Grossman's files motion to protect
NOL's by requiring notification procedures before certain stock
and debt trading
CANTON, Mass.--May 7, 1997--
Grossman's Inc. (Nasdaq-GROS) and two subsidiaries filed a
motion on May 6, 1997 with the U.S. Bankruptcy Court for the
District of Delaware in their pending Chapter 11 cases. The
Motion asks the Court to establish procedures requiring prior
written notice to the Debtors by any party or group proposing to
(i) acquire shares of Grossman's stock resulting in a more than
1,350,000 share block, or (ii) acquire prepetition unsecured
claims against the Debtors resulting in a more than $5 million
block of such claims. The procedures would also require such
notice by any party or group proposing to acquire or dispose of
the Debtors' stock or claims if such party or group hold or are
acquiring both stock and claims. If the Debtors object during a
30 day period after such notice, the transaction would become
effective only upon Court approval.
Grossman's believes that this relief is necessary to protect
its net operating loss carryforwards (approximately $300 million
at December 31, 1996), which they believe will be critical to
their ability to reorganize.
The Motion has been set for a hearing on May 14, 1997 before
the Delaware bankruptcy court.
Grossman's Inc. operates 15 stores under the name Contractors'
Warehouse in California, Indiana, Kentucky and Ohio, and 28
stores under the name Mr. 2nd's Bargain Outlet in Massachusetts,
New York and Rhode Island. -0-
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. Important factors, beyond Grossman's control, that could
cause actual results to differ materially from those in the
forward- looking statements include, but are not limited to, the
need for approvals by the Bankruptcy Court, competition,
stability of customer demand, and the sufficiency of its capital
resources. Undue reliance should not be placed on these
forward-looking statements, which speak only as of the date
hereof. Grossman's undertakes no obligation to publicly release
revisions to these forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Grossman's Inc. press releases and public filings can be
accessed on the Internet through Business Wire's Home Page:
Mr. 2nd's Bargain Outlet maintains a web site for product
information, store locations and feedback:
CONTACT: Grossman's Inc. Steven L. Shapiro, 617-830-4020
Marvel & Toy Biz File Joint Plan of
Reorganization for Marvel
NEW YORK, NY - May 7, 1997 - Marvel
Entertainment Group, Inc. (NYSE: MRV) and Toy Biz, Inc.
(NYSE: TBZ) today filed a joint Plan of Reorganization for Marvel
in the U.S. Bankruptcy Court of Delaware as described in the
letter of intent signed by the companies and announced last week.
Consummation of the plan is subject to, among other things,
approval by the Marvel and Toy Biz boards, negotiation and
execution of definitive documentation, approval by the bankruptcy
court, and approval by Toy Biz's shareholders.
SOURCE Marvel Entertainment Group, Inc.; Toy Biz, Inc.
/CONTACT: Gary Fishman of The Hudson Stone Group, 212-685- 6890,
for Marvel; or Diane Perry, 212-704-8293 or Joe Kist,
212-704-8239, both of Edelman Financial, for Toy Biz/
Massimo da Milano, Inc. Announces Plan
to Emerge from Chapter XI
DALLAS, TX - May 7, 1997 - Massimo da Milano, Inc., href="chap11.italian.html">The Italian Bakery & Cafe,
(OTC Bulletin Board: MDMI) ("Massimo's"), announces
plan to emerge from Chapter XI within the next 60 days. As part
of its reorganization plan, Massimo's closed its unprofitable
locations and as a result is expecting a profit for 1997. The
turn around of the Company has been spearheaded by Dana C.
Verrill, who was the founder and CEO of Spectrum Information
Technologies, Inc., a publicly held high-tech company, which
approached $100,000,000 in sales during the 1980's.
Prior to Massimo's Bankruptcy, the Company had losses in
excess of $1 million as a result of an overly aggressive
expansion program and mismanagement. As part of its
reorganization plan, Massimo's has paid in excess of $150,000 of
its $350,000 debt owed to the IRS, and has paid $125,000 owed to
the State of Texas for unpaid taxes. Massimo's has brought in new
restaurant management and has entered into agreements with two
large bakery customers which should substantially increase
revenues. The Company also has expanded in the following markets:
Tulsa, Okla., Oklahoma City, Okla., Austin, San Antonio, Houston,
California and Colorado. This new coverage area will allow
Massimo's Bakery to continue serving its high quality specialty
breads, cakes and pastries to a rapidly growing group of
wholesale customers, including restaurants and hotels. Along with
its increased coverage area, Massimo's has expanded its sales
force in the Dallas/Ft. Worth metroplex and opened a sales office
Massimo's recent progress is in sharp contrast to 1994 and
1995, when its net loss was over $2,000,000, and in 1996, when
the Company had four restaurants which produced a combined loss
in excess of $160,000. As a result of these Company changes, in
less than 18 months all unprofitable operations have been
eliminated and the Company is now efficient and profitable. The
bakery, with the addition of $50,000 in new equipment, will be
able to substantially increase production. Two full-time
marketing representatives have been hired and Massimo's is
negotiating with an experienced food broker who will introduce
the Corporation to national grocery chains in Texas, Oklahoma,
Arkansas, Louisiana, and California. Beginning in the third
quarter of 1997, the Company plans to explore a strategy of
opening retail bakery outlets, to be strategically located
throughout the Dallas Fort Worth metroplex. Rather than investing
the $500,000+ to open a restaurant operation, as the Company has
in the past, a retail bakery outlet could be opened for less than
$20,000. Through these outlets, the Company plans to retail its
diverse and quality Bakery product line. Eventually, the Company
can expand its food operation through these same retail outlets
by offering packaged, fresh or frozen, ready to serve foods
prepared at its Commissary facility.
Massimo's unaudited sales for the first quarter of 1997 were
approximately $500,000. Massimo's new marketing strategy which
began this April should result in increased sales during the
second half of 1997. In addition, Massimo's should have a NOL of
Massimo's, The Italian Bakery & Cafe, has a wholesale
bakery operation with over 300 customers in Dallas, TX and
nationally, as well as a restaurant and catering operation
located at 5519 W. Lovers Lane, Dallas, TX. Massimo's also has an
affiliated restaurant operation in Zurich, Switzerland.
SOURCE Massimo da Milano, Inc., The Italian Bakery & Cafe
/CONTACT: Crawford Shaw of Massimo da Milano, Inc., The Italian
Bakery & Cafe, 214-637-6881/
CHILDREN'S COMPREHENSIVE SERVICES ANNOUNCES APPROVAL OF
BANKRUPTCY COURT FOR SALE OF VENDELL
HEALTHCARE, INC. ASSETS TO CCS
MURFREESBORO, Tenn.--May 7, 1997--William J Ballard, Chairman
and Chief Executive Officer of Children's Comprehensive Services,
Inc. ("CCS") (Nasdaq/NM: KIDS), today announced that
the United States Bankruptcy Court for the Middle District of
Tennessee has approved the sale by Vendell
Healthcare, Inc. and its subsidiaries ("Vendell")
of substantially all of their assets to CCS. Vendell and two of
its subsidiaries commenced Chapter 11 proceedings as part of the
negotiated sale to CCS, and Bankruptcy Court approval was a
condition to closing the sale. While other significant conditions
must be satisfied prior to closing, the Bankruptcy Court approval
represents a major step in the process. The parties hope to close
the transaction during the next 30 to 45 days.
On February 27, 1997, CCS entered into an Asset Purchase
Agreement with Vendell to purchase the assets of Vendell for
approximately $24 million. The purchase price includes $16
million in cash and $8 million in shares of CCS common stock.
Based in Nashville, Tennessee, Vendell currently operates eight
residential facilities and 17 day treatment facilities. In the
proposed transaction, CCS will acquire seven of the residential
facilities, with a total of 564 licensed beds in approximately
390,000 square feet, located on 220 acres of land. In addition,
CCS will acquire a total of 13 of the day treatment facilities
that are associated with the seven residential facilities being
acquired. The facilities and day treatment centers are located in
seven states: Arkansas, Florida, Kentucky, Michigan, Montana,
Texas and Utah.
Mr. Ballard commented, "We are very pleased to announce
the approval by the Bankruptcy Court because of the substantial
progress it signals toward consummation of the Vendell
acquisition. Approval of the sale was a major hurdle that needed
to be cleared in order to close the transaction. While
substantial conditions still remain relating to regulatory
approval of the transfer of the facilities, we are working
diligently in concert with state and federal regulatory
authorities to prepare for the transfer of control of the Vendell
To take advantage of the new "safe harbor"
provisions of the Private Securities Litigation Reform Act of
1995, you are hereby cautioned that this release contains
forward-looking statements that are based upon current
expectations and involve a number of risks and uncertainties.
Actual operations and results may differ materially from those
expressed in the forward-looking statements made by the Company.
Please refer to CCS~s filings with the Securities and Exchange
Commission for additional information.
Children's Comprehensive Services, based in Murfreesboro,
Tennessee, provides, either directly or through management
contracts, education and treatment services for at-risk and
troubled youth. It currently offers these services through the
operation and management of specialized education programs and
both open and secured residential treatment centers for local,
state and federal government agencies in Alabama, California,
Florida, Louisiana, Ohio, Tennessee and Texas.
CONTACT: Children's Comprehensive Services, Inc., Murfreesboro
Donald B. Whitfield, 615/896-3100
AmeriQuest Announces Second Quarter
Results; Reports Loss of $33.1 Million Including Restructuring
HOLLYWOOD, Fla., May 7, 1997 - AmeriQuest Technologies,Inc.
(NYSE: AQS) Hollywood, Florida announced financial results for
the second fiscal quarter ended March 31, 1997. Revenues for the
quarter decreased to $75,295,000 compared to $108,499,000 in the
same quarter last year.
Net loss for the quarter ended March 31, 1997 was $33,101,000
compared to a net loss of $5,714,000 in the same quarter last
year. The loss for the March 1997 quarter includes restructuring
charges and provisions relating to the restructuring of
$25,000,000.00 as well as $2,000,000.00 of restructuring costs
and provisions recorded earlier in operating results. Loss per
share was $ (0.49) for the quarter ended March 31, 1997, compared
to a net loss of $ (0.20) per share for the same period in 1996.
Revenues for the quarter decreased primarily due to the highly
competitive market situation of the Company in the distribution
and export businesses.
As previously disclosed, the Company has embarked on a
wide-ranging restructuring plan encompassing headcount reductions
and facility closures over the next several months with the goal
of focusing on and strengthening the activities of its Advanced
Systems Group (ASG), based in Horsham, Pennsylvania. As part of
the plan, the standard distribution and export businesses will be
closed. To achieve profitability for ASG on a stand-alone basis,
the Company estimates that an increase in sales of between 25%
and 40% would be required. No assurance can be given that such a
sales increase will occur or that ASG will be profitable on a
stand-alone basis. As part of the restructuring effort, the
Company is currently reviewing offers from prospective purchasers
to buy CMS Enhancements, Inc. a company subsidiary located in
Costa Mesa, California.
On May 6, 1997 the Company issued 300,000 shares of its Series
H Cumulative Convertible Preferred Stock to Computer 2000, Inc.,
in return for a $30.0 million capital infusion. The Series H
Cumulative Convertible Preferred shall be convertible into AQS
Common Stock subject to shareholder approval at a conversion
price of $0.715 per share of Common Stock. The convertible
preferred shares carry a 7% per annum cumulative dividend right,
payable at the choice of AmeriQuest in either shares or cash (or
a combination of shares and cash) until June 30, 1998. Thereafter
such dividends must be paid in cash. AmeriQuest used the proceeds
received to partially pay down the Company's existing bank lines.
All of the Company's bank lines are guaranteed by Computer 2000
AG. This infusion fulfilled a previously announced commitment
from Computer 2000 AG to make such an investment. Computer 2000
AG has committed to continue the guarantee of the Company's bank
lines of $66.0 million through September 30, 1997. There is
presently no commitment from Computer 2000 AG for an additional
capital infusion or for an extension of the guarantee.
This press release contains forward-looking statements that
involve a number of risks and uncertainties. Among other factors
that could cause actual results to differ materially are general
economic and business conditions, the rate of growth in the
computer industry, competitive factors and pricing pressures,
changes in product mix, inventory risks due to shifts in market
demand, and the effect of the decision to close the standard
distribution and export businesses on the Company's vendor and
customer relationships. AmeriQuest is a distributor of computer
technology solutions primarily to "value-added"
resellers, systems integrators, distributors and computer
Selected income Statement Data (Dollars in thousands)
ended March 31,
Net sales $75,295
$108,499 Net inc./(loss)
$(33,101) $(5,714) Earnings/(loss)
per share $ (0.49) $ (0.20) Avg .
SOURCE AmeriQuest Technologies Inc./CONTACT: Peter Quill,
Director of Marketing, 954-967-2397, ext. 1575, or fax,
954-986-9164, or e-mail, pquillameriquest.com; or Financial
Contact, Holger Heims, Chief Financial Officer, 954-967-2397,
ext. 7712, or fax, 954-989-9206, or e-mail, hheimsameriquest.com,
both of AmeriQuest Technologies Inc./
Sun Television and Appliances Reports
COLUMBUS, Ohio, May 7, 1997 - Sun Television and Appliances,
Inc. (Nasdaq: SNTV) today reported its fiscal 1997 year-end
results and announced an aggressive plan, elements of which have
been implemented since a turnaround team, headed by R. Carter
Pate, was installed in February. The turnaround plan includes a
number of strategic initiatives and organizational changes aimed
at stemming declining same store sales, maintaining market share
and increasing liquidity.
For the fiscal year ended March 1, 1997, Sun reported a net
loss of ($45.3) million, or ($2.60) per share, reflecting
non-recurring charges of $16.7 million for restructuring as the
Company begins implementation of a new business strategy. For the
1997 fiscal year, the Company reported revenues of $683.4
million. These results compare with net earnings of $6.6 million,
or $0.38 per share, on revenues of $806.2 million for the
comparable 1996 period.
For the three months ended March 1, 1997, the Company reported
a net loss of ($34.1) million, or ($1.95) per share, compared
with a net income of $2.8 million, or $0.16 per share, for the
comparable three-month period in 1996. Revenues for the 1997
fourth quarter were $197.4 million, compared with $255.8 million
for the comparable 1996 period.
Comparable store sales for the fiscal year 1997 were down
22.4% from fiscal year 1996. EBITDA for fiscal years 1997 and
1996 were ($39.8) million and $23.8 million, respectively. The
Company's gross margin, excluding closed stores, for fiscal year
1997 was 22.8%, as opposed to 24.9% for fiscal year 1996.
Comparable store sales for the fourth quarter decreased 26.6%
from the same period of the previous fiscal year. EBITDA for the
1997 and 1996 fourth quarters were ($31.6) million and $8.1
million respectively. For the fourth quarter, gross margin was
16%, compared with 23.6% for the fourth quarter of the previous
year. Margins were negatively impacted in part by the liquidation
of inventories associated with store closings.
In January 1997, the Company announced that it would close
nine under- performing stores, including stores in Dayton, Ohio;
Buffalo and Rochester, New York, and eliminate more than 1,000
full-time positions as a result of re- engineering job
In announcing its year-end results, the Company said that
James R. Copitzky, president and chief executive officer, and
Steven A. Martin, executive vice president, treasurer and chief
financial officer, have resigned effective immediately. The
Company said that Mr. Copitzky and Mr. Martin left to pursue
other interests. Mr. Copitzky also resigned his position as a
member of the Board of Directors.
R. Carter Pate, a managing partner with Price Waterhouse
Business Turnaround Services who joined Sun in February as
chairman to oversee the Company's turnaround, will assume Mr.
Copitzky's duties as chief executive officer on an interim basis.
John J. Lynch, the Company's controller, will serve as CFO until
a successor to Mr. Martin is found. The Company said that it is
well along in its search for a permanent CFO and plans to
initiate a search for a permanent president and CEO shortly.
Mr. Pate said the Company's new business strategy is aimed at
boosting sales, maintaining market share and reinforcing Sun's
role as a leading consumer electronics retailer in its key
regions, which include Ohio, Pennsylvania, West Virginia and
Kentucky. Elements of that strategy, many of which have recently
been implemented, include:
- Reinforcing the Company's identity as the low-price retailer
of consumer electronics through an aggressive new marketing and
promotional plan that will be introduced in test market within
the next 10 days.
- Instituting dramatic changes in customer service in the
areas of employee training and development, in-store sales and
service, home delivery and repair.
- Revamping and relaying stores to create a compelling
- Improving operational efficiencies through new point-of-sale
information systems, improved inventory controls and continued
re-engineering of corporate and administrative functions.
- Renewing Sun's focus on key local markets in Ohio,
Pennsylvania, West Virginia and Kentucky.
"Despite declining same store sales and increased
competition from national competitors, Sun continues to have
strong, positive market share indicators," said Mr. Pate.
"Implementation of this strategy capitalizes on Sun TV's
long-standing strength as a low-price leader."
Mr. Pate said that after a period of significant market share
declines following the incursion of Circuit City and Best Buy
stores into key Sun markets, the Company's market share has
stabilized. Moreover, he said, "We are establishing the
fundamentals necessary for a successful turnaround.
"Our stores continue to rank high in customer surveys as
a low-cost destination for consumer electronics and
Mr. Pate said that since joining the Company three months ago,
he has - among other measures - implemented steps to improve
customer service, particularly in the stores, in the delivery
process and in the Company's customer service unit. Mr. Pate said
significant improvements in the Company's customer service
functions are a key component in the Company's business strategy.
As a first step, the Company took over customer delivery services
from an outside vendor, which will enable the Company to lower
its costs and guarantee home delivery within a two-to-four-hour
window. The Company has also initiated a massive employee
re-training and development program and is working with its
vendors to guarantee customers a 30-day turnaround on all product
"In less than three months, we have commissioned numerous
marketing studies and market analyses to isolate the problems and
determine the best strategy for confronting the general lack of
excitement in the consumer electronics industry and continued
cautious consumer spending. What that has shown us is that there
are ways for the Company to solidify its market position and
improve its operating results," Mr. Pate said.
In another step to solidify its customer focus, Mr. Pate
announced the appointment of Dennis L. May, currently vice
president of sales and marketing, as executive vice president and
chief operating officer. Mr. May, who started working at Sun
while still in college, and has held a number of marketing and
management positions with the Company since 1989, will have
responsibility for day-to-day operations of the Company.
"We have a dedicated workforce in place, long-standing
relationships with vendors that provide for joint marketing
programs on many products, and a regional focus that allows Sun
to respond quickly to local market changes in a way that no
national retailer can," Mr. Pate said. "I am confident
that, with our turnaround team in place and aggressive new
strategies being implemented, we are well positioned to meet the
challenges and demands of today's marketplace."
Sun Television and Appliance, Inc. employs approximately 3,300
in 41 consumer electronic and appliance stores in Ohio,
Pennsylvania, West Virginia, and Kentucky and in its corporate
offices and distribution center in Columbus.
Statements made in this press release which are not historical
facts may be deemed forward-looking statements, and, as such, are
subject to certain risks and uncertainties. It is important to
note that the Company's actual results could differ materially
from those projected in such forward-looking statements. Factors
that could cause actual results to differ materially include, but
are not limited to, the following: continuing competitive
pressure from existing as well as new competitors; continued
weakness in consumer demand for the products offered by the
Company; the Company's inability to stabilize sales; further
deterioration of the Company's financial performance; adverse
change in the Company's ongoing business relationships with
vendors and suppliers relative to product shipments and credit
terms, or with the Company's lenders affecting the terms and
availability of credit; and adverse economic conditions.
Additional information concerning factors that would cause actual
results to differ materially from those in the forward- looking
statement is contained from time to time in the Company's SEC
filings, including but not limited to the Company's report on
Form 10-K for the year ended March 2, 1996; and the Company's
report on Form 10-Q for the quarters ended June 1, 1996; August
31, 1996 and November 3, 1996. Copies of these filings may be
obtained by contacting the Company or the SEC.
Sun Television and Appliances, Inc.
Statement of Operations
(In Thousands Except Per-Share Amounts)
For the Quarter Ended For the
March 1, March 2, March 1,
1997 1996 1997
Net sales and service revenues $197,388 $255,834 $683,386
Cost of sales 165,890 195,349 533,672
Gross profit 31,498 60,485 149,714
Selling, general and administrative
expense 47,896 54,502 179,106
Restructure charge 14,723 -- 16,723
Amortization of intangibles 123 123 493
(Loss) income from operations (31,244) 5,860 (46,608)
Interest income 140 107 460
Interest expense (1,821) (1,332) (5,537)
Refinancing costs (2,491) -- (2,491)
Other (709) -- (709)
(Loss) income before income taxes(36,125) 4,635 (54,885)
Income tax (benefit) expense (2,002) 1,877 (9,544)
Net (Loss) income ($34,123) $2,758 ($45,341)
Net (Loss) income per share ($1.95) $.16 ($2.60)
Weighted average number of common
and common equivalent shares 17,495 17,404 17,462
Sun Television and Appliances, Inc.
Condensed Balance Sheets
Cash and cash equivalents $1,828
Income Tax Receivable 14,619
Merchandise inventory 97,368
Other current assets 14,367
Total current assets 139,779
Property and equipment, net 100,267
Deferred income taxes 3,114
Intangible assets 14,553
Total assets $257,713
Liabilities and Stockholders' equity
Accounts payable $28,607
Current portion of deferred revenue 16,033
Other liabilities 31,604
Total current liabilities 76,244
Capitalized lease obligations 14,358
Long-term debt 41,007
Deferred revenues, noncurrent 18,021
Stockholders' equity 108,083
Total liabilities and stockholders' equity $257,713
SOURCE Sun Television and Appliances, Inc./CONTACT: Media:
Sandra Sternberg or Patrick Lee of Sitrick And Company,
614-492-5602 or 310-788-2850; or Analysts and Investors: Melodye
R. Demastus of Melrose Consulting, 614-771-0860/
Santa Fe Gaming may mortgage Henderson
LAS VEGAS, CA--May 7, 1997--Santa Fe Gaming Corp. (ASE:SGM)
recently signed a letter of commitment with Consolidated Mortgage
of Nevada to borrow up to $12 million secured by a first deed of
trust on property in Henderson, Nev.
The Henderson parcel is owned by Sahara Mission Valley, a
subsidiary of Pioneer Hotel Inc., issuer of Pioneer Finance
13-1/2 percent First Mortgage Notes Due December 1998.
If consummated, the one-year First Deed of Trust will have a
fixed 12.25 percent interest rate and a 3.25 percent origination
An indenture agreement between Pioneer Finance bondholders and
Pioneer Hotel Inc. bans restricted payments or restricted
investments from Sahara Mission Valley to Pioneer Hotel Inc.,
Santa Fe Gaming or any subsidiaries of Santa Fe Gaming unless
Pioneer Hotel has a minimum coverage ratio of 1.5-to-1. As of
last quarter, the Pioneer has not met that ratio.
Jason Takenouchi, a research analyst for the Culinary Union,
said Santa Fe Gaming has several options for capital generated by
the mortgage loan.
Among the possible uses, he said, include using the money to
make Pioneer interest payments, which would entail a restricted
payment by Sahara Mission Valley that the Culinary Union believes
violates the indenture agreement and using the money to finance a
reorganization plan for Treasure Bay Gaming and Resorts, as the
company has proposed in bankruptcy proceedings for Treasure Bay.
That may also violate the indenture.
The proposed loan, with an effective annual cost of 15-1/2
percent, has two major problems, according to the Culinary Union.
1) If Santa Fe Gaming or any of its subsidiaries goes into
default in the next year, it would trigger a series of
cross-defaults which would probably result in the attempted
foreclosure on the property. If that occurs, Consolidated
Mortgage will have first priority on the Henderson property,
displacing Pioneer Finance Noteholders.
2) Since Sahara Mission Valley owns the property, it will have
to pay the interest on the loan even though it has no
cash-generating operations at this time.
The proposed First Deed of Trust on the Henderson property
also may complicate financing plans for Santa Fe Gaming's
proposed Henderson casino. The Culinary Union has prepared an
analysis of the project which is available on request.
CONTACT: Culinary Union Jason Takenouchi, 702/386-5231