SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) December 13, 2000
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Cone Mills Corporation
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(Exact Name of Registrant as Specified in its Charter)
North Carolina 1-3634 56-0367025
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
3101 North Elm Street Greensboro, North Carolina 27415-6540
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(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code (336) 379-6220
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On December 13, 2000, Cone Mills Corporation ("Cone") announced its
plans to expand its Parras Cone joint venture denim plant in Parras, Mexico and
to shut down its Raytex top-of-bed fabrics printing plant in Marion, South
Carolina. Cone and its joint venture partner, Compania Industrial de Parras,
S.A. de C. V., agreed to expand the joint venture's production capacity by 11
million yards, or 35%, for a capital investment of approximately $18 million.
The expansion will be financed by Parras Cone's internal cash flow and
borrowings under its existing credit facilities. The joint venture -- Parras
Cone de Mexico -- has produced basic denim fabrics since it began commercial
operations in late 1995. Cone will continue to design, service and market Parras
Cone's production.
Cone's decision to close its Raytex facility is part of its ongoing
strategic plan to concentrate on businesses in which it has a leadership
position, to redeploy human and capital resources to those core businesses, and
to lower manufacturing costs. Cone does not have a leadership position in the
top-of-bed fabrics market in which Raytex competes, a market dominated by large,
vertical bedding manufacturers. Cone expects to close the Raytex facility within
60 days and will consider offers to purchase the facility. Operating losses at
the Raytex facility totaled $4.3 million or $.11 per share on sales of $14.1
million for the first three quarters of 2000. The closing of Raytex is expected
to result in an approximate $27 million after-tax charge in the fourth quarter
of 2000, primarily in noncash costs associated with the write-off of intangible
assets, and the write-down of plant, property and equipment and inventory.
Raytex run-out costs are expected to be approximately $.8 million or $.02 per
share for the first quarter of 2001. The Raytex facility employs approximately
200 persons.
Except for the historical information presented, the matters disclosed
in this current report include forward-looking statements. These statements
represent Cone's current judgment on the future and are subject to risks and
uncertainties that could cause actual results to differ materially. Such factors
include, without limitation: (i) the demand for textile products, including
Cone's products, will vary with the U.S. and world business cycles, imbalances
between consumer demand and inventories of retailers and manufacturers and
changes in fashion trends, (ii) the highly competitive nature of the textile
industry and the possible effects of reduced import protection and free-trade
initiatives, (iii) the unpredictability of the cost and availability of cotton,
Cone's principal raw material, (iv) Cone's relationships with Levi Strauss as
its major customer, (v) Cone's ability to attract and maintain adequate capital
to fund operations and strategic initiatives, (vi) successful completion of the
exchange offer and consent solicitation for its 8-1/8% Debentures Due March 15,
2005, (vii) increases in prevailing interest rates, and (viii) the inability to
continue the cost savings associated with Cone's restructuring initiatives. For
a further description of these risks see Cone's 1999 Annual Report on Form 10-K,
"Item 1. Business - Competition, - Raw Materials and - Customers" and
"Management's Discussion and Analysis of Results of Operations and Financial
Condition -- Overview" of Item 7 of the Form 10-K report. Other risks and
uncertainties may be described from time to time in Cone's other reports and
filings with the Securities and Exchange Commission.
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SIGNATURES
Pursuant to the requirement 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.
CONE MILLS CORPORATION
Date: December 21, 2000 By /s/ Neil W. Koonce
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Neil W. Koonce
Vice President, General Counsel
and Secretary
