FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): October 19, 1995
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Zenith Electronics Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-4115 36-1996520
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(State or jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1000 Milwaukee Avenue
Glenview, Illinois 60025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (708) 391-7000
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Not applicable
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
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On October 19, 1995, Zenith Electronics Corporation issued a press
release announcing third quarter 1995 results, which is attached
as Exhibit 20 hereto and is incorporated by reference herein.
Item 7. Financial Statements, Pro forma Financial Information and Exhibits.
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(c) The following exhibit is included as part of this report:
Exhibit 20 - Zenith Electronics Corporation Press Release dated
October 19, 1995.
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 hereunto duly authorized.
ZENITH ELECTRONICS CORPORATION
By: /s/ Richard F. Vitkus
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Richard F. Vitkus
Senior Vice President - General Counsel
and Secretary
Date: October 19, 1995
<PAGE>
Exhibit Index
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Exhibit
Number Exhibit Description
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20 Zenith Electronics Corporation Press Release dated
October 19, 1995.
EXHIBIT 20
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[ LOGO ]
NEWS RELEASE FOR IMMEDIATE RELEASE
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ZENITH ANNOUNCES THIRD-QUARTER PROFIT
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Major Cost Reductions Help Offset Sales Decline,
Contribute to Improvements from First Half
GLENVIEW, Ill., Oct. 19, 1995 -- Zenith Electronics Corporation today
reported a third-quarter 1995 profit of $1.8 million or 4 cents per share,
compared with a profit of $9.4 million, or 21 cents per share, in the
third quarter of 1994. Results for both periods included one-time, non-
recurring items: a $7.5 million tax refund and a $0.8 million gain on asset
sales in the 1995 quarter, compared with a $5.5 million gain on property
sales in the 1994 quarter.
The third-quarter profit represents a substantial improvement from
Zenith's net loss of $69.6 million in the seasonally-weaker first half
of the year, the company said.
Major cost reductions from re-engineering programs and reduced cycle
times, including new initiatives launched in the third quarter, helped
offset the effect of lower sales, lower prices and higher material costs
compared with the third quarter of 1994. The devaluation of the Mexican
peso also had a positive impact on costs again in the third quarter of
this year.
Third-quarter sales were $332 million in 1995 and $419 million in 1994.
Despite this 20 percent decline in overall dollar sales, the domestic
market share of Zenith-brand direct-view color TV was relatively constant
with the third quarter last year. The sales decline reflected a variety of
factors including lower selling prices, very soft direct-view color
television domestic industry conditions, reduced VCR revenues and
significantly lower color TV unit sales in Mexico.
(MORE)
<PAGE>
-2-
Sales of Network Systems products -- set-top boxes and data modems
sold primarily to the cable TV industry -- were essentially unchanged
from the third quarter of 1994. In the third quarter, Zenith announced
a multi-million-dollar agreement with "Mega TV" to provide as many as
200,000 wireless cable decoders for Malaysia's new pay TV operation
over the next six months.
Total sales in the first nine months of 1995 were $879 million, compared
with $1,015 million in the first nine months of 1994. Zenith reported a
net loss of $67.8 million, or $1.46 per share in the first nine months
of 1995, compared with a nine-month 1994 loss of $10.9 million, or 21
cents per share. Nine-month 1995 results include the $7.5 million tax
refund and the $0.8 million gain on asset sales in the third quarter
and $18.0 million in special charges for severance and other non-recurring
items in the second quarter. The 1994 nine-month period included asset
sales of $6.9 million.
The third quarter was marked by major progress in high-definition
television (HDTV) and related digital TV technologies developed by Zenith
and other members of the "Digital HDTV Grand Alliance." The final rounds
of laboratory and field tests of the Grand Alliance system have been
successfully completed, representing some of the last steps in the
eight-year technical evaluation process conducted by by the Federal
Communications Commission (FCC) Advisory Committee on Advanced Television
Service (ACATS). Next month, the ACATS is expected to recommend that
the FCC adopt the Grand Alliance system (including Zenith-developed
digital transmission technology) as the new U.S. digital television
broadcast standard.
(MORE)
<PAGE>
-3-
Also next month, the transaction under which LG Electronics Inc.
(formerly Goldstar Co. Ltd.) will acquire 57.7 percent of the outstanding
shares of Zenith common stock through a tender offer and a direct
investment in Zenith is scheduled to be completed. The $351 million
transaction, announced in July, is subject to Zenith shareholder approval,
as well as the successful completion of the tender offer. Zenith has
scheduled its special shareholders' meeting to vote on the transaction
for Nov. 7. All required government approvals have been obtained.
-30-
MEDIA CONTACT: John Taylor (708) 391-8181
INVESTOR CONTACT: Bill McNitt (708) 391-7713
<PAGE>
ZENITH ELECTRONICS CORPORATION
STATEMENT OF CONSOLIDATED OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
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Sept. 30, Oct. 1, Sept. 30, Oct. 1,
1995 1994 1995 1994
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Net sales $ 332.5 $ 419.4 $ 879.2 $1,015.5
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Costs, expenses and other:
Cost of products sold 303.1 382.3 828.2 928.7
Selling, general and administrative 28.9 28.6 80.2 78.4
Engineering and research 10.7 11.2 34.2 34.0
Other operating expense
(income), net (9.2) (10.8) (19.6) (18.9)
Restructuring and other charges -- -- 18.0 --
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Operating income (loss) (1.0) 8.1 (61.8) (6.7)
Gain on asset sales, net .8 5.5 .8 6.9
Interest expense (5.7) (4.7) (15.1) (11.8)
Interest income .2 .2 .6 .4
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Income (loss) before income taxes (5.7) 9.1 (75.5) (11.2)
Income taxes (credit) (7.5) (.3) (7.7) (.3)
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Net income (loss) $ 1.8 $ 9.4 $ (67.8) $ (10.9)
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Net income (loss) per common share $ .04 $ .21 $ (1.46) $ (.27)
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Weighted average shares outstanding 46.9 44.0 46.5 41.0
