NEW YORK, NY -- Aug. 16, 1996 -- The Leslie Fay
Companies, Inc. today reported improved financial results for the
second quarter and first half of fiscal 1996 as compared with the
same periods in 1995.
For the 13 weeks ended June 29, 1996, Leslie Fay reported an
operating profit of $0.5 million, compared with an operating loss of
$5.2 million in the second quarter of 1995. This improvement
resulted from the Company's decisions to change its business
strategy for its Dress and Sportswear divisions to focus on higher
margin business, close its domestic production facility, control
production levels, and discontinue low-margin labels. These and
other actions led to an improvement in Leslie Fay's gross profit
from 20.6 percent of net sales in the second quarter of 1995 to 23.7
percent of net sales in the 1996 second quarter. The Company's
"Selling, warehouse, general and administrative expenses" decreased
to 22.7 percent in the second quarter of 1996 from 25.9 percent in
the same period a year ago.
Leslie Fay's net sales in the second quarter of 1996 were $83.1
million, compared with $92.6 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. On a comparable basis,
after excluding the effect of these closings and new businesses, the
remaining businesses had a net sales increase of 1.5 percent in the
second quarter of 1996 as compared to the second quarter of 1995.
After reorganization costs, interest and financing costs, and
taxes, Leslie Fay reported net income of $0.1 million, or $0.01 per
share, in the 1996 second quarter, compared with a net loss of $12.1
million, or $0.64 per share, in the same quarter a year ago.
For the 26 weeks ended June 19, 1996, Leslie Fay reported
operating income of $8.0 million on sales of $204.1 million,
compared with an operating loss of $5.9 million on sales of $224.6
million in the same period a year ago. The Company reported net
income in the 1996 first half of $6.0 million, or $0.32 per share,
compared with a net loss of $15.5 million, or $0.83 per share, in
the first six months of 1995.
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.
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)
Twenty-Six Weeks Ended Thirteen Weeks Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
Statement of
Operations Data:
Net sales $201,143 $224,600 $83,094 $92,598
Operating
income (loss) 7,983 (5,924) 538 (5,202)
Income (loss)
before taxes 6,662 (14,960) 422 (11,837)
Taxes on income 638 542 323 268
Net income (loss) 6,024 (15,502) 99 (12,105)
Net income per
share of common
stock $0.32 ($0.83) $0.01 ($0.64)
Weighted average
common shares
outstanding 18,772 18,772 18,772 18,772
Balance Sheet Data: as of as of
June 29, Dec. 30,
1996 1995
Total assets $233,515 $245,980
Total liabilities 383,601 401,888
Stockholders' deficit (150,086) (155,908)
CONTACT: James Fingeroth
Michael Freitag
Kekst and Company
(212) 593-2655
ATLANTIC CITY, NJ -- Aug. 16, 1996 -- American Gaming &
Entertainment Ltd. (OTC Bulletin Board:"AGEL"; the "Company")
reported as previously disclosed in its Form 10-QSB filed with the
Securities and Exchange Commission, that net loss for common
stockholders for the three months ended June 30, 1996 was
approximately $2,410,000 or (19 cents) per share as compared to
$9,268,000 or (75 cents) per share for the comparable period in
1995.
Such decrease in net loss for common stockholders was primarily
attributable to (i) an increase in revenues of $986,000 related to
the charter of the Gold Coast Casino barge to President Mississippi
Charter Corp. and (ii) a decrease in expenses of (a) approximately
$260,000 in compensation expenses due to the resignation or
termination effective Dec. 15, 1995 of all but five of the company's
non-keno employees, (b) approximately $361,000 in personnel, travel
& entertainment and consulting expenses associated with the
company's change in business direction from the development of
gaming projects to the management of its equity interests in gaming
projects, (c) $425,000 in lease expense for a riverboat and barge
for which all future lease expenses were fully expensed in 1995, (d)
approximately $464,000 in depreciation and amortization expense, (e)
approximately $2,250,000 in operating costs and expenses related to
the writedown of the company's investments in the S.S. Aquarama and
a former railroad station in Mobile, Ala. in the three months ended
June 30, 1995 and (f) approximately $2,863,000 in equity in losses
related to the operations of the company's two Mississippi
subsidiaries currently in bankruptcy, for which no such operating
losses were recorded in the three months ended June 30, 1996.
All of the foregoing were partially offset by (i) decreases of
approximately $392,000 and $116,000 attributable to keno revenues
and revenues from a video lottery management contract, respectively,
(ii) the write-off as of June 30, 1996 of a receivable in the amount
of approximately $221,000 due from the company's major stockholder
related to unpaid lease and tax obligations of the company which
were assumed by such stockholder and (iii) an accrual of $250,000
during the three months ended June 30, 1996 as management's estimate
of additional settlement liabilities related to such bankruptcies
($3 million for such liabilities was accrued in the fourth quarter
of 1995).
Net loss for common stockholders for the six months ended June
30, 1996 was approximately $3,107,000 or (25 cents) per share as
compared to $14,468,000 or ($1.17) per share for the comparable
period in 1995.
Such decrease in net loss for common stockholders was primarily
attributable to (i) an increase in revenues of $1,972,000 related to
the charter of the Gold Coast Casino barge to President Mississippi
Charter Corp., (ii) a net gain of $948,000 on the sale of the
company's keno assets and (iii) a decrease in expenses of (a)
approximately $603,000 in compensation expenses due to the
resignation or termination effective Dec. 15, 1995 of all but five
of the company's non-keno employees, (b) approximately $855,000 in
personnel, travel & entertainment, legal and consulting expenses
associated with the company's change in business direction from the
development of gaming projects to the management of its equity
interest in gaming projects, (c) $425,000 in lease expense for a
riverboat and barge for which all future lease expenses were fully
expensed in 1995, (d) approximately $622,000 in depreciation and
amortization expense, (e) approximately $2,250,000 in operating
costs and expenses related to the writedown of the company's
investments in the S.S. Aquarama and a former railroad station in
Mobile, Ala. in the six months ended June 30, 1995, and (f)
approximately $4,407,000 in equity in losses related to the
operations of the company's two Mississippi subsidiaries currently
in bankruptcy, for which no such operating losses were recorded in
the six months ended June 30, 1996.
All of the forgoing were partially offset by (i) decreases of
approximately $334,000 and $204,000 attributable to keno revenues
and revenues from a video lottery management contract, respectively,
(b) the write-off as of June 30, 1996 of a receivable in the amount
of approximately $221,000 due from the company's major stockholder
related to unpaid lease and tax obligations of the company which
were assumed by such stockholder, (c) an accrual of $250,000 during
the three months ended June 30, 1996 as management's estimate of
additional settlement liabilities related to such bankruptcies ($3
million for such liabilities was accrued in the fourth quarter of
1995), and (d) an increase in interest expense of $249,000
attributable to an increase in average debt outstanding due to the
company's major stockholder.
The company also announced that J. Douglas Wellington, the
company's interim president and chief operating officer, was elected
as president and chief operating officer.
The company's common stock is traded on the OTC Bulletin Board
under the symbol "AGEL".
CONTACT: American Gaming & Entertainment Ltd.
J. Douglas Wellington, 609/272-9099 or Fax: 609/272-7772
LAS VEGAS, Nev. -- Aug. 15, 1996 -- Riviera Holdings
Corporation (AMEX: RIV) today announced that it has assumed
management of the Four Queens Hotel and Casino located in downtown
Las Vegas as of August 12.
The announcement came after a federal bankruptcy judge confirmed
the plan of reorganization of Elsinore Corporation, owner of the
Four Queens. Under an interim agreement, Riviera's wholly-owned
subsidiary, Riviera Gaming Management (RGM), will manage the Four
Queens for a monthly fee of $83,333. RGM specializes in rescuing
financially troubled hotel and casino operations.
The interim agreement will be converted to a 40-month management
agreement on the Effective Date which RGM expects to occur during
the fourth quarter of 1996. The management agreement provides for
management fees equal to 25 percent of the increase in earnings
before interest, taxes, depreciation and amortization (EBITDA), with
a minimum of $1 million per year. RGM also will be issued warrants
to acquire 20 percent of the new entity. The Effective Date of the
plan of reorganization is contingent upon the licensing of the new
board of directors of the new Elsinore Corporation/Four Queens Inc.
entity and RGM and its director(s) and officer(s) and other factors.
"We are excited about our agreement to manage the Four Queens,"
said Riviera Chairman and Chief Executive Officer Bill Westerman.
"The Four Queens is centrally located in the revitalized Fremont
Street area of downtown Las Vegas. Its superior location and
popularity are a solid foundation our management team of turnaround
experts can build upon."
The Four Queens consists of a 700-room hotel and 33,000 square
foot gaming facility. It is located in Las Vegas' Fremont Street
Experience, a $70 million renovation effort that attracts visitors
to gaming in downtown Las Vegas. A nightly laser and music show
complements efforts by casinos to increase downtown foot traffic.
Mr. Westerman also announced that Martin Gross, Riviera's Vice
President of Hotel Sales is serving as General Manager of the Four
Queens during the interim period. Also, Gina Contner, Riviera's
Financial Controller, has assumed the position of Director of
Finance for the Four Queens and Raquel Rodriguez, Riviera's Director
of Special Events has assumed the position of Director of Marketing
at the Four Queens. Mr. Westerman stated, "These experienced
executives, working together with the remaining management of the
Four Queens, will form a strong team geared toward accelerating
growth at the Four Queens."
RGM is made up of the same management team that successfully
turned around the Riviera Hotel and Casino. RGM is actively
pursuing opportunities in gaming jurisdictions to return distressed
hotel and casino properties to profitability.
In addition to operating the Four Queens, Riviera Holdings Corp.
operates the Riviera Hotel and Casino, located on the north end of
the Las Vegas Strip. Riviera is traded on the American Stock
Exchange under the symbol RIV.
CONTACT: Duane Krohn, Treasurer and CFO, 702-794-9527, or John Wishon,
Secretary and General Counsel, 702-794-9504, both of Riviera Holdings
Corporation; or analysts, Bonnie McBride, or media, Jerry Miller of
FRB San Francisco, 415-986-1591, or general info, Dick Strasbaugh of FRB New
York, 212-661-8030, all for Riviera Holdings
VERNON, Calif. -- Aug. 15, 1996 -- Seven-Up/RC Bottling
Company of Southern California, Inc. announced today that it has
consummated the Company's First Amended Joint Plan of
Reorganization, dated June 19, 1996 (the "Plan"). As previously
announced, the Plan was confirmed by the Bankruptcy Court on August
2, 1996, and had been accepted by holders of in excess of 99.96% of
the total dollar amount of the Company's 11.5% Senior Secured Notes
due 1999 ($140 million principal amount) (the "Noteholders") who
voted on the Plan. According to the Company, distributions under
the Plan will begin in the next few days.
Under the Plan approved by the Bankruptcy Court, Noteholders
receive approximately 98% of the Company's equity and $55 million
- representing the net proceeds from the sale of the Company's
Puerto Rico subsidiary. An application for the listing of the
Company's common stock on Nasdaq has been filed. The Plan also
provides that the Company's trade creditors are to be paid in full
and that all relationships with franchisors, distributors and
licensors will continue unaffected.
Bart Brodkin, the CEO of the Company, commented that "our
restructuring has eliminated over $140,000,000 of debt obligations,
which combined with significant cost reductions and improved margins
has resulted in a significant increase in our cash flow. Our
balance sheet is strong with virtually no debt, other than a working
capital facility of $35,000,000 which will provide liquidity well in
excess of our projected needs. The Company has emerged from Chapter
11 as a strong, disciplined and profitable bottling company."
Also, the Company announced that a new board of directors had
been constituted, and will consist of Barton S. Brodkin, the
Company's CEO and President prior to its bankruptcy filing; John R.
Attwood, former Chairman of the Coca-Cola Bottling Company of Los
Angeles; William C. Langley, former Executive Vice President of
Chemical Banking Corporation (Chase Manhattan Corporation); M. L.
Lowenkron, former President and CEO of G. Heileman Brewing Co., Inc.
and former CEO of A&W Brands, Inc.; and Sydney lrmas, former
Chairman of Softview, Inc. and former director of Price Phister,
Inc.
Seven-Up/RC Bottling Company of Southern California, Inc. is one
of the largest independent manufacturers and distributors of
beverage products in the United States.
CONTACT: Edward Whiting of Whitman Heffernan Rhein & Co., Inc., for
Seven-Up/RC Bottling Company of Southern California, Inc., 213-267-
6233
PURCHASE, NY -- Aug. 15, 1996 -- Spectrum Information
Technologies, Inc. (OTC Bulletin Board: SPCLQ) today announced that
Judge Conrad B. Duberstein of the U.S. Bankruptcy Court of the
Eastern District of New York has confirmed Spectrum's proposed plan
of reorganization in its pending chapter 11 proceeding. The plan's
effective date and distributions to Spectrum's creditors remain
contingent upon final approval by the United States District Court
of the Eastern District of New York of the previously announced
settlement framework to the $676 million securities class action
pending against Spectrum. A hearing to approve the class action
settlement has been tentatively scheduled for November 15, 1996.
If the District Court approves the class action settlement (as
described in Spectrum's most recent Quarterly Report on Form 10-Q
for the period ended June 30, 1996), which was reached as a result
of negotiations supervised by the court, Spectrum will emerge from
chapter 11 and leave behind many of the issues that contributed to
the new management's decision to file for bankruptcy in January
1995. Most significantly, Spectrum will have settled over $700
million in claims, including the class action lawsuit that was filed
against the Company in 1993. The settlement is designed to preserve
Spectrum's cash for use in developing its business.
New Strategic Direction for Reorganized Spectrum
Spectrum holds a portfolio of basic patents related to wireless
transmission of data over cellular networks. Through the
reorganization process, Spectrum has refocused its business on this
core competency.
Since January 1995, Spectrum's new management, led by its
Chairman and CEO, Donald J. Amoruso, and an entirely new Board of
Directors, closed unprofitable operations and sold assets not
integral to Spectrum's new vision of becoming a leader in mobile
communications software. The Company's strategy is to develop value-
added mobile communications software products.
Spectrum's new management team has been actively redirecting the
Company from an intellectual property and licensing organization
with low royalty income to becoming a provider of software-based
wireless and mobile communications products. The Company is in the
process of converting existing license relationships into alliances
that may serve as channels for distribution of the Company's
software products. Spectrum this year announced that it has entered
an agreement with U.S. Robotics that provides for a framework for a
strategic relationship that can be beneficial to Spectrum's business
plan and a cross-license agreement with Motorola, Inc. for use of
specified intellectual property.
New Technical Leadership
Spectrum has hired leaders in software and communications to
form the core of a creative technical team that will help implement
its vision. The newest members of Spectrum's technical management
are:
100 Percent Recovery for Unsecured Creditors; Shareholders Expected
to Retain Approximately 45% Equity Ownership
Spectrum's plan of reorganization as confirmed by the Bankruptcy
Court will provide all general unsecured creditors with 100 percent
of the value of their claims plus 6 percent annual interest from the
date of the bankruptcy filing, on the effective date of the plan.
It also will settle all of the class action lawsuits filed against
the Company by the payment of $250,000 cash and the delivery of
approximately 45 percent of the equity ownership in the reorganized
company to a trustee to be distributed to the members of the class.
The settlement is subject to approval by the District Court.
Although existing Spectrum stockholders will be substantially
diluted, under the terms of the plan current shareholders should
obtain the majority of the 45 percent equity ownership in the
reorganized company set aside for such shareholders and certain
creditors. This should hold true based on Spectrum's current market
value even after the issuance of $300,000 worth of stock to the
liquidating trustee of Spectrum's former Computer Bay subsidiary in
connection with the recent settlement of the trustee's multi-million
dollar claim against Spectrum. Ten percent of the ownership of the
reorganized entity is set aside as incentive compensation for
Spectrum's management and employees.
"We are pleased that Spectrum's existing shareholders will
retain a significant portion of the equity ownership in the
reorganized company, which will allow them to participate in any
future growth and success that Spectrum is able to achieve," Mr.
Amoruso said. "While many of Spectrum's shareholders have
experienced a severe diminution of their initial investment, many
equity holders typically lose their entire investment when a company
enters into chapter 11 proceedings."
"Spectrum is continuing to meet important milestones as we build
for the future," Mr. Amoruso said. "Many people thought that the
Spectrum saga had only 11 chapters, but today Spectrum is starting a
new chapter with a new focus. The road ahead is not without risk,
but we are excited about the opportunity to develop Spectrum."
Spectrum stock is currently traded in the NASD OTC Bulletin
Board. After the effective date of Spectrum's plan of
reorganization, the Company will endeavor to relist its equity on a
major exchange after it is able to meet applicable listing
requirements.
CONTACT: Media Only: Michael Freitag of Kekst and Company,
212-593-2655; or Investors: Investor Relations, Spectrum
Information Technologies, Inc., 914-251-1800, ext. 182
ATLANTA, GA -- Aug. 14, 1996 -- Metromedia
International Group Inc. (MIG) (ASE:MMG) Wednesday reported
financial results for the second quarter of 1996.
Revenues for the three months ended June 30, 1996, were $38.0
million, compared with revenues of $40.8 million for the same period
last year. The company reported an operating loss for the quarter
of $10.1 million, compared with an operating loss of $7.5 million
for the second quarter of 1995.
The net loss for the quarter was $18.9 million, or a loss of
$.44 per share, compared with a loss of $16.7 million, or $.80 per
share, for the same period last year.
Revenues for the six months ended June 30, 1996, were $68.8
million, compared with revenues of $78.4 million for the same period
last year. The company reported an operating loss for the first six
months of 1996 of $20.1 million, compared with an operating loss of
$18.2 million for the same period of 1995.
The net loss for the six months ended June 30, 1996, was $38.0
million, or a loss of $.89 per share, compared with a loss of $37.1
million, or a loss of $1.77 per share, for the first six months of
1995.
Commenting on the second quarter results, John D. Phillips,
president and chief executive officer, said: "The results for the
second quarter show continued growth in overall subscribers for our
Communications Group, both for our consolidated and unconsolidated
Joint Ventures.
"Wireless cable television subscribers grew to 53,706 in the
aggregate, a 101% increase over the past year. Paging subscribers
increased to 29,107 in the aggregate, a 354% increase over the past
year.
"The results of the Entertainment Group's activities demonstrate
that our distribution engine is moving forward with the recent
theatrical release of Goldwyn's `I Shot Andy Warhol' and Orion's
`Original Gangstas' along with LIVE Entertainment's `The Arrival'
and `The Substitute.' In addition, our Orion Pictures and Goldwyn
Entertainment subsidiaries have commenced preproduction on a number
of motion picture projects."
On July 2, 1996, the company successfully completed the
following transactions:
A public offering of 18.4 million shares of common stock
generating gross proceeds of $202.4 million. Proceeds will
be used to finance the build-out of MIG's Communications
Group's operations in Eastern Europe and other emerging
markets and were used, in part, to pay existing debt.
The acquisition of The Samuel Goldwyn Company and Motion
Picture Corp. of America. The acquisition of Goldwyn
expands the Entertainment Group by adding a valuable library
of more than 850 films and television titles including
numerous Hollywood classics and recently acclaimed films,
and what MIG believes is the leading specialized theater
circuit in the United States with 140 screens.
A $300.0 million secured credit facility: to refinance the
indebtedness of Orion Pictures Corp. and Goldwyn's
existing indebtedness, to finance the production,
acquisition and distribution of entertainment products and
for general corporate purposes.
Metromedia International Group is a global entertainment, media
and communications company whose primary operations are focused on
two business groups:
The Entertainment Group, through Orion Pictures Corp., which
is engaged primarily in the development, production, acquisition
and worldwide distribution of motion pictures, television
programming and prerecorded video cassettes, and
The Communications Group, operated through Metromedia
International Telecommunications, Inc., which owns interest
in, and participates along with local partners in the
management of joint ventures which operate wireless cable
television systems, paging systems, an international toll
call service, a Trunked Mobile Radio service and radio
stations in Eastern Europe and the former Soviet Republics.
METROMEDIA INTERNATIONAL GROUP INC.
Consolidated Condensed Statements of Operations
(in thousands, except per-share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues $ 37,988 $ 40,755 $ 68,796 $
78,433
Costs and expenses:
Costs of rentals and
operating expenses 29,745 35,144 54,834
72,012
Selling, general and
administrative 16,338 12,578 30,404
23,552
Depreciation and
amortization 1,967 493 3,690
1,021
Operating loss (10,062) ( 7,460) (20,132)
(18,152)
Interest expense, including
amortization of debt discount 7,676 8,234 15,955
17,170
Interest income 1,156 881 2,401
1,698
Interest expense, net 6,520 7,353 13,554 15,472
Chapter 11 reorganization items 83 168 137
935
Loss before provision for
income taxes and equity in
losses of joint ventures (16,665) (14,981) (33,823)
(34,559)
Provision for income taxes 200 100 400
300
Equity in losses of Joint
Ventures 1,985 1,633 3,768
2,221
Net loss $(18,850) $(16,714) $(37,991)
$(37,080)
Primary loss per common share $ (0.44) $ (0.80) $ (0.89) $
(1.77)
METROMEDIA INTERNATIONAL GROUP INC.
Business Segment Information
(in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
Entertainment Group:
Revenues $ 35,212 $ 38,550 $ 62,853 $ 75,117
Cost of rentals and
operating expenses (29,732) (35,144) (54,834) (72,012)
Selling, general &
administrative (4,576) (5,614) (9,488) (10,986)
Depreciation & amortization (329) (154) (596) (296)
Operating income (loss) 575 (2,362) (2,065) (8,177)
Communications Group:
Revenues 2,775 2,205 5,939 3,316
Cost of rentals and
operating expenses (13) -- -- --
Selling, general &
administrative (8,969) (6,964) (16,494) (12,566)
Depreciation & amortization (1,634) (339) (3,083) (725)
Operating loss (7,841) (5,098) (13,638) (9,975)
Corporate Headquarters:
Revenues 1 -- 4 --
Cost of rentals and
operating expenses -- -- -- --
Selling, general &
administrative (2,793) -- (4,422) --
Depreciation & amortization (4) -- (11) --
Operating loss (2,796) -- (4,429) --
Consolidated:
Revenues 37,988 40,755 68,796 78,433
Cost of rentals and
operating expenses (29,745) (35,144) (54,834) (72,012)
Selling, general &
administrative (16,338) (12,578) (30,404) (23,552)
Depreciation & amortization (1,967) (493) (3,690) (1,021)
Operating loss (10,062) (7,460) (20,132) (18,152)
Interest expense (7,676) (8,234) (15,955) (17,170)
Interest income 1,156 881 2,401 1,698
Chapter 11 losses (83) (168) (137) (935)
Provision for income taxes (200) (100) (400) (300)
Equity in losses of joint
ventures (1,985) (1,633) (3,768) (2,221)
Net loss $(18,850) $(16,714) $(37,991) $(37,080)
KINGSTON, TN -- Aug. 16, 1996 -- Bayou Steel of
Tennessee, the new owner of the bankrupt Tennessee Valley Steel
Corp., has agreed to recognize the United Steelworkers of America
(USWA) as the exclusive bargaining agent for employees at its
Harriman, TN, plant, ending a National Labor Relations Board (NLRB)
hearing at which it was accused of numerous labor law violations.
The agreement also requires the company to:
The USWA brought unfair labor practices to the NLRB, which
issued a complaint and scheduled the trial that was underway when
the settlement was reached. The NLRB will retain jurisdiction while
negotiations proceed.
"We're gratified the company recognized its responsibility to
the Harriman workers and reached this agreement," said Richard
Davis, USWA Vice-President for Administration. "The company should
likewise recognize its responsibility to its employees in LaPlace,
sit down at the bargaining table and negotiate a contract that is
fair to both sides."
Some 300 members of USWA Local 9121 employed in LaPlace were
forced to strike on March 21, 1993, because of the company's
unwillingness to bargain in good faith.
The NLRB in New Orleans has issued a complaint against Bayou in
that case, accusing the company of 12 unfair labor practices and
violating an agreement that would have settled previous charges
brought by the union. A hearing is scheduled for September 23 in
New Orleans. Among other things, the NLRB said the strike was
caused and prolonged by Bayou's unfair labor practices.
CONTACT: USWA Communications Department, 412-562-2442
CAROL STREAM, Ill -- Aug. 16, 1996 -- Ben Franklin Retail
Stores, Inc. (Nasdaq: BFRS) announced today that David A. Brainard
has tendered his resignation as Senior Vice President and Chief
Financial Officer to pursue other business interests.
In order to ensure an orderly transition, the Company will
utilize the services of Price Waterhouse, LLP, to assist the Company
during the Company's Chapter 11 Bankruptcy process until a successor
can be named.
CONTACT: Investor Relations of Ben Franklin Retail Stores, Inc.,
708-462-6100
CAROL STREAM, IL -- Aug. 16, 1996 -- Ben Franklin Retail
Stores, Inc. (Nasdaq: BFRS) today reported a net loss of $11.4
million, or $2.08 per share, for the first quarter of fiscal 1997 as
compared with a net loss of $1.5 million or $.28 per share for the
same period of the prior year.
Ben Franklin had announced on July 26, 1996, that the Company
had filed a petition for reorganization under Chapter 11 of the
United States Bankruptcy Code. At the time the Company said it
planned to sell or close its 33 Company-owned craft superstores and
focus on its core franchising and wholesaling business.
Net sales for the fiscal 1997 first quarter (three months ended
June 30, 1996) decreased by 48.0% to $46.5 million as compared with
$89.3 million in the same period of the prior year. The decrease
was primarily due to the Company's shortage of liquidity which
resulted in lower service levels and, consequently, lower sales
volume in the Company's wholesale business and retail business.
Cost of sales, buying, and occupancy expenses decreased by 43.7%
to $45.2 million as compared with $80.3 million in the same period
of the prior year. As a percent of sales, however, these expenses
have increased from 89.9% in the prior year to 97.3% in the current
year. This increase primarily reflects fixed buying and occupancy
expenses on lower sales volumes.
General and administrative expenses as a percent of sales have
increased from 10.0% in the prior year to 19.0% in the current year.
This increase primarily reflects fixed overhead expenses on lower
sales volumes.
Net interest expense increased $.8 million during the three
months ended June 30, 1996 from the same period in the prior year
due to increased borrowing on the Company's revolving credit
facility.
The Company is presently operating its business as a debtor-in-
possession subject to the jurisdiction of the United States
Bankruptcy Court for the Northern District of Illinois ("the
Court"). The results for the first quarter ended June 30, 1996 do
not include any adjustments that might be necessary to reflect the
possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities as a
consequence of the bankruptcy proceedings and related uncertainties.
The following subsidiaries of the Company were not included in the
filing under Chapter 11, Ben Franklin Insurance Agency, Inc.;
Belmont Insurance Co., Ltd.; and Auto Artistry, Inc.
The Company separately announced that it has reached an
agreement with its secured lenders to modify its existing interim
debtor-in-possession financing by increasing the Company's permitted
borrowings from $2.0 million to $4.5 million and extending the
maturity date of such borrowings from August 25, 1996 to September
15, 1996. This modification was approved by the Court on August 15,
1996. In addition, the Company agreed with such lenders to an
arrangement designed to fund the Company's operations, including
inventory purchases, through December 31, 1996 through the use of
the lenders' "cash collateral." This arrangement is subject to the
Court's further approval and a hearing on the matter has been
scheduled for September 4, 1996. A copy of the proposed Court order
concerning this arrangement is on file with, and is available from,
the Court.
Ben Franklin Retail Stores is a franchisor to more than 300
craft stores, including craft superstores, and more than 500 variety
stores, and wholesaler to holders of more than 700 merchandise
agreements throughout the United States and internationally. The
Company is headquartered in Carol Stream, Illinois.
BEN FRANKLIN RETAIL STORES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
AND SUMMARIZED BALANCE SHEET DATA
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED
JUNE 30,
1996 1995
NET SALES $46,473 $89,337
OPERATING COSTS
Cost of Sales, Buying and Occupancy 45,233 80,279
General and Administrative Expenses 8,851 8,920
Depreciation and Amortization 1,856 1,128
Total Operating Expenses 55,940 90,327
OPERATING LOSS (9,467) (990)
INTEREST EXPENSE - NET 2,098 1,328
OTHER INCOME (EXPENSE) 194 (29)
LOSS BEFORE INCOME TAXES (11,371) (2,347)
Income Tax Benefit -- 806
NET LOSS $(11,371) $(1,541)
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARES:
Net Loss
-- Primary $(2.08) $(.28)
-- Fully Diluted N/A N/A
Average Number of Common and
Common Equivalent Shares Outstanding
-- Primary 5,463 5,582
-- Fully Diluted N/A N/A
BEN FRANKLIN RETAIL STORES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
AND SUMMARIZED BALANCE SHEET DATA
(In thousands, except per share amounts)
June 30,
March 31,
1996 1996
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $10,314 $6,952
Short Term Investments 532 1,337
Receivables - Net 57,598 63,746
Inventories 45,103 53,309
Current Deferred Tax Asset 2,718 2,718
Prepaid Expenses 4,731 4,872
TOTAL CURRENT ASSETS 120,996 132,934
PROPERTIES AND EQUIPMENT
Gross Property and Equipment 56,053 57,284
Less: Allowance for Depreciation and
Amortization 20,367 19,318
Net Properties and Equipment 35,686 37,966
Intangibles, net of amortization 5,057 5,731
DEFERRED TAX ASSET, NET OF VALUATION ALLOWANCE 18,771 18,755
OTHER ASSETS 10,033 9,842
TOTAL ASSETS $190,543 $205,228
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $45,402 $53,098
Other Current Liabilities 14,376 16,232
TOTAL CURRENT LIABILITIES 59,778 69,330
CONVERTIBLE SUBORDINATED NOTES 28,750 28,750
OTHER LONG-TERM DEBT 72,230 65,851
OTHER LONG-TERM LIABILITIES 8,772 8,889
STOCKHOLDERS' EQUITY
Preferred Stock, $.01 Par Value;
1,000,000 authorized; none issued -- --
Common Stock, $.01 Par Value;
15,000,000 shares authorized;
5,462,750 shares issued 55 55
Capital in Excess of Par Value 49,288 49,288
Net Unrealized Holding Loss
on Marketable Securities (125)
(101)
Retained Earnings (28,020)
(16,649)
Treasury Stock (185)
(185)
Total Stockholders' Equity 21,013 32,408
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $190,543 $205,228