1
The following items were the subject of a Form 12b-25
and are included herein: Part 1. All items.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File number 333-376-17
DELTA MILLS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-2677657
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
233 North Main Street
Hammond Square, Suite 200
Greenville, South Carolina 29601
(Address of principal executive offices) (Zip Code)
864\232-8301
Registrant's telephone number, including area code
Not Applicable
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (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 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-- 100 shares as of May 8, 1998
INDEX
DELTA MILLS, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Page
Condensed consolidated balance sheets--
March 28, 1998 and June 28, 1997 3-4
Condensed consolidated statements of operations --
Three and nine months ended March 28, 1998
and March 29, 1997 5
Condensed consolidated statements of cash
flows-- Nine months ended March 28, 1998
and March 29, 1997 6
Notes to condensed consolidated financial
statements--March 28, 1998 7-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 12
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Uses of Proceeds 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security
Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DELTA MILLS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 28, June 28,
1998 1997
(Unaudited)
(In thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,607 $ 1,095
Accounts receivable:
Factor 64,506 83,676
Customers 123 365
Affiliates 8,004 2,953
72,633 86,994
Less allowances for doubtful
accounts and returns 219 128
72,414 86,866
Inventories
Finished Goods 17,910 7,178
Work in process 39,591 39,619
Raw materials and supplies 8,844 8,806
66,345 55,603
Other 3,178 2,402
Current assets of discontinued
operations 31,984 41,492
TOTAL CURRENT ASSETS 180,528 187,458
Property plant and equipment
at cost 197,063 196,687
less accumulated depreciation 76,929 61,168
120,134 135,519
Other assets 5,384
Noncurrent assets of discontinued
operations 11,585 22,033
TOTAL ASSETS $ 317,631 $345,010
ITEM 1. FINANCIAL STATEMENTS
DELTA MILLS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS--Continued
LIABILITIES
CURRENT LIABILITIES
Trade accounts payable $ 23,158 $ 31,597
Accrued and sundry liabilities 10,890 14,728
Accrued restructuring charge 14,147
Payable to affiliate 5 58,469
Current portion of long term debt 68,000
TOTAL CURRENT LIABILITIES 116,200 104,794
LONG-TERM DEBT, less current portion 150,000 210,189
DEFERRED INCOME TAXES AND
OTHER LIABILITIES 15,854 22,183
SHAREHOLDER'S EQUITY
Common Stock, par value $.01-
authorized 3,000 shares, issued
and outstanding 100 shares
Additional paid-in capital 40,256 2,134
Retained earnings (4,679) 5,710
SHAREHOLDER'S EQUITY 35,577 7,844
TOTAL LIABILITIES AND
SHAREHOLDER'S EQUITY $317,631 $345,010
See notes to consolidated financial statements
DELTA MILLS,INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended
March 28, March 29, March 28, March 29,
1998 1997 1998 1997
(In thousands, except shares and per share data)
Net sales $ 81,071 $ 88,858 $ 262,739 $ 258,790
Cost of goods sold 66,574 72,416 216,211 213,986
Gross profit on sales 14,497 16,442 46,528 44,804
Selling, general and
administrative expenses 4,587 4,104 12,641 11,639
Other (income) (20) (211) (62) (1,409)
OPERATING PROFIT 9,930 12,549 33,949 34,574
Interest expense (income):
Interest expense 5,318 3,660 15,135 10,827
Interest (income) (425) (992) (1)
4,893 3,660 14,143 10,826
Income from continuing operations
before income taxes 5,037 8,889 19,806 23,748
Income taxes expense (benefit) 1,989 3,565 7,823 9,572
INCOME FROM
CONTINUING OPERATIONS 3,048 5,324 11,983 14,176
(Loss) on disposal of discontinued
operations less applicable
income taxes (21,079) (21,079)
(Loss) from operations of
discontinued business less
applicable income taxes (1,468) (1,262) (4,830) (3,473)
(Loss) from discontinued
operations (22,547) (1,262) (25,909) (3,473)
NET INCOME (LOSS) $ (19,499) $ 4,062 $ (13,926) $ 10,703
Basic and diluted earnings
(loss) per share:
Continuing operations $ 30,480 $ 53,240 $ 119,830 $ 141,760
Discontinued operations (225,470) (12,620) (259,090) (34,730)
Net earnings (loss) $ (194,990) $ 40,260 $(139,260) $ 107,030
Weighted average shares
outstanding 100 100 100 100
See notes to condensed consolidated financial statements
DELTA MILLS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended
March 28, March 29,
1998 1997
(In thousands)
OPERATING ACTIVITIES
Net income (loss) $ (13,926) $ 10,703
Adjustments to reconcile net income to cash
provided by operating activities:
Discontinued operations 20,931 (1,766)
Depreciation 15,748 10,343
Amortization 390 (21)
Other (5,613) 814
Changes in operating assets and liabilities (11,004) 6,127
NET CASH PROVIDED BY OPERATING ACTIVITIES 6,526 26,200
INVESTING ACTIVITIES
Property, plant and equipment purchases (1,099) (10,435)
Net investing activities of discontinued operations (2,036) 839
Other 7 689
NET CASH (USED) BY INVESTING ACTIVITIES (3,128) (8,907)
FINANCING ACTIVITIES
Proceeds from revolving lines of credit 118,000
Payments on revolving lines of credit (50,000)
Net proceeds from senior notes 145,688
Dividends (8,000)
Repayment of amounts due to affiliates (202,093)
Net borrowing from affiliates (17,294)
Other financing costs (1,481)
NET CASH (USED) PROVIDED BY
FINANCING ACTIVITIES 2,114 (17,294)
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 5,512 (1)
Cash and cash equivalents at beginning of period 1,095 44
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,607 $ 43
See notes to condensed consolidated financial statements
DELTA MILLS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 28, 1998
NOTE A-BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements of Delta Mills, Inc. ("the Company") have been prepared
in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-
Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of only
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three
and nine months ended March 28, 1998 are not necessarily indicative
of the results that may be expected for the year ending June 27,
1998. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's
Registration Statement on Form S-4 (File No. 333-376-17). Certain
amounts for fiscal 1997 have been reclassified to conform to the
fiscal 1998 presentation.
NOTE B-OPERATIONS BY INDUSTRY SEGMENT
Effective for the fiscal year ending June 27, 1998, the Company has
adopted the segment reporting provisions of Financial Accounting
Standard 131. This standard requires the Company to report segment
information for divisions which engage in business activity, whose
operating results are regularly reviewed by the chief operating
officer. The Company has one segment in continuing operations:
Delta Mills Marketing Company which manufactures and sells woven
fabrics for apparel and home furnishings. The Company's other
operations include yarn sales to Delta Apparel, a segment of the
parent company, Delta Woodside Industries, Inc. In the past these
sales were managed by Stevcoknit Fabrics Company. Delta Apparel
will manage the Rainsford Plant, which will manufacture and sell
yarn to Delta Apparel.. Operating profit does not include interest
expense or interest income. The Company also has one segment which
is presented as discontinued operations: Stevcoknit Fabrics
Company which manufactures and sells knitted fabrics.
Three Months Ended Nine Months Ended
March 28, March 29, March 28, March 29,
1998 1997 1998 1997
Net Sales
Delta Mills Marketing Company
Unaffiliated customers $ 74,323 $ 82,589 $248,025 $240,728
Affiliated customers 155 191 5
74,478 82,589 248,216 240,733
Other and eliminations
Affiliated customers 6,593 5,939 18,057 14,523
Total net sales $ 81,071 $ 88,528 $ 262,739 $ 258,790
Operating Profit(Loss)
Delta Mills Marketing
Company $ 9,930 $ 12,549 $ 33,949 $ 34,574
Other
Total Operating Profit 9,930 12,549 33,949 34,574
Interest expense 5,318 3,660 15,135 10,827
Interest (income) (425) (992) (1)
Income from Continuing
Operations Before
Income Taxes $ 5,037 $ 8,889 $ 19,806 $ 23,748
March 28, June 27,
1998 1997
Identifiable Assets:
Delta Mills Marketing
Company $234,127 $249,637
Discontinued Operations 43,569 62,464
Other 39,935 32,909
Total identifiable assets $317,631 $345,010
Nine Months Ended
March 28, March 29,
1998 1997
Depreciation and Amortization:
Delta Mills Marketing Company $ 7,945 $ 7,488
Discontinued Operations 12,484 2,839
Other 8,193 2,834
Total depreciation and
and amortization $ 28,622 $ 13,161
Capital Expenditures:
Delta Mills Marketing
Company $ 354 $ 8,992
Discontinued Operations 2,368 77
Other 77 535
Total capital expenditures $ 2,799 $ 9,604
Intersegment sales and sales to affiliates are at prices comparable
to unaffiliated customer sales. Intersegment operating profit
related to intersegment sales is not significant. Operating profit
is total revenue less operating expenses, excluding interest
expense and interest income. Depreciation and amortization include
certain write-downs of property and equipment. Identifiable
assets are those assets that are used in the operations.
NOTE C-DISCONTINUED OPERATIONS
On March 3, 1998, the Company made the decision to close its
Stevcoknit Fabrics division. Accordingly, operating results for
this segment has been reclassified and reported as discontinued
operations. The Company plans to sell the assets of the Stevcoknit
division, and expects to complete disposition of this business
during calendar year 1998.
In connection with the decision to discontinue this business, the
Company has recognized a loss on disposal of discontinued
operations of $21.1 million including an income tax benefit of
$13.8 million. The Company believes that it will recover the net
book value of the assets of the Stevcoknit division.
The assets of the discontinued business at March 28, 1988 and June
28, 1997 are as follows:
March 28, 1998 June 28, 1997
Accounts Receivable $ 17,122 $ 18,749
Inventory 14,755 21,592
Other current assets 107 90
Total current assets 31,984 40,431
Property, plant and
equipment net of
accumulated depreciation 11,585 22,033
Total Assets $ 43,569 $ 62,464
Summarized results of operations for the discontinued business are
as follows:
Three Months Ended Nine Months Ended
March 28, March 29, March 28, March 29,
1998 1997 1998 1997
Net Sales $ 21,192 $ 26,220 $ 74,250 $ 75,447
Cost and expenses 23,649 28,391 82,233 81,509
(Loss) before income taxes (2,457) (2,171) (7,983) (6,062)
Income tax expense (benefit) (989) (909) (3,153) (2,589)
(Loss) from discontinued
operations $ (1,468) $ (1,262) $ (4,830) $ (3,473)
NOTE D-DEBT
On August 25, 1997, the Company issued $150 million of unsecured
ten-year senior notes at an interest rate of 9.625%, and obtained a
secured five-year $100 million revolving line of credit. The net
proceeds of the senior notes, the initial borrowings under the new
revolving line of credit and a capital contribution of $49.7
million were used to repay the long-term debt and current amounts
payable to affiliate. Other assets are deferred loan costs
primarily attributable to the unsecured senior notes. These costs
are being amortized over the life of the debt.
Due to the restructuring and impairment charges made to income
related to discontinued operations in the most recent quarter, the
Company was in violation of two covenants of the revolving loan
credit agreement with the four financial institutions participating
in the credit agreement.
NOTE D-DEBT--Continued
The Company has secured waivers to the credit agreement providing
for a grace period of three months. During that period the Company
expects to reach agreement to amend the covenants so that the
Company will be in compliance. Pending receipt of the amendment
the $68 million outstanding has been classified as current in the
accompanying financial statements.
NOTE E-SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARY
Delta Mills Marketing, Inc. (the "Guarantor") does not comprise a
material portion of the Company's assets or operations. The
Guarantor is a wholly-owned subsidiary of the Company and has fully
and unconditionally guaranteed the Company's payment of principal,
premium, interest and liquidated damages, if any, on the Company's
senior notes (the "Notes"), (the"Guarantee"). The Guarantor's
liability under the Guarantee is limited to such amount, the
payment of which would not have left the guarantor insolvent or
with unreasonably small capital at the time its Guarantee was
entered into, after giving effect to the incurrence of existing
indebtedness immediately prior to such time.
The Guarantor is the sole subsidiary of the Company. All future
subsidiaries of the Company will provide guarantees identical to
the one described in the preceding paragraph unless such future
subsidiaries are Receivables Subsidiaries (as defined in the
indenture relating to the Notes). Such additional guarantees will
be joint and several with the Guarantee of the Guarantor.
The Company has not presented separate financial statements or
other disclosures concerning the Guarantor because Company
management has determined that such information is not material to
investors.
Summarized financial information for the Guarantor is as follows
(in thousands) :
March 28, June 28,
1998 1997
Current assets $1,395 $2,507
Noncurrent assets 124 163
Current liabilities 882 1,630
Noncurrent liabilities 1,270 1,035
Stockholders' equity (633) 5
Summarized results of operations for the Guarantor are as follows
(in thousands):
Three Months Ended Nine Months Ended
March 28, March 29, March 28, March 29,
1998 1997 1998 1997
Net sales - intercompany
commissions $1,939 $2,193 $6,596 $6,430
Costs and expenses 2,295 2,307 6,672 6,266
Net income (loss) (480) (225) (638) (333)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Effective for the fiscal year ending June 27, 1998, the Company has
adopted the segment reporting provisions of Financial Accounting
Standard 131. This standard requires the Company to report segment
information for divisions which engage in business activity, whose
operating results are regularly reviewed by the chief operating
officer. The Company has one segment in continuing operations:
Delta Mills Marketing Company which manufactures and sells woven
fabrics for apparel and home furnishings. The Company's other
operations include yarn sales to Delta Apparel, a segment of the
parent company, Delta Woodside Industries, Inc. In the past these
sales were managed by Stevcoknit Fabrics Company. Delta Apparel
will manage the Rainsford Plant, which will manufacture and sell
yarn to Delta Apparel.. The Rainsford Plant is managed by Delta
Apparel. The Company also has one segment which is presented as
discontinued operations: Stevcoknit Fabrics Company which
manufactures and sells knitted fabrics.
Net sales for the third quarter ended March 28, 1998 were $81.1
million as compared to net sales of $88.9 million in the quarter
ended March 29, 1997. Sales at Delta Mills Marketing Company for
the most recent quarter declined $8.1 million from the comparable
quarter of fiscal 1997. Principal reasons for the decline in sales
were substantially fewer units of unfinished fabrics and fewer
units of cotton menswear fabrics being shipped in the most recent
quarter. The fewer units of menswear shipments were due to
deferments of shipments from some of the division's garment
manufacturing customers. The Company believes that these deferments
were caused by retailers' adjustments to inventories arising from
slower than anticipated retail demand for clothing during the
winter. These deferred shipments have now been ordered shipped by
the division's customers.
Net income from continuing operations in the quarter ended March
28, 1998 was $3.0 million as compared to net income from continuing
operations of $5.3 million in the quarter ended March 29, 1997. Net
loss for the quarter ended March 28, 1998 was $19.5 million as
compared to net income of $4.1 million in the quarter ended March
29, 1997. During the quarter ended March 28, 1998, the Company made
the decision to close its Stevcoknit Fabrics division. The net loss
in the most recent quarter included pre-tax charges for anticipated
losses related to the disposal of Stevcoknit Fabrics of $35
million.
Gross profit margin from continuing operations was 17.9 % in the
most recent quarter as compared to gross profit margin from
continuing operations of 18.5 % in the same quarter of last fiscal
year. Operating profits declined by $2.6 million, due principally
to the lower volume being shipped. For the nine months ended March
28, 1998, sales of Delta Mills Marketing were 3% higher than for
the comparable period of last fiscal year. Gross margins and
operating profits were substantially the same in the most recent
nine month period as compared to the first nine months of the prior
fiscal year.
Due to the restructuring and impairment charges made to income
related to discontinued operations in the most recent quarter, the
company was in violation of two covenants of the revolving loan
credit agreement with the four financial institutions participating
in the credit agreement. The Company has secured waivers to the
credit agreement providing for a grace period of three months.
During that period the Company expects to reach agreement to amend
the covenants so that the Company will be in compliance. Pending
receipt of the amendment the $68 million outstanding has been
classified as current in the accompanying financial statements.
The Company believes that cash flow generated by its operations and
funds available under its current credit facilities will be
sufficient to service its debt, to satisfy its day-to-day working
capital requirements, to pay dividends, and to fund its planned
capital expenditures.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not Applicable.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings*
Item 2. Changes in Securities and Use of Proceeds*
Item 3. Defaults upon Senior Securities*
Item 4. Submission of Matters to a Vote of Security Holders*
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
4.2.1 Amendment and Waiver Agreement dated as of
May 11, 1998 respecting Credit Agreement
dated August 25, 1997.
(b) The Company filed Form 8-K with date of March 9,
1998.
Item 5. Other Events
* Items 1, 2, 3 and 4 are not applicable
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.
Delta Mills, Inc.
(Registrant)
Date May 18, 1998 /s/Robert W. Humphreys
Vice President - Finance
5
CHAR1\MMP\BANK\332021
FIRST AMENDMENT AND WAIVER TO CREDIT AGREEMENT
THIS FIRST AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this
"Amendment"), dated as of May 11, 1998, is entered into by and
among Delta Mills, Inc. (the "Borrower"), the guarantors
identified as such on the signature pages attached hereto (the
"Guarantors;" collectively, the Borrower and the Guarantors are
referred to as the "Credit Parties"), the lenders identified as
such on the signature pages hereto (the "Lenders"), NationsBank,
N.A., as Administrative Agent (the "Administrative Agent") for
the Lenders, and BNY Financial Corporation, as Collateral Agent
(the "Collateral Agent") for the Lenders. Terms used but not
otherwise defined herein shall have the meanings provided in the
Amended Credit Agreement (as defined below).
RECITALS
A. The Borrower, the Guarantors, the Lenders, the
Administrative Agent and the Collateral Agent entered into that
certain Credit Agreement dated as of August 25, 1997 (the
"Existing Credit Agreement").
B. The Lenders have agreed to execute and deliver this
Amendment on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
PART I
DEFINITIONS
SUBPART 1.1 General Definitions. Unless otherwise defined
herein or the context otherwise
requires, terms used in this Amendment, including the preamble
and recitals, have the meanings provided in the Existing Credit
Agreement.
SUBPART 1.2 Certain Definitions. Unless the context
otherwise requires, the following
terms used in this Amendment shall have the indicated
definitions:
"Amended Credit Agreement" means the Existing Credit
Agreement as amended hereby.
"Amendment No. 1 Effective Date" has the meaning ascribed to
such term in Part 5.1 of
this Amendment.
"Mickel Plant" means the Mickel manufacturing facility
located in Spartanburg, South Carolina.
"Mickel Plant Disposition" means the Asset Disposition
involving the Mickel Plant pursuant to the Sale Agreement.
"Sale Agreement" means, that certain agreement among the
Borrower and Ameritex Yarn, LLC providing for the sale of the
Mickel Plant by the Borrower to Ameritex Yarn, LLC for an
aggregate purchase price of $6,000,000.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Section 7.11(d) of the Existing Credit Agreement is
hereby amended and restated to read as follows:
7.11 Financial Covenants.
*******
(d) Consolidated Tangible Net Worth. At all times the
Consolidated Tangible Net Worth shall be greater than or
equal to:
(i) for the period from the Closing Date to and
including the next to last day of the third fiscal
quarter of fiscal year 1998 of the Consolidated
Parties, $50,000,000;
(ii) for the period from the last day of the third
fiscal quarter of fiscal year 1998 to and including the
next to last day of fiscal year 1998 of the
Consolidated Parties, $27,000,000;
(iii) for the period from the last day of fiscal
year 1998 to and including the next to last day of
fiscal year 1999 of the Consolidated Parties,
$60,000,000;
(iv) for the period from the last day of fiscal
year 1999 to and including the next to last day of
fiscal year 2000 of the Consolidated Parties,
$75,000,000;
(v) for the period from the last day of fiscal
year 2000 to and including the next to last day of
fiscal year 2001 of the Consolidated Parties,
$90,000,000;
(vi) for the period from the last day of fiscal
year 2001 to and including the next to last day of
fiscal year 2002 of the Consolidated Parties,
$105,000,000; and
(vii) for the period from the last day of fiscal
year 2002 and thereafter, $120,000,000.
PART III
WAIVERS
SUBPART 3.1. Waiver of Defaults. The Required Lenders
hereby (i) waive the requirements of Sections 7.11(a),
7.11(b) and 7.11(c) of the Credit Agreement for March 28,
1998 and waive the requirement of Section 7.11(d) of the
Credit Agreement for the period from March 28, 1998 through
the Amendment No. 1 Effective Date and (ii) agree that the
Borrower's failure to observe the covenants of Sections
7.11(a), 7.11(b) and 7.11(c) for March 28, 1998 and the
covenant of Section 7.11(d) for the period from March 28,
1998 through the Amendment No. 1 Effective Date shall not
constitute an Event of Default under Section 9.1 of the
Credit Agreement.
SUBPART 3.2. Waiver of Certain Requirements of Section
8.5. With respect to the Mickel Plant Disposition, the
Required Lenders hereby waive (i) the requirement set forth
in clause (d) of Section 8.5 of the Existing Credit
Agreement and (ii) the requirement that the Borrower deliver
a certificate with respect to the Mickel Plant Disposition
at least 30 days prior to such Asset Disposition as provided
in clause (f) of Section 8.5 of the Existing Credit
Agreement. This waiver shall not be construed as a waiver of
such conditions with respect to any other Asset Disposition.
PART IV
REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES
. Each Credit Party hereby represents and warrants to the
Administrative Agent and to each Lender that:
(i) each of the representations and
warranties of the Borrower contained in the Amended
Credit Agreement or in any other Credit Document is
true as of the date hereof (after giving effect to this
Amendment);
(ii) after giving effect to this Amendment, no
Default or Event of Default exists and is continuing
under the Amended Credit Agreement;
(iii) since the date of the last financial
statements of the Borrower delivered to Lenders, no
material adverse change has occurred in the business,
financial condition, operations or prospects of the
Consolidated Parties other than as previously disclosed
to the Lenders; and
(iv) no consent, approval, authorization or order
of , or filing, registration or qualification with, any
court or governmental authority or third party is
required in connection with the execution, delivery or
performance by such Person of this Amendment.
PART V
CONDITIONS TO EFFECTIVENESS
SUBPART 5.1. Effective Time of Amendment. This Amendment
shall be and become effective as of the first Business Day upon
which each of the conditions set forth in this Subpart 5.1 shall
have been completed to the satisfaction of the Administrative
Agent and the Lenders (the "Amendment No. 1 Effective Date").
SUBPART 5.1. Execution of Amendment. The Administrative
Agent shall have received counterparts (or other evidence of
execution, including telephonic message, satisfactory to the
Administrative Agent) of the due execution of this Amendment on
behalf of the Credit Parties and each of the Lenders.
SUBPART 5.2. Amendment Fees. The Administrative Agent shall
have received from the Borrower, on the Amendment No. 1 Effective
Date, for the account of each Lender, in immediately available
funds, an amendment fee of 0.05% of each Lender's Commitment.
SUBPART 5.3. Other Documents. The Administrative Agent
shall have received such other documents relating to the
transactions contemplated hereby as the Administrative Agent or
counsel to the Administrative Agent may reasonably request of the
Borrower in writing on or before the Amendment No. 1 Effective
Date.
SUBPART 5.4. Expenses of Administrative Agent. The
Borrower shall have reimbursed the Administrative Agent for all
reasonable out-of-pocket expenses of the Administrative Agent ,
including without limitation, all reasonable fees and expenses of
its attorneys, incurred in connection with the negotiation,
preparation or execution of this Amendment as well as expenses
incurred by the Administrative Agent (or the Collateral Agent) to
release any Collateral in connection with the Mickel Plant
Disposition.
SUBPART 5.5. Receipt of Sale Agreement. The Administrative
Agent shall have received an executed copy of the Sale Agreement
in form and substance reasonably satisfactory to the
Administrative Agent.
PART VI
MISCELLANEOUS
SUBPART 6.1 Further Assurances. As soon as practicable
after receipt of a written request from the Administrative Agent,
and in any event not later than 30 days from the date such
request is received by the Borrower, the Credit Parties shall
cause to be delivered to the Administrative Agent, in form and
content reasonably satisfactory to the Administrative Agent, all
documents or other instruments incident to the transactions
contemplated by this Agreement in the reasonable judgment of the
Administrative Agent.
SUBPART 6.2. Receipt of Certificate. The Administrative
Agent shall have received at least 15 days prior to the date of
the Mickel Plant Disposition a certificate as described in clause
(f) of Section 8.5 of the Amended Credit Agreement.
SUBPART 6.3. References. References in this Amendment to
any Part or Subpart are, unless otherwise specified, to such Part
or Subpart of this Amendment. As of the Amendment No. 1
Effective Date, all references in the Credit Documents to the
"Credit Agreement" shall be deemed to refer to such document as
amended by this Amendment.
SUBPART 6.4. Counterparts. This Agreement may be executed
by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which constitute
together one and the same agreement.
SUBPART 6.5. Governing Law. This Amendment shall be deemed
to be a contract made under and governed by the internal laws and
judicial decisions of the State of North Carolina without giving
effect to the conflict of law principles thereof.
SUBPART 6.6. Successors and Assigns. This Amendment shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
SUBPART 6.7. Entire Agreement. The Amended Credit
Agreement, this Amendment, and the other Credit Documents, as
amended hereby, constitute the entire contract among the parties
relative to the subject matter hereof.
SUBPART 6.8. No Other Changes. Except as expressly
modified and amended in this Agreement, all of the terms,
provisions and conditions of the Credit Documents shall remain
unchanged.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
BORROWER: DELTA MILLS, INC.,
a Delaware corporation
By: /s/Bettis C. Rainsford
Name: Bettis c. Rainsford
Title: Executive Vice President, Treasurer
and Chief Executive Officer
GUARANTOR: DELTA MILLS MARKETING, INC.,
a Delaware corporation
By: /s/ Bettis C. Rainsford
Name: Bettis C. Rainsford
Title: Executive Vice President, Treasurer
and Chief Executive Officer
[Signatures Continued]
LENDERS: NATIONSBANK, N.A., individually as a
Lender and in its
capacity as Administrative Agent
By: /s/E. Phifer Helms
Name: E. Phifer Helms
Title: Senior Vice President
BNY FINANCIAL CORPORATION, individually
as a
Lender and in its capacity as Collateral Agent
By: /s/Frank Desperado
Name: Frank Desperado
Title: Vice President
GENERAL ELECTRIC
CAPITAL CORPORATION
By: /s/Elaine L. Moore
Name: Elaine L. Moore
Title: Senior Vice President
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By: /s/Theodore W. Cox
Name: Theodore W. Cox
Title: Vice President
By: /s/W. Jeffrey Vollack
Name: W. Jeffrey Vollack
Title: Senior Credit Officer
Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
registrant's condensed consolidated financial statements for the fiscal quarter
ended March 28, 1998 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-27-1998
<PERIOD-END> MAR-28-1998
<CASH> 6,607
<SECURITIES> 0
<RECEIVABLES> 72,633
<ALLOWANCES> 219
<INVENTORY> 66,345
<CURRENT-ASSETS> 180,528
<PP&E> 197,063
<DEPRECIATION> 76,929
<TOTAL-ASSETS> 317,631
<CURRENT-LIABILITIES> 116,200
<BONDS> 150,000
0
0
<COMMON> 0
<OTHER-SE> 35,577
<TOTAL-LIABILITY-AND-EQUITY> 317,631
<SALES> 262,739
<TOTAL-REVENUES> 262,739
<CGS> 216,211
<TOTAL-COSTS> 228,790
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,135
<INCOME-PRETAX> 19,806
<INCOME-TAX> 7,823
<INCOME-CONTINUING> 11,983
<DISCONTINUED> (25,909)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,926)
<EPS-PRIMARY> 119,830
<EPS-DILUTED> 259,090
</TABLE>
