HADSON CORPORATION REPORTS $4.3 MILLION LOSS FOR 1991;
SEEKS RESTRUCTURE UNDER PRE-PACKAGED CHAPTER 11
OKLAHOMA CITY, March 30 /PRNewswire/ -- Hadson Corporation (NYSE: HAD) announced a loss from continuing operations for the year ended Dec. 31, 1991, of $9.1 million ($.24 per share) on revenues of $441.6 million. After accounting for a gain of $4.8 million resulting from the December 1991 sale of a subsidiary, Hadson's 1991 net loss was $4.3 million ($.11 per share). This compares with 1990 earnings from continuing operations of $1.9 million ($.05 per share) on revenues of $452.4 million and a loss from discontinued operations of $144.3 million ($3.85 per share), related primarily to the disposal of Hadson's Defense Systems Group.
The company also announced that it has received a commitment from the Prudential Insurance Company of America to restructure approximately $89 million in senior long-term notes held by Prudential. The agreement with Prudential is subject to approval by the company's junior debtholders and stockholders of a plan that, in addition to restructuring Prudential's long-term senior notes, would restructure Hadson's 7-3/4 percent convertible subordinated debentures which have a face value of $30 million.
In announcing the developments, J. Michael Adcock, president and chief operating officer of Hadson Corporation, said, "Hadson intends to solicit approvals from the debentureholders and stockholders of a plan of reorganization to be filed pursuant to chapter 11 of the Federal bankruptcy laws after conducting such solicitation, a procedure commonly referred to as a pre-packaged bankruptcy. Hadson expects shortly to file preliminary proxy materials with the Securities and Exchange Commission concerning this solicitation.
"The bankruptcy filing will not include Hadson's primary operating unit, Hadson Energy Products and Services, Inc. (HEPSI), nor any other subsidiaries. HEPSI, based in Dallas, is operated independently of Hadson Corporation and has its own cash reserves, cash flows and independent financing structures to continue normal operations."
The plan of reorganization calls for the exchange of all obligations to Prudential for $55 million in 6.35 percent senior secured notes and for seven percent senior exchangeable preferred stock. In addition, if the plan is confirmed, Prudential would receive 38 million shares of common stock comprised of new Class B and Class C shares, with limited voting powers. Hadson would have the right to purchase up to almost 33 million of these shares in connection with an optional redemption or exchange of shares of the new series of preferred stock.
As part of the plan, Hadson will propose to exchange each $1,000 principal amount, plus the related accrued interest, of its 7-3/4 percent convertible subordinated debentures for 60 shares of eight percent junior convertible preferred stock having an aggregate liquidation preference of $600. These 60 shares will be convertible into 600 shares of common stock, which is equal to a conversion price of $1 per share.
In announcing Hadson Corporation's plan of reorganization, Adcock said, "We are pleased to have reached a satisfactory agreement with Prudential that will significantly reduce our cash debt service requirements during the first two years after the restructure. We believe that we have also developed a proposal for the debentureholders that maintains their priority within Hadson's capital structure, provides a continuing yield on their investment and yet enhances their potential return by reducing the conversion price on their securities."
Hadson's loss from continuing operations for the fourth quarter of 1991 was $7.3 million ($.19 per share) on total revenues of $128.2 million, compared with earnings from continuing operations of $1.6 million ($.04 per share) on revenues of $158.4 million in the fourth quarter of 1990.
On Dec. 15, 1991, Hadson completed the sale of its Hadson Power Systems Unit to a subsidiary of LG&E Energy Corp. A gain of $4.8 million ($.13 per share) was recognized from this sale, making Hadson's net loss for the fourth quarter of 1991 $2.4 million ($.06 per share). Earnings from discontinued operations for the fourth quarter of 1990 were $.3 million ($.01 per share).
"The loss in the fourth quarter of 1991," Adcock said, "is largely attributable to a reduction in the carrying value of certain natural gas liquids inventory as a result of declining prices, the losses recognized by Hadson Energy Resources Corporation resulting from the write-down of domestic oil and gas properties due to low natural gas prices and certain administrative costs related to our discontinued operations."
Hadson Corporation is an independent producer and supplier of energy products. Hadson Gas Systems, Inc. and United LP Gas Corporation are involved in purchasing, gathering, processing, transporting, storing and marketing natural gas, gas liquids and related services.
(In thousands, except per share amounts)
Periods ended Three Months Year
Dec. 31 1991 1990 1991 1990
Results from continuing
Revenues $128,179 $158,355 $441,565 $452,383
Earnings (loss) (7,263) 1,567 (9,149) 1,865
Earnings (loss) from
operations -- 268 -- (1,745)
Loss on disposal
of Defense Systems -- -- -- (142,529)
Gain on disposal of
Power Systems 4,829 -- 4,829 --
Net earnings (loss) (2,434) 1,835 (4,320) (142,409)
Earnings (loss) from
continuing operations (.19) .04 (.24) .05
Earnings (loss) from
discontinued operations .13 .01 .13 (3.85)
Net earnings (loss) (.06) .05 (.11) (3.80)
Shares used to
per share 37,758 37,695 37,758 37,455
/CONTACT: J. Michael Adcock, president and chief operating officer of Hadson Corporation, 405-235-9531/
(HAD) CO: Hadson Corporation ST: Oklahoma IN: OIL SU: ERN SM -- NY027 -- 2776 03/30/92 10:05 EST