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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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)
October 18, 1994
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
New York 1-3247 16-0393470
(State or other jurisdiction (Commission (I.R.S.
of incorporation) File Number) Employer
Identification
No.)
One Riverfront Plaza, Corning, New York 14831
(Address of principal (Zip
executive offices) Code)
(607) 974-9000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last
report)
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Item 5. Other Events.
Attached for filing as an exhibit hereto is the item listed
in "Item 7 -- Financial Statements, Pro Forma Financial
Information and Exhibits" below. Such item is being filed
in connection with the offering by Corning Incorporated of
$400,000,000 aggregate principal amount of its Medium-Term
Notes due from 9 months to 50 years from Date of Issue.
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
Exhibits:
The Registrant's press release of October 18, 1994.
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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
Date: October 18, 1994 By /s/ M. ANN GOSNELL
M. Ann Gosnell
Assistant Secretary
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Kathryn C. Littleton
(607) 974-8206
John H. Abrams
(607) 974-8832
IMMEDIATE RELEASE
October 18, 1994
Corning Incorporated Reports Third Quarter Results;
Improved Performance Demonstrates Growth in Key Markets
CORNING, N.Y., Oct. 18 - Corning Incorporated (NYSE:GLW) said today
that its 1994 third quarter net income before special charges totaled
$132.3 million, or $0.62 per share, compared with $96.1 million, or $0.49
per share, in 1993. This is an increase of 24 percent on a comparable
basis.
Corning said its third-quarter 1994 results include a special charge of
$55.4 million after tax ($0.26 per share) which reflects charges associated
with acquisition expenses, integration costs, and other reserves primarily
relating to three newly acquired businesses at Corning Life Sciences.
Including special charges, 1994 third quarter net income totaled $76.9
million, or $0.36 per share. For the third quarter 1993, Corning reported
a loss of $33.9 million, or $0.18 per share, due to restructuring and other
special charges.
Sales increased 20 percent to $1.4 billion from 1993's third quarter of
$1.2 billion. The company said approximately half of the sales increase
resulted from acquisitions in the life sciences market completed in the
last 12 months. The remainder of the increase was driven by growth in the
communications and environmental markets.
Equity company results, excluding the impact of a one-time charge in
1993, rose 35 percent to $42.4 million, primarily due to the elimination of
losses from Vitro Corning, S.A., which was divested in the fourth quarter
of 1993, and to improved results from operations at Dow Corning Corporation
and other equity companies in the specialty materials segment.
Corning Chairman James R. Houghton said, "Our focus on three distinct
growth markets, ongoing fixed-cost reductions, improved manufacturing and
service efficiencies, and a significant boost from the economy are working
together to meet our sales and profit objectives."
Corning Incorporated is a Fortune 200 company which competes in four
business segments: specialty materials, communications, laboratory services
and consumer products.
-30-
Investor Relations Contact: Richard B. Klein (607) 974-8313
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CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per-share amounts)
Forty Weeks Ended Sixteen Weeks Ended
Oct. 9, Oct. 10, Oct. 9, Oct. 10,
1994 1993 1994 1993
(Unaudited) (Unaudited)
REVENUES
Net sales $3,497.0 $ 2,921.8 $ 1,442.4 $1,198.0
Royalty, interest, and
dividend income 21.5 21.8 10.3 9.4
Non-operating gains 4.2
3,518.5 2,947.8 1,452.7 1,207.4
DEDUCTIONS
Cost of sales 2,236.1 1,889.5 917.9 789.0
Selling, general and
administrative expenses 633.2 564.8 245.2 219.5
Research and development expenses 132.8 128.9 53.5 51.4
Provision for restructuring and
other special charges 82.3 207.0 82.3 207.0
Interest expense 85.6 63.9 33.9 28.8
Other, net 36.3 21.4 27.5 9.9
Income (loss) before taxes on
income 312.2 72.3 92.4 (98.2)
Income tax expense (benefit) 117.1 13.5 34.1 (45.1)
Income (loss) before minority
interest and equity earnings 195.1 58.8 58.3 (53.1)
Minority interest in earnings
of subsidiaries (39.0) (9.5) (21.1) (2.6)
Dividends on convertible preferred
securities of subsidiary (2.7) (2.7)
Equity in earnings of associated
companies 92.9 56.4 42.4 21.8
NET INCOME (LOSS) $ 246.3 $ 105.7 $ 76.9 $ (33.9)
EARNINGS PER COMMON SHARE:
NET INCOME (LOSS) $ 1.18 $ 0.55 $ 0.36 $ (0.18)
The accompanying notes are an integral part of these statements.
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CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
Oct. 9, Jan. 2,
1994 1994
(unaudited)
ASSETS
CURRENT ASSETS
Cash and short-term investments $ 254.7 $ 160.8
Receivables, net 984.0 691.1
Inventories 435.9 353.9
Deferred taxes on income and other
current assets 256.9 265.9
Total current assets 1,931.5 1,471.7
INVESTMENTS 765.0 630.7
PLANT AND EQUIPMENT, NET 1,867.2 1,759.8
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 1,270.1 1,009.1
OTHER ASSETS 313.1 360.4
$6,146.9 $ 5,231.7
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Loans payable $ 329.0 $ 141.7
Accounts payable 192.5 245.1
Other accrued liabilities 778.4 633.5
Total current liabilities 1,299.9 1,020.3
OTHER LIABILITIES 658.0 668.6
LOANS PAYABLE BEYOND ONE YEAR 1,351.0 1,585.6
MINORITY INTEREST IN SUBSIDIARY COMPANIES 194.5 245.7
CONVERTIBLE PREFERRED SECURITIES OF SUBSIDIARY 364.4
CONVERTIBLE PREFERRED STOCK 25.0 25.7
COMMON STOCKHOLDERS' EQUITY 2,254.1 1,685.8
$6,146.9 $ 5,231.7
The accompanying notes are an integral part of these statements.
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CORNING INCORPORATED AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTER 3, 1994
(1) Earnings per common share are computed by dividing net income
less dividends on Series B preferred stock by the weighted
average number of common shares outstanding during the period.
The weighted average shares outstanding (in thousands) for the
third quarter were 213,353 and 192,132 for 1994 and 1993,
respectively, and for the third quarter year-to-date were 207,921
and 190,562 for the same periods. Dividends on Series B
preferred stock of $0.5 million and $1.5 million were declared in
the third quarter and third quarter year-to-date 1994,
respectively, compared with $0.6 million and $1.7 million in the
same periods of 1993.
(2) Depreciation and amortization charged to operations for the forty
weeks ended October 9, 1994, and October 10, 1993, totaled $252.1
million and $210.6 million, respectively.
(3) In June 1994, Corning and International Technology Corporation
established a jointly owned company whereby Corning transferred
the net assets of its environmental testing laboratory business
and International Technology transferred the assets of its IT
Analytical Services business to the new company. As a result of
the transaction, Corning and International Technology each own 50
percent of the newly created company which will provide
environmental testing and related services. Corning will account
for its investment in the new company using the equity method of
accounting for investments. Corning recognized a gain on the
transaction which, net of its share of a one-time integration
charge taken by the new company, is immaterial and has been
included in equity earnings.
(4) In September 1994, Corning acquired all of the outstanding shares
of common stock and options to purchase common stock of Nichols
Institute in a transaction accounted for as a pooling of
interests. Corning issued 7.5 million new shares of Corning
common stock and reserved 1.1 million shares for future issuance
upon the exercise of options issued in connection with the
Nichols transaction. In October 1994, Corning acquired all of
the outstanding shares of Bioran Medical Laboratory for
approximately 6.0 million shares of Corning common stock in a
pooling of interests transaction. Corning's consolidated
financial statements have not been restated because these
acquisitions were not material to Corning's historical financial
position or results of operations.
(5) In September 1994, Siecor Corporation, a consolidated subsidiary,
signed a definitive agreement to purchase certain assets relating
to the hardware and equipment components businesses of Northern
Telecom Limited for approximately $135 million. The transaction,
which is subject to regulatory approval, is expected to be
completed in 1994's fourth quarter.
(6) In October 1994, Corning signed a definitive agreement to sell
its European consumer products business to Newell Co. Terms were
not disclosed. The transaction is expected to be completed in
1994's fourth quarter and is not expected to have a material
impact on Corning's financial statements.
(7) During the third quarter 1994, Corning and Corning Delaware, a
special purpose limited partnership in which Corning is the sole
general partner, completed a public offering of $373.8 million of
6 percent Convertible Monthly Income Preferred Securities (MIPS),
which are guaranteed by Corning and convertible into Corning
common stock. Each MIPS security is convertible into Corning
common stock at the rate of 1.2821 shares of Corning common stock
for each MIPS security (equivalent to a conversion price of $39
per share). Corning used the proceeds from the MIPS offering to
retire the remaining debt incurred in the 1993 acquisition of
Damon Corporation.
-more-
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Notes to Consolidated Financial Statements - continued
(8) During the third quarter 1994, Corning issued $100 million of 30-
year debentures with an interest rate of 7.625 percent due August
1, 2024. The bonds are putable in 10 years at par. The proceeds
from these borrowings were used to repay short-term borrowings
assumed in connection with recent acquisitions.
(9) In September 1994, Dow Corning Corporation's Board of Directors
approved Dow Corning's continued participation in the global
settlement for breast implant litigation. Also in September, the
U.S. District Court granted final approval to the settlement,
assessing it as fair, reasonable and adequate (a ruling which has
subsequently been appealed by various parties) and afforded
plaintiffs who originally opted out of the settlement the
opportunity to rejoin the settlement in specified periods which
currently end no later than December 1, 1994. Future developments
in this litigation may require Dow Corning to record additional
provisions.
Corning does not believe that its share of any additional charge taken
by Dow Corning resulting from breast-implant litigation will have
a material adverse impact upon Corning's overall financial
condition. However, it is possible that Corning's share of any
such charge taken by Dow Corning will have a material adverse
effect upon Corning's earnings in the quarter in which any such
charge is recognized by Dow Corning. The amount of any such
charge would be written off against Corning's investment in Dow
Corning which totaled $402 million at October 9, 1994.
Non-operating gains and losses
(10)During the third quarter 1994, Corning recorded a charge totaling
$82.3 million ($55.4 million after tax) which included $50.7
million of integration costs, $21.6 million of investment banking,
legal, and accounting fees and other transaction expenses, and $10
million of other reserves primarily related to the Nichols,
Maryland Medical Laboratory and Bioran Medical Laboratory
acquisitions.
(11)During the third quarter 1993, Corning recognized non-recurring
charges totaling $207 million ($120.5 million after tax and
minority interest) which included $156 million of restructuring
charges and $51.0 million of other special charges. The
restructuring charges included costs to integrate the Damon
acquisition and costs of a planned company-wide restructuring
program to reduce assets and overhead costs during 1994. The
other special charges primarily included a charge by MetPath of
$36.5 million to reflect the settlement and related legal expenses
associated with its compromise agreement with the Civil Division
of the U.S. Department of Justice, and $8 million of investment
banking, legal, and accounting fees and other transaction expenses
related to the Costar acquisition.
Corning also recognized a $9.5 million reduction in equity earnings as
a result of a restructuring charge taken by Vitro Corning, S.A.
(12)During the third quarter year-to-date 1993, Corning recognized non-
recurring charges totaling $207 million ($120.5 million after
tax), a $4.2 million ($2.6 million after tax) non-operating gain
and a $9.5 million reduction in equity earnings as a result of a
restructuring charge taken by Vitro Corning, S.A.
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