Harvard Industries, Inc. Reports Third
Quarter Results
TAMPA, Fla., July 31, 1997 - Harvard Industries, Inc.,
(Debtor-In- Possession "DIP"), a major producer of OEM
automotive parts and accessories which, together with
substantially all of its subsidiaries, filed a voluntary petition
for relief under chapter 11 of the United States Bankruptcy Code
on May 8, 1997, in the United States District Court for the
District of Delaware, today reported on a going concern basis
financial results which do not reflect reorganization or
liquidation values. Consolidated net sales amounted to
$217,914,000 for the three months ended June 30, 1997, compared
with $222,300,000 for the three months ended June 30, 1996.
Consolidated net sales for the nine months ended June 30, 1997
and 1996 amounted to $614,401,000 and $633,657,000, respectively.
In connection with the chapter 11 filing, the Company
discontinued the accrual of interest expense on its senior notes
($300,000,000 face value). Accordingly, for the three and nine
month periods ended June 30, 1997, interest expense attributable
to the senior notes of $5,102,000 (May 8, 1997 through June 30,
1997) was not accrued. In addition, the Company discontinued the
accrual of dividends and accretions on the Company's 14 1/4% PIK
preferred stock. As a result, for the three and nine month
periods ended June 30, 1997, dividends and accretions in the
aggregate amount of $2,530,000 (May 8, 1997 through June 30,
1997) were not accrued.
After deducting accrued dividends and accretions relating to
the Company's 14 1/4% PIK preferred stock of $1,694,000 (April 1,
1997 through May 8, 1997) and $3,711,000 for the quarters ended
June 30, 1997 and 1996 respectively, the consolidated net loss
for the quarter ended June 30, 1997 attributable to common shares
amounted to $29,985,000, or a net loss of $4.27 per common share,
compared with a consolidated net loss of $14,808,000, or a net
loss of $2.12 per common share, for the quarter ended June 30,
1996.
After deducting accrued dividends and accretions relating to
the Company's 14 1/4% PIK preferred stock of $10,142,000 for the
nine months ended June 30, 1997 and $11,133,000 for the nine
months ended June 30, 1996, the consolidated net loss for the
nine months ended June 30, 1997 attributable to common shares
amounted to $236,755,000, or a net loss of $33.73 per common
share. This compares with a consolidated net loss of $44,916,000,
or a net loss of $6.42 per common share, for the nine months
ended June 30, 1996.
The Company's operating results for the third quarter ended
June 30, 1997 continue to be adversely affected by negative
operating results at its Doehler-Jarvis, Harman Automotive and
Harvard Interiors operating units.
The Company reported that it is continuing to pursue the sale
of its Doehler-Jarvis subsidiary, as well as its Harman
Automotive subsidiary and its Harvard Interiors division. Harvard
has engaged Stump and Co., investment advisors, to dispose of the
Harvard Interiors division. The Company received an unsolicited
proposal, which it is evaluating and negotiating, with respect to
the Material Handling Division of Kingston-Warren. If a
transaction for the sale of Harman Automotive is not consummated,
the Company intends to review the feasibility of liquidating such
subsidiary.
The operating units designated for sale or disposition
contributed substantially to the Company's consolidated losses
for the three and nine months ended June 30, 1997. For the three
and nine months ended June 30, 1997 those operating units
reported net sales of $96,544,000 and $279,401,000, and incurred
losses of $10,755,000 and $34,100,000 (excluding interest
expense, other income (expense) and impairment of assets
write-offs; offset by the material handling division's operating
income).
Consolidated EBITDA (earnings before interest expense, taxes,
depreciation and amortization and the non-cash portion of charges
related to the recognition of post retirement benefits other than
pensions) totaled $9,390,000 for the two months ended June 30,
1997. Pursuant to the DIP financing agreement, the Company was
required to achieve cumulative consolidated EBITDA of $5,200,000
for such period. Consolidated EBITDA amounted to $9,168,000 for
the three months ended June 30, 1997 and was $13,723,000 for the
nine months ended June 30, 1997.
As has been the case historically, the Company's fourth
quarter will be adversely affected due to customer plant
shutdowns for vacations and change- over to new models. The
Company expects to be in compliance with the cumulative
consolidated EBITDA covenant of $11,000,000 provided in the DIP
Financing Agreement for the five months ending September 30,
1997. With respect to the covenant in the DIP financing agreement
relating to a $10,000,000 limitation on capital expenditures for
the period May 8, 1997 to September 30, 1997, the Company is
currently in discussions with the agent for the DIP lending
syndicate to obtain the necessary consent to exceed the
$10,000,000 limitation. Capital Expenditures for the period May
8, 1997 to June 30, 1997 amounted to approximately $6,000,000.
While there is no assurance that such consent will be obtained,
the Company expects to receive such consent.
At June 30, 1997, the amount borrowed by the Company under its
DIP revolving credit line was to $3,932,000, the letters of
credit outstanding were to $12,222,000 and the DIP term loan was
$65,000,000, of which $9,750,000 is due within one year from June
30, 1997. The revolver balance was reduced from $40,244,000 on
May 8, 1997, due to the timing of cash collections at the end of
the month and due to certain suppliers extending credit terms to
the Company. The Company believes the DIP financing will enable
the Company to continue normal operations during the chapter 11
proceedings.
At June 30, 1997, post petition accounts payable amounted to
$28,797,000. As of July 28, 1997, borrowings under the revolving
credit aggregated $2,747,000 and letters of credit outstanding
amounted to $12,289,000.
This release contains forward-looking statements. Additional
written or oral forward-looking statements may be made by the
Company from time to time, in filings with the Securities and
Exchange Commission, or otherwise. Such forward-looking
statements are within the meaning of that term in Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements may include, but not be
limited to, projections of revenues, income or losses, covenants
provided for in the DIP financing agreement capital expenditures,
plans for future operations, financing needs or plans, plans
relating to products or services of the Company, as well as the
assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified.
Consequently, future events and actual results could differ
materially from those set forth in, contemplated by, or
underlying the forward-looking statements. Other factors that
could contribute to or cause such differences include the effects
of the bankruptcy filing upon suppliers, vendors and customers,
unanticipated increases in launch and other operating costs, and
a reduction in, and inconsistent demand for, passenger cars and
light trucks.
Harvard Industries, Inc., through its subsidiaries, designs,
develops and manufactures a broad range of components for
original equipment manufacturers, producing cars and light trucks
in North America and abroad.
HARVARD
INDUSTRIES, INC.
(DEBTOR-IN-POSSESS
ION)
CONSOLIDATED
BALANCE SHEETS
JUNE 30, 1997 AND
SEPTEMBER 30, 1996
(In thousands of
dollars)
June 30,
September
30,
1997
1996
ASSETS
(Unaudited)
(Audited)
Current assets:
Cash and cash equivalents $4,308
$1,107 Accounts receivable,
net 86,345 99,581
Inventories 55,239
53,901 Prepaid expenses and
other
current assets 3,224
1,637
Total current assets 149,116
156,226
Property, plant and equipment,
net 273,080
300,673
Intangible assets, net 4,813
127,250 Other assets, net
24,244 33,556
$451,253
$617,705
LIABILITIES AND SHAREHOLDERS'
DEFICIENCY
Current liabilities:
Current portion of Debtor-in-possession
(DIP) loans $13,682
$---
Current portion of long term
debt 1,587
1,487
Accounts payable 28,797
89,073 Accrued expenses
56,376 66,949
Income taxes payable 2,361
5,875 Total current
liabilities 102,803
163,384
Liabilities subject to
compromise 397,236
---
Long-term debt 74,332
359,116 Postretirement
benefits other
than pensions 105,031
100,464
Other 29,667
25,970 Total liabilities
709,069 648,934
14 1/4% Pay-In-Kind Exchangeable
Preferred Stock, (At June 30, 1997 -
includes $10,142 of undeclared
accrued dividends) 124,637
114,495
Shareholders' deficiency:
Common Stock, $.01 par value;
30,000,000 shares authorized;
shares issued and outstanding:
7,026,437 at June 30, 1997 and
7,014,357 at September 30,
1996 70
70
Additional paid-in capital 32,135
42,245 Additional minimum
pension
liability (1,767)
(1,767)
Foreign currency translation
adjustment (1,970)
(1,964)
Accumulated deficit (410,921)
(184,308) Total shareholders'
deficiency (382,453)
(145,724)
Commitments and contingent
liabilities $451,253
$617,705
HARVARD
INDUSTRIES, INC.
(DEBTOR-IN-POSSES
SION)
CONSOLIDATED STATEMENTS OF
OPERATIONS
THREE AND NINE MONTHS ENDED
JUNE 30, 1997 AND 1996
(Unaudited
)
(In thousands of dollars, except
share and per share
data)
Three months
ended Nine
months
ended
June 30, June
30, June 30,
June 30,
1997
1996 1997
1996
Sales $217,914
$222,300 $614,401
$633,657
Costs and expenses:
Cost of sales 211,609
208,275 612,043
593,051
Selling, general and
administrative 10,832
10,335 35,422
32,534
Interest expense
(contractual interest of
$ 13,924 and $ 38,196
for the three
and nine months
of 1997) 8,822
10,918 33,154
31,279
Amortization of goodwill 396
2,582 8,052
7,746
Other (income) expense,
net 947
535 2,744
629
Impairment of long-lived
assets ---
--- 134,987
---
Total costs and expenses 232,606
232,645 826,402
665,239
Loss before reorganization
items and income
taxes (14,692)
(10,345) (212,001)
(31,582)
Reorganization items (13,232)
--- (13,232)
---
Loss before and income
taxes (27,924)
(10,345) (225,233)
(31,582)
Provision for income
taxes 367
752 1,380
2,201
Net loss $(28,291)
$(11,097) $(226,613)
$(33,783)
PIK preferred dividends and
accretion ( contractual $ 4,224
and $ 12,672 for the three
and nine months
of 1997) $1,694
$3,711 $10,142
$11,133
Net loss attributable to
common
shareholders $(29,985)
$(14,808) $(236,755)
$(44,916)
Primary per common and common
equivalent share:
Loss per common and common
equivalent share $(4.27)
$(2.12) $(33.73)
$(6.42)
Weighted average number of
common and common
equivalent shares
outstanding 7,024,080
6,999,407 7,018,778
6,997,157
HARVARD INDUSTRIES,
INC.
(DEBTOR-IN-POSSESSI
ON)
CONSOLIDATED STATEMENTS OF
CASH FLOWS
NINE MONTHS ENDED JUNE 30,
1997 AND 1996
(Unaudited)
(In thousands of
dollars)
Nine
months
ended
June 30,
June 30,
1997
1996
Cash flows related to
operating activities:
Loss from continuing
operations before
reorganization items $(213,381)
$(33,783)
Add back (deduct) items
not affecting cash
and cash equivalents:
Depreciation and amortization 47,997
40,875 Impairment of
long-lived
assets 134,987
---
Loss on disposition of
property, plant and
equipment and property
held for sale 1,769
918
Postretirement benefits 5,145
5,768 Write-off of
deferred
debt expense 1,792
---
Senior notes interest
accrued not paid 9,728
---
Changes in operating assets
and liabilities of
continuing operations,
net of effects from
acquisitions and
reorganization items:
Accounts receivable 13,236
(16,024) Inventories
(1,338) 879
Other current assets (1,587)
(376) Accounts payable
(60,704) (2,006)
Accounts payable prepetition 82,246
--- Accrued expenses and
income taxes payable (12,992)
(12,281)
Other noncurrent liabilities 7,126
(986)
Net cash used in
continuing operations
before reorganization items 14,014
(17,016)
Net cash used by
reorganization items (1,224)
---
Net cash used in
continuing operations 12,790
(17,016)
Cash flows related
to investing activities:
Acquisition of
property, plant and
equipment (30,540)
(28,560)
Cash flows related to
discontinued operations 212
3,541
Proceeds from disposition
of property, plant and
equipment 622
663
Net change in other
noncurrent accounts (490)
585
Net cash used in
investing activities (30,196)
(23,771)
Cash flows related to
financing activities:
Net payments under
financing/credit agreement (38,834)
31,000
Net borrowings under
DIP financing agreement 68,931
---
Deferred DIP financing costs (2,200)
--- Proceeds from sale
of
stock/exercise of stock options 32
37
Repayments of long-term debt (1,099)
(2,074) Pension fund
payments pursuant
to PBGC settlement agreement(4,500)
(4,500)
Payment of EPA settlements (1,723)
(2,493)
Net cash provided by
financing activities 20,607
21,970
Net increase (decrease)
in cash and cash equivalents 3,201
(18,817) Beginning of period
1,107 19,925
End of period $4,308
$1,108
SOURCE Harvard Industries, Inc./CONTACT: Joseph J. Gagliardi,
Harvard Industries, 813-288- 5000; or James B. Strenski, Public
Communications, 813-226-2772/
Delta Petroleum Corporation and the Trustee in Bankruptcy for
Agreement
DENVER, CO--July 31, 1997--Delta Petroleum
Corp.("Delta") (NASDAQ:DPTR); (FRANKFURT STOCK
EXCHANGE:DPE) announced today that the previously announced
agreement among Delta, Snyder Oil Corp. ("SOCO"), and
the Trustee in Bankruptcy for Underwriters Financial Group, Inc.
("UFG") dated May 23, 1997 has been approved by the
Bankruptcy Court.
The effectiveness of the May 23, 1997 agreement will allow
Delta to remove approximately $2,670,000 in current liability
from its balance sheet thereby adding a like amount to Delta's
shareholders' equity.
The accompanying pro forma combined, condensed Consolidated
Balance Sheet combines Delta's condensed Consolidated Balance
Sheet at March 31, 1997 and the effect of the agreement with
Delta, SOCO and UFG as if the agreement had been signed and
approved by the UFG Bankruptcy Court on March 31, 1997.
The pro forma combined, condensed Consolidated Balance Sheet
should be read in conjunction with the historical financial
statements of Delta.
Pro Forma Combined, Condensed
Consolidated Balance Sheet
March 31,
Proforma
Proforma
1997
Adjustments
Combined
(Unaudited)
(Unaudited)
(Unaudited)
Assets
Current assets $ 949,916
-- 949,916 Property and Equipment (net)
9,530,924 -- 9,530,924 Other
assets 869,815 --
869,815 Total assets
11,350,655 -- 11,350,655
Liabilities
Current liabilities 3,746,822
(2,699,642) 1,077,180 Long term debt
-- -- -- Total
Liabilities 3,746,822
(2,669,642) 1,077,180
Pro
for
ma
Pro
for
ma
March 31, 1997
Adjustments
Combined
(Unaudited)
(Unaundited)
(Unaudited)
Shareholders' Equity
Preferred Stock --
-- -- Common Stock
51,376 921 52,297 Addition
Paid
in Capital 22,273,379
2,668,721 24,942,100
Other equity 28,374
-- 28,374 Accumulated deficit
(14,749,296) -- (14,749,296)
Total Stockholders'
Equity $ 7,603,833
2,669,642 10,273,475
Delta Petroleum Corporation is an oil and gas exploration and
development company based in Denver, Colorado. Delta's current
activities include continued development of its producing
properties in Wyoming's Wind River Basin, Oklahoma's Anadarko
Basin, and Colorado's Piceance Basin. Delta is also participating
in 3D seismic programs and drilling in the Sacramento Basin and
preparing
for the development of its proved undeveloped federal units
located offshore California. To request a copy of the Company's
current Form 10-QSB and for further information contact David
Castaneda at 303/293-9133.
CONTACT: Delta Petroleum Corporation David Casteneda,
303/293-9133
Discovery Zone Answers Questions
Surrounding Trading of Old Common Stock
FT. LAUDERDALE, Fla.--July 31, 1997--On July 18, 1997, the
Third Amended Joint Plan of Reorganization (the "Plan")
of Discovery Zone(R), Inc. (the "Company") was
confirmed by the United States Bankruptcy Court for the District
of Delaware and on July 29, 1997, the Plan became effective.
Pursuant to the Plan, all of the existing Common Stock of the
Company was cancelled and no longer has any value. Accordingly,
the old Common Stock (ZONEQ) no longer represents an economic or
beneficial interest in the Company.
Discovery Zone is the leading owner and operator of children's
entertainment centers in North America with 208 locations across
the United States, Canada and Puerto Rico. Discovery Zone
features soft-play areas, exciting activities and a variety of
participatory games and attractions where children two through
eleven years old can play at their own skill level. Discovery
Zone...where kidz wanna be.
CONTACT: Ketchum Public Relations, New York MaryBeth Clayton,
908/446-1566 Seth Eisen, 212/448-4349
Montgomery Ward Receives Approval for
$1 Billion DIP Financing
CHICAGO, IL - July 31, 1997 -
Incorporated announced today that it has received formal approval
from the United States Bankruptcy Court for its full $1 billion
Debtor-in-Possession (DIP) financing. The $1 billion facility is
being financed by GE Capital Services. The DIP financing facility
was fully supported by the Creditor's Committee of Montgomery
Ward without objection.
"The $1 billion DIP facility allows us to continue normal
business operations, and ensure a steady flow of fresh
merchandise which supports our efforts to increase sales and
restore Montgomery Ward to profitability," said Roger Goddu,
Chairman and Chief Executive Officer of Montgomery Ward. "We
now will move aggressively to recapture our customer base and
implement our new merchandise strategy."
Montgomery Ward filed a voluntary petition for reorganization
under Chapter 11 of the U.S. Bankruptcy Code on July 7, 1997. The
Company is the largest privately held retailer in the United
States, it operates a chain of 400 stores in 43 states.
SOURCE Montgomery Ward & Co., Incorporated /CONTACT:
Michael Kempner, mkempnermww.com, or Carreen Winters,
cwintersmww.com, both of MWW/Strategic Communications, Inc.
Public Relations, 201-507-9500, for Montgomery Ward/
Montgomery Ward Announces First
Steps in Reorganization
CHICAGO, IL - July 31, 1997 -
Incorporated announced today that it has filed papers with the
United States Bankruptcy Court seeking approval to exit its
"non- core" specialty retail store business - Lechmere,
Home Image by Lechmere and Electric Avenue & More.
Lechmere, a wholly-owned subsidiary of Montgomery Ward, was
acquired by Montgomery Ward in 1994. The specialty retailer of
appliances, electronic equipment and products for the home,
operates 33 stores throughout New England as well as in New York,
Michigan, Wisconsin and Alabama. Montgomery Ward introduced the
Electric Avenue & More specialty stores in 1994. There are
currently eleven of these appliance, electronics and furniture
stores located in the Midwest, Kentucky and South Carolina.
The proposed restructuring would affect approximately 3,200
Lechmere associates, and about 700 associates employed by
Electric Avenue & More. Montgomery Ward will endeavor to
offer reassignment in other Montgomery Ward stores to as many
associates as possible. Those who are not offered or do not
accept reassignment will be offered severance and outplacement
assistance as appropriate.
"The decision to close these stores and the resultant job
losses has been a difficult one. However, we believe this is an
important first step as we formulate our plan of reorganization.
We are convinced that by shedding these non-core specialty
formats, the Company will be able to focus its energies on our
full-line Montgomery Ward stores," said Roger Goddu,
Chairman and Chief Executive Officer of Montgomery Ward.
"Our near term strategy for store closings is to shed
ancillary specialty store formats in order to gain the
efficiencies inherent with focusing on only full-line Wards
stores. It reduces the complexity in our business by reducing the
number of strategies from four to one. Furthermore, these
closings will have a significant impact on cutting losses.
We now have the opportunity to concentrate on our core
business and begin the implementation process of our new
merchandise strategy. We will emphasize providing affordable
fashion throughout Wards, encompassing a wide range of apparel to
include footwear, accessories and fine jewelry, and home-related
products that include domestics, furniture, appliances and home
entertainment. All will be geared to our newly identified
customer," said Goddu.
Montgomery Ward, the largest privately held retailer in the
United States, currently operates 400 value-driven stores in 43
states. After the proposed store closings, the Company will have
356 stores in 39 states.
SOURCE Montgomery Ward & Co., Incorporated /CONTACT:
Michael Kempner, mkempnermww.com, or Carreen Winters,
cwintersmww.com, both of MWW/Strategic Communications, Inc., 201-
507-9500, for Montgomery Ward & Co., Incorporated/
ACT Networks Receives Bankruptcy Court Approval to Acquire all
of the Assets of SourceCom, Inc.
CAMARILLO, Calif.--July 31, 1997--ACT Networks, Inc.
(NASDAQ:ANET) today announced that it has received bankruptcy
court approval to acquire all the assets of SourceCom, Inc.,
Westlake Village, California, for approximately $8.6 million in
cash.
The bankruptcy court has also set Monday, August 4, 1997 as
the closing date for this transaction. SourceCom is a high
technology company specializing in the development of high
density xDSL systems. The Company has developed two high
performance platforms to address the broadband access market.
SourceCom filed for protection under Chapter 11 of the U.S.
Bankruptcy Code on July 16, 1997.
Mr. Martin Shum, Chairman, President and Chief Executive
Officer of ACT Networks said, "There are three main benefits
from this acquisition. First, we believe we will be able to offer
our customers our own frame relay switch and therefore a more
integrated WAN solution.
"Additionally, we believe this acquisition will allow ACT
to enter the emerging telephony gateway server market, a market
which Frost & Sullivan has predicted will grow to over $1.8
billion by the end of 2001. Finally, SourceCom's existing and
potential OEM relationships for its Innerware G3 bridge/router
products should contribute to our revenues and broaden our
customer base."
As previously disclosed, ACT intends to expend significant
resources pursue the emerging telephony gateway market. ACT has
already made offers to approximately 30 SourceCom employees,
including 27 engineers. During fiscal 1996, SourceCom generated
approximately $6.1 million in revenues.
"SourceCom has developed two high performance platforms,
the Banc 6000 and the Banc 9000, to address the broadband access
market," stated Mr. Andre de Fusco, Vice President of
Business Development at ACT Networks. "The Banc 6000 is a
customer-premise, stand-alone high capacity IP-router already in
production and the Banc 9000 is a carrier-class high capacity
rack-mount IP-router still in the development phase. We believe
that with some engineering effort, the Banc 6000 can be converted
into an enterprise-level frame relay switch capable of supporting
higher than 50,000 packet per second throughput.
"We also believe that by incorporating ACT's call
control/fast packet voice technology and NetSpeak's IP/WAN
telephony applications into the NEBS-compliant Banc 9000, we will
be able to offer service providers worldwide a unique telephony
gateway server, capable of supporting many hundreds of voice
connections between the traditional PSTN and the emerging fast
packet services such as Internet, frame relay and ATM."
"We believe that the large deployment of PCs in homes and
offices and the availability of high quality web phones will
increasingly drive the public voice services away from the
existing PSTN to the growing fast packet networks," added
Mr. Shum. "This will create rapid demand for a system-level
telephony gateway server solution.
"We also believe that to be successful, this type of
product must possess three key attributes: first, voice
comprehension, packetization and call control capabalitites;
second, a fast packet telephony application support system and an
installed base of web phones; third, a highly scaleable and
carrier-class platform.
"ACT has the core competency in voice, and is working
with NetSpeak Corporation, a leading provider of real-time IP
telephony applications and web-phone client software, to
accomplish the second requirement. We believe that the Banc 9000
is the right platform for this application."
Giorgio Prosperi, President of SourceCom, commented "We
believe that the transaction with ACT is an excellent strategic
fit for our technology and personnel. We are excited about the
opportunities ahead and look forward to working closely
together."
This press release may contain forward looking statements
regarding future events and future financial performance of the
Company. These statements are only predictions and actual events
or results may differ materially as a result of a number of
factors including, without limitation, the factors discussed in
the Company's last Reports on Forms 10-K and 10-Q under
"Risk Factors" and the risks associated with the
possibility that the market for Company products will not
continue to develop or that the Company's products and
capabilities will not address emerging market needs; the effect
of increased competition; changing technologies, product
obsolescence and new product developments; the loss of
significant customers; the Company's ability to effectively
integrate acquisitions; the Company's ability to manage its
growth; international sales, tariff and regulatory matters;
reliance on third party suppliers and on resellers for
distributing its products; and the Company's ability to retain
key personnel and to adequately protect its proprietary
technology.
ACT Networks, Inc. develops, manufactures, and markets Frame
Relay wide-area network access products which support a broad
range of voice, data and integrated network applications. The
Company is focused on three strategic markets: enterprise
networks (ACTnet and NetPerformer), satellite networks (SkyFrame)
and carrier networks (FrameXchange and DynaStar).
End users and service providers worldwide use the Company's
products to build cost-effective, bandwidth efficient, easy-to-
manage wide area networks (WANs). The Company's products
incorporate advanced voice and data compression algorithms,
switching capabilities and proprietary integration technologies.
--30--ms/sf* eh
CONTACT: ACT Networks, Inc. Martin Shum, 805/388-2474
(Chairman & CEO) Andre de Fusco, 805/388-2474 or Morgen-Walke
Associates Chris Danne, Alex Williamson, Doug Sherk, 415/296-7383
David Sasso/Josh Passman, 212/850-5698 or 212/850-5600
Stratosphere Announces Resignation
of Directors
LAS VEGAS, Nev.-July 31, 1997--
announced today that Lyle Berman, Stanley Taube and Neil Sell
have resigned from the Company's board of directors. Each
resigning director is also a director of Grand Casinos, Inc.
Messrs. Berman, Taube and Sell had served on Stratosphere
Corporation's board since 1994. Mr. Berman had served as
Stratosphere Corporation's Chairman of the Board since June 1996.
Grand Casinos, Inc. notified Stratosphere Corporation that the
directors are resigning from Stratosphere Corporation's board to
avoid conflicts of interest arising from Stratosphere's response
relating to the restructuring proposal received from High River
Limited Partnership and American Real Estate Partners, L.P. in
which Stratosphere Corporation announced that its Independent
Board of Directors preliminarily determined the proposal to be
more favorable than the proposal previously made by Grand
Casinos, Inc.
Grand Casinos, Inc. also notified Stratosphere Corporation
that it intends to continue to explore with Stratosphere
Corporation and its Noteholders Committee alternatives for the
consensual reorganization, including the possibility of amending
its previous restructuring proposal. If an alternative consensual
arrangement cannot be reached, however, Grand stated it may
propose or participate in alternative plans of reorganization or
may terminate altogether its participation in Stratosphere
Corporation's bankruptcy process.
Stratosphere Corporation is a casino/hotel/entertainment
complex located at the north end of the Las Vegas Strip. The
complex is centered around the Stratosphere Tower, the tallest
free- standing observation tower in the United States.
The Private Securities Litigation Reform Act of 1995 provides
a "safe harbor" for forward-looking statements. Certain
information included in this press release (as well as
information included in oral statements or other written
statements made or to be made by the Company) contains statements
that are forward-looking, such as statements relating to plan for
future expansion and other business development activities as
well as other capital spending, financing sources and the effects
of regulation (including gaming and tax regulation) and
competition. Such forward-looking information involves important
risks and uncertainties that could significantly affect
anticipated results in the future and, accordingly, such results
may differ from those expressed in any forward-looking statements
made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, those relating to
development and construction activities, dependence on existing
management, leverage and debt service (including sensitivity to
fluctuations in the interest rates), domestic or global economic
conditions, activities of competitors and the presence of new or
additional competition, fluctuations and changes in customer
preferences and attitudes, changes in federal or state tax laws
of the administration of such laws and changes in gaming laws or
regulations (including the legalization of gaming in certain
jurisdictions). For more information, review the Company's
filings with the Securities and Exchange Commission, including
the Company's annual report on Form 10-K and certain registration
statements of the Company.
CONTACT: Stratosphere Corporation Tom Lettero - 702/383-5207