-----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, V4e4bEPcNFx/97G3vCvKecRosOTx2N1u4xPRkLtf1uUiQg1KjcG0jype2M6TNeNP wpHDwTFMjR/pzW0ZLxed2A== 0000950144-97-011755.txt : 19971111 0000950144-97-011755.hdr.sgml : 19971111 ACCESSION NUMBER: 0000950144-97-011755 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970927 FILED AS OF DATE: 19971110 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPRINGS INDUSTRIES INC CENTRAL INDEX KEY: 0000093102 STANDARD INDUSTRIAL CLASSIFICATION: BROADWOVEN FABRIC MILLS, COTTON [2211] IRS NUMBER: 570252730 STATE OF INCORPORATION: SC FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05315 FILM NUMBER: 97711479 BUSINESS ADDRESS: STREET 1: 205 N WHITE ST CITY: FORT MILL STATE: SC ZIP: 29715 BUSINESS PHONE: 8035471500 MAIL ADDRESS: STREET 1: 205 NORTH WHITE STREET CITY: FORT MILL STATE: SC ZIP: 29715 FORMER COMPANY: FORMER CONFORMED NAME: SPRINGS MILLS INC DATE OF NAME CHANGE: 19820517 10-Q 1 SPRINGS INDUSTRIES, INC. FORM 10-Q 9/27/97 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM 10-Q For the Quarter Ended September 27, 1997 Commission File Number 1-5315 ----------------------- SPRINGS INDUSTRIES, INC. (Exact name of registrant as specified in its charter) SOUTH CAROLINA 57-0252730 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 205 North White Street Fort Mill, South Carolina 29715 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (803) 547-1500 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 (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes X No ----- ----- As of November 3, 1997, there were 12,890,251 shares of Class A Common Stock and 7,271,021 shares of Class B Common Stock of Springs Industries, Inc. outstanding. There are 19 pages in the sequentially numbered, manually signed original of this report. Page 1 of 19 The Index to Exhibits is on Page 14 2 TABLE OF CONTENTS TO FORM 10-Q PART I - FINANCIAL INFORMATION
ITEM PAGE - ---- ---- 1. FINANCIAL STATEMENTS 3 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 9 FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II - OTHER INFORMATION ITEM PAGE - ---- ---- 6. EXHIBITS 12 SIGNATURES 13 EXHIBIT INDEX 14
- 2 - 3 PART I ITEM 1. - FINANCIAL STATEMENTS SPRINGS INDUSTRIES, INC. Consolidated Statement of Operations and Retained Earnings (In thousands except per share data) (Unaudited)
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED ------------------------ --------------------------- SEPT. 27, SEPT. 28, SEPT. 27, SEPT. 28, 1997 1996 1997 1996 ---------- --------- ----------- ----------- OPERATIONS Net sales ........................ $ 579,236 $ 562,900 $ 1,651,176 $ 1,682,483 Cost and expenses: Cost of goods sold ............. 470,802 455,668 1,348,387 1,372,646 Selling, general and administrative expenses ...... 67,767 69,335 207,234 213,643 Restructuring and realignment expenses ......... 2,329 309 7,313 30,733 Interest expense ............... 4,615 4,492 13,841 17,864 Other (income) expense ......... (7,169) (2,024) (7,018) (45,505) --------- --------- ----------- ----------- Total ........................ 538,344 527,780 1,569,757 1,589,381 --------- --------- ----------- ----------- Income before income taxes and extraordinary item ............. 40,892 35,120 81,419 93,102 Income tax provision ............. 13,493 12,503 27,682 15,195 --------- --------- ----------- ----------- Income before extraordinary item 27,399 22,617 53,737 77,907 Extraordinary item: Loss on extinguishment of debt, net of income tax benefit of $2,176 ....................... -- -- -- 3,552 --------- --------- ----------- ----------- Net income ..................... $ 27,399 $ 22,617 $ 53,737 $ 74,355 ========= ========= =========== =========== Per share: Income before extraordinary item $ 1.34 $ 1.11 $ 2.62 $ 3.81 Extraordinary loss from extinguishment of debt ....... -- -- -- (.17) --------- --------- ----------- ----------- Net income ..................... $ 1.34 $ 1.11 $ 2.62 $ 3.64 ========= ========= =========== =========== Cash dividends declared: Class A shares ................. $ .33 $ .33 $ .99 $ .99 ========= ========= =========== =========== Class B shares ................. $ .30 $ .30 $ .90 $ .90 ========= ========= =========== =========== Weighted average shares of common stock ................... 20,537 20,453 =========== =========== RETAINED EARNINGS Retained earnings at beginning of period ...................... $ 689,000 $ 655,239 $ 675,533 $ 616,347 Net income ....................... 27,399 22,617 53,737 74,355 Cash dividends declared .......... (6,438) (6,425) (19,309) (19,271) --------- --------- ----------- ----------- Retained earnings at end of period ......................... $ 709,961 $ 671,431 $ 709,961 $ 671,431 ========= ========= =========== ===========
See Notes to Condensed Consolidated Financial Statements. - 3 - 4 SPRINGS INDUSTRIES, INC. Condensed Consolidated Balance Sheet (In thousands except share data) (Unaudited)
SEPT. 27, DECEMBER 28, 1997 1996 ----------- ----------- ASSETS Current assets: Cash and cash equivalents ............... $ 680 $ 30,719 Accounts receivable ..................... 363,687 350,830 Inventories ............................. 401,304 370,896 Other ................................... 42,151 37,177 ----------- ----------- Total current assets .................. 807,822 789,622 ----------- ----------- Property, plant and equipment ............. 1,350,435 1,320,400 Accumulated depreciation ................ (815,806) (785,836) ----------- ----------- Property, plant and equipment, net .... 534,629 534,564 ----------- ----------- Other assets .............................. 83,462 73,770 ----------- ----------- Total ................................. $ 1,425,913 $ 1,397,956 =========== =========== LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Short-term borrowings ................... $ 18,850 $ -- Current maturities of long-term debt .... 9,626 6,921 Accounts payable ........................ 75,853 103,841 Other accrued liabilities ............... 147,493 141,727 ----------- ----------- Total current liabilities ............. 251,822 252,489 ----------- ----------- Noncurrent liabilities: Long-term debt .......................... 168,835 177,640 Accrued benefits and deferred compensation ........................... 168,182 160,535 Deferred income taxes and other deferred credits ................................ 20,589 26,513 ----------- ----------- Total noncurrent liabilities .......... 357,606 364,688 ----------- ----------- Shareowners' equity: Class A common stock- $.25 par value (12,991,492 and 12,746,374 shares issued in 1997 and 1996, respectively) 3,248 3,187 Class B common stock- $.25 par value (7,271,021 and 7,508,579 shares issued in 1997 and 1996, respectively) ....... 1,818 1,877 Additional paid-in capital .............. 110,769 110,352 Retained earnings ....................... 709,961 675,533 Cost of Class A shares in treasury (101,477 and 106,739 shares in 1997 and 1996, respectively) ....... (2,283) (2,378) Currency translation adjustment and other (7,028) (7,792) ----------- ----------- Total shareowners' equity ............. 816,485 780,779 ----------- ----------- Total ................................. $ 1,425,913 $ 1,397,956 =========== ===========
See Notes to Condensed Consolidated Financial Statements. - 4 - 5 SPRINGS INDUSTRIES, INC. Condensed Consolidated Statement of Cash Flows (In thousands) (Unaudited)
THIRTY-NINE WEEKS ENDED ----------------------- SEPT. 27, SEPT. 28, 1997 1996 --------- --------- Operating activities: Net income ................................... $ 53,737 $ 74,355 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ............... 65,794 70,966 Gain on sale of businesses and other investments ................................ (6,587) (49,896) Provision for restructuring costs ........... -- 30,375 (Gain) loss on disposal of property, plant and equipment .............................. (695) 5,997 Extraordinary loss on extinguishment of debt ....................................... -- 5,728 Changes in operating assets and liabilities, net of effects of business acquisitions and sale of businesses ......................... (56,974) (57,589) Other, net .................................. (2,834) (808) -------- --------- Net cash provided by operating activities 52,441 79,128 -------- --------- Investing activities: Purchases of property, plant and equipment .................................. (64,943) (50,669) Business acquisitions ........................ (6,429) (1,900) Notes receivable funded ...................... (14,000) -- Principal collected on notes receivable ...... 2,638 -- Proceeds from sales of businesses and other assets ..................................... 1,693 194,822 Proceeds from sale of investment ............. 12,017 -- -------- --------- Net cash provided (used) by investing activities .............................. (69,024) 142,253 -------- --------- Financing activities: Proceeds (repayments) of short-term borrowings net ............................. 18,850 (21,900) Proceeds from long-term borrowings ........... -- 2,261 Repayment of long-term debt .................. (6,573) (161,336) Cash dividends paid .......................... (25,733) (25,688) -------- --------- Net cash used by financing activities .... (13,456) (206,663) -------- --------- Increase (decrease) in cash and cash equivalents ................................... $(30,039) $ 14,718 ======== =========
See Notes to Condensed Consolidated Financial Statements. - 5 - 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Significant Accounting Policies: The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements presented in the Springs Industries, Inc. ("Springs" or the "Company") 1996 Annual Report on Form 10-K. In the opinion of the management of Springs, these unaudited condensed consolidated financial statements contain all adjustments of a normal recurring nature necessary for their fair presentation. The results for interim periods reflect estimates for certain items which can be definitively determined only on an annual basis. These items include the valuation of a substantial portion of inventories on a LIFO cost basis and the provision for income taxes. These interim financial statements reflect applicable portions of the estimated annual amounts for such items. The results of operations for interim periods are not necessarily indicative of operating results to be expected for the remainder of the year. 2. Inventories: Inventories are summarized as follows (in thousands):
Sept. 27, Dec. 28, 1997 1996 ---------- ---------- Standard cost (which approximates average cost) or average cost: Finished goods ................................................ $ 266,258 $ 242,650 In process .................................................... 196,104 185,307 Raw materials and supplies .................................... 59,916 67,925 --------- --------- 522,278 495,882 Less LIFO reserve .............................................. (120,974) (124,986) --------- --------- Total ......................................................... $ 401,304 $ 370,896 ========= =========
3. Reclassification: Certain prior-year amounts have been reclassified to conform with the 1997 presentation, including classification in net sales of certain promotional costs which were previously included in selling, general and administrative expenses. 4. Commitments: The Company enters into forward delivery contracts and futures contracts for raw material purchases, consistent with the size of its business, to reduce the Company's exposure to price volatility. Management assesses these contracts on a continuous basis to determine if contract prices will be recovered through subsequent sales. - 6 - 7 5. Divestiture: On April 17, 1996, the Company sold Clark-Schwebel, Inc., a business formerly included in the specialty fabrics segment, for $193 million in cash. A gain of $50.1 million was included in other (income) expense for the nine months ended September 28, 1996. Through the date of sale, Clark-Schwebel, Inc. had 1996 sales of $68.9 million and earnings before interest expense and taxes of $11.3 million. During the five years ended in 1995, Clark-Schwebel's average contribution was 13 percent of Springs' sales and 9 percent of its earnings before interest expense and taxes. 6. Restructuring and Realignment Costs: During the second quarter of 1996, the Company adopted a plan to consolidate and realign its fabric manufacturing operations. In connection with this plan, the Company closed three fabric manufacturing plants, added production in other plants, and increased outside purchases of grey fabric. A pretax restructuring charge of $30.4 million was recorded during the second quarter of 1996 which included a $16.3 million write-off of plant and equipment, a $6.6 million accrual for anticipated severance expense arising from the elimination of approximately 850 positions, and a $7.5 million accrual for certain other anticipated expenses associated with the plan. Through September 27, 1997, the Company has recorded cash expenditures of approximately $3.8 million against the severance accrual and $4.6 million against the accrual for certain other expenses associated with the plan. The severance accrual was also reduced by $0.2 million during the third quarter of 1997. A decrease of $2.0 million, due to a lower-than-expected average cost per associate, was offset substantially by an increase of $1.8 million arising from the elimination of approximately 320 positions at other manufacturing facilities. In addition, through September 27, 1997, the Company has incurred expenses of $11.1 million, including $2.5 million during the third quarter, for equipment relocation and other realignment expenses and has made capital investments of $4.4 million related to the plan. 7. Impact of Recently Issued Accounting Standards: In February of 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings Per Share," which is required to be adopted for both interim and year-end financial statements ending after December 15, 1997. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. The Company does not expect Statement No. 128 to have a material effect on its financial statements. 8. Other: Included in other (income) expense for the third quarter and first nine months of 1997 was a $6.6 million gain on the sale of an investment. Other (income) expense for the nine months ended September 28, 1996, included a gain of $50.1 million on the sale of Clark-Schwebel, Inc. and asset write-downs totaling approximately $5.5 million. Certain Company information systems will require modification or replacement over the next three years in order to render these systems compliant with the year 2000. Information systems that will be affected by the year 2000 issue have been identified, and the Company is - 7 - 8 developing and implementing plans to ensure compliance by the year 2000. The Company is in the process of estimating the financial impact of its millennium solution. 9. Legal and Environmental: As disclosed in the 1996 Annual Report on Form 10-K, Springs is involved in certain administrative proceedings alleging violations of environmental laws and regulations, including proceedings under the Comprehensive Environmental Response, Compensation, and Liability Act. In connection with these proceedings, the Company has accrued an amount which represents management's best estimate of Springs' probable liability. Springs is also involved in various other legal proceedings and claims incidental to its business. Springs is protecting its interests in all such proceedings. In the opinion of management, based on the advice of counsel, the likelihood that the resolution of the above matters would have a material adverse impact on either the financial condition or the future results of operations of Springs is remote. 10. Subsequent Event: In October of 1997, the Company's Board of Directors approved the purchase of up to 2 million shares of the Company's Class A common stock. Management was authorized to begin buying the shares in the open market and in private transactions. - 8 - 9 ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Sales Net sales for the third quarter of 1997 were $579.2 million, up 3 percent from the third quarter of 1996. The home furnishings segment produced a third- quarter net sales increase of 3 percent. Third-quarter net sales for the specialty fabrics segment were up 2 percent compared to 1996. Year-to-date net sales were $1,651.2 million, down 2 percent compared to the first nine months of 1996 due to the sale of Clark-Schwebel, Inc. Year-to- date sales of home furnishings were 4 percent higher than during the first nine months of 1996. Year-to-date net sales for the specialty fabrics segment were 26 percent lower than a year ago due to continued weak market demand and the 1996 divestiture of Clark-Schwebel, Inc. Earnings Net income for the third quarter of 1997 was $27.4 million, or $1.34 per share, after the effect of realignment expenses associated with the Company's restructuring of its fabric manufacturing operations announced in June of 1996 and a $6.6 million pretax gain on the sale of an investment. Without these unusual items, net income for the third quarter of 1997 would have been $24.8 million, or $1.21 per share, compared to $22.8 million, or $1.11 per share, for the third quarter of 1996. The Company has continued its efforts to expand margins in its home furnishings business with a focus on improving operating efficiency. The home furnishings segment achieved a 10 percent increase in operating earnings compared to last year. Excluding realignment expenses, operating earnings for the home furnishings segment increased approximately 16 percent over the third quarter of 1996. Operating earnings for the specialty fabrics segment were significantly lower compared to the third quarter of 1996. Weak market demand affecting certain portions of the specialty fabrics segment contributed to the decline. Earnings for the nine months ended September 27, 1997, were $53.7 million, or $2.62 per share, compared to $74.4 million, or $3.64 per share, for the first nine months of 1996. Year-to-date net income for 1997 included restructuring and realignment charges of $7.3 million and a $6.6 million gain on the sale of an investment. In 1996, earnings for the first nine months included restructuring and realignment charges of $30.7 million, a $50.1 million gain on the sale of Clark-Schwebel, Inc., asset write-downs totaling approximately $5.5 million, and a $5.7 million extraordinary loss on the early extinguishment of debt. Excluding these unusual items, net income for the nine months ended September 27, 1997 would have been $54.2 million, or $2.64 per share, compared to $51.0 million, or $2.49 per share, for the nine months ended September 28, 1996. In the home furnishings segment, earnings were higher than a year ago due to improved volume and margin expansion in bed and bath. Year-to-date operating earnings for the specialty fabrics segment were significantly lower than in the prior year due to continued weak market demand for certain portions of its business and the sale of Clark-Schwebel, Inc. in April of 1996. - 9 - 10 CAPITAL RESOURCES AND LIQUIDITY As of September 27, 1997, the Company's debt, net of cash, represented 23.1% of total capital. This compares to 21.7% at December 28, 1996. A seasonal increase in accounts receivable and inventory resulted in increased short-term borrowings. On August 11, 1997, the Company renewed for one year its $100 million long-term loan facility, dated August 12, 1996, which may be used to refinance existing debt and for general corporate purposes. Management expects to spend approximately $30 million on capital expenditures during the fourth quarter of 1997. These investments will focus on manufacturing equipment, distribution facilities and information systems. In October of 1997 the Company's Board of Directors approved the purchase of up to 2 million shares of the Company's Class A common stock. Management was authorized to begin buying the shares in the open market and in private transactions. Management expects that cash from operations and borrowings from commercial paper and committed short-term bank lines will adequately provide for the remainder of the Company's 1997 operating cash needs and for the Company's 1997 repurchase of shares. OTHER During the second quarter of 1996, the Company adopted a plan to consolidate and realign its fabric manufacturing operations. In connection with this plan, the Company closed three fabric manufacturing plants, added production in other plants, and increased outside purchases of grey fabric. A pretax restructuring charge of $30.4 million was recorded during the second quarter of 1996, which included a $16.3 million write-off of plant and equipment, a $6.6 million accrual for anticipated severance expense arising from the elimination of approximately 850 positions, and a $7.5 million accrual for certain other anticipated expenses associated with the plan. Through September 27, 1997, the Company has recorded cash expenditures of approximately $3.8 million against the severance expense accrual and $4.6 million against the accrual for certain other expenses associated with the plan. The severance accrual was also reduced by $0.2 million during the third quarter of 1997. A decrease of $2.0 million, due to a lower-than-expected average cost per associate, was offset substantially by an increase of $1.8 million arising from the elimination of approximately 320 positions at other manufacturing facilities. In addition, through September 27, 1997, the Company has incurred expenses of $11.1 million, including $2.5 million during the third quarter, for equipment relocation and other realignment expenses and has made capital investments of $4.4 million related to the plan. Over the next 27 months, Springs plans to make future capital investments of $12.9 million and incur future expenses of approximately $12.0 million for equipment relocation and other realignment costs which do not qualify as "exit costs." On April 17, 1996, the Company sold Clark-Schwebel, Inc., a business formerly included in the specialty fabrics segment, for $193 million in cash. A gain of $50.1 million was included in other (income) expense for the nine months ended September 28, 1996. Through the date of sale, Clark-Schwebel, Inc. had 1996 sales of $68.9 million and earnings before interest expense and taxes of $11.3 million. During the five years ended in 1995, Clark-Schwebel's average contribution was 13 percent of Springs' sales and 9 percent of its earnings before interest expense and taxes. Certain prior year amounts have been reclassified to conform with the 1997 presentation, including classification in net sales of certain promotional - 10 - 11 costs which were previously included in selling, general and administrative expenses. Certain Company information systems will require modification or replacement over the next three years in order to render these systems compliant with the year 2000. Information systems that will be affected by the year 2000 issue have been identified, and the Company is developing and implementing plans to ensure compliance by the year 2000. The Company is in the process of estimating the financial impact of its millennium solution. This report contains or may contain forward-looking statements that reflect management's current assumptions and estimates of future performance and economic conditions. The Company cautions investors that any forward-looking statement is subject to risks and uncertainties that may cause actual results to vary significantly from those projected, stated, or implied by the forward-looking statement. Factors that could cause actual results to differ, in addition to those discussed in the Company's most recently filed 10-K, include the health of the retail economy, progress toward our cost reduction goals and our year 2000 compliance plans, and the success of efforts aimed at improving the operating performance of our specialty fabrics segment. RECENTLY ISSUED ACCOUNTING STANDARDS In February of 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings Per Share," which is required to be adopted for both interim and year-end financial statements ending after December 15, 1997. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. The Company does not expect Statement No. 128 to have a material effect on its financial statements. - 11 - 12 ITEM 6. - EXHIBITS The following exhibits are filed as part of this report: (10) Material Contracts Second Amendment dated August 11, 1997, to $100,000,000 Wachovia Bank of Georgia, N.A., Term Loan Credit Agreement dated August 12, 1996 (27) Financial Data Schedule - 12 - 13 SIGNATURES Pursuant to the requirements of Securities Exchange Act of 1934, Springs Industries, Inc. has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. SPRINGS INDUSTRIES, INC. By: /s/ James F. Zahrn ------------------------------- James F. Zahrn Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) DATED: November 10, 1997 - 13 - 14 EXHIBIT INDEX
Item Page - ---- ---- (10) Material Contracts Second Amendment dated August 11, 1997, to 15 $100,000,000 Wachovia Bank of Georgia, N.A., Term Loan Credit Agreement dated August 12, 1996 (4 pages) (27) Financial Data Schedule (for SEC purposes) 19
- 14 - EX-10 2 SECOND AMENDMENT TO CREDIT AGREEMENT DATED 8/11/97 1 SECOND AMENDMENT TO CREDIT AGREEMENT THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated effective as of the 11th day of August, 1997, among SPRINGS INDUSTRIES, INC. (the "Borrower"), WACHOVIA BANK, N.A., as Agent (the "Agent") and WACHOVIA BANK, N.A., SUNTRUST BANK, ATLANTA, and NATIONSBANK, N.A. (collectively, the "Banks"); WITNESSETH: WHEREAS, the Borrower, the Agent and the Banks are parties to that certain Credit Agreement, dated as of the 12th day of August, 1996, as amended from time to time (the "Credit Agreement"); WHEREAS, the Borrower has requested and the Agent and the Banks have agreed to renew and extend their Commitments to make Term Loan Advances for an additional 364 days and make certain amendments to the Credit Agreement, subject to the terms and conditions hereof; NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by the parties hereto, the Borrower, the Agent and the Banks hereby covenant and agree as follows: 1. Definitions. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement. Each reference to "hereof," "hereunder," "herein," and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Credit Agreement shall from and after the date hereof refer to the Credit Agreement as amended hereby. 2. Amendments. (a) The definition of "Amortization Date" located in Section 1.01 of the Credit Agreement is hereby deleted and substituted in lieu thereof is the following: "Amortization Date" means August 10, 1998. (b) Clause (ii) beginning on the 11th line of Section 2.01 is hereby amended in its entirety as follows: - 15 - 2 "(ii) occur before August 10, 1998, and thereafter to make Refunding Loans from time to time before the Maturity Date." (c) Section 2.06(b) is hereby deleted and substituted in lieu thereof is the following: "(b) The Borrower shall pay to the Agent, for the ratable account of each Bank, a commitment fee, calculated on the average daily amount of the Unused Commitments, at the rate of 0.05% per annum. Such commitment fees shall accrue from and including August 11, 1997, to but excluding August 10, 1998, and shall be payable on September 30, 1997, December 31, 1997, March 31, 1998, June 30, 1998, and August 10, 1998, as applicable." 3. Effect of Amendment. Except as set forth expressly hereinabove, all terms of the Credit Agreement and the other Loan Documents shall be and remain in full force and effect, and shall constitute the legal, valid, binding and enforceable obligations of the Borrower. The amendments contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein. 4. Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. 5. Section References. Section titles and references used in this Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby. 6. No Default. To induce the Agent and the Banks to enter into this Amendment and to continue to make advances pursuant to the Credit Agreement, the Borrower hereby acknowledges and agrees that, as of the date hereof, and after giving effect to the terms hereof, there exists (i) no Default or Event of Default and (ii) no rights of offset, defense, counterclaim, claim or objection in favor of the Borrower arising out of or with respect to any of the Loans or other obligations of the Borrower owed to the Banks under the Credit Agreement. 7. Further Assurances. The Borrower agrees to take such further actions as the Agent shall reasonably request in connection herewith to evidence the amendments herein contained to the Borrower. - 16 - 3 8. Governing Law. This Amendment shall be governed by and construed and interpreted in accordance with the laws of the State of Georgia. 9. Conditions Precedent. This Amendment shall become effective only upon (i) execution and delivery of this Amendment by each of the parties hereto, (ii) execution and delivery of the Consent and Reaffirmation of Guarantors at the end hereof by each of the Guarantors, and (iii) delivery of certified resolutions from the Borrower authorizing the execution and performance of the terms of this Amendment and from each Guarantor authorizing the execution and performance of the terms of the Consent and Reaffirmation of Guarantors attached hereto. IN WITNESS WHEREOF, the Borrower, the Agent and each of the Banks has caused this Amendment to be duly executed, under seal, by its duly authorized officer as of the day and year first above written. SPRINGS INDUSTRIES, INC., as Borrower (SEAL) By: /s/Samuel J. Ilardo -------------------------------------- Title: Treasurer WACHOVIA BANK, N.A., as Agent and as a Bank (SEAL) By: /s/Sarah T. Warren -------------------------------------- Title: Vice President SUNTRUST BANK, ATLANTA, as a Bank (SEAL) By: /s/Jeffrey D. Drucker -------------------------------------- Title: Banking Officer By: /s/R. B. King -------------------------------------- Title: Vice President NATIONSBANK, N.A. as a Bank (SEAL) By: /s/E. Phifer Helms -------------------------------------- Title: Senior Vice President - 17 - 4 CONSENT AND REAFFIRMATION OF GUARANTORS Each of the undersigned (i) acknowledges receipt of the foregoing Second Amendment to Credit Agreement (the "Amendment"), (ii) consents and agrees to all of the terms of the foregoing Amendment, and (iii) reaffirms all of its obligations and covenants, respectively, as a Guarantor under the Guaranty dated as of August 12, 1996, executed and delivered by Springs Window Fashions Division, Inc., and Dundee Mills, Incorporated, and as a Contributing Party under the Contribution Agreement dated as of August 12, 1996, and agrees that none of such obligations and covenants shall be affected by the execution and delivery of the Amendment. This Consent and Reaffirmation may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. SPRINGS WINDOW FASHIONS DIVISION, INC. (SEAL) By: /s/Samuel J. Ilardo -------------------------------------- Title: Treasurer DUNDEE MILLS, INCORPORATED (SEAL) By: /s/Samuel J. Ilardo -------------------------------------- Title: Treasurer - 18 - EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF SPRINGS INDUSTRIES, INC., FOR THE QUARTER ENDED SEPTEMBER 27, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JAN-03-1998 DEC-29-1996 SEP-27-1997 680 0 363,687 0 401,304 807,822 1,350,435 815,806 1,425,913 251,822 168,835 0 0 5,066 811,419 1,425,913 1,651,176 1,651,176 1,348,387 1,348,387 0 0 13,841 81,419 27,682 53,737 0 0 0 53,737 2.62 2.62
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