LOS ANGELES, Jan. 17, 1996 -- Teledyne, Inc. (NYSE:
TDY)
announced today that net income for the year ended December 31, 1995
was $162.0 million, or $2.88 per common share, compared to a net
loss of $8.4 million, or $0.15 per common share, for the same period
in 1994. Excluding an after-tax gain of $30.3 million on the sale of
its defense electronic systems business, income for the year 1995
increased 65 percent to $131.7 million, or $2.33 per common share,
compared to 1994 income of $79.6 million, or $1.43 per common share,
excluding after-tax charges of $88.0 million to resolve certain U.S.
government contracting issues. Sales from continuing operations
increased 15 percent to $2.56 billion for 1995 compared to $2.22
billion for the same period of 1994.
"We are pleased that Teledyne's 1995 income was up 65 percent
from the previous year. Also, sales in continuing businesses rose
across all segments, led by a 22 percent increase in specialty
metals. Our operating results reflect continued improvement in our
worldwide markets and the effectiveness of our business plans.
These increased earnings mean higher value for our shareholders,"
said William P. Rutledge, chairman and chief executive officer, and
Donald B. Rice, president and chief operating officer.
"Teledyne's platform for profitable growth is in place. We
continue to increase the Company's focus on technology-based
manufacturing and engineering businesses where we have strong market
positions. At year end, the Company acquired two businesses
complementing existing operations: Stellram Group, based in Europe,
manufacturers of high precision milling, boring and drilling systems
primarily for the European market; and Envases Comerciales, S.A., a
Costa Rican manufacturer of specialty packaging for pharmaceutical
and food companies throughout Central America and Mexico. These
acquisitions expand the geographic reach of existing Teledyne
businesses which already have strong positions in North American
markets," they added.
Net income for the fourth quarter of 1995 increased to $30.6
million, or $0.54 per common share, compared to $16.4 million, or
$0.30 per common share, for the same period in 1994. Excluding an
after-tax charge of $13.0 million to resolve certain U.S. government
contracting issues and the reversal of losses on fixed-priced
development and initial production contracts of $5.3 million, income
for the fourth quarter of 1994 was $24.1 million, or $0.43 per
common share. Sales from continuing operations for the fourth
quarter of 1995 increased 7 percent to $640.5 million from $598.2
million for the same period of 1994.
Results of Operations
Aviation and Electronics
Sales from continuing operations increased to $1.02
billion for
1995 from $882.0 million for 1994 and decreased to $229.7 million
for the fourth quarter of 1995 from $237.7 million for 1994. Sales
improvements occurred in development work on the United States' new
High Altitude Endurance Unmanned Aerial Surveillance/Reconnaissance
Vehicle (the Tier II Plus program), electromechanical relays for
commercial customers, airframe structures for the U.S. government,
marine seismic cables for the oil exploration industry, fabricated
products for the U.S. armed forces, and avionics for the commercia
aviation market. In addition, completion of a contract to provide
ground power generators to the U.S. Air Force increased sales $80
million for the year 1995 over 1994. In the 1995 fourth quarter,
decreased sales of piston engine rebuilds for the general aviation
market and lower shipments of fabricated products, aerial targets,
and certain other military unmanned aerial vehicles more than offset
the effect of the increases described above.
Operating profit from continuing operations increased to $102.7
million for 1995 from $84.6 million for 1994, excluding charges of
$88.8 million in 1994 to resolve certain U.S. government contracting
matters. Operating profit from continuing operations was $24.5
million for the 1995 fourth quarter compared to $25.3 million for
the same period of 1994, excluding the reversal of estimated losses
of $10.7 million in the 1994 fourth quarter related to fixed-priced
development and initial production contracts. Operating profit from
continuing operations included $8.4 million in the year 1995 and
$7.0 million in 1994 for similar reversals. Reduced losses on wire
and cable products, and increased sales and margins of
electromechanical relays and airframe structures contributed to the
operating profit for the year and fourth quarter of 1995. Operating
profit for both periods was adversely affected by lower sales and
margins on piston engines for the general aviation industry and
turbine engines for the U.S. government, and by increased
development costs for certain scientific instrument products.
Specialty Metals
Sales from continuing operations increased to $867.6
million in
1995 from $709.7 million in 1994 and increased to $225.2 million for
the fourth quarter of 1995 from $185.1 million for the same period
of 1994. These sales increases were due to both improvement in
worldwide automotive, commercial aerospace, and other industrial
markets, and to increased market penetration in such areas as thin-
rolled products, carbide cutting tools, specialty shapes and tubes,
and titanium alloys. In addition, zirconium sales increased for the
international power generation market due to a major customer's
three year buy in 1995.
Operating profit from continuing operations increased to $85.3
million for 1995 from $40.1 million for 1994 and increased to $18.4
million for the fourth quarter of 1995 from $8.4 million for the
same period of 1994, excluding a charge of $13.0 million to resolve
certain U.S. government contracting issues in the 1994 fourth
quarter. Operating profit for the year and fourth quarter of 1995
increased primarily due to higher sales and improved margins.
Operating profit was enhanced by strong performances in nickel-based
alloys, specialty shape and tube, thin rolled, and tungsten-based
products.
Operating profit for both periods was reduced by costs
associated with new facilities for the manufacturing and
distribution of thin- rolled products. These included a new high
capacity mill at New Bedford, Mass., and an international service
center in Taiwan. Decreased productivity in zirconium products
related to protracted labor negotiations (now settled) also reduced
operating profit. In addition, increased raw material costs and
their effect on last-in, first-out inventory valuations, and
research and development costs related to an automated real-time
inspection system for hot-rolled rod and bar products negatively
affected operating profit for both periods.
Industrial
Sales from continuing operations increased to $346.8
million for
1995 from $318.1 million for 1994 and increased to $95.9 million for
the fourth quarter of 1995 from $92.7 million for the same period of
1994. For the year and fourth quarter of 1995, sales improved in
nitrogen cylinder systems, metal stamping dies and plastic
compression molds for automotive and truck markets, crash fire
rescue vehicles for the U.S. Air Force, and material handling
equipment. Sales of material handling equipment increased during
both periods as a result of increased market penetration and the
January 1995 acquisition of the material handling business of Kooi
B.V. Kooi is a Netherlands company that is Europe's largest
supplier of truck-mountable, self-propelled material handlers. For
the year 1995, tank engine sales declined, principally in the fourth
quarter, and land combat vehicle development sales declined compared
to 1994.
Operating profit from continuing operations increased to $18.7
million for 1995 from $13.0 million for 1994 and decreased to $4.7
million for the fourth quarter of 1995 from $10.5 million for the
same period of 1994. Operating profit for 1995 increased primarily
due to a gain on sale of an industrial valve product line and
improved performance in metal stamping dies and plastic compression
molds. In addition, operating profit for the year and fourth
quarter of 1995 increased due to improved operating results of crash
fire rescue vehicles. Operating profit for both periods was reduced
by lower sales of tank engines, costs associated with the
integration and rationalization of Kooi product lines, plant
rationalization expenses, and decreased margins on certain machine
tools as a result of a labor dispute. Retiree medical expense
included in the operating results of this segment totalled $8.6
million in 1995 and $9.0 million in 1994.
Consumer
Sales from continuing operations increased to $326.6
million for
1995 from $307.6 million for 1994 and increased to $89.7 million for
the fourth quarter of 1995 from $82.7 million for the same period of
1994. Sales for the year and fourth quarter of 1995 increased for
commercial and residential heating systems, and for two new
products, Teledyne Water Pik's SenSonic(TM) Plaque Removal
Instrument and its Pour-Thru Water Filter(TM) device. However, the
weak Christmas season among retailers suppressed fourth quarter
sales throughout Teledyne Water Pik's product lines. Sales for the
year 1995 increased due to a third new product, the MAXX-PURE(TM)
ozone sanitizing system for swimming pools, while sales for pool
heaters decreased as a result of poor weather conditions and a
slowdown in spending on consumer durables. Operating profit from
continuing operations decreased to $18.7 million for 1995 from $21.5
million for 1994 and decreased to $6.5 million for the fourth
quarter of 1995 from $7.1 million for the same period of 1994. The
1995 and fourth quarter results were adversely affected by
advertising and start-up costs for the three new products and the
sales declines discussed above.
Corporate Expense
Corporate expense increased to $82.1 million for the year 1995
from $68.4 million for the same period of 1994 and increased to
$19.8 million for the fourth quarter of 1995 from $19.0 million for
the same period of 1994. Corporate expense increased for the year
1995 primarily due to legal and advisory fees associated with an
unsolicited merger proposal and ensuing proxy contest and increased
warranty expenses for closed businesses.
Pension Income
Teledyne's non-cash pension income recorded the amount by
which
the amortization into income of pension surplus and estimated return
on plan assets exceeded the current year's cost of providing
benefits. Pension income before tax increased to $80.7 million in
the 1995 year from $79.1 million for the same period of 1994 and
decreased to $20.2 million in the fourth quarter of 1995 from $22.5
million for the same period of 1994. The change in pension income
was a result of a higher expected return on pension assets and a
change in discount rate used to calculate the pension benefit
obligation partially offset by a change in mortality assumptions.
The fourth quarter of 1994 included a one-time pension curtailment
gain related to closed businesses.
Cash from excess pension assets of $17.5 million in 1995 and
$15.0 million in 1994 was transferred pre-tax under Section 420 of
the Internal Revenue Code from the Company's defined benefit pension
plans to the Company. The Internal Revenue Code permits transfers
annually of an amount not to exceed the Company's actual
expenditures on retiree health care benefits. While not affecting
reported operating profit, cash flow increased by the after-tax
effect of the transferred amount.
Other Income
In July 1995, the New Piper
Aircraft Company emerged from
bankruptcy with Teledyne having exchanged its major creditor
position for 24.2 percent ownership and an option to purchase an
additional 24.2 percent. As a result, Teledyne recognized a gain for
the year 1995 of $5.9 million, included in other income. Also
included in other income are gains, primarily from sale of excess
real estate, of $5.1 million for 1995 compared to $6.0 million for
1994.
Income Taxes
Provision for taxes in 1995 includes a reduction of $9.3
million
for the year and $2.5 million for the fourth quarter as a result of
revisions to prior years' estimated income tax liabilities.
Teledyne, Inc. is a technology-based manufacturing corporation
serving worldwide customers with commercial and government-related
aviation and electronics products; specialty metals for consumer,
industrial and aerospace applications; and industrial and consumer
products.
Teledyne, Inc. and Subsidiaries
(In millions)
Year Ended Quarter Ended
December 31, December 31,
1995 1994 1995 1994
Sales:
Aviation and electronics:
Continuing $1,015.4 $ 882.0 $229.7 $237.7
Discontinued - 148.5 - 41.3
1,015.4 1,030.5 229.7 279.0
Specialty metals:
Continuing 867.6 709.7 225.2 185.1
Discontinued 1.5 1.7 0.3 0.4
869.1 711.4 225.5 185.5
Industrial:
Continuing 346.8 318.1 95.9 92.7
Discontinued 9.9 23.6 1.8 4.5
356.7 341.7 97.7 97.2
Consumer:
Continuing 326.6 307.6 89.7 82.7
Discontinued - - - -
326.6 307.6 89.7 82.7
Total:
Continuing 2,556.4 2,217.4 640.5 598.2
Discontinued 11.4 173.8 2.1 46.2
$2,567.8 $2,391.2 $642.6 $644.4
Teledyne, Inc. and Subsidiaries
(In millions except per share amounts)
Year Ended Quarter Ended
December 31, December 31,
1995 1994 1995 1994
Operating Profit (Loss):
Aviation and electronics:
Continuing $102.7 $ (4.2) $ 24.5 $ 36.0
Discontinued - (35.8) - 3.1
Pension income 18.1 12.8 4.5 3.2
120.8 (27.2) 29.0 42.3
Specialty metals:
Continuing 85.3 27.1 18.4 (4.6)
Discontinued - 1.4 - (3.9)
Pension income 8.3 8.7 2.1 2.2
93.6 37.2 20.5 (6.3)
Industrial:
Continuing 18.7 13.0 4.7 10.5
Discontinued 0.6 (1.3) 0.2 (3.5)
Pension income 25.9 25.8 6.5 6.4
45.2 37.5 11.4 13.4
Consumer:
Continuing 18.7 21.5 6.5 7.1
Discontinued - (2.8) - 0.3
Pension income 0.2 (0.1) 0.1 (0.1)
18.9 18.6 6.6 7.3
Total Continuing 225.4 57.4 54.1 49.0
Discontinued 0.6 (38.5) 0.2 (4.0)
226.0 18.9 54.3 45.0
Corporate expense:
Salaries and benefits (23.0) (18.7) (6.9) (4.5)
Closed businesses' expenses (11.9) (8.4) (2.0) (2.2)
Other (47.2) (41.3) (10.9) (12.3)
Interest expense (42.3) (43.5) (10.8) (11.2)
Pension income 80.7 79.1 20.2 22.5
Other income 67.9 10.2 3.5 0.8
Income (Loss) Before Taxes 250.2 (3.7) 47.4 38.1
Provision for Taxes 88.2 4.7 16.8 21.7
Net Income (Loss) 162.0 (8.4) 30.6 16.4
Preferred Stock Dividends 1.6 - 0.7 -
Net Income (Loss) Applicable to
Common Shareholders $160.4 $ (8.4) $ 29.9 $ 16.4
Net Income (Loss) Per Common Share $ 2.88 $(0.15) $ 0.54 $ 0.30
Average shares - There were 55,656,827 and 55,778,014 shares of
common stock outstanding during the year and three months ended
December 31, 1995, respectively, and 55,446,296 and 55,455,347 for
the year and three months ended December 31, 1994, respectively.
Note - In January 1995, the Company sold substantially all of
its defense electronic systems business and related assets at a
pretax gain of $50.7 million, included in other income. Sales and
operating results for its defense electronic systems business for
1994, including charges of $35.0 million to resolve certain U.S.
government contracting issues, have been reclassified and presented
in discontinued results. In addition, sales and operating results
for prior periods have been reclassified for realignment of certain
business units and to conform with the December 1995 presentation.
SAN JOSE, Calif.--Jan. 17, 1996--Diamond
Multimedia Systems, Inc. (NASDAQ:DIMD) reported record revenues for
the quarter and year ended December 31, 1995.
For the quarter ended December 31, 1995, revenues increased 214
percent to $190.1 million, up from $60.6 million in the
corresponding prior year period. The Company's Supra Corporation
subsidiary, acquired in September 1995, accounted for approximately
18 percent of revenues or $34 million. The Company's SPEA Software
AG subsidiary, acquired in November 1995, accounted for $17 million
of revenues from the date of acquisition.
Gross margin for the quarter ended December 31, 1995 was 21%.
Gross margin was adversely affected by approximately two percentage
points, or seven cents per share, due to unexpected year-end
inventory adjustments.
For the quarter ended December 31, 1995, Diamond recorded net
income of $13.1 million or 40 cents per share, on 33.1 million
shares, before a one-time in-process technology write-off related to
the acquisition of SPEA Software AG of $38.0 million or $1.19 per
share. In the comparable period of 1994, the Company reported net
income of $5.5 million or 26 cents per share on 20.9 million shares.
For the year ended December 31, 1995, revenues were $467.6
million compared with $203.3 million for the previous year. Giving
effect to in-process technology write-offs of an aggregate of $76.7
million in connection with the SPEA and Supra acquisitions, the
Company reported a net loss of $41.3 million or $1.55 per share on
26.7 million shares.
Without the one-time write-offs, Diamond would have reported net
income of $35.4 million or $1.29 cents per share. For the
comparable period in 1994, Diamond reported net income of $20.1
million or 96 cents per share on 20.9 million shares.
On November 28, 1995, Diamond sold 3,150,000 shares of common
stock at $31.25 per share in a public offering, raising net proceeds
of approximately $93.6 million. The proceeds of the offering will
be used for general corporate purposes and for acquisitions and
acquisition-related expenses.
The Company has an outstanding offer to acquire href="chap11.hayes.html">Hayes
Microcomputer Products, Inc. that is currently being reviewed
by the
U.S. Bankruptcy Court in Atlanta, Georgia. Court hearings have been
scheduled through the end of January and the Company does not expect
a decision to be made before then. There can be no assurance the
Company's offer will prevail.
Diamond Multimedia
Diamond Multimedia designs, markets and supports high-
performance multimedia solutions for the PC and Macintosh markets.
Products include the Stealth, Viper and SPEA brands of graphics, CAD
and multimedia accelerators, Diamond EDGE 3D animation accelerators
and Supra fax/modems. Diamond also markets Internet kits including
ISDN adapters, as well as sound cards and multimedia upgrade kits.
Headquartered in San Jose, Diamond has marketing and technical
support facilities in Vancouver (Wash.), Tokyo, Starnberg (Germany),
Paris and Slough (U.K.) Diamond's products are sold through
regional, national and international distributors as well as to
major computer retailers, mass merchants and OEMs worldwide.
Diamond's common stock is traded on the NASDAQ National Market under
the symbol DIMD.
For more information on Diamond Multimedia at no cost, please
call 800/PRO-INFO.
Diamond Multimedia Systems, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Year Ended
(unaudited)
December 31, December 31,
1995 1994 1995 1994
Net sales $190,056 $60,572 $467,635 $203,297
Cost of sales 150,031 43,523 359,285 145,314
Gross profit 40,025 17,049 108,350 57,983
Research and development 4,103 1,224 10,665 3,696
Selling, general and
administrative 15,354 6,762 39,311 21,150
Amortization of intangibles 937 -- 937 --
Write-off of in process
technology 38,000 -- 76,710
--
Total operating expenses 58,394 7,986 127,623 24,846
Income (loss) from
operations (18,369) 9,063 (19,273) 33,137
Interest income (expense),
net 8 237 (1,291) 662
Other income, net 1,407 -- 1,357
--
Income (loss) before
provision for taxes (16,954) 9,300 (19,207) 33,799
Provision for income taxes 7,958 3,766 22,140 13,683
Net income (loss) ($24,912) $5,534 ($41,347) $20,116
Common shares and
equivalents 32,050 20,900 26,724 20,900
Net income (loss) per share ($0.78) $0.26 ($1.55) $0.96
Diamond Multimedia Systems, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
At Dec. 31, 1995 At Dec. 31, 1994
(unaudited)
ASSETS
Current assets:
Cash and short-term
investments $106,203 $72,922
Accounts receivable 90,640 20,462
Inventories 89,635 18,572
Deferred taxes and other
current assets 23,926 7,222
Total current assets 310,404 119,178
Fixed assets, net 10,152 1,676
Other assets 6,385
--
Goodwill and other intangibles,
net 15,925 --
Total assets $342,866 $120,854
LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Notes payable, current $713 $82,664
Bank lines of credit 25,545 --
Trade accounts payable and
other accrued liabilities 98,348 30,488
Income taxes payable -- 310
Total current liabilities 124,606 113,482
Long-term debt, net of current
portion 3,524 --
Subordinated promissory notes
payable -- 34,167
Deferred taxes 1,657
--
Total liabilities 129,787 147,629
Mandatorily redeemable
preferred stock -- 29,174
Stockholders' equity (deficit) 213,079 (55,949)
Total liabilities and
stockholders' equity
(deficit) $342,866 $120,854
IRVINE, Calif.--Jan. 17, 1996--Wonderware Corp.
(NASDAQ:WNDR) Wednesday reported its financial results for the
fiscal year ended Dec. 31, 1995.
These included record revenues for the fourth quarter and the
full year, but lower net income in the fourth quarter and a loss for
the full year, both due to unusual, non-recurring charges.
Revenues for the year ended Dec. 31, 1995, were a record
$55,010,933, an increase of 54 percent from the $35,705,280 in
revenues recorded in 1994. Income for the year before non-recurring
charges was $10,829,536; however, after the non-recurring charges,
the company reported a net loss of $14,301,667 for 1995. This
compared to net income of $7,575,337 for the prior year. On a per
share basis, this amounted to a loss of $1.13 for 1995, as compared
to net income of $.58 per share in 1994.
Revenues for the fourth quarter of 1995 were $16,202,277, an
increase of 47 percent from the $11,031,543 reported for the fourth
quarter of 1994. Net income for the quarter was $1,327,657
($2,770,921 before the non-recurring charges), as compared to the
$2,374,708 reported for the previous year. On a per share basis net
income was $.09 per share, compared to $.18 per share for the 1994
fourth quarter.
"The net loss reported for the year resulted from several
unusual non-recurring items," explained Lee Kim, acting chief
financial officer. "It includes the pre-tax write-off of $33
million of acquired in-process research and development costs that
we reported in the third quarter, which was related to our
acquisitions of EnaTec Software Systems and Soft Systems
Engineering. It also includes fourth quarter accruals related to
severance costs incurred in restructuring the company's executive
management; relocation costs; and costs associated with the
acquisition of assets from Professional Technology Management (PTM)
in South Africa."
"Most of the non-recurring charges were related to
acquisitions," said Roy H. Slavin, chairman, president and chief
executive officer. "We completed two major deals in the third
quarter. They have presented us with a situation where we have
continuing expenses for product development, sales and marketing
activities related to our manufacturing execution system (MES) and
batch process management products -- all without a currently
significant revenue stream. The same is true, but on a smaller
scale, with the database technology that we acquired from PTM during
the fourth quarter.
"We feel the ongoing operations of EnaTec and SSE will require
further investments in 1996, but that as the Wonderware InTrack MES
product and the Direktor batch product come on stream during the
year they will offset these expenses with increased revenue,"
Slavin said. "The database product acquired from PTM will become a
core technology within future products. Revenue associated with it
will begin with shipment of future generations of our entire factory
automation suite.
"As we have noted previously, we anticipate higher than historic
investments in R&D, sales, and marketing programs in 1996 as we
penetrate new markets for the MES and batch products," Slavin
added. "We feel the fundamentals of our business remain strong and
we are proceeding with implementation of our long term strategic
plans in our targeted markets."
The company noted that actual results for 1996 may differ
materially from the above forward-looking statements due to a number
of factors, including but not limited to delays in introduction of
products or enhancements, market acceptance of new products,
competition and pricing in the software industry, and seasonality of
revenues. These factors are more fully discussed in the company's
most recent quarterly report on Form 10-Q and annual report on Form
10-K.
Wonderware Corp. is the leading independent supplier of Windows-
based software for the industrial automation marketplace. Founded
in 1987, the company has headquarters in Irvine, Calif., and has
regional offices in the United States, Europe and Asia to provide
support to its worldwide distributor channel. -0-
WONDERWARE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Year ended
Dec. 31, Dec. 31,
1995 1994 1995 1994
(Unaudited) (Unaudited)
Total revenues $16,202,277 $11,031,543 $55,010,933
$35,705,280
Cost of sales 776,749 464,725 2,581,032
2,022,042
Gross profit 15,425,528 10,566,818 52,429,901
33,683,238
Operating expenses:
R&D 3,676,768 2,243,797 10,607,252
6,155,473
SG&A 9,117,909 5,292,293 29,114,618
17,755,308
Severance costs 1,319,624 1,319,624
Operating income
before acquired
R&D expenses 1,311,227 3,030,728 11,388,407
9,772,457
Acquired R&D - - 33,091,626
-
Operating income
(loss) 1,311,227 3,030,728 (21,703,219)
9,772,457
Other income, net 700,321 546,171 2,815,232
1,627,611
Income (loss)
before provision
for income taxes 2,011,548 3,576,899 (18,887,987)
11,400,068
Provision for
income taxes 683,891 1,202,191 (4,586,320)
3,824,731
Net income (loss) $1,327,657 $ 2,374,708 $(14,301,667)
$7,575,337
Net income (loss)
per common and
common
equivalent share $ 0.09 $ 0.18 $ (1.13) $ 0.58
Weighted average
common and common
equivalent shares 14,200,792 13,441,750 12,650,347
13,131,448
WONDERWARE CORP.
CONSOLIDATED BALANCE SHEETS
Dec. 31, Dec. 31,
1995 1994
ASSETS
Current assets:
Cash and cash equivalents $ 27,864,382 $ 20,147,748
Short-term investments 39,060,920 38,334,336
Accounts receivable, net 10,439,179 5,146,223
Inventories 460,663 378,347
Deferred tax assets 2,139,690 863,892
Prepaid expenses and other
current assets 948,387 525,036
Total current assets 80,913,221 65,395,582
Property and equipment, net 6,272,399 3,381,759
Investments 800,000 2,800,000
Noncurrent deferred tax assets 1,967,711
Other assets 408,265 35,541
Total assets $ 91,361,596 $ 71,612,882
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,532,721 $ 1,011,830
Accrued employee incentive
compensation 833,627 828,491
Accrued commissions 450,287 379,042
Income taxes payable 438,548 247,275
Accrued payroll and related
liabilities 2,939,677 734,616
Other accrued liabilities 2,090,756 1,768,082
Deferred revenue 1,234,640 894,405
Total current liabilities 9,520,256 5,863,741
Stockholders' equity:
Common stock 13,248 12,098
Additional paid-in capital 83,331,383 53,203,248
Unrealized gain (loss) on
short-term investments 192,698 (71,883)
Retained earnings (deficit) (1,695,989) 12,605,678
Total stockholders' equity 81,841,340 65,749,141
Total liabilities and
stockholders' equity $ 91,361,596 $ 71,612,882
LOS ANGELES---Jan. 17, 1996--Trimark Holdings
Inc. (NASDAQ/NNM:TMRK) Wednesday announced that it expects to report
a loss of approximately $4.5 million for the quarter ended Dec. 31,
1995, primarily due to writedowns following the poor performance of
the video acquisitions "Kids" and "Death Machine," a significant
reserve taken for the company's interactive CD-ROM game "The Hive"
and certain restructuring charges.
"While we are disappointed that the company will report the
first quarterly loss in its history," stated Chairman Mark Amin,
"the company continues to generate strong cash flow. Trimark has a
$25 million credit line with Bank of America and WestLB and no other
long-term debt.
"We need to address the rapidly changing realities of the
entertainment landscape. The difficulties which the video industry
faces from severe competition, cable television and direct broadcast
satellite are expected to continue for the foreseeable future.
"The company plans to continue to invest approximately $40
million in the acquisition and production of motion picture product
annually. The company is currently seeking to fill a newly created
position, President of Production, to oversee all acquisition,
development and production operations."
Lucie Guernsey, vice president of WestLB, said: "Unlike other
entertainment companies that have waited until they experienced
severe cash drains before restructuring, Trimark Holdings has taken
pro-active steps to address a rapidly changing marketplace while
maintaining a strong cash flow. We are confident in the steps taken
by Trimark's management."
The company previously announced that Trimark Interactive
shipped more than 120,000 units of the interactive game "The Hive,"
developed exclusively for Windows `95. The retail sales of "The
Hive" have been negatively affected, as have other add-on products
made exclusively for Windows `95, by the dramatically smaller-than-
projected installed user base of the operating system.
"The Hive" received rave reviews and is one of the best-selling
native Windows `95 games, and even though Trimark recognizes
Microsoft's continued support for Windows `95 as the PC operating
system of the future, the company chooses to take a substantial
reserve against returns now based on the slower-than-expected sales
of the game.
The company's current slate of motion pictures has more than $20
million of new product including the science-fiction family film
"The Warrior of Waverly Street," "Crossworlds," "The Dentist" and
"The Pinocchio Syndrome."
Trimark Pictures is a division of Trimark Holdings Inc., a broad-
based entertainment company that acquires, produces and distributes
motion pictures domestically and internationally under the Trimark
Pictures banner; licenses to the broadcast industry under the
Trimark Television moniker, to the domestic home video market under
the Vidmark Entertainment label and to the interactive market under
the Trimark Interactive banner.
CONTACT: Trimark Holdings Inc., Los Angeles,
David Bowers or Douglas L. Lowell, 310/314-2000