FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 1997
Commission file number 1-10984
BURLINGTON INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-1584586
(State or other juris- (I.R.S. Employer
diction of incorpora- Identification No.)
tion or organization)
3330 West Friendly Avenue, Greensboro, North Carolina 27410
(Address of principal executive offices)
(Zip Code)
(910) 379-2000
(Registrant's telephone number, including area code)
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
As of July 16, 1997, there were outstanding 56,284,389 shares of Common Stock,
par value $.01 per share, and 3,048,888 shares of Nonvoting Common Stock, par
value $.01 per share, of the registrant.
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Consolidated Statements of Operations
(Amounts in thousands, except for per share amounts)
Three Three Nine Nine
months months months months
ended ended ended ended
June 28, June 29, June 28, June 29,
1997 1996 1997 1996
--------- --------- ---------- ----------
Net sales........................ $ 553,590 $ 574,571 $1,567,241 $1,659,346
Cost of sales.................... 463,975 471,697 1,318,081 1,378,146
--------- --------- ---------- ----------
Gross profit..................... 89,615 102,874 249,160 281,200
Selling, administrative and
general expenses............... 41,811 42,711 117,143 127,587
Amortization of goodwill......... 4,539 4,557 13,618 13,662
Loss on closing of division...... - 29,856 - 29,856
Provision for restructuring...... 12,058 - 12,058 -
--------- --------- ---------- ----------
Operating income before
interest and taxes............. 31,207 25,750 106,341 110,095
Interest expense................. 15,355 16,111 44,840 49,033
Other expense (income) - net..... (4,874) 6,813 (11,060) 6,740
--------- --------- ---------- ----------
Income before income taxes....... 20,726 2,826 72,561 54,322
Income tax expense:
Current........................ 12,329 15,258 24,516 32,604
Deferred....................... (5,094) (13,002) 4,054 (8,026)
--------- --------- ---------- ----------
Total income tax expense..... 7,235 2,256 28,570 24,578
--------- --------- ---------- ----------
Income before
extraordinary item............. 13,491 570 43,991 29,744
Extraordinary item:
Loss from early
extinguishment of debt, net
of income tax benefit of
$454 for the nine months
ended June 29, 1996........... - - - 697
--------- --------- ---------- ----------
Net income....................... $ 13,491 $ 570 $ 43,991 $ 29,047
========= ========= ========== ==========
Average common shares
outstanding.................... 60,867 62,540 61,935 63,395
Net income per common share:
Income before
extraordinary item............ $ 0.22 $ 0.01 $ 0.71 $ 0.47
Extraordinary item............. - - - (0.01)
--------- --------- ---------- ----------
$ 0.22 $ 0.01 $ 0.71 $ 0.46
========= ========= ========== ==========
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BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheets
(Amounts in thousands)
June 28, September 28,
1997 1996
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents....................... $ 17,069 $ 15,392
Short-term investments.......................... 21,406 22,755
Customer accounts receivable after deductions
of $21,397 and $21,466 for the respective
dates for doubtful accounts, discounts,
returns and allowances........................ 342,618 342,390
Sundry notes and accounts receivable............ 7,765 6,608
Inventories..................................... 344,526 329,386
Prepaid expenses................................ 3,602 2,839
----------- -----------
Total current assets....................... 736,986 719,370
Fixed assets, at cost:
Land and land improvements...................... 34,669 34,332
Buildings....................................... 394,495 381,281
Machinery, fixtures and equipment............... 601,553 585,587
----------- -----------
1,030,717 1,001,200
Less accumulated depreciation and amortization.. 461,685 436,069
----------- -----------
Fixed assets - net......................... 569,032 565,131
Other assets:
Investments and receivables..................... 22,620 14,032
Intangibles and deferred charges................ 32,465 25,875
Net assets held for sale........................ 1,537 4,409
Excess of purchase cost over
net assets acquired............................ 543,507 557,125
----------- -----------
Total other assets......................... 600,129 601,441
----------- -----------
$ 1,906,147 $ 1,885,942
=========== ===========
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings........................... $ 300 $ -
Long-term debt due currently.................... 470 1,720
Accounts payable and accrued expenses........... 181,426 196,583
Income taxes payable............................ 18,830 20,674
Deferred income taxes........................... 44,783 46,375
----------- -----------
Total current liabilities.................. 245,809 265,352
Long-term liabilities:
Long-term debt.................................. 870,873 837,136
Other........................................... 60,138 57,360
----------- -----------
Total long-term liabilities................ 931,011 894,496
Deferred income taxes........................... 115,820 110,174
Shareholders' equity:
Common stock issued............................. 684 684
Capital in excess of par value.................. 882,160 885,185
Accumulated deficit............................. (149,008) (192,999)
Currency translation adjustments................ (10,586) (9,263)
----------- -----------
723,250 683,607
Less cost of common stock held in treasury...... (109,743) (67,687)
----------- -----------
Total shareholders' equity................. 613,507 615,920
----------- -----------
$ 1,906,147 $ 1,885,942
=========== ===========
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BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Consolidated Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(Amounts in thousands)
Nine Nine
months months
ended ended
June 28, June 29,
1997 1996
---------- ---------
Cash flows from operating activities:
Net income......................................... $ 43,991 $ 29,047
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of fixed assets.. 48,771 50,305
Amortization of intangibles
and deferred debt expense..................... 14,002 15,751
Deferred income taxes.......................... 4,054 (8,026)
Loss (gain) on disposal of assets
and other expense............................. (9,068) 7,633
Loss from early extinguishment of debt......... - 1,151
Restructuring/loss on closing of division...... 12,058 29,856
Changes in assets and liabilities:
Customer accounts receivable - net......... (1,283) (36,981)
Sundry notes and accounts receivable....... (1,157) 9,371
Inventories................................ (18,054) (9,260)
Prepaid expenses........................... (763) (676)
Accounts payable and accrued expenses...... (21,618) (7,337)
(Payment) receipt of financing fees............ 364 (36)
Change in interest payable..................... 3,053 5,896
Change in income taxes payable................. 4,245 7,742
Other.......................................... (8,565) (4,995)
---------- ---------
Total adjustments......................... 26,039 60,394
---------- ---------
Net cash provided by operating activities.......... 70,030 89,441
---------- ---------
Cash flows from investing activities:
Capital expenditures............................... (61,042) (58,748)
Proceeds from sales of assets...................... 14,847 4,420
Investment in joint venture........................ (2,750) (1,350)
Change in investments.............................. (341) (354)
---------- ---------
Net cash used by investing activities.............. (49,286) (56,032)
---------- ---------
Cash flows from financing activities:
Net change in short-term borrowings................ 300 3,125
Repayments of long-term debt....................... (15,283) (546,708)
Proceeds from issuance of long-term debt........... 47,006 557,325
Proceeds from exercise of stock options............ 2,329 -
Purchase of treasury stock......................... (53,419) (44,606)
---------- ---------
Net cash used by financing activities.............. (19,067) (30,864)
---------- ---------
Net change in cash and cash equivalents............ 1,677 2,545
Cash and cash equivalents at beginning of period... 15,392 10,507
---------- ---------
Cash and cash equivalents at end of period......... $ 17,069 $ 13,052
========== =========
3
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BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Notes to Consolidated Financial Statements
As of and for the nine months ended June 28, 1997
Note A.
With respect to interim quarterly financial data, which are unaudited, in
the opinion of Management, all adjustments necessary to a fair statement of the
results for such interim periods have been included. All adjustments were of a
normal recurring nature.
Note B.
Accounts of international subsidiaries are included as of dates three
months or less prior to that of the consolidated balance sheets.
Note C.
Income per common share is computed based on the weighted average number of
common shares outstanding during each period. In February 1997, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 128, "Earnings per Share", which the Company is required to adopt in the
first quarter of the 1998 fiscal year. At that time, the Company will be
required to change the method currently used to compute earnings per share and
to restate all prior periods. The impact of Statement No. 128 on the calculation
of earnings per share for these periods is not expected to be material.
Note D.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Note E.
Inventories are summarized as follows (dollar amounts in thousands):
June 28, September 28,
1997 1996
---------- ----------
Inventories at average cost:
Raw materials............................. $ 56,179 $ 49,481
Stock in process.......................... 100,219 96,836
Produced goods............................ 209,527 200,679
Dyes, chemicals and supplies.............. 22,711 23,100
---------- ----------
388,636 370,096
Less excess of average cost over LIFO..... 44,110 40,710
---------- ----------
Total................................. $ 344,526 $ 329,386
========== ==========
Note F.
During the June 1997 quarter, the Company recorded a $12.1 million pre-tax
provision for restructuring associated with reducing staff, consolidation of
certain yarn facilities and exiting the residential carpet product line. The
staff reduction includes severance costs of $5.2 million related to 215
employees. The components of the yarn manufacturing restructuring charge include
costs of $1.3 million for severance related to 286 employees, $2.2 million for
divestitures of machinery and equipment, and $1.4 million for divestitures of
4
<PAGE>
real estate. Costs related to exiting the residential carpet product line
include primarily $1.2 million for severance related to 70 employees. Production
capacity of the residential carpet product line will be utilized by the
commercial carpet product line within existing facilities. In addition, exiting
the residential carpet product line resulted in an inventory write-down and
other claims of $4.9 million included in cost of sales. Combining these charges,
the restructuring activities resulted in a pre-tax charge of $17.0 million,
$10.3 million after income taxes, or $0.17 per share.
Note G.
During the June 1997 quarter, the Company recognized a pre-tax gain of $4.3
million, $2.6 million after income taxes, or $0.04 per share, related to the
sale of a chemicals subsidiary. The related pre-tax gain is included in the
caption "Other expense (income) - net" in the consolidated statements of
operations.
Note H.
The Company utilizes interest rate agreements and foreign exchange
contracts to manage interest rate and foreign currency exposures. The principal
objective of such contracts is to minimize the risks and/or costs associated
with financial and global operating activities. The Company does not utilize
financial instruments for trading or other speculative purposes. The Company's
accounting policies are as follows:
INTEREST RATE INSTRUMENTS: The Company enters into interest rate swap, cap,
floor and collar agreements to reduce the impact of changes in interest rates on
all or a portion of its floating rate debt. The net cash paid for interest rate
cap, floor and collar agreements is recorded in Intangibles and Deferred Charges
in the consolidated balance sheet and charged to interest expense over the life
of the agreement. The net cash amounts paid or received on swap agreements are
accrued and recognized as an adjustment to interest expense. If an arrangement
is replaced by another instrument and no longer qualifies as a hedge instrument,
then it is marked to market and carried on the balance sheet at fair value.
FOREIGN EXCHANGE INSTRUMENTS: The Company enters into forward currency
exchange contracts in the regular course of business to manage its exposure
against foreign currency fluctuations on sales, raw material and fixed asset
purchase transactions denominated in foreign currencies. Foreign currency
receivables which have forward exchange contracts are recorded in U.S. dollars
at the applicable forward rate. Forward exchange contracts related to raw
material and fixed asset purchase transactions are recognized as adjustments to
the bases of the underlying assets.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition
General
The Company's earnings per share for the third quarter of the 1997 fiscal year
were $0.22 per share, in comparison with $0.01 recorded in the same quarter of
the 1996 fiscal year. Results of the third quarter of fiscal 1997 reflected a
net $7.7 million after-tax charge, or $0.13 per share, for one-time costs
associated with various streamlining actions, including reducing staff,
consolidation of certain yarn facilities and exiting the residential carpet
product line, offset by a gain from the sale of its Sedgefield chemical business
(see Notes F and G to the consolidated financial statements). Results of the
third quarter of fiscal 1996 included a $20.3 million after-tax charge ($0.33
per share) for costs associated with the closing of the Knitted Fabrics division
as well as an after-tax provision of $4.7 million ($0.07 per share) for legal
contingencies and losses on disposal of assets. Eliminating these non-recurring
items, earnings per share for the third quarter of fiscal 1997 were $0.35 per
share compared with $0.41 recorded during the comparable period of fiscal 1996.
Most of the Company's businesses remain firm. There is evidence of some
improvement in the denim area which has been suffering weakness resulting from
inventory reductions in the supply chain. The Company is taking a number of cost
cutting actions to improve profitability. While these moves penalize current
earnings, they should have a positive impact in 1998 and beyond.
Performance by Segment
The Company conducts its operations in two principal industry segments:
products for apparel markets and products for interior furnishings markets. The
following table sets forth certain information about the segment results for the
three months and nine months ended June 28, 1997 and June 29, 1996,
respectively.
6
<PAGE>
Three Months Ended Nine Months Ended
----------------- -------------------
June 28, June 29, June 28, June 29,
1997 1996 1997 1996
------- ------- -------- --------
(Dollar amounts in millions)
Net sales
Apparel products.................. $ 345.7 $ 360.0 $ 943.3 $1,022.5
Interior furnishings products..... 207.9 214.6 623.9 636.8
------- ------- -------- --------
Total.......................... $ 553.6 $ 574.6 $l,567.2 $1,659.3
======= ======= ======== ========
Operating income before
interest and taxes
Apparel products.................. $ 36.2 $ 37.5(b)$ 87.7 $ 96.7(b)
As a percentage of net sales.... 10.5% 10.4% 9.3% 9.5%
Interior furnishings products..... $ 7.1(a)$ 18.2 $ 30.7(c)$ 43.3
As a percentage of net sales.... 3.4% 8.5% 4.9% 6.8%
------- ------- -------- --------
Operating income before interest,
taxes, provision for restructuring,
and loss on closing of division.... $ 43.3 $ 55.7 $ 118.4 $ 140.0
Loss on closing of division......... $ - $ (29.9) $ - $ (29.9)
Provision for restructuring......... $ (12.1) $ - $ (12.1) $ -
------- ------- -------- --------
Total.......................... $ 31.2 $ 25.8 $ 106.3 $ 110.1
As a percentage of net sales.. 5.6% 4.5% 6.8% 6.6%
======= ======= ======== ========
(a) Includes $4.9 million charge for exiting the residential carpet product
line.
(b) Includes $3.7 million charge resulting from closing the Knitted Fabrics
division.
(c) Includes $3.8 million charge for closing a yarn spinning plant in the
Burlington House Area Rugs division and a $4.9 million charge for exiting
the residential carpet product line.
RESULTS OF OPERATIONS
Comparison of Three Months ended June 28, 1997 and June 29, 1996.
Net sales for the third quarter of the 1997 fiscal year were $553.6
million, 3.7% lower than the $574.6 million recorded for the third quarter of
the 1996 fiscal year. Net sales of products for apparel markets for the third
quarter of the 1997 fiscal year were $345.7 million, 4.0% lower than the $360.0
million recorded in the third quarter of the 1996 fiscal year. This reduction
was primarily due to the elimination of the volume produced and marketed by the
Knitted Fabrics division, which was closed in June, 1996. Net sales of products
for interior furnishings markets for the third quarter of the 1997 fiscal year
were $207.9 million in comparison with the $214.6 million recorded in the third
quarter of the 1996 fiscal year. The decrease was mainly attributable to lower
sales in the Burlington House and Area Rugs divisions, the sale of the Advanced
Textiles operation, partially offset by higher activity in the Lees Carpets
division. Total export sales increased 4% over the comparable quarter of the
prior year and represented 11.4% of net sales.
7
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Operating income before interest and taxes for the third quarter of the
1997 fiscal year was $31.2 million in comparison with $25.8 million recorded in
the same quarter of fiscal 1996. Before the 1997 provision for restructuring,
the 1997 charge for exiting the residential carpet product line and the 1996
loss on closing the Knitted Fabrics division, operating income before interest
and taxes for the third quarter of the 1997 fiscal year was $48.2 million in
comparison with $59.4 million recorded in the same quarter of fiscal 1996.
Amortization of goodwill was $4.5 million and $4.6 million in the third quarter
of the 1997 and 1996 fiscal years, respectively. Operating income before
interest and taxes for the apparel products segment for the third quarter of the
1997 fiscal year was $36.2 million compared to $41.2 million recorded for the
third quarter of the 1996 fiscal year before the charges for closing the Knitted
Fabrics division. The principal factors affecting this change were lower profits
of the Denim division and the absence of Knitted Fabrics operating losses in the
current period. Operating income before interest and taxes for the interior
furnishings products segment for the third quarter of the 1997 fiscal year was
$12.0 million before the charge for exiting the residential carpet product line,
compared to $18.2 million recorded for the third quarter of the 1996 fiscal
year. This decrease was mainly attributable to the reduced level of operations
in the Burlington House and Area Rugs divisions partially offset by improved
results in the Lees Carpets divisions.
Interest expense for the third quarter of the 1997 fiscal year was $15.3
million, or 2.8% of net sales, compared with $16.1 million, or 2.8% of net
sales, in the third quarter of the 1996 fiscal year. The decrease in interest
expense was due primarily to the lower level of debt outstanding.
Other income-net for the third quarter of the 1997 fiscal year was $4.9
million, consisting principally of a $4.3 million gain on the sale of a
chemicals subsidiary. Other expense for the third quarter of the 1996 fiscal
year was $6.8 million, consisting principally of: a $4.0 million provision for
legal contingencies, a $2.3 million provision for loss on sale of a
non-operating asset, a $1.3 million loss on the sale of J.G. Furniture, and
interest income.
Total income tax expense is different from the amounts obtained by applying
statutory rates to the income before income taxes primarily as a result of:
amortization of goodwill which is not tax-deductible, favorable tax treatment of
growing export sales through a Foreign Sales Corporation, and the utilization of
tax losses carried forward against current profits in foreign operations.
Comparison of Nine Months ended June 28, 1997 and June 29, 1996.
Net sales for the first nine months of the 1997 fiscal year were $1,567.2
million, 5.6% lower than the $1,659.3 million recorded for the first nine months
of the 1996 fiscal year. Net sales of products for apparel markets for the first
nine months of the 1997 fiscal year were $943.3 million, 7.7% lower than the
$1,022.5 million recorded in the first nine months of the 1996 fiscal year. This
reduction was primarily due to the elimination of the volume produced and
marketed by the Knitted Fabrics division, which was closed in June, 1996 and
lower sales in the Denim division partially offset by higher volume in the
Klopman division. Net sales of products for interior furnishings markets for the
8
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first nine months of the 1997 fiscal year were $623.9 million in comparison with
the $636.8 million recorded in the first nine months of the 1996 fiscal year.
The change in sales of the interior furnishings segment was mainly attributable
to the sale of the J.G. Furniture and Advanced Textiles operations and lower
sales in the Burlington House and Area Rugs divisions partially offset by higher
activity in the Lees Carpets division. Total export sales increased 12% over the
comparable period of the prior year and represented 11.8% of net sales.
Operating income before interest and taxes for the first nine months of the
1997 fiscal year was $106.3 million in comparison with $110.1 million recorded
in the same period of fiscal 1996. Amortization of goodwill was $13.6 million
and $13.7 million in the first nine months of the 1997 and 1996 fiscal years,
respectively. Operating income before interest and taxes for the apparel
products segment for the first nine months of the 1997 fiscal year was $87.7
million compared to $100.4 million recorded for the first nine months of the
1996 fiscal year before the charges for closing the Knitted Fabrics division.
The factors accounting for the decrease in operating income of the apparel
products segment were lower profits of the Denim division partially offset by
the absence of Knitted Fabrics division operating losses in the current period.
Operating income before interest and taxes for the interior furnishings products
segment for the first nine months of the 1997 fiscal year was $39.4 million
before the charges for restructuring activities, compared to $43.3 million
recorded for the first nine months of the 1996 fiscal year. This decrease was
mainly attributable to the reduced level of operations in the Burlington House
and Area Rugs divisions partially offset by improved results in the Lees Carpets
division.
Interest expense for the first nine months of the 1997 fiscal year was
$44.8 million, or 2.9% of net sales, compared with $49.0 million, or 3.0% of net
sales, in the first nine months of the 1996 fiscal year. The decrease in
interest expense was due primarily to the lower level of debt outstanding.
Other income-net for the first nine months of the 1997 fiscal year was
$11.1 million, consisting principally of $9.1 million in gains on the disposal
of certain non-core operating assets and interest income. Other expense for the
first nine months of the 1996 fiscal year was $6.7 million, consisting
principally of: a $4.0 million provision for legal contingencies, a $2.3 million
provision for loss on sale of a non-operating asset, a $1.3 million loss on the
sale of J.G. Furniture, and interest income.
An extraordinary loss from early extinguishment of debt - $1.2 million
before taxes, $0.7 million net of tax benefit, or $0.01 loss per share - was
recorded in the first nine months of the 1996 fiscal year. This resulted from
the write-off of deferred debt expense associated with the replacement of the
1994 Bank Credit Agreement in November, 1995.
Liquidity and Capital Resources
During the first nine months of the 1997 fiscal year, the Company generated
$70.0 million of cash from operating activities and $14.8 million from sales of
assets and had net borrowings of long- and short-term debt of $32.0 million.
Cash was primarily used as follows: $53.4 million for the repurchase of Company
9
<PAGE>
common stock and $63.8 million for capital expenditures and investment in an
Indian joint venture. At June 28, 1997, total debt of the Company (consisting of
current and non-current portions of long-term debt and short-term borrowings)
was $871.6 million compared with $838.9 million at September 28, 1996 and $926.8
million at June 29, 1996.
The Company's principal uses of funds for the next several years will be
for capital investments (including the funding of acquisitions and
participations in joint ventures), servicing of indebtedness and working capital
needs, and the repurchase of shares of Company common stock. The Company intends
to fund such needs principally from net cash provided by operating activities
and, to the extent necessary, from funds provided under the revolving credit
facility of its 1995 Bank Credit Agreement and the receivables-backed commercial
paper program described below. The Company believes that these sources of funds
will be adequate to meet the Company's foregoing needs.
The Company has a $750.0 million unsecured Revolving Credit Facility ("1995
Bank Credit Agreement") which expires in March, 2001. At July 25, 1997, the
Company had approximately $240.0 million in unused capacity under this facility.
The Company also maintains $27.0 million in additional overnight borrowing
availability under bank lines of credit.
Loans under the 1995 Bank Credit Agreement bear interest at optional
floating rates based on the Adjusted Eurodollar Rate plus 0.275% or Eurodollar
rates or fixed rates which may be offered by lenders pursuant to the competitive
bid procedures under the Agreement. In addition, the entire amount of the $750.0
million credit facility is subject to an annual facility fee of 0.15%. Changes
in the Company's debt rating from current levels would increase or decrease
borrowing costs.
The 1995 Bank Credit Agreement imposes various limitations on the liquidity
of the Company. The Agreement requires the Company to maintain minimum interest
coverage and maximum leverage ratios and a specified level of net worth. In
addition, the Agreement limits dividend payments, stock repurchases, leases, the
incurrence of additional indebtedness by consolidated subsidiaries, the creation
of additional liens and the making of investments in non-U.S. persons and
restricts the Company's ability to enter into certain merger, liquidation or
asset sale or purchase transactions.
The Company also has in effect, through its wholly-owned subsidiary, B.I.
Funding, Inc., a $225.0 million receivables-backed, A-1/D-1 rated commercial
paper program which is supported by a multi-bank liquidity facility expiring in
August 1998. At July 25, 1997, $180.2 million of commercial paper with original
maturities of up to 75 days was outstanding. There were no borrowings
outstanding at such date under the liquidity facility.
In September 1995, a $400 million senior debt shelf registration statement
was filed and became effective. The Company has utilized $150 million and has
remaining capacity of $250 million under this shelf registration.
10
<PAGE>
Because the Company's obligations under the 1995 Bank Credit Agreement and
commercial paper program bear interest at floating rates, the Company is
sensitive to changes in prevailing interest rates. The Company uses derivative
instruments to manage its interest rate exposure, rather than for trading
purposes.
Forward-Looking Statements
With the exception of historical information, the statements contained in
Management's Discussion and Analysis of Results of Operations and Financial
Condition and in other parts of this report include forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements
represent management's current expectations or beliefs as to the future and are
subject to risks and uncertainties which could affect the Company's actual
future results and which could cause those results to differ materially from the
expectations or beliefs expressed in the forward-looking statements. Such risks
and uncertainties include, but are not limited to: the outlook for global
economic activity and its impact upon the Company's businesses; the demand for
textile products, including the acceptance by customers and consumers of the
Company's products and the possible imbalances between consumer demand and
inventories of the Company's customers; the success of the Company's
value-added, fashion-driven product strategy; the Company's relationships with
its principal customers and suppliers; cost and availability of raw materials
and labor; the success of the Company's strategic plans to expand in the United
States, India and Mexico; the Company's ability to finance its capital expansion
and modernization programs, and the level of the Company's indebtedness and the
exposure to interest rate fluctuations; governmental legislation and regulatory
changes which impose higher costs, or greater restrictions, on the Company's
operations and which alter the existing regulation of international trade; and
the long-term implications of the current development of regional trade blocs
and the effect of the anticipated elimination of quotas and lowering of tariffs
under the GATT trade regime by 2005. Other risks and uncertainties may also be
described from time to time in the Company's other reports and filings with the
Securities and Exchange Commission.
11
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the
quarter for which this report is filed.
12
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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.
BURLINGTON INDUSTRIES, INC.
By /s/ CHARLES E. PETERS, JR.
Charles E. Peters, Jr.
Date: July 29, 1997 Senior Vice President and
Chief Financial Officer
By /s/ AGUSTIN J. DIODATI
Date: July 29, 1997 Agustin J. Diodati
Vice President and
Controller
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
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0
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