<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 1, 1995
-------------------------------------------
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 0-18446
Fairwood Corporation
---------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 13-3472113
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Commerce Center
1201 N. Orange St., Suite 790, Wilmington, DE 19801
--------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
</TABLE>
(302) 884-6749
--------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(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, 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 practical date.
<TABLE>
<CAPTION>
Outstanding at
Class July 1, 1995
----- --------------
<S> <C>
Class A Voting, $.01 Par Value 500
------------------------------ ------------------------
Class B Non-Voting, $.01 Par Value 999,800
---------------------------------- ------------------------
</TABLE>
<PAGE> 2
FAIRWOOD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands except share data)
<TABLE>
<CAPTION>
July 1, December 31,
Assets 1995 1994
------ ------------ ------------
(Unaudited) (Audited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 3,091 4,615
-------- --------
Accounts and notes receivable:
Trade 33,460 38,034
Escrows from sale of subsidiary 750 15,750
Other 1,718 1,812
-------- --------
35,928 55,596
Less allowance for discounts and doubtful accounts 3,142 2,756
-------- --------
32,786 52,840
-------- --------
Inventories 17,356 18,813
Prepaid expenses and other current assets 2,773 2,499
-------- --------
Total current assets 56,006 78,767
-------- --------
Property, plant and equipment, at cost 19,972 20,013
Less accumulated depreciation and amortization 5,633 5,948
-------- --------
14,339 14,065
-------- --------
Other assets 2,341 2,732
-------- --------
$ 72,686 95,564
======== ========
</TABLE>
(Continued)
- 2 -
<PAGE> 3
FAIRWOOD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands except share data)
<TABLE>
<CAPTION>
July 1, December 31,
Liabilities and Deficit 1995 1994
----------------------- ------------ ------------
(Unaudited) (Audited)
<S> <C> <C>
Current Liabilites:
Current maturities of long-term debt:
Revolving credit $ 167,321 -
Senior subordinated debentures 80,000 -
Senior subordinated pay-in-kind debentures 105,853 -
Merger debentures 62,928 -
Other 170 160
Accounts payable 7,838 8,621
Accrued expenses 32,968 20,740
Federal and state income taxes 5,722 5,725
-------- --------
Total current liabilities 462,800 35,246
-------- --------
Long-term debt:
Revolving credit - 165,870
Senior subordinated debentures - 80,000
Senior subordinated pay-in-kind debentures - 105,853
Merger debentures - 62,928
Other 370 540
-------- --------
370 415,191
-------- --------
Deferred income taxes 1,359 1,359
Other liabilities 4,150 4,346
-------- --------
5,509 5,705
-------- --------
Redeemable preferred stock:
Junior preferred, cumulative, par value $.01 per share 100 100
-------- --------
Common stock and other shareowners' deficit:
Common stock and additional paid-in capital 55,948 55,948
Minimum pension liability ( 1,367) ( 1,367)
Retained deficit ( 450,674) ( 415,259)
-------- --------
( 396,093) ( 360,678)
-------- --------
$ 72,686 95,564
======== ========
</TABLE>
See accompanying notes to the Unaudited Condensed Consolidated Financial
Statements.
- 3 -
<PAGE> 4
FAIRWOOD CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- -----------------------
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net sales $ 42,361 68,490 97,804 136,683
------- ------- ------- -------
Cost of sales 38,724 58,795 88,485 117,248
Selling, administrative and
general expenses 7,243 9,285 15,078 19,066
------- ------- ------- -------
45,967 68,080 103,563 136,314
------- ------- ------- -------
Operating income (loss) ( 3,606) 410 ( 5,759) 369
Interest income 13 33 103 54
Interest on indebtedness ( 14,646) ( 13,439) ( 29,057) ( 25,910)
Other expenses, net ( 369) ( 426) ( 679) ( 927)
------- ------- ------- -------
Loss before income taxes ( 18,608) ( 13,422) ( 35,392) ( 26,414)
Provision for income taxes - - - -
------- ------- ------- -------
Net loss $( 18,608) ( 13,422) ( 35,392) ( 26,414)
======= ======= ======= =======
</TABLE>
See accompanying notes to the Unaudited Condensed Consolidated Financial
Statements.
- 4 -
<PAGE> 5
FAIRWOOD CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------
July 1, July 2,
1995 1994
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss $( 35,392) ( 26,414)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 1,022 1,960
Gain on disposal of property, plant and equipment ( 53) ( 51)
Current period interest converted to pay-in-kind
debentures - 5,790
Changes in assets and liabilities:
Accounts receivable 5,054 4,011
Inventories 1,457 147
Prepaid expenses and other current assets ( 274) ( 46)
Accounts payable ( 783) ( 592)
Accrued expenses 12,228 5,330
Other, net 192 359
-------- -------
Cash used - operating activities ( 16,549) ( 9,506)
-------- -------
Cash flows from investing activities:
Proceeds from sale of Super Sagless assets 15,000 -
Dispostion of property, plant and equipment 421 52
Capital expenditures ( 1,664) ( 1,833)
------- -------
Cash provided (used) - investing activities 13,757 ( 1,781)
------- -------
Cash flows from financing activities:
Proceeds from long-term debt 15,451 17,249
Repayment of long-term debt ( 14,160) ( 2,650)
Dividends ( 23) ( 19)
------- -------
Cash provided - financing activities 1,268 14,580
------- -------
Increase (decrease) in cash and cash equivalents ( 1,524) 3,293
Cash and cash equivalents:
Beginning of period 4,615 3,968
------- -------
End of period $ 3,091 7,261
======= =======
Supplemental schedule of cash flow information
----------------------------------------------
Cash paid during year for:
Interest $ 15,451 13,824
Income taxes 3 79
Conversion of accrued interest to pay-in-kind debentures - 11,581
</TABLE>
Cash and cash equivalents include cash in banks and highly-liquid short-term
investments having a maturity of three months or less on date of purchase.
See accompanying notes to the Unaudited Condensed Consolidated Financial
Statements.
- 5 -
<PAGE> 6
FAIRWOOD CORPORATION AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements include all adjustments, consisting of
only normal recurring adjustments, to present fairly the results of
operations for the three and six months ended July 1, 1995 and July 2,
1994, the financial position at July 1, 1995 and December 31, 1994 and the
cash flows for the six months ended July 1, 1995 and July 2, 1994. The
results of operations for the three and six month periods ended July 1,
1995 are not necessarily indicative of the results to be expected for the
full year.
2. The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company's audited financial
statements included in the 1994 annual report on Form 10-K.
3. All inventories (materials, labor and overhead) are valued at the lower of
cost or market using the last-in, first-out (LIFO) method. The components
of inventory, in thousands, are as follows:
<TABLE>
<CAPTION>
July 1, 1995 December 31, 1994
------------- -----------------
(Unaudited) (Audited)
<S> <C> <C>
Raw materials $ 15,213 14,696
In process 3,488 4,193
Finished goods 11,076 11,914
------ ------
Inventories at
first-in, first-out 29,777 30,803
LIFO reserve 12,421 11,990
------ ------
Inventories at LIFO $ 17,356 18,813
====== ======
</TABLE>
4. No provision for income taxes has been provided during the six months
ended July 1, 1995 and July 2, 1994, as the Company is in a net operating
loss carryforward position.
5. The Internal Revenue Service ("IRS") has examined the Company's Federal
income tax returns for the years 1988 through 1991 and is challenging
certain deductions, of which the most significant involves an effort to
recharacterize interest deductions as dividend distributions. The IRS has
delivered proposed adjustments that approximate a net tax cost of $107
million, including interest through July 1, 1995. The Company believes the
IRS's position with respect to these issues is incorrect and plans to
contest vigorously the proposed adjustments. The Company has delivered to
the IRS a protest of the proposed adjustments and is in the process of
negotiating the issues with the IRS Appeals Office. The Company cannot
predict the ultimate outcome nor the impact on its financial statements,
if any.
6. On April 1, 1995, the Company failed to make the required interest
payments due on the senior subordinated pay-in-kind debentures and merger
debentures (collectively, the "Fairwood Debentures"). Counsel for the
Company has had preliminary discussions with counsel for a group of
merger debenture holders, who are in the process of attempting to form
an ad hoc committee to address the payment default under the merger
debentures.
- 6 -
<PAGE> 7
FAIRWOOD CORPORATION AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
7. Consolidated Furniture's revolving line of credit and senior subordinated
debentures mature on January 2, 1996 and, accordingly, have been
classified as current liabilities in the accompanying condensed
consolidated balance sheet of the Company as of July 1, 1995.
Consolidated Furniture expects to negotiate an extension of these maturity
dates with the lender, Court Square Capital Limtited, or refinance such
indebtedness prior to January 2, 1996.
Based on the terms of the Fairwood Debentures, the failure to make the
April 1, 1995 interest payment (See note 6) constitutes an event of
default which permits the acceleration of the Fairwood Debentures by
demand of the holders of the requisite aggregate principal amount of the
debentures, subject to a 180-day acceleration blockage provision. Upon
acceleration, the Fairwood Debentures would be currently due and payable.
Accordingly, the Fairwood Debentures have been classified as current
liabilities in the accompanying condensed consolidated balance sheet as
of July 1, 1995.
- 7 -
<PAGE> 8
Item 2.
FAIRWOOD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At July 1, 1995, Fairwood Corporation ("Fairwood") had short- and long-term
debt of approximately $416.6 million of which approximately $416.3 million was
current. At July 1, 1995, $353.2 million of the Company's total debt is owed
to Court Square Capital Limited ("CSCL"), an affiliate. Short- and long-term
debt was approximately $415.4 million at December 31, 1994, of which $351.7
million was owed to CSCL. The Company's outstanding indebtedness includes its
senior subordinated pay-in-kind debentures and subordinated pay-in-kind
(merger) debentures (collectively, the "Fairwood Debentures"). The
Company had the option during the first five years to pay interest on the
Fairwood Debentures either through cash payments or through the distribution of
additional securities.
Fairwood is a holding company with no operations. Fairwood has effectively no
cash flow from its subsidiaries because the cash produced by the operations of
the subsidiaries is not expected for the foreseeable future to be sufficient to
permit the subsidiaries to transfer funds to Fairwood sufficient to make cash
interest payments on the Fairwood Debentures. Fairwood's sole asset is the
stock of Consolidated Furniture Corporation ("Consolidated Furniture"), its
wholly-owned subsidiary. Fairwood's obligations under the Fairwood Debentures
are secured by Fairwood's pledge of its interest in Consolidated Furniture's
stock. CSCL, as holder of Fairwood's senior subordinated pay-in-kind
debentures, has a first priority security interest in all of the outstanding
stock of Consolidated Furniture, and the holders of the merger debentures have
a second priority security interest in such stock. The Fairwood Debentures are
obligations of Fairwood. Consolidated Furniture is not an obligor under the
Fairwood Debentures. However, Consolidated Furniture is an obligor under the
Credit Agreement with CSCL. The Credit Agreement does not permit Consolidated
Furniture to borrow funds and transfer them to Fairwood to enable Fairwood to
make cash interest payments on the Fairwood Debentures. The borrowings
under the Credit Agreement are secured by substantially all of the assets of
Consolidated Furniture. Consolidated Furniture is also a holding company
without operations. Its primary asset is the outstanding stock of Furniture
Comfort Corporation ("Furniture Comfort"), which has operations that it
conducts through its two divisions, Stratford and Barcalounger. Furniture
Comfort is also a direct obligor under the Credit Agreement but is not an
obligor on the Fairwood Debentures.
On April 1, 1995, Fairwood failed to make the required interest payments due on
the Fairwood Debentures and Fairwood does not expect to make the cash interest
payments required under the Fairwood Debentures on October 1, 1995. Accrued
interest of $20.3 million on the Fairwood Debentures, which include $12.3
million due to CSCL, is included in accrued expenses on the accompanying
condensed consolidated balance sheet as of July 1, 1995. Counsel for Fairwood
has had preliminary discussions with counsel for a group of merger debenture
holders, who are in the process of attempting to form an ad hoc committee to
address the payment default under the merger debentures.
- 8 -
<PAGE> 9
Based on the terms of the Fairwood Debentures, the failure to make the April 1,
1995 interest payment (see note 6 to the financial statements) constitutes an
event of default which permits the acceleration of the Fairwood Debentures by
the demand of the holders of the requisite aggregate principal amount of the
debentures, subject to a 180-day acceleration blockage provision. Upon
acceleration, the Fairwood Debentures and all accrued interest would be
due and payable. Accordingly, the Fairwood Debentures have been classified as
current liabilities in the accompanying condensed consolidated balance sheet as
of July 1, 1995.
Consolidated Furniture, Fairwood's wholly-owned subsidiary, is expected to
service its interest payment obligations under the Credit Agreement and Senior
Subordinated debentures from its cash flow from operations and
available credit facilities. Throughout 1994 and the first six months of 1995,
Consolidated Furniture funded interest obligations related to long-term
indebtedness on the revolving line of credit and the senior subordinated
debentures through increased borrowings from CSCL under the Credit Agreement.
Borrowings from CSCL during the first six months of 1995 were approximately
$15.5 million. Repayments to CSCL during the quarter were $14 million,
resulting from a portion of the escrowed proceeds received during the first
quarter from the July 1994 sale of the assets of Super Sagless Corporation
("Super Sagless"). Consolidated Furniture is dependent upon CSCL for funding
of its debt service costs. CSCL has in the past increased its revolving credit
line to Consolidated Furniture in order for Consolidated Furniture to meet its
debt service obligations on the revolving line of credit and the senior
subordinated debentures. Under the Credit Agreement, Consolidated Furniture
and its subsidiaries are generally prohibited from transferring moneys to
Fairwood with the exception of amounts for (a) specified administrative
expenses of Fairwood not exceeding $275,000 per year and (b) payment of income
taxes. The senior subordinated debentures, senior subordinated pay-in-kind
debentures and merger debentures also have certain restrictions as to the
payment and transfer of moneys. Management believes that cash flow from
operations and funding from CSCL will be adequate to meet Consolidated
Furniture's obligations on the revolving line of credit and the senior
subordinated debentures through December 31, 1995.
Consolidated Furniture's revolving line of credit and senior subordinated
debentures mature on January 2, 1996 and, accordingly, have been classified as
current liabilities in the accompanying consolidated balance sheet as of July
1, 1995. Consolidated Furniture expects to negotiate an extension of these
maturity dates with CSCL or refinance such indebtedness prior to January 2,
1996. However, there can be no assurances that the Company will be able to
negotiate such an extension, or that the terms of such extension or refinancing
will not be on terms less favorable than those currently in place.
There can be no assurance that Fairwood will be able to continue as a
going concern. The discussions between counsel for Fairwood and counsel for
certain holders of the merger debentures are at too preliminary a stage for the
likely results to be known. Consolidated Furniture, however, expects to
negotiate an extension of the maturity date of the Credit Agreement and senior
subordinated debentures, or refinance such indebtedness prior to its maturity.
There can be no assurance, however, that Consolidated Furniture will be able to
complete such an extension or refinancing or that the terms of such extension
or refinancing will not be on terms less favorable to Consolidated Furniture
than those currently in place.
For a discussion of the status of the IRS examination, refer to the Company's
audited consolidated financial statements as of December 31, 1994 included in
the Company's Form 10-K, and footnote 5 to the Company's unaudited condensed
consolidated financial statements included herein.
Results of Operations
Three Months Ended July 1, 1995 Versus Three Months Ended July 2, 1994
The following discussion presents the material changes in results of operations
which have occurred in the second quarter of 1995 in comparison to the same
period in 1994.
Consolidated net sales were approximately $42.4 million in the second quarter
of 1995, a decrease of 38.2% from last year's second quarter consolidated net
sales of approximately $68.5 million, due in large part to the sale of
substantially all of the assets and liabilities of Super Sagless.
Excluding Super Sagless, net sales for the second quarter of 1995 were
approximately $42.4 million compared to approximately $53.4 for the second
quarter of 1994, a decrease of 20.6%.
- 9 -
<PAGE> 10
Second quarter 1995 net sales (including intercompany sales) by the Stratford
Company decreased 22.8% to approximately $34.5 million as compared to $44.7
million for the comparable period in 1994. Total volume decreased 24.2% during
the second quarter of 1995 as compared to 1994, primarily as a result of
substantially lower sales to smaller retail customers, which decreased 33.3%.
Sales to the smaller retail customers have historically generated less
favorable gross margins than sales to the larger, national customers. Sales
to the larger national retail customers also decreased 12.4%. Industry
analysts, retailers and competitors report a general industry wide slowdown in
retail sales of household furniture and downward inventory adjustments during
the first six months of 1995. Incoming order rates to furniture manufacturers
heve deteriorated significantly. As a result of these circumstances, Stratford
sales have declined sharply. Average selling prices increased between 4% and
7%, depending on the type of product and customer.
Second quarter 1995 net sales by Barcalounger decreased 2.0% to approximately
$8.5 million as compared to $8.6 million for the comparable period in 1994.
This decrease in sales reflects a decrease in total volume of 4%, offset in
part by a 3.2% increase in average sales prices. Barcalounger's sales rate
have slowed as a result of the general industry wide slowdown in retail sales
of household furniture and downward inventory adjustments during the first six
months of 1995, but not as severely as Stratford's because of its positioning
in the higher priced end of the market which was less affected.
Consolidated cost of sales decreased 34.1% in the second quarter of 1995 to
$38.7 million, or 91.4% of net sales, as compared to $58.8 million, or 85.8% of
net sales, in 1994. Excluding Super Sagless, cost of sales were approximately
$38.7 million and $46.8 million for the second quarters of 1995 and 1994,
respectively, or 91.4% and 87.7% of net sales, respectively. Stratford
Company cost of sales increased to 93.1% of net sales in the second quarter of
1995, as compared to 88.6% in the second quarter of 1994. The Stratford
Company has upgraded certain content of its products and experienced certain
raw material price increases since the second quarter of 1994 which have been
the primary contributors to the increase in the cost of sales as a percentage
on net sales. Barcalounger cost of sales increased to 85.1% of net sales in
the second quarter of 1995, as compared to 83.2% of net sales in the second
quarter of 1994. As a result of the general sales slowdown and the resulting
sales decrease Barcalounger's ability to cover its overhead diminished
resulting in an increase in the cost of sales as a percentage of net sales.
Consolidated selling, administrative and general expenses for the second
quarters of 1995 and 1994 were approximately $7.2 million and $9.3 million,
respectively, representing a decrease of 22.0%. Excluding Super Sagless,
selling, administrative and general expenses were approximately $7.2 million in
1995 as compared to $7.5 million in 1994, a decrease of 3.6%. The decrease was
due primarily to decreases in selling commissions as a result of the lower
sales volumes on smaller retail customers which generally have a higher
commission rate, and elimination of certain overhead costs, most notably the
elimination of substantially all of the Company's corporate functions and
facilities, which functions were either transferred to the operating companies
or outsourced at cost savings.
Other expenses, net, was consistent at approximately $.4 million for the second
quarters of 1995 and 1994.
Six Months Ended July 1, 1995 Versus Three Months Ended July 2, 1994
The following discussion presents the material changes in results of operations
which have occurred in the first six months of 1995 in comparison to the same
period in 1994.
- 10 -
<PAGE> 11
Consolidated net sales were approximately $97.8 million in the first six months
of 1995, a decrease of 28.4% from last year's first six months consolidated net
sales of approximately $136.7 million. Excluding Super Sagless, net sales for
the six months of 1995 were approximately $97.8 million compared to
approximately $109.4 for the first six months of 1994, a decrease of 10.6%.
Stratford Company net sales (including intercompany sales) for the first six
months of 1995 decreased 12.1% to approximately $79.9 million as compared to
$90.9 million for the comparable period in 1994. Total volume has decreased
15.1% for the first six months fo 1995 as compared to the first six months of
1994. Sales volume to the smaller retail customers has decreased 25.8%, while
national account sales volume has been relatively flat in the first six months
of 1995 as compared to 1994. This relationship is consistent with Stratford's
current strategy to emphasize the higher volume, higher contribution national
accounts. Industry analysts, Retailers and Competitors report a general
industry wide slowdown in retail sales of household furniture and downward
inventory adjustments during the first six months of 1995. Incoming order
rates to furniture manufacturers heve deteriorated significantly. As a result
of these circumstances, Stratford sales have declined sharply.
Barcalounger net sales for the first six months of 1995 increased 3.9% to
approximately $19.2 million as compared to $18.5 million in 1994, reflective of
a 1.8% increase in the number of pieces sold and 3.2% increase in average
selling prices.
Consolidated cost of sales decreased 24.5% in first six months of 1995 to
approximately $88.5 million, or 90.5% of net sales, as compared to $117.2
million, or 85.8% of net sales, in 1994. Excluding Super Sagless, cost of
sales were approximately $88.5 million and $95.3 million for the first six
months of 1995 and 1994, respectively, or 90.5% and 87.1% of net sales,
respectively. Stratford Company cost of sales increased to 92.5% of net sales
in the first six months of 1995, as compared to 88.1% in the first six months
of 1994. The Stratford Company has upgraded certain content of its products and
experienced certain raw material price increases since the second quarter of
1994 which have been the primary contributors to the increase in the cost of
sales as a percentage on net sales. Barcalounger's cost of sales remained flat
at 82.8% and 82.3% of net sales for the first six months of 1995 and 1994,
respectively.
Consolidated selling, administrative and general expenses for the first six
months of 1995 and 1994 were approximately $15.1 million and $19.1 million,
respectively, representing a decrease of 20.9%. Excluding Super Sagless,
selling, administrative and general expenses were approximately $15.1 million
in 1995 as compared to $15.7 million in 1994, a decrease of 3.8%. The decrease
was due primarily to decreases in selling commissions as a result of the lower
sales volumes on smaller retail customers which generally have a higher
commission rate, and continued organization-wide downsizing, where appropriate,
and the decentralization and transfer of most corporate functions to the
operating companies which was substantially completed in the first six months
of 1994.
Other expense, net, was consistent at approximately $.7 million and $.9 million
for the first six months of 1995 and 1994, respectively.
No income taxes have been provided in the first six months of 1995 and 1994,
respectively, as the Company is in a net operating loss carryforward position.
- 11 -
<PAGE> 12
Part II OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Item 3, Legal Proceedings, previously reported in
the Registrant's Form 10-K for the year ended December 31, 1994 for a
description of pending legal action.
There are certain legal proceedings arising out of the normal course
of business, the financial risk of which are not considered material
in relation to the consolidated financial position of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
- 12 -
<PAGE> 13
FAIRWOOD CORPORATION AND SUBSIDIARIES
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.
FAIRWOOD CORPORATION
---------------------
(Registrant)
/s/ John B. Sganga
-----------------------
John B. Sganga
Chief Financial Officer,
Executive Vice President,
Secretary and Treasurer
Date: July 31, 1995
- 13 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> APR-02-1995
<PERIOD-END> JUL-01-1995
<CASH> 3,091
<SECURITIES> 0
<RECEIVABLES> 35,928
<ALLOWANCES> 3,142
<INVENTORY> 17,356
<CURRENT-ASSETS> 56,006
<PP&E> 19,972
<DEPRECIATION> 5,633
<TOTAL-ASSETS> 72,686
<CURRENT-LIABILITIES> 462,800
<BONDS> 370
<COMMON> 55,948
0
100
<OTHER-SE> (452,041)
<TOTAL-LIABILITY-AND-EQUITY> 72,686
<SALES> 42,361
<TOTAL-REVENUES> 42,361
<CGS> 38,724
<TOTAL-COSTS> 45,967
<OTHER-EXPENSES> 369
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,646
<INCOME-PRETAX> (18,608)
<INCOME-TAX> 0
<INCOME-CONTINUING> (18,608)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,608)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
