InterNet Bankruptcy Library - News for October 24, 1996

Bankruptcy News For October 24, 1996


  2. DEP Corp. plan of reorganization confirmed by bankruptcy court

  3. McKesson And FoxMeyer Jointly Announce Termination Of The Hart-Scott-Rodino Waiting
    Period For FoxMeyer Transaction

  4. El Paso Electric Company Announces Third Quarter Financial Results

  5. Stratosphere announces third quarter results


BRENTWOOD, Tenn.--(BUSINESS WIRE)--Oct. 24, 1996--Comptronix Corporation (OTC Bulletin
Board:CMPX) today announced that the U.S. Bankruptcy Court for the Middle District of Tennessee has
approved the Company's proposed sale of substantially all of its assets to Sanmina Corporation. Terms
of the sale were previously announced. Consummation of the transaction is subject to expiration of the
waiting period under the Hart-Scott-Rodino Act, and is expected to take place on November 1, 1996.

CONTACT: Comptronix Corp. E. Townes Duncan, 205/582-1810

DEP Corp. plan of reorganization confirmed by bankruptcy court

LOS ANGELES, CA --Oct. 24, 1996--DEP Corp. (NASDAQ SmallCap:DPCAQ/DPCBQ) Thursday
announced that the U.S. Bankruptcy Court has confirmed the company's Second Amended Plan of
Reorganization, clearing the way for DEP's emergence from Chapter 11 on Nov. 4, 1996.

The plan, confirmed yesterday, had obtained the overwhelming support of the voting creditors and

Under the plan, which should become effective on Nov. 4:

-- The lender group, led by Foothill Capital Corp., will provide DEP with $62 million in long-term
financing at an interest rate of prime plus 2 percent, with a maturity date of July 31, 2002.

-- The lender group will receive $150,000 in cash in satisfaction of certain post-petition interest claims
and 542,488 shares of DEP common stock, plus warrants to purchase an additional 330,050 shares at a
price to be determined subsequent to the effective date. The company currently has 6,251,140 common
shares outstanding.

-- DEP will reclassify all of its existing common stock, including the stock issued the lenders, as one
class of voting stock so that all common shares have identical voting rights and privileges.

-- DEP will assume up to $1.150 million post-petition professional fees and expenses incurred by the
lenders, less payments made during the Chapter 11 proceeding.

-- Unsecured creditors will be paid, with 5 percent interest, over 18 months.

"We are pleased that we have been able to resolve this difficult situation in the best interest of all
constituents. The plan restructures the company's long-term debt to be consistent with our anticipated
cash flow, and treats all of our creditors and stockholders fairly," said Robert Berglass, chairman and
president of DEP.

"I want to thank the unsecured creditors committee, our suppliers, retail customers and employees for
their tremendous support during this challenging period. We look forward to turning our attention to
building the business."

DEP Corp. is a consumer products company that develops, manufactures and markets a wide variety of
hair, oral and skin care products under 10 major brand names: Dep, L.A. Looks, Agree, Halsa, Lilt,
Topol, Lavoris, Natures Family, Porcelana and Cuticura. The company employs approximately 300
people at its Rancho Dominguez, Calif., headquarters and production facility.

The company filed to restructure under Chapter 11 of the Bankruptcy Code on April 1, 1996.

CONTACT: DEP Corp., Rancho Dominguez D. Lee Johnson, 310/604-0777 or Sitrick and Co. Ann
Julsen, 310/788-2850

McKesson And FoxMeyer Jointly Announce Termination Of The Hart-Scott-Rodino Waiting Period For
FoxMeyer Transaction

SAN FRANCISCO, CA --October 24, 1996 (NYSE:MCK and FOX)--McKesson Corp. and FoxMeyer
Drug Company
today jointly announced that the waiting period under the Hart-Scott-Rodino Act has
expired without objection or request for additional information from the Federal Trade Commission,
clearing the way for the sale of FoxMeyer's healthcare distribution business and related assets to
McKesson, pending Bankruptcy Court approval.

FoxMeyer Drug and certain affiliated companies filed to reorganize under Chapter 11 of the Bankruptcy
Code on August 27, 1996 in U.S. Bankruptcy Court of Wilmington, Delaware. A hearing on the sale is
scheduled in Bankruptcy Court for November 8, 1996.

McKesson Corp., with annual revenues of $14 billion, is a leading provider of pharmaceutical and
health care products and services. Through McKesson's U.S. Health Care business; a Canadian
subsidiary Medis Health and Pharmaceutical Services, and a minority interest in Mexico's Nadro, S.A.,
McKesson is the largest distributor of pharmaceuticals and health care products in North America. The
company also owns McKesson Water Products, one of the nation's largest distributors of bottled
drinking water, and 55% of Armor All Products (NASDAQ:ARMR), the world's leading producer of
automotive appearance products.

FoxMeyer Drug is the nation's fourth largest wholesaler of pharmaceutical products, health and beauty
aids. The Company, which is headquartered in Dallas, employs approximately 2,200 people in 21 states
and the District of Columbia.

CONTACT: McKesson Corp. Janet Bley, (415) 983-9357 Ann Julsen, (310) 788-2850

El Paso Electric Company Announces Third Quarter Financial Results

EL PASO, Texas--Oct. 24, 1996--El Paso Electric Company (AMEX:EE), reported net income
applicable to common stock of approximately $19.8 million ($.33 per share) for the quarter ended Sept.
30, 1996. Higher sales, resulting from weather conditions and customer growth, compared to the same
period in 1995, contributed to the performance. Additionally, a non-recurring gain on the sale of an
investment contributed approximately $2.3 million ($0.04 per share), net of income tax.

EE net income applicable to common stock for the period Feb. 12, 1996 to Sept. 30, 1996 was
approximately $26.5 million ($.44 per share). These results reflect the operations of EE since its
emergence from bankruptcy on Feb. 12, 1996, and the application of "fresh-start" reporting. As a result,
the results reported are not comparable to EE's financial information reported prior to its reorganization.

For the third quarter, retail kilowatt hour sales were up 2.4 percent over the comparable period last year
while wholesale kWh sales were down 0.9 percent compared to that same period. For the nine month
period ended Sept. 30, 1996, retail sales were up 4.2 percent and wholesale sales were up 2.5 percent
compared to the same period in 1995.

EE continues to use a portion of its available cash flow to reduce fixed obligations by making open
market purchases of first mortgage bonds. For the third quarter, EE repurchased $55.7 million of first
mortgage bonds, while repurchases for the year to date totaled $103.6 million, as follows:

         June               $   9.0
         July                  16.8
         August                35.7
         September              3.2
         Since September 30th  38.9
            Total           $ 103.6

On Oct. 10, 1996, the board of directors declared a dividend of $8.4275 per share on EE's 11.40
percent Series A Preferred Stock to be paid on Nov. 1, 1996, to shareholders of record as of Oct. 21,
1996. The dividend is payable in additional shares of Series A Preferred Stock, with fractional shares
payable in cash.

EE is an electric utility serving approximately 278,000 retail customers in El Paso, Texas and an area of
the Rio Grande Valley in West Texas and Southern New Mexico, as well as wholesale customers in
Southern California, New Mexico, Texas and Mexico.

        Quarter Ended September 30, 1996 (In thousands):
                                 1996          1995         (Decrease)
                             -----------    ----------     -----------
        Electric KWH Sales:
          Retail Customers    1,633,280      1,594,984        2.4 %
          Other Utilities       503,194        507,856       (0.9)%
                             ----------     ----------
            Total             2,136,474      2,102,840        1.6 %

        Operating Revenues:
          Retail Cutomers     $ 134,523
          Other Utilities        32,133
            Total             $ 166,656

        Capital Expenditures  $   8,671      $  14,796

        Cash Interest
          Payments            $  21,833

        Depreciation and
          Amortization        $  22,584

        Federal and State
          Income Taxes        $  14,729

        EBITDA(2)                84,717

        Period From February 12, 1996 to September 30, 1996 (In thousands):

                                 1996          1995         (Decrease)
                              ----------     ----------     -----------
        Electric KWH Sales(1):
          Retail Customers     4,316,711      4,143,587        4.2 %
          Other Utilities      1,326,282      1,294,035        2.5 %
                              ----------     ----------
            Total              5,642,993      5,437,622        3.8 %

        Operating Revenues:
          Retail Cutomers     $ 312,162
          Other Utilities        68,789
            Total             $ 380,951

        Capital Expenditures  $  24,239      $  56,372

        Cash Interest
          Payments            $  32,911

        Depreciation and
          Amortization        $  56,953

        Federal and State
          Income Taxes        $  22,363

        EBITDA(2)             $ 176,870

        (1)  Nine Months Ended September 30, 1996 and 1995.

        (2)  EBITDA should not be considered an alternative to net income
             as an indicator of operating performance or an alternative to
             cash flows as a measure of liquidity.

        El Paso Electric Company's results of operations for the 49-day 
        period February 12, 1996 to March 31, 1996, three months ended June
        30, 1996 and September 30, 1996 and the period February 12, 1996 to
        September 30, 1996 are as follows (in thousands except share data):

                             Period From
                            February 12 to       Three Months Ended
                               March 31,     June 30,       September 30,
                                 1996          1996             1996
                              ----------   -----------     -----------
        Operating revenues    $   69,907   $   144,388     $   166,656
        Operating expenses       (55,159)     (110,292)       (122,293)
        Other income, net            463           844           3,041(1)
        Interest charges         (13,522)      (25,440)        (24,634)
        Net income                 1,689         9,500          22,770
        Preferred stock dividend
          requirements             1,552         2,897           2,977
        Net income applicable to
          common stock               137         6,603          19,793

        Net income per weighted
          average share of
          common stock        $     0.00   $      0.11     $       0.33

        Weighted average number
          of common shares
          outstanding         59,999,981    59,999,981       59,999,981

                                                            Period From
                                                          February 12 to
                                                           September 30,
        Operating revenues                                  $  380,951
        Operating expenses                                    (287,745)
        Other income, net                                        4,348(1)
        Interest charges                                       (63,595)
        Net income                                              33,959
        Preferred stock dividend
          requirements                                           7,426
        Net income applicable to
          common stock                                          26,533

        Net income per weighted
          average share of
          common stock                                     $       0.44

        Weighted average number
          of common shares
          outstanding                                        59,999,981

        (1)  Includes gain on sale of an investment of approximately
             $2.3 million, net of income taxes.

CONTACT: El Paso Electric Company Media: Henry Quintana Jr., supervisor, Corporate
Communications, 915/543-5824 or Financial: Leslie Beal, supervisor, Investor Relations,

Stratosphere announces third quarter results

LAS VEGAS, NV--Oct. 24, 1996--Stratosphere Corp. (NASDAQ: TOWV) today announced that for the
third quarter ended Sept. 29, 1996, the company posted a net loss of $26.0 million or $(0.45) per share
(58.4 million weighted average shares outstanding) on net revenues of $35.3 million.

Included in the third quarter results was $12.2 million or $0.21 per share toward amortization of
preopening expenses. Stratosphere Corp. will complete preopening expense amortization by the end of

The Company also announced that it is very pleased with the initial results of its new marketing strategy
and the reconfiguration of its casino floor which was unveiled on Oct. 1, 1996. Management believes
that the new marketing strategy offers customers the best gaming product on the Las Vegas Strip. Gaming
revenue for the period Sept. 30, 1996 through Oct. 21, 1996 was $5.7 million, an increase of 68.5
percent over gaming revenue for the same number of days during the prior month. The Company
cautioned that the new marketing strategy has only been in place for three (3) weeks and accordingly, the
increased revenues may not be indicative of future operating results. Additionally the new marketing
strategy may result in increased expenses.

The Company also announced that it is continuing to seek additional financing and is discussing
restructuring of both its existing First Mortgage Note indebtedness and Capital Lease obligation. Based
upon its current and projected cash position, the Company does not currently plan to make its next
regularly scheduled interest payment on its First Mortgage Notes due on Nov. 15, 1996. The outcome of
any discussion in connection with restructuring the terms of its existing First Mortgage Note
indebtedness is uncertain. In addition, it is highly likely that negotiations with its creditors, whether
successful or not at arriving at a restructuring, will involve a bankruptcy filing as a means of formalizing
and approving either a consensual or nonconsensual restructuring. The Company is also discussing the
restructuring of its capital lease obligation and is evaluating its ability to make its Oct. 30, 1996
payment. The Company does not believe that a bankruptcy filing will, in the long term, adversely affect
daily operations or guest services.

Stratosphere Corp. is a casino/hotel/entertainment complex located at the north end of the Las Vegas
Strip. The complex is centered around the Stratosphere Tower, the tallest free-standing observation
tower in the United States.  

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking
statements. Certain information included in this press release (as well as information included in oral
statements or other written statements made or to be made by the Company) contains statements that are
forward-looking, such as statements relating to plan for future expansion and other business
development activities as well as other capital spending, financing sources and the effects of regulation
(including gaming and tax regulation) and competition. Such forward-looking information involves
important risks and uncertainties that could significantly affect anticipated results in the future and,
accordingly, such results may differ from those expressed in any forward-looking statements made b y or
on behalf of the Company. These risks and uncertainties include, but are not limited to, those relating to
development and construction activities, dependence on existing management, leverage and debt service
(including sensitivity to fluctuations in the interest rates), domestic or global economic conditions,
activities of competitors and the presence of new or additional competition, fluctuations and changes in
customer preferences and attitudes, changes in federal or state tax laws of the administration of such
laws and changes in gaming laws or regulations (including the legalization of gaming in certain
jurisdictions). For more information, review the Company's filings with the Securities and Exchange
Commission, including the Company's annual report on Form 10-K and certain registration statements of
the Company.

                    Stratosphere Corp. and Subsidiaries
                   Condensed Consolidated Balance Sheets

                                            Sept. 29, 1996  Dec. 31, 1995

        Current Assets:
          Cash and cash equivalents                 $38,371,796  $92,595,770
          Cash and cash equivalents-restricted       20,099,258           --
          Accounts receivable                         9,823,078    5,417,030
          Other current assets                        6,522,419    1,125,548
        Total Current Assets                         74,816,551   99,138,348
        Property and Equipment, Net                 435,681,686  194,908,237
        Other Assets:
          Cash and cash equivalents-restricted               --  115,413,435
          Securities available for sale               1,996,540    5,140,950
          Debt issuance and deferred licensing   
           costs-net                                 12,946,152   13,507,699
          Pre-opening costs-net                       4,051,922    5,796,862
        Total Other Assets                           18,994,614  139,858,946
        Total Assets                               $529,492,851 $433,905,531

        Liabilities and Shareholders' Equity
        Current Liabilities:
          Accounts payable-trade                    $11,228,195     $338,745
          Accounts payable-construction              26,643,611   33,523,612
          Current installments of long-term debt  
           and capital lease                         10,800,000           --
          Accrued interest                           11,342,145    3,645,657
          Accrued payroll and related expenses        3,648,236      166,485
          Affiliate payable                           5,771,773      803,865
          Other accrued expenses                      5,881,799      137,403
        Total Current Liabilities                    75,315,759   38,615,767
        Long-term Liabilities:
          Long-term debt and capital lease-less
           current installments                     228,000,000  203,000,000
          Note payable to affiliate                  50,000,000           --
        Total Long-Term Liabilities                 278,000,000  203,000,000
        Total Liabilities                           353,315,759  241,615,767

        Commitments and Contingencies
        Shareholders' Equity:
          Preferred stock, $.01 par value;
           authorized 10,000,000 shares authorized;
           no shares issued and outstanding
          Common stock $0.01 par value; authorized
           100,000,000 shares; issued and
           outstanding 58,393,105 and 56,361,117
           at Sept. 29, 1996 and Dec. 31, 1995,
           respectively                                 583,931      563,611
          Additional paid-in-capital                218,779,007  199,697,889
          Accumulated deficit                       (43,185,846)
        Total Shareholders' Equity                  176,177,092  192,289,764
        Total Liabilities and Shareholders' Equity $529,492,851 $433,905,531

                    Stratosphere Corp. and Subsidiaries
         Condensed Consolidated Statements of Operations (Unaudited)

        Three Months Ended Sept. 29, 1996              1995            1996

        Casino                             $ 14,259,954     $        --
        Hotel                                 7,031,268              --
        Food and beverage                     9,815,438              --
        Tower, retail and other income        9,115,553          23,715
        Gross Revenues                           40,222,213          23,715
        Less: Promotional allowances          4,903,269              --
        Net Revenues                             35,318,944          23,715

        Costs and Expenses:
        Casino                                7,512,100              --
        Hotel                                 2,627,149              --
        Food and beverage                     8,970,014              --
        Other operating expenses              3,994,785              --
        Depreciation and amortization         3,230,179         530,673
        Pre-opening costs amortization       12,234,201              --
        Selling, general and administrative  16,284,130         221,319
                Total Costs and Expenses     54,852,558         751,992

        Loss From Operations                    (19,533,614)       (728,277)

        Other income (expense): 
        Interest income                         363,176       1,875,857
        Interest expense                     (6,855,271)     (3,429,831)
                Total Other Expense, net     (6,492,095)     (1,553,974)

        Net Loss                               $(26,025,709)   $ (2,282,251)

        Loss per Common Share                  $      (0.45)   $      (0.06)

        Weighted Average Common Shares
          Outstanding                            58,393,105      39,398,777


        Nine Months Ended Sept. 29, 1996               1995            1996

        Casino                             $ 26,569,994     $        --
        Hotel                                12,036,486              --
        Food and beverage                    17,050,798              --
        Tower, retail and other income       16,345,496          45,371
        Gross Revenues                           72,002,774          45,371
        Less: Promotional allowances          6,786,251              --
        Net Revenues                             65,216,523          45,371

        Costs and Expenses:
        Casino                               13,504,136              --
        Hotel                                 4,747,348              --
        Food and beverage                    14,474,982              --
        Other operating expenses              6,342,519              --
        Depreciation and amortization         5,719,196       1,186,984
        Pre-opening costs amortization       19,886,459              --
        Selling, general and administrative  28,098,738         550,069
                Total Costs and Expenses     92,773,378       1,737,053

        Loss From Operations                    (27,556,855)     (1,691,682)

        Other income (expense): 
        Interest income                       3,665,175       4,779,559
        Interest expense                    (11,322,430)     (8,700,050)
        Loss on sale of assets                       --        (166,815)
                Total Other Expense, net     (7,657,255)     (4,087,306)

        Net Loss                               $(35,214,110)   $ (5,778,988)

        Loss per Common Share                  $      (0.61)   $      (0.17)

        Weighted Average Common Shares
          Outstanding                            58,047,766      34,797,939

                            Three Months              Nine Months
        Consolidated               ended        % of        ended         %
        Financial Statistics  Sept. 29, 1996  Revenue   Sept. 29, 1996

        Net Revenues          $   35,318,944            $   65,216,253  

        Consolidated Loss
         Before Interest,
         Taxes, Depreciation
         and Amortization         (4,069,234) (11.5%)       (1,951,200)

        Depreciation and
         amortization             (3,230,179)  (9.1%)       (5,719,196)
        Pre-opening cost
         amortization            (12,234,201) (34.6%)      (19,886,459)
        Operating loss           (19,533,614) (55.3%)      (27,556,855)

        Net interest expense      (6,492,095) (18.4%)       (7,657,255)

        Net Loss              $  (26,025,709) (73.7%)   $  (35,214,110)

        Quality of Earnings Analysis
        Loss per share from
         Operations           $        (0.24)           $        (0.27)
        Amortizaton of
         pre-opening cost              (0.21)                    (0.34)
        Loss per share        $        (0.45)           $        (0.61)

CONTACT: Stratosphere, Las Vegas Tom Lettero, 702/383-5207