-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QIDNiPw6zu7dhuXHDwj7YfS+MRqb6I3gh2CGbd12u9hOYpxan5m99uhZ3HaNfG3P nKq/ijzol+QFbB81d62liA== 0000950116-95-000499.txt : 19951119 0000950116-95-000499.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950116-95-000499 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OAKHILL SPORTSWEAR CORP /NY/ CENTRAL INDEX KEY: 0000012203 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 132625545 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05613 FILM NUMBER: 95592678 BUSINESS ADDRESS: STREET 1: 1411 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2127898900 MAIL ADDRESS: STREET 1: 1411 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10018 FORMER COMPANY: FORMER CONFORMED NAME: BIO MEDICAL SCIENCES INC DATE OF NAME CHANGE: 19830725 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTRONIC SCIENCES INC DATE OF NAME CHANGE: 19690415 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1995 Commission File Number 0-5613 -------------------- ---------- OAK HILL SPORTSWEAR CORPORATION - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) NEW YORK 13-2625545 - ------------------------------------------------------------------------------ (State or other jurisdiction (I.R.S Employer of incorporation) Identification Number) 1411 BROADWAY, NEW YORK, NEW YORK 10018 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (212) 789-8900 - ------------------------------------------------------------------------------ (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------ (Former name, former address, and former fiscal year, if changed since last report) Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES X NO -------- -------- As of November 10, 1995, the registrant had 2,057,576 shares of common stock outstanding. Page 1 OAK HILL SPORTSWEAR CORPORATION INDEX PAGE PART I - Financial Information Unaudited financial statements: Consolidated balance sheets - September 30, 1995 and December 31, 1994 3 Consolidated statements of operations - three months ended September 30, 1995 and 1994 4 Consolidated statements of operations - nine months ended September 30, 1995 and 1994 5 Consolidated statements of cash flows - nine months ended September 30, 1995 and 1994 6 Notes to consolidated financial statements 7-8 Management's discussion and analysis of financial condition and results of operations 9-10 PART II - Other Information Item 4. Submission of Matters to Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 The accompanying financial statements have been prepared without audit and do not include all footnotes and disclosures required under generally accepted accounting principles. Management believes that the results herein reflect all adjustments which are, in the opinion of management, necessary to fairly state the results and current financial condition of the Company for the respective periods. All such adjustments reflected herein are of a normal, recurring nature. It is recommended that this Report be read in conjunction with the Company's Annual Report on Form 10-K for its year ended December 31, 1994 and the Company's Proxy Statement dated June 28, 1995. Page 2 OAK HILL SPORTSWEAR CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands except share amounts) (Unaudited)
September 30, December 31, 1995 1994 Assets Current assets: Cash and cash equivalents $ 5,716 $ 332 Accounts receivable - net 2,536 10,149 Inventories (Note 2) 2,064 11,583 Assets held for sale 214 0 Other current assets 255 755 -------- -------- Total current assets 10,785 22,819 Property, plant and equipment - net 1,269 2,742 Goodwill - net 280 1,442 Other assets 16 361 -------- -------- $ 12,350 $ 27,364 ======== ======== Liabilities and stockholders' equity Current liabilities: Notes payable - banks $ 699 $ 7,199 Current portion of long-term debt 0 154 Accounts payable 713 3,968 Accrued expenses 716 1,241 Accrued income taxes 315 336 -------- -------- Total current liabilities 2,443 12,898 Long-term debt 1,000 1,581 Stockholders' equity: Preferred stock, $1.00 par value, authorized 1,000,000 shares; -0- shares issued Common stock, $.02 par value, authorized 12,000,000 shares; 4,869,828 shares issued 97 97 Capital in excess of par value 27,363 27,363 Retained earnings (accumulated deficit) (1,545) 2,433 Common stock held in treasury, at cost (2,812,252 shares) (17,008) (17,008) -------- -------- Total stockholders' equity 8,907 12,885 -------- -------- $ 12,350 $ 27,364 ======== ========
Page 3 OAK HILL SPORTSWEAR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share amounts) (Unaudited)
Three months ended September 30, 1995 1994 Net sales $ 1,671 $ 2,353 ------- ------- Costs and expenses: Cost of sales 1,377 1,781 Selling, general and administrative expenses 536 437 ------- ------- 1,913 2,218 ------- ------- Operating (loss) income (242) 135 Interest (income) expense - net (25) 41 ------- ------- (Loss) income from continuing operations before provision for taxes (217) 94 Provision for taxes -- 10 ------- ------- (Loss) income from continuing operations (217) 84 ------- ------- Discontinued operations: (Loss) income, net (313) 1,735 Loss on disposal, net (124) -- ------- ------- (437) 1,735 ------- ------- Net (loss) income ($ 654) $ 1,819 ======= ======= Per share data: (Loss) income from continuing operations ($ .11) $ .04 Discontinued operations: (Loss) income, net (.15) .84 Loss on disposal, net (.06) -- ------- ------- (.21) .84 ------- ------- Net (loss) income, primary and fully diluted ($ .32) $ .88 ======= ======= Weighted average number of shares outstanding: Primary and fully diluted 2,058 2,066
Page 4 OAK HILL SPORTSWEAR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share amounts) (Unaudited)
Nine months ended September 30, 1995 1994 Net sales $ 4,249 $ 7,479 ------- ------- Costs and expenses: Cost of sales 3,704 5,885 Selling, general and administrative expenses 1,474 1,375 ------- ------- 5,178 7,260 ------- ------- Operating (loss) income (929) 219 Interest expense - net 58 115 ------- ------- (Loss) income from continuing operations before provision for taxes (987) 104 Provision for taxes -- 30 ------- ------- (Loss) income from continuing operations (987) 74 ------- ------- Discontinued operations: (Loss) income, net (2,371) 678 Loss on disposal, net (620) -- ------- ------- (2,991) 678 ------- ------- Net (loss) income ($3,978) $ 752 ======= ======= Per share data: (Loss) income from continuing operations ($ .48) $ .03 Discontinued operations: (Loss) income, net ($ 1.15) .33 Loss on disposal, net (.30) -- ------- ------- (1.45) .33 ------- ------- Net (loss) income, primary and fully diluted ($ 1.93) $ .36 ======= ======= Weighted average number of shares outstanding: Primary and fully diluted 2,058 2,066
Page 5 OAK HILL SPORTSWEAR CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Nine Months Ended September 30, 1995 1994 Cash flows used in operating activities: Net (loss) income ($ 3,978) $ 752 Adjustments to reconcile net (loss) income to net cash used in operating activities: Loss on disposal of discontinued operations 620 0 Depreciation and amortization 258 395 -------- -------- (3,100) 1,147 Changes in assets and liabilities 746 (16,306) -------- -------- Net cash used in operating activities (2,354) (15,159) -------- -------- Cash flows from investing activities: Capital expenditures 0 (114) Net proceeds on disposal of disc. operations 14,973 0 -------- -------- Net cash prov. by (used in) inv. activities 14,973 (114) -------- -------- Cash flows from financing activities: Net short-term (repayments) borrowings (6,500) 15,515 Principal payment of long-term debt (735) (126) -------- -------- Net cash (used in) provided by fin. activities (7,235) 15,389 -------- -------- Net increase in cash 5,384 116 Cash at beginning of year 332 169 -------- -------- Cash at end of period $ 5,716 $ 285 ======== ======== Supplemental disclosures of cash flow information: Changes in assets and liabilities: Accounts receivable $ 7,613 ($13,346) Inventories (2,234) (3,752) Other current assets 24 (610) Other assets 297 (312) Accounts payable and accrued expenses (4,933) 1,716 Accrued income taxes (21) (2) -------- -------- $ 746 ($16,306) ======== ======== Cash paid - net during the period for: Interest $ 722 $ 1,405 Income taxes 21 32
Page 6 OAK HILL SPORTSWEAR CORPORATION Notes to Consolidated Financial Statements (Unaudited) Note 1 - Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. The subsidiary had not commenced operations as of September 30, 1995. Note 2 - Inventories Inventories are summarized by major classification as follows: September 30, December 31, 1995 1994 Raw materials $1,131,000 $ 1,963,000 Work in process 16,000 650,000 Finished goods 917,000 8,970,000 ---------- ----------- $2,064,000 $11,583,000 ========== =========== Note 3 - Sale of Sportswear Division Pursuant to an Asset Purchase Agreement between Oak Hill Sportswear Corporation, a New York corporation (the "Company"), and Donnkenny Apparel, Inc. ("Donnkenny"), dated as of May 23, 1995, as amended (the Asset Purchase Agreement"), the Company completed, on July 24, 1995, the sale (the "Sale") of the business and certain assets of the Company's Sportswear Division. The Sale occurred as of June 30, 1995, subject to the approval of the Company's shareholders. Such shareholder approval was obtained on July 24, 1995. The assets sold included the inventory, certain fixed assets, security deposits, trade names and trademarks, contracts and goodwill of the Company's Sportswear Division. The purchase price paid by Donnkenny was $14,616,000 in cash and the assumption of certain liabilities. The Company retained accounts receivable, notes payable and certain accounts payable and accrued expenses relating to the Sportswear Division. The balance of notes payable at September 30, 1995 is offset by a receivable from BankAmerica Business Credit, Inc. (included in accounts receivable) representing amounts to be reimbursed by Donnkenny. The purchase price was based on an estimate of the net book value of the transferred tangible assets plus $2,000,000, and it remains subject to post-closing adjustments if the actual net book value is different from the estimated net book value. $1,000,000 of the cash purchase price was placed in a one year escrow to provide security for the Company's indemnification obligations and its warranty of certain inventory under the Asset Purchase Agreement. During October, 1995, this escrow was terminated in connection with a partial settlement of post closing adjustments. The accounts receivable on the Company's balance sheet at September 30, 1995 includes amounts due from Donnkenny and BankAmerica and the accounts payable on the Company's balance sheet at September 30, 1995 includes amounts due to Donnkenny. Page 7 After the Sale, the Company retained its Harmal Division, which manufactures women's accessories. The Company has not yet decided its future direction, which will depend, in part, upon its liquid assets, after payment of the retained liabilities and the expenses incurred in connection with the Sale, the final settlement with Donnkenny under the Asset Purchase Agreement, and the possible sale of its other corporate assets, including the Harmal Division. In the consolidated financial statements, results of the Company's Sportswear Division are included in discontinued operations. The sales for divisions representing discontinued operations for the three and nine month periods ended September 30, 1995 and 1994 were as follows: Three months ended Nine months ended September 30, September 30, 1995 1994 1995 1994 ---- ---- ---- ---- $ 0 $26,298 $29,853 $55,914 Page 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Pursuant to an Asset Purchase Agreement between Oak Hill Sportswear Corporation, a New York corporation (the "Company"), and Donnkenny Apparel, Inc. ("Donnkenny"), dated as of May 23, 1995, as amended (the "Asset Purchase Agreement"), the Company completed, on July 24, 1995, the sale (the "Sale") of the business and certain assets of the Company's Sportswear Division. The Sale occurred as of June 30, 1995, subject to the approval of the Company's shareholders. Such shareholder approval was obtained on July 24, 1995. The assets sold included the inventory, certain fixed assets, security deposits, trade names and trademarks, contracts and goodwill of the Company's Sportswear Division. The purchase price paid by Donnkenny was $14,616,000 in cash and the assumption of certain liabilities. The Company retained accounts receivable, notes payable and certain accounts payable and accrued expenses relating to the Sportswear Division. The balance of notes payable at September 30, 1995 is offset by a receivable from BankAmerica Business Credit, Inc. (included in accounts receivable) representing amounts to be reimbursed by Donnkenny. The purchase price was based on an estimate of the net book value of the transferred tangible assets plus $2,000,000, and it remains subject to post-closing adjustments if the actual net book value is different from the estimated net book value. $1,000,000 of the cash purchase price was placed in a one year escrow to provide security for the Company's indemnification obligations and its warranty of certain inventory under the Asset Purchase Agreement. During October, 1995, this escrow was terminated in connection with a partial settlement of post closing adjustments. The accounts receivable on the Company's balance sheet at September 30, 1995 includes amounts due from Donnkenny and BankAmerica and the accounts payable on the Company's balance sheet at September 30 includes amounts due to Donnkenny. After the Sale, the Company retained its Harmal Division, which manufactures women's accessories. The Company has not yet decided its future direction, which will depend, in part, upon its liquid assets after payment of the retained liabilities and the expenses incurred in connection with the Sale, the final settlement with Donnkenny under the Asset Purchase Agreement, and the possible sale of its other corporate assets, including the Harmal Division. Liquidity and capital resources: Working capital at September 30, 1995 amounted to $8,342,000 compared to $9,921,000 at December 31, 1994, a decrease of $1,579,000 principally due to the net loss for the period. As a result of the Sale, in July, 1995 the Company paid off the entire balance of its notes payable. The balance of notes payable at September 30, 1995 is offset by a receivable from BankAmerica Business Credit, Inc. (included in accounts receivable) for amounts to be reimbursed by Donnkenny. The Company continues to have long-term debt outstanding, which represents a mortgage secured by the Company's fixed assets in Mississippi and a certificate of deposit. At September 30, 1995, the Company had a cash and cash equivalent balance of $5,716,000. The Company believes that such cash and cash equivalent balance will provide the funds necessary for its operations. Page 9 Results of operations (continuing operations only): Sales for the third quarter of 1995 amounted to $1,671,000 compared to $2,353,000 for the third quarter of 1994, a decrease of $682,000. Sales for the nine months ended September 30, 1995 amounted to $4,249,000 compared to $7,479,000 for the comparable period in 1994, a decrease of $3,230,000. In both periods sales decreases in the Company's Harmal Division were primarily due to a weak retail market for belts, the division's primary product. Gross profit for the third quarter of 1995 amounted to $294,000 compared to $572,000 for the third quarter of 1994, a decrease of $278,000. For the nine month period ended September 30, 1995 gross profit was $545,000 compared to $1,594,000 for the comparable period in 1994, a decrease of $1,049,000. In both periods, decreases in gross profit in the Company's Harmal Division were caused by sharply lower sales and lower margins due to the underabsorption of fixed manufacturing and warehousing expenses. Selling, general and administrative expenses for the third quarter of 1995 and nine months ended September 30, 1995 were nearly equal to the comparable periods in 1994 with the exception of a $100,000 reserve for bad debts in the third quarter in connection with the Chapter 11 filing of a customer. Interest income-net for the third quarter ended September 30, 1995 amounted to $25,000 compared to an expense of $41,000 in the third quarter of 1994. Interest expense-net for the nine months ended September 30, 1995 amounted to $58,000 compared to $115,000 in the comparable period of 1994. In both periods, the decrease in interest expense was due to lower average debt balances and interest income from the Company's cash and cash equivalent balance during the third quarter of 1995. The Company had no provisions for tax or tax benefit in the third quarter or nine months ended September 30, 1995 because it incurred a loss in both periods and had net operating loss carryforwards. The Company had no provisions for tax or tax benefit in the third quarter ended September 30, 1994. The Company had a provision for state and local taxes in the nine months ended September 30, 1994 based on profits in the period. No accrual for federal income taxes was made because the Company had net operating loss carryforwards in excess of its net income. The Company's loss from discontinued operations in the third quarter of 1995 was primarily the result of diminished accounts receivable collections relating to chargebacks from customers, and expenses in excess of amounts accrued at June 30, 1995. The Company's loss on sale of assets in the third quarter is attributable to post-closing adjustments of asset valuations relating to actual asset values versus estimated values used at closing. Page 10 PART II. OTHER INFORMATION Item 4. Submission of Matters to Vote of Security Holders ------------------------------------------------- (a) The Annual Meeting of the shareholders of the Company was held on July 24, 1995. (b) At said Annual Meeting, the following persons were elected directors, with the following number of shares voted for and withheld: For Withheld --------- -------- Arthur L. Asch 1,899,640 24,696 Joseph Greenberger 1,899,647 24,689 Steven Kotler 1,899,647 24,689 Wilmer J. Thomas, Jr. 1,897,297 27,039 (c) At said Annual Meeting, a Non-Qualified Stock Option Plan for the Company was approved by a vote of 1,341,036 shares for and 183,688 shares against, with 10,827 abstaining and broker non-votes. (d) At said Annual Meeting, the sale of substantially all of the assets of the Company through the sale of the business and certain assets of the Company's Sportswear Division to Donnkenny Apparel, Inc. and the possible future sale of the Company's Harmal Division was approved by a vote of 1,509,758 shares for and 24,888 shares against, with 905 abstaining and broker non-votes. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (b) Reports on Form 8-K ------------------- The Company filed a report on Form 8-K, dated August 7, 1995, reporting information under Item 2 ("Acquisition or Disposition of Assets") and Item 7 ("Financial Statements, Pro Forma Financial Information and Exhibits"). The Company filed the following financial statements therewith as an exhibit: 99 Pro Forma Unaudited Consolidated Balance Sheet as of March 31, 1995 and Pro Forma Unaudited Consolidated Statements of Operations for the year ended December 31, 1994 and the three months ended March 31, 1995. Page 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OAK HILL SPORTSWEAR CORPORATION (Registrant) Date: November 14, 1995 By: /s/ Arthur L. Asch ------------------------------------- Arthur L. Asch, Chairman of the Board Date: November 14, 1995 By: /s/ Michael A. Asch ------------------------------------- Michael A. Asch, Vice President Page 12 EX-27 2 ARTICLE 5 FDS FOR 1995 FORM 10-Q
5 This schedule contains summary financial information extracted from the September 30, 1995 Form 10-Q and is qualified in its entirety by reference to such financial statements. 1,000 12-MOS DEC-31-1995 SEP-30-1995 5,716 0 2,536 0 2,064 10,785 1,269 0 12,350 2,443 1,000 8,907 0 0 0 12,350 1,671 1,671 1,377 1,377 536 0 (25) (217) 0 (217) (437) 0 0 (654) (.32) (.32)
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