NEW YORK -- May 21, 1996 -- The Leslie Fay
Companies Inc. today reported improved financial results for the
first quarter of fiscal 1996 as compared with the same period in
1995.
For the 13 weeks ended March 30, 1996, Leslie Fay reported an
operating profit of $7.4 million, compared with an operating loss of
$0.7 million in the first quarter of 1995. This improvement was the
result of actions Leslie Fay has undertaken to reduce overhead and
other corporate expenses and to strengthen gross profit by reducing
markdowns and production costs. As a result of these actions, the
company's "Selling, warehouse, general and administrative expenses"
decreased to 18.1 percent in the first quarter of 1996 from 20.9
percent a year ago. Likewise, gross profit was 24.5 percent of net
sales in the 1996 first quarter, compared with 20.5 percent in the
first quarter of 1995.
Leslie Fay's net sales in the first quarter of 1996 were $121.2
million, compared with $132.9 million in the same period a year ago.
Contributing to this decrease were the company's decisions in the
second half of 1995 to close its Leslie Fay retail store division,
discontinue certain other labels and redirect the company's selling
efforts away from unprofitable customers.
After reorganization costs, interest and financing costs, and
taxes, Leslie Fay reported net income of $5.9 million, or $0.32 per
share, in the 1996 first quarter, compared with a net loss of $3.4
million, or $0.18 per share, in the same quarter a year ago.
As previously announced, Leslie Fay and the Official Committee
of Unsecured Creditors of Leslie Fay are in the process of jointly
developing an amended plan of reorganization that would provide for
the company to emerge from chapter 11 by separating its Sassco
Fashions business from its core Leslie Fay businesses. If this
proposed plan is consummated, Leslie Fay's current equity will be
extinguished.
John J. Pomerantz, chairman and chief executive officer of
Leslie Fay, said, "We are pleased by the company's financial
improvement in the first quarter of 1996. Consumer response to our
merchandise lines has been very favorable, and I am confident that
our efforts to turnaround the business are on the right track."
Founded in 1947, The Leslie Fay Companies Inc., is one of the
nation's leading manufacturers of women's apparel, including
dresses, suits and sportswear. Its brand names include Leslie Fay,
Albert Nipon, Kasper for A.S.L., Castleberry, Outlander, and HUE.
THE LESLIE FAY COMPANIES, INC. AND SUBSIDIARIES
(Debtor In Possession)
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
Thirteen Weeks Ended
March 30, April 1,
1996 1995
Statement of Operations Data:
Net Sales $121,202 $132,941
Operating income (loss) 7,445 (722)
Income (Loss) before taxes 6,240 (3,123)
Taxes on Income 316 274
Net Income (Loss) 5,924 (3,397)
Net income per Share of Common Stock $0.32 ($0.18)
Weighted Average Common Shares
Outstanding 18,772 18,772
as of as of
March 30, Dec. 30,
1996 1995
Balance Sheet Data:
Total Assets $247,959 $245,980
Total Liabilities 397,953 401,888
Stockholders' Deficit (149,994) (155,908)
PLAINVIEW, N.Y. -- May 21, 1996 -- LogiMetrics
Inc. today reported net losses of $2,377,968 and $3,604,126,
respectively, for the three and nine month periods ended March 31,
1996.
Compared to the same periods last year, the earnings declined
$2,427,503 and $3,711,328, respectively. The losses include a non-
recurring charge in the three month period ended March 31, 1996, of
$1,626,000.
Net sales for the three and nine month periods ended March 31,
1996, were $947,775 and $3,526,633, respectively. Compared to the
corresponding prior periods, net sales declined $1,586,579 (63
percent) and $2,787,545 (44 percent), respectively. The decline in
both periods was a direct result of project delays and inactivity
due to a shortage of cash.
As previously announced, on March 7 the company was
recapitalized and new management brought in to lead a restructuring.
The primary objective of this restructuring is to redirect the
company's development and marketing focus towards the burgeoning,
higher value added, communications market. The quarterly period
ended March 31, 1996, has been significantly impacted by this change
in focus as well as the inactivity and other inefficiencies during
the period preceding the change in control.
In preparing the quarterly report for the quarterly period ended
March 31, 1996, new management discovered there had been an error in
the preparation of the quarterly report for the period ended Dec.
31, 1995. The error had the impact of overstating the recognition
of revenue earned on uncompleted projects during the period by
$1,610,718. After adjusting for the impact of the resulting income
tax benefit, the net reduction in previously reported retained
earnings is $1,281,718. On May 20, 1996, the company filed with the
SEC an amendment to its quarterly report on Form 10-QSB/A to correct
the overstatement of revenue recognition and amending its
consolidated financial statements accordingly.
In the past, LogiMetrics was primarily a supplier of defense
oriented RF test and simulation equipment. Effective on change of
control March 7, the company has been redirecting its focus away
from defense applications and towards emerging new communication
opportunities.
Specifically, the company will aggressively pursue new
transmission equipment requirements arising from government grants,
around the world, of currently unused radio frequency spectrum.
Spectrum "winners" will utilize these grants to deliver video,
voice and data to consumers via new ultra high frequency microwave
"wireless" technologies.
These new technologies, together with the clear spectrum grants
coming, will make possible the swift deployment of a non-cabled
broad band entertainment and communication system at a fraction of
the cost of traditional "wired" systems. New management believes
these opportunities far outweigh the company's past focus and are
complementary with its RF expertise.
Richard K. Laird, the newly appointed chairman and CEO, said:
"LogiMetrics has suffered these last two years from a shortage of
resources and the attendant distractions. With new financing now in
place, the many fine people within the company can now focus on our
plans to sharply redirect the company's product and market focus
while, at the same time, restoring the firm's public vigor and
reputation. These early changes, and many others planned, will
propel the company further into the commercial microwave
communications equipment market and dramatically strengthen it
financially for the internal and external growth we have planned.
The coming worldwide spectrum grants coupled with these new delivery
technologies and LogiMetric's extensive RF experience sets the
company's stage for a very exciting decade ahead."
CONTACT: LogiMetrics Inc., Plainview
Richard K. Laird, 516/349-1700, 516/349-8552 (fax)
TROY, Mich., May 21, 1996 - Floyd Hall, chairman,
president and CEO of Kmart Corporation (NYSE: KM), said today that
he is pleased with the company's progress and that Kmart is taking
actions to become a "fierce competitor" in the growing discount
retail channel.
"I am very pleased to report on the enormous progress we have
made during the past year...and most encouraging, the steps we are
taking to ensure a true renaissance of Kmart Corporation," Hall said
in remarks at the company's annual meeting of shareholders in
Detroit.
Hall noted that the discount channel is growing faster than
virtually any other part of the U.S. retail market and that this
$290 billion channel represents approximately 9 percent of the
market share.
"Annual growth of 6 to 8 percent is expected for the discount
segment, as compared to department stores which likely will grow
only at about 1 percent annually over the next few years," Hall
said. "If Kmart just maintains its share of the growing discount
sector, these sales gains, coupled with our lower expenses, will
mean very respectable profits."
"Excellent results, of course, are predicated on our ability to
leverage the strategic opportunity and distinguish ourselves from
our best competitors," said Hall. "We have a market niche, we fit
it perfectly, and we can be a fierce competitor."
Hall also told the shareholders that he is pleased with the
company's recent accomplishments. In the 12 months since he joined
Kmart, the company has:
Hall also noted that the company recently completed a business
analysis of its in-store pharmacy operations and concluded that they
are a strong strategic fit and growth business for Kmart.
Accordingly, the company has ruled out a sale of these operations.
"We most certainly recognize that it is the responsibility of
this management team and your Board of Directors to improve the
performance of the company and create additional value for all of
our shareholders," Hall said. "That is why we are committed to
making certain that the change underway at Kmart permeates every
aspect of our business and touches every one of our associates with
a new sense of empowerment, accountability and excellence."
At today's annual meeting, shareholders elected six members of
Kmart's Board of Directors: James B. Adamson, Stephen F.
Bollenbach, Floyd Hall, Robert D. Kennedy, William P. Weber and
James O. Welch, Jr.
Due to an opposing proxy solicitation, a final report on the
voting cannot be announced until the independent inspectors of
election tabulate the results. The report of the independent
inspectors giving the final results of the votes will be published
as soon as it is delivered to the Company. Based on the preliminary
votes available at the time of the meeting, it appears that
shareholders approved amendments to Kmart's Directors Stock Plan
relating to stock compensation for directors and to Kmart's 1992
Stock Option Plan. It also appears that stockholders are voting in
accordance with the Board's recommendations on all stockholder
proposals.
Kmart Corporation serves America with 2,159 Kmart and 167
Builders Square retail outlets. In addition to serving all 50
states, Puerto Rico, the U.S. Virgin Islands and Guam, Kmart
operations extend to Canada and, through joint ventures, to Mexico
and Singapore.
CONTACT: Shawn M. Kahle, Vice President, Corporate Affairs,
810-643-1021, or Bob Burton, Director, Investor Relations, 810-643-
1040, both of Kmart
TROY, Mich., May 21, 1996 - Kmart Corporation
(NYSE: KM) today reported a loss from continuing operations of
$38 million, or $0.08 per share, compared with a loss from
continuing operations of $109 million, or $0.24 per share in the
first quarter of 1995, before giving effect to the impact of
discontinued operations and non-recurring activities in 1996 and
1995, respectively.
Kmart's net loss for the first quarter of 1996 was $99 million, or
$0.21 per share. The first quarter of 1996 included a net charge
for discontinued operations of $61 million, or $0.13 per share,
resulting from participation in the recent initial public offering
of Thrifty PayLess Holdings, Inc. and the revaluation of the
Company's remaining holding. This compares to a net loss of
$28 million, or $0.06 per share, in the first quarter of 1995,
which included the positive impact of a pension curtailment gain of
$84 million net of tax, or $0.18 per share, relating to the
freezing of the Kmart defined benefit pension plan.
Total sales in the first quarter were $7.580 billion, an increase
of 1.8% from $7.443 billion for the first quarter of 1995. Sales
levels were adversely affected by lower numbers of operating stores
and colder weather during the period. The gross margin for the
first quarter was 21.9% of sales versus 22.2% last year, reflecting
increased volumes of lower-margin items and consumables in the mix
of sales. The selling, general and administrative (SG&A) expense
ratio for the quarter was 21.9% of sales versus 23.7% for the
comparable 1995 period.
Commenting on first quarter results, Floyd Hall, chairman,
president and chief executive officer, said, "Our overall
performance for the quarter was on plan. Sales in our U.S. Kmart
stores increased 4.5% on a comparable store basis in the first
quarter, despite weather-related softness around the Easter
holiday. Our gross margin rates also felt the effects of cold
weather on higher-margin seasonal goods, together with ongoing
promotional activity in the hardlines area."
"We made major improvements in the area of cost reduction," Hall
said. "Our first quarter SG&A expenses were reduced by
$105 million over last year, reflecting some of the decisions of
1995, predominantly the closing of unproductive stores and the sale
of the auto service business. We expect to see solid progress in
expense control over the remainder of the year."
Kmart Corporation serves America with 2,159 Kmart plus 167 Builders
Square retail outlets and 134 stores internationally.
Kmart Corporation common stock is listed on the New York, Pacific,
and Chicago Stock Exchanges.
KMART CORPORATION
SALES AND OPERATING RESULTS BY BUSINESS
13 WEEKS ENDED MAY 1, 1996 AND APRIL 26, 1995
SALES
% Change
All Comparable
(Millions U.S. $) 5-1-96 4-26-95 Stores Stores (b)
General Merchandise-
United States $ 6,692 $ 6,564 2.0 4.5
International 283 249 13.7 4.5(a)
Total General Merchandise 6,975 6,813 2.4 4.5
Specialty Retail-
Builders Square 605 630 (4.0) (0.8)
Total Kmart $ 7,580 $ 7,443 1.8 2.3
(a) International comparable store sales change is calculated on
sales in the applicable local currency.
(b) Comparable store sales are based on the 13 week accounting
periods ended 5-1-96 and 4-26-95.
OPERATING RESULTS
(Millions U.S. $) 5-1-96 4-26-95 %
Change
General Merchandise-
United States (a) $ 58 $ 86 (32.6)
International (1) (5) (80.0)
Total General Merchandise 57 81 (29.6)
Specialty Retail-
Builders Square 0 (11) 100.0
Total Kmart (a) (b) $ 57 $ 70 (18.6)
(a) 1995 includes $124 million one time gain resulting from pension
curtailment.
(b) The pretax LIFO charge for the 1996 period was $8 million,
compared with $7 million for the 1995 first quarter.
KMART CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
13 Weeks 13 Weeks %
Ended Ended Inc.
(Amounts in millions, except per share 5-1-96 4-26-95 (Dec)
data)
Sales $ 7,580 $ 7,443 1.8
Cost of merchandise sold 5,921 5,788 2.3
Gross profit 1,659 1,655 0.2
Licensee fees and other income 60 58 3.4
Selling, general and administrative 1,662 1,767 (5.9)
expenses
Gain on pension curtailment - (124) -
Operating income 57 70 (18.6)
Interest expense, net 116 109 6.4
Loss from continuing retail operations
before income (59) (39) 51.3
taxes and equity income
Equity in net income of unconsolidated 2 2 -
companies
Income tax benefit (19) (12) 58.3
Net loss from continuing retail (38) (25) 52.0
operations
Loss from discontinued operations, net - (3) -
of income taxes
Loss on disposal of discontinued
operations, net of (61) - -
income taxes
Net loss ($ 99) ($ 28) -
Loss per common share:
Continuing retail operations ($ 0.08) ($ 0.06)
Loss from discontinued operations - ( 0.00)
Loss on disposal of discontinued ( 0.13) -
operations
Net loss ($ 0.21) ($ 0.06)
Weighted average shares outstanding 482.1 458.8
.. The consolidated statement of operations for the prior period has
been restated for discontinued operations.
KMART CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
13 Weeks 13 Weeks
Ended Ended
(Amounts in millions) 5-1-96 4-26-95
Cash Flows From Operating Activities:
Loss from continuing retail operations $(38) $(25)
Adjustments to reconcile net loss to
net cash
provided by (used for) operations:
Depreciation and amortization 159 176
Deferred income taxes 60 80
Undistributed equity income and 62 (8)
dividends received
Decrease in other long-term (52) (313)
liabilities
Changes in certain assets and 157 (187)
liabilities
Net cash provided by (used for)
continuing retail 348 (277)
operations
Discontinued operations 32 130
Net cash provided by (used for) 380 (147)
operating activities
Cash Flows From Investing Activities:
Capital expenditures (51) (123)
Proceeds from asset sales and 177 22
divestitures, net
Other, net (4) 8
Net cash provided by (used for) 122 (93)
investing activities
Cash Flows From Financing Activities:
Proceeds from long-term debt and - 546
notes payable
Reductions in long-term debt and (19) (194)
notes payable
Reduction in capital lease (25) (26)
obligations
Dividends paid - (112)
Other, net 21 6
Net cash provided by (used for) (23) 220
financing activities
Net increase (decrease) in cash 479 (20)
Cash at beginning of year 1,095 353
Cash at end of year $1,574 $333
.. The consolidated cash flow statement for the prior period has
been restated for discontinued operations.
KMART CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in millions) 5-1-96 4-26-95
ASSETS
Current Assets:
Cash (including temporary investments of
$1,082 and $41, respectively) $ 1,574 $ 333
Merchandise inventories 7,356 7,294
Other current assets 1,045 1,468
Net current assets of discontinued 157 340
operations
Total current assets 10,132 9,435
Investments in affiliated retail companies 32 111
Property and equipment - net 5,093 5,970
Other assets and deferred charges 870 262
Net long-term assets of discontinued - 1,099
operations
TOTAL ASSETS $16,127 $16,877
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Long-term debt due within one year $ 248 $ 84
Notes payable - 1,294
Accounts payable - trade 2,756 3,127
Accrued payrolls and other liabilities 1,181 1,076
Taxes other than income taxes 226 330
Income taxes 5 83
Total current liabilities 4,416 5,994
Capital lease obligations 1,601 1,754
Long-term debt and notes payable 3,674 1,957
Other long-term liabilities 1,239 1,217
Shareholders' Equity:
Preferred stock, 10,000,000 shares authorized;
Series C, 790,287 shares authorized; 654,815
shares issued at April 26, 1995 - 131
Common stock, 1,500,000,000 shares authorized;
shares issued 486,576,469, and 464,770,564,
respectively 486 465
Capital in excess of par value 1,610 1,508
Retained earnings 3,227 3,989
Treasury shares and restricted stock (59) (86)
Foreign currency translation adjustment (67) (52)
Total shareholders' equity 5,197 5,955
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $16,127 $16,877
.. The consolidated balance sheet for the prior period has been
restated for discontinued operations.
CHICAGO, May 21, 1996 - Duff & Phelps Credit Rating Co.
(DCR) has downgraded TransAmerican Refining Corp.'s (TARC) first
mortgage securities to "CCC" (Triple-C) from "B-" (Single-B-Minus)
Rating Watch - Down. The company's Rating Watch status has also
been removed. The action affects approximately $295 million of
debt.
The rating change reflects DCR's concern about the ability of
TARC to raise the required funds necessary to complete the upgrade
and reactivation of its petroleum refinery. Total cost estimates
needed to complete Phases I and II of its capital improvement
program have increased from an original amount of $434 million to an
updated estimate of $560 million. Of this amount, the company has
incurred expenditures of approximately $179 million, funded from the
initial financing of the project as well as proceeds from the sale
of TransTexas Gas Corporation stock. In March 1996, TARC sold 4.55
million shares of TransTexas Gas common stock for net proceeds of
$26.6 million, which were deposited in the company's cash collateral
account. The cash collateral account had a balance of $27 million
at March 31, 1996.
Considering the higher cost estimates and the March sale of
TransTexas stock, additional funding of approximately $354 million
will be needed to complete the project, of which $220 million is
required for the completion of Phase I. Under the bond indenture,
the failure of the company to complete and test Phase I by February
15, 1997, would constitute an event of default at such date. The
company is currently considering financing proposals that include
the sale of additional TransTexas stock held by TARC, equity
investments in the company by third parties and the sale of common
stock of the company. TransAmerican Natural Gas Corp., TARC's
parent, is also reviewing financing plans that would involve
proceeds from the sale of TransTexas assets as well as proceeds from
various other asset-based financing alternatives.
The company anticipates completing this financing on a timely
basis; however, until such additional funds are secured, we believe
the above- mentioned rating to be a better reflection of TARC's
current financial condition. DCR will review this situation again
as TARC's financing alternatives become more defined.
CONTACT: Stephen J. Flaherty, 312-368-3141, or Dennis P. Coleman,
CFA, 312-368-3147, both of Duff & Phelps Credit Rating Co.