House Of Fabrics Continues Profitability
For Fourth Quarter, Reports Significant Reduction In Loss For
Year
SHERMAN OAKS, Calif., April 10, 1997 -
HFAB) today reported its second consecutive quarter of
profitability, following the company's emergence from Chapter 11
in August 1996, and a significant reduction in its net loss for
the full year ended January 31, 1997.
For the fourth quarter, the company reported pre-tax income of
$709,000 and net income of $405,000, or $0.08 per share. This
compares with a net loss of $45.8 million in the prior year
period. Sales for the quarter were $73.4 million, compared with
$95.5 million for the corresponding period last year, reflecting
93 fewer stores in operation and a 3.9 percent decline in same-
store sales.
For the six months of operations after the company emerged
from Chapter 11, the company reported pre-tax income of $1.6
million and net income of $0.9 million, or $0.18 per share, on
sales of $143.3 million, compared with a loss of $51.3 million on
sales of $187.8 million for the same six-month period last year.
For the 12 months ended January 31, 1997, which included six
months of post-bankruptcy operations ("successor
company") and six months of bankruptcy operations
("predecessor company"), the company reported a
reduction in its net loss to $10.1 million from $70.4 million
last year. Sales for the 12 months totaled $254.7 million versus
$333.5 million for the 1996 fiscal year. In addition to fewer
stores in operation, the year's sales also reflected a 2.6
percent decline in same-store sales.
"We are realizing the benefits of initiatives that have
been executed as part of the company's reorganization plan,"
said newly appointed President and Chief Executive Officer Donald
L. Richey. "These initiatives include the closing of a
number of unprofitable and underperforming stores and reducing
selling, general and administrative expenses."
Richey noted that the sale of its Sherman Oaks, California
headquarters office building and previously closed distribution
center in Mauldin, South Carolina, combined with the reduction of
inventory in Mauldin, contributed to a strengthened balance sheet
at fiscal year end.
"As I step into my new post, I am encouraged by the
positive signs that are emerging in our industry as well as in
our company," Richey added. "The last half of the year
is typically the most productive for our industry, and the marked
improvement by the other public fabric companies is encouraging.
I firmly believe that House of Fabrics is on the right track to
regain its leadership position and pursue new growth
opportunities. Much of the effort last year was necessarily
directed towards improving the financial
condition of the company. Now it's time to focus on the
exciting challenges and opportunities that lie ahead as we
concentrate on the merchandising, marketing and operational
aspects of the business, working towards an improved fall and
holiday season." As part of the company's emergence from
Chapter 11, the adoption of fresh start accounting rules required
the company to provide income taxes on earnings, notwithstanding
the possible availability of pre-exit tax net operating losses.
Accordingly, the company is restating the quarter ended October
31, 1996, from the previously reported aftertax earnings of
$874,000 to $520,000, or from $0.17 per share to $0.10 per share,
to reflect an additional provision for income taxes of $354,000.
House of Fabrics currently operates 261 company-owned House of
Fabrics, Sofro Fabrics, Fabricland and Fabric King retail fabric
and craft stores in 27 states and employs approximately 5,000
people.
HOUSE OF FABRICS, INC. AND
SUBSIDIARIES
CONSOLIDATED INCOME
STATEMENTS
(Unaudited)
(In $000 -- except per
share data)
Three Months
Six
Months
Twelve Mont hs
Ended
Ended
Ended
Jan. 31, Jan.
31, Jan. 31,
July 31,
Jan. 31,
1997
1996
1997
1996
1996
Successor
Predecessor
Successor
Predecessor
Predecesso r
Co.
Co.
Co.
Co.
Co.
Sales $73,371
$95,526 $143,324 $111,355
$333,501
Expenses:
Cost of Sales 43,400
62,350 83,600 62,000
192,763
Selling, General
and Administrative28,772
38,630 56,308 53,952
152,293
Interest 1,093
3,274 2,412 4,911
14,062
Total Expenses 73,265
104,254 142,320 120,863
359,118
Earnings (Loss) Before
Income Taxes and
Reorganization Costs 106
(8,728) 1,004 (9,508)
(25,617)
Reorganization (603)
(37,416) (603) 1,440
44,915
Earnings (Loss) Before
Income Taxes 709
(46,144) 1,607 (10,948)
(70,532)
Income Taxes 304
(315) 682 48
(165)
Net Income (Loss) $405
$(45,829) $925 $(10,996)
$(70,367)
Net Income (Loss) Per
Share $0.08
N/A $0.18 N/A
N/A
Weighted Average Number
of Shares
Outstanding 5,178,463
N/A 5,181,538 N/A
N/A
SELECTED BALANCE
SHEET DATA
Janua
ry
31,
1997
Janu
ary
31,
1996
Inventories
$104,576
$107,140
Accounts Payable
$18,250
$9,754
Bank Debt
$42,621
$102,823
SOURCE House of Fabrics Inc./CONTACT: John E. Labbett of House
of Fabrics, Inc., 818-385-2305; Roger S. Pondel of Pondel Parsons
& Wilkinson, 310-207-9300/
Bonneville Pacific Corporation
Announces Settlement
SALT LAKE CITY, UT - April 10, 1997 -
through its Chapter 11 Bankruptcy Trustee (Roger G. Segal),
announces today that a settlement has been reached with Norwest
Bank Minneapolis, N.A. ("Norwest") (NYSE: NOB). The
settlement provides that Bonneville Pacific and its bankruptcy
estate will waive and release all claims against Norwest in
exchange for a payment by Norwest to Bonneville Pacific
Corporation of Five Million Dollars ($5,000,000.00).
The settlement, which must still be documented, is conditioned
upon approval by the United States Bankruptcy Court (the
Honorable John H. Allen). Although Norwest has agreed to the
settlement, it denies all allegations of wrongdoing.
SOURCE Bonneville Pacific Corporation /CONTACT: Roger Segal,
Trustee for Bonneville Pacific Corporation, 801-532-2666/
Financial Agencies Raise Columbia's
Credit Ratings
RESTON, Va., April 10, 1997 - The
Columbia Gas System in the past week received confirmation of
its improved financial position as both Standard & Poor's and
Moody's Investors Service raised their ratings on Columbia's
corporate credit and unsecured debt.
The two upgrades follow an upgrade earlier this year by Fitch
Investors Service. Across the board, Columbia now has comparable
high-quality ratings from all three agencies.
Michael W. O'Donnell, Columbia's chief financial officer and a
senior vice president, said, "Obviously, we are very
pleased. The action of all three agencies recognizes the
improvement in Columbia's credit quality over the past
year-and-a-half, stemming from the improved operating performance
of Columbia's business units, the sale of common stock in 1996,
the sale of Columbia Gas Development and the elimination of its
ongoing losses, and the retirement of significant amounts of
short-term debt."
"The resulting impact of these factors on earnings, cash
flow and interest coverage were the key drivers in the ratings
improvement," O'Donnell said. "Since March 1996,
Columbia has reduced its total debt ratio from almost 61 percent
to just over 54 percent at the present time."
On April 3, Standard & Poor's boosted its corporate credit
and senior unsecured debt ratings of Columbia to BBB+ from BBB.
S&P also raised its rating on Columbia's $1 billion shelf
registration to preliminary BBB+/BBB from preliminary BBB/BBB-.
Further, it assigned a BBB+ rating to Columbia's $1 billion
five-year unsecured bank agreement, which expires in November
2000.
S&P called Columbia's ratings outlook "stable"
and noted that the integrated natural gas company has about $2.2
billion in total debt outstanding.
S&P said that "The rating upgrade reflects improved
credit protection measures stemming from greater earnings and
cash flow."
S&P added that "Columbia has successfully lowered
operating expenses, enacted a disciplined and largely internally
funded capital spending program and eliminated noncore,
under-performing assets. In addition, Columbia's marketing
strategy, to maximize the use of its previously under-managed
integrated asset base, is generating increased revenues and
margins and supporting the growth of its nonregulated retail
energy marketing subsidiary. Various planned transmission and
storage expansion projects are expected to further supplement
earnings. Importantly, the upgrade also reflects Columbia's
improved business profile, evidenced by the sale of its more
risky southwestern oil and gas properties, the successful
management of regulatory issues and the assembly of a quality
management team."
On April 7, Moody's raised the ratings on Columbia's senior
debentures and bank revolver to Baa1 from Baa3.
Moody's said that "The higher ratings reflect improvement
in Columbia's financial position, Moody's expectation of future
improvement and our expectation that business risk will remain
moderate. Columbia's interest and cash flow coverages compare
very well with those of its peers. Its low dividend payout makes
cash available for capital expenditures and also builds up common
equity. Columbia's debt portion of capitalization was still
higher than that of its peers at Dec. 31, 1996, but the rating
change reflects our belief that the company will continue to
improve its capital structure at a pace similar to that of 1996.
The earliest maturity of Columbia's debt is 2000, but its
embedded debt cost of just over 7 percent is well below the
industry average, resulting in solid interest coverage. Aided by
the low dividend payout, Columbia's retained cash flow to debt
ratio exceeds that of most of its peers."
On Jan. 9, Fitch upgraded to BBB+ from BBB Columbia's $2
billion in outstanding debentures.
"The upgrade reflects the fact that Columbia's current
and prospective credit measures are materially stronger than were
anticipated when the company emerged from bankruptcy a little
over a year ago," Fitch said.
The Columbia Gas System, a Fortune 500 and S&P 500
company, is one of the nation's largest natural gas systems, with
assets of about $6 billion. Its operating companies are engaged
in all phases of the gas business plus marketing, fuel management
services and electric power generation. Columbia companies,
directly or indirectly, serve more than 7 million natural gas
customers - 12 percent of the nation's total - in 15 states and
the District of Columbia. Information about the Columbia Gas
System is available on the World Wide Web at
http://www.columbiaenergy.com.Columbia stock trades on
the New York Stock Exchange under the symbol CG.
This press release includes forward-looking statements within
the meaning of the federal securities laws and, although Columbia
believes that such statements are based on reasonable
assumptions, it cannot guarantee that its planned business
objectives will be achieved.
Financial Community Contact: Thomas Hughes, 703-295-0429.
SOURCE Columbia Gas System Inc /CONTACT: John Jennrich of
Columbia Gas System, 703-295-0424/
Most Personal Bankruptcy Filers Find Process
Easy; Many Would Consider Filing Again
WASHINGTON, DC - April 10, 1997 - With personal bankruptcy
filings reaching a record level in 1996, Visa U.S.A. today
released the largest-ever survey of individuals who have gone
through the bankruptcy process. The results are disturbing for a
decision that can have a lifelong impact.
The large majority of the respondents found the process of
filing for bankruptcy "easy," and one quarter said they
would consider filing again. The survey also found that while
two-thirds relied on attorneys during the process, less than half
sought credit counseling prior to making the decision to file for
bankruptcy.
"What you don't know certainly does hurt you when it
comes to filing for personal bankruptcy," Kenneth Crone,
senior vice president of Visa U.S.A., said of the survey results.
"Less than half of petitioners sought credit counseling
prior to filing, and fewer understood the process once they took
the plunge. Increased consumer education will help people realize
that bankruptcy should be a last resort instead of a first
option."
"It's clear that too often the bankruptcy system is seen
as an easy escape, when in fact, it leads to a whole new set of
barricades," said Crone.
Among the most important revelations of the survey are:
.. 66.4 percent found the bankruptcy process an easy one; ..
26.5 percent indicate they would consider filing again; .. Just
44.5 percent had sought professional debt counseling prior to
filing; .. 11.1 percent had filed more than one bankruptcy case;
8.6 percent had filed twice; .. Most filers, 63.6 percent, relied
on attorneys to choose which chapter,
7 or 13, they filed; and, .. Nearly 60 percent said that their
financial troubles began years before
they filed.
As for life after bankruptcy, the survey found:
.. 80 percent said that new credit was hard to obtain; .. 88.9
percent did not have any unsecured credit (credit cards, personal
loans) that was given after filing for bankruptcy; and, ..
84.4 percent did not reaffirm any credit card debts that allowed
them to keep their card.
The survey was mailed in November 1996 to individuals who had
filed for bankruptcy during the previous twelve months. More than
3,500 individuals responded to the survey by the end of December
1996. Overall, 30.1 percent of filers were between the ages of
26- 35 and 41.4 percent were ages 36-50. Just 19.4 percent were
unemployed. The survey also explored regional differences among
filers. Copies of the summary statistics are available upon
request.
Visa is the preferred payment brand and the largest consumer
payment system worldwide. It plays a pivotal role in advancing
new payment products and technologies to benefit its more than
20,600 member institutions, their cardholders and the global
economy. Visa's 546 million cards are accepted at more than 13
million worldwide locations, including nearly 320,000 ATMs in the
Visa Global ATM Network. Visa's Internet address is www.visa.com.
Copies of the Visa U.S.A. bankruptcy survey are available upon
request.
SOURCE Visa U.S.A. /CONTACT: Dave Sandor, 703-287-4503, or
Bill McCarthy, 202-835- 8832, both for Visa U.S.A./
Grant Geophysical Announces Receipt of
Bankruptcy Court Approval
HOUSTON, TX - April 10, 1997 - Grant
Geophysical, Inc. announced today that it has received
Bankruptcy court approval for the initial steps in the previously
announced transactions with Elliott Associates of New York.
Under the court approval, which was issued on April 9, Elliott
has purchased a $2.5 million participation in the Company's
primary working capital facility with Foothill Capital
Corporation. In connection with the participation, the working
capital facility also was extended until September 30, 1997.
Grant said that it anticipated filing a plan of reorganization
with the court on or about May 15 and anticipated that voting on
the plan could begin in mid-June.
Grant Geophysical, Inc. is an international geophysical
services company headquartered in Houston, Texas, with seismic
land and transition zone crews working worldwide.
SOURCE Grant Geophysical, Inc. /CONTACT: Larry E. Lenig, Jr.,
President, 281-647-5201, or Michael P. Keirman, 281-647-5203,
both of Grant Geophysical, Inc./
Grossman's obtains financing
CANTON, Mass.--April 10, 1997--
today reported that first day orders granting authority to pay
employees, honor customer practices and take certain other
actions which assist business operations in Chapter 11 have been
entered by the United States Bankruptcy Court for the District of
Delaware. Grossman's also announced the resolution of issues
related to an arrangement with GDI Company, Inc. to provide up to
$50 million in debtor-in-possession (DIP) financing. Three of the
seven members of the company's Board of Directors are executive
officers of JELD-WEN, inc., an affiliate of GDI and a major
supplier of the company. The chairman of JELD-WEN is a
significant shareholder of Grossman's. Other JELD-WEN affiliates
are pre- bankruptcy lenders of Grossman's.
The Bankruptcy Court approved secured lending facilities with
GDI and Congress Financial Corporation (Grossman's existing
revolving credit lender). Congress will continue to provide
financing, essentially on pre-bankruptcy terms, through April 29,
1997. On or before that date, GDI, under the GDI DIP Facility,
will purchase the Congress pre-bankruptcy loan (currently
approximately $27 million) and take an assignment of Congress'
collateral position. The court also granted approval of $11
million of interim borrowings under the GDI DIP Facility to be
made on or prior to April 21, 1997. The $11 million in advances
will be secured by the same real estate collateral securing the
current GDI pre-bankruptcy loan. Upon the purchase by GDI of
Congress' position, advances under the full $50 million DIP
Facility will be secured by the real estate and the collateral
currently held by Congress. The GDI DIP Facility provides for
formula based additional advances for normal business operations
and other cash needs during the bankruptcy proceedings. A final
hearing on the approval of the full GDI DIP Facility is currently
scheduled for April 30, 1997 in the Delaware bankruptcy court.
Congress has received a subordinated collateral position,
behind GDI, in Grossman's owned real estate, until repayment of
its loans. In addition, the Congress lien is collateralized by
all inventory and receivables, existing both prior and subsequent
to the commencement of bankruptcy proceedings. A $1 million
termination fee claimed by Congress under the pre-petition
revolving credit agreement has been secured by a senior lien on
inventory and receivables. The fee is disputed and will be
determined at a later date.
The arrangements between the parties include a carveout for
professional fees related to the bankruptcy filing.
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. Important factors, beyond the company's control, that could
cause actual results to differ materially from those in the
forward- looking statements include, but are not limited to, the
need for approvals by the Bankruptcy Court, competition,
stability of customer demand, and the sufficiency of its capital
resources. Undue reliance should not be placed on these
forward-looking statements, which speak only as of the date
hereof. The company undertakes no obligation to publicly release
revisions to these forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Grossman's Inc. operates 15 stores under the name Contractors'
Warehouse in California, Indiana, Kentucky and Ohio, and 28
stores under the name Mr. 2nd's Bargain Outlet in Massachusetts,
New York and Rhode Island.
Grossman's Inc. press releases and public filings can be
accessed on the Internet through Business Wire's Home Page:
http://www.businesswire.com/cnn/gros.htm
Mr. 2nd's Bargain Outlet maintains a web site for product
information, store locations and feedback:
http://www.bargain-outlets.com
CONTACT: Grossman's Inc. Steven L. Shapiro, 617/830-4020
U.S. Court of Appeals Vacates $22 Million Judgment Against
TULSA, Okla., April 10, 1997 - Reconversion Technologies, Inc.
(OTC Bulletin Board: RETKQ) announced that the U.S. Court of
Appeals for the Federal Circuit has denied GAIA Technologies,
Inc.'s ("GAIA") Combined Petition for Rehearing and
Suggestion for Rehearing In Banc. GAIA, now owned by North
American Technologies Group, Inc. (Nasdaq: NATK) had petitioned
the Court in December of 1996 after RETEK's successful appeal of
its patent and trademark judgment. The mandate from the Appeals
Court entered on April 3rd ordered the District Court to vacate
the judgment against all defendants. The judgment totaled
approximately $22,000,000 in damages and $450,000 in attorneys'
fees. Among other defenses, RETEK alleged that GAIA did not own
the patents and trademark at the time the suit was filed, and
therefore, lacked standing or had no right to assert claims of
patent and trademark infringement against the Company.
Although RETEK raised the issue of GAIA's ownership prior to
trial, the Federal District Court allowed GAIA's claims to be
submitted to a jury, reserving the issue of GAIA's standing to
sue until after the jury verdict. After the verdict was rendered,
the District Court Judge again denied RETEK's motion to dismiss
based on GAIA's lack of standing to bring their infringement
claims. In addition, the judge substantially modified the jury
verdict and found malicious and willful infringement on the part
of RETEK against GAIA's patents and awarded double damages and
attorney's fees, increasing the original verdict from
approximately $10,000,000 to $22,000,000.
Commenting on the appeal court's recent decision, RETEK's
president, G. David Gordon, said "RETEK has been vindicated
by the U.S. Court of Appeals. When GAIA filed the lawsuit, we
felt it was an attempt to observe our operations and analyze our
patented manufacturing process, since GAIA had never manufactured
any products that we manufactured. Our suspicions were confirmed
when GAIA began production and sales of air conditioning pads
which appear to be similar to the air conditioning pads which
were produced by our subsidiary. We are considering the legal
consequences of the appellate court's decision and the actions of
GAIA. Approximately 60 employees lost their jobs, and the Company
and its other subsidiaries were forced into bankruptcy as a
result of this litigation."
SOURCE Reconversion Technologies, Inc. /CONTACT: G. David
Gordon, President of RETEK, 918-459-9689/
Call Now, Inc. Acquires Additional Retama
Development Corporation Debt
MIAMI SHORES, Fla. April 10, 1997 - Call Now, Inc. (OTC
Bulletin Board: CNOW) has purchased the interest in Retama
Development Corporation's Senior Bonds held by Ozner, Solomon and
Hall Investment Partnership ("OSH"). Call Now and OSH
together purchased all the Senior debt of Retama in September,
1996 with Call Now holding a 52% interest and OSH holding a 48%
interest.
Call Now acquired OSH's interest in exchange for 760,000
shares of Call Now common stock and $2.3 million in cash. The
Company now holds all $7,000,000 in Retama Series A Bonds and
$86,925,000 in Retama Series B Bonds. The $93,925,000 total of
Retama Series A and B Bonds comprise 100% of Retama's
indebtedness.
The Bonds are secured by the facilities of the Retama Park
Racetrack. Retama Park is one of the three Class I thoroughbred
racing tracks in Texas. Located in San Antonio, Retama set a
record for its simulcast activity one week after Retama
Development Corporation emerged from bankruptcy reorganization in
March, 1997.
"We feel that Retama is now in a strong position to
succeed, having successfully emerged from bankruptcy
proceedings," said Bryan Brown, President. "Call Now
will be working with management of the track to continue its
progress."
SOURCE Call Now, Inc. /CONTACT: Bryan P. Brown, President,
Call Now, 305-751-5115; or Joel Bernstein, for Call Now,
305-751-3008/
Sears initiates voluntary restitution plan
for certain past bankruptcy collection practices
HOFFMAN ESTATES, Ill.--April 10, 1997--Sears, Roebuck and Co.
yesterday filed a motion in U.S. Bankruptcy Court for the
District of Massachusetts indicating that the company would
voluntarily repay Chapter 7 bankruptcy debtors nationwide whose
debt reaffirmations were not filed as required by the U.S.
Bankruptcy Code.
Under the reaffirmation provisions of the U.S. Bankruptcy
Code, a debtor seeking Chapter 7 protection may agree to repay
his or her debts to creditors. This reaffirmation must be filed
with the court to be valid.
Sears said it exercised flawed legal judgment in the execution
and handling of certain debt reaffirmations. Immediately upon
learning of this problem, the company's senior management last
week directed that all reaffirmations must be filed in a timely
fashion. Yesterday, the company initiated the voluntary
restitution plan described in its motion to the Bankruptcy Court
in Massachusetts. The company also discussed its plan with the
offices of the Massachusetts Attorney General and the U.S.
Bankruptcy Trustee for Region One, which includes Massachusetts.
Under the plan, the company will return amounts collected through
reaffirmation agreements that were not filed, including principal
and finance charges, with interest.
To implement the plan, Sears has initiated a process to
identify any debtors whose reaffirmation agreements were not
filed properly during the period 1992 to date. Until repayments
can be made, the company, as soon as possible, will cease sending
billing statements and assessing interest charges to former
debtors who signed reaffirmation agreements that were not filed.
While the company is in the early stages of assessing the cost
of its plan, Sears expects it may have a material effect on 1997
annual earnings.
The company yesterday received documents relating to a class
action suit filed in the Bankruptcy Court of Massachusetts that
pertain to the same issues.
Sears has retained the services of Professor Lawrence P. King,
the Charles Seligson Professor of Law at New York University
School of Law, to perform a review of Sears procedures with
regard to reaffirmation agreements. The company advised the court
that it is committed to following Professor King's
recommendations to assure future compliance with requirements of
the bankruptcy code.
Sears, Roebuck and Co. is a leading U.S. retailer of apparel,
home and automotive services, with annual revenues of more than
$38 billion.
CONTACT: Jan Drummond, 847-286-8316, Sears