Discovery Zone Emerges From Chapter 11
Bankruptcy Protection With $100 Million In Private Financing
FT. LAUDERDALE, Fla.--July 29, 1997-- Management Team Focused
On Upgrading Discovery Zone Experience For Kids And Parents
Discovery Zone(R) ("DZ"), the children's indoor
entertainment company, emerged from Chapter 11 bankruptcy
protection today. With a new ownership group, led by the New
York-based investment firm Wellspring Associates L.L.C.; a new
management team; and $100 million in private financing to
implement its new business plan, Discovery Zone is now poised to
reclaim its position at the forefront of children's
entertainment.
As part of the reorganization plan, Wellspring Associates has
acquired majority control of Discovery Zone. A key component of
Wellspring's investment strategy involved recruiting a new senior
management team led by president and chief executive officer
Scott Bernstein, a former senior executive of Six Flags Theme
Parks Inc. and Time Warner Inc. In addition, Robert Rooney was
appointed chief financial and administrative officer and Sharon
Rothstein was named senior vice president of marketing and
entertainment. All senior managers share a background in family
entertainment, marketing and turnaround expertise.
"Our goal is to reposition Discovery Zone from an indoor
playground facility to a fresh, exciting, entertainment venue for
kids and families. The new DZ will provide a wide variety of
entertainment offerings and attractions that will encourage kids
and their parents to return again and again for a different
experience each time," said Scott Bernstein.
After having secured exit financing, the next and most
important step in the turnaround process is the revitalization of
the FunCenter product, according to Bernstein, who plans to
broaden the entertainment offerings, initiate strategic
advertising and promotional alliances with nationally-recognized
properties and offer branded, high-quality food. With its
national network of FunCenters and strong brand name, Discovery
Zone is uniquely positioned to act as a platform for its
promotional partners to market and advertise their products.
In keeping with this strategy, Discovery Zone has already
secured long-term agreements with Pizza Hut and Pepsi to engage
in joint promotions and provide branded food service for
Discovery Zone. DZ has also created promotional alliances with
Hasbro's Nerf, Toys R Us, the World Wrestling Federation and New
Line Cinema.
In addition to introducing unique, frequently changing
entertainment experiences and establishing a theme-based,
seasonal promotional schedule, Discovery Zone plans to upgrade
the FunCenter experience by investing $20 million through the end
of 1997. Bernstein continues, "We are also developing
additional weekday programming targeted towards toddlers and
their parents (slated to roll out in September), to increase our
Monday through Friday business."
Once the revitalization phase of the turnaround plan is
complete, Discovery Zone will set its sights on expansion.
"Right now, our focus in on re-launching the brand as a
family attraction and delivering a high-quality, high-value
entertainment experience," Bernstein concludes.
Pursuant to the plan of reorganization, all securities of
Discovery Zone that existed as of the bankruptcy petition date
have been extinguished or retired, as the case may be. The
securities offered in the private financing have not been
registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United States absent registration
or an applicable exemption from registration requirements.
Wellspring Associates L.L.C. is a private equity investment
firm focused on acquiring and revitalizing companies that
typically have experienced operational or financial difficulties.
In addition to Discovery Zone, Wellspring has investments in
Lionel L.L.C., the world's leading manufacturer of model and toy
trains, and SLM International, Inc., a leading manufacturer of
ice and roller hockey products, primarily marketed under the CCM
brand name.
Discovery Zone is the leading owner and operator of children's
entertainment centers in North America with 208 locations across
the United States, Canada and Puerto Rico. Discovery Zone
features soft-play areas, exciting activities and a variety of
participatory games and attractions where children two through
eleven years old can play at their own skill level. Discovery
Zone...where kidz wanna be.
CONTACT: Ketchum Public Relations MaryBeth Clayton,
908/446-1566 or Seth Eisen, 212/448-4349
Avatex Settles Litigation With FoxMeyer Corporation
Trustee
DALLAS, TX - July 29, 1997 - Avatex Corporation (NYSE: AAV),
formerly FoxMeyer Health
Corporation, today announced that it has reached a settlement
with the Trustee of FoxMeyer Corporation and its subsidiaries
over litigation related to the transfer of certain assets.
FoxMeyer Corporation filed for relief under the Bankruptcy Code
in August 1996. Under the settlement, Avatex will pay the Trustee
$25 million from funds that were restricted in the case and
execute a three year, interest bearing $8 million promissory note
payable to the Trustee. In exchange, the Trustee will release
Avatex from all claims and other restrictions on its operations
and provide Avatex with a 30% interest, up to $10 million, in the
net proceeds of certain litigation that may be brought by the
Trustee against specified third parties. Under the settlement,
Avatex's 30% interest must be first used to satisfy its
obligation under the $8 million note. The settlement is subject
to approval by the presiding United States Bankruptcy Court for
the District of Delaware.
Abbey J. Butler and Melvyn J. Estrin, Co-Chairmen and Co-CEOs
of Avatex, said, "Although Avatex strongly believes that the
Trustee's claims are without merit and denies any liability with
respect to the bankruptcy, we believe that the settlement of the
litigation is an essential step in both restoring Avatex's
liquidity and accelerating our ongoing efforts to maximize the
value of our assets. In addition, the settlement specifically
provides for the immediate use of $6 million in connection with a
potential purchase of the 30.2% interest in Hamilton Morgan LLC
from its minority investor, Robert Haft." Under the
settlement, the Phar-Mor stock will be delivered to the Trustee
as collateral for the $8 million note.
Avatex currently holds a 69.8% interest in Hamilton Morgan, a
limited liability company whose sole investment is its
approximate 31% stake in Phar- Mor, Inc. (Nasdaq: PMOR). In
addition, Avatex separately owns an approximate 8% stake in
Phar-Mor, which operates a chain of over 100 discount drugstores
devoted to the sale of prescription and over-the-counter drugs,
health and beauty aids and other general merchandise.
SOURCE Avatex Corporation - /CONTACT: Edward Massman, Chief
Financial Officer of Avatex, 214-365-7450/
Masco Corporation Reports Significant
Increases In Second Quarter Sales and Earnings
TAYLOR, Michigan, July 29, 1997 - Masco Corporation (NYSE:
MAS) today reported that net sales from continuing operations in
the second quarter of 1997 were a record $913 million, a 16
percent increase over the $787 million reported in the comparable
1996 period. Net income in the 1997 second quarter increased 35
percent to a record $91.6 million compared with $68.0 million in
1996, and earnings per share increased 36 percent to $.57 per
share compared with $.42 in the second quarter of 1996.
Including acquisitions, the Company's worldwide sales
increased 16 percent in both the Kitchen and Bath Products and
Other Specialty Products segments during the second quarter of
1997; North American sales increased 14 percent and European
sales increased 29 percent.
The Company's 1997 second quarter pre-tax income includes an
unusual gain of $29.5 million resulting from a reduction in its
ownership of MascoTech's common equity to approximately 17
percent from 21 percent upon the conversion of MascoTech's
outstanding preferred stock into common stock. This gain was
entirely offset by additional reserves related to the valuation
of certain of the Company's assets, primarily the investment in
recently filed for reorganization under Chapter 11 of the
bankruptcy laws.
In the first six months of 1997, net sales were $1.77 billion,
a 14 percent increase over the $1.55 billion in sales in the same
period in 1996. Net income and earnings per share in the first
six months both increased 35 percent to $175 million or $1.09 per
share in 1997 from $130 million or $.81 per share in 1996,
respectively. Earnings for the first half of 1997 benefited from
increased product sales and interest income from proceeds of the
divestiture last year of the Company's home furnishings
businesses, as well as from ongoing efforts at cost containment.
"We are pleased with the continued increases in our sales
and earnings during the first half of 1997," said Masco
Chairman and CEO Richard A. Manoogian. "Assuming that the
economy continues to grow at a moderate rate, the Company expects
to achieve record sales and earnings from continuing operations
for the full year."
Masco Corporation is one of the world's leading manufacturers
of faucets, cabinets, locks and other consumer brand-name home
improvement and building products.
MASCO CORPORATION REPORTS SIGNIFICANT
INCREASES IN SECOND QUARTER SALES AND EARNINGS
Three Months Ended Six
Months Ended
June 30 June 30
1997 1996 1997
1996
Net Sales $913,000 $787,000 $1,767,000
$1,551,000
Cost of Sales 578,200 496,570 1,117,700
976,900
Gross Profit 334,800 290,430 649,300
574,100
Selling, General
and Administrative
Expenses 187,200 169,770 368,200
339,300
Amortization of
Acquired Goodwill 3,800 2,690 7,500
5,300
Operating Profit 143,800 117,970 273,600
229,500
Other Income/(Expense),
Net 8,600 (8,070) 18,000
(12,800)
Income from Continuing
Operations Before
Income Taxes 152,400 109,900 291,600
216,700
Income Taxes 60,800 41,900 116,500
86,700
Income from Continuing
Operations 91,600 68,000 175,100
130,000
Discontinued Operations
(net of income taxes):
Loss from Operations
of Discontinued Segment
-- -- -- --
Loss on Disposition
-- -- -- --
Net Income
(Loss) $91,600 $68,000 $175,100
$130,000
Earnings Per Share (a) $.57 $.42 $1.09
$.81
Average Shares Outstanding 161200
160500
Twelve Months Ended
June 30
1997 1996
Net Sales $3,453,000 $3,043,000
Cost of Sales 2,188,870 1,935,280
Gross Profit 1,264,130 1,107,720
Selling, General and
Administrative Expenses 725,190 689,940
Amortization of
Acquired Goodwill 14,340 11,020
Operating Profit 524,600 406,760
Other Income/(Expense), Net 53,000 (50,530)
Income from Continuing
Operations Before
Income Taxes 577,600 356,230
Income Taxes 237,300 153,510
Income from Continuing
Operations 340,300 202,720
Discontinued Operations
(net of income taxes):
Loss from Operations
of Discontinued Segment -- (2,200)
Loss on Disposition -- (650,000)
Net Income
(Loss) $340,300 $(449,480)
Earnings Per Share (a) $2.12 $1.26
Amounts in thousands except per share data.
(a) Continuing operations.
SOURCE Masco Corporation/CONTACT: Samuel Cypert of Masco,
313-374-6646/