50-OFF Stores Announces Operating Results for 13 and 39 Week Periods
SAN ANTONIO, TX--Jan. 10, 1997--San Antonio-based 50-OFF Stores, Inc., currently operating in a Chapter 11
Bankruptcy proceeding, announced today its results for the 13 and 39 weeks ended Nov. 1, 1996.
For the 39 week period ended Nov. 1, 1996, the company reported the following results: net sales of $91.2 million (down
27.0 percent from the prior year's $124.9 million); a loss before income taxes and reorganization items of $12.7 million
(including an approximately $4.1 million write down of inventories related to certain store liquidations); a loss before
income taxes of $25.4 million; and a net loss of $25.6 million, $2.10 per common share (down from the prior year's $2.4
million loss, $0.20 per common share). Results for the current 39 week period reflect the operations of 94.0 weighted
average stores (105.1 for the prior year's comparable period) and a 23.1 percent decrease in comparable store sales.
For the 13 week period ended Nov. 1, 1996, the company reported the following results: net sales of $27.1 million (down
28.0 percent from the prior year's $37.6 million); a loss before income taxes and reorganization items of $2.8 million; a loss
before income taxes of $15.5 million; and a net loss of $15.7 million, $1.28 per common share (down from the prior year's
$1.1 million loss, $0.09 per common share). Results for the current 13 week period reflect the operations of 81.1 weighted
average stores (102.1 for the prior year's comparable period) and a 32.8 percent decrease in comparable store sales (due
primarily to the company's inability to acquire and maintain adequate inventories for its stores).
As previously reported, on Oct. 9, 1996 the company and its significant subsidiaries filed petitions for protection under
Chapter 11 of the Bankruptcy Code. While management believed it had developed an appropriate business plan for the
company, the company was unable to secure the resources required to implement its plan and to effect the changes believed
necessary to improve operations and reverse the company's disappointing operating results without the protections afforded
under Chapter 11.
On Nov. 18, 1996, the company, with the approval of the Bankruptcy Court, entered into a credit agreement with a major
financial institution providing the company with a line of credit through November 1997 of up to $15,000,000, including
letters of credit. Borrowings under the line are limited to a borrowing base equal to a percentage of eligible inventory at
cost: Aug. 15 through Dec. 15, 65 percent; and Dec. 16 through Aug. 14, 60 percent. Interest under the line is charged on
funds borrowed at the annualized yield on 30-day commercial paper (currently 5.95 percent) plus 3 percent. The line of
credit is secured by inventory and other available assets. The credit agreement contains various restrictive covenants. The
agreement also contains minimum gross margin, minimum EBITDA, minimum inventory, minimum sales, minimum trade
support and maximum capital expenditure financial covenants. At Jan. 10, 1997, the company had approximately $3,037,000
outstanding under the credit facility and had approximately $2,202,000 available for use.
The company will continue to manage its affairs and operate its business under Chapter 11 as a debtor in possession while a
plan of reorganization is formulated. The company hopes to file such a plan before its fiscal year end, Jan. 30, 1997.
Through the reorganization under Chapter 11, management intends to restructure the operations and capitalization of the
company in order to implement its plan and strengthen the company's financial position and operating performance.
The company's ability to successfully reorganize and continue as a going concern will be affected by a number of factors,
including, but not limited to, uncertainty regarding the eventual outcome of the bankruptcy case, the degree of success in
reversing the company's recent business trends and the ability to alleviate trade credit concerns and restore merchandise
flow to adequate levels. While management believes that the recent closing of stores and the implementation of expense cuts
commensurate with the down-sizing of the total stores in operation (to 43 stores) facilitates its efforts to improve the
company's financial performance, no assurance can be given that the company will be successful in its continuing efforts to
reverse recent business trends and return to profitability.
Because of uncertainty regarding the outcome of the bankruptcy case and the effect of any bankruptcy reorganization plan on
the interest of the company's creditors and stockholders, the ultimate impact of the bankruptcy case on the company's results
of operations and financial position cannot be determined. The company is also unable to predict the value, if any, to be
realized by stockholders in the bankruptcy case whether or not a successful reorganization is achieved. For this reason, any
investment in the company's common stock should be considered speculative, and investors should be prepared to lose their
entire investment.
CONTACT: Media: Charles Fuhrmann, CEO, 210/804-4904 or Creditor: 210/804-5357
PBGC Moves to Take Over Anchor Glass Pensions
WASHINGTON, DC - Jan. 10, 1997 - The Pension Benefit Guaranty Corporation (PBGC) is taking action to protect the
underfunded pensions of 15,600 workers and retirees of the Anchor Glass Container Corporation which is being sold.
"Pensions must he addressed during corporate restructuring; and we intend to take all necessary steps to keep workers'
pensions and the insurance program strong," said PBGC Executive Director Martin Slate.
PBGC will ask the U.S. District Court in Brooklyn, NY next week to terminate three Anchor Glass pension plans,
underfunded by about $185 million, effective January 9, 1997, and to have the federal pension insurance agency named
trustee.
The glass container manufacturer, based in Tampa, FL, with facilities in 11 states, filed for Chapter 11 protection last
September in the U.S. Bankruptcy Court in Wilmington, DE, and is in the process of selling its assets. PBGC's analysis is
that the buyer assuming most of the company cannot support the pensions and completion of the sale as now proposed would
pose a risk to the pension insurance program.
The sale would remove Anchor Glass from the control of its Mexican parent, Vitro, Sociedad Anonima. Under pension law,
the plan sponsor as well as other companies within a corporate group are responsible for pension liabilities. With district
court approval of PBGC's request to terminate and take over the Anchor Glass pension plans, Vitro, which has a number of
U.S. facilities, will remain liable for the pensions.
While in bankruptcy, Vitro has not supported Anchor's liquidity needs, including funding contributions to the pension plans.
PBGC has an $18.9 million lien on a Vitro facility in Laredo, Texas, Vitro Packaging, to cover two pension funding
payments that Anchor Glass has failed to make. PBGC has been and continues to negotiate with Vitro for protections for the
pensions. However, thus far, those efforts have not been successful.
The vast majority of the workers and retirees are fully covered by PBGC's guarantee. The maximum guarantee for plans that
terminate in 1997 is $2,761.36 per month, approximately $33,000 per year, for persons retiring at age 65 or later. The
guarantee is lower for those who retire early. Workers and retirees do not need to take any action.
PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 to guarantee payment of basic
pension benefits earned by workers. It covers nearly 42 million American workers and retirees participating in about
55,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations
are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.
SOURCE Pension Benefit Guaranty Corporation /CONTACT: Judith Welles, director, communications & public affairs, or
Andy Gasparich, public affairs officer, both of Pension Benefit Guaranty, 202-326-4040/
Swift Transportation Co. Inc. signs letter of intent to acquire assets of Direct Transit Inc.
PHOENIX, AZ --Jan. 10, 1997--Swift Transportation Co. Inc. (NASDAQ/NMS:SWFT) Friday announced that it has signed
a letter of intent to acquire certain assets of Direct Transit Inc. ("DTI"), a Debtor-In-Possession in United States Bankruptcy
Court.
DTI is a dry van carrier based in North Sioux City, S.D., predominantly operating in the Eastern two-thirds of the United
States.
Under terms of this letter, Swift will acquire the inventory, equipment and miscellaneous assets including intellectual
property of DTI. In addition, Swift will negotiate with DTI's lessors of revenue equipment to enter new lease agreements or
to purchase such equipment, at agreed upon values. Finally, Swift and DTI have agreed to the terms of a proposed interim
management agreement pending the closing of the transaction.
This transaction is subject to Swift's due diligence, approval of a definitive agreement by the board of directors of Swift,
DTI's creditors, and the United States Bankruptcy Court, and other customary closing conditions.
As a result of the manpower resources expected to be utilized in the due diligence effort, Swift will delay the customary
timing for release of its 1996 year end results until Jan. 31, 1997.
Swift is the holding company for Swift Transportation Co. Inc., a truckload carrier headquartered in Phoenix. Swift is one
of the largest truckload carriers in the country with regional operations throughout the continental United States.
CONTACT: Swift Transportation Co. Inc., Phoenix Jerry Moyes or Bill Riley, 602/269-9700
Commercial Creditors and Tort Claimants Reach Agreement on Dow Corning Bankruptcy Plan
WASHINGTON, DC - Jan. 10, 1997 - The Commercial Creditors' Committee and the Tort Claimants' Committee of Dow
Corning Corporation today announced that they have reached agreement on the principal terms and conditions of a chapter
11 Plan of Reorganization in the Dow Corning chapter 11 case. The two committees today filed a motion with the U.S.
Bankruptcy Court in Bay City, Michigan, requesting permission to file their joint plan of reorganization. The Commercial
Committee represents all of Dow Corning's financial and trade creditors; the Tort Committee represents women with breast
implants, as well as others who have asserted injuries from medical implants.
"The Joint Committee motion represents a giant step forward in fairly and promptly resolving this 18 month bankruptcy
case," said Sybil Niden Goldrich, a member of the Tort Committee negotiating team. "The Plan is designed to permit Dow
Corning to emerge from bankruptcy, pay its commercial debt, and make a reasonable initial payment to implant recipients
within the next 12 months, while preserving the rights of the Company and implant claimants to fully litigate the issue of
breast implants and disease."
"We are asking the Bankruptcy Court to let us file a Plan of Reorganization that is the product of hundreds of hours of
negotiations between two committees," said Frederick Moryl of Banque Nationale de Paris, the Commercial Committee's
chairman. "The joint plan is designed to achieve an overall consensus in the case but, if necessary, can move forward even
without the support of Dow Corning or its shareholders."
The committees' motion criticizes the plan recently filed by Dow Corning, characterizing it as a "last minute response" to the
committees' anticipated filing of their joint motion. "Dow Corning's plan is not based on meaningful negotiations over the
treatment of tort claims with either committee and will not win the support of the company's creditors," Moryl said. "Dow
Corning's plan is not a compromise plan, it just adopts the litigation positions that Dow Corning has taken throughout this
case. Unless the committees are permitted to present their plan, the bankruptcy is likely to remain bogged down in litigation
and endless delays."
While the terms of the plan of reorganization that the committees seek to file are not yet public, the committees' motion
describes the joint plan's principal terms:
- A Claims Trust will be established to resolve and pay all product liability claims against Dow Corning. The Trust will be
funded initially with $1.75 billion in cash and investment grade securities, and subsequently with an amount of stock based
upon Dow Corning's liability, if any, for disease claims.
- The initial funding of the Claims Trust is intended to be sufficient to satisfy Dow Corning's obligations for product liability
claims other than disease claims and to cover the administrative costs of the Trust. Such claims include claims for
disfigurement and local complications caused by the rupture and surgical removal of many thousands of breast implants, as
well as claims for inflammation and disability caused by other medical implants manufactured by Dow Corning.
- The joint plan provides an innovative means to resolve, after emergence of the company from chapter 11, the issue of
whether breast implants cause disease by way of thirty trials of breast implant disease claims held before juries around the
country. Based on the outcomes of these thirty trials, Dow Corning's liability, if any, for disease claims will be measured
through a fair and equitable, statistically sound method set out in the plan. If, based upon these trials, it is determined that
Dow Corning has liability for disease claims, Dow Corning will be committed to make a contribution of up to 95% of its
common stock to the Claims Trust to the extent of the value of such claims.
- The joint plan also will provide approximately $1.2 billion in cash and investment grade debt securities to compensate
commercial claims, which (as under Dow Corning's recently filed plan) will be paid in full with interest.
The committees' motion is expected to be heard by the Bankruptcy Court in the spring of 1997.
SOURCE Commercial Creditors' Committee; Tort Claimants' Committee /CONTACT: Suzanne Turner or Kristin Hyde,
202-745-0707, both of Fenton Communications for the Commercial Creditors' Committee and the Tort Claimants'
Committee/