-----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, E6nr2alHHxbViTfDBxLnFLyTekCn9TCo9+BZx5A/rKdI4zXTKYzmyuwQ1JP/yMus Pfv6DFBZown3Rv2F711FUg== 0000003292-99-000002.txt : 19990115 0000003292-99-000002.hdr.sgml : 19990115 ACCESSION NUMBER: 0000003292-99-000002 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980927 FILED AS OF DATE: 19990114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALBA WALDENSIAN INC CENTRAL INDEX KEY: 0000003292 STANDARD INDUSTRIAL CLASSIFICATION: KNITTING MILLS [2250] IRS NUMBER: 560359780 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-06150 FILM NUMBER: 99506182 BUSINESS ADDRESS: STREET 1: 201 ST GERMAIN AVE SW STREET 2: P O BOX 100 CITY: VALDESE STATE: NC ZIP: 28601 BUSINESS PHONE: 7048796503 MAIL ADDRESS: STREET 1: P O BOX 100 CITY: VALDESE STATE: NC ZIP: 28601 10-Q/A 1 FORM 10-Q AMENDMENT NO 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20459 FORM 10-Q/A AMENDMENT NO. 1 (Mark one) [X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended September 27, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-6150 ALBA-WALDENSIAN, INC. (Exact name of registrant as specified in its Charter) Delaware 56-0359780 (State or other jurisdiction (I.R.S.Employer Identification No.) of incorporation or organization) P.O. Box 100, Valdese, N.C. 28690 (Address of principal executive offices)(Zip code) (828) 879-6500 Registrant's telephone number, including area code NONE Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether 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 October 26, 1998, the number of common shares outstanding was 1,559,053. PART I. FINANCIAL INFORMATION Item 1. Financial Statements
ALBA-WALDENSIAN, INC. Consolidated Balance Sheets ($000's) September 27, December 31, 1998 1997 (Unaudited) ASSETS CURRENT ASSETS: Cash $6 $2,416 Accounts receivable, net of allowance for doubtful accounts of $384 and $260, respectively 10,723 7,823 Inventories: Materials and supplies 2,959 2,554 Work-in-process 5,997 5,045 Finished goods 2,375 3,710 ----- ----- Total Inventories 11,331 11,309 ------ ------ Deferred income taxes 707 707 Prepaid expenses and other 379 127 --- --- Total Current Assets 23,146 22,382 ------ ------ PROPERTY AND EQUIPMENT 34,185 31,111 Less: accumulated depreciation (19,194) (17,857) ------- ------ Net Property and Equipment 14,991 13,254 ------ ------ OTHER ASSETS: Notes receivable 16 17 Trademarks and patents 443 492 Excess of cost over net assets acquired 7,033 7,474 ----- ----- 7,492 7,983 ----- ----- TOTAL ASSETS $45,629 $43,619 ====== ====== See notes to consolidated financial statements.
ALBA-WALDENSIAN, INC. Consolidated Balance Sheets ($000's except share amounts)
September 27, December 31, 1998 1997 ---- ---- (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 665 $ 2,350 Accounts payable 3,522 3,118 Accrued expenses 2,472 1,542 ----- ----- Total Current Liabilities 6,659 7,010 LONG-TERM DEBT (Note 2) 9,318 7,452 CAPITAL LEASE OBLIGATION 489 - OTHER DEFERRED LIABILITIES 1 - DEFERRED INCOME TAX LIABILITY 1,746 1,746 ----- ----- Total Liabilities 18,213 16,208 ------ ------ STOCKHOLDERS' EQUITY: Common stock - authorized 3,000,000 shares, $2.50 par value; issued: 1,886,580 shares in 1998 and 1997; outstanding: 1,560,563 and 1,867,403 in 1998 and 1997, respectively 4,716 4,716 Additional paid-in capital 9,182 9,182 Retained earnings 16,150 13,650 ------ ------ 30,048 27,548 Less treasury stock - at cost (326,077 and 19,177 shares in 1998 and 1997, respectively) (2,632) (137) ----- ---- Total Stockholders' Equity 27,416 27,411 ------ ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $45,629 $43,619 ====== ====== See notes to consolidated financial statements.
ALBA-WALDENSIAN, INC. Consolidated Statements of Operations (Unaudited) ($000's except share amounts) Three Months Ended Nine Month Period Ended Sept. 27, Sept. 28, Sept. 27, Sept. 28, 1998 1997 1998 1997 ---- ---- ---- ---- Net sales $18,904 $15,390 $54,914 $45,203 Cost of sales 13,239 12,205 40,261 35,514 ------ ------ ------ ------ Gross margin 5,665 3,185 14,653 9,689 Selling, general and administrative expense 3,368 2,686 9,633 9,227 ----- ----- ----- ----- Operating income 2,297 499 5,020 462 Interest expense (227) (270) (662) (779) Interest income 0 18 50 45 Other income (expense) (83) 14 (174) (179) -- ------ ----- ----- Total other expense (310) (238) (786) (913) - Income (loss) before income taxes 1,987 261 4,234 (451) Provision for (benefit from) income taxes 755 99 1,609 (172) ----- -- ----- ----- Net income (loss) $ 1,232 $162 $2,625 $(279) ========= === ====== ====== Net income (loss) per common share - Basic $ .78 $.09 $1.53 $(.15) === === ===== ====== Diluted $ .74 $.09 $1.48 $(.15) === ==== ===== ====== See notes to consolidated financial statements.
ALBA-WALDENSIAN, INC. Consolidated Statements of Stockholders' Equity (Unaudited) ($000's except share amounts) Additional Common Paid-In Retained Treasury Stock Shares Amount Capital Earnings Shares Amount Total ------ ------ ------- -------- ------ ------ ----- Balance at January 1, 1997 1,886,580 $4,716 $9,182 $14,027 (19,177) $(137) $27,788 Net Loss (279) (279) --- --- Balance at Sept. 28, 1997 1,886,580 $4,716 $9,182 $13,748 (19,177) $(137) $27,509 ========= ===== ===== ====== ====== === ====== Balance at January 1, 1998 1,886,580 $4,716 $9,182 $13,651 (19,177) $(137) $27,412 Purchase of Treasury Stock (310,500) (2,521) (2,521) Exercise of Stock Options (8) 3,600 26 18 Dividends Paid (118) (118) Net Income 2,625 2,625 ----- ----- Balance at Sept. 27, 1998 1,886,580 $4,716 $9,182 $16,150 (326,077) $(2,632) $27,416 ========= ===== ===== ====== ======= ===== ====== See notes to consolidated financial statements.
ALBA-WALDENSIAN, INC. Consolidated Statements of Cash Flows (Unaudited) ($000's) Nine Month Periods Ended Sept. 27, Sept. 28, 1998 1997 ---- ---- OPERATING ACTIVITIES: Net income (loss) $ 2,625 $ (279) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,847 1,735 Provision for bad debts 135 92 Loss on disposal of property 2 138 Provision for inventory obsolescence 1,161 625 Changes in operating assets and liabilities providing (using) cash: Accounts receivable (3,035) (829) Refundable income taxes -- (23) Inventories (1,182) 149 Prepaid expenses and other (252) 24 Accounts payable (93) 533 Accrued expenses and other liabilities 930 1,065 Income taxes payable 496 (169) Deferred compensation 1 (200) - --- Net cash provided by operating activities 2,635 2,861 ----- ----- INVESTING ACTIVITIES: Capital expenditures (2,383) (1,614) Proceeds from sale of property - 212 Proceeds from notes receivable 1 7 - - Net cash used in investing activities (2,382) (1,395) ----- ----- FINANCING ACTIVITIES: Net borrowings under line of credit agreement 6,245 -- Principal payments on notes and Capital Leases (9,951) (1,175) Payment of Dividends (118) -- Cash Proceeds from Exercise of Stock Options 18 -- Proceeds from Issuance of Long Term Debt 3,664 -- Repurchase of Capital Stock (2,521) -- ------- -- Net cash used in financing activities (2,663) (1,175) --------------------------------- NET INCREASE (DECREASE) IN CASH (2,410) 291 CASH AT BEGINNING OF PERIOD 2,416 294 ----- --- CASH AT END OF PERIOD $ 6 $ 585 = ===
ALBA-WALDENSIAN, INC. Consolidated Statements of Cash Flows (Unaudited) ($000's) Nine Month Periods Ended Sept 27, Sept. 28, 1998 1997 ---- ---- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 563 $ 993 Income taxes $ 1,128 $ 20 During the second quarter of 1998, the Company acquired production equipment totaling $533,000 through the issuance of financing leases. See notes to consolidated financial statements.
ALBA-WALDENSIAN, INC. Notes to Consolidated Financial Statement (Unaudited) 1. UNAUDITED FINANCIAL INFORMATION In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position as of September 27, 1998, and the results of operations for the three-month and nine-month periods ended September 27, 1998, and September 28, 1997. These unaudited financial statements should be read in conjunction with the Company's most recent audited financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. 2. FINANCING On December 31, 1997 the Company had both a $3,000,000 seasonal line of credit and long-term debt agreements with a major bank. The interest rate was LIBOR plus 2.75%. The seasonal line of credit was scheduled to mature on June 30, 1998, and the long-term debt portion matured on January 5, 1999. There were no amounts outstanding under the seasonal line of credit at December 31, 1997. Quarterly principal payments of $587,500 were required under the long-term debt agreement. On May 14, 1998, the Company entered into three-year $21,000,000 financing facility with a major bank and retired both the seasonal line of credit and long-term debt discussed above. The new facility is composed of up to a $15,000,000 revolving loan, based upon levels of accounts receivable and inventories, a $3,000,000 term loan and a $3,000,000 credit line to fund future capital expenditures. The new facility bears interest at Prime plus 0.5% (or at the option of the Company, portions of the facility may be priced at LIBOR plus 2.5%) and is secured by substantially all of the assets of the Company. The loan agreement requires that the Company maintain certain levels of tangible net worth and fixed charge coverage ratios as well as limiting the level of capital expenditures ($5.8 million in 1998) and prohibiting other financing (in excess of $1.5 million per year). At September 27, 1998 the Company was in compliance with the convenants contained in the loan agreement. On August 7, 1998, the Company secured a $1,500,000 financing lease facility with a major financial institution covering the acquisition of qualified machinery during the remainder of 1998. This facility is secured by only the acquired machinery, bears interest at 7.27% and provides for level monthly payments over its five-year term. 3. NON-RECURRING CHARGES During the first quarter of 1997, severance costs of approximately $401,000 were recorded in connection with the Company's former President and CEO. 4. ACQUISITION OF COMMON STOCK On May 15, 1998, investors, including the Company and Mr. Clyde Wm. Engle, the Company's Chairman and beneficial holder (through Sunstates Corporation) of a majority of the Company's common stock, purchased from a major bank 938,700 shares of the Company's common stock formerly held by Sunstates Corporation, pursuant to a private sale of collateral held under a defaulted loan which Sunstates Corporation's affiliates had with the bank. The Company purchased 295,000 of the shares at a cost of $2,212,500 plus other transaction costs totaling approximately $115,000. The Company utilized its existing cash plus funds obtained from the new $21,000,000 financing facility discussed above to purchase the stock. The Company intends to hold the 295,000 shares as treasury stock and currently has no plans for future utilization of those shares. As a result of these transactions, the Company is no longer a subsidiary of Sunstates Corporation. Mr. Engle now controls approximately 35% of the Company's outstanding common stock. On August 12, 1998, the Company's Board of Directors authorized the Corporation to acquire up to 40,000 shares of the outstanding Common Stock of the Corporation for an aggregate purchase price not to exceed $550,000. As of September 27, 1998, the Company had purchased a total of 15,500 shares at an aggregate cost of approximately $193,000. 5. DIVIDENDS On August 4, 1998 the Company declared a semi-annual cash dividend of $.075 per share ($117,930) on its common stock payable on August 24, 1998 to shareholders of record on August 14, 1998. Under the Company's loan agreement with a bank (see Note 2), dividends and repurchases of Company stock may not exceed $3,000,000 during the three-year term of the loan. 6. EARNINGS PER SHARE
For the Quarter Ended September 27, 1998 Income Shares Per-Share (Numerator) (Denominator) Amount Basic EPS Net Income $1,231,636 1,569,778 $.78 Effect of Dilutive Securities Stock Options -- 92,981 Diluted EPS Net Income $1,231,636 1,662,759 $.74
For the Nine Months Ended September 27, 1998 Income Shares Per-Share (Numerator) (Denominator) Amount Basic EPS Net Income $2,625,112 1,719,018 $1.53 Effect of Dilutive Securities Stock Options -- 53,577 Diluted EPS Net Income $2,625,112 1,772,595 $1.48 There were no dilutive securities outstanding during 1997.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources The Company's working capital has improved since December 31, 1997, and continues to be adequate to support the Company's operations. On September 27, 1998, the Company had working capital of $16,487,000 with a ratio of 3.48 to1. This is comparable to $15,372,000 or 3.19 to 1 at December 31, 1997. The increase in the amount of working capital primarily reflects increased receivables associated with the increased business volume in 1998. Accounts receivable have increased to $10,723,000 at September 27, 1998 as compared to $7,823,000 at December 31, 1997, while the number of days sales in receivables has decreased from 49.75 to 45.92 during the same period. Inventory levels have not significantly increased in the face of the increased business due to the Company's efforts to reduce excess inventories (inventory turns have increased from 3.55 at December 31, 1997 to 4.04 at September 27, 1998). Furthermore, the Company's annual debt amortization requirements are significantly reduced (current maturities of $665,000 at September 1998 versus $2,350,000 at December 1997) as a result of the refinancing of its bank debt. Liquidity needs are primarily affected by and related to capital expenditures and changes in the Company's business volume. Capital expenditures through the first nine months of 1998 have totaled $2,916,000, reflecting the acquisition of new seamless knitting machines in response to the increased demand for the Company's new seamless intimate apparel products. This level of capital expenditures compares to $1,614,000 for the same nine months of 1997. The Company anticipates that capital expenditures for the entire year of 1998 may approximate $8,000,000. The Company's liquidity needs, including the stock repurchase, have been more than adequately provided for with the securing of a new three-year $21,000,000 financing facility with a major bank (see Note 4 of Notes to Consolidated Financial Statements). The new financing facility provides a revolving loan of up to $15,000,000, depending upon levels of accounts receivable and inventories, a term loan of $3,000,000 and a future capital expenditure line of $3,000,000. In addition, the Company may secure other outside financing of capital expenditures of up to $4,500,000 over the three-year term of the facility. On August 7, 1998, the Company secured a $1,500,000 financing lease facility with a major financial institution covering the acquisition of qualified machinery during the remainder of 1998. The purchase on May 15, 1998 of 295,000 shares of the Company's common stock for approximately $2,328,000 (see Note 4 of Notes to Consolidated Financial Statements) reduced the company's net worth. However, the acquisition price per share of $7.50 (plus transaction costs) was significantly less than the Company's book value per share ($15.08 at March 29, 1998) and accordingly the net book value of the remaining outstanding shares was increased. On August 12, 1998, the Company's Board of Directors authorized the Corporation to acquire up to 40,000 shares of the outstanding Common Stock of the Corporation for an aggregate purchase price not to exceed $550,000. As of September 27, 1998, the Company had purchased a total of 15,500 shares at an aggregate cost of $193,000. At September 27, 1998, the book value per share of the Company's remaining outstanding common stock was $17.57 per share. On August 4, 1998 the Company declared a semi-annual cash dividend of $.075 per share ($117,930) on its common stock payable on August 24, 1998 to shareholders of record on August 14, 1998. Under the Company's loan agreement with a bank, dividends may not exceed $787,500 during the three-year term of the loan.
Results of Operations Items as a percentage of sales are reflected in the following table: Three Months Ended Nine Months Ended Sept. 27, Sept. 28, Sept. 27, Sept. 28, 1998 1997 1998 1997 ---- ---- ---- ---- (%) Net sales 100.0 100.0 100.0 100.0 Cost of sales 70.0 79.3 73.3 78.6 ---- ---- ---- ---- Gross margin 30.0 20.7 26.7 21.4 Selling, general and administrative expenses 17.8 17.5 17.6 20.4 ---- ---- ---- ---- Operating income (loss) 12.2 3.2 9.1 (1.0) Other income (expense), net (1.7) (1.5) (1.4) (2.0) --- --- --- --- Income before income taxes 10.5 1.7 (7.7) (1.0) Provision for income taxes 4.0 0.6 2.9 (0.4) --- --- --- --- Net income (loss) 6.5 1.1 4.8 (0.6)
Three Months Ended September 27, 1998 and September 28, 1997 During the third quarter of 1998 the Company reached record levels of revenues and earnings. Third quarter earnings of $1,232,000 compared to $162,000 in the third quarter of 1997. The quarterly earnings per share of 78 cents (74 cents fully diluted) was a record for the Company and compared to 9 cents per share in the third quarter of 1997. Revenues for the 1998 quarter increased 22.8% reaching a record level of $18,904,000 as compared to $15,390,000 for the prior year. Net sales by division for the third quarter of 1998 compared to the third quarter of 1997 are set forth in the following table ($000's):
Three Month Period Ended Sept. 27, Sept. 28, Increase/ % Increase/ 1998 1997 (Decrease) (Decrease) ---- ---- ---------- ---------- Health Products $8,158 $7,660 $498 6.5% Consumer Products 10,743 6,123 4,620 75.5% Byford 3 1,607 ($1,604) (99.8%) - ----- -------- Total $18,904 $15,390 $3,514 22.8%
Sales of Consumer Products increased $4,620,000 during the third quarter, or 75.5% over the comparable quarter of 1997. This increase results primarily from continuing acceptance of the Company's seamless intimate apparel as consumers continued to respond positively to the unsurpassed fit, comfort and style of seamless intimates. Sales in the Consumer Products Division in 1997 were down due to the loss of circular knit panty business to lower priced imports and the decision to eliminate the full fashion panty line. Sales of Health Products increased $498,000 or 6.5% due to growth in all major product lines partially offset by slower than anticipated acceptance of the Company's redesigned PulStar system. The decline in Byford sales reflects the Company's decision in the third quarter of 1997 to no longer distribute the line of men's socks and sweaters due to poor profitability. Gross margins increased in 1998 to 30.0% of net sales (20.7% in 1997) as the result of increased volume, higher margins on new seamless styles and cost controls. Interest expense decreased as a result of lower long-term debt and less borrowing under the line of credit agreement. Nine Months Ended September 27, 1998 and September 28, 1997 During the nine months of 1998 the Company also reached record levels of revenues and earnings. 1998 earnings of $2,625,000 compared to a loss of $279,000 in 1997. The year-to-date earnings per share of $1.53 ($1.48 fully diluted) was a record for the Company and compared to a loss of $.15 per share in the prior year. Revenues for 1998 year-to-date increased 21.5% reaching a record level of $54,914,000 as compared to $45,203,000 for the prior year. Net sales by division for the nine months of 1998 compared to 1997 are set forth in the following table ($000's):
Nine Month Period Ended Sept. 27, Sept. 28, Increase/ % Increase/ 1998 1997 (Decrease) (Decrease) ---- ---- ---------- ---------- Health Products $24,531 $23,451 $1,080 4.6% Consumer Products 30,285 18,135 12,150 67.0% Byford 98 3,617 ($3,519) (97.3%) -- ----- -------- Total $54,914 $45,203 $9,711 21.5%
Sales of Consumer Products increased $12,150,000 during 1998, or 67.0%, over 1997. This increase results primarily from continuing acceptance of the Company's seamless intimate apparel as consumers continued to respond positively to the unsurpassed fit, comfort and style of seamless intimates. Sales in the Consumer Products Division in 1997 were down due to the loss of circular knit panty business to lower priced imports and the decision to eliminate the full fashion panty line. Sales of Health Products increased $1,080,000 or 4.6% due to strong sales of treads and cuffs partially offset by shortfalls in sales of stockinette, dressings and the PulStar system. The decline in Byford sales reflects the Company's decision in the third quarter of 1997 to no longer distribute the line of men's socks and sweaters due to poor profitability. Gross margins increased in 1998 to 26.7% of net sales (21.4% in 1997) as the result of increased volume, higher margins on new seamless styles and cost controls. Selling, general and administrative expenses declined (as a percentage of net sales) from 20.4% in 1997 to 17.6% in 1998, primarily reflecting the impact of increased volumes. Also, included in 1997 expenses was a one-time charge of approximately $401,000 to record the severance arrangement with the Company's former President and CEO. Interest expense decreased as a result of lower long-term debt and less borrowing under the line of credit agreement during the period. Other expense in 1997 included one-time charges to write-off the full fashion equipment ($143,000) and to write down the carrying value of the idle Alba plant that is being held for sale ($48,000). Other income in 1997 included several minor non-recurring gains, including a gain from the sale of certain of the Company's yarn covering equipment, reflective of a decision to purchase covered yarn from outside vendors at a lower cost. YEAR 2000 COMPLIANCE We have addressed the Year 2000 Compliance issues in three parts; our products, our internal systems and third-parties. Our Products Year 2000 Compliance is not an issue for any of our products. None of our products, women's hosiery, women's intimate apparel or health products, contain date-sensitive-electronic components or date-sensitive software. Our Internal Systems We are confident that all major systems within Alba will be Year 2000 compliant before the turn of the century. For operational reasons, in late 1996 we decided to install a new integrated manufacturing and financial reporting management information system. This new system involved acquiring new system hardware, new PC-based local and wide-area networks and the standardization of PC software. All of these hardware and software systems are Year 2000 Compliant. The new system hardware, the new PC-based local area network and the new financial reporting system are now operational. The new manufacturing system and the wide-area network should be operational in the second quarter of 1999. Additionally, we have substantially completed our review of all other date-sensitive systems throughout Alba with no material non-compliance problems noted. This review also included non-information technology systems and equipment such as the electronic components of our knitting and other manufacturing equipment. Third Parties Like most all other companies, we are dependent upon our material vendors, suppliers and customers to ensure that we remain a going concern. We are unable to control the actions of others with respect to their Year 2000 Compliance. However, our material suppliers, service providers and customers are mostly all very large companies within their own industries and have much at stake in ensuring their own compliance. We are questioning these third parties as to their compliance plans and to-date have not been advised of any major non-compliance problems. We expect to have this process completed by mid-1999 and will then develop contingency plans in indicated problem areas, as feasible. The risks to Alba in this area are obviously significant; for example, we could not operate without a continuous source of electricity to our manufacturing plants and there are no realistic contingency alternatives available. Similarly, there is very little that we can do to continue sales to customers who themselves are unable to operate due to their own failure to ensure Year 2000 Compliance. We have not incurred and do not anticipate that we will incur material costs associated with the Year 2000 Compliance issue. Our operational decision in 1996 to replace our manufacturing and financial reporting systems had the side benefit of eliminating most Year 2000 Compliance issues for us. THIS QUARTERLY REPORT ON FORM 1O-Q, INCLUDING ANY INFORMATION INCORPORTATED THEREIN BY REFERENCE, MAY CONTAIN, IN ADDITION TO HISTORICAL INFORMATION, CERTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE SIGNIFICANT RISKS AND UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT'S BELIEF AS WELL AS ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO, MANAGEMENT PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS CAN GENERALLY BE IDENTIFIED AS SUCH BECAUSE THE CONTEXT OF THE STATEMENT USUALLY WILL INCLUDE WORDS SUCH AS "THE COMPANY BELIEVES"; OR "ANTICIPATES", OR "EXPECTS"; OR WORDS OF SIMILAR IMPORT. SIMILARLY, STATEMENTS THAT DESCRIBE THE COMPANY'S FUTURE PLANS, OBJECTIVES, ESTIMATES OR GOALS ARE ALSO FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ADDRESS FUTURE EVENTS AND CONDITIONS CONCERNING CAPITAL EXPENDITURES, EARNINGS, SALES, LIQUIDITY AND CAPITAL RESOURCES, AND ACCOUNTING MATTERS. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR IMPLIED BY, THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN ITEM 1 DESCRIPTION OF BUSINESS; AND ELSEWHERE IN THE COMPANY'S ANNUAL REPORT ON FORM 1O-K FOR THE YEAR ENDED DECEMBER 31, 1997, OR IN INFORMATION INCORPORATED THERIN BY REFERENCE, AS WELL AS FACTORS SUCH AS FUTURE ECONOMIC CONDITIONS, ACCEPTANCE BY CUSTOMERS OF THE COMPANY'S PRODUCTS, CHANGES IN CUSTOMER DEMAND, LEGISLATIVE, REGULATORY AND COMPETITIVE DEVELOPMENTS IN MARKETS IN WHICH THE COMPANY OPERATES AND OTHER CIRCUMSTANCES AFFECTING ANTICIPATED REVENUES AND COSTS. THE COMPANY UNDERTAKES NO OBLIGATION TO RELEASE PUBLICLY THE RESULT OF ANY REVISIONS TO THESE FORWARD LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS ANNUAL REPORT ON FORM 1O-K OR TO REFLECT THE OCCURRENCE OF OTHER ANTICIPATED EVENTS. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on FORM 8-K a. Exhibits 27. Financial Data Schedule (filed in electronic format only) b. Form 8-K None 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 there unto duly authorized. ALBA-WALDENSIAN, INC. Date: October 27, 1998 /s/ Glenn J. Kennedy -------------------- Vice President and Treasurer (Chief Financial Officer and Principal Accounting Officer) EX-27 2 FDS --
5 1,000 3-MOS DEC-31-1998 SEP-27-1998 6 0 11,107 384 11,331 23,146 34,185 19,194 45,629 6,659 0 0 0 4,716 22,700 45,629 54,914 54,914 40,261 49,894 174 0 662 4,234 1,609 2,625 0 0 0 2,625 1.53 1.48
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