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
January 16, 1997
Date of Report (Date of earliest event reported)
Empire of Carolina, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-7909 13-2999480
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5150 Linton Boulevard, 5th Floor, Delray Beach, Florida 33484
(Address of principal executive offices) (Zip Code)
(561) 498-4000
(Registrant's telephone number)
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ITEM 5. OTHER EVENTS.
On January 16, 1997, 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 January 16, 1997.
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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/ Lawrence Geller
Name: Lawrence Geller
Title: Vice President and
General Counsel
Date: January 17, 1997
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EXHIBIT INDEX
Exhibit
Number Description
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99 Press Release, dated January 16, 1997.
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EXHIBIT 99
FOR IMMEDIATE RELEASE
EMPIRE OF CAROLINA COMMENTS ON RECENT DEVELOPMENTS
Delray Beach, FL, January 16, 1997 -- Empire of Carolina, Inc. (AMEX:
EMP) announced today that Marvin Smollar, President and Chief Operating Officer,
will no longer be involved in the day to day management and operations of the
Company. Mr. Smollar remains on the Company's Board of Directors. The Company
also reported that Leonard Greenberg resigned from the Company's Board of
Directors, effective December 31, 1996.
The Company further announced that its sales for the fourth quarter of
1996 were significantly lower than expected. The reduced sales volume was due
primarily to a lack of re- orders caused by the poor retail season in the toy
industry and the lingering effects of the previously discussed production delays
at the Company's manufacturing facility in Tarboro, N.C. As a result, management
believes that the Company's operating results for the fiscal year ended December
31, 1996 will be significantly below expectations.
The Company and its lenders have been discussing the effect of the
fourth quarter results on the Company's credit arrangements. The lenders are
continuing to support the seasonal needs of the Company while constructive
discussions are underway to provide a short-term credit accommodation. While the
Company believes a mutually satisfactory interim arrangement will be approved by
its lenders, no assurance can be given that any such arrangement will be
finalized. In the event an arrangement is not finalized, the cash generated from
operations may not be sufficient to fund the Company's operations.
The Company also announced that it has engaged investment bankers to
secure the additional financing required by the December 6, 1996 amendment to
its senior loan agreement and to evaluate strategic alternatives for enhancing
shareholder value. No assurance can be given that the Company will obtain
additional financing or will pursue any strategic alternative.
The Company has engaged the RDR Group, a financial management
consulting group with significant experience in the toy industry.
Representatives from RDR are working with the Company to help streamline its
financial and operating structure and to assist Steve Geller, Chairman and Chief
Executive Officer, in the day to day operations of the business.
Mr. Geller commented, "We are very disappointed in the Company's recent
performance and we are glad to put 1996 behind us. I continue to be pleased with
our customers' response to Empire's 1997 product line and the retail take-away
of our 1996 product offerings. We have implemented cost cutting measures which
we believe will significantly lower our factory overhead and selling, general
and administrative expenses. Furthermore, we have rebalanced our product mix to
reduce demand on the Tarboro facility and to increase the quantity of product
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sourced through our Hong Kong office. We are optimistic that this plan will
enhance our ability to meet our customers' needs."
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 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. The Company undertakes no obligation to update any
such factors or to publicly announce the result of any revisions to any of the
forward-looking statements contained herein to reflect future events or
developments.
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.
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