UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
For the fiscal year ended December 30, 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 (I.R.S. Employer
jurisdiction of Identification
Employer No.)
incorporation
or organization)
2000 Greenville Hwy., P.O. Box 614, Kinston, NC 28502-0614
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number,
including area code: (919) 527-8011
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock $1.00 par value per share American Stock
Exchange
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
On March 18, 1996, the aggregate market value of the common
shares (based upon the closing prices of these shares on the
American Stock Exchange) of Hampton Industries, Inc. held by
non-affiliates was approximately $14,019,723.
There were 4,585,629 shares of Common Stock outstanding as
of March 18, 1996.
Documents Incorporated by Reference
Portions of the Registrant's Proxy Statement for the Annual
Meeting of Shareholders to be held on May 23, 1996 are
incorporated by reference into Part III.
PART I
ITEM 1. BUSINESS
(a) General Development of Business
Hampton Industries, Inc. and its subsidiaries (herein
referred to as "Hampton" or "Company") are engaged in the
business of manufacturing and selling wearing apparel.
Hampton, a North Carolina Corporation, is the successor of
several predecessor corporations, the first of which was
incorporated in 1925 in the State of New York under the name of
Hampton Shirt Co.
(b) Financial Information About Industry Segments
Hampton has been engaged in one line of business in excess
of five years; reference is made to the financial statements
included herein under ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA.
(c) Narrative Description of Business
Hampton's principal products consist of men's and boys'
shirts and men's and women's sleepwear, which are produced
domestically and in Central America. Sport and dress shirts,
sweaters, swimtrunks, activewear and outerwear, for both men and
boys, are imported from unaffiliated sources located primarily
in the Far East.
Hampton's products are principally sold at retail under
private labels. The Company also manufactures and sells apparel
under the "Nautica for Boy's", "McGregor's" and "Rawlings"
trademarks as licensees and under the "Le Tigre" and "Campus"
labels for men and boys and the "Kaynee" label for boys, which
are Company owned tradenames. Branded apparel is becoming a
more important part of the success of the Company's business.
Licensed trademarks include "Nautica for boys" for
sportswear, "McGregor" for mens' and boys' loungewear and
"Rawlings" for activewear.
Hampton designs its line of apparel. Patterns based on
such designs are made for use in cutting the fabric. At its
various manufacturing plants, the fabrics are cut, sewn, pressed
and packaged for sale to customers. The average domestic
production cycle is approximately five weeks from the time the
fabric is scheduled for cutting until the finished product is
received at the Company's distribution centers. The production
cycle for goods imported or manufactured under Caribbean Basin
Incentives from Central America is approximately ten weeks,
while the lead time for goods imported from the Far East can be
as long as six months. The design and production specifications
for imported products are provided to the manufacturers by
Hampton.
The Company's products are manufactured from various
combinations of manmade and natural fibers which are readily
available from a number of sources. Hampton has no long-term
contracts with any supplier.
Hampton's products are sold throughout the United States,
principally under either private or store labels, to
approximately 2,800 customers including most of the country's
leading national and regional retail chain and department
stores. Sales are made by a nationwide sales staff which
totaled 67 salesmen, including 42 field representatives at the
end of 1995. Sales offices are
located in New York, and at the Company's executive and
administrative headquarters in Kinston, North Carolina. As of
December 30, 1995, the Company had approximately 1,100
1
full-time associates. Hampton is not a party to any collective
bargaining agreements, has never
experienced a strike or work stoppage, and believes that it
maintains satisfactory relationships with its associates.
Hampton's two largest customers accounted for approximately
34% of consolidated sales volume in 1995. Wal-Mart Stores, Inc.
and J.C. Penney Co. accounted for approximately 18% and 16%
respectively, of sales volume. The two customers are large
multi-outlet retail chains. Both customers purchase a broad
range of Hampton's products through a variety of their
merchandising departments. There have been no contracts with
either customer for continued business.
<TABLE>
The following is a breakdown of sales by product categories:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Imported Men's Shirts
and Casual Wear 28% 32% 34%
Men's Shirts 22% 28% 31%
Boy's Shirts and Sportswear 19% 13% 13%
Men's Sleepwear 13% 11% 11%
Ladies' Sleepwear 9% 10% 8%
Activewear 7% 2% -
Girls' and Ladies' Blouses 2% 4% 3%
</TABLE>
"Licensed" apparel sales accounted for 14% of the
consolidated sales in 1995 and 3% in 1994.
For 1995 and 1994, respectively, the Company sourced its
products as follows: imports; 47% and 43%, Caribbean; 24% and
16%, Domestic; 29% and 41%. All foreign purchases are
contracted for in U.S. Dollars; therefore, there is no currency
risk.
As of March 4, 1996, Hampton's backlog of orders, believed
to be firm, was approximately $86,471,000 as compared to
$116,148,000 at the same date in 1995. All of the backlog of
orders is expected to be shipped during the current fiscal year.
This decline is in line with the Company's expectations.
The apparel industry is highly competitive as to style,
quality and price, and Hampton competes with many other
manufacturers as to each of its products.
<TABLE>
EXECUTIVE OFFICERS OF REGISTRANT
<CAPTION>
First year
Name and age Office elected
<S> <C> <C>
David Fuchs (71) Chairman and Chief 1975
Executive Officer
Steven Fuchs (36) President 1996
Paul Chused (52) Vice President 1996
Roger M. Eichel (47) Vice President 1993
and Secretary
Robert J. Stiehl, Jr. (60) Executive Vice
President -
Operations,
Chief Financial
Officer and
Assistant
Secretary 1995
Frank Simms (47) Vice President
of Finance 1995
Leo Tutak (56) Vice President -
Import Operations 1995
</TABLE>
2
Each of the above named was elected for one year or until
the election of a successor. The next election shall take place
immediately following the Annual Meeting of Shareholders to be
held on May 23, 1996. There is no arrangement or understanding
between any of the above pursuant to which they were elected as
Officers.
All of the Executive Officers above named, except Robert J.
Stiehl, Jr., Frank Simms and Leo Tutak, are related family
members. Steven Fuchs is the son of David Fuchs, and Roger
Eichel is David Fuchs' son-in-law. Paul Chused is the nephew
of David Fuchs.
Mr. David Fuchs has held his current executive position for
in excess of five years. Mr. Steven Fuchs was elected to his
present position in January, 1996. From 1993 to January, 1996,
Mr. Steven Fuchs was President of Hampton Shirt Co. Prior to
1993, he held various positions. Paul Chused was elected Vice
President in January, 1996. From May, 1994 to January, 1996, Mr.
Chused was President. From August, 1993 to May, 1994, he was
Senior Vice President and Assistant Secretary. For in excess of
five years prior thereto, he was Vice President - Operations of
the Company. Mr. Robert J. Stiehl, Jr. was elected to his
present position in January, 1995. For in excess of five years
prior thereto, he was Vice President - Finance. Mr. Frank Simms
was elected Vice President of Finance in May, 1995. Prior to
joining Hampton, he was Chief Financial Officer of Riverside
Manufacturing Co. for in excess of five years. Mr. Roger Eichel
was elected to his present position in May 1993. For in excess
of five years prior thereto, he was Secretary of the Company.
Mr. Tutak was elected to his present position in January 1995.
For in excess of five years prior thereto, he was Vice President
of one of the Company's subsidiaries.
David Fuchs, Steven Fuchs and Paul Chused are also
Directors of the Company.
ITEM 2. PROPERTIES
Hampton operates four manufacturing plants and three
distribution centers located in eastern North Carolina and
southern Virginia. The Company's sales and merchandising
personnel occupy a building located in New York City. Hampton's
principal executive and administrative offices are located in
North Carolina. All of these properties are owned by the
Company. Two of the manufacturing plants and the New York sales
office collateralize their related mortgage loans. The
executive and administrative offices located in North Carolina
are leased from a state governmental agency. The purchase of
this property by a governmental agency was financed through the
issuance of an Industrial Revenue Bond. Improvements to one
other property have also been financed through the issuance of
Industrial Revenue Bonds. All of the bonds are guaranteed by
the Company and are secured by the underlying assets.
The Company believes that its plants and facilities are in
good repair and adequate in respect to its foreseeable needs.
The machinery and equipment utilized in its facilities are
considered by management to be among the most modern and
efficient in the industry.
ITEM 3. LEGAL PROCEEDINGS
None significant
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
3
Part II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
(a) Principal Market
The principal market on which Hampton's Common Stock is
traded is the American Stock Exchange under the symbol HAI.
(b) Stock Price and Dividend Information
The table below presents the high and low market prices,
and dividend information for Hampton's Common Stock.
<TABLE>
QUARTER ENDED
<CAPTION>
1995 1994
4/1 7/1 9/30 12/30 3/26 6/25 9/24 12/31
<S> <C> <C> <C> <C> <C> <C> <C> <C>
High 7 3/8 6 7/8 6 1/4 5 7/8 6 5/8 6 3/8 6 3/8 6 1/2
Low 4 3/4 5 3/4 4 7/8 4 7/8 5 1/2 5 1/2 5 5/8 4 3/4
</TABLE>
The Company has not paid a cash dividend on its common stock
since 1973. The present long-term debt agreement includes
restrictive covenants which, among other things, prevent the
payment of dividends. The credit agreement signed during April
1996 includes the same basic covenants.
(c) Approximate Number of Holders of Common Stock
The number of holders of record of Hampton's Common Stock
as of December 30, 1995, was approximately 378, including, as a
single holder of record, brokerage firms having more than one
stockholder account.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
(In thousands except per common share amounts)
<CAPTION>
FISCAL YEAR
1995 1994 1993 1992 1991
(53 WEEKS)
<S> <C> <C> <C> <C> <C>
YEAR ENDED:
Net Sales $184,593 $172,024 $196,438 $203,736 $162,160
Net (loss) earnings (2,164) 1,002 (2,433) 1,438 (602)
(Loss) earnings per
common share (.47) .22 (.53) 0.31 (.13)
AT YEAR END
Total assets $ 94,271 $ 90,616 $ 90,168 $118,942 $ 93,007
Long-term debt 5,305 17,002 20,722 20,993 20,220
Working capital 37,501 49,206 48,642 49,501 49,102
Stockholders' equity 50,111 52,275 51,273 53,707 52,271
</TABLE>
The Company has not paid cash dividends on its common stock since 1973.
4
The Company uses the LIFO method of costing principally all
of its inventories to more fairly present the results of
operations by matching current costs with current revenues. The
LIFO method had the effect of increasing net earnings by
$153,800 ($.03 per share) in 1995, $64,400 ($.01 per share) in
1994, $360,900 ($.08 per share) in 1993 and $749,900 ($.16 per
share) in 1992. The LIFO method reduced net earnings by $11,500
(no effect on per share earnings) in 1991. The income realized
as a result of inventory liquidation was not significant in
1995, $510,400 ($.11 per share) in 1994, $78,100 ($.02 per
share) in 1993, and $576,000 ($.13 per share) in 1991.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analyses of the 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.
Results of Operations
<TABLE>
The following table summarizes the operating data for the
periods indicated:
<CAPTION>
YEAR ENDED
December 30, December 31, December 25,
1995 1994 1993
(53 WEEKS)
<S> <C> <C> <C>
Net sales 100.0% 100.0% 100.0%
Cost of products 83.1 81.4 84.5
Selling, general and
administrative 16.0 16.3 15.7
Provision for
restructuring costs .7 1.3 0.3
Customs duty refunds - (1.1) -
Equity in loss of
unconsolidated
subsidiaries - 0.1 -
Gain on disposal of assets (0.4) (0.2) -
Operating income (loss) 0.6 2.2 (0.5)
Interest 2.2 1.4 1.3
(Loss) earnings before
income taxes (1.6) 0.8 (1.8)
Net (loss) earnings (1.2)% 0.6% (1.2)%
</TABLE>
Fiscal 1995 Versus Fiscal 1994
Net sales for 1995 increased by approximately 7%. A
decline of 4% in units shipped was offset by an increase of 12%
in average selling price. The increase in average selling price
is primarily due to the greater influence of the "branded"
product sales.
Profit margin declined by $871,000 for 1995. As a percent
of sales this represented a decline of 1.7%. Two specific
customer programs were no longer profitable and have been
discontinued. These two programs generated approximately
$16,000,000 of sales in 1995 and will not be replaced in 1996.
In addition, certain sales divisions were discontinued that
resulted in the liquidation and mark down of certain
inventories.
5
Selling, general and administrative expenses declined to
16.0% of sales for 1995 from 16.3% in 1994.
On July 18, 1995, the Company announced the closings of two
manufacturing facilities which complete the Company's program of
reducing excess domestic production capacity begun three years
ago. The closing costs related thereto are included in the
statement of operations as Provision for restructuring costs.
The restructuring reduced the work force by approximately 400
associates or 25% of total employees. Plant closing costs
totaled approximately $1,211,000 representing severance pay,
payroll taxes and a noncash charge of $610,000 relating to the
write-down of the manufacturing equipment to estimated
realizable value.
Interest expense increased by $1,638,000 from 1994.
Approximately two thirds of this increase was due to a higher
level of borrowing with the remainder due to higher effective
interest rates. The higher level of borrowing was the result of
certain delays in order delivery dates from our customers which
increased inventory levels during the course of the year, as
well as the higher level of inventory required to support the
growing sales volume of the "Branded" products.
The effective tax benefit rate decreased to 24.9% in 1995
from the effective tax rate expense of 30.6% in 1994 primarily
as a result of the loss of future state tax benefits that were
generated in the current year.
Fiscal 1994 Versus Fiscal 1993
Net sales for 1994 decreased by approximately 12%. The
sales decrease resulted from a 15% decrease in total units
shipped, combined with a 3% increase in average selling prices.
The selling prices in 1993 were lower than normal because of the
markdowns taken to reduce inventory levels of excess or
discontinued products through promotional programs. The
increase in profit margins is a result of more advantageous
sourcing and the elimination of promotional programs which
normally carry lower profit margins.
During the year, the Company closed a manufacturing facility.
The restructuring reduced the
workforce by approximately 200 associates or 10% of total
employment. Plant closing costs totaled approximately
$2,300,000 representing severance pay, payroll taxes and a
noncash charge of $1,434,000 relating to the writedown of the
facility and manufacturing equipment to realizable sales value.
The closing reduced the Company's excess domestic production
capacity.
The Company closed two facilities in 1993 incurring a
charge of $668,000 covering severance pay and payroll taxes.
Because of increased competitiveness and changing market
conditions, management will continue to assess the viability of
its existing domestic operations.
Selling, general and administrative expenses increased as a
percent of sales to 16.1% in 1994 as compared to 15.7% of sales
in 1993 primarily because of the decrease in sales volume.
Selling, general and administrative expenses actually decreased
by 10% as a result of the realignment or discontinuance of
certain sales divisions and the cost cutting programs instituted
in the latter part of 1993.
Interest expense decreased by $110,000 or 4% from 1993
because of lower borrowing requirements. The average cost of
borrowing increased in 1994.
The effective tax rate decreased to 30.6% from 32.5%
primarily as a result of the utilization of state tax benefits
attributable to net operating loss carry-forwards that were
written-off in prior years.
6
Liquidity and Capital Resources
On December 30, 1995, the Company did not meet certain financial
covenants in its existing agreement (the "Agreement"). The Agreement,
last amended on March 1, 1996, provides for a line of credit ranging
from $60,000,000 to $90,000,000 based on seasonal requirements.
Borrowings bear interest at the London Interbank Offered Rate or the
Prime Rate, at the option of the Company. The Agreement expires on
October 1, 1996.
The Agreement contains financial covenants, including but not
limited to, financial covenants relating to borrowings, working capital,
tangible net worth, cash flow and interest coverage. In addition, the
Agreement restricts fixed asset purchases and does not allow for the
payment of cash dividends. There is no requirement to maintain
compensating balances under the Agreement, however, the Company is
required to pay a fee of 1/2% of 1% per annum on the total commitment.
All of the bank indebtedness outstanding at December 30, 1995 has
been classified as current.
On April 12, 1996, the Company received a commitment (the "New
Facility" ) from a bank to refinance the bank indebtedness outstanding
under its existing Agreement.
The commitment is subject to a number of closing conditions.
Management believes that such conditions will be satisfactorily
met, however, there can be no assurance that the New Facility
will close. The New Facility will provide for a maximum line of
credit of $100,000,000 which will include both direct loans and letters
of credit. Availability under the New Facility will be based on a formula
of eligible accounts receivable and eligible inventory and will provide for
a seasonal overadvance of $23,000,000 within the $100,000,000 limit.
Direct borrowings will bear interest at the London Interbank
Offered Rate or the Prime Rate, at the option of the Company plus the
applicable Margin (as defined in the New Facility). Borrowings
are collateralized by accounts receivable, inventory, and general
intangibles of the Company and its subsidiaries. The
New Facility, if closed, will expire in April 1999.
The New Facility will contain financial covenants, including but
not limited to, financial covenants related
to tangible net worth and interest coverage, and will restrict fixed asset
purchases and does not allow for the payment of cash dividends.
There will be no requirement to maintain compensating balances,
however, the Company will be required to pay a fee of 1/4% of 1% per
annum on the unused portion of the total facility plus certain
other administrative costs.
Upon closing of the New Facility, approximately $7,750,000 of
current bank debt will be reclassified to long-term debt. As of
December 31, 1994, $10,685,000 of borrowings under the Agreement
were classified as long- term debt. The working capital ratio
as of the end of 1995 was 2.1:1 as compared to 4.1:1 in 1994.
During 1995, cash used in operations totaled approximately
$9,600,000 as compared to approximately $5,300,000 being
generated in 1994. The substantial use of funds for 1995
financed increased inventory levels to support the growing sales
of the Company's Branded apparel lines.
Additions to plant, property and equipment represented
normal replacement and upgrading of equipment of approximately
$600,000 in 1995 and $1,100,000 in 1994. Capital expenditures
for 1996 are estimated to approximate the same level as 1994,
and will be financed from operations.
7
In 1993, the Company entered into two joint ventures in
Central America for the purpose of producing apparel under the
Caribbean Basin Incentive program or as imports. The Company
owns 50% of each joint venture. The Company's combined
investments total $114,000. In addition, advances of $27,000 in
1995 and $1,689,000 in 1994 were made for equipment purchases
and working capital needs. Additional loans, if any, are not
expected to be significant in 1996.
The Company has available lines of credit as of January 1,
1996 of $7,400,000 under the Agreement. The credit that will be
available under the New Facility, together with the cash expected
to be provided from
operations, is adequate to meet the Company's short-term
financing needs.
8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Hampton Industries, Inc.
Kinston, North Carolina
We have audited the accompanying consolidated balance sheets of
Hampton Industries, Inc. and subsidiaries as of December 30,
1995 and December 31, 1994, and the related statements of
operations, shareholders' equity and cash flows for the years
ended December 30, 1995, December 31, 1994 and December 23,
1993 and the supporting schedules listed in the index at Item
14(a)(2). These financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these financial statements an financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of Hampton Industries,
Inc. and subsidiaries as of December 30, 1995 and December 31,
1994 and the results of their operations and their cash flows
for the years ended December 30, 1995, December 31, 1994 and
December 23, 1993, in conformity with generally accepted
accounting principles. Also, in our opinion, such financial
statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present
fairly in all material respects the information set forth
therein.
Deloitte & Touche LLP
April 12, 1996 as to Note E
New York, New York
9
<TABLE>
HAMPTON INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash $ 351,982 $ 1,132,205
Accounts receivable, less
reserve for doubtful
accounts and allowances
of $1,200,000 in 1995
and $1,238,000 in 1994 22,283,271 22,260,087
Inventories (Note B) 46,314,931 38,972,245
Deferred income tax
benefits (Note D) 1,106,963 1,639,641
Other current assets 1,290,823 851,156
---------- ----------
Total current assets 71,347,970 64,855,334
Property, plant and equipment
- net (Notes C and E) 19,601,188 22,893,125
Assets held for disposal
- net (Note J) 937,916 521,759
Investments in and advances
to unconsolidated affiliates 1,675,853 1,564,167
Other assets 707,998 781,500
------------ ------------
$ 94,270,925 $ 90,615,885
============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Notes payable - banks and
current maturities of
long-term debt (Note E) $ 20,612,673 $ 1,064,657
Accounts payable 10,896,560 10,179,757
Accrued liabilities (Note L) 2,289,907 3,289,648
Income taxes (Note D) 48,183 1,115,170
------------ ------------
Total current liabilities 33,847,323 15,649,232
Deferred income tax
liabilities (Note D) 948,662 1,497,683
Long-term debt (Note E) 5,304,540 17,002,214
Retirement plan
obligations (Note G) 4,059,287 4,191,790
Commitments and
contengencies (Note E) - -
Stockholders' equity
(Notes E and F)
Common stock, $1 par value
- authorized 10,000,000
shares; issued
5,191,454 shares 5,191,454 5,191,454
Additional paid-in capital 34,018,908 34,018,908
Retained earnings 15,778,095 17,941,948
------------ ------------
54,988,457 57,152,310
Less cost of common stock
held in treasury-
605,825 shares 4,877,344 4,877,344
------------ ------------
Total stockholders' equity 50,111,113 52,274,966
------------ ------------
$ 94,270,925 $ 90,615,885
============ ============
</TABLE>
See notes to consolidated
financial statements.
10
<TABLE>
HAMPTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS
OF OPERATIONS
<CAPTION>
YEAR ENDED
December 30, December 31, December 25,
1995 1994 1993
(53 WEEKS)
<S> <C> <C> <C>
Net sales $ 184,592,840 $ 172,024,161 $ 196,438,276
Costs and expenses:
Cost of products sold (Note B) 153,418,347 139,979,052 166,028,227
Selling, general and
administrative 29,588,365 28,058,330 30,851,755
Provision for restructuring
costs (Note J) 1,211,077 2,278,480 668,100
Equity in (earnings) loss of
unconsolidated affiliates (116,618) 186,412 38,302
Gain on disposal of assets (683,102) (384,832) (94,831)
Customs duty refunds (Note K) (27,925) (1,982,791) -
------------ ------------ ------------
Operating income (loss) 1,202,696 3,889,510 (1,053,277)
Interest 4,084,949 2,446,486 2,552,014
------------ ------------ ------------
(Loss) Earnings before income
tax provision (benefit) (2,882,253) 1,443,024 (3,605,291)
Income tax provision
(benefit) (Note D):
State and local 288,800 (125,700) 369,900
Federal (1,007,200) 567,000 (1,542,600)
------------ ------------ ------------
(718,400) 441,300 (1,172,700)
------------ ------------ ------------
Net (loss) earnings $ (2,163,853) $ 1,001,724 $ (2,432,591)
============ ============ ============
(Loss) Earnings per common share $(.47) $.22 $(.53)
==== ==== ====
Average common shares outstanding 4,585,629 4,585,629 4,585,629
======== ======== ========
</TABLE>
See notes to consolidated
financial statements.
11
<TABLE>
HAMPTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS
OF STOCKHOLDERS' EQUITY
<CAPTION>
Common Stock Additional
paid-in
Shares Amount capital
<S> <C> <C> <C>
Balance, December 26, 1992 4,719,662 $ 4,719,662 $ 30,775,338
Net loss - - -
10% Common Stock dividend 471,792 471,792 3,243,570
--------- --------- ----------
Balance, December 25, 1993 5,191,454 5,191,454 34,018,908
Net earnings - - -
--------- --------- ----------
Balance, December 31, 1994 5,191,454 5,191,454 34,018,908
Net loss - - -
--------- --------- ----------
Balance, December 30, 1995 5,191,454 $ 5,191,454 $ 34,018,908
========= ========= ==========
<CAPTION>
Retained Treasury Stock at cost
earnings Shares Amount
<S> <C> <C> <C>
Balance, December 26, 1992 $23,089,506 550,750 $4,877,344
Net loss (2,432,591) - -
10% Common Stock dividend (3,716,691) 55,075 -
------------ ------- ----------
Balance, December 25, 1993 16,940,224 605,825 4,877,344
Net earnings 1,001,724 - -
------------ ------- ----------
Balance, December 31, 1994 17,941,948 605,825 4,877,344
Net loss (2,163,853) - -
------------ ------- ----------
Balance, December 30, 1995 $15,778,095 605,825 $4,877,344
============ ======= ==========
</TABLE>
See notes to consolidated
financial statements.
12
<TABLE>
HAMPTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS
OF CASH FLOWS
<CAPTION>
YEAR ENDED
December 30, December 31, December 25,
1995 1994 1993
(53 WEEKS)
------------ ------------ -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net (loss) earnings $ (2,163,853) $ 1,001,724 $ (2,432,591)
Adjustments to reconcile net
(loss) earnings to net
cash (used in) provided by
operating activities
Amortization 108,293 59,982 39,754
Depreciation 2,855,091 3,143,827 3,294,183
Deferred income taxes (16,343) (600,658) (729,000)
LIFO charge (204,800) (92,747) (534,876)
Reserve for doubtful
accounts and allowances 1,210,678 249,428 555,848
Retirement plan obligations (132,503) 650,674 1,304,602
Gain on sale of
operating assets (683,102) (779,581) (94,831)
Equity in (earnings) loss
of unconsolidated affiliates (116,618) 186,412 38,302
Provision for restructuring costs 45,083 1,665,170 20,194
Changes in current assets
and current liabilities
Accounts receivable (1,233,862) 1,107,534 5,683,282
Inventories on a FIFO basis (7,137,886) (3,830,152) 20,820,214
Other current assets (439,667) 94,105 468,618
Accounts payable 716,803 1,072,197 (2,802,241)
Accrued liabilities (1,334,993) 516,889 (391,176)
Income taxes (1,066,987) 827,082 52,796
NET CASH (USED IN)
PROVIDED BY ------------ ------------ -----------
OPERATING ACTIVITIES (9,594,666) 5,271,886 25,293,078
------------ ------------ -----------
INVESTING ACTIVITIES:
Additions to property,
plant and equipment (619,524) (1,077,567) (1,773,866)
Proceeds received from sale of
property, plant and equipment 1,645,124 1,658,357 157,085
Increase in investments
in and advances to
unconsolidated subsidiaries (26,708) (1,445,292) (343,589)
(Increase) Decrease
in other assets (34,791) (332,708) 21,197
NET CASH PROVIDED BY (USED IN) ------------ ------------ ------------
INVESTING ACTIVITIES 964,101 (1,197,210) (1,939,173)
------------ ------------ ------------
FINANCING ACTIVITIES:
Additions to debt - Banks 48,295,000 24,675,000 14,305,000
- Other - 3,900,000 -
Payments on debt - Banks (39,380,000) (31,230,000) (37,215,000)
-Other (1,064,658) (981,767) (843,879)
Cash paid in lieu of
fractional shares - - (1,329)
NET CASH PROVIDED BY (USED IN) ------------ ------------ ------------
FINANCING ACTIVITIES 7,850,342 (3,636,767) (23,755,208)
------------ ------------ ------------
(DECREASE) INCREASE IN CASH (780,223) 437,909 (401,303)
CASH AT BEGINNING OF PERIOD 1,132,205 694,296 1,095,599
------------ ------------ ------------
CASH AT END OF PERIOD $ 351,982 $ 1,132,205 $ 694,296
============ ============ ============
Cash paid during the period
- Interest $ 3,901,000 $ 2,431,000 $ 2,441,000
============ ============ ============
- Income Taxes $ 1,544,000 $ 177,000 $ 293,000
============ ============ ============
</TABLE>
See notes to consolidated
financial statements.
13
HAMPTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994
AND DECEMBER 25, 1993
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
The Company is engaged in the business of manufacturing
and selling wearing apparel. The principal products consist of
men's and boys' shirts and men's and women's sleepwear, which are
produced domestically and in Central America. Sport and dress
shirts, sweaters, swimtrunks, activewear and outerwear, for
both men and boys, are imported from unaffiliated sources located
primarily in the Far East.
Principles of Consolidation
The consolidated financial statements include the accounts
of the Company and its subsidiaries, all of which are
wholly-owned. All significant intercompany profits,
transactions and balances have been eliminated.
Affiliated companies which are 50 percent owned but not
controlled are accounted for by the equity method.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Inventories
Inventories are carried at the lower of cost or market
value. As described in Note B, the cost of substantially all
inventory is determined by the last-in, first-out (LIFO) method.
Property, Plant and Equipment
Expenditures for buildings, equipment and improvements are
capitalized and depreciated or amortized on a straight-line
basis over their estimated useful lives. Estimated useful lives
of assets are based upon the following ranges: land
improvements, 30 years, buildings and leasehold improvements, 30
to 35 years, machinery and equipment, 3 to 15 years and
furniture and fixtures, 5 to 10 years.
Long-Lived Assets
In March 1995, The Financial Accounting Standards Board
issued Statement Number 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Dsiposed Of."
This statement is effective for fiscal years beginning after
December 15, 1995. The Company does not expect the effect on
its consolidated financial condition from the adoption of this
statement to be material.
Revenue Recognition
Sales revenue is recognized upon shipment of product,
which is when title to the product passes to the customer.
Income Taxes
Deferred income taxes are provided to reflect the tax
effect of temporary differences between financial statement
income and taxable income in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (SFAS 109).
14
Earnings (Loss) Per Common Share
Earnings (loss) per common share is computed by dividing
net earnings (loss) by the weighted average number of common
shares outstanding during each period, as adjusted retroactively
for the 10% stock dividend issued in 1993.
Postretirement Benefits
During 1993, the Company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits other than Pensions" (SFAS 106) which
established standards of financial accounting and reporting for
the estimated cost of postretirement benefits other than
pensions as associates render the services necessary to earn
their postretirement benefits. Adoption of SFAS No. 106 did not
have a significant impact on the Company's financial position or
results of operations.
Stock Options and Warrants
In October 1995, the Financial Accounting Standards Board
issued SFAS No. 123, "Accounting for Stock-Based Compensation".
The standard encourages, but does not require, companies to
recognize compensation expense of grants for stock, stock
options and other equity instruments to employees based on fair
value accounting rules. The Company has not yet determined if
it will adopt the accounting provisions of SFAS No. 123;
however, the Company does not believe that adoption of SFAS No.
123 will have a significant impace on the Compny's financial
positon or results of operations.
Fair Value of Financial Instruments
During October 1994, the Financial Accounting Standards
Board issued SFAS 107, "Disclosure about Fair Value of Financial
Instruments." This statement requires the disclosure of
estimated fair values for all financial instruments for which it
is practicable to estimate fair value.
For financial instruments including cash, accounts
receivable and payable, accruals, notes payable - banks and
current maturities of long-term debt, it was assumed that the
carrying amount approximated fair value because of their short
maturity.
The carrying amount of the non-current portion of
mortgage notes due through the year 2000, all of which bear
interest at floating rates, are also assumed to approximate
their fair values.
Investments in and Advances to Unconsolidated Affiliates
The investment in unconsolidated affiliates represents
investments in two Central American companies and are carried on
the equity basis, which approximates the Company's equity in the
unconsolidated affiliates underlying net book values. Advances
receivable from the unconsolidated affiliates total $1,945,260
at December 30, 1995 and $1,918,552 at December 31, 1994.
<TABLE>
B. INVENTORIES
<CAPTION>
1995 1994
<S> <C> <C>
Finished goods $37,092,349 $24,757,375
Work-in-process 4,041,951 7,148,319
Piece goods 4,118,109 5,823,719
Supplies and other 1,062,522 1,242,832
46,314,931 38,972,245
</TABLE>
15
Principally all inventories are valued at the lower of
last-in, first-out (LIFO) cost or market. Information related
to the first-in, first-out (FIFO) method may be useful in
comparing operating results to those of companies not on LIFO.
On a supplemental basis, if inventories had been valued at the
lower of FIFO cost or market, inventories at December 30, 1995
and December 31, 1994 would have been approximately $51,400,000
and $44,261,000, respectively. The LIFO valuation method had
the effect of increasing net earnings by $153,800 ($.03 per
share) in 1995, $64,400 ($.01 per share) in 1994 and $360,900
($.08 per share) in 1993. The income realized as a result of
inventory liquidation was not significant in 1995, $510,400
($.11 per share) in 1994 and $78,100 ($.02 per share) in 1993.
Included in finished goods are inventory in transit of
$7,139,300 in 1995 and $6,368,800 in 1994.
<TABLE>
C. PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
1995 1994
<S> <C> <C>
Land and land improvements $ 2,591,277 $ 2,667,594
Buildings and leasehold improvements 21,341,229 22,464,729
Machinery and equipment 16,004,034 20,126,580
Furniture and fixtures 1,405,014 1,388,373
41,341,554 46,647,276
Less accumulated depreciation
and amortization 21,740,366 23,754,151
19,601,188 22,893,125
</TABLE>
D. INCOME TAXES
<TABLE>
Components of income tax (benefit) provision reflected in
the consolidated statements of operations are as follows:
<CAPTION>
1995 1994 1993
Current:
<S> <C> <C> <C>
Federal $(874,400) $ 947,000 $ (624,400)
State and local 172,300 95,000 180,700
(702,100) 1,042,000 (443,700)
Deferred:
Federal (132,800) (380,000) (918,200)
State and local 116,500 (220,700) 189,200
(16,300) (600,700) (729,000)
(718,400) 441,300 (1,172,700)
</TABLE>
<TABLE>
The following is a reconciliation of the statutory federal
income tax rate applied to pre-tax accounting (loss) earnings,
with the income tax (benefit) provision in the consolidated
statements of operations:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Income tax (benefit) expense at
the statutory rate (34%) $ (980,000) $490,600 $ (1,225,800)
Increase (Decrease) resulting from:
State and local income taxes,
net of federal income tax 190,600 (73,600) 244,000
Other, net 71,000 24,300 (190,900)
$(718,400) $441,300 $ (1,172,700)
</TABLE>
16
<TABLE>
The components of deferred taxes included in the balance
sheet as of December 30, 1995 and December 31, 1994 are as
follows:
<CAPTION>
1995 1994
<S> <C> <C>
Deferred income tax assets:
Net operating loss carryforwards $ 927,964 $ 1,097,800
Restructuring costs 281,914 779,372
Allowance for doubtful accounts 203,425 369,373
Inventory 456,906 372,396
Charitable contribution carryforwards 84,176 -
Other (1,154) (7,100)
1,953,231 2,611,841
Valuation allowance (846,268) (972,200)
1,106,963 1,639,641
Deferred income tax liabilities:
Depreciation $ 3,046,797 $ 3,358,326
Deferred compensation (1,560,637) (1,684,573)
Alternative minimum tax credit (226,648) -
Trademarks (161,067) (127,377)
Equity in profit (loss) of
joint venture (98,474) -
Jobs credit carryforwards (52,556) -
Other 1,247 (48,693)
948,662 1,497,683
</TABLE>
Net operating loss carryforwards for state income tax
purposes expire as follows: $3,945,900 in 1996, $2,589,400 in
1997, $3,559,000 in 1998, $1,091,400 in 1999, $3,195,300 in
2000, $442,200 in 2007, $667,300 in 2008 and $774,800 in 2010.
For federal income tax purposes, a jobs credit carryforward of
$52,600 expires in 2010.
17
<TABLE>
E. LONG-TERM DEBT
<CAPTION>
1995 1994
<S> <C> <C>
Revolving credit facility (i) $19,600,000 $10,685,000
8 1/4% mortgage notes, due
monthly to 1996 (ii) 395,993 836,727
Capitalized lease obligations 2,250,011 2,583,343
Promissory note, due
quarterly to 1997 31,209 61,801
Mortgage note, due quarterly
to 2000 3,640,000 3,900,000
25,917,213 18,066,871
Less amount due in one year 20,612,673 1,064,657
5,304,540 17,002,214
</TABLE>
<TABLE>
Annual maturities of bank and other long-term debt,
including capitalized leases, are as follows:
<S> <C>
1996 $20,612,673
1997 592,986
1998 596,538
1999 1,510,016
2000 2,600,000
25,917,213
</TABLE>
(i) On December 30, 1995, the Company did not meet certain
financial covenants in its existing agreement (the "Agreement").
The Agreement, last amended on March 1, 1996, provides for a line of
credit ranging from $60,000,000 to $90,000,000 based on seasonal require-
ments. Borrowings bear interest at the London Interbank Offered Rate or
the Prime Rate, at the option of the Company. Indebtedness under the
Agreement
is collateralized by all of the accounts receivable and inventory of the
Company. The Agreement expires on October 1, 1996.
The Agreement contains financial covenants, including but not limited
to, financial covenants related to borrowings, working capital, tangible
net worth, cash flow and interest coverage. In addition, the Agreement
restricts fixed asset purchases and does not allow for the payment of
cash dividends. There is no requirement to maintain compensating balances
under the Agreement, however, the Company is required to pay a fee of
1/2% of 1% per annum on the total commitment.
All of the indebtedness outstanding at December 30, 1995 has been
classified as current.
On April 12, 1996, the Company received a commitment (the "New
Facility") from
a bank to refinance the bank indebtedness under its existing Agreement.
The Commitment is subject to a number of closing conditions. Management
believes that such conditions will be satisfactorily met, however, there
can be no assurance that the New Facility will close.
The New Facility will replace the existing facility
which was executed in December 1994. The New
18
Facility will
provide for a maximum line of credit of $100,000,000 which will include
both direct loans and letters of credit. Availability under the New
Facility is based on a formula of eligible accounts receivables and eligible
inventory and will provide for a seasonal overadvance of up to $23,000,000
within the $100,000,000 maximum line of credit. Direct borrowings will
bear interest based on the
London Interbank Offered Rate or the Prime Rate, at the option
of the Company plus the applicable Margin (as defined in the New Facility).
Borrowings are collateralized by the
accounts receivable, inventory and general intangibles of the Company
and its subsidiaries. The New Facility, if closed, will expire April 1999.
The New Facility contains financial covenants, including but not limited
to, financial convenants, including but not limited to, tangible net worth
and interest coverage and will restrict fixed asset
purchases and does not allow for the payment of cash dividends.
There will be no requirement to maintain compensating balances under
the Agreement, however, the Company is required to pay a fee of
1/4% of 1% per annum on the unused portion of the total facility
plus certain other administrative costs.
Upon the closing of the New Facility, approximately $7,750,000
of current bank debt will be reclassified to long-term debt.
(ii) The 8 1/4% mortgage notes are payable primarily to
principal stockholders of the Company and members of their
families.
(iii) The mortgage notes and the capitalized lease obligations
are collateralized by building and property having a carrying
value at December 30, 1995 of $10,377,000. The effective
interest rate on the aggregate amount of capitalized leases at
December 30, 1995 was 5.34%. The effective interest rate on the
mortgage note due in 2000 at December 30, 1995 was 7.98%.
At December 30, 1995, letters of credit amounting to
approximately $29,042,000 relating to approximately $31,261,000
of purchase commitments issued to foreign suppliers were
outstanding.
F. STOCKHOLDERS' EQUITY
Preferred Stock
The Company has authorized 14,140.5 shares of $7 cumulative
First Preferred Stock, par value of $100, none of which is
issued.
In addition, the Company has authorized 1,000,000 shares of
Second Preferred Stock, par value of $1, none of which has been
issued. The Board of Directors is authorized to fix
designations, relative rights, preferences and limitations on
the stock at the time of issuance.
Common Stock
The Board of Directors declared a 10% stock dividend in
1993. Earnings (loss) per share have been restated to reflect
the stock dividends declared.
In 1992, the stockholders approved a non-qualified stock
option plan (the "Plan"). The Plan authorizes a stock option
committee to determine and designate those associates and
directors who are to be granted stock options. Stock options
allow for the purchase of common stock at prices determined by
the stock option committee on the date of the grant. Options
under the Plan become exercisable in increments of 20% annually
and expire ten years from the date of the grant. Stock to be
offered under the Plan consists of shares, whether authorized
but unissued or reacquired by the Company, of the common stock
of the Company. The total amount of common stock issuable upon
the exercise of all stock options under the Plan may not exceed
363,000 shares. No stock options had been granted under the
Plan as of December 30, 1995.
G. PROFIT SHARING PLANS
Through December 31, 1995, the Company maintained two
qualified profit sharing plans. The two plans were essentially
identical. One covered the hourly associates of the Company,
and the other covered the salaried associates. These plans
exclude all associates who were classified as "highly
compensated" under the provision of the Internal Revenue Code.
The contributions to the Plans were discretionary, and in no
event will any portion of the contributions paid revert to the
Company. Company contributions to the Plans were $248,000,
$446,000 and $356,000 in 1995, 1994 and 1993 respectively.
On December 31, 1995 the qualified plan for salaried
associates was merged into the qualified hourly associates plan,
which plan was amended to, among other things, include "highly
compensated" associates. The Company will make a matching
contribution of 40% of the deferral amount that the associates
elect to make (as limited by the Internal Revenue Service Code).
The Company has the option of changing the matching
contribution each year. The Company continues to have the right
to amend, modify or terminate the Plan.
The Company also maintains a Supplemental Retirement Plan
for Key Employees (the Plan) to permit certain key associates to
defer receipt of current compensation in order to provide
retirement and death benefits on behalf of such associates.
Company profit sharing credits are determined at the discretion
of the Board of Directors. Amounts of profit sharing credits
are vested in the same
manner as vesting occurs under the Company's Qualified Profit
Sharing and Retirement Savings Plans. An annual return equal to
the Moody's AAA Corporate bond rate is added to each participant
deferred compensation account balance and employer profit
sharing credit account balance. The Company may provide
supplemental profit sharing credits to one or more active
participants in the Plan, the amount of which shall be
determined by the Board of Directors in its sole and absolute
discretion.
As of December 30, 1995, there were 43 participants in the
Plan, including all of the executive officers of the Company.
None of these associates were able to participate in the
Company's qualified profit sharing plans prior to January 1,
1996. The Company credited $137,000 and $224,000 of profit
sharing credits and $285,000 and $282,000 of interest to the
participants accounts, in 1995 and 1994, respectively. In 1993,
the Company credited $332,000 of profit sharing credits, a
discretionary supplemental credit of $320,000, which is included
in selling, general and administrative expenses, to one
associate and $171,000 of interest to the participant accounts.
The Plan is not intended to be a qualified plan under the
provisions of the Internal Revenue Code. The Plan is intended
to be unfunded and, therefore, all compensation deferred under
the Plan is held by the Company and commingled with its general
assets.
As of January 1, 1996, the participants in the Plan are
no longer able to make salaried deferrals. Participant
deferrals are fully vested.
20
H. SELECTED QUARTERLY DATA (UNAUDITED)
<TABLE>
The following table sets forth selected quarterly financial
information for the fiscal years 1995
and 1994 (in thousands of dollars, except per share amounts):
<CAPTION>
NET GROSS NET EARNINGS (LOSS)
SALES MARGIN AMOUNT PER SHARE
QUARTER ENDED
<S> <C> <C> <C> <C>
4-1-95 $ 40,082 $ 7,908 $ (186) $(.04)
7-1-95 25,055 3,779 (3,496) (.76)
9-30-95 64,095 12,334 1,751 .38
12-30-95 55,361 7,153 (233) (.05)
YEAR $184,593 $31,174 $(2,164) $(.47)
</TABLE>
<TABLE>
NET GROSS NET EARNINGS (LOSS)
SALES MARGIN AMOUNT PER SHARE
QUARTER ENDED
<S> <C> <C> <C> <C>
3-26-94 $ 35,431 $ 6,711 $ (1,915) $(.42)
6-25-94 28,346 4,230 (1,423) (.31)
9-25-94 50,776 9,880 1,883 .41
12-31-94 57,471 11,224 2,457(i) .54
YEAR 172,024 32,045 1,002 .22
</TABLE>
(i) Includes $1,099,225 of Customs duty refunds. (See note K)
I. CONCENTRATION OF CREDIT RISK
Trade receivables potentially subject the Company to credit
risk. The Company extends credit to its customers based upon an
evaluation of the customer's financial condition and credit
history and generally does not require collateral. The Company
has historically incurred minimal credit losses.
The Company's broad range of customers includes many large
multi-outlet retail chains, three of which account for a
significant percentage of sales volume, as follows:
<TABLE>
1995 1994 1993
<S> <C> <C> <C>
Wal-Mart Stores, Inc. 18% 17% 15%
J.C. Penney Co., Inc. 16% 18% 15%
Sears Roebuck & Company 4% 4% 7%
</TABLE>
21
J. RESTRUCTURING COSTS
On July 18, 1995, the Company announced the closing of two
manufacturing facilities which completed the Company's program
of reducing excess domestic production capacity begun three
years ago. The closing costs related thereto are included in
the statement of operations as provision for restructuring
costs. The restructuring reduced the work force by
approximately 400 associates or 25% of total employees. Plant
closing costs totaled approximately $1,211,000 representing
severance pay, payroll taxes and a noncash charge of $610,000
related to the write-down of the manufacturing equipment to
estimated realizable value.
During 1994, the Company closed a manufacturing facility.
The restructuring reduced the workforce by approximately 200
associates or 10% of total employment. Plant closing costs,
totaled approximately $2,300,000 representing severance pay,
payroll taxes, and a noncash charge of $1,434,000 relating to
the writedown of the facility and manufacturing equipment to
realizable sales value.
The Company closed two facilities in 1993 incurring a
charge of $668,000 covering severance pay and payroll taxes.
The closings reduced the Company's excess domestic
production capacity.
I. CUSTOMS DUTY REFUNDS
In 1994, the Company received funds of countervailing
customs duties assessed by the U. S. Customs in 1990 and 1991 on
certain imported products which were determined not to be
subject to anti-dumping provisions. Additional refunds, if any,
are not expected to be significant.
<TABLE>
L. ACCRUED LIABILITIES
<CAPTION>
Accrued liabilities consist of the following:
1995 1994
<S> <C> <C>
Accrued payroll $ 771,955 $ 834,918
Accrued restructuring 587,000 251,748
Accrued expenses 556,172 1,937,259
Other 374,780 265,723
$ 2,289,907 $ 3,289,648
</TABLE>
20
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
22
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
See "Election of Directors" on page 2 of the Proxy
Statement for Registrant's 1996 Annual Meeting of Shareholders,
which information is incorporated herein by reference. Also,
see information contained under the caption "Executive Officers
of Registrant" on page 2 hereof.
ITEM 11. EXECUTIVE COMPENSATION
See "Compensation of Officers and Directors" on page 5 of
the Registrant's 1996 Proxy Statement, which information is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
See "Voting Securities" on page 1 of the Registrant's 1996
Proxy Statement, which information is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Certain Transactions with Management" on page 10 of
the Registrant's 1996 Proxy Statement, which information is
incorporated herein by reference.
23
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a)1. Financial Statements
Page
The following consolidated financial statements of
Inc. and its subsidiaries are included in Part II, Item
8:
Independent Auditors' Report.............. 9
Consolidated balance sheets
- December 30, 1995 and
December 31, 1994 ......... 10
Consolidated statements of
operations - years ended
December 30, 1995,
December 31, 1994 and
December 25, 1993....................... 11
Consolidated statements of
stockholders' equity - years
ended December 30, 1995,
December 31, 1994 and
December 25, 1993 ...................... 12
Consolidated statements of cash flows - years ended
December 30, 1995, December 31, 1994
and December 25, 1993................... 13
Notes to consolidated
financial statements.......... 14-22
(a)2. Financial Statement Schedule
Schedule II - Valuation and
qualifying accounts....................... 25
All other schedules have been omitted because they are
inapplicable or not required, or the information is included
elsewhere in the financial statements or notes thereto.
(a)3. Exhibits
Exhibit No. 21 - Subsidiaries of the Company
................................................... 26
(b) Reports on Form 8-K
None
24
<TABLE>
HAMPTON INDUSTRIES, INC.
SCHEDULE II - VALUATION AND
QUALIFYING ACCOUNTS
<CAPTION>
Additions
Balance at Charged to
beginning costs and
Description of period expenses
- ---------------------------- ------------- ----------
<S> <C> <C>
DEDUCTED FROM ASSETS TO WHICH
THEY APPLY:
RESERVE FOR DOUBTFUL ACCOUNTS
AND ALLOWANCES:
Year ended December 30, $ 1,238,000 $1,210,678
============= ==========
Year ended December 31, $ 1,623,200 $ 246,537
============= ==========
Year ended December 25, $ 1,656,600 $ 555,848
============= ==========
<CAPTION>
Balance at
Charged to end
Description other accounts Deductions of period
- ---------------------------- ------------- ---------- ----------
<S> <C> <C> <C>
DEDUCTED FROM ASSETS TO WHICH
THEY APPLY:
RESERVE FOR DOUBTFUL ACCOUNTS
AND ALLOWANCES:
Year ended December 30, $ - (A) $1,248,678(B) $1,200,000
============= ========== ==========
Year ended December 31, $ 2,891(A) $ 634,628(B) $1,238,000
============= ========== ==========
Year ended December 25, $ - (A) $ 589,248(B) $1,623,200
============= ========== ==========
</TABLE>
NOTES:
(A) Recoveries of accounts
previously written off.
(B) Uncollectible accounts
written off.
25
Exhibit 21
HAMPTON INDUSTRIES, INC.
Subsidiaries
Name State of Incorporation
Production Link, Ltd. New York
Samsons Inc. North Carolina
Samsons Manufacturing Corp. North Carolina
Kinston Shirt Company North Carolina
Samsons Apparel Corp. North Carolina
(wholly-owned subsidiary of
Samsons Manufacturing Corp.)
Kinston Paper Box Co., Inc. North Carolina
Kinston Die Cutting Corp. North Carolina
Hampco Apparel, Inc. Maryland
Hampton Shirt Co., Inc. New York
Hampton Shirt Co., Inc. North Carolina
Snow Hill Apparel Co., Inc. North Carolina
Hamptex, Inc. North Carolina
Hampton owns 100% of the outstanding stock of each subsidiary,
except as indicated, and all are included in the consolidated financial
statements.
26
SIGNATURES
Pursuant to requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Hampton Industries, Inc. has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HAMPTON INDUSTRIES, INC.
S/DAVID FUCHS
David Fuchs, Chairmen and Director
Steven Fuchs, President and Director
S/ROBERT J. STIEHL, JR.
_______________________________________
Robert J. Stiehl, Jr., Executive Vice President
Operations and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report had been signed below by the following persons
on behalf of the Company and in the capacities and on the dates
indicated:
S/HERBERT L. ASH S/SOL SCHECHTER
_____________________ ___________________________________
Herbert L. Ash, March 28, 1996 Sol Schechter,March 28, 1996
(Director) (Director)
S/GERALD FRIEDER S/PAUL CHUSED
______________________ ___________________________________
Gerald Frieder, March 28, 1996 Paul Chused, March 28, 1996
(Director) (Director)
The Company's annual report to stockholders and proxy
material is to be furnished to its security holders subsequent
to the filing of the annual report on this form. Copies of such
material will be furnished to the Commission when it is sent to
security holders.
27
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<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 351,982
<SECURITIES> 0
<RECEIVABLES> 22,283,271
<ALLOWANCES> 0
<INVENTORY> 46,314,931
<CURRENT-ASSETS> 1,290,823
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0
0
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<TOTAL-LIABILITY-AND-EQUITY> 94,270,925
<SALES> 184,592,840
<TOTAL-REVENUES> 185,420,485
<CGS> 153,418,347
<TOTAL-COSTS> 153,418,347
<OTHER-EXPENSES> 29,588,365
<LOSS-PROVISION> 1,211,077
<INTEREST-EXPENSE> 4,084,949
<INCOME-PRETAX> (2,882,253)
<INCOME-TAX> (718,400)
<INCOME-CONTINUING> (2,163,853)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,163,853)
<EPS-PRIMARY> (.47)
<EPS-DILUTED> (.47)
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