[TYPE]10-Q
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 1, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________________ TO ________________
Commission File No. 33-30434
THE BIBB COMPANY
(Exact name of registrant as specified in its charter)
Delaware 13-3348029
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
237 Coliseum Drive, Macon, Georgia 31201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (912) 752-6700
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 (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes _X_ No
___
As of October 28, 1994, there were outstanding 9,600 shares of the
registrant's Common Stock, par value $.10 per share, which is the only
class of common or voting stock of the registrant.
Page 1 of
Exhibit Index on Page
<PAGE>
THE BIBB COMPANY
INDEX
Page No.
PART I - FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements:
<PAGE>
Consolidated balance sheets - October 1, 1994 and January 1, 1994
Consolidated statements of operations for the quarters and nine months
ended October 1, 1994 and October 2, 1993
Consolidated statement of changes in stockholder's equity
Consolidated statements of cash flows for nine months
ended October 1, 1994 and October 2, 1993
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
<TABLE>
THE BIBB COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(thousands of dollars, except per share data)
<CAPTION>
October 1, January 1,
1994 1994
----------- ----------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 135 $ 146
Restricted cash 8,918 5,344
Accounts receivable, net of allowances for
doubtful accounts, discounts and claims
of $3,729 and $3,686, respectively 21,120 11,374
Inventories 83,490 73,926
Prepaid expenses and other current assets 723 1,130
-------- --------
Total current assets 114,386 91,920
NET ASSETS OF DISCONTINUED OPERATIONS 49,878 47,212
PROPERTY, PLANT and EQUIPMENT, net 64,005 65,386
INVESTMENT IN AFFILIATE - T.B. WOOD'S
SONS COMPANY 13,805 14,924
OTHER ASSETS 10,677 8,762
<PAGE>
-------- --------
$252,751 $228,204
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 86 $ 86
Accounts payable 35,631 23,756
Accrued payroll and other compensation 13,639 12,484
Accrued interest 1,336 6,641
Other accrued liabilities 3,283 4,385
-------- -------
Total current liabilities 53,975 47,352
LONG-TERM DEBT, less current maturities 215,479 175,353
COMMITMENTS AND CONTINGENCIES 0 0
STOCKHOLDERS' EQUITY:
Preferred stock, Series A cumulative, $10
par value, 250,000 shares authorized;
0 shares issued and outstanding 0 0
Common stock, $.10 par value, 500,000 shares
authorized; 9,600 shares issued and
outstanding 1 1
Additional paid-in capital 3,427 3,427
Retained earnings (deficit) (19,800) 2,402
Net pension liability ( 331) ( 331)
-------- --------
Total stockholders' equity (16,703) 5,499
-------- --------
$252,751 $228,204
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
THE BIBB COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands of dollars, except per share amounts)
(unaudited)
<CAPTION>
Quarters Ended Nine Months Ended
--------------------- ---------------------
October 1, October 2, October 1, October 2,
1994 1993 1994 1993
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 90,794 $ 96,635 $256,038 $273,607
COST OF SALES 79,289 78,550 220,833 222,284
-------- -------- -------- --------
Gross Profit 11,505 18,085 35,205 51,323
SELLING AND ADMINISTRATIVE
EXPENSES 7,110 8,185 25,049 24,360
MANAGEMENT FEES TO AFFILIATE 1,000 1,000 3,000 3,000
<PAGE>
-------- -------- -------- --------
Operating Profit (Loss) 3,395 8,900 7,156 23,963
OTHER INCOME (EXPENSE)
Interest expense ( 5,860) ( 5,626) (16,973) (17,327)
Interest income from
Affiliate - T. B.
Wood's Sons Company 293 0 881 0
Loan fee amortization
and expense ( 585) ( 312) ( 1,199) ( 992)
Other, net ( 379) ( 154) ( 832) 204
-------- -------- --------- --------
( 6,531) ( 6,092) (18,123) (18,115)
-------- -------- --------- --------
INCOME (LOSS) BEFORE
DISCONTINUED OPERATIONS
AND EXTRAORDINARY ITEM ( 3,136) 2,808 (10,967) 5,848
DISCONTINUED OPERATIONS:
Loss from operations ( 2,225) ( 930) (10,235) ( 4,287)
Provision for losses
during disposition 0 0 ( 1,000) 0
EXTRAORDINARY ITEM
LOSS FROM RETIREMENT
OF DEBT IN CONNECTION
WITH REFINANCING 0 ( 738) 0 ( 738)
-------- -------- --------- --------
INCOME (LOSS) BEFORE
INCOME TAXES ( 5,361) 1,140 (22,202) 823
PROVISION FOR INCOME TAXES 0 0 0 0
-------- -------- --------- --------
NET INCOME (LOSS) ( 5,361) 1,140 (22,202) 823
======== ======== ========= ========
NET INCOME (LOSS) BEFORE
DISCONTINUED OPERATIONS
PER SHARE OF COMMON
STOCK $(326.67) $ 292.50 $(1,142.40) $ 609.16
EXTRAORDINARY ITEM 0 ( 76.87) 0 ( 76.87)
DISCONTINUED OPERATIONS PER
SHARE OF COMMON STOCK (231.77) ( 96.88) (1,170.31) (446.56)
-------- -------- --------- --------
NET INCOME (LOSS) PER
SHARE OF COMMON STOCK $(558.44) $ 118.75 $(2,312.71) $ 85.73
======== ======== ========== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING 9,600 9,600 9,600 9,600
======== ======== ======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE BIBB COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(thousands of dollars)
(unaudited)
<CAPTION>
Additional Retained Net
Preferred Common Paid-in Earnings Pension
Stock Stock Capital (Deficit) Liability
--------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1994 $ 0 $ 1 $ 3,427 $ 2,402 $( 331)
Net loss 0 0 0 (22,202) 0
-------- ------- ------- -------- ---------
Balance, October 1, 1994 $ 0 $ 1 $ 3,427 $(19,800) $( 331)
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
THE BIBB COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
(unaudited)
<CAPTION>
Nine Months Ended
------------------------------
October 1, October 2,
1994 1993
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ ( 22,202) $ 823
Adjustments to reconcile net income
(loss) to net cash provided by (used
for) operating activities:
Depreciation and amortization 7,036 7,090
Loan fee amortization 1,199 992
Extraordinary loss on retirement of debt 0 738
Net (gain) loss on sales of assets 14 27
Equity earnings in investment 0 ( 386)
Changes in operating assets and liabilities:
Restricted cash ( 3,574) 0
(Increase) in accounts receivable ( 9,746) (16,056)
(Increase) in inventories ( 9,564) (10,582)
(Increase) decrease in prepaid expenses and
other current assets ( 232) 1,166
Increase in accounts payable
and accrued expenses 6,623 2,954
Change in operating assets &
liabilities of discontinued
operations 195 565
--------- --------
<PAGE>
Net cash (used for) operating
activities ( 30,251) (12,669)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ( 5,703) ( 6,653)
Capital expenditures of
discontinued operations ( 2,861) ( 1,483)
Disposal of fixed assets 26 18
Other, net ( 1,467) ( 2,038)
--------- -------
Net cash used for investing activities ( 10,005) (10,156)
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of receivables 0 35,000
Proceeds from sale of receivables for
discontinued operations 0 15,000
Repayments from T.B. Wood's Sons Company, net 2,000 5,560
Net borrowings (repayments) under
revolving lines of credit 40,126 (30,956)
Deferred loan fees ( 1,000) ( 1,555)
Other, net ( 881) ( 37)
--------- --------
Net cash provided by
financing activities 40,245 23,012
--------- --------
NET INCREASE (DECREASE) IN CASH
CASH AND EQUIVALENTS ( 11) 187
CASH AND EQUIVALENTS AT
BEGINNING OF PERIOD 146 102
--------- --------
CASH AND EQUIVALENTS AT END OF PERIOD $ 135 $ 289
========= ========
INCOME TAXES PAID IN THE PERIOD, net $ 0 $ 0
========= ========
INTEREST PAID IN THE PERIOD $ 25,945 $ 25,890
========= ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
THE BIBB COMPANY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and note disclosures normally
included in annual consolidated financial statements prepared in accordance
with generally accepted accounting principles have been condensed or
<PAGE>
omitted pursuant to those rules and regulations. It is suggested that
these condensed consolidated financial statements be read in conjunction
with the Company's audited consolidated financial statements and notes
thereto for the year ended January 1, 1994.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of normal
recurring accruals) necessary to present fairly the Company's financial
position as of October 1, 1994 and the results of its consolidated
operations and its consolidated cash flows for the nine months ended
October 1, 1994 and October 2, 1993. Certain prior year amounts have been
reclassified to agree with current year presentation.
Annual results of operations of the Company have been reported for the
52- or 53-week period ending nearest December 31. Interim results for the
nine months ended October 1, 1994 and October 2, 1993 are for 39 weeks
each. Interim results of operations are not necessarily indicative of the
results that may be expected for the full year.
2. SIGNIFICANT ITEMS AFFECTING FINANCIAL STATEMENTS
Several significant items affected the results of operations for the
quarter and nine months ended October 1, 1994.
The Company implemented a number of changes to improve future operating
performance following a comprehensive review of the operations of the
Company which was completed in July 1994. These changes included (a) a
plan to reduce overall costs, including restructuring the Company's
management organization and (b) a plan to dispose of the Company's terry
products business.
The Company's operations were adversely affected by significant flooding
in July 1994.
Management Organization and Cost Reduction Program
In July 1994, the Company implemented a cost reduction program, which,
among other things, included restructuring the Company's management
organization and the sales and marketing operation relating to consumer
products, resulting in a significant reduction in management staff and
other employees. Although this program was implemented in the third
quarter, the full benefit of the cost reduction program will not be
realized until the fourth quarter inasmuch as severance and related costs
of the program were included as an expense in the third quarter in the
accompanying financial statements.
Discontinued Operations - Terry Products Business
In August 1994, the Board of Directors of the Company approved a plan to
dispose of the Company's terry products business, which includes bath
towels and other terry products sold primarily to retail chains, specialty
chains and mass merchants, as well as to hotels, hospitals and others
serving the hospitality market (the "Terry Disposition"), but does not
include the Company's damask table linen products. It would include the
sale of the Company's manufacturing and distribution facilities, and
related net working capital, located in Roanoke Rapids and Goldsboro, North
Carolina. Proceeds from the Terry Disposition are expected to be applied
against the Company's outstanding indebtedness and used for working capital
purposes.
<PAGE>
The terry products business that is the subject of the Terry Disposition
has been accounted for as a discontinued operation and, accordingly, the
operating results and net assets relating thereto have been segregated and
reported as "Discontinued Operations" in the accompanying financial
statements.
Summarized results of operations for the terry products business were as
follows:
<TABLE>
<CAPTION>
Three Months Nine Months
--------------------- ---------------------
October 1, October 2, October 1, October 2,
1994 1993 1994 1993
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Sales $ 27,516 $ 30,659 $ 79,665 $ 88,769
======== ======== ======== ========
Total loss related to
discontinued
operations $ 2,225 $ 930 $ 11,235 $ 4,287
======== ======== ======== ========
</TABLE>
Net assets for the terry products business consisted of the following:
<TABLE>
<CAPTION>
October 1, January 1,
1994 1994
---------- ---------
<S> <C> <C>
Net current assets $ 26,937 $ 24,534
Net non-current assets 22,941 22,678
</TABLE>
The total loss related to discontinued operations for the terry products
business includes interest expense of $800,000 and $850,000 for the three
months ended October 1, 1994 and October 2, 1993, respectively, and
$2,400,000 and $2,850,000 for the nine months ended October 1, 1994 and
October 2, 1993, respectively.
The financial statements for the prior periods have been reclassified to
conform to the current periods' presentation.
Flood Disruption
During the first week in July 1994, heavy rains and flooding in central
Georgia disrupted the operations at three of the Company's plants and the
Macon administrative headquarters. While there was no material physical
damage to these plants, operations were curtailed. In addition, a minor
amount of inventory at one storage location was water damaged. The Company
carries business interruption insurance and plans to submit a claim for
these losses, subject to the policy deductibles and exclusions.
The impact from the flood disruption is reflected in the accompanying
financial statements.
<PAGE>
3. INVENTORIES
<PAGE>
The major classes of inventories were as follows (thousands of dollars):
<TABLE>
<CAPTION>
October 1, January 1,
1994 1994
--------- ---------
<S> <C> <C>
Raw materials and supplies $ 11,625 $ 9,516
Work-in-process 38,837 34,463
Finished goods 39,732 36,651
Total at FIFO cost, which
approximates replacement cost 90,194 80,630
-------- ---------
Excess of FIFO cost over LIFO cost ( 6,704) ( 6,704)
-------- ---------
Total at LIFO cost $ 83,490 $ 73,926
======== =========
</TABLE>
4. INVESTMENT IN AFFILIATE - T.B. WOOD'S SONS COMPANY
On April 2, 1993, T.B. Wood's Sons Company ("Woods") acquired new
product lines and completed a recapitalization. In settlement of amounts
owing on the note payable to the Company ("Woods Note"), the Company
received a cash payment of $5,560,000, two new notes and a warrant
exercisable by the Company to purchase up to 125,000 shares of common stock
of Woods at an exercise price of $.01 per share. The new notes received
consisted of (i) a ten-year, $13,218,000 subordinated promissory note, with
interest of $576,000 payable semi-annually, except that until the third
anniversary of the date of said note, the interest due thereunder on any
interest payment date shall be added to the outstanding principal of the
note, and (ii) a ten-year, $2,000,000 non-interest bearing, subordinated
promissory note. The Company believes that the consideration received from
Woods was fair to the Company from a financial point of view.
The $2,000,000 note, mentioned above, was paid in full on August 26,
1994.
5. INCOME TAXES
In June 1989, the stockholders of the Company filed elections with the
Internal Revenue Service and certain state taxing authorities to be treated
as an S Corporation beginning April 2, 1989. As an S Corporation, the
Company generally will not be subject to corporate level taxes on its net
income because such income will be attributed to the Company's stockholders
and taxes on such income will be directly payable by them. As a result,
the Company generally intends to make quarterly distributions to its
stockholders in amounts equal to such taxes estimated to be payable by
them.
Subsequent to the S Corporation election, the Company remains subject to
state and local income taxes in certain states and municipalities. The
Company has net operating loss carryforwards available to offset future
taxable income in these states and municipalities.
6. LONG-TERM DEBT
Long-term debt consisted of the following (thousands of dollars):
<PAGE>
<TABLE>
<CAPTION>
October 1, January 1,
1994 1994
--------- ----------
<S> <C> <C>
14% Senior Subordinated Notes,
due 1999 $ 127,004 $ 127,004
13 7/8% Senior Subordinated
Notes, due 1999, net of
unamortized discount of
$86 and $101, respectively 32,737 32,722
Payable under Senior
Revolving Credit Facility 44,074 3,900
Industrial Development Revenue Bonds,
variable rate interest,
due in 2003 and 2004 11,000 11,000
Other 750 813
-------- --------
215,565 175,439
Less current maturities 86 86
-------- ---------
$215,479 $175,353
======== ========
</TABLE>
In 1993, the Company decided to sell certain of its trade accounts
receivable (the "Receivables") in the Trade Receivables Transaction
(described below). Inasmuch as the Receivables served as collateral under
the Company's then outstanding senior credit facility, the Company and its
senior lenders agreed to refinance the senior credit facility to, among
other things, release from collateral the Receivables. Accordingly, at
the same time that it entered into the Trade Receivables Transaction, the
Company and its senior lenders entered into a new revolving credit
agreement (the "Credit Agreement") providing for a new credit facility with
a term expiring in August 1996, under which the Company was permitted to
borrow up to $45,000,000 for working capital purposes (up to $20,000,000 of
which could be issued as letters of credit) ( the "Credit Facility").
On July 25, 1994, the Company and its senior lenders amended the Credit
Agreement (the "Amendment") effective July 2, 1994. Among other things,
the Amendment (i) increased the amount the Company may borrow under the
Credit Facility from $45,000,000 to $60,000,000 subject to certain
specified borrowing base requirements (and increased the amount which may
be issued as letters of credit from $20,000,000 to $25,000,000), which
amount is subject to permanent reduction in the event of certain mandatory
prepayments, (ii) shortened the term of the Credit Agreement to January 1,
1996, (iii) further restricted the amounts of certain "Restricted Junior
Payments" (as defined) payable under certain circumstances, (iv) revised
certain of the financial tests contained in the restrictive covenants to
levels that better reflect the Company's recent operating results, and (v)
added an additional financial covenant requiring the Company to meet a
minimum cash flow test. Under the Amendment, the Credit Facility will be
reduced to $55,000,000 on December 15, 1994.
The "Trade Receivables Transaction" involved the sale of the Receivables
for a cash purchase price of $50,000,000. During the term (fifty-seven
<PAGE>
months) of the Trade Receivables Transaction, the cash generated by the
Receivables will be used to purchase additional Receivables originated by
the Company, among other things.
Item 2. Management's Discussion and Analysis of Results of Operations and
Liquidity and Capital Resources
(a) Results of Operations
Background
Results of continuing operations in the quarter ended October 1, 1994
were affected by several significant items, including costs associated with
a management restructuring and the disruption of operations due to a flood
in central Georgia in July.
Management Restructuring: A comprehensive review of the operations of
the Company was completed in July 1994 which resulted in a number of
changes. These changes included the implementation of a significant cost
reduction program in July, and reorganization of the management structure
and the sales and marketing organization related to consumer products. In
connection with this restructuring, Edgar Davis resigned as President and
Chief Operating Officer and Thomas C. Foley, Chairman and Chief Executive
Officer of the Company assumed Mr. Davis' responsibilities. In addition,
the decision was made to dispose of the Company's terry products business.
The operating results and net assets related to the terry products business
are reflected in the accompanying financial statements as "Discontinued
Operations." Accordingly, the discussion which follows addresses the
results of operations for the Company's continuing business, which includes
the Company's Engineered products group, the Apparel products group and the
Bedding products group, which includes products for the consumer and
hospitality markets, unless otherwise indicated.
Flood Loss: During the first week of July 1994, heavy rains and
flooding in central Georgia disrupted the operations of the Macon
administrative headquarters and three of the Company's plants involved in
the production of retail bedding products. While there was no material
physical damage to these plants, operations were curtailed and delivery
schedules were affected, resulting in reduced sales, lost margin, and
increased manufacturing costs as a result of having plants idled during the
flood period.
Results of Continuing Operations
Net sales for the quarter and nine months ended October 1, 1994 were
$90,794,000 and $256,038,000, respectively. Net sales for the quarter
decreased $5,841,000 or 6.0% from the comparable prior year period, and
$17,569,000 or 6.4% for the nine month period. The Company's performance
in the third quarter and nine months was affected by a faster than
anticipated decline in sales of juvenile licensed bedding products,
particularly licensed bedding products bearing the Barney theme and
character, compared with the prior year periods. This decline in juvenile
sales resulted in a decline in overall sales, and high close out and other
inventory related losses in the second and third quarters. Increased sales
of lower margin promotional consumer products partially offset the decline
in juvenile products sales, but adversely affected margins and
profitability. Net sales were also adversely affected by the flood, as
discussed above.
Gross profit was $11,505,000 or 12.7% of net sales for the quarter ended
<PAGE>
October 1, 1994 as compared with $18,085,000 or 18.7% of net sales for the
comparable prior year period and was $35,205,000 or 13.7% of net sales for
the nine months ended October 1, 1994 as compared with $51,323,000 or 18.8%
of net sales for the comparable prior year period. This was a decrease of
$6,580,000 and $16,118,000 from the comparable prior year quarter and nine
months, respectively. Gross profit was primarily affected by (i) a change
in the sales mix, with less sales of juvenile bedding products, carrying
higher profit margins, and more sales of promotional adult bedding products
at lower margins, (ii) higher cotton and polyester prices and (iii) the
flood, as discussed above. While sales and margins increased in the
Company's Royalton line, the increase was not enough to make up for the
abovementioned items.
Selling and administrative expenses were $7,110,000 or 7.8% of net sales
for the quarter ended October 1, 1994 as compared with $8,185,000 or 8.5%
of net sales for the comparable prior year period and were $25,049,000 or
9.8% of net sales for the nine months ended October 1, 1994 as compared
with $24,360,000 or 8.9% of net sales for the comparable prior year period.
Notwithstanding the severance and related costs resulting from the
management restructuring included as expenses in the third quarter, selling
and administrative expenses for the third quarter were lower as a result of
the cost reduction program implemented in July. For the nine months, the
increase reflects additional selling and marketing expenses incurred to
develop the Company's Royalton and adult product lines, and included a
$477,000 bad debt charge in the second quarter as a result of terminating a
distributor relationship in Canada.
Operating profit for the quarter was $3,395,000 compared to $8,900,000
in the prior year period. Operating profit for the nine months ended
October 1, 1994 of $7,156,000 compared to $23,963,000 in the prior year
period. These decreases primarily reflect the items discussed above.
Interest expense for the quarter and nine months was $5,860,000 and
$16,973,000, respectively, which amounts were comparable to the prior year
periods.
Net income from continuing operations for the quarter and nine months
was a net loss of $3,136,000 and $10,967,000, respectively, compared with
net income of $2,808,000 and $5,848,000 in the comparable prior year
periods. For the quarter and nine months, the Company had a net loss of
$5,361,000 and $22,202,000, respectively, compared with net income of
$1,140,000 and $823,000 in the comparable prior year periods, as a result
of the items discussed above.
For information concerning the results of the discontinued operations,
see Note 2 to Consolidated Financial Statements.
(b) Liquidity and Capital Resources
In August 1993, the Company refinanced its senior revolving credit
facility (the "Refinancing"). The Refinancing consisted of the Company's
entering into a new revolving credit agreement with existing lenders (the
"Credit Agreement") and the Trade Receivables Transaction (as described
below). The Credit Agreement initially provided for a three-year revolving
credit facility (the "Credit Facility"), under which the Company could
borrow up to an aggregate of $45,000,000 for working capital purposes (up
to $20,000,000 of which could be issued as letters of credit). The "Trade
Receivables Transaction" involved the sale of certain trade accounts
receivable ("Receivables") for a cash purchase price of $50,000,000.
During the term (fifty-seven months) of the Trade Receivables Transaction,
the cash generated by the Receivables will be used to purchase additional
<PAGE>
Receivables originated by the Company, among other things. As a result of
the Refinancing, the Company's ability to finance its working capital needs
was increased.
On July 25, 1994, the Company and its senior lenders amended the Credit
Agreement, effective July 2, 1994 (the "Amendment"). Among other things,
the Amendment (i) increased the amount the Company may borrow under the
Credit Facility from $45,000,000 to $60,000,000 (and increased the amount
which may be issued as letters of credit from $20,000,000 to $25,000,000),
which amount is subject to permanent reduction in the event of certain
mandatory prepayments and subject to certain specified borrowing base
requirements, (ii) shortened the term of the Credit Agreement to January 1,
1996, (iii) further restricted the amounts of certain "Restricted Junior
Payments" (as defined), including management fees, payable under certain
circumstances, (iv) revised certain of the financial tests contained in the
restrictive covenants to levels that better reflect the Company's recent
operating results, and (v) added an additional financial covenant requiring
the Company to meet a minimum cash flow test. Under the Amendment, the
Credit Facility will be reduced to $55,000,000 on December 15, 1994. In
August 1994, T. B. Wood's Sons Company repaid in full the principal amount
of the $2,000,000 subordinated promissory note payable to the Company. See
Note 4 to the Consolidated Financial Statements.
The Company experiences significant fluctuations in its working capital
requirements primarily associated with its retail customers' late summer
and fall inventory purchasing. The Company's primary ongoing cash
requirements will be to fund debt service, make capital expenditures and
finance working capital. The Company expects that its internally generated
funds from operations, supplemented by borrowings under the Credit
Agreement, the Trade Receivables Transaction and other external sources,
including the sale of the Terry Products Business, will be sufficient to
meet its debt service requirements, capital expenditures and working
capital needs. In order to reduce its cost of borrowing, the Company
intends to take advantage of favorable purchase money financing and other
types of borrowings.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27. Financial Data Schedule for quarter ended October 1, 1994
(submitted to the Securities and Exchange Commission only).
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended October 1,
1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
<PAGE>
THE BIBB COMPANY
By: /s/ Thomas C. Foley
Thomas C. Foley
President, Chairman
of the Board, Chief
Executive Officer and
Chief Operating
Officer (Principal
Executive Officer)
By: /s/ A. William Ott
A. William Ott
Vice President & Controller
(Principal Accounting Officer)
DATE: November 14, 1994
<PAGE>
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
27 Financial Data Schedule for quarter ended
October 1, 1994 (submitted to the Securities
and Exchange Commission only).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance sheet and Consolidated Statements of Operations and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> OCT-01-1994
<CASH> 9,053
<SECURITIES> 0
<RECEIVABLES> 24,749
<ALLOWANCES> 3,629
<INVENTORY> 83,490
<CURRENT-ASSETS> 114,386
<PP&E> 64,005
<DEPRECIATION> 0
<TOTAL-ASSETS> 252,751
<CURRENT-LIABILITIES> 53,975
<BONDS> 215,477
<COMMON> 1
0
0
<OTHER-SE> (16,704)
<TOTAL-LIABILITY-AND-EQUITY> 252,751
<SALES> 256,038
<TOTAL-REVENUES> 256,038
<CGS> 220,833
<TOTAL-COSTS> 220,833
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,973
<INCOME-PRETAX> (22,202)
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,967)
<DISCONTINUED> (11,235)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,202)
<EPS-PRIMARY> (2,312.71)
<EPS-DILUTED> (2,312.71)
</TABLE>
