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 14, 1999
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.
Item 7. Financial Statements.
Exhibits:
The Registrant's press release of April 14, 1999.
<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
Date: April 14, 1999 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
Vice President and Controller
<PAGE>
FOR IMMEDIATE RELEASE Media Contact:
April 14, 1999 Robert W. DeMallie
(607) 974-8778
[email protected]
Investor Relations Contact:
Katherine M. Dietz
(607) 974-8217
[email protected]
CORNING RETURNS TO DOUBLE DIGIT EARNINGS GROWTH
CORNING, N.Y., April 14, 1999 - Corning Incorporated (NYSE:GLW) reported
today that demand for its LEAF -Registered Trademark- brand optical fiber, the
most successful new optical fiber in the company's history, helped lift 1999
first quarter earnings to $0.36 per share, an increase of 33 percent compared
with earnings of $0.27 per share from the same operations in 1998. Net income
for the first quarter of 1999 totaled $86.5 million, an increase of 39 percent
compared with $62.1 million for the same operations in 1998.
First quarter sales were $892 million, compared to 1998 first quarter
sales of $795 million, an increase of 12 percent. This sales growth was
driven by gains in the optical fiber and cable and photonic technologies
businesses. First quarter 1998 sales and income were adversely impacted by
economic downturns in Asian markets.
Corning's Chairman and Chief Executive Officer Roger G. Ackerman said,
"While LEAF fiber was clearly the main driver for the quarter's improved
results, increased sales of new catalytic converter substrates and flat panel
display glass used by computer manufacturers also contributed to the strong
performance. These growth engines illustrate the value of our balanced
portfolio."
(more)
<PAGE>
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Sales of materials to the semiconductor industry remained soft due to
the worldwide slump in the construction of new manufacturing plants for
integrated circuits.
Equity earnings fell 21 percent primarily due to Samsung-Corning Company
Ltd., a Korean manufacturer of glass panels and funnels for television and
display monitors, which had an exceptionally strong first quarter in 1998 due
in part to favorable exchange rates.
Ackerman also said that, "The favorable trends in many of our growth
businesses lead us to anticipate that we will achieve our long-term goal of
15 percent earnings growth for the remainder of the year. At the same time,
we will continue to invest in new products and facilities for our future."
Established in 1851, Corning Incorporated creates leading-edge
technologies for the fastest-growing markets of the world's economy. Corning
manufactures optical fiber, cable and photonic components for the
telecommunications industry; and high-performance displays and components for
television and other communications-related industries. The company also
uses advanced materials to manufacture products for scientific, semiconductor
and environmental markets. Corning's total revenues in 1998 were $3.5
billion. More information on the company is available at
http://www.corning.com, Corning's website.
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Forward-Looking and Cautionary Statements
Except for historical information and discussions contained herein,
statements included in this release may constitute "forward-looking
statements" 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.
<PAGE>
Corning Incorporated and Subsidiary Companies
Consolidated Statements of Income
(Unaudited; in millions, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1999 1998
---- ----
<S> <C> <C>
Revenues
Net sales $892.2 $794.8
Royalty, interest and dividend income 9.9 9.1
------ ------
902.1 803.9
Deductions
Cost of sales 548.3 514.7
Selling, general and administrative
expenses 136.8 112.9
Research, development and engineering
expenses 79.6 67.1
Interest expense 16.3 17.6
Other, net 9.9 27.1
------ ------
Income from continuing operations before
taxes on income 111.2 64.5
Taxes on income from continuing
operations 33.9 21.0
------ ------
Income from continuing operations before
minority interest and equity earnings 77.3 43.5
Minority interest in earnings of
subsidiaries (10.1) (5.5)
Dividends on convertible preferred
securities of subsidiary (2.3) (3.4)
Equity in earnings of associated
companies 21.6 27.5
------ ------
Income from continuing operations 86.5 62.1
Loss from discontinued operations, net
of taxes (0.6)
------ ------
Net Income $ 86.5 $ 61.5
====== ======
Basic Earnings Per Share
Continuing operations $ 0.37 $ 0.27
Discontinued operations
------ ------
Net Income $ 0.37 $ 0.27
====== ======
Diluted Earnings Per Share
Continuing operations $ 0.36 $ 0.27
Discontinued operations (0.01)
------ ------
Net Income $ 0.36 $ 0.26
====== ======
Dividends Declared $ 0.18 $ 0.18
====== ======
Shares used in computing earnings per share
Basic earnings per share 233.8 229.6
Diluted earnings per share 245.2 232.6
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
Corning Incorporated and Subsidiary Companies
Condensed Consolidated Balance Sheets
(Unaudited; in millions)
<TABLE>
<CAPTION>
March 31, 1999 Dec. 31, 1998
-------------- -------------
<S> <C> <C>
Assets
Current Assets
Cash and short-term investments $ 151.9 $ 45.4
Accounts receivable, net 592.3 636.0
Inventories 514.0 458.7
Deferred taxes on income and
other current assets 180.2 170.2
-------- --------
Total current assets 1,438.4 1,310.3
Investments 377.5 366.2
Plant and equipment, net 2,729.4 2,684.9
Goodwill and other intangible
assets, net 309.0 309.7
Other assets 312.1 310.8
-------- --------
Total Assets $5,166.4 $4,981.9
======== ========
Liabilities and Shareholders' Equity
Current Liabilities
Loans payable $ 143.9 $ 204.6
Accounts payable 250.5 291.7
Other accrued liabilities 524.2 578.4
-------- --------
Total current liabilities 918.6 1,074.7
Other liabilities 683.1 674.1
Loans payable beyond one year 1,291.1 998.3
Minority interest in subsidiary
companies 349.6 346.1
Convertible preferred securities of
subsidiary 365.2
Convertible preferred stock 16.0 17.9
Common shareholders' equity 1,908.0 1,505.6
-------- --------
Total Liabilities and Shareholders'
Equity $5,166.4 $4,981.9
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
Corning Incorporated and Subsidiary Companies
Notes to Consolidated Financial Statements
Quarter 1, 1999
(1) Information about the performance of Corning's three operating segments for
the first quarter of 1999 and 1998 are below. These amounts do not include
revenues, expenses and equity earnings not specifically identifiable to
segments.
<TABLE>
<CAPTION> Three months ended
March 31,
--------------------
1999 1998
---- ----
<S> <C> <C>
Telecommunications
Net sales $488.5 $387.2
Income from continuing operations
before minority interest and
equity earnings $ 48.6 $ 34.9
Minority interest in earnings
of subsidiaries (4.3) (6.9)
Equity in earnings of
associated companies 4.4 4.5
------ ------
Segment net income $ 48.7 $ 32.5
====== ======
Advanced Materials
Net sales $252.1 $258.7
Income from continuing operations
before minority interest and
equity earnings $ 20.0 $ 18.9
Minority interest in earnings
of subsidiaries 0.1 0.2
Equity in earnings of
associated companies 4.1 3.2
------ ------
Segment net income $ 24.2 $ 22.3
====== ======
Information Display
Net sales $145.7 $143.3
Income from continuing operations
before minority interest and
equity earnings $ 9.4 $ (9.4)
Minority interest in earnings
of subsidiaries (5.9) 1.2
Equity in earnings of
associated companies 12.4 16.4
------ ------
Segment net income $ 15.9 $ 8.2
====== ======
Total segments
Net sales $886.3 $789.2
Income from continuing operations
before minority interest and
equity earnings $ 78.0 $ 44.4
Minority interest in earnings
of subsidiaries (10.1) (5.5)
Equity in earnings of
associated companies 20.9 24.1
------ ------
Segment net income $ 88.8 $ 63.0
====== ======
</TABLE>
<PAGE>
(2) Depreciation and amortization charged to continuing operations during
the first quarters of 1999 and 1998 totaled $94.6 million and $78.9
million, respectively. These amounts include amortization of purchased
intangibles totaling $5.1 million and $3.9 million in the first quarters
of 1999 and 1998, respectively.
(3) Corning's effective tax rate for continuing operations was 30.5% for the
first quarter of 1999 and 32.5% for the first quarter of 1998. The
lower 1999 rate was due to a higher percentage of Corning's earnings
resulting from consolidated entities with lower effective tax rates.
(4) During the first quarter of 1999, Corning issued $300 million of debt
securities under a shelf registration agreement previously filed with
the Securities and Exchange Commission. This issuance consisted of $150
million of notes with a 6.30% coupon due in 2009, and $150 million of
debentures with a 6.85% coupon due in 2029. The proceeds from these
borrowings will be used for the repayment of short and long-term debt,
working capital, capital spending and acquisitions.
(5) During the first quarter of 1999, Corning Delaware L.P., a special
purpose limited partnership in which Corning is the sole general
partner, called for the redemption of all Convertible Monthly Income
Preferred Securities (MIPS). The MIPS were guaranteed by Corning and
convertible into Corning common stock at a rate of 1.534 shares of
Corning common stock for each MIPS. As of March 31, 1999, all of the
MIPS were converted into 11.5 million shares of Corning common stock.
The conversion will cause Corning's reported income to increase in
comparison to 1998, but will have no impact on Corning's diluted
earnings per share.
(6) Dow Corning and the Committee of Tort Claimants, one of Dow Corning's
Chapter 11 creditor committees, filed with the United States Bankruptcy
Court (the Bankruptcy Court) a joint plan of reorganization on November 9,
1998 (the Joint Plan). After hearings held in early 1999, the Bankruptcy
Court ruled in early February 1999 that the disclosure statement related to
the Joint Plan was adequate to send to Dow Corning's creditors for
consideration. In that ruling, the Bankruptcy Court indicated that the
period for voting will extend through May 14, 1999 and hearings to confirm
the Joint Plan are scheduled to begin on June 28, 1999. To become
effective, the Joint Plan will require a favorable vote by many classes of
creditors and final Bankruptcy Court approval after confirmation hearings.
In addition, appeals of the Bankruptcy Court's confirmation order are
possible. The recent developments, including the support of the Committee
of Tort Claimants, tend to increase the probability that Dow Corning will
successfully emerge from Chapter 11 proceedings, but the timing and the
eventual outcome of these proceedings is uncertain.
(7) On March 1, 1999, Corning announced that it will acquire BICC's
telecommunication cable business and the 50 percent equity interest in
Optical Waveguides Australia, Pty. Ltd. it does not already own for cash
consideration of approximately $135 million. The transaction is
expected to be completed during the second quarter of 1999. Total sales
for these businesses in 1998 approximated $400 million.
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