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) April 16, 1998
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 April 16, 1998.
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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: April 16, 1998 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
Vice President and Controller
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FOR IMMEDIATE RELEASE Robert W. DeMallie
April 16, 1998 (607) 974-8778
[email protected]
Corning Incorporated Reports First Quarter Earnings
CORNING, N.Y., April 16 - Corning Incorporated (NYSE:GLW) reported
today that its 1998 first quarter net income from continuing operations,
which now excludes the consumer housewares business, totaled $62.1
million, compared with 1997 net income from the same operations of $85.4
million. Diluted earnings per share from continuing operations totaled
$0.27, versus 1997 first quarter diluted earnings per share of $0.36.
The decline in first quarter earnings per share is consistent with
Corning's expectations, as announced in January of this year.
First quarter sales from continuing operations were $794.8 million,
compared to 1997 first quarter sales of $817.1 million.
Commenting on the company's performance, Corning's Chairman and
Chief Executive Officer, Roger G. Ackerman said, "As we had anticipated,
the decline in first quarter earnings was mostly due to the effects of
Asia's instability on several of our businesses. The impact was most
pronounced on our international optical fiber sales, with lower volume
and pricing compared with last year's record first-quarter performance.
"Equity earnings were up substantially," Ackerman added, "due
primarily to strong performance and exchange gains at Samsung-Corning
Company Ltd., a Korean manufacturer of glass panels and funnels for
television and display monitors."
Commenting on future performance, Ackerman said, "We expect our
trends to improve as the year progresses. But the extent and timing of
our improvement clearly depends on stronger Asian economies, which we
have not yet seen."
On April 1, 1998, Corning completed the recapitalization and sale
of a controlling interest in its consumer housewares business to an
affiliate of Borden, Inc. Corning expects to record a gain from the
sale in the second quarter.
(more)
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As previously announced, the gain is likely to be offset by an
early retirement program, while the cash proceeds will be used to invest
in growth businesses and reduce debt.
"I am very pleased that we were recently able to complete the
divestiture of our consumer housewares business to Borden," Ackerman
said.
Corning recognized a loss from discontinued operations in the first
quarter of 1998 totaling $0.6 million, or $0.01 per share, compared to
income of $6.6 million, or $0.03 per share, for the first quarter of
1997.
Including the loss from discontinued operations, Corning's net
income for the first quarter of 1998 was $61.5 million, or $0.26 per
share, compared to net income of $92.0 million, or $0.39 per share for
the first quarter of 1997.
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; and
advanced materials for scientific and environmental markets. Corning's
total revenues in 1997 were $4.1 billion.
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Corning Investor Relations Contacts: Richard B. Klein (607) 974-8313
Katherine M. Dietz (607) 974-8217
Forward-Looking and Cautionary Statements
Except for historical information and discussions contained herein,
statements included in this release may constitute "forward-looking
statement" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements involve a number of risks,
uncertainties and other factors that could cause results to differ
materially, as discussed in the company's filing with the Securities and
Exchange Commission.
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Corning Incorporated and Subsidiary Companies
Consolidated Statements of Income
(Unaudited; in millions, except per share amounts)
Quarter Ended Quarter Ended
March 31, 1998 March 31, 1997
-------------- --------------
(Restated)
Revenues
Net sales $794.8 $817.1
Royalty, interest and dividend income 9.1 9.9
------ ------
803.9 827.0
Deductions
Cost of sales 514.7 475.7
Selling, general and administrative
expenses 112.9 128.8
Research and development expenses 67.1 51.0
Interest expense 17.6 21.2
Other, net 27.1 6.8
----- -----
Income from continuing operations
before taxes on income 64.5 143.5
Taxes on income from continuing
operations 21.0 49.0
----- -----
Income from continuing operations
before minority interest and
equity earnings 43.5 94.5
Minority interest in earnings of
subsidiaries (5.5) (12.5)
Dividends on convertible preferred
securities of subsidiary (3.4) (3.4)
Equity in earnings of associated
companies 27.5 6.8
------- ------
Income from continuing operations 62.1 85.4
Income (loss) from discontinued
operations, net of taxes (0.6) 6.6
------- ------
Net Income $ 61.5 $ 92.0
======= =======
Basic Earnings Per Share
Continuing operations $ 0.27 $ 0.37
Discontinued operations - 0.03
------ ------
Net Income $ 0.27 $ 0.40
====== ======
Diluted Earnings Per Share
Continuing operations $ 0.27 $ 0.36
Discontinued operations (0.01) 0.03
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Net Income $ 0.26 $ 0.39
======= ======
Dividends Declared $ 0.18 $ 0.18
======= ======
Shares used in computing earnings
per share
Basic earnings per share 229.6 226.5
Diluted earnings per share 232.6 243.3
The accompanying notes are an integral part of these statements.
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Corning Incorporated and Subsidiary Companies
Condensed Consolidated Balance Sheets
(Unaudited; in millions)
Mar. 31, 1998 Dec. 31, 1997
------------- -------------
(Restated)
Assets
Current Assets
Cash and short-term investments $ 79.5 $ 97.0
Receivables, net 514.1 559.7
Inventories 443.4 428.3
Deferred taxes on income and
other current assets 122.6 114.1
------- -------
Total current assets 1,159.6 1,199.1
Investments 352.3 310.0
Plant and Equipment, Net 2,225.5 2,267.9
Goodwill and Other Intangible Assets, Net 290.1 294.2
Other Assets 342.3 263.1
Net Assets of Discontinued Operations 369.1 357.6
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$4,738.9 $4,691.9
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Loans payable $ 383.8 $ 213.0
Accounts payable 172.4 300.0
Other accrued liabilities 398.2 444.7
------- -------
Total current liabilities 954.4 957.7
Other Liabilities 645.8 627.5
Loans Payable Beyond One Year 1,120.1 1,125.8
Minority Interest in Subsidiary
Companies 344.2 349.3
Convertible Preferred Securities
of Subsidiary 365.4 365.3
Convertible Preferred Stock 19.1 19.8
Common Stockholders' Equity 1,289.9 1,246.5
------- -------
$4,738.9 $4,691.9
======== ========
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 1, 1998
(1) Basic earnings per share is 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 shares outstanding were 229.6 million and
226.5 million for the first quarters of 1998 and 1997,
respectively. Series B preferred dividends amounted to $0.4
million for the first quarters of 1998 and 1997.
Diluted earnings per share is computed by dividing net income plus
dividends on convertible preferred stock 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 diluted earnings per
share for the first quarters of 1998 and 1997 were 232.6 million
and 243.3 million, respectively.
(2) Depreciation and amortization charged to continuing operations
during the first quarters of 1998 and 1997 totaled $78.9 million
and $77.2 million, respectively.
(3) Corning's effective tax rate for continuing operations was 32.5%
for the first quarter of 1998 and 34.1% for the first quarter of
1997. The lower 1998 rate was due to a higher percentage of
Corning's earnings resulting from consolidated entities with lower
effective tax rates.
(4) On April 1, 1998, Corning completed the recapitalization and sale
of a controlling interest in its consumer housewares business to an
affiliate of Borden, Inc. As a result, Corning now reports the
consumer housewares business as a discontinued operation. Corning
expects to record an after tax gain in the range of $25-$50 million
from this transaction in the second quarter. On April 8, 1998,
Corning announced that it will reduce its headcount by offering a
selective early retirement program and enhanced separation benefits
to its employees in the second quarter. Charges associated with
this program will be recorded in the second quarter.
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