Pudgie's Chicken Announces 1996 Fourth
Quarter And Year-End Results
UNIONDALE, N.Y., April 15, 1997 - Pudgie's
Chicken, Inc. (Nasdaq: PUDGQ), an operator of quick service,
takeout and delivery Pudgie's restaurants, announced today a loss
for the fourth quarter and twelve months ended December 31, 1996.
The Company, which filed a petition for reorganization under
Chapter 11 of the Bankruptcy Code on September 18, 1996, incurred
a net loss for the fourth quarter ended December 31, 1996 of
$10,628,495, or $2.37 per share, as compared to a net loss of
$1,313,018 or $0.29 per share for the comparable quarter last
year. The increase was primarily attributable to a non-cash
charge of approximately $8.1 million as a result of the write
down of long- lived assets and $935,298 of bankruptcy related
expenses.
Total revenues for the 1996 fourth quarter were $2,215,482 as
compared to $2,952,743 for the same period last year. There was a
net decrease in the number of Company-owned restaurants from 26
at December 31, 1995 to 18 at December 31, 1996. The number of
franchised restaurants decreased from 36 at December 31, 1995 to
31 at December 31, 1996.
Revenues for fiscal year ended December 31, 1996 reached
$11,404,006 versus $11,199,768 for the comparable period last
year. The Company reported a net loss for the full year 1996 of
$17,037,257, or $3.80, on weighted average shares of 4,486,404.
This compares to a net loss for the full year 1995 of $4,164,617
or $1.44, on weighted average shares of 2,892,182. The increase
in the net loss was attributable principally to a non-cash charge
of approximately $8.1 million as a result of the write down of
long- lived assets, an accrual for an arbitration award of
approximately $1.7 million and approximately $1.4 million
expenses in conjunction with the closing of 9 Company-owned
restaurants in 1996 as a result of the Company's filing of the
Chapter 11 Cases.
Pudgie's Chicken operates and franchises quick service
Pudgie's Famous Chicken restaurants with an emphasis on Home
Delivery that offer tasty, reasonably priced meals featuring
fresh skinless fried chicken. Pudgie's also offers barbecued
ribs, shrimp, corn on the cob, mashed potatoes, rice, salads and
other side dishes.
You can also contact Pudgie's on their Web Site
HTTP://ISON.COM/PUDGIES/
This release contains certain forward-looking statements which
involve known and unknown risks, uncertainties or other factors
not under the Company's control which may cause actual results,
performance or achievements of the Company to be materially
different from the results, performance, or other expectations
implied by these forward-looking statements. These factors
include, but are not limited to, those detailed in the Company's
periodic filings with the Securities and Exchange Commission.
PUDGIE'S CHICKEN, INC. AND
SUBSIDIARIES
(Debtors-In-Posses
sion)
Consolidated Statements
of Operations
Three
Months
Ended
Twelve
Months Ended
December
31,
December
31,
(unaudite
d)
1996
1995
1996
1995
Revenue
Restaurant sales $ 1,936,643 $
2,533,184 $ 10,069,748 $
9,366,689
Franchise & advertising
royalties 237,836
231,488 966,908
1,289,025
Franchise fees 15,000
130,000 270,000
410,000
Interest income &
other revenue 26,003
58,071 97,350
134,054
2,215,482
2,952,743
11,404,006
11,199,768
Costs and Expenses
Restaurant cost of sales 738,659
1,036,442 3,929,726
3,730,273
Restaurant operating
expenses 1,251,870
1,398,300 5,696,573
4,914,788
Franchising costs 27,346
58,116 116,562
158,155
General & admini-
strative 1,531,883
1,169,948 4,765,352
3,680,481
Arbitration award --
-- 1,707,404
--
Restaurant closing expenses --
-- 347,010
--
Research & development
-- -- --
20,000
Advertising expenses 69,539
266,473 744,536
1,202,714
Depreciation &
amortization 191,485
225,115 906,333
888,536
Interest expense --
111,367 320,543
771,438
3,810,782
4,265,761
18,534,039
15,364,385
Loss before
reorganization
items ($1,595,300)
($1,313,018) ($7,130,033)
($4,164,617)
Reorganization items
Impairment on
long-lived assets 8,097,897
-- 8,097,897
--
Loss on closing of
restaurants 534,973
-- 1,366,002
--
Professional fees 400,325
-- 443,325
--
Net loss ($10,628,495)
($1,313,018)
($17,037,257)($4,164,617)
Net loss per common share ($ 2.37)
($ 0.29) ($ 3.80)
($ 1.44)
Shares used in
computation 4,488,385
4,506,973 4,486,404
2,892,182
SOURCE Pudgie's Chicken, Inc./CONTACT: Steven Wasserman
President & CEO of Pudgie's Chicken, 516-222-8833; or Joe
Calabrese or Kerry Thalheim, both of The Financial Relations
Board, 212-661-8030/
METALLURG, INC. SUCCESSFULLY COMPLETES
ITS OPERATIONAL AND FINANCIAL RESTRUCTURING
NEW YORK, NY--April 15, 1997-- -- Holding Company and
Shieldalloy Metallurgical Corp., Its Principal U.S. Subsidiary,
Emerge from Court Protection -- -- "With Profitable
Operations, a Strong Balance Sheet and More Favorable Industry
Conditions, We Look Forward to a Bright Future," Says
Chairman/CEO Michael A. Standen --
Metallurg, Inc., the leading worldwide producer and supplier
of specialty metals, alloys, metal-based chemicals and powders,
today announced that it has successfully completed its
operational and financial reorganization and that both it and the
Company's principal U.S. subsidiary, Shieldalloy Metallurgical
Corporation (SMC), have emerged from the court protection they
sought in September 1993 under Chapter 11 of the U.S. Bankruptcy
Code. None of Metallurg's other worldwide operations sought such
protection, and Metallurg said that all of its operating
units--collectively known as The Metallurg Group--are
operationally and financially strong, profitable, and
well-positioned for continued success and growth.
Michael A. Standen, Metallurg chairman and chief executive
officer, said: "Since 1993, our progress on the financial,
operational and other fronts has been quite remarkable.
"Financially, we have achieved operating profits of $26.4
million in 1996 and $33.0 million in 1995, compared to an
operating profit of $7.4 million in 1994 and an operating loss of
$24.5 million in 1993, excluding nonrecurring charges in each of
the four years. We expect our financial results for the quarter
ended March 31, 1997 also to be strong.
"Operationally, with the support of BankBoston and, since
mid- 1995, of a new group of investors, we have continued to
reorganize our operations, reduce our exposure to cyclical and
other changes in our business environment, and grow our business.
"We have expanded our sourcing from Russia and China of
such materials as silicon metal, manganese metal and
silicochrome, and developed several new products such as
superfine aluminum powders, hydride alloys, and metal-based
chemicals. At the same time, we have ceased the production and
trading of unprofitable or low-margin products, including tin
production in Brazil and ferrovanadium operations in Germany.
"One of the factors that led us to seek court protection
in 1993 was the devastating effect on our business of sudden,
massive exports of ferrovanadium and low-carbon ferrochrome from
Russia, Ukraine and Kazakhstan. As a direct result of our
petitions to the European Union (EU) for anti-dumping protection
(more) against CIS ferrochrome, and to the United States
government for similar protection against Russian ferrovanadium,
anti-dumping measures were imposed on Russia, Ukraine and
Kazakhstan, which measures have enabled us to reorganize those
operations."
Mr. Standen noted other steps in the Company's restructuring
program, including the following:
In the United States, the December 1996 sale by Shieldalloy of
its wholly-owned subsidiary, Frankel Metal Company, to FMC's
management, and the sale of Metallurg's 50% interest in Ampal,
Inc., a producer of aluminum powders.
In the UK, the expansion of polishing powder and boron alloy
production at London & Scandinavian Metallurgical Co. through
LSM acquisitions of such operations from other companies.
In Germany, the reorganization of Gesellshaft fur
Elektrometallurgie (GfE) into a holding company with separate
subsidiaries concentrating on specific business activities.
The formation of Metallurg International Resources - Shanghai
to improve the Company's sourcing of raw materials in China for
its own production plants and for trading purposes.
The reorganization of the Company's operations in Brazil to
concentrate on aluminum master alloys and tablets, plus tantalum
and niobium oxides.
The 1996 purchase by Metallurg of a minority interest in
Solikamsk Magnesium Works, in Russia.
The sale of non-core real estate assets, including the
Company's headquarters building, and the move of the Company's
headquarters to 6 East 43rd Street in New York.
Settlements with the environmental authorities in New Jersey,
Ohio and at the federal level, made possible by a high degree of
cooperation between all parties.
Formation of a joint venture with Allied Minerals for the
production of refractories in South Africa.
The establishment of a $40 million credit facility with a
group of banks led by BankBoston.
The Company has also strengthened its senior management team
with the appointment in January 1996 of Richard Budd as Senior
Vice President and subsequently, of Eric Schondorf as Vice
President, General Counsel. Mr. Budd was formerly a vice
president and director of Cityscape Corp. and Executive Vice
President of European American Bank. Mr. Schondorf was formerly
with the law firm of Weil, Gotshal & Manges LLP. In January
1997, Eric Jackson, who previously held senior positions at the
Phibro Division of Salomon Inc., at Louis Dreyfus Corp. and at
Cargill Incorporated, was named President of Shieldalloy.
On the Company's Board of Directors, incumbent members Michael
Standen and Alan Ewart, of LSM, have been joined by
representatives of three of the Company's major investors: Peter
Langerman, of Franklin Mutual Series Fund, Inc.; Jon Bauer, of
Contrarian Capital Management LLC; and Herbert Seif, of SBC
Capital Markets, Inc.
Mr. Standen said: "In the months ahead, we will be
actively exploring strategic acquisitions and alliances, capital
market transactions and other initiatives aimed at building the
Company's value for its shareholders. With profitable operations,
a strong balance sheet and more favorable industry conditions, we
look forward to a bright future."
Metallurg, Inc., through its operating subsidiaries in the
United States, United Kingdom, Germany and Brazil, is a leading
international producer and distributor of high-quality metals and
metal alloys used by manufacturers of steel, aluminum, super
alloys, hard facing materials, electronics and fiber optics and
by other metal-consuming industries. Shieldalloy Metallurgical
Corporation, a wholly-owned subsidiary of Metallurg, operates
manufacturing facilities in Newfield, New Jersey and Cambridge,
Ohio. In addition to its manufacturing and marketing activities,
Metallurg also operates a trading division, Metallurg
International Resources (MIR), which trades in such metals and
metal alloys. Founded in 1911, Metallurg employs approximately
1,700 people worldwide, including approximately 300 in the United
States. The Company's shares will be listed on the OTC Bulletin
Board.
CONTACT: Metallurg, Inc. J. Richard Budd III or Michael A.
Banks, 212/687-9470 or Kekst and Company Roy Winnick,
212/593-2655
Notice of Pendency of Class Action against Sears,
Roebuck & Co. and Others
NEW YORK, NY--April 15, 1997--Pursuant to Section
21D(a)(3)(A)(i) of the Securities Exchange Act of 1934, notice is
hereby given that on April 15, 1997, a class action lawsuit was
filed in the United States District Court for the Northern
District of Illinois, Eastern Division, Civil Action No. 97 C
2567 (GWL), on behalf all persons who purchased or otherwise
acquired the common stock of Sears, Roebuck & Co.
("Sears," or the "Company") between October
4, 1996 and April 10, 1997, inclusive (the "Class
Period").
The complaint charges Sears and certain officers and directors
of the Company during the relevant time period with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
by, among other things, misrepresenting and failing to disclose
that the Company was engaged in a wrongful course of conduct
whereby the Company would coerce individual debtors who were in
bankruptcy, and had outstanding balances on their Sears Card into
signing reaffirmation agreements concerning those debts. Sears
then failed to file those agreements with the Bankruptcy Court as
required by law. Because of the issuance of a series of false and
misleading statements concerning Sears' business practices and
wrongful course of conduct, which omitted full disclosure of
these facts, the price of Sears common stock was artificially
inflated during the Class Period.
On April 10, 1997, Sears announced that it would be
voluntarily repaying Chapter 7 bankruptcy debtors nationwide
whose debt reaffirmations were not filed with the U.S. Bankruptcy
Court as required by law. The Company stated that it would be
reviewing its records, dating back to 1992, to determine who is
entitled to repayment. Sears also revealed that the amount of the
repayment was uncertain but "it expects it may have a
material effect on 1997 annual earnings." Analysts reported
that the amount of repayment could go as high as $400 million.
Following these disclosures the price of Sears common stock
dropped $3.875 per share, the largest single day drop in Sears
stock in over three years.
Plaintiffs seek to recover damages on behalf of class members
and are represented by the law firms of Milberg Weiss Bershad
Hynes & Lerach LLP ("Milberg Weiss"), Schiffrin
& Craig, Ltd. ("Schiffrin"), Miller Faucher Chertow
Cafferty and Wexler ("Miller Faucher") and the Law
Offices of Alfred G. Yates, Jr. Milberg Weiss maintains offices
in New York City, San Diego, Los Angeles and San Francisco and is
active in major litigations pending in federal and state courts
throughout the United States. Milberg Weiss has taken a leading
role in numerous important actions on behalf of defrauded
investors, and is responsible for a number of outstanding
recoveries which, in the aggregate, total approximately $2
billion. For more information about Milberg Weiss, please visit
our website at www.milberg.com.
If you are a member of the Class described above, you may, not
later than sixty days from today, move the Court to serve as lead
plaintiff of the class, if you so choose. In order to serve as
lead plaintiff, however, you must meet certain legal
requirements.
If you wish to discuss this action or have any questions
concerning this notice or your rights or interests with respect
to these matters, please contact Milberg Weiss (Steven G.
Schulman or Samuel H. Rudman) at One Pennsylvania Plaza, 49th
Floor, New York, New York 10119-0165 (telephone: 1-800-922-0187;
Internet electronic mail: classact@microweb.com.) or Schiffrin
(Richard S. Schiffrin or Andrew L. Barroway) at Three Bala Plaza
East, Suite 400, Bala Cynwyd, Pennsylvania 19004 (telephone:
610-667-7706).
CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP Steven
G. Schulman, Samuel H. Rudman, 800/922-0187 or Schiffrin &
Craig Ltd. Richard S. Schiffrin, Andrew L. Barroway 610/667-7706
Van Camp Seafood makes announcement
SAN DIEGO, CA--April 15, 1997--Van
Camp Seafood Co. Inc. Tuesday announced that it has entered
into a definitive agreement to sell its assets to Tri-Union
Seafoods LLC.
Van Camp also announced Tuesday that, in conjunction with the
sale, it has filed a voluntary petition under Chapter 11 of the
U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
Southern District of California. The company, which markets
Chicken of the Sea brand seafood products, said that it sought
Court protection solely to facilitate the sale of the company.
The company expects to continue normal operations throughout
the reorganization process, as well as following Court approval
of the sale to Tri-Union.
Van Camp said that it has entered into a $50 million
debtor-in- possession financing agreement with its existing
lender, BankAmerica Business Credit Inc. Upon Court approval,
these funds will be available to meet the company's obligations
to suppliers and vendors during the pendency of the Bankruptcy
case.
In addition, the company said that the Bankruptcy Court has
been asked to approve the continuation of salary and benefits to
all employees throughout the country and in American Samoa where
the company's cannery (a wholly owned subsidiary, VCS Samoa
Packing Co.) is located.
CONTACT: Van Camp Seafood Co. Inc., San Diego Thomas J.
Gilmore, 619/597-4257
American Business Information, Inc.(R)
Reports Record Results for First Quarter 1997
OMAHA, Neb., April 15, 1997 - American Business Information,
Inc.(R) (Nasdaq: ABII) today reported record revenues of $41.9
million for first quarter 1997, a 69 percent increase from the
$24.8 million for the same period in 1996. As a result of non-
recurring charges associated with the acquisition of Database
America(R) (DBA), the Company incurred a net loss for first
quarter 1997 of $65.4 million, or $(2.82) per share, compared to
first quarter 1996 results of $4.7 million, or $0.23 per share.
Without these one- time charges, net income for first quarter
1997 would have been approximately $6.3 million, or $0.27 per
share.
During the first quarter the Company recorded non-recurring
charges of $72.6 million for write-offs in connection with the
merger of Database America as well as other related integration
and organizational restructuring costs.
"Solid gains were registered virtually across all of the
Company's product lines," said Vin Gupta, CEO and Chairman
of American Business Information. "The integration of DBA
has gone extremely well with the realization of many of the
anticipated operational and cost synergies."
American Business Information's CD-ROM divisions released new
products during the first quarter of 1997. Among these were CD
USA's Yellow Pages Deluxe and PhoneDisc's Ultimate Phone
Directory. PhoneDisc also introduced a New Sales Leads product
line including the CD-ROM packages Business Sales Leads(TM) and
Consumer Sales Leads(TM). It is expected that these new products
will increase ABI(TM)'s current 76 percent market share
penetration in the consumer CD-ROM market.
The Company plans to significantly increase promotion of its
new Internet web site, SalesLeadsUSA.com during the second
quarter. This web site enables users to directly purchase Sales
Leads and Business Profiles when instant information is needed.
"SalesLeadsUSA.com is ABI's solution to meeting our
customers' needs in as timely and efficient a manner as possible.
It's our way of providing our customers 24-hour-a-day
service," stated Gupta.
Statements in this press release that are not strictly
historical are "forward-looking" statements within the
meaning of the Safe Harbor provisions of the federal securities
laws. Investors are cautioned that such statements are only
predictions and speak only as of the date of this release. Actual
results may differ materially due to risks and uncertainties
which are described in the Company's Form 10-K for fiscal year
1996. Forward-looking statements involve risks and uncertainties,
including, but not limited to, the successful integration of
recent acquisitions, continued acceptance of the Company's
products and services in the marketplace and competitive factors.
American Business Information, Inc. is a leading compiler of
information on businesses and consumers in the United States and
Canada and provides data processing and analytical services. Over
1 million customers use American Business Information to generate
sales leads, reduce selling costs, improve marketing efficiency,
and for business credit purposes. Founded in 1972, the Company is
headquartered at 5711 South 86th Circle, P.O. Box 27347, Omaha,
NE 68127-0347. American Business Information can be contacted at
402-593-4500, or on the Internet at:
http://www.SalesLeadsUSA.com.
AMERICAN BUSINESS
INFORMATION, INC.
Summary Financial
Information
(All amounts in thousands,
except per share amounts)
Three
months
Ended
March 31,
1997
March 31,
1996
NET SALES $41,948
$24,785 COSTS AND EXPENSES
Database and production
costs 12,043
6,274
Selling, general and
administrative 17,986
10,152
Non-recurring charges 72,579
-- Depreciation and
amortization 1,824
1,164 Total costs and expenses
104,432 17,590 OPERATING
INCOME (62,464)
7,195 Investment income and other, net
42 399 Income before
income taxes (62,442)
7,594 Income taxes
2,966 2,885
NET INCOME $(65,408)
$4,709
EARNINGS PER SHARE DATA
Net Income ($2.82)
$0.23
Average shares outstanding 23,206
20,783
PROFORMA WITHOUT NON-RECURRING CHARGES
Operating Income 10,095
7,195 Net Income
6,285 4,708
Earnings Per Share $0.27
$0.23
Note: Non-recurring charges consist principally of write-offs
in connection with the merger of DatabaseAmerica Companies, Inc.
as well as other related integration and organizational
restructuring costs.
SOURCE American Business Information /CONTACT: Shelly Vaughn,
Director - Investor Relations, of American Business Information,
402-596-8929, fax, 402-339-0265, or irabii.com/
GAC enters into new credit agreement, issues
subordinated notes to Conseco and announces operations
restructuring and 1996 results
BLOOMINGTON, Ind.--April 15, 1997-- New Revolving Credit
Agreement
General Acceptance Corp. (NASDAQ:GACC) today announced that it
has entered into a new revolving credit agreement with its
primary lender.
The terms of the new agreement provide for a $70.0 million
revolving line of credit subject to a maximum advance rate of 78
percent of eligible contracts receivable. The agreement expires
Jan. 1, 1998, and carries an interest rate of one-month LIBOR
plus 4.5 percent.
The agreement concludes a nearly 15-month period during which
the company operated under default of its prior agreement with
the lender. Management believes that the new agreement gives the
company sufficient available lines of credit to fund its planned
contract acquisition and origination activities throughout 1997.
Issuance of $10 Million Convertible Subordinated Notes
______________________________________________________
The company also announced that it issued $10.0 million in
12.0 percent convertible subordinated notes to an affiliate of
Conseco, Inc. ("Conseco") in exchange for cash. Conseco
is traded on the New York Stock Exchange under the symbol
"CNC" (NYSE:CNC). The notes require the payment of
interest only, are unsecured and mature on the third anniversary
of issuance. The conversion feature of the notes is subject to
approval by shareholders at the company's 1997 annual meeting.
Subject to such approval, the notes would be convertible at any
time into common stock of the company at a conversion price of
$3.00 per share. Proceeds were used to reduce borrowings under
the company's revolving line of credit.
The company welcomes this investment by Conseco. Management
believes that the issuance of the notes, in conjunction with the
new revolving credit agreement, will provide the company with
sufficient liquidity to execute its strategy of building its
portfolio of installment sale contracts and opening additional
used vehicle dealerships in selected markets.
The terms of the agreements under which the notes were issued
also provide Conseco with the right to control one-third of the
company's board of directors and to appoint one person to act in
an operations capacity for the company. Further, if Conseco makes
a tender offer to all stockholders of the company prior to April
11, 1998, certain principal stockholders of the company may be
required to tender a significant portion of shares held by them.
Concurrently with the issuance of these notes to Conseco, the
company also issued $3.3 million in convertible subordinated
notes to certain principal stockholders and their relatives in
exchange for a like amount of 12.0 percent demand notes of the
company held by them. These notes have terms identical to those
issued to Conseco. If Conseco and the certain principal
stockholders and their relatives each converted their notes to
common stock of the company, Conseco would own approximately 32
percent of the total outstanding common stock of the company.
Operations Restructuring ________________________
The company also announced the closing of financing operations
in several geographic areas and its plans to concentrate the
majority of its resources on three principal markets: Indiana,
Ohio and Florida. The company currently has a significant
presence, has historically had good experience with credit
quality and has long-standing dealer relationships in each of
these states. Management believes focusing its operations on its
principal markets will increase efficiency, reduce costs and
improve its ability to successfully execute its business plan.
In connection with this plan, the company recently completed
the sale of an additional $24.7 million of installment sale
contracts on a non-recourse basis at 92.7 percent of net
principal balance for cash proceeds of $22.9 million. As was the
case with the company's previously announced sales, because these
installment sale contracts were sold essentially for their
carrying value, no material gain or loss was recorded in
connection with their sale. Proceeds of the sale were used to
reduce borrowings under the company's revolving line of credit.
The company may make additional sales of installment sale
contracts from time to time in connection with its plan to
concentrate its resources in its principal markets.
1996 Results ____________
The company also reported results for the fourth quarter and
year ended Dec. 31, 1996 in line with previously released
estimates. The net loss for the year 1996 was ($9.1 million)
compared to pro forma net income for the year 1995 of $717,000.
The 1996 net loss included the establishment of a non-cash
valuation reserve for deferred taxes of $4.7 million, which
reduced net income on a dollar-for-dollar basis. Without the
establishment of this reserve, the net loss for the year 1996
would have been ($4.4 million). On a per share basis, the net
loss was ($1.51) for 1996, or ($0.73) without the deferred tax
valuation reserve, compared to pro forma net income of 13 cents
for 1995. As the company was an S Corporation until April 1995,
net income for the year 1995 has been adjusted to reflect pro
forma income taxes.
For the fourth quarter of 1996, the net loss was ($7.4
million) compared to a net loss of ($3.1 million) for the fourth
quarter of 1995. The fourth quarter 1996 loss also includes the
establishment of the $4.7 million non-cash valuation reserve for
deferred taxes. Without the establishment of this reserve, the
net loss for the fourth quarter 1996 would have been ($2.7
million). On a per share basis, the net loss for the fourth
quarter of 1996 was ($1.23), or ($0.46) without the deferred tax
valuation reserve, compared to a net loss for the fourth quarter
of 1995 of ($0.51).
Total finance revenues for the year 1996 were $29.0 million
compared to $25.2 million for the year 1995, an increase of 15.1
percent. Gross profit contribution from the company's used
vehicle sales operations was $1.9 million for the year 1996
compared to $407,000 for the year 1995, an increase of 375.7
percent.
Results for the year 1996 include a provision for credit
losses of $11.5 million compared to $6.9 million for the year
1995. Results for the fourth quarter of 1996 include a provision
for credit losses of $3.9 million compared to $6.2 million for
the fourth quarter of 1995. The company has taken additional
steps in 1997 to further tighten credit standards and to increase
the discount from face value at which it purchases installment
loan contracts. This discount becomes part of the total reserves
available for credit losses.
As of Dec. 31, 1996, the company's total reserves available
for credit losses were $12.5 million. Of this amount, $4.2
million has been allocated to the $54.9 million in contracts
receivable held for sale based on completed sales or sales
negotiations in process. The remainder of the total reserves
available for credit losses of $8.3 million has been allocated to
contracts receivable to be retained by the company. For contracts
receivable to be retained by the company, total reserves
available for credit losses as a percentage of contracts
receivable were 13.3 percent as of year end 1996, compared to
16.5 percent as of year end 1995. The company's contractual
60-day delinquency rate as of year end 1996 was 1.8 percent
compared to 3.6 percent as of year end 1995.
The lower reserve percentage as of year end 1996 is believed
by management to be adequate based on a number of factors,
including the more seasoned composition of the company's
portfolio as of year end 1996 compared to year end 1995, the
lower delinquency rate as of year end 1996 compared to year end
1995 and the lower static pool loss experience on loans
originated in 1996 compared to 1995.
This release contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements include statements
about the sufficiency of the company's available lines of credit,
liquidity requirements, increases in operating efficiency,
reductions in operating costs and plans to sell installment sales
contracts. These statements, and any other forward-looking
statements contained herein, are subject to risks, including
risks outside the company's control, that could cause results to
vary materially from the statements set forth herein.
General Acceptance Corp. is a specialized consumer finance
company principally engaged in purchasing and servicing
installment sale contracts relating to the sale of used
automobiles to consumers with limited access to traditional
financing sources. The company acquires these contracts from used
vehicle dealerships operated by the company as well as from
unaffiliated dealers with whom the company has a formal business
relationship. The company is headquartered in Bloomington, and
has regional offices in Indiana, Ohio, Florida, New Jersey and
Pennsylvania, and used vehicle dealerships in Indiana, Missouri,
Ohio, Pennsylvania, Florida and Illinois.
The company's stock is traded on NASDAQ under the symbol
"GACC."
General Acceptance Corp.
(In thousands, except per share amounts)
Condensed Statements of Income
Year Ended
Dec. 31,
1996 1995(1)
________ ________
Finance revenues:
Interest and discount $26,987 $23,638
Ancillary products 1,553 1,033
Other 493 561
________ ________
Total finance revenues 29,033 25,232
Net dealership revenues
Sale of purchased and trade vehicles 8,055 3,077
Cost of sales (6,687) (2,900)
Other 567 230
________ ________
Total net dealership revenues 1,935 407
________ ________
Total net revenues 30,968 25,639
Expenses:
Interest 9,084 6,382
Provision for credit losses 11,525 6,898
Operating expenses 17,525 11,164
________ ________
Total expenses 38,134 24,444
________ ________
Income (loss) before income tax (7,166) 1,195
Income taxes 1,915 478
________ ________
Net income (loss) $(9,081) $ 717
________ ________
________ ________
Net income (loss) per share $ (1.51) $ 0.13
________ ________
________ ________
Weighted average shares outstanding 6,022 5,639
________ ________
________ ________
(1) Gives pro forma effect to income taxes as if the company's
S Corporation status had terminated Jan. 1, 1995.
Condensed Balance Sheets
Dec. 31, Dec. 31,
1996 1995
________ ________
Contracts receivable:
Held for investment $ 62,263 $129,867
Held for sale 54,868 ---
________ ________
117,131 129,867
Allowance and discount available for
credit losses (10,611) (19,513)
________ ________
Contracts receivable, net 106,520 110,354
Repossession inventory 7,534 5,224
Other assets 9,592 8,802
________ ________
Total assets $123,646 $124,380
________ ________
________ ________
Revolving line of credit $ 93,977 $ 94,165
Bank line of credit 4,500 ---
Note payable to related party 1,000 ---
Accounts payable and accrued expenses 4,651 1,605
Dealer participation reserves available
for credit losses 1,855 1,866
Stockholders' equity 17,663 26,744
________ ________
Total liabilities and stockholders'
equity $123,646 $124,380
*T
--30--tmf/clv* blm/clv
CONTACT: General Acceptance Corp., Bloomington Martin C.
Bozarth, 812/337-6023
Inco Homes Reports 1996 Year-End Financial
Results
UPLAND, Calif., April 15, 1997 - Inco Homes Corporation
(Nasdaq: INHMD), a Southern California-based builder of
affordable single- family homes, today reported a loss of $4.3
million, or $3.01 per share, on revenue of $19.6 million for the
year ended December 31, 1996, compared to a loss of $15.7
million, or $11.68 per share, on revenue of $71.3 million in
1995. For the fourth quarter, the company reported a loss of $1.8
million, or $1.25 per share, on revenue of $7.3 million. This
compares to a loss of $15.4 million, or $11.47 per share, on
revenue of $12.3 million in the fourth quarter of 1995. Per share
amounts have been restated to reflect the company's one-for-six
reverse stock split which became effective on January 16, 1997.
Inco's 1996 fourth-quarter and full-year financial results
included a $785,000 impairment allowance to write down certain of
the company's real estate holdings to fair value. In addition,
the company's disappointing financial performance was
particularlyaffected by persistently difficult market conditions
and poor sales activity in Southern California, higher mortgage
interest rates during a portion of the year, and the 1995 sale of
its Phoenix and Las Vegas divisions.
Inco closed 144 new homes in 1996, compared to 595 in 1995.
The 1995 closings included 327 homes from the company's former
operating divisions in Phoenix, Arizona and Las Vegas, Nevada. In
the fourth quarter, the company closed 53 new homes, compared to
117 in the same quarter of 1995 which included 73 homes from
Inco's former, non- California divisions.
The company's net new orders in 1996 totaled 149 homes, down
from 558 in 1995 - a figure that included 365 sales from the
company's former Arizona and Nevada operating divisions. In the
fourth quarter, net new orders totaled 42, compared to 74 in the
year-earlier quarter which included 45 sales from Inco's former,
non- California divisions. At December 31, 1996, the company's
backlog of sold, undelivered new homes totaled 82, with a total
sales value of $10.3 million. That compares with a backlog of 77
new homes, with a total sales value of $10.8 million, at year-end
1995. No backlog amounts are included for Arizona and Nevada as
these divisions were sold in December 1995.
In December 1996, a commercial bank filed notices of default
relating to matured loans with principal balances totaling $2.8
million secured by one of the company's projects. In February
1997, the company obtained new financing that provided
approximately $2.3 million to pay the loans in full pursuant to a
discounted loan payoff agreement. In January 1997, this same bank
filed separate notices of default relating to matured loans with
principal balances totaling $3.5 million secured by an estimated
1,140 lots and 71 commercially zoned acres of one of the
company's projects in the high desert of Southern California. The
law permits the bank to proceed with a non-judicial sale of the
property as of April 9, 1997, 90 days after the notices of
default were filed. Although the company is currently in
negotiations with the bank to amend the terms of the loans and
remove the notices of default, there can be no assurances that
the company will be successful in its negotiations with the bank
or that the bank will not commence with a non-judicial sale of
the property.The final settlement could result in writedowns in
1997 in amounts ranging from minimal to approximately $6.0
million.
New Capital Investment & Development In December 1996, the
company agreed to sell 200,000 shares (restated for reverse stock
split) of the company's common stock in a private transaction.
The stock was issued in January and February, 1997 for a total
purchase price of $750,000.
In 1996, the company formed three new limited partnerships and
entered into two participating note agreements. This provided
approximately $4 million to fund a portion of the land
acquisition, model complex development costs and initial
marketing expenditures for four new projects and a portion of the
land acquisition for a new phase of an existing project. A member
of the Company's Board of Directors is a partner in one of the
new limited partnerships and a partner in each of the holders of
the participating notes. Additionally, one of the owners of the
entity which purchased the shares of the company's common stock
in the transaction described above is also a partner in one of
these new limited partnerships.
In November 1996, the company successfully negotiated a
development and marketing agreement with a third party to
develop, construct and market 163 lots owned by the party for a
fee. The same owner of the entity which purchased the shares of
the company's common stock is also a partner in this third party.
The company has developed newly designed homes for each of the
new projects mentioned above. Additionally, the company is in
negotiations on several other projects that may be developed as
joint ventures or on a fee basis.
The company continues in its efforts to raise additional
capital for both ongoing working capital and the acquisition of
land for future projects in Southern California. If the company
is not successful in obtaining sufficient capital in 1997 to fund
its planned expenditures, some or all of its projects may be
significantly delayed or abandoned. The company is unable to
predict whether it will be successful in raising such capital,
nor can any assurances be given that, if successful, the capital
will be raised on terms favorable to the company.
The company has experienced, and expects to continue to
experience, significant variability in its operating results.
Numerous factors contribute to this variability. The company's
historical results are not necessarily a meaningful indicator of
future results and, in general, the company expects its financial
results to vary from project to project. In addition, the
December 1995 sale of its operations in Phoenix and Las Vegas has
resulted in a reduction in the company's level of closings and
revenue, and has had an adverse effect on earnings.
Inco Homes is a Southern California-based home builder that
develops and builds affordably priced single-family homes for
first- time and first-time move-up home buyers in the greater
Southern California market.
Except for historical information contained herein, the
matters discussed in this press release contain forward-looking
statements that involve risks and uncertainties that could cause
results to differ materially, including land valuation
write-downs, changing market conditions, and other risks detailed
in the company's Annual Reports on Form 1O-K and Quarterly
Reports on Form 1O-Q and other documents filed by the company
with the Securities and Exchange Commission from time to time. A
copy of these documents can be obtained from the company upon
request.
Inco Homes Corporation Consolidated
Statements of Operations
(Dollars in thousands, except
per share data)
(Unaudit
ed)
For the
Three
Months
For the
Year
Ended
December 31,
Ended
December
31,
1996
1995
1996
1995
Revenue from home sales $7,269
$12,281 $19,591
$71,317
Cost of homes sold 7,001
11,847 18,260
61,836
Gross profit 268
434 1,331
9,481
Selling and marketing
expenses 1,024
1,765 3,039
8,034
General and administrative
expenses 472
763 2,066
3,825
Total 1,496
2,528 5,105
11,859
Operating loss (1,228)
(2,094) (3,774)
(2,378)
Other income 4
128 77
353
Sale of divisions - net --
31 --
31
Mortgage brokerage loss - net --
(11) --
(355)
Provision for write-down of
real estate (785)
(11,043) (785)
(11,043)
Loss before minority partners'
share and provision (benefit)
for income taxes (2,009)
(12,989) (4,482)
(13,392)
Minority partners' share (211)
-- (214)
--
Loss before provision
(benefit) for income taxes(1,798)
(12,989) (4,268)
(13,392)
Provision (benefit)
for income taxes --
2,446 --
2,284
Net loss $(1,798)
$(15,435) $(4,268)
$(15,676)
Net loss per common share
(restated for
reverse stock split) $(1.25)
$(11.47) $(3.01)
$(11.68)
Weighted average number
of common shares
outstanding (restated for
reverse stock split ) 1,437,096
1,346,218 1,417,794
1,341,582
Sales, closings and backlog information
is as follows:
For the
Three
Months
For the
Year
Ende
d
Dece
mber
31,
Ende
d
December 31,
1996
1995
1996
1995
Homes closed 53
117 144
595
Net new orders 42
74 149
558
Number of homes in backlog --
-- 82
77
Aggregate sales value of backlog --
-- $10,316,000
$10,833,000
SOURCE Inco Homes Corporation/CONTACT: Ira C. Norris,
President and CEO of Inco Homes Corporation, 909-981-8989/
Oklahoma Insurance Commissioner Files A Petition Against
ST. PETERSBURG, Fla., April 15, 1997 - Yesterday, the
insurance commissioner of the state of Oklahoma received approval
from the Oklahoma County District Court to temporarily seize
control of the operations of Mid- Continent Life Insurance
Company, a subsidiary of Florida Progress Corporation (NYSE:
FPC).
The action taken by the insurance commissioner is known as
judicial rehabilitation. Judicial rehabilitation is similar to a
Chapter 11 bankruptcy, which is designed to rehabilitate a
company, then return it to normal operations.
Florida Progress has previously stated that Mid-Continent is
not a good long-term fit and that Florida Progress intends to
rationally exit this business. Jeffrey R. Heinicka, Senior Vice
President and Chief Financial Officer, said,
"Mid-Continent's earnings in 1996 were $1.9 million, which
represent less than one percent of Florida Progress' consolidated
earnings. In addition, the life insurance unit does not pay any
dividends to Florida Progress. The company's equity investment in
Mid-Continent was approximately $85 million at March 31,
1997."
The insurance comissioner's petition stated that a significant
number of complaints from policyholders had been received over
the prospect of Mid- Continent raising premiums. The petition
also alleged that Mid-Continent's policy reserves are
understated.
A hearing is set for May 14, 1997 in Oklahoma City for Mid-
Continent to appear before the court to show cause why an order
of rehabilitation should not be entered against the insurance
company and why a receiver should not be appointed for
Mid-Continent. Florida Progress and Mid-Continent expect to meet
with the insurance commissioner before the court hearing date in
an attempt to resolve the matter without judicial action.
Management of Florida Progress and Mid-Continent expressed
surprise and disappointment with the sudden action taken by the
insurance commissioner, particularly given the ongoing
discussions between Mid-Continent and the insurance commissioner.
In December 1996, Florida Progress had announced restructuring
plans for the operations of Mid-Continent, as well as a plan to
address the pricing issues with its low-priced death benefit
product.
The company has been forthright with the insurance department
in reviewing its business strategy and the need to begin an
orderly process to reduce policy dividends and increase premiums.
Mid- Continent believed the meetings with the department had been
productive and positive.
Florida Progress is a Fortune 500 diversified utility holding
company with assets of $5.3 billion. Its principal subsidiary is
Florida Power, the state's second-largest electric utility with
about 1.3 million customers. Diversified operations include coal
mining, marine operations, rail services and life insurance.
SOURCE Florida Progress Corporation /CONTACT: Phil Dean,
Florida Progress Corporation, 813-866-5779/
Class Action Filed Against Sears, Roebuck
And Co., Pomerantz Haudek Block & Grossman Announces
NEW YORK, NY - April 15, 1997 - The law of firm of Pomerantz
Haudek Block & Grossman and Law Office of Klari Neuwelt,
pursuant to Section 21D(a)(3)(A)(i) of the Securities Exchange
Act of 1934, hereby give notice that a class action complaint has
been filed in the United States District Court for the Northern
District of Illinois on behalf of purchasers of Sears, Roebuck
and Co. ("Sears" or the "Company") (NYSE: S)
common stock during the period January 30, 1997 through April 10,
1997, inclusive (the "Class Period"), and were damaged
thereby.
The Complaint charges that the Company violated the federal
securities laws by, inter alia, materially misleading investors
by failing to disclose that it could be forced to return upwards
of $412 million to certain of its Sears credit card customers due
to the illegal collections efforts of Sears employees, which
violated the United States Bankruptcy Code. Specifically, the
Complaint alleges, among other things, that beginning in 1992, it
was the business practice of Sears to hire commissioned
"Sears Representatives," whose function it was to
frequent the bankruptcy courts with the purpose of coercing
Chapter 7 debtors (out of the presence of their attorneys) into
signing agreements reaffirming the debts they owed to Sears.
Further, to avoid the scrutiny of the bankruptcy courts and the
likelihood that such reaffirmation agreements would not be
approved, Sears failed to file these reaffirmations with the
courts, in violation of the Bankruptcy Code.
The existence of Sears' unlawful scheme, and the material
impact it would have on the Company, began to be revealed to the
public on April 10, 1997, when the Company issued a press release
and Form 8-K announcing that the Company was going to repay
upwards of $412 million to Chapter 7 bankruptcy debtors
nationwide whose "debt reaffirmations" were obtained
illegally. In response to this disclosure, the market price of
Sears common stock declined substantially, with the Company
losing $1.5 billion in market capitalization.
Plaintiff, represented by the law firm of Pomerantz Haudek
Block & Grossman, Law Office of Klari Neuwelt and Much
Shelist Freed Denenberg & Ament, P.C., seek to recover
damages on behalf of the Class.
Pomerantz Haudek Block & Grossman is one of the nation's
foremost specialists in corporate, securities and antitrust class
litigation. The firm was founded by the late Abraham L.
Pomerantz, one of the "pioneers who developed the class
action/derivative action field." New York Law Journal
(August 1, 1983). Mr. Pomerantz rose to national prominence as a
"champion of the small investor" and a "battle
against corporate skullduggery." Robert J. Cole, Class
Action Dean, The National Law Journal, Vol. 1 No. 2 at 1 (Sept.
25, 1978).
For more than 50 years, the firm has specialized in
representing victims of securities frauds, breaches of fiduciary
duty, corporate mismanagement, and price fixing conspiracies.
Law Office of Klari Neuwelt and Much Shelist Freed Denenberg
& Ament, P.C., also specialize in similar litigation.
If you are a member of the Class described above, you may, not
later than sixty days from today, move the Court to serve as lead
plaintiff of the Class. However, in order to serve as lead
plaintiff, you must meet certain legal requirements.
For further information, please contact plaintiff's counsel,
Stanley M. Grossman or Michael A. Schwartz of Pomerantz Haudek
Block & Grossman, 888-4- POMLAW, or via e-mail at
pomerantzpomlaw.com/
SOURCE Pomerantz, Haudek, Block & Grossman /CONTACT:
plaintiff's counsel, Stanley M. Grossman or Michael A. Schwartz
of Pomerantz Haudek Block & Grossman, toll-free at
888-4-POMLAW, or pomerantzpomlaw.com/