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): February 15, 1995
Zenith Electronics Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-4115 36-1996520
(State or jurisdiction (Commission File (IRS Employer
of incorporation) Number) identification No.)
1000 Milwaukee Avenue
Glenview, Illinois 60025
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (708) 391-7000
Not applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On February 15, 1995, Zenith Electronics Corporation issued a press
release announcing fourth quarter and full year financial results
for 1994, 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 exhibits are included as part of this report:
Exhibit 20 - Zenith Electronics Corporation Press Release dated
February 15, 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/ David S. Levin
------------------------
David S. Levin, Secretary
Date: February 15, 1995
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Exhibit Index
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Exhibit
Number Exhibit Description
- ------- --------------------
20 Press Release dated February 15, 1995.
FOR IMMEDIATE RELEASE
---------------------
ZENITH ANNOUNCES 1994 RESULTS,
NARROWS LOSS BY $83 MILLION
GLENVIEW, Ill., Feb. 15, 1995 -- Reflecting a significant increase in
sales and major progress in implementing its re-engineering programs,
Zenith Electronics Corporation narrowed its full-year loss by $83 million
in 1994 compared with 1993, the company announced today.
The company's 1994 net loss was $14.2 million, or 34 cents per share,
compared with a 1993 net loss of $97.0 million, or $3.01 per share.
(Results for 1993 included $31 million of restructuring and other charges.)
Sales in 1994 rose by 20 percent to $1,469 million from $1,228 million
in 1993, despite $46 million in lower consumer products prices and $59
million in lower sales for non-core business areas.
For the fourth quarter of 1994, Zenith reported a net loss of $3.3 million,
or 7 cents per share, compared with a net loss of $36.0 million (including
the $31 million in special charges), or $1.04 per share, in the fourth quarter
of 1993.
"We made significant progress on our road to recovery in 1994 as we
focused on our core Consumer Electronics and Network Systems business,"
said Chairman and Chief Executive Officer Jerry K. Pearlman. "While the
pricing environment continues to be difficult, Zenith is emerging as a much
stronger competitor."
He cited the success of company-wide re-engineering efforts that reduced
full-year costs by about $40 million and the re-positioning of Zenith's color
TV and cable products that helped boost core business revenues by about $300
million. The North American Free Trade Agreement (NAFTA) also had a
positive effect on Zenith's results by increasing sales of TVs in Mexico and
picture tubes in the United States, and by reducing duties.
Industry color TV unit sales to dealers increased by 9.6 percent to a
record 27.4 million units in 1994. Zenith's overall rate of increase was
stronger than the industry's, and especially strong in key industry-growth
categories, such as projection TV, large-screen table models and combination
TV-VCR products.
Zenith's sales of color picture tubes to other manufacturers increased in
1994, due in large part to increased demand resulting from the NAFTA. The
industry-wide glass shortage did not limit Zenith's picture tube production.
In fact, the company expanded production capacity in 1994 and raised picture
tube prices.
Revenues were up by about 40 percent for Zenith's Network Systems business
area, which designs and manufactures set-top boxes and other products primarily
for cable TV operators. Spurring the sales growth in this core business area
was the strong acceptance of set-top boxes with new on-screen display and
interactive capabilities.
Sales for non-core businesses, primarily the magnetics and computer monitor
business areas that were sold or phased out in 1994, declined to $22 million
from $81 million in 1993. Zenith's improved overall results in 1994 reflect a
significant reduction in losses from non-core businesses.
Zenith realized a gain of $11 million on 1994 asset sales, including more
than 3 million square feet of excess plant and office space, 98 acres of
vacant land, and assets related to the magnetics business.
The fourth-quarter 1994 loss of $3.3 million compares to a loss of $5.0
million (excluding the restructuring and other charges) in the fourth quarter
of 1993. The 1994 quarterly results reflect the positive effect of higher
sales and cost reductions, which was offset in part by $13 million of
year-over-year price declines, including a $4 million accrual for further
price actions implemented in late 1994 and early 1995. A $4 million gain on
the sale of vacant land was offset by a $4 million reserve related to the
replacement of defective integrated circuits in some cable decoders. In
addition, the fourth quarter reflected significant increases in advertising
expenses.
Sales were $454 million in the fourth quarter of 1994, a 26 percent
increase from $361 million in the 1993 fourth quarter. Non-core business
sales were $6 million in the quarter, a decline of $8 million from the same
period a year earlier. Although the color TV sales growth rate slowed for the
industry in November and December and for Zenith in December, the company's
unit sales for color TVs and set-top boxes both were up sharply in the quarter.
Through the first five weeks of 1995, industry and Zenith color TV unit
sales to dealers have declined compared with the same period last year in
both the United States and Mexico. Zenith's first-quarter sales also have
been affected by start-up problems, which now appear to be resolved, related
to a new distribution center.
MEDIA CONTACT: John Taylor (708) 391-8181
INVESTOR CONTACT: Bill McNitt (708) 391-7713
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ZENITH ELECTRONICS CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------- -------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1994 1993 1994 1993
-------- -------- -------- --------
Net sales $ 453.5 $ 361.2 $1,469.0 $1,228.2
-------- -------- --------- ---------
Costs, expenses and other:
Cost of products sold 421.5 335.1 1,350.2 1,163.9
Selling, general and administrative 38.7 24.3 117.1 92.5
Engineering and research 11.4 11.2 45.4 47.8
Other operating expense (income), net (14.7) (8.7) (33.6) (25.2)
Restructuring and other charges -- 31.0 -- 31.0
-------- -------- --------- ---------
Operating income (loss) (3.4) (31.7) (10.1) (81.8)
Gain on asset sales, net 4.1 -- 11.0 --
Interest expense (4.1) (4.4) (15.9) (15.5)
Interest income .1 -- .5 .3
-------- -------- --------- ---------
Income (loss) before income taxes (3.3) (36.1) (14.5) (97.0)
Income taxes (credit) -- (.1) (.3) --
-------- -------- --------- ---------
Net income (loss) $ (3.3) $ (36.0) $ (14.2) $ (97.0)
======== ======== ========= =========
Net income (loss) per share of
common stock $ (.07) $ (1.04) $ (.34) $ (3.01)
======== ======== ========= =========
Average shares outstanding 45.1 34.7 42.0 32.3
