ATLANTIC CITY, N.J., Feb. 22, 1996 - href="chap11.capital.html">Capital Gaming
International, Inc. (OTC Bulletin Board: GDFI) announced today
that
it has entered into an agreement to sell its wholly-owned
subsidiary, Crescent City Capital Development Corp. ("Crescent
City"), to Casino Magic Corp. (Nasdaq-NNM: CMAG) for $50.0 million
plus the assumption of equipment liability up to $6.5 million.
Crescent City owns the New Orleans riverboat casino, the Crescent
City Queen, and a license to conduct riverboat gaming operations in
Louisiana. Pursuant to the agreement, the Crescent City Queen is to
be delivered to Casino Magic free and clear, with all liabilities
satisfied, including trade payables and bondholder debt. Casino
magic intends to operate Crescent City's gaming license in Bossier
City, Louisiana.
Commenting on the transaction, Edward M. Tracy, the Company's
President and CEO, stated, "We are very pleased with the terms of
our agreement with Casino Magic, as well as their commitment to
gaming in Louisiana. We are confident that their proposal will be
acceptable to the Louisiana regulators and anticipate the closing of
this transaction to take place within 90 days."
The sale is contingent upon approval of the Louisiana State
Police, the Louisiana Riverboat Gaming Commission, the Bankruptcy
Court and obtaining Federal Hart-Scott-Rodino clearance.
Additionally, the Company and Casino Magic each have until March 1,
1996 to perform and complete their customary due diligence review of
each other, and either party can terminate the transaction for any
reason during that period of time.
Based in Atlantic City, New Jersey, Capital Gaming International
is a multi-jurisdictional casino development and management company
with interests in the Native American gaming market.
CONTACT: William S. Papazian, Senior Vice President and General
Counsel of Capital Gaming International Inc., 609-383-3333
CHICAGO, Feb. 22, 1996 - Duff & Phelps Credit Rating Co.
(DCR) has reaffirmed its ratings on Unisys Corporation following a
review of management's plans to regain profitability in 1996 and to
meet this year's debt retirements.
In December 1995, DCR lowered Unisys` senior debt rating from
`BB` (Double-B) to `BB-` (Double-B- Minus), the convertible
subordinated notes from `BB-` (Double-B-Minus) to `B` (Single-B),
and the convertible preferred stock from `B+` (Single-B-Plus) to
`B-` (Single-B-Minus).
Unisys Corporation remains on Rating Watch-Down, reflecting the
challenges in 1996 to implement the new organization structure, to
introduce new hardware products in a timely manner, to regain
profitability, to access the capital markets, to negotiate a new
bank agreement and to pay off debt maturities of $343 million in
third quarter 1996. Debt maturities will continue to be a heavy
burden for the three years following 1996, notably $432 million in
1997. Past performance raises some uncertainty regarding Unisys`
ability to execute its business strategy in a dynamic information
technology market, although management has a credible plan for
returning to profitability in 1996.
Results in 1995 were disappointing, with an after-tax loss of
$625 million after fourth quarter charges of $670.5 million after-
tax, revenues up a modest 4% and net cash from operating activities
only $98 million. Excluding the charges, the gross margin was lower
in all three business areas.
In response to the adverse developments, Unisys management took
the restructuring charge in fourth quarter 1995. The company
abandoned its matrix organization and established three distinct
businesses within Unisys giving greater focus to each area and
becoming more cost competitive. Two of the three businesses are
under new management as well. Management now expects $500 million of
annualized savings from the latest restructuring charge to be
achieved by yearend 1996 and $600 million by yearend 1997. Cash
outlays associated with the restructuring will be approximately $400
million in 1996 and $150 million in 1997.
Favorably, cash is at a high level of $1.1 billion entering into
1996, buoyed by the sale of Custom Defense Products to Loral for
$862 million. In addition to Unisys accessing the long-term debt
market this year, negotiating a new credit agreement will be
necessary in the first half of 1996. Unisys is not currently drawing
funds under the $325 million revolver, which expires in May 1996.
With 1995 sales of $6.2 billion, Unisys is one of the top 10
U.S.- based providers of information hardware, services and
software. End- market focus is in the financial services, public
sector and government, transportation, communications and health
information management.
Unisys had about $1.9 billion of debt and $1.6 billion of
preferred stock outstanding at December 31, 1995.
CONTACT: George J. Podrasky, CFA, 312-368-3207, or Thomas P.
Vaiana, 312-368-4557, both of Duff & Phelps Credit Rating Co.
SANTA CLARA, Calif. -- Feb. 22, 1996 -- Fresh
Choice, Inc. (Nasdaq: SALD) today reported a net loss of
$24,722,000, or $4.47 per share, for the fourth quarter of 1995 (17
weeks), including a $23.9 million charge resulting from the
restructuring plan announced in December 1995. This compared to net
income of $65,000 or $0.01 per share for the fourth quarter of 1994
(16 weeks).
Sales for the fourth quarter were $26,511,000, an increase of
$2,567,000, or 10.7%, over the fourth quarter of 1994.
The company also disclosed results for the 53 weeks of the
fiscal year ended Dec. 31, 1995. The net loss was $27,796,000, or
$5.05 per share, versus a net income of $3,198,000, or $0.58 per
share in the 52 weeks of 1994.
Sales for the year ended Dec. 31, 1995 were $84,280,000, up
9.5%, compared with $76,969,000 last year. This sales increase
included revenues from seven new restaurants opened during 1995.
Comparable real-store sales for the fourth quarter of 1995 were 7.1%
below those for the fourth quarter of 1994. This represented an
improvement over the third quarter of 1995 when comparable real-
store sales were 10.0% below the comparable prior year period and an
earlier low point of 17.2% for the first half of 1995. Comparable
real-store sales declined 12% for the full fiscal year.
Shares used in computing per share amounts for the fourth
quarter were 5,529,000 and 5,534,000 in the prior year. For the
full years, 1995 and 1994, calculations, the shares were 5,504,000
and 5,544,000 respectively.
Charles A. Lynch, chairman of Fresh Choice, said, "We had a very
difficult year, but there is good reason for optimism. With the
help of Bob Ferngren, our new chief executive officer, we came to
grips with the fundamental issues confronting the company, we
refocused our business strategies to return the company to
profitability, and we are executing them vigorously with close
attention to the economics of each restaurant.
"In addition to the improving comparable real-store sales, we
strengthened our organization dramatically. Our cost elements are
much closer to being in line. We're on target with our plan for
store closings by shutting three poor-performing units last December
and one during the first quarter of 1996.
"As we go into our next fiscal year, we'll be fine-tuning our
products which, our research tells us, continue to have strong
customer loyalty," Lynch emphasized, "and we'll be marketing them
aggressively. As part of this effort, we'll also look at
strengthening our value-price relationship.
"In addition, we'll soon announce a new design for our future
restaurants which will improve their attractiveness and dining
enjoyment for our customers. It will include a special window to
expedite take-out sales. And our product line will include name-
brand products from other companies.
"All of these improvements will be supported by strong training
programs for our employees and refocusing our internal systems to
deliver maximum efficiency," Lynch said. "We'll also be carefully
studying new locations for growth possibilities."
Fresh Choice, Inc. operates 54 casual, upscale restaurants in
California, the state of Washington, Texas and the Washington, D.C.
metropolitan area. The company's restaurants offer customers an
extensive selection of high-quality, freshly prepared traditional
and specialty salads, hot pasta dishes, soups, bakery goods, and
desserts in a self-service format.
The above statements about Fresh Choice's future plans are
forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, and are subject to
numerous risks and uncertainties. Among these risks and
uncertainties are the ability to implement and the effectiveness of
the previously announced restructuring plan; the ability of Fresh
Choice to obtain funds to pursue its future plans; competitive
pressures in the food-service marketplace; the changing tastes of
consumers; the effect of general economic conditions and the ability
to secure and retain the services of experienced personnel.
Additional risks and uncertainties may be included in Fresh Choice's
most recent annual report on Form 10-K and quarterly reports on Form
10-Q on file with the Securities and Exchange Commission.
FRESH CHOICE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Fourth Quarter Ended
Dec. 31, 1995 Dec. 25, 1994
(17 weeks) (16 weeks)
NET SALES $ 26,511 100.0% $ 23,944 100.0%
COSTS AND EXPENSES:
Cost of sales 7,313 27.6% 6,124 25.5%
Restaurant operating expenses:
Labor 8,667 32.7% 7,302 30.5%
Occupancy and other 7,869 29.7% 6,895 28.8%
Depreciation and amortization 1,714 6.5% 1,692 7.1%
General and administrative
expenses 2,583 9.6% 2,077 8.7%
Restructuring expenses 23,932 90.3% -- --%
Total costs and expenses 52,078 196.4% 24,090 100.6%
OPERATING INCOME (LOSS) (25,567) -96.4% (146) -0.6%
Interest income 0 0.0% 93 0.4%
Interest expense (43) -0.2% (53) -0.2%
Interest income (expense) - net (43) -0.2% 40 0.2%
INCOME (LOSS) BEFORE
INCOME TAXES (25,610) -96.6% (106) -0.4%
Provision for (benefit from)
income taxes (888) -3.3% (171) -0.7%
NET INCOME (LOSS) $(24,722) -93.3% $ 65 0.3%
Net income (loss) per common
and equivalent share $ (4.47) $ 0.01
Shares used in computing
per share amounts 5,529 5,534
Number of restaurants:
Open at beginning of period 58 46
Open at end of period 55 51
Fiscal Year Ended
Dec. 31, 1995 Dec. 25, 1994
(53 weeks) (52 weeks)
NET SALES $ 84,280 100.0% $ 76,969 100.0%
COSTS AND EXPENSES:
Cost of sales 23,059 27.4% 20,070 26.1%
Restaurant operating expenses:
Labor 27,375 32.5% 22,640 29.4%
Occupancy and other 26,163 31.0% 19,004 24.7%
Depreciation and amortization 5,731 6.8% 4,647 6.0%
General and administrative
expenses 8,341 9.9% 5,942 7.7%
Restructuring expense 23,932 28.4% -- --%
Total costs and expenses 114,601 136.0% 72,303 93.9%
OPERATING INCOME (LOSS) (30,321) -36.0% 4,666 6.1%
Interest income 53 0.1% 406 0.5%
Interest expense (183) -0.2% (190) -0.2%
Interest income (expense) - net (130) -0.1% 216 0.3%
INCOME (LOSS) BEFORE INCOME
TAXES (30,451) -36.1% 4,882 6.4%
Provision for (benefit from)
income taxes $ (2,655) -3.1% $1,684 2.2%
NET INCOME (LOSS) $(27,796) -33.0% $3,198 4.2%
Net income (loss) per common
and equivalent share $ (5.05) $ 0.58
Shares used in computing per
share amounts 5,504 5,544
Number of restaurants:
Open at beginning of period 51 36
Open at end of period 55 51
FRESH CHOICE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Dec. 31, Dec. 25,
1995 1994
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,294 $ 1,542
Short-term investments -- 4,639
Receivables 207 1,006
Inventories 465 557
Pre-opening costs 117 925
Refundable income taxes 1,602 255
Prepaid expenses and other current assets 686 666
Total current assets 4,371 9,590
PROPERTY AND EQUIPMENT, net 31,983 47,667
LEASE ACQUISITION COSTS, net 630 830
DEPOSITS AND OTHER ASSETS 322 441
TOTAL $ 37,306 $ 58,528
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,909 $ 3,189
Accrued salaries and wages 1,120 1,009
Sales tax payable 627 895
Restructuring reserve 5,266 --
Other accrued expenses 2,955 885
Income taxes -- 231
Current portion of capital lease obligations 406 384
Total current liabilities 13,283 6,593
CAPITAL LEASE OBLIGATION 89 495
DEFERRED INCOME TAXES -- 795
OTHER LONG TERM OBLIGATIONS 1,643 1,309
Total Liabilities 15,015 9,192
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value; 250,000
shares authorized; none outstanding
Common stock - $.001 par value; 7.5 million
shares authorized; shares outstanding:
1995 - 5,582,449;
1994 - 5,478,470 41,619 40,921
Unrealized loss on investments
-- (53)
Retained earnings (deficit) (19,328) 8,468
Total stockholders' equity 22,291 49,336
TOTAL $ 37,306 $ 58,528
The following letter was sent to William P. Foley, chairman and
chief executive officer of Fidelity National Financial on Feb. 22.
It is signed by Terry Christensen of the law firm Christensen,
White, Miller, Fink, Jacobs, Glaser & Shapiro on behalf of Giant
Group, Ltd.
Mr. William P. Foley
Chairman and Chief Executive Officer
Fidelity National Financial, Inc.
17911 Von Karman Avenue, Suite 500
Irvine, California 92714
Dear Mr. Foley:
I have been asked by the Board of Directors of GIANT GROUP, LTD
("GIANT") to respond to your letter dated February 14, 1996.
First, please be advised that GIANT declines to engage in a
transaction with Fidelity National Financial, Inc. ("Fidelity").
After due consideration, the Board of Directors has determined that
GIANT is not for sale. The Board believes that the future appears
bright and the interest of the shareholders of GIANT would be best
served if we pursue our present business plan. It has become clear
through your statements and the statements of your advisors that the
Fidelity plan is to bankrupt Rally's, liquidate GIANT and use the
resulting cash to acquire assets for Fidelity. The Board is
adamantly opposed to such a plan for GIANT. We believe that GIANT
and its predecessor company which dates back to 1883 should not be
destroyed to meet your often-stated need for cash in Fidelity. Nor
should the 13,500 employees of Rally's and their families, or the 9
employees of GIANT and their families be subjected to the sudden
loss of their jobs so you can use the cash of their companies to
bolster Fidelity.
The Board has also asked me to repeat - in writing - GIANT's
position with respect to your offer to sell all of Fidelity's GIANT
stock back to GIANT. The answer is - NO! This answer has already
been conveyed to you through your intermediary, Mr. William
Davenport. We assume you received our earlier answer since it was
your friend and broker, Mr. Davenport, who said on February 9, 1996
that you had specifically authorized him to advise GIANT that you
would sell all of Fidelity's GIANT shares back to GIANT for $15 per
share and you would "go away." As you know, GIANT's response to the
offer was "NO."
Obviously, your offer to sell Fidelity's GIANT stock to GIANT at
a premium completely undermines the credibility of your purported
concerns about the welfare of GIANT shareholders set forth in your
letter. Consistent with both your statements and actions to date, it
is quite clear that if you and Fidelity are sufficiently
compensated, and supposed harm to the shareholders of GIANT and
Rally's is of no concern to you. Despite the obvious hypocrisy of
your complaints about Giant's recent corporate actions, the Board
has asked me to respond to certain comments in your letter:
A. The GIANT exchange offer to acquire additional shares of Rally's.
The shareholders of GIANT and Rally's, as well as the
bondholders of Rally's appear to disagree with your assessment of
the proposed exchange offer for Rally's. Each of the securities has
reacted favorably in the marketplace. Moreover, your primary reason
for objecting to the exchange offer, namely the $9.00 per share
liquidation preference on the preferred stock certainly has to rate
an "A+" for gall. You complain bitterly that the preferred will
have an advantage over the common stock in a liquidation of GIANT.
Since you and your group are the only shareholders of GIANT who
actually want to liquidate the company, you can be sure that the
GIANT Board does not consider this a legitimate problem. Also,
there is no "double dipping" issue as you contend since the
preferred stock will not have the right to be paid twice in the
unlikely event of a liquidation.
It should also be noted that your assertions as to the proper
procedure under Delaware law and NYSE rules for the issuance of the
new preferred stock are simply wrong. Since you have competent
counsel in both New York and California, you can easily confirm with
them the fact that it is not incumbent upon our Board to seek
shareholder approval prior to commencing the exchange offer.
B. GIANT's sale of $22 million face amount of Rally's bonds to Rally's.
You vaguely object to this transaction on the theory that
Rally's received a benefit at the expense of GIANT. Ironically,
Rally's has been sued on the opposite theory that GIANT received a
benefit at the expense of Rally's. Perhaps you and the plaintiff
can sort out which fallacious theory should be pursued. Since both
companies benefited substantially, the ultimate outcome is a
foregone conclusion.
C. GIANT's repurchase of certain of its shares at $10.
We find Fidelity's complaints about these transactions
particularly puzzling in light of the following facts:
(1) You have personally stated on a number of occasions,
including a lengthy interview just last week in the "Orange County
Business Journal" that the value of GIANT's stock is well in excess
of its market price. In fact, on February 9, 1996 you told an
analyst/investor information meeting at the Hyatt Grand Champions
Hotel in Indian Wells, California, that you valued the GIANT stock
at $14 per share. One week later, on February 15, 1996, when the
stock was selling at $10 per share, your General Counsel, Andrew
Puzder, told the Los Angeles Times that GIANT is "an undervalued
asset."
(2) As evidenced by your recent offer to sell your GIANT stock
back to the company, you have no objection to GIANT paying $15 per
share for its stock so long as you are the recipient of the money.
(3) Fidelity paid $10.375 per share for GIANT stock on the same
day that you wrote the letter protesting the $10 price that GIANT
had previously paid for its own stock. In fact, Fidelity was
apparently so convinced that the stock was worth more than $10 per
share that day that it was willing to violate Section 10b of the
Securities and Exchange Act of 1934 in order to buy 45,000 shares
from GIANT shareholders who could not know that Fidelity, contrary
to its existing 13D, had made the decision to offer $12 per share
for the same stock it was buying for $10.375 per share. Without
getting into the details here, it is obvious that the GIANT
shareholders who sold on February 14, 1996 should have been told
about the Fidelity offer dated the same day and that this "front-
running" by Fidelity violates existing law.
(4) Over 1,100 companies had stock buy back programs in 1995 to
the delight of their shareholders. Contrary to your assertions,
when stock is repurchased all shareholders receive increased voting
power - even shareholders with a pernicious intent, or a desire to
elect directors willing to liquidate the company
D. The adoption by GIANT of Shareholder Rights Plan.
As you should know, in general, shareholder rights plans are
adopted to increase the negotiating leverage of a Board of Directors
in dealing with unsolicited offers which might not be made to fairly
benefit all shareholders. Shareholder rights plans seek to ensure
that a Board has the ability to discuss and/or negotiate in order to
protect the interests of the Company and its shareholders. The
GIANT Board believes that the adopted plan does just that.
Although there are many other misconceptions and misstatements
in your letter, it would serve no purpose to go into each of them at
this point. Suffice it to say that the GIANT Board understands your
stated desire to buy other businesses for Fidelity in order to avoid
the cyclical nature of Fidelity's business. The Board even
understands your desire to liquidate other public companies in order
to strip them of their cash for your own use. (Even though it
understands, the Board does not share your enthusiasm for such a
business approach. In fact, as you know, Mr. Sugarman turned down
your offer to join with you in the acquisition of Summit Family
Restaurants, Inc. and the planned stripping of that company of its
cash.) The GIANT Board cannot allow you to pursue those goals at
the expense of GIANT, Rally's and their shareholders and employees.
As you stated in your interview, GIANT is a "great investment." The
Board cannot and will not allow Fidelity to destroy the value of
that "great" investment for all the Giant shareholders so that one
shareholder - Fidelity - can profit.
Very Truly yours,
/s/
Terry Christensen
NORTHLAKE, Ill. -- Feb. 22, 1996 -- href="chap11.whitlock.html">The Whitlock
Corp. and Apex Automotive Warehouse, L.P. (collectively the
``company'') Thursday filed for Chapter 11 protection under the
federal bankruptcy code.
The company is comprised of Apex, its wholesale arm, and the
Giant, Whitlock and Strum Auto Supply stores, a chain of 80
aftermarket stores in six states. The filing became necessary due
to financial pressures brought on by the company's purchase of the
retail stores in January 1995, the circumstances as to which
litigation is pending.
The cases were filed in the U.S. Bankruptcy Court for the
Northern District of Illinois before bankruptcy Judge Erwin Katz.
The company is represented by Jonathan Backman of Gould & Ratner.
The company will continue daily operations, and its current
lender has agreed to provide new financing to allow the company to
provide the best products, pricing and services to its customers.
The company will continue in its quest to take the frustration out
of auto parts shopping, as communicated in its corporate slogan:
``We Know What Drives You.''
CONTACT: Laura Gershowitz, 708/562-7140, x415 or 312/989-0311