Today's Man Announces Third Quarter And Nine Month Results
MOORESTOWN, N.J., Nov. 14, 1996 - Today's Man, Inc. (Nasdaq: TMANQ) operating under the protection of
Chapter 11 of the U.S. Bankruptcy Code as Debtor-In-Possession, today announced sales and earnings for the
third quarter and nine months ended November 2, 1996.
Sales for the quarter were $44.6 million, a 19% overall decrease compared with sales of $54.9 million for the
third quarter last year. The Company attributes the overall sales decrease in part to the elimination of 10
underperforming stores, which reduced the store count from 35 locations to 25 locations year over year. For the
second consecutive quarter Today's Man posted an operating profit, which was $11,000 for the third quarter. The
net loss for the quarter was $750,100, or $0.07 per share, which includes $796,400 in reorganization charges
associated with the Company's Chapter 11 proceedings. This represents an improvement from the net loss of
$4,098,300 or $0.38 per share, for the same period a year ago. Weighted shares outstanding were 10,861,005 and
10,853,552 respectively.
"We are pleased that the Company's performance continues to improve, which is evidenced by our second quarter
of operating profits and continued improvement in comparable store sales, including a comp store increase of
3.6% for the month of October," said David Feld, Chairman and Chief Executive Officer. "We are continuing to
focus on margins and operating more efficiently at our 25 superstores and believe that we have the right mix of
merchandise for our customers as we move into the holiday selling season."
Sales for the nine-months ended November 2, 1996 were $136.3 million, a 24% decrease compared with sales of
$180.5 million for the nine months last year. The loss for the nine months which includes $3,222,600 in
reorganization items was $5,746,400, or $0.53 per share, compared with the net loss of $4,993,000 or $0.46 per
share, for the same period a year ago.
Comparable store sales for the third quarter increased 0.5%, the Company's first positive quarterly comp since
filing for Chapter 11 protection. Comparable store sales for the nine month period decreased 12%.
Today's Man, Inc. currently operates 25 menswear superstores in the Philadelphia, New York and Washington
markets. It offers a wide selection of tailored clothing, furnishings, sportswear and shoes at everyday low prices.
Today's Man, Inc.
Consolidated Statements Of Income
For Thirteen Weeks Ended For Thirty-Nine
Weeks Ended
NOV.2, 1996 OCT.28, 1996 NOV.2, 1996
OCT.28, 1996
Net sales $44,616,800 $54,898,300 $136,312,400
$180,508,200
Cost of goods
sold 28,964,100 37,685,400 90,845,600
118,792,500
Gross profit 15,652,700 17,212,900 45,466,800
61,715,700
Selling, general
and admin.
expenses 15,641,700 22,399,000 48,078,100
66,932,500
Income (loss)
from operations 11,000 (5,186,100) (2,611,300)
(5,216,800)
Reorganization
items 796,400 -- 3,222,600
--
Interest expense
and other income,
net (35,300) 1,119,000 (87,500)
2,464,800
Loss before income tax
benefit (750,100) (6,305,100) (5,746,400)
(7,681,600)
Income tax benefit -- (2,206,800)
-- (2,688,600)
Net loss $(750,100) $(4,098,300) $(5,746,400)
$(4,993,000)
Net loss per share $(0.07) $(0.38) $(0.53)
$(0.46)
Weighted average
shares
outstanding 10,861,005 10,853,552 10,861,005
10,836,664
SOURCE Today's Man, Inc./CONTACT: Michael Kempner, mkempnermww.com, or Carreen Winters,
cwintersmww.com, both of MWW-Strategic Communications, Inc. Public Relations, 201-507-9500/
The Men's Wearhouse reports a 22.9 percent increase in third quarter net earnings
FREMONT, Calif.--Nov. 14, 1996--The Men's Wearhouse (NASDAQ/NMS:SUIT) today reported results for the
third quarter and nine months ended Nov. 2, 1996.
For the 13 weeks ended Nov. 2, 1996, the company reported net earnings of $3,744,000, or $.18 per share,
compared with net earnings of $3,046,000, or $.15 per share, for the 13 weeks ended Oct. 28, 1995.
As previously reported, sales for the 13 weeks ended Nov. 2, 1996, were $110.3 million, an increase of 16.4
percent over sales of $94.7 million for the 13 calendar weeks ended Nov. 4, 1995. Sales for the 13 weeks ended
Oct. 28, 1995, were $92.9 million.
For the first 39 weeks of fis cal 1996 the company's net earnings were $10,862,000, or $.51 per share, compared
with net earnings of $8,023,000, or $.40 per share, for the same period a year ago. Sales for the 39 weeks ended
Nov. 2, 1996, were $312.9 million, an increase of 19 percent over sales of $263 million for the 39 calendar
weeks ended Nov. 4, 1995. Sales for the 39 weeks ended Oct. 28, 1995 were $259.9 million.
The company noted that the change in timing of the fiscal quarter end is due to the additional week included in the
year ended Feb. 3, 1996, a 53-week year. In addition, the per share amounts for the 1995 periods have been
adjusted to reflect a 50 percent stock dividend effected on Nov. 15, 1995.
Comparable store sales for the 13 weeks ended Nov. 2, 1996, increased .3 percent compared with an increase of
8.5 percent for the 13 weeks ended Nov. 4, 1995. For the 39 weeks ended Nov. 2, 1996, comparable store sales
increased 2.8 percent compared with an increase of 6.6 percent for the 39 weeks ended Nov. 4, 1995.
Comparable store sales increases were computed by comparing same store sales for each period with such sales
for the same calendar weeks of the prior year.
Comparable store sales for the 13 and 39 weeks ended Oct. 28, 1995, increased 8.2 percent and 6.4 percent,
respectively.
As of Nov. 2, 1996, The Men's Wearhouse operated 315 stores in 32 states, compared with 266 stores in 28
states at Nov. 4, 1995.
"We are pleased with our results for the quarter, particularly given the previously discussed competitive pricing
and advertising pressures we have faced in several key markets," said David Edwab, chief operating and
financial officer. "We have managed our costs, while maintaining our strategy during what we believe is a
short-term market environment."
"The decision by C&R Clothiers to file for bankruptcy protection on Tuesday and the recent bankruptcy filing by
Kuppenheimer's would support our belief that competitors' current pricing strategies will not be a viable,
long-term approach," Edwab continued.
During the quarter, The Men's Wearhouse opened 18 stores, including one each in the new markets of Columbia,
S.C.; Kalamazoo, Mich.; and Springfield, Mass.
In addition, the company opened four stores in the existing market of Boston-Providence, two in the existing
markets of Los Angeles, Chicago and Washington-Baltimore and one each in the existing markets of the San
Francisco Bay Area, Houston, St. Louis, Salt Lake City and Milwaukee.
The company plans to have opened 45-50 stores by the end of fiscal 1996. Planned new markets for the fourth
quarter of fiscal 1996 include Tallahassee, Fla.; Hartford, Conn.; and Rochester, Minn. The company also plans
to open additional stores in the existing markets of Boston-Providence, Chicago, Washington-Baltimore,
Dallas-Ft. Worth, Los Angeles, Cleveland, Greensboro and St. Louis.
Founded in 1973, The Men's Wearhouse is one of the country's largest off-price specialty retailers of men's
tailored business attire. The stores carry a full selection of both brand-name and private-label suits, sport coats,
slacks, furnishings and accessories.
The company's convertible subordinated notes trade on the NASDAQ SmallCap market under the symbol
"SUITG."
The Men's Wearhouse Inc. and Subsidiaries
Consolidated Statements of Earnings
(Unaudited)
For the Interim Periods Ended
Oct. 28, 1995, and Nov. 2, 1996
Three Months Ended
1996 1995
Net Sales $110,276,000 $
92,864,000
Cost of goods sold, including
buying and occupancy costs 67,771,000
57,350,000
Gross margin 42,505,000 35,514,000
Selling, general and administrative
expenses 35,376,000
29,716,000
Operating income 7,129,000
5,798,000
Interest expense (net of interest
income of $34,000 and $164,000 in
1995 and 1996, respectively) 755,000
614,000
Earnings before income taxes 6,374,000
5,184,000
Provision for income taxes 2,630,000
2,138,000
Net earnings $ 3,744,000 $
3,046,000
Net earnings per share of common
stock $ 0.18 $
0.15
Weighted average number of common
and common equivalent shares
outstanding 21,163,000
20,934,000
The Men's Wearhouse Inc. and Subsidiaries
Consolidated Statements of Earnings
(Unaudited)
For the Interim Periods Ended
Oct. 28, 1995 and Nov. 2, 1996
Nine Months Ended
1996 1995
Net Sales $312,858,000 $259,933,000
Cost of goods sold, including
buying and occupancy costs 192,429,000 160,343,000
Gross margin 120,429,000 99,590,000
Selling, general and
administrative expenses 100,347,000 83,840,000
Operating income 20,082,000 15,750,000
Interest expense (net of interest
income of $71,000 and $926,000
in 1995 and 1996, respectively) 1,594,000 2,094,000
Earnings before income taxes 18,488,000 13,656,000
Provision for income taxes 7,626,000 5,633,000
Net earnings $ 10,862,000 $ 8,023,000
Net earnings per share of
common stock $ 0.51 $ 0.40
Weighted average number of common
and common equivalent shares
outstanding 21,196,000 19,877,000
The Men's Wearhouse Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Nov. 2, Oct. 28,
Assets 1996 1995
Current assets:
Inventory $ 182,383,000 $ 162,913,000
Other current assets 22,551,000 6,576,000
Total current assets 204,934,000 169,489,000
Property and equipment, net 66,870,000 54,901,000
Other assets 10,746,000 1,968,000
Total assets $ 282,550,000 $ 226,358,000
Liabilities and Shareholders' Equity
Current liabilities $ 69,689,000 $ 65,220,000
Long term debt 57,554,000 28,080,000
Other liabilities 6,584,000 4,623,000
Shareholders' equity 148,723,000 128,435,000
Total liabilities and equity $ 282,550,000 $ 226,358,000
CONTACT: The Men's Wearhouse David Edwab, 510/657-9821 Gary Ckodre, 713/295-7200
Heftel Broadcasting Corporation Announces Fiscal Year 1996 Fourth Quarter Financial Results
LAS VEGAS, NV - Nov. 14, 1996 - Heftel Broadcasting Corporation (Nasdaq: HBCCA) today announced
financial results for its fiscal fourth quarter and year ended September 30, 1996.
Net revenues for the fourth quarter ended September 30, 1996, increased by 7% to $18.7 million, compared to
$17.5 million for the same period in the previous year. A net loss of $45.6 million, including certain one-time
charges as further described below, or $(4.14) per common share was incurred during the third quarter of fiscal
1996, compared to net income of $10,600, or $.00 per common share for the comparable prior year quarter. Net
revenues for the year ended September 30, 1996 increased by ll.8% to $71.7 million, compared to $64.2 million
for the same period in the previous year. A net loss of $46.6 million or $(4.15) per common share was incurred
for the year ended September 30, 1996 compared to net income of $3.7 million, or $0.34 per common share for
the same period of the prior year.
Broadcast cash flow during the fourth quarter ended September 30, 1996 increased by 15.3% to $5.6 million
compared to $4.9 million for the same quarter in 1995, and operating income was $2.7 million compared to $3.1
million for the same period of the previous year. Broadcast cash flow for the year ended September 30, 1996
increased by 11.3% to $22.8 million compared to $20.5 million for the same period in 1995, and operating
income increased to $12.6 million compared to $12.5 million for the same period of the previous year.
On August 5, 1996, Clear Channel Radio, Inc., a wholly owned subsidiary of Clear Channel Communications,
Inc. (Clear Channel), completed a stock purchase and tender offer of the Company's Class A and B Common
Stock for $23 per share. The consummation of these transactions increases Clear Channel's investment in the
Company from a previously owned 21% interest to 63%. Clear Channel is a publicly traded (NYSE: CCU)
diversified radio and television broadcasting company.
In connection with the change in control of ownership described above, the Company refinanced its credit
agreement, elected to discontinue the operations of its radio network subsidiary, Cadena Radio Centro, and
incurred certain one-time restructuring charges. The charges to operations resulting from the above were
approximately $7.5 million, $10.0 million and $30.4 million, respectively. Restructuring charges consist
primarily of certain employee severance and employment contract settlements, cost to dispose of duplicate
facilities and transaction costs relating to the August 5, 1996 change in control of ownership.
Heftel Broadcasting Corporation is the largest Spanish language radio broadcaster in the United States and
currently owns seventeen radio stations in top Hispanic markets. The Company has entered into an agreement to
merge with Tichenor Media System, Inc.
Heftel Broadcasting Corporation
Consolidated Statements of Operations
(in thousands, except per share data)
Three months ended Year ended
September 30 September 30
1996 1995 % Change 1996 1995
% Change
(Unaudited) (Unaudited)
Net broadcasting
revenues $18,679 $17,516 7% $71,732 $64,160 12%
Station operating
expenses (13,061)(12,644) - (48,896) (43,643) -
Station operating
income before
depreciation
amortization and
corporate expenses 5,618 4,872 15% 22,836 20,517 11%
Corporate expenses (1,379) (1,400) - (5,072) (4,720) -
Depreciation and
amortization (1,572) (392) - (5,140) (3,344) -
Operating income 2,667 3,080 (13)% 12,624 12,453 1%
Interest expense, net(3,099)(2,677) - (11,034) (6,389) -
Other income
(expense), net (36,818) (66) - (38,143) (428) -
Income (loss)
before minority
interest and
income taxes (37,250) 337 - (36,553) 5,636 -
Minority interest - 262 - - (1,167) -
Provision for
income taxes - (97) - (65) (150) -
Net income (loss)
from continuing
operations (37,250) 502 - (36,618) 4,319 -
Discontinued
operations:
Loss on discontinued
operations of CRC (8,379) (491) - (9,988) (626) -
Net income (loss)$(45,629) $11 - $(46,606) $3,693 -
Net income (loss)
per common
and common
equivalent share $(4.14) $0.00 - $(4.15) $0.34 -
Weighted average
common shares
outstanding 11,032 10,885 - 11,240 10,805 -
Heftel Broadcasting Corporation
Consolidated Balance Sheets
(in thousands)
September 30,
1996 1995
(Unaudited)
Current assets $23,160 $25,507
Property and equipment, net 18,336 12,245
Intangible assets, net 123,242 109,253
Other non-current assets 1,013 4,632
Total Assets $165,751 $151,637
Current liabilities $14,492 $10,540
Long-term debt, less current maturities 137,626 95,937
Other non-current liabilities 1,532 1,579
Net stockholders' equity 12,101 43,581
Total Liabilities and Stockholder's Equity $165,751 $151,637
SOURCE Heftel Broadcasting Corp. /CONTACT: John Kendrick of Heftel Broadcasting, 702-284-6480/
Gander Mountain Submits Reorganization Plan
WILMOT, Wis., Nov. 14, 1996 - Gander Mountain, Inc. (Nasdaq: GNDR), today announced that it has filed a
Joint Plan of Reorganization together with its wholly owned subsidiaries GMO, Inc. and GRS, Inc., the Official
Committee of Unsecured Creditors of Gander Mountain, Inc., and Holiday Stationstores, Inc. The Company has
also filed a proposed Disclosure Statement relating to the Plan. A hearing has been scheduled before the
Honorable Russell A. Eisenberg at 9:00 a.m. on December 13, 1996 to consider whether the Disclosure
Statement contains adequate information so that interested parties can make an informed decision about the Plan.
Once a Disclosure Statement is approved, it, together with the Plan, will be distributed to parties-in-interest so
that they can vote on the Plan.
Under the terms of the Joint Plan, the company's 12 retail stores and substantially all related assets of the business
will be transferred to Holiday Companies which will pay a purchase price equal to all secured debt,
administrative expenses of the bankruptcy (including post-petition liabilities), priority claims, reasonable
post-confirmation expenses, plus $19,500,000. $18.5 million will be distributed among unsecured creditors,
$500,000 paid pro rata to Gander Mountain preferred shareholders, and $500,000 paid pro rata to holders of
Gander Mountain common stock. If, however, the holders of preferred stock oppose the Plan and it cannot be
confirmed by the Court because of this opposition, there will be no distribution to preferred and common
shareholders and the amount available to unsecured creditors will increase to $19 million. Unsecured claims of
$1,000 or less, and claims that creditors reduce voluntarily to $1,000, will receive a one-time payment of 80% of
their claims out of the funds available to unsecured creditors. After this payment, the balance will be distributed
pro rata to other unsecured creditors with allowed claims. Amounts payable to unsecured creditors and
shareholders will be deposited into a Trust which will be administered by a Trustee to be appointed pursuant to
the Plan who will make distributions.
The Plan, to become effective, must be approved by the Court, after a vote by the creditors, preferred
shareholders and common shareholders.
Holiday Companies is a privately-held Bloomington, Minnesota based retailer and wholesaler of outdoor and
other sporting goods as well as gasoline and food products. With the acquisition of the twelve Gander Mountain
stores, Holiday's outdoor sporting goods group will consist of twenty-seven (27) retail stores in four states. In
July, 1996, Holiday acquired five stores from Gander Mountain which included three stores in Minnesota
(Duluth, Maple Grove and St. Cloud) and two stores in Wisconsin (Eau Claire and LaCrosse). Holiday will
continue to operate these stores under the Gander Mountain name.
Gander Mountain, Inc. is a customer-oriented specialty merchandiser serving the outdoor recreation market. The
company is recognized as a leader in providing functional outerwear, footwear and equipment for the hunting,
fishing and camping enthusiast.
SOURCE Gander Mountain, Inc. /CONTACT: Kenneth C. Bloom, Executive VP-Chief Financial Officer, of
Gander Mountain, Inc., 414-862-3302; or Michael Rosenbaum, of The Financial Relations Board,
312-266-7800/
New Valley reports third quarter 1996 results
MIAMI, FL--Nov. 14, 1996--New Valley Corp. (OTC:NVYL) today announced financial results for the third
quarter ended Sept. 30, 1996.
Third quarter 1996 revenues were $24.3 million, compared to revenues of $21.5 million in the third quarter of
1995. The company recorded a loss from continuing operations of $7.7 million in the 1996 third quarter versus
income of $2.8 million in 1995. Net loss applicable to common shares in the third quarter of 1996 was $27.8
million, or $2.91 per share, compared to a loss of $7.9 million, or $0.82 per share, in the third quarter of 1995.
For the nine months ended Sept. 30, 1996, revenues were $92.8 million, compared to $39.2 million for the first
nine months of 1995. The company recorded a loss from continuing operations of $16.7 million for the 1996
nine-month period, compared to income of $11.7 million for the 1995 period. Net loss applicable to common
shares in the first nine months of 1996 was $64.3 million, or $6.72 per share, compared to a loss of $0.3 million,
or $0.03 per share, for the first nine months of 1995.
New Valley is principally engaged, through Ladenburg, Thalmann & Co. Inc., in the investment banking and
brokerage business, through its New Valley Realty division, in the ownership and management of commercial
real estate, and in the acquisition of operating companies.
NEW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
Revenues:
Principal transactions,
net $3,926 $7,864 $18,836
$10,465
Commissions 4,700 4,161 13,383
5,899
Real estate leasing 5,941 17,605
Computer sales and service 2,987 9,084
Interest and dividends 4,230 3,947 14,056
14,516
Other income 2,479 5,542 19,830
8,335
Total revenues 24,263 21,514 92,794 39,215
Cost and expenses:
Operating, general and
administrative 28,373 18,194 96,757
27,864
Interest 4,627 242 13,890
369
Reversal of restructuring
accruals
(2,044)
Total costs and expenses 33,000 18,436 110,647
26,189
Income (loss) from continuing
operations before income
taxes and minority
interest (8,737) 3,078 (17,853)
13,026
Income tax benefit
(expense) 233 (294) (67)
(1,327)
Income (loss) from
continuing operations 2,284 (9,646)
8,915
before minority interest (8,504) 2,784 (17,920)
11,699
Minority interest benefit 776 1,226
Income (loss) from
continuing operations (7,728) 2,784 16,694
11,699
Discontinued operations:
Income from discontinued
operations net of income
taxes & minority interest (4,716) 235 (5,396)
4,315
Net income (loss) (12,444) 3,019 (22,090)
16,014
Dividends on preferred
shares - undeclared (15,400) (17,597) (46,508)
(56,656)
Excess of carrying value of
redeemable preferred
shares over cost of
shares purchased 6,718 4,279
40,342
Net loss applicable
to Common Shares $(27,844) $(7,860) $(64,319) $
(300)
Income (loss) per common
and equivalent share:
Continuing Operations $ (2.42) $ (.84) $ (6.16) $
(.48)
Discontinued operations (.49) .02 (.56)
.45
Net loss per Common
Share $ (2.91) $ (.82) $ (6.72) $
(.03)
Number of shares used
in computation 9,578 9,578 9,578
9,543
Supplemental information
Additional interest
absent Chapter 11 filing
$2,314
CONTACT: Sard Verbinnen & Co., New York George Sard/Anna Cordasco/Paul Caminiti 212/687-8080
Glass & Associates Wins Two National Awards
CANTON, Ohio, Nov. 14, 1996 - The Turnaround" target=_new>http://bankrupt.com/dir.turnaround.html">TurnaroundManagement Association (TMA) recently recognized the
Ohio-based crisis- management firm of Glass & Associates and its founder with national- level awards. Senior
Associate John B. Kelly won the 1996 "Turnaround of the Year Award" for a bankruptcy reorganization plan
created and administered for a $200-million energy development company. In addition, the firm's founder and
chairman, Kenneth E. Glass, received the TMA's special award for "Outstanding Contributions to the Turnaround
Profession." Mr. Glass served two terms on the TMA Board of Directors and was President of the Association of
Certified Turnaround Professionals, which he helped to establish.
The awards were presented on November 12 during the TMA's annual meeting in Washington, D.C. The
Turnaround of the Year Award for a large company (revenues over $50 million) was accepted by Mr. Kelly, who
developed the award-winning turnaround strategy. Criteria for winning TMA's prestigious Turnaround of the
Year Award included financial outcome and innovative approaches.
Glass & Associates is a nationally recognized crisis-management firm that provides consulting and interim
management services for financially distressed businesses and companies in transition. It has been named one of
the "Top 12 Turnaround Management Firms" in the nation by TURNAROUNDS & WORKOUTS magazine. The
firm is based in Canton, Ohio, and has offices nationally, including Cleveland, Philadelphia and Pittsburgh. Mr.
Kelly is in charge of the Philadelphia office.
In January, 1995, Glass & Associates was engaged as interim manager for Philadelphia-based O'Brien
Environmental Energy, Inc., which had filed for bankruptcy protection in October, 1994. O'Brien's business was
developing cogeneration, waste-heat-recovery, and biogas projects to produce electricity and thermal energy for
sale under long-term contracts with industrial and commercial users and public utilities.
O'Brien was in default on bond interest payments. Major subsidiaries were in default of loan agreements and
were restricted from providing cash to the parent company. The expectation of unsecured creditors before Mr.
Kelly took over as chief administrative officer was a maximum return of 60 cents on the dollar, on nearly $80
million outstanding.
Under Mr. Kelly's direction, Glass & Associates developed a reorganization plan, stabilized relationships with
creditors and equity constituencies, and then negotiated the sale of the company which resulted not only in full
payment to creditors but also recovered $2.11 per share for the equity holders.
Founded in 1988, TMA is the only professional association representing the corporate renewal and change
management community. TMA's goals include promoting the profession, providing educational and professional
development opportunities, and providing a forum for networking and the sharing of corporate turnaround
techniques. Additionally, as the sponsor of the certifying organization, the Association of Certified Turnaround
Professionals, TMA also encourages professional excellence, while providing an objective measure and
recognition of expertise related to corporate renewal.
SOURCE Glass & Associates, Inc. /CONTACT: Shaun K. Donnellan of Glass & Associates, Inc.,
330-494-3252; or Jack Maddigan of Maddigan Communications, Inc., 412-344-9050/
Nu-Tech Bio-Med to acquire 51% of Physicians Clinical Laboratory, Inc. ("PCL")
NEW YORK, NY--Nov 14, 1996-- Nu-Tech Bio-Med, Inc. (NASD-SmallCap: NTBM) ("NTBM") today
announced that it signed an agreement to acquire 51% of Physicians Clinical Laboratory, Inc. (Nasdaq Bulletin
Board: PCLI) ("PCL"), a full-service clinical laboratory capable of providing a comprehensive battery of testing
services.
PCL currently generates approximately $80,000,000 in annual revenues, servicing approximately 9,000 accounts,
including physicians, hospitals and HMOs. However, PCL is incurring on-going net losses of approximately
$20,000,000 on an annualized basis. Accordingly, the Company has entered into an agreement with the holders of
certain senior debt, subordinated debt and the management of PCL, whereby PCL will file a plan of
reorganization under Chapter 11 of the United States Bankruptcy Code to restructure the debt and other
obligations of PCL. This Plan was filed with the United States Bankruptcy Court in Los Angeles on November 8,
1996.
Upon confirmation of the Plan, NTBM will convert $13,300,000 of senior debt of PCL, which NTBM purchased
on November 7, 1996 from existing debt holders of PCL for $10,000,000, and an additional $5,000,000 in cash,
for 51% of the common stock of PCL to be outstanding after the bankruptcy. The holders from whom NTBM
purchased the senior debt have agreed to contribute an additional $10,000,000 in capital to PCL. The Plan of
Reorganization is subject to the approval of the Bankruptcy Court and there can be no assurance such approval
will be obtained.
Effective November 7, 1996, J. Marvin Feigenbaum, the President of NTBM, assumed the responsibilities of
Chief Operating Officer of PCL.
The $10,000,000 to purchase the senior debt was derived from the proceeds of a private placement of NTBM of
up to 14,000 shares of Series A Preferred Stock at a purchase price of $1,000 per share. The Company has
closed on the sale of 10,000 shares of Series A Preferred Stock and is continuing to offer up to an additional
4,000 shares. The Company anticipates that the offering will be completed in November 1996, although there can
be no assurance as to the amount of additional shares of Series A Preferred Stock that will be sold. The Series A
Preferred Stock was not registered under the Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent such registration or an exemption therefrom.
Nu-Tech Bio-Med, through its wholly-owned subsidiary Analytical Biosystems Corporation, is a clinical
oncology laboratory service and research company which performs a patented in vitro chemosensitivity assay
known as the Fluorescent Cytoprint Assay ("FCA") which aids oncologists in selecting those chemotherapeutic
drugs most likely to be effective in treating a cancer patient's solid mass tumor. The Company's objective is to
provide a service which results in a cancer patient receiving more effective care.
This release contains forward looking statements which are subject to various risks and uncertainties, including
the completion of the acquisition of PCL, and the receipt of additional financing by NTBM. The Company's actual
results could differ from those anticipated in such forward looking statements as a result of numerous factors
which may be beyond the Company's control.
CONTACT: J. Marvin Feigenbaum The Equity Group Chairman, President and CEO Devin Sullivan Nu-Tech
Bio-Med 212/836-9608 212/391-2424 Robert Goldstein 212/371-8660
Pudgie's Chicken Retains Gruntal & Co. As Financial Advisor
UNIONDALE, N.Y., Nov. 14 /PRNewswire/ - Pudgie's Chicken Inc. (Nasdaq: PUDGQ), announced today that
the Company has retained the investment banking firm of Gruntal & Co., to assist in the Company's
debtor-in-possession financing and bankruptcy proceedings. In addition Gruntal & Co. will explore the
possibility of strategic equity transactions for the Company.
Pudgie's Chicken operates and franchises quick service Pudgie's Famous Chicken restaurants with an emphasis
on Home Delivery that offers tasty, reasonably priced meals featuring fresh skinless fried chicken. Pudgie's also
offers a "spicy" chicken menu, barbecued ribs, shrimp, corn on the cob, mashed potatoes, rice, salads, and other
side dishes. You can contact Pudgie's an their Web Site at HTTP://ISON.COM/PUDGIES/
SOURCE Pudgie's Chicken Inc. /CONTACT: Steven Wasserman, President & CEO of Pudgie's, 516 222-8833;
Joe Calabrese or Kerry Thalheim of the Financial Relations Board, 212-661-8030/
BWAY Corporation Reports Sales and Earnings for the Fourth Quarter and Fiscal Year Ended September 29,
1996
ATLANTA, GA - Nov. 14, 1996 - BWAY Corporation (Nasdaq: BWAY) announced its sales and earnings
report today for the Company's fourth fiscal quarter and fiscal year ended September 29, 1996.
The Company reported net sales of $89.5 million for the fourth quarter of fiscal 1996, up approximately 43%
from the $62.7 million reported for the same quarter of fiscal 1995. Sales for fiscal 1996 totaled $283.1 million,
an increase of approximately 14% over prior year sales of $247.5 million. This increase in sales for fiscal 1996
is primarily attributable to the two previously announced strategic acquisitions, Milton Can Company, Inc. and
Davies Can Company, completed late in the third quarter of fiscal 1996.
With regard to the Company's 1996 results, Warren J. Hayford, BWAY's Chairman and CEO, stated that, "We are
pleased with the level of sales growth we have been able to achieve through our strategic acquisitions during
1996. The businesses we have acquired are complementary to our existing business, offering excellent potential
for margin improvement for the acquired businesses, through the application of our historically successful
rationalization strategy."
The Company's reported earnings of $1.2 million for fiscal 1996 reflect two previously announced, non-recurring
charges. For the fourth quarter of fiscal 1996, the Company recorded a non-recurring, non-cash restructuring
charge of $12.9 million to cover the write down of certain assets which are out-moded or have been deemed
redundant based on management's plans for investments in technology to capitalize on opportunities for expanded
economies of scale provided by the recent acquisitions. The Company also recorded an extraordinary charge in
the third quarter of fiscal 1996 of $2.5 million (after tax) associated with the early extinguishment of debt. Fourth
quarter fiscal 1995 included a non-recurring, non-cash charge of $1.2 million (after tax) associated with the
termination of the Company's management contract with AB Leasing.
EBIT, excluding non-recurring and extraordinary charges, was $6.6 million for the fourth quarter of fiscal 1996,
up approximately 16% from the $5.7 million reported for the same quarter last year. Full year fiscal 1996 EBIT,
excluding non-recurring and extraordinary charges, was $24.7 million compared to $22.0 million for fiscal year
1995, an increase of approximately 12%. This increase resulted primarily from improved operating margins at
pre- acquisition facilities resulting from cost reduction and operating efficiency improvement initiatives. This
margin improvement was partially offset by the operating performance of the recently acquired facilities as the
Company initiated an aggressive rationalization program. Although employee termination costs in connection
with plant rationalizations, administrative workforce reductions, and other plant exit costs associated with the
recent acquisitions have been accrued for through purchase accounting adjustments, the Company incurred in
fiscal 1996, and will be incurring in fiscal 1997, other non-recurring costs which, under current accounting
pronouncements, will be charged against operating income.
Net income, before the non-recurring and extraordinary charges described above, would have been
approximately $11.5 million for fiscal 1996, compared to approximately $10.0 million for fiscal 1995, an
increase of approximately 15%. On a per share basis, net income before non-recurring and extraordinary charges
would have been $1.83 per share for fiscal 1996, based on 6.3 million average shares outstanding, compared to
$2.10 per share for fiscal 1995 where shares outstanding were only 4.7 million, reflecting the effect of the
Company's third quarter fiscal 1995 initial public stock offering. Reflecting these non-recurring charges, and the
change in shares outstanding the reported net income for fiscal 1996 was $0.19 per share, compared to $1.85 per
share for fiscal 1995.
BWAY Corporation is a leading manufacturer of steel containers for the general line segment of the North
American metal container industry.
BWAY CORPORATION
Consolidated Statements of Operations
(in thousands except per share data)
Three Months Ended Year Ended
9/29/96 10/1/95 9/29/96
10/1/95
Net sales $89,468 $62,678 $283,105
$247,480
Costs, expenses and other income
Costs of products sold (excluding
depr. and amort.) 76,454 52,044 234,518
206,268
Depreciation and amortization 2,104 1,766 7,425
5,934
Selling and0administrative expense 4,370 3,431 16,812
12,164
Provision for restructuring 12,860 0 12,860
0
Interest expense, net 1,764 1,047 4,872
5,211
AB Leasing fees and expenses 0 0 0
1,389
AB Leasing termination expense 0 0 0
1,995
Other, net (78) (284) (340)
(275)
Total costs, expenses and other
income 97,474 58,004 276,147
232,686
Income before taxes and
extraordinary item (8,006) 4,674 6,958
14,794
Provision for income taxes (2,851) 1,872 3,239
6,021
Income before extraordinary item (5,155) 2,802 3,719
8,773
Extraordinary loss from the
extinguishment of debt, net
of tax 0 0 (2,535)
0
Net income $(5,155) $ 2,802 $ 1,184
$ 8,773
Earnings per share $ (0.78) $ 0.45 $ 0.19
$ 1.85
Weighted average common shares
outstanding 6,573 6,267 6,273
4,731
SUPPLEMENTAL EPS DATA:
Reported net income $ (0.78) $ 0.45 $ 0.19
$ 1.85
Non-recurring and extraordinary
charges (net of taxes):
Provision for restructuring $ 1.18 $ --- $ 1.24
$ ---
AB Leasing termination expense $ --- $ --- $
--- $ 0.25
Extraordinary loss from the
extinguishment of debt $ --- $ --- $ 0.40
$ ---
Income before non-recurring and
extraordinary charges $ 0.40 $ 0.45 $ 1.83
$ 2.10
Weighted average common shares
outstanding 6,573 6,267 6,273
4,731
CONSOLIDATED BALANCE SHEETS
(in thousands)
9/29/96 10/1/95
ASSETS
Current assets $ 81,605 $ 74,200
Property plant & equipment, net 94,800 67,668
Non-current assets 68,728 26,090
Total assets $245,133 $167,958
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities $ 61,096 $ 35,389
Long-term debt 93,282 50,063
Other long-term liabilities 18,126 16,669
Stockholders' equity 72,629 65,837
Total liabilities & equity $245,133 $167,958
SOURCE BWAY Corporation/CONTACT: David P. Hayford, BWAY Corporation, 770-587-0888/
Coastal Physician Group Announces Third Quarter And Nine-Month Financial Results
DURHAM, N.C.--Nov. 14, 1996--Coastal Physician Group, Inc. (NYSE: DR) today reported financial results for
the third quarter and nine-month period ended Sept. 30, 1996.
The Company has continued to implement a plan to refocus on its core operations and to divest certain operating
units to address its debt obligations in order to improve Coastal's enterprise value. To facilitate an understanding
of the impact of the divestiture program, the Company's business units divested and to be divested have for the
first time been shown separately on the accompanying statements of operations.
Net operating revenue, excluding business units divested and to be divested, decreased 17.2 percent in the third
quarter to $106,681,000 from net operating revenue of $128,845,000 for the same period in 1995. Higher
contract attrition rates throughout 1996 and less new business development during both the second half of 1995
and the first three quarters of 1996 in the hospital-based contract services division, as well as lower net
collections per patient visit and reimbursement regulatory changes experienced by the Company's billing and
accounts receivable management services division, were the primary factors for the decline.
The Company reported a net loss for the third quarter of $38,455,000, or $1.61 per share, compared with a net
loss of $3,439,000, or $0.15 per share, for the third quarter of 1995. Approximately $15.1 million of the loss, or
$0.63 per share, was a result of goodwill adjustments associated with several of the Company's subsidiaries
(primarily those being sold), and $5.5 million, or $0.23 per share, was due to proxy and related litigation costs.
The loss was also due to increased expenses for information technology and telecommunications services,
increased expenses associated with the growth of the Company's health plans in North Carolina and New York,
and higher amortization expense of debt issuance costs relating to the restructuring of the Company's credit
facilities in May of 1996.
Reducing the loss from operations reported in the third quarter of 1996, were net gains of $19.4 million, or $0.81
per share, related to the sale of the Company's Maryland clinic operations and post-closing settlement of the late
1995 sale of its south Florida clinics.
For the nine months ended Sept. 30, 1996, net operating revenue decreased 13.0 percent to $344,021,000 from
$395,619,000 for the same period in the prior year. The revenue decline was primarily due to contract attrition,
less new business development and reimbursement trends mentioned earlier. The Company incurred a net loss for
the first nine months of 1996 of $75,044,000, or $3.15 per share, compared with a net loss of $7,564,000, or
$0.32 per share, for the same period in 1995.
Three Divestitures Will Substantially Reduce Bank Indebtedness
On Nov. 13, the Company executed a definitive agreement to sell MedCost, Inc., one of Coastal's managed care
companies and expects to realize approximately $13 million in cash proceeds from the transaction. In late
October, the Company executed a definitive agreement to sell certain assets of HealthNet, its New Jersey-based
clinic operations, from which Coastal will realize approximately $7 million in cash proceeds. These two
transactions are expected to close before the end of November, and the expected gains from the sales should be
reflected in the Company's statement of operations in the fourth quarter. In late September, Coastal completed the
sale of certain assets of Physicians Planning Group, Inc., the Company's Maryland capitated clinic operations,
which generated approximately $14 million in cash proceeds.
Management has been pleased with the progress to date of this divestiture program and is confident that its
successful execution will strengthen Coastal's financial position and business focus. In the aggregate, these three
transactions should reduce bank indebtedness by approximately $34 million, which will place the Company in a
position to meet or exceed its $40 million payment obligation by Jan. 2, 1997.
Meaningful Improvements At The Business Unit Level
"Although the divestitures serve to strengthen our financial position, we are clearly disappointed by our operating
results and will continue to vigorously pursue the steps necessary to improve our financial performance," said
Henry J. Murphy, president and chief executive officer of Coastal Physician Group, Inc. "As management has
previously stated, our activities at the business unit level have been designed to enhance cash flow by improving
cash collections and implementing cost control measures in order to meet our debt obligations. While these
efforts have not had a discernible impact on our income statement to date, we are encouraged by the meaningful
improvement in our core operations as we seek to restore profitability and maximize value for our shareowners."
-- CPS is more than $8.0 million ahead of cash flow projections presented to the bank lenders in the Spring of
1996. This business unit has generated modest positive cash flow from operations for the past three months and
has reduced DSOs in past due accounts receivable by nearly 13 days since the beginning of July. These
accomplishments are due to an emphasis on collections, the termination of unprofitable contracts, conversions of
contracts to profitable status, and additions through new business development.
-- In the aggregate, the combination of voluntary contract terminations by CPS, contract attrition, conversions
from fee-for- service to flat-rate billing, and additions through new business development has resulted in an
estimated net change in gross margin of a positive $3.7 million in 1996 versus a gross margin change of a
negative $4.1 million in 1995.
-- Recent efforts within Healthcare Business Resources (HBR), Coastal's billing and accounts receivable
management business, have involved the application of electronic systems interfacing, and a more comprehensive
and consistent use of Electronic Data Interchange billing and remittance processing to improve management and
client reporting processes. HBR has released nearly $14 million in backlogged claims from enrollment holds
during the last three months, with an aggressive effort to regionalize enrollment now in place at all HBR
locations.
-- Doctors Health Plan, the Company's North Carolina-based health maintenance organization (HMO), has
significantly increased its membership in 1996, from approximately 2,000 enrollees at Dec. 31, 1995 to over
8,900 today. The HMO currently has several of the largest employer groups in the Triangle region, including The
News & Observer, committed to offering Doctors Health Plan to their employees for a Jan. 1, 1997 effective
date. Separately, the HMO signed a three-year contract with Duke University Medical Center and its extensive
network of primary and specialty care physicians, expanding Doctors Health Plan's provider network to more
than 4,000 physicians and 45 hospitals across the state of North Carolina.
-- Healthplan Southeast, the Company's Tallahassee, Florida-based HMO, reported that its medical loss ratio
improved in the third quarter to 84.1 percent from 92.5 percent in the first quarter, reflecting more efficient
contracting and utilization review processes. This HMO returned to profitability during the second quarter of
1996, and further increased its operating income in the third quarter. In addition, Healthplan Southeast received a
one-year accreditation from the National Committee for Quality Assurance (NCQA), a national organization that
measures a health care provider's ability to achieve specific health care standards.
Coastal Physician Group, Inc. is a diversified physician management company providing a broad range of health
care and administrative services to physicians, hospitals, employers, managed care programs and other health
care providers.
NOTE: This news release contains statements that are forward-looking in nature, and are inherently subject to
uncertainties. Actual results may differ materially from those reflected in the forward-looking statements based
on a number of important risk factors, including, but not limited to: receipt of sufficient proceeds from divested
assets and the timing of any divestitures; the level and timing of operational improvements; the possibility of poor
accounts receivable collection and/or reimbursement experience; the possibility of increased medical expenses
due to increased utilization; the inability to obtained continued and/or additional necessary working capital
financing as needed; and other important factors disclosed from time to time in the Company's Form 10-K, Form
10-Q and other Securities and Exchange Commission filings.
COASTAL PHYSICIAN GROUP, INC.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
Sept. 30,
1996 1995
Operating revenue, net
Operating revenue, net $106,681 $128,845
Operating revenue, net - divested
and to be divested entities 31,124 81,144
Total operating revenue, net 137,805 209,989
Cost and expenses:
Physician and other provider services 89,189 96,195
Medical support services 13,513 15,588
Professional and consulting fees 5,318 3,073
Other selling, general and administrative 24,462 15,394
Costs and expenses -- divested and to
be divested entities 36,780 82,086
Total costs and expenses 169,262 212,336
Gain on divested assets, net 1,780 --
Operating loss (29,677) (2,347)
Other income (expense):
Proxy and related litigation costs (5,472) --
Interest expense (2,474) (2,449)
Interest income 175 104
Amortization of debt issuance costs (1,788) (323)
Other, net (567) 102
Total other expense (10,126) (2,566)
Loss before income taxes and
extraordinary item (39,803) (4,913)
Provision (benefit) for income taxes 516 (1,474)
Loss before extraordinary item (40,319) (3,439)
Extraordinary item - gain on pooled
portion of south Florida divestiture,
net of income taxes of $647 1,864 --
Net loss $(38,455) $(3,439)
Net loss per common share:
Loss before extraordinary item $(1.69) $(.15)
Extraordinary gain 0.08 -
Net loss $(1.61) $(0.15)
Weighted average number of shares
outstanding 23,862 23,691
Nine Months Ended
Sept. 30,
1996 1995
Operating revenue, net
Operating revenue, net $344,021 $395,619
Operating revenue, net - divested
and to be divested entities 92,556 233,571
Total operating revenue, net 436,577 629,190
Cost and expenses:
Physician and other provider services 281,202 285,381
Medical support services 42,050 50,710
Professional and consulting fees 11,071 7,623
Other selling, general and administrative 62,808 49,005
Costs and expenses -- divested and to
be divested entities 103,208 239,845
Total costs and expenses 500,339 632,564
Gain on divested assets, net 1,780 --
Operating loss (61,982) (3,374)
Other income (expense):
Proxy and related litigation costs (5,472) --
Interest expense (6,573) (5,500)
Interest income 377 571
Amortization of debt issuance costs (2,516) (571)
Other, net (226) (1,931)
Total other expense (14,410) (7,431)
Loss before income taxes and
extraordinary item (76,392) (10,805)
Provision (benefit) for income taxes 516 (3,241)
Loss before extraordinary item (76,908) (7,564)
Extraordinary item - gain on pooled
portion of south Florida divestiture,
net of income taxes of $647 1,864 --
Net loss $(75,044) $(7,564)
Net loss per common share:
Loss before extraordinary item $(3.23) $(0.32)
Extraordinary gain 0.08 -
Net loss $(3.15) $(0.32)
Weighted average number of shares
outstanding 23,832 23,630
COASTAL PHYSICIAN GROUP, INC.
Consolidated Balance Sheets
(In thousands, except per share data)
September 30, December 31,
1996 1995
(unaudited)
Assets
Current Assets
Cash and cash equivalents $11,205 $8,147
Marketable securities 9,227 9,303
Trade accounts receivable, net 111,320 149,981
Accounts receivable, other 15,282 11,315
Notes receivable from shareholders -- 1,879
Refundable income taxes -- 12,804
Prepaid expenses and other current assets 8,015 3,882
Deferred income taxes 4,285 4,265
Total current assets 159,334 201,486
Property and equipment at cost, less
accumulated depreciation 21,901 33,441
Excess of cost over fair value of net assets
acquired, net 36,833 53,836
Deferred income taxes 2,358 2,244
Other assets 17,840 22,050
Total assets $238,266 $313,057
Liabilities and Shareholders' Equity
Current Liabilities
Current maturities and other short-
term borrowings $83,236 $5,210
Accounts payable 24,783 19,600
Accrued physician fees and medical costs 30,843 38,468
Accrued expenses 24,081 26,138
Total current liabilities 162,943 89,416
Long-term debt, excluding current maturities 3,064 77,270
Total liabilities 166,007 166,686
Shareholder's equity:
Preferred stock $.01 par value; shares
authorized 10,000; none issued or
outstanding - -
Common stock $.01 par value; shares authorized
100,000; shares issued and outstanding
23,862 and 23,754, respectively 239 238
Additional paid-in capital 142,386 142,345
Common stock warrants 987 -
Retained earnings (accumulated deficit) (71,419) 3,626
Unrealized appreciation of available-
for-sale securities 66 162
Total shareholders' equity 72,259 146,371
Total liabilities and shareholder's
equity $238,266 $313,057
CONTACT: Coastal Physician Group, Inc. Robert P. Borchert, 919/383-0355 Senior Vice President
EqualNet Holding Corp. announces first quarter results
HOUSTON, TX --November 14, 1996--EqualNet Holding Corp. (Nasdaq: ENET), today announced results for
the first quarter ended September 30, 1996. Sales for the quarter were $13.3 million compared to $23.9 million
for the same quarter last year. The net loss for the quarter was $1.6 million, or $0.26 per share, compared to net
income of $881,000, or $0.15 per share, for the same period in 1995.
Zane Russell, EqualNet's Chairman and Chief Executive Officer, noted, "Over the past four months, revenues
have virtually stabilized on a per business day basis. We continue to pursue financing alternatives, a joint venture
or a strategic alliance which will improve liquidity and allow us to grow our revenue base."
Due to operating losses sustained during the second half of fiscal 1996, and the first fiscal quarter of 1997, and a
decline in its revenue base, the Company approached its maximum borrowing capacity under its revolving credit
facility. The Company's borrowing capacity under its credit facility declined during the first quarter as a result of
operating losses and the exclusion of certain receivables from the criteria of eligible receivables.
At current levels of operations, the Company must seek additional capital and continued concessions from its
vendors and continue to reduce expenses to bring them in line with current levels of revenues. The Company
currently is negotiating with (i) potential investors to secure between $2.5 million and $3.5 million from a
private placement of the Company's convertible preferred stock, (ii) its lenders to maintain availability under its
revolving credit facility, amend certain financial covenants and waive certain financial covenant defaults, and
(iii) its primary underlying carriers for concessions and favorable terms. There can be no assurance that the
Company will be successful in securing such financing or such amendments to its existing credit facility. In the
event the Company is unsuccessful in achieving these objectives, it will seek an alliance with a strategic partner,
or in the event no such strategic alliance is accomplished, the Company may be required to see protection under
United States bankruptcy laws.
EqualNet is a nationwide long-distance company offering discounted major carrier transmission services to
businesses. The Company's core strategy focuses on managing growth while remaining adaptable in the highly
competitive long distance industry.
(Financial table follows)
EQUALNET HOLDING CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Dollars in Thousands
Three Months Ended
September 30,
1996 1995
Sales $ 13,315 $23,920
Cost of Sales 10,288 18,212
3,027 5,708
Selling, general and
administrative expenses 3,178 3,111
Depreciation and amortization 1,850 1,091
Operating income (loss) (2,001) 1,506
Other income (expense)
Interest income -- 45
Interest expense (270) (108)
Miscellaneous (90) (4)
(360) 67
Income (loss) before federal income
taxes (2,361) 1,439
Provision (benefit) for federal income
taxes (803) 558
Net income (loss) $ (1,558) $ 881
Net income (loss) per share $ (0.26) $ 0.15
Weighted average number of
shares outstanding 6,002 6,024
CONTACT: Michael Hlinak Senior Vice President/COO EqualNet Holding Corp. (281) 529-4600 or
INVESTOR RELATIONS: Howard Zar/Melissa Garelick, Ross Felix, Press: Lee Foley/Jennifer Swanson
Morgen-Walke Associates (212) 850-5600
Interline Resources reports revenues of $4,017,977 and net loss of $690,250 or $0.05 per share for third quarter
1996
ALPINE, Utah--Nov. 14, 1996--Interline Resources Corp. (AMEX:IRC.EC) reported revenues of $4,017,977 for
the third quarter ended Sept. 30, 1996, compared to revenues of $5,562,928 for the third quarter ended Sept. 30,
1995.
Interline also reported a net loss of $690,250, or $0.05 loss per share.
The decrease in revenues from third quarter 1996 compared to third quarter 1995 is attributed to a decrease of
construction revenues of $1,195,653. In its construction business, Interline's focus is to downsize the commercial
and industrial operations and put more emphasis on its manufacturing operations. In addition, Interline received a
one-time payment of $1 million in third quarter 1995 for an exclusive license agreement signed in July 1995.
The loss was attributed primarily to interest due to a shareholder of Interline on outstanding loans, to losses from
the start-up of the Interline (UK) refinery and from the Salt Lake City refinery, and overruns on two commercial
construction contracts because of an increase in labor costs.
For the nine months ended Sept. 30, 1996, Interline's revenue increased to $13,346,070 compared to $12,310,304
-- an increase of 8 percent. For this period, Interline reported a net loss of $2,454,293, or $0.18 loss per share.
For the nine months ended Sept. 30, 1995, Interline had net income of $189,132, or $0.01 per share.
Interline Resources Corp. and Subsidiaries
1996 Third Quarter Results
Statement of Operations
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
(unaudited) (unaudited)
1996 1995 1996 1995
Revenue $4,017,977 $5,562,928 $13,346,070
$12,310,304
Operating income (loss) (319,566) 826,316 (1,761,144)
639,794
Net income (loss) ($690,250) $510,335 ($2,454,293)
$189,132
Income (loss) per share ($0.05) $0.04 ($0.18)
$0.01
Weighted avg. shares 14,063,167 13,950,200 13,991,090
13,851,435
Interline Resources Corp. and Subsidiaries
1996 Third Quarter Results
Balance Sheet
Sept. 30, 1996 Dec. 31, 1995
Cash $165,832 $1,705,219
Current assets 4,543,944 5,580,562
Fixed assets 10,523,370 10,461,186
Other assets 2,395,845 2,237,399
Total assets $17,463,159 $18,279,147
Current liabilities $8,928,465 $6,902,829
Long-term liabilities 3,001,360 3,392,692
Stockholders' equity 5,533,334 7,983,626
Total liabilities and
stockholders' equity $17,463,159 $18,279,147
Interline has previously announced that it is in default under the terms of three loans in the amount of
approximately $2.5 million made to it by one of its shareholders. These loans are secured by the outstanding
shares of Interline Energy Services, Gagon Mechanical and Interline Hydrocarbon.
Interline is attempting to renegotiate the terms of these loans, however, there is no assurance that any
modifications of the terms of these loans may be reached.
Furthermore, on May 15, 1996, Interline obtained an additional loan in the amount of $2.5 million from the same
shareholder in the form of a 9.25 percent senior secured note. Although this note is due Jan. 15, 1998, under the
default provisions of this note, this note is also in default, as a result of Interline's default of the three previous
loans, and the lender has a right to accelerate the payment thereof.
This note may be converted, between Aug. 15 and Dec. 31, 1996, into shares of Interline's common stock at the
lesser of $3.12 per share or 80 percent of the average closing price for shares of Interline's common stock for
five consecutive trading days preceding the date of conversion.
The lender has indicated to Interline that he does not currently intend to take remedial action against Interline, and
Interline is attempting to renegotiate the terms of these loans.
If Interline is unable to restructure its past due obligations or sell sufficient assets or raise additional financing,
then there can be no assurance that Interline will be able to continue its current operations, and Interline may be
compelled to consider filing under Chapter 11 of the federal bankruptcy laws.
In any event, Interline may also need to raise additional financing in order to fund its current operations,
depending upon its operating results, and notes that it has required financing for such purposes in the past.
Interline has been notified by the American Stock Exchange that the Exchange is reviewing Interline's continued
listing eligibility, since it has fallen below the guidelines for continuing listing on the Emerging Company
Marketplace of the Exchange. Interline is working with the American Stock Exchange for a resolution of this
matter; however, there is no assurance that Interline will continue to be listed on the Exchange.
CONTACT: Interline Resources Corp., Alpine Mark Fredrickson, 801/756-3031 Fax: 801/756-8843 E-mail:
ircstock@interlineresources.com