UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 April 1, 1995
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 1-6105
Hampton Industries, Inc.
(Exact name of registrant as specified in its charter)
North Carolina 56-0482565
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2000 Greenville Hwy., P.O. Box 614, Kinston, NC 28502-0614
(Address of principal executive offices) (Zip Code)
(919) 527-8011
(Registrant's telephone number, including area code)
Not Applicable
(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 Sections 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 May 2, 1995, there were 4,585,629 shares of common
stock outstanding.
<TABLE>
HAMPTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
April 1, March 26, December 31,
1995 1994 1994
------------ ------------ -------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash $ 344,966 $ 530,023 $ 1,132,205
Accounts Receivable - net 26,568,869 22,158,724 22,260,087
Inventories 52,624,773 36,860,889 38,972,245
Deferred income tax benefits 1,730,641 2,114,200 1,639,641
Other current assets 531,666 1,072,404 851,156
------------ ------------ -------------
Total current assets 81,800,915 62,736,240 64,855,334
Property, plant and equipment - net 22,402,528 23,900,555 22,893,125
Assets held for disposal - net 450,390 1,294,801 521,759
Investments in and advances to
unconsolidated subsidiaries 1,656,886 754,520 1,564,167
Other assets 727,354 630,106 781,500
------------ ------------ -------------
$ 107,038,073 $ 89,316,222 $ 90,615,885
============ ============ =============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable - banks and current
maturities of long-term debt $ 12,527,057 $ 962,522 $ 1,064,657
Accounts payable 14,026,043 10,697,954 10,179,757
Accrued liabilities 3,603,173 4,576,969 3,289,648
Income taxes 69,750 255,985 1,115,170
------------ ------------ -------------
Total current liabilities 30,226,023 16,493,430 15,649,232
Deferred income tax liabilities 1,494,383 1,729,200 1,497,683
Long-term debt 19,005,986 18,122,137 17,002,214
Retirement plan obligations 4,222,719 3,613,819 4,191,790
Stockholders' equity 52,088,962 49,357,636 52,274,966
------------ ------------ -------------
$ 107,038,073 $ 89,316,222 $ 90,615,885
============ ============ =============
Note: The consolidated balance sheet at December 31, 1994 has been taken
from the audited financial statements and condensed.
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
HAMPTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Thirteen Weeks Ended
April 1, March 26,
1995 1994
------------ -----------
<S> <C> <C>
Net sales $ 40,082,233 $ 35,430,994
------------- -----------
Costs and expenses:
Cost of products sold 32,174,711 28,719,969
Selling, general and administrative 7,640,601 6,793,690
Customs duty refunds (22,927) -
Equity in (earnings) loss of
of unconsolidated subsidiaries (6,221) 45,898
Provision for restructuring costs - 2,282,388
Interest 576,373 375,055
----------- -----------
40,362,537 38,217,000
----------- ----------
Loss before income tax
benefit (280,304) (2,786,006)
Income tax benefit (94,300) (870,400)
------------ -----------
Net loss $ (186,004) $(1,915,606)
=========== ===========
Net loss per common share $(.04) $(.42)
==== ====
Average common shares outstanding 4,585,629 4,585,629
======== ========
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
HAMPTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended
April 1, March 26,
1995 1994
--------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (186,004) $ (1,915,606)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities
Amortization 13,053 9,555
Depreciation 683,014 809,054
Deferred income taxes (94,300) (843,700)
LIFO charge 501,200 862,400
Reserve for doubtful accounts and allowances 153,672 (161,467)
Retirement plan obligations 30,929 72,703
Gain on sale of operating assets (39,163) (91,792)
Equity in (earnings) loss of
unconsolidated subsidiaries (6,221) 45,898
Provision for restructuring costs (5,712) 2,325,194
Changes in current assets
and current liabilities
Accounts receivable (4,462,454) 1,619,792
Inventories on a FIFO basis (14,153,728) (2,673,943)
Other current assets 319,490 (127,143)
Accounts payable 3,846,286 1,610,074
Accrued liabilities 319,237 1,042,881
Income taxes (1,045,420) (32,103)
NET CASH (USED IN) PROVIDED BY ------------ -----------
OPERATING ACTIVITIES (14,066,121) 2,551,797
------------ -----------
INVESTING ACTIVITIES:
Additions to property, plant and equipment (172,775) (211,802)
Proceeds received from sale of property,
plant and equipment 98,189 760,409
Increase in investments in and advances to
unconsolidated subsidiaries (93,797) (495,131)
Decrease (Increase) in other assets 41,093 (150,567)
NET CASH USED IN ------------ -----------
INVESTING ACTIVITIES (187,290) (97,091)
------------ -----------
FINANCING ACTIVITIES:
Additions to debt - Banks 13,765,000 -
Payments on debt-Banks - (2,402,000)
-Other (298,828) (216,979)
NET CASH PROVIDED BY (USED IN) FINANCING ------------ -----------
ACTIVITIES 13,466,172 (2,618,979)
------------ -----------
DECREASE IN CASH (787,239) (164,273)
CASH AT BEGINNING OF PERIOD 1,132,205 694,296
------------ -----------
CASH AT END OF PERIOD $ 344,966 $ 530,023
============ ===========
Cash paid during the period - Interest $ 310,000 $ 209,000
============ ===========
- Income Taxes $ 1,191,000 $ 140,000
============ ===========
See notes to condensed consolidated financial statements.
</TABLE>
HAMPTON INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information as of April 1, 1995 and March 26, 1994 is unaudited.)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheets as of April 1,
1995 and March 26, 1994 and the condensed consolidated
statements of operations and cash flows for the thirteen-week
periods then ended have been prepared by the Company, without
audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash
flows at April 1, 1995 and for all periods presented have been
made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated
financial statements be read in conjunction with the audited
financial statements and notes thereto included in the Company's
December 31, 1994 annual report to shareholders. The results of
operations for the period ended April 1, 1995 are not
necessarily indicative of the operating results for the full
year.
Certain reclassifications have been made to the comparative
period condensed consolidated financial statements to conform to
classifications used at April 1, 1995.
<TABLE>
2. INVENTORIES
Inventories consist of the following:
<CAPTION>
April 1, March 26, December 31,
1995 1994 1994
<S> <C> <C> <C>
Finished goods $29,937,556 $24,609,192 $24,757,375
Work-in-process 8,079,442 4,811,497 7,148,319
Piece goods 12,594,087 6,484,273 5,823,719
Supplies and other 2,013,688 955,927 1,242,832
$52,624,773 $36,860,889 $38,972,245
</TABLE>
Inventories are stated at the lower-of-cost or market. Cost
is determined primarily by the last-in, first-out method (LIFO).
The LIFO method results in a better matching of cost and
revenues. At April 1, 1995, March 26, 1994, and December 31,
1994, inventories at LIFO were approximately $5,790,000,
$6,244,000 and $5,289,000 lower, respectively, than they would
have been had the first-in, first-out method of determining cost
been used. The LIFO valuation method had the effect of
decreasing net earnings by $332,600 ($.07 per share) for the
thirteen weeks ended April 1, 1995 and decreasing net earnings
by $593,000 ($.13 per share) for the thirteen weeks ended March
26, 1994.
I-4
<TABLE>
3. STOCKHOLDERS' EQUITY
Stockholders' equity is comprised of:
<CAPTION>
April 1, March 26, December 31,
1995 1994 1994
<S> <C> <C> <C>
Common stock $ 5,191,454 $5,191,454 $ 5,191,454
Additional paid-in capital 34,018,908 34,018,908 34,018,908
Retained earnings 17,755,944 15,024,618 17,941,948
56,966,306 54,234,980 57,152,310
Less cost of 605,825 shares
of common stock
held in treasury 4,877,344 4,877,344 4,877,344
$52,088,962 $49,357,636 $52,274,966
</TABLE>
4. OTHER CURRENT ASSETS
Included in other current assets are estimated tax refunds
of approximately $232,000 at April 1, 1995, $864,000 at March 26, 1994 and
$637,000 at December 31, 1994.
5. RESTRUCTURING COSTS
In the first quarter of 1994, management announced the
closing of a domestic manufacturing plant, which closing was
completed in July, 1994. The closing reduced the Company's
excess domestic production capacity. The estimated costs of
closing this plant are included in the accompanying statements
of operations as Provision for Restructuring Costs. The
restructuring costs include approximately $1,434,000 in noncash
charges related to the estimated disposition value of the
facility and manufacturing equipment and approximately $844,000
of severance and related closing costs.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND OPERATING RESULTS
The following discussion and analyses of the condensed
consolidated results of operations and financial conditions
should be read in conjunction with the accompanying financial
statements and related notes to provide additional information
concerning the Company's financial activities and conditions.
I-5
<TABLE>
Results of Operations
The following table summarizes the operating data for the
periods indicated:
<CAPTION>
Thirteen Weeks Ended
April 1, March 26,
1995 1994
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of products sold 80.3 81.1
Selling, general and administrative 19.1 19.2
Provision for restructuring costs - 6.4
Equity in (earnings) loss of unconsolidated
subsidiaries - .1
Operating income (loss) .6 (6.8)
Interest 1.4 1.1
Loss before income taxes (.8) (7.9)
Net loss (.5) (5.4)
</TABLE>
Net sales for the quarter increased by approximately 13%.
Units shipped were approximately the same in both periods.
Average selling prices increased by approximately 13% as a
result of a change in product mix. Sales of two new divisions,
Nautica for Boys and Rawlings activewear accounted for the sales
increase and the increase in average prices. The increase in
gross margin was also positively affected by these divisions.
Selling, general and administrative expenses were
approximately the same percentage of sales in both periods, with
the increase in absolute dollars primarily attributable to an
increase in royalties in the 1995 quarter.
Interest expense was approximately the same percentage of
sales during both quarters. However, higher rates and increased
borrowings accounted for the actual increase in interest expense.
During 1994, The Company reported a charge against
operations of $2,282,000 for plant closing costs and severance
costs related to the closing of a domestic facility.
The effective tax benefit rate was 33.6% versus 31.2% in
1994. The 1994 rate was affected by the loss of certain future
tax benefits attributable to the continuing net operating losses
of the domestic manufacturing plants that have been closed.
Liquidity and Capital Resources
As of the end of the quarter, bank borrowings totaled
$24,450,000, as compared to $14,838,000 as of March 26, 1994 and
$10,685,000 as of December 31, 1994. The increase in borrowings
was used primarily to fund the buildup in work-in-process and
finished goods inventory levels. During 1994, the cash
generated from operations during the quarter was used to reduce
the outstanding bank debt. The working capital ratio was 2.71:1
as of April 1, 1995 as compared to 3.80:1 as of March 26, 1994.
Additions to plant, property and equipment of $173,000,
representing normal replacement and upgrading, as compared to
$212,000 in 1994. Budgeted capital expenditures for 1995 are
estimated to be in the same range as in 1994, and will be
financed from operations.
The Company's investment in and advances to its Central
American joint ventures was $94,000 during the quarter as
compared to $495,000 in 1994. Additional advances are not
expected to be significant during the year.
I-6
The Company had available unused lines of credit as of April 1,
1995 of $3,550,000 which amount fluctuates based on seasonal
requirements pursuant to the terms of the existing credit
agreement. The credit provided under the agreement, together
with the cash provided by operations, is expected to be adequate
to meet the Company's short-term financing needs in 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of l934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunder duly authorized.
HAMPTON INDUSTRIES, INC.
Registrant
S/PAUL CHUSED
Date: May 11, 1995
Paul Chused, President
S/ROBERT J. STIEHL, JR.
Robert J. Stiehl, Jr.,
Executive Vice President -
Operations and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> APR-01-1995
<CASH> 344,966
<SECURITIES> 0
<RECEIVABLES> 26,568,869
<ALLOWANCES> 0
<INVENTORY> 52,624,773
<CURRENT-ASSETS> 531,666
<PP&E> 22,402,528
<DEPRECIATION> 0
<TOTAL-ASSETS> 107,038,073
<CURRENT-LIABILITIES> 30,226,023
<BONDS> 0
<COMMON> 5,191,454
0
0
<OTHER-SE> 46,897,508
<TOTAL-LIABILITY-AND-EQUITY> 107,038,073
<SALES> 40,082,233
<TOTAL-REVENUES> 40,111,381
<CGS> 32,174,711
<TOTAL-COSTS> 32,174,711
<OTHER-EXPENSES> 7,640,601
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 576,373
<INCOME-PRETAX> (280,304)
<INCOME-TAX> (94,300)
<INCOME-CONTINUING> (186,004)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (186,004)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
