Rockwell's Brooktree Division to open multimedia design center in San Jose
SAN JOSE, Calif.--Dec. 12, 1996-- Rockwell announces agreement to purchase assets
and hire development team from Weitek Corp. to provide the nucleus for a design center in
San Jose.
Rockwell Semiconductor Systems today announced it will open a multimedia product
design center here that will be operated by the company's Brooktree Division.
To launch the new facility, Rockwell has signed an asset purchase agreement with Weitek
Corp. that will provide equipment and a leased facility in which to start operations.
Rockwell has also offered employment to approximately 20 engineers and other
employees from Weitek.
The new design center will mark Rockwell's first step toward significantly expanding its
presence in the PC multimedia accelerator chip market following its acquisition of
Brooktree Corp. in September 1996. The center will augment existing multimedia design
operations in San Diego and Austin, Texas, and expand the engineering and development
resources that are now available for the Brooktree Division's multimedia accelerator chip
business.
"The establishment of a San Jose design center increases our presence in the multimedia
marketplace and adds key resources for a variety of strategic development programs," said
David Gelvin, vice president, Brooktree Division of Rockwell Semiconductor Systems.
"This is a fast-paced market, and we're in the unique position of being able to very quickly
launch a major design operation. This design operation will allow us to accelerate the
timetable for moving our innovative multimedia technology into the mainstream PC and
add-in card market, and positioning ourselves to capture a sizeable share of that market
during 1997 and beyond."
Rockwell's Brooktree Division plans to expand the design center's core engineering team,
and is actively recruiting design, management and marketing personnel to accelerate a
variety of key existing and planned product development programs.
Rockwell intends to purchase certain Weitek equipment and other assets and formally
assume Weitek's lease of its 30,000-square-foot facility here. Rockwell also will acquire
a license to proprietary Weitek Technology, including Weitek's Universal Memory
Architecture (UMA) and floating-point processor technology.
The transaction is subject to court approval of Weitek's bankruptcy plan, which Weitek
submitted today as part of a voluntary filing under Chapter 11 of the U.S. bankruptcy code.
In November 1996, Rockwell's Brooktree Division announced the first in a planned family
of low-cost, high-performance multimedia chips for mainstream consumer entertainment
PCs.
The Bt2164 video/graphics controller combines high-resolution 2D graphics plus
game-quality 3D and theater-quality video, and leverages a unique MediaPacket
architecture to ensure a seamless blending of video and graphics data in the rich Windows
95 environment.
The Bt2164 also features the company's TrueView technology, which optimizes the
display fidelity of TV-style interlaced video sources on the non-interlaced screens of
high-resolution computer displays. The Bt2164 is one of the first multimedia chips at its
price capable of handling the full-size, full-quality MPEG-2 frames of advanced digital
video sources like DVD and satellite-delivered digital video.
The Brooktree Division has also announced plans for a mainstream, single-chip 3D
controller that is being jointly designed with Argonaut Ltd., a leader in 3D video games
and hardware technology. Slated for release in the first quarter of 1997, the chip will be
based on a low-cost 3D hardware engine that will be one of the first designed specifically
to accelerate 3D games in the Windows 95 Direct3D gaming environment.
The 3D chip will support the unique combination of 2D graphics, smooth and realistic 3D
graphics, plus high-fidelity, full-motion video from CDs, NTSC/PAL sources and
advanced MPEG-2 video sources like DVD and direct-broadcast satellite.
Rockwell Semiconductor Systems is the fastest growing business segment of Rockwell.
Based in Newport Beach, Calif., it comprises the Multimedia Communications Division,
the Wireless Communications Division and the newly acquired Brooktree Division.
The Multimedia Communications Division is the world leader in facsimile and PC modem
devices for personal communications electronics. The Wireless Communications Division
offers total system solutions for advanced cordless telephony and global positioning
systems (GPS) receiver engines and is developing products and technologies to address
the Personal Communications Services (PCS) and wireless packet data markets.
The Brooktree Division is a leading producer of high-performance digital and
mixed-signal integrated circuits for multimedia, graphics, communications and imaging
applications.
Rockwell's industrial automation, semiconductor systems, avionics and communications
systems and automotive component systems businesses are leading providers of
technology solutions to customers worldwide. The company has annual revenues in excess
of $10 billion and employs nearly 60,000 people.
CONTACT: Rockwell Eileen Algaze, 714/221-6849 E-mail:
eileen.algaze@nb.rockwell.com or Carolyn Fromm/Kirsten Bollen 714/753-0755 E-mail:
cfromm or kbollen@oc.tbgi.com
Weitek Announces Agreement With Rockwell
SAN JOSE, Calif, Dec. 12, 1996 - Weitek Corporation (OTC Bulletin Board: WWTK)
today announced the signing of an asset purchase agreement with Rockwell Semiconductor
Systems. Pursuant to the agreement, Rockwell will pay approximately $3 million to
acquire certain Weitek assets and a non-exclusive license to certain Weitek technology.
The purchase price is subject to adjustment based on a number of factors, including
Weitek's ability to transfer certain assets. Rockwell has also extended employment offers
to approximately 20 engineers and other employees of Weitek. In connection with the
agreement, Weitek has made a voluntary filing under Chapter 11 of the U.S. Bankruptcy
Code. The asset transfer is subject to prior approval of the Bankruptcy Court. Until the
Bankruptcy Court approves the asset transfer, Weitek will provide certain contract
engineering services to Rockwell. Weitek is expected to seek interim permission from the
Bankruptcy Court to permit Rockwell to use Weitek's San Jose, California design facilities
and hire the Weitek engineers and other employees sought by Rockwell.
Richard Bohnet, President and Chief Executive Officer of Weitek commented that "the
agreement with Rockwell is the culmination of a multi-year effort to find a strategic buyer
for Weitek's assets. We are very pleased with the Rockwell agreement. We will continue
to seek buyers for the Weitek assets not being purchased by Rockwell, including Weitek's
intellectual property portfolio. We believe that the Rockwell agreement, together with an
orderly disposition of other assets, provides Weitek with the best opportunity to satisfy its
obligations to creditors and return some assets to shareholders." Weitek, which has
sustained substantial operating losses during the past several years, will attempt to sell
those assets not being acquired by Rockwell through the bankruptcy proceeding, and then
expects to wind up its affairs. Creditors and shareholders of Weitek will receive
additional information regarding the bankruptcy proceedings by mail.
This press release contains forward looking statements within the meaning of the
Securities Exchange Act of 1934, as amended. Actual results may differ materially from
those described herein. Factors which may cause such results to differ include the
following: (i) the agreement and other arrangements with Rockwell are subject to the
approval of the Bankruptcy Court, and there can be no assurance that the agreement and
other arrangements will be approved by such court on the terms agreed by the parties or on
any other terms; (ii) the agreement with Rockwell contains customary conditions to closing
which, if not satisfied, would permit Rockwell and Weitek to terminate the agreement and
other arrangements; (iii) there can be no assurance that Weitek will be successful in
locating buyers for the remaining assets, and (iv) while Weitek expects to have assets
available for distribution to shareholders after satisfying all senior claims, there can be no
assurance as to the amount, if any, which will be available for distribution to Weitek
shareholders after remaining assets are disposed of and senior claims are satisfied.
SOURCE Weitek Corp. /CONTACT: Donald V. Carloni, Investor Relations of Weitek
Corporation, 408-526-0300/
TORONTO, Canada--December 12, 1996--Consumers Packaging Inc. (Toronto Stock
Exchange: CGC) announced today that Anchor Glass Container Corporation has made a
decision to support a joint bid by Consumers and Owens-Brockway Glass Container, Inc.
to purchase the assets and assume certain of the liabilities of Anchor. Anchor, one of the
largest producers of glass bottles and jars in the U.S., has been operating under Chapter 11
of the U.S. Bankruptcy Code since September 1996.
Under the terms of the joint bid, Consumers and Owens will pay (US)$392.5 million,
consisting of (US)$333.6 million in cash and (US)$58.9 million in convertible preferred
and common securities of a newly formed subsidiary of Consumers' for substantially all of
the assets of Anchor, and will assume certain liabilities specified in a definitive agreement
to be negotiated between the parties. Owens has agreed to purchase certain assets of
Anchor, including plants in Antioch and Hayward, California, and to assume Anchor's
contractual agreement with Coors Brewing Co., including a partnership interest in the
Rocky Mountain Bottle Co. Owens will contribute approximately (US)$125.0 million plus
the assumption of certain liabilities. The balance of the purchase price will be provided
by Consumers, out of debt financing for which it has commitments.
The purchase is subject to, among other things, the execution of definitive agreements
between Consumers, Owens and Anchor Glass Container Corporation, review under the
Hart-Scott-Rodino Act, approval of the U.S. Bankruptcy Court in Wilmington, DE., and
other regulatory approvals and the closing of previously executed financing commitments.
Subject to such conditions, the transaction is expected to close within 45 days.
"The acquisition of the assets and business of Anchor Glass will firmly establish
Consumers as one of the three largest glass packaging producers in the U.S. and Canada. If
the purchase were completed today, our combined sales would be in excess of $1 billion,"
stated John J. Ghaznavi, Chairman and Chief Executive Officer of Consumers.
Mr. Ghaznavi further stated that this transaction is currently expected to favorably impact
Consumers' earnings.
Anchor currently operates 13 plants in the U.S. Anchor's 1996 sales are expected to be
approximately (US)$820 million. On September 13, 1996, Anchor filed for protection
under Chapter 11 of the U.S. Bankruptcy Code, and brought a motion seeking approval of a
sale of the Anchor assets pursuant to a letter of intent with Ball- Foster Glass Container
Co., L.L.C.
Anchor's Board of Directors approved and accepted the Consumers/Owens offer on
December 12, 1996, following a bidding process.
Consumers Packaging Inc. is a leading designer and producer of high quality glass
containers. Headquartered in Canada, the Company operates seven Canadian
manufacturing facilities and distributes its products domestically and internationally.
Operating as Consumers Glass, it is the market share leader and only glass container
producer in Canada, and before this transaction was recognized as the fourth largest in the
U.S. and Canada. Consumers' gross sales for the trailing 12 months ended September 30,
1996, were $459 million. Consumers is 62% owned by G&G Investments, Inc. of
Pittsburgh, Pennsylvania.
Rothschild, Inc. acted as financial advisors to Consumers with respect to this transaction.
CONTACT: John J. Ghaznavi Chairman and Chief Executive Officer Consumers
Packaging Inc. (416) 232-3209
Owens-Illinois announces agreement to acquire glass container assets
TOLEDO, Ohio--Dec. 12, 1996--Owens-Illinois, Inc., (NYSE:OI) today announced that it
has agreed to acquire certain assets of Anchor Glass Container Corporation for
approximately $125 million plus the assumption of certain liabilities. Owens-Illinois will
acquire Anchor's glass container manufacturing plants in Antioch and Hayward, Calif., and
will assume Anchor's contractual agreements with Coors Brewing Company including a
partnership interest in the Rocky Mountain Bottle Company.
The agreement is part of a joint bid by Consumers Packaging Inc. and Owens-Illinois,
under which Consumers would purchase the majority of Anchor's assets.
Anchor has filed for protection under Chapter 11 of the United States Bankruptcy Code.
Completion of the proposed acquisition is contingent upon approval by the United States
Bankruptcy Court in Wilmington, Delaware, the negotiation of definitive agreements, and
the satisfaction of certain conditions.
Owens-Illinois also has agreed to provide its glass container manufacturing technology to
Consumers Packaging operations in the United States and Canada, including those being
purchased from Anchor, subject to the completion of an agreement with Consumers.
Owens-Illinois is one of the world's leading manufacturers of glass and plastic packaging
products. In addition to being the largest manufacturer of glass containers in the United
States, the company also has major international glass container and plastic packaging
units, each with annual sales exceeding $1 billion. Owens- Illinois had net sales of $3.8
billion in 1995.
CONTACT: Owens-Illinois John Hoff, 419/247-1203
Anchor agrees to sell company assets to Consumers Packaging and Owens-Brockway
TAMPA, Fla.--December 12, 1996--Anchor Glass Container Corporation announced that
it has reached a decision to support a joint bid from Consumers Packaging, Inc. and
Owens- Brockway Glass Container, Inc. to purchase the company's assets for $392.5
million, subject to certain adjustments, plus the assumption of certain of Anchor's
liabilities. Owens-Brockway and Consumers Packaging both manufacture glass bottles and
jars, and are based in Toledo, Ohio and Toronto, Ontario, respectively.
The Consumers and Owens offer provides for $333.6 million in cash and $58.9 million in
preferred and common equity securities of a new entity to be formed by Consumers. In
addition, the joint bidders will assume all liabilities specified in a definitive agreement to
be negotiated by the parties. The deal is further subject to the approval of the bankruptcy
court on December 17, 1996, regulatory approvals, the closing of previously executed
financing commitments, and other conditions, and is expected to close within 45 days.
Anchor's Chairman James R. Malone stated: "Consumers and Owens' bid offers more
value for our assets, as well as the prospect for a faster closing of the sale. I am hopeful
that with this decision we will reach an acceptable conclusion to this process."
On September 13, 1996, Anchor filed for protection under Chapter 11 of the United States
Bankruptcy Code, and announced it was seeking a Section 363 sale of the Anchor assets
pursuant to a letter of intent with Ball-Foster Glass Container Co., L.L.C. On October 4,
1996, Anchor announced that it had executed an Asset Purchase Agreement with
Ball-Foster for $365 million in cash, subject to certain adjustments, plus the assumption of
certain liabilities, and filed a motion seeking Bankruptcy Court approval for the sale
subject to higher and better bids. The Consumers and Owens bid for the company was
submitted on December 2, 1996.
Anchor Glass Container Corporation, headquartered in Tampa, Florida, is one of the
largest producers of glass bottles and jars in the United States.
CONTACT: Mark Kirk or Lewis Kruger Anchor Glass Corp. Stroock & Stroock & Lavan
(813) 884-0000 (212) 806-5430 or Wes Truesdell/Joe Dodson The Dilenschneider Group
(212) 922-0900
Huntway Partners, L.P. Prepackaged Restructuring Plan Confirmed
NEWHALL, Calif., Dec. 12, 1996 - Huntway Partners, L.P. (NYSE: HWY) announced
today that its prepackaged plan of reorganization has been confirmed by the U.S.
Bankruptcy Court in Wilmington, Delaware. As previously announced, Huntway's
prepackaged plan was filed on November 12, 1996 after having been approved by four of
its five senior lenders, representing 86% of senior debt, 100% of warrant holders, 100%
of junior noteholders and 98.6% of voting unitholders. The Company said that, just prior to
confirmation, Huntway's remaining senior lender, representing 14% of its senior debt,
agreed to join the other senior lenders in agreeing to a consensual restructuring.
"Confirmation of our prepackaged plan today concludes a nearly two-year effort to
significantly reduce indebtedness and increase partners' capital," said Juan Forster,
President and Chief Executive Officer. "As a result of today's confirmation, total debt,
including accrued interest, will decline by $71 million as measured at September 30,
1996. In exchange for this debt reduction, total units outstanding will increase by
13,786,404 units to 25,342,654 units. This restructuring did not impact our trade suppliers
and creditors who were paid under normal terms throughout the entire process. The
Company estimates that its per unit book value will increase from a negative $2.60 at
September 30, 1996 to slightly over $1.50 at December 31, 1996. Today marks one of the
high points in Huntway's 17 year history by vastly improving Huntway's balance sheet. In
addition, I believe the plan preserves significant value for our unitholders."
As soon as practicable following the effective date, the Company will issue, $23.5 million
in new 12% senior secured notes and $2,070,000 in new 12% junior notes. The Company
will also issue 13,786,404 units. All of the new notes will bear interest from January 1,
1996 with the first interest payment being made on March 31, 1997.
The Company's $17.5 million DIP letter of credit facility will no longer be required and
will terminate on the effective date. It will be replaced with a new $17.5 million letter of
credit facility which will be primarily used to collateralize crude purchases.
Huntway Partners, L.P. owns and operates, two refineries at Wilmington and Benicia,
California, which primarily process California crude oil to produce liquid asphalt for use
in road construction and repair, as well as smaller amounts of gas oil, naphtha, kerosene
distillate and bunker fuels. The company's third refinery, at Coolidge, Arizona, has been
shut down since 1993.
The company's common units are traded on the New York Stock Exchange under the
symbol HWY.
SOURCE Huntway Partners, L.P. /CONTACT: Warren J. Nelson, Executive Vice
President and Chief Financial Officer, 805-286-1582/
Italian Oven Obtains D-I-P Financing
LATROBE, Pa., Dec. 12, 1996 - The Italian Oven, Inc. (Nasdaq: OVENQ) (the
"Company") today announced that it had obtained debtor-in-possession financing from a
private lender in the form of a $200,000 revolving line of credit. The credit facility will
expire in 90 days, unless a transaction for the sale of the Company or a plan of
reorganization is sooner approved by the bankruptcy court that has jurisdiction over the
Company's business affairs. The court has approved the credit facility and proceeds of the
line of credit have been made available to the Company.
"Access to capital is an important step to rebuilding the financial credibility of the
Company's operations," said J. Garvin Warden, interim Chief Executive Officer of the
Company.
The Italian Oven, Inc. operates and franchises Italian-theme, casual dining restaurants. The
Company continues to operate under the protection of the bankruptcy code.
SOURCE Italian Oven, Inc. /CONTACT: J. Garvin Warden of the Italian Oven,
412-537-8340/
Dairy Mart announces fiscal 1997 third- quarter and year-to-date financial results;
Comparable store sales up
ENFIELD, Conn.--Dec. 12, 1996--Dairy Mart Convenience Stores Inc. (Amex:DMC.A &
DMC.B) announced financial results for its fiscal 1997 third quarter and three fiscal
quarters, which ended Nov. 2, 1996. The current year's third-quarter net income was
$193,000, which compares with a net loss of $405,000 in the third quarter of the prior
year. On a per-share basis, net income increased to $0.04 from a net loss of $0.07. The
weighted average number of shares outstanding for earnings-per-share calculation
purposes was approximately 16 percent lower in the third quarter of fiscal 1997 than it
was in the third quarter of fiscal 1996. Interest expense for the quarter was up by
$324,000, or 13.7 percent, primarily because of additional subordinated debentures issued
in Dec. 1995.
Revenues for the third quarter of fiscal 1997 increased $3.9 million, or 2.7 percent, from
$143.5 million in the prior year to $147.3 million in the current year. The current-year
revenues were generated by an average of 830 convenience stores, 362 of which sold
gasoline. The prior-year revenues were generated by an average of 886 convenience
stores, 378 of which sold gasoline. The number of retail locations was lower this year
because the company continues to close or sell stores whose performance has been
substandard. The company also continues to open new high-volume locations. As a result,
average store sales were up significantly.
Gross profit margins in the company's convenience stores continued to reflect competitive
pressure during the quarter. The company's historical pricing strategy at the store level
was not particularly conducive to attracting new customers. Management has effectively
changed that pricing strategy for the long-term benefit of the company, in conjunction with
its continuing program to upgrade the quality of its store facilities. As a consequence, store
performance was negatively impacted in this year's third quarter by the adjustment of retail
pricing in certain core product categories. Store performance was also impacted by an
increased cost of store labor caused by both the recent adjustment in the minimum wage
level and a general shortage of labor in the company's primary markets.
Fortunately, fiscal 1997's third-quarter results benefited from an expected rebate of $1.2
million in gasoline excise taxes from the state of Kentucky, which the Kentucky Supreme
Court has ruled were improperly assessed and collected. Recognizing this benefit in the
third quarter created a better opportunity for management to push ahead with its business
plan.
"Taking the gasoline excise tax rebate in this year's third quarter allowed us to be more
aggressive in adjusting our store pricing for the purpose of becoming more competitive on
a long-term basis and attracting new customers," commented Robert B. Stein Jr., Dairy
Mart's chairman, president and chief executive officer. "Our decision appears to be
working, because comparable-store sales have increased over three percent. We believe
the company has absorbed the most material impact of its retail pricing adjustment and is
now attracting new and permanent customers."
The company's overall performance was also negatively impacted by lower gasoline gross
profit margins in a very competitive gasoline retailing market, caused by higher wholesale
product costs and a diminishing consumer demand for product in generally all the
company's major markets. The results experienced by the company in its gasoline retailing
segment mirrored the general trend seen in the gasoline retailing industry on a national
basis. The current year's third quarter also had fewer special or unusual costs and
expenses associated with corporate restructuring initiatives than did last year's third
quarter.
"Our management approach is to prepare the company for long-term growth while not
forgetting the importance of short-term results," Stein said. "When we changed
management, restructured, and began the planning process for a major upgrade of our asset
base last year, Dairy Mart was a far cry from where we wanted it to be, and we knew the
road up the mountain was long and steep. Even with the progress we have made so far, we
still have a long way to go. We have our eyes on the summit, however, and manage our
business in the short term for the long term. Our vision is to be a geographically focused,
strong regional retailer that offers our customers premium service and facilities.
Everything we do is designed to get us to that point
and keep us there. We are moving in the right direction and are excited about our evolution
over the long term."
For the first three quarters of fiscal 1997, revenues increased 3.9 percent to $444.8
million from $428.2 million in last year's comparable period. Net income for the
year-to-date period was up about 35 percent to $2.0 million from $1.5 million in the prior
year, while earnings-per-share increased 65 percent to $0.43 from $0.26 in the prior year.
Dairy Mart has been engaged in a $100 million, five-year store improvement program that
includes, among other things, the construction of new, higher-volume stores and the
remodeling of a number of existing locations. The company announced last September that
it would relocate its corporate headquarters to northeast Ohio in 1997 and evaluate its
retail locations in the northeastern United States for possible sale.
Dairy Mart, with its corporate offices in Enfield, Conn., is one of the nation's leading
convenience store chains. The company owns, operates and franchises convenience retail
stores in 11 states, a number of which also sell gasoline.
DAIRY MART CONVENIENCE STORES INC. AND
SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
For the third fiscal For the three
fiscal
quarter ended quarters
ended
Nov. 2 Oct. 28 Nov. 2 Oct.
28
1996 1995 1996
1995
Revenues $147,344 $143,492 $444,804
$428,194
Cost of goods sold and
expenses:
Cost of goods sold 106,354 102,878 325,892
309,649 Operating and
administrative
expenses 37,980 38,929 107,324
108,829
Interest expense 2,683 2,359 8,187
6,982
147,017 144,166 441,403
425,460
Income (loss) before
income taxes 327 (674) 3,401
2,734
(Provision for) benefit
from income taxes (134) 269 (1,367)
(1,231)
Net Income (loss) $ 193 $(405) $2,034
$1,503
Weighted average shares
outstanding 4,705 5,582 4,703
5,823
Earnings (loss)
per share: $ 0.04 $(0.07) $0.43
$ 0.26
AMEX TRADING SYMBOLS
CLASS A COMMON STOCK - DMC.A
CLASS B COMMON STOCK - DMC.B
CONTACT: Dairy Mart Convenience Stores, Inc. Gregory G. Landry, 860/741-4516
Golden Books Family Entertainment reports third quarter results
NEW YORK, NY--Dec. 12, 1996--Golden Books Family Entertainment, Inc. (Nasdaq:
GBFE) today reported results for the third quarter ended November 2, 1996.
The Company reported a net loss of $15.5 million, or $0.73 per common share, on
revenues of $89.5 million for the fiscal third quarter ended November 2, 1996. In the
comparable period last year, the company, then Western Publishing Company, reported a
net loss of $37.5 million, or $1.79 per share, on revenues of $105.2 million. For the 1996
nine months, the net loss was $133.7 million, or $6.07 per share, on revenues of $224.4
million, compared with a net loss of $53.8 million, or $2.59 per share, on revenues of
$283.4 million in 1995. The 1996 nine months includes restructuring and other one- time
charges of $96.3 million.
"We are on track with our plans for revitalizing the company," commented Richard E.
Snyder, Chairman and Chief Executive Officer. "The new management team has taken full
control and is moving fast to improve our performance. Our core Children's Publishing
Group has been realigned, and is rebuilding our relationships with key licensers and
retailers. We are well along in our efforts to overhaul our production and supply chain,
which will reduce costs, improve quality and increase efficiency. We are also disposing
of non-strategic assets. These efforts, which are laying the groundwork for long-term
revenue growth and profitability, are not apparent in our third quarter results, and will not
impact the business until 1997. During the fourth quarter, we expect to announce further
developments, including additional restructuring charges as we make our transition to a
profitable family entertainment company."
Golden Books also announced it is changing its fiscal year to end on the last Saturday of
December in each year. As a result, the 1996 fiscal year will end on December 28, 1996.
Fourth quarter results will reflect a two-month period; full year results will be based on an
11-month period.
According to Mr. Snyder, highlights of the quarter included establishment of an
Entertainment Segment around the television and Golden Books Video library and the film
libraries of Broadway Video Entertainment, L.P., which was acquired earlier, and the
consolidation of the editorial and creative groups in New York.
"We still have much to do, but we've been able to move faster than we had expected
toward reinvigorating the company. We feel confident we will soon be in position to
generate profitable growth from one of the world's most respected brands," Snyder said.
Operating Results
Revenue for the Consumer Products Segment, which includes Children's Publishing and
Penn Corporation, for the three months ended November 2, 1996 decreased $15.9 million
to $75.2 million, a 17.5% decrease from the comparable period in 1995. Revenue for the
Consumer Products Segment for the nine months ended November 2, 1996 decreased
$56.7 million to $184.1 million, a 23.6% decrease from the comparable period in 1995.
The decreases resulted from previously announced actions, including the discontinuation
of the category management program at Wal-Mart; volume reductions due to price
increases; continuing decline in sales of the Company's electronic storybooks due to
competitive factors; limited new product introductions and price reductions on certain
mature formats; decline in international sales related to the consumer appeal of certain
licensed characters and continuing sales declines at Penn Corporation.
The Entertainment Segment, which the Company established during the three months ended
November 2, 1996, contributed revenues of $2.5 million.
The Commercial Products Segment revenues for the three months ended November 2,
1996 decreased $2.3 million to $11.8 million, a 16.3% decrease from the comparable
period in 1995. The Commercial Products Segment revenues for the nine months ended
November 2, 1996 decreased $1.4 million to $41.2 million, a 3.5% decrease from the
comparable period in 1995. The decrease for the quarter was due to timing of several
contracts.
Gross profit for the Consumer Products Segment for the three months ended November 2,
1996 decreased $2.6 million to $19.8 million, a 11.6% decrease from the comparable
period in 1995. Gross profit for the Consumer Products Segment for the nine months ended
November 2, 1996 decreased $16.3 million to $47.5 million, a 25.6% decrease from the
comparable period in 1995.
The Entertainment Segment showed a gross profit of $1.6 million for the quarter.
Gross profit for the Commercial Products Segment for three months ended November 2,
1996 decreased $0.5 million to $1.1 million, a 31.3% decrease from the comparable
period in 1995. Gross profit for the Commercial Products Segment for the nine months
ended November 2, 1996 decreased $0.9 million to $4.8 million, a 15.8% decrease from
the comparable period in 1995.
Selling, general and administrative expenses for the three months ended November 2, 1996
decreased $0.9 million to $34.8 million, a 2.5% decrease from the comparable period in
1995. Selling, general and administrative expenses for the nine months ended November 2,
1996 decreased $12.2 million to $83.0 million, a 12.8% decrease from the comparable
period in 1995. The decrease was primarily the result of workforce reductions taken by
the Company in January 1996. In addition, sales, promotion costs, including costs of
corrugated displays, sell sheets and cooperative advertising declined with overall volume
declines.
Golden Books Family Entertainment, Inc. is the leading publisher of children's books in
North America and owns one of the largest libraries of family entertainment copyrights.
The Company creates, publishes and markets entertainment products for children and
families through all media.
CONTACT: Tracey Riese 212-583-6710