ACCOUNTING CHANGE DELAYS MANVILLE 1991 RESULTS; PRELIMINARY EARNINGS RELEASED
ACCOUNTING CHANGE DELAYS MANVILLE 1991 RESULTS; PRELIMINARY EARNINGS RELEASED DENVER, Feb. 12 /PRNewswire/ -- Manville Corporation (NYSE: MVL) announced today that its final 1991 year-end and fourth quarter earnings will not be released until late March because the company is considering adopting a proposed new accounting standard for income taxes which is expected to be issued later this month by the Financial Accounting Standards Board. The company, however, did release preliminary results. In the fourth quarter, Manville adopted Statement of Financial Accounting Standards (SFAS) No. 106 to account for post-retirement benefits other than pensions, but effective January 1, 1991. Manville said that the one-time charge to record the accumulated obligation for post-retirement benefits is approximately $265 million. Previously, retiree health and life insurance coverage benefits were expensed as incurred. The company had adopted SFAS No. 96 in 1988 as the method of accounting for income taxes. The proposed new standard is designed to clear-up problems that have resulted from SFAS No. 96. The company would not speculate on the possible dollar impact of the proposed new accounting standard for income taxes if it is adopted by Manville. However, the company said that if the new standard is adopted it could allow the company to record an income tax benefit for 1991 to reflect the cumulative effect of the accounting change on prior years. Sales were $2 billion for the year versus $2.1 billion in 1990. Income from operations was $76 million compared to $232 million in 1990. For the quarter ended December 31, 1991, sales were $506 million versus $559 million for the same period last year. The loss from operations for the quarter was $11 million compared to income from operations of $31 million in the fourth quarter 1990. The company also announced pre-tax restructuring items totalling $28 million for the fourth quarter which include: -- a $23 million charge related to the company's decision to discontinue its phenolic foam roofing business; -- an $8 million write-off of software costs; -- an $8 million provision for expected separation and severance costs; -- and, a $16 million gain resulting from a reduction in environmental reserves as a result of the sale of the Carson, Ca. plant site.
These restructuring charges, when added to those previously announced, total $64 million for the year.
Included in the results for the year is a $40 million non- recurring gain from a patent infringement settlement with Guardian Industries, which was reported in the first quarter. "The fourth quarter was consistent with the pattern we have seen all during the year," Tom Stephens, Manville chairman said. "Riverwood International, our paperboard and packaging systems subsidiary, had strong results while our fiber glass-based subsidiary, Schuller International, continued to suffer under the burden of the severe recession in building materials markets. The good news is that we believe there are signs of increases in demand in this sector, indicating a slight recovery in building activity. We hope that this indicates that the long slide that started in 1989 is coming to an end." The building products segment of Schuller International, the Manville subsidiary renamed earlier this week from Manville Sales Corporation, generated $565 million in sales and a $39 million loss from operations for 1991 versus $714 million in sales and $54 million in income from operations for 1990. 1991 fourth quarter building products sales were $133 million versus $172 million in 1990. Loss from operations for the fourth quarter 1991 was $38 million versus income of $16 million for 1990. The engineered products segment of Schuller International reported $476 million in sales and $34 million in income from operations for 1991 versus $565 million in sales and $90 million in income from operations for 1990. 1991 fourth quarter sales were $112 million and a loss from operations was $2 million versus $125 million in sales and $7 million in income from operations in 1990. Richard A. Kashnow, president of Schuller International, said, "With our costs down substantially and supply and demand coming back into balance as a result of the reduction of some of our capacity and cost cutting last year, we see more profit opportunity in the recovery when it occurs. We closed high cost facilities and production lines, cut our overhead and are ready to compete more aggressively in our key markets." Riverwood International, the company's paperboard and packaging products segment, reported income from operations of $145 million in 1991 versus $159 million in 1990. Fourth quarter figures were $32 million in 1991 versus $38 million in 1990. Sales for the full year 1991 were $1 billion versus $892 million in 1990. 1991 fourth quarter sales were $266 million versus $274 million in 1990. Riverwood International President Thomas H. Johnson said, "We are delighted with our domestic performance in 1991 and see the opportunity to improve sales, earnings and productivity in 1992 and the years ahead. We continue to see the market for our specialty SUS(R) paperboard, beverage carriers and packaging machinery systems grow worldwide. The acquisitions we made over the last two years have allowed us to successfully enter the European and Pacific multiple packaging markets. "We also have seen prices for lumber and plywood products moving up in late 1991," Johnson added. "Brazil, on the other hand, had a difficult year and is the principal reason for the year-to-year drop in earnings." Bob Cole, Manville senior vice president for corporate finance said that the company ended 1991 in a strong financial position. "We have built the cash required to begin the dividend program announced last year. Our directors have approved terminating a $159 million domestic revolving credit facility and we are in the process of setting-up a new receivables sale facility with our banks for general corporate purposes and standby credit. We are looking forward to starting our dividend program as soon as the legal matters relating to it are resolved." Manville announced a dividend program for shareholders in November, 1990, as part of a restructuring of the funding for the Manville Personal Injury Settlement Trust (Trust). Under the plan, shareholders would receive up to $650 million in dividends paid on a pro-rata basis over a seven-year period. The Trust owns approximately 80 percent of Manville's common stock on a fully diluted basis. Payment would begin when the court order approving the settlement of the class action lawsuit seeking to restructure the Trust's methods of settling and paying asbestos related claims becomes final. The order is currently on appeal to the United States Court of Appeals for the Second Circuit. Manville Corporation is an international holding company with two principal subsidiaries - Schuller International, Inc., formerly Manville Sales Corporation, and Riverwood International Corporation. Products sold by Schuller International, Inc. include insulation, reinforcements, filtration and building products. Many of its products are marketed under the Manville brand name. Riverwood International Corporation is a vertically-integrated forest products company providing machinery-based packaging systems to customers worldwide. Founded in 1858, Manville Corporation employs approximately 16,000 people at more than 50 locations worldwide. Manville and its subsidiaries had approximately $2.7 billion in assets as of December 31, 1991. -0- 2/12/92 /CONTACT: Don Ferguson, 303-978-3255 or Charles Lemons (Financial), 303-978-4694, both of Manville Corporation/ /FIRST AND FINAL ADD -- MANVILLE PRELIMINARY RESULTS -- TO FOLLOW/ (MVL) CO: Manville Corporation ST: Colorado IN: PAP SU: ERN
BB -- DV005 -- 9373 02/12/92 16:03 EST
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|Date:||Feb 12, 1992|
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