Dow Chemical Announces 1996 Earnings Per Share of $7.71
MIDLAND, Mich., Jan. 30, 1997 - The following was released by The Dow Chemical Company (NYSE: DOW):
1996 Year End Highlights -- 1996 sales were $20.1 billion nearing Dow's record sales of -- $20.2 billion in 1995 despite
price declines for key products. -- Good volume growth, significant productivity improvements and a strong and balanced
product portfolio buffered the impact of lower prices and higher feedstock and energy costs. 1996 operating income was
$3.1 billion versus $3.9 billion a year ago. -- 1996 earnings per share were $7.71 compared to $7.72 for 1995.
Fourth Quarter of 1996 Highlights
-- Dow posted record fourth quarter sales of $4.9 billion, up 7 percent from $4.6 billion for the fourth quarter of 1995.
-- Earnings per share were $1.69, up 4% from $1.63 a year ago. -- Dow experienced strong volume growth of 10 percent.
(In millions, except for per share
amounts)
3 Months Ended 12
Months Ended
Dec. 31
Dec. 31
1996 1995 1996
1995
Net Sales $4,903 $4,594 $20,053
$20,200 Operating Income $577 663
$3,087 3,891 Income from Continuing 409
415 1,900 1,884
Operations
Earnings Per Common Share 1.69 1.63 7.71
7.72
Review of Results
The Dow Chemical Company today announced sales of $20.1 billion, operating income of $3.1 billion, and earnings per
share of $7.71 for 1996.
"I am very pleased with our performance," said William S. Stavropoulos, president and chief executive officer. "We took
significant action to accelerate the implementation of our long-term strategy. The resulting performance improvements and
balance in our product portfolio positively contributed to our bottom line."
Dow's sales for the year were $20.1 billion, compared to 1995's record- setting $20.2 billion, reflecting a 7 percent gain in
volume which largely offset an 8 percent decline in price. Through a combination of volume growth, improved productivity,
business portfolio restructuring and lower costs, Dow was able to offset almost $1.2 billion of the approximately $2 billion
impact of receding prices and higher feedstock and energy costs. As a result, Dow's operating income for the year was $3.1
billion, off only $804 million from the previous year.
Earnings per share were $7.71, flat with $7.72 in 1995, and return on capital remained above 15 percent. Dow's 1995
earnings were impacted by a charge of $1.24 per share investment write-down related to Dow Corning's filing for
protection under Chapter 11 of the United States Bankruptcy code. As well, 1995 earnings included 69 cents per share from
the combined operations and sale of Dow's pharmaceutical businesses.
In the fourth quarter of 1996, Dow's sales were up 7 percent from $4.6 billion to $4.9 billion. A strong volume increase of
10 percent offset a 3 percent price decline and contributed to Dow's setting a record for fourth quarter sales. Prices were off
for some key products, particularly caustic and polystyrene, compared to a year ago. Notable exceptions were polyethylene
and vinyl chloride monomer (VCM) which experienced modest price increases. Feedstock and energy costs continued to
rise during the quarter. However, as was the case with year end results, Dow substantially offset the combined impact of
$475 million of the quarter's lower prices and higher feedstock costs. As a result, operating income dropped just $86
million to $577 million from $663 million in the fourth quarter of 1995. Earnings per share were $1.69, up 4 percent from
$1.63 a year ago.
Dow's 1996 fourth quarter and year end earnings included gains from the sale of non-strategic assets that did not fit with the
company's core strengths.
During the year, Dow sold or restructured its interest in a number of businesses including: Boride Products, Crestar Energy,
and Cynara. In addition, the company realized a pre-tax gain of $77 million for the fourth quarter and $120 million for the
year through the sale of a portion of its ownership in Oasis Pipeline, contributing to a total of $343 million of sundry income
for the year. As part of Dow's aggressive management of its portfolio, the company will continue to look for the best
value-creating opportunities for its businesses, including selling certain assets which do not meet its economic profit
objectives.
Dow's productivity efforts are driving costs down on all fronts. From a 1992 base through 1995, the company reduced its
annual structural costs by $721 million. This year, Dow set a new goal to further reduce structural costs by $500 million by
the year 2000, from a 1995 base. Significant progress toward this goal was achieved in 1996 as structural costs declined by
$180 million.
During the year, the company reduced its selling, administration and, research and development expenses by $98 million,
meeting its target. This occurred even while absorbing expenses related to acquisitions and new business start-ups during
the year. All of Dow's productivity goals and results are stated over and above inflation.
"We have made solid progress," said Stavropoulos. "But our drive for improved productivity will not stop. Innovation is
taking place throughout the company. Breakthrough technology is allowing us to run our processes at a lower cost, our new
organizational model has resulted in greater leveraging of resources worldwide, and Dow people continue to find
increasingly efficient ways to do their jobs."
Dow experienced steady demand growth throughout 1996 with volume up across all segments and geographies. Plastics
recorded the sharpest rise in volume, posting gains of 21 percent for the quarter and 17 percent for the year, over the same
periods in 1995. Strategic, value-creating acquisitions in Latin America and Europe played a significant role in this growth.
Chemicals and Metals had a volume gain of 12 percent in the fourth quarter, based largely on strong demand for VCM. In the
fourth quarter, Agricultural Chemicals experienced particularly strong demand in Latin America and Asia Pacific due to
new product introductions like CLINCHER.. rice herbicide.
Dow's Performance segments generated close to 50 percent of Dow's sales and over half of the company's operating income
this year. They continue to demonstrate their strength in the face of difficult pricing environments. Sales were basically flat
with the previous year, while operating income increased 8 percent for Performance Chemicals and 11 percent for
Performance Plastics.
All businesses in Performance Plastics set operating income records in 1996, with the exception of the INSITE....
technology business, the sales of which are now part of DuPont Dow Elastomers L.L.C. Performance Chemicals also turned
in a strong year with both Agricultural Chemicals and Specialty Chemicals posting record operating incomes. 1996 marks
the fifth consecutive year of higher operating income for Agricultural Chemicals and the fourth for Specialty Chemicals.
Throughout the year, Dow continued its active share repurchase program, buying back 14.9 million shares. This reduced the
company's total outstanding shares by 4 percent from last year.
"In 1996 we undertook a number of key growth initiatives which build on our core strengths," said Stavropoulos. "These
include investments in the emerging economies of Latin America, eastern and central Europe, and Asia Pacific as well as
entries into a number of new product platforms including polypropylene, PTA/PET, agricultural biotechnology and
elastomers. We expect these initiatives will contribute significant value in the coming years.
"Our 1996 results demonstrate we have the right strategy in place. Expect 1997 to be another year of progress for Dow as
we continue to achieve our productivity and value-creating growth goals," said Stavropoulos.
.. Trademark of DowElanco
.... Trademark of The Dow Chemical Company
The Dow Chemical
Company and
Subsidiaries
Consolidated Statements of Income
Three Months
Ended Twelve
Months Ended
In millions, except for Dec. 31, Dec.
31, Dec. 31,
Dec. 31,
share amounts (Unaudited) 1996 1995
1996 1995
Net Sales $4,903
$4,594 $20,053
$20,200
Operating Costs and Expenses
Cost of sales 3,633
3,227 14,108
13,337
Insurance and finance company
operations, pretax income (28)
(26) (78)
(61)
Research and development expenses 194
199 761
808
Promotion and advertising expenses 89
103 370
416
Selling and administrative expenses 435
419 1,766
1,771
Amortization of intangibles 3
9 39
38
Total operating costs and expenses 4,326
3,931 16,966
16,309
Operating Income 577
663 3,087
3,891
Other Income (Expense)
Equity in earnings of 20%-50%
owned companies 1
16 66
70
Interest expense and amortization
of debt discount (140)
(108) (494)
(434)
Interest income and foreign
exchange-net 64
96 286
289
Net loss on investment (Note B) 0
0 0
(330)
Sundry income - net 177
27 343
43
Total other income (expense) 102
31 201
(362)
Income before Provision for Taxes
on Income and Minority Interests 679
694 3,288
3,529
Provision for Taxes on Income 234
250 1,187
1,442
Minority Interests' Share in Income 34
27 194
196
Preferred Stock Dividends 2
2 7
7
Income from Continuing Operations 409
415 1,900
1,884
Discontinued Operations
Income from pharmaceutical businesses,
net of taxes on income
- - - 18
Gain on sale of pharmaceutical businesses
net of taxes on income (Note C)
- - - 169
Net Income Available for Common
Stockholder $409
$415 $1,900
$2,071
Average Common Shares Outstanding 242.2
254.9 246.3
268.2
Earnings per Common Share
from Continuing Operations $1.69
$1.63 $7.71
$7.03
Earnings per Common Share $1.69
$1.63 $7.71
$7.72
Common Stock Dividends Declared per
Share $0.75
$0.75 $3.00
$2.90
Depreciation $311
$390 $1,259
$1,369
Capital Expenditures $428
$351 $1,344
$1,417
Notes to Financial Statements
Note A: The unaudited interim financial statements reflect all adjustments (consisting of normal recurring accruals) which,
in the opinion of management, are considered necessary for a fair presentation of the results for the periods covered. Certain
reclassifications of prior year amounts have been made to conform to current year presentation. These statements should be
read in conjunction with the financial statements and notes thereto included in the Company's Form 10-K for the year ended
December 31, 1995.
Note B: In May 1995, Dow Corning Corporation filed for protection under Chapter 11 of the United States Bankruptcy
Code. The Company is a 50 percent shareholder in Dow Corning Corporation. As a result of Dow Corning's Chapter 11
filing and its 1995 second quarter loss, the Company recognized a pretax charge against income of $330 million, fully
reserved its net investment in Dow Corning and will not recognize its 50 percent share of future equity earnings while Dow
Corning remains in Chapter 11. The charge impacted the Company's second quarter of 1995 earnings by $1.24 per share.
Note C: In June 1995, the Company sold its 197 million shares of Marion Merrell Dow to Hoechst for $5.1 billion or
$25.75 per share. In addition, subsidiaries of the Company sold the Company's Latin American pharmaceutical business
based in Argentina, Brazil and Mexico to Roussel Uclaf S.A. for $133 million. These two transactions, net of taxes on
income of $382 million, increased the Company's second quarter of 1995 earnings by $169 million or 62 cents per share.
SOURCE The Dow Chemical Company /CONTACT: Darlene MacKinnon of The Dow Chemical Company, 517-636-2876/
Ringer Announces First Quarter Results
MINNEAPOLIS, MN - Jan. 30, 1997 - Ringer Corporation (Nasdaq: RING) today announced earnings for its first quarter
ended December 31, 1996 of $60,000 or $0.01 per share on sales of $3,481,000. This compares favorably to last year's net
loss of $(52,000) or $0.00 per share on sales of $3,636,000.
Commenting on the Company's sales performance, Ringer President and Chief Executive Officer, Stanley Goldberg, stated,
"Sales were $155,000 below last year primarily due to a shortfall in our international business, the discontinuance of our
Supreme Lawn(R) fertilizer line and the effects of the bankruptcy of Ernst Home Centers. This decline was offset in part by
shipments of new product introductions such as Safer(R) Weed-Away(R) Lawn Weed Killer and by the addition of new
distribution such as Lowe's Companies, Inc."
Regarding the Company's financial performance, Goldberg commented, "Overall, we were satisfied with our first quarter
operating results. Our margins remained strong at 51% of sales, expenses were down 9% and our cash balance was up by
more than $600,000, all resulting in a $112,000 increase in bottom-line performance versus last year."
Goldberg then concluded, "We believe we have achieved one critical objective which has been to financially stabilize the
business while building a platform to achieve profitable growth. In addition, we continue to devote significant resources to
achieve our other stated major goal, which is to aggressively pursue appropriate merger and acquisition opportunities,
designed to enhance shareholder value."
Ringer Corporation is a leader in developing and marketing environmentally-sound, premium-performance lawn and garden
care products. The Company's stock is traded on the Nasdaq National Market under the symbol RING.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Information contained in this press release, other than historical information, should be considered forward-looking and may
be subject to the following risks and uncertainties: There is no assurance that Ringer will be able to operate its present
business effectively, that it will be able to maintain or increase sales levels, that any new or existing customer will place
future orders for the Company's products, that any of the Company's new products will obtain market acceptance or that
market acceptance of any existing products will be maintained or improved. There is no assurance that Ringer will identify
further merger and acquisition opportunities or that any merger or acquisition would lead to growth and result in enhanced
shareholder value. There is no assurance that Ringer will be able to secure financing for future merger and acquisition
opportunities.
RINGER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In Thousands Except Per Share Amounts)
Three
Months
Ended
Dece
mber
31,
1996
1995
NET SALES $ 3,481
$ 3,636 COST OF SALES
1,707 1,785
Gross Profit 1,774
1,851
OPERATING EXPENSES:
Distribution 387
408 Sales & Marketing
817 917 General & Administration
325 375 Research & Development
125 122 Amortization of
Intangibles 94 100
1,748
1,922
INCOME (LOSS) BEFORE OTHER INCOME 26
(71)
OTHER INCOME, NET 34
19
INCOME (LOSS) BEFORE INCOME TAX EXPENSE 60
(52)
INCOME TAX EXPENSE --
--
NET INCOME (LOSS) $60
$(52)
NET INCOME (LOSS) PER COMMON AND COMMON
EQUIVALENT SHARE $.01
$(.00)
AVERAGE COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING 10,922
10,922
SOURCE Ringer Corporation/CONTACT: Mark Eisenschenk, Vice President of Finance of Ringer Corporation,
612-703-3300/
50-OFF Stores Announces Results of Year-End Physical Inventory
SAN ANTONIO, TX - Jan. 30, 1997 -San Antonio based 50-OFF Stores, Inc. announced today the results of its year-end
physical inventory at its 43 off-price/close-out retail stores and its clearance and distribution centers. As previously
reported, the company and its significant subsidiaries filed petitions for protection under Chapter 11 of the Bankruptcy Code
Oct. 9, 1996. Among the factors contributing to the company's poor operating performance the last few years had been the
company's disappointing year-end physical inventories. Management is pleased to announce that such was not the case with
the most recent inventories. Whereas the inventory shrinkage determined in the fiscal 1996 and 1995 physical inventories
ran 4.14 percent and 3.82 percent of sales, respectively, the fiscal 1997 inventory reflected a 1.87 percent shrinkage, right
in line with the retail industry average as reported by the University of Florida in its "National Retail Security Survey" and
below the reported 2.14 percent average for discount stores. Dollar shrinkage dropped to $984,853 from $3,625,697 and
$3,408,714 in fiscal 1996 and 1995, respectively.
"Shrinkage" is the book loss on inventory due to the physical loss of inventory attributed to (industry averages): employee
theft (38.4 percent), shoplifting (35.8 percent), administrative error (19.4 percent) and vendor fraud (6.4 percent).
Shrinkage reduction has been a major concern of 50-OFF's management, and the recent results are cause for confidence in
programs initiated this year reverse historical trends.
50-OFF management continues to work toward the filing of a reorganization plan with the Bankruptcy Court and expects to
file such a plan shortly around 41 continuing 50-OFF and LOT$OFF stores in Texas (28), Louisiana (5), Oklahoma (4),
New Mexico (3) and Tennessee (1).
SOURCE 50-Off Stores, Inc. /CONTACT: Media: Charles Fuhrmann, CEO, 210-804-4904 or Creditors: 210-804-5357,
both of 50-OFF Stores, Inc./
50-OFF Stores announces results of year-end physical inventory
SAN ANTONIO, Texas--Jan. 30, 1997--San Antonio based 50-OFF Stores, Inc. announced Thursday the results of its year-
end physical inventory at its 43 off-price/close-out retail stores and its clearance and distribution centers.
As previously reported, the company and its significant subsidiaries filed petitions for protection under Chapter 11 of the
Bankruptcy Code Oct. 9, 1996. Among the factors contributing to the company's poor operating performance the last few
years had been the company's disappointing year-end physical inventories. Management is pleased to announce that such
was not the case with the most recent inventories.
Whereas the inventory shrinkage determined in the fiscal 1996 and 1995 physical inventories ran 4.14 percent and 3.82
percent of sales, respectively, the fiscal 1997 inventory reflected a 1.87 percent shrinkage, right in line with the retail
industry average as reported by the University of Florida in its "National Retail Security Survey" and below the reported
2.14 percent average for discount stores. Dollar shrinkage dropped to $984,853 from $3,625,697 and $3,408,714 in fiscal
1996 and 1995, respectively.
"Shrinkage" is the book loss on inventory due to the physical loss of inventory attributed to (industry averages): employee
theft (38.4 percent), shoplifting (35.8 percent), administrative error (19.4 percent) and vendor fraud (6.4 percent).
Shrinkage reduction has been a major concern of 50-OFF's management, and the recent results are cause for confidence in
programs initiated this year reverse historical trends.
50-OFF management continues to work toward the filing of a reorganization plan with the Bankruptcy Court and expects to
file such a plan shortly around 41 continuing 50-OFF and LOT$OFF stores in Texas (28), Louisiana (5), Oklahoma (4),
New Mexico (3) and Tennessee (1).
CONTACT: 50-OFF Stores Inc., San Antonio Media Contact: Charles Fuhrmann, 210/804-4904 Creditor Contact:
210/804-5357
MobileMedia Corporation Seeks to Reorganize Under Chapter 11
RIDGEFIELD PARK, N.J., Jan. 30, 1997 - MobileMedia Corporation (Nasdaq: MBLM) announced today that it has filed a
voluntary petition under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
The Company said that it elected to seek Court protection in order to implement an operational turnaround plan and a
financial restructuring.
MobileMedia said that its immediate needs were to satisfy short- term financing requirements, reach an agreement with
Motorola Inc., its principal supplier of pagers, and initiate a restructuring process, and that entering chapter 11 proceedings
should facilitate its efforts to address those issues.
MobileMedia said that it expects to operate in the normal course of business during the reorganization proceeding and that it
has received a commitment for up to $200 million in debtor-in-possession ("DiP") financing from a consortium of banks led
by The Chase Manhattan Bank. MobileMedia said that it would seek the Court's permission to access the DiP financing to
fund normal business operations and other cash needs during the bankruptcy proceeding.
MobileMedia said that one of the conditions for borrowing under the DiP facility is that certain key suppliers of paging
equipment shall have entered into agreements with the Company to sell equipment and provide services. The Company said
that it would immediately file a motion seeking to pay the pre- petition claims of certain key suppliers, including Motorola.
Although there can be no assurance, the Company believes that the Bankruptcy Court will approve the motion and that
Motorola will enter into an agreement and commence shipping product and providing services.
MobileMedia said that it currently has adequate cash to fund operations, including the payment of post-petition obligations
to trade suppliers, during the period of time within which it expects to reach a satisfactory agreement with Motorola and
gain access to the DiP financing.
The Company also said that employees would be paid in the normal course of business during the reorganization proceeding
and that it would seek immediate Court approval to pay employee pre-petition wages, salaries and benefits.
MobileMedia said it has hired turnaround consultants Alvarez & Marsal, Inc. and that Joseph A. Bondi, a managing director
of Alvarez & Marsal, would lead the implementation of the Company's financial and operational turnaround effort. Mr.
Bondi said: "Today's chapter 11 filing is a prudent step for MobileMedia and allows us to call a 'time out' with our
creditors while we develop a plan to improve our financial health. The filing enhances our ability to gain access to
short-term financing and to reach an agreement with Motorola, both of which are key to a successful turnaround of
MobileMedia."
The Company said that MobileMedia Communications, Inc., MobileMedia Corporation's wholly owned subsidiary through
which it conducts the majority of its business and which is the obligor on substantially all of the Company's indebtedness,
and most of MobileMedia's other subsidiaries are also included in the bankruptcy filing.
MobileMedia is the second largest provider of paging and personal communications services in the United States, offering
local, regional and nationwide coverage to approximately 4.4 million subscribers in all 50 states, Canada, and the
Caribbean. The Company operates two one-way nationwide networks and owns two nationwide narrowband PCS licenses.
Statements contained in this release that are not based on historical fact are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The "Risk Factors" and cautionary statements identifying
important factors that could cause actual results to differ materially from those in the forward-looking statements are
detailed in the Company's 1995 10- K filing with the Securities and Exchange Commission. In addition, the ability of the
Company to successfully implement an operational turnaround and a financial restructuring is subject to certain factors
beyond its control, including approvals by the Bankruptcy Court, stability of customer demand, the sufficiency of its capital
resources, and satisfactory resolution of matters now pending before the Federal Communications Commission, among other
things.
SOURCE MobileMedia Corporation /CONTACT: Media: Krista Grossman, 212-484-7760, or Investors: Laura Wilker,
201-462-4959, both for MobileMedia/
Performance Nutrition, Inc. Announces Plan to Sell Assets
DALLAS, TX - Jan. 30, 1997 - Performance Nutrition, Inc. (OTC: PNII), which filed for Reorganization under Chapter 11
of the Bankruptcy Code in the Federal Bankruptcy Court in Dallas, on January 21, has filed a motion with the Bankruptcy
Court for authorization to sell its operating assets to Naturade, Inc.(OTC: NRDC), a California nutritional
manufacturer-distributor with whom PNI has a relationship.
SOURCE Performance Nutrition, Inc. /CONTACT: David E. Wynne of Performance Nutrition, 972-250-2274/
Oscar Gruss & Son initiates when-issued trading in SLM International
NEW YORK, NY --Jan. 30, 1997--The investment banking firm of Oscar Gruss & Son Inc. announced today that they are
now making a market in the SLM International common stock and warrants when-issued, which are coming out of the
reorganization plan confirmed by the bankruptcy court on Jan. 23, 1997.
The new SLM International common will be traded under the symbol SLMMV and the warrants under the symbol SLMWV.
The symbol for the old SLM International stock will remain SLMIQ until it is exchanged for new warrants and delisted.
CONTACT: Andreder and Company Steven S. Anreder, 212/421-4020
AST reports fourth quarter results
IRVINE, Calif.--Jan. 30, 1997--AST Research Inc. (NASDAQ:ASTA) on Thursday announced revenues of $611.4 million
for the fourth quarter of fiscal year 1996, ended Dec. 28, 1996, compared with revenues of $612.9 million reported during
the prior year period.
Net loss was $68.0 million ($1.18 per share), compared with a net loss of $128.6 million ($2.88 per share) reported during
the prior year period.
Total revenues for fiscal year 1996 were $2.104 billion, vs. $2.348 billion for the previous calendar year. Net loss for
fiscal year 1996 was 417.7 million ($8.22 per share) vs. 263.2 million ($7.01 per share) in calendar year 1995. In 1995
AST changed its fiscal year end from June to December. Therefore, fiscal year 1996 comparisons to the prior calendar year
period include the third and fourth quarters of fiscal year 1995 and the first and second quarters of transition year 1995.
In a separate announcement issued earlier today, the company also stated it has received a proposal from Samsung to
commence negotiations with respect to the acquisition by Samsung Electronics of all of outstanding shares of common stock
of AST not currently owned by Samsung Electronics or its affiliates, at a price of $5.10 per share.
AST's achieved total worldwide shipments of 402,000 units during the fourth quarter Shipments of the company's desktop
systems increased 16 percent to 350,000 in the fourth quarter, compared with the prior year's corresponding quarter.
Desktop shipments increased 45 percent compared with the immediately-preceding third quarter of fiscal year 1996 and
increased 27 percent compared to the second quarter of 1996.
Shipments of the company's notebook systems increased 37 percent to 52,000 notebooks, compared with the prior year's
quarter. This included the sale of approximately 7,600 private-label notebooks to Samsung. Notebook shipments increased
68 percent compared with the immediately-preceding third quarter of fiscal year 1996.
Americas region sales of $314.9 million in the fourth quarter were approximately 21 percent higher than in the prior
calendar year period because of strong retail channel sales and higher demand for notebook systems. Sales of $286.5
million within the company's international regions declined approximately 19 percent compared with the prior calendar
year period due to slower than expected European demand and the impact of the company's continued reorganization
activities in the Asia/Pacific region. Compared with the immediately-preceding third quarter, fourth quarter sales in the
Americas and international regions grew 38 percent and 58 percent, respectively.
Worldwide revenues for fiscal year 1996 declined approximately 10 percent compared to the previous calendar year and
included $35 million received from Samsung related to sales of intellectual properties and agreements involving server
technologies and strategic marketing consulting, of which $10 million was received in the fourth quarter. Sales of $1.141
billion in the Americas and $927.8 million in international regions represented declines of approximately one percent and
22 percent, respectively, over the immediately preceding 12-month period.
The company also announced changes to its board of directors. Effectively immediately, Yong-Ro Song and Ho Moon Kang,
have joined the board, replacing Hyeon-Gon Kim and Hee Dong Yoo who have left to pursue other assignments within the
Samsung Group. Mr. Song, 50, is executive vice president and general manager in charge of Samsung Electronic's strategic
planning office. Mr. Kang, 46, presently serves as senior executive managing director of Samsung Electronic's computer
division.
Balance Sheet Summary
Total net inventory was $139.0 million at Dec. 28, 1996, down from $192.3 million at Sept. 28, 1996 and represented
inventory turns of 16.3. For fiscal year 1996, AST achieved inventory turns of 15.0, compared with inventory turns of 8.8
achieved during calendar year 1995.
At Dec. 28, 1996, accounts receivable totaled $400.1 million, which represented 59 days sales outstanding, down from 76
at Sept. 28, 1996. Total cash and cash equivalents were $61.1 million, with $175.0 million in short-term borrowings,
compared with $30.0 million and $124.0 million, respectively, at Sept. 28.
During the quarter, the company announced a $200 million increase in bank credit guarantees through December 1998 and
an extension of its existing $200 million bank credit guarantee from Samsung Electronics from Dec. 1997 to Dec. 1998.
Forward-Looking Statements
Statements contained in this press release which are not historical information are forward-looking statements as defined
within the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and uncertainties which could cause results to differ materially from
those projected. Such potential risks and uncertainties include, but are not limited to: the level of competitive pricing
pressures in the computer industry; the company's ability to continue to develop, produce and deliver new products that
incorporate leading- edge PC technologies on a timely basis, that are competitively priced and achieve significant market
acceptance; the effect of any continued losses on the company's supplier and customer relationships; and its ability to fund
continuing operations.
Additional factors which could affect the company's financial results are included in the company's report on Form 10-K for
Transition Period 1995, which is filed with the Securities and Exchange Commission.
Corporate Background
AST Research Inc., a member of the Fortune 500 list of America's largest industrial and service companies, is one of the
world's leading personal computer manufacturers. The company develops a broad spectrum of desktop, mobile and server
PC products that are sold in more than 100 countries worldwide. AST systems meet a wide range of customer needs,
ranging from corporate business applications to advanced home and home office use.
Corporate headquarters is located at 16215 Alton Parkway, P.O. Box 57005, Irvine, Calif. 92619-7005. Telephone
714/727-4141 or 800/876-4278. Fax: 714/727-9355. Information about AST and its products can be found on the World
Wide Web at http://www.ast.com
NOTE: AST(r), Advantage!(r), Ascentia and Bravo are trademarks of AST Research Inc. Intel and Pentium are registered
trademarks, and Pentium Pro is a trademark of Intel Corp. Windows is a registered trademark and Windows NT is a
trademark of Microsoft Corp.
AST RESEARCH INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dec. 28,
Dec. 30,
(In thousands) 1996
1995
ASSETS
Current assets:
Cash and cash equivalents $ 61,063
$ 125,387 Accounts receivable, net
400,061 392,598 Inventories
139,007 252,339 Other current
assets 38,762 67,297
Total current assets 638,893
837,621
Property and equipment, net 91,612
98,725 Other assets
100,552 119,696
Total assets $ 831,057
$ 1,056,042
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 679,942
614,075 Long-term debt
131,737 125,540 Other non-current
liabilities 7,238 5,545
Total liabilities 818,917
745,160
Preferred stock 27,780
-- Common stock and additional capital
506,375 415,182 Retained earnings (deficit)
(522,015) (104,300)
Total shareholders' equity 12,140
310,882
Total liabilities and
shareholders' equity $ 831,057 $
1,056,042 -0-
AST RESEARCH INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Year
Ended Dec. 28, Dec. 30,
Dec. 28, Dec. 30,
(In thousands, except
per share amounts) 1996 1995 1996
1995
Net sales $ 601,429 $ 612,926 $
2,068,643 $ 2,348,461 Revenue from
related party 10,000 --
35,000
--
Total revenue 611,429 612,926
2,103,643 2,348,461 Cost of sales
566,755 623,032 2,078,775 2,223,279 Gross profit
(loss) 44,674 (10,106) 24,868 125,182
Selling, general and
administrative expenses 92,733 90,553
336,367
327,377
Engineering and
development expenses 11,670 10,041
40,702
37,441
Restructuring charge -- 12,967
6,527 12,967 Other charges --
-- 26,380 -- Total operating expenses 104,403
113,561 409,976 377,785 Operating loss
(59,729) (123,667) (385,108) (252,603)
Financing and other
expense, net (8,228) (4,957)
(32,607)
(19,829)
Loss before income taxes (67,957) (128,624)
(417,715) (272,432) Income tax provision
(benefit)
-- -- -- (9,248)
Net loss $ (67,957) $(128,624)
$(417,715) $(263,184)
Net loss per share $ (1.18) $ (2.88) $
(8.22) $ (7.01)
Weighted average common
shares outstanding 57,741 44,679
50,827
37,552
-0-
AST RESEARCH, INC.
COMPUTATION OF NET LOSS PER SHARE
(Unaudited)
Three Months Ended Year
Ended
Dec. 28, Dec. 30, Dec. 28,
Dec. 30,
(In thousands, except
per share amounts) 1996 1995
1996 1995
Primary loss per share
Shares used in computing primary loss per share:
Weighted average shares of common stock
outstanding 57,741 44,679
50,827
37,552
Effect of stock options treated as common stock
equivalents under the
treasury stock method
-- -- -- --
Weighted average common and common
equivalent shares
outstanding 57,741 44,679
50,827
37,552
Net loss $ (67,957) $(128,624)
$(417,715) $(263,184)
Loss per share--primary $(1.18) $ (2.88) $
(8.22) $ (7.01)
Fully diluted loss per share
Shares used in computing fully diluted loss per share:
Weighted average shares of common stock
outstanding 57,741 44,679
50,827
37,552
Effect of stock options treated as common stock
equivalents under the
treasury stock method
-- -- -- --
Shares assumed issued on conversion of
Liquid Yield
Option Notes (LYONs)
-- -- -- --
Total fully diluted
shares outstanding 57,741 44,679
50,827
37,552
Net loss - fully diluted earnings per share:
Net loss $ (67,957) $(128,624)
$(417,715)
$(263,184)
Adjustment for interest
on LYONs, net of tax
-- -- -- --
Adjusted net loss--
fully diluted $ (67,957) $(128,624)
$(417,715)
$(263,184)
Loss per share--
fully diluted $ (1.18) $ (2.88) $
(8.22) $
(7.01)
CONTACT: Emory Epperson (media) 714/727-7958 Mariann Ohanesian (analyst) 714/727-7728