-----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, SyGzONabUlkWVZCM3a04SMLZlIGs9O65S3JiQG4BvFsCTm5yesrZSu4A2RrhZrBB uJXW6m9d4zvDcKDv7UBTFg== 0000906504-01-000012.txt : 20010214 0000906504-01-000012.hdr.sgml : 20010214 ACCESSION NUMBER: 0000906504-01-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BONTEX INC CENTRAL INDEX KEY: 0000041052 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 221427551 STATE OF INCORPORATION: VA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05200 FILM NUMBER: 1538097 BUSINESS ADDRESS: STREET 1: ONE BONTEX DR CITY: BUENA VISTA STATE: VA ZIP: 24416-0500 BUSINESS PHONE: 5402612181 MAIL ADDRESS: STREET 1: PO BOX 751 CITY: BUENA VISTA STATE: VA ZIP: 24416 FORMER COMPANY: FORMER CONFORMED NAME: GEORGIA BONDED FIBERS INC DATE OF NAME CHANGE: 19920703 10-Q 1 0001.txt FORM 10-Q FOR BONTEX, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 31, 2000 Commission File No. 0-5200 BONTEX, INC. (Exact name of registrant as specified in its charter) VIRGINIA 54-0571303 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE BONTEX DRIVE, BUENA VISTA, VIRGINIA 24416-1500 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 540-261-2181 Indicate by checkmark whether the registrant (1) has filed all reports 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 description and number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Class Outstanding at February 13, 2001 Common Stock - $.10 par value 1,572,824 BONTEX, INC. FORM 10-Q FOR THE SECOND QUARTER ENDED DECEMBER 31, 2000 INDEX PART I. FINANCIAL INFORMATION Page No. Item 1. Financial Statements CONDENSED CONSOLIDATED BALANCE SHEETS December 31, 2000 and June 30, 2000...................................3 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) AND CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Six Months and Three Months Ended December 31, 2000 and 1999..........4 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended December 31, 2000 and 1999...........................5 CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.....6, 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................8-10 Item 3. Quantitative and Qualitative Disclosures About Market Risk.............................................10, 11 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders.........12 Item 6. Exhibits and Reports on Form 8-K............................12 2
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BONTEX, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) DECEMBER 31, June 30, (UNAUDITED) 2000 2000 ASSETS Current assets: Cash and cash equivalents $ 740 $ 457 Trade accounts receivable, less allowance for doubtful Accounts of $181 ($170 at June '00) 11,333 12,187 Other receivables 448 378 Inventories 6,073 5,465 Deferred income taxes 144 135 Income taxes refundable 6 49 Other current assets 365 120 ----------------- ----------------- TOTAL CURRENT ASSETS 19,109 18,791 ----------------- ----------------- Property, plant and equipment: Land and land improvements 289 350 Buildings and building improvements 5,481 5,525 Machinery, furniture and equipment 17,853 17,797 Construction in progress 527 526 ----------------- ----------------- 24,150 24,198 Less accumulated depreciation and amortization 13,895 13,491 ----------------- ----------------- Net property, plant and equipment 10,255 10,707 Deferred income taxes 764 736 Other assets, net 582 651 ----------------- ----------------- TOTAL ASSETS $ 30,710 $ 30,885 ================= ================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 8,883 $ 8,251 Long-term debt due currently 625 626 Accounts payable 7,373 7,756 Accrued expenses 2,002 1,902 Income taxes payable 508 594 ----------------- ----------------- TOTAL CURRENT LIABILITIES 19,391 19,129 Long-term debt, less current portion 2,019 2,327 Deferred income taxes 40 42 Other long-term liabilities 472 439 ----------------- ----------------- TOTAL LIABILITIES 21,922 21,937 ----------------- ----------------- Stockholders' equity: Preferred stock of no par value. Authorized 10,000,000 shares; none issued - - Common stock of $.10 par value. Authorized 10,000,000 shares; issued and outstanding 1,572,824 shares 157 157 Additional capital 1,551 1,551 Retained earnings 7,407 7,461 Accumulated other comprehensive income (loss) (327) (221) ----------------- ----------------- TOTAL STOCKHOLDERS' EQUITY 8,788 8,948 ----------------- ----------------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 30,710 $ 30,885 ================= =================
See accompanying condensed notes to unaudited condensed consolidated financial statements. 3
BONTEX, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) AND CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS): SIX MONTHS ENDED THREE MONTHS ENDED DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 Net Sales $ 19,896 $ 18,013 $ 10,768 $ 9,954 Cost of Sales 15,241 13,415 8,248 7,277 ---------- ----------- ----------- ----------- Gross Profit 4,655 4,598 2,520 2,677 Selling, General and Administrative Expenses 5,088 5,040 2,695 2,628 ---------- ----------- ----------- ----------- Operating Income (Loss) (433) (442) (175) 49 ---------- ----------- ----------- ----------- Other (Income) Expense: Interest expense 437 388 220 188 Interest income (6) - (6) - Foreign currency exchange (gain) loss (4) (21) 26 (6) Other, net (796) 41 (798) 34 ---------- ----------- ----------- ----------- Total Other (Income) Expense, Net (369) 408 (558) 216 ---------- ----------- ----------- ----------- Income (Loss) Before Income Taxes (64) (850) 383 (167) Income Tax Expense (Benefit) (10) (200) 147 (56) ---------- ----------- ----------- ----------- Net income (loss) (54) (650) 236 (111) Other Comprehensive Income (Loss) Foreign currency translation adjustment (106) (110) 244 (246) ---------- ----------- ----------- ----------- Comprehensive Income (Loss) $ (160)$ (760)$ 480 $ (357) ========== =========== =========== =========== Net income (loss) per share $ (.03)$ (.41)$ .15 $ (.07) ========== =========== =========== =========== CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY: Stockholders' Equity, beginning balance $ 8,948 $ 9,893 $ 8,308 $ 9,490 Net income (loss) (54) (650) 236 (111) Other comprehensive income (loss) Foreign currency translation adjustment (106) (110) 244 (246) ---------- ----------- ----------- ----------- Stockholders' Equity, ending balance $ 8,788 $ 9,133 $ 8,788 $ 9,133 ========== =========== =========== ===========
See accompanying condensed notes to unaudited condensed consolidated financial statements. 4
BONTEX, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED) SIX MONTHS ENDED DECEMBER 31, 2000 1999 Cash Flows from Operating Activities: Cash received from customers $ 20,364 $ 18,747 Cash paid to suppliers and employees (20,498) (16,771) Interest received 6 3 Interest paid (467) (377) Income taxes paid, net of refunds (31) (1) ----------- ------------ Net cash provided by (used in) operating activities (626) 1,601 ----------- ------------ Cash Flows from Investing Activities: Proceeds from sale of property, plant and equipment 863 -- Acquisition of property, plant and equipment (360) (342) ----------- ------------ Net cash used in investing activities 503 (342) ----------- ------------ Cash Flows from Financing Activities: Increase (decrease) in short-term borrowings, net 674 (845) Long-term debt incurred 52 27 Principal payments on long-term debt (329) (374) ----------- ------------ Net cash provided by (used in) financing activities 397 (1,192) ----------- ------------ Effect of Exchange Rate Changes on Cash 9 (9) ----------- ------------ Net Increase in Cash and Cash Equivalents 283 58 Cash and Cash Equivalents at Beginning of Period 457 336 ----------- ------------ Cash and Cash Equivalents at End of Period $ 740 $ 394 =========== ============ Reconciliation of Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Net income (loss) $ (54) $ (650) Adjustments to reconcile net income (loss) to net cash used in Operating activities: Depreciation and amortization 647 665 Gain on sale of property, plant and equipment (803) -- Provision for bad debts 15 87 Deferred income taxes (35) (205) Change in assets and liabilities: Decrease in trade accounts and other receivables 441 1,454 Increase in inventories (501) (1) Increase in other assets (209) (236) Increase (decrease) in accounts payable and accrued expenses (135) 400 Increase (decrease) in income taxes (61) 2 Increase in other liabilities 69 85 ----------- ------------ Net cash provided by (used in) operating activities $ (626) $ 1,601 =========== ============
See accompanying condensed notes to unaudited condensed consolidated financial statements. 5 BONTEX, INC. AND SUBSIDIARIES CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000 AND JUNE 30, 2000 (UNAUDITED) (DOLLARS IN THOUSANDS) 1. The accompanying unaudited condensed consolidated financial statements have been prepared by Bontex, Inc. and its subsidiaries ("Bontex" or the "Company") in accordance with generally accepted accounting principles in the United States of America for interim financial reporting information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States of America for complete financial statements. In the opinion of management, all material reclassifications and adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of the results of operations, financial position and cash flows for each period shown, have been included. Operating results for interim periods are not necessarily indicative of the results for the full year. The unaudited condensed consolidated financial statements and condensed notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company's annual consolidated financial statements and notes. For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2000. 2. The last in, first out (LIFO) method of inventory pricing is used by the Company in the United States. Inventories of the European subsidiaries are valued at the lower of cost or market using the first-in, first-out (FIFO) and weighted average bases. Inventories are summarized as follows:
December 31, June 30, 2000 2000 (Dollars in Thousands) Finished goods $ 4,379 $ 3,846 Raw Materials 1,409 1,222 Supplies 655 708 --------------- ---------------- Inventories at FIFO and weighted average cost 6,443 5,779 --------------- ---------------- LIFO reserves 370 314 --------------- ---------------- $ 6,073 $ 5,465 =============== ================
3. Business segment information related to the North American and European operations follows:
North American European Operations Operations Eliminations Consolidated Six Months Ended December 31, 2000 Net Sales $ 8,468 $ 11,649 $ (221) $ 19,896 Net (Loss) Income (58) 4 - (54) Six Months Ended December 31, 1999 Net Sales $ 7,661 $ 10,502 $ (150) $ 18,013 Net Loss (436) (214) - (650)
6 BONTEX, INC. AND SUBSIDIARIES CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000 AND JUNE 30, 2000 (UNAUDITED) (DOLLARS IN THOUSANDS) 4. Net loss per share has been computed on the basis of the weighted average number of common shares outstanding during each period (1,572,824 shares). Diluted earnings per share is not presented because the effect of stock options is anti-dilutive. 5. During fiscal year 2000, the Ministere Des Finances, the Belgian tax authority, completed an examination of Bontex S.A.'s, the Company's Belgian subsidiary, tax returns for 1997, 1998 and 1999 and extended the tax examination to 1995 and 1996 based on certain items. Bontex S.A. has received notices of proposed tax adjustments to these tax returns. The proposed tax adjustments arise from items which are considered disallowed expenses by tax authorities, including commissions paid to certain distributors and clients, certain travel expenses and various smaller items including allowances for doubtful receivables and certain insurance premiums. The proposed tax adjustments by the Belgian authorities approximate $820,000. The Company believes, based in part on written opinion of external counsel, it has meritorious legal defenses to many of the claims and the Company intends to defend such claims. The Company's best estimate of the most likely amount payable for the foregoing tax matters is $239,000, and accordingly, a provision for this amount was accrued at June 30, 2000. 6. Included in Other Income for the quarter ended December 31, 2000, is a gain of $803,000 from the sale of Bontex Inc.'s warehouse facility in Newark, New Jersey. The New Jersey Institute of Technology purchased the facility for $863,000. The Company's net book value in the property was approximately $60,000. The entire proceeds were applied to the payment of short-term debt. 7 BONTEX, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE SIX MONTHS AND QUARTER ENDED DECEMBER 31, 2000 (UNAUDITED) Except for historical data set forth herein, the following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. Forward-looking statements include, for example, statements about future results of operations or market conditions and involve risks, uncertainties and assumptions. Actual results may differ materially from these forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, excessive worldwide footwear inventories, a shrinking U.S. domestic market for Bontex products, decreased sales to key customers, increased foreign competition, the substitution by key customers of lower-margin products for higher-margin products, increased competition from non-woven materials, the reduction of prices by competitors, the increase in the relative prices of Bontex's products due to foreign currency devaluations, increased pulp and latex prices, capital illiquidity, unexpected foreign tax liabilities, and decreases in the Company's borrowing base. RESULTS OF OPERATIONS The results of operations for the first six months of fiscal 2001 reflect a slight reduction in operating losses as compared to the first six months last year. During the first six months, the Company generated a consolidated operating loss of $433,000, and a net loss of $54,000 or $.03 per share as compared to a consolidated operating loss of $442,000, and a net loss of $650,000 or $.41 per share for the corresponding prior year period. Consolidated net sales increased $1.9 million or 10.5 percent to $19.8 million for the six months ended December 31, 2000. The Company's improved sales are a result of the Company's efforts to promote additional elastomeric cellulose insole footwear products and an overall improvement of market conditions particularly in Asia. Additionally, the Company has also improved its sales of existing composite insole products. If foreign currency exchange rates had remained unchanged from the corresponding period last year, net sales would have been almost $21.8 million, or approximately $2 million higher for the six months ended December 31, 2000. The decrease in net loss for the six months ended December 31, 2000 can be attributed to a gain of $803,000 from the sale of property during the second quarter. Net loss for the six months excluding the effects of this non-recurring item would have been a net loss of $641,000. During the second quarter, consolidated net sales increased $814,000 or 8.2 percent to $10.8 million. Sales increases were mainly the result of marketing efforts with certain customers, as well as increases in sales to Asia and other markets. During the three months ended December 31, 2000, consolidated operating losses were $175,000, as compared to a $49,000 profit for the same period last year. The deteriorating operating results reflect increased raw material costs and competitive selling prices in the Company's markets. Seasonality generally exists in that the first half of each fiscal year is typically lower in volume than the second half, which is largely due to customer's purchasing cycles, scheduled vacations, shutdowns, and holidays. Gross profit as a percentage of net sales (i.e., Gross Margin) for the first six months of fiscal 2001 decreased compared to the same period last year from 25.5 to 23.4 percent. This decrease in profit margins is primarily attributable to competitive pricing pressures, and higher raw material costs, which resulted in a negative impact on profit margins that were partially offset by the overall increase in sales volume. The market price of pulp has increased over the past twelve months and may continue to increase during fiscal year 2001. The Company has delayed the impact of certain of the pulp cost increases through agreements with suppliers for purchasing pulp for fiscal year 2001. Additionally, management has announced a price increase for our finished products that is expected to be fully implemented during calendar year 2001. It is difficult to predict future raw material costs and future selling prices, and there can be no assurance that raw material prices will not have an adverse impact on the Company's operations or competitive position. 8 Compared to the same period last year, Selling, General & Administrative (SG&A) expenses remained approximately the same and decreased as a percent of net sales from 28.0 percent to 25.6 percent. The decreased SG&A percentage is mainly due to sales increasing at a higher rate than costs, reflecting the benefit from our marketing efforts and cost control measures. Interest expense increased $49,000 for the six months ended December 31, 2000, as compared to the same period last year due to increased short-term borrowings. The increase in short-term borrowings reflects the financing of higher inventories and the decrease in payables. Included in Other Income is a gain of $803,000 from the sale of Bontex Inc.'s warehouse facility in Newark, New Jersey. The New Jersey Institute of Technology purchased the facility for $863,000. The Company's net book value in the property was approximately $60,000. Other comprehensive loss consists of foreign currency translation adjustment, totaled $106,000 for the six months ended December 31, 2000 and is primarily the result of the weaker Euro verses the US Dollar since June 30, 2000. FINANCIAL CONDITION Consolidated stockholders' equity decreased $233,000 from June 30, 2000, and totaled $8.8 million at the end of December 2000. Financial ratios at December 31, 2000, generally decreased from June 30, 2000, because of the negative operating results. The fluctuation in foreign currency exchange rates resulted in a translation decrease of $540,000 in consolidated total assets as compared to June 30, 2000. Trade accounts receivables decreased by $854,000 to $11.3 million, primarily due to fluctuations in foreign currency exchange rates. The $608,000 increase in inventories to $6.1 million mainly corresponds to a increase in finished goods at the Company's subsidiary's Bontex Mexico and Bontex Hong Kong to support higher sales volume. Other current assets increased $245,000 to $365,000 from June 30, 2000, primarily due to normal unamortized prepaid expenses for fiscal year 2001. Net property, plant and equipment (PP&E) decreased from $10.7 to $10.3 million primarily because of normal depreciation and amortization. During fiscal year 2000, the Belgian tax authority completed an examination of the tax returns for Bontex, S.A., the Company's Belgian subsidiary, for 1997, 1998 and 1999 and extended the tax examination to 1995 and 1996 based on certain items. At December 31, 2000, the examination file had not yet been closed, and the Company's best estimate of the most likely amount payable for the foregoing tax matters is $239,000, and accordingly, a provision for this amount had been accrued at June 30, 2000. The Company's actual liability pursuant to the foregoing examination may exceed $239,000 and such excess liability could adversely affect the Company's financial condition. For further information concerning this tax examination, refer to Management's Discussion and Analysis included in the Company's Annual Report on Form 10-K for the year ended June 30, 2000. Accounts payable, accrued expenses and short-term borrowings increased $349,000, which primarily corresponds to an increase in inventories. Cash received from customers for the six months ended December 31, 2000, increased over the corresponding prior year period due to increased sales activity and reduction of trade accounts receivable. Likewise, and to a greater degree, cash paid to suppliers and employees increased for the current period over last year's corresponding period because of the related sales activity and increased costs for raw material and energy related goods and services, resulting in a negative cash flow from operations for the current period. 9 As of December 31, 2000, Bontex USA was in compliance with all loan covenants of its secured debt agreement, under which certain current and noncurrent assets were pledged as collateral. FINANCIAL INSTRUMENTS The Company uses various financial instruments in the normal course of business. By their nature, all such instruments involve risk, and the Company's maximum potential loss may exceed amounts recorded in the balance sheet. As is customary for these types of instruments, the Company does not require collateral or other security from other parties to these instruments. However, because the Company manages exposure to credit risk through credit approvals, credit limits and monitoring procedures, the Company believes that reserves for losses are adequate. The Company has periodically used derivative instruments for the purpose of hedging commodity and interest rate exposures. As a policy, the Company does not engage in speculative transactions, nor does the Company hold or issue financial instruments for trading purposes. REFOCUSING Bontex continues to focus on developing several new innovative products for footwear and non-footwear applications. The Company has a strategy to locate new technologies and bring them to the marketplace, but it is not possible to predict with a high level of assurance their level of sales potential or profitability at this time. No material sales have been generated yet for these new technologies and products. RECENT ACCOUNTING PRONOUNCEMENTS Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities," was effective for periods beginning after June 15, 2000. This statement requires that the Company recognize all derivatives as either assets or liabilities in the balance sheet, and measure those instruments at fair value. At December 30, 2000, the Company did not have any derivative instruments or hedging. Because the Company has used in the past and continues to consider in the future the use of derivative instruments and hedging activities this statement could have an impact on the Company's future financial statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to certain risks related to interest rates, currency and commodity positions. Market risk is defined as the risk of loss arising from adverse changes in market rates and prices. The following disclosures provide certain forward-looking data concerning potential exposures to market risk. When deemed appropriate, the Company's general policy is to fix rates and prices at levels considered favorable. There is no expected material foreign exchange risk for the Company's debt, as these amounts are denominated in the local operating currencies of the respective operations. The table below provides information about the Company's financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates Financial Instruments held for other than trading purposes at December 31, 2000 (dollars in thousands): 10
EXPECTED MATURITY DATE - ---------------------- There- Estimated 2001 2002 2003 2004 2005 after Total Fair Value LIABILITIES Long-term debt Fixed Rate $ 231 $ 462 $ 462 $ 447 $ 225 - $ 1,827 $ 1,595 Average interest rate 4.97% 4.97% 4.97% 4.97% 5.27% - 5.02% Rate Variable Rate $ 100 $ 200 $ 200 $ 200 $ 117 - $ 817 $ (817) Average Interest Rate 10.5% 10.5% 10.5% 10.5% 10.5% - 10.5%
Approximately $9.7 million of variable rate debt is not covered by interest rate swaps and is subject to the risk of interest rate changes. The market risk sensitivity analysis above does not fully reflect the potential net market risk exposure, because other market risk exposures may exist in other transactions. 11 PART II. OTHER INFORMATION BONTEX, INC. FORM 10-Q FOR THE SIX MONTHS ENDED DECEMBER 31, 2000 Item 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Shareholders was held on November 2, 2000. The matter voted upon at the meeting was as follows: The election of James C. Kostelni, Robert J. Weeks, Hadelin H. Mothet and William B. D'Surney as Class A directors, to serve until the 2003 Annual Meeting. All nominees for director named above were elected.
Election of Directors AUTHORITY FOR WITHHELD James C. Kostelni 1,445,434 3,459 Robert J. Weeks 1,445,434 3,459 Hadelin H. Mothet 1,445,434 3,459 William B. D'Surney 1,445,434 3,459
Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: None. (b) Reports on Form 8-K: A Form 8-K dated December 29, 2000, reporting under Items 2 and 7 thereof the sale of property in Newark, New Jersey, was filed on January 9, 2001. 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. BONTEX, INC. (Registrant) February 13, 2001 /s/James C. Kostelni - -------------------------- ----------------------------------------- (Date) James C. Kostelni Chairman of the Board and President February 13, 2001 /s/Charles W. J. Kostelni - -------------------------- --------------------------------------- (Date) Charles W. J. Kostelni Corporate Controller and Secretary 13 -----END PRIVACY-ENHANCED MESSAGE-----