BOCA RATON, Fla., Feb. 5, 1996 - W. R. Grace & Co. (NYSE:
GRA) reported net operating earnings per share of $3.33 for the full
year 1995, an 11 percent increase from the $3.01 per share recorded
for 1994. Including special items in both periods, Grace recorded a
loss of $326 million, or $3.40 per share for the full year 1995,
compared with net income of $83 million or 88 cents per share in
1994.
Full year sales of specialty chemicals rose 14 percent to $3.67
billion compared to $3.22 billion in 1994. In discontinued
operations, sales for health care rose 11 percent to $2.08 billion,
compared to $1.88 billion a year ago.
For the fourth quarter of 1995, net operating earnings were $.95
per share, a decline of 14 percent from the $1.10 per share earned
in the 1994 quarter. In addition, the company recorded special
charges of $566 million after tax in the quarter, related to
discontinued operations, restructuring activities, asset impairments
and future spending for asbestos litigation and environmental
remediation. Including the special charges, Grace reported a net
loss of $474 million, or $4.87 per share, for the fourth quarter of
1995.
Sales for flexible packaging and specialty chemicals businesses
in the fourth quarter declined one percent to $933 million compared
to $944 million a year ago.
Health care sales rose two percent to $541 million, compared to
$529 million in the year-ago quarter.
"The lower operating results in the recent quarter do not
diminish our expectations for improved earnings and significantly
higher shareholder value as we proceed through the year," said
Albert J. Costello, chairman, president and chief executive officer.
"As we noted in January, the shortfall in the fourth quarter was
related to a number of factors, most of which appear to be temporary
in nature. The agreement we announced yesterday to combine Grace's
health care business with the dialysis operations of Fresenius AG
will bring substantial benefits both to NMC and to Grace's packaging
and specialty chemicals businesses. This transaction, anticipated
for completion by the third quarter of 1996, will create the world's
largest fully integrated dialysis company, with exciting prospects
for value-driven growth and continued leadership in quality of
patient care," he said.
"This transaction, combined with an expected transaction
involving our Grace Dearborn water treatment business, will result
in a significant reduction of Grace's debt, and more than restore
the shareholders' equity impacted by the special charges taken in
the fourth quarter. Execution of the stock repurchase program will
further enhance per share results. In all, we will move
significantly closer to attaining our goal of stronger, more
predictable and sustainable growth in value," Mr. Costello
concluded.
In 1995, pretax operating earnings for flexible packaging and
specialty chemicals rose 15 percent to $387 million, representing an
all-time record for the group. This increase was achieved despite a
17 percent decline to $107 million in the fourth quarter. As
previously reported, fourth quarter results included four fewer
selling days than in the year-ago quarter due to a change in the
reporting calendar made at the start of 1995. This had a volume
impact of six percent.
- Packaging had a record year, with sales rising 19 percent to
$1.7 billion versus 1994; operating earnings rose 20 percent.
Packaging earnings for the quarter declined three percent, excluding
the impact of fewer selling days. Underlying product strength was
more than offset by a number of factors, primarily the three-week
French strike which ended in December, temporary weakness in U.S.
meat markets, and increased costs resulting from new line start-up
activity and reduction in inventory levels.
- Catalyst and silica products also had a record year, with
sales of $687 million, up 13 percent versus 1994; operating earnings
rose 18 percent. Results for the quarter were mixed, excluding the
change in selling days. Fluid cracking catalysts were down compared
to an exceptionally strong year-ago quarter, primarily as a result
of refineries continuing to process light crude oils. Silicas and
adsorbents also declined due to several factors, while polyolefin
catalysts rose due to strong volume and favorable costs.
- The smaller specialty chemicals businesses recorded 8 percent
revenue gains for full year 1995 to $1.3 billion, while their
earnings declined 22 percent. For the fourth quarter, construction
products earnings rose modestly versus the year-ago quarter,
primarily due to strength in cement and concrete products and lower
costs. Results for both water treatment and container products
declined, primarily due to continued high operating costs and the
inability to raise prices.
Pretax operating earnings from health care declined eight
percent in the quarter due to the absence of 1994 sales and related
earnings associated with the 1993 federal budget ("OBRA 93") that
are no longer being recorded. Absent the beneficial OBRA 93 impact
in the 1994 quarter, current quarter revenues rose nine percent and
operating income increased 27 percent. Strong increases in dialysis
services and medical products were partly offset by a decline in the
homecare division due to price competition in its base infusion
business.
During the fourth quarter, the company updated analyses of
certain contingencies. Based on recent trends and reassessment of
future plans and forecasts, provisions aggregating $566 million
after tax were made as follows:
- Discontinued Operations - Health Care - $69 million -
For cumulative adjustments related to changing the method of
recording certain billing adjustments, the recognition of a greater
than forecasted actual experience rate for certain self insurance
liabilities and changes in the amortization rates of certain
intangible assets.
- Other Discontinued Operations - $151 million -
To reflect lower than expected net proceeds from planned
disposition of the remaining discontinued operations, principally
Grace Cocoa.
- Asbestos - $179 million -
Principally for a first-time estimate of future bodily injury
claims, updated estimates of pending property damage and bodily
injury cases, and related insurance recovery estimates.
- Environmental - $50 million -
For additional future spending for several sites.
-- Restructuring, Asset Impairment and Other Costs -- $117 million
To recognize costs of the previously-announced worldwide
restructuring program along with certain asset impairments (as
prescribed under a new accounting pronouncement - FASB No. 121
- Accounting for the impairment of long-lived assets) and other
special costs, some of which related to previous divestments.
Grace is a leading global supplier of flexible packaging and
specialty chemicals, and a leading provider of specialized health
care services.
W. R. Grace & Co.
Consolidated Statement of Operations (a)
For Year Ended December 31
($ Millions Except Per Share)
Fourth Quarter Full Year
1995 1994 1995 1994
Sales $933.4 $944.4 $3,665.5 $3,218.2
Other income 28.6 4.4 41.9 42.6
Total $962.0 $948.8 $3,707.4 $3,260.8
Cost of goods sold and oper.
exp. $629.6 $523.5 $2,247.2 $1,900.8
Selling, general and admin. exp. 243.9 227.2 910.8 773.6
Depreciation and amortization 54.6 51.0 177.6 165.0
Interest exp and related fin. cost 19.0 13.1 71.3 49.5
Research and development exp. 30.6 24.0 120.6 106.8
Corp. exp. prev. allocated to the
health care segment 7.8 9.7 37.8 37.1
Restruct. cost & asset
impairments 135.2 -- 179.5 --
Prov. relating to asbestos-related
liab. and insurance coverage 275.0 -- 275.0 316.0
Total $1,395.7 $848.5 $4,019.8 $3,348.8
(Loss)/income before inc. taxes ($433.7) $100.3 ($ 312.4) ($88.0)
(Benefit from)/prov. for inc.
tax (149.4) 35.4 (115.8) (46.6)
(Loss)/income from cont. ops. ($284.3) $ 64.9 ($196.6) ($41.4)
(Loss)/income from disc. ops. (189.5) 38.5 (129.3) 124.7
Net (loss)/income ($473.8) $103.4 ($325.9) $83.3
(Loss)/earnings per share
Continuing operations $(2.92)(b) $ .69 $(2.05)(b) $(.45)(e)
Discontinued operations (1.95)(c) .41 (1.35)(c) 1.33
Net (loss)/income $(4.87)(d) $1.10 $(3.40)(d) $ .88 (e)
Avg. number of shares
(millions) 97.3 94.0 95.8 93.9
(a) 1994 results have been restated to reflect the classification
of the health care segment as a discontinued operation in the
second quarter of 1995.
(b) Includes losses from special items of $3.55 per share (or
$345.6 after-tax) and $4.08 per share (or $391.3 after-tax) for
the fourth quarter and full year 1995, respectively.
(c) Includes losses from special items of $2.27 per share (or
$220.2 after-tax) and $2.65 per share (or $253.7 after-tax) for
the fourth quarter and full year 1995, respectively.
(d) Includes losses from special items of $5.82 per share (or
$565.8 after-tax) and $6.73 per share (or $645.0 after-tax) for
the fourth quarter and full year 1995, respectively.
(e) Includes $2.13 per share for the 2nd quarter 1994 provision
relating to asbestos-related insurance coverage.
W. R. Grace & Co.
Operating Results
Quarter Ended December 31
($ Millions Except Per Share)
Percent
1995 1994 Change
Sales - Specialty Chemicals $ 933.4 $ 944.4 (1.2)%
Operating Income - Specialty Chemicals $ 107.0 $ 128.1 (16.5)
Other Expenses/(Income):
Interest/Financing (a) $ 19.0 $ 13.1 45.0
Other (13.8) 5.0 (376.0)
Total Other Expenses $ 5.2 $ 18.1 (71.3)
Pretax Operating Earnings $101.8 $ 110.0 (7.5)
Corp. Exp. prev. allocated to Health Care 7.8 9.7 (19.6)
Pretax Oper. Earnings before Special Items$ 94.0 $ 100.3 (6.3)
Provision for Income Taxes 32.7 35.4 (7.6)
Net Operating Income before Special Items $ 61.3 $ 64.9 (5.5)
Special Items -after-tax- Chem./Corp.:
Restructuring/Other Activities (116.9) -- ND
Provision for Environmental Liab. (50.0) -- ND
Provision for Asbestos-related Liab. (178.7) -- ND
Net (Loss) / Income from Continuing Ops. $(284.3) $ 64.9 (538.1)
Net Loss from Disc. Ops.-(after-tax excl.
Health Care) (151.3) -- ND
Net (Loss)/Inc. from Disc. Ops.-
Health Care (b) (38.2) 38.5 (199.2)
Net (Loss) / Income $(473.8) $ 103.4 (558.2)%
Earnings Per Share - Oper. Earnings (before special items)
From Operations-Specialty Chemicals $ .63 $ .69 (8.7)%
From Disc. Ops. - Health Care (b) .32 .41 (22.0)
Operating Earnings $ .95 $ 1.10 (13.6)%
(Loss) / Earnings Per Share
From Continuing Operations $(2.92) $ .69 (523.5)%
From Discontinued Operations (1.95) .41 (575.6)
Net (Loss) / Income $(4.87) $ 1.10 (542.7)%
Average Number of Shares (Millions) 97.3 94.0
(a) After an allocation of interest/financing expenses to disc. ops.
(b) Discontinued Operations - Health Care
Sales $540.6 $ 528.5 2.3%
Operating Income $ 83.6 $ 90.9 (8.0)
Interest/Financing Expenses 28.8 20.9 37.8
Pretax Operating Earnings 54.8 70.0 (21.7)
Provision for Income Taxes 24.1 31.5 (23.5)
Net Income from Disc. Ops. before
Special Items $ 30.7 $ 38.5 (20.3)%
Special Items - after-tax (68.9) - ND
Net (Loss) / Income from Disc. Ops. $(38.2) $ 38.5 (199.2)%
W. R. Grace & Co.
Operating Results
Year Ended December 31
($ Millions Except Per Share)
Percent
1995 1994 Change
Sales - Specialty Chemicals $3,665.5 $3,218.2 13.9%
Operating Income - Specialty Chemicals $ 387.4 $ 336.5 15.1
Other Expenses:
Interest/Financing (a) $ 71.3 $ 49.5 44.0
Other (11.3) 8.9 (227.0)
Total Other Expenses $ 60.0 $ 58.4 2.7
Pretax Operating Earnings $ 327.4 $ 278.1 17.7
Corp. Exp. prev. allocated to Health
Care 37.8 37.1 1.9
Pretax Oper. Earnings before Special
Items $ 289.6 $ 241.0 20.2
Provision for Income Taxes 94.9 83.4 13.8
Net Operating Income before Special
Items $ 194.7 $ 157.6 23.5
Special items - after tax - Chemicals / Corporate:
Provision for Corporate Governance (18.6) -- ND
Gain on Sale of Interest in REG -- 27.0 (100.0)
Prov. for Environ. Costs/Staff Reduct. -- (26.0) 100.0
Restructuring/Other Activities (144.0) -- ND
Provision for Environmental Liab. (50.0) -- ND
Provision for Asbestos-related Liab. (178.7 ) (200.0) 10.7
Net Loss from Continuing Ops. $ (196.6) $ (41.4) (375.0)
Net Loss from Disc. Ops. (after-tax excl.
Health Care) (151.3) -- ND
Net Income from Disc. Ops.-Health Care (b) 22.0 124.7 (82.4)
Net (Loss)/Income $ (325.9) $ 83.3 (491.2)%
Earnings Per Share - Oper. Earnings (before special items)
From Operations - Specialty Chemicals $ 2.03 $ 1.68 20.8%
From Disc. Ops. - Health Care (b) 1.30 1.33 (2.3)
Operating Earnings $ 3.33 $ 3.01 10.6%
(Loss)/Earnings Per Share
From Continuing Operations $ (2.05) $ (.45) (355.6)%
From Discontinued Operations (1.35) 1.33 (201.5)
Net (Loss)/Income $ (3.40) $ .88 (486.4)%
Average Number of Shares (Millions) 95.8 93.9
(a) After an allocation of interest/financing expenses to disc.
ops.
(b) Discontinued Operations - Health Care
Sales $2,076.8 $1,875.1 10.8%
Operating Income $ 315.6 $ 287.5 9.8
Interest/Financing Expenses 93.5 60.4 54.8
Pretax Operating Earnings 222.1 227.1 (2.2)
Provision for Income Taxes 97.7 102.4 (4.6)
Net Income from Disc. Oper. before
Special Items $ 124.4 $ 124.7 (0.2)%
Special Items - after-tax (102.4) - ND
Net Income from Discontinued Ops. $ 22.0 $ 124.7 (82.4)%
W. R. Grace & Co.
Specialty Chemicals
Geographic Data
(Dollars In Millions)
QUARTER ENDED DECEMBER 31
Pretax
Sales Operating Income
1995 1994 1995 1994
Specialty Chemicals
North America $ 459 $ 479 $ 62 $ 69
Europe 291 284 21 33(a)
Latin America 66 68 7 8
Asia Pacific 118 113 17 18
Total Specialty Chemicals $ 934 $ 944 $ 107 $ 128
YEAR ENDED DECEMBER 31
Pretax
Sales Operating Income
1995 1994 1995 1994
Specialty Chemicals
North America $1,821 $1,679 $ 208 $ 192
Europe 1,147 955 96 69(a)
Latin America 253 218 18 20
Asia Pacific 445 366 65 56
Total Specialty
Chemicals $3,666 $3,218 $ 387 $ 337
(a) Includes costs of $1 for the quarter and $11 year-to-date
associated with streamlining certain European chemical
operations.
WILMINGTON, Del., Feb. 5, 1996 - href="chap11.columbia.html">The Columbia Gas System,
Inc., (NYSE: CG) today announced that its net income for the
fourth
quarter of 1995, after adjustments for bankruptcy-related costs and
other unusual items, was $77.5 million, or $1.54 per share. This
reflects a 10 percent increase over similarly adjusted net income of
$70 million, or $1.39 per share, during the fourth quarter of 1994.
Operating income in the fourth quarter was $47.6 million above the
previous period.
Adjusted net income for 1995 was $153.3 million, or $3.04 per
share, as compared to $164.9 million, or $3.26 per share, during
1994. Operating income for the year was $390.2 million as compared
to $384.1 million in 1994.
Columbia System Chairman Oliver G. (Rick) Richard III said:
"Many positive things happened to Columbia in 1995, besides our
successful emergence from Chapter 11 with investment grade debt
ratings. The price of our stock appreciated over 86 percent. Our
cost of long-term debt (7.03 percent) is among the lowest in the gas
pipeline industry. Our principal pipeline company announced a major
expansion program that will deliver an additional 500 million cubic
feet of natural gas daily and filed its first general rate increase
since 1991 to recover the higher operating costs it is experiencing.
The long-idle liquefied natural gas terminal in Maryland returned to
operation providing peaking and storage services to customers. The
distribution companies launched new programs designed to provide
more cost-efficient, higher-quality service to their customers."
Richard said these and other positive developments "are
precursors of the continued growth and expansion I would expect for
Columbia in coming years as our new, diverse management team
develops innovative ways to better utilize the System's strong
physical assets to grow our businesses and improve shareholder
value. Particular attention will be given to maximizing and
unlocking latent potential in our nonregulated businesses."
The increase in adjusted 1995 fourth quarter net income was
principally due to increased distribution segment throughput,
resulting from temperatures that were 32 percent colder than the
previous year, and higher prices for oil and gas. For the year, the
favorable effects in the fourth quarter were more than offset by the
effect of higher operating costs, higher interest expense, and the
combined effect of lower oil and gas prices and reduced production.
Prior to adjustments for the bankruptcy-related and other
unusual items, Columbia reported a net loss of $539.7 million, or
$10.74 per share, for the fourth quarter, as compared to net income
of $73.2 million, or $1.45 per share, during the fourth quarter of
1994. For the year, Columbia reported a net loss of $360.7 million,
or $7.15 per share, as compared to net income of $240.6 million or
$4.76 per share in 1994.
The most significant item affecting both the fourth quarter and
the 12-month results was an after-tax charge of $638.4 million
resulting from the recording of interest and interest on interest
expense on prepetition debt obligations for the four and one-half
years the company operated under Chapter 11.
Fourth quarter and annual results also reflect a $54.8 million
after-tax charge associated with the proposed sale of Columbia's
southwest oil and gas company and an after-tax improvement of $71.6
million due to the reapplication of Financial Accounting Standard
No. 71 "Accounting for the Effects of Certain Types of Regulation"
by the transmission subsidiaries. This accounting statement allows
certain costs, such as environmental charges, that previously were
expensed, to be recognized as regulatory assets to the extent they
are recoverable in rates and permits revenues and expenses to be
recorded in a manner that reflects the ratemaking process.
FOURTH QUARTER RESULTS
Operating income for the transmission segment in the current
period was $60.3 million, an increase of 59 percent or $22.5 million
over the fourth quarter of last year. This improvement reflected
$21.1 million for certain adjustments associated with emergence from
Chapter 11 and the effect of lower customer settlement reserve
additions of $17.5 million in 1995 compared to $35 million in 1994.
While increased operating costs partially offset the favorable
effect of these items, additional revenues resulting from a rate
case Columbia Gas Transmission Corp. has pending before the Federal
Energy Regulatory Commission will provide the opportunity to recover
higher operating costs that are being incurred.
Temperatures in the distribution segment's operating territory
were 32 percent colder during the current period than during the
same period in 1994, generating an 18 percent increase in
throughput. This, combined with higher rates and increased customer
usage and growth, resulted in operating income that increased 43
percent, or $24.5 million, to $80.8 million..
The oil and gas segment had operating income of $4.4 million
during the current period, an increase of $1.2 million over the same
period in 1994. The increase reflects a $2.8 million payment
received as a result of an investment in an area impacted by
Columbia Transmission's emergence from Chapter 11. On average,
prices received for oil ($16.31 per barrel) and natural gas ($2.09
per thousand cubic feet) were up slightly during the current period,
but this was partially offset by an eight percent decrease in gas
production and an 18 percent decrease in oil production.
Operating income for other energy operations improved $300,000
to $6.9 million because of the favorable effect of colder weather on
propane sales and gas marketing activities. This was reduced by
lower income from cogeneration operations.
TWELVE MONTHS RESULTS
The transmission segment had operating income of $214.1 million
during 1995. The $4.4 million increase over the previous year
reflects the positive effect of unusual items associated with
emergence from Chapter 11. Operating income was reduced $35 million
for a customer settlement reserve in 1994 compared to a reserve
addition of $17.5 million in 1995. Tempering these increases were
higher operating costs not being recovered in present rates, but
which are reflected in a rate case currently pending before the
Federal Energy Regulatory Commission.
Operating income for the distribution segment was $163.6 million
in 1995. The $35.3 million improvement over 1994 was due to the
impact of higher rates that generated an additional $56.3 million in
revenue, increased industrial throughput resulting from strong
economic conditions and colder weather. These positive effects were
reduced by higher operating costs.
The oil and gas segment had operating income of $3.7 million in
1995, as compared to $30.6 million in 1994, due principally to a 10
percent decrease in the average price received for natural gas and a
21 percent decline in oil production. The average price for oil
increased more than a dollar per barrel between the two periods.
Also affecting segment operating income were the 1994 reversal of a
reserve related to a royalty dispute and the payment received
following Columbia Transmission's emergence from Chapter 11.
Other energy operating income in 1995 was $19.3 million, a
decline of $4.8 million from the previous year reflecting lower
propane margins and other miscellaneous changes.
The Columbia Gas System, Inc., is one of the nation's largest
integrated natural gas systems with assets in excess of $6 billion.
Its operating units are actively engaged in all phases of the
natural gas industry, provide marketing and fuel management
services, and generate electric power. Information about Columbia
and its operating units will be available at The Energy Station on
the World Wide Web (http://www.columbiaenergy.com ) beginning
February 15.
This press release includes forward looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Although Columbia
believes that its expectations are based on reasonable assumptions,
it can give no assurance that its goals will be achieved. Important
factors that could cause actual results to differ materially from
those in the forward looking statements herein include prolonged
unusual weather patterns, political and regulatory actions, the pace
of deregulation of domestic retail natural gas and electricity
markets, the timing and extent of change in commodity prices for all
forms of energy and the timing and extent of Columbia's efforts to
implement changes planned by management.
THE COLUMBIA GAS SYSTEM, INC.
Summary of Financial and Operating Data
Three Months Twelve Months
Ended December 31 Ended December 31
1995 1994 1995 1994
Income Statement Data
($ millions)
Total Operating Revenue 783.6 748.2 2,635.2 2,747.1
Income (Loss) Before
Extraordinary item (611.3) 73.2 (432.3) 246.2
Net Income (Loss) (539.7)(A) 73.2 (360.7)(A) 240.6(A)
Operating Income (Loss) by Segment:
Transmission 60.3(B) 37.8(B) 214.1(B) 209.7(B)
Distribution 80.8 56.3 163.6 128.3
Oil and Gas 4.4 3.2 3.7 30.6
Other Energy 6.9 6.6 19.3 24.1
Corporation (3.3) (2.4) (10.5) (8.6)
Total 149.1 101.5 390.2 384.1
Per Share Data
Earnings (Loss) Before
Extraordinary item ($) (12.17) 1.45 (8.57) 4.87
Earnings (Loss)
on Common Stock (10.74) 1.45 (7.15) 4.76(A)
Average Common Shares
Outstanding (millions) 50.2 50.6 50.5 50.6
(A) Includes the reapplication of SFAS No. 71, "Accounting for
the Effects of Certain Types of Regulation," in 1995 and the
adoption of SFAS No. 112, "Employers Accounting for Postemployment
Benefits" in 1994.
(B) Includes establishing a $17.5 million reserve in 1995 and a
$35 million reserve in 1994 for a customer settlement.
Capitalization as of December 31 (in millions) 1995 1994
Common Stock Equity
Common stock, par value $10 per share -
outstanding 49,204,025 and 50,563,335
shares, respectively $506.2 $505.6
Additional paid in capital 595.8 601.9
Retained earnings 69.8 430.5
Less: Cost of treasury stock
(1,416,155 shares) 57.8 ---
Unearned employee compensation --- (70.0)
Total Common Stock Equity 1,114.0 1,468.0
Redeemable Preferred Stock 399.9 ---
Long-Term Debt 2,004.5 4.3
Total Capitalization $3,518.4 $1,472.3
Summary of Financial and Operating Data
Three Months Twelve Months
Ended December 31 Ended December 31
1995 1994 1995 1994
Operating Data:
Oil and Gas Volumes:
Gas Production (billion cubic feet)15.6 16.9 65.4 66.7
Oil Production (000 barrels) 674 823 2,849 3,611
Transmission (billion cubic feet):
Transportation:
Columbia Transmission
Market Area 338.4 288.4 1,106.1 1,038.6
Columbia Gulf
Main-line 155.0 114.6 605.0 590.3
Short-haul 61.5 23.5 221.4 225.4
Intrasegment Eliminations (152.5) (137.1) (596.3) (583.2)
Total Transportation 402.4 289.4 1,336.2 1,271.1
Sales 0.0 0.0 0.0 0.9
Total 402.4 289.4 1,336.2 1,272.0
Distribution (billion cubic feet):
Gas Sales 99.8 75.8 290.7 280.5
Transportation 65.3 64.5 255.9 232.5
Total Throughput 165.1 140.3 546.6 513.0
Degree Days-Distribution Service
Territory
Actual 2,208 1,671 5,692 5,530
Normal 2,032 2,032 5,600 5,600
% Colder (warmer) than normal 9 (18) 2 (1)
% Colder (warmer) than prior period 32 (20) 3 (3)
Bankruptcy-related and Unusual Items
After-tax effect on Net Income:
Reported Net Income (Loss) $(539.7) $73.2 $(360.7) $240.6
Less:
Bankruptcy related items:
Interest and customer
settlement issues (649.4) (22.8) (649.4) (22.8)
Estimated interest costs
not recorded on prepetition
debt prior to emergence 28.2 39.9 158.0 149.2
Professional fees and
related expenses (3.7) (9.0) (26.8) (30.1)
Producer claim adjustment --- --- --- (35.4)
Reapplication of SFAS No. 71
for transmission
subsidiaries 71.6 ---- 71.6 ---
Estimated loss on sale
of Southwest oil and
gas subsidiary (54.8) --- (54.8) ---
Miscellaneous unusual items (9.1) (4.9) (12.6) 14.8
Total adjustments (617.2) 3.2 (514.0) 75.7
Net Income after adjusting
for bankruptcy and
unusual items $77.5 $70.0 $153.3 $164.9
SAN JOSE, Calif. -- Feb. 5, 1996 -- Diamond
Multimedia (Nasdaq: DIMD) today announced that it has increased its
offer to acquire Hayes Microcomputer
Products, Inc. ("Hayes") out
of Chapter 11 bankruptcy reorganization. The Official Committee of
Unsecured Creditors of Hayes (the "Committee"), which has approved
the Diamond offer, today filed with the U.S. Bankruptcy Court in
Atlanta, Georgia, an amendment to the Plan of Reorganization of the
Committee and Diamond increasing the offer.
The Committee and Diamond filed an amendment to the Plan on
January 25, 1996, in which Diamond proposed to provide approximately
$85 million in cash to creditors, representing a full pay-out of all
pre-petition claims plus interest, and offered equity holders $102.4
million in stock and $8.6 million in cash. Diamond further reserved
the right in the January 25, 1996 amendment to increase the total
cash consideration and correspondingly decrease the total stock
consideration by any amount up to one-half of the total merger
consideration of $111 million. The new offer continues to provide
for payment of all pre-petition claims in full in cash; equity
holders, however, will now receive an aggregate of $103 million in
stock and $25 million in cash, and Diamond no longer reserves the
right to substitute cash consideration for stock consideration. The
new offer brings the total aggregate merger consideration to $128
million and is structured to comply with the requirements of a tax-
free reorganization within the meaning of Section 368 (a) of the
Internal Revenue Code of 1986, as amended.
Due to the uncertainty of the eventual outcome of the contested
bidding process, the Company can provide no assurance that its bid
for Hayes will prevail, or that if the Company's bid is successful
the Company will be able to successfully integrate Hayes.
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, CA, 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.
CONTACT: Diamond Multimedia
Gary Filler, 408/325-7333 (investors)
Kim Stowe, 408/325-7204 (media)
E-mail: kims@diamondmm.com
or
FRB San Francisco
Ann Trunko or Kevin Mirise, 415/986-1591
ROCKY HILL, Conn. -- Feb. 5, 1996 -- Ames
Department Stores Inc. (NASDAQ: AMES) today announced that its $2.8
million bid to acquire 10 locations previously operated as href="chap11.jamesway.html">Jamesway
stores has been approved by the bankruptcy court supervising the
Jamesway liquidation.
Ames plans to reopen the former Jamesway locations in late
spring. The locations are in Catskill, Chester, Liberty, Monticello
and Napanoch, N.Y.; Flemington, Sussex and Wrightstown, N.J.; and
Brodheadsville and Stroudsburg, Pa.
President and Chief Executive Officer Joseph R. Ettore, said,
"The acquisition of these higher-volume locations better positions
Ames in a competitive discounting environment by building on the
company's dominant presence in the Northeast, increasing market
share in areas of three key states and adding an estimated $100
million in net sales. We intend to continue to actively pursue
growth opportunities arising in the regional discount industry."
Ames, which operates 307 stores in 14 Northeastern states and
the District of Columbia, is the nation's fifth-largest discount
retailer, with annual net sales of $2.1 billion.
CONTACT: Ames Department Stores;
Marge Wyrwas, 203/257-2659;
Bill Roberts, 203/257-2666;
Lynn Riemer, 203/257-2655
DALLAS, TX -- Feb. 5, 1996 -- The following letter
was released today by Dave & Buster's, Inc.:
February 5, 1996
TO OUR STOCKHOLDERS:
As co-founders of Dave & Buster's, Inc., we wanted to
communicate to you, our stockholders, a first look at the year we
have just completed. We are excited about the future of our Company
and the management team we have assembled to move Dave & Buster's
into the next century. We would like to review for you some of the
recent events in our short public history. Later this year we will
be forwarding to you our first annual report which will describe the
1995 fiscal year in much more detail.
In June 1995 Edison Brothers Stores, Inc. distributed its
ownership interest in Dave & Buster's to its shareholders in a tax
free spin-off. On June 26, 1995, Dave & Buster's common stock
started trading on the NASDAQ under the symbol DANB.
In August 1995 Dave & Buster's entered into a license agreement
with a subsidiary of Bass Plc to license the "Dave & Buster's" name
and concept in the United Kingdom. Bass expects to open seven
stores in the United Kingdom by the year 2000. This agreement will
give Dave & Buster's international exposure and will open the door
for similar type agreements in other foreign countries.
In September 1995 Dave & Buster's repaid its outstanding
intercompany borrowings and construction advances from Edison
Brothers with advances from a bank facility agreement. This was a
major step in separating our business from the Edison Brothers'
business.
In October/November 1995 Dave & Buster's completed a public
offering of common stock for the sale of 2,070,000 shares (including
the underwriters' over-allotment) at $15.00 per share for net
proceeds of $28,683,000, after deducting related offering costs.
These funds along with internally generated cash flow and unused
debt capacity will allow Dave & Buster's to continue its expansion
plans into the future.
We were pleased with the results of our third quarter which
ended October 29, 1995. Some of the highlights were:
We were also pleased with the results of the first 39 weeks of
1995. Some of the accomplishments were:
In November 1995 the Company opened its sixth Dave & Buster's
location, a 50,000 square foot store in the Chicagoland suburb of
Addison, Illinois. Our opening team did an excellent job in
preparing this store for opening and, to date, it is performing at
revenue levels higher than our expectations averaging approximately
$300,000 per week.
We have just completed our seventh store, a 59,000 square foot
complex in downtown Chicago (Clark Street and Oak) which opened
January 25, 1996. This is Dave & Buster's first venture into a
major downtown location. Early results have been above our
expectations.
Fiscal year 1995, which ended on February 4, 1996, was the best
year in our history with total revenues exceeding $52.5 million and
comparable store revenues in excess of comparable amounts for last
year. With the addition of our two Chicago complexes and the two
1996 store openings in Hollywood, Florida and North Bethesda,
Maryland, we look forward to another record year.
At the time of the November bankruptcy filing by Edison Brothers
Stores, Inc., some question was raised about the possible effect on
our Company of a "fraudulent conveyance" claim. To date, no such
claim has been raised. However, even if it were, Dave & Buster's
and its legal advisors continue to believe that any stockholder who
bought common stock of the Company after the spin-off was completed
or during the Company's recently completed public offering would not
be affected. While we continue to monitor this situation carefully,
our primary attention is focused on managing our existing operations
and moving forward with our development plans.
The next several quarters will be very busy for us as we
complete our newest stores in Hollywood, Florida and North Bethesda,
Maryland at the end of the first quarter of 1996 and the beginning
of the third quarter of 1996, respectively. We are also negotiating
for three new locations in 1997 that could include the Cambridge
Side Galleria located in Cambridge, Massachusetts, the Roosevelt
Field Raceway Center in Westbury Long Island, the Palisades Power
Mall, a 3 million square foot super regional enclosed mega-mall
located in Rockland County, New York and the Santa Anita
Entertainment Center, a 1,000,000 square foot entertainment and
retail development located adjacent to the Santa Anita Racetrack in
Arcadia, California. We are also currently negotiating for sites in
Orlando, Minneapolis, Denver, Detroit, Manhattan and Ontario,
California.
We thank you for your support of Dave & Buster's.
Sincerely,
Dave Corriveau Buster Corley
Co-founder and President Co-founder and Chief Operating Officer
BOSTON, Feb. 5, 1996 - A criminal Information was filed
today charging a Marshfield attorney with embezzling funds belonging
to a client's bankruptcy estate.
United States Attorney Donald K. Stern stated that an
Information was filed charging MARTHA B. KLEINERMAN, 47, of 8 School
Street, Marshfield, Massachusetts, with one count of embezzling
approximately $9,200 belonging to a client in bankruptcy, which was
intended for payment to the client's bankruptcy creditors.
KLEINERMAN faces a maximum penalty of five years' imprisonment
and a $250,000 fine.
The case was investigated by agents of the Federal Bureau of
Investigation, was referred by the U.S. Trustee's Office in Boston,
and is being prosecuted by Assistant U.S. Attorney Mark J.
Balthazard of Stern's Economic Crimes Unit.
CONTACT: Joy Fallon or Anne-Marie Kent of the US Attorney's Office,
617-223-9445
INDIANAPOLIS, Ind., Feb. 5, 1996 - The higher than
anticipated revenues generated by href="chap11.sycamore.html">Sycamore Stores' going-out-of-
business sale provided a bittersweet ending for the liquidation of
the chain, as the last of its 126 stores closed on Saturday.
Since final sales commenced in December, Sycamore sold more than
$8.4 million in merchandise, exceeding original estimates by about
$1 million, said Erik Risman, president and CEO. Utilizing a team
approach under which employees of the chain liquidated the
inventories under the direction of Cranford, N.J.-based consultant
Fox Promotions, Sycamore generated a return for its creditors that
was nearly double the top guaranteed offer of 30 cents on the dollar
submitted by traditional liquidation firms.
"Other liquidators we spoke with offered guaranteed returns of
30 cents on the dollar," Risman noted. "Fox president Fred Marech
didn't offer us any guarantees, but told us to expect a return of
about 50 cents on the dollar. For the first 22 stores we closed,
which had outdated merchandise, the return was about 51 cents. But
for the other 104 locations, it was closer to 58 cents."
Because it was operating under Chapter 11 bankruptcy protection,
Sycamore was required to seek court approval of Fox as its
liquidator. A federal bankruptcy court judge in Indianapolis upheld
the company's decision to retain Fox and proceed with a non-
guaranteed sale in a Dec. 12 ruling.
"The improved return was basically due to a team approach
between Sycamore's management and field staff, and the Fox team led
by (regional coordinator) Mark McMahan," Risman said. "We didn't
follow advice of other liquidators who suggested we terminate our
staff and manage the stores through a third party, Fox's experience
in timing the markdowns from week to week, advertising and analyzing
individual store performance was critical to the success of the
sale.
"I think the general feeling among creditors is that no one is
happy about losing money and closing the stores, but the higher than
projected return from the sale was a pleasant surprise," he
concluded.
Sycamore Stores served markets throughout Indiana, Illinois,
Ohio, Kentucky and Michigan, specializing in moderate-priced women's
apparel. Stores were located in strip centers and regional malls.
The company is headquartered in Indianapolis.
Fox Promotions specializes in inventory liquidation, as well as
turnaround consulting services for retail chains and independents.
CONTACTS: Erik Risman, president and CEO of Sycamore Stores,
317-298-1600; or Fred Marech, president of Fox Promotions, 908-272-
0155; or Bill Parness of Parness & Associates, 908-290-0121/