<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 No. 1-5137
FIELDCREST CANNON, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 56-0586036
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Lake Drive
Kannapolis, NC 28081
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code 704-939-2000
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 and
(2) has been subject to such filing requirements for the past 90
days. Yes x . No .
Number of shares outstanding July 31, 1996
Common Stock 9,038,251
Total pages 19<PAGE>
Exhibit Index Page 11
<PAGE> PART 1. FINANCIAL INFORMATION
FIELDCREST CANNON, INC.
Consolidated statement of financial position
<TABLE>
<CAPTION>
June 30, December 31,
Dollars in thousands 1996 1995
<S> <C> <C>
Assets
Cash $ 10,460 $ 9,124
Accounts receivable 181,907 168,112
Inventories (note 3) 254,387 228,167
Other prepaid expenses and current assets 2,031 3,446
Total current assets 448,785 408,849
Plant and equipment, net 336,981 342,285
Deferred charges and other assets 60,185 61,812
Total assets $ 845,951 $812,946
Liabilities and shareowners' equity
Accounts and drafts payable $ 77,952 $ 54,274
Deferred income taxes 18,547 17,593
Accrued liabilities 62,354 67,725
Current portion of long-term debt 6,930 780
Total current liabilities 165,783 140,372
Senior long-term debt 162,425 155,262
Subordinated long-term debt 203,750 210,000
Total long-term debt 366,175 365,262
Deferred income taxes 42,730 40,475
Other non-current liabilities 54,584 51,406
Total liabilities 629,272 597,515
Shareowners' equity:
Preferred Stock, $.01 par value,
10,000,000 authorized, 1,500,000 issued
and outstanding June 30, 1996 and
December 31, 1995 (aggregate liquidation
preference of $75,000) 15 15
Common Stock, $1 par value,
25,000,000 authorized, 12,644,651 issued
June 30, 1996 and 12,560,826
December 31, 1995 12,645 12,561
Additional paid in capital 222,990 221,025
Retained earnings 98,254 99,055
Excess purchase price for Common Stock
acquired and held in treasury -
3,606,400 shares (117,225) (117,225)
Total shareowners' equity 216,679 215,431
Total liabilities and shareowners' equity $845,951 $812,946
/TABLE
<PAGE>
See accompanying notes
(2)
<PAGE>
FIELDCREST CANNON, INC.
Consolidated statement of income and retained earnings
<TABLE>
<CAPTION>
For the three months For the six months
Dollars in thousands, ended June 30 ended June 30
except per share data 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $277,803 $273,048 $527,774 $530,057
Cost of sales 241,802 238,662 456,914 452,687
Selling, general and administrative 25,036 25,644 50,153 52,346
Restructuring charges - 4,530 3,630 8,454
Total operating costs and expenses 266,838 268,836 510,697 513,487
Operating income 10,965 4,212 17,077 16,570
Other deductions (income):
Interest expense 7,281 6,681 14,336 13,483
Other, net 282 - 422 (144)
Total other deductions 7,563 6,681 14,758 13,339
Income (loss) before income taxes 3,402 (2,469) 2,319 3,231
Federal and state income
taxes (benefit) 1,276 (925) 870 1,212
Net income (loss) 2,126 (1,544) 1,449 2,019
Preferred dividends (1,125) (1,125) (2,250) (2,250)
Earnings (loss) on common 1,001 (2,669) (801) (231)
Amount added to (subtracted from)
retained earnings 1,001 (2,669) (801) (231)
Retained earnings,
beginning of period 97,253 121,718 99,055 119,280
Retained earnings, end of period $98,254 $119,049 $98,254 $119,049
Net income (loss) per common share $ .11 $ (.30) $ (.09) $ (.02)
Fully diluted income (loss)
per common share $ .11 $ (.30) $ (.09) $ (.02)
Average primary shares outstanding 9,001,981 8,860,341 8,982,100 8,833,658
Average fully diluted shares outstanding 9,001,981 8,860,199 8,983,219 8,834,032
/TABLE
<PAGE>
See accompanying notes
(3)
<PAGE>
FIELDCREST CANNON, INC.
Consolidated statement of cash flows
<TABLE>
<CAPTION>
Six Months
ended June 30
Dollars in thousands 1996 1995
<S> <C> <C>
Increase (decrease) in cash
Cash flows from operating activities:
Net income $ 1,449 $ 2,019
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 17,853 15,710
Deferred income taxes 2,255 2,471
Other 6,989 (1,377)
Change in current assets and liabilities,
excluding effects of acquisition of Sure Fit:
Accounts receivable (13,795) 6,860
Inventories (26,220) (27,060)
Other prepaid expenses and current assets 1,415 577
Accounts payable and accrued liabilities 18,307 (542)
Federal and state income taxes - (2,268)
Deferred income taxes 954 (1,372)
Net cash provided by (used in)
operating activities 9,207 (4,982)
Cash flows from investing activities:
Additions to plant and equipment (15,362) (32,447)
Proceeds from disposal of plant and equipment 2,637 621
Proceeds from net assets held for sale - 20,800
Purchase of Sure Fit, net of cash acquired - (27,300)
Net cash (used in) investing activities (12,725) (38,326)
Cash flows from financing activities:
Increase in revolving debt 7,478 45,502
Payments on long-term debt (415) (1,101)
Proceeds from sale of common stock 41 57
Dividends paid on preferred stock (2,250) (2,250)
Net cash provided by financing activities 4,854 42,208
Increase (decrease) in cash 1,336 (1,100)
Cash at beginning of year 9,124 5,885
Cash at end of period $10,460 $ 4,785
</TABLE>
<PAGE>
See accompanying notes
(4)
<PAGE>
FIELDCREST CANNON, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
1. Basis of Presentation
The consolidated financial statements are unaudited. In the
opinion of management all adjustments, consisting only of
normal recurring items, have been made which are necessary to
show a fair presentation of the financial position of the
Company at June 30, 1996 and the related results of
operations for the three and six months ended June 30, 1996
and 1995. The unaudited consolidated financial statements
should be read in conjunction with the Company's Form 10-K
for the year ended December 31, 1995.
2. Income Per Common Share
Reference is made to Exhibit 11 to this Form 10-Q for a
computation of primary and fully-diluted net income per
Common share.
3. Inventories
Inventories are classified as follows:
<TABLE>
<CAPTION>
June 30, December 31,
(In thousands) 1996 1995
<S> <C> <C>
Finished goods $138,736 $117,776
Work in process 81,965 72,315
Raw materials and supplies 33,686 38,076
$254,387 $228,167
</TABLE>
At June 30, 1996 approximately 77% of the inventories were
valued on the last-in, first-out method (LIFO).<PAGE>
(5)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Changes in Financial Condition
The Company's debt (including the current portion of long-term
debt) increased $7.5 million during the first six months of 1996.
Debt increased primarily because inventories increased $26.2
million due to normal seasonal inventory build-up. Capital
expenditures totaled $15.4 million for the first six months of
1996 compared to $32.4 million for the first six months of 1995.
Included in the 1996 and 1995 capital expenditures are $4.7
million and $17.8 million, respectively, for the new weaving
plant at the Company's Columbus, GA/Phenix City, Ala. towel mill.
Capital expenditures for 1996 are expected to be approximately
$35 million. At June 30, 1996, approximately $32.4 million of
the Company's $195 million revolving credit facility was
available and unused. It is anticipated that financing of future
capital expenditures will be provided by cash flows from
operations, borrowings under the Company's revolving credit
facility, and, possibly, the sale of long-term debt or equity
securities.
The Company has retained a financial advisor in connection with
the possible sale of its Blanket Division, which had net sales of
$71 million in 1995 and net assets of approximately $40 million.
Proceeds from any sale would be used to reduce debt and for
reinvestment in the Company's core businesses.
Changes in Results of Operations
Quarter Ended June 30, 1996 vs. Quarter Ended June 30, 1995
Net sales for the second quarter of 1996 were $277.8 million
compared to $273.0 million in the second quarter of 1995, an
increase of 2%. The increase in revenues was due primarily to
volume increases.
Gross profit margins increased from 12.6% in the second quarter
of 1995 to 13.0% in the second quarter of 1996. The increase
reflects the benefits of the new towel facility in Phenix City,
Alabama, and a series of cost-reduction programs implemented by
the Company. These include the Bed Division's closing of two
yarn facilities in the first quarter and the division's decision
to begin purchasing yarn from outside suppliers. The Bed
Division's changes are expected to result in annual pre-tax
savings of approximately $9 million. The increase in margins was
mitigated by lower mill activity, higher cotton costs and $1.6
million of equipment relocation and employee training costs
related to the consolidation and closing of two towel facilities.
Additional operating costs of approximately $1 million are
expected in the third quarter of 1996 before benefits of the
towel consolidation are realized. The towel consolidation is<PAGE>
expected to result in annual pre-tax savings of $8 million to $9
million.
(6)
<PAGE>
Selling, general and administrative expenses decreased as a
percentage of sales from 9.4% to 9.0% in the second quarter of
1996 compared to the same quarter of 1995. The decrease was due
primarily to lower payroll costs associated with the New York
office reorganization and the early retirement program
implemented during 1995.
In the second quarter of 1995 operating income was reduced by
pre-tax restructuring charges of $4.5 million related to the
reorganization of the Company's New York operations.
Operating income as a percentage of sales increased to 3.9% in
the second quarter of 1996 from 1.5% in the second quarter of
1995. The increase was due to the $4.5 million of 1995
restructuring charges, improved gross margins and lower selling,
general and administrative expenses.
Interest expense increased $.6 million in the second quarter of
1996 as compared to the second quarter of 1995 due primarily to
an increase in average debt outstanding.
The effective income tax rate was 37.5% for the second quarters
of 1996 and 1995.
Net income was $2.1 million, or $.11 per share in the second
quarter of 1996, compared to a net loss of $1.5 million, or $.30
per share, in the second quarter of 1995.
Six Months Ended June 30, 1996 vs. Six Months Ended June 30,
1995
Net sales for the first six months of 1996 were $527.8 million
compared to $530.1 million in the first six months of 1995. The
decrease in revenues was due primarily to volume decreases which
occurred during the first three months of the period.
Gross profit margins decreased from 14.6% in the first six months
of 1995 to 13.4% in the first six months of 1996. The decrease
was due primarily to lower mill activity, higher raw material
prices and $1.6 million of equipment relocation and employee
training costs related to the consolidation and closing of two
towel facilities.
Selling, general and administrative expenses decreased as a
percentage of sales from 9.9% to 9.5% in the first six months of
1996 compared to the first six months of 1995. The decrease was
due primarily to lower payroll costs associated with the New York
office reorganization and the early retirement program
implemented during 1995.
Pre-tax restructuring charges of $3.6 million in the first six<PAGE>
months of 1996 relate to closing a towel weaving plant and a yarn
manufacturing plant as a part of the Company's ongoing
consolidation effort to utilize assets more effectively. The
restructuring charges of $8.5 million in the first six months of
1995 relate to the reorganization of the Company's New York
operations.
(7)
<PAGE>
Operating income as a percentage of sales increased to 3.2% in
the first six months of 1996 from 3.1%.
Interest expense increased $.9 million the first six months of
1996 as compared to the first six months of 1995 due primarily to
an increase in average debt outstanding.
The effective income tax rate was 37.5% for the first six months
of 1996 and 1995.
Net income, after the effect of the restructuring charges, was
$1.4 million, a $.09 loss per share after preferred dividends,
for the first six months of 1996 compared to net income of $2.0
million, a $.02 loss per share after preferred dividends, for the
first six months of 1995.
Forward-Looking Statements
Certain statements in management's financial discussion and
analysis above contain forward-looking information, including the
statements under the discussion of the quarter ended June 30,
1996 versus the quarter ended June 30, 1995 relating to the
amount of expected annual pre-tax savings from certain changes in
the Bed Division and the timing and amount of savings expected to
result from the Company's towel consolidation efforts. Actual
results and trends could differ materially from those that are
reflected in such statements due to a variety of important
factors, including changes in the Company's product sales mix and
market conditions for bed and bath products.<PAGE>
(8)
<PAGE>
PART II. OTHER INFORMATION
FIELDCREST CANNON, INC.
Item 4. Submission of Matters to a Vote of Security Holders
(a). The Company held its Annual Meeting of Stockholders on
April 29, 1996.
(b). Not applicable.
(c). Holders of Common Stock (one vote per share) voted at
this meeting on the following matters, which were set
forth in full in the Registrant's Proxy statement dated
March 27, 1996.
I. Election of Directors:
Votes
Nominee: For Withheld
James M. Fitzgibbons 8,233,834 90,184
William E. Ford 8,234,029 89,989
John C. Harned 8,240,594 83,424
Noah T. Herndon 8,240,858 83,160
S. Roger Horchow 8,232,510 91,508
W. Duke Kimbrell 8,237,754 86,264
C. J. Kjorlien 8,236,983 87,035
Alexandra Stoddard 8,224,938 99,080
II. Selection of Independent Auditors:
Votes
For 8,279,326
Against 27,139
Abstain 17,553
(d). Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits<PAGE>
10-1. Fifth Amendment to Third Amended and Restated
Revolving Credit Agreement dated March 29, 1996
11. Computation of Primary and Fully Diluted Net
Income Per Share.
(9)
<PAGE>
(b). Reports on Form 8-K
The Registrant did not file any reports to the
Commission on Form 8-K for the quarter ended June 30,
1996.
S I G N A T U R E S
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.
FIELDCREST CANNON, INC.
(Registrant)
BY: /s/ T. R. Staab
T. R. Staab
Vice President and
Chief Financial Officer<PAGE>
Date: August 9, 1996
(10)
<PAGE>
EXHIBIT INDEX TO
QUARTERLY REPORT ON FORM 10-Q FOR
FIELDCREST CANNON, INC.
FOR THE QUARTER ENDED JUNE 30, 1996
Exhibit Page
Number Description Number
(10.1) Fifth Amendment to Third Amended
and Restated Revolving Credit
Agreement dated March 29, 1996 12-18
(11) Computation of Primary and Fully
Diluted Net Income Per Share 19<PAGE>
(11)
Exhibit 10.1
<PAGE>
FIFTH AMENDMENT
to
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This FIFTH AMENDMENT (the "Amendment"), dated as of March
29, 1996, is by and among FIELDCREST CANNON, INC., a Delaware
corporation (the "Company"), the lenders listed on the signature
pages hereto (the "Lenders"), BANK OF AMERICA ILLINOIS (formerly
known as Continental Bank N.A.), CORESTATES BANK, N.A. (formerly
known as Philadelphia National Bank) and FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, as lead managers for the Lenders
(collectively, the "Lead Managers"), and THE FIRST NATIONAL BANK
OF BOSTON, as agent for the Lenders (the "Agent").
WHEREAS, the Company, the Lenders, the Lead Managers and the
Agent are parties to that certain Third Amended and Restated
Revolving Credit Agreement, dated as of March 10, 1994, as
amended (as so amended, the "Credit Agreement"); and
WHEREAS, the Company, the Lenders, the Lead Managers and the
Agent have agreed, subject to the terms and conditions set forth
herein, to amend certain provisions of the Credit Agreement as
set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Para. 1. CERTAIN DEFINED TERMS. Capitalized terms which
are used herein without definition and which are defined in the
Credit Agreement shall have the same meanings herein as in the
Credit Agreement.
Para. 2. AMENDMENT TO CREDIT AGREEMENT.
(a) Section 1 of the Credit Agreement is hereby
amended by adding the following new definitions in the
appropriate places in the alphabetical sequence thereof:
Mill Closing Expenses Amount. For any fiscal
quarter of the Company, the aggregate amount of
restructuring expenses incurred by the Company as
normal operating expenses during such fiscal quarter as
a result of the closure of the Company's towel
manufacturing facility, known as Plant 19, located in
York, South Carolina and the Company's yarn plant,
known as Plant 15, located in Concord, North Carolina,<PAGE>
including costs
-1-
(12)
<PAGE>
resulting from the relocation of equipment, the costs
of training employees for production transferred to the
Company's remaining towel manufacturing facilities and
idle plant costs, as such amount is identified by the
Company to the Agent in a manner satisfactory to the
Agent in all respects.
Mill Closing Restructuring Charge. An amount
equal to the one-time charge against Consolidated Net
Income of the Company and its Subsidiaries for the
fiscal quarter of the Company ending March 31, 1996
incurred as a result of the closing of the Company's
towel manufacturing facility, known as Plant 19,
located in York, South Carolina and the Company's yarn
plant, known as Plant 15, located in Concord, North
Carolina, as such amount is reflected in the
consolidated financial statements of the Company and
its Subsidiaries for such fiscal period; provided that
in no event shall the Mill Closing Restructuring Charge
include the Mill Closing Expenses Amount.
(b) The definition of "Consolidated Net Income" set
forth in para. 1 of the Credit Agreement is hereby amended
by deleting the word "and" at the end of clause (c) thereof
and substituting therefor a comma and inserting before the
period at the end of the definition of "Consolidated Net
Income" the following text: ", (e) there shall be added to
Consolidated Net Income for the fiscal quarter ending March
31, 1996, an amount equal to the Mill Closing Restructuring
Charge, as determined on a basis, provided that in no event
shall the aggregate amount added to Consolidated Net Income
pursuant to this clause (e) exceed $5,000,000, and (f) there
shall be added to Consolidated Net Income for the fiscal
quarters ending March 31, 1996, June 30, 1996, September 30,
1996 and December 31, 1996 an amount equal to the Mill
Closing Expenses Amount for such fiscal quarter, as
determined on a pre-tax basis, provided that in no event
shall the aggregate amount added to Consolidated Net Income
for the combined four quarter fiscal period pursuant to this
clause (f) exceed $3,200,000, all as determined in
accordance with Generally Accepted Accounting Principles."
Para. 3. AFFIRMATION BY THE COMPANY AND THE
GUARANTORS.
(a) The Company hereby ratifies and confirms all of
the Lender Obligations, including, without limitation, the<PAGE>
Loans, and the Company hereby affirms its absolute and
unconditional promise to pay to the Lenders the Loans and
all other amounts due under the Credit Agreement as amended
hereby. The Company hereby confirms that the Lender
Obligations are and remain secured pursuant to the Security
Documents to which the Company is a party.
-2-
(13)
<PAGE>
(b) Each of Crestfield Cotton, FCC Canada, Encee,
Fieldcrest International, St. Mary's, Fieldcrest
Transportation, Fieldcrest Financing, Fieldcrest Licensing
and Fieldcrest Sure Fit hereby acknowledges the provisions
of this Amendment and hereby reaffirms its absolute and
unconditional guaranty of the Company's payment and
performance of the Lender Obligations to the Banks as more
fully described in the Guaranty to which such Person is a
party. Each of the Secured Guarantors hereby confirms that
its obligations under the Guaranty to which it is a party
are and remain secured pursuant to the Security Documents to
which it is a party.
Para. 4. REPRESENTATIONS AND WARRANTIES. The Company
hereby represents and warrants to the Lenders as follows:
(a) Representations and Warranties. The
representations and warranties contained in para. 6 of the
Credit Agreement were true and correct in all material
respects when made. The representations and warranties
contained in para. 6 of the Credit Agreement, as amended
hereby, are true and correct on the date hereof.
(b) Enforceability. The execution and delivery by the
Company and the Secured Guarantors of this Amendment and all
other instruments and agreements required to be executed and
delivered by the Company and the Secured Guarantors, as the
case may be, in connection with the transactions
contemplated hereby or referred to herein (collectively, the
"Amendment Documents"), and the performance by the Company
and the Secured Guarantors of the Amendment Documents and
the Credit Agreement, as amended hereby, are within the
corporate powers of the Company and the Secured Guarantors,
as the case may be, and have been duly authorized by all
necessary corporate action on the part of the Company and
the Secured Guarantors, as the case may be. Each of the
Amendment Documents and the Credit Agreement, as amended
hereby, are valid and legally binding obligations of the
Company and the Secured Guarantors, as the case may be,
enforceable in accordance with their terms, except as
limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the
enforcement of creditors' rights in general.
(c) No Default. No Default or Event of Default has<PAGE>
occurred and is continuing and no Default or Event of
Default will exist after the execution and delivery of this
Amendment or after the consummation of the transactions
contemplated hereby.
Para. 5. EFFECTIVENESS. This Amendment shall become
effective upon satisfaction of each of the following
conditions precedent on or prior to March 31, 1996:
-3-
(14)
<PAGE>
(a) Delivery. The Company, the Majority Lenders, the
Agent and the guarantors referred to in para. 3(b) hereof
shall have executed and delivered this Amendment.
(b) Proceedings and Documents. All proceedings in
connection with the transactions contemplated by this
Amendment and all documents incident hereto shall be
satisfactory in form and substance to the Agent, and the
Agent shall have received all information and such
counterpart originals or certified or other copies of such
documents as the Agent may reasonably request.
Para. 6. MISCELLANEOUS PROVISIONS. (a) Except as
otherwise expressly provided by this Amendment, all of the
terms, conditions and provisions of the Credit Agreement
shall remain the same. It is declared and agreed by each of
the parties hereto that the Credit Agreement, as amended
hereby, shall continue in full force and effect, and that
this Amendment and such Credit Agreement shall be read and
construed as one instrument. The consent granted hereunder
is limited to the specific matters referred to herein and
the Lenders shall not have any obligation to issue any
further consent with respect to the subject matter of this
consent or any other matter.
(b) This Amendment is intended to take effect as an
agreement under seal and shall be construed according to and
governed by the laws of the Commonwealth of Massachusetts.
(c) This Amendment may be executed in any number of
counterparts, but all such counterparts shall together
constitute but one instrument. In making proof of this
Amendment it shall not be necessary to produce or account
for more than one counterpart signed by each party hereto by
and against which enforcement hereof is sought.
(d) The Company hereby agrees to pay to the Agent, on
demand by the Agent, all reasonable out-of-pocket costs and
expenses incurred or sustained by the Agent in connection
with the preparation of this Amendment and the documents
referred to herein (including reasonable legal fees).<PAGE>
-4-
(15)
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Fifth Amendment as of the date first above written.
FIELDCREST CANNON, INC.
By:/s/ T. R. Staab
Title: Vice President and
Chief Financial Officer
THE FIRST NATIONAL BANK
OF BOSTON, as Agent
By:/s/ Mitchell B. Feldman
Title: Managing Director
THE FIRST NATIONAL BANK
OF BOSTON
By:/s/ Mitchell B. Feldman
Title: Managing Director
BANK OF AMERICA ILLINOIS,
individually and as Lead Manager
By:/s/ Deirdre B. Doyle
Title: Vice President
CORESTATES BANK, N. A.,
individually and as Lead Manager
By:/s/ James P. Richards
Title: Vice President<PAGE>
-5-
(16)<PAGE>
<PAGE> FIRST UNION NATIONAL BANK
OF NORTH CAROLINA, individually
and as Lead Manager
By:/s/ J. M. Highsmith
Title: Senior Vice President
BANK OF MONTREAL
By:
Title:
MELLON BANK, N. A.
By:/s/ Charles M. Staub
Title: Vice President
Each of the undersigned joins in this Fifth Amendment
for purposes of para. (b) hereof.
CRESTFIELD COTTON COMPANY
By:/s/ T. R. Staab
Title: Vice President and
Treasurer
FCC CANADA, INC.
By:/s/ T. R. Staab
Title: Vice President and
Treasurer
ENCEE, INC.
By:/s/ T. R. Staab
Title: Vice President and
Treasurer
-6-
(17)<PAGE>
<PAGE> FIELDCREST CANNON
INTERNATIONAL, INC.
By:/s/ T. R. Staab
Title: Vice President and
Treasurer
ST. MARY'S, INC.
By:/s/ T. R. Staab
Title: Vice President and
Treasurer
FIELDCREST CANNON
TRANSPORTATION, INC.
By:/s/ T. R. Staab
Title: Vice President and
Treasurer
FIELDCREST CANNON LICENSING, INC.
By:/s/ John E. Setliff, Jr.
Title: Vice President
FIELDCREST CANNON FINANCING, INC.
By:/s/ John E. Setliff, Jr.
Title: Vice President
FIELDCREST CANNON SURE FIT, INC.
By:/s/ T. R. Staab
Title: Vice President and
Chief Financial Officer
-7-
(18)<PAGE>
<PAGE>
Exhibit 11
Computation of Primary and Fully Diluted Net Income Per Share
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30 ended June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Average shares outstanding 8,992,496 8,848,175 8,973,663 8,821,167
Add shares assuming exercise of
options reduced by the number
of shares which could have been
purchased with the proceeds from
exercise of such options 9,485 12,166 8,437 12,491
Average shares and equivalents
outstanding, primary 9,001,981 8,860,341 8,982,100 8,833,658
Average shares outstanding 8,992,496 8,848,175 8,973,663 8,821,167
Add shares giving effect to the
conversion of the convertible
subordinated debentures (1) (1) (1) (1)
Add shares giving effect to the
conversion of the convertible
preferred stock (1) (1) (1) (1)
Add shares assuming exercise of
options reduced by the number
of shares which could have been
purchased with the proceeds from
exercise of such options 9,485 12,024 9,556 12,865
Average shares and equivalents
outstanding, assuming full
dilution 9,001,981 8,860,199 8,983,219 8,834,032
Primary Earnings
Net income (loss) $ 2,126,000 $(1,544,000) $1,449,000 $2,019,000
Preferred dividends (1,125,000) (1,125,000) (2,250,000) (2,250,000)
Earnings (loss) on Common $ 1,001,000 $(2,669,000) $ (801,000) $ (231,000)
Primary earnings (loss)
per common share $ .11 $ (.30) $ (.09) $ (.02)
Fully Diluted Earnings
Earnings (loss) on Common $ 1,001,000 $(2,669,000) $ (801,000) $ (231,000)
Add convertible subordinated
debenture interest, net of taxes (1) (1) (1) (1)
Add convertible preferred dividends (1) (1) (1) (1)
Net income (loss) $ 1,001,000 $(2,669,000) $ (801,000) $ (231,000)<PAGE>
Fully diluted earnings (loss)
per Common share $ .11 $ (.30) $ (.09) $ (.02)
</TABLE>
(1) The assumed conversion of the Registrant's Convertible
Subordinated Debentures and Convertible Preferred Stock for the
three months and six months ended June 30, 1996 and 1995 would
have an anti-dilutive effect for the computation of earnings per
share; therefore, conversion has not been assumed for these
periods.
(19)<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 10,460
<SECURITIES> 0
<RECEIVABLES> 181,907
<ALLOWANCES> 0
<INVENTORY> 254,387
<CURRENT-ASSETS> 448,785
<PP&E> 336,981
<DEPRECIATION> 0
<TOTAL-ASSETS> 845,951
<CURRENT-LIABILITIES> 165,783
<BONDS> 366,175
0
15
<COMMON> 12,645
<OTHER-SE> 204,019
<TOTAL-LIABILITY-AND-EQUITY> 845,951
<SALES> 527,774
<TOTAL-REVENUES> 527,774
<CGS> 456,914
<TOTAL-COSTS> 456,914
<OTHER-EXPENSES> 53,783
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,336
<INCOME-PRETAX> 2,319
<INCOME-TAX> 870
<INCOME-CONTINUING> 1,449
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,449
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
