UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED April 4, 1998
Commission File Number 0-5680
BURKE MILLS, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0506342
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
191 Sterling Street, N.W.
Valdese, North Carolina 28690
(Address of principal executive offices) (Zip Code)
(828) 874-6341
(Registrant's telephone number, including area code)
No Changes
(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 ____
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. As of May 4, 1998,
there were outstanding 2,741,168 shares of the issuer's only class of common
stock.
Page 1 of 18
<PAGE>
BURKE MILLS, INC.
INDEX
PART 1 - FINANCIAL INFORMATION Page Number
Item 1 - Financial Statements
Condensed Balance Sheets
April 4, 1998 and January 3, 1998 3
Condensed Statements of Operations and
Retained Earnings
Thirteen Weeks Ended April 4, 1998
and March 29, 1997 4
Statements of Cash Flows
Thirteen Weeks Ended April 4, 1998
and March 29, 1997 5
Notes to Condensed Financial Statements 6
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results of
Operations 12
Part II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 16
Item 6(a)- Exhibit 27 - Financial Data Schedule 17
<PAGE>
BURKE MILLS, INC.
CONDENSED BALANCE SHEETS
April 4, January 3,
1998 1998
(Unaudited) (Note A)
ASSETS
Current Assets
Cash and cash equivalents $ 4,012,520 $ 4,306,540
Accounts receivable 4,501,448 3,771,301
Inventories 3,298,695 3,006,298
Prepaid expenses and other current
assets 215,546 38,832
Deferred income taxes 543,310 661,700
Total Current Assets 12,571,519 11,784,671
Equity Investment in Affiliate 231,928 177,728
Property, Plant and Equipment - at cost 26,665,036 26,350,679
Less: Accumulated depreciation 14,558,423 14,158,330
Property, Plant and Equipment - Net 12,106,613 12,192,349
Other Assets
Deferred charges 193,781 193,316
$25,103,841 $24,348,064
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt $ 750,000 $ 687,500
Accounts payable 2,664,283 2,081,237
Accrued salaries, wages and vacation pay 279,663 191,128
Other liabilities and accrued expenses 377,984 417,821
Total Current Liabilities 4,071,930 3,377,686
Long-term Debt 5,062,500 5,312,500
Deferred Income Taxes 2,223,000 2,218,300
Total Liabilities 11,357,430 10,908,486
Shareholders' Equity
Common stock, no par value
(stated value, $.66)
Authorized - 5,000,000 shares
Issued and outstanding -
2,741,168 shares 1,809,171 1,809,171
Paid-in capital 3,111,349 3,111,349
Retained earnings 8,825,891 8,519,058
Total Shareholders' Equity 13,746,411 13,439,578
$25,103,841 $24,348,064
Note A: The January 3, 1998 Condensed Balance Sheet has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required for generally accepted accounting principles
for complete financial statements.
See notes to condensed financial statements
<PAGE>
BURKE MILLS, INC.
CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Unaudited)
Thirteen Weeks Ended
April 4, March 29,
1998 1997
Net Sales $10,649,403 $10,060,164
Costs and Expenses
Cost of Sale 9,387,901 9,060,745
Selling, General and Administrative Expenses 697,433 624,776
Factor's Charges 47,371 44,846
Total Costs and Expenses 10,132,705 9,730,367
Operating Earnings 516,698 329,797
Other Income
Interest Income 47,462 27,649
Other, net -- 668
Total 47,462 28,317
Other Expenses
Interest Expense 119,639 122,691
Other, net 30,388 --
Total 150,027 122,691
Income before Income Taxes and Equity
in Net Earnings of Affiliate 414,133 235,423
Equity in Net Earnings of Affiliate 54,200 --
468,333 235,423
Provision for Income Taxes 161,500 92,085
Net Income 306,833 143,338
Retained Earnings at Beginning of Period 8,519,058 7,892,954
Retained Earnings at End of Period $ 8,825,891 $ 8,036,292
Earnings Per Share $ .11 $ .05
Dividends Per Share of Common Stock None None
Weighted Average Common Shares
Outstanding 2,741,168 2,741,168
See notes to condensed financial statements.
<PAGE>
Burke Mills, Inc.
STATEMENTS OF CASH FLOWS
(Unaudited)
Thirteen Weeks Ended
April 4, March 29,
1998 1997
Cash flows from operating activities
Net income $ 306,833 $ 143,338
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 400,093 388,834
Equity in earnings of affiliate (54,200) --
Provision for deferred income taxes 123,090 92,086
Changes in assets and liabilities:
Accounts receivable (730,147) (927,616)
Inventories (292,397) 423,106
Prepaid expenses, taxes & other
current assets (176,714) (34,718)
Other non-current assets (465) --
Accounts payable 583,046 294,861
Accrued salaries, wages & vacation pay 88,535 126,163
Other liabilities and accrued expenses (39,837) 127,289
Total Adjustments (98,996) 490,005
Net cash provided by operating activities 207,837 633,343
Cash flows from investing activities:
Acquisition of property, plant and
equipment (314,357) (220,507)
Net cash used by investing activities (314,357) (220,507)
Cash flows from financing activities:
Principal payments of long-term debt (187,500) --
Net cash used by financing activities (187,500) --
Net increase (decrease) in cash and
cash equivalents (294,020) 412,836
Cash and cash equivalents at beginning
of year 4,306,540 2,157,428
CASH AND EQUIVALENTS AT END OF
FIRST QUARTER $4,012,520 $2,570,264
See notes to condensed financial statements
<PAGE>
BURKE MILLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements 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 information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all necessary adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the thirteen week
period ended April 4, 1998 are not necessarily indicative of the results that
may be expected for the year ended January 2, 1999. For further information,
refer to the financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended January 3, 1998.
NOTE 2 - STATEMENTS OF CASH FLOWS
For the purposes of the statements of cash flows, the Company
considers cash on hand, deposits in banks, interest bearing demand matured
funds on deposit with factor, and all highly liquid debt instruments with a
maturity of three months or less when purchased as cash and cash equivalents.
FASB No. 95 requires that the following supplemental disclosures to
the statements of cash flows be provided in related disclosures. Cash paid for
interest for the thirteen weeks ended April 4, 1998 and March 29, 1997 was
$119,000 and $121,000, respectively. No income taxes were paid during the
thirteen weeks ended April 4, 1998 and March 29, 1997.
NOTE 3 - OPERATIONS OF THE COMPANY
The Company is engaged in twisting, texturing, winding, dyeing,
processing and selling of filament, novelty and spun yarns, and in the dyeing
and processing of these yarns for others on a commission basis.
The Company's fiscal year is the 52 or 53 week period ending on the
Saturday nearest to December 31. Its fiscal quarters also end on the
Saturday nearest to the end of the calendar quarter.
<PAGE>
BURKE MILLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
NOTE 4 - USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
NOTE 5 - ACCOUNTS RECEIVABLE
Accounts receivable are comprised of the following:
April 4, January 3,
1998 1998
Account current - Factor:
Due from Factor on regular
factoring account........ $3,879,000 $3,328,000
Non-factored accounts
receivable............... 622,000 443,000
$4,501,000 $3,771,000
NOTE 6 - INVENTORIES
Inventories are summarized as follows:
April 4, January 3,
1998 1998
Finished and in process.... $1,974,000 $1,813,000
Raw Materials.............. 758,000 716,000
Dyes and Chemicals......... 447,000 337,000
Other...................... 120,000 140,000
$3,299,000 $3,006,000
NOTE 7 - LINE OF CREDIT
Pursuant to a loan agreement dated March 29, 1996, the Company
secured a line of credit facility from its bank wherein it may borrow, repay
and reborrow amounts from the line of credit facility for short-term working
capital needs. The aggregate principal amount outstanding at any time under
this loan may not exceed the lesser of $2,000,000 and the borrowing base (as
defined). Interest on this loan facility is at a rate that varies with the
Libor Rate and is payable on the last day of each month. The line of credit
loan matures annually on April 30 and may be renewed at the sole discretion
of the bank. There were no outstanding loans under this agreement as of
April 4, 1998 or March 29, 1997.
<PAGE>
BURKE MILLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
NOTE 8 - LONG-TERM DEBT
On March 29, 1996, the Company entered into a new loan agreement with
its bank providing for a term loan of $6,000,000 and, as discussed in Note 7
above, a line of credit facility of $2,000,000 for ongoing, short-term working
capital needs. The new term loan refinanced two formerly existing term loans,
and accordingly, all term obligations were consolidated into the one $6,000,000
obligation. This new loan is secured by (1) a first Deed of Trust on property
and buildings located at the Company's manufacturing sites in North Carolina,
(2) a first lien position on the new equipment and machinery installed at these
manufacturing sites and (3) a first lien position on the existing machinery and
equipment located at the Company's manufacturing sites.
Under the new term loan agreement, interest only will be payable
monthly until February, 1998. Thereafter, principal maturities will be payable
in the amount of $62,500 per month for ninety-six consecutive months plus
interest at the fixed rate of 8.06%. In order to effect this fixed interest
rate hedge, the bank converted its interest rate cap into a fixed rate loan by
entering into a fixed rate hedge contract with the Company. Under this fixed
rate hedge contract, the Company will pay the bank 8.06% for the term of the
contract. The floating rate (LIBOR plus 1.9%) that the Company will pay the
bank will be equal to the floating rate that the bank's capital markets will
pay to the Company. Whether LIBOR rates rise or fall over the life of the
loan agreement , the Company will continue to pay the bank a fixed rate of
8.06% for the life of the contract, thereby creating a fixed loan.
Among other things, covenants include a debt service coverage ratio,
a limit on annual property asset acquisitions exclusive of property acquired
with the loan proceeds under this new loan agreement, the retirement or
acquisition of the Company's capital stock in excess of a stated amount, the
maintenance of a minimum tangible net worth which shall increase by a stated
amount annually, a minimum quick ratio, and a maximum debt to tangible net
worth ratio.
The annual principal maturities of long-term debt at April 4, 1998
are as follows:
Current portion $ 750,000
1999/2000 750,000
2000/2001 750,000
2001/2002 750,000
2002/2003 750,000
Thereafter 2,062,500 5,062,500
$5,812,500
<PAGE>
BURKE MILLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
NOTE 9 - INCOME TAXES
The Company uses the liability method as required by FASB statement
109, "Accounting for Income Taxes". Under this method, deferred tax assets
and liabilities are determined based on the differences between financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws.
The items which comprise deferred tax assets and liabilities are as
follows:
April 4, January 3,
1998 1998
Deferred Tax Assets:
Alternative minimum taxes paid $ 511,125 $ 608,825
Net Operating loss carryforward -- 12,190
Inventory capitalization 20,600 18,700
Business credits 11,585 11,585
Contributions carryforward -- 10,400
$ 543,310 $ 661,700
Deferred Tax Liabilities:
Accelerated depreciation
for tax purposes $2,223,000 $2,218,300
Thirteen Weeks Ended
April 4, March 29,
1998 1997
Provision for income taxes consist of:
Deferred $ 123,090 $ 92,085
Federal 11,430 --
State 26,980 --
$ 161,500 $ 92,085
NOTE 10 - EMPLOYEE BENEFIT PLAN
The Company is a participating employer in the Burke Mills, Inc.
Savings and Retirement Plan and Trust that has been qualified under Section
401(k) of the Internal Revenue Code. This plan allows eligible employees to
contribute a salary reduction amount of not less than 1% nor greater than 25%
of the employee's salary but not to exceed dollar limits set by law. The
employer may make a discretionary contribution for each employee out of current
net profits or accumulated net profits in an amount the employer may from time
to time deem advisable. No provision was made for a discretionary contribution
for the period ended April 4, 1998 and March 29, 1997.
<PAGE>
BURKE MILLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
NOTE 11 - CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the Company to concen-
tration of credit risk consist principally of funds on deposit with the
Company's factor and amounts due from the factor on receivables sold to the
factor on a non-recourse basis. The receivables sold to the factor during a
month generally have a maturity date on the 20th to the 25th of the following
month, at which time the amount due the Company by the factor is transferred to
matured funds on deposit with First Union National Bank. Matured funds of
$2,950,000 will be transferred to First Union National Bank on April 24, 1998.
The Company utilizes its matured funds and loans due to its bank arising from
its Line of Credit facility on a continuous basis to replenish its cash in the
bank for the payment of materials, labor, and overhead.
NOTE 12 - COMMITMENTS
(a) The Company entered into a supply agreement, dated November 23,
1996, with its joint venture company, Fytek, S.A.DE C.V. to purchase twisted
yarns. The Company agrees to purchase approximately $1,800,000 of twisted
yarn annually for the five years beginning on the startup date of the
operation.
(b) The Company entered into a supply agreement, dated November 19,
1996, with Fibras Quimicas, S.A. to purchase yarn. The Company agrees to
purchase yarn based on the schedule below, beginning February 1, 1997, for a
five year period.
Year 1 Approximately $2,600,000
Year 2 Approximately $6,400,000
Year 3 Approximately $7,100,000
Year 4 Approximately $7,700,000
Year 5 Approximately $7,700,000
(c) The Company was committed to an outstanding irrevocable import
letter of credit of $87,160 covering machinery purchases. The machinery has a
latest ship date of May 30, 1998 and the letter of credit expires July 30,
1998.
<PAGE>
BURKE MILLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
NOTE 13 - ACCOUNTING FOR POSSIBLE IMPAIRMENT OF LONG-LIVED ASSETS
In 1995, the Financial Accounting Standards Board issued Statement
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Statement No. 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
Company adopted Statement No. 121 in the first quarter of 1996 and such
adoption did not have any effect on the financial statements for 1997 or for
the thirteen weeks ended April 4, 1998.
NOTE 14 - EARNINGS PER SHARE
Earnings per share are based on the net income divided by the
weighted average number of common shares outstanding during the thirteen and
thirteen week periods ended April 4, 1998, and March 29, 1997.
<PAGE>
BURKE MILLS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
1998 Compared to 1997
The following discussion should be read in conjunction with the
information set forth under the Financial Statements and Notes thereto
included elsewhere in the 10-Q.
RESULTS OF OPERATIONS
The following table sets forth operating data of the Company as a
percentage of net sales for the periods indicated below:
Thirteen Weeks Ended
April 4, March 29,
1998 1997
Net Sales 100.0% 100.0%
Cost of Sales 88.2 90.1
Gross Profit 11.8 9.9
Selling, General, Administrative
and Factoring Costs 7.0 6.6
Operating Earnings 4.8 3.3
Interest Expense 1.1 1.2
Other (Income) - net (0.2) (0.2)
Income before Income Taxes 3.9 2.3
Equity in Net Earnings of Affiliate .5 --
Income Taxes (1.6) (.9)
Net Income 2.8% 1.4%
THIRTEEN WEEKS ENDED April 4 ,1998
COMPARED TO THIRTEEN WEEKS ENDED March 29, 1997
Net Sales
Net sales for the thirteen weeks ended April 4, 1998 (the first fiscal
quarter ) were $10,649,000, representing a 5.9% increase compared to the first
quarter 1997 sales of $10,060,000. Pounds shipped increased by 4.4% compared
to the first quarter of 1997. Sales dollars increased by a higher percentage
than pounds shipped due to an increase of 8.8% in full yarn pounds shipped and
a decrease of 15.3% in commission pounds shipped.
<PAGE>
BURKE MILLS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Cost of Sales and Gross Margin
Cost of sales for the thirteen weeks of 1998 increased by 3.6% on a
sales increase of 5.9%. The Company continued to increase the utilization of
its horizontal dyeing equipment, whereby eliminating steps in the manufacturing
process. As a result of an increase in sales of 5.9% and an increase in cost
of sales of 3.6%, gross margins improved to 11.8% of sales compared to 9.9%
in 1997.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses for the first quarter of
1998 increased by $73,000, or 11.6%, compared to 1997. Increases in compen-
sation, commissions and travel were the major contributors to the increase.
Factor's Charges
Factor's charges for the first quarter of 1998 and 1997 were 0.4% of
sales.
Interest Expense
Interest expense for the first quarter of 1998 decreased by $3,000
compared to 1997 due to a lower average long-term debt.
Interest Income
Interest income for the first quarter of 1998 increased due to an
increase in funds invested. The Company's cash flow improved and resulted in
an increase in cash available to invest.
Equity in Net Earnings of Affiliate
The Company recorded $54,200 as equity in net earnings of Fytek, S.A.
De C.V., its joint venture in Mexico. The Company's share of net earnings and
losses is 50%. Fytek began operations in the fourth quarter of 1997.
<PAGE>
BURKE MILLS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Income Before Provision for Income Taxes
For the thirteen weeks ended April 4, 1998, income before provision
for income taxes increased primarily as a result of increased sales and
improved efficiencies in the manufacturing areas.
Provision for Income Taxes
The Company recorded provision for income taxes of $161,500 for the
first quarter of 1998 compared to $92,000 for 1997. Provision for taxes on
domestic income was 39% for 1998 and 1997.
Liquidity and Capital Resources
The Company sells a substantial portion of its accounts receivable to
a commercial factor so that the factor assumes the credit risk for these
accounts and effects the collection of the receivables. The Company may borrow
from First Union National Bank based on a $2,000,000 line of credit from the
recent long-term loan agreement which borrowings are secured by the outstanding
credit balance at the factor. As of April 4, 1998, the Company had $3,879,000
due from the factor with a net of $2,950,000 to mature on April 24, 1998. The
Company entered into a new loan agreement effective March 29, 1996 providing
for a term loan of $6,000,000 and a working capital facility of $2,000,000.
Under the provisions of the loan agreement, the Company may borrow up to
$2,000,000 for seasonal working capital requirements using the credit balance
due from the factor as security.
The Company's working capital at April 4, 1998 aggregated $8,500,000
representing a working capital ratio of 3.1 to 1 compared with a working
capital of $8,407,000 at January 3, 1998 and a working capital ratio of
3.5 to 1.
As a measure of current liquidity, the Company's quick position (cash,
cash equivalents and receivables over current liabilities) discloses the
following at April 4, 1998:
Cash, cash equivalents and receivables........... $8,514,000
Current liabilities.............................. 4,072,000
Excess of quick assets over current liabilities.. $4,442,000
The Company believes that its cash, cash equivalents and receivables,
and its factoring and credit arrangements will be sufficient to finance its
operations for the next 12 months.
<PAGE>
BURKE MILLS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Liquidity and Capital Resources (continued)
The results of operations of the Company for the periods discussed
have not been significantly affected by inflation.
During the thirteen weeks of 1998, the Company acquired and made
deposits on new machinery and equipment of approximately $314,000 as
set forth in the accompanying statement of cash flows. For the balance of
1998, the Company anticipates the acquisition of machinery and equipment of
approximately $2,886,000 which, together with the acquisitions and deposits
on acquisitions incurred to April 4, 1998, will aggregate an anticipated
acquisition of new machinery of approximately $3,200,000 in 1998. The Company
plans to finance its capital from cash provided from operations and bank
financing.
The Company has initiated discussions with it significant suppliers,
large customers and financial institutions to ensure that those parties have
appropriate plans to remedy Year 2000 issues where their systems interface
with the Company's systems or otherwise impact its operations. The Company
will assess the extent to which its operations are vulnerable should those
organizations fail to remedy properly their computer systems. While the
Company believes its planning efforts are adequate to address its Year 2000
concerns, there can be no guarantee that the systems of other companies on
which the Company's systems and operations rely will be converted on a timely
basis and will not have a material effect on the Company.
<PAGE>
BURKE MILLS, INC.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on 8-K
(a) Exhibits - Financial Data Schedule
(b) Reports on Form 8-K - No report on Form 8-K has been filed during
the thirteen weeks April 4, 1998.
<PAGE>
BURKE MILLS, INC.
Financial Data Schedule
Pursuant to Item 601(c) of Regulation S-K
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS INCLUDED IN THE QUARTERLY REPORT
ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS FOR THE THIRTEEN WEEKS ENDED
April 4, 1998
ITEM NUMBER ITEM DESCRIPTION AMOUNT
5-02(1) Cash and cash items $4,012,520
5-02(2) Marketable securities 0
5-02(3)(a)(1) Notes and accounts receivable - trade 4,501,448
5-02(4) Allowances for doubtful accounts 0
5-02(6) Inventory 3,298,695
5-02(9) Total current assets 12,571,519
5-02(13) Property, plant and equipment 26,665,036
5-02(14) Accumulated depreciation 14,558,423
5-02(18) Total assets 25,103,841
5-02(21) Total current liabilities 4,071,930
5-02(22) Bonds, mortgages and similar debt 5,062,500
5-02(28) Preferred stock- mandatory redemption 0
5-02(29) Preferred stock-no mandatory redemption 0
5-02(30) Common stock 1,809,171
5-02(31) Other stockholders' equity 11,937,240
5-02(32) Total liabilities and stockholders' Equity 25,103,841
5-03(b)1(a) Net sales of tangible products 10,649,403
5-03(b)1 Total revenues 10,649,403
5-03(b)2(a) Cost of tangible goods sold 9,387,901
5-03(b)2 Total costs and expenses applicable
to sales and revenues 9,387,901
5-03(b)3 Other costs and expenses 0
5-03(b)5 Provision for doubtful accounts and notes 0
5-03(b)(8) Interest and amortization of debt discount 119,639
5-03(b)(10) Income before taxes and other items 468,333
5-03(b)(11) Income tax expense 161,500
5-03(b)(14) Income/loss continuing operations 306,833
5-03(b)(15) Discontinued operations 0
5-03(b)(17) Extraordinary items 0
5-03(b)(18) Cumulative effect - changes in accounting
principles 0
5-03(b)(19) Net income or loss 306,833
5-03(b)(20) Earnings per share - primary $.11
5-03(b)(20) Earnings per share - fully diluted $.11
<PAGE>
BURKE MILLS, INC.
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.
BURKE MILLS, INC.
(Registrant)
Date: May 18, 1998 /s_________________________
Charles P. McCamy
(President)
Date: May 18,1998 /s_________________________
Thomas I. Nail
(Vice President Finance)
(Principal Accounting Officer)
(Principal Financial Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-END> APR-04-1998
<CASH> 4,012,520
<SECURITIES> 0
<RECEIVABLES> 4,501,448
<ALLOWANCES> 0
<INVENTORY> 3,298,695
<CURRENT-ASSETS> 12,571,519
<PP&E> 26,665,036
<DEPRECIATION> 14,558,423
<TOTAL-ASSETS> 25,103,841
<CURRENT-LIABILITIES> 4,071,930
<BONDS> 5,062,500
0
0
<COMMON> 1,809,171
<OTHER-SE> 11,937,240
<TOTAL-LIABILITY-AND-EQUITY> 25,103,841
<SALES> 10,649,403
<TOTAL-REVENUES> 10,649,403
<CGS> 9,387,901
<TOTAL-COSTS> 9,387,901
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 119,639
<INCOME-PRETAX> 468,333
<INCOME-TAX> 161,500
<INCOME-CONTINUING> 306,833
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 306,833
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
