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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): September 30, 1999
WESTPOINT STEVENS INC.
(Exact Name of Registrants as Specified in their Charters)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-21496 36-3498354
(Commission File Numbers) (I.R.S. Employer Identification Nos.)
507 WEST TENTH STREET 31833
WEST POINT, GEORGIA
(Address of Principal Executive Offices) (Zip Code)
(706) 645-4000
(Registrants' Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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NY2:\843382\01\$2R@01!.DOC\80765.0004
<PAGE>
Item 5. Other Events.
On October 14, 1999, WestPoint Stevens released a press release
reporting results for the third quarter and nine months ended September
30, 1999, a copy of which is attached hereto as Exhibit 99.1. A copy of
WestPoint Stevens' Condensed Consolidated Statement of Cash Flows
(unaudited) for the nine months ended September 30, 1999, and Condensed
Consolidated Statement of Stockholders' Equity (Deficit) at September
30, 1999 is attached hereto as Exhibit 99.2.
Exhibit No. Exhibit
99.1 Press Release dated October 14, 1999
99.2 Condensed Consolidated Statement of Cash Flows (unaudited) for
the nine months ended September 30, 1999 and 1998 and
Condensed Consolidated Statement of Stockholders' Equity
(Deficit) at September 30, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
WESTPOINT STEVENS INC.
(Registrant)
By: /s/ Christopher N. Zodrow
-------------------------------
Date: October 26, 1999 Christopher N. Zodrow
Vice President and Secretary
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
----------- -------
99.1 Press Release dated October 14, 1999
99.2 Condensed Consolidated Statement of Cash Flows
(unaudited) for the nine months ended September 30,
1999 and 1998 and Condensed Consolidated Statement of
Stockholders' Equity (Deficit) at September 30, 1999
Exhibit 99.1
[GRAPHIC OMITTED]
WESTPOINT STEVENS INC.
NEWS RELEASE
Contact: Morgan M. Schuessler
Executive Vice President/Finance
and Chief Financial Officer
(706) 645-4230
FOR IMMEDIATE RELEASE
WESTPOINT STEVENS INC. REPORTS
1999 THIRD QUARTER DILUTED NET INCOME PER SHARE
INCREASED 18% TO $.67 PER SHARE
WEST POINT, GA, October 14, 1999 -- WestPoint Stevens Inc. (Nasdaq/NM:WPSN;
effective 10/15/99, new NYSE Symbol: WXS) (www.westpointstevens.com) today
reported results for the third quarter and nine months ended September 30, 1999.
The Company's net sales for the third quarter of 1999 set a new quarterly sales
record for WestPoint Stevens of $503.1 million and increased $29.9 million, or
6.3%, compared with net sales of $473.2 million for the third quarter of 1998.
Excluding the sales of Liebhardt Mills, which was acquired during the fourth
quarter of 1998, net sales increased approximately 3.5%. Net income for the
third quarter of 1999 increased to $38.1 million, or $.67 per share diluted (an
18% earnings per share increase), compared with net income of $34.1 million, or
$.57 per share diluted, for the third quarter of 1998. Operating earnings for
the third quarter of 1999 were $86.5 million, or 17.2% of sales, compared with
operating earnings of $79.3 million, or 16.8% of sales, for the same period of
1998.
Net sales and net income in the current quarter were negatively impacted by
weather related disruptions associated with Hurricane Floyd. Two of the North
Carolina facilities were closed approximately two days due to loss of electrical
power and employee safety considerations, but fortunately the facilities did not
suffer any significant physical damage. Customer shipments following the storm
were also impaired by the difficulty shippers encountered in reaching one of the
distribution centers due to highway closures. September weather related
disruptions negatively impacted third quarter sales by approximately $3 million,
net income by approximately $0.7 million and earnings per share by approximately
$.01.
1
<PAGE>
Net sales for the first nine months of 1999 increased $89.2 million, or 6.8%, to
$1,398.1 million compared with net sales of $1,308.9 million for the first nine
months of 1998. Net income for the first nine months of 1999 increased to $73.3
million, or $1.28 per share diluted (a 25% earnings per share increase),
compared with net income (before extraordinary item) of $61.6 million, or $1.02
per share diluted, for the first nine months of 1998. During the second quarter
of last year, the Company recorded an extraordinary charge related to the early
extinguishment of debt. Net income for the first nine months of 1998 after the
extraordinary charge was $11 million. Operating earnings for the first nine
months of 1999 were $192.2 million, or 13.7% of sales, compared with operating
earnings of $176.3 million, or 13.5% of sales, for the same period of 1998.
Holcombe T. Green, Jr., Chairman and Chief Executive Officer, said "we are very
pleased with WestPoint Stevens' strong performance as shown by the 25% increase
in earnings per share for the year to date."
WestPoint Stevens Inc. is a home fashions consumer products marketing company,
with a comprehensive line of Company-owned and licensed brands for the bedroom
and bathroom. The Company is vertically integrated, and is the nation's leading
manufacturer and marketer of bed linens, towels, comforters, and other
accessories that are sold in retail outlets throughout the world. WestPoint
Stevens' home fashions consumer products are marketed under the well-known brand
names of GRAND PATRICIAN, MARTEX, UTICA, STEVENS, LADY PEPPERELL and VELLUX, and
under licensed brands including RALPH LAUREN HOME COLLECTION, SANDERSON, STAR
WARS, ESPRIT, JOE BOXER and SERTA PERFECT SLEEPER.
-table follows-
------------------------------------------------
This press release contains statements which are
forward looking statements within the meaning of
applicable federal securities laws and are based
upon the Company's current expectations and
assumptions which are subject to a number of
risks and uncertainties which could cause actual
results to materially differ from those
anticipated. Primary factors that could cause
actual results to differ are discussed in the
Company's Form 10-K for the year ended December
31, 1998.
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2
<PAGE>
WESTPOINT STEVENS INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ------------------------
1999 1998 1999 1998
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales................................... $503.1 $473.2 $1,398.1 $1,308.9
Operating earnings.......................... $86.5 $79.3 $192.2 $176.3
Income before extraordinary item............ $38.1 $34.1 $73.3 $61.6
Extraordinary item - loss on early
extinguishment of debt............... - - - (50.6)
------ ------ ------- ------
Net income.................................. $38.1 $34.1 $73.3 $11.0
Basic net income (loss) per common share:
Income before extraordinary item..... $ .69 $ .59 $1.32 $1.06
Extraordinary item - loss on early
extinguishment of debt........ - - - (.87)
------ ------ ------- ------
Net income per common share.......... $ .69 $ .59 $1.32 $ .19
Diluted net income (loss) per common share:
Income before extraordinary item..... $ .67 $ .57 $1.28 $1.02
Extraordinary item - loss on early
extinguishment of debt........ - - - (.84)
------ ------ ------- ------
Net income per common share.......... $ .67 $ .57 $1.28 $ .18
Basic average common shares outstanding..... 55.1 57.4 55.6 58.2
Dilutive effect of stock options and
stock bonus plan.............. 1.5 2.3 1.7 2.2
------ ------ ------- ------
Diluted average common shares outstanding... 56.6 59.7 57.3 60.4
</TABLE>
3
<PAGE>
October 14, 1999
To Our Stockholders:
Today we reported the results of WestPoint Stevens Inc. for the third
quarter and nine months ended September 30, 1999.
The Company's net sales for the third quarter of 1999 set a new quarterly
sales record for WestPoint Stevens of $503.1 million and increased $29.9
million, or 6.3%, compared with net sales of $473.2 million for the third
quarter of 1998. Excluding the sales of Liebhardt Mills, which was
acquired during the fourth quarter of 1998, net sales increased
approximately 3.5%. Net income for the third quarter of 1999 increased to
$38.1 million, or $.67 per share diluted (an 18% earnings per share
increase), compared with net income of $34.1 million, or $.57 per share
diluted, for the third quarter of 1998. Operating earnings for the third
quarter of 1999 were $86.5 million, or 17.2% of sales, compared with
operating earnings of $79.3 million, or 16.8% of sales, for the same
period of 1998.
Net sales and net income in the current quarter were negatively impacted
by weather related disruptions associated with Hurricane Floyd. Two of our
North Carolina facilities were closed approximately two days due to loss
of electrical power and employee safety considerations, but fortunately
the facilities did not suffer any significant physical damage. Customer
shipments following the storm were also impaired by the difficulty
shippers encountered in reaching one of our distribution centers due to
highway closures. September weather related disruptions negatively
impacted third quarter sales by approximately $3 million, net income by
approximately $0.7 million and earnings per share by approximately $.01.
Net sales for the first nine months of 1999 increased $89.2 million, or
6.8%, to $1,398.1 million compared with net sales of $1,308.9 million for
the first nine months of 1998. Net income for the first nine months of
1999 increased to $73.3 million, or $1.28 per share diluted (a 25%
earnings per share increase), compared with net income (before
extraordinary item) of $61.6 million, or $1.02 per share diluted, for the
first nine months of 1998. During the second quarter of last year, the
Company recorded an extraordinary charge related to the early
extinguishment of debt. Net income for the first nine months of 1998 after
the extraordinary charge was $11 million. Operating earnings for the first
nine months of 1999 were $192.2 million, or 13.7% of sales, compared with
operating earnings of $176.3 million, or 13.5% of sales, for the same
period of 1998.
4
<PAGE>
As of September 30, 1999, the Company had purchased approximately 3.4 million
shares during 1999 under its various stock repurchase programs, at an average
price of $26.46 per share. In September 1999, the Board of Directors approved
the purchase of up to four million additional shares of the Company's common
stock, subject to the Company's debt limitations, which brings the total shares
that have been approved for purchase to twenty-three million shares. At
September 30, 1999, approximately 5.5 million shares remained to be purchased
under these programs representing approximately 10.2% of the outstanding stock.
Attached to this letter are selected condensed consolidated financial statements
of the Company at September 30, 1999 with comparisons to 1998. We also encourage
you to visit the Company's web site at www.westpointstevens.com for additional
information about the Company.
On October 1, 1999, WestPoint Stevens announced that the Company had applied for
listing of its common stock on the New York Stock Exchange (NYSE). By listing on
the New York Stock Exchange, WestPoint Stevens will increase its global
visibility and broaden its investor base.
We are very pleased with WestPoint Stevens' strong performance as shown by the
25% increase in earnings per share for the year to date. Listing our common
stock on the New York Stock Exchange should further enhance shareholder value.
Very truly yours,
Holcombe T. Green, Jr.
Chairman of the Board and
Chief Executive Officer
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This letter contains statements which are forward looking statements
within the meaning of applicable federal securities laws and are
based upon the Company's current expectations and assumptions which
are subject to a number of risks and uncertainties which could cause
actual results to materially differ from those anticipated. Primary
factors that could cause actual results to differ are discussed in
the Company's Form 10-K for the year ended December 31, 1998.
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5
<PAGE>
WESTPOINT STEVENS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1999 1998 1999 1998
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales............................................ $503,065 $473,231 $1,398,102 $1,308,918
Cost of goods sold................................... 359,303 338,783 1,022,579 961,677
------- ------- --------- ----------
Gross earnings................................. 143,762 134,448 375,523 347,241
Selling, general and administrative expenses......... 57,192 55,135 183,284 170,952
-------- -------- ---------- ----------
Operating earnings............................. 86,570 79,313 192,239 176,289
Interest expense..................................... 26,268 25,840 75,662 79,079
Other expense, net................................... 659 155 1,834 887
-------- -------- ---------- ----------
Income before income tax expense and
extraordinary item....................... 59,643 53,318 114,743 96,323
Income tax expense................................... 21,500 19,225 41,400 34,750
-------- -------- ---------- ----------
Income before extraordinary item................ 38,143 34,093 73,343 61,573
Extraordinary item - loss on early extinguishment
of debt (net of tax benefit of $28,474).. - - - (50,621)
-------- -------- ---------- ----------
Net income..................................... $ 38,143 $ 34,093 $ 73,343 $ 10,952
======== ======== ========== ==========
Basic net income (loss) per common share:
Income before extraordinary item............... $ .69 $ .59 $1.32 $1.06
Extraordinary item - loss on early
extinguishment of debt................... - - - (.87)
------ ------ ------ ------
Net income per common share.................... $ .69 $ .59 $1.32 $ .19
====== ====== ====== ======
Diluted net income (loss) per common share:
Income before extraordinary item............... $ .67 $ .57 $1.28 $1.02
Extraordinary item - loss on early
extinguishment of debt................... - - - (.84)
------ ------ ------ ------
Net income per common share.................... $ .67 $ .57 $1.28 $ .18
====== ====== ====== ======
Basic average common shares outstanding.............. 55,134 57,356 55,569 58,160
Dilutive effect of stock options and
stock bonus plan......................... 1,460 2,299 1,689 2,248
------ ------ ------ ------
Diluted average common shares outstanding............ 56,594 59,655 57,258 60,408
====== ====== ====== ======
</TABLE>
6
<PAGE>
WESTPOINT STEVENS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1999 1998 1998
---------------- ----------------- ------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents...................... $ 161 $ 527 $ 11,000
Accounts receivable............................ 110,980 70,086 121,564
Inventories.................................... 436,666 381,022 376,805
Prepaid expenses and other current assets...... 20,137 18,051 22,784
----------- ---------- -----------
Total current assets.............................. 567,944 469,686 532,153
Property, Plant and Equipment, net................ 791,198 776,939 746,200
Other Assets
Deferred financing fees........................ 20,100 21,102 21,875
Prepaid pension and other assets............... 55,628 52,257 46,666
Goodwill....................................... 69,890 71,227 36,517
----------- ----------- -----------
$1,504,760 $1,391,211 $1,383,411
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Senior Credit Facility......................... $ 154,181 $ 60,400 $ 20,432
Current portion of long-term debt.............. - - 38,227
Accrued interest payable....................... 24,228 4,777 26,495
Trade accounts payable......................... 57,611 85,908 67,367
Other accounts payable and
accrued liabilities........................ 145,993 140,423 153,152
---------- ---------- ----------
Total current liabilities......................... 382,013 291,508 305,673
Long-Term Debt.................................... 1,275,000 1,275,000 1,275,000
Noncurrent Liabilities
Deferred income taxes.......................... 270,848 236,328 219,999
Other liabilities.............................. 70,678 75,827 79,587
---------- ---------- ----------
Total noncurrent liabilities...................... 341,526 312,155 299,586
Stockholders' Equity (Deficit).................... (493,779) (487,452) (496,848)
---------- ---------- ----------
$1,504,760 $1,391,211 $1,383,411
========== ========== ==========
</TABLE>
7
Exhibit 99.2
WESTPOINT STEVENS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1999 1998
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................. $ 73,343 $ 10,952
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and other amortization.............. 64,421 62,638
Deferred income taxes............................ 38,386 3,314
Changes in working capital....................... (108,594) (40,349)
Other - net...................................... (6,410) 183
Extraordinary item - loss on early
extinguishment of debt...................... - 79,095
----------- ---------
Net cash provided by operating activities..................... 61,146 115,833
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................................... (78,264) (101,649)
Net proceeds from sale of assets........................ 497 573
----------- ---------
Net cash used for investing activities...................... (77,767) (101,076)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Senior Credit Facility:
Borrowings....................................... 698,621 913,919
Repayments....................................... (604,840) (781,170)
Principal payments on long-term debt.................... - (986,773)
Net proceeds from Trade Receivables Program............. 10,000 5,660
Purchase of common stock for treasury................... (90,630) (91,315)
Proceeds from sale of notes............................. - 1,000,000
Proceeds from issuance of stock......................... 5,368 2,764
Dividends paid.......................................... (2,264) -
Fees associated with refinancing........................ - (84,275)
----------- ---------
Net cash provided by financing activities..................... 16,255 (21,190)
----------- ---------
Net decrease in cash and cash equivalents..................... (366) (6,433)
Cash and cash equivalents at beginning of period.............. 527 17,433
----------- ---------
Cash and cash equivalents at end of period.................... $ 161 $ 11,000
=========== =========
</TABLE>
<PAGE>
WESTPOINT STEVENS INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON
STOCK
AND CAPITAL
IN ACCUMULATED
EXCESS OF OTHER
COMMON PAR TREASURY STOCK ACCUMULATED COMPREHENSIVE
SHARES VALUE SHARES AMOUNT DEFICIT INCOME (LOSS) TOTAL
------ ----- ------ ------ ------- ------------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1999.............. 70,862 $343,437 (14,577) $(242,844) $(585,115) $(2,930) $(487,452)
Comprehensive income:
Net income................... - - - - 73,343 - 73,343
Foreign currency translation
adjustment................. 684 684
---------
Comprehensive income............ 74,027
---------
Exercise of management stock options
including tax benefit................. 238 7,480 327 (213) - - 7,267
Issuance of stock pursuant to Stock
Bonus Plan including tax benefit. - 2,080 295 3,193 - - 5,273
Purchase of treasury shares........... - - (3,425) (90,630) - - (90,630)
Cash dividends ($.02 per share)....... - - - - (2,264) - (2,264)
------- -------- -------- --------- --------- ------- ---------
Balance, September 30, 1999........... 71,100 $352,997 (17,380) $(330,494) $(514,036) $(2,246) $(493,779)
======= ======== ======== ========= ========= ======= =========
</TABLE>