-----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, CgOXKC+ajdFmbs3slCwAbaI7jWFwqftSmDzZb9Z6bYCQn70tNqKPszee8mBQaXzj tHRgYfPuiyjnwAEVHkNBaQ== 0000914384-03-000033.txt : 20031112 0000914384-03-000033.hdr.sgml : 20031111 20031112081833 ACCESSION NUMBER: 0000914384-03-000033 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031110 ITEM INFORMATION: FILED AS OF DATE: 20031112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAN RIVER INC /GA/ CENTRAL INDEX KEY: 0000914384 STANDARD INDUSTRIAL CLASSIFICATION: TEXTILE MILL PRODUCTS [2200] IRS NUMBER: 581854637 STATE OF INCORPORATION: GA FISCAL YEAR END: 0129 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13421 FILM NUMBER: 03990594 BUSINESS ADDRESS: STREET 1: 261 MEMORIAL DRIVE CITY: DANVILLE STATE: VA ZIP: 24543 BUSINESS PHONE: 4347997000 8-K 1 f8k11123.txt 1 - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________ Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 10, 2003 DAN RIVER INC. (Exact name of registrant as specified in its charter) Commission file number 1-13421 GEORGIA 58-1854637 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2291 Memorial Drive 24541 Danville, Virginia (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (434) 799-7000 - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- 2 Item 12. Results of Operations and Financial Condition. ---------------------------------------------- On November 10, 2003, we filed a news release concerning our results for the fiscal quarter and nine months ended September 27, 2003. The text of the news release is attached as an exhibit to this Report on Form 8-K. 3 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 hereunto duly authorized. DAN RIVER INC. (Registrant) Date: November 10, 2003 /s/ Harry L. Goodrich --------------------------------- Harry L. Goodrich Vice President EX-99 3 e9911123.txt 1 EXHIBIT 99 Danville, Virginia, November 10, 2003. Dan River Inc. (NYSE: DRF) today reported results for the third fiscal quarter and nine months ended September 27, 2003. For the third quarter of fiscal 2003, the Company reported a net loss of $103.5 million, or $4.70 per diluted share. As previously announced, this loss includes a non-cash write-down of $91.7 million related to goodwill impairment as a result of recent operating performance. The loss in the third quarter of fiscal 2003 compared to net income of $4.7 million, or $0.21 per diluted share, for the third quarter of fiscal 2002. Net sales for the third quarter of fiscal 2003 were $103.7 million, down $43.7 million or 29.6% from $147.4 million for the third quarter of fiscal 2002. Net sales of Dan River's home fashions products were $76.4 million, down $29.5 million or 27.8% compared to the same quarter of fiscal 2002. Net sales of apparel fabrics were $20.5 million, down $10.7 million or 34.3%. Net sales of engineered products were $6.8 million, down $3.5 million or 34.0%. "Our third quarter sales were very disappointing," stated Joseph L. Lanier, Jr., Chairman and Chief Executive Officer. "We believe this reflects continuing adjustments in customer inventory levels during this period. The softness we experienced in home fashions occurred in all retail channels and across all price points and products." The Company reported a net loss of $120.2 million, or $5.47 per diluted share, for the nine months ending September 27, 2003. Included in the year to date performance, in addition to the write-down of goodwill explained above, was a $12.2 million pre-tax charge, primarily non-cash, related to closing two manufacturing facilities in the second quarter of fiscal 2003. Also included in these results are other expense of $1.3 million related to the write-off of unamortized costs pertaining to financings which were prepaid in full during the second quarter of fiscal 2003, and $1.0 million in increased interest expense due to a one-month period during the second fiscal quarter when both the Company's 1993 subordinated notes and its recently issued 12-3/4% notes were outstanding. This compares to net income of $3.2 million, or $0.15 per diluted share, for the nine months ended September 28, 2002, before the effect of an accounting change related to the write-down of goodwill under SFAS No. 142, "Impairment of Goodwill and Intangible Assets." The nine months results for fiscal 2002 include an increase in income tax expense of $2.8 million, attributable to the tax law changes associated with the Job Creation and Worker Assistance Act of 2002, and $1.4 million in bad debt expense related to the January 2002 Chapter 11 filing of Kmart Corporation. For the first nine months of fiscal 2003, the Company's net sales were $367.4 million, down $92.3 million or 20.1% from $459.8 million for the first nine months of fiscal 2002. Net sales of Dan River's home fashions products were $262.2 million, down $66.8 million or 20.3% compared to the first nine months of fiscal 2002. Net sales of apparel fabrics were $79.7 million, down $20.5 million or 20.5%. Net sales of engineered products were $25.6 million, down $5.0 million or 16.3% compared to the first nine months of fiscal 2002. 2 Mr. Lanier stated, "As we have previously announced, the reduction in sales activity has resulted in certain actions being taken by the Company to offset the shortfall and to improve profitability. We have reduced home fashions capacities by closing our Greenville and Fort Valley facilities as announced in the second fiscal quarter. A salary freeze has been in place since May of this year, and certain hourly wage increases have been delayed. A reduction of 80 managerial and administrative positions was announced in August. Planned capital expenditures have been reduced to $13 million for fiscal 2003. "Additionally, we announced today that we are going to close our Sevierville, Tennessee apparel fabrics weaving facility and our Camellia home fashions distribution center in Juliette, Georgia over the next 60 to 90 days. Our apparel weaving will be consolidated into our Danville weaving facilities, and the Camellia operations will be consolidated into our other home fashions distribution facilities. Service to our customers is not expected to be affected by these actions. As a result of these closures, we expect to take a charge of up to $17 million in the fourth quarter, most of which will be non-cash. The charge includes a write-down of home fashions equipment from our closed Greenville plant that we originally planned to relocate in Danville. Instead, apparel looms from Sevierville will be relocated in the space we intended to use for the equipment from Greenville. To the extent we need additional home fashions greige cloth we intend to source it externally. The anticipated annual savings from the Sevierville and Juliette closures are expected to be in the range of $6 to $7 million. "In summary, the actions we have taken since May are expected to save the Company approximately $18 million per year when the savings are fully realized. The full benefits of these actions will not begin to be reflected in our income statement until fiscal 2004. "As we look to the fourth quarter of fiscal 2003, we are projecting sales to be at levels similar to the third quarter," Mr. Lanier continued. "In order to keep inventories in line, we have scheduled production downtime for several weeks during the fourth fiscal quarter. These curtailment costs will significantly impact our operating results in the fourth quarter. Although we expect to report a net loss in the fourth fiscal quarter, based on current information we believe that we will have sufficient liquidity under our revolving line of credit to provide for our operating and debt service requirements in the fourth fiscal quarter." On October 14, the Company announced that it had received a waiver from its senior lenders in respect of the Company's violation of its maximum leverage ratio covenant for the third fiscal quarter. As a result of the waiver, the Company is currently in compliance with the terms of its senior secured credit facility. In connection with the waiver, additional covenants were established requiring minimum levels of excess availability under the Company's revolving credit facility and monthly operating EBITDA (as defined in the credit facility) during the fourth fiscal quarter. These covenants are set forth in an amendment to the Company's credit facility which was filed on October 14, 2003 as an exhibit to its Current Report on Form 8-K. 3 As it is probable that the Company will not meet the maximum leverage ratio and the minimum fixed charge ratio covenants at the end of the fourth quarter, the Company is required to report its senior secured debt as long- term debt due currently. Additionally, all senior debt which would be subject to cross acceleration in the event the senior secured lenders elected to accelerate has been reported as current, despite the fact that no default has occurred with respect to this debt, which consists primarily of the 12-3/4% senior notes. Mr. Lanier said, "This has been a very difficult year for our Company. However, our outlook for the first quarter of fiscal 2004 is more optimistic across all of our divisions. Customers have indicated strong support for our recently introduced home fashions products that will begin to ship during the first quarter of fiscal 2004. Our apparel fabrics division has also had success in new product placements that will ship in the first quarter of fiscal 2004. With the announced cost savings measures fully implemented, we expect to see the benefit of those savings contribute directly to the bottom line in fiscal 2004." Note: This news release contains forward-looking statements under applicable securities laws. The Company believes its forward-looking statements are reasonable; however, undue reliance should not be placed on such statements, which are based on current expectations. Dan River's financial condition and results of operations could be materially and adversely affected by numerous market and industry factors outside of its control. In particular, if demand for the Company's products does not improve, the Company's results of operations and financial condition will be materially and adversely affected. Additional risks associated with Dan River's business are detailed in its annual report on Form 10-K filed with the SEC on February 21, 2003. 4 The following are the financial highlights: UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (OOO's EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended ------------------- ----------------- Sept. 27, Sept. 28, Sept. 27, Sept. 28, 2003 2002 2003 2002 ----- ------ ----- ----- Net Sales $ 103,728 $ 147,411 $ 367,448 $ 459,771 Cost of Sales 94,936 116,470 316,250 377,010 --------- ---------- ---------- --------- Gross Profit 8,792 30,941 51,198 82,761 S, G and A 13,840 16,441 47,095 51,406 Impairment of Goodwill 91,701 -- 91,701 -- Other Operating Costs, Net 800 -- 12,549 (310) --------- --------- --------- --------- Operating Income (Loss) (97,549) 14,500 (100,147) 31,665 Other Income (Expense) 1,144 (103) 949 105 Interest Expense 7,130 6,450 20,757 20,978 --------- ---------- --------- --------- Income (Loss) Before Income Taxes and Cumulative Effect (103,535) of Accounting Change 7,947 (119,955) 10,792 Provision for Income Taxes -- 3,248 235 7,570 --------- --------- --------- --------- Income (Loss) Before Cumulative Effect of Accounting Change (103,535) 4,699 (120,190) 3,222 Cumulative Effect of Accounting Change, Net of Tax -- -- -- (20,701) -------- --------- --------- -------- Net Income (Loss) $(103,535) $ 4,699 $ (120,190) $ (17,479) ========= ========== ========== =========
5 UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT (OOO's EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended ------------------ ----------------- Sept. 27, Sept. 28, Sept. 27, Sept. 28, 2003 2002 2003 2002 ------ ------ ------ ----- Earnings (Loss) Per Share - Basic: Income (Loss) Before Cumulative Effect of Accounting Change $ (4.70) $ 0.22 $ (5.47) $ 0.15 Cumulative Effect of Accounting Change -- -- -- (0.95) --------- ---------- --------- --------- Net Income (Loss) $ (4.70) $ 0.22 $ (5.47) $ (0.80) ========= ========== ========= ========= Earnings (Loss) Per Share - Diluted: Income (Loss) Before Cumulative Effect of Accounting Change $ (4.70) $ 0.21 $ (5.47) $ 0.15 Cumulative Effect of Accounting Change - - - (0.94) --------- ---------- --------- --------- Net Income (Loss) $ (4.70) $ 0.21 $ (5.47) $ (0.79) ========= ========== ========= ========= Wtd. Avg. No. Shares: Basic 22,016 21,840 21,985 21,823 Diluted 22,016 22,299 21,985 21,139
6 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (000's)
September 27, December 28, 2003 2002 --------- ----------- Assets: - ------ Cash $ 2,147 $ 2,832 Accounts Receivable 50,994 71,292 Inventories 159,789 151,586 Other Current Assets 21,750 19,667 ------------- ------------ Total Current Assets 234,680 245,377 Property, Plant & Equipment, Net 213,123 248,175 Goodwill, Net -- 91,701 Other Assets 18,676 10,269 ------------- ------------ Total Assets $ 466,479 $ 595,522 ============= ============ Liabilities and Shareholders' Equity: - ------------------------------------ Current Maturities of Long-Term Debt $ 246,556 $ 241,231 Accounts Payable & Accrued Expenses 52,060 58,439 ------------- ------------ Total Current Liabilities 298,616 299,670 Long-Term Debt 6,872 10,792 Deferred Income Taxes and Other Liabilities 51,982 56,023 Shareholders' Equity 109,009 229,037 ------------- ------------ Total Liabilities & Shareholders' $ 466,479 $ 595,522 Equity ============= ============
7 UNAUDITED SEGMENT INFORMATION (000's)
Three Months Ended Nine Months Ended ------------------ ----------------- Sept. 27, Sept. 28, Sept. 27, Sept. 28, 2003 2002 2003 2002 ---- ---- ---- ---- Net Sales: Home Fashions $ 76,389 $105,857 $ 262,220 $ 329,059 Apparel Fabrics 20,549 31,272 79,652 100,154 Engineered Products 6,790 10,282 25,576 30,558 --------- -------- --------- --------- Consolidated Net Sales $ 103,728 $147,411 $ 367,448 $ 459,771 ========= ======== ========= ========= Operating Income (Loss): Home Fashions $ (142) $ 13,632 $ 12,169 $ 31,157 Apparel Fabrics (3,242) 1,681 (4,391) 1,427 Engineered Products (1,029) (531) (2,497) (1,141) Corporate Items Not Allocated to Segments: Impairment of Goodwill (91,701) -- (91,701) -- Other Operating Costs, Net (800) -- (12,549) 310 Other (635) (282) (1,178) (88) --------- -------- --------- -------- Consolidated Operating Income (Loss) $ (97,549) $ 14,500 $(100,147) $ 31,665 ========= ======== ========= ==========
8 UNAUDITED OTHER FINANCIAL DATA (000's)
Three Months Ended Nine Months Ended ------------------ ---------------- Sept. 27, Sept. 28, Sept. 27, Sept. 28, 2003 2002 2003 2002 ---- ---- ---- ---- Depreciation & Amortization of Property, Plant & $ 8,795 $ 9,520 $ 27,674 $ 28,339 Equipment Capital Expenditures in $ 2,289 $ 3,250 $ 9,856 $ 8,587 Cash
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