12
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1995
Commission File Number 33-11479
SYNTHETIC INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 58-1049400
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
309 LaFayette Road, Chickamauga, Georgia 30707
(Address of principal executive offices) (Zip Code)
(706) 375-3121
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ____
State the aggregate market value of the voting stock held by non-affiliates
of the registrant at May 10, 1995.
Common Stock, $1.00 par value -- $0
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date:
Outstanding at
Class August 11, 1995
Common Stock, $1.00 par value 49.95
PART I-FINANCIAL INFORMATION SYNTHETIC INDUSTRIES, INC.
ITEM 1. FINANCIAL INFORMATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
JUNE 30, SEPTEMBER 30,
ASSETS 1995 1994
CURRENT ASSETS:
Cash $ 103 $ 117
Accounts receivable, net of allowance for
doubtful accounts of $1,727 and $1,201 48,328 39,094
Inventory (Note 3) 50,725 32,520
Other current assets 10,634 10,859
------- -------
TOTAL CURRENT ASSETS 109,790 82,590
PROPERTY, PLANT AND EQUIPMENT, net (Note 4) 118,614 115,050
DEFERRED FINANCING AND ORGANIZATION COSTS,
net of accumulated amortization
of $5,343 and $4,788 6,892 7,246
EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED
AND OTHER INTANGIBLES , net of accumulated
amortization of $22,210 and $21,256 81,154 83,047
-------- --------
$316,450 $287,933
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $23,684 $ 18,767
Accrued expenses and other current liabilities 6,750 6,944
Income taxes payable 670 482
Interest payable 2,195 6,247
Current maturities of long-term debt (Note 5) 6,039 6,036
------- --------
TOTAL CURRENT LIABILITIES 39,338 38,476
LONG-TERM DEBT LESS CURRENT PORTION (Note 5) 196,760 172,490
DEFERRED INCOME TAXES 21,963 21,150
------- --------
258,061 232,116
------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
Common stock, $1 par value:
Authorized, issued and outstanding
49.95 shares - -
Additional paid-in capital 69,300 69,300
Cumulative translation adjustments 43 26
Deficit (10,954) (13,509)
--------- --------
TOTAL STOCKHOLDER'S EQUITY 58,389 55,817
--------- ---------
$316,450 $287,933
========= ==========
See notes to consolidated financial statements
F-2
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30 JUNE 30
1995 1994 1995 1994
Net sales $72,767 $64,308 $194,349 $170,839
-------- -------- --------- --------
Costs and expenses:
Cost of sales 50,867 39,749 136,950 109,200
Selling expenses 6,627 5,680 17,591 15,451
General and administrative
expenses 4,943 4,589 14,453 12,704
Amortization of organization
costs and intangibles 648 624 1,918 1,873
---------- ----------- --------- -------
63,085 50,642 170,912 139,228
---------- ----------- --------- -------
Operating income 9,682 13,666 23,437 31,611
Other expenses:
Interest expense 5,846 5,228 17,027 15,396
Amortization of deferred
financing costs 186 184 555 556
---------- ------------ --------- --------
6,032 5,412 17,582 15,952
---------- ------------ --------- --------
Income before income taxes 3,650 8,254 5,855 15,659
Provision for income
taxes (Note 6) 1,771 3,429 3,300 7,024
----------- ------------ ---------- -------
INCOME $ 1,879 $ 4,825 $ 2,555 $ 8,635
=========== ============ ========== =======
See notes to consolidated financial statements
F-3
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
NINE MONTHS ENDED JUNE 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,555 $ 8,635
Adjustments to reconcile net income
to net cash (used in) provided by operations:
Depreciation 8,605 7,108
Amortization of deferred financing and
organization costs and intangibles 2,473 2,429
Provision for bad debts 580 44
Deferred income taxes 1,130 2,156
Change in assets and liabilities:
Increase in accounts receivable (9,814) (3,652)
Increase in inventory (18,205) (3,784)
Increase in other current assets (92) (86)
(Increase) decrease in deferred financing costs (201) 267
(Increase) decrease in intangibles (25) 40
Increase in accounts payable 4,917 143
(Decrease) increase in accrued expenses
and other current liabilities (194) 1,853
Increase in income taxes payable 188 2,199
Decrease in interest payable (4,052) (4,242)
--------- ---------
Cash (used in) provided by
operating activities (12,135) 13,110
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (12,169) (21,303)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan 11,000 -
Repayments under term loan (4,500) (4,500)
Net borrowings under revolving credit line 17,800 12,647
Repayments of other long term obligations (27) (24)
-------- ---------
Cash provided by financing activities 24,273 8,123
Effect of exchange rate changes on cash 17 27
-------- ---------
NET DECREASE IN CASH (14) (43)
-------- ---------
CASH AT BEGINNING OF PERIOD 117 253
-------- ---------
CASH AT END OF PERIOD $ 103 $ 210
======== =========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 21,079 $ 19,638
Income taxes 1,832 2,201
See notes to consolidated financial statements
F-4
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)
(INFORMATION AS OF JUNE 30, 1995 AND FOR THE
PERIODS ENDING JUNE 30, 1995 AND 1994 IS UNAUDITED)
1.ORGANIZATION
Synthetic Industries, Inc. (the "Company"), a wholly-owned subsidiary of
Synthetic Industries L.P., a Delaware limited partnership (the "Partnership"),
manufactures and markets a wide variety of polypropylene-based fabric and fiber
products designed for specific industrial applications. The Company's diverse
mix of products are marketed to the floor covering, construction and technical
textile markets for such end use applications as primary and secondary carpet
backing, geotextile and erosion control products, fibrillated fibers for
concrete reinforcement, furniture construction fabrics, agricultural, filtration
and recreational products.
2.INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements as of June 30, 1995 and for the periods
ended June 30, 1995 and 1994 included herein have been prepared, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the financial position at June
30, 1995 and 1994, and the results of operations for the three and nine months
then ended have been made on a consistent basis. Certain information and
footnote disclosures included in consolidated financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although management believes
that the disclosures herein are adequate to make the information presented not
misleading. It is suggested that these consolidated financial statements be read
in conjunction with management's discussion and analysis of financial condition
and results of operations and the consolidated financial statements of the
Company's Form 10-K for the fiscal year ended September 30, 1994. Operating
results for the three and nine months ended June 30, 1995 may not necessarily be
indicative of the results that may be expected for the full year.
3.INVENTORY
June 30, September 30,
1995 1994
Finished goods $30,199 $ 20,580
Work in process 5,924 5,263
Raw materials 14,602 6,677
------- --------
$50,725 $ 32,520
======= ========
4.PROPERTY, PLANT AND EQUIPMENT
June 30, September 30,
1995 1994
Land $ 3,061 $ 3,061
Buildings and improvements 21,186 21,183
Machinery and equipment and
leasehold improvements 153,498 141,332
------- -------
177,745 165,576
Accumulated depreciation 59,131 50,526
-------- -------
$118,614 $ 115,050
======== =========
5.LONG-TERM DEBT
June 30, September 30,
1995 1994
Secured revolving credit facility
Secured revolving credit
portion 33,929 16,129
Term loan portion 27,500 21,000
12 3/4% Senior
subordinated
debentures 140,000 140,000
Other 1,370 1,397
------- -------
202,799 178,526
Less current portion 6,039 6,036
------- -------
Total long term portion $196,760 $ 172,490
======= =======
On January 13, 1995, the Company and its lenders entered into a Third Amended
and Restated Revolving Credit Agreement (as amended to date, the "Amended Credit
Facility"). The Company's term loan portion of the Amended Credit Facility
increased to $30,000 from $19,000. Such term loan borrowing is payable over a
60-month period which began on February 1, 1995, in equal installments of $500,
plus interest. $201 of expenses associated with the Amended Credit Facility
were incurred and are included within the deferred financing and organizational
costs.
The revolving credit loan portion of the Amended Credit Facility (the
"Revolver") provides for availability based on a borrowing formula consisting of
85% of eligible accounts receivable and 50% of eligible inventory, subject to
certain limitations. On May 26, 1995, the Company and its lenders entered into
the first amendment to the Amended Credit Facility. The amendment increased the
maximum amount available for borrowing under the Revolver from $35,000 to
$40,000 beginning May 26, 1995 and ending August 25, 1995. At June 30, 1995,
the Company had $4,940 available under the Revolver.
6.INCOME TAXES
The provision (benefit) for income taxes is as follows:
Three Months Ended Nine Months Ended
June 30, June 30,
1995 1994 1995 1994
Current:
Federal $ 768 $ 1,598 $ 1,820 $ 3,450
State 170 390 350 950
----- ------- ------- -------
938 1,988 2,170 4,400
----- ------- ------- -------
Deferred:
Federal 805 1,001 1,308 2,195
State 28 440 (178) 429
----- -------- ------- -------
833 1,441 1,130 2,624
----- --------- ------- -------
Total taxes on
income $ 1,771 $ 3,429 $ 3,300 $ 7,024
====== ========= ======= ========
The federal income tax provision for the three and nine months ended
June 30, 1995 and 1994 reflects the non-deductibility of certain expenses for
income tax purposes such as amortization of goodwill. Deferred income taxes
result from temporary differences between tax bases of assets and liabilities
and their reported amounts in the financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operating activities for the nine months ended June 30, 1995 was
$12,135. Such amount was used primarily to finance accounts receivable and
inventory build-ups. The accounts receivable increase results from the
seasonality of certain product line sales as well as increased sales over the
prior year. Growth in inventory relates to (i) increased quantities of finished
goods primarily to support sales growth and the seasonality of the
construction/civil engineering product line; (ii) increased quantities of
polypropylene to insure continuous production given the current supply market.
Additionally, finished goods and raw materials increased as a result of higher
polypropylene costs.
The average market cost of polypropylene increased 41% per pound during the
first nine months of fiscal 1995. The Company believes this increase was
primarily due to higher demand throughout the polypropylene market coupled with
inadequate expansion of polypropylene manufacturing capacity. The Company does
not expect that polypropylene costs will further increase during fiscal 1995.
Polypropylene costs account for approximately 50% of the Company's cost of goods
sold; accordingly, higher prices of polypropylene without offsetting selling
price increases could have a significant negative effect on the Company's
results of operations and financial condition. As a result of the level of
competition, the Company, to date, has been able to pass through only a portion
of the polypropylene cost increases through higher selling prices of certain
product lines. The Company has not experienced any shortage of supply of
polypropylene, however, continued increases in demand or major supply
disruptions without offsetting increases in manufacturing capacities could cause
the Company future supply shortages. Management anticipates that additional
polypropylene manufacturing facilities will be completed and commence production
during calendar years 1995 through 1997. Historically, the creation of
additional facilities has helped to relieve supply pressures.
Planned capital expenditures for fiscal 1995 are $13,000, of which $12,169
has been expended through June 30, 1995.
Capital expenditures and cash required to finance accounts receivable and
inventory buildups have been financed primarily through the Amended Credit
Facility. The term loan portion was increased on January 13, 1995 to $30,000
from $19,000. On May 26, 1995, the maximum amount available under revolving
credit loan portion was increased from $35,000 to $40,000, beginning May 26,
1995 and ending August 25, 1995. At June 30, 1995, there was $4,940 available
for borrowing under the Amended Credit Facility.
Management's plans indicate that current and future operations will provide
sufficient cash flow to satisfy the debt service requirements of the long-term
debt obligations, including the Amended Credit Facility and lease commitments.
RESULTS OF OPERATIONS FOR THE THIRD QUARTER
Net sales for the three months ended June 30, 1995 were $72,767 compared to
$64,308 for the three months ended June 30, 1994, an increase of 13%. This
increase was principally due to increased sales in all three product categories.
Carpet backing sales were $34,441 for the third quarter of fiscal 1995, an
increase of $3,248 or 10% from the third quarter of fiscal 1994. This increase
was primarily due to both increased sales volumes and higher average selling
prices.
Construction/civil engineering product sales were $23,780 for the third
quarter of fiscal 1995 up from $21,110 for the same period in fiscal 1994, an
increase of $2,670 or 13% due primarily to improved sales of geotextiles during
the third quarter of fiscal 1995 compared to the same period in fiscal 1994.
Technical textiles sales were $14,546 for the third quarter of fiscal 1995
compared to $12,005, for the same period of last year, an increase of $2,541 or
21%, due principally to increased sales of fabrics to the furniture and bedding
markets.
Gross profit for the third quarter of fiscal 1995 decreased to $21,900 from
$24,559 or 11% from the third quarter of fiscal 1994. As a percent of sales,
gross profit decreased to 30% from 38% primarily due to higher raw material
costs. (See Liquidity and Capital Resources.)
Direct selling and general and administrative expenses as a percentage of net
sales remained constant in the third quarter of fiscal 1995 as compared to the
third quarter of fiscal 1994.
Operating income decreased to $9,682 during the third quarter of fiscal 1995
(13% of net sales) from $13,666 during the third quarter of fiscal 1994 (21% of
net sales). This decrease is primarily due to the change in gross profit
associated with higher raw material costs.
Total interest expense for the third quarter of fiscal 1995 increased by $618
from the third quarter of fiscal 1994 due to higher average total debt
outstanding and a higher base rate for the Amended Credit Facility.
Net income for the third quarter of fiscal 1995 was $1,879 compared to a net
income of $4,825 for the third quarter of fiscal 1994 primarily due to increased
raw material and interest costs.
RESULTS OF OPERATIONS FOR THE FIRST NINE MONTHS
Net sales for the nine months ended June 30, 1995 were $194,349 compared to
$170,839 for the first nine months ended June 30, 1994, an increase of 14%.
This increase was primarily due to increased sales of carpet backing and
construction/civil engineering products.
Carpet backing sales were $98,748 for the first nine months of fiscal 1995, an
increase of $11,845 or 14% from the same nine months of fiscal 1994. This
increase in sales was the result of higher primary and secondary backing selling
prices and increased sales volumes of secondary backing.
Construction/civil engineering product sales were $54,134 for the first nine
months of fiscal 1995 as compared with $45,880 for the same period in fiscal
1994, an increase of $8,254 or 18%. This was due to increases in FibermeshTM
and geotextile and erosion control products during the first nine months of
fiscal 1995 compared to the same period in fiscal 1994.
Technical textiles sales were $41,467 for the first nine months of fiscal 1995
compared to $38,056 for the same period of fiscal 1994, an increase of $3,411 or
9%, primarily due to increased sales of fabrics to the furniture and bedding
market.
Gross profit for the first nine months of fiscal 1995 decreased to $57,399
from $61,639 during the first nine months of fiscal 1994. As a percentage of
sales, gross profit decreased to 30% from 36%, primarily attributable to higher
raw material costs. (See Liquidity and Capital Resources.)
Direct selling and general and administrative expenses as a percentage of net
sales remained constant in the first nine months of fiscal 1995 as compared to
the first nine months of fiscal 1994.
Operating income decreased to $23,437 during the first nine months of fiscal
1995 (12% of net sales) from $31,611 during the first nine months of fiscal 1994
(19% of net sales) due primarily to the change in gross profit associated with
higher raw material costs.
Total interest expense for the first nine months of fiscal 1995 increased by
$1,631 from the first nine months of fiscal 1994 due primarily to higher average
total debt outstanding and a higher base rate for the Amended Credit Facility.
Net income for the first nine months of fiscal 1995 was $2,555 compared to a
net income of $8,635 for the first nine months of fiscal 1994 primarily due to
increased raw material and interest costs.
OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Amendment No. 1 to the Third Amended and Restated Revolving Credit and
Security Agreement
(b) Reports of Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SYNTHETIC INDUSTRIES, INC.
By: /s/ Leonard Chill
Leonard Chill
President
Dated: August 11,1995
By: /s/ Jon P. Beckman
Jon P. Beckman
Chief Financial Officer
Dated: August 11, 1995
[Execution Copy]
AMENDMENT NO. 1
to
THIRD AMENDED AND RESTATED REVOLVING
CREDIT AND SECURITY AGREEMENT
dated as of March 15, 1993
THIS AMENDMENT NO. 1 dated as of May 26, 1995 is made by and among
Synthetic Industries, Inc., a Delaware corporation (the "Borrower"), The First
National Bank of Boston ("Bank of Boston"), SouthTrust Bank of Georgia, N.A.
("SouthTrust") and Sanwa Business Credit Corporation ("Sanwa" and together with
Bank of Boston and SouthTrust, the "Lenders"), and Bank of Boston as agent (the
"Agent") for the Lenders.
Preliminary Statements
The Borrower, the Lenders and the Agent are parties to a Third Amended and
Restated Revolving Credit and Security Agreement dated as of January 13, 1995
(the "Credit Agreement"; terms defined therein and not otherwise defined herein
being used herein as therein defined).
The Borrower has requested, and the Lenders and the Agent have agreed,
upon and subject to the terms, conditions and provisions of the Agreement,
further to amend certain provisions of the Credit Agreement to temporarily
increase the Revolving Credit Facility.
NOW, THEREFORE, in consideration of the Credit Agreement, the Loans made
by the Lenders and outstanding thereunder, the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendment to Credit Agreement. The Credit Agreement is
hereby amended, subject to the provisions of Section 2 hereof, effective as of
the date hereof, by
(a) amending Section 1.1 Definitions by
(i) amending the definition "Commitment" in its entirety to read as
follows:
"Commitment" means, as to each Lender, the amount set forth opposite such
Lender's name on ANNEX A hereto, or, during the period beginning on May
26, 1995 and ending August 25, 1995 on ANNEX A-1 hereto, under the
caption "Commitment," as each such amount may be reduced pursuant to
Section 2.3 (and the payments made thereunder) or 3.6 or otherwise
modified as reflected in the Register.
(ii) amending the definition "Revolving Credit Facility" in its
entirety to read as follows:
"Revolving Credit Facility" means an amount equal to $35,000,000, except
that during the period beginning May 26, 1995 and ending August 25, 1995,
"Revolving Credit Facility" means an amount equal to $40,000,000.
(iii) amending the definition "Revolving Credit Note" in its entirety to
read as follows:
"Revolving Credit Note" means each Third Amended and Restated Revolving
Credit Note or Supplemental Revolving Credit Note made by the Borrower to
the order of a Lender evidencing the obligation of the Borrower to pay
the aggregate unpaid principal amount of all Revolving Credit Loans made
to it by such Lender (and any promissory note or notes that may be issued
from time to time in substitution , renewal, extension, replacement or
exchange therefor, whether payable to such Lender or a different lender
and whether issued in connection with a Person becoming a Lender after
the Effective Date or otherwise) substantially in the form of Exhibit A-1
or Exhibit A-2 hereto, respectively, with all blanks properly completed,
either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or refinanced, and
"Revolving Credit Notes" means more than one such Revolving Credit Note.
(b) further amending the Credit Agreement by adding thereto a new Annex
A-1 in the form of Annex A-1 attached thereto, redesignating Exhibit A to the
Credit Agreement (Form of Third Amended and Restated Revolving Credit Note) as
Exhibit A-1 and adding thereto as a new Exhibit A-2 the Form of Supplemental
Revolving Credit Note attached hereto as Annex 1.
Section 2. Effectiveness of Agreement. This Amendment shall become
effective upon receipt by the Agent of the following, each in form and substance
satisfactory to the Agent:
(a) at least seven copies of this Amendment, each duly executed and
delivered by the Borrower and each Lender,
(b) Supplemental Revolving Credit Notes, each in the form of Annex 1
hereto, duly executed and delivered by the Borrower, payable to the order of
each Lender, each in the amount of such Lender's respective Commitment
Percentage of five million dollars,
(c) a certificate of the chief executive officer or chief financial
officer of the Borrower to the effect that (i) all representations and
warranties of the Borrower set forth in the Credit Agreement and the other Loan
Documents are true and correct on and as of the effective date of this
Amendment, both before and after giving effect to this Amendment, and (ii) no
Default or Event of Default has occurred and is continuing, and such statements
shall be true,
(d) an amendment to Uniform Commercial Code filings of record in the
State of Tennessee reflecting an increase in the amount of secured debt equal to
the increase in the Revolving Credit Facility effected by this Amendment, duly
executed and delivered by the Borrower, together with evidence of filing or, at
the Agent's option, in form for such filing,
(e) a legal opinion of Watson & Dana, counsel for the Borrower, as to
such matters in connection with the transaction contemplated by this Amendment
as may reasonably be requested by the Agent or any Lender, and
(f) such other documents, instruments and certificates as the Agent may
reasonably request in connection with the transactions contemplated by this
Amendment.
Section 3. Representations and Warranties. The Borrower hereby
represents and warrants to each Lender and the Agent as follows:
(a) Organization; Power; Qualification. The Borrower is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, has the power and authority to own its properties and to carry on
its business as now being and hereafter proposed to be conducted and is duly
qualified and authorized to do business in each jurisdiction in which the
failure to be so qualified would have a Materially Adverse Effect on the
Borrower.
(b) Authorization of Agreement and Loan Documents and Borrowing. The
Borrower has the right and power, and has taken all necessary action to
authorize it, to execute, deliver and perform this Amendment, the Supplemental
Revolving Credit Notes and the other Loan Documents to which it is a party to be
delivered hereunder, each in accordance with its terms, and to make Borrowings
hereunder. This Amendment and each of the Loan Documents to be delivered
hereunder have been duly executed and delivered by the duly Authorized Officers
of the Borrower and each is, or each when executed and delivered in accordance
with this Amendment will be, a legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms.
(c) Compliance of Agreement, Loan Documents and Borrowings with Laws,
etc. Except as provided in Schedule 5.1 (d) to the Credit Agreement, the
execution, delivery and performance of the Credit Agreement as amended by this
Amendment and of each of the Loan Documents contemplated to be delivered
hereunder, each in accordance with its terms, and the Borrowings hereunder do
not and will not , by the passage of time, the giving of notice or otherwise,
(i) require any Government Approval or violate any Applicable Law
relating to the Borrower or any Subsidiary of the Borrower,
(ii) conflict with, result in a breach of or constitute a default under
the certificate of incorporation or by-laws of the Borrower or any
Subsidiary of the Borrower, any indenture, agreement or other instrument
to which the Borrower or any Subsidiary of the Borrower is a party or by
which the Borrower or any Subsidiary of the Borrower or any property of
the Borrower or any Subsidiary of the Borrower may be bound or any
Governmental Approval relating to the Borrower or any Subsidiary of the
Borrower, or
(iii) result in or require the creation or imposition of any Lien upon
or with respect to any property now owned or hereafter acquired by the
Borrower or any Subsidiary of the Borrower other than the Security
Interest.
(d) Adverse Change. Since December 31, 1994,
(i) no material adverse change in the business, assets, liabilities,
financial condition, results of operations or business prospects of the
Borrower and its Subsidiaries taken as a whole have occurred, and
(ii) no event has occurred or failed to occur which has had, or may
have, a Materially Adverse Effect on the Borrower and its Subsidiaries
taken as a whole.
Section 4. Effect of Amendment. From and after the effectiveness of this
Amendment, all references in the Credit Agreement and in any other Loan Document
to "this Agreement," "the Credit Agreement," "hereunder," "hereof" and words of
like import referring to the Credit Agreement, shall mean and be references to
the Credit Agreement as amended by this Amendment. Except as expressly amended
hereby, the Credit Agreement and all terms, conditions, and provisions thereof
remain in full force and effect and are hereby ratified and confirmed. The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Lender or the Agent under any of the Loan Documents, nor constitute a waiver
of any provision of any of the Loan Documents.
Section 5. Counterpart Execution; Governing Law.
(a) Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
(b) Governing Law. This Amendment shall be governed by and construed in
accordance with laws of the State of Georgia.
Annex A-1
Proportionate
Share of Proportionate Proportionate
Commitment Revolving Share of Share of
Lender Percentage Commitment Credit Facility Term Loan A Term
Loan B
The First 46.154% $32,307,800 $18,461,600 $8,769,260 $5,076,940
National Bank
of Boston
SouthTrust 30.769% $21,538,300 $12,307,600 $5,846,110 $3,384,590
Bank of
Georgia NA
Sanwa 23.077% $16,153,900 $9,230,800 $4,384,630 $2,538,470
Business
Credit
Corporation
TOTALS 100.00% $70,000,000 $40,000,000 $19,000,000 $11,000,000
Applicable during the period May 26, 1995 through August 25, 1995.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SYNTHETIC INDUSTRIES, INC.
[Corporate Seal] By: Leonard Chill
ATTEST: Leonard Chill
President
Jon P. Beckman
Assistant Secretary
THE FIRST NATIONAL BANK
OF BOSTON, as Agent and as
a Lender
By William C. Puriton
William C. Puriton
SOUTHTRUST BANK OF
GEORGIA, N.A.
By Melinda M. Bergbom
Melinda M. Bergbom
SANWA BUSINESS CREDIT
CORPORATION
By Peter L. Skavla
Annex 1
To Amendment No. 1
Exhibit A-2
Form of Supplemental
Revolving Credit Note
$____________________
Atlanta, Georgia
May ____, 1995
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES, INC., a Delaware
Corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of _________________________ (the "Lender"), on August 25, 1995 the
principal amount of ___________________ AND NO/100 DOLLARS ($____________), or,
if less, the excess of the aggregate unpaid balance of all Advances under the
Revolving Credit Facility (each term as defined in the Credit Agreement referred
to below) made by the Lender to the Borrower pursuant to the Credit Agreement
(as hereinafter defined), the provisions of which are hereby incorporated herein
by reference, outstanding on such date over such Lender's Commitment Percentage
of $35,000,000. All payments made under this Supplemental Revolving Credit Note
(as amended from time to time, this "Revolving Credit Note") shall be made in
lawful money of the United States of America, in federal or other immediately
available funds.
The Borrower also unconditionally promises to pay interest on the unpaid
principal amount of the Revolving Credit Note for each day from the date hereof
until such principal amount is paid in full at the rates per annum and on the
dates specified in the Credit Agreement applicable from time to time in
accordance with the provisions thereof. Nothing contained in this Revolving
Credit Note or in the Credit Agreement shall be deemed to establish or require
the payment of a rate of interest in excess of the maximum rate permitted by any
Applicable Law. In the event that any rate of interest required to be paid
hereunder exceeds the maximum rate permitted by Applicable Law, the provisions
of the Credit Agreement relating to the payment of interest under such
circumstances shall control.
Both principal and interest are payable in lawful money of the United
States of America to the Agent for the account of the Lender at the Agent's
office at 100 Federal Street, Boston, Massachusetts 02110, in federal or
immediately available funds.
For the purposes of the Revolving Credit Note, "Credit Agreement" means
the Third Amended and Restated Revolving Credit and Security Agreement dated as
of January 13, 1995, as amended by Amendment No. 1 dated as of May 26, 1995,
among the Borrower, the Agent, the Lender and the other lenders identified
therein, as the same may be further amended, modified, supplemented or restated
from time to time.
Reference is made to the Credit Agreement for the definitions of other
terms used in this Revolving Credit Note.
Presentment for payment, demand, protest and notice of demand, notice of
dishonor and notice of non-payment and all other notices are hereby waived by
the Borrower.
This Revolving Credit Note is one of the Revolving Credit Notes under, is
secured in accordance with the terms of, and is entitled to the benefits of, the
Credit Agreement, which, among other things, contains provisions with respect to
security for the indebtness evidenced hereby, the acceleration of the maturity
and prepayments of the principal of the Revolving Credit Note prior to maturity,
all upon the terms and conditions therein specified.
The Borrower hereby agrees to pay on demand all costs and expenses
incurred in collecting the Borrower's obligations hereunder or in enforcing or
attempting to enforce any of the Lender's rights hereunder, including, but not
limited to, reasonable attorneys' fees and expenses if collected by or through
an attorney, whether or not suit is filed.
This Revolving Credit Note shall be governed by and construed in
accordance with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL]
By _________________________
Name:
Title:
ATTEST:
By:________________________
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 103
<SECURITIES> 0
<RECEIVABLES> 50055
<ALLOWANCES> 1727
<INVENTORY> 50725
<CURRENT-ASSETS> 109790
<PP&E> 177745
<DEPRECIATION> 59131
<TOTAL-ASSETS> 316450
<CURRENT-LIABILITIES> 39330
<BONDS> 196760
<COMMON> 0
0
0
<OTHER-SE> 58389
<TOTAL-LIABILITY-AND-EQUITY> 316450
<SALES> 194349
<TOTAL-REVENUES> 194349
<CGS> 170912
<TOTAL-COSTS> 170912
<OTHER-EXPENSES> 555
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17027
<INCOME-PRETAX> 5855
<INCOME-TAX> 3300
<INCOME-CONTINUING> 2555
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2555
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
