NEW CANAAN, Conn., July 16, 1996 - Smith Corona
Corporation reported today that it has received approval from the
U.S. Bankruptcy Court on three significant motions: the company's
Disclosure Statement for the second amended Plan of Reorganization;
the sale of Smith Corona labeler machine manufacturing capability
and technology to Kroy, Inc.; and the extension of exclusivity to
the earlier of September 27, 1996 or confirmation of a Plan of
Reorganization.
The approval of the Disclosure Statement paves the way for
Smith Corona to commence the solicitation of votes for its Plan of
Reorganization. Plan materials and ballots are expected to begin
mailing on or about August 2; the deadline for ballots is August 30.
All impaired creditor classes will be entitled to vote on the Plan.
A September 9 date has been set for the hearing to confirm the Plan.
Ronald Stengel, president and chief executive officer of Smith
Corona, acknowledged that "We are very pleased to offer a consensual
Plan which the members of our unsecured creditors' committee have
approved. With their support, we anticipate that the Plan will be
confirmed as early as mid-September, and Smith Corona will emerge
from Chapter 11 as a smaller but stronger, reorganized company.
"We have made great strides in our 12 months under Chapter 11.
Manufacturing has been consolidated, excess assets have been sold
successfully, liquidity improved, bank loans fully repaid, and
operating expenses reduced to fit current sales activity. The net
results of these actions is the availability of more than $10
million to the estate to repay creditors, and a significantly
stronger balance sheet."
Under the terms of the Plan, holders of secured claims will
receive payment in full in cash or any other such treatment as may
be agreed by the creditor and the reorganized company. Holders of
general, allowed unsecured claims, estimated to total approximately
$25,700,000, will receive pro rata cash distributions from a pool of
$10,280,000, as well as 85 percent of the common stock in the
reorganized company, without taking into account the effect of
warrants. Unsecured "convenience" claims of $1,500 or less will
receive cash payments equal to 60 percent of the allowed claim.
The amended Plan also calls for current equity holders to
receive warrants to purchase new common stock in the reorganized
company. The Plan provides for one warrant for every share of
common stock outstanding as of August 15, 1996. Warrants may be
exercised at any time between six months and two years following
the effective date of the Plan. The exercise price of the warrants
will be determined, at the earliest, when the company's Plan is
confirmed; the price will take into account the cash payouts on
allowed claims, interest and expenses incurred by the class of
general unsecured creditors
CONTACT: Rivian Bell of Sitrick And Company, Inc., 310-788-2850
(24 hours), or 800-686-1910 (pager)
SARASOTA, Fla., July 16, 1996 - Elcotel, Inc. (Nasdaq:
ECTL), a company that develops, manufactures and markets smart
payphone products and software for both domestic and international
telephone networks, announced results of operations for the fourth
fiscal quarter and twelve months ended March 31, 1996.
For the fiscal year ended March 31, 1996, the Company's net
revenues totaled: $21,462,000, compared with $25,090,000 the
previous fiscal year. Net loss was $1,291,000, or ($0.16) per share
versus a net profit of $3,524,000, or $0.45 per share reported for
fiscal year 1995. Fiscal 1996 after-tax results reflect a write-
down of $1,106,000 for the proposed settlement of the $3,152,000
debtor obligation of Amtel Communications under a Chapter 11 plan
for reorganization.
C. Shelton James, Chief Executive Officer of Elcotel, indicated,
"The fourth quarter net revenues totaling $5,089,000, compared to
$6,134,000 a year earlier, continued to reflect lower-than-expected
sales and shipments to our independent owner/operator customers.
Fourth quarter results reflect a net loss of $1,415,000, or ($0.18)
per share compared with a net profit of $1,366,000, or $0.17 per
share for the previous period. The fourth quarter results reflect
the after-tax effects of the $1,106,000 Amtel Communications write-
down in the proposed Chapter 11 reorganization plan. Adverse
weather conditions in the Northeast delayed installations and was
generally disruptive to our independent payphone customers'
operations. We believe our customers have been involved in
extensive 'grooming' of their operations and satisfying growth
through the redeployment of existing phones. This has been an
industry-wide process in fiscal year 1996 and we believe is a major
factor in the sales shortfall which we experienced in the previous
six months in our domestic markets.
International shipments in the fourth quarter were far short of
our expectations due to delays in development of programs in Chile,
Philippines, Mexico, Canada and Morocco. Each of these programs
continue to develop and represent significant opportunities for
future business. In the fourth quarter, shipments to international
customers produced revenues of $553,000 and total fiscal year
international sales of $1,536,000. While these results are lower
than anticipated, the Company continues to be optimistic about the
potential the international markets represent."
Mr. James continued, "As we indicated previously, fiscal year
1996 was a year of adjustment and transition, for both Elcotel and
the industry. Elcotel continues to be the dominant supplier of
smart payphones to the independent payphone operators in the U.S.,
not withstanding the lower than anticipated sales in fiscal year
1996, and has increased its market share in the independent payphone
market to over 45%. The Company initiated new marketing efforts and
related development programs to address a rapidly changing market in
the U.S. regulated telephone markets. The Telecommunications Reform
Act of 1996 signed in February, 1996 contains a number of provisions
which will benefit the independent payphone operator and require the
telephone companies to organize and manage their payphone operations
on 'an arms length basis' to ensure a more equitable and competitive
market. These provisions have stimulated economic expansion in the
industry and are responsible for a more optimistic outlook over the
next few years. Initial results for the period ending June 30, 1996
tend to confirm this with sales of approximately $5,700,000, an
increase of 12% over the fourth quarter."
Mr. James concluded, "On the international front, we have
expanded our development capability in support of international
programs and have added to our product line with improved prepaid
card phones and systems. We continue to see the international
markets as holding significantly more growth opportunity and we are
encouraged by the performance of our technology as we enter these
markets. Our alliance with Lucent Technologies continues to show
promise and present new opportunities with current technology as
well as the potential for a cooperatively developed technology for
emerging applications. We expect to see substantial growth in the
revenues from international contracts through these efforts in
fiscal year 1997 and beyond."
Operating Results
(Unaudited)
(In thousands, except per share amount)
Fourth Quarter Ended Twelve Months Ended
March 31 March 31
1996 1995 1996 1995
Net Revenues $ 5,089 $ 6,134 $21,462 $25,090
Net Profit/(Loss)
before Inc. Taxes ($ 2,343) $ 434 ($ 2,152) $ 3,050
Income Tax Provision/
(Benefit) ($ 928) ($ 932) ($ 861) ($ 474)
Net Profit/(Loss) ($ 1,415) $ 1,366 ($ 1,291) $ 3,524
Net Profit/(Loss) per
common share ($ 0.18) $ 0.17 ($ 0.16) $0.45
Weighted Avg. number
of common and common
equivalent shares
outstanding 7,941 8,054 7,830 7,847
CONTACT: Tracey L. Gray, President & COO of Elcotel, Inc.,
941-758-0389, or Tom Ennis of Cameron Associates, 212-644-9560