Zenith Reports Fourth-Quarter Results

Apr 02, 2001, 01:00 ET from Zenith Electronics Corporation

    LINCOLNSHIRE, Ill., April 2 /PRNewswire/ -- Zenith Electronics Corporation
 today reported a net loss from continuing operations of $37.3 million for the
 fourth quarter of 2000, compared with a net loss of $3.9 million for the
 fourth quarter of 1999 (excluding an extraordinary gain for the 1999 period).
 Fourth-quarter sales were $160 million in 2000 and $219 million in 1999,
 reflecting planned reductions in analog products as the company focuses on
 higher-margin digital products.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19981120/CGF017 )
     For full-year 2000, excluding the company's discontinued Network Systems
 business, Zenith reported a loss of $74.8 million, compared with a 1999 net
 loss of $62.9 million, excluding the extraordinary gain.  Sales in were
 $559 million in 2000 and $740 million in 1999 primarily due to planned
 reductions in lower-profit consumer electronics products and customers.
 Fourth-quarter and full-year 2000 results reflect the continued effects of low
 prices in the analog television business, which Zenith is de-emphasizing in
 2001 as the company pursues its digital product, sales and marketing strategy.
 The digital strategy builds on Zenith's digital high-definition television
 (HDTV) technologies and display technologies from its parent company,
 LG Electronics Inc.
     An extraordinary gain of $70.2 million resulting from the company's
 financial restructuring was recorded in the fourth quarter of 1999.  On
 Aug. 8, 2000, the company sold the Zenith Network Systems division.  The
 discontinued segment has been segregated, and the consolidated statements of
 operations have been restated to reflect results of continuing operations.
 Founded in 1918, Zenith is a long-time U.S. leader in electronic entertainment
 products.  Based in Lincolnshire, Ill., Zenith is a primary developer of the
 U.S. digital high-definition television (HDTV) standard. Since November 1999,
 Zenith has been a wholly owned subsidiary of LG Electronics Inc., a global
 leader in consumer electronics.  Zenith stock is no longer publicly traded.
 
 
                         ZENITH ELECTRONICS CORPORATION
               STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
                                 (In millions)
 
                                      Three Months Ended   Twelve Months Ended
                                       Dec 31,   Dec 31,     Dec 31,  Dec 31,
                                       2000        1999       2000      1999
 
     Net sales                        $160.2      $219.4     $559.4    $739.9
 
     Costs, Expenses and Other:
       Cost of products sold           163.4       202.1      537.8     676.8
       Selling, general and
         administrative                 20.5        17.2       77.3      87.2
       Engineering and research          2.4         4.1       10.8      19.9
       Other operating expense
         (income), net                  (9.2)     (13.9)      (38.7)    (37.6)
       Restructuring charges            10.6         7.5       18.2      16.9
 
     Operating income (loss)            (27.5)       2.4      (46.0)    (23.3)
     Gain on asset sales, net              -       (1.2)          -      (4.1)
     Interest expense                    6.5         2.4       11.2       8.3
     Interest expense-related party        -         3.6       14.9      31.0
     Interest income                    (0.6)      (0.4)       (1.8)     (1.3)
 
     Income (loss) before
       reorganization items,
       income taxes and
       extraordinary item from
       continuing operations           (33.4)      (2.0)      (70.3)    (57.2)
     Reorganization items:
       Professional fees                   -         1.6          -       2.4
       Write off deferred debt
         issuance costs                    -           -          -       1.3
 
     Income (loss) before income
       taxes and extraordinary
       item from continuing
       operations                      (33.4)      (3.6)      (70.3)    (60.9)
     Income taxes                        3.9         0.3        4.5       2.0
 
     Net income (loss) before
       extraordinary item
       from continuing operations      (37.3)      (3.9)      (74.8)    (62.9)
     Extraordinary Gain                    -      (70.2)          -     (70.2)
 
     Net income (loss) from
       continuing operations           (37.3)       66.3      (74.8)      7.3
     Net income (loss) from
       discontinued Network Systems
       Division (provision for income
       taxes: zero in all periods)      (3.9)        1.2       (4.4)      1.2
     Gain on disposal of Network
       Systems Divison (provision
       for income taxes: zero)             -           -       (5.9)        -
 
     Net income (loss)                 (33.4)       65.1      (64.5)      6.1
 
 

SOURCE Zenith Electronics Corporation
    LINCOLNSHIRE, Ill., April 2 /PRNewswire/ -- Zenith Electronics Corporation
 today reported a net loss from continuing operations of $37.3 million for the
 fourth quarter of 2000, compared with a net loss of $3.9 million for the
 fourth quarter of 1999 (excluding an extraordinary gain for the 1999 period).
 Fourth-quarter sales were $160 million in 2000 and $219 million in 1999,
 reflecting planned reductions in analog products as the company focuses on
 higher-margin digital products.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19981120/CGF017 )
     For full-year 2000, excluding the company's discontinued Network Systems
 business, Zenith reported a loss of $74.8 million, compared with a 1999 net
 loss of $62.9 million, excluding the extraordinary gain.  Sales in were
 $559 million in 2000 and $740 million in 1999 primarily due to planned
 reductions in lower-profit consumer electronics products and customers.
 Fourth-quarter and full-year 2000 results reflect the continued effects of low
 prices in the analog television business, which Zenith is de-emphasizing in
 2001 as the company pursues its digital product, sales and marketing strategy.
 The digital strategy builds on Zenith's digital high-definition television
 (HDTV) technologies and display technologies from its parent company,
 LG Electronics Inc.
     An extraordinary gain of $70.2 million resulting from the company's
 financial restructuring was recorded in the fourth quarter of 1999.  On
 Aug. 8, 2000, the company sold the Zenith Network Systems division.  The
 discontinued segment has been segregated, and the consolidated statements of
 operations have been restated to reflect results of continuing operations.
 Founded in 1918, Zenith is a long-time U.S. leader in electronic entertainment
 products.  Based in Lincolnshire, Ill., Zenith is a primary developer of the
 U.S. digital high-definition television (HDTV) standard. Since November 1999,
 Zenith has been a wholly owned subsidiary of LG Electronics Inc., a global
 leader in consumer electronics.  Zenith stock is no longer publicly traded.
 
 
                         ZENITH ELECTRONICS CORPORATION
               STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
                                 (In millions)
 
                                      Three Months Ended   Twelve Months Ended
                                       Dec 31,   Dec 31,     Dec 31,  Dec 31,
                                       2000        1999       2000      1999
 
     Net sales                        $160.2      $219.4     $559.4    $739.9
 
     Costs, Expenses and Other:
       Cost of products sold           163.4       202.1      537.8     676.8
       Selling, general and
         administrative                 20.5        17.2       77.3      87.2
       Engineering and research          2.4         4.1       10.8      19.9
       Other operating expense
         (income), net                  (9.2)     (13.9)      (38.7)    (37.6)
       Restructuring charges            10.6         7.5       18.2      16.9
 
     Operating income (loss)            (27.5)       2.4      (46.0)    (23.3)
     Gain on asset sales, net              -       (1.2)          -      (4.1)
     Interest expense                    6.5         2.4       11.2       8.3
     Interest expense-related party        -         3.6       14.9      31.0
     Interest income                    (0.6)      (0.4)       (1.8)     (1.3)
 
     Income (loss) before
       reorganization items,
       income taxes and
       extraordinary item from
       continuing operations           (33.4)      (2.0)      (70.3)    (57.2)
     Reorganization items:
       Professional fees                   -         1.6          -       2.4
       Write off deferred debt
         issuance costs                    -           -          -       1.3
 
     Income (loss) before income
       taxes and extraordinary
       item from continuing
       operations                      (33.4)      (3.6)      (70.3)    (60.9)
     Income taxes                        3.9         0.3        4.5       2.0
 
     Net income (loss) before
       extraordinary item
       from continuing operations      (37.3)      (3.9)      (74.8)    (62.9)
     Extraordinary Gain                    -      (70.2)          -     (70.2)
 
     Net income (loss) from
       continuing operations           (37.3)       66.3      (74.8)      7.3
     Net income (loss) from
       discontinued Network Systems
       Division (provision for income
       taxes: zero in all periods)      (3.9)        1.2       (4.4)      1.2
     Gain on disposal of Network
       Systems Divison (provision
       for income taxes: zero)             -           -       (5.9)        -
 
     Net income (loss)                 (33.4)       65.1      (64.5)      6.1
 
 SOURCE  Zenith Electronics Corporation