SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
June 12, 1998
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(Date of Report)
June 9, 1998
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(Date of earliest event reported)
POLAROID CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-4085
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(Commission File Number)
04-1734655
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(IRS Employer Identification No.)
549 Technology Square, Cambridge, Massachusetts 02139
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(Address of principal executive offices) (Zip Code)
(781) 386-2000
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(Registrant's telephone number, including area code)
Item 5. Other Events.
On June 9, 1998, Polaroid Corporation issued a press release
which announced that it is taking steps in cooperation with its
dealers to accelerate the implementation of new inventory
strategies and practices at the dealer level. A copy of the
press release is attached as exhibit 99 and incorporated herein
by reference.
Item 7 (c) Exhibits
Exhibit 99.1 Polaroid Press Release dated June 9, 1998
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 hereunto duly authorized.
POLAROID CORPORATION
By /S/ Judith G. Boynton
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Name Judith G. Boynton
Title: Executive Vice President and Chief
Financial Officer
Dated: June 12, 1998
Exhibit 99.1
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Media Contact: Investor Contact:
Bob Guenther Phil Ruddick
(781) 386-3112 (781) 386-6638
email: [email protected] [email protected]
For immediate release
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Polaroid Takes Steps to Optimize
Inventory Levels at Major Dealers
CAMBRIDGE, Mass., --June 9, 1998 -- Polaroid Corporation
(NYSE: PRD) today announced that it is taking steps in
cooperation with its dealers to accelerate the implementation
of new inventory strategies and practices at the dealer level.
Gary DiCamillo, chairman and chief executive officer,
said, " Earlier this year, we noted that several large dealers
aggressively reduced inventory levels to achieve greater
operating efficiencies. To better understand the dynamics, we
dispatched teams to our top U.S. mass merchant and drug
retailers to map out their inventory plans. It became clear
that the combination of mergers among retail drug chains and
aggressive inventory controls by mass merchants would be
driving inventory levels lower well into next year. Rather
than deal with this in a piecemeal fashion over the coming
quarters, we chose to bring down channel inventories swiftly
now. We believe these steps put us out in front of this trend
and will allow us to focus more advertising and promotion on
end-user sell-through."
This move will reduce second quarter revenue by $50 to
$60 million and operating profit by about $35 million.
Separately, Polaroid said it will establish an additional $10
million reserve for Russian receivables in response to the
recent economic turmoil there. The total one-time reduction
of $45 million in operating profit will be offset by an
anticipated pre-tax gain of $45 million in real estate sales.
The company now projects fully-diluted earnings per share in
the $.55 to $.60 range for the second quarter.
DiCamillo added, "Our basic business remains solid.
April retail data show that U.S. sales of cameras and film
declined slightly versus a year ago. In Western Europe,
camera and film sales were up slightly. Despite worsening
economic conditions, retail sales in Japan were stable.
Meanwhile, we remain on track for breaking even in our digital
imaging business in the second half and are on target for
savings from our announced restructuring. We remain on plan to
begin rolling out a number of new products, including our
instant single-use camera, in the second half of 1998. We are
confident that 1999 will be one of the company's strongest in
recent years."
For the full year 1998, fully-diluted earnings per share
are expected to be in the same $2.20 range as last year,
including real estate sales and excluding last year's one-time
charges. The company now expects operating profit to be in
the $160 to $170 million range.
Polaroid Corporation, with sales of more than $2.1
billion, is the worldwide leader in instant imaging. Polaroid
supplies instant photographic cameras and films; digital
imaging hardware, software and media; medical diagnostic
imaging media; secure identification systems; graphics imaging
systems; sunglasses; polarizers; and holographic films to
markets worldwide.
Forward Looking Statements
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Certain statements in this press release may be forward
looking in nature, or "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995. The
Company desires to take advantage of the "safe harbor"
provisions of the Act. The Company therefore cautions
shareholders and investors that actual results may differ
materially from those projected or suggested in any forward-
looking statement as the result of a wide variety of factors,
which include but are not limited to the factors and
conditions set forth below. Many of the important factors
below have been discussed in prior Securities and Exchange
Commission filings by the Company.
The Company sells and markets its products worldwide. A major
risk associated with such worldwide operations is the
fluctuation of foreign exchange rates, particularly the
Japanese yen and German mark.
The Company's future operating results may be negatively
affected if the Company is unable to promptly design, develop,
manufacture and market innovative imaging products that meet
customer demands. Since some of the Company's new products
will replace or compete with its existing products, the
Company's operating results could be adversely affected even
if it is successful in developing and introducing new
products.
In addition, the timing and introduction of competitors' new
products could have a negative impact upon the Company's
introduction of new or enhanced products. The Company has
competitors worldwide, ranging from large corporations to
smaller and more specialized companies. Its most significant
traditional competitors, Eastman Kodak Company and Fuji Photo
Film Co., Ltd., are considerably larger than the Company and
have more resources. The Company anticipates that price
competition from conventional film and other imaging
technologies will place continued pressure on instant
products. The impact of these factors can cause results that
are both adverse and varied.
The Company is committed to reducing its cycle time in
bringing new products to market. There is no guarantee that
the Company will succeed in this endeavor. Shorter cycle
times present a challenge for the effective management of the
transition from existing products to new products and could
negatively impact the Company's future operating results.
The Company is affected by retail demand for its products,
particularly in the United States, Europe and Japan, and by
factors extraneous to the Company's performance such as
economic conditions. Moreover, dealers' implementation of new
inventory strategies and practices could continue to affect
operating profit. Changes in laws and regulations,
particularly in the environmental arena, also could adversely
affect the Company's results from operations.
While the Company believes that developing markets continue to
present attractive opportunities, such markets tend to be
considerably less stable than more established markets and
there can be no assurance that developing markets will produce
favorable results for the Company. For example, recently
there has been substantial unexpected economic turmoil in
Russia which could create difficulties in collection of
receivables.
The Company is continuing to develop digital imaging products.
The operating losses of the Company's digital imaging business
have reduced the profits of the Company. Markets for digital
imaging products are increasing rapidly and over time may
erode either the growth or the absolute size of the Company's
instant photography business. Worldwide marketing of digital
imaging products is highly competitive in price, quality and
product performance and there is no assurance that the Company
will attain the level of success in these markets that it has
achieved with respect to instant photography. The Company's
ability to compete effectively in digital imaging markets is
also dependent on its ability to develop new products in a
timely manner and to market them effectively.
The future prospects of the Company's digital imaging business
are uncertain. These markets require a speed of execution
that is greater than that of the Company's traditional
business; and, competition in these new markets includes
companies some of which have greater resources and have more
experience serving the demands of these markets. Moreover,
the Company's ability to succeed in these new markets will be
enhanced if it is able to develop meaningful strategic
business relationships with other companies; there can be no
assurance that it will achieve these objectives. The Company's
ability to achieve anticipated savings in overhead and other
costs from its restructuring programs is also important to its
ability to compete effectively in digital markets but there
can be no assurance that it will achieve these objectives.
The Company aggressively endeavors to protect its investment in
research and development by obtaining patents where feasible.
The ownership of these patents contributes to the Company's
ability to use its inventions and at the same time may provide
significant patent license revenue. While in the aggregate,
the Company's patents are considered to be of material
importance in the operation of its business, the patents
relating to any single product or process may not necessarily
be of material significance when judged from the standpoint of
the Company's total business.
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