-----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, KkjDH2INjnJcHbX+HUVOk+eteaa88PPFkciGBYbMlwJNA1kvx/+pLHO2suQqYGe0 qU9XXe/DAr5Qqa4usutVrQ== 0000035469-96-000013.txt : 19960812 0000035469-96-000013.hdr.sgml : 19960812 ACCESSION NUMBER: 0000035469-96-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIELDCREST CANNON INC CENTRAL INDEX KEY: 0000035469 STANDARD INDUSTRIAL CLASSIFICATION: BROADWOVEN FABRIC MILLS, COTTON [2211] IRS NUMBER: 560586036 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05137 FILM NUMBER: 96607198 BUSINESS ADDRESS: STREET 1: 326 E STADIUM DRIVE CITY: EDEN STATE: NC ZIP: 27288 BUSINESS PHONE: 9196273000 FORMER COMPANY: FORMER CONFORMED NAME: FIELDCREST MILLS INC DATE OF NAME CHANGE: 19860807 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 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 No. 1-5137 FIELDCREST CANNON, INC. (Exact name of registrant as specified in its charter) DELAWARE 56-0586036 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Lake Drive Kannapolis, NC 28081 (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code 704-939-2000 Former name, former address and former fiscal year, if changed since last report 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 and (2) has been subject to such filing requirements for the past 90 days. Yes x . No . Number of shares outstanding July 31, 1996 Common Stock 9,038,251 Total pages 19 Exhibit Index Page 11 PART 1. FINANCIAL INFORMATION FIELDCREST CANNON, INC. Consolidated statement of financial position
June 30, December 31, Dollars in thousands 1996 1995 Assets Cash $ 10,460 $ 9,124 Accounts receivable 181,907 168,112 Inventories (note 3) 254,387 228,167 Other prepaid expenses and current assets 2,031 3,446 Total current assets 448,785 408,849 Plant and equipment, net 336,981 342,285 Deferred charges and other assets 60,185 61,812 Total assets $ 845,951 $812,946 Liabilities and shareowners' equity Accounts and drafts payable $ 77,952 $ 54,274 Deferred income taxes 18,547 17,593 Accrued liabilities 62,354 67,725 Current portion of long-term debt 6,930 780 Total current liabilities 165,783 140,372 Senior long-term debt 162,425 155,262 Subordinated long-term debt 203,750 210,000 Total long-term debt 366,175 365,262 Deferred income taxes 42,730 40,475 Other non-current liabilities 54,584 51,406 Total liabilities 629,272 597,515 Shareowners' equity: Preferred Stock, $.01 par value, 10,000,000 authorized, 1,500,000 issued and outstanding June 30, 1996 and December 31, 1995 (aggregate liquidation preference of $75,000) 15 15 Common Stock, $1 par value, 25,000,000 authorized, 12,644,651 issued June 30, 1996 and 12,560,826 December 31, 1995 12,645 12,561 Additional paid in capital 222,990 221,025 Retained earnings 98,254 99,055 Excess purchase price for Common Stock acquired and held in treasury - 3,606,400 shares (117,225) (117,225) Total shareowners' equity 216,679 215,431 Total liabilities and shareowners' equity $845,951 $812,946 /TABLE See accompanying notes (2) FIELDCREST CANNON, INC. Consolidated statement of income and retained earnings
For the three months For the six months Dollars in thousands, ended June 30 ended June 30 except per share data 1996 1995 1996 1995 Net sales $277,803 $273,048 $527,774 $530,057 Cost of sales 241,802 238,662 456,914 452,687 Selling, general and administrative 25,036 25,644 50,153 52,346 Restructuring charges - 4,530 3,630 8,454 Total operating costs and expenses 266,838 268,836 510,697 513,487 Operating income 10,965 4,212 17,077 16,570 Other deductions (income): Interest expense 7,281 6,681 14,336 13,483 Other, net 282 - 422 (144) Total other deductions 7,563 6,681 14,758 13,339 Income (loss) before income taxes 3,402 (2,469) 2,319 3,231 Federal and state income taxes (benefit) 1,276 (925) 870 1,212 Net income (loss) 2,126 (1,544) 1,449 2,019 Preferred dividends (1,125) (1,125) (2,250) (2,250) Earnings (loss) on common 1,001 (2,669) (801) (231) Amount added to (subtracted from) retained earnings 1,001 (2,669) (801) (231) Retained earnings, beginning of period 97,253 121,718 99,055 119,280 Retained earnings, end of period $98,254 $119,049 $98,254 $119,049 Net income (loss) per common share $ .11 $ (.30) $ (.09) $ (.02) Fully diluted income (loss) per common share $ .11 $ (.30) $ (.09) $ (.02) Average primary shares outstanding 9,001,981 8,860,341 8,982,100 8,833,658 Average fully diluted shares outstanding 9,001,981 8,860,199 8,983,219 8,834,032 /TABLE See accompanying notes (3) FIELDCREST CANNON, INC. Consolidated statement of cash flows
Six Months ended June 30 Dollars in thousands 1996 1995 Increase (decrease) in cash Cash flows from operating activities: Net income $ 1,449 $ 2,019 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,853 15,710 Deferred income taxes 2,255 2,471 Other 6,989 (1,377) Change in current assets and liabilities, excluding effects of acquisition of Sure Fit: Accounts receivable (13,795) 6,860 Inventories (26,220) (27,060) Other prepaid expenses and current assets 1,415 577 Accounts payable and accrued liabilities 18,307 (542) Federal and state income taxes - (2,268) Deferred income taxes 954 (1,372) Net cash provided by (used in) operating activities 9,207 (4,982) Cash flows from investing activities: Additions to plant and equipment (15,362) (32,447) Proceeds from disposal of plant and equipment 2,637 621 Proceeds from net assets held for sale - 20,800 Purchase of Sure Fit, net of cash acquired - (27,300) Net cash (used in) investing activities (12,725) (38,326) Cash flows from financing activities: Increase in revolving debt 7,478 45,502 Payments on long-term debt (415) (1,101) Proceeds from sale of common stock 41 57 Dividends paid on preferred stock (2,250) (2,250) Net cash provided by financing activities 4,854 42,208 Increase (decrease) in cash 1,336 (1,100) Cash at beginning of year 9,124 5,885 Cash at end of period $10,460 $ 4,785
See accompanying notes (4) FIELDCREST CANNON, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1996 1. Basis of Presentation The consolidated financial statements are unaudited. In the opinion of management all adjustments, consisting only of normal recurring items, have been made which are necessary to show a fair presentation of the financial position of the Company at June 30, 1996 and the related results of operations for the three and six months ended June 30, 1996 and 1995. The unaudited consolidated financial statements should be read in conjunction with the Company's Form 10-K for the year ended December 31, 1995. 2. Income Per Common Share Reference is made to Exhibit 11 to this Form 10-Q for a computation of primary and fully-diluted net income per Common share. 3. Inventories Inventories are classified as follows:
June 30, December 31, (In thousands) 1996 1995 Finished goods $138,736 $117,776 Work in process 81,965 72,315 Raw materials and supplies 33,686 38,076 $254,387 $228,167
At June 30, 1996 approximately 77% of the inventories were valued on the last-in, first-out method (LIFO). (5) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Changes in Financial Condition The Company's debt (including the current portion of long-term debt) increased $7.5 million during the first six months of 1996. Debt increased primarily because inventories increased $26.2 million due to normal seasonal inventory build-up. Capital expenditures totaled $15.4 million for the first six months of 1996 compared to $32.4 million for the first six months of 1995. Included in the 1996 and 1995 capital expenditures are $4.7 million and $17.8 million, respectively, for the new weaving plant at the Company's Columbus, GA/Phenix City, Ala. towel mill. Capital expenditures for 1996 are expected to be approximately $35 million. At June 30, 1996, approximately $32.4 million of the Company's $195 million revolving credit facility was available and unused. It is anticipated that financing of future capital expenditures will be provided by cash flows from operations, borrowings under the Company's revolving credit facility, and, possibly, the sale of long-term debt or equity securities. The Company has retained a financial advisor in connection with the possible sale of its Blanket Division, which had net sales of $71 million in 1995 and net assets of approximately $40 million. Proceeds from any sale would be used to reduce debt and for reinvestment in the Company's core businesses. Changes in Results of Operations Quarter Ended June 30, 1996 vs. Quarter Ended June 30, 1995 Net sales for the second quarter of 1996 were $277.8 million compared to $273.0 million in the second quarter of 1995, an increase of 2%. The increase in revenues was due primarily to volume increases. Gross profit margins increased from 12.6% in the second quarter of 1995 to 13.0% in the second quarter of 1996. The increase reflects the benefits of the new towel facility in Phenix City, Alabama, and a series of cost-reduction programs implemented by the Company. These include the Bed Division's closing of two yarn facilities in the first quarter and the division's decision to begin purchasing yarn from outside suppliers. The Bed Division's changes are expected to result in annual pre-tax savings of approximately $9 million. The increase in margins was mitigated by lower mill activity, higher cotton costs and $1.6 million of equipment relocation and employee training costs related to the consolidation and closing of two towel facilities. Additional operating costs of approximately $1 million are expected in the third quarter of 1996 before benefits of the towel consolidation are realized. The towel consolidation is expected to result in annual pre-tax savings of $8 million to $9 million. (6) Selling, general and administrative expenses decreased as a percentage of sales from 9.4% to 9.0% in the second quarter of 1996 compared to the same quarter of 1995. The decrease was due primarily to lower payroll costs associated with the New York office reorganization and the early retirement program implemented during 1995. In the second quarter of 1995 operating income was reduced by pre-tax restructuring charges of $4.5 million related to the reorganization of the Company's New York operations. Operating income as a percentage of sales increased to 3.9% in the second quarter of 1996 from 1.5% in the second quarter of 1995. The increase was due to the $4.5 million of 1995 restructuring charges, improved gross margins and lower selling, general and administrative expenses. Interest expense increased $.6 million in the second quarter of 1996 as compared to the second quarter of 1995 due primarily to an increase in average debt outstanding. The effective income tax rate was 37.5% for the second quarters of 1996 and 1995. Net income was $2.1 million, or $.11 per share in the second quarter of 1996, compared to a net loss of $1.5 million, or $.30 per share, in the second quarter of 1995. Six Months Ended June 30, 1996 vs. Six Months Ended June 30, 1995 Net sales for the first six months of 1996 were $527.8 million compared to $530.1 million in the first six months of 1995. The decrease in revenues was due primarily to volume decreases which occurred during the first three months of the period. Gross profit margins decreased from 14.6% in the first six months of 1995 to 13.4% in the first six months of 1996. The decrease was due primarily to lower mill activity, higher raw material prices and $1.6 million of equipment relocation and employee training costs related to the consolidation and closing of two towel facilities. Selling, general and administrative expenses decreased as a percentage of sales from 9.9% to 9.5% in the first six months of 1996 compared to the first six months of 1995. The decrease was due primarily to lower payroll costs associated with the New York office reorganization and the early retirement program implemented during 1995. Pre-tax restructuring charges of $3.6 million in the first six months of 1996 relate to closing a towel weaving plant and a yarn manufacturing plant as a part of the Company's ongoing consolidation effort to utilize assets more effectively. The restructuring charges of $8.5 million in the first six months of 1995 relate to the reorganization of the Company's New York operations. (7) Operating income as a percentage of sales increased to 3.2% in the first six months of 1996 from 3.1%. Interest expense increased $.9 million the first six months of 1996 as compared to the first six months of 1995 due primarily to an increase in average debt outstanding. The effective income tax rate was 37.5% for the first six months of 1996 and 1995. Net income, after the effect of the restructuring charges, was $1.4 million, a $.09 loss per share after preferred dividends, for the first six months of 1996 compared to net income of $2.0 million, a $.02 loss per share after preferred dividends, for the first six months of 1995. Forward-Looking Statements Certain statements in management's financial discussion and analysis above contain forward-looking information, including the statements under the discussion of the quarter ended June 30, 1996 versus the quarter ended June 30, 1995 relating to the amount of expected annual pre-tax savings from certain changes in the Bed Division and the timing and amount of savings expected to result from the Company's towel consolidation efforts. Actual results and trends could differ materially from those that are reflected in such statements due to a variety of important factors, including changes in the Company's product sales mix and market conditions for bed and bath products. (8) PART II. OTHER INFORMATION FIELDCREST CANNON, INC. Item 4. Submission of Matters to a Vote of Security Holders (a). The Company held its Annual Meeting of Stockholders on April 29, 1996. (b). Not applicable. (c). Holders of Common Stock (one vote per share) voted at this meeting on the following matters, which were set forth in full in the Registrant's Proxy statement dated March 27, 1996. I. Election of Directors: Votes Nominee: For Withheld James M. Fitzgibbons 8,233,834 90,184 William E. Ford 8,234,029 89,989 John C. Harned 8,240,594 83,424 Noah T. Herndon 8,240,858 83,160 S. Roger Horchow 8,232,510 91,508 W. Duke Kimbrell 8,237,754 86,264 C. J. Kjorlien 8,236,983 87,035 Alexandra Stoddard 8,224,938 99,080 II. Selection of Independent Auditors: Votes For 8,279,326 Against 27,139 Abstain 17,553 (d). Not applicable Item 6. Exhibits and Reports on Form 8-K (a). Exhibits 10-1. Fifth Amendment to Third Amended and Restated Revolving Credit Agreement dated March 29, 1996 11. Computation of Primary and Fully Diluted Net Income Per Share. (9) (b). Reports on Form 8-K The Registrant did not file any reports to the Commission on Form 8-K for the quarter ended June 30, 1996. S I G N A T U R E S 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. FIELDCREST CANNON, INC. (Registrant) BY: /s/ T. R. Staab T. R. Staab Vice President and Chief Financial Officer Date: August 9, 1996 (10) EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR FIELDCREST CANNON, INC. FOR THE QUARTER ENDED JUNE 30, 1996 Exhibit Page Number Description Number (10.1) Fifth Amendment to Third Amended and Restated Revolving Credit Agreement dated March 29, 1996 12-18 (11) Computation of Primary and Fully Diluted Net Income Per Share 19 (11) Exhibit 10.1 FIFTH AMENDMENT to THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT This FIFTH AMENDMENT (the "Amendment"), dated as of March 29, 1996, is by and among FIELDCREST CANNON, INC., a Delaware corporation (the "Company"), the lenders listed on the signature pages hereto (the "Lenders"), BANK OF AMERICA ILLINOIS (formerly known as Continental Bank N.A.), CORESTATES BANK, N.A. (formerly known as Philadelphia National Bank) and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as lead managers for the Lenders (collectively, the "Lead Managers"), and THE FIRST NATIONAL BANK OF BOSTON, as agent for the Lenders (the "Agent"). WHEREAS, the Company, the Lenders, the Lead Managers and the Agent are parties to that certain Third Amended and Restated Revolving Credit Agreement, dated as of March 10, 1994, as amended (as so amended, the "Credit Agreement"); and WHEREAS, the Company, the Lenders, the Lead Managers and the Agent have agreed, subject to the terms and conditions set forth herein, to amend certain provisions of the Credit Agreement as set forth herein; NOW, THEREFORE, the parties hereto hereby agree as follows: Para. 1. CERTAIN DEFINED TERMS. Capitalized terms which are used herein without definition and which are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement. Para. 2. AMENDMENT TO CREDIT AGREEMENT. (a) Section 1 of the Credit Agreement is hereby amended by adding the following new definitions in the appropriate places in the alphabetical sequence thereof: Mill Closing Expenses Amount. For any fiscal quarter of the Company, the aggregate amount of restructuring expenses incurred by the Company as normal operating expenses during such fiscal quarter as a result of the closure of the Company's towel manufacturing facility, known as Plant 19, located in York, South Carolina and the Company's yarn plant, known as Plant 15, located in Concord, North Carolina, including costs -1- (12) resulting from the relocation of equipment, the costs of training employees for production transferred to the Company's remaining towel manufacturing facilities and idle plant costs, as such amount is identified by the Company to the Agent in a manner satisfactory to the Agent in all respects. Mill Closing Restructuring Charge. An amount equal to the one-time charge against Consolidated Net Income of the Company and its Subsidiaries for the fiscal quarter of the Company ending March 31, 1996 incurred as a result of the closing of the Company's towel manufacturing facility, known as Plant 19, located in York, South Carolina and the Company's yarn plant, known as Plant 15, located in Concord, North Carolina, as such amount is reflected in the consolidated financial statements of the Company and its Subsidiaries for such fiscal period; provided that in no event shall the Mill Closing Restructuring Charge include the Mill Closing Expenses Amount. (b) The definition of "Consolidated Net Income" set forth in para. 1 of the Credit Agreement is hereby amended by deleting the word "and" at the end of clause (c) thereof and substituting therefor a comma and inserting before the period at the end of the definition of "Consolidated Net Income" the following text: ", (e) there shall be added to Consolidated Net Income for the fiscal quarter ending March 31, 1996, an amount equal to the Mill Closing Restructuring Charge, as determined on a basis, provided that in no event shall the aggregate amount added to Consolidated Net Income pursuant to this clause (e) exceed $5,000,000, and (f) there shall be added to Consolidated Net Income for the fiscal quarters ending March 31, 1996, June 30, 1996, September 30, 1996 and December 31, 1996 an amount equal to the Mill Closing Expenses Amount for such fiscal quarter, as determined on a pre-tax basis, provided that in no event shall the aggregate amount added to Consolidated Net Income for the combined four quarter fiscal period pursuant to this clause (f) exceed $3,200,000, all as determined in accordance with Generally Accepted Accounting Principles." Para. 3. AFFIRMATION BY THE COMPANY AND THE GUARANTORS. (a) The Company hereby ratifies and confirms all of the Lender Obligations, including, without limitation, the Loans, and the Company hereby affirms its absolute and unconditional promise to pay to the Lenders the Loans and all other amounts due under the Credit Agreement as amended hereby. The Company hereby confirms that the Lender Obligations are and remain secured pursuant to the Security Documents to which the Company is a party. -2- (13) (b) Each of Crestfield Cotton, FCC Canada, Encee, Fieldcrest International, St. Mary's, Fieldcrest Transportation, Fieldcrest Financing, Fieldcrest Licensing and Fieldcrest Sure Fit hereby acknowledges the provisions of this Amendment and hereby reaffirms its absolute and unconditional guaranty of the Company's payment and performance of the Lender Obligations to the Banks as more fully described in the Guaranty to which such Person is a party. Each of the Secured Guarantors hereby confirms that its obligations under the Guaranty to which it is a party are and remain secured pursuant to the Security Documents to which it is a party. Para. 4. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants to the Lenders as follows: (a) Representations and Warranties. The representations and warranties contained in para. 6 of the Credit Agreement were true and correct in all material respects when made. The representations and warranties contained in para. 6 of the Credit Agreement, as amended hereby, are true and correct on the date hereof. (b) Enforceability. The execution and delivery by the Company and the Secured Guarantors of this Amendment and all other instruments and agreements required to be executed and delivered by the Company and the Secured Guarantors, as the case may be, in connection with the transactions contemplated hereby or referred to herein (collectively, the "Amendment Documents"), and the performance by the Company and the Secured Guarantors of the Amendment Documents and the Credit Agreement, as amended hereby, are within the corporate powers of the Company and the Secured Guarantors, as the case may be, and have been duly authorized by all necessary corporate action on the part of the Company and the Secured Guarantors, as the case may be. Each of the Amendment Documents and the Credit Agreement, as amended hereby, are valid and legally binding obligations of the Company and the Secured Guarantors, as the case may be, enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors' rights in general. (c) No Default. No Default or Event of Default has occurred and is continuing and no Default or Event of Default will exist after the execution and delivery of this Amendment or after the consummation of the transactions contemplated hereby. Para. 5. EFFECTIVENESS. This Amendment shall become effective upon satisfaction of each of the following conditions precedent on or prior to March 31, 1996: -3- (14) (a) Delivery. The Company, the Majority Lenders, the Agent and the guarantors referred to in para. 3(b) hereof shall have executed and delivered this Amendment. (b) Proceedings and Documents. All proceedings in connection with the transactions contemplated by this Amendment and all documents incident hereto shall be satisfactory in form and substance to the Agent, and the Agent shall have received all information and such counterpart originals or certified or other copies of such documents as the Agent may reasonably request. Para. 6. MISCELLANEOUS PROVISIONS. (a) Except as otherwise expressly provided by this Amendment, all of the terms, conditions and provisions of the Credit Agreement shall remain the same. It is declared and agreed by each of the parties hereto that the Credit Agreement, as amended hereby, shall continue in full force and effect, and that this Amendment and such Credit Agreement shall be read and construed as one instrument. The consent granted hereunder is limited to the specific matters referred to herein and the Lenders shall not have any obligation to issue any further consent with respect to the subject matter of this consent or any other matter. (b) This Amendment is intended to take effect as an agreement under seal and shall be construed according to and governed by the laws of the Commonwealth of Massachusetts. (c) This Amendment may be executed in any number of counterparts, but all such counterparts shall together constitute but one instrument. In making proof of this Amendment it shall not be necessary to produce or account for more than one counterpart signed by each party hereto by and against which enforcement hereof is sought. (d) The Company hereby agrees to pay to the Agent, on demand by the Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by the Agent in connection with the preparation of this Amendment and the documents referred to herein (including reasonable legal fees). -4- (15) IN WITNESS WHEREOF, the parties have executed this Fifth Amendment as of the date first above written. FIELDCREST CANNON, INC. By:/s/ T. R. Staab Title: Vice President and Chief Financial Officer THE FIRST NATIONAL BANK OF BOSTON, as Agent By:/s/ Mitchell B. Feldman Title: Managing Director THE FIRST NATIONAL BANK OF BOSTON By:/s/ Mitchell B. Feldman Title: Managing Director BANK OF AMERICA ILLINOIS, individually and as Lead Manager By:/s/ Deirdre B. Doyle Title: Vice President CORESTATES BANK, N. A., individually and as Lead Manager By:/s/ James P. Richards Title: Vice President -5- (16) FIRST UNION NATIONAL BANK OF NORTH CAROLINA, individually and as Lead Manager By:/s/ J. M. Highsmith Title: Senior Vice President BANK OF MONTREAL By: Title: MELLON BANK, N. A. By:/s/ Charles M. Staub Title: Vice President Each of the undersigned joins in this Fifth Amendment for purposes of para. (b) hereof. CRESTFIELD COTTON COMPANY By:/s/ T. R. Staab Title: Vice President and Treasurer FCC CANADA, INC. By:/s/ T. R. Staab Title: Vice President and Treasurer ENCEE, INC. By:/s/ T. R. Staab Title: Vice President and Treasurer -6- (17) FIELDCREST CANNON INTERNATIONAL, INC. By:/s/ T. R. Staab Title: Vice President and Treasurer ST. MARY'S, INC. By:/s/ T. R. Staab Title: Vice President and Treasurer FIELDCREST CANNON TRANSPORTATION, INC. By:/s/ T. R. Staab Title: Vice President and Treasurer FIELDCREST CANNON LICENSING, INC. By:/s/ John E. Setliff, Jr. Title: Vice President FIELDCREST CANNON FINANCING, INC. By:/s/ John E. Setliff, Jr. Title: Vice President FIELDCREST CANNON SURE FIT, INC. By:/s/ T. R. Staab Title: Vice President and Chief Financial Officer -7- (18) Exhibit 11 Computation of Primary and Fully Diluted Net Income Per Share
For the three months For the six months ended June 30 ended June 30 1996 1995 1996 1995 Average shares outstanding 8,992,496 8,848,175 8,973,663 8,821,167 Add shares assuming exercise of options reduced by the number of shares which could have been purchased with the proceeds from exercise of such options 9,485 12,166 8,437 12,491 Average shares and equivalents outstanding, primary 9,001,981 8,860,341 8,982,100 8,833,658 Average shares outstanding 8,992,496 8,848,175 8,973,663 8,821,167 Add shares giving effect to the conversion of the convertible subordinated debentures (1) (1) (1) (1) Add shares giving effect to the conversion of the convertible preferred stock (1) (1) (1) (1) Add shares assuming exercise of options reduced by the number of shares which could have been purchased with the proceeds from exercise of such options 9,485 12,024 9,556 12,865 Average shares and equivalents outstanding, assuming full dilution 9,001,981 8,860,199 8,983,219 8,834,032 Primary Earnings Net income (loss) $ 2,126,000 $(1,544,000) $1,449,000 $2,019,000 Preferred dividends (1,125,000) (1,125,000) (2,250,000) (2,250,000) Earnings (loss) on Common $ 1,001,000 $(2,669,000) $ (801,000) $ (231,000) Primary earnings (loss) per common share $ .11 $ (.30) $ (.09) $ (.02) Fully Diluted Earnings Earnings (loss) on Common $ 1,001,000 $(2,669,000) $ (801,000) $ (231,000) Add convertible subordinated debenture interest, net of taxes (1) (1) (1) (1) Add convertible preferred dividends (1) (1) (1) (1) Net income (loss) $ 1,001,000 $(2,669,000) $ (801,000) $ (231,000) Fully diluted earnings (loss) per Common share $ .11 $ (.30) $ (.09) $ (.02)
(1) The assumed conversion of the Registrant's Convertible Subordinated Debentures and Convertible Preferred Stock for the three months and six months ended June 30, 1996 and 1995 would have an anti-dilutive effect for the computation of earnings per share; therefore, conversion has not been assumed for these periods. (19) EX-27 2
5 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 10,460 0 181,907 0 254,387 448,785 336,981 0 845,951 165,783 366,175 0 15 12,645 204,019 845,951 527,774 527,774 456,914 456,914 53,783 0 14,336 2,319 870 1,449 0 0 0 1,449 (.09) (.09)
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