/raid1/www/Hosts/bankrupt/TCR_Public/960821.MBX BANKRUPTCY CREDITORS' SERVICE, INC.


Bankruptcy and Troubled Company News


August 21, 1996



  1. Dauphin files first quarterly report since closure of its Chapter 11 case
  2. Kmart Corporation Reports 1996 Second-Quarter Results





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Dauphin files first quarterly report since closure of its Chapter 11 case


        


            PALATINE, Ill.  --  Aug. 21, 1996  --  Dauphin
        Technology Inc.
announces that on Aug. 13, 1996, the company filed
        its 2nd quarter report (Form 10-Q) for the period ending 6/30/96.
        


            The 2nd quarter report constitutes Dauphin's first financial
        report, since its emergence from its Chapter 11 case, and represents
        the company's current financial condition.  The company reports the
        2nd quarter, compared to the 1st quarter 1996, reflects its
        elimination of its $51,000,000 debt.
        


            As a result of the acquisition from Technology Partners LLC, and
        the extinguishment of debt, Dauphin presently reports over
        $3,100,000 in assets, $3,000,000 in shareholders' equity and a one-
        time recognition of approximately $38,000,000 in extraordinary
        income.
        


            Dauphin stock is publicly traded on the Over-the-Counter
        Electronic Bulletin Board under the symbol DNTK.
        


        CONTACT:  Dauphin Technology Inc., Palatine
                  Sheila A. Trendel, 847/358-4406 ext. 205



Kmart Corporation Reports 1996 Second-Quarter Results


        


            TROY, MI  --  August 21, 1996  --  Kmart Corporation
        (NYSE: KM) today reported net income from continuing operations of
        $34 million, or $.07 per share, in the second quarter of 1996,
        compared with a net gain in the second quarter of 1995 of $22
        million, or $.05 per share.  Giving effect to a loss from
        discontinued operations of $76 million, or $.17 per share in the
        second quarter of 1995, the net loss in the second quarter of 1995
        was $54 million, or $0.12 per share.
        


            Total sales in the second quarter were $8.312 billion, a
        decrease of 1.5% from $8.440 billion from the second quarter of
        1995.  On a comparable store basis, consolidated sales for the
        quarter increased 1.6% and sales for U.S. Kmart stores increased
        2.2%.
        


            Gross margin for the second quarter of 1996 was 21.7% of sales
        versus 22.5% last year, reflecting markdowns related to the
        clearance of seasonal and discontinued merchandise, lower than
        anticipated margin rate in softlines, and the effect of the sale of
        Kmart's auto service business.
        


            Selling, general and administrative (SG&A) expenses declined by
        $117 million for the quarter, resulting in an SG&A ratio for the
        second quarter of 20.6% of sales versus 21.6% for the comparable
        1995 period.
        


            Commenting on second quarter results, Floyd Hall, chairman,
        president and chief executive officer, said, "Sales in our U.S.
        Kmart stores increased 2.2% on a comparable store basis in the
        second quarter and 2.9% for the first six months of 1996, which was
        below our expectations.  While performance in our consumables
        categories was good, we look for improved performance in both hard
        and softlines in the second half of 1996.  Gross margin rates appear
        to have stabilized, and we continue to see strong SG&A improvements,
        totaling $222 million year-to-date.  Results were also affected by
        weak performance at Kmart's Canadian operation.
        


            "During the second quarter, Kmart also completed $4.7 billion in
        new financing through a three-year, $3.7 billion credit facility
        coupled with a $1 billion public offering of 7.75% convertible
        preferred securities.  These financings ensured our financial
        flexibility and give us time to  execute our merchandising and
        operational initiatives," Hall said.
        


            Excluding non-recurring items, the first half of 1996 resulted
        in a net loss of $4 million, or $.01 per share, as compared with a
        net loss of $86 million, or $.20 per share in the first half of
        1995.  The net loss, including discontinued operations, for the 26
        weeks of 1996 was $65 million, or $.13  per share, compared with a
        net loss of $82 million, or $.19 per share, in the year-ago period.
        Discontinued operations in 1996 included a $61 million charge, 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.  The first half of
        1995 included the positive impact of a pension curtailment gain of
        $83 million net of tax, or $0.18 per share, relating to the freezing
        of the Kmart defined benefit pension plan, as well as a loss from
        discontinued operations described earlier.
        


            Kmart Corporation serves America with 2,143  Kmart and 168
        Builders Square retail outlets, and operates 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 JULY 31, 1996 AND JULY 26, 1995
        
                                     SALES
        
                                                          % Inc. (Dec.)
                                                         All     Comparable
        (Millions U.S. $)           7-31-96   7-26-95    Stores     Stores
        
        General Merchandise
         United States             $ 7,336   $ 7,386    (0.7)          2.2
         International                 230       296   (22.1)         (7.0) (a)
        Total General Merchandise    7,566     7,682    (1.5)          1.9
        
        Specialty Retail
         Builders Square               746       758    (1.6)         (0.8)
        Total Kmart                $ 8,312   $ 8,440    (1.5)          1.6
        
        (a)  International Comparable Store Sales change is calculated on sales
             in the applicable local currency.
        
                               OPERATING RESULTS
        
        (Millions U.S. $)           7-31-96  7-26-95    % Change
        
        General Merchandise
         United States             $   155   $   133       16.5
         International                 (15)      (10)     (50.0)
           Total General Merchandise       140       123       13.8
        
           Specialty Retail
         Builders Square                19         9      111.1
           Total Kmart                 $   159   $   132       20.5
        
            For the comparable 13 week periods the pretax LIFO charge was $7
        million for both 1996 and 1995.
        
                               KMART CORPORATION
                    SALES AND OPERATING RESULTS BY BUSINESS
                26 WEEKS ENDED JULY 31, 1996 AND JULY 26, 1995
        
                                     SALES
        
                                                          % Inc. (Dec.)
                                                         All     Comparable
        (Millions U.S. $)           7-31-96   7-26-95    Stores     Stores
        
        General Merchandise
         United States             $ 14,028  $ 13,950    0.6          2.9
         International                  513       545   (5.9)        (3.7) (a)
        Total General Merchandise    14,541    14,495    0.3          2.7
        
        Specialty Retail
         Builders Square            1,351     1,388     (2.7)        (1.9)
           Total Kmart               $ 15,892  $ 15,883      0.1
        2.3
        
        (a)  International Comparable Store Sales change is calculated on sales
          in the applicable local currency.
        
                               OPERATING RESULTS
        
        (Millions U.S. $)           7-31-96  7-26-95     % Change
        
        General Merchandise
         United States             $   213   $   219   (b)  (2.7)
         International                 (16)      (15)       (6.7)
        Total General Merchandise      197       204        (3.4)
        
        Specialty Retail
         Builders Square                19       (2)
        Total Kmart                $   216   $   202        6.9
        
            (b)  The 26 week period ended July 26, 1995 includes a one-time
        gain from pension curtailment of $124 million.
        
            For the comparable 26 week periods the pretax LIFO charge was
        $15 million for both 1996 and 1995.
        
                               KMART CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
        
                                                      13 Weeks            %
                                                       Ended            Inc.
        (Amounts in millions, except per share  7-31-96      7-26-95    (Dec.)
        data)
        
        Sales                                  $  8,312   $  8,440       (1.5)
        Cost of merchandise sold                  6,508      6,544       (0.6)
        Gross profit                              1,804      1,896       (4.9)
        
        Licensee fees and other income               65         63        3.2
        
        Selling, general and administrative       1,710      1,827       (6.4)
         expenses
        
        Operating income                            159        132       20.5
        
        Interest expense, net                       110        114       (3.5)
        
        Income from continuing operations
         before income taxes, equity
         income and preferred dividends              49         18
        Equity in net income of unconsolidated
         companies                                   12         14       (14.3)
        Income taxes                                 21         10
        Dividends on convertible preferred
         securities, net of tax                       6          -
        
        Net income from continuing operations        34         22        54.5
        
        Loss on disposal of discontinued
         operations, net of tax                       -        (76)
        Net income (loss)                     $      34     $  (54)
        
        Earnings (loss) per common share:
         Continuing retail operations         $    0.07   $    0.05
        Discontinued operations                       -       (0.17)
        Net income (loss)                      $   0.07   $   (0.12)
        
        Weighted average shares outstanding       488.1       459.3
        
            The consolidated statement of operations for the prior period
        has been restated for discontinued operations.
        
                               KMART CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
        
                                                    26 Weeks            %
                                                     Ended            Inc.
           (Amounts in millions, except per share  7-31-96     7-26-95
        (Dec.)
        data)
        
        Sales                                $   15,892    $   15,883       0.1
        
        Cost of merchandise sold                 12,429        12,332       0.8
        Gross profit                              3,463         3,551      (2.5)
        
        Licensee fees and other income              125           121       3.3
        
        Selling, general and administrative       3,372         3,594      (6.2)
         expenses
        Gain on pension curtailment                   -          (124)
        
        Operating income                            216           202       6.9
        
        Interest expense, net                       226           223       1.4
        Loss from continuing operations before
         income taxes, equity income
         and preferred dividends                    (10)          (21)     52.8
        Equity in net income of unconsolidated
         companies                                   14            16     (12.5)
        Income taxes                                  2            (2)
        Dividends on convertible preferred
         securities, net of tax                       6             -
        
        Net loss from continuing operations         (4)            (3)    (33.3)
        
        Loss on disposal of discontinued
         operations, net of tax                    (61)           (79)
        Net (loss)                             $   (65)     $     (82)
        
        Earnings (loss) per common share:
        Continuing retail operations         $   (0.01)     $   (0.02)
        Discontinued operations                  (0.13)         (0.17)
        Net income (loss)                    $   (0.13)     $   (0.19)
        Weighted average shares outstanding      484.7          459.0
        
           The consolidated statement of operations for the prior period has
        been restated for discontinued operations.
        
                               KMART CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
        
                                                        26 Weeks
                                                          Ended
        (Amounts in millions)                         7-31-96    7-26-95
        
        Cash Flows From Operating Activities:
        Net loss from continuing operations           $   (4)   $     (3)
        Adjustments to reconcile net loss to net
         cash used for operating activities:
         Depreciation and amortization                    325        353
         Increase in inventories                         (758)      (518)
         Increase in accounts payable                     333        226
         Deferred income taxes                            125        164
         Undistributed equity income and
          dividends received                               50         36
         Decrease in other long-term liabilities         (181)      (220)
         Changes in certain assets and liabilities          7       (563)
         Net cash used for continuing operations         (103)      (525)
         Net cash provided by discontinued
          operations                                       41        162
         Net cash used for operating activities           (62)      (363)
        
         Cash Flows From Investing Activities:
         Capital expenditures - owned property           (128)      (258)
         Increase in property held for resale            (600)       (82)
         Proceeds from asset sales                        180        885
         Other - net                                       (1)         3
         Net cash provided by (used for) investing
          activities                                     (549)        548
        
        Cash Flows From Financing Activities:
         Proceeds from long-term debt and notes
          payable                                       1,461         161
         Refinancing costs related to long-term
          debt and notes payable                        (190)           -
         Reductions in long-term debt and notes
          payable                                     (2,225)       (314)
         Net proceeds from issuance of
          convertible preferred securities               971           -
         Reduction in capital lease obligations          (68)        (59)
         Dividends paid                                    -        (169)
         Other, net                                       26           9
        Net cash used for financing activities           (25)       (372)
        
        Net decrease in cash                            (636)       (187)
        Cash at beginning of period                     1,095        480
        Cash at end of period                          $  459     $  293
        
           The consolidated cash flow statement for the prior period has
        been restated for discontinued operations.
        
                               KMART CORPORATION
                          CONSOLIDATED BALANCE SHEETS
        
         (Amounts in millions, except share data)  7-31-96   7-26-95   1-31-96
        
         ASSETS
        Current Assets:
        Cash                                   $    459   $    293   $   1,095
        Merchandise inventories                   7,393      7,371       6,635
        Other current assets                      1,368      1,406       1,092
        Net current assets of discontinued
         operations                                 149         88           -
        Total current assets                      9,369      9,158       8,822
        
        Investments in affiliated retail
         companies                                    51        73          94
        Property and equipment, net                5,018     5,934       5,301
        Other assets and deferred charges          1,317       232         866
        Net long-term assets of discontinued
         operations                                   -        411         314
         TOTAL ASSETS                         $  15,755  $  15,808   $  15,397
        
        LIABILITIES AND EQUITY
        Current Liabilities:
          Long-term debt due within one year      $ 125     $   29          $7
        Notes payable                                 -        846           -
        Trade accounts payable                    2,326      2,865       1,993
        Accrued payrolls and other liabilities      989        889       1,076
        Taxes other than income taxes               295        341         188
        Income taxes                                 32         79           -
         Total current liabilities                3,767      5,049       3,264
        
        Capital lease obligations                 1,564      1,725       1,629
        Long-term debt and notes payable          3,054      1,956       3,935
        Other long-term liabilities               1,152      1,232       1,289
        Convertible preferred securities, net       980          -           -
        Preferred stock                               -        131           -
        Common stock, 1,500,000,000 shares
         authorized; shares issued 486,935,732 and
        465,279,932, respectively                    487       465         486
        Capital in excess of par value             1,612     1,515       1,624
        Retained earnings                          3,261     3,878       3,326
        Treasury shares and restricted stock         (54)      (93)        (92)
        Foreign currency translation adjustment      (68)      (50)        (64)
         TOTAL LIABILITIES AND EQUITY          $  15,755  $ 15,808   $  15,397
        
            The consolidated balance sheet for the prior periods have been
        restated for discontinued operations.


CONTACT:  Robert M. Burton, Director, Investor Relations of Kmart, 810-643-1040