-----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, CVM3gbCktfTBCJMXCCB+OhxocpDyIpPF2nV5odC+10xyyde+tIm/PMJdCgU/0eDk 52Ww0SkktsAOldhXnB8H8w== 0000897101-97-000589.txt : 19970520 0000897101-97-000589.hdr.sgml : 19970520 ACCESSION NUMBER: 0000897101-97-000589 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAKOTAH INC CENTRAL INDEX KEY: 0000859944 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED TEXTILE PRODUCTS [2390] IRS NUMBER: 460339860 STATE OF INCORPORATION: SD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-23604 FILM NUMBER: 97608072 BUSINESS ADDRESS: STREET 1: ONE N PARK LN CITY: WEBSTER STATE: SD ZIP: 57274-0120 BUSINESS PHONE: 6053454646 MAIL ADDRESS: STREET 1: ONE NORTH PARK LANE CITY: WEBSTER STATE: SD ZIP: 57274-0120 10-Q 1 UNITED STATES SECURITIES & EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q Quarterly report pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1997 Commission File Number 0-23604 DAKOTAH, INCORPORATED (Exact Name of Registrant as Specified in Its Charter) South Dakota 46-0339860 (State or Other Jurisdiction of (I.R.S. Employer Incorporation of Organization) Identification Number) One North Park Lane Webster, SD 57274 (Address of Principal Executive Offices, Zip Code) Registrant's Telephone Number, Including Zip Code: (605) 345-4646 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: ___ Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Common stock, $.01 par value, 3,499,755 shares outstanding as of May 1, 1997. DAKOTAH, INCORPORATED INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets (Unaudited): March 31, 1997 and December 31,1996 Statements of Operations (Unaudited): Three month periods ended March 31, 1997, and March 31, 1996 Statements of Cash Flows (Unaudited): Three month periods ended March 31, 1997, and March 31, 1996 Notes to Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION Items 1 through 5 have been omitted since items are inapplicable or answer is negative Item 6. Exhibits and Reports on Form 8-K (a.) Exhibits 10.1 Eighth Amendment dated March 10, 1997 to Amended and Restated Credit and Security Agreement with Norwest Business Credit, Inc. 27.1 Financial Data Schedule (b.) Reports on Form 8-K None ITEM 1: FINANCIAL STATEMENTS
DAKOTAH, INCORPORATED BALANCE SHEETS (Unaudited) March 31, December 31, ASSETS 1997 1996 ----------- ----------- CURRENT ASSETS Cash and cash equivalents $ 8,231 $ 2,690 Accounts receivable less allowance for doubtful accounts of $425,000 in 1997 and $324,000 in 1996 4,595,788 7,538,724 Inventories 14,017,824 9,555,897 Prepaid expenses and other 749,747 735,929 Income taxes receivable 114,988 - Deferred income taxes 496,000 496,000 ----------- ----------- Total current assets 19,982,578 18,329,240 PROPERTY, PLANT AND EQUIPMENT - AT COST Land 36,000 36,000 Buildings and improvements 2,393,816 2,334,516 Leasehold improvements 122,362 123,731 Machinery and equipment 3,120,101 3,009,792 Office equipment, furniture and fixtures and other 1,073,294 958,758 ----------- ----------- 6,745,573 6,462,797 Less accumulated depreciation & amortization 2,721,513 2,555,767 ----------- ----------- 4,024,060 3,907,030 OTHER ASSETS Deferred income taxes 185,000 185,000 Other 624,797 508,690 ----------- ----------- 809,797 693,690 ----------- ----------- $24,816,435 $22,929,960 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable to bank $ 6,249,097 $ 7,123,000 Current maturities of long-term obligations, including $268,300 in 1997 and $332,139 in 1996 to related parties 439,320 482,835 Accounts payable 5,000,762 2,134,845 Accrued liabilities Compensation and related benefits 672,573 925,739 Other 771,028 716,217 Income taxes payable - 187,079 ----------- ----------- Total current liabilities 13,132,780 11,569,715 LONG-TERM OBLIGATIONS, less current maturities, including $129,162 in 1996 to related parties 1,602,247 912,585 STOCKHOLDERS' EQUITY Common stock, par value $.01; 10,000,000 shares authorized; issued & outstanding shares 3,499,755 34,998 34,998 Additional contributed capital 6,929,156 6,904,156 Retained earnings 3,117,254 3,508,506 ----------- ----------- 10,081,408 10,447,660 ----------- ----------- $24,816,435 $22,929,960 =========== ===========
The accompanying notes are an integral part of these Financial Statements. DAKOTAH, INCORPORATED STATEMENTS OF OPERATIONS (Unaudited) For the three months ended March 31, 1997 1996 ----------- ----------- Net sales $ 6,681,849 $ 7,404,824 Cost of goods sold 4,957,173 5,440,591 ----------- ----------- Gross profit 1,724,676 1,964,233 Operating expenses Selling 1,183,278 1,094,198 General and administrative 969,153 774,926 ----------- ----------- 2,152,431 1,869,124 ----------- ----------- Operating profit (loss) (427,755) 95,109 Other income (expense) Interest (143,497) (78,878) Other -- (13,134) ----------- ----------- (143,497) (92,012) ----------- ----------- Earnings (loss) before income taxes (571,252) 3,097 Income tax expense (benefit) (180,000) 1,115 ----------- ----------- NET EARNINGS (LOSS) $ (391,252) $ 1,982 =========== =========== Net earnings (loss) per share $ (0.11) $ -- =========== =========== Weighted average common shares outstanding 3,499,755 3,499,755 =========== =========== The accompanying notes are an integral part of these Financial Statements. DAKOTAH, INCORPORATED STATEMENTS OF CASH FLOWS (Unaudited)
For the three months ended March 31, 1997 1996 ----------- ----------- Cash flows from operating activities: Net earnings (loss) $ (391,252) $ 1,982 Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities Depreciation and amortization 165,746 162,634 Compensation to outside consultant 25,000 -- Changes in assets and liabilities: Accounts receivable 2,942,936 1,437,654 Inventories (4,461,927) (1,544,940) Prepaid expenses and other (13,818) (503,953) Income taxes receivable (114,988) Accounts payable 2,865,917 1,289,044 Accrued liabilities and other (198,355) (41,405) Income taxes payable (187,079) -- ----------- ----------- Total adjustments 1,023,432 799,034 ----------- ----------- Net cash provided by operating activities 632,180 801,016 Cash flows from investing activities: Capital expenditures (282,776) (476,777) Other (116,107) -- ----------- ----------- Net cash used in investing activities (398,883) (476,777) Cash flows from financing activities: Net payments under line-of-credit (873,903) (816,914) Proceeds from issuance of long-term obligations 880,000 300,000 Principal payments on long-term obligations (233,853) (274,329) ----------- ----------- Net cash used in financing activities (227,756) (791,243) ----------- ----------- Net increase (decrease) in cash and cash equivalents 5,541 (467,004) Cash and cash equivalents at beginning of period 2,690 477,330 ----------- ----------- Cash and cash equivalents at end of period $ 8,231 $ 10,326 =========== =========== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 127,415 $ 63,128 Income taxes 120,000 -- The accompanying notes are an integral part of these Financial Statements.
DAKOTAH, INCORPORATED NOTES TO FINANCIAL STATEMENTS NOTE A: BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions of Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the unaudited condensed financial statements contain all adjustments consisting of normal recurring accruals necessary to present fairly the financial position of the Company as of March 31, 1997 and the results of operations and cash flows for the three month periods ended March 31, 1997 and 1996. These results are not necessarily indicative of results which may be expected for the year as a whole. The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE B: INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following: March 31, 1997 December 31, 1996 -------------- ----------------- Raw Materials $7,375,928 $5,722,944 Work-In-Process 2,393,490 1,667,023 Finished Goods 4,248,406 2,165,930 ---------- ---------- $14,017,824 $9,555,897 ========== ========== NOTE C: NEW ACCOUNTING PRONOUNCEMENT The FASB has issued Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE, which is effective for financial statements issued after December 15, 1997. Early adoption of the new standard is not permitted. The new standard eliminates primary and fully diluted earnings per share and requires presentation of basic and diluted earnings per share together with disclosure of how the per share amounts were computed. Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The effect of adopting this new standard has not been determined. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: The following table sets forth the percentage relationship to net sales of certain items in the Company's statements of operations for the three month periods ended March 31, 1997 and 1996. Percentage of Net Sales for the three month period ended March 31, 1997 1996 --------------------- Net Sales 100.0% 100.0% Gross Profit 25.8 26.5 Selling Expenses 17.7 14.8 General & Administrative 14.5 10.4 Operating Profit (Loss) (6.4) 1.3 Interest Expense 2.1 1.1 Earnings Before Income Taxes (8.5) 0.0 Net Earnings (Loss) (5.9) 0.0 NET SALES decreased from $7,405,000 in the first quarter of 1996 to $6,682,000 in the first quarter of 1997. The decrease in sales is primarily related to the negative effect on production time as a result of (1) the Company's consolidation of its primary warehouse and shipping and receiving facility to the main Webster, SD manufacturing facility, (2) the move of the Webster, SD pillow finishing manufacturing equipment to the main Webster, SD manufacturing facility, (3) the comprehensive reconfiguration of the main Webster, SD manufacturing facility and (4) the effect of the severe winter weather. During the first quarter of 1997, net sales of the Company's pillow, table linens, and bedcovering and accessories categories decreased approximately $1,800,000 from the first quarter of 1996, primarily related to a decrease in units produced as a result of the effects of the reconfiguration of the Webster, SD operations,. This decrease was partially offset by an increase in sales of Polarfleece(R) throws and blankets. GROSS MARGIN PERCENTAGES decreased from 26.5% in the first quarter of 1996 to 25.8% in the first quarter of 1997. Gross margin percentages were adversely affected by lost production time and an increase of off-standard and indirect labor and other related costs associated with the Company's move of its Webster, SD warehouse and Webster, SD pillow finishing manufacturing and the Webster, SD plant reconfiguration. Gross margin percentages were positively affected by improved product mix. SELLING EXPENSES increased in the first quarter of 1997 as compared to the same period of 1996 due to increased salaries, advertising, and travel expenses primarily related to the Company's efforts to increase 1997 net sales, including expanding its sales distribution channels and markets. Selling expenses grew from $1,094,000 in the first quarter of 1996 to $1,183,000 in the first quarter of 1997. As a percentage of net sales, selling expenses increased to 17.7% in the first quarter of 1997 from 14.8% in the first quarter of 1996 as a result of higher selling expenses and lower sales. GENERAL AND ADMINISTRATIVE EXPENSES increased from $775,000 in the first quarter of 1996 to $969,000 in the first quarter of 1997. The increase is primarily due to an increase in design and product development salaries and related expenses, administrative and clerical salaries to support the general growth of the Company, and expenses related to the Company's planned computer software conversion. As a percentage of net sales, general and administrative expenses increased from 10.4% in the first quarter of 1996 to 14.5% in the first quarter of 1997 as a result of lower net sales and higher general and administrative expenses. INTEREST EXPENSE increased to $143,000 in the first quarter of 1997 from $79,000 in the first quarter of 1996. The increase is the result of higher first quarter average borrowings related to previous capital expenditures and the buildup of inventory to support the Company's sales in the third and fourth quarters of 1997. LIQUIDITY AND CAPITAL RESOURCES Working capital was $7.0 million as of March 31, 1997 and $6.8 million as December 31, 1996. The net cash provided by operating activities during the first quarter of 1997 was primarily used to repay net borrowings under the line-of-credit and make principal payments on long-term obligations. The net cash used in investing activities during 1996 was primarily financed from net borrowings under the Company's revolving line of credit. The net cash provided by (used in) operating and investing activities was primarily related to the increase in sales and manufacturing capacity during 1996. Accounts receivable were approximately $4,600,000 as of March 31, 1997 and $7,500,000 as of December 31, 1996. The decrease in the first quarter of 1997 was due to lower sales in the first quarter of 1997 as compared to the fourth quarter of 1996. The seasonality of the Company's sales cycle and the increase of sales volume has resulted in increased working capital requirements. In addition, the buying habits of the Company's customers indicate a trend away from substantial advance stocking orders to smaller, more frequent orders. This trend requires the Company to carry larger levels of work in process and finished goods inventories than historically maintained. Inventories were approximately $14,000,000 as of March 31, 1997 and $9,600,000 as of December 31, 1996. The increase in the first quarter of 1997 as compared to year end 1996 is primarily related to an increase of finished goods inventory of Polarfleece(R) to support the Company's planned sales in the third and fourth quarters of 1997. Accounts payable were approximately $5,001,000 as of March 31, 1997 and $2,135,000 as of December 31, 1996. The increase in the first quarter of 1997 as compared to year end 1996 is primarily related to an increase in inventory to support the Company's planned sales in the third and fourth quarters of 1997. The Company has used and expects to continue to use its revolving line of credit to meet its short-term working capital requirements. During the first quarter and in April of 1997, the Company renegotiated its credit facility, which expires August 1998 and consists of a revolving note and a term note. The amendments accommodate the Company's planned buildup of inventory, primarily Polarfleece(R) throws, to allow the Company to maximize the sales opportunities in the third and fourth quarters, optimize production capacity, and better serve the Company's customers. The total amount available under the revolving note, which is due on demand, is limited to the lesser of $9 million or a defined borrowing base of eligible accounts receivable and inventory. The term note is due on demand and requires monthly principal payments of $20,833. Advances under the revolving note, based on inventory balances, provide for monthly interest payments at 2% above the bank's prime rate (10.5% at March 31, 1997). The term note and other advances under the revolving note provide for monthly interest payments at 1.5% above the bank's prime rate (10% at March 31, 1997). The outstanding balances on the revolving note and term note were $5,603,000 and $646,000 at March 31, 1997. The outstanding balances on the revolving note and term note were $6,415,000 and $708,000 at December 31, 1996. For the quarter ended March 31, 1997, the Company's capital expenditures were $283,000. For the quarter ended March 31, 1996, the Company's capital expenditures were $477,000. The Company expects to spend an aggregate of approximately $1,000,000 in 1997 to expand capacity and to up-grade existing buildings and production equipment. In addition, the Company expects to spend between $250,000 and $400,000 to continue the upgrade and expansion of the Company's computer system. The Company is pursuing long term financing for its 1997 planned capital expenditures and for capital expenditures previously financed through its revolving line of credit. Upon termination of the officers' stock appreciation program, the Company became indebted to the Company's President and a former Executive Vice President in the aggregate amount of $1,318,000. As of March 31, 1997, the total outstanding indebtedness was approximately $268,000 compared to $461,000 at December 31, 1996. This indebtedness bears interest at 6% per annum and is payable in varying installments through January 1998. The Company believes that cash flows generated from operations and funds available as a result of its borrowing capacity will be adequate to meet its short-term working capital, projected capital expenditures and other financing needs. FORWARD LOOKING STATEMENTS Forward looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company's products, cancellation of orders, increased levels of competition for the Company, new products and technological changes, the Company's dependence upon third party suppliers, and intellectual property rights. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registered has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DAKOTAH, INCORPORATED May 15, 1997 By: /s/ TROY JONES, JR. ------------------------------------ Troy Jones, Jr. Chief Executive Officer (Principal Financial and Accounting Officer) May 15, 1997 By: /s/ GEORGE WHYTE ------------------------------------ George Whyte President and Chairman EX-10.1 2 AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT EXHIBIT 10.1 EIGHTH AMENDMENT TO AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT This Eighth Amendment, dated as of March 10, 1997, is made by and between DAKOTAH, INCORPORATED, a South Dakota corporation (the "Borrower"), and NORWEST BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender"). Recitals The Borrower and the Lender have entered into an Amended and Restated Credit and Security Agreement dated as of August 17, 1995, as amended by a First Amendment to Amended and Restated Credit and Security Agreement dated as of October 5, 1995, a Second Amendment to Amended and Restated Credit and Security Agreement dated as of November 15, 1995, a Third Amendment to Amended and Restated Credit and Security Agreement dated as of March 15, 1996, a Fourth Amendment to Amended and Restated Credit and Security Agreement dated as of June 14, 1996, a Fifth Amendment to Amended and Restated Credit and Security Agreement dated as of July 11, 1996, a Sixth Amendment to Amended and Restated Credit and Security Agreement dated as of September 11, 1996, and a Seventh Amendment to Amended and Restated Credit and Security Agreement dated as of January 17, 1997 (as so amended, the "Credit Agreement"). Capitalized terms used in these recitals have the meanings given to them in the Credit Agreement unless otherwise specified. The loan advances under the Credit Agreement are evidenced by the Borrower's Second Replacement Revolving Note dated as of July 11, 1996, in the maximum principal amount of $9,000,000 and payable to the order of the Lender, and the Borrower's demand promissory note dated as of October 5, 1995, in the maximum principal amount of $1,000,000 and payable to the order of the Lender. The Borrower has requested that the Lender, in its sole discretion, increase the Inventory Cap for a temporary period. The Lender is willing to grant the Borrower's request subject to the terms of this Eighth Amendment. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows: 1. Defined Terms. Capitalized terms used in this Eighth Amendment which are defined in the Credit Agreement shall have the same meanings as defined therein, unless otherwise defined herein. In addition, Section 1.1 of the Credit Agreement is amended by adding or amending, as the case may be, the following definitions: "'Inventory Cap' means, during the calendar months of each fiscal year described below, the amount set forth opposite such calendar month: - -------------------------- ------------------------- --------------------------- Month Amount Amount ----- ------ ------ 1997 1998 and each year ---- ------------------ thereafter - -------------------------- ------------------------- --------------------------- March $2,300,000 $1,500,000 - -------------------------- ------------------------- --------------------------- April $2,500,000 $2,500,000 - -------------------------- ------------------------- --------------------------- May $4,000,000 $4,000,000 - -------------------------- ------------------------- --------------------------- June, July and August $4,500,000 $4,500,000 - -------------------------- ------------------------- --------------------------- September, October, $4,000,000 $4,000,000 and November - -------------------------- ------------------------- --------------------------- December $2,000,000 $2,000,000 - -------------------------- ------------------------- --------------------------- "'Eighth Amendment' means that certain Eighth Amendment to Amended and Restated Credit and Security Agreement dated as of March 10, 1997." 2. No Other Changes. Except as explicitly amended by this Eighth Amendment, all of the terms and conditions of the Credit Agreement shall remain in full force and effect and shall apply to any advance or letter of credit thereunder. 3. Amendment Fee. The Borrower agrees to pay the Lender as of the date hereof a fully earned, non-refundable fee in the amount of $1,000 in consideration of the execution by the Lender of this Eighth Amendment. 4. Conditions Precedent. This Amendment shall be effective when the Lender shall have received an executed original hereof, together with each of the following, each in substance and form acceptable to the Lender in its sole discretion: (a) Consent of the Participant. (b) A Certificate of the Secretary of the Borrower certifying as to (1) the resolutions of the board of directors of the Borrower approving the execution and delivery of this Eighth Amendment, (2) the fact that the Articles of Incorporation and Bylaws of the Borrower, which were certified and delivered to the Lender pursuant to the Certificate of Authority of the Borrower's Secretary dated as of August 17, 1995 (the "Certificate of Authority") in connection with the execution and delivery of the Credit Agreement continue in full force and effect and have not been amended or otherwise modified except as set forth in the Certificate to be delivered, and (3) certifying that the officers and agents of the Borrower who have been certified to the Lender, pursuant to the Certificate of Authority, as being authorized to sign and to act on behalf of the Borrower continue to be so authorized or setting forth the sample signatures of each of the officers and agents of the Borrower authorized to execute and deliver this Eighth Amendment and all other documents, agreements and certificates on behalf of the Borrower. (c) Payment of the fee described in paragraph 3. (d) Such other matters as the Lender may require. 5. Representations and Warranties. The Borrower hereby represents and warrants to the Lender as follows: (a) The Borrower has all requisite power and authority to execute this Eighth Amendment and to perform all of its obligations hereunder, and this Eighth Amendment has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. (b) The execution, delivery and performance by the Borrower of this Eighth Amendment have been duly authorized by all necessary corporate action and do not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to the Borrower, or the articles of incorporation or by-laws of the Borrower, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which the Borrower is a party or by which it or its properties may be bound or affected. (c) All of the representations and warranties contained in Article V of the Credit Agreement are correct on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date. 6. References. All references in the Credit Agreement to "this Agreement" shall be deemed to refer to the Credit Agreement as amended hereby; and any and all references in any other Loan Document to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended hereby. 7. No Waiver. The execution of this Eighth Amendment and acceptance of any documents related hereto shall not be deemed to be a waiver of any Default or Event of Default under the Credit Agreement or breach, default or event of default under any Security Document or other document held by the Lender, whether or not known to the Lender and whether or not existing on the date of this Eighth Amendment. 8. Release. The Borrower hereby absolutely and unconditionally releases and forever discharges the Lender, and any and all parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which the Borrower has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Eighth Amendment, whether such claims, demands and causes of action are matured or unmatured. 9. Costs and Expenses. The Borrower hereby reaffirms its agreement under the Credit Agreement to pay or reimburse the Lender on demand for all costs and expenses incurred by the Lender in connection with the Credit Agreement, the Security Documents and all other documents contemplated thereby, including without limitation all reasonable fees and disbursements of legal counsel. Without limiting the generality of the foregoing, the Borrower specifically agrees to pay all fees and disbursements of counsel to the Lender for the services performed by such counsel in connection with the preparation of this Eighth Amendment and the documents and instruments incidental hereto. The Borrower hereby agrees that the Lender may, at any time or from time to time in its sole discretion and without further authorization by the Borrower, make a loan to the Borrower under the Credit Agreement, or apply the proceeds of any loan, for the purpose of paying any such fees, disbursements, costs and expenses. 10. Miscellaneous. This Eighth Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Eighth Amendment to be duly executed as of the date first written above. DAKOTAH, INCORPORATED By_______________________________________ Troy Jones, Jr. Its Chief Executive Officer NORWEST BUSINESS CREDIT, INC. By_______________________________________ Warren G. Lindman Its Assistant Vice President EX-27.1 3
5 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 8,231 0 5,020,788 425,000 14,017,824 19,982,578 6,745,573 2,721,513 24,816,435 13,132,780 1,602,247 0 0 34,998 10,046,410 24,816,435 6,681,849 6,681,849 4,957,173 4,957,173 0 42,672 143,497 (571,252) (180,000) (391,252) 0 0 0 (391,252) (.11) 0
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