UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20459
FORM 10-Q/A
AMENDMENT NO. 1
(Mark one)
[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 27, 1998
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 1-6150
ALBA-WALDENSIAN, INC.
(Exact name of registrant as specified in its Charter)
Delaware 56-0359780
(State or other jurisdiction (I.R.S.Employer Identification No.)
of incorporation or organization)
P.O. Box 100, Valdese, N.C. 28690
(Address of principal executive offices)(Zip code)
(828) 879-6500
Registrant's telephone number, including area code
NONE
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether 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
As of October 26, 1998, the number of common shares outstanding was 1,559,053.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ALBA-WALDENSIAN, INC.
Consolidated Balance Sheets
($000's)
September 27, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $6 $2,416
Accounts receivable, net of allowance for
doubtful accounts of $384 and $260, respectively 10,723 7,823
Inventories:
Materials and supplies 2,959 2,554
Work-in-process 5,997 5,045
Finished goods 2,375 3,710
----- -----
Total Inventories 11,331 11,309
------ ------
Deferred income taxes 707 707
Prepaid expenses and other 379 127
--- ---
Total Current Assets 23,146 22,382
------ ------
PROPERTY AND EQUIPMENT 34,185 31,111
Less: accumulated depreciation (19,194) (17,857)
------- ------
Net Property and Equipment 14,991 13,254
------ ------
OTHER ASSETS:
Notes receivable 16 17
Trademarks and patents 443 492
Excess of cost over net assets acquired 7,033 7,474
----- -----
7,492 7,983
----- -----
TOTAL ASSETS $45,629 $43,619
====== ======
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
ALBA-WALDENSIAN, INC.
Consolidated Balance Sheets
($000's except share amounts)
<TABLE>
<CAPTION>
September 27, December 31,
1998 1997
---- ----
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 665 $ 2,350
Accounts payable 3,522 3,118
Accrued expenses 2,472 1,542
----- -----
Total Current Liabilities 6,659 7,010
LONG-TERM DEBT (Note 2) 9,318 7,452
CAPITAL LEASE OBLIGATION 489 -
OTHER DEFERRED LIABILITIES 1 -
DEFERRED INCOME TAX LIABILITY 1,746 1,746
----- -----
Total Liabilities 18,213 16,208
------ ------
STOCKHOLDERS' EQUITY:
Common stock - authorized 3,000,000 shares,
$2.50 par value; issued: 1,886,580 shares in 1998
and 1997; outstanding: 1,560,563 and 1,867,403
in 1998 and 1997, respectively 4,716 4,716
Additional paid-in capital 9,182 9,182
Retained earnings 16,150 13,650
------ ------
30,048 27,548
Less treasury stock - at cost
(326,077 and 19,177 shares in 1998 and 1997,
respectively) (2,632) (137)
----- ----
Total Stockholders' Equity 27,416 27,411
------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $45,629 $43,619
====== ======
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALBA-WALDENSIAN, INC.
Consolidated Statements of Operations
(Unaudited)
($000's except share amounts)
Three Months Ended Nine Month Period Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $18,904 $15,390 $54,914 $45,203
Cost of sales 13,239 12,205 40,261 35,514
------ ------ ------ ------
Gross margin 5,665 3,185 14,653 9,689
Selling, general and
administrative expense 3,368 2,686 9,633 9,227
----- ----- ----- -----
Operating income 2,297 499 5,020 462
Interest expense (227) (270) (662) (779)
Interest income 0 18 50 45
Other income (expense) (83) 14 (174) (179)
-- ------ ----- -----
Total other expense (310) (238) (786) (913)
-
Income (loss) before income taxes 1,987 261 4,234 (451)
Provision for (benefit from)
income taxes 755 99 1,609 (172)
----- -- ----- -----
Net income (loss) $ 1,232 $162 $2,625 $(279)
========= === ====== ======
Net income (loss) per
common share -
Basic $ .78 $.09 $1.53 $(.15)
=== === ===== ======
Diluted $ .74 $.09 $1.48 $(.15)
=== ==== ===== ======
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALBA-WALDENSIAN, INC.
Consolidated Statements of Stockholders' Equity
(Unaudited)
($000's except share amounts)
Additional
Common Paid-In Retained Treasury Stock
Shares Amount Capital Earnings Shares Amount Total
------ ------ ------- -------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1997 1,886,580 $4,716 $9,182 $14,027 (19,177) $(137) $27,788
Net Loss (279) (279)
--- ---
Balance at Sept. 28, 1997 1,886,580 $4,716 $9,182 $13,748 (19,177) $(137) $27,509
========= ===== ===== ====== ====== === ======
Balance at January 1, 1998 1,886,580 $4,716 $9,182 $13,651 (19,177) $(137) $27,412
Purchase of Treasury Stock (310,500) (2,521) (2,521)
Exercise of Stock Options (8) 3,600 26 18
Dividends Paid (118) (118)
Net Income 2,625 2,625
----- -----
Balance at Sept. 27, 1998 1,886,580 $4,716 $9,182 $16,150 (326,077) $(2,632) $27,416
========= ===== ===== ====== ======= ===== ======
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALBA-WALDENSIAN, INC.
Consolidated Statements of Cash Flows
(Unaudited)
($000's)
Nine Month Periods Ended
Sept. 27, Sept. 28,
1998 1997
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 2,625 $ (279)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 1,847 1,735
Provision for bad debts 135 92
Loss on disposal of property 2 138
Provision for inventory obsolescence 1,161 625
Changes in operating assets and liabilities providing (using) cash:
Accounts receivable (3,035) (829)
Refundable income taxes -- (23)
Inventories (1,182) 149
Prepaid expenses and other (252) 24
Accounts payable (93) 533
Accrued expenses and other liabilities 930 1,065
Income taxes payable 496 (169)
Deferred compensation 1 (200)
- ---
Net cash provided by operating activities 2,635 2,861
----- -----
INVESTING ACTIVITIES:
Capital expenditures (2,383) (1,614)
Proceeds from sale of property - 212
Proceeds from notes receivable 1 7
- -
Net cash used in investing activities (2,382) (1,395)
----- -----
FINANCING ACTIVITIES:
Net borrowings under line of credit agreement 6,245 --
Principal payments on notes and Capital Leases (9,951) (1,175)
Payment of Dividends (118) --
Cash Proceeds from Exercise of Stock Options 18 --
Proceeds from Issuance of Long Term Debt 3,664 --
Repurchase of Capital Stock (2,521) --
------- --
Net cash used in financing activities (2,663) (1,175)
---------------------------------
NET INCREASE (DECREASE) IN CASH (2,410) 291
CASH AT BEGINNING OF PERIOD 2,416 294
----- ---
CASH AT END OF PERIOD $ 6 $ 585
= ===
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALBA-WALDENSIAN, INC.
Consolidated Statements of Cash Flows
(Unaudited)
($000's)
Nine Month Periods Ended
Sept 27, Sept. 28,
1998 1997
---- ----
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 563 $ 993
Income taxes $ 1,128 $ 20
<FN>
During the second quarter of 1998, the Company acquired production equipment
totaling $533,000 through the issuance of financing leases.
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
ALBA-WALDENSIAN, INC.
Notes to Consolidated Financial Statement
(Unaudited)
1. UNAUDITED FINANCIAL INFORMATION
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
financial position as of September 27, 1998, and the results of operations for
the three-month and nine-month periods ended September 27, 1998, and September
28, 1997. These unaudited financial statements should be read in conjunction
with the Company's most recent audited financial statements.
The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the full year.
2. FINANCING
On December 31, 1997 the Company had both a $3,000,000 seasonal line of
credit and long-term debt agreements with a major bank. The interest rate was
LIBOR plus 2.75%. The seasonal line of credit was scheduled to mature on June
30, 1998, and the long-term debt portion matured on January 5, 1999. There were
no amounts outstanding under the seasonal line of credit at December 31, 1997.
Quarterly principal payments of $587,500 were required under the long-term debt
agreement.
On May 14, 1998, the Company entered into three-year $21,000,000
financing facility with a major bank and retired both the seasonal line of
credit and long-term debt discussed above. The new facility is composed of up to
a $15,000,000 revolving loan, based upon levels of accounts receivable and
inventories, a $3,000,000 term loan and a $3,000,000 credit line to fund future
capital expenditures. The new facility bears interest at Prime plus 0.5% (or at
the option of the Company, portions of the facility may be priced at LIBOR plus
2.5%) and is secured by substantially all of the assets of the Company.
The loan agreement requires that the Company maintain certain levels of
tangible net worth and fixed charge coverage ratios as well as limiting the
level of capital expenditures ($5.8 million in 1998) and prohibiting other
financing (in excess of $1.5 million per year). At September 27, 1998 the
Company was in compliance with the convenants contained in the loan agreement.
On August 7, 1998, the Company secured a $1,500,000 financing lease
facility with a major financial institution covering the acquisition of
qualified machinery during the remainder of 1998. This facility is secured by
only the acquired machinery, bears interest at 7.27% and provides for level
monthly payments over its five-year term.
3. NON-RECURRING CHARGES
During the first quarter of 1997, severance costs of approximately
$401,000 were recorded in connection with the Company's former President and
CEO.
4. ACQUISITION OF COMMON STOCK
On May 15, 1998, investors, including the Company and Mr. Clyde Wm. Engle,
the Company's Chairman and beneficial holder (through Sunstates Corporation) of
a majority of the Company's common stock, purchased from a major bank 938,700
shares of the Company's common stock formerly held by Sunstates Corporation,
pursuant to a private sale of collateral held under a defaulted loan which
Sunstates Corporation's affiliates had with the bank. The Company purchased
295,000 of the shares at a cost of $2,212,500 plus other transaction costs
totaling approximately $115,000. The Company utilized its existing cash plus
funds obtained from the new $21,000,000 financing facility discussed above to
purchase the stock. The Company intends to hold the 295,000 shares as treasury
stock and currently has no plans for future utilization of those shares.
As a result of these transactions, the Company is no longer a subsidiary of
Sunstates Corporation. Mr. Engle now controls approximately 35% of the Company's
outstanding common stock.
On August 12, 1998, the Company's Board of Directors authorized the
Corporation to acquire up to 40,000 shares of the outstanding Common Stock of
the Corporation for an aggregate purchase price not to exceed $550,000. As of
September 27, 1998, the Company had purchased a total of 15,500 shares at an
aggregate cost of approximately $193,000.
5. DIVIDENDS
On August 4, 1998 the Company declared a semi-annual cash dividend of $.075
per share ($117,930) on its common stock payable on August 24, 1998 to
shareholders of record on August 14, 1998. Under the Company's loan agreement
with a bank (see Note 2), dividends and repurchases of Company stock may not
exceed $3,000,000 during the three-year term of the loan.
6. EARNINGS PER SHARE
<TABLE>
<CAPTION>
For the Quarter Ended September 27, 1998
Income Shares Per-Share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Basic EPS
Net Income $1,231,636 1,569,778 $.78
Effect of Dilutive Securities
Stock Options -- 92,981
Diluted EPS
Net Income $1,231,636 1,662,759 $.74
</TABLE>
<TABLE>
<CAPTION>
For the Nine Months Ended September 27, 1998
Income Shares Per-Share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Basic EPS
Net Income $2,625,112 1,719,018 $1.53
Effect of Dilutive Securities
Stock Options -- 53,577
Diluted EPS
Net Income $2,625,112 1,772,595 $1.48
<FN>
There were no dilutive securities outstanding during 1997.
</FN>
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Company's working capital has improved since December 31, 1997, and
continues to be adequate to support the Company's operations. On September 27,
1998, the Company had working capital of $16,487,000 with a ratio of 3.48 to1.
This is comparable to $15,372,000 or 3.19 to 1 at December 31, 1997. The
increase in the amount of working capital primarily reflects increased
receivables associated with the increased business volume in 1998. Accounts
receivable have increased to $10,723,000 at September 27, 1998 as compared to
$7,823,000 at December 31, 1997, while the number of days sales in receivables
has decreased from 49.75 to 45.92 during the same period. Inventory levels have
not significantly increased in the face of the increased business due to the
Company's efforts to reduce excess inventories (inventory turns have increased
from 3.55 at December 31, 1997 to 4.04 at September 27, 1998). Furthermore, the
Company's annual debt amortization requirements are significantly reduced
(current maturities of $665,000 at September 1998 versus $2,350,000 at December
1997) as a result of the refinancing of its bank debt.
Liquidity needs are primarily affected by and related to capital
expenditures and changes in the Company's business volume. Capital expenditures
through the first nine months of 1998 have totaled $2,916,000, reflecting the
acquisition of new seamless knitting machines in response to the increased
demand for the Company's new seamless intimate apparel products. This level of
capital expenditures compares to $1,614,000 for the same nine months of 1997.
The Company anticipates that capital expenditures for the entire year of 1998
may approximate $8,000,000.
The Company's liquidity needs, including the stock repurchase, have
been more than adequately provided for with the securing of a new three-year
$21,000,000 financing facility with a major bank (see Note 4 of Notes to
Consolidated Financial Statements). The new financing facility provides a
revolving loan of up to $15,000,000, depending upon levels of accounts
receivable and inventories, a term loan of $3,000,000 and a future capital
expenditure line of $3,000,000. In addition, the Company may secure other
outside financing of capital expenditures of up to $4,500,000 over the
three-year term of the facility. On August 7, 1998, the Company secured a
$1,500,000 financing lease facility with a major financial institution covering
the acquisition of qualified machinery during the remainder of 1998.
The purchase on May 15, 1998 of 295,000 shares of the Company's common
stock for approximately $2,328,000 (see Note 4 of Notes to Consolidated
Financial Statements) reduced the company's net worth. However, the acquisition
price per share of $7.50 (plus transaction costs) was significantly less than
the Company's book value per share ($15.08 at March 29, 1998) and accordingly
the net book value of the remaining outstanding shares was increased.
On August 12, 1998, the Company's Board of Directors authorized the
Corporation to acquire up to 40,000 shares of the outstanding Common Stock of
the Corporation for an aggregate purchase price not to exceed $550,000. As of
September 27, 1998, the Company had purchased a total of 15,500 shares at an
aggregate cost of $193,000.
At September 27, 1998, the book value per share of the Company's remaining
outstanding common stock was $17.57 per share.
On August 4, 1998 the Company declared a semi-annual cash dividend of
$.075 per share ($117,930) on its common stock payable on August 24, 1998 to
shareholders of record on August 14, 1998. Under the Company's loan agreement
with a bank, dividends may not exceed $787,500 during the three-year term of the
loan.
<PAGE>
<TABLE>
<CAPTION>
Results of Operations
Items as a percentage of sales are reflected in the following table:
Three Months Ended Nine Months Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
(%)
Net sales 100.0 100.0 100.0 100.0
Cost of sales 70.0 79.3 73.3 78.6
---- ---- ---- ----
Gross margin 30.0 20.7 26.7 21.4
Selling, general and
administrative expenses 17.8 17.5 17.6 20.4
---- ---- ---- ----
Operating income (loss) 12.2 3.2 9.1 (1.0)
Other income (expense), net (1.7) (1.5) (1.4) (2.0)
--- --- --- ---
Income before income taxes 10.5 1.7 (7.7) (1.0)
Provision for income taxes 4.0 0.6 2.9 (0.4)
--- --- --- ---
Net income (loss) 6.5 1.1 4.8 (0.6)
</TABLE>
Three Months Ended September 27, 1998 and September 28, 1997
During the third quarter of 1998 the Company reached record levels of
revenues and earnings. Third quarter earnings of $1,232,000 compared to $162,000
in the third quarter of 1997. The quarterly earnings per share of 78 cents (74
cents fully diluted) was a record for the Company and compared to 9 cents per
share in the third quarter of 1997. Revenues for the 1998 quarter increased
22.8% reaching a record level of $18,904,000 as compared to $15,390,000 for the
prior year.
Net sales by division for the third quarter of 1998 compared to the
third quarter of 1997 are set forth in the following table ($000's):
<TABLE>
<CAPTION>
Three Month Period Ended
Sept. 27, Sept. 28, Increase/ % Increase/
1998 1997 (Decrease) (Decrease)
---- ---- ---------- ----------
<S> <C> <C> <C> <C>
Health Products $8,158 $7,660 $498 6.5%
Consumer Products 10,743 6,123 4,620 75.5%
Byford 3 1,607 ($1,604) (99.8%)
- ----- --------
Total $18,904 $15,390 $3,514 22.8%
</TABLE>
Sales of Consumer Products increased $4,620,000 during the third
quarter, or 75.5% over the comparable quarter of 1997. This increase results
primarily from continuing acceptance of the Company's seamless intimate apparel
as consumers continued to respond positively to the unsurpassed fit, comfort and
style of seamless intimates. Sales in the Consumer Products Division in 1997
were down due to the loss of circular knit panty business to lower priced
imports and the decision to eliminate the full fashion panty line.
Sales of Health Products increased $498,000 or 6.5% due to growth in
all major product lines partially offset by slower than anticipated acceptance
of the Company's redesigned PulStar system.
The decline in Byford sales reflects the Company's decision in the
third quarter of 1997 to no longer distribute the line of men's socks and
sweaters due to poor profitability.
Gross margins increased in 1998 to 30.0% of net sales (20.7% in 1997)
as the result of increased volume, higher margins on new seamless styles and
cost controls.
Interest expense decreased as a result of lower long-term debt and less
borrowing under the line of credit agreement.
Nine Months Ended September 27, 1998 and September 28, 1997
During the nine months of 1998 the Company also reached record levels
of revenues and earnings. 1998 earnings of $2,625,000 compared to a loss of
$279,000 in 1997. The year-to-date earnings per share of $1.53 ($1.48 fully
diluted) was a record for the Company and compared to a loss of $.15 per share
in the prior year. Revenues for 1998 year-to-date increased 21.5% reaching a
record level of $54,914,000 as compared to $45,203,000 for the prior year.
Net sales by division for the nine months of 1998 compared to 1997 are
set forth in the following table ($000's):
<TABLE>
<CAPTION>
Nine Month Period Ended
Sept. 27, Sept. 28, Increase/ % Increase/
1998 1997 (Decrease) (Decrease)
---- ---- ---------- ----------
<S> <C> <C> <C> <C>
Health Products $24,531 $23,451 $1,080 4.6%
Consumer Products 30,285 18,135 12,150 67.0%
Byford 98 3,617 ($3,519) (97.3%)
-- ----- --------
Total $54,914 $45,203 $9,711 21.5%
</TABLE>
Sales of Consumer Products increased $12,150,000 during 1998, or 67.0%,
over 1997. This increase results primarily from continuing acceptance of the
Company's seamless intimate apparel as consumers continued to respond positively
to the unsurpassed fit, comfort and style of seamless intimates. Sales in the
Consumer Products Division in 1997 were down due to the loss of circular knit
panty business to lower priced imports and the decision to eliminate the full
fashion panty line.
Sales of Health Products increased $1,080,000 or 4.6% due to strong
sales of treads and cuffs partially offset by shortfalls in sales of
stockinette, dressings and the PulStar system.
The decline in Byford sales reflects the Company's decision in the
third quarter of 1997 to no longer distribute the line of men's socks and
sweaters due to poor profitability.
Gross margins increased in 1998 to 26.7% of net sales (21.4% in 1997)
as the result of increased volume, higher margins on new seamless styles and
cost controls.
Selling, general and administrative expenses declined (as a percentage
of net sales) from 20.4% in 1997 to 17.6% in 1998, primarily reflecting the
impact of increased volumes. Also, included in 1997 expenses was a one-time
charge of approximately $401,000 to record the severance arrangement with the
Company's former President and CEO.
Interest expense decreased as a result of lower long-term debt and less
borrowing under the line of credit agreement during the period.
Other expense in 1997 included one-time charges to write-off the full
fashion equipment ($143,000) and to write down the carrying value of the idle
Alba plant that is being held for sale ($48,000). Other income in 1997 included
several minor non-recurring gains, including a gain from the sale of certain of
the Company's yarn covering equipment, reflective of a decision to purchase
covered yarn from outside vendors at a lower cost.
YEAR 2000 COMPLIANCE
We have addressed the Year 2000 Compliance issues in three parts; our
products, our internal systems and third-parties.
Our Products Year 2000 Compliance is not an issue for any of our
products. None of our products, women's hosiery, women's intimate apparel or
health products, contain date-sensitive-electronic components or date-sensitive
software.
Our Internal Systems We are confident that all major systems within Alba
will be Year 2000 compliant before the turn of the century. For operational
reasons, in late 1996 we decided to install a new integrated manufacturing and
financial reporting management information system. This new system involved
acquiring new system hardware, new PC-based local and wide-area networks and the
standardization of PC software. All of these hardware and software systems are
Year 2000 Compliant. The new system hardware, the new PC-based local area
network and the new financial reporting system are now operational. The new
manufacturing system and the wide-area network should be operational in the
second quarter of 1999. Additionally, we have substantially completed our review
of all other date-sensitive systems throughout Alba with no material
non-compliance problems noted. This review also included non-information
technology systems and equipment such as the electronic components of our
knitting and other manufacturing equipment.
Third Parties Like most all other companies, we are dependent upon our
material vendors, suppliers and customers to ensure that we remain a going
concern. We are unable to control the actions of others with respect to their
Year 2000 Compliance. However, our material suppliers, service providers and
customers are mostly all very large companies within their own industries and
have much at stake in ensuring their own compliance. We are questioning these
third parties as to their compliance plans and to-date have not been advised of
any major non-compliance problems. We expect to have this process completed by
mid-1999 and will then develop contingency plans in indicated problem areas, as
feasible. The risks to Alba in this area are obviously significant; for example,
we could not operate without a continuous source of electricity to our
manufacturing plants and there are no realistic contingency alternatives
available. Similarly, there is very little that we can do to continue sales to
customers who themselves are unable to operate due to their own failure to
ensure Year 2000 Compliance.
We have not incurred and do not anticipate that we will incur material
costs associated with the Year 2000 Compliance issue. Our operational decision
in 1996 to replace our manufacturing and financial reporting systems had the
side benefit of eliminating most Year 2000 Compliance issues for us.
THIS QUARTERLY REPORT ON FORM 1O-Q, INCLUDING ANY INFORMATION INCORPORTATED
THEREIN BY REFERENCE, MAY CONTAIN, IN ADDITION TO HISTORICAL INFORMATION,
CERTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE SIGNIFICANT RISKS AND
UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT'S BELIEF
AS WELL AS ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO,
MANAGEMENT PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS CAN GENERALLY BE
IDENTIFIED AS SUCH BECAUSE THE CONTEXT OF THE STATEMENT USUALLY WILL INCLUDE
WORDS SUCH AS "THE COMPANY BELIEVES"; OR "ANTICIPATES", OR "EXPECTS"; OR WORDS
OF SIMILAR IMPORT. SIMILARLY, STATEMENTS THAT DESCRIBE THE COMPANY'S FUTURE
PLANS, OBJECTIVES, ESTIMATES OR GOALS ARE ALSO FORWARD-LOOKING STATEMENTS. SUCH
STATEMENTS ADDRESS FUTURE EVENTS AND CONDITIONS CONCERNING CAPITAL EXPENDITURES,
EARNINGS, SALES, LIQUIDITY AND CAPITAL RESOURCES, AND ACCOUNTING MATTERS.
THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR
IMPLIED BY, THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN. FACTORS THAT COULD
CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED IN ITEM 1 DESCRIPTION OF BUSINESS; AND ELSEWHERE IN THE COMPANY'S
ANNUAL REPORT ON FORM 1O-K FOR THE YEAR ENDED DECEMBER 31, 1997, OR IN
INFORMATION INCORPORATED THERIN BY REFERENCE, AS WELL AS FACTORS SUCH AS FUTURE
ECONOMIC CONDITIONS, ACCEPTANCE BY CUSTOMERS OF THE COMPANY'S PRODUCTS, CHANGES
IN CUSTOMER DEMAND, LEGISLATIVE, REGULATORY AND COMPETITIVE DEVELOPMENTS IN
MARKETS IN WHICH THE COMPANY OPERATES AND OTHER CIRCUMSTANCES AFFECTING
ANTICIPATED REVENUES AND COSTS. THE COMPANY UNDERTAKES NO OBLIGATION TO RELEASE
PUBLICLY THE RESULT OF ANY REVISIONS TO THESE FORWARD LOOKING STATEMENTS THAT
MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS ANNUAL
REPORT ON FORM 1O-K OR TO REFLECT THE OCCURRENCE OF OTHER ANTICIPATED EVENTS.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on FORM 8-K
a. Exhibits
27. Financial Data Schedule (filed in electronic format only)
b. Form 8-K
None
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 there unto duly authorized.
ALBA-WALDENSIAN, INC.
Date: October 27, 1998 /s/ Glenn J. Kennedy
--------------------
Vice President and Treasurer
(Chief Financial Officer and
Principal Accounting Officer)
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-27-1998
<CASH> 6
<SECURITIES> 0
<RECEIVABLES> 11,107
<ALLOWANCES> 384
<INVENTORY> 11,331
<CURRENT-ASSETS> 23,146
<PP&E> 34,185
<DEPRECIATION> 19,194
<TOTAL-ASSETS> 45,629
<CURRENT-LIABILITIES> 6,659
<BONDS> 0
0
0
<COMMON> 4,716
<OTHER-SE> 22,700
<TOTAL-LIABILITY-AND-EQUITY> 45,629
<SALES> 54,914
<TOTAL-REVENUES> 54,914
<CGS> 40,261
<TOTAL-COSTS> 49,894
<OTHER-EXPENSES> 174
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 662
<INCOME-PRETAX> 4,234
<INCOME-TAX> 1,609
<INCOME-CONTINUING> 2,625
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,625
<EPS-PRIMARY> 1.53
<EPS-DILUTED> 1.48
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