Polaroid Has Loss, Cites Cost of Fighting Bid
Polaroid Corp. said Tuesday that it lost money for the final quarter and the full year of 1988 due to charges for its restructuring plan to avoid its pursuit by Shamrock Holdings Inc.
The Cambridge, Mass.-based instant photography concern reported a net loss in the fourth quarter of $7.5 million on sales of $533.2 million, contrasted with a profit of $42.3 million on revenue of $508.7 million a year earlier.
For the year, the company’s net loss was $22.6 million, contrasted with a profit of $125.2 million the prior year, as revenue rose to $1.86 billion from $1.76 billion.
But the company would have reported a profit for both periods if not for the restructuring charges to avoid Shamrock’s $3.2-billion bid. The fourth quarter included a pretax charge of $54.9 million and the full year had a charge of $151.9 million.
As part of its restructuring, Polaroid laid off employees and said it would enter the 35-millimeter film market.
Would Have Made Profit
It also recently announced a recapitalization that will include a $1.1-billion buyback of its shares and the placement of a $300 million preferred stock issue with the investment group Corporate Partners.
The company said that excluding the charge, operating earnings in the quarter would have been $66.5 million, compared to $42.9 million in the year-ago period.
Polaroid President and Chief Executive MacAllister Booth reiterated that the company expects 1989 operating profits to rise to $300 million, excluding Shamrock-related expenses.
The company said that because of the restructuring charges, it was unable to utilize certain U.S. tax credits. Polaroid said it expects to benefit from the utilization of these tax credits in 1989 and in future years.
In a related development, Burbank-based Shamrock Acquisition III Inc. announced that the U.S. District Court in Massachusetts has denied Polaroid’s motion that sought a preliminary injunction against Shamrock based on allegations of violation of federal proxy solicitation laws.
Shamrock said the court also denied Polaroid’s motion for expedited discovery in that action.
