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
December 16, 1998
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(Date of Report)
December 16, 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.)
784 Memorial Drive, 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)
<PAGE>
Item 5. Other Events.
On December 16, 1998, Polaroid Corporation issued a press release which
announced the following:
o that the Company had successfully renegotiated the terms of a $350 million
revolving credit agreement with all 14 of its bank lenders.
o the Company has concluded the sale of certain real estate properties for
$27 million in cash.
o the Company anticipates taking reserves of approximately $50 million in
restructuring charges and $40 million for Russian operations and other
impaired assets in 4Q98.
o the Company announces the resignation of Serafino Posa, executive vice
president, worldwide marketing, for personal reasons and to pursue other
interests. He will be replaced by Jeremiah Noonan, who has been promoted to
the position of senior vice president, worldwide marketing.
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 December 16, 1998.
<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 hereunto duly authorized.
POLAROID CORPORATION
By JUDITH G. BOYNTON
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Name JUDITH G. BOYNTON
Title: Executive Vice President and Chief Financial Officer
Dated: December 16, 1998
POLAROID SUCCESSFULLY RENEGOTIATES $350 MILLION
CREDIT AGREEMENT
- Concludes Sale of Real Estate Sale for $27 Million -
- - Anticipates Taking Reserves of Approximately $50 Million in Restructuring
Charges and $40 Million for Russian Operations and Other Impaired Assets in
4Q98 -
- Announces New Head of Worldwide Marketing -
CAMBRIDGE, Mass., -- December 16, 1998 -- Polaroid Corporation announced today
that it had successfully renegotiated the terms of a $350 million revolving
credit agreement with all 14 of its bank lenders, providing the company
liquidity needed to pursue its strategic plan. The company also announced that
it had concluded the sale of certain real estate properties for $27 million in
cash.
In addition, as previously indicated, Polaroid said that it expects to take
reserves in the fourth quarter of approximately $50 million to cover costs
associated with additional targeted restructuring initiatives, and $40 million
for anticipated losses from the disposition of impaired assets, primarily in
Russia. The additional restructuring is expected to reduce costs over the next
two years by a net of approximately $20-30 million more than previously
announced restructurings.
"Today's announcement puts Polaroid on a more solid footing to enter 1999 poised
for profitable growth. During the past 18 months, Polaroid has confronted a
series of global economic challenges and has reduced dealer inventories
substantially," said Gary T. DiCamillo, chairman and CEO of Polaroid
Corporation. "I am particularly pleased that all of the members of our bank
group agreed to remain lenders to Polaroid and support our strategic plan of
improving profitability by successfully introducing innovative new products into
the marketplace."
The amended credit agreement will extend until 2001 and has been structured to
provide financial flexibility for Polaroid. Interest will float with the initial
rate expected to equal LIBOR plus 2.50%. Funds drawn from the facility will be
secured by the company's U.S. inventory and receivables.
The agreement also contains a covenant with respect to distributions to equity
holders that, after payment of the company's regular dividend of $.15 per share
per quarter, will link purchases made pursuant to the company's previously
announced stock repurchase program to proceeds generated from the issuance of
equity to the company's ESOP and the exercise of outstanding stock options.
Polaroid announced separately that, as part of its ongoing program to generate
value from its real estate holdings, the company had concluded the sale of
certain Cambridge, Massachusetts properties for $27 million in cash, a pre-tax
gain of $22 million. The company indicated that the proceeds of the sale, in
conjunction with the company's other aggressive cash management practices, would
contribute to solid improvements in its cash flow.
As it indicated previously, the company also announced that it expected to take
reserves in the fourth quarter totaling approximately $90 million. These
reserves will be set aside to cover:
- --Approximately $50 million in costs associated with extending existing
restructuring initiatives, including the elimination of approximately 600-700
positions over the next 12-18 months, primarily in manufacturing, and selling,
general and administrative (SG&A) operations. Company management has notified
all of the organizations involved of these pending reductions in workforce.
Polaroid estimates that this extension of its restructuring initiatives will,
over the next two years, generate approximately $20-30 million of net additional
savings before taxes.
- --Approximately $40 million in anticipated losses from the disposition of
impaired assets, primarily those associated with Russian operations. Assets
include receivables, inventories, fixed assets and prepaid expenses.
"Taking these additional reserves closes a difficult chapter in the story of
Polaroid's turnaround," Mr. DiCamillo said. "With these actions behind us, we
can move forward in 1999 to focus on our ambitious targets for growing our core
businesses and ending the year with significant improvements in profitability,"
he added.
Polaroid also announced that Serafino Posa, executive vice president, worldwide
marketing, has resigned from the company for personal reasons and to pursue
other interests. Rather than replace Posa with a new officer, the company has
promoted Jeremiah Noonan, vice president, to the position of senior vice
president, worldwide marketing. Noonan will report to Gary DiCamillo.
Certain statements in this press release are forward-looking. These may be
identified by the use of forward-looking words such as "estimate" and
"targets." In our most recent form 10-Q filed with the Securities and Exchange
Commission, we have noted a variety of factors that could cause our actual
results and experience to differ from our anticipated results or other
expectations expressed in those forward-looking statements.
Polaroid, with annual sales of more than $2.1 billion in 1997, 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.
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