Bradlees Reports Its Fourth Quarter and
Fiscal 1996 Year-End Results
BRAINTREE, Mass., March 27, 1997 -
reported results for the fourth quarter of fiscal 1996 and the 52
weeks ended February 1, 1997. Total sales for the fourth quarter
(the 13 weeks ended February 1, 1997) were $463.0 million
compared with $592.4 million for the fourth quarter of fiscal
1995 (the 14 weeks ended February 3, 1996), reflecting, in part,
the closing of 27 stores since last year's fourth quarter. Fourth
quarter comparable store sales declined 5.3%.
The loss before interest, asset impairment charges,
reorganization items and income taxes for the quarter was $1.8
million compared with a loss of $13.6 million for the fourth
quarter of fiscal 1995. The net loss for the quarter was $59.2
million or $5.19 per share compared with a net loss of $108.9
million or $9.54 pershare, after an income tax benefit of $53.8
million, for the same period last year.
Total sales for fiscal 1996 (the 52 weeks ended February 1,
1997) were $1.62 billion compared with $1.84 billion in fiscal
1995 (the 53 weeks ended February 3, 1996). The sales decline
reflects the closing of the 27 stores during the year and a
shotfall in comparable store sales of 5.4%.
The loss before interest, asset impairment charges,
reorganization items and income taxes for the year was $98.0
million compared with $122.3 million for fiscal 1995. The fiscal
1996 net loss was $218.8 million or $19.17 per share versus a net
loss forfiscal 1995 of $207.4 million or $18.17 per share. The
1995 net loss includes an income tax benefit of $104.5 million.
Reorganization items include professional fees, asset
write-offs, costs associated with rejected leases and
restructuring charges primarily associated with management and
employee severance benefits, including those severance benefits
related to the closed stores. Reorganization items resulted in a
fourth quarter charge of $13.2 million and a fiscal 1996 charge
of $69.8 million.
Bradlees recorded a non-cash, fourth quarter charge of $40.8
million in accordance with Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed"
(SFAS 121) compared to $99.4 million for the same period last
year.
The Company also reported that it has received a one year
extension of its $200 million Debtor-In-Possession (DIP)
financing agreement, subject to the approval of the U.S.
Bankruptcy Court. This action extends the DIP agreement until
June 23, 1998 and provides the Company with ample liquidity based
upon its business plan. Financial covenants (minimum operating
earnings, inventory levels and capital expenditures) continue in
effect at levels that provide operating flexibility based upon
the Company's business plan. For the fourth quarter, the Company
was in compliance with its DIP financial covenants.
During the fourth quarter, Bradlees announced additional
restructuring steps to reduce selling, general and administrative
expenses. These steps included the consolidation of the Company's
operating districts and regions, the elimination of approximately
105 non-store positions and the closing of the Company's store in
New Hyde Park, NY. In January, 1997, Bradlees also announced that
it has received a six month extension of its exclusive right to
file a plan of reorganization until August 4, 1997.
Commenting on the results, Peter Thorner, Bradlees recently
appointed Chairman and Chief Executive Officer, said, "While
the past year's financial results were disappointing, we have
implemented cost reduction initiatives and have made
merchandising and marketing changes designed to improve margins
and advertising productivity. As we progress during 1997, we will
continue to work towards achieving further operating cost
efficiencies. We believe that the steps we are implementing will
significantly improve our results in 1997 and we are encouraged
by the continued support of our suppliers and DIP lenders."
Bradlees, Inc. operates 109 discount department stores in
Maine, New Hampshire, Massachusetts, Connecticut, New York, New
Jersey and Pennsylvania. Bradlees' common stock is listed and
traded on the New York Stock Exchange under the symbol
"BLE". For additional Bradlees press releases, please
call 800-758-5804, ext. 105750.
BRADLEES,
INC.
(Operating as
Debtor-In-Possession)
CONSOLIDATED STATEMENTS
OF OPERATIONS
(Dollars in thousands except
per share amounts)
13 Weeks
14 Weeks
52 Weeks
53 Weeks
Ended
Ended
Ended
Ended
Feb. 1
Feb. 3,
Feb. 1,
Feb.
3,
1997
1996
1997
1996
Total sales
$463,039 $592,394 $1,619,444
$1,840,926
Leased department sales
13,058 16,791 57,726
60,158
Net sales
449,981 575,603 1,561,718
1,780,768
Cost of goods sold
332,885 423,558 1,127,651
1,289,077
Gross margin
117,096 152,015 434,067
491,691
Leased department and
other operating income
2,942 3,545 12,850
14,075
Total
120,038 155,560 446,917
505,766
Selling, store operating,
administrative and
distribution expenses
113,211 155,524 505,926
575,220
Depreciation and amortization
expense
8,679 13,641 40,750
52,853
Gain on disposition of properties
(50) --- (1,739)
---
Loss before interest, asset
impairment charges, reorganization
items and income taxes
(1,802) (13,605) (98,020)
(122,307)
Interest and debt expense
3,328 5,701 10,165
25,278
Impairment of long-lived assets
40,782 99,358 40,782
99,358
Reorganization items
13,243 43,968 69,792
65,003
Loss before income taxes
(59,155) (162,632) (218,759)
(311,946)
Income tax benefit
--- 53,766
--- 104,533
Net Loss
($59,155) ($108,866) ($218,759)
($207,413)
Net loss per share:
($5.19) ($9.54) ($19.17)
($18.17)
BRADLEES,
INC.
(Operating as
Debtor-In-Possession)
CONDENSED CONSOLIDATED
BALANCE SHEETS
(Dollars in
thousands)
ASSETS
2/1/97 2/3/96
Current assets:
Unrestricted cash and cash equivalents
$10,025 $63,012 Restricted cash
and cash equivalents 9,126
1,194
Total cash and cash equivalents
19,151 64,206
Accounts receivable
8,240 10,536 Refundable income
taxes ---
24,576 Inventories
236,920 282,270 Prepaid
expenses
8,466 10,008 Assets held for sale
8,419 8,954
Total Current assets
281,196 400,550
Property excluding capital leases, net
139,246 170,247 Property under
capital leases, net 24,395
37,249 Total property, plant and
equipment, net 163,641 207,496
Lease interests at fair value and lease
acquisition costs, net
150,229 186,626
Assets held for sale
5,250 --- Other, net
3,884
3,990 Total other assets
159,363 190,616
Total Assets
$604,200 $798,662
BRADLEES, INC
(Operating as
Debtor-In-Possession)
CONDENSED CONSOLIDATED
BALANCE SHEETS
(Dollars in
thousands)
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIENCY)
2/1/97 2/3/96
Current liabilities:
Accounts payable
$115,315 $148,870 Accrued expenses
45,924
41,457 Short-term debt
42,500 ---
Self-insurance reserves
7,086 7,426 Current portion of
capital lease obligations 1,722
2,602
Total current liabilities
212,547 200,355
Long-term liabilities
Obligations under capital leases
33,296 53,396 Deferred income
taxes 8,581
8,581 Self-insurance reserves
14,386 14,852 Other
long-term liabilities
27,642 26,723
Total long term liabilities
83,905 103,552
Liabilities subject to settlement under
the reorganization case
571,041 539,765
Stockholders' equity (deficiency):
Common stock 11,391,433 shares
outstanding (11,416,656 shares
outstanding at 2/3/96) Par value
115
115 Additional paid-in capital
137,951 137,951 Unearned
compensation
(167) (793) Accumulated deficit
(400,525) (181,766)
Treasury stock, at cost
(667) (517)
Total stockholders' equity (deficiency)
(263,293) (45,010)
Total Liabilities and Stockholders'
Equity (Deficiency)
$604,200 $798,662
SOURCE Bradlees, Inc./CONTACT: Media: Coleman Nee,
617-742-7077 or Bill Roberts, 617-380-8354 or Financial: Gary
Jones, 617-380-8234 or Rick Welker, 617-380-7084, all for
Bradlees/
Enstar announces stock distribution
Business Editors
MONTGOMERY, Ala.--March 27, 1997--The Enstar Group Inc.
("ESGR: OTC") announced that it is distributing today
its new common stock to its former shareholders of record as of
June 1, 1992.
Enstar's old common stock was cancelled in 1992 pursuant to
Enstar's bankruptcy plan of reorgnization. Due to the
unprecedented success of Enstar's operations under its bankruptcy
plan, Enstar has paid off all creditors from its bankruptcy case,
and in accordance wiht the terms of its bankruptcy plan, Enstar
is now issuing new common stock to qualifying former
shareholders. Shareholders will receive one new share for every
ten shares of old, cancelled stock and/or cash for fractional
shares. Shareholders will also be receiving an "Information
Statement and Annual Report" and a "Proxy
Statement" for Enstar's annual meeting with shareholders to
be held on April 28, 1997. Persons who were shareholders on June
1, 1992, or who hold the rights of such shareholders, who do not
receive the new stock, either directly or through their broker,
and who believe they are entitled to receive a distribution,
should contact The Enstar Group Inc. c/o Gilardi & Co., P.O.
Box 8040, San Rafael, California 94912-8040, 1-800-372-2231.
Enstar's chairman and CEO Nimrod T. Frazer said: "This is
indeed a great day. Enstar's recovery has been phenomenal. It has
exceeded all of our hopes and expectations. We are pleased to be
returning value and ownership to Enstar's former shareholders who
had lost their entire investment with Enstar's financial collapse
in 1990 and 1991."
CONTACT: The Enstar Group Inc., Montgomery Amy Dunaway,
334/834-5483
Hamburger Hamlet Restaurants, Inc.
Enters Into Agreement to Sell Restaurants
SHERMAN OAKS, Calif., March 27, 1997 -
(HHR) announced that it has entered into an agreement to sell 14
of its restaurants and to assign certain leases and executory
contracts related thereto to Koo Koo Roo, Inc. and has set April
18, 1997 as the date of the hearing in the Bankruptcy Court on
the motion to approve the sale. The purchase price for the assets
to be sold to Koo Koo Roo is in excess of $11.45 million.
The completion of the sale is subject to the satisfaction of
certain conditions. In addition, the sale is subject to certain
overbid procedures pursuant to which a qualified purchaser may
purchase the assets if it meets the requirements of the overbid
procedures approved by the bankruptcy court. Among other things,
a qualifying overbidder must provide a purchase price at least
$600,000 greater than the Koo Koo Roo purchase price which
includes cash of at least $9.7 million, additional consideration
of $1.75 million and provides for the assumption of liabilities
comparable to those to be assumed by Koo Koo Roo. In addition, an
overbidder must make a $1 million cash deposit within 5 days
prior to the Bankruptcy Court hearing on the sale order (which
will become nonrefundable if the court approves the overbidder as
the successful bidder and from which Koo Koo Roo will be paid a
break-up fee of at least $350,000).
Richard E. Matthews, HHR's Chief Executive Officer said,
"If the sale to Koo Koo Roo (or a qualified overbidder) is
completed, HHR will propose and attempt to confirm a plan of
reorganization distributing the proceeds of the sale among HHR's
various claimants and concluding HHR's Chapter 11 cases. Because
the claims against HHR exceed the $11.45 million portion of the
purchase price offered by Koo Koo Roo, it is not expected that
such a plan would provide for any cash or property for the
stockholders of HHR unless the assets are purchased by an
overbidder who pays substantially in excess of the price offered
by Koo Koo Roo.
SOURCE Hamburger Hamlet, Inc. /CONTACT: Richard E. Matthews of
Hamburger Hamlet, 818-995-7333/
ACCELERATING CHANGE: SERVICE MERCHANDISE
ANNOUNCES FURTHER STEPS TO RESHAPE COMPANY AND BUSINESS
NASHVILLE, Tenn.--March 27, 1997-- Store Performance Analysis
Prompts Closure of 60 Stores and Nevada Distribution Center
Re-focusing Attention to Seize Competitive Advantage; Testing
Changes to Shopping Format
Service Merchandise Company, Inc. (NYSE:SME) further
accelerated its pace of change by announcing the latest in a
series of steps to reshape the $4 billion retailer and reenergize
its revenue and earnings generating performance.
"This Company will be revitalized by focusing all efforts
on one measurable objective: To create shareholder value by
generating returns on invested capital that exceed the Company's
cost of capital," said Gary Witkin, the Company's President
and COO. "To live by this fundamental principle, we have to
part with operations that underperform.
"The Company will close 60 underperforming stores and its
Las Vegas, Nevada distribution center. The move is based on a
rigorous analysis of individual store performance based on cash
flow return on committed capital, fit within marketing
demographic profiles and strategic geographic positioning.
"The disposition of real estate and inventory is
anticipated to free up approximately $75 million that can be
redirected in order to produce appropriate returns on invested
capital. Also, the Company will refocus its attention and efforts
on markets where it is or could be a more powerful competitive
force.
"We are proceeding with our strategic assessment of every
aspect of our business, analyzing our merchandising strategies,
product offerings and our shopping format.
Witkin added, "This management team is totally focused on
a revitalized future of Service Merchandise. We have a proud
heritage, but we cannot and will not accept our recent
performance. My vision is a powerful future for this
Company."
SIGNIFICANT STEPS MOVE THE COMPANY FORWARD...
-- Proprietary Credit Card. In January the Company announced
its new credit card program that is targeted to contribute
$12-$15 million in pre-tax earnings to the Company's results
beginning in 1998, based on the transition of the current $400
million receivables program to Alliance Data Systems. The
estimate of the program's contribution is based on current
portfolio size and performance characteristics.
-- Store Management Restructuring. During the first quarter,
after determining that store payroll was too heavily weighted
toward management, the Company flattened its store management
structure by eliminating 1,200-1,500 positions at the assistant
manager and "lead floor" levels. The restructuring was
designed to provide payroll savings and to gain flexibility in
hiring more store floor and checkout personnel during peak
shopping periods. After allowing for increased seasonal hiring,
the Company anticipates the restructuring will contribute $10-$12
million in pre-tax payroll savings.
-- Major New Direction in Store Presentation. To increase the
appeal and ease of the stores' shopping environment, the Company
initiated a major effort to change the presentation of Service
Merchandise stores. Physical enhancements and complete changes in
the visual presentation -- including thematic lifestyle displays
-- have given an entirely new appearance to stores.
-- Critical Revision of Marketing Mix. The Company is
aggressively redirecting its marketing dollars with the objective
of increasing the volume of new customers. This redirection
concentrates on expanded and targeted print advertising.
FINANCIAL IMPACT OF CLOSING 60 STORES, NEVADA DISTRIBUTION
CENTER
The major benefit of the store closings will be the freeing up
of capital associated with these operations, rather than a short-
term opportunity to improve earnings. The Company reports that
sales revenue currently generated by the 60 stores to be closed
is approximately $400 million annually.
The Company anticipates that some transfer sales may be
attracted by other Service Merchandise stores operating in the
same geographic markets as some of the closed stores. After the
effect of charges and costs related specifically to the closings,
the immediate ongoing impact of the closings on net income after
tax will be immaterial, because the stores to be closed are near
break- even contributors. It is also anticipated that the
closings will improve long-term profitability through the more
effective use of capital.
The total financial impact related to the announced store
closures and other strategic initiatives should not exceed $175
million pre-tax, or $109 million after-tax. The amounts will be
reflected in the Company's financial statements partially as a
$130 million pre-tax first quarter 1997 charge and partially as a
reduction in ordinary operating results over the next several
quarters and possibly into next year. Current accounting rules
preclude the Company from recording the entire financial impact
associated with the store closures and other strategic
initiatives as a single restructuring charge in the first
quarter.
The nature of the restructuring costs the Company expects to
incur with respect to the store and distribution center closure
program include lease termination, severance and other exit
costs, as well as write-downs of property, fixtures and equipment
to be disposed of. These costs comprise the $130 million pre-tax
first quarter restructuring charge. In addition to the
restructuring charge, reduced margins will be reflected in the
Company's operating results as affected inventory is liquidated.
BANK FACILITY AMENDED
The Company and its banks, led by Chase Bank, completed an
amendment to its $525 million revolving credit facility on
Tuesday, March 25, 1997. Sam Cusano, Senior Vice President and
CFO said, "The amendment provides the Company the
flexibility to effect the store closings and other strategic
initiatives. Importantly, the amendment excludes from financial
covenant calculations the impact of up to $175 million in pre-tax
charges and costs related to restructuring initiatives. The
amendment also provides increased operating flexibility with
respect to certain financial covenants as the Company launches
these efforts to change the trajectory of its performance."
"Our revolving credit banks are long-term financial
partners who provide us with working capital financing we need to
operate our business. While the Company has remained profitable
and has generated strong positive cash flows, our performance
trends have been moving in the wrong direction. The changes we
have made in the facility reflect a fair exchange of terms for
the Company and the banks. This will remain very much a working
capital facility whose usage expands and contracts with our
seasonal business requirements. The facility's $525 million
availability in 1997 provides the Company with strong
liquidity," concluded Cusano.
Pricing on the facility moved from Libor plus 1.0 percent to
Libor plus 1.75 percent. The Company has also agreed to re-
collateralize the bank group with the same non-inventory
collateral package that the bank group released when the 1994
facility was negotiated. Certain other changes limit the
Company's level of capital spending, dividend payments and
incurrence of other senior indebtedness.
IMPACTS
Human Resources
It is anticipated that approximately 1,100 full-time and 2,200
part-time jobs will be eliminated due to the store closures and
the closure of the Nevada distribution center. Severance costs
included in the anticipated charges related to the closures are
estimated to be $3 million.
Location of Closures; Impact on Logistics
The underperforming stores identified for closure are located
across the chain, although the majority are located in the West,
prompting the related closure of the Nevada distribution center.
Stores remaining open in the West will be served from another
distribution center.
Timeframe for Store Closure; Inventory Liquidation
The Company anticipates that most of the closures and the
disposition of the inventory will be completed by the end of the
second quarter.
"We have set for ourselves the vision that we will once
again be a leading jewelry, gift and home products retailer. We
have identified near-term and longer-term steps to move us in
this direction. And now we are accelerating our pace of change,
injecting the energy and enthusiasm we will need to create our
future," concluded Gary Witkin.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This release includes certain forward-looking information that
is based upon management's beliefs as well as on assumptions made
by and data currently available to management. This information,
which has been, or in the future may be, included in reliance on
the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, is subject to a number of risks
and uncertainties, including but not limited to the factors
identified in the Company's Form 10-K filed with the Securities
and Exchange Commission. Actual results may differ materially
from those anticipated in such forward- looking statements even
if experience or future changes make it clear that any projected
results expressed or implied therein may not be realized. -0-
Note to editors: For more information and access to current or
prior earnings releases, see our home page on the Internet at
http://www.servicemerchandise.com,or for fax copies of
the most current or prior press releases you may call
1-800-759-2793.
CONTACT: Service Merchandise Sam Cusano, 615/660-3200 (Senior
Vice President & CFO) Tom Garrett, 615/660-3477
Spectrum Information Technologies
Announces Reverse Stock Split as it Exits Bankruptcy
PURCHASE, N.Y., March 27, 1997 -
Inc. announced that it expects its chapter 11 plan of
reorganization will become effective on Monday, March 31, 1997.
As part of the plan of reorganization, at the close of trading on
March 31, 1997, Spectrum's issued and outstanding stock will
undergo a reverse split at a ratio of 75 to 1. On April 1, 1997,
reorganized Spectrum common stock will trade under its new symbol
SITI (Spectrum Information Technologies, Inc.). Spectrum expects
that its reorganized common stock will continue to be traded on
the OTC Bulletin Board.
Spectrum currently has 76,675,448 shares of common stock
issued and outstanding. Following the close of trading on March
31, 1997, issued and outstanding shares of common stock will be
canceled and replaced with one (1) new share of reorganized
common stock for each seventy-five (75) shares of existing common
stock, resulting in approximately 1 million shares of common
stock issued to existing shareholders. Fractional shares will be
rounded up or down to the nearest whole number of shares. An
equal number of approximately 1 million new shares of Class A
Preferred Stock will be delivered to a trustee to be distributed
to plaintiffs as part of a settlement to a class action lawsuit
that was originally commenced against the Company in 1993. The
new Class A Preferred Stock will be convertible to reorganized
common stock at the option of the holder for a period of two
years, at which time it will automatically convert to common
stock. Additionally, approximately 227,000 new shares of
reorganized common stock will be issued pursuant to incentive
stock plans for Spectrum management and employees and will be
distributed in three semi-annual installments beginning in August
1997.
This press release contains statements that are "forward-
looking," including those concerning the effective date of
Spectrum's plan of reorganization and trading on the OTC Bulletin
Board. Spectrum's quarterly and annual reports as filed with the
Securities and Exchange Commission discuss the effects of
delaying the effective date and other risk factors.
SOURCE Spectrum Information Technologies, Inc./CONTACT:
Investor Relations of Spectrum Information Technologies, Inc.,
914-251-1800, ext. 182; or Media, Michael Freitag of Kekst and
Company, 212-593-2655/
Golden Books Family Entertainment Reports
Fourth Quarter and Annual 1996 Results
NEW YORK, NY--March 27, 1997--Restructuring Charges Completed
in Fourth Quarter--Expects 20% Revenue Growth in Core Publishing
Business- -Plans Transition Costs of $20 Million in 1997--Expects
Positive EBITDA Before Transition Costs in 1997-
Golden Books Family Entertainment, Inc. (Nasdaq: GBFE) today
reported results for the fourth quarter and the eleven-month
period ended Dec. 28, 1996. Both fourth quarter and year-end
results in 1996 are based on periods one month shorter than
comparable periods in the prior year, reflecting the company's
previously announced decision to change its fiscal year-end to
the last Saturday of December in each year rather than the
Saturday nearest January 31.
For eleven months ended Dec. 28, 1996 (fiscal 1996), the
company reported a net loss of $197.5 million, or $8.73 per
share, on revenues of $255.0million, compared with a net loss of
$67.0 million or $3.23 per share on revenues of $371.3 the twelve
months ended Feb. 3, 1996 (fiscal 1995). The 1996 results include
restructuring and other one time charges of $132.3 million, or
$5.67 per share, of which $36.0 million were recorded in the
fourth quarter including charges associated with asset
writedowns, severance costs and the buyout of leases.
"When we assumed control of this company in May, our
priorities were clear," commented Richard E. Snyder,
Chairman and Chief Executive Officer of the company. "We
knew we had to fix the core business, begin the transformation
from a children's book publisher to a family entertainment
company and build the management and financial foundation to
support our future growth. Since then, we have delivered on all
our promises and are ahead of schedule on a number of fronts. We
recruited a new team of superb senior managers, completely
revamped our publishing operations and extended the scope of our
business through a key acquisition. We have strengthened our
financial position, restructured our operations, lowered
operating costs and divested non-core businesses. We also began
developing a range of exciting new products that will reach the
market in 1997 and 1998.
"The financial results for 1996 are in line with our
initial expectations and reflect our progress as we work toward a
successful turn-around. We have now laid the groundwork for
generating superior returns over the long-term. As we have said,
1997 will be a transitional year for us. We must focus on product
development, marketing opportunities and operating this Company
at the highest levels and with full accountability. Our core
business has just begun to realize its considerable growth
potential from new products, expanded distribution and the
successful integration of Broadway Video Entertainment. At the
same time, we are taking steps to maximize returns on investment
and institute management systems to track our growth and improve
predictability."
As part of the company's effort to streamline its printing
operations to focus on its core publishing and entertainment
business, the company also today announced its decision to sell
its Cambridge division, which engaged primarily in third-party
commercial printing. In this regard, the company has recorded
Cambridge as an asset held for sale, resulting in a structuring
charge relating to the writedown of Cambridge assets to its
estimated realizable value.
"We have completed the anticipated restructuring and one
time charges in order to operate the business for optimum
efficiency," said Philip Rowley, Chief Financial Officer of
the company. "We anticipate that our efforts will begin to
pay off in 1997, primarily in the second half of the year, as our
publishing list is revitalized and our sales force reorganization
is completed." Rowley said the company expects an increase
in revenues of at least 20% in the core publishing business in
fiscal 1997, as well as positive EBITDA, before one time
transition costs of approximately $20 million in 1997.
Operating Results Revenue for the Consumer Product Segment,
which includes Children's Publishing, Adult Publishing, the
Golden Books Entertainment Group and the former wholly-owned
subsidiary Penn Corporation, for the two months ended Dec. 28,
1996 decreased $45.6 million to $21.9 million, a 67.6% decrease
from the three months ended Feb. 3, 1996. Revenue for the
Consumer Products Segment for fiscal 1996 decreased $103.2
million to $205.1 million, a 33.5% decrease from fiscal 1995. The
decreases resulted from previously announced actions, including
the discontinuation of the category management program, at
Wal-Mart; volume reductions due to price increases; continuing
decline in sales of the company's electronic storybooks due to
competitive factors; limited new product introductions; decline
in international sales related to the consumer appeal of certain
licensed characters and continuing sales declines at Penn
Corporation. The Golden Books Entertainment Group, which was
formed on Aug. 20, 1996 in connection with the acquisition of
certain Broadway Video Entertainment assets, contributed revenues
of $4.1 million.
The Commercial Products Segment revenues for the two months
ended Dec. 28, 1996 decreased $11.7 million to $8.7 million, a
57.4% decrease from three months ended Feb. 3, 1996. The
Commercial Products Segment revenues for fiscal 1996 decreased
$13.1 million to $44.9 million, a 20.8% decrease from fiscal
1995. The decrease for the quarter and the eleven months was due
to high levels of January revenues not included in fiscal 1996
along with the timing of several contracts.
Selling, general and administrative expenses for the two
months ended Dec, 28, 1996, before consideration of $10.9 million
of one time charges, decreased $12.2 million to $21.6 million, a
36.1% decrease from the three months ended Feb. 3, 1996. Selling,
general and administrative expenses for fiscal 1996, before
consideration of $38.1 million of one-time charges, decreased
$24.4 million to $104.6 million, an 18.9% decrease from fiscal
1995. The decrease was primarily the result of workforce
reduction programs, lower sales expenses due to lower sales
volume and the shorter reporting period.
Golden Books Family Entertainment Inc. is the leading
publisher of children's books in North America and owns one of
the largest libraries of family entertainment copyrights. The
company creates, publishes and markets entertainment products for
children and families through all media.
This press release includes statements which may constitute
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. Although the company believes the expectations contained in
such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. This
information may involve risks and uncertainties that could cause
actual results to differ materially from the forward-looking
statements. Factors which could cause or contribute to such
differences include but are not limited to, factors detailed in
the company's Securities and Exchange Commission filings.
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
December
28,
February
3,
1996
1996
CURRENT LIABILITIES:
Accounts payable $
21,638 $19,000 Accrued
compensation and fringe
benefits
5,787 8,073
Other current liabilities
45,238 30,641 Total current
liabilities 72,663
57,714
NONCURRENT LIABILITIES:
Long-term debt
149,862 149,845 Accumulated
postretirement benefit
obligation
28,787 27,572
Deferred compensation and other
deferred liabilities
25,072 2,481
Total noncurrent liabilities 203,721
179,898
GUARANTEED PREFERRED BENEFICIAL
INTERESTS IN THE COMPANY'S AND
GOLDEN BOOKS PUBLISHING
COMPANY, INC's CONVERTIBLE
DEBENTURES
110,488 -
CONVERTIBLE PREFERRED STOCK - Series A,
20,000 shares authorized, no par value,
19,970 shares issued and outstanding; at
mandatory redemption amount as of Feb.
3, 1996 -
9,985
STOCKHOLDERS' EQUITY (DEFICIT):
Convertible Preferred Stock - Series B,
13,000 shares authorized, no par value,
13,000 shares issued and outstanding;
65,000
--
Common Stock, $.01 par value,
60,000,000 shares authorized,
25,964,711 and 21,875,539 shares
issued as of Dec. 28, 1996 and
259 219 Feb. 3, 1996
respectively
Additional paid in capital
120,376 87,044 Note receivable
from sale of
Common Stock
-- (4,796)
Accumulated deficit
(201,111) (3,608) Cumulative
translation adjustments (1,339)
(1,669)
(16,815
)
77,190
Less cost of Common Stock in
treasury -- 208,800 shares
2,822 2,822
Total common stockholders'
equity (deficit)
(19,637) 74,368
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT)
$367,23
5
$321,96
5
-0-
*T
GOLDEN BOOKS FAMILY ENTERTAINMENT INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (In
thousands except per share data)
Eleven
Year
Months Ended
Ended December 28,
February 3,
1996
1996
REVENUES:
Net sales $ 254,046 $
369,572 Royalties and other income
959 1,722
Total revenues 255,005
371,294
COSTS AND EXPENSES:
Cost of sales 231,792
281,392 Selling, general and
administrative 142,721
129,020
Restructuring charges 65,741
8,701 Gain on streamlining plan
- (2,000)
Provision for write-down of Division
- -
Total costs and
expenses 440,254
417,113
(LOSS) INCOME BEFORE INTEREST INCOME,
DISTRIBUTIONS ON GUARANTEED
PREFERRED BENEFICIAL
INTERESTS IN THE COMPANY'S
AND GOLDEN BOOKS PUBLISHING
COMPANY, INC's CONVERTIBLE
DEBENTURES, INTEREST,
AND PROVISION FOR INCOME
TAXES
(185,249)
(45,819)
INTEREST INCOME 4,235
2,963
DISTRIBUTIONS ON GUARANTEED
PREFERRED BENEFICIAL
INTERESTS IN THE COMPANY's
AND GOLDEN BOOKS PUBLISHING
COMPANY, INC's CONVERTIBLE
DEBENTURES
3,597
-
INTEREST EXPENSE 10,999
12,859
LOSS BEFORE PROVISION FOR
INCOME TAXES (195,610)
(55,715)
PROVISION FOR INCOME TAXES 1,893
11,332
NET LOSS $ (197,503)
$ (67,047)
NET LOSS PER COMMON SHARE $ (8.73)
$ (3.23)
-0-
GOLDEN BOOKS FAMILY ENTERTAINMENT INC.
AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (In Thousands)
DECEMBER
28,
FEBRUARY 3,
1996
1996
ASSET
S
CURRENT ASSETS:
Cash and cash equivalents
$139,686 $ 45,223 Accounts
receivable 41,415
61,033 Inventories
27,608 84,354 Royalty
advances 5,239
3,240 Refundable income taxes
1,781 2,492 Net assets
held for sale 19,779
13,302 Other current assets
5,365 13,379
Total current assets 240,873
223,023
OTHER ASSETS
Accounts receivable - long term
1,001 - Other noncurrent
assets 8,102
14,429
Total other assets
9,103 14,429
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation and amortization
of $40,672 as of Dec. 28, 1996 and
$58,566 as of Feb. 3, 1996
27,504 75,450
FILM LIBRARY, net of accumulated
amortization of $1,082 as of Dec. 28,
1996 60,668
-
GOODWILL, net of accumulated amortization
of $405 as of Dec. 28, 1996 and $21,205
as of Feb. 3, 1996
29,087 9,063
Total Assets
$367,235 $321,965
CONTACT: Philip Rowley Chief Financial Officer 212/583-6728
Consolidated Nevada Goldfields
Corporation announces completion of shareholder credit
arrangement
DENVER, CO--March 27, 1997--Consolidated Nevada Goldfields
Corporation today announced the completion of a $4 million line
of credit with two of its major shareholder groups; Grupo Acerero
Del Norte S.A. de C.V. of Mexico City, Mexico and Caithness
Resources of New York City, New York.
Under the terms of the agreement, the two shareholder groups
will provide $3,415,000 and $585,000, respectively, on one year
promissory notes.
The line of credit is part of the Company's continuing debt
restructuring and consolidation program. The funds from the notes
will be used by the Company for general corporate purposes and to
sustain and accelerate the pace of capital investment in the
Company's Mexican operations. The Company is in ongoing
discussions with several major commercial banks to optimize and
restructure a number of bank debt instruments held in Mexico and
one in the United States which total approximately $27.5 million.
Consistent with the Company's objectives expressed when it
acquired its Mexican properties in 1996, the Company proposes to
improve the terms of these debt instruments through consolidation
while obtaining a uniform term and lower effective interest rate.
The Company is current on all of its financial obligations.
Results from operations for the Company continue to be mixed.
-- The Nixon Fork mine in Alaska, suffering from equipment
availability and staffing problems performed worse than budget in
terms of output and costs during the last calendar quarter of
1996. Despite these factors, development exploration at the mine
site has replaced reserves faster than their rate of depletion.
During the first two months of calendar 1997, the mine has
performed at budget production levels.
-- The Company's Aurora mine has continued to perform
according to budget during 1996 and year-to-date in 1997.
In Mexico, results from the Company's four newly acquired
mines have also been mixed. Since completion of the acquisition
in October of 1996, the Company has been engaged in a systematic
program of management strengthening, capital investment,
operational rehabilitation and debt restructuring. The pace of
these improvements has been slower than anticipated with a
consequent impact on operating margins.
-- Slower than expected improvements during the last calendar
quarter of 1996 resulted in below budget operations at the
Company's Pachuca silver mine near Mexico City. During the first
two months of calendar 1997, however, operations at Pachuca have
met expectations with the mill periodically running at a higher
than anticipated 1,300 metric tonnes per day.
-- Operations at the Baztan copper mine have been complicated
by reduced concentrate offtake by the smelter at San Luis Potosi.
Management is exploring alternatives to increase concentrate
sales.
-- The Company's Barita de Sonora barite mine near Hermosillo,
experiencing low equipment availability and high overheads has
been performing below budget. New maintenance programs,
administrative staff restructuring and improved operating
procedures are anticipated to increase output from Barita de
Sonora; the operation has sales contracts in place with PEMEX and
Baroid International.
-- The Company's Magistral del Oro gold tailings reprocessing
operation in north central Mexico is in the second phase of a two
phase metallurgical testing program that will determine the long
term viability of this operation. The operation has experienced
difficulties with excessive copper absorption and slower than
anticipated gold leaching kinetics resulting in below budget
performance. Lower heap heights, higher leaching rates and
different chemical concentrations are being tested as a potential
remedy for the problem. Results from the test are expected to be
available by June.
The Company has previously announced that it has changed its
fiscal year-end from June 30th to December 31st. The Company
anticipates audited financial statements for the six months ended
December 31, 1996 will be complete on or about the third week of
April. The Company anticipates that for the operational reasons
sighted above, it will show a greater than expected loss for the
six month period.
Capital investment continues at the Pachuca mine with the
addition of rubber tired equipment in some areas of the mine and
further development of new shrinkage stopes and underground
haulage ways. As a consequence, the Pachuca mine is projected to
continue to increase in production capacity through the balance
of the year and beyond. The Company anticipates that it may need
to raise additional capital, beyond that arranged through the
recent shareholder line of credit, in order to increase the pace
of capital investment at the Pachuca mine. The current debt
restructuring program will be instrumental in making this
possible.
Consolidated Nevada Goldfields Corporation is a Denver based
multi-national mining company with six producing mines and over
1,500 employees. The Company counts among its resources 560,000
ounces of gold, 51 million ounces of silver, 38 million pounds of
copper and 4 million tons of barite. The Company currently trades
on the Toronto exchange under the symbol KNV, on NASDAQ under the
symbol KNVCF and on the Stuttgart, Frankfurt and Berlin
exchanges, under the symbol CNV.
CONTACT: Consolidated Nevada Goldfields Corporation Geoffrey
Hoyl, 303/296-3200
DCR Reaffirms Service Merchandise
Company, Inc. and Maintains a Negative Outlook
NEW YORK, NY -March 27, 1997- Duff & Phelps Credit Rating
Co. (DCR) has reaffirmed Service Merchandise Company, Inc.'s
(SME) $100 million of senior unsecured notes at 'BB-'
(Double-B-Minus) and $300 million of senior subordinated
debentures at 'B' (Single-B). DCR lowered SME's senior debt
rating from 'BB' (Double-B) to 'BB-' (Double-B-Minus) and its
senior subordinated debt rating from 'BB-' (Double-B-Minus) to
'B' (Single-B) on February 19, 1997.
The rating action reflects SME's plan to close 60 stores and
its Las Vegas, Nev., distribution center and take a $130 million
pre-tax restructuring charge in the first quarter of 1997. The
total financial impact from the closings and other strategic
initiatives is not expected to exceed $175 million on a pre-tax
basis or $109 million after-tax.
The stores to be closed accounted for approximately $400
million of sales in 1996, or an average of $6.7 million per store
versus a companywide average of about $10 million per store.
These stores were also minimally profitable and essentially cash
flow neutral. The ultimate outcome of this action is expected to
be cash positive. Reduced inventory borrowing, the liquidation of
inventory at the closed stores and the sale of owned property are
anticipated to more than offset cash requirements needed to meet
lease termination, severance and other exit costs.
During the first quarter of 1997, SME eliminated roughly 1,500
positions at the assistant store manager and 'lead floor' levels.
The company estimates that it will save $10-12 million in pre-tax
payroll. The company will continue to concentrate on merchandise
themes, presenting products in lifestyle-oriented offerings.
Management also will stress additional marketing, merchandising
and store-level changes designed to improve store management and
the customer's experience. Nevertheless, SME will be challenged
to improve its performance and win over new customers. The
outlook is for a continuing difficult retailing environment,
particularly in consumer electronics.
SME has amended its $525 million revolving bank facility,
resulting in an increase in pricing of 75 basis points, the
collateralization of the facility with non-inventory-related
assets, changes in covenants and certain restrictions on capital
spending, dividend payments and incurrence of other senior
indebtedness. Reflecting these changes, DCR expects that banking
and vendor relationships will continue to be maintained in a
positive fashion.
SOURCE Duff & Phelps Credit Rating Co. /CONTACT: Thomas P.
Razukas, CFA, 212-908-0223, razukasdcrco.com, or Jenifer
Casalvieri, 212-908-0239, casalvieridcrco.com, both of Duff &
Phelps Rating Co./
AutoLend Group Announces Extension Of
Expiration Date Of Debenture Exchange Offer To April 8, 1997
ALBUQUERQUE, N.M., March 27, 1997 -
Bulletin Board: AUTL) (the "Company") announced today
that it has further extended the Expiration Date of its Exchange
Offer for its 9.5% Convertible Subordinated Debentures Due 1997
to 5:00 p.m., New York City time, on April 8, 1997. The Exchange
Offer was previously set to expire on March 28.
As previously announced, on March 25 the United States
Bankruptcy Court for the District of New Mexico entered an order
dismissing the petitioning creditors' bankruptcy petition,
effective April 7, 1997. The Company currently intends to accept
all Debentures validly tendered prior to the extended Expiration
Date, promptly following the effective date of the dismissal of
the bankruptcy petition.
Copies of the Offering Circular and related materials,
including the Letter of Transmittal, may be obtained from the
Company as well as from CEDEL Bank, S.A., and EUROCLEAR. The
Company expressly reserves the right to further extend the period
of the Exchange Offer, to terminate the Exchange Offer, or to
otherwise amend the Exchange Offer in any respect, subject to the
terms set forth in the Offering Circular dated October 22, 1996,
as supplemented.
SOURCE AutoLend Group, Inc. /CONTACT: Nunzio DeSantis,
Chairman, AutoLend Group, 505-768-1000/