<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): January 1, 1998
GLOBE HOLDINGS, INC.
GLOBE MANUFACTURING CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Massachusetts 333-64669 04-2017769
Alabama 333-64675 63-1101362
- ---------------------------- ------------------------ ---------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
456 Bedford Street, Fall River, Massachusetts 02720
456 Bedford Street, Fall River, Massachusetts 02720
- --------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (508) 674-3585
(508) 674-3585
----------------
This Instrument contains 4 pages.
The Exhibit Index is located on page 4.
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Item 5. Other Events
Globe Holdings, Inc. released certain financial information for the
year ended December 31, 1998. Complete financial information will be filed on
Form 10-K.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Certain Financial Information for the Year Ended
December 31, 1998
2
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SIGNATURE
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.
GLOBE HOLDINGS, INC.
Dated: March 3, 1999 By: /s/ Lawrence R. Walsh
---------------------------
Vice President, Finance and
Administration
GLOBE MANUFACTURING CORP.
Dated: March 3, 1999 By: /s/ Lawrence R. Walsh
---------------------------
Vice President, Finance and
Administration
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EXHIBIT INDEX
Exhibit No. Description Page No.
----------- ----------- --------
99.1 Certain Financial Information for the
Year Ended December 31, 1998
4
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GLOBE HOLDINGS, INC.
Consolidated Balance Sheets
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<CAPTION>
Unaudited Unaudited
12/31/98 12/31/97
------------ ------------
<S> <C> <C>
Assets
Current assets: $ 1,438,477 $ 1,946,820
Cash and cash equivalents
Accounts receivable, net of allowance for
doubtful accounts of $2,735,693 and $1,870,000
at Dec. 31, 1998 and Dec. 31, 1997, respectively 21,986,274 23,952,336
Receivable from joint venture 323,118 213,014
Taxes receivable 2,947,045 -
Inventories 18,380,852 13,764,168
Prepaid expenses and other assets 456,087 484,244
Deferred income taxes 2,848,000 2,449,000
------------ ------------
Total current assets 48,379,853 42,809,582
Property, plant and equipment:
Land and land improvements 942,243 942,243
Building and building improvements 43,239,660 33,122,541
Manufacturing equipment 102,930,402 79,201,565
Furniture and equipment 2,166,482 2,086,814
Autos and trucks 318,562 318,562
Construction in progress 6,048,771 5,959,351
------------ ------------
155,646,120 121,631,076
Less accumulated depreciation (74,104,820) (63,681,071)
------------ ------------
Net property, plant and equipment 81,541,300 57,950,005
Deferred income taxes 2,961,000 2,822,000
Cash surrender value of life insurance, net of loans
of $72,648 at Dec. 31, 1997 1,069,134 927,362
Notes receivable from officers - 278,181
Deferred financing costs 11,152,830 346,328
------------ ------------
Total assets $145,104,117 $105,133,458
============ ============
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GLOBE HOLDINGS, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Unaudited Unaudited
12/31/98 12/31/97
------------- ------------
<S> <C> <C>
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 6,012,045 $ 7,440,456
Accrued expenses 12,610,361 4,826,581
Dividend payable - 50,000
Note payable 11,300,000 2,475,000
Taxes payable - 1,027,915
Long-term lease obligations due within one year 34,153 36,659
Long-term debt obligations due within one year - 7,500,000
------------- ------------
Total current liabilities 29,956,559 23,356,611
Long-term debt 115,000,000 46,875,000
Senior subordinated notes 150,000,000 -
Senior discount notes 25,854,585 -
Long-term lease obligation 43,509 30,436
Other long-term liability 4,090,280 3,762,284
Stockholders' equity
Preferred stock 291 -
Common stock, Class A - 1,990
Common stock, Class B - 16,147
Common stock, Class C 21,792 -
Paid in capital 43,679,623 10,784,973
Retained earnings (223,542,522) 56,468,495
------------- ------------
(179,840,816) 67,271,605
Less treasury stock, at cost:
Common, Class A - (4,187,403)
Common, Class B - (28,656,575)
------------- ------------
- (32,843,978)
Unearned compensation - (3,318,500)
------------- ------------
Total stockholders' equity (179,840,816) 31,109,127
------------- ------------
Total liabilities & stockholders' equity $ 145,104,117 $105,133,458
============= ============
</TABLE>
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GLOBE HOLDINGS, INC.
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
--------------------------- -----------------------------
12/31/98 12/31/97 12/31/98 12/31/97
<S> <C> <C> <C> <C>
Net Sales $37,571,818 $43,633,836 $170,892,710 $170,940,527
Cost of sales 26,553,504 28,911,878 111,235,478 115,098,707
----------- ----------- ------------ ------------
Gross Margin 11,018,314 14,721,958 59,657,232 55,841,820
Selling, general & administrative expenses 4,629,544 8,572,980 23,894,804 24,380,755
Research & development expenses 1,118,891 680,063 4,263,187 2,632,843
----------- ----------- ------------ ------------
Operating income 5,269,879 5,468,915 31,499,241 28,828,222
Other income (expense):
Interest, net (7,415,613) (891,540) (14,154,322) (3,967,417)
Transaction compensation expense 0 - (5,778,000) -
Miscellaneous 101,833 139,147 749,222 371,673
----------- ----------- ------------ ------------
Income before income taxes (2,043,901) 4,716,522 12,316,141 25,232,478
Provision for income taxes (820,603) 668,315 4,572,531 8,383,324
----------- ----------- ------------ ------------
Income before extraordinary item (1,223,298) 4,048,207 7,743,610 16,849,154
Extraordinary item:
Loss from write-off of deferred financing cost,
net of tax benefit of $112,000 and $176,700
at Dec. 31, 1998 and Dec. 31, 1997, respectively 0 - 186,630 300,894
----------- ----------- ------------ ------------
Net income $(1,223,298) $ 4,048,207 $ 7,556,980 $ 16,548,260
=========== =========== ============ ============
</TABLE>
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GLOBE HOLDINGS, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
<S> <C> <C>
Twelve Months Ended
-------------------
Unaudited Audited
12/31/98 12/31/97
--------- --------
Operating Activities
Net Income $7,556,980 $16,548,257
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 11,109,622 9,416,793
Amortization of unearned compensation 3,318,500 2,790,750
Accretion on discounted note 1,472,655 -
Extraordinary charge - write-off of deferred finance cost 298,630 477,594
Provision for losses on accounts receivable 1,392,931 691,030
Deferred income tax provision (benefit) (538,000) (2,455,000)
Other post-retirement benefits charge 327,996 241,018
Increase (decrease) in cash from changes in
assets and liabilities:
Accounts receivable 573,131 (4,126,873)
Inventories (4,616,684) (1,951,948)
Prepaid expenses and other assets 28,192 (38,815)
Accounts payable (1,428,411) 263,574
Accrued expenses 7,783,777 (356,912)
Taxes Payable (3,974,960) (1,177,799)
-------------- --------------
Net cash provided by operating activities 23,304,359 20,321,669
Investing Activities
Operational capital expenditures (9,922,660) (5,069,256)
Plant expansion capital expenditures:
Thirty-two cell expansion (97,994) (8,621,607)
Fifty-six cell expansion (23,931,326) (3,410,341)
Note receivable collected from stockholders 278,181 (14,432)
Investment - -
Receivable from joint venture (110,104) (1,694,108)
-------------- --------------
Net cash used in investing activities (33,783,903) (18,809,944)
Financing Activities
Net change in note payable 8,825,000 (275,000)
Borrowing on long-term debt 119,400,000 15,000,000
Principal payments on long-term debt (58,775,000) (8,375,000)
Principal payments on capital lease obligation (52,497) (96,597)
Redemption of preferred stock - (8,000,000)
Deferred financing costs (11,791,005) (402,983)
Issuance of senior subordinate notes 150,000,000 -
Issuance of senior discount notes 25,000,000 -
Issuance of preferred stock 21,530,182 -
Issuance of common stock 14,353,454 -
Distribution to Company stockholders for recapitalization (258,327,161) -
Cash surrender value of life insurance, net (141,772) 595,629
Payment of dividends (50,000) (1,112,222)
-------------- --------------
Net cash provided by (used in) financing activities 9,971,201 (2,666,173)
Net increase/(decrease) in cash and cash equivalents (508,343) (1,154,448)
Cash and cash equivalents at beginning of year 1,946,820 3,101,268
-------------- --------------
Cash and cash equivalents at end of period $1,438,477 $1,946,820
============== ==============
</TABLE>
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Globe Holdings Inc.
EBITDA
For Period Ending: December 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1998
ACTUAL BUDGET
<S> <C> <C>
Net Income $7,556,980 $7,843,031
Add:
Income Taxes $4,572,531 $4,830,786
Interest, net $14,154,322 $13,551,711
Depreciation $10,423,750 $10,278,227
Amortization of pre-operating expenses $0 $0
Amortization of deferred finance charges $47,698 $47,698
Write-off of deferred finance charge $186,630 $186,630
Transaction compensation expenses $5,778,000 $5,778,000
Non-recurring legal expenses $67,000 $0
Bad debt $130,000 $0
Transaction costs $146,963 $0
FAS 106 $260,996 $602,773
-----------------------------------
TOTAL EBITDA $43,324,870 $43,118,856
===================================
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial condition
and results of operations is qualified in its entirety by, and should be read in
conjunction with, the consolidated financial statements of the Company and
related notes thereto included elsewhere in this Prospectus. This discussion
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those anticipated in the
forward-looking statements as a result of certain factors including, but not
limited to, those discussed in "Risk Factors," "Business" and elsewhere in this
Prospectus. The Company disclaims any obligation to update information contained
in any forward-looking statement. See "Risk Factors-Risks Regarding
Forward-Looking Statements."
Results of Operations
The following table sets forth for the periods indicated information
derived from the consolidated financial statements of income expressed as a
percentage of net sales. There can be no assurance that the trends in sales
growth or operating results will continue in the future.
<TABLE>
<CAPTION>
Year Ended December 31
----------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0%
Cost of sales 72.5% 67.3% 65.1%
Gross margin 27.5% 32.7% 34.9%
Selling, general & administrative expenses 14.2% 14.3% 14.0%
Research and development expenses 1.7% 1.5% 2.5%
Operating income 11.6% 16.9% 18.4%
</TABLE>
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997
Net sales of the Company for 1998 were $170.9 million, remaining consistent
with 1997. An 8.5% increase in fine denier spandex sales were offset by a 20.6%
decrease in latex fiber sales. Heavy denier spandex sales remained consistent
with 1997. The current economic crisis in Asia which has resulted in an influx
of fiber, fabric and apparel into Europe from Asia, resulting in a negative
impact on prices and the Company's sales in Europe. In addition, economic
difficulties in Russia have resulted in reduced demand for the Company's
products. Continued economic difficulties may precipitate further downturns in
spandex fiber consumption in all of Globe's export markets.
Gross margin of the Company for 1998 increased $3.9 million, or 3.4%, to
$59.7 million from $55.8 million for the corresponding period in 1997. The
Company's gross margin as a percentage of net sales increased to 34.9% from 1998
from 32.7% in 1997. The increase in gross margin was primarily due to a
favorable shift in product mix toward higher margin fine denier spandex fiber
products. Fine denier spandex fiber sales represented 53.6% of total net sales
in
1
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1998 compared to 49.4% in 1997.
Selling, general and administrative expenses for the Company in 1998
increased $0.3 million, or 1.4%, to $23.9 million from $23.6 million in 1997. As
a percentage of net sales, selling, general and administrative expenses
decreased to 14.0% in 1998 from 14.3% in 1997.
Research and development expenses for the Company in 1998 increased $1.7
million, or 61.9%, to $4.3 million from $2.6 million in 1997. Research and
development expenses for the Company as a percentage of net sales increased to
2.5% in 1998 from 1.55% in 1997. The increase is primarily attributed to the
development of a new heavy denier spandex fiber.
Net interest expense for the Company in 1998 increased $10.2 million to
$14.2 million from $4.0 million in 1997. The increase in interest expenses was
directly attributable to the recapitalization of the Company.
Year Ended December 31, 1997 compared to Year Ended December 31, 1996
Net sales of the Company for 1997 increased $18.3 million, or 12.0%, to
$170.9 million from $152.6 million in 1996. The increase in sales was primarily
due to a 5.3% increase in the Company's average fine denier spandex fiber prices
and a 17.7% increase in fine denier spandex fiber volume. The increase in
average spandex fiber prices was primarily due to strong market demand, improved
acceptance of the Company's products in higher-priced markets, and cost
reductions related in improved efficiencies.
Gross margin of the company for 1997 increased $13.8 million, or 32.9%, to
$55.8 million from $42.0 million in 1996. The Company's gross margin as a
percentage of net sales increased to 32.7% in 1997 from 27.5% in 1996. The
increase in gross margin reflects a reduction in fine denier spandex fiber unit
costs attributable to economies of scale created by an increase in fine denier
spandex fiber capacity at the Company's Tuscaloosa, Alabama facility, gains in
efficiencies achieved through improved production processes and a decline in
latex raw material costs. The increase in gross margin also reflects a favorable
shift in product mix toward higher margin fine denier spandex fiber products.
Fine denier spandex fiber sales represented 49.4% of total net sales in 1997
compared to 44.2% in 1996.
Selling, general and administrative expenses for the Company in 1997
increased $2.7 million, or 12.4%, to $24.4 million from $21.7 million in 1996.
The increase in selling, general and administrative expenses was primarily
attributable to the higher level of net sales achieved in 1997. As a percentage
of net sales, selling, general and administrative expenses increased to 14.3% in
1997 from 14.2% in 1996.
Research and development expenses for the Company in 1997 increased $0.1
million, or 4.0%, to $2.6 million from $2.5 million in 1996. Research and
development expenses for the Company as a percentage of net sales decreased to
1.5% in 1997 from 1.7% in 1996. The
2
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decrease was primarily due to the higher level of net sales attained in 1997.
Net interest expense for the Company in 1997 decreased $1.3 million, or
24.5%, to $4.0 million from $5.3 million in 1996. The decrease in interest
expense was primarily due to a decline in interest rates and the capitalization
of $0.5 million of interest expense in 1997 in connection with a capital
expansion project.
Liquidity and Capital Resources
Cash provided by operating activities was $21.9 million in 1996, $20.3
million in 1997 and $23.3 million in 1998. The reduction in cash provided by
operating activities in 1997 was due to increases in accounts receivable,
inventory balances and deferred tax assets, and a reduction in taxes payable,
partially offset by an increase in amortization of unearned compensation. The
increase in cash provided by operating activities for 1998 was primarily due to
increases in accrued expenses, depreciation and amortization, amortization of
unearned compensation, accretion on discounted notes, and decreases in accounts
receivable and prepaid expenses, partially offset by decreases in accounts
payable, taxes payable, and an increase in inventory. The average days sales
outstanding for accounts receivable was approximately 54, 56 and 57 days for the
years ended 1996, 1997 and 1998, respectively. The increase in average days
sales outstanding was primarily attributable to an increase in foreign sales,
which have a longer payment cycle than domestic sales as a result of longer
shipping times and extended credit terms required by foreign competition.
Foreign sales represented 27.5% and 31.8% of sales for the year ended December
31, 1997 and 1998, respectively. Management does not expect that the increasing
days sales outstanding will have a material impact on future results of
operations and liquidity.
The Company's inventory increased from $11.8 million at December 31, 1996
to $13.8 million at December 31, 1997. This increase was primarily due to higher
fine denier production capacity and anticipated higher heavy denier sales
levels. The Company's inventories increased from $13.8 million at December 31,
1997 to $18.4 million at December 31, 1998. This increase was primarily due to
higher fine denier production capacity which outpaced the increase in demand.
The Company's accounts payable increased from $7.2 million at December 31,
1996 to $7.4 million at December 31, 1997. The increase in accounts payable was
attributable to capital expenditures incurred to increase fine denier spandex
fiber capacity. The Company's accounts payable decreased from $7.4 million at
December 31, 1997 to $6.0 million at December 31, 1998. The decrease was
primarily due to the completion of the expansion projects.
The Company has historically financed its operations and acquisitions
through a combination of internally generated funds and borrowings under its
existing credit agreement. The Company financed the construction of the
Tuscaloosa plant, as well as the subsequent expansions of the facility, under
its existing credit facilities.
3
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Capital expenditures were $5.8 million in 1996, $17.1 million in 1997 and
$34.0 million in 1998. Capital expenditures incurred during 1996 consisted
primarily of general maintenance and process improvement expenditures, and the
capital expenditures incurred during 1997 and 1998 consisted primarily of
expenditures for the expansion of the Tuscaloosa facility and general
maintenance and process improvement expenditures.
In connection with the Transactions, Globe Manufacturing entered into the
Senior Credit Facility enabling Globe Manufacturing to borrow up to $165.0
million, subject to certain borrowing conditions. The Senior Credit Facility is
fully secured and consists of a $115.0 million term loan facility, which was
fully drawn upon the consummation of the Transactions, and a $50.0 million
revolving loan facility, $11.3 million of which was outstanding at December 31,
1998. The revolving loan facility is available for general corporate and working
capital purposes. The obligations of Globe Manufacturing under the Senior Credit
Facility and fully and unconditionally guaranteed by the Company. In connection
with the Transactions, Globe Manufacturing also issued $150.0 million in
aggregate principal amount of the Old Senior Subordinated Notes.
After consummation of the Initial Offering and the other Transactions, the
Company's total consolidated debt significantly increased. Interest payments on
the Senior Subordinated Notes and under the Senior Credit Facility represent
significant liquidity requirements for the Company. The Senior Subordinated
Notes require semi-annual interest payments and interest on the loans under the
Senior Credit Facility is due at least quarterly. The Company is a holding
company with no operations of its own and its only material asset is the capital
stock of Globe Manufacturing (all of which is pledged to secure obligations
under the Senior Credit Facility). The Senior Credit Facility and the Senior
Subordinated Note Indenture impose, and agreements entered into in the future
may impose, significant restrictions on distributions and the making of loans by
Globe Manufacturing to the Company. Accordingly, repayments of the Notes may
depend upon the ability of the Company to effect an equity offering or to
refinance the Notes.
Although there can be no assurance, the Company anticipates that its
consolidated cash flow generated from operations and borrowings under the Senior
Credit Facility will be sufficient to fund the Company's working capital needs,
planned capital expenditures, scheduled interest payments (including interest
payments on the Senior Subordinated Notes and amounts outstanding under the
Senior Credit Facility) and other cash needs for the next twelve months.
However, the Company may require additional funds if it enters into strategic
alliances, acquires significant assets or businesses or makes significant
investments in furtherance of its growth strategy. The ability of the Company to
satisfy its capital requirements will be dependent upon the future financial
performance of the Company, which in turn will be subject to general economic
conditions and to financial, business, and other factors, including factors
beyond the Company's control.
Instruments governing the Company's indebtedness, including the Indenture,
the Senior Credit Facility and the Senior Subordinated Note Indenture, contain
financial and other covenants that restrict, among other things, the Company's
ability to incur additional indebtedness, incur
4
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liens, pay dividends and make certain other restricted payments, consummate
certain asset sales, enter into certain transactions with affiliates, merge or
consolidate with any other person or sell, assign, transfer, lease, convey or
otherwise dispose of substantially all of the assets of the Company. Such
limitations, together with the highly leveraged nature of the Company, could
limit corporate and operating activities, including the Company's ability to
respond to market conditions, to provide for unanticipated capital investments
or to take advantage of business opportunities.
As of January 28, 1999, in response to lower than expected earnings, the
Senior Credit Facility was amended such that (i) certain leverage ratio tests
were waived and certain covenants were amended, (ii) the interest rates on both
the term loans and revolving loans were increased and (iii) the management fee
due to an affiliate of Code Hennessy & Simmons LLC may only be paid if certain
leverage tests are met.
Impact of Year 2000 Issue
The year 2000 issue is the result of computer programs written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000.
If the Company, its significant customers or suppliers fail to make
necessary modifications and conversions on a timely basis, the year 2000 issue
could have a material adverse effect on Company operations. However, the impact
cannot be quantified at this time. The Company believes that its competitors
face similar risks.
The Company has established a corporate-wide project team to identify
non-compliant software and complete the corrections required for the year 2000
issue. The Company has completed its repairs for major manufacturing systems in
all locations. The Company also completed its repair of its major financial
systems. The Company's current target is to resolve compliance issues in its
distribution systems and other ancillary systems by March 31, 1999. The Company
also has made inquiry of its major customers and suppliers to assess their
compliance. Nevertheless, there can be no absolute assurance that there will not
be a material adverse effect on the Company if third party governmental or
business entities do not convert or replace their systems in a timely manner and
in a way that is compatible with the Company's systems.
Costs related to the year 2000 issue are funded through operating cash
flows. Through December 31, 1998, the Company expended approximately $157,000 in
systems development and remediation efforts, including the cost of new software
and modifying the applicable code of existing software. The Company estimates
remaining costs to be between $25,000 and $75,000. The Company presently
believes that the total cost of achieving year 2000 compliant systems is not
expected to be material to the Company's financial condition, liquidity or
results of operations.
5
<PAGE>
Time and cost estimates are based on currently available information.
Developments that could affect estimates include, but are not limited to, the
availability and cost of trained personnel, the ability to locate and correct
all relevant computer code and systems and remediation success of the Company's
customers and suppliers.
Inflation
The Company does not believe that inflation has had any material effect on
the Company's business over the past three years.
Impact of New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("Statement 130"), which establishes standards for the reporting and
display of comprehensive income and its components in a full set of general
purpose financial statements. Statement 130 is effective for fiscal years
beginning after December 15, 1997. Disclosure of total comprehensive income is
required in interim period financial statements. Management does not believe
that comprehensive income for prior periods will differ significantly from net
income in those periods.
In June, 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, Disclosures about Segments of an Enterprise and Related Information
("Statement 131"), which is effective for years beginning after December 15,
1997. However, Statement 131 need not be applied to interim financial statements
in the initial year of application. Statement 131 establishes standards for the
way that public business enterprises report information about operating segments
in annual financial statements and requires that those enterprises report
selected information about operating segments in interim financial reports. It
also establishes standards for related disclosures about products and services,
geographic areas, and major customers. Since Statement 131 is effective for
financial statements for fiscal years beginning after December 15, 1997, the
company will adopt the new requirements retroactively in 1998. Management does
not believe that the adoption of statement 131 will have a significant impact on
the Company's presentation of financial statements.
In February 1998, the FASB issued Statement of Financial Accounting
Standards No. 132, Employers' Disclosures about Pensions and Other
Post-retirement Benefits ("Statement 132"), that revises disclosure requirements
of FASB statements No. 87, Employers' Accounting for Pensions, and No. 106,
Employers' Accounting for Post-retirement Benefits Other Than Pensions.
Statement 132 is effective for fiscal years beginning after December 15, 1997.
The Statement does not change the recognition or measurement of pension or
post-retirement benefit plans, but standardizes disclosure requirements for
pensions and other post-retirement benefits, eliminates certain disclosures and
requires additional information. Management does not anticipate that the
adoption of Statement 132 will have a material impact on its financial position
or the results of its operations.
6
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In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and for Hedging Activities
("Statement 133"). Statement 133 is effective for years beginning after June 15,
1999. Statement 133 provides a comprehensive and consistent standard for the
recognition and measurement of derivatives and hedging activities. Management
does not anticipate that the adoption of Statement 133 will have a material
impact on its financial position or the results of its operations.
7
