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 19, 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 July 19, 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: July 19, 1999 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
Vice President and Controller
<PAGE>
FOR IMMEDIATE RELEASE Media Contact:
Robert W. DeMallie
(607) 974-8778
[email protected]
Growing Demand for Corning Optical Fiber Produces
Strong Second-Quarter Results
CORNING, N.Y., July 19, 1999 - Corning Incorporated (NYSE:GLW) reported
that increased demand for its LEAF optical fiber and strong performance across
several other businesses helped produce excellent second-quarter results. The
company said net earnings totaled $0.49 per share, an increase of 26 percent,
compared with earnings of $0.39 per share from the same operations in 1998,
before special items. Net income for the second quarter of 1999 totaled $121.8
million, an increase of 31 percent, compared with $92.7 million for the same
operations in 1998, before special items.
Commenting on the quarter, Corning's Chairman and Chief Executive Officer,
Roger G. Ackerman said, "It was an outstanding quarter, with all three of our
business segments posting excellent results."
Second-quarter sales were $1.02 billion, compared to 1998 second-quarter
sales of $855.9 million, an increase of 19 percent. Excluding the impact of
acquisitions, sales would have increased 12 percent. Sales of optical
amplifiers and other photonic devices doubled in the quarter, as customers
continued to increase the efficiency of their communication networks. The
catalytic converter substrate business posted double digit volume growth, due
largely to a robust North American automotive market. At the same time, sales
of liquid crystal display glass increased more than 50 percent.
Equity earnings were down slightly from last year's second quarter. Good
performance at both Samsung-Corning Precision Glass and Samsung-Corning Company
Ltd. was offset by reduced earnings at the company's fiber ventures.
Commenting on the outlook for the remainder of the year, Ackerman said, "If
the very positive trends we saw in the first half of 1999 continue, we could see
full-year earnings grow by as much as 20 percent compared to last year."
(more)
<PAGE>
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Second-quarter 1998 results from continuing operations were impacted by a
restructuring charge and a non-operating gain. In addition, Corning recognized
a gain from the recapitalization and sale of a controlling interest in its
consumer housewares business, which was included in income from discontinued
operations. Including the impact of these items, Corning's 1998 second-quarter
net income totaled $123.8 million, or $0.53 per share.
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 products 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 revenues in 1998 were $3.5 billion. More information on the company
is available at www.corning.com.
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Investor Relations Contact:
Katherine M. Dietz
(607) 974-8217
[email protected]
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>
Six Months Ended Three Months Ended
June 30, June 30,
-------------------- ------------------
1999 1998 1999 1998
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Revenues
Net sales $1,912.2 $1,650.7 $1,020.0 $ 855.9
Royalty, interest, and
dividend income 21.1 21.1 11.2 12.0
Non-operating gain 20.5 20.5
-------- -------- -------- -------
1,933.3 1,692.3 1,031.2 888.4
Deductions
Cost of sales 1,164.9 1,037.2 621.7 526.4
Selling, general and
administrative expenses 272.9 239.5 136.1 126.6
Provision for restructuring 84.6 84.6
Research, development and
engineering expenses 164.4 142.2 84.8 75.1
Amortization of purchased
intangibles 10.3 7.9 5.2 4.0
Interest expense 33.5 32.5 17.2 14.9
Other, net 20.6 29.7 10.7 2.6
-------- -------- -------- -------
Income from continuing
operations before
taxes on income 266.7 118.7 155.5 54.2
Taxes on income from
continuing operations 81.3 34.9 47.4 13.9
-------- -------- -------- -------
Income from continuing
operations before minority
interest and equity earnings 185.4 83.8 108.1 40.3
Minority interest in earnings
of subsidiaries (27.5) (18.3) (17.4) (12.8)
Dividends on convertible
preferred securities
of subsidiary (2.3) (6.9) (3.5)
Equity in earnings of
associated companies 52.7 60.2 31.1 32.7
-------- -------- -------- -------
Income from continuing
operations 208.3 118.8 121.8 56.7
Income from discontinued
operations, net of taxes 66.5 67.1
-------- -------- -------- --------
Net Income $ 208.3 $ 185.3 $ 121.8 $ 123.8
======== ======== ======== ========
Basic Earnings Per Share
Continuing operations $ 0.87 $ 0.51 $ 0.50 $ 0.24
Discontinued operations 0.30 0.30
-------- -------- -------- --------
Net Income $ 0.87 $ 0.81 $ 0.50 $ 0.54
-------- -------- -------- --------
Diluted Earnings Per Share
Continuing operations $ 0.85 $ 0.51 $ 0.49 $ 0.24
Discontinued operations 0.28 0.29
-------- -------- -------- --------
Net Income $ 0.85 $ 0.79 $ 0.49 $ 0.53
======== ======== ======== ========
Dividends Declared $ 0.36 $ 0.36 $ 0.18 $ 0.18
======== ======== ======== ========
Shares used in computing
earnings per share
Basic earnings per share 238.1 229.8 242.4 229.9
======== ======== ======== ========
Diluted earnings per share 246.8 233.3 247.5 233.9
======== ======== ======== ========
</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>
June 30, 1999 Dec. 31, 1998
------------- -------------
<S> <C> <C>
Assets
Current Assets
Cash and short-term investments $ 76.1 $ 45.4
Accounts receivable, net 742.4 636.0
Inventories 553.2 458.7
Deferred taxes on income and
other current assets 241.1 170.2
-------- -------
Total current assets 1,612.8 1,310.3
Investments 412.5 366.2
Plant and equipment, net 2,826.5 2,684.9
Goodwill and other intangible
assets, net 311.0 309.7
Other assets 327.7 310.8
-------- --------
Total Asset $5,490.5 $4,981.9
======== ========
Liabilities and Shareholders' Equity
Current Liabilities
Loans payable $ 350.0 $ 204.6
Accounts payable 243.2 291.7
Other accrued liabilities 570.5 578.4
-------- --------
Total current liabilities 1,163.7 1,074.7
Other liabilities 685.7 674.1
Loans payable beyond one year 1,286.6 998.3
Minority interest in subsidiary
companies 363.5 346.1
Convertible preferred securities
of subsidiary 365.2
Convertible preferred stock 15.1 17.9
Common shareholders' equity 1,975.9 1,505.6
-------- --------
Total Liabilities and
Shareholders' Equity $5,490.5 $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 2, 1999
(1) Information about the performance of Corning's three operating segments for
the second quarter and first half of 1999 and 1998 are below. These
amounts do not include revenues, expenses and equity earnings not
specifically identifiable to segments.
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
---------------- ------------------
1999 1998 1999 1998
------ ------ ------- ------
<S> <C> <C> <C> <C>
Telecommunications
Net sales $1,071.3 $ 828.6 $ 582.8 $441.4
Income from continuing operations
before minority interest and
equity earnings $ 114.8 $ 87.7 $ 66.4 $ 52.8
Minority interest in earnings
of subsidiaries (12.9) (17.9) (8.7) (11.0)
Equity in earnings of
associated companies 7.4 12.9 2.9 8.4
-------- -------- -------- ------
Segment net income $ 109.3 $ 82.7 $ 60.6 $ 50.2
======== ======== ======== ======
Advanced Materials
Net sales $ 516.8 $ 520.0 $ 264.7 $261.3
Income from continuing operations
before minority interest and
equity earnings $ 48.1 $ 38.7 $ 28.0 $ 19.8
Minority interest in earnings
of subsidiaries 0.3 0.1
Equity in earnings of
associated companies 7.6 7.5 3.5 4.3
-------- -------- -------- ------
Segment net income $ 55.7 $ 46.5 $ 31.5 $ 24.2
======== ======== ======== ======
Information Display
Net sales $ 311.7 $ 289.5 $ 166.0 $146.2
Income from continuing operations
before minority interest and
equity earnings $ 27.1 $ (2.2) $ 17.8 $ 7.2
Minority interest in earnings
of subsidiaries (14.6) (4.4) (8.8) (5.6)
Equity in earnings of
associated companies 34.6 33.9 22.2 17.5
-------- -------- -------- ------
Segment net income $ 47.1 $ 27.3 $ 31.2 $ 19.1
======== ======== ======== ======
Total segments
Net sales $1,899.8 $1,638.1 $1,013.5 $848.9
Income from continuing operations
before minority interest and
equity earnings $ 190.0 $ 124.2 $ 112.2 $ 79.8
Minority interest in earnings
of subsidiaries (27.5) (22.0) (17.5) (16.5)
Equity in earnings
of associated companies 49.6 54.3 28.6 30.2
-------- -------- -------- ------
Segment net income $ 212.1 $ 156.5 $ 123.3 $ 93.5
======== ======== ======== ======
</TABLE>
<PAGE>
(2) Depreciation and amortization charged to continuing operations during
the first half of 1999 and 1998 totaled $189.7 million and $157.2
million, respectively.
(3) Corning's effective tax rate for continuing operations, excluding the
impact of special items, was 30.5% for the second quarter and year-to-date
1999, and 32.5% for the same periods in 1998. The lower 1999 rate is due
to a higher percentage of Corning's earnings resulting from consolidated
entities with lower effective tax rates.
(4) In the second quarter of 1999, Corning changed its method of determining
the cost of its last-in, first-out (LIFO) inventories to the first-in,
first-out (FIFO) method. As a result of declining costs and prices for
such inventories, Corning believes that the use of the FIFO method results
in a more current inventory valuation at period end dates and minimizes the
likelihood of lower-of-cost-or-market valuation issues. The impact of this
change to both current and historical operating results was immaterial.
(5) On April 30, 1999, Corning acquired BICC's telecommunications cable
business and the 50 percent equity interest in Optical Waveguides
Australia, Pty. Ltd. it did not already own for cash consideration of
approximately $135 million. Customary purchase price adjustments will
be settled in the third quarter.
(6) 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.
(7) 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.
(8) 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). The disclosure statement related to the Joint Plan
was sent to Dow Corning's creditors for consideration and action. During
the voting period ended May 14, 1999, 94% of those voting voted in favor of
the Joint Plan. Hearings to confirm the Joint Plan began on June 28, 1999.
To become effective, the Joint Plan requires 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 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.
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