UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10281
Smith Corona Corporation
(Exact name of registrant as specified in its charter)
Delaware 51-0286862
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
839 Route 13 South, Cortland, New York 13045
(Address of principal executive offices) (Zip Code)
(607) 753-6011
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding at
Class February 8, 1999
Common Stock, par value $.001 2,983,372
per share
SMITH CORONA CORPORATION AND SUBSIDIARIES
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Condensed Consolidated Balance Sheets -
December 31, 1998 and June 30, 1998 1
Consolidated Statements of Operations - For the
three and six months ended December 31, 1998
and 1997 2
Consolidated Statement of Changes in Stockholders'
Equity - For the six months ended
December 31, 1998 3
Consolidated Statements of Cash Flows - For the
six months ended December 31, 1998 and 1997 4
Notes to Consolidated Financial Statements 5-9
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 10-13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index 15
SMITH CORONA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
<TABLE>
<S> <C> <C>
December 31, June 30,
1998 1998
ASSETS (unaudited) (audited)
Current assets:
Cash and cash equivalents $ 3,095 $15,293
Accounts receivable (net of allowance
for doubtful accounts of $462 and
$638, respectively) 10,460 9,492
Inventories 13,857 15,399
Prepaid expenses and other current
Assets 3,312 3,090
Total current assets 30,724 43,274
Property, plant and equipment, net 3,589 6,511
Other assets 2,098 302
TOTAL $36,411 $50,087
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $ 4,044 $ 6,025
Accrued liabilities 9,443 8,204
Taxes payable 3,163 3,138
Total current liabilities 16,650 17,367
Pension liability 4,788 4,827
Postretirement benefits 2,963 3,846
Other long-term liabilities 3,568 4,007
Total liabilities 27,969 30,047
Stockholders' equity:
Common stock-3,313,401 shares
and 3,141,654 shares issued
and outstanding, respectively 3 3
Additional paid-in capital 55,781 55,512
Deferred compensation (270) (326)
Accumulated deficit (47,072) (35,149)
Total stockholders' equity 8,442 20,040
TOTAL $36,411 $50,087
</TABLE>
See accompanying notes to consolidated financial statements.
SMITH CORONA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share amounts)
<TABLE>
<S> <C> <C> <C> <C>
Three months ended Six months ended
December 31, December 31,
1998 1997 1998 1997
(unaudited) (unaudited)
Net sales $12,768 $17,005 $ 23,882 $31,797
Cost of goods sold 13,548 12,219 23,597 23,760
Gross margin (780) 4,786 285 8,037
Selling, general and
administrative expenses 5,269 7,244 10,792 12,036
Restructuring expense 141 - 1,324 -
Reorganization income - (310) - (249)
Gain on sale of
manufacturing operations - (3,700) - (3,700)
Other income - - - (100)
Operating income (loss) (6,190) 1,552 (11,831) 50
Interest (income) expense 4 (245) ( 3) (439)
Income (loss) before income
taxes and extraordinary
gain (6,194) 1,797 (11,828) 489
Income taxes 58 72 95 223
Income (loss) before
extraordinary gain (6,252) 1,725 (11,923) 266
Extraordinary gain-net - 460 - 460
Net income (loss) $(6,252) $ 2,185 $(11,923) $ 726
Earnings (loss) per common
share-basic:
Income (loss) before
extraordinary gain $ (2.10) $ .63 $ (4.00) $ .10
Extraordinary gain-net - .17 - .17
Net income (loss) $ (2.10) $ .80 $ (4.00) $ .27
Earnings (loss) per common
share-diluted:
Income (loss) before
extraordinary gain $ (2.10) $ .61 $ (4.00) $ .09
Extraordinary gain-net - .17 - .17
Net income (loss) $ (2.10) $ .78 $ (4.00) $ .26
</TABLE>
See accompanying notes to consolidated financial statements.
SMITH CORONA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the six months ended December 31, 1998
($ in thousands)
(unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
Additional
Common Paid-In Deferred Accumulated
Stock Capital Compensation Deficit Total
Balance June 30, 1998 $ 3 $55,512 $(326) $(35,149) $ 20,040
Net loss - - - (11,923) (11,923)
Deferred compensation - 269 (269) - -
Amortization of deferred
compensation - - 325 - 325
Balance December 31, 1998 $ 3 $55,781 $(270) $(47,072) $ 8,442
</TABLE>
See accompanying notes to consolidated financial statements.
SMITH CORONA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
<TABLE>
<S> <C> <C>
Six months ended
December 31,
1998 1997
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(11,923) $ 726
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 1,402 1,419
Gain on sale of manufacturing operations - (3,700)
Gain on disposition of
property, plant and equipment (62) (24)
Inventory provisions 1,897 (107)
Extraordinary gain - (460)
Other noncash items - 16
Changes in assets and liabilities:
Accounts receivable (968) (1,534)
Inventories (355) 559
Prepaid expenses and
other current assets (192) (1,314)
Other assets 116 (55)
Trade payables (1,981) 1,571
Accrued liabilities and income taxes
Payable 1,442 (1,676)
Postretirement benefits and pension
Liability (922) (1,065)
Other long-term liabilities (438) -
Net cash used in
operating activities (11,984) (5,644)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of property,
plant and equipment 62 100
Proceeds from the sale of
manufacturing operations - 13,672
Capital expenditures (276) (1,344)
Net cash provided by (used in)
investing activities (214) 12,428
Increase (decrease) in
cash and cash equivalents (12,198) 6,784
Cash and cash equivalents:
Beginning of period 15,293 21,985
End of period $ 3,095 $28,769
</TABLE>
See accompanying notes to consolidated financial statements.
SMITH CORONA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
($ and shares in thousands, except per share amounts)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The accompanying interim consolidated financial statements, although not
necessarily indicative of results of operations for the entire fiscal year,
include all adjustments of a normal recurring nature which are, in the
opinion of management, necessary for a fair presentation of the results for
the periods covered. They have been prepared by Smith Corona Corporation
(the "Company") without audit in accordance with the instructions to Form
10-Q and should be read in conjunction with the consolidated financial
statements and the notes thereto for the fiscal year ended June 30, 1998 as
contained in the Company's Annual Report on Form 10-K.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting periods. Actual results could differ from those
estimates.
NOTE 2 - CONTINGENCIES
Certain aspects of the Company's past handling and/or disposal of hazardous
substances have been the subject of investigation by federal and state
regulatory authorities, or have been the subject of lawsuits filed by such
authorities or by private parties. At December 31, 1998 and June 30, 1998,
the Company had recorded liabilities of approximately $1,865 and $1,889,
respectively, related primarily to remediation and monitoring of
environmental sites. Because of the uncertainties associated with
assessing environmental matters, the related ultimate liabilities are not
presently determinable. However, based on facts presently known,
management does not believe that these investigations, if resolved
adversely to the Company, would individually or in the aggregate have a
material adverse effect on the Company's financial position or results of
operations.
The Company was the owner and operator of manufacturing facilities in
Groton, New York (the "Groton Site") and Cortlandville, New York (the
"Cortlandville Site") and together, (the "Owner/Operator Sites"). The
Company's liability, if any, at the Owner/Operator Sites stems from
groundwater contamination at the Cortlandville Site and soil contamination
at the Groton Site. The remediation program at the Cortlandville Site
consists of round-the-clock pumping and filtering. The soil venting with a
soil infiltration injection system for the Groton Site remediation is now
reduced to periodic soil and water sampling. A decommissioning plan for
the Groton Site has been approved and decommissioning activities have
commenced. To the Company's knowledge, the only future costs that will be
associated with remediation of those sites are for operation, maintenance,
monitoring, shutdown, and post-shutdown of the systems. The Company
believes that it has set aside adequate reserves for the payment of
expenses for the ongoing remediation programs at the Groton and
Cortlandville Sites.
The Company is also a defendant or plaintiff in various other legal actions
that have arisen in the ordinary course of its business. It is the opinion
of management that the ultimate resolution of these matters and the
environmental matters discussed above will not have a material adverse
effect on the Company's financial position or results of operations.
The ultimate determination of taxes payable is pending the outcome of
certain legal entity reconfigurations within the Company's worldwide
structure. The reconfigurations are expected to be finalized prior to June
30, 1999. Based on the status of the related actions, management believes
that the amount recorded as taxes payable will exceed the amounts
ultimately due. The company will await final resolution of this matter
before making any adjustment required to taxes payable.
The Company's current procurement contract for typewriters and related
supplies and accessories provides for retroactive price increases in
certain circumstances including shortfalls in actual purchases versus those
forecasted. Due to shortfalls from forecasted purchases the Company has
incurred approximately $870 in retroactive price increases for the six
months ending December 31, 1998. The Company has begun discussions with
its supplier to eliminate along with other contractual items, the
retroactive price increase provisions of the contract particularly for the
remainder of this fiscal year. The ultimate retroactive price increase for
the six months ending June 30, 1999 is presently not determinable.
However, management estimates that the retroactive price increase could be
as high as $2,100 pending the actual level of purchases, the outcome of
discussions with its supplier and the outcome of certain other contract
provisions.
NOTE 3 - INVENTORIES
A summary of inventories, by major classification and net of reserves, is
as follows:
<TABLE>
<S> <C> <C>
December 31, June 30,
1998 1998
Raw materials and work-in-process $ 122 $ 91
Finished goods 13,735 15,308
Total $13,857 $15,399
</TABLE>
During the six months ended December 31, 1998 the Company recorded
inventory writedowns of approximately $1,897. These writedowns were
primarily related to sharp market price declines in telephony products,
facsimile machines and certain typewriters and the Company's strategic
decision to de-emphasize certain telephony and facsimile products which
face heavy competition and increasing price constraints that contribute to
continuing gross margin decline.
NOTE 4 - LOSS PER SHARE
The following tables reconcile the numerators and denominators of the basic
and diluted income (loss) per share for the income (loss) before
extraordinary gain presented in the Consolidated Statements of Operations:
<TABLE>
<S> <C> <C> <C>
Three months ended December 31, 1998
Loss Shares Per-Share
(Numerator) (Denominator) Amount
Basic Loss per Share
Net loss $(6,252) 2,983 $(2.10)
Effect of dilutive securities
Warrants (a) (a)
Stock Options (b) (b)
Restricted Stock - (c)
Diluted Loss per Share
Net loss $(6,252) 2,983 $(2.10)
Three months ended December 31, 1997
Loss Shares Per-Share
(Numerator) (Denominator) Amount
Basic Income per Share
Net income before
extraordinary gain $ 1,725 2,728 $(.63)
Effect of dilutive securities
Warrants (a) (a)
Restricted Stock - 85
Diluted Income per Share
Net income before
extraordinary gain $ 1,725 2,813 $(.61)
Six months ended December 31, 1998
Loss Shares Per-Share
(Numerator) (Denominator) Amount
Basic Loss per Share
Net loss $(11,923) 2,983 $(4.00)
Effect of dilutive securities
Warrants (a) (a)
Stock Options (b) (b)
Restricted Stock - (c)
Diluted Loss per Share
Net loss $(11,923) 2,983 $(4.00)
Note 4 - LOSS PER SHARE (cont.)
Six months ended December 31, 1997
Loss Shares Per-Share
(Numerator) (Denominator) Amount
Basic Income per Share
Net income before
extraordinary gain $ 266 2,693 $ .10
Effect of dilutive securities
Warrants (a) (a)
Restricted Stock - 81
Diluted Income per Share
Net income before
extraordinary gain $ 266 2,774 $ .09
</TABLE>
(a) Warrants to purchase 1,512,073 shares at December 31, 1998 and
1,512,423 at December 31, 1997 of common stock at $8.50 per share were
outstanding but were not included in the computation of diluted
earnings per share because the exercise price was greater than the
market price of the common shares and, accordingly they would have an
anti-dilutive effect.
(b) Options to purchase 147,738 shares of common stock at $6.13 per share
were outstanding but were not included in the computation of diluted
earnings per share because the option price was greater than the
average market price of the common shares and, accordingly they would
have an anti-dilutive effect.
(c) Restricted Stock of 330,029 shares at December 31, 1998 and 96,274
shares at December 31, 1997 would have an anti-dilutive effect in the
computation.
NOTE 5 - RESTRUCTURING
In the first quarter ended September 30, 1998, the Company reevaluated
its strategy and focus and deployment of its resources to take
advantage of new and existing opportunities. As a result, management
determined, among other things, that the Company needed to continue
transitioning its administrative cost structure from that of a
manufacturing company to one of a sales and marketing company.
In connection with this strategic initiative, the Company announced a
restructuring plan on September 28, 1998 and recorded a related
pre-tax and post-tax charge of $1,324 in the six months ended December
31, 1998. The substantial portion of this charge relates to the
severance cost associated with the termination of approximately 130
positions, primarily at the Company's Cortland, New York corporate
headquarters. The affected employees have been identified and notified.
To a much lesser extent the restructuring charge also includes provisions
related to a planned sale of the furnishings and equipment located at the
corporate headquarters.
In connection with the restructuring, the Company plans to sell the
building in Cortland, New York and to relocate its corporate headquarters
to more efficient facilities. The Cortland headquarters building is
being actively marketed and management believes the net book value of the
building will be fully recovered upon the sale. The related net book
value has been reclassified to other assets on the December 31, 1998
balance sheet.
Management believes that the workforce reductions, relocation to more
efficient facilities and the continued efforts to reduce certain targeted
costs such as advertising and new product development will reduce expenses
by approximately $9,000 annually.
NOTE 6 - Loan and Security Agreement
As of December 31, 1998, the Company was in default of the adjusted net
worth covenant provision of its loan and security agreement (the "Loan and
Security Agreement"). There were no borrowings outstanding under this
facility at December 31, 1998. The Company and its lender have executed a
waiver and amendment to the Loan and Security Agreement. Pursuant to the
provisions of the waiver and amendment, the Company must maintain an
adjusted net worth, as defined, of not less than one dollar through June
29, 1999 and $2,000 thereafter. Management believes that it will have
adequate financing flexibility under the Loan and Security Agreement, as
amended.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The forward-looking comments in this Management's Discussion and Analysis
of Results of Operations and Financial Condition are estimates by the
Company's management of future performance and are subject to a variety of
risks and uncertainties that could cause actual results to differ from
management's current expectations.
Results of Operations
A number of significant events occurred during the second quarter ended
December 31, 1998, as Smith Corona continued its transition from a
manufacturing company to a sales and marketing organization. In October
1998, Martin D. Wilson began serving as senior vice president and chief
financial officer of the Company. In November, the Company appointed
John A. Bermingham, an executive experienced in consumer electronics and
office product management, to the position of president and chief executive
officer. In December, Vincent T. Abbatiello was named as vice president of
sales.
During the second quarter, the management team began implementing the
restructuring plan announced in late September. Staff streamlining in
conjunction with the 60-day notice period began in late November and will
continue through the third quarter, resulting in the elimination of
approximately 130 positions. During the second quarter, the Company also
executed a lease for a 30,000 square-foot office site located in Cortland,
New York. The relocation of headquarters, which is expected to occur in
the third quarter, will result in a $1.6 million annual savings assuming
the sale of the current owned facility which is now being negotiated.
The Company continues to refine its business plan which calls for the
expansion and diversification of its product lines with a renewed emphasis
on building on the market's recognition of the Smith Corona brand in
printed document and data transmission. The Company believes it can
strengthen its global core business in typewriter and related accessories
and supplies by expanding its sales capabilities and by marketing more
visually appealing models.
In keeping with its history of marketing products related to printed
document production, the Company is also negotiating with numerous
suppliers to expand product lines and develop new product lines in inkjet
printer supplies, labeling devices and supplies, and digital photo printers
and supplies. As a result the Company is de-emphasizing its telephony and
facsimile products, which face heavy competition and decreasing prices that
contribute to lower margins.
The Company anticipates introducing the first of these newly sourced
products in the third quarter with the first impact on revenues expected to
occur in the fourth quarter. The Company intends to rely on its existing
distribution network to market its products to the small office/home office
(SOHO) market, as well as expand to new channels of distribution and to
increase its emphasis on international markets. The Company's success
depends on its ability to successfully source, market and sell its products
while continuing to implement cost controls to keep expenses in line with
revenues.
Net sales of $12.8 million for the quarter ended December 31, 1998
decreased 24.9 percent from last year's second quarter net sales of $17.0
million. For the six month period ended December 31, 1998, net sales were
$23.9 million, a 24.8 percent decrease from last year's comparable period
of $31.8 million. Unit sales of typewriters and related accessories and
supplies are lower than a year ago, both domestically and internationally,
as a result of a shrinking market and a continuing difficult and
competitive environment. The lower volumes are partially offset by newly
sourced product net sales of $1.9 million for the three months ended
December 31, 1998 and $3.5 million for the six months ended December 31,
1998. The prior year comparable three and six month periods ended
December 31, 1997 included $.4 million in newly sourced product sales.
Gross margin, as a percentage of net sales, was (6.1) percent for the
second quarter ended December 31, 1998, as compared to 28.1 percent for the
comparable period last year. For the six months ended December 31, 1998
the gross margin as a percentage of net sales was 1.2 percent as compared
to 25.3 percent last year. Sales in the three and six months ended
December 31, 1998 included the clearing out of low-end telephony products
and facsimile inventory that resulted in a negative impact on gross
margins. In the fourth quarter of the Company's 1998 fiscal year
competitors began reducing market prices for the low-end telephony and
facsimile products. These sharp price declines resulted in the Company
having to reduce its low-end telephony and facsimile product pricing and
record related inventory writedowns. Additionally, the six months ended
December 31, 1998 was adversely impacted by a charge of approximately $1.9
million for additional inventory related provisions.
The Company's current procurement contract for typewriters and related
supplies and accessories provides for retroactive price increases in
certain circumstances including shortfalls in actual purchases versus those
forecasted. Due to shortfalls from forecasted purchases, the Company has
incurred approximately $.9 million in retroactive price increases for the
six months ending December 31, 1998. The Company has begun discussions
with its supplier to eliminate, along with other contractual items, the
retroactive price increase provisions of the contract particularly for the
remainder of this fiscal year. The ultimate retroactive price increase for
the six months ending June 30, 1999 is presently not determinable.
However, management estimates that the retroactive price increase could be
as high as $2.1 million pending the actual level of purchases, the outcome
of discussions with its supplier and the outcome of certain other contract
provisions.
Selling, general and administrative expenses for the three and six months
ended December 31, 1998 were $5.3 million and $10.8 million as compared to
$7.2 million and $12.0 million last year. The decrease in spending from
the prior year was primarily associated with sharp declines in spending to
support development and advertising of newly sourced products.
In the first quarter ended September 30, 1998, the Company reevaluated
its strategy and focus and the deployment of its resources to take
advantage of new and existing opportunities. As a result of this
evaluation, management determined, among other things, that the
Company needed to continue transitioning its administrative cost
structure from that of a manufacturing company to one of a sales and
marketing company.
In connection with this strategic initiative, the Company announced a
restructuring plan on September 28, 1998 and recorded a related
pre-tax and post-tax charge of $1.3 million in the six months ended
December 31, 1998. The substantial portion of this charge relates to the
severance cost associated with the termination of approximately 130
positions, primarily at the Company's Cortland, New York corporate
headquarters. The affected employees have been identified and notified.
To a much lesser extent the restructuring charge also includes provisions
related to a planned sale of the furnishings and equipment located at the
corporate headquarters.
In connection with the restructuring, the Company plans to sell the
building in Cortland, New York and to relocate its corporate headquarters
to more efficient facilities. The Cortland headquarters building is
being actively marketed and management believes the net book value of the
building will be fully recovered upon the sale. The related net book
value has been reclassified to other assets on the December 31, 1998
balance sheet.
Management believes that the workforce reductions, relocation to more
efficient facilities and the continued efforts to reduce certain targeted
costs such as advertising and new product development will reduce expenses
by approximately $9.0 million annually.
The Company believes its products and major operating systems are year 2000
compliant. The Company is in the process of gathering information
concerning the year 2000-compliance status of its suppliers. In the event
that any of the Company's significant suppliers do not successfully and
timely achieve year 2000 compliance, the Company's business could be
adversely affected. Any significant disruption of the Company's ability to
communicate electronically with its business partners could negatively
impact the Company's business.
Financial Condition
The Company's primary source of liquidity and capital resources, on both a
short- and long-term basis, are cash balances and available borrowing
capacity.
As of December 31, 1998, the Company was in default of the adjusted net
worth covenant provision of its loan and security agreement ("Loan and
Security Agreement"). There were no borrowings outstanding under this
facility at December 31, 1998. The Company and its lender have executed a
waiver and amendment to the Loan and Security Agreement. Pursuant to the
provisions of the waiver and amendment, the Company must maintain an
adjusted net worth of not less than one dollar through June 29, 1999 and
$2.0 million thereafter. Management believes that it will have adequate
financing flexibility under the Loan and Security Agreement, as amended.
During the six months ended December 31, 1998, the Company's operating
activities used $12.0 million of cash, primarily as a result of the net
loss. Capital expenditures for the six months ended December 31, 1998 were
$.3 million and are primarily related to new product tooling. The Company
had no material commitments for additional capital expenditures at December
31, 1998.
The Company believes that its cash and borrowing capabilities will be
sufficient to meet its operating cash and capital expenditure requirements
in the foreseeable future.
PART II - Other Information
Item 1. Legal Proceedings.
Information required by this item is incorporated by reference from "Note 2
- - Contingencies" in the Notes to the Consolidated Financial Statements
appearing in this Form 10-Q Quarterly Report.
Item 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Stockholders of the Company held on November 23,
1998, the following individuals were elected directors of the Company:
Total Votes Total Votes
Directors For Against
Michael J. Murray 2,247,087 12,413
Dr. Richard N. Rosett 2,246,576 12,924
At the same meeting, the appointment of KPMG LLP as independent certified
public accountants for the Company for the fiscal year ending June 30, 1999
was ratified by a vote of 2,338,569 for, 54,831 against, and 6,195
abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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.
SMITH CORONA CORPORATION
February 12, 1999
By: /s/ Martin D. Wilson
Martin D. Wilson
Senior Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
EXHIBIT INDEX
Exhibit No. Description
EX-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 3,095
<SECURITIES> 0
<RECEIVABLES> 10,922
<ALLOWANCES> 462
<INVENTORY> 13,857
<CURRENT-ASSETS> 30,724
<PP&E> 38,345
<DEPRECIATION> 34,756
<TOTAL-ASSETS> 36,411
<CURRENT-LIABILITIES> 16,650
<BONDS> 0
0
0
<COMMON> 3
<OTHER-SE> 8,439
<TOTAL-LIABILITY-AND-EQUITY> 36,411
<SALES> 23,882
<TOTAL-REVENUES> 23,822
<CGS> 23,597
<TOTAL-COSTS> 23,597
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (3)
<INCOME-PRETAX> (11,828)
<INCOME-TAX> 95
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,923)
<EPS-PRIMARY> (4.00)
<EPS-DILUTED> (4.00)
</TABLE>
