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 15, 1997
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. Employer
of incorporation) File Number) Identification
No.)
One Riverfront Plaza, Corning, New York 14831
(Address of principal executive offices) (Zip Code)
(607) 974-9000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE>
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 $500,000,000
aggregate principal amount of its Medium-Term Notes due from 9 months to 30
years from Date of Issue.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibits:
The Registrant's press release of October 15, 1997.
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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 15, 1997 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
Vice President and
Controller
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IMMEDIATE RELEASE Cynthia A. Demers
October 15, 1997 (607) 974-8638
Corning Incorporated Releases Third Quarter Earning
CORNING, N.Y., October 15 -- Corning Incorporated (NYSE: GLW) said today
that for its third quarter ended September 30, 1997, earnings were $0.49 per
share, an increase of 17 percent compared with earnings of $0.42 per share
for the same operations in the third quarter 1996. Net income for the third
quarter totaled $112.3 million, an increase of 18 percent compared with $95.2
million for the same operations in the third quarter 1996. Sales totaled
$1.04 billion, an increase of 14 percent.
Performance for the quarter reflects earnings gains in all segments,
with especially strong improvement in the advanced materials and information
display businesses. Equity company earnings were up approximately 25
percent, led by gains at Samsung-Corning Company, Ltd. which manufactures
glass television funnels and panels in South Korea.
Corning Chairman and Chief Executive Officer Roger G. Ackerman said, "We
are having a very good year and overall sales growth continues to be strong.
We are confident about our positions in the communications, environmental and
advanced materials markets and remain optimistic about the future."
In a separate release today, Corning Incorporated said it had agreed to
amend certain terms of the previously announced agreement relating to the
recapitalization and sale of a controlling interest of its consumer
housewares business to a company formed by AEA Investors Inc.
On December 31, 1996, Corning completed a strategic repositioning of the
company by distributing all of the shares of Quest Diagnostics Incorporated
(NYSE: DGX) and Covance Inc. (NYSE: CVD) to its shareholders on a pro rata
basis. Corning's results for 1996 report Quest Diagnostics and Covance as
discontinued operations. The loss from discontinued operations totaled
$115.0 million, or $0.51 per share for the third quarter 1996.
(more)
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Established in 1851, Corning Incorporated creates leading-edge
technologies for the fastest growing segments of the world's economy.
Corning manufactures optical fiber, cable and components, high performance
glass and components for televisions and other electronic displays for
communications and communications-related industries; advanced materials for
the scientific and environmental markets. Corning's total revenues in 1996
were $3.7 billion.
Corning Investor Relations Contact:
Richard B. Klein (607) 974-8313
Katherine M. Dietz (607) 974-8217
The statements in this release, which are not historical facts or
information, are forward-looking statements. These forward-looking
statements involve risks and uncertainties that could cause the outcome to be
materially different. Forward-looking statements include, but are not
limited to, global economic conditions, product demand, competitive products
and pricing, manufacturing efficiencies, cost reductions, manufacturing
capacity, facility expansions and new plant start-up costs, the rate of
technology change, and other risks.
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Corning Incorporated and Subsidiary Companies
Consolidated Statements of Income
(Unaudited; in millions, except per-share amounts)
9 Months Ended Sept. 30, 3 Months Ended Sept.30,
------------------------ -----------------------
1997 1996 1997 1996
---- ---- ---- ----
Revenues
Net sales $3,014.3 $2,661.5 $1,037.8 $ 910.2
Royalty, interest, and
dividend income 29.8 24.0 9.8 9.0
------- ------- -------- ---------
3,044.1 2,685.5 1,047.6 919.2
Deductions
Cost of sales 1,765.0 1,636.9 617.0 551.2
Selling, general and
administrative expenses 499.5 470.1 168.4 163.3
Research and development
expenses 175.4 137.5 70.8 47.3
Interest expense 67.2 53.8 18.9 17.8
Other, net 28.5 19.7 12.7 8.5
------- ------ ------- ---------
Income from continuing
operations before
taxes on income 508.5 367.5 159.8 131.1
Taxes on income from
continuing operations 172.4 123.1 52.1 43.9
-------- ------- ------- ---------
Income from continuing
operations before
minority interest and
equity earnings 336.1 244.4 107.7 87.2
Minority interest in earnings
of subsidiaries (56.5) (41.0) (23.0) (13.0)
Dividends on convertible
preferred securities
of subsidiary (10.3) (10.3) (3.4) (3.4)
Equity in earnings of
associated companies 62.0 58.5 31.0 24.4
---------- -------- ------- ---------
Income from continuing
operations 331.3 251.6 112.3 95.2
Loss from discontinued
operations,
net of income taxes (162.6) (115.0)
------- -------- ------- --------
Net Income (Loss) $ 331.3 $ 89.0 $ 112.3 $ (19.8)
======= ======= ======= ========
Per Common Share:
Continuing operations $ 1.45 $ 1.10 $ 0.49 $ 0.42
Discontinued operations (0.72) (0.51)
------- --------- -------- --------
$ 1.45 $ 0.38 $ 0.49 $ (0.09)
======= ======== ======== ========
Assuming Dilution:
Continuing operations $ 1.39 $ 1.08 $ 0.47 $ 0.41
Discontinued operations (0.67) (0.48)
------- --------- -------- --------
$ 1.39 $ 0.41 $ 0.47 $ (0.07)
======= ======== ======== ========
Dividends Declared $ 0.54 $ 0.54 $ 0.18 $ 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)
Sept. 30, 1997 Dec. 31, 1996
-------------- -------------
(Unaudited)
Assets
Current Assets
Cash and short-term investments $ 80.0 $ 223.2
Accounts receivable, net 642.8 566.3
Inventories 597.7 498.5
Deferred taxes on income and
other current assets 137.9 130.7
-------- -------
Total current assets 1,458.4 1,418.7
Investments 360.3 337.2
Plant and Equipment, Net 2,143.7 1,977.7
Goodwill and Other Intangible Assets, Net 366.6 330.4
Other Assets 293.8 257.3
------- --------
$4,622.8 $4,321.3
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Loans payable $ 151.6 $ 53.9
Accounts payable 169.9 268.9
Other accrued liabilities 516.7 484.7
------- -------
Total current liabilities 838.2 807.5
Other Liabilities 672.2 646.2
Loans Payable Beyond One Year 1,144.7 1,208.5
Minority Interest in Subsidiary Companies 355.1 310.7
Convertible Preferred Securities
of Subsidiary 365.2 365.1
Convertible Preferred Stock 20.1 22.2
Common Stockholders' Equity 1,227.3 961.1
-------- -------
$4,622.8 $4,321.3
======== ========
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, 1997
(1) Earnings per common share are computed by dividing net income less
dividends on Series B convertible preferred stock by the weighted
average number of common shares outstanding during each period. The
weighted average number of common shares outstanding for the third
quarter and third quarter year-to-date 1997 was 228.7 million and 227.7
million, respectively, and 227.4 million for both periods in 1996.
Series B preferred dividends amounted to $0.4 million and $1.2 million
in the third quarter and third quarter year-to-date 1997, respectively,
and $0.5 million and $1.5 million, respectively, for the same periods in
1996.
Earnings per common share assuming dilution are computed by dividing net
income plus dividends on convertible preferred securities of subsidiary
by the weighted average number of common shares outstanding during the
period after giving effect to dilutive stock options and adjusted for
dilutive common shares assumed to be issued on conversion of Corning's
convertible securities. The shares used in computing earnings per share
assuming dilution for the third quarter and third quarter year-to-date
1997 were 246.5 million and 245.1 million, respectively, and 239.7
million and 239.4 million, respectively, for the same periods in 1996.
(2) Depreciation and amortization charged to continuing operations during
the third quarter year-to-date 1997 and 1996 totaled $257.5 million and
$212.1 million, respectively.
(3) Corning's effective tax rate for continuing operations was 32.6% and
33.9% for the third quarter and third quarter year-to-date 1997,
respectively, and 33.5% for the same periods of 1996.
(4) On August 20, 1997, Corning's Board of Directors approved a definitive
agreement for a recapitalization and sale of a controlling interest in
its consumer housewares business to a company formed by AEA Investors.
Corning announced an amendment to the transaction on October 15, 1997.
The planned transaction will result in Corning receiving proceeds of
$779 million in cash and $21 million face amount of long-term debt of
the consumer housewares business at closing. Corning will continue to
retain an 11% interest in the equity of the business. In addition,
Corning could receive up to an additional $62 million face amount of
long-term debt if certain 1998 business performance targets are
exceeded. However, $50 million of the cash proceeds and the $21 million
in long-term debt would be contingently returnable based on the 1998
performance of the business. The amount of cash proceeds is subject to
a customary working capital adjustment at closing.
The transaction is expected to close on or before December 31, 1997.
Corning expects to recognize an after tax gain in excess of $125 million
in the fourth quarter 1997. Any gains on the contingent proceeds will
be recognized when realized. The results of the consumer housewares
business are included in continuing operations.
<PAGE>
(5) On December 31, 1996, Corning completed a strategic repositioning of the
company by distributing all of the shares of Quest Diagnostics Incorporated
and Covance Inc. to its shareholders on a pro rata basis. Corning's
results for 1996 report Quest Diagnostics and Covance as discontinued
operations. The loss from discontinued operations in the third quarter of
1996 primarily related to a charge taken by Quest Diagnostics to increase
reserves related to certain government investigations of billing practices
of certain clinical laboratories acquired by Quest Diagnostics in 1993 and
1994.
