PR Newswire
, April 1, 1999 p2330
Viskase
Companies, Inc. Announces 1998
Results.
COPYRIGHT 1999 PR Newswire Association, Inc.
CHICAGO, March 31 /PRNewswire/ -- Viskase Companies, Inc.
(Nasdaq: VCIC) today announced its 1998 financial results.
During the second quarter of 1998, the Board of Directors approved the sale of
two of the Company's subsidiaries, Clear Shield National, Inc. and Sandusky Plastics, Inc.
Accordingly, the operating results of the two subsidiaries have been segregated from
continuing operations of Viskase Corporation, the Company's
remaining subsidiary, and reported as a separate line item on the statements of operations
under the heading Discontinued Operations. The Company has restated its prior financial
statements to present the operating results as discontinued operations.
Continuing Operations
Net sales from continuing operations for the fiscal year ended December 31, 1998
were $409.2 million, which represent a decrease of 17.9% from the prior year's sales of
$498.3 million. Net sales for fiscal year 1997 include $48.8 million of sales from the
oriented polystyrene (OPS) and polyvinyl chloride (PVC) film businesses that were divested
during 1997. Excluding the prior year's sales of the divested film businesses, the
effective decrease in net sales for the fiscal year 1998 was 9.0%. The decline in net
sales is principally due to reduced worldwide casing volume brought about by intense price
competition and to adverse economic conditions in the Russian and Southeast Asian markets.
Operating loss from continuing operations for 1998 (including the unusual charge
for restructuring and write-off of excess reorganization value) was $(144.6) million. The
unusual charge for restructuring and the write-down of the Company's excess reorganization
value was primarily a non-cash charge. Excluding the unusual restructuring and excess
reorganization charge of $(150.1) million, adjusted operating income was $5.5 million.
Net loss from continuing operations (including the unusual charge for
restructuring and write-off of excess reorganization value) for fiscal year 1998 was
$(181.7) million, or $(12.25) per share, compared to a net loss from continuing operations
for fiscal year 1997 of $(10.4) million, or $(0.71) per share. Net loss from continuing
operations includes $(150.1) million, or $(10.12) per share, for the unusual charge for
fiscal year 1998.
Unusual Charge
During fiscal year 1998, Viskase Companies, Inc.
announced a reorganization of the worldwide operations of Viskase
Corporation. The restructuring included the elimination of the Chicago production
facility, elimination of a significant number of administrative positions worldwide and
the shut-down of certain foreign sales and distribution locations. Overall these
reductions affected approximately 350 employees or ten percent of Viskase's
worldwide work force. In addition, due to business conditions leading to the Viskase plan of restructuring, the Company evaluated the
recoverability of long-lived assets including property, plant and equipment, patents and
excess reorganization value.
The unusual charge reflects the restructuring of Viskase's
worldwide operations and the write-down of the Company's excess reorganization value and
is primarily a non-cash charge. The unusual charge of $150.1 million includes $9.0 million
for cash severance and decommissioning and non-cash charges including $41.8 million for
Chicago plant write-offs, $2.5 million for inventory and maintenance stores charges, $5.6
million of charges related to the shutdown of certain foreign operations and a $91.2
million write-down of the Company's excess reorganization value. The excess reorganization
value, which is similar to goodwill, was established at the time of the Company's
reorganization in 1993.
Extraordinary Loss
The Company recorded a $6.8 million extraordinary loss on the early
extinguishment of its 12% Senior Secured Notes. The extraordinary loss is comprised of an
$8.9 million prepayment penalty and $2.2 million write-off of deferred debt issuance
costs, net of a tax benefit of $4.3 million.
Discontinued Operations
Net income from discontinued operations for fiscal year 1998 was $0.4 million,
or $.03 per share, compared to a net income from discontinued operations for fiscal year
1997 of $.7 million, or $.05 per share. A net gain on the sale of discontinued operations
of $39.1 million or $2.63 per share was recognized for the disposal of Clear Shield
National, Inc. and Sandusky Plastics, Inc.
Viskase Companies, Inc. retains its major interest
in the food packaging industry through Viskase Corporation.
Principal products manufactured are:
-- cellulosic casings used in the preparation and packaging of
processed meat products and
-- heat shrinkable plastic bags and specialty films for packaging and
preserving fresh and processed meat, poultry and cheese products.
Viskase Companies, Inc. And Subsidiaries
Consolidated Balance Sheets
Dec. 31, Dec. 25,
1998 1997
(in thousands)
Assets
Cash and equivalents $9,028 $24,407
Receivables, net 47,718 75,039
Inventories 93,228 97,802
Other current assets 15,337 25,286
Property, plant and equipment, net 329,845 435,126
Deferred financing costs, net 1,198 4,574
Other assets 34,715 39,193
Excess reorganization value, net 112,426
Total Assets $531,069 $813,853
Liabilities and Stockholders' Equity
Accounts payable $36,337 $41,734
Accrued liabilities 62,319 71,589
Current deferred income taxes 8,810 10,516
Debt including obligations under capital leases 405,000 524,063
Accrued employee benefits 48,115 48,521
Deferred and noncurrent income taxes 26,395 26,510
Common stock, $.01 par value 149 148
Paid in capital 136,705 136,132
Accumulated (deficit) (197,454) (48,458)
Accumulated other comprehensive income 4,693 3,098
Total Liabilities and Stockholders' Equity $531,069 $813,853
Viskase Companies, Inc. and Subsidiaries
Consolidated Statements of Operations
53 weeks 52 weeks 52 weeks
Dec. 26, Dec. 27, Dec. 29,
1997 to 1996 to 1995 to
Dec. 31, Dec. 25, Dec. 26,
1998 1997 1996
(in thousands, except for number of shares
and per share amounts)
Net Sales $409,169 $498,333 $534,420
Costs and Expenses
Cost of sales 307,913 366,744 391,221
Selling, general and administrative 84,159 91,722 92,048
Amortization of intangibles and
excess reorganization value 11,655 14,138 14,320
Unusual charge 150,069 3,500
Operating (Loss) Income (144,627) 22,229 36,831
Interest income 1,531 1,416 1,568
Interest expense 51,364 55,617 58,458
Other expense, net 1,217 2,064 2,705
(Loss) From Continuing Operations
Before Taxes (195,677) (34,036) (22,764)
Income tax (benefit) (14,004) (23,674) (8,184)
Net (Loss) From Continuing
Operations (181,673) (10,362) (14,580)
Discontinued Operations:
Income from discontinued
operations net of
income taxes 413 717 898
Gain on sale of
discontinued operations
net of income
tax provision of $19,556 39,057 -- --
Net (Loss) Before Extraordinary
Item (142,203) (9,645) (13,682)
Extraordinary (loss) on early
extinguishment of
debt net of income
tax (benefit) of $(4,343) (6,793) -- --
Net (Loss) $(148,996) $(9,645) $(13,682)
Weighted Average
Common Shares 14,824,885 14,617,540 14,325,595
Per Share Amounts:
Earnings (loss) per share
-- basic and diluted
Continuing operations $(12.25) $(.71) $(1.02)
Discontinued Operations:
Income from discontinued operations .03 .05 .06
Gain on sale from
discontinued operations 2.63 -- --
Net (loss) before extraordinary item (9.59) (.66) (.96)
Extraordinary (loss) (.46) -- --
Net (Loss) $(10.05) $(.66) $(.96)
Viskase Companies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Dec. 26, Dec. 27, Dec. 29,
1997 to 1996 to 1995 to
Dec. 31, Dec. 25, Dec. 26,
1998 1997 1996
(in thousands)
Cash flows from operating
activities:
Net (Loss) $(148,996) $(9,645) $(13,682)
Adjustments to reconcile
net (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization
under capital leases 39,519 43,373 42,086
Amortization of intangibles
and excess reorganization value 11,655 15,936 16,334
Amortization of deferred financing
fees and discount 1,772 1,770 2,272
(Decrease) in deferred and
noncurrent income taxes (611) (24,893) (11,065)
Foreign currency
transaction loss (gain) (15) 135 (810)
(Gain) loss on
disposition of assets (58,562) (64) 165
Bad debt provision 1,295 665 659
Impairment loss excess
reorganization 91,169 -- --
Extraordinary loss on
debt extinguishment 11,136 -- --
Changes in operating
assets and liabilities:
Accounts receivable 19,587 1,890 10,893
Inventories (15,952) (12,187) 4,383
Other current assets 7,571 (3,916) (788)
Accounts payable and
accrued liabilities (9,537) (2,283) 12,463
Other 31,536 (5,135) (6,586)
Total adjustments 130,563 15,291 70,006
Total net cash provided
by (used in)
operating activities (18,433) 5,646 56,324
Cash flows from
investing activities:
Capital expenditures (35,354) (57,879) (37,073)
Proceeds from disposition
of assets 164,236 41,867 2,356
Net cash provided by
(used in) investing
activities 128,882 (16,012) (34,717)
Cash flows from
financing activities:
Issuance of common stock 574 1,127 153
Proceeds from revolving
loan and long-term borrowings 1,475 2,814 2,186
Deferred financing costs (605) (523) (142)
Repayment of revolving loan,
long-term borrowings and
capital lease obligations (118,173) (9,490) (11,705)
Premium on early
extinguishment of debt (8,927) -- --
Net cash (used in)
financing activities (125,656) (6,072) (9,508)
Effect of currency exchange
rate changes on cash (172) (949) (630)
Net (decrease) increase
in cash and equivalents (15,379) (17,387) 11,469
Cash and equivalents
at beginning of period 24,407 41,794 30,325
Cash and equivalents at
end of period $9,028 $24,407 $41,794