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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) July 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)
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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 $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 July 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: July 15, 1997 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
Chief Accounting Officer
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IMMEDIATE RELEASE Cynthia A. Demers
July 15, 1997 (607) 974-8638
Todd Fogarty
(212) 593-2655
Corning Incorporated Second Quarter Earnings Up 37%
CORNING, N.Y., July 15 -- Corning Incorporated (NYSE:GLW) said today
that for its second quarter ended June 30, 1997, earnings were $0.56 per
share, an increase of 37 percent compared with earnings of $0.41 per share
for the same operations in the second quarter 1996. Net income for the
second quarter totaled $127.0 million, an increase of 35 percent compared
with $93.8 million for the same operations in the second quarter 1996. Sales
totaled $1.0 billion, an increase of 13 percent.
"We are pleased with the results for the quarter" said Corning Chairman
and Chief Executive Officer Roger G. Ackerman. "Our investments in optical
fiber, cable and photonic technologies are clearly yielding significant
returns."
Performance for the quarter reflects strong sales and earnings gains for
the Communications segment. Results in the Specialty Materials segment were
mixed as growth in advanced materials, primarily high-purity fused silica
glass for the semiconductor industry, was offset by softness in the other
businesses.
The consumer housewares business also continues to show strong year over
year improvement in earnings. As previously announced, Corning is exploring
the divestiture of its worldwide consumer housewares business.
Equity company earnings were up slightly and included both gains at
Eurokera, a specialty flat-glass equity company, and start up costs at new
ventures.
"As we complete a very successful first half, our outlook for the year
remains strong, with demand for our leading-edge communications-related
products continuing to increase with the worldwide pursuit of more
bandwidth," said Mr. Ackerman.
(more)
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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 $56.8
million, or $0.25 per share, for the second quarter 1996.
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, and consumer products. 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)
6 Months Ended 6/30 3 Months Ended 6/30
----------------------------------------
1997 1996 1997 1996
-------- --------- --------- --------
Revenues
Net sales $1,976.5 $1,751.3 $1,031.1 $ 913.7
Royalty, interest, and
dividend income 20.0 15.0 9.5 7.0
------- ------- ------- --------
1,996.5 1,766.3 1,040.6 920.7
Deductions
Cost of sales 1,148.0 1,085.7 593.1 568.7
Selling, general and
administrative expenses 331.1 306.8 171.7 148.4
Research and development
expenses 104.6 90.2 53.5 44.9
Interest expense 48.3 36.0 23.3 18.3
Other, net 15.8 11.2 4.8 4.1
------ ------- ------- -------
Income from continuing
operations before taxes
on income 348.7 236.4 194.2 136.3
Taxes on income from
continuing operations 120.3 79.2 67.0 45.7
------- ------- ------- -------
Income from continuing
operations before minority
interest and equity earnings 228.4 157.2 127.2 90.6
Minority interest in earnings
of subsidiaries (33.5) (28.0) (20.9) (15.8)
Dividends on convertible
preferred securities of
subsidiary (6.9) (6.9) (3.5) (3.5)
Equity in earnings of
associated companies 31.0 34.1 24.2 22.5
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Income from continuing
operations 219.0 156.4 127.0 93.8
Loss from discontinued
operations,net of income taxes (47.6) (56.8)
----- ------ ------ ------
Net Income $ 219.0 $ 108.8 $ 127.0 $ 37.0
======= ======= ======= ======
Earnings Per Common Share:
Continuing operations $ 0.96 $ 0.68 $ 0.56 $ 0.41
Discontinued operations (0.21) (0.25)
------ ------- ------- -------
$ 0.96 $ 0.47 $ 0.56 $ 0.16
======= ======= ======= =======
Assuming Dilution:
Continuing operations $ 0.92 $ 0.67 $ 0.53 $ 0.40
Discontinued operations (0.19) (0.23)
------ ------- ------- -------
$ 0.92 $ 0.48 $ 0.53 $ 0.17
======= ======= ======= =======
Dividends Declared $ 0.36 $ 0.36 $ 0.18 $ 0.18
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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)
June 30, 1997 Dec. 31, 1996
------------- -------------
(Unaudited)
Assets
Current Assets
Cash and short-term investments $ 140.3 $ 223.2
Accounts receivable, net 623.3 566.3
Inventories 582.1 498.5
Deferred taxes on income and
other current assets 124.5 130.7
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Total current assets 1,470.2 1,418.7
Investments 321.7 337.2
Plant and Equipment, Net 2,060.2 1,977.7
Goodwill and Other Intangible Assets, Net 369.9 330.4
Other Assets 288.3 257.3
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$4,510.3 $4,321.3
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Liabilities and Stockholders' Equity
Current Liabilities
Loans payable $ 134.3 $ 53.9
Accounts payable 162.8 268.9
Other accrued liabilities 522.7 484.7
------- -------
Total current liabilities 819.8 807.5
Other Liabilities 669.1 646.2
Loans Payable Beyond One Year 1,160.8 1,208.5
Minority Interest in Subsidiary
Companies 338.5 310.7
Convertible Preferred Securities
of Subsidiary 365.1 365.1
Convertible Preferred Stock 21.1 22.2
Common Stockholders' Equity 1,135.9 961.1
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$4,510.3 $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 2, 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
second quarter and first half of 1997 was 227.8 million and 227.2
million, respectively, and 227.3 million for both periods in 1996.
Series B preferred dividends amounted to $0.4 million and $0.8 million
in the second quarter and first half of 1997, respectively, and
$0.5 million and $1.0 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 second quarter and first half of 1997 was
245.6 million and 244.4 million, respectively, and 239.4 million and
239.1 million, respectively, for the same periods in 1996.
(2) Depreciation and amortization charged to continuing operations during
the first half of 1997 and 1996 totaled $169.1 million and $141.8
million, respectively.
(3) Corning's effective tax rate for continuing operations was 34.5% for
the second quarter and first half of 1997 and 33.5% for the same
periods of 1996. The higher 1997 rate was due to a higher percentage of
Corning's earnings resulting from consolidated entities with higher
effective tax rates.
(4) In April, 1997, Corning acquired 100% of the stock of Optical
Corporation of America for a total purchase price of approximately
$70 million. The consideration was comprised of approximately 950,000
shares of Corning restricted stock and options and $32 million of cash.
The acquisition was recorded under the purchase method of accounting.
The excess cost over the fair value of net tangible assets acquired is
approximately $52 million and is being amortized over periods of up to
20 years.
(5) Corning announced on May 5, 1997 that it is exploring the divestiture of
its worldwide consumer housewares business. The results of the consumer
housewares business are included in continuing operations.
(6) 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. (the Distributions) 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 second quarter of 1996 includes a charge for the
estimated costs related to the Distributions and a charge to increase
reserves for government claims, offset by the estimated results of Quest
Diagnostics and Covance from April 1, 1996, through December 31, 1996.
