InterNet Bankruptcy Library - News for January 24, 1997 (page 2)

Bankruptcy News For January 24,
1997 (page 2)

  1. Singer Reports Fourth Quarter And Full- Year 1996 Results

Singer Reports Fourth Quarter And Full- Year 1996 Results

NEW YORK, NY --January 24, 1997--The Singer Company (SEW:NYSE) today
announced a net loss of $20 million in the fourth quarter of 1996. A major
contributor was a loss of $16.5 million related to the inefficiencies associated
with the company's downsizing of the furniture manufacturing business in the
United States. Further losses were due to weak sales in Europe and the U.S. The
loss compares to net income of $34.3 million, or $.66 per share, in the same
quarter last year. Revenues of $326.6 million in the quarter were well below
$387.2 million in the fourth quarter of 1995. Net income for 1996 was $29
million, or $.56 per share, versus $84.4 million, or $1.64 per share last year.
Revenues were $1,307.9 million, compared to $1,222.5 million a year ago.

The Company has decided to withdraw from the furniture manufacturing business
in the U.S. Singer Furniture was acquired in 1995 as a result of a court ruling, and
was the subject of ongoing litigation throughout most of the year. Singer Furniture
suffered from a declining market share, as well as considerable excess
manufacturing capacity. Two of Singer Furniture's three plants were closed in late
1996, and the Company is initiating discussions to sell the remaining business.

European operations reported a loss in the fourth quarter due to continuing weak
economic conditions in Germany, Spain and Belgium, where losses were
experienced. In response to changing market conditions in Europe, Singer plans to
accelerate the distributorization of its retail operations in Germany, Spain and
Northern Europe, which will be completed in the first quarter. This will allow the
Company to maintain its healthy market share while eliminating the high operating
costs associated with a retail organization. Operations in Southern Europe, with
the exception of Spain, remain satisfactory due to diversification of its consumer
product offerings.

Domestic sales in Brazil were well ahead of a year ago, both for the fourth quarter
and the year. Labor costs continued to rise after a costly two-week strike in the
second quarter. Additionally, excessively high interest rates impacted full-year
earnings, which were below a year ago. Singer is taking steps to recapitalize the
Brazil organization to reduce interest costs and reorganize manufacturing
operations to lower its cost base.

U.S. operations reported a loss in the fourth quarter as sewing machine sales to
mass merchandisers fell despite increased advertising. Margins were below a
year ago due to discounting to meet highly competitive pricing. In response to
competitive pressures, the Company will consolidate its U.S. offices into one
location and aggressively market recently-introduced new sewing products.

Industrial sewing machine earnings declined as the market continued to be
impacted by a trend toward casual wear and the movement to less expensive
industrial machines. In response to the changing nature of the industrial sewing
market, Singer Nikko has entered into an agreement with Shanghai Industrial
Sewing Machine Co. Ltd. of China for the joint production and marketing of
industrial sewing machines to service the growing market in the Far East.

Earnings were strong in Asia, despite political turmoil in countries such as
Pakistan and Sri Lanka where operations were disrupted. Results in India were
below a year ago, and the company responded with a management change in that
country. Although earnings at Singer's Thailand affiliate were strong, results for
the full year were about the same as 1995. Singer continued to demonstrate its
strength in developing markets, as sales doubled from a small base in China. The
company has established a regional head office in Shanghai to further accelerate
growth in China.

Singer outperformed the retail industry in Mexico and achieved sales and
operating earnings well above the same quarter last year.

Results substantially improved for the full year, in spite of extraordinarily high
interest rates.

"This is the first quarter the Company has reported a loss since going public in
1991," said Mr. James H. Ting, Chairman and Chief Executive Officer. "The
unusual events of the last year, in particular the strike in Brazil and the withdrawal
from the furniture business in the U.S., had a significant impact on earnings. The
Company believes it has taken the necessary corrective actions to restore its
operations to their normal levels."

With operations in more than 140 countries, Singer is one of the most widely
recognized and respected brands in the world. The company is the largest
manufacturer and seller of sewing machines and a leading marketer of consumer
durable products for the home.

        THE SINGER COMPANY N.V.            
        CONSOLIDATED STATEMENTS OF INCOME (unaudited)         
             (in millions of US dollars, except per share

                                  Three Months         Three
                               Ended December 31,  Ended
                               December 31,
                                   1996      1995      1996   
                                  ------    ------    ------  
        Revenues                    $ 326.6   $ 387.2 $
        1,307.9 $ 1,222.5 Cost of sales                 227.8
           249.5     911.1     814.0
                                  ------    ------    -------
        Gross profit                   98.8     137.7    
        396.8     408.5 Selling and
          administrative expenses     102.4      89.1    
          319.5     284.9
                                  -------   -------   -------
        Operating income              (3.6)      48.6     
        77.3     123.6
                                  -------   --------  --------
        Other income (expenses):
           Interest, net of related foreign
          exchange adjustments   (23.4)    (22.1)    (80.4)   
           Equity in earnings from
          operating affiliates      2.4       3.9      11.9   
           Royalties and license income 2.4       4.3     
           14.5      17.3 Miscellaneous, net           4.1    
             9.1      13.9      17.4
                                  -------   -------   -------
                                 (14.5)     (4.8)    (40.1)   
                                  -------   -------   -------
        Income before income taxes   (18.1)      43.8     
        37.2     105.1 Income taxes                    1.9    
          9.5       8.2      20.7
                                  -------   -------   -------
        Net income                 $ (20.0)    $ 34.3    $
        29.0    $ 84.4

        Net income per share       $ (0.39)    $ 0.66    $
        0.56    $ 1.64

        Average shares
          outstanding              51.4      51.6      51.4   

        THE SINGER COMPANY N.V.       
        (in millions of US dollars)        

                                             December 31,
                                             December 31,

                 Current assets:                              
                          Cash and cash equivalents           
            $ 223.5     $ 235.8 Accounts receivable, net      
                    595.8       507.7 Inventories             
                          349.7       317.3 Other current
        assets                        13.3         9.3
         Total current assets                    1,182.3    

        Property, plant and equipment, net             340.7  
            310.0 Investment in equity of operating affiliates
           77.7        73.5 Other assets                      
                    137.8       143.4
         Total assets                          $ 1,738.5   

                 Current liabilities:                         
                          Notes and loans payable             
            $ 520.0      $439.4 Accounts payable and accrued
        liabilities   313.6       288.1
         Total current liabilities                 833.6      
        Long-term debt                                 193.1  
            172.2 Other non-current liabilities               
          114.8       110.0 Shareholders' equity              
                    597.0       587.3
         Total liabilities and equity          $ 1,738.5   

CONTACT: The Singer Company Jerry Hostetter, 212/535-3597