SEC
Judiciary Plaza
50 Fifth Street, NW
Washington, DC 20549
Attn: Document Control--EDGAR
SUBJECT: Corning Incorporated Current Report on Form 8-K
Gentlemen:
Corning Incorporated ("Corning") is hereby filing, pursuant to the
Securities Exchange Act of 1934, Corning's current Report on Form 8-K
dated July 26, 1994.
If you should have any questions or comments concerning this filing,
please call me at 607/974-8242 or contact me through CompuServe at user
ID 72741,206.
Very truly yours,
/s/ Kathy A. Asbeck
Kathy A. Asbeck
Assistant Controller
<PAGE>
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): July 26, 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
In connection with the public offering by Corning Incorporated of
$100 million principal amount of 7.625% Debentures due August 1,
2024, Corning is filing herewith Corning's Unaudited Pro Forma
Combined Financial Information as of and for the twenty-four weeks
ended June 19, 1994.
Item 8. 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 twenty-four weeks ended
June 19, 1994 6
Combined Balance Sheet as of June 19, 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 Corning Transactions as follows:
* The acquisition of Nichols Institute ("Nichols") for an estimated 6.7
million Corning Common Shares and options to purchase approximately 1 million
Corning Common Shares. The acquisition will be accounted for as a pooling
of interests.
* 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 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 January 1994 and the merger with Maryland Medical Laboratory,
Inc. ("Maryland Medical") for 4.5 million Corning Common Shares in June 1994
(collectively, the "Completed 1994 Acquisitions"). The NTL transaction has
been accounted for as a purchase and the Maryland Medical transaction will be
accounted for as a pooling of interests. The Vitro transaction is described
in Note 6.
The NTL and Vitro transactions 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 expected 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 twenty-four weeks ended June 19, 1994, assume that
the Corning Transactions had been completed on January 4, 1993. The Unaudited
Pro Forma Combined Balance Sheet at June 19, 1994, assumes that the Corning
Transactions had been completed by that date. Corning's consolidated
financial statements for periods prior to the pooling of interests
transactions will not be restated since the acquisitions are 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
Corning 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 or has pending 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 and Damon. Damon's historical
financial statements are included in Corning's Current Reports in Form 8-K
dated August 4, 1993 and August 13, 1993.
<PAGE>
CORNING
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 2, 1994
(In millions, except per share amounts)
Pro Forma
Completed
Other 1993 1994
Corning Nichols Damon Transactions Acquisitions Adjustments As
(1) (2) (3) (4) (5) (6) Adjusted (7)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues
Net sales $4,004.8 $279.6 $199.9 $146.1 $168.5 $ 4,798.9
Royalty, interest and
dividend income 29.9 29.9
Non-operating gains 4.2 4.2
4,038.9 279.6 199.9 146.1 168.5 4,833.0
Deductions
Cost of sales 2,597.0 175.3 129.4 105.4 128.2 $ 14.3 (a) 3,149.6
Selling, general and
administrative
expenses 774.0 75.2 58.1 23.1 32.0 962.4
Research and development
expenses 173.1 4.2 2.2 1.8 181.3
Provision for
restructuring and
other special charges 207.0 16.0 (48.5)(b) 174.5
Interest expense 88.2 11.7 5.6 3.6 1.5 14.2 (c)
(17.9)(d) 106.9
Other, net 42.9 2.6 1.0 0.6 (0.2) (1.0)(e) 45.9
Income (loss) before
taxes on income 156.7 (5.4) 5.8 11.2 5.2 38.9 212.4
Tax provision (benefit) 35.3 (1.0) 2.1 3.9 1.0 18.2 (f) 59.5
Income (loss) before
minority interest and
equity earnings 121.4 (4.4) 3.7 7.3 4.2 20.7 152.9
Minority interest in
earnings of
subsidiaries (16.6) (2.2) (15.1) 0.8 (g) (33.1)
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) $ (4.4) $ 1.5 $ 7.3 $ 8.1 $ 6.9 $ 4.2
Weighted Average Shares
Outstanding 191.963 23.525 (i) 215.488
Earnings Per Common
Share:
Net Income (Loss) $ (0.09) $ 0.01
</TABLE>
(1) Represents the historical results of operations of Corning for the year
ended January 2, 1994.
(2) Represents the historical results of operations of Nichols for the year
ended December 31, 1993.
(3) Represents the historical results of operations of Damon for the seven
months ended July 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 Completed 1994 Acquisitions for the year ended January 2,
1994.
(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 Corning Transactions had been completed on January 4, 1993.
<PAGE>
CORNING
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
TWENTY-FOUR WEEKS ENDED JUNE 19, 1994
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
Completed
1994
Corning Nichols Acquisitions Adjustments As
(1) (2) (3) (4) Adjusted (5)
<S> <C> <C> <C> <C> <C>
Revenues
Net sales $2,054.6 $137.9 $49.4 $2,241.9
Royalty, interest and dividend income 11.2 11.2
2,065.8 137.9 49.4 2,253.1
Deductions
Cost of sales 1,318.2 91.1 32.4 $ 1.3 (a) 1,443.0
Selling, general and administrative expenses 388.0 37.5 16.1 441.6
Research and development expenses 79.3 2.0 0.5 81.8
Provision for restructuring and other
special charges 17.8 17.8
Interest expense 51.7 5.4 0.7 (5.8 ) (d) 52.0
Other, net 8.8 1.3 (0.2 ) 9.9
Income (loss) before taxes on income 219.8 (17.2 ) (0.1 ) 4.5 207.0
Tax provision (benefit) 83.0 (5.5 ) (0.1 ) 1.8 (f) 79.2
Income (loss) before minority interest and
equity earnings 136.8 (11.7 ) 0.0 2.7 127.8
Minority interest in earnings of
subsidiaries (17.9 ) (0.3 ) (0.1 )(g) (18.3 )
Dividends on convertible preferred
securities of subsidiary (6.7 )(h) (6.7 )
Equity in earnings of associated companies 50.5 50.5
Net Income (Loss) $ 169.4 $(11.7 ) $(0.3 ) $(4.1 ) $ 153.3
Weighted Average Shares Outstanding 204.286 12.234 (i) 216.520
Earnings Per Common Share:
Net Income $ 0.82 $ 0.70
</TABLE>
(1) Represents the historical results of operations of Corning for the
twenty-four weeks ended June 19, 1994.
(2) Represents the historical results of operations of Nichols for the six
months ended March 31, 1994.
(3) Represents the historical results of operations of the businesses
involved in the Completed 1994 Acquisitions through the earlier of June 19,
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 Corning Transactions had been completed on January 4, 1993.
<PAGE>
CORNING
UNAUDITED PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
June 19, 1994
(In millions)
<TABLE>
<CAPTION>
Pro Forma
Corning Nichols As Adjusted
(1) (2) Adjustments(3) (4)
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash and short-term investments $ 121.0 $ 13.5 $ 134.5
Receivables, net 845.6 55.6 901.2
Inventories 408.7 11.2 419.9
Deferred taxes on income and other
current assets 224.3 9.8 234.1
Total Current Assets 1,599.6 90.1 1,689.7
Investments 676.6 676.6
Plant and Equipment, net 1,797.5 88.6 1,886.1
Goodwill and Intangibles, net 1,217.1 65.1 1,282.2
Other Assets 330.3 3.6 333.9
$5,621.1 $247.4 $ 5,868.5
Liabilities and Stockholders' Equity
Current Liabilities
Loans payable $ 238.5 $ 64.9 $ 303.4
Accounts payable 143.4 20.1 163,5
Other accrued liabilities 681.8 22.8 704.6
Total Current Liabilities 1,063.7 107.8 1,171.5
Other Liabilities 665.9 10.9 676.8
Loans Payable Beyond One Year 1,605.6 38.0 $(365.4)(j) 1,278.2
Minority Interest in Subsidiary
Securities Companies 186.2 186.2
Convertible Preferred Stock of
Subsidiary 365.4 (j) 365.4
Convertible Preferred Stock 25.0 25.0
Common Stockholders' Equity 2,074.7 90.7 2,165.4
$5,621.1 $247.4 $ 5,868.5
</TABLE>
(1) Represents the historical financial position of Corning at June 19, 1994.
(2) Represents the historical financial position of Nichols at March 31,
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 Corning Transactions had been completed by June 19, 1994.
<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 twenty-four
weeks ended June 19, 1994, on a pro forma basis assuming the Corning
Transactions had been completed as of January 4, 1993. The Unaudited Pro
Forma Combined Balance Sheet at June 19, 1994, assumes that the Corning
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 Corning 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
Completed 1994 Acquisitions of $6.5 million, $1.8 million, and $6.0 million,
respectively, for the year ended January 2, 1994, and $1.3 million for the
Completed 1994 Acquisitions for the twenty-four weeks ended June 19, 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 $190 million resulted from the Other 1993
Transactions and the Completed 1994 Acquisitions, respectively, and is being
amortized over 25 to 40 years.
(b) The pro forma adjustment 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 recorded in Corning's results for the year ended January 2,
1994.
(c) The pro forma adjustment to interest expense represents the interest on
the debt incurred in connection with the Damon transaction and the Other 1993
Transactions of $11.9 million and $2.3 million, respectively, for the year
ended January 2, 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%.
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 an estimated $8.4 million of underwriting commissions and expenses),
and the expected 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 one of the
Completed 1994 Acquisitions which was previously a Subchapter S corporation.
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 Completed 1994 Acquisitions.
(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 5.5 million shares to complete the Costar
acquisition in September 1993, 12.5 million shares in conjunction with the
Completed 1994 Acquisitions and an estimated 6.7 million shares to be issued
in conjunction with the Nichols transaction.
The number of shares to be issued in the Nichols transaction is dependent
on the price per Corning Common Share during a 10-day period prior to the
date of the Nichols stockholders meeting to be held to approve the
transaction. For purposes of this pro forma presentation, it is assumed
that 6.7 million shares will be issued (based on a price of $33 per
Corning Common Share and the current number of shares of Nichols Common
Stock and options to purchase Nichols Common Stock outstanding).
Pursuant to the agreement with Nichols, the maximum number of Corning
Common Shares which could be issued is approximately 9.7 million
shares (assuming the maximum Exchange Ratio of 0.491 and exercise
of all outstanding options). An increase in the number of shares to
9.7 million shares would not materially impact the pro forma
earnings per share presented in the Unaudited Pro Forma Combined Statements
of Income.
Balance Sheet
(j) The pro forma adjustment to loans payable beyond one year and preferred
securities of subsidiaries assumes the issuance on June 19, 1994, of $373.8
million of Preferred Securities pursuant to the MIPS Offering (net of an
estimated $8.4 million of underwriting commissions and expenses), and the
expected use of the net proceeds thereof by Corning to retire the
indebtedness incurred in connection with the Damon transaction.
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 $1.0 million during the year ended January 2, 1994, and the
twenty-four weeks ended June 19, 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.
