TWA Restructuring Plan Begins
ST. LOUIS, Mo--June 27, 1995--Shareholders of HREF="chap11.twa.html">Trans World Airlines agreed Monday to key aspects of a
restructuring plan that company officials say will make TWA profitable by the end of
The plan, approved during a special meeting of shareholders,
would wipe out about $500 million of TWA's approximate $1.7 billion
debt. Votes representing more than 18 million of the approximately
20 millionshares of stock supported the plan.
The shareholders also gave the company authority to issue as many
as 300 million new shares as part of a debt-for-equity swap.
Creditor approval of the restructuring plan is still necessary.
Votes from creditors are due by midnight Tuesday.
Jeffrey H. Erickson, TWA's chief executive officer, expects
creditors to also throw their support behind the proposal.
"The other alternative without the restructuring is that the
company wouldno longer exist," Erickson said.
Even if creditors approve the plan, the St. Louis-based TWA may
find itself in bankruptcy court for the second time in four years.
Some creditors want the restructuring approved by a bankruptcy
court judge to assure they'll get all they've been promised. Any
filing for bankruptcy protection is expected to be through a pre-
packaged bankruptcy plan in which creditor approval is obtained in
If creditors favor the plan, the filing could happen by late this
week, TWA spokesman John McDonald said. TWA officials said the plan
could be approved by the bankruptcy court in 30-35 days.
Mark Coleman, vice president for marketing for TWA, told
shareholders the restructuring plan make the company profitable for
the first time in years. Though the airline lost $258 million last
year, Coleman projected a $35 million profit by the end of this year
if the restructuring goes through. That figure does not include one-
time extraordinary charges related to the restructuring.
But Glenn Engel, an analyst at Goldman, Sachs & Co. in New York,
wasn't so sure that profitability would come so soon to the airline.
"Outside of St. Louis, TWA has become increasingly irrelevant to
the marketplace," Engel said. "I'm not sure if that's long-term
Returning to profitability would be quite a turnaround for the
nation's seventh largest airline, which had to battle just to make
it through the winter.
In the last year, TWA cut $250 million in costs. It dumped
service to six European cities and eliminated a domestic hub in
Atlanta. The company eliminated 3,600 jobs. Pilots, grounds crews
and flight attendants agreed to major wage and benefit concessions.
Reorganized Fingermatrix names entire new board of directors
DOBBS FERRY, N.Y.--June 27, 1995--A new board of
five directors has been named by
Fingermatrix Inc. (NASDAQ EBB:FINX), the pioneer electronic fingerprinting
equipment company which emerged from Chapter 11 bankruptcy April 17.
In the board's first official meeting, the senior management
team, headed by Tom Harding, president and chief executive officer,
was confirmed. This group had been in charge, reporting to the
bankruptcy trustee, since last December.
Members of the board include Harding; Seth M. Lukash, chairman
and chief executive officer of Tridex Corp., Westport, Conn., a
diversified manufacturer of electronic devices and systems listed on
the American Stock Exchange; Gordon Molesworth, a technology
investment consultant and communications professional; Lewis
Schiller, chairman and chief executive officer of Consolidated
Technologies Group, Ltd. and several of its subsidiaries, and Fred
Sonnenfeld, founder and senior partner in the New York law firm of
Sonnenfeld and Richman.
Fingermatrix invented and became a leader in electronic
fingerprinting technology, holding 19 patents in the field. After
long failing to achieve financial success under its founding
management, a stockholder group launched an effort two years ago to
replace it. Thereupon, the embattled management filed a Chapter 11
A trustee was appointed by the court to take over direction of
the company last Aug. 15, Harding and two technical leaders came
aboard Dec. 5, the court approved the company's Plan of
Reorganization March 31, and that Plan became effective April 17.
Formation of the board and its appointments of Kaye, Scholer,
Fierman, Hays & Handler as general counsel; Barnett, Kielson, Storch
& Co. as accountants and the American Stock Transfer Co. to handle
its securities, completes the company's reorganization under the
CONTACT: Molesworth Associates Inc., Green Valley, Ariz.
Gordon Molesworth, 520/625-0035
Corning Incorporated Reports Second Quarter Results
CORNING, N.Y.--June 27, 1995--Corning
Incorporated (NYSE:GLW) said today that its 1995 second quarter net income before
special charges totaled $108.8 million, or $0.48 per share. As
previously announced, Corning discontinued recognition of equity
earnings from Dow Corning Corporation beginning in the second
quarter of 1995. In the second quarter of 1994, Corning reported
net income of $111.4 million, or $0.54 per share, which included
$22.6 million, or $0.11 per share, of equity earnings from Dow
Corning. Adjusting for the elimination of Dow Corning's earnings
and before special charges, Corning's 1995 second quarter earnings
per share increased 12 percent from an adjusted $0.43 per share in
As previously announced, second quarter results include special
charges: $365.5 million after tax, or $1.62 per share, to fully
reserve Corning's investment in Dow Corning Corporation; and a
restructuring provision of $67 million ($40.5 million after tax), or
$0.18 per share. Including these charges, Corning reported a second
quarter net loss of $297.2 million, or $1.32 per share.
Sales increased 18 percent to $1.3 billion from 1994's second
quarter sales of $1.1 billion. Approximately one-third of the sales
increase resulted from acquisitions completed in 1994 in both the
opto-electronics and life sciences businesses.
Board Chairman James R. Houghton said, "Our performance in the
quarter was mixed. On the plus side, we continued to see solid
growth and strong profit improvement in most of our core businesses,
including opto-electronics, pharmaceutical testing services,
environmental products and video displays. On the other hand, our
results in clinical testing services and consumer products were
"In clinical testing," Houghton added, "margins improved
modestly over the first quarter but were well behind both last year
and our expectations, reflecting continued delays in cost-reduction
programs. In consumer products, the combination of a difficult
retail environment and several scheduled glass-furnace repairs
reduced margins significantly in the quarter."
For the second quarter 1995, equity earnings, excluding Dow
Corning, were up significantly, primarily due to strong performance
in the optical fiber equity companies.
Houghton concluded, "As we complete a successful first half, we
are on track to meet our financial objectives for the year."
Corning Incorporated is a Fortune 500 company which reports its
financial results in four segments: specialty materials,
communications, laboratory services and consumer products. For 1994
revenues totaled $4.8 billion. Dow Corning Corporation is a 50-
percent owned equity investment with The Dow Chemical Company.
Corning Incorporated and Subsidiary Companies
Consolidated Statements of Income
(In millions, except per-share amounts)
Twenty-Four Weeks Ended Twelve Weeks Ended
June 18, 1995 June 19, 1994 June 18, 1995 June 19, 1994
Net sales $2,413.9 $2,054.6 $1,297.8 $1,105.7
Royalty, interest and
dividend income 15.6 11.2 8.7 3.5
2,429.5 2,065.8 1,306.5 1,109.2
Cost of sales 1,530.1 1,318.2 816.5 696.1
Selling, general and
expenses 464.7 388.0 243.2 202.3
development expenses 79.8 79.3 41.2 41.1
other special charges 67.0 67.0
Interest expense 54.5 51.7 28.5 25.9
Other, net 23.5 8.8 8.1 3.0
Income before taxes
on income 209.9 219.8 102.0 140.8
Taxes on income 73.2 83.0 33.3 53.4
and equity earnings 136.7 136.8 68.7 87.4
Minority interest in
subsidiaries (29.5) (17.9) (18.2) (10.0)
subsidiary (6.3) (3.1)
Equity in earnings (losses)
of associated companies:
Other than Dow Corning
Corporation 29.3 15.6 20.9 11.4
Corporation (348.0) 34.9 (365.5) 22.6
Net Income (Loss) $ (217.8) $ 169.4 $ (297.2) $ 111.4
Earnings Per Common Share:
Net Income (Loss) $(0.97) $0.82 $(1.32) $0.54
Shares Outstanding 225.9 204.3 226.3 206.3
The accompanying notes are an integral part of these statements.
Corning Incorporated and Subsidiary Companies
Condensed Consolidated Balance Sheets
June 18, 1995 Jan. 1, 1995
Cash and short-term investments $ 194.5 $ 161.3
Receivables, net 999.2 947.1
Inventories 503.6 416.7
Deferred taxes on income and
other current assets 230.7 201.2
Total current assets 1,928.0 1,726.3
Other than Dow Corning
Corporation 377.2 352.0
Dow Corning Corporation 341.8
Plant and Equipment, Net 1,931.3 1,890.6
Goodwill and Other Intangible Assets, Net 1,435.6 1,408.0
Other Assets 318.1 304.0
Liabilities and Stockholders' Equity
Loans payable $ 134.5 $ 67.6
Accounts payable 174.5 258.3
Other accrued liabilities 802.2 748.3
Total current liabilities 1,111.2 1,074.2
Other Liabilities 663.1 643.6
Loans Payable Beyond One Year 1,520.3 1,405.6
Minority Interest in Subsidiary Companies 275.1 247.0
Convertible Preferred Securities
of Subsidiary 364.6 364.4
Convertible Preferred Stock 24.3 24.9
Common Stockholders' Equity 2,031.6 2,263.0
The accompanying notes are an integral part of these statements.
Incorporated and Subsidiary Companies
Notes to Consolidated Financial Statements
Quarter 2, 1995
(1) Earnings per common share are computed by dividing net income
dividends on Series B convertible preferred stock by the weighted
average number of common shares outstanding during the period. The
weighted average shares outstanding for the second quarter were 226.3
million and 206.3 million for 1995 and 1994, respectively,
and for the
first half were 225.9 million and 204.3 million for 1995 and 1994,
respectively. Preferred dividends of $0.5 million and $1.0 million
were declared in the second quarter and first half, respectively, in
both 1995 and 1994.
(2) Depreciation and amortization charged to operations during
half of 1995 and 1994 totaled $181.1 million and $154.9 million,
(3) On March 28, 1995, Corning issued $125 million of 30-year
with an interest rate of 8.3 percent due April 4, 2025. The proceeds
from these borrowings will be used for general corporate purposes,
including capital spending.
(4) On May 15, 1995, Dow Corning Corporation, a 50-percent owned
company, voluntarily filed for protection under Chapter 11 of the
United States Bankruptcy Code. As a result of this action, Corning
recorded an after-tax charge of $365.5 million, or $1.62 per
the second quarter to fully reserve its investment in Dow
addition, Corning discontinued recognition of equity earnings
Corning beginning in the second quarter of 1995. Corning recognized
equity earnings from Dow Corning totaling $12.3 millon, or $0.06 per
share, and $34.9 million, or $0.17 per share, in the first
first half of 1994, respectively, and $17.5 million, or $0.08 per
share, in the first quarter of 1995.
(5) During the second quarter 1995, Corning recognized a
charge totaling $67 million ($40.5 million after tax) or $0.18 per
CONTACT: Corning Inc., Corning
Kathryn C. Littleton, 607/974-8206
John H. Abrams, 607/974-8832
Investor Relations Contact:
Richard B. Klein, 607/974-8313
Katherine M. Dietz (607) 974-8217
O.C. bankruptcy hasn't affected
value of local companies, investment banker says
IRVINE, Calif.--June 28, 1995--Orange
County companies have not been tainted by their local government's
bankruptcy and are especially well positioned to benefit from the
current resurgence in merger and acquisition activity, a Southern
California investment banker said Tuesday.
``To be sure, some local vendors who provide goods and services
to local government are hurting,'' said Jourdi de Werd, managing
director of Greif & Co., a Los Angeles investment-banking firm
serving middle-market companies.
``And there has been speculation that reduced public services
and the possibility of tax increases would make Orange County
companies less attractive to potential buyers,'' de Werd said.
``But we haven't seen or heard anything to indicate that the
county's bankruptcy has adversely affected the value of, or demand
for, local companies.''
The occasion for de Werd's remarks was a luncheon seminar on
``Liquidity Options for Closely Held Companies.'' Sponsored by
Mellon Bank's Private Asset Management unit, the event was held at
the Four Seasons hotel in Irvine.
The number of mergers and acquisitions consummated in the first
quarter of this year is 35 percent higher than at the same time last
year at $73.2 billion, said de Werd, whose investment-banking firm
is representing an Orange County high-technology company that is in
the process of being sold.
Orange County companies are especially attractive to buyers
because most of them are young and many are in high technology or
other rapidly growing industries, de Werd said.
De Werd made three major points about the opportunities for
owners of closely held businesses:
- A partial sale can result in a significantly higher valuation
than a total sale;
- Buyout firms have dramatically lowered their targeted
internal rate of return for investment in closely held
- Owners of closely held companies can sell and defer taxes on
their gain for an indefinite period.
De Werd said low interest rates are forcing financial
institutions such as pension funds to look beyond traditional
investment vehicles to obtain better returns on their funds.
These institutions are well aware that leveraged buyout groups
have consistently been able to realize yields of 20 percent or
better. So they're allocating larger sums for partial or complete
buyouts of companies.
As a result, de Werd said, the buyout groups have raised an
estimated $16 billion of new equity capital in 1994 alone and can
leverage that with debt to $75 billion or $80 billion of total
De Werd said the current M&A boom is also being driven by the
three-year bull market in stocks.
``This market has created phenomenal amounts of equity value for
companies,'' de Werd said. ``So they can use their stock to make
acquisitions, rather than depending on debt financing.''
De Werd said that as a result of these factors, the pace of
activity in the M&A marketplace should further intensify in the next
12 months. Sellers will be big winners as a result of the strong
demand for acquisitions.
There's a shortage of quality companies, so the prices of the
good ones have been driven up. Not long ago, they could be bought
for four to six times cash flow. Now it's more like seven to nine
times cash flow.
De Werd added: ``If an owner is thinking of selling, now is the
time to sell.
``Although the economy appears to be slowing, most companies are
doing well. You always want to sell off strength, and that dictates
selling now or soon.''
CONTACT: The Roper Co., Santa Monica, Calif.
Richard F. Roper, 310/393-0622
BRADLEES OBTAINS INTERIM USE OF $100 MILLION IN DEBTOR-IN-POSSESSION
BRAINTREE, Mass.,--June 27, 1995--
Bradlees, Inc. (NYSE: BLE)today announced that the Company has obtained court
approval for the interim use of $100 million in Debtor-In-Possession financing.
The line of credit will be provided through Chemical Bank, which
has agreed to provide Bradlees with a total of $250 million in
Debtor-In Possession financing so that it can conduct its operations
and pay for merchandise shipments at normal levels, while it
prepares a reorganization plan. Authorization for the full $250
million line will be considered by the bankruptcy court at its
hearing on July 11.
The Company announced on Friday, June 23, 1995 that Bradlees and
its subsidiaries had filed for protection and would reorganize under
Chapter 11 of the U.S. Bankruptcy Code in the Southern District of
Bradlees, Inc. operates 136 discount department stores in Maine,
New Hampshire, Massachusetts, Connecticut, New York, New Jersey,
Pennsylvania, Rhode Island and Virginia. Bradlees' common stock is
listed and traded on the New York Stock Exchange under the symbol
"BLE". For additional Bradlees press releases, please call 1-800-758-
5804, extension 105750.
CONTACT: Aileen Gorman or Coleman Nee of Bradlees, 617-380-8370/
Value Merchants Inc. and Everything's A Dollar Inc. emerge from bankruptcy
MILWAUKEE, Wi--June 27, 1995--The Plan of
Reorganization of Value Merchants Inc.
(VUMIQ.BB), and its wholly-owned subsidiary Everything's A Dollar Inc. became
effective today resulting in the companies' emergence from bankruptcy.
The company currently operates 215 Everything's $1.00 stores nationwide.
``We expect to distribute certificates for 4,235,294 new shares
of common stock to our current shareholders and to our secured and
unsecured creditors within the next 60 days,'' stated Steven J.
Appel, president and chief executive officer. ``We have applied to
NASDAQ to list the company's new common stock,'' he said.
Appel stated that the company has successfully negotiated a
credit facility to finance ongoing operations. ``We will have $4
million of cash available beyond our planned needs as of June 27,
1995,'' he said. ``This provides substantial opportunity for
purchasing additional merchandise and should be a source of
confidence for our vendors regarding this company's credit
The Plan of Reorganization calls for issuing 85 percent of the
new common shares of stock to unsecured creditors in payment of
their claims and current shareholders will receive 5 percent of the
new common shares. Participants in the senior secured Debtor-In-
Possession loan are converting a significant portion of their debt
to subordinated secured debt, just under 10 percent of the company's
common shares, and subordinated unsecured long-term notes.
Fixture lenders will receive notes for approximately $8 million
payable over eight years secured by store fixtures and other
equipment in satisfaction of their claim of $23 million against the
company and unsecured bankruptcy claims of approximately $11
``Many businesses seek bankruptcy protection but cannot
reorganize sufficiently to emerge from the process and, as a result,
are liquidated,'' Appel stated. ``This company's emergence from
bankruptcy is a real tribute to all the parties in interest
including secured creditors, unsecured creditors, vendors,
shareholders, all the professionals and, most importantly, our
employees.'' Appel added, ``This has been a difficult and arduous
task with many competing interests, but from the beginning there has
been one common goal - to reorganize as a going concern. Although
much work remains,'' he said, ``there should be great pride in
achieving this significant milestone.''
CONTACT: Value Merchants Inc., Milwaukee
Gary I. Kastel, 414/274-2976
Cid Litfin, 414/274-2697