SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _______ to _______
Commission File No. 1-2782
SIGNAL APPAREL COMPANY, INC.
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(Exact name of Registrant as specified in its charter)
Indiana 62-0641635
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(State of Incorporation) (I.R.S. Employer Identification Number)
200 Manufacturers Road, Chattanooga, Tennessee 37405
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (423) 266-2175
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock: Par value $.01 a share New York Stock Exchange
Indicate by a 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 requirement for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
State the aggregate market value of the voting stock held by nonaffiliates of
the registrant: $18,817, 962 calculated by using the closing price on the New
York Stock Exchange on March 21, 1996 of the Company's Common stock, and
excluding common shares owned beneficially by directors and officers of the
Company, and by certain other entities, who may be deemed to be "affiliates",
certain of whom disclaim such status.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of March 26, 1996
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Common Stock, $.01 par value 11,528,046 shares
DOCUMENTS INCORPORATED BY REFERENCE
PART OF FORM 10-K DOCUMENTS FROM WHICH PORTIONS ARE INCORPORATED BY REFERENCE
Part III Proxy Statement for Annual Meeting of Shareholders
<PAGE>
The registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on
Form 10-K for the year ended December 31, 1995, which was filed
with the Commission on March 29, 1996:
Part I, Item 8:
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Note 2 to the Financial Statements filed as Item 8 is hereby
amended to read as follows:
2. Acquisition of American Marketing Works
Pursuant to a Stock Purchase Agreement dated October 6, 1994, as
subsequently amended (as so amended, the "Purchase Agreement"),
the Company acquired, as of November 22, 1994, all of the
outstanding capital stock of AMW from Kidd, Kamm Equity Partners,
L.P., a Delaware limited partnership ("KKEP"), MW Holdings, L.P.,
a California limited partnership ("MWH"), Marvin Winkler, Sherri
Winkler and certain investment companies (collectively, the "AMW
Shareholders"), in exchange for 1,400,000 shares of the Company's
Common Stock, $.01 par value per share (the "AMW Acquisition").
Included in the 1,400,000 shares were 150,000 unvested shares and
150,000 shares subject to being returned to the Company. These
300,000 shares became fully vested (and nonreturnable) in 1995.
An Amendment to the Purchase Agreement provided for the issuance
of an additional 10,000 shares of Common Stock to certain of the
AMW Shareholders in further consideration of the sale of their
entire equity interest in the Company.
The shares of the Company's Common Stock issued in connection
with the AMW Acquisition were issued as unregistered, restricted
shares of stock pursuant to the rules and regulations of the
Securities and Exchange Commission. As an additional inducement
to the AMW Shareholders to enter into the Purchase Agreement, the
Company entered into a Registration Rights Agreement dated
November 22, 1994 with KKEP as "nominee" for all of the AMW
Shareholders (other than Marvin Winkler and Sherri Winkler, who
did not receive any shares) under a separate agreement between
KKEP and such shareholders. The Registration Rights Agreement
effectively granted KKEP (as "Holder," as defined therein, of a
majority of the "Registrable Securities" issued in the AMW
Acquisition) the right to require the Company, upon written
notice given anytime within two years after November 22, 1994, to
effect one registration of all "Registrable Securities" issued in
the AMW Acquisition for sale under the Securities Act of 1933, as
amended.
On November 30, 1994, KKEP, in its capacity as nominee for the
AMW Shareholders, notified the Company of its exercise of the
demand registration rights. In accordance with the terms of the
Registration Rights Agreement, the Company requested, as a matter
of right, an initial delay of up to 180 days in the registration
<PAGE>
of shares pursuant to such notice. KKEP has subsequently
notified the Company that it believes that it is now entitled to
have its shares registered pursuant to the Registration Rights
Agreement, and that it regards the Company as being in default
under that agreement. KKEP has not commenced any litigation
regarding its purported claims under the Registration Rights
Agreement, and the Company intends to vigorously defend itself
against any claim that it is required to register such stock at
this time.
In connection with the AMW Acquisition, the Company agreed with
the other parties to the Purchase Agreement that (i) a
subordinated promissory note of AMW in the principal amount of
$1,560,000 from MWH and (ii) a subordinated promissory note of
AMW in the principal amount of $750,000 from Marvin Winkler
(president of the general partner of MWH as well as former
Chairman and CEO of AMW) and his wife, Sherri Winkler
(collectively, the "Subordinated Notes") would be amended and
restated in principal amounts equal to the outstanding principal
plus accrued and unpaid interest on each of the Subordinated
Notes as of November 22, 1994 (totaling $1,635,400 and $798,300)
(said amended and restated notes, collectively, the "Purchase
Notes"). In 1995 the Company entered into an agreement with
Marvin and Sherri Winkler and MW Holdings whereby the Purchase
Notes were converted into 1,000,000 shares of Common Stock.
The AMW acquisition was accounted for as a purchase in accordance
with Accounting Principles Board Opinion No. 16, and accordingly,
the purchase price has been allocated to the assets acquired and
liabilities assumed based on the estimated fair values as of the
acquisition date. The net excess of the cost over the estimated
fair values of the acquired net assets as a result of the
acquisition was allocated to goodwill.
The results of operations of AMW are included in the accompanying
financial statements from the date of acquisition. The following
summarized unaudited pro forma financial information gives effect
to the acquisition as if it had occurred on January 1 of each
period and has been prepared for comparative purposes only. The
information does not purport to be indicative of the results of
operations had the transaction been in effect on the date
indicated or which may occur in the future:
<TABLE>
<CAPTION>
Year Ended
Dollars in Thousands December 31,
(except per share data) 1994 1993
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(unaudited)
<S> <C> <C>
Net sales $125,603 $169,018
Net loss applicable to
common shareholders 71,407 38,770
Net loss per common share 6.99 3.80
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
SIGNAL APPAREL COMPANY, INC.
By: /s/ Bruce Krebs
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Bruce Krebs
President and
Chief Operating Officer
Date: May 23, 1996
