STRATOSPHERE ANNOUNCES RESULTS FOR 1996
LAS VEGAS, NV--Feb. 19, 1997-- Stratosphere Corporation (NASDAQ: TOWVQ) today announced that for the fourth-quarter ended
December 29, 1996, the company posted a net loss before the recording of several non-recurring charges of $9.7 million or ($0.17) per
weighted average common share. The non-recurring charges included a non-cash charge of $201.9 million or ($3.46) per share related to the
adoption of SFAS 121, "Accounting for the Impairment of Long-Lived Assets to Be Disposed Of," $4.0 million or ($0.07) per share of pre-
opening expenses, $3.0 million or ($0.05) per share charge for bad debt reserve relating to the receivable due from Bob Stupak for the
servicing of his vacation package customers and $1.0 million or ($0.02) per share for restructuring costs. The net loss after these
non-recurring charges was $219.6 million or ($3.76) per share.
The impairment loss of $201.9 million was measured as the amount by which the carrying value of the long-lived assets exceeded their
estimated fair market value. Further reductions are possible as future cash flow is compared to current estimates and with the anticipated
application of fresh-start reporting upon United States Bankruptcy Court confirmation of a plan of reorganization.
For the fiscal year ended December 29, 1996, net revenues totaled $108.7 million and the net loss before the aforementioned non-recurring
charges was $25.0 million or ($0.43) per weighted average common share. The net loss after the non-recurring charges was $254.8 million
and ($4.38) per share. For the year, such non- recurring charges included a non-cash charge of $201.9 million or ($3.47) per share related to
the adoption of SFAS 121, $23.9 million or ($0.41) per share toward amortization of pre-opening expenses, $3.0 million or ($0.05) per
share charge for bad debt reserve relating to the receivable due from Bob Stupak for the servicing of his vacation package customers and
$1.0 million or ($0.02) per share of restructuring costs. The Company has completed amortization of pre-opening expenses as of December
29, 1996. Net revenues are reflective of a partial year as the Company began operations on April 29, 1996.
As previously announced, on Monday, January 27, 1997, the Company filed a petition under Chapter 11 of the United States Bankruptcy
Code with the United States Bankruptcy Court in Las Vegas, Nevada. The Company does not believe that the bankruptcy filing will, in the
long term, adversely affect daily operations or guest services.
Stratosphere Corporation 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 by 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 CORPORATION AND SUBSIDIARIES
Selected Financial Information
In thousands, except per share data
ended % of ended % of
Consolidated Financial December Revenue December
Statistics 29,1996 29,1996
Net Revenues $43,522 $108,739
Consolidated Income Before 6,075 14.0% 4,124
and Non-Recurring Charges
Depreciation and amortization (5,759) (13.2%) (11,478)
Pre-opening cost amortization (4,022) (9.2%) (23,909)
Impairment of long-lived asset (201,947) (464.0%) (201,947)
Bad debt reserve for related (2,978) (6.8%) (2,978)
Restructuring costs (978) (2.2%) (978)
Operating loss (209,609) (481.6%) (237,166)
Net interest expense (10,019) (23.0%) (17,676)
Net Loss $(219,628) (504.6%) $(254,842)
Quality of (Loss) Earnings Analysis
Loss per share from Operations $(0.17) $(0.43)
Amortization of pre-opening cost (0.07) (0.41)
Impairment of long-lived asset (3.46) (3.47)
Bad debt reserve for related
party receivable (0.05) (0.05)
Restructuring costs (0.02) (0.02)
Loss per share $(3.76) $(4.38)
See notes to consolidated financial statements.
CONTACT: Tom Lettero - (702) 383-5207
Caldor Receives Extension of Exclusivity Period
NORWALK, CONN.--Feb. 19, 1997--The Caldor Corp. (NYSE: CLD) announced today that the U.S. Bankruptcy Court for the Southern
District of New York has granted the Company an extension of the period under which it has the exclusive right to file a plan of
reorganization with the court.
The exclusivity period, which had been scheduled to expire on Feb. 28, 1997, has now been extended through Sept. 1, 1997, with the support
of the Company's Creditors', Bank and Equity Committees. Likewise, the period in which the Company can solicit acceptances for the
reorganization plan has been extended through Oct. 30, 1997.
Warren Feldberg, Chairman and Chief Executive Officer, commented, "This extension will enable Caldor to continue the progress being
made in reviewing our five-year Business Plan with the Creditors', Bank and Equity Committees. We are confident this Plan offers the
greatest potential to restore the Company to long- term profitability and growth. Ultimately, the Business Plan will provide the basis for
Caldor's Plan of Reorganization."
The cornerstone of Caldor's plan, which was presented in December 1996, is a refocusing on its strategies as a full-line, upscale discount
retailer, serving urban/suburban discount markets in the Northeast and Mid-Atlantic. Among other initiatives, the Plan calls for Caldor to
raise customer satisfaction levels; lower everyday pricing and reduce promotional activities; narrow and refocus merchandise assortments;
revamp its advertising programs; and implement operating efficiencies and significant cost reductions.
The Caldor Corp. is the fourth largest discount department store chain in the U.S., with annual sales of approximately $2.7 billion and
approximately 23,000 Associates. It currently operates 161 stores in ten East Coast states. With a strong consumer franchise in high density
urban/suburban markets, Caldor offers a diverse merchandise selection, including both softline and hardline merchandise.
CONTACT: Kekst and Company Wendi Kopsick/Jim Fingeroth, 212/593-2655
Fruehauf Trailer Corporation receives authorization to sell Delphos Axle assets; considers sale of remaining businesses
INDIANAPOLIS, IN--Feb. 19, 1997--Fruehauf Trailer Corporation today announced that it has received Bankruptcy Court authorization to
sell the assets of its Delphos Axle Products Division to Holland Hitch Company of Holland, Michigan. The assets to be sold consist
primarily of the real and personal property and intellectual property used in the Delphos axle business and related inventory. The purchase
price is $14.4 million plus an amount for inventory at the closing date. The Company expects to close the sale transaction by early March.
Fruehauf also announced that it has filed a motion seeking Bankruptcy Court authorization to auction its three remaining businesses. These
businesses include (i) the Sales and Distribution network consisting of 31 Company-owned branches throughout the United States and the
Parts Distribution Center in Grove City, Ohio, (ii) the trailer assembly facilities located in Fort Madison, Iowa and Huntsville, Tennessee
and the use of the Fruehauf trade name in North America, and (iii) the Company's trailer assembly facility in Mexico City, Mexico. The
motion filed with the U.S. Bankruptcy Court for the District of Delaware included related bidding procedures for parties interested in
acquiring one or more of the business units. The assets to be auctioned consist primarily of the real and personal property and intellectual
property used in the businesses and related working capital. Under the proposed procedures, the Company may reject any bid it determines
to be inadequate and decide to retain the assets and reorganize around them.
Mr. Thomas E. Ireland, Chief Executive Officer, commented "The Company has been investigating for some time the potential sale of these
business units. All three of these businesses continue to operate and we are actively engaged in due diligence with several parties interested
in these assets. Furthermore, we hope that the motion filed and the proposed auction procedures will solidify these expressions of interest
and bring an expeditious conclusion to the bankruptcy process. However, we retain the right to withdraw any assets from the auction process
and to reorganize around them if the bids are insufficient."
Fruehauf Trailer Corporation filed a voluntary petition under chapter 11 of the U.S. Bankruptcy Code on October 7, 1996 and currently
operates its businesses as a debtor in possession. Fruehauf is a manufacturer of truck trailers, producing, marketing, and servicing the
industry's widest range of dry freight van, platform, dump and liquid and dry bulk tank trailers. Among the largest suppliers of trailer parts in
North America, Fruehauf products are sold throughout the truck trailer industry's largest Company-owned dealer and authorized independent
dealer network in North America.
CONTACT: Fruehauf Trailer Corporation, Indianapolis Gregory G. Fehr, 317/630-3000 Michael D. Picchi, 317/630-3000
MobileMedia Granted Final Court Approval for $200 Million DIP Facility
RIDGEFIELD PARK, N.J., Feb. 19, 1997 - MobileMedia Corporation (Nasdaq: MBLMQ) announced today that the bankruptcy court
entered a final order approving the Company's debtor-in- possession ("DiP") facility. As previously announced, the Company has entered
into a DiP loan agreement with The Chase Manhattan Bank, as agent, providing for up to $200 million of DiP financing.
On January 30, 1997, the bankruptcy court entered an interim order approving the DiP facility, as a result of which the Company gained
access to $70 million of the DiP funds, subject to certain conditions that have been satisfied, of which it has used $48 million to pay certain
key suppliers, among other things. As a result of today's final order, the Company will gain access to an additional $30 million of DiP funds
for a total of $100 million. The remaining $100 million of DiP funds will become available on May 1, 1997 if the Company delivers a
business plan by April 15, 1997 that is approved by the banks' financial advisor.
One of the conditions for borrowing under the DiP facility was that certain key suppliers of paging equipment shall have entered into
agreements with the Company to sell equipment and provide services. The Company announced on February 10, 1996 that it had received
court approval to pay the pre-petition claims of certain key suppliers and that it had entered into agreements with those suppliers, including
Motorola, the Company's largest supplier of pagers. The Company also said at that time that it has placed orders with Motorola and
Glenayre, the Company's largest supplier of infrastructure equipment, and that Motorola and Glenayre will commence shipping product
Joseph A. Bondi, Chairman - Restructuring, said: "Three weeks after filing for chapter 11 protection we have made considerable progress in
achieving our initial objectives: we have added the strong leadership of Ron Grawert, who recently came on board as Chief Executive
Officer; we now have access to substantial additional capital in the form of DiP financing; and as a result of agreements reached with
Motorola and other key suppliers, we are back on a normal order cycle for pagers and other equipment. Our chapter 11 proceeding is
progressing as expected with no interruption in service to our customers."
MobileMedia is the second largest provider of paging and personal communications services in the United States, offering local, regional
and nationwide coverage to approximately 4.4 million subscribers in all 50 states, Canada and the Caribbean. The Company operates two
one-way nationwide networks and is licensed to operate two nationwide narrowband PCS networks.
The agreement relating to the DiP facility and the agreements with Motorola, Glenayre and the other key suppliers are publicly available
through the bankruptcy court. Statements contained in this release that are not based on historical fact are "forward- looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. The "Risk Factors" and cautionary statements identifying
important factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the
Company's 1995 10-K filing with the Securities and Exchange Commission.
SOURCE MobileMedia Corporation /CONTACT: Krista Grossman, media, 212-484-7760, or Laura Wilker, investors, 201-462-4959,
both for MobileMedia Corporation/
Emerson Radio reports results for third quarter and nine months; results attributable to soft retail market
PARSIPPANY, N.J.--Feb. 19, 1997--Emerson Radio Corp. (AMEX:MSN) today announced results for the third quarter and nine months
ended Dec. 31, 1996.
In announcing the results, Gene Davis, president of Emerson, said, "Results for the third quarter of fiscal 1997 continue to be impacted by the
soft retail market for consumer electronics. While the company has been successful in improving the pricing it receives from its suppliers,
the impact from increased price competition, combined with lower sales volume has negatively affected the company's overall margins and
"Nevertheless, excluding the sales of video products, most of which are the subject of a pre-existing license arrangement, the company's U.S.
gross sales continued to improve over last year. We are continuing our successful cost containment and reduction programs which have
allowed the company to weather this very difficult retail market.
"Additionally, we are continuing to see positive results from our efforts to modify our product mix to emphasize sales of higher margin
products, such as home theater. Although we endured another difficult quarter, we believe the company's performance can favorably be
compared to the overall results of the consumer electronics industry.
"Our current and continuing efforts are dedicated towards further streamlining Emerson and growth through diversification and strategic
alliances that we hope will soon return Emerson to profitability. We are currently in the process of negotiating for additional licensing
"In January 1997, we introduced a new line of home theater systems incorporating licensed proprietary technology at the Consumer
Electronics Show. This new product was well received by retailers at the Show and we expect to start shipping these systems to customers
in the June 1997 quarter. The company's expanded home theater line offers the retailer attractive price points in this newly developed
high-growth market and attractive margin opportunities for Emerson."
In February, 1997, the company announced the execution of a multi-year licensing/supply arrangement for Central and Latin American
markets. The agreement provides for the license of the Emerson Radio trademark for certain consumer electronics products and a sourcing
and inspection service to be provided by the company's Hong Kong subsidiary.
Under the terms of the agreements, the company will receive minimum annual royalties through the life of the agreement and will receive a
separate fee for sourcing and inspection services. Davis said, "This transaction exemplifies Emerson's strategic plan to leverage its assets
and strengths and maximize income while limiting working capital risk.
"The agreement should increase the presence of the Emerson Radio brand in 40 countries in Central and South America and in the
Caribbean, adding to the value of the company's brand name, and provides Emerson with a strategic alliance with a substantial company that
has expertise in serving these markets which, combined, represent over 300 million consumers."
In December 1996, the company completed the acquisition of a controlling interest in Sport Supply Group Inc. ("SSG"), a New York Stock
Exchange company, pursuant to which the company acquired 1,600,000 shares of a newly issued common stock of SSG and five-year
warrants to acquire 1,000,000 shares of SSG common stock at an exercise price of $7.50 per share for the aggregate consideration of $12
million. The company currently owns approximately 27% of the outstanding common stock of SSG, and assuming exercise of all the
warrants, the company would beneficially own approximately 35% of SSG common stock.
Pursuant to the terms of the transaction, the company was granted control of SSG's board of directors, and the company's management is
directly involved in SSG's day-to-day operations. In addition, the company has arranged for foreign trade credit financing of $2 million for
the benefit of SSG.
SSG is the largest direct mail distributor of sporting goods equipment and supplies in the United States. SSG sells its products at margins
significantly higher than the average of Emerson's core business and to an institutional market which does not require the significant
after-market servicing costs typical of Emerson's core business.
Davis continued, "We believe the investment in SSG will be positive for the shareholders of both companies. Emerson benefited by
diversifying from its core business of consumer electronics distribution to another distribution business that offers excellent growth
potential. SSG benefited from the investment by gaining the liquidity needed to cure its then existing loan default with its senior lenders and
amending its secured credit facility on more favorable terms.
"SSG now also has the capital necessary to take advantage of opportunities to increase its business in the institutional sporting goods market
both in the U.S. and internationally and to continue marketing its products featured at the 1996 Olympic Games."
For the third quarter and nine months ended Dec. 31, 1996, the company reported net revenues of $49,628,000 and $151,284,000, as
compared to net revenues of $70,314,000 and $214,720,000 for the same periods last year.
The lower net revenues reported for the current fiscal year reflect the licensing of a portion of the company's video business, which volumes
are no longer reported by the company which, instead reports only license royalties attributable to such sales. The results also reflect a
decline in the company's unit sales volume, primarily in the U.S., in video product categories due to increased price competition, weak
consumer demand, and a soft retail environment for consumer electronics.
Excluding sales of video products, the company's U.S. gross sales increased by approximately 18% and 12% for the third quarter and nine
months ended Dec. 31, 1996, respectively, as compared to the same periods last year. Net revenues benefited in the current fiscal year from
increased sales of microwave ovens attributable to a broader product line, larger size units and increased SKU selection by customers, and
by sales of home theater and car audio products which were not introduced until the second and third quarters of the last fiscal year. Sales
declined in Canada as a result of the company's decision to close its Canadian subsidiary's office and distribution operation in favor of an
The company reported a loss before non-operating charges for the third quarter and nine months ended Dec. 31, 1996, totaling $5,566,000
and $13,598,000 compared to losses of $4,398,000 and $5,673,000 in the same periods last year. Non-operating charges aggregating
$77,000 and $2,811,000 were recorded in the third quarter and nine months ended Dec. 31, 1996 to recognize the costs to restructure the
company's Canadian and U.S. operations, and to write-off the costs related to the proposed but unsuccessful acquisition of International
Jensen Inc. The company is currently in litigation attempting to recover such costs.
Gross profit margins in the current fiscal year were lower on a comparative basis due to lower sales prices (primarily video products), a
higher proportion of close-out sales, inventory write- downs, the allocation of reduced fixed costs over a lower revenue base, and the
recognition of income relating to reduced reserve requirements for sales returns in the prior year. However, profit margins were favorably
impacted by the introduction of higher margin products - home theater and car audio products, and by a reduction in costs associated with
The company's selling, general and administrative expenses decreased by $345,000 and $1,634,000 in the third quarter and nine months
ended Dec. 31, 1996, as compared to the same periods last year. The decrease was attributable to the company's continuing cost reductions
programs in both its U.S. and foreign offices and lower selling expenses attributable to lower sales, partially offset by the reversal of
accounts receivable reserves in the prior year periods due to a higher realization than anticipated on past-due accounts receivable.
Other operating costs and expenses declined by $495,000 and $1,418,000 in the third quarter and nine months ended Dec. 31, 1996, as
compared to the same periods last year, primarily a result of a decrease in after-sale service costs relating to the company's licensing of its
"Emerson(R)" trademark for sale of video products to its largest customer, and a settlement with a vendor on excessive product returns.
This press release contains forward-looking statements with respect to the results of operations and business of the company that involves
risks and uncertainties. Actual results may differ materially from those stated depending upon a number of factors, including but not limited
to product supply and demand, retail consumer electronics market, price competition, success of licensing arrangement, the company's ability
to develop new products and competition from companies with greater resources. Please read Part II, Item 5 -- Other Information in the
company's most recent quarterly report on Form 10-Q on file with the Securities and Exchange Commission for additional risks and
Emerson Radio Corp., founded in 1948, is headquartered in Parsippany, N.J. The company designs and markets, throughout the world, full
lines of televisions and other video products, microwave ovens, audio, car audio, and home theater products.
Emerson's Sport Supply Group, Inc. ("SSG") affiliate, a publicly held company since 1991, headquartered in Farmers Branch, Texas, is
considered a leading direct marketer of sporting goods and equipment to serve the institutional market. SSG serves primarily schools,
colleges, universities, government agencies, camps and youth organizations. It markets its products through specifically targeted direct mail
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Nine Months Ended Three Months Ended
Dec. 31, Dec. 31,
1996 1995 1996 1995
Net revenues $151,284 $214,720 $49,628
Cost and expenses:
Cost of sales 145,354 198,184 48,818
Other operating costs
and expenses 2,111 3,529 488
Selling, general &
administrative expenses 14,698 16,332 4,993
Restructuring and other
nonrecurring charges 2,811 - 77
164,974 218,045 54,376 73,812
Operating loss (13,690) (3,325) (4,748)
Interest expense 2,525 2,322 867
Loss before income taxes (16,215) (5,647) (5,615)
Provision (benefit) for
income taxes 194 26 28
Net loss $(16,409) $(5,673) $(5,643)
Net loss per common
share $ (.42) $ (.15) $ (.14) $
Weighted average number
of common shares
outstanding 40,281 40,253 40,295
CONTACT: Emerson Radio Corp., Parsippany Eugene I. Davis/John Walker/Eddie Rishty 201/884-5800