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 27, 1998
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)
(336) 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 27, 1998, there were outstanding 61,420,955 shares of Common Stock,
par value $.01 per share, and 704,301 shares of Nonvoting Common Stock, par
value $.01 per share, of the registrant.
<PAGE>
Part 1 - 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 27, June 28, June 27, June 28,
1998 1997 1998 1997
---------- ---------- ---------- ---------
Net sales $ 511,033 $ 553,590 $ 1,510,690 $1,567,241
Cost of sales 414,781 463,975 1,240,856 1,318,081
---------- ---------- ---------- ---------
Gross profit 96,252 89,615 269,834 249,160
Selling, administrative and
general expenses 37,406 41,811 110,843 117,143
Amortization of goodwill 4,539 4,539 13,618 13,618
Provision for restructuring 0 12,058 0 12,058
---------- ---------- ---------- ---------
Operating income before
interest and taxes 54,307 31,207 145,373 106,341
Interest expense 14,701 15,355 44,309 44,840
Equity in income of
joint ventures (1,074) 0 (74) 0
Other expense (income) - net (683) (4,874) (2,610) (11,060)
---------- ---------- ---------- ---------
Income before income taxes 41,363 20,726 103,748 72,561
Income tax expense:
Current 11,887 12,329 32,043 24,516
Deferred 3,525 (5,094) 7,960 4,054
---------- ---------- ---------- ---------
Total income tax expense 15,412 7,235 40,003 28,570
---------- ---------- ---------- ---------
Net income $ 25,951 $ 13,491 $ 63,745 $ 43,991
========== ========== ========== =========
Average common shares
outstanding 61,738 60,867 60,470 61,935
Net income per common share:
Basic earnings per share $ 0.42 $ 0.22 $ 1.05 $ 0.71
Diluted earnings per share $ 0.42 $ 0.22 $ 1.04 $ 0.71
See notes to consolidated financial statements.
1
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BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheets
(Amounts in thousands)
June 27, September 27,
1998 1997
---------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 11,356 $ 17,863
Short-term investments 27,266 23,832
Customer accounts receivable after deductions
of $22,339 and $20,688 for the
respective dates for doubtful accounts,
discounts, returns and allowances 316,671 331,457
Sundry notes and accounts receivable 14,865 6,762
Inventories 345,875 314,994
Prepaid expenses 3,337 2,719
---------- ----------
Total current assets 719,370 697,627
Fixed assets, at cost:
Land and land improvements 36,983 36,677
Buildings 436,150 400,212
Machinery, fixtures and equipment 620,921 607,502
---------- ----------
1,094,054 1,044,391
Less accumulated depreciation and amortization 478,630 459,744
---------- ----------
Fixed assets - net 615,424 584,647
Other assets:
Investments and receivables 39,503 22,670
Intangibles and deferred charges 36,375 29,781
Excess of purchase cost over net assets acquired 518,634 538,967
---------- ----------
Total other assets 594,512 591,418
---------- ----------
$ 1,929,306 $ 1,873,692
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long-term debt due currently $ 470 $ 470
Accounts payable - trade 83,371 102,898
Sundry payables and accrued expenses 93,441 100,039
Income taxes payable 8,932 16,406
Deferred income taxes 45,128 43,782
---------- ----------
Total current liabilities 231,342 263,595
Long-term liabilities:
Long-term debt 792,085 806,413
Other 59,371 58,595
---------- ----------
Total long-term liabilities 851,456 865,008
Deferred income taxes 120,977 114,363
Shareholders' equity:
Common stock issued 684 684
Capital in excess of par value 885,167 882,837
Accumulated deficit (70,556) (134,301)
Currency translation adjustments (14,135) (10,211)
---------- ----------
801,160 739,009
Less cost of common stock held in treasury (75,629) (108,283)
---------- ----------
Total shareholders' equity 725,531 630,726
---------- ----------
$ 1,929,306 $ 1,873,692
========== ==========
See notes to consolidated financial statements.
2
<PAGE>
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 27, June 28,
1998 1997
---------- ---------
Cash flows from operating activities:
Net income $ 63,745 $ 43,991
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization of fixed assets 49,391 48,771
Amortization of intangibles and
deferred debt expense 13,899 14,002
Deferred income taxes 7,960 4,054
Gain on disposal of assets (512) (9,068)
Provision for restructuring 0 12,058
Changes in assets and liabilities:
Customer accounts receivable - net 14,786 (1,283)
Sundry notes and accounts receivable (6,169) (1,157)
Inventories (38,204) (18,054)
Prepaid expenses (618) (763)
Accounts payable and accrued expenses (24,759) (19,556)
Change in income taxes payable (2,976) 4,245
Other (10,650) (7,210)
---------- ---------
Total adjustments 2,148 26,039
---------- ---------
Net cash provided by operating activities 65,893 70,030
---------- ---------
Cash flows from investing activities:
Capital expenditures (90,693) (61,042)
Proceeds from sales of assets 5,196 14,847
Investment in joint ventures (1,425) (2,750)
Change in investments 1,413 (341)
---------- ---------
Net cash used by investing activities (85,509) (49,286)
---------- ---------
Cash flows from financing activities:
Changes in short-term borrowings 0 300
Repayments of long-term debt (226,586) (15,283)
Proceeds from issuance of long-term debt 215,559 47,006
Proceeds from exercise of stock options 24,492 2,329
Purchase of treasury shares (356) (53,419)
---------- ---------
Net cash provided (used) by financing activities 13,109 (19,067)
---------- ---------
Net change in cash and cash equivalents (6,507) 1,677
Cash and cash equivalents at beginning of period 17,863 15,392
---------- ---------
Cash and cash equivalents at end of period $ 11,356 $ 17,069
========== =========
See notes to consolidated financial statements.
3
<PAGE>
BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Notes to Consolidated Financial Statements
As of and for the nine months ended June 27, 1998
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.
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 D.
The following table sets forth the computation of basic and diluted
earnings per share (in thousands):
Three Months Ended Nine Months Ended
------------------- -------------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
--------- --------- --------- -------
Numerator:
Net income........................ $ 25,951 $ 13,491 $ 63,745 $ 43,991
Effect of dilutive securities:
Convertible note................. - 65 116 295
------- -------- -------- --------
Numerator for diluted earnings
per share...................... $ 25,951 $ 13,556 $ 63,861 $ 44,286
======== ======== ======== ========
Denominator:
Denominator for basic earnings per
share - weighted-average shares.. 61,738 60,867 60,470 61,935
Effect of dilutive securities:
Stock options.................... 712 59 703 122
Convertible note................. - 407 249 622
-------- -------- -------- --------
Dilutive potential common shares.. 712 466 952 744
-------- -------- -------- --------
Denominator for diluted earnings
per share - adjusted weighted-
average shares and assumed
conversions.................... 62,450 61,333 61,422 62,679
======== ======== ======== ========
On March 13, 1998, 407,000 treasury shares were issued upon the conversion of
the remaining balance of the note referred to above. During the 1998 fiscal
year, outstanding shares also changed due to (i) the issuance of 186,444 shares
of treasury stock to settle Performance Unit awards; (ii) the issuance of
2,136,203 shares of treasury stock for exercise of stock options; and (iii) the
purchase of 16,507 shares for other transactions. On July 22, 1998, the Company
announced that the Board of Directors had authorized the Company to repurchase
up to 2,500,000 shares of common stock over the next 12 months to be used for
general purposes.
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Note E.
Inventories are summarized as follows (dollar amounts in thousands):
June 27, September 27,
1998 1997
---------- ----------
Inventories at average cost:
Raw materials............................. $ 48,340 $ 46,722
Stock in process.......................... 103,994 97,973
Produced goods............................ 213,379 190,326
Dyes, chemicals and supplies.............. 22,388 21,859
---------- ----------
388,101 356,880
Less excess of average cost over LIFO..... 42,226 41,886
---------- ----------
Total................................. $ 345,875 $ 314,994
========== ==========
Note F.
On December 10, 1998, the Company established a five-year, $225.0 million
Trade Receivables Financing Agreement ("Receivables Facility") with a bank. The
amount of borrowings allowable under the Receivables Facility at any time is a
function of the amount of then outstanding eligible trade accounts receivable up
to $225.0 million. Loans under the Receivables Facility bear interest, with
terms up to 270 days, at the bank's commercial paper dealer rate plus 0.1875%. A
commitment fee of 0.125% is charged on the unused portion of the Receivables
Facility. The Receivables Facility replaced the Company's A-1/D-1 rated
commercial paper facility and the related $225.0 million Receivables-Backed
Liquidity Facility established with a group of banks.
Note G.
On May 30, 1998, the Company formed a joint venture with Unifi, Inc. to
manufacture and market textured polyester yarns. Each of the partners
transferred their textured yarn manufacturing assets into a newly-formed limited
liability company. Under the agreement, Unifi, Inc. owns a majority ownership
interest and manages the business. The noncash transfer of assets from the
Company's Burlington Madison Yarn division included $24.6 million of inventory,
fixed assets and goodwill for an equity investment. This division now produces
only spun synthetic yarns.
Note H.
In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities", which is
required to be adopted in fiscal years beginning after June 15, 1999. The
Statement permits early adoption as of the beginning of any fiscal quarter after
its issuance. The Company expects to adopt the new Statement effective October
3, 1999. Under the Statement, all derivatives will be required to be recognized
on the balance sheet at fair value. Derivatives that are not hedges must be
adjusted to fair value through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in the fair value of derivatives will either
be offset against the change in fair value of the hedged assets, liabilities, or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. Under the Statement, any
ineffective portion of a derivative's change in fair value must be immediately
recognized in earnings. The Company has not yet determined what the effect of
Statement 133 will be on the earnings and financial position of the Company.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition
General
The Company's diluted earnings per share for the third quarter of the 1998
fiscal year were $0.42 per share, in comparison with $0.35 recorded in the same
quarter of the 1997 fiscal year before non-recurring items. Net sales increased
in the interior furnishings segment, while apparel segment sales declined.
Excluding businesses that have been sold or closed since last year's third
quarter, net sales declined 5.2%. Operating income before interest and taxes for
the third quarter of the 1998 fiscal year was $54.3 million, compared to $43.3
million for the same period in fiscal year 1997 excluding the 1997 provision for
restructuring. The improvement in the Company's operations reflects the effects
of the restructuring, cost-reduction and asset management steps that were
initiated during the past year.
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 27, 1998 and June 28, 1997,
respectively.
Three Months Ended Nine Months Ended
------------------- --------------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
--------- --------- --------- ---------
Net sales
Apparel products................... $ 297.7 $ 345.7 $ 889.1 $ 943.3
Interior furnishings products...... 213.3 207.9 621.6 623.9
-------- -------- --------- ---------
Total........................... $ 511.0 $ 553.6 $ 1,510.7 $ 1,567.2
======== ======== ========= =========
Operating income before interest
and taxes
Apparel products................... $ 29.5 $ 36.2 $ 86.7 $ 87.7
As a percentage of net sales..... 9.9% 10.5% 9.8% 9.3%
Interior furnishings products (a).. $ 24.8 $ 7.1 $ 58.7 $ 30.7
As a percentage of net sales..... 11.6% 3.4% 9.4% 4.9%
-------- -------- --------- ---------
Operating income before interest,
taxes, and provision for
restructuring....................... $ 54.3 $ 43.3 $ 145.4 $ 118.4
Provision for restructuring.......... - (12.1) - (12.1)
-------- -------- -------- ---------
Total............................ $ 54.3 $ 31.2 $ 145.4 $ 106.3
As a percentage of net sales..... 10.6% 5.6% 9.6% 6.8%
======== ======== ========= =========
(a) Fiscal year 1997 periods include a $4.9 million charge for exiting the
residential carpet product line. The nine month period ended June 28,
1997 includes a $3.8 million charge for the closing of a yarn spinning
plant in the Burlington House Area Rugs division.
RESULTS OF OPERATIONS
Comparison of Three Months ended June 27, 1998 and June 28, 1997.
Net sales for the third quarter of the 1998 fiscal year were $511.0
million, 7.7% lower than the $553.6 million recorded for the third quarter of
the 1997 fiscal year. Excluding those businesses that have been sold or closed
since last year's third quarter, net sales declined 5.2%. Net sales of products
for apparel markets for the third quarter of the 1998 fiscal year were $297.7
million, 13.9% lower than the $345.7 million recorded in the third quarter of
the 1997 fiscal year. This decrease was due primarily to lower volume in the
Menswear, Klopman and Sportswear divisions, partially offset by higher volume by
the Denim division. Net sales of products for interior furnishings markets for
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<PAGE>
the third quarter of the 1998 fiscal year were $213.3 million in comparison with
the $207.9 million recorded in the third quarter of the 1997 fiscal year. This
increase was due primarily to higher selling prices and increased volume in the
commercial carpet product line of the Lees division and higher volume in the
Area Rugs and Bacova divisions. Total export sales decreased 2.4% from the
comparable quarter of the prior year and represented 12.1% of net sales.
Operating income before interest and taxes for the third quarter of the
1998 fiscal year was $54.3 million, an increase of 74.0% from the $31.2 million
recorded in the third quarter of the 1997 fiscal year. Before the 1997 provision
for restructuring and the 1997 charge for exiting the residential carpet product
line, operating income before interest and taxes for the third quarter of the
1998 fiscal year increased 25.4% from the $43.3 million recorded in the third
quarter of the 1997 fiscal year. Amortization of goodwill was $4.5 million in
the third quarter of the 1998 and 1997 fiscal years. Operating income before
interest and taxes for the apparel products segment for the third quarter of the
1998 fiscal year was $29.5 million compared to $36.2 million recorded for the
third quarter of the 1997 fiscal year. This decrease was due primarily to lower
sales volumes and profits in the Klopman and Menswear divisions and the transfer
of the Company's textured yarn business to a joint venture, partially offset by
improved results in the Denim, Sportswear and Burlington Madison Yarn (spun)
divisions. Operating income before interest and taxes for the interior
furnishings products segment for the third quarter of the 1998 fiscal year was
$24.8 million compared to $7.1 million recorded for the third quarter of the
1997 fiscal year. This increase was due primarily to higher margins resulting
from volume and better product mix in the Lees division, the absence of the $4.9
million charge for exiting the residential carpet product line recorded in the
prior year, and improved results in the Burlington House division.
Interest expense for the third quarter of the 1998 fiscal year was $14.7
million, or 2.9% of net sales, compared with $15.4 million, or 2.8% of net
sales, in the third quarter of the 1997 fiscal year.
During the third quarter of the 1998 fiscal year, the Company recorded
equity in income of joint ventures of $1.1 million related to its joint venture
operation with Unifi, Inc., which commenced on May 30, 1998.
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 and favorable tax treatment
of export sales through a Foreign Sales Corporation.
Comparison of Nine Months ended June 27, 1998 and June 28, 1997.
Net sales for the first nine months of the 1998 fiscal year were $1,510.7
million, 3.6% lower than the $1,567.2 million recorded for the first nine months
of the 1997 fiscal year. Net sales of products for apparel markets for the first
nine months of the 1998 fiscal year were $889.1 million, 5.7% lower than the
$943.3 million recorded in the first nine months of the 1997 fiscal year. This
decrease was due primarily to lower volume in the Menswear, Klopman and
Sportswear divisions partially offset by mix improvement. The Denim division
sales were higher due to volume increases but offset somewhat by lower prices.
Net sales of products for interior furnishings markets for the first nine months
of the 1998 fiscal year were $621.6 million in comparison with the $623.9
million recorded in the first nine months of the 1997 fiscal year. This
reduction was due primarily to the closure in 1997 of the residential carpet
product line of the Lees division, lower price/mix in the Burlington House
division, and lower volume in the Area Rugs division, partially offset by higher
volume in the commercial carpet product line. Total export sales decreased 1.9%
from the comparable period of the prior year and represented 12.0% of net sales.
Operating income before interest and taxes for the first nine months of the
1998 fiscal year was $145.4 million, an increase of 36.8% from the $106.3
million recorded in the first nine months of the 1997 fiscal year. Amortization
of goodwill was $13.6 million in the first nine months of the 1998 and 1997
7
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fiscal years. Operating income before interest and taxes for the apparel
products segment for the first nine months of the 1998 fiscal year was $86.7
million compared to $87.7 million recorded for the first nine months of the 1997
fiscal year. This decrease primarily was composed of lower profits in the
Menswear and Klopman divisions and the transfer of the Company's textured yarn
business to a joint venture, partially offset by improved results in the Denim,
Sportswear and Burlington Madison Yarn (spun) divisions. Operating income before
interest and taxes for the interior furnishings products segment for the first
nine months of the 1998 fiscal year was $58.7 million compared to $30.7 million
recorded for the first nine months of the 1997 fiscal year. This increase was
due primarily to higher margins resulting from volume and better product mix in
the Lees division, improved results in the Burlington House and Area Rugs
divisions due to cost reductions, and the absence of the $4.9 million and $3.8
million charges for exiting the residential carpet product line and closing a
yarn spinning plant in the Burlington House Area Rugs division, respectively, in
the prior period.
Interest expense for the first nine months of the 1998 fiscal year was
$44.3 million, or 2.9% of net sales, compared with $44.8 million, or 2.9% of net
sales, in the first nine months of the 1997 fiscal year.
During the first nine months of the 1998 fiscal year, the Company recorded
equity in income of joint ventures of $0.1 million related to its textured yarn
joint venture operations with Unifi, Inc., which commenced on May 30, 1998, and
its denim fabric joint venture with Mafatlal Industries Limited in India.
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 and favorable tax treatment
of export sales through a Foreign Sales Corporation.
Liquidity and Capital Resources
During the first nine months of the 1998 fiscal year, the Company generated
$65.9 million of cash from operating activities, $5.2 million from sales of
assets, $24.5 million from the exercise of stock options, and $1.4 million from
other investing activities. Cash was primarily used for capital expenditures and
investment in joint ventures totalling $92.1 million, and $11.0 million for net
repayments of long-term debt. At June 27, 1998, total debt of the Company
(consisting of current and non-current portions of long-term debt and short-term
borrowings) was $792.6 million compared with $806.9 million at September 27,
1997 and $871.6 million at June 28, 1997.
The Company's principal uses of funds during the next several years will be
for capital investments (including the funding of acquisitions and
participations in joint ventures), repayment and servicing of indebtedness,
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 by the
credit facilities described in this section. The Company believes that these
sources of funds will be adequate to meet the Company's foregoing needs.
In August 1997, the Company issued $150.0 million principal amount of 7.25%
notes due August 1, 2027 ("Notes Due 2027") at a price of 99.402% plus accrued
interest. The Notes Due 2027 will be redeemable as a whole or in part at the
option of the Company at any time on or after August 2, 2007, and will also be
redeemable at the option of the holders thereof on August 1, 2007 in amounts at
100% of their principal amount. On September 26, 1995, the Company issued $150.0
million principal amount of 7.25% notes due September 15, 2005 ("Notes Due
2005") at a price of 99.926% plus accrued interest. The Notes Due 2005 are not
redeemable prior to maturity. The Notes Due 2027 and the Notes Due 2005 are
unsecured and rank equally with all other unsecured and unsubordinated
indebtedness of the Company.
The Company has a $750.0 million unsecured Revolving Credit Facility ("1995
Bank Credit Agreement") which expires in March, 2001. At July 31, 1998, the
Company had approximately $479.0 million in unused capacity under this facility.
8
<PAGE>
The Company also maintains $42.0 million in additional overnight borrowing
availability under bank lines of credit.
Loans under the 1995 Bank Credit Agreement bear interest at either (i)
floating rates generally payable quarterly based on the Adjusted Eurodollar Rate
plus 0.275% or (ii) Eurodollar rates or fixed rates which may be offered from
time to time by a Lender pursuant to a competitive bid request submitted by the
Company, payable up to 360 days. In addition, the Company pays an annual
facility fee of 0.15%. The interest rate and the facility fee are based on the
Company's current implied senior unsecured debt ratings of BBB minus and Baa3.
In the event that the Company's debt ratings improve, the interest rate and
facility fees would be reduced. Conversely, a deterioration in the Company's
debt ratings would increase the interest rate and facility fees.
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.
In December 1998, the Company, established a five-year, $225.0 million Trade
Receivables Financing Agreement ("Receivables Facility") with a bank. The amount
of borrowings allowable under the Receivables Facility at any time is a function
of the amount of then outstanding eligible trade accounts receivable up to
$225.0 million. Loans under the Receivables Facility bear interest, with terms
up to 270 days, at the bank's commercial paper dealer rate plus 0.1875%. A
commitment fee of 0.125% is charged on the unused portion of the Receivables
Facility. At July 31, 1998, $189.7 million in borrowings under this facility
with original maturities of up to 266 days was outstanding. The Receivables
Facility replaced the Company's A-1/D-1 rated commercial paper facility and the
related $225.0 million receivables-backed liquidity facility established with a
group of banks.
Because the Company's obligations under the 1995 Bank Credit Agreement and
the Receivables Facility 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, and in other countries; 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
9
<PAGE>
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.
10
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits.
27. Financial Data Schedule.
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.
11
<PAGE>
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.
Date: August 4, 1998 Charles E. Peters, Jr.
Senior Vice President and
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-03-1998
<PERIOD-END> JUN-27-1998
<CASH> 11,356
<SECURITIES> 27,266
<RECEIVABLES> 339,010
<ALLOWANCES> 22,339
<INVENTORY> 345,875
<CURRENT-ASSETS> 719,370
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0
0
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</TABLE>
