HOUSTON, TX -- April 1, 1996 -- Drypers Corporation
(Nasdaq:DYPR) today reported net sales of $46.6 million for the
fourth quarter ended December 31, 1995, compared with $46.2 million
for the same period of 1994. The Company recorded a net loss for
the recent quarter of $3.4 million, or $0.51 per share, compared
with net income of $1.3 million, or $0.19 per share, in the fourth
quarter of 1994. The net loss for the quarter of 1995 included
unusual expenses of $2.1 million related to the write-down of idled
equipment and professional fees associated with the Company s recent
refinancing.
The net loss also reflected continued pricing pressures due to
competitive conditions in the market for disposable baby diapers and
related products, coupled with higher pulp prices than in the same
period a year ago. The Company noted, however, that the fourth
quarter's results reflected an improvement over the 1995 third
quarter, with net sales rising 7.6% and the net loss before unusual
expense declining to $1.3 million, or $0.19 per share. This
improvement was attributed to gains in market share and unit volume,
as well as achieving planned reductions in operating costs.
As announced in the Company s March 1 press release, the Company
recently closed a financing package comprised of a revolving credit
facility, with a borrowing base of up to $21 million and
approximately $9 million of new equity in the form of convertible
preferred stock.
Walter V. Klemp, Chairman and Co-Chief Executive Officer, noted,
"We are excited by the continued improvement in the operating
environment we experienced during the fourth quarter of 1995. Our
grocery store market share has risen to record high levels and we
have seen a continuation of declining raw material prices. We
expect raw material prices to decline further as we move into this
fiscal year. As a result of a very successful cost cutting program
and a significant increase in consumer approval of our new thin
product design, we returned to positive operating income, before
unusual expenses, in the fourth quarter. In fact, we saw our
quarterly EBITDA before unusual expenses improve by $4.2 million
from the second to the fourth quarter of 1995."
Mr. Klemp, added, "Looking toward the first quarter of 1996, we
anticipate this positive trend in operating gains will continue.
However, this trend will be masked in our first quarter as results
will reflect the effects of the relocation of our training pant line
and residual effects of costs related to our debt refinancing."
Mr. Klemp, concluded, "Going forward, Drypers should benefit
significantly from the combined effects of major cost cutting
programs, improved competitive position and declining raw material
prices. We believe this should allow us to show a significant
improvement in operating profit in the second quarter and positive
net income in the second half of the year."
The Company also announced that for the year ended December 31,
1995, net sales were $164.0 million compared with $173.6 million for
1994. The net loss for 1995 was $15.5 million, or $2.35 per share,
compared with net income before extraordinary item of $6.8 million,
or $1.09 per share, in fiscal 1994. The net loss for the 1995
period included a restructuring charge of $4.3 million related to
the elimination of diaper production at Drypers' Houston plant, as
well as an unusual expense of $3.2 million for promotional and other
expenses related to the repositioning of the Company's premium brand
products and professional fees associated with the refinancing. Net
income for 1994 included an unusual expense of $1.1 million related
to one-time legal expenses incurred in connection with the defense
of a patent infringement lawsuit, and an extraordinary charge of
$3.7 million, or $0.59 per share, related to the redemption of debt.
Drypers Corporation manufactures and markets disposable baby
diapers and related products under the Drypers brand name. The
Company's products are sold through grocery stores and mass
merchants throughout the United States, Latin America and other
international markets. The Company also produces price value
branded and private label diapers and related products.
DRYPERS CORPORATION (NASDAQ: DYPR)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Share Amounts)
Three Months Ended Year Ended
December 31, December 31,
(Unaudited) (Audited)
1995 1994 1995 1994
NET SALES $ 46,554 $ 46,168 $163,947 $173,552
COST OF GOODS SOLD 31,162 29,225 114,075 106,130
Gross profit 15,392 16,943 49,872 67,422
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 14,533 13,422 53,691 48,081
UNUSUAL EXPENSES 827 -- 3,185 1,141
RESTRUCTURING CHARGE 1,283 -- 4,255 --
Operating income (loss) (1,251) 3,521 (11,259) 18,200
INTEREST EXPENSE, net 2,169 1,746 8,035 7,685
OTHER INCOME -- 82 -- 434
INCOME (LOSS) BEFORE INCOME
TAX PROVISION (BENEFIT)
AND EXTRAORDINARY ITEM (3,420) 1,857 (19,294) 10,949
INCOME TAX PROVISION
(BENEFIT) (27) 543 (3,829) 4,151
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM (3,393) 1,314 (15,465) 6,798
EXTRAORDINARY ITEM,
net of taxes -- -- -- (3,688)
NET INCOME (LOSS) $ (3,393) $ 1,314 $(15,465) $ 3,110
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 6,628,137 7,031,199 6,587,698 6,246,087
INCOME (LOSS) PER
COMMON SHARE:
Before extraordinary
item $ (0.51) $ 0.19 $ (2.35) $ 1.09
Extraordinary item -- -- -- (0.59)
Net income (loss) $ (0.51) $ 0.19 $ (2.35) $ 0.50
DRYPERS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Audited)
December
1995
Pro forma
December for December
1995 Refinancing(a) 1994
ASSETS:
CURRENT ASSETS $ 40,625 $ 40,625 $
40,735
PROPERTY AND EQUIPMENT, net of
depreciation and amortization 36,375 36,375
34,853
OTHER ASSETS 60,420 60,420
56,143
$137,420 $137,420 $131,731
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES $ 44,222 $ 35,422 $
22,773
LONG-TERM DEBT 47,350 47,350
46,632
OTHER LIABILITIES 4,026 4,026
5,559
STOCKHOLDERS' EQUITY 41,822 50,622
56,767
$137,420 $137,420 $131,731
(a) Reflects the pro forma effect of the private placement of $8.8
million of Series A Senior Convertible Cumulative 7.5% Preferred
Stock completed on February 29, 1996.
CONTACT: Drypers Corporation
Walter V. Klemp
Chairman & Co-Chief
Executive Officer
(713) 682-6848
or
Lynn Morgen/Howard Zar/
Melissa Garelick
Press: Leslie Feldman
Morgen-Walke Associates
(212) 850-5600
ATLANTA, GA -- APRIL 1, 1996 -- ROADMASTER INDUSTRIES,
INC. (NYSE: RDM) today announced its fourth quarter and full-year
results for the period ended December 31, 1995.
Included in the results are details of restructuring and other
special charges totaling $50.5 million, pre-tax, with an after tax
impact of $32.0 million, primarily relating to its Diversified
Products ("DP") and Vitamaster fitness operations. In its recently
reported sale of its Nelson/Weather-Rite Camping Division to
Brunswick Corporation (NYSE: BC), the company noted it will record a
$59.4 million taxable gain in the first quarter of fiscal 1996 ended
March 31. The financial reporting gain is expected to be $32.4
million. All of the net proceeds were used to reduce outstanding
bank indebtedness resulting in an approximate one-third reduction in
total outstanding debt.
"The preponderance of the 1995 operating losses were incurred in
our fitness operations," said Roadmaster Chief Operating Officer,
Edward Shake. "Our primary focus in 1996 is the restoration of
profitability in this area. The previously announced closure of
Roadmaster's Tyler, Texas fitness facility and its consolidation
into the Opelika, Alabama plant is a necessary first step to reduce
fixed cost levels and to enhance our competitiveness. This
initiative is presently underway and will be completed by mid- year.
The difficulties in integration of the DP acquisition combined with
a weak retail sales environment, intense competitive pressures, and
rising commodity prices proved too much to overcome in 1995," Mr.
Shake added.
The company stated that its bicycle and toy business units,
despite unprecedented material price increases and the competitive
environment, posted strong performance and market share gains in
1995. On a stand-alone basis, these units were profitable. The
company attributed this strong performance to the success of its new
products, enhancements of existing product lines, building its
Flexible Flyer brand name, and cost reductions. Revenues in the
bicycle and toy categories totaled $278.7 million in 1995 compared
to $250.8 million in the Company's fitness operations.
The restructuring and special charges discussed above primarily
relate to the company's fitness operations: Primarily non-cash in
nature, these include a $23.5 million pre-tax charge related to
goodwill resulting from the 1994 acquisition of Diversified
Products; a $7.5 million restructuring charge identified to the
closing of Roadmaster's Tyler, Texas fitness manufacturing facility,
the elimination of approximately 600 positions and consolidation of
all of the Company's fitness operations at the Opelika, Alabama
plant and special charges for inventory and warranty of $13.2
million.
In the fourth quarter, loss before restructuring and special
charges was $9.7 million or $0.20 per share, compared with a profit
of $170,000, or $0.00 per share, in the prior year. During the
fourth quarter, the company recorded a one time primarily non cash
after-tax charge of $32.0 million or $0.65 per share to reflect
restructuring and special charges. After the effect of these
charges, the net loss was $41.7 million or $0.85 per share.
As expected, the net loss for 1995, before restructuring and
other special charges, was $19.0 million or $0.39 per share,
compared with earnings of $5.0 million or $0.16 per share for the
year ended December 31, 1994.
Total revenues for 1995 increased 60% to $730.9 million from
$455.7 million reported for fiscal 1994. The net loss for 1995
totaled $51.0 million or $1.04 per share compared to net income of
$5.0 million or $0.16 per share for the year-ago period.
As a result of the loss in 1995 and the other charges necessary
to improve the Company's cost position, significant tax losses were
generated and are expected to be substantially utilized in
realization of the gain on divestiture of Roadmaster's Camping
Division.
President and CEO Henry Fong commented, "Roadmaster had one of
its more challenging years in 1995. The restoration of
profitability during 1996 is our paramount objective. We are
presently evaluating various organizational initiatives within our
fitness operations to enable us to better focus on the resolution of
our internal issues and to be more responsive to changing industry
demographics." Mr. Fong added, "The Company will enter the second
quarter with substantially improved liquidity enabling it to
complete its restructuring efforts and continue to capitalize on the
strong brand equities it has built."
Roadmaster, one of the largest manufacturers of bicycles, is
also a leading producer of fitness equipment, and is a leading
producer and distributor of toys and team sport equipment. The
trademarks or brand names under which Roadmaster sells its products
include Roadmaster, Flexible Flyer, Vitamaster, MacGregor, DP,
Hutch, Reach and Forster.
ROADMASTER INDUSTRIES, INC. AND SUBSIDIARIES
Selected Income Statement Data
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1994
Net Sales 207,395 151,705 730,876 455,661
Cost of Sales 188,899 131,082 644,268 388,871
Gross Profit 18,496 20,623 86,607 66,790
Selling, general and
administrative expenses 37,924 14,161 92,814 37,976
Impairment loss 23,500 -- 23,500 --
Restructuring expense 7,521 -- 7,521 --
Other expense, net:
Interest expense 9,395 6,084 35,470 21,312
Other, net 5,522 272 7,785 (394)
Earnings (loss) before
income tax expense (65,366) 106 (80,483) 7,896
Income tax expense
(benefit) (23,621) (64) (29,479) 2,896
Net earnings (loss) (41,745) 170 (51,004) 6,000
Earnings per common share:
Primary (0.85) 0.00 (1.04) 0.16
Fully diluted (0.85) 0.00 (1.04) 0.16
Weighted average common shares
outstanding and common stock
equivalents:
Primary 49,177 35,466 49,004 31,878
Fully diluted 49,177 35,466 49,004 31,878
CONTACT: Lippert/Heilshorn & Associates
Richard Foote, ext. 119, Jeffrey Volk, ext. 102
212/838-3777
or
ROADMASTER INDUSTRIES, INC.
Jeff Hinton, 404/586-9000
ALAMEDA, Calif. -- April 1, 1996 -- InSite Vision
Incorporated (NASDAQ: INSV) today reported its financial results for
the fourth quarter and year ended Dec. 31, 1995.
InSite Vision recorded revenues of $15,000 and a net loss of
$3.0 million ($0.33 per share) in the fourth quarter ended Dec. 31,
1995. In the 1994 fourth quarter, the company had revenues of
$21,000 and a net loss of $3.6 million ($0.40 per share). In the 12
months ended Dec. 31, 1995, InSite Vision recorded revenues of
$65,000 and a net loss of $12.6 million ($1.38 per share). These
results compare to revenues of $112,000 and a net loss of $13.9
million ($1.55 per share) in the year ended Dec. 31, 1994. At Dec.
31, 1995, InSite Vision had cash and short-term investments of $3.9
million. In January 1996, the company completed a private placement
of securities which increased cash and short-term investments by
$4.8 million.
These results are consistent with company expectations. The
decline in revenues in 1995 was due principally to the completion of
a contract research arrangement. Included in the 1995 fourth
quarter net loss was a $1.0 million one-time charge related to a
corporate restructuring implemented in November. In connection with
the restructuring, InSite Vision reduced its workforce by
approximately 50%, reduced substantially self-funded product
development, and elected not to proceed with plans to establish its
own sales and marketing organization.
InSite Vision is an ophthalmic pharmaceutical company focused on
the development of improved and entirely new eye medications based
on its proprietary DuraSite drug delivery platform.
InSite Vision Incorporated
Condensed Consolidated Statements of Operations
For the Quarters and Years Ended Dec. 31, 1995 and 1994
(in thousands, except per share amounts; unaudited)
Three Months Year
1995 1994 1995 1994
Revenues $ 15 $ 21 $ 65 $ 112
Operating expenses:
Research and development 1,502 2,696 8,079 9,944
General and administrative 561 1,120 3,801 4,961
Restructuring 1,031 -- 1,031 --
Total 3,094 3,816 12,911 14,905
Loss from operations (3,079) (3,795) (12,846)
(14,793)
Interest - net 36 169 224 845
Net loss $(3,043) $(3,626) $(12,622)
$(13,948)
Net loss per share $ (0.33) $ (0.40) $ (1.38) $
(1.55)
Shares used to calculate net
loss per share 9,207 9,061 9,160 8,998
InSite Vision Incorporated
Condensed Consolidated Balance Sheets
At Dec. 31, 1995 and 1994
(in thousands; unaudited)
1995 1994
Assets:
Cash and short term investments(a) $ 3,867 $ 17,546
Property and equipment, net 3,625 3,014
Prepaid expenses 151 706
Total assets $ 7,643 $ 21,266
Liabilities and stockholders' equity:
Current liabilities $ 1,642 $ 1,983
Other liabilities 154 1,330
Stockholders' equity 5,847 17,953
Total liabilities and equity $ 7,643 $ 21,266
(a) In January 1996, the company completed a private placement of
securities which increased cash and short-term investments by
$4.8 million.
LOS ANGELES, CA -- April 1, 1996 -- Dep Corporation
(NASDAQ SmallCap: DEPCA/DEPCB) said today that it has filed to
reorganize and restructure its long-term debt under Chapter 11 of
the federal Bankruptcy Code. The filing, which was made in the
United States Bankruptcy Court, the District of Delaware, included a
disclosure statement and a plan of reorganization which provides for
payment in full, with interest, to its secured lenders and its
unsecured creditors.
Dep blamed the filing primarily on its acquisition of Agree and
Halsa from S.C. Johnson & Son, Inc., currently the subject of a
lawsuit by Dep against Johnson.
The Company said that the combination of cash on hand and cash
flow from operations is expected to be more than adequate for it to
purchase goods and services and to fund day-to-day operations for
the foreseeable future. Accordingly, at this time it does not
require debtor-in-possession (DIP) financing.
Robert Berglass, president and chief executive officer of Dep,
said that the Company has had and continues to have positive cash
flow from operations, despite the fact that for more than two years
the Company's operations and profitability have been severely
affected by its purchase of Agree and Halsa from S.C. Johnson & Son,
Inc.
``Quite simply, the brands have not even generated enough sales
to cover the principal and interest on the bank debt incurred as a
result of the purchase. Accordingly, it became clear that even
though we were cash flow positive, in order to remain a viable
company, we had to restructure our debt,'' he said.
Mr. Berglass said that the Company has been negotiating with its
lenders on a debt restructuring for more than two years. He said
that even though Dep has made timely payment of all of its principal
and interest due under its credit facility, as amended from time to
time, it was not able to reach an agreement which was acceptable to
all concerned.
``When we finally determined that we would be unable to reach a
mutually satisfactory agreement with our secured lenders, the
Company concluded that, although it would have preferred not to have
to resort to the courts, it was in the best long-term interests of
its constituents to effect a court-supervised restructuring,'' he
said. ``By utilizing the Chapter 11 process, we believe we can
restructure the Company's debt to be consistent with our cash
flow.''
Mr. Berglass said that Dep will continue to pursue all legal
rights against S.C. Johnson and that Dep's breach of contract
lawsuit is presently scheduled for trial in May, 1996 in Riverside,
California. At that time, Dep shall be seeking $20 million in
monetary damages, which is the maximum breach of contract damages
provided for in its purchase agreement with S.C. Johnson.
Mr. Berglass said that the severe decline in Agree and Halsa
sales had not been anticipated, based upon the information Dep
received from S.C. Johnson. Since the acquisition of Agree and
Halsa, the sales of those products unexpectedly plummeted from $65
million to less than $25 million annually.
``This, when combined with the interest costs associated with
their purchase, has resulted in losses for the company,'' he said.
``In addition, our capital structure was adversely affected by a
$25.2 million write-off of asset value in April of 1995.''
Mr. Berglass emphasized that ``the filing should have no effect
on the company's customers or its employees. Daily operations,
including shipments to our retail customers, will continue as usual
and all aspects of the business will go on as before the filing.
Paychecks will be issued as before. We will continue to rigorously
support our brands through advertising and promotional programs, as
well as continue with our successful history of developing and
introducing innovative products into the marketplace.''
He stated that Dep has ``contacted many of our suppliers to
discuss the company's various options and they have indicated their
support during this period. While federal law prohibits the Company
from paying for goods and services received before the filing,
payments for goods and services received after the filing date are
given priority status by the Bankruptcy Code.''
Mr. Berglass added, ``Over the past 12 months we have made many
of the tough decisions and have developed a turn-around strategy
that, once fully implemented, should result in a stronger, more
efficient and profitable business. During this period, we have
reduced overhead and expenses by more than $3 million on an annual
basis, including a 20% headcount reduction. The Company continues
to review its operations and implement programs aimed at reducing
costs and improving profitability.
``We have reviewed and will continue to review every aspect of
our business with the goal of increasing sales and profitability,''
he stated. ``We already have begun implementing programs to achieve
that objective, in addition to developing new and creative
advertising and promotional plans to enhance the sell-through of our
brands at retail. We have our work cut out for us, but I am
optimistic that, with the continued outstanding support of our
suppliers, the hard work of our employees and the loyalty of our
retail customers, we will come through this process a stronger, more
competitive Company than before.''
Dep Corporation is a consumer products company that develops,
manufactures and markets a wide variety of hair, oral and skin care
products under 10 major brand names: Dep, L.A. Looks, Agree, Halsa,
Lilt, Topol, Lavoris, Natures Family, Porcelana and Cuticura. It
employs approximately 300 people.
CONTACT: Sitrick and Company, Los Angeles
Michael Sitrick or Ann Julsen
310/764-2247 or 310/788-2850
QUINCY, Mass. -- April 1, 1996 -- The Hibernia
Savings Bank (NASDAQ:HSBK) has announced an extraordinary loan loss
provision for the first quarter ended March 31, 1996 of $1,000,000.
On Friday, March 29, 1996 Bank officers became aware through
published newspaper reports that the U.S. Attorney's office in New
York City had filed a lawsuit against the Bennett Funding Group,
Inc. and Patrick R. Bennett, Chief Financial Officer of the company,
for securities fraud and perjury in connection with an offering by
the company of $80 million in short and medium term notes. In
addition, the Securities and Exchange Commission also filed a
lawsuit against The Bennett Funding Group Inc. for misrepresentation
and factual omissions related to the selling of more than $570
million in equipment leases and promissory notes to investors since
1991. The SEC lawsuit charged that Bennett Funding Group Inc. had
sold investors tens of millions of dollars of assignments on office
equipment leases that didn't exist, as well as fraudulently selling
leases that had already been sold. On Monday, April 1, 1996 Bennett
Funding Group Inc. filed for Chapter 11 bankruptcy protection and
stated that the company will cease payments to investors.
Between January 28, 1994 and March 17, 1995 the Hibernia Savings
Bank entered into three separate commercial equipment contracts with
the Bennett Funding Group Inc. for an aggregate original investment
of $2,599,929 by which the bank acquired 374 leases secured by
office equipment originated by the Bennett Funding Group Inc. with
initial outstanding balances due totaling $3,085,287. In
conjunction with each of the contracts the Bennett Funding Group
Inc. provided a payment guaranty and servicing of the individual
leases. The initial due diligence conducted by the bank included
contacting by telephone approximately 25 percent of the lessees to
verify that the equipment was in place and that the lease agreement
was a valid business transaction. The bank is in the possession of
all the original lease agreements. Up to this point, the bank has
received all scheduled payments of principal and interest due under
each contract in accordance with the original terms and conditions.
Currently, the Bank has a balance of $1,409,950 outstanding from its
initial investment in the commercial equipment contracts and there
are 311 leases with total outstanding balances of $1,922,978
remaining. These leases are the only assets of this nature on the
bank's books at this time.
Immediately upon becoming aware of the charges against the
Bennett Funding Group Inc. the bank exercised its rights under the
agreements by terminating the servicing arrangement with the Bennett
Funding Group Inc. and notified the individual lessees that all
future payments should be forwarded directly to the bank. In
addition the bank is in the process of contacting every lessee by
telephone. To date, the bank has reached by telephone 120 lessees.
In each instance the lessee has affirmed that the equipment is in
place and that the lease obligation is a valid business transaction.
The bank has no information to this point that would allow it to
conclude that any of the leases acquired are fraudulent. However,
the bank's expectation is that as a result of confusion and
uncertainty on the part of the individual lessees created by the
foregoing events that there will be an interruption in the normal
flow of payments due under the leases. Also, as a result of the
bankruptcy filing of the Bennett Funding Group Inc. and the
probability of litigation it is very likely that an extended period
of time will be required to unravel the situation. The bank intends
to pursue all of its claims against all of the parties involved.
Mark A. Osborne, chairman of the board stated, "given all of the
circumstances involved the most prudent position that this company
could take to deal with this problem would be to charge off the
remaining balance of our investment in these leases of $1,409,950
against our allowance for loan losses. This action is being taken
to preserve the integrity of our balance sheet even though we
believe the 311 leases currently outstanding for $1,922,978 are
valid business transactions and fully enforceable and that
consequently there is a substantive recoverable value to these
assets. In conjunction therewith, we will also book an
extraordinary provision for loan losses of $1,000,000. It has been
our posture to maintain our loan loss allowance on a conservative
basis which when combined with the fact that our core earnings have
continued to improve results in the bank being well positioned to
absorb this charge without interrupting our efforts to achieve our
strategic business initiatives. In the absence of this event,
operating results for the first quarter would have been solid.
After taking the steps outlined we will still be marginally
profitable, earnings when released should fall within a range of
$50,000 to $100,000."
As of March 30, 1996, the Bank had one loan delinquent thirty
days or more totaling $120,942. In addition, also as of March 30,
1996 and exclusive of the Bennett Funding Group Inc. situation
discussed above, the Banks nonperforming assets totaled $951,660 or
.27 percent of total assets. The components of nonperforming assets
at that date were nonperforming loans of $951,660, the bank had no
other real estate owned.
The Hibernia Savings Bank, founded in 1912, is a full service,
state-chartered, stock savings bank. The main office of the Bank is
located at 731 Hancock Street, Quincy, Mass. The Banks
administrative offices are located at 730 Hancock Street, also in
Quincy. Retail branch banking facilities are located in Boston,
Quincy, Braintree, Weymouth, Hingham and Stoughton and loan centers
are located In Quincy and Braintree. All deposits are insured in
full by the Federal Deposit Insurance Corp. (FDIC)/Deposit Insurance
Fund (DIF).
CONTACT: Hibernia Savings Bank
Gerard F. Linskey, 617/479-5001
CANTON, Mass. -- April 1, 1996 -- Grossman's Inc.
(NASDAQ-GROS) today announced results for the quarter and year ended
December 31, 1995. The Company reported a loss of $198 thousand, or
1 cent per share, for the year on sales of $670 million, as compared
with a loss of $1.9 million, or 7 cents per share, for the year
ended December 31, 1994. For the fourth quarter of 1995, the
Company reported a loss of $5.9 million, or 23 cents per share,
versus a loss of $1.0 million, or 4 cents per share, for the same
quarter a year ago.
The 1995 results include a pre-tax gain on the sale of the
Company's former headquarters site of $18.1 million and a provision
for the closing of 11 Eastern Division stores of $4.5 million. The
1994 results include a provision of $6.5 million for the closing of
18 Eastern Division stores.
Last week the Company announced a major restructuring and
refinancing plan. The remaining 60 Grossman's stores in eight
Northeastern states are being closed and inventories are being
liquidated over an estimated eight to ten week period. Expansion of
the Company's Contractors' Warehouse Division in the West and
Midwest and the Mr. 2nd's Bargain Outlet Division in the East will
continue in 1996 and future years. The Company indicated that it
plans to convert a limited number of the former leased Grossman's
stores into Mr. 2nd's Bargain Outlet stores during 1996.
The actions enabled the Company to obtain a commitment for a
mortgage loan to be repaid from the proceeds from the sale of 55
owned properties in the Northeast, including 40 of the stores being
closed. The Company also announced that it had reached an agreement
with the holders of the Company's 14% Debentures, curing a January
default. Lastly, the Company stated that it had sold a $15.8
million note receivable from Kmart Corporation for $13 million, its
approximate book value. The Company expects to reflect a
restructuring charge of approximately $40 million in the first
quarter of 1996.
Grossman's operates 39 stores in four Northeastern states,
California, Indiana, Nevada and Ohio under the names Contractors'
Warehouse and Mr. 2nd's Bargain Outlet.
Grossman's Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
1995 1994 1995 1994
---- ---- ---- ----
SALES $155,161 $177,824 $669,899 $759,156
COST OF SALES 118,407 134,401 510,220 572,095
-------- -------- -------- --------
Gross Profit 36,754 43,423 159,679 187,061
OPERATING EXPENSES
Selling and
administrative 40,078 39,614 156,995 164,495
Depreciation and
amortization 2,571 3,041 11,221 12,625
Store closing - - 4,500 6,500
Preopening expense 262 643 724 1,378
--------- --------- --------- ---------
42,911 43,248 173,440 184,998
--------- --------- --------- ---------
OPERATING INCOME
(LOSS) (6,157) 125 (13,761) 2,063
OTHER EXPENSES
(INCOME)
Interest expense 1,773 1,755 8,211 7,376
Net gain on disposals
of property (32) (11) (18,345) (364)
Other (1,545) (719) (4,095) (3,322)
--------- --------- --------- ---------
196 1,025 (14,229) 3,690
EQUITY IN NET LOSS
OF UNCONSOLIDATED
AFFILIATE 183 252 666 490
--------- --------- --------- ---------
(LOSS) BEFORE INCOME
TAXES (6,536) (1,152) (198) (2,117)
(CREDIT) FOR INCOME
TAXES (634) (115) - (212)
--------- --------- --------- ---------
NET INCOME (LOSS) $ (5,902) $ (1,037) $ (198) $ (1,905)
NET INCOME (LOSS)
PER COMMON SHARE
(Primary and Fully
Diluted) $ (0.23) $ (0.04) $ (0.01) $ (0.07)
WEIGHTED AVERAGE
SHARES AND
EQUIVALENT SHARES
OUTSTANDING
(Primary and
Fully Diluted) 26,028 25,762 25,946 25,752
Grossman's Inc.
Consolidated Balance Sheets
(in thousands)
(Unaudited)
December 31, December 31,
1995 1994
------------ ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,536 $ 3,034
Receivables, net 23,940 19,449
Inventories 102,009 116,602
Note receivable, net 13,000 -
Other current assets 6,512 9,048
-------- --------
Total current assets 147,997 148,133
PROPERTY, PLANT AND
EQUIPMENT, NET 94,256 114,897
OTHER ASSETS 1,276 3,590
-------- --------
TOTAL ASSETS $243,529 $266,620
LIABILITIES AND STOCKHOLDERS'
INVESTMENT
CURRENT LIABILITIES
Accounts payable and
accrued liabilities $ 91,308 $ 89,816
Accrued interest 1,403 1,555
Current portion of
long-term debt and
capital lease obligations 20,445 13,278
-------- --------
Total current liabilities 113,156 104,649
REVOLVING TERM NOTE
PAYABLE 32,844 29,888
LONG-TERM DEBT AND CAPITAL
LEASE OBLIGATIONS 5,668 30,039
PENSION LIABILITY 8,270 4,348
OTHER LIABILITIES 9,796 17,051
-------- --------
Total Liabilities 169,734 185,975
STOCKHOLDERS' INVESTMENT 73,795 80,645
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' INVESTMENT $243,529 $266,620
NORTH ANDOVER, Mass. -- April 1, 1996 -- Watts
Industries Inc. (NYSE:WTS) announced today that it expects to record
unusual charges to third quarter earnings aggregating approximately
$85 to $90 million (after-tax) in connection with its previously
announced restructuring, consolidation and downsizing program.
Since a majority of these charges and costs are non-cash items,
the company estimates that after-tax cash impact will be
approximately $5 - $10 million. The specific amount of these
charges will be announced concurrently with the company's release of
third quarter results in mid-April. The charges will result in a
net loss for the third quarter and the full fiscal year. The
company also expects that earnings from continuing operations in the
third quarter will be less than last year.
In addition to these charges, approximately $2 to $4 million
(after-tax) related to the downsizing and relocation of
manufacturing facilities will be recorded in subsequent periods, the
majority of which is expected to be recorded in the fourth quarter,
in compliance with applicable accounting rules requiring recognition
of these restructuring expenses as they are incurred.
Timothy P. Horne, chairman, president and chief executive
officer of Watts, stated that, "Approximately $63 million of the
third quarter charges is expected to result from write-down of
assets, including goodwill recorded in prior acquisitions,
reflecting the company's adoption of Financial Accounting Standards
No. 121, `Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of.' A majority of this goodwill
write-down is expected to relate to the company's Italian
operations." "The balance of the charges," Horne added, " is
primarily related to our company-wide restructuring and will consist
of costs to consolidate manufacturing, downsize our organization and
write-down inventory. The company expects the results of this
restructuring plan to have positive financial impacts beginning in
fiscal 1997."
As part of its overall restructuring program, Watts also
announced plans to sell its waterworks related valve businesses and
engaged Schroder Wertheim & Co. to manage the divestiture process.
Watts' waterworks valve companies include the Henry Pratt Co.,
headquartered in Aurora, Ill; James Jones Co., located in El Monte,
Calif.; and Edward Barber & Co. Ltd. (EBCO), located in Tottenham,
England. These companies had sales of approximately $83 million for
the 12 months ended Dec. 31, 1995. Horne added, "This divestiture
strategy has been undertaken to reallocate our financial resources
towards our primary markets of plumbing, heating, industrial, and
oil and gas. We intend to continue to seek out acquisitions which
would be complementary to these core businesses."
CONTACT: Watts Industries Inc.
Kenneth J. McAvoy, 508/688-1811
DENVER, CO -- April 1, 1996 -- Monaco Finance, Inc.
(Nasdaq National Market: MONFA), a leader in sub-prime automobile
financing, today announced results of operations for its fourth
quarter and fiscal year ended December 31, 1995.
For the year ended December 31, 1995, the company reported that
its net income from continuing operations was $537,000, or $.10 per
share, on revenues of $14.0 million. After a restructuring charge
of $1.9 million relating to the previously announced discontinuation
of the company's CarMart division, which sold and financed used
cars, the company reported a net loss for 1995 of $1.3 million, or
($.24) per share. For 1994, the company's net income from
continuing operations was $731,000, or $0.13 per share, on revenues
of $8.1 million. The company's net income was $1.1 million, or $.19
per share, for 1994.
For the fourth quarter of 1995, the company reported a net loss
from continuing operations of $182,000, or ($.03) per share, on
revenues of $3.6 million. After the fourth quarter share of the
restructuring charge of $1.6 million, the company reported a net
loss for the fourth quarter of 1995 of $1.8 million, or ($.29) per
share. For the fourth quarter of 1994, the company's net income from
continuing operations was $169,000, or $.03 per share, on revenues
of $2.7 million. The company's net income was nil for the fourth
quarter of 1994.
The company's net interest margin (interest income less interest
expense) improved to $8.8 million in 1995 from $5.7 million in 1994.
As of December 31, 1995, the gross carrying value of the
company's automobile receivables portfolio was $67.3 million, up
from $43.9 million as of December 31, 1994. As of December 31,
1995, the company's loan loss reserves were $6.7 million, comparedto
$2.6 million as of December 31, 1994. Cash and cash equivalents
totaled $7.2 million as of December 31, 1995, up from $27,000 as of
December 31, 1994.
Morris Ginsburg, Chairman, President and Chief Executive Officer
of Monaco stated, "Our primary goal for 1996 is to increase, by
purchases through our dealer network, the number and amount of high
quality, low discount automobile installment contracts of the type
for which only the most creditworthy sub-prime borrowers are
eligible. To achieve this goal we intend to add sales
representatives in the states we currently are servicing and add new
territories in order to substantially increase our dealer base. We
also intend to employ our substantial capital resources -- including
funds freed up by discontinuing CarMart -- to further increase our
portfolio of quality automobile receivables. We also intend to
evaluate strategic opportunities that may exist in the sub-prime
automobile finance industry."
"Monaco has developed new loan programs and management systems
to improve the quality and performance of our portfolio," Mr.
Ginsburg added. "We are continuing to refine our underwriting
criteria and to improve our collection techniques. We soon will
inaugurate a sophisticated credit modeling system that we developed
in 1995, and by the end of the second quarter of 1996 plan to fully
implement our recently-installed computerized predictive dialing
system. All of these actions will make Monaco stronger than ever."
Mr. Ginsburg further commented, "In 1995 we saw the economy
weaken and delinquencies increase, and decided to tighten credit
standards resulting in the purchaseof fewer loans than in our 1995
business plan. Our goals for 1996, in addition to increasing our
portfolio of Contracts, include reducing delinquencies and charge-
offs by concentrating on higher-quality receivables."
Monaco Finance, Inc. is a leading indirect lender to car buyers
who cannot obtain bank financing. Under its specialized automobile
finance programs it acquires sub-prime automobile installment sales
contracts, primarily from franchised car dealerships.
Monaco Finance, Inc.
Financial Highlights
(unaudited)
Consolidated Statements of Operations
(dollars in Twelve months ended Three months ended
thousands, except per December 31, December 31,
share amounts)
1995 1994 1995 1994
Revenues
Interest $12,501 $7,144 $3,277 $2,381
Fee and other income 1,523 949 312 274
Total revenues 14,024 8,093 3,589 2,655
Costs and expenses
Provisions for credit
losses 1,635 1,094 344 440
Operating expenses 7,845 4,337 2,500 1,328
Interest expense 3,686 1,494 1,035 617
Total costs and
expenses 13,166 6,925 3,879 2,385
Income (loss) from
continuing operations
before taxes 858 1,168 (290) 270
Income tax expense
(benefit) 321 437 (108) 101
Income (loss) from
continuing operations 537 731 (182) 169
Income (loss) from
discontinued
operations net of
applicable income taxes (720) 331 (476) (145)
(Loss) on disposal of
discontinued business
net of applicable
income taxes (1,158) - (1,158) -
Net income (loss) ($1,341) $1,062 ($1,816) $24
Net earnings (loss)
per share
Earnings (loss) from
continuing operations $0.10 $0.13 ($0.03) $0.03
Earnings (loss) from
discontinued operations (0.13) 0.06 (0.08) (0.03)
(Loss) on disposal of
discontinued
operations (0.21) - (0.18) -
Net earnings (loss)
per share ($0.24) $0.19 ($0.29) $0.00
Weighted average
shares outstanding 5,603,689 5,467,586 6,368,990 5,200,150
Monaco Finance, Inc.
Financial Highlights
(unaudited)
Operating Highlights and Ratios
Twelve Months ended Three months ended
December 31, December 31,
1995 1994 1995 1994
Contracts from
Company dealerships 1,480 1,606 302 382
Contracts from
Dealer Network 4,892 2,880 880 851
Total contracts 6,372 4,486 1,182 1,233
Dollar Value of
Contracts Acquired $53,572,424 $38,611,549 $9,784,739 $10,539,101
Average Amount
Financed $8,407 $8,607 $8,278 $8,548
Operating Expenses
as a % of Revenues 56% 54% 70% 50%
Net Interest Margin
% - Annualized 16.2% 17.1% 14.8% 17.3%
Condensed Consolidated Balance Sheet
(dollars in thousands) December 31,
1995 1994
Assets
Cash and cash equivalents $7,248 $27
Restricted cash 3,695 1,594
Finance receivables - net of allowance
for doubtful accounts of $6,662 (1995)
and $2,559 (1994) 60,668 41,324
Repossessed vehicles held for sale 2,461 408
Income tax receivable 24
Deferred income taxes 43 123
Furniture and equipment, net of
accumulated depreciation of $701
(1995) and $356 (1994) 1,615 945
Net assets of discontinued operations 1,838 2,912
Other assets 1,759 918
$79,351 $48,251
Total assets
Liabilities and Stockholders' Equity
Notes Payable - Citicorp $ - $3,090
Accounts payable 453 533
Accrued expenses and other liabilities 93 87
Income taxes payable - 549
Convertible subordinated debt 1,385 2,615
Senior subordinated debt 5,000 5,000
Auto receivable-backed notes 49,670 22,205
Total liabilities 22,750 14,172
Total stockholders' equity 56,601 34,079
Total liabilities and stockholders'
equity $79,351 $48,251
CONTACT: Monaco Finance Inc., Denver
Irwin Sandler, Executive Vice President, 303/592-9411
or
MWW/Strategic Communications, Inc.
Tel. (201) 507-9500
Media: Michael W. Kempner - (mkempner@mww.com)
Investors: Ronald Stack - (rstack@mww.com)
CHESHIRE, Conn. -- April 1, 1996 -- Miles Homes,
Inc. (NASDAQ NMS:MIHO) today reported a net loss of $27.7 million,
or $2.56 per share for the year ended December 31, 1995, as compared
to a net loss of $9.9 million or $.94 per share for the year ended
December 31, 1994. The losses reported for 1995 and 1994 include
non-recurring charges of $18.0 million and $6.0 million,
respectively, including restructuring expenses and losses from
discontinued operations.
Net loss for the fourth quarter of 1995 was $17.0 million, or
$1.57 per share, compared to a net loss of $7.7 million or $.73 per
share for the fourth quarter of 1994. Losses for the fourth quarter
of 1995 include non-recurring restructuring charges and losses from
discontinued operations of $13.5 million or $1.25 per share. Total
revenue from continuing operations for the fourth quarter increased
to $18.0 million from $14.0 million in 1994.
Miles Homes Services shipped 1,246 homes in 1995 versus 1,018
homes in 1994, an increase of 22%. Gross orders received in 1995
were 3,153 vs. 2,445 in 1994 (a 29% increase). During the first
quarter of 1996, the order rate continued to show growth with orders
taken substantially exceeding 1995 first quarter activity.
As previously reported on November 27, 1995, Miles has decided
to rapidly phase out of and close down its wholly-owned subsidiary,
Patwil Homes, Inc. Patwil had been engaged in the marketing,
construction and sale of single-family detached homes. It is
expected that Patwil will complete its orderly liquidation of
operations in June 1996. Peter R. DeGeorge, Chief Executive
Officer, indicated "although we felt Patwil could be made profitable
over the next 12 months, we made the difficult decision to close
that operation in order to protect and preserve the core business of
Miles Homes. Miles Homes Services, the 'jewel' of the Company, has
experienced record first quarter order activity in 1996. To have
the Company continue to fund the turnaround of Patwil, which we
believe could never have matched the return on investment potential
of Miles Homes Services, would have been a mistake."
The Company is currently dependent upon cash flow from the sale
of construction loans to a mortgage finance company for its working
capital needs. Losses for the year ended December 31, 1995, and
write-offs occasioned by the discontinuance of operations of Patwil
Homes, have caused the Company to violate the minimum tangible net
worth covenant in the agreement with the mortgage finance company.
Although a waiver has not been obtained, since being verbally
notified of the minimum net worth covenant violation, the mortgage
financing company has continued to purchase construction loans from
the Company. Further, management believes that a waiver of the
covenant can be obtained and that the agreement can be revised based
on the Company's anticipated operating results. However, there can
be no assurance that this will come to pass. If the mortgage
financing company should stop purchasing construction loans, a
serious working capital shortage would result.
During 1995 the Company's Miles Homes Services subsidiary began
to move certain operations from Plymouth, MN to Cheshire, CT. On
February 7, 1995, Miles sold its corporate facilities in the
Minneapolis, MN area where operational and administrative functions
are performed. For the years ended December 31, 1995 and 1994
respectively, Miles has recorded restructuring costs of $1.4 million
and $903,000.
Miles provides building plans, building materials, construction
monitoring and support services and construction financing to
customers who act as their own general contractors and assist in the
building of their own homes.
MILES HOMES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Years Ended
Dec. 31, Dec. 31,
1995 1994 1995 1994
Net housing revenue $16,706,668 $12,107,852 $59,629,566 $55,461,668
Financial services
revenue 1,321,822 1,859,002 5,844,483 6,215,809
Total revenue 18,028,490 13,966,854 65,474,049 61,677,477
Costs and expenses:
Cost of sales 11,079,426 7,918,494 38,270,146 34,818,866
Selling 3,524,067 3,128,675 12,971,903 10,592,150
General &
administrative 4,087,539 4,057,768 14,164,065 12,645,697
Provision for credit
losses 367,000 336,000 1,475,000 1,512,000
Interest expense 1,591,049 1,757,132 7,557,420 7,726,204
Other (income)
expense (463,989) 796,660 (539,513) 26,323
Restructuring
expense 1,357,713 684,986 1,357,713 903,115
Income (loss) from
continuing
operations before
income taxes (3,514,315) (4,712,861)
(9,782,685)(6,546,878)
Income tax benefit
(provision) (1,272,000) 1,174,595 (1,272,000) 1,702,000
Income (loss) from
continuing
operations (4,786,315) (3,538,266)
(11,054,685)(4,844,878)
Discontinued
operations-Patwil
Homes Inc.
tax benefit
Income (loss) from
operations (3,959,137) (4,139,043)
(8,412,717)(5,053,956)
Estimated loss on
disposal during the
phase out period (8,205,824) - (8,205,824) -
Net income (loss) $(16,951,276)$(7,677,309) $(27,673,226)
$(9,898,834)
Earnings per
common share:
Income (loss) from
continuing operations
before discontinued
operations $ (0.44)$ (0.34) $ (1.02) $
(0.46)
Income (loss) from
discontinued
operations (1.13) (0.39) (1.54)
(0.48)
Net income (loss) $ (1.57)$ (0.73) $ (2.56) $
(0.94)
CONTACT: Miles Homes Inc., Cheshire
Herbert L. Getzler, 203/271-0011