<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- ----------------------------------------
FORM 10-K/A
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 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. 1-9734
ONEITA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 57-0351045
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
4130 Faber Place Drive, Suite 200 29405
Ashley Corporate Center (Zip Code)
Charleston, S.C.
Registrant s telephone number including area code: (803) 529-5225
Securities registered pursuant to Section 12(b) of the act:
Title of Class Name of Each Exchange on which registered
Common Stock, $.25 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 report) and (2) has been subject to such
filing requirements for the past 90 days: Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant s knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this form 10-K:
The aggregate market value of the voting stock held by nonaffiliates
of the Registrant, as of November 30, 1994 was approximately $40,906,028.
The number of shares outstanding of each of the Registrant s
classes of common stock, as of November 30, 1994 was 6,960,821 shares.
Documents incorporated by reference: Part III - Registrant's
definitive proxy statement to be filed pursuant to Regulation 14-A of the
Securities Exchange Act of 1934.
<PAGE> 2
PART I
-------------------------------------------------
Item One - Business
Oneita Industries, Inc. (the Company or Oneita ) manufactures and
markets high quality activewear and infantswear. Oneita s activewear
includes T-shirts and sweatshirts for screen printing sold under the Oneita
Power-T, Oneita Power/50 Plus and Oneita Power-Sweats brand names. The
Company estimates that it is the fourth largest manufacturer of imprinted
T-shirts in the United States. Oneita s infantswear includes layette and
playwear sold under brand names, including Soupcon, Oneita's Kids,
Health-tex Layette Collection and under private label. These products
are marketed to the imprinted sportswear industry through the Company s
Activewear Division and to major retailers through the Company s Retail
Division.
Since 1987, Oneita has achieved substantial growth by building a brand
name activewear and infantswear business with a high quality image. As a
result of realigning its product mix to concentrate on these higher margin
products, the Company s net sales of activewear increased from $37.4 million
in 1987 to $156.1 million in 1992, $141.1 million in 1993 and $156.4 million
in 1994 (a compound annual growth rate of approximately 22.7%) and net sales
of infantswear increased from $14.2 million in 1987 to $47.4 million in 1992,
$36.3 million in 1993 and $36.4 million in 1994 (a compound annual growth
rate of approximately 14.4%).
Oneita expanded its activewear products by introducing sweatshirts in
1991 under the Oneita Power-Sweats label. Sweatshirts accounted for
approximately $11.2 million of the activewear sales in 1993 and $17.7 million
of the activewear sales for 1994. In infantswear, Oneita has focused on
developing a variety of brand name products, each targeted at specific
retail markets, including department stores, chain stores and mass
merchandisers.
PRODUCTS
Activewear. Oneita manufactures and markets T-shirts and sweatshirts
for the imprinted sportswear industry. Screenprinting consists of imprinting
designs, patterns or letters ranging from simple lettering to complex color
patterns on apparel. Oneita s T-shirts, in management s opinion, are of high
quality because they are heavy in weight, have fullercut specifications and
long-lasting construction features such as shoulder-to-shoulder taping and a
seamless tubular collar design.
Oneita introduced sweatshirts in 1991 to its activewear line under the
Oneita Power-Sweats label. The company sells sweatshirts to the same
customers to whom it sells T-shirts and believes that its ability to do so
may result in stronger relationships with such customers and the addition
of new customers for both T-shirts and sweatshirts. Historically, Oneita's
business has been seasonal with respect to T-shirt sales to the extent that
approximately 50% of annual T-shirt sales have been in the March through July
period. Sweatshirts provide a seasonal balance for Oneita since its customers
tend to stock higher levels of T-shirts in the spring and summer months and
higher levels of sweatshirts in the fall and winter months.
The Company sells activewear through in-house salespersons to
approximately 300 customers located throughout the United States, including
60 distributors and also to major screenprinters, which accounted for sales of
$104.1 million and $27.0 million respectively in 1993, and $128.3 million and
$22 million respectively in 1994. The Company also sells activewear to
distributors in Europe, Canada and the Pacific Rim. Such sales accounted for
approximately $5.7 million and $1.9 million of net sales in 1993 and 1994,
respectively. The Company intends to expand its markets and geographic
distribution by, among other things, increasing sales in these regions.
Based upon an industry marketing study, the Company estimates that the
T-shirt market exceeds $1.6 billion in sales annually and believes it is the
fourth largest manufacturer of imprinted T-shirts in the United States. The
market for T-shirts for the screen printing industry is very competitive and
is based upon quality, service, price, availability of product and name
recognition. Oneita s primary competitors, Fruit of the Loom, Inc., Russell
Corporation and Hanes (a subsidiary of Sara Lee Corporation) are larger, have
substantially greater resources and account for a majority of the T-shirt
market. Oneita believes that it competes favorably in quality, price, customer
service and availability of product. However, if the dominant T-shirt
manufacturers increase their manufacturing capacity substantially or reduce
prices, Oneita's sales may be adversely affected. Oneita s ability to compete
may be adversely affected by an increase in yarn prices since, unlike certain
of its competitors, Oneita does not spin its own yarn. Oneita believes that
foreign competition does not have a material effect on the sale of activewear.
During 1993, Oneita and certain of its competitors announced T-shirt price
decreases. Oneita s announced net price decreases aggregated approximately 4%
over 1993. In July 1994, Oneita and other competitors announced T-shirt price
increases of approximately 4% over existing prices.
<PAGE> 3
During 1994, Oneita expanded its Power/50 Plus line (a premium T-shirt
comprised of 60% cotton and 40% polyester), enhanced its PFD T-shirt
collection (an all-cotton shirt that is re-dyed by customers) and also
introduced a new T-shirt, the Power Rib-T.
Infantswear. Historically, Oneita manufactured and sold private label
cotton and cotton blend layette and playwear for infants and toddlers.
Layette is apparel for newborns, and playwear is apparel for infants and
toddlers up to 35 months. In 1986, Oneita began to manufacture and market
higher priced infantswear under its own brand name, Soupcon. In 1988,
Oneita introduced toddlerswear. In 1993 and 1994, net sales of infantswear and
toddlerswear under the Company s own brand names accounted for approximately
57% and 38%, respectively, of its total infantswear sales.
Oneita has an exclusive license agreement with Health-tex, Inc. to
manufacture and market the Health-tex lines of layette products in the United
States and its territories. This license agreement has been renewed through
September 1997 with three three-year extension options remaining. Oneita also
has a license agreement to manufacture and market a layette line under the
Mother Goose & Company trademark. This license agreement expires on March 30,
1997, subject to two three-year renewals, and requires certain minimum
royalty payments. Pursuant to this license agreement, Oneita provides a
layette line to Kmart, a leading retailer.
Oneita sells its private label infantswear and its Health-tex products
to substantially all of the major department store chains and its Soupcon
products to higher priced department and specialty stores. ONEITA'S KIDS
products are sold primarily to chain stores and moderately priced retailers.
Oneita has redirected its infantswear sales efforts by de-emphasizing
small orders and higher priced playwear and concentrating on sales of layette
and basic infantswear to larger customers, including mass merchandisers. The
Company markets infantswear primarily through in-house salespeople. Oneita also
displays its products at infantswear trade shows and advertises in trade
magazines to maintain and improve brand name recognition.
The infantswear market is highly competitive and consists of companies,
including William H. Carter, Gerber Products Company and Oshkosh B' Gosh,
Inc. which are larger and have substantially greater market share and resources
than the Company. The Company believes that it competes favorably with other
manufacturers of private label products as well as with other manufacturers
of high quality brand name infantswear on the basis of quality, service, price
and availability of product.
MANUFACTURING
The Company's historical strategy has been to increase cost efficiencies
through operating its facilities at maximum capacity and, from time to time,
using outside contractors to meet customer demand surges. In addition, the
Company has an on-going program to upgrade its manufacturing equipment and
add technologically advanced manufacturing equipment. Since 1989, the Company
has added approximately $46 million of machinery and technologically advanced
equipment. This program is intended to result in higher production levels and
increased manufacturing efficiencies. In November 1994 the Company announced
a $16,000,000 capital expenditure program that calls for expansion of its
textile manufacturing facilities, including knitting, bleaching and dyeing.
The Company s manufacturing operations consist of knitting, bleaching and
dyeing, cutting and sewing and packaging. The Company s operations begin with
raw yarns. The yarn is then knit into three basic fabric constructions
(jersey, rib and interlock) from which the Company produces its products. The
knitted fabric is batched in lots for bleaching or scoured for dyeing in a
variety of both pressure and atmospheric vessels for color, consistency and
quality. The fabric is then brought to finishing. The finishing operation
sets the width and length and pre-shrinks the fabric. The finished fabric
lots are then transported to a cutting operation which cuts specific garment
parts such as sleeves, collars, cuffs and bodies for sewing. The cut parts
are then sewn together in an assembly line. Various sewing threads, stitches,
trims and colors are mixed and matched for desired styling. The finished
garments are inspected, folded and packaged. Quality assurance systems are
utilized in checking raw materials, in-process controls and finished products.
In fiscal 1993, in connection with its restructuring program, the Company
closed three manufacturing facilities. The Company s nine remaining
manufacturing facilities are located in South Carolina, North Carolina,
Alabama, Jamaica and Mexico. The facilities in Jamaica and Mexico are
provided with cut fabric for T-shirts and are used for sewing operations.
In 1994, approximately 40% of the Company s T-shirts were sewn in Jamaica and
Mexico.
In December 1994, the Company announced the consolidation of Activewear
distribution from five warehouse locations in South Carolina to one warehouse
in Atlanta, Georgia. The consolidation, as well as new state of the art
material handling equipment, is expected to reduce the costs of transporting
goods to and from our sewing facilities, reduce the cost of transportation
for our customers and reduce lead times.
<PAGE> 4
SALES TO MAJOR CUSTOMERS
Net sales to the Company s ten largest customers for the year ended
September 30, 1994 accounted for approximately 52% of the Company's total
sales for such period. Two customers, distributors of Activewear for screen
printing, accounted for approximately 16% and 11%, respectively, of total
net sales for 1994. Net sales to the Company's five largest activewear
customers for 1994 accounted for approximately 40% of the Company s total net
sales. Net sales to the Company s five largest infantswear customers for 1994
accounted for approximately 10% of the Company's total net sales.
EFFECT OF IMPORTS
Current United States quotas and tariffs restrict the number and increase
the cost of apparel items foreign producers can export to the United States.
Foreign competitors, whose chief competitive advantage is low labor cost, tend
to focus on items with high labor content, such as higher priced sportswear.
Oneita's products are not as labor intensive as such other manufactured
apparel and, the Company believes, are less sensitive to foreign competition.
In November 1993, the United States Congress approved the North American
Free Trade Agreement ("NAFTA"), which will eliminate barriers to imports
between the United States, Canada and Mexico over a ten (10) year period. In
December 1993, the Uruguay round of negotiations under the auspices of the
General Agreement on Tariffs and Trade("GATT") was concluded. Recently
ratified by Congress, GATT will require that quotas on apparel and textile
products are to be phased out over a ten (10) year period and tariffs on such
products are to be reduced by approximately 11% over a ten (10) year period.
The Company is unable to determine at this time what effect, if any, changes
resulting from NAFTA and GATT may have on its business, operations or
financial condition.
RAW MATERIALS
The principal raw materials used in the Company s products are cotton yarn
and blend yarns. The bulk of this yarn is obtained from multiple suppliers
within a 300-mile radius of the Company s fabric knitting plant. The prices of
cotton yarn fluctuate from time to time. The Company has entered into supply
contracts for cotton yarn, generally at fixed prices with various expiration
dates through December 1995. As these contracts expire, the Company will be
required to purchase cotton yarn at the current market prices which may be
higher than current contract prices.
Other raw materials, such as chemicals, dyes and packaging materials, are
purchased on the open market. The sources and availability of these materials
are believed to be adequate to meet present needs.
BACKLOG
The Company s backlog of unfilled orders was approximately $52 million
at September 30, 1994, compared with approximately $43 million at September
30, 1993. The amount of unfilled orders at a particular time is affected by a
number of factors, including the scheduling of manufacturing and product
shipping, which in some instances is dependent on the desires of the
customer. Accordingly, the amount of unfilled orders may not be indicative of
eventual actual shipments. The Company expects to ship substantially all of
its September 30, 1994 backlog of unfilled orders by September 30, 1995.
TRADEMARKS AND LICENSES
The Company has registered the Oneita Power-T, Oneita Power/50 Plus,
Soupcon, ONEITA'S KIDS, Oneita Power-Sweats, trademarks and certain other
trademarks. The expiration dates of these trademarks range from July 2006
to December 2008. The loss of certain of these trademarks would have a
material adverse effect upon the Company's business.
EMPLOYEES
As of September 30, 1994, the Company had approximately 3,400 full time
employees, including 3,140 in manufacturing, 60 in marketing and sales and
200 in general management and administration.
Approximately 600 of the Company s manufacturing employees are covered by
a collective bargaining agreement with the Amalgamated Clothing and Textile
Workers Union which expires in October 1995. The Company considers its
employee relations to be satisfactory.
<PAGE> 5
EXECUTIVE OFFICERS OF THE REGISTRANT
As of September 30, 1994, the executive officers of the Company were as
follows:
Served as
Officer
Name Age Since Positions and Offices
- ----------------------------------------------------------------------------
Robert M. Gintel 66 1993 Chairman of the Board
Albert Fried, Jr. 64 1994 Vice Chairman of the Board
Herbert J. Fleming 48 1984 President
Joe E. Brinson 46 1989 Executive Vice President-
Operations
James L. Ford 54 1994 Executive Vice President-Finance
and Chief Financial Officer
J. Roger Holland 54 1994 Executive Vice President-Sales
and Marketing
Mary-beth Boughton 52 1992 Vice President-Merchandising-
Retail
James O. Bowers 46 1987 Vice President-Strategic Planning
William H. Boyd 47 1986 Vice President-Administration
and Treasurer
David W. Holtz 47 1988 Vice President-Retail Sales
E. Franklin Impson, Jr. 36 1994 Vice President and Controller
William K. King 35 1994 Vice President-Chief Information
Officer
Jackie S. Powers 58 1988 Vice President-Activewear Sales
Edward I. Kramer 60 1986 Secretary
Item Two - Properties
As of September 30, 1994, the Company occupied approximately 1,048,406
square feet of manufacturing, general office and warehouse space at its
facilities in South Carolina, North Carolina, Alabama, Mexico, Jamaica and New
York. Approximately 198,406 square feet are under real estate leases with
aggregate minimum annual rental commitments of approximately $1,004,514. Set
forth below is a summary of the facilities owned or leased by the Company.
Location Primary Use Square Feet
- -----------------------------------------------------------------------------
Charleston, S.C. Executive Offices 23,406 (a)
Andrews, S.C.
(2 locations) Manufacturing/Distribution 385,000
Cullman, Ala.
(2 locations) Manufacturing/Distribution 177,000
Fayette, Ala. Manufacturing 212,000
Kinston, N.C. Manufacturing 114,000 (b)
Fingerville, S.C. Manufacturing 76,000
Juarez, Mexico Manufacturing 28,000 (c)
Montego Bay, Jamaica Manufacturing 25,000 (d)
New York, N.Y. Sales and Marketing 8,000 (e)
________________
[FN]
(a) Premises are leased through September 1, 2000 at an annual rental of
$326,514 per year. The Company has an option to renew in five (5) years.
(b) Premises are leased through April 30, 1998 at an annual rental of $285,000
per year. The Company has an option to purchase the premises for
$2,500,000, exercisable at any time prior to expiration of the lease.
(c) Premises are leased through October 1, 1999 at an annual rental of
$150,240. The Company has an option to purchase the premises for
$900,000, or it may renew the lease at the end of the lease term.
(d) Premises are leased through November 30, 1997 at an annual rental of
$36,000.
(e) Premises are leased on a month-to-month basis at an annual rental of
$186,000.
________________
The Company believes that its facilities and equipment are well maintained and
are sufficient to meet current production levels and that its facilities are
sufficient to meet anticipated sales and growth through 1995.
Item Three - Legal Proceedings
There are no material pending legal proceedings.
Item Four - Submission of Matter to a Vote of the Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year.
<PAGE> 6
PART II
Item Five - Market for Registrant s Common Equity
and Related Stockholder Matters
The Company s Common Stock is listed for trading on the New York Stock
Exchange under the symbol "ONA". As of November 30, 1994, there were
approximately 200 holders of record of the Company s Common Stock. The
following table shows for the periods indicated the quarterly range in the high
and low sales prices for these securities.
<TABLE>
<CAPTION>
1994 1993
High Low High Low
----------------- -----------------
<S> <C> <C> <C> <C>
Fiscal Period
First Quarter . . . . . . . $8 3/8 $6 1/4 $15 3/8 $11 1/4
Second Quarter. . . . . . . 7 3/4 6 3/8 17 3/8 9 1/4
Third Quarter . . . . . . . 9 1/4 6 5/8 11 1/4 7
Fourth Quarter. . . . . . . 11 1/8 8 7/8 8 1/2 5 7/8
</TABLE>
No cash dividends have been paid since the Company s initial public offering.
See Note 3 to Notes to Consolidated Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources.
Item Six - Selected Financial Data
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operations
Net sale. . . . . . . . $193,459,000 $177,610,000 $203,517,000 $150,995,000 $140,386,000
Cost of goods sold. . . 166,051,000 152,776,000 168,512,000 126,767,000 112,945,000
Interest expense net. . 3,868,000 4,388,000 4,179,000 3,481,000 2,183,000
Income (loss) before
income taxes. . . . . (6,794,000) (4,609,000) 13,174,000 6,597,000 10,064,000
Income taxes. . . . . . 27,000 (1,632,000) 5,348,000 2,780,000 4,025,000
Net income (loss) . . . (6,821,000) (2,977,000) 7,826,000 3,817,000 6,039,000
Financial data
Inventories . . . . . . $44,720,000 $ 63,086,000 $ 60,078,000 $ 43,735,000 $ 38,283,000
Accounts receivable . . 35,757,000 28,718,000 39,957,000 23,220,000 19,951,000
Depreciation, amortization
and goodwill write-off
(see note below) 11,443,000 4,266,000 4,150,000 3,509,000 2,720,000
Working capital . . . . 60,885,000 84,361,000 69,623,000 54,026,000 51,783,000
Long-term debt and capital
lease obligation . . . 17,133,000 47,228,000 27,338,000 31,838,000 33,723,000
Shareholders equity. . . 76,022,000 82,822,000 85,016,000 62,091,000 58,219,000
Total assets . . . . . . 120,917,000 149,266,000 148,818,000 115,813,000 111,973,000
Common stock data
Net income (loss) per
share. . . . . . . . . $ (.98) $ (.43) $ 1.24 $ .68 $ 1.06
Book value per share . . $ 10.92 $ 11.90 $ 13.06 $ 12.25 $ 12.08
Number of common
shares outstanding . . 6,961,000 6,957,000 6,508,000 5,070,000 4,820,000
</TABLE>
[FN]
Net loss for fiscal 1994 and 1993 included an after-tax loss of $2,519,000 and
$4,700,000, respectively, for a restructuring charge as described in Note 6.
Net loss for fiscal 1994 included a $6,651,000 write-off of goodwill. See
Note 1.
<PAGE> 7
Item Seven - Management s Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
1994 Compared to 1993
Net sales of the Company in 1994 were $193,459,000 as compared to
$177,610,000 in 1993, an increase of $15,849,000 or 8.9%.
Net sales of activewear were $157,061,000 in 1994 as compared to
$141,358,000 in 1993, an increase of $15,703,000 or 11.1%. Net sales of
T-shirts and sweatshirts in 1994 increased by $9,209,000 and $6,494,000,
respectively, over 1993. These increases were principally due to increased
unit sales of T-shirts of 10.1% and sweatshirts of 62.7% partially offset by
lower prices and the $6,242,000 cost of the Company s rebate and other
promotional programs.
Net sales of infantswear were $36,398,000 in 1994 as compared to
$36,252,000 in 1993, an increase of $146,000 or 0.4%.
Gross profit for 1994 was $27,408,000, an increase of $2,574,000 or 10.4%
over 1993. Such increase was attributed principally to increased unit sales
of all products. Gross profit as a percentage of net sales increased to
14.2% for 1994 compared to 14.0% for 1993. Such increase was principally
attributed to lower manufacturing costs offset by lower prices and customer
rebates.
Selling, general and administrative expenses for 1994 increased $2,048,000
or 11.7% over 1993 primarily due to higher advertising ($880,000),
professional ($350,000) and health insurance ($700,000) expenses.
Interest expense, net of interest income for 1994 was $3,868,000 compared
to $4,388,000 for 1993. The reduction was due primarily to lower average
borrowings.
Net loss for fiscal year 1994 was $6,821,000 compared to a net loss of
$2,977,000 for fiscal 1993. During 1994, the Company changed its accounting
method for evaluating the impairment of intangible assets from a recoverability
through future operations method to a fair value method. As a result of this
change, the Company has written-off $6,651,000 of goodwill during the fourth
quarter ended September 30, 1994. The results for the year ended September
30, 1994 also include a pretax charge of $4,080,000 for the write-down of
facilities to their fair market value (non-cash charges aggregating
$2,739,000) that the Company intends to sell or abandon after usable machinery
and equipment is redeployed, and the transitional costs related to the
reorganization of certain administrative functions (a $397,000 non-cash
write-off of leasehold improvements at a sales office and $944,000 of cash
expenses). The write-downs of these facilities were associated with the
Company's reorganization of its Retail Division and consolidation of
distribution and manufacturing facilities in order to improve productivity
and customer service, reduce transportation costs and cut lead times. The
results for the year ended September 30, 1993 include a $7,500,000 pretax
charge to streamline and consolidate manufacturing operations which resulted
in reduced operating costs in fiscal 1994 of approximately $4,000,000,
consisting of approximately $1,500,000 of reduced employee expenses,
approximately $1,000,000 of reduced transportation costs and approximately
$1,500,000 resulting from more efficient utilization of manufacturing
facilities.
1993 Compared to 1992
Net sales of the Company in 1993 were $177,610,000 as compared to
$203,517,000 in 1992, a decrease of $25,907,000 or 12.7%. The decrease was
due to generally weak economic conditions that caused a reduction in planned
deliveries, order cancellations and price-cutting by the leading
manufacturers. T-shirt price increases implemented in January 1993 were
rolled back in April 1993 to match competition, reflecting high customer
inventory levels and industry-wide overcapacity. As a result, a $7,500,000
pretax restructuring charge to streamline and consolidate manufacturing
operations was recorded in the 1993 third quarter. The restructuring charge
included the costs of equipment relocation, a permanent reduction of
approximately 500 jobs, staff retraining and transitional employee salaries
and benefits. The Company s restructuring program is intended to result in
lower future manufacturing costs. Of this $7,500,000 pre-tax charge,
$325,000 related to the non-cash write-down of the value of a sewing facility
to its fair market value, and the remaining $7,175,000 consisted of cash
payments, approximately $5,875,000 of which was expended in fiscal 1993 and
approximately $1,300,000 of which was expended in fiscal 1994.
Net sales of activewear were $141,358,000 in 1993 as compared to
$156,098,000 in 1992, a decrease of $14,740,000 or 9.4%. Net sales of
T-shirts and fleecewear in 1993 decreased by $1,473,000 and $13,267,000
respectively from 1992. The fleece decrease was principally due to reduced
unit sales for the reasons discussed above.
<PAGE> 8
Net sales of infantswear were $36,252,000 in 1993 as compared to
$47,419,000 in 1992, a decrease of $11,167,000 or 23.5%. The reduced sales
are principally the result of lower unit sales due to the continuing weak
economy and reduced customer demand for the higher priced playwear lines
caused by increased competition including promotional pricing. Gross profit
for 1993 was $24,834,000, a decrease of $10,171,000 or 29.1% from 1992. Gross
profit as a percentage of net sales decreased to 14.0% for 1993 compared to
17.2% for 1992. The reductions were principally due to the effect of the
lower sales levels, production cut backs and resultant increases in
manufacturing costs. Additionally, certain infant fashion playwear
inventories were disposed of at prices less than normal selling prices.
In September 1993, responding to an industry-wide price reduction, T-shirt
prices were further reduced by 4%. While this price reduction is expected
to have an adverse effect on earnings in 1994, profitability is expected to
improve in 1994 due to lower manufacturing costs resulting from the
restructuring discussed above.
Selling, general and administrative expenses remained relatively constant
for the year ended September 30, 1993 compared to 1992.
Interest expense, net of interest income, for 1993 was $4,388,000 compared
to $4,179,000 for 1992. The favorable impact of declining interest rates was
offset by interest costs from higher average short-term and long-term
borrowings compared to last year. The higher borrowings resulted from greater
working capital requirements including higher levels of inventory.
LIQUIDITY AND CAPITAL RESOURCES
Working capital was $60,885,000 at September 30, 1994 compared to
$84,361,000 at September 30, 1993. The decrease in working capital was
principally caused by inventory reductions and the pay-down of $25,000,000 of
long-term debt under the Company s March 1993 revolving loan agreement.
Cash funds used in the pay-down were generated from operations, primarily
from a reduction in inventories. The Company presently has available
$27,500,000 under uncommitted bank lines available for working capital
purposes which provide for interest at below the lending banks prime rates
and are repaid at twelve-month intervals. These bank lines of credit provide
for payment of outstanding indebtedness on demand and are subject to
continuing review based upon the Company s financial condition. During fiscal
1994, the maximum amount outstanding under these lines was $10,000,000 and
no borrowings were outstanding as of September 30, 1994. In addition, the
Company currently has a $25,000,000 bank credit facility available for capital
expenditures which provides for interest at approximately the lending banks'
prime rates and becomes due between 1997 and 2000. See Note (3) to the
Company's Consolidated Financial Statements for the fiscal year ended September
30, 1994. At September 30, 1994, there were no borrowings outstanding under
this $25,000,000 bank credit facility. The Company also has a factoring
agreement under which certain of its accounts receivable are sold to the factor
without recourse. The Company draws advances on the sold accounts and pays
interest at the prime rate for these advances.
The Company has financed and expects to continue to finance the addition
of new property and equipment, including without limitation the $16,000,000
capital expenditure program relating to its Fayette, Alabama facility and its
ongoing annual capital expenditures of approximately $11,000,000, through
equipment leases, restricted funds from Industrial Development Revenue Bonds,
funds generated from operations and, to the extent necessary, borrowings under
its existing $25,000,000 credit facility or new credit facilities.
The Board of Directors has authorized the purchase of up to 350,000 shares
of its Common Stock. Purchases will be made from time to time, depending on
market conditions, at prices deemed appropriate by management. The Company
believes that purchasing its common stock is an appropriate use of its funds.
It is anticipated that working capital and internally generated funds, to
the extent available, will provide sufficient liquidity to pay future amounts
due on maturities of long-term debt, capital leases and operating lease rental
commitments. These maturities aggregate approximately $9,974,000 in 1995.
The Company believes that its working capital and bank lines are sufficient
to meet its liquidity needs over the next twelve months. At September 30, 1994,
approximately $3,000,000 was available for cash dividends and distributions on
the Company's stock pursuant to a loan agreement.
Effective October 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes", which had no
material effect on the Company's reported financial position or results of
operations.
EFFECTS OF INFLATION
The company believes that the relatively moderate rates of inflation in
recent years have not had a significant impact on its sales and profitability.
<PAGE> 9
Item Eight - Financial Statements and Supplementary Data
The financial statements and supplementary data listed in the accompanying
Index to Financial Statements and Schedules are attached as part of this report.
Item Nine - Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
--------------------------------------
The information required by Part III is incorporated by reference to the
Company s definitive proxy statement in connection with its Annual Meeting
of Stockholders scheduled to be held in February, 1995, to be filed with the
Securities and Exchange Commission within 120 days following the end of the
Company's fiscal year ended September 30, 1994. Information relating to the
executive officers of the Registrant appears under Item I of this report.
<PAGE> 10
PART IV
--------------------------------------
Item Fourteen - Exhibits, Financial Statement Schedules and Reports on Form
10-K
(a) Financial Statements:
See Index to Consolidated Financial Statements and Schedules at page F-1.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by Registrant in the last quarter of the
year covered by this report.
(c) Exhibits:
3.1 Certificate of Incorporation (Exhibit 3(a) of Form S-1 Registration
Statement No. 33-16972)
3.2 By-Laws as amended (Exhibit 3.1 of Form 10-Q for the quarter ended
March 31, 1994)
4.1 Factoring Agreement dated April 1, 1979, as amended, between
Registrant and a lending institution
(Exhibit 4(b) of Form S-1 Registration Statement No. 33-16972)
10.1 Stock Option Plan (Exhibit 10(a) of Form S-1 Registration Statement
No. 33-16972)
10.2 1989 Non-Qualified Stock Option Plan (Exhibit 10.2 of Annual Report
on Form 10-K for the year ended September 30, 1990)
10.3 Lease Agreement dated as of October 1, 1987, between the Registrant
and Instrument Systems Corporation (Exhibit 10(d) of Form S-1
Registration Statement No. 33-16972)
10.4 Employment Agreement between the Registrant and Herbert J. Fleming,
as amended (Exhibit 10.2 of Current Report on Form 8-K dated January
1, 1994)
10.5 Employment Agreement between Registrant and J. Roger Holland (Exhibit
10.4 of Form 10-Q for the quarter ended March 31, 1994)
10.6 Variable Amount of Grid Note Agreement dated March 31, 1994, between
Registrant and First Union National Bank of South Carolina (Exhibit
10.1 of Form 10-Q for the quarter ended March 31, 1994)
10.7 Promissory Note dated September 30, 1994, between Registrant and
National Westminster Bank, USA
10.8 Single Payment Note dated February 28, 1994, between Registrant and
Trust Company Bank (Exhibit 10.3 of Form 10-Q for the quarter ended
March 31, 1994)
10.9 Equipment Lease Agreement dated as of May 16, 1988, between
Registrant and NEMLC Leasing Associates No. 3 (Exhibit 10(k) of
Form S-1 Registration Statement No. 33-22488) amended as of December
1, 1988, and May 19, 1989 (Exhibit 10.11 of Annual Report on Form
10-K for the year ended September 30, 1990)
10.10 Note Agreement dated as of December 20, 1988, between Registrant and
an institutional lender (Exhibit 10.10 of Annual Report on Form 10-K
for the year ended September 30, 1988)
10.11 License Agreement dated October 24, 1988, between Registrant and
Health-tex, Inc. (Exhibit 10(k) of Form S-1 Registration Statement
No. 33-30810)
10.12 Letter of Credit Agreement dated as of October 1, 1989, between the
Registrant and Trust Company Bank (Exhibit 10.12 of Annual Report on
Form 10-K for the year ended September 30, 1989)
10.13 Lease Agreement dated as of October 1, 1989, between the Registrant
and the Industrial Development Board of the City of Fayette, Alabama
(Exhibit 10.13 of the Annual Report on Form 10-K for the year ended
September 30, 1989)
10.14 Guaranty Agreement dated as of October 1, 1989, between the
Registrant and Trust Company Bank (Exhibit 10.14 of Annual Report
on Form 10-K for the year ended September 30, 1989)
10.15 Form of Indemnification Agreement between Registrant and its officers
and directors (Exhibit 28 to Current Report on Form 8-K dated July
30, 1991)
10.16 License Agreement dated as of February 1, 1991, between Registrant
and Henson Associates, Inc. (Exhibit 10.18 of Form S-2 Registration
Statement No. 33-46119)
10.17 Loan Agreement dated as of March 26, 1993, between Registrant and
National Westminster Bank, USA and Trust Company Bank (Exhibit
10.18 of Annual Report on Form 10-K for the year ended September
30, 1993)
10.18 Amendment to Loan Agreement dated March 26, 1993 between Registrant
and National Westminster Bank and Trust Company (Exhibit 10.6 of
Form 10-Q for the quarter ended March 31, 1994)
10.19 License Agreement dated as of August 31, 1993, between Registrant
and Kessler Marketing Group, Inc. (Exhibit 10.19 of Annual Report on
Form 10-K for the year ended September 30, 1993)
10.20 Modification to Management Services Contract dated February 5, 1993
(Exhibit 28 to Current Report on Form 8-K dated January 1, 1993)
10.21 Registration Rights Letter Agreement between Gintel & Co. Limited
Partnership (Exhibit 10 to Current Report on Form 8-K dated October
6, 1993)
10.22 Letter Agreement dated October 5, 1993, between Gintel & Co. Limited
Partnership and Instrument Systems Corporation (Exhibit 2 to Current
Report on Form 8-K dated October 6, 1993)
<PAGE> 11
10.23 Amendment to Lease Agreement dated as of October 1, 1987, between
Registrant and Instrument Systems Corporation (Exhibit 10.24 of
Annual Report on Form 10-K for the year ended September 30, 1993)
11 Computation of Earnings Per Share*
18 Letter re change in accounting principles*
22 The following lists the Company s significant subsidiaries, all of
which are wholly-owned by the Company. The names of certain
subsidiaries which do not, when considered in the aggregate,
constitute a significant subsidiary have been omitted.
Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------
Oneita-Kinston Corp. North Carolina
Strathleven Limited Jamaica
Oneita Mexicana S.A. de C.V. Chihuaha, Mexico
23 Consent of Arthur Andersen LLP*
28 Additional Exhibit
- ------------------------
[FN]
* Filed herewith
The following undertakings are incorporated into the Company s Registration
Statements on Form S-8 (Registration Statement No. 33-30575 and 33-34778)
and Form S-3 (Registration Statement No. 33-70524).
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1993;
(ii) To reflect in the prospectus any fact or events arising after the
effective date of the registration statement (or most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant s annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of any employee benefit plan s annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall
be deemed to be the initial bona fide offering thereof.
(i) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE> 12
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on the 1st day
of March, 1995.
Oneita Industries, Inc.
By:/s/ Herbert J. Fleming
-------------------------
Herbert J. Fleming
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on March 1, 1995 by the following persons in the
capacities indicated:
Signatures Title
/s/ Robert M. Gintel Chairman of the Board
- ---------------------------
Robert M. Gintel
/s/ Albert Fried, Jr. Vice Chairman of the Board
- ---------------------------
Albert Fried, Jr.
/s/ Herbert J. Fleming President and Director
- ---------------------------
Herbert J. Fleming (Principal Executive Officer)
/s/ James L. Ford Executive Vice President of Finance
- ---------------------------
James L. Ford (Principal Financial and Accounting
Officer)
/s/ Meyer A. Gross Director
- ---------------------------
Meyer A. Gross
/s/ John G. Hudson Director
- ---------------------------
John G. Hudson
/s/ H. Varnell Moore Director
- ---------------------------
H. Varnell Moore
/s/ Lewis Rubin Director
- ---------------------------
Lewis Rubin
<PAGE> F-1
Index to Consolidated Financial Statements ONEITA INDUSTRIES, INC.
and Schedules
(Information required by Part III, Item 8 of Form 10-K)
- -----------------------------------------------------------------------------
Page
Report of Independent Public Accountants F-2
Financial Statements
Consolidated balance sheets-September 30, 1993
and 1994 F-3
Consolidated statements of operations for the
three years ended September 30, 1994 F-4
Consolidated statements of cash flows for the
three years ended September 30, 1994 F-5
Consolidated statements of stockholders equity
for the three years ended September 30, 1994 F-6
Notes to consolidated financial statements F-7
Financial Statement Schedules
Schedule V Property, Plant and Equipment F-11
Schedule VI Accumulated Depreciation F-12
Schedule VIII Valuation and Qualifying Accounts F-13
[FN]
Other schedules are omitted as they are not applicable or required
under the rules of Regulation S-X.
<PAGE> F-2
Report of Independent Public Accountants
To Oneita Industries, Inc:
We have audited the accompanying consolidated balance sheets of Oneita
Industries, Inc. (a Delaware corporation) and subsidiaries as of September
30, 1994 and 1993, and the related consolidated statements of operations,
cash flows, shareholders' equity for each of the three years in the period
ended September 30, 1994. These financial statements and the schedules
referred to below are the responsibility of the Company s management. Our
responsibility is to express an opinion on these financial statements and
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, e
vidence 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, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Oneita
Industries, Inc. and subsidiaries as of September 30, 1994 and 1993 and the
results of their operations and their cash flows for each of the three years
in the period ended September 30, 1994, in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the consolidated financial statements, effective
September 30, 1994, the Company changed its method of evaluating the
impairment of its goodwill and related intangibles.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedules listed in
the index to consolidated financial statements and schedules are presented for
purposes of complying with the Securities and Exchange Commission s rules and
are not a required part of the basic financial statements. These schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Columbia, South Carolina
November 11, 1994
<PAGE> F-3
<TABLE>
<CAPTION>
Consolidated Balance Sheets ONEITA INDUSTRIES, INC.
September 30,
1994 1993
---- ----
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents . . . . $ 967,000 $ 6,716,000
Refundable income taxes . . . . . --- 2,000,000
Accounts receivable, less allowance
of $1,006,000 in 1994 and
$1,024,000 in 1993 for doubtful
accounts (Note 3) . . . . . . . 35,757,000 28,718,000
Inventories (Note 1) . . . . . . 44,720,000 63,086,000
Prepaid expenses and other current
assets. . . . . . . . ... . . . 4,963,000 1,153,000
Total current assets. . . . . . . 86,407,000 101,673,000
Property, plant and equipment,
at cost, net of depreciation
and amortization (Note 1) . . . . 30,435,000 32,875,000
Funds restricted for capital projects
(Note 3). . . . . . . . . . . . 2,342,000 6,024,000
Goodwill (Note 1) . . . . . . . . 435,000 7,324,000
Deferred charges and other assets 1,298,000 1,370,000
------------ ------------
$120,917,000 $149,266,000
Liabilities and Shareholders Equity
Current Liabilities:
Current portion of long-term debt
and capital leases (Note 3) . . $ 5,377,000 $ 4,935,000
Accounts payable. . . . . . . . . 10,485,000 4,830,000
Accrued liabilities (Note 2). . . 9,660,000 7,547,000
------------ ------------
Total current liabilities . . . 25,522,000 17,312,000
Long-term debt and capital lease
obligations (Note 3). . . . . . 17,133,000 47,228,000
Deferred income taxes (Note 1). . 2,240,000 1,904,000
Commitments (Note 8)
Shareholders Equity (Note 4):
Preferred Stock, $1.00 par value,
2,000,000 shares authorized,
none issued . . . . . . . . . . --- ---
Common Stock, $.25 par value,
authorized 15,000,000 shares
outstanding 6,960,821 shares in
1994 and 6,956,567 in 1993. . . 1,740,000 1,739,000
Capital in excess of par value. . 69,202,000 69,182,000
Retained earnings.. . . . . . . . 5,080,000 11,901,000
------------- -------------
76,022,000 82,822,000
------------- -------------
$120,917,000 $149,266,000
</TABLE>
[FN]
The accompanying Notes to Consolidated Financial Statements are an integral
part of these balance sheets.
<PAGE> F-4
<TABLE>
<CAPTION>
Consolidated Statements of Operations ONEITA INDUSTRIES, INC.
Years Ended September 30,
1994 1993 1992
---- ---- ----
<C> <C> <C> <C>
Net sales (Note 7). . . . . . $193,459,000 $177,610,000 $203,517,000
Cost of goods sold. . . . . . 166,051,000 152,776,000 168,512,000
------------ ------------ ------------
Gross profit. . . . . . . . . 27,408,000 24,834,000 $ 35,005,000
Selling, general and
administrative expenses . . 19,603,000 17,555,000 17,652,000
Consolidation and restructuring
charges (Note 6). . . . . . 4,080,000 7,500,000 ---
Write-off of goodwill (Note 1) 6,651,000 --- ---
------------ ------------ ------------
Income (loss) from operations (2,926,000) (221,000) 17,353,000
Other income (expense):
Interest expense, net of
interest income of $363,000 in
1994, $326,000 in 1993 and
$403,000 in 1992 . . . . . . 3,868,0 00 4,388,000 4,179,000
Income (loss) before income
taxes. . . . . . . . . . . . (6,794,000) (4,609,000) 13,174,000
Provision (benefit) for income
taxes (Note 1):
State and local . . . . . . 8,000 (227,000) 679,000
Federal . . . . . . . . . . 19,000 (1,405,000) 4,669,000
------------ ------------ ------------
27,000 (1,632,000) 5,348,000
------------ ------------ ------------
Net income (loss) . . . . . . $(6,821,000) $(2,977,000) $ 7,826,000
------------ ------------ ------------
Net income (loss) per share
(Note 1). . . . . . . . . . $ (.98) $ (.43) $ 1.24
------------ ------------ ------------
Weighted average number of
shares outstanding. . . . . 6,979,154 6,896,309 6,327,292
------------ ------------ ------------
</TABLE>
[FN]
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE> F-5
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows ONEITA INDUSTRIES, INC.
Years Ended September 30,
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Cash Flows From Operating
Activities:
Net income (loss) . . . . . $ (6,821,000) $ (2,977,000) $ 7,826,000
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization . . . . . . . 4,792,000 4,266,000 4,150,000
Write-off of goodwill. . . 6,651,000 --- ---
Consolidation charges. . . 3,136,000 --- ---
Provision for losses on
accounts receivable . . . (30,000) 106,000 400,000
Increase (decrease) in
deferred income taxes . . 336,000 (96,000) 853,000
(Gain) loss on sale of
property and equipment. . (137,000) (24,000) 8,000
Change in assets and liabilities:
(Increase) decrease in
receivables. . . . . . . (5,009,000) 9,133,000 (17,137,000)
Decrease (increase) in
inventories. . . . . . . 18,366,000 (3,008,000) (16,343,000)
(Increase) decrease in prepaid
expenses and other assets (4,344,000) (12,000) 1,135,000
Increase (decrease) in
accounts payable and
accrued liabilities. . . 7,768,000 (16,864,000) 10,707,000
------------ ------------ ------------
Total adjustments. . . . . . 31,529,000 (6,499,000) (16,227,000)
------------ ------------ ------------
Net cash provided by (used in)
operating activities . . . 24,708,000 (9,476,000 (8,401,000)
------------ ------------ ------------
Cash Flows From Investing Activities:
Proceeds from sale of
property and equipment. . . 213,000 280,000 622,000
Acquisition of property,
plant and equipment . . . . (5,184,000) (7,290,000) (8,325,000)
Decrease (increase) in
equipment lease deposits. . 464,00 (658,000) 1,064,000
Net cash used in investing
activities. . . . . . . . (4,507,000) (7,668,000) (6,639,000)
Cash Flows from Financing Activities:
Short-term borrowings . . . 10,000,000 38,000,000 23,000,000
Payment of short-term
borrowings. . . . . . . . . (10,000,000) (38,000,000) (23,000,000)
Proceeds from issuance of
long-term debt. . . . . . . 282,000 25,000,000 499,000
Sales of Common Stock . . . 21,000 785,000 15,099,000
Decrease (increase) in funds
restricted for capital
projects . . . .. . . . . . 3,682,000 489,000 (76,000)
Payment of long-term debt and
capital lease obligations . (29,935,000) (5,080,000) (1,979,000)
Other. . . . . . . . . . . . --- (244,000) ---
------------ ------------ ------------
Net cash (used in) provided
by financing activities . . (25,950,000) 20,950,000 13,543,000
------------ ------------ ------------
Net (decrease) increase in
cash and cash equivalents. . (5,749,000) 3,806,000 (1,497,000)
Cash and cash equivalents
at beginning of year . . . . 6,716,000 2,910,000 4,407,000
------------ ------------ ------------
Cash and cash equivalents
at end of year . . . . . . . $ 967,000 $ 6,716,000 $ 2,910,000
------------ ------------ ------------
</TABLE>
[FN]
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE> F-6
Consolidated Statements of Shareholders' Equity ONEITA INDUSTRIES, INC.
<TABLE>
<CAPTION>
Common Stock
-----------------------------------------------------------
Capital in
Number Par Excess of Retained
of Shares Value Par Value Earnings
--------- ----- ---------- --------
<S> <C> <C> <C> <C>
BALANCES, as of
September 30, 1991 5,069,672 $1,267,000 $44,214,000 $16,610,000
Net Income --- --- -- - 7,826,000
Sale of Common Stock (Note 1) 1,000,000 250,000 14,175,000 ---
Exercise of stock options 89,583 22,000 612,000 ---
5% stock dividend on
Common Stock 254,022 64,000 4,096,000 (4,160,000)
Other 95,066 24,000 16,000 ---
---------- ---------- ----------- -----------
BALANCES, as of
September 30, 1992 6,508,343 1,627,000 63,113,000 20,276,000
Net los --- --- --- (2,977,000)
Exercise of stock options 119,751 30,000 755,000 ---
5% stock dividend on Common
Stock 328,473 82,000 5,314,000 (5,398,000)
---------- ---------- ----------- -----------
BALANCES, as of
September 30, 1993 6,956,567 1,739,000 69,182,000 11,901,000
Net loss --- --- --- (6,821,000)
Exercise of stock options 4,254 1,000 20,000 ---
---------- ---------- ----------- -----------
BALANCES, as of
September 30, 1994 6,960,821 $1,740,000 $69,202,000 $ 5,080,000
---------- ---------- ----------- -----------
</TABLE>
<PAGE> F-7
Notes to Consolidated Financial Statements
(1) Summary of significant accounting policies:
BASIS OF PRESENTATION -
The consolidated financial statements of Oneita Industries, Inc. (the
Company) include the accounts of the Company and all of its subsidiaries.
All material intercompany accounts and transactions have been eliminated.
CASH FLOWS -
The Company considers all highly liquid debt instruments with an original
maturity of three months or less to be cash equivalents. Cash payments for
interest expense were $4,234,000, $4,813,000 and 4,231,000 for fiscal 1994,
1993, and 1992, respectively. Cash payments for income taxes were $231,000,
$784,000 and $4,766,000 in fiscal 1994, 1993, and 1992, respectively.
INVENTORIES -
Inventories are stated at the lower of cost or market and include
material, labor and manufacturing overhead costs. The Company uses the
last-in, first-out method for valuing most of its inventories with the balance
valued on the first-in, first-out method. No significant change would result
if the Company valued its entire inventory using the first-in, first-out
method. Inventories are comprised of the following:
<TABLE>
<CAPTION>
September 30,
1994 1993
---- ----
<S> <C> <C>
Finished goods $ 31,754,000 $ 47,626,000
Work in process 10,249,000 11,807,000
Raw materials and supplies 2,717,000 3,653,000
------------ ------------
$ 44,720,000 $ 63,086,000
</TABLE>
PROPERTY, PLANT AND EQUIPMENT -
Depreciation of property, plant and equipment is provided primarily on a
straight-line basis over the estimated useful lives of the assets and over
the term of the lease for assets in use under capital leases. Leasehold
improvements are amortized over the life of the lease or life of the
improvement, whichever is shorter.
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
September 30,
1994 1993
---- ----
<S> <C> <C>
Land, buildings and building
improvements $11,965,000 $12,785,000
Machinery and equipment 26,385,000 23,743,000
Leasehold improvements 2,467,000 2,947,000
----------- -----------
40,817,000 39,475,000
Less-accumulated depreciation
and amortization 14,347,000 11,526,000
----------- -----------
26,470,000 27,949,000
Leased property and equipment under
capital leases less accumulated
amortization of $8,419,000 at
September 30, 1994 and $7,459,000
at September 30, 1993 3,965,000 4,926,000
----------- -----------
$30,435,000 $32,875,000
</TABLE>
Fourth quarter results for 1994 include a non-cash pretax charge of
$3,136,000 (included in the restructuring charge discussed in Note 6) related
to asset write-downs and write-offs. Certain assets were evaluated and the
net book value of these assets was adjusted to the estimated fair market
value.
Maintenance and repairs related to the Company s property, plant and
equipment amounted to $2,473,000, $1,975,000 and $2,080,000 for the years
ended September 30, 1994, 1993 and 1992, respectively.
GOODWILL -
During 1994, the Company changed its accounting method for evaluating the
impairment of intangible assets from a recoverability through future
operations method to a fair value method.
As a result of this change, the Company has written-off $6,651,000 of
goodwill during the fourth quarter ended September 30, 1994.
Goodwill at September 30, 1994 and 1993 include costs in excess of net
assets acquired of $435,000 and $7,300,000 respectively, which is net of
accumulated amortization of $89,000 and $1,900,000, respectively. The
goodwill is being amortized on a straight-line basis over 40 years.
INCOME TAXES -
Income tax expense is based on reported income adjusted for differences
that do not enter into the computation of taxes payable under applicable tax
laws. Deferred income taxes are provided for timing differences between
book and taxable income. The primary components of deferred taxes result from
the differences in the reporting of depreciation, inventory valuation and
accruals not currently deductible.
The following table summarizes the provision for federal and state
taxes on income:
<TABLE>
<CAPTION>
Years Ended September 30,
1994 1993 1992
---- ---- ----
<C> <C> <C> <C>
Current:
Federal $1,129,000 $(1,703,000) $4,264,000
State 8,000 (227,000) 679,000
---------- ------------ ----------
1,137,000 (1,930,000) 4,943,000
Deferred:
Federal (1,110,000) 298,000 405,000
State 0 0 0
---------- ------------ ----------
(1,110,000) 298,000 405,000
---------- ------------ ----------
Total tax provision $ 27,000 $(1,632,000) $5,348,000
</TABLE>
The effective income tax rate differs from the United States federal statutory
rate as follows:
<TABLE>
<CAPTION>
Years Ended
September 30,
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
United States federal statutory
rate (benefit) (35.0%) (34.8%) 34.0%
State and local income taxes (0.1) (3.3) 3.4
Goodwill amortization. . . . 35.2 1.8 0.6
Differences between book and
tax basis of assets acquired - (0.2) 1.9
Other. . . . . . . . . . . . 0.3 1.1 0.7
------- ------- -----
0.4% (35.4%) 40.6%
</TABLE>
<PAGE> F-8
Notes to Consolidated Financial Statements
The deferred tax assets and deferred tax liabilities recorded on the
balance sheet as of September 30, 1994 are as follows:
<TABLE>
<CAPTION>
Deferred tax Deferred tax
Assets Liabilities
------------ ------------
<S> <C> <C>
Depreciation and amortization $ --- $2,289,000
Benefit plans 1,101,000 ---
Asset revaluations --- (959,000)
Inventory capitalization/LIFO (650,000) ---
Other 38,000 910,000
----------- ----------
$ 489,000 $2,240,000
</TABLE>
Effective October 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes, which had no
material effect on the Company s reported financial position or results of
operations.
EARNINGS PER SHARE -
Net income per share is calculated using the weighted average number of
shares of Common Stock outstanding during each period, adjusted to reflect
the dilutive effect of shares issuable for stock options and warrants.
RECLASSIFICATION -
Certain prior year amounts have been reclassified in order to conform to
the current year s presentation.
(2) Accrued Liabilities:
At September 30, 1994 and 1993 accrued liabilities included $1,521,000 and
$1,074,000, respectively, for payroll and $1,110,000 and $1,212,000,
respectively, for interest, and $901,000 and $1,373,000, respectively, for
accrued restructuring costs.
(3) Long-term debt and capital lease obligations:
<TABLE>
<CAPTION>
September 30,
1994 1993
---- ----
<S> <C> <C>
Long-term debt
Notes payable to banks $ 0 $25,000,000
Senior promissory notes 13,846,000 16,923,000
Land and building mortgages 921,000 944,000
Capital leases
Industrial development
bonds 7,050,000 8,556,000
Other 693,000 740,000
------------ ------------
22,510,000 52,163,000
------------ ------------
Less current portion 5,377,000 4,935,000
------------ ------------
$17,133,000 $47,228,000
</TABLE>
In March 1993, the Company borrowed $25,000,000 pursuant to a seven-year
loan agreement with two of its banks. The maximum amount available under
the agreement is $25,000,000 through February 1997 with annual reductions
through February 2000. Interest is charged under variable rate options which
approximate the bank s prime rate. The loan agreement contains certain
financial covenant and ratio requirements such as minimum working capital
and net worth and debt to equity and debt coverage as defined. As of September
30, 1994, there were no outstanding borrowings against this loan agreement.
In December 1988, the Company entered into a $20,000,000 loan agreement
with an institutional lender which provides for interest at a fixed rate of
10.84%. The principal is due in semi-annual payments of $1,538,500. The
loan agreement contains certain financial ratio and covenant requirements such
as minimum working capital, debt to equity and debt coverage, as defined, and
stock redemptions and dividend limitations. At October 1, 1994,
approximately $3,000,000 was available for cash redemptions and dividends on
the Company s Common Stock.
The following are maturities of long-term debt outstanding at September
30, 1994 for each of the succeeding five years:
<TABLE>
<S> <C>
1995 . . . . . . . . . . . . $3,806,000
1996 . . . . . . . . . . . . $3,215,000
1997 . . . . . . . . . . . . $3,081,000
1998 . . . . . . . . . . . . $3,081,000
1999 . . . . . . . . . . . . $1,544,000
</TABLE>
In October 1989, the Company entered into a $10,000,000 capital lease
obligation with the Industrial Development Board of the City of Fayette,
Alabama through whom industrial development revenue bonds were issued. The
bonds bear interest and fees at a fixed rate of 8.2% per year. The principal
is due in quarterly payments of $312,500. Proceeds from the issuance of
the bonds are restricted for the related capital expansion program and
$2,342,000 of such proceeds are available at September 30, 1994.
Future minimum payments under capital lease obligations consist of the
following at September 30, 1994:
<TABLE>
<S> <C>
1995 . . . . . . . . . . . . $2,143,000
1996 . . . . . . . . . . . . 1,966,000
1997 . . . . . . . . . . . . 1,871,000
1998 . . . . . . . . . . . . 1,628,000
1999 . . . . . . . . . . . . 1,435,000
Later year . . . . . . . . . . . . 455,000
Total minimum lease
payments . . . . . . . . . . . . 9,498,000
Less amount representing
interest . . . . . . . . . . . . 1,755,000
----------
Present value of net
minimum lease payments
(including current portion
of $1,571,000) . . .. . . . . . . . . . $7,743,000
----------
The Company has a factoring agreement under which certain of its accounts
receivable are sold to the factor without recourse. The Company draws
advances on the sold accounts and pays interest at the prime rate for these
advances.
The Company has bank lines of credit of $27,500,000 which currently
provide for interest at below the prime rate. During fiscal 1994, 1993 and
1992, the maximum amount of short-term borrowings outstanding was
$10,000,000, $38,000,000 and $23,000,000, the average amount outstanding was
<PAGE> F-9
$2,334,000, $16,055,000 and $10,836,000, respectively, and the weighted
average interest rate was 5.2%, 4.9%, and 6.3%, respectively. Average
amounts outstanding were determined by using daily balances and the weighted
average interest rate during the period was computed by dividing the actual
interest expense by the average short-term borrowings outstanding.
(4) Stock options and warrants:
The Company has an Incentive Stock Option Plan (the Option Plan ), which
was approved by the shareholders in 1988, under which 514,652 shares of
Common Stock have been reserved for grants to directors, officers and key
employees. The prices for the shares covered by each option will not be less
than 100% of the fair market value at date of grant. Options expire five
years from the date of grant and become exercisable in installments as
determined by the Board of Directors commencing one year after date of grant.
No charges or credits to income are made with regard to options granted under
the Option Plan.
Transactions under the Option Plan are as follows:
</TABLE>
<TABLE>
<CAPTION>
Number Option
of Shares Price
---------- ------
<S> <C> <C>
Outstanding at
September 30, 1992 247,135 $4.94 to $15.24
Exercised (102,641) $4.94 to $9.15
Terminated ( 28,549) $6.26 to $9.15
---------
Outstanding at
September 30, 1993 115,945 $4.94 to $15.24
Granted 102,400 $6.625 to $7.50
Exercised (4,254) $4.94
Terminated (85,732) $7.20 to $15.24
--------
Outstanding at
September 30, 1994 128,359 $6.26 to $9.15
--------
</TABLE>
The outstanding options expire at various dates through 1999. At
September 30, 1994 options for 28,559 shares are exercisable at $6.26 to
$9.15 per share and there are 189,875 options available for grant.
In 1990, the Company's shareholders approved a Non-Qualified Stock Option
Plan under which 453,876 shares of Common Stock have been reserved for
grants. Options expire five years after date of grant and become exercisable
in installments as determined by the Board of Directors.
Transactions under the Non-Qualified Stock Option Plan are as follows:
<TABLE>
<CAPTION>
Number Option
of Shares Price
---------- ------
<S> <C> <C>
Outstanding at
September 30, 1992 239,651 $6.26 to $15.36
Granted 15,750 $13.45
Exercised (20,246) $6.26 to $ 9.15
Terminated (5,622) $6.26 to $15.36
--------
Outstanding at
September 30, 1993 229,533 $6.26 to $15.36
Granted 114,900 $6.625 to $8.375
Terminated (170,240) $6.625 to $15.36
---------
Outstanding at
September 30, 1994 174,193 $6.26 to $15.36
---------
The outstanding options expire at various dates through 1999. At
September 30,1994, options for 57,893 shares are exercisable at $6.26 to
$15.36 per share and there are 241,265 options available for grant.
In February 1994, the Board of Directors approved the Outside Directors
Stock Option Plan for Oneita Industries, Inc. (the Directors Plan ) under
which 60,000 shares of Common Stock have been reserved for grants to outside
directors. The Directors Plan provides for automatic annual grants of 2,000
options to each outside director except for the initial 3,500 options granted
to each outside director. The price for the shares covered by each option
will not be less than 100% of the fair market value at the date of grant.
Options expire five years from the date of the grant and become exercisable
after the first anniversary of the grant except no options may be exercised
until the shareholders of the Company have approved the Directors Plan.
In February 1994, the Restricted Management Stock Bonus Plan (the Bonus
Plan ) was cancelled by the Board of Directors. No shares were issued under
the Bonus Plan.
(5) Instrument Systems Corporation (ISC):
In October 1993, Instrument Systems Corporation ( ISC ) sold its 25%
holding of Oneita Industries, Inc.
stock.
(6) Consolidation and Restructuring charges:
The operating results for the year ended September 30, 1994 reflect a
pretax charge of $4,080,000 for the write-down of facilities to their fair
market value that the Company intends to sell or abandon after usable
machinery and equipment is redeployed and the transitional costs related to
the reorganization of certain administrative functions.
The operating results for the year ended September 30, 1993 reflect a
pretax charge of $7,500,000 to streamline and consolidate the Company's
manufacturing operations. The charge reflects the costs of equipment
relocation, staff reductions and retraining and transitional employee salaries
and benefits.
(7) Line of business:
The Company operates in one business segment the manufacture and sale
of apparel products such as activewear and infantswear. Sales to one
customer were 16.2%, 13.9% and 14.2% of net sales in the years 1994, 1993
and 1992, respectively. Sales to another customer amounted to 10.5% of net
sales in 1994. The Company has incurred advertising expenses of $2,500,000,
$1,800,000 and $1,500,000 for the years ended September 30, 1994, 1993 and
1992, respectively.
(8) Commitments:
The Company and its subsidiaries rent real property and equipment under
operating leases expiring at various dates. Most of the real property
leases have escalation clauses relating to increases in real property taxes.
Future minimum payments under noncancelable operating leases consisted
of the following at September 30, 1994:
</TABLE>
<TABLE>
<S> <C>
1995 $ 4,597,000
1996 3,687,000
1997 2,535,000
1998 1,598,000
1999 1,242,000
Later years 729,000
------------
$14,388,000
------------
</TABLE>
<PAGE> F-10
Rent expense for all operating leases was $6,549,000, $5,968,000 and
$4,678,000 for the years ended September 30, 1994, 1993 and 1992, respectively.
The Company commits to acquire its yarn requirements by contracts covering
one to two years. As of September 30, 1994, the Company has outstanding
commitments of approximately $46,000,000 to acquire yarn. These contracts
expire at various dates through 1995.
Two officers of the Company have employment agreements for terms ending
in 1997. The agreements provide for salary and, under certain conditions,
incentive bonuses. The agreements also provide that in the event there is
a change in the control of the Company, as defined therein, the officers have
the option to terminate the agreements and receive a lump sum payment based
upon the compensation paid during the last fiscal year prior to exercising
this right. As of September 30, 1994, the amount payable in the event of such
termination would be approximately $1,512,000.
------------------------------------------
Notes to Consolidated Financial Statements
(9) Quarterly financial information (unaudited):
<TABLE>
<CAPTION>
Quarter Ended
Sept. 30, June 30, March 31, Dec. 31,
1994 1994 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $53,890,000 $61,165,000 $44,179,000 $34,225,000
Gross profit 8,497,000 6,705,000 6,663,000 5,543,000
Net income (loss) (7,984,000) 483,000 327,000 353,000
Net income (loss) per share $(1.14) $.07 $.05 $.05
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended
Sept. 30, June 30, March 31, Dec. 31,
1994 1994 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $41,403,000 $46,447,000 $45,469,000 $44,291,000
Gross profit 5,199,000 4,557,000 8,345,000 6,733,000
Net income (loss) 357,000 (5,524,000) 1,161,000 1,029,000
Net income (loss) per share $.05 $(.80) $.17 $.15
<FN>
Net income (loss) per share amounts are computed independently for each of
the quarters presented, on the basis described in Note 1. The sum of the
quarters may not be equal to the full year net income (loss) per share
amounts.
Net loss for the third quarter of fiscal 1993 included an after-tax loss of
$4,700,000 for a restructuring charge as described in Note 6.
Net loss for the fourth quarter of fiscal 1994 included an after-tax loss of
$2,519,000 for a restructuring charge and $6,651,000 for goodwill write-off
as described in Note 6 and Note 1, respectively.
</FN>
<PAGE> F-11
Schedule V
ONEITA INDUSTRIES, INC. AND SUBSIDIARIES PROPERTY, PLANT AND EQUIPMENT
For The Years Ended September 30, 1994, 1993 and 1992
</TABLE>
<TABLE>
<CAPTION>
Balance at Balance at
Beginning Additions Retirements Other End
of Year at Cost or Sales Changes of Year
---------- --------- ----------- ------- -------
<S> <C> <C> <C> <C> <C>
For the Year Ended
September 30, 1994
Land $ 663,000 $ 52,000 $ 0 $ 0 $ 715,000
Buildings and
Improvements 16,132,000 193,000 (610,000) (1,073,000)(a) 14,642,000
Machinery and
Equipment 32,017,000 4,939,000 (494,000) (1,666,000)(a) 34,796,000
Other(b) 3,048,000 0 0 0 3,048,000
----------- ---------- ----------- ----------- -----------
Total $51,860,000 $5,184,000 $(1,104,000) $ (2,739,000) $53,201,000
----------- ----------- ----------- ------------- -----------
For the Year Ended
September 30, 1993
Land $ 679,000 $ 0 $ (16,000) $ 0 $ 663,000
Buildings and
Improvements 14,628,000 1,885,000 (381,000) 0 16,132,000
Machinery and
Equipment 26,818,000 5,304,000 (105,000) 0 32,017,000
Other(b) 3,203,000 101,000 (256,000) 0 3,048,000
----------- ---------- ----------- ------------ -----------
Total $45,328,000 $7,290,000 $ (758,000) $ 0 $51,860,000
----------- ---------- ---------- ----------- -----------
For the Year Ended
September 30, 1992
Land $ 643,000 $ 36,000 $ 0 $ 0 $ 679,000
Buildings and
Improvements 13,538,000 1,090,000 0 0 14,628,000
Machinery and
Equipment 20,471,000 7,014,000 (667,000) 0 26,818,000
Other(b) 3,564,000 185,000 (546,000) 0 3,203,000
----------- ---------- ----------- ----------- -----------
$38,216,000 $8,325,000 $(1,213,000) $ 0 $45,328,000
----------- ---------- ------------ ------------ -----------
</TABLE>
[FN]
(a) Represents writedown to estimated fair market value of assets to be
available for sale.
(b) Construction in progress.
<PAGE> F12
Schedule VI
ONEITA INDUSTRIES, INC. AND SUBSIDIARIES - ACCUMULATED DEPRECIATION
For The Years Ended September 30, 1994, 1993 And 1992
<TABLE>
<CAPTION>
Balance at Balance at
Beginning Retirements Other End
of Year Additions or Sales Changes of Year
---------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C>
For the Year Ended
September 30, 1994
Land $ 0 $ 0 $ 0 $ 0 $ 0
Buildings and
Improvements 8,479,000 1,537,000 (213,000) 0 9,803,000
Machinery and
Equipment 10,506,000 2,875,000 (418,000) 0 12,963,000
Other 0 0 0 0 0
------------ ---------- ----------- ---------- -----------
Total $18,985,000 $4,412,000 $(631,000) $ 0 $22,766,000
------------ ---------- ----------- ---------- -----------
For the Year Ended
September 30, 1993
Land $ 0 $ 0 $ 0 $ 0 $ 0
Buildings and
Improvements 7,100,000 1,458,000 (79,000) 0 8,479,000
Machinery and
Equipment 8,204,000 2,407,000 (105,000) 0 10,506,000
Other 0 0 0 0
----------- ---------- ----------- ---------- ----------
Total $15,304,000 $3,865,000 $ (184,000) $ 0 $18,985,000
----------- ---------- ----------- ---------- -----------
For the Year Ended
September 30, 1992
Land $ 0 $ 0 $ 0 $ 0 $ 0
Buildings and
Improvements 5,879,000 1,221,000 0 0 7,100,000
Machinery and
Equipment 6,298,000 2,489,000 (583,000) 0 8,204,000
Other 0 0 0 0 0
----------- ---------- ----------- ---------- ----------
$12,177,000 $3,710,000 ($583,000) $ 0 $15,304,000
----------- ---------- ----------- ---------- -----------
</TABLE>
<PAGE> F13
Schedule VIII
ONEITA INDUSTRIES, INC. AND SUBSIDIARIES - VALUATION AND
Qualifying Accounts
For The Years Ended September 30, 1994, 1993 And 1992
<TABLE>
<CAPTION>
Additions
Charged
Balance at (Credited) to Balance
Beginning Costs and Deductions at End of
Description of Period Expenses (Recoveries) Period
---------- ------------- ------------ --------
<S> <C> <C> <C> <C>
For the Year Ended
September 30, 1994:
Allowance for
doubtful accounts $1,024,000 $(30,000) $(12,000) $1,006,000
For the Year Ended
September 30, 1993:
Allowance for
doubtful accounts 1,131,000 106,000 213,000 1,024,000
For the Year Ended
September 30, 1992:
Allowance for
doubtful accounts 879,000 400,000 148,000 1,131,000
</TABLE>
<PAGE> 13
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ONEITA INDUSTRIES, INC.
Form 10K/A
E X H I B I T I N D E X
Page No. in
Sequential
Exhibit Numbering of all Pages,
Number Exhibit Description including Exhibit
- ------- ------------------- -----------------------
Pages
- -----
3.1 Certificate of Incorporation (Exhibit 3(a) of Form S-1
Registration Statement No. 33-16972)
3.2 By-Laws as amended (Exhibit 3.1 of Form 10-Q for the
quarter ended March 31, 1994)
4.1 Factoring Agreement dated April 1, 1979, as amended,
between Registrant and a lending institution Exhibit 4(b) of
Form S-1 Registration Statement No. 33-16972)
10.1 Stock Option Plan (Exhibit 10(a) of Form S-1 Registration
Statement No. 33-16972)
10.2 1989 Non-Qualified Stock Option Plan (Exhibit 10.2 of
Annual Report on Form 10-K for the year ended
September 30, 1990)
10.3 Lease Agreement dated as of October 1, 1987, between the
Registrant and Instrument Systems Corporation (Exhibit 10(d)
of Form S-1 Registration Statement No. 33-16972)
10.4 Employment Agreement between the Registrant and Herbert J.
Fleming, as amended (Exhibit 10.2 of Current Report on
Form 8-K dated January 1, 1994)
10.5 Employment Agreement between Registrant and J. Roger Holland
(Exhibit 10.4 of Form 10-Q for the quarter ended March 31, 1994)
10.6 Variable Amount of Grid Note Agreement dated March 31, 1994,
between Registrant and First Union National Bank of South Carolina
(Exhibit 10.1 of Form 10-Q for the quarter ended March 31, 1994)
10.7 Promissory Note dated September 30, 1994, between Registrant
and National Westminster Bank, USA
<PAGE> 27
10.8 Single Payment Note dated February 28, 1994, between Registrant
and Trust Company ank (Exhibit 10.3 of Form 10-Q for the quarter
ended March 31, 1994)
10.9 Equipment Lease Agreement dated as of May 16, 1988, between
Registrant and NEMLC Leasing Associates No. 3 (Exhibit 10(k) of
Form S-1 Registration Statement No. 33-22488) amended as of
December 1, 1988, and May 19, 1989 (Exhibit 10.11 of Annual
Report on Form 10-K for the year ended September 30, 1990)
10.10 Note Agreement dated as of December 20, 1988, between Registrant
and an institutional lender (Exhibit 10.10 of Annual Report on
Form 10-K for the year ended September 30, 1988)
10.11 License Agreement dated October 24, 1988, between Registrant
and Health-tex, Inc. (Exhibit 10(k) of Form S-1 Registration
Statement No. 33-30810)
10.12 Letter of Credit Agreement dated as of October 1, 1989, between
the Registrant and Trust Company Bank (Exhibit 10.12 of Annual
Report on Form 10-K for the year ended September 30, 1989)
10.13 Lease Agreement dated as of October 1, 1989, between the
Registrant and the Industrial Development Board of the City of
Fayette, Alabama (Exhibit 10.13 of the Annual Report on Form 10-K
for the year ended September 30, 1989)
10.14 Guaranty Agreement dated as of October 1, 1989, between the
Registrant and Trust Company Bank (Exhibit 10.14 of Annual
Report on Form 10-K for the year ended September 30, 1989)
10.15 Form of Indemnification Agreement between Registrant and its
officers and directors (Exhibit 28 to Current Report on Form 8-K
dated July 30, 1991)
10.16 License Agreement dated as of February 1, 1991, between
Registrant and Henson Associates, Inc. (Exhibit 10.18 of Form S-2
Registration Statement No. 33-46119)
10.17 Loan Agreement dated as of March 26, 1993, between Registrant
and National Westminster Bank, USA and Trust Company Bank
(Exhibit 10.18 of Annual Report on Form 10-K for the year ended
September 30, 1993)
10.18 Amendment to Loan Agreement dated March 26, 1993 between
Registrant and National Westminster Bank and Trust Company
(Exhibit 10.6 of Form 10-Q for the quarter ended March 31, 1994)
10.19 License Agreement dated as of August 31, 1993, between Registrant
and Kessler Marketing Group, Inc. (Exhibit 10.19 of Annual
Report on Form 10-K for the year ended September 30, 1993)
10.20 Modification to Management Services Contract dated February 5,
1993 (Exhibit 28 to Current Report on Form 8-K dated January 1,
1993)
10.21 Registration Rights Letter Agreement between Gintel & Co. Limited
Partnership (Exhibit 10 to Current Report on Form 8-K dated
October 6, 1993)
10.22 Letter Agreement dated October 5, 1993, between Gintel & Co.
Limited Partnership and Instrument Systems Corporation
(Exhibit 2 to Current Report on Form 8-K dated October 6, 1993)
10.23 Amendment to Lease Agreement dated as of October 1, 1987,
between Registrant and Instrument Systems Corporation
(Exhibit 10.24 of Annual Report on Form 10-K for the year ended
September 30, 1993)
11 Computation of Earnings Per Share*
18 Letter re change in accounting principles*
<PAGE> 14
22 The following lists the Company s significant subsidiaries, all of
which are wholly-owned by the Company. The names of certain
subsidiaries which do not, when considered in the aggregate,
constitute a significant subsidiary have been omitted.
Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------
Oneita-Kinston Corp. North Carolina
Strathleven Limited Jamaica
Oneita Mexicana S.A.
de C.V. Chihuaha, Mexico
23 Consent of Arthur Andersen LLP*
28 Additional Exhibit
[FN]
- --------------------
* Filed herewith
<PAGE> 15
EXHIBIT 11
ONEITA INDUSTRIES, INC.
Statement Regarding Computation of Per Share Earnings
For the Years Ended September 30, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Years Ended September 30,
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Net income (loss) per share:
Net income (loss) ($6,821,000) ($2,977,000) $7,826,000
------------ ------------ ----------
Shares:
Weighted average shares 6,960,775 6,753,192 5,709,432
Add shares related to
dilutive effect of
outstanding stock options
and warrants 18,379 143,117 617,860
------------ ----------- ----------
Weighted average number
of shares outstanding 6,979,154 6,896,309 6,327,292
------------ ------------ ----------
Net income (loss)
per share ($0.98) ($0.43) $1.24
------------- ------------ -----------
</TABLE>
<PAGE>
EXHIBIT 18
ARTHUR ANDERSEN LLP
December 27, 1994
Oneita Industries, Inc.
4130 Faber Place Drive, Suite 200
Ashley Corporate Center
Charleston, South Carolina 29405
Re: 10-K Report for Year Ended September 30, 1994
Gentlemen:
This letter is written to meet the requirements of Regulation S-K calling for
a letter from a registrant's independent accountants whenever there has been
a change in accounting principle or practice.
As of September 30, 1994, the Company changed its method of accounting for
evaluating the impairment of intangible assets from a recoverability through
future operations method to the fair value method. According to the
management of the Company, this change was made because management concluded
that the fair value method was a better measure of the impairment of
intangible assets.
A complete coordinated set of financial and reporting standards for determining
the preferability of accounting principles among acceptable alternative
principles has not been established by the accounting profession. Thus, we
cannot make an objective determination of whether the change in accounting
described in the preceding paragraph is to a preferable method. However, we
have reviewed the pertinent factors, including those related to financial
reporting, in this particular case on a subjective basis, and our opinion
stated below is based on our determination made in this manner.
We are of the opinion that the Company's change in method of accounting is to
an acceptable alternative method of accounting, which, based upon the reasons
stated for the change and our discussions with you, is also preferable under
the circumstances in this particular case. In arriving at this opinion, we
have relied on the business judgment and business planning of your management.
Very truly yours,
/s/Arthur Andersen LLP
</DOCUMENT
<PAGE> 17
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report,
dated November 11, 1994, included in Oneita Industries, Inc.,'s Form 10K/A
for the year ended September 30, 1994, and to the incorporation by reference
of our report into the Company's previously filed Registration Statements
on Form S-8 (Registration No. 33-30576, 33-34778, 33-62970 and 33-75834)
and Amendment No. 1 to Form S-3 Registration Statement (Registration No.
33-88600) and Post-Effective Amendment No. 2 to Form S-3 Registration
Statement (Registration No. 33-70524), and to all references to our Firm
included in these Registration Statements.
/s/ Arthur Andersen LLP
Columbia, South Carolina
March 2, 1995.
