UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
--------------------------------------------
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: 0-22138
---------------------------------------------------
Triangle Pacific Corp.
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- ---------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
94-2998971
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(I.R.S. Employer Identification No.)
16803 Dallas Parkway, Dallas, Texas 75248
- ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(214) 931-3000
- ---------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- ---------------------------------------------------------------------------
(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. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
14,662,609 Shares on September 30, 1994
TRIANGLE PACIFIC CORP. AND SUBSIDIARIES
INDEX
PART I FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Consolidated Statements of Operations
for the nine months ended September 30, 1994 and
October 1, 1993 and for the three months ended
September 30, 1994 and October 1, 1993 4
Consolidated Balance Sheets
September 30, 1994 and December 31, 1993 5
Consolidated Statements of Cash Flows
for the nine months ended September 30, 1994
and October 1, 1993 7
Consolidated Statement of Changes in
Shareholders' Investment for the nine months
ended September 30, 1994 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 14
PART II OTHER INFORMATION 17
SIGNATURES 18
PART I FINANCIAL INFORMATION
Item I. Financial Statements
Triangle Pacific Corp. and Subsidiaries
Consolidated Financial Statements
for the Nine Months ended September 30, 1994
The consolidated financial statements included herein have been prepared by
the Company without audit. They contain all adjustments which are, in the
opinion of the management, necessary to a fair statement of the results of the
operations for the interim periods. The operating results for the interim
periods are not necessarily indicative of results to be expected for a full
year. It is suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and the notes thereto,
included in the Company's Form 10-K as of December 31, 1993.
TRIANGLE PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except earnings per share data)
Nine Months Ended Three Months Ended
-------------------- -------------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
1994 1993 1994 1993
-------- -------- -------- --------
Net sales $ 301,864 $ 252,246 $ 104,236 $ 85,911
-------- -------- -------- --------
Costs and expenses:
Cost of sales 222,158 195,193 76,060 67,637
Selling, general
and administrative 42,125 32,613 14,405 10,067
Amortization of goodwill 1,140 1,215 380 405
Interest 14,235 15,016 4,713 5,115
-------- -------- -------- --------
279,658 244,037 95,558 83,224
-------- -------- -------- --------
Income before income taxes
and extraordinary items 22,206 8,209 8,678 2,687
Provision for income taxes 8,987 3,084 3,461 852
-------- -------- -------- --------
Net income before
extraordinary items 13,219 5,125 5,217 1,835
Extraordinary items
Loss from repayment of debt - (11,307) - (11,307)
________ ________ ________ ________
Net income (loss) $ 13,219 $ (6,182) $ 5,217 $ (9,472)
======== ======== ======== ========
Per share data:
Net income before
extraordinary items $ 0.90 $ 0.64 $ 0.35 $ 0.17
======== ======== ======== ========
Net income (loss) $ 0.90 $ (0.77) $ 0.35 $ (0.88)
======== ======== ======== ========
Weighted avg. shares outstanding 14,659 8,069 14,663 10,792
Pro-forma income data:
Net income before extraordinary
items as reported $ 13,219 $ 5,125 $ 5,217 $ 1,835
Pro-forma adjustments re: 1993
recapitalization - 490 - 66
-------- -------- -------- --------
Pro-forma net income before
extraordinary items $ 13,219 $ 5,615 $ 5,217 $ 1,901
======== ======== ======== ========
Pro-forma net income before
extraordinary items, per share $ 0.90 $ 0.38 $ 0.35 $ 0.13
======== ======== ======== ========
Weighted avg. shares outstanding 14,659 14,647 14,663 14,647
The accompanying notes to consolidated financial statements are an integral
part of these statements.
TRIANGLE PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
1994 1993
ASSETS --------- ------------
Current assets:
Cash and cash equivalents $ 11,485 $ 785
Receivables (net of allowances
of $2,456 and $3,323 respectively) 46,375 39,454
Inventories 68,832 64,072
Prepaid expenses 4,547 4,273
-------- --------
Total current assets 131,239 108,584
-------- --------
Property, plant and equipment
Land 13,456 13,452
Buildings 44,098 43,382
Equipment, furniture and fixtures 77,321 65,759
-------- --------
134,875 122,593
Less: accumulated depreciation 19,284 13,171
-------- --------
115,591 109,422
Other assets:
Goodwill 59,546 60,580
Trademark 30,133 30,733
Other 13,486 11,654
Deferred financing costs 7,066 8,126
-------- --------
Total assets $ 357,061 $ 329,099
======== ========
The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.
TRIANGLE PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands)
September 30, December 31,
1994 1993
LIABILITIES AND SHAREHOLDERS' INVESTMENT --------- ------------
Current liabilities:
Current portion of long-term debt $ 1,451 $ 1,467
Accounts payable 17,233 13,336
Accrued liabilities 23,753 19,699
Income taxes payable 2,732 -
-------- --------
Total current liabilities 45,169 34,502
-------- --------
Long-term debt, net of current portion 168,783 162,897
-------- --------
Deferred income taxes 41,798 43,653
-------- --------
Total liabilities 255,750 241,052
-------- --------
Shareholders' investment:
Common stock - $.01 par value,
authorized shares - 30,000,000
issued and outstanding shares 14,662,609
at September 30, 1994 and
14,647,607 at December 31, 1993 147 146
Additional paid-in capital 93,098 93,054
Retained earnings (deficit):
Post June 8, 1992 8,066 (5,153)
-------- --------
Total shareholders' investment 101,311 88,047
-------- --------
Total liabilities and shareholders' investment $ 357,061 $ 329,099
======== ========
The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.
TRIANGLE PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) Nine Months Ended
--------------------
Sept. 30, Oct. 1,
1994 1993
Cash flows from operating activities: -------- --------
Net income (loss) $ 13,219 $ (6,182)
Adjustments:
Depreciation 6,113 5,898
Deferred income taxes (1,855) 2,262
Amortization of goodwill and trademark 1,740 1,815
Amortization of deferred financing costs 1,074 172
Amortization of original issue discount - 1,037
Extraordinary item-loss from repayment of debt - 11,307
Provision for doubtful accounts 609 390
Changes in assets and liabilities:
Receivables (6,788) (10,856)
Inventories (4,354) (18,016)
Prepaid expenses (248) (1,252)
Other assets 2,143 2,953
Accounts payable 3,747 313
Accrued liabilities 6,643 (2,185)
Accrued liabilities - interest (3,171) (552)
Income taxes payable 2,732 -
Other liabilities - (5,193)
-------- --------
Net cash provided by (used in) operating activities 21,604 (18,089)
Cash flows from investing activities: -------- --------
Acquisition of Premier Wood Floors (5,123) -
Proceeds from sale of property, plant & equipment 605 -
Additions to property, plant & equipment (10,325) (3,459)
Construction deposits (1,962) (4,292)
-------- -------
Net cash used in investing activities (16,805) (7,751)
Cash flows from financing activities: -------- --------
Long-term debt borrowings 7,048 18,500
Long-term debt payments (1,178) (217,395)
Proceeds from senior notes issued - 160,000
Sales of common stock - 79,398
Refinancing costs (14) (14,740)
Exercise of stock options 45 -
-------- --------
Net cash provided by financing activities 5,901 25,763
-------- --------
Net increase (decrease) in cash $ 10,700 $ (77)
Cash and cash equivalents, beginning of period 785 547
-------- --------
Cash and cash equivalents, end of period $ 11,485 $ 470
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 17,079 $ 14,147
Income taxes 4,982 45
The accompanying notes to consolidated financial statements are an integral
part of these statements.
TRIANGLE PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' INVESTMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
(in thousands)
Additional Retained
Common Paid-In Earnings
Stock Capital (Deficit) Total
------- ------- --------- -------
Balance,
December 31, 1993 $ 146 $ 93,054 $ (5,153) $ 88,047
Net income - - 13,219 13,219
Exercise of stock
options 1 44 - 45
------- ------- ------- -------
Balance,
September 30, 1994 $ 147 $ 93,098 $ 8,066 $101,311
======= ======= ======= =======
The accompanying notes to consolidated financial statements are an integral
part of this statement.
TRIANGLE PACIFIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - 1993 RECAPITALIZATION:
The Company filed, in August 1993, two registration statements with the
Securities and Exchange Commission and sold to the public 7,939,750 shares of
the Company's Common Stock and $160 million aggregate principal amount of 10-
1/2% Senior Notes due 2003 ("the Offerings"). The net proceeds of the
Offerings together with borrowings under a new $90 million bank credit
facility (the "New Credit Facility") were used (i) to repay the entire unpaid
balance under the Company's previously-existing senior debt financing
agreements, redeem certain previously outstanding debentures and pay related
accrued interest, for a total of approximately $227 million, and (ii) for
working capital and general corporate purposes. As a result of this repayment
of debt the Company incurred an extraordinary loss of $11.3 million, net of
tax, which was recorded in the third quarter of 1993, as a result of the
original issue discount on certain of the repaid notes as well as the premium
required to redeem the debentures.
On June 14, 1993, the Company's Board of Directors approved a
reclassification pursuant to which each share of Series A Common Stock was
changed and converted into .67 of a share of Common Stock. The
reclassification became effective upon completion of the Offerings described
above and has been reflected retroactively in the accompanying consolidated
financial statements.
Pro-forma figures for the periods on the Consolidated Statements Of
Operations assume that the Offerings occurred on the first day of fiscal 1993.
NOTE 2 -INVENTORIES:
Inventories are valued at the lower of cost or market. The last-in,
first-out (LIFO) method is used for certain lumber inventories and the first-
in, first-out (FIFO) method is used for all other inventories. Inventories
valued by the LIFO method were $20,835,000 at September 30, 1994 and
$23,965,000 at December 31, 1993. Had all inventories been valued by the FIFO
method, which approximates current cost, inventories would have been increased
by $4,065,000 at September 30, 1994 and $5,138,000 at December 31, 1993. Raw
materials inventories include purchased parts and supplies to be used in
manufactured products. Work-in-process and finished goods inventories include
material, labor and overhead costs incurred in the manufacturing process. The
major components of inventories are as follows (in thousands):
September 30, December 31,
1994 1993
-------- ------------
Raw materials $ 37,815 $ 42,045
Work-in-process 4,041 3,125
Finished goods 26,976 18,902
-------- --------
Total $ 68,832 $ 64,072
======== ========
NOTE 3 - LONG-TERM DEBT:
Long-term debt consists of the following (in thousands):
September 30, December 31,
1994 1993
-------- -----------
Mortgages payable $ 10,234 $ 4,364
Senior Notes, 10 1/2% due 8-1-2003 160,000 160,000
-------- --------
170,234 164,364
Less: Current portion of long-term debt (1,451) (1,467)
-------- --------
$ 168,783 $ 162,897
======== ========
Letters of credit outstanding at September 30, 1994 and December 31, 1993
were $9.8 million under a facility pursuant to which they can be renewed or
replaced.
Senior Notes
The Senior Notes are senior unsecured obligations of the Company with an
aggregate principal of $160 million. The Senior Notes mature on August 1,
2003 and bear interest at an annual rate of 10 1/2%, payable in two equal
semi-annual installments of $8,400,000 each, with each semi-annual period
deemed to have 180 days. The Senior Notes were issued under an Indenture (the
"Indenture") between the Company and a predecessor to Texas Commerce Bank
National Association, as Trustee (the "Trustee"). The Senior Notes rank pari
passu with all present and future senior indebtedness of the Company and
senior to all present and future subordinated indebtedness of the Company.
However, because borrowings under the New Credit Facility are secured by
inventory and accounts receivable of the Company and the proceeds thereof, the
Senior Notes are effectively subordinated to such borrowings to the extent of
such security interest.
The Senior Notes are not redeemable prior to August 1, 1998. Thereafter,
the Senior Notes are redeemable at the option of the Company at redemption
prices specified in the Indenture. The Senior Notes are not subject to any
mandatory sinking fund requirements.
Upon a "change of control" (as defined in the Indenture), the Company is
required to offer to purchase all outstanding Senior Notes at 101% of the
principal amount thereof, plus accrued interest to the date of repurchase. In
addition, the Company may be required to offer to purchase the Senior Notes at
100% of the principal amount plus accrued interest with the net cash proceeds
of certain sales or other dispositions of assets.
The Indenture contains covenants which limit, among other things, the
incurrence of additional indebtedness by the Company and its subsidiaries, the
payment of dividends on or the purchase of the capital stock of the Company
("Restricted Payments"), the creation of liens on the assets of the Company
and its subsidiaries, the creation of certain restrictions on the payment of
dividends and other distributions by the Company's subsidiaries, the issuance
of preferred stock by the Company's subsidiaries, and certain mergers, sales
of assets and transactions with affiliates.
Based on the Company's operations through September 30, 1994, the amount
of Restricted Payments that the Company could make under the Indenture was
$12,649,000.
The Indenture specifies a number of events of default including, among
others, the failure to make timely principal and interest payments or to
perform the covenants contained therein. The Indenture contains a cross-
default to other indebtedness of the Company aggregating more than $5,000,000
and certain customary bankruptcy and insolvency defaults. Upon the occurrence
of an event of default under the Indenture, the Trustee or the holders of not
less than 25% in principal amount of the outstanding Senior Notes may declare
all amounts thereunder immediately due and payable, except that such amounts
automatically become immediately due and payable in the event of a bankruptcy
or insolvency default.
New Credit Facility
The Company has entered into the New Credit Facility, which provides for
up to $90 million of revolving loans for working capital and general corporate
purposes and for letters of credit. Availability of borrowings under the New
Credit Facility is based upon a formula related to inventory and accounts
receivable. At September 30, 1994, the Company had no borrowings under the
New Credit Facility and had $54.5 million of borrowing capacity under this
facility. Borrowings under the New Credit Facility bear interest at the
agent's prime rate plus 1% (8.75% at September 30, 1994) or, at the Company's
option, at certain alternate floating rates and is secured by a pledge of the
Company's inventory and accounts receivable. The New Credit Facility expires
on August 4, 1996.
The New Credit Facility contains covenants which restrict, among other
things, the incurrence of additional indebtedness and rental obligations by
the Company and its subsidiaries, the payment of dividends and other
distributions in respect of the capital stock of the Company, the creation of
liens on the assets of the Company and its subsidiaries, the creation of
certain restrictions on the payment of dividends and other distributions by
the Company's subsidiaries, the making of investments and capital expenditures
by the Company and its subsidiaries, the creation of new subsidiaries by the
Company, and certain mergers, sales of assets and transactions with
affiliates. The New Credit Facility also contains certain financial covenants
relating to the consolidated financial condition of the Company and its
subsidiaries, including covenants relating to their net worth, the ratio of
their earnings to their fixed charges, the ratio of their earnings to their
interest expense, the ratio of their current assets to their current
liabilities, and the ratio of their indebtedness to their total
capitalization. At September 30, 1994, the Company was in compliance with all
financial covenants.
The New Credit Facility specifies a number of events of default
including, among others, the failure to make timely payments of principal,
fees, and interest, the failure to perform the covenants contained therein,
the failure of representations and warranties to be true, the occurrence of a
"change of control" (as defined in the New Credit Facility, to include, among
other things, the ownership by any person or group of more than 25% or, (in
the case of The TCW Group, Inc. and its affiliates, 40%) of the total voting
securities of the Company), and certain impairments of the security for the
New Credit Facility. The New Credit Facility also contains a cross-default to
other indebtedness of the Company aggregating more than $2,000,000 and certain
customary bankruptcy, insolvency and similar defaults. Upon the occurrence of
an event of default under the New Credit Facility, at least three of the
lenders holding at least 60% in amount of the principal indebtedness
outstanding under the New Credit Facility may declare all amounts thereunder
immediately due and payable, except that such amounts automatically become
immediately due and payable in the event of certain bankruptcy, insolvency or
similar defaults.
The New Credit Facility generally prohibits the Company from prepaying
the Senior Notes whether the prepayment would result from the redemption of
the Senior Notes, an offer by the Company to purchase the Senior Notes
following a change of control or a sale or other disposition of assets, or the
acceleration of the due date for payment of the Senior Notes.
Mortgages payable represent primarily various Industrial Revenue Bond
(IRB) notes. In June 1994, the Company entered into an industrial revenue
financing agreement in the amount of $7,000,000 with Mississippi Business
Finance Corp., a public corporation in Mississippi, to finance the expansion
of the Bruce Hardwood Floors plant in Port Gibson, Mississippi. The funds
required were provided by a bank term loan which matures on June 28, 2001.
Collateral for the loan is the plant and equipment at Port Gibson,
Mississippi. The IRB notes vary in interest rate, with several notes
dependent upon the prime rate. At September 30, 1994 and December 31, 1993
the interest rates ranged up to 9.0%.
These notes are payable through 2001 and are collateralized by the
related underlying assets.
NOTE 4 - INCOME TAXES:
The components of the deferred tax liability and assets are as follows
(in thousands):
September 30, December 31,
1994 1993
-------- -----------
Deferred Tax Liability:
Property, plant and equipment $ 25,054 $ 28,429
Trademark 11,842 12,078
Other 7,855 7,123
-------- --------
$ 44,751 $ 47,630
======== ========
Deferred Tax Asset:
Tax carryforwards $ - $ 1,991
Other 2,953 1,986
-------- --------
$ 2,953 $ 3,977
======== ========
The provision for income taxes consists of the following (in thousands):
Nine Months Ended
--------------------
September 30, October 1,
1994 1993
-------- --------
Current:
Federal $ 6,737 $ -
State and local 828 -
-------- -------
$ 7,565 $ -
======== =======
Deferred:
Federal $ 1,266 $ 2,747
State and local 156 337
-------- -------
$ 1,422 $ 3,084
======== =======
Total $ 8,987 $ 3,084
======== =======
The tax provision for the nine month periods ending September 30, 1994
and October 1, 1993 is 40.5 and 37.6% of pre-tax income, respectively. The
factors causing the rate to vary from the U.S. Federal statutory rate are as
follows (in thousands):
Nine Months Ended
---------------------
September 30, October 1,
1994 1993
-------- --------
Computed (expected) tax provision $ 7,772 $ 2,873
Increase from:
State and local taxes 955 353
Amortization of goodwill 448 477
Other book to tax differences (net) (188) (619)
------- ------
$ 8,987 $ 3,084
======= ======
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
NET SALES
Net sales for the nine months ended September 30, 1994 were $301.9
million compared to $252.2 million for the nine months ended October 1, 1993,
representing a 19.7% increase. Net sales for all divisions increased which
accounted for this growth over the same period last year.
Net sales for the three months ended September 30, 1994 were $104.2
million compared to $85.9 million for the three months ended October 1, 1993,
representing a 21.3% increase. Increased sales occurred in all divisions of
the Company.
GROSS PROFIT
Gross profit for the nine months ended September 30, 1994 amounted to
$79.7 million, or 26.4% of net sales, compared to $57.1 million, or 22.6% of
net sales, in the same period in fiscal 1993.
Gross profit for the three months ended September 30, 1994 amounted to
$28.2 million, or 27.0% of net sales, compared to $18.3 million, or 21.3% of
net sales, in the same period in fiscal 1993.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses amounted to $42.1 million
for the nine months ended September 30, 1994 compared to $32.6 million for the
nine months ended October 1, 1993. As a percent of net sales, selling,
general and administrative expenses were 14.0% for the nine months ended
September 30, 1994 compared to 12.9% for the same period in fiscal 1993.
Selling, general and administrative expenses amounted to $14.4 million
for the three months ended September 30, 1994 compared to $10.1 million for
the three months ended October 1, 1993. As a percent of net sales, selling,
general and administrative expenses were 13.8% for the three months ended
September 30, 1994 compared to 11.7% for the same period in fiscal 1993.
Increased spending in both the three month and nine month periods in 1994
compared to the same periods in 1993 are attributable to expanded advertising
and marketing activities together with incentive compensation and retirement
plan costs driven by higher sales and profitability.
OPERATING INCOME
Operating income for the nine months ended September 30, 1994 was $36.4
million compared to operating income of $23.2 million in the nine months ended
October 1, 1993. The increased operating income in the first nine months of
fiscal 1994 compared to the same period in fiscal 1993 was attributable to
significantly higher net sales, together with improved operating efficiencies
which generated increased operating profit margins, offset in part by higher
selling, general and administrative expenses.
Operating income for the three months ended September 30, 1994 was $13.4
million compared to operating income of $7.8 million in the three months ended
October 1, 1993. This increase was also attributable to significantly higher
net sales together with improved operating efficiencies which generated
increased operating profit margins, offset in part by higher selling, general
and administrative expenses.
INTEREST EXPENSE
Interest expense for the nine months ended September 30, 1994 was $14.2
million compared to $15.0 million for the nine months ended October 1, 1993.
Interest expense for the three months ended September 30, 1994 was $4.7
million compared to $5.1 million for the three months ended October 1, 1993.
NET INCOME
Net income before extraordinary items for the first nine months of fiscal
1994 amounted to $13.2 million compared to $5.1 million in the first nine
months in fiscal 1993. The first nine months of fiscal 1994 benefited from
higher net sales and operating income.
Net income before extraordinary items for the three months ended
September 30, 1994, amounted to $5.2 million compared to $1.8 million for the
three months ended October 1, 1993. The 1994 period benefited from higher net
sales and operating income.
In the third quarter of 1993, a portion of the proceeds of the company's
initial public offerings was used to repay $57.4 million of bank debt which
had been recorded net of its original issue discount of $18.3 million. The
retirement of that debt resulted in an extraordinary non-cash charge to
earnings of $11.3 million.
PRO-FORMA NET INCOME
Net income before extraordinary items for the nine months ended September
30, 1994 was $13.2 million, or $.90 per share, versus pro-forma net income of
$5.6 million, or $.38 per share for the same period in fiscal 1993.
Net income before extraordinary items for the three months ended
September 30, 1994 was $5.2 million, or $.35 per share, versus pro-forma net
income of $1.9 million, or $.13 per share for the same period in fiscal 1993.
Pro-forma figures for 1993 assume that the Company's third quarter 1993
public offerings of debt and equity securities occurred on the first day of
fiscal 1993. The gross proceeds of the Company's initial public offerings of
debt and equity were $160 million and $79.4 million, respectively.
LIQUIDITY AND CAPITAL RESOURCES
In August 1993, the Company completed two public offerings of 7,939,750
shares of the Company's Common Stock and $160 million aggregate principal
amount of 10-1/2% Senior Notes due 2003. The net proceeds of the offerings,
together with borrowings under a new $90 million bank credit facility were
used (i) to repay the entire unpaid balance under the Company's previously
existing senior debt financing agreements, redeem certain previously
outstanding debentures and pay related accrued interest, for a total of
approximately $227 million, and (ii) for working capital and general corporate
purposes. As a result of this repayment of debt, the Company incurred an
extraordinary loss of $11.3 million, net of tax, as a result of the original
issue discount on certain of the repaid notes as well as the premium required
to redeem the debentures. The New Credit Facility provides for up to $90
million of revolving credit loans for working capital and for letters of
credit. Availability of borrowings under the New Credit Facility is based
upon a formula related to inventory and accounts receivable.
For the nine months ended September 30, 1994, cash increased by $10.7
million. Net cash provided by operating activities was $21.6 million and $7.0
million in cash was received from Industrial Revenue Bond Notes issued to
finance the expansion of the Bruce Hardwood Floors plant in Port Gibson,
Mississippi. Cash of $18.6 million was used primarily for additions to
property, plant and equipment, the expansion of the Port Gibson plant,
construction deposits relating to expansion of the Bruce Hardwood Floors plant
in West Virginia, long-term debt payments and the acquisition of Premier Wood
Floors on July 1, 1994 for approximately $5.1 million.
On September 30, 1994, the Company had working capital of $86.1 million,
or 24.1% of total assets, and $54.5 million of unused bank borrowing capacity.
The Company believes that borrowing availability under the New Credit
Facility and cash generated from operations will be adequate to fund working
capital requirements, debt service payments and the planned capital
expenditures for the foreseeable future.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
Exhibit No.
27 - Financial Data Schedule for the nine month
interim period ended September 30, 1994.
(Submitted only in EDGAR filing to Securities
and Exchange Commission)
b) No reports on Form 8-K have been filed during the quarter
ended September 30, 1994.
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.
TRIANGLE PACIFIC CORP.
Date: November 14, 1994 By: /s/ M. Joseph McHugh
------------------ -----------------------------------
M. Joseph McHugh
President and Chief Operating Officer
(duly authorized officer)
Date: November 14, 1994 By: /s/ Robert J. Symon
------------------ -----------------------------------
Robert J. Symon
Executive Vice President,
Treasurer and Chief Financial Officer
(principal financial and accounting officer)
18
1
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> DEC-30-1994
<PERIOD-END> SEP-30-1994
<CASH> 11,485
<SECURITIES> 0
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0
0
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</TABLE>
