-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, LXJ1/4InBQ+FMz7zKjuzrDHwer42G7S5bQFvIfg12GFIGTRifiUoGhNIpTFX39xa OTiBc7S4uICC+tTB5Td+4A== 0000950146-94-000209.txt : 19941213 0000950146-94-000209.hdr.sgml : 19941213 ACCESSION NUMBER: 0000950146-94-000209 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941212 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19941212 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-03247 FILM NUMBER: 94564292 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/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: (Date of earliest even reported): December 12, 1994 CORNING INCORPORATED (Exact Name of Registrant as Specified in 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) Registrant's telephone number, including area code: (607) 974-9000 Item 7. Financial Statements. On October 9, 1994, Corning Incorporated ("Corning") filed a Current Report on Form 8-K, in connection with the acquisition of Moran Research Labs (d/b/a Bioran Medical Laboratory) in a pooling of interests transaction. Pursuant to Regulation S-X, Corning is filing herewith Moran Research Labs' historical financial statements as of and for the nine months ended September 30, 1994, and audited historical financial statements as of and for the year ended December 31, 1993. Financial Statements of Business Acquired: Moran Research Labs Financial Statements, September 30, 1994 Balance Sheet at September 30, 1994 Statement of Income for the nine months ended September 30, 1994 and 1993 Statement of Retained Earnings for the nine months ended September 30, 1994 and 1993 Statement of Cash Flows for the nine months ended September 30, 1994 and 1993 Notes to Financial Statements Financial Statements, December 31, 1993 Independent Auditors' Report Balance Sheet at December 31, 1993 Statement of Income for the year ended December 31, 1993 Statement of Retained Earnings for the year ended December 31, 1993 Statement of Cash Flows for the year ended December 31, 1993 Notes to Financial Statements 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 By: /s/ Kathy A. Asbeck ------------------- Kathy A. Asbeck Assistant Controller MORAN RESEARCH LABS FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 and 1993 MORAN RESEARCH LABS BALANCE SHEET SEPTEMBER 30, 1994 ASSETS Current Assets Cash ....................................................$ 386,805 Accounts Receivable-Trade, net of reserves of $7,982,933 ......................................... 10,193,433 Other Current Assets .................................... 910,488 Total Current Assets .............................. 11,490,726 Property and Equipment, Net (Note 1) ................................................ 7,422,081 Other Assets .............................................. 247,393 TOTAL ASSETS ..............................................$ 19,160,200 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable - Trade ................................$ 551,956 Accrued Payroll ......................................... 717,427 State Income Taxes Payable .............................. 398,531 Other Accrued Liabilities ............................... 277,017 Deferred State Income Tax Liabilities (Notes 1 and 2) ....................................... 508,700 Total Current Liabilities ....................... 2,453,631 Stockholders' Equity Common Stock - No Par Authorized 500 Shares, 274 Shares Issued and Outstanding .............................. 32,800 Retained Earnings ....................................... 16,673,769 Total Stockholders' Equity ...................... 16,706,569 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................$ 19,160,200 See Notes to Financial Statements MORAN RESEARCH LABS STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 and 1993 1994 1993 Revenues: Net Sales .................................$ 49,806,274 $ 46,775,338 Interest and Dividend Income .............. 1,471 6,245 Non-Operating Gains ....................... 27,240 83,301 Total Revenue ......................... 49,834,985 46,864,884 Costs and Expenses: Cost of Revenues .......................... 15,988,899 15,031,719 Selling, General and Administrative Expenses ................................ 7,717,055 6,957,761 Provision for Bad Debts ................... 3,109,659 2,822,953 Other ..................................... 108,379 87,087 Total Costs and Expenses .............. 26,923,992 24,899,520 Income from Continuing Operations before Income Taxes .............................. 22,910,993 21,965,364 State Income Taxes (Note 1 and 2) ......... 1,231,000 1,147,900 Income from Continuing Operations ........... 21,679,993 20,817,464 Loss from Discontinued Operations (Net of State Income Tax Benefit of $120,000) (Note 7) .................................. - ( 1,890,203) NET INCOME ..................................$ 21,679,993 $ 18,927,261 See Notes to Financial Statements MORAN RESEARCH LABS STATEMENTS OF RETAINED EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 and 1993 1994 1993 Retained Earnings - Beginning ..............$ 25,070,947 $ 24,278,061 Net Income .............................. 21,679,993 18,927,261 Distributions: Cash .................................. ( 22,533,427) ( 19,024,605) Tangible Property (Notes 1, 5 and 7) .. ( 7,543,744) - RETAINED EARNINGS - ENDING .................$ 16,673,769 $ 24,180,717 See Notes to Financial Statements MORAN RESEARCH LABS STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 and 1993 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES Net Income .................................$ 21,679,993 $ 18,927,261 Non-Cash Items Included in Net Income: Depreciation and Amortization ......... 853,806 818,992 Provision for Bad Debts ............... 3,109,659 2,822,953 Other ................................. 108,379 82,656 Changes in: Accounts Receivable - Trade ........... ( 3,267,203) ( 3,012,654) Other Current Assets .................. 1,167,202 247,829 Other Assets .......................... ( 10,609) ( 1,293) Accounts Payable - Trade .............. 350,640 51,793 Accrued Payroll and Other Current Liabilities........................... 462,796 ( 267,876) Deferred State Income Tax Liabilities.. ( 177,800) ( 97,500) State Income Taxes Payable............. 398,531 - Net Cash Flows From Operating Activities ... 24,675,394 19,572,161 CASH FLOWS USED IN INVESTING ACTIVITIES Proceeds from Sale of Property and Equipment 68,949 35,250 Decrease in Net Assets of Discontinued Operations ............................... - 992,064 Purchase of Property and Equipment ......... ( 2,170,403) ( 1,983,978) Net Cash Flows Used In Investing Activities. ( 2,101,454) ( 956,664) CASH FLOWS USED IN FINANCING ACTIVITIES Distributions to Shareholders .............. (22,533,427) (19,024,605) Increase (Decrease) in Cash ................ 40,513 ( 409,108) Cash - January 1, .......................... 346,292 643,939 CASH - SEPTEMBER 30, .......................$ 386,805 $ 234,831 See Notes to Financial Statements MORAN RESEARCH LABS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 AND 1993 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Activities Moran Research Labs (the "Company"), doing business as Bioran Medical Laboratory, performs pathological and analytical tests for the medical profession in the New England area. Prior to January 1, 1994, the Company had operated a hotel (The Snow Inn Resort) and restaurant (Thompson's Clam Bar), located in Harwichport, Massachusetts. These operations, which are totally unrelated to the Company's clinical laboratory business, were spun-off to the Company's shareholders on January 1, 1994 pursuant to a plan adopted in July 1993. Interim Financial Statements The accompanying balance sheet at September 30, 1994 and the statements of income, retained earnings and cash flows for the nine months ended September 30, 1994 and 1993 are unaudited. In the opinion of management, these unaudited financial state- ments include all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results of operations and financial position for the respective interim periods. The results of operations for the nine months ended September 30, 1994 are not necessarily indicative of the results to be expected for the full year. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using both straight-line and accelerated methods over the estimated useful lives of the assets which range from 3 to 40 years. Major classifications of property and equipment at September 30, 1994 are as follows. Leasehold Improvements ...............$ 5,733,637 Equipment and Fixtures ............... 5,189,294 Motor Vehicles ....................... 739,326 Property and Equipment, at cost....... 11,662,257 Less: Accumulated Depreciation....... ( 4,240,176) Property and Equipment, Net ..........$ 7,422,081 Depreciation expense for the nine months ended September 30, 1994 and 1993 amounted to $ 750,261 and $ 715,447, respectively. Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) Revenue Recognition The Company recognizes revenue upon completion of the testing process. Billings for service under third party payor programs, including Medicare and Medicaid, are recorded as sales net of allowances for differences between amounts billed and the estimated receipts under such programs. Adjustments to the estimated receipts, based on final settlement with the third party payors, are recorded upon settlement. Income Taxes The Company has elected to be taxed under subchapter S of the Internal Revenue Code. Accordingly, the Company is not subject to and therefore has not provided for any Federal income taxes as the stockholders are taxed on their proportionate share of the Company's taxable income. On March 2, 1989, the Company became a Massachusetts Business Trust pursuant to a tax free reorganization under Internal Revenue Code section 368(a)(1)(F). This reorganization did not affect the Company's S corporation status for Federal income tax purposes, but does subject the Company to Massachusetts state income taxes. Therefore, a provision for state income taxes is included in these financial statements. In 1992, the Company adopted Financial Accounting Standard No. 109, "Accounting for Income Taxes" (FAS 109), which requires an asset and liability approach to accounting for income taxes. Under this method, state deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabil- ities and their respective tax bases using enacted tax rates in effect for the year in which the difference are expected to reverse. Under FAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period in which the change is enacted. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. Note 2 - STATE INCOME TAXES The provision for income taxes from continuing operations is summarized as follows: Nine Months Ended September 30, 1994 1993 Income from Continuing Operations before State Income Taxes .......$ 22,910,993 $ 21,965,364 State Income Taxes: Currently Payable ............... 1,408,800 1,245,400 Deferred ........................ ( 177,800) ( 97,500) Total ...................$ 1,231,000 $ 1,147,900 For income tax purposes the Company prepares its tax return using the cash basis of accounting. The deferred state income tax liability of $508,700 and $493,000 at September 30, 1994 and 1993, respectively, results from the cash to accrual basis adjustments. Note 3 - PROFIT SHARING PLAN The Company sponsors a profit-sharing plan covering all of its employees. Contributions, which totaled $230,000 and $205,000 for the nine months ended September 30, 1994 and 1993, respectively, are determined by a vote of the Board of Directors. The Company files annual plan registration and insurance information with the Internal Revenue Service, in compliance with requirements established by the Employee Retirement Income Security Act of 1974. Note 4 - RELATED PARTY TRANSACTIONS The Company's stockholders own several other businesses, principally involved in the real estate and food distribution industries. The Company leases certain real estate from one of these entities, the S.A. Fennell Limited Partnership. Rental payments to this partnership for each of the nine months ended September 30, 1994 and 1993 totaled $630,000. The other entities operate independently of the Company. Note 5 - SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION Non-cash financing activities during 1994 consisted of the spin-off of the net assets ($7,543,744) of the Company's non-clinical laboratory operations effective January 1, 1994. During the nine months ended September 30, 1994 and 1993 income taxes paid were $587,378 and $990,491, respectively. Note 6 - LEASE COMMITMENTS Minimum rental commitments under noncancellable operating leases outstanding at September 30, 1994 are: 1995 ................. $ 197,905 1996 ................. 130,518 1997 ................. 76,519 1998 ................. 37,704 1999 ................. 16,248 Operating lease rental expense for the nine months ended September 30, 1994 and 1993 amounted to $1,018,067 and $905,412, respectively, including $630,000 paid to related parties in each year (see Note 4). In addition to its corporate facilities located in Cambridge, Massachusetts, the Company maintains satellite operations throughout the New England area. Many of these facilities are leased through tenant-at-will arrangements. Note 7 - DISCONTINUED OPERATIONS Effective January 1, 1994 the Company spun-off its non-clinical laboratory operations to its shareholders, pursuant to a plan adopted in July 1993. These non-clinical laboratory operations (restaurant and hotel) have been accounted for as discontinued operations in the 1993 financial statements in accordance with the provisions of Accounting Principles Board Opinion No. 30. Sales, loss from operations, income tax benefit and net loss associated with these discontinued operations for the nine months ended September 30, 1993 are listed below: Sales ..............................$ 2,718,248 Loss from Operations before Income Tax Benefit ............... 2,010,203 Income Tax Benefit ................. 120,000 Net Loss from Discontinued Operations .......................$ 1,890,203 The net loss from the measurement date through September 30, 1993 was $259,737. Note 8 - SUBSEQUENT EVENTS On September 8, 1994 the Company entered into an acquisition agreement and plan of reorganization whereby all of the shares of the Company were acquired by Corning Incorporated ("Corning"), a New York business corporation, for 5,960,967 shares of Corning common stock, in a transaction to be accounted for as a pooling of interest. This transaction was completed on October 9, 1994. In October 1994, in connection with the acquisition and plan of reorganization, the Company acquired the real property owned by the S.A. Fennell Limited Partnership and leased by the Company for use in its clinical laboratory operations (see Note 4) in exchange for 8.41 shares of its common stock. The number of shares issued was based upon the estimated fair value of the properties. MORAN RESEARCH LABS FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1993 INDEPENDENT AUDITORS' REPORT To the Board of Directors Moran Research Labs 415 Massachusetts Avenue Cambridge, MA 02139 We have audited the accompanying balance sheet of Moran Research Labs (A Massachusetts Business Trust) as of December 31, 1993, and the related statements of income, retained earnings, and cash flows for the year then ended. These financial statements are the responsi- bility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Moran Research Labs (A Massachusetts Business Trust) at December 31, 1993 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ Leverone & Company November 10, 1994 MORAN RESEARCH LABS BALANCE SHEET AT DECEMBER 31, 1993 ASSETS Current Assets Cash ....................................................$ 346,292 Accounts receivable-trade, net of reserves of $7,359,824 ......................................... 10,035,889 Prepaid Insurance ....................................... 633,879 Prepaid State Income Taxes .............................. 422,891 Other Current Assets .................................... 1,020,920 ------------ Total Current Assets .............................. 12,459,871 ------------ Property and Equipment, Net (Note 1) ................................................ 6,179,267 ------------ Other Assets Net Assets of Discontinued Operations (Notes 1 and 7) .... 7,543,744 Other Assets ............................................ 340,329 ------------ Total Other Assets ................................ 7,884,073 ------------ TOTAL ASSETS ..............................................$ 26,523,211 ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable - Trade ................................$ 201,316 Accrued Payroll ......................................... 488,415 Other Accrued Liabilities ............................... 43,233 Deferred State Income Tax Liabilities (Notes 1 and 2) ... 686,500 ------------ Total Current Liabilities ....................... 1,419,464 ------------ Stockholders' Equity Common Stock - No Par Authorized 500 Shares, 274 Shares Issued and Outstanding ................................ 32,800 Retained Earnings ....................................... 25,070,947 ------------ Total Stockholders' Equity ...................... 25,103,747 ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................$ 26,523,211 ============ See Accompanying Notes to the Financial Statements MORAN RESEARCH LABS STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1993 Revenues: Net Sales ............................................$ 62,642,628 Interest and Dividend Income ......................... 8,755 Non-Operating Gains .................................. 79,574 ------------ Total Revenue .................................... 62,730,957 ------------ Costs and Expenses: Cost of Revenues ..................................... 20,851,709 Selling, General and Administrative Expenses ........................................... 9,169,051 Provision for Bad Debts .............................. 3,818,624 Other ................................................ 87,087 ------------ Total Costs and Expenses ......................... 33,926,471 ------------ Income from Continuing Operations before Income Taxes .. 28,804,486 ------------ State Income Taxes (Notes 1 and 2) ................... 1,729,800 ------------ Income from Continuing Operations ...................... 27,074,686 Loss from Discontinued Operations (Net of State Income Tax Benefit of $290,300) (Note 7) ............. ( 4,445,849) ------------ NET INCOME .............................................$ 22,628,837 ============ See Accompanying Notes to the Financial Statements MORAN RESEARCH LABS STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1993 Retained Earnings - Beginning .........................$ 24,278,061 Net Income ......................................... 22,628,837 Distributions ...................................... (21,835,951) ------------ RETAINED EARNINGS - ENDING ............................$ 25,070,947 ============ See Accompanying Notes to the Financial Statements MORAN RESEARCH LABS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1993 CASH FLOWS FROM OPERATING ACTIVITIES Net Income ...........................................$ 22,628,837 Non-Cash Items Included in Net Income: Depreciation and Amortization ................... 1,133,075 Provision for Bad Debts ......................... 3,818,624 Other ........................................... 86,001 Changes in: Accounts Receivable - Trade ..................... ( 4,391,099) Prepaid Insurance and Other Current Assets ...... ( 914,070) Other Assets .................................... ( 1,292) Accounts Payable - Trade ........................ ( 56,346) Accrued Payroll and Other Current Liabilities ... ( 51,336) Deferred State Income Taxes ..................... 96,000 ------------ Net Cash Flows From Operating Activities ............. 22,348,394 ------------ CASH FLOWS USED BY INVESTING ACTIVITIES Proceeds from Sale of Property and Equipment ......... 39,350 Decrease in Net Assets of Discontinued Operations .... 1,898,565 Purchase of Property and Equipment ................... ( 2,748,005) ------------ Net Cash Flows Used by Investing Activities .......... ( 810,090) ------------ CASH FLOWS USED BY FINANCING ACTIVITIES Distributions to Shareholders ........................ (21,835,951) ------------ Decrease in Cash ..................................... ( 297,647) ------------ Cash-Beginning of Year ............................... 643,939 ------------ CASH-END OF YEAR .....................................$ 346,292 ============ See Accompanying Notes to the Financial Statements MORAN RESEARCH LABS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Activities Moran Research Labs (the "Company"), doing business as Bioran Medical Laboratory, primarily performs pathological and analytical tests for the medical profession in the New England area. In addition, the Company operates a hotel (The Snow Inn Resort) and restaurant (Thompson's Clam Bar), located in Harwichport, Massachusetts. These operations are totally unrelated to the Company's clinical laboratory business. In July of 1993, the Company adopted plans to spin-off the operations of The Snow Inn Resort and Thompson's Clam Bar, effective January 1, 1994 (see Note 7). Property and Equipment Property and equipment are carried at cost. Depreciation is provided using both straight-line and accelerated methods over the estimated useful lives of the assets which range from 3 to 40 years. Major classifications of property and equipment are as follows. Leasehold Improvements .................$ 4,483,197 Equipment and Fixtures ................. 8,541,299 Motor Vehicles ......................... 1,430,592 Property and Equipment, at cost ........ 14,455,088 Less: Accumulated Depreciation ........ ( 8,275,821) Property and Equipment, Net ............$ 6,179,267 Depreciation expense for the year ended December 31, 1993 amounted to $995,015. Revenue Recognition The Company recognizes revenue upon completion of the testing process. Billings for service under third party payor programs, including Medicare and Medicaid, are recorded as sales net of allowances for differences between amounts billed and the estimated receipts under such programs. Adjustments to the estimated receipts, based on final settlement with the third party payors, are recorded upon settlement. Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) Income Taxes The Company has elected to be taxed under subchapter S of the Internal Revenue Code. Accordingly, the Company is not subject to nor has it provided for any Federal income taxes as the stockholders are taxed on their proportionate share of the Company's taxable income. On March 2, 1989, the Company became a Massachusetts Business Trust pursuant to a tax free reorganization under Internal Revenue Code section 368(a)(1)(F). This reorganization did not affect the Company's S corporation status for Federal income tax purposes, but does subject the Company to Massachusetts state income taxes. Therefore, a provision for state income taxes is included in these financial statements. In 1992, the Company adopted Financial Accounting Standard No. 109, "Accounting for Income Taxes" (FAS 109), which requires an asset and liability approach to accounting for income taxes. Under this method, state deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabil- ities and their respective tax bases using enacted tax rates in effect for the year in which the difference are expected to reverse. Under FAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period in which the change is enacted. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. Note 2 - STATE INCOME TAXES The provision for income taxes from continuing operations is summarized as follows: Income from Continuing Operations before State Income Taxes ...........$ 28,804,486 State Income Taxes: Currently Payable ................... 1,633,800 Deferred ............................ 96,000 Total .......................$ 1,729,800 For income tax purposes the Company prepares its tax return using the cash basis of accounting. The deferred state income tax liability of $686,500 results from the cash to accrual basis adjustments. Note 3 - PROFIT SHARING PLAN The Company sponsors a profit-sharing plan covering all of its employees. Contributions, which totaled $278,232 for 1993, are determined by a vote of the Board of Directors. The Company files annual plan registration and insurance information with the Internal Revenue Service, in compliance with requirements established by the Employee Retirement Income Security Act of 1974. Note 4 - RELATED PARTY TRANSACTIONS The Company's stockholders own several other businesses, principally involved in the real estate and food distribution industries. The Company leases certain real estate from one of these entities, the S.A. Fennell Limited Partnership. Rental payments to this partnership for 1993 totaled $840,000. The other entities operate independently of the Company. Note 5 - SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION During the year ended December 31, 1993, income taxes paid were $2,014,591. Note 6 - LEASE COMMITMENTS Minimum rental commitments under noncancellable operating leases outstanding at December 31, 1993 are: 1994 .................$ 188,956 1995 ................. 162,541 1996 ................. 102,727 1997 ................. 54,332 1998 ................. 33,279 1999 ................. 10,153 Operating lease rental expense for 1993 amounted to $1,225,388, including $840,000 paid to related parties (see Note 4). In addition to its corporate facilities located in Cambridge, Massachusetts, the Company maintains satellite operations throughout the New England area. Many of these facilities are leased through tenant-at-will arrangements. Note 7 - DISCONTINUED OPERATIONS During July 1993, the Company adopted plans (effective January 1, 1994) to spin-off its non-clinical laboratory operations to its shareholders. These non-clinical laboratory operations (restaurant and hotel) have been accounted for as discontinued operations in accordance with the provisions of Accounting Principles Board Opinion No. 30. Sales, loss from operations, income tax benefit and net loss associated with these discontinued operations for the year ended December 31, 1993 are listed below: Sales ..............................$ 2,791,627 Loss from Operations before Income Tax Benefit ............... 4,736,149 Income Tax Benefit ................. 290,300 Net Loss from Discontinued Operations .......................$ 4,445,849 The loss from the measurement date through December 31, 1993 was $2,815,383. The net assets of the discontinued operations consist of assets of $7,740,000 (principally fixed assets) and liabilities of $196,256. Note 8 - SUBSEQUENT EVENTS On September 8, 1994 the Company entered into an acquisition agreement and plan of reorganization whereby all of the shares of the Company were acquired by Corning Incorporated ("Corning"), a New York business corporation, for 5,960,967 shares of Corning common stock, in a transaction to be accounted for as a pooling of interest. In connection with the acquisition and plan of reorganization, the Company acquired the real property owned by the S.A. Fennell Limited Partnership and leased by the Company for use in its clinical laboratory operations (see Note 4) in exchange for 8.41 shares of its common stock. The number of shares issued was based upon the estimated fair value of the properties. CORNING INCORPORATED Index to Exhibits
Exhibit Description 23 Consent of Leverone & Company, certified public accountants
Exhibit 23 CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS As certified public accountants, we hereby consent to the incorporation in Corning's Current Report on Form 8-K/A of our report dated November 10, 1994 on the financial statements of Moran Research Labs as of and for the year ended December 31, 1993. /s/ LEVERONE & COMPANY Billerica, Massachusetts December 12, 1994 -----END PRIVACY-ENHANCED MESSAGE-----