NEW YORK, NY -- April 16, 1996 -- Western Publishing
Group, Inc. (OTC:WPGI) today reported sales and earnings for the
fourth quarter and year ended Feb. 3, 1996.
Revenues were $88.9 million for the fourth quarter of Fiscal
1996 or a decrease of $9.8 million when compared to $98.7 million
for the same period in Fiscal 1995. This decrease resulted
principally from the decline in unit and dollar sales of the
company's interactive electronic storybooks and other interactive
electronic products reflecting the competitive environment, the
maturity of certain older formats and price reductions implemented
by the company on a number of these products in an effort to meet
competition and to reduce inventory. In addition, the company
experienced lower sales in its paper tableware and party goods
division as the performance of certain licensed products declined in
comparison to the prior year.
For the Fourth Quarter of Fiscal 1996, the company incurred an
operating loss (loss before interest expense and income taxes) of
$12.4 million versus an operating loss of $4.2 million in the Fourth
Quarter of Fiscal 1995. The net loss for the Fourth Quarter was
$13.2 million or $0.64 per share based upon an average of 21,092,000
shares outstanding compared to a loss of $6.0 million or $0.30 per
share for the fourth quarter of fiscal 1995 based upon an average of
21,023,000 shares outstanding.
Revenues for Fiscal 1996 were $374.3 million compared to $402.6
million for Fiscal 1995, or a decrease of $28.3 million. The
factors contributing to this revenue decline are consistent with the
aforementioned Fourth Quarter discussion. The net loss for the year
ended Feb. 3, 1996 was $67.0 million or $3.23 per share, compared to
a net loss of $17.6 million or $0.88 per share for the year ended
Jan. 28, 1995. Results of operations for the year ended Feb. 3,
1996 included a provision for restructuring and closure of
operations of $8.7 million and an additional gain on streamlining
plan of $2.0 million before income taxes. Results of operations for
the year ended Jan. 28, 1995 included a gain on streamlining plan of
$20.4 million before income taxes and an adjustment to reflect a
reduction to the provision for the write-down of Division of $1.1
million before income taxes.
Richard A. Bernstein, chairman and chief executive officer of
Western Publishing Group, Inc., commented: "This year has been one
of significant internal change for our company and external
difficulties in the retail marketplace. The Company has undergone
an organizational restructuring in an effort to return to
profitability. A significant Company-wide workforce reduction,
including the reorganization of our sales and merchandising forces
and an early retirement program, was executed in Fiscal 1996 with
the benefits of these actions to be realized in Fiscal 1997.
"Operating results were also impacted by personnel distractions
resulting from the announced sale of a major interest in the company
which will result in a change in management. Further, it was
determined that despite the success in expanding the sale of
children's books in the mass market, operation of our Storyland
Category Management Program at Wal-Mart would be returned to Wal-
Mart management at the beginning of calendar 1996. This decision
resulted in reduced sales of non-Western product during the Fourth
Quarter of Fiscal 1996."
"Notwithstanding these issues," Bernstein continued, "the
company was able to accomplish many improvements in its effort to
return to profitability. The WISDOM computerized operating system
is now performing to expectations and has resulted in more accurate
tracking of sales as well as improved customer service. Inventory
has been reduced significantly, resulting in lower carrying costs
and the need for less warehousing space. The company's expansion of
its paper tableware and party goods operations in Kalamazoo, Mich.
will be completed and operational in the First Half of Fiscal 1997.
"The company has no short-term debt and the combination of the
company's year-end cash balances and Receivables Purchasing Facility
provide adequate working capital for Fiscal 1997."
"I am delighted that we were able to reach an agreement for an
acquisition of a significant interest in the company by Richard E.
Snyder, Barry Diller and Warburg, Pincus Ventures, L.P. Upon the
completion of this transaction, which is scheduled to close in early
May, Dick Snyder will be taking over the leadership of the Company.
I have now had the opportunity to work with Dick during the last
three months and I am certain he will bring a new vision and
leadership to our company. There is no question that he will be the
stimulus for renewed growth and profitability at Western and that he
will lead the Company into a new era of expansion and success.
"All of our employees and shareholders will benefit from Dick's
management and leadership skills as well as from the business acumen
of Warburg Pincus, one of the major venture banking firms in the
United States. As a major Western shareholder, I look forward to
enjoying the future enhancement to shareholder value that I know
will insure to all shareholders under Dick's leadership. I would
also like to welcome Robert Asahina who is rejoining Dick at Western
after Bob's very successful career at Simon & Schuster.
"Bob will create a new division at Western Publishing Company
that will extend and enhance the GOLDEN BOOKS(R) brand and franchise
by introducing a line of adult non-fiction books under the GOLDEN
BOOKS(R) imprint. Bob's joining the company marks a significant
event for Western Publishing Company and is a symbol of the
Company's re-emergence as a major force in publishing for the entire
family."
Western Publishing Group Inc., through its Western Publishing
Co. subsidiary, creates, publishes, manufactures, prints and markets
story and picture books, interactive electronic books and games,
computer and multi-media "edutainment" products, as well as coloring
books and other activity books and products for children. These
products are sold principally under the GOLDEN BOOK(R) brand. The
company also produces and markets Frame-Tray(R) puzzles, children's
pre-recorded videos and special interest books for the entire
family. Western Publishing Co. also offers a wide range of printing,
graphic, creative and distribution services to customers in industry
and government.
Western Publishing Group Inc. through the Beach Products
Division of its Penn Corporation subsidiary, is engaged in the
manufacture and sale of decorated paper tableware, party goods,
stationery and gift products.
WESTERN PUBLISHING GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
Three Months Ended Year Ended
Feb. 3, Jan. 28, Feb. 3, Jan. 28,
1996 1995 1996 1995
Revenues $ 88,887 $ 98,666 $374,257 $402,555
(Loss) income before
interest expense and
income taxes
(benefit) $(12,374) $ (4,227)(b) $(42,856)(a) $
2,458(b)
Net loss $(13,210) $ (6,013) $(67,047)
$(17,579)
Preferred dividend
requirements (212) (212) (848)
(848)
Loss applicable
to common stock $(13,422) $ (6,225) $(67,895)
$(18,427)
Loss per common share $ (0.64) $ (0.30) $ (3.23) $
(0.88)
Weighted average number
of common shares
outstanding 21,092 21,023 21,047 20,997
CONTACT: Western Publishing Group Inc., New York
Ira A. Gomberg, 212/688-4500
LONG BEACH, Calif. -- April 16, 1996 -- City
attorneys and city managers representing the 14 Option B cities and
agencies are recommending to their elected officials a proposed
settlement of the group's bankruptcy claims against Orange County.
Members of the group which chose Option B in the Orange County
bankruptcy are all expected to vote on the proposed settlement by 10
a.m. Friday. The county Board of Supervisors is scheduled to
consider the settlement Wednesday.
The City of Buena Park is considering the proposed settlement at
tonight's (April 15) City Council meeting.
"We have never supported using taxpayer money to fight other
public agencies," said Michael Martello, city attorney for the City
of Mountain View. "Hopefully, this proposed settlement will allow
the county to make peace with all the cities and agencies involved
in the bankruptcy."
In exchange for a settlement from the county, the Option B group
would drop their lawsuit against the county and vote for the
county's Plan of Adjustment. The Option B group also would retain
all its claims against Merrill Lynch and other third parties, from
which the group plans to recover the remainder of its losses and
damages. Terms of the proposed settlement cannot be released
pending review by both the county and the 14 Option B cities and
agencies.
"We always said our goal was to recover 100 percent of taxpayer
funds. This proposed settlement and our right to seek recovery from
Merrill Lynch and others does just that," Martello said.
When Orange County declared bankruptcy on Dec. 6, 1994, the
Option B cities had $187 million deposited in the Orange County
Investment Pool, about 2.5 percent of the total. In the subsequent
bankruptcy settlement, which was approved by the federal bankruptcy
judge and the Orange County Board of Supervisors, all depositors
ultimately were offered Option A or Option B. The cities and
agencies which chose B were paid less but were allowed to pursue
independent recovery efforts against the county and third parties.
The B participants received an average of 77 percent of their money
but have been working to recover the rest--at least $44 million.
"We cut the best deal we could," Martello said. "The As got a
reasonable deal that accomplished their goals. Our proposed
settlement is structured a little differently but it will do the
same thing."
CONTACT: Adler Public Affairs, Long Beach, Calif.
Cheryl Downey, 310/433-3176
FORT LAUDERDALE, Fla. -- April 16, 1996 -- Encore
Computer Corp. (NASDAQ/NMS:ENCC) Tuesday announced that revenues for
the year ended Dec. 31, 1995 were $49,328,000 compared to 1994
revenues of $76,550,000.
Losses for 1995 were $81,354,000 ($2.37 per share) as compared
to a 1994 loss of $54,556,000 ($1.68 per share).
The company also announced the completion of a $100 million two
phased financial restructuring with Gould Electronics Inc. The
equity phase of the restructuring consists of the conversion of $35
million of debt into a Series H Convertible Preferred Stock. The
debt financing phase consists of providing Encore with a committed
financing facility of $65 million through April 16, 1997.
Commenting on these results, Kenneth G. Fisher, chairman and
chief executive officer stated: "We continued to make a major
investment during 1995 in R&D to develop the company's new storage
product. This investment, together with the recent $35 million
equity investment and increased funding provided by the company's
major shareholder, Gould Electronics, a subsidiary of a $20 billion
Japanese company, should provide the basis for the company to
significantly grow its market share in the expanding storage
marketplace."
During 1995, the company continued to experience the negative
effects of the termination of its agreement with Amdahl Corp. and
recognized associated losses of $14,240,000. Since the termination
of the Amdahl agreement, the company has focused its marketing
efforts on OEM's as well as other distributors and end user sales.
Building this new distribution strategy has taken time and caused
delays in revenue. Significant progress has been accomplished in
building the new storage distribution strategy. During the First
Quarter of 1996, the company began to recognize storage product
revenues from both the direct sales force and distributors on a
worldwide basis.
Encore's efforts in developing storage OEM relationships are
very active. On April 10, 1996, Digital Equipment Corp. and Encore
announced an agreement to jointly market the Encore Infinity Gateway
storage product. The companies will join forces to provide data
sharing between IBM mainframes and open Alpha Server 8000 systems.
Discussions with other OEM's regarding Encore's Infinity storage
systems are continuing. Interest is high and it is Encore's
objective to obtain additional agreements for storage revenues in
1996.
Encore's real-time business enjoyed a 48% increase in quarterly
revenues over the previous quarter due to Encore's new Alpha-based
real-time systems, new markets and new government program orders.
Encore Computer Corp. is a worldwide company headquartered in
Fort Lauderdale. Encore is the world's leading innovator in
scalable real-time data storage, data retrieval and data sharing
technologies for mixed platform processing environments. Encore has
been the market leader for over 30 years in providing real-time
deterministic systems for time-critical applications. Encore is a
publicly held corporation with shares traded on the NASDAQ National
Market System (ENCC). For more information about Encore products
and services, see our World Wide Web page at:http://www.encore.com." target=_new>http://www.encore.com">http://www.encore.com.
CONTACT: Encore Computer Corp., Fort Lauderdale
Charles S. Anderson, 305/797-5605
New Valley Corporation reports 1995
financial results
MIAMI, FL -- April 16, 1996 -- href="chap11.newvalley.html">New Valley Corporation
(OTC: NVLY) today reported financial results for the year ended
December 31, 1995.
Full-year 1995 revenues were $67.7 million compared to revenues
of $10.4 million in 1994. Income from continuing operations was
$1.4 million in 1995 compared to a loss of $15.3 million in 1994.
Net income was $18.2 million in 1995 compared to $1,010 million in
1994. After giving effect to dividends on and repurchases of New
Valley s preferred shares, the net loss applicable to common shares
was $13.7 million, or $.07 per common share, in 1995 compared to net
income applicable to common shares of $929.9 million, or $4.94 per
common share, in 1994.
"For New Valley Corporation, 1995 was a year of many important
developments," said Bennett S. LeBow, chairman and chief executive
of New Valley Corporation. "After emerging from bankruptcy in
January 1995 with over $300 million in unrestricted cash, New Valley
embarked on an aggressive acquisition program, which, in addition to
purchasing 5.2 million shares of RJR Nabisco (NYSE: RN), also
included purchasing the investment bank, Ladenburg, Thalmann & Co.
Inc., acquiring a controlling interest in Thinking Machines, a
software developer and marketer, and making a $184 million
commercial real estate purchase."
New Valley is principally engaged in, through Ladenburg,
Thalmann & Co. Inc., the investment banking and brokerage business,
and in the ownership and management of commercial real estate and
the acquisition of operating companies.
CONTACT: Sard Verbinnen & Co., New York
George Sard/Anna Cordasco/Paul Caminiti, 212/687-8080
MIAMI, FL -- April 16, 1996 -- Brooke Group Ltd. (NYSE:
BGL) today reported financial results for the year ended December
31, 1995. Preliminary results had previously been reported on April
2, 1996.
Full-year 1995 revenues were $461.5 million compared to revenues
of $479.3 million in 1994. Operating income was $8.1 million in
1995 versus operating income of $14.2 million in 1994. The loss
from continuing operations before income taxes was $45.0 million in
1995 versus $42.5 million in 1994. Net loss applicable to common
shares was $17.1 million, or $0.94 per common share, in 1995
compared to net income of $110.1 million, or $6.25 per common share
in 1994.
"1995 and the first few months of 1996 have marked a time of
pivotal developments for Brooke Group and its shareholders," said
Bennett S. LeBow, chairman, president and chief executive of Brooke
Group. "Most significantly, in early 1996, Brooke's Liggett tobacco
subsidiary entered into comprehensive settlements of tobacco
litigation with the nationwide Castano class and with the Attorneys
General of five states. For a small price, these settlements secure
an insurance policy protecting Liggett from all addiction-based
claims, the most serious litigation risks facing the industry, and
greatly increase Liggett s potential value to Brooke shareholders.
"Many important steps were also taken in 1995 by href="chap11.newvalley.html">New Valley
Corporation, of which we are 42 percent owners. After emerging
from
bankruptcy in January 1995 with over $300 million in unrestricted
cash, New Valley embarked on an aggressive acquisition program,
which, in addition to purchasing 5.2 million shares of RJR Nabisco
(NYSE: RN), also included purchasing the investment bank, Ladenburg,
Thalmann & Co. Inc., acquiring a controlling interest in Thinking
Machines, a software developer and marketer, and making a $184
million commercial real estate purchase.
In 1995, the Company resumed payment of a regular quarterly cash
dividend of $0.075 per share, or $0.30 annually, to holders of
Brooke Group common stock. Also in 1995, the Company successfully
refinanced substantially all of its corporate debt with five year
notes due 2001, through its BGLS Inc. subsidiary.
LeBow continued, "In our effort to realize value for our
shareholders, Brooke Group continues to strive as a contrarian
investor, pursuing opportunities in a number of diverse industries.
In 1996, we intend to focus on maximizing the value of our current
operations while continuing to identify and capitalize on new
investment opportunities in the U.S. and abroad."
Brooke Group is a holding company which owns controlling
interests in New Valley Corporation and Liggett Group, and has
tobacco and real estate operations in Russia.
CONTACT: George Sard/Anna Cordasco/Paul Caminiti
Sard Verbinnen & Co
212/687-8080
NORTH ANDOVER, Mass. -- April 16, 1996 -- Watts
Industries, Inc. (NYSE:WTS) today announced its financial results
for the third quarter of fiscal 1996.
Net sales from continuing operations increased 4.5% to
$159,823,000 compared to $152,973,000 last year. Net income (loss)
for the third quarter from continuing operations, inclusive of the
restructuring charge, for the net loss of ($80,303,000) compared to
net income of $11,751,000 last year. The results from continuing
operations, exclusive of the restructuring charge, for the third
quarter are $.32 earnings per share compared to $.40 earnings per
share last fiscal year.
For the nine month period, net sales from continuing operations
increased 10% to $470,545,000 compared to $426,977,000 last year.
Net income (loss) for the nine months from continuing operations,
inclusive of the restructuring charge, is a net loss of
($58,588,000) compared to net income of $32,899,000. For the nine
month period, results from continuing operations, exclusive of the
restructuring charge, are $1.05 earnings per share compared to $1.11
earnings per share last fiscal year.
As previously announced, the company recorded an $89.6 million
after-tax ($3.02 per share) restructuring charge in the third
quarter. The restructuring charge includes $63 million of asset
write-downs, primarily goodwill, 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." The charge also includes approximately $13 million
associated with plant consolidation and downsizing, $9 million of
asset write-downs, and $4 million of other charges. The after-tax
cash impact of these charges is $9 million. There will be a
reduction in employment of 290 people associated with this
restructuring program. The company is also divesting the Municipal
Water Group to enable it to concentrate on its core plumbing and
heating, industrial, and oil and gas businesses. The Municipal
Water Group will be treated as discontinued operations for
accounting purposes.
Timothy P. Horne, Chairman, President and Chief Executive
Officer, stated, "The large write-off of goodwill relates primarily
to our operations in Italy including Pibiviesse S.p.A and Intermes
S.p.A. In the case of Pibiviesse, these operations have incurred
significant losses and this company is being downsized accordingly
in an effort to provide profitability during fiscal 1997. The
goodwill issues at Intermes do not pertain to that company's
profitability but rather to the fact that goodwill is no longer tax
deductible because of a change in Italian law."
Horne continued, "As a part of our overall restructuring program
to become more efficient by consolidating operations, one of the
major initiatives we are taking is to relocate Jameco Industries
from Wyandanch, Long Island to a Watts Regulator plant located in
Spindale, North Carolina. Jameco's nine month sales are $44.5
million. We believe that it will take approximately nine months to
effectuate this transfer on an orderly basis and various charges
relating to this decision are contained in our third quarter's
results. There will be some related charges also incurred in the
future, mostly in our fourth quarter."
Horne added, "Our diversification through acquisition has led us
into many different markets during the past decade and we have now
decided to focus on our Plumbing and Heating, Industrial, and Oil
and Gas segments for future acquisition strategy and growth
potential. We have, therefore, recently announced that our
Municipal Water Group of companies consisting of Henry Pratt, James
Jones and Edward Barber & Company will be divested. We expect that
this diverstiture program will take from three to six months to
complete."
Horne concluded, "The steps undertaken through the restructuring
program should provide a forward momentum for earnings growth. The
reorganization will require more than two years to complete although
we believe some positive effects of these actions will be realized
during fiscal year 1997."
Watts reports third quarter earnings
(In thousands, except per share amounts)
Third Quarter Ended Nine Months Ended
March 31st March 31st
1996 1995 1996 1995
Net Sales $159,823 $152,973 $470,545 $426,977
Cost of Sales 114,882 97,101 312,770 268,360
Selling, General and
Administrative 51,053 34,605 123,104 98,160
Restructuring charges 19,891 0 19,891 0
Impairment of Long-lived 63,065 0 63,065 0
Assets
Other (Income) expense, net 2,517 1,853 7,937 5,965
Income Before Income Taxes (91,585) 19,414 (56,222) 54,492
Provision for Income Taxes (11,282) 7,663 2,366 21,593
Income from Continuing
Operations (80,303) 11,751 (58,588) 32,899
Income from Discontinued
Operations - net 1,030 980 2,226 2,387
Net Income ($79,273) $12,731 ($56,362) $35,286
Average Shares
Outstanding 29,732,876 29,695,621 29,757,391
29,696,511
Earnings Per Share:
Continuing Operations ($2.70) $0.40 ($1.97) $1.11
Discontinued Operations $0.03 $0.03 $0.08 $0.08
Net Income ($2.67) $0.43 ($1.89) $1.19
Cash Dividends per Share $0.0700 $0.0625 $0.1950 $0.1725
NEW YORK, NY -- April 16, 1996 -- A class action was
filed last Friday, April 12, 1996, in the Supreme Court of the State
of New York, County of New York, on behalf of purchasers of notes,
bonds, units, lease assignments and other instruments ("Bennett
Securities") issued by The Bennett
Funding Group, Inc. ("BFG"),
which filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code on April 1, 1996 and halted further
payments to investors, and companies affiliated with it.
The Class Action Complaint asserts claims for common law fraud,
negligent misrepresentation, breaches of fiduciary duty, deceptive
business practices in violation of Section 349 of the New York
General Business Law, and the sale of unregistered securities in
violation of the Securities Act of 1933. The complaint also seeks
an accounting. Named as defendants are certain of the officers and
directors of BFG, certain non-bankrupt affiliates of BFG, the
accounting firm that audited BFG's financial statements, and various
broker-dealers that participated in offering and selling Bennett
Securities to the public.
The Complaint charges that defendants violated state and federal
law by, among other things, engaging in deceptive and wrongful
practices and misrepresenting and/or omitting material information
with respect to the business, financial condition and performance of
BFG and its affiliates in connection with the sale of Bennett
Securities to the public. Plaintiffs in this action seek to recover
damages on behalf of persons who purchased Bennett Securities prior
to March 28, 1996 and are represented by the law firms of Milberg
Weiss Bershad Hynes & Lerach LLP, Spector & Roseman, P.C., and the
Law Offices of Edward A. Berman P.C., which have significant
experience and expertise prosecuting class actions on behalf of
defrauded investors and shareholders and handling complex commercial
litigation.
Milberg Weiss has been actively engaged in commercial
litigation, emphasizing securities, shareholder and antitrust class
actions, for more than 20 years. The firm has offices in New York,
San Diego, San Francisco and Los Angeles and is active in major
litigations pending in federal and state courts throughout the
United States. The firm's reputation for excellence has been
recognized on repeated occasion by courts, which have appointed the
firm to major positions in complex multi-district or consolidated
litigations. Milberg Weiss has taken a lead role in numerous
important actions on behalf of defrauded investors and has been
responsible for a number of outstanding recoveries which, in the
aggregate, total approximately $2 billion.
If you wish to discuss this action or have any questions
concerning your rights or interests with respect to these matters,
please contact Milberg Weiss at One Penn Plaza, 49th Floor, New
York, NY 10119-0165, or telephone: 1-800-390-7969.
CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP
1-800-390-7969
ELKIN, N.C., April 16, 1996 - href="chap11.brendle.html">Brendle's Incorporated
(Nasdaq: BRDL), announced today a dramatic strategic repositioning
as it plans to focus on six merchandise categories that have
demonstrated significant strength and substantial opportunity. As
part of this fundamental shift the Company announced the closing of
eighteen stores, thus concentrating its initial efforts on the
twelve markets it will continue to serve. In order to effect these
and other changes the Company announced today that it has filed a
Chapter 11 reorganization petition in the United States Bankruptcy
Court for the Middle District of North Carolina.
Brendle's, best known for its jewelry, housewares and gift
selection, will expand its offering of party goods, successfully
launched last year under the Party Universe name; substantially
broaden its crafts offering; and further concentrate on personal
health care, fitness, and outdoor products. By concentrating its
strategic efforts on these merchandise categories the Company is
positioning itself as a destination store for the home, for family
and for health. The Company expects to offer its customers far
deeper selections than do its competitors in the markets it serves.
Brendle's will exit from or substantially reduce its emphasis on
several merchandise categories which provide very low margin and
have significant carrying costs. It is anticipated that the
revitalized merchandise selection will have a significant and
positive effect on the Company's financial performance, resulting in
higher gross margins, reduced inventory investment requirements and
higher return on investment.
The Company's decision to file a Chapter 11 petition is
necessitated by the fact that it has substantial lease liabilities
which, together with the investment necessary to restructure itself
both strategically and operationally, have put significant pressure
on its working capital. Foothill Capital Corp., the Company's
secured lender, is providing a $25 million debtor-in-possession
revolving credit facility. The Company expects the reorganization
process to be a relatively short one.
Joseph M. McLeish, Jr., President and Chief Executive Officer,
stated, "The plans we have are the most exciting I have seen in
years. We have developed a new, unique and exciting, destination
store which provides our valued customers an unparalleled offering
for the home, for family and for health. Combined with our
established, excellent jewelry offering we are providing an
assortment of quality products under one roof not available anywhere
in the markets we serve. Our customers will see the new Brendle's
emerge before their eyes as we also undertake a major store
renovation program which will further enhance the Brendle's shopping
experience."
CONTACT: Joseph M. McLeish, Jr., 910-526-6570, or David R.
Renegar, 910-526-6511, both of Brendle's Incorporated