-----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, SHkK0t6H1h+IgaA1K3xXsayIa9R2JcBP4odrj+j1QEhHukXN2/aMV5MBjYzBTedm tkxm1Krl7a+R3InMpHrITQ== 0000029332-96-000004.txt : 19960513 0000029332-96-000004.hdr.sgml : 19960513 ACCESSION NUMBER: 0000029332-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960510 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIXIE YARNS INC CENTRAL INDEX KEY: 0000029332 STANDARD INDUSTRIAL CLASSIFICATION: TEXTILE MILL PRODUCTS [2200] IRS NUMBER: 620183370 STATE OF INCORPORATION: TN FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-02585 FILM NUMBER: 96559399 BUSINESS ADDRESS: STREET 1: 1100 S WATKINS ST CITY: CHATTANOOGA STATE: TN ZIP: 37404 BUSINESS PHONE: 6156982501 MAIL ADDRESS: STREET 1: P O BOX 751 CITY: CHATTANOOGA STATE: TN ZIP: 37401 FORMER COMPANY: FORMER CONFORMED NAME: DIXIE MERCERIZING CO DATE OF NAME CHANGE: 19670524 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 30, 1996 Commission File Number 0-2585 DIXIE YARNS, INC. (Exact name of registrant as specified in its charter) Tennessee 62-0183370 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Indentification No.) 1100 South Watkins Street Chattanooga, Tennessee 37404 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (423) 698-2501 Indicate by check mark 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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding as of April 30, 1996 Common Stock, $3 Par Value 10,464,796 shares Class B Common Stock, $3 Par Value 735,228 shares Class C Common Stock, $3 Par Value 0 shares DIXIE YARNS, INC 2 INDEX Part I. Financial Information: Page No. Consolidated Condensed Balance Sheets -- March 30, 1996 and December 30, 1995 3 Consolidated Statements of Income (Loss) -- Three Months Ended March 30, 1996 and April 1, 1995 5 Consolidated Condensed Statements of Cash Flows -- Three Months Ended March 30, 1996 and April 1, 1995 6 Notes to Consolidated Condensed Financial Statements 8 Management's Discussion and Analysis of Results of Operations and Financial Condition 9 Part II. Other Information: Item 6 - Exhibits and Reports on Form 8-K 11 PART I - ITEM 1 3 FINANCIAL INFORMATION DIXIE YARNS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) March 30, December 30, 1996 1995 ____________ ____________ (dollar amounts in thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,788 $ 3,413 Accounts receivable (less allowance for doubtful accounts of $3,291 in 1996 and $3,156 in 1995) 30,383 17,369 Inventories 101,292 103,253 Assets held for sale 21,669 22,090 Other 7,152 10,518 ____________ ____________ TOTAL CURRENT ASSETS 164,284 156,643 PROPERTY, PLANT AND EQUIPMENT 388,466 383,741 Less accumulated amortization and depreciation 197,240 190,238 ____________ ____________ NET PROPERTY, PLANT AND EQUIPMENT 191,226 193,503 INTANGIBLE ASSETS (less accumulated amortization of $6,239 in 1996 and $5,973 in 1995) 35,509 35,775 OTHER ASSETS 11,131 11,076 ____________ ____________ TOTAL ASSETS $ 402,150 $ 396,997 ____________ ____________ ____________ ____________ See Notes to Consolidated Condensed Financial Statements. DIXIE YARNS, INC. 4 CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) March 30, December 30, 1996 1995 ____________ ____________ (dollar amounts in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 27,342 $ 20,394 Accrued expenses 25,041 23,294 Current portion of long-term debt 2,168 2,171 ____________ ____________ TOTAL CURRENT LIABILITIES 54,551 45,859 LONG-TERM DEBT Senior indebtedness 95,062 97,383 Subordinated notes 50,000 50,000 Convertible subordinated debentures 44,782 44,782 ____________ ____________ TOTAL LONG-TERM DEBT 189,844 192,165 OTHER LIABILITIES 11,351 11,486 DEFERRED INCOME TAXES 29,083 29,197 STOCKHOLDERS' EQUITY Common Stock - issued and outstanding, 13,869,422 shares in 1996 and 13,862,799 shares in 1995 41,608 41,588 Class B Common Stock - issued and outstanding, 735,228 shares in 1996 and 1995 2,206 2,206 Additional paid-in capital 131,620 131,618 Retained earnings 1,456 2,447 Minimum pension liability adjustment (4,116) (4,116) ____________ ____________ 172,774 173,743 Less Common Stock in treasury at cost - 3,404,126 shares in 1996 and 3,404,123 shares in 1995 55,453 55,453 ____________ ____________ TOTAL STOCKHOLDERS' EQUITY 117,321 118,290 ____________ ____________ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 402,150 $ 396,997 ____________ ____________ ____________ ____________ See Notes to Consolidated Condensed Financial Statements. DIXIE YARNS, INC. 5 CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED) Three Months Ended _________________________________ March 30, April 1, 1996 1995 ______________ ______________ (dollar amounts in thousands, except per share data) Net sales $ 161,520 $ 181,646 Cost of sales 137,260 153,094 ____________ ____________ GROSS PROFIT 24,260 28,552 Selling and administrative expenses 20,806 21,802 Other (income) expense - net 693 953 ____________ ____________ INCOME BEFORE INTEREST AND TAXES 2,761 5,797 Interest expense 3,977 3,926 ____________ ____________ INCOME (LOSS) BEFORE INCOME TAXES (1,216) 1,871 Income tax provision (benefit) (225) 988 ____________ ____________ NET INCOME (LOSS) $ (991) $ 883 ____________ ____________ ____________ ____________ Per common and common equivalent share: Net income (loss) $ (0.09) $ 0.06 See Notes to Consolidated Condensed Financial Statements. DIXIE YARNS, INC. 6 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended ___________________________ March 30, April 1, 1996 1995 ____________ ____________ (dollar amounts in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (991) $ 883 Depreciation and amortization 7,345 9,480 Provision (benefit) for deferred income taxes (87) 313 ____________ ____________ 6,267 10,676 Changes in operating assets and liabilities 757 (6,337) ____________ ____________ NET CASH PROVIDED BY OPERATING ACTIVITIES 7,024 4,339 CASH FLOWS FROM INVESTING ACTIVITIES Net proceeds from sale of property, plant and equipment 484 318 Purchase of property, plant and equipment (4,832) (12,642) ____________ ____________ NET CASH USED IN INVESTING ACTIVITIES (4,348) (12,324) See Notes to Consolidated Condensed Financial Statements. DIXIE YARNS, INC. 7 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - CONTINUED (UNAUDITED) Three Months Ended ___________________________ March 30, April 1, 1996 1995 ____________ ____________ (dollar amounts in thousands) CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in credit line borrowings (1,664) 8,299 Payments on term-loan (625) -0- Capital stock acquired -0- (21) Other (12) (109) ____________ ____________ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (2,301) 8,169 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 375 184 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,413 1,904 ____________ ____________ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,788 $ 2,088 ____________ ____________ ____________ ____________ SUPPLEMENTAL CASH FLOW INFORMATION Interest paid $ 4,563 $ 4,177 ____________ ____________ ____________ ____________ Tax refunds received, net of income taxes paid $ (3,313) $ (2,315) ____________ ____________ ____________ ____________ See Notes to Consolidated Condensed Financial Statements. DIXIE YARNS, INC. 8 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements which do not include all of the information and footnotes required in annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 30, 1996 are not necessarily indicative of the results that may be expected for the entire year. NOTE B - INVENTORIES Inventories are summarized as follows: March 30, December 30, 1996 1995 ____________ ____________ (dollar amounts in thousands) At current cost Raw materials $ 21,997 $ 21,012 Work-in-process 23,898 24,441 Finished goods 69,782 73,314 Supplies, repair parts and other 6,513 6,772 ____________ ____________ 122,190 125,539 Excess of current cost over LIFO value (20,898) (22,286) ____________ ____________ $ 101,292 $ 103,253 ____________ ____________ ____________ ____________ NOTE C - DEBT AND CREDIT ARRANGEMENTS At March 30, 1996, unused borrowing capacity under the Company's credit agreements was approximately $39.2 million. PART I - ITEM 2 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following is presented to update the discussion of results of operations and financial condition included in the Company's 1995 Annual Report. RESULTS OF OPERATIONS In February, 1996, the Company reached an agreement in principle to sell the operating assets of its Threads USA division ("Threads") to American & Efird, Inc. The parties have received official notification of the early termination of the waiting period for the proposed transaction under the Hart-Scott-Rodino Antitrust Improvements Act. Negotiations with American & Efird, Inc. for a definitive agreement are continuing and the transaction is anticipated to be completed in the second quarter. The Company's financial statements include the results of operations of Threads for the quarter ended March 30, 1996. The following table sets forth selected operating data (in millions of dollars) related to the two business segments of the Company: Textile Products and Floorcovering. Quarter Ended March 30, April 1, 1996 1995 Sales - Textile products $ 74.6 $ 88.4 - Floorcovering 88.2 94.2 - Intersegment elimination (1.3) (1.0) Total sales $161.5 $181.6 Operating profit/(loss) - Textile products $ (0.4) $ 0.8 - Floorcovering 4.4 6.5 Total operating profit/(loss) $ 4.0 $ 7.3 Sales in the textile products segment for the quarter ended March 30, 1996 declined 16% from the first quarter of 1995 reflecting weak retail demand from customers of certain products of the Company's yarn and knit fabric operations and the sale and consolidation of two textile facilities in mid- 1995. The quarter ended March 30, 1996 reflected an operating loss of $.4 million in the textile products segment compared to an operating profit of $.8 million for the corresponding period in 1995. The decline in operating profit was primarily due to the decrease in unit volume which more than offset lower manufacturing and administrative costs. Operating results in the March, 1996 quarter improved approximately $4.4 million (excluding unusual losses) compared to the quarter ended December 30, 1995. The improvement resulted primarily from manufacturing efficiencies and overhead cost reductions. 10 Operating profits in the Company's floorcovering segment for the quarter ended March 30, 1996 were $4.4 million on sales of $88.2 million compared with an operating profit of $6.5 million on sales of $94.2 million for the quarter ended April 1, 1995. The decrease in sales and operating profits in the floorcovering segment is due primarily to operations associated with the carpet yarn business in the March, 1996 quarter. Increased demand is currently being experienced in most markets served by the floorcovering operations. As a result of operating improvements and an improvement in demand currently being experienced, the Company anticipates a return to profitability in the second quarter and expects 1996, as a whole, to be profitable. The Company's selling and administrative costs decreased $1.0 million in the first quarter of 1996 compared to the first quarter of 1995 primarily from staffing and other cost reduction measures in the textile products segment. LIQUIDITY AND CAPITAL RESOURCES During the quarter ended March 30, 1996, $7.0 million of funds were generated from operating activities while $4.8 million of funds were used for purchases of property, plant and equipment and $2.3 million was used to reduce debt. At March 30, 1996, the available combined unused borrowing capacity under the Company's revolving credit agreements was approximately $39.2 million. The Company's future liquidity requirements are expected to consist primarily of capital expenditures and seasonal working capital requirements. These requirements are expected to be financed from operating cash flow and existing debt arrangements. In addition, the Company anticipates proceeds of approximately $50.0 million to result from the planned sale of the Threads business. PART II. OTHER INFORMATION 11 Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits (i) Exhibits Incorporated by Reference None. (ii) Exhibits Filed with this Report (11) Statement re: Computation of Earnings Per Share. (b) Reports on Form 8-K No reports on Form 8-K have been filed by the registrant during the three month period ended March 30, 1996. 12 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. DIXIE YARNS, INC. __________________________ (Registrant) May 9, 1996 ____________________ (Date) /s/GLENN M. GRANDIN __________________________ Glenn M. Grandin Senior Vice President and Chief Financial Officer QUARTERLY REPORT ON FORM 10-Q 13 ITEM 6(a) EXHIBITS QUARTER ENDED MARCH 30, 1996 DIXIE YARNS, INC. CHATTANOOGA, TENNESSEE Exhibit Index EXHIBIT NO. EXHIBIT DESCRIPTION INCORPORATION BY REFERENCE (11) Statement re: Computation Filed herewith. of Earnings Per Share. EX-11 2 EXHIBIT (11) EXHIBIT 11 DIXIE YARNS, INC. STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE (amounts in thousands, except per share data) Three Months Ended __________________________ March 30, April 1, 1996 1995 ___________ ___________ PRIMARY: NET INCOME (LOSS) $ (991) $ 883 ___________ ___________ ___________ ___________ Weighted average number of Common Shares outstanding assuming conversion of Class B Common Stock 11,196 12,244 Net effect of dilutive stock options based on the treasury stock method using average market price -0- 20 Net effect of put options based on the reverse treasury stock method using average market price -0- 1,753 ___________ ___________ TOTAL SHARES 11,196 14,017 ___________ ___________ ___________ ___________ PER SHARE AMOUNT $ (.09) $ .06 ___________ ___________ ___________ ___________ FULLY DILUTED: Net income (loss) $ (991) $ 883 After-tax interest requirement of convertible subordinated debentures (A) -0- -0- ___________ ___________ ADJUSTED NET INCOME (LOSS) $ (991) $ 883 ___________ ___________ ___________ ___________ EXHIBIT 11 DIXIE YARNS, INC. STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE - CONTINUED Three Months Ended __________________________ March 30, April 1, 1996 1995 ___________ ___________ FULLY DILUTED - CONTINUED: Weighted average number of Common Shares outstanding assuming conversion of Class B Common Stock 11,196 12,244 Net effect of dilutive stock options based on the treasury stock method using quarter end market price if higher than the average market price -0- 20 Net effect of put options based on the reverse treasury stock method using quarter end market price if lower than the average market price -0- 2,275 Net effect of conversion of convertible subordinated debentures (A) -0- -0- ___________ ___________ TOTAL SHARES 11,196 14,539 ___________ ___________ ___________ ___________ PER SHARE AMOUNT $ (.09) $ .06 ___________ ___________ ___________ ___________ (A) Conversion of convertible subordinated debentures to 1,391 shares with an after-tax interest requirement of $473 for the three months ended March 30, 1996 and April 1, 1995 has been excluded from computation since the effect was anti-dilutive. EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF DIXIE YARNS, INC. AT AND FOR THE THREE MONTHS ENDED MARCH 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-28-1996 MAR-30-1996 3,788 0 33,674 3,291 101,292 164,284 388,466 197,240 402,150 54,551 189,844 43,814 0 0 73,507 402,150 161,520 161,520 137,260 137,260 0 0 3,977 (1,216) (225) (991) 0 0 0 (991) (0.09) (0.09)
-----END PRIVACY-ENHANCED MESSAGE-----