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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
September 10, 1996
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Date of Report (Date of earliest event reported)
Empire of Carolina, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-7909 13-2999480
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5150 Linton Boulevard, 5th Floor, Delray Beach, Florida 33484
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(Address of principal executive offices) (Zip Code)
(407) 498-4000
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(Registrant's telephone number)
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ITEM 5. OTHER EVENTS.
On September 10, 1996, the Registrant issued the press release
attached hereto as Exhibit 99, which press release is hereby incorporated by
reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit
Number Description
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99 Press Release, dated September 10, 1996.
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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 hereunto duly authorized.
EMPIRE OF CAROLINA, INC.
By /s/ Steven Geller
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Name: Steven Geller
Title: Chairman and Chief
Executive Officer
Date: September 10, 1996
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EXHIBIT INDEX
Exhibit
Number Description
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99 Press Release, dated September 10, 1996.
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EXHIBIT 99
FOR: Empire of Carolina, Inc.
APPROVED BY: Steve Geller
Chief Executive Officer
(407) 498-4000
CONTACT: Betsy Brod/Alex Gleeson
Press: Michael McMullan
Morgen-Walke Associates
FOR IMMEDIATE RELEASE (212) 850-5600
EMPIRE OF CAROLINA COMMENTS ON EXPECTED RESULTS FOR FISCAL 1996
Delray Beach, FL, September 10, 1996 -- Empire of Carolina, Inc.
(AMEX:EMP) announced today that, as a result of higher than anticipated
manufacturing expenses incurred to meet customer demand, it expects to report a
net loss for the year ending December 31, 1996. The Company indicated that it
anticipates break-even operating income and expects its pre-tax cash flow
(EBITDA) to be sufficient to cover interest expense.
Empire's rapid sales growth, driven by strong customer demand for its
products, combined with difficulties in integrating the Buddy L manufacturing
facilities and the need to outsource certain production requirements have
resulted in excessive labor, manufacturing and shipping costs. Shipments of
merchandise sourced through the Company's Hong Kong office, which represent
approximately 25% of sales, remain unaffected by these events.
The Company also announced that Howard Younger, previously Vice
President and Director of Manufacturing for Graham Packaging Company, has
joined Empire as Vice President of Manufacturing and General Manager of the
Tarboro, North Carolina facility. Marvin Smollar, Empire's President and Chief
Operating Officer, has been managing plant operations since the illness of
Robert Mistron, the former plant manager. Mr. Younger has
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twenty-four years experience in managing plastics manufacturing facilities.
Empire anticipates that the addition of Mr. Younger and other key,
recently-hired factory managers will improve plant performance.
Steven Geller, Chairman and Chief Executive Officer, commented, "Over
the past two years, Empire has focused on building a presence in the toy
industry. By delivering quality, core products to the market, we have been
highly successful in helping to drive consumer traffic and profits to our
retailer customers. This has resulted in increased demand for the Company's
products. We have made a conscious decision to incur the costs necessary to
meet these demands and to preserve the market share that we have worked so hard
to develop over the past two years, despite the production delays at our
Tarboro facility."
Geller continued, "Empire's sales and marketing organizations are
strong and demand for our various product lines continues to be high. We
believe that our performance for 1996, despite the substantial non-recurring
costs caused by Empire's manufacturing difficulties, demonstrates Empire's
profit potential. We shall continue to pursue our long term objective of
becoming a major player in the toy and holiday products industries."
This press release contains various forward-looking statements and
information that are based on management's beliefs as well as assumptions made
by and information currently available to management. Such statements are
subject to various risks and uncertainties which could cause actual results to
vary materially from those stated. Should one or more of these risks or
uncertainties materialize or should underlying assumptions prove incorrect
actual results may vary materially from those anticipated, estimated, expected
or projected. Such risks and uncertainties include the Company's ability to
manage inventory production and costs, to meet potential increases or decreases
in demand, potential adverse customer impact due to delivery
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delays including effects on existing and future orders, competitive practices
in the toy and decorative holiday products industries, changing consumer
preferences and risks associated with consumer acceptance of new product
introductions, potential increases in raw material prices, potential delays or
production problems associated with foreign sourcing of production and the
impact of pricing policies including providing discounts and allowances.
Certain of these as well as other risks and uncertainties are described in more
detail in the Company's Registration Statement on Form S-1 filed under the
Securities Act of 1933, Registration No. 333-4440.
Empire of Carolina, Inc. designs, develops, manufactures and markets a
broad range of basic plastic children's toys. It's Holiday Products Division
produces and markets decorative seasonal items including Christmas, Halloween
and Easter illuminated products. The Company's full line of basic toys
includes the Big Wheel(R) line of ride-on toys, Grand Champions(R) collectible
horses, Buddy L(R) cars and trucks, and Power Driver(R) ride-ons.
