-----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, AbMdNtES5VOVih9HkZYIHu6v7OzZp5WnmRtg1c0+71ueoTPM0swM92rYDRapnAK4 +DeDnIB+57XJRYGDap4r4g== 0000950116-97-002038.txt : 19971114 0000950116-97-002038.hdr.sgml : 19971114 ACCESSION NUMBER: 0000950116-97-002038 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 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: SEC FILE NUMBER: 000-05613 FILM NUMBER: 97713349 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 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, 1997 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 5, 1997, the registrant had 2,457,576 shares of common stock outstanding. Page 1 OAK HILL SPORTSWEAR CORPORATION INDEX PART I - Financial Information PAGE Unaudited financial statements: Consolidated balance sheets - September 30, 1997 and December 31, 1996 3 Consolidated statements of operations - three months ended September 30, 1997 and 1996 4 Consolidated statements of operations - nine months ended September 30, 1997 and 1996 5 Consolidated statements of cash flows - nine months ended September 30, 1997 and 1996 6 Notes to consolidated financial statements 7 Management's discussion and analysis of financial condition and results of operations 8 PART II - Other Information Item 6. Exhibits and Reports on Form 8-K 9 Signatures 10 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 position 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, 1995. Page 2 OAK HILL SPORTSWEAR CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands except share amounts) (Unaudited)
September 30, December 31, 1997 1996 ------------- ------------ Assets Current assets: Cash and cash equivalents $ 4,500 $ 5,314 Accounts receivable - net 8 41 Assets held for sale 834 1,428 Other current assets 106 97 -------- -------- Total current assets 5,448 6,880 -------- -------- $ 5,448 $ 6,880 ======== ======== Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt $ 500 $ 500 Accounts payable 27 71 Accrued expenses 390 1,072 Accrued income taxes 148 501 -------- -------- Total current liabilities 1,065 2,144 -------- -------- 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) (6,069) (5,716) Common stock held in treasury, at cost (2,812,252 shares) (17,008) (17,008) -------- -------- Total stockholders' equity 4,383 4,736 -------- -------- $ 5,448 $ 6,880 ======== ========
Page 3 OAK HILL SPORTSWEAR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share amounts) (Unaudited)
Three months ended September 30, 1997 1996 ------- ------- Revenues $ 72 $ 77 General and administrative expenses 194 124 ------- ------- Loss from continuing operations before provision for taxes (122) (47) Provision for taxes 3 5 ------- ------- Loss from continuing operations (125) (52) ------- ------- Discontinued operations: Loss, net -- (490) Loss on disposal, net -- (300) ------- ------- -- (790) ------- ------- Net loss ($ 125) ($ 842) ======= ======= Per share data: Loss from continuing operations ($ .06) ($ .03) ------- ------- Discontinued operations: Loss, net -- (.24) Loss on disposal, net -- (.14) ------- ------- -- (.38) ------- ------- Net loss, primary and fully diluted ($ .06) ($ .41) ======= ======= Weighted average number of shares outstanding: Primary and fully diluted 2,058 2,058
Page 4 OAK HILL SPORTSWEAR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share amounts) (Unaudited)
Nine months ended September 30, 1997 1996 ------- ------- Revenues $ 199 $ 244 General and administrative expenses 540 397 ------- ------- Loss from continuing operations before provision for taxes (341) (153) Provision for taxes 12 9 ------- ------- Loss from continuing operations: (353) (162) ------- ------- Discontinued operations: Loss, net -- (672) Loss on disposal, net -- (300) ------- ------- -- (972) ------- ------- Net loss ($ 353) ($1,134) ======= ======= Per share data: Loss from continuing operations ($ .17) ($ .08) ------- ------- Discontinued operations: Loss, net -- (.33) Loss on disposal, net -- (.14) ------- ------- -- (.47) ------- ------- Net loss, primary and fully diluted ($ .17) ($ .55) ======= ======= Weighted average number of shares outstanding: Primary and fully diluted 2,058 2,058 ======= =======
Page 5 OAK HILL SPORTSWEAR CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Nine Months Ended September 30, 1997 1996 ------- ------- Cash flows used in operating activities: Net loss ($ 353) ($1,134) Adjustments to reconcile net loss to net cash used in operating activities: Loss on disposal of discontinued operations 0 0 Depreciation and amortization 0 0 ------- ------- (353) (1,134) Changes in assets and liabilities (1,055) 197 ------- ------- Net cash used in operating activities (1,408) (937) ------- ------- Cash flows from investing activities: Net proceeds on disposal of disc. operations 594 0 Decrease in assets held for sale 0 333 ------- ------- Net cash provided by investing activities 594 333 ------- ------- Cash flows from financing activities: Net short-term repayments 0 0 Principal payment of long-term debt 0 0 ------- ------- Net cash provided by financing activities 0 0 ------- ------- Net decrease in cash (814) (604) Cash at beginning of year 5,314 5,823 ------- ------- Cash at end of period $ 4,500 $ 5,219 ======= ======= Supplemental disclosures of cash flow information: Changes in assets and liabilities: Accounts receivable $ 33 $ 451 Inventories 0 0 Other current assets (9) 40 Other assets 0 0 Accounts payable and accrued expenses (726) (274) Accrued income taxes (353) (20) ------- ------- ($1,055) $ 197 ======= ======= Cash paid - net during the period for: Interest $ 19 $ 8 Income taxes (including interest thereon) 564 5
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 which was inactive. Note 2 - Discontinued Operations The sales for divisions representing discontinued operations for the three months ended September 30, 1997 and 1996 were $0 and $968,000, respectively. For the nine months ended September 30, 1997 and 1996, such sales were $82,000 and $3,086,000, respectively. Note 3 - Earnings Per Share In February 1997 the Financial Accounting Standards Board issued FAS 128 concerning earnings per share, which the Company plans to adopt for the full fiscal year 1997. This Statement requires restatement of all prior period earnings per share data; however, the Company does not believe any previously reported earnings (loss) per share data will require material restatement as a result of the adoption of FAS 128. Note 4 - Purchase of Watkins Contracting, Inc. On October 21, 1997, the Company completed the acquisition of 100% of the outstanding shares of Watkins Contracting, Inc. (WCI), a privately-owned, San Diego-based environmental remediation contractor. WCI will operate as a subsidiary of Oak Hill Sportswear Corporation. The total consideration consisted of (a) $3,600,000 in cash, using cash on hand, (b) 400,000 shares of restricted Oak Hill Sportswear Corporation common stock, and (c) rights entitling the former owners of WCI to sell up to 50,000 shares per quarter of the common stock back to the Company starting in April, 1999, at $5.00 per share if WCI earns in excess of $2,700,000 pretax income during 1998, and to sell up to an additional 50,000 shares per quarter back to the Company starting in April, 2000, at $5.00 per share if WCI earns in excess of $2,700,000 pretax income during 1999. Founded in 1991, WCI provides asbestos abatement, hazardous materials and soil remediation, and demolition services, primarily in California, to commercial and governmental clients. For its fiscal year ended June 30, 1997, WCI earned more than $1.4 million net income on a pro forma basis, after adjustments for (i) the excess of the former owners' compensation above the salaries to be paid under their new employment agreements, and (ii) a 40.5% income tax rate. Page 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and capital resources: Working capital at September 30, 1997 amounted to $4,383,000 compared to $4,736,000 at December 31, 1996, a decrease of $353,000 due to the net loss for the period. During the third quarter, the Company's management actively pursued the redeployment of the Company's liquid assets. As of September 30, 1997, no commitments had been made and no material expenditures had been incurred in connection with any such redeployment. On October 21, 1997, the Company completed the acquisition of 100% of the outstanding shares of Watkins Contracting, Inc. (WCI), a privately-owned, San Diego-based environmental remediation contractor. WCI will operate as a subsidiary of Oak Hill Sportswear Corporation. The total consideration consisted of (a) $3,600,000 in cash, using cash on hand, (b) 400,000 shares of restricted Oak Hill Sportswear Corporation common stock, and (c) rights entitling the former owners of WCI to sell up to 50,000 shares per quarter of the common stock back to the Company starting in April, 1999, at $5.00 per share if WCI earns in excess of $2,700,000 pretax income during 1998, and to sell up to an additional 50,000 shares per quarter back to the Company starting in April, 2000, at $5.00 per share if WCI earns in excess of $2,700,000 pretax income during 1999. Founded in 1991, WCI provides asbestos abatement, hazardous materials and soil remediation, and demolition services, primarily in California, to commercial and governmental clients. For its fiscal year ended June 30, 1997, WCI earned more than $1.4 million net income on a pro forma basis, after adjustments for (i) the excess of the former owners' compensation above the salaries to be paid under their new employment agreements, and (ii) a 40.5% income tax rate. Management believes that the Company's cash and cash equivalents at September 30, 1997 will be adequate to pay its payables and accrued expenses, to cover its general and administrative expenses, to cover the potential continuing losses, if any were not previously provided for, from discontinued operations, and to fund the purchase of Watkins Contracting, Inc. and its operations. Results of operations: Revenues were lower in the third quarter and first nine months of 1997 compared to comparable periods of 1996 as a result of lower consulting revenues pursuant to the Company's agreement with a purchaser of its Sportswear Division and lower interest income as a result of the Company's lower average cash balance during the third quarter and first nine months of 1997 versus the comparable periods of 1996. General and administrative expenses rose in the third quarter and first nine months of 1997 compared to the third quarter and first nine months of 1996 principally as a result of increased corporate expenses which were no longer allocated to its discontinued operations. Page 8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 2.1 - Stock Purchase Agreement, dated October 21, 1997, between Oak Hill Sportswear Corporation, a Buyer, and Greg S. Watkins and Daren J. Barone, as Sellers. (Filed as Exhibit 2.1 to the Company's Form 8-K, dated October 30, 1997, and incorporated herein.) Exhibit 2.2 - Rights Agreement, dated October 21, 1997, between Oak Hill Sportswear Corporation and Greg S. Watkins. (Filed as Exhibit 2.2 to the Company's Form 8-K, dated October 30, 1997, and incorporated herein.) Exhibit 2.3 - Rights Agreement, dated October 21, 1997, between Oak Hill Sportswear Corporation and Daren J. Barone (Filed as Exhibit 2.3 to the Company's Form 8-K, dated October 30, 1997, and incorporated herein.) Exhibit 2.4 - Employment Agreement, dated October 21, 1997, between Watkins Contracting, Inc. (a wholly-owned subsidiary of the Registrant since October 21, 1997) and Greg S. Watkins. (Filed as Exhibit 2.4 to the Company's Form 8-K, dated October 30, 1997, and incorporated herein.) Exhibit 2.5 - Employment Agreement, dated October 21, 1997, between Watkins Contracting, Inc. and Daren J. Barone (Filed as Exhibit 2.5 to the Company's Form 8-K, dated October 30, 1997, and incorporated herein.) (b) Reports on Form 8-K No report on Form 8-K was filed during the quarter ended September 30, 1997. The Company filed a report on Form 8-K dated October 30, 1997, 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: Exhibit 99.1 - Balance sheets and statements of income, changes in stockholders' equity, and cash flow of Watkins Contracting, Inc. as of and for its fiscal years ended June 30, 1996 and June 30, 1997, with a report of audit thereon of Schilling and Hinzman. Page 9 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 12, 1997 By: /s/ Arthur L. Asch ------------------------------------------- Arthur L. Asch, Chairman of the Board Date: November 12, 1997 By: /s/ Michael A. Asch ------------------------------------------- Michael A. Asch, President and Treasurer Page 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1996 SEP-30-1997 4,500 0 8 0 0 5,448 0 0 5,448 1,065 0 0 0 4,383 0 5,448 0 199 0 540 0 0 0 (341) 12 (353) 0 0 0 (353) (.17) (.17)
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