SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: (Date of earliest event reported) January 26, 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.
To clarify the information about income from continuing operations contained
in the second sentence of the next to last paragraph of the January 25, 1999
press release, a revised release has been set forth below.
Item 7. Financial Statements.
Exhibits:
The Registrant's press release of January 25, 1999, as revised.
<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: January 26, 1999 By /s/ KATHERINE A. ASBECK
Katherine A. Asbeck
Vice President and Controller
<PAGE>
IMMEDIATE RELEASE Media Contact:
Robert W. DeMallie
(607) 974-8778
[email protected]
Investor Relations Contact:
Katherine M. Dietz
(607) 974-8217
[email protected]
CORNING REPORTS IMPROVED PERFORMANCE IN FOURTH QUARTER
CORNING, N.Y., January 25, 1999 - Corning Incorporated (NYSE:GLW)
reported today that its 1998 fourth quarter net income from continuing
operations before special items totaled $94.6 million, or $0.40 per share,
compared with 1997 net income from the same operations of $91.7 million, or
$0.39 per share. Fourth quarter sales were $926.8 million, up 3 percent
compared with 1997 sales of $902.3 million.
Corning recorded a non-operating gain in the fourth quarter of 1998 of
$19.2 million ($9.7 million after tax), or $0.04 per share, primarily related
to the divestiture of several small businesses in the company's Science
Products Division. Including this gain, Corning's income from continuing
operations for the fourth quarter of 1998 totaled $104.3 million, or $0.44
per share.
Corning's Chairman and Chief Executive Officer Roger G. Ackerman said,
"Although several of our businesses continue to experience severe price
competition from Asian competitors, we are very pleased to have finished the
year with better-than-expected overall performance and to have recovered from
a weak first half. North American demand for optical fiber and cable,
including our new LEAF optical fiber for high-data-rate networks, increased
significantly. We also saw improvement in both our information display and
environmental products businesses."
Fourth-quarter revenue growth in the Telecommunications Segment was due
primarily to the fast-paced growth of the Photonic Technologies Division.
The strong volume gains in optical fiber and cable were offset by the
continuation of significant price declines. While fourth-quarter earnings in
the segment were down versus 1997, the comparisons were better than the first
three quarters of 1998.
(more)
<PAGE>
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The Advanced Materials Segment was positively impacted by growing demand
for new products and manufacturing-efficiency gains in the environmental
products business and by increased equity earnings from Eurokera, a maker of
glass-ceramic cooking surfaces. These improvements were more than offset by
the continued weakness in the semiconductor materials business and increased
R&D spending in the advanced life science business.
In the Information Display Segment, strengthening demand for liquid
crystal display glass used in notebook computers and stronger-than-expected
results in the North American-based conventional television glass business
led the significant improvement in year-over-year fourth-quarter revenue and
earnings growth.
"The favorable trends in the second half, combined with strong demand in
the telecommunications market for our LEAF optical fiber and photonic
technologies, has put us on track to return to double-digit earnings growth
in 1999," Ackerman said. "We will fuel this growth by continuing to invest
in the development of new products for our growth platforms in
telecommunications, information display and advanced materials."
Corning reported full year 1998 income from continuing operations before
special items of $353.8 million, or $1.50 share, compared to $408.9 million,
or $1.72 per share from the same operations in 1997. Full-year sales were
$3.48 billion, down slightly from 1997 sales of $3.52 billion.
In addition to the non-operating gain in quarter four, full-year 1998
income from continuing operations includes a restructuring charge of $84.6
million ($49.2 million after tax and minority interest), or $0.21 per share,
and a non-operating gain of $20.5 million ($13.2 million after tax), or $0.06
per share, recorded in the second quarter. Including these items, net income
from continuing operations totaled $327.5 million, or $1.39 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 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.
Forward-Looking and Cautionary Statements
Except for historical information and discussions contained herein,
statements included in this release 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.
-30-
<PAGE>
Corning Incorporated and Subsidiary Companies
Consolidated Statements of Income
(Unaudited; in millions, except per share amounts)
<TABLE>
<CAPTION>
Year Ended Three Months Ended
Dec. 31, Dec. 31,
------------------- -------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues
Net sales $ 3,484.0 $ 3,516.8 $ 926.8 $ 902.3
Royalty, interest and
dividend income 48.4 37.5 15.5 9.1
Non-operating gains 39.7 19.2
--------- --------- ------- -------
3,572.1 3,554.3 961.5 911.4
Deductions
Cost of sales 2,153.9 2,042.3 558.7 526.4
Selling, general and
administrative expenses 487.7 541.6 135.6 139.9
Research, development and
engineering expenses 293.9 250.3 80.1 75.2
Provision for restructuring 84.6
Interest expense 56.7 72.0 12.9 15.1
Other, net 55.7 18.9 15.3 8.5
--------- --------- ------- -------
Income from continuing
operations before taxes on
income 439.6 629.2 158.9 146.3
Taxes on income from continuing
operations 132.8 209.5 48.7 48.3
--------- --------- ------- -------
Income from continuing
operations before minority
interest and equity earnings 306.8 419.7 110.2 98.0
Minority interest in earnings
of subsidiaries (60.9) (76.3) (22.3) (20.1)
Dividends on convertible
preferred securities of
subsidiary (13.7) (13.7) (3.4) (3.4)
Equity in earnings of associated
companies 95.3 79.2 19.8 17.2
--------- --------- ------- -------
Income from continuing
operations 327.5 408.9 104.3 91.7
Income from discontinued
operations, net of income
taxes 66.5 30.9 16.8
--------- --------- ------- -------
Net Income $ 394.0 $ 439.8 $ 104.3 $ 108.5
========= ========= ======= =======
Basic Earnings Per Share
Continuing operations $ 1.42 $ 1.79 $ 0.45 $ 0.40
Discontinued operations 0.29 0.13 0.07
--------- --------- ------- -------
Net Income $ 1.71 $ 1.92 $ 0.45 $ 0.47
========= ========= ======= =======
Diluted Earnings Per Share
Continuing operations $ 1.39 $ 1.72 $ 0.44 $ 0.39
Discontinued operations 0.28 0.13 0.07
--------- --------- ------- -------
Net Income $ 1.67 $ 1.85 $ 0.44 $ 0.46
========= ========= ======= =======
Dividends Declared $ 0.72 $ 0.72 $ 0.18 $ 0.18
========= ========= ======= =======
</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> Dec. 31, 1998 Dec. 31, 1997
------------- -------------
<S> <C> <C>
Assets
Current Assets
Cash and short-term investments $ 45.4 $ 97.0
Receivables, net 636.0 559.7
Inventories 458.7 428.3
Deferred taxes on income and
other current assets 170.2 114.1
-------- --------
Total current assets 1,310.3 1,199.1
Investments 366.2 310.0
Plant and Equipment, Net 2,684.9 2,267.9
Goodwill and Other Intangible Assets, Net 309.7 294.2
Other Assets 310.8 263.1
Net Assets of Discontinued Operations 357.6
-------- --------
$4,981.9 $4,691.9
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Loans payable $ 204.6 $ 213.0
Accounts payable 291.7 300.0
Other accrued liabilities 578.4 444.7
-------- --------
Total current liabilities 1,074.7 957.7
Other Liabilities 674.1 627.5
Loans Payable Beyond One Year 998.3 1,125.8
Minority Interest in Subsidiary
Companies 346.1 349.3
Convertible Preferred Securities
of Subsidiary 365.2 365.3
Convertible Preferred Stock 17.9 19.8
Common Stockholders' Equity 1,505.6 1,246.5
-------- --------
$4,981.9 $4,691.9
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
Corning Incorporated and Subsidiary Companies
Notes to Consolidated Financial Statements
Quarter 4, 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 229.4 million and 229.6 million for the fourth quarter and
year ended December 31, 1998, respectively, compared with 229.1 million and
228.1 million for the same periods in 1997. Series B preferred dividends
amount to $0.4 million and $1.6 million in the fourth quarter and year
ended December 31, 1998 and 1997, respectively.
Diluted earnings per share is computed by dividing net income by the
weighted average number of shares outstanding after adjusting both amounts
by the effects of potentially dilutive securities. Net income is increased
by the amount of income assumed to be received on conversion of Corning's
convertible securities and, in 1998, adjusted for dividends on convertible
preferred stock. The weighted average number of shares outstanding is
increased by the amount of dilutive stock options, the number of dilutive
securities assumed to be issued on conversion of Corning's convertible
securities and, in 1997, convertible preferred stock. The shares used in
computing diluted earnings per share for the fourth quarter and year ended
December 31, 1998 were 243.8 million and 243.9 million, respectively,
compared with 245.5 million and 245.4 million for the same periods in 1997.
(2) Depreciation and amortization charged to continuing operations during the
years ended December 31, 1998 and 1997 totaled $298.0 million and $285.9
million, respectively.
(3) Corning's effective tax rate for continuing operations, excluding the
impact of specials, was 28.1% and 30.5% for the fourth quarter and year
ended December 31, 1998, respectively, and 33% and 33.3% for the same
periods in 1997. The lower 1998 rate is due to a higher percentage of
Corning's earnings resulting from consolidated entities with lower
effective tax rates and growth in export sales of domestically produced
products.
(4) In the fourth quarter of 1998, Corning recorded a non-operating gain of
$19.2 million ($9.7 million after tax), or $0.04 per share, related to the
divestiture of several small businesses within the science products
division.
(5) On December 1, 1998, Corning acquired the 50% interest in Optical Fibres
previously owned by BICC, plc. The consideration was comprised of
approximately $47 million in cash and the assumption of $27 million in
debt. The acquisition was recorded using the purchase method of
accounting. The excess cost over the fair value of tangible net assets
acquired is approximately $38 million and is being amortized over periods
up to 20 years. Optical Fibres became a wholly owned subsidiary as a
result of this transaction and the results of its operations are included
in the consolidated financial statements from the date of the transaction.
(6) In the second quarter of 1998, Corning recorded a restructuring charge of
$84.6 million ($49.2 million after tax and minority interest), or $0.21 per
share. The charge is comprised of early retirement incentives and
severance costs.
<PAGE>
(7) In June, 1998, Molecular Simulations, Inc. (MSI) merged with Pharmacopeia,
Inc., a publicly traded company (NASDAQ: PCOP). Corning previously owned
35% of MSI. Corning realized a gain of $20.5 million ($13.2 million after
tax), or $0.06 per share from this transaction.
(8) 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 received cash proceeds of $593 million and will
continue to retain an 8 percent interest in the Corning Consumer Products
Company. In addition, Corning could receive an additional payment of up to
$15 million if certain financial targets are met by Corning Consumer
Products Company for the three year period 1998 - 2000.
Corning recorded an after-tax gain of $67.1 million, or $0.29 per share, in
the second quarter of 1998. Corning used approximately $350 million of the
proceeds to repay current borrowings and will use the remaining proceeds to
fund restructuring activities and to invest in its future operations.
Corning's consolidated financial statements and notes thereto report the
consumer housewares business as a discontinued operation. Prior period
consolidated financial statements and notes have been restated accordingly.
(9) Dow Corning Corporation, in which Corning has a 50% interest, filed a plan
of reorganization with the bankruptcy court in November 1998. The plan is
the product of extended negotiations with the Tort Claimants' Committee,
which is now a joint proponent of the plan. The bankruptcy court held
hearings from January 20-22, 1999 to review the disclosure statement that
the plan proponents propose to send to creditors. The hearing was
continued until February 4, 1999. Assuming the bankruptcy court approves
the disclosure statement, the plan of reorganization will require a
favorable vote by many classes of creditors, as well as final court
approval after further hearings, and may be subject to appeals. The recent
developments tend to increase the probability that Dow Corning will
successfully emerge from Chapter 11 proceedings, but the timing and
eventual outcome of these proceedings are inherently uncertain.
<PAGE>
(10) Financial Accounting Standard No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (FAS 131) became effective December 31,
1998. Information for each of Corning's three operating segments for the
fourth quarter and year-to-date 1998 and 1997 are below. These amounts do
not include revenues, expenses and equity earnings not specifically
identifiable to segments.
<TABLE>
<CAPTION> Year ended Three months ended
December 31, December 31,
--------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Telecommunications
Net sales $1,791.7 $1,795.3 $479.3 $460.9
Income from continuing operations
before minority interest and
equity earnings $ 221.9 $ 307.3 $ 55.3 $ 69.8
Minority interest in earnings
of subsidiaries (37.3) (46.0) (6.9) (14.1)
Equity earnings of associated
companies 20.7 36.2 6.3 6.5
-------- -------- ------ ------
Segment net income $ 205.3 $ 297.5 $ 54.7 $ 62.2
======== ======== ====== ======
Advanced Materials
Net sales $1,020.1 $1,030.4 $252.4 $264.5
Income from continuing operations
before minority interest and
equity earnings $ 75.9 $ 89.8 $ 20.2 $ 23.7
Minority interest in earnings
of subsidiaries 0.3 0.7 0.4
Equity earnings of associated
companies 17.6 13.1 6.4 3.7
-------- -------- ------ ------
Segment net income $ 93.8 $ 103.6 $ 26.6 $ 27.8
======== ======== ====== ======
Information Display
Net sales $ 644.7 $ 664.2 $185.4 $167.3
Income from continuing operations
before minority interest and
equity earnings $ 39.2 $ 16.4 $ 23.9 $ 4.1
Minority interest in earnings
of subsidiaries (27.6) (31.0) (15.4) (6.5)
Equity earnings of associated
companies 44.9 21.7 4.4 5.9
-------- -------- ------ ------
Segment net income $ 56.5 $ 7.1 $ 12.9 $ 3.5
======== ======== ====== ======
Total Segments
Net sales $3,456.5 $3,489.9 $917.1 $892.7
Income from continuing operations
before minority interest and
equity earnings $ 337.0 $ 413.5 $ 99.4 $ 97.6
Minority interest in earnings
of subsidiaries (64.6) (76.3) (22.3) (20.2)
Equity earnings of associated
companies 83.2 71.0 17.1 16.1
-------- -------- ------ ------
Segment net income $ 355.6 $ 408.2 $ 94.2 $ 93.5
======== ======== ====== ======
</TABLE>
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<PAGE>
Corning, Incorporated and Subsidiary Companies Contact: Katherine M. Dietz
(In millions) (607) 974-8217
Exhibit 1
<TABLE>
<CAPTION>
1998
-----------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Telecommunications
Net sales $387.2 $441.4 $483.8 $479.3 $1,791.7
Income from continuing
operations before minority
interest and equity
earnings $ 34.9 $ 52.8 $ 78.9 $ 55.3 $ 221.9
Minority interest in
earnings of subsidiary (6.9) (11.0) (12.5) (6.9) (37.3)
Equity earnings of
associated companies 4.5 8.4 1.5 6.3 20.7
------ ------ ------ ------ --------
Segment net income $ 32.5 $ 50.2 $ 67.9 $ 54.7 $ 205.3
====== ====== ====== ====== ========
Advanced Materials
Net sales $258.7 $261.3 $247.7 $252.4 $1,020.1
Income from continuing
operations before minority
interest and equity
earnings $ 18.9 $ 19.8 $ 17.0 $ 20.2 $ 75.9
Minority interest in
earnings of subsidiary 0.2 0.1 0.3
Equity earnings of
associated companies 3.2 4.3 3.7 6.4 17.6
------ ------ ------ ------ --------
Segment net income $ 22.3 $ 24.2 $ 20.7 $ 26.6 $ 93.8
====== ====== ====== ====== ========
Information Display
Net sales $143.3 $146.2 $169.8 $185.4 $ 644.7
Income from continuing
operations before minority
interest and equity
earnings $ (9.4) $ 7.2 $ 17.5 $ 23.9 $ 39.2
Minority interest in
earnings of subsidiary 1.2 (5.6) (7.8) (15.4) (27.6)
Equity earnings of
associated companies 16.4 17.5 6.6 4.4 44.9
------ ------ ------ ------ --------
Segment net income $ 8.2 $ 19.1 $ 16.3 $ 12.9 $ 56.5
====== ====== ====== ====== ========
Total Segments
Net sales $789.2 $848.9 $901.3 $917.1 $3,456.5
Income from continuing
operations before minority
interest and equity
earnings $ 44.4 $ 79.8 $113.4 $ 99.4 $ 337.0
Minority interest in
earnings of subsidiary (5.5) (16.5) (20.3) (22.3) (64.6)
Equity earnings of
associated companies 24.1 30.2 11.8 17.1 83.2
------ ------ ------ ------ --------
Segment net income $ 63.0 $ 93.5 $104.9 $ 94.2 $ 355.6
====== ====== ====== ====== ========
</TABLE>
These amounts do not include revenues, expenses and equity earnings not
specifically identifiable to segments.
