Latin America JV operating in Brazil will
be charged on a fixed fee basis.
Under a verbal agreement in principle with Televisa, PanAmSat and Televisa
intended to form a joint venture to offer DTH services in the Iberian Peninsula.
Pursuant to a revised memorandum of understanding(the "Revised MOU")between
the Company and Televisa entered into on September 20, 1996 which incorporated
the prior verbal agreement between the parties and which superseded the Original
MOU, the Company was granted an option for ten years to obtain 10 to 15 percent
interests from Televisa in the Latin America JVs that would service Latin America,
the Caribbean, and the southern United States, but not Brazil. In the event the option
is exercised, the purchase price would be equal to the Company's pro rata share of
Televisa's aggregate contributions to the Latin America JVs providing such service,
less all distributions by such Latin America JVs to Televisa, plus interest. The
Company has no interest nor any options to acquire an interest in the Latin America
JVs that will provide DTH service in Brazil. In connection with the Agreement and
Plan of Reorganization (see Note 5), Televisa will purchase the Company's options
under the Revised MOU.
On September 20, 1996, the Company entered into an agreement with Televisa S.A.
de C.V. to provide transponder service on up to five PAS-3 Ku-band transponders,
at least three of which will be used for distribution of television services in Spain,
which may include DTH services. The service fees reflect market rates.
The Company has significant investments in and commitments for PAS-5 and PAS-6
which are intended to be primarily used by the Latin America JVs. Globo, Televisa
and News Corp. plan to enter into one or more definitive agreements to implement
the terms agreed in and contemplated by the 1996 Letter Agreement. No assurance
can be given that the Latin America JVs will be successful.
(3) PAS-3 Placed in Service.
The Company's PAS-3 satellite (a replacement for a satellite lost as a result of a
launch failure in December 1994) was launched on January 12, 1996 and
commenced service on February 19, 1996. As a result, approximately $232 million
of costs included in satellite systems under development was transferred to satellites
in service and the Company incurred $15.0 million of long-term debt in accordance
with the satellite performance incentive terms in its PAS-3 satellite construction
contract during the quarter ended March 31, 1996.
(4) Compensation Plan.
In September, 1996, the Company adopted a plan to pay a cash bonus to its
employees who would otherwise have qualified for the grant of stock options under
the Company's Long-Term Stock Investment Plan. Such compensation totaling $4.8
million was paid in October, 1996.
(5) Agreement and Plan of Reorganization
On September 20, 1996 (the "Announcement Date"), the Company and Hughes
Electronics Corporation ("Hughes") announced they have agreed to merge their
respective satellite service operations into a new publicly held company. Under the
terms of the Agreement and Plan of Reorganization, the Galaxy business of Hughes
will be combined with the Company to form a new public company. In connection
with the transaction, PanAmSat stockholders will receive an aggregate of $1.5
billion in cash and 28.5 percent of the new company. PanAmSat stockholders will
have three options to receive payment with respect to the outstanding shares of
PanAmSat Common Stock: $30 in cash, one share of common stock of the new
company, or one-half share of common stock of the new company and $15 in cash.
Immediately after the merger, Hughes will own 71.5 percent of the merged entities.
The transaction will require governmental approvals, including that of the U.S.
Federal Communications Commission and the Federal Trade Commission, which
are expected to be completed within six to twelve months of the Announcement Date.
In connection with the above transaction, the Company will incur certain
professional and advisory fees substantially all of which are payable upon the
successful completion of the merger which aggregate approximately $20 million.
In a separate but related transaction, Televisa will purchase the Company's options
to obtain equity interests in Spanish-speaking DTH ventures in Latin America and
the Iberian Peninsula.
CONTACT: Kevin Burgoyne, 203/622-6664 burgoynk@grn.panamsat.com
www.panamsat.com