Santa Monica, Calif. -- Feb. 9, 1996 -- L.A. Gear
Inc. (NYSE: LA) Friday announced its financial results for the year
and fourth quarter ended Nov. 30, 1995.
Net sales for the year ended Nov. 30, 1995 were $296.6 million
compared to $416.0 million for the prior year. The Company reported
a 1995 net loss before preferred dividends and a loss applicable to
common stock of $51.4 million ($2.24 per share) and $59.1 million
($2.58 per share), respectively, compared to a 1994 net loss before
preferred dividends and a loss applicable to common stock of $22.2
million ($0.97 per share) and $29.7 million ($1.29 per share),
For the quarter ended Nov. 30, 1995, the Company reported a net
loss before preferred dividends of $34.3 million ($1.49 per share)
and a loss applicable to common stock of $36.3 million ($1.58 per
share) on net sales of $53.8 million.
During the year-earlier period, net sales were $84.7 million,
the net loss before preferred dividends was $14.9 million ($0.65 per
share) and the loss applicable to common stock was $16.8 million
($0.73 per share).
The corporate reorganization plan adopted by the Company in
September 1995 resulted in a restructuring charge of $5.1 million in
the fourth quarter of 1995, primarily relating to the elimination of
approximately 160 full time jobs, the closure of the Company's
retail outlet division and the consolidation of office space at the
In addition, during the fourth quarter of 1995 the Company
incurred non-recurring charges of $5.6 million in connection with
(i) a $4.6 million increase in the reserve for unused barter credits
and (ii) a $1.0 million write off of goodwill related to the
acquisition of its Mexican business in June 1994.
Fiscal 1994 results included non-recurring charges of
approximately $2.5 million related to the realignment of senior
management. Domestic net sales decreased by 35.3 percent from the
prior year primarily from, among other things, lower domestic sales
of children's lighted product, a decrease in the average selling
price per pair and an overall drop in the total number of pairs
International net sales, which accounted for approximately 35.1
percent and 28.5 percent of the Company's total net sales for 1995
and 1994, respectively, decreased by 12.1 percent from the previous
This decrease was primarily due to reduced sales in Mexico,
Central and South America and Poland partially offset by increased
sales by the European subsidiaries and by the Company's Far East
The gross margin increased to 29.9 percent for 1995 from 29.7
percent in 1994 primarily due to higher margins recognized on
international sales of children's lighted products, partially offset
by domestic sales of, and reserves for, selected discontinued
Exclusive of restructuring and non-recurring charges, total
selling, general and administrative expenses decreased by $10.5
million or 7.4 percent to $130.9 million during 1995 from $141.4
million during 1994. The reduction was primarily due to general
cost control and containment efforts and lower product sourcing fees
as a result of less sales.
Cash and cash equivalent balances totaled $36.0 million and
$49.7 million at Nov. 30, 1995 and 1994, respectively. There were
no domestic borrowings under the Company's bank facility at any time
during fiscal 1995.
The Company had a combined domestic and international order
backlog of $88.0 million and $170.5 million at Dec. 31, 1995 and
The lower backlog at Dec. 31, 1995 is primarily due to (i) the
inclusion in the backlog at Dec. 31, 1994 of the entire $80 million
minimum purchase commitment for fiscal 1995 under the Company's
agreement with Wal-Mart and (ii) an approximate $19.6 million
decrease in orders for children's lighted product.
The backlog at Dec. 31, 1995 includes the balance of Wal-Mart's
$80 million minimum purchase commitment for fiscal 1995 ($29.5
million), substantially all of which the Company expects Wal-Mart to
fulfill in the first quarter of the Company's fiscal 1996.
L.A Gear designs, develops and markets a broad range of quality
athletic and lifestyle footwear for adults and children.
L.A. Gear Inc. and subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended Year ended
Nov. 30, Nov. 30,
1995 1994 1995 1994
Net sales $ 53,791 $ 84,732 $ 296,551 $
Cost of sales 43,294 62,141 207,802
Gross profit 10,497 22,591 88,749 123,337
Selling, general and
administrative expenses 43,992 34,863 141,603
Litigation settlements, net (18) 1,932 (2,323)
Interest expense, net 700 504 2,190
Loss before income
minority interest (34,177) (14,708) (52,721) (22,301)
-- -- -- --
Minority interest (83) (221) 1,324
Net loss (34,260) (14,929) (51,397) (22,195)
Dividends on mandatorily
redeemable preferred stock (1,998) (1,875) (7,746)
to common stock $(36,258) $(16,804) $(59,143) $(29,695)
Loss per common share
before preferred dividends $ (1.49) $ (0.65) $ (2.24) $
Loss per common share $ (1.58) $ (0.73) $ (2.58) $
Weighted average common
shares outstanding 22,937 22,937 22,937
L.A. Gear Inc. and subsidiaries
Selected Consolidated Balance Sheet Data
Nov. 30, Nov. 30,
Cash and cash equivalents $ 35,956 $ 49,710
Accounts receivable, net 46,630 77,284
Inventories 51,677 57,597
Working capital 103,999 147,848
Convertible subordinated debentures 50,000 50,000
Mandatorily redeemable preferred
stock plus accrued and
unpaid dividends 107,746 100,000
Accumulated deficit (169,281) (110,138)
Total shareholders' (deficit) equity (40,627) 18,149
WILLOUGHBY, Ohio -- Feb. 9, 1996 -- Figgie
International Inc. (NASDAQ/NMS: FIGIA and FIGI) today reported 1995
fourth quarter income from continuing operations of $2.4 million, or
13 cents per share, compared with a 1994 fourth quarter loss of
$48.1 million, or $2.74 per share, from continuing operations.
Losses from discontinued operations in 1995's fourth quarter
were $5.6 million, or 31 cents per share, compared with 1994 fourth
quarter losses from discontinued operations of $64.6 million, or
$3.68 per share.
Net losses for 1995's fourth quarter were $3.2 million, or 18
cents per share, compared with 1994 fourth quarter net losses of
$112.7 million, or $6.42 cents per share.
Figgie International Chairman and CEO John P. "Jack" Reilly
said, "On a continuing operations basis, steady progress has been
made in each succeeding quarter in 1995, moving progressively from
first and second quarter losses of 44 cents and 32 cents per share
to third and fourth quarter profits of 5 cents and 13 cents per
share. Continued improvements in both sales and earnings in 1996 is
"Our fourth quarter reserve adjustment from discontinued
operations reflects a 1% addition to our restructuring plan," Reilly
added. "Those adjustments include the results of a recently
completed auction of excess equipment.
"The restructuring plan announced on Feb. 15, 1995, was
exceedingly ambitious, and I'm pleased it was virtually completed
last year. We've made excellent progress with our strategic
business plan that was designed to sell 16 business units to pay
down debt. Interstate Engineering and Hartman Electrical remain to
be sold, and we currently expect these transactions to be completed
in the first quarter."
Fourth Quarter Results
Fourth quarter sales from continuing operations in 1995
increased 7% to $92.7 million versus $86.5 million in the fourth
quarter of 1994. Third quarter 1995 sales from continuing
operations were $92.3 million.
The company's three operating segments -- Interstate
Electronics, Snorkel and Scott/Taylor Environmental -- were all
profitable in the fourth quarter. Consolidated operating income
totaled $5.5 million, compared with a $4.4 million loss in 1994's
Refinancing costs in the fourth quarter of 1995 were $1.0
million, down significantly from the first and second quarter's $4.5
million and $5.5 million and comparable to $756,000 in 1995's third
quarter. First and second quarter costs were predominantly lender
fees related to the August 1, 1994 Override Agreement and March 31,
1995 Override Extension. On Dec. 19, 1995, Figgie International
announced an agreement with GE Capital Services on a new $75 million
credit facility that replaced the company's Override Agreement.
Interest expense for the fourth quarter of 1995 was $6.3
million, compared with fourth quarter 1994's interest expense of
$10.9 million. The downward trend resulted from significantly
reduced debt levels. For the year, interest expense was $29.4
million, compared with $42.1 million in 1994.
1995 Full-Year Results
Net sales from continuing operations in 1995 totaled $359.0
million, a 12% increase over 1994's net sales from continuing
operations of $319.4 million.
"Although we hit our 1995 corporate sales target, I am not
totally satisfied with our overall performance," said Reilly.
"Interstate Electronics' sales were lower, although more than offset
by higher sales at Snorkel and Scott Aviation."
The company reported a full-year 1995 after-tax loss from
continuing operations of $10.5 million, or 58 cents per share,
versus a 1994 after-tax loss of $85.2 million, or $4.81 per share.
The 1995 net loss, including discontinued operations, was $16.1
million, or 89 cents per share, compared with 1994's net loss of
$166.7 million, or $9.41 per share.
Selling, General and Administrative expenses for 1995 were $55.6
million, a 19% improvement over 1994's SG&A of $68.5 million. SG&A
expenses as a percentage of net sales in 1995 were 15.5%, compared
with 21.4% in 1994. Significant reductions in corporate general
administrative expenses were responsible for most of the
Research and development costs for 1995 were $14.0 million, down
24% from 1994's $18.5 million. The primary reason for the drop was
high initial development costs of Interstate's new commercial
products in 1994.
"Reducing corporate G&A costs continued to be a top management
priority," said Reilly. "We achieved a 47% savings this year in
headquarters expense reductions and realized benefits from actions
taken in 1994 to eliminate consultants and corporate aircraft.
Additional corporate expense reductions are planned for this year,
reducing 1995's corporate overhead of $18.4 million to a targeted
As of Dec. 31, 1995, total debt was $214.3 million with no short-
term debt outstanding. This debt consists of: $174 million in
9.875% Senior Notes due in October 1999; $8 million of 10.375%
Subordinated Debentures due in April 1998; and $30.3 million in
mortgages that extend into the next century.
Since June 30, 1994, the company has eliminated $564 million in
debt and leases. It has paid down $317 million in funded lender
debt, eliminated $208 million in off balance sheet leases, paid down
$33 million in mortgages, and reduced capital leases by $6 million.
In addition, by the end of January 1996, $16 million of
mortgages and $9 million of leases were eliminated.
Summarizing comparable segment performance for the fourth
quarter and full year:
Interstate Electronics recorded 1995 fourth quarter sales of
$22.6 million, compared with 1994 fourth quarter sales of $33.3
million. For the 1995 full year, Interstate had sales of $98.3
million versus $113.6 million 1994. Interstate's sales reflect
lower levels of military spending for several IEC programs,
including strategic weapons and Global Positioning Satellite (GPS)
systems, and delayed introduction of GPS and bandwidth-on-demand
satellite communication products for the commercial marketplace.
Gross profits for 1995's fourth quarter were $6.7 million, or
29.6% of sales, compared with 1994 fourth quarter gross profits of
$10.6 million, or 31.8% of sales. For the full 1995 year,
Interstate had gross profits of $27 million, or 27.5% of sales,
versus 1994 gross profits of $30.8 million, or 27.1% of sales.
"Interstate aggressively managed its costs," said Reilly.
"While development and regulatory approval of Interstate's new
commercial products took three to six months longer than
anticipated, we still have a high confidence level in the viability
of these products in the commercial market."
Snorkel, benefiting from strong industry-wide demand for aerial
work platform products, recorded 1995 fourth quarter sales of $35.7
million, compared with 1994 fourth quarter sales of $21.6 million.
For the 1995 full year, Snorkel had sales of $130.0 million versus
$87.0 million in 1994.
Snorkel's domestic market continued to be robust. In addition,
international sales were strong in Southeast Asia, Latin America and
Middle East markets. At the end of 1995, Snorkel's backlog was $81
million, representing a more than twofold increase over 1994's year-
end backlog of $34 million.
Snorkel's gross profits for 1995's fourth quarter were $7.2
million, or 20.3% of sales, compared with 1994 fourth quarter gross
profits of $1.9 million, or 8.6% of sales. For the full year,
Snorkel had gross profits of $23.7 million, or 18.2% of sales,
compared with $13.2 million, or 15.2% of sales, in 1994.
"Snorkel's unit production registered steady gains throughout
the year," said Reilly. "These gains, coupled with the elimination
of manufacturing inefficiencies, resulted in improved gross margins.
Snorkel's margins should continue improving in 1996. The backlog
reflects a mix change toward the more profitable aerial booms, and
the company is introducing several exciting new products."
Scott/Taylor Environmental recorded 1995 fourth quarter sales of
$34.4 million, compared with 1994 fourth quarter sales of $31.6
million. For the full year, Scott/Taylor Environmental had sales of
$130.8 million versus $118.8 million in 1994.
Gross profits for 1995's fourth quarter were $10.7 million, or
31.0% of sales, compared with 1994 fourth quarter gross profits of
$9.9 million, or 31.5% of sales. For the full year, Scott/Taylor
Environmental had gross profits of $42.0 million, or 32.1% of sales,
versus 1994 gross profits of $38.7 million, or 32.6% of sales.
"Scott Aviation registered very strong sales for its aviation
business," said Reilly. "Scott is benefiting from the depletion of
surplus inventory from bankrupt and consolidated airlines and the
crackdown by the Federal Aviation Administration on non-certified
parts. In addition, Scott had strong government sales for its
Emergency Escape Breathing Devices. Sales of Scott's signature
product line of self-contained breathing apparatus also remain
"Scott is an outstanding division with excellent prospects for
growth bolstered by new product introductions and a $48 million 1995
year-end backlog compared with $21 million in 1994.
"Taylor Environmental's sales were flat, affected by weakness in
the retail hardware market. An aggressive cost-reduction program
has helped improve gross margins. Taylor will also benefit from new
product introductions planned for 1996."
"The restructuring program is essentially behind us," said
Reilly. "We anticipate continued sales growth at Scott/Taylor
Environmental and Snorkel, and a return to growth at Interstate
Electronics driven by recently launched commercial products.
"Each of our four core businesses is a market leader, possessing
significant growth opportunities, particularly in international
markets. New product introductions are an integral part of our
growth strategy. Our challenge for 1996 is to capitalize on this
potential in a timely manner and convert it to revenue and profit
growth. Our companywide focus is on delivering enhanced shareholder
value from a dramatically restructured operating and financial
base," stated Reilly.
FIGGIE INTERNATIONAL INC.
For the Periods Ended December 31, 1995 and 1994
(In thousands of dollars except per share data)
For the Three Months Ended December 31
Net Sales $ 92,727 $ 86,487
Pretax Income (Loss) 2,401 (61,011)
Income Tax Benefit --- 12,933
Net Income (Loss) before Discontinued
Operations 2,401 (48,078)
Loss from Discontinued Operations,
net of tax (5,597) (64,601)
Net Loss $ (3,196) $(112,679)
Weighted Average Shares 18,285 17,553
Earnings per Share
Income (Loss) from Continuing Operations $0.13 ($2.74)
Loss from Discontinued Operations ($0.31) ($3.68)
Net Loss ($0.18) ($6.42)
For the Twelve Months Ended December 31
Net Sales $ 359,032 $ 319,420
Pretax Income (Loss) (10,493) (108,233)
Income Tax Benefit --- 22,986
Net Income (Loss) before
Discontinued Operations (10,493) (85,247)
Loss from Discontinued Operations,
net of tax (5,597) (81,483)
Net Loss $ (16,090) $(166,730)
Weighted Average Shares 18,202 17,723
Earnings per Share
Income (Loss) from Continuing
Operations ($0.58) ($4.81)
Loss from Discontinued Operations ($0.31) ($4.60)
Net Loss ($0.89) ($9.41)
Consolidated Balance Sheet
December 31, 1995 and 1994
(Amounts in Thousands)
Cash and Cash Equivalents $ 25,583 $ 28,611
Restricted Cash 273 18,716
Accounts Receivable - net 56,668 46,914
Inventory - net 46,458 38,845
Prepaid Expenses 1,537 3,225
Recoverable Income Taxes 9,924 8,108
Net Assets Related to Discontinued
Operations 35,864 298,411
Property, Plant & Equipment - net 91,067 106,083
Deferred Divestiture Proceeds 33,935 19,190
Intangibles 19,447 20,244
Prepaid Rent on Leased Equipment 17,075 17,075
Prepaid Pension Costs 9,892 9,964
Other 17,185 25,078
Total Assets $364,908 $640,464
Debt Due Within One Year $ --- $171,641
Accounts Payable 30,512 55,398
Accrued Expenses 52,359 77,595
Current Maturity of Long-Term Debt 19,373 7,179
Long-Term Debt 194,955 234,491
Other Long-Term Liabilities 18,116 28,938
Total Liabilities 315,315 575,242
Stockholders' Equity 49,593 65,222
Total Liabilities & Equity $364,908 $640,464
ATLANTA, GA -- Feb. 9, 1996 -- INBRAND Corporation
(Nasdaq/NM:INBR) today announced two actions which will
significantly expand the Company's operating presence in Europe.
INBRAND initially entered the European market through the
acquisition in July 1995 of Hygieia Healthcare Holdings and related
companies based in Newcastle, England. The agreements announced
today are expected to add in excess of $100 million to the Company's
annual sales which, for the fiscal year ended July 1, 1995, totaled
Through a newly formed subsidiary, INBRAND Europe, the Company
has made a successful bid to purchase certain assets of Celatose,
S.A., a French-based manufacturer of adult incontinence products and
baby diapers. Celatose has been operating under the protection of
the French bankruptcy act, and the Company's bid was accepted by the
French court. Terms of the Company's offer were not disclosed.
In a related development, INBRAND has signed an agreement in
principle to acquire Julian T. Holding B.V., a marketing
organization based in the Netherlands. Completion of a definitive
purchase agreement is subject to certain conditions, including the
satisfactory due diligence by INBRAND relating to the transaction.
Terms of the agreement include a contract with the principals of
Julian T. Holding B.V. covering management of INBRAND Europe as well
as a minority ownership in that subsidiary. INBRAND will have an
option to purchase that minority interest based on the future
profitability of INBRAND Europe.
"These transactions represent an exceptional opportunity to
build on our current European base," remarked Garnett A. Smith,
chairman and chief executive officer of INBRAND. "Although Celatose
had recent financial difficulties, we are confident that the
underlying facilities and organization can be operated profitably.
With our bid, we submitted a comprehensive restructuring plan which
we believe will serve as an effective blueprint for the management
of these assets. Celatose had a leading market position in the
manufacturing of adult incontinence products and disposable baby
diapers. Our plan is to capitalize on that standing. Julian T.
Holding B.V., which is a well-established marketer of these products
in the Benelux countries through its Vital Disposables subsidiary,
is expected to be an important catalyst in executing our strategy.
Our plans include organizing the European operations which we are
acquiring as INBRAND Europe, and we are pleased that Jan van
Grinsven, founder of Julian T. Holding B.V., will be the managing
director of this new operating unit."
Smith indicated that these new operations fit well with the
Company's Hygieia organization. "We believe there are considerable
opportunities to blend Hygieia's expertise with technologically
advanced feminine hygiene products with Celatose's product line.
This will essentially enable us to offer retailers a complete line
of disposable, absorbent products. This acquisition also provides
us immediate marketing access to the National Health Service in the
United Kingdom which is an important customer of Julian T. Holding's
"From a broader perspective, these steps serve importantly to
enhance INBRAND's overall competitive position. Although our focus
through fiscal 1995 had been entirely on customers in the United
States, we had recognized that the market for our products was
international in scope. The Hygieia acquisition served as an
initial point of entry into other geographic areas, and we will now
accelerate that initiative by acquiring these established
INBRAND provides a broad line of disposable adult incontinence
products to both the retail and clinical markets. Retailers
generally market INBRAND's products as their private brand of
incontinence products. Sales to healthcare providers and other
clinical users are primarily through the Company's Medical
Disposables trademark. Including the acquired operations, INBRAND
has manufacturing and distribution operations in the U.S., Canada,
U.K., Belgium, Norway, France and Holland.
CONTACT: INBRAND Corporation, Atlanta,
James R. Johnson, 770/422-3036, Ext. 232
WAYNE, N.J. -- Feb. 9, 1996 -- The
Company, a regional retail food company, announced that sales for
the 12 weeks ended Jan. 6, 1996, totaled $543.6 million, compared to
$563.3 million for the 12 weeks ended Jan. 7, 1995.
Operating Cash Flow (EBITDA) was $31.1 million, or 5.7% of
sales, for the 12 weeks ended Jan. 6, 1996, compared to $21.8
million, or 3.9% of sales, for the 12 weeks ended Jan. 7, 1995.
Sales for the 40 weeks ended Jan. 6, 1996 totaled $1,787.9
million compared with $1,867.6 million for the 40 weeks ended Jan.
7, 1995. EBITDA was $108.4 million, or 6.1% of sales, for the 40
weeks ended Jan. 6, 1996 compared to $120.7 million, or 6.5% of
sales, for the 40 weeks ended Jan. 7, 1995.
The sales decline for the 12 and 40 week periods ended Jan. 6,
1996, compared with the same periods of the prior year, principally
resulted from the sale or closure of 24 stores last year which were
not replaced and from same store sales declines, offset by sales
from new stores.
Same store sales declined 1.3% and 1.2% for the 12 and 40 week
periods ended Jan. 6, 1996. The trend in same store sales
comparisons reflects improvement over the 2.8% decline in this
year's second quarter, as well as the 3.2% and 4.2% declines for the
12 and 40 week periods ended Jan. 7, 1995. Same store sales for
this year's 12 and 40 week periods were negatively influenced by (a)
the company's strong promotional programs during last year's second
and third quarters and (b) the temporary effects of the company's
previously announced decision to close two distribution centers
servicing its metropolitan New York area stores. Same stores sales
were positively influenced by (a) the Northern Region marketing
program, which includes both lower everyday shelf process and
stronger sales promotion programs, begun on a limited basis last
year and fully implemented on May 1, 1995, (b) additional marketing
and store service programs introduced in the second quarter of this
year in the metropolitan Albany, N.Y. and Bergen County, N.J. areas
which particularly emphasize the company's strengths in perishable
merchandising and (c) the severe snowstorms which struck the New
York metropolitan area in late December and early January.
Additionally, the 40 week period was positively influenced by the
timing of the pre-Easter holiday shopping period which was included
in this year's first quarter but not in last year's first quarter.
EBITDA was positively influenced for the 12 weeks ended Jan. 6,
1996, as a percentage of sales, by (a) the savings generated by the
closing of the company's Northern Region Distribution Center and
contracting with C&S Wholesale Grocers Inc. to perform all functions
associated with the supply of product to the Northern Region stores,
and (b) the restoration this year of vendor promotional allowances
and other vendor support which were not available to the company
last year subsequent to the company's announcement on Nov. 29, 1994
that it would pursue a capital restructuring. EBITDA was negatively
influenced, as a percentage of sales, by (a) reduced gross margins
and increased advertising costs both associated with the previously
mentioned Northern Region marketing program and (b) increased store
labor relating to the company's metropolitan Albany, N.Y.. and
Bergen County, N.J. marketing and store service programs, offset by
the benefits of the company's special voluntary resignation
incentive programs ("SVRIP") completed during the second quarter.
Additionally, EBITDA for the 40 week period was negatively impacted
by bankruptcy related items including the inability to be fully
invested in forward buy inventory throughout most of last year's
fourth quarter which negatively impacted gross profit in the first
Joseph J. McCaig, president and chief executive officer, said,
"During the third quarter we continued our process of reducing costs
and increasing efficiencies in our business. We entered into an
agreement with C&S Wholesale Grocers Inc. to perform the functions
associated with supplying grocery and perishable products to our New
York region stores. Formerly, the company operated distribution
centers in Mt. Kisco, N.Y. and Carlstadt, N.J. to supply our
stores. Closing agreements were entered into with the three union
locals who represented the employees in the distribution centers,
and most of these employees have now been terminated. Within the
next few weeks, we will complete the transition to C&S and fully
close the distribution centers.
"Additionally, we entered into another supply agreement with C&S
to supply all of our stores with general merchandise products from
our warehouse in Montgomery, N.Y. This agreement will enable us to
minimize our working capital needs for general merchandise.
"Finally, on January 24, we announced a corporate reorganization
which consolidates our two regional profit centers into a
centralized support structure. This reorganization will reduce
annual administrative expenses by approximately $5 million beginning
in the fourth quarter and will enable us to manage our company more
efficiently and more effectively."
McCaig said, "The second and third quarters have been transition
quarters as we have made enormous changes in the way we operate our
business. In the past six months we have eliminated virtually all
of our distribution operations, simplified our organizational
structure thus reducing our overhead, completed the SVRIP program,
repositioned our pricing in our northern stores and implemented
marketing programs in select areas, emphasizing our perishable
"All of these changes are a part of our new overall strategic
plan. Although not all of our marketing and cost reduction programs
have matured, most of our transition period is completed and
therefore, we expect that EBITDA for the fourth quarter will improve
compared to the average of the first 40 weeks."
Roger E. Stangeland, chairman of the board, noted that the
company has taken a significant number of steps over the course of
this fiscal year to reduce costs and implement new marketing and
store service programs. Stangeland said that by the end of this
fiscal year, the company will be well positioned to make significant
progress in sales and EBITDA in the future.
McCaig said that the company opened a replacement store in
Valatie, N.Y., a new store in Tannersville, N.Y. and completed
enlargements of its Darien, Conn. and West Islip, N.Y. store during
the quarter, and has recently completed an enlargement of its Lake
Placid, N.Y. store. The company expects capital spending this year
to be $45 to $50 million, including capitalized leases other than
real estate leases.
The company reported a net loss of $41.0 million for the 12
weeks ended Jan. 6, 1996 ($4.10 per share). Included in the loss
was a provision of $15.0 million relating to the decision to close
the New York Region distribution centers. The company's loss before
amortization of excess reorganization value was $16.4 million ($1.64
per share). Net income for the 40 weeks ended Jan. 6, 1996 totaled
$744.9 million and included an extraordinary gain on debt discharge
of $854.8 million, amortization of excess reorganization value of
$59.4 million, reorganization expenses of $18.6 million, provisions
for voluntary resignation incentives of $4.5 million and the
previously mentioned provision to close the New York Region
distribution centers of $15.0 million.
As previously announced, Grand Union emerged from bankruptcy on
June 15, 1995. As of June 15, 1995, the company adopted "fresh-
start" reporting in accordance with American Institute of Certified
Public Accountants Statement of Position 90-7, "Financial Reporting
by Entities in Reorganization under the Bankruptcy Code." Adoption
of fresh-start reporting resulted in an adjustment of the basis of
assets, liabilities and equity to their respective fair values.
Under fresh-start reporting, the company is required to separate the
results of its pre-emergence operations from its post-emergence
periods. Accordingly, pre-emergence periods are not comparable with
post-emergence periods. The company has combined the pre-emergence
and post-emergence operations for press release purposes and because
of the lack of comparability of net earnings, the company has chosen
to discuss Sales and EBITDA since these measures are generally
unaffected by the restructuring. EBITDA is defined as earnings
before LIFO provision, depreciation and amortization, amortization
of excess reorganization value, unusual items, interest expense,
income taxes and extraordinary gain on debt discharge.
The company currently operates 230 retail food stores in six
Northeastern states. Its common stock is traded under the GUCO
symbol on the NASDAQ National Market.
THE GRAND UNION COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands of dollars)
12 Weeks Ended 40 Weeks Ended
Jan. 6, Jan. 7, Jan. 6, Jan. 7,
1996 1995 1996 1995
Sales $543,617 $563,281 $1,787,873 $1,867,636
Gross profit (a) 167,163 154,692 547,421 556,929
expense (a) (136,035) (132,890) (439,003) (436,250)
Earnings before LIFO
amortization of excess
unusual items, interest
expense, income tax
on debt discharge
(EBITDA) 31,128 21,802 108,418 120,679
LIFO provision (300) (225) (1,000)
amortization (16,547) (21,204) (57,719)
Amortization of excess
reorganization value (24,578) -- (59,405) --
Unusual items (b) (15,000) (12,512) (38,127)
Earnings (loss) before
income tax benefit and
extraordinary gain on
debt discharge (25,297) (12,139) (47,833) 40,193
Interest expense (23,537) (47,379) (75,307)
Loss before income
tax benefit and
extraordinary gain on
debt discharge (48,834) (59,518) (123,140)
Income tax benefit 7,840 -- 13,212 --
Loss before extraordinary
gain on debt discharge (40,994) (59,518) (109,928)
Extraordinary gain on
debt discharge -- -- 854,785 --
Net income (loss) (40,994) (59,518) 744,857
stock dividends -- (6,469)
Net income (loss)
applicable to common
stock $(40,994) $(65,987) $744,857
(a) Gross profit and operating and administrative expenses reflect
certain reclassifications made for the 40 and 12 week periods
ended Jan. 7, 1995 to conform to current year presentation.
(b) Unusual items consist of a (i) a $15,000 provision for warehouse
closures for the 12 and 40 weeks ended Jan. 6, 1996, (ii) a
$10,630 provision for store closures for the 12 and 40 weeks
ended Jan. 7, 1995, (iii) $18,627 of reorganization expense for
the 40 weeks ended Jan 6, 1996, (iv) $1,882 of reorganization
expense for the 12 and 40 weeks ended Jan 7, 1995 and (v) a
$4,500 provision for voluntary resignation incentives for the
40 weeks ended Jan. 6, 1996.
NEWHALL, Calif., Feb. 9, 1996 - Huntway Partners, L.P.
(NYSE: HWY) reported today that it earned $543,942, or $.05 per
unit, in the fourth quarter of 1995 excluding a $9,492,000, or $.82
per unit, write down of the Sunbelt Refinery in Arizona. As a
result of the write down, the company reported a loss for the
quarter of $8,948,058, or $.77 per unit, compared to a net loss of
$1,174,777, or $.10 per unit, in the fourth quarter of 1994.
Revenues in the fourth quarter of 1995 were $22,384,728 versus
$19,082,472 in the same quarter a year ago, when results were
negatively impacted by unusually high levels of rainfall in
The company attributed the better operating performance to
improved asphalt pricing and margins resulting from the backlog of
road work created due to the heavy rainfall that continued into the
first half of 1995. Prices and margins for the company's light-end
products also improved in the fourth quarter commensurate with
higher margins for finished gasoline and diesel fuel in the state.
Huntway President and Chief Executive Officer, Juan Forster,
said, "The company expects demand for its products to continue
strengthening, benefiting Huntway's operating performance throughout
1996." He added that Huntway decided to write down the Sunbelt
refinery because it appears unlikely that it will operate Sunbelt as
a full-blown refinery in the future, but very well may operate it as
a terminal, possibly as early as next year. The company wrote down
the carrying value of the refinery in accordance with FASB 121,
"Accounting for the Impairment of Long-Lived Assets."
For the year ended December 31, 1995, Huntway reported a loss of
$14,461,762, or $1.25 per unit, on revenues of $83,068,985 versus a
loss of $3,003,740, or $.26 per unit, on revenues of $79,139,334 in
1994. Excluding the Sunbelt write down, the 1995 loss was
$4,969,762, or $.43 per unit.
Forster said that operating results for the full year were
affected both by the devaluation of the Mexican Peso, which severely
depressed Huntway's export business, and the record rains in
Northern and Southern California. However, the backlog of road work
unleashed in the last two quarters of 1995 resulted in Huntway
earning $704,387 before the Sunbelt write down on revenues of
$49,729,741 for the second half of 1995 versus a 1994 second-half
loss of $971,319 on revenues of $45,192,196.
He added that talks continue between Huntway and its lenders on
a restructuring of its debt and that the company expects to close
the transaction sometime in the first half of 1996.
Huntway Partners, L.P. owns and operates two refineries at
Wilmington and Benicia, California, which primarily process
California crude oil to produce liquid asphalt for use in road
construction and repair, as well as smaller amounts of gas oil,
naphtha, kerosene distillate and bunker fuels. The company's third
refinery, at Coolidge, Arizona, which is temporarily shut down, is
configured to produce a similar product slate, as well as jet fuel
and diesel fuel. It may be reopened as a terminal in 1997 or
The company's preference units are traded on the New York Stock
Exchange under the symbol HWY.
HUNTWAY PARTNERS, L.P.
SELECTED FINANCIAL DATA
FOR THE THREE AND TWELVE MONTHS ENDED
DECEMBER 31, 1995
(in Thousands Except Per Units Data)
Three Months Ended Twelve Months Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
1995 1994 1995 1994
Revenues $22,385 $19,082 $83,069 $79,139
Crude Oil and
Processing 18,979 17,477 76,644 70,621
Impairment Loss on
Refinery Assets 9,492 -- 9,492 --
Selling and Administration 999 977 3,819 4,182
Interest Expense 1,293 1,241 5,177 4,984
Amortization 570 562 2,399 2,356
Net (Loss) $(8,948)(a) $(1,175) $(14,462)(a) $(3,004)
Loss Per Unit $(0.77)(a) $(0.10) $(1.25)(a) $(0.26)
Outstanding 11,673 11,673 11,673 11,673
Barrels Sold 1,129 1,084 4,400 4,584
(a) Includes $9,492 or $0.82 per unit charge relating to write
down of refinery assets.
HUNTWAY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEET
December 31, December 31,
Cash $4,304 $5,984
Accounts Receivable 4,820 2,485
Inventory 3,320 4,044
Prepaid Expenses 676 749
Property, Net 58,677 69,857
Other Assets 2,595 2,677
Total Assets $74,392 $85,796
Accounts Payable $6,582 $5,984
Accrued Liabilities 3,530 2,135
Debt 94,795 93,730
Partners' Capital (30,515) (16,053)
Total Debt and Partners' Capital $74,392 $85,796
HUNTWAY PARTNERS, L.P.
CONSOLIDATED STATEMENT OF CASH FLOWS
Net Loss $(14,462) $(3,004)
Add: Depreciation and PIK Notes 2,399 6,255
Changes in Working Capital 2,136 135
Cash Provided/(Used) by Operating Activities (9,927) 3,386
Cash Provided/(Used) by Investing Activities 8,875 (669)
Cash Used by Financing Activities (628) (4,478)
Net Decrease in Cash (1,680) (1,761)
Cash at Beginning of Year 5,984 7,745
Cash at End of Year $4,304 $5,984
CONTACT: Thomas E. Siebert of Siebert & Associates, 818-865-1594;
or Warren J. Nelson, Executive Vice President and Chief Financial
Officer of Huntway Partners, 805-286-1582
PURCHASE, N.Y. Feb. 9, 1996 - href="chap11.spectrum.html">Spectrum Information
Technologies, Inc. announced earnings as reported in its
Report on Form 10-Q for the quarter ended December 31, 1995, the
third quarter of its fiscal year. Spectrum also announced that it
has filed a Proposed Consolidated Plan of Reorganization, together
with a Disclosure Statement, for itself and its Spectrum Cellular
subsidiary, in its bankruptcy case pending before the United States
Bankruptcy Court of the Eastern District of New York.
Spectrum reported an operating loss of $1.4 million on revenues
of $504 thousand for the three month period ended December 31, 1995,
as compared with an operating loss of $3.3 million on revenues of
$953 thousand for the same quarter last fiscal year. For the nine
months of fiscal 1996 ended December 31, 1995, Spectrum reported
operating losses of $3.4 million on revenues of $2.2 million,
compared to an operating loss of $8.5 million with revenues of $2.2
million for the same period last fiscal year.
For the nine months ended December 31, 1995, Spectrum reported a
net loss of $123 thousand. The Company reported a loss from
continuing operations of $4.2 million for the nine month period, of
which $2.5 million was attributable to professional fees associated
with its Chapter 11 case. This loss from continuing operations was
offset by $4.1 million in gains from the sale of non-core assets and
In January 1995, Spectrum filed a voluntary Chapter 11 petition
in the Bankruptcy Court and has since been reorganizing its
business. The Proposed Plan of Reorganization and Disclosure
Statement filed today describe Spectrum's proposed business plan and
recapitalization immediately following confirmation of the Plan.
The Disclosure Statement discusses Spectrum's strategy to shift its
focus from a licensing and royalty business to a wireless
communications software business. Consistent with the agreement in
principle on a framework to settle the class action securities
litigation that has been pending against the Company since 1993, the
Proposed Plan of Reorganization, if approved, would result in a
substantial dilution to holders of Spectrum common stock. The
Proposed Plan does not include outside investment, which would have
further diluted the current shareholders' interests. The Proposed
Plan is being discussed with the committee representing Spectrum's
unsecured creditors and may be amended before the hearing on the
adequacy of the Disclosure Statement, which is scheduled for March
7, 1996 at 11:00 a.m. before the Bankruptcy Court. Following court
approval, Spectrum will distribute copies of the Plan and Disclosure
Statement to its shareholders and creditors.
CONTACT: Media -- Michael Freitag of Kekst and Company,
212-593-2655, or Investors - Investor Relations of Spectrum
Information Technologies, 914-251-1800, ext. 182