SAN FRANCISCO, Calif. -- Feb. 14, 1996 -- Catellus
Development Corporation (NYSE:CDX) today reported 1995 operating
income before depreciation of $65.6 million compared to $59.3
million for 1994.
The Company also reported total asset sales of $65.4 million,
including $50.4 million in the fourth quarter of 1995, putting it
ahead of schedule in achieving its goal of $100 million of non-
strategic land sales by December 31, 1996. The related gain on
asset sales for 1995 was $33.7 million versus $13.3 million for
1994. The Company also announced that it is taking a non-cash, pre-
tax $102.4 million charge against fourth quarter earnings, including
$84.8 million resulting from the Company's decision to terminate the
1991 Development Agreement for its Mission Bay project in San
Francisco.
As a result of the above, Catellus is reporting a net loss of
$33.0 million for 1995 compared to a loss of $2.4 million for 1994.
After preferred dividends, the net loss to common stockholders was
$56.8 million, or $.78 per share, compared to $26.3 million or $.36
per share in 1994.
During 1995, the Company also reduced its total debt by a net
$34.5 million. This net reduction represents the difference between
$68.5 million of principal reductions on existing borrowings and $34
million of new borrowings which funded the development of pre-leased
industrial and retail buildings. It is expected that the debt
service of the new borrowings will be covered by the cash flow from
the completed buildings; therefore, the Company's future operations
should be improved by the interest savings on the $68.5 million of
principal reductions.
Operating Income
The improvement in operating income before depreciation resulted
from the overhead reduction program initiated at the end of 1994, as
well as increased rental income.
In November 1994, the Company implemented significant staff
reductions and reorganized to lower its cost structure. These
reductions, when combined with other cost-reduction measures,
resulted in annual cost savings for 1995 of approximately $10.1
million. General and administrative costs declined by $3.7 million;
overhead associated with operating the portfolio declined by $3.4
million, and overhead associated with selling properties declined by
$1.5 million. In addition, the Company has benefited by a $1.5
million reduction in overhead costs associated with the Company's
development activities.
The Company's income producing property portfolio increased from
13.6 million square feet at the end of 1994 to 14.1 million square
feet at the end of 1995 and was 94.4% leased, compared to 95% at the
end of 1994. The contribution to operating income from these
properties and from ground leases increased from $70.8 million in
1994 to $73.5 million in 1995. This increase was primarily due to
the completion of the East Baybridge shopping center in late 1994
and increased operating income from the industrial portfolio,
partially offset by lower income for the Company's office portfolio.
In addition, the 1994 results include $1.3 million relating to
operating properties sold in 1994.
Equity in earnings of joint ventures decreased from $8.0 million
in 1994 to $7.0 million in 1995; however, the cash distributions
from these joint ventures increased from $7.1 million in 1994 to
$9.9 million in 1995. The increase in cash distributions was due to
significantly improved earnings in 1994 and 1995 from one hotel
joint venture for which partnership distributions were made in 1995.
Property Sales
In October 1995, the Company announced a goal of selling $100
million of non-strategic land assets over a 15 month period ending
December 31, 1996. Sales totalling $47.1 million closed in the
fourth quarter, and the Company had contracts for the sale of an
additional $23.6 million at December 31, 1995. According to Nelson
C. Rising, President and Chief Executive Officer: "We are well ahead
of target in achieving our sales goal for the 15 month period. It
is particularly encouraging that the sales prices achieved in 1995
were equivalent to 129% of the December 31, 1994 current value for
the properties sold."
Total asset sales in 1995 were $65.4 million consisting of $62.2
million of non-strategic land assets and $3.2 million of developed
industrial property. In 1994 total asset sales were $53.8 million
which included $21.5 million of income producing properties.
In addition to its non-strategic land assets, the Company had
open contracts for the sale of $21.1 million of other properties at
December 31, 1995.
Development Activities
The Company significantly increased development activities in
1995. The Company commenced construction on 911,000 square feet of
new development, compared to 381,000 in 1994. In addition, at
December 31, 1995, the Company had signed leases for new development
totaling 648,000 square feet for which construction will begin in
1996.
In addition to its major land development projects, the Company
will retain sufficient land in Dallas, metropolitan Chicago, Phoenix
and Northern and Southern California, which will in the aggregate
accommodate over 20 million square feet of new industrial
development. The balance of the industrial land portfolio is
included in the Company's land sale program.
Charge against earnings
In 1991, Catellus and the City and County of San Francisco
entered into a Development Agreement for Mission Bay. The agreement
provided for the development of 4.8 million square feet of office
space, market rate and affordable housing, retail and industrial
uses.
The Company's new management team has completed an analysis of
the implications of the 1991 Development Agreement in light of
current and anticipated market conditions and projected construction
costs and has concluded that the financial obligations imposed by
the 1991 Development Agreement render the project uneconomic.
Management therefore elected to terminate the 1991 Development
Agreement and seek approval of a revised entitlement package which
would include: more housing and retail and less office space; a
phased development approach which would require less upfront
investment and the use of tax increment financing, as provided by
redevelopment law to finance a significant portion of the public
infrastructure.
The $84.8 million charge for Mission Bay represented the write-
off of certain previously capitalized interest and pre-development
costs associated with the 1991 Development Agreement. The revised
carrying value of Mission Bay represents management's best estimate
of its fair value, assuming the Company is successful in re-
entitling the property, and approximates the amount included in the
Company's current value reporting for December 31, 1994, less the
anticipated costs of obtaining new entitlements.
According to Rising: "Mission Bay remains an attractive
development opportunity. It is an extraordinary property and the
economic conditions in San Francisco continue to improve. However,
the 1991 Development Agreement was entered into in a different era
and the entitlements and the financial obligations cannot be
economically justified in light of current and projected economic
conditions. We believe that an alternative approach can satisfy
both a market need and the community's interests and enable the
Company to achieve its economic objectives. Termination of the 1991
Development Agreement is a necessary step to achieve this result."
In the future, the Company will not capitalize interest and
property taxes relating to Mission Bay until it has received revised
entitlements and commences development. As a result, the allocated
amount of interest to Mission Bay ($16.3 million for 1995), which
historically has been capitalized, will be expensed.
The Company has taken an additional charge against earnings of
$17.6 million relating to other property where the carrying costs
exceed what management expects to recover through the anticipated
sale of such property.
Other Non-Recurring Items
In addition to the charge against earnings discussed above, the
1995 results included income of $6.5 million for the favorable
reversal of a litigation award and a $7.4 million charge to
environmental expense as a result of management's reassessment of
potential environmental exposures. The 1994 results included a $3.1
million restructuring charge and a $24.1 million property write-off.
Current Value of Company's Assets
The Company also announced its decision to discontinue the
practice of providing a supplemental current value balance sheet.
In the past, this disclosure was an attempt to address the
difference between the low historical cost of the Company's assets
and their current value. However, the current value process is
expensive and has significant limitations. In particular, short-
term values can fluctuate resulting from changes in interest rates,
capitalization rates and development assumptions that are not
necessarily indicative of the long term value of the Company's
portfolio. Management believes that, over time, a more relevant
measure of long-term value of the Company is its growth in cash
flow.
For 1995, the Company will provide supplemental current value
information on its land assets and joint venture investments (along
with an appraiser's opinion) and will provide expanded financial
data so that investors can better evaluate the performance of its
income producing assets. In future years, the Company expects to
discontinue current value reporting altogether.
As of December 31, 1995, the Company's land portfolio and joint
venture portfolio had a current value of $1.039 billion compared to
$1.037 billion for the same assets in 1994. Although the total
value was relatively unchanged, the Company experienced increased
values for its joint venture investments and portions of its
industrial development portfolio. These increases were partially
offset by reductions in certain of the Company's larger land
parcels.
Fourth Quarter Results
For the fourth quarter, Catellus reported operating income
before depreciation of $16.5 million compared to $14.2 million in
the fourth quarter of 1994. The $2.3 million increase primarily
resulted from the overhead reduction program initiated at the end of
1994 and increased rental revenue.
Fourth quarter 1995 and 1994 results included the property write-
downs, litigation awards and restructuring charges described
earlier. The 1995 fourth quarter reflects a $5.2 million charge to
environmental expense, as a result of management's reassessment of
potential environmental exposures. As a result, Catellus is
reporting a net loss of $44.3 million compared to a loss of $15.5
million in 1994. After preferred dividends, the net loss to common
stockholders was $50.2 million, or $.69 per share, compared to a
loss to common stockholders of $21.5 million, or $.29 per share, in
1994.
1995 -- A year of major changes for Catellus
Mr. Rising concluded: "We are very pleased with the progress of
the Company in 1995. We have increased our operating income,
reduced debt and expanded our capabilities to position Catellus for
further growth. The land sales program is ahead of schedule and we
continue to work towards our goal of eliminating the Company's
operating deficits by the fourth quarter of 1996. While the
termination of the 1991 Development Agreement resulted in a
significant charge against earnings, we believe this was an
essential step in order to realize the value of this asset over
time.
"One of the most significant accomplishments for 1995 was our
ability to attract several outstanding new people to our management
team. In order to successfully implement our new Strategic Plan,
the Company needs to expand its core competencies and attract,
motivate and retain the best possible employees."
Recognizing this, the Board has approved a new compensation plan
which features relatively modest base salaries and significant cash
incentives tied to the achievement of specific goals which increase
stockholder value. The long term incentives include substantial
stock options with a price vesting feature which is geared to
increasing stock price.
The statements contained herein which are not historical facts
are forward-looking statements based on economic forecasts,
strategic plans and other factors which, by their nature, involve
risk and uncertainties. In particular, among the factors that could
cause actual results to differ materially are the following:
business conditions and general economy; competitive factors;
political decisions affecting land use permits, interest rates and
other risks inherent in the real estate business. For further
information on factors which could impact the Company and the
statements, reference is made to the Company's filings with the
Securities and Exchange Commission.
Catellus Development Corporation is a full service real estate
company that owns, manages and develops real estate for its own
account and others. The Company's portfolio includes 14.1 million
square feet of income producing property, 5,300 acres of land
leases, interests in nine joint ventures and 855,000 acres of land
at December 31, 1995.
CATELLUS DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Year ended Three month ended
December 31, December 31,
1995 1994 1995 1994
(Unaudited)
Rental revenues $ 108,068 $ 104,432 $ 27,158 $ 26,152
Property operating costs 39,576 39,749 11,190 10,220
Gain on sales of property 33,742 13,307 24,840 943
Other income (expense)
Equity in earnings of
joint ventures 7,035 7,982 2,118 1,219
Management and development
fee income. 1,924 2,151 352 704
General and administrative
expense (11,841) (15,550) (1,922)
(3,611)
Interest expense, net (21,988) (20,932) (5,338)
(5,642)
Depreciation and
amortization (27,990) (28,577) (7,361)
(7,089)
Adjustment to carrying
value of property (102,400) (24,100) (102,400)
(24,100)
Other, net (1,494) (2,770) 342
(4,057)
------- ------ ------- ------
(156,754) (81,796) (114,209) (42,576)
Loss before taxes (54,520) (3,806) (73,401)
(25,701)
Income taxes (benefit) (21,518) (1,359) (29,142)
(10,152)
Net loss (33,002) (2,447) (44,259)
(15,549)
Preferred stock dividends 23,813 23,813 5,954 5,954
Net loss applicable
to common stockholders $ (56,815) $ (26,260) $ (50,213) $
(21,503)
Net loss per share of
common stock $ (0.78) $ (0.36) $ (.69) $
(.29)
Average number of
common shares 72,967 72,967 72,967 72,967
CATELLUS DEVELOPMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31,
1995 1994
Assets
Properties $ 1,191,679 $ 1,248,398
Less accumulated depreciation (184,228) (161,279)
1,007,451 1,087,119
Other assets and deferred charges 44,530 49,584
Notes receivable 7,550 7,961
Accounts receivable, less allowances 12,985 10,712
Short-term investments -- 32,645
Restricted cash and investments -- 2,422
Cash and cash equivalents 27,743 16,920
Total $ 1,100,259 $ 1,207,363
Liabilities and stockholders' equity
Mortgage and other debt $ 496,180 $ 530,641
Accounts payable and
accrued expenses 36,568 38,876
Deferred credits and
other liabilities 34,367 25,495
Deferred income taxes 90,270 112,662
Stockholders' equity
Preferred stock-$0.01 par value;
50,000,000 shares authorized;
3,449,999 $3.75 Series A
cumulative convertible shares
and 3,000,000 $3.625 Series B
cumulative convertible
exchangeable shares issued at
December 31, 1995 and 1994 322,500 322,500
Common stock-$0.01 par value;
150,000,000 shares authorized;
72,967,236 shares issued at
December 31, 1995 and 1994 730 730
Paid-in capital 196,525 220,338
Accumulated deficit (76,881) (43,879)
Total stockholders' equity 442,874 499,689
Total $ 1,100,259 $ 1,207,363
CATELLUS DEVELOPMENT CORPORATION
ADDITIONAL INFORMATION
(In thousands, except square feet data)
Year ended Quarter ended
December 31, December 31,
1995 1994 1995 1994
(Unaudited)
Operating Income Before Depreciation
Rental revenues $ 108,068 $ 104,432 $ 27,158 $ 26,152
Property operating
costs (39,576) (39,749) (11,190)
(10,220)
Equity in earnings of
joint ventures 7,035 7,982 2,118 1,219
Management and development
fee income 1,924 2,151 352 704
General and
administrative expense (11,841) (15,550) (1,922)
(3,611)
------ ------ ----- ------
$ 65,610 $ 59,266 $ 16,516 $ 14,244
Interest costs and preferred stock dividends
Interest Costs
Total interest costs $ 49,316 $ 48,720 $ 12,454 $ 12,333
Interest capitalized (23,559) (24,049) (6,251)
(5,665)
Interest expensed $ 25,757 $ 24,671 $ 6,203 $ 6,668
Preferred stock
dividends $ 23,813 $ 23,813 $ 5,954 $ 5,954
Development
Construction and completion (square feet)
Under construction,
beginning of period 337,136 576,000 319,600 114,000
Construction starts 910,818 381,136 440,500 337,136
Completion (605,854) (620,000)
(118,000)(114,000)
Under construction,
end of period 642,100 337,136 642,100 337,136
Development under
contract, not started
(square feet) 647,845 150,718
Sales Program
Closed sales
Non-strategic land $ 62,199 $ 32,298 $ 47,126 $ 2,810
Development properties 3,224 -- 3,224
--
Buildings -- 21,330
-- --
Ground leases -- 142 -- --
Total $ 65,423 $ 53,770 $ 50,350 $ 2,810
Backlog - sales under contract (at year-end)
Non-strategic land $ 23,585 $ 22,547
Developed properties 13,600 --
Ground leases 7,500 --
Total $ 44,685 $ 22,547
Year ended Quarter ended
December 31, December 31,
1995 1994 1995 1994
(Unaudited)
Property Operations
Net operating income by Property Type
Income producing properties
Industrial buildings $ 39,704 $ 38,813 $ 9,425 $ 9,295
Office buildings 16,483 18,399 3,882 4,532
Retail buildings 8,423 5,024 1,966 1,314
Land development 2,755 2,213 234 661
Ground leases 6,174 6,377 1,663 1,589
------ ------ ------ ------
73,539 70,826 17,170 17,391
Land holdings costs
Developable properties $(2,094) $(2,084) $(591) $(641)
Natural resources (936) (1,463) (77) (352)
Properties held for sale (2,017) (2,596) (534) (466)
(5,047) (6143) (1202) (1459)
Total $ 68,492 $ 64,683 $ 15,968 $ 15,932
Buildings owned and leasing statistics (at year-end)
(square feet in thousands)
Industrial buildings
Square feet owned 11,424 10,985
Square feet leased 10,845 10,432
Percent leased 94.9% 95.0%
Office buildings
Square feet owned 1,687 1,687
Square feet leased 1,553 1,618
Percent leased 92.1% 95.9%
Retail buildings
Square feet owned 840 837
Square feet leased 766 777
Percent leased 91.2% 92.8%
Land development
Square feet owned 100 100
Square feet leased 100 100
Percent leased 100.0% 100.0%
Total (a)
Square feet owned 14,051 13,609
Square feet leased 13,264 12,927
Percent leased 94.4% 95.0%
CONTACT: Catellus Development Corporation; Stephen P. Wallace,
415/974-4666
LOS ANGELES -- Feb. 14, 1996 -- Trimark Holdings
Inc. (NASDAQ/NNM:TMRK) Wednesday reported net revenues for its
second quarter of fiscal 1996 ended Dec. 31, 1995, of $16,844,000, a
decrease of $2,780,000, or 14 percent from $19,624,000 in the prior
year period.
The company reported a net loss of $4,490,000, or $1.02 per
share for the quarter, compared with net earnings of $255,000, or 6
cents per share, for the quarter ended Dec. 31, 1994.
The decrease in net revenues was primarily due to decreases in
revenues from domestic home video which were partially offset by
increased revenues from Trimark Interactive. Net income was
affected by writedowns associated with 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.
For the six-month period ended Dec. 31, 1995, the company
reported net revenues of $32,911,000, a decrease of $8,831,000, or
21 percent from the $41,742,000 reported for the comparable prior
year period. The company reported a net loss of $4,408,000, or $1
per share, compared with net earnings of $708,000, or 16 cents per
share in the prior year. The company reported a loss for the six-
month period primarily as a result of the writedowns taken in the
second quarter.
``Trimark is restructuring operations to address the rapidly
changing realities of the entertainment industry,'' stated Chairman
Mark Amin. ``The company is adapting its production and acquisition
strategies to distribute an increasing number of theatrical and
specialized films. We hope this strategy will mitigate the
difficulties which the video industry faces from product competition
and technological change.''
The company plans to continue to invest approximately $40
million in the acquisition and production of new motion picture
product annually. Trimark Pictures' current slate of motion
pictures includes 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, a broad-
based entertainment company which 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.
Trimark Holdings Inc. and Subsidiaries
(In thousands, except per-share data)
(Unaudited)
Six Months Ended Three Months Ended
Dec. 31, Dec. 31,
1995 1994 1995 1994
Net revenues:
Domestic home video $17,659 $27,834 $ 9,443 $12,934
Theatrical distribution 178 62 178 7
Television distribution 1,984 1,216 999 514
Foreign all media 10,989 11,771 4,133 5,317
Interactive all media 2,101 859 2,091 852
Net revenues $32,911 $41,742 $16,844 $19,624
Film costs and
distribution expenses 33,525 34,719 20,901 16,158
Gross (loss) profit (614) 7,023 (4,057) 3,466
Expenses (income):
Selling 3,119 2,504 1,676 1,345
General and administrative 2,926 2,665 1,586 1,397
Bad debt (85) 297 (397) 82
5,960 5,466 2,865 2,824
Operating (loss) earnings (6,574) 1,557 (6,922) 642
Other (income) expenses:
Interest income and
expense, net 460 558 211 318
Minority interest (38) (161) (1)
(93)
422 397 210 225
(Loss) earnings before
income taxes (6,996) 1,160 (7,132) 417
Income taxes (2,588) 452 (2,642) 162
Net (loss) earnings $(4,408) $ 708 $(4,490) $ 255
Net (loss) earnings per
common share $ (1.00) 16 cents $ (1.02) 6 cents
Average common and common
equivalent shares
outstanding 4,420 4,508 4,399 4,505
ST. PAUL, Minn. -- Feb. 14, 1996 -- Eltrax Systems,
Inc. today announced that its bid to acquire substantially all of
the assets of Applied Computing
Devices (ACD) of Terre Haute,
Indiana, was not approved by the Bankruptcy Court.
Mack Traynor, Eltrax President and CEO, stated, "We are
disappointed that the bidding process for the ACD assets reached a
level at which we were unwilling to go. These assets represented a
marvelous opportunity for Eltrax, but only at the right price. The
Company will continue its efforts to acquire other companies and we
are confident the right deal will come along."
Eltrax Systems, Inc., headquartered in St. Paul, markets its
products nationwide. The Company went public in December, 1992 and
its shares are trade on the Nasdaq Smallcap Market under the symbol
ELTX.
CONTACT: Eltrax Systems, Inc.;
Mack V. Traynor, III, 612/633-8373
THE WOODLANDS, Texas -- Feb. 14, 1996 -- href="chap11.wrt.html">WRT Energy
Corp. (NASDAQ/NMS:WRTE, WRTEP) Wednesday announced that it has
commenced proceedings in Chapter 11 Reorganization in the United
States Bankruptcy Court for the Western District of Louisiana in
Opelousas.
Raymond P. Landry, chairman of the board said, "While the
company's board of directors, management and employees regret that
this action has become necessary, every alternative for the future
conduct of the company's operations has been carefully evaluated,
and the board has concluded that Chapter 11 proceedings offer the
best prospects for all affected constituencies.
"We appreciate the genuine support which many shareholders,
bondholders and other creditors have exhibited toward the company in
these difficult recent months as we have worked to avoid this
action."
Under court protection, the company will continue to operate as
a debtor-in-possession and will be afforded an exclusive period
during which management intends to formulate and file a plan of
reorganization with the court. While operating in Chapter 11,
proceedings involving claims against the company will automatically
be stayed, and the company will continue to operate as in the past.
Landry also added that Jefferies & Co. Inc. has been retained as
financial adviser to the company in connection with formulation of a
plan of reorganization.
CONTACT: WRT Energy Corp., The Woodlands;
Investor Relations, 713/362-5000
CINCINNATI, Feb. 14, 1996 - Gibson Greetings, Inc.
(Nasdaq: GIBG) today reported a strong improvement in operating
income in the fourth quarter and fiscal year ended December 31,
1995. These results reflect the impact of the previously announced
sale of Cleo Inc. (Cleo), the Company's wholly-owned gift wrap
subsidiary, to CSS Industries, Inc., which was completed in November
1995.
On a pro forma basis excluding Cleo, Gibson had operating income
of $11.3 million on revenues of $119.2 million for the fourth
quarter of 1995, compared with an operating loss of $18.9 million on
revenues of $93.7 million in the same period a year ago. The
Company's pro forma net income for the fourth quarter 1995 was $4.8
million, or $0.29 per share, compared with a net income of $3.3
million, or $0.20 per share, in the 1994 fourth quarter.
Gibson's Board of Directors also announced that it has decided
to terminate the previously announced process of exploring possible
expressions of interest in the Company as it had not received an
appropriate offer. The Board believes that Gibson is well
positioned to move forward as an independent company in view of the
successful efforts to control costs and improve the profitability of
the greeting card business in 1995, as well as the Company's healthy
year-end financial position, due in part to the sale of Cleo, and
that the conclusion of the process will eliminate any uncertainties
on the part of our customers and associates.
In addition, the Board determined that this was an appropriate
time to seek new management direction for the Company and announced
the severance of Benjamin J. Sottile as Chairman of the Board and
Chief Executive Officer. A search will commence immediately both
within and outside the Company for a new Chief Executive. In the
interim, the Board has established an office of the Chairman with
Mr. Albert R. Pezzillo, current Chairman of the Executive Committee,
serving as Chairman and Chief Executive and Board members Frank
Stanton and C. Anthony Wainwright serving as members of the
Chairman's office.
For the full year of 1995 on a pro forma basis excluding Cleo,
Gibson had operating income of $38.4 million on revenues of $388.9
million, compared with an operating loss of $11.8 million on
revenues of $359.4 million in the same period last year. The
Company's pro forma net income for the full year, excluding Cleo,
was $16.3 million, or $1.00 per share, compared with a net loss of
$9.7 million, or $0.60 per share in 1994.
The Company's increase in revenues for the full year, excluding
Cleo, reflected higher domestic and international greeting card
revenues, as well as higher revenues from The Paper Factory of
Wisconsin, Inc. (The Paper Factory). Additionally, the increase in
operating income for the year reflects the positive impact of an
improved gross margin for greeting cards, as well as cost reduction
efforts which resulted in lower selling and marketing expenses.
For the fourth quarter of 1995, including Cleo, Gibson reported
net income of $7.8 million, or $0.49 per share, on revenues of
$198.7 million, compared with a net loss of $1.2 million, or $0.07
per share, on revenues of $211.7 million in the same period a year
ago. The 1995 fourth quarter results include Cleo's operations
through November 14, 1995.
For the year ended December 31, 1995, including Cleo, Gibson
reported a net loss of $46.5 million, or $2.86 per share, on
revenues of $540.8 million, compared with a net loss of $28.6
million, or $1.77 per share, on revenues of $548.8 million in the
same period a year ago. The 1995 results include a loss from Cleo's
operations through November 14, 1995 and a charge of $54.5 million,
or $3.35 per share, after-tax, for the disposition of Cleo. The
1994 results included a $1.6 million gain, net of taxes, associated
with derivative transactions, significant charges for inventory
obsolescence and sales returns and allowances at Cleo, a pretax
charge of $16.2 million from write-offs associated with the Chapter
11 bankruptcy filing of F & M Distributors, Inc., and a $1.7 million
pretax charge for severance costs.
The Paper Factory recorded a modest profit for the year.
Gibson's operations in the United Kingdom experienced a modest loss
and continued to grow as a result of increased distribution which,
coupled with cost reduction efforts, resulted in a narrower loss
than a year earlier. In view of the continuing poor economic
conditions and devaluation of the peso in Mexico, the Company
recorded a full reserve against its Mexican subsidiary.
Stockholders' equity at year-end was $230.2 million, while the
ratio of long-term debt to total capitalization was 17.4 percent.
Book value per share was $14.31.
Long-term debt was $48.5 million at December 31, 1995, down from
$63.2 million at December 31, 1994, due to the sale of Cleo. Debt
due within one year decreased $90.2 million to $26.9 million at year-
end compared to the same period in 1994, reflecting in part proceeds
from the sale of Cleo. At December 31, 1995, the Company's cash and
equivalents totaled $15.6 million. In January 1996, Gibson received
the proceeds of a note from the sale of Cleo which, coupled with
holiday collections, brought the Company's short-term marketable
securities to $41.4 million at January 31, 1996.
Gibson Greetings, Inc. is the world's second largest publicly
owned manufacturer and distributor of everyday and seasonal greeting
cards, gift wrap and related social expression products.
Gibson Greetings, Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Amounts in thousands except per share amounts - Unaudited)
Three Months Year
Ended December 31, Ended December 31,
1995 1994 1995 1994
REVENUES $119,151 $93,673 $388,884 $359,408
COSTS AND EXPENSES:
Operating Expenses:
Cost of products sold 48,149 47,283 148,534 149,619
Selling, distribution
and administrative
expenses 59,678 65,250 201,914 221,606
Total operating
expenses 107,827 112,533 350,448 371,225
Operating income
(loss) before
financing and
derivative
transaction
expenses 11,324 (18,860) 38,436 (11,817)
Financing and
derivative
transaction
expenses:
Interest expense,
net 1,918 2,126 8,572 6,441
Gain on derivative
transactions, net - (14,888) - (1,641)
Total financing and
derivative
transaction expenses,
net 1,918 (12,762) 8,572 4,800
INCOME (LOSS) BEFORE
INCOME TAXES 9,406 (6,098) 29,864 (16,617)
Income taxes/benefit 4,589 (9,399) 13,588 (6,937)
NET INCOME (LOSS) $4,817 $3,301 $16,276 $ (9,680)
NET INCOME (LOSS)
PER SHARE $ 0.29 $ 0.20 $ 1.00 $ (0.60)
Average common
shares and
equivalents
outstanding 16,306 16,111 16,243 16,130
Gibson Greetings, Inc.
Condensed Consolidated Statements of Operations
(Amounts in thousands except per share amounts - Unaudited)
Three Months Year
Ended December 31, Ended December 31,
1995 1994 1995 1994
REVENUES $198,741 $211,692 $540,821 $548,795
COSTS AND EXPENSES:
Operating Expenses:
Cost of products
sold 109,494 143,993 268,702 310,039
Selling,
distribution
and administrative
expenses 70,205 90,359 239,922 276,147
Loss on sale of
Cleo, Inc. 254 - 83,012 -
Total operating
expenses 179,953 234,352 591,636 586,186
Operating income
(loss) before
financing and
derivative
transaction
expenses 18,788 (22,660) (50,815) (37,391)
Financing and
derivative
transaction
expenses:
Interest expense, net 3,091 3,800 12,263 9,834
Gain on derivative
transactions, net - (14,888) - (1,641)
Total financing and
derivative
transaction expenses,
net 3,091 (11,088) 12,263 8,193
INCOME (LOSS) BEFORE
INCOME TAXES 15,697 (11,572) (63,078) (45,584)
Income taxes/benefit 7,890 (10,386) (16,589) (16,981)
NET INCOME (LOSS) $7,807 $(1,186) $(46,489) $(28,603)
NET INCOME (LOSS)
PER SHARE $ 0.49 $ (0.07) $ (2.86) $ (1.77)
Average common
shares and
equivalents
outstanding 16,306 16,111 16,243 16,130
SELECTED BALANCE SHEET DATA
December 31, December 31,
1995 1994
Current Assets $204,117 $381,753
Current Liabilities $95,833 $230,625
Long-Term Debt $48,533 $63,233
Equity $230,242 $277,500
MIDLAND, Mich., Feb. 14, 1996 - A Wayne County Circuit
Court jury today found approximately 30 insurance companies liable
for coverage including costs of defense and settlement of href="chap11.dow.html">Dow
Corning Corporation's silicone breast implant claims and
lawsuits in
the United States and overseas. This decision ends a three-month
trial presided over by Judge Robert J. Colombo. Jr. This verdict
leads the way to resolution of one of Dow Corning's largest assets
- access to more than $400 million in product liability insurance
coverage.
"This decision marks a major positive milestone for Dow Corning
and will help us move through the Chapter 11 process, as we prepare
our financial reorganization plan," said Richard A. Hazleton, Dow
Corning chairman and chief executive officer. "Once again, we see
science - and now the legal system - reinforcing the fact that
silicone breast implants do not cause disease."
Local counsel for Dow Corning, Robert A. Marsac, commending the
jury for its conduct during the lengthy and complex case, commented,
"We're very satisfied with the verdict the jury has reached. The
result of this favorable verdict vindicates Dow Corning legally,
with respect to its products, and upholds the integrity of Dow
Corning's people."
"The case was long and complex and the jurors did an outstanding
job of comprehending, remaining attentive and ultimately deciding
the case. This action will allow Judge Colombo to move swiftly in
determining the last remaining issues - damages and defense costs
for which Dow Corning is entitled to be reimbursed," Marsac
concluded.
In addition to this decision, Dow Corning previously has settled
with several other insurers for approximately $545 million and
agreed coverage-in-place limits of approximately $630 million.
CONTACT: Barbara J. Muessig, 517-496-8841, or Michael Jackson,
517-496-6443, both of Dow Corning; or Moira M. Horne, of PR
Associates, 313-963-3396
CINCINNATI, Feb. 14, 1996 - Eagle-Picher Industries (OTC:
EPIHQ.U) today announced that for the fiscal year ended November 30,
1995, sales increased to $848.5 million from $756.7 million, a gain
of 12 percent. Operating income increased to $63.1 million from
$58.3 million, a gain of 8 percent.
During the third quarter of 1995, the Company filed a motion
with the United States Bankruptcy Court asking the Court to estimate
the Company's liability for present and future asbestos-related
personal injury claims for the purpose of determining the
appropriate distributions to creditor and shareholder classes under
a plan of reorganization. In December 1995, the Bankruptcy Court
rendered its decision (the Estimation Ruling) and ruled that the
Company's estimated liability for such claims is in the aggregate
amount of $2,502,511,000. Because the Bankruptcy Court's
determination was larger than the $1.5 billion previously agreed to
for settlement purposes, the Company recorded a provision in the
fourth quarter of 1995 of $1.0 billion to increase the asbestos
liability subject to compromise to $2.5 billion. The increase in
this provision produced the large net loss in 1995. The Company
indicated that the provision is merely an accounting entry and will
in no way adversely affect the Company's operations, its cash flow
or its ability to fund investment opportunities required to serve
its customers.
Thomas E. Petry, Eagle-Picher Chairman, said that, "the
operating performance for 1995 was particularly noteworthy when
compared with 1994 results as fiscal 1994 was a very successful year
for the Company. On the operating front, the Industrial Group and
the Machinery Group experienced increases in sales and operating
income over 1994 results, while the Automotive Group experienced
higher sales volume but lower operating income. Generally, all
operations in the Industrial Group reported higher levels of sales
and operating income. As reported previously, due in part to the
diverse nature of the operations in the Industrial Group, it tends
not to experience cyclical swings as it serves a range of consumer
nondurable markets such as the food and beverage industries, and the
commercial aerospace, construction, and recreational markets. The
Machinery Group enjoyed significant increases in sales and operating
income. The major reason for this success was the continuing
improvement by operations manufacturing earth moving and materials
handling equipment. The major reasons for the lower level of
operating income in the Automotive Group were intense pressure by
major customers demanding price concessions, the resistance by
customers to accept cost increases on a timely basis, and start-up
costs associated with new business.
"Under the reorganization plan filed in the Company's pending
chapter 11 case in February 1995, (the Plan) all present and future
asbestos and lead-related personal injury claims were to be
channeled to and satisfied from the assets of an independently
administered trust (the PI Trust). Excluding claims entitled to
priority in payment under the Bankruptcy Code and "convenience
claims" (claims of unsecured creditors which are, or are reduced to,
$500 or less) all other pre-petition unsecured creditors and the PI
Trust were to receive under the Plan their ratable share of certain
distributions of cash, debt securities, and common stock of
reorganized Eagle-Picher (collectively, the Plan Consideration).
These ratable shares were to be proportionate to their share of the
aggregate amount of the pre-petition liabilities of the Company,
which was estimated by the Company at that time to be approximately
$1.657 billion. Of this amount, $1.5 billion (approximately 91
percent) represented the liability attributable to all claims to be
channeled to the PI Trust and that amount was utilized in the Plan
to determine the PI Trust's ratable share of the Plan Consideration.
The balance of $157 million (approximately 9 percent) represented
the anticipated allowed amount of environmental and the other pre-
petition unsecured claims sharing in the Plan Consideration.
"In terms of the reorganization effort, based on the Bankruptcy
Court's Estimation Ruling, the Company intends to file with the
Bankruptcy Court as soon as practicable an amended plan of
reorganization (the Amended Plan) and an accompanying proposed
amended disclosure statement. It is anticipated that the Amended
Plan essentially will modify the Plan filed in February 1995 so as
to reflect in the allocation of the distributions of Plan
Consideration the effect of the Estimation Ruling. More
specifically, based upon an aggregate amount of allowed pre-petition
unsecured claims to share in the Plan Consideration of approximately
$2.663 billion, it is anticipated that under the Amended Plan the PI
Trust would receive approximately 94 percent of the Plan
Consideration and the other unsecured creditors the balance.
"The Company is hopeful that it can move forward expeditiously
with the filing, confirmation and consummation of the Amended Plan.
In view of the contested nature of the proceedings, however,
including the current attempts to appeal the Estimation Ruling, it
is not possible to predict when a reorganization plan will be
confirmed and when the Company will emerge from chapter 11.
"As noted earlier, the Company has completed an outstanding
year. Capital expenditures were at a high level as a result of an
abundance of new business opportunities, all of which were financed
from internally generated funds. The Company's liquidity at the end
of 1995 was exceptionally strong and healthy. There are indications
that 1996 North American automotive production could equal that of
1995. A reduction in schedules for certain capital goods items is
anticipated. Based upon forecasts from the operations, a modest
increase in sales is expected with continuing pressure on profit
margins as the economy approaches the peak of the business cycle."
The figures follow:
EAGLE-PICHER INDUSTRIES, INC.
(Data in thousands except per share)
Three Months Ended November 30 1995 1994
Net sales $214,844 $195,802
Operating income 14,805 12,737
Provision for asbestos litigation (1,005,511) --
Other non-operating items (1,245) (280)
Reorganization items (1,337) (442)
Income (loss) before taxes (993,288) 12,015
Net income (loss) (997,373) 11,308
Net income (loss) per share (90.33) 1.03
Average shares 11,041 11,041
Year Ended November 30 (audited) 1995 1994
Net sales $848,548 $756,741
Operating income 63,087 58,281
Provision for asbestos litigation (1,005,511) --
Gain on sale of investment 11,505 --
Other non-operating items (1,727) (1,106)
Reorganization items (2,225) (3,426)
Income (loss) before taxes (934,871) 53,749
Net income (loss) (944,171) 48,749
Net income (loss) per share (85.51) 4.42
Average shares 11,041 11,041