UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1996
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_____________to____________
Commission File Number: 1-4115
ZENITH ELECTRONICS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-1996520
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1000 Milwaukee Avenue, Glenview, Illinois 60025
(Address of principal executive offices) (Zip Code)
(847) 391-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
As of October 31, 1996, there were 66,158,523 shares of Common Stock, par
value $1 per share, outstanding.
<PAGE>
ZENITH ELECTRONICS CORPORATION
FORM 10-Q
INDEX
Page
Number
--------
Part I. Financial Information:
Item 1. Financial Statements
Condensed Consolidated Statements of Operations --
Three and Nine months ended September 28, 1996
and September 30, 1995 3
Condensed Consolidated Balance Sheets --
September 28, 1996, December 31, 1995
and September 30, 1995 4
Condensed Consolidated Statements of Cash Flows --
Nine months ended September 28, 1996
and September 30, 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations 8
Liquidity and Capital Resources 9
Part II. Other Information:
Item 1. Legal Proceedings 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 12
Index to Exhibits 13
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ZENITH ELECTRONICS CORPORATION
------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
-----------------------------------------------------------
In Millions, Except Per Share Amounts
Three Months Ended Nine Months Ended
---------------------- ----------------------
Sept. 28, Sept. 30, Sept. 28, Sept. 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
Net sales $ 340.8 $ 332.5 $ 860.3 $ 879.2
---------- ---------- ---------- ----------
Costs, expenses and other:
Cost of products sold 320.4 299.7 819.4 820.5
Selling, general and
administrative 51.7 32.2 123.5 87.9
Engineering and research 11.7 10.8 34.6 34.2
Other operating expense
(income), net (Note 2) (6.8) (9.2) (16.7) (19.6)
Restructuring and other
charges - - - 18.0
---------- ---------- ---------- ----------
Operating income (loss) (36.2) (1.0) (100.5) (61.8)
Gain on asset sales, net - 0.8 0.3 0.8
Interest expense (4.0) (5.7) (10.9) (15.1)
Interest income 0.3 0.2 2.7 0.6
---------- ---------- ---------- ----------
Income (loss) before income taxes (39.9) (5.7) (108.4) (75.5)
Income taxes (credit) 0.3 (7.5) 0.3 (7.7)
---------- ---------- ---------- ----------
Net income (loss) $ (40.2) $ 1.8 $ (108.7) $ (67.8)
========== ========== ========== ==========
Net income (loss) per common
share (Note 3) $ (0.61) $ 0.04 $ (1.67) $ (1.46)
========== ========== ========== ==========
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
ZENITH ELECTRONICS CORPORATION
------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
-------------------------------------------------
In Millions
Sept. 28, December 31, Sept. 30,
1996 1995 1995
-------- ------------ --------
ASSETS
- ------
Current assets:
Cash $ - $ 93.2 $ -
Receivables, net of allowance for
doubtful accounts of $5.3, $3.6
and $3.3, respectively 230.5 201.3 215.7
Inventories (Note 4) 307.1 192.2 265.3
Other 8.4 7.8 7.6
-------- ------------ --------
Total current assets 546.0 494.5 488.6
Property, plant and equipment, net 200.8 184.7 182.1
Other 11.5 11.1 15.4
-------- ------------ --------
Total assets $ 758.3 $ 690.3 $ 686.1
======== ============ ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Short-term debt (Note 5) $ 42.2 $ - $ 45.5
Current portion of long-term
debt (Note 5) 16.7 9.0 6.5
Accounts payable 177.5 71.8 116.5
Income taxes payable 0.9 1.2 1.4
Accrued expenses 145.1 132.4 130.4
-------- ------------ --------
Total current liabilities 382.4 214.4 300.3
Long-term debt (Note 5) 155.6 168.8 215.5
Stockholders' equity:
Preferred stock - - -
Common stock (Note 6) 66.6 63.5 47.0
Additional paid-in capital 458.8 440.0 295.1
Retained earnings (deficit) (303.4) (194.7) (170.1)
Treasury stock (1.7) (1.7) (1.7)
-------- ------------ --------
Total stockholders' equity 220.3 307.1 170.3
-------- ------------ --------
Total liabilities and
stockholders' equity $ 758.3 $ 690.3 $ 686.1
======== ============ ========
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
ZENITH ELECTRONICS CORPORATION
------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-----------------------------------------------------------
In Millions
Increase (Decrease) in Cash
Nine Months Ended
---------------------------
Sept. 28, Sept. 30,
1996 1995
------------ -----------
Cash flows from operating activities:
Net income (loss) $ (108.7) $ (67.8)
Adjustments to reconcile net income (loss) to
net cash used by operations:
Depreciation 26.1 25.2
Other 1.3 (0.4)
Employee retirement plan contribution
made in stock 5.3 -
Gain on asset sales, net (0.3) (0.8)
Changes in assets and liabilities:
Current accounts (27.2) (20.4)
Other assets (3.4) (0.8)
----------- -----------
Net cash used by operating activities (106.9) (65.0)
----------- -----------
Cash flows from investing activities:
Capital additions (42.6) (42.4)
Proceeds from asset sales 4.3 2.8
----------- -----------
Net cash used by investing activities (38.3) (39.6)
----------- -----------
Cash flows from financing activities:
Short-term borrowings, net 42.2 45.5
Proceeds from issuance of long-term debt - 40.0
Proceeds from issuance of common stock, net 15.3 10.2
Principal payments on long-term debt (5.5) -
----------- -----------
Net cash provided by financing activities 52.0 95.7
----------- -----------
Decrease in cash (93.2) (8.9)
Cash at beginning of period 93.2 8.9
----------- -----------
Cash at end of period $ - $ -
=========== ===========
Increase (decrease) in cash attributable to
changes in current accounts:
Receivables, net $ (29.7) $ (0.7)
Income taxes, net (0.3) (6.2)
Inventories (114.9) (20.1)
Other assets (0.7) 2.3
Accounts payable and accrued expenses 118.4 4.3
----------- -----------
Net change in current accounts $ (27.2) $ (20.4)
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid (refunded) during the period for:
Interest $ 8.1 $ 11.7
Income taxes 0.8 (1.0)
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
Zenith Electronics Corporation
-------------------------------
Notes to Condensed Consolidated Financial Statements (Unaudited)
------------------------------------------------------------------
Note 1 - Basis of presentation
The accompanying unaudited condensed consolidated financial statements
("financial statements") have been prepared in accordance with generally
accepted accounting principles and pursuant to the rules and regulations
of the Securities and Exchange Commission. The accuracy of the amounts in
the financial statements is in some respects dependent upon facts that
will exist, and procedures that will be performed by the company, later
in the year. In the opinion of management, all adjustments necessary for
a fair presentation of the financial statements have been included and are
of a normal, recurring nature. For further information, refer to the
consolidated financial statements and notes thereto included in the
company's Form 10-K for the year ended December 31, 1995.
Note 2 - Other operating expense (income)
Royalty income accrued in relation to tuning system patents was $6.6 million
and $16.2 million for the three and nine months ended September 28, 1996,
respectively, and $7.3 million and $16.5 million for the three and nine
months ended September 30, 1995, respectively. These amounts are included
in Other Operating Expense (Income).
Note 3 - Earnings per share
Primary earnings per share are based upon the weighted average number of
shares outstanding and common stock equivalents, if dilutive. Fully
diluted earnings per share, assuming conversion of the 6-1/4% convertible
subordinated debentures and the 8.5% convertible senior subordinated
debentures, are not presented because the effect of the assumed conversion
is antidilutive. The weighted average number of shares was 66.1 million
and 64.9 million for the three and six months ended September 28, 1996,
respectively, and 46.9 million and 46.5 million for the three and six
months ended September 30, 1995, respectively.
Note 4 - Inventories
Inventories consisted of the following (in millions):
Sept. 28, December 31, Sept. 30,
1996 1995 1995
---------- ------------ ----------
Raw materials and work-in-process $ 189.7 $ 128.7 $ 166.2
Finished goods 127.8 73.9 107.9
---------- ------------ ----------
317.5 202.6 274.1
Excess of FIFO cost over LIFO cost (10.4) (10.4) (8.8)
---------- ------------ ----------
Total $ 307.1 $ 192.2 $ 265.3
========== ============ ==========
As of September 28, 1996, December 31, 1995 and September 30, 1995,
$31.1 million, $27.8 million and $47.1 million, respectively, of inventories
were valued using the LIFO method.
An actual determination of inventory under the LIFO method can only be
made at the end of each year based on the inventory levels and costs at that
time. Accordingly, interim LIFO calculations are based on management's
estimates of expected year-end inventory levels and costs. Since these
estimates are subject to many factors beyond management's control, interim
results are subject to the final year-end LIFO inventory determination.
Note 5 - Short-term debt and credit arrangements; Long-term debt
On May 21, 1996, the company entered into an amendment (the "First Amendment")
to its $110 million Second Amended and Restated Credit Agreement and its
$40 million First Amended and Restated Term Loan Agreement, both dated
November 6, 1995 (the "Loan Agreements"), among the company, General Electric
Capital Corporation, as agent for itself and the other lenders named therein.
The First Amendment (i) revised the maximum capital expenditure levels,
increasing the amount for 1996 from $142.0 million to $180.0 million and
(ii) revised the minimum net worth levels, reducing the amounts from
$245.0 million to $215.0 million as of June 29, 1996, and from $245.0 million
to $211.0 million for every quarter thereafter.
The Loan Agreements contain restrictive financial covenants that must be
maintained as of the end of each fiscal quarter, including a liabilities
to net worth ratio and a minimum net worth amount. As of September 28, 1996,
the ratio of liabilities to net worth was required to be not greater than
4.00 to 1.0 and was actually 2.44 to 1.0, and net worth was required to be
equal to or greater than $211.0 million and was actually $220.3 million. At
the end of each fiscal quarter through April 4, 1998, the liabilities to net
worth ratio is required to be maintained at 4.00 to 1.0, and minimum net worth
is required to be $211.0 million. The Agreements restrict the amount of
capital expenditures by the company in each fiscal year. For the fiscal
years 1996, 1997 and each fiscal year thereafter, the company is permitted
to make capital expenditures (as defined in the Loan Agreements) of up to
$180.0 million, $87.0 million and $60.0 million, respectively.
In addition, there are restrictions regarding investments, acquisitions,
guaranties, transactions with affiliates, sales of assets, mergers and
additional borrowings, along with limitations on liens. The Agreements
prohibit dividend payments on the company's common stock, restricts dividend
payments on any of its preferred stock, if issued, and prohibits the
redemption or repurchase of stock.
Note 6 - Stockholders' equity
During the first-quarter of 1996 the company issued 782,382 shares of
common stock to its profit-sharing retirement plans to fulfill the 1995
retirement plan obligation to eligible salaried and hourly U.S. employees.
Stockholders' equity increased by $5.3 million as a result of this
transaction.
During the nine months ended September 28, 1996, the company sold 1.8
million shares of common stock to employees of the company via the exercise
of previously issued stock options. Stockholders' equity increased by $15.3
million as a result of these sales of common stock.
Note 7 - Reclassifications
Certain prior-year amounts have been reclassified to conform with the
presentation currently used.
Note 8 - Related party
On November 8, 1995, LG Electronics, Inc. ("LGE") and its majority owned
subsidiary LG Semicon Co. LTD., purchased 18,619,000 shares of common stock
of the company pursuant to LGE's tender offer at $10.00 per share, and
purchased 16,500,000 newly issued shares of common stock from the company
at $10.00 per share. After giving effect to such transactions, LGE
beneficially owns 36,569,000 shares of common stock, which represents
approximately 55 percent of the outstanding common stock as of September 28,
1996.
The following represent the most significant transactions between the
company and LGE during the three and nine months ended September 28, 1996,
all of which, in the opinion of management, were made at an arms-length
basis:
Product purchases: In the ordinary course of business, the company
purchases VCRs, TV-VCR combinations and components from LGE and its
affiliates. The company purchased $43.0 million and $77.0 million of
these items during the three and nine months ended September 28, 1996,
respectively. Sales of products purchased from LGE and its affiliates
contributed $52.5 million and $95.9 million to sales for the three and nine
months ended September 28, 1996, respectively.
Product and other sales: The company sells CRT tubes and yokes and other
manufactured subassemblies to LGE and its affiliates at prices that equate to
amounts charged by the company to its major customers. Sales by the company
to LGE and its affiliates were $9.4 million and $18.7 million during the
three and nine months ended September 28, 1996, respectively.
As of September 28, 1996, receivables included $5.4 million from LGE
and its affiliates and accounts payable included $75.6 million to LGE and
its affiliates.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The company reported a third-quarter 1996 net loss of $40.2 million, or
61 cents per share, compared with net income of $1.8 million, or 4 cents
per share, in the third quarter of 1995. Third-quarter 1995 results
included a $7.5 million tax credit. Total third-quarter sales were $340.8
million in 1996 and $322.5 million in 1995.
The 1996 quarterly loss reflected significantly higher expenses,
primarily executive severance, consulting fees, and provisions associated
with inventories and receivables. While overall sales were higher than
in the 1995 quarter, margins were down due to lower selling prices, delays
in new model shipments for higher-margin Consumer Electronics products and
the provisions associated with inventories.
Consumer Electronics revenues increased in the 1996 quarter, driven
largely by higher VCR sales. The company's domestic direct-view color
television unit sales were flat compared with the 1995 quarter, while
industry color TV unit sales to dealers declined. The company's sales
of color picture tubes to other manufacturers were down in the quarter.
International and Commercial Products sales rose, compared with the 1995
quarter.
Network Systems revenues were down significantly in the quarter compared
with a year ago because of slowing industry-wide demand for analog set-top
boxes as cable operators prepare to launch digital networks. Industry
and the company's shipments of cable modems, while still relatively small,
rose in the 1996 quarter. During the quarter, the company signed a five-year
agreement with the Americast programming venture to provide up to 3 million
digital set-top boxes to telecommunications companies. Initial shipments
under this contract are expected to begin by mid-1997.
Selling, general and administrative expenses were $51.7 million in the
third quarter of 1996, compared with $32.2 million in the previous year.
The 61 percent increase was due mainly to executive severance, consulting
fees, the provisions associated with receivables and co-op advertising
expenses (due to 1995 changes in distribution).
Results for the third quarter include $6.6 million of accrued royalty
revenues from tuning system licenses. These revenues were $7.3 million in
the third quarter of 1995.
For the first nine months of 1996 the company reported a net loss of
$108.7 million, or $1.67 per share, compared with a net loss of $67.8
million, or $1.46 per share for the first nine months of 1995. The 1995 net
loss included $18.0 million of restructuring and other charges and the $7.5
million tax credit. Nine month sales were $860.3 million in 1996 compared
with $879.2 million in 1995. Domestic industry color television selling
prices in the first nine months of 1996 were substantially lower than a
year ago and while these selling prices are not expected to increase during
the remainder of 1996, no further price erosion is anticipated.
During 1996 the company has announced a series of product initiatives
based on its set-top box and cable modem technologies that contemplate (i)
the licensing of certain technology from DiviCom Inc., for use in development
of digital set-top terminals for wired and wireless video networks, and
(ii) cable modem announcements with U.S. Robotics, Inc., Microsoft
Corporation and Cisco Systems regarding future product collaborations. In
addition, the company announced an agreement to collaborate with a privately
held software company, Diba Inc., on interactive television technology that
will allow TV viewers to access the Internet on their television screens.
The company plans to begin shipments of "NetVision" Web-browsing TVs in 1997.
The company has not yet recognized any revenues from these recently
announced product initiatives and does not anticipate significant revenues
from these initiatives in 1996. Whether the company will achieve
significant revenues or profits from these product initiatives in the near
term or ever will depend largely on market acceptance of the products
and the existence of competitive products. The company expects from time
to time in the future to announce other product initiatives. The ultimate
contribution of any such initiatives to the financial performance of the
company will similarly depend on such factors.
Liquidity and Capital Resources
Cash decreased $93.2 million during the nine months ended September 28,
1996. The decrease consisted of $106.9 million of cash used by operating
activities and $38.3 million of cash used to purchase fixed assets, net of
proceeds from asset sales, offset by $52.0 million of cash provided from
financing activities.
During the nine months ended September 28, 1996, the $106.9 million
of cash used by operating activities principally funded a $82.6 million
net loss as adjusted for depreciation and a $27.2 million change in
current accounts. The change in current accounts was composed primarily of
a $114.9 million increase in inventories (mainly to support higher projected
shipment schedules in the fourth quarter) and a $29.7 million increase in
receivables, partially offset by a $105.7 million increase in accounts
payable (mainly as a result of the increased inventory level) and a $12.7
million increase in accrued expenses. In addition, the company reduced cash
used by operating activities by issuing common stock to the profit-sharing
retirement plans to fulfill the 1995 obligation to salaried employees and
some hourly employees. This issuance increased stockholders' equity by $5.3
million.
During the nine months ended September 28, 1996, investing activities
used $38.3 million of cash which consisted of capital expenditures of
$42.6 million offset by $4.3 million of proceeds from asset sales. For
the same period of 1995, capital expenditures were $42.4 million. The
company anticipates making significant capital expenditures during the
remainder of 1996 and during 1997 due to planned capital investment
projects, primarily in the color picture tube area, which include new
automated production processes and the addition of new production lines
for computer display tubes. The company has decided to temporarily delay
construction activities at the planned large-screen picture tube
manufacturing facility in Woodridge, IL, as it explores a range of financing
alternatives and studies industry dynamics.
During the nine months ended September 28, 1996, financing activities
provided $52.0 million of cash which consisted of $42.2 million of
borrowings under the company's Credit Agreement, $15.3 million of proceeds
from the issuance of common stock (to employees of the company via the
exercise of previously issued stock options) less $5.5 million of cash
used to pay maturities of the Term Loan Agreement.
As of September 28, 1996, the company had interest-bearing obligations
that consisted of $155.6 million of long-term debt, the current portion
($10.9 million) of the Term Loan Agreement, the current portion ($5.8 million)
of the 6-1/4% Convertible Subordinated Debentures due 2011 and $72.4 million
of extended-term payables with LG Electronics, Inc. ("LGE"). The company's
long-term debt is composed of $109.3 million of 6-1/4% Convertible
Subordinated Debentures due 2011 that require annual sinking fund payments
of $5.8 million beginning in 1997, $24.3 million aggregate principal amount
of 8.5% Senior Subordinated Convertible Debentures due 2000 and 2001, and
the long-term portion of the Term Loan Agreement ($22.0 million). The Term
Loan Agreement requires scheduled quarterly principal payments over the
life of the loan with a balloon payment of $17 million due on the termination
date of the loan, June 30, 1998.
The company's Credit Agreement and Term Loan Agreement (the " Loan
Agreements") contain identical financial covenants that must be maintained
as of the end of each fiscal quarter, including a liabilities to net worth
ratio and a minimum net worth amount. In addition, the Loan Agreements
restrict the amount of capital expenditures by the company in each fiscal
year. (See Note 5 to the Condensed Consolidated Financial Statements for
further discussion on the financial covenants.) The company anticipates
that it may be required to initiate discussions with the lenders under
the Loan Agreements to relax certain financial covenants. However,
there can be no assurance that the lenders will approve amendments, if
requested by the company. If the company were to be out of compliance
with a financial covenant, it could be required to repay any amounts then
outstanding under the Loan Agreements or under its other debt agreements.
In order to support the planned capital investment projects along with
seasonal working capital requirements, the company is pursuing a full range of
financing options which would provide an alternative to the Loan Agreements.
The company is developing a plan for a secured receivable financing in an
aggregate amount of approximately $200 million. It is likely to be a
condition to the receivable financing that LGE provides credit support.
LGE has indicated a willingness to consider providing such support subject
to its review of the company's 1997 business plan and a mutual agreement
on a fair fee for providing such support. In addition, the company
continues to explore supplemental financing options, including new
borrowing agreements (possibly secured by inventories or tuner royalty
patents) and leasing transactions.
There can be no assurance that the company will not experience
liquidity problems in the future because of adverse market conditions or
other unfavorable events. However, the company believes (i) that its Loan
Agreements, together with extended-term payables expected to be available
from LGE will be adequate to meet its seasonal working capital, capital
expenditure and other requirements during the remainder of 1996, and (ii)
that its Loan Agreements or the potential receivable financing, together with
extended-term payables expected to be available from LGE and the result
of the company's efforts to obtain other financing sources, will be adequate
to meet its seasonal working capital, capital expenditure and other
requirements during 1997.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The company received a Notice of Potential Liability and Request
for Information from the U.S. Environmental Protection Agency ("USEPS")
dated August 30, 1996, concerning the former Master Metals, Inc. facility
located in Cleveland, Ohio, alleging that the company sent hazardous waste
to this site. Preliminary investigation indicates that the company shipped
lead frit and broken tube glass to the site during the period of 1991 - 1993.
During the three months ended September 28, 1996, no other reportable
events or material developments occurred regarding the legal proceedings
of the company that would need to be reported.
Item 5. Other Information
On November 4, 1996, the company announced that its Board of Directors
had elected Peter S. Willmott president and chief executive officer ("CEO")
of the company. Mr. Willmott, who has held positions with Federal Express
Corp. and Carson Pirie Scott & Co., has been a member of the company's board
since 1990 and has served as interim CEO and president since July, when
Albin F. Moschner resigned as president and CEO. In addition, the company
announced that the Board of Directors elected John Koo, president and CEO
of LG Electronics, Inc. ("LGE"), as vice chairman of the company's board.
KS Cho, newly named president of LGE's North American Operations and a
director of the company since November 1995, has been elected to succeed
Mr. Koo as chairman of the Executive Committee of the company's board.
Item 6. Exhibits and Reports on Form 8-K
(4a) Indenture dated as of April 1, 1986 between Zenith Electronics
Corporation and The First National Bank of Boston as Trustee
with respect to the 6-1/4% Convertible Subordinated Debentures due
2011 (incorporated by reference to Exhibit 1 of the company's
Quarterly Report on Form 10-Q for the quarter ended March 30, 1991)
(4b) Debenture Purchase Agreement dated as of November 19, 1993 with the
institutional investors named therein (incorporated by reference to
Exhibit 4(a) of the company's Current Report on Form 8-K dated
November 19, 1993)
(4c) Amendment No. 1 dated November 24, 1993 to the Debenture Purchase
Agreement dated as of November 19, 1993 with the institutional
investor named therein (incorporated by reference to Exhibit 4(a)
of the company's Current Report on Form 8-K dated November 24, 1993)
(4d) Amendment No. 2 dated as of January 11, 1994 to the Debenture Purchase
Agreement dated as of November 19, 1993 (incorporated by reference to
Exhibit 4(c) of the company's Current Report on Form 8-K dated
January 11, 1994)
(4e) Debenture Purchase Agreement dated as of January 11, 1994 with the
institutional investor named therein (incorporated by reference
to Exhibit 4(a) of the company's Current Report on Form 8-K
dated January 11, 1994)
(4f) Stockholder Rights Agreement, dated as of October 3, 1986 (incorporated
by reference to Exhibit 4c of the company's Quarterly Report on Form
10-Q for the quarter ended September 28, 1991)
(4g) Amendment, dated April 26, 1988, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 4(d) of the company's Quarterly
Report on Form 10-Q for the quarter ended April 3, 1993)
(4h) Amended and Restated Summary of Rights to Purchase Common Stock
(incorporated by reference to Exhibit 4(e) of the company's Quarterly
Report on Form 10-Q for the quarter ended July 3, 1993)
(4i) Amendment, dated July 7, 1988, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 4(f) of the company's Quarterly
Report on Form 10-Q for the quarter ended July 3, 1993)
(4j) Agreement, dated May 23, 1991, among Zenith Electronics Corporation,
The First National Bank of Boston and Harris Trust and Savings Bank
(incorporated by reference to Exhibit 1 of Form 8 dated May 30, 1991)
(4k) Amendment, dated May 24, 1991, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 2 of Form 8 dated May 30, 1991)
(4l) Agreement, dated as of February 1, 1993, among Zenith Electronics
Corporation, The Bank of New York and Harris Trust and Savings Bank
(incorporated by reference to Exhibit 1 of Form 8 dated March 25, 1993)
(4m) Amendment, dated July 17, 1995, to Stockholder Rights Agreement
(incorporated by reference to Exhibit 4 of the company's Current Report
on Form 8-K dated July 17, 1995)
(4n) Second Amended and Restated Credit Agreement, dated as of November 6,
1995, with General Electric Capital Corporation, as agent and
lender, and the other lenders named (incorporated by reference
to Exhibit 4g of the company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995)
(4o) First Amended and Restated Term Loan Agreement, dated as of November
6, 1995, with General Electric Capital Corporation, as agent and lender,
and the other lenders named (incorporated by reference to Exhibit 4i
of the company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995)
(4p) First Amendment to Second Amended and Restated Credit Agreement and
First Amended and Restated Term Loan Agreement, dated as of May 21,
1996, with General Electric Capital Corporation, as agent and lender,
and the other lenders named (incorporated by reference to Exhibit
4p of the company's Quarterly Report on Form 10-Q for the quarter
ended June 29, 1996)
(4q) Second Amendment to Second Amended and Restated Credit Agreement
and First Amended and Restated Term Loan Agreement, dated as of
June 26, 1996, with General Electric Capital Corporation, as agent
and lender, and the other lenders named (incorporated by reference
to Exhibit 4q of the company's Quarterly Report on Form 10-Q
for the quarter ended June 29, 1996)
(27) Financial Data Schedule for the nine months ended September 28, 1996
(b) Reports on Form 8-K:
A report on Form 8-K dated July 24, 1996, was filed by the company
stating under Item 5 that on July 24, 1996, Mr. Albin F. Moschner resigned
as president, chief executive officer and director of the company. Mr. Peter
S. Willmott, a director of the company since 1990, was named interim
president and chief executive officer.
A report on Form 8-K dated August 22, 1996, was filed by the company
stating under Item 5 that Americast, the programming venture of Ameritech
Corporation, BellSouth Corporation, GTE Corporation, SBC Communications
and The Walt Disney company, has signed a non-exclusive contract for the
purchase by subsidiaries of Ameritech, BellSouth, GTE and SBC of at
least three million digital set-top boxes from the company for its
"americast" home entertainment service. In addition, the company announced
plans to (i) build a $100 million state-of-the-art picture tube manufacturing
facility in Woodridge, IL, and (ii) invest $80 million in its Melrose Park,
IL, manufacturing facility to automate existing television picture tube
production lines and to install a new line for computer display tubes.
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.
ZENITH ELECTRONICS CORPORATION
(Registrant)
Date: November 12, 1996
By: /s/ Roger A. Cregg
- ---------------------------
Roger A. Cregg
Executive Vice President -
Chief Financial Officer
(Principal Financial Officer)
INDEX TO EXHIBITS
Exhibits:
(27) Financial Data Schedule for the nine months ended September 28, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-28-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 236
<ALLOWANCES> 5
<INVENTORY> 307
<CURRENT-ASSETS> 546
<PP&E> 759
<DEPRECIATION> 558
<TOTAL-ASSETS> 758
<CURRENT-LIABILITIES> 382
<BONDS> 0
<COMMON> 66
0
0
<OTHER-SE> 154
<TOTAL-LIABILITY-AND-EQUITY> 758
<SALES> 860
<TOTAL-REVENUES> 860
<CGS> 819
<TOTAL-COSTS> 819
<OTHER-EXPENSES> 158
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11
<INCOME-PRETAX> (108)
<INCOME-TAX> 0
<INCOME-CONTINUING> (108)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (109)
<EPS-PRIMARY> (1.67)
<EPS-DILUTED> (1.67)
</TABLE>
