TCR_Public/960507.MBX BANKRUPTCY CREDITORS' SERVICE, INC.


Bankruptcy News For - May 7, 1996



  1. SyQuest Technology Announces Second-Quarter Loss
  2. ADT ANNOUNCES FIRST QUARTER EARNINGS




SyQuest Technology Announces Second-Quarter Loss After Restructuring of
Operations; New Senior Management Appointed


            FREMONT, Calif. -- May 7, 1996 -- SyQuest
        Technology, Inc. (NASDAQ:SYQT) today announced its operating results
        for the second quarter ended March 31, 1996.  The company reported a
        net loss of $51.1 million, or $4.49 per share, on net revenues of
        $47.4 million.  This compares with net income of $3.7 million, or 31
        cents per share, on net revenues of $76.5 million in the second
        quarter of fiscal year 1995.  
        


            For the first six months of fiscal 1996, SyQuest's net loss was
        $84.9 million, or $7.48 per share, on net revenues of $126.1
        million. This compares with net income of $5.6 million, or 47 cents
        per share, on net revenues of $142.4 million in the first six months
        of fiscal 1995.  

        
            "The restructuring of company operations that we announced on
        February 1 of this year is in the process of being completed," said
        Syed H. Iftikar, chief executive officer of SyQuest.  "We are
        consolidating our high-volume Asian manufacturing operations in
        Penang in order to lower our costs.  We are also refocusing our
        product line in order to be more competitive.  However, we are still
        rebuilding the business and do not expect to return to profitability
        in the current quarter."  
   

     
            SyQuest's restructuring costs in the second quarter consisted of
        a one-time, pre-tax charge against earnings of $3.6 million.  This
        charge included provisions for fixed assets associated with Asian
        manufacturing operations, as well as severance compensation and
        other benefits for the approximately 1,500 SyQuest employees
        affected by the restructuring.  

        
        New Management
   

     
            Consistent with the restructuring, SyQuest continues to rebuild
        its senior management team.  Effective immediately, the company has
        appointed
      



            Iftikar will remain as chief executive officer, joining Marinaro
        and Harper as an integral member of the newly formed office of the
        president, and will continue to serve on the company's board.  
   

     
        Second-Quarter Results
      

  
            In the second quarter, net revenues declined 38.0 percent from
        $76.5 million in the second quarter of fiscal 1995.  Cost of
        revenues increased 25.4 percent to $69.0 million, from $55.0 million
        a year ago.  Adding a provision for losses on purchase commitments
        of $3.8 million, this resulted in a gross loss of $25.4 million,
        compared with a gross profit of $21.5 million, or 28.1 percent of
        revenues, in the year-earlier quarter.  The gross loss was due
        principally to lower average selling prices for core products,
        including the SQ5200 and the SQ3270 drives; to losses associated
        with the EZ135 systems introduced in the fourth quarter of fiscal
        year 1995; and to the continued shift in revenues from higher-margin
        drives to lower-margin systems.  Also contributing to the gross loss
        were a $12.8-million provision for excess inventories and a $3.1-
        million provision for the write-off of inventory and tooling.  

        
            Selling, general and administrative expenses increased 32.6
        percent, from 14.1 percent of net revenues to 30.2 percent in the
        second quarter of fiscal 1996, due to additional provision for bad
        debts and to costs associated with the company's European
        headquarters, which had opened in October 1995.  Research and
        development expenses grew 20.8 percent, from 8.0 percent of net
        revenues to 15.5 percent, reflecting continued investments in new
        products.  

        
        Liquidity
   

     
            The company announced that it has retained the investment
        banking firm of Needham & Company to assist in identifying potential
        strategic partners and sources of debt and equity financing.  It
        also said that management is working closely with its banks,
        suppliers and potential outsourcing partners to manage cash and
        finance operations. SyQuest said that each group has been supportive
        and that
      


            The company also said that the new members of its management
        team intend to build on the support already received and finalize
        pending negotiations, as well as pursue strategic alliances and debt
        and equity financing.  
      

  
        Board of Directors
        


            In a separate announcement, SyQuest reported that Robert C.
        Wilson has resigned from its board of directors, effective
        immediately.  Wilson, a partner of Wilson and Chambers, Inc., a
        business consulting firm, had served on the SyQuest board since
        1982.

        
            "During his lengthy tenure, Bob Wilson has brought a wealth of
        wisdom to the SyQuest board," said Iftikar.  "He has been a trusted
        advisor to me personally and to the company for many years.  The
        other board members and I will miss him greatly, and we wish him all
        the best in his other pursuits.   
   

     
            "At the same time, we are pleased to welcome Ed Marinaro as
        chairman," Iftikar added.  "Ed is a 36-year veteran of the computer
        systems, software and storage industries, having held senior
        executive and operating management positions with leading companies
        in these fields.  His advanced skills and experience will help guide
        the future direction of SyQuest."  
      

  
        The Company
        


            SyQuest Technology, Inc. was founded in 1982 and has shipped
        more than 2 million removable cartridge hard disk drive systems and
        more than 9 million cartridges.  SyQuest is headquartered in
        Fremont, California, and maintains manufacturing facilities in
        Fremont and Penang, Malaysia, with additional facilities in
        Colorado, Europe, Japan and Singapore.  The company offers removable
        Winchester technology solutions for Windows 95, Windows, Windows NT,
        Apple Macintosh, MS-DOS, UNIX, SGI, SunOS and Novell platforms.
        SyQuest common stock (SYQT) is publicly traded on the NASDAQ
        National Market System.  See SyQuest on the World Wide Web at
        http://www.syquest.com" target=_new>http://www.syquest.com">http://www.syquest.com

        
            Except for the historical information contained herein, the
        matters presented in this news release are forward-looking
        statements that involve risks and uncertainties, including the
        timely development and market acceptance of new products and
        upgrades to existing products, the impact of competitive products
        and pricing, and other risks detailed from time to time in the
        company's filings with the Securities and Exchange Commission (SEC).
        In particular, see Forms 10-Q and 10-K as they are filed.


        
                          SYQUEST TECHNOLOGY, INC.
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                   (In thousands, except per share data)
                                (unaudited)
        
                               Three months ended       Six months ended
                                    March 31,               March 31,
                                 1996       1995         1996     1995
        
        Net revenues                $47,445   $76,490    $126,112  $142,382
        Cost of revenues             69,003    55,030     149,093   104,995
        Provision for losses on
         purchase commitments         3,833        --      11,672        --
                                --------  --------   ---------  --------
           Gross Profit (loss)      (25,391)   21,460     (34,653)   37,387
        
        Operating Expenses:        
        Selling, general and
         administrative              14,351    10,826      28,815    19,413
        Research and development      7,360     6,095      14,520    11,270
        Restructuring cost            3,600        --       3,600        --
                                 -------   -------     -------   ------
        Total operating expenses     25,311    16,921      46,935    30,683
                                 -------   -------     -------   -------
        Income (loss) from
         operations                 (50,702)    4,539     (81,588)    6,704
        
        Interest income (expense)      (403)      311        (318)      676
                                 -------   -------     -------   -------
        Income (loss) before
         income taxes               (51,105)    4,850     (81,906)    7,380
        
        Provision for income taxes       --     1,164       3,000     1,771
                                 -------   -------     -------   -------
        Net income (loss)          ($51,105)   $3,686    ($84,906)   $5,609
        
        Income (loss) per share:
          Net income (loss)          ($4.49)    $0.31      ($7.48)    $0.47
        
        Common and common equivalent
        shares used in computing
        per share amounts            11,371    11,838      11,351    11,864
        
                          SYQUEST TECHNOLOGY, INC.
                   CONSOLIDATED CONDENSED BALANCE SHEETS
                              (In thousands)
        
                                     March 31,       September 30,
                                       1996              1995
                                    (Unaudited)         (Note)
        
             Assets
        
        Current assets:
         Cash and cash equivalents       $  7,273         $ 29,248
         Short-term investments               400              400
         Accounts receivable               42,893           55,653
         Inventories                       40,079           34,213
         Prepaid expenses and deposits      3,597            2,066
         Deferred income taxes             10,254           13,254
                                       ------           ------
         Total current assets             104,496          134,834
         
        Property, equipment and                                   
         leasehold improvements            62,544           57,790
        
          Less: Accumulated
           depreciation                   (29,274)         (31,070)
                                      --------         --------
         Net property and equipment        33,270           26,720
         
         Other assets                       3,012            3,130
                                      -------          -------
                                     $140,778         $164,684
        
           Liabilities and Stockholders' Equity (Deficit)
        
        Current liabilities:
         Accounts payable                $ 77,126         $ 41,213
         Income taxes payable                 860              355
         Accrued compensation               5,046            5,206
         Accrued expenses and other
          liabilities                      18,561           15,210
         Provision for losses on
          purchase commitments             14,237           10,510
         Notes payable to bank             17,494               --
                                       ------           ------
         Total current liabilities        133,324           72,494
        
        Deferred rent                         252              276
        
        Deferred income taxes               8,725            8,726
        
        Stockholders' equity (deficit):
         Common stock                          13               13
         Additional paid in capital        79,684           79,489
         Treasury stock                   (12,855)         (12,855)
         Retained earnings (deficit)      (68,365)          16,541
                                      --------         --------
         Total stockholders' equity
          (deficit)                        (1,523)          83,188
                                      --------         --------
                                     $140,778         $164,684

                                    
        Note:  The consolidated condensed balance sheet at September 30,
        1995 has been derived from the audited financial statements at that
        date.

        
        CONTACT:  SyQuest Technologies, Inc.
                  James E. Graber, 510/226-4000
   


     
ADT ANNOUNCES FIRST QUARTER EARNINGS
        


            BOCA RATON, Fla., May 7, 1996 - ADT Limited (NYSE: ADT) a
        leading provider of electronic security services and vehicle auction
        services announced today that net income for the first quarter of
        1996, after adding back the charge resulting from the application of
        Statement of Financial Accounting Standards No. 121 ("SFAS 121"),
        was $31.0m, representing an increase of 14 per cent over the figure
        of $27.1m for the first quarter of 1995, on net sales of $354.3m
        (1995 - $373.3m). Net sales for the first quarter of 1995 included
        revenues of $54.5m from the Company's European vehicle auction and
        electronic article surveillance businesses, which were sold in the
        fourth quarter of 1995.
        


            Commenting, Mr. Michael A. Ashcroft, Chairman and Chief
        Executive Officer, said:
        


            "With ADT's new channels of distribution, through strategic
        alliances in the retail, financial services and real estate sectors
        and its new authorized dealer program, which now has 60
        participating dealers, ADT is well positioned to achieve growth in
        market share and to increase customer density in chosen markets.  We
        believe that this strategy is key to building shareholder value.

        
            "The reorganization of the electronic security services business
        in North America along business lines is proceeding well and we are
        optimistic that the benefits of this reorganization will start to
        come through towards the end of 1996 and beyond."
   

     
            A market purchase program in respect of up to 5,000,000 common
        shares has been approved by the board, to be carried out at
        prevailing market prices from time to time, depending on market
        conditions and other considerations.
      

  
        Electronic Security Services


            Net sales and operating income before goodwill amortization, and
        before the charge arising under SFAS 121, from the Electronic
        Security Services division for the three months ended March 31, 1996
        amounted to $279.7m and $49.4m, respectively, compared to $261.0m
        and $42.4m for the comparable period in 1995.  ADT's total
        annualized service revenues as of March 31, 1996 were approximately
        $719m, representing an annualized growth rate of approximately 11
        percent.

        
        Residential


            The residential marketplace remains very competitive with
        industry wide mass marketing initiatives keeping the per system cost
        to the consumer down.  ADT is meeting the challenge through
        strategic alliances and co-ventures.  ADT security systems are now
        available in approximately 600 RadioShack stores and the ADT/USAA
        home security program is producing good results.  In the first
        quarter, ADT entered into a marketing agreement with HFS, the
        world's largest franchisor of hotels and residential real estate
        brokerage offices.  HFS franchises ERA and Century 21 offices where
        ADT monitored home security services will be offered to homebuyers
        nationwide.

        
            Although significant installation pricing pressures continue to
        dominate the residential marketplace, ADT has achieved an increase
        in average monthly monitoring fees for new customers of
        approximately 14 percent.  This increase will be extended to the
        rest of the customer base as contracts renew, generating enhanced
        growth in annualized service revenues.

        
            During the first quarter, ADT contracted to install and monitor
        60,000 new residential security systems compared with 53,000 systems
        in the fourth quarter of 1995.  ADT's residential customer base is
        now approximately 920,000, of which over 95 percent is located in
        the United States.
   

     
        National Accounts


            Demand for large installations remains strong and growth in
        access control and CCTV business, particularly in the government and
        high end retail sectors, continued to be good.  There was also
        continuation of the trend towards customers purchasing installations
        outright.
   

     
        Core Commercial


            Total revenues from access control and CCTV business showed
        strong growth in the quarter.  The Focus Quantum product, released
        in 1995, is helping fuel growth in the medium size customer market
        with unit sales significantly greater than the Focus 200 product it
        replaced.

        
        Canada


            The reorganization of ADT's business in Canada, where recent
        performance has been disappointing, will take longer to achieve than
        in the United States.  The market outlook, however, other than in
        Quebec, is satisfactory and ADT is increasing its focus on
        integrated systems business particularly for new construction.

        
        United Kingdom and Continental Europe


            ADT is seeing significant growth in CCTV business in the United
        Kingdom and, in the first quarter, was awarded a $3.5m contract by
        Railtrack for the installation of 72 individual CCTV systems on
        station platforms.  In continental Europe, the residential and small
        commercial business experienced satisfactory growth.  An authorized
        dealer program was initiated in France and affinity marketing
        contracts have been signed with two major insurance companies.
   

     
        Vehicle Auction Services


            Net sales and operating income before goodwill amortization, and
        before the charge arising under SFAS 121, from the United States
        Vehicle Auction division for the three months ended March 31, 1996
        amounted to $74.6m and $11.6m, respectively, compared to $69.6m and
        $11.7m for the comparable period in 1995.

        
            These results were achieved despite extreme adverse weather
        conditions early in the quarter, particularly on the East coast.
        Snow removal alone cost approximately $500,000 and the weather
        created difficulties for dealers trying to reach auctions and caused
        a number of sale days to be lost.  However, the overall number of
        vehicles sold at ADT Automotive auctions increased by approximately
        5 per cent compared to the first quarter of 1995. Demand for used
        cars in the quarter was strong and this was reflected in higher
        conversion ratios.  The number of manufacturers' vehicles entered
        for sale was, as expected, lower but the number of vehicles sold
        from the fleet/lease sector was 39 percent higher than in the first
        quarter of 1995.  In addition, ADT Automotive was successful in
        increasing the number of vehicles sold on behalf of import
        manufacturers.

        
            Demand for used cars remains strong and the division is seeing
        an increase in mechanical, clean-up, tire and paint and body work
        for rent- a-car companies and for the new used car superstores.
   

     
            ADT Automotive continues to reinforce its position as an
        industry leader and has recently received a number of auction
        service quality awards from Ford and Chrysler.  Additionally, ADT
        Automotive has just launched its first report on the used car market
        initiating the ADT Automotive Wholesale Used Car Market Index.

       
        SFAS 121 and Earnings per Share


            The Company is required to adopt SFAS 121, the new accounting
        standard relating to accounting for the impairment of long-lived
        assets and related goodwill.  SFAS 121 requires the evaluation of
        any long- lived asset impairment loss at the lowest level of asset
        grouping for which there are identifiable cash flows, instead of on
        a global basis, which is significantly different from previous
        accounting practice.  The effect of the application of SFAS 121 is
        the generation of a non-cash item posted to the income statement
        reflecting the difference arising due to the application of the new
        valuation methodology.  The Company's ability  to generate cash is
        not affected.

        
            Following a detailed review, an aggregate non-cash charge of
        $410.1m relating to the write down of specific assets to their
        estimated fair values was recorded, of which $408.4m related to the
        carrying value of goodwill.  Accordingly, a net loss of $379.1m was
        recorded for the quarter, representing a loss per common share of
        $2.94.  Without this charge, earnings per common share would have
        been $0.23 (1995 earnings per common share - $0.21).  If the
        dispositions of the Company's European vehicle auction and
        electronic article surveillance businesses, which took place in the
        fourth quarter of 1995, had been effective at the beginning of the
        year, 1995 first quarter earnings per share would have been reduced
        by $0.04 to $0.17.  The effective weighted average number of common
        shares outstanding during the first quarter of 1996 was 133.6m (1995
        - 129.8m).

        
            Earnings per share comparisons are also affected by additional
        amortization arising on the acquisition of Alert, whose intangible
        assets are being amortized over an average of 16 years, and by a
        reduction in amortization due to the effect of SFAS 121.  The net
        effect of these is a benefit to quarterly earnings, on a per share
        basis, of approximately $0.01.

        
        Background


            ADT is the largest single provider of electronic security
        services in North America and the second largest provider of
        electronic security services in the United Kingdom, providing
        continuous monitoring of commercial and residential security systems
        to over 1,300,000 customers in North America and Europe.

        
            ADT is also the second largest provider of vehicle auction
        services in the United States, operating a network of 28 vehicle
        auction centers providing a comprehensive range of vehicle
        remarketing services to vehicle dealers and owners and operators of
        vehicle fleets.
   


     
                                  ADT LIMITED
                 Consolidated Statements of Income (unaudited)
        
        Three months ended March 31,                      1996     1995
                                                            $m       $m
        Net sales                                        354.3    373.3
        Cost of sales                                   (184.4)  (200.3)
        Selling, general and administrative expenses    (112.6)  (111.9)
        Charge for the impairment of long-lived assets  (410.1)      --
        Goodwill amortization                             (4.2)    (6.6)
        
        Operating (loss) income                         (357.0)    54.5
        Interest income                                    6.4      3.7
        Interest expense                                 (19.7)   (22.9)
        Other expenses less income                        (0.5)     1.1
        
        (Loss) income before income taxes               (370.8)    36.4
        Income taxes                                      (8.3)    (9.3)
        
        Net (loss) income                               (379.1)    27.1
        Primary (loss) earnings per common share:            $        $
          Without charge arising on adoption
           of SFAS 121                                    0.23     0.21
          Effect of charge arising on adoption
           of SFAS 121                                   (3.17)      --
        
        Net (loss) income per common share               (2.94)    0.21
        
                                  ADT LIMITED
                     Summarized Consolidated Balance Sheets
        
                                                     Unaudited     Audited
                                                         March     December
                                                      31, 1996     31, 1995
                                                            $m           $m
        Assets
        Current assets:
        Cash and cash equivalents                        322.1        341.8
        Accounts receivable - net                        219.5        169.9
        Inventories                                       29.3         31.0
        Prepaid expenses and other current assets         27.5         22.7
        
        Total current assets                             598.4        565.4
        
        Property, plant and equipment - net            1,247.6      1,223.5
        Goodwill - net                                   424.1        823.0
        Long-term investment                              75.5           --
        Investment in and loans to associate                --         88.8
        Other long-term assets                            68.1         74.3
        
        Total assets                                   2,413.7      2,775.0
        
        Liabilities and shareholders' equity
        Current liabilities:
        Short-term debt                                   47.0         38.8
        Accounts payable                                 134.0         92.0
        Other current liabilities                        167.9        189.1
        
        Total current liabilities                        348.9        319.9
        
        Long-term debt                                   919.6        927.8
        Deferred revenue                                 110.4         94.9
        Deferred income taxes                            121.2        116.7
        Other long-term liabilities                      116.4        126.3
        Minority interests                                  --         15.6
        
        Total liabilities                              1,616.5      1,601.2
        
        Convertible redeemable preference shares           4.9          4.9
        
        Shareholders' equity                             792.3      1,168.9
        
        Total liabilities and shareholders' equity     2,413.7      2,775.0
        
                                  ADT LIMITED
                    Business Segment Information (unaudited)
        
        Three months ended March 31,                      1996         1995
                                                            $m           $m
        Electronic Security Services
        
        Net sales:
        North America                                    241.6        211.6
        Europe..                                           38.1         49.4
                                                         279.7        261.0
        
        Operating income:
        North America                                     45.1         39.3
        Europe..                                            4.3          3.1
        
        Operating income before the charge for
           the impairment of long-lived assets
           and goodwill amortization                      49.4         42.4
        Charge for the impairment of long-lived assets  (397.1)          --
        Goodwill amortization                             (3.4)        (4.7)
        
        Operating (loss) income                         (351.1)        37.7
        
        Depreciation                                      37.0         32.2
        Capital expenditures                              63.9         55.3
        
        Vehicle Auction Services
        
        Net sales:
        United States                                     74.6        69.6
        Europe..                                             --        42.7
                                                          74.6       112.3
        
        Operating income:
        United States                                     11.6        11.7
        Europe..                                             --        12.9
        
        Operating income before the charge for
           the impairment of long-lived assets
           and goodwill amortization                      11.6        24.6
        Charge for the impairment of long-lived assets   (13.0)         --
        Goodwill amortization                             (0.8)       (1.9)
        
        Operating (loss) income                           (2.2)       22.7
        
        Depreciation                                       2.9         4.4
        Capital expenditures                               3.5         3.7
        
        ..  The Company's European vehicle auction and electronic article
           surveillance businesses were sold in the fourth quarter of 1995.
        
                                  ADT LIMITED
               Consolidated Statements of Cash Flows (unaudited)
        
        Three months ended March 31,                      1996        1995
                                                            $m          $m
        Cash flows from operating activities
        Net (loss) income                               (379.1)       27.1
        Adjustments to reconcile net (loss) income to net
           cash provided by operating activities:
        Charge for the impairment of long-lived assets   410.1          --
        Depreciation                                      40.0        36.8
        Goodwill amortization                              4.2         6.6
        Interest on ITS Vendor Note                       (2.1)         --
        Liquid Yield Option Notes discount amortization    5.0          --
        Deferred income taxes                              5.8         6.7
        Other                                              0.9        (0.1)
        
        Changes in assets and liabilities                (29.8)       (3.0)
        
        Net cash provided by operating activities         55.0        74.1
        
        Cash flows from investing activities
        Purchase of property, plant and
           equipment - net                               (66.7)      (56.7)
        Acquisition of businesses                        (20.6)       (5.3)
        Disposal of investment in and loans to associate  15.4          --
        Other                                             (2.4)        8.1
        
        Net cash utilized by investing activities        (74.3)      (53.9)
        
        Cash flows from financing activities
        Net receipts (repayments) of short-term debt       8.9        (1.2)
        Repayments of long-term debt                     (15.0)         --
        Purchase of senior subordinated notes               --        (7.5)
        Other                                              6.3         3.3
        
        Net cash provided (utilized)
           by financing activities                         0.2        (5.4)
        
        Effect of currency translation on
           cash and cash equivalents                      (0.6)        0.7
        
        Net (decrease) increase in cash
           and cash equivalents                          (19.7)       15.5
        Cash and cash equivalents at
           beginning of period                           341.8       215.7
        
        Cash and cash equivalents at end of period       322.1       231.2


        CONTACT:  ADT, 407-997-8406; or Johnnie D Johnson & Co., Inc.,
        212-425-4848