[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 APRIL 2, 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 April 29, 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>
THE BIBB COMPANY
INDEX
Page No.
PART I - FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements:
Consolidated balance sheets - April 2, 1994 and January 1, 1994
<PAGE>
Consolidated statements of operations for the quarters ended
April 2, 1994 and April 3, 1993
Consolidated statement of changes in stockholder's equity
Consolidated statements of cash flows for the quarters
ended April 2, 1994 and April 3, 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>
April 2, January 1,
1994 1994
----------- ----------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 125 $ 146
Restricted cash 10,810 5,344
Accounts receivable, net of allowances for
doubtful accounts, discounts and claims
of $3,166 and $3,686, respectively 16,369 17,274
Inventories 116,381 102,460
Prepaid expenses and other current assets 2,493 1,130
-------- --------
Total current assets 146,178 126,354
PROPERTY, PLANT and EQUIPMENT, net 87,905 88,064
INVESTMENT IN T.B. WOOD'S SONS COMPANY 15,219 14,924
OTHER ASSETS 9,693 8,762
-------- --------
<PAGE>
$258,995 $238,104
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 86 $ 86
Accounts payable 33,656 27,656
Accrued payroll and other compensation 19,029 18,134
Accrued interest 1,020 6,641
Other accrued liabilities 3,137 4,735
-------- --------
Total current liabilities 56,928 57,252
LONG-TERM DEBT, less current maturities 200,156 175,353
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY:
Preferred stock, Series A cumulative, $10
par value, 250,000 shares authorized;
0 shares issued and outstanding -- --
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) ( 1,186) 2,402
Net pension liability ( 331) ( 331)
-------- --------
Total stockholders' equity 1,911 5,499
-------- --------
$258,995 $238,104
======== ========
<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
--------------------------------
April 2, April 3,
1994 1993
----------- ----------
-
<S> <C> <C>
NET SALES $101,454 $111,147
COST OF SALES 86,763 94,900
-------- --------
Gross Profit 14,691 16,247
SELLING AND ADMINISTRATIVE EXPENSES 10,699 10,115
<PAGE>
MANAGEMENT FEES TO AFFILIATE 1,000 1,000
-------- --------
Operating Profit 2,992 5,132
OTHER INCOME (EXPENSE)
Interest expense ( 6,191) ( 6,721)
Interest income from T.B. Wood's
Sons Company 295 --
Loan fee amortization and expense ( 308) ( 234)
Other, net ( 376) 393
-------- --------
( 6,580) ( 6,562)
INCOME (LOSS) BEFORE INCOME TAXES ( 3,588) ( 1,430)
PROVISION FOR INCOME TAXES -- --
======== ========
NET INCOME (LOSS) $( 3,588) $( 1,430)
======== ========
NET INCOME (LOSS) PER SHARE OF COMMON STOCK $(373.75) $(148.96)
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING 9,600 9,600
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<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 $ -- $ 1 $ 3,427 $ 2,402 $( 331)
Net loss -- -- -- (3,588) --
-------- ------- ------- -------- ---------
Balance, April 2, 1994 $ -- $ 1 $ 3,427 $(1,186) $( 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)
<PAGE>
(unaudited)
<CAPTION>
Quarters Ended
------------------------------
April 2, April 3,
1994 1993
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $( 3,588) $( 1,430)
Adjustments to reconcile net income
(loss) to net cash provided by (used
for) operating activities:
Depreciation and amortization 3,212 3,257
Loan fee amortization 308 234
Net (gain) loss on sales of assets ( 2) 12
Equity earnings in investment -- ( 405)
-------- --------
Changes in operating assets and liabilities:
Restricted cash ( 5,466) --
Accounts receivable 905 ( 2,676)
Inventories (13,921) (10,404)
Prepaid expenses and other current assets ( 2,206) ( 1,138)
Accounts payable and accrued expenses ( 324) 6,533
-------- --------
Net cash provided by (used for) operating
activities (21,082) ( 6,017)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ( 3,056) ( 3,576)
Proceeds from sale of fixed assets 4 5
Other, net ( 395) 72
-------- --------
Net cash used for investing activities ( 3,447) ( 3,499)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments from T.B. Wood's Sons Company -- 5,560
Net (repayments) borrowings under
revolving lines of credit 24,803 3,998
Deferred loan fees -- --
Other, net ( 295) ( 15)
-------- --------
Net cash provided by (used for)
financing activities 24,508 9,543
-------- --------
NET INCREASE (DECREASE) IN CASH ( 21) 27
CASH AT BEGINNING OF PERIOD 146 102
--------- --------
CASH AT END OF PERIOD $ 125 $ 129
======== ========
INCOME TAXES PAID IN THE PERIOD, NET $ -- $ --
======== ========
<PAGE>
INTEREST PAID IN THE PERIOD $ 12,129 $ 12,530
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
THE BIBB COMPANY AND SUBSIDIARY
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
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 April 2, 1994 and the results of its consolidated operations
and its consolidated cash flows for the quarters ended April 2, 1994 and
April 3, 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
quarter ended April 2, 1994 and April 3, 1993 are for 13 weeks each.
Interim results of operations are not necessarily indicative of the results
that may be expected for the full year.
Unless the context otherwise requires, the "Company" means The Bibb
Company (formerly The NTC Group, Inc.), a Delaware corporation, and its
predecessor, The Bibb Company, a Georgia corporation.
<PAGE>
2. INVENTORIES
The major classes of inventories were as follows (thousands of
dollars):
<TABLE>
<CAPTION>
April 2, January 1,
1994 1994
----------- ----------
-
<S> <C> <C>
Raw materials and supplies $ 14,444 $ 13,641
Work-in-process 41,773 40,107
Finished goods 68,568 57,116
--------- ---------
Total at FIFO cost 124,785 110,864
<PAGE>
Excess of FIFO cost over LIFO cost ( 8,404) ( 8,404)
--------- ---------
Total at LIFO cost $ 116,381 $ 102,460
</TABLE>
3. INVESTMENT IN 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. The new notes received consist 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. If the $2,000,000 note is
not repaid within three years, the Company will receive a second warrant
which will be exercisable by the Company for the purchase of up to an
additional 62,500 shares of common stock of Woods. The Company believes
that the consideration received from Woods was fair to the Company from a
financial point of view.
4. 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.
<PAGE>
5. LONG-TERM DEBT
Long-term debt consisted of the following (thousands of dollars):
<TABLE>
<CAPTION>
April 2, January 1,
1994 1993
----------- ----------
<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 $96 and $101,
respectively 32,727 32,722
Payable under Senior Revolving Credit Facility 28,711 3,900
<PAGE>
Industrial Development Revenue Bonds,
variable rate interest, due in 2003 and 2004 11,000 11,000
Other 800 813
-------- --------
200,242 175,439
Less current maturities 86 86
-------- --------
$200,156 $175,353
</TABLE>
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 provides for a three-year revolving credit
facility (the "Credit Facility"), under which the Company may borrow up to
an aggregate of $45,000,000 for working capital purposes (up to $20,000,000
of which may 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
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.
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Liquidity and Capital Resources
(a) Results of Operations
Net sales for the quarter ended April 2, 1994 were $101,454,000, a
decrease of $9,693,000, or 8.7% from the comparable prior year period. The
decrease in sales was primarily due to reduced sales of terry products in
the first quarter resulting from the loss of an important terry program at
a major retailer following its decision to go with branded merchandise and
the sales of juvenile products returning to normal levels during the first
quarter of 1994 after exceptionally strong sales in the year earlier
period. The decline in terry and juvenile sales was partially offset by
continuing sales increases in the Company's Royalton(trademark) and adult
bedding lines and improvement in the Company's institutional sheets
business. The Company has made substantial progress in the first quarter
in replacing the lost terry volume.
The Company's gross profit for the first quarter of 1994 was
$14,691,000, or 14.5% of net sales compared to $16,247,000, or 14.6% of net
sales for the comparable prior year period. The 1994 first quarter gross
margin decline was a result of the decrease in sales volume discussed
above, and the related curtailment of plant operating schedules in the
terry operations. This was partially offset by continuing increases in
revenues and margins in the Company's Royalton(trademark) line as well as
manufacturing cost improvements resulting from the Company's continuing
cost reduction program.
Selling and administrative expenses in the first quarter of 1994 were
$10,699,000, or 10.5% of net sales compared to $10,115,000, or 9.1% of net
sales for the comparable prior year. The increases in selling and
<PAGE>
administrative expenses resulted primarily from additional marketing and
sales efforts to further develop the Royalton(trademark) and designer
product lines.
As a result of the above factors, operating profit for the quarter
decreased to $2,992,000, compared to $5,132,000 in the prior year.
Interest expense for the quarter declined to $6,191,000 compared to
$6,721,000 for the prior year, primarily as a result of the Refinancing
(defined below) in August 1993.
For the quarter, the Company had a net loss of $3,588,000 compared to
a net loss of $1,430,000 in the comparable prior year period.
<PAGE>
(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 provides for a three-year revolving credit
facility (the "Credit Facility"), under which the Company may borrow up to
an aggregate of $45,000,000 for working capital purposes (up to $20,000,000
of which may 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
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.
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,
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
None
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended April 2,
1994.
<PAGE>
SIGNATURES
<PAGE>
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.
THE BIBB COMPANY
By: /s/Edgar E. Davis
--------------------------------
Edgar E. Davis
President, Chief Operating
Officer
(Principal Executive Officer)
By: /s/Dennis L. Wolfarth
--------------------------------
Dennis L. Wolfarth
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
DATE: May 12, 1994
