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ACTON CORPORATION ANNOUNCES PRELIMINARY UNAUDITED RESULTS OF OPERATIONS

 RALEIGH, N.C., March 30 /PRNewswire/ -- Acton Corporation (AMEX: ATN) -- AMEX $3.75 Cumulative Preferred Stock (ATNPR) -- today announced that it was delaying the filing of its 1992 Form 10-K for the year ended Dec. 31, 1992. This delay results primarily from the need for additional analysis of recently received information from an outside actuary reviewing the Company's insurance subsidiary's loss reserves, which information may require further increases in the loss reserves. Acton anticipates receiving the necessary information in time to enable it to release its audited financial information by April 15, 1993.
 Although still subject to possible further adjustment, the Company announced preliminary unaudited results of operations for the year ended Dec. 31, 1992 resulted in a net loss of $17,222,731 or $7.51 per share as compared to a net loss of $18,790,775 or $8.16 per share for the year ended Dec. 31, 1991. All per share computations are after consideration of the Company's preferred stock dividend requirements.
 The 1992 reported operating loss resulted primarily from continuing losses at the Company's insurance and furniture manufacturing subsidiaries. The insurance subsidiary's underwriting continued at unsatisfactory levels in 1992. However, during the fourth quarter a new management team at the insurance subsidiary was brought in to focus on revamping product mix, pricing and underwriting practices with the near- term objective of reducing underwriting losses while identifying new products and markets to enable the insurance business to go forward on a more profitable basis. To-date, several unprofitable insurance programs have been discontinued while price increases have been implemented in other markets which were producing unsatisfactory results. On the positive side, realized and unrealized gains on the insurance subsidiary's investment portfolio totalled $10,519,729 during 1992.
 In an effort to increase operating efficiency and control costs, the Company's furniture business, which has been suffering from the very soft consumer demand over the past two years, previously announced the closing of one of its furniture manufacturing plants and the transfer of the production to other existing facilities. While a special charge to earnings of $1,800,000 was recorded in the third quarter to cover anticipated costs of the plant closing, the Company anticipates that lower operating and overhead costs resulting from the consolidation will favorably impact future reported results of operations.
 The Company's other businesses remained essentially unchanged during 1992. Military bootwear shipments remain depressed as the effect of the government's reduction in military personnel continues to be felt. The Company's real estate development business continues under pressure with no immediate improvement in the real estate markets foreseen. However, necessary writedowns to real estate in 1992 of $1,098,100 compared favorably with writedowns of $4,245,744 in the prior year. Cable television and textile equipment manufacturing businesses continued to do well.
 Stockholders' equity decreased $29,000,777 during 1992 to $3,075,735 primarily due to the above mentioned operating loss and the previously announced reduction of $10,933,955 required in conjunction with the Company's acquisition of Hickory Furniture Company's remaining interests in Sew Simple Systems, Inc., Acton's Fountain Inn, South Carolina subsidiary which designs and manufactures automated textile machinery. This reduction was required under generally accepted accounting principles due to the Sew Simple interests being acquired from an affiliate of Acton and does not represent an economic dimunition in shareholders' interests since the transaction price represented no more than the fair value of the assets acquired.
 The 1991 reported operating loss resulted primarily from $4,245,774 of writedowns to the carrying value of Acton's real estate held for development and sale necessitated by the continuing decline in real estate markets coupled with writedowns of $10,863,884 of certain securities in its investment portfolio to reflect what Acton believed to be other than temporary declines in their value.
 At the present time Acton is reviewing the underwriting losses reported by its insurance subsidiary in the fourth quarter of 1992 and may find it necessary to restate previously reported results of operations for the first three quarters of 1992. Accordingly, Acton is not presently able to release the results of operations for the fourth quarter of 1992 on a stand-alone basis.
 Acton Corporation is primarily engaged in specialized automobile insurance underwriting, furniture manufacturing, real estate development and the operation of a cable television system.
 ACTON CORPORATION
 Financial Summary
 (Amounts in Thousands, except per share data)
 Year Ended
 Dec. 31,
 1992 1991
 (unaudited)
 Net revenues $232,778 228,796
 Net loss (17,223) (18,791)
 Per share data:
 Primary and fully diluted:
 Net loss (7.51) (8.16)
 Assets 270,746 290,167
 Stockholders' equity 3,076 32,077
 -0- 3/30/93
 /CONTACT: Glenn J. Kennedy, Chief Financial Officer, Acton Corporation, 919-781-5611/
 (ATN)


CO: Acton Corporation ST: North Carolina IN: INS TLS SU: ERN

MM -- CH012 -- 1253 03/30/93 17:44 EST
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Publication:PR Newswire
Date:Mar 30, 1993
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