UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998...........................
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from.................to...........................
Commission file number.......333-18755.....................................
............................................Pluma, Inc..........
(Exact name of registrant as specified in its charter)
North Carolina 56-1541893
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
..................................................................
(Address of principal executive offices)
(Zip Code)
............801 Fieldcrest Road, Eden, North Carolina 27289................
(Registrant's telephone number, including area code)
..............................(336) 635-4000................................
(Former name, former address and former fiscal year, if changed since last
report)
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........
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date 8,109,152 shares of common
stock, no par value, as of November 14, 1998.
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PLUMA, INC.
INDEX TO FORM 10-Q
- -------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION PAGE
<S> <C> <C> <C> <C> <C>
Item 1. Financial Statements
Balance Sheets - September 30, 1998 and December 31, 1997 3
Statements of Operations - Three Months and Nine Months Ended September 30, 1998
and 1997 4
Statements of Cash Flows - Nine Months Ended September 30, 1998 and 1997 5
Notes to Financial Statements 6-9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9-10
PART II - OTHER INFORMATION
Item 2. Changes in Security 8
Item 6. Exhibits and Reports on Form 8-K 10
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2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PLUMA, INC.
BALANCE SHEETS
- --------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1998 1997
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,563,866 $ 1,875,992
Accounts receivable (less allowance - 1998, $1,734,356;
1997, $2,353,577) 39,047,472 32,001,332
Refundable income taxes 4,676,055 1,952,796
Other receivables -- 1,906,178
Deferred income taxes 1,251,001 1,539,385
Inventories 69,555,782 51,177,900
Other current assets 818,357 1,168,663
------------ ------------
Total current assets 117,912,533 91,622,246
------------ ------------
Property, plant and equipment:
Land 929,689 929,689
Land improvements 719,699 719,699
Buildings and improvements 17,042,915 16,663,608
Machinery and equipment 42,848,548 36,420,561
Construction in process 9,343,301 4,762,235
------------ ------------
Total property, plant and equipment 70,884,152 59,495,792
Less accumulated depreciation 24,667,198 21,496,857
------------ ------------
Property, plant and equipment, net 46,216,954 37,998,935
------------ ------------
Other assets:
Goodwill (less accumulated amortization -
1998, $1,333,840; 1997, $26,655 33,524,461 34,831,646
Other 2,570,554 1,533,840
------------ ------------
Total other assets 36,095,015 36,365,486
------------ ------------
Total $200,224,502 $165,986,667
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt 109,393,000 44,117,982
Accounts payable 22,120,728 12,057,069
Accrued expenses 5,923,435 2,472,458
------------ ------------
Total current liabilities 137,437,163 58,647,509
------------ ------------
Long-term debt -- 40,000,000
------------ ------------
Deferred income taxes 4,428,823 3,671,301
------------ ------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value, 1,000,000 shares authorized Common stock, no
par value, 15,000,000 shares authorized,
shares issued and outstanding - 1998, 8,109,152; 1997, 8,109,152 36,849,127 36,849,127
Retained earnings 21,509,389 26,818,730
------------ ------------
Total shareholders' equity 58,358,516 63,667,857
------------ ------------
Total $200,224,502 $165,986,667
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
3
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PLUMA, INC.
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $ 54,608,997 $ 38,965,527 $ 144,865,133 $ 99,477,525
Cost of goods sold 51,639,967 34,068,210 133,250,402 84,714,875
------------- ------------- ------------- -------------
Gross profit 2,969,030 4,897,317 11,614,731 14,762,650
Selling, general and administrative expenses 4,750,727 1,738,339 13,768,792 7,043,811
------------- ------------- ------------- -------------
Income (loss) from operations (1,781,697) 3,158,978 (2,154,061) 7,718,839
------------- ------------- ------------- -------------
Other income (expenses):
Interest expense (2,151,012) (519,051) (5,481,849) (1,697,223)
Amortization of goodwill (435,728) -- (1,307,185) --
Other income 108,431 158,139 595,073 407,878
------------- ------------- ------------- -------------
Total other expenses, net (2,478,309) (360,912) (6,193,961) (1,289,345)
------------- ------------- ------------- -------------
Income (loss) before income taxes (4,260,006) 2,798,066 (8,348,022) 6,429,494
------------- ------------- ------------- -------------
Income taxes (benefit) (1,550,642) 1,029,688 (3,038,681) 2,366,054
------------- ------------- ------------- -------------
Net income (loss) $ (2,709,364) $ 1,768,378 $ (5,309,341) $ 4,063,440
============= ============= ============= =============
Earnings per common share -
basic and diluted $ (.33) $ .22 $ (.65) $ .55
============= ============= ============= =============
Weighted average number of shares outstanding 8,109,152 8,109,152 8,109,152 7,366,625
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of this statement.
4
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PLUMA, INC.
STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (5,309,341) $ 4,063,440
Adjustments to reconcile net income to net cash
used in operating activities:
Provision for depreciation 3,328,491 3,018,571
Provision for amortization 1,382,188
Other, net (45,278) (1,162)
Increase in accounts receivable (5,139,962) (18,615,617)
Increase in deferred income taxes 1,045,906 305,680
Increase in inventories (18,377,882) (984,971)
(Increase) decrease in other current assets 350,306 344,065
Increase in accounts payable 10,063,659 2,268,856
(Increase) decrease in refundable income taxes (2,723,259) (691,437)
Increase in accrued expenses 3,450,977 806,308
------------ ------------
Net cash used in operating activities (11,974,195) (9,486,267)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (11,556,132) (8,814,148)
Other, net (1,056,817) (218,320)
------------ ------------
Net cash used in investing activities (12,612,949) (9,032,468)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of subordinated debt (849,640) (849,640)
Proceeds from issuance of long term debt 26,124,658 0
Net repayments of revolving loan (10,266,437)
Net proceeds from sale of common stock 29,626,577
Payment of dividends (144,451)
Net cash provided by financing activities 25,275,018 18,366,049
------------ ------------
Net increase (decrease) in cash 687,874 (152,686)
Cash, beginning of period 1,875,992 291,488
------------ ------------
Cash, end of period $ 2,563,866 $ 138,802
============ ============
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest (net of amounts capitalized) $ 4,708,255 $ 1,889,717
Income taxes $ 57,500 $ 2,751,811
Cash received during the period for:
Income taxes $ 1,400,829 -
</TABLE>
The accompanying notes are an integral part of this statement.
5
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PLUMA, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) SEPTEMBER 30, 1998
- -------------------------------------------------------------------------------
1. ACCOUNTING POLICIES
The accompanying unaudited financial statements of Pluma, Inc. (the
"Company") have been prepared in accordance with generally accepted
accounting principles for interim periods.
In the opinion of management, these financial statements include all
adjustments, including all normal recurring accruals, necessary for a fair
presentation of the financial position at September 30, 1998 and December
31, 1997, the results of operations for the three months and nine months
ended September 30, 1998 and 1997 and cash flows for the nine months ended
September 30, 1998 and 1997.
The operating results for the three months and nine months ended September
30, 1998 are not necessarily indicative of the results to be expected for
the full year ending December 31, 1998.
In December 1997, the Company purchased certain assets and assumed
liabilities of Stardust Corporation ("Stardust") and Frank L. Robinson
Company ("FLR)". The acquisitions have been accounted for as purchases.
Accordingly, the assets, liabilities, revenues and expenses of the
acquired businesses are included in the financial statements as of
December 31, 1997, and for the three months and nine months ended
September 30, 1998.
2. INVENTORIES
Inventories consist of the following:
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1998 1997
At FIFO cost:
Raw materials $ 1,653,181 $ 1,429,371
Work-in-progress 11,167,268 6,077,538
Finished goods 61,682,367 45,885,484
Production supplies 1,114,864 953,147
-------------- ---------------
75,617,680 54,345,540
Excess of FIFO over LIFO cost (3,587,439) (1,846,435)
-------------- ---------------
72,030,241 52,499,105
Excess of cost over market (2,474,459) (1,321,205)
-------------- ---------------
$ 69,555,782 $ 51,177,900
============== ===============
3. CAPITAL STOCK
On January 28, 1997, the Board of Directors declared a 0.736-for-one
reverse common stock split for shareholders of record on February 3, 1997.
All references in the accompanying financial statements to the number of
common shares and per share amounts reflect the reverse stock split.
6
<PAGE>
In March 1997, the Company completed its initial public offering of
2,500,000 shares of Common Stock at $12.00 per share. The $26,400,000 net
proceeds were used to reduce debt.
In April 1997, the Underwriters' over-allotment option for 293,300 shares
of Common Stock at $12.00 per share was exercised. The $3,300,000 net
proceeds were used to reduce debt.
4. STOCK OPTIONS
In May 1995, the Company adopted the 1995 Stock Option Plan in which
515,200 shares of the Company's Common Stock may be issued. The exercise
price of the options may not be less than the fair value of the Common
Stock on the date of grant. The options granted become exercisable at such
time or times as shall be determined by the Compensation Committee of the
Board of Directors (the "Committee"). The Committee may at any time
accelerate the exercisability of all or any portion of any stock option.
These options expire, if not exercised, ten years from the date of grant.
Participants in the Plan may be independent contractors or employees of
independent contractors, full or part-time officers and other employees of
the Company, or independent directors of the Company.
In April 1996 and October 1995, the Company granted 32,384 and 379,776
options, respectively, to purchase Common Stock at an exercise price of
$13.077 per share of which 181,352 and 180,763 options are exercisable as
of September 30, 1998 and December 31, 1997, respectively. Forfeited
options were 40,627 as of September 30, 1998 and 31,795 as of December 31,
1997. Expired options were 6,477 shares as of September 30, 1998 and 589
shares as of December 31, 1997. The remaining 183,704 options become
exercisable on the anniversary dates of the grants as follows:
YEAR SHARES
1998 54,759
1999 61,236
2000 61,234
2001 6,475
----------
183,704
==========
The Company applies APB Opinion No. 25 and related interpretations in
accounting for the 1995 Stock Option Plan. Accordingly, no compensation
cost has been recognized since the exercise price approximates the fair
value of the stock price at the grant dates. Had compensation cost been
determined based on the fair value at the grant date consistent with the
method of Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation", the Company's net income and earnings per
share would have been effected for the three months and nine months ended
September 30, 1998 and 1997 as indicated below:
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Three Months Nine Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net Income:
As reported $ (2,709,364) $ 1,768,378 $ (5,309,341) $ 4,063,440
Pro forma $ (2,737,554) $ 1,717,064 $ (5,396,291) $ 3,909,499
Earnings per Share:
As reported $ (.33) $ .22 $ (.65) $ .55
Pro forma $ (.34) $ .21 $ (.67) $ .53
</TABLE>
7
<PAGE>
5. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128") which changes the method of computing and presenting earnings
per share. SFAS 128 requires the presentation of basic earnings per share
and diluted earnings per share ("EPS") on the face of the income statement
for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. Basic earnings per share is computed by dividing the net
income available to common shareholders by the weighted average shares of
outstanding common stock. The calculation of diluted earnings per share is
similar to basic earnings per share except that the denominator includes
dilutive common stock equivalents such as stock options and warrants. SFAS
128 is effective for financial statements for periods ending after
December 15, 1997 and early adoption is not permitted.
Outstanding options to purchase shares of common stock were not included
in the computation of diluted EPS because the options' exercise prices
were greater than the average market prices of the common shares during
the three months and nine months ended September 30, 1998 and 1997.
Accordingly, there were no differences in the numerators and denominators
used in the basic EPS and diluted EPS computations.
6. LONG-TERM DEBT
The company entered into a $115.0 million syndicated credit facility (the
"Syndicated Credit Facility") in April, 1998. The Syndicated Credit
Facility permits revolving loans of up to $70.0 million (the "Revolving
Loans") and term loans of up to $45.0 million (the "Term Loans"). Any
amounts outstanding under the Revolving Loans mature in April, 2003. Term
Loan borrowings will be due in specified quarterly installments beginning
in April, 1999 with a final maturity in January, 2003. The Syndicated
Credit Facility has been amended by the First Amendment to Credit
Agreement and Waiver entered into as of August 27, 1998, the Second
Amendment to Credit Agreement entered into as of September 30, 1998, and
the Third Amendment to Credit Agreement entered into as of November 16,
1998 (the "Credit Agreement Amendments"). The provisions of the Credit
Agreement Amendments include, among other things, the addition of up to
$1.0 million to the Company's calculated borrowing base under the
Revolving Loans. The $1.0 million addition to the Company's calculated
borrowing base provided in the Third Amendment to Credit Agreement expires
on December 31, 1998.
Among the various provisions, limitations and restrictions contained in
the Syndicated Credit Facility, the Company must meet specified
consolidated net worth, leverage ratio, fixed charge coverage ration,
funded debt to total capitalization ratio and consolidated earnings before
the effect of interest expense, income taxes depreciation and amortization
requirements. Under the Syndicated Credit Facility, the Company is
restricted in the amount of its capital expenditures, indebtedness to
certain other parties, payment of dividends, or redemption of its stock
that would create an event of default, unless a waiver is obtained, any
unpaid principal and accrued interest may be declared immediately due and
payable. The Syndicated Credit Facility may be terminated at any time upon
the occurrence of an event of default. The Company retains the right to
remedy certain events of default within 30 days after notice. The Company
was not in compliance with certain covenants and had not obtained the
respective waivers as of September 30, 1998. Accordingly, all debt as of
September 30, 1998 has been classified as current.
7. NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Comprehensive Income" ("SFAS
130"), which established standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. This statement divides comprehensive income into net
income and other comprehensive income. For the three months and nine
months ended September 30, 1998 and 1997, the Company had no items of
other comprehensive income.
8
<PAGE>
In June 1997, SFAS No. 131 "Disclosures about Segments of an Enterprise
and Related Information", was issued, establishing standards for the way
public enterprises report information about operating segments in annual
financial statements. This statement also requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. The Company will be required to apply the
provisions of this statement beginning with the annual report issued for
the year ending December 31, 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The following discussion and analysis should be read in conjunction with the
financial statements and related notes of this Quarterly Report on Form 10-Q
and in conjunction with the Company's 1997 Annual Report.
RESULTS OF OPERATIONS
(UNDAUDITED) (UNDAUDITED)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1998 1997 1998 1997
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 94.6 87.4 92.0 85.2
------ ----- ---- ----
Gross profit 5.4 12.6 8.0 14.8
Selling, general and
administrative expenses 8.7 4.5 9.5 7.0
------ ----- --- ---
Income (loss) from
operations (3.3) 8.1 (1.5) 7.8
Other expenses, net 4.5 0.9 4.3 1.3
--- --- --- ---
Income (loss) before
income taxes (7.8) 7.2 (5.8) 6.5
Income taxes (benefit) (2.8) 2.7 (2.1) 2.4
----- --- ------ ---
Net income (loss) (5.0)% 4.5% (3.7)% 4.1%
--- --- --- ---
Three Months and Nine Months Ended September 30, 1998 ("1998"), Compared to
Three Months and Nine Months Ended September 30, 1997 ("1997")
NET SALES
Net sales for the nine months ended September 30, 1998 were $144.9 million, an
increase of $45.4 million, or 45.6%, over net sales of $99.5 million for the
first nine months of 1997. This increase in net sales was attributable to the
inclusion of sales from FLR and Stardust which were acquired by the Company in
December of 1997. This increase in sales, however, was lower than anticipated
due to a short supply of specific inventory styles. This shortage of inventory
was due, in part, to problems associated with system design and procedural
aspects of the SAP management information system which is currently being
implemented by the Company. Additionally, sales from FLR and Stardust were lower
than anticipated due to a temporary supply disruption of inventory that occurred
during the second quarter of 1998.
GROSS MARGINS
Gross margins declined to 5.4% and 8.0% for the third quarter and first nine
months of 1998, respectively, from 12.6% and 14.8% in the comparable periods of
1997. The decline was the result of lower fabric yield, a shift in product mix,
and an increase in supplies expense. Fabric yield was adversely impacted due to
problems associated with system design and procedural aspects of the SAP
management information system which is currently being implemented by the
Company. Steps have been or are being taken to correct this problem. Orders for
product shifted to a higher percentage of larger sized goods during the first
nine months of 1998 relative to the same period in 1997. Due to a competitive
market environment, the Company is not always able to offset
<PAGE>
the higher production costs associated with larger sized product with higher
selling prices. Supplies expense increased as the Company provided manufacturing
and shipping supplies to a greater number of outside contractors during the
first nine months of 1998 than had been utilized in the same period of 1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")
For the first nine months, SG&A expenses increased 95.5% to $13.8 million in
1998 from $7.0 million in 1997. SG&A as a percent of sales for 1998 was 9.5%
compared to 7.0% in 1997. This increase in SG&A expense is primarily
attributable to the inclusion of expenses from FLR and Stardust in the first
nine months of 1998.
OTHER EXPENSES, NET
Other expenses, net, increased 586.7% to $2.5 million in the third quarter of
1998 and 380.4% to $6.2 million in the first nine months of 1998. This increase
was due to an increase in interest expense and amortization expense associated
with the acquisitions made in December of 1997.
INCOME TAXES
The effective tax rate was 36.4% in 1998 and 36.8% 1997.
LIQUIDITY AND CAPITAL RESOURCES
PRINCIPAL SOURCES OF LIQUIDITY
Principal sources of liquidity have been net proceeds from the Company's initial
public offering and bank financing. In March 1997, the Company completed its
initial public offering of 2,500,000 shares of common stock at $12.00 per share.
Upon the exercise of an overallotment option in April 1997, the Company issued
an additional 293,300 shares at $12.00 per share. The $29.6 million in net
proceeds from the issuance of Common Stock was used to reduce debt.
The company entered into a $115.0 million syndicated credit facility (the
"Syndicated Credit Facility") in April, 1998. The Syndicated Credit Facility
permits revolving loans of up to $70.0 million (the "Revolving Loans") and term
loans of up to $45.0 million (the "Term Loans"). Any amounts outstanding under
the Revolving Loans mature in April, 2003. Term Loan borrowings will be due in
specified quarterly installments beginning in April, 1999 with a final maturity
in January, 2003. The Syndicated Credit Facility has been amended by the First
Amendment to Credit Agreement and Waiver entered into as of August 27, 1998, the
Second Amendment to Credit Agreement entered into as of September 30, 1998, and
the Third Amendment to Credit Agreement entered into as of November 16, 1998
(the "Credit Agreement Amendments"). The provisions of the Credit Agreement
Amendments include, among other things, the addition of up to $1.0 million to
the Company's calculated borrowing base under the Revolving Loans. The $1.0
million addition to the Company's calculated borrowing base provided in the
Third Amendment to Credit Agreement expires on December 31, 1998.
Among the various provisions, limitations and restriction contained in the
Syndicated Credit Facility, the Company must meet specified consolidated net
worth, leverage ratio, fixed charge coverage ratio, funded debt to total
capitalization ratio and consolidated earnings before the effect of interest
expense, income taxes, depreciation and amortization requirements. Under the
Syndicated Credit Facility, the Company is restricted in the amount of its
capital expenditures, indebtedness to certain other parties, payment of
dividends, or redemption of its stock that would create an event of default. In
the event of default, unless a waiver is obtained, any unpaid principal and
accrued interest may be declared immediately due and payable. The Syndicated
Credit Facility may be terminated at any time upon the occurrence of an event of
default. The Company retains the right to remedy certain events of default with
30 days after notice.
The Company was not in compliance with certain covenants and had not obtained
waivers as of September 30, 1998. As of September 30, 1998, the Company was
required to have a consolidated net worth greater than or equal to $62.5
million, a fixed charge coverage ratio of no less than 1.50 to 1.0, and
consolidated earnings before the effect of interest expense, income taxes,
depreciation and amortization greater than or equal to $20 million. As of
September 30, 1998, the Company had a consolidated net worth of $58.4 million, a
fixed charge coverage ratio of (0.37) to 1, and consolidated earnings before the
effect of interest expense, income
<PAGE>
taxes, depreciation and amortization of $12.5 million. The lenders party to the
Syndicated Facility have agreed to forbear exercising their rights and remedies
arising from the Company's covenant violations until December 31, 1998 and to
continue to make available to the Company the loans provided under the
Syndicated Credit Facility.
CASH FLOWS FROM OPERATING ACTIVITIES
For the nine months ended September 30, 1998 and 1997, net cash used in
operating activities totaled $12.0 million and $9.5 million, respectively.
Accounts receivable, net increased $5.1 million from December 31, 1997 to
September 30, 1998 due to increased sales volume and the seasonality of
activewear shipments. Inventories increased $18.4 million from December 31, 1997
to September 30, 1998 in order to support shipments due in the next six months.
These uses of cash were offset primarily by an increase in accounts payable of
$10.1 million.
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures were $11.6 million for the nine months ended September 30,
1998. These capital expenditures were primarily to enhance manufacturing and
management information systems capabilities.
CASH FLOWS FROM FINANCING ACTIVITIES
For the nine months ended September 30, 1998, the Company had net borrowings of
$25.3 million to help meet working capital and capital expenditure financing
needs.
Forward Looking Statements
Information in this form 10-Q may contain certain forward looking statements.
These statements involve risks and uncertainties that could cause actual results
to differ materially, including without limitation, the actual costs of
operating the Company's business, actual operating performance, the ability to
maintain large client contracts or to enter into new contracts and the level of
demand for the Company's product. Additional factors that could cause actual
results to differ are discussed in the Company's recent filings with the
Securities and Exchange Commission.
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITY
On January 28, 1997, the Board of Directors declared a 0.736-for-one
reverse Common Stock split for shareholders of record on February 3, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit
Number Filed Herewith (*)
6.1 First Amendment to Credit Ageement
6.2 Second Amendment to Credit Agreement
6.3 Third Amendment to Credit Agreement
6.4 Forbearance Agreement
6.5 Cash Collateral Security Agreement
11.1 Computation of Earnings per Share *
b. Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Pluma, Inc.
-----------------------------------
R. Duke Ferrell, Jr.
President, Chief Executive Officer
and Director
-----------------------------------
Forrest H. Truitt II
Executive Vice President, Treasurer
and Chief Financial Officer
9
