-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A5NCk1U4/QICNz51pM9oGdIHKysMt2Vl5/r/qB1cWFRV5q2rKYzIioPV2lPqGV8w MVfJ45qoXMwimQDiwV4q/g== 0000024741-97-000002.txt : 19970128 0000024741-97-000002.hdr.sgml : 19970128 ACCESSION NUMBER: 0000024741-97-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19970127 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNING INC /NY CENTRAL INDEX KEY: 0000024741 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 160393470 STATE OF INCORPORATION: NY FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03247 FILM NUMBER: 97510875 BUSINESS ADDRESS: STREET 1: ONE RIVERFRONT PLAZA CITY: CORNING STATE: NY ZIP: 14831 BUSINESS PHONE: 6079749000 FORMER COMPANY: FORMER CONFORMED NAME: CORNING INC /NY / CORNING LAB SERVICES INC DATE OF NAME CHANGE: 19930713 FORMER COMPANY: FORMER CONFORMED NAME: CORNING GLASS WORKS DATE OF NAME CHANGE: 19890512 8-K 1 CORNING'S PRESS RELEASE OF 1/27/97 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: (Date of earliest event reported) December 31, 1996 CORNING INCORPORATED (Exact name of registrant as specified in its charter) New York 1-3247 16-0393470 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) One Riverfront Plaza, Corning, New York 14831 (Address of principal executive offices) (Zip Code) (607) 974-9000 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) Item 5. Other Events Attached for filing as an exhibit hereto is the item listed in "Item 7 -- Financial Statements, Pro Forma Financial Information and Exhibits" below. Such item is being filed in connection with the offering by Corning Incorporated of $500,000,000 aggregate principal amount of its Medium-Term Notes due from 9 months to 30 years from Date of Issue. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. Exhibits: The Registrant's press release of January 27, 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CORNING INCORPORATED Registrant Date: January 27, 1997 By /s/ KATHERINE A. ASBECK Katherine A. Asbeck Chief Accounting Officer Media Relations Contact: Kathryn C. Littleton (607) 974-8206 IMMEDIATE RELEASE January 27, 1997 Corning Incorporated Reports Fourth Quarter and Full Year 1996 Results Performance in Line with Expectations; On Track for Growth in Core Operations and Developing Businesses CORNING, N.Y., Jan. 27 - Corning Incorporated (NYSE:GLW) said today that net income from continuing operations for its fourth quarter ended Dec. 31, 1996, totaled $91.3 million, an increase of 28 percent compared with adjusted 1995 fourth quarter net income from continuing operations of $71.5 million. Fourth quarter earnings per share from continuing operations totaled $0.40, an increase of 29 percent compared with 1995. Adjustments to fourth quarter 1995 results relate to the change to Corning's accounting calendar which became effective January 1, 1996. For the full year 1996, Corning reported net income from continuing operations of $342.9 million, or $1.50 per share, compared with a net loss of $71.5 million, or $0.32 per share, in 1995. Excluding restructuring charges and the impact of fully reserving our investment in Dow Corning Corporation in 1995, Corning's 1996 net income and earnings per share from continuing operations increased 16 percent over 1995. Sales from Corning's continuing operations for the fourth quarter 1996 were $990.1 million, an increase of 16 percent over adjusted 1995 levels. For 1996, sales from continuing operations were $3.7 billion, an increase of 12 percent compared with 1995 sales of $3.3 billion. -more- -2- Equity company results increased 80 percent in the fourth quarter compared with adjusted 1995 results and for the full year rose 28 percent due to excellent results in the international optical fiber equity companies; EuroKera, a specialty glass equity venture with St. Gobain; and Samsung- Corning Company Ltd. in South Korea. Corning Board Chairman and Chief Executive Officer Roger G. Ackerman indicated that sales and earnings increases in the fourth quarter and full year were attributable to strong performance in most core businesses. "We're especially pleased with the performance of the optical fiber and optical cable businesses, where demand is strong due to fiber hungry global markets, and with the emergence of opto-electronic components as a strong contributor. "We also enjoyed very strong performance in environmental products, both in terms of market penetration and manufacturing productivity," continued Mr. Ackerman. "Growth at Corning Costar resumed nicely for products for pharmaceutical research and demand increased significantly for high-purity fused silica glass for semiconductors. In addition, profitability improved substantially for consumer products and glass laboratory products due to ongoing cost reduction programs. "Results from our television products businesses, however, were below the previous year due to significant expansion related spending and a temporary softness in market demand; and Quanterra, our environmental services company, continues to struggle in a difficult industry." "The year ahead will see a number of growth initiatives," said Mr. Ackerman "We are further expanding our reach in telecommunications beyond fiber and cable by developing new opportunities to be the supplier of choice for high-reliability passive optical components. Our liquid crystal display glass business, geared today for the lap-top computer market, is making breakthrough advances in manufacturing technology which resulted in improved results in the second half of 1996. We are also doubling our manufacturing capacity to supply high-purity fused silica glass, a key component for the next generation of semiconductor equipment." -more- -3- "Corning enters 1997 as a fundamentally changed organization now that the spin off of the Health Care Services segment is complete; a newly aligned management team is in place; and our strategy is clear. "We are focused on attractive international markets where we can apply our materials and process technology leadership to generate superior growth in our communications, environmental and advanced materials businesses. We continue to build on our leadership in glass, ceramics and photonics; we are extending our capabilities in polymers and surfaces; and, as always, in keeping with our history, we endeavor to create entirely new technologies," concluded Mr. Ackerman. At year end, Corning completed the spin-off of its Health Care Services segment creating two independent companies: Covance Inc. (NYSE:CVD) and Quest Diagnostics Incorporated (NYSE:DGX). In connection with the spin-off, Corning recognized a fourth-quarter loss from discontinued operations of $4.7 million, or $0.02 per share, due to the final accounting for estimates recorded in the second quarter of 1996. Including the loss from discontinued operations, Corning recorded net income of $86.6 million, or $0.38 per share, in the fourth quarter; and net income of $175.6 million, or $0.76 per share, in 1996. Established in 1851, Corning Incorporated creates leading-edge technologies for the fastest growing segments of the world's economy. Corning manufactures optical fiber, cable and components, high-performance glass and components for televisions, and other electronic displays for communications and communications-related industries; advanced materials for scientific, and environmental markets; and consumer products. -30- Investor Relations Contact: Richard B. Klein (607) 974-8313 Katherine M. Dietz (607) 974-8217 Corning Incorporated and Subsidiary Companies Consolidated Statements of Income (In millions, except per-share amounts) Three Twelve Year Year Months Weeks Ended Ended Ended Ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 1996 1995 1996 1995 (unaudited) Revenues Net sales $3,651.6 $3,257.1 $ 990.1 $ 814.5 Royalty, interest, and dividend income 32.9 30.6 8.9 7.7 -------- --------- ------- -------- 3,684.5 3,287.7 999.0 822.2 Deductions Cost of sales 2,258.9 2,032.6 622.0 520.4 Selling, general and administrative expenses 639.8 556.2 169.7 142.4 Research and development expenses 191.3 175.7 53.8 45.3 Provision for restructuring and other special charges 26.5 Interest expense 69.1 69.3 15.3 16.5 Other, net 38.1 21.3 18.4 3.6 -------- ------- -------- -------- Income from continuing operations before taxes on income 487.3 406.1 119.8 94.0 Taxes on income from continuing operations 163.2 118.2 40.1 25.3 Income from continuing operations before minority interest and equity earnings 324.1 287.9 79.7 68.7 Minority interest in earnings of subsidiaries (52.6) (64.4) (11.6) (13.0) Dividends on convertible preferred securities of subsidiary (13.7) (13.7) (3.4) (3.2) Equity in earnings (losses) of associated companies: Other than Dow Corning Corporation 85.1 66.7 26.6 17.8 Dow Corning Corporation (348.0) ------- --------- -------- ------- Income (loss) from continuing operations 342.9 (71.5) 91.3 70.3 Income (loss) from discontinued operations, net of income taxes (167.3) 20.7 (4.7) 13.2 ------- --------- --------- ------- Net Income (Loss) $ 175.6 $ (50.8) $ 86.6 $ 83.5 Per Common Share: Continuing operations $ 1.50 $ (0.32) $ 0.40 $ 0.31 Discontinued operations (0.74) 0.09 (0.02) 0.06 ========== ========== ======= ======= Net Income (Loss) $ 0.76 $ (0.23) $ 0.38 $ 0.37 Dividends Declared $ 0.72 $ 0.72 $ 0.18 $ 0.18 Weighted Average Shares Outstanding 227.1 226.6 225.9 226.7 The accompanying notes are an integral part of these statements. Corning Incorporated and Subsidiary Companies Condensed Consolidated Balance Sheets (In millions) Dec. 31, 1996 Dec. 31, 1995 Assets Current Assets Cash and short-term investments $ 223.2 $ 187.6 Receivables, net 566.3 479.5 Inventories 498.5 426.5 Deferred taxes on income and other current assets 130.7 102.8 ------- -------- Total Current Assets 1,418.7 1,196.4 Investments 337.2 364.9 Plant and Equipment, Net 1,977.7 1,599.6 Goodwill and Other Intangible Assets, Net 330.4 330.8 Other Assets 257.3 305.3 1,664.7 --------- --------- $4,321.3 $5,461.7 Liabilities and Stockholders' Equity Loans payable $ 53.9 $ 143.1 Accounts payable 268.9 202.6 Other accrued liabilities 484.7 396.3 ------- -------- Total current liabilities 807.5 742.0 Other Liabilties 646.2 618.3 Loans Payable Beyond One Year 1,208.5 1,340.0 Minority Interest in Subsidiary Companies 310.7 269.8 Convertible Preferred Securities of Subsidiary 365.1 364.7 Convertible Preferred Stock 22.2 23.9 Common Stockholders' Equity 961.1 2,103.0 ------- -------- $4,321.3 $5,461.7 ======== ========= The accompanying notes are an integral part of these statements. Corning Incorporated and Subsidiary Companies Notes to Consolidated Financial Statements Quarter 4, 1996 (1) Earnings per common share are computed by dividing net income less dividends on Series B convertible preferred stock by the weighted average number of common shares outstanding during the period. The weighted average shares outstanding were 225.9 million and 227.1 million for the fourth quarter and year ended December 31, 1996 and 226.7 million and 226.6 million, respectively, for the same periods in 1995. Series B preferred dividends amounted to $0.4 million and $1.9 million for the fourth quarter and year ended December 31, 1996 and $0.5 million and $2.0 million, respectively, for the same periods in 1995. (2) Depreciation and amortization charged to continuing operations during the years ended December 31, 1996 and 1995 totaled $288.1 million and $251.6 million, respectively. (3) Corning's effective tax rate for continuing operations was 33.5% for the fourth quarter and year ended December 31, 1996 and 27% and 29%, respectively, for the same periods in 1995. The lower 1995 rate was due to a higher percentage of Corning's earnings being from consolidated entities with lower effective tax rates and the second quarter 1995 restructuring charge. (4) Effective January 1, 1996, Corning made several changes to its accounting calendar to make Corning's results more comparable with other companies and to enable Corning to report results of certain subsidiaries on a more current basis. Fourth quarter 1995 financial statements were not restated for the calendar change. The following table presents unaudited pro forma results for the fourth quarter 1995 as if this change had occurred at the beginning of 1995 (in millions, except per-share amounts): Three Months Ended December 31, 1995 ----------------- Sales $ 853.8 ======= Net income Continuing operations $ 71.5 Discontinued operations 12.5 ------- Net income $ 84.0 ======= Net income per common share Continuing operations $ 0.31 Discontinued operations 0.06 -------- Net income per common share $ 0.37 ======== (5) On May 15, 1995, Dow Corning Corporation (a 50%-owned equity company) voluntarily filed for protection under Chapter 11 of the United States Bankruptcy Code. As a result of this action, Corning recorded an after- tax charge of $365.5 million, or $1.62 per share, in the second quarter of 1995 to fully reserve its investment in Dow Corning Corporation. Corning also discontinued recognition of equity earnings from Dow Corning Corporation beginning in the second quarter of 1995. Corning recognized equity earnings from Dow Corning Corporation of $17.5 million in the first quarter of 1995. (6) In the second quarter of 1995, Corning recorded a restructuring charge in continuing operations totaling $26.5 million ($16.1 million after tax) or $0.07 per share. (7) In May 1996, Corning's Board of Directors approved a plan to distribute to its shareholders on a pro rata basis all of the shares of Quest Diagnostics Incorporated (formerly Corning Clinical Laboratories Inc.) and Covance Inc. (formerly Corning Pharmaceutical Services, Inc.) (the Distributions). On December 31, 1996, Corning completed the Distributions. Prior to the Distributions, Corning received a ruling from the Internal Revenue Service that the Distributions are tax-free to Corning and its shareholders. As a result of the Distributions, Quest Diagnostics and Covance became independent publicly traded companies. Corning's consolidated financial statements report these companies, which formerly comprised Corning's Health Care Services segment, as discontinued operations. During the fourth quarter, Corning recorded a loss in discontinued operations totaling $4.7 million after-tax related to the final accounting for estimates recorded in the second quarter of 1996. The loss from discontinued operations for the year ended 1996 totaled $167.3 million. It includes the $4.7 million fourth quarter after-tax charge discussed above, a $115 million after-tax charge recorded in the third quarter, a $56.8 million after-tax charge recorded in the second quarter offset by $9.2 million of income recognized in the first quarter. The third quarter charge primarily related to a charge taken by Quest Diagnostics to increase reserves related to government investigations of billing practices of certain clinical laboratories acquired by Quest Diagnostics in 1993 and 1994. The second quarter charge includes the estimated costs related to the Distributions and a charge to increase reserves for government claims, offset by the estimated results of operations of the businesses to be distributed from April 1, 1996, through December 31, 1996. Corning has agreed to indemnify Quest Diagnostics on an after-tax basis for the settlement of claims relating to billing practices of Quest Diagnostics that were pending at December 31, 1996. Coincident with the Distributions, Corning recorded a payable to Quest Diagnostics of approximately $25 million which is equal to management's best estimate of amounts which are probable of being paid by Corning to Quest Diagnostics to satisfy the remaining indemnified claims on an after-tax basis. Although management believes that established reserves for indemnified claims are sufficient, it is possible that additional information may become available which may cause the final resolution of these matters to exceed established reserves by an amount which could be material to Corning's results of operations and cash flow in the period in which such claims are settled. Corning does not believe that these issues will have a material adverse impact on Corning's overall financial condition. -----END PRIVACY-ENHANCED MESSAGE-----