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 NEW HAVEN, Conn., Dec. 8 /PRNewswire/ -- SNET (NYSE: SNG) today announced charges against fourth quarter earnings totaling $4.08 per share, representing $259 million in after-tax costs to position itself as a leading telecommunications company providing high quality services at competitive prices. The charges include a restructuring charge for reengineering and workforce reductions, a refinancing charge and a charge for discontinued operations. These charges to earnings will result in a net loss for the fourth quarter, while income from continuing operations is expected to be positive.
 The restructuring charge amounts to $355 million ($204 million after tax) or $3.21 per share. It includes the costs that will be incurred for a force reduction involving approximately 2,500 layoffs over the next two years including those beginning in January, which have already been announced. The charge also includes the incremental costs of analyzing and implementing reengineering solutions; designing and developing new processes and tools to continue SNET's provision of excellent service; and the training of SNET employees to help them keep pace with the changes the company is implementing to streamline its business and meet the changing demands of customers.
 The company also anticipates a refinancing charge of approximately $45 million after tax or $0.71 per share in the fourth quarter, if certain refinancings are completed by the end of the year. In October, the company announced that it plans to refinance four outstanding debt issues with up to $540 million in medium-term notes if and when market conditions warrant. The company anticipates that, based on the current level of interest rates, three of the four outstanding issues will be refinanced in 1993, resulting in approximately $6 to 8 million in annual savings in interest expense.
 SNET will also book an after-tax charge of $10 million or $0.16 per share in the fourth quarter representing an updated estimate of the loss incurred due to the withdrawing from the lease/finance business with the discontinuance of SNET Credit in September 1992.
 The board announced the election of chief executive officer Daniel J. Miglio to the position of chairman effective January 1. Walter H. Monteith, the current chairman, will retire from the company and leave the board on that date.
 "To survive and prosper in these times of extraordinary change in our industry, we must continue to move quickly and to significantly lower costs as we redefine and restructure our business," said Miglio. "Although layoffs early next year will move us closer to the right size, as we move forward to reengineer our processes, regrettably, additional layoffs will be unavoidable. Our new organization and the new ways we are structuring our work will enable us to compete successfully, improve service and reduce costs.
 "The steps we are taking are essential to securing our future," Miglio said. "We are doing what we have to do to meet new competition by serving our Connecticut customers better than anyone else.
 "We believe the decisions we're making today are good news for our customers. They will be assured of receiving an increasing array of high quality products and services from us at competitive prices. In addition, SNET -- the only telecommunications company concerned with the whole state -- will continue investing in new technologies, while at the same time helping hold the line on local rates. This is crucial to the economic revitalization and competitiveness of Connecticut," Miglio said.
 The company is reorganizing with the formation of a new Office of the President to provide support to the company's eight business units. It is composed of Miglio, chairman and CEO; Donald R. Shassian, senior vice president and chief financial officer; Ronald M. Serrano senior vice president, corporate development and Robert F. Neal, senior vice president - organization development. Each of the business units will have financial and service quality accountability, building its own strong competitive position in the marketplace, under the SNET brand.
 "Today we face a new world - - one of tumultuous change, filled with the challenges of advancing technology and increased competition. We are determined to be a vigorous competitor in this world, and with our new structure of customer-focused units we are poised for the future," Miglio said.
 The business units are:
 SNET Network Services led by Fred T. Page, president. This unit will build and maintain the network of choice providing customers with the ultimate in service and value at competitive prices.
 SNET General Business Group led by John N. Sievers, president. This unit will provide value and superior service to medium and small business customers.
 SNET Custom Business Group led by A. Thomas Kelly, president. This unit will focus on meeting the telecommunication and electronic information services needs of large business customers.
 SNET Consumer Services Group led by Jean M. LaVecchia, president. This unit will meet the needs of SNET's largest group of customers with new convenience and cost saving communications solutions to enhance varied lifestyles.
 SNET Publishing led by Charles C. Judd, president. This unit will be a world class provider of directional and targeted information services with a focus on advertiser supported services bringing value to customers in Connecticut and other selected markets.
 SNET Mobility led by Peter P. Bassermann, president. This unit will be a leading provider of high quality wireless networks, products and services in the Northeast, with a primary focus on the Connecticut marketplace.
 SNET America led by Barbara B. Gatison, president. This unit will provide Connecticut customers with a complete range of long-distance services, including calling card and 800 service.
 SNET Multimedia Services led by Leon F. Wendelowski, president. This unit, which is engaged in a trial currently underway in West Hartford, will provide subscribers with a multimedia gateway to the convergence of voice, data and video technologies.
 In other action today, the directors reduced the size of the board to reflect Monteith's retirement and declared a regular quarterly dividend of 44 cents per share on the common stock of the company. The dividend is payable Jan. 15, 1994 to shareholders of record at the close of business on Dec. 20.
 Miglio, a graduate of the University of Pennsylvania, began his SNET career in 1962. He was elected to the SNET board of directors in 1990. Miglio was elected president and chief operating officer in 1992 and president and chief executive officer in 1993. He is a director and vice-chairman of the United States Telephone Association, a director of the Aristotle Corporation, the New Haven Symphony Orchestra and Special Olympics World Games, which will be held in New Haven in 1995.
 Monteith is a graduate of Amherst College. He was elected president of SNET in 1982, president and chief executive officer in 1984 and chairman, president and chief executive officer in 1985. He is a director of the Shawmut Bank-Connecticut and Kaman Corporation, and a director and vice chairman-Yale New Haven Hospital.
 -0- 12/8/93
 /CONTACT: Bill Seekamp of SNET, 203-771-2136/

CO: Southern New England Telecommunications Corporation ST: Connecticut IN: TLS SU: RCN

DJ -- NE011 -- 1844 12/08/93 14:29 EST
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Publication:PR Newswire
Date:Dec 8, 1993

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