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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 12, 13, OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 13, 1994 (JUNE 28,
1994)
JPS TEXTILE GROUP, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
33-58272 57-0868166
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(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
555 NORTH PLEASANTBURG DRIVE, SUITE 202,
GREENVILLE, SOUTH CAROLINA 29607
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(803) 239-3900
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Page 1 of 12 pages
(Exhibit index appears on page 10)
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Item 2. Acquisition or Disposition of Assets
On June 28, 1994, pursuant to the terms of an Asset Purchase Agreement dated
May 25, 1994, by and among JPS Textile Group, Inc. ("JPS" or the "Company"),
JPS Auto Inc., a wholly-owned subsidiary of the Company ("Auto"), JPS
Converter and Industrial Corp., a wholly-owned subsidiary of the Company
("C&I"), Foamex International Inc. ("Foamex") and JPS Automotive Products
Corp., an indirect, wholly-owned subsidiary of Foamex ("Purchaser"), the
Company consummated the disposition of its Automotive Assets (as described
below) to the Purchaser.
The Automotive Assets consisted of (i) the businesses and assets of Auto and
the synthetic industrial fabrics division of C&I, and (ii) the Company's
investment in common stock of the managing general partner of Cramerton
Automotive Products, L.P. In addition, the Purchaser agreed to assume
substantially all of the liabilities and obligations associated with the
Automotive Assets.
The purchase price for the Automotive Assets was approximately $276 million,
consisting of $264 million of cash paid at closing and $12 million of assumed
debt (as of April 30, 1994), subject to certain post-closing adjustments. The
purchase price was determined by arms-length negotiations between the parties.
The net cash proceeds from the disposition of the Automotive Assets (after
deductions for (i) fees, (ii) other expenses and (iii) amounts designated by
management to satisfy possible contingent tax liabilities) are approximately
$213 million and such proceeds will be used by the Company to reduce its
outstanding indebtedness. Additional information regarding the use of proceeds
from the disposition of the Automotive Assets is contained in the press release
issued by the Company on June 28, 1994, filed as Exhibit 20.1 hereto and
incorporated herein by reference.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Unaudited Pro Forma Consolidated Condensed Balance Sheet of
the Company as of April 30, 1994 reflecting the disposition of
Automotive Assets as if the sale occurred as of April 30,
1994. Unaudited Pro Forma Consolidated Condensed Statements
of Operations for the six months ended April 30, 1994 and for
the year ended October 30, 1993 as if the transaction occurred
as of the beginning of the periods indicated.
(c) Exhibits:
20.1 - Press release issued by the Company on
June 28, 1994.*
99.1 - Asset Purchase Agreement, dated as of May 25,
1994, by and among the Company, Auto, C&I,
Purchaser and Foamex.**
___________________________
* Filed herewith
** Previously filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ending April 30, 1994.
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JPS TEXTILE GROUP, INC.
INTRODUCTION TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
(UNAUDITED)
The unaudited Pro Forma Consolidated Condensed Statements of Operations
for the six months ended April 30, 1994 and the year ended October 30, 1993
present the results of the continuing operations of JPS Textile Group, Inc.
assuming that the sale of the Automotive Assets, as described in item 2 of this
report, was consummated as of the beginning of the periods indicated. The
statements include all material adjustments necessary to present historical
results reflecting these assumptions. The gain for financial accounting
purposes, net of taxes thereon, related to the sale of the Automotive Assets is
estimated to be approximately $135 million and has not been reflected in the
unaudited Pro Forma Consolidated Condensed Statement of Operations.
The unaudited Pro Forma Consolidated Condensed Balance Sheet as of April 30,
1994 assumes that the sale of the Automotive Assets occurred on April 30, 1994.
The unaudited Pro Forma Consolidated Condensed Balance Sheet as presented
assumes net debt reduction, after the sale of the Automotive Assets, of
approximately $215 million, for the reduction of $66 million of bank debt, $102
million of senior secured notes, and $47 million of senior subordinated debt
(including related interest accruals). The respective amounts of debt
reduction described above are for purposes of presentation of the unaudited Pro
Forma Consolidated Condensed Balance Sheet as of April 30, 1994 and do not
reflect the actual debt reduction that will occur as described herein. In
addition, the pro forma financial information assumes that $39.5 million
designated by management to satisfy possible contingent tax liabilities has
been invested in long-term investment securities.
The pro forma financial information does not purport to be indicative of the
results of operations or the financial position which would have actually been
obtained if the sale of the Automotive Assets had been consummated on the dates
indicated. In addition, the pro forma financial information does not purport
to be indicative of the results of operations or the financial position of the
Company which may be attained in the future.
The pro forma financial information has been prepared by the Company and all
calculations have been made based upon assumptions deemed appropriate. Certain
of these assumptions are set forth under the Notes to Pro Forma Consolidated
Condensed Financial Information. As of the date of this filing, the Company
has reasonably completed its quantification of the final accounting for the
sale of the Automotive Assets based upon currently available information. Such
information may be revised at a later date based upon additional information.
The gross proceeds amount is subject to a purchase price adjustment based on
audited net assets sold on June 28, 1994. The amount of such purchase price
adjustment has been estimated based on unaudited net assets at April 30, 1994
and such purchase price adjustment of approximately $6.4 million has been
included in accounts receivable in the accompanying unaudited Pro Forma
Consolidated Balance Sheet. Any additional proceeds received as a result of
such adjustment will be used to reduce senior subordinated debt. Management
does not expect such adjustment to result in a reduction of the gross proceeds.
The pro forma financial information should be read in conjunction with the
Company's historical consolidated financial statements and notes thereto in its
1993 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.
In the Form 10-Q for the period ended April 30, 1994, filed June 20, 1994, the
sale of the Automotive Assets was given discontinued operations treatment in
the unaudited Pro Forma Consolidated Condensed Statement of Operations for the
six months ended April 30, 1994 (in this Form 8-K, certain previously reported
expense amounts were reclassified between income from continuing operations and
discontinued operations) and in the April 30, 1994 unaudited Pro Forma
Consolidated Condensed Balance Sheet. Accordingly, the historical amounts in
this Form 8-K for such periods reflect the discontinued operations treatment.
There has not been a prior public filing where the Automotive Assets were given
discontinued operations treatment in the unaudited Pro Forma Consolidated
Condensed Statement of Operations for the year ended October 30, 1993.
Accordingly, the pro forma adjustments to the unaudited Pro Forma Consolidated
Condensed Statement of Operations for the year ended October 30, 1993 reflect
all adjustments necessary to remove the operating results of the Automotive
Assets from those of the Company.
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JPS TEXTILE GROUP, INC.
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
APRIL 30, 1994
(In Thousands)
<TABLE>
<CAPTION>
Pro Forma Adjustments
------------------------- Pro
Historical Auto Other Forma
---------- ---------- --------- ---------
(a)
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash $ 1,220 $ 1,220
Accounts receivable 89,419 $ 6,380 (b) 95,799
Inventories 80,872 80,872
Prepaid expenses and other 3,239 (1,618)(c) 1,621
Net assets held for sale 90,757 $ (90,757)
---------- ---------- --------- ---------
Total current assets 265,507 (90,757) 4,762 179,512
Property, plant and equipment, net 213,288 213,288
Excess of cost over fair value of
net assets acquired, net 32,937 32,937
Long-term investments 39,500 (c) 39,500
Other assets 4,562 799 2,500 (c) 4,125
(3,736)(d)
---------- ---------- --------- ---------
TOTAL $ 516,294 $ (89,958) $ 43,026 $ 469,362
========== ========== ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 40,826 $ 40,826
Accrued interest 16,122 $ 192 $ (3,958)(c) 12,356
Accrued salaries, benefits and withholdings 13,963 1,645 (1,645)(c) 13,963
Other accrued expenses 10,867 10,867
Current portion of long-term debt 8,851 8,851
---------- ---------- --------- ---------
Total current liabilities 90,629 1,837 (5,603) 86,863
Long-term debt 498,570 29,184 (207,484)(c) 320,270
Other long-term liabilities 25,327 271 25,598
---------- ---------- --------- ---------
Total liabilities 614,526 31,292 (213,087) 432,731
---------- ---------- --------- ---------
Senior redeemable preferred stock 22,635 22,635
---------- ---------- --------- ---------
Shareholders' equity (deficit):
Junior preferred stock 250 250
Common stock 10 10
Additional paid-in capital 35,149 6,380 (b) 35,149
Equity (deficit) (156,276) (121,250) 253,469 (c) (21,413)
(3,736)(d)
---------- ---------- --------- ---------
Total shareholders' equity (deficit) (120,867) (121,250) 256,113 13,996
---------- ---------- --------- ---------
TOTAL $ 516,294 $ (89,958) $ 43,026 $ 469,362
========== ========== ========= =========
</TABLE>
See notes to pro forma consolidated condensed financial information.
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JPS TEXTILE GROUP, INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1994
(Dollars In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Pro Forma Adjustments
------------------------- Pro
Historical Auto Other Forma
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(a)
<S> <C> <C> <C> <C>
Net sales $ 285,457 $ 285,457
Cost of sales 247,365 247,365
---------- ----------
Gross profit 38,092 38,092
Selling, general and administrative expenses 32,144 32,144
---------- ----------
Income from continuing operations 5,948 5,948
Interest expense, net 31,157 $ 1,297 $ (10,483)(e) 21,971
Other income (expense), net 42 42
---------- ---------- --------- ----------
Loss before provision for income taxes and
income from discontinued operations (25,167) (1,297) 10,483 (15,981)
Provision for income taxes 1,351 165 (f) 1,516
---------- ---------- --------- ----------
Loss before income from discontinued
operations (26,518) (1,297) 10,318 (17,497)
Income from discontinued operations 18,382 (18,382) -
---------- ---------- --------- ----------
Net loss (8,136) (19,679) 10,318 (17,497)
Senior redeemable preferred stock in-kind
dividends and discount accretion 1,627 1,627
---------- ---------- --------- ----------
Loss applicable to common stock $ (9,763) $ (19,679) $ 10,318 $ (19,124)
========== ========== ========= ==========
Weighted average common shares
outstanding 1,000,000 1,000,000
========== ==========
Earnings (loss) per common share:
Loss before income from discontinued
operations $ (28.14) $ (1.30) $ 10.32 $ (19.12)
Income from discontinued operations 18.38 (18.38) -
---------- ---------- --------- ----------
Net loss $ (9.76) $ (19.68) $ 10.32 $ (19.12)
========== ========== ========= ==========
</TABLE>
See notes to pro forma consolidated condensed financial information.
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JPS TEXTILE GROUP, INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED OCTOBER 30, 1993
(Dollars In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------- Pro
Historical Auto Other Forma
---------- ----------- ------------ ----------
(a)
<S> <C> <C> <C> <C>
Net sales $ 885,683 $ (287,930) $ 597,753
Cost of sales 750,934 (238,746) 512,188
---------- ---------- ----------
Gross profit 134,749 (49,184) 85,565
Selling, general and administrative expenses 80,209 (20,272) 59,937
---------- ---------- ----------
Income from operations 54,540 (28,912) 25,628
Interest expense, net 65,322 (623) $ (22,510)(e) 42,189
Minority interest in consolidated subsidiary (981) 981
Other income (expense), net (1,414) 193 (1,221)
---------- ---------- --------- ----------
Loss before provision for income taxes and
cumulative effect of accounting change (13,177) (27,115) 22,510 (17,782)
Provision for income taxes 2,000 (357) 243 (f) 1,886
---------- ---------- --------- ----------
Loss before cumulative effect of
accounting change (15,177) (26,758) 22,267 (19,668)
Cumulative effect of accounting change 6,654 (938) 5,716
---------- ---------- --------- ----------
Net loss (21,831) (25,820) 22,267 (25,384)
Senior redeemable preferred stock in-kind
dividends and discount accretion 2,863 2,863
---------- ---------- --------- ----------
Loss applicable to common stock $ (24,694) $ (25,820) $ 22,267 $ (28,247)
========== ========== ========= ==========
Weighted average common shares
outstanding 1,000,000 1,000,000
========== ==========
Earnings (loss) per common share:
Loss before cumulative effect of
accounting change $ (18.04) $ (26.76) $ 22.27 $ (22.53)
Cumulative effect of accounting change (6.65) 0.94 (5.72)
---------- ---------- --------- ----------
Net loss $ (24.69) $ (25.82) $ 22.27 $ (28.25)
========== ========== ========= ==========
</TABLE>
See notes to pro forma consolidated condensed financial information.
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JPS TEXTILE GROUP, INC.
NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
(a) To eliminate the net assets held for sale in the April 30, 1994
unaudited Pro Forma Consolidated Condensed Balance Sheet, the effect
of the discontinued operations in the unaudited Pro Forma Consolidated
Condensed Statement of Operations for the six months ended April 30,
1994 and the effect of the sale of the Automotive Assets in the
unaudited Pro Forma Consolidated Condensed Statement of Operations for
the year ended October 30, 1993.
(b) To reflect as a receivable the estimated pro forma purchase price
adjustment based on the April 30, 1994 unaudited net assets held for
sale.
(c) To reflect debt reduction as follows: $215 million used to reduce
$66 million of bank debt, $102 million of senior secured notes and $47
million (carrying value of $43 million net of discounts recorded) of
senior subordinated debt (including related accrued interest amounts).
The respective amounts of debt reduction described above are for
purposes of presentation of the unaudited Pro Forma Consolidated
Condensed Balance Sheet as of April 30, 1994 and do not reflect the
actual debt reduction that will occur as described herein.
In addition, $39.5 million was invested in long-term securities and
designated by management to be available to satisfy possible
contingent tax liabilities. $7.6 million was used to pay taxes and
certain expenses of the sale of the Automotive Assets. $1.6 million
of fees and expenses of the sale of the Automotive Assets had
previously been recorded as a prepaid asset. Certain accrued
incentive compensation of $1.6 million was paid as of April 30, 1994.
(d) To reflect the write-off of the unamortized amount of certain debt
issuance costs associated with debt that was paid off with the
proceeds of the sale of the Automotive Assets.
(e) To reflect reduced interest expense associated with the reduction in
long-term debt and interest income on investments.
(f) To reflect an increase in state taxes resulting from the decrease in
interest expense described in note (e).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JPS TEXTILE GROUP, INC.
By: /s/ David H. Taylor
----------------------------
David H. Taylor
Executive Vice President -
Finance and Secretary
Date: July 13, 1994
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Exhibit Index
Exhibit No. Description of Exhibit
20.1 Press release issued by the Company on June 28, 1994.*
99.1 Asset Purchase Agreement, dated as of May 25, 1994,
by and among the Company, JPS Auto Inc., a Delaware
corporation, JPS Converter and Industrial Corp., a
Delaware corporation, JPS Automotive Products Corp.,
a Delaware corporation, and Foamex International
Inc., a Delaware corporation.**
______________________
* Filed herewith
** Previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the quarterly period ending April 30, 1994.
10
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Exhibit 20.1
CONTACT: Kekst and Company
Wendi Kopsick
James Fingeroth
(212) 593-2655
FOR IMMEDIATE RELEASE
JPS TEXTILE GROUP COMPLETES SALE OF
AUTOMOTIVE PRODUCTS AND SYNTHETIC INDUSTRIAL FABRICS
BUSINESS TO FOAMEX INTERNATIONAL
GREENVILLE, SOUTH CAROLINA, June 28, 1994 -- JPS Textile Group, Inc. announced
today that it has completed the sale of its automotive products and synthetic
industrial fabrics businesses to JPS Automotive Products Corp., a wholly-owned
subsidiary of Foamex International Inc. (NASDAQ: FMXI), for approximately $276
million (which includes approximately $12 million in assumed long-term debt),
subject to post-closing adjustments.
The net cash proceeds available for debt reduction are approximately $213
million after reserves for taxes, fees and other expenses, which the Company
expects to approximate $51 million. In accordance with the terms of the
Company's various credit agreements and indentures, the Company will apply the
net cash proceeds to pay all outstanding borrowings under its bank credit
agreement of approximately $166 million and then, within 30 days, utilize the
remaining approximately $47 million to make offers to redeem, in order of
priority at par plus accrued interest, the Company's outstanding senior
subordinated notes, senior subordinated discount notes and junior subordinated
debentures. JPS Textile Group currently has outstanding $125 million principal
amount of its senior subordinated notes and approximately $151 million accreted
value of its senior subordinated discount notes, which are of equal priority,
and $75 million principal amount of its junior subordinated debentures.
Contemporaneously with the closing of the asset sale, JPS Textile Group has
entered into a new $135 million revolving credit facility and will use bank
borrowings to redeem all $93.5 million principal amount of its outstanding
senior secured notes.
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JPS Textile Group estimates that these transactions will result in net
reduction in debt as follows:
<TABLE>
<CAPTION>
Reduction of: Millions
<S> <C>
Bank debt $ 72
Senior secured notes 94
Senior subordinated notes 22
Senior subordinated discount notes 25
$213
----
</TABLE>
JPS Textile Group intends to promptly amend its existing shelf registration
statement on file with the Securities and Exchange Commission to reflect the
asset sale, reduction of indebtedness and other matters. Copies of the updated
prospectus will be made available to security holders of JPS Textile Group.
JPS Textile Group is one of the largest diversified domestic manufacturers of
textile and textile related products, principally for the apparel fabric,
industrial and home fashion markets.
2
