TCR_Public/970723.MBX



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InterNet Bankruptcy Library - News for July 23, 1997







Bankruptcy News For July 23, 1997




        
  1. El Paso Electric Announces Second
            Quarter Financial Results

  2.     
  3. Alliance to Solicit Offers for Red
            Ant Entertainment; Company Received Court Approval to
            Amend Financing Agreement to Provide Red Ant Funding

  4.     
  5. Mohawk Industries, Inc. Completes
            Acquisition of Certain Assets of Diamond Rug & Carpet
            Mills, Inc.






El Paso Electric Announces Second
Quarter Financial Results



EL PASO, Texas, July 23, 1997 - El
Paso Electric Company
(AMEX: EE) (the "Company")
today reported net income applicable to common stock before
extraordinary item of approximately $13.0 million, or $0.22 per
common share, for the quarter ended June 30, 1997. This amount
includes approximately $4.6 million, net of tax and legal fees
and expenses, or $0.08 per common share related to the settlement
of litigation between the Company and Central and South West
Corporation ("CSW"). The Company also reported an
extraordinary loss of $0.4 million, net of tax, attributable to
the repurchase of debt at a premium during the period and the
recognition of unamortized issuance expenses related to the debt.
The Company's net income applicable to common stock for the
quarter after this extraordinary item was $12.6 million, or $0.21
per common share.



The Company's net income applicable to common stock before
extraordinary item for the six months ended June 30, 1997 was
approximately $15.5 million, or $0.26 per common share. This
amount includes approximately $4.6 million, net of tax and legal
fees and expenses, or $0.08 per common share related to the
settlement of the CSW litigation. The Company also had an
extraordinary loss of $2.7 million, net of tax, attributable to
the repurchase of debt at a premium during the period and the
recognition of unamortized issuance expenses related to the debt.
The Company's net income applicable to common stock for the six
months ended June 30, 1997 after this extraordinary item was
$12.8 million, or $0.21 per common share.



Excluding one-time and extraordinary items, earnings for the
quarter and six months ended June 30, 1997 were $0.14 and $0.18,
respectively, as compared to $0.11 and $0.10, respectively, for
the quarter ended June 30, 1996 and six months ended June 30,
1996 on a pro forma basis.



As noted above, the second quarter results reflect a gain, net
of tax and legal fees and expenses, of $4.6 million, or $0.08 per
common share from the settlement of litigation between the
Company and CSW. CSW has agreed to pay $35 million to settle all
claims by the Company in connection with the Company's failed
merger with CSW. Pursuant to the terms of the Company's Fourth
Amended Plan of Reorganization, the first $20 million in proceeds
from this litigation will be distributed to the record holders of
the Company's preferred stock and common stock as of February 12,
1996. The remaining proceeds, net of legal fees and expenses of
approximately $7.5 million and income taxes of approximately $2.9
million, will be retained by the Company.



The Company continued to emphasize deleveraging during the
quarter ended June 30, 1997, reacquiring approximately $22.3
million of its first mortgage bonds in open market transactions
during the period. Subsequent to June 30, 1997, the Company has
repurchased an additional $2.5 million of its first mortgage
bonds, bringing the total debt reacquired since the Company's
emergence from bankruptcy on February 12, 1996 to approximately
$193.1 million. The repurchase of these first mortgage bonds has
reduced annual interest expense by approximately $15.0 million,
and has reduced the amount of leverage in the Company's capital
structure from approximately 75% on February 12, 1996 to
approximately 68% as of June 30, 1997.



Net income applicable to common stock before extraordinary
item of approximately $13.0 million for the quarter ended June
30, 1997 compares to net income applicable to common stock, for
the same period a year ago, of approximately $6.6 million. The
$6.4 million increase in net income applicable to common stock
before extraordinary item is primarily attributable to (i) the
CSW litigation settlement of approximately $4.6 million, net of
tax and legal fees and expenses and (ii) decreased interest on
long-term debt of approximately $2.2 million, net of tax.



Net income applicable to common stock before extraordinary
item of approximately $15.5 million for the six months ended June
30, 1997 compares to net income applicable to common stock on a
pro forma basis for the same period a year ago, of approximately
$6.1 million. The $9.4 million increase in net income applicable
to common stock before extraordinary item is primarily
attributable to (i) the CSW litigation settlement of
approximately $4.6 million, net of tax and legal fees and
expenses and (ii) decreased interest on long-term debt of
approximately $3.8 million, net of tax.



Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the three months ended June 30, 1997 was
$70.8 million compared to $64.5 million for the same period in
1996. The $6.3 million increase in EBITDA is primarily
attributable to the CSW litigation settlement.



EBITDA for the six months ended June 30, 1997 was $124.4
million compared to $115.4 million for the same period in 1996 on
a pro-forma basis. The $9.0 million increase in EBITDA is
primarily attributable to the CSW litigation settlement.



On July 17, 1997, the Company's Board of Directors declared a
dividend of $2.85 per share on the Company's 11.40% Series A
preferred stock. This dividend will be paid on August 1, 1997, to
shareholders of record as of July 18, 1997. The dividend will be
paid in additional shares of Series A preferred stock, with
fractional shares paid in cash.



The Company achieved a new record system peak of 1,442 MW
(megawatts) on July 2, 1997, which was a 4.0 percent increase
over the 1996 record system peak of 1,387 MW. The Company also
recorded a native system peak demand of 1,112 MW on July 2, 1997,
a 0.6 percent increase from the previous record of 1,105 MW set
in 1996.



The Company is an electric utility serving approximately
282,000 retail customers in El Paso, Texas and areas of the Rio
Grande valley in west Texas and southern New Mexico, as well as
wholesale customers in Southern California, New Mexico, Texas and
the Republic of Mexico.



El Paso Electric Company's results of operations for the three
months ended June 30, 1997 and 1996 and for the six months ended
June 30, 1997 and for the same period in 1996 on a pro forma
basis are as follows (in thousands except share data):



                                                    Three Months
  Ended June 30,
  


                                                         1997
  1996
      Operating revenues                              $144,275
  $144,388
        Operating expenses:
          Fuel and purchased and
         interchanged power                            (30,657)
  (29,309)
        Other                                          (81,010)
  (80,983)
      Other income, net                                  5,446
  844
      Interest charges                                 (21,809)
  (25,440)
      Extraordinary loss on repurchase of debt, net       (427)
  --
      Net income                                        15,818
  9,500
      Preferred stock dividend requirements              3,238
  2,897
      Net income applicable to common stock            $12,580
  $6,603
  


        Net income per common share:
       Income before extraordinary item                 $0.215
  $0.110
       Extraordinary loss on repurchase of debt, net    (0.007)
  --
       Net income                                        0.208
  0.110
  


        Weighted average number of common shares
       and common share equivalents outstanding(1)  60,530,625
  60,164,112
  


                                                    Six Months Ended
  June 30,
                                                     Historical
  Pro Forma
                                                         1997
  1996
      Operating revenues                              $280,132
  $273,714
        Operating expenses:
       Fuel and purchased and interchanged power       (61,909)
  (53,424)
       Other                                          (157,602)
  (159,339)
      Other income, net                                  5,520
  1,691
      Interest charges                                 (44,304)
  (50,663)
      Extraordinary loss on repurchase of debt, net     (2,671)
  --
      Net income                                        19,166
  11,979
      Preferred stock dividend requirements              6,387
  5,913
      Net income applicable to common stock            $12,779
  $6,066
  


        Net income per common share:
       Income before extraordinary item                 $0.255
  $0.101
       Extraordinary loss on repurchase of debt, net    (0.044)
  --
       Net income                                        0.211
  $0.101
  


        Weighted average number of common shares
       and common share equivalents outstanding(1)  60,545,886
  60,120,226
  


      (1) Includes weighted average number of restricted common
  shares and
          common share equivalents, when dilutive, issued in
  accordance with the
  


            Company's 1996 Long-Term Incentive Plan.
  


        Quarters Ended June 30, 1997 and 1996 (in thousands)
                                                                   Increase
                                             1997        1996
  (Decrease)
        Electric kWh Sales:
       Retail Customers                   1,436,610    1,446,111
  (0.7%)
       Other Utilities                      498,387      467,194
  6.7%
        Total                             1,934,997    1,913,305
  1.1%
  


        Operating Revenues:
       Retail Customers                    $120,002     $119,414
  0.5%
       Other Utilities                       24,273       24,974
  (2.8%)
        Total                              $144,275     $144,388
  (0.1%)
  


        Capital Expenditures                  $13,065       $8,751
  


        Cash Interest Payments                $17,782       10,567
  


        Depreciation and Amortization         $22,098      $22,407
  


        Federal and State Income Taxes(1)     $10,659        7,151
  


        EBITDA                                $70,811      $64,498
  


        Six Months Ended June 30, 1997 and 1996 (In thousands):
                                                                     Increase
                                             1997        1996(2)
  (Decrease)
        Electric kWh Sales:
       Retail Customers                   2,708,339    2,697,544
  0.4%
       Other Utilities                      883,143      823,045
  7.3%
        Total                             3,591,482    3,520,589
  2.0%
  


        Operating Revenues:
       Retail Customers                    $233,315     $226,426
  3.0%
       Other Utilities                       46,817       47,288
  (1.0%)
        Total                              $280,132     $273,714
  2.3%
  


        Capital Expenditures                  $27,792      $20,516
  


        Cash Interest Payments                $39,781      $21,456
        Depreciation and Amortization         $44,003      $44,564
  


        Federal and State Income Taxes(1)     $14,211       $8,183
  


        EBITDA                               $124,355     $115,388
  


      (1) Does not include federal income tax benefit of
  approximately $230 and
  


          $1,438 for the quarter ended and six months ended June 30,
  1997,
            respectively, on extraordinary item.
  


      (2) On a pro forma basis except for kWh Sales and Capital
  Expenditures.
  


        Twelve Months Ended June 30, 1997 (in thousands)
                                                               1997
        Electric kWh Sales:
         Retail Customers                                  5,663,702
         Other Utilities                                   1,813,651
          Total                                            7,477,353
  


        Operating Revenues:
         Retail Customers                                   $483,183
         Other Utilities                                     106,628
          Total                                              589,811
  


        Capital Expenditures                                 $47,877
  


        Cash Interest Payments                               $81,703
  


        Depreciation and Amortization                        $89,406
  


        Federal and State Income Taxes(1)                    $32,342
  


        EBITDA                                              $265,824
  


      (1) Does not include federal income tax benefit of
  approximately $1,438 on
  


            extraordinary item.
  


SOURCE El Paso Electric Company/CONTACT: Teresa Souza, media,
915-543-5823, or Leslie Beal, investors, 915-543-2213, both of El
Paso Electric Company/






Alliance to Solicit Offers for Red Ant
Entertainment; Company Received Court Approval to Amend Financing
Agreement to Provide Red Ant Funding



NEW YORK, NY - July 23, 1997 - Alliance Entertainment Corp.
(NYSE: CDS) said today that the Court has approved an amendment
to its debtor-in- possession (DIP) financing agreement with The
Chase Manhattan Bank that would enable the Company to provide
interim financing for its Red Ant Entertainment subsidiary (which
is not a debtor) on an out-of-bankruptcy basis. In connection
with the approved funding of Red Ant, the Company also announced
that it had retained Donaldson, Lufkin & Jenrette (DLJ) to
solicit offers from qualified strategic and financial buyers to
acquire Alliance Entertainment's interest in Red Ant, its Los
Angeles-based new release product label specializing in
alternative rock and urban music.



The Company said that the solicitation process would begin
immediately and continue through August 1, 1997, with final bids
due on or before such date. Following the termination of the
solicitation period, the Company intends to enter into an
agreement with the party who has made the highest and best
acceptable offer as determined by the Company in consultation
with DLJ. The Company will seek approval by the Court of such
offer at an August 13, 1997 hearing. The approval process will
provide for consideration of competing offers at the hearing, and
the Company expects that the sale of Red Ant will be consummated
shortly thereafter.



According to Al Teller, Alliance's chairman and chief
executive officer, "We believe that the announced sale
process, combined with the new financing, is the best method for
the Company to maximize the value of this important asset for all
of its constituencies."



Alliance's DIP financing agreement with Chase provides for $50
million to support the operations of the company's filing
entities. The Company received approval for $20 million in
interim DIP financing July 17. A hearing on the final DIP
financing is scheduled for July 30, 1997. As previously
announced, neither Red Ant nor Alliance's U.K.-based catalog and
re-issue label, Castle Communications, and its Canadian
subsidiary, St. Clair Entertainment Group, were included in
Alliance's July 14 Chapter 11 reorganization filing.



Red Ant is an independent record label specializing in new
product, primarily in the alternative rock and urban music
genres, with a particular focus on the identification and
development of new talent. Red Ant's roster of more than 20
artists includes naked, Mexico 70, Militia, Sunz of Man and
Symposium. The label released its first full-length projects in
the first quarter of 1997, and has said that it expects to issue
up to 25 projects during the year.



Red Ant also owns a 50 % interest in Delicious Vinyl, an urban
music label whose roster includes Pharcyde, N'Dea Davenport,
Brand New Heavies, Born Jamericans and Whoridas. Under the
agreement, the two labels will release various projects jointly.



Alliance Entertainment Corp. is a fully integrated,
independent music company with more than 1,300 employees in the
United States, Canada and the United Kingdom. The Company
maintains corporate headquarters in New York and operations
headquarters at its facility in Coral Springs, Florida. Red Ant
and Delicious Vinyl employ approximately 88 in its offices in Los
Angeles and New York.



Forward-looking statements herein are made pursuant to the
safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements can
generally be identified as such because the context of the
statement will include words such as the Company
"believes," "expects,"
"anticipates," or words of similar import. Similarly,
statements that describe the Company's future plans, objectives,
estimates or goals are forward-looking statements. There are
certain important factors that could cause results to differ
materially from those anticipated by forward-looking statements
made herein. Investors are cautioned that all forward-looking
statements involve risks and uncertainty.



SOURCE Alliance Entertainment Corp. /CONTACT: Sandra
Sternberg, Rivian Bell or Patrick Lee, 310- 788-2850/ (CDS)






Mohawk Industries, Inc. Completes Acquisition of Certain
Assets of Diamond Rug & Carpet Mills,
Inc.



CALHOUN, Ga., July 23, 1997 - Mohawk Industries, Inc. (Nasdaq:
MOHK) today announced that on July 23, 1997 it closed the
previously announced acquisition of certain assets of href="chap11.diamond.html">Diamond Rug & Carpet Mills, Inc.
and other assets owned by Diamond's principal shareholders. The
purchase price was approximately $36.0 million, which consisted
of $19.6 million in cash, at closing, $7.0 million in cash over
the six-month period following closing and a $9.4 million note
payable in seven annual installments of principal plus interest.
The acquisition was accomplished through a plan of reorganization
filed by Diamond with the United States Bankruptcy Court in the
Northern District of Georgia.



Commenting on the asset acquisition, David L. Kolb, Chairman
and Chief Executive Officer of Mohawk stated, "This
acquisition affords our Company an excellent opportunity. These
selected assets of Diamond are complementary to Mohawk's current
manufacturing capabilities, and will facilitate entry into a new
product line of cut pile polypropylene products and a significant
expansion of our polyester product line. The acquired assets will
help ensure Mohawk is able to continue with improvements in
manufacturing efficiencies and additional cost reductions. Our
people have planned conversions for manufacturing, order entry
and other critical systems to integrate these assets into Mohawk
systems immediately. In addition, these assets provide the
Company with significant increased production capacity to support
continued strong growth. We believe that this is another key step
in achieving the low cost position in the industry, thus
enhancing our competitive position."



Certain of the statements in the immediately preceding
paragraphs regarding the Diamond acquisition may constitute
"forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1993, as amended, and are
subject to the safe harbor provisions thereof. Those statements
are based on assumptions regarding the Company's ability to
successfully integrate the acquired assets. These or other
assumptions could prove inaccurate and, therefore, there can be
no assurance that the "forward-looking statements" will
prove to be accurate.



Mohawk is a leading producer of woven and tufted broadloom
carpet and rugs for residential and commercial applications.
Mohawk designs, manufactures and markets carpet in a broad range
of colors, textures and patterns and is widely recognized through
its premier brand names, some of which include
"Aladdin," "Alexander Smith,"
"Bigelow," "Galaxy," "Harbinger,"
"Helios," "Horizon," "Karastan,"
"Mohawk" and "Mohawk Commercial." Mohawk
offers a broad line of washable accent and bath rugs through
Aladdin and area rugs through Karastan and American Rug
Craftsmen. Mohawk markets its products primarily through
retailers and commercial dealers.



SOURCE Mohawk Industries,Inc. /CONTACT: John D. Swift, Chief
Financial Officer, Mohawk Industries, Inc., 706-629-7721/