SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 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
<PAGE>
Item 5. Other Events
Corning is filing herewith Unaudited Pro Forma Combined Financial Information
as of and for the forty weeks ended October 9, 1994.
Item 7. Pro Forma Financial Information:
Corning Incorporated
Unaudited Pro Forma Combined Financial Information 4
Combined Statement of Income for the year ended January 2, 1994 5
Combined Statement of Income for the forty weeks ended October 9, 1994 6
Combined Balance Sheet as of October 9, 1994 7
Notes to Unaudited Pro Forma Combined Financial Information 8
<PAGE>
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
<PAGE>
CORNING UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The Unaudited Pro Forma Combined Financial Information (the "Unaudited Pro
Forma Information") is presented to reflect the estimated impact on Corning's
Financial Statements of the following completed transactions (collectively,
the "Transactions"):
* The acquisition of Damon Corporation ("Damon") in August 1993, at a total
purchase price of approximately $405 million, including acquisition expenses.
The transaction has been accounted for as a purchase.
* The acquisition of Bioran Medical Laboratory ("Bioran") for 6.0 million
Corning Common Shares in October 1994. The Bioran transaction has been
accounted for as a pooling of interests.
* The acquisition of Costar Corporation ("Costar") in September 1993, the
transaction with Unilab Corporation ("Unilab") in November 1993, and other
acquisitions completed in 1993 (collectively, the "Other 1993 Transactions")
which individually and in the aggregate are not significant. The Costar
merger and the Unilab transaction are described in Notes 4 and 5,
respectively.
* The acquisition of the optical-fiber and optical-cable businesses of
Northern Telecom Limited ("NTL") by Corning and Siecor Corporation ("Siecor")
for $131 million in February 1994, the Vitro, S.A. ("Vitro") transaction
completed in February 1994, the acquisition of Maryland Medical Laboratory,
Inc. ("Maryland Medical") for 4.5 million Corning Common Shares in June 1994,
the acquisition of Nichols Institute ("Nichols") for 7.5 million Corning
Common Shares and options to purchase approximately 1.1 million Corning
Common Shares, and the pending acquisition of certain assets relating to the
hardware and equipment components business of NTL by Siecor for $130 million
in December 1994 (collectively, the "Other 1994 Transactions"). These
transactions individually and in the aggregate are not significant. The NTL
transactions completed in February and pending completion have been or will
be accounted for as purchases and the Maryland Medical and Nichols
transactions have been accounted for as poolings of interests. The Vitro
transaction is described in Note 6.
The NTL transaction completed in February 1994 and the Vitro transaction were
financed by the issuance of 8.0 million Corning Common Shares in February
1994.
* The issuance (the "MIPS Offering") by Corning Delaware L.P. ("Corning
Delaware") of $373.8 million aggregate principal amount of Convertible
Monthly Income Preferred Securities (the "Preferred Securities") completed in
July 1994 and the use of the net proceeds thereof by Corning to retire the
indebtedness incurred in connection with the Damon transaction.
The Unaudited Pro Forma Combined Statements of Income for the year ended
January 2, 1994, and the forty weeks ended October 9, 1994, assume that the
Transactions had been completed on January 4, 1993. The Unaudited Pro Forma
Combined Balance Sheet at October 9, 1994, assumes that the Transactions had
been completed by that date. Corning's consolidated financial statements for
periods prior to the pooling of interests transactions have not been restated
since the combined impact of these acquisitions is not material to Corning's
financial position or results of operations.
The Unaudited Pro Forma Information gives effect only to the adjustments set
forth in the accompanying notes and does not reflect any synergies
anticipated by Corning's management as a result of these acquisitions. The
Unaudited Pro Forma Information is not necessarily indicative of the results
of operations or financial position which would have been achieved had the
Transactions been completed as of the beginning of the earliest period
presented, nor is it necessarily indicative of Corning's future results of
operations or financial position.
Corning has completed several business dispositions in 1994 which
individually and in the aggregate are not significant to Corning's
consolidated financial statements. As such, pro forma data on these
transactions are not presented.
The Unaudited Pro Forma Information should be read in conjunction with the
historical financial statements of Corning, Damon and Bioran. Damon's
historical financial statements are included in Corning's Current Reports on
Form 8-K dated August 4, 1993 and August 13, 1993. Bioran's historical
financial statements are included in Corning's Current Report on Form 8-K/A
dated December 12, 1994.
<PAGE>
CORNING
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
YEAR ENDED JANUARY 2, 1994
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Other
Other 1993 1994 Pro Forma
Corning (1) Damon (2) Bioran (3) Transactions(4) Transactions(5) Adjustments(6) As Adjusted(7)
Revenues
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $4,004.8 $199.9 $62.6 $146.1 $558.0 $4,971.4
Royalty,
interest
and
dividend
income 29.9 29.9
Non-operating
gains 4.2 0.1 4.3
4,038.9 199.9 62.7 146.1 558.0 5,005.6
Deductions
Cost of
sales 2,597.0 129.4 20.9 105.5 383.5 $ 21.9(a) 3,258.2
Selling,
general
and
administrative
expenses 774.0 58.1 12.9 23.1 127.9 996.0
Research
and
development
expenses 173.1 2.2 10.1 185.4
Provision
for
restructuring
and other
special
charges 207.0 16.0 (48.5)(b) 174.5
Interest
expense 88.2 5.6 3.6 13.2 22.5(c)
(17.9)(d) 115.2
Other, net 42.9 1.0 0.1 0.6 2.4 (1.0)(e) 46.0
Income
before
taxes on
income 156.7 5.8 28.8 11.1 4.9 23.0 230.3
Tax
provision 35.3 2.1 1.7 3.9 23.0(f) 66.0
Income
before
minority
interest
and
equity
earnings 121.4 3.7 27.1 7.2 4.9 164.3
Minority
interest
in
earnings
of
subsidiaries (16.6) (2.2) (15.1) 2.9(g) (31.0)
Dividends
on
convertible
preferred
securities
of
subsidiary (14.6)(h) (14.6)
Equity in
earnings
(loss) of
associated
companies (120.0) 19.0 (101.0)
Net Income
(Loss) $ (15.2) $ 1.5 $27.1 $ 7.2 $ 8.8 $ (11.7) $ 17.7
Weighted
Average
Shares
Outstanding 191.963 30.063(i) 222.026
Earnings
Per
Common
Share:
Net Income
(Loss) $ (0.09) $ 0.07
<FN>
(1)Represents the historical results of operations of Corning for the year ended January 2, 1994.
(2)Represents the historical results of operations of Damon for the seven months ended July 31, 1993.
(3)Represents the historical results of operations of Bioran before loss from discontinued operations for the
year ended December 31, 1993.
(4)Represents the historical results of operations of the businesses involved in the Other 1993 Transactions
through the respective acquisition dates.
(5)Represents the historical results of operations of the businesses involved in the Other 1994 Transactions
for the year ended December 31, 1993.
(6)See Note 2 to the Unaudited Pro Forma Information--Statement of Income.
(7)Reflects the results of operations of Corning on a pro forma basis assuming the Transactions had been
completed on January 4, 1993.
</TABLE>
<PAGE>
CORNING
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FORTY WEEKS ENDED OCTOBER 9, 1994
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
Other 1994
Corning (1) Bioran (2) Transactions(3) Adjustments(4) As Adjusted(5)
<S> <C> <C> <C> <C> <C>
Revenues
Net sales $3,497.0 $49.8 $324.9 $3,871.7
Royalty, interest and dividend
income 21.5 21.5
3,518.5 49.8 324.9 3,893.2
Deductions
Cost of sales 2,236.1 16.0 234.3 $ 7.3(a) 2,493.7
Selling, general and
administrative expenses 633.2 10.8 73.2 717.2
Research and development expenses 132.8 2.6 135.4
Provision for restructuring and
other special charges 82.3 (82.3)(b)
Interest expense 85.6 7.9 6.4(c)
(6.7)(d) 93.2
Other, net 36.3 0.1 0.7 37.1
Income before taxes on income 312.2 22.9 6.2 75.3 416.6
Tax provision 117.1 1.2 0.3 36.7(f) 155.3
Income before minority interest and
equity earnings 195.1 21.7 5.9 38.6 261.3
Minority interest in earnings of
subsidiaries (39.0) (0.3) (1.3)(g) (40.6)
Dividends on convertible preferred
securities of subsidiary (2.7) (7.8)(h) (10.5)
Equity in earnings of associated
companies 92.9 92.9
Net Income $ 246.3 $21.7 $ 5.6 $ 29.5 $ 303.1
Weighted Average Shares Outstanding 207.921 15.759(i) 223.680
Earnings Per Common Share:
Net Income $ 1.18 $ 1.35
<FN>
(1)Represents the historical results of operations of Corning for the forty weeks ended October 9, 1994.
(2)Represents the historical results of operations of Bioran for the nine months ended September 30, 1994.
(3)Represents the historical results of operations of the businesses involved in the Other 1994 Transactions
through the earlier of October 9, 1994, or the respective acquisition dates.
(4)See Note 2 to the Unaudited Pro Forma Information--Statement of Income.
(5)Reflects the results of operations of Corning on a pro forma basis assuming the Transactions had been
completed on January 4, 1993.
</TABLE>
<PAGE>
CORNING
UNAUDITED PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
October 9, 1994
(In millions)
<TABLE>
<CAPTION>
Other 1994 Pro Forma
Corning Transactions Adjustments As Adjusted
(1) (2) (3) (4)
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash and short-term investments $ 254.7 $ (50.0)(j) $ 204.7
Receivables, net 984.0 984.0
Inventories 435.9 $20.7 456.6
Deferred taxes on income and
other current assets 256.9 0.1 257.0
Total Current Assets 1,931.5 20.8 (50.0) 1,902.3
Investments 765 765.0
Plant and Equipment, net 1,867.2 11.3 1,878.5
Goodwill and Intangibles, net 1,270.1 114.5(k) 1,384.6
Other Assets 313.1 313.1
$6,146.9 $32.1 $ 64.5 $6,243.5
Liabilities and Stockholders'
Equity
Current Liabilities
Loans payable $ 329.0 $ 329.0
Accounts payable 192.5 $ 7.6 200.1
Other accrued liabilities 778.4 $ 9.0(l) 787.4
Total Current Liabilities 1,299.9 7.6 9.0 1,316.5
Other Liabilities 658.0 658.0
Loans Payable Beyond One Year 1,351.0 30.0(m) 1,381.0
Minority Interest in Subsidiary
Companies 194.5 50.0(n) 244.5
Convertible Preferred Securities of
Subsidiary 364.4 364.4
Convertible Preferred Stock 25.0 25.0
Common Stockholders' Equity 2,254.1 24.5 (24.5)(o) 2,254.1
$6,146.9 $32.1 $ 64.5 $6,243.5
<FN>
(1)Represents the historical financial position of Corning at October 9, 1994.
(2)Represents the historical financial position of one of the Other 1994 Transactions at September 30, 1994.
(3)See Note 2 to Unaudited Pro Forma Information--Balance Sheet.
(4)Reflects the financial position of Corning on a pro forma basis assuming the Transactions had been completed
by October 9, 1994.
</TABLE>
<PAGE>
CORNING
Notes to Unaudited Pro Forma Combined Financial Information
Note 1.--Basis of Presentation:
The Unaudited Pro Forma Combined Statements of Income reflect Corning's
results of operations for the year ended January 2, 1994, and the forty weeks
ended October 9, 1994, on a pro forma basis assuming the Transactions had
been completed as of January 4, 1993. The Unaudited Pro Forma Combined
Balance Sheet at October 9, 1994, assumes that the Transactions had been
completed by that date.
Corning's management believes that the assumptions used in preparing the
Unaudited Pro Forma Information provide a reasonable basis for presenting all
of the significant effects of the Transactions, that the pro forma
adjustments give appropriate effect to those assumptions and that the pro
forma adjustments are properly applied in the Unaudited Pro Forma
Information.
Note 2.--Pro Forma Adjustments:
Statement of Income
(a) The pro forma adjustment to cost of sales represents the increase in
amortization of the excess of cost over fair value of tangible net assets
acquired in the Damon transaction, the Other 1993 Transactions, and the Other
1994 Transactions of $6.5 million, $1.8 million, and $13.6 million,
respectively, for the year ended January 2, 1994, and $7.3 million for the
Other 1994 Transactions for the forty weeks ended October 9, 1994.
The excess of cost over fair value of tangible net assets acquired in the
Damon transaction is $603 million. The excess of cost over fair value of
tangible net assets acquired has been allocated to goodwill with a life of
forty years. Management believes that fair value approximates book value for
all tangible assets acquired in the Damon transaction.
Goodwill totaling $258 million and $290 million resulted from the Other 1993
Transactions and the Other 1994 Transactions, respectively, and is being
amortized over 15 to 40 years.
(b) The pro forma adjustment for the year ended January 2, 1994, represents
the elimination of one-time restructuring costs of $40.6 million related to
closing MetPath facilities as a result of the integration of Damon and
MetPath and $7.9 million of Costar transaction costs.
The pro forma adjustment for the forty weeks ended October 9, 1994,
represents the elimination of one-time restructuring and other special
charges primarily relating to the Nichols, Maryland Medical, and Bioran
acquisitions.
(c) The pro forma adjustment to interest expense represents the interest on
the debt incurred in connection with the Damon transaction, the Other 1993
Transactions, and the Other 1994 Transactions of $11.9 million, $2.3 million,
and $8.3 million, respectively, for the year ended January 2, 1994, and $6.4
million for the Other 1994 Transactions for the forty weeks ended October 9,
1994. The weighted average interest rate on the debt incurred in connection
with the Damon transaction is 4.9% and on the Other 1993 Transactions ranges
from 3.5% to 6.7%. The interest rate on the debt expected to be incurred in
connection with one of the Other 1994 Transactions is 8%.
Corning financed the Damon acquisition and the refinancing of approximately
$167 million of indebtedness of Damon under short-term financing agreements
entered into with certain banks to effect this transaction. During the third
quarter of 1993, Corning refinanced a portion of this short-term financing by
issuing approximately $200 million of longer-term debt. During the fourth
quarter of 1993, Corning extended the terms of the financing agreements to
December 31, 1995. The pro forma adjustment to interest expense related to
the Damon transaction is calculated as the weighted average of short-term and
longer-term interest rates.
(d) The pro forma adjustment to interest expense reflects the decrease in
interest expense assuming the issuance by Corning Delaware on January 4,
1993, of $373.8 million of Preferred Securities pursuant to the MIPS Offering
(net of $9.4 million of underwriting commissions and expenses), and the use
of the net proceeds thereof by Corning to retire the indebtedness incurred in
connection with the Damon transaction.
(e) The pro forma adjustment represents the elimination of approximately $1
million of one-time costs incurred by Damon in connection with a terminated
merger agreement with National Health Laboratories Incorporated which were
charged to results of operations for the seven months ended July 31, 1993.
(f) The pro forma adjustment to tax expense represents the tax effect of the
adjustments detailed in notes (a), (b), (c), (d) and (e) above. In addition,
tax expense has been adjusted to provide taxes on the income of the Bioran
transaction and one of the Other 1994 Transactions which were not reflected
in the historical financial statements. These adjustments are calculated at
Corning's historical effective tax rate.
(g) The pro forma adjustment to minority interest represents the applicable
minority interest on the historical earnings and pro forma adjustments of the
Other 1993 Transactions and the Other 1994 Transactions.
(h) The pro forma adjustment to dividends on convertible preferred securities
of subsidiary represents the after-tax dividends payable on the $373.8
million of Preferred Securities pursuant to the MIPS Offering.
(i) The pro forma adjustment to weighted average shares outstanding
represents the issuance of 6.0 million shares to complete the Bioran
acquisition in October 1994, 5.5 million shares to complete the Costar
acquisition in September 1993, and 20.0 million shares in conjunction with
the Other 1994 Transactions.
Balance Sheet
(j) The pro forma adjustment represents the cash to be used to fund a portion
of the purchase price of one of the Other 1994 Transactions.
(k) The pro forma adjustment to goodwill represents the goodwill estimated to
arise from one of the Other 1994 Transactions.
(l) The pro forma adjustment to other liabilities relates to reserves for
integration costs of one of the Other 1994 Transactions.
(m) The pro forma adjustment to loans payable beyond one year represents the
debt to be incurred to finance a portion of one of the Other 1994
Transactions.
(n) The pro forma adjustment to minority interest represents a capital
contribution to be made by a minority shareholder to finance one of the Other
1994 Transactions.
(o) The pro forma adjustment to common stockholders' equity represents the
elimination of the net assets of one of the Other 1994 Transactions to be
accounted for using the purchase method of accounting.
Note 3.--Earnings Per Share:
Earnings per common share are computed by dividing net income less preferred
dividends on Corning's Series B Preferred Stock by the weighted average of
common shares outstanding during each period. Preferred dividends amounted to
$2.1 million and $1.5 million during the year ended January 2, 1994, and the
forty weeks ended October 9, 1994, respectively.
Note 4.--Costar Merger:
In September 1993, Corning acquired all of the outstanding shares of common
stock and options to purchase common stock of Costar for approximately 5.5
million Corning Common Shares and options to purchase approximately 300,000
Corning Common Shares. This acquisition has been accounted for as a pooling
of interests. Corning's consolidated financial statements for periods prior
to the acquisition have not been restated since the acquisition is not
material to Corning's financial position or results of operations.
Note 5.--Unilab Transaction:
Corning, through a wholly owned subsidiary, owned 43% of Unilab. In November
1993, Corning acquired 100 percent of certain Unilab facilities in exchange
for a majority of the Unilab shares owned by Corning, the assumption of
approximately $70 million of Unilab debt and Corning's investment in J.S.
Pathology PLC ("J.S. Pathology"). Corning retained a 12% equity investment in
Unilab.
Note 6.--Vitro Transaction:
On January 2, 1992, Corning entered into an alliance with Vitro, by
transferring 49% of its consumer- housewares businesses to Vitro, in exchange
for 49% of Vitro's consumer-products businesses and approximately $137
million in cash. The alliance consisted of two jointly owned companies.
Corning owned 51% of Corning Vitro Corporation ("Corning Vitro") and
consolidated its financial statements and 49% of Vitro Corning, S.A. de C.V.
("Vitro Corning") and accounted for its investment under the equity method.
In December 1993, Vitro and Corning reached an agreement whereby, in two
separate transactions, Vitro purchased in December 1993, the shares of
capital stock of Vitro Corning owned by Corning and Corning purchased in
February 1994 the shares of capital stock of Corning Vitro held by Vitro. The
net cost to Corning of the two transactions was $131 million. Corning and
Vitro are continuing their consumer products alliance through cross-
distribution and supply agreements.
